Sacramento City Council
February 25, 2025

City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2025-00404 2/25/2025 Consent Item 13.

Fiscal Year 2023/24 Annual Comprehensive Financial Report (ACFR) File ID: 2025-00404
Location: Citywide
Recommendation: Adopt a Resolution: 1) accepting the Fiscal Year (FY) 2023/24 Annual Comprehensive Financial Report (ACFR); and 2) accepting the auditor’s letter to the City Council.

Contact: Osvaldo Lopez, Finance Manager, (916) 808-4740, [email protected]; Peter Coletto, Finance Director, (916) 808-5416, [email protected]; Department of Finance Presenter: Osvaldo Lopez, Finance Manager, (916) 808-4740, Department of Finance Attachments:
1-Description/Analysis
2-Resolution
3-FY2023/24 ACFR
4-FY2023/24 Auditor’s Letter on ACFR
5-FY2023/24 Auditor’s Report on Internal Control Over Financial Reporting Description/Analysis
Issue Detail: The City’s FY2023/24 ACFR presents the City’s financial condition and the results of activities for the fiscal year that ended June 30, 2024. The independent public accounting firm Macias, Gini & O’Connell LLP has audited the ACFR financial statements, as required by 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. The ACFR is organized as follows:
· An Introductory Section with a transmittal letter summarizing economic conditions, budget initiatives and other information.
· A Financial Section which begins with Management’s Discussion and Analysis (MD&A), a

File ID: 2025-00404 2/25/2025 Consent Item 13.
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.
· A Statistical Section with selected financial, demographic, and operating trend information.

In FY2023/24 the City implemented two new accounting and financial reporting standards issued by the Governmental Accounting Standards Board (GASB) in the ACFR:
· Statement No. 99, Omnibus 2022
· Statement No. 100, Accounting Changes and Error Corrections - an amendment of GASB Statement No. 62.

General/Measure U Fund Combined FY2023/24 Financial Results The combined FY2023/24 net budgetary results for the General/Measure U Fund resulted in $26.8 million in available fund balance:

Category Performance vs Budget ($s
in 000s)
Major Tax Revenues $6.5
City Operations $7.6
TOTAL $14.1
Investments Fair Market Gain $12.7
GRAND TOTAL $26.8
Tax revenues above budget were primarily driven by Property Tax, with Measure U Sales Tax, and Transient Occupancy Tax also positive. This helped offset below budget results from the 1% Bradley- Burns Sales Tax, Utility Users Tax, and Real Property Transfer Tax.

Interest, rents, and concessions revenues were positive versus budget as interest rates remained elevated versus prior year leading to higher interest income on the Treasury pool.

City operations were positive versus budget primarily due to vacancies across City departments and strong departmental revenues in the Public Works Department.

The following chart includes a historical look at major tax revenue trends.

Major Tax Revenues (millions)
Tax FY2021/22
Actual
FY2022/23
Actual
FY2023/24
Actual
FY2023/24 Amended
Budget
Property Tax $200.8 $216.2 $229.7 $224.3
Sales and Use Tax $115.3 $115.3 $112.4 $112.8
Measure U Sales Tax $133.3 $130.5 $134.3 $133.1
Utility Users Tax $65.5 $69.5 $64.1 $65.1
Business Operations
Tax (BOT)
$33.3 $31.6 $33.4 $32.1
Real Property
Transfer Tax
$19.4 $11.8 $10.4 $10.8
Transient Occupancy
Tax
$5.4 $6.2 $6.9 $6.6

File ID: 2025-00404 2/25/2025 Consent Item 13.

Tax FY2021/22
Actual
FY2022/23
Actual
FY2023/24
Actual
FY2023/24 Amended
Budget
Property Tax $200.8 $216.2 $229.7 $224.3
Sales and Use Tax $115.3 $115.3 $112.4 $112.8
Measure U Sales Tax $133.3 $130.5 $134.3 $133.1
Utility Users Tax $65.5 $69.5 $64.1 $65.1
Business Operations
Tax (BOT)
$33.3 $31.6 $33.4 $32.1
Real Property
Transfer Tax
$19.4 $11.8 $10.4 $10.8
Transient Occupancy
Tax
$5.4 $6.2 $6.9 $6.6
The fair market gain on investments is a reversal of fair market losses the City incurred in previous fiscal years. When the Federal Reserve increased interest rates, the market value of the City’s investment portfolio decreased, creating unrealized losses. These unrealized losses need to be accounted for during year end per Governmental Accounting Standards Board requirements, which decreased year end results in previous fiscal years. As the City effectively managed its cash flow and did not have to sell these assets and recognize the losses, and the securities have matured and the City invested those funds in higher yield securities, the City can now repay itself for the unrealized losses recorded against prior year-end results.

General Fund FY2023/24 Financial Results
The following schedule summarizes the FY2023/24 net budgetary results for the General Fund:

FY2023/24 General Fund Summary $ in 000s
Major Tax Revenues
Property 5,381$
Sales (353)
Utility user (958)
Real property transfer (322)
Other taxes (BOT/TOT) 1,511
Subtotal Major Tax Revenue 5,259
Department operations 8,862
Other Citywide revenue/expenditure results 2 (12,864)
FY 23 fund reserve carryover to FY24 18,433
Unrealized investments fair market gain 10,221
Purchase order encumbrances (3,060)
Unassigned Fund Balance 1 26,851$
1 FY2023/24 Unassigned Fund Balance as represented in this chart reflects the General Fund activities/results for the current fiscal year plus unassigned fund balance from prior fiscal year of $18.4 million that was not used due to budget savings with vacancies. The total unassigned fund balance for General Fund as of 6/30/2024, including new and previous resources, was approximately $26.8 million. General Fund for FY2023/24 was combined with fund 1003 ARPA reinvestment Fund, this fund also carried an unassigned amount of $3.5 million (see page 24 of the ACFR for additional information). 2 The main cause of the variance in Citywide revenues/expenditure results I that salary savings are budgeted centrally, but the actual savings are reflected in the departmental results.

File ID: 2025-00404 2/25/2025 Consent Item 13.

Revenues
Total General Fund revenue exceeded the FY2023/24 Approved Budget as amended by $37.4 million. Tax revenue was $5.3 million higher than the budget projections, a variance of 1%. Property taxes ended higher than projected by $5.4 million, the result of increases in market value and activity.

Other Taxes, including Sales and Use Tx, Property Transfer, Utility User, Business Operations, and Transient Occupancy Taxes ended lower than projected by $.1 million. Intergovernmental revenue was $19.2 million higher than the budget projection mainly due to more federal reimbursement for fire emergency medical services. Charges for services were $5.8 million lower than the budget projection due to lower-than-expected Fire emergency transportation fee revenue. Please refer to page 32 of the ACFR for the budget to actual comparison.

Expenditures
Most operating departments ended FY2023/24 within their budgeted operating expenditure authority.

The City Manager, Parks and Recreation, and Code Enforcement departments were the only exceptions. Details on departments’ year-end results are provided in the chart below.

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

Information Technology - Positive results are primarily due to labor savings from vacant positions.

File ID: 2025-00404 2/25/2025 Consent Item 13.

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

Public Works - Positive results are primarily due higher than expected revenue associated with parking and maintenance services and labor savings from vacant positions.

Measure U Fund FY2023/24 Financial Results
The following schedule summarizes the FY2023/24 net budgetary results which resulted in $.04 million in fund balance:

FY2023/24 Measure U Fund Summary $ in 000s
Measure U sales taxes 1,212$
Department operations 3,128
Other Citywide revenue/expenditure results (1,368)
Fund reserves used during FY24 (6,075)
Unrealized investments fair market gain 2,459
Purchase order closed encumbrances 601
Unassigned Fund Balance 1 (43)$
2 FY2022/23 Unassigned Fund Balance as represented in this chart reflects the Measure U Fund activities/results for the current fiscal year.

Revenues
Total Measure U Fund revenues were higher than the FY2023/24 Approved Budget as amended by $3.3 million. The positive revenue variance was due to higher than anticipated retail transactions and higher than anticipated interest revenue due to better-than-expected interest rates.

Expenditures
Most operating departments ended FY2023/24 within their budgeted operating expenditure authority.

The Human Resources department was the only exception. 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 ($ in 000s)
Mayor/Council 293$
City Manager 1,486
City Attorney -
Community Development 388
Community Response 47
Convention and Cultural Services 33
Fire 97
Human Resources (9)
Information Technology -
Youth, Parks, and Community Enrichment489
Police 224
Public Works 80
Total Results 3,128$

File ID: 2025-00404 2/25/2025 Consent Item 13.

Department
Results
($ in 000s)
Mayor/Council 293$
City Manager 1,486
City Attorney -
Community Development 388
Community Response 47
Convention and Cultural Services 33
Fire 97
Human Resources (9)
Information Technology -
Youth, Parks, and Community Enrichment489
Police 224
Public Works 80
Total Results 3,128$
Departments that had significant variances between budget and year-end results have provided the following explanations:

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

Youth, Parks, and Community Enrichment - Positive results are primarily due to labor savings from vacant positions.

At the end of FY2023/24, the General/Measure U Economic Uncertainty Reserve totaled $76.4 million.

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.

Environmental Considerations: Not applicable.

File ID: 2025-00404 2/25/2025 Consent Item 13.

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 FY2023/24 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 Macias Gini & O’Connell LLP has audited the City’s FY2023/24 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, 2024, resulted in one-time resources in the amount of approximately $26.8 million.

This amount includes $12.7 million related to recovery of unrealized fair market loss on investments.

The City is currently projecting a substantial structural deficit in future fiscal years. The $26.8 million is a one-time resource and will be utilized to partially offset the projected FY2025/26 budget deficit.

Local Business Enterprise (LBE): No goods or services are being purchased under this report.

RESOLUTION NO.

Adopted by the Sacramento City Council
FISCAL YEAR 2023/24 ANNUAL COMPREHENSIVE FINANCIAL REPORT

BACKGROUND
A. The City’s Fiscal Year (FY) 2023/24 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, 2024. 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 2023/24 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, 2024, provided $26.8 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 FY2023/24 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 20, 2024, 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.gov
Annual Comprehensive
Financial Report
FISCAL YEAR ENDED JUNE 30, 2024 | CITY OF SACRAMENTO, CALIFORNIA CITY OF SACRAMENTO, CALIFORNIA | 2024 ANNUAL COMPREHENSIVE FINANCIAL REPORT

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 to 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 520,407, from the State of California, Department of Finance as of January 2024.

DARRELL STEINBERG
Mayor

LISA KAPLAN
Councilmember, District 1

SHOUN THAO
Councilmember, District 2

KARINA TALAMANTES
Mayor Pro Tempore, District 3

KATIE VALENZUELA
Councilmember, District 4

CAITY MAPLE
Councilmember, District 5

ERIC GUERRA
Councilmember, District 6

RICK JENNINGS, II
Councilmember, District 7

MAI VANG
Councilmember, District 8

City of Sacramento

California

Annual Comprehensive
Financial Report

Fiscal Year Ended June 30, 2024

Prepared by the Department of Finance,
Accounting Division

Peter Coletto, Finance Director
Osvaldo Lopez, Finance Manager

Supervising Financial Analysts

Emily Hsia Jennifer Gilbertson Ra y Tang

Senior Accountant Auditors

Sharina Bali Thomas Keegan Rona Mao
Doreen Chia
Svetlana Donkova
Bilal Malik
Susan Nazari
Juliana Wong

CITY OF SACRAMENTO, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT

For the Fiscal Year Ended June 30, 2024

TABLE OF CONTENTS

INTRODUCTORY SECTION (Unaudited) PAGE

Letter of Transmittal .............................................................................................................................................. i Organization Chart ............................................................................................................................................... v Directory of City Officials ..................................................................................................................................... vi GFOA Certificate ................................................................................................................................................. vii

FINANCIAL SECTION

Independent Auditor’s Report .............................................................................................................................. 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 – Governmental Funds ............................................................................................................................... 27 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 ............................................... 31 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 ........... 118 Schedule of Contributions – CalPERS Miscellaneous Plan ........................................................................... 120 Schedule of Changes in Net Pension Liability and Related Ratios – CalPERS Safety Plan ........................ 122 Schedule of Contributions – CalPERS Safety Plan ........................................................................................ 124 Schedule of Changes in Net Pension Liability (Asset) and Related Ratios – Sacramento City Employees’ Retirement System ..................................................................................... 126 Schedule of Contributions – Sacramento City Employees’ Retirement System............................................ 128 Schedule of Changes in Net OPEB Liability and Related Ratios ................................................................... 130 Schedule of Contributions – OPEB ................................................................................................................. 132

CITY OF SACRAMENTO, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT

For the Fiscal Year Ended June 30, 2024

TABLE OF CONTENTS, Continued

COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES PAGE

Other Governmental Funds

Combining Balance Sheet .............................................................................................................................. 135 Combining Statement of Revenues, Expenditures and Changes in Fund Balances………….……………..136

Other Special Revenue Funds:

Combining Balance Sheet .................................................................................................... 138 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ......... 140 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual, Transportation and Development Special Revenue Fund ..... 142 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual, Culture and Leisure Special Revenue Fund .......................... 143 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual, Parks and Recreation Special Revenue Fund ....................... 144 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual, CCOMWP Special Revenue Fund ......................................... 145 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual, Special Districts Special Revenue Fund ................................ 146

Other Debt Service Funds:

Combining Balance Sheet .................................................................................................... 148 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ......... 150 Other Capital Projects Funds:

Combining Balance Sheet .................................................................................................... 154 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ......... 156 Permanent Funds:

Combining Balance Sheet .................................................................................................... 159 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ......... 160

Other Proprietary Funds

Other Enterprise Funds:

Combining Statement of Net Position .................................................................................. 162 Combining Statement of Revenues, Expenses and Changes in Net Position ................... 165 Combining Statement of Cash Flows ................................................................................... 166

Water Fund:

Combining Schedule of Net Position .................................................................................... 170 Combining Schedule of Revenues, Expenses and Changes in Net Position .................... 174 Combining Schedule of Cash Flows .................................................................................... 176 Wastewater Fund:

Combining Schedule of Net Position .................................................................................... 182 Combining Schedule of Revenues, Expenses and Changes in Net Position .................... 186 Combining Schedule of Cash Flows .................................................................................... 188

CITY OF SACRAMENTO, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT

For the Fiscal Year Ended June 30, 2024

TABLE OF CONTENTS, Continued

Other Proprietary Funds PAGE
Community Center Fund:

Combining Schedule of Net Position .................................................................................... 194 Combining Schedule of Revenues, Expenses and Changes in Net Position .................... 196 Combining Schedule of Cash Flows .................................................................................... 198

Internal Service Funds:

Combining Statement of Net Position .................................................................................. 204 Combining Statement of Revenues, Expenses and Changes in Net Position ................... 207 Combining Statement of Cash Flows ................................................................................... 208

Other Custodial Funds:

Combining Statement of Fiduciary Net Position .................................................................. 211 Combining Statement of Changes in Fiduciary Net Position .............................................. 212 STATISTICAL SECTION (Unaudited)

Net Position by Component – Last Ten Fiscal Years ..................................................................................... 214 Changes in Net Position – Last Ten Fiscal Years........................................................................................... 216 Fund Balances, Governmental Funds – Last Ten Fiscal Years ..................................................................... 222 Changes in Fund Balances, Governmental Funds – Last Ten Fiscal Years ................................................. 224 Tax Revenues by Source, Governmental Funds – Last Ten Fiscal Years .................................................... 226 Assessed Value and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years ........................ 227 Direct and Overlapping Property Tax Rates – Last Ten Fiscal Years ........................................................... 228 Principal Property Taxpayers – Current Fiscal Year and Nine Years Ago .................................................... 229 Property Tax Levies and Collections – Last Ten Fiscal Years ....................................................................... 230 Ratios of Outstanding Debt by Type – Last Ten Fiscal Years ........................................................................ 232 Ratios of Net General Bonded Debt Outstanding – Last Ten Fiscal Years ................................................... 234 Direct and Overlapping Governmental Activities Debt – As of June 30, 2024 .............................................. 235 Legal Debt Margin – Last Ten Fiscal Years .................................................................................................... 236 Pledged-Revenue Coverage – Last Ten Fiscal Years ................................................................................... 238 Demographic and Economic Statistics for Sacramento County – Last Ten Years ....................................... 240 Principal Employers – Current Fiscal Year and Nine Years Ago ................................................................... 241 Successor Agency Trust Fund – Assessed Value of Taxable Property – Last Ten Fiscal Years ................ 242 Successor Agency Trust Fund – Top 10 Parcels Appealing Assessed Valuation – At Risk of Reduction – As of June 30, 2024............................................................................................... 246 Successor Agency Trust Fund – Principal Property Taxpayers – Current Fiscal Year and Nine Years Ago .................................................................................................. 257 Successor Agency Trust Fund – Debt Coverage Analysis – Last Ten Fiscal Years .................................... 268 Full-time Equivalent Employees by Function/Program – Last Ten Fiscal Years ........................................... 273 Operating Indicators by Function/Program – Last Ten Fiscal Years ............................................................ 274 Capital Asset Statistics by Function/Program – Last Ten Fiscal Years ........................................................ 275 Miscellaneous Statistics - Current Fiscal Year and Nine Years Ago.............................................................. 276 Introductory
Section

Howard Chan
City M
anager
City Hall
915 I Street, Fifth Floor
Sacramento, CA 95814-2604
916-808-5704
December 20, 2024
Honorable Mayor and City Council
Residents of the City of Sacramento
City of Sacramento, California:

Dear Mayor, Members of the City Council, and Residents of the City of Sacramento:

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, 2024. Article IX of the City Charter, federal law, and state law require 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, 2024. 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 follows the independent auditor’s report and provides a narrative introduction, 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 Sacramento, 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 Finance estimated the population on January 1, 2024, at 520,407 for the City and 1,578,938 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 three 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 boards are composed of all City
Council members.
 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.

BUDGET INFORMATION
The City Charter requires that the City Manager submit a proposed budget to the City Council at least 60 days prior to the start of each fiscal year. Once approved by City 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 department budgets during the year for transactions up to $250,000 without City 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
The regional economy continues to expand, and the City is closely monitoring key economic indicators which inform revenue and expense projections. The local labor market remains robust, but unemployment has increased with the June 2024 unemployment rate for the Sacramento metropolitan area increasing to 4.7% compared to 4.4% a year earlier. The Federal Reserve reduced interest rates in September and November 2024. The City is closely monitoring the impact of Federal Reserve policy impacts on the housing market and consumer spending. Major revenue sources, including property tax and sales tax, continue to grow, however fluctuations in the real estate market, levels of new constructi on activity, inflation rate and shifts in consumer behavior can affect that growth. Balancing the City’s increased costs of doing business, which is outpacing revenue growth, is a key priority in the coming FY.

B

UDGET INITIATIVES AND LONG-TERM FINANCIAL PLANNING
The FY2024/25 Operating, and Capital Improvement Program (CIP) Budgets (Approved Budget) were approved on June 11, 2024. The Approved Budget is a balanced $1.6 billion spending plan for City programs and services and supports a workforce of over 5,000 employees. It closed a $66 million funding gap without the elimination of any filled positions and reflects the input provided by Council, City department heads, and the public. It maintains funding for key priorities such as reducing homelessness through continued funding for the operation of 1,350 shelter beds and the City’s Affordable Housing Fee Credit Program.

The CIP Budget totals $114.9 million and provides funding to projects across the City, including $14.5 million in the Ge
neral Fund and Measure U Fund. The CIP also provides estimates for strategic investments in capital assets over the next five fiscal years. As part of the Budget, the City provides a five-year Operating Budget forecast as a long-term financial planning tool.

The financial forecasts presented in the FY2024/25 Budget are based on in-depth analysis and review of Department revenues an
d expenses to ensure that the forecast is based on the most current information available.

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 and 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 Fund (G/MU) reserve level of 10%. Further, the policy includes a goal of achieving and maintaining the value of two months of regular ongoing G/MU expenditures in the reserve. The current EUR balance is $76 million, which is approximately 10% of FY2023/24 G/MU revenues. The EUR is reported in the ACFR as committed fund balance in the General Fund and the Measure U Fund.

The FY2024/25 Approved Budget suspends approximately $3.3 million of the FY2023/24 EUR contribution.
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, 2023. This marks the 36th 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,
Howard Chan Peter Coletto Osvaldo Lopez
City Manager Finance Director Finance Manager iv

Mayor/Council
City Treasurer
John Colville
City Attorney
Susana Alcala Wood
City Clerk
Mindy Cuppy
City Auditor
Interim, Farishta Ahrary
Public Safety Accountability
LaTesha Watson
City Manager
Howard Chan
Police
Kathy Lester
Youth, Parks & Community
Enrichment (YPCE)
Jackie Beecham
Fire
Chris Costamagna
Finance
Pete Coletto
Information Technology
Darin Arcolino
City Manager
Reporting Department
Assistant City Manager
Mario Lara
Public Safety
Assistant City Manager
Leyne Milstein
Internal Services
Assistant City Manager
Ryan Moore
Municipal Services
Assistant City Manager
Michael Jasso
Community
Community Advocacy & Public Safety
General Council & Advisory
Litigation & Human Resources
Strategic Project & Research
Public Works
Matt Eierman
Utilities
Pravani Vandeyar
Community Development
Tom Pace
Convention & Cultural Services
Megan Van Voorhis
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 & Equity
Employment, Classification & Development
Equal Employment Opportunity
Labor Relations/Policies
Risk Management (Safety & Workers’
Comp
ensation)
Accounting
Budget, Policy and Strategic Planning
Payroll
Procurement Services
Public Improvement Financing
Revenue
Field Services
Investigations
Operational Services
Violence Prevention
Emergency Medical Services
Fire Prevention
Fire Suppression
Community Enrichment
Golf Operations (Contracted)
Park Maintenance/Historic Cemetery
Park Rangers
Planning & Development
Youth Division
Climate Action & Sustainablity
Engineering Services
Facilities/Real Property Management
Fleet Management
Maintenance Services
Parking Services
Sacramento Marina
Solid Waste
Transportation
Office of Director (Admin Srv cs)
Business Services
Engineering & Water Resources
Water Operations & Maintenance
Wastewater & Drainage Operations
and Maintenance
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, 2024
Center for Sacramento History
Office of Arts and Culture
SAFE Credit Union Convention &
Performing Arts District
Old Sacramento Historic District
Crocker Art Museum
Fairytale Town
CLARA Studios for the Performing Arts
Sacramento History Museum
SMUD Museum of Science & Curiosity
Sacramento Zoo
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
Brian Pedro
Alternative 911 Response
Unsheltered Response and Support
Report Org Chart Updates:

[email protected]
v

City of Sacramento
Directory of City Officials
June 30, 2024

Darrell Steinberg
Mayor

Lisa Kaplan
Councilmember, District 1
Caity Maple
Councilmember, District 5

Shoun Thao
Councilmember, District 2
Eric Guerra
Councilmember, District 6

Karina Talamantes
Mayor Pro Tempore, 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, 2023
Executive Director/CEO
vii

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viii
Financial
Section
ww
w.mgocpa.com Macias Gini & O’Connell LLP
500 Capitol Mall, Suite 2200
Sacramento, CA 95814
Independent Auditor’s Report
To the
Honorable Mayor and Members of the
City Council of the City of Sacramento, California
Rep
ort on the Audit of the Financial Statements
Opin
ions
We have
audited the financial statements of the governmental activities, the business- type activities, each major fund, and the aggregate remaining fund information of the City of Sacramento, California (City), as of and for the fiscal year ended June 30, 202 4, 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 fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the C ity, as of June 30, 202 4, and the respective changes in financial position , and, where applicable, cash f lows 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.

Basi
s for Opinions
We con
ducted 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.

Res
ponsibilities 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.

In p
reparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’ s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. 1 Auditor’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 absolu te 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, individ ually 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 reasonablene ss 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 (asset) 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 financial reporting for placing the basic financial statements in an appro priate 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 2 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.

Su
pplementary 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 pr ocedures 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.

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

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

Ot
her Reporting Required by Government Auditing Standards In accor
dance with Government Auditing Standards , we have also issued our report dated December 20, 2024, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regula tions, 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 C ity’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Sa
cramento, California
December 20, 2024
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4 4
City of Sacramento
Management’s Discussion and Analysis
(Required Supplementary Information - Unaudited)
For the Fiscal Year Ended June 30, 2024

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, 2024. 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 total government-wide net position incr eased by $135 million in fiscal year 2024, a 5 perce nt incr
ease.
 The City’s General Fund revenues were $34 million higher than final budgeted amounts primarily due to prop
erty and business operations taxes, Voluntar y Rate Range Program and Ground Emergency Medi cal Tran
sportation Program revenues received by the City’s Fire Department, and gain in fair value of investments.  The City’s General Fund budgetary expenditures, which include open encumbrances, were $122 million lower than final bud
geted amounts. Most of the General Fund departments reported favorable operating expenditure budget variances and capital outlay expenditures were less than budgeted amounts by $32 million due to the multi-year nature of capital projects. Unspent mult i-year project budgets are carried over to the subsequent fiscal year.
 On a GAAP basis, the City’s General Fund revenue and other financing sources (uses) exceeded expenditures by $2 millio
n in fiscal year 2024 primarily due to increases in labor and pension costs.  The City issued the Water Revenue Refunding Bonds, Series 2023, in the amount of $21 million to refund $28 million of o
utstanding Water Revenue Refunding Bonds, Series 2020. The 2023 Refunding reduced total debt service payments by $4 million and resulted in an economic gain of $3 million.  The City received $112 million of American Rescue Plan Act (ARPA) funding in fiscal years 2021 and 2022. In September 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, 2024, $3 million of ARPA reinvest ment available funding remains after factorin g in budg
etary encumbrances and carryovers.

OVERVIEW OF THE FINANCIAL STATEMENTS
The City’s Annual Comprehensive Financial Report co n sists 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 basic 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, 2024

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, community 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,
community 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, 2024

FINANCIAL 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
2024 2023 2024 2023 2024 2023 Change
Current and other assets 1,442 $ 1,397 $ 647$ 590 $ 2,089 $ 1,987 $ 5.1% Capital assets 1,921 1,868 1,826 1,837 3,747 3,705 1.1% Total assets 3,363 3,265 2,473 2,427 5,836 5,692 2.5%
Deferred outflows of resources 386 399 52 57 438 456 -3.9% Long-term liabilities 2,101 2,066 1,078 1,114 3,179 3,180 0.0% Other liabilities 121 104 43 43 164 147 11.6%
Total liabilities 2,222 2,170 1,121 1,157 3,343 3,327 0.5% Deferred inflows of resources 78 105 24 22 102 127 -19.7% Net position
Net investment in
capital assets 1,409 1,347 972 952 2,381 2,299 3.6%
Restricted 483 456 99 81 582 537 8.4%
Unrestricted (443) (414) 309 272 (134) (142) 5.6%
Total net position 1,449$ 1,389 $ 1,380$ 1,305 $ 2,829 $ 2,694 $ 5.0% Activities Activities Government
City of Sacramento
Summary of Net Position
As of June 30, 2024 and 2023
(in millions)
Governmental Business-type Total Primary

Analysis of net position

As noted in the financial highlights, total net position of the primary government increased by $135 million in fiscal year 2024. Total assets and total liabilities increased by $144 million and $16 million, respectively. Deferred outflows of resources and deferred inflows of resources decreased by $18 million and $25 million, respectively.

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

Governmental activities

Current and other assets increased $45 million primarily due to increases in cash and receivables. Cash increased by $29 million in the governmental funds from higher-than-expected tax, intergovernmental, and grant contribution revenues. Receivables increased $16 million primarily due to a $17 million increase in intergovernmental reimbursement receivables for operating and capital grants.

Capital assets of governmental activities increased $53 million due to continuing development and improvements offset by current year depreciation. Capital asset addi tions include the Broadway Complete Streets project, Del Rio Trail project, Railyards Rehabilitation project, HSIP Florin Road Signals project, I Street Bridge Replacement project, Downtown Mobility project, and the Northwood Sc hool Access Implementation project. 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, 2024

Deferred outflows of resources decreased $13 million primarily due to a $19 million decrease in deferred outflows related to pensions, offset by a $6 million increase in deferred outflows related to OPEB. The decrease in deferred outflows related to pensions was mainly driven by the effects of prior changes in assumptions recognized as pension expense in the current fiscal year. More detailed information about pension and OPEB plans is presented in Notes 8 and 9 to the financial statements.

Long-term liabilities increased $35 million primarily due to a $35 million increase in net pension liability. Net pension liability increased due to unfavorable differences betwe en expected and actual experience. More detailed information about long-term liabilities is presented in Note 7 to the financial statements.

Other liabilities increased $17 million primarily due to accounts payable for various capital projects.

Deferred inflows of resources decreased $27 million primarily due to a $28 million decrease in deferred inflows related to OPEB. The decrease in deferred inflows related to OPEB was mainly driven by a decrease in deferred inflows for differences between expected and actual experience and changes in assumptions. More detailed information about the OPEB plan is presented in Note 9 to the financial statements.

Restricted net position, representing amounts that must be used in accordance with external restrictions, increased $27 million primarily due to increases in restrictions for capital projects and economic development programs.

Business-type activities

Current and other assets of business-type activities increased $57 million primarily due to an increase in cash and receivables provided by operational activities.

Capital assets decreased $11 million due to current year depreciation offset by continuing development and improvements. Capital asset additions include the Fruitridge Drain Replacement project, Community Center Theater Renovation project, Convention Center Expansion project, Freeport Reservoir Pump Replacement project, and the Silver Eagle Sewer Rehabilitation project. More detai led capital asset information is presented in Note 4 to the financial statements.

Deferred outflows of resources decreased $5 million due to a $4 million decrease in deferred outflows related to pensions. The decrease in deferred outflows related to pensions was mainly driven by the effects of prior changes in assumptions recognized as pension expense in the current fiscal year. More detailed information about pension plans is presented in Note 8 to the financial statements.

Long-term liabilities decreased $36 million primarily due to $61 million of total payments and refunding of existing debt obligations, offset by the issuance of $22 million of new debt. More detailed information is presented in Note 7 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, 2024

Total
Percent
2024 2023 2024 2023 2024 2023 Change
Revenues
Program revenues:

Charges for services 223 $ 209 $ 374 $ 366$ 597$ 575$ 3.8% Operating grants and contributions 90 80 5 1 95 81 17.3% Capital grants and contributions 155 135 25 18 180 153 17.6% General revenues:

Property taxes 244 228 - - 244 228 7.0% Utility users tax 64 70 - - 64 70 -8.6% Local sales taxes 134 130 - - 134 130 3.1% Other taxes 53 52 34 31 87 83 4.8% Unrestricted:

Sales taxes shared state revenue 113 115 - - 113 115 -1.7% Investment earnings 44 12 28 4 72 16 350.0% Miscellaneous 13 13 - - 13 13 0.0% Total revenues 1,133 1,044 466 420 1,599 1,464 9.2% Expenses
General government 173 209 - - 173 209 -17.2% Police 284 258 - - 284 258 10.1% Fire 230 201 - - 230 201 14.4% Public works 158 137 - - 158 137 15.3% Convention and cultural services 31 29 - - 31 29 6.9% Youth, parks, community enrichment 100 81 - - 100 81 23.5% Community development 76 67 - - 76 67 13.4% Community response 21 20 - - 21 20 5.0% Library 25 24 - - 25 24 4.2% Interest on long-term debt 17 26 - - 17 26 -34.6% Water - - 124 117 124 117 6.0% Wastewater - - 42 35 42 35 20.0% Storm drainage - - 52 48 52 48 8.3% Solid waste - - 72 78 72 78 -7.7% Community center - - 39 33 39 33 18.2% Parking - - 14 13 14 13 7.7% Child development - - 6 6 6 6 0.0% Total
expenses 1,115 1,052 349 330 1,464 1,382 5.9% Revenue over (under) expenses 18 (8) 117 90 135 82 64.6% Transfers 42 40 (42) (40) - - - Change in net position 60 32 75 50 135 82 64.6% Net position, beginning of year 1,389 1,357 1,305 1,255 2,694 2,612 3.1% Net position, end of year 1,449$ 1,389$ 1,380$ 1,305$ 2,829$ 2,694$ 5.0% Activities Activities Government
City of Sacramento
Changes in Net Position
For the Fiscal Years Ended June 30, 2024 and 2023
(in millions)
Governmental Business-type Total Primary

9 City of Sacramento
Management’s Discussion and Analysis (Continued)
(Required Supplementary Information - Unaudited)
For the Fiscal Year Ended June 30, 2024

Analysis of the changes in net position

Total government-wide revenu es of the primary government increased $135 million, a 9.2 percent increase compared to the prior fiscal year, and total expenses incr eased $82 million, a 5.9 percent increase compared to the prior fiscal year. These changes are discussed in more detail below.

Governmental activities

Total revenues for governmental activities increased $89 million, an 8.5 percent increase compared to the prior fiscal year. Total expenses increased $63 million, a 6.0 pe rcent increase compared to the prior fiscal year.

Transfers in primarily consist of in-lieu taxes paid by t he business-type activities to the General Fund. Transfers out primarily consist of parking program support transfer red out from the General Fund and program support to cover lost impact fees for various funds transferred out from the General Fund and Measure U Fund.

Revenue

Charges for services revenue increased $14 million primarily due to a $9 million increase in Voluntary Rate Range Program and Public Provider Ground Emergency Medical Transportation Program revenues received by the City’s Fire Department.

Operating grants and contributions rev enue increased $10 million primarily due to $5 million of funding the City received to establish the American Federation of State, County, and Municipal Employees Local 3299 Greg McNair UC Workers Housing Fund to implement housing stability prog rams. No such funding was received in fiscal year 2023.

Capital grants and contributions increased by $20 million during fiscal year 2024 compared to fiscal year 2023.

This was mainly due to capital grant funding received in relation to Township 9 Infras tructure, Del Rio Trail, Two Rivers Trail, Matsui Hanami Line, and Railyards Rehabilitation construction projects.

Property tax revenue increased $16 million due to cont inued increases in Sacramento area commercial and residential real estate property assessed valuations.

The increase of $32 million in investment earnings is mainly attributable to a gain in fair value of Pool A investment holdings. The cost of Pool A invest ment holdings exceeded the fair value by $47 million as of June 30, 2024, compared to $77 million as of June 30, 2023. This $30 million gain was allocated among governmental and business-type activities, with a small portion allocated to non-City Pool A participants as well. In fiscal year 2023, Pool A investment holdings recognized an overall loss of $8 million.

Expenses

Total governmental activities expenses increased $63 million primarily due to increases in department functional expenses. Police and Fire expenses increased a combined $55 million mainly due to increased labor costs and pension expense associated with a change of actuarial as sumptions, differences between expected and actual experience, and projected earnings coming in lower than expected on the net pension liability valuation date. Public works expenses increased $21 million due to increased costs for pavement and concrete maintenance, replacement of traffic signs and signals, and unforeseen co sts related to the 2024 wint er storms. Youth, parks, community enrichment expenses increased $19 million due to various planned park improvements, increased facility and staffing costs to align with growth in community participation, and unforeseen costs related to the 2024 winter storms. These increases were offset by a $36 million decrease in general government expenses primarily due to a decrease in developer fee credits.

10 City of Sacramento
Management’s Discussion and Analysis (Continued)
(Required Supplementary Information - Unaudited)
For the Fiscal Year Ended June 30, 2024

Business-type activities

Total revenues for business-type activities increased $46 million, an 11.0 percent increase compared to the prior fiscal year. Total expenses for business-type activities increased $19 million, a 5.8 percent increase. Transfers out primarily consist of in-lieu taxes paid by the business-type activities to the General Fund. Transfers in primarily consist of water, wastewater, and parking program support received from the General Fund and Measure U Fund.

Revenue

Charges for services revenue increased $8 million primarily due to a $6 million increase in solid waste service revenue. Solid waste service accounts increased with the addition of new development and homes in the current fiscal year and there was a rate increase effective January 2024.

Capital grants and contributions increased by $7 million primarily due to an increase in water capital contributions.

Investment earnings increased by $24 million mainly due to a gain in fair value of Pool A investment holdings in the current fiscal year, compared to a loss in the prior fiscal year.

Expenses

Water expenses increased $7 million primarily due to a $4 million increase in labor expense in relation to approved labor agreements and vacancies filled in the current fiscal year. There was also a $3 million increase in services and supplies expense associated with noncapitalized Ac celerated Water Meter project compliance costs and Fairbairn Water Treatment Plant lab repair costs.

Wastewater expenses increased $7 million primarily due to a $5 million increase in services and supplies expense in relation to sinkhole and sewer repair costs.

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 near-term inflows, outflows, and balances of spendable resources. Total revenues for governmental funds increased $ 70 million compared to the prior fiscal year. Total expenditures increased $101 million compared to the prior fiscal year. Net other financing sources increased $14 million compared to the prior fiscal year. These changes are discussed in more detail below.

General Fund

Total General Fund revenue increased $29 million compared to the prior fiscal year. Intergovernmental revenues increased $13 million, primarily due to an increase in Voluntary Rate Range Program and Public Provider Ground Emergency Medical Transportation Program revenues received by the City’s Fire Department. Interest, rents, and concessions increased $14 million, primarily due to a gain in fair value related to the General Fund’s share of Pool A holdings. In fiscal year 2024, the General Fund recognized a $10 million gain in fair value in relation to Pool A holdings, compared to a $3 million loss in fair value in fiscal year 2023.

Total General Fund expenditures increased $51 million com pared to the prior fiscal year. Expenditures in Police and Fire departments increased $25 million in total mainly due an increase in labor and pension costs. Citywide and community support expenditures increased $10 million pr imarily due to an increase in pension and liability insurance premium costs. Capital outlay expenditures also increased $18 million. Capital outlay fluctuates from year to year due to timing and the multi-year nature of capital projects. The General Fund’s largest capital outlay expenditures during the fiscal year consisted of expenditu res for the 827 K Street Building, fire apparatus and ambulances, police safety equipment, Sacramento Valley Station repairs, and the issuance of long-term liabilities for new lease and IT subscription agreements.

11 City of Sacramento
Management’s Discussion and Analysis (Continued)
(Required Supplementary Information - Unaudited)
For the Fiscal Year Ended June 30, 2024

General Fund Budgetary Highlights

The City Council revised the budget throughout the fisc al year with revenue and appropriation adjustments and the use of committed fund balance after the original budget was adopted.

After accounting for these budget adjustments, General Fund revenues were $34 million higher than final budgeted amounts. Collection of various taxes exceeded the budget by $5 million primarily due to increases in property taxes. Intergovernmental revenue exceeded budget by $19 million primarily due to Voluntary Rate Range Program and Public Provider Ground Emergency Medical Transporta tion Program revenues received by the City’s Fire Department. Interest, rents, and concessions revenue exceeded budget by $15 million primarily due to a gain in fair value related to the General Fund’s share of Pool A holdings. Charges for services were less than budgeted by $6 million primarily due to emergency medical service revenues.

General Fund budgetary expenditures were $122 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 $32 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 increased $7 million compared to the prior fiscal year. Tax revenue increased $4 million as retail and e-commerce sales increased and came in higher than expected. Interest revenue increased $3 million primarily due to a fair value gain related to the Measure U Fund’s share of Pool A holdings.

Total Measure U Fund expenditures increased $12 million compared to the prior fiscal year. General government expenditures decreased $10 million, while youth, park s, and community enrichment expenditures increased $11 million as the Office of Youth Development was reclassi fied from the Office of the City Manager and general government expenditures to the Department of Youth, Parks, and Community Enrichment in the current fiscal year.

The Office of Youth Development saw an increase in budgeted spending for the Sacramento Youth Works program and grant funding to support youth mental wellness, workforce development, academic support, and violence intervention. Convention and cultural services expenditures increased by $2 million primarily due to the provision of funding for art grants and the Powerhouse Science Center , as well as an increase in labor and pension costs.

Community development expenditures increased by $2 million mainly due an increase in labor and pension costs.

Community response expenditures increased by $2 million due to an increase in budgeted spending for the City’s Outreach and Engagement Center and other homeless outreach programs. Capital outlay expenditures increased $2 million due to timing and the multi-year nature of capital projects.

2015 Golden 1 Center Lease Revenue Bond Fund

2015 Golden 1 Center Lease Revenue Bond Fund revenue increased $1 million due to a gain in fair value associated with fiscal agent investment holdings.

Other Governmental Funds

Other governmental fund revenues increased by $32 million primarily due to revenue increases of $23 million for special revenue funds and $9 million for capital projects f unds. The increase in special revenue funds revenue is primarily due to the following:

 $5 million increase in contributions and donations due to funds received to establish the American Federation of State, County, and Municipal Employees Local 3299 Greg McNair UC Workers Housing Fund to implement housing stability programs.
 $12 million increase in intergovernmental revenues from Homeless Housing, Assistance, and Prevention and Go-Biz Equity grant programs.

12 City of Sacramento
Management’s Discussion and Analysis (Continued)
(Required Supplementary Information - Unaudited)
For the Fiscal Year Ended June 30, 2024

The increase in capital projects funds revenue is primarily due to the following:

 $34 million increase in the Capital Grants Fund mainly due to Del Rio Trail, Downtown Mobility, and Railyard Rehabilitation projects.
 $20 million decrease in the Special Districts Fund mainly due to the difference in special tax bonds issued. $23 million of assessment levies revenue was recogniz ed in fiscal year 2023 with the issuance of the Railyards CFD No. 2018-01 Improvements Area IA1 Special Tax Bonds, Series 2022.  $3 million decrease in the Financing Plans Fund mainly due to a one-time $5 million payment from the California Department of General Services for their fair share contribution to the River District Finance Plan for the Richards Boulevard Office Complex in fiscal year 2023. This was offset partially by an increase in development permits issued in fiscal year 2024.

Other governmental fund expenditures increased by $38 million primarily due to an increase of $26 million in expenditures for capital projects funds and $12 million for sp ecial revenue funds. The increase in capital projects funds expenditures is primarily due to the following:

 $5 million increase in the Financing Plans Fund due to Downtown Ra ilyards development, low-income housing, and the Downtown mobility project expenditures.  $25 million increase in the Capital Grants Fund due to Township 9 Infrastructure, Del Rio Trail, Two Rivers Trail, Matsui Hanami Line, and Railyards Rehabilitation construction projects.  $6 million decrease in the Special Districts Fund due to a decrease in expenditures associated with the Railyards, Greenbriar and Delta Shores Special Districts.

The increase in special revenue funds expenditures is primarily due to the following:

 $4 million of expenditures for the issuance of long-term liabilities for new lease and IT software subscription agreements in the Transportation and Development Fund and Operating Grants Fund in fiscal year 2024.  $4 million increase in the Special Districts Fund mainly due to increased budget and expenditures for the Citywide Landscape and Lighting District and Sacramento Tourism Marketing District.

$6 million of financing plan fee credits were issued in fisca l year 2024, in comparison to $12 million in fiscal year 2023. $2 million of Delta Shores financing plan fee credits and $4 million of North Natomas financing plan fee credits were issued in the current year. More detailed fee credit information is presented in Note 7 to the financial statements.

Enterprise 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 operati ng revenues increased $9 million and operating expenses increased $20 million compared to the prior fiscal year. Net nonoperating revenues (expenses) increased $31 million and capital contributions increased $7 million compared to the prior fiscal year. These changes are discussed in more detail below.

Water Fund

Water Fund operating expenses increased $8 million primarily due to a $4 million increase in labor expense in relation to approved labor agreements and vacancies filled in the current fiscal year. Net nonoperating revenue increased $16 million primarily due to a gain in fair value related to the Water Fund’s share of Pool A investment holdings. Developer fees and capital contributions increa sed $5 million in association with the Florin Reservoir Back Up Engine, Meadowview Road, and Greenbriar Phase 1 projects.

Wastewater Fund

Wastewater Fund operating expenses in creased $7 million mainly due to a $5 million increase in services and supplies expense in relation to sinkhole and sewer repair costs. Net nonoperating revenue increased $3 million primarily due to a gain in fair value related to the Wa stewater Fund’s share of P ool A investment holdings.

Developer fees and capital contributions decreased $3 million in association with the completion of the Emergency Combined Wastewater Treatment Plant Sewer Repair project.

13 City of Sacramento
Management’s Discussion and Analysis (Continued)
(Required Supplementary Information - Unaudited)
For the Fiscal Year Ended June 30, 2024

Storm Drainage Fund

Storm Drainage Fund operating expenses increased $4 milli on due to a $3 million increase in labor expense in relation to approved labor agreements and vacancies filled in the current fiscal year. Net nonoperating revenue increased $4 million primarily due to a gain in fair value related to the Storm Drainage Fund’s share of Pool A investment holdings. Developer fees and capital contri butions increased $5 million in association with the Sacramento Railyards Bercut Drive, Delta Shores Medium Density Residential 5, and Greenbriar Phase 1 projects.

Solid Waste Fund

Solid Waste Fund operating revenues increased $6 million primarily due to an increase in service accounts with the addition of new development and homes, as well as rate adjustments effective January 2024. Operating expenses decreased $6 million primarily due to a decrea se in vehicle replacements. Net nonoperating revenue increased $3 million primarily due to a gain in fair value related to the Solid Waste Fund’s share of Pool A investment holdings and grant funding for implementation of Senate Bill 1383 requirements.

Community Center Fund

Community Center Fund operating expenses increased $6 million due to increased events in the current fiscal year. Net nonoperating revenue increased by $4 million primarily due to an increase in TOT revenue, as hotel stays, and travel increased.

Other Enterprise Funds

Other Enterprise Funds consist of the activities of the City’s Parking and 4 th R Child Development Funds. Total operating revenues increased by $3 million. 4 th R saw an increase of $1 million of revenue due to an increase in enrollment in fiscal year 2024. 4th R is a full cost recovery program and fees have not increased since 2015. Parking saw an increase of $2 million of revenue due to an increa se in events in Downtown Sacramento, as well as increased enforcement and metered hours.

14 City of Sacramento
Management’s Discussion and Analysis (Continued)
(Required Supplementary Information - Unaudited)
For the Fiscal Year Ended June 30, 2024

CAPITAL ASSET AND DEBT ADMINISTRATION

Capital Assets

As of June 30, 2024, the City had invested $3.7 billion in a broad 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 $188 million were offset by current year depreciation/amortization expense of $146 million, resulting in a net increase in capital assets of $42 million.

2024 2023 2024 2023 2024 2023
Capital assets not being depreciated
Land 230 $ 220 $ 50 $ 49 $ 280 $ 269 $ Easements 3 2 - - 3 2 Construction in progress 297 278 459 453 756 731 Depreciable capital assets:

Buildings and improvements 409 403 252 259 661 662 Equipment 11 11 96 101 107 112 Software 1 1 7 8 8 9 Vehicles 93 96 - - 93 96 Transmission and distribution system 4 3 958 963 962 966 Roadway network 521 519 - - 521 519 Streetlight network 181 173 - - 181 173 Parks and park improvements 155 149 - - 155 149 Lease and IT subscription assets, net 16 13 4 4 20 17 Total capital assets 1,921$ 1,868 $ 1,826 $ 1,837$ 3,747$ 3,705 $ Activities Activities
Total Primary
City of Sacramento
Ca pita l Asse ts
As of June 30, 2024 and 2023
(net of depreciation, in millions)
Governmental Business-Type
Go
vernment

This year's major capital asset additions include:

 $10 million for the Broadway Complete Streets Project,  $9 million for the Del Rio Trial Project,
 $6 million for the Railyards Rehabilitation Project,
 $6 million for the Northwood School Access Implementation Project,  $6 million for the Downtown Mobility Project,
 $5 million for the HSIP 8 Florin Road Signals Project,  Other capital project additions in progress include the Matsui Hanami Line Project, the I Street Bridge Replacement Project, and the Two Rivers Trail Phase II Project. Many other capital projects were completed during the year and transferred from construction in progress to the appropriate capital asset categories.

15 City of Sacramento
Management’s Discussion and Analysis (Continued)
(Required Supplementary Information - Unaudited)
For the Fiscal Year Ended June 30, 2024

The City has $92 million in commitments for contracts awarded but not completed as of June 30, 2024. The major contracts outstanding are $4 million for Freeport Res ervoir pump replacement and electrical improvements; $2 million for replacing three outfall pipes from Sump 151 through the America River levee to the outfall structure; $2 million for the construction of a Class I bike trail along the Sacramento Southern Railroad between Sutterville Road and Meadowview Road; $2 million for installation of motor- controlled valves and drainag e system as part of the Ground Water Flush-to-Waste project; and $45 million for the purchase of vehicles, primarily for the replacement of refuse trucks and garbage trucks.

More detailed information about the City's capital assets and lease and IT subscription assets is presented in Notes 4 and 6 to the financial statements.

Long-term Debt
The following table summarizes the City’s outstanding debt (excluding other long-term liabilities):
2024 2023 2024 2023 2024 2023
Revenue and other bonds, net 426 $ 443$ 732 $ 765 $ 1,158$ 1,208 $ Notes payable 16 16 131 137 147 153 Total outstanding debt 442 $ 459$ 863 $ 902 $ 1,305$ 1,361 $ City of Sacramento
Outstanding Debt
As of June 30, 2024 and 2023
(in millions)
Activities Activities Government
Governmental Business-Type Total Primary
Total outstanding debt for governm
ental activities decr eased $17 million due to principal payments on existing obligations and amortization of bond premiums.

Total outstanding debt for business-type activities decrea sed $39 million primarily due to principal payments on existing obligations and amortization of bond premiums. Also, $28 million of Water Revenue Refunding Bonds, Series 2020 were refunded with the issuance of Wate r Revenue Refunding Bonds, Series 2023 at par of $21 million.

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, 2024, as
determined by S&P Global Ratings (S & P), Moody’s Ratings (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  Water Revenue Bonds, Series 2013 AA nr AA-
 2015 Refunding Revenue Bonds
AA-/AA Aa3 nr
 2015 Lease Revenue Bonds - Golden 1 Center
AA- nr AA-
 Water Revenue Bonds, Series 2017 AA nr AA-
 2018 TOT Revenue Bonds, Senior Series A&B
nr A1 nr
 2018 TOT Revenue Bonds, Subordinate Series C
nr A2 nr
16 City of Sacramento
Management’s Discussion and Analysis (Continued)
(Required Supplementary Information - Unaudited)
For the Fiscal Year Ended June 30, 2024

Bond issues: S & P Moody’s Fitch

 Wastewater Revenue Bonds, Series 2019 AA nr AA  2019 STID Assessment Revenue Bonds nr A2 nr  Water Revenue Refunding Bonds, Series 2020 AA nr AA-  Wastewater Revenue Refunding Bonds, Series 2020 AA nr AA  Water Revenue Refunding Bonds, Series 2023 AA nr AA-

The City’s issuer credit rating as of June 30, 2024 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. The 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 population growth, diverse economy, and above-average education retainment levels; and the City taking proactive steps to address out-year budget gaps and maintain its reserve levels.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET

Economic Factors

As the City heads into the new fiscal year, increasing service needs, higher costs and slower revenue growth will continue to create challenges. Housing demand remains higher than supply in the region, but home sales have slowed considerably over the past year as prices and interest rates have reduced demand. Homelessness and affordable housing supply are two of the biggest issues the City faces.

Next Year’s Budget

General Fund budget appropriations for fiscal year 2025 are $689.5 million, an increase of 9.8 percent compared to the fiscal year 2024 approved budget. The City is facing a structural deficit because of many decisions that the City and voters have made over the past few years. To better serve its residents, especially during the pandemic, the City expanded beyond its traditional core service areas and launched new programs, often with one-time federal funding. New labor contracts and higher prices for supplies, services and insurance have increased operating costs.

The fiscal year 2025 approved budget addresses the City’s structural deficit for one year with a combination of one-time and ongoing strategies and does not include the e limination of any filled positions. Due to the budget deficit, the contribution to the Economic Uncertainty Reserve was partially suspended for fiscal year 2024 and fully suspended for fiscal year 2025.

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, 2024
(in thousands)
Governmental Business-type
Activities Activities Total
ASSETS
Cash and investments 984,515$ 476,176$ 1,460,691$ Receivables, net 408,120 86,863 494,983 Internal balances 4,743 (4,743) -
Inventories - 2,289 2,289
Prepaid items 10,417 509 10,926
Restricted cash and investments 34,862 85,449 120,311 Intangible assets - 96 96
Land and other capital assets not being depreciated/amortized 529,514 509,170 1,038,684 Other capital assets, net of depreciation/amortization 1,390,887 1,317,138 2,708,025 Total assets 3,363,058 2,472,947 5,836,005

DEFERRED OUTFLOWS OF RESOURCES
Loss on refunding of debt 1,978 8,055 10,033 Pensions 347,360 39,083 386,443
OPEB 36,355 4,869 41,224
Total deferred outflows of resources 385,693 52,007 437,700

LIABILITIES
Payables 107,698 38,134 145,832
Unearned revenue 13,656 4,597 18,253 Long-term liabilities:

Due within one year 74,218 35,401 109,619 Due in more than one year 2,025,942 1,043,217 3,069,159 Total liabilities 2,221,514 1,121,349 3,342,863

DEFERRED INFLOWS OF RESOURCES
Service concession arrangement 5,128 - 5,128
Gain on refunding of debt - 3,310 3,310
Pensions 6,299 3,142 9,441
OPEB 38,900 7,946 46,846
Leases 27,531 9,105 36,636
Total deferred inflows of resources 77,858 23,503 101,361

NET POSITION
Net investment in capital assets 1,408,509 972,422 2,380,931 Restricted for:

Capital projects 269,677 60,852 330,529 Debt service 1,083 - 1,083
Public works programs 39,465 - 39,465
Economic development programs 79,416 - 79,416 Other programs 81,521 38,114 119,635 Trust and endowments:

Expendable 11,168 - 11,168
Nonexpendable 595 - 595
Unrestricted (442,055) 308,714 (133,341) Total net position 1,449,379$ 1,380,102$ 2,829,481$ 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, 2024
(in thousands)
Functions/Programs
Primary government:

Governmental activities:

General government 194,637 $ (21,391) $ 28,932 $ 47,826 $ 20 $ (96,468) $ Police 284,283 - 13,362 8,009 550 (262,362)
Fire 229,749 - 60,800 2,225 - (166,724)
Public works 158,275 - 59,859 17,054 122,232 40,870 Convention and cultural services 31,401 - 13,256 1,243 755 (16,147) Youth, parks, and community enrichment 100,146 - 16,125 3,134 12,583 (68,304) Community development 75,796 - 30,485 558 18,526 (26,227) Community response 20,467 - - 583 - (19,884)
Library 24,744 - - 9,537 - (15,207)
Interest on long-term debt 16,903 - - - - (16,903) Total governmental activities 1,136,401 (21,391) 222,819 90,169 154,666 (647,356) Business-type activities:

Water 116,497 7,558 132,957 2,668 13,088 24,658
Wastewater 39,955 2,500 45,871 - 3,600 7,016
Storm drainage 48,569 3,174 62,606 134 8,480 19,477 Solid waste 67,152 4,884 93,291 1,679 - 22,934
Community center 36,446 2,002 14,640 - - (23,808) Parking 12,875 1,273 18,725 - - 4,577
Child development 6,317 - 6,396 281 - 360
Total business-type activities 327,811 21,391 374,486 4,762 25,168 55,214 Total primary government 1,464,212$ - $ 597,305 $ 94,931$ 179,834$ (592,142)$ Expenses
Operating Grants and
Contributions
Net (Expense)
Revenue
Indirect
Allocation
Expenses
Program Revenues
Operating
Grants and
Contributions
Capital
Charges for
Services
The notes to the basic financial statements are an integral part of this statement.

20 City of Sacramento
Statement of Activities
For the Fiscal Year Ended June 30, 2024
(in thousands)
Changes in net position:

Net (expense) revenue (647,356) $ 55,214 $ (592,142)$ General revenues:

Taxes:

Property taxes 244,107 - 244,107
Utility user taxes 64,133 - 64,133
Local sales tax 134,293 - 134,293
Property transfer tax 10,446 - 10,446
Business operations tax 33,367 - 33,367
Transient occupancy tax 6,876 34,254 41,130
Other taxes 2,245 - 2,245
Unrestricted sales taxes shared state revenue 112,422 - 112,422 Unrestricted investment earnings 44,372 27,610 71,982 Unrestricted miscellaneous 13,095 - 13,095
Gain on reduction in lease and IT subscription liabilities 117 23 140 Transfers 41,976 (41,976) -
Total general revenues and transfers 707,449 19,911 727,360 Changes in net position 60,093 75,125 135,218
Net position, beginning of year 1,389,286 1,304,977 2,694,263 Net position, end of year 1,449,379$ 1,380,102$ 2,829,481$ Primary Government
Total
Governmental
Activities
Business-type
Activities
The notes to the basic financial statements are an integral part of this statement.

21 THIS PAGE INTENTIONALLY LEFT BLANK
22 Fund Financial
Statements

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23 City of Sacramento
Governmental Funds
Balance Sheet
June 30, 2024
(in thousands)

2015 Golden 1 Center
Measure U Lease Revenue
Fund Bond Fund
ASSETS
Cash and investments held by City 306,382$ 67,902$ 6,815$ Cash and investments held by fiscal agent 191 - 956 Receivables, net:

Taxes 33,123 23,037 - Accounts 27,592 120 2,088 Loans 1,236 - 133,345 Intergovernmental 5,239 - - Leases 25,837 - - Interest 1,629 312 31 Prepaid items 449 3 - Restricted assets:

Cash and investments held by City - - - Cash and investments held by fiscal agent - - 18,289 Total assets 401,678$ 91,374$ 161,524$

LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities:

Accounts payable 17,383 $ 8,016 $ - $ Accrued payroll 24,833 2,316 - Due to other funds - - - Deposits 356 - - Unearned revenue 2,365 - - Advances from other funds 1,237 - - Total liabilities 46,174 10,332 - Deferred inflows of resources:

Unavailable revenue 5,178 - 133,345 Leases 23,878 - - Total deferred inflows of resources 29,056 - 133,345 Fund balances:

Nonspendable:

Prepaid items 449 3 - Leases 1,959 - - Permanent fund principal - - - Restricted:

Capital projects - - - Debt service - - 18,289 Public works programs - - - Economic development programs - - - Other programs - - - Committed:

Economic uncertainty 74,613 1,773 - Capital projects 53,795 22,375 - Debt service - - 8,903 Fire programs 25,088 - - OPEB 6,095 486 - Set-asi
de for FY25 Budget 10,443 2,158 - Other programs 123,702 54,247 - Assigned:

Debt service - - 987 Unassigned 30,304 - - Total fund balances 326,448 81,042 28,179 Total liabilities, deferred inflows of resources
and fund balances 401,678$ 91,374$ 161,524$ Fund
General
The notes to the basic financial statements are an integral part of this statement.

24 City of Sacramento
Governmental Funds
Balance Sheet
June 30, 2024
(in thousands)
Other Total
Governmental Governmental
Funds Funds
ASSETS
Cash and investments held by City 460,311$ 841,410$ Cash and investments held by fiscal agent 61 1,208 Receivables, net:

Taxes 7,957 64,117 Accounts 22,851 52,651 Loans 26,486 161,067 Intergovernmental 81,275 86,514 Leases 3,805 29,642 Interest 1,843 3,815 Prepaid items 13 465 Restricted assets:

Cash and investments held by City 10,461 10,461 Cash and investments held by fiscal agent 6,112 24,401 Total assets 621,175$ 1,275,751$

LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities:

Accounts payable 40,542 $ 65,941 $ Accrued payroll 82 27,231 Due to other funds 8,191 8,191 Deposits 3,232 3,588 Unearned revenue 11,087 13,452 Advances from other funds 19,849 21,086 Total liabilities 82,983 139,489 Deferred inflows of resources:

Unavailable revenue 69,116 207,639 Leases 3,653 27,531 Total deferred inflows of resources 72,769 235,170 Fund balances:

Nonspendable:

Prepaid items 13 465 Leases 152 2,111 Permanent fund principal 578 578 Restricted:

Capital projects 292,340 292,340 Debt service 5,028 23,317 Public works programs 19,326 19,326 Economic development programs 79,416 79,416 Other programs 90,682 90,682 Committed:

Economic uncertainty - 76,386 Capital projects 1,460 77,630 Debt service 941 9,844 Fire programs - 25,088 OPEB 9 6,590 Set-aside for FY25 Budget - 12,601 Other programs 22,461 200,410 Assigned:

Debt service 2,078 3,065 Unassigned (49,061) (18,757) Total fund balances 465,423 901,092 Total liabilities, deferred inflows of resources
and fund balances 621,175$ 1,275,751 $ The notes to the basic financial statements are an integral part of this statement.

25 THIS PAGE INTENTIONALLY LEFT BLANK
26 City of Sacramento
Governmental Funds
Reconciliation of the Balance Sheet to the Statement of Net Position June 30, 2024
(in thousands)
Fund balances - total governmental funds 901,092$
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. 207,639 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. 154
Capital assets used in governmental activities are not current financial resources and therefore, are not reported in the funds:

Governmental capital assets 3,719,535
Less: accumulated depreciation/amortization (1,893,429) 1,826,106
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 (4,924)
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 342,637
Deferred outflows related to OPEB 35,742
Deferred inflows related to pensions (6,264)
Deferred inflows related to OPEB (37,835)
Loss on refunding of debt 1,978
336,258
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 (51,488)
Accrued claims and judgments (5,641)
Financing plan fee credits (78,867)
Net pension liability (1,168,250)
Net OPEB liability (170,138)
Pollution remediation obligations (1,020)
Revenue and other bonds payable, net (426,510)
Notes payable (15,954)
Lease liabilities (1,086)
IT subscription liabilities (12,827)
(1,931,781)
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. 114,835 Net position of governmental activities 1,449,379$
The notes to the basic financial statements are an integral part of this statement. 27 City of Sacramento
Governmental Funds
Statement of Revenues, Expenditures and Changes in Fund Balances For the Fiscal Year Ended June 30, 2024
(in thousands)
2015 Golden 1 Center
General Measure U Lease Revenue
Fund Fund Bond Fund
Revenues:

Taxes 456,957$ 134,293$ -$
Intergovernmental 37,078 - -
Charges for services 110,915 - -
Fines, forfeits, and penalties 9,874 - -
Interest, rents, and concessions 20,282 4,127 3,405
Community service fees - - -
Assessment levies 565 - -
Contributions and donations 1 - -
Miscellaneous 139 - -
Total revenues 635,811 138,420 3,405
Expenditures:

Current:

General government 67,011 8,836 -
Police 231,397 8,756 -
Fire 194,563 9,553 -
Public works 21,622 1,502 -
Convention and cultural services 2,517 5,537 -
Youth, parks, and community enrichment 8,420 50,751 -
Community development 32,912 12,473 -
Community response 4,792 12,406 -
Library - 14,272 -
Utilities 54 5,610 -
Citywide and community support 63,139 5,695 -
Capital outlay 43,970 8,265 -
Debt service:

Principal 3,713 306 4,165
Interest and fiscal charges 167 18 7,811
Total expenditures 674,277 143,980 11,976
Excess (deficiency) of revenues over
(under) expenditures (38,466) (5,560) (8,571)
Other financing sources (uses):

Transfers in 63,068 596 9,700
Transfers out (26,211) (343) -
Issuance of long-term debt 3,578 (4) -
Total other financing sources (uses) 40,435 249 9,700
Changes in fund balances 1,969 (5,311) 1,129
Fund balances, beginning of year 324,479 86,353 27,050
Fund balances, end of year 326,448$ 81,042$ 28,179$
The notes to the basic financial statements are an integral part of this statement.

28 City of Sacramento
Governmental Funds
Statement of Revenues, Expenditures and Changes in Fund Balances For the Fiscal Year Ended June 30, 2024
(in thousands)
Other Total
Governmental Governmental
Funds Funds
Revenues:

Taxes 16,554$ 607,804$
Intergovernmental 169,409 206,487
Charges for services 19,970 130,885
Fines, forfeits, and penalties 282 10,156
Interest, rents, and concessions 16,038 43,852
Community service fees 23,463 23,463
Assessment levies 65,336 65,901
Contributions and donations 7,065 7,066
Miscellaneous - 139
Total revenues 318,117 1,095,753
Expenditures:

Current:

General government 54,786 130,633
Police 6,090 246,243
Fire 2,711 206,827
Public works 40,155 63,279
Convention and cultural services 15,220 23,274
Youth, parks, and community enrichment 13,233 72,404
Community development 21,781 67,166
Community response 2,676 19,874
Library 9,537 23,809
Utilities 334 5,998
Citywide and community support - 68,834
Capital outlay 119,701 171,936
Debt service:

Principal 20,466 28,650
Interest and fiscal charges 9,903 17,899
Total expenditures 316,593 1,146,826
Excess (deficiency) of revenues over
(under) expenditures 1,524 (51,073)
Other financing sources (uses):

Transfers in 22,390 95,754
Transfers out (9,792) (36,346)
Issuance of long-term debt 10,538 14,112
Total other financing sources (uses) 23,136 73,520
Changes in fund balances 24,660 22,447
Fund balances, beginning of year 440,763 878,645
Fund balances, end of year 465,423$ 901,092$
The notes to the basic financial statements are an integral part of this statement.

29 THIS PAGE INTENTIONALLY LEFT BLANK
30 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, 2024
(in thousands)
Changes in fund balances - total governmental funds 22,447$ Amounts reported for governmental acti vities in the statement of activities are different because:

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

Capital outlay 107,818
Depreciation/amortization expense (77,393)
30,425
Revenues in the statement of activities t hat do not provide current financial resources are not reported as revenues in the governmental funds:

Infrastructure dedications 25,693
Termination of IT subscription agreements 117
25,810
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 liabilities in the statement of net position.

Issuance of long-term debt (14,112)
Principal repayments on long-term debt 28,650
14,538
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. 2,588

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 (1,170)
Accrued claims and judgments (1,806)
Pension expense (56,457)
Other postemployment benefits 29,214
Pollution remediation (23)
Interest 83
Amortization of prepaid bond insurance (17)
Amortization of bond premium 1,136
Amortization of gain/loss on refunding (220)
(29,260)
Capital assets transferred from gover nmental activities to business-type activities are reported as transfers in the statement of activities. The transfers are not reported in the governmental funds as the amount did not involve the transfer of financial resources. (1,243)
Internal service funds are used by management to charge the costs of certain activities, such as insuranc e and fleet, to individual funds. The net expense of the internal service funds is reported with the governmental activities. (5,212)
Change in net position of governmental activities 60,093$ The notes to the basic financial statements are an integral part of this statement. 31 City of Sacramento
General Fund
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Non-GAAP Budgetary Basis)
with Budget to GAAP Reconciliation
For the Fiscal Year Ended June 30, 2024
(in thousands)
Actual Actual
Amounts - Budget Amounts -
Budgetary Variance with to GAAP GAAP
Final Basis Final Budget Reconciliation Basis
Revenues:

Taxes 458,613 $ 451,698 $ 456,957 $ 5,259$ -$ 456,957$ Intergovernmental 14,101 17,916 37,078 19,162 - 37,078 Charges for services 112,214 116,764 110,915 (5,849) - 110,915 Fines, forfeits and penalties 7,272 9,231 9,874 643 - 9,874 Interest, rents, and concessions 1,968 5,398 20,282 14,884 - 20,282 Assessment levies 150 240 565 325 - 565
Contributions and donations - - 1 1 - 1
Miscellaneous 1,908 408 139 (269) - 139
Total revenues 596,226 601,655 635,811 34,156 - 635,811 Expenditures:

Current:

Mayor/Council 10,817 12,620 7,655 4,965 (68) 7,587 City Auditor 1,278 1,565 1,271 294 - 1,271
City Manager 70,424 67,849 13,769 54,080 (6,763) 7,006 City Attorney 13,957 16,498 12,790 3,708 (568) 12,222 City Clerk 2,737 2,721 2,508 213 - 2,508
City Treasurer 1,707 1,804 1,181 623 - 1,181 Finance 9,048 9,502 9,426 76 (86) 9,340
Information technology 21,088 22,375 21,011 1,364 (15) 20,996 Human resources 9,225 10,010 5,085 4,925 (185) 4,900 Subtotal - General government 140,281 144,944 74,696 70,248 (7,685) 67,011 Police 225,255 242,075 231,602 10,473 (205) 231,397 Fire 182,011 194,354 194,574 (220) (11) 194,563
Public works 24,295 31,555 21,751 9,804 (129) 21,622 Convention and cultural services 10,283 10,046 3,379 6,667 (862) 2,517 Youth, parks, and community enrichment 6,695 9,634 8,420 1,214 - 8,420 Community development 38,179 38,476 33,567 4,909 (655) 32,912 Community response 6,991 7,241 7,397 (156) (2,605) 4,792 Utilities 177 164 54 110 - 54 Citywide and community support 68,768 50,523 63,107 (12,584) 32 63,139 Capital outlay 71,029 76,032 44,206 31,826 (236) 43,970 Debt service:

Principal - 3,713 3,713 - - 3,713
Interest and fiscal charges - 127 167 (40) - 167 Total expenditures 773,964 808,884 686,633 122,251 (12,356) 674,277 Excess (deficiency) of revenues over
(under) expenditures (177,738) (207,229) (50,822) 156,407 12,356 (38,466) Other financing sources (uses):

Transfers in 39,780 44,439 63,068 18,629 - 63,068 Transfers out (22,582) (26,701) (26,211) 490 - (26,211) Issuance of long-term debt - - - - 3,578 3,578
Total other financing sources (uses) 17,198 17,738 36,857 19,119 3,578 40,435 Changes in fund balance (160,540) (189,491) (13,965) 175,526 15,934 1,969 Fund balance, beginning of year 324,479 324,479 324,479 - - 324,479 Fund balance, end of year 163,939$ 134,988 $ 310,514 $ 175,526 15,934$ 326,448$ 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 - Budget and Actual (Non-GAAP Budgetary Basis)
with Budget to GAAP Reconciliation
For the Fiscal Year Ended June 30, 2024
(in thousands)
Actual Actual
Amounts - Budget Amounts -
Budgetary Variance with to GAAP GAAP
Final Basis Final Budget Reconciliation Basis
Revenues:

Taxes 135,124$ 133,081 $ 134,293$ 1,212$ -$ 134,293$ Interest, rents, and concessions - 2,000 4,127 2,127 - 4,127 Total revenues 135,124 135,081 138,420 3,339 - 138,420 Expenditures:

Current:

General government 31,365 34,152 14,990 19,162 (6,154) 8,836 Police 10,381 10,647 9,840 807 (1,084) 8,756
Fire 10,130 11,011 9,554 1,457 (1) 9,553
Public works 2,551 2,163 1,729 434 (227) 1,502
Convention and cultural services 5,565 5,854 5,626 228 (89) 5,537 Youth, parks, and community enrichment 55,495 56,363 50,915 5,448 (164) 50,751 Community development 15,883 16,557 12,889 3,668 (416) 12,473 Community response 20,371 22,190 19,538 2,652 (7,132) 12,406 Library 14,272 14,272 14,272 - - 14,272
Utilities 5,628 5,628 5,610 18 - 5,610
Citywide and community support 5,976 3,937 5,695 (1,758) - 5,695 Capital outlay 24,581 29,584 9,765 19,819 (1,500) 8,265 Debt service:

Principal - 306 306 - - 306 Interest and fiscal charges - 18 18 - - 18 Total expenditures 202,198 212,682 160,747 51,935 (16,767) 143,980 Excess (deficiency) of revenues over
(under) expenditures (67,074) (77,601) (22,327) 55,274 16,767 (5,560) Other financing sources (uses):

Transfers in - 388 596 208 - 596
Transfers out (313) (343) (343) - - (343)
Issuance of long-term debt - - - - (4) (4)
Total other financing sources (uses) (313) 45 253 208 (4) 249 Changes in fund balance (67,387) (77,556) (22,074) 55,482 16,763 (5,311) Fund balance, beginning of year 86,353 86,353 86,353 - - 86,353 Fund balance, end of year 18,966$ 8,797$ 64,279$ 55,482$ 16,763$ 81,042$ Budgeted 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, 2024
(in thousands)
Solid Waste
Fund
ASSETS
Current assets:

Cash and investments held by City 217,187 $ 64,278 $ 74,754 $ 60,937 $ Cash and investments held by fiscal agent 263 - - -
Receivables, net:

Taxes - - - -
Accounts 21,403 13,213 12,300 14,192 Loans - - 51 -
Intergovernmental 3,018 491 1,204 - Leases 64 - - 157
Interest 1,300 324 344 291
Due from other funds - - - -
Inventories 1,797 98 394 -
Prepaid items 509 - - -
Intangible asset, current portion - - - -
Total current assets 245,541 78,404 89,047 75,577 Noncurrent assets:

Restricted assets:

Cash and investments held by City 60,495 7,413 729 2,252 Cash and investments held by fiscal agent 3,499 - - - Advances to other funds - - - -
Leases receivable 737 - 1,284
Loans receivable - - 822 -
Intangible assets - - - -
Capital assets:

Land 3,637 1,138 17,885 1,133 Buildings and improvements 168,214 58,654 11,805 32,153 Machiner
y and equipment 117,021 6,044 18,776 12,437 Vehicles - - - -
Transmission and distribution system 941,378 251,409 452,635 - Construction in progress 60,125 7,417 11,280 2,422 Software 3,541 3,464 3,764 2,801 Easements 134 - 157 -
Leased land - - - -
Leased building - - 177 -
Leased equipment 184 - - -
IT subscriptions 1,117 363 194 132
Less: accumulated depreciation/amortization (430,417) (108,573) (259,892) (38,311) Total noncurrent assets 929,665 227,329 258,332 16,303 Total assets 1,175,206 305,733 347,379 91,880

DEFERRED OUTFLOWS OF RESOURCES
Loss on refunding of debt 5,950 2,105 - - Pensions 16,586 4,338 5,444 6,393 OPEB 1,646 539 685 1,119
Total deferred outflows of resources 24,182 6,982 6,129 7,512 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.

34 City of Sacramento
Proprietary Funds
Statement of Net Position
June 30, 2024
(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
IT subscriptions
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
35,654$ 23,103 $ 475,913 $ 141,139 $ - - 263 758
4,392 - 4,392 -
2,286 868 64,262 4,599
- - 51 -
- - 4,713 -
- 518 739
211 113 2,583 587
- - - 8,441
- - 2,289 -
- - 509 9,798
- 8 8 -
42,543 24,610 555,722 165,322 3,745 - 74,634 -
7,316 - 10,815 -
- - - 25,579
- 7,280 9,301 -
- - 822 -
- 88 88 -
20,071 5,825 49,689 -
113,190 64,596 448,612 7,454
4,913 6,235 165,426 543 - - - 216,495
- - 1,645,422 -
371,781 6,165 459,190 503
59 41 13,670 256
- - 291 -
- 1,978 1,978
- - 177 175
- - 184 -
228 767 2,801 165
(75,304) (
48,635) (961,132) (131,296)
445,999 44,340 1,921,968 119,874 488,542 68,950 2,477,690 285,196 - - 8,055 -
3,254 3,068 39,083 4,723 451 429 4,869 613
3,705 3,497 52,007 5,336 Total
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)

35 City of Sacramento
Proprietary Funds
Statement of Net Position
June 30, 2024
(in thousands)
Solid
Waste
Fund

LIABILITIES
Current liabilities:

Accounts payable 3,905 14,526 3,859 1,614 Due to other funds - - - -
Accrued payroll 1,408 396 572 545
Accrued compensated absences 312 72 73 117
Interest payable 3,138 586 29 32
Liability for landfill postclosure - - - 458
Deposits 1 - - -
Unearned revenue 1,646 - 1,009 -
Accrued claims and judgments 111 112 103 271
Lease liabilities - - 36 -
IT subscription liabilities 198 92 40 44
Revenue and other bonds payable, net 16,041 2,441 - 1,380 Notes payable 3,583 - 101 -
Total current liabilities 30,343 18,225 5,822 4,461 Noncurrent liabilities:

Accrued compensated absences 3,931 1,313 1,866 1,610 Advances from other funds - - - -
Water fee credits 96 - - -
Wastewater fee credits - 7,764 - -
Net OPEB liability 10,964 4,101 4,612 15,284 Accrued claims and judgments - - - -
Li
ability for landfill postclosure - - - 5,678
Lease liabilities - - 37 -
IT subscription liabilities 123 79 22 16
Revenue and other bonds payable, net 305,069 51,794 - 7,642 Notes payable 125,546 - 1,645 -
Net pension liability 53,779 16,656 33,310 22,887 Total noncurrent liabilities 499,508 81,707 41,492 53,117 Total liabilities 529,851 99,932 47,314 57,578

DEFERRED INFLOWS OF RESOURCES
Gain on refunding of debt 3,058 - - 131
Pensions 988 242 649 1,027
OPEB 2,611 769 1,249 2,874
Leases 741 - - 1,413
Total deferred inflows of resources 7,398 1,011 1,898 5,445

NET POSITION
Net investment in capital assets 422,783 158,261 251,851 3,490 Restricted for:

Capital projects 52,935 7,917 - - Other programs - 33 35,843 2,238
Unrestricted 186,421 45,561 16,602 30,641 Total net position 662,139$ 211,772$ 304,296$ 36,369$ 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.

36 City of Sacramento
Proprietary Funds
Statement of Net Position
June 30, 2024
(in thousands)

LIABILITIES
Current liabilities:

Accounts payable
Due to other funds
Accrued payroll
Accrued compensated absences
Interest payable
Liability for landfill postclosure
Deposits
Unearned revenue
Accrued claims and judgments
Lease liabilities
IT subscription 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 postclosure
Lease liabilities
IT subscription 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
3,620 2,031 29,555 5,607 250 - 250 -
239 317 3,477 406
49 31 654 107
1,235 34 5,054 1
- - 458 -
- 47 48 -
1,592 350 4,597 204
14 11 622 36,693
- 114 150 22
52 50 476 55
8,194 1,301 29,357 -
- - 3,684 -
15,245 4,286 78,382 43,095 611 637 9,968 1,144
4,493 - 4,493 -
- - 96 -
- - 7,764 -
297 1,515 36,773 4,964
- - - 105,824
- - 5,678 -
1,537 1,574 83
97 619 956 -
330,903 7,266 702,674 -
- - 127,191 -
10,751 13,160 150,543 19,487
347,152 24,734 1,047,710 131,502 362,397 29,020 1,126,092 174,597 - 121 3,310 -
162 74 3,142 35
55 388 7,946 1,065
- 6,951 9,105 -
217 7,534 23,503 1,100
110,088 25,949 972,422 92,545 - - 60,852 -
- - 38,114 -
19,545 9,944 308,714 22,290 129,633$ 35,893$ 1,380,102$ 114,835$
Total Funds
A
ctivities -
Internal
Service
Governmental
Business-type Activities - Enterprise Funds
The notes to the basic financial statements are an integral part of this statement.

37 City of Sacramento
Proprietary Funds
Statement of Revenues, Expenses
and Changes in Net Position
For the Fiscal Year Ended June 30, 2024
(in thousands)
Storm
Wastewater Drainage Solid Waste
Fund Fund Fund
Operating revenues:

Charges for services:

User fees and charges 132,825$ 44,226$ 60,633$ 92,869$ Rents and concessions 54 - - 205
Charge to other agencies for contract services - 1,645 1,973 - Miscellaneous 78 - - 217
Total operating revenues 132,957 45,871 62,606 93,291 Operating expenses:

Employee services 47,452 15,080 19,152 20,421
Services and supplies 32,651 19,901 21,353 49,885
Depreciation/amortization 30,822 5,408 11,072 1,264
Insurance premiums - - - -
Claims and judgments 205 37 99 248
Total operating expenses 111,130 40,426 51,676 71,818 Operating income (loss) 21,827 5,445 10,930 21,473
Nonoperating revenues (expenses):
15,163 3,863 3,261 2,333
- - - -
2,668 - 134 1,679
- - - -
(12,902) (1,582) (67) (218)
(23) - - -
- (447) - -
Interest and investment revenue
Transient occupancy taxes
Revenue from other agencies
Insurance and other claim recoveries
Interest expense
Amortization of bond prepaid insurance
Gain (loss) on disposition of capital assets
Gain on lease forgiveness - - - -
Total nonoperating revenues (expenses) 4,906 1,834 3,328 3,794 Income before capital contributions and transfers 26,733 7,279 14,258 25,267 Capital contributions 13,320 3,617 9,474 -
Transfers in 277 385 86 391
Transfers out (14,776) (4,817) (8,852) (10,256)
Changes in net position 25,554 6,464 14,966 15,402
Total net position, beginning of year 636,585 205,308 289,330 20,967 Total net position, end of year 662,139$ 211,772$ 304,296$ 36,369$ Business-type Activities - Enterprise Funds
Fund
Water
The notes to the basic financial statements are an integral part of this statement.

38 City of Sacramento
Proprietary Funds
Statement of Revenues, Expenses
and Changes in Net Position
For the Fiscal Year Ended June 30, 2024
(in thousands)
Governmental
Activities -
Other Internal
Enterprise Service
Funds Total Funds
Operating revenues:

Charges for services:

User fees and charges 2,175$ 23,929$ 356,657$ 127,495$ Rents and concessions 12,465 1,081 13,805 -
Charge to other agencies for contract services - - 3,618 - Miscellaneous - 111 406 92
Total operating revenues 14,640 25,121 374,486 127,587 Operating expenses:

Employee services 8,279 9,648 120,032 14,406 Services and supplies 14,864 8,974 147,628 32,308 Depreciation/amortization 1,366 1,619 51,551 16,857
Insurance premiums - - - 17,726
Claims and judgments 39 4 632 44,772
Total operating expenses 24,548 20,245 319,843 126,069 Operating income (loss) (9,908) 4,876 54,643 1,518
Nonoperating revenues (expenses):
2,370 620 27,610 7,670
34,254 - 34,254 -
- 281 4,762 19
- - - 1,287
(13,900) (220) (28,889) (3)
- - (23) -
- - (447) 486
Interest and investment revenue
Transient occupancy taxes
Revenue from other agencies
Insurance and other claim recoveries
Interest expense
Amortization of bond prepaid insurance
Gain (loss) on disposition of capital assets
Gain on lease forgiveness - 23 23 -
Total nonoperating revenues (expenses) 22,724 704 37,290 9,459 Income before capital contributions and transfers 12,816 5,580 91,933 10,977 Capital contributions - - 26,411 -
Transfers in 2,689 5,300 9,128 10
Transfers out (2,884) (10,762) (52,347) (16,199)
Changes in net position 12,621 118 75,125 (5,212)
Total net position, beginning of year 117,012 35,775 1,304,977 120,047 Total net position, end of year 129,633$ 35,893$ 1,380,102$ 114,835$ Community
Center
Fund
Business-type Activities - Enterprise Funds
The notes to the basic financial statements are an integral part of this statement.

39 City of Sacramento
Proprietary Funds
Statement of Cash Flows
For the Fiscal Year Ended June 30, 2024
(in thousands)
Storm
Water Wastewater Drainage Solid Waste
Fund Fund Fund Fund
Cash flows from operating activities:

Receipts from customers and users 133,103 $ 45,459 $ 61,343 $ 91,683 $ Receipts from interfund services provided - - - -
Payments to suppliers (34,732) (19,873) (21,511) (48,139) Payments to employees (44,996) (14,542) (18,359) (20,266) Claims and judgments paid (148) (13) (75) (191)
Net cash provided by (used for) operating activities 53,227 11,031 21,398 23,087 Cash flows from noncapital financing activities:

Transient occupancy taxes - - - -
Transfers in from other funds 278 385 86 391 Transfers out to other funds (14,742) (4,771) (8,852) (10,147) Collections on interfund loans - - - -
Loans made to other funds - - - -
Interfund loan repayments - - - -
Intergovernmental revenue received 287 - 134 1,679
Interest payments on overbilling (13) - (5) -
Net cash provided by (used for) noncapital financing activities (14,190) (4,386) (8,637) (8,077) Cash flows from capital and related financing activities:

Acquisition and construction of capital assets (7,121) (3,076) (1,409) (264) Proceeds from sale of capital assets - - - -
Proceeds from issuance of debt 24,813 - - -
Principal payments on capital debt (45,803) (2,070) (98) (1,160) Interest payments on capital debt (14,173) (1,795) (62) ( 408) Initial direct costs to place lease asset into service - - - - Principal payments on lease liabilities - - (35) -
Interest payments on lease liabilities - - - -
Principal payments on IT subscription liabilities (497) (117) (66) (40) Interest payments on IT subscription liabilities (5) (1) (1) (1) Transfers in from other funds - - - -
Transfers out to other funds (35) (46) - (109)
Capital contributions received 1,744 1,990 1 - Receipts from leases 39 - - 155
Collection of interest from leases 13 - - 23
Loan repayments received - - 49 -
Cash reimbursement for fee credits - (2,322) - -
Net cash used for capital and related financing activities (41,025) (7,437) (1,621) (1,804) Cash flows from investing activities:

Collection of interest and investment revenue 15,000 3,832 3,180 2,227 Net increase (decrease) in cash and cash equivalents 13,012 3,040 14,320 15,433 Cash and cash equivalents, beginning of year 268,432 68,651 61,163 47,756 Cash and cash equivalents, end of year 281,444$ 71,691$ 75,483$ 63,189$ Business-type Activities - Enterprise Funds
The notes to the basic financial statements are an integral part of this statement.

40 City of Sacramento
Proprietary Funds
Statement of Cash Flows
For the Fiscal Year Ended June 30, 2024
(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
Interest payments on overbilling
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
Initial direct costs to place lease asset into service
Principal payments on lease liabilities
Interest payments on lease liabilities
Principal payments on IT subscription liabilities
Interest payments on IT subscription 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 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
17,080$ 24,392 $ 373,060 $ - $
-
- - 209,269
(
16,138) (9,500) (149,893) (131,237) (7,947) (9,324) (115,434) (13,620) (29) (
2) (
458) (
35,171)
(7,034) 5,566 107,275 29,241
33,429 - 33,429 -
- 5,300 6,440 10
(
2,884) (2,162) (43,558) (
1,153)
- - - 4,649
- - - (
23,191)
(250) - (
250) -
- 281 2,381 19
- - (
18)
30,295 3,419 (
1,576) (19,666)
(3,177) (173) (
15,220) (
20,195)
- 765 765 941
- - 24,813 -
(
6,655) (1,090) (
56,876) -
(
15,055) (387) (
31,880) -
- - - (
24)
- (
88) (
123) (
19)
- (
5) (
5) -
(
53) (
48) (
821) (
54)
- (
9) (
17) (
3)
2,688 - 2,688 -
- (
8,600) (8,790) (
46)
- - 3,735 -
- 281 475 -
- 88 124 -
- - 49 -
- - (
2,322) -
(
22,252) (9,266) (83,405) (19,400) 2,332 497 27,068 7,599
3,341 216 49,362 (2,226) 43,374 22,887 512,263 144,123
46,715$ 23,103$ 561,625$ 141,897$
Business-type Activities - Enterprise Funds
Governmental
Activities -
Internal
Service
Funds
The notes to the basic financial statements are an integral part of this statement. (continued)

41 City of Sacramento
Proprietary Funds
Statement of Cash Flows
For the Fiscal Year Ended June 30, 2024
(in thousands)
Reconciliation of cash and cash equivalents
to the Statement of Net Position:

Cash and investments held by City 217,187 $ 64,278 $ 74,754 $ 60,937 $ Cash and investments held by fiscal agent 263 - - - R
estricted cash and investments held by City 60,495 7,413 729 2,252 Restricted cash and investments held by fiscal agent 3,499 - - - T
otal cash and cash equivalents, end of year 281,444$ 71,691$ 75,483$ 63,189$ Reconciliation of operating income (loss) to net
cash provided by (used for) operating activities:

Operating income (loss) 21,827$ 5,445$ 10,930$ 21,473$ Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities:

Depreciation/amortization expense 30,256 5,079 10,738 1,080 Amortization of intangible assets 566 329 334 184
Nonoperating claims and judgments - - - -
C
hanges in assets, liabilities, and deferred outflows and inflows of resources:

Accounts receivable, net 155 (412) (
1,665) (
1,445)
Intergovernmental receivables - - (
190) -
Inv
entories (593) (
28) 5 -
Pr
epaid items (330) - 3 -
Ac
counts payable (1,158) 56 (166) (
650)
Ac
crued payroll 180 40 95 34
Accrued compensated absences 294 170 171 76 Ac
crued claims and judgments 57 24 24 57
Liability for landfill closure - - - 2,396
D
eposits (4) - - -
U
nearned revenue 49 - 592 -
W
ater fee credits - - - -
N
et pension liability and related deferred outflows/inflows of resources 3,311 766 1,103 985 Net OPEB liability and related deferred outflows/inflows of resources (1,329) (438) ( 576) (
940)
Deferred inflows related to leases (54) - - (163)
N
et cash provided by (used for) operating activities 53,227$ 11,031$ 21,398$ 23,087$ Noncash investing, capital and financing activities:

Contributions of capital assets 11,351$ 1,298$ 9,473$ -$ Amortization of bond premium and discount 1,820 304 - 161
Am
ortization of bond loss on refunding (1,091) (116) - - Am
ortization of bond gain on refunding 97 - - 26
Am
ortization of bond prepaid insurance (23) - - -
D
ecrease in prepaid items for capital assets - - - -
C
apital asset acquisitions on accounts payable 1,569 1,419 3,049 253 Loss on disposition of capital assets - 447 - -
F
ee credit reimbursement accounts payable - 686 - -
C
ancellation of capital debt with bond tender (3,157) - - - Fo
rgiven lease liability - - - -
Fo
rgiven IT subscription liability 12 8 8 -
St
orm
Business-type Activities - Enterprise Funds
Water
Fund
Wastewater Drainage Solid Waste
Fund Fund Fund
(continued) The notes to the basic financial statem ents are an integral part of this statement.

42 City of Sacramento
Proprietary Funds
Statement of Cash Flows
For the Fiscal Year Ended June 30, 2024
(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 ex
pense
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 b
y (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
Decrease in prepaid items for capital assets
Capital asset acquisitions on accounts payable
Loss on disposition of capital assets
Fee credit reimbursement accounts payable
Cancellation of capital debt with bond tender
Forgiven lease liability
Forgiven IT subscription liability
35,654$ 23,103 $ 475,913 $ 141,139 $
-
-
263 758
3,745
-
74,634 -
7,316 -
10,815 -
46,715$ 23,103$ 561,625$ 141,897$
(9,908)$ 4,876$ 54,643$ 1,518$
1,366 1,611 50,130 16,840
-
8 1,421 17
-
- - 1,929
2,105 (
101) (
1,363) 1
- - (
190) -
- - (
616) -
8 20 (299) 1
(
1,282) (546) (
3,746) 476
57 24 430 59
119 (
144) 686 41
10 2 174 7,672
- - 2,396 -
- (
25) (
29) -
335 (
86) 890 1
- - - -
533 793 7,491 1,194
(
377) (
349) (
4,009) (
508)
- (
517) (
734) -
(7,034)$ 5,566$ 107,275$ 29,241$
-$ -$ 22,122$ -$
1,259 151 3,695 -
- - (
1,207) -
- 25 148 -
- - (
23) -
- - - 1,250
12 15 6,317 1,590
- - 447 -
- - 686 -
- - (
3,157) -
- 23 23 -
- - 28 -
Communi
ty Other
Business-type Activities - Enterprise Funds
Service
Total
Center Enterprise
Fund Funds Funds
Internal
Governmental
Activities -
The notes to the basic financial statements are an integral part of this statement.

43 City of Sacramento
Fiduciary Funds
Statement of Fiduciary Net Position
June 30, 2024
(in thousands)
Pension Private-Purpos e Investment Pool Othe r
Trust Trust Custodial Custodial
Fund Fund Fund Funds
ASSETS
2,547$ 11,503$ 127,027$ 161,421$
- 21,127 - 3,901
- 112 - -
Cash and investments held by City
Cash and investments held by fiscal agent
Prepaid items
Receivables, net:

Interest and dividends 1,070 - 481 517
Special assessments - - - 482
Investments, at fair value:

Corporate bonds/notes 58,326 - - -
Equities 16,714 - - -
Exchange traded funds 140,595 - - -
Investment Trust of California (CalTRUST) 1,644 - - - Money market mutual funds 4,882 - - -
Municipal bonds/notes 22,999 - - -
U.S. agencies 2,759 - - -
U.S. Treasury bonds 4,153 - - -
- - - 3,074
- - - 18,764
-
3,158 - -
Restricted assets:

Cash and investments held by City
Cash and investments held by fiscal agent
Loans receivable
Capital assets:

Land - 3,343 - -
Buildings and improvements - 102 - -
Less: accumulated depreciation - (39) - -
Total assets 255,689 39,306 127,508 188,159

DEFERRED OUTFLOWS OF RESOURCES
Loss on refunding of debt - 743 - -

LIABILITIES
Accounts payable 6 4 - 9
Benefits payable 2,186 - - -
Due to bondholders - - - 41,275
Interest payable - 211 - -
Contracts payable - 19,008 - -
Bonds payable - 27,724 - -
Notes payable - 140,133 - -
Total liabilities 2,192 187,080 - 41,284

NET POSITION
Held in trust for:

Restricted for pensions 253,497 - - -
Redevelopment dissolution - (147,031) - -
Held for external pool participants - - 127,508 146,875 Total net position (deficit) 253,497$ (147,031)$ 127,508$ 146,875$ 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, 2024
(in thousands)
Pension Private-Purpos e Investment Pool Othe r
Trust Trust Custodial Custodial
Fund Fund Fund Funds
Additions:

Deposits - $ -$ 103,899$ 2,061$
Property taxes - 27,742 - -
Special assessments - - - 18,373
Capital contributions - - - 27,113
Other income - 2 - -
Contributions:

Employer 1,399 - - -
Employees 1 - - -
Investment income:

From investment activities:
23,338 - 2,424 3,037
3,650
1,300 3,322 6,354
Net appreciation in fair value of investments
Interest
Dividends 3,147 - - -
Total investment income 30,135 1,300 5,746 9,391
Investment expenses:
36 - 231 - Banking, interest, and fiscal agent expenses Professional services 990 - - -
Total investment expenses 1,026 - 231 -
Net income from investment activities 29,109 1,300 5,515 9,391 Total additions 30,509 29,044 109,414 56,938
Deductions:
26,933 - - -
45 - - -
- - 111,044 39
- 8,459 - -
- 5,718 - -
- 382 - -
- - - 46,459
- - - 1,160
- 3 - -
Benefit payments
Refunds of employee contributions
Withdrawals
Interest expense
Other enforceable obligation payments
Loan forgiveness
Paid to bondholders
Administrative expenses
Loss on disposal of capital asset
Depreciation expense
- 3 - -
Total deductions 26,978 14,565 111,044 47,658
Changes in net position 3,531 14,479 (1,630) 9,280
Net position (deficit), beginning of year 249,966 (161,510 ) 129,138 137,595 Net position (deficit), end of year 253,497$ (147,031)$ 127,508$ 146,875$ 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, 2024
(dollar amounts expressed in thousands)
NOTE 1 – SUMMA

RY OF SIGNIFICANT ACCOUNTING POLICIES

DEFINITION OF REPORTING ENTITY
The City of Sacramento (City) was incorporated in 1849 under the l aws 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 exerci se of powers entity 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 Sacramento 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 t he City’s General Fund. The SPFA is governed by the City Council.

Fiduciary Component Unit
Sacramento City Employees’ Retirement System (S CERS) 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.gov/Finance/Accounting/Reporting.

ACCOUNTING POLICIES
The financial statements of the City have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as appli ed to governmental agencies. The Governmental
Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant accounting policies of the City are described below.

Governmental Accounting Standards Implemented During the Fiscal Year Ended June 30, 2024
GASB Statement No. 99 – In April 2022, GASB issued Statement No. 99, Omnibus 2022. The obje ctives 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 issues that have been identified during implementation and application of certain GASB Statement s and (2) accounting and financial reporting for financial guarantees. The provisions of paragraphs 4 through 10 of Statement 99 are effective for fiscal years beginning after June 15, 2023.

The applicable provisions of paragraphs 4 through 10 were implemented July 1, 2023, and did not have a material impact to the financial statements.

GASB Statement No. 100 – In June 2022, GASB issued Statement No. 100, Acc ounting 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 applicable provisions were implemented July 1, 2023. The change in accounting es timate is disclosed in the Landfill Postclosure Care Cost section of Note 13.
47 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 1 – SUMMARY 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. 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.

GASB Statement No. 102 – In December 2023, GASB issued Statement No. 102, Certain Risk Disclosures. The objective of this statement is to provide users of government financial statements with essential information about risks related to a government’s vulnerabilities due to certai n concentrations or constraints. The provisions in Statement 102 are effective for fiscal years beginning after June 15, 2024. The City has not determined the effect of implementing this statement.

GASB Statement No. 103 – In April 2024, GASB issued Statement No. 103, Financial Reporting Model Improvements. The objective of this statement is to improve key components of the financial reporting model to enhance its effectiveness in providing information t hat is essential for decision making and assessing a government’s accountability. The provisions in Statement 103 are effective for fiscal years beginning after June 15, 2025. The City has not determined the effect of implementing this statement.

GASB Statement No. 104 – In September 2024, GASB issued Statement No. 104, Disclosure of Certain Capital Assets. The objective of this statement is to provide us ers of government financial statements with essential information about certain types of capital assets. The pr ovisions in Statement 104 are effective for fiscal years beginning after June 15, 2025. The City has not determined the effect of implementing this statement.

Government-wide and Fund Financial Statements

The government-wide financial statements (i.e., the statement of net position and the statement 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 are allocated to public works. Program revenues include 1) charges to customers or applican ts 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 requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.

48 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Government-wide and Fund Financial Statements (Continued)

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 using 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.

The City reports the following major governmental funds:

The General 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.

49 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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

The City reports the following major enterprise funds:

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

The Wastewater Fund accounts for the operation and maintenance 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 closure.

The Community Center Fund accounts for the operation and maintenance 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 eet 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 received 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.

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.

50 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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

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 $6,663 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 resoluti on 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, and for certain activities within the City/County Office of Metropolitan Water Planning (CCOMWP) Fund, Transportation and Development Fund, the Culture and Leisure Fund, the Parks and Recreation Fund, and the Sp ecial 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 proj ects funds, and the O perating Grants Fund where appropriations remain authorized for each project until closed, irrespective of fiscal year. Expenditures are appropriated on a modified accrual 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 Manag er is authorized to administratively amend department budgets during the year for transactions up to $250 wit hout 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 appropriations are automatically carried over into the next fiscal year.

Financial Statements Elements

Fair Value Measurement – The City categorizes the fair value m easurements of its inve stments based on the hierarchy established by GAAP. The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure an asset or liability’s fair value: Leve l 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.

51 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Financial Statements Elements (Continued)

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.

52 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 1 – SUMMARY 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 lease and IT subscription assets are also reported as capital assets. Refer to the Lease and IT subscription 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.

53 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Financial Statements 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 (e.g., 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.

54 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Financial Statements Elements (Continued)

Fund Balance - In the fund 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 GAAP requires management 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 City 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.

55 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Financial Statements Elements (Continued)

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.

Leases, City as a Lessee, and IT Software Subscriptions - The City is a lessee in various noncancellable leases of land, buildings, and equipment. The City also has noncancellable subscription arrangements for the right-to-use information technology software (IT subscriptions). For leases and IT subscriptions with a maximum possible term of 12 months or less at commencement, the City recogni zes expenses/expenditures based on the provisions of the agreements. For all other leases and IT subscriptions, the City recognizes a lease or IT subscription liability and an intangible right-to-use lease or IT subscription asset in the statement of net position.

At lease or IT subscription commencement, the City measures the lease or IT subscrip tion liability at the present value of fixed payments expected to be made during the lease or subscription term. Subsequently, lease and IT subscription liabilities are reduced by the principal porti on of payments made. The lease or IT subscription asset is initially measured at the initial amount of the lease or IT subscription liability, plus any initial direct costs ancillary to placing the underlying asset into service and paym ents made at or before the lease or IT subscription commencement date, less any incentives received. Subsequently, lease and IT subscription assets are amortized into depreciation and amortization expense on a straight-line basis over the shorter of the lease or subscription term or the useful life of the underlying asset. If the Ci ty is reasonably certain of exercising a purchase option contained in a lease or IT subscription agreement, the lease or IT subscription 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 dur ing the lease term, unless a federal funding source is utilized. The City also capitalizes all IT subscription assets, except those with less than $100 of fixed payments expected to be made during the IT subscrip tion term, unless a federal funding source is utilized.

All lease and IT subscription assets in excess of $5 financed by a federal funding source are capitalized. These same thresholds are used in the recognition of lease and IT subscription 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.

56 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Financial Statements Elements (Continued)

Other Lease and IT Software Subscription Considerations - Key estimates and judgments include the City’s determination of the discount rate used to calculate the present value of the lease or IT subscription, lease or IT subscription terms, lease or IT subscription payments, and lease receipts. The City generally uses its estimated incremental borrowing rate as the discount rate for leases and IT subscriptions unless the rate charged is explicitly stated or known. The City’s incremental borrowing rate for leases and IT subscriptions is based on the estimate of interest rates that the City would be charged for borrowing lease and IT subscription amounts during the term of the agreement. The City uses an incremental borrowing rate of between 0.316% and 3.16%. The agreement term includes noncancellable periods of lease and IT subscr iption arrangements, plus any additional periods covered by an option 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 parties to the agreement have a unilateral option to terminate (or if both parties must agree to extend) are excluded from the lease and IT subscription term. Receipts and payments are evaluated by the City to determine if they should be included in the measurement of lease receivables and lease or IT subscription liabilities, including receipts and payments 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 ma y require remeasurement of lease and IT subscription agreements. When certain changes occur that are expected to significantly affect the value of the lease or IT subscription, the amounts are remeasured and adjusted.

57 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 2 – CASH AND INVESTMENTS

The following is a summary of cash and investments at June 30, 2024:

Government-wide
Statement of
Net Position
Fiduciary Funds
Statement of Fiduciary
Net Position Total
Cash and investments 1,460,691$ 579,598$ 2,040,289$ Restricted cash and investments 120,311 21,838 142,149 Total 1,581,002$ 601,436$ 2,182,438$

Under the authority of the Sacramento City Charter, the Sacramento City Council, by Resolution 2024-0021, 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 June 25, 2024. 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 2024-0229. Investment standards adopted by the SCERS Board were last approved by the City Council on June 25, 2024. 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 2024, the asset allocations consisted of the following: 35% Fixed Income/Real Estate securities, 30% Large Cap Growth stocks, 30% Equity Income stocks and 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, 2024
(dollar amounts expressed in thousands)

NOTE 2 – CASH AND INVESTMENTS (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 year 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 table 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, 2024
(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, 2024 are as follows:

Cash and Investment Type No Maturity Under 1 1-5 Over 5 Total Bank deposits 73,164$ - $ - $ - $ 73,164$ Commercial paper - 293,808 - - 293,808 Corporate bonds/notes - 235,711 323,126 210 559,047 Equities 5,323 - - - 5,323 Exchange traded funds 2,210 - - - 2,210 Investment Trust of California (CalTRUST) - 117,812 60,694 - 178,506 Local Agency Investment Fund (LAIF) - 361 - - 361 Municipal bonds/notes - 55,973 33,328 - 89,301 Money market mutual funds - 54,933 - - 54,933 Negotiable certificates of deposit - 5,419 28,757 - 34,176 Supranational securities - - 20,280 - 20,280 U.S. agency securities - 108,050 472,453 - 580,503 U.S. Treasury bills - 17,579 - - 17,579 U.S. Treasury notes - - 18,628 - 18,628 Total Cash and Investments 80,697$ 889,646$ 957,266$ 210$ 1,927,819$

Remaining Maturity in Years

The $210 of corporate bonds/notes with remaining maturities longer than five years are held by other trust funds. The $5,323 of equities and $2,210 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, 2024
(dollar amounts expressed in thousands)

NOTE 2 – CASH AND INVESTMENTS (Continued)

Interest Rate Risk (Continued)

SCERS’ cash and investments by maturities as of June 30, 2024 are as follows:

Cash and Investment Type No Maturity Under 1 1-5 Over 5 Total City of Sacramento Investment Pool -$ 2,547$ - $ - $ 2,547$ Corporate bonds/notes - 2,459 16,601 39,266 58,326 Equities 16,714 - - - 16,714 Exchange traded funds 140,595 - - - 140,595 Investment Trust of California (CalTRUST) 1,644 - - - 1,644 Money market mutual funds 4,882 - - - 4,882 Municipal bonds/notes - - 7,067 15,932 22,999 U.S. agency securities - - 753 2,006 2,759 U.S. Treasury bonds - 2,784 - 1,369 4,153 Total Cash and Investments 163,835$ 7,790$ 24,421$ 58,573$ 254,619$

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 yields than the original securities. The fair values of the callable securities held by the City and SCERS at June 30, 2024, by investment type, are as follows:

Investment Type City SCERS
Corporate bonds/notes 116,563$ 8,191$
Municipal bonds/notes 8,267 3,211
Negotiable certificates of deposit 15,353 -
Supranational securities 5,674 -
U.S. agency securities 542,033 1,110
687,890$ 12,512$

61 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 2 – CASH AND INVESTMENTS (Continued)
Credit Risk

Generally, credit risk is the risk that an issuer of an inve stment 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. Obligations of the U.S. Government are not considered to have credit risk and do not require disclosure of credit quality. The S & P Global Ratings (S & P) credit ratings of the City and SCERS investments subject to credit risk as of June 30, 2024 are as follows:

Investment Type S & P City SCERS
City of Sacramento Investment Pool not rated -$ 2,547$ Commercial paper A 293,808 -
Corporate bonds/notes A 448,854 19,774 AA 92,964 2,892
AAA 3,798 -
BBB 4,610 35,659
not rated 8,821 1
Investment Trust of California (CalTRUST) not rated 178,506 1,644 Local Agency Investment Fund (LAIF) not rated 361 - Municipal bonds/notes A 730 3,297 AA 63,575 12,799
AAA 12,470 498
not rated 12,526 6,405
Money market mutual funds AAA 54,933 4,882 Negotiable certificates of deposit A 5,132 - BB 29,044 -
Supranational securities AAA 20,280 - U.S. agency securities AA 569,806 2,522 not rated 10,697 -
Total 1,810,915$ 92,920$

As of June 30, 2024, the City held corporate bonds/notes of $4,154 issued by the 3M Company that are rated BBB.

These investments were purchased at an initial rating of AA but were subsequently downgraded. The City’s investment policy allows for holding assets purchased at the minimum rating that were subsequently downgraded.

The other $456 in notes rated BBB are held by other trust funds.

As of June 30, 2024, the City held notes issued by the Private Export Funding Corporation that are not rated by S & P but are rated Aa1 by Moody’s Ratings. The notes have a fair value of $8,821 as of June 30, 2024.

62 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 2 – CASH AND INVESTMENTS (Continued)
Concentration of Credit Risk

The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. As of June 30, 2024, the City and SCERS did not hold investments in an individual issuer exceeding 5% of total investments (other than U.S. Treasury securities, mutual funds, and external investment pools). In addition, SCERS did not hold investments in an individual issuer exceeding 5% of net position.

Custodial Credit Risk

Custodial credit risk for deposits is the risk that, in the ev ent of the 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 Deposit 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 Investm ent 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, 2024
(dollar amounts expressed in thousands)

NOTE 2 – CASH AND INVESTMENTS (Continued)

Fair Value Measurement and Application

The City and SCERS categorize fair va lue measurements within the fair va lue hierarchy established by GAAP.

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 pric es that are observable for the asset or liability; and  Inputs that are derived principally from or corrob orated by observable market data by correlation or other means.

Level 3 – Inputs to the valuation me thodology 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, 2024 was $17,363 and $37,570, respectively, with $0 unfunded commitments. At June 30, 2024 SCERS held money market mutual funds with a net asset value of $4,882, 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 inputs.

64 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 2 – CASH AND INVESTMENTS (Continued)

Fair Value Measurement and Application (Continued)

The City’s treasury pools’ asset market prices are derived from closing bid prices 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 available, 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 generally 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 yields, reported trades, broker-dealer quotes, issuer spreads and benchmark securities, among others.

There have been no changes in the methods and assu mptions used at June 30, 2024. 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, 2024
(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, 2024:

Investments by Fair Value Level
Balance at
June 30, 2024
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Commercial paper 293,808$ - $ 293,808$ - $ Corporate bonds/notes 531,303 - 531,303 - Equities 5,323 5,323 - - Exchange traded funds 2,210 2,210 - - Municipal bonds/notes 89,301 - 89,301 - Negotiable certificates of deposit 20,306 - 20,306 - Supranational securities 20,280 - 20,280 - U.S. agency securities 579,635 - 579,635 - U.S. Treasury bills 17,579 17,579 - - U.S. Treasury notes 18,628 18,628 - - Total Investments by Fair Value Level 1,578,373 43,740$ 1,534,633$ -$ Investments Measured at Net Asset Value
Money market mutual funds 17,363
Investments Uncategorized
Investment Trust of California (CalTRUST) 178,506
Local Agency Investment Fund (LAIF) 361
Total Investments Uncategorized 178,867
Total Investments Held by City 1,774,603
Investments Held by Fiscal Agent by Fair Value Level
Corporate bonds/notes 27,744 -$ 27,744$ -$

Negotiable certificates of deposit 13,870 - 13,870 - U.S. agency securities 868 - 868 - Total Investments Held by Fiscal Agent by
Fair Value Level 42,482 -$ 42,482$ -$ Investments Held by Fiscal Agent Measured at Net Asset
Value
Money market mutual funds 37,570
Total Investments Held by Fiscal Agent 80,052
Total Investments 1,854,655
Total Bank Deposits 73,164
Total Cash and Investments 1,927,819$

66 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 2 – CASH AND INVESTMENTS (Continued)

Fair Value Measurement and Application (Continued)

SCERS has the following recurring fair value measurements as of June 30, 2024:

Investments by Fair Value Level
Balance at
June 30, 2024
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Corporate bonds/notes $ 58,326 -$ 58,326$ - $ Equities 16,714 16,714 - - Exchange traded funds 140,595 140,595 - - Municipal bonds/notes 22,999 - 22,999 - U.S. agency securities 2,759 - 2,759 - U.S. Treasury bonds 4,153 4,153 - - Total Investments by Fair Value Level 245,546 $ 161,462 $ 84,084 $ - Investments Measured at Net Asset Value
Money market mutual funds 4,882
Investments at Fair Value not Subject to
Fair Value Hierarchy
City of Sacramento Investment Pool 2,547
Investment Trust of California (CalTrust) 1,644
Total Cash and Investments 254,619 $
Fair Value Measurements on a Recurring Basis Using

City Sponsored Investment Pool

As part of the City’s total cash and investments portfolio, the City 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 7.51% 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, 2024
(dollar amounts expressed in thousands)

NOTE 2 – CASH AND INVESTMENTS (Continued)

City Sponsored Investment Pool (Continued)

The following represents a condensed statement of net position and changes in net position for the City Sponsored Investment Pool and external individual investment accounts as of June 30, 2024:

Fair Value
Adjusted
Cost
Interest
Rates
Maturity
Dates
Commercial paper 293,808 $ 294,031 $ 2.19-5.32% 07/24-02/25 Corporate bonds/notes 529,352 552,102 0.55-5.55% 08/24-12/28 Deposits 72,055 72,055 2.97-5.00% N/A Investment Trust of California (CalTRUST) 178,506 178,506 4.26-5.40% N/A Local Agency Investment Fund (LAIF) 361 361 4.48% N/A Municipal bonds/notes 89,301 91,871 0.55-5.62% 07/24-06/27 Money market mutual funds 17,363 17,363 0.01-4.93% N/A Negotiable certificates of deposit 20,306 21,500 0.60-3.00% 08/24-06/26 Supranational securities 20,280 21,490 0.37-2.25% 07/25-11/26 U.S. agency securities 579,635 605,750 0.45-5.87% 07/24-5/29 U.S. Treasury bills/notes 36,207 37,541 0.37-4.66% 11/24-02/26 Total cash and investments in City sponsored investment pool and external individual investment accounts 1,837,174$ 1,892,570 $

A summary of cash and investments as of June 30, 2024 is as follows:

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

Cash and investments at fair value 1,690,780$ 146,394$ 1,837,174$ Interest receivables 6,199 481 6,680 Net position 1,696,979$ 146,875$ 1,843,854$ Equity of internal pool participants 1,569,471$ -$ 1,569,471$ Equity of external pool participants 127,508 146,875 274,383 Total equity 1,696,979$ 146,875 $ 1,843,854 $ Statement of Changes in Net Position:

Net position at July 1, 2023 1,625,016 $ 137,595 $ 1,762,611 $ Net change in investments by pool participants 71,963 9,280 81,243 Net position at June 30, 2024 1,696,979 $ 146,875 $ 1,843,854 $

68 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 2 – CASH AND INVESTMENTS (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, 2024, the City’s investment in LAIF is $361. The total amount invested by all public agencies in LAIF at that date is $21,974,160. LAIF is part of the California Pooled Money Investment Account (PMIA), which at June 30, 2024 had a balance of $178,255,133. Of that amount, 97% is invested in non-derivative financial products, and 3% 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, 2024 , the City’s investment in CalTRUST is $178,506, of which $42,861 was invested in the Liquidity funds pool, $74,951 in the Short-term pool, and $60,694 in the Medium-term 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, 2024
(dollar amounts expressed in thousands)

NOTE 3 – RECEIVABLES

Receivables as of June 30, 2024, were as follows:

Taxes Accounts Loans
Inter-
govern-
mental Leases Interest Total
Governmental activities
General Fund 33,123 $ 27,592 $ 1,236 $ 5,239 $ 25,837 $ 1,629 $ 94,656 $ Measure U Fund 23,037 120 - - - 312 23,469 2015 Golden 1 Center
Lease Revenue Bond Fund - 2,088 133,345 - - 31 135,464 Other governmental funds 7,957 22,851 31,614 81,275 3,805 1,843 149,345 Internal service funds - 4,599 - - - 587 5,186 64,117$ 57,250$ 166,195$ 86,514$ 29,642 $ 4,402$ 408,120$ Amounts not scheduled for
collection during the
subsequent year -$ -$ 157,729$ 10,496$ 26,822 $ -$ 195,047$ Business-type activities
Water Fund -$ 21,403$ -$ 3,018 $ 801$ 1,300 $ 26,522$ Wastewater Fund - 13,213 - 491 - 324 14,028 Storm Drainage Fund - 12,300 873 1,204 - 344 14,721 Solid Waste Fund - 14,192 - - 1,441 291 15,924 Community Center Fund 4,392 2,286 - - - 211 6,889 Other enterprise funds - 868 - - 7,798 113 8,779 4,392$ 64,262$ 873$ 4,713 $ 10,040$ 2,583$ 86,863$

Included in the Accounts Receivable amounts above ar e allowances for doubtful accounts of $19,864 in governmental activities and $2,187 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 $5,128, reported 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 $406,204 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 $146,190 and the current loan receivable balance as of June 30, 2024 is $133,345. 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, 2024
(dollar amounts expressed in thousands)

NOTE 4 – CAPITAL ASSETS

Summary

The following is a summary of capital assets as of June 30, 2024:

Business-
Governmental type
Activities Activities Total
Capital assets not being depreciated/amortized
Land 229,725$ 49,689$ 279,414$ Easements 2,501 291 2,792 Construction in progress 297,288 459,190 756,478 Total capital assets not being depreciated/amortized 529,514 509,170 1,038,684 Depreciable/amortizable capital assets
Buildings and improvements 741,128 448,612 1,189,740 Equipment 83,316 165,426 248,742 Software 7,117 13,670 20,787 Vehicles 219,274 - 219,274 Transmission and distribution system 4,777 1,645,422 1,650,199 Roadway network 1,759,319 - 1,759,319 Streetlight network 309,533 - 309,533 Parks and park improvements 267,563 - 267,563 Total depreciable/amortizable capital assets 3,392,027 2,273,130 5,665,157 Less accumulated depreciation/amortization for:

Buildings and improvements (332,009) (196,438) (528,447) Equipment (72,404) (69,403) (141,807) Software (5,952) (6,565) (12,517) Vehicles (125,423) - (125,423) Transmission and distribution system (1,445) (687,106) (688,551) Roadway network (1,238,079) - (1,238,079) Streetlight network (128,421) - (128,421) Parks and park improvements (113,224) - (113,224) Total accumulated depreciation/amortization (2,016,957) (959,512) (2,976,469) Depreciable/amortizable capital assets, net 1,375,070 1,313,618 2,688,688 Lease and IT subscription assets, net (Note 6) 15,817 3,520 19,337 T
otal capital assets, net 1,920,401$ 1,826,308$ 3,746,709$

Refer to Note 6 for more detailed information on lease and IT subscription asset activity and amortization expense by function.
71 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 4 – CAPITAL ASSETS (Continued)

Governmental Activities

Governmental capital asset activity for the fiscal year ended June 30, 2024 was as follows:

Beginning
Balance Increases Decreases
Transfers
In/Out
Ending
Balance
Capital assets not being depreciated/amortized
Land 220,493 $ 9,232 $ - $ - $ 229,725$ Easements 2,348 153 - - 2,501 Construction in progress 277,555 80,904 (61,171) - 297,288 500,396 90,289 (61,171) - 529,514 Depreciable/amortizable capital assets
Buildings and improvements 720,704 20,424 - - 741,128 Equipment 81,327 1,989 - - 83,316 Software 6,413 704 - - 7,117 Vehicles 215,921 15,307 (11,954) - 219,274 Transmission and distribution system 4,777 1,243 - (1,243) 4,777 Roadway network 1,732,078 41,908 (14,667) - 1,759,319 Streetlight network 294,256 15,277 - - 309,533 Parks and park improvements 252,708 14,855 - - 267,563 Total depreciable/amortizable capital assets 3,308,184 111,707 (26,621) (1,243) 3,392,027 Less accumulated depreciation/amortization for:

Buildings and improvements (317,712) (14,297) - - (332,009) Equipment (70,155) (2,249) - - (72,404) Software (5,486) (466) - - (5,952) Vehicles (119,934) (16,767) 11,278 - (125,423) Transmission and distribution system (1,358) (87) - - (1,445) Roadway network (1,213,304) (39,442) 14,667 - (1,238,079) Streetlight network (121,358) (7,063) - - (128,421) Parks and park improvements (104,249) (8,975) - - (113,224) Total accumulated depreciation/amortization (1,953,556) (89,346) 25,945 - (2,016,957) Depreciable/amortizable capital assets, net 1,354,628 22,361 (676) (1,243) 1,375,070 Lease and IT subscription assets, net (Note 6) 13,029 3,296 (508) - 15,817 Governmental activities capital assets, net 1,868,053$ 115,946$ (62,355)$ (1,243)$ 1,920,401$ Depreciation/amortization expense was charged to functions as follows:

General government 5,011$
Police 869
Fire 788
Public works 49,853
Convention and cultural services 3,866
Youth, parks, and community enrichment 11,161
Community development 83
Library 935
Capital assets held by the City's internal service funds are charged to the functions based on their usage of assets 16,780 Total governmental activities depreciation/amortization expense 89,346$ Total capital assets not being
depreciated/amortized

72 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 4 – CAPITAL ASSETS (Continued)

Business-type Activities

Business-type capital asset activity for the fiscal year ended June 30, 2024 was as follows:

Beginning
Balance Increases Decreases
Transfers
In/Out
Ending
Balance
Capital assets not being depreciated/amortized
Land 48,951 $ 738 $ - $ - $ 49,689 $ Easements 291 - - - 291 Construction in progress 453,029 17,700 (11,539) - 459,190 502,271 18,438 (11,539) - 509,170 Depreciable/amortizable capital assets
Buildings and improvements 447,227 1,385 - - 448,612 Equipment 164,345 1,081 - - 165,426 Software 13,535 135 - - 13,670 Transmission and distribution system 1,614,964 29,215 - 1,243 1,645,422 Total depreciable/amortizable capital assets 2,240,071 31,816 - 1,243 2,273,130 Less accumulated depreciation/amortization for:

Buildings and improvements (188,384) (8,054) - - (196,438) Equipment (63,034) (6,369) - - (69,403) Software (5,727) (838) - - (6,565) Transmission and distribution system (651,678) (35,428) - - (687,106) Total accumulated depreciation/amortization (908,823) (50,689) - - (959,512) Depreciable/amortizable capital assets, net 1,331,248 (18,873) - 1,243 1,313,618 Lease and IT subscription assets, net (Note 6) 3,582 (35) (27) 3,520 Business-type activities capital assets, net 1,837,101$ (470)$ (11,566)$ 1,243$ 1,826,308$ Depreciation/amortization expense was charged to functions as follows:

Water 30,461$
Wastewater 5,289
Storm drainage 10,974
Solid waste 1,220
Community center 1,310
Parking 1,386
Child development 49 (1)
Total business-type activities depreciation/amortization expense 50,689$ (1) $8 of depreciation/amortization expense reported in the Other Enterprise Funds is related to the amortization of the Regenc y Park joint-use agreement 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, 2024
(dollar amounts expressed in thousands)

NOTE 5 – PAYABLES

Payables as of June 30, 2024, were as follows:

Vendors Employees Interest Deposits Total
Governmental activities
General Fund 17,383 $ 24,833 $ 65 $ 356 $ 42,637 $ Measure U Fund 8,016 2,316 2 - 10,334 - - 3,473 - 3,473 Other governmental funds 40,542 82 1,384 3,232 45,240 Internal service funds 5,607 406 1 - 6,014 Total governmental activities 71,548$ 27,637$ 4,925$ 3,588$ 107,698$ Business-type activities
Water Fund 3,905$ 1,408$ 3,138$ 1$ 8,452$ Wastewater Fund 14,526 396 586 - 15,508 Storm Drainage Fund 3,859 572 29 - 4,460 Solid Waste Fund 1,614 545 32 - 2,191 Community Center Fund 3,620 239 1,235 - 5,094 Other enterprise funds 2,031 317 34 47 2,429 Total business-type activities 29,555$ 3,477$ 5,054$ 48$ 38,134$ 2015 Golden 1 Center Lease
Revenue Bond Fund

Included in the Interest Payable amount related to 2015 Golden 1 Center Lease Revenue Bond Fund above is the interest payable accrual of $3,473, 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 $1,368, reported in the government-wide statement of net position.

Included in the Interest Payable amount related to the General Fund, Measure U Fund, and Other Governmental Funds above is the interest payable associated with lease and IT subscription liabilitie s of $83, 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, 2024
(dollar amounts expressed in thousands)

NOTE 6 – LEASES AND IT SUBSCRIPTION ARRANGEMENTS

City as a Lessee and IT Software Subscriber

As discussed in Note 1, the City is a lessee for vari ous noncancellable leases of land, buildings, and equipment.

The City also has noncancellable subscription arrangem ents for the right-to-use information technology software (IT subscriptions). Leases of land have initial terms of 10 to 50 years, and contain one or more renewal provisions, generally in 5 or 10-year periods. Leases of buildings and equipment have initial terms of 3 to 10 years, and contain one or more renewal provisions, generally in 1 or 5-year periods. IT subscription arrangements have initial terms of 1 to 5 years, and contain one or more renewal provisions, generally in 1 to 5-year periods. The City’s lease and IT subscription arrangements generally do not include te rmination options reasonably certain to be exercised by either party to the arrangement or restrictive financial or other covenants. The City’s lease and IT subscription arrangements do not contain any material residual value guarantees.

A summary of lease and IT subscription asset activity for the fiscal year ended June 30, 2024 is as follows:

Beginning
Balance Increases Remeasurements Decreases
Ending
Balance
Governmental activities
Lease assets:

Land 188$ 46$ -$ -$ 234$ Buildings 1,789 364 (60) (144) 1,949 Equipment - 95 - - 95 Total lease assets 1,977 505 (60) (144) 2,278 Less accumulated amortization for:

Lease assets:

Land (12) (8) - - (20) Buildings (836) (376) - 144 (1,068) Equipment - (18) - - (18) Total accumulated amortization (848) (402) - 144 (1,106) 1,129 103 (60) - 1,172 IT subscription assets 14,742 7,695 - (1,130) 21,307 Less accumulated amortization (2,842) (4,502) - 682 (6,662) IT subscription assets, net 11,900 3,193 (448) 14,645 13,029$ 3,296$ (60)$ (448)$ 15,817$ Busine ss-type a ctivitie s
Lease assets:

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

Lease assets:

Land (245) (123) - - (368) Buildings (70) (35) - - (105) Equipment (129) (37) - - (166) (444) (195) - - (639) 1,895 (195) - - 1,700 IT subscription assets 2,009 819 - (27) 2,801 Less accumulated amortization (322) (659) - - (981) IT subscription assets, net 1,687 160 - (27) 1,820 3,582$ (35)$ -$ (27)$ 3,520$ Governmental activities lease and IT
subscription assets, net
Total accumulated amortization
Business-type activities lease and IT
subscription assets, net
Lease assets, net
Lease assets, net

75 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 6 – LEASES AND IT SUBSCRIPTION ARRANGEMENTS (Continued)

City as a Lessee and IT Software Subscriber (Continued)

Amortization expense for lease and IT subscription assets was charged to functions as follows:

Lease Assets
IT Subscription
Assets Total
General Government 77 $ 1,373 $ 1,450 $ Police 74 1,957 2,031
Fire 144 291 435
Public works 59 237 296 Convention and cultural services 7 86 93 Youth, parks, and community enrichment 41 143 184 Community development - 406 406 Community response - 9 9 Total amortization expense 402 $ 4,502 $ 4,904 $ Lease Assets
IT Subscription
Assets Total
Water 37$ 324 $ 361 $
Wastewater - 119 119
Storm Drainage 35 63 98 Solid waste - 44 44
Community Center - 56 56 Parking 123 53 176
Total amortization expense 195 $ 659 $ 854 $ Governmental Activities
Business-type Activities

A summary of changes in the related lease and IT subscription liabilities for the fiscal year ended June 30, 2024 is as follows:

Beginning
Balance Increases Remeasurements Decreases
Ending
Balance
Governmental activities
Lease liabilities 1,165 $ 482 $ (60) $ (396) $ 1,191 $ IT subscription liabilities 10,260 7,695 - (5,073) 12,882 Total 11,425 $ 8,177 $ (60) $ (5,469) $ 14,073 $ Business-type activities
Lease liabilities 1,870 $ - $ -$ (146)$ 1,724$ IT subscription liabilities 1,462 819 - (849) 1,432 Total 3,332$ 819$ -$ (995)$ 3,156$

76 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 6 – LEASES AND IT SUBSCRIPTION ARRANGEMENTS (Continued)

City as a Lessee and IT Software Subscriber (Continued)

Future minimum lease and IT subscription payments are as follows:

Fiscal Year
Ending June 30, Principal Interest Principal Interest
2025 318$ 23$ 4,770$ 204$ 2026 264 17 2,730 199 2027 113 13 1,788 140 2028 91 11 1,870 92 2029 64 9 1,123 40 2030 - 2034 221 23 601 12 2035 - 2039 30 10 - - 2040 - 2044 33 7 - - 2045 - 2049 35 4 - - 2050 - 2054 22 1 - - Totals 1,191$ 118$ 12,882$ 687$

Fiscal Year
Ending June 30, Principal Interest Principal Interest
2025 150$ 26$ 476$ 29$ 2026 154 25 238 18 2027 120 24 123 12 2028 43 23 128 9 2029 27 22 52 6 2030 - 2034 144 103 271 19 2035 - 2039 158 90 144 3 2040 - 2044 172 72 - - 2045 -
2049 188 59 - - 2050 - 2054 206 42 - - 2055 - 2059 225 22 - - 2060 - 2064 137 4 - - Totals 1,724$ 512$ 1,432$ 96$ Lease Payments IT Subscription Payments
Lease Payments IT Subscription Payments
Governmental Activities
Business-type Activities

Variable lease and IT subscription payments - Variable lease and IT subscription payments, other than those that are fixed in substance, are excluded from the measurement of the lease and IT subscription liability. Such amounts are recognized as 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 variable lease payments not include d in the measurement of lease liabilities was $412 during the fiscal year ended June 30, 2024. 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 $138 of expense associated with the leased land from the State Lands Commission during the fiscal year ended June 30, 2024.

77 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 6 – LEASES AND IT SUBSCRIPTION ARRANGEMENTS (Continued)

City as a Lessee and IT Software Subscriber (Continued)

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 variable lease payments not included in the measurement of lease liabilities was $650 during the fiscal year ended June 30, 2024.

Certain IT subscription arrangements require the City to make variable subscription payments based on the number of user licenses or transactions processed. The amount recognized as expens e/expenditures for variable subscription payments not included in the measurement of IT subscription liabilities was $2,345 during the fiscal year ended June 30, 2024. $1,015 was associated with variable IT subscription arrangements based on the number of user licenses and $1,330 was associated with IT va riable subscription arrangements based on the number of transactions processed.

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 5 to 50 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 2 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:

Fiscal Year
Ending June 30, Principal Interest Principal Interest
2025 2,820 $ 452 $ 739 $ 268 $ 2026 2,303 383 681 142 2027 2,128 352 698 133 2028 2,129 322 706 124 2029 2,147 291 661 114 2030 - 2034 8,807 1,034 2,477 445 2035 - 2039 5,790 499 1,637 284 2040 - 2044 1,795 200 1,709 138 2045 - 2049 451 134 732 23 2050 - 2054 613 87 - - 2055 - 2059 659 30 - - Totals 29,642 $ 3,784 $ 10,040 $ 1,671 $ Governmental Activities Business-type Activities

78 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 6 – LEASES AND IT SUBSCRIPTION ARRANGEMENTS (Continued)

City as a Lessor (Continued)

Lease related revenue recognized during the fiscal year ended June 30, 2024, excluding variable lease receipts, is as follows:

Variable 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 receipts not included in the measurement of lease re ceivables was $4,947 during the fiscal year ended June 30, 2024.

Governmental
Activ ities
Business-type
Activ ities
Lease revenue 2,799 $ 734 $
Interest revenue 444 157
79 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 7 – LONG-TERM LIABILITIES

Activity

The following is a summary of changes in long-term liabilities at June 30, 2024. Certain long-term liabilities provide financing to both governmental and business-type activities.

Beginning Ending Due Within
GOVERNMENTAL ACTIVITIES: Balance Additions Reductions Balance One Year Revenue and Other Bonds, Direct Placements:
2016 Lease Financing 5,560$ -$ (515)$ 5,045$ 535$ Revenue and Other Bonds, Public Offerings:
2006 Capital Improvement Revenue Bonds, Series B 37,135 - (1,770) 35,365 1,875 2006 Capital Improvement Revenue Bonds, Series E 72,513 - (5,375) 67,138 5,571 2015 Refunding Revenue Bonds 64,280 - (3,925) 60,355 4,125 2015 Lease Revenue Bonds - Golden 1 Center 250,560 - (4,165) 246,395 4,400 Subtotal, revenue and other bonds, public offerings 424,488 - (15,235) 409,253 15,971 Direct Borrowing Notes Payable:
1985 Marina Phase I 1,113 - (65) 1,048 68 1985 Marina Phase II 1,796 - (86) 1,710 90 2008 Sacramento Marina South Basin 13,476 - (280) 13,196 316 Subtotal, direct borrowing notes payable 16,385 - (431) 15,954 474 Plus deferred amounts:

Issuance premiums 13,348 - (1,136) 12,212 1,136 Subtotal, debt governmental activities 459,781 - (17,317) 442,464 18,116 Other Long-term Liabilities:

Accrued claims and judgments 138,680 46,481 (37,003) 148,158 42,334 Accrued compensated absences 51,528 46,063 (44,852) 52,739 4,090 Lease liabilities 1,165 422 (396) 1,191 318 IT subscription liabilities 10,260 7,695
(5,073) 12,882 4,770
Net OPEB liability 170,326 25,174 (20,398) 175,102 - Net pension liability 1,152,959 166,255 (131,477) 1,187,737 - Pollution remediation obligations 997 372 (349) 1,020 63 Financing plan fee credits:

Delta Shores 44,860 1,977 (1,516) 45,321 - Jacinto Creek 1,155 18 - 1,173 25 North Natomas 32,864 3,721 (5,738) 30,847 4,064 Park Development 1,515 395 (384) 1,526 438 Subtotal, other long-term liabilities 1,606,309 298,573 (247,186) 1,657,696 56,102 Total governmental activities 2,066,090$ 298,573$ (264,503)$ 2,100,160$ 74,218$

80 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 7 – LONG-TERM LIABILITIES (Continued)

Activity (Continued)

Beginning Ending Due Within
BUSINESS-TYPE ACTIVITIES: Balance Additions Reductions Balance One Year Revenue and Other Bonds, Public Offerings:
2006 Capital Improvement Revenue Bonds, Series E 85,866$ -$ (6,751)$ 79,115$ 7,104$ Water Revenue Bonds, Series 2013 10,895 - (5,315) 5,580 5,580 Water Revenue Bonds, Series 2017 48,255 - (1,010) 47,245 1,060 Water Revenue Refunding Bonds, Series 2020 181,435 - (29,890) 151,545 1,050 Water Revenue Refunding Bonds, Series 2023 - 20,985 - 20,985 - Wastewater Revenue Bonds, Series 2013 805 - (805) - - Wastewater Revenue Bonds, Series 2019 24,240 - (925) 23,315 975 Wastewater Revenue Refunding Bonds, Series 2020 26,770 - (340) 26,430 1,170 2015 Refunding Revenue Bonds 18,280 - (2,250) 16,030 2,370 2018 TOT Revenue Bonds, Senior Series A 195,815 - - 195,815 510 2018 TOT Revenue Bonds, Senior Series B 8,395 - (4,370) 4,025 4,025 2018 TOT Revenue Bonds, Subordinate Series C 63,275 - (1,325) 61,950 1,390 2019 STID Assessment Revenue Bonds 47,825 - (960) 46,865 1,010 Subtotal, revenue and other bonds, public offerings 711,856 20,985 (53,941) 678,900 26,244 Direct Borrowing Notes Payable:

California Department of Public Health 5,369 - (507) 4,862 520 California Infrastructure and Economic
Development Bank (I-Bank) 1,844 - (98) 1,746 101 Drinking Water State Revolving Fund 129,599
722 (6,054) 124,267 3,063 Subtotal, direct borrowing notes payable 136,812 722 (6,659) 130,875 3,684 Less deferred amounts:

Issuance premiums 53,717 3,106 (3,692) 53,131 3,113 Subtotal, debt, business type activities 902,385 24,813 (64,292) 862,906 33,041 Other Long-term Liabilities:

Accrued compensated absences 9,936 9,667 (8,981) 10,622 654 Lease liabilities 1,870 - (146) 1,724 150 IT subscription liabilities 1,462 819 (849) 1,432 476 Net OPEB liability 36,144 3,398 (2,769) 36,773 - Net pension liability 149,882 20,929 (20,268) 150,543 - Accrued claims and judgments 448 174 - 622 622 Water fee credits 96 - - 96 - Wastewater fee credits 8,450 - (686) 7,764 - Liability for landfill postclosure 3,740 2,396 - 6,136 458 Subtotal, other long-term liabilities 212,028 37,383 (33,699) 215,712 2,360 Total business-type activities 1,114,413 62,196 (97,991) 1,078,618 35,401 Total long-term liabilities 3,180,503$ 360,769$ (362,494)$ 3,178,778$ 109,619$

81 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 7 – LONG-TERM LIABILITIES (Continued)

The following is a list of long-term debt issues outstanding at June 30, 2024, 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

$215,195

$183,380
2006 Capital Improvement Revenue Bonds, Series B (Taxable) Authorized and issued June 15, 2006, due in annual installments of $2,776 to $3,974 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 contai ns 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 $3,633 to $20,589 through December 1, 2033, bearing interest rate s 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 remov ed from the governmental and business-type activities columns of the statement of net positi on. 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 outstandi ng 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. The refunded principal of $166,405 was redeemed September 2023.

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 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 $5,720 as of June 30, 2024. Current year principal and interest paid was $5,719 and water fee revenue was $132,957.

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 Ta x 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 Im provement 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 and 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 outstandin
g principal and any accrued interest may be due and payable immediately.

82 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 7 – LONG-TERM LIABILITIES (Continued)

Revenue and Other Bonds (Continued)

Issued Amount

$272,870

$9,115

$52,610

$195,815

$20,610
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 $81,044 as of June 30, 2024. Current year principal and interest paid was $3,377 and water fee revenue was $132,957.

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 $343,328 as of June 30, 2024.

Current year interest paid was $9,791 and TOT revenue was $34,254. Principal payments begin June 2025.

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 remaini ng to be paid on the bonds is $4,180 as of June 30, 2024. Current year principal and interest paid was $4,690 and TOT revenue was $34,254.

83 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 7 – LONG-TERM LIABILITIES (Continued)

Revenue and Other Bonds (Continued)

Issued Amount

$66,890

$25,960

$50,465

$188,390

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 $107,749 as of June 30, 2024.

Current year principal and interest paid was $4,489 and TOT revenue was $34,254.

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 $33,867 as of June 30, 2024. Current year principal and interest paid was $2,114 and wastewater fee revenue was $45,871.

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 $71,264 as of June 30, 2024. Current year principal and interest paid was $2,740 and STID fee revenue was $4,049.

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 were removed from the Water Fund and government-wide financial statements and redeemed September 2023. In December 2023, the City issued 2023 Water Re funding Revenue Bonds to refund $27,810 of the outstanding 2020 Water Refunding Revenue Bonds. Remaining amount due in annual installments of $5,200 to $12,280 through fiscal ye ar 2043, bearing interest rate of 1% to 3%.

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 $200,240 as of June 30, 2024.

Current year principal and interest paid was $6,834 and water fee revenue was $132,957

84 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 7 – LONG-TERM LIABILITIES (Continued)

Revenue and Other Bonds (Continued)

Issued Amount

$27,970

$20,985

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 0. 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 prin cipal 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 financial statements and were redeemed September 1, 2023. The debt is secured by t he 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 $33,209 as of June 30, 2024. Current year principal and interest paid was $926 and wastewater fee revenue was $45,871.

2023 Water Refunding Revenue Bonds
Authorized November 2023, issued December 2023, due in annual installments of $560 to $4,645 through fiscal year 2043, bearing an interest rate of 5%. Bond proceeds of $24,091 and City contribution of $616 were utilized to refund $27,810 principal amount of outstanding 2020 Water Refunding Revenue Bonds and pay costs of issuance. The target 2020 Water Refunding Revenue Bonds were purchased and cancelled, and liabilities have been removed from the Water Fund and government-wide financial statements. The net carrying value of the old debt exceeded the purchase price by $3,157. The 2023 Refunding reduced total debt service payments by $3,990 and resulted in an economic gain of $2,529 . 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 $31,459 as of June 30, 2024. Interest payments begin September 2024, and principal payments begin September 2025. Water fee revenue was $132,957.

85 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 7 – LONG-TERM LIABILITIES (Continued)

Notes Payable

Issued Amount

$2,220

$3,229

$10,477

$10,000

$2,975

$139,170

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 Califor nia 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 which added accrued interest to the loan balance. After restructuring, the maturity dates of previous ly matured principal and interest amounts have been extended and are no longer past due. The not e 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 installments of approximately $639. The City pledged future Water Enterprise Fund revenue to repay the note. Current year water fee revenue was $132,957.

California Infrastructure and Economic Development (I-Bank) Authorized in December 2007, due in annual 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 Detention Basin. The City pledged future storm drainage fee revenue to repay the note. The note is payable solely from the storm drainage fee revenue through August 2038. Total principal and interest remaining to be paid on the note is $2,203.

Current year principal and interest paid was $160 and storm drainage fee revenue was $62,606. The loan agreement contains a provision 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 2017 and ended June 2022. The total amount claimed by the City and reimbursed by DWSRF was $139,170. The note will be repaid over a 20-year period beginning July 2022, bearing an interest rate of 1.7%. Annual installments will be approximately $8,240. The City has pledged fu ture water fee revenues and the restricted reserve fund to repa
y the note. Current year water fee revenues were $132,957.

86 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 7 – LONG-TERM LIABILITIES (Continued)

Other Long-term Liabilities

Accrued claims and judgments – Estimated liabilities of the City’s workers’ compensation, auto, and general liability self-insurance programs are administered through the Risk Management Internal Service Fund. The first year of salary continuation in the City’s workers’ compensation program is accrued and paid by the City’s General Fund, enterprise funds, and internal service funds.

Lease and IT subscription liabilities – The City has entered into various agreements for the intangible right-to-use lease and IT subscription assets. Lease and IT subscription liabilities are recorded at the present value of future fixed payments for the remaining term of the agreements. 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 postemployment benefits) – The net OPEB liability is $175,102 and $36,773 for governmental activities and business-type activities, respectively, at June 30, 2024. 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 postclosure maintenance and monitoring costs for the closed landfill sites.

Net pension liability – The net pension liability is $1,187,737 and $150,543 for governmental activities and business-type activities, respectively, at June 30, 2024. 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.

87 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(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, 2024.

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

Fiscal Year
Ending June 30, Principal Interest Principal Interest
2025 535 $ 140 $ 15,971 $ 22,079 $ 2026 545 124 16,847 21,203 2027 565 109 17,784 20,279 2028 580 92 18,751 19,318 2029 595 76 19,878 18,301 2030-2034 2,225 128 105,549 74,946 2035-2039 - - 67,620 50,808 2040-2044 - - 55,965 35,427 2045-2049 - - 73,595 17,774 2050 - - 17,293 975 Subtotals 5,045 669 409,253 281,110 Plus: Issuance premiums - - 12,212 - Totals 5,045 $ 669 $ 421,465 $ 281,110 $

Fiscal Year
Ending June 30, Principal Interest
2025 474 $ 733 $
2026 547 710
2027 572 685
2028 599 659
2029 649 633
2030-2034 3,728 2,683
2035-2039 4,907 1,732
2040-2042 4,478 423
Totals 15,954 $ 8,258 $
Revenue and Other Bonds,
Direct Placements
Re
venue and Other Bonds,
Public Offerings
Direct Borrowing
Notes Payable

88 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 7 – LONG-TERM LIABILITIES (Continued)

Future Debt Service Requirements (Continued)

Annual debt service requirements of business-type activities to maturity are as follows:

Fiscal Year
Ending June 30, Principal Interest Principal Interest
2025 26,244$ 29,006$ 3,684$ 1,234$ 2026 27,803 27,624 6,843 2,195 2027 29,001 26,411 6,965 2,072 2028 30,249 25,162 7,090 1,947 2029 32,082 23,860 7,218 1,819 2030-2034 155,871 98,789 37,109 7,109 2035-2039 138,160 69,367 37,966 3,852 2040-2044 145,205 38,845 24,000 719 2045-2049 91,630 11,451 - - 2050 2,655 80 - - Subtotals 678,900 350,595 130,875 20,947 Plus: Issuance premiums 53,131 - - - Totals 732,031$ 350,595$ 130,875$ 20,947$ Revenue and Other Bonds,
Public Offerings
Direct Borrowing
Notes Payable

Arbitrage

The Tax Reform Act of 1986 instituted certain arbitrage re strictions 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, 2024.

Special Assessment Debt

Total matured and unmatured bonds outstanding related to special assessment and special tax districts are $217,726 at June 30, 2024. 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 redevelopment ag ency revenue bonds total $116,887 at June 30, 2024. 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 has a limited commitment and is not liable for repayment of these bonds, and accordingly, they are not reflected in the accompanying basic financial statements.
89 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 8 – PENSION PLANS

Defined Benefit Plan Description

The City of Sacramento provides defined retirement benefits through the California Public Employees’ Retirement System (CalPERS) and the Sacramento City Employees’ Retirement System (SCERS). CalPERS is an agent multiple-employer public employee defined benefit pensi on plan. SCERS is a single-employer defined benefit pension plan.

As of June 30, 2024, 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 (Asset)
Deferred Outflows
of Resources
Deferred Inflows
of Resources

Miscellaneous Plan 497,486$ 138,579 $ 940 $ Safety Plan 844,882 247,864 - SCERS (4,088) - 8,501 Total 1,338,280 $ 386,443 $ 9,441 $

For the fiscal year ended June 30, 2024, the City recognized total pension expense of $215,460 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 qualified 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.

Benefits 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.

90 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(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, 2024, 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 7.37% 8.00%
Required employer contribution rates 26.16% 26.16%
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 10.40% 13.00%
Required employer contribution rates 53.86% 53.86%
Miscellaneous
Safety

Employees Covered – At June 30, 2022, 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 3,463 1,486 Inactive employees entitled to but not yet receiving benefits 4,584 508 Active employees 2,605 1,302
Total 10,652 3,296

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, 2024, the contributions for the miscellaneous and safety plans were $57,577 and $88,147, respectively.

91 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(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, 2023, using an annual actuarial valuation as of June 30, 2022, roll ed forward to June 30, 2023. 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, 2022 actuarial valuations were determined using the following actuarial assumptions:

Miscellaneous Safety
Valuation Date June 30, 2022 June 30, 2022
Measurement Date June 30, 2023 June 30, 2023
Actuarial Cost Method Entry-Age Normal
Cost Method
Entry-Age Normal
Cost Method
Actuarial Assumptions:

Discount Rate 6.90% 6.90%
Inflation 2.30% 2.30%
Payroll Growth 2.80% 2.80%
Projected Salary Increase 3.3% - 14.2% (1) 3.3% - 14.2% (1) Investment Rate of Return 7.00% (2) 7.00% (2)
Mortality 2021 CalPERS
Experience Study
2021 CalPERS
Experience Study
(1) Depending on age, service and type of employment
(2) Net of pension plan investment expenses, including inflation

In 2022, SB 1168 increased the standard retiree lump sum death benefit from $500 to $2,000 for any death occurring on or after July 1, 2023. The impact, if any, is included in the changes of benefit terms.

The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2022 valuation were based on the results of the 2021 CalPERS Experience Study. Further details of the Experience Study can be found on the CalPERS website at https://www.calpers.ca.gov /docs/forms-publications/calpers-experience-study- 2021.pdf.

92 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 8 – PENSION PLANS (Continued)

Net Pension Liability (Continued)

Discount Rate – The discount rate used to measure the total pension liability was 6.90% for each Plan. The projection of cash flows used to deter mine the discount rate assumed that contributions from plan members will be made at current member contribution rates and contributions from employers 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 payments of current plan members. Therefore, the l ong-term expected rate of return on pension plan investments was 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 expected 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 took into account both short-term and long-term market return expectations. Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points.

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

Asset Class
Assumed Asset
Allocation Real Return (1,2)
Global Equity - Cap-weighted 30% 4.54%
Global Equity - Non-Cap-weighted 12% 3.84%
Private Equity 13% 7.28%
Treasury 5% 0.27%
Mortgage-backed Securities 5% 0.50%
Investment Grade Corporates 10% 1.56%
High Yield 5% 2.27%
Emerging Market Debt 5% 2.48%
Private Debt 5% 3.57%
Real Assets 15% 3.21%
Leverage -5% -0.59%
Total 100%
(1) An expected inflation of 2.30% used for this period. (2) Figures are based on the 2021 Asset Liability Management study.

93 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 8 – PENSION PLANS (Continued)

Net Pension Liability (Continued)

Changes in the Net Pension Liability – The changes in the Net Pension Liability for each Plan for the measurement date of June 30, 2023 are as follows:

Miscellaneous Plan:

Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability
Balance at June 30, 2023 1,688,414 $ 1,209,531 $ 478,883 $ Changes in the year:

Service cost 35,817 - 35,817 Interest on the total pension liability 115,991 - 115,991 Changes of benefit terms 2,151 - 2,151 10,582 - 10,582
Contributions - employer - 53,645 (53,645) Contributions - employee - 17,788 (17,788) Net investment income - 75,395 (75,395) (76,064) (76,064) -
Administrative expense - (890) 890 Net changes 88,477 69,874 18,603 Balance at June 30, 2024 1,776,891$ 1,279,405$ 497,486$ Safety Plan:

Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability
Balance at June 30, 2023 2,423,500 $ 1,611,383 $ 812,117 $ Changes in the year:

Service cost 50,781 - 50,781 Interest on the total pension liability 166,574 - 166,574 Changes of benefit terms 798 - 798 23,383 - 23,383
Contributions - employer - 82,172 (82,172) Contributions - employee - 27,327 (27,327) Net investment income - 100,458 (100,458) (117,924) (117,924) -
Administrative expense - (1,186) 1,186 Net changes 123,612 90,847 32,765
Balance at June 30, 2024 2,547,112$ 1,702,230$ 844,882$ Totals of both Miscellaneous and Safety Plans 4,324,003$ 2,981,635$ 1,342,368$ Increase (Decrease)
Benefit payments, including refunds
of employee contributions
Increase (Decrease)
Benefit payments, including refunds
of employee contributions
Differences between expected and
actual experience
Differences between expected and
actual experience

94 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(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 Discount 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 5.90% 5.90% 5.90%
Net Pension Liability 747,009$ 1,205,411$ 1,952,420$ Current Discount Rate 6.90% 6.90% 6.90%
Net Pension Liability 497,486$ 844,882$ 1,342,368$ 1% Increase 7.90% 7.90% 7.90%
Net Pension Liability 292,713$ 551,056$ 843,769$

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, 2024, the City recognized pension expense of $89,743 and $129,472 for the Miscellaneous and Safety Plans, respectively. At June 30, 2024, 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 57,577 $ - $ 88,147$ - $ 145,724$ - $ Changes of assumption 16,638 - 50,174 - 66,812 - Differences between actual and expected experience 6,802 (940) 32,979 - 39,781 (940) Net differences between projected and actual
earnings on plan investments 57,562 - 76,564 - 134,126 - Total 138,579$ (940)$ 247,864$ -$ 386,443$ (940)$ Miscellaneous Plan Safety Plan Total

The amount of $145,724 reported as defe rred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the fiscal year ending June 30, 2025. 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
2025 29,858$ 42,096$ 71,954$ 2026 9,052 31,349 40,401 2027 39,592 74,324 113,916 2028 1,560 11,489 13,049 2029 - 459 459 Total 80,062$ 159,717$ 239,779$

95 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(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.gov/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. 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 – The 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 compensati on times years of service times benefit factor.

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.

96 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(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 Charter Section 175
Charter Section 399
and Equal Shares
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, 2024, the following employees were covered by the benefit terms for each Plan:

Charter
Section 399
Equal
Shares
Charter
Section
175 Total
Inactive members or beneficiaries receiving benefits 679 23 33 735 Inactive members entitled to but not yet receiving benefits 3 - - 3 Active plan members 1 - - 1 Total plan members 683 23 33 739 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 the above plans after one year of retirement. The cost-of-living adjustment was 3% for fiscal year 2024. Me mbers 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 Adjustment – For members participating in Social Se curity, 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, 2024, the active employee contribution rate was 1.15% of annual pay, and the City’s contribution rate was 1608% of covered payroll.

For the fiscal year ended June 30, 2024, the contributions for the SCERS plan were $1,399.

97 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 8 – PENSION PLANS (Continued)

Net Pension Liability (Asset)

The City’s net pension liability (asset) for SCERS was measured as of June 30, 2024 and the total pension liability used to calculate the net pension liability (asset) was determined by an actuarial valuation as of that date.

Actuarial Assumption – The total pension liability in the June 30, 2024 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/Real Estate 37.5% 4.1%
Large Cap Growth 30.0% 7.4%
Equity Income 30.0% 7.4%
International Equity 2.5% 7.4%
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.

98 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 8 – PENSION PLANS (Continued)

Net Pension Liability (Asset) (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, 2024 is as follows:

Total Pension
Liability
Plan Fiduciary Net
Position
Net Pension
Liability (Asset)
Balance at June 30, 2023 261,807 $ 249,966 $ 11,841 $ Changes in the year:

Service cost 1 - 1 Interest on the total pension liability 14,899 - 14,899 Differences between expected and actual
experience (320) - (320) Contributions - employer - 1,399 (1,399) Contributions - employee - 1 (1) Net investment income - 29,109 (29,109) Benefit payments, including refunds of
employee contributions (26,978) (26,978) - Net changes (12,398) 3,531 (15,929) Balance at June 30, 2024 249,409 $ 253,497 $ (4,088) $ Increase (Decrease)

Change of assumptions and changes in experience affecting the measurement of the Total Pension Liability since the prior measurement date – There were no assumption changes. The overall experience gain was due to more deaths than expected, but this was offset by a cost-of-living increase greater than expected.

Sensitivity of the Net Pension Liability (Asset) to Changes in the Discount Rate – The following presents the net pension liability (asset) 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) 14,285$ (4,088)$ (20,273)$

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.gov/Finance/Accounting/Reporting.

99 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 8 – PENSION PLANS (Continued)

Pension Expense and Deferred Inflows of Resources Related to Pensions

For the fiscal year ended June 30, 2024, the City reco gnized pension expense of $(3,755) attributable to the SCERS plans. At June 30, 2024, the Ci ty reported deferred inflows of res ources related to pensions from the following sources:

Deferred
Inflows of
Resources
Net differences between projected and actual
earnings on plan investments 8,501$

Amounts reported as deferred inflows of resources related to pensions will be recognized as increases (decreases) in pension expense as follows:

Fiscal Year Ending
June 30,
Deferred
Inflows
of Resources
2025 (6,074) $
2026 5,295
2027 (4,748)
2028 (2,974)
Total (8,501) $

Defined Contribution Plan

The City also provides defined contribution retirement benefits through 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, 2024, employees contributed $5,736 and the City contributed $4,733 to the 401(a).

NOTE 9 – OTHER 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 $987 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 have been employed with the City by a certain hire date, 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 years 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 certai n date dependent upon the employee’s labor agreement.

The postemployment health, dental and vision care contributions are defined by labor agreements and resolutions approved by the City Council. The City does not issue a separate stand-alone financial report for its OPEB plan.

100
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

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

General Information (Continued)

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.

Employees Covered – At June 30, 2023, 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 3,010 Inactive employees entitled to but not yet receiving benefits 399 Active employees 3,973
Total 7,382

Contributions – 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, 2024 were $23,184.

Net OPEB Liability

The City’s net OPEB liability is measured as the total OPEB liability, less the OPEB plan’s fiduciary net position.

The net OPEB liability is measured as of June 30, 2023, using an annual actuarial valuation as of June 30, 2023, rolled forward to June 30, 2024. A summary of principa l assumptions and methods used to determine the net OPEB liability is shown below.

Actuarial Assumptions – The total OPEB liability in the June 30, 2023 actuarial valuation was determined using the following actuarial assumptions:

Valuation Date June 30, 2023
Measurement Date June 30, 2023
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 - 8.50% for 2025, decreasing to an ultimate rate of 3.45% in 2076.

Medicare (Non-Kaiser) - 7.50% for 2025, decreasing to
an ultimate rate of 3.45% in 2076.

Medicare (Kaiser) - 6.25% for 2025, decreasing to an
ultimate 3.45% in 2076.

Healthcare participation of
future retirees
Varies from 0% to 40% of medical, dental, and/or vision coverage baesd on percent of cash benefit earned at
retirement.

Assumptions based on plan experience.

Mortality and pre-retirement turnover assumptions used in the June 30, 2023 valuation were based on the results of the 2021 CalPERS Experience Study derived from data collected during fi scal years 2000 to 2019. Mortality improvement was projected utilizing Society of Actuaries Scale MP-2021. Further details of the Experience Study can be found on the CalPERS website at https://www.calpers.ca.gov/docs/forms-publications/calpers-experience- study-2021.pdf.
101
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 9 – OTHER POSTEMPLOYMENT 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 retu rn 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 49% 4.56%
Fixed Income 23% 1.56%
Treasury Inflation-Protected Securities (TIPS) 5% -0.08% Commodities 3% 1.22%
Real Estate Investment Trusts (REITs) 20% 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, 2024 are as follows:

Total OPEB Liability
Plan Fiduciary
Net Position
Net OPEB
Liability
Balance at June 30, 2023 277,626$ 71,156$ 206,470$ Changes in the year:

Service cost 5,356 - 5,356 Interest on the total OPEB liability 17,208 - 17,208 698 - 698 Changes of assumptions 11,125 - 11,125 Contributions - employer - 23,167 (23,167) Contributions - employee - - - Net investment income - 5,839 (5,839) (15,321) (15,321) -
Administrative expense - (24) 24 Net changes 19,066 13,661 5,405 Balance at June 30, 2024 296,692$ 84,817$ 211,875$ Increase (Decrease)
Benefit payments
Differences between expected and
actual experience

102
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 9 – OTHER POSTEMPLOYMENT 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 247,415 $ 211,875 $ 182,086 $ Discount Rate

Sensitivity of the Net OPEB 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 Rates Current Trend Rates
1% Increase in
Current Trend Rates
Net OPEB liability 188,388$ 211,875$ 242,371$ Healthcare Cost Trend Rates

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, 2024, the City recognized OPEB expense (income) of $(10,547). At June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Employer contributions subsequent to
measurement date 23,184$ -$
Changes of assumption 11,525 19,817
Differences between actual and expected experience 591 27,029 Net differences between projected and actual
earnings on plan investments 5,924 -
Total 41,224$ 46,846$

103
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

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

Net OPEB Liability (Continued)

The amount of $23,814 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, 2024. 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
2025 (23,048) $
2026 (7,320)
2027 (576)
2028 (590)
2029 1,819
Thereafter 909
Total (28,806)$

NOTE 10 – FUND BALANCE AND NET POSITION AND EXCESS OF EXPENDITURES OVER

APPROPRIATIONS

At June 30, 2024, the government-wide statement of net position reported restricted net position of $482,925 in governmental activities. Of this amount, $51,144 is restricted for enabling legislation.

For the fiscal year ended June 30, 2024, General Fund expenditures for the Fire Department exceeded appropriations by $220, community response by $156, and citywide and community support by $12,584. The overspending was funded by revenue collected in excess of budgeted amounts.

For the fiscal year ended June 30, 2024, Measure U Fund expenditures for citywide and community support exceeded appropriations by $1,758. The overspending wa s funded by revenue collected in excess of budgeted amounts.

For the fiscal year ended June 30, 2024, Transportation and Development Special Revenue Fund expenditures for community development exceeded appropriations by $1,007, capital outlay by $2,169 and debt service by $35.

The overspending was funded by revenue collected in excess of budgeted amounts.

For the fiscal year ended June 30, 2024, Culture and Leisure Fund expenditures for convention and cultural services exceeded appropriations by $6 and debt service by $42. The overspending was funded by revenue collected in excess of budgeted amounts.

For the fiscal year ended June 30, 2024, Parks and Recreation Fund expenditures for youth, parks and community enrichment exceeded appropriations by $208. The overspending was partially funded by revenue collected in excess of budgeted amounts.

For the fiscal year ended June 30, 2024, CCOMWP Fund ex penditures for debt service exceeded appropriations by $55. The overspending was funded by savings in general government expenditures.

104
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 10 – FUND BALANCE AND NET POSITION AND EXCESS OF EXPENDITURES OVER APPROPRIATIONS (Continued)

For the fiscal year ended June 30, 2024, Special Districts Special Revenue Fund expenditures for general government services exceeded appropriations by $408, convention and cultural services by $4,814 and community development by $4. This overspending was funded by revenue collected in excess of budgeted amounts.

The Capital Grants Fund, a capital projects fund, had a deficit fund balance of $17,601 as of June 30, 2024. 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 CCOMWP Fund, a special revenue fund, had a deficit fund balance of $2,213 as of June 30, 2024. The deficit represents grant expenditures unreimbursed by granting agencies within the 60-day period of availability for which corresponding revenues have not been recognized. The def icit will be recovered upon receipt of grantor reimbursements.

The 4th R Child Development Fund, an enterprise fund, had a deficit net position of $2,941 as of June 30, 2024. It is anticipated that this deficit will be funded by future operating subsidies.

The Risk fund, an internal service fund, had a deficit net position of $19,710 as of June 30, 2024. It is anticipated that this deficit will be funded by future operating subsidies.

105
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 11 – INTERFUND TRANSACTIONS

Interfund Transfers

Interfund transfers report the nonreciprocal contribution of resources from one fund to another. The following is a summary of transfers for the fiscal year ended June 30, 2024:

Description Transfers In Transfers Out Net Transfers
Governmental activities:

General Fund Debt service 311 $ (17,117)$ (16,806) $ General Fund In-lieu tax transfers 40,601 - 40,601 General Fund Program support 22,156 (9,094) 13,062 Measure U Fund Program support 596 (343) 253 2015 Golden 1 Center
Lease Revenue Bond Fund Debt service 9,700 - 9,700 Other Governmental Funds Debt service 18,551 (5,221) 13,330 Other Governmental Funds Program support 3,839 (4,571) (732) Internal Service Funds Debt service - (46) (46) Internal Service Funds Program support 10 (16,153) (16,143) Adjustment for transfer of
capital assets
Transfer of capital
assets - (1,243) (1,243) Total governmental activities 95,764 $ (53,788) $ 41,976 $ Business-type activities:

Water Fund Debt service - $ (35) $ (35) $ Water Fund In-lieu tax transfers - (14,124) (14,124) Water Fund Program support 277 (617) (340) Wastewater Fund Debt service - (46) (46) Wastewater Fund In-lieu tax transfers - (4,771) (4,771) Wastewater Fund Program support 385 - 385 Storm Drainage Fund Debt service - (75) (75) Storm Drainage Fund In-lieu tax transfers 25 (6,654) (6,629) Storm Drainage Fund Program support 61 (2,123) (2,062) Solid Waste Fund Debt service - (109) (109) Solid Waste Fund In-lieu tax transfers 80 (10,147) (10,067) Solid Waste Fund Program support 311 - 311 Community Center Fund Debt service 2,688 - 2,688 Community Center Fund In-lieu tax transfers - (2,847) (2,847) Community Center Fund Program support 1 (37) (36) Other Enterprise Funds Debt service - (8,600) (8,600) Other Enterprise Funds In-lieu tax transfers - (2,162) (2,162) Other Enterprise Funds Program support 5,300 - 5,300 Adjustment for transfer of
capital assets
Transfer of capital
assets 1,243 - 1,243
Total business-type activities 10,371$ (52,347)$ (41,976)$

106
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 11 – INTERFUND TRANSACTIONS (Continued)

Interfund Balances

Interfund balances report lending transactions between funds. The following is a summary of interfund balances as of June 30, 2024:

Interfund
Receivables Payables Balances
General Fund - $ (1,237) $ (1,237) $ Other Governmental Funds - (28,040) (28,040) Internal Service Funds 34,020 - 34,020 $ Total governmental activities 34,020 (29,277) 4,743 Community Center Fund - (4,743) (4,743) Total business-type activities - (4,743) (4,743) Total 34,020 $ (34,020) $ - $

$34,020 was loaned by the City’s internal service funds to cover short-term operating deficits (approximately $11,825) and to assist in the development of community resources (approximately $22,195). Included in the $34,020 of interfund loans is $25,579 that is not expected to be repaid within one year.

$8,191 was borrowed by the Capital Grants Fund and the CCOMWP Special Revenue Fund for short-term loans.

$4,849 was borrowed by the Culture and Leisure Fund for the Haggin Oaks renovation project and operating deficit.

$4,743 was borrowed by the Community Center Fund for operational requirements.

$1,237 was borrowed by the General Fund for the acquisition of Habitat Conservation Plan mitigation lands by the Natomas Basin Conservancy.

$15,000 was borrowed by the Economic Development Special Revenue Fund for Stockton Boulevard Housing Development Program.

107
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 12 – RISK MANAGEMENT

The City is exposed to various risks of loss related to t he 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 insurance. Earthquake damage is not included in the property insurance coverage carried by the City.

The Risk Management Internal Service Fund self-insures t he 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 $40,000 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 the estimated ultimate cost of settling claims, including effects 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, 2024, 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, 2024, the Risk Management Internal Service Fund had a deficit net position of $19,710.

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:

2024 2023
Accrued claims and judgments, July 1 134,788$ 111,816$ Incurred claims and adjustment expenses 44,630 45,723 Claim payments (37,003) (22,751)
Accrued claims and judgments, June 30 142,415$ 134,788$

108
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 13 – COMMITMENTS AND CONTINGENCIES

Commitment of Enterprise Fund Revenues

Revenue of the Water Enterprise Fund is pledged to the payment of principal and interest on the California Department of Public Health Note Payable; the Drinki ng Water State Revolving Fund Note Payable; the Water Revenue Bonds, Series 2013; the Water Revenue Bonds , Series 2017, the Water Revenue Refunding Bonds, Series 2020 and the 2023 Water Refunding Revenue Bonds. Revenue of the Wastewater Enterprise Fund is pledged to the payment of principal and interest on the Wastewater Revenue Bonds, Series 2013; the Wastewater Revenue Bonds, Series 2019 and Wastewater Revenue Re funding Bonds, Series 2020. Revenue of the Storm Drainage Enterprise Fund is pledged to the payment of prin cipal 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 Revenue Bonds, Senior Series A, B and Subordinate Series C. Revenue of the Sacramento Tourism Infrastructure District (STID) 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 $133,618 for contracts awarded but not completed as of June 30, 2024. The following table shows the distribution of those commitments among major and nonmajor funds.

Governmental Activities: Business-type Activities:

General Fund 7,266$ Water Fund 15,413$
Measure U 16,828 Wastewater Fund 2,852
Other governmental funds 31,747 Storm Drainage Fund 5,814 Internal service funds 45,168 Solid Waste Fund 5,220 Community Center Fund 2,970
Other enterprise funds 340
Total governmental activities 101,009$ Total business-type activities 32,609$

The major contracts outstanding are $4,428 for replacement of existing Freeport Res 1-MGD pump with new 5 to 6-MGD with electrical improvements needed for proper operation; $2,634 for Citywide cleanup service; $2,413 for implementation of temporary shelter program; $2,372 for replacing three outfall pipes from Sump 151 through the America River levee to the outfall structure; $2,054 for O&E Ctr Hope Coop Operations providing life-saving resources for the most vulnerable members of the communi ty; $2,008 for the construction of a Class I bike trail along the Sacramento Southern Railroad between Sutterville Road and Meadowview Road; $2,001 for installation of motor-controlled valves and drainage system as part of the Ground Water Flush-to-Waste project; and $44,688 for the purchase of vehicles, primarily for the replacement of refuse trucks and garbage trucks.

Contingent Liabilities

The City participates in various f ederal, state, and local grant programs , primarily including Homeless Housing, Assistance and Prevention (HHAP) and the Federal Highway Planning and Construction programs. These programs are subject to financial and compliance audits by the grantors or their r epresentatives. The audits of these programs for earlier years and the fiscal year ended June 30, 2024 have not been completed in all cases; accordingly, final determination of the City’s compliance with applicable grant requirements may be established 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 clai ms would be immaterial to the City’s financial position at June 30, 2024. Receipt of these grant revenues is not assured in the future.

109
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(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 Postclosure 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. Due to the closure of three additional landfill sites in fiscal years 2022 and 2023, and the significant increase in some maintenance costs, the department performed a new study. The new study resulted in an estimated $6,136 in future postclosure monitoring costs as of June 30, 2024. The estimate was based on actual cost for the fiscal years 2022, 2023, and 2024 and may change due to inflation or deflation, technology, or applicable laws and regulations.

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 $997 at June 30, 2023 and $1,020 at J une 30, 2024. Pollution remediation outlays totaled approximately $125 for the year ended June 30, 2024. 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 current 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 obligation 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 circumstanc es of each s ituation, 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 included 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, 2024, 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 & 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. 110
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(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, 2024, five of fifteen members of the Library board were appointed by the City. The current joint powers agreement was effective beginning July 1, 2007. After June 30, 2010, any party may withdraw from the Authority 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, 2024, were $14,272. In addition, the City paid cost reimbursements and program support of $32 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 $9,537 for the fiscal year ended June 30, 2024. 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 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 $5,444 of suppor t to SRFECC during the fiscal year ended June 30, 2024.

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, 2024, the City provided $439 of annual support to the NCRPSTA. Payments for rent and training during the fiscal year ended June 30, 2024 were $34. Financial statements may be obtained from the NCRPSTA Administrative Offices, 2409 Dean Street, Suite 119, McClellan, California, 95652.

111
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

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

JOINTLY GOVERNED ORGANIZATIONS WITH RELATED PARTY TRANSACTIONS

The City participates in several jointly governed organiza tions 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, 2024:

The City provided $174 in annual support and $111 in project/program expenses to the Regional Water Authority.

The City provided $224 in annual support to the Sacramento Groundwater Authority.

The City provided $391 in annual support and $62 in program expenses for Downtown/Riverfront Transit Project to the Sacramento Area Council of Governments.

The City received $164 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 $189 in Workforce Investment Act grants from the Sacramento Employee and Training Agency.

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, a ll 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 be appointed as the Redevelopment Agency Successor Agency (RASA) of the City of Sacramento for the non- housing assets and liabilities of the former Redevelopment Agency (RDA).

The City Council elected not to serve as the successo r agency for the RDA’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 RDA 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 RDA’s liabilities exceeded its assets. Therefore, RASA 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 RASA on February 1, 2012. At June 30, 2024, RASA has a deficit net position of $147,031 which will be eliminated with future property tax revenue distributions from the Redevelopment Property Tax Trust Fund administered by the County Auditor-Controller.

112
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 15 – SUCCESSOR AGENCY TRUST FUND (Continued)

On December 31, 2015, DOF comp leted the review of RASA’s Long -Ranged Property Management Plan (LRPMP). DOF approved the use or disposition of all t he properties 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, 2024, contracts payable of $19,008 reported in the private-purpose trust fund are allocations of the Sacramento Housing Redevelopment Agency’s (SHRA) OPEB and pension unfunded liab ilities 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, 2024:

Beginning
Balance Increases Decreases
Ending
Balance
Capital assets not being depreciated
Land 3,353 $ - $ (10) $ 3,343 $ Depreciable capital assets
Buildings and improvements 102 - - 102 Less accumulated depreciation for:

Buildings and improvements (36) (3) - (39) Depreciable capital assets, net 66 (3) - 63 Total capital assets, net 3,419$ (3)$ (10)$ 3,406$

113
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(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, 2024:

Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Revenue Bonds:
201 5 Tax Allocation Refunding Bonds TE, Series A 30,935$ - $ (3,211)$ 27,724$ 3,205$ Notes Payable:
2003 Del Paso TE TABS, Series A 5,255 21 (1 ) (779) 4,497 770 2005 Merged Downtown TE, Series A 1 24,505 493 (1 ) (1 0,262) 114,736 15,815 2005 Oak Park TE, Series A 2,044 115 (1 ) (9) 2,150 - 2006 65th Street TX Master Lease, Series B 2,825 - (135) 2,690 145 2006 North Sacramento TX Master Lease, Series B 3,295 - (155) 3,140 165 2006 Stockton Blvd Master Lease 1 ,793 - (141) 1,652 148 2008 BOA Public Capital Corporation 1 ,1 03 - (210) 893 215 2009 Army Depot TX Swap 2,270 - (108) 2,162 114 2009 River District TX Swap 2,1 25 - (102) 2,023 106 City of Sacramento CIEDB - Utilities/Detention Basin 922 - (49) 873 51 Globe Mills 1 ,687 - (384) 1,303 409 North Sacramento CIEDB Loan 2,342 - (150) 2,192 154 Stockton Blvd CIEDB Loan 1 ,948 - (126) 1,822 129 Subtotal, notes payable 1 52,1 1 4 629 (12,610) 140,133 18,221 Total, long-term debt 1 83,049$ 629$ (15,821)$ 1 67,857 $ 21 ,426$

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

As of June 30, 2024, accumulated accretion for the 2003 Del Paso TE TABS, Series A, is $3,031, and accumulated accretion for the 2005 Merged Downtown and Oak Park TE, Series A, is $71,647.

Future Debt Service Requirements

Annual debt service requirements to maturity are as follows:

Fiscal Year
Ending June 30, Principal Interest Principal Interest
2025 3,205$ 1,174$ 18,221$ 890$
2026 1,320 1,061 20,609 810 2027 1,380 1,002 18,386 725 2028 1,435 942 17,990 650 2029 1,690 863 17,812 587 2030-2034 12,125 2,826 60,853 1,935 2035-2038 4,500 168 16,814 319 Subtotal 25,655 8,036 170,685 5,916 Less: Unaccreted interest - - (30,552) - Total 25,655$ 8,036$ 140,133$ 5,916$ Revenue Bonds Notes Payable

114
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2024
(dollar amounts expressed in thousands)

NOTE 16 – SERVICE CONCESSION ARRANGEMENT FOR CITY GOLF COURSES

On July 1, 2019, the City entered into a service 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 in stallment payments plus a percentage of gross revenues over the 15-year period. The present value of the installment payments was initially estimated to be $9,180. The City reports a loan receivable and deferred inflow of $5,128 in the government-wide statement of net position as of June 30, 2024.

115

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116
Required
Supplementary
Information

THIS PAGE INTENTIONALLY LEFT BLANK
117
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 2019
Total pension liability
Service cost 23,110$ 22,342$ 23,374$ 27,795$ 28,404$ Interest on the total pension liability 70,942 74,835 79,515 84,334 89,060 Changes of benefit terms - - - - -
Changes of assumptions - (20,153) -
75,970 (7,898)
Differences between expected and actual experience - (8,865) (333) (838) 6,909 Benefit payments, including refunds of employee contributions (30,240) (34,390) (37,980) (42,305) (48,384) Net change in total pens ion liability 63,812 33,769 64,576 144,956 68,091 Total pension liability -- beginning 949,465 1,013,277 1,047,046 1,111,622 1,256,578 Total pension liability -- ending (a) 1,013,277$ 1,047,046$ 1,111,622$ 1,256,578$ 1,324,669$ Plan fiduciary net position
Contributions - employer 21,613$ 22,827$ 25,963$ 28,719$ 29,514$ Contributions - employee 11,670 11,302 11,991 12,190 12,634 Net investment income (loss) 118,326 18,047 4,260 91,481 76,768 Benefit payments, including refunds of employee contributions (30,240) (34,390) (37,980) (42,305) (48,384) Net plan to plan resource movement - (3,066) 531 74 (2) Administrative expense - (922) (496) (1,209) ( 1,413)
Other miscellaneous expense - - - - (2,683) Ne
t change in fiduciary net position 121,369 13,798 4,269 88,950 66,434 Plan fiduciary net position -- beginning 678,261 799,630 813,428 817,697 906,647 Plan fiduciary net position -- ending (b) 799,630$ 813,428$ 817,697$ 906,647$ 973,081$ Net pension liability -- ending (a) - (b) 213,647$ 233,618$ 293,925$ 349,931$ 351,588$ Plan fiduciary net position as a percentage of the total pension liability 78.92% 77.69% 73.56% 72.15% 73.46%
Covered payroll * 156,032$ 157,449$ 166,403$ 176,795$ 181,331$ Net pension liability as a percentage of covered payroll 136.93% 148.38% 176.63% 197.93% 193.89% Meas urement date June 30, 2014 June 30, 2015 June 30, 2016 June 30, 2017 June 30, 2018 Notes to the Required Supplementary Information
* Covered payroll was restated during fiscal year 2016 to reflect the implementation of GASB 82.

Fiscal Year
118
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)
2020 2021 2022 2023 2024
Total pension liability
Service cost 29,053$ 30,236$ 31,307$ 34,966$ 35,817$ Interest on the total pension liability 94,760 99,810 105,037 110,101 115,991 Changes of benefit terms - - - - 2,151
Changes of assumptions - - - 58,232 -
Differences between expected and actual experience 12,970 2,600 3,743 (3,289) 10,582 Benefit payments, including refunds of employee contributions (53,695) (59,069) (63,352) (69,665) (76,064) Net change in total pens ion liability 83,088 73,577 76,735 130,345 88,477 Total pension liability -- beginning 1,324,669 1,407,757 1,481,334 1,558,069 1,688,414 Total pension liability -- ending (a) 1,407,757$ 1,481,334$ 1,558,069$ 1,688,414$ 1,776,891$ Plan fiduciary net position
Contributions - employer 34,102$ 39,118$ 43,930$ 47,273$ 53,645$ Contributions - employee 14,289 15,018 15,899 16,052 17,788 Net investment income (loss) 64,092 51,632 244,522 (99,652) 75,395 Benefit payments, including refunds of employee contributions (53,695) (59,069) (63,352) (69,665) (76,064) Net plan to plan resource movement - - - (2) - Administrative expense (694) (1,454) (
1,076) (820) (890)
Other miscellaneous expense 2 -
- - -
Ne
t change in fiduciary net position 58,096 45,245 239,923 (106,814) 69,874 Plan fiduciary net position -- beginning 973,081 1,031,177 1,076,422 1,316,345 1,209,531 Plan fiduciary net position -- ending (b) 1,031,177$ 1,076,422$ 1,316,345$ 1,209,531$ 1,279,405$ Net pens ion liability -- ending (a) - (b) 376,580$ 404,912$ 241,724$ 478,883$ 497,486$ Plan fiduciary net position as a percentage of the total pension liability 73.25% 72.67% 84.49% 71.64% 72.00%
Covered payroll * 185,823$ 195,700$ 203,030$ 206,537$ 211,684$ Net pension liability as a percentage of covered payroll 202.66% 206.90% 119.06% 231.86% 235.01% Meas urement date June 30, 2019 June 30, 2020 June 30, 2021 June 30, 2022 June 30, 2023 Fiscal Year
119
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 2019
Actuarially determined contributions 22,711$ 26,156$ 30,084$ 26,947$ 33,664$ Contributions in relation to the actuarially determined contributions 22,711 26,156 30,084 26,947 33,664 Contribution deficiency (excess) -$ - $ - $ - $ - $ Covered payroll * 157,449$ 166,403$ 176,795$ 181,331$ 185,823$ Contributions as a percentage of covered payroll 14.42% 15.72% 17.02% 14.86% 18.12% Notes to the Required Supplementary Information
Valuation date: 6/30/2012 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 cost method
Amortization method Level percentage of payroll
Asset valuation method 15 year smoothed fair value
Inflation 2.3%
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
* 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
120
City of Sacramento
Required Supplementary Information
Agent Multiple-Employer Defined Benefit Pension Plan
CalPERS Miscellaneous Plan
Schedule of Contributions
Last Ten Years (in thousands)

2020 2021 2022 2023 2024
Actuarially determined contributions 39,797$ 43,941$ 47,627$ 51,544$ 57,577$ Contributions in relation to the actuarially determined contributions 39,797 43,941 47,627 51,544 57,577 Contribution deficiency (excess) -$ -$ -$ -$ -$ Covered payroll * 195,700$ 203,030$ 206,537$ 211,684$ 249,601$ Contributions as a percentage of covered payroll 20.34% 21.64% 23.06% 24.35% 23.07% Notes to the Required Supplementary Information
Valuation date: 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 Fiscal Year
121
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 2019
Total pension liability
Service cost 29,539$ 29,653$ 31,672$ 37,372$ 38,386$ Interest on the total pension liability 107,189 112,331 118,821 123,132 127,930 Changes of benefit terms - - - - - Changes of assumptions - (28,604) - 107,046 (17,242) Differences between expected and actual experience - (593) 14,398 (15,086) 3,954 Benefit payments, including refunds of employee contributions (66,215) (70,545) (74,572) (78,232) (82,999) Net change in total pension liability 70,513 42,242 90,319 174,232 70,029 Total pension liability -- beginning 1,447,520 1,518,033 1,560,275 1,650,594 1,824,826 Total pension liability -- ending (a) 1,518,033$ 1,560,275$ 1,650,594$ 1,824,826$ 1,894,855$ Plan fiduciary net position
Contributions - employer 27,935$ 30,798$ 36,001$ 40,609$ 41,588$ Contributions - employee 16,094 15,565 18,465 18,980 21,564 Net investment income (loss) 171,795 25,341 4,971 125,586 104,661 Benefit payments, including refunds of employee contributions (66,215) (70,545) (74,572) (78,232) (82,999) Net plan to plan resource movement - 1 - (74) (4) Administrative expense - (1,288) (697) (1,665) (1,922) Other miscellaneous expense - - - - (3,650) N
et change in fiduciary net position 149,609 (128) (15,832) 105,204 79,238 Plan fiduciary net position -- beginning 994,493 1,144,102 1,143,974 1,128,142 1,233,346 Plan fiduciary net position -- ending (b) 1,144,102$ 1,143,974$ 1,128,142$ 1,233,346$ 1,312,584$ Net pension liability -- ending (a) - (b) 373,931$ 416,301$ 522,452$ 591,480$ 582,271$ Plan fiduciary net position as a percentage of the total pension liability 75.37% 73.32% 68.35% 67.59% 69.27%
Covered payroll * 107,176$ 112,067$ 120,120$ 126,438$ 132,206$ Net pension liability as a percentage of covered payroll 348.89% 371.48% 434.94% 467.80% 440.43% Meas urement date June 30, 2014 June 30, 2015 June 30, 2016 June 30, 2017 June 30, 2018 Notes to the Required Supplementary Information
* Covered payroll was restated during fiscal year 2016 to reflect the implementation of GASB 82.

Fis cal Year
122
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)

2020 2021 2022 2023 2024
Total pension liability
Serv ice cost 40,221$ 42,306$ 44,416$ 51,608$ 50,781$ Interest on the total pension liability 136,323 143,878 151,131 158,263 166,574 Changes of benefit terms - - - - 798 Changes of assumptions - - - 80,583 - Differences between expected and actual experience 35,991 20,246 12,441 4,868 23,383 Benefit payments, including refunds of employee contributions (88,688) (95,642) (100,827) (108,473) (117,924) Net change in total pension liability 123,847 110,788 107,161 186,849 123,612 Total pension liability -- beginning 1,894,855 2,018,702 2,129,490 2,236,651 2,423,500 Total pension liability -- ending (a) 2,018,702$ 2,129,490$ 2,236,651$ 2,423,500$ 2,547,112$ Plan fiduciary net position
Contributions - employer 49,875$ 58,584$ 67,242$ 74,645$ 82,172$ Contributions - employee 22,752 23,832 25,904 25,718 27,327 Net investment income (loss) 86,282 69,226 327,345 (133,570) 100,458 Benefit payments, including refunds of employee contributions (88,688) (95,642) (100,827) (108,473) (117,924) Net plan to plan resource movement - - - 2 - Administrative expense (937) (1,947) (1,434) (1,093) (1,186) Other miscellaneous expense 3 - - - - N
et change in fiduciary net position 69,287 54,053 318,230 (142,771) 90,847 Plan fiduciary net position -- beginning 1,312,584 1,381,871 1,435,924 1,754,154 1,611,383 Plan fiduciary net position -- ending (b) 1,381,871$ 1,435,924$ 1,754,154$ 1,611,383$ 1,702,230$ Net pension liability -- ending (a) - (b) 636,831$ 693,566$ 482,497$ 812,117$ 844,882$ Plan fiduciary net position as a percentage of the total pension liability 68.45% 67.43% 78.43% 66.49% 66.83%
Covered payroll * 138,718$ 147,409$ 157,333$ 168,488$ 167,211$ Net pension liability as a percentage of covered payroll 459.08% 470.50% 306.67% 482.00% 505.28% Meas urement date June 30, 2019 June 30, 2020 June 30, 2021 June 30, 2022 June 30, 2023 Fiscal Year
123
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 2019
Actuarially determined contributions 36,638$ 40,959$ 47,222$ 49,102$ 56,327$ Contributions in relation to the actuarially determined contributions 36,638 40,959 47,222 49,102 56,327 Contribution deficiency (excess) -$ - $ - $ - $ -$ Covered payroll * 112,067$ 120,120$ 126,438$ 132,206$ 138,718$ Contributions as a percentage of covered payroll 32.69% 34.10% 37.35% 37.14% 40.61% Notes to the Required Supplementary Information
Valuation date: 6/30/2012 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 cost method
Amortization method Level percentage of payroll
Asset valuation method 15 year smoothed fair value
Inflation 2.3%
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
* 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
124
City of Sacramento
Required Supplementary Information
Agent Multiple-Employer Defined Benefit Pension Plan
CalPERS Safety Plan
Schedule of Contributions
Last Ten Years (in thousands)

2020 2021 2022 2023 2024
Actuarially determined contributions 66,147$ 66,915$ 74,528$ 81,076$ 88,147$ Contributions in relation to the actuarially determined contributions 66,147 66,915 74,528 81,076 88,147 Contribution deficiency (excess) -$ - $ - $ - $ - $ Covered payroll * 147,409$ 157,333$ 168,488$ 167,211$ 187,688$ Contributions as a percentage of covered payroll 44.87% 42.53% 44.23% 48.49% 46.96% Notes to the Required Supplementary Information
Valuation date: 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 Fis cal Year
125
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 (Asset) and Related Ratios Last Ten Years (in thousands)

2015 2016 2017 2018 2019
Total pension liability
Serv ice cost 131$ 103$ 96$ 92$ 66$ Interest on the total pension liability 23,134 23,416 22,759 20,877 20,095 Changes of assumptions 23,117 - (16,246) 862 (927) Differences between expected and actual experience (8,783) (1,173) (3,701) (2,457) 304 Benefit payments, including refunds of employee contributions (33,791) (32,683) (32,171) (31,583) (31,134) Net change in total pension liability 3,808 (10,337) (29,263) (12,209) (11,596) Total pension liability -- beginning 372,670 376,478 366,141 336,878 324,669 Total pension liability -- ending (a) 376,478$ 366,141$ 336,878$ 324,669$ 313,073$ Plan fiduciary net position
Contributions - employer 9,183$ 8,645$ 8,645$ 8,645$ 7,507$ Contributions - employee 82 146 63 55 49 Net investment income (loss) 13,375 7,799 26,803 20,982 18,537 Benefits payments, including refunds of employee contributions (33,791) (32,683) (32,171) (31,583) (31,134) Net change in fiduciary net position (11,151) (16,093) 3,340 (1,901) (5,041) Plan fiduciary net position -- beginning 312,414 301,263 285,170 288,510 286,609 Plan fiduciary net position -- ending (b) 301,263$ 285,170$ 288,510$ 286,609$ 281,568$ Net pension liability (asset)-- ending (a) - (b) 75,215$ 80,971$ 48,368$ 38,060$ 31,505$ Plan fiduciary net position as a percentage of the total pension liability 80.02% 77.89% 85.64% 88.28% 89.94%
Covered payroll * 1,180$ 1,020$ 1,049$ 921$ 678$ Net pension liability (asset) as a percentage of covered payroll 6374.15% 7938.33% 4610.87% 4132.46% 4646.76% Meas urement date June 30, 2015 June 30, 2016 June 30, 2017 June 30, 2018 June 30, 2019 Notes to the Required Supplementary Information
* Covered payroll was restated during fiscal year 2016 to reflect the implementation of GASB 82.

Fis cal Year
126
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 (Asset) and Related Ratios Last Ten Years (in thousands)

2020 2021 2022 2023 2024
Total pension liability
Serv ice cost 49$ 18$ 6$ 5$ 1$ Interest on the total pension liability 19,363 18,342 16,098 15,407 14,899 Changes of assumptions (1,593) 2,673 218 - - Differences between expected and actual experience (3,768) (6,349) 5 3,355 (320) Benefit payments, including refunds of employee contributions (30,457) (28,992) (28,145) (27,501) (26,978) Net change in total pension liability (16,406) (14,308) (11,818) (8,734) (12,398) Total pension liability -- beginning 313,073 296,667 282,359 270,541 261,807 Total pension liability -- ending (a) 296,667$ 282,359$ 270,541$ 261,807$ 249,409$ Plan fiduciary net position
Contributions - employer 4,410$ 3,822$ 3,479$ -$ 1,399$ Contributions - employee 25 16 9 3 1 Net investment income (loss) 7,591 73,150 (32,305) 23,293 29,109 Benefits payments, including refunds of employee contributions (30,457) (28,992) (28,145) (27,501) (26,978) Net change in fiduciary net position (18,431) 47,996 (56,962) (4,205) 3,531 Plan fiduciary net position -- beginning 281,568 263,137 311,133 254,171 249,966 Plan fiduciary net position -- ending (b) 263,137$ 311,133$ 254,171$ 249,966$ 253,497$ Net pension liability (asse t)-- ending (a) - (b) 33, 530$ (28,774)$ 16,370$ 11,841$ (4,088)$ Plan fiduciary net position as a percentage of the total pension liability 88.70% 110.19% 93.95% 95.48% 101.64%
Covered payroll * 362$ 270$ 189$ 103$ 87$ Net pension liability (asset) as a percentage of covered payroll 9262.43% -10657.04% 8661.38% 11496.12% -4698.85% Meas urement date June 30, 2020 June 30, 2021 June 30, 2022 June 30, 2023 June 30, 2024 Fiscal Year
127
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 2019
Actuarially determined contributions 9,183$ 8,645$ 8,330$ 8,267$ 5,268$ Contributions in relation to the actuarially determined contributions 9,183 8,645 8,645 8,645 7,507 Contribution deficiency (excess) -$ - $ (315)$ (378)$ (2,239)$ Covered payroll * 1,180$ 1,020$ 1,049$ 921 $ 678 $ Contributions as a percentage of covered payroll 778% 848% 824% 939% 1107% Notes to the Required Supplementary Information
Valuation date: 6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry age normal
Amortization method Level dollar payments over 11 years, open period Asset valuation method 3 year smoothed fair value
Inflation 2.50%
Salary increases 2.5% CPI plus 0.5% merit
Investment rate of return 6.00%
Retirement age
Mortality
* Cov ered 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/Fi nance/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 2000-2019 Mortality Tables with Scale MP-2021
Fiscal Year
128
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)

2020 2021 2022 2023 2024
Actuarially determined contributions 4,410$ 3,822$ 3,479$ - $ 1,399$ Contributions in relation to the actuarially determined contributions 4,410 3,822 3,479 - 1,399 Contribution deficiency (excess) -$ - $ - $ - $ - $ Covered payroll * 362$ 270 $ 189 $ 103 $ 87$ Contributions as a percentage of covered payroll 1218% 1416% 1841% 0% 1608% Notes to the Required Supplementary Information
Valuation date: 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 Fiscal Year
129
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
Total OPEB liability
Serv ice cost 11,872$ 11,052$ 9,931$ 5,809$ Interest on the total OPEB liability 15,313 16,612 18,106 19,582 Changes of benefit terms - - 383 - Changes of assumptions (24,429) (30,845) (92,281) (4,097) Differences between expected and actual experience - - (28,948) - Benefit payments (12,565) (12,903) (14,890) (15,764) Net change in total OPEB liability (9,809) (16,084) (107,699) 5,530 Total OPEB liability -- beginning 425,766 415,957 399,873 292,174 Total OPEB liability -- ending (a) 415,957$ 399,873$ 292,174$ 297,704$ Plan fiduciary net position
Contributions - employer 21,605$ 21,072$ 18,406$ 24,598$ Contributions - employee 297 308 303 310 Net investment income (loss) 2,034 2,156 2,432 1,064 Benefit payments (12,565) (12,903) (14,890) (15,764) Administrative expense (10) (51) (8) (23) Net change in fiduciary net position 11,361 10,582 6,243 10,185 Plan fiduciary net position -- beginning 15,084 26,445 37,027 43,270 Plan fiduciary net position -- ending (b) 26,445$ 37,027$ 43,270$ 53,455$ Net OPEB liability -- ending (a) - (b) 389,512$ 362,846$ 248,904$ 244,249$ Plan fiduciary net pos ition as a percentage of the total OPEB l
iability 6.36% 9.26% 14.81% 17.96%
Covered-employee payroll 237,926$ 236,885$ 245,622$ 261,187$ Net OPEB liability as a percentage of covered-employee payroll 163.71% 153.17% 101.34% 93.51% Meas urement date June 30, 2017 June 30, 2018 June 30, 2019 June 30, 2020 Notes to the Required Supplementary Information
* Fiscal year 2018 was the first year of implementation, therefore, only seven years are shown.

Fiscal Year
130
City of Sacramento
Required Supplementary Information
Schedule of Changes in Net OPEB Liability and Related Ratios Last Ten Years* (in thousands)

2022 2023 2024
Total OPEB liability
Serv ice cost 5,919$ 5,259$ 5,356$ Interest on the total OPEB liability 19,968 16,803 17,208 Changes of benefit terms - - - Changes of assumptions 3,978 - 11,125 Differences between expected and actual experience (40,332) - 698 Benefit payments (15,625) (16,048) (15,321) Net change in total OPEB liability (26,092) 6,014 19,066 Total OPEB liability -- beginning 297,704 271,612 277,626 Total OPEB liability -- ending (a) 271,612$ 277,626$ 296,692$ Plan fiduciary net position
Contributions - employer 21,687$ 24,675$ 23,167$ Contributions - employee - - - Net inv estment income (loss) 15,311 (12,256) 5,839 Benefit payments (15,625) (16,048) (15,321) Administrative expense (21) (22) (24) Net change in fiduciary net position 21,352 (3,651) 13,661 Plan fiduciary net position -- beginning 53,455 74,807 71,156 Plan fiduciary net position -- ending (b) 74,807$ 71,156$ 84,817$ Net OPEB liability -- ending (a) - (b) 196,805$ 206,470$ 211,875$ Plan fiduciary net pos ition as a percentage of the total OPEB liability 27.54% 25.63% 28.59%
Covered-employee payroll 249,162$ 244,497$ 242,374$ Net OPEB liability as a percentage of covered-employee payroll 78.99% 84.45% 87.42% M
eas urement date June 30, 2021 June 30, 2022 June 30, 2023 Fiscal Year
131
City of Sacramento
Required Supplementary Information
OPEB Schedule of Contributions
Last Ten Years* (in thousands)

2018 2019 2020 2021
Actuarially determined contributions 36,393$ 34,454$ 36,155$ 25,548$ Contributions in relation to the actuarially determined contributions 21,072 18,406 24,598 21,687 Contribution deficiency (excess) 15,321 16,048 11,557 3,861 Covered-employee payroll 236,885$ 245,622$ 261,187$ 249,162$ Contributions as a percentage of covered-employee payroll 8.90% 7.49% 9.42% 8.70% Notes to the Required Supplementary Information
Valuation date: 6/30/2016 6/30/2017 6/30/2017 6/30/2019 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 15 year period Asset valuation method Investment gains and losses spread over 5 year rolling period Inflation 2.50%
Salary Increase 2.75%
Investment rate of return 6.25%
Healthcare cost trend rate
Mortality CalPERS 2000-2019 Experience Study
Mortality Improvement Mortality projected fully generational with Scale MP-2021 * Fiscal year 2018 was the first year of implementation, therefore, only seven years are shown.

Non-Medicare - 6.50% for 2023, decreasing to an ultimate rate of 3.75% for 2076 Medicare (Non-Kaiser) - 5.65% for 2023, decreased to an ultimate rate of 3.75% in 2076 Medicare (Kaiser) - 4.60% for 2022, decreasing to an ultimate rate of 3.75% in 2076 Fiscal Year
132
City of Sacramento
Required Supplementary Information
OPEB Schedule of Contributions
Last Ten Years* (in thousands)

2022 2023 2024
Actuarially determined contributions 26,879$ 22,407$ 23,334$ Contributions in relation to the actuarially determined contributions 24,675 23,167 23,184 Contribution deficiency (excess) 2,204 (760) 150 Covered-employee payroll 244,497$ 242,374$ 238,736$ Contributions as a percentage of covered-employee payroll 10.09% 9.56% 9.71% Notes to the Required Supplementary Information
Valuation date: 6/30/2019 6/30/2021 6/30/2021
Fis cal Year
133

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134

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, 2024
(in thousands)
Other Other Other Total
Special Debt Capital Other
Revenue Service Projects Permanent Governmental
Funds Funds Funds Funds Funds
ASSETS
Cash and investments held by City 201,238$ 2,940$ 248,926$ 7,207$ 460,311$ Cash and investments held by fiscal agent - 61 - - 61
Receivables, net:

Taxes 7,957 - - - 7,957
Accounts 5,508 - 17,343 - 22,851
Loans 26,486 - - - 26,486
Intergovernmental 32,854 10,533 37,888 - 81,275
Leases 905 2,900 - - 3,805
Interest 1,343 25 441 34 1,843
Prepaid items 13 - - - 13
Restricted assets:

Cash and investments held by City 205 - 10,256 - 10,461 Cash and investments held by fiscal agent - 6,112 - - 6,112 Total assets 276,509
$ 22,571$ 314,854$ 7,241$ 621,175$

LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities:

Accounts payable 12,652 $ - $ 27,890$ -$ 40,542$ Accrued payroll 82 - - - 82
Due to other funds 1,813 - 6,378 - 8,191
Deposits 1,856 1,296 80 - 3,232
Unearned revenue 3,187 - 7,900 - 11,087
Advances from other funds 19,849 - - - 19,849
Total liabilities 39,439 1,296 42,248 - 82,983
Deferred inflows of resources:

Unavailable revenue 28,920 10,533 29,663 - 69,116
Leases 882 2,771 - - 3,653
Total deferred inflows of resources 29,802 13,304 29,663 - 72,769 Fund balances:

Nonspendable:

Prepaid items 13 - - - 13
Leases 23 129 - - 152
Permanent fund principal - - - 578 578
Restricted:

Capital projects 32,013 - 260,327 - 292,340
Debt service 205 4,823 - - 5,028
Public works programs 19,326 - - - 19,326
Economic development programs 79,416 - - - 79,416
Other programs 80,995 - 3,024 6,663 90,682
Co
mmitted:

Capital projects 1,460 - - - 1,460
Debt service - 941 - - 941
OPEB 9 - - - 9
Other programs 22,461 - - - 22,461
Assigned:

Debt service - 2,078 - - 2,078
Unassigned (28,653) - (20,408) - (49,061)
Total fund balances 207,268 7,971 242,943 7,241 465,423 Total liabilities, deferred inflows of resources
and fund balances 276,509$ 22,571$ 314,854$ 7,241$ 621,175$ 135
City of Sacramento
Other Governmental Funds
Combining Statement of Revenues, Expenditures
and Changes in Fund Balances
For the Fiscal Year Ended June 30, 2024
(in thousands)
Other Other Other Total
Special Debt Capital Other
Revenue Service Projects Permanent Governmental
Funds Funds Funds Funds Funds
Revenues:

Taxes 14,781$ -$ 1,773$ -$ 16,554$
Intergovernmental 75,654 641 93,114 - 169,409
Charges for services 19,386 - 584 - 19,970
Fines, forfeits and penalties 282 - - - 282
Interest, rents, and concessions 6,191 1,814 7,322 711 16,038 Community service fees 1,464 - 21,999 - 23,463
Assessment levies 63,337 - 1,999 - 65,336
Contributions and donations 6,181 - 884 - 7,065
Total revenues 187,276 2,455 127,675 711 318,117 Expenditures:

Current:

General government 54,505 - 92 189 54,786
Police 6,090 - - - 6,090
Fire 2,711 - - - 2,711
Public works 32,775 - 7,380 - 40,155
Convention and cultural services 15,220 - - - 15,220
Youth, parks, and community enrichment 12,763 - 470 - 13,233 Community development 14,339 - 7,442 - 21,781
Com
munity response 2,676 - - 2,676
Library 9,537 - - - 9,537
Utilities 334 - - - 334
Capital outlay 11,239 - 108,462 - 119,701
Debt service:

Principal 1,358 11,470 7,638 - 20,466
Interest and fiscal charges 1,016 8,868 19 - 9,903
Total expenditures 164,563 20,338 131,503 189 316,593 Excess (deficiency) of revenues over
(under) expenditures 22,713 (17,883) (3,828) 522 1,524 Other financing sources (uses):

Transfers in 1,400 18,048 2,942 - 22,390
Transfers out (8,360) - (1,432) - (9,792)
Issuance of long-term debt 4,427 - 6,111 - 10,538
Total other financing sources (uses) (2,533) 18,048 7,621 - 23,136 Changes in fund balances 20,180 165 3,793 522 24,660
Fund balances, beginning of year 187,088 7,806 239,150 6,719 440,763 Fund balances, end of year 207,268$ 7,971$ 242,943$ 7,241$ 465,423$ 136

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).

THE OPERATING GRANTS FUND is used to account for federal, state and other agency grants received for various specific purposes.

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.

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137
City of Sacramento
Other Special Revenue Funds
Combining Balance Sheet
June 30, 2024
(in thousands)
Transportation Culture and Parks and Economic
and Development Leisure Recreation Development
Fund Fund Fund Fund
ASSETS
Cash and investments held by City 67,961$ 7,158$ 8,796$ 59,993$ Receivables, net:

Taxes - - - 7,957 Accounts 1,077 108 18 12 Loans - - - 26,486 Intergovernmental 1,260 - 1 - Leases - 621 284 - Interest 199 - 3 1,141 Prepaid items - - - - Restricted assets:

Cash and investments held by City - 205 - - Total assets 70,497$ 8,092$ 9,102$ 95,589$

LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities:

Accounts payable 1,108 $ 36 $ 30 $ 1,162 $ Accrued payroll - 12 29 11 Due to other funds - - - - Deposits 1,417 171 - - Unearned revenue 1,052 16 - - Advances from other funds - 4,849 - 15,000 Total liabilities 3,577 5,084 59 16,173 Deferred inflows of resources:

Unavailable revenue 117 10 - - Leases - 605 277 - Total deferred inflows of resources 117 615 277 - Fund balances:

Nonspendable:

Prepaid items - - - - Leases - 16 7 - Restricted:

Capital projects 25,880 14 4,236 - Debt service - 205 - - Public works programs 19,326 - - - Economic development programs - - - 79,416 Other programs - 617 4,420 - Committed:

Capital projects 157 1,303 - - OPEB - 9 - - Other programs 21,440 7
86 235 -
Unassigned - (557) (132) - Total fund balances (deficits) 66,803 2,393 8,766 79,416 Total liabilities, deferred inflows of resources
and fund balances 70,497$ 8,092$ 9,102$ 95,589$