Sacramento City Council
February 10, 2026

City of Sacramento
City Council - 2PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2026-00453 2/10/2026
Fiscal Year (FY) 2024/25 Annual Comprehensive Financial Report (ACFR) File ID: 2026-00453
Location: Citywide
Recommendation: Adopt a Resolution: 1) accepting the Fiscal Year (FY) 2024/25 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: None
Attachments:
1-Description/Analysis
2-Resolution
3-Exhibit A - Annual Comprehensive Financial Report
4-Exhibit B - Auditor’s letter to City Council
5-FY2024/25 Auditor’s Report on Internal Control Over Financial Reporting Description/Analysis
Issue Detail: The City’s FY2024/25 Annual Comprehensive Financial Report (ACFR) presents the City’s financial condition and the results of activities for the fiscal year that ended June 30, 2025. The independent public accounting firm Macias, Gini & O’Connell LLP has audited the ACFR financial statements, as required by the Sacramento City Charter section 117.

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

File ID: 2026-00453 2/10/2026
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 FY2024/25 the City implemented two new accounting and financial reporting standards issued by the Governmental Accounting Standards Board (GASB) in the ACFR:
· Statement No. 101, Compensated Absences.
· Statement No. 102, Certain Risk Disclosures.

General/Measure U Fund Combined FY2024/25 Financial Results The combined FY2024/25 net budgetary results for the General/Measure U Fund resulted in $7.7 million in available fund balance:

Category Performance vs
Budget ($s in 000s)
Operating Results $2.8
Investments Fair Market Gain $12.0
TOTAL $14.8
9/9 Council Action - SPOA Arbitration Costs ($7.1)
GRAND TOTAL $7.7
Major Tax Revenues were above budget by $4.5M driven by Property Tax, Sales and Use Tax, Measure U Sales Tax, Business Operations Tax, and Transient Occupancy Tax results. This helped offset below budget results from the Utility Users Tax and Real Property Transfer Tax.

File ID: 2026-00453 2/10/2026
Major Tax Revenues (millions)
Tax FY2022/23
Actual
FY2023/24
Actual
FY2024/25
Actual
FY2024/25
Amended
Budget
FY2024/25
vs Budget
Property Tax $216.2 $229.7 $239.9 $237.6 $2.3
Sales and Use Tax $115.3 $112.4 $112.8 $111.5 $1.3
Measure U Sales
Tax
$130.5 $134.3 $134.7 $133.2 $1.5
Utility Users Tax $69.5 $64.1 $70.3 $70.4 ($0.1)
Business
Operations Tax
(BOT)
$31.6 $33.4 $31.8 $31.4 $0.4
Real Property
Transfer Tax
$11.8 $10.4 $11.4 $12.4 ($1.0)
Transient
Occupancy Tax
$6.2 $6.9 $7.0 $6.9 $0.1
TOTAL $581.1 $591.2 $607.8 $603.4 $4.5
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 negative versus budget primarily due to higher expenses in the Fire Department.

The fair market gain on investments is a reversal of fair market losses the City incurred in 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.

Although Measure U is a General Purpose tax, the City’s financial statements separate the General Fund and Measure U and more detail on each fund is below:

File ID: 2026-00453 2/10/2026
General Fund FY2024/25 Financial Results
The following schedule summarizes the FY2024/25 net budgetary results for the General Fund:
1 FY2024/25 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 $22.6 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 $23.0 million. General Fund for FY2024/25 was combined with fund 1003 ARPA reinvestment Fund, and fund 1004 Measure L Children fund, fund 1003 also carried an unassigned amount of $4.5 million (see page 24 of the ACFR for additional information). 2 The main cause of the variance in Citywide revenues/expenditure results is that salary savings are budgeted centrally, but the actual savings are reflected in the departmental results.

Revenues
Total General Fund revenue exceeded the FY2024/25 Approved Budget as amended by $26.1� million. Tax revenue was $3.0 million higher than the budget projections, a variance of 1%. Property� Taxes ended higher than projected by $2.3 million, the result of increases in market value and� activity. Other Taxes, including Sales and Use Tax, Property Transfer, Utility User, Business� Operations, and Transient Occupancy Taxes ended lower than projected by $.7 million.� Intergovernmental revenue was $25.0 million higher than the budget projection mainly due to more� federal reimbursement for fire emergency medical services. Charges for services were $24.0 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.

File ID: 2026-00453 2/10/2026
Expenditures
Most operating departments ended FY2024/25 within their budgeted operating expenditure authority.

The City Attorney and Fire 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:

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

Finance - Positive results are primarily due to labor savings from vacant positions and better than� expected revenue associated with unclaimed property.

Fire - Negative results are primarily due to payroll costs including overtime, mainly in the Fire� Suppression division.

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

Measure U Fund FY2024/25 Financial Results
The following schedule summarizes the FY2024/25 net budgetary results which resulted in negative $15.3 million in fund balance:

File ID: 2026-00453 2/10/2026
FY2024/25 Measure U Fund Summary $ in 000s
Measure U sales taxes 1,510$
Department operations 3,961
Other Citywide revenue/expenditure results (1,586)
Fund reserves used during FY24 (21,237)
Unrealized investments fair market gain 2,108
Purchase order closed encumbrances (42)
Unassigned Fund Balance 1 (15,286)$
1 FY2024/25 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 departmental revenues were higher than the FY2024/25 Approved Budget as amended by $3.9 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 FY2024/25 within their budgeted operating expenditure authority.

The Mayor/Council and Convention and Cultural Services departments were the only exceptions.

Details on departments’ year-end results are provided in the chart below. Only departments that received Measure U funding are included in the chart.

Department
Results
($ in 000s)
Mayor/Council (98)$
City Manager 1,525
City Attorney -
Community Development 1,144
Community Response -
Convention and Cultural Services (62)
Fire -
Human Resources -
Information Technology 34
Youth, Parks, and Community Enrichment -
Police 1,359
Public Works 59
Total Results 3,961$

File ID: 2026-00453 2/10/2026
Departments that had significant variances between budget and year-end results have provided the following explanations:

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

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

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

At the end of FY2024/25, the General/Measure U Economic Uncertainty Reserve totaled $76.4 million, 9% of General Fund revenues and $7.5 million below the minimum balance per Council policy. There were no contributions during this fiscal year.

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:

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 FY2024/25 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.

File ID: 2026-00453 2/10/2026
· The public accounting firm Macias Gini & O’Connell LLP has audited the City’s FY2024/25 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, 2025, resulted in one-time resources in the amount of approximately $7.7 million.

This amount includes $12.0 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 $7.7 million is a one-time resource and consistent with Council adopted policy can be utilized to partially offset the projected FY2026/27 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 2024/25 ANNUAL COMPREHENSIVE FINANCIAL REPORT

BACKGROUND
A. The City’s Fiscal Year (FY) 2024/25 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, 2025. 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 2024/25 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, 2025, provided $7.7 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 FY2024/25 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, 2025, 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

KEVIN MCCARTY
Mayor

LISA KAPLAN
Councilmember, District 1

ROGER DICKINSON
Councilmember, District 2

KARINA TALAMANTES
Vice Mayor, District 3

PHIL PLUCKEBAUM
Councilmember, District 4

CAITY MAPLE
Councilmember, District 5

ERIC GUERRA
Mayor Pro Tem, District 6

RICK JENNINGS, II
Councilmember, District 7

MAI VANG
Councilmember, District 8

CITY OF SACRAMENTO FACTS
• The City of Sacramento was founded in 1849 and is the oldest i
ncorporated city in California.
• In 1
920, city voters adopted a Charter (municipal constitution) and a City Council/City Manager form of government.
• The C
ity is divided into eight districts.
• Ele
cted members of the City Council serve a four-year term. • The M
ayor 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 M
ayor and other Councilmembers have an equal vote in
all matters.
• The C
ity of Sacramento currently encompasses approximately
100 square miles.
• The c
urrent estimated population is 527,979, from the State of California, Department of Finance as of January 2025.

Annual Comprehensive
Financial Report
FISCAL YEAR ENDED JUNE 30, 2025 | CITY OF SACRAMENTO, CALIFORNIA 2025 ANNUAL COMPREHENSIVE FINANCIAL REPORT| CITY OF SACRAMENTO, CALIFORNIA

City of Sacramento

California

Annual Comprehensive
Financial Report

Fiscal Year Ended June 30, 2025

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 Heather Pettinar i
Brent Clemens
Svetlana Donkova
Bilal Malik
Susan Nazari
Juliana Wong

CITY OF SACRAMENTO, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
For the Fiscal Year Ended June 30, 2025

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

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

BASIC FINANCIAL STATEMENTS
Government-wide Financial Statements:

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

Balance Sheet - Governmental Funds ......................................................................................................... 24 Reconciliation of the Balance Sheet to the Statement of Net Position – Government al Funds ............................................................................................................................... 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 ........... 116 Schedule of Contributions – CalPERS Miscellaneous Plan ........................................................................... 118 Schedule of Changes in Net Pension Liability and Related Ratios – CalPERS Safety Plan ........................ 120 Schedule of Contributions – CalPERS Safety Plan ........................................................................................ 122 Schedule of Changes in Net Pension Liability (Asset) and Related Ratios – Sacramento City Employees’ Retirement System ..................................................................................... 124 Schedule of Contributions – Sacramento City Employees’ Retirement System ........................................... 126 Schedule of Changes in Net OPEB Liability and Related Ratios ................................................................... 128 Schedule of Contributions – OPEB ................................................................................................................. 130

CITY OF SACRAMENTO, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT

For the Fiscal Year Ended June 30, 2025

TABLE OF CONTENTS, Continued

COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES PAGE

Other Governmental Funds

Combining Balance Sheet .............................................................................................................................. 133 Combining Statement of Revenues, Expenditures and Changes in Fund Balances………….……………..134

Other Special Revenue Funds:

Combining Ba lance Sheet .................................................................................................... 136 Combining Statement of Revenues, Expendi tures and Changes in Fund Balances ......... 138 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual, Transportation and Development Special Revenue Fund ..... 140 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual, Culture and Leisure Special Revenue Fund .......................... 141 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual, Parks and Recreation Special Revenue Fund ....................... 142 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual, CCOMWP Special Revenue Fund ......................................... 143 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual, Special Districts Special Revenue Fund ................................ 144

Other Debt Service Funds:

Combining Ba lance Sheet .................................................................................................... 146 Combining Statement of Revenues, Expendi tures and Changes in Fund Balances ......... 148

Other Capital Projects Funds:

Combining Ba lance Sheet .................................................................................................... 152 Combining Statement of Revenues, Expendi tures and Changes in Fund Balances ......... 154

Permanent Funds:

Combining Balance Sheet .................................................................................................... 157 Combining Statement of Revenues, Expendi tures and Changes in Fund Balances ......... 158

Other Proprietary Funds

Other Enterprise Funds:

Combining Statement of Net Position .................................................................................. 160 Combining Statement of Revenues, Exp enses and Changes in Net Position ................... 163 Combining Statemen t of Cash Flows ................................................................................... 164

Water Fund:

Combining Schedule of Net Position .................................................................................... 168 Combining Schedule of Revenues, Expens es and Changes in Net Position .................... 172 Combining Schedule of Cash Flows .................................................................................... 174

Wastewater Fund:

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

CITY OF SACRAMENTO, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT

For the Fiscal Year Ended June 30, 2025

TABLE OF CONTENTS, Continued

Other Proprietary Funds P A G E

Community Center Fund:

Combining Schedule of Net Position .................................................................................... 192 Combining Schedule of Revenues, Expens es and Changes in Net Position .................... 194 Combining Schedule of Cash Flows .................................................................................... 196

Internal Service Funds:

Combining Statement of Net Position .................................................................................. 202 Combining Statement of Revenues, Exp enses and Changes in Net Position ................... 205 Combining Statemen t of Cash Flows ................................................................................... 206

Other Custodial Funds:

Combining Statement of Fiduciary Net Position .................................................................. 209 Combining Statement of Changes in Fiduciary Net Position .............................................. 210

STATISTICAL SECTION (Unaudited)

Net Position by Component – Last Ten Fiscal Years ..................................................................................... 212 Changes in Net Position – Last Ten Fiscal Years ........................................................................................... 214 Fund Balances, Governmental Funds – Last Ten Fiscal Years ..................................................................... 220 Changes in Fund Balances, Governmental Funds – Last Ten Fiscal Years ................................................. 222 Tax Revenues by Source, Governmental Funds – Last Ten Fiscal Years .................................................... 224 Assessed Value and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years ........................ 225 Direct and Overlapping Property Tax Rates – Last Ten Fiscal Years ........................................................... 226 Principal Property Taxpayers – Current Fiscal Year and Nine Years Ago .................................................... 227 Property Tax Levies and Collections – Last Ten Fiscal Years ....................................................................... 228 Ratios of Outstanding Debt by Type – Last Ten Fiscal Years ........................................................................ 230 Ratios of Net General Bonded Debt Outstanding – Last Ten Fiscal Years ................................................... 232 Direct and Overlapping Governmental Activities Debt – As of June 30, 2025 .............................................. 233 Legal Debt Margin – Last Ten Fiscal Years .................................................................................................... 234 Pledged-Revenue Coverage – Last Ten Fiscal Years ................................................................................... 236 Demographic and Economic Statistics for Sacramento County – Last Ten Years ....................................... 238 Principal Employers – Current Fiscal Year and Nine Years Ago ................................................................... 239 Successor Agency Trust Fund – Assessed Value of Taxable Property – Last Ten Fiscal Years ................ 240 Successor Agency Trust Fund – Top 10 Parcels Appealing Assessed Valuation – At Risk of Reduction – As of June 30, 2025 ............................................................................................... 244 Successor Agency Trust Fund – Principal Property Taxpayers – Current Fiscal Year and Nine Years Ago .................................................................................................. 254 Successor Agency Trust Fund – Debt Coverage Analysis – Last Ten Fiscal Years .................................... 266 Full-time Equivalent Employees by Function/Program – Last Ten Fiscal Years ........................................... 271 Operating Indicators by Function/Program – Last Ten Fiscal Years ............................................................ 272 Capital Asset Statistics by Function/Program – Last Ten Fiscal Years ........................................................ 273
Miscellaneous Statistics - Current Fiscal Year and Nine Years Ago .............................................................. 274 Introductory
Section

Leyne Milstein
Interim City Manager
City Hall
915 I Street, Fifth Floor
Sacramento, CA 95814-2604
916-808-5704
December 19, 2025
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, 2025. 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, 2025. 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, 2025, at 527,979 for the City and 1,604,745 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 basis as part of the primary government because the boards are composed of all City Council members.
 Sacramento City Employees’ Retirement 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 form revenue and expense projections. The local labor market remains robust, but unemployment has increased with the June 2025 unemployment rate for the Sacramento metropolitan area increasing to 5.3% compared to 4.8% a year earlier. The City is closely monitoring Federal Reserve policy and federal trade policy due to their impact on the macroeconomy, housing market, and consumer spending which are key drivers of major City revenue sources such as property tax and sales tax. The City’s major revenue sources continue to grow, however fluctuations in the real estate market, levels of new construction 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 FYs.

B

UDGET INITIATIVES AND LONG-TERM FINANCIAL PLANNING
The FY2025/26 Operating, and Capital Improvement Program (CIP) Budgets (Approved Budget) were approved on June 10, 2025. The Approved Budget is a balanced $1.7 billion spending plan for City programs and services and supports a workforce of almost 5,000 employees. It closed a $62.2 million funding gap by taking a strategic approach to revenue enhancements and expenditure reductions and reflects the input provided by Council, City department heads, and the public. It maintains funding for key priorities such as reducing homelessness through the operation of 1,350 shelter beds despite the reduction in State homelessness funding, the newly established Transportation Safety Team, Streamline Sacramento initiatives, The Old Sacramento waterfront, the Railyards transformation and New Library facilities.

The CIP Budget totals $137.3 million and provides funding to projects across the City, including $15.1 million in the General Funds. Th
e 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 FY2025/26 Budget are based on in-depth analysis and review of Department revenues a nd expense
s 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 Council’s adopted policy, the City will 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%. Furth
er, the policy includes a goal of achieving and maintaining the value of two months of regular ongoing G/MU expenditures in the reserve.

The FY2024/25 Approved Budget suspended approximately $3.3 million of the FY2023/24 EUR contribution and due to the funding gap in FY2024/25, the FY2024/25 EUR transfer to the reserve at year-end was one of the reduction strategies. In lieu of contributing to the EUR in FY2025/26, approximately $3.7 million will be placed in a Federal Funding reserve to partially help the City if the federal government withholds or rescinds federal revenues.

The current EUR balance is $75 million, which is over 9% of FY2024/25 G/MU revenues. The EUR is reported

in the ACFR as committed fund balance in the General Fund and the Measure U Fund. iii
On February 11, 2025, Council adopted a new policy regarding the use of one-time savings from the prior FY
with a goal of matching one-time revenues with one-time expenditures and creating funding mechanisms to balance projected budget deficits, restore the EUR so that the fund balance meets the minimum required level per City policy, and pay down unfunded liabilities.

Under this new policy, when the City has prior year savings, the first use will be to balance the following year’s budget if there is a projected deficit or can be used for strategic one-time investments to grow the City’s revenue base. The next use will be to restore the EUR to the minimum required level under City policy if it does not already meet that criterion. Any remaining funds will be split as follows:
 One-third will go to a new fund dedicated to paying down the City’s unfunded pension liability;  One-third will go to a new fund dedicated to meeting the City’s unfunded capital and deferred maintenance needs; and
 One-third will be available for discretionary one-time uses.

A

WARDS 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, 2024. This marks the 37 th 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 eas ily 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,
iv

Mayor/Council
City Treasurer
John Colville
City Attorney
Susana Alcala Wood
City Clerk
Mindy Cuppy
City Auditor
Farishta Ahrary
Public Safety Accountability
LaTesha Watson
City Manager
Leyne Milstein, Interim
Police
Kathy Lester
Youth, Parks & Community
Enrichment (YPCE)
Jackie Beecham
Fire
Chris Costamagna
Finance
Pete Coletto
Information Technology
Darin ArcolinoCity 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’
Compensation)
Accounting
Budget, Policy and Strategic Planning
Cannabis
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 & Sustainability
Engineering Services
Facilities/Real Property Management
Fleet Management
Maintenance Services
Parking Services
Sacramento Marina
Solid Waste
Transportation
Office of Director (Admin Srvcs)
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, 2025
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
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, 2025
Kevin McCarty
Mayor
Lisa Kaplan
Councilmember, District 1
Caity Maple
Councilmember, District 5
Roger Dickinson
Councilmember, District 2
Eric Guerra
Mayor Pro Tem, District 6
Karina Talamantes
Vice Mayor, District 3
Rick Jennings, II
Councilmember, District 7
Phil Pluckebaum
Councilmember, District 4
Mai Vang
Councilmember, District 8
Leyne Milstein
Interim City Manager
Susana Alcala
Wood
City Attorney
Farishta Ahrary
City Auditor
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, 2024
Executive Director/CEO
vii
THI

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viii
Financial
Section
ww
w.mgocpa.com Macias Gini & O’Connell LLP
500 Capitol Mall, Suite 2200
1 Independent Auditor’s Report
To t
he Honorable Mayor and Members of the
City Council of the City of Sacramento, California
Re
port on the Audit of the Financial Statements
Opi
nions
We hav
e 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 5, 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 5, and the respective changes in financial position , and, where applicable, cash flow s 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.

Bas
is for Opinions
We co
nducted 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.

Em
phasis of Matter
Eff
ective July 1, 2024, the City adopted the provisions of Governmental Accounting Standards Board Statement No. 101, Compensated Absences. The implementation of GASB Statement No. 101 resulted in the restatement of the beginning net position of $9.6 million as detailed in Note 18 to the basic financial statements. Our opinions are not modified with respect to this matter.

Resp
onsibilities of Management for the Financial Statements The
City’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. 2 In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’ s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

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

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

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

Required Supplementary Information
Accounting 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 Sacramento, CA 95814
3 historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

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

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

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards , we have also issued our report dated December 19, 2025, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of 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.

Sacramento, California
December 19, 2025
financial reporting for placing the basic financial statements in an appropriate operational, economic, or TH

IS PAGE INTENTIONALLY LEFT BLANK
4 City of Sacramento
Management’s Discussion and Analysis
(Required Supplementary Information - Unaudited)
For the Fiscal Year Ended June 30, 2025

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, 2025. 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 increased by $203 million in fiscal year 2025, a 7.2 perce nt incr
ease.
 The City’s General Fund revenues were $24 million higher than final budgeted amounts primarily due to Voluntary Rate Ran
ge Program and Ground Emergency Medical Transportation Program revenues received by the City’s Fire Department and a gain in fair value of investments.  The City’s General Fund budgetary expenditures, which include open encumbrances, were $114 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 $47 million due to the multi-year nature of capital projects. Unspent multi-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 $9 million in fiscal ye
ar 2025 primarily due to increases in tax revenue and charges for se rvices, offset by increa
ses in labor and pension costs.

OVERVIEW OF THE FINA NCIAL 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, 2025

Government-wide Financial Statements

The government-wide statements report information about the City using 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; community development; youth, parks, and community enrichment; and general government. Taxes and state and federal grants finance most of these activities.

 Business-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 control over resources that have been segregated for specific activities or objectives. Fund financial st atements 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 police, fire, and public 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 outflows of spendable resources, and (2) the remaining year-end balances available for spending.

Because 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, provide short-term and long-term financial information about the activities the City operates like businesses, 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, or 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 funds.

Investment 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 law. 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 activities are reported in a separate statement of fiduciary net position and a statement of changes in fiduciary net position. The City excludes thes e 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, 2025

FINA

NCIAL 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
2025 2024 2025 2024 2025 2024 Change
Current and other assets 1,558 $ 1,442 $ 723$ 647 $ 2,281 $ 2,089 $ 9.2% Capital assets 1,953 1,921 1,810 1,826 3,763 3,747 0.4% Total assets 3,511 3,363 2,533 2,473 6,044 5,836 3.6%
Deferred outflows of resources 323 386 40 52 363 438 -17.1% Long-term liabilities 2,083 2,101 1,043 1,078 3,126 3,179 -1.7% Other liabilities 142 121 43 43 185 164 12.8%
Total liabilities 2,225 2,222 1,086 1,121 3,311 3,343 -1.0% Deferred inflows of resources 53 78 20 24 73 102 -28.4% Net position
Net investment in
capital assets 1,460 1,409 986 972 2,446 2,381 2.7%
Restricted 542 483 113 99 655 582 12.5%
Unrestricted (446) (443) 368 309 (78) (134) 41.8%
Total net position 1,556$ 1,449 $ 1,467$ 1,380 $ 3,023 $ 2,829 $ 6.9% Note (1) FY24 amounts have not been restated for GASB 101 which was implemented in 2025.

Activities Activities Government
City of Sacramento
Summary of Net Position
As of June 30, 2025 and 2024 (1)
(in millions)
Governmental B
usiness-type Total Primary
Analysis o
f net position
As noted in the financial highlights, total net position of the prima ry government increased by $194 million in fiscal year 2025. Total assets increased by $208 million and total liabilities decreased by $32 million. Deferred outflows of resources and deferred inflows of resources decreased by $75 million and $29 million, respectively.

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

Governmental activities
Current and other assets increased $116 million primarily due to increases in cash and receivables and the recognition of a net pension asset. Cash increased by $58 million due to higher-than-expected tax, intergovernmental, assessment levy, and grant contribution revenues. Receivables increased $38 million primarily due to increases in economic development loans receivable and financing plans receivables. A net pension asset associated with the Sacramento City Employees’ Retirement System (SCERS) was recognized for the first time in fiscal year 2025 for $13 million.

Capital assets of governmental activities increased $
32 million due to continuing development and improvements offset by current year depreciation. Capital asset additi ons include the Railyards Rehabilitation project, Florin Rd Pavement Rehab, Auburn Blvd Bridge Replacement, Fran klin Blvd Complete Street, and the Dixieanne Clean Green Alleys 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, 2025

Deferred outflows of resources decreased $63 million primarily due to a $56 million decrease in deferred outflows related to pensions. The decrease in deferred outflows related to pensions was mainly driven by a decrease in net differences between projected and actual earnings. More detailed information about pension plans is presented in Note 8 to the financial statements.

Long-term liabilities decreased $18 million primarily due to $17 million of payments of existing debt obligations.

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

Other liabilities increased $21 million primarily due to operating grants and special districts accounts payable and financing plans unearned revenue.

Deferred inflows of resources decreased $25 million primarily due to a $24 million decrease in deferred inflows related to OPEB. This decre ase 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 $59 million primarily due to increases in restrictions fo r capital projects, public works programs, and operating grants.

Business-type activities

Current and other assets of business-type activities increased $76 million primarily due to an increase in cash and receivables provided by operational activities. A net pen sion asset associated with SCERS was also recognized for the first time in fiscal year 2025 for $9 million.

Capital assets decreased $16 million due to depreciation exceeding net additions. Major additions include the Med Center Reservoir Rehab and the Freeport Reservoir Pump Replacement projects. More detailed capital asset information is presented in Note 4 to the financial statements.

Deferred outflows of resources decreased $12 million due to a $11 million decrease in deferred outflows related to pensions. This decrease was mainly driven by a decre ase in net differences between projected and actual earnings. More detailed information about pension plans is presented in Note 8 to the financial statements.

Long-term liabilities decreased $35 million primarily due to $33 million of principal payments on existing debt obligations. 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, 2025

Total
Percent
2025 2024 2025 2024 2025 2024 Change
Revenues
Program revenues:

Charges for services 259 $ 223 $ 400 $ 374 $ 659 $ 597 $ 10.4% Operating grants and contributions 98 90 5 5 103 95 8.4% Capital grants and contributions 180 155 19 25 199 180 10.6% General revenues:

Property taxes 255 244 - - 255 244 4.5% Utility users tax 70 64 - - 70 64 9.4% Local sales taxes 135 134 - - 135 134 0.7% Other taxes 53 53 35 34 88 87 1.1% Unrestricted:

Sales taxes shared state revenue 113 113 - - 113 113 0.0% Investment earnings 51 44 32 28 83 72 15.3% Miscellaneous 16 13 - - 16 13 23.1% Total revenues 1,230 1,133 491 466 1,721 1,599 7.6% Expenses
General government 200 173 - - 200 173 15.6% Police 292 284 - - 292 284 2.8% Fire 252
230 - - 252 230 9.6% Public works 130 158 - - 130 158 -17.7% Convention and cultural services 29 31 - - 29 31 -6.5% Youth, parks, community enrichment 90 100 - - 90 100 -10.0% Community development 100 76 - - 100 76 31.6% Community response 22 21 - - 22 21 4.8% Library 25 25 - - 25 25 0.0% Interest on long-term debt 19 17 - - 19 17 11.8% Water - - 134 124 134 124 8.1% Wastewater - - 42 42 42 42 0.0% Storm drainage - - 59 52 59 52 13.5% Solid waste - - 74 72 74 72 2.8% Community center - - 41 39 41 39 5.1% Parking - - 15 14 15 14 7.1% Child development - - 7 6 7 6

16.7%
Total expenses 1
,159 1,115 372 349 1,531 1,464 4.6% Revenue over (under) expenses 71 18 119 117 190 135 40.7% Special items - - 13 - 13 -
-
Transfers 43 42 (43) (42) -
- -
Change in net position 114 60 89 75 203 135 50.4% Net position, beginning of year, as previously reported 1,449 1,389 1,380 1,305 2,829 2,694 5.0% Change in accounting principle (GASB 101) (7) - (
2)
- (9) -
-
Net position, beginning of year, as restated 1,442 1,389 1,378 1,305 2,820 2,694 4. 7%
Net position, end of year 1,556$ 1,449 $ 1,467$ 1,380$ 3,023$ 2,829$ 6.9% Note (1) FY24 amounts have not been restated for GASB 101 which was implemented in 2025.

Activities Activities Government
City of Sacramento
Changes in Net Position
For the Fiscal Years Ended June 30, 2025 and 2024(1)
(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, 2025

Analysis o
f the changes in net position
Total government-wide revenu es of the prim ary government increased $122 million, a 7.6 percent increase compared to the prior fiscal year, and total expenses incr eased $67 million, a 4.6 percent increase compared to the prior fiscal year. These changes are discussed in more detail below.

Governmental activities
Total revenues for governmental activities increased $97 million, an 8.6 percent increase compared to the prior fiscal year. Total expenses increased $44 million, a 3.9 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 transferred out from the General Fund and Sacramento Tourism Infrastructure District (STID) assessment revenues transferred out from the Special Districts Special Revenue Fund.

Revenue
Charges for services revenue increased $36 million primarily due to increases in fees identified during the budget developm
ent process, including building plan check fees; plan review fees; permitting and inspection fees; and street, sidewalk, and curb repair administrative fees. There was an increase in metered parking revenues related to increased rates and enforcement as well as the elimination of free parking on Sundays and holidays. There was also an increase in development fees with the constr uction commencement of the Kaiser Permanente Railyards Medical Center.

Operating grants and contributions re venue increased $8 million primarily d ue to $12 million of funding the City received from the State of Californi a Department of Housing and Community Development for the Encampment Resolution Funding Program to address the experienc e of unsheltered homelessness for people residing in encampments. No such funding was received in fiscal year 2024.

Capital grants and contributions increased by $25 million during fiscal year 2025 compared to fiscal year 2024.

This was mainly from contributions received from the issuance of $31 million in bonds for constructing facilities and infrastructure within Community Facilities District Greenbriar Improvement Area 2.

Property tax revenue increased $11 million due to cont inued increases in Sacramento area commercial and residential real estate property assessed valuations.

The increase of $7 million in investment earnings is mainly attributable to net appreciation in fair value of Pool A investment holdings. The cost of Pool A investment holdings exceeded the fair value by $10 million as of June 30, 2025, compared to $47 million as of June 30, 2024. This $37 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 2024, Pool A investment holdings recognized an overall gain of $30 million.

Expenses
Total governmental activities expenses increased $44 million primarily due to increases in department functional exp
enses. General government, Police, and Fire expenses increased a combined $57 million mainly due to increased labor costs. Community development ex penses increased $24 million due to reimbursements to developers for constructing fac ilities and infrastructure in community facilities dist ricts. This was offset by a $28 million decrease in public works expense, as the City incurred higher than normal costs in fiscal year 2024 with the replacement of traffic signs and signals and unforeseen costs related to severe 2024 winter storms. 10 City of Sacramento
Management’s Discussion and Analysis (Continued)
(Required Supplementary Information - Unaudited)
For the Fiscal Year Ended June 30, 2025

Business-type activities

Total revenues for business-type activities increased $25 million, an 5.4 percent increase compared to the prior fiscal year. Total expenses for business-type activities increased $23 million, a 6.6 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 parking program support received from the General Fund and STID assessment revenues to support Community Center debt service.

Revenue

Charges for services revenue increased $26 million primarily due to an increase in water, wastewater, storm drainage, and solid waste service accounts with the additi on of new development in the current year. There was also a $7 million settlement awarded in the current fiscal year, to be received through 2033 to fund water testing and treatment.

Capital grants and contributions decreased by $6 million primarily due to a decrease in water capital contributions.

Expenses

Water expenses increased $10 million primarily due to a $5 million increase in labor expense in relation to vacancies filled during the current fiscal year. Ther e was also a $3 million increase in services and supplies expense associated with inventory purchases and an increase in liability insurance.

Storm Drainage expenses increased $7 million primarily due to an increase in services and supplies expense in relation to noncapitalized repair and maintenance cost s and the decision to spend Storm Drainage Property Fee revenues. The City had previously held off on spending Storm Drainage Property Fee revenues due to pending litigation.

Special Item

A special item was recognized in the current fiscal year for $13 million in relation to a one-time settlement payout for faulty water meters.

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 $100 million compared to the prior fiscal year. Total expenditures increased $53 million compared to the prior fiscal year. Net other financing sources decreased $21 million compared to the prior fiscal year. These changes are discussed in more detail below.

General Fund

Total General Fund revenue increased $37 million compar ed to the prior fiscal year. Tax revenue increased $16 million primarily due to an increase in the value of the property tax base and an increase in utility users tax. Charges for services increased $10 million primarily due to increased building plan check fees, street sidewalk and curb repair administrative fees, and parking meter receipts with the increase in base hourly parking rate and elimination of free parking on Sundays and holidays. Intergovernmental revenues increased $5 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. Fines, forfeits, and penalties also increased $5 million, primarily due to an increase in parking patrols and citations with the addition of enforcement staff.

11 City of Sacramento
Management’s Discussion and Analysis (Continued)
(Required Supplementary Information - Unaudited)
For the Fiscal Year Ended June 30, 2025

Total General Fund expenditures increased $28 million comp ared to the prior fiscal year. General Government expenditures increased by $7 million and expenditures in Police and Fire departments increased a combined $37 million mainly due to an increase in labor and pension costs. Capital outlay expenditures decreased $22 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 expenditures for fire apparatuses, ambulances, and gurneys; police safety equipment; Fl orin Road pavement rehabilitation; VoIP phone and voicemail system; and the issuance of long-term liabilities for new lease and IT subscription agreements.

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 $24 million higher than final budgeted amounts. Intergovernmental revenue exceeded budget by $25 million primarily due to Voluntary Rate Range Program and Public Provider Ground Emergency Medical Transportation Program revenues received by the City’s Fire Department. Interest, rents, and concessions revenue exceeded budget by $14 million primarily due to a gain in fair value related to the General Fund’s share of Pool A holdings. Fines, forfeits, and penalties exceeded the budget by $6 million due to community development and public works compliance and enforcement revenues.

Charges for services were less than budgeted by $24 million primarily due to emergency medical service revenues.

General Fund budgetary expenditures were $114 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 $47 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 revenues were consistent with the prior fiscal year.

General government expenditures increased by $5 million mainly due to an increase in labor and pension costs.

Community response expenditures increased by $3 million due to an increase in budgeted spending for citywide cleanup efforts and homeless outreach programs. Capita l outlay expenditures increased $2 million due to timing and the multi-year nature of capital projects. Youth, parks, and community enrichment expenditures decreased $9 million due to decreased spending for the Sacramento Youth Works program, youth pop up events, and the youth development plan. With the passing of Measure L, the Sacramento’s Child ren Fund was established within the General Fund where these youth focused expenditures will be shifted to.

2015 Golden 1 Center Lease Revenue Bond Fund

2015 Golden 1 Center Lease Revenue Bond Fund revenues and expenditures were consistent with the prior fiscal year.

Other Governmental Funds

Other governmental fund revenues increased by $63 million primarily due to revenue increases of $24 million for special revenue funds and $38 million for capital projects funds. The increase in special revenue funds revenue is primarily due to the following:

 $13 million increase in charges for services due to plan check fees for new development projects, including the Kaiser Permanente Railyards Medical Center in 2025. Additionally, citywide fees and charges increases were adopted by City Council to align fees for inflation beginning in fiscal year 2025.  $8 million increase in intergovernmental revenues from the Emergency Rental Assi stance and California Natural Resource Agency grant programs.

12 City of Sacramento
Management’s Discussion and Analysis (Continued)
(Required Supplementary Information - Unaudited)
For the Fiscal Year Ended June 30, 2025

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

 An increase in the Special Distri cts Fund due to contributions received from the issuance of Delta Shores CFD 2019-01 IA1, Series 2024 bonds and Greenbriar CFD 2018-03 IA2, Series 2024 bonds for $12 million and $31 million, respectively. Contributions will be used for the development of the two project areas.  $9 million increase in the Financing Plans Fund mainly due to the new Panhandle Development Area fees and a significant increase in commercial and residential permits in the Citywide Low Income Housing Fund.  $15 million decrease in the Capital Grants Fund due to the completion of the Del Rio Trail and Broadway Complete Streets projects in fiscal year 2024.

Other governmental fund expenditures increased by $22 million primarily due to an increase of $28 million in expenditures for capital projects funds. The increase in capital projects funds expenditures is primarily due a $31 million increase in the Special Districts Fund due to expenditures associated with the Greenbriar, Delta Shores and Railyards community facilities districts.

$3 million of financing plan fee credits were issued in fiscal year 2025, in comparison to $6 million in fiscal year 2024. $3 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 operating revenues increased $25 million and operating expenses increased $22 million compared to the prior fiscal year. Net nonoperating revenues (expenses) increased $4 million and capital contributions decreased $7 million compared to the prior fiscal year. These changes are discussed in more detail below.

Water Fund

Water Fund operating revenues increased $12 million primarily due to a $7 million settlement awarded in the current fiscal to fund water testing and treatment. Operating expenses increased $8 million primarily due to a $5 million increase in labor expense as vacancies were filled in the current year and a $3 million increase in services and supplies in relation to an increase in liability insu rance costs and inventory purchases for meter supplies.

Developer fees and capital contributions de creased $9 million in association wi th the Florin Reservoir Back Up Engine, Meadowview Road, and Greenbriar Phase 1 projects. A $13 million special item was recognized in the current fiscal year for a one-time settlement payout for faulty water meters

Wastewater Fund

Wastewater Fund operating revenues, operating expense s, nonoperating revenues (expenses), and developer fees and capital contributions in the current fiscal year were consistent with the prior fiscal year.

Storm Drainage Fund

Storm Drainage Fund operating expenses increased $8 million due to a $7 million increase in services and supplies expense in relation to noncapitalized repair and maintenance costs such as the Sump 151 Outfall Replacement and River District Sump 111 Improvement projects. The City also received a favorable litigation ruling for Storm Drainage Property Fee revenues and elected to increase spending in the current fiscal year.

Solid Waste Fund

Solid Waste Fund operating revenues increased $6 million primarily due to an increase in service agreements, as well as a full fiscal year of rate adjustments effective January 2024.

13 City of Sacramento
Management’s Discussion and Analysis (Continued)
(Required Supplementary Information - Unaudited)
For the Fiscal Year Ended June 30, 2025

Community Center Fund

Community Center Fund operating revenues, operating expenses, and nonoperating revenues (expenses) in the current fiscal year were consistent with the prior fiscal year.

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 grant funding from Natomas Unified School District. Park ing saw an increase of $2 million of revenue due to an increase in parking fees to recover operational cost s, increased enforcement, and an increase in events in Downtown Sacramento.

14 City of Sacramento
Management’s Discussion and Analysis (Continued)
(Required Supplementary Information - Unaudited)
For the Fiscal Year Ended June 30, 2025

CAPITAL ASSET AND DEBT ADMINISTRATION

Capital Assets

As of June 30, 2025, the City had invested $3.8 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 $163 million were offset by current year depreciation/amortization expense of $147 million, resulting in a net increase in capital assets of $16 million.

2025 2024 2025 2024 2025 2024
Capital assets not being depreciated
Land 230 $ 230 $ 50$ 50$ 280 $ 280$ Easements 3 3 - - 3 3 Construction in progress 283 297 431 459 714 756 Depreciable capital assets:

Buildings and improvements 453 409 261 252 714 661 Equipment 11 11 102 96 113 107 Software 3 1 7 7 10 8 Vehicles 101 93 - - 101 93 Transmission and distribution system 3 4 954 958 957 962 Roadway network 506 521 - - 506 521 Streetlight network 196 181 - - 196 181 Parks and park improvements 149 155 - - 149 155 Lease and IT subscription assets, net 15 16 5 4 20 20 Total capital assets 1,953$ 1,921 $ 1,810 $ 1,826 $ 3,763 $ 3,747 $ Activities Activities
Total Primary
City of Sacramento
Ca pita l Asse ts
As of June 30, 2025 and 2024
(net of depreciation, in millions)
Governmental Business-Type
Go
vernment

This year's major capital asset additions include:

 $13 million for the Railyards Rehabilitation Project,  $6 million for the Florin Rd VZ Pavement Rehabilitation Project,  $5 million for the Auburn Blvd Bridge Replacement Project,  $4 million for the Franklin Blvd Complete Street Project,  $4 million for the Dixieanne Clean Green Alleys Project,  Other capital project additions in progress include th e I Street Bridge Replacement Project, the MLK Library Renovation Project, the Renfree Field Phase 1 Design, and the Med Center Reservoir Rehab 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, 2025

The City has $121 million in commitments for contracts awarded but not completed as of June 30, 2025. The major contracts outstanding are $9 million for conceptual design of Sacramento River Water Treatment Plant Expansion Project; $7 million for Martin Luther King Jr. Library renovation; $3 million for Freeport pump replacement; $2 million for rehabilitation of Med Center reserv oir; $2 million for the operation of the southern section of Roseville Road Campus; $2 million for reducing Franklin Blvd from f our to two lanes, add bicycle lanes, and install new landscaping; and $27 million for the purchase of vehicles, pr imarily 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):

2025 2024 2025 2024 2025 2024
Revenue and other bonds, net 409$ 426 $ 703 $ 732 $ 1,112 $ 1,158 $ Notes payable 16 16 124 131 140 147 Total outstanding debt 425$ 442 $ 827 $ 863 $ 1,252 $ 1,305 $ City of Sacramento
Outstanding Debt
As of June 30, 2025 and 2024
(in millions)
Activities Activities Government
Governmental Business-Type Total Primary

Total outstanding debt for governmental activities and business-type acti vities decreased $17 million and $36 million respectively, due to principal payments on existing obligations and amortization of bond premiums.

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 ngs (nr designates not rated) at June 30, 2025, 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  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 Aa3 nr  2018 TOT Revenue Bonds, Subordinate Series C nr A1 nr

16 City of Sacramento
Management’s Discussion and Analysis (Continued)
(Required Supplementary Information - Unaudited)
For the Fiscal Year Ended June 30, 2025

Bond issues: S & P Moody’s Fitch

 Wastewater Revenue Bonds, Series 2019 AA nr AA  2019 STID Assessment Revenue Bonds nr A1 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, 2025 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 large, expanding tax base and diverse regional economy; the City’s continued population growth and above-average education retainment levels; a healthy financial reserve and strong liquidity position, supported by robust re tail and economic activity; and the City’s prudent and comprehensive financial management policies and practices, including proactive steps to address out-year budget gaps and maintain its reserve levels.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET

Economic Factors

The City’s budget forecast assumes continued economic growth. However, recent events have increased economic uncertainty. On April 2, 2025, the federal go vernment announced a reciprocal tariff strategy that has evolved unpredictably over time. Potential supply cost in creases would have major impacts on the City’s budget as it becomes more expensive to maintain current service levels. Additionally, the dollar has fallen while yields on U.S. Treasuries have remained elevated, possibly reflecting the market’s expectation of slower economic growth.

This is a concerning situation, and the City must continue to monitor this volatile economic climate.

Next Year’s Budget

General Fund budget appropriations for fiscal year 2026 are $712 million, an increase of 3.3 percent compared to the fiscal year 2025 approved budget. The City is facing a st ructural 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 2026 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 suspended for fiscal years 2025 and 2026.

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.gov. 17 TH

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18 Government-wide
Financial
Statements
City of Sacramento
Statement of Net Position
June 30, 2025
(in thousands)
Governmental Business-type
Activities Activities Total
ASSETS
Cash and investments 1,042,379$ 525,825$ 1,568,204$ Receivables, net 446,476 106,583 553,059 Internal balances 4,621 (4,621) -
Inventories - 2,799 2,799
Prepaid items 16,365 195 16,560
Restricted cash and investments 34,732 83,634 118,366 Intangible assets - 88 88
Net pension asset 13,017 9,219 22,236
Land and other capital assets not being depreciated/amortized 515,937 480,996 996,933 Other capital assets, net of depreciation/amortization 1,437,535 1,328,728 2,766,263 Total assets 3,511,062 2,533,446 6,044,508

DEFERRED OUTFLOWS OF RESOURCES
Loss on refunding of debt 1,758 7,446 9,204 Pensions 291,054 28,548 319,602
OPEB 30,198 3,732 33,930
Total deferred outflows of resources 323,010 39,726 362,736

LIABILITIES
Payables 120,185 37,886 158,071
Unearned revenue 21,673 4,631 26,304 Long-term liabilities:

Due within one year 102,845 42,196 145,041 Due in more than one year 1,980,268 1,001,206 2,981,474 Total liabilities 2,224,971 1,085,919 3,310,890

DEFERRED INFLOWS OF RESOURCES
Service concession arrangement 4,473 - 4,473
Gain on refunding of debt - 3,091 3,091
Pensions 7,228 3,543 10,771
OPEB 14,581 5,246 19,827
Leases 26,936 8,371 35,307
Total deferred inflows of resources 53,218 20,251 73,469

NET POSITION
Net investment in capital assets 1,460,079 985,382 2,445,461 Restricted for:

Capital projects 287,606 62,135 349,741 Debt service 1,341 - 1,341
Public works programs 50,066 - 50,066
Economic development programs 81,352 - 81,352 Other programs 108,965 51,174 160,139 Trust and endowments:

Expendable 11,674 - 11,674
Nonexpendable 598 - 598
Unrestricted (445,798) 368,311 (77,487) Total net position 1,555,883$ 1,467,002$ 3,022,885$ 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, 2025
(in thousands)
Functions/Programs
Primary government:

Governmental activities:

General government 219,007 $ (19,400) $ 30,614 $ 44,439 $ 427 $ (124,127) $ Police 292,101 - 12,262 7,786 (40) (272,093)
Fire 252,274 - 71,617 2,174 - (178,483)
Public works 130,312 - 70,948 16,927 100,830 58,393 Convention and cultural services 29,170 - 15,808 278 948 (12,136) Youth, parks, and community enrichment 90,092 - 17,984 3,138 12,713 (56,257) Community development 99,966 - 40,324 160 64,831 5,349 Community response 22,000 - - 13,744 - (8,256)
Library 25,095 - - 9,888 - (15,207)
Interest on long-term debt 18,824 - - - - (18,824) Total governmental activities 1,178,841 (19,400) 259,557 98,534 179,709 (621,641) Business-type activities:

Water 126,458 7,564 145,408 4,265 4,479 20,130
Wastewater 40,255 1,465 47,241 18 3,072 8,611
Storm drainage 57,375 2,009 65,121 35 11,055 16,827 Solid waste 69,741 4,377 99,126 390 - 25,398
Community center 39,013 2,497 15,066 - - (26,444) Parking 13,245 1,488 20,861 - - 6,128
Child development 6,989 - 6,948 349 - 308
Total business-type activities 353,076 19,400 399,771 5,057 18,606 50,958 Total primary government 1,531,917$ - $ 659,328 $ 103,591$ 198,315$ (570,683)$ 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, 2025
(in thousands)
Changes in net position:

Net (expense) revenue (621,641)$ 50,958$ (570,683)$ General revenues:

Taxes:

Property taxes 255,397 - 255,397
Utility user taxes 70,306 - 70,306
Local sales tax 134,705 - 134,705
Property transfer tax 11,317 - 11,317
Business operations tax 31,820 - 31,820
Transient occupancy tax 7,023 35,228 42,251
Other taxes 2,508 - 2,508
Unrestricted sales taxes shared state revenue 112,815 - 112,815 Unrestricted investment earnings 51,304 32,129 83,433 Unrestricted miscellaneous 15,667 - 15,667
Gain on reduction in lease liabilities - 25 25
Special item - 13,400 13,400
Transfers 42,901 (42,901) -
Total general revenues and transfers 735,763 37,881 773,644 114,122 88,839 202,961
1,449,379 1,380,102 2,829,481
(7,618) (1,939) (9,557)
1,441,761 1,378,163 2,819,924
Changes in net position
Net position, beginning of year, as previously reported Change in accounting principle (GASB 101)
Net position, beginning of year, as restated
Net position, end of year 1,555,883$ 1,467,002$ 3,022,885$ Primary Government
Total
Governmental
Activities
Business-type
Activities
The notes to the basic financial statements are an integral part of this statement.

21 THI

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22 Fund Financial
Statements
THI

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23 City of Sacramento
Governmental Funds
Balance Sheet
June 30, 2025
(in thousands)
2015 Golden 1 Center
Measure U Lease Revenue
Fund Bond Fund
ASSETS
Cash and investments held by City 319,827$ 60,493$ 8,193$ Cash and investments held by fiscal agent 284 - 577
Receivables, net:

Taxes 36,015 22,770 -
Accounts 21,731 27 2,156
Loans 986 - 131,185
Intergovernmental 8,227 - -
Leases 25,648 - -
Interest 2,617 413 31
Prepaid items 424 1 -
Restricted assets:

Cash and investments held by City - - -
Cash and investments held by fiscal agent - - 18,289
Total assets 415,759$ 83,704$ 160,431$

LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities:

Accounts payable 20,675 $ 7,812$ -$
Accrued payroll 27,683 2,758 -
Matured notes and interest payable - - -
Due to other funds - - -
Deposits 379 - -
Unearned revenue 1,958 - -
Advances from other funds 987 - -
Total liabilities 51,682 10,570 -
Deferred inflows of resources:

Unavailable revenue 5,456 - 131,185
Leases 23,519 - -
Total deferred inflows of resources 28,975 - 131,185
Fund balances:

Nonspendable:

Prepaid items 424 1 -
Leases 2,129 - -
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 58,203 20,665 -
Debt service - - 10,349
Fire programs 25,088 - -
OPEB 7,876 620 -
Set-aside for FY26 Budget 26,850 - -

Other programs 112,416 50,075 -
Assigned:

Debt service - - 608
Other programs
Unassigned 27,503 - -
Total fund balances 335,102 73,134 29,246
Total liabilities, deferred inflows of resources
and fund balances 415,759$ 83,704$ 160,431$
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, 2025
(in thousands)
Other Total
Governmental Governmental
Funds Funds
ASSETS
Cash and investments held by City 507,728$ 896,241$
Cash and investments held by fiscal agent 126 987
Receivables, net:

Taxes 7,533 66,318
Accounts 32,764 56,678
Loans 44,954 177,125
Intergovernmental 84,860 93,087
Leases 3,617 29,265
Interest 2,778 5,839
Prepaid items 13 438
Restricted assets:

Cash and investments held by City 10,784 10,784
Cash and investments held by fiscal agent 5,659 23,948
Total assets 700,816$ 1,360,710$

LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities:

Accounts payable 48,505$ 76,992$
Accrued payroll 83 30,524
Matured notes and interest payable 667 667
Due to other funds 10,909 10,909
Deposits 1,697 2,076
Unearned revenue 19,494 21,452
Advances from other funds 19,278 20,265
Total liabilities 100,633 162,885
Deferred inflows of resources:

Unavailable revenue 84,179 220,820
Leases 3,417 26,936
Total deferred inflows of resources 87,596 247,756
Fund balances:

Nonspendable:

Prepaid items 13 438
Leases 200 2,329
Permanent fund principal 578 578
Restricted:

Capital projects 315,323 315,323
Debt service 5,275 23,564
Public works programs 26,903 26,903
Economic development programs 81,352 81,352
Other programs 117,586 117,586
Committed:
- 76,386
1,400 80,268
733 11,082
- 25,088
8 8,504
- 26,850
Economic uncertainty
Capital projects
Debt service
Fire programs
OPEB
Set-aside for FY26 Budget
Other programs
26,458 188,949
Assigned:

Debt service 2,131 2,739
Other programs 508 508
Unassigned (65,881) (38,378)
Total fund balances 512,587 950,069
Total liabilities, deferred inflows of resources
and fund balances 700,816$ 1,360,710$
The notes to the basic financial statements are an integral part of this statement.

25 THIS P

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26 City of Sacramento
Governmental Funds
Reconciliation of the Balance Sheet to the Statement of Net Position June 30, 2025
(in thousands)
Fund balances - total governmental funds 950,069$
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. 220,820 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. 137
Net pension asset is dedicated for future pension payments and is not reported in the funds. 13,017
Capital assets used in governmental activities are not current financial resources and therefore, are not reported in the funds:

Governmental capital assets 3,816,417
Less: accumulated depreciation/amortization (1,963,731) 1,852,686
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 (4,866)
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 287,710
Deferred outflows related to OPEB 29,687
Deferred inflows related to pensions (7,221)
Deferred inflows related to OPEB (13,940)
Loss on refunding of debt 1,758
297,994
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 (59,312)
Accrued claims and judgments (6,628)
Financing plan fee credits (77,036)
Net pension liability (1,161,324)
Net OPEB liability (161,582)
Pollution remediation obligations (2,138)
Revenue and other bonds payable, net (408,868)
Notes payable (15,480)
Lease liabilities (3,836)
IT subscription liabilities (9,488)
(1,905,692)
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. 131,718 Net position of governmental activities 1,555,883$
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, 2025
(in thousands)
2015 Golden 1 Center
General Measure U Lease Revenue
Fund Fund Bond Fund
Revenues:

Taxes 473,222 $ 134,705$ -$
Intergovernmental 41,846 - -
Charges for services 120,550 - -
Fines, forfeits, and penalties 14,976 - -
Interest, rents, and concessions 20,585 3,667 3,494
Community service fees - - -
Assessment levies 671 - -
Contributions and donations 40 - -
Miscellaneous 460 - -
Total revenues 672,350 138,372 3,494
Expenditures:

Current:

General government 74,093 13,700 -
Police 242,605 9,232 -
Fire 220,062 9,867 -
Public works 23,654 1,923 -
Convention and cultural services 3,535 4,032 -
Youth, parks, and community enrichment 5,765 42,129 -
Community development 34,175 13,245 -
Community response 2,987 15,359 -
Library - 14,272 -
Utilities 71 4,980 -
Citywide and community support 68,367 7,629 -
Capital outlay 22,437 10,585 -
Debt service:

Principal 3,894 374 4,400
Interest and fiscal charges 199 36 7,427
Total expenditures 701,844 147,363 11,827
Excess (deficiency) of revenues over
(under) expenditures (29,494) (8,991) (8,333)
Other financing sources (uses):

Transfers in 67,163 468 9,400
Transfers out (30,836) (984) -
Issuance of long-term debt 1,821 1,599 -
Total other financing sources (uses) 38,148 1,083 9,400 Changes in fund balances 8,654 (7,908) 1,067
Fund balances, beginning of year 326,448 81,042 28,179
Fund balances, end of year 335,102$ 73,134$ 29,246$
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, 2025
(in thousands)
Other Total
Governmental Governmental
Funds Funds
Revenues:

Taxes 18,682$ 626,609$
Intergovernmental 162,393 204,239
Charges for services 31,964 152,514
Fines, forfeits, and penalties 202
15,178
Interest, rents, and concessions 22,916 50,662
Community service fees 31,933 31,933
Assessment levies 69,197 69,868
Contributions and donations 44,098 44,138
Miscellaneous 94 554
Total revenues 381,479 1,195,695
Expenditures:

Current:

General government 52,119 139,912
Police 7,631 259,468
Fire 4,307 234,236
Public works 37,906 63,483
Convention and cultural services 13,033
20,600
Youth, parks, and community enrichment 13,573 61,467
Community development 45,365 92,785
Community response 3,048 21,394
Library 9,888 24,160
Utilities 421 5,472
Citywide and community support - 75,996
Capital outlay 120,597 153,619
Debt service:

Principal 18,521 27,189
Interest and fiscal charges 12,126 19,788
Total expenditures 338,535 1,199,569
Excess (deficiency) of revenues over
(under) expenditures 42,944 (3,874)
Other financing sources (uses):

Transfers in 28,080 105,111
Transfers out (28,229) (60,049)
Issuance of long-term debt 4,369 7,789
Total other financing sources (uses) 4,220 52,851
Changes in fund balances 47,164 48,977
Fund balances, beginning of year 465,423 901,092
Fund balances, end of year 512,587$ 950,069$
The notes to the basic financial statements are an integral part of this statement.

29 THIS P

AGE 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, 2025
(in thousands)
Changes in fund balances - total governmental funds 48,977$ 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 95,371
Depreciation/amortization expense (78,825)
16,546
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 10,362
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 (7,789)
Principal repayments on long-term debt 27,189
19,400
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. 13,181
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 (441)
Accrued claims and judgments (987)
Pension expense (35,941)
Other postemployment benefits 26,396
Pollution remediation (1,118)
Interest 58
Amortization of prepaid bond insurance (17)
Amortization of bond premium 1,136
Amortization of gain/loss on refunding (220)
(11,134)
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. (328)
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. 17,118
Change in net position of governmental activities 114,122$ 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, 2025
(in thousands)
Actual Actual
Amounts - Budget Amounts -
Budgetary Variance with to GAAP GAAP
Final Basis Final Budget Reconciliation Basis
Revenues:

Taxes 466,660 $ 470,204 $ 473,222 $ 3,018$ -$ 473,222$ Intergovernmental 13,826 16,861 41,846 24,985 - 41,846 Charges for services 138,049 144,558 120,550 (24,008) - 120,550 Fines, forfeits and penalties 9,088 9,332 14,976 5,644 - 14,976 Interest, rents, and concessions 5,133 6,960 20,585 13,625 - 20,585 Assessment levies 230 230 671 441 - 671
Contributions and donations - - 40 40 - 40
Miscellaneous 242 240 460 220 - 460
Total revenues 633,228 648,385 672,350 23,965 - 672,350 Expenditures:

Current:

Mayor/Council 9,134 11,057 6,285 4,772 - 6,285
City Auditor 1,324 1,489 940 549 - 940
City Manager 78,438 39,618 21,192 18,426 (5,474) 15,718 City Attorney 15,308 16,814 13,316 3,498 (429) 12,887 City Clerk 3,211 3,093 2,754 339 3 2,757
City Treasurer 1,753 1,765 1,252 513 - 1,252 Finance 12,345 12,419 9,832 2,587 (26) 9,806
Information technology 21,406 21,545 19,254 2,291 (5) 19,249 Human resources 10,371 10,666 5,287 5,379 (88) 5,199 Subtotal - General government 153,290 118,466 80,112 38,354 (6,019) 74,093 Police 247,226 250,553 242,586 7,967 19 242,605
Fire 210,272 220,246 220,048 198 14 220,062
Public works 28,899 29,271 23,979 5,292 (325) 23,654 Convention and cultural services 8,078 8,487 5,467 3,020 (1,932) 3,535 Youth, parks, and community enrichment 7,057 25,033 5,765 19,268 - 5,765 Community development 40,167 41,830 34,719 7,111 (544) 34,175 Community response 2,818 2,969 4,230 (1,261) (1,243) 2,987 Utilities 79 79 71 8 - 71 Citywide and community support 62,257 55,642 68,366 (12,724) 1 68,367 Capital outlay 61,764 74,469 27,254 47,215 (4,817) 22,437 Debt service:

Principal - 3,894 3,894 - - 3,894
Interest and fiscal charges - 168 168 - 31 199 Total expenditures 821,907 831,107 716,659 114,448 (14,815) 701,844 Excess (deficiency) of revenues over
(under) expenditures (188,679) (182,722) (44,309) 138,413 14,815 (29,494) Other financing sources (uses):

Transfers in 40,438 62,958 67,163 4,205 - 67,163
Transfers out (22,181) (31,273) (30,836) 437 - (30,836) Issuance of long-term debt - - - - 1,821 1,821
Total other financing sources (uses) 18,257 31,685 36,327 4,642 1,821 38,148 Changes in fund balance (170,422) (151,037) (7,982) 143,055 16,636 8,654 Fund balance, beginning of year 326,448 326,448 326,448 - - 326,448 Fund balance, end of year 156,026$ 175,411 $ 318,466 $ 143,055 16,636$ 335,102$ 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, 2025
(in thousands)
Actual Actual
Amounts - Budget Amounts -
Budgetary Variance with to GAAP GAAP
Final Basis Final Budget Reconciliation Basis
Revenues:

Taxes 139,094$ 133,195 $ 134,705$ 1,510$ -$ 134,705$ Interest, rents, and concessions 1,250 1,250 3,667 2,417 - 3,667 Total revenues 140,344 134,445 138,372 3,927 - 138,372 Expenditures:

Current:

General government 19,878 17,497 17,788 (291) (4,088) 13,700 Police 12,222 12,355 10,854 1,501 (1,622) 9,232
Fire 10,355 10,949 10,030 919 (163) 9,867
Public works 2,424 2,348 1,969 379 (46) 1,923
Convention and cultural services 4,863 4,928 4,034 894 (2) 4,032 Youth, parks, and community enrichment 45,798 45,063 42,384 2,679 (255) 42,129 Community development 18,171 17,859 13,835 4,024 (590) 13,245 Community response 31,433 37,180 21,080 16,100 (5,721) 15,359 Library 14,272 14,272 14,272 - - 14,272
Utilities 5,403 5,403 4,980 423 - 4,980
Citywide and community support 6,304 6,274 7,629 (1,355) - 7,629 Capital outlay 24,187 27,897 14,473 13,424 (3,888) 10,585 Debt service:

Principal - 374 374 - - 374
Interest and fiscal charges - 35 35 - 1 36 Total expenditures 195,310 202,434 163,737 38,697 (16,374) 147,363 Excess (deficiency) of revenues over
(under) expenditures (54,966) (67,989) (25,365) 42,624 16,374 (8,991) Other financing sources (uses):

Transfers in - 388 468 80 - 468
Transfers out (710) (985) (985) - 1 (984)
Issuance of long-term debt - - - - 1,599 1,599
Total other financing sources (uses) (710) (597) (517) 80 1,600 1,083 Changes in fund balance (55,676) (68,586) (25,882) 42,704 17,974 (7,908) Fund balance, beginning of year 81,042 81,042 81,042 - - 81,042 Fund balance, end of year 25,366$ 12,456 $ 55,160 $ 42,704$ 17,974$ 73,134$ 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, 2025
(in thousands)
Solid Waste
Fund
ASSETS
Current assets:

Cash and investments held by City 234,990 $ 66,228 $ 84,365 $ 77,534 $ Cash and investments held by fiscal agent 80 - - -
Receivables, net:

Taxes - - - -
Accounts 24,553 13,864 13,335 15,142 Loans - - 52 -
Intergovernmental 6,023 1,093 734 - Leases 67 - - 159
Settlement 4,690 - - -
Interest 2,069 503 591 548
Due from other funds - - - -
Inventories 2,327 78 394 -
Prepaid items 144 - - -
Intangible asset, current portion - - - -
Total current assets 274,943 81,766 99,471 93,383 Noncurrent assets:

Restricted assets:

Cash and investments held by City 62,482 7,586 1,528 1,081 Cash and investments held by fiscal agent 639 - - -
Advances to other funds - - - -
Leases receivable 692 - 1,124
Loans receivable 1,000 - 770 -
Settlement receivable 2,637 - - -
Intangible assets - - - -
Net pension asset 3,
015 241 2,303 2,961
Capital assets:

Land 4,297 1,138 17,885 1,133 Buildings and improvements 182,546 58,703 11,849 32,153 Machinery and equipment 123,049 6,360 18,999 14,590 Vehicles - - - -
Transmission and distribution system 945,055 260,004 471,944 - Construction in progress 48,647 5,088 2,795 450 Software 4,023 3,464 3,764 2,801 Easements 134 - 157 -
Intangible right-to-use lease land - - - -
Intangible right-to-use lease buildings - - 177 -
Intangible right-to-use lease equipment 184 - - -
Intangible right-to-use IT subscriptions 1,484 363 194 162 Less: accumulated depreciation/amortization (461,121) (114,011) (271,079) (39,603) Total noncurrent assets 918,763 228,936 261,286 16,852 Total assets 1,193,706 310,702 360,757 110,235

DEFERRED OUTFLOWS OF RESOURCES
Loss on refunding of debt 5,457 1,989 - - Pensions 12,390 3,083 3,514 4,661 OPEB 1,304 390 513 880
Total deferred outflows of resources 19,151 5,462 4,027 5,541 Drainage
Fund
Business-type Activities - Enterprise Funds
Fund Fund
Storm
Water Wastewater
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, 2025
(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
Settlement
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
Settlement receivable
Intangible assets
Net pension asset
Capital assets:

Land
Buildings and improvements
Machinery and equipment
Vehicles
Transmission and distribution system
Construction in progress
Software
Easements
Intangible right-to-use lease land
Intangible right-to-use lease buildings
Intangible right-to-use lease equipment
Intangible right-to-use 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
37,616$ 25,012 $ 525,745 $ 144,335 $ - - 80 816
4,792 - 4,792 -
3,513 857 71,264 12,787
- - 52 -
- - 7,850 -
- 655 881
- - 4,690 -
308 9 4,028 904
- - - 11,159
- - 2,799 -
33 18 195 15,790
- 8 8 -
46,262 26,559 622,384 185,791 2,829 - 75,506 -
7,489 - 8,128 -
- - - 24,636
- 6,803 8,619 -
- - 1,770 -
- - 2,637
- 80 80 -
699 - 9,2
19 20,071 5,825 50,349 -
113,190 66,842 465,283 7,454
4,913 10,310 178,221 813
- - - 231,585
- - 1,677,003 -
372,645 731 430,356 -
59 41 14,152 256
- - 291 -
- 1,978 1,978
1,599 - 1,776 216
- - 184 -
228 767 3,198 583
(76,740) (50,513) (1,013,067) (140,121) 446,982 42,864 1,915,683 125,422 493,244 69,423 2,538,067 311,213 - - 7,446 -
2,609 2,291 28,548 3,344 348 297 3,732 511
2,957 2,588 39,726 3,855 Funds
Activities -
Int
ernal
Service
Business-type Activities - Enterprise Funds
Governmental
Total
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, 2025
(in thousands)
Solid Waste
Fund

LIABILITIES
Current liabilities:

Accounts payable 6,390 14,231 1,088 1,804 Due to other funds - - - -
Accrued payroll 1,728 457 621 627
Accrued compensated absences 2,408 690 959 999 Interest payable 2,852 565 22 27
Liability for landfill postclosure - - - 458
Deposits - 20 - -
Unearned revenue 1,771 - 317 -
Accrued claims and judgments 155 93 121 300
Lease liabilities - - 37 -
IT subscription liabilities 178 63 7 24
Revenue and other bonds payable, net 16,996 2,506 - 1,435 Notes payable 3,649 - 104 -
Total current liabilities 36,127 18,625 3,276 5,674 Noncurrent liabilities:

Accrued compensated absences 2,792 1,013 1,262 1,191 Advances from other funds - - - -
Water fee credits 96 - - -
Wastewater fee credits - 7,527 - -
Net OPEB liability 10,523 3,926 4,401 14,975 Accrued claims and judgments - - - -
Liability for landfill pos
tclosure - - - 5,220
Lease liabilities - - - -
IT subscription liabilities 254 16 15 10
Revenue and other bonds payable, net 288,074 49,288 - 6,206 Notes payable 118,808 - 1,541 -
Net pension liability 53,397 15,830 33,997 23,009 Total noncurrent liabilities 473,944 77,600 41,216 50,611 Total liabilities 510,071 96,225 44,492 56,285

DEFERRED INFLOWS OF RESOURCES
Gain on refunding of debt 2,889 - - 105
Pensions 1,062 277 708 1,244
OPEB 1,630 507 864 2,173
Leases 687 - - 1,250
Total deferred inflows of resources 6,268 784 1,572 4,772

NET POSITION
Net investment in capital assets 421,163 163,503 254,636 4,064 Restricted for:

Capital projects 54,863 7,272 - - Other programs - 242 49,875 1,057
Unrestricted 220,492 48,138 14,209 49,598 Total net position 696,518$ 219,155$ 318,720$ 54,719$ Business-type Activities - Enterprise Funds
Drainage
Fund Fund Fund
Water Wastewater
Storm
(continued) The notes to the basic financial statements are an integral part of this statement.

36 City of Sacramento
Proprietary Funds
Statement of Net Position
June 30, 2025
(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
3,248 2,203 28,964 4,925 250 - 250 -
321 372 4,126 445
336 474 5,866 617
1,212 29 4,707 6
- - 458 -
- 69 89 -
2,143 400 4,631 221
28 9 706 39,812
120 117 274 42
29 50 351 71
8,494 1,357 30,788 -
- - 3,753 -
16,181 5,080 84,963 46,139 531 397 7,186 814
4,371 - 4,371 -
- - 96 -
- - 7,527 -
167 1,436 35,428 4,820
- - - 111,652
- - 5,220 -
1,416 1,4
20 2,836 108
68 568 931 271
322,408 5,909 671,885 -
- - 120,349 -
10,867 12,648 149,748 18,898
339,828 22,378 1,005,577 136,563 356,009 27,458 1,090,540 182,702 - 97 3,091 -
176 76 3,543 7
- 72 5,246 641
- 6,434 8,371 -
176 6,679 20,251 648
115,704 26,314 985,384 98,022 - - 62,135 -
- - 51,174 -
24,312 11,560 368,309 33,696 140,016$ 37,874$ 1,467,002$ 131,718$
Governmental
Business-type Activities - Enterprise Funds
Funds
Activities -
Internal
Service
Total
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, 2025
(in thousands)
Storm
Wastewater Drainage Solid Waste
Fund Fund Fund
Operating revenues:

Charges for services:

User fees and charges 137,940$ 45,543$ 62,324$ 98,761$ Rents and concessions 54 - - 187
Charge to other agencies for contract services - 1,698 2,797 - Miscellaneous 7,414 - - 178
Total operating revenues 145,408 47,241 65,121 99,126 Operating expenses:

Employee services 52,734 16,441 20,132 21,739
Services and supplies 34,885 18,139 27,884 50,656
Depreciation/amortization 30,939 5,438 11,187 1,292
Insurance premiums - - - -
Claims and judgments 254 - 126 274
Total operating expenses 118,812 40,018 59,329 73,961 Operating income (loss) 26,596 7,223 5,792 25,165
Nonoperating revenues (expenses):

Interest and investment revenue 16,384 4,092 4,356 3,764 Transient occupancy taxes - - - -
Revenue from other agencies 4,265 18 35 390
Insurance and other claim recoveries - - - -
Interest expense (12,840) (1,523) (55) (157)
Amortization of bond prepaid insurance (23) - - -
Gain (loss) on disposition of capital assets (2,347) (179) - - Gain on lease forgiveness - - - -
5,439 2,408 4,336 3,997
32,035 9,631 10,128 29,162
4,698 3,072 11,164 -
302 101 247 258
(15,251) (5,132) (6,827) (10,741)
13,400 - - -
35,184 7,672 14,712 18,679
662,139 211,772 304,296 36,369
(805) (289) (288) (329)
661,334 211,483 304,008 36,040
Total nonoperating revenues (expenses)
Income before capital contributions and transfers
Capital contributions
Transfers in
Transfers out
Special item
Changes in net position
Total net position, beginning of year, as previously reported Change in accounting principle (GASB 101)
Total net position, beginning of year, as restated
Total net position, end of year
696,518$ 219,155$ 318,720$ 54,719$ 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, 2025
(in thousands)
Governmental
Activities -
Other Internal
Enterprise Service
Funds Total Funds
Operating revenues:

Charges for services:

User fees and charges 2,804$ 26,633$ 374,005$ 135,643$ Rents and concessions 12,262 1,010 13,513 -
Charge to other agencies for contract services - - 4,495 - Miscellaneous - 166 7,758 8
Total operating revenues 15,066 27,809 399,771 135,651 Operating expenses:

Employee services 9,524 10,753 131,323 15,014
Services and supplies 16,833 8,918 157,315 35,171
Depreciation/amortization 1,436 1,886 52,178 17,745
Insurance premiums - - - 19,822
Claims and judgments 72 4 730 40,757
Total operating expenses 27,865 21,561 341,546 128,509 Operating income (loss) (12,799) 6,248 58,225 7,142
Nonoperating revenues (expenses):

Interest and investment revenue 2,823 710 32,129 8,135 Transient occupancy taxes 35,228 - 35,228 -
Revenue from other agencies - 349 5,057 32
Insurance and other claim recoveries - - - 3,257
Interest expense (13,645) (161) (28,381) (10)
Amortization of bond prepaid insurance - - (23) -
Gain (loss) on disposition of capital assets - - (2,526) 395 Gain on lease forgiveness - 25 25 -
24,406 923 41,509 11,809
11,607 7,171 99,734 18,951
- - 18,934 -
2,690 5,302 8,900 16
(3,795) (10,383) (52,129) (1,849)
- - 13,400 -
10,502 2,090 88,839 17,118
129,633 35,893 1,380,102 114,835
(119) (109) (1,939) (235)
129,514 35,784 1,378,163 114,600
Total nonoperating revenues (expenses)
Income before capital contributions and transfers
Capital contributions
Transfers in
Transfers out
Special item
Changes in net position
Total net position, beginning of year, as previously reported Change in accounting principle (GASB 101)
Total net position, beginning of year, as restated
Total net position, end of year
140,016$ 37,874$ 1,467,002$ 131,718$ 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, 2025
(in thousands)
Storm
Water Wastewater Drainage Solid Waste
Fund Fund Fund Fund
Cash flows from operating activities:

Receipts from customers and users 134,943 $ 45,780 $ 63,864 $ 98,013 $ Receipts from interfund services provided - - - -
Payments to suppliers (21,600) (17,013) (27,951) (50,702) Payments to employees (52,469) (16,428) (20,140) (23,184) Claims and judgments paid (210) (6) (108) (245)
Net cash provided by (used for) operating activities 60,664 12,333 15,665 23,882 Cash flows from noncapital financing activities:

Transient occupancy taxes - - - -
Transfers in from other funds 302 101 247 258 Transfers out to other funds (15,218) (5,088) (6,827) (10,635) Collections on interfund loans - - - -
Loans made to other funds - - - -
Interfund loan repayments - - - -
Loans made to other agencies (1,000) - - -
Intergovernmental revenue received 1,259 18 35 390 Net cash provided by (used for) noncapital financing activities (14,657) (4,969) (6,545) (9,987) Cash flows from capital and related financing activities:

Acquisition and construction of capital assets (11,280) (5,798) (2,634) (403) Proceeds from sale of capital assets - - - -
Principal payments on capital debt (21,466) (2,145) (101) (1,220) Interest payments on capital debt (14,039) (1,720) (61) (348) Principal payments on lease liabilities - - (36) -
Inte
rest payments on lease liabilities - - - -
Principal payments on IT subscription liabilities (492) (92) (40) (56) Interest payments on IT subscription liabilities (8) (4) (1) (1) Transfers in from other funds - - - -
Transfers out to other funds (33) (44) - (106)
Capital contributions received 2,401 1,336 3 - Receipts from leases 42 - - 158
Collection of interest from leases 12 - - 19
Loan repayments received - - 51 -
Cash reimbursement for fee credits - (686) - -
Net cash used for capital and related financing activities (44,863) (9,153) (2,819) (1,957) Cash flows from investing activities:

Collection of interest and investment revenue 15,603 3,912 4,109 3,488 Net increase in cash and cash equivalents 16,747 2,123 10,410 15,426 Cash and cash equivalents, beginning of year 281,444 71,691 75,483 63,189 Cash and cash equivalents, end of year 298,191$ 73,814$ 85,893$ 78,615$ 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, 2025
(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
Loans made to other agencies
Intergovernmental revenue received
Net cash provided by (used for) noncapital financing activities Cash flows from capital and related financing activities:

Acquisition and construction of capital assets
Proceeds from sale of capital assets
Principal payments on capital debt
Interest payments on capital debt
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 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
14,390$ 27,375 $ 384,365 $ - $
- - - 225,134
(17,451) (8,898) (143,615) (144,845) (9,360) (10,601) (132,182) (15,711) (58) (6) (633) (36,844)
(12,479) 7,870 107,935 27,734
34,828 - 34,828 -
- 5,302 6,210 16
(2,695) (2,083) (42,546) (1,804)
- - - 9,134
- - - (10,909)
(250) - (250) -
- - (1,000) -
- 349 2,051 32
31,883 3,568 (707) (3,531)
(651) (753) (21,519) (29,765)
- - - 1,211
(6,935) (1,150) (33,017) -
(14,776) (330) (31,274) -
(63) (89) (188) (32)
(20) (2) (22) -
(52) (51) (
783) (131)
(4) (8) (26) (5)
2,690 - 2,690 -
(1,100) (8,300) (9,583) (45)
- - 3,740 -
- 340 540 -
- 223 254 -
- - 51 -
- - (686) -
(20,911) (10,120) (89,823) (28,767) 2,726 591 30,429 7,818
1,219 1,909 47,834 3,254
46,715 23,103 561,625 141,897
47,934$ 25,012$ 609,459$ 145,151$
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, 2025
(in thousands)
Reconciliation of cash and cash equivalents
to the Statement of Net Position:

Cash and investments held by City 234,990 $ 66,228 $ 84,365 $ 77,534 $ Cash and investments held by fiscal agent 80 - - -
Restricted cash and investments held by City 62,482 7,586 1,528 1,081 Restricted cash and investments held by fiscal agent 639 - - - Total cash and cash equivalents, end of year 298,191$ 73,814$ 85,893$ 78,615$ Reconciliation of operating income (loss) to net
cash provided by (used for) operating activities:

Operating income (loss) 26,596$ 7,223$ 5,792$ 25,165$ Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities:

Depreciation/amortization expense 30,324 5,143 10,898 1,057 Amortization of intangible assets 615 295 289 235
Nonoperating claims and judgments - - - -
Special item 13,400 - - -
Changes in assets, liabilities, and deferred outflows and inflows of resources:

Accounts receivable, net (3,209) (1,481) (1,035) (950) Intergovernmental receivables - - 470 -
Settlement receivable (7,327) - - -
Inventories (530) 20 - -
Prepaid items 343 - - -
Accounts payable 72 1,106 (67) 412
Accrued payroll 320 61 49 82
Accrued compensated absences 152 30 (6) 134
Accrued claims and judgments 44 (19) 18 29
Liability for landfill closure - - - (458)
Deposits (1) 20 - -
Unearned revenue 126 - (692) -
Net pension liability and related deferred outflows/inflows of resources 873 223 373 (890) Net OPEB liability and related deferred outflows/inflows of resources (1,080) (288) (424) (771) Def
erred inflows related to leases (54) - - (163)
Net cash provided by (used for) operating activities 60,664$ 12,333$ 15,665$ 23,882$ Noncash investing, capital and financing activities:

Contributions of capital assets 2,355$ 1,964$ 11,161$ -$ Amortization of bond premium and discount 1,246 296 - 161 Amortization of bond loss on refunding (493) (116) - - Amortization of bond gain on refunding 169 - - 26 Amortization of bond prepaid insurance (23) - - -
Decrease in prepaid items for capital assets - - - -
Capital asset acquisitions on accounts payable 3,982 467 345 31 Loss on disposition of capital assets 2,347 179 - - Right-to-use lease assets obtained in exchange for liabilities - - - - Right-to-use IT subscription assets obtained in exchange for liabilities 603 - - 30 Forgiven lease liability - - - -
Fee credit reimbursement accounts payable - 237 - -
Storm
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, 2025
(in thousands)
Reconciliation of cash and cash equivalents
to the Statement of Net Position:

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

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

Depreciation/amortization expense
Amortization of intangible assets
Nonoperating claims and judgments
Special item
Chan
ges in assets, liabilities, and deferred outflows and inflows of resource Accounts receivable, net
Intergovernmental receivables
Settlement receivable
Inventories
Prepaid items
Accounts payable
Accrued payroll
Accrued compensated absences
Accrued claims and judgments
Liability for landfill closure
Deposits
Unearned revenue
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
Right-to-use lease assets obtained in exchange for liabilities Right-to-use IT subscription assets obtained in exchange for liabilities Forgiven lease liability
Fee credit reimbursement accounts payable
37,616$ 25,012 $ 525,745 $ 144,335 $
- - 80 816
2,829 - 75,506 -
7,489 - 8,128 -
47,934$ 25,012$ 609,459$ 145,151$
(12,799)$ 6,248$ 58,225$ 7,142$
1,436 1,878 50,736 17,679
- 8 1,442 66
- - - (5,034)
- - 13,400 -
(1,227) 11 (7,891) -
- - 470 -
- - (7,327) -
- - (510) -
(33) (18) 292 -
(585) 38 976 (1,363)
82 55 649 39
88 93 491 (55)
14 (2) 84 8,947
- - (458) -
- 22 41 -
551 50 35 17
76 267 922 762
(82) (263) (2,908) (466)
- (517) (
734) -
(12,479)$ 7,870$ 107,935$ 27,734$
-$ -$ 15,480$ -$
1,260 151 3,114 -
- - (609) -
- 24 219 -
- - (23) -
- - - 1,441
260 149 5,234 2,272 - - 2,526 -
1,599 - 1,599 77
- - 633 418
- 25 25 -
- - 237 -
Community 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, 2025
(in thousands)
Pension Private-Purpos e Investment Pool Othe r
Trust Trust Custodial Custodial
Fund Fund Fund Funds
ASSETS
Cash and investments held by City 2,626$ 11,719$ 122,777$ 124,523$ Cash and investments held by fiscal agent - 21,422 - 7,132 Prepaid items - 96 - -
Receivables, net:

Accounts - - - 9
Interest and dividends 1,116 - 669 452
Special assessments - - - 353
Investments, at fair value:

Corporate bonds/notes 67,855 - - -
Equities 15,175 - - -
Exchange traded funds 137,454 - - -
Investment Trust of California (CalTRUST) - - - -
Money market mutual funds 395 - - -
Municipal bonds/notes 22,313 - - -
U.S. agencies 4,590 - - -
U.S. Treasury bonds 3,952 - - -
Restricted assets:

Cash and investments held by City - - - 4,807
Cash and investments held by fiscal agent - - - 22,468 Loans receivable - 2,868 - -
Capital assets:

Land - 3,343 - -
Buildings and improvement
s - 102 - -
Less: accumulated depreciation - (41) - -
Total assets 255,476 39,509 123,446 159,744

DEFERRED OUTFLOWS OF RESOURCES
Loss on refunding of debt - 638 - -

LIABILITIES
Accounts payable 3 1 - -
Benefits payable 2,119 - - -
Due to bondholders - - - 49,067
Interest payable - 184 - -
Contracts payable - 17,906 - -
Bonds payable - 24,217 - -
Notes payable - 127,800 - -
Total liabilities 2,122 170,108 - 49,067

NET POSITION
Restricted for:

Pensions 253,354 - - -
Redevelopment dissolution - (129,961
) - -
Individuals, organizations, and other governments - - 123,446 110,677 Total net position (deficit) 253,354$ (129,961)$ 123,446$ 110,677$ 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, 2025
(in thousands)
Pension Private-Purpos e Investment Pool Othe r
Trust Trust Custodial Custodial
Fund Fund Fund Funds
Additions:

Deposits - $ -$ 96,361$ 2,292$
Property taxes - 27,416 - -
Special assessments - - - 18,556
Capital contributions - - - 10,467
Other income - 11 - -
Contributions:

Employer 1,362 - - -
Employees 1 - - -
Investment income:

From investment activities:

Net appreciation in fair value of investment
s 19,356 - 2,748 3,355
Interest 3,935 1,179 3,363 4,889
Dividends 2,648 - - -
Total investment income 25,939 1,179 6,111 8,244
Investment expenses:

Banking, interest, and fiscal agent expense
s 35 - 280 -
Professional services 1,015 - - -
Total investment expenses 1,050 - 280 -
Net income from investment activities 24,889 1,179 5,831 8,244 Total additions 26,252 28,606 102,192 39,563
Deductions:

Benefit payment
s 26,395 - - -
Withdrawals - - 106,254 45,033
Interest expense - 7,742 - -
Other enforceable obligation payments - 3,752 - -
Loan forgiveness - 40 - -
Paid to bondholders - - - 27,750
Administrative expenses - - - 2,978
Loss on disposal of capital asset - - - -
Depreciation expense - 2 - -
Total deductions 26,395 11,536 106,254 75,761
Changes in net position (143) 17,070 (4,062) (36,198) Net position (deficit), beginning of year 253,497 (147,031 ) 127,508 146,875 Net position (deficit), end of year 253,354$ (129,961)$ 123,446$ 110,677$
The notes to the basic financial statements are an integral part of this statement. 45 THIS P

AGE 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, 2025
(dollar amounts expressed in thousands)
NOTE 1 – SU

MMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

These basic financial statements presen t the financial status of the City and its component units, which are included in the City’s reporting entity because of the significance of their operational or financial relationships with the City.

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

The 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.

The Stadium Area EIFD Public Financing Authority is a City -controlled financing authority established to finance public infrastructure improvements within the Stadium Area EIFD. The Authority is governed by City-appointed officials and is financially dependent on the City.

The Aggie Square EIFD Public Financing Authority is a City-controlled financing authority established to finance public infrastructure improvements supporting the Aggie Square development. The Authority is governed by City- appointed officials and is financially dependent on the City.

Fiduciary Component Unit
Sacramento City Employees’ Retirement System (SCERS) is a single employer pension plan sponsored and administered by the City for City employees, except p ublic safety employees, hired before January 29, 1977 and public safety employees who retired with SCERS benefits before December 30, 1989. Under provisions of the City Charter, SCERS is managed by the Administration, Investment and Fiscal Management Board (the SCERS Board), consisting of the City Manager, City Director of Finance, City Treasurer and two residents of the City appointed by the City Council. Duties of the SCERS Board include the adoption of investment standards for SCERS, the establishment of contribution rates, the adm inistration and investment of funds, the selection of investment advisors, the crediting of interest, and any action relating to the fiscal management of SCERS. Stand- alone financial statements may be obtained at https://www.cityofsacramento.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 applied 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 in the following pages.
47 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(dollar amounts expressed in thousands)
NOTE 1 – SU
MMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Governmental Accounting Standards Implemented During the Fiscal Year Ended June 30, 2025 GASB Statement No. 101 – In June 2022, GASB issued Statement No. 101, Comp ensated 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 new standard requires a liability to be recognized for both: 1) Leave that has not been used which applies to leave attributable to services already rendered, that accumulates, and is more likely than not the be used for time off or otherwise paid in cash or non-cash means; and 2) Leave that has been used, but not yet paid or settled. The applicable provisions were implemented July 1, 2024 and as a result, the City has restated beginning net position.

As part of the adoption of GASB Statement No. 101, the City’s note disclosure presentation reports the net change in liability, as opposed to the net gross increases and decreases. See Note 18.

GASB Statement No. 102 – In December 2023, GASB issued Statement No. 102, Certain Risk Disclosures. The objective of this statement is to provide users of government financial statements with essential information about risks related to a government’s vulnerabilities due to certain concentrations or constraints. A concentration is a lack of diversity related to a significant inflow or outflow or resources. A constraint is an externally or internally imposed limitation on a government’s ability to acquire resources or control spending. The applicable provisions were implemented July 1, 2024 and did not have a material impact to the financial statements.

Upcoming Governmental Accounting Standards Implementation The City is currently analyzing its accounting and financial reporting practices to determine the potential impact on the financi
al statements of the following GASB Statements:

GASB Statement No. 103 – In April 2024, GASB issued Statement No. 103, Financial Reporting Model Improvements. The objective of this statement is to improve key components of the financial reporting model to enhance its effectiveness in providing information 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 stateme nt of activities) report information on all the non-fiduciary activities of the pr imary government and its component units. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely significantly on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the City is financially accountable.

The statement of activities demonstrates the degree to whic h the d irect 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, 2025
(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.

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, 2025
(dollar amounts expressed in thousands)
NOTE 1 – SU
MMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) The City reports the following major enterprise funds:

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

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

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

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

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

Additionally, the City reports the following fund types:

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

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

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

Custodial Funds account for assets held by the City as a custodian for individuals, private organizations, and other governments. The City's Custodial Funds in clude assets held for bonded assessment and community facilities districts and for external participants. External participants invested in the City-sponsored investment pool are reported in the Investment Pool Custodial Fund, while individual investment accounts not invested in the pool are reported in Other Custodial Funds.

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, 2025
(dollar amounts expressed in thousands)
NOTE 1 – SU
MMARY 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 $7,236 of net appreciation that is available for authorization for expenditures by the governing board. The corpus of permanent funds is reported as Nonspendable Fund Balance and investment earnings available for expenditure are reported as Restricted Fund Balance in the fund level financial statements, and as Restricted for Nonexpendable Trust and Endowments in the statement of net position.

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

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

Annual budgets are adopted for the General Fund, Measure U Fund, 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, 2025
(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, 2025
(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. If equipment using federal funding was purchased after October 1, 2024, threshold has been increased to $10. 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/amortization) are eliminated from the accounts in the year of sale or reti rement 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, 2025
(dollar amounts expressed in thousands)
NOTE 1 – SU
MMARY 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, 2025
(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, 2025
(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 intangible right-to-use lease land, buildings, and equipment, except those with less than $20 of fixed payments expected to be made during the lease term, unless a federal funding source is utilized. The City also capitalizes all intangible right-to-use IT subscription assets, except those with less than $100 of fixed payments expected to be made during the IT subscription 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 ar e 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, 2025
(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.

NOTE 2 – CASH AND INVESTMENTS

The following is a summary of cash and investments at June 30, 2025:

Government-wide
Statement of
Net Position
Fiduciary Funds
Statement of Fiduciary
Net Position Total
Cash and investments 1,568,204$ 541,933$ 2,110,137$ Restricted cash and investments 118,366 27,275 145,641 Total 1,686,570$ 569,208$ 2,255,778$

Under the authority of the Sacramento City Charter, the Sacramento City Council, by Resolution 2025-0026, 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 August 12, 2025. 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 2025-0215. Investment standards adopted by the SCERS Board were last approved by the City Council on August 12, 2025. 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 2025, the asset allocations consisted of the following: 37.5% Fixed Income/Real Es tate securities, 30.0% Large Cap Growth stocks, 30.0% Equity Income stocks and 2.5% 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.

57 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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.

58 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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, 2025 are as follows:

Cash and Investment Type No Maturity Under 1 1-5 Over 5 Total Bank deposits 79,540$ - $ -$ -$ 79,540$ Commercial paper - 200,337 - - 200,337 Corporate bonds/notes - 238,729 355,555 407 594,691 Equities 5,990 - - - 5,990 Exchange traded funds 2,416 - - - 2,416 Investment Trust of California (CalTRUST) - 116,149 63,206 - 179,355 Local Agency Investment Fund (LAIF) - 35,758 - - 35,758 Municipal bonds/notes - 62,939 - 1,431 64,370 Money market mutual funds - 74,981 - - 74,981 Negotiable certificates of deposit - 30,631 10,047 - 40,678 Supranational securities - - 54,676 - 54,676 U.S. agency securities - 377,513 256,770 1,003 635,286 U.S. Treasury bills - 13,810 - - 13,810 U.S. Treasury notes - 19,530 - - 19,530 Total Cash and Investments 87,946$ 1,170,377$ 740,254$ 2,841$ 2,001,418$

Remaining Maturity in Years

The $407 of corporate bonds/notes, $1,431 of municipal bonds/notes, and $1,003 of U.S. agency securities with remaining maturities longer than five years are held by other trust funds. The $5,990 of equities and $2,416 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 pol icy. 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.

59 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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, 2025 are as follows:

Cash and Investment Type No Maturity Under 1 1-5 Over 5 Total City of Sacramento Investment Pool -$ 2,626$ -$ -$ 2,626$ Corporate bonds/notes - 3,697 31,175 32,983 67,855 Equities 15,175 - - - 15,175 Exchange traded funds 137,454 - - - 137,454 Money market mutual funds 395 - - - 395 Municipal bonds/notes - 504 8,050 13,759 22,313 U.S. agency securities - - 1,254 3,336 4,590 U.S. Treasury bonds - 1,803 773 1,376 3,952 Total Cash and Investments 153,024$ 8,630$ 41,252$ 51,454$ 254,360$

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, 2025, by investment type, are as follows:

Investment Type City SCERS
Corporate bonds/notes 92,569$ 9,598$
Municipal bonds/notes - 3,318
Negotiable certificates of deposit 16,106 -
Supranational securities 34,405 -
U.S. agency securities 585,440 3,136
728,520$ 16,052$

60 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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, 2025 are as follows:

Investment Type S & P City SCERS
City of Sacramento Investment Pool not rated -$ 2,626$ Commercial paper A 200,337 -
Corporate bonds/notes A 508,985 22,768 AA 80,996 5,770
AAA 3,974 -
BBB 736 39,316
not rated - 1
Investment Trust of California (CalTRUST) not rated 179,355 - Local Agency Investment Fund (LAIF) not rated 35,758 - Municipal bonds/notes A 3,551 2,579 AA 56,494 12,611
AAA 2,413 508
not rated 1,912 6,615
Money market mutual funds A 150 - AAA 74,831 395
Negotiable certificates of deposit A 5,012 - BB 10,727 -
not rated 24,939 -
Supranational securities AAA 54,676 - U.S. agency securities AA 607,568 4,370 not rated 27,718 -
Total 1,880,132$ 97,559$

The $736 in corporate bonds/notes rated BBB are held by other trust funds.

61 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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, 2025, 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.

62 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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, 2025 was $36,245 and $38,736, respectively, with $0 unfunded commitments. At June 30, 2025 SCERS held money market mutual funds with a net asset value of $395, with $0 unfunded commitments. The redemption frequency is daily a nd 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.

63 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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, 2025. 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.

64 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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, 2025:

Investments by Fair Value Level
Balance at
June 30, 2025
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Commercial paper 200,337$ - $ 200,337$ - $ Corporate bonds/notes 565,888 - 565,888 - Equities 5,990 5,990 - - Exchange traded funds 2,416 2,416 - - Municipal bonds/notes 64,370 - 64,370 - Negotiable certificates of deposit 26,153 - 26,153 - Supranational securities 54,676 - 54,676 - U.S. agency securities 635,286 - 635,286 - U.S. Treasury bills 19,530 19,530 - - U.S. Treasury notes 13,810 13,810 - - Total Investments by Fair Value Level 1,588,456 41,746 $ 1,546,710$ - $ Investments Measured at Net Asset Value
Money market mutual funds 36,245
Investments Uncategorized
Investment Trust of California (CalTRUST) 179,355
Local Agency Investment Fund (LAIF) 35,758
Total Investments Uncategorized 215,113
Total Investments Held by City 1,839,814
Investments Held by Fiscal Agent by Fair Value Level
Corporate bonds/notes 28 ,803 -$ 28,803$ -$ Negotiable certificates of deposit 14,525 - 14,525 - Total Investments Held by Fiscal Agent by
Fair Value Level 43,328 -$ 43,328$ -$ Investments Held by Fiscal Agent Measured at Net Asset
Value
Money market mutual funds 38,736
Total Investments Held by Fiscal Agent 82,064
Total Investments 1,921,878
Total Bank Deposits 79,540
Total Cash and Investments 2,001,418 $
Fair Value Measurements on a Recurring Basis Using

65 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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, 2025:

Investments by Fair Value Level
Balance at
June 30, 2025
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Corporate bonds/notes $ 67,855 -$ 67,855$ - $ Equities 15,175 15,175 - - Exchange traded funds 137,454 137,454 - - Municipal bonds/notes 22,313 - 22,313 - U.S. agency securities 4,590 - 4,590 - U.S. Treasury bonds 3,952 3,952 - - Total Investments by Fair Value Level 251,339 $ 156,581 $ 94,758 $ - Investments Measured at Net Asset Value
Money market mutual funds 395
Investments at Fair Value not Subject to
Fair Value Hierarchy
City of Sacramento Investment Pool 2,626
Total Cash and Investments 254,360 $
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 6.84% 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.

66 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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, 2025:

Fair Value
Adjusted
Cost
Interest
Rates
Maturity
Dates
Commercial paper 200,337 $ 200,400 $ 4.02-4.47% 07/25-01/26 Corporate bonds/notes 563,569 566,973 0.55-5.38% 07/25-06/30 Deposits 77,683 77,682 3.76-4.27% N/A Investment Trust of California (CalTRUST) 179,355 179,355 4.02-4.37% N/A Local Agency Investment Fund (LAIF) 35,758 35,758 4.27% N/A Municipal bonds/notes 64,370 64,565 0.63-5.52% 07/25-02/55 Money market mutual funds 36,245 36,245 0.01-3.90% N/A Negotiable certificates of deposit 26,153 26,500 0.60-4.25% 01/26-06/28 Supranational securities 54,676 55,069 0.37-5.17% 07/25-02/30 U.S. agency securities 635,286 642,279 0.37-6.00% 07/25-06/45 U.S. Treasury bills/notes 33,340 33,780 0.37-4.22% 09/25-02/26 Total cash and investments in City sponsored investment pool and external individual investment accounts 1,906,772$ 1,918,606$

A summary of cash and investments as of June 30, 2025 is as follows:

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

Cash and investments at fair value 1,796,486 $ 110,286 $ 1,906,772 $ Interest receivables 9,780 391 10,171 Net position 1,806,266 $ 110,677 $ 1,916,943 $ Equity of internal pool participants 1,682,820 $ - $ 1,682,820$ Equity of external pool participants 123,446 110,677 234,123 Total equity 1,806,266 $ 110,677 $ 1,916,943 $ Statement of Changes in Net Position:

Net position at July 1, 2024 1,696,979 $ 146,875 $ 1,843,854 $ Net change in investments by pool participants 109,287 (36,198) 73,089 Net position at June 30, 2025 1,806,266 $ 110,677 $ 1,916,943 $

67 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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, 2025, the City’s investment in LAIF is $35,758.

The total amount invested by all public agencies in LAIF at that date is $24,486,667. LAIF is part of the California Pooled Money Investment Account (PMIA), which at June 30, 2025 had a balance of $179,153,321. Of that amount,

96.19% is invested in non-derivative financial products, and 3.81% 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, 2025 , the City’s investment in CalTRUST is $179,355, of which $63,375 was invested in the Liquidity funds pool, $52,774 in the Short-term pool, and $63,206 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.

68 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(dollar amounts expressed in thousands)

NOTE 3 – RECEIVABLES

Net receivables as of June 30, 2025, were as follows:

Taxes Accounts Loans
Inter-
govern-
mental Leases Settlement Interest Total
Governmental activities
General Fund 36,015 $ 21,731 $ 986 $ 8,227 $ 25,648 $ - $ 2,617 $ 95,224 $ Measure U Fund 22,770 27 - - - - 413 23,210 2015 Golden 1 Center
Lease Revenue Bond Fund - 2,156 131,185 - - - 31 133,372 Other governmental funds 7,533 32,764 49,427 84,860 3,617 - 2,778 180,979 Internal service funds - 12,787 - - - - 904 13,691 66,318$ 69,465$ 181,598$ 93,087$ 29,265$ -$ 6,743 $ 446,476$ Amounts not scheduled for
collection during the
subsequent year -$ -$ 173,789$ 9,139$ 26,547$ -$ -$ 209,475$ Business-type activities
Water Fund -$ 24,553$ 1,000 $ 6,023$ 759$ 7,327 $ 2,069$ 41,731$ Wastewater Fund - 13,864 - 1,093 - - 503 15,460 Storm Drainage Fund - 13,335 822 734 - - 591 15,482 Solid Waste Fund - 15,142 - - 1,283 - 548 16,973 Community Center Fund 4,792 3,513 - - - - 308 8,613 Other enterprise funds - 857 - - 7,458 - 9 8,324 4,792$ 71,264$ 1,822 $ 7,850$ 9,500$ 7,327$ 4,028$ 106,583$

Included in the Accounts Receivable amounts above ar e allowances for doubtful accounts of $22,077 in governmental activities and $1,951 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 $4,473, 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, 2025 is $131,185. 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.

69 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(dollar amounts expressed in thousands)

NOTE 4 – CAPITAL ASSETS

Summary

The following is a summary of capital assets as of June 30, 2025:

Business-
Governmental type
Activities Activities Total
Capital assets not being depreciated/amortized
Land 229,725 $ 50,349 $ 280,074 $ Easements 2,738 291 3,029 Construction in progress 283,474 430,356 713,830 Total capital assets not being depreciated/amortized 515,937 480,996 996,933 Depreciable/amortizable capital assets
Buildings and improvements 800,541 465,283 1,265,824 Equipment 85,371 178,221 263,592 Software 9,043 14,152 23,195 Vehicles 234,650 - 234,650 Transmission and distribution system 4,777 1,677,003 1,681,780 Roadway network 1,774,410 - 1,774,410 Streetlight network 332,161 - 332,161 Parks and park improvements 271,966 - 271,966 Total depreciable/amortizable capital assets 3,512,919 2,334,659 5,847,578 Less accumulated depreciation/amortization for:

Buildings and improvements (347,098) (204,653) (551,751) Equipment (74,514) (76,132) (150,646) Software (6,523) (7,391) (13,914) Vehicles (134,148) - (134,148) Transmission and distribution system (1,532) (722,580) (724,112) Roadway network (1,268,569) - (1,268,569) Streetlight network (135,902) - (135,902) Parks and park improvements (122,473) - (122,473) Total accumulated depreciation/amortization (2,090,759) (1,010,756) (3,101,515) Depreciable/amortizable capital assets, net 1,422,160 1,323,903 2,746,063 Lease and IT subscription assets, net (Note 6) 15,375 4,825 20,200 Tot
al capital assets, net 1,953,472$ 1,809,724$ 3,763,196$

Refer to Note 6 for more detailed information on lease and IT subscription asset activity and amortization expense by function.
70 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(dollar amounts expressed in thousands)

NOTE 4 – CAPITAL ASSETS (Continued)

Governmental Activities

Governmental capital asset activity for the fiscal year ended June 30, 2025 was as follows:

Beginning
Balance Increases Decreases
Transfers
In/Out
Ending
Balance
Capital assets not being depreciated/amortized
Land 229,725 $ - $ - $ -$ 229,725$ Easements 2,501 237 - - 2,738 Construction in progress 297,288 89,432 (103,246) - 283,474 529,514 89,669 (103,246) - 515,937 Depreciable/amortizable capital assets
Buildings and improvements 741,128 59,413 - - 800,541 Equipment 83,316 2,055 - - 85,371 Software 7,117 1,926 - - 9,043 Vehicles 219,274 24,973 (9,597) - 234,650 Transmission and distribution system 4,777 328 - (328) 4,777 Roadway network 1,759,319 23,040 (7,949) - 1,774,410 Streetlight network 309,533 22,628 - - 332,161 Parks and park improvements 267,563 4,403 - - 271,966 Total depreciable/amortizable capital assets 3,392,027 138,766 (17,546) (328) 3,512,919 Less accumulated depreciation/amortization for:

Buildings and improvements (332,009) (15,089) - - (347,098) Equipment (72,404) (2,110) - - (74,514) Software (5,952) (571) - - (6,523) Vehicles (125,423) (17,608) 8,883 - (134,148) Transmission and distribution system (1,445) (87) - - (1,532) Roadway network (1,238,079) (38,439) 7,949 - (1,268,569) Streetlight network (128,421) (7,481) - - (135,902) Parks and park improvements (113,224) (9,249) - - (122,473) Total accumulated depreciation/amortization (2,016,957) (90,634) 16,832 - (2,090,759) Depreciable/amortizable capital assets, net 1,375,070 48,132 (714) (328) 1,422,160 Lease and IT subscription assets, net (Note 6) 15,817 (442) - - 15,375 Governmental activities capital assets, net 1,920,401$ 137,359$ (103,960)$ (328) $ 1,953,472$ Depreciation/amortization expense was charged to functions as follows:

General government 5,062$
Police 877
Fire 823
Public works 49,790
Convention and cultural services 3,774
Youth, parks, and community enrichment 11,768
Community development 3
Library 935
Capital assets held by the City's internal service funds are charged to the functions based on their usage of assets 17,602 Total governmental activities depreciation/amortization expense 90,634$ Total capital assets not being
depreciated/amortized

71 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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, 2025 was as follows:

Beginning
Balance Increases Decreases
Transfers
In/Out
Ending
Balance
Capital assets not being depreciated/amortized
Land 49,689$ 660 $ -$ -$ 50,349$ Easements 291 - - - 291 Construction in progress 459,190 17,630 (46,464) - 430,356 509,170 18,290 (46,464) - 480,996 Depreciable/amortizable capital assets
Buildings and improvements 448,612 16,671 - - 465,283 Equipment 165,426 12,795 - - 178,221 Software 13,670 482 - - 14,152 Transmission and distribution system 1,645,422 31,253 - 328 1,677,003 Total depreciable/amortizable capital assets 2,273,130 61,201 - 328 2,334,659 Less accumulated depreciation/amortization for:

Buildings and improvements (196,438) (8,215) - - (204,653) Equipment (69,403) (6,729) - - (76,132) Software (6,565) (826) - - (7,391) Transmission and distribution system (687,106) (35,474) - - (722,580) Total accumulated depreciation/amortization (959,512) (51,244) - - (1,010,756) Depreciable/amortizable capital assets, net 1,313,618 9,957 - 328 1,323,903 Lease and IT subscription assets, net (Note 6) 3,520 1,305 - 4,825 Business-type activities capital assets, net 1,826,308$ 29,552$ (46,464)$ 328 $ 1,809,724$ Depreciation/amortization expense was charged to functions as follows:

Water 30,543$
Wastewater 5,344
Storm drainage 11,112
Solid waste 1,243
Community center 1,300
Parking 1,671
Child development 31 (1)
Total business-type activities depreciation/amortization expense 51,244$ (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

72 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(dollar amounts expressed in thousands)

NOTE 5 – PAYABLES

Payables as of June 30, 2025, were as follows:

Vendors Employees Interest Deposits Total
Governmental activities
General Fund 20,675 $ 27,683 $ 79 $ 379 $ 48,816 $ Measure U Fund 7,812 2,758 5 - 10,575 - - 3,410 - 3,410 Other governmental funds 48,505 83 1,723 1,697 52,008 Internal service funds 4,925 445 6 - 5,376 Total governmental activities 81,917 $ 30,969 $ 5,223 $ 2,076 $ 120,185 $ Business-type activities
Water Fund 6,390 $ 1,728 $ 2,852 $ - $ 10,970 $ Wastewater Fund 14,231 457 565 20 15,273 Storm Drainage Fund 1,088 621 22 - 1,731 Solid Waste Fund 1,804 627 27 - 2,458 Community Center Fund 3,248 321 1,212 - 4,781 Other enterprise funds 2,203 372 29 69 2,673 Total business-type activities 28,964 $ 4,126 $ 4,707 $ 89 $ 37,886$ 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 $3,410, 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 $1,294, 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 leas e and IT subscription liabilities of $162, reported in the government-wide statement of net position.

73 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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 2 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, 2025 is as follows:

Beginning
Balance Increases Decreases
Ending
Balance
Governmental activities
Intangible right-to-use lease assets:

Land 234 $ - $ - $ 234 $ Buildings 1,949 3,254 (152) 5,051 Equipment 95 - - 95 Total intangible right-to-use lease assets 2,278 3,254 (152) 5,380 Less accumulated amortization for:

Right-to-use lease assets:

Land (20) (11) - (31) Buildings (1,068) (475) 152 (1,391) Equipment (18) (20) - (38) Total accumulated amortization (1,106) (506) 152 (1,460) 1,172 2,748 - 3,920 Intangible right-to-use IT subscription assets 21,307 2,239 (457) 23,089 Less accumulated amortization (6,662) (5,429) 457 (11,634) Intangible right-to-use IT subscription assets, net 14,645 (3,190) - 11,455 15,817$ (442)$ -$ 15,375$ Business-type activities
Intangible right-to-use lease assets:

Land 1,978$ -$ -$ 1,978$ Buildings 177 1,599 - 1,776 Equipment 184 - - 184 Total intangible right-to-use lease assets 2,339 1,599 - 3,938 Less accumulated amortization for:

Right-to-use lease assets:

Land (368) (123) - (491) B
uildings (105) (115) - (220) Equipment (166) (18) - (184) (639) (256) - (895) 1,700 1,343 - 3,043 Intangible right-to-use IT subscription assets 2,801 633 (236) 3,198 Less accumulated amortization (981) (671) 236 (1,416) Intangible right-to-use IT subscription assets, net 1,820 (38) - 1,782 3,520$ 1,305$ -$ 4,825$ Governmental activities intangible right-to-use lease
and IT subscription assets, net
Total accumulated amortization
Business-type activities intangible right-to-use lease
and IT subscription assets, net
Intangible right-to-use lease assets, net
Intangible right-to-use lease assets, net

74 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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 right-to-use lease and IT subscription assets was charged to functions as follows:

Right-to-use
Lease Assets
Right-to-use
IT Subscription
Assets Total
General Government 94 $ 1,680 $ 1,774 $ Police 75 2,227 2,302
Fire 152 277 429
Public works 61 273 334 Convention and cultural services 80 84 164 Youth, parks, and community enrichment 44 135 179 Community development - 746 746 Community response - 7 7 Total amortization expense 506 $ 5,429 $ 5,935 $ Right-to-use
Lease Assets
Right-to-use
IT Subscription
Assets Total
Water 18$ 378 $ 396 $
Wastewater - 94 94
Storm Drainage 35 40 75 Solid waste - 50 50
Community Center 80 56 136 Parking 123 53 176
Total amortization expense 256 $ 671 $ 927 $ Governmental Activities
Business-type Activ ities

A summary of changes in the related lease and IT subscription liabilities for the fiscal year ended June 30, 2025 is as follows:

Beginning
Balance Increases Decreases
Ending
Balance
Due Within
One Year
Governmental activities
Lease liabilities 1,191 $ 3,254 $ (459) $ 3,986 $ 520 $ IT subscription liabilities 12,882 2,239 (5,291) 9,830 3,306 Total 14,073 $ 5,493 $ (5,750) $ 13,816 $ 3,826 $ Business-type activities
Lease liabilities 1,724 $ 1,599 $ (213) $ 3,110 $ 274 $ IT subscription liabilities 1,432 633 (783) 1,282 351 Total 3,156 $ 2,232 $ (996) $ 4,392 $ 625 $

75 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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
2026 520$ 106$ 3,306$ 250$ 2027 386 95 2,339 175 2028 384 84 2,152 110 2029 366 73 1,432 50 2030 367 62 456 11 2031 - 2035 1,847 136 145 1 2036 - 2040 30 9 - - 2041 - 2045 33 6 - - 2046 - 2050 37 3 - - 2051 - 2055 16 - - - Totals 3,986$ 574$ 9,830$ 597$

Fiscal Year
Ending June 30, Principal Interest Principal Interest
2026 274 $ 69 $ 351 $ 26 $ 2027 249 64 205 18 2028 181 59 190 13 2029 175 54 121 8 2030 185 49 53 5 2031 - 2035 990 161 275 15 2036 - 2040 160 87 87 1 2041 - 2045 175 72 - - 2046 - 2050 191 56 - - 2051 - 2055 210 38 - - 2056 - 2060 230 18 - - 2061 - 2065 90 2 - - Totals 3,110 $ 729 $ 1,282 $ 86 $ 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 $462 during the fiscal year ended June 30, 2025. 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 $110 of expense associ ated with the right-to-use lease land from the State Lands Commission during the fiscal year ended June 30, 2025.

76 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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 $441 during the fiscal year ended June 30, 2025.

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 $2,927 during the fiscal year ended June 30, 2025. $907 was associated with variable IT subscription arrangements based on the number of user licenses and $2,020 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
2026 2,718 $ 494 $ 881 $ 146 $ 2027 2,341 409 699 133 2028 2,347 373 706 124 2029 2,372 335 661 114 2030 2,425 298 571 105 2031 - 2035 9,360 989 2,256 408 2036 - 2040 5,131 417 1,634 256 2041 - 2045 936 177 1,607 109 2046 - 2050 483 126 485 12 2051 - 2055 624 76 - - 2056 - 2060 528 19 - - Totals 29,265 $ 3,713 $ 9,500 $ 1,407 $ Governmental Activities Business-type Activities

77 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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, 2025, 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 $5,339 during the fiscal year ended June 30, 2025.

Governmental
Activ ities
Business-type
Activ ities
Lease revenue 2,932 $ 734 $
Interest revenue 449 150
78 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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, 2025. Certain long-term liabilities provide financing to both governmental and business-type activities.

Beginning
Balance, Ending Due Within
GOVERNMENTAL ACTIVITIES: As Restated Additions Reductions Balance One Year Revenue and Other Bonds, Direct Placements:
2016 Lease Financing 5,045$ -$ (535)$ 4,510$ 545$ Revenue and Other Bonds, Public Offerings:
2006 Capital Improvement Revenue Bonds, Series B 35,365 - (1,875) 33,490 1,985 2006 Capital Improvement Revenue Bonds, Series E 67,138 - (5,571) 61,567 5,897 2015 Refunding Revenue Bonds 60,355 - (4,125) 56,230 4,320 2015 Lease Revenue Bonds - Golden 1 Center 246,395 - (4,400) 241,995 4,645 Subtotal, revenue and other bonds, public offerings 409,253 - (15,971) 393,282 16,847 Direct Borrowing Notes Payable:
1985 Marina Phase I 1,048 - (68) 980 71 1985 Marina Phase II 1,710 - (90) 1,620 94 2008 Sacramento Marina South Basin 13,196 - - 13,196 698 Subtotal, direct borrowing notes payable 15,954 - (158) 15,796 863 Plus deferred amounts:

Issuance premiums 12,212 - (1,136) 11,076 1,136 Subtotal, debt governmental activities 442,464 - (17,800) 424,664 19,391 Other Long-term Liabilities:

Accrued claims and judgments 148,158 41,664 (31,730) 158,092 46,440 Accrued compensated absences 60,357 386 - 60,743 28,319 Lease liabilities 1,191 3,254 (459) 3,986 520 IT subscription liabilities 12,882 2,239 (5,291) 9,830 3,306 Net OPEB liability 175,102 11,728 (20,428) 166,402 - Net pension liability 1,187,737 121,846 (129,361) 1,180,222 - Pollution remediation obligations 1,020 1,183 (65) 2,138 50 Financing plan fee credits:

Delta Shores 45,321 - (1,326) 43,995 - Jacinto Creek 1,173 7 - 1,180 25 North Natomas 30,847 2,783 (3,296) 30,334 4,393 Park Development 1,526 1 - 1,527 401 Subtotal, other long-term liabilities 1,665,314 185,091 (191,956) 1,658,449 83,454 Total governmental activities 2,107,778$ 185,091$ (209,756)$ 2,083,113$ 102,845$

79 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(dollar amounts expressed in thousands)

NOTE 7 – LONG-TERM LIABILITIES (Continued)

Activity (Continued)

Beginning
Balance, Ending Due Within
BUSINESS-TYPE ACTIVITIES: As Restated Additions Reductions Balance One Year Revenue and Other Bonds, Public Offerings:
2006 Capital Improvement Revenue Bonds, Series E 79,115 $ - $ (7,104)$ 72,011 $ 7,478 $ Water Revenue Bonds, Series 2013 5,580 - (5,580) - - Water Revenue Bonds, Series 2017 47,245 - (1,060) 46,185 1,115 Water Revenue Refunding Bonds, Series 2020 151,545 - (1,050) 150,495 4,995 Water Revenue Refunding Bonds, Series 2023 20,985 - - 20,985 2,290 Wastewater Revenue Bonds, Series 2019 23,315 - (975) 22,340 1,025 Wastewater Revenue Refunding Bonds, Series 2020 26,430 - (1,170) 25,260 1,185 2015 Refunding Revenue Bonds 16,030 - (2,370) 13,660 2,480 2018 TOT Revenue Bonds, Senior Series A 195,815 - (510) 195,305 4,715 2018 TOT Revenue Bonds, Senior Series B 4,025 - (4,025) - - 2018 TOT Revenue Bonds, Subordinate Series C 61,950 - (1,390) 60,560 1,460 2019 STID Assessment Revenue Bonds 46,865 - (1,010) 45,855 1,060 Subtotal, revenue and other bonds, public offerings 678,900 - (26,244) 652,656 27,803 Direct Borrowing Notes Payable:

California Department of Public Health 4,862 - (520) 4,342 533 California Infrastructure and Economic
Development Bank (I-Bank) 1,746 - (101) 1,645 104 Drinking Water State Revolving Fund 124,267 - (6,152) 118,115 3,116

Subtotal, direct borrowing notes payable 130,875 - (6,773) 124,102 3,753 Less deferred amounts:

Issuance premiums 53,131 - (3,114) 50,017 2,985 Subtotal, debt, business type activities 862,906 - (36,131) 826,775 34,541 Other Long-term Liabilities:

Accrued compensated absences 12,561 491 - 13,052 5,866 Lease liabilities 1,724 1,599 (213) 3,110 274 IT subscription liabilities 1,432 633 (783) 1,282 351 Net OPEB liability 36,773 1,411 (2,756) 35,428 - Net pension liability 150,543 15,570 (16,365) 149,748 - Accrued claims and judgments 622 84 - 706 706 Water fee credits 96 - - 96 - Wastewater fee credits 7,764 - (237) 7,527 - Liability for landfill postclosure 6,136 - (458) 5,678 458 Subtotal, other long-term liabilities 217,651 19,788 (20,812) 216,627 7,655 Total business-type activities 1,080,557 19,788 (56,943) 1,043,402 42,196 Total long-term liabilities 3,188,335$ 204,879$ (266,699)$ 3,126,515$ 145,041$

The June 30, 2024 beginning balance of governmental activities and business-type activities have been restated to reflect accrued compensated absences in accordance with GASB Statement No. 101, in the amounts of $7,618 and $1,939, respectively.
80 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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, 2025, 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

$183,380

$272,870

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.

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 outstanding principal and any accrued interest may be due and payable immediately.

2015 Lease Revenue Bonds – Golden 1 Center
The bonds were originally issued on August 13, 2015, in the aggregate principal amount of $299,995, to pay for a portion of the acquisi tion and construction of the multi-purpose entertainment and sports center (the Golden 1 Ce nter) 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.

81 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(dollar amounts expressed in thousands)
NOTE 7 – LO
NG-TERM LIABILITIES (Continued)
Revenue and Other Bonds (Continued)
Issued Amount
$9,115
$52,610
$195,815
$66,890
$25,960
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 $77,668 as of June 30, 2025. Current year principal and interest paid was $3,376 and water fee revenue was $145,408.
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 $333,027 as of June 30, 2025.

Current year principal and interest paid was $10,301 and TOT revenue was $35,228. 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 $103,261 as of June 30, 2025.

Current year principal and interest paid was $4,488 and TOT revenue was $35,228. 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 $31,751 as of June 30, 2025. Current year principal and interest paid was $2,116 and wastewater fee revenue was $47,241.
82 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(dollar amounts expressed in thousands)
NOTE 7 – LO
NG-TERM LIABILITIES (Continued)
Revenue and Other Bonds (Continued)
Issued Amount
$50,465
$188,390
$27,970
$20,985
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 $68,522 as of June 30, 2025. Current year principal and interest paid was $2,742 and STID fee revenue was $4,117.
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 $195,039 as of June 30, 2025.

Current year principal and interest paid was $5,200 and water fee revenue was $145,408. 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 re lease 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 $31,460 as of June 30, 2025. Current year principal and interest paid was $1,749 and wastewater fee revenue was $47,241.
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 $30,200 as of June 30, 2025. Current year interest paid was $1,259 and water fee revenue was $145,408. Principal pa
yments begin September 2025.
83 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(dollar amounts expressed in thousands)
NOTE 7 – LO
NG-TERM LIABILITIES (Continued)
Notes Payable
Issued Amount
$2,220
$3,229
$10,477
$10,000
$2,975

$139,1
70 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
Authori
zed 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
Authori
zed February 2005, the City had made loan draws of $9,000 plus accrued interest of $1,477 through June 30, 2013, from the California Department of Boating and Waterways (DB&W), for the purpose of constructing the South Basin Improvements at the Sacramento Marina. Principal and interest was due in 30 annual installments of $204 to $662, through August 2041, bearing an interest rate of 4.6%. The City had made no principal payments and only a portion of interest payments on this loan since 2013 and had been working with the DB&W on a loan restructure. Effective August 2019, the DB&W and the City executed a formal agreement to restructure this loan which added accrued interest to the loan balance. After restructuring, the maturity dates of previous ly matured principal and interest amounts were extended. The note still bears an interest rate of 4.6% and principal and interest are due in annual installments of $500 to $1,698, through August 2041. The debt is secured by collateral of the Sacramento Marina.

California Department of Public Health
Authori
zed 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 $145,408.

California Infrastructure and Econo
mic 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 $2,043.

Current year principal and interest paid was $160 and storm drainage fee revenue was $65,121. 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)
Authori
zed 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 $145,408. 84 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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.

Net OPEB liability (other postemployment benefits) – The net OPEB liability is $166,402 and $35,428 for governmental activities and business-type activities, respectively, at June 30, 2025. 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 $1,180,222 and $149,748 for governmental activities and business-type activities, respectively, at June 30, 2025. The net liability is liquidated by the fund that has recorded the liability. Governmental activities net pension liability is liquidated primarily by the General Fund and business- type activities net pension liability is liquidated by the respective enterprise fund. Refer to Note 8 for more detailed information.

85 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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, 2025.

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

Fiscal Year
Ending June 30, Principal Interest Principal Interest
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 615 59 20,941 17,253 2031-2035 1,610 69 100,143 69,463 2036-2040 - - 62,085 47,317 2041-2045 - - 59,115 32,272 2046-2050 - - 77,738 13,626 Subtotals 4,510 529 393,282 259,032 Plus: Issuance premiums - - 11,076 - Totals 4,510 $ 529 $ 404,358 $ 259,032 $

Fiscal Year
Ending June 30, Principal Interest
2026 863 $ 1,061 $
2027 572 685
2028 599 659
2029 649 633
2030 681 602
2031-2035 3,898 2,513
2036-2040 5,451 1,507
2041-2042 3,083 217
Totals 15,796 $ 7,877 $
Revenue and Other Bonds,
Direct Placements
Revenue and Other Bonds,
Public Offerings
Direct Borrowing
Notes Payable

86 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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
2026 27,803 $ 27,624 $ 3,753 $ 1,165 $ 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 32,909 22,508 7,347 1,689 2031-2035 148,557 92,376 37,127 6,451 2036-2040 143,700 63,545 38,467 3,196 2041-2045 134,780 32,945 16,135 344 2046-2050 73,575 7,156 - - Subtotals 652,656 321,587 124,102 18,683 Plus: Issuance premiums 50,017 - - - Totals 702,673 $ 321,587 $ 124,102 $ 18,683 $ 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, 2025.

Special Assessment Debt

Total matured and unmatured bonds outstanding related to special assessment and special tax districts are $259,874 at June 30, 2025. 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 $106,732 at June 30, 2025. 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.
87 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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, 2025, 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 480,936$ 100,139 $ - $ Safety Plan 848,947 219,463 - SCERS (22,149) - 10,771 Total 1,307,734 $ 319,602 $ 10,771 $

For the fiscal year ended June 30, 2025, the City recognized total pension expense of $200,062 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.

88 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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, 2025, 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 7.42% 8.00%
Required employer contribution rates 28.21% 28.21%
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 10.59% 13.00%
Required employer contribution rates 58.63% 58.63%
Miscellaneous
Safety

Employees Covered – At June 30, 2023, 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 3,657 1,538 Inactive employees entitled to but not yet receiving benefits 4,653 522 Active employees 2,711 1,271
Total 11,021 3,331

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, 2025, the contributions for the miscellaneous and safety plans were $65,053 and $98,605, respectively.

89 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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 pensi on liability, less the pension plan’s fiduciary net position. The net pension liability of each of the Plans is measured as of June 30, 2024, using an annual actuarial valuation as of June 30, 2023, rolled forward to June 30, 2024 using update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown below.

Actuarial Assumptions – The total pension liabilitie s in the June 30, 2023 actuarial valuations were determined using the following actuarial assumptions:

Miscellaneous Safety
Valuation Date June 30, 2023 June 30, 2023
Measurement Date June 30, 2024 June 30, 2024
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) Inv estment Rate of Return 6.80% (2) 6.80% (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 The underly
ing mortality assumptions and all other actuarial assumptions used in the June 30, 2023 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.
90 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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.

A sset Class
A ssumed A sset
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.

91 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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, 2024 are as follows:

Miscellaneous Plan:

Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability
Balance at June 30, 2024 1,776,891 $ 1,279,405 $ 497,486 $ Changes in the year:

Service cost 38,471 - 38,471 Interest on the total pension liability 122,519 - 122,519 20,300 - 20,300
Contributions - employer - 56,744 (56,744) Contributions - employee - 18,944 (18,944) Net investment income - 123,192 (123,192) (81,587) (81,587) -
Administrative expense - (1,040) 1,040 Net changes 99,703 116,253 (16,550) Balance at June 30, 2025 1,876,594 $ 1,395,658 $ 480,936 $ Safety Plan:

Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability
Balance at June 30, 2024 2,547,112$ 1,702,230$ 844,882$ Changes in the year:

Service cost 52,704 - 52,704 Interest on the total pension liability 176,765 - 176,765 51,882 - 51,882
Contributions - employer - 86,394 (86,394) Contributions - employee - 27,797 (27,797) Net investment income - 164,479 (164,479) (127,055) (127,055) -
Administrative expense - (1,384) 1,384 Net changes 154,296 150,231 4,065
Balance at June 30, 2025 2,701,408$ 1,852,461$ 848,947$ Totals of both Miscellaneous and Safety Plans 4,578,002$ 3,248,119$ 1,329,883$ 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

92 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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 742,821$ 1,228,414$ 1,971,235$ Current Discount Rate 6.90% 6.90% 6.90%
Net Pension Liability 480,936$ 848,947$ 1,329,883$ 1% Increase 7.90% 7.90% 7.90%
Net Pension Liability 265,994$ 539,515$ 805,509$

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, 2025, the City recognized pension expense of $85,172 and $129,319 for the Miscellaneous and Safety Plans, respectively. At June 30, 2025, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred
Outflows 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 65,053 $ - $ 98,605$ - $ 163,658$ - $ Changes of assumption - - 34,970 - 34,970 - Differences between actual and expected experienc e 16 , 0 7 3 - 61,068 - 77,141 - Net differences between projected and actual
earnings on plan investments 1 9,01 3 - 24,820 - 43,833 - Total 1 00,1 39$ - $ 219,463$ - $ 319,602$ - $ Miscellaneous Plan Safety Plan Total

The amount of $163,658 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, 2026. 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
2026 9,260 $ 32,423 $ 41,683 $ 2027 38,349 75,398 113,747 2028 (5,481) 12,563 7,082 2029 (7,042) 474 (6,568) Total 35,086 $ 120,858 $ 155,944 $

93 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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.

94 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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, 2025, 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 659 19 28 706 Inactive members entitled to but not yet receiving benefits 3 - - 3 Active plan members 1 - - 1 Total plan members 663 19 28 710

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 2025. 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, 2025, the active employee contribution rate was 1.10% of annual pay, and the City’s contribution rate was 1497% of covered payroll.

For the fiscal year ended June 30, 2025, the contributions for the SCERS plan were $1,362.

95 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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, 2025 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, 2025 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 40.0% 4.2%
Large Cap Growth 30.0% 7.1%
Equity Income 30.0% 7.1%
Total 100.0%

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

96 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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, 2025 is as follows:

Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability (Asset)
Balance at June 30, 2024 249,409 $ 253,497 $ (4,088) $ Changes in the year:

Serv ice cost 2 - 2 Interest on the total pension liability 14,173 - 14,173 Differences between expected and
actual experience (5,984) - (5,984) Contributions - employer - 1,362 (1,362) Contributions - employee - 1 (1) Net investment income - 24,889 (24,889) Benefit payments, including refunds of
employee contributions (26,395) (26,395) - Net changes (18,204) (143) (18,061) Balance at June 30, 2025 231,205 $ 253,354 $ (22,149) $ 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) (5,857)$ (22,149) $ (36,558) $

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.

97 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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, 2025, the City reco gnized pension expense of $(14,429) attributable to the SCERS plans. At June 30, 2025, 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 10,771$

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
2026 3,209$
2027 (6,834)
2028 (5,060)
2029 (2,086)
Total (10,771)$

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, 2025, employees contributed $5,978 and the City contributed $4,937 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 $1,028 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.

98 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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 3,144 Inactive employees entitled to but not yet receiving benefits 441 Active employees 4,013
Total 7,598

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, 2025 were $23,959.

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, 2024, 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, 2024
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 ba
sed 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.
99 City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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, 2025 are as follows:

Total OPEB
Liability
Plan Fiduciary
Net Position
Net OPEB
Liability
Balance at June 30, 2024 296,692 $ 84,817 $ 211,875 $ Changes in the year:

Service cost 5,695 - 5,695 Interest 18,398 - 18,398 Changes of benefit terms - - - - - -
Assumption changes - - - Contributions - employer - 23,184 (23,184) Contributions - employee - - - Net investment income - 10,985 (10,985) (16,033) (16,033) -
Administrative expenses - (31) 31 Net changes 8,060 18,105 (10,045) Balance at June 30, 2025 304,752$ 102,922$ 201,830$ Increase (Decrease)
Benefit payments
Actual vs expected experience

100
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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 237,802$ 201,830$ 171,620$ 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 176,046 $ 201,830 $ 235,340 $ 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, 2025, the City recognized OPEB expense (incom e) of $(5,811). At June 30, 2025, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Differences between expected and actual experience 484 $ 16,058 $ Changes in assumptions 9,191 3,769
Net difference between projected and actual
earnings on plan investments 296 -
Employer contributions made subsequent to
the measurement date 23,959 -
Total 33,930$ 19,827$

101
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(dollar amounts expressed in thousands)

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

Net OPEB Liability (Continued)

The amount of $23,959 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, 2026. 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
2026 (8,345) $
2027 (1,601)
2028 (1,615)
2029 796
2030 909
Total (9,856) $

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

APPROPRIATIONS

At June 30, 2025, the government-wide statement of net position reported restricted net position of $541,602 in governmental activities. Of this amount, $54,684 is restricted for enabling legislation.

For the fiscal year ended June 30, 2025, General Fund expenditures for the community response exceeded appropriations by $1,261, and citywide and community support exceeded appropriations by $12,724. The overspending was funded by revenue collected in excess of budgeted amounts.

For the fiscal year ended June 30, 2025, Measure U Fund expenditures for general government exceeded appropriations by $291, and citywide and community support exceeded appropriations by $1,355. The overspending was funded by revenue collected in excess of budgeted amounts.

For the fiscal year ended June 30, 2025, Transportation and Development Special Revenue Fund expenditures for debt service exceeded appropriations by $596. The overspending was funded by revenue collected in excess of budgeted amounts.

For the fiscal year ended June 30, 2025, Culture and Leisure Fund expenditures for convention and cultural services exceeded appropriations by $40 and debt service by $85. The overspending was funded by revenue collected in excess of budgeted amounts.

For the fiscal year ended June 30, 2025, Parks and Recreation Fund expenditures for youth, parks and community enrichment exceeded appropriations by $303. The overspending was partially funded by revenue collected in excess of budgeted amounts.

For the fiscal year ended June 30, 2025, CCOMWP Fund expenditures for debt service exceeded appropriations by $57. The overspending was funded by savings in general government expenditures.

102
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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, 2025, Special Districts Special Revenue Fund expenditures for general government services exceeded appropriations by $282, convention and cultural services by $6,697 and community development by $7. 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 $30,827 as of June 30, 2025. The deficit represents grant expenditures unreimbursed by granting agencies within the 60-day period of availability for which corresponding revenues have not been recognized. Th e deficit will be recovered upon receipt of grantor reimbursements.

The 4th R Child Development Fund, an enterprise fund, had a deficit net position of $2,640 as of June 30, 2025. 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 $12,410 as of June 30, 2025. Operating costs exceeded amounts allocated from departments. The deficit is expected to be recovered through future departmental allocations.

103
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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, 2025:

Description Transfers In Transfers Out Net Transfers
Governmental activities:

General Fund Debt service 303 $ (16,694)$ (16,391) $ General Fund In-lieu tax transfers 41,476 - 41,476 General Fund Program support 25,384 (14,142) 11,242 Measure U Fund Program support 468 (984) (516) 2015 Golden 1 Center
Lease Revenue Bond Fund Debt service 9,400 - 9,400 Other Governmental Funds Debt service 18,092 (4,089) 14,003 Other Governmental Funds Program support 9,988 (24,140) (14,152) Internal Service Funds Debt service - (45) (45) Internal Service Funds Program support 16 (1,804) (1,788) Adjustment for transfer of
capital assets
Transfer of capital
assets - (328) (328) Total governmental activities 105,127 $ (62,226) $ 42,901 $ Business-type activities:

Water Fund Debt service - $ (34) $ (34) $ Water Fund In-lieu tax transfers - (14,475) (14,475) Water Fund Program support 302 (742) (440) Wastewater Fund Debt service - (45) (45) Wastewater Fund In-lieu tax transfers - (4,870) (4,870) Wastewater Fund Program support 101 (217) (116) Storm Drainage Fund Debt service - (73) (73) Storm Drainage Fund In-lieu tax transfers - (6,754) (6,754) Storm Drainage Fund Program support 247 - 247 Solid Waste Fund Debt service - (106) (106) Solid Waste Fund In-lieu tax transfers - (10,635) (10,635) Solid Waste Fund Program support 258 - 258 Community Center Fund Debt service 2,690
(1,100) 1,590
Community Center Fund In-lieu tax transfers - (2,658) (2,658) Community Center Fund Program support - (37) (37) Other Enterprise Funds Debt service - (8,300) (8,300) Other Enterprise Funds In-lieu tax transfers - (2,083) (2,083) Other Enterprise Funds Program support 5,302 - 5,302 Adjustment for transfer of
capital assets
Transfer of capital
assets 328 - 328
Total business-type activities 9,228$ (52,129)$ (42,901)$

104
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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, 2025:

Interfund
Receivables Payables Balances
General Fund - $ (987) $ (987) $ Other Governmental Funds - (30,187) (30,187) Internal Service Funds 35,795 - 35,795 $ Total governmental activities 35,795 (31,174) 4,621 Community Center Fund - (4,621) (4,621) Total business-type activities - (4,621) (4,621) Total 35,795 $ (35,795) $ - $

$35,795 was loaned by the City’s internal service funds to cover short-term operating deficits (approximately $14,146) and to assist in the development of community resources (approximately $21,649). Included in the $35,795 interfund loans is $8,649 that is not expected to be repaid within one year.

$10,909 was borrowed by the Capital Grants Fund for short-term loans.

$4,278 was borrowed by the Culture and Leisure Fund for the Haggin Oaks renovation project and operating deficit.

$4,621 was borrowed by the Community Center Fund for operational requirements.

$987 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.

105
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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, 2025, 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, 2025, the Risk Management Internal Service Fund had a deficit net position of $12,410.

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:

2025 2024
Accrued claims and judgments, July 1 142,415$ 134,788$ Incurred claims and adjustment expenses 40,660 44,630 Claim payments (31,730) (37,003)
Accrued claims and judgments, June 30 151,345$ 142,415$

106
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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 2019 and Wastewater Revenue Refunding Bonds, Series 2020. Revenue of the Storm Drainage Enterprise Fund is pledged to the payment of principal and interest on the California Infrastructure and Economic Development Bank Note Payable.

Transient Occupancy Tax (TOT) revenue of the Community Center Fund is pledged to the payment of principal and interest on the 2018 TOT 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 $121,161 for contracts awarded but not completed as of June 30, 2025. The following table shows the distribution of those commitments among major and nonmajor funds.

Governmental Activities: Business-type Activities:

General Fund 9,671$ Water Fund 24,373$
Measure U 18,040 Wastewater Fund 1,717
Other governmental funds 30,348 Storm Drainage Fund 2,810 Internal service funds 27,775 Solid Waste Fund 5,077 Community Center Fund 916
Other enterprise funds 434
Total governmental activities 85,834$ Total business-type activities 35,327$

The major contracts outstanding are $9,197 for conceptual design of Sacramento River Water Treatment Plant Expansion Project; $6,674 for Martin Luther King Jr. Li brary renovation; $2,770 for Freeport pump replacement; $2,258 for rehabilitation of Med Center reservoir; $2,097 for the operation of the southern section of Roseville Road Campus; $2,085 for reducing Franklin Blvd from four to two lanes, add bicycle lanes, and install new landscaping; and $27,358 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), State of California Natural Resources Agency (CNRA) and Encampment Resolution Funding (ERF) programs. These programs are subject to financial and compliance audits by the grantors or their representatives. The audits of these programs for earlier years and the fiscal year ended June 30, 2025 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 claims would be immaterial to the City’s financial position at June 30, 2025. Receipt of these grant revenues is not assured in the future.

107
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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. The most recent department study done in FY24 estimated that $6,136 was required for future post closure monitoring costs as of June 30, 2024. The estimate was based on actual cost for the FY22, FY23 and FY24 and may change due to inflation or deflation, technology, or applicable laws and regulations. The estimated liability was amortized to $5,678 on June 30, 2025.

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 $1,020 at June 30, 2024 and $2,138 at June 30, 2025. The increase is primarily due to updated cost estimates for the Indus Gas site based on current monitoring results and anticipated remediation activities at the City Incinerator site fo llowing the demolition of the hi storic structure. Pollution remediation outlays totaled approximately $65 for the year ended June 30, 2025. 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 circumstances of each si tuation, 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

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.

108
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(dollar amounts expressed in thousands)

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

Sacramento Housing and Redevelopment Agency (Continued)

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, 2025, 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, 2025, were $14,272. In addition, the City paid cost reimbursements and program support of $12 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 $9,888 for the fiscal year ended June 30, 2025. 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 $5,729 of suppor t to SRFECC during the fiscal year ended June 30, 2025.

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, 2025, the City provided $564 of annual support to the NCRPSTA. Payments for rent and training during the fiscal year ended June 30, 2025 were $12. Financial statements may be obtained from the NCRPSTA Administrative Offices, 2409 Dean Street, Suite 119, McClellan, California, 95652.

109
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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, 2025:

The City provided $228 in annual support to the Regional Water Authority.

The City provided $220 in annual support to the Sacramento Groundwater Authority.

The City provided $209 in annual support and $3 in program expenses for Downtown/Riverfront Transit Project to the Sacramento Area Council of Governments.

The City received $254 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 $128 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 was elected to be appoi nted 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 successor 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, 2025, RASA had a deficit net position of $129,962 which will be eliminated with future property tax revenue distributions from the Redevelopment Property Tax Trust Fund administered by the County Auditor-Controller.

110
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(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, 2025, contracts payable of $17,906 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, 2025:

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

Buildings and improvements (39) (2) - (41) Depreciable capital assets, net 63 (2) - 61 Total capital assets, net 3,406$ (2)$ -$ 3,404$

Long-term Debt

The following is a summary of changes in long-term debt for the fiscal year ended June 30, 2025:

Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Revenue Bonds:
201 5 Tax Allocation Refunding Bonds TE, Series A 27,724$ -$ (3,507)$ 24,217$ 1 ,320$ Notes Payable:
2003 Del Paso TE TABS, Series A 4,497 18 (1 ) (560) 3,955 770 2005 Merged Downtown TE, Series A 1 1 4,736 450 (1 ) (1 0,71 7) 104,469 15,815 2005 Oak Park TE, Series A 2,1 50 121 (1 ) (9) 2,262 2,310 2006 65th Street TX Master Lease, Series B 2,690 - (145) 2,545 150 2006 North Sacramento TX Master Lease, Series B 3,1 40 - (165) 2,975 175 2006 Stockton Blvd Master Lease 1 ,652 - (148) 1,504 156 2008 BOA Public Capital Corporation 893 - (215) 678 221 2009 Army Depot TX Swap 2,1 62 - (114) 2,048 121 2009 River District TX Swap 2,023 - (106) 1,917 114 City of Sacramento CIEDB - Utilities/Detention Basin 873 - (51) 822 52 Globe Mills 1 ,303 - (409) 894 433 North Sacramento CIEDB Loan 2,1 92 - (154) 2,038 159 Stockton Blvd CIEDB Loan 1 ,822 - (129) 1,693 133 Subtotal, notes payable 1 40,1 33 589 (1 2,922) 127,800 20,609 Total, long-term debt 1 67,857$ 589 $ (1 6,429)$ 152,017$ 21 ,929$

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

As of June 30, 2025, accumulated accretion for the 2003 Del Paso TE TABS, Series A, is $2,737, and accumulated accretion for the 2005 Merged Downtown and Oak Park TE, Series A, is $67,583. 111
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(dollar amounts expressed in thousands)

NOTE 15 – SUCCESSOR AGENCY TRUST FUND (Continued)

Future Debt Service Requirements

Annual debt service requirements to maturity are as follows:

Fiscal Year
Ending June 30, Principal Interest Principal Interest
2026 1,320$ 1,061$ 20,609$ 810$
2027 1,380 1,003 18,386 725 2028 1,435 942 17,990 649 2029 1,690 863 17,812 587 2030 1,775 777 17,874 525 2031 - 2035 13,855 2,176 57,112 1,588 2036 - 2038 995 40 2,681 142 Subtotal 22,450 6,862 152,464 5,026 Less: Unaccreted interest - - (24,664) - Plus: Unamortized issuance premiums 1,767 - - - Total 24,217$ 6,862$ 127,800$ 5,026$
Revenue Bonds Notes Payable

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 lease 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 $4,473 in the gove rnment-wide statement of net position as of June 30, 2025.

NOTE 17 – SPECIAL ITEM

The City recognized one special item transaction in business-type activities during the fiscal year ended June 30, 2025. The special item was recognized in the Water Fund totaling $13,400 due to a settlement payment related to faulty water meters.

NOTE 18 –

RESTATEMENT OF BEGINNING NET POSITION

Implementation of GASB Statement No. 101 Compensated Absences resulted in a change to accounting principle for the City. Beginning net position has been restated as follows:

Net position, as of
June 30, 2024, as
previously reported Restatement
Net position, as of
June 30, 2024, as
restated
Governmental activities 1,449,379 $ (7,618) $ 1,441,761$ Business-type activities 1,380,102 (1,939) 1,378,163 Total 2,829,481 $ (9,557) $ 2,819,924$

112
City of Sacramento
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2025
(dollar amounts expressed in thousands)
NOTE 18 – RESTATEMENT OF BEGINNING NET POSITION (Continued) Beginning net position of the proprietary funds has been restated as follows:

Net position, as of
June 30, 2024, as
previously reported Restatement
Net position, as of
June 30, 2024, as
restated
Water fund 662,139 $ (805)$ 661,334$

Wastewater Fund 211,772 (289) 211,483
Storm Drainage Fund 304,296 (288) 304,008
Solid Waste Fund 36,369 (329) 36,040
Co
mmunity Center Fund 129,633 (119) 129,514
Other enterprise funds 35,893 (109) 35,784
Total
1,380,102$ (1,939)$ 1,378,163$
NOTE 19 – SUBSEQUENT EVENT
On September 4, 2025, the City issued the 2025 Refunding Revenue Bonds, as authorized by City Resolution 2025-0001. The 2025 Refunding Revenue Bonds were issued at total par of $57,685 plus premium of $6,890. Net proceeds, together with City contribut ion of $6,974, were used to establish an irrevocable escrow to defease $69,890 principal amount of outstanding of 2015 Refu nding Revenue Bonds and pay cost of issuance. The refunding reduced total debt service payments by $5,653 and resulted in an economic gain of $5,311. 113
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114

Required
Supplementary
Information

THIS

PAGE INTENTIONALLY LEFT BLANK
115

City of Sacramento
Required Supplementary Information
Agent Multiple-Employer Defined Benefit Pension Plan
CalPERS Miscellaneous Plan
Schedule of Changes in Net Pension Liability and Related Ratios Last Ten Years (in thousands)
2016 2017 2018 2019 2020
Total pension liability
Service cost 22,342$ 23,374$ 27,795$ 28,404$ 29,053$ Interest on the total pension liability 74,835 79,515 84,334 89,060 94,760 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 12,970 Benefit payments, including refunds of employee contributions (34,390) (37,980) (42,305) ( 48,384) (53,695)
Net change in total pens ion liability 33,769 64,576 144,956 68,091 83,088 Total pension liability -- beginning 1,013,277 1,047,046 1,111,622 1,256,578 1,324,669 Total pension liability -- ending (a) 1,047,046$ 1,111,622$ 1,256,578$ 1,324,669$ 1,407,757$ Plan fiduciary net position
Contributions - employer 22,827$ 25,963$ 28,719$ 29,514$ 34,102$ Contributions - employee 11,302 11,991 12,190 12,634 14,289 Net investment income (loss) 18,047 4,260 91,481 76,768 64,092 Benefit payments, including refunds of employee contributions (34,390) (37,980) (42,305) (48,384) (53,695) Net plan to plan resource movement (3,066) 531 74 (2) - Administrative expense (922) (496) (1,209) (1,413) (694) Other miscellaneous expense - - - (2,683) 2
Net c
hange in fiduciary net position 13,798 4,269 88,950 66,434 58,096 Plan fiduciary net position -- beginning 799,630 813,428 817,697 906,647 973,081 Plan fiduciary net position -- ending (b) 813,428$ 817,697$ 906,647$ 973,081$ 1,031,177$ Net pension liability -- ending (a) - (b) 233,618$ 293,925$ 349,931$ 351,588$ 376,580$ Plan fiduciary net position as a percentage of the total pension liability 77.69% 73.56% 72.15% 73.46% 73.25%
Covered payroll * 157,449$ 166,403$ 176,795$ 181,331$ 185,823$ Net pension liability as a percentage of covered payroll 148.38% 176.63% 197.93% 193.89% 202.66% 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
116

City of Sacramento
Required Supplementary Information
Agent Multiple-Employer Defined Benefit Pension Plan
CalPERS Miscellaneous Plan
Schedule of Changes in Net Pension Liability and Related Ratios Last Ten Years (in thousands)
2021 2022 2023 2024 2025
Total pension liability
Service cost 30,236$ 31,307$ 34,966$ 35,817$ 38,471$ Interest on the total pension liability 99,810 105,037 110,101 115,991 122,519 Changes of benefit terms - - - 2,151 -
Changes of assumptions - - 58,232 - -
Differences between expected and actual experience 2,600 3,743 (3,289) 10,582 20,300 Benefit payments, including refunds of employee contributions (59,069) (63,352) (69,665) (76,064) (81,587) Net change in total pens ion liability 73,577 76,735 130,345 88,477 99,703 Total pension liability -- beginning 1,407,757 1,481,334 1,558,069 1,688,414 1,776,891 Total pension liability -- ending (a) 1,481,334$ 1,558,069$ 1,688,414$ 1,776,891$ 1,876,594$ Plan fiduciary net position
Contributions - employer 39,118$ 43,930$ 47,273$ 53,645$ 56,744$ Contributions - employee 15,018 15,899 16,052 17,788 18,944 Net investment income (loss) 51,632 244,522 (99,652) 75,395 123,192 Benefit payments, including refunds of employee contributions (59,069) (63,352) (69,665) (76,064) (81,587) Net plan to plan resource movement - - (2) - - Administrative expense (1,454) (1,076) (820) (890) (1,040) Other miscellaneous expense - - - - -
Net
change in fiduciary net position 45,245 239,923 (106,814) 69,874 116,253 Plan fiduciary net position -- beginning 1,031,177 1,076,422 1,316,345 1,209,531 1,279,405 Plan fiduciary net position -- ending (b) 1,076,422$ 1,316,345$ 1,209,531$ 1,279,405$ 1,395,658$ Net pens ion liability -- ending (a) - (b) 404,912$ 241,724$ 478,883$ 497,486$ 480,936$ Plan fiduciary net position as a percentage of the total pension liability 72.67% 84.49% 71.64% 72.00% 74.37%
Covered payroll * 195,700$ 203,030$ 206,537$ 211,684$ 229,272$ Net pension liability as a percentage of covered payroll 206.90% 119.06% 231.86% 235.01% 209.77% Meas urement date June 30, 2020 June 30, 2021 June 30, 2022 June 30, 2023 June 30, 2024 Fiscal Year
117

City of Sacramento
Required Supplementary Information
Agent Multiple-Employer Defined Benefit Pension Plan
CalPERS Miscellaneous Plan
Schedule of Contributions
Last Ten Years (in thousands)
2016 2017 2018 2019 2020
Actuarially determined contributions 26,156$ 30,084$ 26,947$ 33,664$ 39,797$ Contributions in relation to the actuarially determined contributions 26,156 30,084 26,947 33,664 39,797 Contribution deficiency (excess) -$ - $ - $ -$ -$
Covered payroll * 166,403$ 176,795$ 181,331$ 185,823$ 195,700$ Contributions as a percentage of covered payroll 15.72% 17.02% 14.86% 18.12% 20.34% 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 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 6.80% (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
118

City of Sacramento
Required Supplementary Information
Agent Multiple-Employer Defined Benefit Pension Plan
CalPERS Miscellaneous Plan
Schedule of Contributions
Last Ten Years (in thousands)
2021 2022 2023 2024 2025
Actuarially determined contributions 43,941$ 47,627$ 51,544$ 57,577$ 65,053$ Contributions in relation to the actuarially determined contributions 43,941 47,627 51,544 57,577 65,053 Contribution deficiency (excess) -$ - $ - $ -$ -$
Covered payroll * 203,030$ 206,537$ 211,684$ 229,272$ 256,546$ Contributions as a percentage of covered payroll 21.64% 23.06% 24.35% 25.11% 25.36% 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
119

City of Sacramento
Required Supplementary Information
Agent Multiple-Employer Defined Benefit Pension Plan
CalPERS Safety Plan
Schedule of Changes in Net Pension Liability and Related Ratios Last Ten Years (in thousands)
2016 2017 2018 2019 2020
Total pension liability
Service cost 29,653$ 31,672$ 37,372$ 38,386$ 40,221$ Interest on the total pension liability 112,331 118,821 123,132 127,930 136,323 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 35,991 Benefit payments, including refunds of employee contributions (70,545) (74,572) (78, 232) (82,999) (88,688)
Net change in total pension liability 42,242 90,319 174,232 70,029 123,847 Total pension liability -- beginning 1,518,033 1,560,275 1,650,594 1,824,826 1,894,855 Total pension liability -- ending (a) 1,560,275$ 1,650,594$ 1,824,826$ 1,894,855$ 2,018,702$ Plan fiduciary net position
Contributions - employer 30,798$ 36,001$ 40,609$ 41,588$ 49,875$ Contributions - employee 15,565 18,465 18,980 21,564 22,752 Net investment income (loss) 25,341 4,971 125,586 104,661 86,282 Benefit payments, including refunds of employee contributions (70,545) (74,572) (78,232) (82,999) (88,688) Net plan to plan resource movement 1 - (74) (4) - Administrative expense (1,288) (697) (1,665) (1,922) (937) Other miscellaneous expense - - - (
3,650) 3
Net
change in fiduciary net position (128) (15,832) 105,
204 79,238 69,287
Plan fiduciary net position -- beginning 1,144,102 1,143,974 1,128,142 1,233,346 1,312,584 Plan fiduciary net position -- ending (b) 1,143,974$ 1,128,142$ 1,233,346$ 1,312,584$ 1,381,871$ Net pension liability -- ending (a) - (b) 416,301$ 522,452$ 591,480$ 582,271$ 636,831$ Plan fiduciary net position as a percentage of the total pension liability 73.32% 68.35% 67.59% 69.27% 68.45%
Covered payroll * 112,067$ 120,120$ 126,438$ 132,206$ 138,718$ Net pension liability as a percentage of covered payroll 371.48% 434.94% 467.80% 440.43% 459.08% 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
120

City of Sacramento
Required Supplementary Information
Agent Multiple-Employer Defined Benefit Pension Plan
CalPERS Safety Plan
Schedule of Changes in Net Pension Liability and Related Ratios Last Ten Years (in thousands)
2021 2022 2023 2024 2025
Total pension liability
Serv ice cost 42,306$ 44,416$ 51,608$ 50,781$ 52,704$ Interest on the total pension liability 143,878 151,131 158,263 166,574 176,765 Changes of benefit terms - - - 798 -
Changes of assumptions - - 80,583 - -
Differences between expected and actual experience 20,246 12,441 4,868 23,383 51,882 Benefit payments, including refunds of employee contributions (95,642) (100,827) (108,473) (117,924) (127,055) Net change in total pension liability 110,788 107,161 186,849 123,612 154,296 Total pension liability -- beginning 2,018,702 2,129,490 2,236,651 2,423,500 2,547,112 Total pension liability -- ending (a) 2,129,490$ 2,236,651$ 2,423,500$ 2,547,112$ 2,701,408$ Plan fiduciary net position
Contributions - employer 58,584$ 67,242$ 74,645$ 82,172$ 86,394$ Contributions - employee 23,832 25,904 25,718 27,327 27,797 Net investment income (loss) 69,226 327,345 (133,570) 100,458 164,479 Benefit payments, including refunds of employee contributions (95,642) (100,827) (108,473) (117,924) (127,055) Net plan to plan resource movement - - 2 - - Administrative expense (1,947) (1,434) (1,093) (1,186) (1,384) Other miscellaneous expense - - - - -
Net c
hange in fiduciary net position 54,053 318,230 (142,771) 90,847 150,231 Plan fiduciary net position -- beginning 1,381,871 1,435,924 1,754,154 1,611,383 1,702,230 Plan fiduciary net position -- ending (b) 1,435,924$ 1,754,154$ 1,611,383$ 1,702,230$ 1,852,461$ Net pension liability -- ending (a) - (b) 693,566$ 482,497$ 812,117$ 844,882$ 848,947$ Plan fiduciary net position as a percentage of the total pension liability 67.43% 78.43% 66.49% 66.83% 68.57%
Covered payroll * 147,409$ 157,333$ 168,488$ 167,211$ 173,882$ Net pension liability as a percentage of covered payroll 470.50% 306.67% 482.00% 505.28% 488.23% Measurement date June 30, 2020 June 30, 2021 June 30, 2022 June 30, 2023 June 30, 2024 Fis cal Year
121

City of Sacramento
Required Supplementary Information
Agent Multiple-Employer Defined Benefit Pension Plan
CalPERS Safety Plan
Schedule of Contributions
Last Ten Years (in thousands)
2016 2017 2018 2019 2020
Actuarially determined contributions 40,959$ 47,222$ 49,102$ 56,327$ 66,147$ Contributions in relation to the actuarially determined contributions 40,959 47,222 49,102 56,327 66,147 Contribution deficiency (excess) -$ - $ - $ - $ - $ Covered payroll * 120,120$ 126,438$ 132,206$ 138,718$ 147,409$ Contributions as a percentage of covered payroll 34.10% 37.35% 37.14% 40.61% 44.87% 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 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 6.80% (net of administrative expenses) Retirement age 50 - 67 years
Mortality
* C
overed 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
122

City of Sacramento
Required Supplementary Information
Agent Multiple-Employer Defined Benefit Pension Plan
CalPERS Safety Plan
Schedule of Contributions
Last Ten Years (in thousands)
2021 2022 2023 2024 2025
Actuarially determined contributions 66,915$ 74,528$ 81,076$ 88,147$ 98,605$ Contributions in relation to the actuarially determined contributions 66,915 74,528 81,076 88,147 98,605 Contribution deficiency (excess) -$ - $ - $ - $ - $ Covered payroll * 157,333$ 168,488$ 167,211$ 173,882$ 189,978$ Contributions as a percentage of covered payroll 42.53% 44.23% 48.49% 50.69% 51.90% Notes to the Required Supplementary Information
Valuation date: 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 Fis cal Year
123

City of Sacramento
Required Supplementary Information
Sacramento City Employees’ Retirement System,
a Single-Employer Defined Benefit Pension Plan
Schedule of Changes in Net Pension Liability (Asset) and Related Ratios Last Ten Years (in thousands)
2016 2017 2018 2019 2020
Total pension liability
Serv ice cost 103$ 96$ 92$ 66$ 49$ Interest on the total pension liability 23,416 22,759 20,877 20,095 19,363 Changes of assumptions - (16,246) 862 (927) ( 1,593)
Differences between expected and actual experience (1,173) (3,701) (2,457) 304 (3,768) Benefit payments, including refunds of employee contributions (32,683) (32,171) (31,583) (31,134) (30,457) Net change in total pension liability (10,337) (29,263) (12,209) (11,596) (16,406) Total pension liability -- beginning 376,478 366,141 336,878 324,669 313,073 Total pension liability -- ending (a) 366,141$ 336,878$ 324,669$ 313,073$ 296,667$ Plan fiduciary net position
Contributions - employer 8,645$ 8,645$ 8,645$ 7,507$ 4,410$ Contributions - employee 146 63 55 49 25 Net inv estment income (loss) 7,799 26,803 20,982 18,537 7,591 Benefits payments, including refunds of employee contributions (32,683) (32,171) (31,583) (31,134) (30,457) Net change in fiduciary net position (16,093) 3,340 (1,901) (5,041) (18,431) Plan fiduciary net position -- beginning 301,263 285,170 288,510 286,609 281,568 Plan fiduciary net position -- ending (b) 285,170$ 288,510$ 286,609$ 281,568$ 263,137$ Net pension liability (asset)-- ending (a) - (b) 80,971$ 48 ,368$ 38,060$ 31,505$ 33,530$ Plan fiduciary net position as a percentage of the total pension liability 77.89% 85.64% 88.28% 89.94% 88.70%
Covered payroll * 1,020$ 1,049$ 921$ 678$ 362$ Net pension liability (asset) as a percentage of covered payroll 7938.33% 4610.87% 4132.46% 4646.76% 9262.43% Meas urement date June 30, 2016 June 30, 2017 June 30, 2018 June 30, 2019 June 30, 2020 Notes to the Required Supplementary Information
* Covered payroll was restated during fiscal year 2016 to reflect the implementation of GASB 82.

Fis cal Year
124

City of Sacramento
Required Supplementary Information
Sacramento City Employees’ Retirement System,
a Single-Employer Defined Benefit Pension Plan
Schedule of Changes in Net Pension Liability (Asset) and Related Ratios Last Ten Years (in thousands)
2021 2022 2023 2024 2025
Total pension liability
Serv ice cost 18$ 6$ 5$ 1$ 2$ Interest on the total pension liability 18,342 16,098 15,407 14,899 14,173 Changes of assumptions 2,673 218 - - - Differences between expected and actual experience (6,349) 5 3,355 (320) ( 5,984)
B
enefit payments, including refunds of employee contributions (28,992) (28,145) (27,501) (26,978) (26,395) Net change in total pension liability (14,308) (11,818) (8,734) (12,398) (18,204) Total pension liability -- beginning 296,667 282,359 270,541 261,807 249,409 Total pension liability -- ending (a) 282,359$
270,541$ 261,
807$ 249,
409$ 2
31,205$
Plan fiduciary net position
Contributions - employer 3,822$ 3,479$ -$ 1
,399$ 1,362$
Contributions - employee 16 9 3 1 1 Net investment income (loss) 73,150 (32,305) 23,293 29,109 24,889 Benefits payments, including refunds of employee contributions (28,992) (28,145) (27,501) (26,978) (26,395) Net change in fiduciary net position 47,996 (56,962) (4,205) 3,531 (143) P
lan fiduciary net position -- beginning 263,137 311,133 254,171 249,966 253,497 Plan fiduciary net position -- ending (b) 311,133$
254,171$ 249,
966$ 253,
497$ 2
53,354$
Net pension liability (asse t)-- ending (a) - (b) (28,774)$ 16,370$ 11,841$ (4,088)$ ( 22,149)$ Plan fiduciary net position as a percentage of the total pension liability 110.19% 93.95% 95.48% 101.64% 109.58% Covered payroll * 270$ 189$ 103$ 87$ 91$ N
et pension liability (asset) as a percentage of covered payroll -10657.04% 8661.38% 11496.12% -4698.85% -24339.56% Meas urement date June 30, 2021 June 30, 2022 June 30, 2023 June 30, 2024 June 30, 2025 Fiscal Year
125

City of Sacramento
Required Supplementary Information
Sacramento City Employees’ Retirement System,
a Single-Employer Defined Benefit Pension Plan
Schedule of Contributions
Last Ten Years (in thousands)
2016 2017 2018 2019 2020
Actuarially determined contributions 8,645$ 8,330$ 8,267$ 5,268$ 4,410$ Contributions in relation to the actuarially determined contributions 8,645 8,645 8,645 7,507 4,410 Contribution deficiency (excess) -$ (315)$ (378)$ (2,239)$ - $ Covered payroll * 1,020$ 1,049$ 921 $ 678 $ 362 $ Contributions as a percentage of covered payroll 848% 824% 939% 1107% 1218% Notes to the Required Supplementary Information
Valuation date: 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 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/Finance/Accounting/Reporting.

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

CalPERS 2000-2019 Mortality Tables with Scale MP-2021
Fis cal Year
126

City of Sacramento
Required Supplementary Information
Sacramento City Employees’ Retirement System,
a Single-Employer Defined Benefit Pension Plan
Schedule of Contributions
Last Ten Years (in thousands)
2021 2022 2023 2024 2025
Actuarially determined contributions 3,822$ 3,479$ - $ 1,399$ 1,362$
Contributions in relation to the actuarially determined contributions 3,822 3,479 - 1 ,399 1,362
Contribution deficiency (excess) -$ - $ - $ - $ - $
Covered payroll * 270$ 189 $ 103 $ 87$ 91$ Contributions as a percentage of covered payroll 1416% 1841% 0% 1608% 1497% Notes to the Required Supplementary Information
Valuation date: 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 Fis cal Year
127

City of Sacramento
Required Supplementary Information
Schedule of Changes in Net OPEB Liability and Related Ratios Last Ten Years* (in thousands)
2018 2019 2020 2021
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)
11,361 10,582 6,243 10,185
15,084 26,445 37,027 43,270
26,445$ 37,027$ 43,270$ 53,455$
389,512$ 362,846$ 248,904$ 244,249$

6.36% 9.26% 14.81% 17.96%
237,926$ 236,885$ 245,622$ 261,187$
163.71% 153.17% 101.34% 93.51%
June 30, 2017 June 30, 2018 June 30, 2019 June 30, 2020 Net change i n fiduciary net po sition
Plan fiduciary net po sition -- beginning
Plan fiduciary net po sition -- ending (b)
Net OPEB liability -- ending (a ) - (b)
Plan fi duciary net position as a percentage o f the total OPEB liability
Covered payroll
Net OPEB liability as a percentage of covered payroll
Mea surement date
Notes to the Required Supplementary Information
* Fiscal year 2018 was the first year of implementation, therefore, only eight years are shown.

Fiscal Year
128

City of Sacramento
Required Supplementary Information
Schedule of Changes in Net OPEB Liability and Related Ratios Last Ten Years* (in thousands)
2022 2023 2024 2025
Total OPEB liability
Serv ice cost 5,919$ 5,259$ 5,356$ 5,695$ Interest on the total OPEB liability 19,968 16,803 17,208 18,398 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) (16,033) Net change in total OPEB liability (26,092) 6,014 19,066 8,060 Total OPEB liability -- beginning 297,704 271,612 277,626 296,692 Total OPEB liability -- ending (a) 271,612$ 277,626$ 296,692$ 304,752$ Plan fiduciary net position
Contributions - employer 21,687$ 24,675$ 23,167$ 23,184$ Contributions - employee - - - -
Net inv estment income (loss) 15,311 (12,256) 5,839 10,985 Benefit payments (15,625) (16,048) (15,321) (16,033) Administrative expense (21) (22) (24) (31)
21,352 (3,651) 13,661 18,105
53,455 74,807 71,156 84,817
74,807$ 71,156$ 84,817$ 102,922$
196,805$ 206,470$ 211,875$ 201,830$

27.54% 25.63% 28.59% 33.77%
249,162$ 244,497$ 242,374$ 238,736$

78.99% 84.45% 87.42% 84.54%
Net change i n fiduciary net po sition
Plan fiduciary net po sition -- beginning
Plan fiduciary net po sition -- ending (b)
Net OPEB liability -- ending (a) - (b )
Plan fiduciary net p osition as a percentage of t he total OP EB liability
Covered payroll
Net OPEB liability as a percentage of covered payroll
Mea surement date June 30, 2021 June 30, 2022 June 30, 2023 30-Jun-24 Fiscal Year
129

City of Sacramento
Required Supplementary Information
OPEB Schedule of Contributions
Last Ten Years* (in thousands)
2018 2019 2020 2021
36,393$ 34,454$ 36,155$ 25,548$
21,072 18,406 24,598 21,687
15,321$ 16,048$ 11,557$ 3,861$
236,885$ 245,622$ 261,187$ 249,162$

8.90% 7.49% 9.42% 8.70%
Actuarially determined contributions
Contributions in relation to the actuarially determined contributions Contribution deficiency (excess)
Covered payroll
Contributions as a percentage of covered payroll
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, Level % of pay
Amortization method Level % of payroll over a 14-year fixed 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 eight years are shown.

Non-Medicare - 8.50% for 2025, decreasing to an ultimate rate of 3.45% for 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 rate of 3.45% in 2076 Fiscal Year
130

City of Sacramento
Required Supplementary Information
OPEB Schedule of Contributions
Last Ten Years* (in thousands)
2022 2023 2024 2025
26,879$ 22,407$ 23,334$ 24,934$
24,675 23,167 23,184 23,959
2,204$ (760)$ 150$ 975$
244,497$ 242,374$ 238,736$ 230,763$

10.09% 9.56% 9.71% 10.38%
Actuarially determined contributions
Contributions in relation to the actuarially determined contributions Contribution deficiency (excess)
Covered payroll
Contributions as a percentage of covered payroll
Notes to the Required Supplementary Information
Valuation date: 6/30/2019 6/30/2021 6/30/2021 6/30/2023 Fiscal Year
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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, 2025
(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 231,608$ 2,713$ 265,563$ 7,844$ 507,728$ Cash and investments held by fiscal agent - 126 - - 126 Receivables, net:

Taxes 7,533 - - - 7,533
Accounts 6,126 - 26,638 - 32,764
Loans 44,954 - - - 44,954
Intergovernmental 34,721 9,855 40,284 - 84,860
Leases 754 2,863 - - 3,617
Interest 1,769 25 948 36 2,778
Prepaid items 13 - - - 13
Restricted assets:

Cash and investments held by City 222 - 10,562 - 10,784 Cash and investments held by fiscal agent - 5,509 150 - 5,659 Total assets 327,700
$ 21,091$ 344,145$ 7,880$ 700,816$

LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities:

Accounts payable 19,622$ -$ 28,817$ 66$ 48,505$ Accrued payroll 83 - - - 83
Matured notes and interest payable 667 - - - 667
Due to other funds - - 10,909 - 10,909
Deposits 1,136 456 105 - 1,697
Unearned revenue 7,007 - 12,487 - 19,494
Advances from other funds 19,278 - - - 19,278
Total liabilities 47,793 456 52,318 66 100,633
Deferred inflows of resources:

Unavailable revenue 33,346 9,855 40,978 - 84,179
Leases 725 2,692 - - 3,417
Total deferred inflows of resources 34,071 12,547 40,978 - 87,596 Fund balances:

Nonspendable:

Prepaid items 13 - - - 13
Leases 29 171 - - 200
Permanent fund principal - - - 578 578
Restricted:

Capital projects 34,410 - 280,913 - 315,323
Debt service 222 5,053 - - 5,275
Public works programs 26,903 - - - 26,903
Econom
ic development programs 81,352 - - - 81,352
Other programs 106,981 - 3,369 7,236 117,586 Committed:

Capital projects 1,400 - - - 1,400
Debt service - 733 - - 733
OPEB 8 - - - 8
Other programs 26,458 - - - 26,458
Assigned:

Debt service - 2,131 - - 2,131
Other programs 508 - - - 508
Unassigned (32,448) - (33,433) - (65,881)
Total fund balances 245,836 8,088 250,849 7,814 512,587 Total liabilities, deferred inflows of resources
and fund balances 327,700$ 21,091$ 344,145$ 7,880$ 700,816$ 133

City of Sacramento
Other Governmental Funds
Combining Statement of Revenues, Expenditures
and Changes in Fund Balances
For the Fiscal Year Ended June 30, 2025
(in thousands)
Other Other Other Total
Special Debt Capital Other
Revenue Service Projects Permanent Governmental
Funds Funds Funds Funds Funds
Revenues:

Taxes 15,893$ -$ 2,789$ -$ 18,682$
Intergovernmental 83,745 678 77,970 - 162,393
Charges for services 31,917 - 47 - 31,964
Fines, forfeits and penalties 202 - - - 202
Interest, rents, and concessions 10,309 2,088 9,689 830 22,916 Community service fees 753 - 31,180 - 31,933
Assessment levies 67,965 - 1,232 - 69,197
Contributions and donations 889 - 43,209 - 44,098
Miscellaneous 94 - - - 94
Total revenues 211,767 2,766 166,116 830 381,479 Expenditures:

Current:

General government 51,842 - 20 257 52,119
Police 7,631 - - - 7,631
Fire 4,307 - - - 4,307
Public works 29,149 - 8,757 - 37,906
Convention and cultural services 13,033 - - - 13,033
Youth, parks, and community enrichment 13,050 - 523 - 13,573 Comm
unity development 14,722 - 30,643 - 45,365
Community response 3,048 - - 3,048
Library 9,888 - - - 9,888
Utilities 421 - - - 421
Capital outlay 8,438 - 112,159 - 120,597
Debt service:

Principal 1,914 11,985 4,622 - 18,521
Interest and fiscal charges 1,073 8,262 2,791 - 12,126 Total expenditures 158,516 20,247 159,515 257 338,535 Excess (deficiency) of revenues over
(under) expenditures 53,251 (17,481) 6,601 573 42,944 Other financing sources (uses):

Transfers in 10,340 17,598 142 - 28,080
Transfers out (26,601) - (1,628) - (28,229) Issuance of long-term debt 1,578 - 2,791 - 4,369
Total other financing sources (uses) (14,683) 17,598 1,305 - 4,220 Changes in fund balances 38,568 117 7,906 573 47,164
Fund balances, beginning of year 207,268 7,971 242,943 7,241 465,423 Fund balances, end of year 245,836$ 8,088$ 250,849$ 7,814$ 512,587$ 134

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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City of Sacramento
Other Special Revenue Funds
Combining Balance Sheet
June 30, 2025
(in thousands)
Transportation Culture and Parks and Economic
and Development Leisure Recreation Development
Fund Fund Fund Fund
ASSETS
Cash and investments held by City 79,153$ 7,603$ 9,591$ 43,185$ Receivables, net:

Taxes - - - 7,290
Accounts 469 631 20 11
Loans - - - 44,954
Intergovernmental - - 56 -
Leases - 509 245 -
Interest 326 - 4 1,439
Prepaid items - - - -
Restricted assets:

Cash and investments held by City - 222 - -
Total assets 79,948$ 8,965$ 9,916$ 96,879$

LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities:

Accounts payable 470 $ 43$ 23$ 514$
Accrued payroll - 16 25 13
Matured notes and interest payable - 667 - -
Deposits 693 174 - -
Unearned revenue 1,188 19 - -
Advances from other funds - 4,278 - 15,000
Total liabilities 2,351 5,197 48 15,527
Deferred inflows of resources:

Unavailable revenue 367 9 55 -
Leases - 489 236 -
Total deferred inflows of resources 367 498 291 -
Fund balances:

Nonspendable:

Prepaid items - - - -
Leases - 20 9 -
Restricted:

Capital projects 25,932 13 4,738 -
Debt service - 222 - -
Public works programs 26,903 - - -
Economic development programs - - - 81,352
Other programs - 594 4,768 -
Committed:

Capital projects 157 1,243 - -
OPEB - 8 - -
Other programs 24,238 662
260 -
Assigned:

Other programs - 508 - -
Unassigned - - (198) -
Total fund balances 77,230 3,270 9,577 81,352
Total liabilities, deferred inflows of resources
and fund balances 79,948$ 8,965$ 9,916$ 96,879$