Staff Report - Fiscal Year 2021/22 Annual Comprehensive Financial Report (ACFR) — Budget and Audit Committee, April 4, 2023 (part 1 of 2)

City of Sacramento
Budget and Audit Committee Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2023-00326 4/4/2023 Consent Item 6.

Fiscal Year 2021/22 Annual Comprehensive Financial Report (ACFR) File ID: 2023-00326
Location: Citywide.

Recommendation: Pass a Motion: 1) accepting the Fiscal Year (FY) 2021/22 Annual Comprehensive Financial Report (ACFR); and 2) and forwarding to the City Council for approval.

Contact: Osvaldo Lopez, Finance Manager, (916) 808-4740, [email protected]; Leyne Milstein, Assistant City Manager, (916) 808-8491, [email protected], Department of Finance.

Presenter:None.

Attachments:
1-Description/Analysis
2-Resolution
3-FY2021/22 ACFR
4-FY2021/22 Auditor’s Letter on ACFR
5-FY2021/22 Auditor’s Report on Internal Control Over Financial Reporting Description/Analysis
Issue Detail: The City’s FY2021/22 Annual Comprehensive Financial Report (ACFR) presents the City’s financial condition and the results of activities for the fiscal year that ended June 30, 2022. An independent public accounting firm, Macias, Gini & O’Connell LLP, has audited the ACFR financial statements, as required by the Sacramento City Charter section 117.

Overview of Report
· The City prepared the ACFR to present financial information in a standard format prescribed by the Government Finance Officers Association.

Page 1 of 8 ends

File ID: 2023-00326 4/4/2023 Consent Item 6.
· The ACFR is organized as follows:
· An Introductory Section with a transmittal letter summarizing economic conditions, budget initiatives and other information.
o A Financial Section which begins with Management’s Discussion and Analysis (MD&A), a narrative overview, analysis of the financial statements, and comments on the City’s financial outlook. The basic financial statements follow the MD&A and report the financial position and the results of the operations of the City as a whole, and the financial performance of the City’s major funds.

Footnotes to the financial statements are included to provide additional information. Finally, combining fund financial statements are presented to provide additional financial details of the City’s activities. o A Statistical Section with selected financial, demographic, and operating trend information.
· In FY2021/22 the City implemented five new accounting and financial reporting standards issued by the Governmental Accounting Standards Board (GASB) in the ACFR:
· Statement No. 87, Leases.
· Statement No. 92, Omnibus 2020.
· Statement No. 93, Replacement of Interbank Offered Rates. · Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans - and amendment of GASB Statement No. 14 and No. 84, and a supersession of GASB Statement No. 32.
· Statement No. 99, Omnibus 2022.

General Fund FY2021/22 Financial Results
· Net Results
The following schedule summarizes the FY2021/22 net budgetary results which resulted in $13 million in resources above budget:

Page 2 of 8 ends

File ID: 2023-00326 4/4/2023 Consent Item 6.

FY2021/22 General Fund Summary $ in 000s
Major Tax Revenues
Property 8,073$
Sales 10,657
Utility user 2,461
Real property transfer 2,713
Other taxes (BOT/TOT) 3,065
Subtotal Major Tax Revenue 26,969
Department operations 9,352
Other Citywide revenue/expenditure results (4,848)
Unrealized investments fair market loss (19,944)
Release of previous years encumbrances 1,479
Unassigned Fund Balance 1
13,008$
1 FY2021/22 Unassigned Fund Balance as represented in this chart reflects the General Fund activities/results for the current fiscal year and does not include unassigned fund balance from prior fiscal year. The total unassigned fund balance for General fund as of 6/30/2022, including new and previous resources, was approximately $22.253 million. General Fund for FY2021/22 was combined with fund 1003 ARPA reinvestment Fund, this new fund also carried an unassigned amount of $21.827 million (see page 26 of the ACFR for additional information). · Revenue
Total General Fund revenue exceeded the FY2021/22 Approved Budget as amended by $20.7 million. Tax revenue was $27 million higher than the budget projections, a variance of 6%. Property taxes ended higher than projected by $8.1 million, the result of increases in market value and activity. Other taxes, including sales and use tax, property transfer, utility user, business operations, and transient occupancy taxes ended higher than projected by $18.9 million. Intergovernmental revenue was $7.0 million higher than the budget projection mainly due to more federal reimbursement for fire emergency medical services. Charges for services were $1.1 million higher than the budget projection due to higher-than-expected auto dealership share revenue. Please refer to page 32 of the ACFR for the budget to actual comparison.

The General Fund Economic Uncertainty Reserve (EUR) for the General Fund increased from $58.9 million to $61.3 million as of June 30, 2022.
· Expenditures
Most operating departments ended FY2021/22 within their budgeted operating expenditure authority. The Fire and Police departments were the only exceptions. Details on departments’ year-end results are provided in the chart below.

Page 3 of 8 ends

File ID: 2023-00326 4/4/2023 Consent Item 6.

Departments that had significant variances between budget and year-end results have provided the following explanations:

Treasurer - Positive results are primarily due to a combination of additional revenue generated for managing cash balances related to Measure U, Coronavirus Aid, Relief, and Economic Security Act (CAREs) and American Rescue Plan Act (ARPA) as well as labor savings from vacant positions and service and supply savings.

Community Development - Positive results are primarily due to a combination of labor savings from vacant positions, reimbursement from staff charging to projects, and service and supply savings.

Finance - Positive results are primarily due to higher-than-expected revenue related to unclaimed property and savings from vacant positions.

Fire - Negative results are primarily due to unexpected overtime in excess of labor savings.

Page 4 of 8 ends

File ID: 2023-00326 4/4/2023 Consent Item 6.

Police - Negative results are primarily due to unexpected overtime in excess of labor savings.

Public Works - Positive results are primarily due to higher than anticipated revenue associated with parking enforcement and parking meter collections and labor savings due to vacancies.

Measure U Fund FY2021/22 Financial Results
· Net Results
The following schedule summarizes the FY2021/22 net budgetary results which resulted in $10.9 million in resources above budget:

FY2021/22 Measure U Fund Summary $ in 000s
Measure U sales taxes 9,017$
Department operations 6,630
Other Citywide revenue/expenditure results (345)
Unrealized investments fair market loss (4,372)
Unassigned Fund Balance
1 10,930$
2 FY2021/22 Unassigned Fund Balance as represented in this chart reflects the Measure U Fund activities/results for the current fiscal year and does not include unassigned fund balance from prior fiscal year. The total unassigned fund balance for Measure U fund as of 6/30/2022, including new and previous resources, was approximately $16.335 million. · Revenue
Total Measure U Fund revenue exceeded the FY2021/22 Approved Budget as amended by $9 million. The positive revenue variance was due to higher than anticipated retail transactions at higher prices due to a spike in gas prices and overall inflationary price increases.

The Economic Uncertainty Reserve (EUR) for the Measure U Fund increased from $.45 million to $1.05 million as of June 30, 2022.
· Expenditures
All operating departments ended FY2021/22 within their budgeted operating expenditure authority. Details on departments’ year-end results are provided in the chart below. Only departments that received Measure U funding are included in the chart.

Department
Results
($ in 000s)
Mayor/Council 119$
City Manager 1,650
City Attorney -
Community Development 2,432
Community Response 11
Convention and Cultural Services -
Fire 331
Human Resources -
Information Technology -
Youth, Parks, and Community Enrichment -
Police 2,087
Public Works -
Total Results 6,630$

Page 5 of 8 ends

File ID: 2023-00326 4/4/2023 Consent Item 6.

City Manager - Positive results are primarily due labor savings from vacant positions and service and supply savings.

Community Development - Positive results are primarily due to a combination of labor savings from vacant positions, reimbursement from staff charging to projects and service and supply savings.

Police - Positive results are primarily due to labor savings from vacant positions and service and supply savings.

Auditor’s Letter to the City Council
The auditor’s letter to the City Council is additional communication required by audit standards which conveys that there were no difficulties encountered performing the audit or disagreements between the auditors and City staff. The letter also includes information about significant estimates and footnote disclosures included in the financial statements.

Refer to attachment 4 for additional information.

Policy Considerations: This report is required by the City Charter, federal and state grant requirements, and bond covenants.

Economic Impacts: None.

Page 6 of 8 ends

File ID: 2023-00326 4/4/2023 Consent Item 6.

Environmental Considerations: Not applicable.

California Environmental Quality Act (CEQA): This action is not a project subject to CEQA because it involves only organizational or administrative activities that will not result in direct or indirect physical changes in the environment (CEQA Guidelines §15378(b)(5)).

Sustainability: Not applicable.

Commission/Committee Action: None.

Rationale for Recommendation: It is in the best interest of the City to accept the FY2021/22 ACFR and the auditor’s letter to the City Council for the following reasons:
· The annual audit is required by section 117 of the Sacramento City Charter, federal and state grant requirements, and bond covenants.
· The public accounting firm of Macias Gini & O’Connell LLP has audited the City’s FY2021/22 financial statements and has rendered its unmodified opinion that the financial statements are fairly presented in accordance with generally accepted accounting principles.
· The auditor’s letter to the City Council reflects no significant audit issues or disagreements with management in connection with this audit.

Financial Considerations: General Fund and Measure U budgetary results for the fiscal year that ended June 30, 2022, resulted in one-time resources in the amount of approximately $38.59 million.

However, it is important to note that with the June 14, 2022, adoption of the FY2022/23 Approved Budget Council authorized the expenditure of $8.1 million of anticipated year end resources and has since then authorized an additional $12.6 million in expenditures also funded from year end resources as outlined in the chart below. Remaining resources will be allocated during the development of the FY2023/24 budget.

Report continues on next page.

FY22 Year End with FY23 June Budget Reso$ in 000's
Prior year carryover into fund balance* 9,245
GFY22 YE Operating Results 12,880
MU FY22 YE Operating Results 11,702
FY22/23 Budget Reso: Library Grant Match (7,800)
FY22/23 Budget Reso: Riverfront MYOP (325)
Remaining FY22 with FY23 Expenditures25,702
Council Approved Actions
Election Deferral Staff (569)
Impact Fee Waiver Reimbursement (9,944)
SCXEA PD/Fire (379)
L522 (1,693)
L522 FY22 paid in FY23* (2,612)
Total Council Approved Actions(15,197)
Remaining FY22 Year End Resources10,505
FY23 Budgeted Resources
FY23 Beginning Fund Balance 4,761
FY23 Ending Fund Balance 2,359
Available as of 3/20/23 17,625

Page 7 of 8 ends

File ID: 2023-00326 4/4/2023 Consent Item 6.

FY22 Year End with FY23 June Budget Reso
Prior year carryover into fund balance* 9,245
GFY22 YE Operating Results 12,880
MU FY22 YE Operating Results 11,702
FY22/23 Budget Reso: Library Grant Match (7,800)
FY22/23 Budget Reso: Riverfront MYOP (325)
Remaining FY22 with FY23 Expenditures
Council Approved Actions
Election Deferral Staff (569)
Impact Fee Waiver Reimbursement (9,944)
SCXEA PD/Fire (379)
L522 (1,693)
L522 FY22 paid in FY23* (2,612)
Total Council Approved Actions(15,197)
Remaining FY22 Year End Resources10,505
FY23 Budgeted Resources
FY23 Beginning Fund Balance 4,761
FY23 Ending Fund Balance 2,359
Available as of 3/20/23 17,625
Local Business Enterprise (LBE): No goods or services are being purchased under this report.

Page 8 of 8 ends

25,702
$ in 000's
RESOLUTION NO.

Adopted by the Sacramento City Council
FISCAL YEAR 2021/22 ANNUAL COMPREHENSIVE FINANCIAL REPORT

BACKGROUND
A. The City’s Fiscal Year (FY) 2021/22 Annual Comprehensive Financial Report (ACFR) was prepared to present the City’s financial condition and the results of its activities for the fiscal year ended June 30, 2022. The ACFR financial statements were audited, as required by the City Charter, by an independent public accounting firm.

B. The public accounting firm of Macias Gini & O’Connell LLP audited the City’s FY 2021/22 financial statements and rendered its unmodified opinion that the financial statements are fairly presented in accordance with generally accepted accounting principles.

C. The General Fund’s budgetary results and Measure U Fund’s budgetary results for the fiscal year ended June 30, 2022, provided $38.59 million in one-time resources.

D. The auditor’s letter to the City Council reflects no significant audit issues or disagreements with management in connection with this year’s audit.

BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:

Section 1. The City Council accepts the FY2021/22 Annual Comprehensive Financial Report, attached hereto as Exhibit A.

Section 2. The City Council accepts the auditor’s letter to the City Council dated, December 19, 2022, attached hereto as Exhibit B.

Section 3. Exhibit A and B are part of this resolution.

Table of Contents:

Exhibit A Annual Comprehensive Financial Report
Exhibit B Auditor’s letter to City Council
CityofSacramento.org
Annual Comprehensive
Financial Report
FISCAL YEAR ENDED JUNE 30, 2022

CITY OF SACRAMENTO FACTS
The City of Sacramento was founded in 1849 and
is the oldest incorporated city in California.

In 1920, city voters adopted a Charter (municipal
constitution) and a City Council/City Manager form
of government.

The City is divided into eight districts.

Elected members of the City Council serve a four-
year term.

The Mayor is elected by all voters in the City. In
2002, voters approved a measure for the Mayor
t
o serve full-time. All other Councilmembers are
elected by district and serve part-time.

The Mayor and other Councilmembers have an
equal vote in all matters.

The City of Sacramento currently encompasses
approximately 100 square miles.

The current estimated population is 518,037, from
the State of California, Department of Finance as of
January 2022.

DARRELL STEINBERG

Mayor

ANGELIQUE ASHBY
Vice Mayor, District 1

SEAN LOLOEE
Councilmember, District 2

JEFF HARRIS
Councilmember , District 3

KATIE VALENZUELA
Councilmember, District 4

JAY SCHENIRER

Councilm ember, District 5

ERIC GUERRA
Mayor Pro Tempore, District 6

RICK JENNINGS, II
Councilmember, District 7

MAI VANG

Councilmember, District 8
CITY OF SACRAMENTO, CALIFORNIA | 2022 ANNUAL COMPREHENSIVE FINANCIAL REPORT

CITY OF SACRAMENTO, CALIFORNIA
City of Sacramento
California
Annual Comprehensive
Financial Report
Fiscal Year Ended June 30, 2022
Prepared by the Department of Finance,
Accounting Division
Emily Combs, F
inance Director
Osvaldo Lopez, Finance Manager
Principal/Senior Accountant Auditors
Sharina Bali
Emily Hsia Susan Nazari
Doreen Chia
Svetlana Donkova
Thomas Keegan
Bilal Malik
Ray Tang
Juliana Won
g
Jennifer Gilbertson Rona Mao

CITY OF SACRAMENTO, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
For the Fiscal Year Ended June 30, 2022

TABLE OF CONTENTS
INTRODUCTORY SECTION (Unaudited) PAGE
Letter of Tran smittal .............................................................................................................................................. i Organization Chart ............................................................................................................................................... v Directory of City Officials ..................................................................................................................................... vi GFOA Certificate ................................................................................................................................................. vii

FINANCIAL SECTION
Independent Auditor’s Rep ort .............................................................................................................................. 1 Management’s Discussion and Analysis (Required Supplementary Information - Unaudited) ........................ 5

BASIC FINANCIAL STATEMENTS
Government-wide Financial Statements:

Statement of Net Position ............................................................................................................................. 19 Statement of Activities ................................................................................................................................... 20 Fund Financial Statements:

Balance Sheet - Governmental Funds ......................................................................................................... 24 Reconciliation of the Balance Sheet to the Statement of Net Position – Government al Funds ............................................................................................................................... 26 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds ............. 28 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities – Governmental Funds ............................................... 30 Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual (Non-GAAP Budgetary Basis) with Budget to GAAP Reconciliation – General Fund .......................................................................................................................................... 32 Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual (Non-GAAP Budgetary Basis) with Budget to GAAP Reconciliation – Measure U Fund ...................................................................................................................................... 33 Statement of Net Position – Proprietary Funds ............................................................................................ 34 Statement of Revenues, Expenses and Changes in Net Position – Proprietary Funds ............................ 38 Statement of Cash Flows – Proprietary Funds ............................................................................................ 40 Statement of Fiduciary Net Position – Fiduciary Funds ............................................................................... 44 Statement of Changes in Fiduciary Net Position – Fiduciary Funds ........................................................... 45 Notes to the Basic Financial Statements ........................................................................................................... 47 REQUIRED SUPPLEMENTARY INFORMATION (Unaudited)
Schedule of Changes in Net Pension Liability and Related Ratios – CalPERS Miscellaneous Plan ........... 116 Schedule of Contributions – CalPERS Miscellaneous Plan ........................................................................... 118 Schedule of Changes in Net Pension Liability and Related Ratios – CalPERS Safety Plan ........................ 120 Schedule of Contributions – CalPERS Safety Plan ........................................................................................ 122 Schedule of Changes in Net Pension Liability and Related Ratios – Sacramento City Employees’ Retirement System ..................................................................................... 124 Schedule of Contributions – Sacramento City Employees’ Retirement System ........................................... 126 Schedule of Changes in Net OPEB Liability and Related Ratios ................................................................... 128 Schedule of Contributions – OPEB ................................................................................................................. 129

CITY OF SACRAMENTO, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
For the Fiscal Year Ended June 30, 2022
TABLE OF CONTENTS, Continued

COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES PAGE Other Governmental Funds
Combining Balance Sheet .............................................................................................................................. 131 Combining Statement of Revenues, Expenditures and Changes in Fund Balances………….……………..132 Other Special Revenue Funds:

Combining
Balance Sheet .................................................................................................... 134 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ......... 136 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual, Transportation and Development Special Revenue Fund ..... 138 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual, Culture and Leisure Special Revenue Fund .......................... 139 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual, Parks and Recreation Special Revenue Fund ....................... 140 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual, CCOMWP Special Revenue Fund ......................................... 141 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual, Special Districts Special Revenue Fund ................................ 142 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual, Cal EPA Special Revenue Fund ............................................. 143 Other Debt Service Funds:

Combining
Balance Sheet .................................................................................................... 146 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ......... 148 Other Capital Projects Funds:

Combining
Balance Sheet .................................................................................................... 152 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ......... 154 Permanent Funds:

Combining Balance Sheet .................................................................................................... 157 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ......... 158 Other Proprietary Funds
Other Enterprise Funds:

Combining
Statement of Net Position .................................................................................. 160 Combining Statement of Revenues, Expenses and Changes in Net Position ................... 163 Combining
Statement of Cash Flows ................................................................................... 164 Water Fund:

Combining
Schedule of Net Position .................................................................................... 168 Combining Schedule of Revenues, Expenses and Changes in Net Position .................... 172 Combining
Schedule of Cash Flows .................................................................................... 174 Wastewater Fund:

Combining
Schedule of Net Position .................................................................................... 180 Combining Schedule of Revenues, Expenses and Changes in Net Position .................... 184 Combining
Schedule of Cash Flows .................................................................................... 186

CITY OF SACRAMENTO, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
For the Fiscal Year Ended June 30, 2022
TABLE OF CONTENTS, Continued
Other Proprietary Funds P A G E
Community Center Fund:

Combining
Schedule of Net Position .................................................................................... 192 Combining Schedule of Revenues, Expenses and Changes in Net Position .................... 194 Combining
Schedule of Cash Flows .................................................................................... 196 Internal Service Funds:

Combining
Statement of Net Position .................................................................................. 202 Combining Statement of Revenues, Expenses and Changes in Net Position ................... 205 Combining
Statement of Cash Flows ................................................................................... 206 Custodial Funds:

Combining
Statement of Fiduciary Net Position .................................................................. 209 Combining
Statement of Changes in Fiduciary Net Position .............................................. 210 STATISTICAL SECTION (Unaudited)
Net Position by Component – Last Ten Fiscal Years........................................................................ 212 Changes in Net Position – Last Ten Fiscal Years ............................................................................. 214 Fund Balances, Governmental Funds – Last Ten Fiscal Years ....................................................... 220 Changes in Fund Balances, Governmental Funds – Last Ten Fiscal Years ................................... 222 Tax Revenues by Source, Governmental Funds – Last Ten Fiscal Years ...................................... 224 Assessed Value and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years .......... 225 Direct and Overlapping Property Tax Rates – Last Ten Fiscal Years .............................................. 226 Principal Property Taxpayers – Current Fiscal Year and Nine Years Ago ....................................... 227 Property Tax Levies and Collections – Last Ten Fiscal Years ......................................................... 228 Ratios of Outstanding Debt by Type – Last Ten Fiscal Years .......................................................... 230 Ratios of Net General Bonded Debt Outstanding – Last Ten Fiscal Years ..................................... 232 Direct and Overlapping Governmental Activities Debt – As of June 30, 2022 ................................. 233 Legal Debt Margin – Last Ten Fiscal Years ...................................................................................... 234 Pledged-Revenue Coverage – Last Ten Fiscal Years ...................................................................... 236 Demographic and Economic Statistics for Sacramento County – Last Ten Years .......................... 238 Principal Employers – Current Fiscal Year and Nine Years Ago ...................................................... 239 Successor Agency Trust Fund – Assessed Value of Taxable Property – Last Ten Fiscal Years .......................................................................................................... 240 Successor Agency Trust Fund – Top 10 Parcels Appealing Assessed Valuation - At Risk of Reduction - As of June 30, 2022 ......................................................................... 244 Successor Agency Trust Fund – Principal Property Taxpayers – Current Fiscal Year and Nine Years Ago ............................................................................ 255 Successor Agency Trust Fund – Debt Coverage Analysis –
Las
t Ten Fiscal Years .......................................................................................................... 266 Full-time Equivalent Employees by Function/Program – Last Ten Fiscal Years ............................. 271 Operating Indicators by Function/Program – Last Ten Fiscal Years ............................................... 272 Capital Asset Statistics by Function/Progr am – Last Ten Fiscal Years ........................................... 273 Miscellaneous Statistics - Current Fiscal Year and Nine Years Ago ................................................ 274 Introductory
Section

Howard Chan
City Ma
nager
City Hall
915 I Street, Fifth Floor
Sacramento, CA 95814-2604
916-808-5704
December 19, 2022
Honorable Mayor and City Council
City of Sacramento, California:

Dear Mayor and Members of the City Council:

We are pleased to present the Annual Comprehensive Financial Report (ACFR) for the City of Sacramento, California (City) for the fiscal year ended June 30, 2022. Article IX of the City Charter and federal and state law requires that the City issue an annual report on its financial position and activity, and that the report be audited by an independent firm of certified public accountants.

Macias Gini & O’Connell LLP, a national certified public accounting firm, performed the audit for the fiscal year ended June 30, 2022. Their unmodified (“clean”) opinion has been included as the first component of the financial section of the ACFR.

Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal controls that have been established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable rather than absolute assurance that the financial statements are free of any material misstatements.

Management’s discussion and analysis (MD&A) immediately following the independent auditor’s report provides a narrativ e introduc tion, overview, and analysis of the basic financial statements. The MD&A complements this transmittal letter and should be read in conjunction with it.

PROFILE OF THE CITY
The City of Sac ramento, capital of the State of California, was established in 1849. The sixth largest city in California based on population, Sacramento also serves as the seat of Sacramento County government. The State of California Department of Financ e estimated the population on January 1, 2022, at 518,037 for the City and 1,576,618 for the County. Encompassing approximately 100 square miles, the City is located in the northern section of California’s Central Valley at the confluence of the Sacramento and American rivers. i
Sacramento is a charter city operating under a Council-Manager form of government. The City provides a full range of municipal services in cluding police, fire, emergency medical response, water, wastewater, storm drainage, solid waste, construction and maintenance of streets and parks, community development, recreational and cultural activities, economic development, and administrative services.

REPORTING ENTITY
This ACFR
presents the financial status of the City and its four component units. Component units are separate legal entities included in this report due to significant operational or financial relationships with the City as defined below:
 Sacramento City Financing Authority (SCFA) and Sacramento Public Financing Authority (SPFA) are entities created to issue debt to fina nce City projects. The financial statements for these entities are reported on a blended ba
sis as part of the primary government because the governing boards are composed of all City Councilmembers.
 Sacramento City Employees’ Retireme
nt System (SCERS) , a single
employer pension plan for certain City employees and retirees, is reported as a
fiduciary component unit. The SCERS pension plan was closed to new enrollment of employees in
1977.
 Successor Agency to the Redevelopment Agency of the City of Sacramento (
RASA) was created to serve as the custodian for the assets a nd to win
d down the affairs of the former Redevelopmen t Agency of the City of Sacramento. RASA is reported as a fiduciary component unit.

BUDGET INFORMATION
The City Charter requires that the City Manager submit a proposed budget to the City Council (Council) at
least 60 days prior to the start of each fiscal year. Once approved by Council, the annual budget serves as the foundation for the City‘s financial planning, control and reporting.

Budgetary control is maintained at the department level by fund. Budgetary control for multi-year projects is maintained at the individual project level by fund. The City Manager is authorized to administratively amend the budget during the year for transactions up to $250 thousand without Council approval. Additional budgetary information can be found in Note 1 to the financial statements and on the City’s website.

LOCAL ECONOMY
The regional economy and employment base continue its long-term transition from a state government concentration to a diverse economic base including health care providers, high-tech manufacturers, software development companies, biotechnology and medical research laboratories, food processors, and medical equipment manufacturers. The region is also a transportation hub served by air cargo airports, an international airport, a deep-water shipping port, two major interstate freeways, freight and passenger rail lines, and an extensive regional commuter bus and light-rail system. These key industries interface with Sacramento’s service, hospitality and government employers.
ii
While the public health emergency related to the global COVID-19 pandemic has presented unprecedented challenges, our local government and healthcare-based economy is expected to continue its economic recovery through 2022. As of June 2022, unemployment for the Sacramento metropolitan area was 3.4% compared to 6.9% a year earlier. The efforts in FY2019/20 to curb the transmission of the COVID-19 virus had a negative impact on the City’s revenues. The economy rebounded in FY2020/21 and growth continued into FY2021/22; however, with inflation reaching a decades high rate of over 9% in June 2022, a looming recession could negatively impact future City revenues as early as 2023.

BUDGET INITIATIVES AND LONG-TERM FINANCIAL PLANNING

Along with other state and local agencies across the country, the City faced extraordinary budget challenges due to the COVID-19 pandemic. The unprecedented event had a negative effect on the City’s revenues and while the City is experiencing a faster recovery than previously anticipated, some revenue streams like parking and Transient Occupancy Taxes (hotel taxes) remain below pre-pandemic levels. The FY2022/23 Operating, and Capital Improvement Program (CIP) Budgets (Approved Budget) were approved on June 14, 2022, and total approximately $1.4 billion from all funding sources. The Approved Budget provides for ongoing funding for the Department of Community Response to continue to implement the City’s response to homelessness, expands Recycling and Solid Waste services and funding to implement the second year of the Fire Department’s Diversity Outreach and Recruitment program and includes adjustments required to realize efficiencies and provide the funding necessary to deliver programs and services in the coming fiscal year.

The financial forecasts presented in the FY2022/23 Budget are based on in-depth analysis and review of Department revenues to ensure that the forecast is based on the most current information available relative to economic indicators and estimated levels of recovery.

RELEVANT FINANCIAL POLICIES

The City maintains a General Fund Economic Uncertainty Reserve (EUR) for the purpose of bridging a gap between projected revenue and expenditures during periods of significant revenue declines and/or expenditure growth and to ensure the City has adequate resources in case of emergency or unforeseen events. Pursuant to Counc il’s adopted policy, the City w ill maintain an EUR at a minimum of 10% of budgeted General Fund revenues. In addition, the City will seek to achieve and maintain a General Fund EUR equal to two months of regular on-going General Fund expenditures, including transfers (i.e., 17% of General Fund expenditures).

On June 12, 2019, the EUR Policy was amended to include Measure U resources in determining the annual set aside amount necessary to maintain a minimum General Fund/Measure U (G/MU) Fund reserve level of 10%. Further, the policy includes a goal of achieving and maintaining the value of two months of regular ongoing G/MU Fund expenditures in the reserve. The current EUR balance is $62 million, which is approximately 8.4% of budgeted FY2022/23 G/MU Fund revenues. The EUR is reported in the ACFR as committed fund balance in the G/MU Fund.

iii

AWARDS AND ACKNOWLEDGEMENTS
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its ACFR for the fiscal year ended June 30, 2021. This marks the 34th consecutive year the City has received this award.

The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports.

To receive this award, the City published an easily readable and efficiently organized ACFR. The report satisfied accounting principles generally accepted in the United States of America and applicable legal requirements. We believe this ACFR also meets the requirements of the program, and we will be submitting it to the GFOA to determine its eligibility for the certificate.

The Department of Finance, Accounting Division in particular, takes great pride in the preparation of the ACFR. The professionalism, commitment, and effort of each employee of the Accounting Division have made this report possible. We also want to thank the other employees in the Finance Department and other City Departments who contributed to the preparation of this report.

Finally, we thank the Mayor and City Council for their continuing interest and support in planning and conducting the City's financial operations in a responsible manner, consistent with the City's mission to protect, preserve and enhance the quality of life for present and future generations.

Respectfully submitted,
Emily Combs
Finance Director
o�&r,;1
Osvaldo Lope
z Cl
Finance Manager
iv
Mayor/Council
City Treasurer
John Colville
City Attorney
Susana Alcala Wood
City Clerk
Mindy Cuppy
City Auditor
Jorge Oseguera
Office Public Safety Accountability
LaTesha Watson
City Manager
Howard Chan
Police
Kathy Lester, Chief
Youth, Parks & Community
Enrichment (YPCE)
Mario Lara
Fire
Leyne Milstein, Acting Chief
Finance
Emily Combs
Information Technology
Maria MacGunigal
City Manager
Reporting Department
Assistant City Manager
Mario Lara
Public Safety
Assistant City Manager
Leyne Milstein
Internal Services
Assistant City Manager
Hector Barron
Municipal Services
Assistant City Manager
Michael Jasso
Community
Community Advocacy & Public Safety
General Council & Advisory
Litigation & Human Resources
Strategic Project & Research
Public Works
Ryan Moore
Utilities
Bill Busath
Community Development
Tom Pace
Convention & Cultural Services
Jody Ulich
Economic Development
Denise Malvetti
Deputy Director
Bids & Contracts
Boards & Commissions
Elections
Legislative Support
Records
Citywide Banking
Debt Management
Investments
Auditing
Research & Analysis
Whistleblower
311 Center
Applications & Data Management
Enterprise Business Systems
Geographic Information Systems
IT Customer Services
Technical Support Services
Technical Administration
ADA & Leaves
Benefits & Retirement
Diversity, Inclusion, & Development
Employment, Classification & Development
Equal Employment Opportunity
Labor Relations/Policies
Risk Management (Safety & Workers’
Com
pensation)
Accounting
Budget, Policy and Strategic Planning
Payroll
Procurement Services
Public Improvement Financing
Revenue
Operations
Investigations
Specialized Services
Emergency Medical Services
Fire Prevention
Fire Suppression
Community Enrichment
Golf Operations (Contracted)
Park Maintenance/Historic Cemetery
Park Rangers
Planning & Development
Youth Division
Engineering Services
Facilities/Real Property Management
Fleet Management
Maintenance Services
Parking Services
Sacramento Marina
Solid Waste
Transportation
Business & Integrated Planning
Engineering & Water Resources
Gov
ernment Affairs
Operations & Maintenance
Public Affairs
Sustainability
Animal Care Services
Building
Business Compliance
Housing & Dangerous Buildings
Neighborhood Code Enforcement
Planning
Community Engagement
Community Investment
Economic Development, Innovation,
& Entrepreneurship
Housing Policy
Workforce Development
Youth Development
Organization Chart as of June 30, 2022
Center for Sacramento History
Crocker Art Museum
Fairytale Town
Metropolitan Arts Commission
Old Sacramento Historic District
Sacramento Convention Center
Sacramento History Museum
Sacramento Zoo
SMUD Museum of Science & Curiosity
Assistant to the City Manager
Amy Williams
Chief of Staff
Media &
Communications
Cannabis

Emergency Management

Governmental
Affairs
Performance
Measures
City Manager
Office or Program
Human Resources
Shelley Banks‐Robinson
Mayor/Council
Charter Office
Mayor/Council
Office or Program
Community Response
Bridgette Dean
Alternative 911 Response
Unsheltered Response and Support
Climate Action & Sustainability

City of Sacramento
Directory of City Officials
June 30, 2022

Darrell Steinberg
Mayor

Angelique Ashby
Vice Mayor, District 1
Jay Schenirer
Councilmember, District 5

Sean Loloee
Councilmember, District 2
Eric Guerra
Mayor Pro Tempore, District 6

Jeff Harris
Councilmember, District 3
Rick Jennings, II
Councilmember, District 7

Katie Valenzuela
Councilmember, District 4
Mai Vang
Councilmember, District 8

Howard Chan
City Manager

Susana Alcala Wood
City Attorney
Mindy Cuppy
City Clerk
John Colville
City Treasurer

vi
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Sacramento
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2021
Executive Director/CEO
vii

THIS PAGE INTENTIONALLY LEFT BLANK
viii
Financial
Section
www.mgocpa.com
Macias Gini & O’Connell LLP
500 Capitol Mall, Suite 2200
Sacramento, CA 95814
Independent Auditor’s Report
To the H
onorable Mayor and Members of the
City Council of the City of Sacramento, California
Repo
rt on the Audit of the Financial Statements
Opini
ons
We have aud
ited the financial statements of the governmental activities, the business- type activities, each major fund, and the aggregate remaining fund information of the City of Sacramento, California (City), as of and for the fiscal year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

In our
opinion, the accompanying financial statements referred to above present fairl y, in all material respects, the respective financial position of the governmental activities, the business- type activities, each major fund, and the aggregate remaining fund information of the C ity, as of June 30, 2022, and the respective changes in finan cial position and, where applicable, cash flows thereof and the respective budgetary comparison for the General Fund and Measure U Special Revenue Fund for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis
for Opinions
We cond
ucted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor ’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Emphas
is of Matter
As dis
cussed in Notes 1 and 6 to the basic financial statements, effective July 1, 2021, the City adopted the provisions of Governmental Accounting Standards Board Statement No. 87, Leases. Our opinions are not modified with respect to this matter.

Resp
onsibilities of Management for the Financial Statements The City’s man
agement is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. 1 In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the C ity’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.

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

In pe
rforming an audit in accordance with GAAS and Government Auditing Standards, we:
• Exe
rcise 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–related matters that we identified during the audit.

Re
quired Supplementary Information
Acco
unting principles generally accepted in the United States of America require that the management ’s discussion and analysis, the schedule of changes in net pension liability and related ratios – CalPERS Miscellaneous Plan, the schedule of contributions – CalPERS Miscellaneous Plan, the schedule of changes in net pension liability and related ratios – CalPERS Safety Plan, the schedule of contributions – CalPERS Safety Plan, the schedule of changes in net pension liability and related ratios – Sacramento City Employees’ Retirement System, the schedule of contributions – Sacramento City Employees’ Retirement System, the schedule of changes in net OPEB liability and related ratios, and the schedule of contributions – OPEB, as listed in the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of 2 financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual fund financial statements and schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with GAAS. In our opinion, the combining and individual fund financial statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

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

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

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 19, 2022, on our consideration of the C ity’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 the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in consid ering the C ity’s internal control over financial reporting and compliance.

Sacramento, California
December 19, 2022
3 TH

IS PAGE INTENTIONALLY LEFT BLANK
4 City of Sacramento
Management’s Discussion and Analysis
(Required Supplementary Information - Unaudited)
For the Fiscal Year Ended June 30, 2022

This section of the City’s Annual Comprehensive Financial Report presents a narrativ e overview and analysis of the City’s financial activities for the fiscal year ended June 30, 2022. City management recommends this information be read in conjunction with the transmittal letter located in the introductory section, and with the City’s financial statements which follow this discussion.

FINANCIAL HIGHLIGHTS
 The City’s General Fund revenue and other financing sources (uses) exceeded expenditures by $88 million in fiscal year 20

22. This is primarily attributable to tax and intergovernmental revenues in excess of expectation for the year.

The City’s General Fund budgetary expenditures were $140 million lower than final budgeted amounts. Most of the General Fund departments reported favorable operating expenditure budget variances and capital outlay exp
enditures were less than budgeted amounts by $29 million due to the multi-year nature of capital projects.

Unspent multi-year project budgets are carried over to the subsequent fiscal year. 
The City’s total government-wide net position increased by $268 million in fiscal year 2022, an 11.4 percent increase.
 The City received $112 million of American Rescue Plan Act (ARPA) funding over the past two year s. In Septembe
r 2021, the City Council approved an ARPA Framework and Priorities. The framework provid es funding
for: small businesses and commercial corridor revitalization; homelessness and housing; yo uth, workfo
rce training, and gang prevention programs; arts and creative economy; and addressing organizational need
s. As of June 30, 2022, $21 million of ARPA reinvestment available funding remains after factoring in budgetary encumbrances and carryovers.

In fiscal year 2022, the City introduced the Department of Community Response (DCR), established to provide an alternati
ve response model for 911 calls that do not require traditional emergency services. The DCR deploys social workers and outreach specialists who are trained to resolve certain crises such as behavioral health, homelessness, youth and family disturbances, school response, and substance use issues.

OVERVIEW OF THE FINA

NCIAL STATEMENTS
The City’s Annual Comprehensive Financial Report co nsists of four main components: (1) management’s discussion and analysis, (2) the basic financial statement s, (3) required supplementary information, and (4) combining nonmajor fund financial statements. The basic financial statements include two kinds of statements that present different views of the City, the government-wide and the fund financial statements.  The government-wide financial statements provide both long-term and short-term information about the City’s ove
rall financial status.
 The fund financial statements focus on individual parts of the City government, reporting the City’s operations in more d
etail than the government-wide statements.

The ba
sic financial statements also include notes that provide additional information essential to understanding the data contained in the government-wide and fund financial statements. The statements and notes are followed by the Schedules of Changes in Net Pension Liability and Related Ratios and Schedules of Contributions for the City’s pension plans along with the Schedule of Changes in Net Other Postemployment Benefits (OPEB) Liability and Related Ratios and Schedule of Contributions for the City’s OPEB pl an, which are requi red supplementary information. In addition to these required elements, we have included combining statements and schedules that provide details about the City’s other governmental funds, other enterprise funds, the Water enterprise fund, the Wastewater enterprise fund, the Community Center enterprise fund, internal service funds, and custodial funds, each of which is presented in a column in the basic financial statements. 5 City of Sacramento
Management’s Discussion and Analysis (Continued)
(Required Supplementary Information - Unaudited)
For the Fiscal Year Ended June 30, 2022

Gover
nment-wide Financial Statements
The government-wide statements report information about the City usin g accounting methods like those used by private-sector companies. The statement of net position includes all the City’s assets and liabilities, as well as any deferred outflows or inflows of resources. The statement of activities in cludes all current year revenues and expenses regardless of when cash is received or paid. These government-wide stat ements report the City’s net position and how the City’s net position has changed during the fiscal year. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial health of the City is improving or deteriorating.

The government-wide financial statements of the City are divided as follows:
 Governmental activities - Most of the City’s basic services are included here, such as police; fire; public works; comm
unity development; youth, parks, and community enrichment; and general government. Taxes and state and federal grants finance most of these activities.
 Busine
ss-type activities - Certain services provided by the City are funded by customer fees. Among these are the City’
s utility services, convention center, and off-street parking facilities.

Fund Financial Statements
A fund is a group of related accounts that is used to main tain co ntrol over resources that have been segregated for specific activities or objectives. Fund financial statements provide more detailed information about the City’s largest funds, not the City as a whole.

The City has three types of fund financial statements:
 Governmental funds - Governmental fund statements tell how general government services such as pol ice, fire, and publ
ic works, among others, were financed in t he short-term as well as what remains for future spending. Most of the City’s basic services are included in governmental funds, which focus on (1) short-term inflows and o
utflows of spendable resources, and (2) the remaining year-end balances available for spending.

Becau
se this information does not encompass the additional long-term focus of the government-wide statements, reconciliations that explain the relationship (or di fferences) between governmental funds and governmental activities follow the governmental fund statements.  Proprietary funds - Services for which customer fees are inte nded to finance the costs of operations are generally reported in proprietary funds. Proprietary fund statements, like the gov ernment-wide statements, pro
vide short-term and long-term financial information about the activities the City operates like busines ses, such as utility services, parking facilities,
convention center, etc.
 Fiduciary funds - Fiduciary fund statements provide information about the financial relationships in which the City acts solely as a trustee or custodian for the benef it of others, to whom the resources belong. The City is the trustee, o
r fiduciary, for a closed pension plan. It is also responsible for other assets held for bonded assessment and community facilities di stricts and investment trust fund s, reported as custodial fund s.

Inve
stment trust funds can only be used for the trust benef iciaries in accordance with trust agreements. The City elected to serve as the successor agency for its former redevelopment agency, which was dissolved by state la
w. The successor agency activity is accounted for in a private-purpose trust fund. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. All the City’s fiduciary activitie
s are reported in a separate statement of fiduciary net position and a statement of changes in fiduciary net position. The City excl
udes these activities from the government-wide financial statements because the City cannot use these resources to finance its operations. 6 City of Sacramento
Management’s Discussion and Analysis (Continued)
(Required Supplementary Information - Unaudited)
For the Fiscal Year Ended June 30, 2022

FINANCI

AL ANALYSIS OF THE GOVERNMENT-WIDE STATEMENTS
This section provides analysis of the government-wide financial statements including long-term and short-term information about the City’s overall financial condition. The following table addresses the financial results of the City as a whole.

Total
Percent
2022 2021 2022 2021 2022 2021 Change
Current and other assets 1,307 $ 1,196 $ 564 $ 574 $ 1,871 $ 1,770 $ 5.7% Capital assets 1,875 1,841 1,850 1,821 3,725 3,662 1.7% Total assets 3,182 3,037 2,414 2,395 5,596 5,432 3.0%
Deferred outflows of resources 190 210 31 30 221 240 -7.9% Long-term liabilities 1,534 1,83 6 1,082 1,132 2,616 2,968 -11.9% Other liabilities 84 140 44 51 128 191 -33.0%
Total liabilities 1,618 1,976 1 ,126 1,183 2,744 3,159 -13.1% Deferred inflows of resources 397 141 64 28 461 169 172.8% Net position
Net investment in
capital assets 1,370 1,3 61 938 1,167 2,308 2,528 -8.7% Restricted 394 366 48 46 442 412 7.3%
Unrestricted (407) (597) 269 1 (138) (596) 76.8%
Total net position 1,357$ 1,130 $ 1,255 $ 1,214 $ 2,612 $ 2,344 $ 11.4% Note (1) FY21 amounts have not been restated for GASB 87 which was implemented in 2022.

Activities Activities Government
As of June 30, 2022 and 2021(1)
(in millions)
Governmental Business-type Total Primary
Analysis of
net position
As noted in the financial highlights, total net position of the primar y government increased by $268 million in fiscal year 2022. Total assets increased $164 million and tota l liabilities decreased $415 million. Deferred outflows of resources decreased $19 million and deferred inflows of resources increased $292 million.

The following analysis of governmental and business-type ac tivities provides more detailed information for these changes.

Governmental activities
Current and other assets increased $111 million primarily due to increases in cash and receivables. Cash increased by $49 million in the governmental funds from higher-than-expected tax revenue and unspent ARPA reinvestment funding. Receivables increased $58 million primarily du e to $32 million of new lease receivables with the implementation of GASB Statement No. 87 and $18 million of new housing and Cannabis CORE loans issued in the current year.

Capital assets of governmental activities increased $34 million primarily due to continuing development and improvements. Capital asset additions include the Greenbriar Community Facilities District project, North Natomas Community Center and Aquatics Complex, Meadowview land purchase, and Fire Station 14 projects. More detailed information about the City’s capital assets is presented in Note 4 to the financial statements. 7 City of Sacramento
Management’s Discussion and Analysis (Continued)
(Required Supplementary Information - Unaudited)
For the Fiscal Year Ended June 30, 2022

Deferre
d outflows of resources decreased $20 million primarily due to a $24 million decrease in deferred outflows related to pensions, partially offset by a $4 million increase in deferred outflows related to OPEB. The decrease in deferred outflows related to pensions was mainly driven by a decrease in net differences between projected and actual earnings, offset partially by an increase in def erred outflows for pension contributions subsequent to the measurement date. More detailed information about pension and OPEB plans is presented in Notes 8 and 9 to the financial statements.

Long-term liabilities decreased $302 million primarily due to a $295 million decrease in net pension liability, $42 million decrease in net OPEB liability, and $15 million of principal payment s on existing debt obligations and amortization of bond premiums. Both net pension and O PEB liabilities decreased due to better than expected investment earnings during the measurement year. This was offset partially by a $33 million increase in financing plan fee credits and $11 million increase in accrued claims and judgments related to the City’s Risk Management Internal Service Fund. More detailed information about long -term liabilities is presented in Note 7 to the financial statements.

Other liabilities decreased $56 million due to recognition of $56 million of revenue related to ARPA funding that was previously unearned.

Deferred inflows of resources increased $256 million primar ily due to a $215 increase in deferred inflows related to pensions. The increase in deferred inflows related to pensions was mainly driven by an increase in deferred inflows for net differences between projected and actual earnings. Ther e was also $31 millio n of new deferred inflows related to leases with the implementation of GASB Statement No. 87 this fiscal year. More detailed information about leases and pension plans is presented in Notes 6 and 8 to the financial statements.

Restricted net position, representing amounts that must be used in accordance with external restrictions, increased $28 million primarily due to increases in restrictions for capital projects, public works programs, and economic development programs.

Business-type activities
Current and other assets of business-type activities decreased $10 million primarily due to spending down of 2013 Water revenue bond, 2018 Transient Occupancy Tax (TOT) revenue bond, and 2019 Wastewater revenue bond proceeds received in previous years, offset partially by cash provided by operational activities.

Capital assets increased $29 million due to capital asse t additions including the Convention Center expansion, Community Center Theater Renovation, Pump outfall replacements, and McKinley Park Combined Sewer System Storage project, offset by current year depreciation. More detailed capital asset information is presented in Note 4 to the financial statements.

Long-term liabilities decreased $50 million primarily due to a $34 million decrease in net pension liability, $6 million decrease in net OPEB liability, and $32 million of principal payments on existing debt obligations and amortization of bond premiums. This was offset partially by an increase of $23 million of the Drinking Water State Revolving Fund Note Payable. More detailed information is presented in Note 7 to the financial statements.

Deferred inflows of resources increased $36 million primarily due to a $24 million increase in deferred inflows related to pensions. The increase in deferred inflows related to pensions was mainly driven by an increase in deferred inflows for net differences between projected and actual earnings. There was also $11 million of new deferred inflows related to leases with the implementation of GASB Statement No. 87 this fiscal year. More detailed information about leases and pension plans is presented in Notes 6 and 8 to the financial statements. 8 City of Sacramento
Management’s Discussion and Analysis (Continued)
(Required Supplementary Information - Unaudited)
For the Fiscal Year Ended June 30, 2022

Total
Percent
2022 2021 2022 2021 2022 2021 Change
Revenues
Program revenues:

Charges for services 213 $ 181 $ 328 $ 313 $ 541 $ 494 $ 9.5% Operating grants and contributions 234 186 2 1 236 187 26.2% Capital grants and contributions 111 142 17 18 128 160 -20.0% General revenues:

Property taxes 211 198 - - 211 198 6.6% Utility users tax 66 62 - - 66 62 6.5%
Local sales taxes 133 117 - - 133 117 13.7% Other taxes 61 55 27 16 88 71 23.9%
Unrestricted:

Sales taxes shared state revenue 115 99 - - 115 99 16.2% Investment earnings (loss) (28) 5 (24) - (52) 5
-1140.0%
Miscellaneous 15 12 - - 15 12 25.0%
Total revenues 1,131 1,057 350 348 1,481 1,405 5.4% Expenses
General government 228 260 - - 228 260 -12.3% Police 215 234 - - 215 234 -8.1%
Fire 1
65 192 - - 165 192 -14.1%
Public works 116 116 - - 116 116 0.0%
Convention and cultural services 21 18 - - 21 18 16.7% Youth, parks, community enrichment 68 57 - - 68 57 19.3% Community development 64 71 - - 64 71 -9.9% Community response 11 - - - 11 - N/A
Library 23 22 - - 23 22 4.5%
Interest on long-term debt 19 21 - - 19 21 -9.5% Water - - 102 103 102 103 -1.0%
Wastewater - - 31 32 31 32 -3.1%
Storm drainage - - 41 41 41 41 0.0%
Solid waste - - 63 64 63 64 -1.6%
Community center - - 29 25 29 25 16.0% Parking - - 11 12 11 12 -8.3%
Child development - - 6 3 6 3 100.0%
Total expenses 930 991 283 280 1,213 1,271 -4.6% Revenue over (under) expenses 201 66 67 68 268 134 100.0% Transfers 26 19 (26) (19) - - -
Change in net position 227 85 41 49 268 134 100.0% Net position, beginning of year 1,130 1,045 1,214 1,165 2,344 2,210 6.1% Net position, end of year 1,357$ 1,130$ 1,255 $ 1,214 $ 2,612$ 2,344$ 11.4% Note (1) FY21 amounts have not been restated for GASB 87 which was implemented in 2022.

Activities Activities Government
City of Sacramento
Changes in Net Position
For the Fiscal Years Ended June 30, 2022 and 2021(1)
(in millions)
Governmental B
usiness-type Total Primary
9 City of Sacramento
Management’s Discussion and Analysis (Continued)
(Required Supplementary Information - Unaudited)
For the Fiscal Year Ended June 30, 2022

Analysis o
f the changes in net position
Total government-wide revenues of the primary gove rnme nt increased $76 million, a 5.4 percent increase compared to the prior fiscal year, and total expenses decreased $58 million, a 4.6 percent decrease compared to the prior fiscal year. These changes are discussed in more detail below.

Governmental activities
Total revenues for governmental activities increased $74 million, a 7 percent increase compared to the prior fiscal year. Total expenses decreased $61 million, a 6.2 percent decrease compared to the prior fiscal year. Transfers in primarily consist of in-lieu taxes paid by the business-type activities to the General Fund. Transfers out primarily consist of community center and parking program support transferred out from the General Fund.

Revenue
Charges for services revenue increased by $32 million during fiscal year 2022 compared to fiscal year 2021. The main contributors to the increase were fire and public works activities. Fire charges for services increased $8 million primarily due to increases in fire district reimbursem ents and Advanced Life Support (ALS) first responder and transportation services provided. P ublic works charges for services increased $13 million primarily due to an increase in on-street parking meter revenues and related parking citations and penalties as the Downtown area continues to recover from the COVID-19 pandemic.

Operating grants and contributions revenue increased $48 million primarily due to funding the City received for the
ARPA program and Sacramento Emergency Rental Assistance program.

Capital grants and contributions decreased by $31 million during fiscal year 2022 compared to fiscal year 2021.

This was mainly due to a decrease in revenue associated with special tax bond issuances. In fiscal year 2022, $3 million of Community Facilities District (CFD) special tax bonds were issued, compared to $46 million in fiscal year 2021.

Property tax revenue increased $13 million due to cont inued increases in Sacramento area commercial and residential real estate property assessed valuations.

Sales taxes, net of increase in state shared sales tax revenue, increased $32 million due to a rise in local spending.

The increase in revenue is offset by a net decrease of $33 million in investment earnings mainly attributable to a decrease in the fair value of Pool A investment holdings from the prior year. The cost of Pool A investment holdings exceeded the fair value by $69 million as of June 30, 2022. This loss was allocated among governmental and business-type activities, with a small portion allocated to non-City Pool A participants as well.

Expenses
Total governmental activities expenses decreased $61 million prim arily due to decreases in department functional
expenses. General government expenses decreased $32 million as less general government programs were funded by grants in comparison to the prior year. Polic e and Fire expenses decreased a combined $46 million mainly due to pension expense associated with the net pension liability adjustment. Community development expenses decreased $7 million due to the timing of community development projects within the City’s Capital Projects Funds and associated special tax bond issuances. These decreases were offset by an $11 million increase in youth, parks, and community enrichment expense as facilities began to open and operate closer to pre-COVID levels and an $11 million increase in community response expense as the DCR was introduced in fiscal year 2022.

Business-type activities
Total revenues for business-type activities increased $2 million, a 0.6 percent increase compared to the prior fiscal year. Total expenses for bus iness-type activities incr eased $3 million, a 1.1 perce nt increase. Transfers out primarily consist of in-lieu taxes paid by the business-type activities to the General Fund. Transfers in primarily consist of consist of community center and parking program support received from the General Fund. 10 City of Sacramento
Management’s Discussion and Analysis (Continued)
(Required Supplementary Information - Unaudited)
For the Fiscal Year Ended June 30, 2022

Rev
enue
Charges for services increased $15 million primarily due to an increase in Community Center revenue. The Community Center was closed for reconstruction in the prior year. All Community Center facilities were reopened during fiscal year 2022. There was also an increase in parking and child development fees as both continue to rebound from the economic effects of COVID-19.

Other tax revenue increased $11 million due to an increase in TOT revenue as travel and hotel occupancy are on the rise.

The increase in revenue is offset by a net decrease of $24 million in investment earnings due mainly to a decrease in the fair value of Pool A investment holdings from the prior year Expenses
Community Center expenses increased $4 million as ope
rations expanded with the reopening of Community
Center facilities in fiscal year 2022.

Child development expenses increased by $3 million primarily due to staff and operating costs as all 4 th R sites and summer camps reopened in fiscal year 2022.

FINANCIAL ANALYSIS OF THE FUND STATEMENTS
Funds are accounting devices the City uses to keep track of specific sources of funding and spending for particular purposes. The fund financial statements focus on individual parts of City government, reporting City operations in more detail than the government-wide statements.

Governmental Funds
The City’s governmental funds provide information on ne ar-term inflows, outflows, and balances of spendable
resources. Total revenues for governmental funds increased $ 68 million compared to the prior fiscal year. Total expenditures increased $31 million compared to the prior fiscal year. Net other financing sources increased $42 million compared to the prior fiscal year. These changes are discussed in more detail below.

General Fund
Total General Fund revenue increased $41 million compared to the prior fiscal year. Tax revenues increased by $36 million primarily due to an increase in property taxes associated with an increase in the assessed value of properties and sales and use tax associated with the grow th of retail and e-commerce sales. Intergovernmental revenue increased by $4 million primarily due to $3 million in one-time revenue associated with the dissolution of the Solid Waste Authority. Charges for services and fines, forfeitures, and penalties increased by a combined $17 million due to the increase in franchise fees, reimburs ements for Advanced Life Support services, and parking revenues as City activities continue to rebound from COVID-19. These increases are offset by a decrease in interest, rents, and concessions of $15 million, driven by the fair value adjustment related to the General Fund’s share of Pool A holdings.

Total General Fund expenditures decreased $32 million compared to the prior fiscal year. Expenditures in Police and Fire departments decreased $35 million in total mainly due to the use of operating grant funds for public safety payroll costs. Youth, parks, and community enrichment dec reased $20 million, convention and cultural services decreased $4 million, community development decreased $4 million, and library decreased $12 million as a majority of these operations are now funded by the Measure U Fund beginning this fiscal year. These decreases were offset by increases in general government, citywide and community support, and capital outlay expenditures.

General government and citywide and community expenditures increased $12 million primarily due to labor, OPEB, and pension cost increases. Capital outlay increased by $23 million. The General Fund’s largest capital outlay expenditures during the fiscal year consisted of land purchased in Meadowview to be used as a site for homeless services, expenditures for Fire Station #14 and fire apparatus, and construction of the North Natomas Community Center and Aquatics Complex.
11 City of Sacramento
Management’s Discussion and Analysis (Continued)
(Required Supplementary Information - Unaudited)
For the Fiscal Year Ended June 30, 2022

Gener
al Fund Budgetary Highlights
As part of the approved fiscal year 2022 Budget, General Fund and Measure U expenditures were realigned to better refle
ct spending priorities and provide additional transparency. This realignment resulted in moving the majority of funding from public safety programming from Measure U to the General Fund and redirecting Measure U funding to the following programs and services: affordable housing, arts, climate action, community investment, community response, homelessness, inclusive economic development, library, and youth. The City Council revised the budget throughout the fiscal year with midyear revenue and appropriation adjustments, changes made to appropriations for the use of committed fund balance, and ot her revenue and appropriation adjustments after the original budget was adopted.

After accounting for these budget adjustments, General Fund revenues were $21 million higher than final budgeted amounts. Collection of various taxes exceeded the budget by $27 million primarily due to increases in property taxes and sales and use taxes. Intergovernmental revenue exceeded budget by $7 million primarily due to reimbursements received by the City’s Fire Department from the federal government and other fire districts.

Charges for services exceeded the budget by $4 million prim arily due to commercial solid waste franchise fees.

These positive variances with final budget amounts are offset by interest, rents, and concessions coming in lower than final budgeted amounts by $19 million due to the fair value adjustment for Pool A investment holdings.

General Fund budgetary expenditures were $140 million lower than final budgeted amounts. Most of the General Fund departments reported favorable operating expenditure budget variances primarily due to labor savings and labor reimbursements from grants and other funds. Capital outlay expenditures were less than budgeted amounts by $29 million due to the multi-year nature of capital projects. Unspent multi-year project budgets, as well as other unspent City Council approved program budgets, are carried over to the subsequent fiscal year.

Measure U Fund
Measure U Fund revenue and expenditures increased by $12 million and $13 million, respectively. Tax revenue increased $16 million due to retail and e-commerce sales gr owth and was partially offset by a decrease of $4 million in interest revenue due to the fair value adjustment related to its share of Pool A investment holdings. During the fiscal year, use of Measure U resources on police and fire decreased by $52 million, while use of resources towards general government, public works, conventi on and culture services, youth, parks, and community enrichment services, community development, community response, and citywide support increased by $63 million due to the budget realignment mentioned above. During the fiscal year, the Measure U Fund transferred $3 million to the Economic Development Special Revenue Fund to provide resources for the Step Up Housing Development project.
2015 Golden 1 Center Lease Revenue Bond Fund
2015 Golden 1 Center Lease Revenue Bond Fund revenu e and expenditures both decreased by $1 million.

Transfers in decreased by $2 million as there was a one-time transfer from the General Fund in the prior year to increase the liquidity reserve for the 2015 Golden 1 Center Lease Revenue Bond Fund.

Operating Grants Fund
Operating Grants Fund revenue and expenditures increa sed by $55 million and $45 million, respectively. The increase in revenue is primarily due to $112 million increase in ARPA revenue and $22 million increase in Sacramento Emergency Rental Assistance Program revenue, offset partially by an $82 million decrease in CARES Act revenue. The increase in expenditures is primarily due to a $17 million increase in expenditures related to COVID-19 response, $32 million increase related to the Sacramento Emergency Rental Assistance Program, and $4 million increase related to homeless housing assistance and prevention, offset by a $13 million decrease in expenditures for the Whole Person Care program.
12 City of Sacramento
Management’s Discussion and Analysis (Continued)
(Required Supplementary Information - Unaudited)
For the Fiscal Year Ended June 30, 2022

Othe
r Governmental Funds
Other governmental fund revenues decreased by $39 million primarily due to a decrease of $45 million in revenues for capital projects funds. The decrease in capital projects funds revenue is primarily due to the following:
 $44 million decrease in the Special Districts Fund mainly due to the difference in special tax bonds issued. $3 million of revenue was recognized in fiscal year 2022 with the issuance of the Delta Shores CFD 2019- 01 Improvement Area No. 2, Series 2022 Special Tax Bonds. $47 million of total revenue was recognized in fiscal year
2021 with the issuance of MicKinley Village CFD 2015-04, Series 2020 and Greenbriar CFD 2018
-03 Improvement Area No. 1, Series 2021 Special Tax Bonds.  $10 million decrease in the Capital Grants Fund primarily due to decreases in revenues associated with the construction of the North Natomas Community Center and Aquatics Complex and Meadowvie w Na
vigation Center, and the Railyards Green Street Urban Grant. 
$6 million increase in the Financing Plans Fund prim arily due to adjustments to the Railyards On-Site Infrastructure Credits Trus t Account for improvements that became the financ ial responsi bility of the developer.

Other
governmental fund expenditures increased by $6 million primarily due to an increase of $10 million in expenditures for capital projects funds. The increase in capital projects funds expenditures is primarily due to the following:
 $42 million increase in the Financing Plans Fund primarily due to increases in expenditures for community development and capital outlay and the redemption of Park Development and North Natomas financing plan fee credits.

$21 million decrease in the Special Districts Fund pr imarily due to a decrease in expenditures related to Greenbriar Improvement Area 1 and McKinley Village CFDs.  $9 million decrease in the Capital Grants Fund primarily due to a decrease in North Natomas Community Cente
r and Aquatics Complex construction expenditures.

There was also a $4 million decrease in expenditures for debt service funds. This decrease was related to the final payoff of the 1993 Series A and B bonds occurring in the prior fiscal year. $52 million of financing plan fee credits were issued in fiscal year 2022, in comparison to $11 million in fiscal year 2021. $40 million of Delta Shores financing plan fee credits were issued in the current year. More detailed fee credit information is presented in Note 7 to the financial statements. 13 City of Sacramento
Management’s Discussion and Analysis (Continued)
(Required Supplementary Information - Unaudited)
For the Fiscal Year Ended June 30, 2022

Enterpris
e Funds
The City’s enterprise fund financial statements provide the same type of information as the government-wide financial statements but in greater detail. Total operating revenues increased $14 million and operating expenses increased $2 million compared to the prior fiscal year. Net nonoperating expenses increased $12 million and capital contributions decreased $7 million compared to the prior fiscal year. These changes are discussed in more detail below.

Water Fund
Water Fund operating revenues decreased $7 million primaril y due to $4 million in one-time water sales from groundwater transfers in fiscal year 2021 and a decrease of $3 million in utility se rvice charges. Operating expenses decreased $2 million primarily due to a $5 million decrease in pension expense that fluctuates due to a variety of actuarial factors affecting net pension liabilit y, and a decrease of $2 million in services and supplies related to a decrease in vehicle replacements and l and and water rights for water transfers. Net nonoperating expenses increased $15 million primarily due to the fair value adjustment related to the Water Fund’s share of Pool A investment holdings. Capital contributions decreased $2 million. Current year capital contributions were associated with East Commerce Way, the Core/River Oaks, and Twin Rivers Development projects.

Wastewater Fund
Wastewater expenses decreased $2 million due to a decrease in vehicle replacement charges as fleet orders were temporarily put on hold due to supply chain shortages and cost inflation. Wastewater net nonoperating expenses increased $4 million primarily due to the fair value adjustment related to the Wastewater Fund’s share of Pool A investment holdings. Developer fees and capital contributions decreased $3 million.

Storm Drainage Fund
Net nonoperating expenses increased by $3 million in the current year primarily due to the fair value adjustment related to the Storm Drainage Fund’s share of Pool A investment holdings.

Solid Waste Fund
Solid Waste Fund operating revenues increased $3 million primarily due to an increase in service accounts with the addition of new development and homes.

Community Center Fund
Community Center Fund operating revenues increased $10 million and operating expenses increased by $5 million. Operations in the previous year were heavily impacted by the temporary closure of the Convention Center Complex for renovations and cancellati ons of various events due to COVID- 19. All Community Center facilities were open for events during fiscal year 2022, which led to a $3 million increase in user fees and charges and a $7 million increase in rents and concessions. Net nonoperating revenue increased by $10 million primarily due to an increase in TOT revenue of $11 million. The increase in TOT revenue is a result of increased hotel stays and travel due to the easing of restrictions in relation to the pandemic.

Other Enterprise Funds
Other Ente
rprise Funds consist of the activities of the City’s Parking and 4 th R Child Development Funds. Total operating revenues increased by $7 million due to the reopening of all 4th R sites in August 2021. These sites were previously closed during fiscal year 2021. Additionally, events have resumed in Downtown Sacramento resulting in increased event parking revenue. Net transfers in decreased by $5 million due to decreases in budgeted program support received from the General Fund as operations continue to rebound from the economic effects of COVID-

19. 14
City of Sacramento
Management’s Discussion and Analysis (Continued)
(Required Supplementary Information - Unaudited)
For the Fiscal Year Ended June 30, 2022

CAPI

TAL ASSET AND DEBT ADMINISTRATION
Capital Assets
As of June 30, 2022, the City had invested $3.7 billion in a b road range of capital assets, including land, buildings, vehicles, parks and park improvements, roads, bridges, and water, wastewater and storm drainage transmission and distribution systems. Current year capital asset additions, net of deletions, of $199 million were offset by current year depreciation/amortization expense of $136 million, resulting in a net increase in capital assets of $63 million. 2022 2021 2022 2021 2022 2021
Capital assets not being depreciated
Land 220 $ 203 $ 49 $ 48 $ 269 $ 251 $ Easements 2 2 - - 2 2 Construction in progress 270 224 445 665 715 889 Depreciable capital assets:

Buildings and improvements 412 418 284 165 696 583 Equipment 12 15 105 24 117 39 Software 1 2 9 10 10 12 Vehicles 94 90 - - 94 90 Transmission and distribution system 4 4 956 909 960 913 Roadway network 547 572 - - 547 572 Streetlight network 173 169 - - 173 169 Parks and park improvements 138 142 - - 138 142 Leased assets, net 2 - 2
- 4
-
Total capital assets 1,875 $ 1,841$ 1,850$ 1,821 $ 3,725$ 3,662$ Activities Activities
Total PrimaryGovernmental B
usiness-Type
Government
This
year's major capital asset additions include:
 $183 million for the Treatment Plant Rehabilitation Design Project, 
$32 million for the East Sacramento Water Meter Replacement Project, 
$31 million for the McKinley Park Combined Sewer System Storage Project, 
$24 million for the River Park Water Meter Replacement Project, 
$12 million for the 100 Acres in Meadowview Project,

Other capital project additions in progress including the Broadway/Alhambra Navigation Center Proj ect, Sacramento
Northern Parkway Bike Trail Project, F ederal Downtown Controller Project, and Combined Sewer System Replacement Project. Many other capi tal projects were completed during the year and trans
ferred from construction in progress to the appropriate capital asset categories.

The City has $106 million in commitments for contracts awarded but not completed as of June 30, 2022. The major contracts outstanding are $4 million for installation of motor-controlled valves and drainage system as part of the Ground Water Flush-to-Waste project; $3 million for AWMP installations tracking and investigation and contract compliance; $3 million for Hope Cooper ative outreach services within the Department of Community Response; $3 million for providing support to businesses affected by COVID-19; $3 million for the operation of Outreach and Engagement Center for providing respite resources for the most vulnerable members of the community; $3 million for Oak Park Broadway development; $2 million for support services and public outreach for the Sacramento River Water Treatment Plant Expansion Project; $2 million for assisting La Familia Counseling Center with property acquisition, site readiness work and overall project support; and $17 million for the purchase of vehicles, primarily for the replacement of refuse trucks and garbage trucks.

During fiscal year 2022, the City implemented GASB Statement No. 87, Leases, which introduced the recognition of right-to-use leased assets as capital assets. The City leases various land sites, buildings, and equipment valued at $4 million, net of accumulated amortization as of June 30, 2022.

More detailed information about the City's capital assets and l eased assets is presented in Notes 4 and 6 to the financial statements.
15 City of Sacramento
Management’s Discussion and Analysis (Continued)
(Required Supplementary Information - Unaudited)
For the Fiscal Year Ended June 30, 2022

Long-ter
m Debt
The following table summarizes the City’s outstanding debt (excluding other long-term liabilities):
2022 2021 2022 2021 2022 2021
Revenue and other bonds, net 460$ 475 $ 794 $ 822 $ 1,254 $ 1,297 $ Notes payable 17 17 143 124 160 141 Total outstanding debt 477$ 492 $ 937 $ 946 $ 1,414 $ 1,438 $ City of Sacramento
Outstanding Debt
As of June 30, 2022 and 2021
(in millions)
Activities Activities Government
Governmental Business-Type Total Primary
Total outstanding debt for governm
ental activities decr eased $15 million due to principal payments on existing obligations and amortization of bond premiums.

Total outstanding debt for business-type activities de creased $9 million mainly due to $32 million of principal payments on existing obligations and amortization of bond premiums, offset by the addition of $23 million to the Drinking Water State Revolving Fund Note.

More detailed information about the City’s long-term liabilities is presented in Note 7 to the financial statements.

Credit rating
The following table summarizes the City’s bonded debt rati ng s (nr designates not rated) at June 30, 2022, as
determined by S&P Global Ratings (S & P), Moody’s Investors Service, Inc. (Moody’s), and Fitch Ratings (Fitch):

Bond issues: S
& P Moody’s Fitch
 2006 Capital Improvement Revenue Bonds, Series B AA- Aa3 nr  2006 Capital Improvement Revenue Bonds, Series E AA- Aa3 nr  2013 Water Revenue Bonds
AA nr AA-
 2013 Wastewater Revenue Bonds
AA nr AA
 2015 Refunding Revenue Bonds
AA-/AA Aa3 nr
 2015 Lease Revenue Bonds (Golden 1 Center)
AA- nr A+
 2017 Water Revenue Bonds
AA nr AA-
 2018 TOT Revenue Bonds, Senior Series A&B
nr A1 nr
 2018 TOT Revenue Bonds, Subordinate Series C
nr A2 nr
 2019 Wastewater Revenue Bonds
AA nr AA
 2019 STID Assessment Revenue Bonds nr A2 nr
 2020 Water Revenue Refunding Bonds
AA nr AA-
 2020 Wastewater Revenue Refunding Bonds
AA nr AA
16 City of Sacramento
Management’s Discussion and Analysis (Continued)
(Required Supplementary Information - Unaudited)
For the Fiscal Year Ended June 30, 2022

The City’
s issuer credit rating as of June 30, 2022 is AA with a stable outlook from S&P, Aa2 with a stable outlook from Moody’s, and AA- with a stable outlook from Fitch. T he issuer credit rating is an assessment of the City’s creditworthiness and capacity to meet financial commitment s as they come due without regard to the terms of a specific debt instrument. The ratings and stable outlook determination are based on a multitude of factors for each of the rating agencies. Highlights include: the City’s improved economic condition, as demonstrated by the steady rise in assessed values, in combination with the City’s operating surpluses driving the growing reserve balances; the City’s continued growth despite the pandemic-driv en effects on the regional economy; and the City’s tight budget management, adequate expenditure flexibility, moderate long-term liabilities, and strong reserves relative to the City’s moderate revenue volatility.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET
Economic Factors
The full impact of the COVID-19 pandemic has continued to create economic uncertainty for the foreseeable future.

With re
strictions loosening and an increase in vaccination rates, the City remains cautiously optimistic about an impending economic recovery. However, in this transition to post-pandemic life, the City still faces significant financial challenges. Housing demand remains higher than supply in the region as Bay Area residents continue to look for cheaper housing alternatives. Homelessness and the need to increase services, shelter capacity, and housing is one of the biggest issues the City faces.

Next Year’s Budget
General Fund budget appropriations for fiscal year 2023 are $596.4 million, an increase of 6.1 percent compared to the fiscal year 20
22 approved budget. In addition to the allocation of resources for several priority initiatives, the approved budget appropriations include an $11 million contribution to the Ci ty’s Economic Uncertainty Reserve (EUR). This contribution is intended to maintain the minimum EUR level for the General Fund and Measure U Fund as required by adopted City policy.

City Council adopted a balanced budget for fiscal year 202 3 based on strategic use of one-time, fiscal year 2023 department savings, and available fund balance.

CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens , taxpayers, customers, investors, and creditors with a general overview of the City’s finances, and to demonstrate the City’s accountability for the money it receives. If you have questions about this report, need additional financial information, or would like to obtain component unit financial statements, contact the City of Sacramento Depa rtment of Finance, Accounting Division, 915 I Street, Fourth Floor, Sacramento, CA, 95814, or visit the City’s web page at http://www.cityofsacramento.org. 17 THIS PAGE INTENTIONALLY LEFT BLANK
18 Government-wide
Financial
Statements
City of Sacramento
Statement of Net Position
June 30, 2022
(in thousands)
Governmental Business-typ e
Activities Activities Total
ASSETS
Cash and investments 889,601$ 396,813$ 1,286,414$ Receivables, net 361,999 68,136 430,135 Internal balances 5,031 (5,031) -
Inventories - 1,591 1,591
Prepaid items 17,139 233 17,372
Restricted cash and investments 32,993 102,418 135,411 Intangible assets - 112 112
Land and other capital assets not being depreciated/amortized 492,307 494,097 986,404 Other capital assets, net of depreciation/amortization 1,382,779 1,356,000 2,738,779 Total assets 3,181,849 2,414,369 5,596,218

DEFERRED OUTFLOWS OF RESOURCES
Loss on refunding of debt 2,417 9,902 12,319
Pensions 162,530 17,375 179,905
OPEB 24,567 3,464 28,031
Total deferred outflows of resources 189,514 30,741 220,255

LIABILITIES
Payables 78,830 39,828 118,658 Unearned revenue 5,534 3,923 9,457
Long-term liabilities:

Due within one year 57,812 33,908 91,720 Due in more than one year 1,475,467 1,048,635 2,524,102 Total liabilities 1,617,643 1,126,294 2,743,937

DEFERRED INFLOWS OF RESOURCES
Service concession arrangement 6,492 - 6,492
Gain on refunding of debt - 353 353
Pensions 254,174 35,964 290,138
OPEB 105,366 17,002 122,368
Leases 30,957 10,559 41,516
Total deferred inflows of resources 396,989 63,878 460,867

NET POSITION
Net investment in capital assets 1,370,530 937,751 2,308,281 Restricted for:

Capital projects 223,243 45,942 269,185 Debt service 907 - 907
Public works programs 35,497 - 35,497
Economic development programs 55,545 - 55,545 Other programs 67,600 2,594 70,194
Trust and endowments: -
Expendable 10,249 - 10,249
Nonexpendable 578 - 578
Unrestricted (407,418) 268,651 (138,767) Total net position 1,356,731$ 1,254,938$ 2,611,669$ Primary Government
The notes to the basic financial statements are an integral part of this statement. 19 City of Sacramento
Statement of Activities
For the Fiscal Year Ended June 30, 2022
(in thousands)
Functions/Programs
Primary government:

Governmental activities:

General government 248,447 $ (20,292) $ 30,628 $ 84,733 $ 51 $ (112,743)$ Police 214,867 - 12,626 71,620 598 (130,023)
Fire 165,526 - 54,968 48,604 - (61,954)
Public works 116,113 - 55,885 16,349 64,663 20,784 Convention and cultural services 21,421 - 10,901 1,653 3,056 (5,811) Youth, parks, and community enrichment 67,602 - 12,470 1,343 11,316 (42,473) Community development 64,151 - 35,516 1,215 31,277 3,857 Community response 10,703 - - - - (10,703)
Library 23,304 - - 8,777 - (14,527)
Interest on long-term debt 18,800 - - - - (18,800) Total governmental activities 950,934 (20,292) 212,994 234,294 110,961 (372,393) Business-type activities:

Water 94,640 6,906 136,613 552 7,056 42,675
Wastewater 27,827 3,001 44,327 65 3,990 17,554
Storm drainage 38,388 2,850 41,901 25 6,116 6,804 Solid waste 58,632 4,596 76,221 1,099 - 14,092
Community center 27,717 1,739 10,140 - - (19,316) Parking 9,475 1,200 13,977 - - 3,302
Child development 5,626 - 4,356 123 - (1,147)
Total business-type activities 262,305 20,292 327,535 1,864 17,162 63,964 Total primary government 1,213,239 $ - $ 540,529 $ 236,158 $ 128,123 $ (308,429) $ Program Revenues
Operating
Grants and
Contributions
Capital
Charges for
ServicesExpenses
Operating Grants and
Contributions
Net (Expense)
Revenue
Indirect
Allocation
Expenses
The notes to the basic financial statements are an integral part of this statement.

Page 1 of 2 ends

20 City of Sacramento
Statement of Activities
For the Fiscal Year Ended June 30, 2022
(in thousands)
Changes in net position:

Net (expense) revenue (372,393) $ 63,964 $ (308,429) $ General revenues:

Taxes:

Property taxes 211,331 - 211,331
Utility user taxes
65,461 - 65,461
Local sales tax
133,255 - 133,255
Property transfer tax
19,372 - 19,372
Business operations tax
33,334 - 33,334
Transient occupancy tax
5,366 26,843 32,209
Other taxes
2,585 - 2,585
Unrestricted sales taxes shared state revenue
115,260 - 115,260
Unrestricted investment loss
(27,883) (24,014) (51,897)
Unrestricted miscellaneous
15,304 - 15,304
Transfers
25,995 (25,995) -
Total general revenues and transfers 599,380 (23,166) 576,214 Changes in net position 226,987 40,798 267,785
Net position, beginning of year 1,129,744 1,214,140 2,343,884 Net position, end of year 1,356,731$ 1,254,938$ 2,611,669$ Primary Government
Total
Governmental
Activities
Business-type
Activities
The notes to the basic financial statements are an integral part of this statement.

Page 2 of 2 ends

21 THIS PAGE INTENTIONALLY LEFT BLANK
22 Fund Financial
Statements

THIS PAGE INTENTIONALLY LEFT BLANK
23 City of Sacramento
Governmental Funds
Balance Sheet
June 30, 2022
(in thousands)
2015 Golden 1 Center
Measure U Lease Revenue
Fund Bond Fund
ASSETS
Cash and investments held by City 314,185$ 70,946$ 8,523$ Cash and investments held by fiscal agent - - -
Receivables, net:

Taxes 33,309 23,664
Accounts 28,454 75 1,928
Loans 1,873 - 136,971
Intergovernmental 4,224 - -
Leases 28,936 - -
Interest 1,204 205 31
Prepaid items 1,767 1,049 -
Restricted assets:

Cash and investments held by City - - -
Cash and investments held by fiscal agent - - 16,797
Total assets 413,952$ 95,939$ 164,250$

LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities:

Accounts payable 21,065$ 4,607$ -$
Accrued payroll 20,477 1,534 -
Accrued claims and judgments 34 - -
Due to other funds - - -
Deposits 119 - -
Unearned revenue 974 - -
Advances from other funds 1,873 - -
Total liabilities 44,542 6,141 -
Deferred inflows of resources:

Unavailable revenue 13,496 - 136,971
Leases 27,904 - -
Total deferred inflows of resources 41,400 - 136,971
Fund balances:

Nonspendable:

Prepaid items 1,767 1,049 -
Leases 1,032 - -
Permanent fund principal - - -
Restricted:

Capital projects - - -
Debt service - - 16,797
Public works programs - - -
Economic development programs - - -
Other programs - - -
Committed:

Economic uncertainty 61,310 1,046 -
Capital projects 50,410 18,385 -
Debt service - - 10,451
Fire program
s 8,426 - -
Housing trust fund 1,000 904 -
OPEB 5,727 289 -
Set-aside for FY23 Budget 20,891 1,971 -
Other programs 133,367 66,154 -
Assigned:

Debt service - - 31
Unassigned 44,080 - -
Total fund balances 328,010 89,798 27,279
Total liabilities, deferred inflows of resources
and fund balances 413,952$ 95,939$ 164,250$
Fund
General
The notes to the basic financial statements are an integral part of this statement.

Page 1 of 2 ends

24 -
City of Sacramento
Governmental Funds
Balance Sheet
June 30, 2022
(in thousands)
Operating Other Total
Grants Governmental Governmental
Fund Funds Funds
ASSETS
Cash and investments held by City 22,495$ 339,486$ 755,635$ Cash and investments held by fiscal agent - 2 2 Receivables, net:

Taxes - 6,104 63,077 Accounts 271 15,065 45,793 Loans - 19,266 158,110 Intergovernmental 18,489 26,548 49,261 Leases - 3,093 32,029 Interest - 325 1,765 Prepaid items 9,218 - 12,034 Restricted assets:

Cash and investments held by City - 11,111 11,111 Cash and investments held by fiscal agent - 5,085 21,882 Total assets 50,473$ 426,085$ 1,150,699$

LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities:

Accounts payable 4,082$ 12,576$ 42,330$ Accrued payroll - 48 22,059 Accrued claims and judgments - - 34 Due to other funds - 1,657 1,657 Deposits 297 2,736 3,152 Unearned revenue 54 4,278 5,306 Advances from other funds - 5,971 7,844 Total liabilities 4,433 27,266 82,382 Deferred inflows of resources:

Unavailable revenue 17,760 30,419 198,646 Leases - 3,053 30,957 Total deferred inflows of resources 17,760 33,472 229,603 Fund balances:

Nonspendable:

Prepaid items 9,218 - 12,034 Leases - 40 1,072 Permanent fund principal - 578 578 Restricted:

Capital projects - 241,218 241,218 Debt service - 4,832 21,629 Public works programs - 21,293 21,293 Economic development programs - 55,545 55,545 Other programs 36,822 29,133 65,955 Committed:

Economic uncertainty - - 62,356 Capital projects - 795 69,590 Debt
service - 1,351 11,802 Fire programs - - 8,426 Housing trust fund - - 1,904 OPEB - 1 6,017 Set-aside for FY23 Budget - - 22,862 Other programs - 20,238 219,759 Assigned:

Debt service - 1,986 2,017 Unassigned (17,760) (11,663) 14,657 Total fund balances 28,280 365,347 838,714 Total liabilities, deferred inflows of resources
and fund balances 50,473$ 426,085$ 1,150,699$ The notes to the basic financial statements are an integral part of this statement.

Page 2 of 2 ends

25 City of Sacramento
Governmental Funds
Reconciliation of the Balance Sheet to the Statement of Net Position June 30, 2022
(in thousands)
Fund balances - total governmental funds 838,714$
Amounts reported for governmental activities in the statement of net position are different because:

Revenue and other resources not available to liquidate
liabilities of the current period are not recognized in the funds. 198,646 Prepaid bond insurance represents costs associated with the issuance of long-term debt which are amortized over the period the debt is outstanding.

The costs are reported as expenditures of the current period in the governmental funds. 188
Capital assets used in governmental activities are not current financial resources and therefore are not reported in the funds:

Governmental capital assets 3,541,726
Less: accumulated depreciation/amortization (1,760,028) 1,781,698
Certain current liabilities are not due and payable in the current period and therefore are not reported in the funds. Those liabilities consist of the following:

Interest payable (5,068)
Deferred outflows and inflows of resources are not recognized in the current period and therefore not reported in the governmental funds.

Deferred outflows related to pensions 160,769
Deferred outflows related to OPEB 24,129
Deferred inflows related to pensions (249,338)
Deferred inflows related to OPEB (103,165)
Loss on refunding of debt 2,417
(165,188)
Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds.

Accrued compensated absences (46,164)
Accrued claims and judgments (4,804)
Financing plan fee credits (70,548)
Net pension liability (648,059)
Net OPEB liability (156,962)
Pollution remediation obligations (596)
Revenue and other bonds payable, net (459,585)
Notes payable (16,702)
Lease liabilities (1,621)
(1,405,041)
Internal service funds are used by management to charge the costs of certain activities, such as insurance and fleet, to individual funds.

The assets and liabilities of the internal service funds are included in governmental activities in the statement of net position. 112,782 Net position of governmental activities 1,356,731$
The notes to the basic financial statements are an integral part of this statement. 26 THIS PAGE INTENTIONALLY LEFT BLANK
27 City of Sacramento
Governmental Funds
Statement of Revenues, Expenditures and Changes in Fund Balances For the Fiscal Year Ended June 30, 2022
(in thousands)
2015 Golden 1 Center
General Measure U Lease Revenue
Fund Fund Bond Fund
Revenues:

Taxes 439,558$
133,255$
-$

Intergovernmental 24,335 - -
Charges for services 113,565 - -
Fines, forfeits, and penalties 10,057 - -
Interest, rents, and concessions (14,530) (3,769) 265 Community service fees - - -
Assessment levies 483 - -
Contributions and donations 37 - -
Miscellaneous 653 - -
Total revenues 574,158 129,486 265
Expenditures:

Current:

General government 65,855 11,504 -
Police 147,890 4,087 -
Fire 122,548 8,230 -
Public works 14,615 3,424 -
Convention and cultural services 1,485 4,779 -
Youth, parks, and community enrichment 1,653 37,292 - Community development 30,471 8,410 -
Community response 6,141 4,305 -
Library - 13,572 -
Utilities 3,859 - -
Citywide and community support 57,700 883 -
Capital outlay 45,776 10,603 -
Debt service:

Principal 39 87 3,945
Interest and fiscal charges 283 7 8,512
Total expenditures
498,315 107,183 12,457
Excess (deficiency) of revenues over
(under) expenditures 75,843 22,303 (12,192)
Other financing sources (uses):

Transfers in 48,184 33 10,600
Transfers out (36,010) (3,676) -
Issuance of long-term debt - - -
Total other financing sources (uses) 12,174 (3,643) 10,600 Changes in fund balances 88,017 18,660 (1,592)
Fund balances, beginning of year 239,993 71,138 28,871 Fund balances, end of year 328,010
$
89,798$
27,279$

The notes to the basic financial statements are an integral part of this statement.

Page 1 of 2 ends

28 City of Sacramento
Governmental Funds
Statement of Revenues, Expenditures and Changes in Fund Balances For the Fiscal Year Ended June 30, 2022
(in thousands)
Operating Other Total
Grants Governmental Governmental
Fund
Funds Funds
Revenues:

Taxes -$
14,324$
587,137$

Intergovernmental 202,814 65,037 292,186
Charges for services 1,342 18,779 133,686
Fines, forfeits, and penalties - 207 10,264
Interest, rents, and concessions 94 43 (17,897)
Community service fees - 25,076 25,076
Assessment levies - 56,032 56,515
Contributions and donations 5,293 6,306 11,636
Miscellaneous - 11,890 12,543
Total revenues 209,543 197,694 1,111,146
Expenditures:

Current:

General government 75,611 17,424 170,394
Police 71,636 - 223,613
Fire 49,365 - 180,143
Public works - 35,508 53,547
Convention and cultural services 28 8,262 14,554
Youth, parks, and community enrichment 386 10,321 49,652 Community development 1,247 24,267 64,395
Community response - - 10,446
Library - 8,777 22,349
Utilities - 278 4,137
Citywide and community support - - 58,583
Capital outlay 945 98,925 156,249
Debt service:

Principal 210 29,583 33,864
Interest and fiscal charges 2
10,980 19,784
Total expenditures 199,430 244,325 1,061,710
Excess (deficiency) of revenues over
(under) expenditures 10,113 (46,631) 49,436
Other financing sources (uses):

Transfers in - 27,273 86,090
Transfers out (2,930) (16,429) (59,045)
Issuance of long-term debt - 51,914 51,914
Total other financing sources (uses) (2,930) 62,758 78,959 Changes in fund balances 7,183 16,127 128,395
Fund balances, beginning of year 21,097 349,220 710,319 Fund balances, end of year 28,280
$
365,347$
838,714$

The notes to the basic financial statements are an integral part of this statement.

Page 2 of 2 ends

29 City of Sacramento
Governmental Funds
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities
For the Fiscal Year Ended June 30, 2022
(in thousands)
Changes in fund balances - total governmental funds 128,395$ Amounts reported for governmental activities in the statement of activities are different because:

Governmental funds report capital outlay as expenditures. In the statement of activities, however, the cost of those assets is allocated over their estimated useful lives as depreciation/amortization expense.

Capital outlay 84,101
Depreciation/amortization expense (72,909)
11,192
Losses on retirement of capital assets in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. (52)
Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the governmental funds:

Infrastructure dedications 17,443
Long-term debt proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net position. Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liab ilities in the statement of net position.

Issuance of long-term debt (51,914)
Principal repayments on long-term debt 33,864
(18,050)
Revenue and other resources not available to liquidate
liabilities of the current period are not recognized in governmental funds.

Revenue in the statement of activities is not limited by availability, so certain revenues need to be reduced by the amounts that were unavailable at the beginning of the year and increased by the amounts that were unavailable at the end of the year. This adjustment records a net increase in revenues - unavailable revenues at the end of the year were greater than beginning unavailable revenues by this amount. 5,382
Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds.

Accrued compensated absences (3,750)
Accrued claims and judgments (1,071)
Pension expense 54,379
Other postemployment benefits 34,064
Pollution remediation (23)
Interest 86
Amortization of prepaid bond insurance (17)
Amortization of bond premium 1,136
Amortization of gain/loss on refunding (220)
84,584
Internal service funds are used by management to charge the costs of certain activities, such as insurance and fleet, to individual funds. The net expense of the internal service funds is reported with the governmental activities. (1,907)
Change in net position of governmental activities 226,987$ The notes to the basic financial statements are an integral part of this statement. 30 THIS PAGE INTENTIONALLY LEFT BLANK
31 City of Sacramento
General Fund
Statement of Revenues, Expenditures and Changes in Fund Balance - B
udget and Actual (Non-GAAP Budgetary Basis)
w
ith Budget to GAAP Reconciliation
For the Fiscal Year Ended June 30, 2022
(in thousands)
Actual Actual
Amounts - Budget Amounts -
Budgetary Variance with to GAAP GAAP
Final Basis Final Budget Reconciliation Basis
Revenues:

Taxes 399,637 $ 412,589 $ 439,558 $ 26,969$ -$ 439,558$
Intergovernmental 10,530 17,304 24,335 7,031 - 24,335 Charges for services 101,279 109,107 113,565 4,458 - 113,565 Fines, forfeits and penalties 7,029 8,952 10,057 1,105 - 10,057 Interest, rents, and concessions 2,959 4,758 (14,530) (19,288) - (14,530) Assessment levies 74 74 483 409 - 483
Contributions and donations - 1 37 36 - 37
Miscellaneous 780 154 653 499 - 653
Total revenues 522,288 552,939 574,158 21,219 - 574,158 Expenditures:

Current:

Mayor/Council 6,212 13,980 6,769 7,211 (69) 6,700 City Auditor 1,012 1,287 1,278 9 - 1,278
City Manager 41,459 73,609 23,954 49,655 (9,543) 14,411 City Attorney 11,056 21,831 10,808 11,023 (222) 10,586 City Clerk 2,225 2,642 2,173 469 (17) 2,156
City Treasurer 2,000 2,172 1,662 510 - 1,662 Finance 8,234 8,830 8,080 750 104 8,184
Information technology 15,873 17,130 14,862 2,268 1,211 16,073 Human resources 8,514 9,832 4,891 4,941 (86) 4,805 Subtotal - General government 96,585 151,313 74,477 76,836 (8,622) 65,855 Police 208,571 151,977 147,941 4,036 (51) 147,890 Fire 158,395 116,357 122,558 (6,201) (10) 122,548 Public works 17,562 20,807 14,667 6,140 (52) 14,615 Convention and cultural services 2,498 13,368 1,856 11,512 (371) 1,485 Youth, parks, and community enrichment 1,884 1,969 1,504 465 149 1,653 Community development 34,579 38,612 30,635 7,977 (164) 30,471 Community response 5,276 22,765 10,154 12,611 (4,013) 6,141 Utilities 4,165 4,165 3,859 306 - 3,859 Citywide and community support 54,737 55,075 57,431 (2,356) 269 57,700
Capi
tal outlay 53,523 79,461 50,449 29,012 (4,673) 45,776 Debt service:

Principal -
39 39 - - 39
In
terest and fiscal charges - 283 283 - - 283
Total
expenditures 637,775 656,191 515,853 140,338 (17,538) 498,315 Excess (deficiency) of revenues over
(under) expenditures (115,487) (103,252) 58,305 161,557 17,538 75,843 Other financing sources (uses):

Transfers in 34,465 45,852 48,184 2,332 - 48,184
Transfers out (22,058) (36,115) (36,010) 105 - (36,010) Total other financing sources (uses) 12,407 9,737 12,174 2,437 - 12,174 Changes in fund balance (103,080) (93,515) 70,479 163,994 17,538 88,017 Fund balance, beginning of year 239,993 239,993 239,993 - - 239,993 Fund balance, end of year 136,913$ 146,478 $ 310,472 $ 163,994 17,538$ 328,010$ Budgeted Amounts
Original
The notes to the basic financial statements are an integral part of this statement. 32 City of Sacramento
Measure U Fund
Statement of Revenues, Expenditures and Changes in Fund Balance - Budge
t and Actual (Non-GAAP Budgetary Basis)
w
ith Budget to GAAP Reconciliation
For the Fiscal Year Ended June 30, 2022
(in thousands)
Actual Actual
Amounts - Budget Amounts -
Budgetary Variance with to GAAP GAAP
Final Basis Final Budget Reconciliation Basis
Revenues:

Taxes 108,801$ 124,238 $ 133,255$ 9,017$ -$ 133,255$ I
nterest, rents, and concessions - - (3,769) (3,769) - (3,769) Total revenues 108,801 124,238 129,486 5,248 - 129,486 Expenditures:

Current:

General government 19,538 31,571 17,218 14,353 (5,714) 11,504 Police 6,226 6,233 4,087 2,146 - 4,087
Fire 8,590 8,593 8,230 363 - 8,230
Public works 3,984 3,879 3,452 427 (28) 3,424
Convention and cultural services 6,830 6,668 5,330 1,338 (551) 4,779 Youth, parks, and community enrichment 42,178 43,696 37,437 6,259 (145) 37,292 Community development 11,532 18,375 9,031 9,344 (621) 8,410 Community response 13,337 19,257 8,513 10,744 (4,208) 4,305 Library 13,572 13,572 13,572 - - 13,572
Citywide and community support 991 371 883 (512) - 883 Capital outlay 22,958 29,290 11,441 17,849 (838) 10,603
D
ebt service:

Principal 87 87 87 - - 87 I
nterest and fiscal charges 7 7 7 - - 7
T
otal expenditures 149,830 181,599 119,288 62,311 (12,105) 107,183 Excess (deficiency) of revenues over
(under) expenditures (41,029) (57,361) 10,198 67,559 12,105 22,303
Other fi
nancing sources (uses):

Transfers in - 21 33 12 - 33
Transfers out (250) (3,676) (3,676) - - (3,676)
Total other financing sources (uses) (250) (3,655) (3,643) 12 - (3,643) C
hanges in fund balance (41,279) (61,016) 6,555 67,571 12,105 18,660 Fund balance, beginning of year 71,138 71,138 71,138 - - 71,138 Fund balance, end of year 29,859$ 10,122 $ 77,693 $ 67,571$ 12,105$ 89,798$ B
udgeted Amounts
Original
The notes to the basic financial statements are an integral part of this statement. 33 City of Sacramento
Proprietary Funds
Statement of Net Position
June 30, 2022
(in thousands)
Solid Waste
Fund
ASSETS
Current assets:

Cash and investments held by City 189,894 $ 54,001 $ 47,394 $ 47,261 $ Cash and investments held by fiscal agent - - - -
Receivables, net:

Taxes - - - -
Accounts 19,779 11,048 7,234 10,578 Loans - - 47 -
Intergovernmental 462 434 1,174 -
Leases 66 - - 153
Interest 752 183 140 144
Due from other funds - - - -
Inventories 1,163 37 391 -
Prepaid items 219 - 1 -
Intangible asset, current portion - - - -
Total current assets 212,335 65,703 56,381 58,136 Noncurrent assets:

Restricted assets:

Cash and investments held by City 67,155 9,125 1,037 1,722 Cash and investments held by fiscal agent 3,450 411 - - Advances to other funds - - - -
Leases receivable 822 - 1,596
Loans receivable - - 922 -
Intangible assets - - - -
Capital assets:

Land 2,899 1,138 17,885 1,133 Buildings and improvements 165,383 78,996 11,805 32,153 Mach
inery and equipment 114,327 5,820 18,365 12,437 Vehicles - - - -
Transmission and distribution system 917,853 216,066 437,818 - Construction in progress 57,123 9,267 5,627 2,917 Software 3,491 3,447 3,747 2,772 Easements 134 - 157 -
Leased land - - - -
Leased building - - 177 -
Leased equipment 184 - - -
Less: accumulated depreciation/amortization (369,114) (97,865) (237,785) (35,824) Total noncurrent assets 963,707 226,405 259,755 18,906 Total assets 1,176,042 292,108 316,136 77,042

DEFERRED OUTFLOWS OF RESOURCES
Loss on refunding of debt 7,565 2,337 - - Pensions 6,468 2,070 2,765 3,542 OPEB 1,022 390 569 802
Total deferred outflows of resources 15,055 4,797 3,334 4,344 Business-type Activities - Enterprise Funds
Fund Fund
Storm
Water Wastewater Drainage
Fund
The notes to the basic financial statements are an integral part of this statement.

Page 1 of 4 ends

34 City of Sacramento
Proprietary Funds
Statement of Net Position
June 30, 2022
(in thousands)
ASSETS
Current assets:

Cash and investments held by City
Cash and investments held by fiscal agent
Receivables, net:

Taxes
Accounts
Loans
Intergovernmental
Leases
Interest
Due from other funds
Inventories
Prepaid items
Intangible asset, current portion
Total current assets
Noncurrent assets:

Restricted assets:

Cash and investments held by City
Cash and investments held by fiscal agent
Advances to other funds
Leases receivable
Loans receivable
Intangible assets
Capital assets:

Land
Buildings and improvements
Machinery and equipment
Vehicles
Transmission and distribution system
Construction in progress
Software
Easements
Leased land
Leased building
Leased equipment
Less: accumulated depreciation/amortization
Total noncurrent assets
Total assets

DEFERRED OUTFLOWS OF RESOURCES
Loss on refunding of debt
Pensions
OPEB
Total deferred outflows of resources
Community Other
Center Enterprise
Fund Funds
33,376$ 24,887 $ 396,813 $ 133,080 $ -
- - 884
2,998 - 2,998 -
419 714 49,772 5,174
- - 47 -
- - 2,070 -
- 262 481
126 41 1,386 298
- - - 1,907
- - 1,591 -
1 12 233 4,917
- 8 8 -
36,920 25,924 455,399 146,260 12,594 - 91,633 -
6,924 - 10,785 -
- - - 12,625
- 8,042 10,460 -
- - 922 -
- 104 104 -
20,071 5,825 48,951 -
113,040 63,538 464,915 7,454
4,913 6,235 162,097 543 - - - 204,106
- -
1,571,737 -
363,955 5,966 444,855 144
46 32 13,535 256
- - 291 -
- 1,978 1,978
- - 177 35
- - 184 -
(
72,617) (45,418) (858,623) (119,150) 448,926 46,302 1,964,001 106,013 485,846 72,226 2,419,400 252,273 - - 9,902 -
1,229 1,301 17,375 1,761 386 295 3,464 438
1,615 1,596 30,741 2,199 Tota
l
Activities -
Internal
Service
Business-type Activities - Enterprise Funds
Governmental
Funds
The notes to the basic financial statements are an integral part of this statement. (continued)

Page 2 of 4 ends

35 City of Sacramento
Proprietary Funds
Statement of Net Position
June 30, 2022
(in thousands)
So
lid Waste
Fund

LIABILITIES
Current liabilities:

Accounts payable 4,723 14,562 1,375 2,888 Due to other funds -
- - -
Ac
crued payroll 922 199 356 502
Accrued compensated absences 260 73 123 98
Interest payable 3,177 642 30 41
Liability for landfill closure - - - 298
D
eposits 5 - 487 -
U
nearned revenue 2,450 - 292 -
Ac
crued claims and judgments 77 162 143 258
Lease liabilities - - 34 -
R
evenue and other bonds payable, net 16,208 2,320 - 1,265 N
otes payable 3,437 - 95 -
To
tal current liabilities 31,259 17,958 2,935 5,350 Noncurrent liabilities:

Accrued compensated absences 3,594 959 1,479 1,642 Advances from other funds -
- - -
W
ater fee credits 192 - - -
W
astewater fee credits - 10,772 - -
Ne
t OPEB liability 10,290 3,922 4,434 14,891 Accrued claims and judgments - - - -
L
iability for landfill closure - - - 3,740
Leas
e liabilities - - 108 -
R
evenue and other bonds payable, net 341,802 56,608 - 10,343 N
otes payable 137,835 - 1,844 -
N
et pension liability 24,533 8,909 22,527 13,361 Total noncurrent liabilities 518,246 81,170 30,392 43,977 Total liabilities 549,505 99,128 33,327 49,327

DEFERRED INFLOWS OF RESOURCES
Gain on refunding of debt - - - 183
Pens
ions 14,375 4,274 6,773 5,653 OPEB 5,587 1,781 2,569 4,972 Leases 854 - - 1,739
T
otal deferred inflows of resources 20,816 6,055 9,342 12,547

NET POSITION
Net investment in capital assets 406,247 152,701 255,405 3,191 Restricted for:

Capital projects 45,942 -
- -
Other
programs - - 1,621 973
U
nrestricted 168,587 39,021 19,775 15,348 T
otal net position 620,776$ 191,722$ 276,801$ 19,512$ Business-type Activities - Enterprise Funds
Drainage
Fund Fund Fund
Water Wastewater
Storm
(continued) The notes to the basic financial statem ents are an integral part of this statement.

Page 3 of 4 ends

36 City of Sacramento
Proprietary Funds
Statement of Net Position
June 30, 2022
(in thousands)

LIABILITIES
Current liabilities:

Accounts payable
Due to other funds
Accrued payroll
Accrued compensated absences
Interest payable
Liability for landfill closure
Deposits
Unearned revenue
Accrued claims and judgments
Lease liabilities
Revenue and other bonds payable, net
Notes payable
Total current liabilities
Noncurrent liabilities:

Accrued compensated absences
Advances from other funds
Water fee credits
Wastewater fee credits
Net OPEB liability
Accrued claims and judgments
Liability for landfill closure
Lease liabilities
Revenue and other bonds payable, net
Notes payable
Net pension liability
Total noncurrent liabilities
Total liabilities

DEFERRED INFLOWS OF RESOURCES
Gain on refunding of debt
Pensions
OPEB
Leases
Total deferred inflows of resources

NET POSITION
Net investment in capital assets
Restricted for:

Capital projects
Other programs
Unrestricted
Total net position
Community Other
Center Enterprise
Fund Funds
5,350 2,238 31,136 5,856 250 -
250 -
194
317 2,490 329
41 42 637 62
1,277 41 5,208 2
-
-
298 -
- 502 994 -
819 362 3,923 228
5 15 660 28,834
- 108 142 14
7,655 1,191 28,639 411
- - 3,532 -
15,591 4,816 77,909 35,736 561 805 9,040 1,243
4,781 - 4,781 -
- - 192 -
- - 10,772 -
193 1,360 35,090 4,753
- - - 83,060
- - 3,740 -
1,762 1,870 8
347,012 9,808 765,573 -
- - 139,679 -
6,120 7,229 82,679 9,853
358,667 20,964 1,053,416 98,917
374,258 25,780 1,131,325 134,653 - 170 353 -
1,914 2,975 35,964 4,836
917 1,176 17,002 -
- 7,966 10,559 2,201
2,831 12,287 63,878 7,037 95,484 24,723 937,751 90,591 - - 45,942 -
- - 2,594 -
14,888 11,032 268,651 22,191 110,372$ 35,755$ 1,254,938$ 112,782$
Tota
l Funds
Activities -
Internal
Service
Governmental
Business-type Activities - Enterprise Funds
The notes to the basic financial statements are an integral part of this statement.

Page 4 of 4 ends

37 City of Sacramento
Proprietary Funds
Statement of Revenues, Expenses
and Changes in Net Position
For the Fiscal Year Ended June 30, 2022
(in thousands)
Storm
Wastewater Drainage Solid Waste
Fund Fund Fund
Operating revenues:

Charges for services:

User fees and charges 136,493$ 43,141$ 39,960$ 75,856$ Rents and concessions 60 - 49 163
Charge to other agencies for contract services - 1,186 1,892 - Miscellaneous 60 - - 202
Total operating revenues 136,613 44,327 41,901 76,221 Operating expenses:

Employee services 35,293 10,543 13,709 16,546
Services and supplies 24,691 13,541 16,143 45,050
Depreciation/amortization 27,184 4,879 11,215 1,226
Insurance premiums - - - -
Claims and judgments 33 150 103 83
Total operating expenses 87,201 29,113 41,170 62,905 Operating income (loss) 49,412
15,214 731 13,316
Nonoperating revenues (expenses):

Interest and investment revenue (loss) (13,603) (3,338) (2,507) (2,540) Transient occupancy taxes - - - -
Revenue from other agencies 552 65 25 1,099
Insurance and other claim recoveries - - - -
Interest expense (14,322) (1,715) (68) (323)
Amortization of bond prepaid insurance (23) - - -
Gain on disposition of capital assets - - - -
Total nonoperating revenues (expenses) (27,396) (4,988) (2,550) (1,764) Income (loss) before capital contributions and transfers 22,016 10,226 (1,819) 11,552 Capital contributions 7,056 3,990 6,116 -
Transfers in 117 62 53 349
Transfers out (15,096) (4,765) (4,602) (8,414)
Changes in net position 14,093 9,513 (252) 3,487
Total net position, beginning of year 606,683 182,209 277,053 16,025 Total net position, end of year 620,776$ 191,722$ 276,801$ 19,512$ Business-type Activities - Enterprise Funds
Fund
Water
The notes to the basic financial statements are an integral part of this statement. 38

Page 1 of 2 ends

City of Sacramento
Proprietary Funds
Statement of Revenues, Expenses
and Changes in Net Position
For the Fiscal Year Ended June 30, 2022
(in thousands)
Governmental
Activities -
Other Internal
Enterprise Service
Funds Total Funds
Operating revenues:

Charges for services:

User fees and charges 2,837
$
17,374$ 315,661$ 104,868$
Rents and concessions 7,303 890 8,465 -
Charge to other agencies for contract services - - 3,078 - Miscellaneous - 69 331 125
Total operating revenues 10,140 18,333 327,535 104,993 Operating expenses:

Employee services 5,225 7,960 89,276 11,333
Services and supplies 8,530 6,405 114,360 33,911 Depreciation/amortization 1,384 1,566 47,454 15,302
Insurance premiums - - - 12,336
Claims and judgments - 33 402 30,766
Total operating expenses 15,139 15,964 251,492 103,648 Operating income (loss)
(4,999) 2,369 76,043 1,345
Nonoperating revenues (expenses):

Interest and investment revenue (loss) (2,339) 313 (24,014) (4,711) Transient occupancy taxes 26,843 - 26,843 -
Revenue from other agencies - 123 1,864 -
Insurance and other claim recoveries - - - 2,374
Interest expense (14,317) (337) (31,082) (16)
Amortization of bond prepaid insurance - - (23) -
Gain on disposition of capital assets - - - 151
Total nonoperating revenues (expenses) 10,187 99
(26,412) (2,202)
Income (loss) before capital contributions and transfers 5,188 2,468 49,631 (857) Capital contributions - - 17,162 -
Transfers in 9,461 10,458 20,500 21
Transfers out (2,630) (10,988) (46,495) (1,071)
Changes in net position 12,019 1,938 40,798 (1,907)
Total net position, beginning of year 98,353 33,817 1,214,140 114,689 Total net position, end of year 110,372$ 35,755$ 1,254,938$ 112,782$ Community
Center
Fund
Business-type Activities - Enterprise Funds
The notes to the basic financial statements are an integral part of this statement. 39

Page 2 of 2 ends

City of Sacramento
Proprietary Funds
Statement of Cash Flows
For the Fiscal Year Ended June 30, 2022
(in thousands)
Storm
Water Wastewater Drainage Solid Waste
Fund Fund Fund Fund
Cash flows from operating activities:

Receipts from customers and users 139,475 $ 46,218 $ 41,902 $ 75,495 $ Receipts from interfund services provided - - - -
Payments to suppliers (24,634) (12,969) (16,560) (44,632) Payments to employees (40,882) (12,228) (15,956) (19,648) Claims and judgments paid (40) (118) (90) (105)
Net cash provided by (used for) operating activities 73,919 20,903 9,296 11,110 Cash flows from noncapital financing activities:

Transient occupancy taxes - - - -
Transfers in from other funds 117 62 53 349 Transfers out to other funds (14,576) (4,719) (4,602) (8,306) Collections on interfund loans - - - -
Loans made to other funds - - - -
Interfund loan repayments - - - -
Intergovernmental revenue received 424 65 25 1,224
Net cash provided by (used for) noncapital financing activities (14,035) (4,592) (4,524) (6,733) Cash flows from capital and related financing activities:

Acquisition and construction of capital assets (17,004) (18,947) (4,320) (1,842) Proceeds from sale of capital assets - - - -
Proceeds from issuance of debt 22,646 - - -
Principal payments on capital debt (17,875) (1,900) (92) (1,055) Interest payments on capital debt (16,499) (1,965) (69) (513) Principal payments on lease liabilities (61) - (35) -
In
terest payments on lease liabilities - - (1) -
Transfers in from other funds - - - -
Transfers out to other funds (520) (46) - (108)
Capital contributions received 4,747 3,201 - - Receipts from leases 27 - - 153
Collection of interest from leases 5 - - 24
Loan repayments received - - 46 -
Cash reimbursement for fee credits - (1,631) - -
Net cash used for capital and related financing activities (24,534) (21,288) (4,471) (3,341) Cash flows from investing activities:

Collection (loss) of interest and investment revenue (13,705) (3,323) (2,506) (2,568) Net increase (decrease) in cash and cash equivalents 21,645 (8,300) (2,205) (1,532) Cash and cash equivalents, beginning of year 238,854 71,837 50,636 50,515 Cash and cash equivalents, end of year 260,499$ 63,537$ 48,431$ 48,983$ Business-type Activities - Enterprise Funds
The notes to the basic financial statements are an integral part of this statement.

Page 1 of 4 ends

40 City of Sacramento
Proprietary Funds
Statement of Cash Flows
For the Fiscal Year Ended June 30, 2022
(in thousands)
Cash flows from operating activities:

Receipts from customers and users
Receipts from interfund services provided
Payments to suppliers
Payments to employees
Claims and judgments paid
Net cash provided by (used for) operating activities
Cash flows from noncapital financing activities:

Transient occupancy taxes
Transfers in from other funds
Transfers out to other funds
Collections on interfund loans
Loans made to other funds
Interfund loan repayments
Intergovernmental revenue received
Net cash provided by (used for) noncapital financing activities Cash flows from capital and related financing activities:

Acquisition and construction of capital assets
Proceeds from sale of capital assets
Proceeds from issuance of debt
Principal payments on capital debt
Interest payments on capital debt
Principal payments on lease liabilities
Interest payments on lease liabilities
Transfers in from other funds
Transfers out to other funds
Capital contributions received
Receipts from leases
Collection of interest from leases
Loan repayments received
Cash reimbursement for fee credits
Net cash used for capital and related financing activities Cash flows from investing activities:

Collection (loss) of interest and investment revenue
Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of
year
Community Other
Center Enterprise
Fund Funds Total
9,990$ 17,714 $ 330,794 $ - $
- - - 179,009 (6,971) (6,090) (111,856) (119,808) (6,256) (8,933) (103,903) (13,098) - (24) (377) (24,001) (3,237) 2,667 114,658 22,102
26,522 - 26,522 -
6,720 10,458 17,759 -
(2,630) (1,488) (36,321) (1,026) - - - 4,179
- - - (1,657) (250) - (250) -
- 123 1,861 -
30,362 9,093 9,571 1,496
(32,421) (1,147) (75,681) (19,148) - - - 870
- - 22,646 -
(6,150) (990) (28,062) (13) (15,559) (486) (35,091) (21)
- (108) (204) -
- (
28) (29) -
2,741 - 2,741 21
- (9,500) (10,174) (45)
- - 7,948 -
- 201 381 -
- 84 113 -
- - 46 -
- - (1,631) -
(51,389) (11,974) (116,997) (18,336) (2,263) 188 (24,177) (4,753) (26,527) (26) (16,945) 509
79,421 24,913 516,176 133,455
52,894$ 24,887$ 499,231$ 133,964$
Governmental
Activities -
Internal
Service
Funds
Business-type Activities - Enterprise Funds
The notes to the basic financial statements are an integral part of this statement. (continued)

Page 2 of 4 ends

41 City of Sacramento
Proprietary Funds
Statement of Cash Flows
For the Fiscal Year Ended June 30, 2022
(in thousands)
Reconciliation of cash and cash equivalents
to the Statement of Net Position:

Cash and investments held by City 189,894 $ 54,001 $ 47,394 $ 47,261 $ Cash and investments held by fiscal agent -
- - -
R
estricted cash and investments held by City 67,155 9,125 1,037 1,722 Restricted cash and investments held by fiscal agent 3,450 411 - - T
otal cash and cash equivalents, end of year 260,499$ 63,537$ 48,431$ 48,983$ Reconciliation of operating income (loss) to net
cash provided by (used for) operating activities:

Operating income (loss) 49,412$ 15,214$ 731$ 13,316$ Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities:

Depreciation/amortization expense 26,895 4,623 10,902 1,038 Amortization of intangible assets 289 256 313 188
Nonoperating claims and judgments - - - -
C
hanges in assets, liabilities, and deferred outflows and inflows of resources:

Accounts receivable, net 3,492 1,891 (588) ( 563)
Inter
governmental receivables - - 297 -
Inv
entories (391) 10 18 -
Pr
epaid items (6) - 16 -
Ac
counts payable 454 562 (436) 719
Ac
crued payroll (66) (
42) 13 (
3)
Ac
crued compensated absences 404 151 313 203 Ac
crued claims and judgments (7) 32 13 (
22)
L
iability for landfill closure - - - (
298)
Deposits (1) - (
15) (
3)
U
nearned revenue (535) - 292 -
W
ater fee credits (34) - - -
N
et pension liability and related deferred outflows/inflows of resources (4,484) (1,244) ( 1,770) (2,170)
Net OPEB liability and related deferred outflows/inflows of resources (1,443) (550) ( 803) (
1,132)
Deferred inflows related to leases (60) - - (163)
73,919$ 20,903$ 9,296$ 11,110$
2,634$ 1,187$ 6,116$ -$
1,720 339 - 160
(131) (116) - -
- - - -
(23) - - -
- - - -
1,354 432 310 795
Net cash provided by (used for) operating activities
Noncash investing, capital and financing activities:

Page 3 of 4 ends

42 City of Sacramento
Proprietary Funds
Statement of Cash Flows
For the Fiscal Year Ended June 30, 2022
(in thousands)
Reconciliation of cash and cash equivalents
to the Statement of Net Position:

Cash and investments held by City
Cash and investments held by fiscal agent
Restricted cash and investments held by City
Restricted cash and investments held by fiscal agent
Total cash and cash equivalents, end of year
Reconciliation of operating income (loss) to net
cash
provided by (used for) operating activities:

Operating income (loss)
Adjustments to reconcile operating income (loss) to net cash provided by
(used for) operating activities:

Depreciation/amortization expense
Amortization of
intangible assets
Nonoperating claims and judgments
Changes in assets, liabilities, and deferred outflows and inflows of resources:

Accounts receivable, net
Intergovernmental receivables
Inventories
Prepaid items
Accounts payable
Accrued payroll
Accrued compensated absences
Accrued claims and judgments
Liability for landfill closure
Deposits
Unearned revenue
Water fee credits
Net pension liability and related deferred outflows/inflows of resources Net OPEB liability and related deferred outflows/inflows of resources Deferred inflows related to leases
Net cash provided by (used for) operating activities
Noncash investing, capital and financing activities:

Contributions of capital assets
Amortization of bond premium and discount
Amortization of bond loss on refunding
Amortization of bond gain on refunding
Amortization of bond prepaid insurance
Increase in prepaid items for capital as
sets
Capital asset acquisitions on accounts payable
Fee credit reimbursement accounts payable
33,376$ 24,887 $ 396,813 $ 133,080 $
- - - 884
12,594 - 91,633 -
6,924 - 10,785 -
52,894$ 24,887$ 499,231$ 133,964$
(4,999)$ 2,369$ 76,043$ 1,345$
1,384 1,557 46,399 15,302
- 9 1,055 -
- - - (2,676)
(418) 6 3,820 4
- - 297 -
- - (363) -
(1) 1 10 176
1,560 314 3,173 310
84 99 85 (19)
183 198 1,452 149
- 9 25 9,441
- - (298) -
- (32) (51) (5)
268 (54) (29) (29)
- - (34) -
(753) (853) (11,274) (
1,278)
(545) (417) (4,890) (618)
- (539) (762) -
(3,237)$ 2,667$ 114,658$ 22,102$
-$ -$ 9,937$ -$
1,259 151 3,629 5
- - (247) -
- 24 24 -
- - (23) -
- - - 1,347
2,125 394 5,410 2,365
- - 1,509 -
Internal
Governmental
Activities -Business-type Activities - Enterprise Funds Service
Total
Center Enterprise
Fund Funds Funds
Community Other
The notes to the basic financial statements are an integral part of this statement.

Page 4 of 4 ends

43 City of Sacramento
Fiduciary Funds
Statement of Fiduciary Net Position
June 30, 2022
(in thousands)
Pension Private-Purpos e Investment Pool Othe r
Trust Trust Custodial Custodial
Fund Fund Fund Funds
ASSETS
Cash and investments held by City 7,825$ 12,435$ 122,690$ 155,428$ Cash and investments held by fiscal agent - 21,370 - 4,201 Prepaid items - 151 - -
Receivables, net:

Interest 888 - 269 287
Special assessments - - - 316
Investments, at fair value:

Corporate bonds/notes 45,810 - - -
Equities 21,197 - - -
Exchange traded funds 149,073 -- -
Mortgage loans 558 - - -
Municipal bonds/notes 28,798 -- -
U.S. agencies 745 - - -
U.S. Treasury bonds 1,569 - - -
Restricted assets:

Cash and investments held by City - - - 5,228 Cash and investments held by fiscal agent - - - 21,09 5 Loans receivable - 3,875 - -
Capital assets:

Land - 4,969 - -
Buildin
gs and improvements - 141 - -
Less: accumulated depreciation - (48) - -
Total assets 256,463 42,893 122,959 186,555

DEFERRED OUTFLOWS OF RESOURCES
Loss on refunding of debt - 993 - -

LIABILITIES
Accounts payable 3 1,689 - 46
Benefits payable 2,289 - - -
Due to bondholders - - - 44,420 Interest payable - 259 - -
Contracts payable - 12,059 - -
Bonds payable - 33,871 - -
Notes payable - 164,428 - -
Total liabilities 2,292 212,306 - 44,466

NET POSITION
Held in trust for:

Restricted for pension
s 254,171 - - -
Redevelopment dissolution - (168,420) - -
Held for external pool participants - - 122,959 142,089 Total net position (deficit)
254,171$ (168,420)$ 122,959$
142,089$
The notes to the basic financial statements are an integral part of this statement. 44 City of Sacramento
Fiduciary Funds
Statement of Changes in Fiduciary Net Position
For the Fiscal Year Ended June 30, 2022
(in thousands)
Pension Private-Purpos e Investment Pool Othe r
Trust Trust Custodial Custodial
Fund Fund Fund Funds
Additions:

Deposits - $ -$ 110,725$ 6,579$
Property taxes - 27,234 - -
Special assessments - - - 26,038
Fines, forfeits, and penalties - - - 3
Contributions:

Employer 3,479 - - -
Employees 9 - - -
Total contributions 3,488 - - -
Investment income:

From investment activities:

Net depreciation in fair value of investment
s (37,595) - (5,568) (7,693)
Interest 2,779 230 1,104 1,208
Dividends 3,732 - - -
Total investment income (loss) (31,084) 230 (4,464) (6,485) Investment expenses:

Banking, interest, and fiscal agent expense
s 25 - 275 -
Professional services 1,196 - - -
Total investment expenses 1,221 - 275 -
Net income (loss) from investment activities (32,305) 230 (4,739) (6,485) Total additions (28,817) 27,464 105,986 26,135 Deductions:
28,145 - - -
- - 105,437 29,008
- 14,791 - -
- (415) - -
- 177 - -
- - - 23,496
- - - 1,243
- - - 86
Benefit payments
Withdrawals
Interest expense
Other enforceable obligations
Loan forgiveness
Paid to bondholders
Administrative expenses
Developer reimbursements
Depreciation expense - 4 - - Total deductions 28,145 14,557 105,437 53,833
Changes in net position (56,962) 12,907 549 (27,698) Net position (deficit), beginning of year 311,133 (181,327 ) 122,410 169,787 Net position (deficit), end of year 254,171$ (168,420)$ 122,959$ 142,089$ The notes to the basic financial statements are an integral part of this statement. 45 THIS PAGE INTENTIONALLY LEFT BLANK
46 Notes to the Basic
Financial
Statements
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 1 – SU

MMARY OF SIGNIFICANT ACCOUNTING POLICIES

DEFINITION OF REPORTING ENTITY
The City of Sacramento (City) was incorporated in 1849 under th e laws of the State of California. Sacramento is a charter city and operates under a City Council – City Manager form of government. The City provides a full range of municipal services including police, fire, water, wa stewater, storm drainage, so lid waste, construction and maintenance of streets, planning and zoning, code enforcement, parks, recreation programs, and cultural activities.

These basic financial statements present the financial status of the City and its component units, which are included in the City’s reporting entity because of the significance of their operational or financial relationships with the City.

Blended Component Units
The Sacramento City Financing Authority (SCFA) is a joint exercise of powers ent ity created by the City and the former Redevelopment Agency of the City of Sacramento to facilitate the financing and refinancing of public capital facilities. Most of the debt of the SC FA is backed by the City’s General Fund. The SCFA is governed by the City Council.

The Sacram
ento Public Financing Authority (SPFA) is a joint exercise of powers entity created by the City and the Housing Authority of the City of Sacramento (Housing Authority) to facilitate the financing and refinancing of public capital facilities. The debt of the SPFA is backed by the City. The SPFA is governed by the City Council.

Fiduciary Component Units
Sacramento City Employees’ Retirement System (SCERS) is a single employer pension plan sponsored and administered by the City for City employees, except p ublic safety employees, hired before January 29, 1977 and public safety employees who retired with SCERS benefits before December 30, 1989. Under provisions of the City Charter, SCERS is managed by the Administration, Investment and Fiscal Management Board (the SCERS Board), consisting of the City Manager, City Director of Finance, City Treasurer and two residents of the City appointed by the City Council. Duties of the SCERS Board include the adoption of investment standards for SCERS, the establishment of contribution rates, the adm inistration and investment of funds, the selection of investment advisors, the crediting of interest, and any action relating to the fiscal management of SCERS. Stand- alone financial statements may be obtained at https://www.cityofsacramento.org/Finance/Accounting/Reporting.

The Succe
ssor Agency to the Redevelopment Agency of the City of Sacramento (Successor Agency) was created to serve as a custodian for the assets and to wind down the affairs of the former Redevelopment Agency of the City of Sacramento. The City was designated to serve as the Successor Agency subject to control of a County Oversight Board. The Oversight Board is comprised of seven members; two of which will be appointed by the Oversight Board: a Board member or staff person from the County of Sacramento (County), member of the public, member appointed by the city selection committee, repr esentative from a special di strict as appointed by the independent special district selection committee, repres entative appointed by the County Board of Education, representative appointed by the Chancellor of the California Community Colleges, and a representative of the largest number of successor agency employees in the County appointed by the recognized employee organization.

Based upon the nature of the Successor Agency’s custodial role, it is reported as a fiduciary fund (private-purpose trust fund).

COUNTING POLICIES
The financial statements of the City have been prepared in conformity with accounting principles generally accepte
d in the United States of America as applie d to governmental agencies. The Governmental Accounting Standards Board (GASB) is the accept ed standard-setting body for establishing govern mental accounting and financial reporting principles. The more significant accounting policies of the City are described below. 47 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Governmental Accounting Standards Implemented During the Fiscal Year Ended June 30, 2022 GASB Statement No. 87 – In June 2017, GASB issued Statement No. 87, Leases. The objective of this statement is to better meet the information needs of financial statement users by improving accounting and financial reporting for leases; enhancing the comparability of financial statements between governme nts; and enhancing the relevance, reliability (representational faithfulness), and consistency of information about the leas ing activities of governments. The provisions in Statement 87 are effect ive for fisc al years beginning after June 15, 2021. The applicable provisions were implemented July 1, 2021 and as a result, the City has restated lease related assets, liabilities, and deferred inflows of resources for certain City funds, as well as governmental and business-type activities. There was no restatement to beginning net position. See note 6 for more information.

GASB Statement No. 92 – In January 2020, GASB issued Statement No. 92, Omnibus 2020. The objectives of this statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressi ng practice issues that have been identified during implementation and application of certain GASB Statements. The provisions in Statement 92 are effective for fiscal years beginning after June 15, 2021. The applicable provisions were implemented July 1, 2021 and did not have a material impact to the financial statements.

GASB Statement No. 93 – In Marc h 2020, GASB issued Statement No. 93, Replacement of Interbank Offered Rates. The objective of this statement is to address those and other accounting and financial reporting implications that result from the replacement of an interbank offered rate. The provisions in Statement 93 are effective for fiscal years beginning after June 15, 2021. The applicable provisions were implemented July 1, 2021 and did not have a material impact to the financial statements.

GASB Statement No. 97 – In June 2020, GASB issued Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans – an amendment of GASB Statements No. 14 and No. 84, and a supersession of GASB Statement No. 32. The primary objectives of this statement are to (1) increase consistency and comparability related to the reporting of fiduciary component units in circumstances in which a potential component unit does not have a governing board and the primary government performs the duties that a govern ing board typic ally would perform; (2) mitigate costs associated with the reporting of certain defined contribution pension plans, defined contribution other postemployment benefit (OPEB) plans, and employee benefit plans other than pension plans or OPEB plans (other employee benefit plans) as fiduciary component units in fiduciary fund financial s tatements; and (3) enhance the relevance, consistency, and comparability of the accounting and financial reporting for Internal Rev enue Code Section 457 deferred compensation plan s that meet the definition of a pen sion plan and for benefits provided through those plans. The provisions in Statement 97 ar e effective for fiscal years beginning after June 15, 2021.

The applicable provisions were implemented July 1, 2021 and did not have a material impact to the financial statements
.

GASB Statement No. 99 – In April 2022, GASB issued Statement No. 99, Omnibus 2022. The objectives of this statement are to enhance comparability in accounting and fi nancial reporting and to improve the consistency of authoritative literature by addressing (1) practice iss ues that have been identified during implementation and application of certain GASB Statement s and (2) ac counting and financial reporting for financial guarantees. The provisions of paragraphs 26 through 32 of Statement 99 are effective upon issuance in April 2022. The applicable provisions were implemented and did not have a material impact to the financial statements. 48 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 1 – SU
MMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Upcoming Governmental Accounting Standards Implementation The City is currently analyzing its accounting and financial reporting practices to determine the potential impact on the financial statements of the following GASB Statements:

GASB Statement No. 91 – In May 2019, the GASB issued Statement No. 91, Conduit Debt Obligations . The objectives of this statement are to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. The provisions in Statement 91 are effective for fiscal years beginning after December 15, 2021. The City has not determined the effect of implementing this statement.

GASB Statement No. 94 – In March 2020, GASB issued Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements. The primary objective of this statement is to improve financial reporting by addressing issues related to public-private and public-public partnership arrangements. The provisions in Statement 94 are effective for fiscal years beginning after June 15, 2022. The City has not determined the effect of implementing this statement.

GASB Statement No. 96 – In May 2 020, GASB issued Statement No. 96, Subscription-Based Information Technology Arrangements. This statement provides guidance on the accounting and financial reporting for subscription-based information technology arrangements for government end users. The provisions in Statement 96 are effective for fiscal years beginning after June 15, 2022. The City has not determined the effect of implementing this statement.

The provisions of paragraphs 4 through 10 of Statement 99 are effective for fiscal years beginning after June 15, 2023. The City has not determined the effect of implementing paragraphs 4 through 10 and 11 through 15 of this statement.

GASB Statement No. 100 – In June 2022, GASB issued Statement No. 100, Accounting Changes and Error Corrections – an amendment of GASB Statement No. 62. The objective of this statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability. The provisions in Statement 100 are effective for fiscal years beginning after June 15, 2023. The City has not determined the effect of implementing this statement.

GASB Statement No. 101 – In June 2022, GASB issued Statement No. 101, Compensated Absences. The objective of this statement is to better meet the info rmation needs of financial st atement users by updating the recognition and measurement guidance for compensated ab sences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. The provisions in Statement 101 are effective for fiscal years beginning after December 15, 2023. The City has not determined the effect of implementing this statement. 49 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 1 – SU
MMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the stateme nt of activities) report information on all the non-fiduciary activities of the pr imary government and its component units. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely significantly on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the City is financially accountable.

The statement of activities demonstrates the degree to whic h the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Certain indirect costs are allocated to expens es and capital assets of governmental and business-type activities. At the government-wide level, citywide and community support expenses/expenditures within the General Fund are allocated to City departments. Utilities expenditures within the General Fund is allocated to public works. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital r equirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.

As a general rule the effect of interfund activity has been removed from the government-wide financial statements.

Internal service fund activity has been eliminated from the statement of activities. The effect of interfund services provided and used between functions, such as the sale of water from the Water Fund to the General Fund, has not been eliminated in the statement of activities. The City’s payments in lieu of taxes from its enterprise funds to the General Fund are reported as interfund transfers.

The accounts of the City are organi zed on the basis of funds. A fund is a separate accounting entity with a self- balancing set of accounts. Each fund was established for the purpose of accounting for specific activities in accordance with applicable regulations, restrictions, or limitations. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary f unds, even though fiduciary funds are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.

Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported usin g the economic resources measurement focus and
the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liab ility is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements have been met.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accountin g. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fisc al period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.

Property taxes, sales taxes, utility user taxes, interg overnmental revenue, special assessments, charges for services, and investment income associated with the curr ent fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of t he current fiscal period. A ll other revenue items are considered to be measurable and available only when cash is received by the City. 50 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 1 – SU
MMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) The City reports the following major governmental funds:

The Ge
neral Fund is the City’s primary operating fund and accounts for all financial resources of the general government, except those required to be accounted for in another fund.

The Measure U Fund was established to account for t he temporary half-cent sales tax approved by voters on November 6, 2012. On November 6, 2018, Sacramento voters approved a new version of the City’s Measure U sales and use tax eliminating the sunset provision and raising it from half-cent to one cent. The one cent sales and use tax was effective April 1, 2019.

The 2015 Golden 1 Center Lease Revenue Bond Fund accounts for debt service activities related to financing a portion of construction costs of a multi-purpose entertainment and sports complex located in the downtown area of Sacramento.

The Operating Grants Fund accounts for federal, state, and other agency grants received for various specific purposes.

The City reports the following major enterprise funds:

The Water Fund accounts for the operation and maint ena nce of the City’s water treatment and water transmission and distribution systems.

The Wastewater Fund accounts for the operation and maintena nce of the City’s wastewater system.

The Storm Drainage Fund accounts for the operation and maintenance of the City’s surface drainage system.

The Solid Waste Fund accounts for the collection and disposal of refuse throughout the City and for landfill clo
sure.

The Community Center Fund accounts for the operation and ma intenance of the City’s Community Center, including the theater and exhibit halls.

Additionally, the City reports the following fund types:

Internal Service Funds account for the financing of fl e et and risk management services to other departments on a cost reimbursement basis.

The Pension Trust Fund accounts for the assets held on behalf of the Sacramento City Employees’ Retirement System (SCERS) for pension benefit payments to qualified employees.

The Private-Purpose Trust Fund accounts for the assets receive d by the Successor Agency from the City’s former redevelopment agency in order to liquidate its enforceable obligations, pursuant to Assembly Bill X1 26 which dissolved redevelopment agencies in California.

Custodial Funds account for assets held by the City as a custodian for individuals, private organizations, and other governments. The City's Custodial Funds include assets held by the City for bonded assessment and community facilities districts and Investment Trust Funds. Investment Trust Funds account for the net position held on behalf of investors, in the City's investment pool and individual accounts, who are not part of the City's financial reporting entity.
51 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 1 – SU
MMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) Amounts reported as program revenues include 1) charge s to customers or applicants for goods, services, or privileges provided, including fees, fines, and forfeitures, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Program revenues also include earnings on investments that are legally restricted for a specific program. Internally dedicated resources are reported as general revenues rather than as program revenue. Likewise, general revenues include all taxes.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s enterprise funds and internal service funds are charges to customers for sa les and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation and amortization on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

When both restricted and unrestricted net position are available for use, it is the City’s practice to use restricted resources first followed by unrestricted resources as they are needed. When all fund balance types are available, it is the City’s practice to use restricted resources first, followed by committed, assigned, and unassigned resources as they are needed.

Permanent funds, commonly referred to as endowment f unds, are governmental funds used to report resources that are legally restricted to the extent that only earnings, and not principal, may be used for purposes that support City programs. The City has received endowments for va rious programs, a list of which can be found in the Permanent Funds section of the Combining and Individual Fund Financial Statements and Schedules. The investments of donor-restricted endowments have $6,048 of net appreciation that is available for authorization for expenditures by the governing board. The corpus of permanent funds is reported as Nonspendable Fund Balance and investment earnings available for expenditure are reported as Restricted Fund Balance in the fund level financial statements, and as Restricted for Nonexpendable Trust and Endowments in the statement of net position.

Funds are spent in accordance with legal trust agreements and the City budget, subject to State law governing the spending of endowment fund investment earnings in California Probate Code Section 18504.

Budget Information
The City Manager submits a proposed budget to the City Council no later than 60 days prior to the commencement of the fiscal
year. The City Council holds public hearings, modifies the City Manager’s recommendations, and adopts a final budget in June. The budget adoption resolution specifies that budgets will be controlled at the department level (e.g., police, fire, public works, parks and recreation etc.) by fund.

Annual budgets are adopted for the General Fund, Measure U Fund, the City/County Office of Metropolitan Water Planning (CCOMWP) Fund, the Cal EPA Fund, as well as certain activities within the Transportation and Development Fund, the Culture and Leisure Fund, the Parks and Recreation Fund, and the Special Districts Fund.

Annual budgets are also adopted for the enterprise and internal service funds, although they are not legally required. Multi-year project-length budgets are adopted for the General Fund, capital projects funds, and the Operating Grants Fund where appropriations remain authorized for each project until closed, irrespective of fiscal year. Expenditures are appropriated on a modified accr ual basis, except that co mmitments related to purchase orders are treated as expenditures in the year of commitment.

Budgets are modified throughout the year when the tax bas e changes, fees are modified, new revenue sources are identified, or programs are changed. The City Manager is authorized to administratively amend the budget during the year for transactions up to $250 without City Council approval. All other appropriation adjustments during the year require City Council approval. Unencumbered annual budget appropriations lapse at fiscal year-end. The City honors contracts represented by year-end encumbrances and the appropriations carried over provide authority to complete these transactions in future years. Multi- year project-length budget approp riations are automatically carried over into the next fiscal year.
52 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 1 – SU
MMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Financial Statements Elements
Fair Value Measurement – The City categorizes the fair value m easurements of its inve stments based on the hierarchy established by generally accepted accounting principles. The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure an asset’s fair value: Level 1 inputs are quoted prices in active markets for identical assets, Level 2 inputs are significant other observable inputs, and Level 3 inputs are significant unobservable inputs.

Property Taxes
- Article XIII of the California Constitution (Proposition 13) limits ad valorem taxes on real property to one percent of value plus taxes necessary to pay indebt edness approved by voters prior to July 1, 1978. The Article also established the 1975/76 as sessed valuation as the base and limit s annual increases to the cost-of- living, not to exceed two percent, for each year thereafte r. Property may also be reassessed to full market value after a sale, transfer of ownership, or completion of new construction. The State is prohibited under the Article from imposing new ad valorem, sales, or transactions taxes on real property. Local governments may impose special taxes (except on real property) with the approval of two-thirds of the qualified electors.

Property taxes are levied annually by the Sacramento County Assessor on July 1 and become a lien on property on the preceding January 1. Taxes are due November 1 and February 1 and are delinquent if not paid by December 10 and April 10, respectively.

The City participates in an alternative method of distribution of property tax levies and assessments known as the “Teeter Plan”. The State Revenue and Taxation Code allows counties to distribute secured real property, assessment and supplemental property taxes on an accrual ba sis resulting in full payment to cities each fiscal year. Any subsequent delinquent payments and related penalties and interest during a fiscal year will revert to the County. The Teeter Plan payment, which includes 95% of the outstanding accumulated delinquency, is included in property tax revenue. Under the Teeter Plan code, 5% of the delinquency must remain with the County as a reserve for Teeter Plan funding.

Receivables and Payables – Property taxes, sales taxes, utility user taxes, and other taxes, related to the current fiscal year are accrued as revenue and accounts receivable and considered available if received within 60 days of year end.

Federal and State grants are considered receivable and accrued as revenue when all eligibility requirements have been met under the accrual basis of accounting in the government-wide statement of net position. The amount recognized as revenue under the modified accrual basis of accounting is limited to the amount that is deemed measurable and available as described above.

Long-term loans receivable reported in the governmental fund statements are recorded with offsetting unavailable revenue because the amounts will not be received within 60 days after fiscal year-end. Long-term loans receivable reported in the proprietary fund statements, as well as long-term loans reported in the government-wide statements, are not offset by unava ilable revenue. Unbilled utility revenue earned is recognized as revenue and accounts receivable in the enterprise funds.

Activity between funds that is representative of lending/borrowing arrangements outstanding at the end of the fiscal year is referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as “due to/from other funds.” Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.” Inventories and Prepaid Items
- Inventories in the proprietary funds are stated at cost and consist of expendable materials and supplies. Inventories are expensed when consumed using the first-in, first-out (FIFO) method.

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items, using the consumption method, in both government-wide and fund financial statements. 53 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 1 – SU
MMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Financial Statements Elements (Continued)
Restricted Assets - Certain proceeds of debt issues, as well as ce rtain resources set aside for their repayment, are classified as restricted assets on the statements of net position and balance sheets because their use is limited by applicable bond covenants. Unspent developer impact fees are classified as restricted assets on the statements of net position for the Water and Wastewater enterprise funds.

Capital Assets - Capital assets are reported in the applicable governmental or business-type activities column in the government-wide financial statements, as well as the proprietary funds and fiduciary funds financial statements.

Capital assets are recorded at the lower of actual hist orical cost or acquisition value (as of the date donated for contributed assets) although for certain older assets estimated historical costs are used.

Capital assets are depreciated using the straight-line method over the following estimated useful lives:

Building and improvements Primarily 15 to 70 years
Transmission and distribution system Primarily 15 to 100 years Machinery, vehicles and equipment Primarily 5 to 30 years Software Primarily 5 to 20 years
Roadway network Primarily 20 to 70 years
Streetlight network Primarily 40 to 50 years
Park and park improvements Primarily 15 to 30 years
It is the policy of the City to
capitalize all land, buildings and improvements, equipment, and infrastructure assets, except assets costing less than $20, unless a federal funding source is utilized. All capital assets in excess of $5 financed by a federal funding source are capitalized. The City also capitalizes all intangible capital assets, primarily easements and software, except assets costing less than $100, unless a federal funding source is utilized. Costs of capital assets sold or retired (and related amounts of accumulated depreciation/am ortization) are eliminated from the accounts in the year of sale or retirement and the resulting gain or loss is included in the operating statement of the related proprietary fund, governmental activities, and business-type activities. In governmental funds, the sale of general capital assets is included in the statement of revenues, expenditures and changes in fund balances as proceeds from sale.

The Crocker Art Museum’s collection of works of art, hel d in trust by the City, has not been reported in these financial statements. The City has elected not to report the collection because it meets the three criteria for waiving capitalization: the collection is held for reasons other than financial gain; the collection is protected, kept unencumbered, cared for, and preserved; and the collection is subject to an organizational policy requiring that the proceeds from sales of collection items be used to acquire other items for the collection.

The intangible right-to-use leased assets are also reported as capital assets. Refer to the Lease section of Note 1 for further information.

Deferred Outflows/Inflows of Resources - In addition to assets, the statement of net position reports a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of net assets that applies to future periods and will not be recognized as an expense/expenditure until then. The City has three items, deferred outflows related to loss on refunding of debt, pensions, and OPEB, which qualify for reporting in this category.

In addition to liabilities, the statement of net position reports a separate section for deferred inflows of resources.

This separate financial statement element represents an acquisition of net assets that applies to future periods and will not be recognized as revenue until then. The City has five items recognized in the statement of net position:
deferred inflows related to gain on refunding of debt, service concession arrangement revenue, pensions, OPEB, and leases. In addition, there is one item recognized in the governmental funds, unavailable revenue, which qualifies for reporting in this category.
54 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 1 – SU
MMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Financial Statement Elements (Continued)
Compensated Absences - Benefit qualified employees accrue vaca tion, sick, and holiday benefits. A full-time employee may accumulate up to sixty days of vacation. Sick leave vests and may be accumulated until retirement.

An employee with sixty or more days of accumulated sick leave at the end of a calendar year may elect to receive a 25% payment of any unused sick leave earned in the pr evious calendar year. The amount of sick leave paid is deducted from the employee’s total accumulation. Upon retirement, employees with a minimum of 20 years of City service, excluding SCERS employees, have the option of converting their sick leave accumulation into CalPERS service credit hours, or receiving a cash payment of one- third of the accumulated sick leave. The City accrues expected cash payments of accumulated sick leave at fiscal year-end. Employees who leave the City and are not retiring forfeit any remaining sick leave.

Employees receive 14 holidays per calendar year. Employees accrue all or a portion of these 14 days during the year depending on their job classification. Classifications that accrue all 14 days get pai d in cash throughout the year whenever their holiday leave balances exceed the 14 days total. All other employees accrue one or two days of “floating” holiday time, depending on the bargaining unit, throughout the year in conjunction with their remaining twelve holidays. Employees who accrue “floating” holiday time get paid annually in January for any calendar year- end balance greater than eight hours.

All hourly employees have the option of being compensated for their overtime pay with compensatory time off (CTO). Depending on the employee’s CTO plan, the employee may accrue a maximum of 80, 120 or 160 hours of CTO. The employee’s applicable labor agreement or the City Council’s resolution for unrepresented employees determines the maximum accruable number of CTO hours.

All compensated absences are accr ued when earned in the government-wide and proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements.

Unearned Revenue - Unearned revenue in accrual-based statements arises when resources are received by the City before it has a legal claim to them (i.e., when grant monies are received prior to incurring qualified expenditures).

Long-term Obligations - In the government-wide and proprietary and fiduciary fund financial statements, long- term debt and other long-term obligations are reported as liabilities in the applicable st atement of net position.

Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Gains and losses on debt refunding are deferred and amortized over the shorter of the remaining life of the old debt or the life of the new debt using the straight-line method. B onds payable are reported net of bond premium or discount. Bond issuance costs, except prepaid bond insurance which is deferred and amortized, are reported as expenditures/expenses when incurred.

In the fund financial statements, governmental fund ty pes recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are report ed as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 55 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 1 – SU
MMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Financial Statement Elements (Continued)
Fund Balance - In the fun d financial statements, governmental funds report fund classifications that comprise a hierarchy based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. Nonspendable fund balances include amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact.

Amounts that are restricted to specific purposes, either by a) constraints placed on the use of resources by creditors, grantors, contributors, or laws or regulati ons of other governments or b) imposed by law through constitutional provisions or enabling legislation, are classified as restricted fund balances. Amounts that can only be used for specific purposes pursuant to constraints impos ed by the City Council through a resolution, which is the highest form of decision authority, are classified as committed fund balances. Amounts that are constrained by the City Council’s intent to be used for specific purpos es through a resolution, but are neither restricted nor committed, are classified as assigned fund balances. Negati ve fund balance in governmental funds and residual fund balance in the General Fund, after determining the fund balance classifications described above, is reported as unassigned fund balance. The General Fund is the only fund that can report a positive unassigned fund balance amount.

The City’s Economic Uncertainty Reserve (Reserve) is a stabilization arrangement in the General Fund and Measure U Fund reported as committed fund balance. The adopted Reserve goal is to achieve a reserve equal to 10% of annual General Fund and Measure U revenues and a target reserve equal to two months of regular ongoing General Fund and Measure U expenditures, including transfers. The City Manager may recommend a release from the Reserve when the gap between projected revenue and expenditures is greater than $1,000 in the proposed budget. Additions and releases from the Reserve must be approved by City Council by resolution.

Statement of Cash Flows - For purposes of the statement of cash flows, cash equivalents are defined as investments with original maturities of 90 days or less, which are readily convertible to known amounts of cash.

The City considers all pooled cash and investments (consisting of cash and investments and restricted cash and investments) held by the City as cash and cash equiva lents because the pool is used essentially as a demand deposit account from the standpoint of the funds. The City also considers all non-pooled cash and investments (consisting of cash with fiscal agent and restricted cash and investments held by fiscal agent) as cash and cash equivalents because investments meet the criteria for cash equivalents defined above.

Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires manag ement to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results could differ from those estimates.

Pensions - For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s California Public Employees’ Retirement System (CalPERS) and Sacramento Employees’ Retirement System (SCERS) Plans and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS and SCERS, respectively. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

Other Postemployment Benefits (OPEB) - For purposes of measuring the net OPEB liability and deferred outflows/inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City’s CalPERS Plan and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. 56 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 1 – SU
MMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Financial Statement Elements (Continued)
Leases, City as a Lessee - The City is a lessee in va rious noncancellable leases of land, buildings, and equipment.

For leases with a maximum possible term of 12 mont hs or less at commencement, the City recognizes expenses/expenditures based on the provisions of the lease agreement. For all other leases, the City recognizes a lease liability and an intangible right-to-use leased asset in the statement of net position.

At lease commencement, the City measures the lease liability at the present value of fixed payments expected to be made during the lease term. Subsequently, lease liabilit ies are reduced by the principal portion of lease payments made. The leased asset is initia lly measured at the initial amount of the lease liability, plus any initial direct costs ancillary to placing the underlying asset into service and lease payments made at or before the lease commencement date, less any lease incentives receiv ed. Subsequently, the leased asset is amortized into depreciation and amortization expense on a straight-line basis over the shorter of the lease term or the useful life of the underlying asset. If the City is reasonably certain of exercising a purchase option contained in a lease, the leased asset will be amortized over the useful life of the underlying asset. It is the policy of the City to capitalize all leased land, buildings, and equipment, except those with less than $20 of fixed payments expected to be made during the lease term, unless a federal funding source is ut ilized. All leased assets in excess of $5 financed by a federal funding source are capitalized. These same thresholds are used in the recognition of lease liabilities.

Leases, City as a Lessor - The City is a lessor in various noncancellable leases of land, buildings, and equipment.

For leases with a maximum possible term of 12 months or less at commencement, the City recognizes revenues based on the provisions of the lease agreement. For all other leases, the City recognizes a lease receivable and a deferred inflow of resources related to leases in the statement of net position and governmental fund balance sheet.

At lease commencement, the City measures the lease receivable at the present value of fixed payments expected to be received during the lease term. Subsequently, lease receivables are reduced by the principal portion of lease payments received. The deferred inflow of resources related to leases is initially measured at the initial amount of the lease receivable. Subsequently, the deferred inflow of resources related to leases is amortized into lease revenue on a straight-line basis over the term of the agreement. It is the policy of the City to recognize lease receivables and deferred inflow of resources related to leases for all leased out land, buildings, and equipment, except leases with less than $20 of fixed payments expected to be received during the lease term.

Other Lease Considerations - Key estimates and judgments include the City’s determination of the discount rate used to calculate the present value of the lease, lease term, and lease payments and receipts. The City generally uses its estimated incremental borrowing rate as the discount rate for leases unless the rate charged is explicitly stated or known. The City’s incremental borrowing rate for leases is based on the estimate of interest rates that the City would be charged for borrowing lease amounts during the term of the lease. The City uses an incremental borrowing rate of between 0.316% and 1.779%. The lease term includes noncancellable periods of lease arrangements, plus any additional periods covered by an opt ion to extend for which it is reasonably certain to be exercised or an option to terminate for which it is reasonably certain to not be exercised. Periods in which both the lessee and lessor have a unilateral option to terminate (or if both parties must agree to extend) are excluded from the lease term. Receipts and payments are evaluated by the City to determine if they should be included in the measurement of lease receivables and liabilities, including receipts and paym ents that require a determination of whether they are reasonably certain of being made, such as residual value guarantees, purchase options, termination penalties, and other receipts and payments.

The City monitors changes in circumstances that may require remeasurement of a lease agreement. When certain changes occur that are expected to significantly affect t he value of the lease, the lease amounts are remeasured and adjusted.
57 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 2 – CASH AND INVEST
MENTS
The following is a summary of cash and investments at June 30, 2022:

Government-wide
Statement of
Net Position
Fiduciary Funds
Statement of Fiduciary
Net Position Total
Cash and investments 1,286,414 $ 571,699$ 1,858,113$ Restricted cash and investments 135,411 26,323 161,734 Total 1,421,825$ 598,022$ 2,019,847$
Under the authority of the
Sacramento City Charter, the Sacramento City Council, by Resolution 2021-0229, has delegated its investment authority to the City Treasurer. The City Treasurer manages th e City’s investments in accordance with the City’s investment policy, which was last reaffirmed by the City Council on July 20, 2021. The City’s investment policy requires compliance with the California Government Code for investments of public funds.

The City’s investment policy also provides limits on rate anticipation, arbitrage, and other swap investments.

SCERS pension trust fund investments are managed by the SCERS Board pursuant to an investment policy adopted by the SCERS Board and approved by the City Council by Resolution 2021-0230. Investment standards adopted by the SCERS Board were last approved by the City Council on July 20, 2021. The investment policy allows the SCERS Board to invest in fixed income and equity securities deemed prudent. Pursuant to the investment policy, the SCERS Board annually allocates the funds to different investment groups. For fiscal year 2022, the asset allocations consisted of the following: 30% Fixed Income securities, 35% Large Cap Growth stocks, 27.5% Equity Income stocks and 7.5% International stocks. The investment policy allows for up to 5% variance from these approved allocation levels to provide flexibility to investment activities without altering the risk profile of the SCERS portfolio.

58 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 2 – CASH AND INVEST
MENTS (Continued)
The table below identifies the investment types that are authorized for public funds of the City by the California Government Code. The table also identifies certain prov isions of the California Government Code that address interest rate risk, credit risk, and concentration of credit risk.

Authorized Investment Type Maximum
Maturity
Maximum
Percentage of
Portfolio
Maximum
Investment
in One
Issuer
Minimum
Rating
Local agency bonds 5 years* None None None
U.S. Treasury obligations 5 years* None None None
U.S. agency securities 5 years* None None None
Supranational securities 5 years 30% None AA
Bankers' acceptances 180 days 40% 30% None
Commercial paper 270 days 25% 10% A1/P1
Negotiable certificates of deposit 5 years 30% None None Repurchase agreements 1 yea r None None None
Reverse repurchase and 92 days 20% of base value None None securities lending agreements of portfolio
Medium term notes (bank notes and 5 years* 30% None A
corporate bonds)
Mutual funds N/A 20% 10% Aaa
Money market mutual funds N/ A 20% 10% Aaa
Collateralized bank deposits 5 years None None None
Mortgage pass-through securities 5 years 20% None AA
Joint Powers Authority pool N/ A None None None
County pooled investment N/A None None None
Local Agency Investment Fund (LAIF) N/ A None None None *The City investment policy allows these investments to have maximu m maturities of 5 years, plus not more than 30 days. Such ap proved maturity extensions are authorized by California Government Code section 53601.

The table above does not address the investments held by the SCERS pension trust fund. The SCERS Board was established by the City Charter to maintain and manage investments of this system, including but not limited to the adoption of investment standards and t he administration and investment of t he funds. The statutory authority for the SCERS Board is created in Sacramento City Charter Section 383. Allowable investments are governed by the SCERS investment policy and are different than those prescribed by the City’s investment policy.

The table above also does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the City or other trust funds.

The tabl
e above also does not address investments of equities held by permanent funds that are governed by the provisions of the trust agreements.
59 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)

NOTE 2 – CASH AND INVESTMENTS (Continued)

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 its fair value is to changes in market interest rates. The City’s investment policy limits interest rate risk by requiring compliance with the California Government Code for investments of public funds, as described in detail above. One of the ways that the City and SCERS 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 maturing evenly over time as necessary to provide the cash flow and liquidity needed for operations.

Information about the sensitivity of the fair values of the City’s and SCERS’ investments (including investments held by bond trustees) to market interest rate fluctuations is provided by the following tables that show the distribution of the investments by maturity. The remaining maturity of the City’s and SCERS’ investments included in the tables below are based on the stated maturity dates of the individual investments, except in the case of variable rate investments where the maturity date is the next reset date. Variable rate securities are investments with terms that provide for the adjustment of interest rates on specified dates based on predefined mathematical formulas. The fair value of such investments can reasonably be expected to be affected at each interest rate reset date.

The City’s cash and investments by maturities as of June 30, 2022 are as follows:

Cash and Investment Type No Maturity Under 1 1-5 Over 5 Total Bank deposits 89,796$ -$ - $ -$ 89,796$ Commercial paper - 204,171 - - 204,171 Corporate bonds/notes - 87,508 403,572 780 491,860 Equities 5,568 - - - 5,568 Exchange traded funds 2,263 - - - 2,263 Investment Trust of California (CalTRUST) - 137,716 57,080 - 194,796 Local Agency Investment Fund (LAIF) - 46,800 - - 46,800 Municipal bonds/notes - 21,730 80,924 - 102,654 Money market mutual funds - 37,789 - - 37,789 Negotiable certificates of deposit - 49,422 55,307 - 104,729 Supranational securities - 9,950 19,842 - 29,792 U.S. agency securities - 6,155 429,422 - 435,577 U.S. Treasury notes - 259 18,218 - 18,477 Total Cash and Investments 97,627$ 601,500$ 1,064,365$ 780$ 1,764,272$

Remaining Maturity in Years

The $780 of corporate bonds/notes with remaining maturities longer than five years are held by other trust funds. The $5,568 of equities and $2,263 of exchange traded funds are also held by other trust funds. Allowable investments of these other trust funds are not governed by the City’s investment policy. Investment discretion is given to the City Treasurer and funds are invested to meet objectives based on the agreements in place for these other trust funds.

60 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 2 – CASH AND INVEST
MENTS (Continued)
Interest Rate Risk (Continued)
SCERS’ cash and investments by ma turities as of June 30, 2022 are as follows:

Cash and Investment Type No Maturity Under 1 1-5 Over 5 Total City of Sacramento Investment Pool -$ 7,825$ -$ -$ 7,825$

Corporate bonds/notes - - 5,943 39,867 45,810

Equities 21,197 - - - 21,197 Exchange traded funds 149,073 - - - 149,073 Mortgage loan - - 558 - 558 Municipal
bonds/notes - - 2,466 26,332 28,798 U.S
. agency securities - - 5 740 745

U.S. Treasury bonds - - - 1,569 1,569 Total Cash and Investments 170,270$ 7,825$ 8,972$ 68,508$ 255,575$ Remaining Maturity in Years
Investments in callable securities are investments tha t, although having clearly defined maturities, allow for the issuer to redeem or call such securities earlier than their respective maturity dates. The investor must then replace the called securities with investments that may have lower yield than the original securities. The fair values of the callable securities held by the City and SCERS at June 30, 2022, by investment type, are as follows:

Investment Type City SCERS
Corporate bonds/notes 122,144$ 8,154$
Municipal bonds/notes 8,213 3,366
Negotiable certificates of deposit 14,987 -
Supranational securities 5,635 -
U.S. agency securities 420,878 400
571,857$ 11,920$
As o
f June 30, 2022, the City held notes issued by the Bank of Montreal that are not rated by S & P but are rated Aa2 by Moody’s Investors Service. The notes have a fair value of $6,791 as of June 30, 2022. 61 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 2 – CASH AND INVEST
MENTS (Continued)
Credit Risk
Generally, credit risk is the risk that an issuer of an inve stmen t 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.

The City’s investment policy limits credit risk by requiring compliance with the California Government Code for the purchase of investments with public funds, as described in detail above. The S & P Global Ratings (S & P) credit ratings of the City and SCERS investments subject to credit risk as of June 30, 2022 are as follows:

Investment Type S & P City SCERS
City of Sacramento Investment Pool not rated -$ 7
,825$
Commercial paper A 204,171 -
Corporate bonds/notes A 372,178 7,973
AA 99,878 4,694
AAA 3,689 -
BBB 9,324 33,133
not rated 6,791 10
Investment Trust of California (CalTRUST) not rated 194,796 - Local Agency Investment Fund (LAIF) not rated 46,800 - Municipal bonds/notes A 6,479 -
AA 78,267 18,393
AAA 8,255 -
BBB - 4,780
not rated 9,653 5,625
Money market mutual funds AAA 37,789 -
Negotiable certificates of deposit A 77,733 -
BB 10,402 -
not rated 16,594 -
Supranational securities AAA 29,792 -
U.S. agency securities AA 413,842 400
AAA - 30
not rated 21,735 -
Total 1,648,168$ 82,863$
$8,957 of the $9,324 in corporate bonds/notes rated BBB are investments that were purchased at the minimum A rating but were subsequently downgraded due to negative economic impact caused by the Coronavirus pandemic.

The City’s investment policy allows for holding assets purchased at the minimum rating that were subsequently downgraded. The other $367 of corporate bonds/notes rated BBB are held by other trust funds. 62 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 2 – CASH AND INVEST
MENTS (Continued)
Concentration of Credit Risk
The investment policy of the City contains no limitations on the amou nt that can be invested in any one issuer beyond that stipulated by the California Government Code. As of June 30, 2022, the City held the following investments in an individual issuer exceeding 5% of total investments (other than U.S. Treasury securities, mutual funds, and external investment pools):

Federal Home Loan Bank 157,127$
Federal Farm Credit Bank 109,522
As o
f June 30, 2022, SCERS held the following investm ents in individual issuers exceeding 5% of total SCERS investments and net position (other than U.S. Treasury securities, mutual funds, and external investment pools):
iShares Russell 1000 Value ETF 39,983$
Technology Select Sector SPDR Fund (ETF) 16,705
Healthcare Select SPDR Fund (ETF) 14,996
Custodial Cr
edit Risk
Custodial credit risk for deposits is the risk that, in the ev ent of th e failure of a depository financial institution, the City or SCERS 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 California Government Code has provisions for financial institutions that limit custodial credit risk for deposits. Financial institutions are required to 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. The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. The City’s financial institutions also have insurance through the Federal Depository Insurance Corporation (FDIC). The City’s investment policy has no additional provisions for limiting custodial credit risk for deposits. All SCERS cash and cash equivalents are held with the City of Sacramento Investment Pool and SCERS is not exposed to custodial credit risk for deposits.

The custodial credit risk for investments is the risk tha t, in the event of the failure of the counterparty to a transaction, the City or SCERS will not be able to recover the value of its investment or collater al securities that are in the possession of another part y. 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 investments; however, it is the practice of the City Treasurer that all City investments are insured, registered or held by the Treasurer’s custodial agent in the City’s name. All SCERS investment s registered or held with the custodial agent are in SCERS’ name.
63 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 2 – CASH AND INVEST
MENTS (Continued)
Fair Value Measurement and Application
The City and SCERS categorize fair value measurements within th e fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described as follows:

Level 1 – Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the City and SCERS have the ability to access.

Level 2 – Inputs to the valuation methodology include:
 Quoted prices for similar assets or liabilities in active markets;  Quoted prices for identical or similar assets or liabilities in inactive markets;  Inputs other than quoted prices that are observable for the asset or liability; and  Inputs that are derived principally from or corrob orated by observable market data by corre lation or other me
ans.

Level 3 – Inputs to the val
uation methodology are unobservable and significant to the fair value measurement.

Unobservable inputs reflect the City’s and SCERS’ own assumptions about the inputs market participants would use in pricing the asset or liability (including assumpti ons about risk). Unobservable inputs are developed based on the best information available in the circumstances and may include the City’s and SCERS’ own data.

The asset’s level within the hierarchy is based on the lowest level of input that is significant to the fair value measurement. Valuation techniques used, need to maximize the use of observable inputs and minimize the use of unobservable inputs. The determination of what constitutes observable re quires judgment by management. City and SCERS management consider observable data to be that market data, which is readily available, regularly distributed or updated, reliable, and verifiable, not proprietary, and provided by multiple independent sources that are actively involved in the relevant market. The categorization of an investment within the hierarchy is based upon the relative observability of the inputs to its fair val ue measurement and does not necessarily correspond to City and SCERS management’s perceived risk of that investment.

In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety ar e categorized based on the lowest level input that is significant to the valuation. Assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability.

The money market mutual funds held by the City pool and outside the City pool are at $1 net asset value per share.

The total net asset value of these at June 30, 2022 was $4,827 and $32,962, respectively, with $0 unfunded commitments. The redemption frequency is daily and redemption notice period of intra-daily. This type of investment primarily invests in short-term U.S. Treasury and government agency securities (including repurchase agreements collateralized by U.S. Treasury and government agency securities).

Deposits and withdrawals in governmental investment pools, such as LAIF and CalTRUST for the City and the City of Sacramento Investment Pool for SCERS, are made on the basis of $1 and not fair value. Accordingly, the City’s measured fair value of its proportionate share in these types of investments is based on uncategorized inputs not defined as a Level 1, Level 2, or Level 3 input.
64 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 2 – CASH AND INVEST
MENTS (Continued)
Fair Value Measurement and Application (Continued)
The City’s treasury pools’ asset market prices are derived from closing bid price s as of the end of business day as supplied by ICE Data Services, Inc. Where prices are not available from generally recognized sources, the securities are priced using a yield-based matrix system to arrive at an estimated fair value. Prices that fall between data points are interpolated. Nonnegotiable FDIC-insured bank certificates of deposit are priced at par.

The following is a description of the valuation methods and assumptions used by the City and SCERS to estimate the fair value of its investments:
 When available, quoted prices are used to determine fair value. When quoted prices in active markets are a
vailable, investments are classified within Level 1 of the fair value hierarchy. 
For investments classified within Level 2 of the fair value hierarchy, the City’s and SCERS’ custodians gene
rally use a multi-dimensional relational mode l. Inputs to their pricing models are based on observable market inputs in active markets. The inputs to the pricing models are typically benchmark yield
s, reported trades, broker-dealer quotes, issuer spreads and benchmark securities, among others. 
SCERS holds one investment measured using Level 3 inputs, a Mortgage Loan. The Mortgage Loan is reported using the income approach. The value of the Mortgage Loan is materially close to the Discounted Cash Flow, therefore the book value is reported.

There have been no changes in the methods and assumptions used at June 30, 2022. The methods described may produce a fair value calculation that may not be indicati ve of net realizable value or reflective of future fair values. City and SCERS management believe its valuati on methods are appropriate and consistent with other market participants. The use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. 65 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)

NOTE 2 – CASH AND INVESTMENTS (Continued)

Fair Value Measurement and Application (Continued)

The City has the following recurring fair value measurements as of June 30, 2022:

Investments by Fair Value Level
Balance at
June 30, 2022
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Commercial paper 204,171$ - $ 204,171$ - $ Corporate bonds/notes 467,134 - 467,134 - Equities 5,568 5,568 - - Exchange traded funds 2,263 2,263 - - Municipal bonds/notes 102,654 - 102,654 - Negotiable certificates of deposit 90,574 - 90,574 - Supranational securities 29,792 - 29,792 - U.S. agency securities 428,581 - 428,581 - U.S. Treasury notes 18,218 18,218 - - Total Investments by Fair Value Level 1,348,955 26,049$ 1,322,906$ -$ Investments Measured at Net Asset Value
Money market mutual funds 4,827
Investments Uncategorized
Investment Trust of California (CalTRUST) 194,796
Local Agency Investment Fund (LAIF) 46,800
Total Investments Uncategorized 241,596
Total Investments Held by City 1,595,378
Investments Held by Fiscal Agent by Fair Value Level
Corporate bonds/notes 24,726 -$ 24,726$ -$ Negotiable certificates of deposit 14,155 - 14,155 - U.S. agency
securities 6,996 - 6,996 - U.S. Treasury notes 259 259 - - Total Investments Held by Fiscal Agent by
Fair Value Level 46,136 259$ 45,877$ - Investments Held by Fiscal Agent Measured at Net Asset
Value
Money market mutual funds 32,962
Total Investments Held by Fiscal Agent 79,098
Total Investments 1,674,476
Total Bank Deposits 89,796
Total Cash and Investments 1,764,272$
Fair Value Measurements on a Recurring Basis Using

66 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 2 – CASH AND INVEST
MENTS (Continued)
Fair Value Measurement and Application (Continued)
SCERS has the following recurring fair value measurements as of June 30, 2022:

Investments by Fair Value Level
Balance at
June 30, 2022
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Corporate bonds/notes $ 45,810 -$
45,810$
-$
Equities 21,197 21,197 - -
Exchange traded funds 149,073 149,073 - -
Mortgage loans 558 - - 558
Municipal bonds/notes 28,798 - 28,798 -
U.S. agency securities 745 - 745 -
U.S. Treasury bonds 1,569 1,569 - -
Total Investments by Fair Value Level 247,750 $ 171,839 $ 75,353 $ 558 Investments at Fair Value not Subject to
Fair Value Hierarchy
City of Sacramento Investment Pool 7,825
Total Cash and Investments 255,575$
Fair Value Measurements on a Recurring Basis Using
City Spon
sored Investment Pool
As part of the City’s total cash and investments portfolio, the Cit y Treasurer manages an investment pool, which includes both internal and external investors. The pool is not registered with the Securities and Exchange Commission as an investment company. The City Treasure r is granted authority for managing the pool by City Charter Section 73 and City Council ordinances and resolution s. Monthly, the City Trea surer reports investment activity to the Council for review.

The fair value of investments is det ermined monthly. Participants’ shares sold and redeemed are determined by the daily cash balance deposited in the pool (the value of its pool shares). The value of the pool shares is based upon amortized cost in day-to-day operations but is adjust ed to the fair value at year-end. The investments are reported at fair value. The value of the shares is supported by the value of the unde rlying investments. External participants, including various joint powers agencies, co mprise 7.97% of pool participation. The City Sponsored Investment Pool excludes activities of the pension trust fund, the Sacramento Housing and Redevelopment Agency (SHRA), and funds held by fiscal agents.

The City Treasurer also manages external individual in vestment accounts for SHRA and the Sacramento Public Library Authority Hurst Trust.
67 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 2 – CASH AND INVEST
MENTS (Continued)
City Sponsored Investment Pool (Continued)
The following represents a condensed statement of net position an d changes in net position for the City Sponsored Investment Pool and external individual investment accounts as of June 30, 2022:

Fair Value
Adjusted
Cost
Interest
Rates
Maturity
Dates
Commercial paper 204,171$ 204,779$ 0.23-3.17% 07/22-03/23 Corporate bonds/notes 466,218 499,724 0.45-4.05% 09/22-03/27 Deposits 93,852 93,852 0.61-2.97% N/A
Investment Trust of California (CalTRUST) 194,796 194,796 1.01-1.14% N/A Local Agency Investment Fund (LAIF) 46,800 46,800 0.86% N/A Municipal bonds/notes 102,654 106,981 0.37-6.09% 07/22-06/27 Money market mutual funds 4,827 4,827 0.53% N/A
Negotiable certificates of deposit 90,574 92,500 0.17-3.00% 07/22-06/26 Supranational securities 29,792 31,449 0.37-1.75% 08/22-11/26 U.S. agency securities 428,581 460,693 0.30-4.70% 07/23-06/27 U.S. Treasury notes 18,218 19,820 0.37-0.50% 01/26-02/26 Total cash and investments in City sponsored investment pool and external individual investment accounts 1,680,483$ 1,756,221$ A summary of cash and investments as of June 30, 2022 is as follows:

External
City Sponsored Individual Investment
Investment Pool Accounts Total
Statement of Net Position:

Cash and investments at fair value 1,538,660$ 141,823$ 1,680,483$ Interest receivables 3,381 266 3,647
Net Position 1,542,041$ 142,089$ 1,684,130$ Equity of internal pool participants 1,419,082$ -$ 1,419,082$ Equity of external pool participants 122,959 142,089 265,048 Total equity 1,542,041$ 142,089$ 1,684,130$ Statement of Changes in Net Position:

Net position at July 1, 2021 1,514,457$ 169,787$ 1,684,244$ Net change in investments by pool participants 27,584 (27,698) (114) Net position at June 30, 2022 1,542,041$ 142,089$ 1,684,130$ 68 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 2 – CASH AND INVEST
MENTS (Continued)
Participation in External Investment Pools
The City is a voluntary participant in the California Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Local Investment Advisory Board (Board). The Board consists of five members as designated by state stat ute. The balance available fo r withdrawal is based on the accounting records maintained by the LAIF, which are recorded on an amortized cost basis, which is different from the fair value of the City’s position in the LAIF pool. As of June 30, 2022, the City’s investment in LAIF is $46,800.

The total amount invested by all public agencies in LAIF at that date is $35,761,173. LAIF is part of the California Pooled Money Investment Account (PMIA), which at June 30, 2022 had a balance of $231,570,068. Of that amount,

98.12% is invested in non-derivative financial products, and 1.88% is invested in derivative financial products.

The City is also a voluntary participant in the Investment Trust of California (CalTRUST), which is a Joint Powers Authority governed by a Board of Trustees made up of local treasurers and investment officers. The Board of Trustees sets overall policy for CalTRUST and selects and supervises the activities of the Investment Manager and other agents. As of June 30, 2022 , the City’s investment in CalTRUST is $194,796, of which $27,247 was invested in the Liquidity funds pool, $74,327 in the Short-term pool, $57,078 in the Medium-term pool, and $36,144 in the BlackRock federal funds pool. Amounts that may be withdrawn from CalTRUST are based upon the fund’s assets valued using the amortized cost method. Amounts that may be withdrawn from the Short-term and Medium- term pools are based on the net asset value per share and the number of shares held by participants in each pool. 69 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 3 – RE

CEIVABLES
Receivables as of June 30, 2022, were as follows:

Taxes Accounts Loans
Inter-
govern-
mental Leases Interest Total
Governmental activities
General Fund 33,309$ 28,454$ 1,873$ 4,224$ 28,936$ 1,204$ 98,000$ Measure U Fund 23,664 75 - - - 205 23,944 2015 Golden 1 Center
Lease Revenue Bond Fund - 1,928 136,971 -
- 31 138,930
Operating Grants Fund - 271 -
18,489 -
- 18,760
Other governmental funds 6,104 15,065 25,758
26,548 3,093 325 76,893
Internal service funds - 5,174 -
- - 298 5,472
63,077$ 50,967$ 164,602$ 49,261$ 32,029$ 2,063$ 361,999$ Amounts not scheduled for
collection during the
subsequent year -$ -$
154,247$ 11,328$ 30,138$ -$ 195,713$
Business-type activities
Water Fund -$ 19,779 $ -$ 462$
888$ 752$ 21,881$
Wastewater Fund - 11,048 - 434 -
183
11,665
Storm Drainage Fund - 7,234 969
1,174 -
140 9,517

Solid Waste Fund - 10,578 - - 1,749 144 12,471 Community Center Fund 2,998 419 - - - 126 3,543

Other enterprise funds - 714 -
- 8,304 41 9,059
2,998$ 49,772$ 969$ 2,070 $ 10,941$ 1,386$ 68,136$ Includ
ed in the Accounts Receivable amounts above ar e allowances for doubtful accounts of $30,586 in governmental activities and $1,451 in business-type activities.

Included in the Loans Receivable amount related to other governmental funds above is the present value of the installment payments under the golf service concession arrangement of $6,492, repo rted with the associated deferred inflow in the government-wide statement of net position.

The Golden 1 Center was sold to the Sacramento Kings under the terms of the Arena Management, Operations and Lease Agreement during the fiscal year ended June 30, 2017. The agreed-upon minimum lease payments to be received from the Kings was $389,414 over 35 year s. Total minimum lease payments have since gone up to $397,990 over 35 years in accordance with the agreement ’s annual fee escalation tied to the Consumer Price Index. The present value of these minimum lease paym ents discounted at 5.674% is $145,822 and the current loan receivable balance as of June 30, 2022 is $136,971. Payments from the Sacramento Kings will be used to fund the payment of debt service related to the Golden 1 Center 2015 lease revenue bonds. 70 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)

NOTE 4 – CAPITAL ASSETS

Summary

The following is a summary of capital assets as of June 30, 2022:

Business-
Governmental type
Activities Activities Total
Capital assets not being depreciated/amortized
Land 219,585 $ 48,951 $ 268,536 $ Easements 2,348 291 2,639 Construction in progress 270,374 444,855 715,229 Total capital assets not being depreciated/amortized 492,307 494,097 986,404 Depreciable/amortizable capital assets
Buildings and improvements 715,677 464,915 1,180,592 Equipment 80,479 162,097 242,576 Software 6,413 13,535 19,948 Vehicles 206,885 - 206,885 Transmission and distribution system 4,777 1,571,737 1,576,514 Roadway network 1,723,815 - 1,723,815 Streetlight network 287,938 - 287,938 Parks and park improvements 233,996 - 233,996 Total depreciable/amortizable capital assets 3,259,980 2,212,284 5,472,264 Less accumulated depreciation/amortization for:

Buildings and improvements (303,772) (180,680) (484,452) Equipment (67,909) (56,647) (124,556) Software (5,134) (4,833) (9,967) Vehicles (113,423) - (113,423) Transmission and distribution system (1,271) (616,214) (617,485) Roadway network (1,176,858) - (1,176,858) Streetlight network (114,556) - (114,556) Parks and park improvements (95,831) - (95,831) Total accumulated depreciation/amortization (1,878,754) (858,374) (2,737,128) Depreciable/amortizable capital assets, net 1,381,226 1,353,910 2,735,136 Leased assets, net (Note 6) 1,553 2,090 3,643 T
otal capital assets, net 1,875,086$ 1,850,097$ 3,725,183$

Refer to Note 6 for more detailed information on leased assets activity and amortization expense by function. 71 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 4 – CAPITAL ASSET
S (Continued)
Governmental Activities
Governmental capital asset activity for the fiscal year ended June 30, 2022 was as follows:

Beginning
Balance Increases Decreases
Transfers
In/Out
Ending
Balance
Capital assets not being depreciated/amortized
Land 202,628 $ 16,957 $ - $ -$
219,585$
Easements 2,348 - - - 2,348 Construction in progress 223,892 80,083 (33,601) - 270,374 428
,868 97,040 (33,601) - 492,307
Depr
eciable/amortizable capital assets
Buildings and improvements 708,379 7,298 - - 715,677 Equipment 80,565 - (86) -
80,479
So
ftware 6,413 - - -
6,413
Vehicles 195,817 19,897 (8,829) - 206,885 T
ransmission and distribution system 4,777 - - - 4,777 Roadway network 1,713,981 15,836 (6,002) - 1,723,815 Str
eetlight network 276,613 11,325 - - 287,938 Pa
rks and park improvements 230,286 3,710 - - 233,996 Total depreciable/amortizable capital assets 3,216,831 58,066 (14,917) - 3,259,980 Le
ss accumulated depreciation/amortization for:

Buildings and improvements (290,089) (13,683) - - (303,772) Equipment (65,690) (2,254) 35 - (67,909) Software (4,627) (507) - - (5,134) Vehicles (106,324) (15,255) 8,156 - (113,423) Transmission and distribution system (1,184) (87) - - (1,271)
Roadway network (1,141,544) (41,316) 6,002 - (1,176,858) Streetlight network (107,916) (6,640) - - (114,556) Parks and park improvements (87,786) (8,045) - - (95,831) Total accumulated depreciation/amortization (1,805,160) (87,787) 14,193 - (1,878,754) Depreciable/amortizable capital assets, net 1,411,671 (29,721) (724) - 1,381,226 Leased assets, net (Note 6) 1,977 (424) - - 1,553
Governmental activities capital assets, net 1,842,516$ 66,895$ (34,325)$ -$ 1,875,086$ Depreciation/amortization expense was charged to functions as follows:

General government 4,878$
Police 893
Fire 780
Public works 50,643
Convention and cultural services 3,892
Youth, parks, and community enrichment 10,298
Community development 160
Library 955
Capital assets held by the City's internal service funds are charged to the functions based on their usage of assets 15,288 Total governmental activities depreciation/amortization expense 87,787$ Total capital assets not being
depreciated/amortized
72 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 4 – CAPITAL ASSET
S (Continued)
Business-type Activities
Business-type capital asset activity for the fiscal year ended June 30, 2022 was as follows:

Beginning
Balance Increases Decreases
Transfers
In/Out
Ending
Balance
Capital assets not being depreciated/amortized
Land 47,806 $ 1,145$ -$ -$
48,951$

Easements 291 - - - 291

Construction in progress 665,116 63,919 (284,180) - 444,855 71 3,213 65,064 (284,180) - 494,097
Dep
reciable/amortizable capital assets
Buildings and improvements 337,976 126,939 - - 464,915 Equipment 76,104 85,993 - - 162,097
Software 13,535 - - - 13,535
Transmission and distribution system 1,491,454 80,283 - - 1,571,737 Total depreciable/amortizable capital assets 1,919,069 293,215 - - 2,212,284 Less accumulated depreciation/amortization for:

Buildings and improvements (173,197) (7,483) - - (180,680) Equipment (52,420) (4,227) - - (56,647)
Software (3,853) (980) - - (4,833)
Transmission and distribution system (581,653) (34,561) - - (616,214) Total accumulated depreciation/amortization (811,123) (47,251) - - (858,374) Depreciable/amortizable capital assets, net 1,107,946 245,964 - - 1,353,910 Leased assets, net (Note 6) 2,284 (194) - 2,090
Business-type activities capital assets, net 1,823,443$ 310,834$ (284,180)$ -$ 1,850,097$

Depreciation/amortization expense was charged to functions as follows:

Water 27,147$
Wastewater 4,879
Storm drainage 11,180
Solid waste 1,226
Community center 1,384
Parking 1,372
Child development 63 (1)
Total business-type activities depreciation/amortization expense 47,251$ (1) $9 of depreciation/amortization expense reported in the Other Enterprise Funds Financials is related to the amortization of the Regency Park joint-use ag
reement and is not recognized within this note or Note 6.

Total capital assets not being
depreciated/amortized
73 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 5 – PAYABLES
Payabl
es as of June 30, 2022, were as follows:

Vendors Employees Interest Deposits Total
Governmental activities
General Fund 21,065$ 20,511$ -$
119$ 41,695$
Measure U Fund 4,607 1,534 - -
6,141
- - 3,572 - 3,5
72 Operating Grants Fund 4,082 - - 297 4,379 Other governmental funds 12,576 48 1,496 2,736 16,856 Internal service funds 5,856 329 2 - 6,1
87 Total governmental activities 48,186$ 22,422$ 5,070$ 3,152$ 78,830$ Business-type activities
Water Fund 4,723$ 922$ 3,177$ 5$ 8,827$ Wastewater Fund 14,562 199 642 - 1
5,403
Storm Drainage Fund 1,375 356 30 487 2,248
Solid Waste Fund 2,888 502 41 - 3,4
31 Community Center Fund 5,350 194 1,277 - 6,8
21 Other enterprise funds 2,238 317 41 502 3,098 Total business-type activities 31,136$ 2,490$ 5,208$ 994$ 39,828$ 2015 Golden 1 Center Lease
Revenue Bond Fund
Includ
ed in the Interest Payable amount related to 2015 Golden 1 Center Lease Revenue Bond Fund above is the interest payable accrual of $3,572, reported in the government-wide statement of net position.

Included in the Interest Payable amount related to other governmental funds above is the interest payable accrual for other debt service funds of $1,496, reported in the government-wide statement of net position. 74 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 6 – LE
ASES
City as a Lessee
As discussed in Note 1, the City is a lessee for various no n-cancellable leases of land, buildings, and equipment.

Leases of land have initial terms of 5 to 35 years, and co ntain one or more renewal provisions, generally in 5 or 10-year periods. Leases of buildings and equipment have initial terms of 3 to 5 year s, and contain one or more renewal provisions, generally in 1 or 5-year periods. The City’s lease arrangements generally do not includ e terminatio
n options reasonably certain to be exercised by either party to the lease or restrictive financial or other covenants. The City’s lease arrangements do not contain any material residual value guarantees.

A summary of leased assets activity for the fiscal year ended June 30, 2022 is as follows:

Beginning
Balance Increases Decreases Endin g Balance
Governmental activities
Leased assets:

Land 188 $ - $ -
$ 1
88$
Buildings 1,789 - - 1,789
Total leased assets 1,977 - - 1,977 Less accumulated amortization for:

Leased assets:

Land - (6) - (6)
Buildings - (418) - (4
18)
- (4
24) - (4
24)
1,
977$ (424)$ -
$ 1
,553$
Business-type activities
Leased assets:

Land 1,978$ - $ -
$ 1
,978$
Buildings 177 - - 177
Equipment 184 - - 184
Total leased assets 2,339 - - 2,339 Less accumulated amortization for:

Leased assets:

Land - (122) - (1
22)
Bui
ldings - (35) - (35)
Equipment (55) (37) - (92)
(55) (194) - (2
49)
2,
284$ (194)$ -
$ 2
,090$
Total accumulated amortization
Governmental activities leased assets, net
Total accumulated amortization
Business-type activities leased assets, net
Leased asset amortization expense was charged to functions as follows:

Governmental
activities
Business-type
activities
General Government 69 $ -$
Police 72 -
Fire 144 -
Public works 42 -
Convention and cultural services 56 -
Youth, parks, and community enrichment 41 -
Water - 37
Storm drainage - 35
Parking - 122
424$ 194$
75 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 6 – LE
ASES (Continued)
City as a Lessee (Continued)
A summary of changes in the related lease liabilities for the fiscal year ended June 30, 2022 is as follows:

Beginning
Balance Increases Decreases
Ending
Balance
Governmental activities 2,176$ - $ (
533)$ 1,643$
Business-type activ ities 2,216 - (
204) 2
,012
Total lease liabilities 4,392$ - $ (
737)$ 3,655$
The June
30, 2021 beginning balance of governmental activities and business-type activities have been restated to reflect the leased assets and lease liabilities required by GASB Statement No. 87. Governmental activities leased assets and lease liabilities have been restated in the amount of $1,977. Business-type activities leased assets and lease liabilities have been restated in the amount of $2,284 and $2,216, respectively.

Future minimum lease payments are as follows:

Fi
scal Year
Ending June 30, Principal Interest Principal Interest
2023 478$ 14$ 142$ 29$
2024 289 11 146 28
2025 195 10 150 26
2026 137 9 154 25
2027 64 8 120 24
2028-2032 251 28 155 109
2033-2037 125 12 152 95
2038-2042 32 8 166 81
2043-2047 34 5 182 66
2048-2052 38 2 199 49
2053-2057 - - 217 30
2058-2062 - - 229 10
Totals 1,643$ 107$ 2,012$ 572$
Governmental Activities Business-type Activities
Variabl
e lease payments - Variable lease payments, other than those that are fixed in substance, are excluded from the measurement of the lease liability. Such amount s are recognized as lease expense/expenditures in the period in which the obligation for those payments is incurred.

Certain land leases require the City to make variabl e lease payments based on a percentage of gross revenue.

These amounts are generally determined quarterly or annually. The amount recognized as expense/expenditures for these variable lease payments not included in the measurement of lease liabilities was $384 for the fiscal year ended June 30, 2022. The City also leases land from the State Lands Commission and subleases this land to various lessees. Each year, the City pays a percenta ge of gross revenues to the State Lands Commission. The City recognized $124 of expense associated with this lease with the State Lands Commission during the fiscal year ended June 30, 2022.

Certain vehicle leases require the City to make va riable lease payments based on usage. These amounts are generally determined monthly. The amount recognized as expense/expenditures for these variable lease payments not included in the measurement of lease liabilities was $933 during the fiscal year ended June 30, 2022. 76 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 6 – LE
ASES (Continued)
City as a Lessor
As discussed in Note 1, the City is a lessor for various non-cancellable leases of land, buildings, and equipment.

Leases of land have initial terms of 3 to 50 years, and contain one or more renewal provisions, generally in five or ten-year periods. Leases of buildings and equipment have in itial terms of 3 to 45 years, and contain one or more renewal provisions, generally in 1 or 5-year periods. T he City’s lease arrangements do not contain any material residual value guarantees.

Future minimum lease payments receivable are as follows:

Fi
scal Year
Ending June 30, Principal Interest Principal Interest
2023 1,891$ 614$ 481$ 138$
2024 2,263 408 544 216
2025 2,185 381 647 149
2026 1,982 356 681 141
2027 1,956 331 693 132
2028-2032 9,412 1,263 2,951 527
2033-2037 6,775 678 1,835 341
2038-2042 3,547 282 1,744 198
2043-2047 562 153 1,221 59
2048-2052 547 107 144 1
2053-2057 646 53 - -
2058-2062 263 5 - -
Totals 32,029$ 4,631$ 10,941$ 1,902$
Governmental Activities Business-type Activities
Lea
se related revenue recognized during the fiscal year ended June 30, 2022, excluding variable lease receipts, is as follows:

Governmental
Activ ities
Business-type
Activ ities
Lease revenue 2,544 $ 763 $
Interest revenue 441 165
Variabl
e lease receipts - Variable lease receipts, other t han those that are fixed in substance, are excluded from the measurement of the lease receivable. Such amounts are recognized as lease revenue in the period in which it is earned.

Certain leases require the lessee to make variable lease payments based on a percentage of gross receipts. These amounts are determined monthly, quarterly, or annually as noted in the lease arrangement. The amount recognized as revenue for variable lease payments not included in the measurement of lease receivable was $2,180 during the fiscal year ended June 30, 2022.
77 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 7 – LO

NG-TERM LIABILITIES
Activity
The following is a summary of changes in long-term liabilities at June 30, 2022. Certain long-term liabilities provide financi
ng to both governmental and business-type activities.

Beginning
Balance, Ending Due Within
GOVERNMENTAL ACTIVITIES: As Restated Additions Reductions Balance One Year Revenue and Other Bonds, Direct Placements:
2016 Lease Financing 6,555$ -$ (490)$ 6,065$ 505$ Revenue and Other Bonds, Public Offerings:
2006 Capital Improvement Revenue Bonds, Series B 40,380 - (1,575) 38,805 1,670 2006 Capital Improvement Revenue Bonds, Series E 79,822 - (1,760) 78,062 5,549 2015 Refunding Revenue Bonds 74,390 - (6,375) 68,015 3,735 2015 Lease Revenue Bonds - Golden 1 Center 258,510 - (3,945) 254,565 4,005 Subtotal, revenue and other bonds, public offerings 453,102 - (13,655) 4 39,447 14,959
Direct Borrowing Notes Payable:
1985 Marina Phase I 1,234 - (59) 1,
175 62
1985 Marina Phase II 1,959 - (79) 1,
880 83
2008 Sacramento Marina South Basin 13,716 - (69) 1
3,647 172
Subtotal, direct borrowing notes payable 16,909 - (207) 16,702 317 Plus deferred amounts:

For issuance premiums 15,625 - (1,141) 14,484 1,136
Subtotal, debt governmental activities 492,191 - (15,493) 4 76,698 16,917
Other Long-term Liabilities:

Accrued claims and judgments 106,186 31,723 (21,211) 116,698 33,638 Accrued compensated absences 43,570 44,796 (40,897) 47,469 2,831 Lease liabilities 2,176 - (533) 1,643 478
Net OPEB liability 203,319 - (41,604) 1 61,715 -
Net pension liability 952,894 32,095 (327,077) 6
57,912 -
Pollution remediation obligations 573 234 (211) 596 76

Financing plan fee credits:

Delta Shores - 39
,909 - 3
9,909 -

Jacinto Creek 978 25 - 1,
003 25

North Natomas 26,609 7,758 (6,339) 28,028 3
,396
Park Development 1,885 580 (906) 1,559 4
51 Railyards 8,024 3,642 (11,666) - -
Willowcreek 130 - (81) 49
-
Subtotal, other long-term liabilities 1,346,344 160,762 (450,525) 1,056,581 40,895 Total governmental activities 1,838,535$ 160,762$ (466,018)$ 1,533,279$ 57,812$ 78 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 7 – LO
NG-TERM LIABILITIES (Continued)
Activity (Continued)
Beginning
Balance, Ending Due Within
BUSINESS-TYPE ACTIVITIES: As Restated Additions Reductions Balance One Year Revenue and Other Bonds, Public Offerings:
2006 Capital Improvement Revenue Bonds, Series E 92,277$ - $ -$ 9 2,277$
6,412$
Water Revenue Bonds, Series 2013 20,775 - (4,815) 1 5,960 5,065
Water Revenue Bonds, Series 2017 50,130 - (915) 4 9,215 960
Water Revenue Refunding Bonds, Series 2020 185,500 - (2,015) 18 3,485 2,050
Wastewater Revenue Bonds, Series 2013 2,295 - (725) 1,57 0 765
Wastewater Revenue Bonds, Series 2019 25,960 - (840) 2 5,120 880
Wastewater Revenue Refunding Bonds, Series 2020 27,440 - (335) 2 7,105 335
2015 Refunding Revenue Bonds 29,186 - (8,761) 2
0,425 2,145
2018 TOT Revenue Bonds, Senior Series A 195,815 - - 195,815 - 2018 TOT Revenue Bonds, Senior Series B 16,680 - (4,070) 1 2,610 4,215
2018 TOT Revenue Bonds, Subordinate Series C 65,740 - (1,200) 6 4,540 1,266
2019 STID Assessment Revenue Bonds 49,620 - (880) 4 8,740 915
Subtotal, revenue and other bonds, public offerings 761,418 - (24,556) 73 6,862 25,008
Direct Borrowing Notes Payable:

California Department of Public Health 6,347 - (483) 5,864 495 California Infrastructure and Economic
Development Bank (I-Bank) 2,031 - (92) 1,93
9 95
Drinking Water State Revolving Fund 115,695 22,646 (2,933) 13 5,408 2,942
Subtot
al, direct borrowing notes payable 124,073 22,646 (3,508) 143,211 3,532 Less deferred amounts:

For issuance premiums 60,979 - (3,629) 5
7,350 3,631
Subtotal, debt, business type activities 946,470 22,646 (31,693) 937,423 32,171 Other Long-term Liabilities:

Accrued compensated absences 8,225 9,286 (7,834) 9,677 637 Lease liabilities 2,216 - (204) 2,01
2 142
Net OPEB liability 40,930 - (5,840) 3
5,090 -
Net pension liability 116,810 13,061 (47,192) 8
2,679 -
Accrued claims and judgments 635 25 - 66
0 660
Water fee credits 531 - (339) 19
2 -
Wastewater fee credits 13,912 - (3,140) 1
0,772 -
Liability for landfill post closure 4,336 - (298) 4,03 8 298
Subtotal, other long-term liabilities 187,595 22,372 (64,847) 145,120 1,737 Total business-type activities 1,134,065 45,018 (96,540) 1,082,543 33,908 Total long-term liabilities 2,972,600$ 205,780$ (562,558)$ 2,615,822$ 91,720$ The June
30, 2021 beginning balance of governmental activities and business-type activities have been restated to reflect the lease liabilities required by GASB St atement No. 87, in the amounts of $1,977 and $2,216, respectively.
79 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 7 – LO
NG-TERM LIABILITIES (Continued)
The following is a list of long-term debt issues outstanding at June 30, 2022, including the amount of original debt issuance, a description of the debt issue, and disclosure of pledged revenue.

Revenue and Other Bonds
Issued Amount
$55,235
$186,950
$215,1
95 $30,855
2006 Capital Improvement Revenue Bonds, Series B (Taxable) Authorized and issued June 15, 2006, due in annual installments of $720 to $3,760 through December 1, 2036, bearing interest rates of 5. 4% to 5.8%. Net proceeds of $50,692 are being utilized for the purpose of financing certain publ ic capital improvements and redevelopment projects including an arts rehearsal building, Pocket Area Library and other capital projects within the City of Sacramento. The debt is secured by collateral of real property situated in the City of Sacramento, the indenture contains a provision that in the event of a default and upon written request of the bond holders, the outstanding principal and any accrued interest may be due and payable immediately.
2006 Capital Improvement Revenue Bonds, Series E (Refunding) Authorized and issued December 12, 2006, due in annual installments of $402 to $8,570 through December 1, 2033, bearing interest rates of 4% to 5.25%. Net proceeds of $216,661 plus cash of $13,441 have been utilized for the purpose of establishing an irrevocable escrow to defease $218,000 principal amount of the outstanding 2001 Capital Improvement Revenue Bonds and a portion of the outstanding 2002 and 2003 Capital Improvement Revenue Bonds, and the associated liabilities have been removed from the governmental and business-type activities columns of the statement of net position. The debt is secured by collateral of real property situated in the City of Sacramento, the indenture contains a provision that in the event of a default and upon written request of the bond holders, the outstanding principal and any accrued interest may be due and payable immediately.
2013 Water Revenue Bonds
Authorized and issued March 2013, due in annual installments of $9,731 to $14,018 through fiscal year 2043, bearing interest rates of 1% to 5%, for the purpose of financing the costs of improvements to the City’s municipal water system. In May 2020, the City issued 2020 Water Revenue Refunding Bonds to defease and refund $166,405 of the outstanding 2013 Water Revenue Bonds. Remaining amount due in annual installments of $5,717 to $ 5,720 through fiscal year 2025, bearing interest rate of 5%. The debt is secured by the pledge of, and payable solely from, the Trust Estate, which consists pr imarily of all system net revenues and trustee accounts held under the indenture. Total principal and interest remaining to be paid on the bonds is $17,159 as of June 30, 2022. Current year principal and interest paid was $5,717 and water fee revenue was $136,613.
2013 Wastewater Revenue Bonds
Authorized and issued June 2013, due in annual installments of $951 to $1,958 through fiscal year 2043, bearing interest rates of 3% to 5%, for the purpose of financing the costs of improvements to the City’s wastewater system. In July 2020, the City issued 2020 Wastewater Revenue Refunding Bonds to defease and refund $24,835 of the outstanding 2013 Wastewater Revenue Bonds. Remaining amount due in annual installments of $822 to $ 825 through fiscal year 2024, bearing interest rate of 5%. The debt is secured by a pledge of, and payable solely from, the Trust Estate, which consists primarily of all system net revenues and trustee accounts held under the indenture. Total principal and interest remaining to be paid on the bonds is $1,650 as of June 30, 2022. Current year principal a nd interest paid was $822 and wastewater fee revenue was $44,327.
80 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)

NOTE 7 – LONG-TERM LIABILITIES (Continued)

Revenue and Other Bonds (Continued)

Issued Amount

$183,380

$272,870

$9,115

$52,610

$195,815
2015 Refunding Revenue Bonds
Authorized and issued October 1, 2015, due in annual installments of $5,120 to $24,773 through December 1, 2037, bearing interest rates of 3% to 5%. Net proceeds of $205,778 plus cash of $28,165, together with certain proceeds of the Tax Allocation Bonds, were utilized to establish an irrevocable escrow to defease $257,630 pr incipal amount of outstanding 2002 Capital Improvement Revenue Bonds, 2003 Capital Improvement Revenue Bonds, 2005 Refunding Revenue Bonds, 2006 Capital Improvement Revenue Bonds, Series A, 2006 Capital Improvement Revenue Bonds, Series C, and pay costs of issuance. The refunded liabilities have been removed from the associated fund an d government-wide financial statements. The debt is secured by collateral of real property situated in the City of Sacramento. The indenture contains a provision that in the event of a default and upon written request of the bond holders, the outstanding principal and any accrued interest may be due and payable immediately.

2015 Lease Revenue Bonds – Golden 1 Center
The bonds were originally issued on August 13, 2015, in the aggregate principal amount of $299,995, to pay for a portion of the acquisi tion and construction of the multi-purpose entertainment and sports center (the Golden 1 Center) in downtown Sacramento. On the fixed rate conversion date, October 6, 2015, $27,125 principal amount of the bonds were cancelled.

The bonds are due in annual installments of $7,229 to $18,379 through fiscal year 2050, bearing interest of 2.5% to 5.6%. The debt is secured by collateral of the Golden 1 Center and other improvements made to the associated parcel of land.

2016 Lease Financing – H Street Theater Complex (Direct Placement) The City delivered its 2016 Lease Financing on January 26, 2016, due in annual installments of $668 to $1,010 through fiscal year 2033, bearing interest at 2.8%. Bond proceeds of $9,115, together with cash of $3,471 were utilized to establish a prepayment fund to refund $12,010 aggregate principal, plus interest, and pay the costs of issuance of the outstanding Sacramento Regional Arts Facilities 2002 Certificates of Participation. The debt is secured by lease rental payments from the California Musical Theatre.

2017 Water Revenue Bonds
Authorized and issued June 2017, due in annual installments of $1,805 to 3,379 through fiscal year 2048, bearing interest rate of 4% to 5%, for the purpose of financing the costs of improvements to the City’s municipal water system. The debt is secured by the pledge of, and payable solely from, the Trust Estate, which consists primarily of all system net revenues and trustee accounts held under the indenture. Total principal and interest remaining to be paid on the bonds is $87,798 as of June 30, 2022. Current year principal and interest paid was $3,379 and water fee revenue was $136,613.

2018 Transient Occupancy Tax (TOT) Revenue Bonds, Senior Series A Authorized September 2018, issued November 2018, due in annual installments of $5,711 to $14,482 through fiscal year 2048, bearing an interest rate of 5%, for the purpose of financing the costs of renovating the City’s Convention Center, Community Center Theater, and Memorial Auditorium, as well as other projects eligible for TOT funding. The debt is secured by the pledge of, and payable solely from, TOT revenues and trustee accounts held under the indenture. Total principal and interest remaining to be paid on the bonds is $362,909 as of June 30, 2022.

Current year interest paid was $9,791 and TOT revenue was $26,843. Principal payments begin June 2025.

81 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 7 – LO
NG-TERM LIABILITIES (Continued)
Revenue and Other Bonds (Continued)
Issued Amount
$20,610
$66,890
$25,960
$50,465
2018 Transient Occupancy Tax (TOT) Revenue Bonds, Senior Series B (Taxable) Authorized September 2018, issued November 2018, due in annual installments of $441 to $4,690 through fiscal year 2025, bearing interest rates of 3.5% to 3.9%, for the purpose of financing the costs of renovating the City’s Convention Center, Community Center Theater, and Memorial Auditorium, as well as other projects eligible for TOT funding. The debt is secured by the pledge of, and payable solely from, TOT revenues and trustee accounts held under the indenture. Total principal and interest remaining to be paid on the bonds is $13,559 as of June 30, 2022. Current year principal and interest paid was $4,690 and TOT revenue was $26,843. 2018 Transient Occupancy Tax (TOT) Revenue Bonds, Subordinate Series C Authorized September 2018, issued November 2018, due in annual installments of $1,951 to $4,495 through fiscal year 2048, bearing an interest rate of 5%, for the purpose of financing the costs of renovating the City’s Convention Ce nter, Community Center Theater, and Memorial Auditorium, as well as other projects eligible for TOT funding. The debt is secured by the pledge of, and payable solely from, TOT revenues and trustee accounts held under the indenture. Total principal and interest remaining to be paid on the bonds is $116,729 as of June 30, 2022.

Current year principal and interest paid was $4,487 and TOT revenue was $26,843. 2019 Wastewater Revenue Bonds
Authorized March 2019, issued April 2019, due in annual installments of $1,157 to $2,119 through fiscal year 2040, bearing an interest rate of 5%, for the purpose of financing the costs of improvements to the City’s wastewater s ystem. The debt is secured by a pledge of, and payable solely from, the Trust Estate, which consists primarily of all system net revenues and trustee accounts held under the indenture. Total principal and interest remaining to be paid on the bonds is $38,095 as of June 30, 2022. Current year principal and interest paid was $2,117 and wastewater fee revenue was $44,327.
2019 Sacramento Tourism Infrastructure District (STID) Assessment Revenue Bonds Authorized July 2019, issued August 2019, due in annual installments of $1,469 to $2,744 through fiscal year 2050, bearing interest rates of 4% to 5%, for the purpose of financing an additional Ballroom in the Sacramento Conv ention Center and other capital improvement projects. The debt is secured by the pledge of, and payable solely from, STID revenues and trustee accounts held under the indenture. Total principal and interest remaining to be paid on the bonds is $76,746 as of June 30, 2022. Current year principal and interest paid was $2,741 and STID fee revenue was $3,292.
82 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)

NOTE 7 – LONG-TERM LIABILITIES (Continued)

Revenue and Other Bonds (Continued)

Issued Amount

$188,390

$27,970

2020 Water Refunding Revenue Bonds
Authorized April 2020, issued May 2020, due in annual installments of $6,976 to $12,701 through fiscal year 2043, bearing interest rates of 1% to 3%. Net proceeds of $188,390, together with City contribution of $1,005 and bond reserve fund release of $4,248, were utilized to establish an irrevocable escrow to defease $166,405 principal amount of outstanding 2013 Water Revenue Bonds and pay costs of issuance. The refunded liabilities have been removed from the Water Fund and government-wide financial statements. The debt is secured by the pledge of, and payable solely from, the Trust Estate, which consists primarily of all system net revenues and trustee accounts held under the indenture. Total principal and interest remaining to be paid on the bonds is $249,503 as of June 30, 2022. Current year principal and interest paid was $6,976 and water fee revenue was $136,613.

2020 Wastewater Refunding Revenue Bonds
Authorized April 2020, issued July 2020, due in annual installments of $925 to $1,752 through fiscal year 2043, bearing interest rates of .5% to 2.5%. Net proceeds of $27,970, together with City contribution of $401 and bond reserve fund release of $580, were utilized to establish an irrevocable escrow to defease $24,835 princi pal amount of outstanding 2013 Wastewater Revenue Bonds and pay costs of issuance. The refunded liabilities have been removed from the Wastewater Fund and government-wide financia l statements. The debt is secured by the pledge of, and payable solely from, the Trust Estate, which consists primarily of all system net revenues and trustee accounts held under the indenture. Total principal and interest remaining to be paid on the bonds is $35,059 as of June 30, 2022. Current year principal and interest paid was $926 and wastewater fee revenue was $44,327.

83 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 7 – LO
NG-TERM LIABILITIES (Continued)
Notes Payable
Issued Amount
$2,220
$3,229
$10,477
$10,000
$2,975
$173,142
1985 Sacramento Marina Note Payable, Phase I
Authorized July 1985, issued November 1985, refinanced August 1998, to the California Department of Boating and Waterways, due in annual installments of $20 to $82 through August 2030, bearing an interest rate of 4.5%, for the purpose of financing the expansion of the Sacramento Marina. The debt is secured by collateral of the Sacramento Marina. 1985 Sacramento Marina Note Payable, Phase II
Authorized July 1985, issued September 1987, refinanced August 1998, to the California Department of Boating and Waterways, due in annual installments of $27 to $150 through August 2037, bearing an interest rate of 4.5%, for the purpose of financing the expansion of the Sacramento Marina. The debt is secured by collateral of the Sacramento Marina. 2008 Sacramento Marina Note Payable, South Basin
Authorized February 2005, the City had made loan draws of $9,000 plus accrued interest of $1,477 through June 30, 2013, from the California Department of Boating and Waterways (DB&W), for the purpose of constructing the South Basin Improvements at the Sacramento Marina. Principal and interest was due in 30 annual installments of $204 to $662, through August 2041, bearing an interest rate of 4.6%. The City had made no principal payments and only a portion of interest payments on this loan since 2013, and had been working with the DB&W on a loan restructure. Effective August 2019, the DB&W and the City executed a formal agreement to restructure this loan. After restructuring, the maturity dates of previously matured principal and interest amounts have been extended and are no longer past due. The note still bears an interest rate of 4.6% and principal and interest are due in annual installments of $500 to $1,698, through August 2041. The debt is secured by collateral of the Sacramento Marina.

California Department of Public Health
Authorized September 2009 for the installati on of approximately 13,000 water meters. The note, with a 2.5% interest rate, will be repaid over 20 years, through 2033, with annual principal and interest payments of approximately $639. The City pledged future Water Enterprise Fund revenue to repay the note. Current year water fee revenue was $136,613.

California Infrastructure and Economic Development (I-Bank) Authorized in December 2007, due in annual principal and interest installments from $163 to $155 through August 2038, bearing an interest rate of 3.17%, for the purpose of financing the purchase and construction of the Basin 31 Det ention Basin. The City pledged future storm drainage fee revenue to repay the note. The not e is payable solely from the storm drainage fee revenue through August 2038. Total principal and interest remaining to be paid on the note is $2,524. Current year principal and interest paid was $161 and storm drainage fee revenue was $41,901. The loan agreement contains a prov ision that in the event of a default, the principal of the loan and accrued interest on all unpaid installments would be due immediately.

Drinking Water State Revolving Fund (DWSRF)
Authorized in May 2017, the DWSRF has agreed to fund the City’s Accelerated Meter Installation and Pipe Replacement Program. Under the agreement, the City is to pay for project costs upfront and the DWSRF is to reimburse the City with loan amounts not to exceed $173,142. Construction began in October 201 7 with an end date of June 2022. The final reimb
ursement request deadline is December 2022. The note will be repaid over a 20-year period beginning July 2022, bearing an interest rate of 1.7%. Annual principal and interest payments will be approximately $10,248. The City has pledged future water fee revenues to repay the note. Current year water fee rev enues were $136,613. The amount claimed and reimbursed b
y the City as of June 30, 2022 was $138,341.
84 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 7 – LO
NG-TERM LIABILITIES (Continued)
Other Long-term Liabilities
Accrued claims and judgments – Estimated liabilities of the Cit y’s workers’ compensation, auto, and general liability self-insurance programs administered through the Risk Management Internal Service Fund. The first year of salary continuation in the City’s workers’ compensation progr am is accrued and paid by the City’s General Fund, enterprise funds, and internal service funds.

Lease liabilities – The City has entered into various agreements for the intangible right-to-use leased assets. Lease liabilities are recorded at the present value of future fi xed payments for the remaining term of the agreements.

Lease liabilities are reported in accordance with GASB St atement No. 87. Refer to Note 1 and Note 6 for more detailed information.

Compensated absences – Estimated amounts due to employees for earned, but unused, compensated absence accounts, including leave balances for vacation, sick, holiday and compensated time off. Compensated absences are generally liquidated by the City’s General Fund, enterprise funds, and internal service funds.

Net OPEB liability (other postemployme nt benefits) – Net liability for retir ee medical benefits accounted for and reported in accordance with G ASB Statement No. 75. The net OPEB liability is $161,715 and $35,090 for governmental activities and business-type activities, respectively, at June 30, 2022. The net liability is liquidated by the fund that has recorded the liabili ty. Governmental activities net OPEB liability is liquidated primarily by the General Fund and business-type activities net OPEB liability is liquidated by the respective enterprise fund. Refer to Note 9 for more detailed information.

Pollution remediation obligations – Estimated liabilities to address the current or potenti al detrimental effects of existing pollution by participating in pollution remediation activities.

Financing plan fee credits – Issued to developers as consideration for infrastructure and other capital improvements constructed on behalf of the City within the scope of the Delta Shores, North Natomas, Jacinto Creek and other development impact fee programs. Credits are redeemable from or against future impact fees assessed within the geographic boundaries of the finance plan.

Water fee credits – Issued to developers as consideratio n for infrastructure constructed on behalf of the City.

Credits are redeemable from or against future water development impact fees.

Wastewater fee credits – Issued to developers as consideration for infrastructure constructed on behalf of the City.

Credits are redeemable from or against future wastewater development impact fees.

Liability for landfill closure – Estimated post-closure maintenance and monitoring costs for the closed landfill sites.

Net pension liability – The net pension liability is $657,912 and $82,679 for governmental activities and business- type activities, respectively, at June 30, 2022. The net liability is liquidated by the fund that has recorded the liability.

Governmental activities net pension liability is liquidated primarily by the General Fund and business-type activities net pension liability is liquidated by the respective enterprise fund. Refer to Note 8 for more detailed information. 85 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)

NOTE 7 – LONG-TERM LIABILITIES (Continued)

Future Debt Service Requirements

The following tables disclose the annual debt service requirements for the City’s long-term debt outstanding as of June 30, 2022.

Annual debt service requirements of governmental activities to maturity are as follows :

Fiscal Year
Ending June 30, Principal Interest Principal Interest
2023 505 $ 169 $ 14,959 $ 23,652 $ 2024 515 154 15,235 22,911 2025 535 140 15,971 22,079 2026 545 124 16,847 21,203 2027 565 109 17,784 20,279 2028-2032 3,070 292 102,741 86,064 2033-2037 330 4 90,622 59,180 2038-2042 - - 50,160 41,241 2043-2047 - - 65,960 25,420 2048-2050 - - 49,168 5,646 Subtotals 6,065 992 439,447 327,675 Plus: Issuance premiums - - 14,484 - Totals 6,065 $ 992 $ 453,931 $ 327,675 $ Revenue and Other Bonds,
Direct Placements
Revenue and Other Bonds,
Public Offerings

Fiscal Year
Ending June 30, Principal Interest
2023 317 $ 766 $
2024 431 751
2025 474 733
2026 547 710
2027 572 685
2028-2032 3,385 3,001
2033-2037 4,331 2,146
2038-2042 6,645 983
Totals 16,702 $ 9,775 $
Direct Borrowing
Notes Payable

86 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 7 – LO
NG-TERM LIABILITIES (Continued)
Future Debt Service Requirements (Continued)
Annual debt service requirements of business-type a ctivities to maturity are as follows:

Fiscal Year
End
ing June 30, Principal Interest Principal Interest
2023 25,008$ 30,783$ 3,532$ 1,360$
2024 26,130 29,644 6,565 2,420
2025 27,309 28,460 6,683 2,302
2026 28,443 27,309 6,803 2,182
2027 29,596 26,143 6,925 2,060
2028-2032 161,084 111,328 36,534 8,384
2033-2037 139,398 79,823 36,917 5,116
2038-2042 152,775 51,236 39,252 1,856
2043-2047 118,015 21,856 - -
2048-2050 29,104 1,460 - -
Subtotals 736,862 408,042 143,211 25,680
Plus: Issuance premiums 57,350 - - -
Totals 794,212$ 408,042$ 143,211$ 25,680$
Revenue and Other Bonds,
Public Offerings
Direct Borrowing
Notes Payable
Arbitrage
The Tax Reform Act of 1986 instituted certain arbitrage re stri ctions with respect to the issuance of tax-exempt bonds after August 31, 1986. Arbitrage regulations deal with the investment of all tax-exempt bond proceeds at an interest yield greater than the interest yield paid to bondholders. Generally, all interest paid to bondholders can be retroactively rendered taxable if applicable rebates are not reported and paid to the U.S. Department of Treasury at least every five years. During the current year, the City performed calculations of excess investment earnings on various bonds and determined the liability to be zero at June 30, 2022.

Special Assessment Debt
Total matured and unmatured bonds outstanding related to spe cial assessment and special tax districts are
$207,935 at June 30, 2022. The City acts as an agent for t he property owners in collecting special assessments, forwarding the collections to bondholders and initiating foreclosure proceedings, when appropriate. The City is not liable for repayment of the special district bonds, and accordingly, they are not reflected in the accompanying basic financial statements. Cash held on deposit and corresponding amounts payable for the districts are reported in the Custodial Funds.

Conduit Debt
Outstanding obligations related to special facility and redevelopment agency revenue bonds total $148,575 at June 30, 2022. Sp
ecial facility revenue bonds were issued to provide administrative and service facilities for four non- profit organizations and for offices leased to the State of California Department of General Services (State). The bonds issued are special limited obligations of the City, payable solely from and secured by a pledge of revenue to be received from loan or lease agreements between the City and the non-profit organizations or the State. The redevelopment agency bonds were issued by the Sacramento City Financing Authority to finance redevelopment activities and to refund certain other obligations of the redevelopment agency. The City is not liable for repayment of these bonds, and accordingly, they are not reflected in the accompanying basic financial statements. 87 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 8 – PENSION PLANS
Defined Benefit Plan Description
The City of Sacramento provides defined benefit retireme nt be nefits through the Calif ornia Public Employees’ Retirement System (CalPERS) and the Sacramento City Employees’ Retirement System (SCERS). CalPERS is an agent multiple-employer public employee defined benefit pension plan. SCERS is a single-employer defined benefit pension plan.

As of June 30, 2022, the City reported total net pension liability, deferred outflows of resources and deferred inflows of resources for the CalPERS (Miscellaneous and Safety Plans) and SCERS plans as follows:

Net Pension
Liability
Deferred Outflows
of Resources
Deferred Inflows
of Resources
Miscellaneous Plan 241,724$ 50,840$ 121,620$
Safety Plan 482,497 119,183 168,518
SCERS 16,370 9,882 -
Total 740,591$ 179,905$ 290,138$
For the fi
scal year ended June 30, 2022, the City recognized total pension expense of $59,018 for CalPERS and SCERS plans.

CalPERS
All full-time and certain part-time City employees hir ed after January 28, 1977 and City safety employees, regardless of date of hire, are eligible to participate in CalPERS. CalPERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and their beneficiaries. Copies of CalPERS’ annual financial report may be obtained from the CalPERS Executive Office at 400 Q Street, Sacramento, CA 95814. A separate report for the City’s plan within CalPERS is not available.

General Information about the Pension Plan
Plan Description – All q ualified permanent and probationary employee s are eligible to participate in the City’s separate Safety (police and fire) and Miscellaneous (all other) Plans, agent multiple-employer defined benefit pension plans administered by the CalPERS, which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Safety and Miscellaneous Plans (the Plans) are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisio ns, assumptions and membership information that can be found on the CalPERS website at http://www.calpers.ca.gov.

Bene
fits Provided – CalPERS provides retirement and disability benefits, annual cost-of-living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 or 52, depending on the pl an, with statutorily reduced benefits. All members are eligible for non- duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost-of-living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law. 88 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)

NOTE 8 – PENSION PLANS (Continued)

General Information about the Pension Plan (Continued)

The Plans’ provisions and benefits in effect at June 30, 2022, are summarized as follows:

Classic PEPRA
Hire Date
Prior to
January 1, 2013
On or after
January 1, 2013
Formula 2% @ 55 2% @ 62
Benefit vesting schedule 5 years of service 5 years of service Benefit payments monthly for life monthly for life
Retirement age 50-63 52-67
Monthly benefits, as a % of annual salary 1.4% to 2.4% 1.0% to 2.5% Required employee contribution rates 7.10% 7.50%
Required employer contribution rates 23.93% 23.93%
Classic PEPRA
Hire Date
Prior to
January 1, 2013
On or after
January 1, 2013
Formula 3% @ 50 2.7% @ 57
Benefit vesting schedule 5 years of service 5 years of service Benefit payments monthly for life monthly for life
Retirement age 50 50-57
Monthly benefits, as a % of annual salary 3.0% 2.0% to 2.7% Required employee contribution rates 9.99% 13.00%
Required employer contribution rates 53.03% 53.03%
Miscellaneous
Safety

Employees Covered – At June 30, 2020, the most recent valuation date, the following employees were covered by the benefit terms for each Plan:

Miscellaneous Safety
Inactive employees or beneficiaries currently receiving benefits 3,044 1,360 Inactive employees entitled to but not yet receiving benefits 4,501 483 Active employees 2,650 1,304
Total 10,195 3,147

Contributions – Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on July 1 following notice of a change in rate. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rates of employees. For the fisc al year ended June 30, 2022, the contributions for the miscellaneous and safety plans were $47,627 and $74,528, respectively.

89 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)

NOTE 8 – PENSION PLANS (Continued)

Net Pension Liability

The City’s net pension liability for each Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of each of the Plans is measured as of June 30, 2021, using an annual actuarial valuation as of June 30, 2020, roll ed forward to June 30, 2021. 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, 2020 actuarial valuations were determined using the following actuarial assumptions:

Miscellaneous Safety
Valuation Date June 30, 2020 June 30, 2020
Measurement Date June 30, 2021 June 30, 2021
Actuarial Cost Method
Entry-Age Normal
Cost Method
Entry-Age Normal
Cost Method
Actuarial Assumptions:

Discount Rate 7.15% 7.15%
Inflation 2.50% 2.50%
Payroll Growth 2.75% 2.75%
Projected Salary Increase 3.3% - 14.2% (1) 3.3% - 14.2% (1) Investment Rate of Return 7.00% (2) 7.00% (2)
Mortality 2017 CalPERS
Experience Study
2017 CalPERS
Experience Study
(1) Depending on age, service and type of employment
(2) Net of pension plan investment expenses, including inflation

The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2020 valuation were based on the results of a December 2017 actuarial experience study for the period of 1997 to 2015. Further details of the Experience Study c an be found on the CalPERS website at https://www.c alpers.ca.gov/docs/forms- publications/calpers-experience-study-2017.pdf.

90 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 8 – PENSION PLANS (Continued)
Net Pension
Liability (Continued)
Discount Rate – T he discount rate used to measure the total pension liability was 7.15% for each Plan. The projection of cash flows used to determine the discount rate assumed that employee contributions will be made at statutorily required rates. Based on those assumptions, each pension plan’s fiduciary net position was projected to be available to make all projected future benefit pay ments of current plan members. Therefore, the long-term expected rate of return on pension plan investments wa s applied to all periods of projected benefit payments to determine the total pension liability.

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

In determining the long-term expected rate of return, CalPERS to ok into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. 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+ 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 rounded 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 adjusted to account for assumed administrative expenses.

The table below reflects expected real rate of return by asset class.

Asset Class
Assumed Asset
Allocation
Real Return
Years 1 - 10 (1)
Real Return
Years 11+ (2)
Public Equity 50% 4.80% 5.98%
Global Fixed Income 28% 1.00% 2.62%
Inflation Assets - 0.77% 1.81%
Private Equity 8% 6.30% 7.23%
Real Assets 13% 3.75% 4.93%
Liquidity 1% - -

0.92%
Total 100%
(1) An expected inflation of 2% used for this period.
(2) An ex
pected inflation of 2.92% used for this period.
91 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 8 – PENSION PLANS (Continued)
Net Pension
Liability (Continued)
Changes in the Net Pension Liability – Th e changes in the Net Pension Liability for each Plan for the measurement date of June 30, 2021 are as follows:

Miscellaneous Plan:

Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability
Balance at June 30, 2021 1,481,334$ 1,076,422$ 404,912$ Changes in the year:

Service cost 31,307 -
31,307
In
terest on the total pension liability 105,037 - 105,037
3,743
-
3,743
C
ontribution - employer -
43,930
(43,930)
Contribution - employee -
15,899
(15,899)
Net investment income -
244,522
(244,522)
(63,352) (63,352)
-
Administrative expense -
(1,076)
1,076

Net changes 76,735 239,923 (163,188) Balance at June 30, 2022 1,558,069$ 1,316,345$ 241,724$ Safety Plan:

Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability
Balance at June 30, 2021 2,129,490 $ 1,435,924 $ 693,566 $ Changes in the year:

Service cost 44,416 -
44,416
In
terest on the total pension liability 151,131 - 151,131
12,441 -
12,441
C
ontribution - employer -
67,242
(67,242)
Contribution - employee -
25,904
(25,904)
Net investment income -
327,345
(327,345)
(100,827) (100,827)
-
Administrative expense -
(1,434)
1,434

Net changes 107,161 318,230 (211,069) Balance at June 30, 2022 2,236,651$ 1,754,154$ 482,497$ Totals of both Miscellaneous and Safety Plans 3,794,720$ 3,070,499$ 724,221$ Increase (Decrease)
Benefit payments, including refunds
of employee contributions
Increase (Decrease)
Benefit payments, including refunds
of employee contributions
Difference between expected and
actual experience
Difference between expected and
actual experience
92 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 8 – PENSION PLANS (Continued)
Net Pension
Liability (Continued)
Sensitivity of the Net Pension Liabilit y to Changes in the Di scount Rate – The following presents the net pension liability of the City for each Plan, calculated us ing the discount rate for each Plan, as well as what the City’s net position liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1- percentage point higher than the current rate:

Miscellaneous Safety Total
1% Decrease 6.15% 6.15% 6.15%
Net Pension Liability 457,463$ 793,646$ 1,251,109$ Current Discount Rate 7.15% 7.15% 7.15%
Net Pension Liability 241,724$ 482,497$ 724,221$ 1% Increase 8.15% 8.15% 8.15%
Net Pension Liability 64,044$ 227,715$ 291,759$ Pension Plan Fiduciary Net Position – Detailed information about each pension plans’ fiduciary net position is available in the separately issued CalPERS financial reports.

Pension Expense and Deferred Outflows/Inflows of Resources Related to Pensions For the fiscal year ended June 30, 2022, the City recognized pension expense of $13,757 and $46,952 for the Miscellan
eous and Safety Plans, respectively. At June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Pension contributions subsequent to
measurement date 47,627$ - $ 7
4,528$ - $ 122,155$ - $
Changes of assumption - - 6,059 (4,229) 6,059 (4,229) Differences between actual and expected experienc e 3,21 3 - 3 8,596 ( 854) 4 1,809 (854) Net differences between projected and actual
earnings on plan investments - (1 21 ,620) -
(
163,435) -
(285,055)
Total 50,840$ (1 21 ,620)$ 119,183$ (1 68,51 8)$ 1 70,023$ (290,1 38)$ Miscellaneous Plan Safety Plan Total
The amou
nt of $122,155 reported as defe rred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of t he net pension liability in the fiscal year ended June 30, 2023. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized as increases (decreases) in pension expense as follows:

Fiscal Year Ending
June 30, Miscellaneous Plan Safety Plan Total
2023 (28,522)$ (25,407)$ (53,929)$
2024 (27,111) (25,364) (52,475)
2025 (29,211) (31,524) (60,735)
2026 (33,563) (42,272) (75,835)
2027 - 704 704
Total (118,407)$ (123,863)$ (242,270)$
93 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 8 – PENSION PLANS (Continued)
SCERS

The City reports SCERS as a pension trust fund. SCERS issues a publicly available financial report that includes financial statements and required supplementary info rmation. The financial report may be obtained at https://www.cityofsacramento.org/Finance/Accounting/Reporting. The following is a summary of significant accounting policies:

Basis of Accounting – SCERS’ financial statements are prepared using the accrual basis of accounting.

City and member contributions are recognized in the period in which the contributions are due. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan.

Method Used to Value Investments – Investments are reported at fair value, except mortgage loans which are reported at amortized cost. Securities traded on a national or international exchange are valued at the last reported sales price at current exchange rates.

General Information about the Pension Plan
Plan Description – T he SCERS is a closed defined benefit pension plan. It has not accepted new members since January 28, 1977. All full-time, non-safety employees hired before January 29, 1977, are eligible to participate in SCERS.

Benefits Provided – SCERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries based on the plan that they belong to. SCERS has the following plans:

Charter Section 399 Plan – This defined benefit plan was established effective January 1, 1977 to provide retirement, disability and death benefits. Active mem bers contribute at a rate based upon entry age and type of employment. The benefits for this plan are based on the average monthly compensation times years of service times benefit factor, but no larger than 75% of final average earnings. Employees may retire at age 70, or age 50 and 5 years of service.

Equal Shares Plan – This defined benefit plan was establis hed July 1, 1970 to provide retirement, disability and death benefits to all City employees electing coverage at that date and to all employees who were hired from that date through January 1, 1977. The benefits for this plan are based on the average monthly compensation times years of service times benefit factor, but no larger than 75% of final average earnings. Employees may retire at age 70, or age 50 and 5 years of service.

Charter Section 175 Plan – This defined benefit plan was established in 1953 to provide for retirement, disability and death benefits at a lower amount than the successor Equal Shares Plan. The benefits for this plan are based on the average monthly compensation times years of service times benefit factor. For retirement after age 65 with 20 years of service, benefit is minimum of $60 per month. Employees may retire at age 70, or age 55 and 20 years of service.

An employee who leaves City service may withdraw his or her contributions, plus any accumulated interest under all the retirement and disability benefit plans described above. 94 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)

NOTE 8 – PENSION PLANS (Continued)

General Information about the Pension Plan (Continued)

Benefit factors at sample ages for benefit plans described above are as follows:

Retirement Age Section 175
Section 399 and
Equal Share
50 N/A 1.10%
55 1.10% 1.75%
60 1.67% 2.40%
65 2.44% 2.40%

Employees Covered – At June 30, 2022, the following employees were covered by the benefit terms for each Plan:

Section
399
Equal
Shares
Section
175 Total
Inactive members or beneficiaries receiving benefits 750 34 37 821 Inactive members entitled to but not yet receiving benefits 4 - 1 5 Active plan members 2 - - 2 Total plan members 756 34 38 828

Cost-of-living Adjustment – This adjustment, established in 1969, provides for annual retirement benefit increases of up to 3% of normal benefits based on a corresponding rise in the consumer price index. Cost-of- living benefits are payable to retirees and beneficiaries of all of the above plans after one year of retirement.

The cost-of-living adjustment was 1.7% for fiscal year 2022. Members contribute to this adjustment at a rate of 1% of their normal retirement contributions. The City is required to fund all costs in excess of members’ contributions and investment earnings.

Social Security Adjustments – For members participating in Social Security, their benefit will be adjusted at the later of age 62 or actual retirement age. The amount of the adjustment is one half of the primary insurance amount (PIA) from Social Security, multiplied by the ratio of the sum of salary earned from the City to the sum of salary from all sources used in the calculation of the Social Security amount. The member’s benefit under SCERS plus the amount received from Social Security cannot be less than the member’s benefit under SCERS calculated with no reductions at the time of retirement. The City applies this offset to service retirees, not to disabled retirees.

Contributions – The City Charter grants the authority to establish and amend the contribution requirements of the City and active employees to the SCERS Board. The SCERS Board establishes rates based on actuarially determined rates recommended by an independent actuary. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrual liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees . For the fiscal year ended June 30, 2022, the average active employee contribution rate was 4.76% of annual pay, and the City’s average contribution rate was 0.88% of annual payroll. For the fiscal year ended June 30, 2022, the contributions for the SCERS plan were $3,479.

95 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)

NOTE 8 – PENSION PLANS (Continued)

Net Pension Liability

The City’s net pension liability for SCERS was measured as of June 30, 2022 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date.

Actuarial Assumption – The total pension liability in the June 30, 2022 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation 2.50%
Salary increase 2.50% CPI Plus 0.5% merit, average
Discount rate 6.00%

Mortality rates for service retirements and beneficia ries were based on CalPERS 2000-2019 Mortality Table projected for future mortality improvement utilizing Society of Actuaries Scale MP-2021. Mortality rates for disability retirements were based on CalPERS 2000-2019 Mortality Table for non-work related Disabled Retirees for Miscellaneous and CalPERS 2000-2019 Mortality Table for work-related Disabled Retirees for Safety. Both tables were projected for future mortality improvement utilizing Society of Actuaries Scale MP-2021.

The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for ea ch major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Asset Class Target Allocation
Long-Term Expected
Real Rate of Return
Fixed Income 32.5% 2.6%
Large Cap Growth 32.5% 7.1%
Equity Income 30.0% 7.1%
International Equity 5.0% 7.3%
Total 100.0%

Discount Rate – The discount rate used to measure the total pension liability was 6%. The projection of cash flows used to determine the discount rate assumed that employee contributions will be made at the current contribution rate and that City contributions will be made at rates equal to the difference between actuarially determined contributions rates and the employee rate. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected fu ture benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

96 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)

NOTE 8 – PENSION PLANS (Continued)

Net Pension Liability (Continued)

Changes in the Net Pension Liability (Asset) – The changes in the Net Pension Liability (Asset) for the SCERS Plan for the measurement date of June 30, 2022 is as follows:

Total Pension
Liability
Plan Fiduciary Net
Position
Net Pension
Liability (Asset)
Balance at June 30, 2021 282,359 $ 311,133 $ (28,774) $ Changes in the year:

Service cost 6 - 6 Interest on the total pension liability 16,098 - 16,098 Change of assumptions 218 - 218 Differences between expected and actual
experience 5 - 5 Contribution - employer - 3,479 (3,479) Contribution - employee - 9 (9) Net investment loss - (32,305) 32,305 Benefit payments, including refunds of
employee contributions (28,145) (28,145) - Net changes (11,818) (56,962) 45,144 Balance at June 30, 2022 270,541$ 254,171$ 16,370$ Increase (Decrease)

Change of assumptions and changes in experience affecting the measurement of the Total Pension Liability since the prior measurement date – Mortality tables were changed from the CalPERS 1997-2015 experience study tables to the CalPERS 2000-2019 experience study stables. Mortality improvement was changed from fully generational projection with Society of Act uaries Scale MP-2020 to fully generational projection with Society of Actuaries Scale MP-2021. The overall experience loss was due to a cost of living increase greater than expected, but this was offset by more deaths than expected.

Sensitivity of the Net Pension Liabilit y to Changes in the Discount Rate – The following presents the net pension liability of the City for the SCERS plan, calculated using the discount rate for the SCERS Plan, as well as what the City’s net pension liability (asset) would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:

1% decrease
(5%)
Current
Discount Rate
(6%)
1% increase
(7%)
SCERS net pension liability (asset) 37,244 $ 16,370 $ (1,916) $

Pension Plan Fiduciary Net Position – Detailed information about the pension plan’s fiduciary net position is available in the Basic Financial Statements section of this report and the separately issued SCERS financial report that may be obtained at https://www.cityofsacramento.org/Finance/Accounting/Reporting.

97 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 8 – PENSION PLANS (Continued)
Pension Exp
ense and Deferred Outflows/Inflows of Resources Related to Pensions For the fiscal year ended June 30, 2022, the City recognized pen sion expense (income) of $(1,691) attributable to the SCERS plans. At June 30, 2022, the City reported deferred outflows of resources related to pensions from the following sources:

Deferred
Outflows of
Resources
Net differences between projected and actual
earnings on plan investments 9,882$
Amounts
reported as deferred outflows of resources re lated to pensions will be recognized as increases (decreases) in pension expense as follows:

Fiscal Year Ending
June 30,
Deferred
Outflows
of Resources
2023 515$
2024 647
2025 (1,324)
2026 10,044
Total 9,882$
Defin
ed Contribution Plan
The City also provides defined contribution retirement benefits thro ugh the City’s 401(a) Money Purchase Plan (the 401(a)). The 401(a) is administered by Nationwide. The 401(a) provisions and contribution requirements are established and may be amended by City Council. Unre presented exempt and certain represented employees may elect to participate. Participating employees of the aforementioned groups are required to contribute 5% and 2%, and the City contributes 4% and 2%, respectively, of covered salary. For the fiscal year ended June 30, 2022, employees contributed $5,106 and the City contributed $4,205 to the 401(a).

NOTE 9 – O THER POSTEMPLOYMENT BENEFITS (OPEB)
General Information
Plan Description – The City provides contributions for postempl oyment medical, dental and vision benefits to employees who retire directly from the City and t heir dependents through an agent-multiple employer defined benefit OPEB plan (OPEB Plan) through CalPERS. The postemployment health, dental, and vision care employer contributions range from $0 to $889 per month per participant, which covers between 0% and 100% of the benefit cost, depending on the choice of plan and number of dependents. Participants have the choice of enrolling in one of several health plans, one of two dental plans, and one of two vision plans. To be eligible for the City paid benefits, the employee must retire with a minimum of ten full years of active City service and be 50 years of age. Participants with a minimum of twenty years of service are eligible for 100% of the maximum benefit. Participants with more than fifteen years but less than twenty y ears of service are eligible for 75% of the maximum benefit. Participants with more than ten years but less than fifteen years of service are eligible for 50% of the maximum benefit. The eligibility of the City’s postemployment health contributions has been eliminated for employees hired after a certain date dependent upon the employee’s labor agreement. The postemployment health, dental and vision care contributions are defined by labor agreements and resoluti ons approved by the City Council. The City does not issue a separate stand-alone financial report for its OPEB plan.

In addition, the City established an irrevocable trust to pre-fund the other benefits with the California Employers’ Retiree Benefit Trust (CERBT). The CERBT financial statements and additional reports can be obtained from the CalPERS website www.calpers.ca.gov.
98 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 9 – OTHER POST
EMPLOYMENT BENEFITS (OPEB) (Continued)
General Information (Continued)
Employees Covered – At June 30, 2021, the most re cent valuation date, the following current and former employees were covered by the benefit terms under the OPEB Plan:

Inactive employees or beneficiaries currently receiving benefits 2,991 Inactive employees entitled to but not yet receiving benefits 383 Active employees 3,899
Total 7,273
Cont
ributions – The plan and its contribution requirements are established by memorandums of understanding with the applicable employee bargaining units and ma y be amended by agreements between the City and the bargaining units. The City is mainly funding the OPEB Plan on a pay-as-you-go basis. However, the City Council has authorized the City Manag er to establish an OPEB trust fund with CalPERS that the City pre-funds with budgetary savings. Contributions recognized by the OPEB plan from the employer for the fiscal year ended June 30, 2022 were $24,675.

Net OPEB Liability
The City’s net OPEB liability is measured as the total OPEB liability, less the OPEB plan’s fiducia ry net position.

The net OPEB liability is measured as of June 30, 2021, using an annual actuarial valuation as of June 30, 2021.

A summary of principal assumptions and methods used to determine the net OPEB liability is shown below.

Actuarial Assumptions – The total OPEB liability in the June 30, 2021 actuarial valuation was determined using the following actuarial assumptions:

Valuation Date June 30, 2021
Measurement Date June 30, 2021
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:

Discount Rate 6.25%
Inflation 2.50%
Salary Increases 2.75%
Investment Rate of Return 6.25%
Healthcare cost trend rate Non-Medicare - 6.5% for 2023, decreasing to

3.75% for 2076 and later.

Medicare (Non-Kaiser) - 5.65% for 2023,
decreasing to 3.75% for 2076 and later.

Medicare (Kaiser) - 4.6% for 2023, decreasing
to 3.75% in 2076.

Mortality and pre-reti
rement turnover assumptions were developed based on CalPERS’ specific data. For further details, please refer to the 2021 Experience Study based on CalPERS’ demographic experience during fiscal years 2000 to 2019. The 2021 Experience Study Report may be accessed on the CalPERS website www.calpers.ca.gov under Forms and Publications.
99 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 9 – OTHER POS
TEMPLOYMENT BENEFITS (OPEB) (Continued)
Net OPEB Liability (Continued)
Discount Rate – The discount rate used to measure the tota l OPEB liability was 6.25% for the OPEB Plan. The projection of cash flows used to determine the discount rate assumed an annual trust contribution of $1,500, which is lower than the City’s annual trust contribution average for the previous five fiscal years. Based on this assumption, the OPEB Plan’s fiduciary net position was proj ected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on the OPEB Plan investments was applied to all periods of projected benefit pa yments to determine the total OPEB liability.

The long-term expected real rate of return on the OPEB Plan investments was determined using stochastic modeling based on expected real rate of return, standard deviation, correlation coefficients, and target allocation for each major asset class. The resulting real rate of return for the portfolio at the 50% confidence level is then adjusted for assumed long-term inflation and investment expenses to produce the long-term expected rate of return for the portfolio. The target asset allocation and most recent best estimates of geometric real rates of return for each major asset class are summarized in the following table:

Asset Class Target Allocation
Long Term Expected
Real Rate of Return
Global Equity 59% 4.56%
Fixed Income 25% 0.78%
Treasury Inflation-Protected Securities (TIPS) 5% -0.08% Commodities 3% 1.22%
Real Estate Investment Trusts (REITs) 8% 4.06%
Total 100%
Changes in the Net OPEB
Liability – The changes in the net OPEB liabilit y for the OPEB Plan as of June 30, 2022 are as follows:

Total OPEB Liability
Plan Fiduciary
Net Position
Net OPEB
Liability
Balance at June 30, 2021 297,704$ 53,455$ 244,249$ Changes in the year:

Service cost 5,919 - 5,919
Interest on the total OPEB liability 19,968 - 19,968 (40,332) - (40,332)
Changes of assumptions 3,978 - 3,978
Contribution - employer - 21,687 (21,687)
Contribution - employee - - -
Net investment income - 15,311 (15,311)
(15,625) (15,625) -
Administrative expense - (21) 21
Net changes (26,092) 21,352 (47,444)
Balance at June 30, 2022 271,612$ 74,807$ 196,805$
Increase (Decrease)
Benefit payments, including refunds
Difference between expected and
actual experience
100
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 9 – OTHER POS
TEMPLOYMENT BENEFITS (OPEB) (Continued)
Net OPEB Liability (Continued)
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate – The following presents the City's net OPEB liability, as well as what the City's net OPEB liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current discount rate:
1% decrease
(5.25%)
Current Rate
(6.25%)
1% increase
(7.25%)
Net OPEB liability 228,974$ 196,805$ 169,776$ Discount Rate
Sensitivity of the Net OP
EB liability to Changes in the Healthcare Cost Trend Rates – The following presents the City's net OPEB liability, as well as what the net 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:
1% Decrease in
Current Trend Rate Current Trend Rate
1% Increase in
Current Trend Rate
Net OPEB liability 174,884 $ 196,805$ 223,251$ Healthcare Cost Trend Rate
OPEB Plan Fiduciary Net Position – Detailed information about the O PEB Plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB – For the fiscal year ended June 30, 2022, the City recognized OPEB expense (income) of $(14,897). At June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred
Outflow s of
Resources
Deferred
Inf low s of
Resources
Employer contributions subsequent to
measurement date 24,675 $ - $
Changes of assumption 3,356 (65,425)
Differences betw een actual and expected experience - (48,971) Net differences betw een projected and actual
earnings on plan investments - (7,972)
Total 28,031 $ (122,368)$
101
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)

NOTE 9 – OTHER POSTEMPLOYMENT BENEFITS (OPEB) (Continued)

Net OPEB Liability (Continued)

The amount of $24,675 reported as deferred outflows of resources related to OPEB resulting from the OPEB Plan contributions subsequent to the measurement date will be recognized as a reduction of the net OPEB liability during the fiscal year ending June 30, 2023. Other amounts reported as deferred outflows and inflows of resources related to OPEB will be recognized as decreases in OPEB expense as follows:

Fiscal Year Ending
June 30,
Deferred
Outflows (Inflows)
of Resources
2023 (36,872)$
2024 (33,215)
2025 (28,284)
2026 (12,556)
2027 (5,811)
Thereafter (2,274)
Total (119,012)$

NOTE 10 – FUND EQUITY AND EXCESS OF EXPENDITURES OVER APPROPRIATIONS

At June 30, 2022, the government-wide statement of net position reported restricted net position of $393,619 in governmental activities. Of this amount, $52,710 is restricted for enabling legislation.

The Capital Grants Fund, a capital projects fund, had a def icit fund balance of $3,889 as of June 30, 2022. The deficit represents grant expenditures unreimbursed by granting agencies within the 60-day period of availability for which corresponding revenues have not been recognized. Th e deficit will be recovered upon receipt of grantor reimbursements.

The 4th R Child Development Fund, an enterprise fund, had a deficit net position of $2,885 as of June 30, 2022. It is anticipated that this deficit will be funded by future operating subsidies.

For the fiscal year ended June 30, 2022, General Fund expenditures for the Fire Department and citywide community support exceeded appropriations by $6,201 and $2,356, respectively. The overspending was funded by revenue collected in excess of budgeted amounts.

For the fiscal year ended June 30, 2022, Measure U Fund expenditures for citywide and community support exceeded appropriations by $512. The overspending was funded by revenue collected in excess of budgeted amounts.

For the fiscal year ended June 30, 2022, Culture and Leisure Fund expenditures for convention and cultural services exceeded appropriations by $350. The oversp ending was funded by revenue collected in excess of budgeted amounts.

For the fiscal year ended June 30, 2022, Special Districts Fund expenditures for general government exceeded appropriations by $571, convention and cultural services by $2,295, and library by $2. This overspending was funded by revenue collected in excess of budgeted amounts.

102
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 11 – INT

ERFUND TRANSACTIONS
Interfund Transfers
Interfund transfers report the no nreciprocal contribution of resources from one fund to another. The following is a summary of transfers for the fiscal year ended June 30, 2022:

Description Transfers In Transfers Out Net Transfers
Governmental activities:

General Fund Debt service 308 $ (16,710)$ (16,402)$ General Fund In-lieu tax transfers 35,451 -
35,451
General Fund Program support 12,425 (19,300) (6,875) Measure U Fund Program support 33 (3,676) (3,643) 2015 Golden 1 Center
Lease Revenue Bond Fund Debt service 10,600 -
10,600
Operating Grants Fund Program support - (2,930) (2,930) Other Governmental Funds Debt service 18,107 (5,259) 12,848 Other Governmental Funds Program support 9,166 (11,170) (2,004)
Internal Service Funds Debt service 21 (45)
(24)
Internal Service Funds Program support - (1,026) (1,026) Total governmental activities 86,111 (60,116) 25,995 Business-type activities:

Water Fund Debt service - (34) (34)
Water Fund In-lieu tax transfers - (14,576)
(14,576)
Water Fund Program support 117 (486) (369) Wastewater Fund Debt service - (46) (46)
Wastewater Fund In-lieu tax transfers - (4,719) (4,719) Wastewater Fund Program support 62 - 62
Storm Drainage Fund Debt service - (74) (74)
Storm Drainage Fund In-lieu tax transfers - (4,369) (4,369) Storm Drainage Fund Program support 53 (159) (106) Solid Waste Fund Debt service - (108)
(108)
Solid Waste Fund In-lieu tax transfers - (8,306) (8,306) Solid Waste Fund Program support 349
- 349
Co
mmunity Center Fund Debt service 2,741 -
2,741
Co
mmunity Center Fund In-lieu tax transfers - (1,993) (1,993) Community Center Fund Program support 6,720 (637) 6 ,083
Oth
er Enterprise Funds Debt service - (9,500) (9,500)
Other Enterprise Funds In-lieu tax transfers - (1,488) (1,488) Other Enterprise Funds Program support 10,458 - 10
,458
Total business-type activities 20,500 (46,495) (25,995) Total government-wide statements 106,611$ (106,611)$ -$ 103
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 11 – I
NTERFUND TRANSACTIONS (Continued)
Interfund Balances
Interfund balances report lending transactions between fun ds. The following is a summary of interfund balances as of June 30, 2022:

Interfund
Receivables Payables Balances
General Fund - $
(1,873)$ (1,873)$
Other Governmental Funds -
(7,628) (7,628)
Internal Service Funds 14,532 -
14,532
Total governmental activities 14,532 (9,501) 5,031 Community Center Fund - (
5,031) (5,031)
Total business-type activities - (
5,031) (
5,031)
Total 14,532$ (14,532)$ -$
$14,53
2 was loaned by the City’s internal service funds to cover short-term operating deficits (approximately $6,093) and to assist in development of community resources (approximately $8,439). Included in the $14,532 of interfund loans is $11,002 that is not expected to be repaid within one year. $1,657 was borrowed by the Capital Grants Fund for short-term loans. $5,971 was borrowed by the Culture and Leisure Fund for the Haggin Oaks renovation project and operating deficit. $5,031 was borrowed by the Community Center Fund for operational requirements. $1,873 was borrowed by the General Fund for the acquisition of Habitat Conservation Plan mitigation lands by the Natomas Basin Conservancy.
104
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 12 – RISK

MANAGEMENT
The City is exposed to various risks of loss related to the following: worker’s compensation; torts including errors and omissions; employment practices; theft of, damage to and destruction of assets; and natural disasters for which the City self-insures and/or carries commercial insu rance. Earthquake damage is not included in the property insurance coverage carried by the City.

The Risk Management Internal Service Fund self-insures the first $2,000 of each workers’ compensation claim.

Excess worker’s compensation insurance is purchased through the Public Risk Innovation, Solutions, and Management (PRISM) member directed risk sharing pool and it provides statutory coverage over the City’s $2,000 self-insured retention. The fund self-insures the first $2,000 of liability claims plus claim costs that exceed excess coverage. PRISM provides $35,000 in excess general and auto liability claims coverage, with a $2,000 loss corridor deductible, for claims over the City’s self-insured retention.

Liabilities are estimated based on recommendations from an independent actuarial evaluation. Liabilities are based on estimated ultimate cost of settling claims, including e ffects of inflation and other social and economic factors.

The estimated liability is then discounted by the City’s expected rate of return and anticipated timing of cash outlays to determine the present value of the liability. For the fiscal year ended June 30, 2022, the expected rate of return was 3%. Settled claims have not exceeded insurance coverage for each of the past three fiscal years.

All funds of the City participate in the program and make payments to the Risk Management Internal Service Fund based on estimates of the amounts needed to pay operating costs, insurance premiums, and prior and current year claims. At June 30, 2022, the Risk Management Internal Service Fund had a net position of $13,780.

Liabilities are reported when it is probable that a loss has occurred, and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not repor ted (IBNR). The result of the process to estimate the claims liability is not an exact amount as it depends on many complex factors, such as inflation, changes in legal doctrines, economic and social factors, and trends in damage awards. Accordingly, claims are reevaluated periodically to consider the effects of these factors. The estimate of the claims liability also includes amounts for incremental claim adjustment expenses related to specific claims and other claim adjustment expenses regardless of whether allocated to specific claims. Estimated recoveries, for example from salvage or subrogation, are another component of the claim liability estimate.

Changes in the Risk Management Internal Service F und’s claims liability for the past two fiscal years are summarized as follows:
2022 2021
Accrued claims and judgments, July 1 102,410$ 91,911$
Incurred claims and adjustment expenses 30,617 25,781 Claim payments (21,211) (15,282)
Accrued claims and judgments, June 30 111,816$ 102,410$ 105
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 13 – COMMITMENTS AND CONTINGENCIES
Commitment of Fund Revenues
Revenue of the Water Enterprise Fund is pledged to the pay ment of principal and interest on the California Department of Public Health Note Payable; the Drinki ng Water State Revolving Fund Note Pay able; the Water Revenue Bonds, Series 2013; the Water Revenue Bonds, Series 2017 and the Water Revenue Refunding Bonds, Series 2020. Revenue of the Wastewater Enterprise Fund is pledged to the payment of principal and interest on the Wastewater Revenue Bonds, Series 2013; the Wast ewater Revenue Bonds , Series 2019 and Wastewater Revenue Refunding Bonds, Series 2020. Revenue of the Storm Drainage Enterprise Fund is pledged to the payment of principal and interest on the California Infrastructure and Economic Development Bank Note Payable.

Transient Occupancy Tax (TOT) revenue of the Community Center Fund is pledged to the payment of principal and interest on the 2018 TOT Rev enue Bonds, Senior Series A, B and Subordinate Series C. Revenue of the Sacramento Tourism Infrastructure District (STID) Fund, a subfund of the Special Districts Special Revenue Fund, is pledged to the payment of principal and interest on the 2019 Sacramento Tourism Infrastructure District (STID) Assessment Revenue Bonds. See Note 7 for more detailed information.

Construction and Other Commitments
The City has commitments of $105,975 for contracts awarded but not completed as of June 30, 2022. The following table shows the distribution of those commitments among major and nonmajor funds.

Governmental Activities: Business-type Activities:

General Fund 11,708$ Water Fund 21,368$
Measure U Fund 12,060 Wastewater Fund 4,575
Other governmental funds 28,787 Storm Drainage Fund 2,872 Internal service funds 17,499 Solid Waste Fund 3,287 Community Center Fund 2,688
Other enterprise funds 1,131
Total governmental activities 70,054$ Total business-type activities 35,921$ The major co
ntracts outstanding are $3,666 for installation of motor-controlled valves and drainage system as part of the Ground Water Flush-to-Waste project; $3,325 for AWMP installations tracking and investigation and contract compliance; $3,190 for Hope Cooperative outreach services within the Department of Community Response; $3,048 for providing support to businesses affected by COVID-19; $2,811 for the operation of Outreach and Engagement Center for providing respite resources for the most vulnerable members of the community; $2,631 for Oak Park Broadway development; $2,175 for support services and public outreach for youth development; $2,062 for the Sacramento River Water Treatment Plant Expansion Project; $2,000 for assisting La Familia Counseling Center with property acquisition, site readiness work and overall project support; and $17,087 for the purchase of vehicles, primarily for the replacement of refuse trucks and garbage trucks.

Contingent Liabilities
The City participates in various fe de ral, state, and local grant programs primarily including the American Rescue Plan Act and the Emergency Rental Assistance Program. These programs are subject to financial and compliance audits by the grantors or their representatives. The audits of these programs for earlier years and the fiscal year ended June 30, 2022 have not been completed in all cases; accordingly, final determination of the City’s compliance with applicable grant requirements may be establ ished at some future date. The amount, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time. The City believes any such claims would be immaterial to the City ’s financial position at June 30, 2022. Receipt of these grant revenues is not assured in the future.
106
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)

NOTE 13 – COMMITMENTS AND CONTINGENCIES (Continued)

Litigation

Various claims and lawsuits are pending against the City. As discussed in Note 12, the City is primarily self-insured and has accrued a liability for estimated claims outstanding. Although the outcome of these claims and lawsuits is not presently determinable, management, after consultation with legal counsel, is of the opinion that final outcome of these matters will not have a material adverse effect on the financial condition of the City.

Landfill Post Closure Care Cost

The City has several landfill sites which have stopped accepting waste, have been covered, and are closed. State and federal laws and regulations require that the City perform certain maintenance and monitoring functions at these sites after closure. The most recent engineering report estimated that $4,336 was required for future post closure monitoring costs as of June 30, 2021. The estimate was based on actual costs for the fiscal years ended June 30, 2018, 2019, and 2020, and may change due to inflation or deflation, technology, or applicable laws and regulations. The estimated liability was amortized to $4,038 as of June 30, 2022.

Pollution Remediation Obligations

A pollution remediation obligation is an obligation to address the current or potential detrimental effects of existing pollution by participating in pollution remediation activi ties. The City is responsib le for pollution remediation activities at several sites that have soil contaminated with petroleum, hydrocarbons, and/or metals. Regulatory agencies providing oversight of the City’s pollution remediation obligations and activities include the State of California Regional Water Quality Control Board, the State of California Depar tment of Toxic Substance Control, the Sacramento County Department of Environmental Management, and the State of California Department of Public Health. The estimated obligation was $573 at June 30, 2021 and $596 at June 30, 2022. Pollution remediation outlays totaled approximately $59 for the fiscal year ended June 30, 2022. Pollution remediation obligations are measured based on outlays expected to be incurred to settle all estimable remediation efforts.

Pollution remediation obligations are measured at the cu rrent value of reasonable and supportable assumptions about future events that may affect the eventual settlement of the obligations. Pollution remediation obligations are measured using the expected cash flow technique, which measures the ob ligation as the sum of probability- weighted amounts in a range of possible cash flows. Estimates are based on all currently available information, as well as the facts and circumstances of each situation, but may change due to price changes, changes in laws or regulations, changes in remediation technologies, or as additional information become available. There are no estimated recoveries from other parties that are inclu ded in the calculation of the City’s pollution remediation obligations.

NOTE 14 – JOINT VENTURES AND JOINTLY GOVERNED ORGANIZATIONS

JOINT VENTURES

Aggie Square Public Financing Authority

The City is a participant with UC Davis and Wexford Science and Technology in the Aggie Square Public Financing Authority, formed in April 2021. As of June 30, 2022, the Aggie Square boa rd is made up of three City appointed council members and two members of the public. Aggie Squa re is a project located at Stockton Boulevard and Second Avenue in Sacramento, mostly on property owned by UC Davis. It would expand the university’s Sacramento campus, creating a state- of-the-art hub for research, inno vation, and education. The proposed agreement between the City, UC Davis and Wexford Science and Technology includes inclusive economic development measures that reflect community priorities, including creation of an affordable housing fund prioritizing local residents for entry-level and higher-wage jobs and prov iding training pathways to those jobs; and improving biking, walking and transit access around the UC Davis Sacramento campus on Stockton Boulevard.

107
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)

NOTE 14 – JOINT VENTURES AND JOINTLY GOVERNED ORGANIZATIONS (Continued)

Sacramento Housing and Redevelopment Agency

The City is a participant with the County of Sacramen to in the Sacramento Housing and Redevelopment Agency (SHRA). SHRA is a stand-alone agency governed by the County Board of Supervisors over County housing activities and the City Council over City housing activiti es. Although the City does not have an equity interest in SHRA, it does have an ongoing financial interest. Based upon the approval process for activities of the Housing Authority of the City of Sacramento (H ousing Authority), the City has the ability to directly influence SHRA to undertake projects for the ci tizenry of the City. Because the City’s primary government does not have an equity interest in SHRA, SHRA’s financial information is not included in these financial st atements. Separately issued financial statements may be obtained from the Sacramento Housing and Redevelopment Agency, 801 12 th Street,
Sacramento, California, 95814.

SHRA administered the redevelopment agencies of the City and County until February 1, 2012. In 2011 the California Legislature enacted AB 1x 26, which coupled with a subsequent decision of the State Supreme Court, resulted in the dissolution of redevelopment agencies. Upon the dissolution of the redevelopment agency, the City elected to become the successor agency for the non-hou sing redevelopment agency activities. More information can be found in Note 15 – Successor Agency Trust Fund. The City designated the Housing Authority as the local authority to retain the housing assets and functions previously performed by the redevelopment agency, and the Housing Authority affirmatively elected pursuant to Heal th and Safety Code Section 34176 that it would serve as the “Successor Housing Agency” to the former redevelopment agency.

Sacramento Public Library Authority

The City is a participant with the County of Sacramento and the cities of Citrus Height s, Elk Grove, Galt, Isleton and Rancho Cordova in the Sacramento Public Library Authority (Library), a joint powers agency created to provide library services to the residents of the participating municipalities. The Library is governed by a board made up of five County appointees and various numbers of appointees from each city, depending upon population. As of June 30, 2022, five of seventeen members of the Library boar d were appointed by the City. The current joint powers agreement was effective beginning July 1, 2007. After June 30, 2010, any party may wi thdraw from the Library upon no less than one year’s written notice. Upon withdrawal a party shall retain ownership of those capital facilities to which it holds title. The City is committed to fund annual contributions to operate library branches in the City.

The City’s Measure U Fund contributions for the fiscal year ended June 30, 2022, were $13,572. In addition, the City paid cost reimbursements and program support of $18 to the Library during the same period. The City also contributed the use of its library facilities to the Library. In order to provide funding for additional services and hours in City libraries, the City levies and passes through to the Library a parcel tax which totaled $8,777 for the fiscal year ended June 30, 2022. Financial statements may be obtained from the Sacramento Public Library Authority, 828 I Street, Sacramento, California, 95814.

Sacramento Regional Fire/EMS Communication Center

The City is a participant with the Sacramento Metropolitan Fire District and other local fire agencies in the Sacramento Regional Fire/EMS Communication Center (SRFECC), a fire dispatch center. SRFECC provides fire protection and emergency medical service dispatching for 1,000 square miles and 1.3 million residents in Sacramento and Placer Counties. The City provided $4,880 of support to SRFECC during the fiscal year ended June 30, 2022. Financial statements may be obtained from the Sacramento Regional Fire/EMS Communication Center, 10230 Systems Parkway, Sacramento, California, 95827.

Northern California Regional Public Safety Training Authority

The City is a participant with the County of Sacramento, the Los Rios Community College District and the Regional Fire and Rescue Authority in the Northern California Regional Public Safety Training Authority (NCRPSTA) which operates the Northern California Regional Public Safe ty Training College located at McClellan Park. During the fiscal year ended June 30, 2022, the City provided $558 of annual support to the NCRPSTA. Payments for rent and training during the fiscal year ended June 30, 2022 were $8. Financial statements may be obtained from the NCRPSTA Administrative Offices, 2409 Dean Street, Suite 119, McClellan, California, 95652.

108
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 14 – J
OINT VENTURES AND JOINTLY GOVERNED ORGANIZATIONS (Continued) California Fire and Rescue Training Authority
The City is a participant with the Sacramento Metropolitan Fi re District and the California Governor’s Office of Emergency Services in the California Fire and Rescue Training Authority which provides training for fire and rescue personnel throughout the region as well as operating the California Regional Fire Academy. During the fiscal year ended June 30, 2022, the City provided general support of $4 5, paid $283 for training courses for City staff and provided staff support. Financial statements may be obtained from the California Fire and Rescue Training Authority Business Office, 10545 Armstrong Avenue, Suite 320, Mather, CA 95655.

Riverfront Joint Powers Authority
The City is a participant with the City of West Sacramento in the Ri verfront Joint Powers Authority, formed in March
2017, to create, own and operate a fixed-rail streetcar system that woul d have operated within and between the two Cities. Initial bids for the project were received and exceeded the available project budget. A resolution was passed by City Council in October 2019 to develop an al ternative plan with partnering agencies for a successor light rail transit project in place of the streetcar and sought collaboration with the City of West Sacramento to identify the necessary steps to dissolve the Riverfront Joint Powers Authority. A motion was passed by the City, in August 2020, to dissolve the Riverfront Joint Powers Authority. Subsequently, another motion was passed by the City to terminate the subrecipient agreement signed in 2017 with West Sacramento on February 1, 2022.

JOINTLY GOVERNED ORGANIZATIONS WITH RELATED PARTY TRANSACTIONS The City participates in several jointly governed organiza tion s for which it appoints a minority of board members.

The City may also provide minor financial support or hav e other financial transactions with these organizations, but it does not have a financial interest in or responsi bility to the organizations. The following organizations had financial transactions with the City during the fiscal year ended June 30, 2022:

The City provided $130 in annual support and $105 in project/program expenses to the Regional Water Authority.

The City provided $230 in annual support to the Sacramento Groundwater Authority.

The City provided $177 in annual support and $34 in program expenses to the Sacramento Area Council of Governments.

The City received $285 of administration fees from t he Sacramento Area Flood Control Agency (SAFCA) for collecting and transmitting permitting fees. The City also participates in several cost-sharing agreements with SAFCA for individual projects related to flood control. The City’s portion of said projects is remitted directly to SAFCA or other suppliers of services.

The City received $68 in Workforce Investment Act grants from the Sacramento Employee and Training Agency.
109
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)

NOTE 15 – SUCCESSOR AGENCY TRUST FUND

On December 29, 2011, the California Supreme Court upheld Assembly Bill x1 26 (“the Bill”) which dissolved all redevelopment agencies in the State of California. Succes sor agencies are allocated property tax revenue in an amount necessary to pay the estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full.

In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on December 29, 2011), all redevelopment agencies in the State of California were dissolved and ceased to operate as legal entities as of February 1, 2012.

On January 31, 2012, the City elected to serve as the successor agency to the Redevelopment Agency of the City of Sacramento (Agency) for the Agency’s non-housing assets and liabilities pursuant to the provisions of AB x1 26 (Chapter 5, Statutes of 2011). Also, on January 1, 2012, the City Council el ected not to serve as the successor agency for the former redevelopment agency’s housing assets and functions, but instead designated the City’s Housing Authority to serve as the successor housing agency.

Prior to February 1, 2012, California Redevelopment Law provided tax increment financing as a source of revenue to redevelopment agencies to fund redevelopment activities. Once a redevelopment area was adopted, the former Agency could only receive tax increment to the extent that it could show on an annual basis that it has incurred indebtedness that must be repaid with tax increment. Due to the nature of redevelopment financing, the former Agency liabilities exceeded its assets. Therefore, the A gency historically carried a deficit, which was expected to be reduced as future tax increment revenues were received and used to repay its outstanding long-term debt. This deficit was transferred to the successor agency on February 1, 2012. At June 30, 2022, the successor agency had a deficit net position of $168,420 which will be eliminated with future property tax revenue distributions from the Redevelopment Property Tax Trust Fund administered by the County Auditor-Controller.

On June 27, 2012, Assembly Bill 1484 was enacted. Under AB 1484 (Chapter 16, Statutes of 2012; Health and Safety Code section 34173, subdivision (g)), the dissolution law was clarified to provide that the Agency is a separate legal entity from the City. Also, AB 1484 provided that the Agency’s bond fund assets can be expended in a manner consistent with the bond’s covenants after compliance with certain requirements.

110
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)

NOTE 15 – SUCCESSOR AGENCY TRUST FUND (Continued)

On September 20, 2013, the Agency received its Finding of Completion from the State Department of Finance (DOF) and is now able to spend the unencumbered bond fu nds in a manner consistent with the original bond covenants. Pursuant to Health and Safety Code (HSC) section 34179.7, the DOF has verified that the former Redevelopment Agency Successor Agency of the City of Sacramento (RASA) does not owe any amounts to the taxing entities as determined under HSC section 34179.6, subdivisions (d) or (e) and HSC section 34183.5.

On August 25, 2015, the State Depar tment of Finance (DOF) approved t he Agency’s Oversight Board action authorizing the Agency to refund certain outstanding tax- allocation obligations of the former Redevelopment Agency in accordance with Assembly Bill Nos. x1 26 and 1484. The RASA 2015 Tax Allocation Refunding Bonds, Series A (Tax-Exempt) and RASA 2015 Tax Allocation Refunding Bonds, Series B (Federally Taxable) were issued under the Indenture of Trust, dated as of October 1, 2015, to refund certain obligations of the former Redevelopment Agency of the City of Sacramento curr ently outstanding in the aggregate principal amount of $119,360, to purchase a Municipal Bond Debt Service Re serve Insurance Policy from Build America Mutual Assurance Company for deposit in the Reserve Account, and to pay certain costs of issuance of the Bonds.

On October 6, 2015, the DOF approved the Agency’s Oversight Board action a pproving the Excess Bond Expenditure Plan, approving the Master Excess Bond Expenditure Agreement between the Agency and the City, authorizing the transfer of the unspent non-housing bond proceeds to the City, approving an Excess Housing Bond Expenditure Agreement between RASA and the Housing Authority, and authorizing the transfer of the housing bond proceeds to the Housing Authority as the Housing Successor.

The City is to finance public and private development projects previously planned by the Agency; and the Housing Authority is to use the funds for low-moderate income housing projects.

On December 31, 2015, DOF completed the review of RASA’s Long-Range Property Management Plan (LRPMP).

DOF approved the use or disposition of all the propert ies listed in the LRPMP. The approved LRPMP will govern the disposition and use of all the real property assets of the former redevelopment agency.

As of June 30, 2022, contracts payable of $12,059 reported in the private-purpose trus t fund are allocations of SHRA’s OPEB and pension unfunded liabilities for the former redevelopment agency employees.

Capital Assets

The following is a summary of changes in capital assets for the fiscal year ended June 30, 2022:

Beginning
Balance Increases Decreases
Ending
Balance
Capital assets not being depreciated
Land 4,969 $ - $ -$ 4,969$ Depreciable capital assets
Buildings and improvements 141 - - 141 Less accumulated depreciation for:

Buildings and improvements (44) (4) - (48) Depreciable capital assets, net 100 (4) - 93 Total capital assets, net 5,069$ (4)$ -$ 5,062$

111
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)

NOTE 15 – SUCCESSOR AGENCY TRUST FUND (Continued)

Long-term Debt

The following is a summary of changes in long-term debt for the fiscal year ended June 30, 2022:

Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Revenue Bonds:
2015 Tax Allocation Refunding Bonds TE, Series A 36,911$ - $ (3,040)$ 33,871$ 2,560$ Subtotal, revenue bonds 36,911 - (3,040) 33,871 2,560 Notes Payable:
2003 Del Paso TE TABS, Series A 6,182 26 (1) (478) 5,730 770 2005 Merged Downtown TE, Series A 137,761 3,883 (1) (7,834) 133,810 16,468 2005 Oak Park TE, Series A 4,047 13 (1) (990) 3,070 497 2006 65th Street TX Master Lease, Series B 3,070 - (120) 2,950 125 2006 North Sacramento TX Master Lease, Series B 3,585 - (140) 3,445 150 2006 Stockton Blvd Master Lease 1,948 - (1) 1,947 153 2008 BOA Public Capital Corporation 1,462 38 (193) 1,307 204 2009 Army Depot TX Swap 2,469 - (96) 2,373 103 2009 River District TX Swap 2,311 - (89) 2,222 97 City of Sacramento CIEDB - Utilities/Detention Basin 1,015 - (46) 969 48 Globe Mills 2,388 - (340) 2,048 361 North Sacramento CIEDB Loan 2,628 - (141) 2,487 146 Stockton Blvd CIEDB Loan 2,189 - (119) 2,070 122 Subtotal, notes payable 171,055 3,960 (10,587) 164,428 19,244 Total, long-term debt 207,966$ 3,960 $ (13,627)$ 198,299$ 21,804$

(1) Change in accreted value is recorded as an adjustment of Notes Payable.

As of June 30, 2022, accumulated accretion for the 2003 Del Paso TE TABS, Series A, is $3,628, and accumulated accretion for the 2005 Merged Downtown and Oak Park TE, Series A, is $77,869.

112
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
(dollar amounts expressed in thousands)
NOTE 15 – SU
CCESSOR AGENCY TRUST FUND (Continued)
Future Debt Service Requirements
Annual debt service requirements to maturity are as follows:

Fis
cal Year
Ending June 30, Principal Interest Principal Interest
2023 2,560$ 1,461$ 19,244$ 1,039$
2024 2,870 1,326 18,394 966
2025 3,205 1,174 18,221 890
2026 1,320 1,061 20,609 810
2027 1,380 1,003 18,386 725
2028-2032 8,730 3,879 87,244 2,610
2033-2037 11,020 920 26,149 880
2038 - - 76 1
Subtotal 31,085 10,824 208,323 7,921
Less: Unaccreted interest - - (43,895) -
Plus: Issuance premiums 2,786 - - -
Total 33,871$ 10,824$ 164,428$ 7,921$ Revenue Bonds Notes Payable
NOTE 16 – SERVICE CONCESSION ARRANGEMENT FOR CITY GOLF COURSES Effective July 1, 2019, the City entered into a new serv ice concession agreement with Morton Golf LLC (Morton) under which Morton operates and maintains City golf courses, collects user fees and remits a monthly payment for rent to the City. Morton pays the City minimum installment payments plus a percentage of gross revenues over the 15-year lease period. The present value of the installment payments was initially estimated to be $9,180. The City reports a loan receivable and deferred inflows of resources of $6,492 in t he government-wide statement of net position as of June 30, 2022.
113

THIS PAGE INTENTIONALLY LEFT BLANK
114
Required
Supplementary
Information

THIS PAGE INTENTIONALLY LEFT BLANK
115
City of Sacramento
Required Supplementary Information
Agent Multiple-Employer Defined Benefit Pension Plan
CalPERS Miscellaneous Plan
Schedule of Changes in Net Pension Liability and Related Ratios Last Ten Years* (in thousands)
2015 2016 2017 2018
Total pension liability
Service cost 23,110$ 22,342$ 23,374$ 27,795$
Interest on the total pension liability 70,942 74,835 79,515 84,334 Changes of assumptions - (20,153) -
75,970
Differences between expected and actual experience - (8,865) (333) (838) Benefit payments, including refunds of employee contributions (30,240) (34,390) (37,980) (42,305) Net change in total pension liability 63,812 33,769 64,576 144,956 Total pension liability -- beginning 949,465 1,013,277 1,047,046 1,111,622 Total pension liability -- ending (a) 1,013,277$ 1,047,046$ 1,111,622$ 1,256,578$ Plan fiduciary net position
Contributions - employer 21,613$ 22,827$ 25,963$ 28,719$ Contributions - employee 11,670 11,302 11,991 12,190 Net investment income 118,326 18,047 4,260 91,481 Benefit payments, including refunds of employee contributions (30,240) (34,390) (37,980) (42,305) Plan to plan resource movement - (3,066) 531 74 Administrative expense - (922) (496) (1,209)
Other miscellaneous expense - - - -
Net change in fiduciary net position 121,369 13,798 4,269 88,950 Plan fiduciary net position -- beginning 678,261 799,630 813,428 817,697 Plan fiduciary net position -- ending (b) 799,630$ 813,428$ 817,697$ 906,647$ Net pension liability -- ending (a) - (b) 213,647$ 233,618$ 293,925$ 349,931$ Plan fiduciary net position as a percentage of the total pension liability 78.92% 77.69% 73.56% 72.15%
Covered payroll ** 156,032$ 157,449$ 166,403$ 176,795$ Net pension liability as a percentage of covered payroll 136.93% 148.38% 176.63% 197.93% Meas urement date June 30, 2014 June 30, 2015 June 30, 2016 June 30, 2017 Notes to the Required Supplementary Information
* Fiscal year 2015 was the first year of implementation, therefore, only eight years are shown. *
* Covered payroll was restated during fiscal year 2016 to reflect the implementation of GASB 82.

Fis cal Year
116
City of Sacramento
Required Supplementary Information
Agent Multiple-Employer Defined Benefit Pension Plan
CalPERS Miscellaneous Plan
Schedule of Changes in Net Pension Liability and Related Ratios Last Ten Years* (in thousands)
2019 2020 2021 2022
Total pension liability
Service cost 28,404$ 29,053$ 30,236$ 31,307$
Interest on the total pension liability 89,060 94,760 99,810 105,037 Changes of assumptions (7,898) - - -
Differences between expected and actual experience 6,909 12,970 2,600 3,743 Benefit payments, including refunds of employee contributions (48,384) (53,695) (59,069) (63,352) Net change in total pension liability 68,091 83,088 73,577 76,735 Total pension liability -- beginning 1,256,578 1,324,669 1,407,757 1,481,334 Total pension liability -- ending (a) 1,324,669$ 1,407,757$ 1,481,334$ 1,558,069$ Plan fiduciary net position
Contributions - employer 29,514$ 34,102$ 39,118$ 43,930$ Contributions - employee 12,634 14,289 15,018 15,899 Net investment income 76,768 64,092 51,632 244,522 Benefit payments, including refunds of employee contributions (48,384) (53,695) (59,069) (63,352) Plan to plan resource mov ement (2) - - -
Administrative expense (1,413) (694) (1,454) (1,076) Other miscellaneous expense (2,683) 2 -
-
Net change in fiduciary net position 66,434 58,096 45,245 239,923 Plan fiduciary net position -- beginning 906,647 973,081 1,031,177 1,076,422 Plan fiduciary net position -- ending (b) 973,081$ 1,031,177$ 1,076,422$ 1,316,345$ Net pension liability -- ending (a) - (b) 351,588$ 376,580$ 404,912$ 241,724$ Plan fiduciary net position as a percentage of the total pension liability 73.46% 73.25% 72.67% 84.49%
Covered payroll ** 181,331$ 185,823$ 195,700$ 203,030$ Net pension liability as a percentage of covered payroll 193.89% 202.66% 206.90% 119.06% Meas urement date June 30, 2018 June 30, 2019 June 30, 2020 June 30, 2021 Fiscal Year
117
City of Sacramento
Required Supplementary Information
Agent Multiple-Employer Defined Benefit Pension Plan
CalPERS Miscellaneous Plan
Schedule of Contributions
Last Ten Years* (in thousands)

2015 2016 2017 2018
Actuarially determined contributions 22,711$ 26,156$ 30,084$ 26,947$ Contributions in relation to the actuarially determined contribution 22,711 26,156 30,084 26,947 Contribution deficiency (excess) -$ - $ - $ - $ Covered payroll ** 157,449$ 166,403$ 176,795$ 181,331$ Contributions as a percentage of covered payroll 14.42% 15.72% 17.02% 14.86% Notes to the Required Supplementary Information
Valuation date: 6/30/2012 6/30/2013 6/30/2014 6/30/2015 Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry age normal cost method
Amortization method Level percentage of payroll
Asset valuation method 15 year smoothed market
Inflation 2.5%
Salary Increase 3.3% to 14.2% depending on Age, Service, and type of employment Investment rate of return 7.00% (net of administrative expenses) Retirement age 50 - 67 years
Mortality
* Fiscal year 2015 was the first year of implementation, therefore, only eight years are shown. ** Covered payroll was restated during fiscal year 2016 to reflect the implementation of GASB 82.

Ten year schedules of annual money-weighted rate of return on pension plan investments for CalPERS can be found in the Schedule of Investment Returns table within the separately issued CalPERS Basic Financial Statements available at: https://www.calpers.ca.gov/page/investments/about-investment-office/investment-financial-reports.

Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board, first used in the June 30, 2009 valuation
Fis cal Year
118
City of Sacramento
Required Supplementary Information
Agent Multiple-Employer Defined Benefit Pension Plan
CalPERS Miscellaneous Plan
Schedule of Contributions
Last Ten Years* (in thousands)

2019 2020 2021 2022
Actuarially determined contributions 33,664$ 39,797$ 43,941$ 47,627$ Contributions in relation to the actuarially determined contribution 33,664 39,797 43,941 47,627 Contribution deficiency (excess) -$ - $ - $ -$ Covered payroll ** 185,823$ 195,700$ 203,030$ 214,528$ Contributions as a percentage of covered payroll 18.12% 20.34% 21.64% 22.20% Notes to the Required Supplementary Information
Valuation date: 6/30/2016 6/30/2017 6/30/2018 6/30/2019 Fis cal Year
119
City of Sacramento
Required Supplementary Information
Agent Multiple-Employer Defined Benefit Pension Plan
CalPERS Safety Plan
Schedule of Changes in Net Pension Liability and Related Ratios Last Ten Years* (in thousands)

2015 2016 2017 2018
Total pension liability
Service cost 29,539$ 29,653$ 31,672$ 37,372$ Interest on the total pension liability 107,189 112,331 118,821 123,132 Changes of assumptions - (28,604) - 107,046 Differences between expected and actual experience - (593) 14,398 (15,086) Benefit payments, including refunds of employee contributions (66,215) (70,545) (74,572) (78,232) Net change in total pension liability 70,513 42,242 90,319 174,232 Total pension liability -- beginning 1,447,520 1,518,033 1,560,275 1,650,594 Total pension liability -- ending (a) 1,518,033$ 1,560,275$ 1,650,594$ 1,824,826$ Plan fiduciary net position
Contributions - employer 27,935$ 30,798$ 36,001$ 40,609$ Contributions - employee 16,094 15,565 18,465 18,980 Net investment income 171,795 25,341 4,971 125,586 Benefit payments, including refunds of employee contributions (66,215) (70,545) (74,572) (78,232) Plan to plan resource movement - 1 - (74) Administrative expense - (1,288) (697) (1,665) Other miscellaneous expense - - - - Net change in fiduciary net position 149,609 (128) (15,832) 105,204 Plan fiduciary net position -- beginning 994,493 1,144,102 1,143,974 1,128,142 Plan fiduciary net position -- ending (b) 1,144,102$ 1,143,974$ 1,128,142$ 1,233,346$ Net pension liability -- ending (a) - (b) 373,931$ 416,301$ 522,452$ 591,480$ Plan fiduciary net position as a percentage of the total pension liability 75.37% 73.32% 68.35% 67.59%
Covered payroll ** 107,176$ 112,067$ 120,120$ 126,438$ Net pension liability as a percentage of covered payroll 348.89% 371.48% 434.94% 467.80% Meas urement date June 30, 2014 June 30, 2015 June 30, 2016 June 30, 2017 Notes to the Required Supplementary Information
* Fiscal year 2015 was the first year of implementation, therefore, only eight years are shown. ** Covered payroll was restated during fiscal year 2016 to reflect the implementation of GASB 82.

Fis cal Year
120
City of Sacramento
Required Supplementary Information
Agent Multiple-Employer Defined Benefit Pension Plan
CalPERS Safety Plan
Schedule of Changes in Net Pension Liability and Related Ratios Last Ten Years* (in thousands)

2019 2020 2021 2022
Total pension liability
Service cost 38,386$ 40,221$ 42,306$ 44,416$ Interest on the total pension liability 127,930 136,323 143,878 151,131 Changes of assumptions (17,242) - - - Differences between expected and actual experience 3,954 35,991 20,246 12,441 Benefit payments, including refunds of employee contributions (82,999) (88,688) (95,642) (100,827) Net change in total pension liability 70,029 123,847 110,788 107,161 Total pension liability -- beginning 1,824,826 1,894,855 2,018,702 2,129,490 Total pension liability -- ending (a) 1,894,855$ 2,018,702$ 2,129,490$ 2,236,651$ Plan fiduciary net position
Contributions - employer 41,588$ 49,875$ 58,584$ 67,242$ Contributions - employee 21,564 22,752 23,832 25,904 Net investment income 104,661 86,282 69,226 327,345 Benefit payments, including refunds of employee contributions (82,999) (88,688) (95,642) (100,827) Plan to plan resource movement (4) - - - Administrative expense (1,922) (937) (1,947) (1,434) Other miscellaneous expense (3,650) 3 - - Net change in fiduciary net position 79,238 69,287 54,053 318,230 Plan fiduciary net position -- beginning 1,233,346 1,312,584 1,381,871 1,435,924 Plan fiduciary net position -- ending (b) 1,312,584$ 1,381,871$ 1,435,924$ 1,754,154$ Net pension liability -- ending (a) - (b) 582,271$ 636,831$ 693,566$ 482,497$ Plan fiduciary net position as a percentage of the total pension liability 69.27% 68.45% 67.43% 78.43%
Covered payroll ** 132,206$ 138,718$ 147,409$ 157,333$ Net pension liability as a percentage of covered payroll 440.43% 459.08% 470.50% 306.67% Meas urement date June 30, 2018 June 30, 2019 June 30, 2020 June 30, 2021 Fis cal Year
121
City of Sacramento
Required Supplementary Information
Agent Multiple-Employer Defined Benefit Pension Plan
CalPERS Safety Plan
Schedule of Contributions
Last Ten Years* (in thousands)
2015 2016 2017 2018
Actuarially determined contributions 36,638$ 40,959$ 47,222$ 49,102$ Contributions in relation to the actuarially determined contribution 36,638 40,959 47,222 49,102 Contribution deficiency (excess) -$ - $ - $ - $
Covered payroll ** 112,067$ 120,120$ 126,438$ 132,206$ Contributions as a percentage of covered payroll 32.69% 34.10% 37.35% 37.14% Notes to the Required Supplementary Information
Valuation date: 6/30/2012 6/30/2013 6/30/2014 6/30/2015 Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry age normal cost method
Amortization method Level percentage of payroll
Asset valuation method 15 year smoothed market
Inflation 2.5%
Salary Increase 3.3% to 14.2% depending on age, service, and type of employment Investment rate of return 7.00% (net of administrative expenses) Retirement age 50 - 67 years
Mortality
* Fiscal year 2015 was the first year of implementation, therefore, only eight years are shown. ** Covered payroll was restated during fiscal year 2016 to reflect the implementation of GASB 82.

Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board, first used in the June 30, 2009 valuation
Fis cal Year
122
City of Sacramento
Required Supplementary Information
Agent Multiple-Employer Defined Benefit Pension Plan
CalPERS Safety Plan
Schedule of Contributions
Last Ten Years* (in thousands)

2019 2020 2021 2022
Actuarially determined contributions 56,327$ 66,147$ 66,915$ 74,528$ Contributions in relation to the actuarially determined contribution 56,327 66,147 66,915 74,528 Contribution deficiency (excess) -$ - $ - $ - $ Covered payroll ** 138,718$ 147,409$ 157,333$ 163,228$ Contributions as a percentage of covered payroll 40.61% 44.87% 42.53% 45.66% Notes to the Required Supplementary Information
Valuation date: 6/30/2016 6/30/2017 6/30/2018 6/30/2019 Fis cal Year
123
City of Sacramento
Required Supplementary Information
Sacramento City Employees’ Retirement System,
a Single-Employer Defined Benefit Pension Plan
Schedule of Changes in Net Pension Liability and Related Ratios Last Ten Years* (in thousands)

2015 2016 2017 2018
Total pension liability
Service cost 131$ 103$ 96$ 92$ Interest on the total pension liability 23,134 23,416 22,759 20,877 Changes of assumptions 23,117 - (16,246) 862 Differences between expected and actual experience (8,783) (1,173) (3,701) (2,457) Benefit payments, including refunds of employee contributions (33,791) (32,683) (32,171) (31,583) Net change in total pension liability 3,808 (10,337) (29,263) (12,209) Total pension liability -- beginning 372,670 376,478 366,141 336,878 Total pension liability -- ending (a) 376,478$ 366,141$ 336,878$ 324,669$ Plan fiduciary net position
Contributions - employer 9,183$ 8,645$ 8,645$ 8,645$ Contributions - employee 82 146 63 55 Net inv estment income (loss) 13,375 7,799 26,803 20,982 Benefits payments, including refunds of employee contributions (33,791) (32,683) (32,171) (31,583) Net change in fiduciary net position (11,151) (16,093) 3,340 (1,901) Plan fiduciary net position -- beginning 312,414 301,263 285,170 288,510 Plan fiduciary net position -- ending (b) 301,263$ 285,170$ 288,510$ 286,609$ Net pension liability (asse t)-- ending (a) - (b) 75,215$ 80,971$ 48,368$ 38,060$ Plan fiduciary net position as a percentage of the total pension liability 80.02% 77.89% 85.64% 88.28%
Covered payroll ** 1,180$ 1,020$ 1,049$ 921$ Net pension liability (asset) as a percentage of covered payrol l 6374.15% 7938.33% 4610.87% 4132.46% Meas urement date June 30, 2015 June 30, 2016 June 30, 2017 June 30, 2018 Notes to the Required Supplementary Information
* Fiscal year 2015 was the first year of implementation, therefore, only eight years are shown. ** Covered payroll was restated during fiscal year 2016 to reflect the implementation of GASB 82.

For the fiscal year ended June 30, 2022, the calculation of the total pension liability was affected by the change in mortality tables used to the CalPERS 2000-2019 experience study tables, and change in assumption of mortality improvement to use Society of Actuaries Scale MP-2021.

Fis cal Year
124
City of Sacramento
Required Supplementary Information
Sacramento City Employees’ Retirement System,
a Single-Employer Defined Benefit Pension Plan
Schedule of Changes in Net Pension Liability and Related Ratios Last Ten Years* (in thousands)

2019 2020 2021 2022
Total pension liability
Serv ice cost 66$ 49$ 18$ 6$ Interest on the total pension liability 20,095 19,363 18,342 16,098 Changes of assumptions (927) (1,593) 2,673 218 Differences between expected and actual experience 304 (3,768) (6,349) 5 Benefit payments, including refunds of employee contributions (31,134) (30,457) (28,992) (28,145) Net change in total pension liability (11,596) (16,406) (14,308) (11,818) Total pension liability -- beginning 324,669 313,073 296,667 282,359 Total pension liability -- ending (a) 313,073$ 296,667$ 282,359$ 270,541$ Plan fiduciary net position
Contributions - employer 7,507$ 4,410$ 3,822$ 3,479$ Contributions - employee 49 25 16 9 Net inv estment income (loss) 18,537 7,591 73,150 (32,305) Benefits payments, including refunds of employee contributions (31,134) (30,457) (28,992) (28,145) Net change in fiduciary net position (5,041) (18,431) 47,996 (56,962) Plan fiduciary net position -- beginning 286,609 281,568 263,137 311,133 Plan fiduciary net position -- ending (b) 281,568$ 263,137$ 311,133$ 254,171$ Net pension liability (asse t)-- ending (a) - (b) 31,505$ 33,530$ (28,774)$ 16,370$ Plan fiduciary net position as a percentage of the total pension liability 89.94% 88.70% 110.19% 93.95%
Covered payroll ** 678$ 362$ 270$ 189$ Net pension liability (asset) as a percentage of covered payrol l 4646.76% 9262.43% -10657.04% 8661.38% Meas urement date June 30, 2019 June 30, 2020 June 30, 2021 June 30, 2022 Fis cal Year
125
City of Sacramento
Required Supplementary Information
Sacramento City Employees’ Retirement System,
a Single-Employer Defined Benefit Pension Plan
Schedule of Contributions
Last Ten Years* (in thousands)

2015 2016 2017 2018
Actuarially determined contributions 9,183$ 8,645$ 8,330$ 8,267$ Contributions in relation to the actuarially determined contribution 9,183 8,645 8,645 8,645 Contribution deficiency (excess) -$ - $ (315)$ (378)$ Covered payroll ** 1,180$ 1,020$ 1,049$ 921 $ Contributions as a percentage of covered payroll 778% 848% 824% 939% Notes to the Required Supplementary Information
Valuation date: 6/30/2013 6/30/2014 6/30/2015 6/30/2016 Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry age normal
Amortization method Level dollar payments over 12 years, open period Asset valuation method 3 year smoothed market value
Inflation 2.75%
Salary increases 2.75% CPI plus 0.5% merit
Investment rate of return 6.50%
Retirement age
Mortality
* Fiscal year 2015 was the first year of implementation, therefore, only eight years are shown. ** Covered payroll was restated during fiscal year 2016 to reflect the implementation of GASB 82.

Ten year schedules of annual money-weighted rate of return on pension plan investments for SCERS can be found in the Schedule of Investment Returns table within the separately issued SCERS Annual Financial Reports available at:
https://www.cityofsacramento.org/Finance/Accounting/Reporting.

Deferred vested members covered under Section 399 are assumed to retire at age 62; those covered under Section 175 are assumed to retire at age 65.

CalPERS 1997-2015 Mortality Tables with Scale MP-2019
Fis cal Year
126
City of Sacramento
Required Supplementary Information
Sacramento City Employees’ Retirement System,
a Single-Employer Defined Benefit Pension Plan
Schedule of Contributions
Last Ten Years* (in thousands)

2019 2020 2021 2022
Actuarially determined contributions 5,268$ 4,410$ 3,822$ 3,479$ Contributions in relation to the actuarially determined contribution 7,507 4,410 3,822 3,479 Contribution deficiency (excess) (2,239)$ - $ - $ - $ Covered payroll ** 678$ 362 $ 270 $ 189 $ Contributions as a percentage of covered payroll 1107% 1218% 1416% 1841% Notes to the Required Supplementary Information
Valuation date: 6/30/2017 6/30/2018 6/30/2019 6/30/2020 Fis cal Year
127
City of Sacramento
Required Supplementary Information
Schedule of Changes in Net OPEB Liability and Related Ratios Last Ten Years* (in thousands)
2018 2019 2020 2021 2022
Total OPEB liability
Service cost 11,872$ 11,052$ 9,931$ 5,809$ 5,919$ Interest on the total OPEB liab ility 15,313 16,612 18,106 19,582 19,968 Changes of benefit terms - - 383 - - Changes of assumptions (24,429) (30,845) (92,281) (4,097) 3,978 Differences between expected and actual experience - - (28,948) - (40,332) B
enefit payments (12,565) (12,903) (14,890) (15,764) (15,625) N
et change in total OPEB liability (9,809) (16,084) (107,699) 5,530 (26,092) Total OPEB liability -- beginning 425,766 415,957 399,873 292,174 297,704 Total OPEB liability -- ending (a) 415,957$ 399,873$ 292,174$ 297,704$ 271,612$ Plan fiduciary net position
Contributions - employer 21,605$ 21,072$ 18,406$ 24,598$ 21,687$ Contributions - employee 297 308 303 310 - Net investment income 2,034 2,156 2,432 1,064 15,311 Benefit payments (12,565) (12,903) (14,890) (15,764) (15,625) Administrative expense (10) (51) (8) (23) (21)
Net change in fiduciary net position 11,361 10,582 6,243 10,185 21,352 Plan fiduciary net position -- beginning 15,084 26,445 37,027 4 3,270 53,455 Plan fiduciary net position -- ending (b) 26,445$ 37,027$ 43,270$ 53,455$ 74,807$ Net OPEB liability -- ending (a) - (b) 389,512$ 362,846$ 248,904$ 244,249$ 196,805$ Plan fiduciary net position as a percentage of the total OPEB liability 6.36% 9.26% 14.81% 17.96% 27.54%
Covered-employee payroll 237,926$ 236,885$ 245,622$ 261,187$ 249,162$ Net OPEB liability as a percentage of covered payroll 163.71% 153.17% 101.34% 93.51% 78.99% Meas urement date June 30, 2017 June 30, 2018 June 30, 2019 June 30, 2020 June 30, 2021 Notes to the Required Supplementary Information
* Fiscal year 2018 was the first year of implementation, therefore, only five years are shown.

Fiscal Year
128
City of Sacramento
Required Supplementary Information
OPEB Schedule of Contributions
Last Ten Years* (in thousands)
2018 2019 2020 2021 2022
Actuarially determined contributions 36,393$ 34,454$ 36,155$ 25,548$ 26,879$ Contributions in relation to the actuarially determined contribution 21,072 18,406 24,598 21,687 24,675 Contribution deficiency (excess) 15,321 16,048 11,557 3,861 2,204 Covered-employee payroll 236,885$ 245,622$ 261,187$ 249,162$ 244,497$ Contributions as a percentage of covered-employee payroll 8.90% 7.49% 9.42% 8.70% 10.09% Notes to the Required Supplementary Information
Valuation date: 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry age normal cost method
Amortization method Level percentage of payroll over a closed rolling 17 year period Asset valuation method Investment gains and losses spread over 5 year rolling period Inflation 2.75%
Salary Increase 2.75%
Inv estment rate of return 6.75%
Healthcare cost trend rate
Mortality
* Fiscal year 2018 was the first year of implementation, therefore, only five years are shown.

Fis cal Year
Non- Medicare - 7.5% for 2020, decreasing to 4% for 2076 and later Medicare - 6.5% for 2020, decreasing to 4% for 2076 and later 129

THIS PAGE INTENTIONALLY LEFT BLANK
130

OTHER GOVERNMENTAL FUNDS

Other governmental funds are nonmajor funds reported in the other governmental funds column of the governmental funds financial statements and include:

OTHER SPECIAL REVENUE FUNDS are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects. These funds are generally required by statute, charter, or ordinance to finance specific governmental functions. The individual funds are listed in the other special revenue funds section of the ACFR.

OTHER DEBT SERVICE FUNDS are used to account for and report financial resources that are restricted, committed, or assigned to expenditure for principal and interest, or that are being accumulated for principal and interest maturing in future years. The individual funds are listed in the other debt service funds section of the ACFR.

OTHER CAPITAL PROJECTS FUNDS are used to account for and report financial resources that are restricted, committed, or assigned to expenditure for governmental capital assets. The individual funds are listed in the other capital projects funds section of the ACFR.

PERMANENT FUNDS are used to account for and report resources that are held by the City which are legally restricted to the extent that only earnings may be used for purposes that support City programs. The individual funds are listed in the permanent funds section of the ACFR.

City of Sacramento
Other Governmental Funds
Combining Balance Sheet
June 30, 2022
(in thousands)
Other Other Other Total
Special Debt Capital O
ther
Revenue Service Projects Permanent Governmental
Funds Funds Funds Funds Funds
ASSETS
Cash and investments held by City 133,252$ 3,302$ 196,316$ 6,616$ 339,486$ C
ash and investments held by fiscal agent - 2 - - 2
R
eceivables, net:

Taxes 6,104 - - - 6,104
A
ccounts 2,570 7 12,488 - 15,065
Loans 19,266 - - - 19,266
I
ntergovernmental 1,627 11,803 13,118 - 26,548
Leases 123 2,970 - - 3,093
I
nterest 121 26 163 15 325
Restr
icted assets:

Cash and investments held by City 175 - 10,936 - 11,111 C
ash and investments held by fiscal agent - 5,085 - - 5,085 T
otal assets 163,238$ 23,195$ 233,021$ 6,631$ 426,085$

LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities:

Accounts payable 7,778 $
-$
4,793$
5$
12,576$
Accrued payroll 48
-
-
-
48 D
ue to other funds -
-
1,657
-
1,657
D
eposits 2,308
428
-
-
2,736
U
nearned revenue 710
-
3,568
-
4,278
A
dvances from other funds 5,971
-
- -
5,971
T
otal liabilities 16,815
428
10,018
5 27,266
D
eferred inflows of resources:

Unavailable revenue 1,339
11,803
17,277
-
30,419
Leases
123
2,930
-
-
3,053
T
otal deferred inflows of resources 1,462
14,733
17,277
-
33,472
Fund bal
ances:

Nonspendable:

Leases -
40 -
-
40 P
ermanent fund principal -
-
-
578
578
Restr
icted:

Capital projects 27,366
-
213,852
-
241,218
D
ebt service 175
4,657
-
-
4,832
Public works programs 21,293
-
-
-
21,293
E
conomic development programs 55,545
-
-
-
55,545
Other program
s 22,180 - 905 6,048 29,133
C
ommitted:

Capital projects 795 - - - 795
D
ebt service - 1,351 - - 1,351
O
PEB 1 - - - 1
Other program
s 20,238 - - - 20,238
A
ssigned:

Debt service - 1,986 - - 1,986
U
nassigned (2,632) - (9,031) - (11,663)
T
otal fund balances 144,961 8,034 205,726 6,626 365,347 T
otal liabilities, deferred inflows of resources
and fund balances 163,238$ 23,195$ 233,021$ 6,631$ 426,085$ 131
City of Sacramento
Other Governmental Funds
Combining Statement of Revenues, Expenditures
and Changes in Fund Balances
For the Fiscal Year Ended June 30, 2022
(in thousands)
Other Other Other Total
Special Debt Capital Other
Revenue Service Projects Permanent Governmental
Funds Funds Funds Funds Funds
Revenues:

Taxes 11,258 $ - $ 3,066 $ - $ 14,324$ Intergovernmental 19,201 446 45,390 - 65,037 Charges for services 18,519 - 260 - 18,779 Fines, forfeits and penalties 207 - - - 207 Interest, rents, and concessions (24) 1,725 (1,782) 124 43 Community service fees 564 - 24,512 - 25,076 Assessment levies 55,983 - 49 - 56,032 Contributions and donations 445 - 5,861 - 6,306 Miscellaneous - - 11,890 - 11,890 Total revenues 106,153 2,171 89,246 124 197,694 Expenditures:

Current:

General government 16,616 - 630 178 17,424 Public works 27,372 - 8,136 - 35,508 Convention and cultural services 8,262 - - - 8,262 Youth, parks, and community enrichment 9,584 - 737 - 10,321 Community development 14,911 - 9,356 - 24,267 Library 8,777 - - - 8,777 Utilitie
s 278 - - - 278 Capital outlay 3,556 - 95,369 - 98,925 Debt service:

Principal 501 10,090 18,992 - 29,583 Interest and fiscal charges 1,002 9,958 20 - 10,980 Total expenditures 90,859 20,048 133,240 178 244,325 Excess (deficiency) of revenues over
(under) expenditures 15,294 (17,877) (43,994) (54) (46,631) Other financing sources (uses):

Transfers in 9,349 17,765 159 - 27,273 Transfers out (14,987) - (1,442) - (16,429) Issuance of long-term debt - - 51,914 - 51,914 Total other financing sources (uses) (5,638) 17,765 50,631 - 62,758 Changes in fund balances 9,656 (112) 6,637 (54) 16,127

Fund balances, beginning of year 135,305 8,146 199,089 6,680 349,220 Fund balances, end of year 144,961$ 8,034$ 205,726$ 6,626$ 365,347$ 132

OTHER SPECIAL REVENUE FUNDS

Other special revenue funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects. These funds are generally required by statute, charter, or ordinance to finance specific government functions. The following other special revenue funds have been classified as nonmajor funds:

TRANSPORTATION AND DEVELOPMENT FUND is used to account for the receipts of taxes and fees which are used to maintain and repair streets, bridges, and bikeways as well as for traffic safety and community development activities.

CULTURE AND LEISURE FUND is used to account for a variety of cultural arts and leisure activities. Programs in the Culture and Leisure Fund include the Sacramento Zoo, Fairytale Town, Art in Public Places, Old Sacramento Market, H Street Theatre, Golf, Marina, the Crocker Master Trust, the Winchester G. and Mary Alice Felt Endowment, Marcy Friedman Art in Public Places, and Arts and Culture.

PARKS AND RECREATION FUND is used to account for a variety of parks programs and recreation activities. Programs in the Parks and Recreation Fund include START, Special Program Donations, Ethel MacLeod Hart Trust, Land Park, and Quimby.

ECONOMIC DEVELOPMENT FUND is used to account for the receipts and disbursements of former redevelopment property tax revenues as well as the Brownfield Revolving Loan Program and the Sheraton Master Owner Participation Agreement (MOPA).

CCOMWP FUND is used to account for the revenue and expenditures associated with the City/County Office of Metropolitan Water Planning (CCOMWP). The CCOMWP was formed to develop the Water Forum Agreement with objectives to provide a reliable water supply for planned development to the year 2030 and to preserve the region’s Lower American River.

SPECIAL DISTRICTS FUND is used to account for a variety of programs that provide infrastructure maintenance and other services for specific areas of the City where special assessments or special taxes are levied.

The Special Districts Fund includes the Business Improvement Districts Program, the Landscaping and Lighting Districts Program, the Maintenance Benefit Area Program, and the Assessment District Maintenance Program.

CAL EPA FUND is used to account for the expenditures associated with the maintenance of the Joe Serna, Jr. California EPA Headquarters Building.

THIS PAGE INTENTIONALLY LEFT BLANK
133
City of Sacramento
Other Special Revenue Funds
Combining Balance Sheet
June 30, 2022
(in thousands)
Transportation Culture and Parks and Economic
and Development Leisure Recreation Development
Fund Fund Fund Fund
ASSETS
Cash and investments held by City 61,842$ 6,736$ 8,498$ 30,331$ Receivables, net:

Taxes - - - 6,104
Accounts 577 70 10 4
Loans - - - 19,266
Intergovernmental - - 231 -
Leases - 123 - -
Interest 117 - 4 -
Restricted assets:

Cash and investments held by City - 175 - -
Total assets 62,536$ 7,104$ 8,743$ 55,705$

LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities:

Accounts payable 993$ 102$ 199$ 159$
Accrued payroll - 8 21 1
Deposits 2,140 168 - -
Unearned revenue 690 20 - -
Advances from other funds - 5,971 - -
Total liabilities 3,823 6,269 220 160
Deferred inflows of resources:

Unavailable revenue 125 9 229 -
Leases - 123 - -
Total deferred inflows of resources 125 132 229 -
Fund balances:

Restricted:

Capital projects 19,013 - 4,219 -
Debt service - 175 - -
Public works programs 21,293 - - -
Economic development programs - - - 55,545
Other programs - 1,471 4,102 -
Committed:

Capital projects 169 626 - -
OPEB - 1 - -
Other programs 18,113 758 277 -
Unassigned - (2,328) (304) -
Total fund balances 58,588 703 8,294 55,545
Total liabilities, deferred inflows of resources
and fund balances 62,536$ 7,104$ 8,743$ 55,705$

Page 1 of 2 ends

Budget and Audit CommitteeApril 4, 2023

Budget and Audit Committee
April 4, 2023