Redding City Council
March 18, 2025

When looking at susceptibility to vapes, cigarettes, and LCCs individually (Table 5-2), patterns of susceptibility varied by demographics. Female respondents were most susceptible to vapes (41.0%) out of all gender identities. Respondents who identified their gender in a different way were most susceptible to cigarettes (29.4%). Respondents who identified as males and respondents who identified in another way both had the highest susceptibility to LCCs (24.0%).

Packet Pg. 470
Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Results of the 2023 California Youth Tobacco Survey
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Table 5-2. Proportion of High School Respondents Who Had Never Vaped, Never Smoked Cigarettes, and/or Never Smoked LCCs Who Were
Susceptible to Future Use of These Products, by Gender Identity, Race/Ethnicity, Grade, LGBTQ+ Status, and General Mental Health Characteristic
Vapes Cigarettes LCCs
N % (95% CI) N % (95% CI) N % (95% CI)
Overall 24,693 37.8 (36.4–39.3) 28,865 20.1 (19.1–21.2) 30,054 21.4 (20.1–22.6) Gender identity
Male 11,313 34.5 (32.7–36.3) 12,882 18.6 (17.2–20.0) 13,285 24.0 (22.5–25.6) Female 10,620 41.0 (38.8–43.3) 12,734 20.5 (19.1–21.9) 13,293 18.0 (16.4–19.7) Identified in
another way
1,335 39.0 (35.2–43.0) 1,520 29.4 (25.5–33.6) 1,648 24.0 (21.2–27.0) Declined to
answer
139 34.9† (20.9–51.1) 176 22.4 (14.8–31.6) 187 19.9 (12.1–29.9) Race/ethnicity*
White 5,544 36.1 (34.0–38.3) 6,560 22.1 (20.2–24.1) 7,095 25.9 (23.9–28.0) African
American or
Black
523 38.5 (33.0–44.3) 651 12.2 (9.1–16.1) 662 12.2 (8.4–17.0) Hispanic 13,402 40.3 (38.0–42.7) 15,806 20.5
(19.1–22.0) 16,246 21.3 (19.7–22.9)
Asian 2,841 30.7 (28.8–32.6) 3,070 17.6 (15.9–19.4) 3,139 14.5 (12.9–16.2) Other 658 28.1 (23.4–33.2) 729 14.4 (10.6–19.0) 762 18.9 (14.9–23.5) Multiracial 1,663 37.9 (33.9–41.9) 1,983 21.0 (18.5–23.7) 2,083 24.9 (22.5–27.5) Grade
10 13,558 37.1 (35.5–38.7) 15,431 20.0 (18.9–21.1) 15,884 19.9 (18.9–21.0) 12 11,135 38.7 (36.8–40.7) 13,434 20.3 (18.5–22.1) 14,170 23.0 (21.1–25.0) LGBTQ+ status
LGBTQ+ 3,687 44.2 (41.2–47.3) 4,525 28.6 (26.3–31.1) 4,942 24.6 (22.6–26.8) Non-LGBTQ+ 17,416 36.3 (34.7–38.0) 20,225 17.9 (16.7–19.1) 20,780 20.4 (18.9–21.8) Unclear LGBTQ+
status
2,042 39.2 (35.0–43.5) 2,257 23.3 (19.8–27.2) 2,372 21.3 (18.5–24.2) Mental health
status

Good to
excellent
15,937 33.1 (31.5–34.7) 18,110 16.7
(15.5–17.9) 18,667 18.8 (17.4–20.1)
Fair 5,489 46.9 (44.6–49.1) 6,644 25.3 (23.5–27.1) 6,969 24.0 (22.0–26.2) Poor 2,113 47.9 (43.8–52.1) 2,712 29.3 (25.9–32.9) 2,943 29.0 (26.1–32.0) Note. LGBTQ+ = lesbian, gay, bisexual, transgender, queer or questioning; CI = confidence interval. * With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey.
† The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.

When examining susceptibility to specific products by race and ethnicity, Hispanic respondents had highest susceptibility to vapes (40.3%), and White respondents had the highest susceptibility to cigarettes (22.1%) and LCCs (25.9%). In general, respondents in Packet Pg. 471
Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Results of the 2023 California Youth Tobacco Survey
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12th grade had a higher susceptibility than respondents in 10th grade for all products.

LGBTQ+ respondents had the highest susceptibility to all three products, followed by respondents with unclear LGBTQ+ status and non-LGBTQ+ respondents.

Table 5-2 also presents susceptibility to vaping, smoking cigarettes, and LCCs by self-rated general mental health, among respondents who had never vaped, never smoked cigarettes, and/or never smoked LCCs. The results broken down by individual product were consistent with the overall findings: respondents with poor mental health status were the most susceptible, and respondents with good to excellent mental health were the least susceptible.

5.2 Susceptibility to Vape and Cigarette Use by Peer Vaping and Smoking
One factor that affects youth susceptibility is peer tobacco use. The survey asked respondents to indicate the proportion of their friends who used vapes or smoked cigarettes.

It should be noted that this question asked about vapes generally and did not specify the substance in the vape (e.g., nicotine, marijuana, or only flavoring). As a result, responses could include friends who used vapes with marijuana.

Overall, peer use and individual susceptibility appeared to be positively correlated. Tables 5- 3 and 5-4 present the susceptibility to future vape or cigarette use (among respondents who had never used these products), by the self-reported proportion of their friends who used the tobacco product. Susceptibility to vaping among respondents increased as the proportion of their friends who vaped increased, with half (52.1%) of those who had never vaped and were susceptible to vaping reporting that most or all of their friends vaped.

Table 5-3. Prevalence of Susceptibility to Vaping Among High School Respondents Who had Never Vaped, by Friend Vaping Status Friends Who Vape
Susceptible to Vapes
N % (95% CI)
None 3,921 28.4 (27.1–29.8)
Some 4,449 48.3 (45.9–50.7)
Most/all 995 52.1 (47.0–57.2)
Note. CI = confidence interval.

Respondents who had never smoked cigarettes and reported having some (33.5%) or most/all (31.5%) friends who smoked had higher susceptibility to cigarettes than those who did not have friends who smoked cigarettes (18.0%).

Packet Pg. 472
Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Results of the 2023 California Youth Tobacco Survey
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Table 5-4. Prevalence of Susceptibility to Cigarette Smoking Among High School Respondents Who Had Never Smoked Cigarette, by Friend Smoking Status
Friends Who Smoke Cigarettes
Susceptible to Cigarettes
N % (95% CI)
None 4,372 18.0 (17.0–19.0)
Some 1,114 33.5 (30.7–36.3)
Most/all 219 31.5 (23.7–40.3)
Note. CI = confidence interval.

5.3 Reasons for Vaping
Respondents who had vaped in the last 30 days were asked why they vaped. Table 5-5 shows the percentage of respondents who endorsed each reason. The most commonly endorsed response was “to relax or relieve stress and anxiety” (35.2%). The next top response was “for the nicotine buzz” (20.6%).

Table 5-5. R eported Reasons for Vaping Among High School Respondents Who Were Currently Vaping
Reason for Vaping
Current Vapers
N = 2,069
% (95% CI)
To relax or relieve stress and anxiety 35.2 (31.1–39.4) For the nicotine buzz 20.6 (17.8–23.6)
To have a good time with my friends 9.8 (7.7–12.2)
Because I am “hooked” 5.6 (4.3–7.3)
Cloud competitions 4.7 (3.2–6.7)
To focus or concentrate 4.6 (3.1–6.6)
It looks cool 4.6 (2.8–7.0)
To control my weight 4.3 (2.7-6.4)
They are available in flavors I like 4.0 (2.8–5.5)
To fit in/peer pressure 2.9 (1.8–4.6)
To try to quit using other products 2.1 (1.2–3.4)
I can use them unnoticed or hide them at home or at school 1.6 (0.7–3.0) Note. CI = confidence interval.

Packet Pg. 473
Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Results of the 2023 California Youth Tobacco Survey
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5.4 Adult Disapproval of Vaping and Smoking
Respondents were asked how adults who were important to them (such as parents, teachers, coaches, or relatives) would feel about the respondent using vapes. The same questions were asked about smoking cigarettes, using marijuana, and drinking alcohol.

Table 5-6 presents the percentage of respondents who reported that adults important to them would feel negatively (“negative” and “very negative” as opposed to “positive” or “very positive”) about the respondent vaping. Most respondents (96.3%) believed that adults important to them would feel negatively about the respondent vaping. Across all demographic categories, most respondents held this belief.

Table 5-6. Percentage of High School Respondents Who Believed That Adults Would Feel Negatively About Them Vaping and Smoking, by Demographics
Characteristic
Negative Views About Vaping Negative Views About Smoking N % (95% CI) N % (95% CI)
Overall 29,661 96.3 (95.6–96.9) 29,668 96.8 (96.2–97.3) Gender identity
Male 13,594 96.2 (95.1–97.0) 13,597 96.8 (96.0–97.4)
Female 13,399 97.4 (96.9–97.9) 13,404 97.8 (97.2–98.4)
Identified in another way 1,745 89.9 (87.3–92.2) 1,745 90.4 (87.7–92.6) Declined to answer 149 — — 149 — —
Race/ethnicity*
White 7,112 97.2 (96.4–97.9) 7,112 98.0 (97.4–98.5)
African American or Black 644 93.0 (90.1–95.2) 645 95.8 (92.0–98.1) Hispanic 15,921 96.0 (95.0–96.8) 15,924 96.4 (95.6–97.1) Asian 3,093 98.1 (97.2–98.8) 3,095 97.7 (96.7–98.5)
Other 750 91.6 (87.1–94.9) 750 92.4 (88.1–95.5)
Multiracial 2,078 96.2 (93.9–97.8) 2,079 96.6 (94.3–98.2) Grade
10 15,535 96.3 (95.5–97.0) 15,537 96.6 (95.9–97.2)
12 14,126 96.3 (95.5–96.9) 14,131 97.0 (96.3–97.6)
LGBTQ+ status
LGBTQ+ 5,100 95.0 (93.8–96.0) 5,103 95.4 (94.4–96.3)
Non-LGBTQ+ 21,134 97.0 (96.2–97.7) 21,139 97.6 (96.9–98.2) Unclear LGBTQ+ status 2,378 93.6 (91.4–95.3) 2,377 93.8 (91.6–95.6) Note. LGBTQ+ = lesbian, gay, bisexual, transgender, queer or questioning; CI = confidence interval. * With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey. — The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A.

Packet Pg. 474
Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Results of the 2023 California Youth Tobacco Survey
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Table 5-6 also presents the percentage of respondents who reported that adults important to them would feel negatively about the respondent smoking cigarettes. Almost all respondents (96.8%) believed that adults important to them would feel negatively about the respondent smoking cigarettes. This opinion was consistent across demographic categories.

5.5 Peer Disapproval of Vaping and Smoking
In addition to being asked about adults, respondents were asked to describe the views of “other respondents at your school” on using vapes. Response options included “very positive,” “positive,” “negative,” and “very negative.” The same questions were asked about smoking cigarettes.

Tables 5-7 and 5-8 present the percentage of respondents who believed that their peers would view vaping and smoking cigarettes negatively (“negative” or “very negative”). A greater proportion of respondents reported that their peers would view smoking negatively (83.6%) than those who reported that their peers would view vaping negatively (49.8%).

The percentage of respondents endorsing these views for vaping varied by vaping status, with respondents who had never used vapes reporting the highest peer disapproval.

Table 5-7. Percentage of High School Respondents Who Believed That Close Friends and Other Respondents at School Would View Vaping Negatively, by Vaping Status
Use Status
Negative Views About Vaping
N % (95% CI)
Overall 29,585 49.8 (48.2–51.5)
Vaping status
Never 23,686 52.3 (50.4–54.2)
Former 3,920 39.5 (36.9–42.1)
Current 1,979 37.4 (33.9–41.0)
Note. CI = confidence interval.

Table 5-8. Percentage of High School Respondents Who Believed That Close Friends and Other Respondents at School Would View Smoking Negatively, by Smoking Status
Use Status
Negative Views About Smoking
N % (95% CI)
Overall 29,589 83.6 (82.5–84.7)
Cigarette smoking status
Never 27,637 83.8 (82.7–85.0)
Former 1,518 80.9 (77.2–84.3)
Current 434 74.9 (66.4–82.2)
Note. CI = confidence interval.

Packet Pg. 475
Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Results of the 2023 California Youth Tobacco Survey
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The same was true for smoking, with the highest proportion of respondents who had never smoked believing their peers would view smoking negatively.

Table 5-9 presents the perceived prevalence of peers’ negative views of vaping and smoking by demographics. Male respondents had the highest perceived prevalence of negative views of both vaping (57.6%) and smoking cigarettes (86.8%). Across different races/ethnicities, Asian respondents most commonly reported that their peers viewed vaping negatively (63.2%), and African American or Black respondents most commonly reported that their peers viewed smoking cigarettes negatively (88.0%). It was more common for 10th-grade respondents to believe that peers viewed vaping negatively (52.2%) than 12th-grade respondents (47.2%), whereas 10th- and 12th-grade respondents held similar beliefs that their peers viewed smoking cigarettes negatively (83.5% and 83.7%, respectively).

Respondents with unclear LGBTQ+ status had the highest perceived prevalence of reporting that their peers had negative views of vaping (54.8%), whereas non-LGBTQ+ respondents had the highest prevalence of reporting that their peers had negative views of smoking (84.4%).

Table 5-9. Percentage of High School Respondents Who Believed That Close Friends or Other Respondents Would Feel Negatively About Them Smoking Cigarettes, by Demographics
Characteristic
Negative Views About Vaping
Negative Views About
Smoking
N % (95% CI) N % (95% CI)
Overall 29,606 49.8 (48.2–51.5) 29,599 83.6 (82.5–84.7) Gender identity
Male 13,548 57.6 (55.5–59.7) 13,542 86.8 (85.3–88.1)
Female 13,316 42.6 (40.4–44.9) 13,315 81.6 (79.9–83.3)
Identified in another way 1,740 46.9 (42.2–51.7) 1,741 78.3 (74.7–81.6) Declined to answer 151 50.5† (34.4–66.6) 150 — —
Race/ethnicity*
White 7,096 44.5 (42.1–47.0) 7,095 84.8 (83.0–86.4)
African American or Black 648 50.7 (45.5–55.8) 648 88.0 (83.8–91.4) Hispanic 15,886 49.6 (47.6–51.6) 15,879 82.3 (80.8–83.8) Asian 3,083 63.2 (59.0–67.3) 3,085 86.6 (84.0–88.9)
Other 750 51.1 (46.0–56.2) 750 82.2 (77.3–86.4)
Multiracial 2,081 48.9 (44.6–53.3) 2,081 82.6 (79.4–85.5) Grade
10 15,482 52.2 (50.1–54.4) 15,470 83.5 (82.1–84.8)
12 14,124 47.2 (45.5–49.0) 14,129 83.7 (82.4–85.0)
(continued)
Packet Pg. 476
Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Results of the 2023 California Youth Tobacco Survey
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Table 5-9. Percentage of High School Respondents W ho Believed That Close Friends or Other Respondents Would Feel Negatively About Them Smoking Cigarettes, by Demographics (continued)
Characteristic
Negative Views About Vaping
Negative Views About
Smoking
N % (95% CI) N % (95% CI)
LGBTQ+ status
LGBTQ+ 5,078 43.9 (41.0–46.9) 5,080 82.2 (79.9–84.4)
Non-LGBTQ+ 21,042 50.7 (48.9–52.5) 21,034 84.4 (83.2–85.6) Unclear LGBTQ+ status 2,365 54.8 (49.5–60.0) 2,366 81.4 (77.5–85.0) Note. LGBTQ+ = lesbian, gay, bisexual, transgender, queer or questioning; CI = confidence interval. * With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey. — The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.

5.6 Summary
Almost half of respondents who had never used vapes, cigarettes, and/or LCCs were susceptible to one or more of these products. Susceptibility to these three products combined was highest for individuals who identified their gender in another way than the options listed in the survey, non-Hispanic multiracial respondents, LGBTQ+ respondents, 12th graders, and respondents with poor mental health. Susceptibility varied by product.

Differences in susceptibility by race and ethnicity also varied by product. In general, LGBTQ+ respondents and respondents with poor or fair mental health were more susceptible to tobacco use than their counterparts, regardless of product. Among high school respondents who were currently vaping, the most commonly endorsed reason for vaping was “to relax or relieve stress and anxiety.” Respondents believed that adults who were important to them held overwhelmingly negative views on vaping and smoking cigarettes. When asked about the beliefs of their peers, only about half of respondents reported that their peers would view vaping negatively, while almost all respondents reported that their peers viewed smoking cigarettes negatively. While there was little variation in perceptions about adults’ opinions by gender identity, race/ethnicity, grade, and LGBTQ+ status, there were differences in peers’ views by these variables.

Packet Pg. 477
Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing)

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6. Tobacco Endgame Attitudes
As part of the survey, respondents were asked their opinions about several tobacco endgame policies. They were asked how much they disagreed or agreed with the following statements: (a) the sale of all tobacco products (e.g., cigarettes, cigars, chew, vapes) should end; (b) smoking cigarettes, little cigars, or cigarillos in all public places should end; and (c) the sale of flavored tobacco (e.g., cigarettes, chew, cigars, and vapes that taste like mint, fruit, candy, or liquor) should end. Response options were “strongly agree,” “agree,” “disagree,” and “strongly disagree.” Respondents were considered supporting these policies if they responded “strongly agree” or “agree” and not supporting them if they responded “disagree” or “strongly disagree.”
Table 6-1 shows responses to these questions by vaping status and cigarette smoking status. Overall, more than two-thirds of respondents supported these policies. The highest support was for a public tobacco use ban (73.7%), followed by a flavored tobacco ban (72.0%) and tobacco sales ban (66.9%). Respondents who had never vaped and never smoked cigarettes tended to express more support for these bans than those who formerly or currently vaped and smoked.

Table 6-1. Agreement with Tobacco Endgame Policies Among High School Respondents, by Vaping Status and Cigarette Smoking Status Characteristic
Support for Complete
Tobacco Sales Ban1
Support for Public
Tobacco Use Ban2
Support for Flavored
Tobacco Sales Ban3
N % (95% CI) N % (95% CI) N % (95% CI)
Overall 30,127 66.9 (65.7–68.1) 30,037 73.7 (72.4–74.9) 30,099 72.0 (71.1–72.9) Vaping status
Never 24,093 71.2 (70.2–72.3) 24,030 77.0 (75.8–78.1) 24,070 76.9 (76.1–77.8) Former 3,994 53.7 (50.9–56.4) 3,983 64.8 (62.2–67.2) 3,993 57.4 (54.8–60.0) Current 2,019 34.2 (30.1–38.3) 2,004 46.5 (42.1–50.9) 2,016 35.3 (31.1–39.6) Cigarette
smoking status

Never 28,115 68.7 (67.6–69.7) 28,040 75.2 (74.0–76.4) 28,091 73.8 (72.9–74.7) Former 1,560 42.6 (37.8–47.5) 1,550 53.1 (48.0–58.1) 1,559 47.1 (42.6–51.7) Current 439 19.0 (13.0–26.3) 435 29.9 (23.1–37.4) 436 26.8 (20.1–34.4) Note. CI = confidence interval.
1 Responded “strongly agree” or “agree” to the statement “the sale of all tobacco products (e.g., cigarettes, cigars, chew, vapes) should end.”
2 Responded “strongly agree” or “agree” to the statement “smoking cigarettes, little cigars, or cigarillos in all public places should end.”
3 Responded “strongly agree” or “agree” to the statement “the sale of flavored tobacco (e.g., cigarettes, chew, cigars, and vapes that taste like mint, fruit, candy, or liquor) should end.” Packet Pg. 478
Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Results of the 2023 California Youth Tobacco Survey
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We examined support for tobacco endgame policies by demographics (Table 6-2). Female respondents reported the highest level of support for all three bans, compared with other gender categories. Within race/ethnicity categories, Asian respondents reported the highest support across all three bans (75.5%, 82.6%, and 81.2%, respectively), and White respondents reported the least support (60.1%, 69.8%, and 69.2%, respectively).

Respondents in the 10th grade reported more support for all three bans (69.5%, 75.4%, and 74.1%, respectively) than 12th-grade respondents did (64.0%, 71.7%, and 69.7%, respectively). Non-LGBTQ+ respondents reported the highest support for all three bans (68.6%, 75.3%, and 73.7%, respectively) and LGBTQ+ respondents reported the least support (60.5%, 69.0%, and 67.0%, respectively).

Table 6-2. Agreement With Tobacco Endgame Policies Among High School Respondents, by Demographics
Characteristic
Support for Complete
Tobacco Sales Ban1
Support for Public
Tobacco Use Ban2
Support For Flavored
Tobacco Sales Ban3
N % (95% CI) N % (95% CI) N % (95% CI)
Overall 30,127 66.9 (65.7–68.1) 30,037 73.7 (72.4–74.9) 30,099 72.0 (71.1–72.9) Gender identity
Male 13,596 63.6 (61.8–65.5) 13,572 71.3 (69.7–72.8) 13,587 71.2 (69.7–72.7) Female 13,361 71.5 (69.9–73.0) 13,318 77.8 (76.2–79.4) 13,348 74.2 (72.9–75.5) Identified in
another way
1,747 57.4 (54.0–60.8) 1,738 63.5 (60.1–66.8) 1,744 64.5 (61.0–67.8) Declined to
answer
174 58.6 (44.5–71.7) 170 66.4 (52.4–78.7) 173 63.2 (49.3–75.6) Race/ethnicity*
White 7,202 60.1 (57.9–62.3) 7,181 69.8 (67.8–71.7) 7,199 69.2 (66.5–71.8) African
American or
Black
662 67.9 (61.4–73.9) 661 72.7 (65.6–79.1) 663 71.1 (66.6–75.3) Hispanic
16,204 68.4 (66.7–70.0) 16,149 73.9 (72.1–75.6) 16,181 71.9 (70.5–73.2) Asian 3,108 75.5 (73.1–77.9) 3,102 82.6 (80.5–84.6) 3,105 81.2 (79.1–83.2) Other 764 66.4 (60.0–72.3) 760 71.6 (66.5–76.4) 762 71.5 (64.8–77.6) Multiracial 2,120 63.8 (60.1–67.4) 2,118 72.9 (69.5–76.0) 2,123 70.2 (66.3–73.9) Grade
10 15,769 69.5 (67.8–71.2) 15,728 75.4 (73.6–77.1) 15,751 74.1 (72.7–75.6) 12 14,358 64.0 (62.3–65.6) 14,309 71.7 (70.1–73.4) 14,348 69.7 (68.2–71.2) (continued)
Packet Pg. 479
Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Results of the 2023 California Youth Tobacco Survey
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Table 6-2. Agreement With Tobacco Endgame Policies Among High School Respondents, by Demographics (continued)
Characteristic
Support for Complete
Tobacco Sales Ban1
Support for Public
Tobacco Use Ban2
Support For Flavored
Tobacco Sales Ban3
N % (95% CI) N % (95% CI) N % (95% CI)
LGBTQ+ status
LGBTQ+ 5,089 60.5 (58.2–62.7) 5,071 69.0 (66.7–71.3) 5,087 67.0 (64.7–69.2) Non-LGBTQ+ 21,103 68.6 (67.2–70.0) 21,055 75.3 (73.9–76.7) 21,086 73.7 (72.6–74.7) Unclear
LGBTQ+
status
2,385 65.8 (62.5–69.0) 2,376 71.9 (69.2–74.6) 2,379 70.0 (66.8–73.1) Note. LGBTQ+ = lesbian, gay, bisexual, transgender, queer or questioning; CI = confidence interval. * With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey. 1 Responded “strongly agree” or “agree” to the statement “the sale of all tobacco products (e.g., cigarettes, cigars, chew, vapes) should end.”
2 Responded “strongly agree” or “agree” to the statement “smoking cigarettes, little cigars, or cigarillos in all public places should end.”
3 Responded “strongly agree” or “agree” to the statement “the sale of flavored tobacco (e.g., cigarettes, chew, cigars, and vapes that taste like mint, fruit, candy, or liquor) should end.”

6.1 Summary
Over two-thirds of high school respondents supported tobacco endgame policies. Support was highest for a public use ban on tobacco. The second most popular endgame policy was a ban on flavored tobacco products. Support for endgame policies was highest among respondents who had never or formerly smoked cigarettes or used vapes and among respondents who identified as female. Some differences existed by race/ethnicity for each ban, but support was over 60% for all race/ethnicity groups and all endgame policies measured. Tenth-grade respondents supported the bans more than 12th-grade respondents, and non-LGBTQ+ respondents supported the bans more than LGBTQ+ respondents and respondents of unclear LGBTQ+ status.

Packet Pg. 480
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7. Geographic Differences
This chapter examines geographic differences. We only examined whether differences were significant for counties and county groupings to make sense of the large number of estimates provided by dividing the state into these groups. For these comparisons, we compared individual counties and county groups to the state average for each outcome using independent two sample t-tests with unequal variance.

7.1 Rurality
To capture tobacco use by rurality, students were divided into three categories based on the locations of their schools. The categories were obtained from the National Center for Education Statistics using school address.
10 Further information on this variable is available
in Appendix A. Table 7-1 presents prevalence of current any tobacco use and current use of specific tobacco products by rurality. Current use was most prevalent among respondents living in towns or rural settings (9.6%), compared with cities (6.9%) and suburban areas (6.8%). Estimates for cities and suburban areas were similar. The same pattern was present for current vaping, with higher prevalence estimates observed for towns or rural setting (8.0%) and similar vaping prevalence estimates for cities (5.7%) and suburban areas (5.3%). In general, this finding applies to all tobacco products included in the survey with few exceptions. Current use of HTPs was identical for all areas. In addition, use of hookah was very similar across all categories of rurality (0.9% town or rural settings, 0.7% cities, and 0.7% suburban areas).

Table 7-1. Prevalence of Current Use of Tobacco Products Among High School Respondents, by Rurality
Tobacco
Product
City Suburban Town or Rural
N % (95% CI) N % (95% CI) N % (95% CI)
Any tobacco use 11,637 6.9 (5.9–8.0) 12,853 6.8 (5.6–8.3) 6,476 9.6 (7.5–12.0) Vapes 11,626 5.7 (4.8–6.8) 12,835 5.3 (4.3–6.4) 6,469 8.0 (6.2–10.1) Cigarettes 11,628 1.1 (0.7–1.6) 12,844 1.0 (0.7–1.4) 6,471 1.9 (1.2–2.7) LCCs 11,634 0.7 (0.5–1.0) 12,844 0.4 (0.3–0.6) 6,473 1.0 (0.6–1.5) Cigars 11,628 0.9 (0.6–1.2) 12,848 0.6 (0.4–0.9) 6,471 1.3 (0.9–1.9) Hookah 11,637 0.7 (0.3–1.2) 12,853 0.7 (0.4–1.2) 6,476 0.9 (0.4–1.6) Smokeless 11,637 0.4 (0.2–0.8) 12,853 0.3 (0.2–0.5) 6,476 1.1 (0.6–1.9) HTPs 11,637 0.5 (0.3–0.8) 12,853 0.5 (0.3–0.8) 6,476 0.5 (0.1–1.1) (continued)

10 National Center for Education Statistics. (n.d.). Education demographic and geographic estimates.

Retrieved March 1, 2023, from https://nces.ed.gov/programs/edge/Geographic/LocaleBoundaries Packet Pg. 481
Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Results of the 2023 California Youth Tobacco Survey
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Table 7-1. Prevalence of Current Use of Tobacco Products Among High School Respondents, by Rurality (continued)
Tobacco
Product
City Suburban Town or Rural
N % (95% CI) N % (95% CI) N % (95% CI)
Nicotine
pouches
11,637 0.8 (0.6–1.1) 12,853 1.1 (0.7–1.5) 6,476 1.7 (1.2–2.2) Note. HTPs = heated tobacco products; LCCs = little cigars or cigarillos; CI = confidence interval.

Table 7-2 presents intentions to quit vaping in the next 30 days among respondents who currently vaped by rurality. Respondents who currently vaped and were living in suburban areas were most likely to report intending to quit (42.0%), and those living in a city were least likely to report this intention (35.7%).

Table 7-2. P ercentage of Respondents Who Reported Intending to Quit Vaping in the Next 30 Days Among High School Respondents Who Were Currently Vaping, by Rurality
Characteristic
Intending to Quit
N % (95% CI)
Overall 2,099 38.8 (34.3–43.3)
Rurality
City 755 35.7 (29.2–42.5)
Suburban 793 42.0 (34.1–50.3)
Town or rural 551 38.3 (32.6–44.2)
Note. CI = confidence interval.

7.2 County-Level Estimates
In addition to analyses by rurality, because the 2023 CYTS was designed to enable county- level prevalence estimates for tobacco use, we also examined tobacco use by county or county grouping. Figure 1 displays the counties that were combined into county groups. The individual counties that compose each county grouping are listed in a footnote of Table 7-3.

Packet Pg. 482
Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Results of the 2023 California Youth Tobacco Survey
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Figure 1. Map of County Groups

Table 7-3 presents these results for ever and current use of any tobacco product. The p- values in the table represent comparisons with the state average. The five counties with the highest level of any tobacco ever use were Shasta (41.2%), county group A (37.8%), county group D (36.4%), Butte (33.2%), and county group C (29.3%). The five counties with the lowest prevalence of ever use were Tulare County (15.0%), Contra Costa (15.5%), Merced (16.2%), Los Angeles (16.6%), and Santa Clara (17.5%).

Table 7-3. Prevalence of Ever and Current Use of Any Tobacco Products Among High School Respondents, by County Grouping
Characteristic
Ever Use Current Use
N % (95% CI) N % (95% CI)
Overall 30,966 21.6 (20.3–22.9) 30,966 7.3 (6.5–8.1)
County Group
County group A 810 37.8* (32.3–43.4) 810 16.4* (13.2–20.1) County group B 1,126 27.1 (20.7–34.2) 1,126 11.6 (6.9–17.8) County group C 491 29.3 (19.6–40.6) 491 12.3* (8.9–16.3) County group D 1,498 36.4* (26.2–47.6) 1,498 17.4* (9.1–28.8) County group E 607 20.8 (13.0–30.6) 607 5.5† (2.1–11.4) Alameda 622 20.9 (12.4–31.9) 622 7.7† (3.0–15.5)
(continued)
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Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Results of the 2023 California Youth Tobacco Survey
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Table 7-3. Prevalence of Ever and Current Use of Any Tobacco Products Among High School Respondents, by County Grouping (continued) Characteristic
Ever Use Current Use
N % (95% CI) N % (95% CI)
Butte 815 33.2* (24.3–43.2) 815 15.4* (7.5–26.8)
Contra Costa 472 15.5* (8.7–24.7) 472 2.8†* (0.2–11.7)
Fresno 348 22.9 (19.4–26.7) 348 6.4† (0.4–26.1)
Imperial 868 21.9 (18.5–25.7) 868 6.1 (4.6–7.9)
Kern 572 25.2* (21.0–29.9) 572 7.1 (5.3–9.3)
Kings 947 23.9 (17.1–31.9) 947 7.3 (4.8–10.6)
Los Angeles 1,300 16.6* (12.5–21.5) 1,300 5.0* (3.2–7.5) Madera 925 18.7* (15.2–22.6) 925 4.2* (2.4–6.6)
Merced 1,181 16.2* (11.7–21.6) 1,181 4.5* (2.4–7.6)
Orange 1,075 23.2 (17.0–30.4) 1,075 9.5 (5.7–14.7)
Placer 966 23.3 (17.8–29.6) 966 9.3 (6.8–12.4)
Riverside 725 24.1 (17.9–31.3) 725 7.3 (3.8–12.4)
Sacramento 1,434 19.1 (15.8–22.7) 1,434 5.6 (3.5–8.4)
San Bernardino 524 26.4 (19.8–33.8) 524 9.0 (5.8–13.1)
San Diego 1,100 24.1 (19.6–29.0) 1,100 9.0 (5.7–13.4)
San Francisco 212 21.6 (14.1–30.7) 212 6.0† (0.1–34.3)
San Joaquin 907 23.1 (18.6–28.0) 907 8.1 (5.0–12.2)
San Luis Obispo 1,251 29.2* (21.9–37.3) 1,251 12.4* (8.5–17.2) San Mateo 1,101 20.4 (12.7–30.1) 1,101 7.4† (3.3–13.8)
Santa Barbara 1,786 20.9 (18.4–23.7) 1,786 6.0 (3.5–9.4) Santa Clara 1,056 17.5 (12.2–23.8) 1,056 5.8 (3.4–9.1)
Santa Cruz 662 20.9† (9.4–37.2) 662 9.2† (2.6–22.1)
Shasta 1,022 41.2* (35.1–47.5) 1,022 16.8* (14.0–19.9)
Solano 568 28.5* (21.9–35.7) 568 8.8 (6.0–12.3)
Sonoma 168 26.5 (21.7–31.7) 168 10.5† (0.2–49.2)
Stanislaus 1,131 24.8 (20.4–29.6) 1,131 7.9 (5.3–11.3)
Tulare 962 15.0* (10.8–20.2) 962 4.2* (2.6–6.5)
Ventura 909 21.2 (13.6–30.6) 909 7.9† (3.6–14.7)
Yolo 825 21.2 (15.7–27.6) 825 7.3 (5.9–9.0)
Note. County group A includes Del Norte, Humboldt, Lake, Lassen, Mendocino, Modoc, Plumas, Siskiyou, Tehama, and Trinity counties. County group B includes Colusa, Glenn, Sutter, and Yuba counties. County group C includes Alpine, Amador, Calaveras, El Dorado, Inyo, Mariposa, Mono, Nevada, Sierra, and Tuolumne counties. County group D includes Marin and Napa counties. County Group E includes Monterey and San Benito counties. CI = confidence interval. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.
* p < 0.05. P-values compare the estimate for each individual county or county grouping with the state average prevalence for that outcome, using independent two sample t-tests with unequal variance.

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Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Results of the 2023 California Youth Tobacco Survey
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For current use of any tobacco, the five counties with the highest prevalence were county group D (17.4%), Shasta (16.8%), county group A (16.4%), Butte (15.4%), and San Luis Obispo (12.4%). The five counties with the lowest current use prevalence were Contra Costa (2.8%), Tulare (4.2%), Madera (4.2%), Merced (4.5%), and county group E (5.5%).

Estimates for Contra Costa and county group E should be interpreted with caution due to small sample sizes.

In addition to conducting analyses for any tobacco use, we also examined current use of all products included in the survey by county or county group. Tables 7-4a, 7-4b, and 7-4c present these estimates. Butte County (13.9%) had the highest prevalence of current vaping, and Contra Costa County (2.5%) had the lowest prevalence of current vaping, but both estimates should be interpreted with caution given limited precision (Table 7-4a).

For current cigarette smoking, county group D (6.0%) had the highest prevalence, and Tulare and Sacramento (both 0.4%) had the lowest prevalence of cigarette smoking. For current LCC use, San Francisco County (3.2%) had the highest prevalence of current use, and Santa Barbara (0.1%) had the lowest prevalence. For cigars, San Francisco County had the highest current use estimate (3.2%), but this estimate should be interpreted with caution given limited precision (Table 7-4b). Tulare had the lowest prevalence (0.2%).

For hookah, county group C (2.0%) had the highest current use prevalence, and Madera, Yolo, Merced, and Solano had the lowest prevalence (0.1%). For smokeless tobacco use, county group A (2.1%) had the highest current prevalence, and Kings County (0.1%) had the lowest prevalence of use. For HTP use (Table 7-4c), county group A (1.5%) had the highest prevalence of current use, and Madera, Kings, Santa Cruz, Ventura, and Contra Costa had the lowest prevalence (0.1%).

Packet Pg. 485
Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Results of the 2023 California Youth Tobacco Survey
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Table 7-4a. Prevalence of Current Use of Vapes, Cigarettes, and LCCs Among High School Respondents, by County Grouping
Vapes Cigarettes LCCs
Characteristic N % (95% CI) N % (95% CI) N % (95% CI)
Overall 30,930 5.9 (5.3–6.5) 30,943 1.2 (0.9–1.5) 30,951 0.6 (0.5–0.8) County Group

County group A 810 13.3* (10.7–16.4) 810 2.7* (1.3–4.9) 810 2.1* (1.1–3.5) County group B 1,124 9.4 (5.6–14.6) 1,124 1.9 (0.7–4.0) 1,125 1.8* (0.7–3.7) County group C 491 9.7* (5.7–15.2) 490 2.1 (0.6–5.3) 490 0.9 (0.0–4.7) County group D 1,497 12.8†* (6.0–23.0) 1,496 6.0†* (2.6–11.6) 1,496 1.0 (0.4–2.1) County group E 607 4.6† (1.5–10.7) 607 0.5* (0.1–1.5) 607 0.9 (0.2–2.8) Alameda 622 6.5† (2.5–13.1) 622 2.1† (0.5–5.6) 622 0.9 (0.2–2.9) Butte 815 13.9†* (5.7–26.7) 815 2.7† (0.7–6.7) 814 0.6 (0.1–1.9) Contra Costa 471 2.5† (0.1–12.9) 472 0.5* (0.0–2.3) 472 — — Fresno 347 5.1† (0.5–18.8) 347 1.0 (0.3–2.3) 348 1.7† (0.2–6.1) Imperial 868 5.7 (4.7–6.8) 868 0.7 (0.1–2.2) 868 0.2 (0.0–2.1) Kern 572 5.8 (4.7–7.2) 572 1.3† (0.1–5.9) 572 1.3† (0.1–5.3) Kings 945 5.9 (3.6–8.9) 946 0.6* (0.1–1.7) 945 0.8 (0.2–1.9) Los Angeles 1,298 3.5* (2.2–5.3) 1,297 0.5* (0.1–1.3) 1,299 0.2* (0.0–0.6) Madera 922 3.1†* (1.1–6.8) 924 0.7† (0.0–8.0) 925 0.5 (0.1–1.4) Merced 1,180 3.2* (1.8–5.4) 1,180 1.1 (0.3–2.9) 1,180 1.2 (0.5–2.4) Orange 1,072 7.2 (4.1–11.5) 1,074 2.2 (1.0–4.1) 1,075 1.0* (0.6–1.6) Placer 964 7.8 (5.2–11.1) 963 1.7 (0.9–2.9) 964 0.9 (0.5–1.5) Riverside 722 6.2 (3.1–10.7) 724 0.5* (0.1–1.3) 724 0.4 (0.1–1.3) Sacramento 1,434 4.8 (2.8–7.5) 1,433 0.4* (0.2–0.7) 1,434 0.4 (0.2–0.8) San Bernardino 524 7.6 (5.3–10.5) 524 2.3† (0.5–6.2) 524 0.7 (0.1–2.5) San Diego 1,100 7.8 (4.9–11.6) 1,100 1.2 (0.3–2.8) 1,100 0.5 (0.1–1.4) San Francisco 212 3.7† (0.0–25.5) 212 2.7† (0.0–18.7) 212 3.2† (0.0–38.4) San Joaquin 904 6.1 (3.8–9.1) 907 0.8 (0.3–1.5) 907 0.6 (0.2–1.6) San Luis Obispo 1,248 10.0* (6.8–13.9) 1,250 2.0* (1.4–2.8) 1,251 1.4* (0.8–2.1) San Mateo 1,101 6.7† (2.9–12.9) 1,101 1.6 (0.4–4.1) 1,101 0.3* (0.1–0.8) Santa Barbara 1,784 4.2* (2.7–6.1) 1,784 1.1 (0.2–3.2) 1,785 0.1* (0.0–0.3) Santa Clara 1,056 5.2 (3.1–8.3) 1,056 0.6* (0.2–1.5) 1,056 0.4 (0.1–1.2) Santa Cruz 659 6.5† (1.8–15.8) 661 3.0† (0.3–11.7) 662 0.4 (0.1–1.5) Shasta 1,021 14.8* (11.7–18.3) 1,022 2.6* (1.5–4.0) 1,022 1.9* (1.1–3.0) Solano 568 7.7 (5.4–10.7) 568 1.0 (0.2–3.3) 567 0.4 (0.1–1.4) Sonoma 168 10.0†* (0.8–35.3) 168 2.3* (1.2–4.1) 168 0.3† (0.0–31.9) Stanislaus 1,128 7.1 (4.9–9.8) 1,131 1.0 (0.4–2.0) 1,130 0.2* (0.0–0.7) Tulare 962 3.4* (1.9–5.7) 961 0.4* (0.1–1.1) 962 0.2* (0.0–0.9) Ventura 909 6.2† (2.5–12.5) 909 1.2 (0.5–2.2) 909 0.9 (0.3–2.1) Yolo 825 5.5 (3.9–7.5) 825 1.8 (0.6–4.1) 825 1.5* (0.7–2.7) Note. LCCs = little cigars or cigarillos. County group A includes Del Norte, Humboldt, Lake, Lassen, Mendocino, Modoc, Plumas, Siskiyou, Tehama, and Trinity counties. County group B includes Colusa, Glenn, Sutter, and Yuba counties. County group C includes Alpine, Amador, Calaveras, El Dorado, Inyo, Mariposa, Mono, Nevada, Sierra, and Tuolumne counties. County group D includes Marin and Napa counties. County Group E includes Monterey and San Benito counties. CI = confidence interval. — The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05.
*p < 0.05. P-values compare the estimate for each individual county or county grouping with the state average prevalence for that outcome, using independent two sample t-tests with unequal variance. Packet Pg. 486 Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Results of the 2023 California Youth Tobacco Survey
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Table 7-4b. Prevalence of Current Use of Cigars, Hookah, and Smokeless Tobacco Among High School Respondents, by County Grouping
Cigars Hookah Smokeless
Characteristic N % (95% CI) N % (95% CI) N % (95% CI)
Overall 30,947 0.8 (0.7–1.0) 30,966 0.7 (0.5–1.0) 30,966 0.5 (0.4–0.7) County Group

County group A 810 2.3 (0.9–4.8) 810 1.4 (0.5–3.2) 810 2.1* (1.0–3.7) County group B 1,126 1.8 (0.8–3.6) 1,126 0.7 (0.1–1.9) 1,126 1.7* (0.6–3.7) County group C 491 1.3 (0.5–2.6) 491 2.0* (0.9–3.8) 491 1.5 (0.5–3.6) County group D 1,496 1.2 (0.6–2.0) 1,498 1.1 (0.6–1.8) 1,498 1.3 (0.3–3.7) County group E 606 0.9 (0.1–3.8) 607 0.6 (0.3–1.1) 607 0.2 (0.0–1.8) Alameda 621 0.9 (0.2–2.3) 622 0.6 (0.1–1.7) 622 0.3 (0.0–1.1) Butte 815 0.6 (0.1–1.8) 815 0.9 (0.6–1.3) 815 1.1 (0.1–4.5) Contra Costa 472 0.2* (0.0–1.9) 472 — — 472 0.4 (0.0–1.6) Fresno 348 1.4 (0.2–4.6) 348 0.5† (0.0–11.5) 348 0.5† (0.0–11.5) Imperial 868 0.3* (0.0–1.5) 868 0.3 (0.0–3.1) 868 — —
Kern 571 1.5† (0.1–5.9) 572 1.0† (0.0–5.8) 572 0.9† (0.0–6.0) Kings 946 0.9 (0.3–2.0) 947 0.4 (0.0–1.9) 947 0.1* (0.0–0.6) Los Angeles 1,298 0.4* (0.1–0.9) 1,300 1.0 (0.3–2.5) 1,300 0.3 (0.1–1.1) Madera 925 0.3* (0.0–1.5) 925 0.1* (0.0–0.6) 925 0.2 (0.0–3.2) Merced 1,180 1.3 (0.4–3.0) 1,181 0.1* (0.0–0.3) 1,181 0.3 (0.1–1.0) Orange 1,075 1.0 (0.3–2.2) 1,075 0.7 (0.3–1.6) 1,075 0.6 (0.1–1.5) Placer 964 1.7* (1.3–2.3) 966 1.4* (0.8–2.3) 966 1.4* (1.0–2.0) Riverside 724 0.6 (0.1–2.3) 725 1.0 (0.1–3.5) 725 0.7 (0.1–2.7) Sacramento 1,434 0.5* (0.2–0.9) 1,434 0.2* (0.1–0.6) 1,434 0.2* (0.0–0.5) San Bernardino 524 1.1 (0.1–3.6) 524 0.9 (0.1–3.8) 524 0.9 (0.1–3.8) San Diego 1,100 0.8 (0.3–1.9) 1,100 0.8 (0.1–2.8) 1,100 0.2* (0.0–0.7) San Francisco 211 3.2† (0.0–38.3) 212 — — 212 — —
San Joaquin 907 0.2* (0.0–0.9) 907 0.8 (0.3–1.7) 907 0.2 (0.0–1.6) San Luis Obispo 1,249 2.1* (1.1–3.5) 1,251 0.6 (0.2–1.2) 1,251 0.6 (0.2–1.2) San Mateo 1,101 0.8 (0.4–1.6) 1,101 0.6 (0.2–1.4) 1,101 0.3 (0.0–0.9) Santa Barbara 1,784 0.6 (0.2–1.5) 1,786 0.2* (0.1–0.6) 1,786 0.4 (0.2–0.7) Santa Clara 1,056 0.7 (0.1–2.2) 1,056 0.5 (0.1–1.5) 1,056 0.5 (0.1–1.2) Santa Cruz 661 0.8 (0.1–2.9) 662 0.2 (0.0–2.0) 662 0.4 (0.0–2.0) Shasta 1,022 1.9 (0.6–4.3) 1,022 1.0 (0.6–1.5) 1,022 1.9* (0.7–4.3) Solano 568 0.8 (0.2–1.9) 568 0.1* (0.0–1.2) 568 0.4 (0.0–1.6) Sonoma 168 1.6† (0.0–89.6) 168 — — 168 0.3† (0.0–38.1)
Stanislaus 1,131 1.1 (0.3–2.7) 1,131 0.4 (0.1–1.2) 1,131 0.5 (0.2–1.0) Tulare 961 0.2* (0.0–1.4) 962 0.3 (0.1–1.0) 962 0.2* (0.0–0.8) Ventura 909 1.3 (0.5–2.9) 909 0.4 (0.0–1.3) 909 — —
Yolo 825 1.3* (0.8–1.8) 825 1.1 (0.6–1.8) 825 0.6 (0.1–2.3) Note. County group A includes Del Norte, Humboldt, Lake, Lassen, Mendocino, Modoc, Plumas, Siskiyou, Tehama, and Trinity counties. County group B includes Colusa, Glenn, Sutter, and Yuba counties. County group C includes Alpine, Amador, Calaveras, El Dorado, Inyo, Mariposa, Mono, Nevada, Sierra, and Tuolumne counties. County group D includes Marin and Napa counties. County Group E includes Monterey and San Benito counties. CI = confidence interval.
— The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.

Packet Pg. 487
Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Results of the 2023 California Youth Tobacco Survey
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Table 7-4c. Prevalence of Current Use of Heated Tobacco Products and Nicotine Pouches Among High School Respondents, by County Grouping HTPs Nicotine Pouches
Characteristic N % (95% CI) N % (95% CI)
Overall 30,966 0.5 (0.3–0.7) 30,966 1.1 (0.9–1.3)
County Group

County group A 810 1.5* (0.7–2.9) 810 3.3* (1.4–6.2)
County group B 1,126 0.9 (0.3–1.8) 1,126 2.6* (1.1–5.0) County group C 491 0.5 (0.0–2.3) 491 2.7* (1.4–4.8)
County group D 1,498 1.2* (0.7–1.7) 1,498 4.8* (2.5–8.4) County group E 607 0.5 (0.0–2.6) 607 0.8 (0.2–2.2)
Alameda 622 0.9 (0.3–2.2) 622 0.6 (0.2–1.5)
Butte 815 0.5 (0.1–1.5) 815 1.3 (0.1–5.1)
Contra Costa 472 0.1* (0.0–1.4) 472 0.1* (0.0–1.0)
Fresno 348 — — 348 1.0 (0.3–2.4)
Imperial 868 0.2 (0.0–1.9) 868 0.8 (0.2–2.3)
Kern 572 0.9+ (0.0–6.0) 572 1.7 (0.5–4.3)
Kings 947 0.1* (0.0–0.8) 947 0.9 (0.3–2.3)
Los Angeles 1,300 0.6 (0.2–1.3) 1,300 0.8 (0.3–1.8)
Madera 925 0.1* (0.0–0.4) 925 0.4* (0.0–3.4)
Merced 1,181 0.2* (0.0–0.5) 1,181 0.4* (0.2–0.9)
Orange 1,075 0.6 (0.2–1.4) 1,075 1.6 (0.8–3.0)
Placer 966 0.8 (0.5–1.3) 966 2.5* (1.4–4.1)
Riverside 725 1.0 (0.1–3.6) 725 1.2 (0.4–2.9)
Sacramento 1,434 0.2 (0.0–0.7) 1,434 0.3* (0.0–1.2)
San Bernardino 524 0.2 (0.0–1.5) 524 0.8 (0.2–2.2)
San Diego 1,100 0.2 (0.0–0.7) 1,100 0.8 (0.3–1.8)
San Francisco 212 1.3† (0.0–27.2) 212 0.7 (0.0–3.3)
San Joaquin 907 0.3 (0.0–1.0) 907 1.4 (0.2–5.1)
San Luis Obispo 1,251 0.5 (0.1–1.3) 1,251 2.0 (1.0–3.6) San Mateo 1,101 0.2* (0.0–0.6) 1,101 0.9 (0.6–1.3)
Santa Barbara 1,786 0.2* (0.1–0.4) 1,786 0.7 (0.2–1.6)
Santa Clara 1,056 0.3 (0.0–1.1) 1,056 0.7 (0.2–1.8)
Santa Cruz 662 0.1* (0.0–0.9) 662 1.3 (0.1–5.1)
Shasta 1,022 0.6 (0.2–1.6) 1,022 4.1†* (1.9–7.4)
Solano 568 0.4 (0.0–1.5) 568 1.3 (0.2–4.3)
Sonoma 168 0.4† (0.0–31.1) 168 2.1† (0.0–81.6)
Stanislaus 1,131 0.4 (0.1–1.0) 1,131 0.6* (0.3–1.1)
Tulare 962 — — 962 0.6 (0.2–1.4)
Ventura 909 0.1* (0.0–0.8) 909 0.8 (0.2–2.1)
Yolo 825 1.1* (0.6–1.7) 825 1.7 (0.7–3.5)
Note. HTPs = heated tobacco products; LCCs = little cigars or cigarillos. County group A includes Del Norte, Humboldt, Lake, Lassen, Mendocino, Modoc, Plumas, Siskiyou, Tehama, and Trinity counties. County group B includes Colusa, Glenn, Sutter, and Yuba counties. County group C includes Alpine, Amador, Calaveras, El Dorado, Inyo, Mariposa, Mono, Nevada, Sierra, and Tuolumne counties. County group D includes Marin and Napa counties. County Group E includes Monterey and San Benito counties. CI = confidence interval.
— The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.

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For nicotine pouches, county group D (4.8%) had the highest prevalence of current use, while Sacramento had the lowest use (0.3%).

7.3 Region
In addition to county-level estimates, we calculated regional estimates for ever and current any tobacco use. Table 7-5 presents these estimates. For ever use, the Northern region had the highest prevalence estimate (25.0%), and the Greater Bay Area had the lowest prevalence (20.9%). In terms of current use, the Northern region had the highest prevalence estimate (9.6%), and the Central region had the lowest estimate (6.4%).

Table 7-5. Prevalence of Ever and Current Use of Any Tobacco Products Among High School Respondents, by Region
Characteristic
Ever Use Current Use
N % (95% CI) N % (95% CI)
Overall 30,966 21.6 (20.3–22.9) 30,966 7.3 (6.5–8.1)
Region
Northern 7,424 25.0 (22.7–27.4) 7,424 9.6 (7.9–11.5)
Central 6,131 22.3 (20.7–24.1) 6,131 6.4 (5.0–8.0)
Greater Bay 7,873 20.9 (18.9–23.2) 7,873 7.0 (5.7–8.5)
Southern 9,538 21.1 (19.0–23.3) 9,538 7.2 (6.0–8.5)
Note. The Northern region of California includes the following counties: Alpine, Amador, Butte, Calaveras, Colusa, Del Norte, El Dorado, Glenn, Humboldt, Lake, Lassen, Mendocino, Modoc, Nevada, Placer, Plumas, Sacramento, Shasta, Sierra, Siskiyou, Sutter, Tehama, Tuolumne, Trinity, Yolo, and Yuba. The Central region includes the following counties: Fresno, Inyo, Kern, Kings, Madera, Mariposa, Merced, Mono, Stanislaus, and Tulare. The Greater Bay Area includes Alameda, Contra Costa, Marin, Monterey, Napa, San Benito, San Francisco, San Joaquin, San Mateo, Santa Clara, Santa Cruz, and Solano, Sonoma. The Southern region includes the following counties: Imperial, Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Luis Obispo, Santa Barbara, and Ventura. CI = confidence interval.

Table 7-6 presents current tobacco prevalence estimates for the tobacco products included in the 2023 CYTS, by region. For vaping, the Northern region (8.1%) had the highest prevalence estimate, and the Central region (5.1%) had the lowest prevalence estimate.

The prevalence estimates for the remaining tobacco products varied little by region.

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Table 7-6. Prevalence of Current Use of Tobacco Products Among High School Respondents, by Region Vapes Cigarettes LCCs Cigars
Characteristic N % (95% CI) N % (95% CI) N % (95% CI) N % (95% CI) Overall 30,930 5.9 (5.3–6.5) 30,943 1.2 (0.9–1.5) 30,951 0.6 (0.5–0.8) 30,947 0.8 (0.7–1.0) Region
Northern 7,419 8.1 (6.6–9.8) 7,418 1.4 (1.0–1.9) 7,419 0.9 (0.6–1.2) 7,422 1.1 (0.9–1.5) Central 6,121 5.1 (4.1–6.4) 6,125 1.0 (0.5–1.6) 6,127 1.1 (0.6–1.8) 6,127 1.1 (0.6–1.9) Greater Bay 7,865 5.9 (4.7–7.2) 7,870 1.4 (1.0–2.0) 7,870 0.7 (0.4–1.1) 7,867 0.9 (0.5–1.3) Southern 9,525 5.6 (4.7–6.7) 9,530 1.1 (0.7–1.6) 9,535 0.5 (0.3–0.7) 9,531 0.7 (0.5–1.0) Hookah Smokeless HTPs Nicotine Pouches
Characteristic N % (95% CI) N % (95% CI) N % (95% CI) N % (95% CI) Overall 30,966 0.7 (0.5–1.0) 30,966 0.5 (0.4–0.7) 30,966 0.5 (0.3–0.7) 30,966 1.1 (0.9–1.3) Region
Northern 7,424 0.9 (0.6–1.2) 7,424 1.0 (0.7–1.3) 7,424 0.6 (0.5–0.8) 7,424 1.7 (1.2–2.3) Central 6,131 0.6 (0.2–1.4) 6,131 0.5 (0.1–1.4) 6,131 0.3 (0.0–1.1) 6,131 1.0 (0.6–1.4) Greater Bay 7,873 0.4 (0.3–0.6) 7,873 0.4 (0.2–0.5) 7,873 0.5 (0.3–0.8) 7,873 1.0 (0.7–1.4) Southern 9,538 0.8 (0.5–1.4) 9,538 0.5 (0.2–0.8) 9,538 0.5 (0.3–0.8) 9,538 1.0 (0.7–1.4) Note. HTPs = heated tobacco products; LCCs = little cigars or cigarillos. The Northern region of California includes the following counties:

Alpine, Amador, Butte, Calaveras, Colusa, Del Norte, El Dorado, Glenn, Humboldt, Lake, Lassen, Mendocino, Modoc, Nevada, Placer, Plumas, Sacramento, Shasta, Sierra, Siskiyou, Sutter, Tehama, Tuolumne, Trinity, Yolo, and Yuba. The Central region includes the following counties: Fresno, Inyo, Kern, Kings, Madera, Mariposa, Merced, Mono, Stanislaus, and Tulare. The Greater Bay Area includes Alameda, Contra Costa, Marin, Monterey, Napa, San Benito, San Francisco, San Joaquin, San Mateo, Santa Clara, Santa Cruz, and Solano, Sonoma.

The Southern region includes the following counties: Imperial, Los Angeles, Orange. CI = confidence interval.

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7.4 Summary
We compared tobacco prevalence estimates by rurality, region, and county or county group for any tobacco use and the use of specific products. We found multiple differences. In general, towns and rural settings tended to have higher tobacco use in comparison to cities and suburban areas. Estimates varied by county. Estimates for specific products were consistent across regions, with the exception of vaping, which was higher in the Northern region of the state.

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8. Marijuana Use
This chapter presents data on the prevalence of ever and current marijuana use across demographic characteristics, the usual mode of marijuana use among respondents who reported using more than one mode of administration, and marijuana and tobacco co-use.

Finally, this chapter presents data on secondhand exposure to marijuana smoke by demographics and how respondents acquired marijuana. Measuring marijuana use in the CYTS is important given high levels of marijuana use among respondents who use tobacco and the use of some tobacco products to consume marijuana (e.g., LCCs).

8.1 Marijuana Use
Table 8-1 presents the prevalence of ever and current marijuana use among high school respondents by demographic characteristics. The rates of ever using marijuana (23.0%) and currently using marijuana (10.4%) were higher than the rates of ever and currently using tobacco (21.6% and 7.3%, respectively).

Table 8-1. Prevalence of Marijuana Use Among High School Respondents, by Gender Identity, Race/Ethnicity, Grade, and LGBTQ+ Status Ever Use Current Use
Characteristic N % (95% CI) N % (95% CI)
Overall 30,928 23.0 (21.7–24.4) 30,920 10.4 (9.4–11.5)
Gender identity
Male 13,742 20.9 (19.1–22.7) 13,739 9.3 (8.3–10.5)
Female 13,513 24.2 (22.8–25.7) 13,509 10.6 (9.3–12.1)
Identified in another way 1,764 27.7 (23.7–32.0) 1,764 14.1 (11.3–17.3) Declined to answer 197 24.8 (16.5–34.6) 197 12.6 (6.4–21.4) Race/ethnicity*
White 7,377 29.2 (27.1–31.4) 7,375 14.9 (13.3–16.5)
African American or Black 687 30.8 (25.8–36.3) 687 18.1 (13.2–23.8) Hispanic 16,672 21.9 (20.5–23.3) 16,667 8.9 (7.8–10.0)
Asian 3,171 9.0 (7.2–11.1) 3,171 3.4 (2.4–4.5)
Other 785 17.3 (13.7–21.3) 785 9.2 (6.6–12.2)
Multiracial 2,166 29.2 (26.2–32.2) 2,165 13.9 (11.7–16.3) Grade
10 16,229 17.7 (16.2–19.2) 16,226 7.2 (6.3–8.2)
12 14,699 28.9 (27.0–31.0) 14,694 14.0 (12.4–15.6)
LGBTQ+ status
LGBTQ+ 5,141 34.6 (32.0–37.3) 5,140 18.0 (15.8–20.4)
Non-LGBTQ+ 21,334 21.0 (19.7–22.4) 21,329 8.9 (7.9–10.0) Unclear LGBTQ+ status 2,413 15.2 (12.7–17.9) 2,413 6.4 (5.0–8.0) Note. LGBTQ+ = lesbian, gay, bisexual, transgender, queer or questioning; CI = confidence interval. * With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey.

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We observed differences in marijuana use by demographics. Respondents who identified their gender in another way (14.1%) and respondents who declined to answer gender identity questions (12.6%) had a higher prevalence of current marijuana use than respondents who identified as female (10.6%) or male (9.3%). African American or Black respondents (18.1%) had the highest prevalence of current use of marijuana. Asian respondents had the lowest rate of marijuana use (3.4%). The prevalence of current marijuana use among 12th-grade respondents was almost twice that of 10th-grade respondents (14.0% vs. 7.2%, respectively). Prevalence of current use among LGBTQ+ respondents was more than double (18.0%) that of non-LGBTQ+ respondents (8.9%) and respondents of unclear LGBTQ+ status (6.4%).

The CYTS included questions designed to determine methods of using marijuana.

Respondents who reported ever using marijuana were asked how they had used it. Those who endorsed ever using more than one type of marijuana product were asked, “During the last 30 days, how did you usually use marijuana?” Table 8-2 presents the usual mode of marijuana use among these respondents. Smoking (49.0%) was the most common mode of use, followed by vaping (37.9%).

Table 8-2. Usual Mode of Marijuana Use Among High School Respondents Who Reported Currently Using Multiple Marijuana Products
Mode of Use
Usual Mode of Use
N = 3,444
% (95% CI)
Smoked 49.0 (45.4–52.6)
Ate 9.2 (7.7–10.9)
Drank 0.2 (0.1–0.5)
Dabbed 2.7 (1.7–3.9)
Vaped 37.9 (34.4–41.4)
Used in some other way 1.1 (0.5–2.0)
Note. CI = confidence interval.

8.2 Marijuana Use and Tobacco Co-use
Table 8-3 further categorizes current marijuana use into current co-use of marijuana and any tobacco product or current use of marijuana only. Overall, the prevalence for current use of marijuana only (5.5%) was higher than current use of both marijuana and tobacco (4.9%). When looking by gender identity, race/ethnicity and grade, this pattern generally remained, but there were several exceptions. Respondents who identified their gender in another way and those who declined to answer the gender question reported higher co-use than use of marijuana only. The same was true for Asian respondents and those in the other race category.

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Table 8-3. Prevalence of Current Marijuana- Only Use and Current Co-Use of Marijuana and Any Tobacco Product Among High School Respondents, by Gender Identity, Race/Ethnicity, and Grade
Characteristic N
Use of Marijuana Only
% (95% CI)
Co-Use of Marijuana
and Any Tobacco
Product
% (95% CI)
Overall 30,920 5.5 (4.9–6.3) 4.9 (4.3–5.5)
Gender identity
Male 13,739 4.9 (4.3–5.7) 4.4 (3.7–5.1)
Female 13,509 6.0 (5.0–7.2) 4.6 (3.9–5.4)
Identified in another way 1,764 5.1 (3.5–7.2) 9.0 (6.6–11.9) Declined to answer 197 3.2† (0.8–8.2) 9.4† (4.0–17.9)
Race/ethnicity*
White 7,375 7.7 (6.7–8.8) 7.2 (6.1–8.3)
African American or Black 687 11.7 (7.4–17.3) 6.4 (4.1–9.4) Hispanic 16,667 4.7 (4.1–5.5) 4.1 (3.5–4.9)
Asian 3,171 1.6 (1.0–2.4) 1.7 (1.1–2.6)
Other 785 3.7 (2.0–6.0) 5.5 (3.1–8.9)
Multiracial 2,165 7.2 (5.6–9.2) 6.6 (5.0–8.6)
Grade
10 16,226 3.7 (3.0–4.6) 3.5 (2.9–4.1)
12 14,694 7.5 (6.7–8.4) 6.4 (5.5–7.5)
LGBTQ+ status
LGBTQ+ 5,140 9.7 (7.9–11.9) 8.3 (6.7–10.1)
Non-LGBTQ+ 21,329 4.8 (4.1–5.4) 4.2 (3.6–4.8)
Unclear LGBTQ+ status 2,413 3.0 (2.1–4.2) 3.4 (2.4–4.6) Note. LGBTQ+ = lesbian, gay, bisexual, transgender, queer or questioning; CI = confidence interval. * With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.

Table 8-3 also compares co-use of marijuana and tobacco and marijuana-only use across demographics. Among all gender identity categories, co-use was highest among respondents who declined to answer the gender question (9.4%) or identified their gender in another way (9.0%). In terms of race/ethnicity, co-use of marijuana and tobacco was highest among White respondents (7.2%) compared to all other race/ethnicity categories.

Co-use was higher among 12th graders (6.4%) than among 10th graders (3.5%). Use of Packet Pg. 494
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marijuana only was also higher for 12th graders (7.5%) than 10th graders (3.7%).

Marijuana-only use and co-use were both higher among LGBTQ+ respondents (9.7% and

8.3%, respectively) than non-LGBTQ+ respondents (4.8% and 4.2%, respectively) or respondents of unclear LGBTQ+ status (3.0% and 3.4%, respectively).

Table 8-4 presents the prevalence of use of vapes, cigarettes, and LCCs among respondents who reported current marijuana use. Among respondents currently using marijuana, 39.1% reported currently vaping, 8.6% reported currently smoking cigarettes, and 5.2% reported currently smoking LCCs.

Table 8-4. Prevalence of Current Co- Use of Marijuana and Tobacco Among High School Respondents Currently Using Marijuana, by Tobacco Product Currently Used
Tobacco Product N
Co-Use of Marijuana and Tobacco
% (95% CI)
Vapes 3,450 39.1 (35.4–43.0)
Cigarettes 3,450 8.6 (6.8–10.8)
LCCs 3,450 5.2 (4.1–6.6)
Note. LCCs = little cigars or cigarillos; CI = confidence interval.

8.3 Exposure to Secondhand Marijuana Smoke in Last 2 Weeks The 2023 CYTS asked about high school respondents’ exposure to secondhand marijuana smoke in a car or room in the last 2 weeks. The survey also asked about exposure to marijuana smoke outside, which includes being near someone who was smoking marijuana outside of a restaurant, outside of a store, on a sidewalk, or at a park, playground, or beach in the last 2 weeks.

Table 8-5 presents exposure to secondhand marijuana smoke by race/ethnicity. Overall,

21.3% of respondents reported being exposed to marijuana smoke in a car or room, and

26.6% of respondents reported exposure outside in the last 2 weeks. Rates of exposure to marijuana smoke in a car or room were highest among African American or Black respondents (31.3%) and lowest for Asian respondents (9.0%). The rate of exposure to secondhand marijuana smoke outside was highest among White respondents (34.8%) and lowest for Asian respondents (18.6%).

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Table 8-5. Prevalence of Last-2-Week Exposure to Marijuana Smoke in Car or Room or Outside Among High School Respondents, by Race/Ethnicity Exposure in Car or Room Exposure Outside
Characteristic N % (95% CI) N % (95% CI)
Overall 30,880 21.3 (19.8–22.9) 30,606 31.1 (29.4–32.8) Race/ethnicity*
White 7,371 29.2 (27.2–31.3) 7,300 34.8 (32.1–37.6)
African American or Black 687 31.3 (26.8–36.1) 678 30.5 (23.2–38.6) Hispanic 16,639 18.8 (17.2–20.5) 16,491 31.7 (29.4–34.0) Asian 3,171 9.0 (7.2–11.1) 3,155 18.6 (16.2–21.1)
Other 780 19.2 (14.9–24.1) 773 30.2 (23.1–38.1)
Multiracial 2,162 27.8 (24.9–30.9) 2,142 34.0 (30.4–37.9) Note. CI = confidence interval.
* With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey.

Table 8-6 presents data on secondhand exposure to marijuana smoke in a car or room by race/ethnicity and marijuana user status. Respondents who reported current users of marijuana also reported greater exposure in a car or room (77.9%), relative to respondents who reported former (38.0%) and never (11.0%) use. Patterns observed by user status were consistent across race/ethnicity categories.

Table 8-6. Prevalence of Last-2-Week Exposure to Marijuana Smoke in Car or Room Among High School Respondents, by Race/Ethnicity and Marijuana Use Status
Characteristic
Never Use Former Use Current Use
N % (95% CI) N % (95% CI) N % (95% CI)
Overall 23,133 11.0 (10.0–12.0) 4,303 38.0 (34.3–41.8) 3,444 77.9 (75.0–80.7) Race/ethnicity*
White 4,975 15.3 (13.4–17.3) 1,140 41.5 (36.9–46.1) 1,256 84.0 (80.2–87.3) African American
or Black
449 15.3 (10.6–21.1) 125 51.5 (36.7–66.1) 113 78.2 (70.6–84.6) Hispanic 12,700 9.9 (8.7–11.1) 2,390 35.4 (30.4–40.7) 1,549 73.7 (68.8–78.3) Asian 2,824 5.1 (3.7–6.8) 223 35.3 (27.1–44.1) 124 71.0 (56.2–83.2) Other 624 10.3 (6.5–15.3) 83 38.1† (21.7–56.8) 73 — —
Multiracial 1,499 15.6 (12.9–18.5) 338 38.8 (30.0–48.1) 325 78.6 (70.0–85.8) Note. CI = confidence interval.
* With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey.
— The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.

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Table 8-7 presents data on secondhand exposure to marijuana smoke outside in the last 2 weeks by race/ethnicity and marijuana use status. Respondents who were currently using marijuana reported higher exposure to marijuana smoke outside (64.8%) than those who reported former (42.8%) or never (24.6%) use. Patterns observed by user status were consistent across race/ethnicity categories.

Table 8-7. Prevalence of Last-2-Week Exposure to Marijuana Smoke Outside Among High School Respondents, by Race/Ethnicity and Marijuana Use Status
Characteristic
Never Use Former Use Current Use
N % (95% CI) N % (95% CI) N % (95% CI)
Overall 22,952 24.6 (22.9–26.4) 4,253 42.8 (39.3–46.3) 3,398 64.8 (60.2–69.3) Race/ethnicity*
White 4,938 26.4 (24.0–29.0) 1,126 42.7 (36.5–49.1) 1,233 67.4 (63.1–71.5) African American
or Black
442 25.8 (19.4–33.1) 123 40.5+ (25.9–56.4) 113 — —
Hispanic 12,600 25.7 (23.3–28.2) 2,362 43.4 (38.1–48.8) 1,529 67.1 (62.5–71.5) Asian 2,809 15.8 (13.6–18.1) 222 40.0 (30.4–50.3) 124 57.8 (45.6–69.2) Other 616 23.6 (16.2–32.5) 82 45.3+ (29.6–61.7) 75 76.1 (60.3–88.0) Multiracial 1,487 25.9 (21.7–30.5) 334 41.7 (32.8–51.0) 321 67.4 (58.7–75.2) Note. CI = confidence interval.
* With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey.
— The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.

8.4 Acquisition of Marijuana
Table 8-8 presents how respondents who were currently using marijuana reported acquiring marijuana. The most common method was buying it themselves (38.2%), followed by someone giving it to them (27.0%). Of those who reported buying it themselves, the most common method of buying it was from another person (44.9%) or from a store or dispensary (38.3%).

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Table 8-8. Method of Acquiring Marijuana Among High School Respondents Currently Using Marijuana
Method
Overall
N = 3,417
% (95% CI)
I ask someone to buy it for me 14.4 (12.4–16.5)
Someone gives it to me 27.0 (24.4–29.7)
I ask someone for it 7.4 (6.0–9.0)
I take it from someone 2.9 (1.8–4.5)
I grow my own 3.2 (2.1–4.8)
I get it some other way 6.8 (5.4–8.5)
I buy it myself* 38.2 (35.1–41.4)
From a store or dispensary 38.3 (32.5–44.5)
On the internet (including apps) 4.2 (2.2–7.1)
From a delivery service 5.6 (3.1–9.4)
From someone 44.9 (39.4–50.4)
Some other way 7.0 (4.7–10.0)
Note. CI = confidence interval.
* Numbers below this row represent the percentage of respondents endorsing each location among those who reported buying their own marijuana.

8.5 Summary
Current use of marijuana was higher than current use of tobacco products. Current marijuana use was highest among respondents who declined to answer gender questions or identified their gender in another way. African American or Black respondents reported the highest use among race/ethnicity categories, and 12th-grade respondents reported higher use than respondents in 10th grade. LGBTQ+ respondents had the highest prevalence of current use. The two most common modes of marijuana use were smoking and vaping.

The prevalence of current use of marijuana only was slightly higher than co-use of tobacco and marijuana. Co-use was highest among White respondents, respondents who declined to answer questions about gender identity, 12th graders, and LGBTQ+ respondents. Vaping was the most common form of tobacco use among respondents co-using marijuana and tobacco, followed by cigarettes and LCCs.

Exposure to marijuana smoke was higher outside than in a car or room and was highest for respondents currently using marijuana. Exposure to secondhand marijuana smoke in a car or room was highest among African American or Black respondents, and exposure outside was highest among multiracial respondents. Among respondents currently using marijuana, the most common method of obtaining marijuana among high school respondents was buying it for themselves and, among those who purchased it, the most popular purchasing source was from someone else.

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9. Changes in Tobacco Use Between 2022 and 2023
This chapter compares the prevalence of current tobacco use for high school students between the 2022 and 2023 CYTS. When making comparisons, the reader should note that COVID-19 resulted in fewer responding students than expected in 2022. As a result, the confidence intervals for 2022 estimates tend to be wider than the confidence intervals for 2023 due to the differences in sample size. This hindered our ability to detect significant changes between 2022 and 2023. There were no changes in question wording or other aspects of the instrument that would affect the ability to compare responses to survey items between 2022 and 2023.

9.1 Tobacco Product Use
Table 9-1 presents the prevalence of ever and current use for any tobacco use and all tobacco products measured in both surveys. Current use of hookah increased, and ever and current use of nicotine pouches increased.

Table 9-1. Prevalence of Ever and Current Tobacco Product Use by Year Among High School Students
Ever Use Current Use
Tobacco Product
2022
N = 8,909
% (95% CI)
2023
N = 30,966
% (95% CI)
2022
N = 8,909
% (95% CI)
2023
N = 30,966
% (95% CI)
Any tobacco use 20.3 (18.4–22.2) 21.6 (20.3–22.9) 6.6 (5.4–8.1) 7.3 (6.5–8.1) Vapes 17.6 (15.9–19.4) 18.3 (17.2–19.5) 5.6 (4.5–6.9) 5.9 (5.3–6.5) Cigarettes 5.3 (4.3–6.6) 5.6 (4.9–6.5) 1.2 (0.7–2.0) 1.2 (0.9–1.5) LCCs 2.1 (1.7–2.6) 2.3 (2.0–2.6) 0.6 (0.4–0.8) 0.6 (0.5–0.8) Cigars 3.1 (2.4–3.9) 3.3 (2.9–3.7) 0.6 (0.4–0.8) 0.8 (0.7–1.0) Hookah 2.2 (1.8–2.6) 2.5 (2.0–3.0) 0.4 (0.3–0.6)* 0.7 (0.5–1.0)* Smokeless 1.3 (0.9–1.8) 1.5 (1.3–1.7) 0.3 (0.2–0.5) 0.5 (0.4–0.7) HTPs 0.9 (0.6–1.2) 1.2 (1.0–1.4) 0.3 (0.2–0.5) 0.5 (0.3–0.7) Nicotine pouches 2.4 (1.9–2.9)* 3.1 (2.7–3.5)* 0.6 (0.4–0.9)* 1.1 (0.9–1.3)* Note. HTPs = heated tobacco products; LCCs = little cigars or cigarillos; CI = confidence interval. * p < 0.05 for comparisons between 2022 and 2023.

9.2 Flavored Tobacco Product Use
Table 9-2 presents the prevalence of flavored tobacco use among high school respondents who reported currently using each tobacco product. For cigarettes, flavored use refers to using menthol cigarettes in the last 30 days. For all other products, flavored use refers identifying a flavor other than tobacco or unflavored as the most commonly used flavor. The survey asked questions about flavored tobacco use for all products except nicotine pouches.

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For products with sufficient sample sizes, the table presents analyses for both 2022 and 2023. There were no significant changes in flavored use of tobacco overall or for any specific product between 2022 and 2023.

Table 9-2. Prevalence of Flavored Tobacco Product Use by Year Among High School Students Who Were Currently Using Each Product
2022 2023
Tobacco Product N* % (95% CI) N* % (95% CI)
Any flavored
tobacco use*
619 86.3 (82.3–89.7) 2,464 85.6 (82.6–88.2)
Vapes 529 91.7 (88.9–93.9) 2,070 89.1 (85.8–91.9)
Cigarettes** 124 32.1 (19.2–47.3) 457 45.0 (36.4–53.9) LCCs 55 55.2 (40.0–69.8) 232 50.1 (38.5–61.7)
Cigars 53 37.0† (22.5–53.3) 294 49.9 (38.1–61.6)
Hookah 47 76.9† (59.4–89.5) 195 77.2 (60.8–89.2)
Note. LCCs = little cigars or cigarillos. Heated tobacco products, smokeless tobacco, and nicotine pouches were excluded from this table due to the small proportion of respondents who endorsed current use of these products in 2022 and/or 2023. CI = confidence interval. * Includes use of vapes, cigarettes, LCCs, cigars, hookah, smokeless tobacco, and/or HTPs. ** Menthol was the only available flavor for cigarettes. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.

9.3 Current Tobacco Use by Demographics
Table 9-3 shows changes in prevalence of current any tobacco use by year and gender identity. There were no changes over time in any tobacco use.

Table 9-3. Prevalence of Current Any Tobacco Use by Year and by Gender Identity Among High School Students
2022 2023
Gender identity N % (95% CI) N % (95% CI)
Overall 8,909 6.6 (5.4–8.1) 30,966 7.3 (6.5–8.1)
Male 3,951 6.1 (4.8–7.6) 13,750 6.5 (5.7–7.5)
Female 3,841 5.9 (4.5–7.6) 13,537 7.0 (6.1–8.0)
Identified in another way 533 10.1 (6.7–14.4) 1,767 12.5 (9.8–15.5) Declined to answer 55 9.4† (3.7–18.9) 198 15.6 (8.4–25.5) Note. CI = confidence interval.
† The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.

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Table 9-4 shows the prevalence of current vaping, cigarette smoking, and LCC smoking by year and gender identity. There were no significant changes over time in current vaping, cigarette smoking, or LCC use.

Table 9-4. Prevalence of Current Vaping , Cigarette Smoking, and LCC Smoking by Year and by Gender Identity Among High School Students Gender
Identity
Vapes Cigarettes LCCs
2022 2023 2022 2023 2022 2023
Male 5.2 (4.2–6.5) 5.1 (4.4-5.8) 1.0 (0.5–1.7) 1.1 (0.8–1.5) 0.6 (0.3–0.9) 0.5 (0.4–0.7) Female 5.1 (3.8–6.7) 6.0 (5.1-6.9) 1.0 (0.5–2.0) 0.7 (0.5–1.1) 0.3 (0.1–0.6) 0.3 (0.2–0.5) Identified in
Another
Way

7.3 (4.5–10.9) 8.6 (6.8-10.8) 3.6 (2.0–5.9) 5.2 (3.6–7.2) 2.4 (1.2–4.3) 3.9 (2.5–5.6) Declined to
Answer

5.9† (1.8–13.6) 2.3+ (5.8-21.9) 3.8† (0.5–12.6) 1.5 (0.2–5.1) — — 0.7 (0.2–1.8) Note. LCCs = little cigars or cigarillos. CI = confidence interval. — The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.

Table 9-5 shows changes in current any tobacco use across all race/ethnicity groups between 2022 and 2023. From 2022 to 2023, there were no significant changes in the prevalence of current any tobacco use by race and ethnicity.

Table 9-5. Prevalence of Current Any Tobacco Use by Year and by Race/Ethnicity Among High School Students
2022 2023
Race/Ethnicity* N % (95% CI) N % (95% CI)
Overall 8,909 6.6 (5.4–8.1) 30,966 7.3 (6.5–8.1)
White 1,935 10.2 (7.0–14.1) 7,386 10.7 (9.4–12.2)
African American/Black 396 5.8 (3.1–9.8) 688 7.9 (5.4–11.1) Hispanic 5,014 5.6 (4.6–6.7) 16,691 6.3 (5.5–7.1)
Asian 705 3.5 (1.9–5.9) 3,172 3.3 (2.5–4.2)
Other 231 7.4 (4.0–12.2) 786 8.4 (5.2–12.8)
Multiracial 617 7.3 (4.6–10.8) 2,168 9.5 (7.7–11.7)
Note. CI = confidence interval.
* With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey. The table also shows the individual categories that make up “other” race. American Indian or Alaska Native respondents are not shown due to a small sample size.

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Table 9-6 displays changes over time in the prevalence of current vaping, cigarette smoking, and LCC smoking by race and ethnicity. We did not find any significant increases by race/ethnicity for these products, with one exception. There was a significant increase in cigarette smoking among high school students who identified as being of some other race not listed in the survey between 2022 and 2023.

Table 9-6. Prevalence of Current Vaping , Cigarette Smoking, and LCC Smoking by Year and Race/Ethnicity Among High School Students
Race/
Ethnicity
Vapes Cigarettes LCCs
2022 2023 2022 2023 2022 2023
White 9.1 (6.4–12.5) 8.7 (7.6–9.9) 2.6 (1.2–5.0) 2.3 (1.6–3.1) 0.5 (0.2–1.0) 0.6 (0.3–0.9) African
American/
Black

5.2 (3.0–8.5) 5.4 (2.9–9.0) 1.7 (0.5–4.3) 1.4 (0.2–4.5) 1.2 (0.3–3.3)

0.7 (0.1–1.9)
Hispanic 4.6 (3.7–5.6) 5.1 (4.4–5.9) 0.7 (0.5–1.1) 0.7 (0.5–0.9) 0.6 (0.3–0.9) 0.7 (0.5–0.9) Asian 3.2 (1.7–5.5) 2.7 (2.1–3.4) 0.4 (0.1–1.3) 0.6 (0.3–1.2) 0.1 (0.0–0.6) 0.4 (0.1–0.9) Other 5.7† (2.7–10.4) 6.1 (3.1–10.5) 0.1 (0.0–0.7)* 1.8 (0.7–3.8)* 0.6 (0.1–2.5) 0.7 (0.1–1.9) Multiracial 5.4 (3.5–8.0) 7.6 (5.9–9.6) 2.0 (0.9–3.8) 2.1 (1.3–3.3) 0.9 (0.3–2.3) 0.8 (0.3–1.7) Note. LCCs = little cigars or cigarillos.
* p < 0.05 for comparisons between 2022 and 2023.

With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey. The table also shows the individual categories that make up “other” race.

American Indian or Alaska Native respondents are not shown due to a small sample size. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.

Table 9-7 shows changes over time in any tobacco use and the use of specific tobacco products by grade. For specific products, there was significant increase in hookah use among 12th graders. For 10th graders, there was a significant increase in use of smokeless tobacco. Current use of nicotine pouches increased over time among both 10th and 12th graders.

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Table 9-7. Prevalence of Current Tobacco Use by Year and by Grade Among High School Students
Grade 10 Grade 12
Tobacco Product
2022
N = 5,002
% (95% CI)
2023
N = 16,255
% (95% CI)
2022
N = 3,907
% (95% CI)
2023
N = 14,711
% (95% CI)
Any tobacco use 5.1 (3.9–6.5) 5.3 (4.6–6.2) 8.3 (6.5–10.4) 9.4 (8.2–10.8) Vapes 4.2 (3.2–5.4) 4.3 (3.7–5.0) 7.2 (5.6–9.1) 7.6 (6.6–8.6) Cigarettes 0.9 (0.5–1.5) 0.8 (0.5–1.1) 1.6 (0.9–2.7) 1.6 (1.2–2.1) LCCs 0.6 (0.3–1.0) 0.6 (0.4–0.8) 0.6 (0.3–0.9) 0.7 (0.5–0.9) Cigars 0.5 (0.2–0.9) 0.7 (0.5–1.0) 0.7 (0.4–1.0) 1.0 (0.7–1.3) Hookah 0.4 (0.2–0.6) 0.4 (0.3–0.6) 0.5 (0.2–0.8)* 1.0 (0.6–1.6)* Smokeless 0.2 (0.1–0.4)* 0.6 (0.4–0.9)* 0.4 (0.2–0.7) 0.4 (0.2–0.6) HTPs 0.3 (0.1–0.7) 0.5 (0.3–0.7) 0.2 (0.1–0.5) 0.5 (0.3–0.9) Nicotine pouches 0.5 (0.3–0.7)* 0.9 (0.7–1.2)* 0.7 (0.4–1.1)* 1.2 (0.9–1.5)* Note: HTPs = heated tobacco products; LCCs = little cigars or cigarillos; CI = confidence interval. *p < 0.05 for comparisons between 2022 and 2023.

Table 9-8 shows changes over time in any tobacco use by LGBTQ+ status. There was no significant increase in any tobacco use by LGBTQ+ status over time.

Table 9-8. Prevalence of Current Any Tobacco Use by Year and by LGBTQ+ Status Among High School Students
2022 2023
LGBTQ+ Status* N % (95% CI) N % (95% CI)
Overall 8,909 6.6 (5.4–8.1) 30,966 7.3 (6.5–8.1)
LGBTQ+ 1,513 10.8 (7.9–14.2) 5,146 11.4 (9.5–13.6)
Non-LGBTQ+ 6,084 5.2 (4.1–6.4) 21,360 6.4 (5.6–7.2)
Unclear LGBTQ+ Status 688 6.3 (4.0–9.5) 2,414 5.3 (4.0–6.8) Note. LGBTQ+ = lesbian, gay, bisexual, transgender, queer or questioning; CI = confidence interval. * Respondents who reported (a) their gender identity as transgender or “something else” and/or (b) identified their sexual orientation as gay or lesbian, bisexual, “something else,” or “don’t know what this question means” were considered LGBTQ+. Respondents who identified as female or male and straight (that is, not gay or lesbian) were considered non-LGBTQ+. Respondents who responded (a) unsure for gender identity and straight for sexual orientation or (b) male, female, or unsure for gender identity and unsure or “don’t know” for sexual orientation were considered to have unclear LGBTQ+ status.

Table 9-9 shows changes over time in vaping, cigarettes smoking, and LCC smoking by LGBTQ+ status. There were no significant changes over time.

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Table 9-9. Prevalence of Current Vaping , Cigarette Smoking, and LCC Smoking by Year and LGBTQ+ Status Among High School Students
LGBTQ+
Status
Vapes Cigarettes LCCs
2022 2023 2022 2023 2022 2023
LGBTQ+ 8.2 (5.8–11.2) 9.1 (7.7–10.7) 3.0 (1.7–4.9) 2.5 (1.8–3.3) 1.1 (0.6–1.8) 1.6 (1.1–2.2) Non-
LGBTQ+

4.6 (3.7–5.8) 5.1 (4.5–5.9) 0.6 (0.3–1.1) 0.9 (0.6–1.2) 0.3 (0.2–0.5) 0.4 (0.3–0.5) Unclear
LGBTQ+
Status

4.8 (2.9–7.5) 4.0 (2.8–5.4) 2.2 (0.9–4.2) 1.1 (0.6–1.8) 1.4 (0.4–3.6) 0.4 (0.2–0.8) Note. LCCs = little cigars or cigarillos.

Table 9-10 shows changes over time in any tobacco use by general mental health status.

There was no significant change in any tobacco use by mental health status over time.

Table 9-10. Prevalence of Current Any Tobacco Use by Year and by General Mental Health Among High School Students
General mental health
2022 2023
N % (95% CI) N % (95% CI)
Overall 8,909 6.6 (5.4-8.1) 30,966 7.3 (6.5–8.1)
Good to excellent 5,429 5.0 (4.0–6.3) 19,149 5.9 (5.1–6.7) Fair 2,014 6.8 (5.0–9.1) 7,155 7.2 (6.0–8.7)
Poor 1,019 12.6 (9.9–15.8) 3,107 14.8 (12.3–17.6)
Note. CI = confidence interval.

Table 9-11 shows changes over time in current any tobacco use by rurality. We did not find any significant changes for any tobacco use by rurality over time.

Table 9-11. Prevalence of Current Any Tobacco Use By Year and Rurality Among High School Students
Rurality
2022 2023
N % (95% CI) N % (95% CI)
Overall 8,909 6.6 (5.4–8.1) 30,966 7.3 (6.5–8.1)
City 4,178 6.6 (5.0–8.6) 11,637 6.9 (5.9–8.0)
Suburban 3,852 6.1 (4.3–8.4) 12,853 6.8 (5.6–8.3)
Town or rural 1,887 9.1† (2.8–20.6) 6,476 9.6 (7.5–12.0) Note. CI = confidence interval. Cities are defined as large territories located inside urbanized areas and principal cities. Suburbs are territories outside of principal cities but inside urbanized areas. Towns or rural areas are territories inside an urban cluster or rural territories. See Appendix A for additional information. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.

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9.4 Marijuana Use and Marijuana Tobacco Co-use
Table 9-12 presents marijuana use and marijuana/tobacco co-use estimates over time.

There were no significant changes in ever marijuana use, current marijuana use, current marijuana-only use (current use of marijuana but not reporting current use of any tobacco product), or current co-use of marijuana and tobacco (reporting current use of marijuana and one or more tobacco products).

Table 9-12. Prevalence of Ever and Current Marijuana Use and Marijuana Co-Use by Year Among High School Students
Marijuana Use Category
2022 2023
N % (95% CI) N % (95% CI)
Marijuana use
Ever marijuana use 8,904 21.4 (19.0–23.9) 30,928 23.0 (21.7–24.4) Current marijuana use 8,904 8.8 (7.2–10.5) 30,920 10.4 (9.4–11.5) Marijuana/ tobacco co-use
Use of marijuana only 8,905 4.5 (3.8–5.4) 30,920 5.5 (4.9–6.3) Co-use of marijuana and any tobacco 8,905 4.2 (3.3–5.4) 30,920 4.9 (4.3–5.5) Note. CI = confidence interval.

9.5 Summary
We found a few changes in specific types of tobacco product use in certain groups. We found an increase in current cigarette smoking over time among students who identified as non-Hispanic other race. We found an increase in current hookah use among 12th graders, current smokeless tobacco use among 10th graders, and current nicotine pouch use for students in both grades. However, due to the effects of COVID-19 on the 2022 CYTS data collection and changes in methodology between 2022 and 2023, we recommend interpreting these differences with caution. Findings for flavored tobacco use over time should be interpreted with particular caution, given that the 2023 CYTS asked about “most commonly used” flavor, as opposed to all flavors used in the past 30 days, for all products except cigarettes. For interpretations of comparisons of flavored tobacco use between 2022 and 2023 within the context of SB 793, please see the Conclusions section of the report.

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Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing)

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10. 8th-Grade Tobacco Use
The following chapter summarizes key tobacco use data for 8th-grade respondents. Due to differences in the prevalence of use of tobacco products and the sampling approach between middle and high schools (8th-grade respondents were undersampled), data for 8th-grade respondents are presented separately.

10.1 Tobacco Use among 8th-Grade Respondents
Table 10-1 presents the prevalence of ever and current use of tobacco among 8th-grade respondents. The prevalence of current tobacco use was lower for 8th-grade respondents (3.2%) than high school respondents (7.3%). As with high school respondents, among 8th- grade respondents, current vaping was the most common form of current tobacco use (2.5% of 8th-grade respondents), followed by nicotine pouches (0.6%) and cigarettes and cigars (both 0.4%).

Table 10-1. Prevalence of Tobacco Use Among 8th-Grade Respondents Tobacco Product N
Ever Use
% (95% CI) N
Current Use
% (95% CI)
Any tobacco use 10,789 11.4 (9.9–13.1) 10,789 3.2 (2.5–3.9) Vapes 10,778 9.3 (7.9–10.8) 10,777 2.5 (1.9–3.3)
Cigarettes 10,785 2.4 (1.9–3.0) 10,784 0.4 (0.3–0.5)
LCCs 10,785 1.0 (0.8–1.3) 10,784 0.3 (0.2–0.4)
Cigars 10,785 1.3 (0.9–1.8) 10,785 0.4 (0.2–0.5)
Hookah 10,789 1.3 (0.7–2.1) 10,789 0.3 (0.2–0.5)
Smokeless 10,789 1.0 (0.8–1.3) 10,789 0.3 (0.2–0.5)
HTPs 10,789 0.9 (0.6–1.4) 10,789 0.2 (0.1–0.4)
Nicotine pouches 10,789 1.8 (1.4–2.5) 10,789 0.6 (0.4–0.8) Note. HTPs = heated tobacco products; LCCs = little cigars or cigarillos. CI = confidence interval.

Table 10-2 presents current tobacco use prevalence among 8th-grade respondents by demographics. Current tobacco use was highest among 8th-grade respondents who identified their gender in another way (6.8%). Among race/ethnicity categories, multiracial respondents reported the highest current use (5.9%), and Asian respondents reported the lowest (0.7%). LGBTQ+ respondents reported the highest current use (6.9%), followed by respondents of unclear LGBTQ+ status (2.5%) and non-LGBTQ+ respondents (2.4%).

Respondents who rated their mental health status as poor reported higher current use (9.7%) than those who rated their mental health fair (3.4%) or good to excellent (2.0%).

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Table 10-2. Prevalence of Current Use of Any Tobacco Among 8th-Grade Respondents, by Gender Identity, Race/Ethnicity, LGBTQ+ Status, and Mental Health Status
Characteristic
Current Use
N % (95% CI)
Overall 10,789 3.2 (2.5–3.9)
Gender identity
Male 4,854 2.1 (1.6-2.9)
Female 4,357 3.6 (2.7–4.7)
Identified in another way 722 6.8 (3.5–11.8)
Declined to answer 109 4.3† (1.0–11.5)
Race/ethnicity*
White 2,355 3.2 (1.8–5.1)
African American or Black 267 1.3 (0.4–3.1)
Hispanic 5,683 3.5 (2.7–4.6)
Asian 1,142 0.7 (0.2–1.7)
Other 420 2.3 (0.7–5.5)
Multiracial 870 5.9 (3.5–9.2)
LGBTQ+ status
LGBTQ+ 1,548 6.9 (4.6–10.0)
Non-LGBTQ+ 7,251 2.4 (1.8–3.1)
Unclear LGBTQ+ status 1,069 2.5 (1.3–4.3)
Mental health status
Good to excellent 6,966 2.0 (1.4–2.6)
Fair 2,027 3.4 (2.4–4.7)
Poor 1,100 9.7 (7.0–13.0)
Note. LGBTQ+ = lesbian, gay, bisexual, transgender, queer or questioning; CI = confidence interval. * With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey. The table also shows the individual categories that make up “other” race.
† The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.

10.2 Flavored Tobacco Use among 8th-Grade Respondents
Table 10-3 presents the prevalence of flavored tobacco use among current vapers.

Consistent with the findings for high school respondents (Chapter 2), the use of flavored vapes (91.9%) was prevalent among 8th-grade respondents who currently vaped.

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Table 10-3. Prevalence of Flavored Tobacco Use Among 8th-Grade Respondents Currently Using Each Tobacco Product
Tobacco Product
Flavored Product Use
N % (95% CI)
Any of the below* 430 89.4 (83.4–93.7)
Vapes 375 91.9 (88.2–94.8)
Cigarettes** 65 68.5† (51.5–82.5)
LCCs 44 68.4 (56.0–79.1)
Cigars 44 54.6 (41.1–67.6)
Hookah 42 83.0 (68.2–92.8)
Smokeless 33 51.8 (42.0–61.6)
HTPs 36 — —
Note. HTPs = heated tobacco products; LCCs = little cigars or cigarillos; CI = confidence interval. * As the sample size for the subgroup for each product varies, estimates for each product may be greater than that of “any of the below.”
** Menthol was the only available flavor for cigarettes. — The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.

10.3 Exposure to Secondhand Vapor and Tobacco Smoke in Last 2 Weeks Among 8th-Grade Respondents
Table 10-4 reports 8th-grade respondents’ exposure to secondhand vapor and tobacco smoke in a car or room, outside, and in MUH. Among 8th-grade respondents, 20.3% had been exposed to vapor in a car or room, and 31.8% had been exposed to vapor outside in the last 2 weeks. Exposure to tobacco smoke in a car or room was lower (15.2%) than exposure to vaping in a car or room, but exposure to tobacco smoke outside was higher (54.3%) than outside exposure to vapor. Of the 35.3% of 8th-grade respondents who lived in MUH, 49.2% reported smoke intruding into their unit rarely or more often in the last 6 months.

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Table 10-4. Prevalence of Last-2-Week Exposure to Vapor and Tobacco Smoke in Car or Room, Outside, or Multiunit Housing Among 8th-Grade Respondents Living in Multiunit Housing
Location of Exposure
Vapor Exposure Tobacco Smoke Exposure
N % (95% CI) N % (95% CI)
In a car or room 10,765 20.3 (18.2–22.6) 10,771 15.2 (13.0–17.7) Outside 10,634 31.8 (28.9–34.8) 10,634 54.3 (50.1–58.4) In multiunit housing* N/A N/A N/A 3,038 49.2 (45.3–53.1) Note. CI = confidence interval. This question was not asked for vapor exposure, so those cells are marked not applicable or N/A.
* Only asked of respondents who reported living in a home attached to one or more other homes or a building with two or more apartments. Exposure is defined as reporting smoke intrusion rarely, sometimes, often, or most of the time in the last 6 months.

Eighth-grade respondents had lower rates of exposure to vapor in a car or room (20.3%) and outside (31.8%) compared with high school respondents (29.0% and 36.5%, respectively; see Chapter 4). Eighth-grade respondents’ exposure to secondhand tobacco smoke in a car or room (15.2%), outside (54.3%), or in MUH (49.2%) was similar to that of high school respondents (14.1%, 51.1%, and 48.8%, respectively; see Chapter 4).

10.4 Access to Vapes and Cigarettes Among 8th-Grade Respondents Table 10-5 shows methods of obtaining vapes (or pods or e-liquid) among 8th-grade respondents reporting current vaping. The most commonly reported sources were buying their own (26.2%) and being given a vape by someone else (22.2%). Of those who bought their own, the most common purchasing source was from another person (45.1%).

Table 10-6 presents how 8th-grade respondents who were currently using cigarettes reported obtaining them. Small sample sizes for some categories limit interpretation, but of the methods available, the most commonly reported sources were someone giving them to the respondent (38.6%), followed by the respondents buying their own (26.3%). Methods of the respondent “buying them myself” were excluded from the table due to estimates being suppressed, imprecise, or respondents not endorsing the response option.

Table 10-5. Method of Accessing Vapes (or Pods or e-Liquid) Among 8th-Grade Respondents Who Were Currently Vaping
Method
Overall
N = 366
% (95% CI)
I ask someone to buy them for me 15.1 (11.2–19.8)
Someone gives them to me 22.2 (18.1–26.7)
(continued)

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Table 10-5. Method of Accessing Vapes (or Pods or e-Liquid) Among 8th-Grade Respondents Who Were Currently Vaping (continued)
Method
Overall
N = 366
% (95% CI)
I ask someone for them 15.5 (11.8–19.9)
I take them from someone 6.6 (3.2–11.7)
I get them some other way 14.4 (10.3–19.3)
I buy them myself* 26.2 (20.2–32.9)
From a gas station or convenience store 10.9† (4.9–20.2) From a grocery store 0.3 (0.0–1.8)
From a drugstore or pharmacy 4.5+ (0.7–14.2)
From a liquor store 0.3 (0.2–0.4)
From a tobacco or smoke shop 9.9† (3.1–22.4)
From a vape shop 0.2 (0.0–0.9)
From a mall or shopping center kiosk/ stand 0.0 N/A
On the internet (including apps) 18.8 (11.5–28.0)
From someone 45.1† (30.2–60.8)
Some other way 10.0† (3.6–21.2)
Note. CI = confidence interval. N/A is used because a value of 0 does not have a confidence interval.

The value of 0 indicates that no participant endorsed that response option. * Numbers below this row represent the percentage of respondents endorsing each location among those who reported buying their own vapes.
† The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.

Table 10-6. Methods of Accessing Cigarettes Among 8th-Grade Respondents Who Were Currently Smoking Cigarettes
Method
Overall
N = 64
% (95% CI)
I ask someone to buy them for me 3.4† (0.4–12.0)
Someone gives them to me 38.6 (28.1–50.0)
I ask someone for them 6.4† (2.8–12.2)
I take them from someone 13.3 (9.0–18.8)
(continued)

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Table 10-6. Methods of Accessing Cigarettes Among 8th- Grade Respondents Who Were Currently Smoking Cigarettes (continued)
Method
Overall
N = 64
% (95% CI)
I get them some other way — —
I buy them myself 26.3 (18.8–35.0)
Note. CI = confidence interval.
— The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.

10.5 Marijuana Use Among 8th-Grade Respondents
Table 10-7 presents the prevalence of ever and current marijuana use among 8th-grade respondents. The rates of ever using marijuana (8.5%) and currently using marijuana (3.1%) were lower than rates reported by high school respondents (23.0% and 10.4%, respectively; see Chapter 8).

Table 10-7. Prevalence of Marijuana Use Among 8th-Grade Respondents Marijuana Use
Overall
N % (95% CI)
Ever use 10,781 8.5 (7.1–10.1)
Current use 10,778 3.1 (2.2–4.1)
Note. CI = confidence interval.

10.6 Exposure to Secondhand Marijuana Smoke in Last 2 Weeks Table 10-8 reports 8th-grade respondents’ exposure to secondhand marijuana smoke in a car or room and outside in the last 2 weeks. Respondents were considered exposed outside if they reported having been near someone who was smoking marijuana outside of a restaurant, outside of a store, on a sidewalk, or at a park, playground, or beach in the last 2 weeks.

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Table 10-8. Prevalence of Last-2-Week Exposure to Marijuana Smoke in Car or Room or Outside Among 8th-Grade Respondents
Exposure
Overall
N % (95% CI)
Exposure in car or room 10,764 11.0 (10.0–12.1)
Exposure outside 10,628 24.0 (20.7-27.6)
Note. CI = confidence interval.

Overall, 11.0% of 8th-grade respondents reported being exposed to marijuana smoke in a car or room within the last 2 weeks. Fewer 8th-grade respondents reported exposure in a car or room than high school respondents (21.3%; see Chapter 8). Less than a quarter of 8th-grade respondents (24.0%) reported being exposed outside; this figure was lower than that reported for high school respondents (31.1%; see Chapter 8).

10.7 Summary
The prevalence of current tobacco use was lower for 8th-grade respondents than high school respondents. Vaping was the most common form of use. Current tobacco use was highest among 8th-grade respondents who identified their gender in another way and were multiracial. Flavored tobacco use was high among respondents currently using tobacco products, similarly to high school respondents. Among 8th-grade respondents, exposure to secondhand vapor and smoke in a car or room and outside was lower than that of high school respondents, but exposure to secondhand tobacco smoke was similar in a car or room, outside, and in MUH. Respondents who vaped most frequently reported purchasing their own vapes as their most common method of obtaining them. Eighth-grade respondents who smoked cigarettes most commonly obtained them by being given them by someone else. The prevalence of marijuana use among 8th-grade respondents was lower than that of high school respondents, as was exposure to secondhand marijuana smoke.

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11. Conclusion
Overall, tobacco use among high school respondents remains low, with 7.3% reporting having used any tobacco product in the last 30 days. Vapes continue to be the most commonly used tobacco product, with 5.9% of high school respondents reporting using them in the last 30 days.

Differences in tobacco use were observed when looking at gender identity, LGBTQ+ status, race/ethnicity, general mental health, and experiences of discrimination. Polytobacco use was highest among LGBTQ+ respondents and those who identified their gender in another way. Two-thirds of high school respondents experienced one or more types of discrimination in the last month, and experiences of discrimination were more commonly reported by respondents who were currently using tobacco than those who weren’t.

Quit attempts and intention to quit also varied by demographics. A higher proportion of respondents with fair or good to excellent mental health status had attempted to quit in the past year, and they also had higher intention to quit vaping in the next 30 days, compared to those with poor mental health.

Flavored tobacco use remains high, with most respondents who were currently using tobacco reporting flavored product use across gender identity, race/ethnicity, and grade.

The popularity of flavor types varied by product. Fruit was the most popular flavor for vapes and almost half of cigarette smokers used menthol cigarettes.

The minimum legal age to purchase tobacco products, including vapes, in California is 21 years old, but many youth who reported current vaping also reported buying their own vapes. Respondents reported buying vapes from other people, tobacco or smoke shops, vape shops, and gas stations or convenience stores. Cigarette smokers also purchased their cigarettes from gas station or convenience stores, tobacco or smoke shops, and from other people. Of vapes, cigarettes, and flavored tobacco products, respondents perceived that it was easiest to obtain vapes. Perceived access varied by location, with respondents reporting that it was more difficult to obtain vapes, cigarettes, and flavored tobacco products from stores than from the internet or another person. For vapes and cigarettes, perceived access varied by respondents’ vaping and smoking status.

Most high school respondents lived in homes with a complete ban on tobacco smoking and vaping. About half of respondents who lived in MUH reported exposure to tobacco smoke in their home in the last 6 months. Exposure to tobacco smoke and vapor was highest among current smokers and vapers. When it came to exposure on social media, most respondents did not have a favorite vaping ad and over half did not pay attention to these posts.

Exposure varied by smoking status.

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Susceptibility to future tobacco use varied by demographics and poor mental health was associated with greater susceptibility. Susceptibility also appeared to be correlated with peer tobacco use. The most commonly reported reason for vaping was to relax or relieve stress and anxiety.

Overall, most high school respondents believed that adults would disapprove of them vaping or smoking, and about half believed peers would disapprove. This varied by vaping and smoking status, with a larger proportion of respondents who had never vaped or smoked endorsing this belief. Over two-thirds of respondents supported tobacco endgame policies, although this also varied by vaping and smoking status. Support was highest among respondents who had never vaped or smoked.

Towns and rural settings tended to have higher tobacco use compared to cities and suburban areas. Tobacco use outcomes varied widely across counties and county groups for any tobacco use and the use of specific products. Estimates for specific products were consistent across regions, with the exception of vaping, which was higher in the Northern region of the state.

Current use of marijuana was more common that current use of tobacco, and use varied by demographic categories. The usual mode of using marijuana was smoking, followed by vaping. Among respondents currently using tobacco, the most commonly used tobacco product was the vape. Respondents currently using marijuana most commonly obtained the product by buying it themselves.

Results from 2023 were compared to 2022, and only a few significant differences were found for specific tobacco products among members of specific racial/ethnic groups (non- Hispanic other race) and for specific grades. These differences should be interpreted with caution, given the impact of COVID-19 on the 2022 CYTS and changes in the methodology of the CYTS between 2022 and 2023.

Finally, 8th-grade respondents were summarized separately. The prevalence of current tobacco and marijuana use was lower for 8th-grade respondents than high school respondents. Like high school students, vaping was the most common form of tobacco use, and flavored product use was high among middle school students. Eighth-grade respondents most commonly obtained vapes by purchasing them.

11.1 Implications
The results of the 2023 CYTS are in line with results from 2022. Rates of youth tobacco use in California are generally low, but youth continue to vape. Marijuana use remains more common than tobacco use. Exposure to secondhand smoke, vapor, and marijuana continues to occur. This year, we examined differences in use, exposure, and beliefs across vaping and smoking status, and found that differences exist.

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We did not find differences in tobacco use when comparing 2022 and 2023 data. Continued monitoring of trends over time is recommended.

Effective December 21, 2022, California SB 793 prohibits retailers from selling flavored tobacco products, including mint and menthol flavors, in the state of California. 11 This flavor
ban may affect use of these products in the future, but it did not appear to do so in 2023:
flavored tobacco use remains high (89.1% of vapers). One explanation for this finding is that, with the exception of cigarettes, for each tobacco product, the survey asked about the most commonly used flavor. We used that most commonly used flavor to categorize tobacco use as flavored or unflavored. However, many of the participants who reported they most often used unflavored tobacco likely also used flavored tobacco products in the past 30 days, resulting in potential miscategorization. However, it was important to keep the wording of this question over time to allow comparison across multiple years. Another possible explanation is that the effects of tobacco control and other public health policies on behavior may take up to 2 years to observe.
12,13,14 Since SB 793 went into effect in December 2022, and the 2023 CYTS data collection began in January 2023, future years of CYTS data collection should continue to examine changes in flavored tobacco use over time to fully capture any effects of this policy change. Also of note, the policy contains some exemptions for hookah and shisha, pipe tobacco, and premium cigars, and does not include concept flavors (e.g., “jazz”)
About one-third of vapers and one-quarter of cigarette smokers reported buying their own product, and gas stations/convenience stores, tobacco or smoke shops, and vape shops were endorsed points of sale. Similarly, stores or dispensaries were endorsed as points of sale for marijuana. Additional monitoring of underage sales and enforcement of ID checks may be warranted.

Although tobacco use is relatively low, youth remain susceptible to future use and perceived ease of access is high. Use, exposure, and susceptibility varied by demographics, mental health status, and vaping/smoking status. Tobacco prevention and cessation programs may benefit from being tailored to disproportionally affected populations.

This report found sufficient variation in county-level prevalence of tobacco use to warrant further investigation. Of particular importance is determining the reasons why some

11 California Tobacco Control Branch. (2023, March 27). Frequently asked questions: California’s statewide flavored tobacco sales law. California Department of Public Health. https://www.cdph.ca.gov/Programs/CCDPHP/DCDIC/CTCB/CDPH%20Document%20Library/Policy/Fla voredTobaccoAndMenthol/SB_793_FAQ_2_0_final2.pdf
12 Dutra, L.M., Glantz, S.A., Arrazola, R.A., King, B.A. (2017). Impact of e-cigarette minimum legal sale age laws on current cigarette smoking. Journal of Adolescent Health 62(5), 532–538. 13 Song, A.V., Dutra, L.M., Neilands, T.B., Glantz, S.A. (2015). Association of smoke-free laws with lower percentages of new and current smokers among adolescents and young adults: An 11-year longitudinal study. JAMA Pediatrics, 169(9), e152285.
14 Dutra, L. M., Farrelly, M., Gourdet, C., & Bradfield, B. (2022). Cannabis legalization and driving under the influence of cannabis in a national US Sample. Preventive Medicine Reports, 27, 101799.

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counties have significantly lower ever and current tobacco use outcomes in comparison to the state overall. Towns and rural areas continue to need tobacco control efforts, given higher tobacco use prevalence estimates for these areas of the state.

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Appendix A:

List of Terms
Tobacco Products and Marijuana Definitions
Any tobacco use: Use of one or more of the following products: vapes, cigarettes, little cigars or cigarillos, cigars, hookah, smokeless tobacco, heated tobacco products, or nicotine pouches.

Cigarettes: Definition from survey: “Cigarettes are sold in packs and cartons. Popular brands include Marlboro, Newport, Pall Mall, Camel, and Winston.” Cigars: Definition from survey: “Big cigars, also called traditional, regular, or premium cigars, are tobacco wrapped in a tobacco leaf. Popular brands are Macanudo, Romeo Y Julieta, Arturo Fuente, Cohiba, Davidoff, and Ashton, but there are many others.” Heated tobacco products (HTPs): For example, IQOS; also called heat-not-burn products.

Hookah: Also called waterpipe or shisha.

Little cigars or cigarillos (LCCs): Definition from survey: “Little cigars, cigarillos, and filtered cigars are wrapped in tobacco leaf or brown paper containing tobacco. They are smaller than big cigars and may be flavored. Popular brands include Swisher Sweets, Backwoods, Dutch Masters, Captain Black, Prime Time, White Owl, Black & Mild, Phillies Blunts, Zig Zag, and Cheyenne.”
Marijuana: Definition from survey: “Marijuana (including joints, blunts, vapes, and edibles) is commonly known as cannabis, weed, pot, hash, grass, THC, or CBD. It can be smoked (joint, blunt, bong), vaped in a wax pen, eaten (baked goods, candies), drank (tea, cola, alcohol), or dabbed.” The term marijuana (instead of cannabis) is used throughout this report, as youth were asked specifically about their marijuana use in the survey instrument.

Nicotine pouches: Products like Zyn, On, or Velo.

Smokeless tobacco: Chewing tobacco, snuff, snus, dip, or dissolvable tobacco.

Tobacco smoker: This term was used to examine exposure to smoked tobacco (cigarettes or LCCs) by tobacco smoker (cigarettes or LCCs) status. For this variable, respondents who reported current use of cigarettes or LCCs were classified as current tobacco smokers.

Respondents who reported ever use of either of these products but using neither product in the last 30 days were considered former tobacco smokers. Respondents who reported never use of both cigarettes and LCCs were considered never tobacco smokers.

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Vapes: Definition from survey: “These products are sometimes called by their brand names (e.g., Puff Bar, Bang Bar, JUUL) or by terms such as e-cigarettes, vape pens, personal vaporizers and mods, e-cigars, e-pipes, e-hookahs, and hookah pens.” Product Use Definitions
Current use: Use of a product within the last 30 days.

Ever use: Response of “yes” to a question about ever using a product.

Flavored tobacco use: Use of tobacco products that tasted like menthol or mint; cooling, ice, or frosty; clove or spice; fruit; an alcoholic drink (such as wine, cognac, margarita, or other cocktails), a nonalcoholic drink (such as coffee, soda, energy drinks, or other beverages); candy, chocolate, desserts or other sweets. See separate definition for cigarettes.

Former tobacco use: Use of a tobacco product, but not within the last 30 days.

Intention to quit vaping: Plan to quit using vapes in the next 30 days.

Menthol cigarette use: Response of “yes” to the following survey item: “Menthol cigarettes are cigarettes that taste like mint. Common brands include Newport, Salem, and Kool. Were any of the cigarettes you smoked in the last 30 days flavored, such as menthol?” Never tobacco use: Response of “no” to ever using any tobacco products.

Polytobacco use: Use of two or more tobacco products within the last 30 days.

Quit attempt for vaping: One or more attempts to completely stop using vapes in the last 12 months.

Tobacco-marijuana co-use: Use of marijuana and at least one tobacco product within the last 30 days.

Created Variables and Other Definitions
Race/Ethnicity
Hispanic: Response of “yes” to the question “Are you of Hispanic or Latino/Latina origin,” regardless of race(s) reported.

Non-Hispanic single race (African American or Black, Asian, White): Response of “no” to the Hispanic ethnicity question and report of African American or Black, Asian, or White when asked “How do you describe yourself?”
Non-Hispanic multiracial: Response of “no” to the Hispanic ethnicity question and report of two or more races.

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Native (AI/AN), or Native Hawaiian or other Pacific Islander (NHOPI). AI/AN and NHOPI respondents were included in this category due to small sample sizes for these two groups.

When possible, values were displayed for these groups individually (separate from respondents who endorsed other race).

Gender Identity
Gender: Options for gender identity in the survey were “male,” “female,” “transgender,” “something else,” and “I’m not sure yet.” Responses were recoded so that “transgender,” “something else,” and “I’m not sure yet” were collapsed into a single category called “identified in another way.” A fourth category, “declined to answer,” was created for respondents who skipped this question. Respondents who did not reach this question were assigned a value of missing for this variable.

Sexual orientation: Options for sexual orientation in the survey were “gay or lesbian”; “straight, that is, not gay or lesbian”; “bisexual”; “something else”; “I’m not sure yet”; or “don’t know what this question means.”
LGBTQ+ status: This variable was defined by combining responses to survey items about gender identity and sexual orientation (see response options above). Respondents who did not provide enough information to be included in any of the below categories were assigned a value of missing for LGBTQ+ status.

LGBTQ+: Respondents who reported their gender identity as transgender or “something else” and/or selected one of the following responses for their sexual orientation:
• Gay or lesbian
• Bisexual
• “Something else”
• “Don’t know what this question means”
Non-LGBTQ+: Respondents who reported”
• their gender identity as male or female; and
• their sexual orientation as “straight, that is, not gay or lesbian.” Unclear LGBTQ+ status: Respondents who did not provide enough information about their gender identity and/or sexual orientation to classify their LGBTQ+ status. This included those who selected
• “I’m not sure yet” for gender identity and reported their sexual orientation as “straight, that is, not gay or lesbian;” or
• male, female, or “I’m not sure yet” for gender identity and responded “I’m not sure yet” or “don’t know what this question means” for sexual orientation.

Rurality
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into 12 categories.15 We collapsed these 12 categories into three categories: city, suburb, and town or rural area.

City: Respondent’s school is in an area classified by NCES as a small, midsize, or large city.

City is defined as a territory inside an urbanized area and inside a principal city, and size is determined by population.

Suburb: Respondent’s school is in an area classified by NCES as a small, midsize, or large suburb. Suburb is a territory outside of a principal city and inside an urbanized area, and size is determined by population.

Town or rural area: Respondent’s school is in a fringe, distant, or remote town or rural area. Town is defined as a territory inside of an urban cluster, and the type of town is based on distance from an urbanized territory. Rural area is defined as a census-defined rural territory, and the type of rural area is based on distances from urbanized areas and urban clusters.

Other
Adult disapproval of smoking: Respondent’s indication that adults important to them would feel negatively (negative and very negative as opposed to positive or very positive) about the respondent smoking.

Adult disapproval of vaping: Respondent’s indication that adults important to them would feel negatively (negative and very negative as opposed to positive or very positive) about the respondent vaping.

Peer disapproval of smoking: Respondent’s indication that other respondents at their school would view smoking cigarettes negatively (negative and very negative as opposed to positive or very positive).

Peer disapproval of vaping: Respondent’s indication that other respondents at their school would view vaping negatively (negative and very negative as opposed to positive or very positive).

Complete home ban on vaping: Response of “vaping is not allowed anywhere or at any time inside my home” when asked about rules about vaping inside the home.

Complete home ban on tobacco smoking: Response of “smoking cigarettes or other tobacco products is not allowed anywhere or at any time inside my home” when asked about rules about smoking cigarettes or other tobacco products inside the home.

Discrimination: This variable measures experiences of discrimination in the last month.

Response options were “almost every day,” “at least once a week,” “a few times,” or

15 National Center for Education Statistics. (n.d.). Education demographic and geographic estimates.

Retrieved March 1, 2023, from https://nces.ed.gov/programs/edge/Geographic/LocaleBoundaries Packet Pg. 520
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A-5
“not at all.” The individual items were modified for youth from the Everyday Discrimination Scale.16 The original scale does not specify a period for experiences, but we added one based on confusion about the original wording of the item during cognitive testing. Although these items are traditionally analyzed as a scale, to characterize experiences of youth in the sample in depth, we included responses to individual items in this report. Respondents who endorsed any listed experience of discrimination, consistent with the original scale, were asked to attribute their experiences to one or more factors. Respondents were coded as attributing the discrimination to a specific characteristic if they endorsed that characteristic, regardless of whether they also endorsed other characteristics.

Secondhand smoke: Smoke released from smoking a cigarettes, little cigar, or cigarillo.

Exposure to secondhand tobacco smoke in a car or room: Being in a car or room when someone was smoking a cigarette, little cigar, or cigarillo in the last 2 weeks.

Exposure to secondhand tobacco smoke outside: Being near someone who was smoking a cigarette, little cigar, or cigarillo outside of a restaurant; outside of a store; at a park, playground, or beach; or on a sidewalk in the last 2 weeks.

Exposure to secondhand tobacco smoke in multiunit housing: Among respondents who indicated living in multiunit housing, answering “rarely,” “sometimes,” “often,” or “most of the time” (as opposed to “never”) to the question “In the past 6 months, how often has tobacco smoke from somewhere else in and around the building you live in come into your unit?”
Secondhand vapor: Aerosol released from using an e-cigarette or other vaping device.

Exposure to secondhand vapor in a car or room: Being in a car or room when someone was using a vape in the last 2 weeks.

Exposure to secondhand vapor outside: Being near someone who was using a vape outside of a restaurant, outside of a store, on a sidewalk, or at a park, playground, or beach in the last 2 weeks.

General mental health: Assessed by asking, “In general, how would you rate your mental health?” Response options were coded as good to excellent (“good,” “very good,” or “excellent”) versus fair or poor.

Living in multiunit housing: Response of “a one-family house attached to one or more houses,” “a building with two apartments,” or “a building with three or more apartments” to the question, “Which of the following options best describes where you live most of the time?” Other response options were “a mobile home,” “a one-family house detached from any other house,” a “boat, RV, van, etc.,” or “I do not have permanent housing.”

16 Williams, D. R, Yu, Y., Jackson, J. S., & Anderson, N. B. (1997). Racial differences in physical and mental health: Socioeconomic status, stress, and discrimination. Journal of Health Psychology, 2(3), 335–351.

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A-6
Perceived ease of access: Respondents were coded as perceiving easy access to cigarettes, vapes, marijuana, and alcohol if they responded “somewhat easy” or “very easy” (as opposed to “somewhat difficult” or “very difficult”) when asked, “If you wanted to get the following products from a store, how easy or difficult would it be?” This coding scheme was also applied to responses to the same questions that were asked about access from the internet or someone else.

Susceptible to future tobacco use (three-item measure): Response of “definitely yes,” “probably yes,” or “probably not” to all three of these questions: “If one of your best friends offered you [a tobacco product never used by the respondent], would you use it?”; “Do you think you will try [a tobacco product never used by the respondent] soon?”; and “Do you think you will use [a tobacco product never used by the respondent] in the next year?” Not susceptible to future tobacco use (three-item measure): Response of “definitely not” to all three of these questions “If one of your best friends offered you [a tobacco product
never used by the respondent], would you use it?”; “Do you think you will try [a tobacco product never used by the respondent] soon?”; and “Do you think you will use [a tobacco product never used by the respondent] in the next year?” Definitions for Analytic Terms
Korn-Graubard confidence interval: Unlike Wald confidence intervals, Korn-Graubard confidence intervals do not assume that the confidence interval is linear; this assumption tends to be violated for very small and very large prevalence estimates. As a result, Korn- Graubard confidence intervals are more accurate than Wald (“linear”) confidence intervals for small and large estimates. Korn-Graubard confidence intervals are commonly used for small prevalence estimates produced by survey data.
17,18
Nominal sample size: The number of observations in the sample.

Effective sample size: Effective sample size is calculated as 𝑝𝑝 × (1−𝑝𝑝)
𝑠𝑠𝑠𝑠2 where p is the
prevalence estimate and se is the standard error of the prevalence estimate.

17 Brown, L., Cai, T., & DasGupta, A. (2001). Interval estimation for a binomial proportion. Statistical Science, 16(2), 101 – 133.
18 Korn, E. L. & Graubard, B. I. (1998). Confidence intervals for proportions with small expected number of positive counts estimated from survey data. Survey Methodology, 24(2), 193-201.

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Appendix B:

Survey Methodology of 2023 California Youth Tobacco Survey Survey Administration
The California Youth Tobacco Survey (CYTS), formerly the California Student Tobacco Survey (CSTS), was conducted every 2 years between 2001 and 2020, excluding 2013 and 2014. RTI International is conducting the CYTS annually between 2022 and 2024. After the 2024 data collection, the survey will return to a biennial schedule. The methodology used to obtain the CSTS and CYTS are very similar, with one exception. In 2022, RTI opted to add private school students to the CYTS population in order to increase representation of all 8th-, 10th-, and 12th-grade students in the state of California in the CYTS. As a result, the CYTS samples both private and public school students.

The 2023 CTYS was designed to produce state- and county group-level estimates for tobacco use. The 2022 and 2024 CYTS were designed to produce state-level estimates for various tobacco use outcomes. In 2023, there were 35 counties and county groups; 30 individual counties had a sufficient student and school population that they did not need to be combined with other counties. The remaining 28 counties were smaller and were combined to form the remaining five county groups.

This appendix provides a brief overview of survey methodology for the 2023 CYTS.

Additional detail on survey methods can be found in the Technical Report on Analytic Methods and Approaches Used in the California Youth Tobacco Survey 2023 by Russell et al.
19 Sampling Strategy
RTI implemented a probability-based study design to produce a set of respondents who were representative of California’s racially, ethnically, culturally, and geographically diverse student population. The sample was a stratified two-stage design. The primary sampling units were schools; the secondary sampling units were classrooms. All students in selected classrooms were invited to participate. The sampling methodology is based on procedures developed by the Centers for Disease Control and Prevention (CDC) for the Youth Risk Behavior Survey and state Youth Tobacco Surveys. Some text in this document, starting with the section “Description of Sampling Methodology,” was adapted from the Youth Tobacco Survey Methodology Report prepared for the CDC Office on Smoking and Health. 20 19 See Russell et al., 2023.
20 Office on Smoking and Health. (2018). State Youth Tobacco Survey methodology report. U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health.

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Thirty-five county groups were formed. Counties with fewer than 15 high schools and middle schools were grouped with other smaller counties. Thirty of the 35 county groups are individual counties.

The sample was designed to yield an analytical dataset that could be used to make county group-level population estimates with adequate precision for high school (10th and 12th grade), and state-level population estimates, with adequate precision, for the following groups: high school (10th and 12th grade) and middle school (8th grade) students, each grade individually, and Asian American, Black, Hispanic, and White students.

The 2023 CYTS sample was designed to collect data from 375 schools and 42,676 students, and to have a minimum of 10 schools in each county group. The sample goals were based on assumed school response rate, student response rate, and school eligibility rate. We collected data from 356 schools and 41,755 students. Nineteen of the 35 county groups had 10 or more responding schools. Thirty of the 35 county groups had eight or more responding schools. The sampling methodology used for the 2023 CYTS and the 2022 CYTS is similar, with the exception of the county-level sampling components, which were not present in the 2022 design.

Participation
To promote participation in CYTS, schools were given a $500 gift card for administering the survey. Teachers primarily acted as proctors for the survey. In some cases, other school staff proctored. Proctors were provided with directions for administering the survey. RTI staff were available to answer questions from proctors.

The 2023 CYTS was administered online during the school day. The online survey included programmed skip logic to reduce respondent burden and took a median of 18.8 minutes to complete. A few questions in the survey were mandatory; these asked about respondents’ willingness to participate in the survey and grade level. The remaining survey questions were not mandatory, although a message appeared if the question was unanswered. The respondent could move forward and skip the question after encountering the message.

Respondent participation was voluntary and anonymous. Consent procedures were consistent with school district guidelines. With approval of the institutional review board, we used passive consent for all schools. Parent consent forms were distributed to respondents (to take home) 1 week before the survey. Forms were available in Spanish and additional languages, as needed. Respondents were also asked to give their assent to participate in the survey.

Survey Sample of 2023 CYTS
Table B-1 provides information about the number of schools and respondents who participated in the 2023 survey for middle and high school respondents. Of the 563 public Packet Pg. 524
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and private schools sampled, 542 were eligible to participate. These eligible schools were composed of 506 public schools and 36 private schools. A total of 359 private and public schools participated. The small number of private schools affected our ability to make county-level analyses, so we dropped them from the dataset. The remaining 356 public schools had one or more responding students. Dividing this number by the 506 eligible public schools resulted in a 70.4% school response rate. Of the 508 schools, 96 included 8th grade but not 10th or 12th grade (i.e., middle schools), 246 contained grades 10 and 12 but not grade 8 (i.e., high schools), and 14 contained all three grades (i.e., combined middle and high schools).

Table B-1. Numbers of Schools and Respondents, Middle School vs. High School, Participating in 2023 CYTS*
Number
Middle School
Only (8th Grade)
High School Only
(10th and 12th
Grades)
Middle and High
School (8th, 10th,
and 12th Grades) Total
Number of schools 96 246 14 356
Number of
respondents
10,789 30,966 N/A 41,755
* Only includes public school respondents in the analytic sample (who consented to participate in the survey and had valid responses).

The 2023 CYTS sample included 49,805 students. Because some schools opted to perform a census, 49,818 students started the survey. Of these students, 2,406 declined to consent.

Of the remaining 47,412 cases, 4,728 students were dropped because they completed less than 50% of the items in the survey that could not be skipped (i.e., items not subject to skip patterns), and 750 were dropped because they provided low-quality responses (three or more of the following: reported that they had not been honest in their responses, reported that they often provided funny and fake responses in surveys, missed one or both attention checks, and selected “prefer not to answer” for 25% of their responses). After excluding these participants, 41,934 valid responses remained. After dropping 179 private school students, 41,755 surveys remained; the student response rate was therefore 83.8%.

The overall response rate was 59.0% (70.4%*83.8%). Of the 41,755 surveys, 10,789 were obtained from 8th-grade students, 16,255 were obtained from 10th-grade students, and 14,711 were obtained from 12th-grade students. Less than 2% (1.5%) of participants in the analytic sample opted to complete the survey in Spanish rather than English.

Survey Content
RTI designed the 2023 survey to provide consistent wording with the 2022 CYTS, much of which was consistent with the prior rounds of the CSTS. Such consistency allows for comparable prevalence estimates of tobacco use among youth in California over time. The final survey, which was created in English and translated by professional translators into Packet Pg. 525
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Spanish, included the following categories of items: consent and basic demographics, vaping, cigarettes, cigars and little cigars or cigarillos, other tobacco products, marijuana, alcohol, tobacco cessation, the behaviors of influential others, influences at school, personal opinions, exposure to social media, mental health (including experiences of discrimination), and more sensitive demographic questions. Accounting for the skip logic built into the survey, the 2023 survey consisted of a maximum of 182 items and a minimum of 77 items.

Surveys were available in English and Spanish.

When updating the survey for 2023 data collection, RTI made slight modifications to guide survey flow and improve user experience. These changes included prompts to ensure only students in the intended grades completed the survey and guidance for questions about both Hispanic origin and race. Such changes were in response to, respectively, feedback from survey proctors and open text responses received for questions on race in the 2022 survey. Exit-screen language was also slightly adjusted. RTI also updated vaping brands listed based on trends in use and updated some product descriptions to ensure consistency between CTPP data collection efforts such as the Teens, Nicotine, and Tobacco survey (e.g., adding “tightly rolled” to the description of cigars).

At CTPP’s request, RTI added items to collect details on Native Hawaiian or other Pacific Islander origin, five additional locations where respondents encountered secondhand smoke and vapor (asked for each of tobacco products, vapes, and marijuana products), and tobacco cessation method used during the most recent quit attempt. To capture more detail on vaping dependence, RTI added the four-item PROMIS-E dependence scale. 21 In addition
to a measure asking product users about the vape brand they use most often, RTI added a measure to collect all vape brand names that respondents note as currently popular, regardless of vaping user status. The survey also now includes an additional question about perceived peer usage of tobacco products.

In light of the passage of California Senate Bill 793 (SB 793), the CYTS 2023 wanted to track change in flavored product access by California youth. Thus, RTI added flavored tobacco products to existing items about the perceived ease of access to specific products from, respectively, a store, the internet, or someone else. To minimize participant burden and match CTPP’s priorities, these items replaced questions about alcohol access that had been included in the 2022 CYTS.

Four questions were removed between the 2022 and 2023 administrations of the CYTS. RTI removed an item about how often respondents attended school in the last 30 days. This item added to track asynchronous learning due to COVID-19 but is no longer needed. A two-series question on asthma status was also removed to reduce participant burden. Due

21 Morean, M., Krishnan-Sarin, S., & O'Malley, S. S. (2018). Comparing cigarette and e-cigarette dependence and predicting frequency of smoking and e-cigarette use in dual-users of cigarettes and e-cigarettes. Addictive Behaviors, 87, 92–96. https://doi.org/10.1016/j.addbeh.2018.06.027 Packet Pg. 526
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to changes in California policies about reduced and free lunch (all students were offered free lunch regardless of income in 2023), RTI also removed the question on receipt of a free or reduced cost school lunch as a measure of socioeconomic status.

Analysis
The data are weighted. The statistician created the weights based on nonresponse probability (namely, differences between those who responded and those who did not) and the degree to which the sample reflects the demographic makeup of California. These weights enabled us to adjust analyses for nonresponse and to create accurate state and county estimates. The weighting procedure is described in the Technical Report for the California Youth Tobacco Survey 2023. This report includes weighted prevalence estimates with 95% confidence intervals.

The technical report also contains information on the criteria that we used to determine whether we labeled specific estimates as imprecise or suppressed them entirely. Estimates were labeled as imprecise if they met one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate. Some estimates were suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of Korn-Graubard confidence intervals and nominal and effective sample size, see Appendix A.

When comparing 2023 and 2022 CYTS data, it is important to note that the COVID-19 pandemic negatively affected 2022 student-level response rates, which affected the ability to make some estimates with sufficient precision in 2022. In 2023, the survey methodology was updated to enable the production of county-level estimates.

Race/Ethnicity
To measure the ability of the 2023 CYTS to sample the racial/ethnic makeup of the state of California, we compared the racial/ethnic makeup of the CYTS sample to the corresponding race/ethnicity data provided by the California Department of Education (CDE).

Race/ethnicity categories of CYTS are similar to those used by CDE.

In CYTS, the racial/ethnic background of respondents was determined using two primary questions. The first asked about Hispanic or Latino/Latina origin (i.e., ethnicity) and the second asked respondents to indicate how they describe themselves (i.e., race) by marking all that apply: African American or Black, American Indian or Alaska Native, Asian, Native Hawaiian or other Pacific Islander, White, or Other. The “other” category included a text box for entering a free-text response. We imputed race using respondents’ free-text responses, based on the U.S. Census’s definition of which groups fall into each racial category.

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We matched categories used by CDE, with one exception—CDE did not include the category non-Hispanic other race. Because we dropped private schools from the analytic sample, we did not include them in Table B-2. Table B-2 lists the categories provided by CDE and the corresponding categories for the 2023 CYTS, when available (with the exception of non- Hispanic other race).

Table B-2. Percentage of Race/Ethnicity Categories in CYTS and CDE Enrollment Data for Public School Students Included in the 2023 CYTS Samples Control of
School Race/Ethnicity Category
CDE Totals CYTS Respondents
N (%) N (%)
Public African American not Hispanic 69,695 5.1 956 2.3 American Indian or Alaska Native 6,448 0.5 240 0.6
Asian* 131,441 9.6 3,578 8.6
Filipino 36,087 2.6 738 1.8
Hispanic or Latino 750,125 55.0 22,374 53.6
Pacific Islander** 6,203 0.5 156 0.4
White not Hispanic 303,718 22.3 9,760 23.4
Two or more races not Hispanic 50,684 3.7 3,046 7.3
Not reported or other race,*** not
Hispanic
8,682 0.6 907 2.2
Total 1,363,084 100.0 41,755 100.0
Note. CDE = California Department of Education; CYTS = California Youth Tobacco Survey. CDE enrollment data were restricted to schools that were considered eligible to participate in CYTS.

Race/ethnicity data are unweighted and should not be compared with weighted estimates throughout this report.
* Does not include respondents who identified as Filipino. ** Includes Pacific Islanders for CDE and Native Hawaiians or other Pacific Islanders for CYTS. *** “Not reported or other race” is terminology from CDE. For the CYTS data in the table, this category only includes respondents who reported non-Hispanic other race (i.e., race not captured by the survey). For purposes of this table, these groups are considered equivalent, even though CYTS respondents who did not report their race or ethnicity are excluded from the table.

The estimates included are unweighted. The percentage of each race/ethnicity was similar between CYTS and CDE enrollment data for all categories. In terms of differences, fewer non-Hispanic African American students (2.3%) participated in the CYTS than are represented in CDE enrollment statistics (5.1%). Compared to CDE enrollment figures, the CYTS contains a larger percentage of students who identified as not Hispanic and reported being a race not listed in the survey or identifying with two or more races.

The method of classifying race/ethnicity that was used in the 2023 CYTS has limitations. To provide a greater understanding of the impact of CYTS’s classification of race/ethnicity, Packet Pg. 528
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Table B-3 compares how individuals were labeled using CYTS’s race/ethnicity definition and how they responded to individual questions about Hispanic ethnicity and race in the survey.

Table B-3. Percentage of Labeled and Endorsed Race/Ethnicity Race/Ethnicity Category Labeled Race/Ethnicity Category Endorsed

N =
41,628 (%)
N =
41,755 (%)
White 22.3 (19.1–25.7) White 43.2 (40.1–46.3)
African American
or Black

5.1 (4.0–6.4) African American or
Black

9.6 (8.2–11.1)
Hispanic 55.0 (50.4–59.5) Hispanic 54.9 (50.3–59.4)
Asian 9.7 (7.7–11.9) Asian 14.8 (12.5–17.3)
Other* 2.5 (1.8–3.4) Other 33.3 (30.9–35.6)
Multiracial 5.4 (4.9–6.0) American Indian or
Alaska Native

6.3 (5.3–7.4)
Native Hawaiian or
other Pacific Islander

2.6 (2.3–2.8)
Note. The percentage in endorsed does not add up to 100% because respondents could select more than one response. Race/ethnicity data are unweighted and should not be compared with weighted estimates throughout this report.
* Participants who reported being non-Hispanic and only one of the following races were combined into a category labeled “other” due to small sample sizes: American Indian or Native American (n = 35, 0.3%), Native Hawaiian or other Pacific Islander (n = 50, 0.4%), and a race not listed in the survey (n = 329, 2.1%).

Notably, CYTS assigns each respondent to one combined racial/ethnic category, while respondents can endorse Hispanic ethnicity or not and can endorse more than one response option for the question about race. For example, a large portion of respondents who endorsed White or a race not listed in the survey also reported being Hispanic. Due to small sample sizes, except for in Table 1-4b, respondents who reported being American Indian or Alaska Native or Native Hawaiian or other Pacific Islander were combined with respondents who endorsed a race that was not listed in the survey.

One benefit of the categorization used by CYTS is that the racial/ethnic category of all individuals who endorse being Hispanic is Hispanic. This approach is helpful because many of the individuals who identified as Hispanic selected “other” race and entered a free-text response indicating that they are Hispanic, as evidenced by 2.5% of respondents being categorized as non-Hispanic other race in the analysis but 33.3% of respondents selecting “other” for their race in the survey.

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CITY OF REDDING

REPORT TO THE CITY COUNCIL

Recommendation

Accept an oral presentation from the Community Development Manager regarding the City of Redding’s Housing Division programs and special needs population activities.

Fiscal Impact

There is no fiscal impact for accepting the presentation.

Alternative Action

The City Council could choose to not accept the presentation, or request additional information from staff.

Background/Analysis

At its meeting on December 17, 2024, the City Council requested an update on the programs offered through the City of Redding’s Housing Division and activities that address homelessness.

The oral presentation accompanying this report will summarize the following components:
• Redding Housing Authority Housing Choice Voucher Program; • Housing and Community Development Programs; and
• Unsheltered Assistance/Activities.

Environmental Review

Receiving a presentation is not a project as defined under C alifornia Environmental Quality Act, and no further action is required.

Receiving a presentation is considered an exempt activi ty under N ational Environmental Policy Act, 24 CFR §58.34(a)(3) administrative activities.

MEETING DATE: March 18, 2025
ITEM NO. 9.2(b)
FROM:

***APPROVED BY***

[email protected]

[email protected]
SUBJECT: 9.2(b)--Oral Presentation regarding City of Redding Housing Division Programs.

Steve Bade, Assistant City
Manager
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Council Priority/City Manager Goals

• Government of the 21 st Century – “Be relevant and proactive to the opportunities and challenges of today’s residents and workfo rce. Anticipate the future to make better decisions today.”
Packet Pg. 531

CITY OF REDDING

REPORT TO THE CITY COUNCIL

Recommendation

Informational item only.

MEETING DATE: March 18, 2025
ITEM NO. 9.6(b)
FROM:

***APPROVED BY***

[email protected]

[email protected]
SUBJECT: 9.6(b)--Oral report regarding the Oregon Gulch Open Space in the City of Redding.

Travis Menne, Director of
Community Services
Packet Pg. 532

CITY OF REDDING

REPORT TO THE CITY COUNCIL

Recommendation

Accept the City of Redding Annual Comprehensive Financial Report for the fiscal year ended June 30, 2024.

Fiscal Impact

There is no fiscal impact for accepting the Annual Comprehensive Financial Report (ACRF).

Alternative Action

The City Council could reject the ACRF for the fiscal year ended June 30, 2024, and provide alternate direction to staff.

Background/Analysis

The audit of the City of Redding (City) for the fiscal year that ended June 30, 2024, has been completed. The City received an unmodified opinion from the auditor, CLA (Clifton Larson Allen LLP), a firm of Certified Public A ccountants, on the report as presented. The ACFR is available for review in the City Clerk’s Office.

It should also be noted that the Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement of Excellence in Financial Reporting to the City for its ACFR for the fiscal year ended June 30, 2023. This was the 40th consecutive year that the Cit y has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized annual comprehensive financial report. This report must sati sfy both generally accepted accounting principles and applicable legal requirements.

MEETING DATE: March 18, 2025
ITEM NO. 9.10(a)
FROM:

***APPROVED BY***

[email protected]

[email protected]
SUBJECT: 9.10(a)--Consider acceptance of the City of Redding Annual Comprehensive Financial Report for the year ended June 30, 2024.

Greg Robinett, Director of
Finance/City Treasurer
Packet Pg. 533
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Re: 9.10(a)--Annual Comprehensive Financial Report-year ended June 30, 2024 Page 2

A Certificate of Achievement is valid for a period of one year only. Staff believes the current ACFR continues to meet the Certificate of Achievement Program requirements , and the ACFR will again be submitted for consideration for GFOA’s award program.

Environmental Review

This is not a project defined under the California Environmental Quality Act, and no further action is required.

Council Priority/City Manager Goals

• This is a routine operational item occurring on an annual basis.

Attachments
Annual Comprehensive Financial Report for FYE June 30, 2024 Packet Pg. 534
Annual Comprehensive

FINANCIAL REPORT
FISCAL YEAR ENDED JUNE 30, 2024
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CITY OF REDDING

REDDING, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT

FOR THE YEAR ENDED JUNE 30, 2024

Prepared by:

FINANCE DEPARTMENT

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INTRODUCTORY

SECTION
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Annual Comprehensive Financial Report
For the Year Ended June 30, 2024

Table of Contents

v
Page

INTRODUCTORY SECTION

Table of Contents ............................................................................................................................................................ v Transmittal Letter ........................................................................................................................................................... ix Certificate of Achievement for Excellence in Financial Reporting – GFOA ............................................................... xvi Organization Chart ..................................................................................................................................................... xvii Directory of City Officials ........................................................................................................................................ xviii

FINANCIAL SECTION

Independent Auditors’ Report on Financial Statements ........................................................................................... 3

Management’s Discussion and Analysis (Required Supplementary Information – Unaudited) ........................... 7

Basic Financial Statements:

Government-Wide Financial Statements:

Statement of Net Position ................................................................................................................................. 30 Statement of Activities and Changes in Net Position ......... .............................................................................. 32

Fund Financial Statements:

Governmental Fund Financial Statements:

B a l a n c e S h e e t ............................................................................................................................................. 38 R e c o n c iliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position ........ ...................................................................... 41 S t a t e m e n t o f R e v e n u e s , E x p e n d i t u r e s , a n d C h a n g e s i n F u n d B a lances .................................................... 42 R e c o n c iliation of the Governmental Statement of Revenues, Expenditures, and Changes in Fund Balances to the Governm ent-Wide Statement of Activities and Changes in Net Position ..... ........................................................................ 43 Proprietary Fund Financial Statements:

S t a t e m e n t o f N e t P o sition .......................................................................................................................... 46 S t a t e m e n t o f R e v e n u e s , E x p e nses, and Changes in Net Position .............................................................. 50 S t a t e m e n t o f C a s h F l o w s ........................................................................................................................... 52 Fiduciary Fund Fina ncial Statements:

S t a t e m e n t o f F i d u c i a r y N e t P o sition .......................................................................................................... 58 S t a t e m e n t o f C h a n g e s i n F i d u c i a r y N e t P o sition ....................................................................................... 59

Notes to the Basic Financial Statements ............................................................................................................. 61 Index to Notes to the Basic Financial Statements ............. ............................................................................... 63

Required Supplementary Information (Unaudited):

Budgetary Principles ............................................................................................................................................. 147 Schedule of Revenues, Expenditu res, and Changes in Fund Balances-Budget and Actual:

General Fund .................................................................................................................................................. 148 Schedules of Changes in Net Pension Liability and Related Ratios - Public Employees Retirement System Miscellaneous Plan (CalPERS) ......................................................... 150 Packet Pg. 540
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Annual Comprehensive Financial Report
For the Year Ended June 30, 2024

Table of Contents (Continued)

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FINANCIAL SECTION (Continued):

Required Supplementary Information (Unaudited):

Schedules of Plan Contributions - Public Employees Retirement System Miscellaneous Plan (CalPERS) .................................................................................................................... 152 Schedules of Changes in Net Pension Liability and Related Ratios - Public Employees Retirement System Safety Plan (CalPERS) .................................................................... 154 Schedules of Plan Contributions - Public Employees Retirement System Safety Plan (CalPERS) ................................................................................................................................. 156 Schedules of Changes in Net Pension Liability and
Related Ratios - Public Agency Retirement Services Enhancement Plan (PARS) ...................................... 158 Schedules of Public Agency Retirement Services Retirement Enhancement Plan Contributions All Tiers (PARS) ................................................................................................................... 160 Schedules of Changes in Net OPEB Liability and Related Ratios ..................................................................... 162 Schedule of Contributions-OPEB ....................................................................................................................... 164

Supplementary Information:

Non-Major Governmental Funds:

Combining Balance Sheet ............................................................................................................................ 170 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances .................................... 172 Statement of Revenues, Expenditu res, and Changes in Fund Balances – Budget and Actual:

Parking Special Revenue Fund .............................................................................................................. 174 Street Maintenance Special Revenue Fund ............................................................................................ 175 Community Development Special Revenue Fund ................................................................................. 176 Housing Special Revenue Fund ............................................................................................................. 177 Continuum of Care Special Revenue Fund ............................................................................................ 178 General Special Revenue Fund .............................................................................................................. 179 Library Special Revenue Fund .............................................................................................................. 180 General Capital Projects Fund - Major Fund ......................................................................................... 181

Non-Major Enterprise Funds:

Combining Statement of Fund Net Position ................................................................................................. 184 Statement of Revenues, Expenses, and Changes in Fund Net Position ....................................................... 187 Combining Statement of Cash Flows ........................................................................................................... 188

Internal Service Funds:

Combining Statement of Net Position .......................................................................................................... 192 Combining Statement of Activities and Changes in Net Position ................................................................ 195 Combining Statement of Cash Flows ........................................................................................................... 196

Fiduciary Funds:

Combining Statement of Fiduciary Net Position .......................................................................................... 200

Other Supplementary Information:

Supplementary Information Regarding Passenger Facility Charges .................................................................. 205 Schedule of Passenger Facility Charges Collected and Expended and Interest Collected For the quarters ended September 30, 2023, December 31, 2023, March 31, 2024, and June 30, 2024 ............................................................................................................. 206 Packet Pg. 541
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Annual Comprehensive Financial Report
For the Year Ended June 30, 2024
Table of Contents (Continued)
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STATISTICAL SECTION
Index .......................................................................................................................................................................... 211 Financial Trends:

Net Position by Component – Last Ten Fiscal Years ......................................................................................... 212 Changes in Net Position – Last Ten Fiscal Years ............................................................................................... 214 Fund Balances of Governmental Funds – Last Ten Fiscal Years ....................................................................... 219 Changes in Fund Balance of Governmental Fund – Last Ten Fiscal Years ....................................................... 220 Revenue Capacity:

General Governmental Tax Revenues by Source – Last Ten Fiscal Years ........................................................ 223 Revenue Base – Own Source Revenue – Last Ten Fiscal Years ........................................................................ 224 Electric Utility Rates – Last Ten Fiscal Years .................................................................................................... 226 Principal Electric Utility Payers – Last Ten Fiscal Years ................................................................................... 229 Debt Capacity:

Ratios of Outstanding Debt by Type – Last Ten Fiscal Years ............................................................................ 230 Computation of Direct and Overlapping Debt .................................................................................................... 233 Legal Debt Margin Information – Last Ten Fiscal Years ................................................................................... 234 Wastewater Revenue Bond Coverage – Last Ten Fiscal Years .......................................................................... 236 Water Revenue Bond Coverage – Last Ten Fiscal Years ................................................................................... 238 Electric Revenue Bond Coverage – Last Ten Fiscal Years ................................................................................ 240 Demographic and Economic Information:

Demographic Statistics – Last Ten Fiscal Years ................................................................................................ 241 Principal Employers in the Greater Redding Metropolitan Area – Last Ten Fiscal Years ................................. 242 Full-Time City Budgeted Employees by Function/Program – Last Ten Fiscal Years ........................................ 243 Operating Information:

Capital Assets Statistics by Function/Program – Last Ten Fiscal Years ............................................................ 245 Operating Indicators by Function/Program – Last Ten Fiscal Years .................................................................. 246 Supplemental Historical Information:

Statement of Physical Condition of Airport Assets ............................................................................................ 251 History and Statement of Physical Condition of Electric Utility System Assets ................................................ 253 History and Statement of Physical Condition of Storm Drainage Utility System Assets ................................... 256 History and Statement of Physical Condition of Wastewater Utility System Assets ......................................... 258 History and Statement of Physical Condition of Water Utility System Assets .................................................. 261 Packet Pg. 542
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June

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Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June ix
March 11, 2025
Honorable Mayor, Members of
City Council, and City Manager
City of Redding, California 96001
Honorable Members:

In accordance with State and local statutes, the City of Reddin g (City) hereby submits the Annual Comprehensive Financial Report for the year ended June 30, 2024. Responsibil ity for both the accuracy of the presented data and the completeness and fairness of the presentation, including al l disclosures, rests with the City. We believe that the data, as presented, is accurate in all material aspects; that it is presented in a manner designed to fairly set forth the financial position and result of operations of the Ci ty in accordance with gener ally accepted accounting principles; and that all disclosures necessary to enable the re ader to gain maximum understanding of the City’s financial affairs have been made.

Clifton Larsen Allen, LLP, a firm of licensed certified public accountants has issued an unmodified opinion on the City of Redding’s financial statements for fiscal year ended June 30, 2024.

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

PROFILE OF THE CITY
The City of Redding is a general law city, incorporated under t h e l a w s o f t h e S t a t e o f C a l i f o r n i a i n 1 8 8 7 . A council of five members elected at large for alternating four-year terms governs the City. The Mayor, Vice- Mayor, City Manager, and City Attorney are appointed by the Cit y Council. The City Clerk and City Treasurer are also elected officials and serve four-year terms.

Redding is the county seat for Shasta County and is located on the Sacramento River approximately 160 miles north of Sacramento, the state capital, and 150 miles east of t he Pacific Ocean at the northernmost end of the Sacramento Valley. The City has an estimated population of 92,446 and encompasses approximately 60 square miles within the corporate limits. Extracting timber and the processing of wood by-products; along with agriculture, tourism, medical services, and government have historically been the pillars of the local economy.

Over the past few decades, there has been a general shift toward a service-based economy.

This report includes all of the f unds of the City. Financial i nformation for separate legal entities related to the City of Redding includes the Redding Housing Authority, Redding Area Bus Authority, the Redding Joint Powers Financing Authority and the Re dding Capital Services Corporatio n. All are accounted for in the City’s financial statements in accordance with Gove rnmental Accounting and Finan cial Reporting Standards. Component unit financial reports are on file w ith the City. Under California State law all redevelopment agencies were dissolved.

The Redding Redevelopment Agency was dissolved on January 31, 2012 and all excess assets were transferred to, and continue to be accounted for, in a private purpose trust fund.

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Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June x

REPORTING ENTITY AND ITS SERVICES

City Council members in separate sessions serve as the governin g board of the Redding Joint Powers Financing Authority and the Redding Capital Services Corporation. All fiv e members of the City Council sit on the eight- member governing board of the Redding Area Bus Authority and th e six-member Housing Authority’s board.

City staff provides accounting an d administrative services to a ll four agencies. Additional detail is provided in Note 1, Subparagraph A of the financial statements.

Redding is a full-service city. This includes public safety (p olice and fire), highways and streets, public improvements, planning and zoning, recreation and parks, librar y, airports, convention and auditorium facility, utilities (electric, water, wastewater, storm drainage, and sol id waste collection and disposal), and general administrative services.

LOCAL ECONOMY

The growth and health of an area’s economy can be determined by monitoring a wide variety of indicators. Listed below are some of these indicators in the Redding area.

Population Characteristics - The City was one of the fastest growing cities in California between 1970 and 1990, growing to 66,432 residents in 1990 from 16,659 in 1970. However, lately the City’s population growth has slowed. From 2000 to 2010 the City’s population grew by an average of 1.11 percent and from 2010 to 2020 grew by an average of .35 percent. During the last year the ch art below shows the City’s population increased 0.3 percent. The City’s population represents approximately 52% of Shasta County’s population. The following table indicates population growth for the City and Shasta County from 1970 to 2024:

Year Population
Annualized
Percent
Change
over
Inte rval Population
Annualized
Percent
Change
over
Interval
1970 16,659 --- 77,640 ---
1980 41,995 9.69% 119,449 4.40%
1990 66,432 4.69% 147,036 2.10%
2000 80,865 1.99% 163,256 1.05%
2010 89,861 1.11% 177,223 0.85%
2020 93,611 0.35% 182,155 0.23%
2021 93,879 0.02% 182,020 -0.01%
2022 93,058 -0.07% 180,651 -0.06%
2023 * 92,164 -0.08% 179,122 -0.07%
2024 92,446 0.03% 179,195 0.30%
* Revised
City of Redding Shasta County
Source: 1970-2020 data from U.S. Census; 2021-2024 estimates from the California State Department of Finance as of May 1 (January 1, 2024 report).

The City’s population, over the next 10 years, is projected to increase by approximately 241 an increase of approximately .3%. The Redding area is expected to contribute approximately 48% of the total Shasta County population because of a variety of factors that will support ur ban development, including utilities (wastewater, storm drainage, water, electric, and solid waste), employment, regional shopping, tran sportation services, and reduced commuting.

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Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June xi
Housing Costs - Housing in the City is less cos tly than in many other urban a reas in the State of California and on the West Coast. The following table sets forth the median p rice of housing in other urban areas of California as compared to Shasta County, in which Redding is the largest city, as of June 2024:

Region Median Home Price
Shasta County $396,950
Sacramento $560,000
Los Angeles $889,180
Orange County $1,450,000
San Francisco $1,650,000
Source: California Association of Realtors

Industry and Employment - Extracting timber and the processing of wood by-products, to gether with agriculture, tourism, medical services, and government, have historically been the major sectors of employment in the City. However, the City’s economic base has diversified to a regional service economy supported by retail and wholesale trade plus educational, recreational, medical, and go vernment services for an area covering several counties.

The major non-local government employers in the City and the Co unty include those in medical services, and retail services. Major employers in the City of Redding, their products or services, and the approximate number of their respective full-time employees as of June 2024 are listed in the following table:

Employer Product/Services Employees
Mercy Medical Center Medical Facilities/Services 1,980
Shasta County County Services 1,773
City of Redding** City Services 918
Shasta Regional Medical Center Medical Facilities/Services 880 CA Transportation Department Highways, Freeways, etc. 573 Shasta Union High School District Education 559
Shasta Community College* Education 512
Shasta Community Health Medical Services 507
Win-River Casino Casino 351
Redding Rancheria Redding Rancheria 187
(* ) Full –time equivalent positions. This includes employees who work outside of the City. (**) Full-time budgeted positions
Source: Derived from the Employment Development Department’s (EDD) listing of the top employers in Shasta County.

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According to the State Employment Development Department, the u nemployment rate of the City’s metropolitan area was 5.4 percent on June 30, 2024. The following table set s forth the number and rate (expressed as a percentage) of unemployed persons living within the City’s metropolitan area for the month of June 2015 through June 2024:

Fiscal Year
Ending
June 30
Labor
Force
Unemployment
Number Rate
2015 74,192 5,805 7.8%
2016 74,420 5,236 7.0%
2017 74,073 4,366 5.9%
2018 73,786 3,773 5.1%
2019 72,960 3,467 4.8%
2020 73,812 7,215 9.8%
2021 73,145 5,288 7.2%
2022 73,014 3,313 4.5%
2023 73,449 3,730 5.1%
2024 74,200 4,000 5.4%
Source: State Department of Employment
All numbers revised annually to source.

Construction Activity - For the calendar year ending December 2023, 3,883 building p ermits were issued, with a total permit valuation of $116,809,532. This represents a 19% decrease in the number of permits from the previous calendar year. Permit activity has been decreasing ov er the past few years, the city had seen a spike in permits as people rebuilt after widespread damage caused by wil dfire, snow, and hail events. As those reconstructions have begun to slow down the number of permits i ssued has seen a steady decrease. Multi-family permits have also increased due to increased available grant fu nding for affordable housing. Commercial permits have seen a decrease in recent years.

The following table sets forth the value and number of permits for new single and multiple family dwellings and businesses located in the City for the last four calendar years:

2020 2021 2022 2023
Single Family Units 204 151 234 94
Value Single Family*** $59,295,326 $42,510,729 $76,110,674 $36,6 60,286 Multi-Family Units 4 244 52 0
Multi-Family Permits** 1 3 4 0
Value Multi-dwellings $518,276 $38,036,402 $9,031,632 $0 Number of Permits 37 33 23 23
Value Business $35,738,443 $46,433,721 $44,679,660 $36,936,113 Total Permits*** 6,756 5,310 4,675 3,883
Value Total all Permits*** $165,613,379 $164,855,548 $192,655,27 6 $116,809,532 * Value of new construction only.
** Includes hotel and apartment units - "R" occupancies. *** Numbers Revised
Source: City of Redding Development Services Department

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Commerce - The City is a regional center of commerce for several Northe rn California counties. This is evidenced by its many shopping centers and malls. Support for retail sales is derived from a retail trade area population of approximately 127,800 in the primary trade area a nd approximately 259,400 in the secondary trade area. The primary trade area consists of the metropolitan urban area, including the cities of Redding, Shasta Lake, Anderson, and Red Bluff. The secondary trade area consists of Shasta, Trinity, and Tehama counties.

Taxable transactions in the City were approximately $2.6 billio n in calendar year 2023, a .71% decrease over the same period for 2021.

Taxable Taxable Transactions
Transactions Percentage
Year (in Thousands) Increase (Decrease)
2013 $1,924,122 4.52%
2014 $1,943,607 1.01%
2015 $1,992,806 2.53%
2016 $2,022,557 1.49%
2017 $2,118,481 4.74%
2018 $2,198,010 3.75%
2019 * $2,350,397 6.93%
2020 * $2,309,818 -1.73%
2021 * $2,623,720 13.59%
2022 $2,605,204 -0.71%
* Revised
Source: California Department of Tax and Fee Administration

Transportation - The City enjoys a strategic location on U.S. Interstate Highway 5, the principal transportation artery running north-south from Mexico to Canada. The City is also bisected by State Highway 299 and State Route 44, key east-west transportation arteries in Northern California.

The City is served by the Union Pacific Railroad and Amtrak for rail transportation. Greyhound serves the City with bus service. United Express Airlines provides air service from Redding Munic ipal Airport to San Francisco and Los Angeles, California. Alaska Airlines provides air serv ice from Redding Municipal Airport to Seattle, Washington. Avelo Airlines provides air service from Redding Municipal Airport to Burbank, California.

Redding Area Bus Authority (RABA) is the City’s multi-bus trans portation system and offers fifteen different fixed routes, rural service and demand response (curb-to-curb) services. RABA had a total ridership of 501,689 over the fiscal year which is an average total monthly ridershi p of approximately 41,807. Ridership over the past three fiscal years has declined following the onset of the Coronavirus pandemic.

Utilities - Electricity, solid waste collection and disposal, water, sto rm drainage, and wastewater services are provided by enterprise operations owned and operated by the Cit y. Natural gas is provided by Pacific Gas and Electric Company (PG&E); basic telephone service by AT&T.

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Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June xiv
Community Services - Youth in the area attend school at one of 45 elementary scho ols and middle/junior high schools, 15 charter schools, 1 regional occupation programs and 16 high schools. There are several higher educational institutions in the immediate area offering bachelo r and master’s degrees: Chico State University Center for Regional and Continuing Education (located in the He alth Science & University Center, downtown Redding), National University, Simpson University, and Shasta B ible College & Graduate School. S h a s t a Community College, a two-year institution, offers both day and evening courses to over 9,469 students. In addition, there are several Vocational & Technical schools offering a diverse range of programs.

The City’s parks system includes 59 developed parks and facilit ies, encompassing over 482 developed acres. This system includes nearly 180 acres of natural area parks, 40 plus miles of City-owned trails, and 17 special purpose facilities and almost 1,000 acres of natural open space. Among these special purpose facilities are the Redding Civic Auditorium, which hosts cultural/performing arts events, the Redding Aquatic Center; the Redding Big Sports Park; the California Soccer Park; the Senior Citizens Ce nter; the Redding Rodeo Grounds, the Martin Luther King Jr. Community Center; three boat ramps along the Sa cramento River. New for 2024, is the City’s .31 -acre Whistle Stop Park, a premier downtown plaza featuring a stage, cooling fog system and much more.

The City serves as the primary medical center for Northern Cali fornia. The City’s two general care hospitals serve approximately 330,000 people in Shasta, Tehama, Trinity, Siskiyou, and Lassen counties. The two largest hospitals have a total of 492 beds and employ approximately 2,8 60 full-time staff members. In addition, the City also has several specialized hospitals.

LONG-TERM FINANCIAL PLANNING

The City has long-range financial plans (typically ten years) for all of its major funds. On August 4, 2020 Council
Policy 412 was revised to change the minimum cash reserve balan ce from 5% to 10%. It is the policy of the City Council that all major funds except the Electric Utility mainta in a minimum of 10% of expenditures in cash reserves in all years of their financial plans. Due to the dyn amic industry, it is Council policy that the Electric Utility maintains a minimum of 1.80x Debt Service Coverage (DSC ) without reserves and maintains unrestricted cash reserves of 150 days of cash on hand. All of the City’s long- range financial plans meet these criteria.

ACCOUNTING SYSTEM AND BUDGETARY CONTROL

The City’s accounting records are maintained on the modified ac crual basis for governmental fund types and on the accrual basis for proprietary fund types. In developing the City’s accounting system, consideration is given to the adequacy of internal accounting controls which are designed to provide reasonable, but not absolute, assurance regarding:

1. The safeguarding of assets against losses from unauthorized use or disposition.

2. The reliability of financial records for preparing financial st atements and maintaining accountability of assets.

The concept of reasonable assuranc e recognized that the cost of a control procedure should not exceed the benefits likely to be derived a nd that the evaluation of costs and benefits require est imates and judgments of management.

All internal control evaluations occur within the above framewo rk. We believe the City’s internal accounting controls adequately safeguard assets and provide reasonable ass urance of proper recording of financial transactions.

Budgetary control is maintained at the department and fund leve l. The City Manager may transfer appropriations between divisions within a department within a fund; however, a ny revision that increases total fund expenditures without providing additional revenue to cover the total expenditure must be approved by City Council.

The City utilizes the encumbrance system as a management contro l technique to assist in controlling expenditures.

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Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June xv

FEDERAL GRANTS SINGLE AUDIT APPROACH

The City of Redding is required to undergo a single audit in co nformity with the provisions of the Single Audit Act of 1984, U.S. Office of Management and Budget (OMB) Circula r A-133, Audits of States, Local Governments and Non-Profit Organi zations, and the OMB’s Uniform Guidance. This report has been prepared under the “single audit” concept. Under this approach, one age ncy is recognized as the cognizant agency or oversight agency of the Office of Management and Budget. In th e case of the City of Redding, the State of California acts as the single audit oversight agency. The financial report will be reviewed by the oversight agency for compliance with all Federal grant requirements, and notific ation of the results will be provided to other Federal agencies. A separate schedule of Federal financial assistance is available upon request.

As a recipient of Federal, State, and County financial assistan ce, the City of Redding is responsible for implementing an adequate internal control structure to ensure c ompliance with applicable laws and regulations related to those programs. The results of the City of Redding’ s single audit for the fiscal year ended June 30, 2024, provided no instances of material weaknesses in the inter nal control structure or significant violation of applicable laws and regulations.

CERTIFICATE OF ACHIEVEMENT

The Government Finance Officers Association of the United State s and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City o f Redding for its Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2023 . This was the 40th consecutive year that the government has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently orga nized Annual Comprehensive Financial Report.

This report must satisfy both generally accepted accounting principles and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. We believe our current Annual Comprehensive Financial Report continues to meet the Certificat e of Achievement Program requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate.

ACKNOWLEDGMENTS

I would like to take this opportunity to thank the members of t he Audit Committee and the City Council for their cooperation and support in conduc ting the financial operations of the City in a responsible and progressive manner. Appreciation is also expressed to all City departments who contributed information provided in this financial report and the Finance Department’s staff who made this presentation possible. It is the combined effort of all participants that resulted in the issuance of this document.

Gregory Robinett
Director of Finance/City Treasurer

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Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Redding
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2023
Executive Director/CEO
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City Clerk
City Clerk
Reprographics
Records Management
City Clerk
Sharlene Tipton
City Attorney
Christian Curtis
City Manager
Barry Tippin
City Council City Treasurer
City Treasurer
Greg Robinett
Electorate
City Attorney
Parks
Recreation
Administration
Building Maint.

Communications
Administration
Redding Power
Distribution
Energy Services
Resource Group
Customer Service
Field Services
Administration
Suppression
Prevention
Permit Center
Building
Planning
Code Enforcement
Revised 12/26/2023
Electric
Nick Zettel
Community
Services
Travis Menne
Development
Services
Jeremy Pagan
Admin/Services
Field Operations
Investigations
Services
Grants
Public Works
GIS
Police I/T Staff
Info. Technology
Engineering
Transportation
Streets
Solid Waste
Fleet Maintenance
P/W Administration
Storm Drains
Electrical Technician
Water
Wastewater
Kari Kibler
Financial
Services
Brian Barner Michael Webb
Police
Personnel
Volunteer Svcs.

Risk Mgmt.

City Manager
Finance
Purchasing
Treasurer
Greg Robinett
Information
Technology
Anthony Van Boekel
Fire
Jerrod
Vanlandingham
Housing &
Economic
Development
Steve Bade
Housing
RABA
Airports
Personnel
Assistant City Manager
Steve Bade
City Clerk
Sharlene Tipton
xvii
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MUNICIPAL OFFICIALS

City Council

Mayor ...................................................................................... Tenessa Audette Vice Mayor .................................................................................... Julie Winter Mayor Pro Tempore ....................................................................... Jack Munns Council Member ........................................................................ Mark Mezzano Council Member-Appointee .................................................... Joshua Johnson

Administrative Personnel

City Manager ................................................................................ Barry Tippin Assistant City Manager ................................................................... Steve Bade City Attorney ............................................................................ Christian Curtis City Clerk .................................................................................Sharlene Tipton City Treasurer ............................................................................. Greg Robinett Director of Community Services ................................................. Travis Menne Director of Development Services .............................................. Jeremy Pagan Director of Electric .......................................................................... Nick Zettel Director of Financial Services .................................................... Greg Robinett Director of Information Technology ..................................... Tony Van Boekel Director of Personnel ....................................................................... Kari Kibler Director of Public Works .......................................................... Michael Webb Fire Chief ....................................................................... Jerrod Vanlandingham Police Chief .................................................................................. Brian Barner

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FINANCIAL

SECTION
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3 INDEP
ENDENT AUDITORS’ REPORT
To the Honorable Mayor and Members
of the City Council of the City of Redding
Redding, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Redding, California (the “City”) as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above 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, 2024, and the respectiv e changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordan ce with accounting principles generally accepted in the United States of America.

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

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

In preparing the financial statements, management is requi red 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, incl uding any currently known information that may raise substantial doubt shortly thereafter.

Packet Pg. 556
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June To the Honorable Mayor and Members
of the City Council of the City of Redding
4 Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whet her the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinions.

Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstateme nt 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 a ggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS and Government Auditing Standards, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, o
n a test basis, evidence regarding the amounts and disclosures in the financial statements.  Obtain an understanding of internal control relevant t o the audit in order to design audit pr ocedures that
are appropriate in the circu
mstances, 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 estim
ates made by management, as well as evaluate the overall presentation of the financial statements.  Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governa nce 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.

Packet Pg. 557
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June To the Honorable Mayor and Members
of the City Council of the City of Redding
5 Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, Budgetary Principles, Schedule of Revenues, Expenditures, and Changes in Fund Balance-Budget and Actual - General Fund, Schedules of Changes in Net Pension Liability and Related Ratios, Schedules of Plan Contributions (CalPERS and PARS), Sc hedule of Changes in Net OPEB Liability and Related Ratios, and Schedule of C ontributions-OPEB, as listed in the accompanyi ng table of contents, be presented to supplement the basic financial statement s. Such information is the responsibility of management and, although not a part of the basic financial statements, is re quired by the Governmental Accounting Standards Board who considers it to be an essential part of financial repor ting for placing the basic financial statements in an appropriate operational, economic, or historical contex t. We have applied certai n limited procedures to the required supplementary information in accordance with GAAS, which cons isted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient eviden ce to express an opinion or provide any assurance.

Supplementary Information
Our audit was conducted for the purpose of forming opini ons on the financial statements that collectively comprise the City’s basic financia l statements. The Combining and I ndividual Non-major Fund Financial Statements and Budgetary Comparison Schedules are presen ted for purposes of additional analysis and are not a required part of the basic financial statements. Th e Schedule of Passenger Fac ility Charges Collected and Expended and Interest Collected is presented fo r purposes of additional analysis as specified in the Passenger Facility Charge Guide for Public Agencies , issued by the Federal Aviation Administration, and is not a required part of the basic financial statements. Such informati on is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare th e basic financial statements.

The information has been subjected to the auditing pro cedures applied in the audit of the basic financial statements and certain additional pro cedures, including comparing and reconc iling such information directly to the underlying accounting and other records used to prepare th e basic financial statements or to the basic financial statements themselves, and other addi tional procedures in accordance with GA AS. In our opinion, the Combining and Individual Non-major Fund Financial Statemen ts, Budgetary Comparison Sc hedules, and Schedule of Passenger Facility Charges Collected a nd Expended and Interest Collected are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information
Management is responsible for the ot her information included in the annual report. The other information comprises the Introductory and Statistical Sections and the Supplemental Historical Information but does not include the basic financial statements and our audito rs’ report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.

In connection with our audit of the b asic financial statements, our responsibilit y is to read the other information and consider whether a material inc onsistency exists between the other information and the basic financial statements, or the other information otherwise appear s to be materially misstat ed. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

Packet Pg. 558
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June To the Honorable Mayor and Members
of the City Council of the City of Redding
6 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 11, 2025, on our consideration of the City’s intern al 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 d escribe the scope of our testing of inte rnal control over financial reporting and compliance and the results of that testing, and not to provi de an opinion on the effectiv eness of the City’s internal control over financial reporting or on compliance. That re port is an integral part of an audit performed in accordance with Government Auditing Standards in considering City of Redding’s internal control over financial reporting and compliance.

CliftonLarsonAllen LLP
Roseville, California
March 11, 2025
Packet Pg. 559
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Management’s Discussion and Analysis
For the Year Ended June 30, 2024

7 As management of the City of Redding (the City), we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City f or the fiscal year ending June 30, 2024. The management’s discussion and analysis is designed to (a) assist the reader in focusing on significant financial issues, (b) provide an overview of the City’s financial activit y, (c) identify changes in the City’s financial position (its ability to address future c hallenges), (d) identify any ma terial deviations from the financial plan (approved budget), and (e) identify individual fund issues or concerns.

We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal (beginning on pa ge ix) and the financial statements (beginning on page 27).

USING THIS FINANCIAL REPORT/OVERVIEW OF REPORT

This discussion and analysis is intended to serve as an introdu ction to the City’s basic financial statements. The basic financial statements consist of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This rep ort also contains other supplementary information in addition to the basic financial statements to provide the reader further understanding of the City.

Government-Wide Financial Statements

The government-wide financial statements are designed to provide the readers with a broad overview of the City’s finances, in a manner similar to a private-sector business. Th e government-wide financia l statements consist of the following parts:

Statement of Net Position : This statement presents information on all of the City’s asse ts and deferred outflows of resources and liabilities and deferred inflows of resources with the difference reported as net position.

Net Position = (Assets + Deferred Outflows of Resources) – (L iabilities + Deferred Inflows of Resources)

Over time, the change in net position may serve as a useful ind icator of whether the financial position of the City is improving or deteriorating.

Statement of Activities : This statement presents infor mation showing how the governmen t’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timin g of related cash flows. Thus, revenues and expenses are reported in this statement for some items that wil l result in cash flow in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).

Both of the government-wide financial statements distinguish fu nctions of the City that are principally supported by taxes and intergovernmental revenues (governmental activitie s), from other functions that are intended to recover all or a significant portion of their costs through use r fees and charges (business-type activities). The governmental activities of the City include general government, police, fire, public works, planning, recreation and culture, and community development. The business-type acti vities of the City include electric, water, wastewater, transportation (airport and bus), storm drainage, s olid waste, and convention center. Also included in the government-wide financial st atements are the Redding Housin g Authority, Redding Area Bus Authority (RABA), and the Redding Joint Power Financing Authority. While these agencies are lega lly separate agencies, their governing boards consist entirely of City Council members or in the case of RABA, the majority of the board members are members of the City Council. They function f or all practical purposes as departments of the City, and therefore have been included as an integral part of the primary government.

Packet Pg. 560
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2024

8 The government-wide financial statements can be found on pages 29-33 of this report.

Fund Financial Statements

A fund is a group of related accounts that are used to maintain control over resources that have been segregated for specific activities or objectiv es. The City, like other st ate and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal re quirements. All of the funds of the City can be divided into three categories as follows:

Governmental Funds : These funds are used to account for essentially the same fun ctions reported as government activities in the gover nment-wide financial statemen ts. However, unlike the government-wide financial statements, government al fund financial statements fo cus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resour ces available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements.

Because the focus of governmental funds is narrower than that o f the government-wide financial statements, it is useful to compare the information presented for governmental fu nds with similar information presented for governmental activities in the government-wide financial statem ents. By doing so, readers may better understand the long-term impact of the government’s near-term financing de cisions. Both the governmental fund balance sheet and governmental fund statement of revenues, expenditures , and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The City maintains twelve individual governmental funds. Infor mation is presented separately in the governmental fund balance sheet and in governmental fund statem ent of revenues, expenditures, and changes in fund balances for the General Fund, General Capital Project Fun d, and Community Development Fund, which are considered to be major funds. Data from the other nine governm ental funds is combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report.

The City adopts an annual appropriated budget for its General F und. A budgetary comparison statement has been provided for the General Fund to demonstrate compliance with this budget.

The basic governmental fund financial statements can be found on pages 37-43 of this report.

Proprietary Funds: The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its Electric Utility, Water Utility, Wastewater Utility, Solid Waste Utility, Airport Fund, Storm Drainage Utility, Redding Area Bus Authority, and the Convention Center Fund.

Internal service funds are an accounting device used to accumul ate and allocate costs internally among the City’s various functions. The City uses internal service funds to acc ount for centralized activities and services performed by certain departments for other departments of the C ity. The City has five internal service funds: the Equipment Fund to account for all maintenance of the motorized fleet and communication system; the Information Systems Fund to account for the data processing act ivities of the City; the Risk Management Fund to account for the self-insurance activities of the City; the Comm unications and the General Support Services Fund which accounts for mail, printing, records management, public r elations and building maintenance activities; and the Municipal Utilities Support Fund, which accounts for the ad ministrative management function of the municipal utilities and some public works. Because these servi ces predominantly benefit governmental rather than business-type functions, they have been included within go vernment activities in the government-wide financial statements.

Packet Pg. 561
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2024

9 Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund fina ncial statements provide sepa rate information for the Electric Utility, Water Utility, Wastewater Utility and Solid Waste Utility, which are considered to be major funds of the City. Data from the other enterprise funds is combined into a single aggregated presentation. The internal service funds are also combined into a single, aggregated presentation in the propriet ary fund financial statements. Individual fund data for the non-major enterprise funds and internal service funds i s provided in the form of combining statements elsewhere in this report.

The basic proprietary fund financial statements can be found on pages 45-55 of this report.

Fiduciary Funds: The City maintains custodial funds and a Private-purpose Trust Fund (Successor Agency to the Redding Redevelopment Agency). These funds are used to account for resources held for other parties outside the government. These funds are not reflected in the governmen t-wide financial statement because the resources of those funds are not available to support the City’s own programs.

The basic fiduciary fund financial statements can be found on pages 57-59 of this report.

Notes to the Financial Statements: The notes provide additional in formation that is essential to a full understanding of the data provide d in the government-wide and f und financial statements. The notes to the financial statements can be found on pages 61-143 of this report.

Other Information: In addition to the basic financial statements and accompanying n o t e s , t h i s r e p o r t a l s o presents required supplementary information, supplementary info rmation, statistical information and certain other supplemental historical information that may be useful to the u sers of the City’s financial statements. This information can be found in the last four sections of this report.

Packet Pg. 562
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2024

10 FINANCIAL HIGHLIGHTS

Government-Wide Financial Highlights

The assets and deferred outflows of resources of the City excee ded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $848 million (See Analysis of Statement of Activities and Changes in Net Position on page 12).
 $774 million represents the City’s investment in capital assets, less (1) accumulated depreciation, (2) related outstanding debt used to acquire those assets, and (3) related deferred charge on refunding.  $134 million is available for the City’s ongoing obligations related to programs with external restrictions.  ($60.7) million represents the unrestricted deficit and is prim arily the result of the City’s unfunded pension and Other Postemployment Benefits (OPEB) obligations.
 The City’s total debt decreased by $14.6 million (net of bond p remiums and discount and excluding deferred charges) during the year ending June 30, 2024. The Ci ty made $17.2 million in regular scheduled debt payments. The City added $2.6 million in lease, subscription and loan debt.  The City’s total net position increased by $31 million over the prior year.  The $45.5 million increase in net investment in capital assets represents the capital assets less accumulated depreciation/amortization, outst anding principal of capital deb t, original issue premiums on outstanding capital debt, related deferred inf lows, plus original issue dis counts on outstanding capital debt, related deferred outflows.
 The $1.8 million increase in restricted net position represents the change in resources that are subject to external restrictions on their use.
 The ($15.9) million increase in unrestricted net position is th e change in resources available to fund City programs to citizens and debt obligations to creditors.

Governmental Funds Financial Highlights

The City’s governmental funds’ combined ending fund balance of $132.8 million was an increase of $17.7 million from the prior year ending fund balance of $115.1 milli on. Amounts available for spending include Restricted, Assigned and Unassigned Fund Balances; these totale d $130.6 million, or 98.3 percent of fund balance. Of this amount:
 $110.1 million is restricted by law or externally imposed requirements.  $13.5 million is assigned or constrained by the City Council’s ‘intent” to be used for specific purposes, but are neither restricted nor committed.
 $7.0 million is unassigned fund balance.

Packet Pg. 563
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2024

11 GOVERNMENT-WIDE FINANCIAL ANALYSIS
2024 2023 2024 2023 2024 2023
Dollar
Change
Percent
Change
Assets:

Current and other assets 229,030 $ 226,005 $ 262,137 $ 262,286 $ 491,167 $ 488,291 $ 2,876 $ 0.6% Capital assets, net 378,133 364,798 561,771 542,813 939,904 907,611 32 ,293 3.6% Total assets 607,163 590,803 823,908 805,099 1,431,071 1,395,902 35,169 2.5% Deferred outflow of resources 96,762 75,394 66,284 55,070 163,046 130,464 32,582 25.0% Liab ilities:

Current liabilities 52,922 55,023 58,914 48,709 111,836 103,732 8,104 7 .8% Long-term liabilities 333,838 296,980 283,410 290,089 617,248 587,069 30,179 5.1% Total liabilities 386,760 352,003 342,324 338,798 729,084 690,801 38,283 5.5% Deferred inflow of resources 5,918 7,826 11,507 11,510 17,425 19,336 (1,911) -9.9% Net position:

Net investment in capital assets 348,503 335,471 425,350 392,864 773 ,853 728,335 45,518 6.2% Restricted 131,862 123,734 2,576 8,922 134,438 132,656 1,782 1.3% Unrestricted (169,118) (152,837) 108,435 108,075 (60,683) (44,762) (15,921) 35.6% Total net position 311,247$ 306,368 $ 536,361 $ 509,861 $ 847,608 $ 816,229 $ 31,379 $ 3.8% Gov ernmental
Activities
Business-Type
Activities Total Total
Summary of Ne t Position
(in thousands)

As noted earlier, over time, increases or decreases in Net Posi tion may serve as a useful indicator of a government’s financial position. In the case of the City, asse ts and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $847.6 million at the close of the current fiscal year.

Analysis of Summary of Net Position

The City’s total net position increased by 3.8% from a year ago, increasing from $816.2 million to $847.6 million.

Net position from governmental activities increased by $4.9 mil lion or 1.6% and net position from business activities increased by $26.5 million or 5.2%. The $4.9 millio n in net position is primarily due to an increase in notes and intergovernmental receivables and increases in capita l assets. The negative unrestricted net position at June 30, 2024 is primarily the result of the City’s unfunded pension and OPEB obligations.

The $26.5 million increase in net position from business-type a ctivities is primarily due to increases in capital assets and funds being accumulated for current and future capit al projects, especially in the Electric Utility Fund and Wastewater Utility Fund.

Most of the City’s net position is invested in capital assets ( i.e., land, buildings, utility plants, machinery, and equipment) less any related debt used to acquire those assets t hat is still outstanding. The City uses these capital assets to provide services to c itizens; consequently, these ass ets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, it should be noted that resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. The restricted net position of $13 4.4 million represents resources that are subject to external restrictions as to how they may be used. The remaining unrestricted net position deficit of ($60.7) million experienced a negative change of $15.9 million, or 35.6%, from the prior year. This change means less resources Packet Pg. 564
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2024

12 are available to fund the City’s ongoing obligations to its cit izens and creditors. The majority of the negative unrestricted net position is primarily the result of the City’s unfunded pension and OPEB obligations.

2024 2023 2024 2023 2024 2023
Dollar
Change
Percent
Change
Revenues
Program revenues
Charges for services 23,680 $ 21,599 $ 268,468 $ 290,901 $ 292,148 $ 312,500 $ (20,352) $ -6.5% Operating grants and contributions 53,006 62,613 8,587 8,021 61,593 70,634 (9,041) -12.8% Capital grants and contributions 14,380 23,464 7,911 13,998 22,291 37,462 (15,171) -40.5% Total program revenue 91,066 107,676 284,966 312,920 376,032 420,596 (44,564) -10.6% General revenue
Sales tax 31,068 30,469 - - 31,068 30,469 599 2.0% Property tax 28,525 26,375 - - 28,525 26,375 2,150 8.2% Investm ent earnings 2,845 1,113 9,525 2,410 12,370 3,523 8,847 251.1% Other 12,139 12,067 663 16 12,802 12,083 719 6.0% Total general revenues 74,577 70,024 10,188 2,426 84,765 72,450 12,315 17.0% Total revenue 165,643 177,700 295,154 315,346 460,797 493,046 (32,249) -6.5% Expe ns e s :

G eneral governm ent 8,221 11,843 - - 8,221 11,843 (3,622) -30.6% Police 54,474 46,860 - - 54,474 46,860 7,614 16.2% Fire 35,008 27,823 - - 35,008 27,823 7,185 25.8% Public works 22,360 17,061 - - 22,360 17,061 5,299 31.1% Planning 8,047 6,856 - - 8,047 6,856 1,191 17.4% Recreation and culture 14,565 14,168 - - 14,565 14,168 397 2.8% Community development 21,600 24,470 - - 21,600 24,470 (2,870) -11.7% Interest on long-term debt 1,662 1,451 - - 1,662 1,451 211 14.5% Electric - - 159,039 187,015 159,039 187,015 (27,976) -15.0% Water - - 22,977 21,305 22,977 21,305 1,672 7.8% Wastewater - - 28,480 27,966 28,480 27,966 514 1.8% Storm drain - - 3,218 2,653 3,218 2,653 565 21.3% Solid Waste - - 33,854 29,546 33,854 29,546 4,308 14.6% Transportation - - 14,723 13,701 14,723 13,701 1,022 7.5% Convention center - - 1,191 1,300 1,191 1,300 (109) -8.4% Total expenses 165,937 150,532 263,482 283,486 429,419 434,018 (4,599) -1.1% (294) 27,168 31,672 31,860 31,378 59,028 (27,650) -46.8% Transfers 5,172 7,834 (5,172) (7,834) - - - 0.0% Change in net position 4,878 35,002 26,500 24,026 31,378 59,028 (27,650) -46.8% Net position-beginning, as restated 306,369 271,367 509,861 485,835 816,230 757,202 59,028 7.8% Net position - ending 311,247$ 306,369 $ 536,361 $ 509,861 $ 847,608 $ 816,230 $ 31,378 $ 3.8% Increase in net position before
transfers and special item
Statement of Activities and Changes in Net Position
(in thousands)
Gov ernmental
Activities
Business-Typ e
Activities Total Total

Packet Pg. 565
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2024

13 Governmental Activities

Revenue Highlights

Total revenues for the governmental activities were $165.6 mill ion. The largest component of total revenue is taxes at $71.2 million, making up 43% of total revenue in the g overnmental funds. This is consistent with the nature and purpose of governmental funds, particularly in the G eneral Fund, where programs are largely supported by general tax revenues. The largest tax revenues rec eived by the General Fund include sales, property, and transient occupancy.

Some of the key changes in revenues are:

Sales tax increases by 2.0% from the prior year. The increase o f $0.6 million is in part due to a significant decrease in fiscal year 2022-23. The decrease in 2022-23 was $1.4 million or 4.3% from the prior year. As a result of this increase the City is still below the fiscal year 2021-2 2 level of sales tax by $0.8 million. In fiscal year 2023-24 there was a modest recovery from a significant decrease in the prior fiscal year. The decreases in fiscal year 2022-23 and the modest recovery in fiscal year 2023-24 is due to a dynamic economy weathering the impacts of high inflationary pressure. During fiscal year 2023- 24 the average inflation was 3.3% which was lowered from 6.3% in fiscal year 2022-23. The response to the i nflation has been increasing interest rates, which causes a tighter monetary environment with less major taxable purchases occurring.

Property taxes increased by 8.2% from the prior year. The $2.2 million increase is reflective of the rise in property values and the related re-assessment when properties are sold.

Transient occupancy taxes decreased by 2.2% from the prior year . The $0.16 million decrease is likely a result of the same pressures outlined in the discussion of sales tax. Transient Occupancy Tax is driven by travel to the area.

This has likely decreased as spending habits change with a slowing economy.

Operating grants and contributions decreased by $9.6 million pr imarily due to a decrease in operating grant revenue for Community Development housing development programs of $10 million.

Charges for services increased by $2.1 million primarily due to an increase in Fire due to Zogg fire settlement.

Capital grants and contributions decreased by $9.1 million prim arily due to a change in capital grants for Public Works.

Expense Highlights

Functional expenses for the year totaled approximately $165.9 million, an increase of $19.4 million from the prior year. The increase is a result of an increase in Police of $7.6 million and Fire of $7.2 million primary related to personnel related costs, vehicle maintenance and vehicle purcha ses. And an increase in Public works of $5.2, which included an increase in street maintenance projects also contributed to the increase.

The largest component of total expenses was for public safety ( police and fire), representing $89.5 million or

53.9% of the total. A large portion of public safety costs are funded from general revenues, primarily taxes. In contrast, Public Works expenses, which total $22.4 million, are funded largely from restricted revenues, including gas tax and federal and state grants. These resources pay for street maintenance and improvements, street, sweeping, transportation planning and other related costs.

Packet Pg. 566
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2024

14 The following graphs show an illustrative picture of where the City funds come from and where they are spent:

Capital Grants and
Contributions

8.7%
Sales Tax

18.8%
Property Tax

17.2%
Other Taxes

7.0%
Other

0.3%
Investment Earnings

1.7%
Charges by Service

14.3%
Operating Grants and
Contributions

32.0%
Revenues by Source - Governmental Activities
Packet Pg. 567
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2024

15 Business-Type Activities

Business-type activities increased the City’s net position by $ 26.5 million. Key elements of this increase are as follows:

 Revenues exceed expenses for electric, water, wastewater, and s torm drain as funds are being accumulated for current and future capital projects.

 Expenses exceed revenues for the convention center as the operating transfer from the general fund is not shown as revenue.

The following schedule shows business-type activities revenues and expenses:
2024 2023 2024 2023 2024 2023
Electric 172,650 $ 201,023 $ 159,039 $ 187,015 $ 13,611 $ 14,008 $ Water 29,627 27,907 22,977 21,305 6,650 6,602 Wastewater 36,717 36,194 28,480 27,966 8,237 8,228 Storm drainage 3,078 3,872 3,218 2,653 (140) 1,219 Solid waste 29,587 27,167 33,854 29,546 (4,267) (2,379) Transportation 13,126 16,546 14,724 13,701 (1,598) 2,845 Convention center 182 212 1,191 1,300 (1,009) (1,088) Investment earnings 9,525 2,409 - - 9,525 2,409 Transfers (5,172) (7,834) - - (5,172) (7,834) Other 663 16 - - 663 16 Total 289,983 $ 307,512 $ 263,483 $ 283,486 $ 26,500 $ 24,026 $ Revenue Expense
Changes in
Net Position
Revenues, Transfers and Expenditures - Business-Type Activities (in thousands)

Typically, business-type activities charge customers for the se rvices provided and the related necessary capital costs. As can be seen from the above graph, charges for servic es make up the vast majority (91.2%) of the revenues of the business-type activities.

Charges for
Services

91.2%
Investment
Earnings

3.2%
Capital Grants &
Contributions

2.7%
Operating Grants
& Contributions

2.9%
Revenues by Source - Business-Type Activities
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Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2024

16 Analysis of the Governmental Fund Balances

Nonsp end ab le Restricted Assigned U nassigned T otal
General fund 2,128$ 432 $ 13,529$ 7,458 $ 23,547 $ Major funds
Capital projects - 9,097 - - 9,097 Co mmun ity Dev elop men t 32 69,910 - - 69,942 Other gov ernmental funds 66 30,622 - (470) 30,218 2,226$ 110,061$ 13,529 $ 6,988 $ 132,804$ Governmental Fund Balances
(in thousands)

Governmental Funds

The focus of the City’s governmental funds is to provide inform ation on near-term inflows, outflows, and balances of spendable resources (modified accrual basis of acco unting). Such information is useful in assessing the City’s financing requirements. In particular, total fund b alance less the non-spendable portion is a useful measure of a government’s resources available for spending at the end of the fiscal year.

At June 30, 2024, the City’s gov ernmental funds reported total fund balance of $132.8 million, an increase of $17.7 million in comparison with the prior year’s total ending fund balance. The components of total fund balance are as follows (for more information see Note 19 – Fund Balances):
 Non-spendable Fund Balance, $2.2 million are amounts that are n ot spendable in form, or are legally or contractually required to be maintained intact, and are made up of (1) prepaid expenses, (2) inventories, and (3) endowments. $2 million for prepaid the July 2024 health insurance due in June.  Restricted Fund Balance, $110.1 million consists of amounts wit h constraints put on their use by creditors, grantors, contributors, laws, regulations or enabling legislati on. Examples of restrictions on funds are those for (1) purpose of fund, (2) reserves associated with issued bonds, and (3) grants for capital outlay.  Assigned Fund Balance, $13.5 million are resources that are set aside for a particular purpose, and are made up of amounts that reflect resources for specific purposes such as (1) encumbrances, and (2) future expenditures/contingencies.
 Unassigned Fund Balance, $7.0 million represents the residual balance for the City’s governmental funds.

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Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2024

17 General Fund

The General Fund is the chief operating fund of the City. At J une 30, 2024, unassigned fund balance was $7.5 million. As a measure of the General Fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 6% of the total General Fund expenditures, while total fund balance represents 19.1% of total General Fund expenditures.

The fund balance of the City’s General Fund decreased by $3.0 million during the year ended June 30, 2024.

General Fund revenues increased $9.5 million, and expenditures increased by $9.4 million from fiscal year-end 2023 to 2024. The increase in revenue was primarily due to inc reases in property tax revenue of $2.2 million (4%). Tax rates were not changed during the year. Also, inter governmental revenues increased $2.2 million and other revenues increased $3.6 million due to a Zogg Fire Settlement.

The $9.4 million increase in expenditures is primarily due to a n increase in expenditures for Public Safety of $8.8 million. The expenditures contributing to the increase are pri marily due to increases in employee costs and increasing in vehicle maintenance, communications, and information technology.

Other financing sources decreased by $1.0 million. This is pri marily due to a decrease in net transfers of $1.3 million and increase in gains on sale of assets of $0.2 million.

General Fund
2024 2023
Dollar
Change
Percent
Change
Total revenue 103,839 $ 94,350 $ 9,489 $ 10.1% Total expenditures 123,113 113,759 9,354 8.2% Excess (deficiency) of revenues (19,274) (19,409) 135 -0.7% Other financing sources (uses) 16,259 17,246 (987) -5.7% Net change in fund balance (3,015) (2,163) (852) 39.4% Fund balance
Beginning of year 26,562 28,725 (2,163) -7.5% End of year 23,547 $ 26,562 $ (3,015) $ -11.4% Governmental Funds
Summary of Revenues, Expenditures, and Changes in Fund Balances (in thousands)

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Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2024

18 Capital Project Fund

The Capital Project Fund accounts for the financing and constru ction activities of the City. On June 30, 2024, the restricted fund balance was $9.1 million. Restricted fund bala nce represents 66.8% of the total Capital Project Funds expenditures.

The fund balance of the City’s Capital Project Fund increased $ 7.6 million during the year ended June 30, 2024 primarily due to a decrease in capital outlay. The balance is due to an increase in intergovernmental revenues.

Capital Project Fund revenues in creased $3.2 million and expend itures decreased $4.5 million. The increase in revenue was primarily due to an increase in state grant revenue and the decrease in expenditures was the result of increased capital outlay for construction project activity.

Capital Projects Fund
2024 2023
Dollar
Change
Percent
Change
Total revenue 21,226 $ 17,989 $ 3,237 $ 18.0% Total ex penditures 13,624 18,172 (4,548) -25.0% Ex cess (deficiency) of revenues 7,602 (183) 7,785 -4254.1% Other financing sources (uses) - (33) 33 -100.0% Net change in fund balance 7,602 (216) 7,818 -3619.4% Fund balance
Beginning of year 1,496 1,712 (216) -12.6% End of year 9,098 $ 1,496 $ 7,602 $ 508.2% Governmental Funds
Summary of Revenues, Expenditures, and Changes in Fund Balances (in thousands)

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Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2024

19 Community Development Fund

The Community Development Fund accounts for the financing and r ehabilitation of homes and public facilities, financing of multifamily housing, and homeless services of the City. On June 30, 2024, the restricted fund balance was $69.9 million. Restricted fund balance represents 650% of the total Community Development Fund expenditures.

The fund balance of the City’s Community Development fund increased $12.6 million during the year ended June 30, 2024 primarily due to the increase in notes receivable.

Community Development Fund revenues increased $0.03 million and expenditures increased $0.2 million. The increase in revenue was primarily due to an increase in grant revenue and the increase in expenditures was the result of development expenditures and homeless services.

Community Development
2024 2023
Dollar
Change
Percent
Change
Total revenue 23,404 $ 23,379 $ 25 $ 0.1% Total expenditures 10,761 10,558 203 1.9% Excess (deficiency) of revenues 12,643 12,821 (178) -1.4% Other financing sources (uses) - - - 0.0% Net change in fund balance 12,643 12,821 (178) -1.4% Fund balance
Beginning of year 57,298 44,477 12,821 28.8% End of year 69,941 $ 57,298 $ 12,643 $ 22.1% Governmental Funds
Summary of Revenues, Expenditures, and Changes in Fund Balances (in thousands)

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Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2024

20 Analysis of Proprietary Funds

Proprietary Funds: The City’s proprietary funds provide the same type of informat ion found in the government- wide financial statements, but in more detail. The following s chedule shows the changes in net position of the major proprietary funds and restricted and unrestricted portion s of net position of the major proprietary funds of the City.

Net Position
June 30, 2023
Changes in
Net Position
Net Position
June 30, 2024
Electric Utility 135,612 $ 10,199 $ 145,811 $ Water Utility 125,716 9,260 134,976 Wastewater Utility 169,629 9,027 178,656 Solid Waste Collection/Disposal 20,631 (3,108) 17,523 Changes in Net Position - Major Proprietary Funds
(in thousands)

Net
Inv estment in
Capital Assets
Restricted Net
Position
Unrestricted
Net Position
Total Net
Position
Electric Utility 110,171 $ - $ 35,640$ 145,811 $ Water Utility 83,587 2,576 48,813 134,976 Wastewater Utility 142,322 - 36,334 178,656 Solid Waste Collection/Disposal 19,577 - (2,054) 17,523 Net Position - Restricted and Unrestricted
Major Proprietary Funds as of June 30, 2024
(in thousands)

The factors affecting the above changes in net position and oth er factors regarding the proprietary funds have already been addressed in the discussion of the City’s business-type activities

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Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2024

21 General Fund Budgetary Highlights

The City adopts two one-year budgets every other year. The fis cal year ending June 30, 2024, was the first year of the two-year budget process. Differences between the origin al General Fund budget and the amended General Fund budget expenditures are shown below:

Original Amended
Increase
(Decrease)
G eneral governm ent 13,620 $ 13,674 $ 54 $ Public safety:

Police 49,946 52,508 2,562
Fire 28,523 33,789 5,266
Public works 22,272 23,194 922 Planning 8,958 9,083 125
Recreation and culture 9,926 10,720 794 Principal paym ents 1,245 1,711 466 Interest paym ents and bond costs 784 873 89 Total expenditures 135,274 $ 145,552 $ 10,278 $ General Fund Original and Amended Budget
(in thousands)

As shown in the previous table, the General Fund’s original bud get was amended to include increase of $10.3 million or approximately 8.0%. The reasons for this increase are as follows:
 The Police budget increased by $2.6 million primarily due to gr ants and grant type agreements approved and received after the budget was originally adopted of $0.5. It is the City policy not to include grant expenditures in the original a dopted budget if grant approval h as not been finalized. These grants were for traffic enforcement, police officers and school resource office rs along with other Police related activities.

Additionally, Zogg fire settlement funds of $0.5 million, red l ight camera program increase of $0.3 million, and staff costs increase of $0.1 million
 The Recreation and Culture budget increased by $0.8 million pri marily due to $0.1 million for Redding Sports Park personnel, $0.3 million for operating grant funding.  The Fire budget increased by $5.3 million primarily due to $2.6 million for operating grant funding, $2.3 million for personnel due to contractual increases, $0.4 million related to Zogg fire settlement funds.  The Public works budget increased by $0.9 million primarily due increased personnel.  The City does not include rolling stock appropriations in its o riginal budget. It is a Council policy to maintain a rolling stock fund and equipment replacement fund se parate from the General Fund from which departments, with the City Mana ger approval, can transfer funds to the General Fund and amend the adopted budget for the transfers. During the year departments’ budgets were increased by $1.1 million due to rolling stock transfers and $0.4 million due to equipment replacement transfers.

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Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2024

22 Capital Asset and Debt Administration

Capital Assets

The City’s investment in capital assets for its governmental an d business-type activities as of June 30, 2024, totaled $939.9 million (net of accu mulated depreciation). This investment in capital assets includes land, buildings, utility plants, collections, generation, distributio ns and transmissions systems, improvements, machinery and equipment, park facilities, roads, bridges and ri ght-to-use leases and subscriptions. The City’s total investment in capital assets for the current year increas ed by $32.3 million. Investment in capital assets for governmental activities increased $13.3 million or 3.7% and bus iness-type activities increased $18.8 million or

3.5%.

Major capital asset events during the current fiscal year included the following:
 Developers added an estimated $4.5 million of water, wastewater , electric, storm drainage improvements, parks, streets, sidewalks and traffic signals.
 The City added $5.2 million on Block 7 project, $3.5 million on Old Alturas Bridge project, $2.5 million on Bechelli ATP project, $1.6 million on Citywide ERP system and $ 1.4 million on Eastside Road Bridge project.
 Electric Utility added $7.5 million on system improvements, $2. 8 million on Overhead and Underground Infrastructure, $1.1 million on SSP Lifecycle project, and $1.0 million on vehicles.  Water Utility added $6.8 million on Lake Boulevard Water Line p roject, $2.7 million on PH1 Replacement,

1.4 on EW 12 Wellhead Treatment, $1.2 million on Athens Area Water Main project, $0.1 million in meters and $0.1 million on vehicles.
 Wastewater Utility added $6.1 million on Biosolid Pyrolysis, $2 .2 million on Trinity Street Sewer project, and $0.1 million on vehicles.
 Storm Drainage Utility added $0.5 million on system improvement s and $0.2 million on Eastside Road Storm Drain project.
 Solid Waste added $2.9 million on vehicles and heavy equipment and $0.6 million on Lift Station Improvements.
 Airport added $0.8 million on Runway Rehabilitation and Enhancements.  Fire added $2.2 million in vehicles and fire engines and trucks. Police added $1.4 million in vehicles.  Parks added $2.9 million on Shastina Park and 1.1 million on Downtown Urban Park.  The City deleted assets, net depreciation, of $0.5 million in plant assets, and $0.2 million in vehicles.

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Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2024

23 Balance Balance Dollar Percent
June 30, 2024 June 30, 2023 Change Change
Gov ernmental activ ities:

Capital assets, not being depreciated
Land 39,93 0$ 36,427 $ 3,503 $ 9.6% Construction in progress 74,521 67,370 7,151 10.6% Capital assets, being depreciated
Buildings 21,032 22,881 (1,849) -8.1% Im provem ents other than buildings 26,464 29,261 (2,797) -9.6% Infrastructure 199,715 197,852 1,863 0.9% Automotive equipment 10,095 7,864 2,231 28.4% Furnishings and equipm ent 1,900 2,408 (508) -21.1% Assets under lease:

Improvements 13 43 (30) -69.8% Automotive equipment 612 427 185 43.3% Subscriptions 3,851 265 3,586 1353.2% Gov ernmental activ ities cap ital assets, net 378,133$ 364,798 $ 13,335 $ 3.7% Business-typ e activ ities:

Capital assets, not being depreciated
Land 20,394 $ 20,394 $ - $ 0.0% Construction in progress 80,484 55,200 25,284 45.8% Capital assets, being depreciated
Utility plants 386,219 388,322 (2,103) -0.5% Buildings 24,254 26,433 (2,179) -8.2% Im provem ents other than buildings 19,786 21,152 (1,366) -6.5% Automotive equipment 20,233 19,529 704 3.6% Furnishings and equipm ent 6,352 7,890 (1,538) -19.5% Assets under lease:

Equipm ent 81 130 (49) -37.7% Subscriptions 3,968 3,763 205 5.4% Business-typ e activ ities cap ital assets, net 561,771$ 542,813 $ 18,753 $ 3.5% Total entity-wide capital assets 939,904$ 907,611 $ 32,293 $ 3.6% See Note 6 to the Financial Statements for additional information regarding capital assets.

Changes in Capital Assets, net Depreciation
(in thousands)

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Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2024

24 Long Term Debt

The following schedule shows the changes in long-term debt for the year not including bond discounts and bond premiums (amounts are in thousands).

Balance
June 30, 2023
Additions/
Transfers Reductions
Balance
June 30, 2024
Gov ernmental activ ities:

Subscriptions payable 273 $ 2,127 $ 656 $ 1,744 $ Leases payable 426 352 225 553 Lease revenue bonds 25,605 - 1,640 23,965 Special assessment debt - - - - Loan 574 - 118 456 Total government activities 26,878 2,479 2,639 26,718 Business-typ e activ ities:

Subscriptions payable 3,831 152 994 2,989 Leases payable 131 - 48 83 Revenue bonds 131,070 - 13,540 117,530 State loan payable 335 - 32 303 Total business-type activities 135,367 152 14,614 120,905 Total outstanding long-term debt 162,245$ 2,631 $ 17,253 $ 147,623 $ Changes in Long Term Debt
(in thousands)

The City’s total debt decreased by $14.6 million (net of bond p remiums and discounts excluding deferred charges) during the fiscal year e nding June 30, 2024. The City made $17.3 million in regular scheduled debt payments. The lease obligations increased by $0.35 million and subscription obligations increased by $2.3 million.

Currently, the City’s legal debt margin is $298 million. Howev er, this relates only to general obligation type bonds. Other factors such as ava ilable revenues, special asses sment pledges, etc. will affect the City’s actual capacity to issue future debt.

Additional information on the City’s long-term debt can be found in Note 9 on pages 93-97 of this report.

Deferred Outflows of Resources & Deferred Inflows of Resources

Deferred Outflows of Resources

This classification balance, although similar to “assets,” is s et apart because these items do not meet the technical definition of being a City asset on the date of these financial statements. In other words, these amounts are not available to pay liabilities in the way assets are available. When all the recognition criteria are met, the deferred outflow of resources will become an expense/expenditure.

There are two primary components of the deferred outflows as re ported. The first component is related to the implementation of GASB Statement No. 68 and GASB Statement No. 71 for pension liability reporting. GASB 71 requires that contributions made during the fiscal year to t he retirement system be reported as deferred Packet Pg. 577
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2024

25 outflows of resources. Other pot ential deferred outflows of re sources are attributable to the various components that impact pension changes and can include investment earnings , changes due to actuarial assumptions, and differences between expected or actual experience.

The second component of the deferred outflows of resources is r elated to the implementation of GASB Statement 75 for Other Post-Employment Benefits (OPEB). GASB 75, much like GASB 68 and 71, requires the recognition of deferred outflows of resources. The deferred outflows of re sources are attributable to the various components that impact OPEB liability and can include contributions made a fter the measurement date (current year contributions), investment earnings, changes due to actuarial a ssumptions, and the difference between expected and actual experience.

Deferred Inflows of Resources

Deferred inflows of resources are the counterpart to deferred o utflows of resources on the Statement of Net Position. Deferred inflows of resources are not technically li abilities of the City as of the date of the financial statements. When all the recognition criteria are met, the def erred inflow of resources will become revenue or an increase to net position.

Deferred inflows of resources can also be impacted by the imple mentation of GASB 68 for pension liability reporting and GASB 75 for OPEB. Deferred inflows of resource s related to pensions represent the net amount attributable to the various components that impact pension chan ges, and can include investment earnings, changes due to actuarial assumptions, and differences between expected or actual experience. Deferred inflows related to OPEB can include the same components.

Deferred inflows of resources are also impacted by the implemen tation of GASB 87 for lease reporting. Deferred inflows of resources related to leases represent the deferred r evenue related to the present value of lease receivable.

Additional information pertaining to deferred outflows and infl ows for pensions and OPEB can be found in notes 17 and 18.

Economic Factors and Next Year’s Budgets and Rates

 The City of Redding has experienced a decrease in population si nce 2020 of less than one percent per year.

This trended changed in 2024 as the City experienced an increas e of 0.3%. While the unemployment rate has decreased from 10% in 2020 to 5.4% in 2024, which included a slight increase of 0.3% in 2024.

 Inflationary trends in the region compare favorably to national indices.

 Overall tax revenue for the City’ s General Fund increased by $2 .7 million during the year. This was primarily due to the increase in p roperty tax ($2.1 million) an d increases in sales tax ($0.6 million), cannabis tax ($0.2 million), and a decrease in transient occupancy tax ($0.2 million).

 The City’s General Fund two most major tax revenue sources are sales tax and property tax. Sales tax revenue is budgeted to increase by 2.5% in fiscal year 2024-25. Property tax revenue is budgeted to increase by 3% in fiscal year 2024-25.

 The City’s residential building activity is expected to increas ed slightly during 2024. However, building permit activity has yet to match r ecord highs seen in the years following the Carr fire. In 2024 total permit numbers are expected to be nearly identical to 2023. Overall, building activity is expected to be consistent Packet Pg. 578
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2024

26 with the prior year with the exception of residential units hav ing seen a slight boost. Permit activity is expected to maintain these moderate levels through the end of fiscal year 2025.

 The future economic activity is uncertain at this time as many experts are predicting a possible recession in calendar year 2025. The duration and severity of possible reces sion is uncertain as forecasts of future economic activity very.

 The City of Redding Electric Utility fund is pursuing a bond is suance that may be completed in fiscal year 2024-25. If issued this bond issuance will not exceed $65 mil lion and will be used to fund various general system and capital improvement projects. Any bond issuance costs will come from proceeds if issued.

All of these factors were considered in preparing and updating the City’s budget for the 2024-25 fiscal year.

During the current fiscal year fund balance in the General Fund decreased by $3.0 million to $26.5 million. The City of Redding has a City Council policy that requires major f unds, including the General Fund, to prepare and maintain 10-year financial plans that maintain a minimum 10% ca sh reserve for all years of the plan. The City Council passed a 10-year Financial Plan on June 20, 2024 which maintains this standard for all years. The fund balance is different than cash, which is used as the basis of m easurement for the City Council policy (see Note 1 for definitions of fund balance and cash). Any changes to fund balance associated with changes in cash will be analyzed and updated with future revisions to the City of Redding General Fund 10-year plan.

The Electric, Water, Wastewater, and Solid Waste rates will inc rease either as approved by City Council or at rates proposed to City Council. The current rates for Water, W astewater and Solid Waste were adopted by City Council on November 7, 2023. The current Electric rates were adopted by City Council on December 5, 2023.

Request for Information

This financial report is designed to provide a general overview of the City’s finances for a ll those with an interest in the government’s finances. This report can be found on the City of Redding website, www.cityofredding.gov under Departments, under Finance Department. Questions concerning any information provided in this report or request for additional financial information should be directed to:

The City of Redding - Finance Department
777 Cypress Avenue
Redding, CA 96001

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BASIC FINANCIAL

SECTION
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GOVERNMENT-WIDE

FINANCIAL STATEMENTS
29 Packet Pg. 582
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June Governmental Business-Type
Activities Activities Total
ASSETS
Current assets:

Cash and investments 90,821,156 $ 184,262,891 $ 275,084,047 $ Receivables:

Interest 6,131,583 578,761 6,710,344 Accounts, net 2,420,757 26,514,503 28,935,260 Lease 311,291 778,320 1,089,611 Taxes 7,009,600 - 7,009,600 Intergovernmental 22,112,058 4,272,723 26,384,781 Notes, net 83,899,491 - 83,899,491 Special assessments 321,556 - 321,556 Other 1,132,850 - 1,132,850 Inventories 783,590 15,405,375 16,188,965 Prepaid items 1,734,297 2,022,882 3,757,179 Deposits - 393,450 393,450 Total current assets 216,678,229 234,228,905 450,907,134 Noncurrent assets:

Internal balances 9,464,883 (9,464,883) - Restricted assets:

Cash and investments 1,119,178 6,551,113 7,670,291 Interest receivable 15 4,523 4,538 Lease receivable, net 1,767,884 9,132,429 10,900,313 Capital assets:

Land and construction in progress 114,450,556 100,878,374 215,328,930 Depreciable capital assets, net 263,682,904 460,892,478 724,575,382 Investment in JPA - 8,114,485 8,114,485 Storage base gas - 13,570,000 13,570,000 Total noncurrent assets 390,485,420 589,678,519 980,163,939 Total assets 607,163,649 823,907,424 1,431,071,073

DEFERRED OUTFLOWS OF RESOURCES
Deferred charge on refunding bonds or debt 124,917 5,398,112 5,523,029 Deferred outflows related to other post employment benefits 24,1 27,301 16,460,838 40,588,139 Deferred outflows related to pensions 72,509,731 44,425,169 116,934,900 Total deferred outflows of resources 96,761,949 66,284,119 163,046,068 (Continued)
See accompanying Notes to the Basic Financial Statements.

City of Redding
Statement of Net Position
June 30, 2024
Primary Government
30 Packet Pg. 583
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June Governmental Business-Type
Activities Activities Total

LIABILITIES
Current liabilities:

Accounts payable 6,068,720 15,367,504 21,436,224 Accrued liabilities 2,399,008 1,713,935 4,112,943 Intergovernmental payable 1,963,677 5,761,660 7,725,337 Accrued interest payable 301,522 480,406 781,928 Unearned revenue 25,848,876 1,763,215 27,612,091 Deposits 196,807 9,645,430 9,842,237 Landfill closing costs, due within one year - 185,700 185,700 Claims and judgements payable, due within one year 5,036,490 - 5,036,490 Compensated absences, due within one year 5,826,489 3,587,921 9,414,410 Long-term debt, due within one year 2,440,786 17,427,691 19,868,477 Aggregate other post employment benefits liability 2,840,081 2,980,082 5,820,163 Total current liabilities 52,922,456 58,913,544 111,836,000 Noncurrent liabilities:

Landfill closing costs, due in more than one year - 2,678,671 2,678,671 Claims and judgements payable, due in more than one year 13,605, 950 - 13,605,950 Accrued compensated absences, due in more than one year 10,169,1 32 7,674,315 17,843,447 Long-term debt, due in more than one year 26,851,773 122,226,191 149,077,964 Aggregate other post employment benefits liability 44,116,569 29,056,079 73,172,648 Aggregate net pension liability 239,094,911 121,774,287 360,869,198 Total noncurrent liabilities 333,838,335 283,409,543 617,247,878 Total liabilities 386,760,791 342,323,087 729,083,878

DEFFERED INFLOWS OF RESOURCES
Deferred inflows related to other post employment benefits 2,260 ,870 1,542,474 3,803,344 Deferred inflows related to pensions 1,578,293 54,099 1,632,392 Deferred inflows related to leases 2,079,175 9,910,749 11,989,924 Total deferred inflows of resources 5,918,338 11,507,322 17,425,660

NET POSITION
Net investment in capital assets 348,502,520 425,350,722 773,853,242 Restricted for:

Capital outlay - 2,575,699 2,575,699 Debt service 619,346 - 619,346 Housing 19,226,627 - 19,226,627 Community development 76,444,659 - 76,444,659 Public works 24,581,897 - 24,581,897 Public safety 2,995,380 - 2,995,380 Community services 6,483,393 - 6,483,393 Other 1,510,313 - 1,510,313 Total restricted 131,861,615 2,575,699 134,437,314 Unrestricted (deficit) (169,117,666) 108,434,713 (60,682,953) Total net position 311,246,469$ 536,361,134 $ 847,607,603 $ (Concluded)
See accompanying Notes to the Basic Financial Statements.

Primary Government
City of Redding
Statement of Net Position (Continued)
June 30, 2024
31 Packet Pg. 584
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June Operating Capital Total
Charges for Grants an d Grants and Program
Functions / Programs Expenses Services Contributions Contributions Revenues Primary government:

Governmental activities:

General government 8,221,348$ 8,278,901 $ 922,261 $ 143,257 $ 9,344,419 $ Police 54,474,231 2,181,754 5,483,446 72,548 7,737,748 Fire 35,008,283 4,351,161 1,170,252 80,763 5,602,176 Public works 22,360,331 1,583,430 9,670,312 11,796,709 23,050,451 Planning 8,047,061 4,818,864 228,000 - 5,046,864 Recreation and culture 14,564,444 2,421,009 1,287,186 2,287,108 5,995,303 Community development 21,599,533 44,984 34,243,936 - 34,288,920 Interest on long-term debt 1,662,180 - - - - Total governmental activities 165,937,411 23,680,103 53,005,393 14,380,385 91,065,881 Business-type activities:

Electric 159,038,929 170,020,064 274,687 2,354,692 172,649,443 Water 22,977,291 27,587,108 1,552,562 487,404 29,627,074 Wastewater 28,479,691 34,767,686 9,898 1,939,135 36,716,719 Storm drainage 3,218,220 2,280,989 461,820 335,535 3,078,344 Solid waste 33,853,772 29,472,283 114,232 - 29,586,515 Transportation 14,723,526 4,158,212 6,173,985 2,794,004 13,126,201 Convention center 1,191,406 181,767 - - 181,767 Total business-type activities 263,482,835 268,468,109 8,587,184 7,910,770 284,966,063 Total primary government 429,420,246$ 292,148,212 $ 61,592,577 $ 22,291,155 $ 376,031,944 $ (Continued)
See accompanying Notes to the Basic Financial Statements.

Program Revenues
City of Redding
Statement of Activities and Changes in Net Position
For the Year Ended June 30, 2024
32 Packet Pg. 585
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June Governmental Business-Type
Functions / Programs Activities Activities Total
Primary government:

Governmental activities:

General government 1,123,071$ - $ 1,123,071$ Police (46,736,483) - (46,736,483) Fire (29,406,107) - (29,406,107) Public works 690,120 - 690,120 Planning (3,000,197) - (3,000,197) Recreation and culture (8,569,141) - (8,569,141) Community development 12,689,387 - 12,689,387 Interest on long-term debt (1,662,180) - (1,662,180) Total governmental activities (74,871,530) - (74,871,530) Business-type activities:

Electric - 13,610,514 13,610,514 Water - 6,649,783 6,649,783
Wastewater - 8,237,028 8,237,028 Storm drainage - (139,876) (139,876) Solid waste - (4,267,257) (4,267,257) Transportation - (1,597,325) (1,597,325) Convention center - (1,009,639) (1,009,639) Total business-type activities - 21,483,228 21,483,228 Total primary government (74,871,530) 21,483,228 (53,388,302) General revenues and transfers:

Taxes:

Property taxes, levied for general purpose 28,524,507 - 28,524,507 Transient occupancy taxes 7,133,234 - 7,133,234 Sales taxes 31,067,691 - 31,067,691 Motor vehicle taxes 115,907 - 115,907 Franchise taxes 1,312,082 - 1,312,082 Other taxes 3,021,359 - 3,021,359 Total taxes 71,174,780 - 71,174,780 Investment income (loss) 2,845,092 9,525,186 12,370,278 Other 144,624 382,838 527,462
Gain (Loss) on sale of assets 413,038 280,351 693,389 Transfers 5,171,815 (5,171,815) -
Total general revenues and transfers 79,749,349 5,016,560 84,765,909 Changes in net position 4,877,819 26,499,788 31,377,607 Net position:

Beginning of year 306,368,650 509,861,346 816,229,996 End of year 311,246,469 $ 536,361,134 $ 847,607,603 $ (Concluded)
See accompanying Notes to the Basic Financial Statements. and Changes in Net Position
Net (Expenses) Revenues
City of Redding
Statement of Activities and Changes in Net Position (Continued) For the Year Ended June 30, 2024
33 Packet Pg. 586
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June This page intentionally left blank
34 Packet Pg. 587
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June

FUND FINANCIAL STATEMENTS
Governmental Fund Financial Statements
Proprietary Fund Financial Statements
35 Packet Pg. 588
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June This page intentionally left blank
36 Packet Pg. 589
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June

GOVERNMENTAL FUND

FINANCIAL STATEMENTS
This fund is the general operating fund of the City which accounts for all financial resources except those required to be accounted for in another fund.

Community Development Fund
General Capital Projects Fund
General Fund
This fund was established to account for financing and rehabilitation of homes and public facilities, homeless services and the financing of multifamily housing. Financing is provided by Federal Department of Housing and Urban Development and the California Department of Housing and Community Development
This fund was established to account for the financing and construction activities of the general government.
37 Packet Pg. 590
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June General Community Non-Major Total
General Capital Projects Development Governmental Governmental Fund Fund Fund Funds Funds
ASSETS
Cash and investments 24,550,081 $ 13,010,994 $ 10,770,661 $ 21,620,306 $ 69,952,042 $ Accounts receivable, net 2,130,480 59,973 42,585 48,953 2,281,991 Lease receivable 2,079,175 - - - 2,079,175 Intergovernmental receivable 1,847,924 11,026,860 5,315,134 3,921,863 22,111,781 Interest receivable 53,034 35,067 3,239,255 2,752,251 6,079,607 Taxes receivable 7,009,600 - - - 7,009,600 Other receivable 1,083,635 395 12,244 36,576 1,132,850 Due from other funds 827,921 - - - 827,921 Prepaid items 1,000,622 - 31,723 66,137 1,098,482 Inventories 206,267 - - - 206,267 Restricted assets:

Cash and investments 922,369 2,564 - 194,245 1,119,178 Interest receivable 5 10 - - 15 Interfund receivable 251,407 - - - 251,407 Special assessments receivable - - - 321,556 321,556 Notes receivable - - 68,762,751 15,136,740 83,899,491 Total assets 41,962,520 24,135,863 88,174,353 44,098,627 198,371,363 (Continued)
See accompanying Notes to the Basic Financial Statements.

City of Redding
Balance Sheet
Governmental Funds
June 30, 2024
38 Packet Pg. 591
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June General Community Non-Major Total
General Capital Projects Development Governmental Governmental Fund Fund Fund Funds Funds

LIABILITIES
Accounts payable 952,484 2,875,918 953,719 374,023 5,156,144 Accrued liabilities 1,891,026 58,442 51,618 59,170 2,060,256 Intergovernmental payable 178,334 - 12,423 2,382 193,139 Due to other funds - - - 151,935 151,935 Interfund payable - - 1,116,840 - 1,116,840 Unearned revenue 7,555,171 1,136,982 7,594,401 9,556,082 25,842,636 Deposits 1,375 - - 195,432 196,807 Advances from other funds 3,588,088 - 2,000,693 420,694 6,009,475 Total liabilities 14,166,478 4,071,342 11,729,694 10,759,718 40,727,232

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 2,169,744 10,967,177 6,502,889 3,120,686 22,760,496 Leases 2,079,175 - - - 2,079,175 Total deferred inflows of resources: 4,248,919 10,967,177 6,502,889 3,120,686 24,839,671 Fund balances:

Nonspendable 2,127,863 - 31,723 66,137 2,225,723 Restricted 431,956 9,097,344 69,910,047 30,622,093 110,061,440 Assigned 13,529,698 - - - 13,529,698 Unassigned 7,457,606 - - (470,007) 6,987,599 Total fund balances 23,547,123 9,097,344 69,941,770 30,218,223 132,804,460 Total liabilities, deferred inflows of
resources and fund balances 41,962,520$ 24,135,863 $ 88,174,353 $ 44,098,627 $ 198,371,363 $ (Concluded)
See accompanying Notes to the Basic Financial Statements.

Balance Sheet (Continued)
Governmental Funds
June 30, 2024
City of Redding
39 Packet Pg. 592
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June This page intentionally left blank
40 Packet Pg. 593
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June Statement of Internal
Net Position Service Funds Net
132,804,460$

Capital assets (net) have not been included as financial resources in governmental fund activity. 378,133,461$ 7,441,541 $ 370,691,920 Deferred charges have not been included as financial resources in governmental fund activity. 124,917 - 124,917 Deferred outflows related to pensions and OPEB have not been included in governmental fund activity. 96,637,032 12,886,572 83,750,460
Long-term debt that has not been included in the governmental fund activity. (29,292,559) (1,735,305) (27,557,254) Accrued interest payable for the current portion of interest due on bonds has not been reported in the governmental funds. (301,522) - (301,522) The net other post employment benefit obligation has not been reported in the governmental funds. (46,956,650) (7,250,477) (39,706,173) Net pension liability is not due and payable in the current period and therefore is not reported in the fund financial statements. (239,094,911) (26,724,880) (212,370,031) Revenue reported as unavailable revenue in the governmental funds is recorded as revenue in the statement of activities. 22,760,496 - 22,760,496 Deferred inflows related to pensions and OPEB have not been included in governmental fund activity. (3,839,163) (358,174) (3,480,989) Internal service fund net position included in the governmental activities on the statement of activities. - 1,553,869 (1,553,869) Accrued vacation and other leave not reported in governmental funds, but recorded as expense in the Statement of Activities. (15,995,621) (2,079,675) (13,915,946)

311,246,469$
See accompanying Notes to the Basic Financial Statements.

Net position of governmental activities
City of Redding
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2024
Fund balances governmental funds
Amounts reported for governmental activities in the Statement of Net Position are different because:
41 Packet Pg. 594
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June General Community Non-Major Total
General Ca pital Projects Develo pment Governmental Governmental Fund Fund Fund Funds Funds
REVENUES:

Property taxes 28,453,138 $ - $ - $ - $ 28,453,138$ Sales and use taxes 30,798,178 - - 272,517 31,070,695 Other taxes 11,466,674 - - - 11,466,674 Special assessments 13,330 - - 1,181,822 1,195,152 Licenses and permits 2,593,427 - - 250,838 2,844,265 Intergovernmental revenues 8,714,076 15,537,316 23,012,780 25,925,306 73,189,478 Charges for services 4,892,655 156,782 - 1,668,179 6,717,616 Fines, forfeitures, and penalties 848,715 500 - 95,452 944,667 Use of money and property 9,620,064 73,264 190 - 9,693,518 Net investment earnings (loss) 1,239,049 152,182 391,078 553,908 2,336,217 Other 5,199,955 5,306,057 34 189,366 10,695,412 Total revenues 103,839,261 21,226,101 23,404,082 30,137,388 178,606,832 EXPENDITURES:

Current:

General government 8,504,531 - - - 8,504,531 Community development - - 4,554,247 16,124,420 20,678,667 Public safety:

Police 47,828,147 - - - 47,828,147 Fire 30,082,107 - - - 30,082,107 Public works 13,153,058 101,163 - 1,238,160 14,492,381 Planning 6,562,666 - - - 6,562,666 Recreation and culture 7,924,687 165,848 - 2,815,761 10,906,296 Capital outlay 6,447,060 12,613,063 6,045,545 284,899 25,390,567 Debt service:

Principal 1,504,181 300,000 - 144,493 1,948,674 Interest and fiscal charges 1,106,816 444,334 160,877 35,895 1,747,922 Total expenditures 123,113,253 13,624,408 10,760,669 20,643,628 168,141,958 Excess (deficiency) of revenues
over (under) expenditures (19,273,992) 7,601,693 12,643,413 9,493,760 10,464,874 OTHER FINANCING SOURCES (USES):

Sale of assets 413,038 - - - 413,038 Long-term debt issued 352,244 - - - 352,244 Transfers in 17,529,790 - - 994,235 18,524,025 Transfers out (2,035,919) - - (10,009,190) (12,045,109) Total other financing sources (uses) 16,259,153 - - (9,014,955) 7,244,198 NET CHANGE IN FUND BALANCES (3,014,839) 7,601,693 12,643,413 478,805 17,709,072 Fund balances:

Beginning of year 26,561,962 1,495,651 57,298,357 29,739,418 115,095,388 End of year 23,547,123 $ 9,097,344 $ 69,941,770 $ 30,218,223 $ 132,804,460 $ See accompanying Notes to the Basic Financial Statements.

City of Redding
Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended June 30, 2024
42 Packet Pg. 595
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June Net change in fund balances - total governmental funds 17,709,07 2$ Governmental funds reported acquisition of capital assets as part of capital outlay expenditures. However, in the government-wide Statement of Activities and Changes in Net Position, the cost of those assets was allocated over their estimated useful lives as depreciation expense. This was the amount of capital assets recorded in the current period. 25,390,567
In the Statement of Activities, donated assets are reported as a capital contribution. 891,545 Transfer of capital assets between governmental, enterprise, and internal service funds. (1,307,101) Depreciation expense on capital assets was reported in the government-wide Statement of Activities and Changes in Net Position, but it did not require the use of current financial resources. Therefore, depreciation expense, net of internal service funds of $1,302,744 was not reported in the in governmental funds. (16,833,950) Disposal of capital assets is reported in the government-wide Statement of Activities and Changes in Net Position, but it does not require the use of current financial resources. Therefore, it is not reported as expenditures in governmental funds.
- Net book value of the assets disposed (144,552)
- Decrease in debt related to right-to-use asset disposal 71,682 Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the governmental funds. (12,620,858)
In the Statement of Activities, the other post employment benefit expense that does not require the use of financial resources is not reported as revenue or expenditure. (3,654,409) Repayment of long-term liabilities was an expenditure in governmental funds, but the repayment reduced long-term liabilities in the Government-Wide Statement of Net Position.

Principal payment of long-term debt 1,948,674
Amortization of bond premium 130,904
Amortization of bond discounts (2,184)
Proceeds from debt are a financing source in the governmental funds, but a liability in the Statement of Net Position (352,244) Interest expense on long-term debt is accrued in the government-wide Statement of Activities and Changes in Net Position. The following amount represented the change in accrued interest from the prior year and amortization of interest expense. (27,841)
Compensated absences in the Statement of Activities is reported as an expense but is not reported in the governmental funds. (1,543,205)
In the Statement of Activities, pension expense that does not require the use of current financial resources is not reported as revenue or expenditure. (6,620,397)
Net income (loss) before transfers and contributions - internal service funds 3,241,284 Less: portion allocated to business activities (1,399,168) Change in net position of governmental activities 4,877,819$ See accompanying Notes to the Basic Financial Statements.

Amounts reported for governmental activities in the Statement of Activities were different because:

City of Redding
Reconciliation of the Governmental Statement of Revenues, Expenditures, and Changes in Fund Balances of Government-Wide Statement of Activities and Changes in Net Position For the Year Ended June 30, 2024
43 Packet Pg. 596
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June This page intentionally left blank
44 Packet Pg. 597
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June Major Enterprise Funds:

Electric Utility – This fund was established to account for the operations of the City’s electric utility, a self- supporting activity which renders a service on a user-charge basis to residents and businesses.

Water Utility – This fund was established to account for the operations of the City’s water utility, a self- supporting activity which renders a service on a user-charge basis to residents and businesses.

Wastewater Utility - This fund was established to account for the operations of the City’s wastewater utility, a self-supporting activity which renders a service on a user-charge basis to residents and businesses.

Solid Waste Collection/Disposal - This fund was established to account for the operations of the City’s solid waste collection and disposal, a self-supporting activity which renders a service on a user-charge basis to residents and businesses.

Internal Service Funds:

These funds are used to account for interdepartmental operations where it is the stated intent that costs of providing services to the departments of the City on a continuing basis be financed or recovered primarily by charges to the user departments.

PROPRIETARY FUND

FINANCIAL STATEMENTS
45 Packet Pg. 598
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June Solid Waste
Electric Water Wastewater Collection/
Utility Utility Utility Disposal
ASSETS
Current assets:

Cash and investments 58,180,631 $ $54,217,561 43,514,026 $ 22,441,083 $ Accounts receivable, net 16,389,667 3,697,549 3,418,328 2,824,611 Lease receivable - 118,005 - - Intergovernmental receivable - 186,367 99,977 - Interest receivable 178,268 169,495 128,708 71,413 Interfund receivable 488,142 191,771 130,752 61,018 Prepaid items 770,974 120,644 88,414 1,006,694 Inventories 13,771,155 1,207,203 15,557 271,791 Deposit 350,900 20,550 22,000 - -
Total current assets 90,129,737 59,929,145 47,417,762 26,676,610 Noncurrent assets:

Restricted assets:

Cash and investments 14,541 2,575,698 687,951 - Interest receivable 3,286 - 1,237 - Total restricted assets 17,827 2,575,698 689,188 - Capital assets:

Land 5,240,780 508,799 2,984,167 1,697,818 Construction in progress 19,739,798 22,627,210 26,312,110 1,235,128 Depreciable capital assets, net 176,027,338 61,938,705 156,642,468 16,726,993 Capital assets 201,007,916 85,074,714 185,938,745 19,659,939 Other assets:

Advances to other funds 4,942,258 440,152 300,104 140,048 Lease receivable, net current - 250,359 - - Investment in JPA 8,114,485 - - - Storage base gas 13,570,000 - - - Total other assets 26,626,743 690,511 300,104 140,048 Total noncurrent assets 227,652,486 88,340,923 186,928,037 19,799,987 Total assets 317,782,223 148,270,068 234,345,799 46,476,597

DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on refunding 4,687,982 - 710,130 - Deferred outflows related to other post employment benefits 10,685,532 1,142,789 1,539,252 2,578,057 Deferred outflows related to pensions 29,236,041 3,525,976 4,024,072 6,520,003 Total deferred outflows of resources 44,609,555 4,668,765 6,273,454 9,098,060 (Continued)
See accompanying Notes to the Basic Financial Statements.

Enterprise Funds
City of Redding
Statement of Net Position
Proprietary Funds
June 30, 2024
46 Packet Pg. 599
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June Governmental
Activities
Non-Major Internal
Enterprise Service
Funds Total Funds
ASSETS
Current assets:

Cash and investments 5,909,590 $ 184,262,891$ 20,869,114 $ Accounts receivable, net 184,348 26,514,503 138,766 Lease receivable 660,315 778,320 - Intergovernmental receivable 3,986,379 4,272,723 277 Interest receivable 30,877 578,761 51,976 Interfund receivable - 871,683 43,000 Prepaid items 36,156 2,022,882 635,815 Inventories 139,669 15,405,375 577,323 Deposit - 393,450 - Total current assets 10,947,334 235,100,588 22,316,271 Noncurrent assets:

Restricted assets:

Cash and investments 3,272,923 6,551,113 - Interest receivable - 4,523 - Total restricted assets 3,272,923 6,555,636 - Capital assets:

Land 9,774,316 20,205,880 110,810
Construction in progress 10,758,248 80,672,494 2,443,897 Depreciable capital assets, net 49,556,974 460,892,478 4,886,833 Capital assets 70,089,538 561,770,852 7,441,540 Other assets:

Advances to other funds - 5,822,562 3,185,490 Lease receivable, net current 8,882,070 9,132,429 - Investment in JPA - 8,114,485 - Storage base gas - 13,570,000 - Total other assets 8,882,070 36,639,476 3,185,490 Total noncurrent assets 82,244,531 604,965,964 10,627,030 Total assets 93,191,865 840,066,552 32,943,301

DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on refunding - 5,398,112 - Deferred outflows related to other post employment benefits 515,208 16,460,838 3,725,445 Deferred outflows related to pensions 1,119,077 44,425,169 9,161,127 Total deferred outflows of resources 1,634,285 66,284,119 12,886,572 (Continued)
See accompanying Notes to the Basic Financial Statements.

City of Redding
Statement of Net Position (Continued)
Proprietary Funds
June 30, 2024
Enterprise Funds
47 Packet Pg. 600
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June Solid Waste
Electric Water Wastewater Collection/
Utility Utility Utility Disposal

LIABILITIES
Current liabilities (payable from current assets):

Accounts payable 4,741,970 5,439,322 2,125,616 1,262,348 Accrued liabilities 1,107,849 151,238 146,586 243,705 Accrued interest payable 331,193 - 143,055 - Claims and judgements payable - - - - Intergovernmental payable 3,332,238 13,590 119 1,155,782 Due to other funds - - - - Interfund payables - - - - Unearned revenue 80,203 20,094 - 356,269 Deposits 3,408,636 - - 6,150,555 Accrued compensated absences, due with in one year 2,344,808 279,432 312,020 587,008 Landfill closure costs, due with in one year - - - 185,700 Long-term debt, due with in one year 12,694,779 1,768 4,622,377 43,485 State loan, due with in one year - - - - Aggregate net OPEB liability 1,923,967 208,202 282,741 469,097 Total current liabilities 29,965,643 6,113,646 7,632,514 10,453,949 Long-term liabilities:

Accrued compensated absences, due in more than one year 4,974,39 1 525,023 598,958 1,447,464 Landfill closure costs, due in more than one year - - - 2,678,671 Advances from other funds - - - - Claims and judgements, due in more than one year - - - - Long-term debt, due in more than one year 82,417,528 - 39,498,536 39,013 State loan, due in more than one year - - - - Aggregate net OPEB liability 18,872,262 2,015,901 2,712,960 4,548,329 Aggregate net pension liability 79,312,231 8,827,320 11,371,029 18,635,221 Total long-term liabilities 185,576,412 11,368,244 54,181,483 27,348,698 Total liabilities 215,542,055 17,481,890 61,813,997 37,802,647

DEFERRED INFLOWS OF RESOURCES
Deferred inflows related to other post employment benefits 1 ,001,297 107,086 144,237 241,578 Deferred inflows related to pensions 36,665 5,372 4,461 6,959 Deferred inflows related to leases - 368,364 - - Total deferred inflows of resources 1,037,962 480,822 148,698 248,537

NET POSITION
Net investment in capital assets 110,171,174 83,587,175 142,321,790 19,577,441 Restricted for:

Capital projects - 2,575,699 - - Unrestricted (deficit) 35,640,587 48,813,247 36,334,768 (2,053,968) Total net position (deficit) 145,811,761$ 134,976,121 $ 178,656,558 $ 17,523,473 $ (Continued)
See accompanying Notes to the Basic Financial Statements.

Enterprise Funds
City of Redding
Statement of Net Position (Continued)
Proprietary Funds
June 30, 2024
48 Packet Pg. 601
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June Governmental
Activities
Non-Major Internal
Enterprise Service
Funds Total Funds

LIABILITIES
Current liabilities (payable from current assets):

Accounts payable 1,798,248 15,367,504 912,576 Accrued liabilities 64,557 1,713,935 338,752 Accrued interest payable 6,158 480,406 - Claims and judgements payable - - 5,036,490 Intergovernmental payable 1,259,931 5,761,660 1,770,538 Due to other funds 675,986 675,986 - Interfund payables 43,000 43,000 6,250 Unearned revenue 1,306,649 1,763,215 6,240 Deposits 86,239 9,645,430 -
Accrued compensated absences, due with in one year 64,653 3,587,921 642,382 Landfill closure costs, due with in one year - 185,700 - Long-term debt, due with in one year 33,041 17,395,450 477,563 State loan, due with in one year 32,241 32,241 - Aggregate net OPEB liability 96,075 2,980,082 672,536 Total current liabilities 5,466,778 59,632,530 9,863,327 Long-term liabilities:

Accrued compensated absences, due in more than one year 128,479 7,674,315 1,437,293 Landfill closure costs, due in more than one year - 2,678,671 - Advances from other funds 2,998,577 2,998,577 - Claims and judgements, due in more than one year - - 13,605,950 Long-term debt, due in more than one year - 121,955,077 1,257,742 State loan, due in more than one year 271,114 271,114 - Aggregate net OPEB liability 906,627 29,056,079 6,577,941 Aggregate net pension liability 3,628,486 121,774,287 26,724,880 Total long-term liabilities 7,933,283 286,408,120 49,603,806 Total liabilities 13,400,061 346,040,650 59,467,133

DEFERRED INFLOWS OF RESOURCES
Deferred inflows related to other post employment benefits 4 8,276 1,542,474 349,094 Deferred inflows related to pensions 642 54,099 9,080 Deferred inflows related to leases 9,542,385 9,910,749 - Total deferred inflows of resources 9,591,303 11,507,322 358,174

NET POSITION
Net investment in capital assets 69,693,142 425,350,722 5,706,236 Restricted for:

Capital projects - 2,575,699 - Unrestricted (deficit) 2,141,644 120,876,278 (19,701,670) Total net position (deficit) 71,834,786$ 548,802,699 $ (13,995,434) $ Net position reconciliation to statement of net position:

Net position of proprietary funds 548,802,699 $
Less business-type portion of the internal service fund (12,441,565) Net position of business-type activities 536,361,134$
See accompanying Notes to the Basic Financial Statements. (Concluded) Statement of Net Position (Continued)
Proprietary Funds
June 30, 2024
Enterprise Funds
City of Redding
49 Packet Pg. 602
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June Solid Waste
Electric Water Wastewater Collection/
Utility Utility Utility Disposal
OPERATING REVENUES:

User fees and charges 132,448,887 $ 27,420,129 $ 34,765,129 $ 28,065,727 $ Wholesale sales 30,153,666 - - - Rental charges 138,000 - - - Other operating revenue 7,052,474 18,772 6,207 1,015,165 Total operating revenues 169,793,027 27,438,901 34,771,336 29,080,892 OPERATING EXPENSES:

Cost of power, water, and transportation 53,212,490 796,226 - - Maintenance, operations, and administration 87,755,528 18,095,146 20,348,914 30,600,162 Depreciation and amortization 14,665,782 4,105,646 7,300,649 3,059,937 Total operating expenses 155,633,800 22,997,018 27,649,563 33,660,099 OPERATING INCOME (LOSS) 14,159,227 4,441,883 7,121,773 (4,579,207) NONOPERATING REVENUES (EXPENSES):

Net investment earnings (loss) 3,603,164 2,580,761 1,862,698 1,117,573 Interest expense (4,174,995) (1,593) (1,214,635) (4,769) Intergovernmental revenues 271,066 25,321 3,691 113,375 Gain (loss) on disposal of assets (313,233) (185,044) 5,650 (146,968) Other non-operating revenues (expenses) 335,524 1,845,089 1,385,337 2,462 Total nonoperating revenues (expenses) (278,474) 4,264,534 2,042,741 1,081,673

INCOME (LOSS) BEFORE TRANSFERS
AND CAPITAL CONTRIBUTIONS 13,880,753 8,706,417 9,164,514 (3,497,534) Capital contributions 3,543,271 514,983 383,939 389,785 Transfers in 204,059 182,236 - - Transfers out (7,428,733) (143,901) (521,661) - Change in net position 10,199,350 9,259,735 9,026,792 (3,107,749) NET POSITION:

Beginning of year 135,612,411 125,716,386 169,629,766 20,631,222 End of year 145,811,761 $ 134,976,121 $ 178,656,558 $ 17,523,473 $ (Continued)
See accompanying Notes to the Basic Financial Statements.

Enterprise Funds
City of Redding
Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds
For the Year Ended June 30, 2024
50 Packet Pg. 603
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June Governmental
Activities
Non-Major Internal
Enterprise Service
Funds Total Funds
OPERATING REVENUES:

User fees and charges 4,012,969 $ 226,712,841 $ 100,044,827 $ Wholesale sales - 30,153,666 - Rental charges 1,971,795 2,109,795 - Other operating revenue 1,085,499 9,178,117 40,533 Total operating revenues 7,070,263 268,154,419 100,085,360 OPERATING EXPENSES:

Cost of power, water, and transportation 4,827,677 58,836,393 - Maintenance, operations, and administration 9,835,219 166,634,969 96,582,119 Depreciation and amortization 4,464,300 33,596,314 1,302,744 Total operating expenses 19,127,196 259,067,676 97,884,863 OPERATING INCOME (LOSS) (12,056,933) 9,086,743 2,200,497 NONOPERATING REVENUES (EXPENSES):

Net investment earnings (loss) 348,108 9,512,304 645,020 Interest expense (18,834) (5,414,826) (56,972) Intergovernmental revenues 7,094,471 7,507,924 450,511 Gain (loss) on disposal of assets 249,792 (389,803) 2,228 Other non-operating revenues (expenses) 458,099 4,026,511 - Total nonoperating revenues (expenses) 8,131,636 15,242,110 1,040,787

INCOME (LOSS) BEFORE TRANSFERS
AND CAPITAL CONTRIBUTIONS (3,925,297) 24,328,853 3,241,284 Capital contributions 2,447,038 7,279,016 - Transfers in 1,507,987 1,894,282 33,133 Transfers out (307,236) (8,401,531) (4,800) Change in net position (277,508) 25,100,620 3,269,617 NET POSITION:

Beginning of year 72,112,294 523,702,079 (17,265,051) End of year 71,834,786 $ 548,802,699 $ (13,995,434) $ Change in net position reconciliation to statement of activities:

Change in net position of proprietary funds 25,100,620 $ Add internal service funds income - business-type activity 1,39 9,168 Change in net position of business-type activities 26,499,788$ (Concluded)
See accompanying Notes to the Basic Financial Statements.

City of Redding
Statement of Revenues, Expenses, and Changes in Net Position (Continued) Proprietary Funds
For the Year Ended June 30, 2024
Enterprise Funds
51 Packet Pg. 604
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June Electric Water Wastewater
Utility Utility Utility
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from customers 160,768,697 $ 26,458,196 $ 34,388,662 $ Cash paid to suppliers (128,816,863) (9,989,315) (12,847,099) Cash paid to employees (15,666,132) (5,740,389) (6,651,548) Other income received 7,052,474 18,772 6,207 Net cash provided by (used in) operating activities 23,338,176 10,747,264 14,896,222

CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:

Intergovernmental revenue received 271,066 14,787 3,691 Advances from other funds - - - Repayment of advances from other funds (702,207) - - Advances to other funds - - (300,104) Repayment of advances to other funds 1,273,872 60,296 341,216 Transfers in 204,059 125,000 913,871 Transfers out (7,362,468) (27,579) (521,661) Net cash provided by (used in) noncapital financing activities (6,315,678) 172,504 437,013

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Capital grant received - - (99,976) Proceeds from sale of assets 38,023 17,820 (173,514) Purchase of capital assets (15,002,102) (14,674,624) (10,619,270) Rents received - - - Interest paid (4,769,353) (1,594) (1,926,889) Principal paid on long-term debt (10,678,991) (24,582) (3,715,637) Cash collected for future capital outlay 335,524 1,845,089 1,385,337 Net cash provided by (used in) capital
and related financing activities (30,076,899) (12,837,891) (15,149,949) CASH FLOWS FROM INVESTING ACTIVITIES:

Net investment earnings (loss) 3,725,917 2,723,390 1,965,433 Net cash (used in) investing activities 3,725,917 2,723,390 1,965,433 Net increase (decrease) in cash and cash equivalents (9,328,484) 805,267 2,148,719 CASH AND CASH EQUIVALENTS:

Beginning of year 67,523,656 55,987,992 42,053,258 End of year 58,195,172 $ 56,793,259 $ 44,201,977 $ Reconciliation to statement of net position:

Cash and cash equivalents 58,180,631$ 54,217,561 $ 43,514,026 $ Restricted cash and cash equivalents 14,541 2,575,698 687,951 58,195,172$ 56,793,259 $ 44,201,977 $
See accompanying Notes to the Basic Financial Statements. (Continued) Enterprise Funds
City of Redding
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2024
52 Packet Pg. 605
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June Governmental
Activities
Solid Waste Non-Major Internal
Collection/ Enterprise Service
Disposal Funds Total Funds
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from customers 32,181,361 $ 6,987,850 $ 260,784,766 $ 99,876,223 $ Cash paid to suppliers (21,244,369) (10,945,196) (183,842,842) (79,016,434) Cash paid to employees (12,304,772) (2,142,728) (42,505,569) (16,123,271) Other income received 1,015,747 48,671 8,141,871 - Net cash provided by (used in) operating activities (352,033) (6,051,403) 42,578,226 4,736,518

CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:

Intergovernmental revenue received 330,789 6,693,744 7,314,077 450,511 Advances from other funds - 675,986 675,986 - Repayment of advances from other funds - (5,812,745) (6,514,952) - Advances to other funds (47,823) - (347,927) (25,000) Repayment of advances to other funds 67,009 - 1,742,393 79,530 Transfers in - 1,507,987 2,750,917 - Transfers out - (307,236) (8,218,944) (4,800) Net cash provided by (used in) noncapital financing activities 349,975 2,757,736 (2,598,450) 500,241

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Capital grant received - 4,207,810 4,107,834 - Proceeds from sale of assets 12,905 387,683 282,917 2,228 Purchase of capital assets (4,286,869) (3,283,108) (47,865,973) (2,587,086) Rents received - 54,859 54,859 - Interest paid (4,769) (15,467) (6,718,072) (56,973) Principal paid on long-term debt (43,934) (151,048) (14,614,192) (619,203) Cash collected for future capital outlay - 354,569 3,920,519 40,533 Net cash provided by (used in) capital
and related financing activities (4,322,667) 1,555,298 (60,832,108) (3,220,501) CASH FLOWS FROM INVESTING ACTIVITIES:

Net investment earnings (loss) 1,193,039 366,938 9,974,717 691,630 Net cash provided (used) by investing activities 1,193,039 366,938 9,974,717 691,630 Net increase (decrease) in cash and cash equivalents (3,131,686) (1,371,431) (10,877,615) 2,707,888 CASH AND CASH EQUIVALENTS:

Beginning of year 25,572,769 10,553,944 201,691,619 18,161,226 End of year 22,441,083 $ 9,182,513 $ 190,814,004 $ 20,869,114 $ Reconciliation to statement of net position:

Cash and cash equivalents 22,441,083$ 5,909,590 $ 184,262,891 $ 20,869,114 $ Restricted cash and cash equivalents - 3,272,923 6,551,113 - 22,441,083$ 9,182,513 $ 190,814,004 $ 20,869,114 $ See accompanying Notes to the Basic Financial Statements. (Continued) City of Redding
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2024
Enterprise Funds
53 Packet Pg. 606
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June Electric Water Wastewater
Utility Utility Utility

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

Operating income (loss) to net cash provided by (used in) 14,159 ,227$ 4,441,883 $ 7,121,773 $ Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities:

Other non-operating revenue and expense - - - Depreciation and amortization 14,665,782 4,105,646 7,300,649 (Increase) decrease in accounts receivable (1,971,856) (961,933) (376,467) (Increase) decrease in inventories (2,924,886) (131,603) (448) (Increase) decrease in prepaid items 357,792 (115,756) (82,296) (Increase) decrease in investment in JPA (529,847) (250) - Increase (decrease) in accounts payable 389,648 3,370,011 577,860 Increase (decrease) in accrued liabilities 212,485 25,467 6,870 Increase (decrease) in claims and judgements payable - - - Increase (decrease) in deposits liability 714,807 (12,714) - Increase (decrease) in intergovernmental payable (119,584) (561) (262) Increase (decrease) in unearned revenue (46,528) - - Increase (decrease) in accrued compensated absences 715,375 62,766 70,000 Increase (decrease) in accrued landfill closure costs - - - Increase (decrease) in accrued liabilities long-term (447,705) - - Other post employment benefits related items 1,955,260 180,801 216,716 Pension related items (3,791,794) (216,493) 61,827 Total adjustments 9,178,949 6,305,381 7,774,449 Net cash provided by (used in) operating activities 23,338,176$ 10,747,264 $ 14,896,222 $

SCHEDULE OF NONCASH CAPITAL AND
RELATED FINANCING ACTIVITIES:

Plant contributed from developers 3,543,271 $ 514,983 $ 383,939 $ Right-to-use subscription debt issued 152,675 - - Right-to-use subscription assets capitalized from debt issued (1 52,675) - - Transfer in of capital assets (7,158,409) 59,086 392,210 Total non-cash capital and related financing activities (3,615,138)$ 574,069 $ 776,149 $ (Continued)
See accompanying Notes to the Basic Financial Statements.

Enterprise Funds
City of Redding
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2024
54 Packet Pg. 607
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June Governmental
Activities
Solid Waste Non-Major Internal
Collection/ Enterprise Service
Disposal Funds Total Funds

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

Operating income (loss) to net cash provided by (used in) (4,579 ,207)$ (12,056,933) $ 9,086,743 $ 2,159,964 $ Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities:

Other non-operating revenue and expense 582 48,671 49,253 - Depreciation and amortization 3,059,937 4,464,300 33,596,314 1,302,744 (Increase) decrease in accounts receivable (281,381) (82,413) (3,674,050) 14,896 (Increase) decrease in inventories 56,029 24,588 (2,976,320) (100,355) (Increase) decrease in prepaid items (178,377) (33,741) (52,378) (409,524) (Increase) decrease in investment in JPA - - (530,097) - Increase (decrease) in accounts payable 503,515 158,816 4,999,850 (161,992) Increase (decrease) in accrued liabilities 22,511 8,128 275,461 (234) Increase (decrease) in claims and judgements payable - - - 125,200 Increase (decrease) in deposits liability (550,816) (900) 150,377 - Increase (decrease) in intergovernmental payable 1,111,336 1,135,354 2,126,283 629,744 Increase (decrease) in unearned revenue - (4,141) (50,669) (183,500) Increase (decrease) in accrued compensated absences 52,366 (404) 900,103 65,451 Increase (decrease) in accrued landfill closure costs 99,534 - 99,534 - Increase (decrease) in accrued liabilities long-term - - (447,705) - Other post employment benefits related items 414,742 55,846 2,823,365 523,099 Pension related items (82,804) 231,426 (3,797,838) 771,025 Total adjustments 4,227,174
6,005,530 33,491,483 2,576,554
Net cash provided by (used in) operating activities (352,033)$ (6,051,403) $ 42,578,226 $ 4,736,518 $

SCHEDULE OF NONCASH CAPITAL AND
RELATED FINANCING ACTIVITIES:

Plant contributed from developers 389,785 $ 957,854 $ 5,789,832 $ - $ Right-to-use subscription debt issued - - 152,675 2,127,301 Right-to-use subscription assets capitalized from debt issued - - (152,675) (2,127,301) Equipment transfers - 469,503 (6,237,610) (4,800) Total non-cash capital and related financing activities 389,785$ 1,427,357 $ (447,778) $ (4,800) $ (Concluded)
See accompanying Notes to the Basic Financial Statements.

Enterprise Funds
City of Redding
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2024
55 Packet Pg. 608
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56 Packet Pg. 609
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June Custodial Funds
Custodial funds use the economic measurement focus. They are used to account for assets held in an agency capacity for others and therefore cannot be used to support the City's programs. This includes the Special Deposits Fund, Integrated Public Safety System (IPSS) Fund, and Enterprise Anderson Groundwater Fund.

These funds use the economic resources measurement focus.

The Successor Agency to the Redding Redevelopment Agency Private-purpose Trust Fund ("Successor Agency")
This fund is used to account for monies received from the Shasta County Auditor-Controller for the repayment of the enforceable obligations of the former Redding Redevelopment Agency. These funds are restricted for the sole purpose of payment of items on an approved Recognized Payment Obligation Schedule (ROPS).

FIDUCIARY FUND

FINANCIAL STATEMENTS
57 Packet Pg. 610
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June Successor Agency
Custodial Private-Purpose
Funds Trust Fund
ASSETS
Cash and investments 2,617,633$ 5,684,147$
Restricted cash and investments - 6,394 Interest receivable 16,824 55,011
Accounts receivable, net 104,811 -
Intergovernmental receivable 66,391 - Prepaid costs - 45,620
Capital assets:

Construction in progress 2,380,119 -
Depreciable capital assets, net 51,384 - Net capital assets 2,431,503 -
Total assets 5,237,162 5,791,172

DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows - OPEB - 21,542 Total deferred outflows of resources - 21,542

LIABILITIES
Accounts payable 350,561 -
Accrued liabilities 21,849 -
Accrued interest payable - 125,061 Intergovernmental payable 76,879 223,569 Unearned revenue - 719,231
Deposits payable 1,543,619 -
Long-term debt - 8,280,908
Total liabilities 1,992,908 9,348,769

NET POSITION (DEFICIT)
Restricted for:

Individuals, organizations, and other governments 3,244,254 - Held in trust - (3,536,055)
Total net position 3,244,254$ (3,536,055) $
See accompanying Notes to the Basic Financial Statements.

City of Redding
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2024
58 Packet Pg. 611
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June Successor Agency
Custodial Private-Purpose
Funds Trust Fund
ADDITIONS:

Intergovernmental revenues 920,083 $ 757,891 $ User fees 567,187 -
Net investment earnings (loss) 6,633 63,390 Total additions 1,493,903 821,281
DEDUCTIONS:

Administrative costs 1,153,906 250,000 Payment on recognized obligation payment schedule - 627,195 Software maintenance and support 127,251 - Project payments 218,604 -
Loss on property disposal - 175,877 Depreciation 27,486 -
Total deductions 1,527,247 1,053,072
Net change in net position (33,344) (231,791) NET POSITION:

Beginning of period 3,277,598 (3,304,264) End of period 3,244,254$ (3,536,055) $
See accompanying Notes to the Basic Financial Statements.

City of Redding
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2024
59 Packet Pg. 612
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60 Packet Pg. 613
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June

61 NOTES TO THE BASIC

FINANCIAL STATEMENTS
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62 This page intentionally left blank

Packet Pg. 615
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Index to Notes to the Basic Financial Statements
For the Year Ended June 30, 2024
63 Note 1 – Summary of Significant Accounting Policies ...................................................................................... 65 A. Reporting Entity .................................................................................................................................. 65 B. Measurement Focus, Basis of Accounting, and Financial Statement Presentation ............................. 66 C. Cash and Investments .......................................................................................................................... 70 D. General Receivables and Property Taxes Receivable ......................................................................... 71 E. Inventories ........................................................................................................................................... 71 F. Capital Assets ...................................................................................................................................... 71 G. Leases .................................................................................................................................................. 72 H. Subscription Based Information Technology Arrangements (SBITA) .............................................. 74 I. Pensions ............................................................................................................................................... 74 J. Other Postemployment Healthcare Benefits (OPEB) .......................................................................... 75 K. Vacation and Sick Pay ......................................................................................................................... 75 L. Unearned Revenue ............................................................................................................................... 76 M. Long-Term Obligations ....................................................................................................................... 76 N. Net Position ......................................................................................................................................... 76 O. Fund Balances ..................................................................................................................................... 76 P. Spending Policy ................................................................................................................................... 77 Q. Use of Estimates .................................................................................................................................. 77 R. New Governmental Accounting Standards Implemented for the Year Ended June 30, 2024 ............. 77 S. Upcoming Governmental Accounting Standards Implementation ...................................................... 78 Note 2 – Cash and Investments
............................................................................................................................ 79 A. Demand Deposits ................................................................................................................................. 80 B. Investments .......................................................................................................................................... 80 C. Investments in Local Agency Investment Fund .................................................................................. 80 D. Investments in California Asset Management Program (CAMP) ....................................................... 81 E. Risk Disclosures .................................................................................................................................. 81 Note 3 – Governmental Notes Receivable ........................................................................................................... 83 Note 4 – Lease Receivable.............................................................................................................................. ....... 84 Note 5 – Interfund Activities ................................................................................................................................ 86 A. Due From and Due To Other Funds .................................................................................................... 86 B. Interfund Receivable and Payable ....................................................................................................... 86 C. Advances To and From Other Funds ................................................................................................... 87 D. Internal Balance Summary .................................................................................................................. 88 E. Transfer In and Out ............................................................................................................................. 89 Note 6 – Capital Assets ............................................................................................................................. ............ 90 A. Governmental Activities ...................................................................................................................... 90 B. Business-Type Activities ..................................................................................................................... 91 Note 7 – Storage Base Gas .................................................................................................................................... 92 Note 8 – Unavailable Revenue .............................................................................................................................. 92 Packet Pg. 616
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Index to Notes to the Basic Financial Statements
For the Year Ended June 30, 2024
64 Note 9 – Lon
g Term Debt ..................................................................................................................................... 93 Note 10 – Pledged Revenue ................................................................................................................................... 98 Note 11 – Compensated Absences……………………………………………………………………………….100 Note 12 – Self Insurance…………………………………………………………………………………………100 Note 13 – Individual Fund Disclosures ............................................................................................................... .101 Note 14 – Joint Ventures ..................................................................................................................................... .102 A. M-S-R Public Power Agency ............................................................................................................. 102 B. M-S-R Energy Authority .................................................................................................................... 104 C. Transmission Agency of Northern California .................................................................................... 105 D. Balancing Authority of Northern California ...................................................................................... 106 E. Modesto Irrigation District Financing Authority ................................................................................ 106 F. Contingent Liability ............................................................................................................................ 107 Note 15 – Postclosure Care Costs ....................................................................................................................... 108 Note 16 – Public Transportation Modernization Improvement and Service Enhancement Account (PTMISEA) Grant Information ......................................................................................................... 108 Note 17 – Retirement Plans ................................................................................................................................. 109 A. Summary ............................................................................................................................................ 109 B. CalPERS ............................................................................................................................................. 115 C. PARS .................................................................................................................................................. 123 Note 18 – Other Postemployment Healthcare Benefits ..................................................................................... 129 Note 19 – Fund Balances ..................................................................................................................................... 138 Note 20 – Net Investment in Capital Assets ....................................................................................................... 139 Note 21 – Co
mmitments and Contingencies ...................................................................................................... 140 A. Construction Commitments ................................................................................................................ 140 B. Redding Electric Utility (REU) .......................................................................................................... 140 C. West Central Landfill ........................................................................................................................ 141 D. Grants ................................................................................................................................................. 141 E. Litigation ............................................................................................................................................ 141 Note 22 – Successor Agency Trust for Assets of the Former Redevelopment Agency ................................... 142 Packet Pg. 617
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

65 Note 1 – Summary of Significant Accounting Policies

The following is a summary of the more significant accounting p olicies of the City of Redding (City), all of which conform to United States generally accepted accounting principl es (U.S. GAAP) as applicable to governmental units.

The Governmental Accounting Stan dards Board (GASB) is the accep ted standard setting body for establishing governmental accounting and financial reporting principles.

A. Reporting Entity

The City was incorporated on October 4, 1887, as a general law city formed under state legislative statutes and governed by a body of laws in the State Constitution. The financial reporting entity (the government) includes all the funds of the primary government (i.e., the City as legally defined), as well as all of its component units.

Component units are legally separate entities for which the pri mary government is financially accountable. The government provides a full range of services including police a nd fire protection; sanitation, electric, water, and wastewater services; the construction and maintenance of street s and infrastructure; recreational activities and cultural events.

As required by U.S. GAAP, the accompanying basic financial stat ements present the City and its component units. Component units are entities for which the City is cons idered to be financially accountable. GASB defines component units as legally separate entities that meet any one of the following tests:

 The component unit’s governing body is substantively the same as the governing body of the City and:
o there is a financial benefit or burden relationship between the City and the component unit or o Management of the City has operational responsibility for the component unit.  The component unit provides services entirely, or almost entire ly, to the City or otherwise exclusively, or almost exclusively, benefits the City even though it does not provide services to it.  The component unit’s total debt outstanding, including leases a nd subscription based information technology agreements (SBITAs), is expected to be repaid entirely or almost entirely with resources of the City.

Management determined that the following component units should be blended based on the criteria above:
 Redding Housing Authority
 Redding Joint Power Financing Authority
 Redding Capital Services Corporation
 Redding Area Bus Authority

These component units are included in the primary government be cause of the significance of their financial or operational relationship and the same City governing body.

Each of the blended component units in the accompanying basic f inancial statements of the City are described below:

Redding Housing Authority (Authority) manages certain programs which are funded by the U.S. Department of Housing and Urban Development, primarily to provide services under the Housing Assistance Payments Program.

The five City Council members and one person appointed by the C ity Council, in a separate session, serve as the governing board of the Authority. The financial activity of the Authority has been included in the City’s financial statements as a special revenue fund.

Packet Pg. 618
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

66 Note 1 – Summary of Significant Accounting Policies (Continued)

A. Reporting Entity (Continued)

Redding Joint Powers Financing Authority (JPA) was created by a joint exercise of power agreement between the City and the JPA with the purpose of financing public capit al improvements. City Council members, in a separate session, serve as the governing board of the JPA. The financing activity of the JPA has been included in the City’s financial statements.

Redding Capital Services Corporation (Corporation) , a nonprofit public benefit corporation, was organized under the Nonprofit Public Benefit Corporation Law of the State of California to provide financial assistance to the City by constructing, financing, purchasing, selling and le asing various public facilitie s, land and equipment for the use, benefit and enjoyment of the public serviced by the City. City council members, in a separate session, serve as the board of directors of the Corporation. The financ ing activity of the Corporation has been included in the City’s financial statements in the enterprise funds.

Redding Area Bus Authority (RABA) is a separate governmental entity formed under a joint powers agreement between the County of Shasta, City of Shasta Lake, the City of Anderson and the City. RABA’s governing board comprises members of both the Counties, and the cities of Redding, Anderson, and Shasta Lake’s governing boards based on population ratios within the service area. Currently, the Redding City Council comprises a majority of the board members filling five o f the eight positions. In addi tion, City of Redding personnel provides administrative responsibility for RABA. The function of RABA is to provide the most cost effective public transportation system utilizing federal and state funding parti cipation. The financial activity of RABA has been included in the City’s financial statements as an enterprise fund.

Financial statements for each of the individual component units may be obtained from the Finance Department of the City at 777 Cypress Avenue, Redding, California 96001.

B. Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The accounts of the City are organized on the basis of funds, e ach of which is considered a separate accounting entity. The operations of each fund are accounted for by provi ding a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number of funds is maintained in accordance with legal and managerial requirements.

The Statement of Net Position reports separate sections for Deferred Outflows of Resources, and Deferred Inflows of Resources, when applicable.

Deferred Outflows of Resources represent a consumption of net assets that applies to future periods and that, therefore, will not be recognized as an expense until that time.

Deferred Inflows of Resources represent an acquisition of net assets that applies to future periods and that, therefore, are not recognized as revenue until that time.

Packet Pg. 619
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

67 Note 1 – Summary of Significant Accounting Policies (Continued)

B. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)

Government-Wide Financial Statements

The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the non-fiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from th ese statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.

Government-Wide Financial Statements (Continued)

The statement of activities demonstrates the degree to which th e direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or a pplicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given functio n or segment and 2) grants and contributions that are restricted to meeting the operational or capital requiremen ts of a particular function or segment. Taxes and other items not included among program revenues are reported instead as general revenues.

The government-wide financial stat ements are reported using the “economic resources” measurement focus and the accrual basis of accounting, as are the proprietary fund fi nancial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows.

Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Amounts reported as program revenues include 1) charges to cust omers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as ge neral revenues rather than as program revenues.

Likewise, general revenues include all taxes.

As a general rule th e effect of interfund activity has been eli minated from the government-wide financial statements. Exceptions to this g eneral rule are charges betwee n the government’s business type activities and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.

Governmental Fund Financial Statements

Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances for all major governmental funds and n on-major funds aggregated. An accompanying schedule is presented to reconcile and explain the differences in Net Position as presented in these statements to the Net Position presented in the Government-Wide Financial Statements. The City has presented all major funds that met the applicable criteria.

Packet Pg. 620
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

68 Note 1 – Summary of Significant Accounting Policies (Continued)

B. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)

Governmental Fund Financial Statements (Continued)

Governmental fund financial statements are reported using the “current financial resources” measurement focus and the modified accrual basis of accounting. Revenues are rec ognized as soon as they are both measurable and available. Revenues are considered to be available when they a re collectible within the current period or soon enough thereafter to pay liabilities of the current period. Th e City considers all revenues as available if they are collected within sixty (60) days of the end of the current fiscal period, except for sales tax which has a ninety (90) day availability period. Expenditures generally are recorded w hen a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as exp enditures related to compensated absences and claims and judgments, are recorded only when payment is due.

The reconciliations of the Fund Financial Statements to the Gov ernment-Wide Financial Statements are provided to explain the differences.

Property taxes, sales taxes, transient occupancy tax, grants, licenses, fees, charges and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government.

The City reports the following major governmental funds:

The General Fund is the government’s primary operating fund. It accounts for a ll financial resources of the general government, except those required to be accounted for in another fund.

The General Capital Projects Fund accounts for the financing and construction activities of the general government.

The Community Development Fund accounts for the financing and rehabilitation of homes and pub lic facilities, homeless services and the financing of multifamily housing.

Proprietary Fund Financial Statements

Proprietary Fund Financial Statements include a Statement of Ne t Position, a Statement of Revenues, Expenses and Changes in Net Position, and a Statement of Cash Flows for each major Proprietary Fund.

A separate column representing internal service funds is also p resented in these statements. However, internal service balances and activities have been combined with the gov ernmental activities in the Government-Wide Financial Statements. The City’s internal service funds account for the financing of goods or services provided by one department to other departments of the City on a cost-reimbursement basis. Internal service funds used by the City are:

Equipment Fund - this fund is used to account for vehicle maintenance and communication costs.

Information Systems - this fund is used to provide computer technology services as well as providing programming and general information systems support services.

Packet Pg. 621
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

69 Note 1 – Summary of Significant Accounting Policies (Continued)

B. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)

Proprietary Fund Financial Statements (Continued)

General Support Services - this fund is used to provide printing, reprographics, geograp hic services, records retention, building and maintenance services, volunteer services and employee services.

Risk Management – this fund is used to account for the accumulation of monies necessary to pay for worker’s compensation claims, health, dental and visions claims and liability claims under a self-insurance program.

Municipal Utilities Support – this fund is used to account for the management and technician support given to the Utilities and Street Maintenance funds.

Proprietary funds are accounted for using the "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included on the Statement of Net Position. The Statement of Revenues, Expenses and Changes in Net Position presents increases (revenues) and decreases (expenses) in total Net Position. Under the accrual b asis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized i n the period in which the liability is incurred. In these funds, receivables have been recorded as revenue and provisions have been made for uncollectible amounts.

Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s enterprise funds and of the government’s internal service funds are charges to c ustomers for sales and services. Tap and similar fees have been reported as non-operating revenues in the City’s statement of revenues, expenses and changes in net position for proprietary funds and as capital grants and contributions in the statement of activities and changes in net position. Operating expenses for enterprise funds and in ternal service 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 non-operating revenues and expenses.

The City reports the following major proprietary funds:

The Electric Utility Fund accounts for the operations of the City’s electric utility, a self-supporting activity which renders a service on a user-charge basis to residents and businesses.

The Water Utility Fund accounts for the operations of the City’s water utility, a self-supporting activity which renders a service on a user-charge basis to residents and businesses.

The Wastewater Utility Fund accounts for the operations of the City’s wastewater utility, a self-supporting activity which renders a service on a user-charge basis to residents and businesses.

The Solid Waste Collection / Disposal Fund accounts for the operations of the City’s solid waste utility, a self-supporting activity which renders a service on a user-charge basis to residents and businesses.

Packet Pg. 622
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

70 Note 1 – Summary of Significant Accounting Policies (Continued)

B. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)

Fiduciary Fund Financial Statements

Fiduciary fund financial statements include a statement of fidu ciary net position and a statement of changes in fiduciary net position. The City’s fiduciary funds represent c ustodial funds and a Private-purpose Trust Fund.

Custodial funds report fiduciary activities that are not held i n a trust or equivalent arrangement. These funds use the economic resources measurement focus.

Fiduciary fund types are accounted for according to the nature of the fund.

The City’s Custodial funds are used to account for assets held by a governmental unit as an agent for individuals, governmental entities (other than the City) and no n-public organizations. This fund is used to account for deposits and collects monies for various community events which are remitted to the organizers.

The City’s private purpose trust fund is a fiduciary fund type used to report all trust arrangements, other than those properly reported in pension trust funds or investment tr ust funds, under which principal and interest benefit individuals, private organizations, or other government s. This trust fund is used to account for the fiduciary assets, liabilities and net position of the Successor Agency (Agency) to the Redding Redevelopment Agency, the former redevelopment agency of the City.

C. Cash and Investments

The City pools idle cash from all funds for the purpose of incr easing income through investment activities. Cash deposits are stated at cost, which approximates fair value. Investments are stated at fair value. Investment income is recorded as revenue in the individual funds based on the com puted average interest rate of all investments and the average daily cash balance of each fund. For purposes of t he statement of cash flows of the proprietary fund types, cash and cash equivalents include all investments, as th e City operates an internal cash management pool which maintains the general characteristics of a demand deposit account.

All cash and investments of proprietary funds are held in the C ity’s investment pool. Therefore, all cash and investments in the proprietary funds are considered cash and cash equivalents for purposes of the statement of cash flows as these cash pools have the general characteristics of a demand deposit account.

Certain disclosure requirements, if applicable, for Deposits and Investment Risks in the following areas:

 Interest Rate Risk
 Credit Risk
- Overall
- Custodial Credit Risk
- Concentration of Credit Risk
 Foreign Currency Risk

In addition, other disclosures are specified including use of c ertain methods to present deposits and investments, highly sensitive investments, credit quality at year-end and other disclosures.

Packet Pg. 623
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

71 Note 1 – Summary of Significant Accounting Policies (Continued)

C. Cash and Investments (Continued)

U.S. GAAP defines fair value, establishes a framework for measuring fair value and establishes disclosures about fair value measurement. Investments, unless otherwise specified, recorded at fair value in the Statements of Net Position or Balance Sheet, are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Levels of inputs are as follows:

Level 1 – Inputs are unadjusted, quoted prices for identical as sets or liabilities in active markets at the measurement date.

Level 2 – Inputs, other than quoted prices included in Level 1, which are observable for the assets or liabilities through corroboration with market data at the measurement date.

Level 3 – Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the assets or liabilities at the measurement date.

D. General Receivables and Property Taxes Receivable

The City records an allowance for doubtful accounts on general accounts receivable based on the experience method.

The County of Shasta assesses, bills, and collects property tax es for the City. Property taxes attach as an enforceable lien on property as of January 1. Taxes are levied on July 1. They become due November 1 and February 1 and become delinquent December 10 and April 10. Cit y property tax revenue is recognized when levied to the extent that it is available (collected within 60 days of year-end).

E. Inventories and Prepaid Items

Inventories are physically counted at year-end and valued at th eir average cost. All inventories consist of expendable supplies held for cons umption. The cost is recorded as inventory when items are purchased and as expenditures when the items are used (the consumption method of accounting for inventories). The weighted average method is used for establishing the cost of inventory consumed.

Payments made to vendors that will benefit future accounting periods are recorded as prepaid items. Prepaid items, as reported in the governmental funds balance sheet, are offset by a nonspendable fund balance account to indicate such amounts are not in spendable form. The cost of prepaid it ems is recorded as expenditure/expenses when consumed rather than when purchased.

F. Capital Assets

Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defin ed by the government as assets with an initial cost of more than $5,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated acquisition value at the date of donation. “Right-to-use” assets are defined by the government as assets with an initial present value of more than $15,000 and an estimated life in excess of one year. Such assets are recorded at present value.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend the asset’s life are not capitalized.

Packet Pg. 624
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

72 Note 1 – Summary of Significant Accounting Policies (Continued)

F. Capital Assets (Continued)

Major outlays for capital assets and improvements are capitalized as projects are constructed.

Depreciation has been provided over the estimated useful lives using the straight-line method. The estimated useful lives are as follows:

Asset Types Useful Life (in years)
Public dom ain infrastructure 30-50
Utility plants 15-50
Buildings 10-30
Im provem ents other than buildings 5-40
Equipm ent, furnishings and vehicles 5-10
Assets under capital lease 4-30
System infrastructure 30
Right-to-use assets Term of Contract

For all infrastructure systems, the City elected to use the Bas ic Approach. The City defines infrastructure as the basic physical assets that allow the City to function. The ass ets include the streets, water purification and distribution system, sewer collection and treatment system, parks and recreation, lands and improvement system, storm water conveyance system, and buildings combined with the site amenities such as parking and landscaped areas used by the City in the conduct of its business. Each ma jor infrastructure system can be divided into subsystems. For example, the st reet system can be subdivided i nto pavement, curb and gutters, sidewalks, medians, streetlights, traffic control devices (signs, signals and pavement markings), landscaping and land.

These subsystems were not delineated in the basic financial sta tements. The appropriate operating department maintains information regarding the subsystems.

G. Leases

Lessee

The City has a policy to recognize a lease liability and a righ t‐to‐use lease asset (lease asset) in our financial statements with an initial, individual value of $15,000 or more with a lease term greater than one year. Variable payments based on future performance or usage of the underlying assets are not included in the measurement of the lease liability.

At the commencement of a lease, the lease liability is measured at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made.

Lease assets are recorded at the amount of the initial measurement of the lease liabilities and modified by any lease payments made to the lessor at or before the commencement of th e lease term, less any lease incentives received from the lessor at or before the commencement of the lease term along with any initial direct costs that are ancillary charges necessary to place the lease assets into service. Lease assets are amortized using the straight–line method over the shorter of the lease term or the useful life of the un derlying asset, unless the lease contains a purchase option that the State has determined is reasonably certain of b eing exercised. In this case, the lease asset is amortized over the useful life of the underlying asset.

Packet Pg. 625
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

73 Note 1 – Summary of Significant Accounting Policies (Continued)

G. Leases (continued)

Key estimates and judgments related to leases include how the C ity determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments.

1. The City uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for leases.

2. The lease term includes the non-cancelable period of the lease, plus any option periods that are reasonably certain to be exercised.

3. Lease payments included in the measurement of the lease liabili ty are composed of fixed payments and purchase option price that the City is reasonably certain to ex ercise. The City monitors changes in circumstances that would require a remeasurement of a lease and will remeasure any lease asset and liability if certain changes occur that are expected to significantly affect the amount of the lease liability.

Lease assets are reported as right-to-use along with other capi tal assets and lease liabilities are reported on the statement of net position as long-term debt.

Lessor

The City is a lessor for leases of buildings and land and recog nizes leases receivable and deferred inflows of resources in the financial statements. Variable payments based on future performance or usage of the underlying asset are not included in the measurement of the lease receivable.

At the commencement of a lease, the lease receivable is measured at the present value of payments expected to be received during the lease term. Subsequently, the lease receiva ble is reduced by the principal portion of lease payments received. The deferred inflows of resources are initia lly measured as the initial amount of the lease receivable, adjusted for lease payments received at or before t he lease commencement date. Subsequently, the deferred inflows of resources are recognized as revenue over the life of the lease term in a systematic and rational method.

Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts.

1. The City uses an incremental borrowing rate (IBR) calculated by using the 5, 7, or 10-year Constant Maturities Treasury Bill Index plus a margin of 3% as instructed by one of our financial institutions at July 1, 2021 for existing leases or the current rate at the time a new lease is executed.

2. The lease term includes the non-cancelable period of the lease plus any option periods that are likely to be exercised.

3. Lease receipts included in the measurement of the lease receiva ble are composed of fixed payments from the lessee.

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

Packet Pg. 626
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

74 Note 1 – Summary of Significant Accounting Policies (Continued)

H. Subscription Based Information Technology Arrangements (SBITA)

The City has a policy to recognize a SBITA liability and a righ t‐to‐use subscription asset (subscription asset) in our financial statements with an initial, individual value of $15,000 or more with a term greater than one year.

At the commencement of a SBITA, the SBITA liability is measured at the present value of payments expected to be made during the SBITA term. Subsequently, the SBITA liabilit y is reduced by the principal portion of SBITA payments made.

Subscription assets are recorded at the amount of the initial measurement of the SBITA liabilities and modified by any SBITA payments made to the vendor at or before the commence ment of the subscription term, plus capitalizable implementation costs less any incentives received from the vendor at or before the commencement of the subscription term. Subscription assets are amortized us ing the straight–line method over the subscription term.

Key estimates and judgments relat ed to SBITAs include how the C ity determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) SBITA term, and (3) SBITA payments.

1. The City uses the interest rate charged by the vendor as the di scount rate. When the interest rate charged by the vendor is not provided, the City generally uses its esti mated incremental borrowing rate as the discount rate for SBITAs.

2. The lease term includes the non-cancelable period of the SBITA, plus any option periods that are reasonably certain to be exercised.

3. SBITA payments included in the measurement of the SBITA liabili ty are composed of fixed payments.

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

Subscription assets are reported as right-to-use along with oth er capital assets and SBITA liabilities are reported on the statement of net position as long-term debt.

I. Pensions

For purposes of measuring the net pension liability, deferred o utflows of resources and deferred inflows of resources related to pensions, a nd pension expense, information about the fiduciary net position of the plans and additions to/deductions from the plans’ fiduciary net position have been determined on the same basis as they are reported by the plans (Note 18). For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with benefit terms. Investments are reported at fair value. The following timeframes are used for pension reporting:

CalPERS:

Valuation Date June 30, 2022
Measurement Date June 30, 2023
Measurement Period July 1, 2022 to June 30, 2023

PARS:

Valuation Date June 30, 2022
Measurement Date June 30, 2023
Measurement Period July 1, 2022 to June 30, 2023

Packet Pg. 627
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

75 Note 1 – Summary of Significant Accounting Policies (Continued)

I. Pensions (Continued)

Gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time. The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense. The amortization period differs depending on the source of the gain or loss. The difference between proje cted and actual earnings is amortized straight-line over 5 years. All other amounts are amortized straight-line ove r the average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period.

J. Other Postemployment Healthcare Benefits (OPEB)

For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expen se, information about the fiduci ary net position of the plans and additions to/deductions from the plans’ f iduciary net position have been determined on the same basis as they are reported by the plans (Note 19). For this purpose, benefit payments (inc luding refunds of employee contributions) are recognized when due and payable in accordance with benefit term s. Investments are reported at fair value. The following timeframes are used for OPEB reporting:

Valuation Date June 30, 2023
Measurement Date June 30, 2023
Measurement Period July 1, 2022 to June 30, 2023

Gains and losses related to cha nges in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time. The first amortized amounts a re recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense . The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized straight-line over 5 years. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period.

K. Vacation and Sick Pay

Vacation pay is vested to the employees as it accrues and is pa yable upon retirement or termination. Sick leave, however, does not vest to the employees and is payable only whe n sick leave is taken, except when an individual has been employed by the City for ten years or longer. If the employee severs their relationship with the City after having been employed ten or more years, they receive from 33-1/ 3% to 60% payoffs depending on length of service. If the employee retires from the City after having been employed ten or more years, they have the option to take from 33-1/3% to 60% payoffs, per various Memoranda of U nderstandings, of their accrued sick pay as additional termination pay and have the remaining accrued sick pay extend their term of service for retirement benefit purposes. Vacation pay and 33-1/3% to 60% of the sick p ay of employees with terms of services equal to or exceeding ten years have been accrued in the accompanying go vernment-wide financial statements and the accompanying proprietary fund financial statements.

Packet Pg. 628
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

76 Note 1 – Summary of Significant Accounting Policies (Continued)

L. Unearned Revenue

In the government-wide financia l statements and fund financial statements, unearned revenue is recorded for transactions for which revenues have not been earned.

M. Long-Term Obligations

In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt 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. Lease and subscription liabilities with a present value of more than $15,000 are also included in long-term debt. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line me thod, which does not materially differ from the effective interest method. Bonds payable are reported net of the applicable bond premium or discount.

In the fund financial statements, governmental fund types recog nize bond premiums and discounts during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Bond issuance costs, whether or not withheld from the ac tual debt proceeds received, are reported as expenditures unless they are relat ed to insurance costs. Bond issuance insurance costs are reported as a prepaid asset and amortized over the life of the bonds.

N. Net Position

For government-wide reporting as well as in proprietary funds, fund equity is called net position. Net position is comprised of three components: net investment in capital assets, restricted, and unrestricted.

Net investment in capital assets consists of capital assets, net of accumulated depreciation an d reduced by outstanding balance of bonds, notes and other debt that are att ributed to the acquisition, construction, or improvement of those assets. Deferred outflows of resources and deferred inflows of resources that are attributable to the acquisition, construction or improvement of those assets or related debt are included in this component of net position.

Restricted net position consists of restricted assets reduced by liabilities and deferred inflows of resources related to those assets. Assets are reported as restricted when constraints are placed on asset use either by external parties or by law through constitutional provision or enabling legislation.

Unrestricted net position is the net amount of assets, deferred outflows or resources, liabilities, and deferred inflows of resources that does not meet the definition of the two preceding categories.

O. Fund Balances

In the fund financial statemen ts, governmental funds aggregate amounts for five classifications of fund balances based on the constraints imposed on the use of these resources. The non-spendable fund balance classification includes amounts that cannot be spent because they are either ( a) not in spendable form – prepaid items or inventories; or (b) legally or contractually required to be maintained intact.

The spendable portion of the fund balance comprises the remaini ng four classifications; restricted, committed, assigned, and unassigned.

Packet Pg. 629
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

77 Note 1 – Summary of Significant Accounting Policies (Continued)

O. Fund Balances

Restricted fund balance. This classification reflects the constraints imposed on resources either (a) externally by creditors, grantors, contributors, or laws or regulations of other governments; or (b) imposed by law through constitutional provisions or enabling legislation.

Committed fund balance. These amounts can only be used for specific purposes pursuant t o constraints imposed ordinances of the City Council – the government’s highest level of decision making authority. Those committed amounts cannot be used for any other purpose unless t he City Council removes the specified use by taking the same type of action imposing the commitment. Thi s classification also includes contractual obligations to the extent that existing resources in the fund h ave been specifically committed for the use in satisfying those contractual requirements.

Assigned fund balance. This classification reflects the amounts constrained by the City Council’s “intent” to be used for specific purposes, but are neither restricted nor c ommitted. By Council Policy the City Council and City Manager have the authority to allocate amounts to be u sed for specific purposes. City Council approves the appropriation; however, the budget ordinance autho rizes the City Manager to modify the appropriations by resource or appropriation within a functional area or fund.

Unassigned fund balance. This amount is for any portion of the fund balances that do not fall into one of the above categories. The General Fund is the only fund that reports a positive unassigned fund balance amount.

In other governmental funds, it is not appropriate to report a positive unassigned fund balance amount.

However, in governmental funds oth er than General Fund, if expe nditures incurred for specific purposes exceed the amounts that are restricted, committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that fund.

P. Spending Policy

When both restricted and unrestricted resources are available f or use, it is the City’s policy to use externally restricted resources first, then unrestricted resources-committed, assigned, and unassigned-in order as needed. The City has no formal policy of assignment of fund balance. So it is presumed that the order of spending is first committed fund balance, then assigned fund balance, and last of all, unassigned fund balance.

Q. Use of Estimates

The preparation of financial statements in conformity with gene rally accepted accounting principles requires management to make estimates and assumptions that affect the re ported 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.

R. New Governmental Accounting Standards Implemented for the Year Ended June 30, 2024

The requirements of the following accounting standards are effe ctive for the purpose of implementation, if applicable to the City, for the year ended June 30, 2024. The f inancial statements included herein apply the requirements and provisions of these statements, including necessary retroactive adjustments to financial statement classifications and presentations.

The City is currently analyzing its accounting practices to determine the potential impact on the financial statements for the following GASB statements:

Packet Pg. 630
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

78 Note 1 – Summary of Significant Accounting Policies (Continued)

R. New Governmental Accounting Standards Implemented for the Year Ended June 30, 2024 (Continued)

GASB Statement No. 100 - In June 2022, GASB issued Statement No. 100, Accounting Changes and Error Corrections – an Amendment of GASB Statement No. 62 . The primary objective of this Statement is to enhance accounting and financial reportin g requirements for accounting changes and error corrections to provide more understandable, reliable, relevan t, consistent, and comparable information for making decisions or assessing accountability. Application of this statement did not have a si gnificant effect on the City’s financial reporting for the fiscal year ended June 30, 2024.

S. Upcoming Governmental Accounting Standards Implementation

GASB Statement No. 101 - In June 2022, GASB issued Statement No. 101, Compensated Absences. The objective of this Statement is to better meet the information needs of fi nancial statement users by updating the recognition and measurement guidance for compensated absences. That objecti ve is achieved by aligning the recognition and measurement guidance under a unified model and by amending cert ain previously required disclosures.

Application of this statement is effective for the City’s fiscal year ending June 30, 2025.

GASB Statement No. 102 - In December 2023, GASB issued 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 which may limit a government's ability to acquire resources or control spending. Application of this statement is effective for the City’s fiscal year ending June 30, 2025.

G A S B S t a t e m e n t N o . 1 0 3 - In April 2024, GASB issued Statement No. 103, Financial Reporting Model Improvements. The objective of this Statement is to improve key components of the financial reporting model to enhance its effectiveness in providing information that is esse ntial for decision making and assessing a government’s accountability. Application of this statement is e ffective for the City’s fiscal year ending June 30, 2026.

GASB Statement No. 104 - In September 2024, GASB issued Statement No. 104, Disclosure of Certain Capital Assets. This Statement requires certain types of capital assets to be disclosed separately in the capital assets note disclosures required by Statement 34. Lease assets recognized i n accordance with Statement No. 87, Leases, and intangible right-to-use assets recognized in accordance with St atement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements, should be disclosed separately by major class of underlying asset in the capital assets note disclosures. Subscription asse ts recognized in accordance with Statement No. 96, Subscription-Based Information Technology Arrangements , also should be separately disclosed. In addition, this Statement requires intangible assets other than those three typ es to be disclosed separately by major class.

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

Packet Pg. 631
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

79 Note 2 – Cash and Investments

At June 30, 2024, cash and investments are reported in the accompanying basic financial statements as follows:

Fiduciary Funds
G overnm ental Business-Type Statem ent of
Activities Activities Total Net Position Total
Cash and investm ents 90,821,156$ 184,262,891 $ 275,084,047 $ 8,301,780 $ 283,385,827$ Restricted cash
and investm ents 1,119,178$ 6,551,113 $ 7,670,291 $ 6,394 $ 7,676,685$ Government-Wide
Statement of Net Position

At June 30, 2024, cash and investments, including cash and investments with fiscal agent, are reported at fair value in accordance with generally accepted accounting principles. The following table presents the fair value measurements of the investments recognized in the accompanying statement of net position and balance sheet measured at fair value on a recurring basis and the levels within GASB 72 fair value h ierarchy in which fair value measurement fall at June 30, 2024:

Measurement
Unrestricted Restricted Total Input
Deposits 58,249,297 $ 194,243 $ 58,443,540$ N/A Medium Term Corporate Notes 16,878,000 - 16,878,000 Level 2 Federal Agency Bonds 114,206,160 - 114,206,160 Level 2 Mutual Funds* 86,874,858 7,482,442 94,357,300 Level 1 Local Agency Investm ent Fund 7,177,512 - 7,177,512 Uncategorized Total investments 225,136,530 7,482,442 232,618,972 Total cash and investments 283,385,827$ 7,676,685 $ 291,062,512$ *Includes CAMP Investm ents
Fair Value

Securities classified in level 1 are valued using prices quoted in active markets for those securities. Securities classified in level 2 are valued using significant other observable inputs such as institutional bond pricing techniques and evaluated pricing applications and models.

Packet Pg. 632
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

80 Note 2 – Cash and Investments (Continued)

The City maintains a cash and investment pool that is available for use by all funds, except for funds of the Authority, Agency, and RABA (these funds have segregated accounts). Each fund’s portion of the cash and investment pool or segregated accounts is displayed on the Statement of Net Position and the Fund Financial Statement Balance Sheets as “Cash and Investments.”

A. Demand Deposits

At June 30, 2024, the carrying amount of the City’s deposits wa s $58,443,540 of which $194,243 was restricted and $58,249,297 was unrestricted. The bank balance was $62,536,038. Of the bank balance, $1,991,781 was covered by Federal depository insurance, and $60,544,257 w as covered by collateral held in the pledging bank’s trust department.

The California Government Code requires California banks and savings and loan associations to secure the City’s cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in the City's name.

The fair value of pledged securities must equal at least 110% of the City's cash deposits. California law also allows institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the City’s total cash deposits. The City may waive collateral requirements for cash deposits, which are fully insured up to $250,000 by the Federal Deposit Insurance Corporation. The Cit y, however, has not waived the collateralization requirements.

B. Investments

The California Government Investment Code and the investment policy of the City authorize the City to invest in obligations, participation, or other instruments of the U.S. Government or its agencies, state and municipal bonds, commercial paper of “prime” quality of the highest ranking or of the highest letter and numerical rating as provided by Standard & Poor’s Corporation or Moody’s Investor Service, I nc., bankers’ acceptances, repurchase agreements, mortgage pass-through securities, collateralized mortgage obligations, mortgage-backed or other pay- through bonds, equipment lease-backed certificates, consumer re ceivable pass-through certificates, or consumer receivable-backed bonds, and medium-term notes (issued by U.S. Corporations) of a maximum of five years with a minimum rating category of “A” by a nationally recognized rat ing service, notes, bonds, or other obligations secured by a valid first priority security interest, and the St ate Treasurer’s Investment Pool (LAIF). Reverse repurchase agreements may be made only when prior approval of the City Council has been given.

C. Investments in Local Agency Investment Fund (LAIF)

The City is a participant in LAIF which is regulated by Califor nia Government Code Section 16429 under the oversight of the Treasurer of the State of California. The City ’s investments in LAIF at June 30, 2024 included a portion of pool funds invested in Structure Notes and Asset-Backed Securities:

Structured Notes are debt securities (other than asset-backed securities) whose cash-flow characteristics (coupon rate, redemption amount, or stated maturity) depend upo n one or more indices and/or that have embedded forwards or options.

Asset-Backed Securities, the bulk of which are mortgage-backed securities, entitle their purchasers to receive a share of the cash flows from pool of assets such as principal and interest repayments from a pool of mortgages (such as Collateralized Mortgage Obligations) or credit card receivables.

Packet Pg. 633
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

81 Note 2 – Cash and Investments (Continued)

C. Investments in Local Agency Investment Fund (LAIF) (Continued)

As of June 30, 2024, the City had $7,177,512 invested in LAIF, which had invested 3.00% of the pool investment funds in Structured Notes (1.40%) and Asset-Back Securities (1. 60%). LAIF determines the value on its investment portfolio based on market quotations for those securities where market quotations are readily available and based on amortized cost or best estimate for those securiti es where market value is not readily available. The City valued its investments in LAIF as of June 30, 2024, by multiplying its account balance with LAIF times a fair value factor determined by LAIF. This fair value factor was de termined by dividing all LAIF participants’ total aggregate amortized cost by total aggregate fair value. The fair value of the City’s position in the pool is the same as the value of the pool shares. The credit quality rating of LAIF is unrated as of June 30, 2024.

D. Investments in California Asset Management Program (CAMP)

The City is a participant in CAMP which is a JPA (Joint Powers Authority) created by the Declaration of Trust and established under the provisions of the Act for the purpose of exercising the common power of its Participants to invest funds. The Trust is a JPA and a separate Public Agency established as a common law trust under the laws of the State of California by execution of a Declaration of Tru st by two California Public Agencies as the initial Participants in the Trust.

The Trust is currently governed by a Board of seven Trustees, a ll of whom are officials or employees of Public Agencies that are Participants in the Trust. Trustees are appo inted pursuant to, and are provided authority under, the Declaration of Trust.

PFMAM (PFM Asset Management) is an investment and advisory firm with offices in San Francisco, CA and Harrisburg, PA, is the Trust’s investment advisor and administr ator. The daily management of the investment affairs and research relating to the Portfolios is conducted by or under the supervision of the Investment Advisor.

The following Cash Reserve Portfol io invests exclusively in the following types of investments all of which are authorized investments for Public Agencies pursuant to Californ ia Government Code Section 53601: U.S.

Government and agency obligations; Repurchase agreements collat eralized by U.S. Government and agency obligations; Bankers’ acceptances; Negotiable certificates of d eposit; Commercial paper, Corporate notes; Supranationals; Asset-back Securities and Money Market Funds.

As of June 30, 2024, the City has $94,326,928 invested in CAMP, which had invested the pool investment funds in a fully liquid, stable net asset value investments.

E. Risk Disclosures

Disclosures Relating to Interest Rate Risk

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

Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. As a means of limiting its exposure to fair va lue losses arising from rising interest rates, the City varies its maturity dates throughout the five-year maturity per iod. The investments with maturities greater than 5 years pertain to investment agreements within the bond issues. These agreements afford the City long-term fixed interest rates for the duration of the bond issue, with the option to utilize those funds for debt service payments and at the City’s option replenish those funds at the fixed rate un til the maturity of the investment agreements. The City has no formal policy regarding interest rate risk.

Packet Pg. 634
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

82 Note 2 – Cash and Investments (Continued)

E. Risk Disclosures (Continued)

As of June 30, 2024, the City had the following investments and maturities:

Unrestricted:

Fair Less
Investment Type Value Than 1 1-2 3-4 5
Medium Term Corporate Notes 16,878,000$ 4,928,000 $ 7,218,000 $ 4,732,000 $ - $ Federal Agency Bonds 114,206,160 36,357,415 40,570,764 26,485,450 10,792,531 Investment in State Treasurer's
Investment Pool 7,177,512 7,177,512 - - - Mutual Funds 86,874,858 86,874,858 - - - Total 225,136,530 $ 135,337,785 $ 47,788,764 $ 31,217,450 $ 10,792,531 $ Investments Maturities (in Years)

Restricted:

Fair Less More
Investment Type Value Than 1 1-5 Than 5
Investment in State Treasurer's Investment Pool - $ - $ - $ - $ Mutual Funds 7,482,442 7,482,442 - - Total 7,482,442$ 7,482,442 $ - $ - $ Investments Maturities (in Years)

Disclosures Relating to Credit Risk

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

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

As of June 30, 2024, the City’s investments in Federal Agency B onds were rated AA and AAA by S&P. The City’s investments in Medium Term Corporate Notes were rated AAA by S&P. Investments in LAIF are not rated as LAIF is a State sponsored investment pool. The City policy limits the percentage invested in various instruments by category.

As of June 30, 2024, the City’s investments in CAMP were rated AAA by S&P and exempt.

Packet Pg. 635
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

83 Note 2 – Cash and Investments (Continued)

E. Risk Disclosures (Continued)

Disclosures Relating to Concentration of Credit Risk

Investments in any one issuer (other than U.S. Treasury securit ies, mutual funds, and external investment pools) that represent 5% or more of total City investments are as follows:

Issuer Investm ent Type Am ount
Federal Farm Credit Bank Federal Agency Securities 18,518,750 $ Federal National Mortgage Association Federal Agency Securities 2 4,613,200$ Federal Hom e Loan Mortgage Corporation Federal Agency Securities 31,689,428$ Federal Hom e Loan Bank Federal Agency Securities 39,387,212 $

Disclosures Relating to Custodial Credit Risk

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 Gov ernment Code and the City's investment policy do not contain legal or policy requirements that would limit the e xposure to custodial credit risk for deposits or investments, other than the following provision for deposits.

All securities are held in the name of the City. As a result, the City had no custodial credit risk at June 30, 2024.

Note 3 - Governmental Notes Receivable

Notes receivable represent loan agreements entered into between the City or Successor Housing Agency (the former RDA) and unrelated nongovernmental entities as part of the City ’s redevelopment activities, including single-family home buyer assistance, and real estate development and construc tion loans. At June 30, 2024, approximately $69.90 million of notes receivable, net of $1.15 million allowance for doubtful accounts, were re ported in the Community Development major fund. At June 30, 2024, approximately $15.14 million of notes receivable were reported in the Housing non-major special revenue fund.

Packet Pg. 636
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

84 Note 3 - Governmental Notes Receivable (Continued)

Balance Balance
July 1, 2023 Additions Deletions June 30, 2024
General governmental activities:

Community development fund loans
Community Development Block Grant (CDBG) 2,874,205 $ 37,061 $ (32,245) $ 2,879,021 $ HOME Investment Program (HOME) 23,777,133 1,082,054 (128,939) 24,730,248 CalHome Program 1,738,420 92,800 (3,186) 1,828,034 Other California Programs (AHSC, IIG) 30,285,089 5,258,425 - 35,543,514 City Affordable Housing Loan Fund (AHLF) 5,266,572 (338,100) - 4,928,472 Total community development fund loans 63,941,419 6,132,240 (164,370) 69,909,289 Allowance for bad debt (192,329) (954,209) - (1,146,538) Community development fund notes receivable, net 63,749,090 5,178,031 (164,370) 68,762,751 Housing fund loans
Low Mod Income Housing Asset Fund 15,236,117 - (99,377) 15,136,740 Total housing fund loans 15,236,117 - (99,377) 15,136,740 Housing fund loans receivable, net 15,236,117 - (99,377) 15,136,740 Total governmental note receivable 78,985,207 5,178,031 (263,747) 83,899,491 Business-type activities:

Electric utility loans
Redding Rodeo note 90,688 - (90,688) - Total business-type note receivable 90,688 - (90,688) - Total note receivable 79,075,895 $ 5,178,031 $ (354,435) $ 83,899,491 $

Note 4 – Lease Receivable

Summary of changes in governmental activities leases receivable for the year ended June 30, 2024 is as follows:

Balance Balance Due within Due in more
July 1, 2023 Additions Deletions June 30, 2024 One Year than One Year Lease receivable
Governmental-type activities 2,433,322$ - $ (354,147)$ 2,079,175 $ 311,291 $ 1,767,884 $ Business-type activities 9,103,738 1,649,954 (842,943) 9,910,749 778,320 9,132,429 Total lease receivable 11,537,060$ 1,649,954 $ (1,197,090) $ 11,989,924 $ 1,089,611 $ 10,900,313 $

Packet Pg. 637
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

85 Note 4 – Lease Receivable (Continued)

A portion of the City's property is leased to others. Such pro perty includes special purpose facilities, office and commercial space, and land. Lease receivable consists of agreements with others for the right-to-use of the underlying assets at various locations owned by the City. The terms of the arrangements range from 2 to 25 years. The calculated interest rates used are based on the 5, 7, or 10-year Constant Maturities Treasury Bill Index plus a margin of 3%. It is City policy to recognize leases as a lease receivable when the present value meets or exceeds $15,000. Lease revenues are recognized as operating revenues in proprietary funds and as charges for services in governmental funds. The City municipal airport holds the majority of the leases recognized, with a balance at June 30, 2024 of $8,609,888.

Governmental-type activities
Lease receivable
Year Ending June 30, Principal Interest Total Deferred Inflows 2025 311,291 $ 82,457 $ 393,748 $ 311,291 $ 2026 183,298 72,581 255,879 $ 183,298 2027 180,899 64,568 245,467 $ 180,899 2028 171,494 56,821 228,315 $ 171,494 2029 703,481 171,804 875,285 $ 703,481 2030-2034 197,695 84,552 282,247 $ 197,695 2035-2039 190,622 46,066 236,688 $ 190,622 2040-2044 140,395 9,187 149,582 $ 140,395 2045-2049 - - - - Total 2,079,175 $ 588,036 $ 2,667,211 $ 2,079,175 $ Business-type activities
Lease receivable
Year Ending June 30, Principal Interest Total Deferred Inflows 2025 778,320 $ 525,407 $ 1,303,727 $ 778,320 $ 2026 728,424 492,990 1,221,414 $ 728,424 2027 641,321 461,167 1,102,488 $ 641,321 2028 657,597 430,131 1,087,728 $ 657,597 2029 475,019 402,183 877,202 $ 475,019 2030-2034 2,043,145 1,704,616 3,747,761 $ 2,043,145 2035-2039 1,234,595 1,273,229 2,507,824 $ 1,234,595 2040-2044 1,048,204 941,448 1,989,652 $ 1,048,204 2045-2049 1,015,114 608,264 1,623,378 $ 1,015,114 2049-2054 1,001,985 233,037 1,235,022 $ 1,001,985 Thereafter 287,025 104,191 391,216 $ 287,025 Total 9,910,749 $ 7,176,663 $ 17,087,412 $ 9,910,749 $

Packet Pg. 638
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

86 Note 5 – Interfund Activities

A. Due From and Due To Other Funds

At June 30, 2024, due to and du e from other funds balances are as follows:

Due From
Other Funds
Due To Other Funds G eneral Fund Total
G overnm ental funds:

Nonm ajor governm ental funds 151,935$ 151,935 $
Enterprise funds:

Nonm ajor enterprise funds 675,986 675,986
Total 827,921$ 827,921 $

Short-term loans recorded as due to and due from other funds were for cash shortages for operations.

B. Interfund Receivable and Payable

At June 30, 2024, interfund receivable and payable balances are as follows:

Electric Water Wastewater Solid Waste Internal
General Utility Utility Utility Utility Service
Interfund Payable Fund Fund Fund Fund Fund Funds Total
Governmental Funds:

Community Development 245,157$ 488,142 $ 191,771 $ 130,752 $ 61,018 $ - $ 1,116,840$ Enterprise funds:

Nonmajor enterprise funds - - - - - 43,000 43,000 Internal service funds 6,250 - - - - - 6,250 Total 251,407$ 488,142 $ 191,771 $ 130,752 $ 61,018 $ 43,000 $ 1,166,090$ Interfund Receivable

Interfund receivables and payables represented the portion of Advances that are expected to be repaid within one year.

Packet Pg. 639
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

87 Note 5 – Interfund Activities (Continued)

C. Advances To and From Other Funds

At June 30, 2024, long-term advances consisted of the followings:

Solid Internal
Electric Wastewater Water Waste Service
Utility Utility Utility Utility Funds Total
Governmental funds:

General fund 3,588,088 $ - $ - $ - $ - $ 3,588,088$ Community Development 1,120,389 300,104 440,152 140,048 - 2,000,693 Nonmajor: governmental funds 233,781 - - - 186,913 420,694 Enterprise funds:

Nonmajor: enterprise funds - - - - 2,998,577 2,998,577 Total 4,942,258$ 300,104 $ 440,152 $ 140,048 $ 3,185,490 $ 9,008,052 $ Advances from other funds
Advances to Other Funds

a) The Electric Utility loaned the Parking Fund additional funds f or another parking structure at the Downtown Mall. The outstanding balance at year-end was $233,781; all of which is classified as long-term. b) The Electric Utility Fund advanced $3,621,500 to the General Fund for the replacement of the Redding Soccer Park turf. The outstanding balance of the advance including accrued interest at the City’s average earnings on its pooled cash is $489,024; all of which is classified as long-term. c) The General Fund has advanced funds to the Parking Fund to cove r operating expenditures. This balance has been transferred to the Risk Management Fund and had a balance of $186,913 at year-end; all of which is classified as long-term.
d) In recent years the General Fund has advanced $8,917,054 to the Airport Fund to finance improvements and operating expenses. The balance was transferred to the Risk Man agement Fund during the 2009-2010 fiscal year. The Airport Fund has repaid $7,392,640 to date. At year-end the balance was $1,524,384. Of this amount $1,499,384 is classified as long-term.
e) In recent years the General Fund has advanced $1,374,847 to the Convention Center Fund to finance improvements and operating expenses. The balance was transferre d to the Risk Management Fund during the 2009-2010 fiscal year. The balance at year-end was $732,186; of this amount $714,186 is classified as long- term.
f) The Risk Management Fund advanced funds to the Convention Cente r Fund to finance additional improvements. At year-end the balance was $785,007; all of which is classified as long-term at year-end. g) The Electric Fund advanced funds of $681,400 to the General Fun d by paying for a portion of the Redding Police Department’s share of the communication platform overhaul. An additional advance was taken in fiscal year 2021-22 in the amount of $1,340,345 and $1,384,510 in fisc al year 2022-23. The outstanding balance of the advance including accrued interest at the City’s average ea rnings on its pooled cash is $3,099,064; all of which is classified as long term.
h) The Utilities Funds (Electric, Water, Wastewater and Solid Wast e) advanced funds totaling $2,872,376 to the Community Development Fund to fi nance the improvements for the Block 7 Downtown Project. (Electric - $1,608,531 Water - $631,923; Wastewater - $430,856; and Solid W aste - $201,066). The balance at year end was $2,872,376; of this amount $2,000,693 is classified as long term.

Packet Pg. 640
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

88 Note 5 – Interfund Activities (Continued)

D. Internal Balance Summary

At June 30, 2024, the internal balance summary consisted of the followings:

Governmental Funds
General
Fund
Community
Development
Special
Revenue
Internal
Service
Funds Total
Assets
Due from other funds 827,921 $ - $ - $ - $ 827,921$ Interfund receivable 251,407 - - 43,000 294,407 Advances to other funds - - - 3,185,490 3,185,490 1,079,328 - - 3,228,490 4,307,818 Liabilities
Due to other funds - - 151,935 - 151,935 Interfund payable - 1,116,840 - 6,250 1,123,090 Advances from other funds 3,588,088 2,000,693 420,694 - 6,009,475 3,588,088 3,117,533 572,629 6,250 7,284,500 Net difference (2,976,682)
Business-type portion of the internal service funds 12,441,565 Statement of net assets internal balance 9,464,883$
Electric
Utility Water Utility
Wastewater
Utility
Solid
Waste
Nonmajor
Enterprise Total
Assets
Due from other funds - $ - $ - $ - $ - $ - $ Interfund receivable 488,142 191,771 130,752 61,018 - 871,683 Advances to other funds 4,942,258 440,152 300,104 140,048 - 5,822,562 5,430,400 631,923 430,856 201,066 - 6,694,245 Liabilities
Due to other funds - - - - 675,986 675,986 Interfund payable - - - - 43,000 43,000 Advances from other funds - - - - 2,998,577 2,998,577 - - - - 3,717,563 3,717,563 Net difference 2,976,682
Business-type portion of the internal service funds (12,441,565) Statement of net assets internal balance (9,464,883)$
Proprietary Funds

Packet Pg. 641
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

89 Note 5 – Interfund Activities (Continued)

E. Transfer In and Out

The following operating transf ers were made during the fiscal year-ended June 30, 2024:

Transfers In
Transfers Out General Fund
Nonmajor
Governmental
Funds
Electric
Fund Water Fund
Nonmajor
Enterprise
Funds
Internal
Service
Funds Total
Governmental funds:

Major funds:

General fund - $ 994,235$ 3,200 $ - $ 1,038,484 - $ 2,035,919$ General capital projects fund - - - - - - - Nonmajor governmental funds 10,009,190 - - - - - 10,009,190 Enterprise funds:

Major enterprise funds:

Electric 7,270,600 - - 125,000 - 33,133 7,428,733 Water - - - - 143,901 - 143,901 Wastewater - - 196,059 - 325,602 - 521,661 Nonmajor enterprise funds 250,000 - - 57,236 - - 307,236 Internal service funds - - 4,800 - - - 4,800 Total 17,529,790$ 994,235 $ 204,059 $ 182,236 $ 1,507,987 $ 33,133 $ 20,451,440$

The reasons for these transfers are set forth below:
a) The General Fund transferred a portion of the transient occupancy tax to the Convention Center per City policy. b) The General Fund transferred funds to the Library for operations. c) The Airports and Electric Enterprise Funds transfer funds to the General Fund in lieu of property tax. d) Within the Nonmajor Governmental Funds, gas taxes and other special revenues are transferred to the General Fund to pay for related expenditu res such as street maintenance and public safety. In addition, funds were transferred to the capital project fund to cover portions of qualified projects. e) Funds transferred for used vehicles purchased internally per Ci ty policy between General Fund, Electric and Internal Service Funds.

Packet Pg. 642
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

90 Note 6 – Capital Assets

A. Governmental Activities

Summary of changes in capital assets for the year ended June 30, 2024 consisted of the following:

Balance Balance
July 1, 2023 Additions Deletions Transfers June 30, 2024 Total gov ernmental activ ities:

Capital assets, not being depreciated:

Land 36,426,744 $ 1,004,179 $ (12,307) $ 2,510,994$ 39,929,610 $ Construction in process 67,369,947 22,138,295 (67,911) (14,919,385) 74,520,946 103,796,691 23,142,474 (80,218) (12,408,391) 114,450,556 Capital assets, being depreciated:

Buildings 64,865,090 - - 173,677 65,038,767 Im provem ents other than buildings 107,085,499 - - 684,093 107,769,592 Infrastructure 350,412,573 872,259 - 10,182,055 361,466,887 Automotive equipment 20,433,546 3,818,588 (379,104) 155,651 24,028,681 Furnishings and equipm ent 12,467,909 100,047 - - 12,567,956 Assets under lease:

Right-to-use im provem ents 113,677 - - - 113,677 Right-to-use autom otive equipm ent 609,387 413,244 (165,214) - 857,417 Right-to-use subscription 348,734 4,572,851 - - 4,921,585 556,336,415 9,776,989 (544,318) 11,195,476 576,764,562 Accum ulated depreciation:

Buildings (41,983,997) (2,022,596) - - (44,006,593) Improvements other than buildings (77,825,051) (3,480,014) - - (81,305,065) Infrastructure (152,560,479) (9,191,121) - - (161,751,600) Automotive equipment (12,569,097) (1,654,044) 379,104 (89,386) (13,933,423) Furnishings and equipment (10,059,882) (607,756) - - (10,667,638) Assets under lease:

Right-to-use improvements (70,377) (30,485) - - (100,862) Right-to-use automotive equipment (182,446) (164,163) 100,880 - (245,729) Right-to-use subscription (84,233) (986,515) - - (1,070,748) Total accumulated depreciation (295,335,562) (18,136,694) 479,984 (89,386) (313,081,658) Total capital assets,
being depreciated, net 261,000,853 (8,359,705) (64,334) 11,106,090 263,682,904 Total gov ernmental activ ities 364,797,544$ 14,782,769 $ (144,552) $ (1,302,301)$ 378,133,460$ Total capital assets, being depreciated
Total capital assets, not being depreciated

Depreciation expense was charged to governmental activities as follows:

Program Depreciation
General government 1,688,492 $
Police 1,739,245
Fire 1,074,723
Public works 9,358,697
Recreation and culture 4,221,117
Com m unity developm ent 54,420
Total 18,136,694 $

Packet Pg. 643
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

91 Note 6 – Capital Assets (Continued)

B. Business-Type Activities

Summary of changes in capital assets for the year ended June 30, 2024 consisted of the following:

Balance Balance
July 1, 2023 Additions Deletions Transfers June 30, 2024 Business-typ e activ ities:

Capital assets, not being depreciated:

Land 20,394,310 $ - $ - $ - $ 20,394,310$ Construction in progress 55,199,976 34,721,404 (111,617) (9,325,699) 80,484,064 75,594,286 34,721,404 (111,617) (9,325,699) 100,878,374 Capital assets, being depreciated:

Utility plants 911,186,961 11,005,449 (1,594,899) 10,314,811 930,912,322 Buildings 78,207,472 - - - 78,207,472 Improvements other than buildings 56,726,919 - - 457,155 57,184,074 Automotive equipment 50,838,342 4,697,248 (2,116,690) (155,651) 53,263,249 Furnishings and equipment 33,417,001 213,194 - - 33,630,195 Assets under lease:

Right-to-use equipment 264,602 - - - 264,602 Right-to-use subscription 4,806,628 1,299,176 - - 6,105,804 1,135,447,925 17,215,067 (3,711,589) 10,616,315 1,159,567,718 Less accum ulated depreciation for:

Utility plants (522,865,169) (22,959,102) 1,131,069 - (544,693,202) Buildings (51,774,458) (2,179,403) - - (53,953,861) Improvements other than buildings (35,574,974) (1,822,610) - - (37,397,584) Automotive equipment (31,309,920) (3,741,006) 1,929,871 89,386 (33,031,669) Furnishings and equipment (25,526,618) (1,751,351) - - (27,277,969) Assets under lease:

Right-to-use equipment (134,681) (48,804) - - (183,485) Right-to-use subscription (1,043,432) (1,094,038) - - (2,137,470) Total accumulated depreciation ( 668,229,252) (33,596,314) 3,060,940 89,386 (698,675,240) Total capital assets,
being depreciated, net 467,218,673 (16,381,247) (650,649) 10,705,701 460,892,478 Total b usiness-typ e activ ities 542,812,959$ 18,340,157 $ (762,266) $ 1,380,002 $ 561,770,852$ Total capital assets, not being depreciated
Total capital assets, being depreciated

Depreciation expense was charged to the business-type activities as follows:

Program Depreciation
Electric 14,665,783 $
Water 4,105,646
Wastewater 7,300,649
Storm drainage 1,215,140
Solid waste 3,059,937
Airport 1,841,941
RABA 1,332,273
Convention center 74,945
Total 33,596,314 $

Packet Pg. 644
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

92 Note 7 – Storage Base Gas

Redding Electric Utility (REU) entered into a natural gas lease agreement on August 28, 2009 with Gill Ranch Storage, LLC (GRS) in which GRS (Lessee) would provide firm natural gas storage service to REU (Lessor). The firm storage service is provided at the GRS facility in Madera County, California, near the City of Fresno. 2,250,000 Dth of natural gas was initially acquired by REU for GRS’ use as base gas under the lease at a total cost of $11,850,000. Additionally, in order to effect the right to offset provisions per the lease contract between REU and GRS, REU paid GRS an amount equal to $1,720,000. The total cost to REU to implement this lease agreement was $13,570,000. The lease arrangement dictates that GRS shall make monthly payments to REU as rent fo r the base gas in an amount equal to $100,000 per month. If REU does not purchase and deliver to GRS the base gas then GRS shall not be required to pay rent to REU.

As of June 30, 2024, the lease agreement between Redding Electr ic Utility and Gill Ranch Storage, LLC continues to be in effect.

Note 8 – Unavailable Revenue

On the fund financial statements, unavailable revenue consisted of the following as of June 30, 2024:

G eneral Comm unity Nonm ajor
G eneral Capital Projects Development G overnmental
Fund Fund Fund Funds Total
Unavailable revenues:

Sales tax 55,964 $ - $ - $ - $ 55,964$ Property taxes 910,667 - - - 910,667 Grant revenue 1,203,113 10,967,177 3,192,296 - 15,362,586 Assessm ents - - - 312,180 312,180 Housing loans - interest - - 3,310,593 2,808,506 6,119,099 Total 2,169,744 $ 10,967,177 $ 6,502,889 $ 3,120,686 $ 22,760,496 $

Packet Pg. 645
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

93 Note 9 – Long-Term Debt

Summary of changes in long-term debt for the year ended June 30, 2024, is as follows:

Balance Balance Due within Due in more
July 1, 2023 Additions Deletions June 30, 2024 One Y ear than One Y ear Gov ernmental activ ities:

Long-term debt:

SBITAs 272,909 $ 2,127,301$ (656,141) $ 1,744,069$ 486,327 $ 1,257,742$ Leases 426,454 352,244 (225,441) 553,257 143,976 409,281 Revenue bonds 25,604,783 - (1,639,783) 23,965,000 1,555,000 22,410,000 Loan 573,566 - (118,193) 455,373 126,257 329,116 Long-term debt before
unam ortized am ounts 26,877,712 2,479,545 (2,639,558) 26,717,699 2,311,560 24,406,139 Bond prem ium 2,738,077 - (130,904) 2,607,173 130,904 2,476,269 Bond discount (34,497) - 2,184 (32,313) (1,678) (30,635) 29,581,292 2,479,545 (2,768,278) 29,292,559 2,440,786 26,851,773 Business-type activ ities:

Long-term debt:

SBITAs 3,831,283 152,675 (994,475) 2,989,483 994,162 1,995,321 Leases 130,817 - (48,319) 82,498 43,485 39,013 Revenue bonds 131,070,214 - (13,540,214) 117,530,000 14,135,000 103,395,000 State loans payable 334,537 - (31,181) 303,356 32,240 271,116 Long-term debt before
unam ortized am ounts 135,366,851 152,675 (14,614,189) 120,905,337 15,204,887 105,700,450 Bond prem ium 20,971,352 - (2,222,807) 18,748,545 2,222,804 16,525,741 156,338,203 152,675 (16,836,996) 139,653,882 17,427,691 122,226,191 Total long-term debt 185,919,495$ 2,632,220 $ (19,605,274)$ 168,946,441 $ 19,868,477 $ 149,077,964 $ Total governm ental
activities long-term debt
Total business-type
activities long-term debt

Current year amortization expense for bond premiums and discounts was $128,720 for the governmental activities and $2,222,807 for the business-type activities.

The annual requirements to amortize all debt outstanding as of June 30, 2024, excluding obl igations associated with bond premiums (discounts) are as follows:

Y ear Ending
June 30, Principal Interest Principal Interest Principal Interest 2025 2,311,560$ 1,344,309 $ 15,204,887 $ 5,977,040 $ 17,516,447 $ 7,321,349 $ 2026 2,414,853 1,210,878 15,668,997 5,193,514 18,083,850 6,404,392 2027 1,816,272 1,066,726 16,422,908 4,392,699 18,239,180 5,459,425 2028 1,326,629 956,201 16,835,888 3,559,323 18,162,517 4,515,524 2029 1,285,954 884,623 16,951,861 2,729,200 18,237,815 3,613,823 2030-2034 6,932,431 3,354,400 36,671,907 4,417,644 43,604,338 7,772,044 2035-2039 5,665,000 1,662,577 3,148,889 131,713 8,813,889 1,794,290 2040-2044 4,965,000 564,391 - - 4,965,000 564,391 2045-2049 - - - - - - Total 26,717,699$ 11,044,105 $ 120,905,337 $ 26,401,133 $ 147,623,036 $ 37,445,238 $ G overnm ental Activities Business-Type Activities G overnm ent-Wide

Packet Pg. 646
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024
94 Note 9 – Long-Term Debt (Continued)
Governmental activities Issue
Amount
Balance
06/30/2024 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28
2013 Lease Revenue Bonds, Series B
Principal Payment 9,046,060$ 5,770,001 $ 235,000$ 245,000$ 255,000$ 265,000$ Bond Discount (120,916) (32,313) (1,678) (1,678) (1,678) (1,678) 2013 Lease Revenue Bonds, Series C
Principal Payment 2,135,000 1,270,000 110,000 120,000 125,000 130,000 2019 Lease Revenue Bonds, Series A
Principal Payment 24,085,000 16,925,000 1,210,000 1,275,000 695,000 735,000 Bond Premium 3,272,602 2,607,173 130,904 130,904 130,904 130,904 2022 Parking Loan
Principal Payment 648,138 455,373 126,257 134,870 144,071 50,175 Leases Payable
Principal Payment 553,256 553,256 143,976 130,018 129,391 103,063 SBITAs Payable
Principal Payment 1,744,069 1,744,069 486,327 509,965 467,810 43,391 Total governmental activities 41,363,209$ 29,292,559$ 2,440,786$ 2,544,079$ 1,945,498$ 1,455,855$ Business-type activities
2013 California Airport Loan-Benton
Principal Payment 350,000$ 170,252$ 21,782$ 22,578$ 23,404$ 24,259$ 2018 California Airport Loan- Benton
Principal Payment 190,000 133,104 10,459 10,760 11,069 11,388 2020 Wastewater Revenue Bonds
Principal Payment 52,420,000 34,810,000 3,865,000 4,060,000 4,260,000 4,475,000 Bond Premium 12,075,581 9,308,259 754,724 754,724 754,724 754,724 2018 Electric Systems Revenue Bonds,
Series A
Principal Payment 39,510,000 21,430,000 3,155,000 3,305,000 3,475,000 3,645,000 Bond Premium 6,232,541 2,907,120 525,067 525,067 525,067 525,067 2017 Electric Systems Revenue Bonds,
Series A
Principal Payment 55,785,000 32,850,000 4,830,000 5,075,000 5,320,000 5,590,000 Bond Premium 9,436,880 4,120,844 733,246 733,246 733,246 733,246 2015 Electric Systems Revenue Bonds,
Series A
Principal Payment 37,955,000 28,440,004 2,285,000 2,405,000 2,530,000 2,650,000 Bond Premium 4,195,346 2,412,318 209,766 209,767 209,767 1,048,835 Leases Payable
Principal Payment 82,498 82,498 43,485 39,013 - - SBITAs Payable
Principal Payment 2,989,483
2,989,483 994,162 751,646 803,435 440,240
Total business-type activities 221,222,329$ 139,653,882$ 17,427,691$ 17,891,801$ 18,645,712$ 19,897,759$ *Additional Information on the Bond Issues follows this note.

Packet Pg. 647
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

95 Note 10 – Long-Term Debt (Continued)

FY 2028-29 FY 2030-34 FY 2035-39 FY 2040-44 FY 2045-49 Thereafter Final
Maturity
Interest
Rate
2043 2-5%
280,000$ 1,650,001 $ 1,230,000 $ 1,610,000 $ - $ - $ (8,390) (8,390) (8,390) (431) - - 2032 3.75-6.5%
785,000 - - - - - 2044 3.125-5%
4,235,000 4,810,000 3,250,000 715,000 - - 654,520 654,520 654,520 119,997 - - 2027 6.62%
- - - - - - 2027 3.89%
46,808 - - - - - 2026 7.13%
49,145 187,431 - - - - 6,042,083$ 7,293,562 $ 5,126,130 $ 2,444,566 $ - $ - $ 78,229$ - $ - $ - $ - $ - $ 2031 3.655% 62,041 27,387 - - - - 2035 2.87% 16,540,000 1,610,000 - - - - 2036 5% 3,773,620 2,515,744 - - - - 3,830,000 4,020,000 - - - - 2030 4-5% 525,067 281,786 - - - - 12,035,000 - - - - - 2030 3-5% 1,187,861 - - - - - 13,115,000 5,455,004 - - - - 2035 2-5% 734,180 - - - - - - - - - - - 2023 3.89% - - - - - - 2023 7.13% 51,880,998$ 13,909,921 $ - $ - $ - $ - $

Packet Pg. 648
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

96 Note 9 – Long-Term Debt (Continued)

2013 Lease Revenue Bonds, Series B and C

The 2013 Lease Revenue Bonds, Series B and Series C were issued to finance the construction of the Redding police building and refinance the 2003 Aquatic Center, the Sports Comp lex, SHASCOM, Convention Center and the Municipal Airport, which was used to refinance the 1993 Lease R evenue Bonds for SHASCOM, Convention Center and the Municipal Airport.

The Bonds are payable from the operating revenues of the Reddin g Aquatic Center, Sports Complex, SHASCOM, Convention Center, and Municipal Airport Funds. The security f or the bonds is the title to the City's existing police facility, its SHASCOM communications facility, the Redding Aqua tic Center and the land on which the to-be- constructed police facility will be located to the Authority, a nd the City will lease back the leased property from the Authority pursuant to the facilities lease.

2019 Lease Revenue Bonds, Series A

The 2019 Lease Revenue Bonds, Series A were issued to refinance the 2004 Capital Projects Series A & B, 2004 Civic Center Refunding Series C, and the 2007 Capital Project Series A and to finance acquisition and construction of capital projects within the City of Redding. Payable from revenues gen erated pursuant to the Facilities Lease between the Redding Joint Powers Financing Authority (Authority) and the Ci ty of Redding whereby the City has transferred title to its Civic Center and leases it back from the Authority.

The Bonds are payable from revenues generated pursuant to the F acilities Lease between the Redding Joint Powers Financing Authority (Authority) and the City of Redding whereby the City has transferred title to its Civic Center and leases it back from the Authority.

2022 Parking Loan

The 2022 Parking Loan was for the purchase of electronic parking meter pay stations for downtown Redding.

2013 California Airport Loan (Benton)

The 2013 California Airport Loan (Benton) was to repay the California Highway Patrol Hangar at the Benton Airpark.

2015 California Airport Loan (Municipal)

The 2015 California Airport Loan (Municipal) was for the PV Sol ar Array lease purchase at the Redding Municipal Airport.

2018 California Airport Loan (Benton)

The 2018 California Airport Loan (Benton) was for the construct ion of a new hangar roof and other exterior improvements at the Benton Airpark.

Packet Pg. 649
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024
97 Note 9 – Long-Term Debt (Continued)
2020 Wastewater Revenue Bonds
The 2020 Wa
stewater Revenue Bonds, Series A were issued to refinance twelve State Water Resource Control Board (SWRCB) loans, which were used to finance capital improvements to the City’s wastewater system and cost of issues for the 2020 bonds.

The payments are payable from operating revenue of the Wastewat er Utility Fund. The 2020 bonds are special obligations of the City payable solely from and secured by a pl edge of and lien on net revenues of the wastewater system and all monies on deposit in the Wastewater Revenue Fund. 2018 Electric System Revenue Bonds
The
2018 Electric System Revenue Bonds, Series A were issued to prepay and refund a portion of the City’s outstanding 2008 A Electric System Certificates of Participation Bonds and pay costs of issuance monies on deposit in the Electric Revenue Fund of the City.

The payments are payable from operating revenues of the Electric Utility Fund. The 2018 bonds are special obligations of the City payable solely from and secured by a pledge of and lien on net revenues of the electric system and all monies on deposit in the Electric Revenue Fund of the City. 2017 Electric System Revenue Bonds
The
2017 Electric System Revenue Bonds, Series A were issued to prepay and refund a portion of the City’s outstanding 2008 A Electric Systems Certificates of Participation Bonds and pay cost of issuance of the 2017 bonds.

The payments are payable from operating revenues of the Electric Utility Fund. The 2017 bonds are special obligation of the City payable solely from and secured by a pledge of and lien on net revenues of the electric system and all monies on deposit in the Electric Revenue Fund of the City. 2015 Electric System Revenue Bonds
The
2018 Electric System Revenue Bonds, Series A were issued to finance the cost of design, acquisition and construction of new administrative building for the Electric Ut ility of the City and to refinance the 2005 Electric Certificates of Participation Bonds, which were used to provide funds to finance costs of acquisition and construction of certain additions, betterments and improvements to the City’ s electric system. These payments are payable from operating revenues of the Electric Utility Fund.

Leases
The leases are contracts that convey control of the right to use another entity’s nonfinancial asset as specified in the contract for a period of time in exchange or exchange-like transaction. The City primarily leases vehicles, parking lots, and solar trashcans.

Subscription Based Information Technology Arrangements (SBITA’s) SBITA’
s are subscription-based contracts that convey the contro l of the right to use vendor-provided information technology software, which provides governments with access to vendors’ IT software and associated tangible capital assets for subscription payments without granting government pe rpetual license or title to the IT software and associated tangible capital assets.

Packet Pg. 650
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

98 Note 10 – Pledged Revenue

Revenue Pledged
Borrowing
Fund/Entity Bond/Loan Use of Funds
Y ear of Loan or
Y ear Repayments
and/or Interest
Payments Began
Original
Issue/Loan
Am ount
Net Revenues Wastewater
Utility
Bond Refund prior debt
issues. (SRF Loan)
2020 52,420,000
Net Revenues Plus
Res erves
Electric Utility Bond Refund prior debt 2015 37,955,000 Net Revenues Plus
Res erves
Electric Utility Bond Refund prior debt 2017 55,785,000 Net Revenues Plus
Res erves
Electric Utility Bond Refund prior debt 2018 39,510,000

Packet Pg. 651
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024
99 Note 10 – Pledged Revenue (Continued)
Payments
Am ortized
Thru
Estim ated % of
Pledged
Revenue
Required for
Debt Service
Estimated % of
Pledged
Revenue Plus
Reserves
Required for
Debt Service
Rem aining
Principal &
Interest
Current Year
Principal &
Interest Paid
Current Y ear
Pledged
Revenue
Available
Res erve
Balance
2036 32% 32% 43,271,000 5,604,500 17,664,250 -
2035 13% 4% 36,053,875 3,604,520 26,988,475 59,881,615 2030 24% 7% 38,832,000 6,472,500 26,988,475 59,881,615 2030 16% 5% 25,332,000 4,221,500 26,988,475 59,881,615 Packet Pg. 652
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

100
Note 11 – Compensated Absences

The compensated absences liability will be paid from the General Fund, Housing Authority, Community Development, Airports, Electric Utility, Water Utility, Wastewater Utility, Solid Waste Utility, Storm Drainage Utility, Equipment Fund, Information Systems, General Support Services, Risk Management and Municipal Utility Support.

The City’s changes in compensated absences for the year ended June 30, 2024 were as follows:

Balance Balance Due within Due in More
July 1, 2023 Additions Deletions June 30, 2024 One Year Than One Yea r Governmental activities 14,386,965$ 10,071,291 $ (8,462,635) $ 15,995,621 $ 5,826,489 $ 10,169,132 $ Business-type activities 10,362,133 6,945,002 (6,044,899) 11,262,236 3,587,921 7,674,315 Total 24,749,098 $ 17,016,293 $ (14,507,534) $ 27,257,857 $ 9,414,410 $ 17,843,447 $

Note 12 – Self-Insurance

The City administers self-insurance programs for general liabil ity and workers’ compensation. These programs are accounted for in the Risk Management Fund. Liability for each claim is estimated on a case-by-case basis for all pending claims. There has been no significant reduction in any of the insurance coverages from the prior year. Costs in the City’s Risk Management Fund have not exceeded charges to the various funds of the City and its component units. Settled claims resulting from these risks have not exceeded co-insurance plan coverage or commercial insurance coverage in any of the past three fiscal years. The City is also self-insured for health benefits and is a member of CSAC Excess Insurance Authority which administers the health benefits program.

Employee Health Insurance - The City is part of the California Public Entity Public Insu rance Authority, a joint powers authority. The Risk Ma nagement Fund recognizes revenue from fund charges and accounts for actual expenditures. Funds determined to be at risk are charged estim ated claims expense based on salary. The interfund charges are reported as an expense or expenditure in the at risk fund. The estimated liability for pending and incurred but not reported employee health insurance claims relating to July 1, 2023 and prior at June 30, 2024, has been included as an accrued liability in the risk management internal service fund.

Workers’ Compensation Insurance is administered as a co-insurance plan. The City is self-insu red up to $750,000 with an insurance company co-insuring claims from $750,001 to $ 50,000,000. Funds determined to be at risk are charged a percentage of the total estimated insurance and claim expense. Percentages are based upon loss experience and salary costs. The interfund charges are reported as an exp ense or expenditure in the fund at risk. The estimated liability for pending and incurred but not reported claims at June 30, 2024, has been included in the Risk Management Fund’s claims payable amount as of June 30, 2024.

General Liability Insurance is self-administered and is self-insured up to $750,000. Any claims from $750,001 to $40,000,000 are administered through a governmental pooling joi nt powers authority, California Joint Powers Risk Management Authority. The Ris k Management Fund recognizes reve nue from fund charges and accounts for actual expenditures. Funds determined to be at risk are charged a per centage of the total estimated insurance and claim expense. Percentages are based upon loss experience and salary. The interfund charges are reported as an expense or expenditure in the funds at risk. Incurred but not reported cl aims liability has been included in the claims payable amount as of June 30, 2024.

Packet Pg. 653
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

101
Note 12 – Self-Insurance (Continued)

Property Insurance is administered as a co-insurance plan. The City is self-insured for claims up to $250,000 for all Risk and $500,000 for Wildfire. An insurance company co-insure s claims over $250,000 for all Risk and $500,000 for Wildfire. Additionally, the City has acquired coverage for the Redding Power Plant up to $100,000,000 with various sub-limits and deductibles for different types of losses. The Risk Management Fund recognizes revenue from fund charges and accounts for actual expenditures. Funds determined to be at risk are charged a percentage of the total estimated insurance and claim e xpense. Percentages are based u pon loss experience and salary costs. The interfund charges are reported as an expense or expenditure in the funds at risk. Incurred but not reported claims liability has been included in the claims payable amount as of June 30, 2024.

The following is a reconciliation of changes in claims liability amounts for fiscal years ended June 30, 2024:

Claims Claims
For the Y ears Payable Claim s Claim s Payable Due within Due in More Ended June 30, July 1, Incurred Paym ents June 30, One Y ear Than One Y ear Workers' Compensation
2022 13,554,200 2,784,524 (3,053,554) 13,285,170 4,567,826 8,717,344 2023 13,285,170 2,918,791 (3,316,091) 12,887,870 4,614,008 8,273,862 2024 12,887,870 3,188,576 (2,585,236) 13,491,210 3,590,830 9,900,380 General Liab ility
2022 296,920 2,479,008 (1,251,548) 4,189,380 2,400,823 1,788,557 2023 4,189,380 2,972,395 (1,645,155) 5,516,620 3,495,427 2,021,193 2024 5,516,620 2,038,611 (2,536,901) 5,018,330 1,312,760 3,705,570 Health and Dental
2022 99,090 25,573,792 (25,490,492) 182,390 182,390 - 2023 182,390 26,676,115 (26,745,755) 112,750 112,750 - 2024 112,750 31,902,144 (31,881,994) 132,900 132,900 - Total
2022 13,950,210 30,837,324 (29,795,594) 17,656,940 7,151,039 10,505,901 2023 17,656,940 32,567,301 (31,707,001) 18,517,240 8,222,185 10,295,055 2024 18,517,240 37,129,331 (37,004,131) 18,642,440 5,036,490 13,605,950

Note 13 – Individual Fund Disclosures

The following fund reported a deficit fund balance as of June 30, 2024:

Equipment Fund – The deficit of $3,021,116 in this fund resulted from the Cit y funding Internal Service Funds on a cash flow basis. Until the City funds the Other Post Empl oyment Benefit (OPEB) and the pension liability, this fund will continue to have a deficit balance.

General Support Services Fund – The deficit of $3,572,954 in this fund resulted from the Cit y funding Internal Service Funds on a cash flow basis. Until the City funds the O ther Post Employment Benefit (OPEB) and the pension liability, this fund will continue to have a deficit balance.

Packet Pg. 654
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

102
Note 13 – Individual Fund Disclosures (Continued)

Risk Management Fund – The deficit of $4,992,478 in this fund resulted from the City funding Internal Service Funds on a cash flow basis. Until the City funds the Other Pos t Employment Benefit (OPEB) and the pension liability, this fund will continue to have a deficit balance.

Municipal Utilities Support Fund – The deficit of $3,987,660 in this fund resulted from the City funding Internal Service Funds on a cash flow basis. Until the City funds the O ther Post Employment Benefit (OPEB) and the pension liability, this fund will continue to have a deficit balance.

Parking Fund – The deficit of $357,495 in this fund arose from operational losses which have been covered by the General Fund. This project is being financed by parking meter funds, parking fines and property tax increment payments. This deficit will take a number of years to eliminate.

Continuum of Care Fund – The deficit of $46,375 in this fund arose from operational l osses which have been covered by the General Fund. The deficit is due to the GASB 31 adjustment which is not included in the unearned revenue calculation.

Note 14 – Joint Ventures

The City participates in the following five joint ventures:

 M-S-R Public Power Agency
 M-S-R Energy Authority
 Transmission Agency of Northern California
 Balancing Authority of Northern California
 Modesto Irrigation District Financing Authority

A. M-S-R Public Power Agency

M-S-R Public Power Agency (the Power Agency) was formed in 1980 by the Modesto Irrigation District (MID) and the Cities of Santa Clara and Redding, California, pursuant to Section 6500, et seq., of the California Government Code. The Agency w as formed to conduct research and exploration for energy sources to provide additional electric power for the electric distribution systems of its members.

The Agency is governed by a Comm ission which consists of one me mber from each of the Power Agency’s members. For action, the Commission must have a quorum (minimu m of two members) present, and there must be a unanimous vote of all Commissioners present. The Treasurer of the Power Agency is designated by the Joint Powers Agreement to be the Treasurer/Controller of MID. The se lection of other management positions is made by the Commission from the personnel of its members. These fun ctions are performed without compensation to the members.

The members’ rights, property, income, and expense-sharing rati o in most all Power Agency activities prior to April 2018 are as follows: Modesto Irrigation District - 50%, City of Santa Clara - 35%, and City of Redding - 15%. The debt service through 2024, declining on-going administrative activities and other remaining obligations and costs associated with the San Juan Power Plant (described below), will remain at the 50% - 35% - 15% ratio.

Packet Pg. 655
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

103
Note 14 – Joint Ventures (Continued)

A. M-S-R Public Power Agency (Continued)

The majority of activities are related to renewables (Big Horn Wind energy project described below).

Coordinating, regulatory, and compliance services costs will be shared as follows: Modesto Irrigation District – 40%, City of Santa Clara – 40%, and City of Redding – 20%. Renewable administrative services, electric product, delivery and environmental attribute rights, benefits and costs will be shared by contracted participation ratios as described below.

The activities of M-S-R consist of a previous 28.8% ownership i nterest in a 498-megawatt coal-fire electricity generating plant located in New Mexico (the “San Juan” plant). The San Juan plant began commercial operation in 1982 and had been owned jointly by the Public Service Company of New Mexico (38.5%), M-S-R (28.8%), and four other municipal power entities (32.7%).

The owners of the San Juan Generation Station approved an owner ship restructuring of the San Juan Generation Station effective December 31, 2017 under which M-S-R’s (and th ereby the City’s) interest in the station and its generation will be transferred to the remaining owners. Defini tive agreements for the proposed ownership restructuring of the San Juan Generation Station have been exec uted by all nine San Juan Generation Station owners and the Public Service Company of New Mexico Resources (PNMR).

With the ownership restructuring of the San Juan Generation Station, M-S-R Public Power Agency sold its interest of the Southwest Transmission on May 25, 2016. Proceeds of the sale of the Southwest Transmission Project assets were applied primarily to the defeasance of a portion of M-S-R Public Power Agency’s outstanding revenue bonds, and to fund certain deposits for future payments to the plant decommissioning trust fund, and to the mine reclamation trust fund established under the agreements relatin g to the ownership restructuring of the San Juan Generation Station. At this time, M-S-R Public Power Agency ha s no ongoing or regular cash called expenses with regard to this divested asset other than for administrativ e activities and existing bonds expired in early FY 2023.

Additionally, in 2005, M-S-R entered into a 20-year power purch ase agreement (PPA) with PPM Energy, Inc.— now known as Avangrid Renewables, LLC (Avangrid—formerly Iberdr ola Renewables) to procure 100% of the output from the Big Horn Wind Energy facility located near the town of Bickleton in Klickitat County, Washington.

The project began commercial operation in October of 2006. The facility is interconnected through an 11 mile transmission line with the Bonneville Power Administration’s Spring Creek Substation. Redding receives a 35% share of the 199.5 MW project, while Santa Clara and Modesto receive 52.5% and 12.5% respectively. The power purchase agreement extends 5 years to 2031 unless Avangrid repowers the project and notifies Redding by October 2025. M-S-R Public Power Agency members have first-refusal rights.

In addition to the procurement of energy from the Big Horn Wind Energy facility, the M-S-R Public Power Agency has also signed an agreement with Avangrid to procure shaping and firming services for the output of the Big Horn facility. Through this agreement, Avangrid receives 100% of th e output from the Big Horn facility as generated, and delivers such energy to M-S-R at the California-Oregon Bord er pursuant to firm pre-established delivery schedules.

Packet Pg. 656
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

104
Note 14 – Joint Ventures (Continued)

A. M-S-R Public Power Agency (Continued)

Summary audited financial inform ation of the M-S-R Public Power Agency as of and for the year ended December 31, 2023 is as follows (in thousands):

Total revenues 46,456 $
Total assets and deferred outflows 62,466$ Total expenses (44,800) Total liabilities and deferred inflows 21,539 Net income 1,656 Total members' deficit 40,927 Members' deficit, January 1, 2023 39,271 Total liabilities and members' deficit 62,466$ Members' deficit, December 31, 2023 40,927$

The debt of the Power Agency is comprised entirely of revenue bonds totaling $0. The agency made its last payment on the revenue bonds in 2022. These bonds are secured by a pledge and assignment of the net electric revenues of the Power Agency and are supported by take-and-pay commitments of the participants.

On June 13, 2018, bonds in the amount of $98,850,000, the 2018R bonds, were issued with an average interest rate of 4.71% to refund; $88,000,000 of the outstanding 2008L bonds with an average interest rate of 5.00%, and $30,595,000 and $14,685,000 of the outstanding variable interest rate 2008M and 2008N bonds, respectively. The net proceeds of the 2018R bonds plus $33,257,000 of restricted funds on hand were used to prepay the outstanding debt service requirements on the old bonds.

The cash flow requirements on the old bonds prior to the curren t refunding was $150,475,000 from 2018 through 2022. The cash flow requirements on the new bonds are $110,992,000 from 2018 through 2022. The current refund resulted in an economic gain of $5,147,000.

The City utilizes the equity method of accounting for M-S-R Pub lic Power Agency. The City has invested $17.4 million in this joint venture. Operating profits have caused t he City to have equity in the Power Agency of $5.9 million at December 31, 2023. Under the joint exercise of powe r agreement, which formed M-S-R, the City is responsible for funding up to 15% of M-S-R’s operating costs, to the extent such funding is necessary. During the year ended June 30, 2024, the City made no contributions to fund its share of prior operating deficits. If there were such contributions, they would be included in operating expenses.

B. M-S-R Energy Authority

The Modesto Irrigation District, the City of Santa Clara, and the City of Redding formed M-S-R Energy Authority for the principal purpose to acquire, construct, maintain, operate and finance projects for the benefit of any one or more of the Members. On September 10, 2009, the Authority ente red into a series of thirty-year prepaid gas contracts with Citigroup Energy, Inc., which are financed by no n-recourse revenue bonds. The M-S-R Energy Authority also entered into matching Natural Gas Supply Agreeme nts (“Supply Agreements”) whereby each member is obligated to purchase the natural gas from the Authority at a discount from the Index Price. The Supply Agreements will continue in eff ect until September 30, 2039, un less terminated earlier due to certain defaults, as set forth therein, or the termination of the matching prepaid g as contract. If the M-S-R Energy Authority fails on any day to deliver the quantity of natural gas required to be delivered pursuant to a Supply Agreement, the member will have no obligation for any of the natural gas supply that was not delivered as a result of such delivery default.

Packet Pg. 657
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

105
Note 14 – Joint Ventures (Continued)

B. M-S-R Energy Authority (Continued)

The equity of the M-S-R Energy Authority is split between the m embers based on the revenues and expenses applicable to each individual member’s Supply Agreement. Reddi ng’s equity in the M-S-R Energy Authority’s net losses exceeds its investment and, therefore, the equity me thod of accounting has been suspended. As of December 31, 2022, the City’s unrecognized share of member’s de ficit of the M-S-R Energy Authority was $118,408,933.

The long-term debt of the M-S-R Energy Authority totaled $868,9 35,000 at December 31, 2023. The M-S-R Energy Authority did not make any principal payments in 2023.

Summarized financial information of M-S-R Energy Authority as of and for the year ended December 31, 2023, is as follows (in thousands):

Total assets and deferred outflows 872,961 $
Total liabilities and deferred inflows 872,961$
Total net position - $
Total liabilities and net position 872,961 $
Net increase (decrease) in net position - $

C. Transmission Agency of Northern California

The Transmission Agency of Northern California (TANC) is a join t powers agency organized for the principal purpose to provide electric transmission or other facilities fo r the use of its members. The City has an 8.41% ownership interest in TANC equa ting to a $8,114,485 member’s eq uity balance at June 30, 2024. The first transmission construction project undertaken by TANC was the de velopment of the California-Oregon Transmission Project (COTP). The project is a 339 mile long, 500 kilovolt alternating current transmission project between southern Oregon and central California. In 2009, TANC purchased an additional 121 megawatts (MW) of COTP transfer capability from the City of Vernon. TANC’s ne w ownership share of COTP transfer capability is 1367 MW and TANC pays 87% of the operating costs. The City’s share of the project is 115 MW.

From Pacific Gas and Electric C ompany (PG&E), TANC also receive s 300 MW of bi-directional transmission service over PG&E’s system between the Tesla and Midway Substat ions. The City’s share of this South of Tesla agreement is 10.33% at June 30, 2024.

The debt of the Transmission Agency of Northern California is c omprised entirely of revenue bonds totaling $ 159,565,000. These bonds are secured by a pledge and assignment of the net electric revenues of the Agency and are supported by take-and-pay commitments of the participants.

Investment in JPA $ 8,114,485

Summarized financial information of TANC as of and for the year ended June 30, 2024, is as follows (in thousands):

Total assets and deferred outflows 402,509 $
Total liabilities and deferred inflows 302,430
Total net position 100,079
Total liabilities and net position 402,509 $
Net increase (decrease) in net position 5,777$

Packet Pg. 658
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

106
Note 14 – Joint Ventures (Continued)

D. Balancing Authority of Northern California

The Balancing Authority of Northern California (BANC) is a join t powers agency consisting of the Sacramento Municipal Utility district (SMUD), Modesto Irrigation District (MID), Roseville Electric and City of Redding-Electric Utility (REU) as its founding members as was f ormed in 2009. Subsequent to its formation, Trinity Public Utilities District (TPUD) and Shasta Lake Public Utility District (SLPUD) have joined as new members. REU participates in BANC through the Western sub-balancing authority. BANC assumed the balancing authority responsibilities on May 1, 2011, from SMUD that inclu de the matching of generation to load and coordinating system operations with neighboring Balancing Autho rities. The Central Valley Project (CVP) generation, owned by the Bureau of Reclamation and Western Area Power Administration’s transmission facilities along with the 500 kV California Oregon Transmission Project (COTP), are included among other resources within the BANC footprint. BANC members contract for about 40 percent of the CVP hydroelectric resource. The COTP is jointly owned by several parties including WAPA and BANC members via the Transmission Agency of Northern California (TANC).

BANC provides its members an ownership voice in all balancing authority decisions consistent with the principle of maximizing consumer value. It also provides members a unifi ed voice and representation in topics pertaining to Balancing Area matters. The structure provides flexibility to expand potential cost-saving opportunities by sharing future facility costs and clarifies roles and responsib ilities of the members regarding reliability standard compliance.

The member’s rights and expense-sharing is based on the partici pation percentages in most BANC activities.

BANC member’s participation percentages are based on the member ’s retail sales and stands at 69.2%, 16.9%,

7.7%, 4.9%, and 1.3% for SMUD, MID, Roseville, REU, and Shasta Lake respectively. These participation percentages can be updated as the need requires.

Summarized financial information of BANC as of and for the year ended December 31, 2023, is as follows (in thousands):

Total current assets 8,092,601 $
Total current liabilities 8,092,601
Total net position -
Total liabilities and net position 8,092,601 $
Net increase (decrease) in net position - $

Complete separate financial statements for each of the joint ventures in which the City participates may be obtained from the City of Redding Finance Department, 777 Cypress Avenue, Redding, California 96001.

Packet Pg. 659
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

107
Note 14 – Joint Ventures (Continued)

E. Modesto Irrigation District Financing Authority

The Modesto Irrigation District Financing Authority (MIDFA) is a joint powers agency consisting of the Modesto Irrigation District (District) and the City of Redding (City) formed July 1, 1989, pursuant to Article 4 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “Marks-Roos Local Bond Pooling Act of 1985”). Which authorizes and empowers the Authority to enter into contracts to assist the District and the City in financing public capital improvements, working capital, liability, and other insurance needs, or projects whenever there are significant public benefits, as determined by the City or the District.

The agreement states “any obligations incurred or any bonds iss ued by the Authority shall not constitute general obligations of the Authority” and “In the event either the City or the District separately contract for specific debts, liabilities or obligations, the member of this Authority not pa rty to such contact shall not be liable or responsible for such debts, liabilities or obligations of the Authority.

The City has no debts, liabilities or obligations issued through the Authority.

On March 21, 2023 City Council adopted resolution 2023-025 which extended the agreement from August 2, 2019 to August 1, 2040.

F. Contingent Liability

Under the terms of the various joint venture agreements, the Ci ty is contingently liable for a portion of the long- term debt of the entities under take-or-pay agreements, letters of credit, guarantees or other similar agreements.

Based on the most recent audited financial statements of the individual joint ventures, the City is contingently liable for long-term debt as follows:

Total City of Redding's City of Redding's
Debt Participating Share Contingent liability
M-S-R (1):

Bonds - $ 15.000% - $
TANC (2)
Bonds (2016A) 159,565,000 8.3912% 13,389,418 TANC subtotal 159,565,000 13,389,418
Total 159,565,000 $ 13,389,418 $
(1) As of December 31, 2022
(2) As of June 30, 2023

In addition, the City would be, under certain conditions, liabl e t o p a y a p o r t i o n o f c o s t s a s s o c i a t e d w i t h t h e operations of the entities. Under certain circumstances, such as default or bankruptcy of the other participants, the City may also be liable to pay a portion of the debt of these joint ventures on behalf of those participants and seek reimbursement from those participants. These costs are not measurable at this time.

Packet Pg. 660
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

108
Note 15 – Postclosure Care Costs

State and federal laws and regulations required the City to place a final cover on Benton Landfill, which closed in 1990.

The City has completed the final cover and other closure items required. The City is also required under state and federal laws and regulations to perform certain maintenance and monitoring functions at the landfill site for the next 15 years. The remaining estimated liability for landfill postc losure care cost was $2,864,371 as of June 30, 2024, as shown in the table below. The t otal estimated cost of the land fill postclosure care is based on the amount that would be paid if all services required to monitor and maintain the la ndfill were acquired as of June 30, 2024. There is no requirement to currently fund this amount. The cost for postclosure care at the landfill and additional costs that might arise from changes in postclosure requirements (due to changes in technology or more rigorous environmental regulations, for example) will be covered by charges to Solid Waste rate payers.

Changes in postclosure care costs for the year ended June 30, 2024, were as follows:

Balance Balance Due within Due in More
July 1, 2023 Additions Deletions June 30, 2024 One Y ear Than One Y e ar Postclosure care liability 2,764,837$ 339,315 $ 239,781 $ 2,864,371 $ 185,700 $ 2,678,671$

Note 16 – Public Transportation Modernization Improvement and S ervice Enhancement Account (PTMISEA) Grant Information.

In November 2006, California Voters passed bond measure 1B, ena cting the Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006. Of the $19.925 billion of state general obligation bonds authorized, $3.6 billion was allocated to PTMISEA to be available to transit operators over a ten-year period. These funds may be used for transit rehabilitation, safet y or modernization improvement s, capital service enhancem ents or expansions, new capital projects, bus rapid transit improvements, or rolling st ock (buses and rail cars) procurement, rehabilitation or replacement.

In fiscal year 2023-24, RABA did not receive or accrue any addi tional PTMISEA funding. During the fiscal year RABA incurred $473,597 in qualifying expenditures and earned $16,773 in interest income. The June 30, 2024 ending balance in unspent PTMISEA funding was $521,889 and is included in the Unearned Revenue balance.

Packet Pg. 661
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

109
Note 17 – Retirement Plans

A. Summary

Aggregate Net Pension Liability

Aggregate Net pension liability is reported in the accompanying Statements of Net Position as follows:

Miscellaneous Safety PARS
Plan Plan Plan Total
Governmental Activities
(minus Internal Service Funds) 53,553,844 $ 155,334,059 $ 3,482,128 $ 212,370,031 $ Internal Service Funds:

Equipment 4,953,221 - 229,604 5,182,825 Information Systems 5,551,275 - 230,581 5,781,856 General Support Services 6,503,779 - 423,642 6,927,421 Risk M anagement 1,540,517 - 70,406 1,610,923 Municipal Utilities Support 6,533,987 - 687,868 7,221,855 Total Internal Service Funds 25,082,779 - 1,642,101 26,724,880 Total Governmental Activities 78,636,623 155,334,059 5,124,229 239,094,911 Enterprise funds:

Electric Utility 72,682,269 - 6,629,962 79,312,231 Water Utility 7,856,101 - 971,219 8,827,320 Wastewater Utility 10,564,148 - 806,881 11,371,029 Solid Waste Utility 17,377,011 - 1,258,210 18,635,221 Airport 2,285,739 - 1,047 2,286,786 Storm Drainage Utility 1,226,780 - 114,920 1,341,700 Total Enterprise funds 111,992,048 - 9,782,239 121,774,287 Total 190,628,671$ 155,334,059 $ 14,906,468 $ 360,869,198 $

Packet Pg. 662
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

110
Note 17 – Retirement Plans (Continued)

A. Summary (Continued)

Deferred Outflows of Resources

Deferred outflows of resources are reported in the accompanying Statements of Net Position as follows:

Pension Contributions Made after the Measurement Date
Miscellaneous Safety PARS
Plan Plan Plan Total
G overnmental Activities
(m inus Internal Service Funds) 5,527,616$ 15,375,993 $ 3,989,337 $ 24,892,946 $ Internal Service Funds:

Equipm ent 511,252 - 263,049 774,301 Information Systems 572,981 - 264,167 837,148 G eneral Support Services 671,294 - 485,351 1,156,645 Risk Management 159,005 - 80,661 239,666 Municipal Utilities Support 674,412 - 788,065 1,462,477 Total Internal Service Funds 2,588,944 - 1,881,293 4,470,237 Total Governmental Activities 8,116,560 15,375,993 5,870,630 29,363,183 Enterprise funds:

Electric Utility 7,501,976 - 7,595,688 15,097,664 Water Utility 810,876 - 1,112,688 1,923,564 Wastewater Utility 1,090,390 - 924,412 2,014,802 Solid Waste Utility 1,793,587 - 1,441,483 3,235,070 Airport 235,925 - 1,199 237,124 Storm Drainage Utility 126,623 - 131,660 258,283 Total Enterprise funds 11,559,377 - 11,207,130 22,766,507 Total 19,675,937$ 15,375,993 $ 17,077,760 $ 52,129,690 $

Packet Pg. 663
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

111
Note 17 – Retirement Plans (Continued)

A. Summary (Continued)
Deferred Outflows of Resources (Continued)
Difference between Projected and Actual Earnings of Pension Plan Investments Miscellaneous Safety PARS
Plan Plan Plan Total
G overnmental Activities
(m inus Internal Service Funds) 4,515,813$ 10,959,650 $ 985,609 $ 16,461,072$ Internal Service Funds:

Equipm ent 417,669 - 64,989 482,658 Information Systems 468,099 - 65,265 533,364 G eneral Support Services 548,418 - 119,911 668,329 Risk Management 129,901 - 19,929 149,830 Municipal Utilities Support 550,964 - 194,700 745,664 Total Internal Service Funds 2,115,051 - 464,794 2,579,845 Total Governmental Activities 6,630,864 10,959,650 1,450,403 19,040,917 Enterprise funds:

Electric Utility 6,128,776 - 1,876,598 8,005,374 Water Utility 662,449 - 274,902 937,351 Wastewater Utility 890,799 - 228,386 1,119,185 Solid Waste Utility 1,465,279 - 356,134 1,821,413 Airport 192,740 - 296 193,036 Storm Drainage Utility 103,446 - 32,528 135,974 Total Enterprise funds 9,443,489 - 2,768,844 12,212,333 Total 16,074,353$ 10,959,650 $ 4,219,247 $ 31,253,250 $ Changes of Assumptions
Miscellaneous Safety PARS
Plan Plan Plan Total
G overnmental Activities
(m inus Internal Service Funds) 1,884,543$ 7,307,742 $ - $ 9,192,285$ Internal Service Funds:

Equipm ent 174,302 - - 174,302 Information Systems 195,348 - - 195,348 G eneral Support Services 228,866 - - 228,866 Risk Management 54,210 - - 54,210 Municipal Utilities Support 229,929 - - 229,929 Total Internal Service Funds 882,655 - - 882,655 Total Governmental Activities 2,767,198 7,307,742 - 10,074,940 Enterprise funds:

Electric Utility 2,557,667 - - 2,557,667 Water Utility 276,454 - - 276,454 Wastewater Utility 371,749 - - 371,749 Solid Was te Utility 611,492 - - 611,492 Airport 80,434 - - 80,434 Storm Drainage Utility 43,170 - - 43,170 Total Enterprise funds 3,940,966 - - 3,940,966 Total 6,708,164$ 7,307,742 $ - $ 14,015,906$ Packet Pg. 664
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

112
Note 17 – Retirement Plans (Continued)

A. Summary (Continued)
Deferred Outflows of Resources (Continued)
Difference between Expected and Actual Experience
Miscellaneous Safety PARS
Plan Plan Plan Total
G overnmental Activities
(m inus Internal Service Funds) 2,593,026$ 10,179,795 $ 29,480 $ 12,802,301$ Internal Service Funds:

Equipm ent 239,827 - 1,944 241,771 Information Systems 268,787 - 1,952 270,739 G eneral Support Services 314,910 - 3,586 318,496 Risk Management 74,592 - 597 75,189 Municipal Utilities Support 316,371 - 5,824 322,195 Total Internal Service Funds 1,214,487 - 13,903 1,228,390 Total Governmental Activities 3,807,513 10,179,795 43,383 14,030,691 Enterprise funds:

Electric Utility 3,519,205 - 56,131 3,575,336 Water Utility 380,384 - 8,223 388,607 Wastewater Utility 511,505 - 6,831 518,336 Solid Was te Utility 841,376 - 10,652 852,028 Airport 110,674 - 9 110,683 Storm Drainage Utility 59,400 - 973 60,373 Total Enterprise funds 5,422,544 - 82,819 5,505,363 Total 9,230,057$ 10,179,795 $ 126,202 $ 19,536,054$ Total Deferred Outflows
Miscellaneous Safety PARS
Plan Plan Plan Total
G overnmental Activities
(m inus Internal Service Funds) 14,520,998$ 43,823,180 $ 5,004,426 $ 63,348,604 $ Internal Service Funds:

Equipm ent 1,343,050 - 329,982 1,673,032 Information Systems 1,505,215 - 331,384 1,836,599 G eneral Support Services 1,763,488 - 608,848 2,372,336 Risk Management 417,708 - 101,187 518,895 Municipal Utilities Support 1,771,676 - 988,589 2,760,265 Total Internal Service Funds 6,801,137 - 2,359,990 9,161,127 Total Governmental Activities 21,322,135 43,823,180 7,364,416 72,509,731 Enterprise funds:

Electric Utility 19,707,624 - 9,528,417 29,236,041 Water Utility 2,130,163 - 1,395,813 3,525,976 Wastewater Utility 2,864,443 - 1,159,629 4,024,072 Solid Waste Utility 4,711,734 - 1,808,269 6,520,003 Airport 619,773 - 1,504 621,277 Storm Drainage Utility 332,639 - 165,161 497,800 Total Enterprise funds 30,366,376 - 14,058,793 44,425,169 Total 51,688,511$ 43,823,180 $ 21,423,209 $ 116,934,900 $ Packet Pg. 665
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

113
Note 17 – Retirement Plans (Continued)

A. Summary (Continued)

Deferred Inflows of Resources

Deferred inflows of resources are reported in the accompanying Statements of Net Position as follows:

Changes in Assumptions
Miscellaneous Safety PARS
Plan Plan Plan Total
G overnmental Activities
(m inus Internal Service Funds) - $ - $ 19,256$ 19,256 $ Internal Service Funds:

Equipm ent - - 1,269 1,269 Information Systems - - 1,275 1,275 G eneral Support Services - - 2,343 2,343 Risk Management - - 389 389 Municipal Utilities Support - - 3,804 3,804 Total Internal Service Funds - - 9,080 9,080 Total Governmental Activities - - 28,336 28,336 Enterprise funds:

Electric Utility - - 36,665 36,665 Water Utility - - 5,372 5,372 Wastewater Utility - - 4,461 4,461 Solid Was te Utility - - 6,959 6,959 Airport - - 6 6 Storm Drainage Utility - - 636 636 Total Enterprise funds - - 54,099 54,099 Total -$ - $ 82,435$ 82,435 $

Packet Pg. 666
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

114
Note 17 – Retirement Plans (Continued)

A. Summary (Continued)
Deferred Inflows of Resources
Differences between Expected and Actual Experience
Miscellaneous Safety PARS
Plan Plan Plan Total
G overnmental Activities
(m inus Internal Service Funds) - $ 1,549,957$ - $ 1,549,957$ Internal Service Funds:

Equipm ent - - - - Information Systems - - - - G eneral Support Services - - - - Risk Management - - - - Municipal Utilities Support - - - - Total Internal Service Funds - - - - Total Governmental Activities - 1,549,957 - 1,549,957 Enterprise funds:

Electric Utility - - - - Water Utility - - - - Wastewater Utility - - - - Solid Was te Utility - - - - Airport - - - - Storm Drainage Utility - - - - Total Enterprise funds - - - - Total -$ 1,549,957$ - $ 1,549,957$ Total Pension-related Deferred Inflows
Miscellaneous Safety PARS
Plan Plan Plan Total
G overnmental Activities
(m inus Internal Service Funds) - $ 1,549,957$ 19,256 $ 1,569,213$ Internal Service Funds:

Equipm ent - - 1,269 1,269 Information Systems - - 1,275 1,275 G eneral Support Services - - 2,343 2,343 Risk Management - - 389 389 Municipal Utilities Support - - 3,804 3,804 Total Internal Service Funds - - 9,080 9,080 Total Governmental Activities - 1,549,957 28,336 1,578,293 Enterprise funds:

Electric Utility - - 36,665 36,665 Water Utility - - 5,372 5,372 Wastewater Utility - - 4,461 4,461 Solid Was te Utility - - 6,959 6,959 Airport - - 6 6 Storm Drainage Utility - - 636 636 Total Enterprise funds - - 54,099 54,099 Total -$ 1,549,957$ 82,435 $ 1,632,392$ Packet Pg. 667
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

115
Note 17 – Retirement Plans (Continued)

A. Summary (Continued)

Pension Expense

The total pension expense related to all retirement plans is $54,686,887. This is comprised of three parts CalPERS Miscellaneous Plan, CalPERS Safety Plan, and the PARS plan. The CalPERS Miscellaneous Plan pension expense was $29,596,848, the CalPERS Safety Plan pension expense was $21,698,893, and the PARS plan was $3,391,146.

Responsible Governmental Funds

The governmental funds responsible for liquidating pension liab ilities include; General Fund, Community Development and Parking.

B. CalPERS

General Information about the Pension Plans

All qualified permanent and probationary employees are eligible to participate in the City’s separate Miscellaneous and Safety (police and fire) Plans, agent multiple-employer def ined benefit pension plans administered by the California Public Employee’s Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plans are established by State statute and Local Government resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

General Information about the Pension Plans (continued)

In addition to the defined benefit pension plan through CalPERS , the City offers a defined benefit Retirement Enhancement Plan (REP) to the CalPERS Miscellaneous Plan through Public Agency Retirement Services (PARS).

This plan became effective on January 1, 2005. Information about the REP Plan through PARS will be discussed following the discussion of the CalPERS Plan.

Benefits Provided

CalPERS provides service retirement and disability benefits, an nual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service.

The death benefit is one of the following: the Basis Death Bene fit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments fo r each plan are applied as specified by the Public Employees’ Retirement Law.

Packet Pg. 668
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

116
Note 17 – Retirement Plans (Continued)

B. CalPERS (Continued)

The Plans’ provisions and benefits in effect at June 30, 2024, are summarized as follows:

Hire date
Prior to
January 1, 2013
On or after
January 1, 2013
Benefit formula 2% @ 55 2% @ 62
Benefit vesting schedule 5 years service 5 years service Benefit Paym ents m onthly for life m onthly for life
Retirement age 50-55 52-67
Monthly benefits, as a % of eligible com pensation 1.426% to 2.0% 1.0% to 2.5% Required em ployee contribution rates 7.00% 7.25%
Required em ployer contribution rates 9.96% 9.96%
M iscellaneous

Hire date
Prior to
Septem ber 8, 2012
September 8, 2012
to December 31,
2012
On or after
January 1, 2013
Benefit formula 3% @ 50 3% @ 55 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service 5 years s ervice Benefit Paym ents monthly for life m onthly for life m onthly for lif e Retirement age 50-55 50-55 52-57
Monthly benefits, as a % of eligible com pensation 3.0% 2.4% to 3. 0% 2.0% to 2.7% Required em ployee contribution rates 9.0% 9.0% 14.50%
Required employer contribution rates 21.554% 21.554% 23.89% Safety

a. Net Pension Liability

Employees Covered by Benefit Terms

At June 30, 2021 (actuarial valuation date), the following employees were covered by the benefit terms for each Plan:

Miscellaneous Safety
Inactive employees or beneficiaries currently receiving benefits9 1 4 324 Inactive employees entitled to but not yet receiving benefits 37 0 79 Active employees 663 206
Total 1,947 609

Packet Pg. 669
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

117
Note 17 – Retirement Plans (Continued)

B. CalPERS (Continued)

a. Net Pension Liability (Continued)

Contributions

Section 20814(c) of the California Public Employees’ Retirement L a w ( P E R L) r e q u i r e s t h at t h e em p l o y e r 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. The total plan contributions for both Plans are determined through CalPERS’ annual actuarial valuation process. T h e a c t u a r i a l l y d e t e r m i n e d r a t e i s t h e estimated amount necessary to finance the cost of benefits earn ed by employees during the year, with an additional amount to finance any unfunded accrued liability. T he City is required to contribute the difference between the actuarially determined rate and the contribution ra te of employees. Employer contribution rates may change if plan contracts are amended. It is the responsibi lity of the employer to make necessary accounting adjustments to reflect the impact due to any Employe r-Paid Member Contributions or situations where members are paying a portion of the employer contribution.

The City’s net pension liability for each Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of each of the Plans is measured as of June 30, 2022, using an annual actuarial valuation as of June 30, 2022 rolled forward t o June 30, 2023 using standard update procedures. A summary of principal assumptions and methods use d to determine the net pension liability is shown below.

Actuarial Assumptions

The total pension liabilities in the June 30, 2022 actuarial va luations were determined using the following actuarial assumptions:

Miscellaneous Safety
Valuation Date June 30, 2022 June 30, 2022
Measurement Date June 30, 2023 June 30, 2023
Actuarial Cos t Method
Actuarial Assumptions :

Discount Rate 6.90% 6.90%
Inflation 2.50% 2.50%
Payroll Growth 2.75% 2.75%
Projected Salary Increase
Investment Rate of Return
includes Inflation
Mortality Rate Table
1 Post Retirement Benefit Increase
1 The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Preretirement and Post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries.

For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from December 2017 that can be found on the CalPERS website.

Contract COLA up to 2.50% until Purchasing Power
Protection Allowance Floor on Purchasing Power
applies, 2.50% thereafter
Derived using CalPERS' Mem bership Data for all
Funds.

Entry-Age Norm al Cost
V aries by Entry Age and Service

7.00% Net of Pension Plan Investm ent Ex pense,

Packet Pg. 670
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

118
Note 17 – Retirement Plans (Continued)

B. CalPERS (Continued)

a. Net Pension Liability (Continued)

All other actuarial assumptions used in the June 30, 2022 valua tion were based on the results of an actuarial experience study for the period from 1997 to 2011, including up dates to salary increase, mortality and retirement rates. The Experience Study report can be obtained a t C a l P E R S ’ w e b s i t e u n d e r F o r m s a n d Publication.

Discount Rate
The discount rate used to measure the total pension liability w as 6.90 percent. To determine whether the municipal bond rate should be used in the calculation of a disc ount rate for each plan, CalPERS stress tested plans that would most likely result in a discount rate that wou ld be different from the actuarially assumed discount rate. The tests revealed the assets would not run out . Therefore, the current 6.90 percent discount rate is appropriate and the use of the municipal bond rate calculation is not deemed necessary. The long-term expected discount rate of 6.90 percent is applied to all plans in the Public Employees Retirement Fund. The stress test results are presented in a detailed report called “ GASB Crossover Testing Report” that can be obtained at CalPERS’ website under the GASB 68 section.

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

In determining the long-term expected rate of return, CalPERS s taff took into account both short-term and long-term market return expectations as well as the expected pe nsion fund (Public Employees’ Retirement Fund) cash flows. Such cash flows were developed assuming that both members and employers will make their required contributions on time and as scheduled in all fu ture years. Using historical returns of all the funds’ assets classes, expected compound (geometric returns wer e calculated over the short-term (first 10 years) and the long-term (11-60 years) using a building-block a pproach. Using the expected nominal returns for both short-term and long-term, the present value of benefit s was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above the rounded down to the nearest one quarter of one percent.

The table below reflects long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the d iscount rate and asset allocation. The target allocation shown was adopted by the Board effective on November 17, 2021.

Packet Pg. 671
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

119
Note 17 – Retirement Plans (Continued)

B. CalPERS (Continued)

a. Net Pension Liability (Continued)

Asset Class1
Current Target
Allocation Real Return 1,2
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%
2 Figures are based on the 2021 Asset Liability Management study. 1An expected inflation of 2.0% used for this period

b. Changes in Net Pension Liability

The changes in the Net Pension Liability for each Plan follow:

Miscellaneous Plan:

Total Pension
Liability
Increase
(Decrease) Plan
Fiduciary Net
Pension
Net Pension
Liability/ (Asset)
Balance at June 30, 2022 (M easurement date) 521,555,019$ 343,028,506 $ 178,526,513 $ Changes in the year:

Service costs 9,334,553 - 9,334,553 Interest on the total pension liability 35,983,188 - 35,983,188 Changes of benefit terms 650,322 - 650,322 Differences between actual and expected experience 10,088,251 - 10,088,251 Change in assum ptions - - - Plan to plan resource m ovem ent - - - Contributions - em ployer - 18,430,558 (18,430,558) Contribution - em ployee - 4,567,962 (4,567,962) Net investm ent incom e - 21,207,883 (21,207,883) Benefit paym ents, including refunds of em ployee
contributions (30,930,761) (30,930,761) - Adm inistrative ex pense - (252,247) 252,247 Other m iscellaneous incom e/(ex pense) - - - Net changes 25,125,553 13,023,395 12,102,158 Balance at June 30, 2023 (Measurement date) 546,680,572$ 356,051,901 $ 190,628,671 $

Packet Pg. 672
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

120
Note 17 – Retirement Plans (Continued)

B. CalPERS (Continued)

b. Changes in Net Pension Liability (Continued)

Safety Plan:

Total Pension
Liability
Increase
(Decrease) Plan
Fiduciary Net
Pension
Net Pension
Liability/ (Asset)
Balance at June 30, 2022 (M easurement date) 371,246,281$ 230,968,103 $ 140,278,178 $ Changes in the year:

Service costs 7,540,245 - 7,540,245 Interest on the total pension liability 26,093,991 - 26,093,991 Changes of benefit terms 155,404 - 155,404 Differences between actual and expected experience 12,924,945 - 12,924,945 Change in assum ptions - - - Plan to plan resource m ovem ent - - - Contributions - em ployer - 13,986,612 (13,986,612) Contribution - em ployee - 3,512,078 (3,512,078) Net investm ent incom e - 14,329,857 (14,329,857) Benefit paym ents, including refunds of em ployee
contributions (19,845,923) (19,845,923) - Adm inistrative ex pense - (169,843) 169,843 Other m iscellaneous incom e/(ex pense) - - - Net changes 26,868,662 11,812,781 15,055,881 Balance at June 30, 2023 (Measurement date) 398,114,943$ 242,780,884 $ 155,334,059 $

Sensitivity of the Net Pension Liability to Changes in the Discount Rate

The following presents the net pension liability of the Plan as of the measurement date, calculated using the discount rate of 6.90 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (5.90 percent) o r 1 percentage-point higher (7.90 percent) than the current rate:

Miscellaneous Safety
1% Decrease 5.90% 5.90%
Net pension liability 257,998,531$ 210,247,611 $
Current discount rate 6.90% 6.90%
Net pension liability 190,628,671$ 155,334,059 $
1% Increase 7.90% 7.90%
Net pension liability 134,527,226$ 110,440,375 $

Packet Pg. 673
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

121
Note 17 – Retirement Plans (Continued)

B. CalPERS (Continued)

b. Changes in Net Pension Liability (Continued)

Pension Plan Fiduciary Net Position

The plan fiduciary net position disclosed in the City’s GASB 68 accounting valuation report may differ from the plan assets report in the funding actuarial valuation repor t due to several reasons. First, for the account valuations, CalPERS must keep items such as deficiency reserves, fiduciary self-insurance and OPEB expense included as assets. These amounts are excluded for rate setting purposes in the funding actuarial valuation. In addition, differences may result from early Annual Comprehensiv e Financial Report closing and final reconciled reserves.

c. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions

For the year ended June 30, 2024, the City recognized pension expense of $51,295,741, which is comprised of $29,596,848 of pension expense re lated to the CalPERS Miscellan eous plan and $21,698,893 of pension expense related to the CalPERS Safety plan. At June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Miscellaneous Plan:

Deferred Outflows
of Resources
Deferred Inflows of
Resources
Pension contributions made after measurement date 19,675,937$ - $ Changes of Assumptions 6,708,164 -
Difference between expected and actual experience 9,230,057 - Net difference between projected and actual earnings
on pension plan investments 16,074,353 - Total 51,688,511 $ - $
Safety Plan:

Deferred Outflows
of Resources
Deferred Inflows of
Resources
Pension contributions made after measurement date 15,375,993$ - $ Changes of Assumptions 7,307,742 -
Difference between expected and actual experience 10,179,795 (1,549,957) Net difference between projected and actual earnings
on pension plan investments 10,959,650 - Total 43,823,180 $ (1,549,957) $

Packet Pg. 674
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

122
Note 17 – Retirement Plans (Continued)

B. CalPERS (Continued)

c. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)

The amounts above are net of outflow and inflows recognized in the 2022-23 measurement period expense.

The expected average remaining service lifetime (“EARSL”) is ca lculated by dividing the total future service years by the total number of plan participants (active, inactive, and retired). The EARSL for the miscellaneous plan and safety plan for the 2022-23 measurement is 3.8 and 4.7 years, which was obtained by dividing the total service years of 7,407 and 2,868 (the sum of remaining se rvice lifetimes of the active employees) by 1,947 and 609 (the total number of participants: active, inactive and retired), respectively.

The $19,675,937 and $15,375,993 reported as deferred outflows of resources related to pension resulting from the City’s contributions subsequent to the measurement date dur ing the fiscal year ended June 30, 2024 will be recognized as a reduction of the net pension liability in th e year ended June 30, 2025. Other amounts reported as deferred outflow and deferred inflows of resources related to pensions will be recognized in future pension expense as follows:

Y ear Ended June 30 Miscellaneous Plan Safety Plan
2024 10,553,955$ 6,859,812 $
2025 7,559,978 6,193,787
2026 13,472,103 11,617,489
2027 426,538 2,226,142
2028 - -
Thereafter - -
Total 32,012,574$ 26,897,230 $

d. Payable to the Pension Plan

At June 30, 2024, The City reported a payable of $ -0- for the outstanding amount of contributions to the pension plan required for the year ended June 30, 2024.

Packet Pg. 675
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

123
Note 17 – Retirement Plans (Continued)

C. PARS

a. General Information about the Pension Plans

Effective January 1, 2005, the City adopted a defined benefit p lan administered through the Public Agency Retirement System (PARS) to pr ovide supplemental retirement ben efits to eligible employees in addition to the benefits the employees receive from CalPERS. The plan is an agent multiple-employer defined benefit plan. The financial statement is issued as part of an audited t rust Financial Statement and is available thru the State Controller website and filed on an annual basis. Employee groups who are eligible to participate in the Retirement Enhancement Plan (REP) are as follows: Tier I – Exec utive Management Employees, Tier II – Redding Independent Employees’ Organization (RIEO) represented employees, Tier III Redding Police Officers’ Association (RPOA) - Miscellaneous Uni t employees, Tier IV International Brotherhood of Electrical Workers (IBEW) – Maintenance unit rep resented employees, Tier V International Brotherhood of electrical Workers (IBEW) – Electric represented employees, and Tier VI United Public Employees of California represented employees. The Plan is now closed to new participants.

Benefits Provided

The REP plan provides service retirement and disability benefit s, annual cost of living adjustments and death benefits to plan members and beneficiaries. Benefits are based on years of service credited service, equal to one year of full time employment. Members in Tiers I, III, IV, V and VI with five years of service with the City are eligible to retire at age 50. Members in Tier II with ten years of service with the City are eligible to retire at age 50. The death benefit is one of the following: the Basis Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of livin g adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

The Plans’ provisions and benefits in effect at June 30, 2024, are summarized as follows:

Tier I Tier II Tier III Tier IV Tier V Tier VI
Hire date 1/1/2005 thru
8/7/2011
1/1/2005 thru
12/31/2012
1/1/2005 thru
1/5/2011
1/1/2005 thru
1/5/2011
1/1/2005 thru
9/21/2011
1/1/2005 thru
9/21/2011
Benefit formula 2.7% @ 55 2.7% @ 55 2.5% @ 55 2.7% @ 55 2.7% @ 55 2.7 % @ 55 Benefit vesting
schedul e 5 years service 10 years servi ce 5 years servi ce 5 years s ervice 5 years service 5 years service Benefit paym ents m onthly for life m onthly for life m onthly for life monthly for life monthly for life monthly for life Retirement age 50-55 50-55 50-55 50-55 50-55 50-55
Monthly benefits
as a % of eligible
compensation 2.0% to 2.7% 2.0% to 2.7% 2.0% to 2.5% 2.0% to 2.7% 2. 0% to 2.7% 2.0% to 2.7% Required employee
contribution rates 2.70% 2.26% 1.71% 2.08% 2.08% 2.62%
Required employer
contribution rates 54.24% 45.38% 46.73% 41.64% 36.19% 46.58%

Packet Pg. 676
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

124
Note 17 – Retirement Plans (Continued)

C. PARS (Continued)

a. General Information about the Pension Plans (Continued)

Employees Covered

At July 1, 2022, the following employees were covered by the benefit terms for each Plan:

Tier I Tier II Tier III Tier IV Tier V Tier VI Total
Inactive employees or beneficiaries
currently receiving benefits 110 222 10 103 50 14 509 Inactive em ployees entitled to
but not yet receiving benefits 5 4 - 3 1 1 14 Active employees 38 79 2 48 22 8 197 Total 153 305 12 154 73 23 720

b. Net Pension Liability

The City’s total pension liability was determined by an actuari al valuation as of the valuation date, calculated based on the discount rate and actuarial assumptions below, and was then projected forward to the measurement date. There have been no significant changes between the valuation date and the fiscal year end. As summary of principal assumptions and methods used to determine the net pension liability is shown below.

Actuarial Assumptions

The total pension liabilities in the June 30, 2022 actuarial va luation were determined using the following actuarial assumptions:

Valuation Date June 30, 2022
Measurement Date June 30, 2023
Actuarial Cost Method Entry-Age Normal
Actuari al Assum pti ons:

Discount Rate 7.00%
Inflation 2.30%
Projected Salary Increase G raded rates based on years of service s, 3.34% after 30 years of service.

Investment Rate of Return 7.00%
Mortality Rate Table Pre-retirement/Post-retirement: Consistent with Non- Industrial rates used to value the Miscellaneous
CalPERS Pension Plans after June 30, 2021

Packet Pg. 677
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

125
Note 17 – Retirement Plans (Continued)

C. PARS (Continued)

b. Net Pension Liability (Continued)

Discount Rate

The best-estimate range for the long-term expected rate of return is determined by adding expected inflation to expected long-term real returns and reflecting expected volatil ity and correlation. The capital market assumptions are per Milliman’s investment consulting practice as of June 30, 2024.

Asset Class Index
Target
Allocation
Long-Term
Ex pected
Arithm etic
Real Rate of
Return
Long-Term
Ex pected
G eometric
Real Rate of
Return
US Cash BAML 3-Mon Tbill 3.65% 94.00% 91.00%
US Core Fixed Income Barclays Aggregate 37.68% 2.52% 2.36% US Equity Market Russell 3000 46.92% 5.52% 3.82%
Foreign Developed Equity MSCI EAFE NR 6.82% 6.92% 5.12% Emerging Markets Equity MSCI EM NR 3.18% 9.34% 6.21%
US REITs FTSE NAREIT Equity REIT 1.75% 6.91% 4.72%
Assumed inflation - mean 2.31% 2.30%

1.45% 1.45%
Portfolio real mean return 4.46% 3.82%
Portfolio nom inal mean return 6.77% 6.68%
Portfolio standard deviation 10.85%

7.00%
Assumed inflation - standard deviation
Long-term expected rate of return

Packet Pg. 678
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

126
Note 17 – Retirement Plans (Continued)

C. PARS (Continued)

c. Changes in Net Pension Liability

The changes in the Net Pension Liability for the Plan follow:

PARS-REP Plan
Total Pension
Liability
Increase
(Decrease) Plan
Fiduciary Net
Pension
Net Pension
Liability/
(Asset)
Balance at July 1, 2022 (M easurement d ate) 93,145,586$ 70,205,340 $ 22,940,246 $ Changes in the year:

Service costs 796,513 - 796,513 Interest on the total pension liability 6,374,156 - 6,374,156 Changes of benefit terms - - - Effect of econom ic/dem ographic gains or losses - - - Differences between actual and ex pected ex perience - - - Change in assumptions - - - Contributions - em ployer - 8,911,917 (8,911,917) Contribution - employer (paid by member) - 455,876 (455,876) Net investm ent income - 6,042,441 (6,042,441) Adm i ni strative ex penses - (205,787) 205,787 Benefit paym ents, including refunds of em ployee
contributions
Net changes 1,306,035 9,339,813 (8,033,778) Balance at June 30, 2023 (Measurement date) 94,451,621$ 79,545,153 $ 14,906,468 $ (5,864,634) (5,864,634) -

Sensitivity Analysis

The following presents the net pension liability of the City of Redding Retirement Enhancement Plan, calculated using the discount rate of 7.0%, as well as what the Plan’s net pension liability would be if it were calculated using a discount rate that is 1 percentage point low er (6.0%) or 1 percentage point higher (8.0%) than the current rate.

1% Decrease

6.0%
Current
Discount Rate

7.0%
1% Increase

8.0%
Total pension liability 104,464,244$ 94,451,621 $ 85,925,157 $ Fiduciary net position 79,545,153 79,545,153 79,545,153 Net pension liability 24,919,091 14,906,468 6,380,004

Packet Pg. 679
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

127
Note 17 – Retirement Plans (Continued)

C. PARS (Continued)

c. Changes in Net Pension Liability (Continued)

Pension Plan Fiduciary Net Position

The plan fiduciary net position disclosed in the City’s GASB 68 accounting valuation report may differ from the plan assets report in the funding actuarial valuation repor t due to several reasons. First, for the account valuations, CalPERS must keep items such as deficiency reserves, fiduciary self-insurance and OPEB expense included as assets. These amounts are excluded for rate setting purposes in the funding actuarial valuation. In addition, differences may result from early Annual Comprehensiv e Financial Report closing and final reconciled reserves.

d. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions

For the year ended June 30, 2024, the City recognized pension e xpense of $3,391,146. At June 30, 2024, the City reported deferred outflows of resources and deferred inflo ws of resources related to pensions from the following sources:

Deferred Outflows
of Resources
Deferred Inflows of
Res ources
Pension contributions made after measurement date 17,077,760$ - $ C hanges of Assum pti ons - (82,435) Difference between ex pected and actual ex perience 126,202 - Net difference between projected and actual earnings on pension plan investments 4,219,247 -
Total 21,423,209 $ (82,435) $

The amounts above are net of outflow and inflows recognized in the 2022-23 measurement period expense.

The expected average remaining service lifetime (“EARSL”) is ca lculated by dividing the total future service years by the total number of plan participants (active, inactiv e, and retired). The EARSL for the PARS plan for the 2022-23 measurement is 2.1 years, which was obtained by dividing the total service years of 1,523 (the sum of remaining service lifetimes of the active employees) by 727 (the total number of participants: active, inactive and retired).

Packet Pg. 680
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

128
Note 17 – Retirement Plans (Continued)

C. PARS (Continued)

d. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)

The $17,077,760 reported as deferred outflows of resources rela ted to pension resulting from the City’s contributions subsequent to the measurement date during the fiscal year ended June 30, 2024 will be recognized as a reduction of the net pension liability in the year ended June 30, 2025. Other amounts reported as deferred outflow and deferred inflows of resources related to pensions w ill be recognized in future pension expense as follows:

Y ear Ended June 30 Amount
2024 1,048,634$
2025 678,810
2026 2,738,493
2027 (202,923)
Thereafter -
Total 4,263,014$

e. Payable to the Pension Plan

At June 30, 2024, The City reported a payable of $ -0- for the outstanding amount of contributions to the pension plan required for the year ended June 30, 2024.

Packet Pg. 681
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

129
Note 18 – Other Postemployment Healthcare Benefits

The following is a summary of Net other postemployment benefits (“OPEB”) liabilities and related deferred outflows and inflows of resources as of June 30, 2024:

Aggregate Net OPEB Liability

Aggregate Net OPEB Liability is reported in the accompanying Statements of Net Position as follows:

Governmental Activities
(m inus Internal Service Funds) 39,706,173$
Internal Service Funds:

Equipm ent 1,462,816
Information Systems 1,645,917
General Support Services 1,825,998
Risk Management 455,430
Municipal Utilities Support 1,860,316
Total Internal Service Funds 7,250,477
Total Governmental Activities 46,956,650
Enterprise funds:

Electric Utility 20,796,229
Water Utility 2,224,103
Wastewater Utility 2,995,701
Solid Waste Utility 5,017,426
Airport 678,279
Storm Drainage Utility 324,423
Total Enterprise funds 32,036,161
Total 78,992,811$
OPEB

Packet Pg. 682
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

130
Note 18 – Other Postemployment Healthcare Benefits (Continued)

Deferred Outflows of Resources

Deferred outflows of resources are reported in the accompanying Statements of Net Position as follows:

OPEB Contributions made after the Measurement Date
G overnmental Activities
(minus Internal Service Funds) 2,167,545$
Internal Service Funds:

Equipment 79,855
Information Systems 89,850
General Support Services 99,681
Risk Management 24,862
Municipal Utilities Support 101,554
Total Internal Service Funds 395,802
Total Governmental Activities 2,563,347
Enterprise funds:

Electric Utility 1,135,258
Water Utility 121,413
Wastewater Utility 163,534
Solid Waste Utility 273,899
Airport 37,027
Storm Drainage Utility 17,710
Total Enterprise funds 1,748,841
Total 4,312,188$
OPEB

Difference between Projected and Actual Earnings on Pension Plan Investments G overnmental Activities
(minus Internal Service Funds) 1,058 $
Internal Service Funds:

Equipment 39
Information Systems 44
G eneral Support Services 48
Risk Management 12
Municipal Utilities Support 50
Total Internal Service Funds 193
Total G overnmental Activities 1,251
Enterprise funds:

Electric Utility 554
Water Utility 59
Wastewater Utility 81
Solid Waste Utility 133
Airport 18
Storm Drainage Utility 9
Total Enterprise funds 854
Total 2,105$
OPEB

Packet Pg. 683
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

131
Note 18 – Other Postemployment Healthcare Benefits (Continued)

Deferred Outflows of Resources (Continued)

Changes of Assumptions
G overnmental Activities
(minus Internal Service Funds) 4,783,700$
Internal Service Funds:

Equipment 176,236
Information Systems 198,296
General Support Services 219,992
Risk Management 54,869
Municipal Utilities Support 224,126
Total Internal Service Funds 873,519
Total Governmental Activities 5,657,219
Enterprise funds:

Electric Utility 2,505,478
Water Utility 267,954
Wastewater Utility 360,915
Solid Waste Utility 604,487
Airport 81,717
Storm Drainage Utility 39,086
Total Enterprise funds 3,859,637
Total 9,516,856$
OPEB

Packet Pg. 684
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

132
Note 18 – Other Postemployment Healthcare Benefits (Continued)

Deferred Outflows of Resources (Continued)

Differences between Expected and Actual Experience
G overnmental Activities
(minus Internal Service Funds) 13,449,552$
Internal Service Funds:

Equipment 495,494
Information Systems 557,517
General Support Services 618,515
Risk Management 154,267
Municipal Utilities Support 630,139
Total Internal Service Funds 2,455,932
Total Governmental Activities 15,905,484
Enterprise funds:

Electric Utility 7,044,242
Water Utility 753,363
Wastewater Utility 1,014,722
Solid Waste Utility 1,699,538
Airport 229,751
Storm Drainage Utility 109,890
Total Enterprise funds 10,851,506
Total 26,756,990$
OPEB

Total Deferred Outflows
G overnmental Activities
(minus Internal Service Funds) 20,401,856$
Internal Service Funds:

Equipment 751,624
Information Systems 845,707
General Support Services 938,235
Risk Management 234,010
Municipal Utilities Support 955,869
Total Internal Service Funds 3,725,445
Total Governmental Activities 24,127,301
Enterprise funds:

Electric Utility 10,685,532
Water Utility 1,142,789
Wastewater Utility 1,539,252
Solid Waste Utility 2,578,057
Airport 348,513
Storm Drainage Utility 166,695
Total Enterprise funds 16,460,838
Total 40,588,139$
OPEB

Packet Pg. 685
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

133
Note 18 – Other Postemployment Healthcare Benefits (Continued)

Deferred Inflows of Resources

Deferred Inflows of resources are reported in the accompanying Statements of Net Position as follows:

Changes in Assumptions
G overnmental Activities
(minus Internal Service Funds) 1,911,776$
Internal Service Funds:

Equipment 70,431
Information Systems 79,248
General Support Services 87,917
Risk Management 21,928
Municipal Utilities Support 89,570
Total Internal Service Funds 349,094
Total Governmental Activities 2,260,870
Enterprise funds:

Electric Utility 1,001,297
Water Utility 107,086
Wastewater Utility 144,237
Solid Waste Utility 241,578
Airport 32,656
Storm Drainage Utility 15,620
Total Enterprise funds 1,542,474
Total 3,803,344$
OPEB

Total Deferred Inflows
G overnmental Activities
(minus Internal Service Funds) 1,911,776$
Internal Service Funds:

Equipment 70,431
Information Systems 79,248
General Support Services 87,917
Risk Management 21,928
Municipal Utilities Support 89,570
Total Internal Service Funds 349,094
Total Governmental Activities 2,260,870
Enterprise funds:

Electric Utility 1,001,297
Water Utility 107,086
Wastewater Utility 144,237
Solid Waste Utility 241,578
Airport 32,656
Storm Drainage Utility 15,620
Total Enterprise funds 1,542,474
Total 3,803,344$
OPEB

Packet Pg. 686
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

134
Note 18 – Other Postemployment Healthcare Benefits (Continued)

Responsible Governmental Funds

The governmental funds responsible for liquidating OPEB liabilities include; General Fund, Community Development, and Parking.

General Information about the OPEB Plan

Plan Description
The City of Redding PARS Post-Retirement Health Care Plan (the “Plan”) is a single-employer defined benefit healthcare plan administered by Phase II Systems, dba Public Agency Retirement Services (PARS). The Plan provides medical and dental insurance benefits to eligible retirees and their spouses. The City Coun cil has the authority to establish and amend benefit provisions to the plan.

Funding Policy
The contribution requirements of plan members are established and may be amended by the City Council. The required contribution is based on projected pay-as-you-go financing requirements, with an additional amount to prefund benefits as determined annually by the City Council.

Employees Covered by Benefit Term

Inactive employees or beneficiaries currently receiving benefit s3 7 2 Inactive employees entitled to but not yet receiving benefits - Active em ployees 871
Total 1,243

Packet Pg. 687
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

135
Note 18 – Other Postemployment Healthcare Benefits (Continued)

Net OPEB Liability

The City’s net OPEB liability was measured as of June 30, 2023, and the actuarial valuation used to calculate the net OPEB liability was as of June 30, 2023.

Actuarial Assumptions

The total OPEB liability in the June 30, 2023 actuarial valuation was determined using the following actuarial assumptions:

Valuation Date June 30, 2023
Measurement Date June 30, 2023
Actuari al Assum pti ons:

Discount Rate 3.65% at June 30, 2023 Bond Buyer 20-bond Index

3.54% at June 30, 2022 Bond Buyer 20-bond Index
General Inflation 2.50%
Ex pected Net Long-Term Rate
of Return on Investm ents:

3.50% at June 30, 2023

3.50% at June 30, 2022
Mortality Rate Table CalPERS 2000-2019 Experience Study Mortality Improvement Mortality projected fully generational with Scale MP- 2021
Salary Increases 2.75%
Medical Trend Non-Medicare - 8.50% for 2025, decreasing to an ultimate rate of 3.45% in 2076
Medicare - 7.50% for 2025, decreasing to an ultimate
rate of 3.45% in 2076
Medical participation Medicare - 100% actives and retirees assumed to be eligible and will participate in Medicare
Healthcare participation for
future retirees Single coverage: 60% pre-65, 20% post-65 2-Party and family coverage - 75% pre-65, 50% post-65
Healthcare participation for
current retirees
30% for single and 70% for 2-party/family after age 65
for retirees currently under 65
100% for other retirees

Packet Pg. 688
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

136
Note 18 – Other Postemployment Healthcare Benefits (Continued)

Net OPEB Liability (Continued)

Changes in Net OPEB Liability

Total OPEB
Liability
Fiduciary Net
Position
Net OPEB
Liability
Balance at June 30, 2022 (Measurement Date) 51,617,397$ 52,505 $ 51,564,892$ Changes in the year:

Service costs 2,842,623 - 2,842,623 Interest on the total pension liability 1,874,402 - 1,874,402 Changes of benefit terms - - - Effect of economic/demographic gains or losses - - - Differences between actual and expected experience 19,953,859 - 19,953,859 Change in assumptions 5,780,385 - 5,780,385 Contributions - employer - 3,021,637 (3,021,637) Contributions - employee - - - Net investment income - 1,846 (1,846) Administrative expenses - (133) 133 Benefit payments, including refunds of employee
contributions
Net changes 27,429,632 1,713 27,427,919 Balance at June 30, 2023 (Measurement date) 79,047,029 $ 54,218 $ 78,992,811$ (3,021,637) (3,021,637) -

Sensitivity of the Net OPEB Liability to Changes in the Discount Rate

The following presents the net OPEB liability of the plan as of the measurement date, calculated using the discount rate of 3.54%, as well as what the net OPEB liability would be if it were calculated using a discount rate that is 1 percentage point lower (2.54%) or 1 percentage point higher (4.54%) than the current rate:

1% Decrease
(2.65%)
Current Rate
(3.65%)
1% Increase
(4.65%)
Net OPEB Liability 85,488,106$ 78,992,811 $ 73,029,887 $

Sensitivity of the Net OPEB Liability to Changes in the Healthcare cost Trend Rates

The following presents the net OPEB liability of the plan as of the measurement date, calculated using healthcare cost trend rates, as well as what the net OPEB liability would be if it were calculate using a trend that are one percentage point lower or one percentage higher than the current healthcare cost trend rates:

1% Decrease Current Trend 1% Increase
Net OPEB Liability 71,407,727$ 78,992,811 $ 87,814,352 $

Packet Pg. 689
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

137
Note 18 – Other Postemployment Healthcare Benefits (Continued)

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

For the year ended June 30, 2024, the City recognized OPEB expe nse of $11,439,659. At June 30, 2024, the City reported deferred outflows of r esources and deferred inflows of resources related to OPEB from the following sources:

Deferred Outflows
of Resources
Deferred Inflows of
Resources
OPEB contributions m ade after m easurem ent date 4,312,188$ - $ Changes of assum ptions 9,516,856 3,803,344 Difference between ex pected and actual ex perience 26,756,990 - Net difference between projected and actual earnings on OPEB plan investm ents 2,105 - Total 40,588,139 $ 3,803,344 $

The $4,312,188 reported as deferred outflows of resources related to pension resulting from the City’s contributions subsequent to the measurement date during the fiscal year ended June 30, 2024 will be recognized as a reduction of the net OPEB liability in the year ended June 30, 2025. Other a mounts reported as deferred outflow and deferred inflow of resources related to OPEB will be recognized in future OPEB expense as follows:

Y ear Ended June 30 Amount
2025 6,239,550$
2026 5,946,474
2027 4,626,856
2028 4,262,701
2029 4,072,072
Thereafter 7,324,954
Total 32,472,607$
Packet Pg. 690
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

138
Note 19 – Fund Balances

Fund balance as of June 30, 2024, consists of the following:

General Major Capital Community Other
Fund Project Fund Development Funds Total
Fund balances:

Nonspendable fund balance:

Prepaids and inventory 1,206,889 $ - $ 31,723$ 66,137 $ 1,304,749$ Contractually nonspendable 920,974 - - - 920,974 Total nonspendable 2,127,863 - 31,723 66,137 2,225,723 Restricted fund balance:

Fiscal agent reserves 1,395 - - - 1,395 Capital projects - 9,097,344 - - 9,097,344 Debt service - - - 318,174 318,174 Opioid Settlement 430,561 - - - 430,561 Special Revenue
Community development - - 69,910,047 - 69,910,047 Housing - - - 16,443,534 16,443,534 Landscape maintenance - - - 1,272,263 1,272,263 Library - - - 1,193,795 1,193,795 Local transportation - - - 11,287,477 11,287,477 Police asset seizure - - - 106,850 106,850 Total restricted 431,956 9,097,344 69,910,047 30,622,093 110,061,440 Assigned fund balance:

Operations and maintenance
Police 144,516 - - - 144,516 Fire 654,168 -
- - 654,168
Public works 367,005 - - - 367,005 Planning 123,371 - - - 123,371 Recreation and culture 100,092 - - - 100,092 General Government 852,267 - - - 852,267 Capital projects
Public works 3,028,392 - - - 3,028,392 Recreation and culture 73,342 - - - 73,342 General Government 101,261 - - - 101,261 Vehicles and equipment
Police 137,387 - - - 137,387 Fire 145,442 - - - 145,442 Recreation and culture 229,509 - - - 229,509 Rolling stock 1,468,206 - - - 1,468,206 Future expenditures 5,317,000 - - - 5,317,000 Future capital projects 787,740 - - - 787,740 Total assigned 13,529,698 - - - 13,529,698 Unassigned:

General fund 7,457,606 - - - 7,457,606 Special Revenue - - - (470,007) (470,007)

Total unassigned 7,457,606 - - (470,007) 6,987,599 Total fund balances 23,547,123$ 9,097,344 $ 69,941,770 $ 30,218,223 $ 132,804,460 $ Packet Pg. 691
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

139
Note 20 – Net Investment in Capital Assets

Net Investment in Capital Assets as of June 30, 2024, consisted of the following:

G overnm ental Business-Type
Activities Activities
Net investment in capital assets
Capital assets, nondepreciable 114,450,556$ 100,878,374 $ Capital assets, depreciable 263,682,904 460,892,478 Deferred am ount on refunding
Current portion of long-term debt:

Governmental (2,440,786) -
Electric Utility - (12,694,779) Water Utility - (1,768)
Wastewater Utility - (4,622,377) Solid Was te Utility - (43,485) Airport - (32,241)
Storm Drainage Utility - (884) Redding Area Bus Authority - (32,157) Long-term debt, ex cluding current portion:

Governmental (26,851,773) -
Electric Utility - (82,417,528) Wastewater Utility - (39,498,536) Solid Was te Utility - (39,013) Airport - (271,114)
Deferred gain/loss on refunding
Governmental 124,917 -
Electric Utility - 4,687,982 Wastewater Utility - 710,130 Debt not used for capital assets
Governmental 65,392 -
Electric Utility - 14,541
Accounts payable used for capital assets
Governmental (528,690) -
Electric Utility - (426,958) Water Utility - (1,485,771)
Wastewater Utlity - (206,172) Redding Area Bus Authority - (60,000) Net investment in capital assets 348,502,520$ 425,350,722 $

Packet Pg. 692
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

140
Note 21 – Commitments and Contingencies

A. Construction Commitments

A number of construction contracts existed at June 30, 2024. The unexpended authorized amount of $32,307,589 represents a commitment by the City.

B. Redding Electric Utility (REU)

i) REU was contractually obligated to purchase 7,500 Dth/day of GTN natural gas pipeline capacity that expired October 31, 2023, through which REU sold its delivery rights to the GTN through the remainder of the contract period. The City realized a small net revenue from this asset due to the GTN rate reductions implemented annually and the sale of GTN capacity rights. Beginning Novembe r 1, 2023, REU permanently released its rights and no longer has any ownership, fees, or revenue related to the GTN pipeline.

ii) REU is contractually committed to purchase natural gas in the 2025 through 2028 time period. The following table provides on a fiscal-year basis the approximate purchase dollar amount and what percentage these purchases cover of the minimum fuel requirements for the expect ed operating level of the Redding Power facility.
2025 2026 2027 2028 2029
Purchase Cost $ (million) 14.5$ 14.1 $ 6.3 $ 3.5 $ - $ % Natural Gas Hedge ** 87% 73% 36% 19% 0%
** This is the % of gas acquired to meet power retail sales after considering all other power resources and before wholesale power and gas transactions.

iii) In 2010, REU entered into a 28 - year term contract with Gill Ranch Storage. Under the Agreement REU has leased 2,250,000 Dth of cushion gas initially valued at $13,570 ,000 to Gill Ranch and Gill Ranch provides REU with approximately 600,000 Dth of natural gas storage. At the end of the contract term in 2038, the cushion gas will be returned to REU with an anticipated value greater than the initial $13,570,000 value. iv) REU has contractually committed to purchase power from M-S-R Public Power Agency on an as-delivered basis from the Big Horn Wind energy project. Deliveries began October 1, 2006. REU’s share of the output from the wind project is approximately 170,000 MWh per year. T he twenty-year contract with an option to extend five years has an $13,540,000 annual expected expense. The wind-based energy from this contract is a major source of eligible renewable energy with the associated environmental attributes available to meet REU’s renewable resource portfolio requirements. M-S-R completed an amendment to the Big Horn contract which addresses financial responsibility for the Bonneville Power Administration’s Wind Integration Charge (WIC).

Currently, the WIC is approximately $1.01 per kw-mo and is incl uded in the annual expected expense mentioned above.

Packet Pg. 693
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

141
Note 21 – Commitments and Contingencies (Continued)

B. Redding Electric Utility (REU) (Continued)

i) The City of Redding, in conjunction with the Northern Californi a Power Agency (NCPA) and Cities of Roseville and Santa Clara (collectively the “Plaintiffs”), filed a complaint in September 2014 in the U.S. Court of Claims seeking recovery of more than $45 million in overchar ges imposed by the Bureau of Reclamation for the Central Valley Project Improvement Act (CVPIA). The CV PIA, established in 1992, obligates Reclamation to collect roughly $30 million per year (in 1992 do llars) from water and power customers who benefit from the Central Valley Project (CVP), in proportion to the users’ project repayment obligation over a 10-year rolling average. Through the end of 2019, Reclamation estimates CVP capital costs to the power users over the previous 10 years is 34.07%; however, the CVPIA collections had averaged 45% over the same time period. Redding and the other plaintiffs in this claim, belie ve that Reclamation has overcharged the CVP power customers and are seeking repayment. In July of 2018, th e U.S. Court of Federal Claims denied the Plaintiffs’ complaint. Due to the large amount of overcharges, the Plaintiffs filed notices of appeal of the case to the Federal Circuit in September of 2018. On November 6, 201 9, the Federal Circuit issued an opinion where they reversed the Court of Federal Claims judgment and re manded for future proceedings consistent with the opinion. In June 2023, the City of Redding was awarded $15,884,102 in damages from the litigation.

C. West Central Landfill

In 1990 the City entered into an agreement with Shasta County t o operate West Central Landfill (the landfill).

Under the agreement, the City is obligated to operate the landf ill at least until there are no bonds or contracts outstanding. The 1997 refunding bonds expired July 1, 2010, an d the bonds were paid off. The City records the activity and net position of the operations portion of the land fill in its Solid Waste enterprise fund. Net position associated with the landfill, recorded on the City’s books at J une 30, 2024, was $7,376,210. The net position includes net investment in capital assets of $4,586,703 and unrestricted of $2,789,507.

D. Grants

Amounts received or receivable from granting agencies are subje ct to audit and adjustments by grantor agencies.

While no matters of non-compliance were disclosed by the audit of the financial statements or single audit of the Federal programs, grantor agencies may subject grant programs t o additional compliance tests, which may result in disallowed costs. In the opinion of management, future disa llowances of current or prior grant expenditures, if any, would not have material adverse effect on the financial position of the City.

E. Litigation

Various claims and suits have been filed against the City in the normal course of business. Although the outcome of these matters is not presently determinable in the opinion o f legal counsel, the city believes that the resolutions of these matters will not have a material adverse effect on the financial condition of the City.

Packet Pg. 694
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

142
Note 22 – Successor Agency Trust for Assets of the Former Redevelopment Agency

On December 29, 2011, the California Supreme Court upheld Assem bly Bill 1X 26 (“the Bill”) that provides for the dissolution of all redevelopment agencies in the State of Calif ornia. In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on December 29, 2011) all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal enti ty as of February 1, 2012. The assets and activities of the dissolved redevelopment agency are reported in a fiduciary fund (private-purpose trust fund) in the financial statements of the City.

The Bill provides that upon dissolution of a redevelopment agency, either the city or another unit of local government will agree to serve as the “successor agency” to hold the assets until they are distributed to other units of state and local government. On January 12, 2012, the City Council elected to b ecome the Successor Agency for the former redevelopment agency in accordance with the Bill as part of City resolution number 2012-001.

Following the disbursement of unencumbered funds, the Departmen t of Finance of the State of California granted a “Finding of Completion” on June 20, 2013, to the City of Redding Successor Agency. The Successor Agency is now allowed to place loan agreements between the former redevelopment agency and sponsoring entity on the Recognized Obligation Payment Schedule and utilize remaining bond proceeds.

Successor agencies are only allocated revenue in the amount tha t is necessary to pay the estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated.

The Bill directs the State Controller of the State of California to review the propriety of any transfers of assets between redevelopment agencies and other public bodies that occurred af ter January 1, 2011. If the public body that received such transfers is not contractually committed to a third party for the expenditure or encumbrance of those assets, the State Controller is required to order the available assets to be transferred to the public body designated as the successor agency by the Bill. The State Controller completed the review of all assets transferred and issued a report dated October 13, 2014.

The review found that the Agency transferred $69,027,149 in ass ets after January 2, 2011, including unallowable transfers to the City totaling $876,800. The City turned over the $876,800 to the Agency that was subsequently remitted to the Shasta County Auditor-Controller for distribution to the taxing entities.

Packet Pg. 695
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

143
Note 22 – Successor Agency Trust for Assets of the Former Redevelopment Agency (Continued)

Long-term debt consisted of the following as of June 30, 2024:

SHASTEC Tax Allocation Bonds, Series 2023 (Refuned SHASTEC 2006):

Interest at 5.0% payable March 1 and Septem ber 1; m aturities are payable Septem ber 1 in annual redem ptions from $425,000 to $770,000; final payment September 1, 2036.

Original issue: $15,000,000. Refunded at $7,545,000 on the Series 2006 SHASTE C Bonds whose proceeds from the Series 2006 Bonds are used to finance various capital im provem ents within the SHASTEC Redevelopm ent Area. 7,545,000 Total bonds outstanding 7,545,000
Premium on SHASTEC 20023 735,908
Total discount/premium 735,908
Total long-term bonded debt 8,280,908 $

Annual requirements to amortize long-term bonds outstanding as of June 30, 2024, are set forth below:

Fiscal Year Principal Interest Total
2024 425,000$ 366,625 $ 791,625 $
2025 440,000 345,000 785,000
2026 465,000 322,375 787,375
2027 490,000 298,500 788,500
2028 520,000 273,250 793,250
2029-2033 3,005,000 941,125 3,946,125 2034-2038 2,200,000 168,500 2,368,500 2039-2043 - - - Total 7,545,000$ 2,715,375 $ 10,260,375 $

Packet Pg. 696
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June 144
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Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June

REQUIRED SUPPLEMENTARY
INFORMATION /parenleft.caseUNAUDITED/parenright.case
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146
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Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June City of Redding
Required Supplementary Information
Budgetary Information (Unaudited)
For the Year Ended June 30, 2024

147
Note 1 – Budgetary Principles

Budget Data

The operating budget of the City is adopted by the City Council prior to July 1 each year primarily on a cash basis.

The City Manager is authorized to transfer budget amounts betwe en divisions of a department within any fund; however, any revisions that alter the total expenditures of any fund require City Council resolution.

Budget information is adopted and presented for the general, sp ecial revenue (except for the Landscape Maintenance Districts and Asset Seizure Fund), capital project and the debt service funds. The presentations represent original appropriations adjusted for supplemental appropriations, if any, made during the year.

The City does not formally adopt a budget for the debt service fund. The bond documents are the controlling factor.

Summary of Differences between Budgetary Basis and Generally Accepted Accounting Principles (GAAP)

The following are the differences between the City’s budgetary basis and GAAP:

A. The City does not budget for the fair value adjustment required under GASB 31.

B. The City does not budget for accounts payable or intergovernmental payables.

C. The City does not budget for benefit accruals.

D. The City budgets for certain receivables and payables on a cash basis.

E. The City budgets for land to be held for resale as expenditure.

F. Encumbrances are not included in the Statement of Revenue, Expe nditures and Changes in Fund Balance

Budgetary Basis Reconciliation

Budgets are not adopted for the Landscape Maintenance Districts Fund and the Asset Seizure Fund.

Packet Pg. 700
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June Actual Variance With
Amounts Final Bud get
Budgetary Positive
Original Final Basis (Negative)
REVENUES:

Property taxes 26,789,090 $ 28,334,090 $ 28,453,138 $ 119,048 $ Sales and use taxes 32,121,180 30,753,180 30,752,903 (277) Other taxes 12,536,000 11,450,000 11,439,841 (10,159) Licenses and permits 2,394,480 2,394,480 1,946,218 (448,262) Intergovernmental revenues 3,721,600 4,988,250 3,506,813 (1,481,437) Charges for services 3,753,960 4,140,670 4,875,700 735,030 Fines, forfeitures, and penalties 768,230 1,115,650 848,715 (266,935) Use of money and property 8,005,020 6,590,900 9,444,806 2,853,906 Net investment earnings (loss) 125,210 125,210 667,755 542,545 Other revenue 405,000 1,423,045 5,164,764 3,741,719 Total revenues 90,619,770 91,315,475 97,100,653 5,785,178 EXPENDITURES:

Current:

General government:
834,100 863,180 685,344 177,836 1,262,980 1,262,980 966,261 296,719 7,003,600 7,105,480 4,540,066 2,565,414 831,640 831,640 707,098 124,542 2,064,690 1,986,390 1,955,242 31,148 Personnel 918,560 918,560 894,217 24,343 Purchasing 704,490 706,260 504,506 201,754 Public safety:

Police 49,945,830 52,508,320 49,287,683 3,220,637 Fire safety 28,523,260 33,788,610 31,228,261 2,560,349 Public works 22,271,850 23,193,990 16,863,401 6,330,589 Planning 8,958,360 9,082,570 8,234,509 848,061 Recreation and culture 9,926,390 10,720,340 9,123,648 1,596,692 Debt service:

Principal payments 1,244,590 1,711,130 1,491,763 219,367 Interest and fiscal charges 784,180 872,730 830,728 42,002 Total expenditures 135,274,520 145,552,180 127,312,727 18,239,453 REVENUES OVER (UNDER) EXPENDITURES (44,654,750) (54,236,705) (30,212,074) (12,454,275) OTHER FINANCING SOURCES (USES):

Sale of capital assets - - 330,746 330,746 Transfers in 19,532,510 22,204,900 17,080,460 (5,124,440) Transfers out (3,580,310) (3,600,650) (2,365,308) 1,235,342 Total other financing sources (uses) 15,952,200 18,604,250 15,045,898 (3,558,352) CHANGE IN FUND BALANCE (28,702,550) (35,632,455) (15,166,176) (16,012,627) BUDGETARY FUND BALANCES:

Beginning of year 26,561,962 26,561,962 26,561,962 - End of year (2,140,588) $ (9,070,493) $ 11,395,786 $ (16,012,627) $ (Continued)
Finance
City Treasurer
Budgeted Amounts
City Attorney
City Clerk
City Manager
City of Redding
Schedule of Revenues, Expenditures, and Changes in Fund Balances-Budget and Actual (Unaudited) General Fund
For the Year Ended June 30, 2024
148 Packet Pg. 701
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June 23,547,123$

1. The City budgets for taxes on a cash basis. (72,108)

2. The City budgets for grants on a cash basis. (5,208,629)

3. Timing difference due to GASB #33. (55,065)

4. The City does not budget for accounts payable adjustments. (623,806)

5. The City does not budget for benefit accruals. (82,039)

6. Financial statement only adjustment for GASB #31. (600,845 )

7. The City does not budget for interest, sale of property or rental income related to the rolling stock fund. The City budgets only for the transfers in and out of the rolling stock fund. (230,419)

8. The City does not budget for special assessments. (13,330)

9. The City does not budget for interest on the long-term advances. (752,747)

10. Encumbrances are not included in the Statement of Revenues, Expenditures and Changes in Fund Balance. (6,185,572)

11. The City does not budget for interest on long-term advances 114,408

12. The City does not budget for developer's fees that are prepaid. (647,209)

13. The City budgeted for prepaid expenditures. 2,113,466

14. The City does not budget for interest on deposits held in trust. (16,759)

15. The City does not budget interest accrued at year-end 122,34 5

16. The City does not budget for CalFire lease of Cypress property that make loan payment (175,258)

76. The City does not budget for interest expended on loan for CalPers UAL prepayment 162,230 Budgetary fund balance 11,395,786$
(Concluded)
Schedule of Revenues, Expenditures, and Changes in Fund Balances-Budget and Actual (Unaudited) City of Redding
Explanation of differences from the Statement of Revenues, Expenditures and Changes in Fund Balances to Actual Amounts Budgetary Basis:

Fund balance from the Statement of Revenues, Expenditures and Changes in Fund Balances General Fund (Continued)
For the Year Ended June 30, 2024
149 Packet Pg. 702
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June Measurement Period 2023 2022 2021
TOTAL PENSION LIABILITY:

Service Costs 9,334,553 $ 8,538,665 $ 7,299,034 $ Interest 35,983,188 34,337,125 33,378,172
Changes of Benefit Terms 650,322 - - Difference Between Expected and Actual Experience 10,088,251 3,379,785 1,706,144 Changes of Assumptions - 14,600,120 - Benefit Payments, Including Refunds of Employee Contributions (3 0,930,761) (29,381,884) (27,548,141) Net Change in Total Pension Liability 25,125,553 31,473,811 14,835,209 Total Pension Liability - Beginning 521,555,019 490,081,208 475,245,999 Total Pension Liability - Ending (a) 546,680,572$ 521,555,019 $ 490,081,208 $ PLAN FIDUCIARY NET POSITION:

Contributions - Employer 18,430,558 $ 16,761,832 $ 15,066,353 $ Contributions - Employee 4,567,962 3,941,926 3,711,059 Net Investment Income 21,207,883 (28,706,945) 71,581,234 Benefit Payments, Including Refunds of Employee Contributions (3 0,930,761) (29,381,884) (27,548,141) Plan to Plan Resource Movement - - - Administrative Expense (252,247) (237,123) (317,820) Other Miscellaneous Income/(Expense)1
- - -
Net Change in Fiduciary Net Position 13,023,395 (37,622,194) 62,492,685 Plan Fiduciary Net Position - Beginning2
343,028,506 380,650,700 318,158,015
Plan Fiduciary Net Position - Ending (b) 356,051,901 $ 343,028,506 $ 380,650,700 $ Plan Net Pension Liability/(Asset) - Ending (a) - (b) 190,628,67 1$ 178,526,513 $ 109,430,508 $ Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 65.13% 65.77% 77.67% Covered Payroll 53,097,570 $ 48,405,131 $ 44,861,920 $ Plan Net Pension Liability/(Asset) as a Percentage of Covered Payroll 359.02% 368.82% 243.93% Notes to Schedules of Changes in Net Pension Liability and Related Ratios:
1During Fiscal Year 2017-18, as a result of Governmental Accounting Standard Board Statement (GASB No. 75, Accounting and Financial Reporting for Postemployment Benefit Plans Other than Pensions (GASB 75), CalPERS reported its proportionate share of activity related to postemployment benefits for participation in the State of California's agent OPEB plan. Accordingly, CalPERS recorded a one-time expenses as a result of the adoption of GASB 75.

Additionally, CalPERS employees participate in various State of California agent pension plans and during Fiscal Year 2017-18, CalPERS recorded a correction to previously reported financial statements to properly reflect its proportionate share of activity related to pensions in accordance with GASB Statement No. 68, Accounting and Financial Reporting for Pensions (GASB 68). 2Includes any beginning of year adjustment.

The Required Supplementary Information for Schedules of Changes in Net Pension Liability and Related Ratios is intended to show information for ten years; as additional years' information becomes available it will be displayed accordingly.

California Public Employees' Retirement System ("CalPERS") - Miscellaneous Plan City of Redding
Required Supplementary Information (Unaudited)
Schedules of Changes in Net Pension Liability and Related Ratios For the Year Ended June 30, 2024
150 Packet Pg. 703
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June 2020 2019 2018 2017 2016 2015 2014
7,095,018$ 7,333,947 $ 7,260,646 $ 7,191,855 $ 6,259,646 $ 6,164,984 $ 6,465,244 $ 32,355,397 31,319,926 30,024,355 29,157,632 28,527,904 27,466,002 26,335,482 - - - - - - - 1,379,900 4,475,575 414,506 (3,221,954) (705,952) (551,120) - - - (2,598,628) 23,416,908 - (6,578,864) - (26,359,866) (24,504,515) (22,850,231) (21,305,301) (19,821,373) (18,361,188) (16,894,132) 14,470,449 18,624,933 12,250,648 78,596,709 14,260,225 8,139,814 15,906,594 460,775,550 442,150,617 429,899,969 394,660,829 380,400,604 372,260,790 356,354,196 475,245,999$ 460,775,550 $ 442,150,617 $ 473,257,538 $ 394,660,829 $ 380,400,604 $ 372,260,790 $ 13,743,592$ 12,199,094 $ 10,902,871 $ 10,045,335 $ 8,742,083 $ 7,771,417 $ 7,140,089 $ 3,533,531 3,132,551 3,149,996 3,177,532 2,849,237 2,892,519 2,924,099 15,455,298 19,732,888 24,307,041 29,710,153 1,432,535 6,167,183 41,359,309 (26,359,866) (24,504,515) (22,850,231) (21,305,301) (19,821,373) (18,361,188) (16,894,132) - - (702) (145) (1,256) 20,221 - (440,162) (215,428) (448,271) (393,376) (166,624) (307,951) - - 702 (851,273) - - - - 5,932,393 10,345,292 14,209,431 21,234,198 (6,965,398) (1,817,799) 34,529,365 312,225,622 301,880,330 287,670,899 266,436,701 273,402,099 275,219,898 240,690,533 318,158,015$ 312,225,622 $ 301,880,330 $ 287,670,899 $ 296,204,582 $ 303,236,784 $ 310,058,548 $ 157,087,984$ 148,549,928 $ 140,270,287 $ 185,586,639 $ 98,456,247 $ 77,163,820 $ 62,202,242 $

66.95% 67.76% 68.28% 66.92% 67.51% 71.87% 73.93%
42,974,064$ 43,942,160 $ 43,633,688 $ 42,409,809 $ 41,323,256 $ 40,294,018 $ 40,286,914 $ 365.54% 338.06% 321.47% 335.37% 310.30% 265.54% 240.87% California Public Employees' Retirement System ("CalPERS") - Miscellaneous Plan For the Year Ended June 30, 2024
Schedules of Changes in Net Pension Liability and Related Ratios Required Supplementary Information (Unaudited)
City of Redding
151 Packet Pg. 704
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June 2024 2023 2022
Actuarially Determined Contribution 2
19,675,937$ 18,428,744 $ 16,765,328 $
Contributions in Relations to the Actuarially Determined Contribution 2
(19,675,937) (18,428,744) (16,765,328)
Contribution Deficiency (Excess) - $ - $ - $ Covered Payroll 3
63,976,833$ 56,506,209 $ 50,582,394 $
Contributions as a Percentage of Covered-Employee Payroll 3

30.75% 32.61% 33.14%
1 As prescribed in GASB 68, paragraph 46, the information presented in the Schedule of Plan Contributions should also be determined as of the employer's most recent fiscal year-end. The employer is responsible for determining this information as prescribed by the standard as this data is not available to CalPERS.
2 Employers are assumed to make contributions equal to the actuarially determined contributions. However, some employers may choose to make additional contributions towards their unfunded liability. Employer contributions for such plans exceed the actuarially determined contributions.

Notes to Schedule of Plan Contributions:

City of Redding
Required Supplementary Information (Unaudited)
Schedule of Plan Contributions
For the Year Ended June 30, 2024
California Public Employees' Retirement System ("CalPERS") - Miscellaneous Plan 3 Includes one year's payroll growth using 2.75 percent payroll assumption for fiscal year ended June 30, 2018; 3.00 percent payroll assumption for fiscal years ended June 30, 2014-17.

The Required Supplementary Information for Schedule of Plan Contributions is intended to show information for ten years; as additional years' information becomes available it will be displayed accordingly. 152 Packet Pg. 705
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June 2021 2020 2019 2018 2017 2016 2015
15,066,353$ 13,743,592 $ 12,199,094 $ 10,902,871 $ 10,045,335 $ 8,742,083 $ 7,771,417 $ (15,066,353) (13,743,592) (12,199,094) (10,902,871) (10,045,335) (8,742,083) (7,771,417) -$ - $ - $ - $ - $ - $ - $ 46,184,875$ 42,974,064 $ 43,942,160 $ 43,633,688 $ 42,409,809 $ 41,323,256 $ 40,294,018 $

32.62% 31.98% 27.76% 24.99% 23.69% 21.16% 19.29%
City of Redding
Required Supplementary Information (Unaudited)
Schedule of Plan Contributions
For the Year Ended June 30, 2024
California Public Employees' Retirement System ("CalPERS") - Miscellaneous Plan 153 Packet Pg. 706
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June Measurement Period 2023 2022 2021
TOTAL PENSION LIABILITY:

Service Costs 7,540,245 $ 6,602,064 $ 5,835,290 $ Interest 26,093,991 24,351,275 23,600,338
Changes of Benefit Terms 155,404 - - Difference Between Expected and Actual Experience 12,924,945 (1,991,350) (1,394,330) Changes of Assumptions - 13,153,936 - Benefit Payments, Including Refunds of Employee Contributions (1 9,845,923) (18,646,091) (17,632,371) Net Change in Total Pension Liability 26,868,662 23,469,834 10,408,927 Total Pension Liability - Beginning 371,246,281 347,776,447 337,367,520 Total Pension Liability - Ending (a) 398,114,943 $ 371,246,281 $ 347,776,447 $ PLAN FIDUCIARY NET POSITION:

Contributions - Employer 13,986,612 $ 12,961,721 $ 12,015,895 $ Contributions - Employee 3,512,078 2,979,070 2,413,060 Net Investment Income 14,329,857 (19,281,616) 47,488,980 Benefit Payments, Including Refunds of Employee Contributions (1 9,845,923) (18,646,091) (17,632,371) Plan to Plan Resource Movement - - - Administrative Expense (169,843) (157,674) (208,814) Other Miscellaneous Income/(Expense)1
- - -
Net Change in Fiduciary Net Position 11,812,781 (22,144,590) 44,076,750 Plan Fiduciary Net Position - Beginning2
230,968,103 253,112,693 209,035,943
Plan Fiduciary Net Position - Ending (b) 242,780,884 $ 230,968,103 $ 253,112,693 $ Plan Net Pension Liability/(Asset) - Ending (a) - (b) 155,334,05 9$ 140,278,178 $ 94,663,754 $ Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 60.98% 62.21% 72.78% Covered Payroll 22,863,083 $ 19,695,894 $ 19,213,993 $ Plan Net Pension Liability/(Asset) as a Percentage of Covered Payroll 679.41% 712.22% 492.68% Notes to Schedules of Changes in Net Pension Liability and Related Ratios:
1During Fiscal Year 2017-18, as a result of Governmental Accounting Standard Board Statement (GASB No. 75, Accounting and Financial Reporting for Postemployment Benefit Plans Other than Pensions (GASB 75), CalPERS reported its proportionate share of activity related to postemployment benefits for participation in the State of California's agent OPEB plan. Accordingly, CalPERS recorded a one-time expenses as a result of the adoption of GASB 75.

Additionally, CalPERS employees participate in various State of California agent pension plans and during Fiscal Year 2017-18, CalPERS recorded a correction to previously reported financial statements to properly reflect its proportionate share of activity related to pensions in accordance with GASB Statement No. 68, Accounting and Financial Reporting for Pensions (GASB 68). 2Includes any beginning of year adjustment.

The Required Supplementary Information for Schedules of Changes in Net Pension Liability and Related Ratios is intended to show information for ten years; as additional years' information becomes available it will be displayed accordingly.

For the Year Ended June 30, 2024
California Public Employees' Retirement System ("CalPERS") - Safety Plan City of Redding
Required Supplementary Information (Unaudited)
Schedules of Changes in Net Pension Liability and Related Ratios 154 Packet Pg. 707
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June 2020 2019 2018 2017 2016 2015 2014
5,609,745$ 5,654,637 $ 5,621,256 $ 5,567,053 $ 1,258,688 $ 4,702,492 $ 4,982,595 $ 22,885,014 22,052,183 21,033,750 20,189,512 19,492,841 18,712,421 18,027,294 - - - - - - - 198,438 2,573,209 1,287,937 (1,169,833) (610,852) (1,889,558) - - - (1,265,088) 17,369,797 - (4,730,135) - (16,785,010) (15,684,647) (14,317,530) (13,680,425) (13,015,636) (12,355,104) (11,659,397) 11,908,187 14,595,382 12,360,325 28,276,104 7,125,041 4,440,116 11,350,492 325,459,333 310,863,951 298,503,626 270,227,522 259,492,927 255,052,811 243,702,319 337,367,520$ 325,459,333 $ 310,863,951 $ 78,596,709 $ 266,617,968 $ 259,492,927 $ 255,052,811 $ 10,962,279$ 9,775,655 $ 9,016,294 $ 8,645,061 $ 7,839,435 $ 7,466,754 $ 6,761,771 $ 2,206,742 1,983,768 2,086,601 1,955,068 1,620,695 1,570,703 1,517,735 10,081,863 12,784,582 15,509,897 18,500,188 828,855 3,715,343 25,448,647 (16,785,010) (15,684,647) (14,317,530) (13,680,425) (13,015,636) (12,355,104) (11,659,397) - - (452) - 1,256 193,399 - (285,977) (138,539) (284,643) (247,291) (103,802) (191,504) - - 452 (540,541) - - - - 6,179,897 8,721,271 11,469,626 15,172,601 (2,829,197) 399,591 22,068,756 202,856,046 194,134,775 182,665,149 167,492,548 170,321,745 169,922,154 147,853,398 209,035,943$ 202,856,046 $ 194,134,775 $ 182,665,149 $ 167,492,548 $ 170,321,745 $ 169,922,154 $ 128,331,577$ 122,603,287 $ 116,729,176 $ (104,068,440) $ 99,125,420 $ 89,171,182 $ 85,130,657 $

61.96% 62.33% 62.45% 61.19% 61.98% 65.64% 66.62%
18,386,577$ 18,244,296 $ 18,109,134 $ 17,705,784 $ 29,767,881 $ 29,834,685 $ 34,838,650 $ 697.96% 672.01% 644.59% 654.24% 593.38% 537.11% 506.71% California Public Employees' Retirement System ("CalPERS") - Safety Plan For the Year Ended June 30, 2024
City of Redding
Required Supplementary Information (Unaudited)
Schedules of Changes in Net Pension Liability and Related Ratios 155 Packet Pg. 708
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June 2024 2023 2022
Actuarially Determined Contribution 2
15,375,993$ 13,986,466 $ 12,958,225 $
Contributions in Relations to the Actuarially Determined Contribution 2
(15,375,993) (13,986,466) (12,958,225)
Contribution Deficiency (Excess) - $ - $ - $ Covered Payroll 3
28,035,020$ 23,977,908 $ 21,536,663 $
Contributions as a Percentage of Covered Payroll 3

54.85% 58.33% 60.17%
1 As prescribed in GASB 68, paragraph 46, the information presented in the Schedule of Plan Contributions should also be determined as of the employer's most recent fiscal year-end. The employer is responsible for determining this information as prescribed by the standard as this data is not available to CalPERS.
2 Employers are assumed to make contributions equal to the actuarially determined contributions. However, some employers may choose to make additional contributions towards their unfunded liability. Employer contributions for such plans exceed the actuarially determined contributions.

Notes to Schedule of Plan Contributions:

For the Year Ended June 30, 2024
The Required Supplementary Information for Schedule of Plan Contributions is intended to show information for ten years; as additional years' information becomes available it will be displayed accordingly. 3 Includes one year's payroll growth using 2.75 percent payroll assumption for fiscal year ended June 30, 2018; 3.00 percent payroll assumption for fiscal years ended June 30, 2014-17.

City of Redding
Required Supplementary Information (Unaudited)
Schedule of Plan Contributions
California Public Employees' Retirement System ("CalPERS") - Safety Plan 156 Packet Pg. 709
Attachment: Annual Comprehensive Financial Report for FYE June 30, 2024 (9.10(a)--Annual Comprehensive Financial Report-year ended June 2021 2020 2019 2018 2017 2016 2015
12,015,895$ 10,962,279 $ 9,775,655 $ 9,016,294 $ 8,645,061 $ 7,839,435 $ 7,466,754 $ (12,015,895) (10,962,279) (9,775,655) (9,016,294) (8,645,061) (7,839,435) (7,466,754) -$ - $ - $ - $ - $ - $ - $ 19,383,450$ 18,386,577 $ 18,244,296 $ 18,109,134 $ 17,705,784 $ 17,313,615 $ 16,601,913 $