NOTWITHSTANDING ANYTHING IN THIS AGREEMENT, CLARITI HEREBY DISCLAIMS ANY AND ALL LIABILITY THAT MAY ARISE IN CONNECTION WITH
THIRD-PARTY SOFTWARE OR MATERIALS AND THEIR USE OR INCLUSION IN OR WITH THE SERVICES, INCLUDING WITHOUT LIMITATION THE APEX PLATFORM AND SALESFORCE.COM, AND ANY CHANGES MADE BY SALESFORCE.COM TO THE APEX PLATFORM THAT MAY IMPACT THE SERVICES.
THIS SECTION WILL APPLY TO THE FULLEST EXTENT PERMITTED BY LAW.
12. LIABILITY LIMITATION
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT, CLARITI’S MAXIMUM LIABILITY TO THE CUSTOMER UNDER THIS AGREEMENT WILL NOT EXCEED THE AGGREGATE AMOUNT OF SAAS FEES PAID BY THE CUSTOMER TO CLARITI DURING THE TWELVE (12) MONTH PERIOD PRECEDING THE EVENT GIVING RISE TO THE CLAIM.
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT, CLARITI WILL NOT BE LIABLE FOR ANY INDIRECT, PUNITIVE, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES ARISING OUT OF THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION, LOSS OF BUSINESS, REVENUE, PROFITS,
GOODWILL, USE OR OTHER ECONOMIC ADVANTAGE) HOWEVER THEY ARISE, WHETHER IN BREACH OF CONTRACT, BREACH OF WARRANTY,
OR IN TORT, AND EVEN IF CUSTOMER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND THE CUSTOMER HEREBY RELEASES CLARITI OF SAME. IN ANY EVENT, CLARITI’S LIABILITY UNDER THIS AGREEMENT WILL BE LIMITED ONLY TO DIRECT, VERIFIABLE DAMAGES ARISING FROM CLARITI’S MATERIAL NON-FULFILMENT OR BREACH OF ANY WARRANTY OR COVENANT, OR ANY MATERIAL MISREPRESENTATION, EXPRESSLY PROVIDED UNDER THIS AGREEMENT.
THIS SECTION WILL APPLY TO THE FULLEST EXTENT PERMITTED BY LAW.
13. GENERAL
13.1 Entire Agreement. This Agreement, which includes: (a) each Order; (b) any Change Order; and (c) the SFDC Agreement; constitutes the final, complete and exclusive agreement between the parties with respect to the subject matter hereof, and supersedes any prior or Docusign Envelope ID: 0DC1B09A-5BFD-4AB5-BFE0-A40E4872C87D
4.B.b
Packet Pg. 295 Attachment: Fully_Executed_Speridian_Contract (7195 : Award Maintenance Agreement to Clariti for 3 Additional Years of Permitting System 7 CLARITI CLOUD INC.
contemporaneous agreement. Unless otherwise expressly provided by this Agreement, to the extent of any conflict, the following order of precedence will apply: (1) this Agreement; (2) a Change Order; (3) an Order; and (4) subject to Section 1.2, the SFDC Agreements.
13.2 Interpretation. Headings in this Agreement are for convenience of reference only. Any rules of construction relating to interpretation against the drafter of an agreement will not apply to this Agreement. The word “including” (or includes) and words to the same or similar effect will be interpreted to mean “including without limitation” (or includes without limitation). Words importing the singular number only include the plural and vice versa. Words importing either gender include both genders. Except as expressly set forth in this Agreement, the parties’ respective rights and remedies under this Agreement are cumulative and not exclusive of any other rights or remedies to which the parties may be lawfully entitled under this Agreement or at law or equity, and the parties will be entitled to pursue all of their respective rights and remedies concurrently, consecutively and alternatively.
13.3 Assignment and Enurement. Customer may not assign this Agreement without CLARITI’s prior written consent, which consent may be withheld in CLARITI’s discretion. CLARITI may assign all or any portion of its rights and interests under the Agreement in its discretion without consent of the Customer. Users are not parties to or beneficiaries of this Agreement. The provisions of this Agreement will enure to the benefit of and be binding upon the parties and their respective successors and permitted assigns.
13.4 Publicity. CLARITI may reference Customer in CLARITI’s advertising and promotional activities and materials and may list Customer in any listing or directory of CLARITI customers. Upon request by CLARITI, Customer may, but will have no obligation to, provide CLARITI with Customer’s trademark or logos for use in such promotional materials, lists and directories.
13.5 Waiver and Amendment. Except as expressly provided herein, no modification, amendment or waiver of any provision of this Agreement will be effective unless in writing and signed by the parties hereto. No failure or delay by a party in exercising any right, power, or remedy under this Agreement, except as specifically provided herein, will operate as a waiver of any such right, power or remedy.
13.6 Governing Law. If the Customer’s address provided in the signature block of this Agreement is: (a) in Canada or the United States, then this Agreement will be governed by the laws of the Customer’s province or state and the federal laws applicable therein, and the parties will exclusively submit to such jurisdiction; and (b) outside of Canada and the United States, then this Agreement will be governed by the laws of the province of British Columbia and the federal laws of Canada applicable therein, and the parties will exclusively submit to the jurisdiction of British Columbia. Notwithstanding the foregoing, each party will be entitled to seek injunctive or other equitable relief in any jurisdiction with a reasonable connection to the subject matter of this Agreement.
13.7 Force Majeure. Notwithstanding any other provision of this Agreement, CLARITI will not be liable to Customer for any delay in performing or failure to perform any of its obligations under this Agreement to the extent performance is delayed or prevented due to any cause or causes that are beyond CLARITI’s reasonable control. Any delay or failure of this kind will not be deemed to be a breach of this Agreement by CLARITI, and the time for CLARITI’s performance of the affected obligation will be extended by a period that is reasonable in the circumstances.
13.8 Notices. CLARITI may deliver Orders, invoices and other notices to Customer by email, facsimile, or delivery to the addresses on record in CLARITI’s Customer file. Customer will give all notices to CLARITI under this Agreement in writing delivered by courier, by email, or by facsimile transmission to CLARITI’s current address for delivery specified on in the signature block of this Agreement, as may be updated from time to time with notice.
13.9 Currency. All monetary amounts under this Agreement are in the currency of the United States, except where expressly provided otherwise.
13.10 Independent Contractors. The parties are independent contractors. Neither party will be deemed to be an employee, agent, partner, joint venturer or legal representative of the other for any purpose and neither party will have any right, power or authority to create any obligation or responsibility on behalf of the other.
13.11 Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, then such provision(s) will be construed, as nearly as possible, to reflect the intentions of the invalid or unenforceable provision(s), with all other provisions remaining in full force and effect.
13.12 Insurance. Prior to commencing work, SaaS Provider must procure, maintain and pay for insurance against claims for injuries to third party persons or damage to third party property that may arise as a direct result of Saas Provider’s performance of the Services or by performance of the Services by Vendor’s agents, representatives, employees or subconsultants for the duration of this Agreement. SaaS Provider must obtain insurance that, at a minimum, meets the requirements for insurance set forth in Exhibit C, Insurance Requirements and Verifications.
13.13 Execution in Counterparts. This Agreement may be executed in counterparts with the same effect as if both parties hereto had executed the same document. All counterparts shall be construed together and shall constitute a single Agreement. Any signature to this Agreement transmitted electronically through DocuSign or PDF shall be deemed an original signature and be binding upon the parties hereto (it being agreed that such electronic signature shall have the same force and effect as an original signature)..
14. DEFINITIONS
“Anonymized Data” means Customer Data which has been stripped, manipulated or combined to provide generalized anonymous information that cannot be reverse-engineered to identify the Customer or identify an individual. “CLARITI Marks” means CLARITI™, CLARITI CLOUD INC.™ and related logos and marks of CLARITI. “CLARITI Systems” means the information technology infrastructure used by or on behalf of CLARITI in performing the Services, including all computers, software, hardware, databases, electronic systems and networks. “Confidential Information” means information that is not generally known to the public or that otherwise constitutes a trade secret under applicable law, including without limitation, technical information, know-how, technology, software applications and code, prototypes, ideas, inventions, methods, improvements, data, files, information relating to customer identities and other customer information; provided that, Confidential Information does not Docusign Envelope ID: 0DC1B09A-5BFD-4AB5-BFE0-A40E4872C87D
4.B.b
Packet Pg. 296 Attachment: Fully_Executed_Speridian_Contract (7195 : Award Maintenance Agreement to Clariti for 3 Additional Years of Permitting System 8 CLARITI CLOUD INC.
include any of the foregoing information that Receiving Party can demonstrate: (i) has entered into the public domain through no wrongful act or breach of any obligation of confidentiality by the Receiving Party; (ii) was in the lawful knowledge and possession of, or was independently developed by, the Receiving Party prior to the time it was disclosed to, or learned by, the Receiving Party hereunder as evidenced by written records; (iii) was rightfully received by Receiving Party from a third party without a breach of such third party’s obligations of confidentiality; or (iv) was approved in writing for release by the Disclosing Party. Confidential Information includes such information that was disclosed by the Disclosing Party to the Receiving Party prior to the Effective Date.
“Customer Data” means information, data and other content, in any form or medium, that is collected, downloaded or otherwise received, directly or indirectly, from the Customer or a User by or through the Services. “Customer Systems” means Customer’s information technology infrastructure, including computers, software, hardware, databases, electronic systems (including database management systems), networks and internet connectivity. “Disclosing Party” means the party who discloses or otherwise divulges Confidential Information to the other party. “Intellectual Property Rights” means any and all right, title and interest in and to any and all trade secrets, patents, copyrights, service marks, trademarks, know-how, trade names, rights in trade dress and packaging, moral rights, rights of publicity and similar rights of any type, continuations, or other registrations with respect to any of the foregoing, under the laws or regulations of any foreign or domestic governmental, regulatory, or judicial authority. “Personal Information” means information about an identifiable individual within the meaning of the Personal Information Protection Act (British Columbia). “Receiving Party” means the party who receives or otherwise obtains Confidential Information from the Disclosing Party or from the Disclosing Party’s employees, agents, representatives, consultants, customers, contractors or suppliers. “Services” means the SAAS Services.
***
IN WITNESS WHEREOF, the parties, by their duly authorized representatives, have duly executed this Agreement.
CLARITI CLOUD INC.
By
_____________________________________________________________________________________ Authorized Signatory Date
_____________________________________________________________________________________ Name Title
Email for Notice:
CUSTOMER:
By
____________________________________________________________________________________ Authorized Signatory Date
_____________________________________________________________________________________ Name Title
Customer’s
Address
Mailing Address:
Fax Email
Docusign Envelope ID: 0DC1B09A-5BFD-4AB5-BFE0-A40E4872C87D
4.B.b
Packet Pg. 297 Attachment: Fully_Executed_Speridian_Contract (7195 : Award Maintenance Agreement to Clariti for 3 Additional Years of Permitting System EXHIBIT “A”
SALESFORCE.COM END USER SUBSCRIPTION AGREEMENT
FOR PLATFORM EMBEDDED EDITION OEM SERVICES SUBSCRIPTIONS This governs the Customer’s access to and use of the Apex Platform and related services provided by Salesforce.com. This SFDC Agreement exempts Salesforce.com and other persons from liability or limits their liability and contains other important provisions that Customer should read. By signing the CLARITI Software Agreement, Customer acknowledges and signifies that it has read, understood, and agreed to this SFDC Agreement. If Customer does not accept and agree to this Agreement, Customer may not access or use the Apex Platform.
Definitions.
In this Agreement:
“Addendum Services” mean the Platform, to the extent that it is hosted on the Public Cloud Infrastructure. “Addendum Services” exclude, without limitation, any professional services, the CLARITI Application, applications listed on the AppExchange, and other third party applications and services.
“AppExchange” means the online directory of on-demand applications that work with the Service, located at http://www.appexchange.com or at any successor websites. “CLARITI” means Clariti Cloud Inc.
“CLARITI Application” means the proprietary, modular, web-based software solution produced by Clariti Cloud Inc. “Documentation” means the Trust and Compliance documentation for the Platform, and its usage guides and policies, as updated from time to time, accessible via help.salesforce.com or login to the applicable Addendum Service. “Org” means a separate set of Your Data and SFDC product customizations held by SFDC in a logically separated database (i.e., a database segregated through password-controlled access).
“Platform” means the online, Web-based platform service provided by SFDC to CLARITI in connection with CLARITI’s provision of the CLARITI Application to You.
“SFDC Service” means the online, Web-based application and platform service generally made available to the public via http://www.salesforce.com and/or other designated websites, including associated offline components but excluding AppExchange applications.
“SFDC” means salesforce.com.
“Users” means Your employees, representatives, consultants, contractors or agents who are authorized to use the Service subject to the terms of this SFDC Agreement as a result of a subscription to the CLARITI Application having been purchased for such User, and have been supplied user identifications and passwords by You (or by Salesforce.com or CLARITI at Your request). “You” and “Your” means the customer entity which has contracted to purchase subscriptions to use the CLARITI Application subject to the conditions of this SFDC Service Agreement, together with any other terms required by CLARITI. “Your Data” means all electronic data or information submitted by You as and to the extent it resides in the Service.
Use of Service.
Each User subscription to the CLARITI Application shall entitle one User to use the Service via the CLARITI Application, subject to the terms of this SFDC Service Agreement, together with any other terms required by CLARITI. User subscriptions cannot be shared or used by more than one User (but may be reassigned from time to time to new Users who are replacing former Users who have terminated employment with You or otherwise changed job status or function and no longer require use of the Service). For clarity, Your subscription to use the Platform hereunder does not include a subscription to use the SFDC Service or to use it in connection with applications other than the CLARITI Application. If You wish to use the SFDC Service or any of its functionalities or services, to use another application other than the CLARITI Application, or to create or use additional custom objects beyond those which appear in the CLARITI Application in the form that it has been provided to You by CLARITI, visit www.salesforce.com to contract directly with SFDC for such services. In the event Your access to the CLARITI Application provides You with access to the SFDC Service generally or access to any SFDC Service functionality within it that is in excess to the functionality described in the CLARITI Application’s user guide, and You have not separately subscribed under a written contract with SFDC for such access, then You agree to not access and use such functionality, and You agree that Your use of such functionality, Your use of applications other than the CLARITI Application, or Your creation or use of additional custom objects in the CLARITI Application beyond that which appears in the CLARITI Application in the form that it has been provided to You by CLARITI, would be a material breach of this Agreement.
Notwithstanding any access You may have to the Platform or the SFDC Service via the CLARITI Application, CLARITI is the sole provider of the CLARITI Application and You are entering into a contractual relationship solely with CLARITI. In the event that CLARITI ceases operations or otherwise ceases or fails to provide the CLARITI Application, SFDC has no obligation to provide the CLARITI Application or to refund You any fees paid by You to CLARITI.
You (i) are responsible for all activities occurring under Your User accounts; (ii) are responsible for the content of all Your Data; (iii) shall use commercially reasonable efforts to prevent unauthorized access to, or use of, the Platform and the SFDC Service, and shall notify CLARITI or Salesforce.com promptly of any such unauthorized use You become aware of; and (iv) shall comply with all applicable local, state, federal and foreign laws and regulations in using the Platform and the SFDC Service.
You shall use the Platform and the SFDC Service solely for Your internal business purposes and shall not: (i) license, sublicense, sell, resell, rent, lease, transfer, assign, distribute, time share or otherwise commercially exploit or make the Platform or the SFDC Service available to any third Docusign Envelope ID: 0DC1B09A-5BFD-4AB5-BFE0-A40E4872C87D
4.B.b
Packet Pg. 298 Attachment: Fully_Executed_Speridian_Contract (7195 : Award Maintenance Agreement to Clariti for 3 Additional Years of Permitting System party, other than to Users or as otherwise contemplated by this SFDC Service Agreement; (ii) send spam or otherwise duplicative or unsolicited messages in violation of applicable laws; (iii) send or store infringing, obscene, threatening, libelous, or otherwise unlawful or tortious material, including material that is harmful to children or violates third party privacy rights; (iv) send or store viruses, worms, time bombs, Trojan horses and other harmful or malicious code, files, scripts, agents or programs; (y) interfere with or disrupt the integrity or performance of the Platform or the SFDC Service or the data contained therein; or (vi) attempt to gain unauthorized access to the Platform or the SFDC Service or its related systems or networks.
You shall not (i) modify, copy or create derivative works based on the Platform or the SFDC Service; (ii) frame or mirror any content forming part of the Platform or the SFDC Service, other than on Your own intranets or otherwise for Your own internal business purposes; (iii) reverse engineer the Platform or the SFDC Service; or (iv) access the Platform or the SFDC Service in order to (A) build a competitive product or service, or (B) copy any ideas, features, functions or graphics of the Platform or the SFDC Service.
Use of Addendum Services. Customer will be responsible for Users’ compliance with this Addendum, the Documentation and the order form between CLARITI and Customer, and will comply with terms of service of any Third Party Applications with which Customer uses Addendum Services. Customer will not: (i) make the Addendum Services available to, or use the Addendum Services for the benefit of, anyone other than Customer or Users, unless expressly stated otherwise in the Documentation, (ii) sell, resell, license, sublicense, distribute, make available, rent or lease the Addendum Services, or include the Addendum Services in a service bureau or outsourcing offering, (iii) use the Addendum Services or Third Party Applications to store or transmit infringing, libelous, or otherwise unlawful or tortious material, or to store or transmit material in violation of third-party privacy rights, (iv) use the Addendum Services or any Third Party Applications to store or transmit Malicious Code, (v) interfere with or disrupt the integrity or performance of the Addendum Services or third-party data contained therein, (vi) attempt to gain unauthorized access to the Addendum Services or its related systems or network, (vii) permit direct or indirect access to or use of the Addendum Services in a way that circumvents a contractual usage limit, or use any Addendum Services to access or use any SFDC intellectual property except as permitted under this Addendum or the Documentation, (viii) copy the Addendum Services or any part, feature, function or user interface thereof, (ix) frame or mirror any part of any Addendum Services, other than framing on Customer’s own intranets or otherwise for its own internal business purposes, or as permitted in the Documentation, (x) reverse engineer the Addendum Services (to the extent such restriction is permitted by law), or (xi) access any Addendum Services in order to build a competitive product or service or to benchmark with a non-SFDC product or service. Customer’s or a User’s intentional violation of the foregoing, or any use of the Addendum Services in breach of the SFDC Service Agreement , Documentation or the order form between CLARITI and Customer, by Customer or Users that in SFDC’s judgment imminently threatens the security, integrity or availability of SFDC’s services, may result in SFDC’s immediate suspension of the Addendum Services. SFDC will use commercially reasonable efforts under the circumstances to provide Customer with an opportunity to remedy such violation or threat prior to any such suspension. Customer may only submit to the Addendum Services, and use the Addendum Services to collect, store and/or process, Customer Data in a manner that is permitted in the applicable Documentation and by applicable laws and government regulations.
External-Facing Services. If You subscribes to any Addendum Services for sending electronic messages or for the creation and hosting of, or for posting content on, external-facing websites, such use is subject to SFDC’s External-Facing Services Policy at http://www.salesforce.com/company/legal/agreements.jsp, as may be applicable to an Addendum Service and You are solely responsible for complying with applicable law in Your use of any cookies or other tracking technologies.
Third-Party Providers. CLARITI and other third-party providers, some of which may be listed on pages within SFDC’s website and including providers of AppExchange applications, offer products and services related to the Platform, the SFDC Service, and/or the CLARITI Application, including implementation, customization and other consulting services related to customers’ use of the Platform and/or the SFDC Service, and applications (both offline and online) that interoperate with the Platform, SFDC Service, and/or the CLARITI Application, such as by exchanging data with the Platform, the SFDC Service, and/or the CLARITI Application, or by offering additional functionality within the user interface of the Platform, the SFDC Service, and/or the CLARITI Application through use of the Platform and/or SFDC Service’s application programming interface. SFDC does not warrant any such third-party providers or any of their products or services, including but not limited to the CLARITI Application or any other product or service of CLARITI, whether or not such products or services are designated by SFDC as “certified,” “validated” or otherwise. Any exchange of data or other interaction between You and a third-party provider, including but not limited to the CLARITI Application, and any purchase by You of any product or service offered by such third-party provider, including but not limited to the CLARITI Application is solely between You and such third-party provider. In addition, from time to time, certain additional functionality (not defined as part of the Platform or SFDC Service) may be offered by SFDC or CLARITI to You, for an additional fee, on a passthrough or OEM basis pursuant to terms specified by the licensor and agreed to by You in connection with a separate purchase by You of such additional functionality. Your use of any such additional functionality shall be governed by such terms, which shall prevail in the event of any inconsistency with the terms of this SFDC Service Agreement.
Proprietary Rights. Subject to the limited rights expressly granted hereunder, SFDC reserves all rights, title and interest in and to the Platform and the SFDC Service, including all related intellectual property rights. No rights are granted to You hereunder other than as expressly set forth in this SFDC Service Agreement. The Platform and the SFDC Service is deemed SFDC confidential information, and You will not use it or disclose it to any third party except as permitted in this SFDC Service Agreement.
Compelled Disclosure. If either You or SFDC is compelled by law to disclose confidential information of the other party, it shall provide the other party with prior notice of such compelled disclosure (to the extent legally permitted) and reasonable assistance, at the other party’s cost, if the other party wishes to contest the disclosure.
Suggestions. You agree that SFDC shall have a royalty-free, worldwide, transferable, sublicensable, irrevocable, perpetual license to use or incorporate into any SFDC products or services any suggestions, enhancement requests, recommendations or other feedback provided by You or Your Users relating to the operation of the Platform and/or the SFDC Service.
Suspension and Termination. Your use of the Platform and the SFDC Service may be immediately terminated and/or suspended upon notice due to (a) a breach of the terms of this SFDC Service Agreement by You or any User, (b) the termination or expiration of CLARITI’s agreement with SFDC pursuant to which CLARITI is providing the Platform as part of the CLARITI Application to You, and/or (c) a breach by CLARITI of its obligations to SFDC with respect to the subscriptions it is providing to You in connection with this SFDC Service Agreement. If You use the CLARITI Application in combination with a SFDC Service Org other than the Org provisioned solely for use with the CLARITI Application (a “Shared org”), CLARITI shall be solely responsible for provisioning the CLARITI Application to You. With respect to any Shared org, You acknowledge and understand that (i) access to such Org, including the CLARITI Application used in connection with such Org, may be Docusign Envelope ID: 0DC1B09A-5BFD-4AB5-BFE0-A40E4872C87D
4.B.b
Packet Pg. 299 Attachment: Fully_Executed_Speridian_Contract (7195 : Award Maintenance Agreement to Clariti for 3 Additional Years of Permitting System suspended due to Your non-payment to SFDC or other breach of Your Agreement with SFDC, and (ii) in the event Your relationship with SFDC is terminated as a result of non-payment or other material breach of Your agreement with SFDC, Your Platform subscriptions would also be terminated. In no case will any such termination or suspension give rise to any liability of SFDC to You for a refund or other compensation.
Subscriptions Non-Cancelable. Subscriptions for the Platform and the SFDC Service are non- cancelable during a subscription term, unless otherwise specified in Your agreement with CLARITI.
Data Storage. The Platform and SFDC Service includes a certain cumulative amount of storage per User subscription for no additional charge.
Contact CLARITI for additional information. Additional storage may be available for purchase from the CLARITI.
No Warranty. SFDC MAKES NO WARRANTIES OF ANY KIND, INCLUDING BUT NOT LIMITED TO WITH RESPECT TO THE PLATFORM, THE SFDC SERVICE, AND/OR THE CLARITI Application, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE. TO THE MAXIMUM EXTENT PERMITTED BY LAW, SFDC
DISCLAIMS ALL CONDITIONS, REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO THE PLATFORM, THE SFDC SERVICE, AND/OR THE CLARITI Application, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT OF THIRD PARTY RIGHTS. WITHOUT LIMITING THE FOREGOING, SFDC DISCLAIMS ALL LIABILITY FOR ANY HARM OR DAMAGES CAUSED BY ANY THIRD-PARTY HOSTING PROVIDERS.
No Liability. IN NO EVENT SHALL SFDC HAVE ANY LIABILITY TO YOU OR ANY USER FOR ANY DAMAGES WHATSOEVER, INCLUDING BUT NOT LIMITED
TO DIRECT, INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES, OR DAMAGES BASED ON LOST PROFITS, HOWEVER
CAUSED AND, WHETHER IN CONTRACT, TORT OR UNDER ANY OTHER THEORY OF LIABILITY, WHETHER OR NOT YOU HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
Further Contact. SFDC may contact You regarding new SFDC service features and offerings.
Google Programs and Services. Platform or SFDC Service features that interoperate with Google programs and services depend on the continuing availability of applicable Google application programming interfaces (“APIs”) and programs for use with the Platform and the SFDC Service. If Google Inc. ceases to make such APIs and/or programs available on reasonable terms to SFDC, SFDC may cease providing such features without entitling You or CLARITI to any refund, credit, or other compensation.
Third Party Beneficiary. SFDC shall be a third party beneficiary to the agreement between You and CLARITI solely as it relates to this SFDC Service Agreement.
Org Migration. Migration of an Org to the Public Cloud Infrastructure will require planned downtime, during which it may be completely unavailable for use. Any existing service level agreement regarding the Addendum Services will not apply during an Org migration, however the parties will cooperate to minimize the impact of such downtime. SFDC will alert CLARITI and/or Customer to actions Customer must take prior to the Org migration, such as updating hard-coded references, as further described at this link. Migration of an Org to the Public Cloud Infrastructure is subject to availability on a quarterly basis, and the parties will cooperate reasonably to schedule such migration.
Docusign Envelope ID: 0DC1B09A-5BFD-4AB5-BFE0-A40E4872C87D
4.B.b
Packet Pg. 300 Attachment: Fully_Executed_Speridian_Contract (7195 : Award Maintenance Agreement to Clariti for 3 Additional Years of Permitting System Exhibit G
Insurance Requirements
Speridian shall procure and maintain for the duration of the Agreement insurance against claims that may arise from or in connection with the performance of the work hereunder by the Speridian, its agents, representatives, employees or subcontractors.
Minimum Scope and Limits of Insurance
Coverage shall be at least as broad as:
1. Commercial General Liability (CGL): Insurance Services Office Form CG 00 01 covering CGL on an “occurrence” basis, including products and completed operations, property damage, bodily injury and personal and advertising injury, with limits of no less than $1,000,000 per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location (Insurance Services Office Form CG 25 04) or the general aggregate limit shall be twice the required occurrence limit.
2. Workers’ Compensation: Workers’ Compensation insurance as required by the State of California, with Statutory Limits and Employers’ Liability Insurance with limits of no less than $1,000,000 per accident for bodily injury or disease (see footnote #1).
3. Technology Professional Errors and Omissions/Cyber Liability: Insurance with a limit of not less than $1,000,000 per occurrence or claim/$2,000,000 in the annual aggregate. Coverage shall be sufficiently broad to respond to the duties and obligations undertaken by Speridian in this Agreement and shall include, but not be limited to, claims involving infringement of intellectual property, including but not limited to infringement of copyright, trademark, invasion of privacy violations, information theft, release of private information, alteration of electronic information, extortion, and network security. The policy shall also provide coverage for breach response costs, regulatory fines and penalties, and credit monitoring expenses with limits sufficient to respond to these obligations. Further, the policy shall include, or be endorsed to include property damage liability coverage for damage to, alteration of, loss of, or destruction of electronic data or information “property” of the City of Santa Monica in the care, custody, and control of Speridian.
If Speridian maintains broader coverage or higher limits than the minimums shown above, the City of Santa Monica requires and shall be entitled to any broader coverage and higher limits maintained by Speridian. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City of Santa Monica.
Other Insurance Provisions
1. The insurance policies are to contain, or be endorsed to contain, the following provisions:
a. Additional Insured Status: The City of Santa Monica, its officers, officials, employees and volunteers are to be covered as additional insureds on the CGL policy with respect to liability arising out of work or operations performed by or on behalf of Speridian including materials, parts, or equipment furnished in connection with such work or operations. CGL coverage can be provided in the form of an endorsement to Speridian’s insurance (at least as broad as Insurance Services Office Form CG 20 10 11 85, or if not available, through the addition of a combination of (1) CG 20 10, CG 20 26, CG 20 33, or CG 20 38 and (2) CG 20 37).
b. Primary Coverage: For any claims related to this Agreement, Speridian’s insurance shall be primary coverage at least as broad as Insurance Services Offices Form CG 20 01 04 13 as respects the City of Santa Monica, its officers, officials, employees and volunteers. Any insurance or self-insurance maintained by the City of Santa Monica, its officers, officials, employees or volunteers shall be in Docusign Envelope ID: 0DC1B09A-5BFD-4AB5-BFE0-A40E4872C87D
4.B.b
Packet Pg. 301 Attachment: Fully_Executed_Speridian_Contract (7195 : Award Maintenance Agreement to Clariti for 3 Additional Years of Permitting System excess of Speridian’s insurance and shall not contribute with it. c. Notice of Cancellation: Each insurance policy required herein shall state that coverage shall not be cancelled except after notice has been given to the City of Santa Monica. d. Waiver of Subrogation: Speridian hereby grants to the City of Santa Monica a waiver of any right of subrogation which any insurer of said Speridian may acquire against the City of Santa Monica by virtue of payment of any loss. Speridian agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation, but this provision applies regardless of whether or not the City of Santa Monica has received a waiver of subrogation endorsement from the insurer.
Self-Insured Retentions
Self-insured retentions must be declared to and approved by the City of Santa Monica. The City of Santa Monica may require Speridian to purchase coverage with a lower deductible or retention or provide satisfactory proof of ability to pay losses and related investigations, claim administration, and defense expenses within the retention. The policy language shall provide, or be endorsed to provide, that the self-insured retention may be satisfied by either the named insured or City of Santa Monica.
Acceptability of Insurers
Insurance is to be placed with insurers authorized to conduct business in California with a current A.M. Best rating of no less than A:VII, unless otherwise acceptable to the City of Santa Monica.
Claims Made Policies
1. If the Professional Liability policy provides “claims made” coverage:
a. The Retroactive Date must be shown and must be before the date of this Agreement or the start of work.
b. The insurance must be maintained, and evidence of insurance must be provided for at least 5 years after completion of work.
c. If the policy is cancelled or not renewed, and not replaced with another “claims made” policy form with a Retroactive Date prior to the effective Agreement date, Speridian must purchase “extended reporting” coverage for a minimum of 5 years after completion of work.
Verification of Coverage
Speridian shall furnish the City of Santa Monica with original certificates and amendatory endorsements (or copies of the applicable policy language effecting coverage provided by this clause). All certificates and endorsements are to be received and approved by the City of Santa Monica before work commences.
However, failure to obtain required documents prior to the work beginning shall not waive Speridian’s obligation to provide them. The City of Santa Monica reserves the right to require complete, certified copies of all required insurance policies, including the endorsements required herein, at any time.
Failure to Maintain Insurance Coverage
If Speridian, for any reason, fails to maintain insurance coverage which is required pursuant to this Agreement, the same shall be deemed a material breach of agreement. The City of Santa Monica, at its sole option, may terminate this Agreement and obtain damages from Speridian resulting from said breach. Alternatively, the City of Santa Monica may purchase such coverage (but has no special obligation to do so), and without further Docusign Envelope ID: 0DC1B09A-5BFD-4AB5-BFE0-A40E4872C87D
4.B.b
Packet Pg. 302 Attachment: Fully_Executed_Speridian_Contract (7195 : Award Maintenance Agreement to Clariti for 3 Additional Years of Permitting System notice to Speridian, the City may deduct from sums due to Speridian any premium costs advanced by the City for such insurance.
Subcontractors
Speridian shall require and verify that all subcontractors maintain insurance meeting all the requirements stated herein. All exceptions must be approved in writing by the Risk Manager.
Footnotes
1. Workers’ Compensation insurance coverage is not required if Speridian does not have employees.
Speridian must, however, execute the City’s Workers’ Compensation Coverage Exemption Declaration Form.
Docusign Envelope ID: 0DC1B09A-5BFD-4AB5-BFE0-A40E4872C87D
4.B.b
Packet Pg. 303 Attachment: Fully_Executed_Speridian_Contract (7195 : Award Maintenance Agreement to Clariti for 3 Additional Years of Permitting System City Council
Report
City Council Meeting: March 24, 2026
Agenda Item: 4.C
1 of 12
To: Mayor and City Council
From: Oscar Santiago, Director, Finance Department, Financial Operations Subject: Annual Comprehensive Financial Report (ACFR) for Year Ended June 30, 2025
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding that the Annual Comprehensive Financial Report is not a “project” subject to the California Environmental Quality Act (CEQA), and
2. Receive and file the City’s Annual Comprehensive Financial Report (ACFR), the Auditors’ Letter to Council, and the Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards for the City’s financial statements for the fiscal year ended June 30, 2025.
Summary
In compliance with accounting and financial reporting standards established by the Governmental Accounting Standards Board (GASB), the Annual Comprehensive Financial Report (ACFR) communicates the City’s financial condition and activity in a transparent and organized manner. The ACFR, included as Attachment A, presents historical and comparative information that can be useful to City staff and elected officials, external users such as debt rating agencies, businesses, other public agencies, bondholders, and City residents. A hard copy of the ACFR for the fiscal year ended June 30, 2025 (FY 2024-25) is available at the City Clerk’s office and is also available, along with ACFRs dating back to 2015, on the City’s website at:
https://www.santamonica.gov/santa-monica-budgets-and-annual-financial-reports
4.C
Packet Pg. 304
2 of 12
The ACFR is prepared annually by Finance staff and audited by the City’s independent audit firm, LSL, LLP and presented to the Audit Subcommittee before it is submitted to the full City Council for receipt and filing. For FY2024-25 the City used LSL to assemble the ACFR schedules and statements for issuance. The audit was performed in compliance with City Charter requirements. The independent auditors’ unmodified report, included within the ACFR, communicates that the ACFR, and audited information within, fairly present the City’s financial position for FY 2024-25. The City of Santa Monica has received an unqualified/unmodified audit report and has been awarded the Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association of the United States and Canada (GFOA) since it began participating in the program in FY 1983- 84 To make the ACFR more transparent, staff has provided an explanation for key financial performance indicators shown in the report.
LSL’s report on the City’s internal control over financial reporting and compliance (Attachment B) noted no instances of non-compliance. An additional submittal letter from LSL (Attachment C) stated that the City’s independent auditors encountered no difficulties and had no disagreements with management during the audit. If the auditors identified any adjustments that management elected not to adjust in the financial statements, they would be noted on the report under Corrected and Uncorrected Misstatements. There were none noted for FY 2024-25.
While the long-term economic outlook is positive, resources remain constrained. • General Fund revenues have slowed or flattened, and they remain below the levels they would have been had the economy not been disrupted by the pandemic.
• The City is experiencing significant cost increases coming from the persistent inflation.
• Toursim-driven revenues are being impacted by national policies including tariffs and immigration related actions that reduced
4.C
Packet Pg. 305
3 of 12
international visitation and significant impact of the Palisades fire in January 2025.
• Since March 2020, the City entered into settlement agreements totaling approximately $229.8 million with claimants in suits filed against the City arising out of allegations of sexual abuse by a former City employee and volunteer.
The Statement of Net Position, like a balance sheet, reported total assets and total deferred outflows of resources plus total liabilities and total deferred inflows of resources of the City. The total net position of the City for all activities was $1,521.1 million at June 30, 2025, compared to $1,491.0 million at June 30, 2024, as restated, which is an increase of $30.1 million or 2.0%. The net position for business-type activities, such as water, wastewater, stormwater, airport and transit services, increased $7.0 million and the net position for governmental activities, such as public safety, general government, library, community development and community services, increased $23.1 million.
The General Fund fund balance decreased by $6.5 million, to $168.1 million over the prior year. The decrease in fund balance reflects a drop in tourism and visitor‑related revenues, a primary funding source for the City’s general services. Because annual operating costs are largely aligned with annual revenues, reduced revenue without a commensurate decrease in expenses directly lowers the fund balance. The revenue decline was driven by national policies that reduced international visitation, as well as the January 2025 Palisades fire, which created misperceptions about local air quality and fire proximity. These tourism‑specific impacts were compounded by broader economic pressures, including elevated office vacancies associated with hybrid and remote work and persistent inflation, that further constrained revenue growth. Both transient occupancy taxes and sales taxes continue to lag behind prepandemic levels with transient occupancy tax declining as compared to FY2023-24 by $2.5 million.
4.C
Packet Pg. 306
4 of 12
The City’s three pension plans were approximately 80% funded with a combined unfunded long-term actuarial liability of approximately $485.3 million. All pension figures presented in the ACFR were based on California Public Employees’ Retirement System (CalPERS) GASB 68 valuations that had a measurement date of June 30, 2024. These valuations are used for financial reporting purposes only and are separate from the CalPERS funding valuations that are used to calculate the City’s annual contributions.
Staff presented the ACFR to the Audit Subcommittee of the City Council on March 17, 2026, for a detailed review before presenting the report to the Council as a Consent Calendar item. The Subcommittee has received the annual ACFR report which included details of the audit process and the financial reports, a presentation by staff and the independent auditors, and an opportunity for Subcommittee members to ask questions of the auditors and staff.
Background
As required by the City Charter, financial statements were prepared by the City and audited by independent auditors. The City selected, LSL, its independent auditor through a competitive procurement process. Members of the Audit Subcommittee were included as proposal reviewers. The City has used the same outside auditors for the previous nine years.
The quality of the City’s financial reporting and the ACFR are measured in two ways:
1) an unmodified audit report by the independent auditors; and 2) the Certificate of Achievement for Excellence in Financial Reporting, awarded by GFOA, the highest form of recognition in governmental accounting and financial reporting.
Auditors follow audit industry standards established by the American Institute of Certified Public Accountants (AICPA). These standards require auditors to provide an opinion on specific areas of the City’s financial statements based on observations, inquiries, testing of transactions, and analysis.
4.C
Packet Pg. 307
5 of 12
Discussion
The ACFR for FY 2024-25 received an unmodified opinion by LSL. An unmodified opinion communicates that the financial statements are fairly presented in all material aspects and that the information used in the report is reliable. In their written communications to Council, the auditors noted that they encountered no significant difficulties with management in performing or completing the audit.
The Statement on Auditing Standards (SAS) 114 established standards for the auditors’ communication with those charged with governance. SAS 115 provides guidance on communicating matters related to the City’s internal controls over financial reporting that have been identified in an audit of the financial statements.
These statements require the auditors to consider and report on internal controls, significant audit findings, and other matters as prescribed in the standards as they relate to the audit of the financial statements.
The City of Santa Monica has received an unqualified/unmodified audit report and the GFOA Award since it first participated in the GFOA program in FY 1983-84.
The ACFR was presented to the Audit Subcommittee of the Council on March 17, 2026, by staff and Ryan Domino, the engagement partner from LSL. Audit Subcommittee members were given the opportunity to review the report and ask questions of the external auditor and staff.
Topics presented:
• Management’s and Auditor’s responsibilities
• Overall audit process and results
• Overall financial results of the City
• Auditors’, both internal and external, evaluation of the City’s financial reporting and related systems of internal control
4.C
Packet Pg. 308
6 of 12
• Pension reporting and liability, particularly the amortization of the unfunded liability
• Contingent liabilities possibly arising from existing claims against the City The City’s ACFR includes the following major sections and information:
Introductory Section
• Letter of Transmittal – prepared by management and used to communicate information on areas that may have an impact on the City’s finances now and in the future. This included economic factors at time of document preparation, as well as budget and management factors.
Financial Section (the main body of the ACFR for current year information) • Independent Auditors’ Report – the City’s report card on the content of the ACFR • Management’s Discussion and Analysis (MD&A) – provided an analytical overview of the City’s financial status and results for the year • Basic Financial Statements – reported finances at a point in time (assets - liabilities) and throughout the year (revenues - expenditures), and cash flows o City-Wide Statements – overview of financial information including all the City’s operations by financial activity
o Fund Financial Statements – a detailed look at funds, reporting on the Balance Sheet and Statement of Revenues, Expenditures and Changes in Fund Balance
o Notes to the Financial Statements (Notes) – a narrative explanation that accompanied the Basic Financial Statements
Required Supplementary and Supplementary Information Sections • Budget to Actual Comparisons – for all governmental funds with a legally adopted budget
• Pension Information – schedule of changes in the net pension liability and related ratios; schedule of contributions by plan
• OPEB Information – schedule of changes in the net Other Post4.C Packet Pg. 309
7 of 12
Employment Benefits (OPEB) liability and related ratios; schedule of contributions
• A breakout of individual non-major funds – for funds that were presented in a cumulative manner in the Financial Section
Statistical Section (current and historical information – up to 10 years) • Financial Trends
• Tax Revenue Information
• Debt Capacity Information
• Demographic and Economic Information
• Operating Information
The following is an explanation of some key indicators reported in the ACFR. Overall, the City’s ACFR showed that City finances were stable.
General Fund
The most notable measure of a City’s financial health is fund balance. As presented in the Basic Financial Statements, the City’s General Fund assets exceed liabilities by $168.1 million as of June 30, 2025.
This balance is comprised of categories, as follows:
• $7.6 million Nonspendable fund balance included amounts that are not in spendable form, such as prepaid items and advances to other funds; • $5.0 million Restricted fund balance is required for specific purposes as stipulated by either external resource providers or enabling legislation, including $4.0 million for bond funded projects;
• There is no balance in Committed fund balance, which usually represents amounts designated for a specific purpose by formal action from City Council; • $93.3 million Assigned fund balance is set aside to cover continuing capital improvement projects approved in a prior year; prior year reappropriations for projects not fully completed as of the end of the prior year; compensated
4.C
Packet Pg. 310
8 of 12
absences, which is unused vacation time accumulated by employees that can be paid out 100% when employment is terminated for any reason; funds to respond to contingent liabilities and other costs that were unanticipated, but have emerged since budget adoption, such as funds for working capital to support capital projects, essential services, service restorations, contractual labor obligations, while revenues continue to recover over the next five years; and
• $62.1 million in Unassigned fund balance as follows:
o $63.2 million rainy day fund contingency reserve. Historically this has been 15% of the annual expenditure budget; however, the amount was reduced to 12.5% in FY 2019-20 and increased to 13% in FY 2022-23.
The reserve is currently at 14.0% at June 30, 2025, with the plan to increase it by 0.5% each fiscal year until it reaches 15.0% at June 30, 2027;
o ($1.1) million unrealized loss on investments. GASB 31 requires public agencies to report all investments, with certain exceptions, at the current fair market value rather than at the original purchase price. The current fair market value and unrealized gain/loss of a security do not affect its redemption value or yield if held to maturity. The City’s practice is to purchase most securities with the intent to hold them to maturity.
The General Fund’s rainy day and economic uncertainty reserves have long been an important safeguard for Santa Monica in the event of an emergency or a devastating downturn. Strong reserves contributed to a AAA general obligation bond rating, allowing the City to pursue lower cost financing structures. Since March 2020, these reserves and contingency funds have allowed the City to continue essential operations despite the severe revenue dip because of the economic crisis caused by the global pandemic and have also provided funding for legal settlements. The City of Santa Monica maintains a “AAA” rating from Fitch, and a “Aaa” rating from Moody’s, which were reaffirmed in 2025. Subsequent to year end, both Moody’s and Fitch issued “negative outlooks” on the City’s Lease
4.C
Packet Pg. 311
9 of 12
Revenue rating citing weaker tourism-driven revenue and uncertainty surrounding the City’s future claims liability and projected general fund deficits during the next two years that could lower the City’s reserves to much weaker levels.
Citywide Net Position
The Statement of Net Position, like a balance sheet, reported total assets and liabilities of the City as of June 30, 2025. The total net position of the City for all activities was $1.5 billion. Net position was broken out into three categories: capital, restricted, and unrestricted.
Net Investment in Capital Assets - $1,134.6 million
Net Investment in Capital Assets included land, buildings, improvements, intangibles, infrastructure and utility systems, and construction in progress net of accumulated depreciation/amortization and related debt. Intangible assets represented rights of use for items such as software, water rights and payments for Santa Monica’s cost of improvements to the City of Los Angeles sewage treatment system. Some notable capital projects that were underway as of June 30, 2025, included City Yards Microgrid and numerous Sustainable Water Master plan infrastructure projects to help the City achieve water self-sufficiency.
Restricted Net Position - $329.3 million
These assets were subject to agreements with creditors, developers, grantors, or laws or regulations of other governments. Approximately $207.5 million or 63% is restricted for community development, which included affordable housing and commitments to various other projects. Approximately $37.9 million or 12% is restricted for transportation, which included federal, state and other grant funds. The remaining amount is restricted for the Cemetery’s trust fund, debt service, development agreement terms, and other grant and legislative constraints.
Unrestricted Net Position – $57.3 million
This represented the balance of net position that is neither part of capital assets nor restricted. Capital and operating reserves of $26.2 million in the business-type activities
4.C
Packet Pg. 312
10 of 12
demonstrated increased revenues as the City recovers from the COVID-19 pandemic and rate increases are implemented. Governmental activities reported a negative unrestricted net position of $51.2 million, primarily due to the cumulative shortfalls from the pandemic and settlement payments made in the past few years plus an increase in the pension liability.
The Citywide Net Position utilized the full accrual basis of accounting, requiring the City to report the full amount of long-term liabilities, such as pension and bond payments, which will be paid over many fiscal years with future revenues.
Governmental fund statements utilized the modified accrual basis of accounting, which recognized the current portion of long-term debt to be paid by revenues as they are measurable and available. This difference in accounting method can result in a negative net position on the Citywide financial statements, while individual fund statements, such as the General Fund, did not have a negative fund balance.
Long-Term Debt
The primary source of long-term debt is in the form of bonds issued by the City. At the end of the current fiscal year, the City’s total long-term debt outstanding (excluding issuance premiums) was $309.3 million, a $9.7 million decrease from the prior year.
This decrease was primarily due to debt service payments for the year. More information on Long-Term Debt can be found in Note 10, page 105 of the ACFR.
Pension Liability
As noted in the Statement of Net Position on page 43 of the ACFR, the City’s largest liability is the unfunded actuarial pension liability, which was $485.3 million as of June 30, 2025, a decrease of $19.0 million from the $504.3 million as of June 30, 2024, primarily as a result of the greater than expected return (9.3% vs 6.8%) on pension plan assets.
Total net pension liability, or unfunded liability, was based on projected future benefit
4.C
Packet Pg. 313
11 of 12
payments attributed to the current and past employees’ service, less the assets accumulated to pay those liabilities. This was the difference between a total pension liability of approximately $2.4 billion and current plan assets of approximately $2.0 billion, making the City’s three pension plans approximately 80% funded overall. The City’s annual required contributions included a portion to fund currently earned benefits as well as an amount to pay down the unfunded liability.
A detailed explanation of the Employee Benefits Programs including detailed pension information by plan and Other Postemployment Benefits (OPEB)is included in Note 12 (pages 109 through 123) and the Required Supplementary Information (pages 146 through 158). Further information on the City’s efforts to control pension liability is included in the Letter of Transmittal (pages 7 through 14).
Pending Litigation
The City was a party in numerous pending litigations and the outcome of these cases can have a significant impact on the General Fund.
Since March 2020, the City had entered into settlement agreements totaling $229.8 million with claimants in suits filed against the City. The City is evaluating additional claims pending based on similar allegations of abuse by the same former employee.
The City continues to work diligently to prevent these liabilities from impacting services and is actively seeking reimbursement from its excess insurance carriers.
In 2017, the Pico Neighborhood Association sued the City of Santa Monica alleging that the City’s at-large method of electing City Council members violates the California Voting Rights Act (CVRA). Plaintiffs’ requests for costs and attorneys’ fees remain pending in the trial court. The trial court considered oral briefing on the scope of evidence to be taken at the next trial which is expected to occur in late fall of 2026. More information pertaining to pending litigation is included in Note 16, page 128 of the ACFR.
Cash and Investments
4.C
Packet Pg. 314
12 of 12
The ACFR also included detailed information on the City’s cash and investments. As of June 30, 2025, the City had $851.6 million in total cash and investments, all of which were in the form of investments authorized by the California Government Code and the City’s investment policy or in compliance with bond indenture agreements. More information on cash and investments is found in Note 2, page 78 of the ACFR.
Environmental Review
The ACFR is not a “project” subject to CEQA. The ACFR is informative and administrative in nature. Pursuant to CEQA Section 21065, the ACFR does not meet the definition of a “project” subject to CEQA as it will not “cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.” Additionally, per Section 15378(b) of the CEQA Guidelines, a “project” does not include continuing administrative or maintenance activities, such as purchases for supplies, personnel-related actions, general policy and procedure making.
Therefore, the ACFR is not subject to CEQA.
Financial Impacts and Budget Actions
There is no immediate financial impact or budget action necessary as a result of the recommended action to receive and file this annual report.
Prepared By: Steve Gomez, Financial Operations Manager
Approved Forwarded to Council
Attachments:
A. Attachment A - Annual Comprehensive Financial Report B. Attachment B - City of Santa Monica Report on Internal Control C. Attachment C - City of Santa Monica Audit Communication Letter
4.C
Packet Pg. 315
WWW.LSLCPAS.COM
4.C.a
Packet Pg. 316 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for
4.C.a
Packet Pg. 317 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for
CITY OF SANTA MONICA, CALIFORNIA
Annual Comprehensive Financial Report
For the Year Ended June 30, 2025
Table of Contents
INTRODUCTORY SECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Letter of Transmittal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Officials of the City of Santa Monica . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Organizational Chart - City of Santa Monica . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 GFOA Certificate of Achievement for Excellence in Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 FINANCIAL SECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Independent Auditors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Management’s Discussion and Analysis (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Basic Financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Government-Wide Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Statement of Net Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Statement of Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Fund Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Balance Sheet - Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Government-Wide Statement of Activities . . . . . . . 52 Proprietary Fund Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Statement of Net Position - Proprietary Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds . . . . 58 Statement of Cash Flows - Proprietary Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Fiduciary Fund Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Statement of Fiduciary Net Position - Fiduciary Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Statement of Changes in Fiduciary Net Position - Fiduciary Funds . . . . . . . . . . . . . . . . . . . . . 66 Notes to the Basic Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 Note 1 - Summary of Significant Accounting Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Note 2 - Cash and Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 Note 3 - Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 Note 4 - Notes Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 Note 5 - Capital Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 Note 6 - Subscription-Based Information Technology Arrangements . . . . . . . . . . . . . . . . . . . . 98 Note 7 - Unearned Revenue and Deferred Inflows of Resources . . . . . . . . . . . . . . . . . . . . . . 101 Note 8 - Compensated Absences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 Page
3 4.C.a
Packet Pg. 318 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Table of Contents
Page
Note 9 - Self-Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 Note 10 - Long-Term Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 Note 11 - Pollution Remediation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 Note 12 - Employee Benefit Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 Note 13 - Fund Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124 Note 14 - Fund Deficits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127 Note 15 - Restricted Net Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128 Note 16 - Commitments and Contingencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128 Note 17 - Interfund Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130 Note 18 - Successor Agency Trust Fund for Assets of Former Redevelopment . . . . . . . . . . 133 Note 19 - Restatements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136 Note 20 - Subsequent Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137 Required Supplementary Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Special Revenue Source Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Measure GS Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Low and Moderate Income Housing Asset Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
Note to Required Supplementary Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145 Schedule of Changes in the Net Pension Liability and Related Ratios . . . . . . . . . . . . . . . . . . . . . . . . 146 Schedules of Contributions - Pension Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 Schedule of Changes in the Net OPEB Liability and Related Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . 156 Schedule of Contributions - OPEB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 Supplementary Information: Non-major Funds / Other Financial Information . . . . . . . . . . . . . . . . . . 159 Combining and Individual Fund Statements and Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160 Combining Balance Sheet - Nonmajor Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167
Schedules of Revenues, Expenditures, and Changes in Fund Balance (Deficit) – Budget and Actual – Special Revenue Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
Beach Recreation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173 Housing Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174 Tenant Ownership Rights Charter Amendment (TORCA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175 South Coast Air Quality Management District (SCAQMD) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176 Community Development Block Grant (CDBG) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177 Miscellaneous Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178 Gas Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179 Local Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180 Parks and Recreation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181 Citizens Option for Public Safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182 Capital Project Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183 Clean Beaches and Ocean Parcel Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184 4 4.C.a
Packet Pg. 319 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Nonmajor Enterprise Fund Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185 Combining Statement of Net Position - Nonmajor Enterprise Funds . . . . . . . . . . . . . . . . . . . . . . . 186 Combining Statement of Revenues, Expenses and Changes in Net Position - Nonmajor Enterprise Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188
Combining Statement of Cash Flows - Nonmajor Enterprise Funds . . . . . . . . . . . . . . . . . . . . . . . 190 Internal Service Fund Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194 Combining Statement of Net Position - Internal Service Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . 195 Combining Combining Statement of Revenues, Expenses and Changes in Net Position - Internal Service Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197
Combining Statement of Cash Flows - Internal Service Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . 199 STATISTICAL SECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203 Financial Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204 Net Position by Component - Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205 Changes in Net Position - Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206 Fund Balance of Governmental Funds - Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209 Changes in Fund Balance of Governmental Funds - Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . 210 Revenue Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212 General Fund Tax Revenues by Source - Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213 Assessed Value and Actual Value of Taxable Property - Last Ten Fiscal Years . . . . . . . . . . . . . . . . . 214 Direct and Overlapping Property Tax Rates - Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . 215 Principal Property Taxpayers - Current Fiscal Year and Nine Years Ago . . . . . . . . . . . . . . . . . . . . . . . 216 Property Tax Levies and Collections - Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217 Taxable Transactions by Type of Business - Last Ten Calendar Years . . . . . . . . . . . . . . . . . . . . . . . . 218 Debt Capacity Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219 Ratios of Outstanding Debt by Type - Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220 Ratios of General Bonded Debt - Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221 Direct and Overlapping Governmental Activities Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222 Computation of Legal Debt Margin - Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223 Water Enterprise Revenue Bonds Coverage - Last Four Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . 224 Demographic and Economic Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225 Demographics and Economic Statistics - Last Ten Calendar Years . . . . . . . . . . . . . . . . . . . . . . . . . . . 226 Principal Employers - Current Year and Nine Years Ago . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227 Operating Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228 Full-time Equivalent City Government Employees by Function/Program - Last Ten Fiscal Years . . 229 Operating Indicators by Function/Program - Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . 230 Capital Asset Statistics by Function/Program - Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . 231 5 4.C.a
Packet Pg. 320 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for INTRODUCTORY SECTION 6
4.C.a
Packet Pg. 321 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Letter of Transmittal
March 3, 2026
Dear Honorable Mayor and Members of the City Council, City Manager, and the community of Santa Monica:
Attached is the Annual Comprehensive Financial Report (ACFR) for the City of Santa Monica (City) for the fiscal year ended June 30, 2025 (FY 2024-25).
The ACFR has been prepared by Finance Department staff in conformance with the principles and standards for financial reporting set forth by the Governmental Accounting Standards Board (GASB), the authoritative body establishing U.S. generally accepted accounting principles for local governments.
Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal controls established for that 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.
The ACFR has been compiled in a manner designed to fairly set forth the financial positions and results of operations of the City. The ACFR includes disclosures designed to enable the reader to gain an understanding of the City’s financial affairs.
In accordance with generally accepted accounting principles, a narrative overview and analysis of the basic financial statements in the form of Management’s Discussion and Analysis (MD&A) is provided and can be found immediately following the independent auditor’s report. This letter of transmittal complements the MD&A and should be read in conjunction with it.
LSL, LLP has issued an unmodified opinion on the City of Santa Monica’s basic financial statements for FY 2024-25. Their report is located at the front of the financial section of this report.
PROFILE OF THE CITY OF SANTA MONICA
The City of Santa Monica, bordered by the City of Los Angeles on three sides and by the Pacific Ocean on the west, encompasses an area slightly greater than eight square miles and serves a residential population of 92,408 making it the 18th largest of the 88 cities in Los Angeles County.
The City of Santa Monica, incorporated in 1886, adopted its City Charter in 1945, and established a councilmanager form of government in 1947. Elections are held every two years for either three or four Council members elected to serve four-year terms on the seven-member City Council. In the past, elected Council members selected a Mayor and a Mayor Pro-Tempore to preside over Council meetings. However, beginning in December 2022, the Council shall select the longest continuously serving Councilmember, whether initially elected or appointed, to serve as Mayor for a 1 year term. Each subsequent December the next longest continuously serving Councilmember shall be selected as Mayor for a 1 year term, then rotating each December to select the Mayor in order of the next longest serving Councilmember.
The City Council (Council) appoints a City Manager, a City Attorney and a City Clerk. The City Manager, responsible for supervising day-to-day operations of the City and for carrying out policies set by the Council, appoints Department directors.
Department of Finance | 1685 Main Street, Mail Stop 09 | Santa Monica, CA 90401 [email protected] | santamonica.gov/departments/finance Tel: (310) 458-8281 Fax: (310) 394-0644
4.C.a
Packet Pg. 322 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Santa Monica’s level and breadth of services surpass those of other cities of comparable size. The City provides a full range of services, including police and fire protection, water and wastewater, street maintenance, public landscaping, a regional transit system that serves 8.6 million riders each year, parking, parks and recreation including 245 acres of beaches, five public libraries, planning, building and safety, the iconic Santa Monica Pier, an airport, a cemetery, and a high level of support for social services, cultural programs and public education.
Elementary and secondary education is provided by the Santa Monica Malibu Unified School District, and community college education is provided by the Santa Monica Community College District. Court, health, and social services are provided by the County of Los Angeles. Gas and telephone services are provided by private utility companies, while power is purchased through the Clean Power Alliance, a joint powers authority made up of public agencies across Los Angeles and Ventura counties working together to bring clean, renewable power to Southern California, and delivered by a private utility company.
Financial data for all funds through which services are provided by the City have been included in this report based on the criteria adopted by GASB.
FINANCIAL CONDITION AND OUTLOOK
Factors Impacting Financial Condition
The national economy remains stable but is showing signs of gradual cooling. The Federal Reserve cut its benchmark interest rate to roughly 3.66% in December 2025 – the third cut this year and the lowest level in nearly three years – as it balances slower job growth with persistent inflation above the target of 2%. Inflation remains still elevated and sticky amid tariffs and supply cost pressures. Economic growth has been solid but is expected to moderate. Gross Domestic Product expanded at a strong 3.8% annualized rate in the second quarter of 2025.
Forecasts indicate that growth will ease to around 2.9% in the third quarter as the economy gradually cools.
California data and forecasts show slow or flat GDP growth for 2025, with regional contractions. Conditions in the labor market reflect this shift. Job growth has slowed compared to last year, and while the unemployment rate remains relatively low by historical standards, it has risen to 4.4%. California has lost jobs for four straight months, with unemployment rising to about 5.6%, with the nation rate at 4.3%.
Financial markets have responded to these changing dynamics. The 2-year U.S. Treasury yield has declined by roughly 0.70% since the start of the year, though it still stands about 1.50% above its average over the past two decades.
In 2025, Santa Monica's tourism faced a complex landscape with a decline in overall visitor volume, primarily driven by a fall in domestic and international travel to California in general. However, the local industry is proactively implementing strategies and experiencing positive localized trends. With Santa Monica’s proximity to the Greater Los Angeles area, the 2026 World Cup is projected to bring hundreds of millions in new revenue, temporary jobs, and international visitors.
Overall, the economy remains resilient but is transitioning into a period of slower growth, easing interest rates, and inflation that is improving, but still elevated. These trends should continue to influence both public-sector planning and local economic conditions in the year ahead.
Local Economy
For decades, Santa Monica has been among California’s most prosperous and well-run cities, with strong civic finances and vibrant downtown and waterfront districts. In 2018, the City’s General Fund held $435.8 million in fund balance, reflecting decades of prudent management and careful fiscal planning.
That strength allowed Santa Monica to weather emergencies such as the COVID-19 pandemic, which devastated economies worldwide and hit tourism-dependent cities especially hard. Even amid unprecedented liabilities and disruption, all three major rating agencies reaffirmed Santa Monica’s high-quality credit rating in their most recent reviews, a testament to the City’s long tradition of fiscal discipline. 8 4.C.a
Packet Pg. 323 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Yet fiscal strength has eroded in the years since. The pandemic collapsed tourism, shuttered businesses, and emptied public spaces. Compounding challenges include rising public safety incidents, growing homelessness, high office (35%) and retail (16%) vacancy rates, deferred infrastructure maintenance, and declining public confidence. Revenues have dropped sharply as compared to original budgeted estimates, with FY 2024-25 showing a 6% decline in sales tax and a 10% decline in transient occupancy tax (TOT), contributing to what was projected to be $29 million General Fund deficit by FY 2026-27.
Additionally, fund balance has fallen to approximately $155 million in non-restricted reserves, with only $95 million unobligated. Much of this decline stems from sexual-abuse claim settlements totaling nearly $230 million to date.
While Santa Monica remains rich in potential, its fiscal and organizational strength has been significantly depleted.
Santa Monica Realignment Plan
Against this backdrop, the City has embarked on a comprehensive Realignment Plan to restore fiscal stability while strengthening the foundations of civic life. Adopted in October 2025, the plan organizes a series of interlocking programs and projects around five strategic priorities. Three of these, Achieving Safe Neighborhoods & Clean Streets, Activating Economic Opportunity & Growth, and Developing Affordable, Livable & Secure Housing for All, were identified by the City Council. Two additional priorities, Creating Organizational Capacity and Building Organizational Health, were added to reinforce the City’s internal strength. Together, these priorities provide a coordinated roadmap to build a more resilient, inclusive, and livable community.
The plan responds to pressing fiscal challenges, including a projected structural deficit of nearly $29 million by FY 2026–27 and a steep decline in reserves. To address these headwinds, the framework blends cost discipline, revenue diversification, and strategic asset management, with the goal of achieving a structurally balanced budget by FY 2027–28.
The plan begins with expenditure realignment. By carefully managing vacancy rates and staffing levels, the City expects to save approximately $6 million annually. Additional efficiencies will come from refocusing underperforming programs, such as parking enforcement and fire inspections, which are projected to generate $1.4 million in new revenues each year. Bond refinancing will add another $100,000 in annual savings. Together, these measures contribute about $7.5 million per year in ongoing fiscal benefit.
On the revenue side, the City is implementing a series of initiatives designed to create sustainable streams of income. A new ambulance operator program, set to launch in 2026, will recover the full cost of emergency medical transport, generating $7 million annually. Adjustments to parking rates and operations are expected to yield $9 million per year, while credit card convenience fees will add $1 million. Digital signage concessions, user fee updates, and investment earnings together contribute another $7 million. Altogether, these revenue measures are projected to deliver $24 million annually once fully phased in.
To further strengthen the fiscal outlook, the City is exploring a parcel tax measure in 2026 that could generate $12 million annually to offset school funding obligations. While still under assessment, this measure would provide a dedicated revenue source to sustain the City’s longstanding partnership with the Santa Monica-Malibu Unified School District.
At the same time, the Realignment Plan is not only about fiscal discipline, it is also about revitalizing Santa Monica’s civic identity and economic vitality. A key pillar of the plan is activating economic opportunity and growth through major events and cultural programming. In December 2025, the City Council approved preliminary agreements with private partners to host a series of landmark activations that will place Santa Monica on the global stage:
• Michelob ULTRA Pitchside Club (2026): A World Cup fan experience at the Pier blending live match viewing, interactive games, and celebrity appearances.
• Goldenvoice Beach Music Festival (2026–2028): A new annual festival drawing 30,000–35,000 attendees, designed to boost local hotels, restaurants, and retail. 9 4.C.a
Packet Pg. 324 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for • ESPN Fan Festival (2027): Broadcasts and community programming staged against the coastline, engaging nonprofits and local vendors.
• Club France (2028): The French Olympic Committee’s official hospitality house at the Annenberg Community Beach House, offering cultural programming and community events. • Santa Monica Nations Village & Broadcast Center (2028): A hub at Crescent Bay Park showcasing international hospitality houses, immersive content production, and global media visibility.
These activations exemplify how the Realignment Plan’s priorities translate into action: they establish a framework for producing and hosting large events in the City, generate new rental and service fee revenues under the City’s updated pricing model, strengthen local business participation, and provide free or low-cost public programming that uplifts residents.
Recognizing the immediate need for stability, the plan also deploys $60 million in reserves previously set aside by the City Council. These funds act as a bridge, supporting operations and program implementation until new revenues are fully realized. At the same time, the City is preparing to monetize key downtown land assets. By optimizing development strategies, the identified properties could generate sufficient funds to begin rebuilding reserves by 2028.
In conclusion, the Realignment Plan is both a roadmap for civic renewal and a disciplined financial strategy.
Through expenditure controls, diversified revenues, strategic reserve use, asset monetization, and global event activations, Santa Monica is positioned to stabilize its budget, rebuild resilience, and restore the vitality that has long defined the community.
POLICIES, RESERVES AND TRANSPARENCY
The City has consistently demonstrated its commitment to safeguarding public resources through the adoption of prudent fiscal policies and the maintenance of strong reserves. For more than a decade, the City sustained an Economic Uncertainty Reserve of $9.7 million, complemented by a General Fund Rainy Day Fund Contingency Reserve historically equal to 15 percent of annual operating and capital expenditures. These reserves provided essential flexibility during the severe economic downturn caused by the pandemic, allowing the use of contingency and uncertainty funds while preserving a Rainy Day Fund reserve level of 12.5 percent of ongoing expenditures to address future emergencies.
At the close of FY 2024-25, the City’s Contingency Reserve has been increased to 14.0 percent. As revenues continue to recover, the City remains committed to incrementally increasing the reserve by 0.5 percentage points annually, restoring the reserve to 15 percent in FY 2026-27. This disciplined approach underscores the City’s long-standing priority of fiscal stability, ensuring reserves remain sufficient to mitigate economic volatility while sustaining essential services and long-term community investment.
The City ended the fiscal year with a positive operating balance and a General Fund fund balance of $168.1 million which includes nonspendable, restricted, committed, assigned, and unassigned fund balances, each with varying constraints that control how amounts can be spent.
In addition to a comprehensive set of fiscal policies, the Council has approved a Fiscal Sustainability Philosophy, a Compensation Philosophy, and Guiding Principles to Handle Pension Liability. The Compensation Philosophy, adopted on July 24, 2018, established a consistent methodology for determining if the City’s processes to recruit and retain highly qualified staff continue to be in line with the City’s overarching goal of being an “employer of choice” while continuing to be fiscally responsible with a goal of this being evaluated every five years.
On June 25, 2019, the Council adopted a Fiscal Sustainability Philosophy included in the City’s Fiscal Policy. The philosophy commits the City to a long-term view of financial planning that addresses economic and fiscal risks to ensure the City lives within its means and has the resources to invest in its infrastructure, facilities, equipment, training and workforce to preserve and enhance community wellbeing. 10 4.C.a
Packet Pg. 325 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for The Audit Subcommittee of the City Council, made up of three Council members and two residents with financial backgrounds, meets a minimum of four times per year to review the work and reports of the City's internal and external auditors and the progress made on internal controls and departmental efficiency process improvements recommended by the City’s internal auditor.
MANAGING FISCAL CHALLENGES
In addition to the extraordinary fiscal challenges the City is facing during and in the aftermath of the pandemic, longstanding areas of pressure on our finances continue to be considered in our fiscal management. The City continues to proactively manage its longstanding challenges in the areas of pension liabilities, healthcare and workers compensation costs by longer term contracts fixing rates at low levels, and focused claims administration, respectively. While challenges persist, these approaches continue to mitigate the liabilities. Further detail on these actions is included below.
Contingent liabilities and long-term planning
In previous years, the City noted a significant contingent liability related to sexual abuse claims against a former employee. From May 2020 to July 2022, the City settled with 104 claimants, totaling $107.325 million. On April 25, 2023, the City Council approved an additional settlement agreement to pay $122.5 million on additional claims related to one of the former employees. The City has tendered the full amount, totaling $229.825 million, to its excess liability insurers for reimbursement. Given the significant burden of these payments on the General Fund, on top of the significant revenue losses that the General Fund suffered as a result of the COVID pandemic, other funding sources in addition to the General Fund were needed to make the payment. The non-General Fund funding sources include $6.5 million from the General Fund portion of the Workers’ Compensation Fund, $25 million from the Housing Trust Fund’s General Fund contributions, $5.9 million from deferral of the FY 2020-21 and $5.6 million from the deferral of the FY 2022-23 Measure GSH contribution from the General Fund to the Housing Trust Fund, and $15 million from Boeing Gillette settlement funds held in the Water Fund. Furthermore, in FY 2023-24 and FY 2024-25, the City deferred an additional $5.7 million and $5.0 million, respectively, of Measure GSH contributions from the General Fund to the Housing Trust Fund. The General and non-General Fund reserves used were not legally restricted as to use, but it is the City’s intent that the fund balances of all affected funds be replenished. On October 25, 2023, the City Council approved a plan to replenish these funds over time, prioritizing the operational and financial stability of the General Fund.
As of the date of this report, the City continues to face significant liability exposure from ongoing childhood sexualabuse litigation. The City now faces another 178 plaintiffs under AB 218. Management is vetting the new claims, and these cases are now moving into formal discovery and trial for the first time. Settlement discussions are proceeding on a parallel track. Resolution, whether through trial or settlement, is expected to extend over the next two years or longer.
Additionally, an ongoing contingent liability is the litigation over a request to transition to district elections. The case was recently heard by the California Supreme Court, which issued an opinion referring the case back to the Court of Appeal for further proceedings. The Court of Appeals remanded the case back to the trial court based on the California Supreme Court ruling. If the City loses the case, the financial impacts to the City will be high.
Pension liability
With respect to pension liabilities, the City has continually programmed increases in pension costs reflecting the phasing in of the California Public Employees’ Retirement System (CalPERS) discount rate from 7.5% to 6.8%, and additional changes to the methods by which liability is amortized, all of which have the effect of stabilizing the pension fund but resulting in higher contribution rates for employers.
Several initiatives mitigate the pressure of pension costs on the budget. 11 4.C.a
Packet Pg. 326 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for • 62% of current employees earn a reduced level of pension benefits either because of mandated Public Employee Pension Reform Act (PEPRA) reduced benefit levels for staff members hired after January 1, 2013, or the City’s own “Tier 2” levels established on July 1, 2012, six months before the enactment of PEPRA, for non-public safety sworn employees who entered the City and CalPERS during those six months as new Miscellaneous bargaining group employees, and for non-public safety sworn employees who continue to join the City but who were already enrolled in CalPERS as Classic (non-PEPRA) employees at a different agency. This lower benefit has a lower required contribution rate than Classic members.
• All employee groups have eliminated the employer paid member contribution (EPMC) benefit and the employee-paid portion of the pension cost is deducted from employees’ paychecks and paid directly to PERS. This lowers pensionable compensation which in turn reduces the unfunded liability and contributions.
• In addition to paying the employee portion of the contribution, members of public safety employee bargaining groups who joined CalPERS prior to January 1, 2013 (before PEPRA benefits were established) and have a higher level of benefits also pay a portion of the annual pension contribution cost. • The City has a long history of paying down its unfunded pension liability at a level above each year’s actuarially determined contribution. These payments have reduced the City’s net pension liability by decreasing interest costs over time. In 2014, Council adopted a policy to continue to program paydowns of at least $1 million from the General Fund and proportional amounts from all other funds’ annual budgets, with the potential to increase this paydown amount if funds were available. In June 2017, responding to the prospect of additional significant pension contribution rate increases beginning in FY 2018-19, Council approved a $45 million pay down of the City’s pension unfunded liability. To date the City has paid $88 million in additional paydowns of the unfunded liability. • In FY 2018-19 the City convened a Pension Advisory committee who recommended a 13-year amortization period. The City implemented this plan and made one additional contribution but due to cash flow issues caused by the pandemic the City suspended the additional payments in 2023. Based on the City’s financial health, the additional payments may resume in the future. • The City has prepaid its annual employer contributions to CalPERS since FY 2007-08. The City continued this practice up to FY 2020-21. Discounts received from such prepayments are used for pay downs of the net pension liability. In FY 2025-26, the City prepaid its contributions as it was projected that interest rates earned on its portfolio would not exceed the discount rate.
The CalPERS preliminary portfolio returns for FY 2024-25 were 11.6%, significantly higher than the expected
6.8%. This will reduce future contribution rates (CalPERS rates lag returns by two years) as well as the unfunded liability reported in the financial statements (the FY 2024-25 unfunded liability will be reported in the FY 2025-26 financial statements).
In November 2025 as part of the Asset Liability Management process, the CalPERS Board of Administration voted to maintain the discount rate at 6.8% and adopted a Total Fund Portfolio Management investment strategy. The new CalPERS investment strategy will start July 1, 2026, replacing the Strategic Asset Allocation Model. The CalPERS Board adopted updated economic and demographic actuarial assumptions, including increasing the price inflation assumption from 2.3% to 2.5% and the wage growth assumption from 2.8% to 3.0%. These updated assumptions will affect employer contribution rates beginning in FY 2027-28 for public agencies. To plan for the change in contribution rates that will follow, City staff is projecting future year pension contributions with the revised returns, using the CalPERS Pension Outlook modeling tool.
Other Post Employment Benefit liability
In FY 2014-15, the City began to prefund its Other Post Employment Benefits (OPEB) obligation by paying into an Internal Revenue Code Section 115 irrevocable trust administered through the California Employees’ Retirement Benefit Trust (CERBT), an affiliate of CalPERS. The City paid the equivalent of its annual actuarially determined OPEB contribution into the irrevocable trust each year. This has allowed the City to benefit from a higher discount rate used in calculating its OPEB unfunded liability.
12 4.C.a
Packet Pg. 327 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Health insurance costs
To counter the trend of health insurance cost increases, all members from the City’s collective bargaining groups contribute to health insurance premiums. The current contract reflects an industry-wide increase in rates of approximately 10.0%.
Workers’ compensation liabilities
Risk Management is implementing and managing a variety of measures to help control workers’ compensation costs. Among the cost control measures in place are a comprehensive case management program for public safety staff that reduces the number of litigated claims, a return to work program that provides employees recovering from work-related injuries with temporary light duty assignments, maintaining a connection to the workplace and lowering temporary disability costs, and the use of a third party administrator for Big Blue Bus claims management, which has lowered liabilities, open claim inventory, and expenses for this fund.
As a result of these measures, the City’s Workers’ Compensation program showed encouraging results from FY 2019-20 to FY 2022-23. In particular, total program liabilities (i.e., the total value of all open claims) dropped to a seven-year low of $27.8 million by June 30, 2023. However, in FY 2023-24, total program liabilities increased significantly by $8.2 million from the previous fiscal year. This sharp increase is primarily attributed to three catastrophic claims that accounted for $7.9 million of the total increase. In FY 2024-25, total program liabilities stabilized at $36.7 million, a modest 2 percent increase from FY 2023-24. Program liabilities under the City’s direct responsibility, known as the Self-Insured Retention (SIR), also remained stable. Under the self-insurance structure, the City currently maintains a $1 million SIR, meaning it is responsible for workers' compensation losses up to this threshold. Any losses beyond the SIR are covered by PRISM, a joint powers authority, which provides insurance coverage up to statutory limits without a cap. Although SIR liabilities rose by $1.6 million from FY 2023-24 after reaching a decade-low the prior year, they continue to remain below historical averages.
Looking ahead, maintaining effective cost control measures will be essential to ensure stable program liabilities under the City's Workers' Compensation SIR, as staff anticipates higher claim costs in the future outside of catastrophic claims. Over the past several years, cumulative trauma injuries have emerged as the predominant type of claim filed across the City. These injuries, which develop from repetitive physical and/or mental stress over extended periods, are particularly common in aging workforces. Cumulative trauma claims present significant challenges for employers because they are both costly and difficult to prevent.
AWARDS
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 of Santa Monica for its ACFR for the fiscal year ended June 30, 2024. The Certificate of Achievement is a prestigious national award, recognizing conformance with the highest standards for preparation of State and local government ACFR. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized ACFR whose contents conform to program standards. This report must satisfy both generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. The City of Santa Monica has received a Certificate of Achievement for each of the last forty years. We believe our current ACFR also conforms to the Certificate of Achievement program requirements.
A copy of this ACFR can be viewed by appointment in the City Clerk’s Office. Electronic copies have been provided to City Council and Audit Subcommittee members, City management personnel, bond rating agencies, and other agencies which have expressed an interest in the financial affairs of the City. It is also available at www.santamonica.gov/departments/finance. Physical copies can be provided upon request to the City’s Finance Department.
13 4.C.a
Packet Pg. 328 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for
ACKNOWLEDGEMENTS
The preparation and development of this report would not have been possible without the year-round work of the Finance Department staff and their special efforts, working in conjunction with the City’s independent auditors, to produce this report.
I would like to take this opportunity to compliment and thank the staff members of the City who were associated with the preparation of this report. I would also like to thank the City Council for their continued interest and support in planning and conducting the financial operations of the City in a responsible and progressive manner.
Oscar Santiago
Director of Finance/City Treasurer
14 4.C.a
Packet Pg. 329 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for
OFFICIALS OF THE CITY OF SANTA MONICA
As of November 24, 2025
Officials of the City of Santa Monica
City Council
Lana Negrete, Mayor
Caroline Torosis, Mayor Pro Tempore
Dan Hall
Ellis Raskin
Barry Snell
Natalya Zernitskaya
Jesse Zwick
Administration and Department Heads
City Manager Oliver Chi
Assistant City Manager Susan Cline
Deputy City Manager Peter James
City Clerk (Director of Records and Election Services) Nikima Newsome Director of Finance/City Treasurer Oscar Santiago
Director of Human Resources Dana Brown
Chief Information Officer Feroz Merchhiya
Acting Chief of Police Darrick Jacob
Fire Chief Matthew Hallock
Director of Community Development Jing Yeo
City Librarian Erica Cuyugan
Director of Transit Services Anuj Gupta
Director Recreation and Arts Jenny Rogers
Director of Public Works Rick Valte
Interim Director of Housing and Human Services Natalie Verlinich 15 4.C.a
Packet Pg. 330 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Organizational Chart - City of Santa Monica
16 4.C.a
Packet Pg. 331 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for GFOA Certificate of Achievement for Excellence in Financial Reporting 17 4.C.a
Packet Pg. 332 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for
FINANCIAL SECTION
18 4.C.a
Packet Pg. 333 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for INDEPENDENT AUDITORS’ REPORT
Independent Auditors’ Report
To Honorable Mayor and Members of the City Council
City of Santa Monica, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Santa Monica (hereafter, the City), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of June 30, 2025, and the respective changes in financial position of the, and, where applicable, cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Emphasis of Matter
Change in Accounting Principle
As described in Note 1 to the financial statements, in 2025, the City adopted new accounting guidance, GASB Statement No. 101, Compensated Absences. Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is 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.
19 4.C.a
Packet Pg. 334 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Auditors’ 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 generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards 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 budgetary comparisons for the General Fund and the major special revenue funds, and required pension and other post-employment benefits schedules, as listed on the table of contents, presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context.
We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the 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.
To the Honorable Mayor and Members of the City Council
City of Santa Monica, California
20 4.C.a
Packet Pg. 335 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for 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 accompanying combining and individual fund financial statements and schedules (supplementary information) are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditor’s report thereon.
Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 3, 2026, 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 City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City’s internal control over financial reporting and compliance.
Irvine, California
March 3, 2026
To the Honorable Mayor and Members of the City Council
City of Santa Monica, California
21 4.C.a
Packet Pg. 336 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Management’s Discussion and Analysis (Unaudited)
Financial Highlights for Year Ended June 30, 2025
22 4.C.a
Packet Pg. 337 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for As management of the City of Santa Monica, California (City), we offer readers of the City’s Annual Comprehensive Financial Report (ACFR) this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2025. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in the City’s basic financial statements, which immediately follow this section, and the ACFR transmittal letter in the preceding Introductory Section.
FINANCIAL HIGHLIGHTS
• Total assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources, also known as net position, by $1,521.1 million as of June 30, 2025. Of this amount, $1,134.6 million represents net investment in capital assets, $329.3 million represents net position restricted for specific purposes, and $57.2 million represents unrestricted net position. Governmental activities and business-type activities reported unrestricted net positions of $(51.3) million and $108.5 million, which is an increase of $1.4 million and $1.6 million respectively. The increase in governmental activities is due to the reductions in the City’s pension liability offset by softening revenues including decreases in transient occupancy taxes and sales and use taxes. The increase in business type activities is primarily due to reduced remodeling expenses at the Airport and Resource Recovery and Recycling office. $949.7 million represents net position for governmental activities and $571.4 million represents net position for businesstype activities. • At the end of the current fiscal year, the City’s governmental funds reported total ending fund balances of $567.3 million, compared to $550.8 million, at the end of the prior fiscal year, which is an increase of $16.5 million or 3.0% primarily due to a decrease in the General Fund of $6.5 million (as described below) and an increase of $14.8 million from third tier documentary transfer tax revenue in the Measure GS fund and an increase of $6.6 million across the non-major funds.
• The General Fund reported an ending fund balance of $168.1 million as of June 30, 2025, compared to $174.6 million, as of June 30, 2024, which represents a decrease of $6.5 million or 3.7%. The overall decrease in fund balance was driven primarily by a sharp decline in tourism and visitor-related revenues, which are a major source of funding for the City’s general services expenses. Because these operating costs are largely balanced with annual revenues, any drop in revenues without a commensurate decrease in expenses reduces the fund balance. The revenue decline reflects the impact of national policies, including tariffs and immigration related actions, that reduced international visitation; and the significant impact of the Palisades fire in January 2025, which created widespread misperceptions that Santa Monica’s air quality was unsafe and that the fire had reached City limits. These tourism specific impacts were compounded by broader economic pressures, including elevated office vacancies associated with the shift to hybrid and remote work and persistent inflation, both of which further constrained revenue growth. • The City’s net capital assets decreased by $2.1 million, or about 0.1%, to $1,457.3 million as of June 30, 2025, from$1,459.4 million, as of June 30, 2024.
• The City’s long-term debt (excluding unamortized issuance premiums) decreased by $9.7 million or 3.0%, from $319.0 million as of June 30, 2024, to $309.3 million as of June 30, 2025. The decrease is due to annual debt service payments made during FY 2024-25.
• The City’s net pension liability decreased from $504.3 million at June 30, 2024 to $485.3 million at June 30, 2025, a decrease of $18.9 million or 3.8%. The decrease in the liability was due to the normal amortization of the unfunded liability plus greater than projected CalPERS investment portfolio returns of 9.3% in FY 2023-24. In accordance with the Governmental Accounting Standards Board, the financial statements report the City’s net pension liability measured as of June 30, 2024.
CITY OF SANTA MONICA, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
FOR THE YEAR ENDED JUNE 30, 2025
23 4.C.a
Packet Pg. 338 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for
OVERVIEW OF THE BASIC FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements include three components: government-wide financial statements, fund financial statements, and notes to the basic financial statements.
Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to the statements of a private-sector business.
The statement of net position presents information on all the City’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources, with the difference between the assets, deferred outflows of resources, liabilities, and deferred inflow of resources reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.
The statement of activities presents information showing how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will result in cash flows in future fiscal periods.
The government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety (police and fire), general services, library, housing and community services, and community development. The business-type activities of the City include water, wastewater, stormwater, resource recovery and recycling, pier, airport, cemetery, transit services, and parking.
Component units are included in the basic financial statements and consist of legally separate entities for which the City is financially accountable and have either the same governing board as the City or a governing board appointed by the City of Santa Monica City Council. The blended component units include the Santa Monica Public Financing Authority, the Parking Authority of the City of Santa Monica, the Housing Authority of the City of Santa Monica, and the Santa Monica Redevelopment Successor Agency.
The government-wide financial statements can be found on pages 41 through 45 of this report.
Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.
Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the City’s near-term financing requirements.
CITY OF SANTA MONICA, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
FOR THE YEAR ENDED JUNE 30, 2025
24 4.C.a
Packet Pg. 339 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the City’s near-term financing decisions. Both the governmental funds balance sheet and the governmental funds statement of revenues, expenditures and changes in fund balances are accompanied by a reconciliation to the government-wide financial statements in order to facilitate this comparison between governmental funds and governmental activities.
The City maintains 20 individual governmental funds for financial reporting purposes. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures and changes in fund balances for the General, Special Revenue Source Fund, Low and Moderate Income Housing Asset Fund, and Measure GS Fund, which are considered to be major funds. Data for the other 16 governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the nonmajor funds supplementary information section of this report.
The City Council adopts an annual appropriated budget for its General Fund and thirteen of the special revenue funds (no budget is adopted for the Rent Control Fund and Asset Seizure Fund) and one capital project fund (the Clean Beaches and Ocean Parcel Tax Fund). The City Council does not adopt budgets for the two permanent funds (the cemetery and mausoleum perpetual care funds) or the one debt service fund. A comparison schedule has been provided for the General Fund, Special Revenue Source Fund, Low and Moderate Income Housing Asset Fund, and Measure GS Fund, in the required supplementary information to the basic financial statements.
The governmental funds financial statements can be found on pages 47 through 52 of this report.
Proprietary funds. Proprietary funds provide the same type of information as the government-wide financial statements, but in more detail. The proprietary fund financial statements provide separate information for water, wastewater, airport, recycling, and bus operations, which are considered to be major funds of the City. The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for its vehicle operations, risk management program, and information technology and communications operations. The vehicle operations and insurance services for bus operations primarily benefit business-type activities and are included within business-type activities in the government-wide financial statements. All other risk management functions, information technology, and communication services primarily benefit governmental funds and are included within governmental activities in the government-wide financial statements. Individual fund data for the internal service funds is provided in the supplementary information section of this report.
The proprietary funds financial statements can be found at pages 54 through 63 of this report.
Fiduciary funds. Fiduciary funds consist of a private-purpose trust fund and a custodial fund. A private-purpose trust fund was created in 2012 and is used to pay enforceable obligations of the former Redevelopment Agency (Former Agency). The City’s sole custodial fund, the General Trust Fund, is used to account for resources held by the City for the benefit of parties outside of the City. The fiduciary funds are not included in the government-wide financial statements because the resources are not available to support the City’s operations.
The fiduciary funds financial statements can be found on pages 65 through 66 of this report.
Notes to the basic financial statements. The notes to the basic financial statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the basic financial statements begin on page 68 of this report.
CITY OF SANTA MONICA, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
FOR THE YEAR ENDED JUNE 30, 2025
25 4.C.a
Packet Pg. 340 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of the City, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $1,521.1 million at the close of the current fiscal year.
As shown on the next page, the largest portion of the City’s net position, $1,134.6 million or 74.6%, reflects the City’s investment in capital assets less any related outstanding debt and associated deferred outflows/inflows of resources used to acquire those assets (net investment in capital assets). The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt and associated deferred outflows/inflows of resources, it should be noted that resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate liabilities.
An additional portion of the City’s net position, $329.3 million or 21.6%, represents resources that are subject to external restrictions on how they may be used. At the end of the current fiscal year, the City reported positive balances in net investment in capital assets and restricted net assets for governmental activities and all three categories of net position for business-type activities; however, the City reported negative unrestricted assets in governmental activities. The City reported positive net position in all three categories of net position, reflecting continued stabilization of revenues and expenditures, partially offset by prior payments of legal claims. Recent fiscal performance has been influenced by broader economic conditions and federal policy actions that have affected visitor activity, tourism-related revenues, and office occupancy levels, which in turn have impacted revenues. The City continues to utilize long-held practices to manage its financial challenges, including pension and health benefits cost sharing with employees, and pension contribution prepayments when the return on City investments does not exceed the CalPERS discount rate. Additionally, the City uses a CalPERS trust to prefund its post-employment healthcare to reduce its future liability and interest expense.
A summary of the government-wide statement of net position follows:
Governmental
Activities
Business-Type
Activities Total
2025 2024 2025 2024 2025 2024
Assets:
Current and other assets 795.7 785.8 481.0 473.5 1,276.7 1,259.3 Capital assets 901.4 908.3 555.9 551.2 1,457.3 1,459.5
Total assets 1,697.1 1,694.1 1,036.9 1,024.7 2,734.0 2,718.8 Deferred outflows of resources 142.4 173.9 26.9 38.3 169.3 212.2 Current and other liabilities 101.8 119.8 165.2 151.5 267.0 271.3 Long-term liabilities 737.9 753.8 246.7 255.2 984.6 1,009.0 Total liabilities 839.7 873.6 411.9 406.7 1,251.6 1,280.3 Deferred inflows 50.1 63.5 80.6 91.0 130.7 154.5
Net position:
Net investment in capital assets 683.0 690.6 451.6 446.8 1,134.6 1,137.4 Restricted 318.0 293.0 11.3 11.5 329.3 304.5
Unrestricted (51.3) (52.7) 108.5 106.9 57.2 54.2
Total net position $ 949.7 $ 930.9 $ 571.4 $ 565.2 $ 1,521.1 $ 1,496.1
CITY OF SANTA MONICA, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
FOR THE YEAR ENDED JUNE 30, 2025
26 4.C.a
Packet Pg. 341 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Total current and other assets increased $17.4 million or 1.4% from the prior fiscal year. Governmental activities increased by $9.9 million and business-type activities increased by $7.5 million.
GASB 68 and 75 require that certain differences between expected and actual net liability components are reported on the Statement of Net Position as deferred outflows of resources in the fiscal period they arise and are subsequently amortized. Total deferred outflows of resources decreased $42.9 million or 20.2% from the prior fiscal year. Governmental activities decreased by $31.5 million and business-type activities decreased by $11.4 million. The decrease is primarily due to the amortization of the deferral of the difference between the expected and actual returns on the CalPERS portfolio from prior periods. Total current and other liabilities decreased $4.3 million or 1.6% from the prior fiscal year. Governmental activities decreased by $18.0 million and business-type activities increased by $13.7 million, primarily from decreases and increases in unearned grant revenue respectively.
Total deferred inflows of resources decreased by $23.8 million or 15.4%. Governmental activities decreased by $13.4 million and business-type activities decreased by $10.4 million. The decrease was related to leases reported under GASB 96 offset by a decrease due to amortization of deferred inflows related to the less than projected CalPERS and OPEB trust investment returns which are amortized over 5 years.
Total long-term liabilities decreased $24.4 million or 2.4% from the prior fiscal year. The decrease in this category is primarily due to the decrease in net pension and OPEB liabilities of $23.3 million offset by $11.1 million in reductions in loans and bonds payable.
CITY OF SANTA MONICA, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
FOR THE YEAR ENDED JUNE 30, 2025
27 4.C.a
Packet Pg. 342 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for A summary of the government-wide statement of changes in net position follows:
Governmental
Activities
Business-type
Activities Total
2025 2024 2025 2024 2025 2024
Revenues:
Program Revenues:
Charges For Services $ 131.8 $ 122.7 $ 145.6 $ 140.1 $ 277.4 $ 262.8 Operating Grants And Contributions 58.1 48.7 66.0 63.0 124.1 111.7 Capital Grants And Contributions 23.8 0.2 15.6 14.2 39.4 14.4 General Revenues:
Property Taxes 86.0 84.2 - - 86.0 84.2
Sales And Use Taxes 72.4 72.8 - - 72.4 72.8
Transient Occupancy Taxes 63.3 65.9 - - 63.3 65.9
Utility Users Taxes 36.6 36.7 - - 36.6 36.7
Business License 37.2 39.5 - - 37.2 39.5
Parking Facility Taxes 14.1 11.1 - - 14.1 11.1
Real Property Transfer Taxes 35.0 47.5 - - 35.0 47.5
Other Taxes 4.2 4.0 - - 4.2 4.0
Investment Income 25.9 22.1 21.9 12.4 47.8 34.5
Other Revenue 11.8 32.6 8.9 8.8 20.7 41.4
Total Revenues 600.2 588.0 258.0 238.5 858.2 826.5
Expenses:
General Government 78.1 65.4 - - 78.1 65.4
Public Safety 209.1 195.6 - - 209.1 195.6
General Services 107.2 101.6 - - 107.2 101.6
Housing And Community Services 131.0 123.9 - - 131.0 123.9 Library 12.4 13.5 - - 12.4 13.5
Community Development 35.3 38.5 - - 35.3 38.5
Interest On Long-term Debt 3.5 3.7 - - 3.5 3.7
Business-type Activities: - -
Water - - 43.0 35.1 43.0 35.1
Resource Recovery And Recycling - - 37.8 40.6 37.8 40.6 Pier - - 8.9 9.0 8.9 9.0
Wastewater - - 29.5 24.8 29.5 24.8
Airport - - 23.7 28.1 23.7 28.1
Stormwater Management - - 0.4 0.5 0.4 0.5
Cemetery - - 3.0 2.6 3.0 2.6
Big Blue Bus - - 105.0 101.2 105.0 101.2
Parking Authority - - 0.1 0.1 0.1 0.1
Total Expenses 576.6 542.2 251.4 242.0 828.0 784.2
Excess (Deficiency) Before Transfers 23.6 45.8 6.6 (3.5) 30.2 42.3 Transfers (0.5) 0.7 0.5 (0.7) - -
Changes In Net Position 23.1 46.5 7.1 (4.2) 30.2 42.3
Net Position - Beginning 930.9 884.4 565.2 569.4 1,496.1 1,453.8 Change In Accounting Principle (4.2) - (0.9) - (5.1) -
Net Position - Beginning, As
Restated 926.6 884.4 564.3 569.4 1,490.9 1,453.8
Net Position - Ending $ 949.7 $ 930.9 $ 571.4 $ 565.2 $ 1,521.1 $ 1,496.1 Governmental Activities. The City’s governmental activities net position increased by $23.1 million, or 2.5%, including the $(4.2) million restatement for the change in accounting principle. Analysis of revenues and expenses are discussed below and on the following pages.
CITY OF SANTA MONICA, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
FOR THE YEAR ENDED JUNE 30, 2025
28 4.C.a
Packet Pg. 343 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Revenue Sources: Governmental Activities. As shown in the chart below, the largest category of revenue for governmental activities is charges for services, which represents 22.0% of total governmental activities revenue.
The category totaled $131.8 million in FY 2024-25, compared to $122.7 million in FY 2023-24, which is an increase of $9.1 million or 7.4% due to increases in Fire department billable services related to mutual aid deployments, digital kiosk licensing agreement revenues as kiosk installations were completed during FY 2025, and a one-time reimbursement from the Local California Housing Trust Fund (LHTF). The second largest category is property taxes, which represent 14.3% of total governmental activities revenue. Property taxes increased $1.8 million or 2.1% from the prior fiscal year. The increase was primarily due to a continued growth in the City’s assessed valuation. The third largest category is sales and use taxes, which represent 12.1% of total governmental activities revenue, which decreased $0.4 million or less than 0.1% from the prior fiscal year. Sales tax growth across the State during the fiscal year was notably weak, reflecting a partial reversal of the unusually strong gains that followed the pandemic-era spending surge. In Santa Monica, returns from the business and industrial sector declined as several firms reported lower sales activity in a difficult economic climate. The Palisades fire in January 2025 also disrupted tourism and daily life, leading to reduced business for local restaurants, hotels, and retail stores. Additionally impact sales and use taxes were the City’s auto dealership luxury and EV vehicle activity softened after previously surging in FY2023-24. Transient Occupancy Taxes decreased $2.6 million from $65.9 million to $63.3 million or 3.9% primarily due to the lingering effects of Los Angeles-area wildfires and global geopolitical uncertainty, which has impacted tourism and visitor related revenues.
CITY OF SANTA MONICA, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
FOR THE YEAR ENDED JUNE 30, 2025
29 Source of Revenue Governmental Activities
Charges for services
22.0%
Operating grants and
contributions
9.7%
Capital grants and contributions
4.0%
Sales and use taxes
12.1% Business license taxes
6.2%
Property taxes
14.3%
Transient occupancy taxes
10.5%
Utility users taxes
6.1%
Real property transfer taxes
5.8%
Parking facility taxes
2.3%
Other taxes
0.7%
Other general revenues
6.3%
4.C.a
Packet Pg. 344 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Functional Expenses: Governmental Activities. As displayed in the chart below, general government, public safety, general services, housing and community services, and community development accounted for 97.2% of total governmental activities expenses.
Total governmental activities expenses increased $34.4 million or 6.3% from the prior fiscal year after restatement. The three categories with the largest variance from the prior year were general government, public safety, and housing and community services. General government expenses increased $12.7 million or 19.4%.
Public safety increased $13.5 million or 6.9%. Housing and community services increased by $7.1 million or 5.7%.
General government increased due to the OPEB and pension expense from the amortization of the deferred inflows/outflows for both pensions and OPEB, as well as the recognition of subscription-based information technology arrangements under GASB 96. Public safety expenses increased primarily due to additional overtime expenses incurred by the Fire department related to mutual aid where City’s firefighters are sent to events outside the City for which the City is reimbursed. Other increases included those related to the Palisades fire where a portion of the City was evacuated and the Police department provided 24-hour security in these areas. The City is seeking reimbursement for these expenses from FEMA. Additionally, there was a comparable agency pay increase to Police sworn positions, as well as City filled more vacant sworn Police personnel than in previous years, due to increased recruitment efforts. Community development increased due to expenses related to one time grant funds.
CITY OF SANTA MONICA, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
FOR THE YEAR ENDED JUNE 30, 2025
30 Functional Expenses Governmental Activities
General government
13.5%
Public safety
36.3%
General services
18.6%
Housing and
community services
22.7%
Library
2.2%
Community development
6.1%
Interest on long-term debt
0.6%
4.C.a
Packet Pg. 345 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Program Expenses: Governmental Activities. The following chart compares program revenues and expenses for governmental activities (excluding interest on long-term debt):
Expenses and Program Revenues Governmental Activities (in millions) Expenses Revenues
General
government
Public safety General
services
Housing and
community
services
Library Community
development
$-
$100.0
$200.0
The comparison of direct expenses and program revenues identifies the extent to which each function is selffinancing or draws from the general revenues of the City. A higher percentage of program revenues to direct expenses indicates that a function is generally self-financed through program revenues generated by activities within that function. In contrast, a lower percentage of program revenues to direct expenses indicates that a function is primarily financed through general revenues.
The function with the highest percentage of program revenues to direct expenses in FY 2024-25 is community development, which had expenses of $35.3 million and program revenues of $28.8 million, a ratio of 81.4%. This high percentage indicates that all the expenses in this category are financed by revenues generated by activities within the community development category.
The function with the lowest percentage of program revenues to direct expenses in FY 2024-25 is the library, which had expenses of $12.4 million and program revenues of $0.4 million, a ratio of 3.2%. This low percentage indicates that most of the expenses in this category are financed by the general revenues of the City.
CITY OF SANTA MONICA, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
FOR THE YEAR ENDED JUNE 30, 2025
31 4.C.a
Packet Pg. 346 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Business-type Activities. The City’s business-type activities net position increased $6.2 million or 1.1% from the prior fiscal year.
Revenue Sources: Business-type activities. The chart below displays the key sources of revenue for businesstype activities as a percentage of total revenues. The top three sources of revenue for business-type activities are charges for services, operating grants and contributions, and other general revenues. These three categories account for 94.0% of the total business-type activities revenues of $258.0 million.
Sources of Revenue Business-type Activities
Charges for services
56.3%
Operating grants and
contributions
25.6%
Capital grants and contributions
6.0%
Other general revenues
12.1%
CITY OF SANTA MONICA, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
FOR THE YEAR ENDED JUNE 30, 2025
32 4.C.a
Packet Pg. 347 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Expenses: Business-type Activities. The chart below displays individual business-type activities as a percentage of total business-type activity expenses. The Big Blue Bus, water, resource recovery and recycling, and airport activities accounted for 83.4% of total business-type activity expenses. Other business-type activities of the City include the wastewater, pier, cemetery, stormwater management, and Parking Authority.
Business-type Activities Expenses
Water
17.1%
Resource Recycling
and Recovery
15.0%
Pier
3.5%
Wastewater
11.7% Airport
9.4%
Stormwater Management
0.2%
Cemetery
1.2%
Big Blue Bus
41.9%
Parking Authority
0.1%
CITY OF SANTA MONICA, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
FOR THE YEAR ENDED JUNE 30, 2025
33 4.C.a
Packet Pg. 348 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Program Revenues and Expenses: Business-type Activities. The following chart compares program revenues and expenses for business-type activities:
Expenses and Program Revenues Business-type Activities (in millions) Expenses Revenues
Parking Authority
Stormwater Management
Cemetery
Pier
Airport
Wastewater
Water
Resource Recovery and Recycling
Big Blue Bus
$-
$20.0
$40.0
$60.0
$80.0
$100.0
For discussion and analysis of key points of business-type activities, see the following section on the City’s major proprietary funds.
FINANCIAL ANALYSIS OF THE CITY'S MAJOR FUNDS
As noted earlier, the City uses fund accounting to demonstrate compliance with finance-related legal requirements.
Governmental funds. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financial requirements.
The City’s governmental funds total fund balance increased $16.5 million or 3.0% from the prior fiscal year. The primary reasons for the increase are discussed on the following pages.
General Fund
The General Fund is the chief operating fund of the City. Total fund balance in the General Fund decreased $6.5 million or 3.7% from the prior fiscal year.
CITY OF SANTA MONICA, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
FOR THE YEAR ENDED JUNE 30, 2025
34 4.C.a
Packet Pg. 349 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Key factors in changes in revenues and expenditures from the prior year are as follows:
1. Total General Fund revenues, including unrealized gains and losses on the City’s pooled investments, decreased $7.4 million or 1.6% from the prior fiscal year. The largest revenue source in the General Fund is property taxes followed by sales and use taxes, and finally transient occupancy taxes. Combined, these three categories represented 49.3% of the total General Fund revenues for FY 2024-25. Property taxes increased $1.9 million or 2.2% from the previous year as assessed value increases begin to slow.
Transient occupancy taxes decreased $2.5 million or 3.9%, primarily due to the lingering effects of Los Angeles-area wildfires and global geopolitical uncertainty, which has impacted tourism and visitor related revenues. Investment income increased by $0.7 million due to a stronger-than-expected market performance, bolstered by continued portfolio diversification.
2. Total General Fund expenditures increased $18.0 million or 4.2% from the prior fiscal year. This increase was due primarily to an increase in public safety expenditures of $9.7 million or 5.4% and an increase in general services expenditures of $2.2 million or 2.9%. Public safety, general services, and general government represent the largest expense categories of the General Fund which account for 77.7% of all General Fund expenditures for FY 2024-25. The main driver of the increases are primarily comparable agency pay increase to Police sworn positions and filling of more sworn officer vacancies than in previous years. Additionally, the costs incurred related to the Palisades fire in January of 2025 when both Police and Fire were deployed. Higher general liability and auto insurance premiums are the primary contributor to the increase in the general services category.
Special Revenue Source Fund
Total fund balance in the Special Revenue Source Fund increased $0.9 million or 0.4% from the prior fiscal year.
Total revenues increased $2.8 million or 61.4%, primarily from developer fees and an Opioid settlement payment.
Measure GS Fund
Total fund balance in the Measure GS Fund increased $14.8 million as compared to the prior year’s fund balance of $18.2 million. The variance from the prior year is driven by timing of actual payments and accruals. When the Measure first took effect in March 2023, only four months of costs were recorded in FY 2022–23. To properly reflect a full year of obligations for that first year, the City booked an additional $8.0 million in FY 2023–24. That one-time catch-up made FY 2023–24 appear higher than normal. FY 2024–25 shows a standard, full-year amount with no catch-up needed. The year-to-year change is simply the result of accounting adjustments. Note that total revenues for the fund decreased from $37.1 to $24.8 million as sales of properties qualifying for Measure GS tax decreased.
Low and Moderate Income Housing Asset Fund
Total fund balance in the Low and Moderate Income Housing Asset Fund increased $0.8 million or 1.2% from the prior fiscal year.
Proprietary funds. The City’s proprietary funds provide the same type of information found in the governmentwide financial statements but in more detail.
The total net position of all the City’s enterprise funds increased $7.7 million, or 1.5%, from the prior fiscal year.
Some proprietary fund revenues may not be spent in the year they are recognized, instead they are held for futures capital purposes. Fee increases include both an operating and capital component.
CITY OF SANTA MONICA, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
FOR THE YEAR ENDED JUNE 30, 2025
35 4.C.a
Packet Pg. 350 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Water Fund
The total net position of the Water Fund increased $7.2 million, or 12.0% from the prior fiscal year. The increase is primarily tied to revenues, which reflect a $5.4 million increase in water service charges from a 14% water rate increase and increased customer water usage as workers continue to return to office and business activity increased.
Wastewater Fund
The total net position of the Wastewater Fund decreased $1.4 million, or 0.7% from the prior fiscal year. The primary reason was an increase in charges for services revenue and investment income, partially offset by an increase in contractual services expenses of $4.9 million. The increased costs were related to contractual services for City’s new SWIP treatment plant and increases in the payments to the City of Los Angeles for sewage disposal which included a true up payment for FY 2023-24 activity.
Resource Recovery and Recycling Fund
The total net position of the Resource Recovery and Recycling Fund increased $2.2 million or 1,189.8%. The increase was primarily related to revenue from charges for services and decreased expenses for the purchase of vehicles, offset by large increases in contractual services costs for recycling and disposal services, as the City had to find a new disposal site once the Chiquita Canyon landfill closed. Additionally, Council approved new refuse collection rate increases of approximately 11% on June 13, 2023, which took effect on August 23, 2023.
Big Blue Bus Fund
The total net position of the Big Blue Bus Fund decreased $3.4 million, or 2.1% from the prior fiscal year.The primary reason was a decrease in advertising revenue and an increase in personnel expenses to restore BBB service to approximately 80% of pre-pandemic levels. At June 30, 2025, the Big Blue Bus reported unearned income of $117.1 million that can be used to fund future operations and capital purchases.
Airport Fund
The total net position of the Airport Fund decreased $3.9 million, or 10.3% from the prior fiscal year. The primary reason was the increase expenses for the continued refurbishment of the Airport office space.
General Fund Budgetary Variances
Revenue Original Budget to Final Amended Budget. The final revenue budget of $456.0 million for the General Fund was $2.8 million (0.6%) less than the original budget of $458.8 million. Revenue budget changes are approved by the City Council. The primary components of the variance were increased budgets for business license tax and parking facility tax, partially offset by decreased budget for license and permits.
Revenue Final Amended Budget to Actuals. Actual General Fund revenues of $449.5 million were $6.5 million (1.4%) less, when including unrealized gain and losses, than the final budget of $456.0 million. Actual revenues, not including a decrease in unrealized losses were $11.1 million, less than the final budget of $456.0 million, as the City’s revenues, particularly sales and use tax, transient occupancy tax and parking revenues flattened due to national and regional economic pressures and reductions in tourism.
CITY OF SANTA MONICA, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
FOR THE YEAR ENDED JUNE 30, 2025
36 4.C.a
Packet Pg. 351 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Expenditure Original Budget to Final Amended Budget. The final General Fund expenditure budget is greater than the original budget by $33.5 million, or 7.5%. The variance is primarily attributable to the reappropriation of prior-year funding for multi-year capital projects and the carryover of unspent encumbrances and grant funds within the operating budget. These amounts are set aside in Assigned Fund Balance, as described in note 13D.
The majority of the variance is reflected in capital outlay, as the original budget includes only new capital appropriations approved for the biennial cycle. Because major construction projects typically span multiple fiscal years, unspent prior-year funds are carried forward to support continued project delivery. Accordingly, the final budget incorporates both newly approved capital funding and prior-year amounts that rolled over, resulting in a higher final expenditure budget. Significant projects with prior-year funding reappropriated into the final budget include the Pier Bridge Improvements, City Yards Modernization, Memorial Park Expansion, and Fire Apparatus Replacement.
Expenditure Final Amended Budget to Actuals. Actual General Fund expenditures on a budgetary basis were $463.7 million, compared to a final budget of $480.6 million, resulting in a $16.9 million (3.5%) variance. Most of the variance between actuals and the final budget occurred in capital outlay, where actual spending totaled $3.1 million compared to a $19.1 million final budget, a variance of $15.9 million. Because many capital projects span multiple fiscal years, this variance reflects the timing difference between the establishment of project budgets and the pace of actual spending.
Actual operating expenditures were $450.0 million, compared to a $461.5 million final budget, which includes prior-year reappropriations. The operating variance was driven primarily by vacancy savings across departments, partially offset by higher Public Safety overtime costs associated with mutual-aid deployments and the January 2025 Palisades fire.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets. The City’s capital assets (net of accumulated depreciation and amortization) as of June 30, 2025, amounted to $1,457.3, a decrease of $2.1 million from the prior fiscal year.
This investment in a broad range of capital assets, including land, infrastructure, buildings and improvements, equipment, and construction in progress, is detailed as follows:
Governmental Activities Business-type Activities Total
2025 2024 2025 2024 2025 2024
Land $ 200.3 $ 200.3 $ 53.4 $ 53.4 $ 253.7 $ 253.7
Land Held Under Easement 72.4 72.4 - - 72.4 72.4
Construction In Progress 106.7 96.8 102.6 91.7 209.3 188.5 Subscription Asset - Software As A 11.5 10.6 1.0 2.3 12.5 12.9 Buildings 460.1 460.1 150.1 150.1 610.2 610.2
Improvements Other Than Buildings 231.9 222.2 32.9 32.8 264.8 255.0 Machinery And Equipment 63.3 63.5 266.2 252.7 329.5 316.2 Infrastructure 414.8 413.2 343.0 338.7 757.8 751.9
Utility Systems 1.7 1.7 - - 1.7 1.7
Intangibles 7.5 5.4 128.3 124.9 135.8 130.3
Less Accumulated Depreciation (668.8) (638.0) (521.6) (495.4) (1,190.4) (1,133.4) Capital Assets, Net $ 901.4 $ 908.2 $ 555.9 $ 551.2 $ 1,457.3 $ 1,459.4 Some of the City’s major capital asset events in FY 2024-25 were:
Governmental Activities:
1. Major projects included $2.9 million for the Pier Bridge Improvements, $9.9 million for the City Yards Microgrid and $2.0 million for the Stewart and Pennsylvania Enhancements project.
CITY OF SANTA MONICA, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
FOR THE YEAR ENDED JUNE 30, 2025
37 4.C.a
Packet Pg. 352 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Business-Type Activities:
1. Major projects included $4.4 million for the Smart Water Meters, a $3.4 million payment to the City of Los Angeles for capital improvements to the Amalgamated Sewer System and the Big Blue Bus purchased 2 new electric buses totaling $2.1 million.
Additional information on the City’s capital assets can be found in note 5 to the basic financial statements.
As of June 30, 2025, the City had $94.7 million in construction commitments. For additional information on commitments, see note 16.
Long-term Debt. At the end of the current fiscal year, the City’s total long-term debt outstanding (excluding issuance premiums) was $309.3 million, a decrease from the prior year of $9.7 million or 3.0%. This decrease was due to scheduled debt service payments.
Governmental Business-type Total
2025 2024 2025 2024 2025 2024
Lease Revenue Bonds
(backed by revenues) $ 190.9 $ 197.8 $ 67.7 $ 69.1 $ 258.6 $ 266.9 Notes and loans - - 50.7 52.1 50.7 52.1
Total long-term debt $ 190.9 $ 197.8 $ 118.4 $ 121.2 $ 309.3 $ 319.0 The City of Santa Monica maintains a “AAA” rating from Fitch, and a “Aaa” rating from Moody’s. There were no changes to any bond ratings during FY 2024-25. Subsequent to year end, both Moody’s and Fitch issued “negative outlooks” on the City’s Lease Revenue rating citing uncertainty surrounding the City’s future claims liability and projected general fund deficits during the next two years that could lower the City's reserves to much weaker levels.
Additional information on the City’s long-term debt can be found in note 10 to the basic financial statements.
ECONOMIC FACTORS AND BIENNIAL BUDGET
The City’s adopted General Fund budget for FY 2025-26 supports the core responsibilities of local government, advances the policy interests of the City Council, and responds to the diverse concerns of residents. It outlines a plan to rebuild and enhance services amid continued economic uncertainty shaped by labor shortages, supply chain disruptions, inflationary pressures, and global conflicts, while also addressing significant local liabilities and mounting deferred maintenance.
The budget and the accompanying realignment plan function as a coordinated roadmap that organizes a series of interdependent programs and projects around five strategic priorities. Three priorities reflect City Council identified objectives, and two additional priorities focus on restoring internal capacity and strengthening the organization.
Together, these priorities are:
• Achieving Safe Neighborhoods and Clean Streets
• Activating Economic Opportunity and Growth
• Developing Affordable, Livable, and Secure Housing for All • Creating Organizational Capacity
• Building Organizational Health
Developed under City Council direction, the realignment plan marks a turning point for Santa Monica. It serves as both a blueprint for civic renewal and a call for sustained fiscal discipline, a comprehensive effort to restore public safety, economic vitality, and organizational strength.
CITY OF SANTA MONICA, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
FOR THE YEAR ENDED JUNE 30, 2025
38 4.C.a
Packet Pg. 353 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for
CONTACTING THE CITY'S FINANCE DEPARTMENT
This management’s discussion and analysis is designed to provide 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 or need additional financial information, please visit the City of Santa Monica’s Finance Department website at https://www.santamonica.gov/departments/finance or call (310) 458-8281.
CITY OF SANTA MONICA, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
FOR THE YEAR ENDED JUNE 30, 2025
39 4.C.a
Packet Pg. 354 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for
BASIC FINANCIAL STATEMENTS
40 4.C.a
Packet Pg. 355 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Government-Wide Financial Statements
41 4.C.a
Packet Pg. 356 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Statement of Net Position
ASSETS
Cash and investments (note 2) $ 383,772,226 $ 296,698,134 $ 680,470,360 Receivables (net of uncollectibles):
Accounts 10,333,418 20,879,541 31,212,959
Interest 3,850,498 2,177,427 6,027,925
Taxes 27,063,805 33,722 27,097,527
Leases (note 3) 3,231,377 6,826,834 10,058,211
Notes and loans receivable (note 4) 226,697,264 - 226,697,264 Other governments 15,791,342 11,615,963 27,407,305
Internal balances 15,875,893 (15,875,893) -
Inventory - 3,704,442 3,704,442
Deposits 276,628 - 276,628
Prepaids 3,412,688 161,371 3,574,059
Restricted cash and investments (note 2) 42,343,866 50,569,525 92,913,391 Restricted cash with fiscal agent (note 2) 35,725,525 29,002,552 64,728,077 Lease receivables, non-current 27,293,105 75,245,415 102,538,520 Capital assets (note 5):
Capital assets not being depreciated:
Land 200,323,023 53,380,750 253,703,773
Land held under easement 72,384,923 - 72,384,923
Construction in progress 106,745,667 102,559,422 209,305,089 Capital assets being depreciated:
Subscription asset 11,543,525 986,229 12,529,754
Buildings 460,081,033 150,050,361 610,131,394
Improvements other than buildings 231,936,443 32,937,630 264,874,073 Utility systems 1,742,912 - 1,742,912
Machinery and equipment 63,285,470 266,244,581 329,530,051 Infrastructure 414,784,467 343,042,542 757,827,009
Intangibles 7,475,596 128,279,134 135,754,730
Less accumulated depreciation and amortization (668,859,824) (521,595,821) (1,190,455,645) Total capital assets, net 901,443,235 555,884,828 1,457,328,063 Total assets 1,697,110,870 1,036,923,861 2,734,034,731
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows from pensions (note 12) 127,153,266 25,315,587 152,468,853 Deferred outflows from OPEB (note 12) 15,320,808 1,577,830 16,898,638 Total deferred outflows of resources 142,474,074 26,893,417 169,367,491 Primary Government
Governmental
Activities
Business-Type
Activities Total
CITY OF SANTA MONICA, CALIFORNIA
Statement of Net Position
June 30, 2025
See accompanying Notes to the Basic Financial Statements 42
4.C.a
Packet Pg. 357 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for
LIABILITIES
Accounts payable 30,388,553 18,184,856 48,573,409
Accrued liabilities 13,413,372 4,830,250 18,243,622
Accrued interest payable 3,777,416 1,326,790 5,104,206
Contracts payable (retained percentage) 1,390,861 1,019,129 2,409,990 Unearned revenue (note 7) 41,249,883 119,769,524 161,019,407 Due to other governments 10,000,000 - 10,000,000
Deposits payable from restricted assets 1,609,782 20,094,741 21,704,523 Long-term liabilities:
Due within one year:
Subscriptions (note 6) 1,767,070 165,543 1,932,613
Compensated absences (note 8) 14,410,396 4,250,534 18,660,930 Claims payable (note 9) 19,639,182 4,094,581 23,733,763 Loans and bonds payable (note 10) 7,150,000 2,903,091 10,053,091 Pollution remediation obligation (note 11) 385,130 7,486,966 7,872,096 Due in more than one year:
Subscriptions due in more than one year (note 6) 5,481,604 279,567 5,761,171 Compensated absences due in more
than one year (note 8) 6,117,623 955,648 7,073,271
Claims payable due in more than one year (note 9) 54,019,374 5,041,275 59,060,649 Loans and bonds payable due in more
than one year (note 10) 202,791,943 122,365,833 325,157,776 Pollution remediation obligation due in more
than one year (note 11) 183,956 14,754,649 14,938,605
Net OPEB liability due in more than one year (note 12) 22,625,435 2,330,103 24,955,538 Net pension liability due in more than one year (note 12) 403,304,098 82,024,643 485,328,741 Total liabilities 839,705,678 411,877,723 1,251,583,401
DEFERRED INFLOWS OF RESOURCES
Deferred gain on refunding 325,804 - 325,804
Deferred inflows from leases 27,461,309 77,522,677 104,983,986 Deferred inflows from pensions (note 12) 5,967,825 1,376,797 7,344,622 Deferred inflows from OPEB (note 12) 16,380,583 1,686,972 18,067,555 Total deferred inflows of resources 50,135,521 80,586,446 130,721,967
NET POSITION
Net investment in capital assets 683,001,476 451,627,151 1,134,628,627 Restricted:
Community development 207,549,739 - 207,549,739
Housing and community services 4,755,565 - 4,755,565
Transportation 37,885,404 - 37,885,404
Clean beaches and ocean parcel tax 19,372,862 - 19,372,862 Debt service 10,998,989 2,298,946 13,297,935
Other 16,483,280 - 16,483,280
Perpetual care - nonexpendable 20,904,188 - 20,904,188
Prop 1B - 8,968,440 8,968,440
Unrestricted (51,207,758) 108,458,572 57,250,814
Total net position $ 949,743,745 $ 571,353,109 $ 1,521,096,854 Primary Government
Governmental
Activities
Business-Type
Activities Total
CITY OF SANTA MONICA, CALIFORNIA
Statement of Net Position
June 30, 2025
See accompanying Notes to the Basic Financial Statements 43
4.C.a
Packet Pg. 358 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Statement of Activities
Functions/Programs:
Primary government:
Governmental activities:
General government $ 78,057,192 $ 26,242,185 $ 4,818,052 $ - Public safety 209,191,172 19,181,063 4,300,667 41,504
General services 107,156,523 34,540,598 11,164,541 22,955,201 Housing and community services 130,976,599 24,810,273 35,747,892 724,488 Library 12,370,179 64,006 227,255 118,834
Community development 35,341,579 26,997,462 1,779,684 300 Interest on long-term debt 3,510,405 - - -
Total governmental activities 576,603,649 131,835,587 58,038,091 23,840,327 Business-type activities:
Water 42,965,620 46,106,241 - -
Wastewater 29,492,026 23,537,938 - -
Stormwater management 453,216 1,446,891 - -
Pier 8,890,830 9,445,078 - -
Resource recovery and recycling 37,761,322 39,541,395 - - Airport 23,670,657 13,846,413 - -
Cemetery 2,957,412 2,889,410 - -
Big Blue Bus 105,009,401 8,746,191 66,037,778 15,615,014 Parking authority 174,443 - - -
Total business-type activities 251,374,927 145,559,557 66,037,778 15,615,014 Total primary government $ 827,978,576 $ 277,395,144 $ 124,075,869 $ 39,455,341 General revenues and transfers:
General revenues:
Property taxes
Sales and use taxes
Transient occupancy taxes
Utility users taxes
Business license taxes
Parking facility taxes
Real property transfer taxes
Other taxes
Other revenue
Investment income
Transfers
Total general revenues and transfers
Change in net position
Net position-beginning, as originally reported
Change in accounting principle
Net position-beginning, as restated
Net position-ending
Program Revenues
Expenses
Charges for
Services
Operating
Grants and
Contributions
Capital Grants
and
Contributions
CITY OF SANTA MONICA, CALIFORNIA
Statement of Activities
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements 44
4.C.a
Packet Pg. 359 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Net (Expenses) Revenues and
Changes in Net Position
Primary Government
Governmental
Activities
Business-Type
Activities Total
$ (46,996,955) $ - $ (46,996,955)
(185,667,938) - (185,667,938)
(38,496,183) - (38,496,183)
(69,693,946) - (69,693,946)
(11,960,084) - (11,960,084)
(6,564,133) - (6,564,133)
(3,510,405) - (3,510,405)
(362,889,644) - (362,889,644)
- 3,140,621 3,140,621
- (5,954,088) (5,954,088)
- 993,675 993,675
- 554,248 554,248
- 1,780,073 1,780,073
- (9,824,244) (9,824,244)
- (68,002) (68,002)
- (14,610,418) (14,610,418)
- (174,443) (174,443)
- (24,162,578) (24,162,578)
(362,889,644) (24,162,578) (387,052,222)
85,970,092 - 85,970,092
72,412,063 - 72,412,063
63,318,760 - 63,318,760
36,618,147 - 36,618,147
37,117,978 - 37,117,978
14,124,830 - 14,124,830
35,012,952 - 35,012,952
4,187,528 - 4,187,528
11,807,873 8,851,898 20,659,771
25,903,758 21,865,495 47,769,253
(486,920) 486,920 -
385,987,061 31,204,313 417,191,374
23,097,417 7,041,735 30,139,152
930,859,064 565,220,656 1,496,079,720
(4,212,736) (909,282) (5,122,018)
926,646,328 564,311,374 1,490,957,702
$ 949,743,745 $ 571,353,109 $ 1,521,096,854
CITY OF SANTA MONICA, CALIFORNIA
Statement of Activities
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements 45
4.C.a
Packet Pg. 360 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Major Governmental Fund Financial Statements
General Fund – To account for all financial resources necessary to carry out basic governmental activities of the City that are not accounted for in another fund. The General Fund supports essential City services such as police and fire protection, street maintenance, libraries, parks and open space management.
Special Revenue Source Fund (Special Revenue Fund Type) – To account for receipt and expenditure of monies restricted, committed or assigned for specific uses.
Measure GS (Special Revenue Fund Type) - To account for receipt and expenditure of Measure GS documentary tax.
Low and Moderate Income Housing Asset Fund (Special Revenue Fund Type) – Under Senate Bill 341, housing assets transferred to the City’s Housing Successor Agency together with any funds generated from those housing assets, shall be maintained in a separate Low and Moderate Income Housing Asset Fund. These funds can be used as previously allowed under the Low and Moderate Income Housing Fund established under Community Redevelopment Law, program monitoring and preserving the long-term affordability of units subject to affordability restrictions, homeless prevention and rapid rehousing services, and for the development of affordable housing for lower income households. Under SB107, 20% of all Successor Agency/City loan payments are distributed to this Fund.
CITY OF SANTA MONICA, CALIFORNIA
46 4.C.a
Packet Pg. 361 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Balance Sheet - Governmental Funds
Special Revenue Funds
General Fund
Special
Revenue
Source Fund
Measure GS
Fund
Low and
Moderate
Income
Housing
Asset Fund
ASSETS
Cash and investments (note 2) $ 151,526,852 $ 66,975,793 $ 42,370,525 $ 14,489,926 Restricted cash and investments (note 2) 432,349 - - -
Receivables (net, where applicable, of
allowances for uncollectible):
Accounts 8,113,760 363,247 - -
Leases (note 3) 18,914,745 - - -
Notes (note 4) - 151,356,842 - 53,561,840
Taxes 26,277,812 - 670,000 -
Interest 2,470,900 150,242 - 102,558
Other governments 173,828 - - -
Due from other funds 8,794,080 - - -
Deposits 273,371 - - -
Prepaids 3,412,432 - - -
Restricted assets:
Restricted cash with fiscal agent (note 2) 4,034,104 - - - Advances to other funds (note 17) 3,952,314 1,450,000 - - Total assets $ 228,376,547 $ 220,296,124 $ 43,040,525 $ 68,154,324
LIABILITIES
Accounts payable $ 21,323,158 $ 691,045 $ - $ -
Accrued liabilities 11,954,828 - - -
Contracts payable (retained percentage) 391,205 162,908 - - Due to other funds (note 17) - - - -
Due to other governments - - 10,000,000 -
Unearned revenue (note 7) 8,145,412 29,088,209 - -
Deposits payable 1,193,199 30,000 - -
Advances from other funds (note 17) - - - -
Total liabilities 43,007,802 29,972,162 10,000,000 -
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue (note 7) 2,832 - - -
Deferred inflows from leases 17,313,182 - - -
Total deferred inflows of resources 17,316,014 - - -
FUND BALANCES (DEFICITS)
Nonspendable 7,638,117 - - -
Restricted 4,964,372 76,367,677 33,040,525 68,154,324
Committed - 113,956,285 - -
Assigned 93,330,348 - - -
Unassigned 62,119,894 - - -
Total fund balances (deficits) 168,052,731 190,323,962 33,040,525 68,154,324 Total liabilities, deferred inflows of
resources and fund balances (deficits) $ 228,376,547 $ 220,296,124 $ 43,040,525 $ 68,154,324
CITY OF SANTA MONICA, CALIFORNIA
Balance Sheet
Governmental Funds
June 30, 2025
See accompanying Notes to the Basic Financial Statements 47
4.C.a
Packet Pg. 362 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Total Total
Nonmajor Governmental
Funds Funds
ASSETS
Cash and investments (note 2) $ 28,031,289 $ 303,394,385 Restricted cash and investments (note 2) 41,911,517 42,343,866 Receivables (net, where applicable, of
allowances for uncollectible):
Accounts 1,841,570 10,318,577
Leases (note 3) 11,609,737 30,524,482
Notes (note 4) 21,778,582 226,697,264
Taxes 115,993 27,063,805
Interest 566,637 3,290,337
Other governments 15,617,514 15,791,342
Due from other funds - 8,794,080
Deposits 3,257 276,628
Prepaids 256 3,412,688
Restricted assets:
Restricted cash with fiscal agent (note 2) 31,691,421 35,725,525 Advances to other funds (note 17) - 5,402,314
Total assets $ 153,167,773 $ 713,035,293
LIABILITIES
Accounts payable $ 6,293,583 $ 28,307,786
Accrued liabilities 556,905 12,511,733
Contracts payable (retained percentage) 772,063 1,326,176 Due to other funds (note 17) 8,527,475 8,527,475
Due to other governments - 10,000,000
Unearned revenue (note 7) 4,016,262 41,249,883
Deposits payable 386,583 1,609,782
Advances from other funds (note 17) 5,402,314 5,402,314 Total liabilities 25,955,185 108,935,149
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue (note 7) 9,374,069 9,376,901
Deferred inflows from leases 10,148,127 27,461,309
Total deferred inflows of resources 19,522,196 36,838,210
FUND BALANCES (DEFICITS)
Nonspendable 20,904,444 28,542,561
Restricted 109,176,144 291,703,042
Committed - 113,956,285
Assigned - 93,330,348
Unassigned (22,390,196) 39,729,698
Total fund balances (deficits) 107,690,392 567,261,934
Total liabilities, deferred inflows of
resources and fund balances (deficits) $ 153,167,773 $ 713,035,293
CITY OF SANTA MONICA, CALIFORNIA
Balance Sheet
Governmental Funds
June 30, 2025
See accompanying Notes to the Basic Financial Statements 48
4.C.a
Packet Pg. 363 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position Amounts reported for governmental activities in the Statement of Net Position are different because:
Total fund balances - governmental funds $ 567,261,934
Capital assets, net of accumulated depreciation/amortization, used in governmental activities are not financial resources and, therefore, are not reported in the funds. 899,661,476
Differences between expected and actual experiences, assumption changes and net differences between projected and actual earnings, and contributions subsequent to the measurement date for the postretirement benefits (pension and OPEB) are recognized as deferred outflows of resources and deferred inflows of resources on the Statement of Net Position.
Deferred outflows-pension related $ 126,523,182
Deferred outflows-OPEB related 15,289,354
Deferred inflows-pension related (5,933,558)
Deferred inflows-OPEB related (16,346,953)
Total deferred outflows and inflows related to postemployment benefits 119,532,025 Internal service funds provide services to other funds on a costreimbursement basis. The assets, deferred outflows of resources, liabilities, and deferred inflows of resources of the internal service funds are included in governmental activities in the Statement of Activities. 19,239,647 Long-term liabilities that are not due and payable in the current period, and therefore, are not reported in the funds.
Bonds payable (209,941,944)
SBITA payable (5,825,079)
Compensated absences (21,047,353)
Accrued interest payable on long-term debt (3,777,416)
Pollution remediation liability (569,086)
Net pension liability (401,262,573)
Net OPEB liability (22,578,984)
Total long-term liabilities (665,002,435)
Governmental funds report the effect of premiums, discounts, and refundings and similar items when debt is first issued, whereas, these amounts are deferred and amortized in the Statement of Activities.
Deferred amount on refunding $ (325,803)
Total premiums, discounts, and deferred items (325,803) Revenues reported as unavailable revenue in the governmental funds and recognized in the statement of activities. These are included in the intergovernmental revenues in the governmental fund activity. 9,376,901 Net position of governmental activities $ 949,743,745
CITY OF SANTA MONICA, CALIFORNIA
Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position
June 30, 2025
See accompanying Notes to the Basic Financial Statements 49
4.C.a
Packet Pg. 364 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds Special Revenue Funds
Special
Revenue
Source Fund
Measure GS
Fund
Low and
Moderate
Income
Housing Asset
General Fund Fund
REVENUES
Property taxes $ 85,970,092 $ - $ - $ -
Sales and use taxes 72,412,063 - - -
Transient occupancy taxes 63,318,760 - - -
Utility user taxes 36,618,147 - - -
Real property transfer fees 10,215,627 - 24,797,325 -
Business license taxes 38,479,130 - - -
Parking facilities taxes 14,124,830 - - -
Other taxes 151,067 - - -
Licenses and permits 34,728,701 - - -
Intergovernmental 1,779,337 2,389,556 - -
Charges for services 56,378,405 584,466 - -
Fines and forfeitures 11,214,264 - - -
Investment income 13,401,437 1,040,924 - 769,388
Rental income 7,382,215 - - -
Settlement income 22,797 - - -
Other revenue 3,294,788 3,240,215 - 206,700
Total revenues 449,491,660 7,255,161 24,797,325 976,088
EXPENDITURES
Current:
General government 77,160,020 - - -
Public safety 191,496,784 49,989 - -
General services 78,866,473 296,207 - -
Housing and community services 61,271,576 2,363,205 10,000,000 - Library 11,466,446 - - -
Community development 21,866,928 6,400 - 162
Capital outlay 3,149,907 5,291,225 - -
Debt service:
Principal 1,473,769 - - -
Interest 258,873 - - -
Total expenditures 447,010,776 8,007,026 10,000,000 162 Excess (deficiency) of revenues
over (under) expenditures 2,480,884 (751,865) 14,797,325 975,926
OTHER FINANCING SOURCES (USES)
Transfers in 15,094,488 4,576,471 - -
Transfers out (26,110,718) (2,972,841) - (146,691)
Inception of lease and SBITA arrangements 1,988,506 - - - Total other financing sources (uses) (9,027,724) 1,603,630 - (146,691) Net change in fund balances (6,546,840) 851,765 14,797,325 829,235 Fund balances-beginning 174,599,571 189,472,197 18,243,200 67,325,089 Fund balances-ending $ 168,052,731 $ 190,323,962 $ 33,040,525 $ 68,154,324
CITY OF SANTA MONICA, CALIFORNIA
Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements 50
4.C.a
Packet Pg. 365 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Total Total
Nonmajor Governmental
Funds Funds
REVENUES
Property taxes $ - $ 85,970,092
Sales and use taxes - 72,412,063
Transient occupancy taxes - 63,318,760
Utility user taxes - 36,618,147
Real property transfer fees - 35,012,952
Business license taxes - 38,479,130
Parking facilities taxes - 14,124,830
Other taxes 4,036,461 4,187,528
Licenses and permits 91,182 34,819,883
Intergovernmental 76,162,406 80,331,299
Charges for services 20,270,994 77,233,865
Fines and forfeitures - 11,214,264
Investment income 6,514,930 21,726,679
Rental income 1,192,403 8,574,618
Settlement income - 22,797
Other revenue 2,687,803 9,429,506
Total revenues 110,956,179 593,476,413
EXPENDITURES
Current:
General government 650,874 77,810,894
Public safety 4,853,580 196,400,353
General services 4,327,629 83,490,309
Housing and community services 52,326,978 125,961,759
Library 87,785 11,554,231
Community development 5,811,038 27,684,528
Capital outlay 30,428,696 38,869,828
Debt service:
Principal 6,906,044 8,379,813
Interest 7,716,688 7,975,561
Total expenditures 113,109,312 578,127,276
Excess (deficiency) of revenues
over (under) expenditures (2,153,133) 15,349,137
OTHER FINANCING SOURCES (USES)
Transfers in 17,505,753 37,176,712
Transfers out (8,799,376) (38,029,626)
Inception of lease and SBITA arrangements - 1,988,506
Total other financing sources (uses) 8,706,377 1,135,592 Net change in fund balances 6,553,244 16,484,729
Fund balances-beginning 101,137,148 550,777,205
Fund balances-ending $ 107,690,392 $ 567,261,934
CITY OF SANTA MONICA, CALIFORNIA
Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements 51
4.C.a
Packet Pg. 366 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Government-Wide Statement of Activities Amounts reported for governmental activities in the Statement of Activities are different because:
Net change in fund balances - total governmental funds: $ 16,484,729 Governmental funds report capital outlays are expenditures. However, in the Statement of Activities, the cost of these assets is allocated over their estimated useful lives and reported as depreciation/amortization expense. This is the amount by which capital outlays exceeded depreciation/amortization expense in the current period.
Capital outlay $ 29,107,850
Depreciation/amortization expense (31,587,548)
Total adjustment (2,479,698)
Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds.
Earned but unavailable grant revenues 3,078,494
Total adjustment 3,078,494
The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, and donations) is to increase/(decrease) net position.
Loss/(gain) on disposal of capital assets (5,393,162)
Total adjustment (5,393,162)
Bond and other debt proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the Statement of Net Position. Repayment of bond and other debt principal is an expenditure in the governmental funds, but repayment reduces long-term liabilities in the Statement of Net Position. Also, governmental funds report the effect of premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the Statement of Activities.
Subscription repayments (411,984)
Amortization of bond premiums and discounts 1,142,758
Amortization of deferred amounts on refunding 61,819
Principal payments 6,840,000
Total adjustment 7,632,593
Internal service funds provide services to other funds on a cost-reimbursement basis. The net revenue of certain activities of internal service funds is reported with governmental activities. 9,343,493
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 the governmental funds.
Accrued interest on long-term debt 145,750
Compensated absences (2,131,423)
Pollution remediation 373,912
Changes in pension liabilities and related deferred outflows and inflows of resources (5,475,388)
Changes in OPEB liabilities and related deferred outflows and inflows of resources 1,518,117
Total adjustment (5,569,032)
Change in net position of governmental activities $ 23,097,417
CITY OF SANTA MONICA, CALIFORNIA
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Government-Wide Statement of Activities For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements 52
4.C.a
Packet Pg. 367 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Proprietary Fund Financial Statements
Major Enterprise Funds are used to report any activity for which a fee is charged to external users for goods or services.
Water Fund – To account for revenues and expenses of providing water service to the citizens of the City.
Wastewater Fund – To account for revenues and expenses associated with maintaining the sanitary sewer systems within the City.
Resource Recovery and Recycling Fund – To account for revenues and expenses of operating the City's refuse collection, street sweeping and cleaning, and recycling programs.
Airport Fund – To account for the activities of the Santa Monica Municipal Airport.
Big Blue Bus Fund – To account for revenues and expenses related to operation of the City's municipal bus lines.
Internal Service Funds – To account for the financing of goods or services provided by one department or agency to other departments or agencies of the City or to other governments, on a cost-reimbursement basis.
CITY OF SANTA MONICA, CALIFORNIA
53 4.C.a
Packet Pg. 368 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Statement of Net Position - Proprietary Funds
ASSETS
Current assets:
Cash and investments (note 2) $ 5,364,885 $ 45,265,830 $ 4,504,711 $ 35,803,560 Restricted cash and investments (note 2) 355,474 2,298,946 - 1,278,418 Receivables (net of uncollectibles):
Accounts 8,109,319 4,063,034 6,396,984 362,818
Interest 101,413 326,458 172,651 319,392
Leases (note 3) 44,690 - - 4,103,323
Taxes - - - -
Due from other governments - - - -
Inventory - - - -
Prepaids 54,132 - - 2
Total current assets 14,029,913 51,954,268 11,074,346 41,867,513 Noncurrent:
Restricted cash and investments (note 2) 479,210 541,347 17,791,855 - Restricted cash with fiscal agent (note 2) 29,002,552 - - - Leases receivable 2,984,352 - - 62,136,071
Capital assets, net of depreciation and
amortization (note 5) 132,458,919 211,446,864 1,743,722 2,934,220 Total noncurrent assets 164,925,033 211,988,211 19,535,577 65,070,291 Total assets 178,954,946 263,942,479 30,609,923 106,937,804
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows from pensions 2,630,194 939,609 3,242,633 666,601 Deferred outflows from OPEB 309,770 27,847 149,328 23,960 Total deferred outflows of resources 2,939,964 967,456 3,391,961 690,561
LIABILITIES
Current liabilities:
Accounts payable 3,857,985 4,859,440 1,508,378 1,364,263 Accrued liabilities 463,641 145,732 525,091 109,709
Accrued interest payable 870,620 456,170 - -
Contracts payable (retained percentage) 266,388 17,000 54,623 577,023 Unearned revenue (note 7) - - - 2,698,117
Due to other funds (note 17) - - - -
Compensated absences, due within one year
(note 8) 453,229 189,959 500,316 132,392
Claims payable, due within one year (note 9) - - - -
Liabilities payable from restricted assets -
deposits 231,517 - 17,776,855 1,645,252
Pollution remediation obligation, due within
one year (note 11) 7,486,966 - - -
Loans and bonds payable, due within one
year (note 10) 1,495,000 1,408,091 - -
Subscription liability, due within one year (note 6) 64,351 43,108 - - Total current liabilities 15,189,697 7,119,500 20,365,263 6,526,756 Business-Type Activities
Water Fund
Wastewater
Fund
Resource
Recovery and
Recycling
Fund Airport Fund
CITY OF SANTA MONICA, CALIFORNIA
Statement of Net Position
Proprietary Funds
June 30, 2025
See accompanying Notes to the Basic Financial Statements 54
4.C.a
Packet Pg. 369 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Noncurrent liabilities:
Compensated absences, due in more than
one year (note 8) 195,581 84,029 144,559 45,001
Subscription liability, due in more than one year
(note 6) 69,563 47,052 - -
Claims payable, due in more than one year
(note 9) - - - -
Pollution remediation obligation, due in more
than one year (note 11) 14,754,649 - - -
Loans and bonds payable, due in more than
one year (note 10) 73,088,414 49,277,419 - -
Net OPEB liability, due in more than one year
(note 12) 457,461 41,123 220,524 35,384
Net pension liability, due in more than one year
(note 12) 8,522,050 3,044,413 10,506,406 2,159,843
Total noncurrent liabilities 97,087,718 52,494,036 10,871,489 2,240,228 Total liabilities 112,277,415 59,613,536 31,236,752 8,766,984
DEFERRED INFLOWS OF RESOURCES
Deferred inflows from pension (note 12) 143,044 51,101 176,352 36,253 Deferred inflows from OPEB (note 12) 331,197 29,773 159,657 25,618 Deferred inflows from leases (note 3) 1,891,260 - - 64,559,838 Total deferred inflows of resources 2,365,501 80,874 336,009 64,621,709
NET POSITION
Net investment in capital assets 85,174,195 158,785,787 1,743,722 2,917,500 Restricted for Prop 1B - - - -
Restricted for debt service - 2,298,946 - -
Unrestricted (17,922,201) 44,130,792 685,401 31,322,172 Total net position $ 67,251,994 $ 205,215,525 $ 2,429,123 $ 34,239,672 Business-Type Activities
Water Fund
Wastewater
Fund
Resource
Recovery and
Recycling
Fund Airport Fund
CITY OF SANTA MONICA, CALIFORNIA
Statement of Net Position
Proprietary Funds
June 30, 2025
See accompanying Notes to the Basic Financial Statements 55
4.C.a
Packet Pg. 370 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for ASSETS
Current assets:
Cash and investments (note 2) $ 130,280,507 $ 21,737,806 $ 242,957,299 $ 134,118,676 Restricted cash and investments (note 2) 17,557,727 10,266,548 31,757,113 - Receivables (net of uncollectibles):
Accounts 1,201,682 720,028 20,853,865 40,517
Interest 711,421 182,456 1,813,791 923,797
Leases (note 3) 932,766 1,746,055 6,826,834 -
Taxes - 33,722 33,722 -
Due from other governments 11,615,963 - 11,615,963 -
Inventory 3,701,652 - 3,701,652 2,790
Prepaids 107,237 - 161,371 -
Total current assets 166,108,955 34,686,615 319,721,610 135,085,780 Noncurrent:
Restricted cash and investments (note 2) - - 18,812,412 - Restricted cash with fiscal agent (note 2) - - 29,002,552 - Leases receivable 6,327,189 3,797,803 75,245,415 -
Capital assets, net of depreciation and
amortization (note 5) 155,567,450 29,372,510 533,523,685 24,142,902 Total noncurrent assets 161,894,639 33,170,313 656,584,064 24,142,902 Total assets 328,003,594 67,856,928 976,305,674 159,228,682
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows from pensions 15,844,299 929,381 24,252,717 1,692,954 Deferred outflows from OPEB 918,680 96,492 1,526,077 83,207 Total deferred outflows of resources 16,762,979 1,025,873 25,778,794 1,776,161
LIABILITIES
Current liabilities:
Accounts payable 3,802,430 420,210 15,812,706 4,452,917 Accrued liabilities 3,228,951 163,329 4,636,453 341,561 Accrued interest payable - 1,326,790 -
Contracts payable (retained percentage) 92,743 11,352 1,019,129 64,685 Unearned revenue (note 7) 117,053,525 17,882 119,769,524 - Due to other funds (note 17) - - - 266,605
Compensated absences, due within one year
(note 8) 2,613,623 194,593 4,084,112 316,690
Claims payable, due within one year (note 9) - - - 23,733,763 Liabilities payable from restricted assets -
deposits 159,194 281,923 20,094,741 -
Pollution remediation obligation, due within
one year (note 11) - - 7,486,966 -
Loans and bonds payable, due within one
year (note 10) - - 2,903,091 -
Subscription liability, due within one year (note
6) 25 - 107,484 484,909
Total current liabilities 126,950,491 1,089,289 177,240,996 29,661,130 Business-Type Activities
Big Blue Bus
Other
Enterprise
Funds
Total
Enterprise
Funds
Internal
Service Funds
CITY OF SANTA MONICA, CALIFORNIA
Statement of Net Position
Proprietary Funds
June 30, 2025
See accompanying Notes to the Basic Financial Statements 56
4.C.a
Packet Pg. 371 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Noncurrent liabilities:
Compensated absences, due in more than
one year (note 8) 243,253 130,090 842,513 197,408
Subscription liability, due in more than one
year (note 6) - - 116,615 -
Claims payable, due in more than one year
(note 9) - - - 59,060,649
Pollution remediation obligation, due in more
than one year (note 11) - - 14,754,649 -
Loans and bonds payable, due in more than
one year (note 10) - - 122,365,833 1,159,697
Net OPEB liability, due in more than one
year (note 12) 1,356,687 142,497 2,253,676 122,878
Net pension liability, due in more than one
year (note 12) 51,336,870 3,011,272 78,580,854 5,485,314 Total noncurrent liabilities 52,936,810 3,283,859 218,914,140 66,025,946 Total liabilities 179,887,301 4,373,148 396,155,136 95,687,076
DEFERRED INFLOWS OF RESOURCES
Deferred inflows from pension (note 12) 861,697 50,545 1,318,992 92,072 Deferred inflows from OPEB (note 12) 982,228 103,166 1,631,639 88,963 Deferred inflows from leases (note 3) 6,140,317 4,931,262 77,522,677 - Total deferred inflows of resources 7,984,242 5,084,973 80,473,308 181,035
NET POSITION
Net investment in capital assets 154,019,602 29,346,477 431,987,283 19,998,032 Restricted for Prop 1B 8,968,440 - 8,968,440 -
Restricted for debt service - - 2,298,946 -
Unrestricted (6,093,012) 30,078,203 82,201,355 45,138,700 Total net position $ 156,895,030 $ 59,424,680 525,456,024 $ 65,136,732 Beginning net position, business-type activities - internal service funds 61,772,978 Net adjustment to reflect the allocation of the internal service funds net income (15,875,893) Net position of business-type activities $ 571,353,109
Business-Type Activities
Big Blue Bus
Other
Enterprise
Funds
Total
Enterprise
Funds
Internal
Service Funds
CITY OF SANTA MONICA, CALIFORNIA
Statement of Net Position
Proprietary Funds
June 30, 2025
See accompanying Notes to the Basic Financial Statements 57
4.C.a
Packet Pg. 372 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds
OPERATING REVENUES
Charges for services $ 46,238,326 $ 23,537,938 $ 39,541,395 $ 16,187,316 Total operating revenues 46,238,326 23,537,938 39,541,395 16,187,316
OPERATING EXPENSES
Personnel services 9,282,440 3,420,048 13,265,539 2,250,390 Administrative indirect 2,107,594 773,584 1,544,204 1,274,752 Contractual services 4,107,861 10,434,443 7,248,854 1,777,209 Repairs and maintenance 1,397,921 2,129,390 4,350,888 1,569,468 Materials and supplies 4,442,014 1,803,169 9,511,415 13,139,513 Utilities 2,137,487 535,668 66,049 1,352,782
Water purchases 10,909,882 - - -
Casualty property and liability costs 943,139 916,535 900,381 798,148 Claims expense net of claims reserve adjustment - - - - Insurance and bonds - - - -
Miscellaneous fees and costs 120,487 - 43,375 6,511
Depreciation and amortization 2,066,165 7,424,033 4,897 263,307 Other 665,108 1,126,356 825,720 1,238,577
Total operating expenses 38,180,098 28,563,226 37,761,322 23,670,657 Operating income (loss) 8,058,228 (5,025,288) 1,780,073 (7,483,341)
NONOPERATING REVENUES (EXPENSES)
Operating grants - - - -
Shared sales tax proceeds - - - -
Investment income 2,058,209 2,429,407 1,315,171 2,279,767 Interest expense (1,843,634) (928,800) - -
Gain or loss on disposal of capital assets - - - -
Fees 174,223 - - 54,167
Tax credits 1,394 260 143,964 223
Rent - - - -
Other nonoperating revenues (expenses) 399,639 213,984 297,103 1,884,093 Total nonoperating revenues (expenses) 789,831 1,714,851 1,756,238 4,218,250 Income (loss) before capital contributions
and transfers 8,848,059 (3,310,437) 3,536,311 (3,265,091) Capital contributions - - - -
Transfers in 339,766 3,109,008 113,777 -
Transfers out (2,008,208) (1,167,106) (1,409,298) (649,996) Change in net position 7,179,617 (1,368,535) 2,240,790 (3,915,087) Net position-beginning, as originally reported 60,195,349 206,640,289 295,382 38,184,079 Change in accounting principle (note 19) (122,972) (56,229) (107,049) (29,320) Net position-beginning, as restated 60,072,377 206,584,060 188,333 38,154,759 Net position-ending $ 67,251,994 $ 205,215,525 $ 2,429,123 $ 34,239,672 Business-Type Activities
Water Fund
Wastewater
Fund
Resource
Recovery and
Recycling
Fund Airport Fund
CITY OF SANTA MONICA, CALIFORNIA
Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements 58
4.C.a
Packet Pg. 373 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for
OPERATING REVENUES
Charges for services $ 9,095,856 $ 14,168,646 $ 148,769,477 $ 77,341,371 Total operating revenues 9,095,856 14,168,646 148,769,477 77,341,371
OPERATING EXPENSES
Personnel services 61,724,807 3,412,425 93,355,649 5,773,366 Administrative indirect 5,625,997 1,698,637 13,024,768 1,711,703 Contractual services 4,748,355 1,903,923 30,220,645 1,234,188 Repairs and maintenance 1,462,068 382,771 11,292,506 2,740,237 Materials and supplies 9,007,607 1,430,937 39,334,655 6,638,361 Utilities 1,014,979 524,720 5,631,685 132,405
Water purchases - - 10,909,882 -
Casualty property and liability costs 5,847,847 1,281,418 10,687,468 461,272 Claims expense net of claims reserve adjustment - - - 32,363,524 Insurance and bonds - - - 16,620,756
Miscellaneous fees and costs 194,314 32 364,719 6,494,733 Depreciation and amortization 14,493,524 968,445 25,220,371 4,107,472 Other 848,917 872,593 5,577,271 337,009
Total operating expenses 104,968,415 12,475,901 245,619,619 78,615,026 Operating income (loss) (95,872,559) 1,692,745 (96,850,142) (1,273,655)
NONOPERATING REVENUES (EXPENSES)
Operating grants 161,832 - 161,832 -
Shared sales tax proceeds 65,875,946 - 65,875,946 -
Investment income 5,482,307 1,354,579 14,919,440 6,875,553 Interest expense (397) - (2,772,831) (66,241)
Gain or loss on disposal of capital assets 2,511 - 2,511 (26,898) Fees - 894,961 1,123,351 -
Tax credits 818,818 5 964,664 -
Rent 3,878,904 - 3,878,904 -
Other nonoperating revenues (expenses) 765,390 304,559 3,864,768 831,922 Total nonoperating revenues (expenses) 76,985,311 2,554,104 88,018,585 7,614,336 Income (loss) before capital contributions
and transfers (18,887,248) 4,246,849 (8,831,557) 6,340,681 Capital contributions 15,615,014 - 15,615,014 -
Transfers in 659,483 4,471,389 8,693,423 3,037,594
Transfers out (739,162) (1,763,464) (7,737,234) (3,140,869) Change in net position (3,351,913) 6,954,774 7,739,646 6,237,406 Net position-beginning, as originally reported 160,742,501 52,540,822 518,598,422 58,978,602 Change in accounting principle (note 19) (495,558) (70,916) (882,044) (79,276) Net position-beginning, as restated 160,246,943 52,469,906 517,716,378 58,899,326 Net position-ending $ 156,895,030 $ 59,424,680 $ 525,456,024 $ 65,136,732 Change in net position $ 7,739,646
Net adjustment to reflect the consolidation of internal service fund activities related to enterprise funds (697,911)
Changes in net position of business-type activities $ 7,041,735 Business-Type Activities
Big Blue Bus
Other
Enterprise
Funds
Total
Enterprise
Funds
Internal
Service Funds
CITY OF SANTA MONICA, CALIFORNIA
Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements 59
4.C.a
Packet Pg. 374 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Statement of Cash Flows - Proprietary Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers $ 45,263,227 $ 23,115,534 $ 39,726,118 $ 16,017,596 Cash payments for materials and services (29,604,679) (11,799,411) (21,244,768) (20,651,069) Cash payments to employees for services (11,113,772) (4,017,645) (15,079,133) (3,570,406) Cash paid for claims and related services - (916,535) (900,381) (798,148) Other receipts (disbursements) 399,639 213,984 297,103 1,884,093 Net cash provided by (used for)
operating activities 4,944,415 6,595,927 2,798,939 (7,117,934)
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfers in 339,766 3,109,008 113,777 -
Transfers out (2,008,208) (1,167,106) (1,409,298) (649,996) Advances from other funds - - - -
Sales tax proceeds 175,617 260 143,964 54,390
Other operating grants - - - -
Net cash provided by (used for)
noncapital financing activities (1,492,825) 1,942,162 (1,151,557) (595,606)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Capital contributions received - - - -
Acquisition and construction of capital assets (8,650,091) (5,620,307) (368,594) (1,028,171) Payments on long-term obligations (1,776,066) (1,426,534) - - Interest paid on long-term obligations (1,867,550) (941,248) - - Proceeds from sale of capital assets - - - -
Net cash provided by (used for)
capital and related financing activities (12,293,707) (7,988,089) (368,594) (1,028,171)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment income 2,112,390 2,343,909 1,214,952 2,251,673 Leasing activities (107,732) - - -
Net cash provided by (used for)
investing activities 2,004,658 2,343,909 1,214,952 2,251,673 Net increase (decrease) in
cash and cash equivalents (6,837,459) 2,893,909 2,493,740 (6,490,038) Cash and cash equivalents-beginning 42,039,580 45,212,214 19,802,826 43,572,016 Cash and cash equivalents-ending $ 35,202,121 $ 48,106,123 $ 22,296,566 $ 37,081,978
RECONCILIATION OF CASH AND CASH
EQUIVALENTS TO THE STATEMENT
OF NET POSITION
Cash and investments $ 5,364,885 $ 45,265,830 $ 4,504,711 $ 35,803,560 Restricted cash and investments 29,837,236 2,840,293 17,791,855 1,278,418 Total cash and cash equivalents $ 35,202,121 $ 48,106,123 $ 22,296,566 $ 37,081,978 Business-Type Activities
Water Fund
Wastewater
Fund
Resource
Recovery and
Recycling
Fund Airport Fund
CITY OF SANTA MONICA, CALIFORNIA
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements 60
4.C.a
Packet Pg. 375 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for
RECONCILIATION OF OPERATING INCOME (LOSS)
TO NET CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES
Operating income (loss) $ 8,058,228 $ (5,025,288) $ 1,780,073 $ (7,483,341) Adjustments to reconcile operating income (loss) to
net cash provided by (used for) operating activities:
Depreciation/amortization expense 2,066,165 7,424,033 4,897 263,307 Other non-operating revenue received 399,639 213,984 297,103 1,884,093 (Increase) decrease in accounts receivable (890,166) (422,404) (695,926) (94,995) (Increase) decrease in deposits - - - -
(Increase) decrease in inventories - - - -
(Increase) decrease in prepaid items (54,132) - - (2)
Increase (decrease) in accounts payable (2,333,411) 4,229,615 801,533 (1,567,007) Increase (decrease) in accrued liabilities (2,581,049) (42,800) (234,579) (55,057) Increase (decrease) in unearned revenue - - - (155,957) Increase (decrease) in deposits payable from
restricted assets (84,933) - 880,649 81,232
Increase (decrease) in compensated absences
payable 176,792 92,104 128,375 34,121
Increase (decrease) in claims payable - - - -
Increase (decrease) in net pension liability and
related changes in deferred outflows and inflows
of resources 213,785 126,711 (146,502) (15,715)
Increase (decrease) in net OPEB liability and
related changes in deferred outflows and inflows
of resources (26,503) (28) (16,684) (8,613)
Total adjustments (3,113,813) 11,621,215 1,018,866 365,407 Net cash provided by (used for)
operating activities $ 4,944,415 $ 6,595,927 $ 2,798,939 $ (7,117,934)
SCHEDULE OF NON-CASH NON-CAPITAL,
CAPITAL, AND INVESTING ACTIVITIES
Capital assets acquired through accounts payable $ 1,495,604 $ 1,885,409 $ - $ 16,722 Business-Type Activities
Water Fund
Wastewater
Fund
Resource
Recovery and
Recycling
Fund Airport Fund
CITY OF SANTA MONICA, CALIFORNIA
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements 61
4.C.a
Packet Pg. 376 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers $ 12,147,497 $ 14,098,155 $ 150,368,127 $ 77,394,173 Cash payments for materials and services (20,711,313) (5,126,769) (109,138,009) (14,658,082) Cash payments to employees for services (61,926,308) (5,302,024) (101,009,288) (7,798,519) Cash paid for claims and related services (5,847,847) (1,281,418) (9,744,329) (45,172,421) Other receipts (disbursements) 765,390 304,559 3,864,768 831,922 Net cash provided by (used for)
operating activities (75,572,581) 2,692,503 (65,658,731) 10,597,073
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfers in 659,483 4,471,389 8,693,423 3,037,594
Transfers out (739,162) (1,763,464) (7,737,234) (3,140,869) Advances from other funds - - - 266,605
Sales tax proceeds 66,694,764 879,639 67,948,634 -
Other operating grants 9,367,112 - 9,367,112 -
Net cash provided by (used for)
noncapital financing activities 75,982,197 3,587,564 78,271,935 163,330
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Capital contributions received 16,989,700 - 16,989,700 - Acquisition and construction of capital assets (9,586,255) (575,928) (25,829,346) (12,465,977) Payments on long-term obligations - - (3,202,600) (151,336) Interest paid on long-term obligations (304,145) - (3,112,943) (66,241) Proceeds from sale of capital assets 43,099 - 43,099 176,400 Net cash provided by (used for)
capital and related financing activities 7,142,399 (575,928) (15,112,090) (12,507,154)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment income 5,229,544 1,270,956 14,423,424 6,860,555 Leasing activities 1,972,644 - 1,864,912 -
Net cash provided by (used for)
investing activities 7,202,188 1,270,956 16,288,336 6,860,555 Net increase (decrease) in
cash and cash equivalents 14,754,203 6,975,095 13,789,450 5,113,804 Cash and cash equivalents-beginning 133,084,031 25,029,259 308,739,926 129,004,872 Cash and cash equivalents-ending $ 147,838,234 $ 32,004,354 $ 322,529,376 $ 134,118,676
RECONCILIATION OF CASH AND CASH
EQUIVALENTS TO THE STATEMENT
OF NET POSITION
Cash and investments $ 130,280,507 $ 21,737,806 $ 242,957,299 $ 134,118,676 Restricted cash and investments 17,557,727 10,266,548 79,572,077 - Total cash and cash equivalents $ 147,838,234 $ 32,004,354 $ 322,529,376 $ 134,118,676 Business-Type Activities
Big Blue Bus
Other
Enterprise
Funds Totals
Internal
Service Funds
CITY OF SANTA MONICA, CALIFORNIA
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements 62
4.C.a
Packet Pg. 377 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for
RECONCILIATION OF OPERATING INCOME (LOSS)
TO NET CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES
Operating income (loss) $ (95,872,559) $ 1,692,745 $ (96,850,142) $ (1,273,655) Adjustments to reconcile operating income (loss) to
net cash provided by (used for) operating activities:
Depreciation/amortization expense 14,493,524 968,445 25,220,371 4,107,472 Other non-operating revenue received 765,390 304,559 3,864,768 831,922 (Increase) decrease in accounts receivable 3,055,692 (49,341) 902,860 52,802 (Increase) decrease in deposits (4,051) - (4,051) -
(Increase) decrease in inventories (11,249) - (11,249) (165) (Increase) decrease in prepaid items 588,830 - 534,696 - Increase (decrease) in accounts payable 1,613,343 (11,793) 2,732,280 2,387,030 Increase (decrease) in accrued liabilities (765,905) (15,001) (3,694,391) (97,478) Increase (decrease) in unearned revenue - (7,855) (163,812) - Increase (decrease) in deposits payable from
restricted assets - (13,295) 863,653 -
Increase (decrease) in compensated absences
payable 776,383 103,174 1,310,949 (52,546)
Increase (decrease) in claims payable - - - 4,805,117
Increase (decrease) in net pension liability and
related changes in deferred outflows and inflows
of resources (116,034) (260,388) (198,143) (201,473)
Increase (decrease) in net OPEB liability and
related changes in deferred outflows and inflows
of resources (95,945) (18,747) (166,520) 38,047
Total adjustments 20,299,978 999,758 31,191,411 11,870,728 Net cash provided by (used for)
operating activities $ (75,572,581) $ 2,692,503 $ (65,658,731) $ 10,597,073
SCHEDULE OF NON-CASH NON-CAPITAL,
CAPITAL, AND INVESTING ACTIVITIES
Capital assets acquired through accounts payable $ 1,547,825 $ 26,034 $ 4,971,594 $ 2,500,266 Business-Type Activities
Big Blue Bus
Other
Enterprise
Funds Totals
Internal
Service Funds
CITY OF SANTA MONICA, CALIFORNIA
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements 63
4.C.a
Packet Pg. 378 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Fiduciary Fund Financial Statements
Private-Purpose Trust Fund is fiduciary in nature and used to receive and distribute the Redevelopment Property Tax Trust Fund distributions and use them to extinguish enforceable obligations approved by the Successor Agency Oversight Board and the California Department of Finance. The Redevelopment Agency of the City of Santa Monica was dissolved on February 1, 2012.
Custodial Fund is custodial in nature and accounts for assets held by the City as a trustee or as an agent for individuals or other governmental units. The General Trust Fund accounts for assets held by the City in an agency capacity, such as fees collected on behalf of and remitted to other governmental agencies. No trust agreement exists.
CITY OF SANTA MONICA, CALIFORNIA
64 4.C.a
Packet Pg. 379 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Statement of Fiduciary Net Position - Fiduciary Funds
Private
Purpose
Trust Fund
Custodial
Funds
ASSETS
Restricted cash (note 2) $ 4,149,872 $ 1,913,488
Money market funds with fiscal agent (note 2) 7,436,122 - Accounts receivable - 72,684
Total assets 11,585,994 1,986,172
DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on refunding 661,107 -
Total deferred outflows of resources 661,107 -
LIABILITIES
Accrued interest payable 3,051,450 -
Loans and bonds payable, due within one year (note 18) 7,576,686 - Loans and bonds payable, due in more than one year (note 18) 97,399,830 - Total liabilities 108,027,966 -
NET POSITION
Restricted for the dissolution of the Former Redevelopment Agency (95,780,865) - Restricted for other governments, organizations, and individuals - 1,986,172 Total net position $ (95,780,865) $ 1,986,172
CITY OF SANTA MONICA, CALIFORNIA
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2025
See accompanying Notes to the Basic Financial Statements 65
4.C.a
Packet Pg. 380 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Statement of Changes in Fiduciary Net Position - Fiduciary Funds Private
Purpose
Trust Fund
Custodial
Funds
ADDITIONS
Property tax distribution $ 13,687,088 $ -
Held for others - 11,925
Fees collected for other governments - 1,412,504
Investment income 109,602 -
Total additions 13,796,690 1,424,429
DEDUCTIONS
Payments to other governments - 1,036,241
Payments to organizations and individuals - 16,400
Project expenses 320,997 -
Interest expense 6,400,027 -
Total deductions 6,721,024 1,052,641
Net increase (decrease) in fiduciary net position 7,075,666 371,788 Net position-beginning (102,856,531) 1,614,384
Net position-ending $ (95,780,865) $ 1,986,172
CITY OF SANTA MONICA, CALIFORNIA
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements 66
4.C.a
Packet Pg. 381 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Notes to the Basic Financial Statements
67 4.C.a
Packet Pg. 382 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Note 1 - Summary of Significant Accounting Policies
A. The Reporting Entity
The City of Santa Monica, California (City) was incorporated November 30, 1886. The City operates under a Council-Manager form of government and provides traditional municipal services as authorized by its charter as well as various enterprise services. As required by accounting principles generally accepted in the United States of America (GAAP), the accompanying basic financial statements present the activities of the City and its component units. The component units discussed below are included in the City’s reporting entity because of the significance of their operations or financial relationships with the City.
As required by GAAP, these basic financial statements present the City and its component units, entities for which the City is considered to be financially accountable. The following entities are reported as blended component units because they have substantively the same governing board as the primary government and there is either a financial benefit or burden relationship between the City and the component unit or the City’s management has operational responsibility for the component unit.
Blended component units, although legally separate entities are, in substance, part of the City’s operations and data from these units are combined with data of the City. Additional detailed information and/or separately issued financial statements for these component units can be obtained from the City’s Director of Finance.
The Parking Authority of the City of Santa Monica (Parking Authority) was established by the City in 1950 for the acquisition or building of parking facilities owned by the City Parking Authority.
The Housing Authority of the City of Santa Monica (Housing Authority) was established by the City in 1975 to address unsanitary and unsafe inhabited dwelling accommodations and the shortage of affordable safe and sanitary dwelling accommodations for persons with low incomes. Since January 1, 1989, the Housing Authority has administered the Section 8 Housing Assistance Payments Program funded by the United States Department of Housing and Urban Development on behalf of the City.
The Santa Monica Public Financing Authority (PFA) was established in 1995 for the purpose of assisting the City in financing capital improvements, working capital, and liability or other projects.
The Successor Agency for the Redevelopment Agency of the City of Santa Monica (Successor Agency) was established on February 1, 2012 by resolution of City Council. The Successor Agency is primarily responsible for winding down the operations of the former Redevelopment Agency and makes payments and performs existing obligations of the former Redevelopment Agency. The Successor Agency is a fiduciary component unit and is presented as a private-purpose trust fund.
The Santa Monica Arts Foundation promotes the arts by raising funds to finance art programs. On June 8, 1990, the City Council merged the City’s Arts Commission with the Santa Monica Arts Foundation. While the Arts Foundation meets the requirements of being reported as a component unit of the City, the operating results are immaterial to the City as a whole and therefore it is not included in the City’s basic financial statements.
No separate financial statements are available for the blended component units listed above.
The Santa Monica Pier Corporation, originally named the Santa Monica Pier Restoration Corporation, is an organization created in 1984 as a nonprofit public benefit corporation. The Pier Corporation maintains and operates public educational and recreational programs and events at the Santa Monica Pier as part of a service agreement with the City. It also assists the City with public outreach on Santa Monica Pier related issues. The governing Board of the Corporation is appointed by the City of Santa Monica City Council for the benefit of the citizens of Santa Monica. The Pier Corporation is not presented in the basic financial statements because the economic resources received or held by the individual organization are not significant to the primary government.
Separate financial statements for this organization can be obtained from the City’s Director of Finance.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
68 4.C.a
Packet Pg. 383 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for B. Basic Financial Statements
Basic financial statements consist of the following:
• Government-wide financial statements;
• Fund financial statements; and
• Notes to the basic financial statements.
The government-wide financial statements consist of the statement of net position and the statement of activities and report information on all the non-fiduciary activities of the primary government and its component units. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. All internal balances in the statement of net position have been eliminated, with the exception of those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total government column. In the statement of activities, internal service fund transactions have been eliminated; however, those transactions between governmental and business-type activities have not been eliminated. Exceptions to this general rule are charges between the City’s Water Fund and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.
Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, general services, housing and community services, library, and community development. The business-type activities of the City include water, wastewater, stormwater, resource recovery and recycling, pier, airport, cemetery, Big Blue Bus, and parking authority.
The statement of activities demonstrates the degree to which the direct and indirect expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Indirect expenses are allocated based on the annual cost allocation plan. Program revenues include: 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment, and 2) grants and contributions, including special assessments, which are restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not properly included among program revenues are reported instead as general revenues.
Separate fund financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.
C. 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 and fiduciary funds financial statements.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 69 4.C.a
Packet Pg. 384 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Governmental funds financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. 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. The City in general considers revenues available if they are collected within 60 days. Additionally, grants and similar items are recognized as receivables as soon as all eligibility requirements have been met and are recognized as revenue when amounts are considered available.
Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on general long-term debt, which is recognized when due, and certain compensated absences and claims and judgments, which are recognized when payment is due.
In governmental funds, property taxes, sales taxes, franchise taxes, licenses, interest, special assessments, charges for services and other miscellaneous revenue are all considered to be susceptible to accrual and have been recognized as revenue in the current fiscal period subject to availability. Entitlements and shared revenues are recorded at the time of receipt or earlier if susceptible to accrual criteria. Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred, all other eligibility requirements have been met and are recorded at the time of receipt or earlier, and susceptible to accrual criteria. All other revenue items are considered to be measurable and available only when cash is received by the government.
The accounts of the City are organized on the basis of funds. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number of funds is maintained consistent with legal and managerial requirements.
The City reports the following major governmental funds:
The General Fund is the City’s primary operating fund. It accounts for all the financial resources and the legally authorized activities of the City, except those required to be accounted for in other specialized funds.
The Special Revenue Source Fund accounts for receipt and expenditure of monies restricted, committed, or assigned for specific uses. Funding comes primarily from developer and other fees.
The Measure GS Fund accounts for receipt and expenditure of a third-tier documentary transfer tax of an additional 5% for property sales over $8 million with the revenue going towards homelessness prevention, affordable housings, and schools.
The Low and Moderate Income Housing Asset Fund under Senate Bill 341, requires that housing assets transferred to the City’s Housing Successor Agency, together with any funds generated from those housing assets, be maintained in a separate Low and Moderate Income Housing Asset Fund. These funds can be used as previously allowed under the Low and Moderate Income Housing Fund established under Community Redevelopment Law, for program monitoring and preserving the long-term affordability of units subject to affordability restrictions, homeless prevention and rapid rehousing services, and the development of affordable housing for lower income households.
The City reports the following major enterprise funds:
The Water Fund accounts for the activities of the City’s water service to the citizens.
The Wastewater Fund accounts for the activities of maintaining the sanitary sewer system within the City.
The Resource Recovery and Recycling Fund accounts for the activities of the City’s refuse collection, street sweeping and cleaning, and recycling programs.
The Airport Fund accounts for the activities of the Santa Monica Municipal Airport.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 70 4.C.a
Packet Pg. 385 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for The Big Blue Bus Fund accounts for the activities of the City’s municipal bus lines.
Additionally, the City reports the following fund types:
Special Revenue Funds account for proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects.
Capital Projects Funds account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets.
Debt Service Funds account for and report financial resources that are restricted to expenditures for principal and interest.
Permanent Funds account for resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support specific programs.
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 proprietary funds are charges to customers for sales and services. Operating expenses for proprietary 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.
Internal Service Funds account for vehicle operations, risk management, and information technology and communications operations that provide services to other departments of the City on a cost reimbursement basis.
Fiduciary Funds consist of a Private-purpose Trust Fund and Custodial funds. The Private-purpose Trust Fund was established by the City to succeed the former redevelopment agency. The City serves as a custodian for the assets of the dissolved redevelopment agency pending distribution to the Successor Agency’s creditors for enforceable obligations. The Custodial Fund accounts for assets held by the City as a trustee for individuals or other government units. The Custodial fund is used to report fees collected on behalf of other governmental agencies and other assets held by the City in a custodial capacity.
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, Net Position or Fund Balance Cash and Investments
In order to maximize the flexibility of its investment program and to aid in cash budgeting, the City pools the cash of all funds, except for monies deposited with fiscal and escrow agents in accordance with related bond indentures and agreements. The cash and investments balance in each fund represents that fund's equity share of the City's cash and investment pool. As the City places no restrictions on the deposit or withdrawal of its equity from the pool by a particular fund, the pool operates like a demand deposit account for the participating funds.
Interest income earned on pooled cash and investments is allocated quarterly to the various funds based on the average month-end balances for the prior three months and is adjusted at year-end. Interest income on restricted cash and investments with fiscal agents is credited directly to the related fund.
The City's investments are carried at fair value, except for guaranteed investment contracts, which are carried at cost because they are not transferable and they have terms that are not affected by changes in market interest rates. The fair value of equity and debt securities is determined based on sales prices or bid-and-asked quotations from Securities and Exchange Commission (SEC) registered securities exchanges or National Association of Securities Dealers Automated Quotations (NASDAQ) dealers. Changes in fair value are allocated to each participating fund on an annual basis.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 71 4.C.a
Packet Pg. 386 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for The City's share of Local Agency Investment Fund (LAIF) is reported to the City on a quarterly basis. LAIF operates in accordance with laws and regulations of the State of California. LAIF is not reported at fair value.
For purposes of the statement of cash flows, the City has defined cash and cash equivalents to be equity in the City's cash and investment pool as well as petty cash.
Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as interfund receivables/interfund payables, i.e., due to/due from other funds, the current portion of interfund loans or advances to/from other funds, the non-current portion of interfund loans. Any residual balances outstanding between the governmental activities and the business-type activities are reported in the government-wide financial statements as internal balances.
Advances between funds and notes receivables, as reported in the fund financial statements, are offset by nonspendable fund balance in the applicable governmental funds to indicate that they are not in spendable form and are not available for appropriation. However, if the use of the proceeds from the collection of those receivables is restricted, committed, or assigned, they will be included in the appropriate fund balance classification, rather than nonspendable fund balance.
All trade receivables are shown net of an allowance for uncollectible accounts and estimated refunds due. As of June 30, 2025, the allowance for uncollectible accounts for governmental and business-type activities is $2,407,281 and $4,861,342 respectively.
Unbilled service receivables are accrued at year-end.
Property Taxes
Assessed property values are determined on an annual basis for the period July 1 to June 30 by the Los Angeles County Assessor as of the prior January 1. Article XIII-A of the State Constitution (Proposition 13, approved by voters in June 1978) limits the real property tax rate to 1% of the full market cash value plus rates imposed to fund indebtedness approved by the voters. Locally assessed property is appraised at the 1975-76 full cash value, the base year value, and is adjusted each year after 1975 by the change in the consumer price index, not to exceed an increase of 2%. Property is reappraised to current full value upon either a change in ownership or new construction. If property values decline, the assessed value may be adjusted to reflect the lower value. Taxes are levied annually in September and become a lien on real property at January 1. Taxes are due November 1 and February 1 and are delinquent if not paid by December 10 and April 10, respectively, at which time applicable penalties and interest are assessed.
Inventory and Prepaid Items
All materials and supplies inventory is valued at cost using the average cost method. The costs of such inventories are recorded as expenditures/expenses when consumed rather than when purchased.
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. The cost of prepaid items is recorded as expenditures/expenses when consumed rather than when purchased.
Restricted Assets
Certain proceeds of the City's bonds, as well as certain resources set aside for their repayment, are classified as restricted assets on the statement of net position and balance sheet because they are maintained in separate bank accounts and their use is limited by applicable bond covenants.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 72 4.C.a
Packet Pg. 387 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for In the absence of specific statutory provisions governing the issuance of bonds, certificates or leases, these bond monies may be invested in accordance with the ordinance, resolutions or indentures specifying the types of investments its trustees or fiscal agents may make. These ordinances, resolutions and indentures are generally more restrictive than the City's general investment policy. In no instance have additional types of investments been authorized that are not permitted by the City's general investment policy.
Restricted cash represents amounts restricted under agreements with grantors, trustees, developers, customers, and lessees. Additionally, restricted cash in the Successor Agency is restricted by redevelopment dissolution legislation.
Capital Assets
Capital assets, which include land, buildings and improvements, machinery and equipment, intangibles, utility systems, infrastructure assets (e.g., roads, sidewalks, curbs and gutters and similar items), and subscription assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets other than buildings, improvements, and infrastructure are defined by the City as assets with an initial individual cost of $50,000 or more and an estimated useful life of more than one year except for the Big Blue Bus Fund, which follows transit funding guidelines by capitalizing any capital expense which is funded by capital grant subsidies not related to bus repairs and maintenance. The City defines buildings, improvements other than buildings, and infrastructure as assets with an individual cost of $100,000 or more and an estimated useful life of more than one year. Such assets are recorded at historical cost. Donated capital assets are recorded at acquisition value at the date of donation and capital assets received in a service concession arrangement are reported at acquisition value. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are expensed when incurred.
Major outlays for capital assets and improvements are capitalized as projects are constructed.
Capital assets of the City are depreciated/amortized using a straight-line method, with a mid-year convention (one half year’s depreciation/amortization is recorded in the first and last year of the asset) over the following estimated useful lives:
Assets Years
Buildings 5 to 85
Improvements other than buildings 5 to 50
Infrastructure 15 to 75
Utility systems 20 to 100
Intangibles 20 to 100
Machinery and equipment 2 to 30
Subscription asset 2 to 11
The City has elected not to capitalize its collection of artworks. GASB Statement No. 34 waives the requirement for artwork capitalization if the collection meets all the following conditions:
• The collection is held for reasons other than financial gain. • The collection is protected, kept unencumbered, cared for, and preserved. • The collection is subject to an organizational policy requiring that the proceeds from sales of collection items be used to acquire other items for collections.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 73 4.C.a
Packet Pg. 388 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for The City’s artwork collection meets the above criteria and therefore qualifies for the exemption from the capitalization requirement. The collection includes both permanent and portable artworks, artworks integrated into overall projects, murals, and stand-alone permanently installed paintings and sculptures, art integrated into the design of public works projects (not stand-alone), and a contemporary collection of almost 100 portable artworks, which are on display in public areas of City facilities.
The GASB Statement No. 96 subscription assets are reported with other capital assets on the statement of net position.
Compensated Absences
It is the City's policy to permit employees to accumulate earned but unused vacation and sick leave benefits up to a maximum determined by bargaining unit agreements. Employees are paid 100% of their accumulated vacation when they terminate employment for any reason. All vacation is accrued when incurred in the government-wide and proprietary fund financial statements. A liability is reported in the governmental funds only if they have matured, for example, as a result of employee resignations or retirements. Additionally, employees of the International Association of Sheet Metal, Air, Rail and Transportation Workers – Transportation Division are able to exchange unused sick days balances for equal dollars of medical insurance premiums. In order to qualify, the employee must have 10 years of service at retirement and at least 50 days of unused sick leave.
Long-Term Liabilities
In the government-wide financial statements, proprietary funds financial statements and private-purpose trust fund statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or fiduciary fund type statement of net position. Initial-issue bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method.
Bonds payable are reported net of the unamortized portion of applicable premium or discount. Deferred amounts on refunding are reported as deferred outflows or inflows of resources. Bond issuance costs, including underwriters' discount, are expensed when incurred. Amortization of bond premiums or discounts and deferred amounts on refunding are included in interest expense.
In the governmental funds financial statements, bond premiums, discounts and issuance costs are recognized during the period issued. The face amount of debt issued is reported as other financing sources. Premiums received are reported as other financing sources, while discounts are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
Interest and principal payments are reported as debt service expenditures.
The GASB Statement No. 96 subscription liabilities are based on the payment provisions of the contract and reported as a long-term liability on the statement of net position.
Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position, governmental fund balance sheet, proprietary statement of net position, and statement of fiduciary net position will sometimes report a separate section for deferred outflows of resources. The deferred outflows of resources is a separate financial statement element that represents a consumption of net assets that applies to future periods and so will not be recognized as an outflow of resources (expense/expenditure) until then.
In addition to liabilities, the statement of net position and governmental fund balance sheet will sometimes report a separate section for deferred inflows of resources. The deferred inflows of resources is a separate financial statement element that represents an acquisition of net assets that applies to future periods and so will not be recognized as an inflow of resources (revenue) until that time.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 74 4.C.a
Packet Pg. 389 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for The City reports the following items as deferred outflows of resources:
• Deferred outflows from pensions
• Deferred outflows from OPEB
The City reports the following items as deferred inflows of resources:
• Deferred gain on refunding
• Deferred inflows from leases
• Deferred inflows from pensions
• Deferred inflows from OPEB
Deferred outflows from pensions and OPEB include contributions made subsequent to the measurement date.
Deferred outflows and inflows relating to pensions and OPEB are the result of differences between the expected and actual experience, changes in assumptions, and difference between projected and actual earnings on investments. See note 12 for a detailed discussion of deferred outflows and inflows related to pensions and OPEB.
The deferred gain on refunding is attributable to the unamortized portion of the gain on refunding of debt.
Deferred inflows from leases represents inflows of resources based on the payment provisions of the contract.
Finally, on the governmental funds balance sheet, when an asset is recorded but the revenue is not available, a deferred inflow of resources is reported for unavailable revenue until such time as the revenue becomes available.
Net Position and Fund Balance
In the government-wide financial statements and proprietary funds financial statements, net position is reported in three categories: net investment in capital assets, restricted net position and unrestricted net position. Net investment in capital assets represents capital assets less accumulated depreciation less outstanding principal of related debt. Net investment in capital assets does not include the unspent proceeds of capital debt or the related amount of debt, liabilities and deferred inflows related to those assets. Restricted net position represents assets restricted by parties outside of the City (such as creditors, grantors, contributors, laws and regulations of other governments, or law through constitutional provisions or enabling legislation) and includes unspent proceeds of bonds issued to acquire or construct capital assets and those unspent proceeds are offset by an equivalent amount of debt and deferred inflows to those assets. The nonexpendable portion of permanent funds is reported as a component of restricted net position. The City's other components of restricted net position are temporarily restricted (ultimately expendable) assets. All other components of net position are considered unrestricted.
When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, and then use unrestricted resources as needed.
As prescribed by GASB Statement No. 54, governmental funds report fund balance in classifications based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in the funds can be spent based on the adopted City Council policy in the City’s most recently adopted budget. As of June 30, 2025, fund balances for governmental funds include nonspendable, restricted, committed, assigned and unassigned balances.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 75 4.C.a
Packet Pg. 390 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for In the fund financial statements, governmental funds report nonspendable fund balance for amounts that cannot be spent because they are either not in spendable form or legally or contractually required to be maintained intact.
Restricted fund balance represents amounts that are restricted for specific purposes when constraints placed on the use of resources are either externally imposed by creditors, grantors, contributors, or laws or regulations of other governments; or imposed by law through constitutional provisions or enabling legislation. Amounts that can only be used for specific purpose pursuant to constraints imposed by the government’s highest level of decision making authority, the City Council, are reported as committed fund balance. The City Council can create committed fund balance through ordinance, resolution or other council action that is equally binding. Ordinances make up the local laws of the City. An ordinance is a legislative act prescribing general rules of organization or conduct relating to the corporate affairs of the municipality. Council action shall be taken by ordinance when required by law, or where prescribed conduct may be enforced by penalty and represents the most binding constraint. Once adopted, ordinances become effective upon 30 days after publication, unless otherwise set forth.
A resolution is an administrative act, which is a formal statement of policy concerning matters of special or temporary character. The adoption of a resolution by the City Council can also establish, modify, or rescind a fund balance commitment previously created by resolution. Assigned fund balance are amounts that are constrained by the government’s intent by the governing body itself or a body or official to which the governing body has delegated the authority to assign amounts to be used for specific purposes. The City Council, in the City’s most recently adopted budget, which included the fiscal policies contained in the fund balance policies, has delegated the authority to assign fund balances to the City Manager or their designee. Unassigned fund balance represents fund balance that has not been restricted, committed, or assigned to specific purposes within the general fund.
Unassigned fund balance can also be used in other governmental funds where the fund balance is negative because a negative amount should not be reported for restricted, committed, or assigned in any fund. In circumstances when an expenditure is made for a purpose for which amounts are available in multiple fund balance classifications, fund balance is expended in the order of restricted, committed, assigned, and unassigned.
Self-Insurance Program
The City has self-insurance programs to provide for general liability, bus and automobile liability, and workers' compensation claims. These activities are accounted for in self-insurance internal service funds.
Premiums are charged to individual funds and are designed to cover current and future expenses. The City's Risk Manager oversees the self-insurance programs. It is his or her duty to ensure that programs are operated in accordance with City policies. The City’s Risk Manager also provides budget guidance and case reserves and claims analysis. It is the City's intent to maintain cash reserves in the self-insurance funds equal to or greater than estimated losses.
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 defined benefit retirement plans, Miscellaneous and Public Safety Police and Fire, of the California Employees’ Retirement System (“CalPERS”) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. 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.
Post Employment Benefits (OPEB)
For the purposes of measuring the net OPEB liability, the deferred inflows of resources related to OPEB, and the OPEB expense, information about the fiduciary net position of the City’s OPEB Plan and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined using the same actuarial methods and assumptions. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 76 4.C.a
Packet Pg. 391 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used:
Valuation Date June 30, 2023
Measurement Date June 30, 2024
Measurement Period June 30, 2023 to June 30, 2024
Use of Estimates
The preparation of basic financial statements in conformance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the basic financial statements and accompanying notes. Actual results may differ from those estimates.
New GASB Pronouncements Effective during Fiscal Year
The following Government Accounting Standards Board (GASB) pronouncement was effective for and implemented for the fiscal year ended June 30, 2025:
GASB Statement No. 101, Compensated Absences
The requirements of this Statement will improve financial reporting by implementing a unified recognition and measurement model that will result in a liability for compensated absences that more appropriately reflects when a government incurs an obligation. Establishing the unified model will result in consistent application to any type of compensated absence and will eliminate potential comparability issues between governments that offer different types of leave. This Statement will also result in a more robust estimate of the amount of compensated absences that a government will pay or settle, which will enhance the relevance and reliability of information about the liability for compensated absences.
GASB Statement No. 102, Certain Risk Disclosures
The requirements of this Statement will improve financial reporting by providing users of financial statements with essential information that currently is not often provided. The disclosures will provide users with timely information regarding certain concentrations or constraints and related events that have occurred or have begun to occur that make a government vulnerable to a substantial impact. As a result, users will have better information with which to understand and anticipate certain risks to a government’s financial condition.
Management has assessed the impact of this Statement on the City's financial statements and determined that it did not have a material impact.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 77 4.C.a
Packet Pg. 392 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Note 2 - Cash and Investments
Cash and investments as of June 30, 2025 are classified in the accompanying financial statements as follows:
Statement of Net Position
Cash and investments $ 680,470,360
Restricted cash and investments 92,913,391
Restricted cash with fiscal agent 64,728,077
Fiduciary funds:
Restricted cash and investments 6,063,360
Restricted cash with fiscal agent 7,436,122
Total cash and investments $ 851,611,310
Cash and investments as of June 30, 2025 consisted of the following:
Cash on hand $ 20,807
Deposits with financial institutions 15,511,354
Investments 836,079,149
Total cash and investments $ 851,611,310
All interest income legally accrues to the benefit of the General Fund in the absence of a legal provision to the contrary. Accordingly, accumulated interest income from the Special Revenue Source Fund in the amount of $1,956,039 has been included as interest income in the General Fund.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 2 - CASH AND INVESTMENTS
78 4.C.a
Packet Pg. 393 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for A. Investments Authorized by the California Government Code and the City’s Investment Policy The table below identifies the investment types that are authorized for the City by the California Government Code and the City’s investment policy. The table also identifies certain provisions of the California Government Code (or the City’s investment policy, if more restrictive) that address interest rate risk and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s investment policy. The table also does not address certain escrow accounts established for purposes such as construction project retention, which are governed by the specific escrow agreement(s).
Authorized by Maximum Maximum
Investment Types Investment Maximum Percentage Investment Authorized by State Law Policy Maturity * of Portfolio * in One Issuer * Local agency bonds Yes 5 years None None
U.S. Treasury obligations Yes 15 years None None
U.S. agency securities/obligations Yes 15 years None 50% State Obligations-California and Others Yes 5 years None None CA Local Agency obligations Yes 5 years None None
Banker's acceptances Yes 180 days 40% 10%
Commercial paper-Pooled funds Yes 270 days 25% 10%
Commercial paper-Non-pooled funds Yes 270 days 25% 10%
Negotiable certificates of deposit Yes 5 years 30% 10%
CD/Deposit Placement services Yes 5 years 50% None
Repurchase agreements Yes 1 year None None
Reverse repurchase agreements Yes 92 days 20% of base value None Corporate medium term notes Yes 5 years 30% None
Supranationals Yes 5 years 30% None
Mutual funds Yes N/A 20% 10%
Money market mutual funds Yes N/A 20% 10%
Mortgage pass-through securities Yes 5 years 20% None
Time deposits Yes 5 years None None
Collateralized certificates of deposit Yes 5 years None None County pooled investment funds Yes N/A None None
Local Agency Investment Fund (LAIF) Yes N/A None $75M
JPA pools (other investment pools) Yes N/A None None
* Based on state law requirements or investment policy requirements, generally, whichever is more restrictive. However, per State law, the City Council on February 28, 2023 authorized investment of up to 15% of the portfolio in maturities between five and fifteen years in Local Agency Bonds, U.S. Treasury Obligations and/or U.S. agency securities/obligations.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 2 - CASH AND INVESTMENTS (CONTINUED)
79 4.C.a
Packet Pg. 394 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for B. Investments Authorized by Debt Agreements
Investments of debt proceeds held by bond trustees are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s investment policy. However, in most cases, the bond agreements generally conform to the City’s policy. The table below identifies the investment types that are generally authorized for investments held by bond trustees. The table also identifies certain provisions of these debt agreements that address interest rate risk and concentration of credit risk.
Maximum Maximum
Maximum Percentage Investment
Authorized Investment Type Maturity Allowed in One Issuer U.S. Treasury obligations None None None
Federal Housing Administration debentures None None None U.S. agency securities None None None
Time deposits None None None
Unsecured certificates of deposit 180 days None None
Banker's acceptances 180 days None None
State obligations None None None
Repurchase agreements 1 year None None
Pre-refunded municipal obligations None None None
Commercial paper 270 days None None
Money market mutual funds None None None
Investment contracts 30 years None None
C. Investments Authorized by Actions of the City Council Cemetery and Mausoleum Perpetual Care funds are received from Woodlawn Cemetery users for the perpetual care of cemetery grounds and of the mausoleum. The funds are legally restricted to the extent that only earnings, and not principal, can be used for restricted perpetual care purposes. These funds represent the accumulation of unspent monies from non-government sources and are not considered by the City to constitute “surplus funds” of a local government. Accordingly, these funds are not considered by the City to be subject to the provisions of the California Government Code Section 53601 or the City’s investment policy. These funds have been invested per instructions of the City Council. The table below identifies the investment types generally authorized for these investments. Current City Council instructions limit the amount invested in equities to 60% of the total portfolio with the balance to be invested primarily in fixed income securities. The timing of fair value changes as well as the timing of investment transactions may on occasion result in the percentage of equities exceeding 60% for a short period of time until the portfolio can be rebalanced. The table also identifies certain provisions of these agreements that address interest rate risk and concentration of credit risk.
Maximum Maximum
Maximum Percentage Investment
Authorized Investment Type Maturity Allowed in One Issuer U.S. Treasury obligations None None None
U.S. agency securities None None None
Equities None 60% None
Corporate/Municipal bonds None None None
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 2 - CASH AND INVESTMENTS (CONTINUED)
80 4.C.a
Packet Pg. 395 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for D. Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The fair value of callable securities is also sensitive to market changes in that if interest rates decrease between the time of purchase and the call dates, the likelihood that a bond will be called and reinvested at a lower interest rate increases. The City’s portfolio also includes certain callable structured investments for which the coupon interest rate changes if the investments are not called on or before certain predetermined dates. The fair value of these investments, which primarily falls into the Federal agency security and Supranational categories, is also sensitive to market changes. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity as necessary to provide the cash flow and liquidity needed for operations.
Information about the sensitivity of the fair values of the City’s investments (including investments held by bond trustees and others) to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity. For purposes of the schedule shown below, callable securities are assumed to be held to maturity.
Remaining Maturity (in Months)
12 Months 13 to 24 25 to 60 More than
Investment Type Total or Less Months Months 60 Months N/A Held by City:
Federal agency securities $ 321,568,287 $ 87,770,655 $ 43,044,104 $ 115,318,688 $ 75,434,840 $ - Corporate medium term notes 190,176,725 41,097,472 32,234,409 116,844,844 - - Municipal bonds 38,529,956 9,244,034 8,263,422 6,386,871 14,635,629 - Supranationals 38,844,106 22,878,886 1,952,820 14,012,400 - - Treasury notes/bonds 35,684,960 - - 35,684,960 - -
State investment pool 70,765,259 70,765,259 - - - -
Money market funds 68,345,658 68,345,658 - - - -
Held by others:
Treasury notes/bonds 4,374,181 223,481 200,936 1,459,207 2,490,557 - Corporate medium term notes 3,757,394 594,826 633,413 2,141,546 387,609 - Common stock 12,070,731 - - - - 12,070,731
Money market funds 51,961,892 51,961,892 - - - -
Total $ 836,079,149 $ 352,882,163 $ 86,329,104 $ 291,848,516 $ 92,948,635 $ 12,070,731 E. Investments with Fair Values Highly Sensitive to Interest Rate Fluctuations The City’s investments as of June 30, 2025, (including investments held by bond trustees) do not include any investments that are highly sensitive to interest rate fluctuations to a greater degree than already indicated in the information provided above.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 2 - CASH AND INVESTMENTS (CONTINUED)
81 4.C.a
Packet Pg. 396 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for F. Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code,the City’s investment policy, or debt agreements, and the actual rating as of year-end for each investment type.
Actual Ratings - Standard & Poor's***
Minimum
Investment Type Total Legal Rating** AAA AA+ AA AAHeld by City:
Corporate Medium term notes $ 190,176,725 A $ 3,015,612 $ 21,822,240 $ 14,866,194 $ 34,597,817 Municipal bonds 38,529,956 N/A - 8,782,409 9,825,167 5,831,890 Supranationals 38,844,106 A 38,844,106 - - -
Treasury notes/bonds 35,684,960 N/A - - - -
State investment pool 70,765,259 N/A - - - -
Money market funds 68,345,658 N/A - - - -
Federal agency securities 321,568,287 N/A - - - -
Held by others:
Treasury notes/bonds 4,374,181 N/A - - - -
Corporate medium term notes 3,757,394 N/A 114,486 - - 458,730 Common stock 12,070,731 N/A - - - -
Money market funds 51,961,892 * 51,471,769 - - -
$ 836,079,149 $ 93,445,973 $ 30,604,649 $ 24,691,361 $ 40,888,437 Actual Ratings - Standard & Poor's***
Investment Type A+ A A- BBB+ BBB BBBExempt/Not Rated
Held by City:
Corporate Medium term notes $ 67,039,027 $ 19,221,250 $ 23,617,765 $ - $ - $ - $ 5,996,820 Municipal bonds 981,510 - 2,334,570 9,344,713 - - 1,429,697 Supranationals - - - - - - -
Treasury notes/bonds - - - - - - 35,684,960
State investment pool - - - - - - 70,765,259
Money market funds - - - - - - 68,345,658
Federal agency securities - - - - - - 321,568,287
Held by others:
Treasury notes/bonds - - - - - - 4,374,181
Corporate medium term notes 187,215 167,772 203,601 203,863 1,416,728 1,004,999 - Common stock - - - - - - 12,070,731
Money market funds - - - - - - 490,123
$ 68,207,752 $ 19,389,022 $ 26,155,936 $ 9,548,576 $ 1,416,728 $ 1,004,999 $ 520,725,716
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 2 - CASH AND INVESTMENTS (CONTINUED)
82 4.C.a
Packet Pg. 397 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for *Money market mutual funds must have the highest rating of at least two nationally recognized rating organizations or must have the investment advisor registered with the SEC with no less than 5 yrs. experience and have assets under management in excess of $500 million. The unrated money market fund amount is part of the Cemetery and Mausoleum Perpetual Care Funds and therefore is not subject to the minimum legal rating. However, it does meet the second criteria of no less than 5 year experience and have assets under management in excess of $500 million. ** For purposes of categorization, the “minimum legal rating” applies to the entire rating category. For example, rating category “A” includes ratings of A+, A, and A-. The minimum rating applies as to the time of purchase. *** For bonds not rated by Standard and Poor’s but rated by Fitch Ratings and/or Moody’s, the rating from either Fitch or Moody’s is used
Treasury notes/bonds/bills and Federal Agency securities are excluded in this table as they are not subject to credit risk disclosures.
As of June 30, 2025, all investments were in compliance with State law and the City’s Investment Policy at the time of purchase. In accordance the “prudent investor rule”, any investment subject to a credit downgrade after the time of purchase is reviewed for possible sale within a reasonable amount of time after the downgrade. Detail on bonds that were downgraded after the time of purchase are discussed in detail below:
• The portfolio holds one bond issued by PeaceHealth with a book value of $1,830,600 (less than 0.3% of total invested funds) that was downgraded by S&P from A to A- in July 2023. Since the chances of default are low, the bond will continue to be held at this time. • The portfolio holds one bond issued by Northwestern Mutual Global Funding with a book value of $1,979,600 (less than 0.3% of total invested funds) that was downgraded by Moody’s from AAA to AA1 in May of 2025. Since the chances of default are extremely low, the bond will continue to be held at this time.
Concentration of Credit Risk
In regards to limitations on the amount held by the City that can be invested in any one issuer, the City’s investment policy generally follows stipulations by the California Government Code. However, the City’s policy adds an additional stipulation that no more than 50% of the portfolio may be invested in a single issuer.
Investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of total City investments (excluding investments held by others) are as follows:
% of
Issuer Investment Type Reported
Amount
Investments
Federal Home Loan Bank Federal agency securities $ 242,774,607 22.6 % Federal Farm Credit Bank Federal agency securities $ 60,820,098 9.1 %
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 2 - CASH AND INVESTMENTS (CONTINUED)
83 4.C.a
Packet Pg. 398 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for G. Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The fair value of the pledged securities in the collateral pool must equal at least 110% of the total amount 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 collateral is held by the pledging financial institution’s trust department and is considered held in the City’s name. The investments held by the City were not subject to custodial credit risk at June 30, 2025.
As of June 30, 2025, no City investments were held by the same broker-dealer (counterparty) that was used by the City to buy the securities.
For investments identified herein as held by bond trustee, the bond trustee, under direction of the City/ Redevelopment Successor Agency selects the investment under the terms of the applicable trust agreement, acquires the investment, and holds the investment on behalf of the applicable agency.
H. Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of City investments in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. As of June 30, 2025, $70,765,259 was invested in the City’s account.
The total amount invested by all public agencies in LAIF at that date was $24.0 billion. The LAIF is part of the State’s Pooled Money Investment Account (PMIA). As of June 30, 2025, the investments in the PMIA totaled $178.1 billion (exclusive of demand bank account balances), nearly all of which is invested in non-derivative financial products. The weighted average of PMIA investments was 248 days as of June 30, 2025. LAIF is not rated. LAIF does not impose limits or restrictions on participant withdrawals (other than the number of withdrawals per month and 24- hour notice required for withdrawals of $10 million and over), and the entire balance of the City's investment in the portfolio is available for withdrawal at any time. LAIF is not registered with the Securities and Exchange Commission. Deposits and withdrawals in LAIF are made on the basis of $1 and not fair value.
Accordingly, the City's investment in this pool is measured on uncategorized inputs not defined as Level 1, 2, or 3.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 2 - CASH AND INVESTMENTS (CONTINUED)
84 4.C.a
Packet Pg. 399 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for I. Fair Value Hierarchy
The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset.
Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The City has the following recurring fair value measurements as of June 30, 2025:
Input Category
Investment Type Total Level 1 Level 2 Uncategorized
Federal agency securities $ 321,568,287 $ - $ 321,568,287 $ - Treasury notes/bonds 35,684,960 35,684,960 - -
Corporate medium term notes 190,176,725 - 190,176,725 - Municipal bonds 38,529,956 - 38,529,956 -
Supranationals 38,844,106 - 38,844,106 -
Local Agency Investment Fund 70,765,259 - - 70,765,259
Money market funds 68,345,658 - - 68,345,658
Held by Others:
Treasury notes/bonds 4,374,181 4,374,181 - -
Corporate medium term notes 3,757,394 - 3,757,394 -
Common stock 12,070,731 12,070,731 - -
Money market funds 51,961,892 - - 51,961,892
Investments at Fair Value $ 836,079,149 $ 52,129,872 $ 592,876,468 $ 191,072,809 Deposits and securities classified in Level 1 of the fair value hierarchy are valued using prices quoted in active markets for those securities. Federal Agency Securities, Municipal Bonds, Corporate Medium Term Notes, and Supranationals are classified in Level 2 of the fair value hierarchy and are valued using information provided by the firm FT Interactive Data using institutional bond quotes.
Note 3 - Leases
NOTE 3 - LEASES
A. Leases Receivables and Deferred Inflows of Resources The City is the lessor and leases land and buildings to various companies and individuals. Under GASB Statement No. 87, the City is required to recognize a lease receivable and a deferred inflow of resources.
At the commencement of a lease, the City initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources is initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date.
Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term.
Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts. • The City uses a 5% borrowing rate as the discount rate for leases.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 2 - CASH AND INVESTMENTS (CONTINUED)
85 4.C.a
Packet Pg. 400 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for • The lease term includes the noncancellable period of the lease. Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.
The City monitors changes in circumstances that would require a remeasurement of its lease, and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable.
The City reported lease revenue of $12,800,748 and interest revenue of $5,849,291 related to lease payments received. These leases are summarized as follows:
Lease Receivable Lease Receivable
Fund as of July 1, 2024 Additions Deductions as of June 30, 2025 General $ 20,655,405 $ 116,157 $ 1,856,817 $ 18,914,745 Beach 11,449,004 1,113,743 953,010 11,609,737
Water 3,071,556 - 42,514 3,029,042
Pier 7,361,947 - 1,818,089 5,543,858
Airport 68,217,899 3,140,459 5,118,964 66,239,394
Big Blue Bus 8,197,437 - 937,482 7,259,955
$ 118,953,248 $ 4,370,359 $ 10,726,876 $ 112,596,731
Lease
Lease Interest
Fund Revenue Revenue
General $ 3,147,962 $ 1,025,840
Beach 973,451 575,848
Water 85,833 152,612
Pier 1,894,073 325,581
Airport 5,731,937 3,381,035
Big Blue Bus 967,492 388,375
$ 12,800,748 $ 5,849,291
General Fund Leases – There are a variety of leases including restaurants and businesses. The most significant lease agreement is with the Viceroy Hotel, which began on September 25, 2000, and the City is receiving monthly payments for sixty-five years through 2065.
Beach Fund Leases – The lease types are mostly encroachments. The most significant land lease agreement is with The Beach Club, which began on January 1, 1990, and the City is receiving annual payments for sixty-one years through 2050.
Water Fund Leases –On July 1, 1994, the City entered into a sixty-one year lease agreement with Windward School for the sports facility and classrooms above the City’s underground wells. Based on the agreement, the City is receiving monthly payments through 2055. There are no renewal options included in this lease agreement.
Pier Fund Leases – There are a variety of leases including restaurants and retail. The most significant lease agreement is with Est. 1977 SMPS CO. d.b.a. The Albright, which began on June 29, 2021, and the City is receiving monthly payments for ten years through 2031.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 3 - LEASES (CONTINUED)
86 4.C.a
Packet Pg. 401 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Airport Fund Leases – There are a variety of leases for offices, artists, and hangars. The most significant lease agreement is with Snap, Inc., which began on January 1, 2024, and the City is receiving monthly payments for seventeen years through 2041.
Big Blue Bus Leases – The leases are with Kite Pharma, Inc. and Ocean Park Community Center’s Santa Monica Shelter. The more significant lease agreement is with Kite Pharma, Inc., which began on May 1, 2018, and the City is receiving monthly payments for fourteen years through 2032.
The principal and interest payments that are expected to maturity are as follows:
Governmental Activities
Fiscal Principal Interest Total
Year Payments Payments Payments
2026 $ 3,231,377 $ 1,443,142 $ 4,674,519
2027 1,454,984 1,333,542 2,788,526
2028 1,480,387 1,260,321 2,740,708
2029 1,554,814 1,184,772 2,739,586
2030 1,237,261 1,113,347 2,350,608
2031-2035 3,662,290 4,852,711 8,515,001
2036-2040 2,180,605 4,224,262 6,404,867
2041-2045 2,798,499 3,606,367 6,404,866
2046-2050 3,591,477 2,813,388 6,404,865
2051-2055 2,832,332 1,931,634 4,763,966
2056-2060 2,754,482 1,300,851 4,055,333
2061-2065 3,534,989 520,345 4,055,334
2066-2070 203,872 3,868 207,740
2071-2075 7,113 1,189 8,302
Total $ 30,524,482 $ 25,589,739 $ 56,114,221
Business-type Activities
Fiscal Principal Interest Total
Year Payments Payments Payments
2026 $ 6,826,834 $ 3,933,564 $ 10,760,398
2027 5,067,542 3,639,452 8,706,994
2028 4,652,780 3,398,518 8,051,298
2029 4,347,212 3,169,163 7,516,375
2030 4,288,947 2,958,018 7,246,965
2031-2035 22,910,119 11,346,675 34,256,794
2036-2040 26,958,255 5,395,586 32,353,841
2041-2045 5,487,493 556,465 6,043,958
2046-2050 671,409 304,224 975,633
2051-2055 861,658 113,975 975,633
Total $ 82,072,249 $ 34,815,640 $ 116,887,889
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 3 - LEASES (CONTINUED)
87 4.C.a
Packet Pg. 402 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Note 4 - Notes Receivable
The City issues notes receivables to various non-profit entities who construct or rehabilitate affordable housing within the City limits. The loans have been sourced from the citywide housing trust fund, CDBG, TORCA, and HOME trust funds, Low-moderate income housing asset trust fund, redevelopment replacement housing trust fund and the former redevelopment agency.
The borrowers must comply with stringent guidelines such as rent limits, tenant income eligibility, access to the property, local priority of applicants for occupancy, prevailing wages during construction or rehabilitation, and environmental factors. The loans are typically for a 55-year period with an option to extend for another 25 years.
Interest rates can range from 0% to current market rates and loan payments are made only if the property achieves net cash flow (known as “residual receipts”). The borrower is also subject to annual project monitoring and reporting.
All loans are secured by deeds of trust that are subordinate to the developer’s senior financing. In the event of default or non-compliance with the loan terms, the City has the right to call the loan and or exercise its right to the underlying property.
For those developments created without low-income housing tax credits, the loans are forgiven at maturity and the City records a corresponding allowance for those amounts.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 4 - NOTES RECEIVABLE
88 4.C.a
Packet Pg. 403 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Details of notes receivable totaling $226,697,264 are as follows:
Balance at Balance at
Special Revenue Source Fund June 30, 2024 Increases Decreases June 30, 2025 Community Corporation of Santa Monica (a) $ 448,280 $ - $ - $ 448,280 Community Corporation of Santa Monica (b) 7,114,401 - - 7,114,401 Community Corporation of Santa Monica (c) 4,420,698 - - 4,420,698 FAME Santa Monica Senior Apartments (d) 7,416,347 - - 7,416,347 Step Up (e) 2,029,437 - - 2,029,437
Santa Monica Housing Partners (f) 19,223,242 - 241,183 18,982,059 Mountain View Mobile Home Park resident (g) 87,830 - - 87,830 Community Corporation of Santa Monica (h) 3,350,000 - - 3,350,000 Community Corporation of Santa Monica (i) 6,774,763 - - 6,774,763 Community Corporation of Santa Monica (j) 10,570,940 - - 10,570,940 EAH, Inc (k) 10,572,806 - - 10,572,806
Community Corporation of Santa Monica (l) 3,938,399 3,816,437 - 7,754,836 Community Corporation of Santa Monica (m) 11,819,383 186,350 - 12,005,733 Community Corporation of Santa Monica (n) 13,348,057 - - 13,348,057 Community Corporation of Santa Monica (o) 20,650,000 - - 20,650,000 EAH, Inc (p) 5,087,439 - 77,282 5,010,157
Community Corporation of Santa Monica (q) 14,535,122 285,376 - 14,820,498 HCHC (r) - 6,000,000 - 6,000,000
Total Special Revenue Source Fund 141,387,144 10,288,163 318,465 151,356,842 Low and Moderate Income Housing Asset Fund
Community Corporation of Santa Monica (s) 7,979,656 - - 7,979,656 Community Corporation of Santa Monica (t) 2,738,277 - - 2,738,277 Community Corporation of Santa Monica (u) 4,437,001 - - 4,437,001 FAME Santa Monica Senior Apartments (v) 4,058,652 - - 4,058,652 Step Up (w) 3,011,818 - - 3,011,818
Community Corporation of Santa Monica (x) 4,234,506 - - 4,234,506 Community Corporation of Santa Monica (y) 2,900,000 - - 2,900,000 Community Corporation of Santa Monica (z) 5,408,035 - - 5,408,035 Step Up (aa) 5,870,000 - - 5,870,000
Santa Monica Housing Partners (ab) 5,684,455 - - 5,684,455 Community Corporation of Santa Monica (ac) 685,738 - - 685,738 EAH, Inc (ad) 6,654,795 - 101,093 6,553,702
Total Low and Moderate Income Housing Asset Fund 53,662,933 - 101,093 53,561,840 Nonmajor Governmental Funds
Low and moderate income housing (ae) 662,079 - - 662,079 Ocean Park Community Center (af) 400,000 - - 400,000
Community Corporation of Santa Monica (ag) 6,345,807 - - 6,345,807 Community Corporation of Santa Monica (ah) 841,600 - - 841,600 Community Corporation of Santa Monica (ai) 1,691,965 - - 1,691,965 Community Corporation of Santa Monica (aj) 669,456 - - 669,456 MERL Program (ak) 5,425,011 1,214 46,318 5,379,907
Ocean Park Community Center (al) 800,000 - - 800,000
Step Up (am) 1,300,000 - - 1,300,000
MERL Program (an) 3,760,510 - 72,742 3,687,768
Total Nonmajor Governmental Funds 21,896,428 1,214 119,060 21,778,582 Total Notes Receivable $ 216,946,505 $ 10,289,377 $ 538,618 $ 226,697,264
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 4 - NOTES RECEIVABLE (CONTINUED)
89 4.C.a
Packet Pg. 404 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Special Revenue Source Fund
a. A promissory note dated February 1, 2011 in the amount of $9,407,103 was executed with Community Corporation of Santa Monica for an affordable housing project located at 2602 Broadway. This is a 55- year loan with an interest rate of 3% per annum. As of June 30, 2025, $448,280 had been disbursed to the borrower. See item “s” below for the amount disbursed from the Low and Moderate Income Housing Asset Fund.
b. A promissory note dated January 12, 2009 in the amount of $6,223,333 was executed with Community Corporation of Santa Monica for an affordable housing project located at 430-508 Pico Boulevard. This was a 0% interest loan with the principal amount due and payable after a two-year deferral period. It was superseded by a new loan dated January 26, 2012, which increased the note to $10,947,475, changed the interest rate to 3% and the term to 55 years. As of June 30, 2025, $7,114,401 had been disbursed to the borrower. See item “t” below for amounts disbursed from Low and Moderate Income Housing Asset Fund.
c. A promissory note dated February 2, 2009 in the amount of $5,595,897 was executed with Community Corporation of Santa Monica for an affordable housing project located at 2802 Pico Boulevard. This was a 0% interest loan with the principal amount due and payable after a two-year deferral period. It was superseded by a new loan dated November 29, 2011, which increased the note to $9,207,402, changed the interest rate to 3% and the term to 55 years. As of June 30, 2025, $4,420,698 had been disbursed to the borrower. See item “u” below for the amount disbursed from the Low and Moderate Income Housing Asset Fund.
d. A promissory note dated June 16, 2009 in the amount of $4,424,711 was executed with FAME Santa Monica Senior Apartments, L.P. for an affordable housing project located at 1754 19th Street. This loan was superseded by a loan in the amount of $11,475,000 dated November 17, 2011. It is a 0% interest loan for 55 years. As of June 30, 2025, $7,416,347 had been disbursed to the borrower. See item “v” below for the amount disbursed from the Low and Moderate Income Housing Asset Fund. e. A promissory note dated December 15, 2010 in the amount of $3,645,422 was executed with Step Up on Second Street, Inc. for an affordable housing project at 520 Colorado Avenue. The loan is for the acquisition and predevelopment of the site. This loan was superseded by a loan in the amount of $5,041,255 dated January 25, 2012. It is a 3% interest loan for 55 years. As of June 30, 2025, $2,029,437 had been disbursed to the borrower. See item “w” below for the amount disbursed from the Low and Moderate Income Housing Asset Fund.
f. A promissory note dated December 8, 2011 in the amount of $19,400,000 was executed with Santa Monica Housing Partners for the acquisition and predevelopment expenses for an affordable housing project located at 1725 Ocean Ave. This is a 0% interest loan with the principal amount due and payable after the 55-year anniversary of conversion to permanent financing. As of June 30, 2025, $18,982,059 had been disbursed to the borrower.
g. A shared appreciation promissory note dated October 18, 2012 in the amount of $87,830 was executed with residents for a unit purchase in Mountain View Mobile Home Park at 1930 Stewart Street. This is a 55-year loan with a 0% interest rate. As of June 30, 2025, $87,830 had been loaned to the borrower. h. A revised promissory note dated October 26, 2004 in the amount of $3,350,000 was executed with 1424 Broadway Apartments Limited Partnership, c/o Community Corporation of Santa Monica, for an affordable housing project located at 1424 Broadway/1512 15th Street. This is a 55-year loan with 3% interest rate per annum. Payments are to be made from residual receipts. As of June 30, 2025, $3,350,000 had been disbursed to the borrower. See item “y” below for the amount disbursed from the Low and Moderate Income Housing Asset Fund.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 4 - NOTES RECEIVABLE (CONTINUED)
90 4.C.a
Packet Pg. 405 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for i. A revised promissory note dated March 9, 2005 in the amount of $6,774,763 was executed with Pacific Court Limited Partnership, c/o Community Corporation of Santa Monica, for an affordable housing project located at 2209 Main Street. Forty-four low- and very low-income housing units were constructed on the site. This is a 55-year loan with 1% interest rate per annum. Payments are to be made from residual receipts. As of June 30, 2025, $6,774,763 had been disbursed to the borrower. j. A revised promissory note dated March 12, 2019 in the amount of $10,570,940 was executed with Community Corporation of Santa Monica for an affordable housing project located at 1820 & 1826 14th Street. This was a 3% interest loan with a fifty-five-year term from the date the project is completed but not later than December 31, 2075. As of June 30, 2025, $10,570,940 had been disbursed to the borrower. k. A promissory note dated March 12, 2020 in the amount of $11,400,000 was executed with Magnolia Villas EAH, LLC for the acquisition and predevelopment expenses for an affordable housing project located at 1445-1453 10th Street. This was a 3% interest loan with a fifty-five-year term. Payments are deferred during construction of the project and then payments of residual receipts are due annually once the construction has been completed. The loan is due and payable at the end of the loan term. As of June 30, 2025, $10,572,806 had been disbursed to the borrower.
l. A promissory note dated August 14, 2023 in the amount of $9,426,306 was executed with Community Corporation of Santa Monica for an affordable housing project located at 1342 Berkeley Street. This is a 3% interest loan with a fifty-five-year term and option to extend for additional twenty-five years. Payments are deferred during construction of the project and then payments of residual receipts are due annually once the construction has been completed. The loan is due and payable at the end of the loan term. As of June 30, 2025, $7,754,836 had been disbursed to the borrower. m. A promissory note dated April 2, 2020 in the amount of $9,547,656 was executed with Community Corporation of Santa Monica for an affordable housing project located at 2120 Lincoln Boulevard. This is 3% interest loan with a fifty-five-year term. Payments are deferred construction of the project and then payments of residual receipts are due annually once the construction has been completed. The loan is due and payable at the end of the loan term. As of June 30, 2025, $12,005,733 had been disbursed to the borrower.
n. A promissory note dated March 18, 2021 in the amount of $13,348,057 was executed with Community Corporation of Santa Monica for an affordable housing project located at 1819 Pico Boulevard et al. This is a 2% interest loan with a fifty-five-year term from the date the project is completed but not later than December 31, 2077. Payments are deferred during loan term including any extensions. The loan is due and payable at the end of the loan term. As of June 30, 2025, $13,348,057 had been disbursed to the borrower.
o. A promissory note dated November 24, 2020 in the amount of $20,650,000 was executed with Community Corporation of Santa Monica for an affordable housing project located at 1834-48 14th Street.
This is a 3% interest loan with a fifty-five-year term from the date the project is completed but not later than December 31, 2077. Payments are deferred during loan term including any extensions. The loan is due and payable at the end of the loan term. As of June 30, 2025, $20,650,000 had been disbursed to the borrower.
p. A promissory note dated June 1, 2022 in the amount of $11,742,234 was executed with Laurel EAH NC, LLC for the acquisition, predevelopment, and construction expenses for an affordable housing project located at 1413 Michigan Avenue. This is a 3% interest loan with a fifty-five-year term. Payments will be made from residual receipts, if any. The loan is due and payable at the end of the loan term. As of June 30, 2025, $5,010,157 had been disbursed to the borrower. A part of the loan balance in this fund was transferred to the Low and Moderate Income Housing Asset Fund. See item "ad" below.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 4 - NOTES RECEIVABLE (CONTINUED)
91 4.C.a
Packet Pg. 406 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for q. A promissory note dated January 14, 2020 in the amount of $15,183,670 was executed with Community Corporation of Santa Monica for an affordable housing project located at 2033-2101 Virginia Ave.
Payments are deferred during loan term including any extensions. The loan is due and payable in full sixty-six (66) months from the date of the Note, unless further extended. This is a 0% interest loan. As of June 30, 2025, $14,820,498 had been disbursed to the borrower. r. A promissory note dated May 15, 2025 in the amount of $6,000,000 was executed with Tierra Apartments, LP. for an affordable housing project located at 1402 Wilshire Blvd. Payments are deferred during loan term including any extensions. The loan is due and payable in full no later than September 30, 2026 unless further extended. This is a 0% interest loan. As of June 30, 2025, $6,000,000 had been disbursed to the borrower.
Low and Moderate Income Housing Asset Fund
s. A promissory note dated February 1, 2011 in the amount of $9,407,103 was executed with Community Corporation of Santa Monica for an affordable housing project located at 2602 Broadway. This is a 55- year loan with an interest rate of 3% per annum. As of June 30, 2025, the outstanding balance is $7,979,656. See item “a” above for the amount disbursed from the Special Revenue Source Fund. t. A promissory note dated January 12, 2009 in the amount of $6,223,333 was executed with Community Corporation of Santa Monica for an affordable housing project located at 430-508 Pico Boulevard. This was a 0% interest loan with the principal amount due and payable after a two-year deferral period. It was superseded by a new loan dated January 26, 2012, which increased the note to $10,947,475, changed the interest rate to 3% and the term to 55 years. As of June 30, 2025, $2,738,277 had been disbursed to the borrower. See item “b” above for amounts disbursed from the Special Revenue Source Fund. u. A promissory note dated February 2, 2009 in the amount of $5,595,897 was executed with Community Corporation of Santa Monica for an affordable housing project located at 2802 Pico Boulevard. This was a 0% interest loan with the principal amount due and payable after a two-year deferral period. It was superseded by a new loan dated November 29, 2011, which increased the note to $9,207,402, changed the interest rate to 3% and the term to 55 years. As of June 30, 2025, the outstanding balance is $4,437,001. See item “c” above for the amount disbursed from the Special Revenue Source Fund. v. A promissory note dated June 16, 2009 in the amount of $4,424,711 was executed with FAME Santa Monica Senior Apartments, L.P. for an affordable housing project located at 1754 19th Street. This loan was superseded by a loan in the amount of $11,475,000 dated November 17, 2011. It is a 0% interest loan for 55 years. As of June 30, 2025, $4,058,652 had been disbursed to the borrower. See item “d” above for the amount disbursed from the Special Revenue Source Fund. w. A promissory note dated December 15, 2010 in the amount of $3,645,422 was executed with Step Up on Second Street, Inc. for an affordable housing project at 520 Colorado Avenue. The loan is for the acquisition and predevelopment of the site. This loan was superseded by a loan in the amount of $5,041,255 dated January 25, 2012. It is a 3% interest loan for 55 year. As of June 30, 2025, $3,011,818 had been disbursed to the borrower. See item “e” above for the amount disbursed from the Special Revenue Source Fund.
x. A promissory note dated July 24, 2006 in the amount of $4,234,506 was executed with The Tahiti, L.P. c/o Community Corporation of Santa Monica for an affordable housing project located at 2411-2423 Centinela Avenue. The loan was for the construction of 36 affordable rental housing units. This is a 55-year loan with a simple interest rate of 3% per annum. Payments are to be made from residual receipts. As of June 30, 2025, $4,234,506 had been disbursed to the borrower.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 4 - NOTES RECEIVABLE (CONTINUED)
92 4.C.a
Packet Pg. 407 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for y. A revised promissory note dated October 26, 2004 in the amount of $2,900,000 was executed with 1424 Broadway Apartments Limited Partnership, c/o Community Corporation of Santa Monica, for an affordable housing project located at 1424 Broadway/1512 15th Street. This is a 55-year loan with 3% interest rate per annum. Payments are to be made from residual receipts. As of June 30, 2025, $2,900,000 had been disbursed to the borrower. See item “h” above for the amount disbursed from the Special Revenue Source Fund.
z. Promissory notes dated October 26, 2004, October 26, 2004 and June 12, 2007 in the amount of $4,458,035, $1,691,965 and $950,000, respectively for a total of $7,100,000 were executed with 26th and Santa Monica Family Housing Limited Partnership, c/o Community Corporation of Santa Monica, for an affordable housing project located at 1349 26th Street. Forty-four low- and very low-income housing units were constructed on the site. They are 55-year loans with 3% interest rate per annum. Payments are to be made from residual receipts. As of June 30, 2025, $5,408,035 had been disbursed to the borrower.
This was disbursed from the Low and Moderate Income Housing Asset Fund. See item “ai” below for the amount disbursed from the CDBG Fund.
aa. Two promissory notes dated February 13, 2007, one in the amount of $5,870,000 and one for $1,300,000 for a total of $7,170,000 were executed with Step Up on Fifth, L.P. for an affordable housing project located at 1548 Fifth Street. These loans are for the acquisition and construction of the site. This is a 55- year loan with a simple interest rate of 5% per annum. Payments are to be made from residual receipts.
As of June 30, 2025, $5,870,000 had been disbursed to the borrower. This was disbursed from the Low and Moderate Income Housing Asset Fund. See item “am” below for the amount disbursed from the Miscellaneous Grants Fund.
ab. An amended promissory note dated February 22, 2008, in the amount of $5,207,314 and a promissory note dated March 15, 2011 for $477,141 were executed with the Santa Monica Housing Partners, L.P. for the development of 20 units of affordable senior housing at 1458 14th Street. The loans represent land acquisition financing that achieves site control. These are 55-year loans with an interest rate of 3% per annum on the $5,207,314 loan and 4.36% on the $477,141 loan. As of June 30, 2025, the outstanding balance is $5,684,455.
ac. A promissory note dated October 21, 1987 in the amount of $778,603 was executed with Community Corporation of Santa Monica for affordable housing projects located at 504 Ashland, 518 Pier, 536 Ashland, 642 Marine, and 3005 Highland. The overall project is called Ocean Park 43 (OP43). This is a 40 year loan with an interest rate of 5% per annum. As of June 30, 2025, $685,738 had been disbursed to the borrower.
ad. A promissory note dated June 1, 2022 in the amount of $11,742,234 was executed with Laurel EAH NC, LLC for the acquisition, predevelopment, and construction expenses for an affordable housing project located at 1413 Michigan Avenue. This is a 3% interest loan with a fifty-five-year term. Payments will be made from residual receipts, if any. The loan is due and payable at the end of the loan term. As of June 30, 2025, $6,553,702 had been disbursed to the borrower. A part of this balance was transferred from the Special Revenue Source Fund. See item "p" above.
Nonmajor Governmental Funds
ae. These represent non-interest bearing, limited appreciation and shared appreciation loans made between 1991 and 2001 pursuant to Tenant Ownership Rights Charter Amendment (TORCA) Program guidelines to assist low- and moderate-income households to purchase their rental units. The loans are due upon resale, transfer or default. As of June 30, 2025, the outstanding balances of such loans total $662,079.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 4 - NOTES RECEIVABLE (CONTINUED)
93 4.C.a
Packet Pg. 408 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for af. A promissory note dated September 30, 2003 in the amount of $1,200,000 was executed with Ocean Park Community Center for congregate housing and emergency shelter for very low-income use, located at 1751 Cloverfield Boulevard. This loan is for the acquisition and rehabilitation of the site. This is a 55- year loan with 5.98% interest rate per annum with a two-year deferral period. Payments are to be made from residual receipts. As of June 30, 2025, $400,000 had been disbursed to the borrower. This was disbursed from the TORCA Fund. See item “al” below for the amount disbursed from the Miscellaneous Grants Fund.
ag. A revised promissory note dated February 8, 2006 in the amount of $6,745,807 was executed with Community Corporation of Santa Monica for an affordable housing project located at 3021-3031 Santa Monica Boulevard. This loan was for the acquisition, predevelopment expenses and construction of lowand very low-income housing. This is a 3% interest loan with the principal amount due and payable February 8, 2061, 55-years from February 8, 2006. As of June 30, 2025, $6,345,807 had been disbursed to the borrower. This was disbursed from the TORCA Fund. ah. A promissory note dated December 22, 1988 in the amount of $841,600 was executed with Community Corporation of Santa Monica for low- and very low-income housing at 2020-2030 Cloverfield Boulevard.
This is a 35-year loan with 10.44% interest rate per annum. As of June 30, 2025, $841,600 had been disbursed to the borrower. This was disbursed from the CDBG Fund. ai. Promissory notes dated October 26, 2004, October 26, 2004 and June 12, 2007 in the amount of $4,458,035, $1,691,965 and $950,000, respectively for a total of $7,100,000 were executed with 26th and Santa Monica Family Housing Limited Partnership, c/o Community Corporation of Santa Monica, for an affordable housing project located at 1349 26th Street. Forty-four low- and very low-income housing units were constructed on the site. They are 55-year loans with 3% interest rate per annum. Payments are to be made from residual receipts. As of June 30, 2025, $1,691,965 had been disbursed to the borrower.
This was disbursed from the CDBG Fund. See item “z” above for the amount disbursed from the Low and Moderate Income Housing Asset Fund.
aj. On October 22, 1998, the City executed a promissory note with Community Corporation of Santa Monica for the construction of a twenty unit, large family, affordable housing complex located at 708 Pico Boulevard. $579,000 was funded from the City’s Pico Neighborhood Trust Fund but now known as CDBG Housing Trust Fund, while $221,000 is funded from the Community Development Block Grant (CDBG) Fund. This note is a 0% interest loan to be repaid from residual receipts of the project and is due on October 22, 2053. As of June 30, 2025, the outstanding balance is $669,456. ak. The January 17, 1994 Northridge Earthquake resulted in damaged multifamily residences in the City. To facilitate repair of damaged multifamily residences, the U.S. Department of Housing and Urban Development awarded the City a total of $33,388,000 in emergency funds to finance the City's Multifamily Earthquake Repair Loan (MERL) Program. The funds were allocated as follows: $2,027,000 – HOME Program Emergency Supplemental Fund, $6,361,000 – HOME Program Presidential Contingency Fund, and $25,000,000 – CDBG Program Emergency Supplemental Fund. Loans were made between 1995 and 2001. As of June 30, 2025, the CDBG Program Emergency Supplemental Fund outstanding balance is $5,379,907. See item “an” below for the amount disbursed from the Miscellaneous Grants Fund. al. A promissory note dated September 30, 2003 in the amount of $1,200,000 was executed with Ocean Park Community Center for congregate housing and emergency shelter for very low-income use, located at 1751 Cloverfield Boulevard. This loan is for the acquisition and rehabilitation of the site. This is a 55- year loan with 5.98% interest rate per annum with a two-year deferral period. Payments are to be made from residual receipts. As of June 30, 2025, $800,000 had been disbursed to the borrower. This was disbursed from the Miscellaneous Grants Fund. See item “af” above for the amount disbursed from the TORCA Fund.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 4 - NOTES RECEIVABLE (CONTINUED)
94 4.C.a
Packet Pg. 409 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for am.Two promissory notes dated February 13, 2007, one in the amount of $5,870,000 and one for $1,300,000 for a total of $7,170,000 were executed with Step Up on Fifth, L.P. for an affordable housing project located at 1548 Fifth Street. These loans are for the acquisition and construction of the site. This is a 55- year loan with a simple interest rate of 5% per annum. Payments are to be made from residual receipts.
As of June 30, 2025, $1,300,000 had been disbursed to the borrower. This was disbursed from the Miscellaneous Grants Fund. See item “aa” above for the amount disbursed from the Low and Moderate Income Housing Asset Fund.
an. The January 17, 1994 Northridge Earthquake resulted in damaged multifamily residences in the City. To facilitate repair of damaged multifamily residences, the U.S. Department of Housing and Urban Development awarded the City a total of $33,388,000 in emergency funds to finance the City's Multifamily Earthquake Repair Loan (MERL) Program. The funds were allocated as follows: $2,027,000 – HOME Program Emergency Supplemental Fund, $6,361,000 – HOME Program Presidential Contingency Fund, and $25,000,000 – CDBG Program Emergency Supplemental Fund. Loans were made between 1995 and 2001. As of June 30, 2025, the Miscellaneous Grants Fund outstanding balance is $3,687,768. See item “ak” above for the amount disbursed from the CDBG fund.
The City has various notes receivable outstanding. Below is the activity for FY 2024-25 by borrower:
Borrower Beginning Additions Reductions Ending
CCSM $ 134,902,084 $ 4,288,163 $ - $ 139,190,247
EAH Inc. 22,315,040 - 178,375 22,136,665
FAME 11,474,999 - - 11,474,999
Santa Monica Housing Partners 24,907,697 - 241,183 24,666,514 Step Up 12,211,255 - - 12,211,255
HCHC Tierra Apartments - 6,000,000 - 6,000,000
Other 11,135,430 1,214 119,060 11,017,584
Total $ 216,946,505 $ 10,289,377 $ 538,618 $ 226,697,264 The City has previously disbursed the following amounts under note agreements that will be forgiven at maturity:
Borrower Total Disbursed
4th St. Senior Housing Corp. $ 2,369,060
Alternative Living for the Aging 315,000
Caritas 227,667
CCSM 147,123,362
New Directions, Inc. 400,000
Ocean Housing Foundation 1,540,000
OPCC 756,907
Retirement Housing Foundation 1,317,500
SM New Hope Courtyard Apts 900,000
Step Up On Second 12,354,578
Upward Bound House 1,390,000
Upward Bound Senior Villas 1,851,000
Volunteers of America 771,579
Non-housing 471,975
$ 171,788,628
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 4 - NOTES RECEIVABLE (CONTINUED)
95 4.C.a
Packet Pg. 410 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Note 5 - Capital Assets
Capital assets activity for the primary government for fiscal year ended June 30, 2025, is as follows:
July 1, 2024 Additions Deletions Transfers June 30, 2025 Governmental activities:
Capital assets, not being depreciated
Land $ 200,323,023 $ - $ - $ - $ 200,323,023
Land held under easement 72,384,923 - - - 72,384,923
Construction-in-progress 96,832,366 21,765,283 - (11,851,982) 106,745,667 Total capital assets, not being depreciated 369,540,312 21,765,283 - (11,851,982) 379,453,613 Capital assets, being depreciated/amortized
Subscription asset - software as a service 10,645,880 3,498,998 (2,601,353) - 11,543,525 Buildings 460,081,033 - - - 460,081,033
Improvements other than buildings 222,247,298 10,403 - 9,678,742 231,936,443 Utility systems 1,742,912 - - - 1,742,912
Machinery and equipment 63,497,734 119,366 (414,852) 83,222 63,285,470 Infrastructure 413,193,451 1,591,016 - - 414,784,467
Intangibles 5,385,578 - - 2,090,018 7,475,596
Total capital assets, being depreciated/
amortized 1,176,793,886 5,219,783 (3,016,205) 11,851,982 1,190,849,446 Less accumulated depreciation/amortization
Subscription asset - software as a service (2,384,426) (2,011,027) 754,236 - (3,641,217) Buildings (172,198,425) (9,809,386) - - (182,007,811)
Improvements other than buildings (128,301,547) (7,629,387) - - (135,930,934) Utility systems (1,742,917) - - - (1,742,917)
Machinery and equipment (46,303,252) (2,909,208) 414,853 - (48,797,607) Infrastructure (285,645,186) (9,037,487) - - (294,682,673) Intangibles (1,466,974) (589,691) - - (2,056,665)
Total accumulated depreciation/amortization (638,042,727) (31,986,186) 1,169,089 - (668,859,824) Total capital assets, being depreciated/
amortized, net 538,751,159 (26,766,403) (1,847,116) 11,851,982 521,989,622 Subtotal governmental activities $ 908,291,471 $ (5,001,120) $ (1,847,116) $ - $ 901,443,235 Balance at Balance
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 5 - CAPITAL ASSETS
96 4.C.a
Packet Pg. 411 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Balance Balance
June 30, 2024 Additions Deletions Transfers June 30, 2025 Business-type activities:
Capital assets, not being depreciated
Land 53,380,750 - - - 53,380,750
Construction-in-progress 91,676,076 16,657,782 - (5,774,436) 102,559,422 Total capital assets, not being depreciated/
amortized 145,056,826 16,657,782 - (5,774,436) 155,940,172 Capital assets, being depreciated
Subscription asset - software as a service 2,337,665 - (1,351,436) - 986,229 Buildings 150,050,361 - - - 150,050,361
Improvements other than buildings 32,791,025 155,100 (8,495) - 32,937,630 Machinery and equipment 252,748,014 13,127,080 (1,486,791) 1,856,278 266,244,581 Infrastructure 338,721,164 403,220 - 3,918,158 343,042,542 Intangibles 124,851,273 3,427,861 - - 128,279,134
Total capital assets, being depreciated 901,499,502 17,113,261 (2,846,722) 5,774,436 921,540,477 Less accumulated depreciation
Subscription asset - software as a service (1,335,134) (526,313) 1,351,434 - (510,013) Buildings (85,891,412) (2,323,334) - - (88,214,746)
Improvements other than buildings (23,289,355) (744,756) 8,495 - (24,025,616) Machinery and equipment (197,595,403) (15,501,664) 1,344,552 - (211,752,515) Infrastructure (133,961,453) (6,613,893) - - (140,575,346) Intangibles (53,298,340) (3,219,245) - - (56,517,585)
Total accumulated depreciation (495,371,097) (28,929,205) 2,704,481 - (521,595,821) Total capital assets, being depreciated/
amortized, net 406,128,405 (11,815,944) (142,241) 5,774,436 399,944,656 Subtotal business-type activities 551,185,231 4,841,838 (142,241) - 555,884,828 Total $ 1,459,476,702 $ (159,282) $ (1,989,357) $ - $ 1,457,328,063
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 5 - CAPITAL ASSETS (CONTINUED)
97 4.C.a
Packet Pg. 412 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Depreciation and amortization expense was charged to functions/programs of the primary government as follows:
Governmental activities:
General government $ 2,275,210
Public safety 3,661,190
General services 15,344,609
Housing and community services 4,438,863
Library 1,321,738
Community development 4,545,938
Capital assets held by the government's internal service funds are charged to the various functions based on their asset's usage 398,638 Total depreciation and amortization expense - governmental activities $ 31,986,186 Business-type activities:
Water $ 2,066,165
Resource Recovery and Recycling 4,897
Pier 478,518
Wastewater 7,424,033
Airport 263,307
Stormwater management 432,130
Cemetery 41,534
Big Blue Bus 14,493,524
Parking authority 16,263
Capital assets held by the government's internal service funds are charged to the various programs are based on their asset's usage 3,708,834 Total depreciation/amortization expense - business-type activities $ 28,929,205 The City’s infrastructure assets are recorded at historical cost and estimated historical cost in the governmentwide statements as required by GASB Statement No. 34.
Note 6 - Subscription-Based Information Technology Arrangements NOTE 6 - SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS A. Right-to-Use Subscription Asset and Subscription Liability The City is a subscriber to noncancellable subscription-based information technology arrangements (subscription). Under GASB Statement No. 96, the City recognizes a subscription liability and an intangible rightto-use subscription asset for subscriptions with payments of $100,000 or more over their subscription term.
At the commencement of a subscription, the City initially measures the subscription liability at the present value of payments expected to be made during the subscription term. Subsequently, the subscription liability is reduced by the principal portion of subscription payments made. The subscription asset is initially measured as the initial amount of the subscription liability, adjusted for subscription payments made at or before the subscription commencement date, plus certain initial direct costs. Subsequently, the subscription asset is amortized on a straight-line basis over its useful life.
Key estimates and judgments related to subscriptions include how the City determines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) subscription term, and (3) subscription payments.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 5 - CAPITAL ASSETS (CONTINUED)
98 4.C.a
Packet Pg. 413 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for • The City uses a 5% borrowing rate as the discount rate for subscriptions. • The subscription term includes the noncancellable period of the subscription. Subscription payments included in the measurement of the subscription liability are composed of fixed payments that the City is reasonably certain to exercise.
The City monitors changes in circumstances that would require a remeasurement of its subscriptions and will remeasure the subscription asset and liability if certain changes occur that are expected to significantly affect the amount of the subscription liability.
The City reported amortization expense of $2,537,340 and interest expense of $350,837 related to subscription payments. These subscriptions are summarized as follows:
Subscription Subscription
Liability Liability Due within
as of June 30, 2024 Additions Deductions as of June 30, 2025 one year Governmental activities $ 5,845,863 $ 3,411,768 $ 2,008,957 $ 7,248,674 $ 1,767,070 Business-type activities 923,421 - 478,311 445,110 165,543 Total $ 6,769,284 $ 3,411,768 $ 2,487,268 $ 7,693,784 $ 1,932,613 Subscription Subscription
Amortization Interest
Expense Expense
Governmental activities $ 2,011,027 $ 326,206
Business-type activities 526,313 24,631
$ 2,537,340 $ 350,837
General Fund subscriptions – This fund contains a majority of the subscriptions including software for procurement, parking analytics, employee timekeeping, planning and permitting, digitizing physical records, and police body camera cloud-based storage systems. The most significant subscription agreement is with Versaterm Public Safety Inc. for a police and fire computer aided dispatch (CAD) system to support the timely and safe response to police, fire and medical emergencies. It began on December 8, 2023 and has an initial two-year term with nine additional one-year options to extend. The City is remitting annual payments for eleven years through 2034.
Housing Authority Fund subscriptions – On February 1, 2024, the City entered into a five-year agreement with MRI Software LLC for the use of HAPPY software-as-a-service (SaaS) and is remitting bi-annual payments through 2029.
Rent Control Fund subscriptions – On April 5, 2023, the City entered into a five-year agreement with Infor (US), LLC for the use of Rhythm for Civics SaaS and is remitting annual payments through 2028.
Water Fund and Wastewater Fund subscriptions – These funds use most of the same subscriptions including software for asset management and marking underground utilities. The most significant subscription agreement is with Mentor APM for a cloud-hosted Enterprise Asset Management System (EAMS) to track water and wastewater operation field data. It began on August 10, 2022 and the City is remitting annual payments for five years through 2027.
Big Blue Bus Fund subscriptions – This fund contains one significant subscription with Swiftly, Inc. to provide realtime bus location and predicted arrival times. It began on April 16, 2022 and the City is remitting annual payments for three years through 2025.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 6 - SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS (CONTINUED) 99 4.C.a
Packet Pg. 414 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Vehicle Management Fund subscriptions – On June 27, 2019, the City entered into a five-year agreement with AssetWorks Inc. for a Fleet Asset Management System (FAMS) to track maintenance and repair activities. There is an option to extend for an additional five-year period and the City will remit annual payments through 2029.
Info Tech Replacement & Service Fund – There are two SBITAs in this fund: Cohesity for data protection and Cisco WebEx, a collaboration suite. The more significant agreement is for Cisco WebEx, which began on November 16, 2024, and the City is remitting annual payments for five years through 2029.
Self-Insurance Comprehensive Fund, Self-Insurance Auto Fund, and Self-Insurance Worker’s Compensation Fund subscriptions – These funds use the same subscription, an automated claims management system from Origami Risk, Inc. The five-year agreement began on May 26, 2024 and the City is remitting annual payments through 2029. In addition, the Self-Insurance Worker’s Compensation Fund entered into a three-year agreement that includes two one-year options to extend with Closerware, LLC. They provide a software, VolunteerMatters, that helps City staff manage onboarding, background checks, training, and reporting of volunteers and contractors. It began on October 9, 2023 and the City will remit annual payments through 2028.
The principal and interest payments that are expected to maturity are as follows:
Governmental Activities
Fiscal Year
June 30, Principal Interest Total
2026 $ 1,767,070 $ 309,742 $ 2,076,812
2027 1,610,490 229,116 1,839,606
2028 1,283,793 157,831 1,441,624
2029 800,225 106,303 906,528
2030 331,963 81,716 413,679
2031-2035 1,455,133 149,206 1,604,339
Totals $ 7,248,674 $ 1,033,914 $ 8,282,588
Business-type activities
Fiscal Year
June 30, Principal Interest Total
2026 $ 165,543 $ 17,363 $ 182,906
2027 179,181 8,759 187,940
2028 71,652 3,771 75,423
2029 27,248 321 27,569
2030 1,486 6 1,492
Totals $ 445,110 $ 30,220 $ 475,330
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 6 - SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS (CONTINUED) 100
4.C.a
Packet Pg. 415 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Note 7 - Unearned Revenue and Deferred Inflows of Resources Governmental funds report deferred inflows of resources in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental and enterprise funds also report a liability in connection with resources that have been received as of year-end, but not yet earned (unearned revenue).
The interest on advances reported in the General Fund represents interest on advances to the Successor Agency and the nonmajor enterprise funds and is recognized in the government-wide financial statements. This interest is earned and included in promissory note balances at year-end. GASB Statement No. 34 requires the City to recognize and present interfund activity between governmental and business-type funds on the government-wide financial statements.
CITY OF SANTA MONICA, CALIFORNIA
Notes to Financial Statements
For the Year Ended June 30, 2025
NOTE 7 - UNEARNED REVENUE AND DEFERRED INFLOW OF RESOURCES 101
4.C.a
Packet Pg. 416 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for The components of unearned revenue are as follows:
Governmental funds:
General Fund:
Unearned user fees $ 986,645
Business license tax 7,158,767
Total General Fund 8,145,412
Special Revenue Source Fund:
Advanced lease payments 29,088,209
Total Special Revenue Source Fund 29,088,209
Nonmajor governmental funds:
Grants received prior to meeting all
eligibility requirements 3,383,000
Unearned user fees 633,262
Total nonmajor governmental funds 4,016,262
Total governmental funds $ 41,249,883
Enterprise funds:
Big Blue Bus Fund:
Unearned developer fees $ 185,000
Unearned rent 98,562
Grant and other funds received prior to
meeting all eligibility requirements 116,769,963
Total Big Blue Bus Fund 117,053,525
Airport Fund:
Unearned rent 2,698,117
Total Airport Fund 2,698,117
Nonmajor enterprise funds:
Unearned rent 17,882
Total nonmajor enterprise funds: 17,882
Total enterprise funds 119,769,524
Total unearned revenue $ 161,019,407
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 7 - UNEARNED REVENUE AND DEFERRED INFLOW OF RESOURCES (CONTINUED) 102
4.C.a
Packet Pg. 417 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for The components of deferred inflows of resources for unavailable revenue are as follows:
Recognized in GovernmentFund financial government- wide financial statements wide financials statements
Governmental funds:
General fund
Rent $ 2,832 $ (2,832) $ -
Total General Fund 2,832 (2,832) -
Non-major governmental funds
Grants receivable 9,372,797 (9,372,797)
Rent 1,272 (1,272) -
Total non-major governmental funds 9,374,069 (9,374,069) - Total deferred inflows of resources $ 9,376,901 (9,376,901) - Note 8 - Compensated Absences
NOTE 8 - COMPENSATED ABSENCES
City employees earn vacation leave at varying amounts based on length of service. All employees may accrue up to the amount earned for a three-year period. In the event of termination of employee, death, or retirement, employees (or their estates) are paid for unused vacation.
Balance at
July 1, 2024, Balance at Due within Due beyond
Restated Net Change June 30, 2025 one year one year
Governmental Activities $ 19,159,053 $ 1,368,966 $ 20,528,019 $ 14,410,396 $ 6,117,623 Business-type Activities 4,763,424 442,758 5,206,182 4,250,534 955,648 $ 23,922,477 $ 1,811,724 $ 25,734,201 $ 18,660,930 $ 7,073,271 Note 9 - Self-Insurance
NOTE 9 - SELF-INSURANCE
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees and others; and natural disasters. The City has chosen to establish risk financing internal service funds where assets are set aside for claim settlements associated with such risks of loss up to certain limits and has obtained excess liability coverage through the Authority for California Cities Excess Liability (ACCEL), a joint powers authority of thirteen medium-sized California municipalities. ACCEL is a member of PRISM (Public Risk Innovation, Solutions, and Management) Excess Insurance Authority for the purpose of providing access to excess workers’ compensation coverage for major employee injury risks through a program of pooled self-insurance/re-insurance and insurance on a risk sharing basis.
The City retains self-insurance up to $1,000,000 for general liability, automobile liability, and bus operations liability. The ACCEL pool covers all general liability losses between $1,000,000 and $10,000,000 and purchases excess liability insurance to cover losses over $10,000,000 and up to $65,000,000. The City retains self-insurance up to $1,000,000 for workers’ compensation. PRISM Excess Insurance Authority covers up to an additional $4,000,000 for workers’ compensation and arranges for excess of workers’ compensation over $5,000,000 and up to statutory limits. No claim settlements have exceeded insurance coverage in any of the past three years.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 7 - UNEARNED REVENUE AND DEFERRED INFLOW OF RESOURCES (CONTINUED) 103
4.C.a
Packet Pg. 418 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for In order to provide funds to pay claims, ACCEL collects premiums from each member. The premiums paid are credited with investment income at the rate earning on the Authority’s investments. Based on ACCEL’s June 30, 2025 audited financial statements, the City’s proportionate share of ACCEL’s net reserves and incurred but not reported (IBNR) amounts related to the City was $1,840,460 meaning the premiums and interest earned exceeded the City’s reserves and IBNR. Accel’s total net reserves and IBNR was $12,315,394. Total assets of ACCEL at June 30, 2025 were $121,515,200. ACCEL has no capital contributions.
The City’s unpaid claims liabilities are based on the results of actuarial studies. The unpaid claims liabilities are compiled by the Risk Manager of the City and include amounts for claims incurred but not reported as of yearend. Claims liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amount of payouts and other economic and social factors. Net present values of the unpaid claims liabilities are estimated for the year ended June 30, 2025, based on a 4.0% interest rate. Revenues of the risk management funds, together with funds to be provided in the future, are expected to provide adequate resources to meet liabilities as they come due. Non-incremental claims expenses have not been included as part of the liability for claims.
Changes in the liability for claims during the past two fiscal years for the self-insurance funds follow:
Current-year
claims and
Beginning of changes in Claims Due within one
Fund (by fiscal year) year estimates payments (net) End of year year June 30, 2024:
Governmental activities:
General Liability and Automobile $ 24,276,059 $ 4,851,816 $ (6,495,472) $ 22,632,403 $ 8,768,373 Changes to prior year estimates 48,377,992 14,497,035 (13,483,711) 49,391,316 10,282,198 Total Governmental activities $ 72,654,051 $ 19,348,851 $ (19,979,183) $ 72,023,719 $ 19,050,571 Business-type activities:
Bus $ 5,904,809 $ 188,833 $ (128,066) $ 5,965,576 $ 1,521,640 Total Business-type activities $ 5,904,809 $ 188,833 $ (128,066) 5,965,576 1,521,640 June 30, 2025:
Governmental activities:
General Liability and Automobile $ 22,632,403 $ 10,155,686 $ (12,749,824) $ 20,038,265 $ 8,888,835 Changes to prior year estimates 49,391,316 17,275,734 (13,046,759) 53,620,291 10,750,347 Total Governmental activities $ 72,023,719 $ 27,431,420 $ (25,796,583) $ 73,658,556 $ 19,639,182 Business-type activities:
Bus $ 5,965,576 $ 4,572,373 $ (1,402,093) $ 9,135,856 $ 4,094,581 Total Business-type activities $ 5,965,576 $ 4,572,373 $ (1,402,093) $ 9,135,856 $ 4,094,581
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 9 - SELF-INSURANCE (CONTINUED)
104
4.C.a
Packet Pg. 419 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Note 10 - Long-Term Debt
Changes in Long-term Debt
Long-term debt activity for the fiscal year ended June 30, 2025, was as follows:
Balance at Balance at Due Within Due Beyond
July 1, 2024 Additions Reductions June 30, 2025 One Year One Year Governmental activities:
Lease Revenue Bonds $ 197,785,000 $ - $ 6,840,000 $ 190,945,000 $ 7,150,000 $ 183,795,000 Plus deferred amounts:
For issuance premiums 20,139,702 - 1,142,759 18,996,943 - 18,996,943 Total loans and bonds payable 217,924,702 - 7,982,759 209,941,943 7,150,000 202,791,943 Business-type activities:
Loans payable from direct
borrowings 52,068,703 - 1,383,193 50,685,510 1,408,091 49,277,419 Revenue bonds 69,145,000 - 1,435,000 67,710,000 1,495,000 66,215,000 Plus deferred amounts:
For issuance premiums 7,137,777 - 264,363 6,873,414 - 6,873,414 Total loans and notes payable 128,351,480 - 3,082,556 125,268,924 2,903,091 122,365,833 Total $ 346,276,182 $ - $ 11,065,315 $ 335,210,867 $ 10,053,091 $ 325,157,776
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 10 - LONG-TERM DEBT
105
4.C.a
Packet Pg. 420 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for A summary of long-term debt outstanding at year-end is as follows:
Original Final Interest Balance at
Date of issue Issue Maturity Date Rate June 30, 2025
Governmental activities:
Lease Revenue bonds (1)
Public Finance Authority 2021 August 4, 2021 $ 64,780,000 July 1, 2051 2.125-5.00% $ 63,540,000 Public Finance Authority Refunding 2021 (Series A) May 5, 2021 17,860,000 July 1, 2031 4.00% 15,920,000 Public Finance Authority Refunding 2015 July 9, 2015 26,360,000 July 1, 2033 3.00-5.00% 15,725,000 Public Finance Authority Refunding 2017 Sept 14, 2017 68,565,000 July 1, 2047 3.00-5.00% 64,095,000 Public Finance Authority Refunding 2018 Jun 6, 2018 34,220,000 July 1, 2048 3.625-5.00% 31,665,000 Subtotal lease revenue bonds - governmental
activities 190,945,000
Subtotal governmental activities 190,945,000
Business-type activities:
Loans payable from direct borrowings (2):
State Water Resources Control
Board Construction Installment Sale Agreement Sep 21, 2017 56,046,630 Dec 31, 2052 1.80% 50,685,510 Revenue bonds (2):
Water Enterprise Revenue Bonds 2021 Aug 25, 2021 70,525,000 Aug 1, 2051 2.25-5.00% 67,710,000 Subtotal business-type activities 118,395,510
Total $ 309,340,510
(1) For construction of City facilities.
(2) To fund various water projects.
Management believes it is in compliance with all debt covenants. See Note 18.
Annual debt service requirements to maturity are as follows:
Governmental Activities
Fiscal year
ending Lease Revenue bonds
June 30, Principal Interest
2026 $ 7,150,000 $ 7,386,157
2027 7,490,000 7,040,707
2028 7,850,000 6,695,032
2029 8,195,000 6,349,607
2030 8,545,000 5,987,663
2031-2035 38,265,000 24,488,520
2036-2040 31,775,000 17,648,388
2041-2045 39,400,000 10,022,606
2046-2050 35,630,000 2,959,244
2051-2053 6,645,000 150,356
$ 190,945,000 $ 88,728,280
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 10 - LONG-TERM DEBT (CONTINUED)
106
4.C.a
Packet Pg. 421 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Business-Type Activities
Fiscal year Loans payable from direct
ending borrowings Revenue bonds Total
June 30 Principal Interest Principal Interest Principal Interest 2026 $ 1,408,091 $ 904,644 $ 1,495,000 $ 1,014,844 $ 2,903,091 $ 1,919,488 2027 1,433,437 879,512 1,555,000 1,998,588 2,988,437 2,878,100 2028 1,459,238 853,928 1,625,000 1,926,863 3,084,238 2,780,791 2029 1,485,505 827,883 1,685,000 1,865,175 3,170,505 2,693,058 2030 1,512,244 801,370 1,750,000 1,800,363 3,262,244 2,601,733 2031-2035 7,979,458 3,592,138 7,910,000 6,298,875 15,889,458 9,891,013 2036-2040 8,723,932 2,853,943 11,850,000 5,911,088 20,573,932 8,765,031 2041-2045 9,537,865 2,046,875 10,930,000 3,911,213 20,467,865 5,958,088 2046-2050 10,427,736 1,164,509 15,315,000 2,442,431 25,742,736 3,606,940 2051-2053 6,718,004 241,234 13,595,000 620,381 20,313,004 861,615 Totals $ 50,685,510 $ 14,166,036 $ 67,710,000 $ 27,789,821 $ 118,395,510 $ 41,955,857 A. Pledged Revenue
The City has a number of debt issues that involve the pledging of revenues. The amounts and terms of the remainder of these commitments and the purposes for which the proceeds of the debt issuances are utilized are indicated in the summary of long-term bonds and loans and notes outstanding at year-end presented in this note.
For the current year, debt service payments as a percentage of the pledged gross revenue (net of certain expenses where so specified in debt covenants) are indicated in the table below. These percentages also approximate the relationship of debt service to pledged revenue for the remainder of the term of the commitment.
Annual amount of Annual debt service
pledged revenue payments (of all Debt service as a
(net of expenses, debt secured by percentage of Future amount of where required) this revenue) pledged revenue pledged revenue Description of pledged revenue/debt:
Base rental payments
Public Finance Authority 2021 $ 3,438,250 $ 3,438,250 100% $ 89,357,579 Public Finance Authority Refunding 2021 2,651,800 2,651,800 100% 15,915,200 Public Finance Authority Refunding 2015 2,048,944 2,048,944 100% 16,429,507 Public Finance Authority 2017 4,377,525 4,377,525 100% 87,548,250 Public Finance Authority 2018 2,146,637 2,146,637 100% 40,800,603 Water charges for services
Water Enterprise Revenue bonds 2021 3,553,187 3,553,187 100% 92,337,038 Note 11 - Pollution Remediation
NOTE 11 - POLLUTION REMEDIATION
The City follows the guidance of GASB Statement No. 49, Accounting and Financial Reporting for Pollution Remediation Obligations, establishing accounting and financial reporting standards for pollution (including contamination) remediation obligations, which are obligations to address the current or potential detrimental effects of existing pollution by participating in pollution remediation activities such as site assessments and cleanups.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 10 - LONG-TERM DEBT (CONTINUED)
107
4.C.a
Packet Pg. 422 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for On December 1, 2006, the City amended a settlement agreement that it had entered into in 2003 with a consortium of oil companies in relation to methyl tertiary butyl ether (“MTBE”) contamination that had occurred at the City’s Charnock Well Field. The Charnock Well Field is used to supply drinking water to the City. The amended 2006 agreement called for the oil companies to pay the City $131.0 million in exchange for the City's agreement to treat to applicable drinking water standards any water produced from the Charnock Well Field, which contains MTBE, tertiary butyl alcohol (“TBA”) and related petroleum hydrocarbons. Prior to this amended 2006 agreement and under the terms of other settlement agreements with other companies, the City received an additional $122.1 million also related to MTBE contamination of the City's Charnock Well Field. Of this amount, $18.0 million was deposited into an escrow account specifically to be used for the design and building of a remediation plant. The account was to be replenished by the consortium of oil companies once exhausted until the remediation construction was complete. The City has received all the proceeds from each of these agreements, including the amended 2006 agreement.
To meet its Charnock Well Field water treatment obligation, the City has constructed and is operating a water treatment remediation plant using the proceeds of the 2006 and the other earlier settlements.
On November 13, 2009, the City entered into a settlement and release agreement with The Gillette Company (Gillette), guaranteed by The Procter & Gamble Company, in relation to groundwater contamination of the City’s Olympic Well Field. The Olympic Well Field is used to supply drinking water to the City. The agreement calls for Gillette to make payments to the City ranging from $150,000 to $11,183,175 annually, totaling $64.8 million over 30 years which included the City receiving title to property valued at $3.2 million. Under the agreement, the City has agreed to construct and operate facilities for treatment of certain contaminants and treat to applicable drinking water standards any water that it produces from the Olympic Well Field. At the end of FY 2016-17, the City had received cash payments of $42,895,400. During FY 2017-18, the City and Gillette agreed to modify their agreement whereby a lump sum payment of $10,415,000 was made by Gillette in exchange for a release from any and all future liabilities.
On May 15, 2012, the City entered into a settlement and release agreement with The Boeing Company (Boeing) also in relation to groundwater contamination of the City’s Olympic Well Field. The agreement calls for Boeing to make payments to the City ranging from $150,000 to $5,000,000 annually over a ten-year period, totaling $39,500,000. On December 12, 2012, the agreement was modified with $21,000,000 being due from Boeing in January 2013 and payments of $3,670,000 being due from Boeing annually beginning in 2017 through 2021. The City received all of Boeing's payments under the agreement. In return, the City agreed to construct and operate facilities for treatment of certain contaminants and treat to applicable drinking water standards any water that it produces from the Olympic Well Field.
Using the expected cash flow technique utilizing present value, the City has measured the potential water treatment liability under the agreements by the anticipated cost of construction/remediation/operating contracts, which include a contingency of 10% for unforeseen costs. During FY 2020-21, the City revised its pollution remediation liability for both the Charnock and Olympic Well restoration projects estimate based on more current information. This increased the business type activities liability from $34,174,514 as of June 30, 2020 to $54,695,700 as of June 30, 2021. The primary reason for the increase was the refinement of the remediation process based on more current reports from the City’s consultants which estimated higher costs and longer periods of remediation than originally determined. The City believes it has sufficient funds from the Gillette/Boeing settlement to fund current and future estimated remediation costs.
Additionally, the City engages in an ongoing program of non-water pollution remediation related to its various properties. Two such sites are currently undergoing remediation in the form of either soil or vaporous contaminant removal or containment. By State law these occurrences are required to be reported to California Department of Health Services.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 11 - POLLUTION REMEDIATION (CONTINUED)
108
4.C.a
Packet Pg. 423 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for The balance of the pollution remediation liability is $569,086 in the governmental activities of which $385,130 is due within one year and $22,241,615 in the business-type activities, of which $7,486,966 is due within one year.
These liabilities are reported in the business-type and governmental activities in the Statement of Net Position.
Note 12 - Employee Benefit Programs
NOTE 12 - EMPLOYEE BENEFIT PROGRAMS
Santa Monica Public Employees’ Retirement Plan
General Information about the Pension Plan
The City’s defined benefit pension plan, Santa Monica Public Employees’ Retirement Plan (Plan) provides retirement and disability benefits, annual cost-of living adjustments, and death benefits to plan members and beneficiaries. The Plan is part of the Public Agency portion of the California Public Employees’ Retirement System (CalPERS), an agent multiple-employer plan administered by CalPERS, which acts as a common investment and administrative agent for participating public employers within the State of California. State statutes within the Public Employees’ Retirement Law establish a menu of benefit provisions as well as other requirements. The City selects optional benefit provisions from the benefit menu by contract with CalPERS and adopts those benefits through City resolution. CalPERS issues a separate annual comprehensive financial report available from the CalPERS Executive Office, 400 Q Street, Sacramento, California 95811.
Plan Description
All full-time employees of the City and part-time employees who have worked over 1,000 hours during a fiscal year are eligible to participate in either one of the Safety Plans (Police and Fire) or the Miscellaneous Plan (all others). The City is authorized by statute to establish and amend all plan provisions. Related benefits vest after five years of service. Upon five years of service, employees who retire are entitled to receive an annual retirement benefit according to the following Plan provision chart for each employee group:
Miscellaneous
Between
Prior to July 1, 2012 and On or after
Hire Date July 1, 2012 December 31, 2012 January 1, 2013 Benefit formula 2.70% @ 55 2.00% @ 55 2.00% @ 62
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 50-55 50-62 52-67
Monthly benefits, as a % of eligible compensation 2.0% to 2.7% 1.43% to 2.42% 1.00% to 2.50% Cost of living adjustment 2.00% 2.00% 2.00%
Required employee contribution rate 8.00% 7.00% 6.75%
Required employer contribution rate 30.72% 30.72 30.72%
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 11 - POLLUTION REMEDIATION (CONTINUED)
109
4.C.a
Packet Pg. 424 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Police
Prior to On or after
Hire Date December 31, 2012 January 1, 2013
Benefit formula 3.00% @ 50 2.70% @ 57
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50 50-57
Monthly benefits, as a % of eligible compensation 3.00% 2.00% - 2.70% Cost of living adjustment 2.00% 2.00%
Required employee contribution rate 9.00% 13.00%
Required employer contribution rate 70.31% 70.31
Fire
Prior to On or after
Hire Date December 31, 2012 January 1, 2013
Benefit formula 3.00% @ 50 2.70% @ 57
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50 50-57
Monthly benefits, as a % of eligible compensation 2.40% - 3.00% 2.00% - 2.70% Cost of living adjustment 2.00% 2.00%
Required employee contribution rate 9.00% 10.00%
Required employer contribution rate 53.05% 53.05
As of June 30, 2025, the City had 1,910 active members of which 728 were considered “classic” members (hired prior to 12/31/2012) and 1,182 fall under the decreased benefits as prescribed in the Public Employees Pension Reform Act of 2012 (PEPRA). As noted in the tables above, Safety PEPRA members pay a higher employee contribution which, by law, cannot be paid by the employer. Additionally, PEPRA employees have a higher eligible retirement age and a lower benefit formula.
For FY 2017-18, CalPERS changed payment for the employer paid amortization of the unfunded pension liability from using a level percentage of pay to a flat dollar amount. In FY 2023-24, the City paid CalPERS $22,058,676, $13,264,908 and $6,228,384 for the employer paid amortization of the unfunded liability for the miscellaneous, police and fire plans respectively. On April 11, 2023, the Council authorized staff to suspend the accelerated paydown of the City’s unfunded pension liability from FY 2022-23 to FY2027-28 or later pending restoration of City services and maintenance budgets and reserves. The was further codified in the adopted Fiscal Policies found in the adopted budget.
Funding Policy
Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for the Plans are determined annually on an actuarial basis as of June 30 by CalPERS.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 12 - EMPLOYEE BENEFIT PROGRAMS (CONTINUED)
110
4.C.a
Packet Pg. 425 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Active full-time members in the Plan are required to contribute 6.75% to 8.00% (for miscellaneous employees),
9.00% to 13.00% (for Police safety employees), and 9.00% to 10.00% (for Fire safety employees), of their annual covered salary. Also, in FY2023-24 Police safety members contributed an additional 8.5% and Fire safety members contribute an additional 1%. Effective January 1, 2025, Police safety members was reduced to 6% and at June 30, 2025 the contribution will be 4%. The City is required to contribute the actuarially determined remaining amounts necessary to fund the benefits for its members earned during the year with an additional amount to amortize the unfunded accrued liability. As such, the City contributes the difference between the actuarially determined rate and the contribution rate of employees. The actuarial methods and assumptions used are those adopted by the CalPERS Board of Administration. The contribution requirements of the plan members are established by State statute and the employer contribution rate is established and may be amended by CalPERS.
Employees’ share of pension costs totaled $20,288,441 for FY 2024-25.
Employees Covered
At June 30, 2023, the following employees were covered by the benefit terms for each Plan:
Public Safety
Employees Miscellaneous Police Fire
Inactive members or their beneficiaries currently
receiving benefits 1,673 358 152
Inactive members entitled to but not yet receiving benefits 215 10 0 Active members 1,524 199 122
Total 3,412 567 274
Note: Information derived from 2023 CalPERS Census Data Net Pension Liability
The City’s net pension liability for each Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The total 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 standard update procedures.
A summary of principal assumptions and methods used to determine the net pension liability is shown below.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 12 - EMPLOYEE BENEFIT PROGRAMS (CONTINUED)
111
4.C.a
Packet Pg. 426 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Actuarial Methods and Assumptions Used to Determine Total Pension Liability For the measurement period ending June 30, 2024 (the measurement date), the total pension liability was determined using the following actuarial methods and assumptions:
Miscellaneous Safety - Police Safety - Fire
Valuation date June 30, 2023 June 30, 2023 June 30, 2023 Measurement date June 30, 2024 June 30, 2024 June 30, 2024 Actuarial cost method
Actuarial assumptions:
Discount rate 6.90% 6.90% 6.90%
Inflation 2.30% 2.30% 2.30%
Projected salary increase Varies by entry age and service Investment rate of return 1 6.80% 6.80% 6.80%
Mortality 2 Derived using CalPERS' membership data for all funds Post retirement benefit increase The lesser of contract COLA or 2.30% until Purchasing Power Protections Allowance floor on Purchasing Power applies,
2.30% thereafter.
1 Net of pension plan investment expenses, including inflation. 2 The mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board in November 2021. For purposes of the mortality rates, the rates incorporate generational mortality to capture on-going mortality improvement.
Generational mortality explicitly assumes that members born more recently will live longer than the members born before them thereby capturing the mortality improvement seen in the past and expected continued improvement. For more details, please refer to the 2021 experience study report that can be found on the CalPERS website.
Discount Rate
The discount rate used to measure the total pension liability was 6.9% for each Plan. The projection of cash flows used to determine the discount rate assumed that contributions from all plan members will be made at current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefits to determine total pension liability.
Long Term Expected Rate of Return
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 (expected returns net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both the short- and long-term market return expectations. Using historical returns of all 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 expected real rates of return by asset class are as follows:
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 12 - EMPLOYEE BENEFIT PROGRAMS (CONTINUED)
112
4.C.a
Packet Pg. 427 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Assumed
Asset
Asset Class 1 Allocation Real Return % 1, 2
Global equity-Cap-weighted 30.0 % 4.54 %
Global equity-Non-Cap-weighted 12.0 % 3.84 %
Private Equity 13.0 % 7.28 %
Treasury 5.0 % 0.27 %
Mortgage-backed Securities 5.0 % 0.50 %
Investment Grade Corporates 10.0 % 1.56 %
High Yield 5.0 % 2.27 %
Emerging Market Debt 5.0 % 2.48 %
Private Debt 5.0 % 3.57 %
Real Assets 15.0 % 3.21 %
Leverage (5.0) % (0.59) %
1 An expected inflation of 2.30% used for this period.
2 Figures are based on the 2022 Asset Liability Management study Amortization of Deferred Outflows and Inflows of Resources Under GASB 68, gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time.
The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense.
The amortization period differs depending on the source of the gain or loss:
Net Difference between projected and 5-year straight-line amortization actual earnings on pension plan investments
All other amounts Straight-line amortization over the expected average remaining service lives (EARSL) of all members that are provided
benefits (active, inactive, and retired) as of the beginning of the measurement
period
The expected average remaining service lifetime (EARSL) is calculated by dividing the total future service years by the total number of plan participants (active, inactive, and retired). Note that inactive employees and retirees have remaining service lifetimes equal to zero. Also note that total future service is based on members’ probability of decrementing due to an event other than receiving a cash refund.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 12 - EMPLOYEE BENEFIT PROGRAMS (CONTINUED)
113
4.C.a
Packet Pg. 428 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Changes in Net Pension Liability
The following tables display the changes in net pension liability recognized over the measurement period for each of the City’s Plans:
Miscellaneous: Increase (Decrease)
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2023 (VD)1 $ 1,398,856,027 $ 1,136,311,447 $ 262,544,580 Changes recognized for the
measurement period:
Service cost 25,273,992 - 25,273,992
Interest on total pension liability 95,797,769 - 95,797,769 Changes of benefit terms - - -
Differences between expected and
actual experience 11,462,303 - 11,462,303
Contributions-employer - 39,014,371 (39,014,371)
Contributions-employee - 11,235,624 (11,235,624)
Net investment income - 107,381,436 (107,381,436)
Benefit payments, including refunds of
employee contributions (69,163,727) (69,163,727) -
Administrative expense - (924,618) 924,618
Net changes during 2023-24 63,370,337 87,543,086 (24,172,749) Balance at June 30, 2024 (MD) $ 1,462,226,364 $ 1,223,854,533 $ 238,371,831 1 VD = Valuation Date
2 MD = Measurement Date
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 12 - EMPLOYEE BENEFIT PROGRAMS (CONTINUED)
114
4.C.a
Packet Pg. 429 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Public Safety - Police: Increase (Decrease)
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2023 (VD)1 $ 607,285,325 $ 457,107,017 $ 150,178,308 Changes recognized for the
measurement period:
Service cost 12,586,422 - 12,586,422
Interest on total pension liability 42,647,169 - 42,647,169 Differences between expected and
actual experience 20,301,875 - 20,301,875
Contributions-employer - 23,779,512 (23,779,512)
Contributions-employee - 4,364,447 (4,364,447)
Net investment income - 43,424,354 (43,424,354)
Benefit payments, including refunds of
employee contributions (31,610,982) (31,610,982) -
Administrative expense - (371,949) 371,949
Net changes during 43,924,484 39,585,382 4,339,102
Balance at June 30, 2024 (MD) $ 651,209,809 $ 496,692,399 $ 154,517,410 1 VD = Valuation Date
2 MD = Measurement Date
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 12 - EMPLOYEE BENEFIT PROGRAMS (CONTINUED)
115
4.C.a
Packet Pg. 430 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Public Safety - Fire: Increase (Decrease)
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2023 (VD)1 $ 305,233,049 $ 213,683,523 $ 91,549,526 Changes recognized for the
measurement period:
Service cost 6,008,744 - 6,008,744
Interest on total pension liability 21,136,774 - 21,136,774 Differences between expected and
actual experience 6,411,841 - 6,411,841
Contributions-employer - 10,546,636 (10,546,636)
Contributions-employee - 2,152,896 (2,152,896)
Net investment income - 20,141,728 (20,141,728)
Benefit payments, including refunds of
employee contributions (16,638,419) (16,638,419) -
Administrative expense - (173,875) 173,875
Net changes during 16,918,940 16,028,966 889,974
Balance at June 30, 2024 (MD) $ 322,151,989 $ 229,712,489 $ 92,439,500 1 VD = Valuation Date
2 MD = Measurement Date
Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the Plans as of the Measurement Date, calculated using the discount rate of 6.9%, as well as the net pension liability if it were calculated using a discount rate that is 1 percentage-point lower (5.9%) or 1 percentage-point higher (7.9%) than the current rate:
Discount Rate Plan
Miscellaneous Safety - Police Safety - Fire
1% Decrease 5.90 % 5.90 % 5.90 %
Net Pension Liability $ 431,253,715 $ 243,196,132 $ 135,448,103 Current Discount
Rate 6.90 % 6.90 % 6.90 %
Net Pension Liability $ 238,371,831 $ 154,517,410 $ 92,439,500 1% Increase 7.90 % 7.90 % 7.90 %
Net Pension Liability $ 78,933,870 $ 82,042,039 $ 56,985,644 Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial report.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 12 - EMPLOYEE BENEFIT PROGRAMS (CONTINUED)
116
4.C.a
Packet Pg. 431 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Pension Expense, Deferred Outflows and Deferred Inflows of Resources Related to Pensions For the year ended June 30, 2025, the City recognized pension expense as follows:
Pension
Plan Expense
Miscellaneous $ 39,106,601
Safety - Police 31,844,710
Safety - Fire 14,032,346
$ 84,983,657
As of June 30, 2025, the City reported deferred outflows and deferred inflows of resources related to pensions as follows:
Miscellaneous
Deferred Outflows Deferred Inflows
of Resources of Resources
Contributions subsequent to the
measurement date $ 42,858,534 $ -
Changes of assumptions 3,964,190 -
Differences between expected and
actual experience 7,764,786 4,001,107
Net difference between projected
and actual earnings on pension
plan investments 18,982,120 -
Total $ 73,569,630 $ 4,001,107
Safety - Police
Deferred Outflows Deferred Inflows
of Resources of Resources
Contributions subsequent to the
measurement date $ 25,356,905 $ -
Changes of assumptions 3,122,983 -
Differences between expected and
actual experience 16,571,427 1,017,367
Net difference between projected
and actual earnings on pension
plan investments 7,349,298 -
Total $ 52,400,613 $ 1,017,367
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 12 - EMPLOYEE BENEFIT PROGRAMS (CONTINUED)
117
4.C.a
Packet Pg. 432 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Safety - Fire
Deferred Outflows Deferred Inflows
of Resources of Resources
Contributions subsequent to the
measurement date $ 11,662,607 $ -
Changes of assumptions 3,867,385 -
Differences between expected and
actual experience 7,379,386 2,326,148
Net difference between projected
and actual earnings on pension
plan investments 3,589,232 -
Total $ 26,498,610 $ 2,326,148
The amounts above are net of outflows and inflows recognized in the pension expense for the fiscal year ended June 30, 2025.
Contributions of $79,878,046 that were made by the City subsequent to the measurement date but before the end of the reporting period are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the subsequent fiscal year ended June 30, 2026, rather than in the current fiscal year.
Other amounts reported as deferred outflows and inflows of resources will be recognized in future pension expense as follows:
Fiscal Years Deferred Outflows / (Inflows) of Resources Ended June 30 Miscellaneous Safety - Police Safety - Fire 2026 $ 3,063,125 $ 8,815,997 $ 2,345,049
2027 33,676,196 18,068,614 7,934,263
2028 (4,088,257) 1,548,467 1,128,829
2029 (5,941,075) (2,406,737) 380,389
2030 - - 721,325
CalPERS Funding Risk Mitigation Policy
The Funding Risk Mitigation (“FRM”) Policy seeks to reduce CalPERS funding risk over time. It establishes a mechanism whereby CalPERS investment performance that significantly outperforms the discount rate triggers adjustments to the discount rate, expected investment return, and strategic asset allocation targets. The Asset Liability Management (ALM) process is an integrated review of CalPERS assets and liabilities to inform decisions designed to achieve a sound and sustainable fund.
The goal of the ALM process is to balance the expected cost of future pension payments with the expected future investment returns. During the process, the CalPERS board reviews its overall risks, taking into consideration the long-term sustainability of the system.
This formal process runs on a four-year cycle and includes a review of CalPERS’ investment portfolios and retirement plan liabilities. Capital Market Assumptions are primarily based on expectations of future investment returns. Liability projections are based on demographic and economic factors and trends, including membership dynamics, future salary and payroll growth, retirement ages, inflation, and life expectancy.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 12 - EMPLOYEE BENEFIT PROGRAMS (CONTINUED)
118
4.C.a
Packet Pg. 433 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for In FY2020-21, the FRM was triggered because investment returns of 21.3% exceeded the current target rate of return (the 7% discount rate) by more than 2 percentage points, thus lowering the discount rate from 7.0% to
6.8%. The maximum amount the discount rate can be lowered in any one year is 0.25%. This will make for a higher contribution rate in future years compared to the rate that would have been used prior to the adoption of the FRM.
In April 2024, CalPERS changed their policy to eliminate the automatic rate reduction. Instead the Board will determine any rate changes.
Deferred Compensation Plans
The City offers to its employees an optional deferred compensation plan created in accordance with Section 457 of the Internal Revenue Code. This plan is available to substantially all employees and allows participants to defer a portion of their current income until future years to shelter such funds and earnings from state and federal taxation until withdrawal. The deferred compensation is not available to participants until termination, retirement, death or unforeseeable emergency. For the fiscal year ended June 30, 2025, the total employee contributions were $13,997,097.
The City offers an employer discretionary, defined contribution plan established and governed under Internal Revenue Code Section 401(a). Employee-only contributions are calculated based upon a percentage of employee compensation under agreements with employee bargaining groups and unions. For the fiscal year ended June 30, 2025, the total employee contributions were $1,104,778.
The City offers to its as-needed employees a separate Section 457 deferred compensation plan under the Omnibus Budget Reconciliation Act (OBRA). This plan is available to all as-needed employees who are not eligible to participate in CalPERS. This plan requires equal employer and employee contributions based on a percentage of earnings. For the fiscal year ended June 30, 2025, the combined employee/employer contributions were $261,041.
These plans are administered through third-party administrators. The City does not perform the investing function and has no fiduciary accountability for the plans. Thus, plan assets and any related liabilities to plan participants have been excluded from the City’s basic financial statements.
Other Postemployment Benefits
In addition to providing pension benefits through CalPERS, the City, in accordance with agreements with various bargaining units and groups, provides medical insurance benefits that are considered other postemployment benefits (OPEB) to certain retired employees under a single employer benefit plan. These benefits are subject to negotiations between the City and each bargaining unit and the related memorandum of understanding (MOU) is approved by the City Council. Employees of the Executive Pay Plan group and management employees of the Rent Control Board are eligible for a City paid medical insurance benefit if their combined retirement age and years of public agency service equals or exceeds 70. Under the terms of a MOU between the City and a coalition of the various non-sworn bargaining units (Coalition), all non-sworn permanent retirees are allowed to continue participating in one of the City’s health plans at the same rate as active employees. As with other MOU’s, this benefit is subject to bargaining between the City and the Coalition. The City also maintains minimum benefits for public safety employees provided by the City’s contract with its healthcare provider CalPERS. The City pays for OPEB through employer only contributions to a qualified OPEB trust, with no contribution required from employees. The Plan does not issue a stand-alone financial statement.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 12 - EMPLOYEE BENEFIT PROGRAMS (CONTINUED)
119
4.C.a
Packet Pg. 434 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Employees Covered
As of the June 30, 2023, actuarial valuation date, the following current and former employees were covered by the benefit terms under the OPEB plan:
Active employees 1,879
Inactive employees or beneficiaries receiving benefits 241 Inactive employees entitled to, but not receiving benefits 135 Total 2,255
Contributions
The OPEB Plan and its contribution requirements are established by Memorandum of Understanding with the applicable employee bargaining units and may be amended by agreements between the City and these bargaining units. The annual contribution is based on the actuarially determined contribution.
Net OPEB Liability
The City’s net OPEB liability was measured as of June 30, 2024, and the total OPEB liability used to calculate the net OPEB liability was determined by actuarial valuation dated June 30, 2023, based on the following assumptions:
Actuarial Assumptions:
Discount rate 5.55%
Inflation 2.50%
Salary increases 3.00% per year, used only to allocate the costs between service years.
Investment rate of return 6.20%
Mortality rate Mortality rates used were those published the CalPERS 2021 experience study, using data from
2000 to 2019, except for a different basis used to
project future mortality improvements, then projected
using the MacLeod Watts Scale 2022 from 2017
forward.
Pre-retirement Turnover Assumed rates of termination vary based on the current age, service and employee type (fire, police
or miscellaneous) as developed by CalPERS and
published in their 2021 Experience Study Report.
Healthcare Trend Rate 4.8% decreasing to 3.90%
The long-term expected rate of return on OPEB plan investments was determined using a building block method in which future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected inflation of 2.4% per year in years 1 through 5 and 2.3% in years 6 and beyond.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 12 - EMPLOYEE BENEFIT PROGRAMS (CONTINUED)
120
4.C.a
Packet Pg. 435 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for The target allocation and best estimates of arithmetic real rates for each major asset class are summarized in the following table:
Target Real Return % Real Return %
Asset Class Allocation Years 1-5 Years 6+
Global equity 34 % 3.90 % 4.70 %
Fixed Income 41 % 2.70 % 2.60 %
Global real estate 17 % 3.70 % 4.00 %
Treasury Inflation Protected Securities 5 % 1.70 % 1.40 % Commodities 3 % 2.90 % 2.00 %
Discount Rate
The discount rate used to measure the OPEB liability was 5.55%. This discount rate was determined based on the results of analysis described in GASB 75. Plan benefits for all current and future retirees are projected from year to year from the results of the valuation. Future employer contributions are projected based on levels over the last 5 years and certain assumptions about the benefit costs of future employees. Trust assets are projected based on the projected future contributions and the assumed return on assets. Where the trust is expected to have sufficient assets to pay all retiree benefits in a particular year, the assumed trust rate of return is applied; once that trust is no longer expected to be able to pay plan benefits, the municipal bond rate is applied for the remainder of the projection period.
Changes in OPEB liability
The changes in the net OPEB liability for the Plan are as follows:
Increase (Decrease)
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability/(Asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2023 $ 37,882,713 $ 8,590,018 $ 29,292,695 Changes recognized for the
measurement period:
Investment experience - 527,021 (527,021)
Service cost 1,080,743 - 1,080,743
Interest on total OPEB liability 1,963,738 - 1,963,738
Changes of assumptions (3,205,572) - (3,205,572)
Contributions-employer - 3,479,789 (3,479,789)
Net investment income - 172,097 (172,097)
Benefit payments, including refunds of
employee contributions (1,665,246) (1,665,246) -
Administrative expense - (2,841) 2,841
Net changes during 2023-24 (1,826,337) 2,510,820 (4,337,157) Balance at June 30, 2024 $ 36,056,376 $ 11,100,838 $ 24,955,538
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 12 - EMPLOYEE BENEFIT PROGRAMS (CONTINUED)
121
4.C.a
Packet Pg. 436 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The following presents the net OPEB liability of the City if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for the measurement period ended June 30, 2024:
Discount Rate Current Discount Rate
-1 Percent Discount Rate +1 Percent
4.55% 5.55% 6.55%
Net OPEB Liability $ 28,775,612 $ 24,955,538 $ 21,717,830 Sensitivity of the Net OPEB Liability to Changes in Health Care Cost Trend Rates The following presents the net OPEB liability of the City if it were calculated using health care cost trend rates that are one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2024.
Current Healthcare
1% Decrease Cost Trend Rates 1% Increase
Net OPEB Liability $ 21,122,800 $ 24,955,538 $ 29,555,079 OPEB Plan Fiduciary Net Position
CalPERS issues publicly available financial statements for the California Employers’ Retiree Benefit Trust that may be obtained from CalPERS, 400 Q Street, Sacramento, CA 95811 or at www.calpers.ca.gov.
Recognition of Deferred Outflows and Deferred Inflows of Resources Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time.
Amounts are first recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are recognized in future OPEB expense.
The recognition period differs depending on the source of gain or loss:
Net Difference between projected and 5-year straight-line amortization actual earnings on pension plan investments
All other amounts Straight-line amortization over the expected average remaining service lives (EARSL) of all members that are provided
benefits (active, inactive, and retired) as of the beginning of the measurement period
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2025 the City recognized OPEB expense of $1,898,712. As of fiscal year ended June 30, 2025, the City reported deferred outflows/inflows of resources related to OPEB from the following sources:
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 12 - EMPLOYEE BENEFIT PROGRAMS (CONTINUED)
122
4.C.a
Packet Pg. 437 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Deferred Outflows Deferred Inflows
of Resources of Resources
Contributions subsequent to the
measurement date $ 3,653,779 $ -
Changes of assumptions 5,268,995 13,178,060
Differences between expected and
actual experience 7,860,114 4,889,495
Net difference between projected
and actual earnings on OPEB
plan investments 115,750 -
Total $ 16,898,638 $ 18,067,555
Contributions made subsequent to the measurement date will recognized in next fiscal year.
Other amounts reported as deferred inflows of resources related to OPEB will be recognized as expense as follows:
Fiscal Deferred
Year Ending Outflows/(Inflows)
June 30 of Resources
2026 $ (571,303)
2027 (197,712)
2028 (573,372)
2029 (583,839)
2030 (961,941)
Thereafter (1,934,529)
In prior years, pension and OPEB liabilities have been extinguished primarily by the general fund.
Medical Trusts
The City contributes, consistent with bargaining unit agreements, monies to medical trusts, a defined contribution plan that provide postemployment medical benefits to employees. The amount of benefits provided to employees under these plans is limited solely to the amount contributed (determined by negotiations between the various bargaining groups and the City) related investment earnings, and forfeitures. For the fiscal year ended June 30, 2025, the City contributed $3,621,723 towards the retiree medical trusts. These are administered through thirdparty administrators and the City does not perform the investing function or have other significant responsibility relating to the management of plan assets. Thus, plan assets and any related liabilities have been excluded from the City’s basic financial statements.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 12 - EMPLOYEE BENEFIT PROGRAMS (CONTINUED)
123
4.C.a
Packet Pg. 438 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Note 13 - Fund Balances
In the fund financial statements fund balance is displayed in categories that describe the nature and extent of constraints on resources that the City is bound to observe. See note 1 for a detailed explanation of the City’s fund balance policies.
Fund balance reported on the governmental funds balance sheet as of June 30, 2025 includes the following:
A. Nonspendable fund balance
Nonspendable fund balance includes amounts that are not in a spendable form, such as prepaid and advances to other funds, or are required to be maintained intact, such as funds held by the City associated with the perpetual care of the City's cemetery and mausoleum.
Nonspendable fund balances are presented as a component of fund balances as follows:
Advances to Beach $ 3,842,973 $ - $ - $ - $ - $ 3,842,973 Advances to Rent
Control 109,341 - - - - 109,341
Deposits 273,371 - - - - 273,371
Perpetual Care - - - - 20,904,188 20,904,188
Prepaids 3,412,432 - - - 256 3,412,688
Total nonspendable $ 7,638,117 $ - $ - $ - $ 20,904,444 $ 28,542,561 General
Special
Revenue
Source Fund
Low and
Moderate
Income Housing
Asset Fund Measure GS
Nonmajor
governmental
funds
Total
governmental
funds
Nonspendable
B. Restricted fund balance
Restricted fund balance represents amounts that can only be spent for the specific purposes stipulated by either external resource providers or by enabling legislation that created the revenue source and restricted its use.
These restrictions may be changed or lifted only with the consent of the resource providers.
The largest component of restricted fund balance is affordable housing, which represents funds received from grants, taxes, and fees that are all dedicated to ensuring the affordability of housing in the City. Most affordable housing funds are already obligated or loaned to affordable housing developers for eligible projects. The 2017 City Services Building Bonds, 2018 Fire Station 1 Bonds and the 2021 City Yards Modernization Project Bonds represent the unspent portion of lease revenue bond proceeds that were issued to finance these large-scale capital projects. Other significant categories include transportation funds, traffic, roads, and parking, which are all dedicated to improving the City’s transportation systems for its citizens and visitors. Another noteworthy category is cultural and recreation services, which includes funds restricted for beach recreation activities, the upgrade and/ or expansion of parks and recreation facilities, and funds that support public art programs. Overnight accommodations funds are to be used for development of low-cost lodging accommodations in the Santa Monica Coastal Zone and for the development, redevelopment, expansion, replacement, repair, operation or use of affordable overnight accommodations within the City of Santa Monica. Childcare programs are designed to assist eligible residents with childcare needs, as well as for the construction of new childcare facilities. Advances to the Beach Fund were made with funds that will be restricted upon repayment. Finally, debt service represents amounts held by trustees for the future repayment of outstanding City obligations.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 13 - FUND BALANCES
124
4.C.a
Packet Pg. 439 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Restricted fund balances are presented as a component of fund balances as follows:
Restricted
2017 City Services
Building Bonds $ 256,706 $ - $ - $ - $ - $ 256,706
2018 Fire Station 1
Bonds 12,362 - - - - 12,362
2021 City Yards Bonds 3,765,036 - - - - 3,765,036
Advances to Beach - 1,450,000 - - - 1,450,000
Affordable housing 207,709 40,084,821 68,154,324 33,040,525 31,683,514 173,170,893 Childcare programs - 3,370,851 - - - 3,370,851
Clean beaches and
ocean parcel tax - - - - 18,870,363 18,870,363
Community
development - 5,000,000 - - - 5,000,000
Consumer protection 640,025 - - - - 640,025
Cultural and recreation
services - 8,927,519 - - - 8,927,519
Debt service - - - - 10,998,990 10,998,990
Disability 82,534 - - - - 82,534
Miscellaneous - 3,601,437 - - 10,345,622 13,947,059
Mobility - - - - 4,230,995 4,230,995
Overnight
accommodations - 3,555,350 - - - 3,555,350
Parking - 1,278,872 - - - 1,278,872
Roads - 347,336 - - 7,028,454 7,375,790
Traffic - 2,463,981 - - - 2,463,981
Transit - 6,287,510 - - 26,018,206 32,305,716
Total restricted $ 4,964,372 $ 76,367,677 $ 68,154,324 $ 33,040,525 $ 109,176,144 $ 291,703,042 General
Special
Revenue
Source Fund
Low and
Moderate
Income Housing
Asset Fund Measure GS
Nonmajor
governmental
funds
Total
governmental
funds
C. Committed fund balance
Committed fund balance represents amounts that can only be used for the specific purposes determined by a formal action of the City Council. Commitments may be changed or lifted only by the City Council taking the same formal action that originally imposed the constraint.
Committed fund balance consists of affordable housing funds received from settlement proceeds, the sale of Cityowned properties, funds received from the Successor Agency, and one quarter of the City’s Transaction and Use Tax revenue, which are committed to ensuring the affordability of housing in the City. Most affordable housing funds are already obligated or loaned to affordable housing developers for eligible projects.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 13 - FUND BALANCES (CONTINUED)
125
4.C.a
Packet Pg. 440 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Committed
Affordable housing $ - $ 113,956,285 $ - $ - $ - $ 113,956,285 Total committed $ - $ 113,956,285 $ - $ - $ - $ 113,956,285 General
Special
Revenue
Source Fund
Low and
Moderate
Income Housing
Asset Fund Measure GS
Nonmajor
governmental
funds
Total
governmental
funds
D. Assigned fund balance
Assigned fund balance represents amounts intended to be used by the City for specific purposes expressed by the City Council or by an official to which the City Council has delegated the authority.
The largest component of assigned fund balance is working capital/operational continuity funds to support the Realignment Plan to restore safety, revitalize spaces, spur growth, expand housing, and strengthen the City - achieving fiscal balance and civic renewal by FY2027-28. Funds remaining for continuing capital projects represent funds that are dedicated to completing multiyear capital improvement throughout the City, while Yearend CIP savings have been re-appropriated by Council to new projects in the Adopted FY 2022-23 CIP Budget. Other funds are assigned for compensated absences, encumbrances and reappropriation of open contracts and purchase orders, and other key initiatives required for the health and safety of the City and its assets.
Assigned
Compensated absences $ 12,175,786 $ - $ - $ - $ - $ 12,175,786 Continuing capital
projects 8,410,525 - - - - 8,410,525
Economic recovery fund 198,383 - - - - 198,383
Encumbrances and
reappropriations 9,741,804 - - - - 9,741,804
Leases - GASB 87 1,598,503 - - - - 1,598,503
Working Capital/
Operational Continuity 60,000,000 - - - - 60,000,000
Year end CIP savings 1,205,347 - - - - 1,205,347
Total assigned $ 93,330,348 $ - $ - $ - $ - $ 93,330,348 General
Special
Revenue
Source Fund
Low and
Moderate
Income Housing
Asset Fund Measure GS
Nonmajor
governmental
funds
Total
governmental
funds
E. Unassigned fund balance
Unassigned fund balance is the residual classification for the General Fund and includes all amounts not contained in other classifications. Other governmental funds may report negative unassigned fund balance if expenditures incurred for a specific purpose exceed the resources that are restricted, committed, or assigned to that purpose. This occurs when reimbursements are received after expenditures are incurred and the deficit will be eliminated as reimbursements for eligible grant expenditures are received from grantors.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 13 - FUND BALANCES (CONTINUED)
126
4.C.a
Packet Pg. 441 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for The largest component of unassigned fund balance is the emergency operating contingency, which represents funds for emergency events and circumstances. These reserves are maintained to safeguard the credit rating and basic operations of the City in the event of an economic or natural emergency or disaster. The City lowered its contingency reserves from 15% to 12.5% of the following year’s operating and ongoing capital budget in order to make more one-time funds available to withstand the severe revenue decreases resulting from the COVID-19 pandemic. The City will begin increasing its reserves by 0.5 percentage points each year beginning in FY 2022-23, reaching its original 15% level in FY 2026-27. The unrealized loss represents the portion of fund balance related to investments that is not available for appropriation. Negative unassigned fund balance for nonmajor governmental funds is due to the timing of expenditures being incurred prior to reimbursement from grant and other revenue sources. The deficits will be eliminated as future revenues are received.
Unassigned
Contingency $ 63,238,145 $ - $ - $ - $ - $ 63,238,145
Unrealized loss (1,118,251) - - - - (1,118,251)
Other unassigned - - - - (22,390,196) (22,390,196)
$ 62,119,894 $ - $ - $ - $ (22,390,196) $ 39,729,698
General
Special
Revenue
Source Fund
Low and
Moderate
Income Housing
Asset Fund Measure GS
Nonmajor
governmental
funds
Total
governmental
funds
Note 14 - Fund Deficits
NOTE 14 - FUND DEFICITS
A. Governmental Funds
A negative fund balance of $57,830 exists in the Beach Recreation Fund because it is still recovering from parking revenue declines due to the pandemic. The fund deficit increased from the prior year due to less spending on capital projects. It is anticipated that the fund deficit will be eliminated through increased future revenues and reduced future capital project expenditures.
A negative fund balance of $1,775,793 exists in the Miscellaneous Grants Fund because of several large capital project expenditures which include the Olympic Blvd improvements, groundwater wells, City Yard improvements and the Stewart & Pennsylvania Safety Enhancement project.
A negative fund balance of $126,059 exists in the Parks and Recreation Fund due to the negative balance from the prior year and no activity. All spending has ceased.
B. Internal Service Funds
A net deficit of $340,733 exists in the Information Technology Replacement and Services due to increased expenses on Telecommunications Services and the Computer Replacement Program.
A net deficit of $6,130,424 exists in the Self-Insurance, General Liability / Auto Fund primarily due to the ongoing settlement of several large settlements and the adjustment to the claims reserve.
A net deficit of $5,072,687 exists in the Self-Insurance Bus Fund, due to several large settlements. Increased future contributions are expected to make up the deficits.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 13 - FUND BALANCES (CONTINUED)
127
4.C.a
Packet Pg. 442 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Note 15 - Restricted Net Position
In the government-wide financial statements and proprietary fund financial statements, restricted net position is reported when constraints on the use of resources are either externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations or other governments, or imposed by law through constitutional provisions or enabling legislation. See note 1 for a detailed explanation of the City’s net position policies.
A reconciliation of the differences between the Governmental restricted fund balance and the Government- Wide restricted net position provides an understanding of the accounting basis at the fund-level in relation to the government-wide financial statements.
Reconciliation of Governmental Restricted Fund Balance to Government-Wide Restricted Net Position:
Restricted Fund Balance (Note 13) $ 291,703,042
Differences in Fund Balance:
Capital related debt/proceeds (4,034,104)
Unavailable revenue 9,376,901
Perpetual care - Nonexpendable 20,904,188
Total Differences in Fund Balance: 26,246,985
Total Restricted Net Position $ 317,950,027
Note 16 - Commitments and Contingencies
NOTE 16 - COMMITMENTS AND CONTINGENCIES
Litigation
Pico Neighborhood Association, et al v. City of Santa Monica. On February 23, 2017, the Pico Neighborhood Association and Maria Loya filed a First Amended Complaint alleging that the City’s at-large method of electing City Council members violates the California Voting Rights Act (“CVRA”) and the Equal Protection Clause of the California Constitution. Plaintiffs sought declaratory and injunctive relief, as well as an award of attorneys’ fees.
The City retained outside counsel, Gibson, Dunn and Crutcher, to represent the City in this lawsuit. Trial began August 1, 2018, and the presentation of evidence concluded on September 11, 2018. After extensive post-trial briefing, the trial court issued judgment in favor of Plaintiffs on both of their causes of action on February 13, 2019. Following issuance of the trial court’s judgment, on March 28, 2019, Plaintiffs filed a motion seeking approximately $902,000 in costs. On April 12, 2019, the City filed a motion to strike/tax those costs to significantly reduce them. On June 3, 2019, Plaintiffs filed a motion seeking an award of more than $22 million in attorneys’ fees pursuant to a provision of the CVRA. Pursuant to an agreement between the parties, the City’s response to Plaintiffs’ fee motion and the hearings regarding costs and fees have been continued to follow the resolution of the appellate proceedings in the Court of Appeal and the California Supreme Court. The City filed a notice of appeal from the judgment on February 22, 2019. After briefing, the Court of Appeal held oral argument on June 30, 2020.
On July 9, 2020, the Court of Appeal issued an opinion holding that the City did not violate either the CVRA or the Equal Protection Clause of the California Constitution. Accordingly, the Court of Appeal reversed the trial court’s judgment, awarded costs to the City, and directed the trial court to enter judgment for the City. Plaintiffs filed for rehearing, which the Court of Appeal denied on August 5, 2020. On August 18, 2020, Plaintiffs filed a petition seeking review by the California Supreme Court. On October 21, 2020, the California Supreme Court granted review only on a limited question relating to Plaintiffs’ claim under the CVRA, leaving intact the Court of Appeal’s ruling in the City’s favor on the Equal Protection claim. The California Supreme Court issued its opinion on August 24, 2023. The Court’s opinion declined to decide the ultimate question in this case: whether the City’s at-large voting system complies with the CVRA and remanded the case back to the Court of Appeal. The Court did, however, resolve some key disputes between the parties—for instance, the Court rejected the plaintiffs’ argument that the CVRA doesn’t require evidence of dilution, and it also rejected the City’s position that Latino voters must
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 15 - RESTRICTED NET POSITION
128
4.C.a
Packet Pg. 443 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for account for a near majority in a hypothetical district. But the Court left many issues open for the Court of Appeal to resolve, and its decision leaves the City free to renew its many other arguments on remand. After remand, the Court of Appeal set a briefing schedule for December 6, 2023 (concurrent filing of opening briefs) and February 7, 2024 (concurrent filing of responses). The Court of Appeal issued the remittitur on April 15, 2024, returning the case to the trial court. The trial court considered oral briefing on the scope of evidence to be taken at the next trial, which is scheduled for October 26, 2026.
Litigation arising from allegations of sexual abuse of minors. Currently there are 36 active cases with 181 plaintiffs brought by former minor participants in the Santa Monica Police Activities League who allege they were sexually abused by former City civilian employee. The employee, as part of his work as a civilian employee of the Santa Monica Police Department, was assigned to a position at the Santa Monica Police Activities League (PAL) from October 5, 1989, through at least February 10, 1992. From the late 1980s through the mid-1990s, the former employee appears to have also volunteered at PAL, including serving as its Chief Financial Officer in at least some portion of 1991. From 2012 to 2017, the former employee was an instructor in the City’s Youth Tech Program, a summer program preparing high school students for careers in the tech industry. These lawsuits were filed after the City’s most last settlement with 129 additional plaintiffs/claimants alleging that they were sexually abused by the former employee. The City is represented by the private law firms of Munger, Tolles & Olsen LLP and Andrade Gonzalez LLP. Andrade Gonzalez LLP is also representing the City as plaintiff in a bad faith insurance claim to recover City’s losses in these cases. The City previously settled claims by 234 plaintiffs alleging similar types of abuse for a total of $225.825 million. Settlement negotiations via a private mediator have stalled for now. The Court ordered the parties to commence formal discovery and bellwether trials, and the parties are currently working with the Court on the process. The City continues to focus on rooting out potential fraud.
The City and SM-PAL have insurance coverage via several insurance carriers covering some of the time when the alleged abuse occurred. Despite numerous and ongoing demands to these carriers by the City, prior to initiating ligitation, the only monetary contributions to the aforementioned settlements have been $11,000,000 from ACCEL (in exchange for a release) and $163,679 from one SM-PAL insurer, Riverstone, to reimburse select defense costs. After deducting Santa Monica’s required contributions to ACCEL to cover its share of this $11 million, the net recovery from ACCEL was approximately $8,766,089.
The City initiated coverage action against Insurance Co. of the State of Pennsylvania, Insurance Co. of the West, Lexington Insurance Co., Axis Surplus Insurance Co., Arch Specialty Insurance Co. and TIG Insurance Co. for all the settlements to the victims, legal expenses, and damages in the amount sufficient to “deter similar bad faith behavior by the defendants in the future.” In FY 2023-24, the City received $12.5 million from ICW and $4.0 million from Lexington. The suit against the remaining carriers is ongoing. The parties have private mediation scheduled for December 3, 2025, with a hearing on the City’s motion for summary judgment scheduled for December 11, 2025.
Grants
The City recognizes as revenue grant monies received as reimbursement for costs incurred in certain Federal and State programs it administers. Although the City’s Federal grant programs have been audited through June 30, 2024, in accordance with the Uniform Guidance requirements issued by the U.S. Office of Management and Budget, these programs may be subject to financial and compliance audits by the reimbursing agencies. The amount, if any, of expenditures, which may be disallowed by the granting agencies cannot be determined at this time, although the City expects such amounts, if any, to be immaterial.
Construction Commitments
The City has a number of construction projects currently underway. Purchase orders, contracts, and other commitments for these projects are recorded in order to reserve the portion of the applicable appropriation and are segregated at year-end as an unavailable fund balance. Approximately $94.7 million will be payable upon future performance under these contracts.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 16 - COMMITMENTS AND CONTINGENCIES (CONTINUED)
129
4.C.a
Packet Pg. 444 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Other Commitments
In 1999, the City entered into a thirty-year agreement with the City of Los Angeles for the conveyance, treatment, and disposal of wastewater. The Amalgamated System Sewerage System Charge (ASSSC) from this agreement is based on the City of Los Angeles’ estimated costs and actual flows and strengths of wastewater in 2023-24.
Per the City of Los Angeles, as of June 30, 2025, $9.1 million will be due under this agreement for fiscal year 2025-26. This agreement may be renegotiated by either party after the initial 10 years of the agreement.
On June 29, 2018, the City transferred ownership of the Mountain View Mobile Home Park to the Caritas Corporation (Caritas), a 501(c)3 non-profit, for $1. As part of the terms of the sale, Caritas agreed to maintain affordability and resident protections and the City will provide a loan commitment up to $500,000 to cover operating expense overages for the next five years at $100,000 per year. As of June 30, 2025, $272,333 remains to be disbursed.
Encumbrances
The City uses “encumbrances” to control expenditure commitments for the year. Encumbrances represent commitments related to contracts not yet performed and purchase orders not yet filled. Commitments for such expenditures are encumbered to reserve applicable appropriations. As of June 30, 2025, total encumbrances for the governmental funds are reported as follows:
General Fund $ 16,730,824
Special Revenue Fund 4,263,140
Nonmajor governmental funds 29,512,746
Total $ 50,506,710
Note 17 - Interfund Transactions
NOTE 17 - INTERFUND TRANSACTIONS
The following tables summarize the due to/from other funds, interfund advances to/from, and transfers in/out as of and for the fiscal year ended June 30, 2025.
A. Advances to/from
Advances to/from other funds at June 30, 2025, are as follows:
Advances to Advances from
(receivable fund) (payable fund) Amount
General fund Nonmajor governmental funds $ 3,952,314
Total General Fund 3,952,314
Special Revenue Source Fund Nonmajor governmental funds 1,450,000 Total Special Revenue Source Fund 1,450,000
Total $ 5,402,314
Advances represent loans made to cover operating shortfalls or to provide financing resources for capital projects.
These amounts are expected to be repaid in future years, subject to the various loan terms.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 16 - COMMITMENTS AND CONTINGENCIES (CONTINUED)
130
4.C.a
Packet Pg. 445 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for B. Due from/to
Balances due to/from other funds at June 30, 2025, are as follows:
Due from Due to
(receivable fund) (payable fund) Amount
General fund Nonmajor governmental funds $ 8,527,475
General fund Internal Service Funds 266,605
Total due to/from $ 8,794,080
Due to/from other funds are primarily short-term loans made to eliminate negative cash balances at yearend.
These amounts are expected to be repaid in one year.
C. Transfers
Transfers to/from other funds for the fiscal year ended June 30, 2025, are as follows:
Transfer in Transfer out
(receivable fund) (payable fund) Amount
General Fund Special Revenue Source Fund $ 2,972,841 (1) Nonmajor governmental funds 5,751,229 (2)
Low/Mod Housing Fund 146,691 (3)
Water Fund 1,918,838 (4)
Wastewater Fund 947,469 (5)
Airport Fund 649,996 (6)
Resource Recovery and Recycling Fund 1,409,298 (7)
Big Blue Bus Fund 739,162 (8)
Nonmajor enterprise funds 320,258 (9)
Internal service funds 238,706 (10)
Total General Fund 15,094,488
Special Revenue Source Fund General Fund 4,576,471 (11) Total Special Revenue Source Fund 4,576,471
Nonmajor governmental funds General Fund 17,377,750 (12) Nonmajor governmental funds 61,342 (13)
Nonmajor enterprise funds 66,661 (14)
Total Nonmajor governmental funds 17,505,753
Water Fund General Fund 118,305 (15)
Wastewater Fund 219,637 (16)
Nonmajor governmental funds 1,824 (17)
Total Water Fund 339,766
Wastewater Fund General Fund 113,051 (15)
Water Fund 78,639 (16)
Nonmajor governmental funds 1,540,773 (18)
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 17 - INTERFUND TRANSACTIONS (CONTINUED)
131
4.C.a
Packet Pg. 446 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Nonmajor enterprise funds 1,376,545 (19)
Total Wastewater Fund 3,109,008
Resource Recovery and Recycling Fund General Fund 113,549 (11) Nonmajor governmental funds 228 (17)
Total Resource Recovery and Recycling
Fund 113,777
Big Blue Bus Fund General Fund 57,234 (16)
Nonmajor governmental funds 602,249 (20)
Total Big Blue Bus Fund 659,483
Nonmajor enterprise funds General Fund 3,621,570 (21)
Water Fund 10,731 (22)
Nonmajor governmental funds 839,088 (23)
Total Nonmajor enterprise funds 4,471,389
Internal service funds General Fund 132,786 (16)
Nonmajor governmental funds 2,645 (17)
Internal service funds 2,902,163 (24)
Total Internal service funds 3,037,594
Total Transfers $ 48,907,729
1. Payments for property used in CityTV operations, Subsidize Community Recreation programs, Subsidize transportation programs, Subsidize Arts programs, Subsidize affordable housing programs, subsidize engineering expenditures, Subsidize police expenditures, Subsidize housing division expenditures & Subsidize administrative expenditures.
2. Subsidize watershed management programs, Subsidize transportation programs, Subsidize street infrastructure, Subsidize administrative expenditures, Subsidize library programs, FEMA Transfers and Subsidize housing division expenditures.
3. Subsidize Low/Mod Housing expenditures.
4. Subsidize environmental programs, Subsidize infrastructure improvements & programs, Subsidize engineering expenditures and Subsidize administrative expenditures.
5. Subsidize administrative expenditures, Subsidize engineering expenditures, Subsidize environmental programs and Subsidize infrastructure improvements.
6. Debt Service Transfer, Subsidize environmental programs, Subsidize Recycling program expenditures and Subsidize administrative expenditures.
7. Debt Service Transfer, Subsidize administrative expenditures, Subsidize infrastructure programs.
8. Subsidize administrative expenditures, Subsidize finance expenditures, Subsidize maintenance programs and Subsidize police expenditures.
9. Debt Service Transfer, Subsidize administrative expenditures, Subsidize environmental programs.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 17 - INTERFUND TRANSACTIONS (CONTINUED)
132
4.C.a
Packet Pg. 447 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for
10. Subsidize youth programs, Subsidize risk management expenditures and Subsidize administrative expenditures.
11. Subsidize affordable housing program.
12. Debt Service Transfer, Beach Loan Transfer and Subsidize Community Recreation programs.
13. FEMA Transfer and Subsidize administrative expenditures.
14. Subsidize maintenance programs.
15. Subsidize reduced water rates for low-income families.
16. Subsidize administrative expenditures.
17. FEMA Transfer.
18. SWIP Loan Transfer and Subsidize SWIP operation expenditures.
19. Subsidize operating and maintenance of Santa Monica Urban Runoff Recycling Facility (SMURRF) expenditures.
20. FEMA Transfer and Subsidize transportation programs and infrastructures.
21. Subsidize administrative expenditures, Subsidize pier operations expenditures and Subsidize police expenditures.
22. Subsidize recycled water rebate expenditures.
23. Subsidize administrative expenditures and Subsidize cemetery operations and maintenance.
24. Subsidize risk management program expenditures.
Note 18 - Successor Agency Trust Fund for Assets of Former Redevelopment NOTE 18 - SUCCESSOR AGENCY TRUST FUND FOR ASSETS OF FORMER REDEVELOPMENT On December 29, 2011, the California Supreme Court upheld AB 1X26 (“the Bill”) that provides for the dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of the City of Santa Monica that previously reported a redevelopment agency as a blended component unit.
The Bill provides that upon dissolution of a redevelopment agency (RDA), either the sponsoring city or another unit of local government will agree to serve as the “successor agency” to hold the former RDA’s non-housing assets until they are distributed to other units of state and local government and all enforceable obligations have been paid. In accordance with the Bill, the successor agency is a separate legal entity from the sponsoring city or other local government unit. The Bill also provides for the transfer of the former RDA's housing assets to the City, acting in its municipal capacity.
On January 10, 2012, the City Council elected to become the Successor Agency for the Redevelopment Agency of the City of Santa Monica in accordance with the Bill as part of City resolution number 10647.
In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on December 29, 2011) all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity as of February 1, 2012. The assets and activities of the dissolved redevelopment agency are reported in a privatepurpose trust fund in the financial statements of the City.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 17 - INTERFUND TRANSACTIONS (CONTINUED)
133
4.C.a
Packet Pg. 448 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for A. Cash and Investments
Cash and investments as of June 30, 2025 are classified in the accompanying financial statements as follows:
Statement of Fiduciary Net Position:
Restricted cash and investments $ 4,149,872
Restricted cash and investments with fiscal agent 7,436,122 Total cash and investments $ 11,585,994
Investments of the Successor Agency are governed by Government Code Section 53601 and the City’s Investment Policy, which restrict the term and types of investments that can be made. For fair value, authorized investments, disclosures relating to interest rate and credit risk, see Note 2.
B. Successor Agency Long-term Liabilities
Changes in long-term liabilities:
Long-term liability activity for the fiscal year ended June 30, 2025, was as follows:
Amount Amount
Balance Balance Due Within Due Beyond
June 30, 2024 Additions Deletions June 30, 2025 One Year One Year Loans and notes payable
from direct borrowings $ 34,651,764 $ - $ 937,469 $ 33,714,295 $ 1,001,383 $ 32,712,912 Term loan from direct borrowings 13,636,364 - 3,030,303 10,606,061 3,030,303 7,575,758 Tax allocation bonds 63,860,000 - 3,390,000 60,470,000 3,545,000 56,925,000 Less: deferred amounts
For issuance discounts (40,417) - (8,083) (32,334) - (32,334) For issuance premiums 232,149 - 13,655 218,494 - 218,494 Total $ 112,339,860 $ - $ 7,363,344 $ 104,976,516 $ 7,576,686 $ 97,399,830
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 18 - SUCCESSOR AGENCY TRUST FUND FOR ASSETS OF FORMER REDEVELOPMENT (CONTINUED)
134
4.C.a
Packet Pg. 449 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for A summary of long-term bonds and loans outstanding at year-end is as follows:
Final
Original Maturity Interest Balance at
Date of issue issue Date rate June 30, 2025
Tax allocation bonds:
Earthquake Recovery Project 2011 * June 7, 2011 $41,050,000 July 1, 2042 5.00-5.875% $ 41,050,000 Earthquake Recovery Project Refunding 2006 * April 27, 2006 $64,720,000 July 1, 2029 4.00-5.50% 19,420,000 Subtotal tax allocation bonds 60,470,000
Loan and notes from direct borrowings:
Bank of America Term Loan (1) * May 1, 2008 $50,000,000 July 15, 2028 Fed rate plus
1.7% 10,606,061
Promissory notes payable to others (2) * Nov 1, 2010 $42,500,000 Jan 1, 2042 6.8% 33,714,295 Subtotal loans and notes 44,320,356
Total $ 104,790,356
*Final and conclusive determination received from the Department of Finance (1) To fund low moderate income housing projects
(2) For purchase of real estate
Annual debt service requirements to maturity are as follows:
Fiscal Year Loans and notes payable
Ending Tax allocation bonds from direct borrowings Total June 30 Principal Interest Principal Interest Principal Interest 2026 $ 3,545,000 $ 3,085,983 $ 4,031,687 $ 2,501,788 $ 7,576,687 $ 5,587,771 2027 3,705,000 2,922,858 4,099,960 2,370,960 7,804,960 5,293,818 2028 3,870,000 2,750,485 4,172,889 2,235,478 8,042,889 4,985,963 2029 4,050,000 2,560,225 2,735,638 2,095,109 6,785,638 4,655,334 2030 4,250,000 2,360,694 1,403,698 1,996,301 5,653,698 4,356,995 2031-2035 12,475,000 9,769,106 8,691,397 8,408,602 21,166,397 18,177,708 2036-2040 16,395,000 5,714,778 12,659,759 4,940,240 29,054,759 10,655,018 2041-2044 12,180,000 1,026,666 6,525,328 674,671 18,705,328 1,701,337 Totals $ 60,470,000 $ 30,190,795 $ 44,320,356 $ 25,223,149 $ 104,790,356 $ 55,413,944 The Successor Agency’s outstanding loan of $10,606,061 from a direct borrowing from Bank of America contains a provision that, upon default, increases the interest rate by 2.0% with the total interest rate not to exceed 12.0%.
The Successor Agency’s $60,470,000 of outstanding tax allocation bonds agreements contain provisions that in the event of default the majority of the bondholders can declare the principal balance plus any accrued interest be immediately payable.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 18 - SUCCESSOR AGENCY TRUST FUND FOR ASSETS OF FORMER REDEVELOPMENT (CONTINUED)
135
4.C.a
Packet Pg. 450 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for The Successor Agency’s outstanding loan of $33,714,295 from a direct borrowing contains a provision that, upon default, the lender may, at its option, increase the interest rate by 5% over the rates otherwise provided for in the agreement, but in no event shall that the rate exceed 12.0% per annum. Additionally, upon default, the agreement allows the lender, at its option, to take one more action including the requirement for the entire amount due to be paid immediately and without prior notice.
C. Bank of America Term Loan
The Successor Agency has a term loan from Bank of America. Interest on the loan is LIBOR + 1.25%. In light of the discontinuation of the publication of USD LIBOR, the Successor Agency was notified by Bank of America that as of July 1, 2023, the interest rate on the term loan will reset to the Secured Overnight Financing Rate + 1.7%, following the USD LIBOR cessation on June 30, 2023.
D. Pledged Revenue
The Former Redevelopment Agency had a number of debt issues that were assumed by the Successor Agency that involve the pledging of revenues. The amounts and terms of the remainder of these commitments and the purposes for which the proceeds of the debt issuances are utilized are indicated in the summary of long-term bonds and loans and notes outstanding at year-end presented in this note. AB1X26 only allows sufficient tax revenues to be allocated to the Successor Agency in an amount equal to pay debt service that is deemed to be an enforceable obligation and debt service payments as a percentage of the pledged gross revenue (net of certain expenses where so specified in debt covenants) will always be 100%.
These percentages also approximate the relationship of debt service to pledged revenue for the remainder of the term of the commitment.
Annual amount of Annual debt service
pledged revenue payments (of all Debt service as a Future amount (net of expenses, debt secured by this percentage of of pledged where required) revenue) pledged revenue revenue
Description of pledged revenue/debt:
Tax increment
Earthquake Recovery Project Refunding 2006 $ 4,448,333 $ 4,448,333 100 % $ 21,788,181 Earthquake Recovery Project 2011 2,262,413 2,262,413 100 % 68,872,613 Note Payable to Others 3,300,000 3,300,000 100 % 58,499,995 Bank of America Term Loan 3,774,306 3,774,306 100 % 11,043,509 Note 19 - Restatements
NOTE 19 - RESTATEMENTS
Change in Accounting Principle
For fiscal year ended June 30, 2025, the City implemented GASB Statement No. 101, Compensated Absences, which updated the recognition and measurement guidance for compensated absences, to align recognition and measurement under a single unified model to better meet the needs of financial statement users; refer to note 1.
The effect of the implementation of the change in accounting principle is shown in the table below.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 18 - SUCCESSOR AGENCY TRUST FUND FOR ASSETS OF FORMER REDEVELOPMENT (CONTINUED)
136
4.C.a
Packet Pg. 451 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Governmental Business-Type
Activities Activities
Beginning Net Position, as previously reported $ 930,859,064 $ 565,220,656 Change in accounting principle (4,212,736) (909,282)
Beginning Net Position, as restated $ 926,646,328 $ 564,311,374 Business Type
Water Fund
Wastewater
Fund Airport
Resource
Recovery
and
Recycling Big Blue Bus Pier Cemetery
Beginning Net Position,
as previously reported $ 60,195,349 $ 206,640,289 $ 38,184,079 $ 295,382 $ 160,742,501 $ 27,753,708 $ 4,399,204 Change in
accounting principle (122,972) (56,229) (29,320) (107,049) (495,558) (56,531) (14,385) Beginning Net Position,
as restated $ 60,072,377 $ 206,584,060 $ 38,154,759 $ 188,333 $ 160,246,943 $ 27,697,177 $ 4,384,819 Internal Service Funds
Vehicle Self-insurance Risk
Management
Management
Admin
Beginning Net Position, as previously reported $ 57,479,752 $ 165,964 Change in accounting principle (27,238) (52,038)
Beginning Net Position, as restated $ 57,452,514 $ 113,926 Note 20 - Subsequent Events
NOTE 20 - SUBSEQUENT EVENTS
The City evaluated subsequent events for recognition and disclosure through March 3, 2026, the date on which these financial statements were available to be issued. Management concluded that no material subsequent events have occurred since June 30, 2025, that required recognition or disclosure in these financial statements.
CITY OF SANTA MONICA, CALIFORNIA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 19 - RESTATEMENTS (CONTINUED)
137
4.C.a
Packet Pg. 452 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Required Supplementary Information
138
4.C.a
Packet Pg. 453 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund
REVENUES
Property taxes $ 85,094,430 $ 86,296,573 $ 85,970,092 $ - $ 85,970,092 $ (326,481) Sales and uses tax 79,264,256 75,301,043 72,412,063 - 72,412,063 (2,888,980) Transient occupancy taxes 73,661,453 70,031,671 63,318,760 - 63,318,760 (6,712,911) Utility user taxes 35,953,000 36,269,200 36,618,147 - 36,618,147 348,947 Real property transfer fees 12,000,000 12,000,000 10,215,627 - 10,215,627 (1,784,373) Business license taxes 34,964,500 38,164,500 38,479,130 - 38,479,130 314,630 Parking facility taxes 11,535,000 14,279,272 14,124,830 - 14,124,830 (154,442) Other taxes 310,000 160,000 151,067 - 151,067 (8,933)
Licenses and permits 36,935,025 36,611,594 34,728,701 - 34,728,701 (1,882,893) Intergovernmental 2,293,025 2,293,025 1,779,337 - 1,779,337 (513,688) Charges for services 55,355,259 54,065,846 56,378,405 - 56,378,405 2,312,559 Fines and forfeitures 13,406,910 14,442,020 11,214,264 - 11,214,264 (3,227,756) Investment income 3,700,000 3,700,000 13,401,437 - 13,401,437 9,701,437 Rental income 8,284,135 8,284,135 7,382,215 - 7,382,215 (901,920) Settlement income - - 22,797 - 22,797 22,797
Other revenue 6,014,887 4,057,137 3,294,788 - 3,294,788 (762,349) Total revenues 458,771,880 455,956,016 449,491,660 - 449,491,660 (6,464,356)
EXPENDITURES
Current:
General government
City council 934,133 942,711 865,030 - 865,030 77,681
City manager 7,044,583 7,533,975 6,618,197 90,733 6,708,930 825,045 Record and election services 3,746,095 3,802,918 3,220,276 - 3,220,276 582,642 Finance 13,292,769 13,914,871 12,363,048 513,912 12,876,960 1,037,911 City attorney 14,019,634 16,105,109 16,160,472 12,175 16,172,647 (67,538) Human resources 6,604,690 7,108,981 5,655,327 46,732 5,702,059 1,406,922 Information services 13,781,724 14,654,344 12,058,747 33,169 12,091,916 2,562,428 Public works 12,584,267 16,078,599 11,979,265 27,665 12,006,930 4,071,669 Other 11,745,274 12,508,849 8,239,658 558,811 8,798,469 3,710,380 Total general government 83,753,169 92,650,357 77,160,020 1,283,197 78,443,217 14,207,140 Public safety
City manager 6,544,945 6,833,574 6,959,720 - 6,959,720 (126,146) Police 118,808,313 121,041,174 124,199,211 20,961 124,220,172 (3,178,998) Fire 55,021,452 55,120,390 60,337,853 23,815 60,361,668 (5,241,278) Total public safety 180,374,710 182,995,138 191,496,784 44,776 191,541,560 (8,546,422) Original
budget
Final
budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary basis
Variance with
final budget
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual General Fund
For the Year Ended June 30, 2025
139
4.C.a
Packet Pg. 454 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual General services
Public works 54,710,021 55,937,456 53,364,111 362,234 53,726,345 2,211,111 Mobility 26,253,796 27,769,811 25,502,362 501,386 26,003,748 1,766,063 Total general services 80,963,817 83,707,267 78,866,473 863,620 79,730,093 3,977,174 Housing and community services
Housing and community services 34,321,659 36,914,333 22,500,327 571,353 23,071,680 13,842,653 Other 30,627,939 29,692,189 38,771,249 4,704,545 43,475,794 (13,783,605) Total housing and community services 64,949,598 66,606,522 61,271,576 5,275,898 66,547,474 59,048 Library
Library 11,685,698 11,787,811 11,466,446 128,962 11,595,408 192,403 Total library 11,685,698 11,787,811 11,466,446 128,962 11,595,408 192,403 Community development
Community development 23,471,474 23,788,260 21,866,928 238,574 22,105,502 1,682,758 Total community development 23,471,474 23,788,260 21,866,928 238,574 22,105,502 1,682,758 Capital outlay 1,901,625 19,099,792 3,149,907 - 3,149,907 15,949,885 Principal - - 1,473,769 - 1,473,769 (1,473,769)
Interest - - 258,873 8,895,797 9,154,670 (9,154,670)
Total expenditures 447,100,091 480,635,147 447,010,776 16,730,824 463,741,600 16,893,547 Excess (deficiency) of revenues over (under) expenditures 11,671,789 (24,679,131) 2,480,884 (16,730,824) (14,249,940) 10,429,191
OTHER FINANCING SOURCES (USES)
Transfers in 14,567,448 14,827,416 15,094,488 - 15,094,488 267,072 Transfers out (30,794,518) (30,326,643) (26,110,718) - (26,110,718) 4,215,925 Debt Issuance Proceeds - - 1,988,506 - 1,988,506 1,988,506 Total other financing sources (uses) (16,227,070) (15,499,227) (9,027,724) - (9,027,724) 6,471,503 Net change in fund balance (4,555,281) (40,178,358) (6,546,840) (16,730,824) (23,277,664) $ 16,900,694 Fund balance-beginning 174,599,571 174,599,571 174,599,571 - 174,599,571 - Fund balance-ending $ 170,044,290 $ 134,421,213 $ 168,052,731 $ (16,730,824) $ 151,321,907 $ 16,900,694 Original
budget
Final
budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary basis
Variance with
final budget
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual General Fund
For the Year Ended June 30, 2025
140
4.C.a
Packet Pg. 455 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Special Revenue Source Fund
REVENUES
Intergovernmental 547,516 547,516 2,389,556 - 2,389,556 1,842,040 Charges for services $ 678,107 $ 678,107 $ 584,466 $ - $ 584,466 $ (93,641) Investment income - - 1,040,924 - 1,040,924 1,040,924
Other revenue 3,710,994 3,824,658 3,240,215 - 3,240,215 (584,443) Total revenues 4,936,617 5,050,281 7,255,161 - 7,255,161 2,204,880
EXPENDITURES
Public safety
Police 4,568 730,863 42,266 - 42,266 688,597
Fire 15,606 15,606 7,723 - 7,723 7,883
Total public safety 20,174 746,469 49,989 - 49,989 696,480 General services
Public works - - - 804,665 804,665 (804,665)
Mobility 337,644 756,697 296,207 45,750 341,957 414,740 Total general services 337,644 756,697 296,207 850,415 1,146,622 (389,925) Housing and community services
Housing and community services 3,485,690 3,607,439 2,160,317 202,390 2,362,707 1,244,732 Other 350,915 359,590 202,888 - 202,888 156,702
Total housing and community services 3,836,605 3,967,029 2,363,205 202,390 2,565,595 1,401,434 Community development
Community development - 44,000 6,400 37,600 44,000 -
Total community development - 44,000 6,400 37,600 44,000 - Capital outlay 900,000 14,436,546 5,291,225 3,172,735 8,463,960 5,972,586 Total expenditures 5,094,423 19,950,741 8,007,026 4,263,140 12,270,166 7,680,575 Excess (deficiency) of revenues over (under) expenditures (157,806) (14,900,460) (751,865) (4,263,140) (5,015,005) 9,885,455
OTHER FINANCING SOURCES (USES)
Transfers in 9,357,500 8,889,625 4,576,471 - 4,576,471 (4,313,154) Transfers out (3,049,744) (3,049,744) (2,972,841) - (2,972,841) 76,903 Total other financing sources (uses) 6,307,756 5,839,881 1,603,630 - 1,603,630 (4,236,251) Net change in fund balance 6,149,950 (9,060,579) 851,765 (4,263,140) (3,411,375) 5,649,204 Fund balance-beginning 189,472,197 189,472,197 189,472,197 - 189,472,197 - Fund balance-ending $ 195,622,147 $ 180,411,618 $ 190,323,962 $ (4,263,140) $ 186,060,822 $ 5,649,204 Original
budget
Final
budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary basis
Variance with
final budget
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Special Revenue Source Fund
For the Year Ended June 30, 2025
141
4.C.a
Packet Pg. 456 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Measure GS Fund Original
budget
Final
budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary
basis
Variance with
final budget
REVENUES
Real property transfer fees $ - $ - $ 24,797,325 $ - $ 24,797,325 $ 24,797,325 Total revenues - - 24,797,325 - 24,797,325 24,797,325
EXPENDITURES
Current:
Housing and community services
Housing and community services - 17,057,122 10,000,000 - 10,000,000 7,057,122 Total housing and community services - 17,057,122 10,000,000 - 10,000,000 7,057,122 Total expenditures - 17,057,122 10,000,000 - 10,000,000 7,057,122 Net change in fund balance - (17,057,122) 14,797,325 - 14,797,325 31,854,447 Fund balance-beginning 18,243,200 18,243,200 18,243,200 - 18,243,200 - Fund balance-ending $ 18,243,200 $ 1,186,078 $ 33,040,525 $ - $ 33,040,525 $ 31,854,447
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Measure GS Fund
For the Year Ended June 30, 2025
142
4.C.a
Packet Pg. 457 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Low and Moderate Income Housing Asset Fund Original
budget
Final
budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary
basis
Variance with
final budget
REVENUES
Investment income $ 100,000 $ 100,000 $ 769,388 $ - $ 769,388 $ 669,388 Other revenue 400,000 400,000 206,700 - 206,700 (193,300) Total revenues 500,000 500,000 976,088 - 976,088 476,088
EXPENDITURES
Current:
Community development
Community development - - 162 - 162 (162)
Total community development - - 162 - 162 (162)
Total expenditures - - 162 - 162 (162)
Excess (deficiency) of revenues over (under) expenditures 500,000 500,000 975,926 - 975,926 475,926
OTHER FINANCING SOURCES (USES)
Transfers out (389,364) (389,364) (146,691) - (146,691) 242,673 Total other financing sources (uses) (389,364) (389,364) (146,691) - (146,691) 242,673 Net change in fund balance 110,636 110,636 829,235 - 829,235 718,599 Fund balance-beginning 67,325,089 67,325,089 67,325,089 - 67,325,089 - Fund balance-ending $ 67,435,725 $ 67,435,725 $ 68,154,324 $ - $ 68,154,324 $ 718,599
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Low and Moderate Income Housing Asset Special Revenue Fund For the Year Ended June 30, 2025
143
4.C.a
Packet Pg. 458 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual This page left intentionally blank.
144
4.C.a
Packet Pg. 459 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Note to Required Supplementary Information
The City Council is required to adopt an annual budget resolution by June 30 each fiscal year for the General Fund, each special revenue fund and each capital projects fund, except the Rent Control Fund and the Asset Seizure Fund. The legal level of budgetary control is the department level. The City Council also approves annual operating budgets for the City’s proprietary and internal service funds to facilitate management evaluation and control.
The budget is prepared on a non-GAAP budgetary basis, which considers encumbrances outstanding at year-end as an expenditure of that year. Encumbrances outstanding at the beginning of a fiscal year, which were recognized as budgetary expenditures in the prior year, are recognized as GAAP-basis expenditures but not as budgetary expenditures unless re-appropriated. It is the City’s policy to only re-appropriate capital encumbrances and unencumbered balances of specific capital appropriations. Appropriations in governmental funds outstanding at year-end lapse, except for encumbered amounts, for which fund balances are restricted, committed or assigned at year-end for governmental funds.
The actual results of operations on a budgetary basis compared to the appropriations adopted by the City Council for budgeted major governmental funds are presented as required supplementary information. The comparisons of actual results with the budget for nonmajor funds are presented as supplementary information in the combining schedules.
The overages in the Fire Department were primarily due to unanticipated staffing shortages from retirements, workers comp injuries and Santa Monica Paid Parental Leave (SMPPL). These shortages are continued drivers of higher than budgeted overtime costs. This is a result of Santa Monica Fire Department's constant staffing requirements, which aims to ensure readiness to respond to emergencies 24 hours a day, 7 days a week with a fixed level of available staffing. Additionally, the Palisades Fire increased overtime for the Fire Department as did assisting with 20 plus wildfires as part of mutual aid strike team deployments, for which the City is fully reimbursed – this overtime is unbudgeted as it is difficult to predict from year to year. The overages in the Police Department were driven by several large scale emergencies/activations primarily the Palisades Fire where a portion of the City was evacuated and Police provided around the clock security.
The City did not adopt budgets for the Asset Seizure, Rent Control, Debt Service, and Permanent Funds.
The following funds had expenditures in excess of appropriations for the year ended June 30, 2025:
Budget Actual Variance
Housing Authority $ 29,499,325 $ 30,683,954 $ (1,184,629) COPS 131,037 281,714 (150,677)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Required Supplementary Information
For the Year Ended June 30, 2025
BUDGETARY AND LEGAL COMPLIANCE
145
4.C.a
Packet Pg. 460 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Schedule of Changes in the Net Pension Liability and Related Ratios 2025 2024 2023 2022
TOTAL PENSION LIABILITY
Service cost $ 25,273,992 $ 23,971,244 $ 23,414,895 $ 23,008,107 Interest on total pension liability 95,797,769 91,665,614 88,372,749 88,117,804 Changes in benefit terms - 1,091,674 - -
Changes in assumptions - - 43,606,082 -
Difference between expected and actual experience 11,462,303 (4,528) (43,993,486) (6,035,074) Benefit payments, including refunds of employee contributions (69,163,727) (66,564,697) (64,295,906) (60,892,615) Net change in total pension liability 63,370,337 50,159,307 47,104,334 44,198,222 Total pension liability-beginning 1,398,856,027 1,348,696,720 1,301,592,386 1,257,394,164 Total pension liability-ending (a) 1,462,226,364 1,398,856,027 1,348,696,720 1,301,592,386
PLAN FIDUCIARY NET POSITION
Contributions-employer 39,014,371 39,554,659 36,918,832 35,463,537 Contributions-employee 11,235,624 9,775,361 9,218,079 9,089,233 Net investment income 107,381,436 66,936,805 (90,335,494) 223,034,645 Benefit payments, including refunds of employee contributions (69,163,727) (66,564,697) (64,295,906) (60,892,615) Net plan to plan resource movement - - (1,661) -
Administrative expense (924,618) (799,629) (745,442) (989,932) Other miscellaneous income/(expense) - - - -
Net change in fiduciary net position 87,543,086 48,902,499 (109,241,592) 205,704,868 Plan fiduciary net position-beginning 1,136,311,447 1,087,408,948 1,196,650,540 990,945,672 Plan fiduciary net position-ending (b) 1,223,854,533 1,136,311,447 1,087,408,948 1,196,650,540 Net pension liability/(asset) (a) - (b) $ 238,371,831 $ 262,544,580 $ 261,287,772 $ 104,941,846 Plan fiduciary net position as a percentage of the total pension liability 83.70% 81.23% 80.63% 91.94%
Covered-employee payroll $ 149,900,163 $ 144,362,063 $ 130,526,018 $ 121,534,739 Plan net pension liability/(asset) as a percentage of coveredemployee payroll 159.02% 181.87% 200.18% 86.35% Notes to Schedule of Changes in the Net Pension Liability and Related Ratios:
Benefit Changes: There were no changes in benefits.
Changes of Assumptions:
In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Actuarial Assumptions December 2017. There were no changes in the discount rate.
In 2017, the discount rate was reduced from 7.65% to 7.15%.
In 2016, there were no changes.
In 2015, amounts reported reflect an adjustment of the discount rate from 7.5% (net of administrative expense) to 7.65% reduction for pension plan administrative expense).
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Changes in the Net Pension Liability and Related Ratios Miscellaneous Plan
As of June 30, for the Last Ten Fiscal Years
146
4.C.a
Packet Pg. 461 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for 2021 2020 2019 2018 2017 2016
$ 26,940,522 $ 27,751,083 $ 27,141,560 $ 27,164,949 $ 24,044,347 $ 23,584,538 84,780,608 81,225,010 76,677,361 73,555,405 70,686,179 67,091,447 - - - - - -
- - (8,896,401) 62,254,788 - (16,726,947)
(7,677,266) 6,325,353 (5,319,485) (14,768,176) (7,701,743) (12,672,814) (53,198,960) (49,130,828) (44,560,263) (41,097,884) (36,967,774) (35,460,612) 50,844,904 66,170,618 45,042,772 107,109,082 50,061,009 25,815,612 1,206,549,260 1,140,378,642 1,095,335,870 988,226,788 938,165,779 912,350,167 1,257,394,164 1,206,549,260 1,140,378,642 1,095,335,870 988,226,788 938,165,779 39,789,326 32,912,163 29,338,109 56,350,053 28,154,218 28,349,184 11,287,483 11,502,697 11,221,260 11,398,672 11,256,065 10,754,206 48,650,608 58,848,094 70,094,677 82,395,628 3,759,440 15,956,734 (53,198,960) (49,130,828) (44,560,263) (41,097,884) (36,967,774) (35,460,612) - (1,658) (2,066) (61,526) (767) (909)
(1,333,238) (636,732) (1,293,232) (1,065,974) (436,504) (806,463) - 2,066 (2,455,869) - - -
45,195,219 53,495,802 62,342,616 107,918,969 5,764,678 18,792,140 945,750,453 892,254,651 829,912,035 721,993,066 716,228,388 697,436,244 990,945,672 945,750,453 892,254,651 829,912,035 721,993,066 716,228,384 $ 266,448,492 $ 260,798,807 $ 248,123,991 $ 265,423,835 $ 266,233,722 $ 221,937,395
78.81% 78.38% 78.24% 75.77% 73.06% 76.34%
$ 152,120,397 $ 154,765,955 $ 149,416,791 $ 147,371,283 $ 142,942,436 $ 137,199,170 175.16% 168.51% 166.06% 180.11% 186.25% 161.76%
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Changes in the Net Pension Liability and Related Ratios Miscellaneous Plan
As of June 30, for the Last Ten Fiscal Years
147
4.C.a
Packet Pg. 462 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Schedule of Changes in the Net Pension Liability/(Asset) and Related Ratios - Police Safety Plan 2025 2024 2023 2022
TOTAL PENSION LIABILITY
Service cost $ 12,586,422 $ 11,160,753 $ 11,983,989 $ 10,894,969 Interest on total pension liability 42,647,169 39,811,421 38,056,896 36,994,605 Changes of benefit terms - 187,484 - -
Changes of assumptions - - 18,737,902 -
Difference between expected and actual experience 20,301,875 4,636,052 (6,104,197) 1,492,957 Benefit payments, including refunds of employee contributions (31,610,982) (30,167,180) (27,882,633) (25,968,665) Net change in total pension liability 43,924,484 25,628,530 34,791,957 23,413,866 Total pension liability-beginning 607,285,325 581,656,795 546,864,838 523,450,972 Total pension liability-ending (a) 651,209,809 607,285,325 581,656,795 546,864,838
PLAN FIDUCIARY NET POSITION
Contributions-employer 23,779,512 21,964,048 20,119,437 19,121,459 Contributions-employee 4,364,447 3,604,634 3,318,392 3,832,845 Net investment income 43,424,354 26,969,215 (35,957,533) 88,656,069 Benefit payments, including refunds of employee contributions (31,610,982) (30,167,180) (27,882,633) (25,968,665) Net plan to plan resource movement - - 1,661 -
Administrative expense (371,949) (319,920) (296,366) (390,087) Other miscellaneous income/(expense) - - - -
Net change in fiduciary net position 39,585,382 22,050,797 (40,697,042) 85,251,621 Plan fiduciary net position-beginning 457,107,017 435,056,220 475,753,262 390,501,641 Plan fiduciary net position-ending (b) 496,692,399 457,107,017 435,056,220 475,753,262 Net pension liability/(asset) (a) - (b) $ 154,517,410 $ 150,178,308 $ 146,600,575 $ 71,111,576 Plan fiduciary net position as a percentage of the total pension liability 76.27% 75.27% 74.80% 87.00%
Covered-employee payroll $ 39,757,015 $ 41,404,174 $ 35,270,579 $ 32,619,907 Plan net pension liability/(asset) as a percentage of coveredemployee payroll 388.65% 362.71% 415.65% 218.00% Notes to Schedule of Changes in the Net Pension Liability and Related Ratios:
Benefit Changes: In 2022, SB 1168 increased the standard retiree lump sum death benefit from $500 to $2,000 for any death benefit occurring on or after July 1, 2023. The impact, if any, is included in the changes of benefit terms Changes of Assumptions:
In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in the discount rate.
In 2017, the discount rate was reduced from 7.65% to 7.15%.
In 2016, there were no changes.
In 2015, amounts reported reflect an adjustment of the discount rate from 7.5% (net of administrative expense) to 7.65% (without a reduction for pension plan administrative expense).
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Changes in the Net Pension Liability/(Asset) and Related Ratios Police Safety Plan
As of June 30, for the Last Ten Fiscal Years
148
4.C.a
Packet Pg. 463 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for 2021 2020 2019 2018 2017 2016
$ 11,086,298 $ 10,255,581 $ 10,217,345 $ 9,940,041 $ 8,471,379 $ 8,324,522 35,384,916 33,763,191 32,412,581 31,045,060 29,901,653 28,537,027 - - - - - -
- - (2,129,031) 26,521,719 - (7,150,335)
2,033,685 (1,686,562) 587,060 (3,121,761) (1,152,112) (501,077) (24,742,085) (22,830,569) (21,315,119) (19,596,092) (18,767,835) (17,121,429) 23,762,814 19,501,641 19,772,836 44,788,967 18,453,085 12,088,708 499,688,158 480,186,517 460,413,681 415,624,714 397,171,629 385,082,921 523,450,972 499,688,158 480,186,517 460,413,681 415,624,714 397,171,629 19,904,356 15,926,339 13,774,479 26,559,693 12,697,470 13,033,273 3,493,416 3,118,363 3,021,783 2,827,317 2,753,594 2,695,506 18,812,931 23,179,043 28,113,907 32,951,701 1,516,091 6,513,781 (24,742,085) (22,830,569) (21,315,119) (19,596,092) (18,767,835) (17,121,429) - - (823) 61,526 767 -
(526,627) (252,921) (517,855) (428,091) (177,915) (328,610) - 823 (983,415) - - -
16,941,991 19,141,078 22,092,957 42,376,054 (1,977,828) 4,792,521 373,559,650 354,418,572 332,325,615 289,949,561 291,927,389 287,134,868 390,501,641 373,559,650 354,418,572 332,325,615 289,949,561 291,927,389 $ 132,949,331 $ 126,128,508 $ 125,767,945 $ 128,088,066 $ 125,675,153 $ 105,244,240
74.60% 74.76% 73.81% 72.18% 69.76% 73.50%
$ 33,829,867 $ 34,111,685 $ 31,286,093 $ 31,769,364 $ 30,592,273 $ 29,176,438 392.99% 369.75% 401.99% 403.18% 410.81% 360.72%
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Changes in the Net Pension Liability/(Asset) and Related Ratios Police Safety Plan
As of June 30, for the Last Ten Fiscal Years
149
4.C.a
Packet Pg. 464 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Schedule of Changes in the Net Pension Liability/(Asset) and Related Ratios - Police Safety Plan 2025 2024 2023 2022
TOTAL PENSION LIABILITY
Service cost $ 6,008,744 $ 5,629,571 $ 5,374,830 $ 4,961,970 Interest on total pension liability 21,136,774 20,037,805 19,255,577 19,058,867 Changes of benefit terms - 83,724 - -
Changes of assumptions - - 7,868,131 -
Difference between expected and actual experience 6,411,841 2,094,906 (4,732,508) 1,566,296 Benefit payments, including refunds of employee contributions (16,638,419) (16,045,022) (15,154,515) (14,553,773) Net change in total pension liability 16,918,940 11,800,984 12,611,515 11,033,360 Total pension liability-beginning 305,233,049 293,432,065 280,820,550 269,787,190 Total pension liability-ending (a) 322,151,989 305,233,049 293,432,065 280,820,550
PLAN FIDUCIARY NET POSITION
Contributions-employer 10,546,636 10,601,782 9,304,903 8,636,700 Contributions-employee 2,152,896 2,001,163 1,747,250 1,752,072 Net investment income 20,141,728 12,644,067 (17,088,459) 42,296,327 Benefit payments, including refunds of employee contributions (16,638,419) (16,045,022) (15,154,515) (14,553,773) Net plan to plan resource movement - - - -
Administrative expense (173,875) (150,477) (140,762) (187,821) Other miscellaneous income/(expense) - - - -
Net change in fiduciary net position 16,028,966 9,051,513 (21,331,583) 37,943,505 Plan fiduciary net position-beginning 213,683,523 204,632,010 225,963,593 188,020,088 Plan fiduciary net position-ending (b) 229,712,489 213,683,523 204,632,010 225,963,593 Net pension liability/(asset) (a) - (b) $ 92,439,500 $ 91,549,526 $ 88,800,055 $ 54,856,957 Plan fiduciary net position as a percentage of the total pension liability 71.31% 70.01% 69.74% 80.47%
Covered-employee payroll $ 23,423,035 $ 22,535,670 $ 21,410,869 $ 18,953,091 Plan net pension liability/(asset) as a percentage of coveredemployee payroll 394.65% 406.24% 414.74% 289.44% Notes to Schedule of Changes in the Net Pension Liability and Related Ratios:
Benefit Changes: In 2022, SB 1168 increased the standard retiree lump sum death benefit from $500 to $2,000 for any death benefit occurring on or after July 1, 2023. The impact, if any, is included in the changes of benefit terms Changes of Assumptions:
In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and In 2017, the discount rate was reduced from 7.65% to 7.15%.
In 2016, there were no changes.
In 2015, amounts reported reflect an adjustment of the discount rate from 7.5% (net of administrative expense) to 7.65%
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Changes in the Net Pension Liability/(Asset) and Related Ratios Fire Safety Plan
As of June 30, for the Last Ten Fiscal Years
150
4.C.a
Packet Pg. 465 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for 2021 2020 2019 2018 2017 2016
$ 5,050,337 $ 4,994,560 $ 4,738,879 $ 4,623,044 $ 3,778,677 $ 3,766,398 18,311,217 17,610,724 16,808,267 16,174,733 15,730,320 15,338,448 - - - - - -
- - (1,206,898) 13,218,472 - (3,653,466)
923,359 2,419,289 1,380,602 (943,161) (2,919,523) (515,792) (14,300,274) (13,218,568) (12,523,618) (11,813,956) (11,409,171) (10,728,684) 9,984,639 11,806,005 9,197,232 21,259,132 5,180,303 4,206,904 259,802,551 247,996,546 238,799,314 217,540,182 212,359,879 208,152,975 269,787,190 259,802,551 247,996,546 238,799,314 217,540,182 212,359,879 10,703,394 7,213,925 6,276,049 10,375,991 5,320,402 5,142,818 1,752,804 1,690,559 1,661,415 1,565,941 1,479,400 1,375,301 9,068,546 11,434,835 13,896,417 16,797,654 706,789 3,458,100 (14,300,274) (13,218,568) (12,523,618) (11,813,956) (11,409,171) (10,728,684) - - (405) - - -
(255,237) (124,209) (257,882) (219,672) (93,112) (171,948) - 405 (489,721) - - -
6,969,233 6,996,947 8,562,255 16,705,958 (3,995,692) (924,413) 181,050,855 174,053,908 165,491,653 148,785,695 152,781,387 153,705,800 188,020,088 181,050,855 174,053,908 165,491,653 148,785,695 152,781,387 $ 81,767,102 $ 78,751,696 $ 73,942,638 $ 73,307,661 $ 68,754,487 $ 59,578,492
69.69% 69.69% 70.18% 69.30% 68.39% 71.94%
$ 19,108,351 $ 18,795,618 $ 17,478,610 $ 16,861,345 $ 15,701,959 $ 15,565,558 427.91% 418.99% 423.05% 434.77% 437.87% 382.76%
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Changes in the Net Pension Liability/(Asset) and Related Ratios Fire Safety Plan
As of June 30, for the Last Ten Fiscal Years
151
4.C.a
Packet Pg. 466 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Schedules of Contributions - Pension Plans
2025 $ 42,858,534 $ (42,858,534) $ - $ 149,900,163 28.59% 2024 38,984,554 (38,984,554) - 144,362,063 27.00%
2023 40,771,715 (39,558,900) 1,212,815 (1) 130,526,018 30.31% 2022 41,185,704 (36,904,394) 4,281,310 (1) 121,534,739 30.37% 2021 40,186,749 (35,458,470) 4,728,279 (1) 121,619,165 29.16% 2020 36,620,603 (39,786,395) (3,165,792) 152,120,397 26.15% 2019 32,707,844 (32,912,563) (204,719) 154,765,955 21.27% 2018 29,021,468 (29,331,033) (309,565) 149,416,791 19.63% 2017 29,097,156 (56,352,251) (27,255,095) 147,371,283 38.24% 2016 27,377,582 (28,152,578) (774,996) 142,942,436 19.70% Contribution as a
Fiscal Year Actuarially Actual Contribution Covered % of Covered Ending Determined Employer Deficiency Employee Employee June 30, Contribution Contributions (Excess) Payroll Payroll Notes to Schedule:
Valuation Date Actuarially determined contribution rates are calculated as of June 30, three years prior to the end of the fiscal year in which contributions are reported.
Actuarial Cost Method Entry Age Normal
Amortization Method Level Percentage of Payroll
Asset Valuation Method Fair Value
Inflation 2.50%
Salary increases Varies by entry age and service
Payroll Growth 2.50%
Investments Rate of Return 6.80%
Retirement Age The probabilities of Retirement are based on the 2014 CalPERS Experience Study for the period from 1997 to 2011
Mortality The probabilities of mortality are based on the 2014 CalPERS Experience Study for the period from 1997 to 2011. Pre-retirement and Post-retirement mortality rates include 20 years of projected mortality improvement using Scale BB published by the Society of Actuaries.
(1) Because CalPERS bases the Actuarially Determined Contribution (ADC) on historical payroll, and the City terminated more than 200 employees on and around June of 2020, the ADC based on current actual payroll would have been much lower. This resulted in the actual contributions appearing less than the ADC. The City has made all payments required by CalPERS.
CITY OF SANTA MONICA, CALIFORNIA
Schedules of Plan Contributions - Miscellaneous Pension Plan As of June 30, For the Last Ten Fiscal Years
152
4.C.a
Packet Pg. 467 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Schedules of Plan Contributions
2025 $ 25,356,905 $ (25,356,905) $ - $ 39,757,015 63.78% 2024 23,779,512 (23,779,512) - 41,404,174 57.43%
2023 22,106,470 (21,966,216) 140,254 (1) 35,270,579 62.28% 2022 20,876,028 (20,117,871) 758,157 (1) 32,619,907 61.67% 2021 18,987,371 (19,119,800) (132,429) 33,829,867 56.52% 2020 17,488,731 (19,904,358) (2,415,627) 34,111,685 58.35% 2019 15,428,327 (15,924,164) (495,837) 31,286,093 50.90% 2018 13,453,498 (13,773,882) (320,384) 31,769,364 43.36% 2017 13,559,983 (26,557,166) (12,997,183) 30,592,273 86.81% 2016 12,327,896 (12,697,470) (369,574) 29,176,438 43.52% Contribution as a
Fiscal Year Actuarially Actual Contribution Covered % of Covered Ending Determined Employer Deficiency Employee Employee June 30, Contribution Contributions (Excess) Payroll Payroll Notes to Schedule:
Valuation Date Actuarially determined contribution rates are calculated as of June 30, three years prior to the end of the fiscal year in which contributions are reported.
Actuarial Cost Method Entry Age Normal
Amortization Method Level Percentage of Payroll
Asset Valuation Method Fair Value
Inflation 2.50%
Salary increases Varies by entry age and service
Payroll Growth 2.50%
Investments Rate of Return 6.80%
Retirement Age The probabilities of Retirement are based on the 2014 CalPERS Experience Study for the period from 1997 to 2011
Mortality The probabilities of mortality are based on the 2014 CalPERS Experience Study for the period from 1997 to 2011. Pre-retirement and Post-retirement mortality rates include 20 years of projected mortality improvement using Scale BB published by the Society of Actuaries.
(1) Because CalPERS bases the Actuarially Determined Contribution (ADC) on historical payroll, and the City terminated more than 200 employees on and around June of 2020, the ADC based on current actual payroll would have been much lower. This resulted in the actual contributions appearing less than the ADC. The City has made all payments required by CalPERS.
CITY OF SANTA MONICA, CALIFORNIA
Schedules of Plan Contributions - Safety Police Pension Plan As of June 30, For the Last Ten Fiscal Years
153
4.C.a
Packet Pg. 468 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Schedules of Plan Contributions
2025 $ 11,662,607 $ (11,662,607) $ - $ 23,423,035 49.79% 2024 10,546,636 (10,546,636) - 22,535,670 46.80%
2023 10,318,162 (10,601,782) (283,620) 21,410,869 49.52% 2022 9,544,076 (9,304,903) 239,173 (1) 19,020,772 48.92% 2021 8,801,916 (8,636,700) 165,216 (1) 18,953,091 45.57% 2020 7,971,960 (10,703,395) (2,731,435) 19,108,351 56.01% 2019 6,959,294 (7,211,427) (252,133) 18,795,618 38.37%
2018 5,884,665 (6,276,048) (391,383) 17,748,610 35.36%
2017 5,624,625 (10,372,347) (4,747,722) 16,861,345 61.52% 2016 5,185,401 (5,320,402) (135,001) 15,701,959 33.88%
Contribution as a
Fiscal Year Actuarially Actual Contribution Covered % of Covered Ending Determined Employer Deficiency Employee Employee June 30, Contribution Contributions (Excess) Payroll Payroll Notes to Schedule:
Valuation Date Actuarially determined contribution rates are calculated as of June 30, three years prior to the end of the fiscal year in which contributions are reported.
Actuarial Cost Method Entry Age Normal
Amortization Method Level Percentage of Payroll
Asset Valuation Method Fair Value
Inflation 2.50%
Salary increases Varies by entry age and service
Payroll Growth 2.50%
Investments Rate of Return 6.80%
Retirement Age The probabilities of Retirement are based on the 2014 CalPERS Experience Study for the period from 1997 to 2011
Mortality The probabilities of mortality are based on the 2014 CalPERS Experience Study for the period from 1997 to 2011. Pre-retirement and Post-retirement mortality rates include 20 years of projected mortality improvement using Scale BB published by the Society of Actuaries.
(1) Because CalPERS bases the Actuarially Determined Contribution (ADC) on historical payroll, and the City terminated more than 200 employees on and around June of 2020, the ADC based on current actual payroll would have been much lower. This resulted in the actual contributions appearing less than the ADC. The City has made all payments required by CalPERS.
CITY OF SANTA MONICA, CALIFORNIA
Schedules of Plan Contributions - Safety Fire Pension Plan As of June 30, For the Last Ten Fiscal Years
154
4.C.a
Packet Pg. 469 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for This page left intentionally blank.
155
4.C.a
Packet Pg. 470 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Schedule of Changes in the Net OPEB Liability and Related Ratios 2025 2024 2023 2022
Measurement Date 6/30/2024 6/30/2023 6/30/2022 6/30/2021
TOTAL OPEB LIABILITY
Service cost $ 1,080,743 $ 1,130,308 $ 1,491,987 $ 2,114,167 Interest on total OPEB liability 1,963,738 1,451,304 1,159,948 1,366,059 Changes in assumptions (3,205,572) (5,225,120) (5,932,712) (3,248,646) Difference between expected and actual experience - 9,825,144 - (7,573,209) Benefit payments, including refunds of employee contributions (1,665,246) (1,564,356) (1,985,799) (1,888,159) Net change in total OPEB liability (1,826,337) 5,617,280 (5,266,576) (9,229,788) Total OPEB liability-beginning 37,882,713 32,265,433 37,532,009 46,761,797 Total OPEB liability-ending (a) 36,056,376 37,882,713 32,265,433 37,532,009
PLAN FIDUCIARY NET POSITION
Contributions-employer 3,479,789 3,314,085 3,156,420 -
Net investment income 699,118 356,146 (709,369) 1,388,572 Benefit payments, including refunds of employee contributions (1,665,246) (1,564,356) (1,985,799) (1,888,159) Administrative expense (2,841) (1,958) (1,616) (2,465)
Other miscellaneous income/(expense) - - - -
Net change in fiduciary net position 2,510,820 2,103,917 459,636 (502,052) Plan fiduciary net position-beginning 8,590,018 6,486,101 6,026,465 6,528,517 Plan fiduciary net position-ending (b) 11,100,838 8,590,018 6,486,101 6,026,465 Net OPEB liability/(asset) (a) - (b) $ 24,955,538 $ 29,292,695 $ 25,779,332 $ 31,505,544 Plan fiduciary net position as a percentage of the total OPEB liability 30.79% 22.70% 20.10% 16.10%
Covered-employee payroll $ 246,580,127 $ 236,297,286 $ 208,969,756 $ 204,332,756 Plan net OPEB liability/(asset) as a percentage of coveredemployee payroll 10.12% 12.40% 12.30% 15.40% Notes to Schedule of Changes in the Net OPEB Liability/(Asset) and Related Ratios:
Benefit Changes: There were no changes in benefits.
Changes in Assumptions: Trust rate of return decreased from 6.2% to 5.55% Discount rate for accounting increased from 2.85% to 3.05% 1 Fiscal year 2019 was the first year of implementation; therefore, only seven years are shown. Historical information is required only for measurement periods for which GASB 75 is applicable. Future years' information will be displayed up to 10 years as information becomes available.
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Changes in the Net OPEB Liability and Related Ratios as of June 30, For the Last Seven Fiscal Years1
156
4.C.a
Packet Pg. 471 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for 2021 2020 2019
6/30/2020 6/30/2019 6/30/2018
$ 1,707,389 $ 1,207,816 $ 1,073,506
1,555,940 2,125,930 2,064,073
4,391,134 6,467,787 1,443,660
- (577,838) -
(1,798,994) (1,708,929) (1,571,807)
5,855,469 7,514,766 3,009,432
40,906,328 33,391,562 30,382,130
46,761,797 40,906,328 33,391,562
- 3,047,011 3,011,934
432,025 712,791 412,595
(1,798,994) (1,708,929) (1,571,807)
(3,973) (1,772) (3,600)
- - (5,303)
(1,370,942) 2,049,101 1,843,819
7,899,459 5,850,358 4,006,539
6,528,517 7,899,459 5,850,358
$ 40,233,280 $ 33,006,869 $ 27,541,204
14.00% 19.30% 17.5%
$ 236,995,540 $ 232,059,089 $ 216,623,938
17.00% 14.20% 12.7%
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Changes in the Net OPEB Liability and Related Ratios as of June 30, For the Last Seven Fiscal Years1
157
4.C.a
Packet Pg. 472 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Schedule of Contributions - OPEB
Contribution as a
Fiscal Year Actuarially Actual Contribution Covered % of Covered Ending Determined Employer Deficiency Employee Employee June 30, Contribution Contributions (Excess) Payroll Payroll 2025 $ 2,651,137 $ (3,653,779) $ (1,002,642) $ 269,790,280 1.35% 2024 2,212,697 (38,984,554) - 246,580,127 1.41%
2023 2,148,293 (3,314,085) (1,165,792) 236,297,286 1.40% 2022 2,784,342 (3,156,420) (372,078) 208,969,756 1.51%
2021 2,664,115 - 2,664,115 204,332,849 0.00%
2020 2,452,877 - 2,452,877 236,995,540 0.00%
2019 2,727,622 (3,047,011) (319,389) 232,059,089 1.31%
Notes to Schedule of Plan Contributions:
Valuation Date 6/30/2023
Discount Rate 5.55%
Actuarial Cost Method Entry Age Normal
Amortization Method Level Percentage of Payroll
Asset Valuation Method Fair Value
Inflation 2.50%
Salary increases 3.0% per year, used only to allocate the cost of benefits between service years
Retirement Age 50 to 75
Mortality CalPERS 2017 Experience Study
Mortality Improvement MacLeod Watts Scale 2020 applied generationally Healthcare Cost Trend Rate 6.5% in 2025 to 3.9% in 2075 1 Fiscal year 2019 was the first year of implementation; therefore, only seven years are shown. Historical information is required only for measurement periods for which GASB 75 is applicable. Future years' information will be displayed up to 10 years as information becomes available.
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Contributions - OPEB
As of June 30, For the Last Seven Fiscal Years1
158
4.C.a
Packet Pg. 473 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Supplementary Information: Non-major Funds / Other Financial Information 159
4.C.a
Packet Pg. 474 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Nonmajor Governmental Funds
Combining and Individual Fund Statements and Schedules
Special Revenue Funds are used to account for specific revenue sources that are restricted or committed to expenditures for particular purposes. The nonmajor special revenue funds used in this report are listed below:
Beach Recreation Fund – To account for beach parking and concession revenues restricted or committed for expenditures related to beach maintenance and recreation activities.
Housing Authority Fund – To account for the receipt and expenditure of Federal and State funds related to housing programs.
Tenant Ownership Rights Charter Amendment (TORCA) Fund – To account for filing fee and conversion tax revenues and expenditures related to various housing programs authorized by Chapter XX of the City Charter.
South Coast Air Quality Management District (SCAQMD) Fund – To account for the receipt and expenditure of Air Quality Management District funds.
Community Development Block Grant (CDBG) Fund – To account for Federal entitlements under the Housing and Community Development Act of 1974, as amended. The City Council annually allocates CDBG funds to various programs.
Miscellaneous Grants Fund – To account for the receipt and expenditure of Federal, State and County awarded grants and special allocations provided to the City.
Asset Seizure Fund – To account for the receipt and expenditure of equitable sharing program funds.
Rent Control Fund – To account for revenues and expenditures that are restricted or committed for rent control activities.
Gas Tax Fund – To account for State and County gasoline tax allocations and any Federal funds provided to the City for street-related purposes.
Local Return Fund – To account for State Grant activities including Proposition A and C.
Parks and Recreation Fund – To account for funds collected under the City's Unit Dwelling Tax. These funds are to be used for the acquisition, improvement and expansion of public parks, playgrounds and recreational facilities.
Citizens Option for Public Safety Fund – To account for the receipt and expenditure of the Citizens Option for Public Safety program established by AB3229 of 1996.
Capital Projects Funds are used to account for the accumulation of resources that are restricted, committed or assigned for the acquisition or construction of major capital facilities of the City other than those financed by proprietary funds and trust funds. The nonmajor capital projects funds used in this report are listed below:
Clean Beaches and Ocean Parcel Tax Fund – To account for activity related to implementation of Watershed Management Plan and the passage of Measure V in November 2006.
Debt Service Funds are used to accumulate resources that are restricted, committed, or assigned for, and the payment of, general long-term debt principal, interest and related costs. The debt service funds used by the City in this report are listed below:
Debt Service Fund – To account for accumulation of resources for, and the payment of, general longterm debt principal, interest and related costs for public facilities.
CITY OF SANTA MONICA, CALIFORNIA
160
4.C.a
Packet Pg. 475 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Permanent Funds are used to report resources that are legally restricted to the extent that only earnings, and not principal, may be used for restricted purposes. The specific permanent funds used by the City in this report are listed below:
Cemetery Perpetual Care Fund – To account for all funds received by the City from cemetery users for the perpetual care of the cemetery grounds.
Mausoleum Perpetual Care Fund – To account for all funds designated for perpetual care of the mausoleum located at the City cemetery.
CITY OF SANTA MONICA, CALIFORNIA
161
4.C.a
Packet Pg. 476 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Combining Balance Sheet - Nonmajor Governmental Funds
Special Revenue Funds
Beach
Recreation
Housing
Authority TORCA SCAQMD
ASSETS
Cash and investments (note 2) $ 4,426,126 $ 18,602 $ 2,419,936 $ 672,836 Restricted cash and investments (note 2) 362,124 2,934,016 - - Receivables (net, where applicable, of
allowances for uncollectible):
Accounts 1,531,152 1,582 - -
Leases (note 3) 11,609,737 - - -
Notes (note 4) - - 7,407,886 -
Taxes - - - -
Interest 31,767 16,043 16,870 5,348
Other governments - 1,205,519 - 32,341
Deposits - - - -
Prepaids - - - -
Restricted assets:
Restricted cash with fiscal agent (note 2) - - - -
Total assets $ 17,960,906 $ 4,175,762 $ 9,844,692 $ 710,525
LIABILITIES
Accounts payable $ 1,411,073 $ 147,746 $ - $ -
Accrued liabilities 232,784 107,991 - -
Contracts payable (retained percentage) 25,324 - 22,500 10,228 Due to other funds (note 17) - 1,847,925 - -
Unearned revenue (note 7) 521,872 91,231 - -
Deposits payable 386,583 - - -
Advances from other funds (note 17) 5,292,973 - - -
Total liabilities 7,870,609 2,194,893 22,500 10,228
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue (note 7) - - - -
Deferred inflow leases 10,148,127 - - -
Total deferred inflows of resources 10,148,127 - - -
FUND BALANCES (DEFICITS)
Nonspendable - - - -
Restricted - 1,980,869 9,822,192 700,297
Unassigned (57,830) - - -
Total fund balances (deficits) (57,830) 1,980,869 9,822,192 700,297 Total liabilities, deferred inflows, and
balances (deficits) $ 17,960,906 $ 4,175,762 $ 9,844,692 $ 710,525
CITY OF SANTA MONICA, CALIFORNIA
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2025
162
4.C.a
Packet Pg. 477 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Special Revenue Funds
Community
Development
Block Grant
Miscellaneous
Grants
Asset
Seizure Rent Control
ASSETS
Cash and investments (note 2) $ - $ - $ 1,367,038 $ 2,549,926 Restricted cash and investments (note 2) 46,287 - - -
Receivables (net, where applicable, of
allowances for uncollectible):
Accounts - - - 48,136
Leases (note 3) - - - -
Notes (note 4) 8,582,929 5,787,767 - -
Taxes - - - -
Interest 127 60,351 12,478 37,242
Other governments 1,654,686 12,511,637 - -
Deposits 3,257 - - -
Prepaids - - - 256
Restricted assets:
Restricted cash with fiscal agent (note 2) - - - -
Total assets $ 10,287,286 $ 18,359,755 $ 1,379,516 $ 2,635,560
LIABILITIES
Accounts payable $ 72,447 $ 3,599,105 $ - $ 15,386
Accrued liabilities - 33,766 - 182,364
Contracts payable (retained percentage) 26,238 480,848 - - Due to other funds (note 17) 1,551,393 3,308,956 - -
Unearned revenue (note 7) - 3,382,999 - 20,160
Deposits payable - - - -
Advances from other funds (note 17) - - - 109,341
Total liabilities 1,650,078 10,805,674 - 327,251
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue (note 7) 42,923 9,329,874 - -
Deferred inflow leases - - - -
Total deferred inflows of resources 42,923 9,329,874 - -
FUND BALANCES (DEFICITS)
Nonspendable - - - 256
Restricted 8,594,285 20,430,514 1,379,516 2,308,053
Unassigned - (22,206,307) - -
Total fund balances (deficits) 8,594,285 (1,775,793) 1,379,516 2,308,309 Total liabilities, deferred inflows, and
balances (deficits) $ 10,287,286 $ 18,359,755 $ 1,379,516 $ 2,635,560
CITY OF SANTA MONICA, CALIFORNIA
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2025
163
4.C.a
Packet Pg. 478 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Special Revenue Funds
Gas Tax Local Return
Parks and
Recreation
Citizens
Option for
Public Safety
ASSETS
Cash and investments (note 2) $ - $ - $ - $ 1,050,169
Restricted cash and investments (note 2) 8,300,488 26,659,307 - - Receivables (net, where applicable, of
allowances for uncollectible):
Accounts 220,144 2,545 - -
Leases (note 3) - - - -
Notes (note 4) - - - -
Taxes - - - -
Interest 52,457 163,420 - 7,003
Other governments 213,331 - - -
Deposits - - - -
Prepaids - - - -
Restricted assets:
Restricted cash with fiscal agent (note 2) - - - -
Total assets $ 8,786,420 $ 26,825,272 $ - $ 1,057,172
LIABILITIES
Accounts payable $ 1,493 $ 669,787 $ - $ 12,775
Accrued liabilities - - - -
Contracts payable (retained percentage) 63,329 136,006 - - Due to other funds (note 17) 1,693,142 - 126,059 -
Unearned revenue (note 7) - - - -
Deposits payable - - - -
Advances from other funds (note 17) - - - -
Total liabilities 1,757,964 805,793 126,059 12,775
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue (note 7) - 1,272 - -
Deferred inflow leases - - - -
Total deferred inflows of resources - 1,272 - -
FUND BALANCES (DEFICITS)
Nonspendable - - - -
Restricted 7,028,456 26,018,207 - 1,044,397
Unassigned - - (126,059) -
Total fund balances (deficits) 7,028,456 26,018,207 (126,059) 1,044,397 Total liabilities, deferred inflows, and
balances (deficits) $ 8,786,420 $ 26,825,272 $ - $ 1,057,172
CITY OF SANTA MONICA, CALIFORNIA
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2025
164
4.C.a
Packet Pg. 479 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Capital
Projects
Funds
Debt Service
Fund Permanent Funds
Clean
Beaches and
Ocean Parcel
Tax Debt Service
Cemetery
Perpetual
Care
Mausoleum
Perpetual
Care
ASSETS
Cash and investments (note 2) $ 15,372,829 $ - $ 128,155 $ 25,672 Restricted cash and investments (note 2) 3,609,295 - - - Receivables (net, where applicable, of
allowances for uncollectible):
Accounts 4,763 - 21,814 11,434
Leases (note 3) - - - -
Notes (note 4) - - - -
Taxes 115,993 - - -
Interest 138,847 - 22,035 2,649
Other governments - - - -
Deposits - - - -
Prepaids - - - -
Restricted assets:
Restricted cash with fiscal agent (note 2) - 10,998,992 18,391,333 2,301,096 Total assets $ 19,241,727 $ 10,998,992 $ 18,563,337 $ 2,340,851
LIABILITIES
Accounts payable $ 363,771 $ - $ - $ -
Accrued liabilities - - - -
Contracts payable (retained percentage) 7,590 - - -
Due to other funds (note 17) - - - -
Unearned revenue (note 7) - - - -
Deposits payable - - - -
Advances from other funds (note 17) - - - -
Total liabilities 371,361 - - -
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - - - -
Deferred inflow leases - - - -
Total deferred inflows of resources - - - -
FUND BALANCES (DEFICITS)
Nonspendable - - 18,563,337 2,340,851
Restricted 18,870,366 10,998,992 - -
Unassigned - - - -
Total fund balances (deficits) 18,870,366 10,998,992 18,563,337 2,340,851 Total liabilities, deferred inflows, and
balances (deficits) $ 19,241,727 $ 10,998,992 $ 18,563,337 $ 2,340,851
CITY OF SANTA MONICA, CALIFORNIA
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2025
165
4.C.a
Packet Pg. 480 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Total
Nonmajor
Funds
ASSETS
Cash and investments (note 2) $ 28,031,289
Restricted cash and investments (note 2) 41,911,517
Receivables (net, where applicable, of
allowances for uncollectible):
Accounts 1,841,570
Leases (note 3) 11,609,737
Notes (note 4) 21,778,582
Taxes 115,993
Interest 566,637
Other governments 15,617,514
Deposits 3,257
Prepaids 256
Restricted assets:
Restricted cash with fiscal agent (note 2) 31,691,421
Total assets $ 153,167,773
LIABILITIES
Accounts payable $ 6,293,583
Accrued liabilities 556,905
Contracts payable (retained percentage) 772,063
Due to other funds (note 17) 8,527,475
Unearned revenue (note 7) 4,016,262
Deposits payable 386,583
Advances from other funds (note 17) 5,402,314
Total liabilities 25,955,185
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 9,374,069
Deferred inflow leases 10,148,127
Total deferred inflows of resources 19,522,196
FUND BALANCES (DEFICITS)
Nonspendable 20,904,444
Restricted 109,176,144
Unassigned (22,390,196)
Total fund balances (deficits) 107,690,392
Total liabilities, deferred inflows, and
balances (deficits) $ 153,167,773
CITY OF SANTA MONICA, CALIFORNIA
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2025
166
4.C.a
Packet Pg. 481 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds Special Revenue Funds
Beach
Recreation
Housing
Authority TORCA SCAQMD
REVENUES
Other taxes $ - $ - $ 11,292 $ -
Licenses and permits 91,182 - - -
Intergovernmental - 30,502,380 - 123,845
Charges for services 13,650,467 - - -
Investment income 843,102 107,987 132,079 38,950
Rental income 1,192,403 - - -
Other income 2,631,816 - 55,884 -
Total revenues 18,408,970 30,610,367 199,255 162,795
EXPENDITURES
Current:
General government - - - 3,360
Public safety - - - -
General services 634,500 - - -
Housing and community services 18,633,354 30,598,049 712 - Library - - - -
Community development - - - -
Capital outlay 336,660 2,754 178 -
Debt service:
Principal - 47,591 - -
Interest - 11,174 - -
Total expenditures 19,604,514 30,659,568 890 3,360
Excess (deficiency) of revenues
over (under) expenditures (1,195,544) (49,201) 198,365 159,435
OTHER FINANCING SOURCES (USES)
Transfers in 2,745,438 59,172 - -
Transfers out (217,899) (489,586) (40,883) -
Total other financing sources (uses) 2,527,539 (430,414) (40,883) - Net change in fund balances 1,331,995 (479,615) 157,482 159,435 Fund balances (deficit)-beginning (1,389,825) 2,460,484 9,664,710 540,862 Fund balances (deficit)-ending $ (57,830) $ 1,980,869 $ 9,822,192 $ 700,297
CITY OF SANTA MONICA, CALIFORNIA
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds
For the Year Ended June 30, 2025
167
4.C.a
Packet Pg. 482 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Special Revenue Funds
Community
Development
Block Grant
Miscellaneous
Grants Asset Seizure Rent Control
REVENUES
Other taxes - - - -
Licenses and permits - - - -
Intergovernmental 1,691,075 30,358,185 179,552 -
Charges for services - - - 6,168,937
Investment income 1,815 78,343 90,391 277,647
Rental income - - - -
Other income - - - 103
Total revenues 1,692,890 30,436,528 269,943 6,446,687
EXPENDITURES
Current:
General government 42,023 599,362 - -
Public safety - 4,589,091 - -
General services - 503,053 - -
Housing and community services 150,000 2,944,863 - -
Library - 87,785 - -
Community development - 82,090 - 5,728,948
Capital outlay 1,443,179 22,939,438 650,000 -
Debt service:
Principal - - - 18,453
Interest - - - 4,933
Total expenditures 1,635,202 31,745,682 650,000 5,752,334 Excess (deficiency) of revenues
over (under) expenditures 57,688 (1,309,154) (380,057) 694,353
OTHER FINANCING SOURCES (USES)
Transfers in - - - 150
Transfers out (92,007) (1,386,283) - (221,138)
Total other financing sources (uses) (92,007) (1,386,283) - (220,988) Net change in fund balances (34,319) (2,695,437) (380,057) 473,365 Fund balances (deficit)-beginning 8,628,604 919,644 1,759,573 1,834,944 Fund balances (deficit)-ending $ 8,594,285 $ (1,775,793) $ 1,379,516 $ 2,308,309
CITY OF SANTA MONICA, CALIFORNIA
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds
For the Year Ended June 30, 2025
168
4.C.a
Packet Pg. 483 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Special Revenue Funds
Gas Tax Local Return
Parks and
Recreation
Citizens
Option for
Public Safety
REVENUES
Other taxes - - - -
Licenses and permits - - - -
Intergovernmental 5,117,568 7,000,369 - 278,478
Charges for services - - - -
Investment income 390,575 1,245,369 - 51,620
Rental income - - - -
Other income - - - -
Total revenues 5,508,143 8,245,738 - 330,098
EXPENDITURES
Current:
General government 6,129 - - -
Public safety - - - 264,489
General services 1,652,561 953,684 - -
Housing and community services - - - -
Library - - - -
Community development - - - -
Capital outlay 1,486,842 3,215,980 - -
Debt service:
Principal - - - -
Interest - - - -
Total expenditures 3,145,532 4,169,664 - 264,489
Excess (deficiency) of revenues
over (under) expenditures 2,362,611 4,076,074 - 65,609
OTHER FINANCING SOURCES (USES)
Transfers in - - - -
Transfers out (2,576,459) (584,941) - -
Total other financing sources (uses) (2,576,459) (584,941) - - Net change in fund balances (213,848) 3,491,133 - 65,609 Fund balances (deficit)-beginning 7,242,304 22,527,074 (126,059) 978,788 Fund balances (deficit)-ending $ 7,028,456 $ 26,018,207 $ (126,059) $ 1,044,397
CITY OF SANTA MONICA, CALIFORNIA
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds
For the Year Ended June 30, 2025
169
4.C.a
Packet Pg. 484 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Capital
Projects
Funds
Debt Service
Funds Permanent Funds
Clean
Beaches and
Ocean Parcel
Tax Debt Service
Cemetery
Perpetual
Care
Mausoleum
Perpetual
Care
REVENUES
Other taxes $ 4,025,169 $ - $ - $ -
Licenses and permits - - - -
Intergovernmental 910,954 - - -
Charges for services - - 379,606 71,984
Investment income 910,160 40,704 2,058,023 248,165
Rental income - - - -
Other income - - - -
Total revenues 5,846,283 40,704 2,437,629 320,149
EXPENDITURES
Current:
General government - - - -
Public safety - - - -
General services 583,831 - - -
Housing and community services - - - -
Library - - - -
Community development - - - -
Capital outlay 353,665 - - -
Debt service: - - -
Principal - 6,840,000 - -
Interest - 7,700,581 - -
Total expenditures 937,496 14,540,581 - -
Excess (deficiency) of revenues
over (under) expenditures 4,908,787 (14,499,877) 2,437,629 320,149
OTHER FINANCING SOURCES (USES)
Transfers in - 14,700,993 - -
Transfers out (2,517,719) - (597,811) (74,650)
Total other financing sources (uses) (2,517,719) 14,700,993 (597,811) (74,650) Net change in fund balances 2,391,068 201,116 1,839,818 245,499 Fund balances (deficit)-beginning 16,479,298 10,797,876 16,723,519 2,095,352 Fund balances (deficit)-ending $ 18,870,366 $ 10,998,992 $ 18,563,337 $ 2,340,851
CITY OF SANTA MONICA, CALIFORNIA
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds
For the Year Ended June 30, 2025
170
4.C.a
Packet Pg. 485 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Total
Nonmajor
Funds
REVENUES
Other taxes $ 4,036,461
Licenses and permits 91,182
Intergovernmental 76,162,406
Charges for services 20,270,994
Investment income 6,514,930
Rental income 1,192,403
Other income 2,687,803
Total revenues 110,956,179
EXPENDITURES
Current:
General government 650,874
Public safety 4,853,580
General services 4,327,629
Housing and community services 52,326,978
Library 87,785
Community development 5,811,038
Capital outlay 30,428,696
Debt service:
Principal 6,906,044
Interest 7,716,688
Total expenditures 113,109,312
Excess (deficiency) of revenues
over (under) expenditures (2,153,133)
OTHER FINANCING SOURCES (USES)
Transfers in 17,505,753
Transfers out (8,799,376)
Total other financing sources (uses) 8,706,377
Net change in fund balances 6,553,244
Fund balances (deficit)-beginning 101,137,148
Fund balances (deficit)-ending $ 107,690,392
CITY OF SANTA MONICA, CALIFORNIA
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds
For the Year Ended June 30, 2025
171
4.C.a
Packet Pg. 486 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Schedules of Revenues, Expenditures, and Changes in Fund Balance (Deficit) – Budget and Actual – Special Revenue Funds
172
4.C.a
Packet Pg. 487 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Beach Recreation
Original
budget
Final
budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary
basis
Variance with
final budget
REVENUES
Licenses and permits $ 123,250 $ 123,250 $ 91,182 $ - $ 91,182 $ (32,068) Intergovernmental 38,127 38,127 - - - (38,127)
Charges for services 14,258,341 14,454,779 13,650,467 - 13,650,467 (804,312) Investment income - - 843,102 - 843,102 843,102
Rental income 1,735,056 1,735,056 1,192,403 - 1,192,403 (542,653) Other revenue 1,791,809 1,791,809 2,631,816 - 2,631,816 840,007 Total revenues 17,946,583 18,143,021 18,408,970 - 18,408,970 265,949
EXPENDITURES
General services
Public works 634,500 634,500 634,500 - 634,500 -
Total general services 634,500 634,500 634,500 - 634,500 - Housing and community services
Other 19,528,117 19,964,222 18,633,354 266,837 18,900,191 1,064,031 Total housing and community services 19,528,117 19,964,222 18,633,354 266,837 18,900,191 1,064,031 Capital outlay 7,645 2,885,553 336,660 438,957 775,617 2,109,936 Total expenditures 20,170,262 23,484,275 19,604,514 705,794 20,310,308 3,173,967 Excess (deficiency) of revenues over (under) expenditures (2,223,679) (5,341,254) (1,195,544) (705,794) (1,901,338) 3,439,916
OTHER FINANCING SOURCES (USES)
Transfers in 2,751,325 2,751,325 2,745,438 - 2,745,438 (5,887) Transfers out (267,661) (267,661) (217,899) - (217,899) 49,762 Total other financing sources (uses) 2,483,664 2,483,664 2,527,539 - 2,527,539 43,875 Net change in fund balance 259,985 (2,857,590) 1,331,995 (705,794) 626,201 3,483,791 Fund balance-beginning (1,389,825) (1,389,825) (1,389,825) - (1,389,825) - Fund balance-ending $ (1,129,840) $ (4,247,415) $ (57,830) $ (705,794) $ (763,624) $ 3,483,791
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Beach Recreation Special Revenue Fund
For the Year Ended June 30, 2025
173
4.C.a
Packet Pg. 488 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Housing Authority
Original
budget
Final
budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary
basis
Variance with
final budget
REVENUES
Intergovernmental $ 30,310,880 $ 28,977,190 $ 30,502,380 $ - $ 30,502,380 $ 1,525,190 Investment income - - 107,987 - 107,987 107,987
Total revenues 30,310,880 28,977,190 30,610,367 - 30,610,367 1,633,177
EXPENDITURES
Housing and community services
Housing and community services 30,718,705 29,492,026 30,598,049 24,386 30,622,435 (1,130,409) Total housing and community services 30,718,705 29,492,026 30,598,049 24,386 30,622,435 (1,130,409) Principal - - 47,591 - 47,591 (47,591)
Interest - - 11,174 - 11,174 (11,174)
Capital outlay 7,299 7,299 2,754 - 2,754 4,545
Total expenditures 30,726,004 29,499,325 30,659,568 24,386 30,683,954 (1,184,629) Excess (deficiency) of revenues over (under) expenditures (415,124) (522,135) (49,201) (24,386) (73,587) 448,548
OTHER FINANCING SOURCES (USES)
Transfers in 67,497 67,497 59,172 - 59,172 (8,325)
Transfers out (421,394) (421,394) (489,586) - (489,586) (68,192) Total other financing sources (uses) (353,897) (353,897) (430,414) - (430,414) (76,517) Net change in fund balance (769,021) (876,032) (479,615) (24,386) (504,001) 372,031 Fund balance-beginning 2,460,484 2,460,484 2,460,484 - 2,460,484 - Fund balance-ending $ 1,691,463 $ 1,584,452 $ 1,980,869 $ (24,386) $ 1,956,483 $ 372,031
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Housing Authority Special Revenue Fund
For the Year Ended June 30, 2025
174
4.C.a
Packet Pg. 489 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Tenant Ownership Rights Charter Amendment (TORCA)
Original
budget
Final
budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary
basis
Variance with
final budget
REVENUES
Other taxes $ 25,000 $ 25,000 $ 11,292 $ - $ 11,292 $ (13,708) Investment income 110,000 110,000 132,079 - 132,079 22,079 Other revenue 50,000 50,000 55,884 - 55,884 5,884
Total revenues 185,000 185,000 199,255 - 199,255 14,255
EXPENDITURES
Housing and community services
Housing and community services 6,242 6,242 712 - 712 5,530 Total housing and community services 6,242 6,242 712 - 712 5,530 Capital outlay - 1,010,403 178 - 178 1,010,225
Total expenditures 6,242 1,016,645 890 - 890 1,015,755
Excess (deficiency) of revenues over (under) expenditures 178,758 (831,645) 198,365 - 198,365 1,030,010
OTHER FINANCING SOURCES (USES)
Transfers out (116,472) (116,472) (40,883) - (40,883) 75,589 Total other financing sources (uses) (116,472) (116,472) (40,883) - (40,883) 75,589 Net change in fund balance 62,286 (948,117) 157,482 - 157,482 1,105,599 Fund balance-beginning 9,664,710 9,664,710 9,664,710 - 9,664,710 - Fund balance-ending $ 9,726,996 $ 8,716,593 $ 9,822,192 $ - $ 9,822,192 $ 1,105,599
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Tenant Ownership Rights Charter Amendment (TORCA) Special Revenue Fund For the Year Ended June 30, 2025
175
4.C.a
Packet Pg. 490 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual South Coast Air Quality Management District (SCAQMD)
Original
budget
Final
budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary
basis
Variance with
final budget
REVENUES
Intergovernmental $ 119,000 $ 119,000 $ 123,845 $ - $ 123,845 $ 4,845 Investment income 10,000 10,000 38,950 - 38,950 28,950
Total revenues 129,000 129,000 162,795 - 162,795 33,795
EXPENDITURES
Current:
General government
Other - - 3,360 - 3,360 (3,360)
Total general government - - 3,360 - 3,360 (3,360)
General services
Public works 70,000 217,805 - 133,194 133,194 84,611
Total general services 70,000 217,805 - 133,194 133,194 84,611 Total expenditures 70,000 217,805 3,360 133,194 136,554 81,251 Net change in fund balance 59,000 (88,805) 159,435 (133,194) 26,241 115,046 Fund balance-beginning 540,862 540,862 540,862 - 540,862 - Fund balance-ending $ 599,862 $ 452,057 $ 700,297 $ (133,194) $ 567,103 $ 115,046
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual SCAQMD Special Revenue Fund
For the Year Ended June 30, 2025
176
4.C.a
Packet Pg. 491 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Community Development Block Grant (CDBG)
Original
budget
Final
budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary
basis
Variance with
final budget
REVENUES
Intergovernmental $ 1,194,558 $ 1,194,558 $ 1,691,075 $ - $ 1,691,075 $ 496,517 Investment income 5,000 5,000 1,815 - 1,815 (3,185)
Total revenues 1,199,558 1,199,558 1,692,890 - 1,692,890 493,332
EXPENDITURES
Current:
General government
City council 157,350 207,350 42,023 65,000 107,023 100,327 Total general government 157,350 207,350 42,023 65,000 107,023 100,327 General services
Public works - - - - - -
Total general services - - - - - -
Housing and community services
Housing and community services 189,800 325,550 150,000 134,700 284,700 40,850 Total housing and community services 189,800 325,550 150,000 134,700 284,700 40,850 Capital outlay 1,000,000 3,253,755 1,443,179 691,726 2,134,905 1,118,850 Total expenditures 1,347,150 3,786,655 1,635,202 891,426 2,526,628 1,260,027 Excess (deficiency) of revenues over (under) expenditures (147,592) (2,587,097) 57,688 (891,426) (833,738) 1,753,359
OTHER FINANCING SOURCES (USES)
Transfers out (131,500) (131,500) (92,007) - (92,007) 39,493 Total other financing sources (uses) (131,500) (131,500) (92,007) - (92,007) 39,493 Net change in fund balance (279,092) (2,718,597) (34,319) (891,426) (925,745) 1,792,852 Fund balance-beginning 8,628,604 8,628,604 8,628,604 - 8,628,604 - Fund balance-ending $ 8,349,512 $ 5,910,007 $ 8,594,285 $ (891,426) $ 7,702,859 $ 1,792,852
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Community Development Block Grant Special Revenue Fund
For the Year Ended June 30, 2025
177
4.C.a
Packet Pg. 492 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Miscellaneous Grants
Original
budget
Final
budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary
basis
Variance with
final budget
REVENUES
Intergovernmental $ 5,623,619 $ 52,398,638 $ 30,358,185 $ - $ 30,358,185 $ (22,040,453) Investment income - - 78,343 - 78,343 78,343
Other revenue 60,000 50,000 - - - (50,000)
Total revenues 5,683,619 52,448,638 30,436,528 - 30,436,528 (22,012,110)
EXPENDITURES
General government
City attorney 50,000 3,915,995 599,362 107,354 706,716 3,209,279 Total general government 50,000 3,992,903 599,362 107,354 706,716 3,286,187 Public safety
Police - 6,939,013 2,317,663 2,889,586 5,207,249 1,731,764 Fire - 4,025,542 2,271,428 115,763 2,387,191 1,638,351
Total public safety - 10,964,555 4,589,091 3,005,349 7,594,440 3,370,115 General services
Public works - 921,042 503,053 161,626 664,679 256,363
Total general services - 921,042 503,053 161,626 664,679 256,363 Housing and community services
Housing and community services 2,167,844 4,658,753 2,944,863 1,585,318 4,530,181 128,572 Total housing and community services 2,167,844 4,658,753 2,944,863 1,585,318 4,530,181 128,572 Library
Library 66,118 135,684 87,785 - 87,785 47,899
Total library 66,118 135,684 87,785 - 87,785 47,899
Community development
Community development - 1,820,016 82,090 9,250 91,340 1,728,676 Total community development - 1,820,016 82,090 9,250 91,340 1,728,676 Capital outlay 8,531,800 42,267,505 22,939,438 7,999,041 30,938,479 11,329,026 Total expenditures 10,815,762 64,760,458 31,745,682 12,867,938 44,613,620 20,146,838 Excess (deficiency) of revenues over (under) expenditures (5,132,143) (12,311,820) (1,309,154) (12,867,938) (14,177,092) (1,865,272)
OTHER FINANCING SOURCES (USES)
Transfers out (277,943) (398,418) (1,386,283) - (1,386,283) (987,865) Total other financing sources (uses) (277,943) (398,418) (1,386,283) - (1,386,283) (987,865) Net change in fund balance (5,410,086) (12,710,238) (2,695,437) (12,867,938) (15,563,375) (2,853,137) Fund balance-beginning 919,644 919,644 919,644 - 919,644 - Fund balance-ending $ (4,490,442) $ (11,790,594) $ (1,775,793) $ (12,867,938) $ (14,643,731) $ (2,853,137)
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Miscellaneous Grants Special Revenue Fund
For the Year Ended June 30, 2025
178
4.C.a
Packet Pg. 493 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Gas Tax
Original
budget
Final
budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary
basis
Variance with
final budget
REVENUES
Intergovernmental $ 4,927,044 $ 5,033,225 $ 5,117,568 $ - $ 5,117,568 $ 84,343 Investment income 18,000 18,000 390,575 - 390,575 372,575 Total revenues 4,945,044 5,051,225 5,508,143 - 5,508,143 456,918
EXPENDITURES
Current:
Other 5,474 5,474 6,129 - 6,129 (655)
Total general government 5,474 5,474 6,129 - 6,129 (655) General services
Public works 3,500,000 8,805,382 1,652,561 - 1,652,561 7,152,821 Total general services 3,500,000 8,805,382 1,652,561 - 1,652,561 7,152,821 Housing and community services
Housing and community services - - - - -
Total housing and community services - - - - - -
Capital outlay - 1,494,897 1,486,842 4,539,228 6,026,070 (4,531,173) Total expenditures 3,505,474 10,305,753 3,145,532 4,539,228 7,684,760 2,620,993 Excess (deficiency) of revenues over (under) expenditures 1,439,570 (5,254,528) 2,362,611 (4,539,228) (2,176,617) 3,077,911
OTHER FINANCING SOURCES (USES)
Transfers out (2,683,495) (2,683,495) (2,576,459) - (2,576,459) 107,036 Total other financing sources (uses) (2,683,495) (2,683,495) (2,576,459) - (2,576,459) 107,036 Net change in fund balance (1,243,925) (7,938,023) (213,848) (4,539,228) (4,753,076) 3,184,947 Fund balance-beginning 7,242,304 7,242,304 7,242,304 - 7,242,304 - Fund balance-ending $ 5,998,379 $ (695,719) $ 7,028,456 $ (4,539,228) $ 2,489,228 $ 3,184,947
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Gas Tax
For the Year Ended June 30, 2025
179
4.C.a
Packet Pg. 494 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Local Return
Original
budget
Final
budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary
basis
Variance with
final budget
REVENUES
Intergovernmental $ 8,818,479 $ 8,818,479 $ 7,000,369 $ - $ 7,000,369 $ (1,818,110) Investment income - - 1,245,369 - 1,245,369 1,245,369
Total revenues 8,818,479 8,818,479 8,245,738 - 8,245,738 (572,741)
EXPENDITURES
Current:
General services
Public works - - - 946,900 946,900 (946,900)
Mobility 3,352,563 9,337,168 953,684 1,558,665 2,512,349 6,824,819 Total general services 3,352,563 9,337,168 953,684 2,505,565 3,459,249 5,877,919 Housing and community services
Housing and community services - 4,754 - - - 4,754
Total housing and community services - 4,754 - - - 4,754 Capital outlay 4,000,000 12,276,687 3,215,980 1,753,360 4,969,340 7,307,347 Total expenditures 7,352,563 21,618,609 4,169,664 4,258,925 8,428,589 13,190,020 Excess (deficiency) of revenues over (under) expenditures 1,465,916 (12,800,130) 4,076,074 (4,258,925) (182,851) 12,617,279
OTHER FINANCING SOURCES (USES)
Transfers out (1,223,893) (1,223,893) (584,941) - (584,941) 638,952 Total other financing sources (uses) (1,223,893) (1,223,893) (584,941) - (584,941) 638,952 Net change in fund balance 242,023 (14,024,023) 3,491,133 (4,258,925) (767,792) 13,256,231 Fund balance-beginning 22,527,074 22,527,074 22,527,074 - 22,527,074 - Fund balance-ending $ 22,769,097 $ 8,503,051 $ 26,018,207 $ (4,258,925) $ 21,759,282 $ 13,256,231
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Local Return Special Revenue Fund
For the Year Ended June 30, 2025
180
4.C.a
Packet Pg. 495 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Parks and Recreation
Original
budget
Final
budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary
basis
Variance with
final budget
REVENUES
Investment income $ 3,000 $ 3,000 $ - $ - $ - $ (3,000) Total revenues 3,000 3,000 - - - (3,000)
Net change in fund balance 3,000 3,000 - - - (3,000)
Fund balance-beginning (126,059) (126,059) (126,059) - (126,059) - Fund balance-ending $ (123,059) $ (123,059) $ (126,059) $ - $ (126,059) $ (3,000)
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Parks and Recreation Special Revenue Fund
For the Year Ended June 30, 2025
181
4.C.a
Packet Pg. 496 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Citizens Option for Public Safety
Original
budget
Final
budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary
basis
Variance with
final budget
REVENUES
Intergovernmental $ 235,000 $ 235,000 $ 278,478 $ - $ 278,478 $ 43,478 Investment income 5,000 5,000 51,620 - 51,620 46,620
Total revenues 240,000 240,000 330,098 - 330,098 90,098
EXPENDITURES
Public safety
Police 109,094 131,037 264,489 17,225 281,714 (150,677) Total public safety 109,094 131,037 264,489 17,225 281,714 (150,677) Total expenditures 109,094 131,037 264,489 17,225 281,714 (150,677) Net change in fund balance 130,906 108,963 65,609 (17,225) 48,384 (60,579) Fund balance-beginning 978,788 978,788 978,788 - 978,788 - Fund balance-ending $ 1,109,694 $ 1,087,751 $ 1,044,397 $ (17,225) $ 1,027,172 $ (60,579)
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Citizens Option for Public Safety Special Revenue Fund
For the Year Ended June 30, 2025
182
4.C.a
Packet Pg. 497 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Schedules of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – Capital Project Funds
183
4.C.a
Packet Pg. 498 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Clean Beaches and Ocean Parcel Tax
Original
budget
Final
budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary
basis
Variance with
final budget
REVENUES
Other taxes $ 3,733,376 $ 3,733,376 $ 4,025,169 $ - $ 4,025,169 $ 291,793 Intergovernmental 812,835 812,835 910,954 - 910,954 98,119 Investment income 130,000 130,000 910,160 - 910,160 780,160 Total revenues 4,676,211 4,676,211 5,846,283 - 5,846,283 1,170,072
EXPENDITURES
General services
Public works 1,841,097 6,528,177 583,831 4,042,319 4,626,150 1,902,027 Total general services 1,841,097 6,528,177 583,831 4,042,319 4,626,150 1,902,027 Capital outlay 6,240,000 6,480,980 353,665 2,032,311 2,385,976 4,095,004 Total expenditures 8,081,097 13,009,157 937,496 6,074,630 7,012,126 5,997,031 Excess (deficiency) of revenues over (under) expenditures (3,404,886) (8,332,946) 4,908,787 (6,074,630) (1,165,843) 7,167,103
OTHER FINANCING SOURCES (USES)
Transfers out (3,515,894) (3,515,894) (2,517,719) - (2,517,719) 998,175 Total other financing sources (uses) (3,515,894) (3,515,894) (2,517,719) - (2,517,719) 998,175 Net change in fund balance (6,920,780) (11,848,840) 2,391,068 (6,074,630) (3,683,562) 8,165,278 Fund balance-beginning 16,479,298 16,479,298 16,479,298 - 16,479,298 - Fund balance-ending $ 9,558,518 $ 4,630,458 $ 18,870,366 $ (6,074,630) $ 12,795,736 $ 8,165,278
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Clean Beaches and Ocean Parcel Tax Capital Projects Fund For the Year Ended June 30, 2025
184
4.C.a
Packet Pg. 499 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Nonmajor Enterprise Fund Financial Statements
Enterprise Funds are used to report any activity for which a fee is charged to external users for goods or services. Activities are required to be reported as enterprise funds if any one of the following criteria is met: (a) The activity is financed with debt that is secured solely by a pledge of the net revenues from fees and charges of the activity. Debt that is secured by a pledge of net revenues from fees and charges and the full faith and credit of a related primary government or component unit – even if that government is not expected to make any payments – is not payable solely from fees and charges of the activity. (Some debt may be secured, in part, by a portion of its own proceeds but should be considered as payable “solely” from the revenues of the activity.) (b) Laws or regulations require that the activity’s costs of providing services, including capital costs (such as depreciation or debt service), be recovered with fees and charges, rather than with taxes or similar revenues. (c) The pricing policies of the activity establish fees and charges designed to recover its costs, including capital costs (such as depreciation or debt service).
Pier Fund – To account for revenues and expenses connected with management and development of the Santa Monica Pier.
Stormwater Management Fund – To account for revenues and expenses associated with storm water management.
Cemetery Fund – To account for revenues and expenses associated with operation of Woodlawn Cemetery and Mausoleum.
Parking Authority Fund – To account for acquisition of parking lots or contributing to the construction of parking structures by the City Parking Authority.
CITY OF SANTA MONICA, CALIFORNIA
185
4.C.a
Packet Pg. 500 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Combining Statement of Net Position - Nonmajor Enterprise Funds Business-Type Activities
Stormwater
Management
Fund Pier Fund Cemetery Fund
Parking
Authority Fund
ASSETS
Current assets:
Cash and investments (note 2) $ 1,855,897 $ 14,526,549 $ 5,120,419 $ 234,941 Restricted cash and investments (note 2) 9,915,030 290,210 61,308 - Receivables (net of uncollectibles):
Accounts 7,399 50,509 662,120 -
Interest 81,615 66,463 31,704 2,674
Leases (note 3) - 1,746,055 - -
Taxes 33,722 - - -
Total current assets 11,893,663 16,679,786 5,875,551 237,615 Noncurrent:
Leases receivable - 3,797,803 - -
Capital assets, net of depreciation and amortization
(note 5) 7,102,964 20,047,504 381,991 1,840,051
Total noncurrent assets 7,102,964 23,845,307 381,991 1,840,051 Total assets 18,996,627 40,525,093 6,257,542 2,077,666
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows from pension - 681,839 247,542 -
Deferred outflows from OPEB - 70,063 26,429 -
Total deferred outflows of resources - 751,902 273,971 -
LIABILITIES
Current liabilities:
Accounts payable - 185,240 234,759 211
Accrued liabilities - 122,470 40,859 -
Contracts payable (retained percentage) - 8,452 2,900 - Unearned revenue (note 7) - 17,882 - -
Compensated absences, due within one year (note
8) - 152,434 42,159 -
Liabilities payable from restricted assets - deposits - 281,923 - - Total current liabilities - 768,401 320,677 211
Noncurrent liabilities:
Compensated absences, due in more than one
year (note 8) - 88,844 41,246 -
Net OPEB liability, due in more than one year (note
12) - 103,467 39,030 -
Net pension liability, due in more than one year
(note 12) - 2,209,216 802,056 -
Total noncurrent liabilities - 2,401,527 882,332 -
Total liabilities - 3,169,928 1,203,009 211
DEFERRED INFLOWS OF RESOURCES
Deferred inflows from pension - 37,082 13,463 -
Deferred inflows from OPEB - 74,909 28,257 -
Deferred inflows from leases - 4,931,262 - -
Total deferred inflows of resources - 5,043,253 41,720 -
NET POSITION
Net investment in capital assets 7,102,965 20,021,471 381,990 1,840,051 Unrestricted 11,893,662 13,042,343 4,904,794 237,404
Total net position $ 18,996,627 $ 33,063,814 $ 5,286,784 $ 2,077,455
CITY OF SANTA MONICA, CALIFORNIA
Combining Statement of Net Position
Nonmajor Enterprise Funds
June 30, 2025
186
4.C.a
Packet Pg. 501 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Business-Type
Activities
Total Nonmajor
Enterprise
Funds
ASSETS
Current assets:
Cash and investments (note 2) $ 21,737,806
Restricted cash and investments (note 2) 10,266,548
Receivables (net of uncollectibles):
Accounts 720,028
Interest 182,456
Leases (note 3) 1,746,055
Taxes 33,722
Total current assets 34,686,615
Noncurrent:
Leases receivable 3,797,803
Capital assets, net of depreciation and amortization (note 5) 29,372,510 Total noncurrent assets 33,170,313
Total assets 67,856,928
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows from pension 929,381
Deferred outflows from OPEB 96,492
Total deferred outflows of resources 1,025,873
LIABILITIES
Current liabilities:
Accounts payable 420,210
Accrued liabilities 163,329
Contracts payable (retained percentage) 11,352
Unearned revenue (note 7) 17,882
Compensated absences, due within one year (note 8) 194,593 Liabilities payable from restricted assets - deposits 281,923 Total current liabilities 1,089,289
Noncurrent liabilities:
Compensated absences, due in more than one year (note 8) 130,090 Net OPEB liability, due in more than one year (note 12) 142,497 Net pension liability, due in more than one year (note 12) 3,011,272 Total noncurrent liabilities 3,283,859
Total liabilities 4,373,148
DEFERRED INFLOWS OF RESOURCES
Deferred inflows from pension 50,545
Deferred inflows from OPEB 103,166
Deferred inflows from leases 4,931,262
Total deferred inflows of resources 5,084,973
NET POSITION
Net investment in capital assets 29,346,477
Unrestricted 30,078,203
Total net position $ 59,424,680
CITY OF SANTA MONICA, CALIFORNIA
Combining Statement of Net Position
Nonmajor Enterprise Funds
June 30, 2025
187
4.C.a
Packet Pg. 502 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Combining Statement of Revenues, Expenses and Changes in Net Position - Nonmajor Enterprise Funds Business-Type Activities
Stormwater
Management
Fund Pier Fund Cemetery Fund
Parking
Authority Fund
OPERATING REVENUES
Charges for services $ 1,446,891 $ 9,832,345 $ 2,889,410 $ - Total operating revenues 1,446,891 9,832,345 2,889,410 -
OPERATING EXPENSES
Personnel services - 2,539,979 872,096 350
Administrative indirect - 1,328,642 369,995 -
Contractual services - 1,407,571 496,352 -
Repairs and maintenance - 341,212 41,559 -
Materials and supplies 1,524 575,145 696,438 157,830
Utilities - 303,781 220,939 -
Casualty property and liability costs - 1,080,341 201,077 - Depreciation and amortization 432,130 478,518 41,534 16,263 Other 19,562 835,641 17,390 -
Total operating expenses 453,216 8,890,830 2,957,412 174,443 Operating income (loss) 993,675 941,515 (68,002) (174,443)
NONOPERATING REVENUES
(EXPENSES)
Investment income 610,558 488,171 236,801 19,049
Fees 894,961 - - -
Tax credits - 5 - -
Other nonoperating revenues (expenses) 7 219,452 85,100 - Total nonoperating revenues (expenses) 1,505,526 707,628 321,901 19,049 Income (loss) before capital
contributions and transfers 2,499,201 1,649,143 253,899 (155,394) Transfers in 10,731 3,788,197 672,461 -
Transfers out (1,668,366) (70,703) (24,395) -
Change in net position 841,566 5,366,637 901,965 (155,394) Net position-beginning 18,155,061 27,753,708 4,399,204 2,232,849 Change in accounting principle (note 19) - (56,531) (14,385) - Net position-beginning, as restated 18,155,061 27,697,177 4,384,819 2,232,849 Net position-ending $ 18,996,627 $ 33,063,814 $ 5,286,784 $ 2,077,455
CITY OF SANTA MONICA, CALIFORNIA
Combining Statement of Revenues, Expenses and Changes in Net Position Nonmajor Enterprise Funds
For the Year Ended June 30, 2025
188
4.C.a
Packet Pg. 503 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Business-Type
Activities
Total Nonmajor
Enterprise
Funds
OPERATING REVENUES
Charges for services $ 14,168,646
Total operating revenues 14,168,646
OPERATING EXPENSES
Personnel services 3,412,425
Administrative indirect 1,698,637
Contractual services 1,903,923
Repairs and maintenance 382,771
Materials and supplies 1,430,937
Utilities 524,720
Casualty property and liability costs 1,281,418
Depreciation and amortization 968,445
Other 872,593
Total operating expenses 12,475,901
Operating income (loss) 1,692,745
NONOPERATING REVENUES
(EXPENSES)
Investment income 1,354,579
Fees 894,961
Tax credits 5
Other nonoperating revenues (expenses) 304,559
Total nonoperating revenues (expenses) 2,554,104
Income (loss) before capital
contributions and transfers 4,246,849
Transfers in 4,471,389
Transfers out (1,763,464)
Change in net position 6,954,774
Net position-beginning 52,540,822
Change in accounting principle (note 19) (70,916)
Net position-beginning, as restated 52,469,906
Net position-ending $ 59,424,680
CITY OF SANTA MONICA, CALIFORNIA
Combining Statement of Revenues, Expenses and Changes in Net Position Nonmajor Enterprise Funds
For the Year Ended June 30, 2025
189
4.C.a
Packet Pg. 504 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Combining Statement of Cash Flows - Nonmajor Enterprise Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers $ 1,447,431 $ 9,906,979 $ 2,743,745 $ - Cash payments for materials and services (21,086) (3,630,173) (1,317,891) (157,619) Cash payments to employees for services - (4,046,032) (1,255,642) (350) Cash paid for claims and related services - (1,080,341) (201,077) - Other receipts (disbursements) 7 219,452 85,100 -
Net cash provided by (used for)
operating activities 1,426,352 1,369,885 54,235 (157,969)
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfers in 10,731 3,788,197 672,461 -
Transfers out (1,668,366) (70,703) (24,395) -
Sales tax proceeds 879,634 5 - -
Net cash provided by (used for)
noncapital financing activities (778,001) 3,717,499 648,066 -
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition and construction of capital assets (102,836) (473,092) - - Net cash provided by (used for)
capital and related financing activities (102,836) (473,092) - -
CASH FLOWS FROM INVESTING ACTIVITIES
Investment income 598,691 439,050 213,951 19,264
Net cash provided by (used for)
investing activities 598,691 439,050 213,951 19,264
Net increase (decrease) in
cash and cash equivalents 1,144,206 5,053,342 916,252 (138,705) Cash and cash equivalents-beginning 10,626,721 9,763,417 4,265,475 373,646 Cash and cash equivalents-ending $ 11,770,927 $ 14,816,759 $ 5,181,727 $ 234,941
RECONCILIATION OF CASH AND CASH
EQUIVALENTS TO THE STATEMENT OF
NET POSITION
Cash and investments $ 1,855,897 $ 14,526,549 $ 5,120,419 $ 234,941 Restricted cash and investments 9,915,030 290,210 61,308 - Total cash and cash equivalents $ 11,770,927 $ 14,816,759 $ 5,181,727 $ 234,941 Business-Type Activities
Stormwater
Management
Fund Pier Fund Cemetery Fund
Parking
Authority Fund
CITY OF SANTA MONICA, CALIFORNIA
Combining Statement of Cash Flows
Nonmajor Enterprise Funds
For the Year Ended June 30, 2025
190
4.C.a
Packet Pg. 505 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for
RECONCILIATION OF OPERATING INCOME
(LOSS) TO NET CASH PROVIDED BY (USED
FOR) OPERATING ACTIVITIES
Operating income (loss) $ 993,675 $ 941,515 $ (68,002) $ (174,443) Adjustments to reconcile operating income
(loss) to net cash provided by (used for)
operating activities:
Depreciation/amortization expense 432,130 478,518 41,534 16,263 Other non-operating revenue received 7 219,452 85,100 - (Increase) decrease in accounts receivable 540 95,784 (145,665) - Increase (decrease) in accounts payable - (166,823) 154,819 211 Increase (decrease) in accrued liabilities - (12,958) (2,043) - Increase (decrease) in unearned revenue - (7,855) - -
Increase (decrease) in deposits payable from restricted assets - (13,295) - -
Increase (decrease) in compensated absences
payable - 74,615 28,559 -
Increase (decrease) in net pension liability and
related changes in deferred outflows and
inflows of resources - (226,493) (33,895) -
Increase (decrease) in net OPEB liability and
related changes in deferred outflows and
inflows of resources - (12,575) (6,172) -
Total adjustments 432,677 428,370 122,237 16,474
Net cash provided by (used for)
operating activities $ 1,426,352 $ 1,369,885 $ 54,235 $ (157,969)
SCHEDULE OF NON-CASH NONCAPITAL,
CAPITAL, AND INVESTING ACTIVITIES
Capital assets acquired through accounts
payable - 26,034 - -
Business-Type Activities
Stormwater
Management
Fund Pier Fund Cemetery Fund
Parking
Authority Fund
CITY OF SANTA MONICA, CALIFORNIA
Combining Statement of Cash Flows
Nonmajor Enterprise Funds
For the Year Ended June 30, 2025
191
4.C.a
Packet Pg. 506 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers $ 14,098,155
Cash payments for materials and services (5,126,769)
Cash payments to employees for services (5,302,024)
Cash paid for claims and related services (1,281,418)
Other receipts (disbursements) 304,559
Net cash provided by (used for)
operating activities 2,692,503
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfers in 4,471,389
Transfers out (1,763,464)
Sales tax proceeds 879,639
Net cash provided by (used for)
noncapital financing activities 3,587,564
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition and construction of capital assets (575,928) Net cash provided by (used for)
capital and related financing activities (575,928)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment income 1,270,956
Net cash provided by (used for)
investing activities 1,270,956
Net increase (decrease) in
cash and cash equivalents 6,975,095
Cash and cash equivalents-beginning 25,029,259
Cash and cash equivalents-ending $ 32,004,354
RECONCILIATION OF CASH AND CASH
EQUIVALENTS TO THE STATEMENT OF
NET POSITION
Cash and investments $ 21,737,806
Restricted cash and investments 10,266,548
Total cash and cash equivalents $ 32,004,354
Business-Type
Activities
Totals
CITY OF SANTA MONICA, CALIFORNIA
Combining Statement of Cash Flows
Nonmajor Enterprise Funds
For the Year Ended June 30, 2025
192
4.C.a
Packet Pg. 507 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for
RECONCILIATION OF OPERATING INCOME
(LOSS) TO NET CASH PROVIDED BY (USED
FOR) OPERATING ACTIVITIES
Operating income (loss) $ 1,692,745
Adjustments to reconcile operating income
(loss) to net cash provided by (used for)
operating activities:
Depreciation/amortization expense 968,445
Other non-operating revenue received 304,559
(Increase) decrease in accounts receivable (49,341)
Increase (decrease) in accounts payable (11,793)
Increase (decrease) in accrued liabilities (15,001)
Increase (decrease) in unearned revenue (7,855)
Increase (decrease) in deposits payable from restricted assets (13,295) Increase (decrease) in compensated absences
payable 103,174
Increase (decrease) in net pension liability and
related changes in deferred outflows and
inflows of resources (260,388)
Increase (decrease) in net OPEB liability and
related changes in deferred outflows and
inflows of resources (18,747)
Total adjustments 999,758
Net cash provided by (used for)
operating activities $ 2,692,503
SCHEDULE OF NON-CASH NONCAPITAL,
CAPITAL, AND INVESTING ACTIVITIES
Capital assets acquired through accounts
payable $ 26,034
Business-Type
Activities
Totals
CITY OF SANTA MONICA, CALIFORNIA
Combining Statement of Cash Flows
Nonmajor Enterprise Funds
For the Year Ended June 30, 2025
193
4.C.a
Packet Pg. 508 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Internal Service Fund Financial Statements
Internal Service Funds are used to account for the financing of goods or services provided by one department to other departments of the City or to other governments, on a cost-reimbursement basis.
Vehicle Management Fund – To account for user charges from other funds and expenses related to the replacement, maintenance and the fueling of various City vehicles, including specialized mechanical equipment.
Information Technology Replacement and Services Fund – To account for user charges from other funds and expenses related to replacement of computer equipment.
Self-Insurance, General Liability and Auto Fund – To account for user charges from other funds and expenses related to the administration and payment of general liability and auto claims.
Self-Insurance, Bus Fund – To account for user charges from the Big Blue Bus Fund and expenses related to the administration and payment of municipal bus lines liability claims.
Self-Insurance, Risk Management Administration Fund – To account for user charges from other funds and expenses related to the administration of the risk management division.
Self-Insurance, Workers' Compensation Fund – To account for user charges from other funds and expenses related to the administration and payment of workers' compensation claims.
CITY OF SANTA MONICA, CALIFORNIA
194
4.C.a
Packet Pg. 509 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Combining Statement of Net Position - Internal Service Funds ASSETS
Current assets:
Cash and investments (note 2) $ 49,705,206 $ - $ 14,904,455 $ 4,035,629 Receivables:
Accounts 25,426 - - 250
Interest 337,153 1,846 83,843 26,483
Inventory 2,790 - - -
Total current assets 50,070,575 1,846 14,988,298 4,062,362 Noncurrent:
Capital assets, net of depreciation and
amortization 22,198,110 1,300,299 163,033 163,033
Total assets 72,268,685 1,302,145 15,151,331 4,225,395
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows from pensions 1,062,870 - - -
Deferred outflows from OPEB 51,753 - - -
Total deferred outflows of resources 1,114,623 - - -
LIABILITIES
Current liabilities:
Accounts payable 2,334,590 282,076 1,115,916 37,560
Accrued liabilities 193,797 - - -
Contracts payable (retained percentage) - 6,553 2,908 - Due to other funds (note 17) - 266,605 - -
Compensated absences, due within one year (note 8) 166,422 - - - Claims payable, due within one year (note 9) - - 8,888,835 4,094,581 Subscription liability, due within one year (note 6) 20,837 325,079 37,222 37,222 Total current liabilities 2,715,646 880,313 10,044,881 4,169,363 Noncurrent liabilities:
Compensated absences, due in more than
one year (note 8) 113,135 - - -
Claims payable, due in more than one year (note 9) - - 11,149,430 5,041,275 Subscription liability, due in more than one year (note 6) 75,508 762,565 87,444 87,444
Net OPEB liability, due in more than one year 76,427 - - - Net pension liability, due in more than one year 3,443,789 - - - Total noncurrent liabilities 3,708,859 762,565 11,236,874 5,128,719 Total liabilities 6,424,505 1,642,878 21,281,755 9,298,082
DEFERRED INFLOWS OF RESOURCES
Deferred inflows from pensions 57,805 - - -
Deferred inflows from OPEB 55,333 - - -
Total deferred inflows of resources 113,138 - - -
NET POSITION
Net investment in capital assets 19,601,501 212,655 38,367 38,367 Unrestricted 47,244,164 (553,388) (6,168,791) (5,111,054) Total net position $ 66,845,665 $ (340,733) $ (6,130,424) $ (5,072,687) Vehicle
Management
Information
Technology
Replacement
and Services
Self-Insurance,
General
Liability / Auto
Self-Insurance
Bus
CITY OF SANTA MONICA, CALIFORNIA
Combining Statement of Net Position
Internal Service Funds
June 30, 2025
195
4.C.a
Packet Pg. 510 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for ASSETS
Current assets:
Cash and investments (note 2) $ 3,190,365 $ 62,283,021 $ 134,118,676 Receivables:
Accounts 11,216 3,625 40,517
Interest - 474,472 923,797
Inventory - - 2,790
Total current assets 3,201,581 62,761,118 135,085,780
Noncurrent:
Capital assets, net of depreciation and
amortization 60,300 258,127 24,142,902
Total assets 3,261,881 63,019,245 159,228,682
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows from pensions 630,084 - 1,692,954
Deferred outflows from OPEB 31,454 - 83,207
Total deferred outflows of resources 661,538 - 1,776,161
LIABILITIES
Current liabilities:
Accounts payable 460 682,315 4,452,917
Accrued liabilities 147,764 - 341,561
Contracts payable (retained percentage) - 55,224 64,685 Due to other funds (note 17) - - 266,605
Compensated absences, due within one year (note 8) 150,268 - 316,690 Claims payable, due within one year (note 9) - 10,750,347 23,733,763 Subscription liability, due within one year (note 6) - 64,549 484,909 Total current liabilities 298,492 11,552,435 29,661,130 Noncurrent liabilities:
Compensated absences, due in more than
one year (note 8) 84,273 - 197,408
Claims payable, due in more than one year (note 9) - 42,869,944 59,060,649 Subscription liability, due in more than one year (note 6) - 146,736 1,159,697 Net OPEB liability, due in more than one year 46,451 - 122,878 Net pension liability, due in more than one year 2,041,525 - 5,485,314 Total noncurrent liabilities 2,172,249 43,016,680 66,025,946 Total liabilities 2,470,741 54,569,115 95,687,076
DEFERRED INFLOWS OF RESOURCES
Deferred inflows from pensions 34,267 - 92,072
Deferred inflows from OPEB 33,630 - 88,963
Total deferred inflows of resources 67,897 - 181,035
NET POSITION
Net investment in capital assets 60,300 46,842 19,998,032 Unrestricted 1,324,481 8,403,288 45,138,700
Total net position $ 1,384,781 $ 8,450,130 $ 65,136,732 Self-Insurance
Risk Management
Admin
Self-Insurance
Workers'
Compensation
Total Internal
Service
Funds
CITY OF SANTA MONICA, CALIFORNIA
Combining Statement of Net Position
Internal Service Funds
June 30, 2025
196
4.C.a
Packet Pg. 511 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Combining Combining Statement of Revenues, Expenses and Changes in Net Position - Internal Service Funds Vehicle
Management
Information
Technology
Replacement
and Services
Self-Insurance,
General
Liability / Auto
Self-Insurance
Bus
OPERATING REVENUES
Charges for services $ 20,988,675 $ 3,068,414 $ 26,096,101 $ 5,200,000 Total operating revenues 20,988,675 3,068,414 26,096,101 5,200,000
OPERATING EXPENSES
Personnel services 3,797,246 - - -
Administrative indirect 1,050,697 - - -
Contractual services 347,578 - 11,847 2,927
Repairs and maintenance 2,590,701 - 47,313 47,313
Materials and supplies 1,763,760 3,434,706 - -
Utilities 131,771 - - -
Casualty property and liability costs 391,691 - - -
Claims expense net of claims reserve
adjustment - - 10,515,417 4,572,373
Insurance and bonds - - 4,409,115 4,409,115
Miscellaneous fees and costs - - 5,644,290 318,457
Depreciation and amortization 3,666,393 284,924 42,442 42,442 Other 329,105 - 696 81
Total operating expenses 14,068,942 3,719,630 20,671,120 9,392,708 Operating income (loss) 6,919,733 (651,216) 5,424,981 (4,192,708)
NONOPERATING REVENUES
(EXPENSES)
Investment income 2,495,332 11,099 598,598 203,120
Interest expense (4,888) (32,604) (8,009) (8,009)
Gain on disposal of capital assets (26,898) - - -
Other nonoperating revenues 14,795 1,224 - -
Total nonoperating revenues (expenses) 2,478,341 (20,281) 590,589 195,111 Income (loss) before capital contributions
and transfers 9,398,074 (671,497) 6,015,570 (3,997,597) Transfers in - - - -
Transfers out (4,923) - (696,433) (464,346)
Change in net position 9,393,151 (671,497) 5,319,137 (4,461,943) Net position-beginning 57,479,752 330,764 (11,449,561) (610,744) Change in accounting principle (27,238) - - -
Net position-beginning, as restated 57,452,514 330,764 (11,449,561) (610,744) Net position-ending $ 66,845,665 $ (340,733) $ (6,130,424) $ (5,072,687)
CITY OF SANTA MONICA, CALIFORNIA
Combining Statement of Revenues, Expenses and Changes in Net Position Internal Service Funds
For the Year Ended June 30, 2025
197
4.C.a
Packet Pg. 512 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Self-Insurance
Risk
Management
Admin
Self-Insurance
Workers'
Compensation
Total Internal
Service
Funds
OPERATING REVENUES
Charges for services 7,923,139 14,065,042 77,341,371
Total operating revenues 7,923,139 14,065,042 77,341,371
OPERATING EXPENSES
Personnel services 1,976,120 - 5,773,366
Administrative indirect 661,006 - 1,711,703
Contractual services 1,776 870,060 1,234,188
Repairs and maintenance 7,397 47,513 2,740,237
Materials and supplies 35,195 1,404,700 6,638,361
Utilities 634 - 132,405
Casualty property and liability costs 69,581 - 461,272
Claims expense net of claims reserve adjustment - 17,275,734 32,363,524 Insurance and bonds 6,936,263 866,263 16,620,756
Miscellaneous fees and costs - 531,986 6,494,733
Depreciation and amortization - 71,271 4,107,472
Other 210 6,917 337,009
Total operating expenses 9,688,182 21,074,444 78,615,026 Operating income (loss) (1,765,043) (7,009,402) (1,273,655)
NONOPERATING REVENUES
(EXPENSES)
Investment income - 3,567,404 6,875,553
Interest expense - (12,731) (66,241)
Gain on disposal of capital assets - - (26,898)
Other nonoperating revenues - 815,903 831,922
Total nonoperating revenues (expenses) - 4,370,576 7,614,336 Income (loss) before capital contributions
and transfers (1,765,043) (2,638,826) 6,340,681
Transfers in 3,037,594 - 3,037,594
Transfers out (1,696) (1,973,471) (3,140,869)
Change in net position 1,270,855 (4,612,297) 6,237,406
Net position-beginning 165,964 13,062,427 58,978,602
Change in accounting principle (52,038) - (79,276)
Net position-beginning, as restated 113,926 13,062,427 58,899,326 Net position-ending $ 1,384,781 $ 8,450,130 $ 65,136,732
CITY OF SANTA MONICA, CALIFORNIA
Combining Statement of Revenues, Expenses and Changes in Net Position Internal Service Funds
For the Year Ended June 30, 2025
198
4.C.a
Packet Pg. 513 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Combining Statement of Cash Flows - Internal Service Funds
CASH FLOWS FROM OPERATING
ACTIVITIES
Cash received from customers $ 21,049,523 $ 3,068,414 $ 26,096,101 $ 5,199,750 Cash payments for materials and services (3,524,322) (3,346,804) (5,494,505) (379,122) Cash payments to employees for services (4,891,240) - - - Cash paid for claims and related services (391,691) - (17,518,670) (5,811,208) Other revenue received 14,795 1,224 - -
Net cash provided by (used for)
operating activities 12,257,065 (277,166) 3,082,926 (990,580)
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfers in - - - -
Transfers out (4,923) - (696,433) (464,346)
Advances from other funds - 266,605 - -
Net cash provided by (used for)
noncapital financing activities (4,923) 266,605 (696,433) (464,346)
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Acquisition and construction of capital
assets (12,178,570) (287,407) - -
Payments on long-term obligations (19,109) - (35,410) (35,410) Interest on SBITA liability (4,888) (32,604) (8,008) (8,010) Proceeds from sale of capital assets 176,400 - - -
Net cash provided by (used for)
capital and related financing activities (12,026,167) (320,011) (43,418) (43,420)
CASH FLOWS FROM INVESTING
ACTIVITIES
Investments income 2,440,711 (34,703) 604,296 215,719
Net cash provided by (used for)
investing activities 2,440,711 (34,703) 604,296 215,719 Net increase (decrease) in
cash and cash equivalents 2,666,686 (365,275) 2,947,371 (1,282,627) Cash and cash equivalents-beginning 47,038,520 365,275 11,957,084 5,318,256 Cash and cash equivalents-ending $ 49,705,206 $ - $ 14,904,455 $ 4,035,629
RECONCILIATION OF CASH AND CASH
EQUIVALENTS TO THE STATEMENT
OF NET POSITION
Cash and investments $ 49,705,206 $ - $ 14,904,455 $ 4,035,629 Total cash and cash equivalents $ 49,705,206 $ - $ 14,904,455 $ 4,035,629 Vehicle
Management
Information
Technology
Replacement
and Services
Self-Insurance,
General
Liability / Auto
Self-Insurance
Bus
CITY OF SANTA MONICA, CALIFORNIA
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2025
199
4.C.a
Packet Pg. 514 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for
RECONCILIATION OF OPERATING
INCOME (LOSS) TO NET CASH
PROVIDED BY (USED FOR) OPERATING
ACTIVITIES
Operating income (loss) $ 6,919,733 $ (651,216) $ 5,424,981 $ (4,192,708) Adjustments to reconcile operating income
(loss) to net cash provided by (used for)
operating activities:
Depreciation/amortization expense 3,666,393 284,924 42,442 42,442 Other non-operating revenue received 14,795 1,224 - -
(Increase) decrease in accounts receivable 60,848 - - (250) (Increase) decrease in inventories (165) - - -
Increase (decrease) in accounts payable 1,638,758 87,902 209,641 (10,344) Increase (decrease) in accrued liabilities (55,762) - - - Increase (decrease) in compensated
absences payable 13,853 - - -
Increase (decrease) in claims payable - - (2,594,138) 3,170,280 Increase (decrease) in net pension liability
and related changes in deferred outflows
and inflows of resources 12,081 - - -
Increase (decrease) in net OPEB liability
and related changes in deferred outflows
and inflows of resources (13,469) - - -
Total adjustments 5,337,332 374,050 (2,342,055) 3,202,128 Net cash provided by (used for)
operating activities $ 12,257,065 $ (277,166) $ 3,082,926 $ (990,580)
SCHEDULE OF NON-CASH NONCAPITAL,
CAPITAL, AND INVESTING ACTIVITIES
Capital assets acquired through accounts
payable $ 2,500,266 $ - $ - $ -
Vehicle
Management
Information
Technology
Replacement
and Services
Self-Insurance,
General
Liability / Auto
Self-Insurance
Bus
CITY OF SANTA MONICA, CALIFORNIA
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2025
200
4.C.a
Packet Pg. 515 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for
CASH FLOWS FROM OPERATING
ACTIVITIES
Cash received from customers $ 14,061,417 $ 7,918,968 $ 77,394,173 Cash payments for materials and services (1,868,143) (45,186) (14,658,082) Cash payments to employees for services - (2,907,279) (7,798,519) Cash paid for claims and related services (14,445,008) (7,005,844) (45,172,421) Other revenue received 815,903 - 831,922
Net cash provided by (used for)
operating activities (1,435,831) (2,039,341) 10,597,073
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfers in - 3,037,594 3,037,594
Transfers out (1,973,471) (1,696) (3,140,869)
Advances from other funds - - 266,605
Net cash provided by (used for)
noncapital financing activities (1,973,471) 3,035,898 163,330
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Acquisition and construction of capital
assets - - (12,465,977)
Payments on long-term obligations (61,407) - (151,336)
Interest on SBITA liability (12,731) - (66,241)
Proceeds from sale of capital assets - - 176,400
Net cash provided by (used for)
capital and related financing activities (74,138) - (12,507,154)
CASH FLOWS FROM INVESTING
ACTIVITIES
Investments income 3,634,532 - 6,860,555
Net cash provided by (used for)
investing activities 3,634,532 - 6,860,555
Net increase (decrease) in
cash and cash equivalents 151,092 996,557 5,113,804
Cash and cash equivalents-beginning 62,131,929 2,193,808 129,004,872 Cash and cash equivalents-ending $ 62,283,021 $ 3,190,365 $ 134,118,676
RECONCILIATION OF CASH AND CASH
EQUIVALENTS TO THE STATEMENT
OF NET POSITION
Cash and investments $ 62,283,021 $ 3,190,365 $ 134,118,676 Total cash and cash equivalents $ 62,283,021 $ 3,190,365 $ 134,118,676 Self-Insurance
Workers'
Compensation
Self-Insurance
Risk
Management
Admin Totals
CITY OF SANTA MONICA, CALIFORNIA
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2025
201
4.C.a
Packet Pg. 516 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for
RECONCILIATION OF OPERATING
INCOME (LOSS) TO NET CASH
PROVIDED BY (USED FOR) OPERATING
ACTIVITIES
Operating income (loss) $ (7,009,402) $ (1,765,043) $ (1,273,655) Adjustments to reconcile operating income
(loss) to net cash provided by (used for)
operating activities:
Depreciation/amortization expense 71,271 - 4,107,472
Other non-operating revenue received 815,903 - 831,922
(Increase) decrease in accounts receivable (3,625) (4,171) 52,802 (Increase) decrease in inventories - - (165)
Increase (decrease) in accounts payable 461,047 26 2,387,030 Increase (decrease) in accrued liabilities - (41,716) (97,478) Increase (decrease) in compensated
absences payable - (66,399) (52,546)
Increase (decrease) in claims payable 4,228,975 - 4,805,117 Increase (decrease) in net pension liability
and related changes in deferred outflows
and inflows of resources - (213,554) (201,473)
Increase (decrease) in net OPEB liability
and related changes in deferred outflows
and inflows of resources - 51,516 38,047
Total adjustments 5,573,571 (274,298) 11,870,728
Net cash provided by (used for)
operating activities $ (1,435,831) $ (2,039,341) $ 10,597,073
SCHEDULE OF NON-CASH NONCAPITAL,
CAPITAL, AND INVESTING ACTIVITIES
Capital assets acquired through accounts
payable $ - $ - $ 2,500,266
Self-Insurance
Workers'
Compensation
Self-Insurance
Risk
Management
Admin Totals
CITY OF SANTA MONICA, CALIFORNIA
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2025
202
4.C.a
Packet Pg. 517 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for
STATISTICAL SECTION
203
4.C.a
Packet Pg. 518 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Financial Trends
204
4.C.a
Packet Pg. 519 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Net Position by Component - Last Ten Fiscal Years
2024-25 2023-24 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 Governmental activities
Net investment in capital assets $ 683,001,476 $ 690,573,384 $ 699,711,314 $ 703,702,731 $ 764,429,080 $ 756,311,492 $ 730,135,331 $ 720,769,829 $ 731,842,870 $ 728,041,792 Restricted 317,950,027 293,020,050 246,970,883 249,522,456 238,658,192 228,300,303 226,867,281 209,428,190 198,720,012 196,524,874 Unrestricted (51,207,758) (52,734,370) (67,454,550) (18,778,603) (143,731,308) (56,670,932) 14,716,293 54,400,893 44,676,618 19,956,676 Total governmental activities net position $ 949,743,745 $ 930,859,064 $ 879,227,647 $ 934,446,584 $ 859,355,964 $ 927,940,863 $ 971,718,905 $ 984,598,912 $ 975,239,500 $ 944,523,342 Business-type activities
Net investment in capital assets $ 451,627,151 $ 446,843,126 $ 448,201,794 $ 449,639,654 $ 442,507,176 $ 454,015,095 $ 453,239,103 $ 437,613,109 $ 445,314,626 $ 440,369,455 Restricted 11,267,386 11,465,972 11,400,071 12,468,628 13,030,039 17,045,768 19,925,028 23,409,084 18,835,497 12,797,570 Unrestricted 108,458,572 106,911,558 111,923,217 108,593,242 71,173,841 118,563,055 157,216,757 136,350,263 127,841,169 130,752,666 Total business-type activities net position $ 571,353,109 $ 565,220,656 $ 571,525,082 $ 570,701,524 $ 526,711,056 $ 589,623,918 $ 630,380,888 $ 597,372,456 $ 591,991,292 $ 583,919,691 Primary government
Net investment in capital assets $ 1,134,628,627 $ 1,137,416,510 $ 1,147,913,108 $ 1,153,342,385 $ 1,206,936,256 $ 1,210,326,587 $ 1,183,374,434 $ 1,158,382,938 $ 1,177,157,496 $ 1,168,411,247 Restricted 329,217,413 304,486,022 258,370,954 261,991,084 251,688,231 245,346,071 246,792,309 232,837,274 217,555,509 209,322,444 Unrestricted 57,250,814 54,177,188 44,468,667 89,814,639 (72,557,467) 61,892,123 171,933,050 190,751,156 172,517,787 150,709,342 Total primary government net position $ 1,521,096,854 $ 1,496,079,720 $ 1,450,752,729 $ 1,505,148,108 $ 1,386,067,020 $ 1,517,564,781 $ 1,602,099,793 $ 1,581,971,368 $ 1,567,230,792 $ 1,528,443,033 TABLE 1
CITY OF SANTA MONICA, CALIFORNIA
Net Position by Component
Last Ten Fiscal Years
(Accrual Basis of Accounting)
205
4.C.a
Packet Pg. 520 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Changes in Net Position - Last Ten Fiscal Years
Expenses
Governmental activities:
General government $ 78,057,192 $ 65,506,624 $ 184,667,357 $ 74,357,887 $ 131,655,331 $ 83,627,840 $ 87,251,208 $ 94,164,749 $ 69,476,662 $ 56,728,329 Public safety 209,191,172 195,559,306 168,661,471 128,036,677 168,577,199 171,485,637 160,531,648 152,313,163 133,497,286 128,149,081 General services 107,156,523 120,403,250 101,306,682 80,590,295 67,174,450 95,598,940 85,528,797 85,543,024 84,190,176 84,178,175 Housing and community services (3) 130,976,599 101,260,869 96,338,256 87,796,120 80,831,581 75,276,083 73,315,694 73,826,217 57,709,552 58,427,336 Library 12,370,179 13,446,435 11,128,065 7,932,667 9,390,658 15,023,233 14,985,755 14,802,469 12,945,988 14,338,093 Community development (4) 35,341,579 42,373,451 38,792,026 30,964,869 39,576,169 67,260,671 60,314,000 58,442,889 54,613,906 59,633,639 Interest on long-term debt 3,510,405 3,720,772 3,915,676 6,232,438 5,091,436 5,146,663 6,187,333 4,375,324 2,490,698 2,668,433 Total governmental activities 576,603,649 542,270,707 604,809,533 415,910,953 502,296,824 513,419,067 488,114,435 483,467,835 414,924,268 404,123,086 Business-type activities:
Water 42,965,620 35,156,866 32,762,823 22,488,694 50,202,882 21,651,904 23,490,062 25,659,062 23,583,279 23,259,781 Resource recovery and recycling 37,761,322 40,599,050 30,249,175 26,523,962 28,722,152 29,322,186 27,292,721 26,293,628 25,512,992 25,419,861 Community broadband (5) — — 1,966,747 2,318,193 3,215,379 3,065,926 2,519,298 1,926,149 1,907,535 — Pier 8,890,830 9,025,424 8,445,424 6,544,111 7,596,392 8,448,065 9,265,493 7,880,131 7,597,438 6,935,901 Wastewater 29,492,026 24,764,489 19,815,970 17,254,412 19,841,075 17,751,175 20,423,956 18,802,613 17,855,472 16,485,444 Airport 23,670,657 28,162,406 13,026,450 6,095,503 9,820,280 12,477,436 9,627,471 12,912,869 8,595,011 5,335,556 Storm water management 453,216 481,984 484,618 361,328 363,288 1,206,606 380,752 359,488 347,197 2,447,698 Cemetery 2,957,412 2,640,605 2,152,201 2,640,281 2,546,151 2,273,113 1,805,703 2,071,650 2,340,685 2,184,834 Big Blue Bus 105,009,401 101,175,931 93,269,045 82,123,817 93,473,973 100,300,186 100,093,505 95,349,727 93,652,844 90,560,535 Parking authority 174,443 17,904 55,174 73,733 1,724,894 27,937 422,090 216,253 16,178 17,742 Total business-type activities 251,374,927 242,024,659 202,227,627 166,424,034 217,506,466 196,524,534 195,321,051 191,471,570 181,408,631 172,647,352 Total primary governmental activities expenses $ 827,978,576 $ 784,295,366 $ 807,037,160 $ 582,334,987 $ 719,803,290 $ 709,943,601 $ 683,435,486 $ 674,939,405 $ 596,332,899 $ 576,770,438 Program revenues
Governmental activities:
Charges for services:
General government $ 26,242,185 $ 22,883,781 $ 24,151,280 $ 18,739,301 $ 19,883,077 $ 20,087,674 $ 19,645,270 $ 19,860,025 $ 18,447,588 $ 19,279,411 Public safety 19,181,063 16,563,171 17,802,681 20,418,346 17,035,556 17,918,929 21,765,362 24,701,782 22,452,698 24,285,947 General services 34,540,598 38,071,724 42,059,670 40,579,634 37,249,257 39,978,065 45,214,114 43,938,775 44,701,036 49,336,541 Housing and community services (3) 24,810,273 10,497,671 12,687,121 13,398,797 5,019,411 19,145,932 23,412,204 25,508,247 20,835,717 22,466,168 Library 64,006 148,098 70,858 22,037 23,764 260,503 437,269 390,306 388,273 487,809 Community development (4) 26,997,462 34,561,144 38,863,317 31,204,393 27,194,589 28,859,612 25,710,747 26,517,764 29,898,563 42,858,129 Operating grants and contributions 58,038,091 85,819,070 53,759,943 62,437,151 58,477,255 41,367,622 32,835,027 28,012,480 27,933,580 24,647,506 Capital grants and contributions 23,840,327 147,029 16,841,083 2,639,762 640,520 1,506,048 5,863,192 5,378,290 9,756,158 12,616,479 Total governmental activities program revenues 213,714,005 208,691,688 206,235,953 189,439,421 165,523,429 169,124,385 174,883,185 174,307,669 174,413,613 195,977,990 (continues next page)
2024-25 2023-24 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 TABLE 2
CITY OF SANTA MONICA, CALIFORNIA
Change in Net Position
Last Ten Fiscal Years
206
4.C.a
Packet Pg. 521 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual (continues from previous page)
Business-type activities:
Charges for services:
Water 46,106,241 40,874,059 37,747,817 34,281,775 29,638,341 27,872,084 26,851,412 25,946,122 24,280,023 22,311,686 Resource recovery and recycling 39,541,395 35,744,144 29,033,038 27,347,038 26,842,779 27,630,068 27,444,457 26,393,055 25,953,777 26,831,010 Community broadband (5) — — 3,227,637 2,779,595 3,299,401 3,301,563 2,489,716 2,200,733 1,924,777 — Pier 9,445,078 10,261,391 8,793,254 6,909,894 3,164,586 8,547,985 9,188,924 8,453,618 8,202,073 7,443,351 Wastewater 23,537,938 22,091,422 21,118,917 19,249,781 17,330,719 18,366,169 19,626,512 19,802,308 20,221,930 19,316,170 Airport 13,846,413 16,931,568 17,268,226 17,306,908 15,946,198 16,148,655 15,690,488 14,132,521 13,149,493 8,679,711 Storm water management 1,446,891 1,368,933 1,379,997 1,419,613 1,609,230 1,370,311 1,515,810 1,462,683 1,869,476 1,500,877 Cemetery 2,889,410 2,397,381 2,490,123 2,763,983 2,443,201 1,789,748 1,730,351 2,043,185 1,713,212 1,501,371 Big Blue Bus 8,746,191 10,428,571 9,233,294 12,320,388 5,366,846 14,194,438 16,313,026 25,552,378 19,202,854 19,895,338 Operating grants and contributions 66,037,778 63,012,297 62,677,568 58,306,953 63,900,481 59,740,351 59,339,434 44,278,243 48,313,010 48,652,428 Capital grants and contributions 15,615,014 14,173,294 10,816,878 16,080,850 4,623,832 10,047,937 23,851,525 17,959,046 23,062,625 23,924,743 Business-type activities program revenues 227,212,349 217,283,060 203,786,749 198,766,778 174,165,614 189,009,309 204,041,655 188,223,892 187,893,250 180,056,685 Total primary government program revenues 440,926,354 425,974,748 410,022,702 388,206,199 339,689,043 358,133,694 378,924,840 362,531,561 362,306,863 376,034,675 Net (expense):
Governmental activities (362,889,644) (333,579,019) (398,573,580) (226,471,532) (336,773,395) (344,294,682) (313,231,250) (309,160,166) (240,510,655) (208,145,096) Business-type activities (24,162,578) (24,741,599) 1,559,122 32,342,744 (43,340,852) (7,515,225) 8,720,604 (3,247,678) 6,484,619 7,409,333 Total primary government net expense (387,052,222) (358,320,618) (397,014,458) (194,128,788) (380,114,247) (351,809,907) (304,510,646) (312,407,844) (234,026,036) (200,735,763) General revenues and other changes
in net position
Governmental activities:
Taxes:
Business license 37,117,978 39,471,644 31,429,074 29,120,949 33,644,559 33,894,714 31,947,056 31,575,297 30,711,579 30,799,020 Property 85,970,092 84,157,162 79,661,790 75,980,972 75,324,679 67,791,186 62,615,270 56,954,925 56,423,891 50,452,377 Transient occupancy (2) 63,318,760 65,860,928 67,627,280 66,684,095 20,691,803 48,624,638 60,762,881 60,631,025 55,532,325 51,021,050 Sales and use 72,412,063 72,813,915 78,509,804 76,698,693 64,301,901 64,665,646 73,709,191 68,479,438 54,505,239 54,802,839 Utility users (2) 36,618,147 36,660,336 36,507,565 33,613,985 27,840,035 28,026,008 28,306,582 29,288,341 29,437,753 30,772,815 Real property transfer (2) 35,012,952 10,394,602 10,660,607 17,845,968 9,334,371 6,856,663 9,808,072 8,169,163 10,951,756 7,850,960 Parking facility (2) 14,124,830 11,139,618 10,757,242 9,966,669 7,374,354 11,072,445 12,699,044 11,557,811 11,231,324 10,718,156 Other 4,187,528 4,062,890 4,032,635 3,670,376 3,512,898 3,441,908 3,275,912 3,285,670 3,256,799 3,111,764 Other revenues 11,807,873 32,579,525 17,209,916 8,833,338 7,201,899 9,263,443 11,328,286 11,168,233 11,724,228 15,572,745 Investment earnings 25,903,758 22,130,218 2,080,860 (13,385,275) 3,268,921 14,397,259 21,569,426 4,360,799 3,105,772 7,049,816 Special Item — — — — (9,825,000) (34,215,371) — 43,678,729 (1,103,146) (11,893,876) Extraordinary gain (loss) — — — — — — — — — (12,620,539) Transfers (486,920) 740,785 15,980,546 (8,444,909) 27,184,761 46,698,101 (15,670,477) 1,381,459 5,449,293 6,969,835 Total governmental activities 385,987,061 380,011,623 354,457,319 300,584,861 269,855,181 300,516,640 300,351,243 330,530,890 271,226,813 244,606,962 (continues next page)
2024-25 2023-24 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 TABLE 2
CITY OF SANTA MONICA, CALIFORNIA
Change in Net Position
Last Ten Fiscal Years
207
4.C.a
Packet Pg. 522 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual (continues from previous page)
Business-type activities:
Other revenues 8,851,898 8,832,157 18,285,766 2,850,537 3,165,760 7,068,596 3,049,645 4,580,112 4,312,287 3,723,521 Investment earnings 21,865,495 12,444,614 3,217,196 (6,796,320) 280,080 7,810,542 7,051,704 1,573,331 1,620,842 3,489,865 Special Item — — — — — (1,422,782) — 6,408,992 1,103,146 10,617,561 Extraordinary gain (loss) — — — — — — — — — 4,837,753
Transfers 486,920 (740,785) (15,980,546) 8,444,909 (27,184,761) (46,698,101) 15,670,477 (1,381,459) (5,449,293) (6,969,835) Total business-type activities 31,204,313 20,535,986 5,522,416 4,499,126 (23,738,921) (33,241,745) 25,771,826 11,180,976 1,586,982 15,698,865 Total primary government 417,191,374 400,547,609 359,979,735 305,083,987 246,116,260 267,274,895 326,123,069 341,711,866 272,813,795 260,305,827 Changes in net position
Governmental activities 23,097,417 46,432,604 (44,116,261) 74,113,329 (66,918,214) (43,778,042) (12,880,007) 21,370,724 30,716,158 36,461,866 Business-type activities 7,041,735 (4,205,613) 7,081,538 36,841,870 (67,079,773) (40,756,970) 34,492,430 7,933,298 8,071,601 23,108,198 Total primary government $ 30,139,152 $ 42,226,991 $ (37,034,723) $ 110,955,199 $ (133,997,987) $ (84,535,012) $ 21,612,423 $ 29,304,022 $ 38,787,759 $ 59,570,064 (1) Civic auditorium merged with General services in FY 13-14. (2) Included in "Other" in prior fiscal years.
(3) Community services restructured to Housing and community services in FY 23-24. (4) Housing and community development restructured to Community development in FY 20-21. (5) Community broadband merged with General services in FY 23-24. 2024-25 2023-24 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 TABLE 2
CITY OF SANTA MONICA, CALIFORNIA
Change in Net Position
Last Ten Fiscal Years
208
4.C.a
Packet Pg. 523 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Fund Balance of Governmental Funds - Last Ten Fiscal Years 2024-25 2023-24 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 General Fund
Nonspendable $ 7,638,117 $ 7,442,409 $ 6,744,392 $ 6,621,586 $ 9,550,950 $ 13,326,312 $ 11,554,753 $ 12,853,565 $ 15,419,253 $ 21,062,205 Restricted 4,964,372 9,471,443 8,549,468 20,275,914 11,119,497 21,447,581 69,975,839 97,740,458 1,976,576 18,330,042 Committed — — — — — 1,671,078 1,943,558 2,478,476 4,760,409 31,365 Assigned 93,330,348 106,258,256 85,885,175 143,217,685 114,285,898 143,176,947 182,199,922 256,273,855 256,059,633 280,303,334 Unassigned 62,119,894 51,427,463 45,246,268 39,819,682 45,891,477 46,922,135 75,004,708 66,464,774 68,082,651 67,347,773 Total General Fund 168,052,731 174,599,571 146,425,303 209,934,867 180,847,822 226,544,053 340,678,780 435,811,128 346,298,522 387,074,719 All other governmental funds
Nonspendable 20,904,444 18,843,892 17,402,941 16,927,948 18,962,549 14,914,052 13,864,136 12,752,261 12,149,082 11,618,768 Restricted 286,738,670 265,789,451 227,134,170 229,749,420 217,524,477 210,347,503 209,832,078 192,169,730 184,752,868 167,750,111 Committed 113,956,285 107,472,302 112,322,146 122,607,616 114,924,058 100,981,037 80,754,976 59,897,829 44,021,082 26,876,316 Assigned — — — — — — — — 414,544 927,562
Unassigned (22,390,196) (15,928,011) (11,391,758) (24,944,343) (21,394,804) (2,018,186) (3,571,636) (2,111,163) (4,785,448) (7,279,890) Total all other governmental funds $ 399,209,203 $ 376,177,634 $ 345,467,499 $ 344,340,641 $ 330,016,280 $ 324,224,406 $ 300,879,554 $ 262,708,657 $ 236,552,128 $ 199,892,867 TABLE 3
CITY OF SANTA MONICA, CALIFORNIA
Fund Balance of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
209
4.C.a
Packet Pg. 524 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Changes in Fund Balance of Governmental Funds - Last Ten Fiscal Years Revenues
Property taxes $ 85,970,092 $ 84,082,967 $ 79,661,790 $ 75,980,972 $ 75,324,679 $ 67,791,186 $ 62,615,270 $ 56,954,925 $ 56,423,891 $ 50,452,377 Sales & use taxes 72,412,063 72,813,915 78,509,804 76,698,693 64,301,901 64,665,646 73,709,191 68,479,438 54,505,239 54,802,839 Transient occupancy taxes (1) 63,318,760 65,860,928 67,627,280 66,684,095 20,691,803 48,624,638 60,762,881 60,631,025 55,532,325 51,021,050 Utility user taxes (1) 36,618,147 34,975,996 35,031,946 33,613,985 27,840,035 28,026,008 28,306,582 29,288,341 29,437,753 30,772,815 Real property transfer taxes 35,012,952 47,447,802 11,850,607 - - - - - - - Business license taxes (1) 38,479,130 38,110,492 31,429,074 29,120,949 33,644,559 33,894,714 31,947,056 31,050,087 30,118,555 29,893,341 Parking facility taxes 14,124,830 11,139,618 10,757,242 - - - - - - - Other taxes 4,187,528 4,062,890 4,032,635 31,483,013 20,221,623 21,371,016 25,783,028 23,537,854 26,032,957 22,586,559 Licenses and permits 34,819,883 36,080,294 36,259,967 35,467,794 26,160,634 38,618,898 45,099,447 41,950,905 43,134,856 41,367,924 Intergovernmental 80,331,299 54,969,378 72,275,868 66,323,553 58,616,587 43,236,083 38,315,887 37,496,608 39,612,637 39,612,770 Charges for services 77,233,865 70,653,438 68,057,085 63,632,758 54,316,862 61,396,593 65,847,661 66,615,431 63,821,708 61,667,576 Fines and forfeitures 11,214,264 12,094,497 13,641,865 12,262,875 7,779,862 10,357,155 14,877,572 16,362,857 15,461,662 15,904,736 Investment earnings 21,726,679 18,847,722 1,954,927 (11,152,035) 3,173,678 12,759,040 20,487,980 3,406,372 2,835,151 6,721,207 Interest from promissory note - - - - 5,399,246 - - - - - Rental income 8,574,618 10,430,263 10,266,439 8,621,072 6,133,385 9,104,387 8,986,944 9,596,580 9,047,246 11,683,408 Settlement income 22,797 16,560,500 124,550 28,456 - - - 14,085,000 6,103,175 2,433,175 Other 9,429,506 7,621,251 24,747,195 13,720,392 8,292,026 15,913,257 13,220,933 15,896,665 18,757,976 34,384,558 Total revenue 593,476,413 585,751,951 546,228,274 502,486,572 411,896,880 455,758,621 489,960,432 475,352,088 450,825,131 453,304,335 Expenditures
Current
General government 77,810,894 78,623,860 68,453,405 65,624,157 61,731,457 137,222,743 105,337,602 89,671,970 70,164,311 61,354,272 Public safety 196,400,353 184,666,967 180,495,417 155,246,791 153,941,421 173,587,760 168,292,252 144,607,883 136,266,910 132,629,455 General services 83,490,309 115,144,901 106,506,485 104,202,365 116,514,243 78,127,241 83,416,269 87,758,312 83,912,385 88,130,346 Housing & Community services 125,961,759 95,428,696 93,227,611 89,561,907 83,984,895 82,917,053 71,499,049 71,348,237 56,868,240 54,742,936 Library 11,554,231 11,308,551 10,121,904 8,718,163 8,806,350 13,034,198 13,663,753 12,967,345 12,476,127 12,667,433 Community development 27,684,528 38,960,306 37,268,220 31,514,756 33,008,898 62,374,714 56,563,679 56,248,372 53,807,030 67,085,802 Capital outlay 38,869,828 - - - - - - - - -
Debt service
Principal 8,379,813 7,131,981 6,125,856 2,895,000 3,305,000 4,755,000 4,630,000 9,039,900 6,255,000 8,788,463 Interest 7,975,561 5,213,190 5,354,276 5,387,582 6,054,223 6,785,313 6,310,437 3,596,620 3,014,688 3,392,287 Bond issuance costs - - - 498,057 340,135 - 4,025 938,932 - 535,048 Total expenditures 578,127,276 536,478,452 507,553,174 463,648,778 467,686,622 558,804,022 509,717,066 476,177,571 422,764,691 429,326,042 (continues next page)
(continues from previous page)
2024-25 2023-24 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 TABLE 4
CITY OF SANTA MONICA, CALIFORNIA
Changes in Fund Balance of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
210
4.C.a
Packet Pg. 525 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Excess (deficiency) of revenues
over (under) expenditures 15,349,137 49,273,499 38,675,100 38,837,794 (55,789,742) (103,045,401) (19,756,634) (825,483) 28,060,440 23,978,293 Other financing sources (uses)
Transfers in 37,176,712 33,973,569 75,638,843 46,490,737 75,609,011 73,508,634 46,580,497 41,609,095 48,828,408 24,241,261 Transfers out (38,029,626) (34,356,152) (53,407,978) (55,113,011) (48,577,094) (27,057,385) (83,785,317) (40,405,415) (43,585,095) (17,271,426) Subscription Proceeds - 4,462,464 2,311,329 - - - - - - - Bonds issued 1,988,506 - - 64,780,000 19,700,000 - - 102,785,000 - - Premium on bonds issued - - - 7,714,767 3,711,635 - - 12,247,767 - 2,020,710 Payments to refunded bond escrow agent - - - - (23,066,482) - - - - (27,826,666) - - - - - - - - - -
Total other financing sources (uses) 1,135,592 4,079,881 24,542,194 63,872,493 27,377,070 46,451,249 (37,204,820) 116,236,447 5,243,313 7,523,879 Special item - - (125,600,000) (54,900,000) (9,825,000) (34,195,723) - - (37,420,689) (4,462,166) Extraordinary gain (loss) - - - (5,376,172) - - - - - 324,615 Net change in fund balance $ 16,484,729 $ 53,353,380 $ (62,382,706) $ 42,434,115 $ (38,237,672) $ (90,789,875) $ (56,961,454) $ 115,410,964 $ (4,116,936) $ 27,364,621 Debt service as a percentage of noncapital
expenditures (2) 2.97% 2.36% 2.40% 1.90% 2.27% 2.49% 2.41% 2.91% 2.33% 3.16% (1) Included in "Other taxes" in prior fiscal years.
(2) Calculation includes only the principal and interest components of debt service expenditures when calculating this ratio for all years. 2024-25 2023-24 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 TABLE 4
CITY OF SANTA MONICA, CALIFORNIA
Changes in Fund Balance of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
211
4.C.a
Packet Pg. 526 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Revenue Capacity
212
4.C.a
Packet Pg. 527 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for General Fund Tax Revenues by Source - Last Ten Fiscal Years Source 2024-25 2023-24 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 Sales and use taxes $ 72,412 $ 72,814 $ 78,510 $ 76,699 $ 64,302 $ 64,666 $ 73,709 $ 68,480 $ 54,505 $ 54,803 Utility user taxes 36,618 34,976 36,508 33,614 27,840 28,026 28,307 29,288 29,438 30,773 Transient occupancy taxes 63,319 65,861 67,627 66,684 20,692 48,625 60,763 60,631 55,532 51,021 Property taxes (2) 85,970 84,083 79,662 75,981 75,325 67,791 62,615 56,955 56,424 50,452 Business license taxes 38,479 38,110 31,429 29,121 33,645 33,895 31,947 31,575 30,712 30,799 Parking facility tax 14,125 11,140 10,757 9,967 7,374 11,072 12,699 11,558 11,231 10,718 Documentary Transfer Tax (3) 10,216 10,395 10,661 17,846 9,334 6,857 9,808 8,169 10,952 7,851 Vehicle license fees 147 115 96 107 68 74 44 49 42 38
Condominium taxes 4 — 218 60 3 43 25 9 38 73
Total $ 321,290 $317,494 $315,468 $310,079 $ 238,583 $261,049 $279,917 $ 266,714 $ 248,874 $ 236,528 (1) Does not include Highway Users Taxes, which are recorded in the Gas Tax Fund, Unit Dwelling Taxes, which are recorded in the Parks and Recreation Facilities Fund, or TORCA Conversion Taxes, which are recorded in the TORCA Fund. (2) Includes ad valorem property taxes for purposes of paying debt service on general obligation bonds. Does not include tax increment received by redevelopment area. (3) Does not include Measure GS tax which is recorded in the Measure GS fund Source: City of Santa Monica Finance Department
TABLE 5
CITY OF SANTA MONICA, CALIFORNIA
General Fund Tax Revenues by Source (1)
Last Ten Fiscal Years
(In Thousands)
213
4.C.a
Packet Pg. 528 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Assessed Value and Actual Value of Taxable Property - Last Ten Fiscal Years 214
4.C.a
Packet Pg. 529 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Direct and Overlapping Property Tax Rates - Last Ten Fiscal Years Fiscal City County School Miscellaneous
year General Fund General Fund districts special districts Total 2024-25 $ 0.01 $ 1.00 $ 0.15 — $ 1.16
2023-24 0.01 1.00 0.15 — 1.16
2022-23 0.01 1.00 0.16 — 1.17
2021-22 0.01 1.00 0.16 — 1.17
2020-21 0.01 1.00 0.16 — 1.17
2019-20 0.01 1.00 0.17 — 1.18
2018-19 0.01 1.00 0.12 — 1.13
2017-18 0.01 1.00 0.14 — 1.15
2016-17 0.01 1.00 0.13 — 1.14
2015-16 0.01 1.00 0.13 — 1.14
* Property tax rate is per $100 of assessed value. Since 1978-79, the maximum allowable rate is levied by the County, property taxes are collected by the County, and the County allocates the City's share in accordance with distribution formulas established by law. Effective 1981-82, Proposition 13 allowed jurisdictions to impose rates over the $1.00 base rate only for bonded debt approved by the voters prior to 1978. However, in 1986, the State Constitution was amended to allow rates over the $1.00 base rate for voter approved general obligation bonds.
City General Fund is allocated approximately $.14 of each $1.00 of the County General Fund amount.
Source: Los Angeles County Auditor-Controller
TABLE 7
CITY OF SANTA MONICA, CALIFORNIA
Direct and Overlapping Property Tax Rates*
Last Ten Fiscal Years
215
4.C.a
Packet Pg. 530 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Principal Property Taxpayers - Current Fiscal Year and Nine Years Ago 216
4.C.a
Packet Pg. 531 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Property Tax Levies and Collections - Last Ten Fiscal Years 217
4.C.a
Packet Pg. 532 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Taxable Transactions by Type of Business - Last Ten Calendar Years 218
4.C.a
Packet Pg. 533 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Debt Capacity Information
219
4.C.a
Packet Pg. 534 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Ratios of Outstanding Debt by Type - Last Ten Fiscal Years Governmental activities Business-type activities
Fiscal
year
General
obligation
bonds
Lease revenue
bonds
Term loans
payable (2) SBITA Water bonds
Term loans
payable SBITA
Total primary
government
Percentage of
net assessed
valuation (1) Per capita
2024-25 $ — $ 209,941,944 — 7,248,674 $ 74,583,415 50,685,509 445,110 $ 342,904,652 0.65 % $ 3,679 2023-24 — 217,924,702 — 5,845,863 76,282,777 52,068,703 923,421 353,045,466 0.72 % 3,795 2022-23 — 224,416,033 — 3,120,182 77,927,139 52,981,570 1,331,723 359,776,647 0.77 % 3,923 2021-22 1,060,000 228,880,218 — — 78,191,500 53,330,029 — 361,461,747 0.82 % 3,940 2020-21 2,273,237 159,348,210 — — 2,389,951 28,079,704 — 192,091,102 0.46 % 2,060 2019-20 3,506,472 162,504,543 — — 4,764,846 5,550,789 — 176,326,650 0.45 % 1,896 2018-19 4,754,709 166,858,953 200,000 — 7,074,741 855,820 — 179,744,223 0.48 % 1,944 2017-18 6,012,945 171,078,364 400,000 — 9,304,636 661,765 — 187,457,710 0.54 % 2,028 2016-17 7,281,181 64,474,634 400,000 — 9,404,529 921,636 — 82,481,980 0.25 % 879 2015-16 8,554,417 69,944,367 400,000 — 9,504,426 1,213,411 — 89,616,621 0.29 % 957 Note: Details regarding the City's outstanding debt can be found in Note 10 of the Financial Statements.
All bonds amounts are updated to reflect net of related premiums, discounts, and adjustments. (1) Net assessed property valuations have been used because personal income is not available. See Table 6 for net assessed valuations. (2) Redevelopment debt was transferred to the Successor Agency on February 1, 2012.
TABLE 11
CITY OF SANTA MONICA, CALIFORNIA
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
220
4.C.a
Packet Pg. 535 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Ratios of General Bonded Debt - Last Ten Fiscal Years
221
4.C.a
Packet Pg. 536 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Direct and Overlapping Governmental Activities Debt
222
4.C.a
Packet Pg. 537 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Computation of Legal Debt Margin - Last Ten Fiscal Years 223
4.C.a
Packet Pg. 538 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Water Enterprise Revenue Bonds Coverage - Last Four Fiscal Years Direct Net revenue
Fiscal Gross operating available for Debt service requirement year revenues expense (1) debt service Principal Interest Total Coverage (2) 2024-25 $ 46,238,326 $ 36,241,681 $ 9,996,645 $ 1,435,000 $ 2,118,187 $ 3,553,187 2.81 2023-24 $ 40,874,059 $ 34,668,111 $ 6,205,948 $ 1,380,000 $ 2,174,488 $ 3,554,488 1.75 2022-23 $ 37,747,817 $ 29,736,607 $ 8,011,210 $ — $ 2,202,087 $ 2,202,087 3.64 2021-22 $ 34,259,154 $ 26,054,538 $ 8,204,616 $ — $ 954,237 $ 954,237 8.60 CUSIP 802490
(1) Excludes depreciation expense, write-off of disposed assets, and capital-related expenses (2) Bond covenant requires a coverage ratio of 1.20
The Water Enterprise Revenue Bonds were issued August 25, 2021 at an interest rate from 2.25% to 4.00% with a rating of AAA from Standard & Poor's Corporation. Debt service began in FY 2021-22.
TABLE 15
CITY OF SANTA MONICA, CALIFORNIA
Water Enterprise Revenue Bonds Coverage
Last Four Fiscal Years
224
4.C.a
Packet Pg. 539 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Demographic and Economic Information
225
4.C.a
Packet Pg. 540 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Demographics and Economic Statistics - Last Ten Calendar Years ** ** **
Calendar Personal income (2) Per capita Unemployment
year Population (1) (millions) personal income (3) rate (4) 2025 93,212 $ * $ * 5.9 %
2024 93,034 818,509 83,888 6.2
2023 91,720 1,035,420 80,898 5.2
2022 ** 91,739 987,909 76,760 4.6
2021 93,242 977,062 75,332 7.0
2020 92,995 917,714 69,637 10.1
2019 92,480 851,031 64,282 4.3
2018 92,416 806,415 60,689 4.4
2017 93,834 775,686 58,274 4.5
2016 93,640 748,382 56,280 5.1
Note:
2016-2023 Personal income data shown is the Metropolitan Statistical Area of Los Angeles-Long Beach-Santa Ana, CA. As of 2024, data includes Los Angeles only.
Data by City is not available.
Population and unemployment rate are for Santa Monica
* No data is available for 2025 as of publication date of ACFR ** Data revised per source
Source: (1) California Department of Finance
(2) and (3) Bureau of Economic Analysis
(4) State of California, Employment Development Department, Labor Market Information Division
TABLE 16
CITY OF SANTA MONICA, CALIFORNIA
Demographic and Economic Statistics
Last Ten Calendar Years
226
4.C.a
Packet Pg. 541 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Principal Employers - Current Year and Nine Years Ago
227
4.C.a
Packet Pg. 542 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Operating Information
228
4.C.a
Packet Pg. 543 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for Full-time Equivalent City Government Employees by Function/Program - Last Ten Fiscal Years Function/Program 2024-25 2023-24 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 General government 429.1 427.2 277.2 269.2 250.3 273.5 276.7 277.6 269.7 281.5 Public safety
Police
Sworn 232.0 228.0 221.0 221.0 223.0 229.0 227.0 224.0 224.0 221.0 Non-sworn 178.6 178.1 176.6 174.1 165.8 203.4 203.4 201.4 202.4 202.4 Fire
Sworn 121.0 121.0 122.0 122.0 120.0 120.0 120.0 120.0 120.0 114.0 Non-sworn 16.4 16.4 16.0 15.0 14.0 16.0 16.0 17.0 16.0 15.8 General services 220.0 217.5 214.5 208.0 210.0 270.5 282.0 281.0 281.6 257.3 Housing and community services — — 120.1 118.5 98.2 150.3 152.7 152.7 152.7 153.0 Library 74.3 72.9 68.0 58.3 47.8 112.0 113.5 113.5 112.5 111.0 Community development 103.0 100.0 96.5 97.5 88.5 174.3 164.8 163.2 161.5 159.5 Beach recreation 47.3 46.3 46.3 41.1 35.5 53.3 52.6 52.6 50.5 50.3 Water 58.0 53.0 52.0 52.0 51.0 47.0 47.0 46.0 46.0 46.0 Resource Recovery & Recycling 105.0 105.0 93.9 89.9 81.0 88.3 91.3 92.3 90.7 89.7 Pier 16.9 16.9 16.9 16.9 16.9 21.9 21.9 21.9 20.3 19.3
Wastewater 22.0 22.0 20.0 20.0 21.0 21.0 21.0 22.0 22.2 22.2 Airport 18.0 18.0 17.0 17.0 14.0 15.9 20.9 27.9 37.9 12.9 Cemetery 7.4 7.4 7.0 7.0 7.0 7.0 7.0 8.0 8.1 7.1
Big Blue Bus 440.3 438.2 435.3 414.8 410.8 450.0 463.0 464.0 462.9 464.5 Vehicle management 23.0 21.0 21.0 21.0 21.0 29.3 29.3 29.3 29.0 29.0 Self insurance - workers' compensation 12.5 12.5 12.0 11.0 10.0 13.0 13.0 13.0 13.0 13.0 Community Broadband — — 6.0 5.0 4.0 3.0 3.0 4.0 4.0 —
Total all funds 2,124.8 2,101.4 2,039.3 1,979.3 1,889.8 2,298.7 2,326.1 2,331.4 2,325.0 2,269.5 Note: Includes permanent and temporary employees (2,080 hours = 1 full-time position).
Source: City of Santa Monica Budget
TABLE 18
CITY OF SANTA MONICA, CALIFORNIA
Full-Time Equivalent City Government Employees by Function/Program Last Ten Fiscal Years
229
4.C.a
Packet Pg. 544 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Operating Indicators by Function/Program - Last Ten Fiscal Years 230
4.C.a
Packet Pg. 545 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Capital Asset Statistics by Function/Program - Last Ten Fiscal Years Function / program 2024-25 2023-24 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 Public safety:
Number of police vehicles 257 254 252 250 244 245 237 243 235 (1) 232 Number of fire vehicles 79 71 72 73 70 71 71 67 67 71
Number of fire stations 5 5 5 5 5 5 5 5 (6) 4 4
Number of police substations including Public Safety Facility 4 4 4 4 4 3 3 3 3 3 General services:
Square footage of asphalt paved streets 30,968,078 30,968,078 30,968,078 30,191,740 30,191,740 30,191,740 30,191,740 30,170,740 30,170,740 30,170,740 Square footage of concrete paved streets 1,183,981 1,183,981 1,183,981 1,183,981 1,183,981 1,183,981 1,183,981 1,177,981 1,177,981 1,177,981 Square footage of sidewalks 8,686,573 8,675,573 8,675,573 8,620,831 8,620,831 8,620,831 8,451,871 8,451,871 8,451,871 8,451,871 Square footage of curbs and gutters 1,939,804 1,939,804 1,939,804 1,938,820 1,938,820 1,938,820 1,938,820 1,938,420 1,938,420 (2) 1,938,420 Cultural and recreation services:
Number of beach parking lots 16 16 16 16 16 16 16 16 16 (3) 16 Number of parks 32 31 31 31 31 31 31 31 30 29
Number of swim centers 2 2 2 2 2 2 2 2 2 2
Library:
Number of facilities: main and branches 5 5 5 5 5 5 5 5 5 5 Community development:
Downtown structure visitors 3,576,731 3,876,685 3,897,642 3,566,171 2,740,785 4,104,583 (8) 5,171,173 5,339,806 5,753,204 (4) 6,722,688 Water:
Number of feet of water main installed 0 (11) 1,600 6,828 10,822 10,822 10,822 (9) 4,825 4,500 (7) 2,269 (5) 2,495 Water main system (in miles) 211 211 211 211 211 205 205 205 205 205 Reclaimed water main system (in miles) 6 6 6 6 6 5 5 5 5 5 Wastewater:
City sewage flow in million gallons/day 16 12 12 11 12 14 14 13.8 14.2 13.9 Sewer main system (in miles) 155 155 155 155 155 152 152 151 151 151 Stormwater:
Daily gallons treated for recycling by SMURRF 0 (10) 0 (10) 0 (10) 212,399 171,746 193,250 186,732 180,699 159,740 160,059 Storm drain system (in miles) 59 59 59 59 59 59 59 59 59 59 Airport:
Aircraft operations (departures and arrivals) 64,081 55,300 62,259 74,935 63,870 67,205 74,511 74,130 83,471 89,217 Big Blue Bus:
Number of buses 193 194 195 195 178 189 195 199 200 200 (1) Includes police patrol boat, Mobile Command Center, and SUVs (to eventually replace old Crown Victorias). (2) Per Engineers, curbs and gutters are in linear feet. Thus, use approximate factor of 2 to convert from linear feet to square feet. (3) 1650 Appian is residental parking only and has been removed from count. (4) 2017 Downtown Community Plan (DCP) Downtown perimeter: Wilshire Blvd (north), Lincoln Blvd (east), I-10 Freeway (south), Ocean Avenue (west). - includes Parking Structures 1-8, Main Library Parking Structure, Ken Edwards Center - excludes Parking Structure 9, Civic Center Parking Lot, Civic Center Parking Structure - includes transient (“daily”) visitor parking and does not include monthly permit parkers (5) Per Engineers, this total is lower compared to prior years because no water main CIP was started this year. (6) Per Fire, there were 4 permanent and 1 temporary station @ Station #4 for FY17/18. (7) Total updated per Engineering.
(8) Per PCD this count now includes monthly permit parkers. (9) Per Engineers, Water department doubled linear feet on new projects as part of self sufficiency goal. (10) Per Water Administrator, SMURRF was shutdown due to SWIP upgrades for FY22-23, FY23-24, and FY24-25. (11) Per Water Administrator, water mains were in design in FY25 to be constructed in FY26.
Sources: Various City departments.
TABLE 20
CITY OF SANTA MONICA, CALIFORNIA
Capital Asset Statistics by Function/Program
Last Ten Fiscal Years
231
4.C.a
Packet Pg. 546 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual
4.C.a
Packet Pg. 547 Attachment: Attachment A - Annual Comprehensive Financial Report [Revision 3] (7458 : Annual Comprehensive Financial Report (ACFR) for
LSLCPAS.COM
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Honorable Members of the City Council
City of Santa Monica, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Santa Monica, California (hereafter, the City), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated March 3, 2026.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements, on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements.
However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.