Redlands City Council
February 17, 2026

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

Auditor’s 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, a nd to issue an auditor’s report that includes our opinions.

Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with auditing standards ge nerally accepted in the United States of America and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the ove rride of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

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

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

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To the Honorable Mayor and Members
of the City Council of the City of Redlands
Redlands, California

3 Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, Budgetary Comparison Sc hedules, Schedule of Changes in Net Pension Liability and Related Ratios, Schedule of the City’s Proportionate Share of the Net Pension Liability and Related Ratios, Schedules of Contributions – Pension Plans, and Schedule of Changes in Total OPEB Liability and Related Ratios, as listed in the accompanying table of contents, be presented to supplement the basic financ ial statements. Such informa tion, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic fina ncial statements in an appr opriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the informa tion 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 expr ess an opinion or provide any assurance on the information because the limited procedures do not provide us with su fficient evidence to express an opinion or provide any assurance.

Supplementary Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The Combining and Individual Fund Financial Statements and Budgetary Comparison Schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements.

Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financ ial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United St ates of America. In our opinion, the Combining and Individual Fund Financial Statements and Budgetary Comparis on Schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information

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

In connection with our audit of the basi c financial statements, our responsibility is to read the other information and consider whether a material inconsistenc y exists between the other information and the basic financial statements, or the other information otherwise appears to be materially mi sstated. 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.

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To the Honorable Mayor and Members
of the City Council of the City of Redlands
Redlands, California

4 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards , we have also issued our repor t dated December 18, 2025, on our consideration of City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City’s internal control over financial reporting and compliance.

Santa Ana, California
December 18, 2025
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City of Redlands
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2025
5 The information contained in the Management’s Discu ssion and Analysis (MD&A) introduces the basic financial statements and provides an analytical overview of the C ity of Redlands financial activities and performance for the fiscal year ended June 30, 2025. Please read the MD&A in conjunction with the tran smittal letter and financial statements identified in the accompanying table of contents.

Using the Accompanying Financial Statements
This annual ACFR consists of a series of financial
statements. The Statemen t of Net Position and the Statement of Activities provide information about the activities of the City as a whole and present a longer-term view of the City’s finances. Also included in the accompanying report are fund financial statements. For governmental activities, the fund financial statements tell how these services were financed in the short term as well as what remains for future spending.

Fund financial statements also report the City’s operati ons in more detail than the government-wide statements by providing information about the City’s most significant funds. The remaining statements provide financial information about activities for which the City acts solely as a trustee or agent for the benefit of those outside of the government.

OVERVIEW OF THE FINANCIAL STATEMENTS

The annual report consists of four parts – management’s discussion and analysis (this section), the basic financial statements, required supplementary information, and an optional section that presents combining statements for non- major governmental funds and internal service funds. The basi c financial statements include two kinds of statements that present different views of the City:
 The first two statements are government-wide financial statements that provide both long-term and short-term information about the City’s overall financial status.
 The remaining statements are fund financial statements that focus on individual parts of the City government, reporting the City’s operations in more detail than the government-wide statements.  The governmental funds statements tell how general government services like public safety were financed in the short-term as well as what remains for future spending.  Proprietary fund statements offer short- and long-term financial information about the activities the government operates like businesses, such as the water system.  Fiduciary fund statements provide information about fiduciary relationships – like the custodial funds of the City – in which the City acts solely as agent or trustee for the benefit of others, to whom the resources in question belong.

The financial statements also include notes that explain some of the information in the financial statements and provide more detailed data. The statements are followed by a section of required supplementary information that provides additional financial and budgetary information.

Figure A-1 summarizes the major features of the City’s fi nancial statements, including the portion of the City government they cover and the types of information they contain. The remainder of this overview section of management’s discussion and analysis explains the structure and contents of each of the statements.

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City of Redlands
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2025

6 Figure A-1

Major Features of the City’s Government-wide and Fund Financial Statements

Fund Statements

Government-wide
Statements

Governmental Funds

Proprietary Funds

Fiduciary Funds

Scope Entire City
government (except
fiduciary funds) and
the City’s component
units
The activities of the
City that are not
proprietary or fiduciary
Activities the City
operates similar to
private businesses
Instances in which the
City is the trustee or
agent for someone
else’s resources

Required financial
statements
 Statement of net
position
 Statement of
activities
 Balance sheet
 Statement of
revenues,
expenditures and
changes in fund
balances
 Statement of net
position
 Statement of
revenues,
expenses and
changes in net
position
 Statement of cash
flows
 Statement of
fiduciary net
position
 Statement of
changes in
fiduciary net
position

Accounting basis and
measurement focus
Accrual accounting
and economic
resources focus
Modified accrual
accounting and current
financial resources
focus
Accrual accounting
and economic
resources focus
Accrual accounting
and economic
resources focus

Type of asset, deferred
outflow of resources,
deferred inflow of
resources, and liability
information
All assets and
liabilities, both
financial and capital,
and short-term and
long-term
Only assets and
deferred outflows of
resources expected to
be used up and
liabilities and deferred
inflows of resources
that come due during
the year or soon
thereafter; no capital
assets or long-term
debt include
d
All assets and
liabilities, both
financial and capital,
and short-term and
long-term
All assets and
liabilities, both short-
term and long-term

Type of financial
inflow and outflow
information
All revenues and
expenses during the
year, regardless of
when cash is received
or paid
Revenues for which
cash is received during
or soon after the end of
the year; expenditures
when goods or services
have been received and
payment is due during
the year or soon
thereafte
r
All revenues and
expenses during the
year, regardless of
when cash is received
or paid
All revenues and
expenses during the
year, regardless of
when cash is received
or paid
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City of Redlands
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2025

7 Reporting the City as a Whole

The accompanying government-wide financial statements include two statements that present financial data for the City as a whole. One of the most important questions asked about the City’s finances is, “Is the City, as a whole, better off or worse off as a result of the year’s activities?” The Statement of Net Position and the Statement of Activities report information about the City as a whole and about its activities in a way that helps answer this question. These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies. All of the current year’s revenues and expenses are taken into account regardless of when cash is received or paid.

These two statements report the City’s net position and its changes. You can think of the City’s net position – the difference between assets, deferred outflows of resources, deferred inflows of resources and liabilities – as one way to measure the City’s financial health, or financial position. Over time, increases and decreases in the City’s net position may be one indicator of whether its financial health is improving or deteriorating. You will need to consider other nonfinancial factors, however, such as changes in the City’s property tax base and the condition of the City’s roads, to assess the overall health of the City.

In the Statement of Net Position and the Statement of Activities, City services are divided into two kinds of activities:

 Governmental activities – Most of the City’s basic services are reported here. Sales taxes, property taxes, state subventions, and other revenues finance most of these activities.  Business-type activities – The City charges a fee to customers to help it cover all or most of the cost of the services accounted for in these funds.

Reporting the City’s Most Significant Funds

The fund financial statements provide detailed information about the City’s most significant funds – not the City as a whole. Some funds are required to be established by State law or by bond covenants. However, City Council establishes many other funds to help it control and manage money for particular purposes or to show that it is meeting administrative responsibilities for using certain taxes, grants or other money. The City’s two kinds of funds – governmental and proprietary – use different accounting approaches.

 Governmental funds – Most of the City’s basic services are repor ted in governmental funds, which focus on how money flows into and out of those funds and the balances left at year end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other current financial assets that can readily be converted to cash. The governmental fund statements provide a detailed current-term view of the City’s general government opera tions and the basic services it provides.

Governmental fund information helps you determine whether there are more or fewer financial resources that can be spent in the near future to fina nce the City’s programs. We describe the relationship or differences between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds in a reconciliation on the page following the fund financial statements.

 Proprietary funds – When the City charges cust omers for the services it provides – whether to outside customers or to other units of the City – th ese services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Position and the Statement of Activities. In fact, the City’s enterprise funds (a component of proprietary funds) are part of the business-type activities we report in the government-wide statements but provide more detail and additional information for proprietary funds, such as statement of cash flows. The City’s internal service funds (the other component of proprietary funds) reports activities that provide supplies and services internally to other City departments and programs.

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City of Redlands
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2025
8 Reporting the City’s Fiduciary Responsibilities
The City is an
agent for certain assets held for, and under the control of, other organizations and individuals. All of the City’s fiduciary activities are reported in a separate Statem ent of Fiduciary Net Position. We exclude these activities from the City’s other financial statements because the City cannot use these assets to finance its operations. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes.

Statement of Net Position
The following is a condensed Statement
of Net Position for the fiscal years ended June 30, 2025 and June 30, 2024, which allows for analysis of the City’s net position as a whole.

Table 1
Net position over time may serve as a useful indicator of a gover nment’s financial position, however it may change
dramatically year-to-year as a result of changes in accounting practices and assumptions. Table 1 shows that the net position of government-wide activities increased by approximately $25.3 million or 3.3%, from $777,304,332 in 2024 to $802,600,365 in 2025.

Governmental activities net position increased by 2%, from $554,360,684 at June 30, 2024 to $565,683,764 at June 30, 2025. The City’s net position for business-type activities increased by 6.3% from $222,934,648 in 2024 to $236,916,601 in 2025. For governmental activities, the roughly $11.3 million increase in net position is primarily attributable to the $15.96 million increase in total assets relative to total liabilit ies, partially offset by $4.63 million in net decreases in deferred inflows and ou tflows related to leases, pension, and OPEB. For the business-type activities, the 6.3% increase in total net position (or $13.97 million) reflects a $14.02 million increase in total net assets, partially offset by $46,800 in net decreases in deferred outflows and infl ows. Further detail on comparisons to the prior year is provided below.
2025 2024 2025 2024 2025 2024
Current and other Assets 196,237,172$ 187,645,957$ 121,091,775$ 117,588,266$ 317,328,947$ 305,234,223$ Capital Assets 656,941,138 637,176,157 223,121,898 209,622,726 880,063,036 846,798,883 Total Assets 853,178,310 824,822,114 344,213,673 327,210,992 1,197,391,983 1,152,033,106 Deferred Outflows of Resources
Pension & OPEB 70,301,675 82,986,820 15,328,725 17,689,993 85,630,400 100,676,813 Long-Term Liabilities Outstanding 281,376,635 269,158,561 95,263,524 95,588,159 376,640,159 364,746,720 Other Liabilities 23,069,761 22,887,043 11,507,787 8,200,221 34,577,548 31,087,264 Total Liabilities 304,446,396 292,045,604 106,771,311 103,788,380 411,217,707 395,833,984 Deferred Inflows of Resources
Leases & Pension & OPEB 53,349,825 61,402,646 15,854,486 18,168,957 69,204,311 79,571,603 Net Position
Net Investments in Capital Assets 648,293,673 629,390,358 210,045,627 196,064,177 858,339,300 825,454,535 Restricted 30,679,680 26,403,823 19,767,256 19,763,252 50,446,936 46,167,075 Unrestricted (113,289,589) (101,433,497) 7,103,718 7,116,219 (106,185,871) (94,317,278) Total Net Position, as restated (Note 19) 565,683,764$ 554,360,684 $ 236,916,601 $ 222,943,648 $ 802,600,365 $ 777,304,332 $ Governmental Activities Business-Type Activities Total Primary Government Redlands Regular Meeting of 02-17-26
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City of Redlands
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2025

9 The City implemented GASB Statement No. 101, Compensated Absences, effective July 1, 2025. GASB 101 requires the City to recognize a compensated absences liability and corresponding expense as employees earn leave benefits, based on the probability that those benefits will be used or paid. Additional discussion of these changes can be found in Note 1 – M, 9 and 19 of the financial statements.

Statement of Net Position - Total Primary Government

 Again, this year, the largest portion of total assets c onsists of capital assets (e.g., land, infrastructure and equipment), totaling $880 million or 73% of total assets. These are detailed in Note 6 of the financial statements.  Net investment in capital assets of approximately $858 million represents the City’s investment in infrastructure and other capital assets, less accumulated depreciation and outstanding balances on borrowings used to construct or acquire those assets.
 Cash and investments comprised $282.6 million in the City treasury and $998,000 of cash and investments held with fiscal agents. These assets are detailed in Note 2 of the financial statements.  Deferred outflow of resources related to pension and OPEB decreased notably by $15 million, roughly 15%.

Deferred outflows related to Pension were impacted by differences in expected and actual experience, pension contributions made subsequent to the measuring data, and the difference between projected and actual investment earnings. Deferred outflows related to OPEB were imp acted by changes in assumptions primarily, as well as by differences in expected and actual experience and contributions made subsequent to the measuring date.  Receivables, totaling $25.2 million, co nsist of accounts, taxes, interest and leases receivable. While most receivables consist of taxes and accounts payable, it is noted here that the line ‘leases receivable’ recognizes agreements with third parties for the right-to-use of C ity property that is leased for special purposes. More information on leases receivable is found in Note 3 to the financial statements.  Long-term liabilities totaled $367 million, an increase of 3.3%, and represent the City’s obligations on debt, pensions, and other post-employment benefits. For more information please see Notes 7 and 9-13.  Other liabilities increased by 11.2%, from $31.1 million to $34.6 million. Aside from fluctuations in several other accounts in this category, the main cause of this increase is related to a significant increase in accounts payable.  Lease-related deferred inflows of resources remained relatively steady, decreasing by roughly $86,155 for spaces and land leased out by the City. As well, deferred inflows related to pension & OPEB increased by a net amount $10.3 million, roughly 13.7%. These fluctuations are based on cha nges in assumptions, change in employers proportion (as it relates to pension), and differences be tween expected and actual experience. More will be discussed regarding these categories below.
 Overall net investment in capital assets increased by $3 2.9 million, or 4%. This steady increase over the prior year is reflective of additions to right-of-way assets, higher amounts of construction in progress, and additions to infrastructure assets, machinery, equipment & vehicles and lease assets.  Restricted net position, totaling $50.4 m illion, represents resources that are subject to restrictions on how they may be used. Some funds are restricted for the purposes of funding specific capital projects, funding specific debt service obligations, to hold in trust as an endowment, or for other specific uses.  The unrestricted net position amount of -$106.2 million represents an unrestri cted net position deficit, mainly resulting from the recognition of the net pension liability in fiscal year 2015, in accordance with GASB 68, and the recognition of total OPEB liability in fiscal year 2018, in accordance with GASB 75. Also, beginning in FY 2022, the City also recognized the deferred inflows related to leases in accordance with GASB 87. Additionally, starting in FY 2024, the City implemented GASB 96, which required the recognition of subscription liabilities and related intangible assets for subscription-based information technology arrangements. Lastly, starting in FY 2025, the City implemented GASB 101, which required th e City to recognize compen sated absences liabilities based on leave benefits earned by employees and the probability that those benefits w ill ultimately be used or paid. These accounting standards collectively contribute to the City’s negative unrestricted net position.

Additional details can be found in Note 11 for the net pension liability, in Note 12 for the total OPEB liability, in Note 3 for leases, in Note 1- J for subscription-based IT arrangements and in Note 1 – M, 9 & 19 for Compensated Absences.

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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2025

10 Governmental Activities

 Receivables, totaling roughly $14 million, consist mainly of taxes r eceivable at $10.1 millio n, $1.9 million in accounts receivable, $1.37 million in interest receivable and $606,553 in leases receivable. Recognition of leases receivable, in accordance with GASB 87 reflects the City’s portion of property leased to others for their right-of- use of a particular underlying asset. Interest receivable is notably higher than the previous year due to higher earnings on investments in the current year.
 The net position of governmental activities increased by 2% (or $11.3 million), driven by several offsetting factors. Cash and other assets increased by $8.6 m illion, and capital assets increased by $19.8 million. These gains were partially offset by a $12.4 million increase in total liabilities, yielding a net increase of $15.9 million before considering deferred items. Deferred outflows related to pensions and OPEB decreased by approximately $12.7 million, while deferred inflows related to lease s, pensions, and OPEB d ecreased by roughly $8 million.

The net effect of these deferred items was a $4.6 million reduction to net pos ition. After applying this reduction to the $15.9 million increase noted above, the total change in governmental activities’ net position was an increase of $11.3 million.
 Deferred outflows of resources related to pensions and OPEB decreased by $12.7 million, or approximately 15%, in FY 2025. OPEB deferred outflows decreased by $424,590, primarily due to the amortization of prior-year changes in assumptions used to calculate the City’s Total OPEB liability as well as differences between expected and actual experience. Also, pension deferred outflow s decreased by $12.3 million, driven by investment overperformance, primarily, with changes in assumptions also contributing to this difference. Additional details on these changes can be found in Notes 11 and 12 of the financial statements.  This year, total liabilities increased by 4.2%, or $12.4 million. Although several curre nt and noncurrent liability categories experienced fluctuations, the overall increase is primarily attributable to an $8.7 million rise in the total OPEB liability and the implementation of GASB 101, which resulted in increases of $2.1 million each in compensated absences due within one year and compensated absences due in more than one year. o Increases in total OPEB liability were the largest contributor and were caused by differences between expected and actual experience, interest (as in, the actuarial “growth” of the liability), and service costs.

Changes in aggregate net pension liability were less significant, decreasing by $2.2 million. Key drivers include better-than-expected investment return s from CalPERS, which exceeded the assumed 6.8% rate, resulting in lower unfunded liabilities. Th ere are more details available in Notes 11 & 12 of the financial statements.
o The implementation of GASB 101 increased both th e current and noncurrent compensated absences liabilities by $2.1 million each because the new standard requires the City to recognize a broader range of earned leave, particularly sick leave that is more likely than not to be used or settled, at employees’ current pay rates, including applicable salary-re lated benefits. This e xpanded recognition criteria resulted in higher measured obligations relative to the prior model. For more information, please see

Note 1 – M, 9 and 19 of the financial statements.
 Deferred inflow of resources related to pension decreased by $770,200. This reduction reflects the amortization of prior differences between the City’s actual contributions to CalPERS and the City ’s proportionate share of total plan contributions. More significantly, OPEB deferred inflows decreased by $7.5 million, or 13%, over the prior year. This decrease is primarily due to changes in assumptions, including adjustments to the discount rate and updated healthcare cost trends, as well as differences between expected and actual experience for OPEB plan participants. There are more details available in Notes 11 & 12 of the financial statements.

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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2025
11 Business-Type Activities
 The net position of business-type activities increased by $1 4 million, driven by several offsetting factors. Total
assets increased by $17 million, while total liabilities increased by $3 million, resulting in a net increase of $14 million before considering deferred items. Deferred outflows related to pensions and OPEB decreased by approximately $2.061 million, and deferred inflows related to pensions and OPEB decreased by roughly $2.314 million. The net effect of these deferred items was a nom inal $46,800 reduction to net position. After applying this reduction to the $14 million increase noted above, the overall change in business-type activities’ net position remains $14 million, as the impact of deferred items is not material to the rounded total.  Receivables totaled $11.2 million, an increase of approximately $1.5 million from the prior year. The majority of these balances relate to unbilled customer accounts for Water, Wastewater, and Solid Waste services, which collectively amount to $10.3 million. Nearly $1.3 million of the year-over-year increase reflects higher accounts receivable driven by billing cycle timing across fiscal y ears and by recent rate increases in Solid Waste. An additional $205,000 of the increase is attributable to higher interest earnings.  Total capital assets of $223 million represent 25.4% of total capital assets citywide.  Deferred outflow of resources related to pension and OPEB decreased by $2.4 million, roughly 12%. o OPEB deferred outflows decreased by approximate ly $117,600, or 1.1%. Please refer to the earlier discussion under Governmental Activities for more information on those specific changes. Additional details on these changes can be found in Note 12 of the financial statements. o Pension deferred outflows decrea sed by $2.2 million, or 32.6%. Please refer to the earlier discussion under Governmental Activities for more information on those specific changes. Additional details on these changes can be found in Note 11 of the financial statements.  This year, there was a increase of roughly $3 million, or 3%, in total liabilities. o In terms of other liabilities, these increased by $3.3 million or 40% compared to the prior year. This was driven mostly by a large account payable accr ued at year end related to the 2023 Capital Improvement Project – Waterline Replacement in the Water Division. o Long-term liabilities decreased by approximately $324, 600, driven by several offsetting changes.

Increases resulting from GASB 101 ($1.15 million), landfill closure costs ($578,200), and the total OPEB liability ($2.4 million) were more than offset by reductions in long-term debt ($508,500) and a $3 million decrease in the aggregate net pension lia bility. In addition, a restatement of net position related to compensated absences reduced beginning net position by $997,200.  Deferred inflow of resources related to leases, pension and OPEB decreased by about $2.3 million, roughly 13%. o Deferred inflows related to leases decreased by $262,800 as existing leases of land owned by the Water, Aviation and Cemetery Funds were paid by the current lessees. o Deferred inflows related to OPEB also decreased by $2 million. Please refer to the above discussion under Governmental Activities as it relates to chang es in deferred inflows related to OPEB. T here are
more details available in Note 12 of the financial statements. o Pension deferred inflows experienced no changes and remained at zero.

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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2025

12 The Statement of Activities reports increases and decreases in the net position. The following is a condensed Statement of Activities for the fiscal years ending June 30, 2025 and June 30, 2024:

Table 2

Total Primary Government –

 Total Primary Government revenues for fiscal year 2025 decreased slightly by 1. 2%, or roughly $3.1 million.

This small decrease belies some significant changes from the previous year. There have been noteworthy fluctuations in both charges for service (an increase of nearly $6.6 million) as well as in capital and operating grants and contributions (a decrease of $10.9 million and nearly $900,000 respectively). Significant increases in property tax (of roughly $3.1 million) were offset by large decreases in franchise fee revenue (of roughly $1.8 million).
 Property tax grew by 7.3%, or $3.1 million. This growth in revenue is attributed to higher taxable values driven by property transfers of ownership, the annual adjustment for inflation (CPI), and new construction within the City from prior years being enrolled by the County’s Recorder. 2025 2024 2025 2024 2025 2024
Program Revenues
Charges for services: 18,787,896$ 18,014,068$ 69,195,253$ 63,417,844$ 87,983,149$ 81,431,912$ Operating grants and contributions 9,966,621 14,227,777 3,497,291 114,117 13,463,912 14,341,894 Capital grants and contributions 24,818,977 38,207,775 6,357,779 3,867,244 31,176,756 42,075,019 General Revenues
Property taxes 45,991,007 42,883,738 115,954 104,411 46,106,961 42,988,149 Sales taxes 47,088,618 47,629,644 - - 47,088,618 47,629,644 Franchise taxes 2,685,573 4,471,469 - - 2,685,573 4,471,469 Other taxes 2,744,184 2,676,553 - - 2,744,184 2,676,553 Investment income (loss) 9,605,154 9,235,054 5,418,312 5,841,165 15,023,466 15,076,219 Gain/(loss) on sale of capital assets - - - - - - Intergovernmental (unrestricted) 1,341,917 852,762 - - 1,341,917 852,762 Other 2,634,249 2,523,968 2,698,968 1,973,183 5,333,217 4,497,151 Total Revenues 165,664,196 180,722,808 87,283,557 75,317,964 252,947,753 256,040,772 Program Expenses
General government 42,523,409 42,250,996 - - 42,523,409 42,250,996 Public safety 83,895,046 70,359,582 - - 83,895,046 70,359,582 Culture and recreation 10,439,921 9,900,700 - - 10,439,921 9,900,700 Highway and streets 13,578,992 13,911,149 - - 13,578,992 13,911,149 Library 6,009,854 4,068,345 - - 6,009,854 4,068,345 Interest on Long-Term Debt 819,129 679,186 - - 819,129 679,186 Water - - 33,200,910 30,614,235 33,200,910 30,614,235 Disposal - - 17,794,049 22,954,172 17,794,049 22,954,172 Sewer - - 15,228,817 16,143,743 15,228,817 16,143,743 Groves - - 1,560,580 1,507,349 1,560,580 1,507,349 NP Water - - 228,214 581,877 228,214 581,877 Cemetery - - 1,170,759 1,399,130 1,170,759 1,399,130 Aviation - - 1,202,040 789,821 1,202,040 789,821 Total Expenses 157,266,351 141,169,958 70,385,369 73,990,327 227,651,720 215,160,285 Change in Net Position Before Transfers 8,397,845 39,552,850 16,898,188 1,327,637 25,296,033 40,880,487 Transfers 2,925,235 2,827,146 (2,925,235) (2,827,146) - - Increase (Decrease) in Net Position 11,323,080 42,379,996 13,972,953 (1,499,509) 25,296,033 40,880,487 Beginning Net Position 557,931,945 515,551,949 223,940,878 225,440,387 781,872,823 740,992,336 Restatement of Net Position (3,571,261) - (997,230) - (4,568,491) - Beginning Net Position, as Restated 554,360,684 515,551,949 222,943,648 225,440,387 777,304,332 740,992,336 Ending Net Position 565,683,764$ 557,931,945 $ 236,916,601 $ 223,940,878 $ 802,600,365 $ 781,872,823 $ Governmental Activities Business-Type Activities Total Primary Government Redlands Regular Meeting of 02-17-26
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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2025

13  Charges for service grew overall by $6.6 million, with most of this increase attribut ed to significantly higher charges for services in Water, Disposal (Solid Wast e), and Wastewater (collectively $5.7 million). Another $774,000 is attributed to higher charges for service in governmental activities.  Capital grants and contributions decreased significantly this year by roughly $10.9 million, representing the net impact of a $13.4 million decrease in governmental activities offset by an increase in business-type activities of nearly $2.5 million.
 Franchise fees, which naturally fluctuate from year to y ear due to variations in utility consumption, business activity, and underlying gross-receipts bases, decreased significantly in FY 2025—falling by 40%, or approximately $1.8 million, compared to the prior year.  Investment income saw a small reduction over the prior year of nearly $53,000 due to steady market performance and a stabilizing interest rate environment, which limited additional yield under the City’s conservative investment strategy.
 Total expenses for the City increased by roughly $12.5 millio n, or 5.8%, with the following Program areas that experienced the highest increases: public safety, library, water, disposal (solid waste), nonpotable water and aviation. More detail on these fluctuations is presented below.  Transfers between governmental activities and business-type activities decreased slightly by roughly $98,100, or

3.5%.

Governmental Activities

 Overall, the ending net position for the governmental activities increased by $7.6 million, or 1.4%.  Total governmental activities revenues decreased by 8.3% in fiscal year 2025, driven primarily by a $13.4 million decline in capital grants and contributions. Of this d ecrease, $6.3 million is attributable to reduced capital contributions associated with the completion of both City-led and developer-funded projects. A significant portion of the remaining decline reflects a lower valuation of right-of-way additions. Although nearly three times as much square footage was added during the year compared to FY 2024, the City limited the recorded value by applying the average assessed value of parcels classified as government land by the County Assessor’s Office, rather than using the prior year’s methodology, which av eraged the cost per square foot across all vacant land categories.
 Operating grants and contributions decreased by approximately $4.3 million in FY 2025. The prior year included an $8 million one-time pass-through grant that the City administered on behalf of the University of Redlands, which significantly elevated FY 2024 revenues. In FY 2025, the City recognized $3.7 million from a new Encampment Resolution Fund grant, partially offsetting this decline. Beyond these major items, smaller year- over-year fluctuations, such as the completion of prior-year grant-funded projects, also contributed to the net decrease. These dynamics reflect the variable nature of gr ant funding tied to the timing and lifecycle of specific projects.
 Charges for service increased by 4.3%, or $773,800. This was due to several fluctuations in individual categories, but items of note were large increases in revenue for building permits, plan check fees, grading & paving permits, and applications/filling fees (roughly $576,600).
 Property tax revenues increased by 7.25%, or approximately $3.1 million, over the prior year, reflecting another year of strong growth in the City’s overall property va lues. This increase was driven by the addition of new residential and commercial developmen t, continued reassessment activity from prior-year property transactions at higher market values, and the annual inflationary adjustment allowed under California property tax law. While higher interest rates moderated housing activity more broadly, Redlands continued to experience steady demand across residential, multifamily, industrial, and commercial property types, supporting sustained valuation growth.  Sales Tax revenue contracted slightly by 1.1%, reflec ting a modest softening in consumer spending. While inflation has begun to ease, the cumulative effects of elevated prices over recent years have continued to place pressure on household budgets, resulting in reduced discretionary spending. Despite these conditions, the City’s sales tax base remains resilient, supported by a diverse mix of industries that helps mitigate volatility across individual sectors of the local economy.

Redlands Regular Meeting of 02-17-26
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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2025

14  Franchise Fee revenue decreased by almost 40%, or $1. 8 million over the prior year. This decline reflects a reversion from unusually strong collections in the previous fiscal year, which benefited from timing-related factors and elevated utility revenues that did not recur in fiscal year 2025. Changes in billing cycles, customer usage patterns, and the composition of utility revenues subject to franchise fee calculations also contributed to lower receipts during the year, resulting in a more normalized level of franchise fee revenue relative to historical trends.
 Other General Revenues increased by roughly $1 million. Investment income accounts for $370,100 of this increase, reflecting the continued benefit of elevated in terest rates on the City’s fixed-income investment portfolio. Another $489,200 of that increase can be traced to higher Intergovernmental Revenues in the form of higher reimbursements via mutual aid agreements within the Fire Department.  Total expenses for Governmental Activities increas ed in fiscal year 2025 by $16.1 million (or 11.4%).

This
increase is largely attributable to government-wide accounting adjustments, most notably changes in pension- related expense, rather than a comparable increase in day-to-day operating costs. At the government-wide level, expenses are influenced by actuarial remeasurements, deferred inflows and outflows, and other long-term liability adjustments that can vary significantly from year to year. As a result, individual expense categories may rise or fall materially in a given fiscal year, even when underlying service levels and operating activities remain relatively stable. In this context, the overall change in total expenses reflects nor mal volatility associated with required accounting adjustments and does not indicate a structural increase in the City’s operating cost base.  The following categories saw the largest fluctuations over the prior year:
o Public Safety expenses increased by roughly $13.3 million (or 19.2%). The increase was due to several factors, including higher expenses for staff, including pension contributions as well as higher than usual garage charges to maintain public safety fleet vehicles, but more significantly – an $8 million recognition of pension expense as require under GASB 68. Depreciation expense was also $1 million higher than the previous year due to the prior years addition of several significant public safety vehicles. o Library-related expenditures also increased compared to the prior year, rising by $1.9 million, or

47.7%. This variance reflects $2 million project-rela ted costs incurred for the Museum of Redlands Construction Completion project, which were offs et by approximately $2 million in grant funding received from the California Department of Natural Resources. o Culture & Recreation also increased by $539,200, or 5.5%, reflecting higher personnel-related costs, including staff salaries and pension contributions, along with increased spending for garage charges and specialized contractual services associated with program and facility operations. o Lastly, interest on long-term debt increased by approx imately $141,500, or 20.8 percent, compared to the prior year, primarily due to higher lease interest expense associated with the addition of new leased vehicles supporting Parks, Police, and Fire operations.

Business-Type Activities

 Overall, the ending net position for the business-type activities increased by $13 million, or 5.8%.  Comparing fiscal year 2024 and fiscal year 2025, total revenues increased by $12 million overall, or 15.9%. The increase in revenues is almost exclusively due to significant increases in each category of program revenues:
o Charges for Service increased by 9.1%, or $5.8 milli on. This growth was driven primarily by rate adjustments across the City’s utility operations, including a $3.5 million increase in Water revenues and a $613,600 increase in Wastewater revenues associated with rate changes effective August 5, 2024.

In addition, Solid Waste revenues increased by $1.5 million following a rate adjustment that became effective January 1, 2025.
o Operating grants and contributions also experienced a significant increase in revenue - from $114,100 to $3.5 million. This was the result of the following grant awards: $2.7 million from the Bureau of Reclamation Water SMART program , $131,500 from Cal Recycle’s Beverage Container Recycling Program and $558,000 from the Federal Aviation Administration’s Airport Improvement Program.

Redlands Regular Meeting of 02-17-26
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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2025

15 o Capital grants and contributions increased significantly compared to the prior year, rising by $2.5 million, or 64.4%. This increase was driven primarily by the recognition of $2.8 million in water infrastructure assets contributed through private development, compared to $72,000 recognized in the prior fiscal year.
o While this category includes a variety of revenu e sources and experienced offsetting fluctuations among individual accounts, the most significant contributor to the increase was the receipt of the City’s first PFAS settlement payment totaling $1.1 million. This payment w as received under the settlement agreement between public water sy stems and the 3M Company executed in August 2023. PFAS, or per- and polyfluoroalkyl substances, are a group of manufactured chemicals that have been widely used in industrial and consumer products and are regulated due to their persistence in the environment and potential impacts on water quality. The settlement provides funding to assist public water systems with costs associated with monitoring, treatment, and remediation related to PFAS contamination.  Expenses decreased overall from fiscal year 2024 levels by nearly $3.6 million, or 4.9%. The program with the largest decrease in expenses was the Solid Waste (Disposal) fund. Other funds had varied results, with the largest dollar amount increases in Water ($2.6 million or 8.5%) and the largest increase by percent in the Aviation Fund ($412,200 or 52.2%).
 Over the prior year:
o In the Water Fund, expenses increased by nearly $2. 6 million, or 8.5%. This increase was caused by higher expenses related to pensions, salaries and be nefits of roughly $600,000. There was also a significant increase in spending of $1.6 million for water meters to complete the City’s Smart Meter infrastructure program. Also, there was an additional amount of $345,000 spent for street repairs versus the prior year.
o In the Solid Waste (Disposal) Fund, total expenses decreased by $5.1 million, or approximately 22.5%, compared to the prior year. This reduction was driven primarily by lower closure and post-closure expense recognition for the California Street Landfill, which was $3.2 million lower in fiscal year 2025 following unusually high costs recognized in the prio r year. Additional decreases were attributable to lower staffing-related costs of approximatel y $450,000 and reduced garage charges of roughly $600,000, contributing further to the overall decline in expenditures. o In the Wastewater (Sewer) Fund, total expenses decreased by approximately $915,000, or 5.7%, compared to the prior year. This decline was driven primarily by lower personnel-related costs, totaling roughly $1.1 million, largely attri butable to reduced pension contri butions and changes in pension expense recognition required under GA SB Statement No. 68. These savings were partially offset by increased noncapital expenditures associated with pr e-bid support and engineering services related to the Wastewater Treatment Plant capital improvement project. o In the Non Potable Fund, overall expenses were $353,700, or 60.8% lower than the previous year. The primary reason for this decline was that professiona l services and special contractual work related to well & booster projects were recorded in the pr evious year. The resulting variance was roughly $357,300 less in general and administrative expenses.
o Lastly, in the Aviation Fund, expenses increased by $41 2,200, or 52.2%. The largest factor in this increase was expenses related to the Runway and Airport Pavement Treatment Program included within parts and supplies as a noncapital expense. This work was offset by a grant from the Federal Aviation
Administration.

Redlands Regular Meeting of 02-17-26
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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2025

16 Expenses by Function of Governmental Activities

 Expenses overall for governmental activiti es totaled $157 million. This total re presents the cumulative effect of increased pension costs, the recognition of OPEB and pe nsion liability expenses, de preciation on capital assets, expenses related to recording the imp act of compensated absences, and defe rred outflows and inflows related to pension and OPEB. Employee compensation, operating expenditures, and internal service fund expenses are also reflected in this amount.
 Expenses for general government comprise 27% of tota l governmental activities, or $42.5 million. General government includes functions such as human resources, fi nance administration, engineering and City Council.

This amount is comparable to the prior year ($42.2 million).  Expenses for public safety represent 53% of total gover nmental activities in the amount of $83.9 million. The main operations within public safety are the Police and Fire Departments. These departments are service-centric.

As such, personnel costs represent the majority of costs in these departments. The effect of salary increases, pension cost increases and the recognition of OPEB and pension liability tend to have a larger impact proportionately for public safety activities. The variance ove r the prior year reflects an increase of nearly $13 million ($70.4 million in FY 2024 versus $83.9 million in FY 2025). This is attributed to higher expenses assigned from the internal service funds, higher expenses related to depreciation and a notably higher ($2.8 million increase) recording of changes in pension under GASB 68 for public safety.  Expenses for highway and streets are 8.6% of all gove rnmental activities, or $13.6 million. These expenses include spending on the City’s Pavement Accelerated Rehabilitation Implementation Strategy (PARIS) program, operations and maintenance related to roads and electrical as well as other capital repairs to road infrastructure.

The amount is similar to the prior year ($13.9 million).  Culture and recreation, Library, and interest on l ong-term debt comprise 7%, 4%, and 0.5% of government activity respectively, or $10.4 million, $6 million, and $819,000. These amounts are roughly comparable to the prior year.

Redlands Regular Meeting of 02-17-26
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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2025

17 Expenses and Program Revenues: Business Type Activities Fiscal Year Comparison

Major differences between revenues and expenses for business-type activities are show in the two charts above.

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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2025

18 Water Fund
 Fiscal year 2025 saw a significant increase in Water reve nues of $8.1 million, or 27.7%, and an increase in expenses of $2.6 million, or 8.5%.
o Increased revenues are attributable to several factors. In July 2024, the City Council approved a 2 percent rate increase for customers, which became effective in August 2024. In addition, the City added nearly 150 new customer accounts as a result of newly constructed single-family residences connecting to the utility system. Finally, the near completion of the Smart Meter replacement project has improved water-meter accuracy, resulting in a more precise capture of customer usage. As water meters age, they are known to slow and under-register consumption; the replacement of older meters is therefore increasing billed usage by more accurately reflecting actual water consumption. o Expenses increased by $2.6 million this year. While a variety of accounts increased and decreased among expense categories, the largest contributor was an increased spending on meter replacements, from $2.6 milllion in the prior year to $4.2 million in FY 2025. Street repair work replated to pipeline repair was also up by $345,800. Expenses related to salaries and benefits also increased by roughly $600,000.

Solid Waste (Disposal) Fund
 For Solid Waste (Disposal) operations, there was an increase in revenues over fiscal year 2024 of $1.6 million, or 7.6% and a decrease in expenses in the amount of $5.2 million, or 22.5%. o The increase in revenues is due to a 9% rate incr ease that was approved by Council in July 2024 and became effective January 1, 2025. Besides fundi ng the necessary replacement of aging collection vehicles and inflation driven cost increases, the rate increase is needed to f und compliance with the mandatory requirements of Senate Bill 1383 which will reduce greenhouse emissions related to organic waste disposal.
o The $5.3 million decrease in expenses co mpared to the prior year is dr iven by several factors. Most significantly, the prior fiscal year included a substantial one-time adjustment related to the recognition of closure and post-closure maintenance expenses for the California Street Landfill; as a result, current- year expense for this item was $3.2 million lower th an the prior year. In a ddition, internal service charges decreased by approximately $1.2 million, primarily related to IT, fleet maintenance, and utility billing services. These reductions reflect the fund’s lower overall expenditure levels, as internal service fund charges are generally allocated based on budgete d costs. Finally, salaries and benefits expenses declined by approximately $711,000, largely attributable to reduced pension-related costs.

Wastewater (Sewer) Fund
 In the Wastewater (Sewer) Fund, revenues increased by $1.3 million, or 9%, and expenses decreased by $915,000, or 5.7%.
o The increase in revenues is related to a rate incr ease of 10% approved by Council in July 2024 and effective August 2024. The City recently completed a wastewater utility master plan that identifies necessary capital improvements for the efficient and effective operation of the City’s wastewater utility infrastructure. These rate increases are intended to fund improvements to the utility infrastructure, including a significant $45 million upgrade to the Wastewater Treatment Plant during the next 5 years. o Lower expenses primarily reflect reduced pension -related costs and changes in pension liability recognition, resulting in approximately $1.0 million in savings. These savings were partially offset by routine fluctuations across individual expense cat e
gories, which increased or decreased modestly
during the year.

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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2025

19 Nonmajor Business-Type Funds
o The Groves Fund experienced a significant decrease in revenue by roughly $466,800, or 54%. This follows a prior year decline of roughly $836,000 (or 97%). While citrus revenues are inherently volatile due to fluctuations in market conditions, these recent declines were exacerbated by plant-pest quarantine orders issued by the California Depart ment of Food and Agriculture as a result of the Oriental fruit fly (OFF) quarantine affecting por tions of the Inland Empire. Under these orders, harvested citrus fruit was required to be diverted to juice or processing markets rather than sold as fresh fruit. Revenues from juice and processing markets are significantly lower than those generated from fresh-market sales, resulting in materially reduced revenue to the Fund during the affected periods. The applicable quarantine restrictions have since been lifted, and the City anticipates a full recovery of citrus revenues in the coming fiscal year, assuming normal growing and market conditions. o The Non-Potable Water Fund experienced an increase in revenues of 62.4%, or $400,200. The increase in revenue is related to an increase in charges for nonpotable water service as connections to the system begin to expand ($285,700), as well as a capital contribution of infrastructure from private development proects ($196,000). The City is actively working on a plan to enable more consumption of nonpotable water through transmission projects. Expenses we re down significantly, by 37%, or $353,700, reflecting higher expenses in the prior year related to receycled water well and booster pump maintenance and repair.
o The Hillside Memorial Cemetery had a 19% increase in revenues of $217,000 due to higher cemetery lot and crypt sales. There was a commensurate reduction in expenses as well ($228,300, or 23.8%) mostly due to savings in pension cost and expense recognition. o The Aviation fund saw a large increase in revenues of $549,700, or 406%, entirely related to one-time revenue from the FAA’s Runway and Airport Pavement Treatment Program grant. Expenses also increased by roughly $412,200, or 57.6%. The increase is largely due to grant-related expenditures of $650,600 partially offset by a savings in salaries and benefits of $187,600.

Expenses by Type for Business-Type Activities

Redlands Regular Meeting of 02-17-26
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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2025

20 MAJOR FUNDS

As noted earlier, the City uses fund accounting to provide pr oper financial management of the City’s resources and to demonstrate compliance with finance-related accounting standards and legal pronouncements.

Major Governmental Funds. The General Fund is the chief operating fund of the City. At the end of June 2025, the total fund balance reported for the General Fund was $114,333 ,611, an increase of $3.2 million (2.8%) from the prior year ending fund balance of $111,176,689. This increase was driven primarily by growth in unassigned fund balance (of $2.9 million), largely reflecting expenditure savings realized during the fiscal year.

As a measure of the General Fund’s liquidity, it can be u seful to compare the total fund balance to total fund expenditures. This measure indicates that the fund balance is approximately 1 02% of general fund expenditures (of $112 million), however, only $63,374,540 of the $111 million fund balance is unassigned. The unassigned fund balance of $63.4 million, together with the $11.1 million in fund balance committed to stabilization arrangement (contingencies), is the only portion of fu nd balance readily available for spending and represents 66% of general fund expenditures. Total general fund expenditures this year were $112.2 million, which is $1.2 million higher than the prior year amount of $113.4 million. Total general fund revenues were $125.5 million, or 11% higher than the prior year amount of $122.6 million.

Significant changes in revenues for the City’s General Fund over the prior year are as follows:
 Property tax increased by $3.1 million, or 7.5%, marking another year of significant growth. This increase primarily reflects growth in assessed values enrolled during calendar year 2022, which are recognized in fiscal year 2025 property tax revenues due to the inherent lag between assessment activity and tax collection. During calendar year 2022, home prices and sales activity reached el evated levels for much of the year before higher interest rates began to cool the ho using market. As a result, the City’s total assessed valuation increased by approximately 9.1% for the fiscal year. Growth o ccurred across multiple property use categories, with residential properties accounting for approximately 49% of total assessed value growth. The largest contributors to overall growth included prior-year transfers of ownership (approximately 27%), the Proposition 13 CPI adjustment of 2% (approximately 22%), new residen tial and nonresidential cons truction (approximately 13% combined), and other valuation changes, including assessment adjustments and multi-parcel transactions. In addition, the assessment roll reflected several notable one-time increases related to large commercial and industrial properties, including State-assessed utility propert y, which contributed meaningfully to the year’s overall growth but may not recur annually.
 Overall sales tax decreased by $541,000, or 1.1%, reflecting the inherently elastic nature of this revenue source, which, unlike property tax, is more immediately responsive to current economic conditions. The modest decline is attributable to continued inflationary pressures on consumers and a corresponding pullback in discretionary spending, as higher costs for essential goods and services have constrained household purchasing behavior.  Other taxes include possessory interest taxes, the City’s transient occupancy tax (hotel tax), and the mining tax.

Total revenues in this category declined by approximat ely 2.5%, or $67,600, compared to the prior year. The decrease was driven primarily by a reduction of approxi mately $187,300 in possessory interest tax revenues, reflecting the termination or non-renewal of certain leases of public property. Transient occupancy tax revenues remained relatively stable, increasing by approximatel y $43,100, while mining tax revenues increased by approximately $76,600, partially offsetting the decline in possessory interest rece ipts.
 Franchise fee revenue declined by approximately $1.8 million, or nearly 40%, compared to the prior year. The decrease reflects a return to more typical revenue levels following an unusually strong prior year driven by timing-related factors and higher utility revenues that did not recur in fiscal year 2025. Changes in billing timing and customer usage patterns also contributed to the reduction.  Licenses and permits reflect an increase of $541,800 or 5.9%. This increase is due to increased building- and construction-related activity, for whic h there were higher amounts of perm its issued related to building, conditional use permits, street encroachments, and code variances.

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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2025

21  Intergovernmental revenues increased by $465,900 or 59.7%, which is primarily the result of a very significant increase in Mutual Aid received in the current fiscal year. This year-to-year amount in this revenue category fluctuates according to wildfires and other extreme conditions where mutual aid assistance has been requested by other cities and fire departments and is then reimbursed after the fact.  Charges for services increased by $556,600, or 7.8% from prior year. While there are variations over and under in each revenue account, the largest increases were in the categories of plan check, rental property inspections and application/filling fees.
 Investment income increased modestly by $88,700, or 1.6%, from the prior year, reflecting stable cash balances and continued favorable interest rates during the fiscal year.  For Rents and leases, revenue increased by $141,200, or 12.1%. This increase reflects a robust increase in recreation rentals. As a result of newly renovated spaces, like the Joslyn Senior Center, Recreation staff have been able to market these facilities to larger audiences and accommodate larger events generally.  Miscellaneous revenue increased by roughly $179,700, or 8.5%. While several accounts in this category experienced fluctuations, the main driver of the increase was a donation from Toyota of Redlands in the amount of $250,000 towards the funding of a wellness/gym facility for the planned Safety Hall Building.  Transfers in decreased in FY 2025 over the prior year by approximately $89,900, a 3.2% decrease. This was primarily a result of the decrease in fixed asset transfers from the Water, Wastewater, and Solid Waste funds.

The Governmental Grants Fund accounts for the receipt and expenditure of grant revenues supporting the City’s governmental activities and represents the primary fund th rough which the City administers its grant-funded programs. This fund captures nearly all grant activity related to general government operations, public safety, planning and homelessness initiatives, and capital infrastructur e projects. Most notably, the fund tracks the City’s allocation of Coronavirus State and Local Fiscal Recovery Funds issued through the American Rescue Plan Act in the amount of $11,508,106, the largest federal grant award the City has received to date.

In addition, the fund accounts for several other significant grant programs, including transportation-related engineering grants and equipment and facility grants s upporting the Police and Fire Departments. The fund also tracks all grant revenues supporting the City’s Homelessness Solutions Team, including the California Department of Housing and Community Development’s Encampment Resolution Funding Program awards. During fiscal year 2025, the City received a new Encampment Resolution Funding (ERF-3-R) Program award in an amount not-to- exceed $4,155,600. This fund also accounts for a $2.0 million grant from the California Natural Resources Agency awarded in fiscal year 2025 to support completion of the Museum of Redlands construction project.

Major Enterprise Funds. The Water Fund has a total net position of $158.4 million at the end of the fiscal year, $22.2 million of which is unrestricted. The Solid Waste (Disposal) Fund has a total net position deficit of ($712,000) at the end of the fiscal year, which marks a $3.6 million reduction over the prior fiscal year; and its unrestricted net position is a deficit of ($19.3 million). The Wastewater Fund has a total net position of $57.5 million at the end of the fiscal year; $529,00 of which is unrestricted. These funds account for the respective utility services provided by the City. Other factors concerning the finances of these funds have already been addressed in the discussion of the City’s business-type activities.

GENERA

L FUND BUDGET

Differences between the final budget and fiscal year 2025 ac tivity in the General Fund can be briefly summarized as follows:

 Total Revenues – $10.3 million received in excess of budgeted amounts.  General Government – spent $5 million less than the final amount appropriated in the budget (savings).  Public Safety – spent $3.5 million less than the final amount appropriated in the budget (savings).  Culture and Recreation – spent $1.5 million less than the final amount appropriated in the budget (savings).

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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2025

22  Highways and Streets – spent $495,200 less than the final amount appropriated in the budget (savings).  Library – spent roughly $518,800 less than budgeted.
 Transfers Out – had a favorable variance of $7.2 milli on, as actual transfers were lower than the amount budgeted in the final budget.
 Capital Outlay – there was a positive variance between the final budget and the amount expended of $3.8 million.
 Debt Service – in this category, there was savings of $984,900 when comparing the final budget to the actual amount expended during this fiscal year.

Deviations in major categories between the final budget of the General Fund and its actual operating results were as follows. (Note: budget savings are listed as positive figures.)

General Fund revenues remained highly concentrated in the City’s two primary tax sources, property tax and sales tax, which together accounted for approximately 73% of total revenues for the year. Excluding the accounting-related inception of lease liability, actual General Fund revenues ex ceeded budget estimates by $8.2 million. This favorable variance was driven in part by stronger-than-anticipated growth in property tax revenues, as discussed earlier in this section. Property tax has exhibited sustained growth over the past several years, supported by significant increases in the City’s total assessed valuation. Whil e assessed value growth has b een robust over the last five years, the pace of growth is expected to moderate in future years as market conditions normali ze. Higher-than-anticipated property tax revenues helped offset underperformance in more econom ically sensitive revenue sources, including sales tax and franchise fees.

Final Budget Actual Amounts + (-) Variance

REVENUES
Taxes 95,292,857 $ 97,363,180 $ 2,070,323 $ License and permits 8,593,681 9,780,390 1,186,709 Fines and forfeitures 85,100 71,312 (13,788) Intergovernmental 499,640 1,246,109 746,469 Charges for services 7,283,660 7,657,756 374,096 Investment income (loss) 2,420,000 5,736,405 3,316,405 Rents and leases 1,258,522 1,308,803 50,281 Miscellaneous 2,040,476 2,291,210 250,734 Transfers in 2,506,621 2,760,231 253,610 Inception of lease liability - 2,098,978 2,098,978 Total Revenues 119,980,557 130,314,374 10,333,817 EXP ENDITURES *
General Government 30,932,530 25,885,323 5,047,207 Public Safety 62,415,093 58,903,986 3,511,107 Culture & Recreation 10,479,714 8,930,389 1,549,325 Highways & Streets 5,900,313 5,405,089 495,224 Library 3,929,254 3,410,455 518,799 Transfers 22,166,495 14,995,869 7,170,626 Capital Outlay 11,671,681 7,893,014 3,778,667 Debt Service 2,718,190 1,733,327 984,863 Total Expenditures 150,213,270$ 127,157,452 $ 23,055,818 $ *Budget savings noted as positive figures
Redlands Regular Meeting of 02-17-26
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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2025

23 The other significant variation vis-à-vis budget is the in ception of lease liability in the amount of $2.1 million. In compliance with GASB Statement No. 87, the City recognizes lease agreements as part of its financial activities. In essence, GASB 87 requires the lease liability to be recorded as if the City received financing, even though no cash was actually received. This year, the inception of lease liability is reported under General Fund revenues to reflect the financial impact of new lease agreements for key operational assets, including:

 Police Patrol Vehicles: Essential for maintaining public safety and responding to emergencies.  Public Works Vehicles: Critical for infrastructure maintenance and other city services.  Fire Department Vehicles: Used for non-emergency tasks such as inspections, logistics, and administrative duties.

The "inception of lease liability" represents the initial recognition of these lease agreements as a financing source, which include the future lease payments that the City is obligated to make. These are offset by the City's right to use the vehicles during the lease term.

All revenue categories had positive variances, except for the categories of Fines & Forfeitures.

o Investment income exceeded the final budget by $3.3 million, resulting in a significantly favorable variance.

The City intentionally budgets invest ment income conservatively to avoid reliance on market conditions that may fluctuate from year to year and to preserve budge t stability. The favorable va riance realized during the year reflects higher-than-anticipated interest earnings dr iven by elevated short-term interest rates, strong investment portfolio performance, and the timing of cash balances maintained throughout the fiscal year.

o Licenses and permits performed better than expected, ro ughly $1.2 million, or 13. 8%, above forecasts. This was mainly due to increased receipts from building permits and associated activity.

o Intergovernmental revenue was higher than expected by approximately $746,500, or 149%. This is due mainly to the timing of mutual aid reimbursement revenues, as the reimbursement process can lag by 60 to 90 days after the City’s request for reimbursement of the related funds. Higher-than-anticipated revenue from mandated cost reimbursement also contributed to this increase.

o Charges for service were slightly higher by $374,100, or 5.1%. This revenue category covers numerous individual revenue objects. While many areas fluctuat ed between actual amount and the final budget amount, the largest variance was an increase in receipts from Build ing & Safety plan checks, rental inspections and application filing fees.

o Rents and leases were roughly $50,300 higher than bu dgeted amounts. These revenues include lease revenue from a six-story office building located at 300 East State Street in downtown Redlands. Increases are attributed to higher than expected rental of recreation facilities.

o Transfers in were higher than budgete d by 10.1%. This can be attributed to higher funding received from the Gas Tax Fund and the Traffic Safety Fund. This is caused by more revenue than anticipated being collected in these funds, as both of them are cleared to zero at the end of the accounting cycle, transferring all of their revenue into other funds, with most of it going to the General Fund.

o Miscellaneous revenues were up by $250,700, or 12.3%. This was mainly due to an increase in miscellaneous receipts from the transfer of late fees from the Enterprise Funds to the General Fund.

Redlands Regular Meeting of 02-17-26
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City of Redlands
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2025

24 Total General Fund expenditures ended the year under budget by 15.3%, or $23.1 million. The majority of the unspent funds will be carried forward to the subsequent fiscal year (2026) for expenditure.

o General Government expenditures ended the year under budget by 16.3%, or $5 million. This savings is mainly due to underspending with regard to the governmental grants fund for homelessness solutions-related grants, specifically a savings between full time staff salaries and special program expend itures totaling $4.9 million, although several accounts of expenses fluctuated up and down within this category.

o Public Safety expenditures were unde r budget by $3.5 million, or 5.6%. $2. 8 million of this savings can be attributed to the high vacancy rate experienced by the Police Department, which encountered significant difficulty recruiting new police officers during the fiscal year. Fire also experienced roughly $617,000 in salary savings due to vacancies in the Emergency Services Fund.

o Culture and Recreation came in under budget by roughly $1.5 million, or 14.8%, this was attributable to unspent funding on projects in the Parks division, as well as other fluctuations across multiple expenditure categories in Parks, Trees and Recreation & Senior Services divisions as well as a small amount of salary savings.

o Highways and Streets expenditures were under budget by $495,200, or 8.4%. This savings was mainly a result of savings in the Streets Division in contractual a nd garage expenses, offset by some overspending in the Electrical Division, as well as savings in the development impact fee funds for arterial street construction, traffic signals, and freeway interchanges. The latter is mainly dependent on the timing of projects.

o Library expenditures were just under budget by less than $518,800, or 13.2% at year-end. The variation includes salary savings, upsent project related funds and savings on non-capital expenditures.

o Capital outlay expenditures were $3.8 million, or 32.4%, below the final budget at year-end. The favorable variance is primarily attributable to the timing of expenditures associated with several major capital and infrastructure projects that were budgeted but not fully executed during the fiscal year. Delays were largely related to project scheduling, design development, procurement, and coordi nation with external agencies and contractors. Capital projects within the streets, pl anning, recreation, and animal services programs accounted for the majority of the unspent appropriations, with remaining funds expected to carry forward for completion in subsequent fiscal years.

o Actual debt service expenditures were below budgeted levels, at a savings of 36.2%, or $984,900, under budget.

While various accounts in this category fluctuate, this variance is due mainly to equipment & vehicle capital leases not being fulfilled by the manufacturer/suppliers by the end of the fiscal year. Most of these leases were for the Police Department, where roughly $1.5 million was budgeted to acquire patrol vehicle leases budgeted for in FY 2025. As noted above, almost all of these a ppropriations are carried over into the following fiscal year.

The General Fund realized a net favorable variance of $23.1 million between actual revenues and expenditures, reflecting a combination of conservative budgeting, disciplined expenditure management, and stronger-than-anticipated property tax performance. Revenue growth was led by property tax, while expe nditure savings were achieved across multiple operating categories, including salaries and benef its, contractual services, and vehicle and equipment purchases. These results demonstrate the City’s continued em phasis on maintaining structural balance and exercising prudent financial management.

Redlands Regular Meeting of 02-17-26
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City of Redlands
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2025

25 CAPITAL ASSETS AND DEBT ADMINISTRATION

Capital Assets

The City’s capital assets for its governmental and busin ess-type activities totaled approximately $880 million as of June 30, 2025 (net of accumu lated depreciation and amortization). This investment includes land; buildings and improvements; machinery and equipment; vehicles; infrastru cture; water rights; rights-of-way; and construction in progress. Capital assets also include lease assets and subscription assets recognized in accordance with GASB Statements Nos. 87 and 96, which require the recognition of right-to-use assets associated with lease and subscription- based arrangements.

Major capital asset events for Governmental Activities during FY 2025 include the following:

Within the Land category, the City acquired a public parking easement at 31 Stuart Street, providing a minimum of 200 parking spaces located on the third floor of the building. The easement was recorded as a capital asset at a cost of $1.9 million and resulted in a net increase of $1.9 million, or 4.6%, in the Land category during the fiscal year.

Buildings and Improvements – The City recorded several additions within this category during the fiscal year, including new HVAC systems at the Animal Shelter a nd Emergency Operations Cent er; guardrail installations along two minor streets and two arterial streets; and various park-related improveme nts, such as lighting and electrical upgrades at the Redlands Bowl and new lightin g at the Community Sports Park. Collectively, these additions increased the Buildings and Improvements category by $3.7 million, or 5.9%, during the year.

Additions and deletions to machinery, equipment, and vehicles in governmental activities resulted in a net increase of $1.1 million, 4.4%. This increase reflects the purch ase and installation of general office hardware, the implementation of a comprehensive network switch replacement project, a comprehensive Police Department Camera system replacement project, the addition of new traffic detection and control systems as well as a new fuel management system.

Net additions to infrastructure assets in general government activities totaled nearly $12.5 million, or 4.4%. Roughly $7 million of these additions were the result of projects constructed by the City, including the 2023 and 2024 Alley Paving Improvements and the 2024 street resurfacing project . Additions recorded as a result of private developer projects totaled roughly $7 million as well. Deletions in this category represent adjustments made when portions of existing infrastructure assets were replaced or reconstruc ted. Specifically, if an infrastructure asset was newly constructed, no deletions were recorded. However, if an asset was completely reconstructed, the full cost of the original asset was removed from the records as a dele tion. For assets where only a portion was removed and replaced, the corresponding percentage of the original asset's cost was recorded as a deletion in the accompanying schedules.

Right-of-way assets increased by $7.0 million, or 1.9%, during the fiscal year, representing a more modest increase compared to the prior year. Although a comparable amount of right-of-way acreage was added, the recorded value was lower because the City applied an average assessed value methodolog y based on parcels classified as government land by the County Assessor’s Office, which limited the overall increase in reported value.

Construction in Progress values in general government activities decreased slightly by almost $500,000, or 3%.

This decrease reflects completion of several large capital improvement projects and equipment purchases, including the Fire Station No. 262 Remodel Architectural and Construction Services, the Redlands Bowl Lighting, Speakers, Communication Outlets & Cabling Replacement, the purchase of three Type I Fire Engines, and the 2024 Alley Paving Improvement Project. Transfers and deletions in this category represent projects that were completed by June 30, 2025. Upon completion, these projects were recl assified into other asset categories, most commonly the infrastructure asset class, to reflect their transition from in-progress to capitalized assets.

Redlands Regular Meeting of 02-17-26
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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2025

26 Accumulated Depreciation increased by $7.3 million, or 4.5%. The City’s measurement of accumulated depreciation is based on estimated useful lives by infrastru cture asset type. Estimated useful lives were initially established using engineering standards, as well as discussions with City staff regardi ng the City’s maintenance program for each asset type. The largest increases were in the categories of infrastructure and buildings & improvements.

Overall, lease assets increased by roughly $2 million, or 46.2%, as a result of new lease agreements for public works and public safety vehicles.

Overall, subscription assets decreased by roughly $81,700, or 19%, as a result of expired subscriptions in whole or part.

Accumulated amortization represents the portion of lease and subscription asset values that has been expensed over time as the City uses these assets, in accordance with GASB standards. Duri ng the fiscal year, accumulated amortization increased by approximately $624,000, re flecting ongoing amortization of existing lease and subscription assets, partially offset by the addition of new assets with minimal amortization to date and adjustments related to asset reclassifications.

For business type activities, machinery, equipment and vehicle assets increased by roughly $872,000, or 3.62%, representing purchases of office, laboratory and sampling equi pment as well as the purchase of three (3) front-loading solid waste collection vehicles.

Building & Improvements increased by roughly 0.9%, or $1.1 million.

Machinery & Equipment increased by $2.9 million, or 11.6%.

Infrastructure assets increased by roughly $10.3 million, or 4.9%. Roughly $6.9 million of this increased is attributed to the 2022 & 2023 CIP Sewer Pipeline Replace ment project as well as the 2024 Sewer Pipeline and Manhole Rehabilitation project. Another $2.8 million is attri buted to private development projects contributing to Water System infrastructure.

Construction in progress increased by $5 .6 million, or 45.7%, during the fiscal year, reflecting the initiation and continued advancement of several major capital projects. Notable projects contributing to this increase include the 2023 CIP Water Pipeline and Highline Replacement Proj ect and the Wastewater Treatment Plant Phase II Modifications project. These increases were partially o ffset by the completion of various projects that were transferred out of construction in progress upon placement into service.

Accumulated depreciation increased by $6.8 million, or 3. 4%, with the largest increas es in the categories of infrastructure and building & improvements.

Lease Assets increased by $1.1 million, or 39%. This refl ects new vehicle leases in th e Water, Wastewater and Solid Waste divisions.

As noted above, accumulated amortization represents the portion of lease and subscription asset values that has been expensed over time as the City uses these assets, in accordance with GASB standards. During the fiscal year, accumulated amortization increased by approximately $715,300, reflecting continued amortization of existing lease and subscription assets, partially offset by the addition of new assets with minimal amortization to date and adjustments related to asset reclassifications.

Overall, for primary government the City’s net capital assets increased somewhat significantly by $33.3 million for the fiscal year ended June 30, 2025, or 3.9% over prior year. This is slightly lower than the previous year’s increase of

5.7%.

Redlands Regular Meeting of 02-17-26
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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2025

27 Capital assets for the governmental and business type activities are presented below to illustrate changes from the prior year:

Internal Service Fund capital assets, net of accumulated depreciation, are included in Governmental Activities.

Additional information on the City’s Capital Assets can be found in Note 6 of the section titled Notes to the Basic Financial Statements.

Long-Term Liabilities

Major long-term liability events during FY 2025 include the following:

 The Lease liability category increased by $1.3 million, or 25.2% as a result of the addition of new leases for vehicles in Police, Fire, Recreation, Streets, Parks, Engineering, Water and Wastewater operations.

 Subscription liability increased by $42,000, or 76.4%, during the fiscal year, reflecting the net effect of the expiration of certain technology agreements and the initiation of new subscription-based arrangements.

 Taxable pension bonds experienced a decrease of 3.6% as a result of annual debt service and no new additions were made to such debt.

 Notes payable decreased by roughly $971,400, or 6%, as a result of repayments and no new additions to debt in this category.

 Claims payable increased by $4.4 million, or 28.6%, during the fiscal year. The increase reflects a higher volume of claims filed against the City. Claims activity can fluctuate significantly from year to year based on the timing and nature of filings.

 Compensated absences increased by approximately $5.3 million, or 54%, during the fiscal year. This increase is primarily attributable to the City’s implementation of GASB Statement No. 101 in fiscal year 2025, which requires the recognition of compensated absence liabilities based on leav e benefits earned by employees and the likelihood that those benefits will ultimately be used or paid.

Inc./ (Dec.)
2025 2024 2025 2024 2025 2024 % of Change
Land 43,645,905$ 41,707,282$ 28,069,057$ 28,069,057$ 71,714,962$ 69,776,339$ 2.8% Buildings & Im provem ents 66,402,490 62,724,536 124,326,375 123,210,762 190,728,865 185,935,298 2.6% Machinery/Equip./V ehicles 26,613,395 25,482,981 27,872,228 24,968,572 54,485,623 50,451,553 8.0% Infrastructure 295,294,847 282,812,418 221,087,892 210,736,273 516,382,739 493,548,691 4.6% Water Rights 408,125 408,125 9,792,995 9,792,995 10,201,120 10,201,120 0.0% Right of Way 373,876,657 366,862,877 - - 373,876,657 366,862,877 1.9% Construction in Progress 15,808,739 16,307,905 17,768,499 12,194,230 33,577,238 28,502,135 17.8% Accum ulated Depreciation (169,946,905) (162,650,313) (208,671,732) (201,824,376) (378,618,637) (364,474,689) 3.9% Lease Assets 6,401,170 4,377,917 3,971,466 2,854,808 10,372,636 7,232,725 43.4% Subscription Assets 341,190 422,936 - - 341,190 422,936 (19.3%) Accum ulated Am ortization (1,904,475) (1,280,507) (1,094,882) (379,595) (2,999,357) (1,660,102) 80.7% Total 656,941,138$ 637,176,157$ 223,121,898$ 209,622,726$ 880,063,036$ 846,798,883$ 3.9% Governmental Activities Business-Type Activities Total
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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2025

28  The landfill closure liability increased slightly by $578,3 00, or 3.75%. The landf ill closure liability increased slightly by $578,300, or 3. 75%, primarily due to updated cost estim ates and the passage of time as additional closure and post-closure obligations are recognized in accordance with regulatory requirements.

 After two years of favorable trends, the City’s to tal OPEB liability increased by $11.1 million, or 8.2%, primarily due to changes in actuarial assumptions and the normal accrual of benef its, partially offset by continued contributions and plan experience.

 The City’s net pension liability decreased by $5.2 million, or 3.1%, during the fiscal year, primarily reflecting favorable investment performance and actuarial experience within the pension plans, partially offset by the normal accrual of benefits.

Long-term liabilities for governmental and business type activities are presented below to illustrate changes from the prior year:

Additional information on the City’s long-term liabilities can be found in Notes 7 and 9-13 of the Notes to the Basic Financial Statements.

REQUESTS FOR INFORMATION

This financial report is designed to provide a general overview of the City’s finances. Questions concerning any of the information provided in this report or requests for additiona l financial information should be sent to the Management Services Department at [email protected] or to Management Services / Finance Director, 35 Cajon Street, Suite 222, Redlands, CA 92373. This fina ncial report is also available in electronic format on the City’s website at http://cityofredlands.org/finance/annualreport. Additional information intended for the business community is available on the Economic Development web page also lo cated on the City’s website listed above at http://www.cityofredlands.org/ED.

Inc./ (Dec.)
2025 2024 2025 2024 2025 2024 % of Change
Lease Liability 3, 984,583$ 2,941,545 $ 2,514,839 $ 2,249,119 $ 6,499,422 $ 5,190,664 $ 25.21% Subs cription Liability 97,108 55,044 - - 97,108 55,044 76.42% Tax able Pension Bonds 4, 309,904 4,469,940 - - 4,309,904 4,469,940 -3.58% Notes Payable 4,565,774 4,789,210 10,561,432 11,309,430 15,127,206 16,098,640 -6.03% Claims Payable 19,852,779 15,433,473 - - 19,852,779 15,433,473 28.63% Compensated Absences* 12,827,227 12,209,764 2,415,206 2,261,528 15,242,433 14,471,292 5.33% Landfill Clos ure Liability - - 15,996,513 15,418,260 15,996,513 15,418,260 3.75% Total OPEB Liability 98,257,355 89,577,526 42,703,270 40,315,855 140,960,625 129,893,381 8.52% Net Pens ion Liability 137,481,905 139,682,059 21,072,264 24,033,967 158,554,169 163,716,026 -3.15% Total 281,376,635$ 269,158,561 $ 95,263,524 $ 95,588,159$ 376,640,159$ 364,746,720 $ 3.26% *The balance in FY 2024 for compensated absences has been restated in accordance with GASB 101. More detail is available in Not e 1 - M and Note 9.

Gov ernmental Activ ities Business-Type Activ ities Total Redlands Regular Meeting of 02-17-26
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BASIC FINANCIAL STATEMENTS
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GOVERNMENT-WIDE FINANCIAL STATEMENTS
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Governmental Business-Type
Activities Activities Total
ASSETS
Current assets:

Cash and investments 175,704,531 $ 106,888,214$ 282,592,745$ Accounts receivable, net 1,926,414 10,373,559 12,299,973 Taxes receivable 10,090,098 2,209 10,092,307 Interest receivable 1,366,830 638,617 2,005,447 Lease receivable - due within one year 606,553 216,649 823,202 Due from other governments 2,041,360 705,208 2,746,568 Prepaid items 698,523 21,618 720,141 Inventories 343,262 - 343,262 Internal balances 417,285 (417,285) - Total current assets 193,194,856 118,428,789 311,623,645 Noncurrent assets:

Restricted cash and investments 284,866 712,985 997,851 Loan receivable 551,178 - 551,178 Lease receivable - due in more than one year 2,206,272 1,950,001 4,156,273 Capital assets:

Non-depreciable/amortizable 433,739,426 55,630,551 489,369,977 Depreciable/amortizable, net 223,201,712 167,491,347 390,693,059 Total capital assets 656,941,138 223,121,898 880,063,036 Total noncurrent assets 659,983,454 225,784,884 885,768,338 Total assets 853,178,310 344,213,673 1,197,391,983

DEFERRED OUTFLOWS OF RESOURCES
Related to OPEB 32,082,610 10,696,551 42,779,161 Related to pensions 38,219,065 4,632,174 42,851,239 Total deferred outflows of resources 70,301,675 15,328,725 85,630,400

June 30, 2025
Statement of Net Position
City of Redlands
Primary Government
See accompanying Notes to the Basic Financial Statements. 32 Redlands Regular Meeting of 02-17-26
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Governmental Business-Type
Activities Activities Total

LIABILITIES
Current liabilities:

Accounts payable 7,536,127 6,733,717 14,269,844 Accrued payroll 4,826,878 1,274,954 6,101,832 Interest payable 117,097 98,524 215,621 Unearned revenue 7,006,874 308,451 7,315,325 Deposits payable 3,582,785 3,092,141 6,674,926 Compensated absences - due within one year 6,413,615 1,207,604 7,621,219 Claims payable - due within one year 9,926,390 - 9,926,390 Long-term debt - due within one year 1,477,783 2,198,446 3,676,229 Total current liabilities 40,887,549 14,913,837 55,801,386 Noncurrent liabilities:

Compensated absences - due in more than one year 6,413,612 1,207,602 7,621,214 Claims payable - due in more than one year 9,926,389 - 9,926,389 Long-term debt - due in more than one year 11,479,586 10,877,825 22,357,411 Landfill closure liability - 15,996,513 15,996,513 Total OPEB liability - due in more than one year 98,257,355 42,703,270 140,960,625 Aggregate net pension liability - due in more than one year 137,481,905 21,072,264 158,554,169 Total noncurrent liabilities 263,558,847 91,857,474 355,416,321 Total liabilities 304,446,396 106,771,311 411,217,707

DEFERRED INFLOWS OF RESOURCES
Related to leases 2,622,941 2,002,410 4,625,351 Related to OPEB 50,133,050 13,852,076 63,985,126 Related to pensions 593,834 - 593,834 Total deferred inflows of resources 53,349,825 15,854,486 69,204,311

NET POSITION
Net investment in capital assets 648,293,673 210,045,627 858,339,300 Restricted:

Donations 1,067,304 - 1,067,304 Grants 307,604 - 307,604 PEG fees 724,992 - 724,992 Park and open space acquisition/improvement 5,945,504 - 5,945,504 Public facilities 2,545,043 - 2,545,043 Public safety 398,763 - 398,763 Police programs and equipment 1,964,140 - 1,964,140 Public art 10,335 - 10,335 Street reconstruction/improvement projects 13,777,723 - 13,777,723 Debt service 637,959 462,600 1,100,559 Capital projects 3,063,594 19,193,915 22,257,509 Endowment - non-expendable - 110,741 110,741 Endowment - expendable 35,245 - 35,245 CFD assessment 201,474 - 201,474 Total restricted 30,679,680 19,767,256 50,446,936 Unrestricted (deficit) (113,289,589) 7,103,718 (106,185,871) 565,683,764$ 236,916,601$ 802,600,365$ Total net position Primary Government
City of Redlands
Statement of Net Position (Continued)
June 30, 2025
See accompanying Notes to the Basic Financial Statements. 33 Redlands Regular Meeting of 02-17-26
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Operating Capital
Charges for Grants an d Grants and
Functions/Programs Expenses Services Contributions Contributions Total Primary government:

Governmental activities:

General government 42,523,409$ 16,977,454 $ 6,950,745 $ 222,079 $ 24,150,278 $ Public safety 83,895,046 805,711 1,208,550 257,320 2,271,581 Culture and recreation 10,439,921 612,736 1,324 448,667 1,062,727 Highway and streets 13,578,992 387,015 - 23,741,631 24,128,646 Library 6,009,854 4,980 1,806,002 149,280 1,960,262 Interest on long-term debt 819,129 - - - - Total governmental activities 157,266,351 18,787,896 9,966,621 24,818,977 53,573,494 Business-type activities:

Water 33,200,910 30,527,328 2,722,500 3,856,396 37,106,224 Disposal 17,794,049 22,361,903 131,457 88,151 22,581,511 Wastewater 15,228,817 13,757,797 - 2,217,248 15,975,045 Groves 1,560,580 378,608 - - 378,608 Non-Potable 228,214 839,500 57,573 195,984 1,093,057 Cemetery 1,170,759 1,164,434 - - 1,164,434 Aviation 1,202,040 165,683 585,761 - 751,444 Total business-type activities 70,385,369 69,195,253 3,497,291 6,357,779 79,050,323 Total primary government 227,651,720$ 87,983,149 $ 13,463,912 $ 31,176,756 $ 132,623,817 $

City of Redlands
Statement of Activities
For the Year Ended June 30, 2025
Program Revenues
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Governmental Business-type
Functions/Programs Activities Activities Total
Primary government:

Governmental activities:

General government (18,373,131)$ - $ (18,373,131)$ Public safety (81,623,465) - (81,623,465) Culture and recreation (9,377,194) - (9,377,194) Highway and streets 10,549,654 - 10,549,654 Library (4,049,592) - (4,049,592) Interest on long-term debt (819,129) - (819,129) Total governmental activities (103,692,857) - (103,692,857) Business-type activities:

Water - 3,905,314 3,905,314 Disposal - 4,787,462 4,787,462 Wastewater - 746,228 746,228 Groves - (1,181,972) (1,181,972) Non-Potable - 864,843 864,843 Cemetery - (6,325) (6,325) Aviation - (450,596) (450,596) Total business-type activities - 8,664,954 8,664,954 Total primary government (103,692,857) 8,664,954 (95,027,903) General Revenues and Transfers:

General revenues:

Taxes:

Property taxes 45,991,007 115,954 46,106,961 Sales and use taxes 47,088,618 - 47,088,618 Franchise taxes 2,685,573 - 2,685,573 Other taxes 2,744,184 - 2,744,184 Total taxes 98,509,382 115,954 98,625,336 Investment income 9,605,154 5,418,312 15,023,466 Gain on sale of capital assets - - - Intergovernmental - unrestricted 1,341,917 - 1,341,917 Miscellaneous revenue 2,634,249 2,698,968 5,333,217 Transfers 2,925,235 (2,925,235) -
Total general revenues and transfers 115,015,937 5,307,999 120,323,936 Change in net position 11,323,080 13,972,953 25,296,033 Net Position:

Beginning of year, as restated (Note 19) 554,360,684 222,943,648 777,304,332 End of year 565,683,764$ 236,916,601 $ 802,600,365 $
For the Year Ended June 30, 2025
Statement of Activities (Continued)
City of Redlands
Net (Expense) Revenue
and Changes in Net Position
See accompanying Notes to the Basic Financial Statements. 35 Redlands Regular Meeting of 02-17-26
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FUND FINANCIAL STATEMENTS
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Governmental Funds Financial Statements
General Fund - This fund accounts for all revenues and expenditures used to finance the traditional services associated with a municipal government which are not accounted for in the other funds. In Redlands, these services include general government, public safety, culture and recreation, highway and streets, and library.

Governmental Grants Special Revenue Fund - This fund accounts for the receipt and expenditure of grant monies received from various agencies for general government projects. 39 Redlands Regular Meeting of 02-17-26
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Governmental
Grants Non-major Total
General Special Revenue Governmental Governmental
Fund Fund Funds Funds
ASSETS
Cash and investments 113,513,844$ 5,057,788$ 32,091,467$ 150,663,099$ Restricted cash and investments - - 284,866 284,866 Accounts receivable, net 1,887,709 - 28,240 1,915,949 Taxes receivable 9,205,115 - 884,983 10,090,098 Interest receivable 1,220,731 - - 1,220,731 Lease receivable 2,812,825 - - 2,812,825 Due from other governments 544,043 1,451,310 46,007 2,041,360 Prepaid items 430,838 157,372 65,997 654,207 Due from other funds 420,168 - - 420,168 Loan receivable 551,178 - - 551,178 Total assets 130,586,451$ 6,666,470$ 33,401,560$ 170,654,481$

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable 3,924,070$ 838,123$ 1,086,414$ 5,848,607$ Accrued payroll 3,524,077 54,340 280,281 3,858,698 Deposits payable 3,045,423 - 537,362 3,582,785 Unearned revenues 1,133,738 5,309,031 564,105 7,006,874 Due to other funds - - 2,883 2,883 Total liabilities 11,627,308 6,201,494 2,471,045 20,299,847

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 2,002,591 1,337,242 198,048 3,537,881 Deferred inflows related to leases 2,622,941 - - 2,622,941 Total deferred inflows of resources 4,625,532 1,337,242 198,048 6,160,822

Fund Balances:

Nonspendable 982,016 157,372 96,197 1,235,585 Restricted 1,792,296 - 28,381,732 30,174,028 Committed 13,479,646 - - 13,479,646 Assigned 34,705,113 - 2,257,421 36,962,534 Unassigned (deficit) 63,374,540 (1,029,638) (2,883) 62,342,019 Total fund balances 114,333,611 (872,266) 30,732,467 144,193,812 Total liabilities, deferred inflows of
resources, and fund balances 130,586,451$ 6,666,470$ 33,401,560$ 170,654,481$ Major Funds
June 30, 2025
Governmental Funds
Balance Sheet
City of Redlands
See accompanying Notes to the Basic Financial Statements. 41 Redlands Regular Meeting of 02-17-26
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Total Fund Balances - Total Governmental Funds 144,193,812$ Unavailable revenues reported on the Governmenta l Fund Financial Statements resulting fro m activities in which revenues were earned but were not available are reclassified as revenues in the Government-Wide Financial Statements. 3,537,881
Capital Assets used in the governmental activities were not financial resources and therefore were not reported in the Governmental Funds Balance Sheet.

Government-Wide Statement of Net Position 656,941,138
Less: capital assets reported in Internal Service Funds (1,794,841) Total capital assets 655,146,297
Long-ter
m liabilities are not due and payable in the current period and therefore were not reported in the Governmental Funds Balance Sheet.

Amount reported in Government-Wide Statement of Net Position Compensated absences - due within one year (6,413,615)
Compensated absences - due in more than one year (6,413,612) Long-term debt - due within one year (1,477,783)
Long-term debt - due in more than one year (11,479,586) Less: amount reported in Internal Service Funds:

Compensated absences - due within one year 396,461
Compensated absences - due in more than one year 396,458 Long-term debt - due within one year 32,866
Long-term debt - due in more than one year 108,956
Total long-term liabilities (24,849,855)
Interest payable on long-ter m debt did not require current financial resources. Therefore, interest payable was not reported as a liability in the governmental funds. (117,097) Aggregate net pension liability and total OPEB liability used in the governmental activities were not financial resources and therefore were not re
ported in the Governmental Funds Balance Sheet.

Total OPEB liability (98,257,355)
Net pension liability (137,481,905)
Less: amount reported in Internal Service Funds:

Total OPEB liability 8,361,942
Net pension liability 6,546,230
Total OPEB and Pension (220,831,088)
Deferred outflows of resources related to OPEB and pensions are not available fo r current period and, therefore, are deferred in the governmental funds or not recorded in the governmental funds.

Amount reported in Government-Wide Statement of Net Position Deferred outflows of resources related to OPEB 32,082,610 Deferred outflows of resources related to pensions 38,219,065 Less: amount reported in Internal Service Funds:

Deferred outflows of resources related to OPEB (2,458,307) Deferred outflows of resources related to pensions (1,439,013) Total deferred outflows of resources 66,404,355
Deferred inflows of resources related to OPEB and pensions are not available fo r current period and, therefore, are deferred in the governmental funds or not recorded in the governmental funds.

Amount reported in Government-Wide Statement of Net Position Deferred inflows of resources related to OPEB (50,133,050) Deferred inflows of resources related to pensions (593,834) Less: amount reported in Internal Service Funds:

Deferred inflows of resources related to OPEB 3,998,134 Total deferred inflows of resources (46,728,750)
Internal service funds are used by management to charge the costs o f certain activities, such as flee t maintenance, risk management, and information technology, to individual funds. The assets and liabilities of the internal service funds are included in the
governmental activities in the statement of net position. (11,071,791) Net Position of Governmental Activities 565,683,764$
Amounts reported for Governmental Activities in the Statement of Net Position were different because:

City of Redlands
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2025
See accompanying Notes to the Basic Financial Statements. 42 Redlands Regular Meeting of 02-17-26
277 of 976
Governmental
Grants Non-major Total
General Special Revenue Governmental Governmental
Fund Fund Funds Funds
REVENUES:

Property taxes 44,844,805$ -$ 1,146,202$ 45,991,007$ Sales and use taxes 47,088,618 - - 47,088,618 Other taxes 2,744,184 - - 2,744,184 Franchise fees 2,685,573 - - 2,685,573 Licenses and permits 9,780,390 - 9,910 9,790,300 Fines and forfeitures 71,312 - 160,847 232,159 Intergovernmental 1,246,109 9,266,326 6,165,299 16,677,734 Charges for services 7,657,756 - 2,842,621 10,500,377 Investment income 5,736,405 34,021 1,093,837 6,864,263 Rents and leases 1,308,803 - 3,360 1,312,163 Miscellaneous 2,291,210 - 807,245 3,098,455 Total revenues 125,455,165 9,300,347 12,229,321 146,984,833

EXPENDITURES:

Current:

General government 25,885,323 5,849,237 2,066,133 33,800,693 Public safety 58,903,986 300,882 6,316,342 65,521,210 Culture and recreation 8,930,389 - 15,153 8,945,542 Highway and streets 5,405,089 - 1,154,891 6,559,980 Library 3,410,455 1,997,000 - 5,407,455 Capital outlay 7,893,014 1,991,780 6,492,585 16,377,379 Debt service:

Principal 1,195,665
- 268,988 1,464,653 Interest and fiscal charges 537,662 - 240,627 778,289 Total expenditures 112,161,583 10,138,899 16,554,719 138,855,201

REVENUES OVER (UNDER) EXPENDITURES 13,293,582 (838,552) (4,325,398) 8,129,632 OTHER FINANCING SOURCES (USES):

Inception of lease liability 2,098,978 - - 2,098,978 Transfers in 2,760,231 14,448 14,284,815 17,059,494 Transfers out (14,995,869) (66,702) (6,484,962) (21,547,533) Total other financing sources (uses) (10,136,660) (52,254) 7,799,853 (2,389,061) NET CHANGE IN FUND BALANCES 3,156,922 (890,806) 3,474,455 5,740,571 FUND BALANCES (DEFICIT):

Beginning of year 111,176,689 18,540 27,258,012 138,453,241 End of year 114,333,611$ (872,266)$ 30,732,467$ 144,193,812$ Major Funds
For the Year Ended June 30, 2025
Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances City of Redlands
See accompanying Notes to the Basic Financial Statements. 43 Redlands Regular Meeting of 02-17-26
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Total Fund Balances - Total Governmental Funds 5,740,571$ Governmental funds reported capital outlay as expenditures. However, in the Government-Wide Statement of Activities, the cost of those assets was allocated over their estimated useful lives as depreciation and amortization expenses. This is the amount of capital assets recorded in the current period (net of $1,411,688 added in internal service funds) ($87,165 of the governmental fund capital outlay balance were for repairs and maintenance expenditures). 16,377,379 In the Government-Wide Statement of Activities, donated assets are reported as a capital contribution. 15,891,456 Depreciation/amortization expense on capital assets was reported in the Government-Wid e Statement of Activities and Changes in Net Position, but they did not require the use of current financial resources. Therefore, depreciation/amortization expense, net of internal service funds of $575,318, was not reported as expenditures in the Governmental Funds. (11,131,197)
The net effect of various miscellaneous transactions involving capital assets (i.e. sales, trade-ins, and donations) decreased net position. (2,207,340)
Issuance o
f long-term liabilities provides current financial resources to governmental funds, but the issuance increased long- term liabilities in the Government-Wide Statement of Net Position.

Lease liabilities (2,098,978)
Repayment of long-term liabilities was an expenditures in governmental funds, but the repayment reduced long-term liabilities in the Government-Wide Statement of Net Position.

Principal payment of long-term debt (net of internal service funds principal payments of $94,448) 1,464,653 Amortization of accreted interes
t (39,964)
Interest expense on long-term debt was reported in the Government-Wide Statement of Activities, but it did not require the use of current financial resources. This amount represented the changes in accrued interest from prior year. 2,031 Compensate
d absences expenses reported in the Government-Wide Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds. (net of $44,920 added in internal service funds
). (572,543)
Revenues in the Government-Wide Statement of Activities that do not provide current financial resources and are not reported as revenue in the governmental funds. 1,270,457 Certain
pension expenses reported in the Government-Wid e Statement of Activities do not require the use o f current financial resources and therefore, are not reported as expenditures in governmental funds.

Changes in pension related deferred outflows of resources (11,753,826) Changes in net pension liabilities 1,955,668
Changes in pension related deferred inflows of resources 770,183 Certain OPEB expenses reported in the Government-Wid e Statement of Activities do not require the use o f current financial resources and therefore, are not reported as expenditures in governmental funds.

Changes in OPEB related deferred outflows of resources (388,386) Changes in total OPEB liabilities (7,884,023)
Changes in OPEB related deferred inflows of resources 6,775,361 The internal service funds are used by management to charge the costs o f certain activities, such as flee t maintenance, risk management, and information technology to individual funds. The net revenue of certain activities of internal service funds is reported with governmental activities. (2,848,422)
Change in Net Position of Governmental Activities 11,323,080$ Amounts reported for Governmental Activities in the Statement of Net Position were different because:

City of Redlands
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities and Changes in Net Position For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements. 44 Redlands Regular Meeting of 02-17-26
279 of 976
Proprietary Funds Financial Statements
Water Fund - This fund is used to account for the activities of the City's water utility operations, projects, debt service costs, and impact fees of the City.

Disposal Fund - This fund is used to account for the activities of the City's refuse disposal collection operations, projects, debt service costs, and impact fees of the City.

Wastewater Fund - This fund is used to account for the activities of the City's wastewater utility operations, projects, debt service costs, and impact fees of the City.

Internal Service Funds - These funds are used to provide goods and services by one department or agency to other departments or agencies of the City on a cost reimbursement basis. 45 Redlands Regular Meeting of 02-17-26
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Water Disposal Wastewater
Fund Fund Fund
ASSETS
Current assets:

Cash and investments 57,783,908$ 24,775,447$ 15,687,154$ Accounts receivable, net 5,204,488 3,091,911 1,761,039 Taxes receivable - 1,148 - Interest receivable 344,088 148,604 94,092 Lease receivable - due within one year 104,108 - - Due from other governments - - - Prepaid items 10,369 - 11,239 Inventories - - - Total current assets 63,446,961 28,017,110 17,553,524 Noncurrent assets:

Restricted cash and investments 702,995 - - Lease receivable - due in more than one year 1,559,514 - - Advances to other funds 360,077 680,157 - Capital assets:

Non-depreciable 30,738,985 40,737 9,471,438 Depreciable, net 107,421,104 10,642,422 46,800,160 Total capital assets 138,160,089 10,683,159 56,271,598 Total noncurrent assets 140,782,675 11,363,316 56,271,598 Total assets 204,229,636 39,380,426 73,825,122

DEFERRED OUTFLOWS OF RESOURCES
Related to OPEB 5,010,443 3,301,487 1,976,770 Related to pensions 1,908,847 1,307,174 1,145,704 Total deferred outflows of resources 6,919,290 4,608,661 3,122,474

(Continued)
Major Funds
City of Redlands
Statement of Net Position
Proprietary Funds
June 30, 2025
See accompanying Notes to the Basic Financial Statements. 46 Redlands Regular Meeting of 02-17-26
281 of 976
Governmental
Non-Major Activities
Enterprise Internal
Funds Total Service Funds
ASSETS
Current assets:

Cash and investments 8,641,705$ 106,888,214$ 25,041,432$ Accounts receivable, net 316,121 10,373,559 10,465 Taxes receivable 1,061 2,209 - Interest receivable 51,833 638,617 146,099 Lease receivable - due within one year 112,541 216,649 - Due from other governments 705,208 705,208 - Prepaid items 10 21,618 44,316 Inventories - - 343,262 Total current assets 9,828,479 118,846,074 25,585,574 Noncurrent assets:

Restricted cash and investments 9,990 712,985 - Lease receivable - due in more than one year 390,487 1,950,001 - Advances to other funds - 1,040,234 - Capital assets:

Non-depreciable 15,379,391 55,630,551 669,105 Depreciable, net 2,627,661 167,491,347 1,125,736 Total capital assets 18,007,052 223,121,898 1,794,841 Total noncurrent assets 18,407,529 226,825,118 1,794,841 Total assets 28,236,008 345,671,192 27,380,415

DEFERRED OUTFLOWS OF RESOURCES
Related to OPEB 407,851 10,696,551 2,458,307 Related to pensions 270,449 4,632,174 1,439,013 Total deferred outflows of resources 678,300 15,328,725 3,897,320

(Continued)
City of Redlands
Statement of Net Position (Continued)
Proprietary Funds
June 30, 2025
See accompanying Notes to the Basic Financial Statements. 47 Redlands Regular Meeting of 02-17-26
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Water Disposal Wastewater
Fund Fund Fund

LIABILITIES
Current liabilities:

Accounts payable 4,835,438 565,133 1,199,847 Accrued payroll 514,685 381,213 302,103 Due to other funds - - - Interest payable - 98,524 - Deposits payable 1,547,198 29,015 5,515 Unearned revenue 6,845 200,144 - Compensated absences - due within one year 504,613 330,375 318,386 Claims payable - due within one year - - - Long-term debt - due within one year 1,327,561 686,104 149,719 Total current liabilities 8,736,340 2,290,508 1,975,570 Noncurrent liabilities:

Advances from other funds - - - Compensated absences - due in more than one year 504,613 330,375 318,385 Claims payable - due in more than one year - - - Long term debt - due in more than one year 6,091,078 4,297,609 421,309 Landfill closure - 15,996,513 - Total OPEB liability 21,578,052 10,838,947 8,982,068 Net pension liability 8,683,552 5,946,478 5,211,933 Total noncurrent liabilities 36,857,295 37,409,922 14,933,695 Total liabilities 45,593,635 39,700,430 16,909,265

DEFERRED INFLOWS OF RESOURCES
Related to leases 1,514,961 - - Related to OPEB 5,656,896 5,000,609 2,512,103 Total deferred inflows of resources 7,171,857 5,000,609 2,512,103

NET POSITION
Net investment in capital assets 130,741,450 5,699,446 55,700,570 Restricted:

Debt service 462,600 - - Capital projects 5,000,000 12,897,799 1,296,116 Endowment - non-expendable - - - Total restricted 5,462,600 12,897,799 1,296,116 Unrestricted (deficit) 22,179,384 (19,309,197) 529,542 Total net position (deficit) 158,383,434$ (711,952)$ 57,526,228$

(Continued)
June 30, 2025
Major Funds
City of Redlands
Statement of Net Position (Continued)
Proprietary Funds
See accompanying Notes to the Basic Financial Statements. 48 Redlands Regular Meeting of 02-17-26
283 of 976
Governmental
Non-Major Activities
Enterprise Internal
Funds Total Service Funds

LIABILITIES
Current liabilities:

Accounts payable 133,299 6,733,717 1,687,520 Accrued payroll 76,953 1,274,954 968,180 Due to other funds 417,285 417,285 - Interest payable - 98,524 - Deposits payable 1,510,413 3,092,141 - Unearned revenue 101,462 308,451 - Compensated absences - due within one year 54,230 1,207,604 396,461 Claims payable - due within one year - - 9,926,390 Long-term debt - due within one year 35,062 2,198,446 32,866 Total current liabilities 2,328,704 15,331,122 13,011,417 Noncurrent liabilities:

Advances from other funds 1,040,234 1,040,234 - Compensated absences - due in more than one year 54,229 1,207,602 396,458 Claims payable - due in more than one year - - 9,926,389 Long term debt - due in more than one year 67,829 10,877,825 108,956 Landfill closure - 15,996,513 - Total OPEB liability 1,304,203 42,703,270 8,361,942 Net pension liability 1,230,301 21,072,264 6,546,230 Total noncurrent liabilities 3,696,796 92,897,708 25,339,975 Total liabilities 6,025,500 108,228,830 38,351,392

DEFERRED INFLOWS OF RESOURCES
Related to leases 487,449 2,002,410 - Related to OPEB 682,468 13,852,076 3,998,134 Total deferred inflows of resources 1,169,917 15,854,486 3,998,134

NET POSITION
Net investment in capital assets 17,904,161 210,045,627 1,794,841 Restricted:

Debt service - 462,600 - Capital projects - 19,193,915 - Endowment - non-expendable 110,741 110,741 - Total restricted 110,741 19,767,256 - Unrestricted (deficit) 3,703,989 7,103,718 (12,866,632) Total net position (deficit) 21,718,891$ 236,916,601$ (11,071,791)$

(Concluded)
June 30, 2025
City of Redlands
Statement of Net Position (Continued)
Proprietary Funds
See accompanying Notes to the Basic Financial Statements. 49 Redlands Regular Meeting of 02-17-26
284 of 976
Water Disposal Wastewater
Fund Fund Fund
OPERATING REVENUES:

Charges for services 30,527,328$ 22,361,903$ 13,757,797$ Miscellaneous operating revenue 1,913,800 164,818 39,571 Total operating revenues 32,441,128 22,526,721 13,797,368 OPERATING EXPENSES:

Salaries and benefits 8,463,965 6,014,570 4,496,998 General and administrative 7,954,344 9,589,925 4,204,299 Parts and supplies 7,489,467 853,967 2,308,006 Utilities 3,994,656 25,067 1,318,830 Depreciation/amortization 5,097,352 1,137,063 2,890,740 Total operating expenses 32,999,784 17,620,592 15,218,873

OPERATING INCOME (LOSS) (558,656) 4,906,129 (1,421,505) NONOPERATING REVENUES (EXPENSES):

Investment income 2,884,127 1,211,761 900,755 Interest expense (201,126) (173,457) (9,944) Property taxes - - - Operating grants 2,722,500 131,457 - Total nonoperating revenues (expenses) 5,405,501 1,169,761 890,811

INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS 4,846,845 6,075,890 (530,694) CAPITAL CONTRIBUTIONS AND TRANSFERS:

Capital contributions 3,856,396 88,151 2,217,248 Transfers in 71,219 - 595,919 Transfers out (1,179,841) (2,224,147) (355,411) Total capital contributions and transfers 2,747,774 (2,135,996) 2,457,756 Changes in net position 7,594,619 3,939,894 1,927,062 NET POSITION (DEFICIT):

Beginning of year, as restated (Note 19) 150,788,815
(4,651,846) 55,599,166
End of year 158,383,434$ (711,952)$ 57,526,228$

(Continued)
Major Funds
City of Redlands
Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements. 50 Redlands Regular Meeting of 02-17-26
285 of 976
Governmental
Non-Major Activities
Enterprise Internal
Funds Total Service Funds
OPERATING REVENUES:

Charges for services 2,548,225$ 69,195,253$ 20,059,685$ Miscellaneous operating revenue 580,779 2,698,968 1,024,204 Total operating revenues 3,129,004 71,894,221 21,083,889 OPERATING EXPENSES:

Salaries and benefits 1,122,954 20,098,487 6,435,873 General and administrative 1,619,391 23,367,959 18,219,990 Parts and supplies 787,953 11,439,393 7,131,819 Utilities 228,204 5,566,757 408,407 Depreciation/amortization 345,762 9,470,917 575,318 Total operating expenses 4,104,264 69,943,513 32,771,407

OPERATING INCOME (LOSS) (975,260) 1,950,708 (11,687,518) NONOPERATING REVENUES (EXPENSES):

Investment income 421,669 5,418,312 1,428,729 Interest expense (57,329) (441,856) (2,907) Property taxes 115,954 115,954 - Operating grants 643,334 3,497,291 - Total nonoperating revenues (expenses) 1,123,628 8,589,701 1,425,822

INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS 148,368 10,540,409 (10,261,696) CAPITAL CONTRIBUTIONS AND TRANSFERS:

Capital contributions 195,984 6,357,779 - Transfers in 224,599 891,737 7,868,434 Transfers out (57,573) (3,816,972) (455,160) Total capital contributions and transfers 363,010 3,432,544 7,413,274 Changes in net position 511,378 13,972,953 (2,848,422) NET POSITION (DEFICIT):

Beginning of year, as restated (Note 19) 21,207,513
222,943,648 (8,223,369)
End of year 21,718,891$ 236,916,601$ (11,071,791)$

(Concluded)
For the Year Ended June 30, 2025
City of Redlands
Statement of Revenues, Expenses, and Changes in Net Position (Continued) Proprietary Funds
See accompanying Notes to the Basic Financial Statements. 51 Redlands Regular Meeting of 02-17-26
286 of 976
Water Disposal Wastewater
Fund Fund Fund
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from customers 29,429,050 $ 22,001,440 $ 13,833,918 $ Cash payments to suppliers for goods and services (16,175,467) (10,128,819) (7,807,291) Cash payments to employees for services (8,019,341) (6,078,931) (4,851,439) Receipts from other operating activities 1,913,800 164,818 39,571 Net cash provided by (used in) operating activities 7,148,042 5,958,508 1,214,759

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:

Operating grants 2,722,500 131,457 - Property taxes - (338) - Due to other funds - - - Advances to other funds 127,790 27,772 - Advances from other funds - - - Transfers from other funds 71,219 - 595,919 Transfers to other funds (1,179,841) (2,224,147) (355,411) Net cash provided by (used in) noncapital financing activities 1,741,668 (2,065,256) 240,508 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:

Acquisition of capital assets (11,699,185) (1,589,723) (7,607,117) Cash contributions received from developers 3,856,396 88,151 2,217,248 Principal payment of long-term debt (1,269,606) (725,368) (475,073) Interest paid on debt (201,126) (132,593) (9,944) Net cash provided by (used in) capital and related financing activities (9,313,521) (2,359,533) (5,874,886) CASH FLOWS FROM INVESTING ACTIVITIES:

Investment income (loss) 2,768,901 1,154,327 886,001 Net cash provided by (used in) investing activities 2,768,901 1,154,327 886,001 Net change in cash and cash equivalents 2,345,090 2,688,046 (3,533,618) CASH AND CASH EQUIVALENTS:

Beginning of year 56,141,813 22,087,401
19,220,772
End of year 58,486,903$ 24,775,447$ 15,687,154$

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

Cash and cash investments 57,783,908$ 24,775,447$ 15,687,154$ Restricted cash and investments 702,995 - - Total cash and cash equivalents 58,486,903$ 24,775,447$ 15,687,154$ (Continued)
Major Funds
City of Redlands
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements. 52 Redlands Regular Meeting of 02-17-26
287 of 976
Water Disposal Wastewater
Fund Fund Fund

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

Operating income (loss) (558,656) $ 4,906,129 $ (1,421,505) $ Adjustments to reconcile operating (loss) to net
cash provided by (used in) operating activities:

Depreciation 5,097,352 1,137,063 2,890,740 Changes in operating assets and liabilities, and
deferred outflows and inflows of resources:

Accounts receivable, net (1,057,762) (247,692) 76,311 Prepaid items (161) 275 (6,137) Inventories - - - Lease receivable 96,323 - - Deferred outflows - OPEB related 44,674 45,585 21,881 Deferred outflows - pension related 754,026 681,252 676,091 Accounts payable 3,263,161 (238,388) 29,981 Accrued payroll 81,182 35,844 4,389 Deposits payable (13,619) 260 (190) Unearned revenue 6,845 (113,031) - Compensated absences 61,548 46,753 36,758 Claims payable - - - Landfill closure - 578,253 - Total OPEB liability 906,848 925,355 444,170 Net pension liability (624,329) (1,003,920) (1,156,019) Deferred inflows - lease related (130,065) - - Deferred inflows - OPEB related (779,325) (795,230) (381,711) Deferred inflows - pension related - - - Total adjustments 7,706,698 1,052,379 2,636,264 Net cash provided by (used in) operating activities 7,148,042$ 5,958,508 $ 1,214,759 $ NONCASH FINANCING AND INVESTING ACTIVITIES:

Inception of finance purchase/lease/subscription agreement 585,758 $ 1,254,429$ 220,578$ Total noncash capital and related financing activities 585,758$ 1,254,429$ 220,578$

(Continued)
For the Year Ended June 30, 2025
Major Funds
City of Redlands
Statement of Cash Flows (Continued)
Proprietary Funds
See accompanying Notes to the Basic Financial Statements. 53 Redlands Regular Meeting of 02-17-26
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Governmental
Activities
Non-major Internal
Funds Total Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from customers 2,673,418 $ 67,937,826 $ 20,850,978 $ Cash payments to suppliers for goods and services (2,627,993) (36,739,570) (21,034,509) Cash payments to employees for services (1,130,963) (20,080,674) (5,927,245) Receipts from other operating activities 580,779 2,698,968 1,024,204 Net cash provided by (used in) operating activities (504,759) 13,816,550 (5,086,572) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:

Operating grants (9,927) 2,844,030 - Property taxes 114,996 114,658 - Due to other funds 417,285 417,285 - Advances to other funds - 155,562 - Advances from other funds (155,562) (155,562) - Transfers from other funds 224,599 891,737 7,868,434 Transfers to other funds (57,573) (3,816,972) (455,160) Net cash provided by (used in) noncapital financing activities 533,818 450,738 7,413,274 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:

Acquisition of capital assets (13,299) (20,909,324) (1,288,172) Cash contributions received from developers 195,984 6,357,779 - Principal payment of long-term debt (72,996) (2,543,043) (94,488) Interest paid on debt (58,007) (401,670) (2,907) Net cash provided by (used in) capital and related financing activities 51,682 (17,496,258) (1,385,567) CASH FLOWS FROM INVESTING ACTIVITIES:

Investment income (loss) 403,550 5,212,779 1,373,843 Net cash provided by (used in) investing activities 403,550 5,212,779 1,373,843 Net change in cash and cash equivalents 484,291 1,983,809 2,314,978 CASH AND CASH EQUIVALENTS:

Beginning of year 8,167,404 105,617,390 22,726,454 End of year 8,651,695$
107,601,199$ 25,041,432$

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

Cash and cash investments 8,641,705$ 106,888,214$ 25,041,432$ Restricted cash and investments 9,990 712,985 - Total cash and cash equivalents 8,651,695$ 107,601,199$ 25,041,432$ (Continued)
Statement of Cash Flows (Continued)
City of Redlands
Proprietary Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements. 54 Redlands Regular Meeting of 02-17-26
289 of 976
Governmental
Activities
Non-major Internal
Funds Total Service Funds

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

Operating income (loss) (975,260)$ 1,950,708$ (11,687,518)$ Adjustments to reconcile operating (loss) to net
cash provided by (used in) operating activities:

Depreciation 345,762 9,470,917 575,318 Changes in operating assets and liabilities, and
deferred outflows and inflows of resources:

Accounts receivable, net (69,217) (1,298,360) 791,293 Prepaid items (10) (6,033) 187,734 Inventories - - (238,846) Lease receivable 131,176 227,499 - Deferred outflows - OPEB related 5,471 117,611 39,204 Deferred outflows - pension related 132,288 2,243,657 503,729 Accounts payable 7,565 3,062,319 357,514 Accrued payroll 7,435 128,850 53,355 Deposits payable 110,356 96,807 - Unearned revenue 85,590 (20,596) - Compensated absences 8,618 153,677 44,919 Claims payable - - 4,419,305 Landfill closure - 578,253 - Total OPEB liability 111,042 2,387,415 795,806 Net pension liability (177,435) (2,961,703) (244,486) Deferred inflows - lease related (132,712) (262,777) - Deferred inflows - OPEB related (95,428) (2,051,694) (683,899) Deferred inflows - pension related - - - Total adjustments 470,501 11,865,842 6,600,946 Net cash provided by (used in) operating activities (504,759)$ 13,816,550$ (5,086,572)$ NONCASH FINANCING AND INVESTING ACTIVITIES:

Inception of finance purchase/lease/subscription agreement -$ 2,060,765$ 121,829$ Total noncash capital and related financing activities -$ 2,060,765$ 121,829$

(Concluded)
For the Year Ended June 30, 2025
City of Redlands
Statement of Cash Flows (Continued)
Proprietary Funds
See accompanying Notes to the Basic Financial Statements. 55 Redlands Regular Meeting of 02-17-26
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56 Redlands Regular Meeting of 02-17-26
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Fiduciary Fund Financial Statements
Community Facility District Custodial Fund - This fund accounts for the collection and subsequent expenditure retained for various community facility districts.
57 Redlands Regular Meeting of 02-17-26
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58 Redlands Regular Meeting of 02-17-26
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Community
Facilities
District
Custodial Fund
ASSETS
Cash and investments 650$
Restricted cash and investments with fiscal agent 3,089,350 Total assets 3,090,000

LIABILITIES
Accounts payable 1,342
Total liabilities 1,342

NET POSITION
Restricted for:

Individuals, organizations, and other governments 3,088,658 Total net position 3,088,658$
City of Redlands
Statement of Fiduciary Net Position
Fiduciary Fund
June 30, 2025
See accompanying Notes to the Basic Financial Statements. 59 Redlands Regular Meeting of 02-17-26
294 of 976
Community
Facilities
District
Custodial Fund
ADDITIONS:

Fee collections for other governments 1,494,534$
Investment income (loss) 128
Total additions 1,494,662
DEDUCTIONS:

Administration 30,803
Contractual services 1,342
Conduit debt payment - principal 1,040,000
Conduit debt payment - interest 470,676
Total deductions 1,542,821
Change in net position (48,159)
NET POSITION:

Beginning of year 3,136,817
End of year 3,088,658$
City of Redlands
Statement of Changes in Fiduciary Net Position
Fiduciary Fund
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements. 60 Redlands Regular Meeting of 02-17-26
295 of 976

61 NOTES TO THE BASIC FINANCIAL STATEMENTS
Redlands Regular Meeting of 02-17-26
296 of 976
City of Redlands
Index of Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

62 Page

Note 1 – Summary of Significant Accounting Policies ............................................................................................. 65

A. Financial Reporting Entity .................................................................................................... .................... 65 B. Basis of Presentation, Accounting and Measurement Focus ..................................................................... 66 C. Deferred Outflows and Inflows of Resources ........................................................................................... 69 D. Cash, Cash Equivalents and Investments .................................................................................................. 69 E. Restricted Cash and Investments ............................................................................................................... 70 F. Receivables ................................................................................................................................................ 70 G. Interfund Transactions ............................................................................................................................... 71 H. Inventories and Prepaid Items ................................................................................................................... 71 I. Leases ........................................................................................................................................................ 71 J. Subscription-Based Information Technology Arrangements (SBITAs) ................................................... 72 K. Capital Assets ............................................................................................................................................ 73 L. Long-Term Debt ........................................................................................................................................ 74 M. Compensated Absences ............................................................................................................................. 74 N. Claims and Judgements Payable ................................................................................................................ 75 O. Pension Plans ............................................................................................................................................. 75 P. Other Postemployment Benefits (OPEB) .................................................................................................. 76 Q. Encumbrances ............................................................................................................................................ 76 R. Fund Balances ................................................................................................................. .......................... 77 S. Net Position ............................................................................................................................................... 78 T. Property Taxes ........................................................................................................................................... 78 U. Use of Accounting Estimates ................................................................................................... ................. 79 V. Implementation of New GASB Pronouncements for the Year Ended June 30, 2025 ............................... 79 W. Upcoming Government Accounting Standards Implementations ............................................................. 79

Note 2 – Cash and Investments .................................................................................................................................. 80

A. Demand Deposits ............................................................................................................... ........................ 80 B. Investments Authorized by the California Government

Code and the City’s Investment Policy ............................................................................................... 81 C. Investments Authorized by Debt Agreements ........................................................................................... 81 D. Fair Value Measurement ........................................................................................................................... 82 E. Risk Disclosure .......................................................................................................................................... 83 F. California CLASS .............................................................................................................. ....................... 84 G. Investment in State Investment Pool ......................................................................................................... 84 H. California Asset Management Program ........................................................................................... ......... 85

Note 3 – Leases Receivable ......................................................................................................................................... 85

A. Governmental Activities ............................................................................................................................ 85 B. Business-Type Activities ........................................................................................................................... 86

Note 4 – Loan Receivable ...................................................................................................... ..................................... 86

Redlands Regular Meeting of 02-17-26
297 of 976
City of Redlands
Index of Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2025

63 Page

Note 5 – Interfund Receivables, Payables, and Transfers ....................................................................................... 87

A. Due To / From Other Funds ...................................................................................................................... 87 B. Advance From / From Other Funds ........................................................................................................... 87 C. Transfers .................................................................................................................................................... 87

Note 6 – Capital Assets ............................................................................................................................................... 88

A. Governmental Activities ............................................................................................................................ 88 B. Business-Type Activities ........................................................................................................................... 89

Note 7 – Long-Term Liabilities .................................................................................................................................. 90

A. Governmental Activities ............................................................................................................................ 90 B. Business-Type Activities ........................................................................................................................... 93

Note 8 – Special Assessment Debt with No City Commitment ...................................................................... ......... 96

Note 9 – Compensated Absences ................................................................................................................................ 97

A. Governmental Activities ............................................................................................................................ 97 B. Business-Type Activities ........................................................................................................................... 97

Note 10 – Solid Waste Landfill ................................................................................................................................... 98

Note 11 – Pension Plans .............................................................................................................................................. 99

A. Summary ................................................................................................................................................... 99 B. City Miscellaneous Plans ...................................................................................................... .................. 100 C. City Safety Plans ..................................................................................................................................... 105

Note 12 – Other Postemployment Benefits ............................................................................................................. 111

A. Summary ................................................................................................................................................. 111 B. General Information about OPEB ........................................................................................................... 111 C. Total OPEB Liability, OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB ...................................................................................................... 114

Note 13 – Risk Management ..................................................................................................................................... 116

A. Coverage .................................................................................................................................................. 116 B. Claims Activity ........................................................................................................................................ 116

Note 14 – Fund Balance and Net Position ............................................................................................................... 117

A. Fund Balance/Net Position
Deficits ........................................................................................................ 117 B. Expenditures Exceeding Appropriations ................................................................................................. 118

Redlands Regular Meeting of 02-17-26
298 of 976
City of Redlands
Index of Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2025

64 Page

Note 15 – Fund Balance Classification .................................................................................................................... 119

Note 16 – Net Investments in Capital Assets ................................................................................... ....................... 120

Note 17 – Tax Abatements – Economic Development Incentives ......................................................................... 120

Note 18 – Endowments .......................................................................................................... ................................... 121

Note 19 –Restatements of Beginning Balances ....................................................................................................... 122

Note 20 – Commitments and Contingencies ........................................................................................................... 122

A. Litigation ................................................................................................................................................. 122 B. Sales Tax – Donut Hole ........................................................................................................................... 123 C. Federal and State Grants .......................................................................................................................... 123 D. Contractual Commitments ....................................................................................................................... 123

Redlands Regular Meeting of 02-17-26
299 of 976
City of Redlands
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

65 Note 1 – Summary of Significant Accounting Policies

The basic financial statements of the City of Redlands, California (the “City”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) as applied to governmental agencies. The Governmental Accounting Standards Boar d (“GASB”) is the accepted standard-setting body for establishing governmental accounting and fi nancial reporting standards in the United States. The more significant of the City’s accounting policies are described below:

A. Financial Reporting Entity

The City is a municipal corporation governed by a five-member city council with the mayor elected by the council itself. The City was incorporated in 1888 under the general laws of the State of California and enjoys all the rights and privileges applicable to a General Law City. Th e City provides the following services: police; building inspection; parks and streets; water; disposal; sanita tion; leisure services; planning and zoning; general administration services; aviation; and fire protection.

Blended Component Units

The financial reporting entity consists of the primary government, the City , and its component units. Component units are legally separate entities for which the elected officials of the primary government are financially accountable. In addition, component units can be othe r organizations for which the primary government is accountable and their exclusion would cause the reporting en tity’s financial statements to be misleading or incomplete.

Blended component units, although legally separate entities, are, in subs tance part of the government’s operation and so data from these units are combined with data of the primary government. Discretely presented component units, on the other hand, are reported in a separate column in the combined financial statements to emphasize that they are legally separate from the government.

Although the following are legally separate from the City, they have been “blended” as though they are part of the City because the component unit’s governing body is substantially the same as the City’s and there is a financial benefit or burden relationship between the City and the component unit; management of the City has operational responsibilities for the component units; and/or the component units provide services entirely, or almost entirely, to the City or otherwise exclusively, or almost exclus ively, benefits the City, even though it does not provide services directly to it.

Redlands Public Improvement Corporation

The Redlands Public Improvement Co rporation (“Corporation”) was organi zed in June 1985 pursuant to the Nonprofit Public Benefit Corporation Law of the State of California, solely for the purpose of providing financial assistance to the City by acquiring, constructing, improving, developing and installing certain real and personal property together with appurtenances and appurtenant work for the use, benefit and enjoyment of the public. The corporation was formed at the request of the City and the directors receive no compensation. The corporation is presented as a governmental fund type.

Redlands Joint Powers Financing Authority (JPFA)

The Redlands Financing Authority (“Authority”) was estab lished May 1, 1999, pursuant to the Joint Exercise of Powers Laws of the State of California. The Authority was created by the former Redevelopment Agency and the City for the primary purpose of assisting the financing of capital improvements, working capital, liability and other insurance needs, or projects whenever there are significant public benefits. No separate annual financial statements are prepared for the Authority.

Redlands Regular Meeting of 02-17-26
300 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

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

A. Financial Reporting Entity (Continued)

Related Organizations

The City of Redlands’ officials are also responsible for appointing members of the boards of other organizations, but the City of Redlands’ accountability for these organizations does not extend beyond making the appointments.

B. Basis of Presentation, Accounting and Measurement Focus

The accounts of the City are organized on the basis of fu nds, each of which is cons idered a separate accounting entity. The operations of each fund are accounted for by pr oviding a separate set of self-balancing accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund equity, revenues and expenditures or expenses, as appropriate. Fund acc ounting segregates funds according to their intended purpose and is used to aid management in demonstrati ng compliance with finance-re lated legal and contractual provisions. The minimum number of funds is maintained in accordance with legal and managerial requirements.

Government-Wide Financial Statements

The City’s Government-Wide Financial Statements incl ude a Statement of Net Position and a Statement of Activities. These statements present summaries of govern mental and business-type activities for the City accompanied by a total column. Fiduciary activities of the City are not included in these statements.

These financial statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets and lia bilities, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accomp anying Statement of Net Position. The Statement of Activities presents changes in Net Position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. Under the accrual basis of accounting, revenues, expenses, gains, losses, assets, deferred outflows of resources, liabilities, and deferred inflows of resources resulting from exchange and exchange-like transactions are recognized when the exchange takes place. Revenues, expe nses, gains, losses, assets, deferred outflows of resources, liabilities and deferred inflows of resources resulting from non-exchange transactions are recognized in accordance with the requirements of U.S. GAAP.

Program revenues include charges for services, special ass essments, and payments made by parties outside of the reporting government's citizenry if that money is restri cted to a particular program. Program revenues are netted with program expenses in the statement of activities to present the net cost of each program. Program revenues for the City are classified in three categories:

 Charges for services
 Operating grants and contributions
 Capital grants and contributions

Certain eliminations have been made in regards to interfund activities, payables and receivables. All internal balances in the Statement of Net Position have been eliminated except those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total primary government column. In the Statement of Activities and Changes in Net Position, internal service fund transactions have been eliminated; however, those transactions between governmental and business-type activities have not been eliminated.

Redlands Regular Meeting of 02-17-26
301 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

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

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

The following interfund activities have been eliminated:

 Due to/from other funds
 Advance to/from other funds
 Due to City/from Fiduciary Funds
 Transfers in/out

Governmental Fund Financial Statements

Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances. 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.

All governmental funds are accounted for on a spending or "current financial resources" measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the Balance Sheet. The Statement of Revenues, Expend itures and Changes in Fund Balances presents increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets.

Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expend itures of the current period. Measurable means that the amounts can be estimated, or otherwise determined. Ava ilable means that the amounts were collected during the reporting period or soon enough thereafter to be availa ble to finance the expenditures accrued for the reporting period. The City uses an availability period of 60 days for all revenues.

Sales taxes, property taxes, franchise taxes, gas taxes, motor vehicle in-lieu, transient occupancy taxes, grants 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 to the extent normally collected with in the availability period.

Other revenue items are considered to be measurable and available when cash is received by the government.

Revenue recognition is subject to the measurable and av ailable criteria for the governmental funds in the fund financial statements. Exchange transactions are recognized as revenues in the period in which they are earned (i.e., the related goods or services are provided). Locally imposed derived tax revenues are recognized as revenues in the period in which the underlying exchange transaction upon which they are based takes place.

Imposed non-exchange transactions are recognized as revenues in the period for which they were imposed. If the period of use is not specified, they are recognized as re venues when an enforceable legal claim to the revenues arises or when they are received, whichever occurs first. Government-mandated and voluntary non-exchange transactions have been recognized as revenues when all applicable eligibility requirements have been met.

The Reconciliation of the Fund Financial Statements to the Government-Wide Financial Statements is provided to explain the differences created by the integrated approach of GASB Statement No. 34.

The City reports the following major governmental funds:

General Fund - This fund accounts for all revenues and expenditures used to finance the traditional services associated with a municipal government which are not accounted for in the other funds. In Redlands, these services include general government, public safety, culture and recreation, highway and streets, and library.

Governmental Grants Special Revenue Fund - This f und accounts for the receipt and expenditure of grant monies received from various agencies for general government projects.

Redlands Regular Meeting of 02-17-26
302 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

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

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

Proprietary Fund Financial Statements

Proprietary Fund Financial Statements include a Statement of Net Position, a Statement of Revenues, Expenses and Changes in Fund Net Position, and a Statement of Cash Flows.

A separate column representing internal service funds is also presented in these statements. However, internal service balances and activities have been combined with the governmental activities in the Government-Wide Financial Statements. The City’s internal service funds include funds which provide services directly to other City 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 a nd Changes in Fund Net Po sition presents increases (revenues) and decreases (expenses) in total Net Position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. In these funds, receivables have been r ecorded as revenue and provisions have been made for uncollectible amounts.

Operating revenues in the proprietary funds are those re venues that are generated fro m the primary operations of the fund. All other revenues are reported as non-operating revenues. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as non-operating expenses.

The City reports the following major proprietary funds:

Water Fund - This fund is used to account for the activities of the City's water utility operations, projects, debt service costs, and impact fees of the City.

Disposal Fund - This fund is used to account for the activities of the City's refuse disposal collection operations, projects, debt service costs, and impact fees of the City.

Wastewater Fund - This fund is used to account for th e activities of the City's wastewater utility operations, projects, debt service costs, and impact fees of the City.

Internal service fund balances and activities have been combined with governmental activities in the Government- Wide Financial Statements, and are comprised of the following funds:

General Liability Self-Insurance Fund - This fund is used to account for the City’s self-insured general and automobile liability programs, which are provided to all City departments and funds.

Workers' Compensation Self-Insurance Fund - This fund is used to account for the City’s self-insured Workers’ Compensation and General Safety Programs, which are provided to all City departments and funds.

Information Technology Fund - This fu nd is used to account for the general maintenance and service of all City computers and phone equipment provided to all City departments.

Equipment Maintenance Fund - This fund is used to account for providing ongoing maintenance of all City vehicles and major equipment and to account for vehicle rental services to all City departments.

Redlands Regular Meeting of 02-17-26
303 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

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

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

Proprietary Fund Financial Statements (Continued)

Utility Billing Fund - This fund is used to account fo r billing services costs provided for water, sewer, and solid waste.

Payroll Clearing Fund - This fund is used to account for the City’s reoccurring payroll obligations.

Fiduciary Fund Financial Statements

Fiduciary fund financial statements include a Statement of Net Position and a Statement of Changes in Fiduciary Net Position. The City’s fiduciary funds represent cust odial funds. Custodial funds are accounted for using the "economic resources" measurement focus and the accrual basis of accounting.

Fiduciary fund types are accounted for according to the na ture of the fund. Custodial funds are used to report fiduciary activities that are not required to be reporte d in pension (and other empl oyee benefit) trust funds, investment trust funds, or private-purpose trust funds. Private-purpose trust funds account for resources of all other trust arrangements in which principal and income benefit individuals, private organizations, or other governments (i.e. unclaimed property/escheat property). They are al so used to account for vari ous assessment districts for which the City acts as an agent for debt service activity, as the City is prohibited from levying additional taxes for these districts. Such funds include Community Facilities Districts, which do not have trust agreements with the City.

C. Deferred Outflows and Inflows of Resources

The Statement of Net Position and Balance Sheet – Gove rnmental Funds reports separate sections for Deferred Outflows of Resources, and Deferred In flows of Resources, when applicable.

Deferred Outflows of Resources represent a consumption of net assets th at applies to future period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then.

Deferred Inflows of Resources represent an acquisition of net assets th at applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time.

D. Cash, Cash Equivalents and Investments

The City pools its available cash for investment purposes. The City considers pooled cash and investment amounts, with original maturities of three months or less, to be cash equivalents.

Investments are reported in the accompa nying financial statements at fair value, except for certain investment contracts that are reported at cost because they are not tran sferable and they have terms that are not affected by changes in market interest rates. Changes in fair value that occur du ring a fiscal year are recognized as investment income reported for that fiscal year, a nd may result in negative investment income in the accompanying financial statements. Investment income includes interest ear nings, changes in fair value, and any gains or losses realized up on the liquidation, maturity, or sale of investments.

Redlands Regular Meeting of 02-17-26
304 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

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

D. Cash, Cash Equivalents and Investments (Continued)

Investment income earned by the pooled investments is allocated to the various funds b ased on each fund's average cash and investment balance, except for investme nt income associated with funds not legally required to receive pooled investment income which has been assigned to and recorded as revenue of the general fund, as provided by California Government Code Section 53647.

For purposes of the statemen t of cash flows, amounts reported as cash and cash equivalents, include amounts on deposit in the City pool and any short-term, highly liqui d investments that are both readily convertible to known amounts of cash or so near their maturity that they present insignificant risk of changes in value because of changes in interest rates.

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 speci fied including use of certain methods to present deposits and investments, highly sensitive investments, credit quality at year-end and other disclosures.

U.S. GAAP 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, 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 iden tical assets 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 refl ect management’s best estimate of what market participants would use in pricing the assets or liabilities at the measurement date.

E. Restricted Cash and Investments

Certain restricted cash and investments are held by fiscal agents for the redemption of bonded debt, for acquisition and construction of capital projects, and to meet bond indenture debt reserve requirements.

F. Receivables

Customer or trade receivables are reported as “accounts receivable” and are shown net of an allowance for uncollectible accounts based on hist orical and management estimates.

Redlands Regular Meeting of 02-17-26
305 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

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

F. Receivables (Continued)

Noncurrent portions of long-term receivables (e.g., “notes receivable”) due to governmental fund types are reported in their respective balance sheets despite their spending measurement focus. Recognition of governmental fund type revenues represented by noncurrent receivables are deferred until they become current receivables.

Noncurrent portions of long-term notes receivable are offset by restricted fund balance in the special revenue funds.

G. Interfund Transactions

Activity between funds that are representative of lending/ borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from othe r funds” or “advances to/from other funds” (i.e., the current portion of interfund loans). Any residual balances outst anding between the governmental activities and business- type activities are reported in the Governmental-Wide Financial Statements as “internal balances.”

H. Inventories and Prepaid Items

Inventory, consisting of expendable supplies, is valued at first in first out basis. The cost of governmental funds inventory is recorded as expenditure at the time the individual inventory is consumed. Prepaid items are recorded at cost. Using the consumption method, prepaid items are recorded as expenditures over the period that service is provided. Reported inventory and prepaid items are equally offset by a fund balance reservation, which indicates that they do not constitute “available spendable resources” even though they are a component of current assets.

I. Leases

Lessee

The City has a policy to recognize a lease liability and a right ‐to‐use lease asset (lease asset) in the government‐ wide financial statements. The City recognizes lease liabilities with an initial, individual value of $25,000 or more.

At the commencement of a lease, the City initially measures the lease lia bility 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 the 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 underlying asset, unless the lease contains a purchase option that the City has determined is reasonably certain of being exercised. In this case, the lease asset is amortized over the useful life of the underlying asset.

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

 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.

Redlands Regular Meeting of 02-17-26
306 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

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

I. Leases (Continued)

Lessee (Continued)

The lease term includes the noncancellable period of the lease. Lease payments included in the measurement of the lease liability are composed of fixed payments and purch ase option price that the City is reasonably certain to exercise. The City monitors changes in circumstances that would require a remeasurement of its 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 capital assets and lease liabilities are reported with long- term debt on the statement of net position.

Lessor

The City is a lessor for leases of special purpose facilities, office and commercial space, and land. The City recognizes leases receivable and deferred inflows of resources in the financial statements.

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

 The City uses its estimated incremental borrowing rate as the discount rate for leases.

 The lease term includes the noncancellable period of the lease. Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.

The City monitors changes in circum stances that would require a remeasureme nt of its lease and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that ar e expected to significantly affect the amount of the lease receivable.

J. Subscription-Based Information Technology Arrangements (SBITAs)

The City has a policy to recognize a SBITA liability and a right ‐to‐use subscription asset (SBITA asset) in the government-wide financial statements with an initial, individual value of $25,000 or more with a subscription term greater than one year.

At the commencement of a subscription, when the subscription asset is placed into service, the SBITA liability is measured at the present value of payments expected to be made during the subscripti on term. Future subscription payments are discounted using the City's incremental borrowing rate and the City recognizes amortization of the discount on the subscription liability as interest expense in subsequent financial reporting periods.

Redlands Regular Meeting of 02-17-26
307 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

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

J. Subscription-Based Information Technology Arrangements (SBITAs) (Continued)

SBITA assets are measured as the sum of the initial sub scription liability, payments made to the SBITA vendor before the commencement of the lease term, and capitali zable implementation costs less any incentives received from the SBITA vendor at or before the commencement of the subscription term. Subscription assets are amortized using the straight-line method over the subscription term.

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

- The City uses the interest rate charged by the SBITA vendor as the discount rate. When the interest rate charged by the SBITA vendor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for SBITAs.

- The subscription term includes the period during whic h the City has a noncancelable right to use the underlying IT asset. The subscription term also includes periods covered by an option to extend if it is reasonably certain to be exercised.

- Subscription payments included in the measurement of the subscription liability are composed of fixed payments and purchase option years that the City is reasonably certain to exercise. The City monitors changes in circumstances that w ould require a remeasurement of a subscription and will remeasure any subscription asset and liability if certain changes occur that are expected to significantly affect the amount of the subscription liability.

Right-to-use subscription assets are reported along with other capital assets and subscription liabilities are reported with long-term debt on the statement of net position.

K. Capital Assets

Capital assets, which include land, rights of way, structures, equipment, and infrastructure assets , the right to use leased equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements . Such assets are recorded at historical cost (except for intangible right‐to‐use lease assets) or estimated historical cost if purchased or constructed. Donated assets are valued at the fair value of the assets on the date on which they were contributed. Donated works of art and similar items, and capital assets received in a service concession arrangement are reported at acquisition value rather than fair value. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. The City utilizes a capitalization threshold of $5,000 depending on asset type.

Major capital outlay for capital assets and improvements ar e capitalized as projects are constructed. For debt- financed capital assets, interest incurred during the construction phase is reflected in the capitalization value of the asset constructed, net of interest earned on the invest ed proceeds over the same period. Capital assets acquired through lease obligations are valued at the present value of future lease payments at the date acquired. Contributed capital assets are valued at their estimated acquisition value at the date of contribution.

The City capitalizes land and right-of-way (ROW) associated with streets and roads as non-depreciable capital assets in accordance with GAAP. Right-o f-way represents the underlying land upon which public streets and related infrastructure are constructed and maintained. The City’s right-of-way inventory primarily consists of roadway corridors that have been acquired or dedicated to the City since incorporation. Except for a limited number of parcels previously held under individual parcel numbers and later converted to street use, the City’s ROW does not have separate parcel identification numbers.

Redlands Regular Meeting of 02-17-26
308 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

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

K. Capital Assets (Continued)

Capital assets used in operations are depreciated over their estimated useful lives using the straight-line method in the government-wide financial statements and in the fund financial statements of the proprietary funds.

Depreciation is charged as an expense against opera tions and accumulated depreci ation is reported on the respective balance sheet. The range of lives used for depreciation purposes for each capital asset class is as follows:

Asset Type Years
Infrastructure 20-75
Buildings and improvement 10-40
Machinery, equipment, and vehicles 3-25
Lease and subscription assets Contract term

L. Long-Term Debt

Government-Wide Financial Statements and Proprietary Fund Financial Statements

Long-term debt and other financial obligations are reported as liabilities in the appropriate funds. Bond premiums and discounts are deferred and amortized over the life of the bonds using straight line method. Bonds payable are reported net of the applicable premium or discount. Issuance costs are expensed when incurred. Gains or losses on bond refunding are reported as either deferred outflows of resources or deferred inflows of resources and amortized over the term of the related debt.

Governmental Fund Financial Statements

The governmental fund financial statements do not present long-term debt but are shown in the Reconciliation of the Governmental Funds Balance Shee t to the Government-Wide Statement of Net Position. Governmental fund types recognize 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. Debt issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

M. Compensated Absences

The City recognizes a liability for compensated absences for leav e time that (1) has been earned for services previously rendered by employees, (2) accumulates and is allowed to be carried over to subsequent years, and (3) is more likely than not to be used as time off or settled (for example paid in cash to the employee or payment to an employee flex spending account) during or upon separati on from employment. Based on the criteria listed, two types of leave qualify for liability recognition for compensated absences – vacation and sick leave. The liability for compensated absences includes salary-related benefits, where applicable.

Vacation: The City’s policy permits employees to accumu late earned but unused vacation benefits, which are eligible for payment at the employee’s current pay rate upon separation from employment.

Redlands Regular Meeting of 02-17-26
309 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

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

M. Compensated Absences (Continued)

Sick Leave: The City’s policy permits employees to accu mulate earned but unused sick leave. Upon separation with the City, employees with more than 10 years of service may be eligible to convert up to 50% of the unused sick leave accrual to cash at the employee’s current pay rate. Employees with less than 10 years of service are not eligible for this benefit and the sick hours will lapse at separation. For sick leave at retirement, employees are eligible to convert all unused sick hours to service cred it or into a post-employment health plan account at the employee’s current pay rate.

A total of 10 to 25 days of vacation and 12 days of sick leave per year may be accumulated by each employee. The City accrues a liability for compensated absences which meets the following criteria:

1) The City's obligation relating to employees' rights to r eceive compensation for future absences is attributable to employees' services already rendered.
2) The obligation relates to rights that vest or accumulate. Payment of the compensation is probable. 3) The amount can be reasonably estimated.

Government-Wide Financial Statements

For governmental and business-type activities, compensated absences are recorded as expenses when earned.

Fund Financial Statements

For governmental funds, compensated absences are recorded as expenditures in the year paid. In proprietary funds, compensated absences are expensed to the various funds in the peri od they are earned, and such fund’s share of the unpaid liability is recorded as a long-term liability of the fund.

N. Claims and Judgments Payable

The short-term and long-term workers’ compensation clai ms liability is reported in the Workers’ Compensation Insurance Internal Service Fund. The short-term and long-term general claims liability is reported in the Comprehensive Liability Insurance Intern al Service Fund. The short-term liability which will be liquidated with current financial resources is the amount of settlement reached, but unpaid, related to claims and judgments entered.

Under the modified accrual basis, the following revenue sources are considered to be susceptible to accrual:
property taxes, sales taxes, federal and state grants.

O. Pension Plans

For purposes of measuring the net pension liability, de ferred outflows of resources and deferred inflows of resources related to pensions, and pens ion 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 11). 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 General Fund and Internal Service Funds are typically used to liquidate the pension liability related to the City's governmental activities while the pension liability for Bu siness-type activities is liquidated from the respective Enterprise Funds.

Redlands Regular Meeting of 02-17-26
310 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

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

O. Pension Plans (Continued)

The following timeframes are used for pension reporting:

Valuation date June 30, 2023
Measurement date June 30, 2024
Measurement period July 1, 2023 to June 30, 2024

Gains and losses related to changes in total pension lia bility 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 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, inac tive, and retired) as of the beginning of the measurement period.

P. Other Postemployment Benefits (OPEB)

For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the OPEB plan, the assets of which are held in an irrevocable trust, and additions to/deductions from the OPEB pl an’s fiduciary net position have been determined by an independent actuary (Note 12). For this purpose, benefit payments are recognized when currently due and payable in accordance with the bene fit terms. Investments are reported at fair value. The General Fund and Internal Service Funds are typically used to liquidate the OPEB liability related to the City's governmental activities while the OPEB liability for Busi ness-type activities is liquidated from the respective Enterprise Funds.

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

Valuation date June 30, 2023
Measurement date June 30, 2024
Measurement period July 1, 2023 to June 30, 2024

Q. Encumbrances

Encumbrance accounting, under which purchase orders, contr acts and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary control in the governmental funds.

Redlands Regular Meeting of 02-17-26
311 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

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

R. Fund Balances

In the Governmental Fund Financial Statements, fund balances are classified in the following categories:

Nonspendable – Items cannot be spent because they are not in spendable form, such as prepaid items and inventories, items that are legally or contractually requi red to be maintained intact, such as principal of an endowment or revolving loan funds.

Restricted – Restricted fund balances encompass the portion of net fund resources subject to externally enforceable legal restrictions. This includes externally imposed restrictions by creditors, such as through debt covenants, grantors, contributors, laws or regulations of other governments, as well as restrictions imposed by law through constitutional provisions or enabling legislation.

Committed – Committed fund balances encompass the portion of net fund resources, the use of which is constrained by limitations that the government imposes upon itself at its highest level of decision making (normally the governing body) and that remain bi nding unless removed in the same manner. The County Council is considered the highest auth ority for the City. A City Council resolution is required to have fund balance committed.

Assigned – Assigned fund balances encompass the portion of net fund resources reflecting the government’s intended use of resources. Assignment of resources can be done by the highest level of decision making or by a committee or official designated for that purpose. The City Council has not delegated the authority to assign fund balance to management.

Unassigned – This category is for any balances that have no restrictions placed upon them. 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 other than the General Fund, if expenditures incurred for speci fic 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.

Fund Balance Flow Assumptions

Sometimes the City will fund outlays fo r a particular purpose from both restricted and unrestricted resources (the total of committed, assigned and unassigned fund balance). In order to calculate the amounts to report as restricted and unrestricted, a flow assumption must be made about th e order in which the resources are considered to be applied. It is the City’s policy to consider restricted f und balance to have been deplet ed before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned and then unassigned fund balance.

Net Position Flow Assumption

Sometimes the City will fund outlays for a particular purpo se from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calcu late the amounts to report as restricted – net position and unrestricted – net position in the government-wide and pr oprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the City’s policy to consider restricted – net position to have been depleted before unrestricted – net position is applied.

Redlands Regular Meeting of 02-17-26
312 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

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

R. Fund Balances (Continued)

Stabilization Arrangement

As described in Chapter 3.06 of the Municipal Code, the City has established a stabilization arrangement committing a minimum of 12 percent of the sum of the General Fund’s operating expenses and operating transfers out. The balance at June 30, 2025, is $11,069,310 and is included in committed fund balance. These funds may be used only when the City is faced with an unforeseen or uncontrollable event which includes but is not limited to:

1) Local revenue shortfalls due to a major business closure or relocation. 2) Legislative or judicial mandates to provide new or expanded services or programs that, in total, cost the City $200,000 or more.
3) Natural and civil disasters such as earthquakes, fires, floods, riots and health epidemics.

S. Net Position

For the Government-Wide Financial Statements, net position is classified in the following categories:

Net Investment in Capital Assets component of net position consists of capital assets, net of accumulated depreciation and amortization and reduced by any debt outstanding and any deferred outflows/inflows of resources related to such borrowings that are attributable to the acquisition, construction or improvement of those assets. If there are significant unspent related debt proceeds at year-end, the portion of the debt attributable to the unspent proceeds is not included in the calculation of net investment in capital assets. Rather, that portion of the debt is offset by unspent proceeds.

Restricted component of net position consists of restricted assets reduced by liabilities and deferred inflows of resources related to those assets.

Unrestricted component of net position is the amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that are not included in the determination of net investment in capital assets or the restricted component of net position.

When both restricted and unrestricted resources are available for use, the City’s policy is to use restricted resources first, then unrestricted resources that are needed.

T. Property Taxes

With the passage of Proposition 13 in 1978 (Article XIIIA, California State Constitution), property taxes are limited to one percent of market value, plus additional taxes for repayment of existing or subsequent voter- approved indebtedness. Under Article XIIIA, the market value of taxable property is subject to a maximum annual increase of two percent. Market value may be appraised at signi ficantly more than two percent depending on other factors such as improvements, sale or change of ownership. The City receives a portion of the one percent general tax levy which is shared by several other local governments includi ng the county and the school district. The City's share is based on a formula prescribed in Section 26912(b) of the Government Code. The county apportions property taxes to the City on a scheduled basis which generally adheres to the actual tax collection periods. The tax lien date is January 1 of each year and covers the ensuing fiscal year's tax returns. The tax levy date is from July 1 to June 30 of each year. The first installment becomes due on November 1 with penalties and interest accruing after December

10. The second installment is due no later than April 10.

Redlands Regular Meeting of 02-17-26
313 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

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

U. Use of Accounting Estimates

The preparation of financial statements in conformity with U.S. GAAP re quires management to make estimates and assumptions, in some cases when a pplicable, that affect the amounts in the financial statements and the accompanying notes. Actual results could differ from the estimates.

V. Implementation of New GASB Pronouncements for the Year Ended June 30, 2025

The requirements of the following accounting standards are effective for the purpose of implementation, if applicable to the City, for the year ended June 30, 2025. The financial statements included herein apply the requirements and provisions of these statements, including necessary retroactive adjustments to financial statement classifications and presentations.

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 financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certa in previously required disclosures. Implementation of this Statement had a significant effect on the City's financial statements for the fiscal year ended June 30, 2025. See Note 19.

GASB Statement No. 102 – In December 2023, GASB issued Statement No. 102, Certain Risk Disclosures.

This Statement requires a government to assess whether a concentration or constraint makes the primary government reporting unit or other reporting units that report a liability for revenue debt vulnerable to the risk of a substantial impact. Additionally, this Statement requires a government to assess whether an event or events associated with a concentration or constraint that could cause the substantial impact have occurred, have begun to occur, or are more likely than not to begin to occur within 12 months of the date the financial statements are issued. Implementation of this Statement did not have a significant effect on the City's financial statements for the fiscal year ended June 30, 2025.

W. Upcoming Government Accounting Standards Implementations

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

GASB Statement No. 103 – 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 essential for decision making and assessing a government’s accountability. Application of this statement is effective 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 as sets recognized in accordance with Statement No. 87, Leases, and intangible right-to-use assets recognized in accordance with Statement 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 assets recognized in accordance with Statement No. 96, Subscription-Based Information Technology Arrangements, also should be separately disclosed. In addition, this Statement requir es intangible assets other than those three types to be disclosed separately by major class. Application of this statement is effective for the City’s fiscal year ending June 30, 2026.

Redlands Regular Meeting of 02-17-26
314 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

80 Note 2 – Cash and Investments

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

Fiduciary Funds
Governmental Business-Type Statement of
Activities Activities Total Net Position Total
Cash and investments 175,704,531 $ 106,888,214 $ 282,592,745 $ 650 $ 282,593,395$ Cash and investments with fiscal agent 284,866 712,985 997,851 3,089,350 4,087,201 Total cash and inv estments 175,989,397$ 107,601,199 $ 283,590,596 $ 3,090,000 $ 286,680,596 $ Gov ernment-W ide Statement of Net Position

Cash and investments at June 30, 2025, consisted of the following:

Cash:

Cash on hand 3,950 $
Deposits with financial institutions 35,464,144
Total cash 35,468,094
Investments:

Investments 247,125,301
Investments held by bond trustee 4,087,201
Total inv estments 251,212,502
Total cash and inv estments 286,680,596$

The City maintains a cash and investment pool for all funds. Certain restricted funds that are held and invested by independent outside custodians throug h contractual agreements are not pooled. These restricted funds include cash and investment held by trustees.

A. Demand Deposits

The carrying amounts of the City’s demand deposits were $35,464,144 at June 30, 2025. Bank balances were $36,755,698 at that date, the total amount of which w as collateralized or insured with securities held by the pledging financial institutions in the City’s name as discussed below.

The California Government Code requires California ba nks 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 se curity interest in such collateral su perior 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’s 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 requiremen ts for cash deposits, which are fully insured up to $250,000 by the Federal Deposit Insurance Corporation (“FDIC”). The City, however, has not waived the collateralization requirements.

The City follows the practice of pooling cash and investments of all funds, except for funds required to be held by fiscal agents under the provisions of bond indentures. In terest income earned on pooled cash and investments is allocated to the various funds based on the period-end cash and investment balances. Interest income from cash and investments with fiscal agents is credited directly to the related fund.

Redlands Regular Meeting of 02-17-26
315 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

81 Note 2 – Cash and Investments (Continued)

B. Investments Authorized by the California Government Code and the City’s Investment Policy

The table below identifies the investment types that are authorized for the City by the California Government Code and the City's investment policy.

Authorize d Maximum Maximum
By Investment Maximum Percenta ge Inv estment in
Authorized Inv estment Type s Policy Maturity of Portfolio One Issuer* Local Agency Bonds No 5 years None None
U.S. Treasury Obligations Yes 5 years None None
U.S. Agency Securities Yes 5 years None None
Banker's Acceptances Yes 180 days 40% 30%
Commercial Pape
r Yes 270 days 15% 10%
Negotiable Certificates of Deposit Yes 5 years 30% 30%
Repurchase Agreements Yes 7 days None None
Reverse Repurchase Agreements No 92 days None None
M edium-Term Notes Yes 5 years 15% 15%
M utual Funds Yes N/A 10% 10%
Mone y Ma rke t Mutua l Funds Y e s N/ A 10% 10%
Mortgage Pass-Through Securities No 5 years None None
County Pooled Investment Funds No N/A None None
Local Agency Investment Fund (LAIF) Yes N/A $75 Million** None JPA Pools (other investment pools) Yes N/A None None
** Limit set by LAIF governing Board not California Government Code * Based on state law requirements or City investment policy requirements, whichever is more restrictive.

In accordance with the City's investment policy, a maximum of 25% of the City's investment portfolio may be invested for more than 5 years, not to exceed 10 years.

The table also identifies certain provisions of the California Government Code (or the City's investment policy, if more restrictive) that address interest rate risk and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City's investment policy.

C. Investments Authorized by Debt Agreements

Investments of debt proceeds held by fiscal agent are govern ed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City's investment policy. The table below identifies the investment types that ar e authorized for investments held by fiscal agent. The table also identifies certain provisions of these debt agreements that address interest rate risk and concentration of credit risk.

Maximum Maximum Maximum
Maximum Percentage Percentage Investment in
Authorized Inv estment Types Maturity Allowe d of Portfolio One Issuer U.S. Treasury Obligations 5 years None None None
U.S. Agency Securities 5 years None None None
Banker's Acceptances 180 days 40% 30% 30%
Commercial Paper 270 days 15% 15% 15%
Money Market Mutual Funds N/A None None None
Investment Contracts 30 years None None None
Redlands Regular Meeting of 02-17-26
316 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

82 Note 2 – Cash and Investments (Continued)

D. Fair Value Measurement

At June 30, 2025, investments, excluding restricted cash a nd investments held by fiscal agent, are reported at fair value based on quoted market prices. The following tabl e presents the fair value measurements of investments recognized in the accompanying Statement of Net Position measured at fair value on a recurring basis and the level within GASB 72 fair value hierarchy in which the fair value measurements fall at June 30, 2025:

Total at
Inv estments measured by fair v alue lev el: June 30, 2025 Level 1 Level 2 Federal Agency Securities 68,795,811 $ - $ 68,795,811$ Corporate Bonds 15,897,503 - 15,897,503 Negotiable Certificates of Deposit 8,287,806 - 8,287,806 Municipal Bonds 6,365,657 - 6,365,657 U.S. Treasury Notes 4,879,170 4,879,170 - Total inv estments by fair v alue lev el 104,225,947 4,879,170 $ 99,346,777 $ Investments not subject to the fair value hierarchy:

CalTrust 10,049,618
CLASS 5,002,977
Local Agency Investment Fund 41,849,590
California Asset Management Program 85,997,169
Money market mutual funds 4,087,201
Total investments not subject to the fair value hierarchy 146,986,555 Total investments 251,212,502$

Debt and equity securities classified in Level 2 are valued using the following approaches:

• U.S. Treasuries, U.S. Agencies, and Commercial Paper: quoted prices for identical securities in markets that are not active;
• Medium term notes: quoted prices for similar securities in active markets; and • Asset-backed securities: recent appraisals of the asset value.

E. Risk Disclosure

Disclosures Relating to Interest Rate Risk

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

Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer-term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity even ly over time as necessary to provide the cash flow and liquidity needed for operations. Information about the sensitivity of the fair values of the City's investments (including investments held by fiscal agent) to market inte rest rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity:

Redlands Regular Meeting of 02-17-26
317 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

83 Note 2 – Cash and Investments (Continued)

E. Risk Disclosure (Continued)

Disclosures Relating to Int erest Rate Risk (Continued)

12 Months 13 to 24 25 to 36 37 to 48 More than 48
Investment Type or less Months Months Months Months Total Held by City:

Federal Agency Securities 29,524,783$ 32,280,228$ 6,990,800$ -$ -$ 68,795,811$ Corporate Bonds 7,865,390 5,042,953 2,989,160 - - 15,897,503 Negotiable Certificates of Deposit 3,421,507 2,890,306 1,975,993 - - 8,287,806 Municipal Bonds 2,936,385 1,666,697 1,762,575 - - 6,365,657 U.S. Treasury Notes 2,950,650 1,928,520 - - - 4,879,170 CalTrust 10,049,618 - - - - 10,049,618 CLASS 5,002,977 - - - - 5,002,977 Local Agency Investment Fund 41,849,590 - - - - 41,849,590 California Asset Management Program 85,997,169 - - - - 85,997,169 Held by Trustees:

Money Market Funds 4,087,201 - - - - 4,087,201 Total investments 193,685,270$ 43,808,704$ 13,718,528$ -$ -$ 251,212,502$

Disclosure Relating to Concentration of Credit Risk

The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. Investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5 percent or more of total City investments are as follows:

Reported Percentage
Amount of Portfolio
57,645,844$ 22.95%
18,549,900 7.38%
13,425,970 5.34%Federal Agency Securities
Investment Type
Federal Agency Securities
Federal Agency Securities
Federal Farm Credit Bank
Federal Home Loan Mortgage Corporation
Federal Home Loan Bank
Issuer

Disclosures Relating to Custodial Credit Risk

Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits:

The California Government Code requires that a financ ial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The fair value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposi ted by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. At June 30, 2025, the City’s deposits (bank balances) were collateralized under California Law.

Redlands Regular Meeting of 02-17-26
318 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

84 Note 2 – Cash and Investments (Continued)

E. Risk Disclosure (Continued)

Disclosures Relating to Credit Risk

Generally, credit risk is the risk that an issuer of an i nvestment 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 the California Government Code, the City's investment policy, or debt agreements, and the actual Moody’s rating as of year-end for each investment type.

Investment Type Total
Minimum
Legal Rating
AA+/
AA/AA- A+/A/A- AAA /AAAm Not Rated
Held by City:

Federal Agency Securities 68,795,811 $ N/A 21,658,151 $ - $ 6,883,230$ 40,254,430 $ Corporate Bonds 15,897,503 A 5,088,883 10,808,620 - - Negotiable Certificates of Deposit 8,287,806 A - - - 8,287,806 Municipal Bonds 6,365,657 N/A 3,624,602 978,480 - 1,762,575 Held by Trustee:

Money Market Funds 4,087,201 - - - 4,087,201 Total Rated Investments 103,433,978 30,371,636 $ 11,787,100 $ 6,883,230 $ 54,392,012 $ Not rated:

CalTrust 10,049,618 N/A
CLASS 5,002,977 N/A
Local Agency Investment Fund 41,849,590 N/A
California Asset Management Program 85,997,169 N/A Exempt from credit rating disclosure:

U.S. Treasury Notes 4,879,170 N/A
Total investments 251,212,502$

F. California CLASS

California CLASS is a pooled investment option that was created via a joint exercise of powers agreement by and among California public agencies. California CLASS provides California public agencies with a convenience method for investing in high-liquid, short to medium term securities. Deposits and withdrawals to and from California CLASS are transferred on the basis of $1 and not fair value. Accordingly, under the fair value hierarchy, California CLASS is valued based on inputs not categorized as level 1, level 2 or level 3. As of June 30, 2025, the City had $5,002,977 invested in the California CLASS.

G. Investment in State Investment Pool

The City is a participant in LAIF which is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. As of June 30, 2025, the City had $41,849,590 invested in LAIF. LAIF determines fair 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 securities where market value is not readily available. LAIF is reported at amortized cost, which approximates fair value.

Redlands Regular Meeting of 02-17-26
319 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

85 Note 2 – Cash and Investments (Continued)

H. California Asset Management Program

The City is a voluntary participant in the California Asset Management Program (CAMP). CAMP is an investment pool offered by the California Asset Management Trust (the Trust). The Trust is a joint powers authority and public agency created by the Declaration of Trust and established under the provisions of the California Joint Exercise of Powers Act for the purpose of exercising the common power of its Participants to inv est funds. The investments are limited to investments permitted by California Govern ment Code. The total amount invested by all public agencies in CAMP at June 30, 2025 was $22.3 billion, respectively. A board of five trustees who are officials or employees of public agencies has oversight responsibility for CAMP. The value of the pool shares in CAMP, which may be withdrawn at any time, is determ ined on an amortized cost basis, which is different from the fair value of the City’s position in the pool. At June 30, 2025 the amortized cost approximates the City’s cost.

Note 3 – Leases Receivable

A. Governmental Activities

The portion of the City’s property is leased to others. Such property includes special purpose facilities, office and commercial space, and land. Lease receivable consists of agreements with other for the right-to-use of the underlying assets at various locations owned by the City. The terms of the arrangements range from 1 to 30 years.

The calculated interest rates used vary depending on the length of the lease. For the fiscal year ended June 30, 2025, the City recognized $601,487 in lease revenue and $36,919 in interest revenue. At June 30, 2025, the City reported a deferred inflow of resources related to leases of $2,622,941.

A summary of changes in lease receivable for the fiscal year ended June 30, 2025 is as follows:

Balance Balance Due within Due in More
July 1, 2024 Additions Deletions June 30, 2025 One Year Than One Year Leases receivable 2,610,174$ 778,108$ (575,457)$ 2,812,825$ 606,553$ 2,206,272$ Classification

As of June 30, 2025, the required payments for these leases, including interest, are:

Year Ending
June 30, Principal Interest Total
2026 606,553 $ 41,617 $ 648,170 $
2027 519,157 34,668 553,825
2028 353,416 28,518 381,934
2029 224,845 23,285 248,130
2030 139,544 19,305 158,849
2031 - 2035 413,558 70,307 483,865 2036 - 2040 355,002 36,050 391,052 2041 - 2045 200,750 5,419 206,169 Total 2,812,825$ 259,169 $ 3,071,994 $
Redlands Regular Meeting of 02-17-26
320 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

86 Note 3 – Lease Receivable (Continued)

B. Business-Type Activities

The portion of the City’s property is leased to others. Such property includes special purpose facilities, office and commercial space, and land. Lease receivable consists of agreements with other 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 30 years.

The calculated interest rates used vary depending on the length of the lease. For the fiscal year ended June 30, 2025, the City recognized $262,775 in lease revenue and $40,580 in interest revenue. At June 30, 2025, the City reported a deferred inflow of resources related to leases of $2,002,410.

A summary of changes in lease receivable for the fiscal year ended June 30, 2025 is as follows:

Balance Balance Due within Due in More
July 1, 2024 Additions Deletions June 30, 2025 One Year Than One Year Leases receivable 2,394,149$ - $ (227,499)$ 2,166,650 $ 216,649 $ 1,950,001 $ Classification

As of June 30, 2025, the required payments for these leases, including interest, are:

Year Ending
June 30, Principal Interest Total
2026 216,649 $ 37,180 $ 253,829 $
2027 230,833 33,632 264,465
2028 236,592 29,925 266,517
2029 236,377 26,126 262,503
2030 173,957 22,535 196,492
2031 - 2035 262,306 92,435 354,741 2036 - 2040 262,496 69,157 331,653 2041 - 2045 345,717 38,760 384,477 2046 - 2048 201,723 5,172 206,895 Total 2,166,650$ 354,922 $ 2,521,572 $

Note 4 – Loan Receivable

On March 5, 2024, the City entered into a loan agreement with the Museum of Redlands (the “Museum”) in the amount of $1,000,000 to fund the completion of certain improvements associated with the proposed “Museum of Redlands”.

The loan bears an annual interest rate of 4% and repaym ent of the loan principal and interest accrued on the unpaid principal balance is due on or before March 5, 2026. At June 30, 2025, the out standing balance of the loan receivable was $551,178.

On May 7, 2024, the City entered into a loan agreemen t with the Museum in the amount of $2,000,000 to fund the completion of certain improvements associated with the pr oposed “Museum of Redlands”. The loan will be repaid through grant funding secured by the Museum from the State of California. The loan bears an annual interest rate of 0% and repayment of the loan princi pal is due upon receipt of the grant funding or before May 1, 2027. At June 30, 2025, the outstanding balance of the loan receivable was $0.

Redlands Regular Meeting of 02-17-26
321 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

87 Note 5 – Interfund Receivables, Payables, and Transfers

A. Due To / From Other Funds

As of June 30, 2025, due to/from other funds were as follows:

Receivable Fund Payable Fund Amount Purpose
General Fund Transportation Development Act Special Revenue Fund 2,883$ Overdrawn Cash General Fund Groves Enterprise Fund 262,312 Overdrawn Cash General Fund Aviation Enterprise Fund 154,973 Overdrawn Cash Total 420,168$

B. Advance From / From Other Funds

As of June 30, 2025, advances to/from other funds were as follows:

Advances To Advances From Amount
Water Enterprise Fund Cemetery Enterprise Fund 360,077$ Disposal Enterprise Fun d Aviation Enterprise Fund 680,157 Total 1,040,234$

The Water Enterprise Fund and Disposal Enterprise Fund a dvanced the Cemetery and Aviation Enterprise Funds a total of $1,040,234 to provide funding for capital expenditures.

C. Transfers

Interfund transfers during the year ended June 30, 2025, consisted of the following:

Transfers In Transfers Out Amount Purpose
General Fund Governmental Grants Special Revenue Fund 67,089$ Program subsidy General Fund State Gas Tax Special Revenue Fun d 2,048,335 Capital projects General Fund Traffic Safety Special Revenue Fun d 170,307 Program subsidy General Fund Water Enterprise Fun d 281,510 Program subsidy General Fund Disposal Enterprise Fun d 68,313 Program subsidy General Fund Wastewater Service Enterprise Fun d 29,277 Program subsidy General Fund Wastewater Service Enterprise Fun d 95,400 Fixed Asset Transfe r Subtotal 2,760,231
Governmental Grants Special Revenue Fund General Fund 14,448 Program subsidy Emergency Service Special Revenue Fund General Fun d 4,700,338 Program subsidy Traffic Safety Special Revenue Fund General Fun d 23,020 Program subsidy Downtown Redlands Business Area
Special Revenue Fund General Fund 30,394 Program subsidy Parking Authority Special Revenue Fund General Fun d 20,426 Program subsidy Landscape M aintenance District
Special Revenue Fund General Fund 23,255 Program subsidy Safety Hall Replacement Capital Projects Fund General Fun d 2,905,554 Capital projects Groves Enterprise Fund General Fun d 10,000 Capital projects General Liability Self-Insurance Internal Service Fund General Fun d 6,918,434 Program subsidy Information Technology Internal Service Fund General Fun d 350,000 Reserve funding Subtotal 14,995,869
PARIS Special Revenue Fund State Gas Tax Special Revenue Fun d 1,969,852 Capital projects PARIS Special Revenue Fund M easure I Special Revenue Fun d 2,152,068 Capital projects PARIS Special Revenue Fund Water Enterprise Fun d 102,412 Capital projects PARIS Special Revenue Fund Disposal Enterprise Fun d 1,885,248 Capital projects PARIS Special Revenue Fund Wastewater Service Enterprise Fun d 17,088 Capital projects Subtotal 6,126,668
Redlands Regular Meeting of 02-17-26
322 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

88 Note 5 – Interfund Receivables, Payables, and Transfers (Continued)

C. Transfers (Continued)

Transfers In Transfers Out Amount Purpose
Groves Enterprise Fund CFD 2004-1 Assessment Special Revenue Fund 144,400 Capital projects Groves Enterprise Fund Disposal Enterprise Fun d 70,199 Capital projects Subtotal 214,599
General Liability Self-Insurance Internal Service Fund Water Enterprise Fund 200,000 Reserve funding General Liability Self-Insurance Internal Service Fund Disposal Enterprise Fun d 200,000 Reserve funding General Liability Self-Insurance Internal Service Fund Wastewater Enterprise Fund 200,000 Reserve funding Subtotal 600,000
Water Enterprise Fund Non-Potable Water Enterprise Fund 57,573 Fixed asset transfe r Water Enterprise Fund Wastewater Service Fund 13,647 Fixed asset transfe r Wastewater Service Fund Water Enterprise Fund 595,919 Fixed asset transfer General Debt Service Fund Payroll Clearing Internal Service Fund 455,160 Debt service - pension bonds Total 25,819,665$

Note 6 – Capital Assets

A. Governmental Activities

The summary of changes in governmental activities capital assets for the year ended June 30, 2025, is as follows:

Balance Transfers/ Balance
July 1, 2024 Additions Deletions Reclassifications June 30, 2025 Capital assets, not being depreciated:

Land 41,707,282$ 1,938,623$ -$ -$ 43,645,905$ Water rights 408,125 - - - 408,125 Right of way 366,862,877 7,013,780 - - 373,876,657 Construction in progress 16,307,905 4,122,959 (1,237,630) (3,384,495) 15,808,739 Total capital assets, not being depreciated 425,286,189 13,075,362 (1,237,630) (3,384,495) 433,739,426 Capital assets, being depreciated/amortized:

Infrastructure 282,812,418 13,984,772 (2,348,380) 846,037 295,294,847 Building and improvements 62,724,536 1,196,968 - 2,480,986 66,402,490 M achinery, equipment and vehicles 25,482,981 2,694,145 (1,621,203) 57,472 26,613,395 Lease assets - buildings and improvements 53,177 - - - 53,177 Lease assets - machinery, equipment and vehicles 4,324,740 2,607,447 (584,194) - 6,347,993 Subscription assets 422,936 121,829 (203,575) - 341,190 Total capital assets, being depreciated/amortized 375,820,788 20,605,161 (4,757,352) 3,384,495 395,053,092 Accumulated depreciation/amortization:

Infrastructure (116,713,745) (6,253,932) 1,395,059 - (121,572,618) Building and improvements (26,597,718) (2,138,220) - - (28,735,938) M achinery, equipment and vehicles (19,338,850) (1,902,629) 1,603,130 - (19,638,349) Lease assets - buildings and improvements (26,589) (8,863) - - (35,452) Lease assets - machinery, equipment and vehicles (991,176) (1,280,348) 584,191 - (1,687,333) Subscription assets (262,742) (122,523) 203,575 - (181,690) Total accumulated depreciation/amortization (163,930,820) (11,706,515) 3,785,955 - (171,851,380) Total capital assets, being depreciated/amortized, net 211,889,968 8,898,646 (971,397) 3,384,495 223,201,712 Total capital assets, net 637,176,157$ 21,974,008$ (2,209,027)$ -$ 656,941,138$

Redlands Regular Meeting of 02-17-26
323 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

89 Note 6 – Capital Assets (Continued)

A. Governmental Activities (Continued)

Depreciation and amortization expense we re charged to the functions/programs of the governmental activities as follows:

General government 1,087,120$
Public safety 2,080,326
Culture and recreation 1,224,043
Highway and streets 6,739,708
Internal service funds 575,318
Total depreciation/amortization expense 11,706,515$

B. Business-Type Activities

The summary of changes in business-type activities capital assets for the year ended June 30, 2025, is as follows:

Balance Transfers/ Balance
July 1, 2024 Additions Deletions Reclassifications June 30, 2025 Capital assets, not being depreciated:

Land 28,069,057$ - $ - $ - $ 28,069,057$ Water rights 9,792,995 - - - 9,792,995 Construction in progress 12,194,230 8,762,998 (3,312) (3,185,417) 17,768,499 Total capital assets, not being depreciated 50,056,282 8,762,998 (3,312) (3,185,417) 55,630,551 Capital assets, being depreciated/amortized:

Infrastructure 210,736,273 7,807,601 (194,012) 2,738,030 221,087,892 Building and improvements 123,210,762 1,125,488 (9,875) - 124,326,375 Machinery, equipment and vehicles 24,968,572 4,304,703 (1,848,434) 447,387 27,872,228 Lease assets - buildings and improvements 53,178 - - - 53,178 Lease assets - machinery, equipment and vehicles 2,801,630 1,116,658 - - 3,918,288 Total capital assets, being depreciated/amortized 361,770,415 14,354,450 (2,052,321) 3,185,417 377,257,961 Accumulated depreciation/amortization:

Infrastructure (97,478,353) (3,698,166) 97,104 - (101,079,415) Buildings and improvements (85,547,198) (3,125,443) 4,937 - (88,667,704) Machinery, equipment and vehicles (18,798,825) (1,932,021) 1,806,233 - (18,924,613) Lease assets - buildings and improvements (26,589) (8,863) - - (35,452) Lease assets - machinery, equipment and vehicles (353,006) (706,424) - - (1,059,430) Total accumulated depreciation/amortization (202,203,971) (9,470,917) 1,908,274 - (209,766,614) Total capital assets, being
depreciated/amortized, net 159,566,444 4,883,533 (144,047) 3,185,417 167,491,347 Total capital assets, net 209,622,726$ 13,646,531$ (147,359)$ -$ 223,121,898$

Depreciation and amortization expense were charged to the funds of the business-type activities as follows:

Water Fund 5,097,352$
Disposal Fund 1,137,063
Wastewater Fund 2,890,740
Groves Fund 31,781
Non-Potable Water Fund 5,978
Cemetery Fund 86,469
Aviation Fund 221,534
Total depreciation/amortization expense 9,470,917$

Redlands Regular Meeting of 02-17-26
324 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

90 Note 7 – Long-Term Liabilities

A. Governmental Activities

A summary of changes in the long-term liabilities of the governmental activities for the year ended June 30, 2025, is as follows:

Balance Deb t Debt Balance Due within Due in More
July 1, 2024 Issue d Retired June 30, 2025 One Year Than One Year Gove rnme ntal Acti vi ti e s:

Public borrowings:

Taxable Pension Funding Bonds 4,585,000 $ - $ (200,000)$ 4,385,000 $ 215,000 $ 4,170,000 $ less: accreted interest (115,060) - 39,964 (75,096) - (75,096) Total taxable pension funding bonds 4,469,940 - (160,036) 4,309,904 215,000 4,094,904 Direct borrowings:

Notes payable:

I-Bank Sports Park 1,087,564 - (68,988) 1,018,576 71,162 947,414 Finance Purchase Agreements 3,701,646 - (154,448) 3,547,198 139,806 3,407,392 Total notes payable 4,789,210 - (223,436) 4,565,774 210,968 4,354,806 Lease liability 2,941,545 2,098,978 (1,055,940) 3,984,583 1,029,690 2,954,893 Subscription liability 55,044 121,829 (79,765) 97,108 22,125 74,983 Total 12,255,739$ 2,220,807$ (1,519,177)$ 12,957,369$ 1,477,783$ 11,479,586$ Classification

2007 Taxable Pension Funding Bonds

On August 1, 2007, the City issued $25,862,392 of 2007 Taxable Pension Funding Bonds to refund the City's obligation to PERS, reimburse the City for its payment of a portion of its fiscal year ended 2008 unfunded liability and pay the costs of issuance of the bonds. Interest is payable February 1 and August 1 of each year commencing on February 1, 2008. Interest rate is 5.233 percent with annual principal payments plus accreted value commencing February 1, 2008 through February 1, 2037. The amount outstanding at June 30, 2025, is $4,385,000.

The annual debt service requirements on 2007 Taxable Pension Funding Bonds are as follows:

Year Ending
June 30, Principal Interest Total
2026 215,000 $ 207,455 $ 422,455 $ 2027 230,000 207,455 437,455 2028 250,000 207,455 457,455 2029 265,000 204,799 469,799 2030 285,000 193,733 478,733 2031-2035 2,010,000 654,827 2,664,827 2036-2037 1,130,000 66,168 1,196,168 Subtotal 4,385,000 1,741,892 6,126,892 Less: accreted interest (75,096) - (75,096) Total 4,309,904$ 1,741,892$ 6,051,796$

Redlands Regular Meeting of 02-17-26
325 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

91 Note 7 – Long-Term Liabilities (Continued)

A. Governmental Activities (Continued)

I-Bank Sports Park Note Payable

On December 1, 2006, the City entered into this agreement for the purpose of obtaining additional funds to complete the Sports Park project. The City has agreed to pay the amount over thirty years commencing on the date of the lease, which carries an annual interest rate of 3. 15 percent with principal and interest payments due every six months starting August 1, 2007, and the final payment to be made on August 1, 2036. The City pledged the Community Center to obtain this loan with I-Bank. At June 30, 2025, the outstanding balance of the I-Bank Sports Park Lease Liability balance was $1,018,576.

The annual debt service requirements the I-Bank Sports Park Note Payable are as follows:

Year Ending
June 30, Principal Interest Total
2026 71,162 $ 30,964 $ 102,126 $
2027 73,403 28,687 102,090
2028 75,715 26,339 102,054
2029 78,100 23,916 102,016
2030 80,561 21,417 101,978
2031-2035 442,504 66,760 509,264
2036-2037 197,131 6,258 203,389 Total 1,018,576$ 204,341$ 1,222,917$

Finance Purchase Agreements

The City has entered into various finance purchase ag reements for various equipment purchases. These leases qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of future minimum lease payments as of the date of inception. The assets acquired under capital leases are classified as machinery, equipment and vehicles. The finance purchase agreements carry annual interest rates from 2.58 to 8.12 percent with principal and interest payments due bi-annually. The gross value of equipment acquired under finance purchase agreements at June 30, 2025, was $4,191,707, with an accumulated amortization of $644,509. The outstanding balance at June 30, 2025, is $3,547,198.

The annual debt service requirements of the finance purchase agreements are as follows:

Year Ending
June 30, Principal Interest Total
2026 139,806$ 207,046 $ 346,852 $
2027 115,512 199,440 314,952
2028 122,409 192,442 314,851
2029 129,738 185,113 314,851
2030 137,505 177,346 314,851
2031-2035 821,325 752,929 1,574,254 2036-2040 1,098,446 475,809 1,574,255
2041-2044 982,457 119,277 1,101,734 Total 3,547,198$ 2,309,402$ 5,856,600$
Redlands Regular Meeting of 02-17-26
326 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

92 Note 7 – Long-Term Liabilities (Continued)

A. Governmental Activities (Continued)

Lease Liability

The City has entered into leases for building space and equi pment use. The terms of the agreements range from 5 to 6 years. The calculated interest ra tes varied based on the length of the l ease ranging from 0.38 to 3.51 percent.

As of June 30, 2025, the capitalized right-to-use assets related to leases were $6,401,170 and the total lease liability was $3,984,583, of which $1,029,690 is reported as a current liability representing the amount due within the next fiscal year.

The annual debt service requirements of the lease liability are as follows:

Year Ending
June 30, Principal Interest Total
2026 1,029,690$ 89,204 $ 1,118,894 $
2027 1,006,888 64,569 1,071,457
2028 975,785 39,394 1,015,179
2029 799,744 14,748 814,492
2030 172,476 1,539 174,015
Total 3,984,583$ 209,454$ 4,194,037$

Subscription Liability

The City has entered into subscrip tion-based information technology arrangements (SBITAs) for services related to cloud-based software applications, data storage and management services. Under the terms of these arrangements, the City does not take possession of the software at any time and the vendor provides ongoing services for the software's operation. The subscription periods vary, with initial non-cancellable terms ranging from 2 to 6 years. The calculated interest rates varied ranging from 2.92 percent to 3.01 percent, which is based on the length of the SBITA and date of the agreement.

As of June 30, 2025, the capitalized right-to-use assets related to SBITAs were $341,190 and the total subscription liability was $97,108, of which $22,125 is reported as a cu rrent liability representing the amount due within the next fiscal year.

The annual debt service requirements of the subscription liability are as follows:

Year Ending
June 30, Principal Interest Total
2026 22,125$ 2,833$ 24,958$
2027 23,513 2,193 25,706
2028 24,972 1,505 26,477
2029 26,498 775 27,273
Total 97,108$ 7,306$ 104,414$

Redlands Regular Meeting of 02-17-26
327 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

93 Note 7 – Long-Term Liabilities (Continued)

B. Business-Type Activities

A summary of changes in the long-term liabilities of the business-type activities for the year ended June 30, 2025, is as follows:

Balance Debt Debt Balance Due within Due in More
July 1, 2024 Issue d Retired June 30, 2025 One Year Than One Yea r Business-T ype Activ ities:

Direct borrowings:

Notes payable:

California Recycled Water Project 356,135 $ -$ (356,135)$ -$ -$ -$ Safe Drinking Water Project 926,523 - (364,156) 562,367 372,727 189,640 Hinckley Water Treatment Plant Upgrade 5,746,712 - (512,536) 5,234,176 525,439 4,708,737 I-Bank Solid Waste 1,897,564 - (148,081) 1,749,483 152,538 1,596,945 I-Bank City Streets 2,120,341 - (147,377) 1,972,964 152,153 1,820,811 Finance Purchase Agreements 262,155 1,196,600 (416,313) 1,042,442 328,155 714,287 Total notes payable 11,309,430 1,196,600 (1,944,598) 10,561,432 1,531,012 9,030,420 Lease liability 2,249,119 864,165 (598,445) 2,514,839 667,434 1,847,405 Total 13,558,549$ 2,060,765$ (2,543,043)$ 13,076,271$ 2,198,446$ 10,877,825$ Classification

California Recycled Water Project Note Payable

On September 2, 2003, the City entered into a loan agreement with the California Water Resources Control Board in the amount of $7,918,234 to assist in financing the construction of advanced wastewater treatment facilities at the existing wastewater treatment plant. The note carries an annual interest rate of 2.5 percent with principal and interest payments due annually starting November 30, 2005 through November 30, 2024. The note payable was paid in full as of June 30, 2025.

Safe Drinking Water Project Note Payable

On January 30, 2004, the City entered into a loan agreement with the State of California, Department of Water Resources in the amount of $1,664,876 to assist in financi ng construction of a project which will enable the City to meet safe drinking water standards. As of June 30, 2006, the loan had been increased to $6,100,844. The note carries an annual interest rate of 2.34 percent with prin cipal and interest payments due every six months starting January 1, 2006 through January 1, 2027. At June 30, 2025, the City has $562,367 in outstanding principal.

The annual debt service requirements of the Safe Drinking Water Project Note Payable are as follows:

Year Ending
June 30, Principal Interest Total
2026 372,727$ 10,992$ 383,719$
2027 189,640 2,219 191,859
Total 562,367$ 13,211$ 575,578$

Redlands Regular Meeting of 02-17-26
328 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

94 Note 7 – Long-Term Liabilities (Continued)

B. Business-Type Activities (Continued)

Hinckley Water Treatment Plant Upgrade Note Payable

On June 21, 2011, the City entered into an agreement with the Clean Water State Revolving Fund Control Board for construction of the Hinckley water treatment pl ant upgrade. The City may borrow up to $13,663,033 or the eligible costs of the project, whichever is less. The loan has an interest rate of 2.5017 percent with maturities through 2034. Principal and interest is due every six m onths starting January 1, 2011 through July 1, 2034. The outstanding balance at June 30, 2025, is $5,234,176.

The annual debt service requirements of the Hinckley Water Treatment Plant Upgrade Note Payable are as follows:

Year Ending
June 30, Principal Interest Total
2026 525,439$ 127,678$ 653,117$
2027 538,666 114,450 653,116
2028 552,226 100,890 653,116
2029 566,127 86,989 653,116
2030 580,379 72,738 653,117
2031-2034 2,471,339 141,124 2,612,463
Total 5,234,176$ 643,869$ 5,878,045$

I-Bank Solid Waste Note Payable

On March 2, 2015, the City entered into an agreement for the purpose of obtaining additional funds to complete the Solid Waste project. The City has agreed to pay the amount over twenty years commencing on the date of the loan, which carries an annual interest rate of 3.01 percent with principal and interest payments due every six months starting August 1, 2015 through August 1, 2034. At June 30, 2025, the outstanding balance of the loan was $1,749,483.

The annual debt service requirements of the I-Bank Solid Waste Note Payable are as follows:

Year Ending
June 30, Principal Interest Total
2026 152,538$ 50,364$ 202,902$
2027 157,129 45,703 202,832
2028 161,859 40,902 202,761
2029 166,731 35,957 202,688
2030 171,750 30,863 202,613
2031-2035 939,476 72,372 1,011,848
Total 1,749,483$ 276,161$ 2,025,644$

I-Bank City Streets Note Payable

On July 1, 2016, the City entered into an agreement for the purpose of obtaining funds for the City Streets project.

The City has agreed to pay the amount over twenty year s commencing on the date of the loan, which carries an annual interest rate of 3.24 percent with principal and interest payments due every six months starting August 1, 2017 through August 1, 2035. At June 30, 2025, the outstanding balance of the loan was $1,972,964.

Redlands Regular Meeting of 02-17-26
329 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

95 Note 7 – Long-Term Liabilities (Continued)

B. Business-Type Activities (Continued)

The annual debt service requirements of the I-Bank City Streets Note Payable are as follows:

Year Ending
June 30, Principal Interest Total
2026 152,153$ 61,459 $ 213,612 $
2027 157,083 56,450 213,533
2028 162,172 51,278 213,450
2029 167,427 45,938 213,365
2030 172,851 40,426 213,277
2031-2035 951,981 112,983 1,064,964
2036 209,297 3,391 212,688
Total 1,972,964$ 371,925$ 2,344,889$

Finance Purchase Agreements

The City has entered into various finance purchase ag reements for various equipment purchases. These lease qualifies as a capital lease for accounting purposes and, therefore, has been recorded at the present value of future minimum lease payments as of the date of inception. The finance purchase agreements carry annual interest rates from 2.99 to 6.99 percent with principal and interest payments due bi-annually. The asset acquired under the finance purchase agreement is classified as machinery, equipment and vehicles. The gross value of equipment acquired under finance purchase agreements at June 30, 2025, was $1,984,256, with an accumulated amortization of $941,814. The outstanding balance at June 30, 2025, is $1,042,442.

The annual debt service requirements of the Finance Purchase Agreements are as follows:

Year Ending
June 30, Principal Interest Total
2026 328,155$ 66,597$ 394,752$
2027 222,301 50,382 272,683
2028 237,841 34,843 272,684
2029 254,145 18,640 272,785
Total 1,042,442$ 170,462$ 1,212,904$

Lease Liability

The City has entered into leases for building space and equi pment use. The terms of the agreements range from 5 to 6 years. The calculated interest ra tes varied based on the length of the l ease ranging from 0.38 to 3.51 percent.

As of June 30, 2025, the capitalized right-to-use assets related to leases were $3,971,466 and the total lease liability was $2,514,839, of which $667,434 is reported as a current liability representi ng the amount due within the next fiscal year.

Redlands Regular Meeting of 02-17-26
330 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

96 Note 7 – Long-Term Liabilities (Continued)

B. Business-Type Activities (Continued)

Lease Liability (Continued)

Principal and interest payments to maturity are as follows:

Year Ending
June 30, Principal Interest Total
2026 667,434$ 53,904 $ 721,338 $
2027 672,313 38,417 710,730
2028 635,816 22,594 658,410
2029 465,497 7,724 473,221
2030 73,779 708 74,487
Total 2,514,839$ 123,347$ 2,638,186$

Note 8 – Special Assessment Debt with No City Commitment

The special assessment bonds are secured by valid assessment liens upon certain lands within the special assessment district and are not direct liabilities of the City and, accordingly, are not included in the accompanying basic financial statements. The City has no obligation beyond the balan ces in the designated agency funds for any delinquent assessment district bond payments. If delinquencies occur be yond the amounts held in the reserve funds created from bond proceeds, the City has no duty to pay the delinquency out of any available funds of the City. Neither the faith, credit, nor taxing power of the City is pledged to the paym ent of the bonds. The City acts solely as an agent for those paying assessments and for the bondholders.

In September 2001, the City issued for and on behalf of the Community Facilities District No. 2001-1 (Northwest Development Project) $9,255,000 aggregate principal amount of 2001 Special Tax Bonds to finance the acquisition of certain public improvements with appurtenant work and incidental expenses within the District. The Bonds were issued pursuant to the Mello-Roos Community Facilities Act of 1982 and are payable from proceeds of annual special tax to be levied on the property within the District. Bonds ma turing in the years 2002 to 2015 are serial bonds payable in annual installments of $170,000 to $355,000 while bonds maturing in the year 2026 in the amount of $2,535,000 are term bonds. The interest rates on the bonds range from 3.75% to 6.45%. The outstanding balance at June 30, 2025, was $1,345,000.

In February 2004, the City issued for and on behalf of the Community Facilities District No. 2003-1 (Redlands Business Center) $9,545,000 aggregate principal amount of 2004 Special Tax Bonds to finance the acquisition and construction of certain street improvements, sewers, storm drains, water distribution facilities, and other public improvements within the District. The Bonds were issued pursuant to the Mello-Roos Community Facilities Act of 1982 and are payable from proceeds of annual special tax to be levied on the property within the District. Bonds maturing in the years 2006 to 2021 are serial bonds payable in annual installments of $20,000 to $270,000, while bonds maturing in the year 2027 in the amount of $2,255,000 and bonds maturing in the y ear 2033 in the amount of $5,280,000 are term bonds. The interest rates on the bonds range from 2.50% to 5.90%. The outstanding balance at June 30, 2025, was $6,015,000.

Redlands Regular Meeting of 02-17-26
331 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

97 Note 8 – Special Assessment Debt with No City Commitment (Continued)

Noncommittal debt amounts issued and outstanding at June 30, 2025 are as follows:

Outstanding
Original Balance
Amount June 30, 2025
CFD 2001-1 Special Tax Bonds (Northwest Development Project) 9,255,000$ 1,345,000$ CFD 2003-1 Special Tax Bonds (Redlands Business Center) 9,545,000 6,015,000 Total 18,800,000$ 7,360,000$

Note 9 – Compensated Absences

A. Governmental Activities

A summary of changes in the compen sated absences balances for the governme ntal activities for the year ended June 30, 2025 is as follows:

Balance
July 1, 2024, Increases/ Balance Due within Due in More as restate d (Decreases) June 30, 2025 One Year Than One Year Compensated absences 12,209,764$ 617,463 $ 12,827,227 $ 6,413,615 $ 6,413,612 $ Classification

Compensated absences in the governmental activities are obligations of the following funds:

Governmental Funds 12,034,308$
Liability Self-Insurance Internal Service Fund 24,968
Information Technology Internal Service Fund 315,034
Workers Compensation
Self-Insurance Internal Service Fund 64,769
Equipment Maintenance Internal Service Fund 136,539
Utility Billing Internal Service Fund 251,609
Total 12,827,227$

B. Business-Type Activities

A summary of changes in the compen sated absences balances for the business- type activities for the year ended June 30, 2025 is as follows:

Balance
July 1, 2024, Increases/ Balance Due within Due in More as restate d (Decreases) June 30, 2025 One Year Than One Year Compensated absences 2,261,528$ 153,678 $ 2,415,206 $ 1,207,604 $ 1,207,602 $ Classification

Redlands Regular Meeting of 02-17-26
332 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

98 Note 9 – Compensated Absences (Continued)

B. Business-Type Activities (Continued)

Compensated absences in the business-type activities are obligations of the following funds:

Water Fund 1,009,226$
Disposal Fund 660,750
Wastewater Fund 636,771
Groves Fund 12,442
Non-Potable Water Fund 6,320
Cemetery Fund 76,434
Aviation Fund 13,263
Total 2,415,206$

Note 10 ‒ Solid Waste Landfill

State and federal laws and regulations require the City to provide financial assurance for closure and post closure costs of the California Street Landfill site when it stops accepting waste and to perform certain maintenance and monitoring functions at the site for fifteen years after closure. Although closure and post closure activities will be paid only near or after the date that the landfill stops accepting waste, the City reports a portion of these closure and post closure costs as an operating expense in each period based on landfill capacity used as of each balance sheet date. The $15,996,513 reported as landfill closure and post closure liability at June 30, 2025, represents the cumulative amount reported to date based on the use of 70.36 percent of the total estimated capacity of the landfill including final covering. The City will recognize the remaining estimated costs of closure and post closure care of $6,737,398 as the remaining estimated capacity is filled. These amounts are based on what it would cost to perform closure and post closure activities in 2025 dollars. The City expects to close the landfill in the year 204 2. Actual costs may differ due to inflation, changes in technology or changes in regulations.

The City is required by state and federal laws and regulations to maintain adequate funds to provide financial assurance for closure and post closure costs through one of a combination of alternative mechanisms. For closure costs, the City has established an enterprise fund mechanism with a separate fund, the California Street Landfill Closure fund, that is included within the Disposal Enterprise Fund. For post closure costs, the City has entered into a Pledge of Revenue Agreement with the California Integrated Waste Manage ment Board. The City is in compliance with these requirements. At June 30, 2025, $12,897,799 is held for landf ill closure. The City expects that future inflation costs will be paid from future annual operating revenues in the enterprise fund. Post cl osure costs are agreed to be covered by revenue from solid waste customer billings which is deposited directly into the Disposal enterprise fund.

Redlands Regular Meeting of 02-17-26
333 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

99 Note 11 – Pension Plans

A. Summary

The City participates in the California Public Employees Retirement System (CalPERS), a pension plan available to all qualified employees. The Safety Plan is a cost-sharing multiple employer define d benefit pension plan. The Miscellaneous Plan is an agent multiple employer define d benefit pension plan. A summary of pension amounts for the City’s plans at June 30, 2025, is presented below:

Governmental Business-T ype
Activities Activities Total
Deferred outflows of resources:

Pension contribution made after measurement date:

CalPERS M iscellaneous 4,600,385$ 3,220,920 7,821,305 $ CalPERS Safety 13,195,999 - 13,195,999 Total pension contribution made after measurement date 17,796,384 3,220,920 21,017,304 Projected earnings on pension plan investments in excess of actual earnings:

CalPERS M iscellaneous 1,353,716 947,793 2,301,509 CalPERS Safety 5,190,489 - 5,190,489 Total projected earnings on pension plan investments in excess of actual earnings 6,544,205 947,793 7,491,998 Change in assumption
CalPERS M iscellaneous - - - CalPERS Safety 2,645,739 - 2,645,739 Total change in assumption 2,645,739 - 2,645,739 Difference between expected and actual experience:

CalPERS M iscellaneous 661,953 463,461 1,125,414 CalPERS Safety 8,478,609 - 8,478,609 Total difference between expected and actual experience 9,140,562 463,461 9,604,023 Employer contributions in excess of proportionate share of contribution:

CalPERS Safety 2,092,175 - 2,092,175 Total employer contributions in excess of proportionate share of contribution 2,092,175 - 2,092,175 Total deferred outflows of resources
CalPERS M iscellaneous 6,616,054 4,632,174 11,248,228 CalPERS Safety 31,603,011 - 31,603,011 Total deferred outflows of resources 38,219,065$ 4,632,174 $ 42,851,239 $ Net pension liabilit y:

CalPERS M iscellaneous 30,097,157$ 21,072,264$ 51,169,421$ CalPERS Safety 107,384,748 - 107,384,748 Total net pension liability 137,481,905$ 21,072,264 $ 158,554,169 $ Deferred inflows of resources:

Adjustment due to difference in proportions
CalPERS Safety 593,834$ -$ 593,834$ Total adjustment due to difference in proportions 593,834 - 593,834 Total deferred inflows of resources
CalPERS Safety 593,834 - 593,834 Total deferred inflows of resources 593,834$ -$ 593,834$ Pension ex pense (credit):

CalPERS M iscellaneous 4,960,187$ 3,472,832$ 8,433,019$ CalPERS Safety 21,153,457 - 21,153,457 Total net pension expenses 26,113,644$ 3,472,832$ 29,586,476$

Redlands Regular Meeting of 02-17-26
334 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

100
Note 11 – Pension Plans (Continued)

B. City Miscellaneous Plans

Plan Description

Substantially all City Miscellaneous employees working the equivalent of 1,000 hours per fiscal year are eligible to participate in the Miscellaneous Plan Agent multiple-employer defined benefit plan administered by California Public Employees 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 statutes within the Public Employee’s Retirement Law. 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. Copies of the CalPERS annual financial report may be obtained from the CalPERS Executive Office – 400 P Street, Sacramento, CA 95814.

Employees Covered

At June 30, 2024, the measurement date, the following employees were covered by the benefit terms for the Plan:

Miscellaneous Plans
Active employees 395
Transferred and terminated employees 488
Retired employees and beneficiaries 574
Total 1,457

Benefits Provided

CalPERS provide retirement and disability benefits, annual cost-of-living adjust ments, and death benefits to plan members and beneficiaries. Classic CalPERS member becomes eligible for service retirement upon attainment of age 55 with at least 5 years of credited service. PEPRA miscellaneous members become eligible for service retirement upon attainment of age 62 with at least 5 years of service. The service retirement benefit is a monthly allowance equal to the product of the benefit f actor, years of service, and final compensation. The final compensation is the monthly average of the member's highest 36 full-time equivalent monthly pay.

Following are the benefit provisions for each plan:

Hire Date Classic PEPRA
Benefit formula 2% @ 55 2% @ 62
Benefit vesting schedule 5 years service 5 years service Benefit payments Monthly for life Monthly for life
Retirement age 50 - 63 52 - 67
Monthly benefits, as a % of eligible compensation 1.426% to 2.418% 1.000% to 2.500% Required employee contribution rates 7.000% 8.250%
Required employer contribution rates 9.950% 9.950%
Final Annual Compensation 1 year 3 year
Miscellaneous Plans

Redlands Regular Meeting of 02-17-26
335 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

101
Note 11 – Pension Plans (Continued)

B. City Miscellaneous Plans (Continued)

Contributions

Section 20814(c) of the California Public Employees’ Retirement Law (“PERL”) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determ ined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.

For the year ended June 30, 2025, the plan’s contributions made for the Plan was as follows:

Miscellaneous Plans
Contributions - employer 7,821,305$

Net Pension Liability

The City’s net pension liability is measured as the tota l pension liability, less the pension plan’s fiduciary net position. The net pension liability of the Plan is measured as of June 30, 2024, using an annual actuarial valuation as of June 30, 2023 rolled forward to June 30, 2024 usi ng standard update procedures. A 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, 2023 actuarial valuations were determined using the following actuarial assumptions:

Actuarial Cost Method
Actuarial Assumptions:

Discount Rate
Inflation
Salary Increases
Mortality Rate Tables
(1)
Post Retirement Benefit Increase
Entry Age Normal in accordance with the requirement of GASB Statement No. 68

6.90%

2.30%
(1) The mortality table used was developed based on CalPERS-specific data. T he probabilities of mortality are based on the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. Mortality rates incorporate full generational m ortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the 2021 experience study report from November 2021 that can be found on the CalPERS website.

Varies by Entry Age and Service
Derived using CalPERS’ Membership Data for all Funds
The lesser of contract COLA or 2.30% until Purchasing Power Protection Allowance floor on purchasing power applies, 2.30% thereafter

Discount Rate

In determining the long-term expected rate of return, CalPERS took into account, bot h short-term and long-term market return expectations as well as the expected pe nsion 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 future years. Using historical returns of all the funds’ asset classes, expected com pound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11-60 years) using a building-block approach.

Redlands Regular Meeting of 02-17-26
336 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

102
Note 11 – Pension Plans (Continued)

B. City Miscellaneous Plans (Continued)

Discount Rate (Continued)

Using the expected nominal returns for both short-term and long-term, the present value of benefits 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 th e one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate ca lculated above and 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 ra te of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. These geometric rates of return are net of administrative expenses.

Assumed Asset Real Return
Asset Class
1 Allocation Years 1-10
2 Global Equity - Cap-weighted 30.00% 4.45%
Global Equity - Non-Cap-weighted 12.00% 3.84%
Private Equity 13.00% 7.28%
Treasury 5.00% 0.27%
M ortgage-backed Securities 5.00% 0.50%
Investment Grade Corporates 10.00% 1.56%
High Yield 5.00% 2.27%
Emerging Market Debt 5.00% 2.48%
Private Debt 5.00% 3.57%
Real Assets 15.00% 3.21%
Leverage -5.00% -0.59%
1An expected inflation of 2.30% used for this period.
2Figures are based on the 2021 Asset Liability Management study.

The discount rate used to measure the total pension liability was 6.90% for the plan . To determine whether the municipal bond rate should be used in the calculation of a discount rate for each plan, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate.

Based on the testing, none of the tested plans run out of assets. Therefore, the current 6.90% discount rate is adequate and the use of the municipal bond rate calculation is not necessary. The long term expected discount rate of 6.90% is applied to all plans in the Public Empl oyees Retirement Fund (PERF). The stress test results are presented in a detailed report called “GASB Crossover T esting Report” that can be obtained from the CalPERS website under the GASB 68 Section.

Sensitivity of the Net Pension Liability to Changes in the Discount Rate

The following presents the City’s net pension liability, calculated using the discount rate, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate:

Discount Rate - 1 % Current Discount Discount Rate + 1% (5.90%) Rate (6.90%) (7.90%)
78,295,590$ 51,169,421 $ 28,791,925 $ Plan's Aggregate Net Pension L iability/(Asset)

Redlands Regular Meeting of 02-17-26
337 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

103
Note 11 – Pension Plans (Continued)

B. City Miscellaneous Plans (Continued)

Changes in the Net Pension Liability

The following table shows the changes in net pension liability recognized over the measurement period:

Total Pension
Liability
Plan Fiduciary Net
Position Net Pension Liability
Balance at June 30, 2023 (Valuation Date) 203,519,621$ 148,457,542$ 55,062,079$ Changes in the year:

Service cost 4,349,924 - 4,349,924 Interest on the total pension liabilities 13,866,080 - 13,866,080 Differences between expected and actual experience 1,135,936 - 1,135,936 Changes of benefit terms - - - Benefit payments, including refunds of members contributions (11,745,669) (11,745,669) - Contributions - employer - 6,961,999 (6,961,999) Contributions - employee - 2,205,700 (2,205,700) Net investment income - 14,197,699 (14,197,699) Administrative expenses - (120,800) 120,800 Net changes 7,606,271 11,498,929 (3,892,658) Balance at June 30, 2024 (Measurement Date) 211,125,892$ 159,956,471$ 51,169,421$ Miscellaneous Plans

Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions

For the year ended June 30, 2025, the City recognized pension expense in the amount of $8,433,019 for the miscellaneous plans.

The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized over 5-years straight line. All other amounts are amortized straight-line over the average expected remaining service liv es of all members that are provided w ith benefits (active, inactive and retired) as of the beginning of the measurement period.

The Expected Average Remaining Service Lifetime (“EAR SL”) is calculated by dividing the total future service years by the total number of plan participants (active, inactive, and retired) in the risk pool. The EARSL for the Miscellaneous Plan for the 2023-24 measurement period is 3.2 years, which was obtained by dividing the total service years of 4,439 (the sum of remaining service lifetimes of the active employees) by 1,374 (the total number of participants: active, inactive, and retired).

Redlands Regular Meeting of 02-17-26
338 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

104
Note 11 – Pension Plans (Continued)

B. City Miscellaneous Plans (Continued)

Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions

At June 30, 2025 the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions made subsequent
to measurement date 7,821,305$ - $ Difference between projected and actual
earning on pension plan investments 2,301,509 - Differences between expected
and actual experience 1,125,414 - Total 11,248,228$ - $
Miscellaneous Plans

For the City Miscellaneous Plan, $7,821,305 was reported as deferred outflows of resources related to pensions resulting from City’s contributions subsequent to the me asurement date and will be recognized as a reduction of the net pension liability in the year ended June 30, 2026. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Year Ended June 30,
2025 529,622 $
2026 4,267,158
2027 (558,388)
2028 (811,469)
2029 -
Thereafter -
3,426,923$
Deferred Outflows/(Inflows)
of Resources

Pension Plan Fiduciary Net Position

Detailed information about the plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

Payable to the Pension Plan

At June 30, 2025, the City reported a payable of $0 for the outstanding amount of contributions to the pension plan required for the year ended June 30, 2025.

Redlands Regular Meeting of 02-17-26
339 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

105
Note 11 – Pension Plans (Continued)

C. City Safety Plans

Plan Description

Substantially all City Safety employ ees working the equivalent of 1,000 hou rs per fiscal year are eligible to participate in the Safety Plan Cost-sharing multiple-em ployer defined benefit plan administered by California Public Employees 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 statutes within the Public Employee’s Retirement Law. 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. Copies of the CalPERS annual financial report may be obtained from the CalPERS Executive Office – 400 P Street, Sacramento, CA 95814.

Employees Covered

At June 30, 2024, the measurement date, the following employees were covered by the benefit terms the Plan:

Safety Plans
Active employees 140
Transferred and terminated employees 56
Retired employees and beneficiaries 261
Total 457

Benefits Provided

CalPERS provide retirement and disability benefits, annual cost-of-living adjust ments, and death benefits to plan members and beneficiaries. Classic and PEPRA Safety CalPERS member becomes eligible for service retirement upon attainment of age 55 with at least 5 years of credited service. PEPRA miscellaneous members become eligible for service retirement upon attainment of age 62 with at least 5 years of service. The service retirement benefit is a monthly allowance equal to the product of the benefit factor, years of service, and final compensation. The final compensation is the monthly average of the member's highest 36 full-time equivalent monthly pay.

Following are the benefit provisions for each plan:

Hire Date Classic Fire PEPRA Fire Classic Police PEPRA Polic e Benefit formula 3% @ 50 2.7% @ 57 3% @ 50 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service 5 years service 5 years service Benefit payments Monthly for life Monthly for life Monthly for life Monthly for life Retirement age 50 50 - 57 50 50 - 57 Monthly benefits, as a % of eligible compensation 3.000% 2.000% to 2.700% 3.000% 2.000% to 2.700% Required employee contribution rates 9.00% 14.500% 9.00% 14.500% Required employer contribution rates 29.300% 14.720% 29.300% 14.720% Final Annual Compensation 1 year 3 year 1 year 3 year
Safety Cost-Sharing Plans

Redlands Regular Meeting of 02-17-26
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City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

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Note 11 – Pension Plans (Continued)

C. City Safety Plans (Continued)

Contributions

Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Th e total plan contributions are determined through the CalPERS’ annual actuarial valuation process. For public agency cost-sharing plans covered by the Safety risk pools, the Plan’s actuarially determined rate is based on the estimated amount necessary to pay the Plan’s allocated share of the risk pool’s costs of benefits earned by employees during the year, and any unfunded accrued liability.

The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.

For the year ended June 30, 2025, employer contributions made for the Safety Cost-sharing Plan was as follows:

Safety Plans
Contributions - employer 13,195,999$

Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions

The City’s net pension liability for each Plan is measured as the proportionate share of the net pension liability.

The net pension liability of the Plans is measured as of June 30, 2024, and the total pension liability for each Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2023 rolled forward to June 30, 2024 using standard update procedures. The City’s proportion of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined.

As of June 30, 2025, the City reported net pension liability for its proportionate shares of the net pension liability of the Safety Plan as follows:

Plan Total Pension Plan Fiduciary Net Plan Net Pension
L iability Position L iability/(Asset)
Balance at: 6/30/23 (Valuation date) 339,316,329$ 230,662,382 $ 108,653,947 $ Balance at: 6/30/24 (Measurement date) 349,728,704 242,343,956 107,384,748 Net Changes during 2023-2024 10,412,375 11,681,574 (1,269,199) Increase (Decrease)

The following is the approach established by the plan actuary to allocate the net pension liability and pension expense to the individual employers within the risk pool.

(1) In determining a cost-sharing plan’s proportionate share, total amounts of liabilities and assets are first calculated for the risk pool as a whole on the valuation date (June 30, 2023). The risk pool’s fiduciary net position (“FNP”) subtracted from its total pension liability (“TPL”) determines the net pension liability (“NPL”) at the valuation date.

Redlands Regular Meeting of 02-17-26
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City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

107
Note 11 – Pension Plans (Continued)

C. City Safety Plans (Continued)

Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resour ces Related to Pensions (Continued)

(2) Using standard actuarial roll forward methods, the risk pool TPL is then computed at the measurement date (June 30, 2024). Risk pool FNP at the measurement date is then subtracted from this number to compute the NPL for the risk pool at the measurement date. For purposes of FNP in this step and any later reference thereto, the risk pool’s FNP at the measurement date denotes th e aggregate risk pool’s FNP at June 30, 2023 less the sum of all additional side fund (or unfunded liability ) contributions made by all employers during the measurement period (2023-23).

(3) The individual plan’s TPL, FNP and NPL are also calculated at the valuation date.

(4) Two ratios are created by dividing the plan’s individual TPL and FNP as of the valuation date from (3) by the amounts in step (1), the risk pool’s total TPL and FNP, respectively.

(5) The plan’s TPL as of the Measurement Date is equal to the risk pool TPL generated in (2) multiplied by the TPL ratio generated in (4). The plan’s FNP as of the Me asurement Date is equal to the FNP generated in (2) multiplied by the FNP ratio generated in (4) plus any additional side fund (or unfunded liability) contributions made by the employer on behalf of the plan during the measurement period.

(6) The plan’s NPL at the Measurement Date is the difference between the TPL and FNP calculated in (5).

The City’s proportionate share of the net pension liability for the Safety Plan as of June 30, 2024 and 2023 was as follows:

Proportion June 30, 2023 1.45358%
Proportion June 30, 2024 1.47287%
Change - Increase (Decrease) 0.01930%

For the year ended June 30, 2025, the City recognized pension expense in the amount of $21,153,457 for the Safety Plan.

The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized over 5-years straight line. All other amounts are amortized straight-line over the average expected remaining service liv es of all members that are provided w ith benefits (active, inactive and retired) as of the beginning of the measurement period.

The EARSL for PERF C for the measurement date ending June 30, 2024 is 3.8 years, which was obtained by dividing the total service years of 630,177 (the sum of remaining service lifetimes of the active employees) by 166,163 (the total number of participants: active, inactive, and retired) in PERF C. Inactive employees and retirees have remaining service lifetimes equa l to 0. Total future service is b ased on the members’ probability of decrementing due to an event other than receiving a cash refund.

Redlands Regular Meeting of 02-17-26
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City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

108
Note 11 – Pension Plans (Continued)

C. City Safety Plans (Continued)

Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resour ces Related to Pensions (Continued)

At June 30, 2025, the City reported deferred outflows of resources and defe rred inflows of resources related to pensions from the following sources:

Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions made subsequent
to measurement date 13,195,999$ - $ Difference between projected and actual earning on
pension plan investments 5,190,489 - Adjustment due to differences in proportions - (593,834) Changes in assumptions 2,645,739 - Difference between actual and expected experience 8,478,609 - Difference between employer's actual contributions
and proportionate share of contributions 2,092,175 - Total 31,603,011$ (593,834) $
Safety Plans

For the City Safety Plan, $13,195,999 was reported as deferred outflows of resources related to pensions resulting from City’s contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2026. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Year Ended June 30,
Deferred Outflows/
(Inflows) of Resources
2025 6,796,044$
2026 12,603,877
2027 189,209
2028 (1,775,952)
2029 -
Thereafter -
17,813,178$

Redlands Regular Meeting of 02-17-26
343 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

109
Note 11 – Pension Plans (Continued)

C. City Safety Plans (Continued)

Actuarial Methods and Assumptions Used to Determine Total Pension Liability

For the measurement period ended June 30, 2024 (the measurement date), the total pension liability was determined by rolling forward the June 30, 2023 to tal pension liability. Both the June 30, 2024 and the June 30, 2023 total pension liabilities were based on the following actuarial methods and assumptions:

Actuarial Cost M ethod
Actuarial Assumptions:

Discount Rate
Inflation
Pay roll Growth
Salary Increases
M ortality Rate Tables
(1)
Post Retirement Benefit Increase
Entry Age Normal in accordance with the requirement of GASB Statement No. 68

6.90%

2.30%
(1) The mortality table used was develop ed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study and Review of Actuarial Assump tions. M ortality rates incorporate full generational mortality imp rovement using 80% of Scale M P-2020 published by the Society of Actuaries . For more details on this table, please refer to the 2021 experience study report from November 2021 that can be found on the CalPERS website.

2.75%
Varies by Entry Age and Service
Derived using CalPERS’ M embership Data for all Funds
The lesser of contract COLA or 2.30% until Purchasing Power Protection Allowance floor on p urchasing power app lies, 2.30% thereafter

Discount Rate

The discount rate used to measure the total pension liability was 6.90%. To determine whether the municipal bond rate should be used in the calculation of a discount rate for each plan, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing, none of the tested plans run out of assets. Theref ore, the current 6.90% discount rate is adequate and the use of the municipal bond rate calculation is not necessary. The long term expected discount rate of 6.90% 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 investments was determined using a building-block method in which best-estimate ranges of expect ed future real rates of return (exp ected 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, staff took into account both short-term a nd long-term market return expectations as well as the expected pension fund cash flows. Such cash flows we re developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11-60 years) using a building block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits 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 and 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 discount rate and asset allocation. These geometric rates of return are net of administrative expenses.

Redlands Regular Meeting of 02-17-26
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City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

110
Note 11 – Pension Plans (Continued)

C. City Safety Plans (Continued)

Discount Rate (Continued)

Assumed Asset Real Return
Asset Class
1 Allocation Years 1-10
2 Global Equity - Cap-weighted 30.00% 4.45%
Global Equity - Non-Cap-weighted 12.00% 3.84%
Private Equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed Securities 5.00% 0.50%
Investment Grade Corporates 10.00% 1.56%
High Yield 5.00% 2.27%
Emerging Market Debt 5.00% 2.48%
Private Debt 5.00% 3.57%
Real Assets 15.00% 3.21%
Leverage -5.00% -0.59%
1An expected inflation of 2.30% used for this period.
2Figures are based on the 2021 Asset Liability Management study.

Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate

The following presents the City’s proportionate share of the net pension liability for the City Safety Plan, calculated using the discount rate for the City Safety Plan, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is one per centage point lower or one percentage point higher than the current rate:

Discount Rate - 1 % Current Discount Discount Rate + 1% (5.90%) Rate (6.90%) (7.90%)
155,157,353$ 107,384,748 $ 68,313,473 $ Plan's Aggregate Net Pension L iability/(Asset)

Pension Plan Fiduciary Net Position

Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

Payable to the Pension Plan

At June 30, 2025, the City reported a payable of $0 for the outstanding amount of contributions to the pension plan required for the year ended June 30, 2025.

Redlands Regular Meeting of 02-17-26
345 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

111
Note 12 – Other Postemployment Benefits

A. Summary

Governmental Business-Type
Activities Activities Total
Deferred Outflows of Resources:

Employer contributions made
subsequent to the measurement date 4,731,598$ 1,577,545$ 6,309,143$ Difference between expected and actual experience 6,730,755 2,244,077 8,974,832 Changes in assumptions 20,620,257 6,874,929 27,495,186 Total deferred outflows of resources 32,082,610$ 10,696,551$ 42,779,161$ Total OPE B liability:

Total OPEB liability 98,257,355$ 42,703,270$ 140,960,625$ Total OPE B liability 98,257,355$ 42,703,270$ 140,960,625$ Deferred Inflows of Resources:

Difference between expected and actual experience 22,016,093$ 6,083,185$ 28,099,278$ Changes in assumptions 28,116,957 7,768,891 35,885,848 Total deferred inflows of resources 50,133,050$ 13,852,076$ 63,985,126$ O PEB Expe nse 6,138,262$ 2,272,372$ 8,410,634$

B. General Information about OPEB

Plan Description

The City’s administers a defined benefit OPEB plan (Plan), which provides medical insurance benefits to eligible retirees and their spouses in accordance with applicab le Memoranda of Understanding and the California Government Code to all employees who retire from the City. The Plan is an agent single-employer defined benefit OPEB plan administered by the City and is governed by the City Council. No assets are accumulated in a trust that meets the criteria in paragraph 4 of Statement 75.

City’s Funding Policy

The contribution requirements of plan members and the City are established, and may be amended, by City Council.

The contribution required to be made under City Council and labor agreement requirements is based on a pay-as- you go basis (i.e., as medical insurance premiums become due). The City allows retirees to participate in the same medical plan as active employees at the same premium rates. Because the rate is a “blended rate”, payments for the active employees include an implied subsidy of what would normally be a higher rate for retirees if the retirees were in a stand-alone health plan.

GASB Statement No. 75, Accounting and Financial Reporting by Employers for Post-Employment Benefits Other Than Pensions, requires governments to account for other post-employment benefits (OPEB) on an accrual basis, rather than a pay-as-you-go basis. The effect is the recognition of an actuarially determined expense when a future retiree earns their post-employment benefits, rather than when they use their post-employment benefits.

Redlands Regular Meeting of 02-17-26
346 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

112
Note 12 – Other Postemployment Benefits (Continued)

B. General Information about OPEB (Continued)

Benefits Provided

After age 65, the City contributes a flat monthly ra te of $397 for those employees who retire under the PERS retirement system, subscribe to the PERS Health Insurance System, and have at least five years of CalPERS service, in accordance with Government Code. This is a perpetual benefit which is available to all PERS retirees including eligible dependents of deceased retirees. Annual increases in the monthly rate are limited to $20 and based upon the annual increase in PERS family premiums. In addition, the City also contributes the entire monthly premium for health insurance for all employees who retire with the City and have a minimum of 15 or 20 years of cumulative service with the City, depending on the particular bargaining units. A summary of benefits provided is shown below:

Employee Group Service Medical Dental Vision
Police (RPOA Members)
Employees hired on or after November 4, 2014
with at least 5 years of CalPERS service $397 per month maximum None None Employees hired on or after November 4, 2014
with at least 15 years of CalPERS service
100% of Least Expensive
Retiree-only Premium
until age 65 and $397 after
100% of Premium
until age 65 for retiree
only
100% of Premium
until age 65 for retiree
only
Employees hired prior to November 4, 2014
with at least 15 years of City service
100% of Premium &
Medicare Part B for
Lifetime of Retiree and
Spouse and eligible
dependents
100% of Premium of
Retiree and Spouse and
eligible dependents
100% of Premium of
Retiree and Spouse and
eligible dependents
Firefighters (RPFA and RAFME Members)
Employees hired on or after October 16, 2012
with at least 5 years of CalPERS Service $397 per month maximum None None Employees hired on or after October 16, 2012
with at least 15 years of CalPERS Service
100% of Least Expensive
Retiree-only Premium
until age 65 and
PEMHCA MRC after
$397
100% of Premium
until age 65 for retiree
only
100% of Premium
until age 65 for retiree
only
Employees hired prior to March 11, 2010 with
at least 20 years (15 Years for RAM E
Me m be rs) of Ci ty S e rvi c e
100% of Premium &
Medicare Part B for
Lifetime of Retiree and
Spouse and eligible
dependents
100% of Premium for
Lifetime of Retiree and
Spouse and eligible
dependents
$225 Maximum
Reimbursement Per Year
for Lifetime of Retiree and
Spouse and eligible
dependents
Miscellaneous (Teamsters, RCS EA, RAMME and RAME* Members) Employees hired on or after March 11, 2010
with at least 5 years of CalPERS Service $397 per month maximum None None Employees hired on or after March 11, 2010
with at least 10 years of CalPERS Service
100% of Least Expensive
Retiree-only Premium
until age 65 and
PEMHCA MRC after
$397
100% of Premium
until age 65 for retiree
only
None
Employees hired prior to March 11, 2010 with
at least 20 years (15 Years for RAM E
M embers) of City Service
100% of Premium &
Medicare Part B for
Lifetime of Retiree and
Spouse and eligible
dependents
100% of Premium for
Lifetime of Retiree and
Spouse and eligible
dependents
None

Redlands Regular Meeting of 02-17-26
347 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

113
Note 12 – Other Postemployment Benefits (Continued)

B. General Information about OPEB (Continued)

Benefits Provided (Continued)

Miscellaneous (RAS ME Members)
Employees hired on or after June 2, 2015 with
at least 5 years of CalPERS Service $397 per month maximum None None Employees hired on or after June 2, 2015 with
at least 15 years of CalPERS Service
100% of Least Exp ensive
Retiree-only Premium
until age 65 and
PE MHCA MRC a fte r
$397
100% of Premium
until age 65 for retiree
only
None
Employees hired prior to June 2, 2015 with at
least 15 years of City Service
100% of Premium &
Medicare Part B for
Lifetime of Retiree and
Spouse and eligible
dependents
100% of Premium &
Medicare for Lifetime of
Retiree and Spouse and
eligible dependents
100% of Premium for
Lifetime of Retiree and
Spouse and eligible
dependents
Miscellaneous (RADD Members)
Employees hired on or after January 1, 2009
with at least 5 years of CalPERS Service* $397 per month maximum None None Employees hired on or after January 1, 2009
with at least 10 years of CalPERS service
100% of Least Exp ensive
Retiree-only Premium
until age 65 and
PE MHCA MRC a fte r
$397
100% of Premium until
age 65 for retiree only None
Employees hired prior to January 1, 2009 with
at least 15 years of City Service **
100% of Premium &
Medicare Part B for
Lifetime of Retiree and
Spouse and eligible
dependents
100% of Premium &
Medicare for Lifetime of
Retiree and Spouse and
eligible dependents
100% of Premium for
Lifetime of Retiree and
Spouse and eligible
dependents

Some retirees are eligible for a medical bridge program, in which the City contributes the amount of the maximum of lowest cost single premium rate $397. Eligibility for the medical bridge program is as follows:

RADD 3 years of service
RAME 10 years of service
RPOA, RAFME, RASME 15 years of service
RAM M E, RCSEA, Teamsters 20 years of service

Employees Covered

At June 30, 2024, the most recent valuation date, the following current and former employees were covered by the benefit terms under the Plan:

Active employees 533
Retired employees and beneficiaries 373
Total 906

Redlands Regular Meeting of 02-17-26
348 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

114
Note 12 – Other Postemployment Benefits (Continued)

C. Total OPEB Liability, OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB

Total OPEB Liability

The City’s total OPEB liability was measured as of June 30, 2024. The total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valua tion as of June 30, 2024. The total OPEB liability at June 30, 2025 was $140,960,625.

Actuarial Assumptions

The total OPEB liability in the June 30, 2024 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:

Actuarial Assumptions:

Discount Rate
Inflation
Aggregate payroll increases
Expected long-term investment rate of return
Mortality, Termination, and Disability
Mortality Improvement Scale
Healthcare Trend Rate Pre-Medicare ages: 8.00 percent for 2024/25 to 4.50 percent for 2038/39; Medicare ages: 6.50 percent for 2024/25 to 4.50 percent for 2038/39.

4.21%

2.80%

2.80% plus merit increases for Miscellaneous employees based on the 2021 CalPERS Experience Study
n/a
CalPERS 2021 Experience Study
Modified projected fully generational with Scale MP-2021

The actuarial assumptions used in the June 30, 2024 valuation were based on the results of an actuarial experience study for the period July 1, 2023 through June 30, 2024.

Discount Rate

The discount rate used to measure the total OPEB liability 4.21%. The City’s funding policy affects the calculation of liabilities by impacting the discount rate that is used to develop the plan liability and expense. The City is currently financing its OPEB liability on a pay-as-you-go basis, the discount rate used is based on the S&P Municipal Bond 20 Year High Grade Index.

Change of Assumption

The discount rate was changed from 4.13% to 4.21% based on updated 20-year municipal bond rates.

Change in the Total OPEB Liability

Total OPEB
L iability
Balance at June 30, 2023 (Measurement Date) 129,893,381$ Changes Recognized for the M easurement Period:

Service Cost 3,653,758
Interest on the total OPEB liability 5,399,024
Changes of benefit terms -
Difference between expected and actual experience 7,355,613 Changes of assumptions 356,830
Benefit payments (5,697,981)
Net Changes during July 1, 2023 to June 30, 2024 11,067,244 Balance at June 30, 2024 (Measurement Date) 140,960,625$ Redlands Regular Meeting of 02-17-26
349 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

115
Note 12 – Other Postemployment Benefits (Continued)

C. Total OPEB Liability, OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB (Continued)

Sensitivity of the Total OPEB Liability to Changes in the Discount Rate

The following presents the total OPEB liability of the City, as well as what th e City’s total OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (3.21 percent) or 1-percentage- point higher (5.21 percent) than the current discount rate:

Discount Rate - 1% Current Discount Discount Rate + 1%
(3.21%) Rate (4.21%) (5.21%)
162,340,325$ 140,960,625 $ 123,662,322 $ Plan's Total OPE B L iability

Sensitivity of the Total OPEB Liability to Changes in the Health Care Cost Trend Rates

The following presents the total OPEB liability of the City, as well as what th e City’s total OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower or 1-percentage-point higher than the current healthcare cost trend rates:

Healthcare Cost
-1% Trend Rates +1%
121,806,850$ 140,960,625 $ 165,092,587 $ Plan's Total OPE B L iability

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

For the fiscal year ended June 30, 2025, the City recognized OPEB expense of $ $8,410,634. At June 30, 2025, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred Outflows Deferred Inflows
of Resources of Resources
Employer contributions made
subsequent to the measurement date 6,309,143$ -$ Difference between expected and actual experience 8,974,832 (28,099,278) Changes of assumptions 27,495,186 (35,885,848) Total 42,779,161$ (63,985,126) $

The difference between projected OPEB plan investment earnings and actual earnings is amortized over a five- year period. The remaining gains an d losses are amortized over the expected average remaining service life. The expected average remaining service life is 10 years, which was determined as of June 30, 2023, the beginning of the measurement period, for employees covered by the OPEB plan benefit terms as of the valuation date.

Redlands Regular Meeting of 02-17-26
350 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

116
Note 12 – Other Postemployment Benefits (Continued)

C. Total OPEB Liability, OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB (Continued)

For the OPEB Plan, $6,309,143 was reported as deferred outflows of resources related to OPEB resulting from City’s contributions subsequent to the measurement date will be recognized as a reduction of the net OPEB liability in the year ended June 30, 2026. Other amounts reported as deferred outflows of resources related to OPEB will be recognized as future OPEB expense as follows:

Year Deferred Outflows/
Ended June 30 (Inflows) of Resources
2026 (520,222)$
2027 (1,665,429)
2028 (2,777,221)
2029 (2,777,221)
2030 (2,777,228)
Thereafter (16,997,787)
(27,515,108)$

Note 13 – Risk Management

A. Coverage

During the year ended June 30, 2025, the City was self-i nsured for the first $500,000 per occurrence for general liability. The City purchased excess liab ility insurance to provide additional coverage of $25,000,000 aggregate.

The City also purchased airport liability and aircraft liability insurance with a lia bility amount of $25,000,000 aggregate with a $0 deductible. For workers’ compensation and employer's liability, the City was self-insured for $1,000,000 per occurrence with excess coverage of $25,000,000 for worker's compensation per occurrence with a $25,000,000 aggregate, and $1,000,000 for employer's liability per occurrence.

For property insurance, the City was self-insured for the amount of $75,000 per occurrence. The City purchased excess property insurance for $350,000,000 aggregate. This includes boiler and machinery, flood, earthquake, cyber, and pollution coverage.

For storage pollution liability, the City is insured for $2,000,000 with a $10,000 deductible.

For crime insurance, the City is insured for $1,000,000 with a $2,500 deductible.

B. Claims Activity

At June 30, 2025, $6,401,341 and $13,451,438 have been accrued for general liability and workers’ compensation claims, respectively. All funds of the City participate in the worker's compensation program and make payments to the Workers’ Compensation Internal Service Fund based on estimates of the amounts needed to pay prior and current year claims. The Liability Insurance Internal Service Fund receives an annual operating transfer from the General Fund to cover operating costs in cluding payment of claims. The liab ility for unpaid claims for general liability and workers’ compensation is discounted to reflect anticipated future investment earnings, assuming a five percent interest rate. Settled claims have not exceeded the commercial coverage in the past three years.

Redlands Regular Meeting of 02-17-26
351 of 976
City of Redlands
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

117
Note 13 – Risk Management (Continued)

B. Claims Activity (Continued)

The accruals indicated above represent estimates of amounts to be paid for reported claims and incurred but not reported claims based upon past experience, modified fo r current trends and information. While the ultimate amounts of losses incurred through June 30, 2025, are dependent on future developments, based upon information provided from the City Attorney, outside counsel and others involved with the administration of the programs, the City's management believes that the aggregate accrual is adequate to cover such losses.

A summary of the changes in claims liabilities for the past three fiscal years follows:

Current Year
Beginning of Claims and Balance at Due in
Fiscal Year Changes in Claim F iscal Year Due Within More than Liability Estimates Payments End One Year One Year
General Liability
2025 4,400,552$ 3,460,965$ (1,460,176)$ 6,401,341$ 3,200,671$ 3,200,670$ 2024 4,306,893 459,803 (366,144) 4,400,552 2,200,276 2,200,276 2023 2,595,507 2,374,997 (663,611) 4,306,893 2,153,447 2,153,446 Workers' Compensation
2025 11,032,921$ 3,410,740$ (992,223)$ 13,451,438$ 6,725,719$ 6,725,719$ 2024 11,219,000 707,740 (893,819) 11,032,921 5,516,461 5,516,460 2023 12,171,624 185,188 (1,137,812) 11,219,000 5,609,500 5,609,500

Note 14 ‒ Fund Balance and Net Position

A. Fund Balance/Net Position Deficits

At June 30, 2025 the Governmental Activities Statement of Net Position had an unrestricted net position deficit of $(113,289,589). This deficit is primarily attributable to the long-term pension and OPEB obligations reported under GASB Statements 68 and 75, including a net pension liab ility of approximately $137.5 million and a total OPEB liability of approximately $98.3 million.

At June 30, 2025, the following funds had a fund balance (deficit) or unrestricted net position (deficit):

Fund Fund Type Deficit
Governmental Grants Special Revenue Fund Special Revenue Fund (872,266)$ Transportation Development Act Fund Special Revenue Fund (2,883) Disposal Fund Enterprise Fund (711,952)
General Liability Self-Insurance Fund Internal Service Fund (5,552,615) Workers' Compensation Self-Insurance Fund Internal Service Fund (8,721,096) Utility Billing Fund Internal Service Fund (3,203,479)

Special Revenue Funds

A net deficit of $872,266 exists in the Governmental Grants Special Revenue Fund. This fund deficit is a result of expenditures that have not been submitted for grant reimbursement and reimbursements that have not been received. This net deficit will be eliminated when the grant funds are received in future years.

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Note 14 ‒ Fund Balance and Net Position (Continued)

A. Fund Balance/Net Position Deficits (Continued)

Special Revenue Funds (Continued)

A net deficit of $2,883 exists in the Transportation Development Act Fund. This fund deficit is a result of the timing of grant reimbursements. This net deficit will be eliminated during the upcoming fiscal year.

Enterprise Funds

A net deficit of $711,952 exists in the Disposal Fund as a result of the City’s implementation of GASB Statements No. 68 and 75, which required the reporting of the fund’s proportionate share of the City’s net pension liability and other post-employment benefits liability, respectively. Management expects to continue to carefully monitor this fund and intends to alleviate this net deficit through cost containment measures and continued pension contributions towards its unfunded liability.

Internal Service Funds

A net deficit of $5,552,615 exists in the General Liab ility Self-Insurance Fund due to new and existing claims.

Management expects to continue to carefully monitor this fund and intends to alleviate this net deficit through increased charges to other funds for cost recovery and instituting cost containment measures.

A net deficit of $8,721,096 exists in the Workers’ Compensation Self-Insurance F und due to new and existing claims. Management expects to continue to carefully monitor this fund and in tends to alleviate this net deficit through increased cost recovery charges, instituting cost containment measures.

A net deficit of $3,203,479 exists in the Utility Billing Fund. This f und deficit is a result of the City’s implementation of GASB Statement No. 68 and 75 which required reporting of the fund’s proportionate share of the City’s net pension liability and ot her post-employment benefits, respectiv ely. This net pension liability and other post-employment benefits created the corresponding net deficit, these will be reduced by continued pension contributions in future years.

B. Expenditures Exceeding Appropriations

For the year ended June 30, 2025, expenditures exceeded appropriations in the following funds by function/department:

Exce ss Expe ndi ture s
Fund Function over Appropriations
General Fund General government:

City attorney 139,546 $
Debt service:

Principal 1,041,301
Governmental Grants Special Revenue Fund Library 2,182,592 Open Space Special Revenue Fund Culture and recreation 1,316 Parking Authority Special Revenue Fund General government 290 Asset Forfeiture Special Revenue Fund Capital outlay 58,124 PARIS Special Revenue Fund Highway and streets 72,917
Public Facilities Development Special Revenue Fund General government 1,607 General Debt Service Fund General government 22
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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

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Note 15 – Fund Balance Classification

At June 30, 2025, the City reports the following fund balance classifications:

Governmental
Grants Non-major
General Special Revenue Governmental
Fund Fund Funds Total
Nonspendable
Prepaid items 430,838$ 157,372$ 65,997$ 654,207$ Notes receivable 551,178 - - 551,178 Endowment - non-expendable - - 30,200 30,200 Total nonspendable 982,016 157,372 96,197 1,235,585 Restricted
Donations 1,067,304 - - 1,067,304 PEG fees 724,992 - - 724,992 Park and open space acquisition/improvement - - 5,945,504 5,945,504 Public facilities - - 2,545,043 2,545,043 Public safety - - 398,763 398,763 Police programs and equipment - - 1,964,140 1,964,140 Public art - - 10,335 10,335 Street reconstruction/improvement projects - - 13,579,675 13,579,675 Debt service - - 637,959 637,959 Storm drain improvements - - 3,063,594 3,063,594 Endowment - expendable - - 35,245 35,245 CFD assessment - - 201,474 201,474 Total restricted 1,792,296 - 28,381,732 30,174,028 Committe d
Stabilization agreement 11,069,310 - - 11,069,310 Public benefit: parks, recreation, trails,
open space, and improvements 2,410,336 - - 2,410,336 Total committed 13,479,646 - - 13,479,646 Assigne d
Public works 1,853,968 - - 1,853,968 Capital projects 32,851,145 - 2,257,421 35,108,566 Total assigne d 34,705,113 - 2,257,421 36,962,534 Unassigned (deficit) 63,374,540 (1,029,638) (2,883) 62,342,019 Total fund balances 114,333,611$ (872,266) $ 30,732,467 $ 144,193,812 $

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For the Year Ended June 30, 2025

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Note 16 – Net Investment in Capital Assets

Net Investment in Capital Assets at June 30, 2025 consisted of the following:

Governmental Business-Type
Activities Activities
Net investment in capital assets:

Capital assets, nondepreciable 433,739,426$ 55,630,551$ Capital assets, depreciable/amortizable, net 223,201,712 167,491,347 Long-term debt:

I-Bank Sports Park (1,018,576) -
Finance purchase agreement (3,547,198) (1,042,442) Lease liability (3,984,583) (2,514,839)
Subscription liability (97,108) -
California Recycled Water Project - - Safe Drinking Water Project - (562,367) Hinckley Water Treatment Plant Upg rade - (5,234,176) I-Bank Solid Waste - (1,749,483) I-Bank City Streets - (1,972,964) Total net investment in capital assets 648,293,673$ 210,045,627$

Note 17 ‒ Tax Abatements – Economic Development Incentives

GASB Statement No. 77, Tax Abatement Disclosures, defines tax abatements as resulting from an agreement between a government and an individual or entity in which the govern ment promises to forgo tax revenues and the individual or entity promises to subsequently take a specific action that contributes to the economic development or otherwise benefits the government or its citizens. According to GASB No. 77, the substance of these agreements meet the definition of “tax abatements” as the revenues received were not available for general municipal services purposes, but rather used to effectively reduce the net tax liability of certain taxpayers per the conditions of an agreement.

The City offers an economic development incentive program to the entities that propose to locate or expand already established businesses within the City. This incentive program is expected to provide a stimulus to the City’s economy, increase the tax base and create jobs. Each of the agreements entered into by the City, provides for a rebate of taxes paid to the City according to formulas contained in the agreements. These limited term agreements provide for a sharing of the taxes (percentage rebates) above certain amounts with a maximum rebate not to ex ceed the cost of a business’ improvements and/or development impact fees. The City generally expects to receive increased revenue as a result of these agreements. These incentive agreements require approval by the City Council.

The City currently has two of these agre ements in effect. For the fiscal year ended June 30, 2025, under this program the City had abatements of sales tax totaling $94,957. Pursua nt to the Sales and Use Tax law (chapter 8 – Article 1 – section 7056), in order to protect the confidential information of sales taxes collected and abatements provided to each of the specific agencies, the City has presented the aggregate amount abated during the current fiscal year.

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For the Year Ended June 30, 2025

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Note 18 ‒ Endowments

Simonds Endowment

The amount of net appreciation available for expenditure in the Simonds Endowment Fund is $31,133. This available amount is reflected as fund balance. The endowment corpus is $10,000 and is reflected as nonspendable fund balance.

In California, Endowments are subject to the requirements of the Uniform Prudent Management of Institutional Funds Act (UPMIFA), specifically Cal. Probate Code §18504. State law governing the City’s ability to spend the net appreciation provides that the City may appropriate “so much of an endowment fund as the institution determines is prudent for the uses, benefits, purposes, and duration for which the endowment fund is established”. The City’s policy for authorizing and spending the investment income is governed by City Council aut horization and appropriation authority, as well as the agreement of Endowment of the Si monds Parkway, dated December 14, 1985. Provisions of that agreement include, among other things, that interest generated on a per annum basis may be expended for providing maintenance, materials, and equipment solely at the Simonds Parkway.

Pauline Stancliff Memorial Trust

The amount of net appreciation available for expenditure in the Pauline Stancliff Memorial Trust Fund is $4,112. This available amount is reflected as fund balance. The endowment corpus is $20,200 and is reflected as nonspendable fund balance. In California, Endowments are subject to th e requirements of the Uniform Prudent Management of Institutional Funds Act (UPMIFA), specifically Cal. Probate Code §18504. State law governing the City’s ability to spend the net appreciation provides that the City may appr opriate “so much of an endowment fund as the institution determines is prudent for the uses, benefits, purposes, and duration for which the endowment fund is established”. The City’s policy for authorizing and spending the investment income is governed by City Council authorization and appropriation authority, as well as a minute motion on July 26, 2012 establishing a memorial trust fund in the name of Pauline Stancliff to be used for creating programs which fo cus on the goal of improving the quality of life for seniors who attend the Joslyn Senior Center.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

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Note 19 ‒ Restatements of Beginning Balances

During the current year, the City implemented GASB Statement No. 101, Compensated Absences. In addition to the value of unused vacation time owed to employees upon sep aration of employment, the City now recognizes an estimated amount of sick leave earned as of year-end that will be used by employees as time off in future years as part of the liability for compensated absences. The effects of th e change in accounting principle are summarized below in the “Restatement - GASB 101 implementation” column in the table below.

June 30, 2024,
As Prev iously
Reported
Restatement - GASB
101 imp lementation
June 30, 2024,
As Restated
Government-wide
Governmental activities 557,931,945 $ (3,571,261) $ 554,360,684 $ Business-type activities 223,940,878 (997,230) 222,943,648 Total gov ernment-wide 781,872,823$ (4,568,491) $ 777,304,332 $ Proprietary funds
Enterprise funds
Major funds:

Water Fund 151,159,960 $ (371,145) $ 150,788,815$ Disposal Fund (4,346,879) (304,967) (4,651,846) Wastewater Fund 55,865,212 (266,046) 55,599,166 Non-major funds:

Groves Fund 13,946,889 (7,740) 13,939,149 Non-Potable Water Fund 3,881,728 (4,530) 3,877,198 Cemetery Fund 996,762 (33,149) 963,613 Aviation Fund 2,437,206 (9,653) 2,427,553 Total enterprise funds 223,940,878$ (997,230) $ 222,943,648$ Internal service funds
General Liability Self-Insurance Fund (3,713,921) $ (16,689) $ (3,730,610)$ Workers' Compensation Self-Insurance Fund (7,214,639) (44,755) (7,259,394) Information Technnology Fund 2,510,685 (100,085) 2,410,600 Equipment Maintenance Fund 2,689,369 (52,470) 2,636,899 Utility Billing Fund (2,290,020) (63,745) (2,353,765) Payroll Clearing Fund 72,901 - 72,901 Total internal service funds (7,945,625)$ (277,744) $ (8,223,369) $

Note 20 – Commitments and Contingencies

A. Litigation

The City is currently a party to various claims and legal proceedings. Although the outcome of these lawsuits is not presently determinable, it is mana gement’s opinion that the ultimate li abilities, if any, resulting from such claims and proceedings will not materially affect the financial position of the City.

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For the Year Ended June 30, 2025

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Note 20 – Commitments and Contingencies (Continued)

B. Sales Tax – Donut Hole

In 1998, the voters of California approved Proposition No. 11 which amended Article XIII, Section 29 of the California Constitution to allow cities and counties to ente r into contracts to apportion sales and use tax revenue, by ordinance or resolution, and upon approval by a two-thir ds vote of the legislative bodies of the parties to the contract. The City has provided in its contract with the County of San Bernardino that the benefit of receiving the sales and use tax revenue generated by businesses located in the unincorporated area of the Donut Hole, in exchange for the City's provision of municipal services, will terminate on December 31, 2003, unless an extension of the term of the contract beyond December 31, 2003, is consented to by a majority vote of the qualified voters of the City. The term has been extended beyond December 31, 2003, under the Ordinance No. 2550. The County of San Bernardino and the City apportion the sales and use tax revenue generated by businesses located in the Donut Hole generally on the basis of ninety percent (90 percent) of such sales and use tax revenue being provided to the City and ten percent (10 percent) of such sales and use tax revenue being provided to the County.

C. Federal and State Grants

The City participates in various federal grant programs, the principal of which are subject to program compliance audits pursuant to the Single Audit act as amended. Acco rdingly, the City’s compliance with applicable grant requirements will be established at a future date. The amount of expenditures which may be disallowed by the granting agencies cannot be determined at this time, alt hough the City anticipates such amounts, if any, will be immaterial.

D. Contractual Commitments

The City has capital contractual commitments for which funds have been encumbered as of June 30, 2025.

Encumbrances related to capital projects are funded throug h the current year appropriated budget, which carries over to the following year.

The following contractual construction commitments existed at June 30, 2025:

Project Title Commitment
General Fund
Animal Services Dog Kennels 243,625$
Asphalt Patch Truck 410,813
Bay Doors for Fire Stations 261, 262, & 263 490,205
New Generator for Fire Station 262 6,632
Texonia Park Renovation 44,850
Total for General Fund 1,196,125
Governmental Grants Special Revenue Fund
HSIP Cycle 10 Enhanced Crosswalk Project 248,067
HSIP Cycle 11 Traffic Signal Head Improvements 20,759
HSIP Cycle 11 Traffic Signal Installation 108,484
Joslyn Senior Center Renovation 25,051
Library Lower Level Architecture Design 24,488
Wastewater Treatment Plant Primary Clarifier Upgrade 76,048 Total for Governmental Grants Special Revenue Fund 502,897$ Redlands Regular Meeting of 02-17-26
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For the Year Ended June 30, 2025

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Note 20 – Commitments and Contingencies (Continued)

D. Contractual Commitments (Continued)

Project Title Commitment
Wate r Fund
2023 CIP Water Pipeline & Highline Replacement 6,015,375$ 2025 Citywide Pavement Repair 340,473
Emergency Power Generators 907,479
Hinckley Sludge Press Project 735,481
Recycled Water California St. Orange Groves Project - Water Portion 412,306 Security Fencing Installation for Water Facilities 1,383,815 Sunset Reservoir Engineering Design Services 1,290,362
Tate Water Treatment Plant Influent Line Replacement 159,921 Water SCADA System Upgrade 2,569,793
Total for Water Fund 13,815,005
Solidwaste Fund
Landfill Phase 5 Project $183,034
Solidwaste Vehicles 968,280
Total for Solidwaste Fund 1,151,314
Waste wate r Fund
Recycled Water California St. Orange Groves Project - Wastewater Portion $99,187 Wastewater Treatment Plant Rehabilitation - Phase 2 438,838 Total for Wastewater Fund 538,025
Non-Major Funds
Cemetery Surveying & Map Update - Cemetery Fund 15,100$ Design & Construction Mgmnt of New City Hall - Safety/City Hall Replacement Fund 2,270,536 Design & Construction Mgmnt of a Public Safety Facility - Safety/City Hall Replacement Fund 5,533,818 Orange Blossom Trail Phase 4 - Transportation Development Act Fund 960,145 Recycled Water Distribution System Expansion - Nonpotable Water Fund 278,447 Total for Non-Major Funds 9,058,046
Internal Service Funds
Fleet Vehicle Exhaust System 46,845$
Toyota Forklift 50-8FG4 75,865
Total for Non-Major Funds 122,710
Total for City 26,384,122$

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REQUIRED SUPPLEMENTARY INFORMATION
(UNAUDITED)
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Budgetary Information
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Budgetary Information

Budgets are legally adopted and formal budgetary integration is employed as a management control device during the year for all governmental fund types. The budget is pr epared in accordance with accounting principles generally accepted in the United States of America. From the effective date of the budget, the amounts stated therein as proposed expenditures become appropriations to the various City departments.

The City Council may amend the budget only during a regular meeting, providing that sufficient monies are available and that expenditures of proceeds of taxes will not be increased beyond the cons titutional appropriation limit as imposed by Article XIIIB of the State Constitution.

The City's formal budgetary process begins at the operating program level. Departmental budgets are comprised of the various operating program budgets. Operating programs do not cross departmental lines. Individual fund budgets consist of the departmental budgets; departmental budgets may cross fund lines.

Individual fund budgets are, in all cases where appropria tions are required, the same as the appropriation amounts. In the case of the Governmental Fund types, unexpended budgeted amounts, except for amounts relating to capital projects, lapse at the end of the budget year. Spending control (legal level) for most funds is established by the amount of expenditures budgeted at the departmental and function levels. Accordingl y, the General Fund expenditures are displayed in the supplementary schedules at the department level and the Special Revenue, Debt Service, Capital Projects, and Permanent Funds expenditures are displayed at the function level. Management control is exercised at the line item level in each operating program. Management can transfer budgeted amounts within operating programs, departments or funds, provided that such transfers do not increase the overall budget. Appropriations that increase the budget require City Council approval.

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Required Supplementary Information (Unaudited) (Continued) Budgetary Comparison Schedules – General Fund
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Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES :

Property taxes 42,184,339 $ 43,252,000 $ 44,844,805 $ 1,592,805 $ Sales and use taxes 48,338,803 46,410,418 47,088,618 678,200 Other taxes 2,566,345 2,760,000 2,744,184 (15,816) Franchise fees 3,276,284 2,870,439 2,685,573 (184,866) Licenses and permits 8,293,681 8,593,681 9,780,390 1,186,709 Fines and forfeitures 85,100 85,100 71,312 (13,788) Intergovernmental 499,640 499,640 1,246,109 746,469 Charges for services 7,183,660 7,283,660 7,657,756 374,096 Investment income (loss) 250,000 2,420,000 5,736,405 3,316,405 Rents and leases 1,258,522 1,258,522 1,308,803 50,281 Miscellaneous 1,790,476 2,040,476 2,291,210 250,734 Total revenues 115,726,850 117,473,936 125,455,165 7,981,229 EXPENDITURES :

Current:

General government:

City council 559,128 559,128 503,181 55,947 City clerk 683,460 685,109 435,016 250,093 City manager 7,520,532 9,263,118 7,645,640 1,617,478 Finance 3,427,215 3,546,521 2,988,614 557,907 City attorney 816,397 816,397 955,943 (139,546) Development services 5,933,772 6,986,807 5,499,460 1,487,347 Facilities 8,041,298 7,497,659
6,779,826 717,833
Public works engineering 1,138,709 1,577,791 1,077,643 500,148 Public safety:

Police 39,134,460 39,298,310 36,492,269 2,806,041 Fire 21,397,850 21,786,765 21,207,623 579,142 Animal services 1,329,188 1,330,018 1,204,094 125,924 Culture and recreation:

Community services 2,469,010 2,641,906 2,174,031 467,875 Parks 7,038,129 7,837,808 6,756,358 1,081,450 Highway and streets:

Electrical and streets 5,820,411 5,900,313 5,405,089 495,224 Library 3,596,220 3,929,254 3,410,455 518,799 Capital outlay 4,579,484 11,671,681 7,893,014 3,778,667 Debt service:

Principal 154,364 154,364 1,195,665 (1,041,301) Interest and fiscal charges 2,259,458 2,563,826 537,662 2,026,164 Total expenditures 115,899,085 128,046,775 112,161,583 15,885,192 REVENUES O VER (UNDER) EXPENDITURES (172,235) (10,572,839) 13,293,582 23,866,421 Budgeted Amounts

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Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
OTHER FINANCING SOURCES (USES):

Inception of lease liability - - 2,098,978 2,098,978 Transfers in 2,506,621 2,506,621 2,760,231 253,610 Transfers out (11,642,556) (22,166,495) (14,995,869) 7,170,626 Total other financing sources (uses) (9,135,935) (19,659,874) (10,136,660) 9,523,214 Net change in fund balance (9,308,170)$ (30,232,713)$ 3,156,922 33,389,635$ FUND BALANCE:

Beginning of year 111,176,689
End of year 114,333,611$
Budgeted Amounts

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Required Supplementary Information (Unaudited) (Continued) Budgetary Comparison Schedules – Governmental Grants Special Revenue Fund For the Year Ended June 30, 2025

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Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Intergovernmental - $ 19,497,788$ 9,266,326 $ (10,231,462) $ Investment income - - 34,021 34,021 Total revenues - 19,497,788 9,300,347 (10,197,441) EXPENDITURES:

Current:

General government - 10,529,904 5,849,237 4,680,667 Public safety - 838,290 300,882 537,408 Library - (185,592) 1,997,000 (2,182,592) Capital outlay - 8,124,940 1,991,780 6,133,160 Total expenditures - 19,307,542 10,138,899 9,168,643 REVENUES OVER (UNDER) EXPENDITURES - 190,246 (838,552) (1,028,798) OTHER FINANCING SOURCES (USES):

Transfers in - - 14,448 14,448 Transfers out - - (66,702) (66,702) Total other financing sources (uses) - - (52,254) (52,254) Net change in fund balance -$ 190,246$ (890,806) (1,081,052) $ FUND BALANCE (DEFICIT):

Beginning of year 18,540
End of year (872,266)$
Budgeted Amounts

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Required Supplementary Information (Unaudited) (Continued) Schedule of Changes in the Net Pension Liability and Related Ratios For the Year Ended June 30, 2025

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Measurement period, year ended 6/30/2024 6/30/2023 6/30/2022 6/30/2021 6/30/2020 T otal pension liability
S ervice cost 4,349,924 $ 4,056,901 $ 3,969,259 $ 3,525,116 $ 3,365,376 $ Interest on total pension liability 13,866,080 13,369,640 12,856,892 12,569,714 12,119,433 Differences between expected and actual
experience 1,135,936 970,748 (1,568,849) 247,796 270,034 Changes in assumptions - - 5,704,014 - - Changes in benefit t erms - 330,342 - - - Benefit payments, including refunds
of employee contributions (11,745,669) (11,282,718) (10,197,185) (9,643,784) (9,385,911) Net change in total pension liability 7,606,271 7,444,913 10,764,131 6,698,842 6,368,932 T otal pension liability - beginning 203,519,621 196,074,708 185,310,577 178,611,735 172,242,803 T otal pension liability - ending (a) 211,125,892$ 203,519,621 $ 196,074,708 $ 185,310,577 $ 178,611,735 $ Plan fiduciary net position
Contributions - employer 6,961,999 6,626,543 6,083,423 5,653,857 5,163,971 Contributions - employee 2,205,700 1,726,746 1,630,007 1,628,531 1,617,023 Investment income (net of
administrative expenses) 14,197,699 8,817,845 (11,815,363) 29,305,630 6,312,755 Benefit payments (11,745,669) (11,282,718) (10,197,185) (9,643,784) (9,385,911) Plan to plan resources - - - - - Other (120,800) (104,916) (97,846) (130,119) (178,655) Net change in plan fiduciary net position 11,498,929 5,783,500 (14,396,964) 26,814,115 3,529,183
Plan fiduciary ne t position - beginning 148,457,542 142,674,042 157,071,006 130,256,891 126,727,708 Plan fiduciary net position - ending (b) 159,956,471$ 148,457,542 $ 142,674,042 $ 157,071,006 $ 130,256,891 $ Net pension liability - ending (a)-(b) 51,169,421$ 55,062,079$ 53,400,666$ 28,239,571$ 48,354,844$ Plan fiduciary net position as a
percentage of the total pension liability 75.76% 72.95% 72.77% 84.76% 72.93% Covered payroll 25,693,585$ 23,518,264$ 23,036,909$ 22,757,364$ 21,408,242$ Net pension liability as a percentage of
covered payroll 199.15% 234.12% 231.80% 124.09% 225.87% Miscellaneous Plan

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Measurement period, year ended 6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015 Total pension liability
Service cost 3,334,799$ 3,368,018$ 3,278,844$ 2,780,753$ 2,735,046$ Interest on total pension liability 11,680,277 11,240,326 10,868,639 10,539,757 10,224,502 Differences between expected and actual
experience 419,589 529,928 285,453 (1,148,342) 334,519 Changes in assumptions - (874,625) 8,600,283 - (2,403,446) Changes in benefit terms - - - - - Benefit payments, including refunds
of employee contributions (8,930,778) (8,785,537) (8,512,367) (7,929,573) (7,496,594) Net change in total pension liability 6,503,887 5,478,110 14,520,852 4,242,595 3,394,027 Total pension liability - beginning 165,738,916 160,260,806 145,739,954 141,497,359 138,103,332 Total pension liability - ending (a) 172,242,803$ 165,738,916$ 160,260,806$ 145,739,954$ 141,497,359$ Plan fiduciary net position
Contributions - employer 4,543,195 3,856,431$ 3,706,235$ 3,297,550$ 2,749,274$ Contributions - employee 1,587,404 1,444,993 1,461,526 1,324,766 1,219,187 Investment income (net of
administrative expenses) 7,923,614 9,732,163 11,870,046 602,969 2,473,614 Benefit payments (8,930,778) (8,785,537) (8,512,367) (7,929,573) (7,496,594) Plan to plan resources 283 (343,451) - - - Other (86,841) (180,708) (158,865) (67,266) (121,971) Net change in plan fiduciary net position 5,036,877 5,723,891 8,366,575 (2,771,554) (1,176,490) Plan fiduciary net position - beginning 121,690,831 115,966,940 107,600,365 110,371,919 111,548,409 Plan fiduciary net position - ending (b) 126,727,708$ 121,690,831$ 115,966,940$ 107,600,365$ 110,371,919$ Net pension liability - ending (a)-(b) 45,515,095$ 44,048,085$ 44,293,866$ 38,139,589$ 31,125,440$ Plan fiduciary net position as a
percentage of the total pension liability 73.58% 73.42% 72.36% 73.83% 78.00% Covered payroll 20,763,335$ 20,950,595$ 19,905,560$ 18,459,592$ 17,893,660$ Net pension liability as a percentage of
covered payroll 219.21% 210.25% 222.52% 206.61% 173.95% Miscellaneous Plan (Continued)
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City of Redlands
Required Supplementary Information (Unaudited) (Continued) Schedule of the City’s Proportionate Share of the Net Pension Liability and Related Ratios For the Year Ended June 30, 2025

135

M easurement period, year ended 6/30/2024 6/30/2023 6/30/2022 6/30/2021 6/30/2020 Plan's proportion of the
net pension liability (asset) 1. 472873% 1.453577% 1.475939% 1.660061% 0.809500% Plan's proportionate share of
the net pension liability (asset) 107,384,748$ 108,653,947 $ 101,420,265 $ 58,259,612 $ 88,080,547 $ Plan's covered payroll 19,030,681 $ 18,476,389 $ 17,938,242 $ 17,415,769 $ 17,522,750 $ Plan's proportionate share of
the net pension liability as a percentage
of covered-employee payroll 564.27% 588.07% 565.39% 334.52% 502.66% Plan's fiduciary net position 242,343,956 $ 230,662,382 $ 223,139,182 $ 244,268,089 $ 200,216,677 $ Plan's fiduciary net position as a percentage
of the total pension liability 69.29% 67.98% 68.75% 80.74% 69.45% Plan's proportionate share of aggregate
employer contributions 11,753,041 $ 11,063,552 $ 10,344,274 $ 9,582,627 $ 8,703,374 $ M easurement period, year ended 6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015 Plan's proportion of the
net pension liability (asset) 0. 790200% 0.779400% 0.746000% 0.748700% 0.737700% Plan's proportionate share of
the net pension liability (asset) 80, 975,102$ 75,109,650 $ 73,979,298 $ 64,784,346 $ 50,633,826 $ Plan's covered payroll 17,236,908 $ 14,894,900 $ 14,827,015 $ 14,604,289 $ 14,342,189 $ Plan's proportionate share of
the net pension liability as a percentage
of covered-employee payroll 469.78% 504.26% 498.95% 443.60% 353.04% Plan's fiduciary net position 195,371,697 $ 188,434,296 $ 182,071,554 $ 172,261,918 $ 178,611,604 $ Plan's fiduciary net position as a percentage
of the total pension liability 70.70% 71.50% 71.11% 72.67% 77.91% Plan's proportionate share of aggregate
employer contributions 7,448,780 $ 6,211,050 $ 5,886,486 $ 5,126,655 $ 4,246,980 $ Safety Plan

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City of Redlands
Required Supplementary Information (Unaudited) (Continued) Schedule of Contributions – Pension
For the Year Ended June 30, 2025

136

Fiscal Year: 2024-25 2023-24 2022-23 2021-22 2020-21
Contractually determined contribution (actuarially determined) 7,821,305$ 6,961,999 $ 6,627,610 $ 6,077,846 $ 5,676,210 $ Contributions in relation to the actuarially determined contributions (7,821,305) (6,961,999) (6,627,610) (6,077,846) (5,676,210) Contribution deficiency (excess) -$ -$ -$ -$ -$ Covered payroll 26,464,393 $ 25,693,585 $ 23,518,264 $ 23,036,909 $ 22,757,364 $ Contributions as a percentage of covered payroll 29.55% 27.10% 28.18% 26.38% 24.94% Fiscal Year: 2019-20 2018-19 2017-18 2016-17 2015-16
Contractually determined contribution (actuarially determined) 5,159,972$ 4,472,807 $ 3,797,781 $ 3,705,781 $ 3,297,550 $ Contributions in relation to the actuarially determined contributions (5,159,972) (4,472,807) (3,797,781) (3,705,781) (3,297,550) Contribution deficiency (excess) -$ - $ - $ - $ - $ Covered payroll 21,408,242 $ 20,763,335 $ 20,950,595 $ 19,905,560 $ 18,459,592 $ Contributions as a percentage of covered payroll 22.80% 20.22% 19.15% 18.35% 17.40% Notes to Schedule:

Methods and assumptions used to determine contribution rates for the fiscal year ended June 30, 2025:

Actuarial cost method Entry Age Actuarial Cost M ethod
Amortization method/period Level percentag e of payroll Asset valuation method Fair Market Value
Inflation 2.30%
Salary increases Varies by entry age and service
Payroll growth 2.80%
Investment rate of return 6.80% net of pension plan investment and administrative expenses.

Retirement age
Morta l i ty
Miscellaneous Plan
The actuarial methods and assumption used to set the actuarially determined contributions for Fiscal Year 2025 were derived from the June 30, 2022 funding valuation report.

The probabilities of retirement are based on the 2021 CalPERS Experience Study for the period from 2000 and 2019.

The probabilities of mortality are based on the 2021 experience study report. The mortality table was developed based on CalPERS-specific data. The rates incorporate Generational Mortality to capture ongoing mortality improvement using 80% of Scale MP 2020 published by the Society of Actuaries.

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City of Redlands
Required Supplementary Information (Unaudited) (Continued) Schedule of Contributions – Pension (Continued)
For the Year Ended June 30, 2025

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Fiscal Year: 2023-24 2022-23 2021-22 2020-21 2019-20
Contractually determined contribution (actuarially determined) 13,195,999$ 11,753,041 $ 11,063,552 $ 10,344,274 $ 9,582,627 $ Contributions in relation to the actuarially determined contributions (13,195,999) (11,753,041) (11,063,552) (10,344,274) (9,582,627) Contribution deficiency (excess) -$ - $ - $ - $ - $ Covered payroll 19,601,601 $ 19,030,681 $ 18,476,389 $ 17,938,242 $ 17,415,769 $ Contributions as a percentage of covered payroll 67.32% 61.76% 59.88% 57.67% 55.02% Fiscal Year: 2019-20 2018-19 2017-18 2016-17 2015-16
Contractually determined contribution (actuarially determined) 8,703,374$ 7,448,780 $ 6,211,050 $ 5,886,486 $ 5,126,655 $ Contributions in relation to the actuarially determined contributions (8,703,374) (7,448,780) (6,211,050) (5,886,486) (5,126,655) Contribution deficiency (excess) -$ - $ - $ - $ - $ Covered payroll 17,522,750 $ 17,236,908 $ 14,894,900 $ 14,827,015 $ 14,604,289 $ Contributions as a percentage of covered payroll 49.67% 43.21% 41.70% 39.70% 35.10% Notes to Schedule:

Methods and assumptions used to determine contribution rates for the fiscal year ended June 30, 2025:

Actuarial cost method Entry Age Actuarial Cost Method
Amortization method/period Level percentage of payroll
Asset valuation method Fair Market Value
Inflation 2.30%
Salary increases Varies by entry age and service
Payroll growth 2.80%
Investment rate of return 6.80% net of pension plan investment and administrative expenses.

Retirement age
Mortality
The probabilities of retirement are based on the 2021 CalPERS Experience Study for the period from 2000 and 2019.

The probabilities of mortality are based on the 2021 experience study report. Th e mortality table was developed based on CalPERS-specific data. The rates incorporate Generational Mortality to capture ongoing mortality improvement using 80% of Scale MP 2020 published by the Society of Actuaries.

Safety Plan
The actuarial methods and assumption used to set the actuarially determined contributions for Fiscal Year 2025 were derived from the June 30, 2022 funding valuation report.

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City of Redlands
Required Supplementary Information (Unaudited) (Continued) Schedule of Changes in Total OPEB Liability and Related Ratios For the Year Ended June 30, 2025

138

M easurement period, year ending: 6/30/2024 6/30/2023 6/30/2022 6/30/2021 6/30/2020 6/30/2019 6/30/2018 6/30/2017 1 Total OPE B liab ility
Service cost 3,653,758$ 3,676,645$ 6,288,802$ 4,405,809$ 4,371,866$ 4,540,301$ 4,647,747$ 4,517,859$ Interest 5,399,024 6,072,016 4,504,364 3,775,999 4,254,153 4,744,702 4,497,267 4,351,611 Changes of benefit terms - 4,078,580 - - - - - - Differences between expected and actual experience 7,355,613 (26,395,453) (9,975,595) 3,545,600 139,016 4,588,088 - - Changes of assumptions 356,830 (100,889) (50,693,723) 42,967,302 14,314,382 (4,153,914) (2,485,196) - Benefit payments, including refunds
of member contributions (5,697,981) (4,397,783) (5,079,505) (4,960,733) (4,882,065) (4,526,765) (4,525,686) (4,050,613) Net change in total OPE B liability 11,067,244 (17,066,884) (54,955,657) 49,733,977 18,197,352 5,192,412 2,134,132 4,818,857 Total OPE B liability - beginnin g 129,893,381 146,960,265 201,915,922 152,181,945 133,984,593 128,792,181 126,658,049 121,839,192 Total OPE B liability - ending (a) 140,960,625$ 129,893,381 $ 146,960,265 $ 201,915,922 $ 152,181,945 $ 133,984,593 $ 128,792,181 $ 126,658,049 $ OPE B fiduciary net position
2 Contributions - employe r 5,697,981$ 4,397,783 $ 5,079,505$ 4,960,733$ 4,882,065$ 4,526,765$ 4,525,686$ 4,050,613$ Net investment income - - - - - - - - Benefit payments, including refunds
of member contributions (5,697,981) (4,397,783) (5,079,505) (4,960,733) (4,882,065) (4,526,765) (4,525,686) (4,050,613) Administrative expense - - - - - - - - Net change in plan fiduciary net position - - - - - - - - Plan fiduciary net position - be ginnin g - - - - - - - - Plan fiduciary net position - endin g (b) -$ - $ - $ - $ - $ -$ -$ -$ Plan net OPEB liabilit y - ending (a) - (b) 140,960,625$ 129,893,381 $ 146,960,265 $ 201,915,922 $ 152,181,945 $ 133,984,593 $ 128,792,181 $ 126,658,049 $ Plan fiduciary net position as a
percentage of the total OPE B liab ility 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Covered-employee payroll 51,352,870$ 44,914,460 $ 35,920,063 $ 34,958,699 $ 35,722,602 $ 33,975,526 $ 31,410,072 $ 32,062,170 $ Plan net OPE B liab ility as a
percentage of covered-employee payroll 274.49% 289.20% 409.13% 577.58% 426.01% 394.36% 410.03% 395.04% 1 Information only presented from the implementation year 2 The City has no assets accumulated in a trust that meets the requirements of GASB. Therefore no OPEB fiduciary net position balance is noted.

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SUPPLEMENTARY INFORMATION
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Special Revenue Funds:

Emergency Service Fund - This fund is used to account for the collection of a special property tax to be spent on paramedic services.

Household Hazardous Waste Fund - This fund is used to account for revenue collected and expenditures made to properly dispose of household hazardous waste.

State Gas Tax Fund - This fund is used to account for the receipt and subsequent expenditure of the City’s share of the State levied tax on gasoline and other vehicle fuels.

Air Quality Improvement Fund - To account for the collection and subsequent expenditure of AB2766 (District Fees to Implement the California Clean Air Act) monies to be used for pollution reduction.

Traffic Safety Fund - This fund is used to account for the receipt of traffic fines for moving violations within the City limits.

Measure I Fund - This fund is used to account for “new” revenues resulting from a voter-approved renewal of a half -
cent retail transaction and use tax, to be used for transportation improvements and traffic management programs.

Open Space Fund - This fund is used to account for receipt and subsequent expenditure of developer fees collected to acquire open space land in and around the City.

Downtown Redlands Business Area Fund - This fund is used to account for various activities and special events with the intent of attracting business to the downtown area.

Parking Authority Fund - This fund is used to account for receipt and subsequent expenditure of fees collected as a result of a city-wide authority formed to control parking.

Asset Forfeiture Fund - This fund is used to account for receipt and subsequent expenditure of various asset seizure monies.

Supplemental Law Enforcement Fund - To account for receipt and subsequent expenditure of AB1913 monies, which, pursuant to the Citizens’ Option for Public Safety (COPS) Program, must be spent for supplemental law enforcement services.

Park & Open Space Fund - This fund is used to account for the collection and subsequent expenditure of developer fees levied for the purpose of acquiring and developing land for parks and open space.

Arterial Street Construction Fund - To account for the collection and related expenditure of development impact fees designated for arterial street construction projects.

Traffic Signals Fund - This fund is used to account for the collection and related expenditure of development impact fees designated for traffic signal construction projects.

Freeway Interchanges Fund - This fund is used to account for the collection and related expenditure of development impact fees designated for freeway interchange construction projects.

Non-Major Governmental Funds
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Special Revenue Funds (Continued):

Street Lighting District #1 Fund - This fund is used to account for the maintenance, operation, and service of street lighting facilities financed by assessments collected from landowners within the district.

CFD 2004-1 Assessments Fund - This fund is used to account for the maintenance of landscaping in public right- ofway and easements surrounding tracts within the district.

Landscape Maintenance District Fund - This fund is used to account for assessments collected from landowners to maintain landscaping in parkways and common areas within the district.

Local Transportation Fund - This fund is used to account for the receipt and expenditure of street improvement and road construction funds from various sources includin
g projects financed by State grant activity.

Pavement Accelerated Repair Implementation Strategy (PARIS) Fund - This fund is used to account for the expenditures of the Pavement Accelerated Repair Implementation Strategy (PARIS) program.

Public Art Fund - This fund is used to account for donations and subsequent expenditure on public art installations.

Transportation Development Act Fund - This fund is used to account for the receipt and expenditure of Transportation Development Act revenue received by the City.

Public Facilities Development Special Revenue Fund - This fund accounts for the collection and related expenditure of development impact fees restricted for constructing new and upgrading existing public facilities.

Storm Drain Construction Fund - This fund is used to account for receipt and subsequent expenditure of developer fees assessed to provide additional storm drains, as required.

Capital Projects Funds:

Safety Hall Replacement Fund - This fund accounts for the collection and related expenditure of development impact fees restricted for constructing new and upgrading existing public facilities.

Debt Service Funds:

General Debt Service Fund - This fund is used to account for the receipt of property taxes to be used for the retirement of the 2007 Pension Obligation Bonds.

Permanent Funds:

Simonds Endowment Fund - This fund is used to account for the monies endowed by Priscilla Alden Simonds to the City for the Simonds Parkway.

Pauline Stancliff Memorial Trust Fund - This fund is used to account for the monies gifted by Pauline Stancliff to the City for benefit of the Joslyn Senior Center.

Non-Major Governmental Funds (Continued)
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Household
Emergency Hazardous State Air Quality Traffic
Service Waste Gas Tax Improvement Safety
Fund Fund Fund Fund Fund
ASSETS
Cash and investments 256,434$ 331,074$ -$ 415,229$ -$ Restricted cash and investments - - - - - Accounts receivable, net - 13,686 - - - Taxes receivable 15,623 - 525,843 - - Due from other governments - - - 25,304 18,727 Prepaid items - - - - - Total assets 272,057$ 344,760$ 525,843$ 440,533$ 18,727$

LIABILITIES, DEFERRED

INFLOWS OF RESOURCES,

AND FUND BALANCES
Liabilities:

Accounts payable 38,042$ -$ -$ -$ 2,673$ Accrued payroll 234,015 - - - - Deposits payable - - - - - Unearned revenues - - - - - Due to other funds - - - - - Total liabilities 272,057 - - - 2,673 Deferred inflows of resources:

Unavailable revenue - - - 25,304 - Total deferred inflows
of resources - - - 25,304 - Fund Balances:

Nonspendable - - - - - Restricted - 344,760 525,843 415,229 16,054 Assigned - - - - - Unassigned (deficit) - - - - - Total fund balances - 344,760 525,843 415,229 16,054 Total liabilities, deferred
inflows of resources,
and fund balances 272,057$ 344,760$ 525,843$ 440,533$ 18,727$ (Continued)
City of Redlands
Special Revenue Funds
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2025
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Downtown
Redlands Parking Asset
Measure I Open Space Business Area Authority Forfeiture Fund Fund Fund Fund Fund
ASSETS
Cash and investments -$ 2,834,194$ 10,648$ 14,890$ 1,968,218$ Restricted cash and investments - - - - - Accounts receivable, net - - - 280 - Taxes receivable 335,856 - - - - Due from other governments - - - - 1,976 Prepaid items - - - - - Total assets 335,856$ 2,834,194$ 10,648$ 15,170$ 1,970,194$

LIABILITIES, DEFERRED

INFLOWS OF RESOURCES,

AND FUND BALANCES
Liabilities:

Accounts payable -$ -$ 10,648$ 1,774$ 95,122$ Accrued payroll - - - - - Deposits payable - - - 13,116 10,822 Unearned revenues - - - 280 - Due to other funds - - - - - Total liabilities - - 10,648 15,170 105,944 Deferred inflows of resources:

Unavailable revenue 172,744 - - - - Total deferred inflows
of resources 172,744 - - - - Fund Balances:

Nonspendable - - - - - Restricted 163,112 2,834,194 - - 1,864,250 Assigned - - - - - Unassigned (deficit) - - - - - Total fund balances 163,112 2,834,194 - - 1,864,250 Total liabilities, deferred
inflows of resources,
and fund balances 335,856$ 2,834,194$ 10,648$ 15,170$ 1,970,194$ (Continued)
City of Redlands
Combining Balance Sheet (Continued)
Special Revenue Funds
Non-Major Governmental Funds
June 30, 2025
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Supplemental
Law Enforcement Park and Arterial Street Traffic Freeway Grant Open Space Construction Signals Interchanges
Fund Fund Fund Fund Fund
ASSETS
Cash and investments 633,387$ 3,111,310$ 5,472,417$ 1,189,954$ 2,464,825$ Restricted cash and investments - - - - - Accounts receivable, net - - - - 14,274 Taxes receivable - - - - - Due from other governments - - - - - Prepaid items 65,997 - - - - Total assets 699,384$ 3,111,310$ 5,472,417$ 1,189,954$ 2,479,099$

LIABILITIES, DEFERRED

INFLOWS OF RESOURCES,

AND FUND BALANCES
Liabilities:

Accounts payable -$ -$ 1,044$ -$ -$ Accrued payroll - - - - - Deposits payable - - 28,554 368,482 - Unearned revenues 549,551 - - - 14,274 Due to other funds - - - - - Total liabilities 549,551 - 29,598 368,482 14,274 Deferred inflows of resources:

Unavailable revenue - - - - - Total deferred inflows
of resources - - - - - Fund Balances:

Nonspendable 65,997 - - - - Restricted 83,836 3,111,310 5,442,819 821,472 2,464,825 Assigned - - - - - Unassigned (deficit) - - - - - Total fund balances 149,833 3,111,310 5,442,819 821,472 2,464,825 Total liabilities, deferred
inflows of resources,
and fund balances 699,384$ 3,111,310$ 5,472,417$ 1,189,954$ 2,479,099$ (Continued)
City of Redlands
Special Revenue Funds
Combining Balance Sheet (Continued)
Non-Major Governmental Funds
June 30, 2025
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Street Landscape
Lighting CFD 2004-1 Maintenance Local
District #1 Assessment District Transportation PARIS
Fund Fund Fund Fund Fund
ASSETS
Cash and investments 54,257$ 295,227$ 422$ 260,334$ 3,590,736$ Restricted cash and investments - - - - - Accounts receivable, net - - - - - Taxes receivable 291 7,124 246 - - Due from other governments - - - - - Prepaid items - - - - - Total assets 54,548$ 302,351$ 668$ 260,334$ 3,590,736$

LIABILITIES, DEFERRED

INFLOWS OF RESOURCES,

AND FUND BALANCES
Liabilities:

Accounts payable -$ 43,675$ 123$ -$ 333$ Accrued payroll 545 3,215 545 - 41,961 Deposits payable - 53,987 - 35,074 27,327 Unearned revenues - - - - - Due to other funds - - - - - Total liabilities 545 100,877 668 35,074 69,621 Deferred inflows of resources:

Unavailable revenue - - - - - Total deferred inflows
of resources - - - - - Fund Balances:

Nonspendable - - - - - Restricted 54,003 201,474 - 225,260 3,521,115 Assigned - - - - - Unassigned (deficit) - - - - - Total fund balances 54,003 201,474 - 225,260 3,521,115 Total liabilities, deferred
inflows of resources,
and fund balances 54,548$ 302,351$ 668$ 260,334$ 3,590,736$ (Continued)
City of Redlands
Special Revenue Funds
Combining Balance Sheet (Continued)
Non-Major Governmental Funds
June 30, 2025
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Capital Projects
Funds
Transportation Public Facilities Safety Hall
Development Development Storm Replacement
Public Art Act Special Revenue Drain Capital Projects
Fund Fund Fund Fund Fund
ASSETS
Cash and investments 10,335 $ - $ 2,545,043$ 3,063,594 $ 3,150,401 $ Restricted cash and investments - - - - - Accounts receivable, net - - - - - Taxes receivable - - - - - Due from other governments - - - - - Prepaid items - - - - - Total assets 10,335$ - $ 2,545,043$ 3,063,594 $ 3,150,401 $

LIABILITIES, DEFERRED

INFLOWS OF RESOURCES,

AND FUND BALANCES
Liabilities:

Accounts payable - $ - $ - $ - $ 892,980$ Accrued payroll - - - - - Deposits payable - - - - - Unearned revenues - - - - - Due to other funds - 2,883 - - - Total liabilities - 2,883 - - 892,980 Deferred inflows of resources:

Unavailable revenue - - - - - Total deferred inflows
of resources - - - - - Fund Balances:

Nonspendable - - - - - Restricted 10,335 - 2,545,043 3,063,594 - Assigned - - - - 2,257,421 Unassigned (deficit) - (2,883) - - - Total fund balances 10,335 (2,883) 2,545,043 3,063,594 2,257,421 Total liabilities, deferred
inflows of resources,
and fund balances 10,335$ -$ 2,545,043$ 3,063,594$ 3,150,401$ (Continued)
Non-Major Governmental Funds
June 30, 2025
Special Revenue Funds
Combining Balance Sheet (Continued)
City of Redlands
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Debt Service
Funds
Pauline Total
General Simonds Stancliff Non-Major
Debt Service Endowment Memorial Governmental
Fund Fund Trust Fund Funds
ASSETS
Cash and investments 353,093$ 41,133$ 24,312$ 32,091,467$ Restricted cash and investments 284,866 - - 284,866 Accounts receivable, net - - - 28,240 Taxes receivable - - - 884,983 Due from other governments - - - 46,007 Prepaid items - - - 65,997 Total assets 637,959$ 41,133$ 24,312$ 33,401,560$

LIABILITIES, DEFERRED

INFLOWS OF RESOURCES,

AND FUND BALANCES
Liabilities:

Accounts payable -$ -$ -$ 1,086,414$ Accrued payroll - - - 280,281 Deposits payable - - - 537,362 Unearned revenues - - - 564,105 Due to other funds - - - 2,883 Total liabilities - - - 2,471,045 Deferred inflows of resources:

Unavailable revenue - - - 198,048 Total deferred inflows
of resources - - - 198,048 Fund Balances:

Nonspendable - 10,000 20,200 96,197 Restricted 637,959 31,133 4,112 28,381,732 Assigned - -
- 2,257,421
Unassigned (deficit) - - - (2,883) Total fund balances 637,959 41,133 24,312 30,732,467 Total liabilities, deferred
inflows of resources,
and fund balances 637,959$ 41,133$ 24,312$ 33,401,560$ (Concluded)
June 30, 2025
Non-Major Governmental Funds
Permanent Funds
Combining Balance Sheet (Continued)
City of Redlands
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Household
Emergency Hazardous State Air Quality Traffic
Service Waste Gas Tax Improvement Safety
Fund Fund Fund Fund Fund
REVENUES:

Property taxes 1,146,202$ -$ -$ -$ -$ Licenses and permits - - - - - Fines and forfeitures - - - - 148,599 Intergovernmental - - 4,044,395 95,808 - Charges for services - 165,321 - - - Investment income (loss) - - - 15,228 - Rents and leases - - - - - Miscellaneous 100 - - - - Total revenues 1,146,302 165,321 4,044,395 111,036 148,599 EXPENDITURES:

Current:

General government - - - - - Public safety 5,846,640 152,075 - - - Culture and recreation - - - - - Highway and streets - - - 102 - Capital outlay - - - - - Debt service:

Principal - - - - - Interest and fiscal charges - - - - -
Total expenditures 5,846,640 152,075 - 102 -

REVENUES OVER
(UNDER) EXPENDITURES (4,700,338) 13,246 4,044,395 110,934 148,599 OTHER FINANCING SOURCES (USES):

Transfers in 4,700,338 - - - 23,020 Transfers out - - (4,018,187) - (170,307) Total other financing sources (uses) 4,700,338 - (4,018,187) - (147,287) NET CHANGES IN FUND BALANCES - 13,246 26,208 110,934 1,312 FUND BALANCES (DEFICIT):

Beginning of year - 331,514 499,635 304,295 14,742 End of year -$ 344,760$ 525,843$ 415,229$ 16,054$ (Continued)
Special Revenue Funds
City of Redlands
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Non-Major Governmental Funds
For the Year Ended June 30, 2025
149
Redlands Regular Meeting of 02-17-26
384 of 976
Downtown
Redlands Parking Asset
Measure I Open Space Business Area Authority Forfeiture Fund Fund Fund Fund Fund
REVENUES:

Property taxes -$ -$ -$ -$ -$ Licenses and permits - - - - - Fines and forfeitures - - - - 12,248 Intergovernmental 1,729,439 - - - - Charges for services - 145,810 4,322 - - Investment income (loss) 118,647 123,091 (2,380) - 59,569 Rents and leases - - - 3,360 - Miscellaneous - - 26,070 - 26,394 Total revenues 1,848,086 268,901 28,012 3,360 98,211 EXPENDITURES:

Current:

General government - - 58,406 23,786 - Public safety - - - - 77,565 Culture and recreation - 2,916 - - - Highway and streets 8,197 - - - - Capital outlay - - - - 58,124 Debt service:

Principal - - - - - Interest and fiscal charges - - - - -
Total expenditures 8,197 2,916 58,406 23,786 135,689

REVENUES OVER
(UNDER) EXPENDITURES 1,839,889 265,985 (30,394) (20,426) (37,478) OTHER FINANCING SOURCES (USES):

Transfers in - - 30,394 20,426 - Transfers out (2,152,068) - - - - Total other financing sources (uses) (2,152,068) - 30,394 20,426 - NET CHANGES IN FUND BALANCES (312,179) 265,985 - - (37,478) FUND BALANCES (DEFICIT):

Beginning of year 475,291 2,568,209 - - 1,901,728 End of year 163,112$ 2,834,194$ -$ -$ 1,864,250$ (Continued)
Non-Major Governmental Funds
For the Year Ended June 30, 2025
Special Revenue Funds
City of Redlands
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) 150
Redlands Regular Meeting of 02-17-26
385 of 976
Supplemental
Law Enforcement Park and Arterial Street Traffic Freeway Grant Open Space Construction Signals Interchanges
Fund Fund Fund Fund Fund
REVENUES:

Property taxes - $ - $ - $ - $ - $ Licenses and permits - - - - - Fines and forfeitures - - - - - Intergovernmental 240,061 - - - - Charges for services - 448,667 297,857 18,146 175,584 Investment income (loss) 31,919 128,035 239,055 53,259 106,423 Rents and leases - - - - - Miscellaneous - - - - 60,515 Total revenues 271,980 576,702 536,912 71,405 342,522 EXPENDITURES:

Current:

General government - - - - - Public safety 240,062 - - - - Culture and recreation - 12,237 - - - Highway and streets - - 6,863 3,238 19,239 Capital outlay - - 71,666 - 99,155 Debt service:

Principal - 68,988 - - - Interest and fiscal charges - 33,172 - - -

Total expenditures 240,062 114,397 78,529 3,238 118,394

REVENUES OVER
(UNDER) EXPENDITURES 31,918 462,305 458,383 68,167 224,128 OTHER FINANCING SOURCES (USES):

Transfers in - - - - - Transfers out - - - - - Total other financing sources (uses) - - - - - NET CHANGES IN FUND BALANCES 31,918 462,305 458,383 68,167 224,128 FUND BALANCES (DEFICIT):

Beginning of year 117,915 2,649,005 4,984,436 753,305 2,240,697 End of year 149,833$ 3,111,310$ 5,442,819$ 821,472$ 2,464,825$ (Continued)
City of Redlands
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Non-Major Governmental Funds
For the Year Ended June 30, 2025
Special Revenue Funds
151
Redlands Regular Meeting of 02-17-26
386 of 976
Street Landscape
Lighting CFD 2004-1 Maintenance Local
District #1 Assessment District Transportation PARIS
Fund Fund Fund Fund Fund
REVENUES:

Property taxes -$ -$ -$ -$ -$ Licenses and permits - - - 9,910 - Fines and forfeitures - - - - - Intergovernmental - - - - - Charges for services 25,305 734,274 28,674 - - Investment income (loss) - 10,706 - 11,317 (37,848) Rents and leases - - - - - Miscellaneous - - - - 694,166 Total revenues 25,305 744,980 28,674 21,227 656,318 EXPENDITURES:

Current:

General government - 479,390 51,929 - - Public safety - - - - - Culture and recreation - - - - - Highway and streets 12,898 - - - 1,104,354 Capital outlay - - - - 4,735,218 Debt service:

Principal - - - - - Interest and fiscal charges - - - - -
Total expenditures 12,898 479,390 51,929 - 5,839,572

REVENUES OVER
(UNDER) EXPENDITURES 12,407 265,590 (23,255) 21,227 (5,183,254) OTHER FINANCING SOURCES (USES):

Transfers in - - 23,255 - 6,126,668 Transfers out - (144,400) - - - Total other financing sources (uses) - (144,400) 23,255 - 6,126,668 NET CHANGES IN FUND BALANCES 12,407 121,190 - 21,227 943,414 FUND BALANCES (DEFICIT):

Beginning of year 41,596 80,284 - 204,033 2,577,701 End of year 54,003$ 201,474$ -$ 225,260$ 3,521,115$ (Continued)
Special Revenue Funds
For the Year Ended June 30, 2025
Non-Major Governmental Funds
City of Redlands
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) 152
Redlands Regular Meeting of 02-17-26
387 of 976
Capital Projects
Funds
Transportation Public Facilities Safety Hall
Development Development Storm Replacement
Public Art Act Special Revenue Drain Capital Projects
Fund Fund Fund Fund Fund
REVENUES:

Property taxes - $ - $ - $ - $ - $ Licenses and permits - - - - - Fines and forfeitures - - - - - Intergovernmental - 55,596 - - - Charges for services - - 628,680 169,981 - Investment income (loss) 468 - - 132,090 85,109 Rents and leases - - - - - Miscellaneous - - - - - Total revenues 468 55,596 628,680 302,071 85,109 EXPENDITURES:

Current:

General government - - 12,574 3,399 1,431,447 Public safety - - - - - Culture and recreation - - - - - Highway and streets - - - - - Capital outlay - 49,315 - - 1,479,107 Debt service:

Principal - - - - - Interest and fiscal charges - -
- - -
Total expenditures - 49,315 12,574 3,399 2,910,554

REVENUES OVER
(UNDER) EXPENDITURES 468 6,281 616,106 298,672 (2,825,445) OTHER FINANCING SOURCES (USES):

Transfers in - - - - 2,905,554 Transfers out - - - - - Total other financing sources (uses) - - - - 2,905,554 NET CHANGES IN FUND BALANCES 468 6,281 616,106 298,672 80,109 FUND BALANCES (DEFICIT):

Beginning of year 9,867 (9,164) 1,928,937 2,764,922 2,177,312 End of year 10,335$ (2,883)$ 2,545,043$ 3,063,594$ 2,257,421$ (Continued)
For the Year Ended June 30, 2025
City of Redlands
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Non-Major Governmental Funds
Special Revenue Funds
153
Redlands Regular Meeting of 02-17-26
388 of 976
Debt Service
Funds
Pauline Total
General Simonds Stancliff Non-Major
Debt Service Endowment Memorial Governmental
Fund Fund Trust Fund Funds
REVENUES:

Property taxes -$ - $ - $ 1,146,202$ Licenses and permits - - - 9,910 Fines and forfeitures - - - 160,847 Intergovernmental - - - 6,165,299 Charges for services - - - 2,842,621 Investment income (loss) 16,189 1,861 1,099 1,093,837 Rents and leases - - - 3,360 Miscellaneous - - - 807,245 Total revenues 16,189 1,861 1,099 12,229,321 EXPENDITURES:

Current:

General government 5,202 - - 2,066,133 Public safety - - - 6,316,342 Culture and recreation - - - 15,153 Highway and streets - - - 1,154,891 Capital outlay - - - 6,492,585 Debt service:

Principal 200,000 - - 268,988 Interest and fiscal charges 207,455 - - 240,627 Total expenditures 412,657 - - 16,554,719

REVENUES OVER
(UNDER) EXPENDITURES (396,468) 1,861
1,099 (4,325,398)
OTHER FINANCING SOURCES (USES):

Transfers in 455,160 - - 14,284,815 Transfers out - - - (6,484,962) Total other financing sources (uses) 455,160 - - 7,799,853 NET CHANGES IN FUND BALANCES 58,692 1,861 1,099 3,474,455 FUND BALANCES (DEFICIT):

Beginning of year 579,267 39,272 23,213 27,258,012 End of year 637,959$ 41,133$ 24,312$ 30,732,467$ (Concluded)
Permanent Funds
For the Year Ended June 30, 2025
Non-Major Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) City of Redlands
154
Redlands Regular Meeting of 02-17-26
389 of 976
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Property taxes 1,100,000$ 1,100,000$ 1,146,202$ 46,202$ Miscellaneous 5,000 5,000 100 (4,900) Total revenues 1,105,000 1,105,000 1,146,302 41,302 EXPENDITURES:

Current:

Public safety 6,531,894 6,531,894 5,846,640 685,254 Total expenditures 6,531,894 6,531,894 5,846,640 685,254 REVENUES OVER (UNDER) EXPENDITURES (5,426,894) (5,426,894) (4,700,338) 726,556 OTHER FINANCING SOURCES (USES):

Transfers in 5,426,894 5,426,894 4,700,338 (726,556) Total other financing sources (uses) 5,426,894 5,426,894 4,700,338 (726,556) Net change in fund balance -$ -$ - -$ FUND BALANCE:

Beginning of year -
End of year -$
City of Redlands
Budgetary Comparison Schedule
Emergency Service Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
155
Redlands Regular Meeting of 02-17-26
390 of 976
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Charges for services 130,000$ 130,000$ 165,321$ 35,321$ Total revenues 130,000 130,000 165,321 35,321 EXPENDITURES:

Current:

Public safety 152,575 152,575 152,075 500 Total expenditures 152,575 152,575 152,075 500 REVENUES OVER (UNDER) EXPENDITURES (22,575) (22,575) 13,246 35,821 OTHER FINANCING SOURCES (USES):

Total other financing sources (uses) - - - - Net change in fund balance (22,575)$ (22,575)$ 13,246 35,821$ FUND BALANCE:

Beginning of year 331,514
End of year 344,760$
City of Redlands
Budgetary Comparison Schedule
Household Hazardous Waste Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
156
Redlands Regular Meeting of 02-17-26
391 of 976
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Intergovernmental 3,868,354$ 3,868,354$ 4,044,395$ 176,041$ Total revenues 3,868,354 3,868,354 4,044,395 176,041 OTHER FINANCING SOURCES (USES):

Transfers out (3,868,354) (3,868,354) (4,018,187) (149,833) Total other financing sources (uses) (3,868,354) (3,868,354) (4,018,187) (149,833) Net change in fund balance -$ -$ 26,208 26,208$ FUND BALANCE:

Beginning of year 499,635
End of year 525,843$
City of Redlands
Budgetary Comparison Schedule
State Gas Tax Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
157
Redlands Regular Meeting of 02-17-26
392 of 976
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Intergovernmental 92,000$ 92,000$ 95,808$ 3,808$ Investment income (loss) - - 15,228 15,228 Total revenues 92,000 92,000 111,036 19,036 EXPENDITURES:

Current:

Highway and streets 878 122,520 102 122,418 Capital outlay 146,700 196,700 - 196,700 Total expenditures 147,578 319,220 102 319,118 Net change in fund balance (55,578)$ (227,220)$ 110,934 338,154$ FUND BALANCE:

Beginning of year 304,295
End of year 415,229$
City of Redlands
Budgetary Comparison Schedule
Air Quality Improvement Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
158
Redlands Regular Meeting of 02-17-26
393 of 976
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Fines and forfeitures 127,000$ 127,000$ 148,599$ 21,599$ Total revenues 127,000 127,000 148,599 21,599 OTHER FINANCING SOURCES (USES):

Transfers in - - 23,020 23,020 Transfers out (127,000) (127,000) (170,307) (43,307) Total other financing sources (uses) (127,000) (127,000) (147,287) (20,287) Net change in fund balance -$ -$ 1,312 1,312$ FUND BALANCE:

Beginning of year 14,742
End of year 16,054$
City of Redlands
Budgetary Comparison Schedule
Traffic Safety Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
159
Redlands Regular Meeting of 02-17-26
394 of 976
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Intergovernmental 2,000,000$ 2,000,000$ 1,729,439$ (270,561)$ Investment income (loss) 200,000 200,000 118,647 (81,353) Total revenues 2,200,000 2,200,000 1,848,086 (351,914) EXPENDITURES:

Current:

Highway and streets 8,197 8,197 8,197 - Total expenditures 8,197 8,197 8,197 - REVENUES OVER (UNDER) EXPENDITURES 2,191,803 2,191,803 1,839,889 (351,914) OTHER FINANCING SOURCES (USES):

Transfers out (2,191,803) (2,191,803) (2,152,068) 39,735 Total other financing sources (uses) (2,191,803) (2,191,803) (2,152,068) 39,735 Net change in fund balance -$ -$ (312,179) (312,179)$ FUND BALANCE:

Beginning of year 475,291
End of year 163,112$
City of Redlands
Budgetary Comparison Schedule
Measure I Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
160
Redlands Regular Meeting of 02-17-26
395 of 976
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Charges for services 80,000$ 80,000$ 145,810$ 65,810$ Investment income (loss) - - 123,091 123,091 Total revenues 80,000 80,000 268,901 188,901 EXPENDITURES:

Current:

Culture and recreation 1,600 1,600 2,916 (1,316) Total expenditures 1,600 1,600 2,916 (1,316) REVENUES OVER (UNDER) EXPENDITURES 78,400 78,400 265,985 187,585 OTHER FINANCING SOURCES (USES):

Total other financing sources (uses) - - - - Net change in fund balance 78,400$ 78,400$ 265,985 187,585$ FUND BALANCE:

Beginning of year 2,568,209
End of year 2,834,194$
City of Redlands
Budgetary Comparison Schedule
Open Space Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
161
Redlands Regular Meeting of 02-17-26
396 of 976
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Charges for services 25,000$ 25,000$ 4,322$ (20,678)$ Investment income (loss) - - (2,380) (2,380) Miscellaneous - - 26,070 26,070 Total revenues 25,000 25,000 28,012 3,012 EXPENDITURES:

Current:

General government 125,294 126,094 58,406 67,688 Total expenditures 125,294 126,094 58,406 67,688 REVENUES OVER (UNDER) EXPENDITURES (100,294) (101,094) (30,394) 70,700 OTHER FINANCING SOURCES (USES):

Transfers in 100,294 100,294 30,394 (69,900) Total other financing sources (uses) 100,294 100,294 30,394 (69,900) Net change in fund balance -$ (800)$ - 800$ FUND BALANCE:

Beginning of year -
End of year -$
City of Redlands
Budgetary Comparison Schedule
Downtown Redlands Business Area Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
162
Redlands Regular Meeting of 02-17-26
397 of 976
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Rents and leases 8,000$ 8,000$ 3,360$ (4,640)$ Total revenues 8,000 8,000 3,360 (4,640) EXPENDITURES:

Current:

General government 23,496 23,496 23,786 (290) Total expenditures 23,496 23,496 23,786 (290) REVENUES OVER (UNDER) EXPENDITURES (15,496) (15,496) (20,426) (4,930) OTHER FINANCING SOURCES (USES):

Transfers in 15,496 15,496 20,426 4,930 Total other financing sources (uses) 15,496 15,496 20,426 4,930 Net change in fund balance -$ -$ - -$ FUND BALANCE:

Beginning of year -
End of year -$
City of Redlands
Budgetary Comparison Schedule
Parking Authority Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
163
Redlands Regular Meeting of 02-17-26
398 of 976
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Fines and forfeitures 217,293$ 217,293$ 12,248$ (205,045)$ Investment income (loss) 10,000 10,000 59,569 49,569 Miscellaneous - - 26,394 26,394 Total revenues 227,293 227,293 98,211 (129,082) EXPENDITURES:

Current:

Public safety 207,293 207,293 77,565 129,728 Capital outlay - - 58,124 (58,124) Total expenditures 207,293 207,293 135,689 71,604 REVENUES OVER (UNDER) EXPENDITURES 20,000 20,000 (37,478) (57,478) OTHER FINANCING SOURCES (USES):

Total other financing sources (uses) - - - - Net change in fund balance 20,000$ 20,000$ (37,478) (57,478)$ FUND BALANCE:

Beginning of year 1,901,728
End of year 1,864,250$
City of Redlands
Budgetary Comparison Schedule
Asset Forfeiture Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
164
Redlands Regular Meeting of 02-17-26
399 of 976
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Intergovernmental 260,558$ 260,558$ 240,061$ (20,497)$ Investment income (loss) 1,500 1,500 31,919 30,419 Total revenues 262,058 262,058 271,980 9,922 EXPENDITURES:

Current:

Public safety 260,558 260,558 240,062 20,496 Total expenditures 260,558 260,558 240,062 20,496 Net change in fund balance 1,500$ 1,500$ 31,918 30,418$ FUND BALANCE:

Beginning of year 117,915
End of year 149,833$
City of Redlands
Budgetary Comparison Schedule
Supplemental Law Enforcement Grant Special Revenue Fund For the Year Ended June 30, 2025
Budgeted Amounts
165
Redlands Regular Meeting of 02-17-26
400 of 976
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Charges for services 500,000$ 500,000$ 448,667$ (51,333)$ Investment income (loss) - - 128,035 128,035 Total revenues 500,000 500,000 576,702 76,702 EXPENDITURES:

Current:

Culture and recreation 13,500 13,500 12,237 1,263 Capital outlay 1,120,000 1,120,000 - 1,120,000 Debt service:

Principal 68,988 68,988 68,988 - Interest and fiscal charges 33,172 33,172 33,172 - Total expenditures 1,235,660 1,235,660 114,397 1,121,263 REVENUES OVER (UNDER) EXPENDITURES (735,660) (735,660) 462,305 1,197,965 Net change in fund balance (735,660)$ (735,660)$ 462,305 1,197,965$ FUND BALANCE:

Beginning of year 2,649,005
End of year 3,111,310$
City of Redlands
Budgetary Comparison Schedule
Park and Open Space Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
166
Redlands Regular Meeting of 02-17-26
401 of 976
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Intergovernmental 2,150,000$ 2,150,000$ -$ (2,150,000)$ Charges for services 220,000 220,000 297,857 77,857 Investment income (loss) - - 239,055 239,055 Total revenues 2,370,000 2,370,000 536,912 (1,833,088) EXPENDITURES:

Current:

Highway and streets 4,400 92,269 6,863 85,406 Capital outlay 4,300,000 4,300,000 71,666 4,228,334 Total expenditures 4,304,400 4,392,269 78,529 4,313,740 REVENUES OVER (UNDER) EXPENDITURES (1,934,400) (2,022,269) 458,383 2,480,652 Net change in fund balance (1,934,400)$ (2,022,269)$ 458,383 2,480,652$ FUND BALANCE:

Beginning of year 4,984,436
End of year 5,442,819$
City of Redlands
Budgetary Comparison Schedule
Arterial Street Construction Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
167
Redlands Regular Meeting of 02-17-26
402 of 976
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Charges for services 13,000$ 13,000$ 18,146$ 5,146$ Investment income (loss) - - 53,259 53,259 Total revenues 13,000 13,000 71,405 58,405 EXPENDITURES:

Current:

Highway and streets 260 161,930 3,238 158,692 Capital outlay 75,000 75,000 - 75,000 Total expenditures 75,260 236,930 3,238 233,692 REVENUES OVER (UNDER) EXPENDITURES (62,260) (223,930) 68,167 292,097 Net change in fund balance (62,260)$ (223,930)$ 68,167 292,097$ FUND BALANCE:

Beginning of year 753,305
End of year 821,472$
City of Redlands
Budgetary Comparison Schedule
Traffic Signals Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
168
Redlands Regular Meeting of 02-17-26
403 of 976
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Charges for services 110,000$ 110,000$ 175,584$ 65,584$ Investment income (loss) - - 106,423 106,423 Miscellaneous - - 60,515 60,515 Total revenues 110,000 110,000 342,522 232,522 EXPENDITURES:

Current:

Highway and streets 2,200 62,453 19,239 43,214 Capital outlay - 1,049,564 99,155 950,409 Total expenditures 2,200 1,112,017 118,394 993,623 REVENUES OVER (UNDER) EXPENDITURES 107,800 (1,002,017) 224,128 1,226,145 Net change in fund balance 107,800$ (1,002,017)$ 224,128 1,226,145$ FUND BALANCE:

Beginning of year 2,240,697
End of year 2,464,825$
City of Redlands
Budgetary Comparison Schedule
Freeway Interchanges Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
169
Redlands Regular Meeting of 02-17-26
404 of 976
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Charges for services 24,820$ 24,820$ 25,305$ 485$ Total revenues 24,820 24,820 25,305 485 EXPENDITURES:

Current:

Highway and streets 35,057 35,057 12,898 22,159 Total expenditures 35,057 35,057 12,898 22,159 REVENUES OVER (UNDER) EXPENDITURES (10,237) (10,237) 12,407 22,644 Net change in fund balance (10,237)$ (10,237)$ 12,407 22,644$ FUND BALANCE:

Beginning of year 41,596
End of year 54,003$
City of Redlands
Budgetary Comparison Schedule
Street Lighting District #1 Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
170
Redlands Regular Meeting of 02-17-26
405 of 976
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Charges for services 700,000$ 700,000$ 734,274$ 34,274$ Investment income (loss) - - 10,706 10,706 Total revenues 700,000 700,000 744,980 44,980 EXPENDITURES:

Current:

General government 614,697 673,621 479,390 194,231 Total expenditures 614,697 673,621 479,390 194,231 REVENUES OVER (UNDER) EXPENDITURES 85,303 26,379 265,590 239,211 OTHER FINANCING SOURCES (USES):

Transfers in 30,000 30,000 - (30,000) Transfers out (105,000) (105,000) (144,400) (39,400) Total other financing sources (uses) (75,000) (75,000) (144,400) (69,400) Net change in fund balance 10,303$ (48,621)$ 121,190 169,811$ FUND BALANCE:

Beginning of year 80,284
End of year 201,474$
City of Redlands
Budgetary Comparison Schedule
CFD 2004-1 Assessment Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
171
Redlands Regular Meeting of 02-17-26
406 of 976
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Charges for services 29,000$ 29,000$ 28,674$ (326)$ Total revenues 29,000 29,000 28,674 (326) EXPENDITURES:

Current:

General government 55,438 65,438 51,929 13,509 Total expenditures 55,438 65,438 51,929 13,509 REVENUES OVER (UNDER) EXPENDITURES (26,438) (36,438) (23,255) 13,183 OTHER FINANCING SOURCES (USES):

Transfers in 26,438 26,438 23,255 (3,183) Total other financing sources (uses) 26,438 26,438 23,255 (3,183) Net change in fund balance -$ (10,000)$ - 10,000$ FUND BALANCE:

Beginning of year -
End of year -$
City of Redlands
Budgetary Comparison Schedule
Landscape Maintenance District Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
172
Redlands Regular Meeting of 02-17-26
407 of 976
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Licenses and permits -$ -$ 9,910$ 9,910$ Investment income (loss) - - 11,317 11,317 Miscellaneous - 44,000 - (44,000) Total revenues - 44,000 21,227 (22,773) Net change in fund balance -$ 44,000$ 21,227 (22,773)$ FUND BALANCE:

Beginning of year 204,033
End of year 225,260$
City of Redlands
Budgetary Comparison Schedule
Local Transportation Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
173
Redlands Regular Meeting of 02-17-26
408 of 976
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Investment income (loss) 150,000$ 150,000$ (37,848)$ (187,848)$ Miscellaneous - 815,066 694,166 (120,900) Total revenues 150,000 965,066 656,318 (308,748) EXPENDITURES:

Current:

Highway and streets 886,133 1,031,437 1,104,354 (72,917) Capital outlay 4,540,000 6,012,485 4,735,218 1,277,267 Total expenditures 5,426,133 7,043,922 5,839,572 1,204,350 REVENUES OVER (UNDER) EXPENDITURES (5,276,133) (6,078,856) (5,183,254) 895,602 OTHER FINANCING SOURCES (USES):

Transfers in 6,227,059 6,227,059 6,126,668 (100,391) Total other financing sources (uses) 6,227,059 6,227,059 6,126,668 (100,391) Net change in fund balance 950,926$ 148,203$ 943,414 795,211$ FUND BALANCE:

Beginning of year 2,577,701
End of year 3,521,115$
City of Redlands
Budgetary Comparison Schedule
PARIS Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
174
Redlands Regular Meeting of 02-17-26
409 of 976
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Investment income (loss) -$ -$ 468$ 468$ Total revenues - - 468 468 Net change in fund balance -$ -$ 468 468$ FUND BALANCE:

Beginning of year 9,867
End of year 10,335$
City of Redlands
Budgetary Comparison Schedule
Public Art Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
175
Redlands Regular Meeting of 02-17-26
410 of 976
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Intergovernmental -$ 1,145,296$ 55,596$ (1,089,700)$ Total revenues - 1,145,296 55,596 (1,089,700) EXPENDITURES:

Highway and streets - 50,000 - 50,000 Capital outlay - 1,086,040 49,315 1,036,725 Total expenditures - 1,136,040 49,315 1,086,725 Net change in fund balance -$ 9,256$ 6,281 (2,975)$ FUND BALANCE (DEFICIT):

Beginning of year (9,164)
End of year (2,883)$
City of Redlands
Budgetary Comparison Schedule
Transportation Development Act Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
176
Redlands Regular Meeting of 02-17-26
411 of 976
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Charges for services 360,000$ 360,000$ 628,680$ 268,680$ Total revenues 360,000 360,000 628,680 268,680 EXPENDITURES:

Current:

General government 7,200 10,967 12,574 (1,607) Total expenditures 7,200 10,967 12,574 (1,607) REVENUES OVER (UNDER) EXPENDITURES 352,800 349,033 616,106 267,073 Net change in fund balance 352,800$ 349,033$ 616,106 267,073$ FUND BALANCE (DEFICIT):

Beginning of year 1,928,937
End of year 2,545,043$
City of Redlands
Budgetary Comparison Schedule
Public Facilities Development Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
177
Redlands Regular Meeting of 02-17-26
412 of 976
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Charges for services 75,000 $ 75,000 $ 169,981 $ 94,981 $ Investment income (loss) - - 132,090 132,090 Total revenues 75,000 75,000 302,071 227,071 EXPENDITURES:

Current:

General government 3,900 3,900 3,399 501 Capital outlay 70,000 70,000 - 70,000 Total expenditures 73,900 73,900 3,399 70,501 REVENUES OVER (UNDER) EXPENDITURES 1,100 1,100 298,672 297,572 Net change in fund balance 1,100$ 1,100 $ 298,672 297,572 $ FUND BALANCE:

Beginning of year 2,764,922
End of year 3,063,594$
City of Redlands
Budgetary Comparison Schedule
Storm Drain Capital Projects Fund
For the Year Ended June 30, 2025
Budgeted Amounts
178
Redlands Regular Meeting of 02-17-26
413 of 976
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Investment income (loss) -$ -$ 85,109$ 85,109$ Total revenues - - 85,109 85,109 EXPENDITURES:

Current:

General government - 4,910,335 1,431,447 3,478,888 Capital outlay - 10,771,610 1,479,107 9,292,503 Total expenditures - 15,681,945 2,910,554 12,771,391 REVENUES OVER (UNDER) EXPENDITURES - (15,681,945) (2,825,445) 12,856,500 OTHER FINANCING SOURCES (USES):

Transfers in - 3,665,921 2,905,554 (760,367) Total other financing sources (uses) - 3,665,921 2,905,554 (760,367) Net change in fund balance -$ (12,016,024)$ 80,109 12,096,133$ FUND BALANCE:

Beginning of year 2,177,312
End of year 2,257,421$
City of Redlands
Budgetary Comparison Schedule
Safety Hall Replacement Capital Projects Fund
For the Year Ended June 30, 2025
Budgeted Amounts
179
Redlands Regular Meeting of 02-17-26
414 of 976
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Property taxes 30,000$ 30,000$ -$ (30,000)$ Investment income (loss) 500 500 16,189 15,689 Total revenues 30,500 30,500 16,189 (14,311) EXPENDITURES:

Current:

General government 5,180 5,180 5,202 (22) Principal 200,000 200,000 200,000 - Interest and fiscal charges 207,455 207,455 207,455 - Total expenditures 412,635 412,635 412,657 (22) REVENUES OVER (UNDER) EXPENDITURES (382,135) (382,135) (396,468) (14,333) OTHER FINANCING SOURCES (USES):

Transfers in - - 455,160 455,160 Total other financing sources (uses) - - 455,160 455,160 Net change in fund balance (382,135)$ (382,135) $ 58,692 440,827 $ FUND BALANCE:

Beginning of year 579,267
End of year 637,959$
City of Redlands
Budgetary Comparison Schedule
General Debt Service Fund
For the Year Ended June 30, 2025
Budgeted Amounts
180
Redlands Regular Meeting of 02-17-26
415 of 976
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Investment income (loss) -$ -$ 1,861$ 1,861$ Total revenues - - 1,861 1,861 Net change in fund balance -$ -$ 1,861 1,861$ FUND BALANCE:

Beginning of year 39,272
End of year 41,133$
City of Redlands
Budgetary Comparison Schedule
Simonds Endowment Permanent Fund
For the Year Ended June 30, 2025
Budgeted Amounts
181
Redlands Regular Meeting of 02-17-26
416 of 976
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Investment income (loss) -$ -$ 1,099$ 1,099$ Total revenues - - 1,099 1,099 Net change in fund balance -$ -$ 1,099 1,099$ FUND BALANCE:

Beginning of year 23,213
End of year 24,312$
City of Redlands
Budgetary Comparison Schedule
Pauline Stancliff Memorial Trust Permanent Fund
For the Year Ended June 30, 2025
Budgeted Amounts
182
Redlands Regular Meeting of 02-17-26
417 of 976
Non-Major Enterprise Funds
Groves Fund - This fund is used to account for the farming operations of citrus groves owned by the City.

Non-Potable Water Fund - This fund is used to account for non potable water utility operations, projects, debt service costs, and impact fees of the City.

Cemetery Fund - This fund is used to account for the operations of Hillside Memorial Park Cemetery.

Aviation Fund - This fund is used to account for the operations of the Redlands Municipal Airport. 183
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Non-Potable
Groves Water Cemetery Aviation
Fund Fund Fund Fund Total
ASSETS
Current assets:

Cash and investments - $ 4,791,964$ 3,849,741 $ - $ 8,641,705$ Accounts receivable, net - 92,120 206,439 17,562 316,121 Taxes receivable - - - 1,061 1,061 Interest receivable - 28,742 23,091 - 51,833 Lease receivable - due within one year - - - 112,541 112,541 Due from other governments - 57,573 - 647,635 705,208 Prepaid items 10 - - - 10 Total current assets 10 4,970,399 4,079,271 778,799 9,828,479 Noncurrent assets:

Restricted cash and investments with fiscal agent 9,990 - - - 9,990 Lease receivable - due in more than one year - - - 390,487 390,487 Capital assets:

Non-depreciable 13,570,179 - 643,931 1,165,281 15,379,391 Depreciable, net 56,773 2,989 645,943 1,921,956 2,627,661 Total capital assets 13,626,952 2,989 1,289,874 3,087,237 18,007,052 Total noncurrent assets 13,636,942 2,989 1,289,874 3,477,724 18,407,529 Total assets 13,636,952 4,973,388 5,369,145 4,256,523 28,236,008

DEFERRED OUTFLOW OF RESOURCES
Related to OPEB - - 320,636 87,215 407,851 Related to pensions 80,187 17,639 147,766 24,857 270,449 Total deferred outflow of resources 80,187 17,639 468,402 112,072 678,300

LIABILITIES
Current liabilities:

Accounts payable 53,734 9,684 46,014 23,867 133,299 Accrued payroll 22,219 4,991 42,288 7,455 76,953 Due to other funds 262,312 - - 154,973 417,285 Deposits payable - - 1,499,645 10,768 1,510,413 Unearned revenue - - - 101,462 101,462 Compensated absences - due within one year 6,221 3,160 38,217 6,632 54,230 Long-term debt - due within one year 5,218 - 29,844 - 35,062 Total current liabilities 349,704 17,835 1,656,008 305,157 2,328,704 Noncurrent liabilities:

Advances from other funds - - 360,077 680,157 1,040,234 Compensated absences - due in more than one year 6,221 3,160 38,217 6,631 54,229 Long term debt - due in more than one year - - 67,829 - 67,829 Total OPEB liability - - 1,052,818 251,385 1,304,203 Net pension liability 364,780 80,241 672,203 113,077 1,230,301 Total noncurrent liabilities 371,001 83,401 2,191,144 1,051,250 3,696,796 Total liabilities 720,705 101,236 3,847,152 1,356,407 6,025,500

DEFERRED INFLOWS OF RESOURCES
Related to leases - - - 487,449 487,449 Related to OPEB - - 567,681 114,787 682,468 Total deferred inflows of resources - - 567,681 602,236 1,169,917

NET POSITION
Net investment in capital assets 13,621,734 2,989 1,192,201 3,087,237 17,904,161 Restricted:

Endowment - non-expendable - - 110,741 - 110,741 Total restricted - - 110,741 - 110,741 Unrestricted (deficit) (625,300) 4,886,802 119,772 (677,285) 3,703,989 Total net position 12,996,434$ 4,889,791 $ 1,422,714 $ 2,409,952 $ 21,718,891 $ City of Redlands
Combining Statement of Net Position
Non-Major Enterprise Funds
June 30, 2025
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Redlands Regular Meeting of 02-17-26
421 of 976
Non-Potable
Groves Water Cemetery Aviation
Fund Fund Fund Fund Total
OPERATING REVENUES:

Charges for services 378,608 $ 839,500 $ 1,164,434 $ 165,683 $ 2,548,225 $ Miscellaneous operating revenue 14,432 - 271,493 294,854 580,779 Total operating revenues 393,040 839,500 1,435,927 460,537 3,129,004 OPERATING EXPENSES:

Salaries and benefits 500,961 72,771 532,159 17,063 1,122,954 General and administrative 885,531 132,299 369,636 231,925 1,619,391 Parts and supplies 20,796 - 116,546 650,611 787,953 Utilities 121,448 17,166 40,911 48,679 228,204 Depreciation/amortization 31,781 5,978 86,469 221,534 345,762 Total operating expenses 1,560,517 228,214 1,145,721 1,169,812 4,104,264 OPERATING INCOME (LOSS) (1,167,477) 611,286 290,206 (709,275) (975,260) NONOPERATING REVENUES (EXPENSES):

Investment income 226 205,323 193,933 22,187 421,669 Interest expense (63) - (25,038) (32,228) (57,329) Property taxes - - - 115,954 115,954 Operating grants - 57,573 - 585,761 643,334 Total nonoperating revenues (expenses) 163 262,896 168,895 691,674 1,123,628

INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS (1,167,314) 874,182
459,101 (17,601) 148,368
CAPITAL CONTRIBUTIONS AND TRANSFERS:

Capital contributions - 195,984 - - 195,984 Transfers in 224,599 - - - 224,599 Transfers out - (57,573) - - (57,573) Total capital contributions and transfers 224,599 138,411 - - 363,010 Changes in net position (942,715) 1,012,593 459,101 (17,601) 511,378 NET POSITION:

Beginning of year, as restated (Note 19) 13,939,149 3,877,198 963,613 2,427,553 21,207,513 End of year 12,996,434$ 4,889,791$ 1,422,714$ 2,409,952$ 21,718,891$ City of Redlands
Combining Statement of Revenues, Expenses, and Changes in Net Position Non-Major Enterprise Funds
For the Year Ended June 30, 2025
187
Redlands Regular Meeting of 02-17-26
422 of 976
Non-Potable
Groves Water Cemetery Aviation
Fund Fund Fund Fund Total
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from customers 378,608 $ 802,495 $ 1,260,705 $ 231,610 $ 2,673,418 $ Cash payments to suppliers for goods and services (1,014,032) (141,306) (539,340) (933,315) (2,627,993) Cash payments to employees for services (342,467) (86,251) (596,483) (105,762) (1,130,963) Receipts from other operating revenues 14,432 - 271,493 294,854 580,779 Net cash provided by (used in) operating activities (963,459) 574,938 396,375 (512,613) (504,759)

CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:

Operating grants - - - (9,927) (9,927) Property taxes - - - 114,996 114,996 Due to other funds 262,312 - - 154,973 417,285 Advances from other funds - - (127,790) (27,772) (155,562) Transfers from other funds 224,599 - - - 224,599 Transfers to other funds - (57,573) - - (57,573) Net cash provided by (used in)
noncapital financing activities 486,911 (57,573) (127,790) 232,270 533,818

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Acquisition of capital assets - - (13,299) - (13,299) Cash contributions received from developers - 195,984 - - 195,984 Principal payment of long-term debt (6,915) - (66,081) - (72,996) Interest paid on debt (63) - (25,716) (32,228) (58,007) Net cash provided by (used in) capital and
related financing activities (6,978) 195,984 (105,096) (32,228) 51,682 CASH FLOWS FROM INVESTING ACTIVITIES:

Investment income (loss) 2,253 192,623 185,293 23,381 403,550 Net cash provided by (used in) investing activities 2,253 192,623 185,293 23,381 403,550 Net change in cash and cash equivalents (481,273) 905,972 348,782 (289,190) 484,291 CASH AND CASH EQUIVALENTS:

Beginning of year 491,263 3,885,992 3,500,959 289,190 8,167,404 End of year 9,990$ 4,791,964$ 3,849,741$ -$ 8,651,695$

(Continued)
City of Redlands
Combining Statement of Cash Flows
Non-Major Enterprise Funds
For the Year Ended June 30, 2025
188
Redlands Regular Meeting of 02-17-26
423 of 976
Non-Potable
Groves Water Cemetery Aviation
Fund Fund Fund Fund Total

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

Operating income (loss) (1,167,477) $ 611,286 $ 290,206 $ (709,275) $ (975,260) $ Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities:

Depreciation/amortization 31,781 5,978 86,469 221,534 345,762 Changes in operating assets and liabilities, and
deferred outflows and inflows of resources:

Accounts receivable, net - (37,005) (16,988) (15,224) (69,217) Prepaid items (10) - - - (10) Lease receivable - - 20,485 110,691 131,176 Deferred outflows - OPEB related - - 4,559 912 5,471 Deferred outflows - pension related (24,928) 12,244 98,198 46,774 132,288 Accounts payable 13,753 8,159 (12,247) (2,100) 7,565 Accrued payroll 9,179 (2,136) 2,869 (2,477) 7,435 Deposits payable - - 113,100 (2,744) 110,356 Unearned revenue - - - 85,590 85,590 Compensated absences 2,615 624 4,585 794 8,618 Total OPEB liability - - 92,535 18,507 111,042 Net pension liability 171,628 (24,212) (187,547) (137,304) (177,435) Deferred inflows - lease related - - (20,326) (112,386) (132,712) Deferred inflows - OPEB related - - (79,523) (15,905) (95,428) Total adjustments 204,018 (36,348) 106,169 196,662 470,501 Net cash provided by (used in) operating activities (963,459)$ 574,938$ 396,375$ (512,613)$ (504,759)$ (Concluded)
For the Year Ended June 30, 2025
City of Redlands
Combining Statement of Cash Flows (Continued)
Non-Major Enterprise Funds
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Internal Service Funds
General Liability Self-Insurance Fund - This fund is used to account for the City’s self-insured general and automobile liability programs, which are provided to all City departments and funds.

Workers' Compensation Self-Insurance Fund - This fund is used to account for the City’s self-insured Workers’ Compensation and General Safety Programs, which are provided to all City departments and funds.

Information Technology Fund - This fund is used to account for the general maintenance and service of all City computers and phone equipment provided to all City departments.

Equipment Maintenance Fund - This fund is used to account for providing ongoing maintenance of all City vehicles and major equipment and to account for vehicle rental services to all City departments.

Utility Billing Fund - This fund is used to account for billing services costs provided for water, sewer, and solid waste.

Payroll Clearing Fund - This fund is used to account for the City’s reoccurring payroll obligations. 191
Redlands Regular Meeting of 02-17-26
426 of 976
General Workers'
Liability Compensation Information Equipment
Self-Insurance Self-Insurance Technology Maintenance
Fund Fund Fund Fund
ASSETS
Current assets:

Cash and investments 1,823,056$ 5,741,125$ 6,274,126$ 8,343,048$ Accounts receivable, net 577 - 4,783 - Interest receivable 10,935 34,436 37,633 50,042 Prepaid items - 300 44,016 - Inventories - - - 343,262 Total current assets 1,834,568 5,775,861 6,360,558 8,736,352 Noncurrent assets:

Capital assets:

Non-depreciable - - 669,105 - Depreciable, net - - 824,205 272,044 Total capital assets - - 1,493,310 272,044 Total noncurrent assets - - 1,493,310 272,044 Total assets 1,834,568 5,775,861 7,853,868 9,008,396

DEFERRED OUTFLOW OF RESOURCES
Related to OPEB 87,215 87,215 904,257 408,955 Related to pensions 61,389 188,943 619,189 146,897 Total deferred outflow of resources 148,604 276,158 1,523,446 555,852

LIABILITIES
Current liabilities:

Accounts payable 369,814 - 271,284 1,033,674 Accrued payroll 15,172 42,106 142,329 57,932 Compensated absences - due within one year 12,484 32,385 157,517 68,270 Claims payable - due within one year 3,200,671 6,725,719 - - Long-term debt - due within one year - - 22,125 10,741 Total current liabilities 3,598,141 6,800,210 593,255 1,170,617 Noncurrent liabilities:

Compensated absences - due in more than one year 12,484 32,384 157,517 68,269 Claims payable - due in more than one year 3,200,670 6,725,719 - - Long term debt - due in more than one year - - 74,983 33,973 Total OPEB liability 330,440 240,493 3,084,265 1,733,357 Net pension liability 279,265 859,522 2,816,760 668,251 Total noncurrent liabilities 3,822,859 7,858,118 6,133,525 2,503,850 Total liabilities 7,421,000 14,658,328 6,726,780 3,674,467

DEFERRED INFLOWS OF RESOURCES
Related to OPEB 114,787 114,787 1,679,461 528,356 Total deferred inflows of resources 114,787 114,787 1,679,461 528,356

NET POSITION
Net Investment in capital assets - - 1,493,310 272,044 Unrestricted (deficit) (5,552,615) (8,721,096) (522,237) 5,089,381 Total net position (deficit) (5,552,615)$ (8,721,096) $ 971,073 $ 5,361,425 $ (Continued)
City of Redlands
Combining Statement of Net Position
All Internal Service Funds
June 30, 2025
192
Redlands Regular Meeting of 02-17-26
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Utility Payroll
Billing Clearing
Fund Fund Total
ASSETS
Current assets:

Cash and investments 2,176,274$ 683,803$ 25,041,432$ Accounts receivable, net 3,758 1,347 10,465 Interest receivable 13,053 - 146,099 Prepaid items - - 44,316 Inventories - - 343,262 Total current assets 2,193,085 685,150 25,585,574 Noncurrent assets:

Capital assets:

Non-depreciable - - 669,105 Depreciable, net 29,487 - 1,125,736 Total capital assets 29,487 - 1,794,841 Total noncurrent assets 29,487 - 1,794,841 Total assets 2,222,572 685,150 27,380,415

DEFERRED OUTFLOW OF RESOURCES
Related to OPEB 970,665 - 2,458,307 Related to pensions 422,595 - 1,439,013 Total deferred outflow of resources 1,393,260 - 3,897,320

LIABILITIES
Current liabilities:

Accounts payable 11,107 1,641 1,687,520 Accrued payroll 100,033 610,608 968,180 Compensated absences - due within one year 125,805 - 396,461 Claims payable - due within one year - - 9,926,390 Long-term debt - due within one year - - 32,866 Total current liabilities 236,945 612,249 13,011,417 Noncurrent liabilities:

Compensated absences - due in more than one year 125,804 - 396,458 Claims payable - due in more than one year - - 9,926,389 Long term debt - due in more than one year - - 108,956 Total OPEB liability 2,973,387 - 8,361,942 Net pension liability 1,922,432 - 6,546,230 Total noncurrent liabilities 5,021,623 - 25,339,975 Total liabilities 5,258,568 612,249 38,351,392

DEFERRED INFLOWS OF RESOURCES
Related to OPEB 1,560,743 - 3,998,134 Total deferred inflows of resources 1,560,743 - 3,998,134

NET POSITION
Net Investment in capital assets 29,487 - 1,794,841 Unrestricted (deficit) (3,232,966) 72,901 (12,866,632) Total net position (deficit) (3,203,479)$ 72,901 $ (11,071,791)$ (Concluded)
City of Redlands
Combining Statement of Net Position (Continued)
All Internal Service Funds
June 30, 2025
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Redlands Regular Meeting of 02-17-26
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General Workers'
Liability Compensation Information Equipment
Self-Insurance Self-Insurance Technology Maintenance
Fund Fund Fund Fund
OPERATING REVENUES:

Charges for services -$ 3,341,585$ 4,500,000$ 10,304,446$ Miscellaneous operating revenue 668,308 1,075 44,841 245,522 Total operating revenues 668,308 3,342,660 4,544,841 10,549,968 OPERATING EXPENSES:

Salaries and benefits 231,865 880,134 2,889,252 477,564 General and administrative 9,549,230 4,165,187 2,196,974 1,196,819 Parts and supplies 753 7,143 713,264 6,399,410 Utilities 1,233 - 401,845 5,329 Depreciation/amortization - - 479,616 76,044 Total operating expenses 9,783,081 5,052,464 6,680,951 8,155,166 OPERATING INCOME (LOSS) (9,114,773) (1,709,804) (2,136,110) 2,394,802 NONOPERATING REVENUES (EXPENSES):

Investment income (loss) (225,666) 248,102 348,250 330,964 Interest expense - - (1,667) (1,240) Total nonoperating revenues (expenses) (225,666) 248,102 346,583 329,724 INCOME (LOSS) BEFORE TRANSFERS (9,340,439) (1,461,702) (1,789,527) 2,724,526 TRANSFERS:

Transfers in 7,518,434 - 350,000 - Transfers out - - - - Total transfers 7,518,434 - 350,000 - Changes in net position (1,822,005) (1,461,702) (1,439,527) 2,724,526
NET POSITION (DEFICIT):

Beginning of year, as restated (Note 19) (3,730,610) (7,259,394) 2,410,600 2,636,899 End of year (5,552,615)$ (8,721,096)$ 971,073$ 5,361,425$ (Continued)
City of Redlands
Combining Statement of Revenues, Expenses, and Changes in Net Position All Internal Service Funds
For the Year Ended June 30, 2025
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Utility Payroll
Billing Clearing
Fund Fund Total
OPERATING REVENUES:

Charges for services 1,458,494$ 455,160$ 20,059,685$ Miscellaneous operating revenue 64,458 - 1,024,204 Total operating revenues 1,522,952 455,160 21,083,889 OPERATING EXPENSES:

Salaries and benefits 1,957,058 - 6,435,873 General and administrative 1,111,780 - 18,219,990 Parts and supplies 11,249 - 7,131,819 Utilities - - 408,407 Depreciation/amortization 19,658 - 575,318 Total operating expenses 3,099,745 - 32,771,407 OPERATING INCOME (LOSS) (1,576,793) 455,160 (11,687,518) NONOPERATING REVENUES (EXPENSES):

Investment income (loss) 727,079 - 1,428,729 Interest expense - - (2,907) Total nonoperating revenues (expenses) 727,079 - 1,425,822 INCOME (LOSS) BEFORE TRANSFERS (849,714) 455,160 (10,261,696) TRANSFERS:

Transfers in - - 7,868,434 Transfers out - (455,160) (455,160) Total transfers - (455,160) 7,413,274 Changes in net position (849,714) - (2,848,422) NET POSITION (DEFICIT):

Beginning of year, as restated (Note 19) (2,353,765) 72,901 (8,223,369) End of year (3,203,479)$ 72,901$ (11,071,791)$ (Concluded)
City of Redlands
Combining Statement of Revenues, Expenses, and Changes in Net Position (Continued) All Internal Service Funds
For the Year Ended June 30, 2025
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General Workers'
Liability Compensation Information Equipment
Self-Insurance Self-Insurance Technology Maintenance
Fund Fund Fund Fund
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from customers 740,201$ 3,341,585$ 4,495,217$ 10,361,680$ Cash payments to suppliers for goods and services (7,329,148) (1,754,114) (3,068,103) (7,787,355) Cash payments to employees for services (287,731) (895,682) (2,389,640) (748,369) Receipts from other operating activities 668,308 1,075 44,841 245,522 Net cash provided by (used in) operating activities (6,208,370) 692,864 (917,685) 2,071,478

CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:

Transfers from other funds 7,518,434 - 350,000 - Transfers to other funds - - - - Net cash provided by (used in)
noncapital financing activities 7,518,434 - 350,000 -

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Acquisition of capital assets - - (1,184,115) (104,057) Principal payment of long-term debt - - (79,765) (14,723) Interest paid on debt - - (1,667) (1,240) Net cash (used in) capital and
related financing activities - - (1,265,547) (120,020) CASH FLOWS FROM INVESTING ACTIVITIES:

Investment income (loss) (233,520) 233,541 342,667 306,041 Net cash provided by (used in) investing activities (233,520) 233,541 342,667 306,041 Net change in cash and cash equivalents 1,076,544 926,405 (1,490,565) 2,257,499 CASH AND CASH EQUIVALENTS:

Beginning of year 746,512 4,814,720 7,764,691 6,085,549 End of year 1,823,056$ 5,741,125$ 6,274,126$ 8,343,048$ (Continued)
City of Redlands
Combining Statement of Cash Flows
All Internal Service Funds
For the Year Ended June 30, 2025
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Liability Compensation Information Equipment
Self-Insurance Self-Insurance Technology Maintenance
Fund Fund Fund Fund

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

Operating income (loss) (9,114,773)$ (1,709,804)$ (2,136,110)$ 2,394,802$ Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities:

Depreciation/amortization - - 479,616 76,044 Changes in operating assets and liabilities, and
deferred outflows and inflows of resources:

Accounts receivable, net 740,201 - (4,783) 57,234 Prepaid items 398 (300) 154,665 764 Inventories - - - (238,846) Deferred outflows - OPEB related 912 912 15,499 7,294 Deferred outflows -pension related 49,406 93,083 94,905 182,699 Accounts payable 220,881 - 89,315 52,285 Accrued payroll (2,917) 8,064 6,018 (3,534) Compensated absences 2,143 6,072 18,251 5,745 Claims payable 2,000,789 2,418,516 - - Total OPEB liability 18,507 18,507 314,621 148,057 Net pension liability (108,012) (126,281) 320,696 (483,829) Deferred inflows - OPEB related (15,905) (15,905) (270,378) (127,237) Total adjustments 2,906,403 2,402,668 1,218,425 (323,324) Net cash provided by (used in) operating activities (6,208,370)$ 692,864$ (917,685)$ 2,071,478$

NONCASH FINANCING
AND INVESTING ACTIVITIES:

Inception of finance purchase/lease/subscription agreement -$ -$ 121,829$ -$ Total noncash capital and related
financing activities -$ -$ 121,829$ -$

(Continued)
All Internal Service Funds
For the Year Ended June 30, 2025
City of Redlands
Combining Statement of Cash Flows (Continued)
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Utility Payroll
Billing Clearing
Fund Fund Total
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from customers 1,458,482$ 453,813$ 20,850,978$ Cash payments to suppliers for goods and services (1,123,878) 28,089 (21,034,509) Cash payments to employees for services (1,633,850) 28,027 (5,927,245) Receipts from other operating activities 64,458 - 1,024,204 Net cash provided by (used in) operating activities (1,234,788) 509,929 (5,086,572)

CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:

Transfers from other funds - - 7,868,434 Transfers to other funds - (455,160) (455,160) Net cash provided by (used in)
noncapital financing activities - (455,160) 7,413,274

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Acquisition of capital assets - - (1,288,172) Principal payment of long-term debt - - (94,488) Interest paid on debt - - (2,907) Net cash (used in) capital and
related financing activities - - (1,385,567) CASH FLOWS FROM INVESTING ACTIVITIES:

Investment income (loss) 725,114 - 1,373,843 Net cash provided by (used in) investing activities 725,114 - 1,373,843 Net change in cash and cash equivalents (509,674) 54,769 2,314,978 CASH AND CASH EQUIVALENTS:

Beginning of year 2,685,948 629,034 22,726,454 End of year 2,176,274$ 683,803$ 25,041,432$

(Continued)
City of Redlands
Combining Statement of Cash Flows (Continued)
All Internal Service Funds
For the Year Ended June 30, 2025
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Utility Payroll
Billing Clearing
Fund Fund Total

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

Operating income (loss) (1,576,793)$ 455,160$ (11,687,518)$ Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities:

Depreciation/amortization 19,658 - 575,318 Changes in operating assets and liabilities, and
deferred outflows and inflows of resources:

Accounts receivable, net (12) (1,347) 791,293 Prepaid items - 32,207 187,734 Inventories - - (238,846) Deferred outflows - OPEB related 14,587 - 39,204 Deferred outflows -pension related 83,636 - 503,729 Accounts payable (849) (4,118) 357,514 Accrued payroll 17,697 28,027 53,355 Compensated absences 12,708 - 44,919 Claims payable - - 4,419,305 Total OPEB liability 296,114 - 795,806 Net pension liability 152,940 - (244,486) Deferred inflows - OPEB related (254,474) - (683,899) Total adjustments 342,005 54,769 6,600,946 Net cash provided by (used in) operating activities (1,234,788)$ 509,929$ (5,086,572)$

NONCASH FINANCING
AND INVESTING ACTIVITIES:

Inception of finance purchase/lease/subscription agreement -$ -$ 121,829$ Total noncash capital and related
financing activities -$ -$ 121,829$

(Concluded)
Combining Statement of Cash Flows (Continued)
All Internal Service Funds
For the Year Ended June 30, 2025
City of Redlands
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STATISTICAL SECTION
(UNAUDITED)
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CONTENTS PAGE
1 Net Position by Component 204
2 Changes in Net Position 206
3 Fund Balances of Governmental Funds 210
4 Changes in Fund Balances of Governmental Funds 212
5 Assessed Value and Estimated Actual Value of Taxable Property 215 6 Assessed Value and Estimated Actual Value of Taxable Property by Major Type 216 7 Direct and Overlapping Property Tax Rates 218
8 Top Ten Principal Property Taxpayers 220
9 Property Tax Levies and Collections 221
10 Ratios of Outstanding Debt by Type 222
11 Ratios of General Bonded Debt Outstanding 224
12 Direct and Overlapping Governmental Activities Debt 225 13 Legal Debt Margin Information 226
14 Pledged Revenue Coverage 228
15 Demographic and Economic Statistics 229
16 Principal Employers 230
17 Full Time Equivalent City Government Employees by Function 231 18 Operating Indicators by Function/Program 232
19 Capital Asset Statistic s by Function/Program 234
Sources: Unless otherwise noted, the informatio
n in these schedules is derived fro m the City's annual comprehensive financial reports for the relevant year

CITY OF REDLANDS - STATISTICAL SECTION
Operating Information - These schedules contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services the City provides and the activities it performs.

Revenue Capacity - These schedules contain information to help the reader assess the City of Ridgecrest's most significant local revenue source, the property tax.

Debt Capacity - These schedules present information to help the reader assess the affordability of the City's current level of outstanding debt and the City's ability to issue additional debt in the future.

Demographic and Economic Information - These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place.

Financial Trends - These schedules contain trend information to help the reader understand how the City of Ridgecrest's financial performance and well being have changed over time.

This part of the City of Redlands's annual comprehensive financial report presents detailed information as a context for understanding what the information in the financial statements, no te disclosures, and required su pplementary information says about the City's overall financial health.
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Governmental activities
Net investment in capital assets, 648,293,673$ 629,390,358$ 590,288,015$ 537,558,597$ 481,259,666$ Restricted 30,679,680 26,403,823 13,385,123 11,326,983 14,059,449 Unrestricted (deficit) (113,289,589) (97,862,236) (88,121,189) (114,273,699) (143,979,153) Total governmental activities net position 565,683,764$ 557,931,945$ 515,551,949$ 434,611,881$ 351,339,962$ Business type activities
Net investment in capital assets 210,045,627$ 196,064,177$ 190,475,232$ 183,665,229$ 167,349,714$ Restricted 19,767,256 19,763,252 16,677,323 16,677,323 18,031,654 Unrestricted 7,103,718 8,113,449 18,287,832 20,522,584 25,405,456 Total business type activities net position 236,916,601$ 223,940,878$ 225,440,387$ 220,865,136$ 210,786,824$ Primary government
Net investment in capital assets 858,339,300$ 825,454,535$ 780,763,247$ 721,223,826$ 648,609,380$ Restricted 50,446,936 46,167,075 30,062,446 28,004,306 32,091,103 Unrestricted (deficit) (106,185,871) (89,748,787) (69,833,357) (93,751,115) (118,573,697) Total primary government net position 802,600,365$ 781,872,823$ 740,992,336$ 655,477,017$ 562,126,786$ NOTE:
(1) The City of Redlands implemented GASB 75 for the fiscal year ended June 30, 2018.

The Unrestricted Net Position was affected adversely by this Statement in order to reflect unamortized OPEB Liability.

It is anticipated that GASB 75 will expose this fund balance category to more fluctuations in the future as a result of immediate recognition of certain items (e.g. plan changes). (2) Beginning in FY 2019, the City changed its methodology to account for Right of Way. This adversely affected net position, causing a restatement of assets. More information is provided in Management's Discussion and Analysis. (3) In FY 2020 the significant variance in net position invested in capital assets for Governmental Activities is due to a large increase in the amount of right-of-way added as well as a significant increase in the assigned value based on the City's revised valuation methodology. More information is available in Management's Discussion and Analysis.

Fiscal Years
Last Ten Fiscal Years (accrual basis of accounting)
City of Redlands
Schedule 1
Net Position by Component
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2020 2019 2018 2017 2016
Governmental activities
Net investment in capital assets 473,042,917$ 443,551,078$ 655,044,577$ 642,109,428$ 622,119,006$ Restricted 17,346,674 15,676,686 20,499,351 11,100,669 15,258,535 Unrestricted (deficit) (154,157,129) (148,411,538) (148,371,437) (93,361,330) (81,795,361) Total governmental activities net position 336,232,462$ 310,816,226$ 527,172,491$ 559,848,767$ 555,582,180 Business type activities
Net investment in capital assets 165,453,760$ 150,997,528$ 150,228,905$ 149,771,777$ 163,565,980$ Restricted 23,794,167 26,162,608 17,516,341 17,399,398 3,702,600 Unrestricted 10,901,482 6,544,230 117,617 12,757,392 13,253,120 Total business type activities net position 200,149,409$ 183,704,366$ 167,862,863$ 179,928,567$ 180,521,700$ Primary government
Net investment in capital assets 638,496,677$ 594,548,606$ 805,273,482$ 791,881,205$ 785,684,986$ Restricted 41,140,841 41,839,294 38,015,692 28,500,067 18,961,135 Unrestricted (deficit) (143,255,647) (141,867,308) (148,253,820) (80,603,938) (68,542,241) Total primary government net position 536,381,871$ 494,520,592$ 695,035,354$ 739,777,334$ 736,103,880$ NOTE:
(1) The City of Redlands implemented GASB 75 for the fiscal year ended June 30, 2018.

The Unrestricted Net Position was affected adversely by this Statement in order to reflect unamortized OPEB Liability.

It is anticipated that GASB 75 will expose this fund balance category to more fluctuations in the future as a result of immediate recognition of certain items (e.g. plan changes). (2) Beginning in FY 2019, the City changed its methodology to account for Right of Way. This adversely affected net position, causing a restatement of assets. More information is provided in Management's Discussion and Analysis. (3) In FY 2020, the significant variance in net position invested in capital assets for Governmental Activities is due to a large increase in the amount of right-of-way added as well as a significant increase in the assigned value based on the City's revised valuation methodology. More information is available in Management's Discussion and Analysis.

Fiscal Years
Last Ten Fiscal Years (accrual basis of accounting)
City of Redlands
Schedule 1
Net Position by Component (Continued)
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Expenses
Governmental activities:

General government 42,523,409$ 42,250,996$ 28,913,048$ 26,157,407$ 18,717,217$ Public safety 83,895,046 70,359,582 48,272,159 61,325,651 57,395,655 Culture and recreation 10,439,921 9,900,700 9,123,335 6,902,767 4,250,967 Highway and streets 13,578,992 13,911,149 12,081,743 9,754,750 11,057,940 Library 6,009,854 4,068,345 3,557,350 2,754,340 2,792,316 Interest and fiscal charges 819,129 679,186 792,780 738,561 888,750 Total governmental activities expenses 157,266,351 141,169,958 102,740,415 107,633,477 95,102,845 Business type activities:

Water 33,200,910 30,614,235 26,729,160 26,535,646 23,411,564 Disposal 17,794,049 22,954,172 17,755,193 15,637,376 15,026,409 Wastewater (Sewer) 15,228,817 16,143,743 13,554,178 11,764,304 12,077,904 Groves 1,560,580 1,507,349 1,880,763 1,146,879 991,602 Non-Potable Water 228,214 581,877 563,123 956,768 677,088 Cemetery 1,170,759 1,399,130 1,441,652 958,443 1,119,999 Aviation 1,202,040 789,821 819,188 715,647 582,770 Total business type activities expenses 70,385,369 73,990,327 62,743,257 57,715,063 53,887,336 Total primary government expense
s 227,651,720$ 215,160,285 $ 165,483,672 $ 165,348,540 $ 148,990,181 $ Program Revenues
Governmental activities:

Charges for services:

General government 16,977,454 $ 16,010,783 $ 15,681,682 $ 15,368,391 $ 13,967,066 $ Public safety 805,711 965,128 932,542 744,389 669,155 Culture and recreation 612,736 641,939 421,867 748,377 261,090 Highway and streets 387,015 375,497 332,187 355,465 350,025 Library 4,980 20,721 83,541 118,701 418,298 Operating grants and contributions 9,966,621 14,227,777 5,158,328 4,223,681 3,941,740 Capital grants and contributions 24,818,977 38,207,775 53,471,990 28,433,466 11,372,774 Total governmental activities program revenues 53,573,494 70,449,620 76,082,137 49,992,470 30,980,148 Business type activities:

Charges for services:

Water 30,527,328 27,009,859 27,080,827 30,131,495 31,217,602 Disposal 22,361,903 20,764,912 20,313,945 21,066,272 19,009,933 Wastewater (Sewer) 13,757,797 13,144,186 12,465,052 11,998,633 10,124,426 Groves 378,608 845,420 1,681,761 863,303 684,782 Non-Potable Water 839,500 553,827 618,839 641,340 629,395 Cemetery 1,164,434 947,465 986,715 1,139,982 1,258,104 Aviation 165,683 152,175 136,727 135,480 125,857 Operating grants and contributions 3,497,291 114,117 385,895 631,695 20,125 Capital grants and contributions 6,357,779 3,867,244 4,010,635 6,134,627 2,840,765
Total business type activities program revenues 79,050,323 67,399,205 67,680,396 72,742,827 65,910,989 Total primary government program revenues 132,623,817$ 137,848,825 $ 143,762,533 $ 122,735,297 $ 96,891,137 $ Net (Expense)/Revenue
Governmental activities (103,692,857) (70,720,338) (26,658,278) (57,641,007) (64,122,697) Business type activities 8,664,954 (6,591,122) 4,937,139 15,027,764 12,023,653 Total primary government net expens
e (95,027,903)$ (77,311,460)$ (21,721,139)$ (42,613,243)$ (52,099,044)$ City of Redlands
Schedule 2
Changes in Net Position
Last Ten Fiscal Years (accrual basis of accounting)
Fiscal Years
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Expenses
Governmental activities:

General government 16,211,056$ 16,210,304$ 12,394,000$ 14,391,456$ 16,235,478$ Public protection 57,656,302 53,095,381 32,240,549 43,263,363 42,097,211 Culture and recreation 5,227,381 4,783,803 4,748,841 4,086,880 3,542,242 Highway and streets 4,060,779 10,183,231 12,854,490 11,271,259 15,594,075 Library 2,921,245 2,537,698 2,000,613 2,304,552 2,023,972 Interest and fiscal charges 994,894 683,446 834,297 936,132 1,123,871 Total governmental activities expenses 87,071,657 87,493,863 65,072,790 76,253,642 80,616,849 Business type activities:

Water 22,719,142 20,857,656 20,369,100 20,514,340 21,635,151 Disposal 15,194,462 16,162,875 12,877,703 12,274,583 12,172,640 Wastewater (Sewer) 11,242,914 9,926,236 8,851,848 8,979,254 8,956,871 Groves 845,498 849,678 788,554 742,740 841,529 Non-Potable Water 249,911 116,759 125,323 434,912 81,152 Cemetery 1,049,876 936,535 861,109 75,761 1,304,891 Aviation 637,012 617,285 466,972 785,348 609,088 Total business type activities expenses 51,938,815 49,467,024 44,340,609 43,806,938 45,601,322 Total primary government expense
s 139,010,472$ 136,960,887 $ 109,413,399 $ 120,060,580 $ 126,218,171 $ Program Revenues
Governmental activities:

Charges for services:

General government 11,482,417 $ 11,151,187 $ 10,811,937 $ 10,144,231 $ 9,270,657 $ Public safety 1,769,514 2,711,769 3,076,343 2,696,810 3,403,559 Culture and recreation 291,801 310,780 303,222 719,642 286,315 Highway and streets 2,311,254 2,322,468 1,895,996 1,361,187 1,205,141 Library 120,623 131,338 131,408 125,052 33,098 Operating grants and contributions 2,995,658 1,867,228 4,469,962 2,911,259 5,596,864 Capital grants and contributions 32,104,508 7,083,735 4,533,292 2,257,370 1,346,021 Total governmental activities program revenues 51,075,775 25,578,505 25,222,160 20,215,551 21,141,655 Business type activities:

Charges for services:

Water 28,014,723 28,053,989 27,030,979 22,479,655 18,873,106 Disposal 18,566,965 17,159,911 15,110,821 13,657,953 13,504,267 Wastewater (Sewer) 10,154,451 10,229,449 9,611,197 9,340,274 9,531,484 Groves 481,632 930,738 741,397 700,334 507,914 Non-Potable Water 484,262 528,296 638,313 83,905 508,556 Cemetery 926,398 555,256 745,347 514,015 461,997 Aviation 133,262 120,087 127,233 575,846 15,214 Operating grants and contributions 55,371 56,555 - - - Capital grants and contributions 6,800,041 5,450,817 347,871 816,777 392,189
Total business type activities program revenues 65,617,105 63,085,098 54,353,158 48,168,759 43,794,727 Total primary government program revenues 116,692,880$ 88,663,603 $ 79,575,318 $ 68,384,310 $ 64,936,382 $ Net (Expense)/Revenue
Governmental activities (35,995,882) (61,915,358) (39,850,630) (56,038,091) (59,475,194) Business type activities 13,678,290 13,618,074 10,012,549 4,361,821 (1,806,595) Total primary government net expens
e (22,317,592)$ (48,297,284)$ (29,838,081)$ (51,676,270)$ (61,281,789)$ City of Redlands
Schedule 2
Changes in Net Position (Continued)
Last Ten Fiscal Years (accrual basis of accounting)
Fiscal Years
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General Revenues and
Other Changes in Net Position
Governmental activities:

Taxes
Property taxes 45,991,007$ 42,883,738$ 40,372,312$ 37,769,495$ 35,722,886$ Sales and taxes 47,088,618 47,629,644 48,632,853 48,232,171 26,541,469 Franchises taxes 2,685,573 4,471,469 4,487,821 2,625,852 2,379,571 Other taxes 2,744,184 2,676,553 3,109,696 2,706,919 2,462,019 Investment income (loss) 9,605,154 9,235,054 2,757,278 (1,546,892) 282,836 Intergovernmental (unrestricted) 1,341,917 852,762 572,685 1,308,520 1,455,573 Miscellaneous revenue 2,634,249 2,523,968 4,734,390 1,689,391 3,064,706 Transfers 2,925,235 2,827,146 2,742,192 48,127,470 3,660,469 Total governmental activities 115,015,937 113,100,334 107,409,227 140,912,926 75,569,529 Business type activities:

Property taxes 115,954 104,411 96,621 73,337 79,616 Investment income (loss) 5,418,312 5,841,165 1,123,030 (2,746,746) 557,392 Miscellaneous revenue 2,698,968 1,973,183 1,107,435 1,208,057 1,637,223 Gain on sale of capital assets - - - 44,643,370 - Transfers (2,925,235) (2,827,146) (2,742,192) (48,127,470) (3,660,469) Total business type activities 5,307,999 5,091,613 (415,106) (4,949,452) (1,386,238) Total primary governmen
t 120,323,936$ 118,191,947 $ 106,994,121 $ 135,963,474 $ 74,183,291 $ Change in Net Position
Governmental activities 11,323,080 $ 42,379,996 $ 80,750,949 $ 83,271,919 $ 11,446,832 $ Business type activities 13,972,953 (1,499,509) 4,522,033 10,078,312 10,637,415 Total primary governmen
t 25,296,033$ 40,880,487 $ 85,272,982 $ 93,350,231 $ 22,084,247 $ NOTE:
(1) The City of Redlands implemented GASB 75 for the fiscal year ended June 30, 2018.

The Unrestricted Net Position was affected adversely by this Statement in order to reflect unamortized OPEB Liability.

It is anticipated that GASB 75 will expose this fund balance category to more fluctuations in the future as a result of immediate recognition of certain items (e.g. plan changes). (2) Beginning in FY 2019, the City changed its methodology to account for Right of Way. This adversely affected net position, causing a restatement of assets. More information is provided in Management's Discussion and Analysis. (3) The significant variance in the change in net position for Governmental Activities is due to a large decrease in the prior year 'to account for a revised right-of-way valuation methodology that had an adverse affect on net position, followed by a significant 'increase in right-of-way value added. More information is available in Management's Discussion and Analysis.

City of Redlands
Fiscal Years
Schedule 2
Changes in Net Position (Continued)
Last Ten Fiscal Years (accrual basis of accounting)
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General Revenues and
Other Changes in Net Position
Governmental activities:

Taxes
Property taxes 33,743,135$ 31,833,632$ 30,067,473$ 28,173,741$ 26,424,395$ Sales and taxes 17,510,274 18,838,445 17,177,492 16,843,090 18,344,596 Franchises taxes 2,369,348 2,221,789 3,224,053 3,035,317 3,079,571 Other taxes 2,031,015 2,061,674 1,907,344 1,977,985 1,792,527 Investment income (loss) 1,869,008 2,421,036 206,304 212,991 800,889 Intergovernmental (unrestricted) 167,157 187,586 195,866 196,602 234,787 Miscellaneous revenue 1,865,686 1,498,562 1,689,135 7,331,734 1,105,258 Transfers 1,856,495 2,943,934 8,243,110 2,500,914 4,486,199 Total governmental activities 61,412,118 62,006,658 62,710,777 60,272,374 56,268,222 Business type activities:

Property taxes 81,098 85,928 66,263 40,199 38,109 Investment income (loss) 3,214,540 3,310,733 509,882 500,783 1,335,997 Miscellaneous revenue 1,327,610 1,770,702 2,457,912 4,627,943 2,911,966 Gain on sale of capital assets - - - - - Transfers (1,856,495) (2,943,934) (8,243,110) (2,500,914) (4,486,199) Total business type activities 2,766,753 2,223,429 (5,209,053) 2,668,011 (200,127) Total primary governmen
t 64,178,871$ 64,230,087 $ 57,501,724 $ 62,940,385 $ 56,068,095 $ Change in Net Position
Governmental activities 25,416,236 $ 91,300 $ 22,860,147$ 4,234,283 $ (3,206,972) $ Business type activities 16,445,043 15,841,503 4,803,496 7,029,832 (2,006,722) Total primary governmen
t 41,861,279$ 15,932,803 $ 27,663,643 $ 11,264,115 $ (5,213,694) $ NOTE:
(1) The City of Redlands implemented GASB 75 for the fiscal year ended June 30, 2018.

The Unrestricted Net Position was affected adversely by this Statement in order to reflect unamortized OPEB Liability.

It is anticipated that GASB 75 will expose this fund balance category to more fluctuations in the future as a result of immediate recognition of certain items (e.g. plan changes). (2) Beginning in FY 2019, the City changed its methodology to account for Right of Way. This adversely affected net position, causing a restatement of assets. More information is provided in Management's Discussion and Analysis. (3) The significant variance in the change in net position for Governmental Activities is due to a large decrease in the prior year 'to account for a revised right-of-way valuation methodology that had an adverse affect on net position, followed by a significant 'increase in right-of-way value added. More information is available in Management's Discussion and Analysis.

City of Redlands
Fiscal Years
Schedule 2
Changes in Net Position (Continued)
Last Ten Fiscal Years (accrual basis of accounting)
209
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2025 2024 2023 2022 2021
General fund
Nonspendable 982,016$ 3,513,932$ 8,214,591$ 8,369,652$ 8,327,781$ Restricted 1,792,296 1,333,444 1,260,683 1,157,866 1,076,656 Committed 13,479,646 12,232,036 12,492,698 12,663,905 11,863,318 Assigned 34,705,113 33,591,308 35,700,799 31,734,961 4,188,185 Unassigned 63,374,540 60,505,969 53,289,070 39,513,840 29,877,229 Total general fund 114,333,611 111,176,689 110,957,841 93,440,224 55,333,169 All other governmental funds
Nonspendable 253,569 293,319 574,827 43,400 30,200 Restricted 28,381,732 24,458,555 11,961,583 9,980,754 13,024,622 Committed - - 11,893,350 11,409,016 10,748,915 Assigned 2,257,421 2,764,922 2,325,558 2,560,682 2,742,004 Unassigned (deficit) (1,032,521) (240,244) (8,448,957) (6,610,754) (7,558,978) Total all other governmental funds 29,860,201 27,276,552 18,306,361 17,383,098 18,986,763 TOTAL FUND BALANCES 144,193,812$ 138,453,241 $ 129,264,202 $ 110,823,322 $ 74,319,932 $ (1) The City passed a one-cent sales tax which added significant revenue over budget forecasts, additionally $7.1 million in unspent appropriations were carried over to the following fiscal year. Lastly the City implemented GASB 84 to recognize special deposits from another fund in the General Fund as committed fund balance in FY 2022.

Last Ten Fiscal Years (modified accrual basis of accounting) Fiscal Years
City of Redlands
Schedule 3
Fund Balances of Governmental Funds
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2020 2019 2018 2017 2016
General fund
Nonspendable 8,469,766$ 8,707,654$ 8,734,646$ 8,517,994$ 8,324,472$ Restricted 1,058,540 1,104,848 1,057,918 - - Committed 8,285,676 8,285,676 8,285,676 8,122,332 8,122,332 Assigned 3,901,788 3,894,566 4,063,636 2,130,916 2,267,840 Unassigned 19,000,734 17,654,773 13,592,754 13,927,733 13,454,147 Total general fund 40,716,504 116,098,651 35,734,630 32,698,975 32,168,791 All other governmental funds
Nonspendable 104,242 123,682 123,661 2,539,567 - Restricted 16,266,437 14,541,638 19,321,372 9,563,703 15,258,535 Committed 11,048,266 9,738,292 8,441,919 8,013,248 7,212,199 Assigned 1,463,122 1,480,036 1,204,854 3,419,978 - Unassigned (deficit) (7,740,144) (8,548,572) (8,761,721) (10,470,797) (9,553,680) Total all other governmental funds 21,141,923 17,335,076 20,330,085 13,065,699 12,917,054 TOTAL FUND BALANCES 61,858,427$ 133,433,727 $ 56,064,715 $ 45,764,674 $ 45,085,845 $ (1) The City passed a one-cent sales tax which added significant revenue over budget forecasts, additionally $7.1 million in unspent appropriations were carried over to the following fiscal year. Lastly the City implemented GASB 84 to recognize special deposits from another fund in the General Fund as committed fund balance in FY 2022.

Last Ten Fiscal Years (modified accrual basis of accounting) Fiscal Years
City of Redlands
Schedule 3
Fund Balances of Governmental Funds (Continued)
211
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2025 2024 2023 20222 2021
Revenues
Taxes 98,509,382$ 97,661,404$ 97,890,204$ 92,468,816$ 68,307,527$ Licenses and permits 9,790,300 9,238,592 8,862,824 8,122,570 7,579,479 Intergovernmental 16,677,734 21,998,289 11,470,217 8,748,788 7,520,076 Charges for services 12,044,699 11,662,388 12,139,614 15,275,610 9,853,495 Use of money and property 6,864,263 6,916,285 482,019 (3,135,140) 248,353 Other miscellaneous 3,098,455 2,207,763 2,468,702 1,577,070 1,712,985 Total revenues 146,984,833 149,684,721 133,313,580 123,057,714 95,221,915 Expenditures
Current:

General government 33,800,693 36,952,522 25,336,594 23,345,899 16,897,961 Public safety 65,521,210 60,359,083 54,055,313 50,048,806 50,208,365 Culture and recreation 8,945,542 7,956,878 7,405,824 5,346,330 3,154,163 Highway and streets 6,559,980 6,513,304 5,851,214 4,491,032 4,657,068 Library 5,407,455 3,580,553 3,125,090 2,601,164 2,426,448 Capital outlay 16,377,379 23,894,085 14,328,396 47,887,675 11,067,756 Debt service:

Principal 1,464,653 3,907,790 2,545,598 2,061,323 1,708,629 Interest and fiscal charges 778,289 630,463 851,968 612,391 488,363 Total expenditures 138,855,201 143,794,678 113,499,997 136,394,620 90,608,753 Excess of revenues over (under) expenditures 8,129,632 5,890,043 19,813,583 (13,336,906) 4,613,162 Other financin
g sources (uses)
Proceeds from sale of property - - - - 1,425,889 Inception of finance purchase agreement - 3,668,445 - 3,275,547 362,413 Inception of lease liability 2,098,978 2,546,260 384,011 196,119 - Transfers in 17,059,494 23,060,757 11,455,770 69,860,227 14,158,728 Transfers out (21,547,533) (25,976,466) (13,212,484) (23,491,596) (11,759,357) Total other financing sources (uses) (2,389,061) 3,298,996 (1,372,703) 49,840,297 4,187,673 Net change in fund balances 5,740,571$ 9,189,039$ 18,440,880$ 36,503,391$ 8,800,835$ Restatements -$ -$ -$ -$ 3,660,669$ Debt service as a percentage of non-capital
expenditures 1

1.8% 3.8% 3.4% 3.0% 2.8%
NOTE:
1 Calculated by dividing the sum of principal and interest by noncapital expenditures which are total expenditures less a) capital outlay (to extent capitalized for the government-wide statements of net position); and b) expenditures for capitalized assets contained within the functional expenditure categories.

Last Ten Fiscal Years (modified accrual basis of accounting) Fiscal Years
2 The City's tax revenue was bolstered by the passage of a new one-cent local sales tax and a favorable tax reallocation from its Amazon fulfillment center.

City of Redlands
Schedule 4
Changes in Fund Balances of Governmental Funds
212
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2020 2019 2018 2017 2016
Revenues
Taxes 57,080,368$ 56,188,843$ 53,608,771$ 51,196,332$ 49,641,089$ Licenses and permits 9,786,703 9,363,446 8,249,522 8,482,996 7,321,567 Intergovernmental 5,052,310 4,290,382 4,029,164 4,266,267 3,637,854 Charges for services 9,659,518 9,912,278 8,100,020 7,484,890 7,469,738 Use of money and property 1,659,740 1,823,854 185,610 191,541 717,504 Other miscellaneous 2,846,580 1,930,916 4,866,979 3,958,621 3,785,796 Total revenues 86,085,219 83,509,719 79,040,066 75,580,647 72,573,548 Expenditures
Current:

General government 14,842,765 14,702,684 12,830,680 12,351,772 12,915,590 Public safety 48,554,670 45,514,084 45,246,205 42,755,811 40,337,356 Culture and recreation 3,244,432 3,286,739 2,870,721 2,611,210 2,481,223 Highway and streets 6,998,840 6,565,573 7,033,817 5,695,084 5,034,090 Library 2,464,463 2,158,580 1,989,717 1,942,607 1,909,442 Capital outlay 4,819,364 10,307,277 6,132,826 15,476,158 11,481,823 Debt service:

Principal 1,477,188 2,688,630 3,043,767 3,115,653 3,947,223 Interest and fiscal charges 548,472 665,241 812,002 976,711 1,158,384 Total expenditures 82,950,194 85,888,808 79,959,735 84,925,006 79,265,131 Excess of revenues over (under) expenditures 3,135,025 (2,379,089) (919,669) (9,344,359) (6,691,583) Other financin
g sources (uses)
Proceeds from sale of property 89,657 252,613 1,975,203 6,272,810 311,189 Inception of finance purchase agreement - - - - - Inception of lease liability - - - - - Transfers in 12,557,880 16,569,439 19,326,814 15,430,085 15,911,839 Transfers out (10,906,728) (13,525,085) (9,788,204) (11,558,209) (9,720,247) Total other financing sources (uses) 1,740,809 3,296,967 11,513,813 10,144,686 6,502,781 Net change in fund balances 4,875,834$ 917,878$ 10,594,144$ 800,327$ (188,802)$ Restatements -$ -$ -$ -$ -$ Debt service as a percentage of non-capital
expenditures 1

2.6% 4.4% 5.2% 5.9% 7.5%
NOTE:
1 Calculated by dividing the sum of principal and interest by noncapital expenditures which are total expenditures less a) capital outlay (to extent capitalized for the government-wide statements of net position); and b) expenditures for capitalized assets contained within the functional expenditure categories.

Last Ten Fiscal Years (modified accrual basis of accounting) Fiscal Years
2 The City's tax revenue was bolstered by the passage of a new one-cent local sales tax and a favorable tax reallocation from its Amazon fulfillment center.

City of Redlands
Schedule 4
Changes in Fund Balances of Governmental Funds (Continued) 213
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Fiscal Year Taxable Total
Ended Less: Assessed Direct Tax
June 30 Secured Unsecured Exemptions Value Rate
2025 13,838,506$ 444,573 $ (67,949) $ 14,215,130 $ 0.19836 2024 12,812,282 410,488 (68,251) 13,154,519 0.21758 2023 11,786,415 339,774 (70,106) 12,056,083 0.21821 2022 11,148,507 342,259 (72,875) 11,417,891 0.21869 2021 10,700,129 358,630 (73,396) 10,985,363 0.21864 2020 10,187,750 361,653 (74,204) 10,475,199 0.21874 2019 9,564,308 387,527 (74,744) 9,877,091 0.21877 2018 9,090,915 328,121 (76,265) 9,342,771 0.21877 2017 8,616,414 309,224 (76,808) 8,848,830 0.21877 2016 8,112,897 337,359 (74,030) 8,376,226 0.21877 NOTE:

Source: San Bernardino County Assessor (via HdL, Coren & Cone) California Municipal Statistics, Inc.

San Bernardino County Auditor-Controller - Property Tax Division With the approval of ABX1 26, the State eliminated Redevelopment from the State of California for the Fiscal Year 2012/13 and years thereafter.

Last Ten Fiscal Years
In 1978, the voters of the State of California passed Proposition 13, which limited property taxes to a total minimum rate of 1%, based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property is only re-assessed at the time that it is sold to a new owner. At that point, the new assessed value is re-assessed at the purchase price of the property sold. The assessed valuation data shown above represents the only data currently available, with respect to the actual market value of taxable property, and is subject to the limitations described above.

City of Redlands
Schedule 5
Assessed Value and Estimated Actual Value of Taxable Property (In Thousands)
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CATEGORY 2025 2024 2023 2022 2021
Residential 9,022,227$ 8,504,880$ 7,877,964$ 7,407,486$ 7,072,365$ Commercial 1,571,666 1,488,548 1,387,866 1,299,726 1,253,237 Industrial 1,812,308 1,723,267 1,444,607 1,361,167 1,326,479 Government 7,209 7,068 6,929 15,553 2,883 Institutional 22,280 21,037 22,473 21,841 20,405 Irrigated 31,880 27,649 29,799 25,897 27,275 Miscellaneous 58,335 60,190 45,389 36,104 37,025 Recreational 33,266 49,504 48,611 55,431 51,028 Vacant Land 323,153 276,303 264,095 270,853 222,964 SBE Nonunitary 926,251 626,016 634,683 654,449 686,469 Unsecured 474,504 438,308 363,771 360,182 358,629 Unknown - - - - - Total Assessed Value 14,283,079$ 13,222,770$ 12,126,187$ 11,508,689$ 11,058,759$ Less: Exemptions (67,949) (68,251) (70,106) (72,875) (73,396) Taxable Assessed Value 14,215,130$ 13,154,519$ 12,056,081$ 11,435,814$ 10,985,363$ Total Direct Rate 0.19836 0.21758 0.21821 0.21755 0.21718 NOTES:

Source: San Bernardino County Assessor (via HdL, Coren & Cone) City of Redlands
Schedule 6
Assessed Value and Estimated Actual Value of Taxable Property by Major Type (In Thousands)
Last Ten Fiscal Years
In 1978 the voters of the State of California passed Proposition 13 which limited taxes to a total maximum rate of 1%, based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum of 2%). With few exceptions, property is only reassessed as a result of new construction activity or at the time it is sold to a new owner. At that point, the property is reassessed based upon the added value of the construction or at the purchase price (market value) or economic value of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above.

Exempt values are not included in Total.

Fiscal Years
Source: HdL Coren Cone 216
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CATEGORY 2020 2019 2018 2017 2016
Residential 6,708,893$ 6,246,593$ 5,935,215$ 5,643,230$ 5,355,614$ Commercial 1,176,203 1,085,468 1,040,344 988,145 959,063 Industrial 1,253,275 1,201,011 1,160,879 1,035,053 790,087 Government 576 548 522 513 505 Institutional 18,506 18,463 17,188 16,293 16,172 Irrigated 28,199 26,136 26,471 26,750 26,691 Miscellaneous 33,513 39,302 27,016 26,495 23,785 Recreational 50,098 49,887 49,678 32,808 32,520 Vacant Land 232,018 199,973 200,329 209,375 277,305 SBE Nonunitary 686,469 696,927 633,273 637,752 631,155 Unsecured 361,653 387,527 328,121 309,224 337,359 Unknown - - - - - Total Assessed Value 10,549,403$ 9,951,835$ 9,419,036$ 8,925,638$ 8,450,256$ Less: Exemptions (74,204) (74,744) (76,265) (76,808) (74,030) Taxable Assessed Value 10,475,199$ 9,877,091$ 9,342,771$ 8,848,830$ 8,376,226$ Total Direct Rate 0.21732 0.21877 0.21877 0.21877 0.21877 City of Redlands
Schedule 6
Assessed Value and Estimated Actual Value of Taxable Property by Major Type (Continued) (In Thousands)
Last Ten Fiscal Years
Fiscal Years
Source: HdL Coren Cone 217
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2025 2024 2023 2022 2021
City Share of Basic Levy (1) 0.21878 0.21878 0.21878 0.21878 0.21878 Overlapping Rates: (2)
County General Fund 0.14600 0.14600 0.14600 0.14600 0.14600 County Superintendent 0.00501 0.00501 0.00750 0.00740 0.00740 Inland Empire Joint Resource Conservation District 0.00050 0.00050 0.00050 0.00050 0.00050 Educational Revenue Augmentation Fund 0.22110 0.22110 0.22110 0.22110 0.22110 Flood Control Zone 3 0.02560 0.02560 0.02560 0.02560 0.02560 Flood Control Admin 3-6 0.00088 0.00088 0.00088 0.00088 0.00088 Redlands Unified 0.30160 0.30160 0.30160 0.30160 0.30160 San Bernardino Community College 0.05130 0.05130 0.05130 0.05130 0.05130 San Bernardino Valley Municipal Water 0.02640 0.02640 0.02630 0.02640 0.02640 San Bernardino Valley Water Conservation District 0.00044 0.00044 0.00044 0.00044 0.00044 Superintendent - Physically Handicapped 0.00197 0.00197 - - - Superintendent - Development Center 0.00052 0.00052 - - - Total Proposition 13 Rate 1.00000 1.00000 1.00000 1.00000 1.00000 Redlands Debt Service - - - - - Redlands Unified 0.02770 0.03160 0.02790 0.06620 0.03600 San Bernardino Community College 0.03700 0.04520 0.04500 0.05340 0.06510 San Bernardino Unified 0.09360 0.06880 0.08780 0.10890

0.10340
San Bernardino Valley Municipal Water 0.11000 0.12000 0.13000 0.13000 0.14250 Total Voter Approved Rate 0.26830 0.26560 0.29070 0.35850 0.34700 Total Direct and Overlapping Rate 1.26830 1.26560 1.29070 1.35850 1.34700 City Share of 1% Levy Per Prop 13 (3) 0.21878 0.21878 0.21878 0.21878 0.21878 Redlands Debt Service - -
City Direct Rate (4) 0.19836 0.21758 0.21821 0.21755 0.21718 NOTES:

Source: San Bernardino County Assessor (via HdL, Coren & Cone) (4) Because basic and debt rates vary by tax rate area, individual rates cannot be summed. Total Direct Rate is the weighted average of all individual direct rates applied by the government preparing the statistical section. (3) City's Share of 1% Levy is based on the City's share of the general fund tax rate area with the largest net taxable value within the city. ERAF general fund tax shifts may not be included in tax ratio figures.

City of Redlands
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
(2) Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all city property owners.
(1) In 1978, California voters passed Proposition 13, which sets the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies in which the subject property resides. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of various voter approved items.

Schedule 7
Fiscal Year
Source: HdL Coren Cone 218
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2020 2019 2018 2017 2016
City Share of Basic Levy (1) 0.21878 0.21878 0.21878 0.21878 0.21878 Overlapping Rates: (2)
County General Fund 0.14600 0.14600 0.14600 0.14600 0.14600 County Superintendent 0.00750 0.00750 0.00750 0.00750 0.00750 Inland Empire Joint Resource Conservation District 0.00050 0.00050 0.00050 0.00050 0.00050 Educational Revenue Augmentation Fund 0.22110 0.22110 0.22110 0.22110 0.22110 Flood Control Zone 3 0.02560 0.02560 0.02560 0.02560 0.02560 Flood Control Zone 8 0.00088 0.00088 0.00088 0.00088 0.00088 Redlands Unified 0.30160 0.30160 0.30160 0.30160 0.30160 San Bernardino Community College 0.05130 0.05130 0.05130 0.05130 0.05130 San Bernardino Valley Municipal Water 0.02630 0.02630 0.02630 0.02630 0.02630 San Bernardino Valley Water Conservation District 0.00044 0.00044 0.00044 0.00044 0.00044 Superintendent - Physically Handicapped - - - - - Superintendent - Development Center - - - - - Total Proposition 13 Rate 1.00000 1.00000 1.00000 1.00000 1.00000 Redlands Debt Service - - - - - Redlands Unified 0.03390 0.03240 0.04940 0.05240 0.05670 San Bernardino Community College 0.05620 0.04070 0.03760 0.03500 0.04030 San Bernardino Unified 0.09690 0.11260 0.10070 0.07950

0.11820
San Bernardino Valley Municipal Water 0.14250 0.15250 0.15250 0.16250 0.16250 Total Voter Approved Rate 0.32950 0.33820 0.34020 0.32940 0.37770 Total Direct and Overlapping Rate 1.32950 1.33820 1.34020 1.32940 1.37770 City Share of 1% Levy Per Prop 13 (3) 0.21878 0.21878 0.21878 0.21878 0.21878 Redlands Debt Service - - - - - City Direct Rate (4) 0.21732 0.21877 0.21877 0.21877 0.21877 NOTES:

Source: San Bernardino County Assessor (via HdL, Coren & Cone) (1) In 1978, California voters passed Proposition 13, which sets the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies in which the subject property resides. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of various voter approved items.

Last Ten Fiscal Years
Direct and Overlapping Property Tax Rates (Continued)
City of Redlands
Schedule 7
Fiscal Year
(4) Because basic and debt rates vary by tax rate area, individual rates cannot be summed. Total Direct Rate is the weighted average of all individual direct rates applied by the government preparing the statistical section. (3) City's Share of 1% Levy is based on the City's share of the general fund tax rate area with the largest net taxable value within the city. ERAF general fund tax shifts may not be included in tax ratio figures. (2) Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all city property owners.

Source: HdL Coren Cone 219
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Percentage of Percentage of
Taxable Total Taxable Taxable Total Taxable
Assessed Assessed Assessed Assessed
Taxpayer Value Value Value Value
Southern California Edison Company 924,119$ 6.50% 630,821$ 7.53% Prologis LP / Prologis CA II LP 217,519 1.53% 84,633 1.01% Duke Realty LP* 208,438 1.47% 42,009 0.50% Redlands Owner LP* 171,666 1.21% -
NYS New LLC* 151,294 1.06% 83,082 0.99% PVT Apartments SPE LLC 142,830 1.00% -
Ashley Furniture Industries* 117,013 0.82% - BCI-OEF Redlands DC LP 114,516 0.81% -
Venue at Orange LLC* 104,612 0.74%
AMB Institutional Alliance Fund III 98,476 0.69% 83,576 1.00% Teachers Insurance and Annuity Assoc. -
2301 W. San Bernardino Ave Invest Group 56,367 0.67% BRE Piper/Parkview Terrace Assoc. LLC 84,214 1.01% CLPF - Redlands Business Center 44,349 0.53% ROC II California Redlands LLC 64,188 0.77% PACGWL LLC 41,003 0.49%
Top Ten Total 2,250,483$ 15.83% 1,214,242$ 14.50% City Total Net Taxable Assessed Value 14,215,130$ 8,376,226$ * Pending appeals on parcels
Source: San Bernardino County Assessor (via HdL, Coren & Cone) Fiscal Year 2025 and Nine Years Prior
2016
City of Redlands
Schedule 8
Top Ten Principal Property Taxpayers
(in Thousands)
2025
Source: HdL Coren Cone 220
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Fiscal Taxes Levied Subsequent Years
Year Ended for the Percent Collections Percent
June 30 Fiscal Year Amount of Levy of Prior Years Amount of Levy 2025 59,008,938$ 58,755,200$ 99.57% 507,708$ 59,262,908$ 100.43% 2024 54,132,817 53,937,939 99.64% 997,801 54,935,740 101.48% 2023 49,559,611 49,351,461 99.58% 651,627 50,003,088 100.89% 2022 49,347,531 49,204,423 99.71% 691,484 49,895,907 101.11% 2021 46,298,808 46,048,794 99.46% 615,108 46,663,902 100.79% 2020 42,472,462 42,173,456 99.30% 524,343 42,697,799 100.53% 2019 41,184,840 40,950,087 99.43% 571,918 41,522,005 100.82% 2018 35,648,742 35,417,025 99.35% 585,973 36,002,998 100.99% 2017 33,814,971 33,547,833 99.21% 561,371 34,109,204 100.87% 2016 31,245,233 31,220,237 99.92% 593,784 31,814,021 101.82% NOTE:

Source: City of Redlands, San Bernardino County Auditor-Controller/Treasurer/Tax Collector City of Redlands
Schedule 9
Property Tax Levies and Collections 1
Last Ten Fiscal Years
² Subsequent years’ collections of prior-year levies may include delinquent tax payments from multiple prior fiscal years. While the San Bernardino County Auditor‑Controller/Treasurer/Tax Collector system now allows identification of payment vintage by levy year, the schedule presented here aggregates all prior-year collections for simplicity and does not segregate them by specific prior years. ¹ The amounts presented include only City property tax revenues. Prior to the dissolution of redevelopment in 2012, these amounts included Redevelopment Agency tax increment and related pass-through payments to other agencies. Following the dissolution, the City no longer receives redevelopment tax increment. Instead, the City now receives a residual distribution from the Redevelopment Property Tax Trust Fund (RPTTF), which is included in the City’s property tax revenues.

Fiscal Year of Levy
2 Collected within the
Total Collections to Date2
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Fiscal Year Taxable Notes / Total
Ended Pension Certificates of Leases / SBITAs Governmental June 30 Bonds Participation Payable Activities
2025 4,309,904$ -$ 8,647,465$ 12,957,369$ 2024 4,469,940 - 7,785,799 12,255,739 2023 4,607,478 - 5,376,102 9,983,580 2022 6,172,956 - 5,739,328 11,912,284 2021 7,591,783 - 2,147,431 9,739,214 2020 8,869,341 - 2,148,647 11,017,988 2019 10,015,991 - 2,033,734 12,049,725 2018 12,452,070 - 2,207,364 14,659,434 2017 14,596,411 643,006 2,376,131 17,615,548 2016 16,581,841 1,466,010 2,656,784 20,704,635 NOTE:

Details regarding the City's outstanding debt can be found in the notes to the financial statements.

Source: City of Redlands
Governmental Activities
Last Ten Fiscal Years
Ratios of Outstanding Debt by Type
Schedule 10
City of Redlands
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Fiscal Year Water Wastewater Solid Waste Notes / Total Total Percentage Debt Ended Revenue Revenue Revenue Leases / SBITAs Business-type Primary of Personal Per June 30 Bonds Bonds Bonds Payable Activities Government Income Capita 2025 - $ - $ -$ 13,076,271$ 13,076,271$ 26,033,640$ 0.75% 354 2024 - - - 13,558,549 13,558,549 25,814,288 0.70% 355 2023 - - 1,660,000 13,461,929 15,121,929 25,105,509 0.81% 343 2022 - - 3,408,353 14,644,928 18,053,281 29,965,565 1.05% 409 2021 - - 5,091,347 15,514,242 20,605,589 30,344,803 1.16% 426 2020 - - 6,704,343 16,784,165 23,488,508 34,506,496 1.20% 486 2019 - - 8,247,337 18,129,060 26,376,397 38,426,122 1.54% 542 2018 - - 9,720,331 19,440,040 29,160,371 43,819,805 1.76% 618 2017 - 990,000 11,138,322 20,929,311 33,057,633 50,673,181 2.31% 732 2016 - 2,021,443 12,506,313 18,819,314 33,347,070 54,051,705 2.41% 774 2015 1,195,000 3,024,098 13,834,309 16,429,544 34,482,951 34,482,951 2.63% 847 Business-type Activities
Last Ten Fiscal Years
Ratios of Outstanding Debt by Type (Continued)
City of Redlands
Schedule 10
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Fiscal Year Taxable Accumulated Net Percent of
Ended Pension Certificates of Resources to General Assessed Per June 30 Bonds Participation Total Repay Principal Bonded Debt Value 1 Capita 2025 4,310 $ - $ 4,310$ 215 $ 4,095 $ 0.03% 56 $ 2024 4,470 - 4,470 200 4,270 0.03% 59 2023 4,607 - 4,607 185 4,422 0.04% 61 2022 6,173 - 6,173 1,620 4,553 0.04% 62 2021 7,592 - 7,592 1,480 6,112 0.06% 86 2020 8,869 - 8,869 1,520 7,349 0.08% 104 2019 10,016 - 10,016 1,383 8,633 0.10% 122 2018 12,452 - 12,452 2,575 9,877 0.13% 139 2017 14,596 643 15,239 2,416 12,823 0.17% 185 2016 16,582 1,466 18,048 2,265 15,783 0.21% 232 NOTE:
1 Assessed value has been used because the actual value of taxable property is not readily available in the State of California.

Outstanding General Bonded Debt
City of Redlands
Ratio of General Bonded Debt Outstanding
(In Thousands, except Per Capita)
As a result of the dissolution of the redevelopment agency in 2012, the outstanding $30,150,000 indebtedness of the former redevelopment agency was transferred to the Successor Agency. As of 6/30/2023, that indebtedness has been fully satisfied.

Last Ten Fiscal Years
General bonded debt is debt payable with governmental fund resources and general obligation bonds recorded in enterprise funds (of which, the City has none).

Schedule 11
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Net Taxable 2024-2025 Assessed Valuation 14,215,130$
Estimated
Share of
Percentage Outstanding Overlapping
Applicable 1 Debt 06/30/25 Debt
Overlapping Tax and Assessment Debt:

San Bernardino Community College District 13.044% 880,363,439$ 114,834,607$ Redlands Unified School District 56.864% 142,943,512 81,283,399 San Bernardino City Unified School District 0.037% 299,021,967 110,638 City of Redlands Community Facilities District No. 2001-1 100.000% 1,345,000 1,345,000 City of Redlands Community Facilities District No. 2003-1 100.000% 6,015,000 6,015,000 Total Overlapping Tax and Assessment Debt 1,329,688,918 203,588,644 Overlapping General Fund Debt:

San Bernardino County General Fund Obligations 4.152% 100,765,000 4,183,763 San Bernardino County Flood Control District General Fund Obligations 4.152% 37,295,000 1,548,488 San Bernardino City Unified School District (Certificates of Participation) 0.037% 149,245,000 55,221 Redlands Unified School District (Certificates of Participation) 56.864% 21,210,000 12,060,854 Yucaipa-Calimesa Joint Unified School District (Certificates of Participation) 0.688% 42,562,540 292,830 Total Overlapping General Fund Debt 351,077,540 18,141,157 Overlapping Tax Increment Debt (Successor Agencies)
San Bernardino County Inland Valley Tax Allocation Bonds 5.470% 209,565,000 11,463,206 Total Overlapping Tax Increment Debt 209,565,000 11,463,206 Total Gross Overlapping General Fund Debt 560,642,540 29,604,362 Total Gross Overlapping Debt 233,193,006
Direct General Fund Debt:

City of Redlands Pension Obligations 100.000% 4,309,904 4,309,904 Total Direct General Fund Debt 4,309,904
Direct Loan/Capital Lease Debt:

I-Bank Sports Park Lease 100.000% 1,018,576 1,018,576 Finance Purchase Agreements and Leases Payable 100.000% 3,547,198 3,547,198 Lease Liability 100.000% 3,984,583 3,984,583 Subscription Liability 100.000% 97,108 97,108 Total Direct General Fund Debt 8,647,465$ 8,647,465 Total Direct Debt 12,957,369$
Combined Total Direct and Overlapping Debt 2 246,150,375$ 1 The overlapping district's assessed valuation located within the City is divided by the total assessed valuation of the overlapping district. That percentage is multiplied by the total debt outstanding for the overlapping district resulting in the City's share of debt. 2 Excludes tax and revenue anticipation notes, enterprise revenue, and mortgage revenue.

Ratios to 2024-25 Assessed Valuation:

Total Overlapping Tax and Assessment Debt 1.44%
Total Direct Debt ($4,317,402) 0.03%
Combined Total Debt 1.69%
Ratios to Redevelopment Successor Agencies Incremental Valuation ($2,075,927,196) Total Overlapping Tax Increment Debt 0.72%
Sources: Nuemo / MuniServices LLC
California Municipal Statistics, Inc.

Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City of Redlands. The percentage of overlapping debt applicable is estimated by using taxable assessed values. Applicable percentages were estimated by determining the portion of another governmental unit's taxable assessed value that is within the City of Redlands boundaries and dividing it by each unit's total taxable assessed value.

City of Redlands
Direct and Overlapping Governmental Activities Debt
Schedule 12
As of June 30, 2025
This report reflects debt which is being repaid through voter-approved tax indebtedness. It excludes mortgage revenue, tax allocation bonds, interim financing obligations, non-bonded capital lease obligations, and certificates of participation, unless provided by the City of Redlands. 225
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Legal Debt Margin Calculation 2025 2024 2023 2022 2021
Assessed valuation 14,215,130$ 13,154,519$ 12,056,083$ 11,435,815$ 10,985,363$ Conversion percentage 25% 25% 25% 25% 25%
Adjusted assessed valuation 3,553,783 3,288,630 3,014,021 2,858,954 2,746,341 Debt limit percentage 15% 15% 15% 15% 15%
Debt limit 533,067 493,294 452,103 428,843 411,951 Total net debt applicable to limit:

General obligation bonds - - - - - Legal debt margin 533,067$ 493,294 $ 452,103 $ 428,843 $ 411,951 $ Total debt applicable to the limit
as a percentage of debt limit 0.00% 0.00% 0.00% 0.00% 0.00% NOTE:

Source: San Bernardino County Assessor (via HdL, Coren & Cone) City of Redlands
California Municipal Statistics, Inc.

The Government Code of the State of California provides for a legal debt limit of 15% of gross assessed valuation. However, this provision was enacted when assessed valuation was based upon 25% of market value. Effective with the 1981-82 fiscal year, each parcel is now assessed at 100% of market value (as of the most recent change in ownership for that parcel). The computations shown above reflect a conversion of assessed valuation data for each fiscal year from the current full valuation perspective to the 25% level that was in effect at the time that the legal debt margin was enacted b
y the State of California for local governments located within the state.

City of Redlands
Schedule 13
Legal Debt Margin Information
(In Thousands)
Fiscal Year
Last Ten Fiscal Years
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Legal Debt Margin Calculation 2020 2019 2018 2017 2016
10,475,200$ 9,877,091$ 9,342,770$ 8,925,638$ 8,450,257$ Conversion percentage 25% 25% 25% 25% 25%
2,618,800 2,469,273 2,335,693 2,231,409 2,112,564 Debt limit percentage 15% 15% 15% 15% 15%
Debt limit 392,820 370,391 350,354 334,711 316,885 Total net debt applicable to limit:

General obligation bonds - - - - - Legal debt margin 392,820$ 370,391 $ 350,354 $ 334,711 $ 316,885 $ Total debt applicable to the limit
as a percentage of debt limit 0.00% 0.00% 0.00% 0.00% 0.00% (In Thousands)
Fiscal Year
City of Redlands
Schedule 13
Legal Debt Margin Information (Continued)
Last Ten Fiscal Years
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Fiscal Year Less Net
Ended Water Operating Available
June 30 Revenue Expenses Revenue Principal Interest Coverage 2025 - $ - $ - $ - $ - $ N/A 2024 - - - - - N/A 2023 - - - - - N/A 2022 - - - - - N/A 2021 - - - - - N/A 2020 - - - - - N/A 2019 - - - - - N/A 2018 - - - - - N/A 2017 - - - - - N/A 2016 19,566,403 18,802,920 763,483 1,195,000 17,925 * 0.63 Fiscal Year Less Net
Ended Wastewater Operating Available
June 30 Revenue Expenses Revenue Principal Interest Coverage 2025 - $ - $ - $ - $ - $ N/A 2024 - - - - - N/A 2023 - - - - - N/A 2022 - - - - - N/A 2021 - - - - - N/A 2020 - - - - - N/A 2019 - - - - - N/A 2018 9,689,226 7,274,339 2,414,887 990,000 19,800 * 2.39 2017 9,483,891 7,207,159 2,276,732 960,000 58,800 2.23 2016 9,981,677 7,319,389 2,662,288 925,000 91,875 2.62 Fiscal Year Less Net
Ended Solid Waste Operating Available
June 30 Revenue Expenses Revenue Principal Interest Coverage 2025 -$ -$ -$ -$ -$ 0.00 2024 22,070,109 17,987,135 4,082,974 1,660,000 122,500 * 2.24 2023 20,447,864 16,549,875 3,897,989 1,580,000 122,500 2.29 2022 21,106,844 14,161,410 6,945,434 1,500,000 199,500 3.21 2021 19,780,794 13,669,667 6,111,127 1,430,000 272,750 2.82 2020 19,833,178 13,639,644 6,193,534 1,360,000 342,500 3.64 2019 17,996,521 14,518,673 3,477,848 1,290,000 408,750 1.61 2018 15,507,091 11,060,050 4,447,041 1,235,000 465,700 2.05 2017 13,899,757 9,911,432 3,988,325 1,185,000 537,800 2.32 2016 13,974,604 10,437,524 3,537,080 1,145,000 572,150 2.06 NOTE:
* In 2016, the Water Refunding Revenue Bonds Series 2012A matured and were paid in full. * In 2018, the Wastewater Refunding Revenue Bonds Series 2012A matured and were paid in full. * In 2024, the Solid Waste Revenue Bonds Series 2013A matured and were paid in full.

Source: City of Redlands
Note: The City had no outstanding debt secured by pledged revenues as of June 30, 2025. All previously outstanding bonds requiring calculation of pledged-revenue coverage were fully retired in fiscal year 2023-24; therefore, no coverage calculation is required for fiscal year 2024-25.

City of Redlands
Details regarding the City's outstanding debt can be found in the notes to the financial statements. Operating expenses do not include interest or depreciation expenses.

Last Ten Fiscal Years
Pledged Revenue Coverage
Debt Service
Debt Service
Water Revenue Bonds
Wastewater Revenue Bonds
Debt Service
Solid Waste Revenue Bonds
Schedule 14
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Personal Per Capita
Calendar Population Income Personal Unemployment
Year (1) (2) (In Thousands) Income (3) Rate (4)
2024 73,488 3,483,331 $ 47,400 $ 4.1% 2023 72,696 3,702,989 50,938 3.6% 2022 72,259 3,086,832 42,719 5.5% 2021 73,288 2,846,286 38,837 2.9% 2020 71,154 2,607,936 36,652 7.4% 2019 70,952 2,882,851 40,631 3.0% 2018 71,441 2,790,914 39,066 3.2% 2017 70,851 2,494,168 35,203 3.1% 2016 69,211 2,195,442 31,721 3.3% 2015 68,040 2,192,657 32,226 3.0% 2014 69,814 2,243,752 32,139 4.7% Sources: (1) Information presented on the calendar year basis, therefore the most current full year is included. (2) State of California, Department of Finance - Demographic Research Unit (3) U.S Department of Commerce U.S Census Bureau
(4) State of California, Employment Development Department City of Redlands
Schedule 15
Demographic and Economic Statistics
Last Ten Fiscal Years
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Percent of Percent of
Number of Total Number of Total
Employer Employees Employment Employees Employment
Redlands Unified School District* 2,433 6.58% 1,922 5.64% ESRI 2,416 6.53% 2,795 8.20% Redlands Community Hospital 1,847 4.99% 1,535 4.50% Optum (Beaver Medical Group & Epic Mgmt) 1,000 2.70% 1,500 4.40% Amazon Fulfillment Center (Redlands) 526 1.42% 1,300 3.81% City of Redlands 539 1.46% 556 1.63% University of Redlands 471 1.27% 550 1.61% Loma Linda University Behavioral Medicine Ctr. 458 1.24% 360 1.06% Madison Grove Post Acute (Terracina Post Acute) 384 1.04% Kaiser Permanente Medical Offices 328 0.89% The Home Depot 700 2.05%
La-Z-Boy, Inc. 385 1.13%
Total of Top Employers 10,402 28.11% 11,603 34.03% Total Employees in City(1)
37,000 34,100
County "Donut Hole" Employers (2):

Burlington Coat Factory Distribution Center 742 2.01% Amazon Fulfillment Center* 500 1.35% Target Department Store 245 0.66%
Lamps Plus DC & Store 119 0.32%
Kohl's Retail Store 87 0.24%
Total Employees 1,693 4.58%
*Count includes PT/FT, classified, certificated, admin.

NOTES:
(1)Total Employees in City provided by EDD Labor Force Data, represents the total employment of all employers located within City limits.
(2) The City of Redlands fully encapsulates a county pocket containing Citrus Plaza, Mountain Grove Plaza and a significant industrial area which is home to a number of distribution centers and logistics companies.

The City of Redlands has chosen to list some of the significant employers within this area as it is believed to contribute to the financial well being of the city.

Source: MuniServices, LLC / Neumo
2025 2016
City of Redlands
Schedule 16
Principal Employers
Fiscal Year 2025 and Nine Years Prior
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FUNCTION/PROGRAM 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 Full-time employees:

City clerk's office 2 2 2 2 2 - 1 1 1 1 City manager's office 12 14 13 10 7 9 12 12 11 9 Development services 28 27 27 19 18 17 19 21 22 22 Finance 35 33 31 28 26 24 27 24 27 26 Fire 70 70 70 65 63 62 63 61 60 60 Human resources 14 13 12 11 9 7 9 9 10 8 Library 24 24 23 20 11 18 20 18 17 17 Management information systems - - - - - - - - - - Department of Innovation & Tech 17 16 15 12 9 12 12 10 9 10 Municipal utilities and engineering:

Administration/Engineering 24 26
41 36 26 30 29 33 34 34 Water 49 48 47 48 45 48 50 50 49 49 Wastewater 24 22 22 17 21 23 24 24 24 24 Police 148 142 138 134 112 117 130 126 122 122 Facilities & Community Services2
Administration, parks & streets 89 85 67 67 51 63 63 62 56 56 Equipment maintenance 8 4 5 5 10 4 4 5 5 5 Solid waste 50 49 44 42 38 39 39 33 33 33 Cemetery 5 5 5 4 4 4 4 4 4 4 599 580 562 520 452 477 506 493 484 480 Part-time employees 34 40 40 51 39 43 68 90 87 87 At-will employees - - - - 10 - - - - - Grant-funded employees
1 3 3 1 1 1 1 7 7 10 10 Limited Term Position - - - - 1 - - 4 1 1 636 623 603 572 503 521 581 594 582 578 1 Includes both full & part time positions.
2 Prior to Fiscal Year 2018, the Facilities & Community Services Department was referred to as the Quality of Life Department Reorganizations in 2008 and 2016 created new departments, moved divisions and transferred employees. Historical data has been changed to reflect some but not all of these reorganizations.

Source: City of Redlands Budget
Fiscal Years
City of Redlands
Schedule 17
Full Time Equivalent City Government Employees by Function Last Ten Fiscal Years
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FUNCTION/PROGRAM 2025 2024 2023 2022 2021
Police:

Calls for service 35,343 35,478 38,502 44,746 44,259
Emergency calls for service 1 506 539 665 68,761 649
Citations issued 6,103 4,275 2,685 2,135 4,239
Fire:

Number of incidents 12,057 12,118 11,624 11,386 10,636
Inspections performed 3,123 2,057 1,521 1,688 1,362
Building and safety:

Permits issued 2,987 2,723 3,005 2,764 2,078
Inspections performed 18,063 17,970 18,040 15,613 12,017 Parks and recreation:

Community center attendance 41,845 36,700 31,069 28,245 13,645 Senior center attendance 32,124 28,588 19,539 17,763 5,822 Joslyn center attendance2 12,481 6,810 0 870 1,206
Youth sports attendance 35,124 34,392 34,392 31,266 4,774 Adult sports attendance 24,122 7,945 7,945 7,223 6,524
Water:

Number of services 23,026 22,882 22,744 22,639 22,537
Average daily consumption
(thousands of gallons) 21,930 20,445 20,487 29,317 22,560 Solid waste:

Recycled materials (tons) 26,015 26,664 21,809 23,307 24,703 Refuse disposed (tons) 51,743 50,417 49,625 47,567 61,631 Library:

Number of volumes 151,364 150,558 152,448 149,577 148,652 1 Except for in FY 2021-22, this number indicates the total number of priority 1 calls received only. In FY 2021-22, it encompassed all levels. 2 In FY 2022-23 , the Joslyn Senior Center was closed for the duration of fiscal year for renovations.

Source: City of Redlands
Fiscal Years
City of Redlands
Schedule 18
Operating Indicators by Function/Program
Last Ten Fiscal Years
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FUNCTION/PROGRAM 2020 2019 2018 2017 2016
Police:

Calls for service 1 52,520 52,914 54,370 40,159 47,488
Emergency calls for service 1 808 815 708 517 578
Citations issued 1 6,837 5,449 7,347 5,299 7,062
Fire:

Number of incidents 10,789 10,760 10,684 10,484 10,169
Inspections performed 1 6,429 5,821 4,075 2,827 2,186
Building and safety:

Permits issued 2,159 2,111 2,408 2,110 1,947
Inspections performed 11,211 9,431 9,381 10,015 8,293
Parks and recreation:

Community center attendance 45,022 48,500 51,000 44,725 42,625 Senior center attendance 20,175 25,109 24,970 24,415 28,675 Joslyn center attendance 18,257 22,679 20,498 21,554 23,795 Youth sports attendance 10,032 12,396 12,870 12,271 11,521 Adult sports attendance 2,480 3,200 1,800 2,830 5,760
Water:

Number of services 22,380 22,440 22,113 22,378 21,842
Average daily consumption
(thousands of gallons) 25,926 26,670 30,328 20,989 18,679 Solid waste:

Recycled materials (tons) 23,952 25,474 23,758 22,287 22,805 Refuse disposed (tons) 52,476 51,769 51,798 52,527 52,826 Library:

Number of volumes 146,379 146,173 144,173 144,887 144,122 Source: City of Redlands
Fiscal Years
City of Redlands
Schedule 18
Operating Indicators by Function/Program (Continued)
Last Ten Fiscal Years
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FUNCTION/PROGRAM 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 Police:

Stations 2 1 1 1 1 1 1 1 1 1 Sub-stations 2 1 1 1 1 1 1 2 2 2 Fire:

Fire stations 4 4 4 4 4 4 4 4 4 4 Public works:

Streets (miles) 304 302 302 300 300 368 368 368 319 316 Traffic signals (city-owned) 74 74 74 73 73 73 72 69 68 68 Parks and recreation:

Parks (acreage) 315 313 313 333 333 333 327 295 295 295 Groves (acreage) 184 184 184 199 199 199 180 164 164 159 Community centers 3 3 3 3 3 3 3 3 3 3 Water:

Water mains (miles) 431 427 427 400 400 388 388 388 385 386 Maximum daily production capacity
(thousands of gallons) 65,300 56,500 34,900 34,900 34,900 55,000 55,000 55,000 55,000 55,000 Non Potable Water:

Water mains (miles) 27 34 34 34 34 34 34 34 34 33 Maximum daily production capacity
(thousands of gallons) 13,750 5,600 4,100 4,100 4,100 14,000 4,500 4,500 4,500 4,500 Wastewater:

Sewers (miles) 250 250 250 247 247 245 245 245 245 245 Daily capacity of wastewater plant
(thousands of gallons) 9,500 9,500 9,500 9,500 9,500 9,500 9,500 9,500 9,500 9,500 Solid waste:

Landfill (city-owned) 1 1 1 1 1 1 1 1 1 1 Library:

Public library 1 1 1 1 1 1 1 1 1 1 Source: City of Redlands
City of Redlands
Schedule 19
Capital Asset Statistics by Function/Program
Last Ten Fiscal Years
Fiscal Year
Source: Various City Departments 234
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6 Hutton Centre Drive, Suite 1200
Santa Ana, California 92707
December 18, 2025
To the Honorable Mayor and Members of the City Council
of the City of Redlands
Redlands, California
We have audited the financial statements of the governmental activiti es, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Redlands (the “City”) for the year ended June 30, 2025, and have issued our report thereon dated December 18, 2025. Professional standards require that we provide you with information about our responsibilities unde r generally accepted auditing standards, Government Auditing Standards and the Uniform Guidance, as well as cer tain information related to the scope and timing of our audit. We have communicated such information in our letter to you dated Ma y 1, 2025. Professional standards also require that we communicate to you the following information related to our audit.

Significant Audit Matters
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant a ccounting policies used by the City are described in Note 1 to the basic financial statements.

New Accounting Standards
• In June 2022, GASB issued Statement No. 101, Compensated Absences. The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated
absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. Implementation of this Statement had a significant effect on the City's financial statements for the fiscal year ended June 30, 2025, which resulted in a restatement of beginning net position as discussed in Note 19 of the Annual Comprehensive Financial Report.
• In December 2023, GASB issued Statement No. 102, Certain Risk Disclosures. This Statement requires a government to assess whether a concentration or constraint makes the primary government reporting unit or other reporting units that report a liability for revenue debt vulnerable to the risk of a substantial impact.

Additionally, this Statement requires a government to assess whether an event or events associated with a concentration or constraint that could cause the substantial impact have occurred, have begun to occur, or are more likely than not to begin to occur within 12 months of the date the financial statements are issued.

Implementation of this Statement did not have a significant effect on the City's financial statements for the fiscal year ended June 30,
2025.

We noted no other new accounting policies were adopted an d the application of existing policies was not changed during 2025. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.

Accounting Estimates
Accounting estimates are an integral part of the financ ial statements prepared by management and are based on management’s knowledge and experience about past and current events and assum ptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financia l statements and because of the possibility that future events affecting them may differ significantly from those expected.

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To the Honorable Mayor and Members of the City Council
of the City of Redlands
Redlands, California