Torrance City Council
March 4, 2025

10D
Date:

March 4, 2025
Honorable Mayor and Members of the City Council To:

By: Finance and Governmental Operations Committee
Subject: Finance and Governmental Operations Committee – Accept and File Annual Comprehensive Financial Report for Fiscal Year Ended 2023-24, Accept and File Fiscal Year 2024-25 Mid-Year Budget Review Report, and Approve Proposed Program Modifications. Expenditure: None.

RECOMMENDATION
Recommendation of the Finance and Governmental Operations Committee that City Council:
1) Accept and File Annual Comprehensive Financial Report for Fiscal Year Ended 2023-2024; and
2) Accept and file the Fiscal Year 2024-25 Mid-Year Budget Review Report; and 3) Approve the proposed program modification in the Community Development Department’s fiscal year 2024-25 General Fund operating budget; and
4) Approve the proposed increase to the General Fund’s fiscal year 2024 -25 operating revenue budget in the amount of $250,000; and
5) Approve the proposed increase to the General Fund’s fiscal year 2024 -25 operating expenditure budget in the amount of $250,000; and
6) Approve the proposed increase to the Airport Fund’s fiscal year 2024 -25 operating revenue budget in the amount of $2,000,000; and
7) Approve the proposed increase to the Airport Fund’s fiscal year 2024 -25 operating expenditure budget in the amount of $2,000,000; and
8) Approve the proposed increase to the Water Fund’s fiscal year 2024-25 operating revenue budget in the amount of $3,900,000; and
9) Approve the proposed increase to the Water Fund’s fiscal year 2024 -25 operating expenditure budget in the amount of $3,900,000.

FUNDING

None required.

DISCUSSION

Annual Comprehensive Financial Report (ACFR)

As required by the City Charter, financial statements are prepared by the City’s Finance Department staff and audited by independent Certified Public Accountants annually. On June 22, 2021, City Council awarded a consulting services agreement to Vasquez & Company 1 City Council
March 4, 2025

LLP (Auditor) of Glendale, CA to provide external auditing services for the fiscal years ending 2021, 2022 and 2023. On June 4, 2024, City Council approved a second amendment to extend the contract term through June 21, 2025. The ACFR is comprised of the C ity’s audited financial statements which communicate its financial position and activity for each fiscal year ended June 30 in accordance with the Generally Accepted Accounting Principles (GAAP) financial reporting framework. The GAAP financial reporting framework is set forth by the Governmental Accounting Standards Board (GASB), an independent agency responsible for determining current accounting and financial reporting standards for U.S. state and local government entities.

The Auditor has performed the audit of the ACFR for the fiscal year ended June 30, 2024 (Attachment 1), and issued an unmodified audit opinion as of December 26, 2024, stating that the financial statements present fairly in all material respects, in accord ance with GAAP. In addition to receiving an unmodified audit opinion, the quality of the City’s financial reporting is also measured by the Certificate of Achievement for Excellence in Financial Reporting (Certificate of Achievement). This Certificate of Achievement is awarded by the Government Finance Officers Association of the United States and Canada (GFOA) and is valid for a one-year period. The City has received this award annually since 1987 and was most recently recognized for the fiscal year ended June 30, 2023. Staff believe the City continues to meet the GFOA’s Certificate of Achievement program requirements and have once again submitted the ACFR for the fiscal year ended June 30, 2024, for consideration.

Financial Highlights for Fiscal Year 2023-24 Audited Year-End Results

General Fund

The City’s General Fund revenues increased by $15.6 million or 6.0% from the prior fiscal year.

General Fund revenues are broken down into seven (7) main categories, of which the City experienced increases in three (3) categories in fiscal year 2023 -24 (FY 23-24). The largest revenue source in the General Fund is Taxes, which increased $9.7 million or 4.4%. This was primarily driven by the increase in Sales Tax, mainly due to FY23-24 being the first full fiscal year since the passage of Measure SST which ena cted transaction and use tax starting October 1, 2022. Measure SST generated $25.7 million in fiscal year 2023-24 compared to $18.1 million in FY22-23. Property Tax revenues also increased primarily due to growth in the City’s net taxable assessed property values.

The second largest revenue source in the General Fund is Charges for Current Services, which increased $4.5 million or 21.4%. This is mainly attributable to the increase in emergency transport fees in the Fire department, building and zoning fees in the Community Development department, and recreational program fees in the Community Services department. The third largest revenue source in the General Fund is Licenses, Fees and Permits, which decreased $0.5 million to $5.2 million in FY23 -24, compared to $5. 7 million in FY22 -23. This decrease is primarily due to the normalizing of building and inspection fees in the Community Development department after a significant spike in FY22-23.

General Fund expenditures increased $15.8 million from $225.2 million in FY22 -23 to $241.0 million in FY234-24. This increase was mainly driven by an increase in Public Safety of $5.0 million or 3.5%, increase in non-departmental of $4.4 million, and increase in Public Works of $2.3 million. Public Safety and Public Works expenditures increased mainly due to the increase in salaries as well as contribution to the Self Insurance Fund for liability and workers compensation 2 City Council
March 4, 2025

claims. Non-department expenditures increased primarily due to investments in subscription-based information technology.

The fund balance in General Fund increased $41.7 million to a fund balance of $120.1 in FY23-24, up from growth of $21.5 million and a fund balance of $78.4 in FY22 -23. The increase in fund balance growth is primarily due to a decrease in transfers out resulting from one -time transfers to the Self-Insurance and Fleet Services funds in FY22-23.

Self-Insurance Fund

The City’s Self-Insurance Fund had an increase in net position of $2.0 million or 3.7%, which is primarily due to a one-time transfer of $2.0 million from General Fund to address its underfunded status. As of June 30, 2024, the fund balance deficit was $52.1 million. This is driven by existing outstanding liabilities in workers’ compensation claims of $52.7 million and general liability claims of $14.8 million. As of June 30, 2024, the cash balance in this fund was $21.5 million. The City has made progress with the City’s Self-Insurance fund with FY24-25 being the first year that the adopted budget was structurally balanced, this will help prevent further deterioration of the fund’s balance. It is anticipated that one-time contributions can be made over time to rebuild the deficit fund balance in the City’s Self-Insurance fund balance. This will be of continued area of focus in future budget cycles to ensure the City is prepared for funding its exposure. A detailed summary of the Self-Insurance Fund’s audited financial statements is also included in Attachment 1.

While the General Fund realized a notable increase in the ending fund balance for FY23-24, staff believe this is still insufficient given the scale of the City’s operations as a full-service city. Ending General Fund unassigned fund balance for FY23-24 was $78.7 million, which is 31.2% of its total expenditures and transfers out of $252.6 million. The State Auditor’s High-Risk Dashboard, which was discontinued in October 2023, previously required an unassigned fund balance equivalent to six months of operating costs, which translates to 50%, to move from the “moderate risk” category to the “low risk” category. As such, staff will continue to monitor the fiscal health of the City by conducting multi-year projections twice a year to ensure the City remains on a fiscally resilient and sustainable path going forward.

Fiscal Year 2024-25 Mid-Year Budget Review Report

Each year, the Finance Department provides two (2) budget updates on the City’s overall financial performance to the Finance and Governmental Operations Committee. The first report covers financial analysis through September 30, while the second covers through December 31. These reports assess the City’s major funds’ budgets, with an emphasis on the General Fund’s core revenues and expenditures, including year -to-date spending, reserve balances, and projections for the remainder of the fiscal year, alongsid e key economic trends to contextualize the City’s financial status.

Proposed Fiscal Year 2024-25 Mid-Year Program Modifications

The Fiscal Year 2024 -25 Mid -Year Budget Review Report includes proposed program modifications which are summarized below. If approved, these program modifications will have zero net fiscal impact to the City’s budget.

3 City Council
March 4, 2025

Community Development Department

Delete 1.0 FTE Planning Associate and Add 1.0 FTE Senior Planner Expenditure: None.

The Community Development Department is requesting the conversion of 1.0 Full -Time Equivalent (FTE) Planning Associate to 1.0 FTE Senior Planner. On October 29, 2024, the City Council approved the Resolution 2024 -81, which added the position of Senior Plan ner to the Engineers and Torrance Fiscal Employees Association, as a result of removing a 20% premium that was provided to a Planning Associate who was primarily responsible for overseeing major projects and complex administrative cases as assigned. On Jan uary 14, 2025, the City Council approved the proposed Class Specification for Senior Planner. This conversion is the final step in the process and has no fiscal impact, and the program modification is brought for approval to memorialize the conversion of the budgeted position change to align with the Resolution.

Increase General Fund – Community Development Revenue and Expenditure Budget by $250,000

The Community Development Department is requesting to increase the General Fund’s revenue and expenditure operating budget to facilitate collection and payment of expedited plan review services. The Community Development Department Building and Safety Divi sion requires engineering plan reviews of most proposed development projects. It’s not uncommon for applicants to choose expedited plan review service to meet their project schedules or specific needs. These projects range from small single-family additions to large mixed-use developments.

To facilitate the expedited plan reviews, the department uses outside engineering consultants to facilitate the plan reviews. The fee charged to the applicant by the department is matched to the cost associated with the plan review services provided by the outside consultant.

General Services Department

Increase Airport Fund Revenue and Expenditure Budget by $2,000,000

The General Services Department is requesting an increase of $2,000,000 to the Airport Fund – Operating Fund’s revenue and expenditure budget for FY2024 -25. This adjustment is related to reimbursements of litigations costs incurred. Since the litigation is related to leasing of a commercial property outside of the airfield, the reimbursements increase the amount to be transferred to the General Fund Operating Fund; thus, the request is to increase both revenue and expenditure budgets to accommodate the transfers.

Public Works Department

Increase Water Fund Revenue and Expenditure Budget by $3,900,000

The Public Works Department is requesting an increase of $3,900,000 to the Water Fund – Operating Fund’s revenue and expenditure budget for FY2024 -25. This adjustment is related to the purchase of recycled water from the West Basin Municipal Water District (WBMWD), an expense that is fully reimbursed through revenues primarily from the Torrance Refining Company (TRC) and commercial accounts using recycled water for landscape irrigation. The increase is necessary due to significantly higher recycled water rates from WBMWD than initially projected, 4 City Council
March 4, 2025

as well as to cover the full pass -through of fixed service charges levied by WBMWD, which are fully recovered through our monthly billings to TRC.

In accordance with the information provided in this report, the Finance and Governmental Operations Committee recommends that City Council accept and file the Annual Comprehensive Financial Report for the Fiscal Year Ended 2023 -24, accept and file the Fisc al Year 2024 -25 Mid-Year Budget Review Report and approve the proposed program modifications.

ATTACHMENTS

1. FY23-24 General Fund and Self-Insurance Fund Audited Financial Statements Summary

2. FY23-24 Annual Comprehensive Financial Report
(Document link: https://www.torranceca.gov/government/finance/annual-reports)

3. FY24-25 Mid-Year Budget Review Report
(Document link: https://www.torranceca.gov/government/finance/budget-documents)

4. FY24-25 Mid-Year Program Modifications Summary Table

5 ATTACHMENT 1
FY2022-23 Actual FY2023-24 Actual Change ($) Change (%) Revenues:

Taxes 221,590,908 $ 231,322,318 $ 9,731,410 $ 4.4% Sales and use tax 80,730,508 87,643,496 6,912,988 8.6% Property tax 44,156,785 46,285,305 2,128,520 4.8% Property transfer tax 943,943 911,613 (32,330) -3.4% VLF swap & repayment 17,004,729 17,897,819 893,090 5.3% Utility users tax 44,115,724 41,289,435 (2,826,289) -6.4% Business license tax 10,432,709 11,078,225 645,516 6.2% Occupancy tax 12,058,112 12,580,760 522,648 4.3% Franchise tax 10,750,647 12,045,564 1,294,917 12.0% Construction tax 1,082,781 1,308,065 225,284 20.8% Oil severance tax 6,675 4,998 (1,677) -25.1% Other 308,295 277,038 (31,257) -10.1% Licenses, fees and permits 5,665,399 5,257,568 (407,831) -7.2% Fines, forfeitures and penalties 676,656 727,156 50,500 7.5% Use of money and property 4,863,712 10,810,978 5,947,266 122.3% Intergovernmental 521,909 368,968 (152,941) -29.3% Charges for current services 21,010,365 25,460,614 4,450,249 21.2% Other revenues 4,680,816 696,805 (3,984,011) -85.1% Total Revenues 259,009,765 274,644,407 15,634,642 6.0% Expenditures:

General government 30,016,453 31,899,220 1,882,767 6.3% Nondepartmental 5,958,431 10,343,454 4,385,023 73.6% Public safety 143,298,131 148,328,400 5,030,269 3.5% Public works 16,177,824 18,538,439 2,360,615 14.6% Culture and recreation 21,261,299 23,102,457 1,841,158 8.7% Community development 8,294,956 8,600,980 306,024 3.7% Debt Service 213,365 217,996 4,631 2.2% Total Expenditures 225,220,459 241,030,946 15,810,487 7.0% Excess of revenues over (under)
expenditures 33,789,306 33,613,461 (175,845) -0.5% Other financing sources (uses):

Transfers in 20,475,415 14,652,197 (5,823,218) -28.4% Transfers out (33,825,708) (11,605,911) 22,219,797 -65.7% SBITA 1,057,816 5,035,998 3,978,182 376.1% Total other financing sources (uses) (12,292,477) 8,082,284 20,374,761 -165.7% Net change in fund balances 21,496,829 41,695,745 20,198,916 94.0% Beginning fund balances 56,942,382 78,439,211 21,496,829 37.8% Prior period adjustment - - - 0.0% Ending fund balances 78,439,211 120,134,956 41,695,745 53.2% Fund balances:

Nonspendable 2,145,621 2,661,453 515,832 24.0% Restricted 7,024,689 31,039,967 24,015,278 341.9% Assigned 5,848,661 7,684,075 1,835,414 31.4% Unassigned 63,420,240 78,749,461 15,329,221 24.2% Ending fund balances 78,439,211$ 120,134,956 $ 41,695,745 $ 53.2% Statement of Revenues, Expenditures and Changes in Fund Balances General Fund
6 FY2022-23 Actual FY2023-24 Actual Change ($) Change (%) Operating revenues:

Charges for services 17,121,527 $ 20,928,013 $ 3,806,486 $ 22.2% Other 188,193 142,795 (45,398) -24.1% Total operating revenues 17,309,720 21,070,808 3,761,088 21.7% Operating expenses:

Salaries and employee benefits 800,601 883,015 82,414 10.3% Services and supplies 7,696 7,097 (599) -7.8% Other professional services 507,328 445,142 (62,186) -12.3% Insurance and claims 14,880,917 19,504,753 4,623,836 31.1% Depreciation and amortization - - - 0.0% City charges - 205,161 205,161 100.0% Other 5,628 11,745 6,117 108.7% Total operating expenses 16,202,170 21,056,913 4,854,743 30.0% Operating income (loss) 1,107,550 13,895 (1,093,655) -98.7% Nonoperating revenues (expenses):

Investment earnings - - - 0.0% Gain on sale of capital assets - - - 0.0% Interest expense - - - 0.0% Total nonoperating revenues (expenses) - - - 0.0% Net income (loss) before transfers 1,107,550 13,895 (1,093,655) -98.7% Transfers in 7,000,000 2,000,000 (5,000,000) -71.4% Transfers out (6,951) (4,354) 2,597 -37.4% Change in net position 8,100,599 2,009,541 (6,091,058) -75.2% Beginning net position (62,166,388) (54,065,789) 8,100,599 -13.0% Ending net position (54,065,789) (52,056,248) 2,009,541 -3.7% Net position:

Net investment in capital assets - - - 0.0% Unrestricted (54,065,789) (52,056,248) 2,009,541 -3.7% Total net position (54,065,789)$ (52,056,248) $ 2,009,541 $ -3.7% Statement of Revenues, Expenses and Changes in Fund Net Position Internal Service Fund - Self-Insurance Fund
7 ANNUAL Comprehensive

FINANCIAL REPORT

CITY OF TORRANCE, CALIFORNIA
DEPARTMENT OF FINANCE • FISCAL YEAR ENDED JUNE 30, 2024 8 ATTACHMENT 2

ANNUAL COMPREHENSIVE FINANCIAL REPORT
Fiscal Year Ended June 30, 2024

Prepared by
Department of Finance
Sheila Poisson
Finance Director

CITY OF TORRANCE, CALIFORNIA
9 CITY OF TORRANCE, CALIFORNIA
Annual Comprehensive Financial Report
Table of Contents
Page

INTRODUCTORY SECTION
Letter of Transmittal i
Directory of City Officials v
Elected and Appointed Officials vi
City Departments vii
Government Finance Officers Association Certificate of Achievement viii

FINANCIAL SECTION
Independent Auditors Report 1
Management Discussion and Analysis 5
Basic Financial Statements:

Government-Wide Financial Statements:

Statement of Net Position 29
Statement of Activities and Changes in Net Position 30 Governmental Fund Financial Statements:

Balance Sheet – Governmental Funds 34
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 35
Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds 36
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities and Changes in Net Position 37
Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – General Fund 38
Budgetary Comparison Statement – Budget-to-GAAP Reconciliation – General Fund 42 Proprietary Fund Financial Statements:

Statement of Net Position 44
Statement of Revenues, Expenses a nd Changes in Fund Net Position 45 Statement of Cash Flows 46
Fiduciary Fund Financial Statements:

Statement of Net Position – Fiduciary Funds 47
Statement of Changes in Net Position – Fiduciary Funds 48 Notes to the Basic Financial Statements 49
Required Supplementary Information:

Pension Plan:

Schedule of Changes in Total Pensi on Liability and Related Ratios During the Measurement Period 107
Schedule of Plan Contributions 110
PARS Enhanced Retirement Defined Benefit Pension Plan:

Schedule of Changes in Total Pension Liability and Related Ratios During the Measurement Period 112
Schedule of Plan Contributions 113

10 Other Postemployment Benefits:

Schedule of Changes in Total OPEB Liability and Related Ratios During the Measurement Period 114
Schedule of Plan Contributions 115
Combining Financial Statements and Schedules:

Combining Balance Sheet – Nonmajor Governmental Funds 117 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Governmental Funds 118
Combining Balance Sheet – Nonmajor Special Revenue Funds 120 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Special Revenue Funds 124
Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – Nonmajor Special Revenue Funds 128
Combining Balance Sheet – Nonmajor Capital Project Funds 133 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Capital Project Funds 134
Combining Balance Sheet – Nonmajor Debt Service Fund 136 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Debt Service Fund 137
Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – Nonmajor Debt Service Fund 138
Combining Statement of Net Position – Nonmajor Enterprise Fund 140 Combining Statement of Revenues, Expenses and Changes in Fund Net Position – Nonmajor Enterprise Fund 141
Combining Statement of Cash Flows - Nonmajor Enterprise Fund 142 Combining Statement of Net Position - Internal Service Funds 144 Combining Statement of Revenues, Expenses and Changes in Fund Net Position – Internal Service Funds 145
Combining Statement of Cash Flows – Internal Service Funds 146 Combining Statement of Fiduciary Net Position – Custodial Funds 147 Combining Statement of Changes in Fiduciary Net Position – Custodial Funds 148

STATISTICAL SECTION (Not Covered by Independent Auditors’ Report) Overview of Statistical Information Presented in Five Categories 149 Financial Trends:

Net Position by Component – Last Ten Fiscal Years 151
Changes in Net Position – Last Ten Fiscal Years 153
Fund Balances of Governmental Funds – Last Ten Fiscal Years 154 Changes in Fund Balances of Governmental

Funds – Last Ten Fiscal Years
155
Revenue Capacity:

Assessed Value and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years 156 Direct and Overlapping Property Tax Rates – Last Ten Fiscal Years 157 Principal Property Tax Payers – Current Fiscal Year and Nine Years Ago 158 Property Tax Levies and Collections – Last Ten Fiscal Years 159 Water Sold by Type of Customer – Last Ten Fiscal Years 160 Water Rates – Last Ten Fiscal Years 161
Principal Water Customers – Current Fiscal Year and Nine Years Ago 162 Debt Capacity:

Ratio of Outstanding Debt by Type – Last Ten Fiscal Years 163 Ratio of Net General Bonded Debt Outstanding – Last Ten Fiscal Years 164 Direct and Overlapping Debt – June 30, 2024 165
Legal Debt Margin Information – Last Ten Fiscal Years 166 11 Pledged-Revenue Coverage – Last Ten Fiscal Years 167 Demographic and Economic:

Demographic and Economic Indicators – Last Ten Calendar Years 168 Principal Employers – Current Fiscal Year and Nine Years Ago 169 Operating:

Full-time and Part-time City Employees by Function – Last Ten Fiscal Years 170 Operating Indicators by Function – Last Ten Fiscal Years 171 Capital Asset Indicators by Function – Last Ten Fiscal Years 172

12 INTRODUCTORY SECTION

ANNUAL COMPREHENSIVE FINANCIAL REPORT
13 i

December 26, 2024

Honorable Mayor and City Council
and Citizens of the City of Torrance

In accordance with Section 1100 of the City Charter, the Finance Department hereby submits the Annual Comprehensive Financial Report for the City of Torrance for the fiscal year ended June 30, 2024.

The report has been prepared by the Finance Department in accordance with Generally Accepted Accounting Principles

(GAAP) as set forth in pronouncements of
the Governmental Accounting Stand ards Board (GASB). GASB has primary responsibility for determining current accounting and financial reporting standards for activities and transactions of state and local government entities.

Responsibility for both the accuracy of the data and the completeness and fairness of the presentation rests with the City. The City believes the data is accurately presented in all material respects. The financial data is presented in a manner designed to fairly set forth the financial position and results of operations of the City as measured by the financial activity of its various funds and that all disclosures necessary to enable the reader to gain the maximum understanding of the City's financial activity have been included.

REPORTING ENTITY

The Financial Reporting Entity (the government) includes all the funds and capital assets of the primary government (i.e. the City of Torrance, as legally defined) as well as its financial reporting component units. Financial reporting component units such as the Torrance Public Property Financing and the Torrance Joint Powers Financing Authority are legally separate entities for which the City of Torrance is financially accountable.

THE CITY

The City of Torrance is Los Angeles County's eighth largest city, by population, was founded in 1912, incorporated in 1921, and became a charter city in 1947. The City has a population of 142,910 within a boundary of approximately 21 square miles. The City borders the beautiful Pacific Ocean and is an integral part of the larger regional area known as the South Bay. The City of Torrance provides a wide range of services.

These services include police and fire protection; sanitation, sewer and water services;

CITY OF

TORRANCE
14 ii

a library system; a cultural arts center and gallery; recreational services; a municipal airport and transit bus services; the construction and maintenance of streets and infrastructure; planning and zoning; and general administrative and support services.

ECONOMIC DEVELOPMENT HIGHLIGHTS

The City continues its efforts to support local economic development via its Business Recruiter Program which aims to attract new business operations to the City. In the area of tourism, the number of visitors to Torrance hotels has remained steady with occupancy higher than in neighboring cities. Finally, several developments are underway throughout the City. At 22501 Hawthorne Blvd, the former Gable House Bowl property, a new mixed-use development is under construction, featuring a new 218-unit apartment complex and 12,000 square

feet of commercial space. At 21507
Hawthorne Blvd, plans are underway for a new 200-unit luxury apartment complex. At 21405 Madrona Ave, proposed plans for a new multi-family residential development would feature 274 units for sale. At 2325 Crenshaw Blvd, proposed plans for a new multi-family residential development would feature 272 rental units. At 4501 Torrance Blvd, proposed plans for a new multi-family residential development would feature 50 rental units. This highlights just a few of the major developments underway as the City continues to prioritize numerous efforts to

ensure ongoing growth in the City’s revenue
base.

FINANCIAL FORECAST AND FUTURE OUTLOOK

The financial forecast and future outlook are discussed in greater detail in the Management Discussion and Analysis sect ion of the City’s Annual Comprehensive Financial Report.

As the City emerges from the impacts of the COVID-19 pandemic, its financial status continues to improve. From fiscal year 2019-20 to fiscal year 2023-24, the City’s unassigned fund balance for the General Fund has increased from $581,449 to $78,749,461. This is the result of decisive actions taken in fiscal year 2020-21 through fiscal year 2023-24. Through a combination of one-time sources and recurring budget solutions, the City has structurally balanced its budget as of fiscal year 2023-24.

Increases in the City’s unassigned fund balance for the General Fund has largely been made possible by the passage of Measure SST (½ cent sales tax) which has restored staffing in the police and fire departments; allowed for continued investments in cyber security, homelessness, and public capital improvements; and further fiscal sustainability in the General Fund. In fiscal year 2024-25, the City is budgeted for $25.3 million in Measure SST tax revenue. Staff continue to monitor the fiscal health of the City through multi-year projections. In these projections, CalPERS unfunded accrued liability payments are anticipated to increase substantially over the next decade. To mitigate the impacts of these rising costs, the City has continued to contribute to the CalPERS Section 115 Trust (CEPPT) si nce June 2021, which is projected to have a balance of $39,663,154 at the end of fiscal year 2024-25. It is anticipated that the City will need to make it s first drawdown from the CEPPT fund in fiscal year 2025-26 to smooth out these rising pension costs.

15 iii

The City has made progress with the City’s Self-Insurance fund with fiscal year 2024- 25 being the first year that the adopted budget was structurally balanced. This will help prevent further deterioration of the fund’s balance. It is anticipated that one-time contributions can be made over time to rebu ild the deficit fund balance in the City’s Self-Insurance fund balance. The enterprise funds continue to function well overall.

Water rates were recently reevaluated, and rate increases were approved in November 2024. The Sewer/Wastewater rate increases and Sanitation/Refuse Collection rate increases were approved in December 2022 and June 2023, respectively.

INTERNAL CONTROLS

The City’s management is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the City are protected from loss, theft, or misuse and to ensure that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with GAAP. The internal control structure is designed to provide reasonabl e, but not absolute, assurance that the above-referenced objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a contro l should not exceed the benefits likely to be realized; and (2) the valuation of costs and benefits requires estimates and judgments by management.

BUDGETARY CONTROLS

The City employs a two-year operating budget and a five-year capital budget process.

In year one of the biennial operating bu dget cycle, the City Council adopts authorized appropriations for the first year of the two-year budget and approves “planned” appropriations for the second fiscal year. In year two of the operating budget cycle, the City Council considers revisions and formally adopts authorized appropriations for the second fiscal year. Although the budget cycle covers a two-year period, the City Charter requires City Council to approve the annual appropriations. The City’s Five- Year Capital Budget is updated every two years, with amendments and appropriations done annually, similar to the operating budget based on the financial viability to fund new infrastructure projects.

The City’s annual appropriated budget is established and controlled at the fund and individual organization level (department). The budget is monitored at a more detailed level (program) that closely tracks cos

t. City Manager and Department Directors are
held accountable for meeting the objectives wit

hin each of his or her programs, and for
monitoring the use of budget allocations to ensure compliance with the legal provisions embodied in the annual appropriated budget approved by the City Council.

The City also maintains an encumbrance accounting system as another technique in accomplishing budgetary control. All operating appropriations lapse at year-end to the extent they have not been expended or encumbered. Capital project appropriations lapse when individual projects are closed.

16 iv

INDEPENDENT AUDIT

The City Charter requires an annual audit of the records and accounts of the City by an independent Certified Public Accountan

t. This requirement has been complied with
the auditor’s report which has been included in this report.

AWARDS

The staff of the City of Torrance Finance Department has continued its efforts to improve the method of providing financial information to the elected and appointed officials of the City and to the citizens of Torrance.

The Government Finance Offi cers Association of the United States and Canada (GFOA) awarded a Distinguished Budget Pres entation Award to the City for the fiscal year 2023-24 Adopted Operating Budget and Capital Improvement Plan for the second consecutive year. Included with this designation was a special recognition for Special Long Range Financial Plans. The award is valid for one year only. In order to be awarded a Distinguished Budget Present ation Award an entity must meet the highest principles of governmental budgeting. The City had to satisfy nationally recognized guidelines for effective budget presentation. The guidelines assess how well a budget serves as a policy document, financial plan, operations guide and a communications device.

The GFOA also awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Torrance for its

Annual Comprehensive Financial Report for
the fiscal year ended June 30, 2023. The City has received this award annually since 1987. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized Annual Comprehensive Financial Report.

This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievem

ent is valid for a period of one year only.

We believe our current annual comprehensive financial report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to GFOA to determine its eligibility for another certificate.

OTHERS

The City recommends that the Management Discussion and Analysis section be read in conjunction with the other sections of t he ACFR to obtain an understanding of the City’s financial condition as of June 30, 2024. This section also provides an overview of the City’s financial activities during the fiscal year.

Respectfully submitted,

Sheila Poisson
Finance Director

17 v

CITY OF TORRANCE

DIRECTORY OF CITY OFFICIALS

June 30, 2024

CITY COUNCIL

George K. Chen, Mayor

Dr. Jeremy Gerson Bridgett Lewis
Jon Kaji Aurelio Mattucci
Sharon Kalani Asam Sheikh

CITY CLERK

Rebecca Poirier

CITY TREASURER

Tim Goodrich

ADMINISTRATION

Aram Chaparyan, City Manager
Danny Santana, Assistant City Manager
Sheila Poisson, Finance Director
Patrick Q. Sullivan, City Attorney
Michelle Remirez, Community Development Director
John La Rock, Community Services Director
David Dumais, Fire Chief
Shant Megerdichian, General Services Director
Hedieh Khajavi, Human Resources Director
Andrei Yermakov, Information Technology Director
Jeremiah Hart, Police Chief
Craig Bilezerian, Public Works Director
Kim Turner, Transit Director

18 vi

19 vii

20 viii

21 FINANCIAL SECTION

ANNUAL COMPREHENSIVE FINANCIAL REPORT
22 1
Independent Auditor’s Report

The Honorable Mayor and the Members of the

City Council

City of Torrance, California

Report on the Audit of the Financial Statements

Opinions

We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Torrance, California (the City), as of and for the year ended June 30, 2024, the budgetary comparison for the General Fund for the year ended June 30, 2024, and the related notes to financial statements , which collectively comprise the City’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the

respective
financial position of the

government
al activities, the business-type activities,
each major fund, and the aggregate remaining fund information o

f the
City of Torrance, California as
of June 30, 202 4 , the respective changes in financial position , the budgetary comparison for the General Fund, and where applicable, cash flows thereof 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 (GAAS) and the standards applicable to financial audits contained in

Government Auditing
Standards, issued by the Comptroller General of the United States (Government Auditing Standards).

Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion

s.

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 con

trol relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or error.

23 2
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the

City
’s ability
to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

Auditor’s Responsibilities for the Audit of the Financial Statements

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

In performing an audit in accordance with GAAS and

Government Auditing Standards
, we:

• Exercise professional judgment and maintain professional skepticism throughout the audit.

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.

• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the

City
’s ability to continue as a going concern for a reasonable period of time.

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

24 3
Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 5 through 28 , and the required supplementary information on pages 10 7 through 148 be presented to supplement the basic financial statements.

Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the req uired supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual fund financial statements and budgetary comparison schedules as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with GAAS. In our opinion, the 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 section s 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. 25 4
Other Reporting Required by Government Auditing Standards

In accordance with

Government Auditing

Standards
, we have also issued a report dated
December 26, 2024

on our consideration of the

City
’s internal control over financial reporting and 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 inte

rnal
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 the

City
’s internal control over financial reporting and compliance.

Glendale, California
December 26, 2024

26 MANAGEMENT

DISCUSSION & ANALYSIS

ANNUAL COMPREHENSIVE FINANCIAL REPORT
27 CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2024

As management of the City of Torrance, California (City), we provide readers of the Annual Comprehensive Financial Report (ACFR) this narrative overview and analysis of the City’s financial activities fo

r the fiscal year ended June 30, 2024. It is
recommended this information be read in conjunction with the City’s transmittal letter in the preceding section and the accompanied financial statements, which immediately follows this section, in order to obtain a thorough understanding of the City’s financial condition on June 30, 2024.

FINANCIAL HIGHLIGHTS
 Total assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resour ces by $319.0 million, as of June 30, 2024. Of this amount, $497.8 million represents net investment in capital assets, $137.3 million represents net position restricted for specific purposes, and ($316.1) million represents unrestricted def icit in net position. ($403.8) million represents unrestricted deficit in net position for governmental activities and $87.7 million represents unrestricted net position for business-type activities.  The City’s total net position at fiscal year-end increased $51.8 million, to $319.0 million, which is primarily driven by the accumulation of current assets which increased by $74.0 million to $621.8 million as of June 30, 2024.  The City’s net capital assets (Table 4) increased by $9.9 million or 1.8% to $564.0 million as of June 30, 2024, as the City continues to invest and complete capital projects. This also includes the intangible assets, net of accumulated amortization per implementation of GASB 96 for Subscription-Based Information Technology Arrangements (SBITA).
 The City’s outstanding debt (Table 5) decreased by $10.5 million to $390.3 million as of June 30, 2024. Within the City’s governmental activities, outstanding debt decreased by $9.9 mill ion due to payments made on the 2020 and 2021 Lease Revenue Bonds and 2016 Refunding Certificates. Within the City’s business-type activities, long-term debt decreased by $0.6 million due to continued payments made on the instal lment loan agreement to drill and construct a new water well, for the North Torrance Well Field Project.  The City’s total pension liability incr eased $21.1 million from $229.4 million in fiscal year 2022-23 to a $250.5 million total pension liability in fiscal year 2023-

24.  The City’s other postemployment benefit s (OPEB) liability increased from $45.7 million in fiscal year 2022-23 to $61.7 million in fiscal year 2023-24, an increase of $16.0 million or 35.1%.
 At the end of the fiscal year, the City’s governmental funds reported total year ending fund balances of $212.0 million, compared to $147.5 million at the end of the prior fiscal year, which is an increase of $64.5 million.  The General Fund reported an ending fund balance of $120.1 million as of June 30, 2024, compared to $78.4 million as of June 30, 2023, which represents an increase of $41.7 million. Excess revenues over expenditures (before transfers 5 28

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2024

and SBITA) were $33.6 million in 2023-24, which represents a slight decrease from $33.8 million in 2022-23. More detailed analysis is included in the Financial Analysis section below.

OVERVIEW OF THE BASIC FINANCIAL STATEMENTS

This annual report consists of a series of financial statements found in three main sections: government-wide financial statements, fund financial statements, and notes to the basic financial statements.

The City implemented Governmental Accounting Standards Board (GASB) Statement No. 75 (GASB 75) in fiscal year 2017-18 which addresses the accounting and financial reporting for Postemployment

Benefits other than pensions. The City
implemented GASB No. 68 (GASB 68) in fiscal year 2014-15 which addresses the accounting and financial reporting for pensi

on plans. The City has also presented its
financial statements under the reporting model required by GASB No. 34 (GASB 34) Basic Financial Statements – and Management’s Discussion and Analysis (MD&A) – for State and Local Government since fiscal year 2001-02. In fiscal year 2021-22, the City implemented GASB No. 87 (GASB 87) which addresses the accounting and financial reporting for leases. In fiscal year 2022-23, the City implemented GASB No. 96 (GASB 96) which addresses the accounting and financial reporting for SBITA. In fiscal year 2023-24, GASB No. 99 and GASB No. 100 came into effect, but neither had an impact on the City’s financial statements.

Government-wide financial statements. The government-wide financial statements are designed to provide informa tion about the financial activities of the City as a whole and present a longer view of the City’s finances, similar to private-sector businesses. These reports separate functions that are principally supported by taxes and intergovernmental revenues ( governmental activities ) from other functions that re cover all or a significant por tion of their costs through user fees and charges ( business-type activities). Governmental activities include all of the City’s basic services, such as general government, public safety (police and fire) , public works , community development , and culture and recreation.

Property taxes, sales taxes, utility users’ taxes, and occupancy taxes finance most of these activities. Business-type activities include functions such as the City’s airport, transit, water, sanitation, and sewer funds.

The Statement of Net Position provides information using the accrual basis of accounting on all assets, deferred outflows of resources, liabilities, and deferred inflows of resources reported as net position. Over time, changes to a City’s net position may serve as one indicator of whether the financial position of the City is improving or deteriorating. Additional factors such as changes in the City’s revenue receipt pattern need to be considered in assessing the overall health of the City.

The Statement of Activities

provides information showing how the City’s net position changed during the fiscal year. The changes in net position are reported when 6 29

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2024

revenues are earned and expenses are incurred, regardless of the timing of related cash flows.

Fund financial statements. The City establishes funds as a grouping of related accounts 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. Additionally, some funds are required to be established by State law and by bond covenants. 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 in the governmental activities in the government-wide financial statements. However, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as balances on these spendable resources at fiscal year-end. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. This information is helpful in assessing the City’s near-term financing requirements. Fund financials also report the City’s operations in greater detail compared to the government-wide statements by providing information abo

ut the City’s most significant funds.

Because the focus of governmental funds is narrower than that of the government- wide financial statements, it is useful to compare information presented in the governmental funds with the governmental activities. This provides readers with a sense of the long-term impacts from the City’s near-term financing decisions. The governmental funds balance sheet and the governmental funds statement of revenues, expenditures and changes in fund balances are both accompanied by a reconciliation to the government-wide financial statements to facilitate comparison between governmental funds and governmental activities.

The City maintains 35 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 balance for the General Fund, which is the only major fund this fiscal year. Data for the remaining 34 non-major governmental funds are combined into a single, consolidated presentation. Individual fund data for each of these non-major governmental funds is provided in the non-major funds supplementary information section of this report (special revenue, capital projects and debt service).

Proprietary Funds. Proprietary funds are used to account for the same functions reported in the government-wide financial st atements, with a greater level of detail including cash flows. The City maintains two types of proprietary funds: enterprise funds and internal services funds. Enterprise funds are used to report the same activity as business-type activities in the government-wide financial statements.

Internal service funds are an accounting device for funds that provide supplies and services to other programs and activities within the City as well as a way to account for inter-fund charges for City departments. The City uses internal service funds to 7 30

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2024

account for its fleet services, risk management, and postemployment benefits operations. The proprietary fund financial statements provide information for the Transit System, Water, Sewer, and Municipal Airport funds, which are considered major funds of the City.

Fiduciary Funds. Fiduciary funds consist of private-purpose trust funds and custodial funds. The City is the trustee, or fiduciary, for its employees’ pension plans.

It is also responsible for other assets that, because of a trust arrangement, can be used only for the trust beneficiaries. All of the City’s fiduciary activities are reported in separate Statement of Net Position – Fiduciary Funds. We exclude these activities from the City’s other financial statements because the City cannot use these assets to finance its operations. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes.

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. These notes should be read in conjunction with the financial statements to have a greater understanding of the status of the City.

GOVERNMENT-WIDE FINANCIAL ANALYSIS

As noted earlier, net position can be a useful indicator, over time, 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 $319.0 million at the close of this fiscal year.

As shown on the next page, the City’s net position is broken down to three main categories: net investment in capital assets, restricted, and unrestricted. Currently, the majority of the City’s net position, $497.8 million, is associated with net investment in capital assets. The City uses these capital assets to provide services to citizens, therefore, these assets are not available for future spending. An additional portion of the City’s net position, $137.3 million, represents resources that have restrictions on how they may be used. The remaining balance of the City’s net position, ($316.1) million, represents the City’s unrestricted net position. Due to the implementation of GASB 68 and GASB 75, wh ich updated the way the City reported pensions and other postemployment benefits, this has made this value negative. The City continues to implement its financial plan, paying its CalPERS pension unfunded accrued liability (UAL) each year, to ensure that the City’s total pension liability is reduced over time. Additionally, in October 2020, the City issued $349.5 million in Lease Revenue Bonds that were utilized to pay down a large portion of the City’s UAL effectively refinancing this obligation at a reduced interest rate. It is anticipated this will save the City approximately $172. 2 million over the duration of the bonds, which are fully paid down by Fiscal Year 2044.

The City’s net position for fiscal year 2023-24 compared to 2022-23 is shown in Table 1:
8 31

CITY OF TORRANCE, CALIFORNIA
Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2024
2024 2023 2024 2023 2024 2023
$310.0 $236.7 $311.8 $311.1 $621.8 $547.8
392.8 386.5 171.2 167.6 564.0 554.1
Total assets 702.8 623.2 483.0 478.7 1,185.8 1,101.9
144.2 156.3 12.9 14.2 157.1 170.5
746.6 746.6 30.7 30.0 777.3 776.6

60.6 26.4 23.4 25.4 84.0 51.8
Total liabilities 807.2 773.0 54.1 55.4 861.3 828.4

7.9 12.3 154.7 164.4 162.6 176.7
330.7 326.9 167.1 163.3 497.8 490.2
105.0 60.8 32.3 31.2 137.3 92.0
(403.8) (393.5) 87.7 78.6 (316.1) (314.9)
Net Position $31.9 ($5.8) $287.1 $273.1 $319.0 $267.3
Unrestricted
Capital assets
Long-term debt
Current and other liabilities
Deferred inflows of resources
Deferred outflows of resources
Restricted
Net investment in capital assets
Activities Activities Total
Current and other assets
Table 1
Statement of Net Position
(In Millions)
G overnmental Business-type
Total asset
s increased $83.9 million or 7.6% from the prior fiscal year. Governmental activities increased by $79.6 million and business-type activities increased by $4.3 million. The increase in both governmental and business-type activities assets is primarily driven by the increases in pooled cash and investments and cash with fiscal agents.

Total deferred outflows of resources decreased by $13.4 million from the prior fiscal year. Governmental activities decreased $12.1 million and business-type activities decreased $1.3 million. Per GASB 68, deferred outflows of resources represent a consumption of net assets that applies to future reporting periods. The decrease in the deferred outflows of resources was primarily due to the changes of assumptions and decrease in pension contributions subsequent to measurement date.

Total liabilities increased $32.9 million or 4.0% from the prior fiscal year.

Governmental activities increased by

$34.2 million and business-type activities
decreased by $1.3 million. The increase in gov ernmental activities is primarily driven by increases in total pension liability and total OPEB liability of $20.3 million and 14.4 million, respectively. The decrease in business-type activities is primarily driven by 9 32

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2024

decreases in accounts payable and amounts due to other governments, offset by increases in total pension liability and total OPEB liability.

Overall, as a result of the above changes, the City’s total net position increased by a total of $51.8 million. Net position of t

he City’s governmental activities amounted to
$31.9 million. $330.7 million is net invest ment in capital assets such as land, buildings, machinery, infrastructure, equipment and other capital improvements, net of related debt; $105.0 million is restricted for streets and highways, capital projects, community development, public safety, pension and debt service; and ($403.8) million is unrestricted. The net positio n of the City’s governmental activities increased by $37.7 million (FY2023-24 is $31.9 million compared to FY2022-23 is ($5.8) million). Net position of the City’s business-type activities amounted to $287.1 million. $167.1 million is net investment in capital assets, $32.3 million is restricted for Transit System Fund, and $87.7 million is unrestricted. The net position of the City’s business-type activities increased by $14.0 million (FY2023-24 is $287.1 million compared to FY2022-23 is $273.1 million). This is discussed in more detail in the following section, Changes in Net Position.

10 33

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2024

Changes in net position

The City’s total revenues are $479.9 million and total costs of all programs and services are $428.1 million which resulted in a change in net position of $51.8 million during the year (See Table 2).

2024 2023 2024 2023 2024 2023
Charges for services $33.8 $28.4 $96.2 $97.6 $1 30.0 $1 26.0 Operating grants/contributions 1 3.6 1 1 .7 26.0 31 .5 39.6 43.2 Capital grants/contributions 30.9 37.8 0.1 0.8 31 .0 38.6 Property taxes 64.2 61.2 - - 64.2 61.2 Sales taxes 85.5 78.6 - - 85.5 78.6 Utility users tax 40.7 43.2 - - 40.7 43.2 Oc c upanc y tax 12.6 12.1 - - 12.6 12.1 Business lic ense tax 10.5 9.9 - - 10.5 9.9 Other taxes 19.1 17.9 - - 19.1 17.9

35.4 27.9 9.7 6.1 45.1 34.0
Motor vehic le tax (unrestric ted) 0.2 0.2 - - 0.2 0.2

0.8 4.9 0.6 - 1.4 4.9 347.3 333.8 1 32.6 1 36.0 479.9 469.8

44.8 38.9 - - 44.8 38.9 184.0 154.6 - - 184.0 154.6

31.2 31.7 - - 31.2 31.7

26.1 22.1 - - 26.1 22.1

18.8 15.5 - - 18.8 15.5

13.0 13.0 - - 13.0 13.0 - - 7.1 3.9 7.1 3.9 - - 34.3 29.1 34.3 29.1 - - 48.5 46.4 48.5 46.4 - - 4.6 4.8 4.6 4.8 - - 15.7 12.5 15.7 12.5 31 7.9 275.8 1 1 0.2 96.7 428.1 372.5

29.4 58.0 22.4 39.3 51.8 97.3

8.4 1 3.8 (8.4) (1 3.8) 0.0 0.0
$37.8 $71 .8 $1 4.0 $25.5 $51 .8 $97.3
Net Position- beginning (5.8) (77.6) 273.1 247.5 267.3 169.9 Prior Period adjustment - - - - Net Position- ending $31 .9 ($5.8) $287.1 $273.1 $31 9.0 $267.3 Governmental Business- type
Activities Activities
Table 2
Summary of Changes in Net Position
(In Millions)
Total
Revenues
Public safety
Expenses
General government
Increase (decrease) in net position
Total expenses
Excess of revenues over expenses
Miscellaneous
Total revenues
Transfers
Public works
Culture and recreation
Program revenues:

General revenues:

Investment earnings
Community development
Interest on long-term debt
Airport
before transfers
Transit
Water
Sewer
Sanitation
11 34

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2024

Governmental Activities: Revenues.

The City’s governmental activities total revenues of
$347.3 million, by category, are shown below in Figure A-1.

Overall, revenues for the City’s governmental activities increased by $13.5 million, or

4.1%. The largest category of revenue for governmental activities is sales tax, which represents 24.6% of total governmental activities revenues. This category totaled $85.5 million in fiscal year 2023-24, compared to $78.6 million in fiscal year 2022-23, which is an increase of $6.9 million or 8.8%. This is primarily due to fiscal year 2023- 24 being the first full year of Measure SST tax collections, compared to fiscal year 2022-23 which only collected three quarters worth of Measure SST tax revenues.

The second largest category is property tax (including all rolls and vehicle license fee swap), which represents 18.5% of total governmental activities revenues. This category totaled $64.2 million in fiscal year 2023-24, compared to $61.2 million in fiscal year 2022-23, which is an increase of $3.0 million or 4.9%. This is primarily due to growth in the City’s net taxable assessed property values. The third largest 12 35

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2024

category is utility user’s tax, which represents 12.9% of total governmental activities revenue. This category totaled $40.7 million in fiscal year 2023-24, compared to $43.2 million in fiscal year 2022-23, which is

a decrease of $2.5 million or 6.0%. This
decrease was primarily caused by reduced production at The Torrance Refinery due to planned maintenance that was performed during the second fiscal quarter of 2024. The fourth largest category, the Charges for Services classification, represents

9.7% of total governmental activities revenues. This category totaled $33.8 million in fiscal year 2023-24, compared to $28.4 million in fiscal year 2022-23, which is a $5.4 million or 18.7% increase.

Operating grants and contributions represent 3.9% of total governmental activities revenue. This category totaled $13.6 million in fiscal year 2023-24, compared to $11.7 million in 2022-23. Capital grants and contributions represent 8.9% of total governmental activities revenue. This category totaled $30.9 million in fiscal year 2023-24, compared to $37.8 million in fiscal year 2022-23. The decrease in capital grants is mainly caused by a spike of Public Works activity in fiscal year 2022-23 related to the Measure R Local Return and Highway fund. Additionally, Miscellaneous Revenues classification increased by $3.4 million to $36.2 million, up from $32.8 million in 2022-23, mainly due to increases in investment earnings. All other revenue categories in the governmental activities showed increased compared with the prior year.

13 36

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2024

Governmental Activities: Functional Expenses. The City’s governmental activities total expenditures of $317.9 million as shown below in Figure A-2.

The City’s governmental activities expenditures increased by $42.1 million or by

15.2%, when comparing fiscal year 2023-24 with fiscal year 2022-23. The largest category of expense for governmental activities is public safety, which represents

57.9% of total governmental activities expenses. This category totaled $184.0 million in fiscal year 2023-24, compared to $154.6 million in fiscal year 2022-23, which is an increase of $29.4 million or 19.0%. The second largest category is general government, which represents 14.1% of total governmental activities expenses. This category totaled $44.8 million in fiscal year 2023-24, compared to $38.9 million in fiscal year 2022-23, which is an increase of $5.9 million or 15.3%. The third largest category is public works, which represents 9.8% of total governmental activities expenses. This category totaled $31.2 million in fiscal year 2023-24, compared to $31.7 million in fiscal year 2022-23, which is a decrease of $0.5 million or 1.5%.

14 37

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2024

Governmental Activities: Expenses and Program Revenues. The following chart, Figure A-3, compares program revenues and expenses for governmental activities (excluding interest on long-term debt).

The comparison of direct expenses and program revenues demonstrates the extent to which each functional area is self-financing or draws from the general revenues of the City. A higher percentage of program revenues to direct expenses indicates a particular function is more self-sustaining through program revenues generated by activities of that function. In contrast, a lower percentage of program revenues to direct expenses indicates a function is primarily financed through general revenues.

The function with the highest percentage of program revenues to direct expenses in fiscal year 2023-24 is Community Development. Community Development had expenses of $18.8 million and program revenues

of $20.5 million, which is a ratio of
108.7%. The second highest is Public Works. Public Works had expenses of $31.2 million and program revenues of $18.2 mill ion, which is a ratio of 58.4%. The higher percentage indicates the extent to which program expenses in this category are financed by revenues generated within the function categories.

15 38

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2024

The function with the lowest percentage of program revenues to direct expenses in fiscal year 2023-24 is Public Safety. Public Safety had expenses of $184.0 million and program revenues of $15.4 million, whic

h is a ratio of 8.4%. The second lowest
is Culture and Recreation. Culture and Re creation had expenses of $26.1 million and program revenues of $6.3 million, which is a ratio of 24.3%. The third lowest is General Government. General Government had expenses of $44.8 million and program revenues of $17.9 million, which is a ratio of 39.8%. 16 39

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2024

Business-type Activities: Revenues. The City’s business-ty pe activities total revenues of $132.6 million, by category, are shown below in Figure A-4.

Overall, revenues for the City’s business-type activities decreased by $3.4 million, or

2.5%. The largest category of revenue for business-type activities is charges for services, which represents 73.0% of total business-type activities revenues. This category totaled $96.2 million in fiscal year 2023-24, compared to $97.6 million in fiscal year 2022-23, which is a decrease of $1.4 million or 1.4%, primarily due to one-time lease signing bonus revenues of $6.4 received during 2022-23. The second largest category is operating grants, which represents 20.0% of total business-type activities revenues. This category totaled $26.0 million in fiscal year 2023-24, compared to $31.5 million in fiscal year 2022-23, which is a decrease of $5.5 million or 17.7%, primarily due to one-time ARPA Federal grant revenues of $11.3 million received during 2022-23. The third largest category for business-type activities revenue is Investment Earnings, which showed increase of $3.6 million to $9.7 million in fiscal year 2023-24, compared to $6.1 million in fiscal year 2022-23.

17 40

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2024

Business-type Activities: Expenses. The City’s business-type activities total expenses of $110.2 million, by category, are shown below in Figure A-5.

The City’s business-type activities expenditures increased by $13.6 million, or

14.1%, when comparing fiscal year 2023-24 with fiscal year 2022-23. The largest category of expense for business-type activities is the City’s Water Fund, which represents 44.0% of total business-type activities expenses. This category totaled $48.5 million in fiscal year 2023-24, compared to $46.4 million in fiscal year 2022-23, which is an increase of $2.1 million or 4.6%. The increase is mainly due to increases in Salaries and employee benefits and in the cost of water. The second largest category is the City’s Transit System Fund, which represents 31.1% of total business-type activities expenses. This category totaled $34.3 million in fiscal year 2023-24, compared to $29.1 million in fiscal year 2022-23, which is an increase of $5.2 million or 17.7%. This increase is mainly due to increases in salaries and employee benefits. The third largest category is the City’s Sanitation fund, which represents 14.2% of total business-type activities expenses. This category totaled $15.7 million in fiscal year 2023-24, compared to $12.5 million in fiscal year 2022-23, 18 41

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2024

an increase of $3.2 million or 25.6%. This increase is mainly due to increase in contribution to the Self Insurance Fund for liability claims, professional services, and salaries and employee benefits .

Business-type Activities: Expenses and Program Revenues. The following chart, Figure A-6, compares program revenues and expenses for the city’s business-type activities.

The comparison of direct expenses and program revenues demonstrates the extent to which each business-type activity area is self-financing, draws from its fund balance, or is supplemented with transfers. Since the chart above is a comparison of direct expenses and program revenues, it also does not include any transfers into/out of other funds. Overall, the Cit y’s business-type activities fund their own operations.
19 42

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2024

FINANCIAL ANALYSIS OF THE CITY’S MAJOR FUNDS

Governmental funds

The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances on spendable resources. As the City completed the year, its governmental funds reported a combined fund balance of $212.0 million (See Table 3). The General Fund is the main operating fund of the City and is the only major fund this year

2024 2023 2024 2023 2024 2023
Taxes $231 .3 $221 .6 $1 .3 $1 .3 $232.6 $222.9
Licenses, fees and permits 5.2 5.7 2.1 0.8 7.3 6.5
Fines, forfeitures and penalties 0.7 0.7 0.2 0.2 0.9 0.9 Use of money and property 1 0.8 4.8 25.3 23.9 36.2 28.7 Intergovernmental 0.4 0.5 44.2 49.1 44.6 49.6 Charges for c urrent servic es 25.5 21.0 - - 25.5 21.0 Other Revenues 0.7 4.7 0.3 0.3 1 .0 5.0 274.6 259.0 73.4 75.6 348.1 334.6
General government 31 .9 30.0 5.1 2.2 37.0 32.2 Nondepartmental 1 0.3 5.9 - - 1 0.3 5.9 Public Safety 148.3 143.3 3.5 10.5 151.8 153.8 Public works 18.5 16.2 11.4 31.3 29.9 47.5 Culture and recreation 23.1 21 .3 0.6 0.4 23.7 21 .7 Community development 8.6 8.3 8.7 8.0 17.3 16.3 Debt Service
Princ ipal Retirement - - 10.0 9.3 10.0 9.3 Interest and fiscal charges - - 1 2.6 1 2.8 1 2.6 1 2.8 Capital lease 0.2 0.2 - - 0.2 0.2 241 .0 225.2 51 .9 74.5 292.9 299.7

33.6 33.8 21.5 1.1 55.2 34.9

3.0 (1 3.3) 1 .2 1 .8 4.2 (1 1 .5)
SBITA 5.0 1 .0 0.1 4.3 5.1 5.3
$41 .7 $21 .5 $22.8 $7.2 $64.5 $28.7
Fund balance-beginning 78.4 56.9 69.0 61 .8 1 47.5 118.7 Prior Period adjustment - - - - - - Fund balance- ending $1 20.1 $78.4 $91 .8 $69.0 $21 2.0 $1 47.5 Incr ease (decr ease) in fund balances
Total expenses
Excess of revenues over expenses
before transfers
Transfers
Expenditures
Current Expenditures
Revenues
Revenues:

Total revenues
General Fund Governmental Funds Total
Table 3
Statement of Revenues, Expenditures and Changes in Fund Balance (In Millions)
Other

20 43

CITY OF TORRANCE, CALIFORNIA
Management’s Discussion and Analysis

For the Fiscal Year ended June 30, 2024

General Fund
As shown in Table 3, General Fund revenues increased $15.6 million or 6.0% from the prior fiscal year. Within the General Fund revenues, there are seven main categories, of which the City experienced increases in three categories in fiscal year 2023-24. The largest revenues source in the General Fund is taxes, which increased $9.7 million or 4.4%. This is primarily driven by the increase in Sales Tax, mainly due to fiscal 2023-24 being the firs t full fiscal year since the passage of Measure SST which enacted transaction and use tax s tarting October 1, 2022. Measure SST generated $25.7 million in fiscal year 202 3-24 compared to $18.1 million in fiscal year 2022-23. Property Tax revenues also increas ed primarily due to growth in the City’s net taxable assessed property values. The second largest revenue source in the General Fund is charges for current services , which increased $4.5 million or

21.4%. This is mainly attributable to the increas e in emergency transport fees in the Fire department, building and zoning fees in the Community Development department, and recreational program fees in the Community Services department.

The third largest revenue source in the General Fund is licenses, fees and permits, which decreased $0.5 million to $5.2 million in fiscal year 2023-24, compared to $5.7 million in fiscal year 2022-23. This decrease is primarily due to the normalizing of building and inspec tion fees in the Community Development department after a significant spike in 2022-23.

General Fund expenditures increased $15.8 million from $225.2 million in fis cal year 2022-23 to $241.0 million in fiscal year 2023-24. This increase was mainly driven by an increase in Public Safety of $5.0 million or 3.5%, increase in Non-Departmental of $4.4 million, and increase in Public Works of $2.3 million. Public Safety and Public Works expenditures increased mainly due to the increase in salaries as well as contribution to the Self Insurance Fund for liability and workers compensation claims.

Non-department expenditures increased primarily due to investments in subscription-based information technology.

The fund balanc e increase d $41.7 million in General Fund in fiscal year 2023-24, up from $21.5 million in fiscal y ear 2022-23. The increase in fund balance growth is primarily due to a decrease transfers out as a result of one-time transfers to the Self- Insurance and Fleet Services funds in fiscal year 2022-23. 21 44

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2024

Proprietary funds

The Enterprise Funds provide the same basic type of information found in the government-wide financial statements but in more detail. The major funds reported are the Transit System Fund, Water Fund, Sewer Fund, and Municipal Airport Fund.

The Transit Fund has a decrease in fund net position of $1.9 million compared to the increase of $7.6 million in fiscal year 2022-23. The decrease in change of net position is mainly driven by expiration of one-time ARPA Federal grants in conjunction with increases in Salary and employee benefit expenses due to increased employee compensation and reduced vacancies as Staff strive towards increased Transit service levels.

The Water Fund had an increase in fund net position of $7.3 million compared to the increase of $8.6 million in fiscal year 2022-23. The Water Fund’s expenses increased $2.1 million when compared to the year prior, mainly due to increases in Salary and employee benefit expenses and the cost of water.

The Sewer Fund had an increase in fund net position of $2.9 million compared to the increase of $1.3 million in fiscal year 2022-23, primarily driven by increased revenues due to increases in the wastewater discharge rates that went into effect on January 1, 2023. Subsequent increases of 3% are scheduled to be implemented annually through calendar year 2027.

The Municipal Airport Fund had an increase in fund net position of $5.8 million, compared to the increase of $6.4 million in fiscal year 2022-23. The decreased change in net position is primarily related to professional services expenses associated with ongoing remediation effort s. These expenses are anticipated to be reimbursed by insurance settlements in future fiscal years.

General Fund Budgetary Highlights

Over the course of the year, the City has made revisions to its budget upon City Council’s approval. The budget amendments fall into the following categories:

 Program modifications presented to the Finance and Governmental Operations Committee during its first quarter and mid-year budget review presentations.

Upon approval of the Finance and Governmental Operations Committee, these program modifications were taken to City Council for final approval.  Budget appropriations and modifications presented directly to the City Council for approval.
 Budget transfers within the respective General Fund departments are also subject to approval by the department head and City Manager’s Office.

During the First Quarter Budget Presentation, no modifications were approved.

During the Mid-Year Budget presentation, the following modification was approved:
22 45

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2024

 Delete 1.0 FTE Records Management Specialist and Add 1.0 FTE Deputy City Clerk I in the City Clerk’s Office (General Fund)
 Add 1.0 FTE Staff Assistant in t he City Manager’s Office (General Fund)  Delete 1.0 FTE Recreation Supervisor and Add 1.0 FTE Senior Business Manager in the Community Services Department (General Fund)  Delete 0.5 FTE Environmental Aide and Add 0.5 FTE Program Specialist in the Community Services Department (General Fund)
 Delete 1.0 FTE Account Clerk and Add 1.0 FTE Payroll Specialist in the Finance Department (General Fund)
 Delete 1.0 FTE Senior Business Manager and Add 1.0 FTE Risk Manager in the Finance Department (Non-General Fund)
 Delete 1.0 FTE Accounting Technician and Add 1.0 FTE Staff Assistant in the Finance Department (General Fund and Non-General Fund)
 Delete 1.0 FTE Senior Building Inspector and Add 1.0 FTE Capital Projects Construction Supervisor in the General Services Department (General Fund)  Add 1.0 FTE Intern in the General Services Department (General Fund)  Add 1.0 FTE Administrative Analyst in the Police Department (General Fund)  Add 1.0 FTE Police Services Supervisor in the Police Department (General Fund)
 Delete 1.0 FTE Administrative Assistant and Add 1.0 FTE Administrative Analyst in the Police Department (General Fund)

Although the City amended its General Fund expenditure budget, actual charges to appropriations were $2.8 million below the final adopted budget amounts. The budgetary fund balance for July 1, 2024 exceeded the final budgeted values primarily due to revenues that outperformed the budget, especially in investment earnings and charges for current services. The total expenditure also generated positive budgetary variance as most departments stayed within the budget, with general government and public safety generating the largest positive variances mainly from salary savings.

The City’s General Fund fund balance of $120.1 million differs from the General Fund’s budgetary fund balance of $1 16.2 million because $3.9 million of encumbrances are included for budgetary purposes.
23 46

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2024

CAPITAL ASSET AND DEBT ADMINISTRATION

Capital Assets

The City’s investment in capital assets for its governmental and business type activities as of June 30, 2024 amount s to $564.0 million (net of accumulated depreciation). The net investment in capital assets includes land, right of way, buildings and improvements, equipment, construction in progress, easement, infrastructure and intangible assets.

2024 2023 2024 2023 2024 2023
Land $83.2 $83.2 $8.8 $8.8 $92.0 $92.0
Right of Way 20.0 20.0 - - 20.0 20.0 Construction in progress 16.4 21.1 5.0 20.0 21.4 41.1
Infrastructure 164.6 159.0 130.1 110.3 294.7 269.3
Buildings and improvements 74.9 75.6 8.8 8.6 83.7 84.2
Equipment 24.7 22.7 16.8 18.2 41.5 40.9
Easement - - 1.1 1.1 1.1 1.1 Intangible 9.0 4.9 0.6 0.6 9.6 5.5 Total $392.8 $386.5 $171.2 $167.6 $564.0 $554.1
Table 4
Capital Assets
(net of depreciation, in millions)
Activities Activities Total
Governmental Business-type

The total capital assets in the governme ntal activities increased by $6.3 million ($392.8 million in fiscal year 2023-24, compared to $386.5 million in 2022-23) and the business-type activities increased by $3.6 million ($171.2 million in fiscal year 2023-24, compared to $167.6 million in 2022-23). More detailed information about the City’s capital assets and its activities dur ing the year is shown in Note 3 of the Notes to Basic Financial Statements.
24 47

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2024

Long-term debt

At the end of the fiscal year, the City ha d total bonded debt outstanding of $390.3 million as shown in Table 5.

2024 2023 2024 2023 2024 2023
Revenue bonds and notes
(backed by specific tax
and fee revenues) 388.0$ 397.9 $ 2.3 $ 2.9$ 390.3$ 400.8 $ Table 5
Outstanding Debt
(In Millions)
Activities Activities Total
G overnmental Business-type

For governmental activities, the City currently has $388.0 million of outstanding debt.

During fiscal year 2023-24 the total debt of the City decreased by $10.5 million due to the annual payments on the City’s current

outstanding certificates of participation
and 2020 and 2021 Lease Revenue Bonds.

The City’s General Fund secured a “AA- stable” updated rating from S&P Global Ratings (Standard & Poor’s) for its Lease Revenue Bonds that were issued during fiscal year 2020-21.

For business-type activities, the City’s Water Fund has outstanding debt of $2.3 million due to the installment sale agreem ent to fund the North Torrance Well Field Project.

More detailed information about the City’s long-term liabilities is presented in Notes 7 and 8 of the Notes to Basic Financial Statements.

25 48

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2024

ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES

Key Highlights of the 2024-25 Budget
(Reference the 2024-25 Adopted Budget and Capital Improvement Plan along with the Fiscal Year 2024-25 First Quarter Budget Review Report)

The City Council adopted in June 2024, the second year (fiscal year 2024-25) of the Two-Year Operating budget. Entering the May budget public hearings, staff projected a structurally balanced General Fund Operating Fund budget. Additionally, there was a budgeted increase to the General Fund’s overall fund balance of $9.4 million. The City’s Self-Insurance Fund also adopted a structurally balance budget, which marks the first year that this fund is projected to stabilize its overall fund balance. The city continues to address the Self-Insurance Fund’s negative fund balance. All other funds remain in balance. Staff continue to monitor the City’s budget trends in the future using multi-year projections to ensure structural balance is held over time. The fiscal year 2024-25 Budget marks the third year that the City applied for, and was awarded, the Govern ment Finance Officers Association’s Distinguished Budget Presentation Award Program. Additionally, for the first time, the City applied for, and was awarded, the California Society of Municipal Finance Office’s Operating Budget Excellence Award for the fiscal year 2023-25. The Fiscal Year 2024-25 Budget will also be submitted for consideration, it is anticipated that City will be notified in January if they have received this award.

Staff provided a First Quarter Budget Review Report in December 2024 for fiscal year 2024-25, which indicated that the General Fund Operating Fund revenues were projected to realize a $1.2 million surplus largely due to favorable trends in investment returns. Additionally, it is projected that the General Fund Operating Fund’s expenditure budget will operate at a surplus of $4.7 million. This is largely driven by vacancies savings. The Self-Insurance Fund and its deficit net position continue to be an area of focus to ensure this is properly funded and has a reduced reliance on one-time funding to cover projected periodic settlements. The City’s Measure SST Fund is projected to have revenues exceed budget by $246,000. Each individual entities ratio between the Bradley Burns 1% sales tax rate and an implemented transactions and use tax, such as Measure SST, can vary. The City of Torrance Measure SST’s revenues are trending about 43% for the City’s annual Bradley Burns 1% sales tax distributions for the trailing twelve month period.

Additionally, it is projected that the fund will generate a $830,000 expenditure surplus driven by the homeless response category of spending. Staff have been diligent in securing grant funding through Fiscal Year 2024-25 and have not needed to rely on this General Fund source to date.
26 49

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2024

This Budget Review Report highlighted other Areas of Focus that will be monitored for years to come. This includes:

 Cash Balance by Fund:

Staff highlighted the General Fund cash balance at
fiscal year end and noted its balance relative to the overall cash balance of the City and the size of this fund’s operation is insufficient. Building this cash balance and the corresponding overall fu nd balance in the General Fund will be critical to improving the City’s fiscal resilience.
 Labor Trends : Beginning in fiscal year 2021-22, the City sustained a significant spike in retirements and voluntary resignations. The most cited reasons for these departures were better salaries, benefits, flexibility and advancement opportunity. Staff highlighted positive trends in fiscal year 2023- 24 vacancies and voluntary resignations which have now declined since their peak in fiscal year 2021-22. Staff continue closely monitoring these metrics to ensure the City remains attractive and competitive and retains a talented workforce.
 Expiring Labor Agreements : The City is in the process of negotiating new labor agreements with its various labor groups. The City has put an emphasis on negotiating labor agreements designed to address gaps with the city’s compensation and the labor market. The City has reach an agreements with the safety groups which will expire in December 2025 for police and December 2027 for fire. The City has reached agreements with some its miscellaneous groups and is in the process of settling with the remaining groups.

 Aging Infrastructure and City Facilities/Parks:

The City of Torrance
operates over $500 million worth of buildings, public facilities, and infrastructure. In fiscal year 2023-24, the City completed a Facility Index Study and assessed the current state of the City’s building and park assets.

The fiscal year 2024-25 Capital Improvement Plan was designed to better address the necessary maintenance identified at City facilities every year.

Measure SST will provide a dedicated

stream of funding to improve City
parks and other areas throughout the community. However, there remains a significant funding gap between the

needed investment in building and park
assets and the amount the budget can sustain each year. This will be of continued focus in coming budget cycl es to ensure the City’s assets are properly maintained.
 Pension/OPEB Liability Management: The City continues to focus on this topic due to the significant impact it can have on the City’s financials from year to year. In fiscal year 2023-24, CalPERS investments returns were approximately 9.3%. The annual unfunded accrued liability (UAL) payment is expected to increase over the next 20 years. The City’s 10-year forecast projects annual payments to increase from $6.2 million in fiscal year 2024-25 to approximately $36.5 million in fiscal year 2033-34.

Despite these challenges the City does continue to recover from the peaks of the COVID-19 pandemic. The City has been able to continue restoring its General Fund fund balance, though does need to continue on this path to fiscal sustainability.

27 50

CITY OF TORRANCE, CALIFORNIA
Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2024
Employee Pensions and Related Debt:
 The City is primarily a service organization with 78.1% of the General Fund budget in labor.
 CalPERS pension and related debt costs (2020 Lease Revenue Bond) as percentage of the general fund budget is 18.3% (CalPERS cost is 11.7% and LRB cost 9.1%).
o Based on CalPERS 9.3% estimated investment return in fiscal year 2023-24.
 The City has implemented “tiered” pension benefits that transfers more of the pension costs to new employees while reducing some pension benefits. The California Public Employees’ Pension Reform Act was implemented at the state level and implemented by the City

with new members sharing in 50% of
normal costs.
 During fiscal year 2020-21 the City issued Lease Revenue Bonds totaling $349.5 million to pay down its UAL with CalPERS. The City projects this will save approximately $172.2 million ov

er the duration of the bonds without
extending the amortization period.
 Beginning in fiscal year 2021-22, the City began making contributions to a Section 115 pension prefunding trust as an additional tool to address fluctuations in pension payments. As of June 30, 2024 the balance stands at $27.8 million. In fiscal year 2024-25 an additional contribution of $9.4 million was made.

Other Postemployment Benefits (OPEB):
 The City continues to fund its actuarially determined contributions for Other Postemployment Benefits.
 OPEB mainly covers health benefits fo r retirees of roughly $157 a month for Miscellaneous employees and up to an additional $146.50 to $332.62 a month for Fire and Police retirees.

CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This financial rep
ort is designed to provide our citizens, taxpayers, customers, and 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 any questions, about this report or need additional financial information, contact the City of Torrance, Finance Department, 3031 Torrance Blvd., Torrance, California 90503. 28 51

BASIC FINANCIAL

STATEMENTS

ANNUAL COMPREHENSIVE FINANCIAL REPORT
52 GOVERNMENT - WIDE

FINANCIAL STATEMENTS

ANNUAL COMPREHENSIVE FINANCIAL REPORT
53 Governmental
Activities
Business-type
Activities Total
Assets
Pooled cash and investments (note 2) 230,270,083$ 115,692,999 $ 345,963,082 $ Cash and cash equivalents with fiscal agents (note 2) 32,471,963 - 32,471,963 Accounts receivable 15,173,206 15,138,679 30,311,885
Accrued interest receivable 1,654,779 1,811,139 3,465,918 Due from other governments (note 16) 19,046,470 3,907,208 22,953,678 Lease receivable - current (note 5) 568,372 5,468,258 6,036,630 Notes receivable (note 4) 32,900 - 32,900
Advance to custodial fund 61,440 - 61,440
Inventories, at cost 1,458,789 5,981,552 7,440,341
Prepaids and other assets 1,246,665 188,817 1,435,482 Long term assets:

Advance to successor agency (note 21) 5,198,252 1,217,738 6,415,990 Lease receivable - long term (note 5) 2,780,261 162,427,972 165,208,233 Capital assets (note 3):

Land 83,188,658 8,833,133 92,021,791
Right-of-way 19,950,273 - 19,950,273
Construction in progress 16,423,803 4,965,500 21,389,303 Infrastructure, net of accumulated depreciation 164,624,590 130,082,608 294,707,198 Building and improvements net of accumulated depreciation 74,946,708 8,776,067 83,722,775 Machinery, equipment, furniture and fixtures, net of accumulated depreciation 24,757,001 16,857,216 41,614,217 Easement, net of accumulated depreciation - 1,055,774 1,055,774 SBITA assets, net of accumulated amortization 8,973,787 627,104 9,600,891 Total Assets 702,828,000 483,031,764 1,185,859,764
Deferred Outflows of Resources
Deferred refunding charge 5,465,916 - 5,465,916
Deferred pension amounts (notes 9 and 10) 116,903,111 10,377,953 127,281,064 Deferred OPEB amounts (note 11) 21,803,569 2,476,576 24,280,145 Total Deferred Outflows of Resources 144,172,596 12,854,529 157,027,125 Liabilities
Accounts payable 6,989,101 5,956,948 12,946,049
Accounts payable - contract retention 540,059 121,012 661,071 Accrued liabilities 12,532,369 3,497,303 16,029,672
Unearned revenue (note 17) 824,575 12,114,319 12,938,894 Deposits and guarantees 6,230,706 245,224 6,475,930
Interest payable 3,089,878 71,551 3,161,429
Notes payable - portion due or payable within one year (note 8) 222,727 - 222,727 SBITA liability - portion due or payable within one year (note 6) 971,818 174,907 1,146,725 Long-term liabilities - portion due or payable within one year (notes 7, 8 and 15) 29,208,280 1,248,264 30,456,544 Long-term liabilities:

Long-term liabilities - portion due or payable after one year (notes 7, 8 and 15) 451,575,882 4,354,497 455,930,379 Notes payable - due in more than one year (note 8) 697,609 - 697,609 SBITA liability - due in more than one year (note 6) 7,992,816 457,420 8,450,236 Total pension liability - due in more than one year (notes 9 and 10) 230,911,907 19,544,936 250,456,843 Total OPEB liability - due in more than one year (note 11) 55,389,256 6,291,430 61,680,686 Total Liabilities 807,176,983 54,077,811 861,254,794
Deferred Inflows of Resources
Deferred leases (note 5) 3,112,703 153,880,155 156,992,858 Deferred pension amounts (notes 9 and 10) 2,259,904 509,445 2,769,349 Deferred OPEB amounts (note 11) 2,534,110 287,839 2,821,949 Total Deferred Inflows of Resources 7,906,717 154,677,439 162,584,156 Net Position (Deficit)
Net investment in capital assets 330,710,382 167,132,145 497,842,527 Restricted
Streets & highways 51,690,058 - 51,690,058
Capital projects 3,281,248 - 3,281,248
Community development 19,511,406 - 19,511,406
Public safety 2,768,404 - 2,768,404
Transportation program - 32,296,089 32,296,089
Pension 27,791,847 - 27,791,847
Debt service 6,808 - 6,808
Unrestricted (403,843,257) 87,702,809 (316,140,448) Total Net Position (Deficit) 31,916,896$ 287,131,043$ 319,047,939$ See accompanying notes to the basic financial statements.

CITY OF TORRANCE, CALIFORNIA
Statement of Net Position
June 30, 2024
29 54
Functions/Programs Expenses Charges for Services
Operating Grants and
Contributions
Capital Grants and
Contributions
Primary Government:

Governmental Activities:

General government 44,823,659$ 2,383,422 $ 4,308,189 $ 11,165,190 $ Public safety 183,967,651 12,065,693 221,089 3,150,353 Public works 31,248,832 1,628,158 - 16,608,166 Culture and recreation 26,074,339 5,706,337 618,434 - Community development 18,824,559 11,983,849 8,470,654 - Interest on long-term debt 12,984,153 - - - Total Governmental Activities 317,923,193 33,767,459 13,618,366 30,923,709 Business-Type Activities:

Municipal airport 7,150,797 18,260,880 - - Transit system 34,262,858 1,211,252 25,573,193 61,877 Water 48,543,018 53,973,747 - - Sewer 4,588,553 6,907,270 - - Sanitation 15,672,008 15,903,067 398,140 - Total Business-Type Activities 110,217,234 96,256,216 25,971,333 61,877 Total Primary Government 428,140,427$ 130,023,675 $ 39,589,699 $ 30,985,586 $ CITY OF TORRANCE, CALIFORNIA hj
Statement of Activities and Changes in Net Position
Year ended June 30, 2024 hj
Program Revenues
General Revenues:

Taxes:

Property taxes
Sales taxes
Utility users taxes
Occupancy taxes
Business license taxes
Construction, real property, cogeneration and misc. taxes Investment earnings
Motor vehicle tax (unrestricted)
Miscellaneous
Transfers
Loss on disposal of SBITA
Net Position (Deficit) - ending
See accompanying notes to the basic financial statements.

Total General Revenues and Transfers
Change in Net Position
Net Position (Deficit) - beginning
30 55
Governmental
Activities Business-type Activities Total
(26,966,858)$ -$ (26,966,858)$ (168,530,516) - (168,530,516) (13,012,508) - (13,012,508) (19,749,568) - (19,749,568) 1,629,944 - 1,629,944 (12,984,153) - (12,984,153) (239,613,659) - (239,613,659) - 11,110,083 11,110,083 - (7,416,536) (7,416,536) - 5,430,729 5,430,729 - 2,318,717 2,318,717 - 629,199 629,199 - 12,072,192 12,072,192 (239,613,659) 12,072,192 (227,541,467) 64,183,124 - 64,183,124 85,530,635 - 85,530,635 40,683,522 - 40,683,522 12,580,760 - 12,580,760 10,544,653 - 10,544,653 19,077,451 - 19,077,451 35,409,582 9,735,554 45,145,136 181,407 - 181,407 830,180 578,967 1,409,147 (16,426) - (16,426) 8,385,024 (8,385,024) - 277,389,912 1,929,497 279,319,409

37,776,253 14,001,689 51,777,942 (5,859,357) 273,129,354 267,269,997 31,916,896$ 287,131,043$ 319,047,939$ j
hj
Net (Expense) Revenue
and Changes in Net Position
31 56
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32 57

GOVERNMENTAL FUND

FINANCIAL STATEMENTS

ANNUAL COMPREHENSIVE FINANCIAL REPORT
58 (T
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33 59
General Fund
Nonmajor
Governmental Funds
Total Governmental
Funds
Assets
Pooled cash and investments (note 2) 66,828,969$ 99,318,290 $ 166,147,259 $ Cash and cash equivalents with fiscal agents (note 2) 27,791,847 3,663,885 31,455,732 Accounts receivable 10,481,146 316,131 10,797,277 Accrued interest receivable 930,848 411,449 1,342,297 Due from other funds (note 13) 6,565,851 - 6,565,851 Due from other governments (note 16) 15,683,197 3,363,273 19,046,470 Advance to successor agency (note 13) 3,915,055 1,283,197 5,198,252 Advance to custodial fund 61,440 - 61,440 Interfund advances receivable (note 13) - 600,000 600,000 Notes receivable (note 4) - 32,900 32,900 Lease receivable (note 5) 2,576,837 771,796 3,348,633 Prepaids 901,453 250 901,703 Total Assets 135,736,643$ 109,761,171 $ 245,497,814 $ Liabilities
Accounts payable 4,547,853$ 1,892,921 $ 6,440,774 $ Accounts payable - contract retention - 468,284 468,284 Accrued liabilities 4,736,696 1,695,910 6,432,606 Due to other funds (note 13) - 6,565,851 6,565,851 Interfund advances payable (note 13) 600,000 - 600,000 Unearned revenue (note 17) 794,432 30,143 824,575 Deposits and guarantees 346,368 5,884,338 6,230,706

Total Liabilities 11,025,349 16,537,447 27,562,796 Deferred Inflows of Resources:

Unavailable revenue 2,155,055 703,197 2,858,252 Deferred leases (note 5) 2,421,283 691,420 3,112,703 Total Deferred Inflows of Resources 4,576,338 1,394,617 5,970,955 Fund Balances
Nonspendable
Advances, net 1,760,000 580,000 2,340,000 Prepaids 901,453 250 901,703 Restricted for:

Public safety - 3,744,172 3,744,172 Public works - 54,714,324 54,714,324 Culture and recreation -
Cable TV education 3,248,120 - 3,248,120 Parks and recreation - 4,491,175 4,491,175 Community development - 11,213,966 11,213,966 Pension 27,791,847 - 27,791,847 Debt service - 6,808 6,808 Assigned to:

Public safety 114,292 - 114,292 Capital projects -
IT replacement 5,554,519 - 5,554,519 Telephone replacement 1,169,275 - 1,169,275 Other 845,989 17,852,971 18,698,960 Unassigned 78,749,461 (774,559) 77,974,902 Total Fund Balances 120,134,956 91,829,107 211,964,063
Total Liabilities, Deferred Inflows of Resources and Fund Balances 135,736,643$ 109,761,171$ 245,497,814$ See accompanying notes to the basic financial statements.

CITY OF TORRANCE, CALIFORNIA
Balance Sheet
Governmental Funds
June 30, 2024
34 60
211,964,063$
83,188,658$
19,950,273
14,823,055
164,624,590
74,946,708
17,511,638
8,692,200
383,737,122
(14,255,607)
(920,336)
(8,685,869)
(368,900,000)
(19,070,000)
(1,295,325)
5,465,916
(227,685,043)
(54,525,726)
(689,871,990)
(2,903,409)
(167,754)
(3,071,163)
2,858,252
2,858,252
115,110,390
21,463,647
(2,170,692)
(2,494,603)
131,908,742
(5,608,130)
31,916,896$
See accompanying notes to the basic financial statements.

SBITA liability
Accrued interest payable on SBITA liability
Public Property Financing Corporation refunding certificates of participation Joint Powers Financing Authority lease revenue bonds
Certificates of participation premium
Deferred refunding charge
Total pension liability
Total OPEB liability
Accrued interest payable on long-term debt does not require current financial resources and therefore interest payable is not reported as a liability in the Governmental Funds Balance Sheet.

Accrued interest payable on bonded debt
Deferred inflows of resources - OPEB
Internal service funds are used by management to charge the cost of fleet management and self-insurance to individual funds. The assets and liabilities of internal service funds are included in governmental activities in the Statement of Net Position.

Net Position of Governmental Activities
Accrued interest receivable on advance to Successor Agency is considered unavailable revenue and is reported as a deferred inflow in the Governmental Funds Balance Sheet.

The interest receivable is included in the governmental activities in the Statement of Net Position as additional advance to Successor Agency.

Deferred inflows of resources - unavailable revenue
Deferred outflows are not current assets or financial resources, and the deferred inflows are not due and payable in the current period, and therefore are not reported in the Governmental Funds Balance Sheet.

Deferred outflows of resources - pension
Deferred outflows of resources - OPEB
Deferred inflows of resources - pension
Notes payable
Construction in progress

CITY OF TORRANCE, CALIFORNIA
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position
June 30, 2024
Total fund balances of governmental funds
Amounts reported for governmental activities in the Statement of Net Position are different because:

Capital assets used in governmental activities are not current financial resources and therefore are not reported in the Governmental Funds Balance Sheet.

Land
Right-of-way
Infrastructure, net of $217,963,271 accumulated depreciation Buildings and improvements, net of $73,793,165 accumulated depreciation SBITA asset, net of $1,646,966 accumulated amortization Long-term liabilities, including bonds payable are not due and payable in the current period and therefore they are not reported in the Governmental Funds Balance Sheet.

Compensated absences
Machinery and equipment, net of $43,997,288 accumulated depreciation 35 61
General Fund
Nonmajor
Governmental Funds
Total Governmental
Funds
Revenues:

Taxes 231,322,318$ 1,277,827 $ 232,600,145 $ Licenses, fees and permits 5,257,568 2,079,820 7,337,388 Fines, forfeitures and penalties 727,156 242,302 969,458 Use of money and property 10,810,978 25,370,940 36,181,918 Intergovernmental 368,968 44,202,958 44,571,926 Charges for current services 25,460,614 - 25,460,614 Other revenues 696,805 284,518 981,323 Total revenues 274,644,407 73,458,365 348,102,772 Expenditures:

Current expenditures:

General government 31,899,220 5,085,066 36,984,286 Nondepartmental 10,343,454 - 10,343,454 Public safety 148,328,400 3,533,534 151,861,934 Public works 18,538,439 11,441,297 29,979,736 Culture and recreation 23,102,457 591,467 23,693,924 Community development 8,600,980 8,674,929 17,275,909 Debt service:

Principal retirement (note 8) - 9,955,000 9,955,000 Interest and fiscal charges - 12,638,178 12,638,178 Capital lease 217,996 - 217,996 Total expenditures 241,030,946 51,919,471 292,950,417 Excess of revenues over (under) expenditures 33,613,461 21,538,894 55,152,355 Other financing sources (uses):

Transfers in (note 14) 14,652,197 7,769,164 22,421,361 Transfers out (note 14) (11,605,911) (6,602,900) (18,208,811) SBITA 5,035,998 113,760 5,149,758 Total other financing sources (uses) 8,082,284 1,280,024 9,362,308 Net change in fund balances 41,695,745 22,818,918 64,514,663 Fund balances, July 1, 2023 78,439,211 69,010,189 147,449,400 Fund balances, June 30, 2024 120,134,956$ 91,829,107$ 211,964,063$ See accompanying notes to the basic financial statements.

CITY OF TORRANCE, CALIFORNIA
Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds
Year ended June 30, 2024
36 62
64,514,663$
(14,254,117)
13,132,771
(1,121,346)
217,996
9,955,000
1,095,773
57,570
(293,980)
11,032,359
32,634
32,634
(528,709)
(771,851)
(1,239,086)
(2,539,646)
(41,560,953)
(631,687)
8,050,229
37,776,253$
Governmental funds report pension contributions as expenditures. However, in the Statement of Activities, pension expense is measured as the change in total pension liability and the amortization of deferred outflows and inflows related to pensions. This amount represents the net change in pension related amounts.

Change in net position of governmental activities
See accompanying notes to the basic financial statements Compensated absences (excluding internal service funds) Interest receivable on advance to Successor Agency
SBITA
Internal service funds are used by management to charge the cost of fleet management and self- insurance to individual funds. The net revenue of certain activities are reported with the governmental activities.

Governmental funds report OPEB benefits paid to retirees as expenditures. However, in the statement of activities, OPEB expense is measured as the change in total OPEB liability and the amortization of deferred outflows and inflows related to OPEB. This amount represents the net change in OPEB related amounts.

The amounts below reported in the Statement of Activities do not provide for or require the use of current financial resources and, therefore, are not reported as revenues or expenditures in the governmental funds (net change).

Amortization of deferred refunding charge

CITY OF TORRANCE, CALIFORNIA
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds
to the Statement of Activities and Changes in Net Position For the Year Ended June 30, 2024
Net change in fund balances - total governmental funds
The change in net position reported for governmental activities in the Statement of Activities and Changes in Net Position is different because:

Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense.

Depreciation expense (excluding internal service funds) Asset additions funded by Governmental Funds
The issuance of long-term debt (e.g. bonds), provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. This amount is the net effect of these differences in the treatment of long-term debt and related items.

Bond principal payment
Amortization of bond premium
Under the modified accrual basis of accounting used in the governmental funds, expenditures are not recognized for transactions that are not normally paid with expendable, available financial resources. In the Statement of Activities, however, which is presented on the accrual basis, expenses and liabilities are reported regardless of when financial resources are available. In addition, interest on long-term debt is not recognized under the modified accrual basis until due, rather than as it accrues. This adjustment combines the net changes of accrued interest and advances.

Accrued interest payable on bonded debt
Notes payable
Subscription payment
37 63
Variance with
Actual Amounts Final Budget
Budgetary Basis positive
Original Final (see Note A) (negative)
Budgetary fund balance, July 1, 2023 78,439,211$ 78,439,211 $ 78,439,211 $ -$ Resources (inflows):

Taxes:

Property Taxes:

Current secured taxes 43,300,333 43,300,333 42,879,637 (420,696) Current unsecured taxes 1,500,099 1,500,099 1,406,545 (93,554) Prior years secured taxes - - - - Prior years unsecured taxes 59,961 59,961 61,176 1,215 VLF swap and repayment taxes 17,826,057 17,826,057 17,897,819 71,762 Penalties and interest 177,400 177,400 160,887 (16,513) Supplemental current secured 1,146,155 1,146,155 941,880 (204,275) Redemption 795,303 795,303 659,465 (135,838) Aircraft assessment tax 158,666 158,666 175,715 17,049 64,963,974 64,963,974 64,183,124 (780,850) Taxes other than property:

Sales and use tax 85,222,083 85,307,483 85,530,635 223,152 Prop 172 sales tax 2,096,177 2,096,177 2,112,861 16,684 Business license tax 9,954,870 9,954,870 10,544,653 589,783 Business permit tax 242,679 242,679 218,889 (23,790) Utility users tax 43,707,406 43,707,406 40,683,522 (3,023,884) Construction tax 2,033,484 2,033,484 1,308,065 (725,419)
Real property transfer tax 828,540 828,540 911,613 83,073 Franchise tax-all other 9,831,080 9,831,080 12,045,564 2,214,484 Public education government fees 350,000 350,000 277,038 (72,962) Occupancy tax 13,126,729 13,126,729 12,580,760 (545,969) Oil severance tax 14,041 14,041 4,998 (9,043) Cogeneration tax 757,698 757,698 605,913 (151,785) Alarm permit fees 181,248 181,248 314,683 133,435 168,346,035 168,431,435 167,139,194 (1,292,241) Total taxes 233,310,009 233,395,409 231,322,318 (2,073,091) Licenses, fees and permits:

Fire permits 181,656 181,656 230,474 48,818 Animal permits 152,923 152,923 106,059 (46,864) Construction/excavation permits 296,601 296,601 265,230 (31,371) Grading permits 107,248 107,248 89,870 (17,378) Building permits 2,906,912 2,906,912 2,457,274 (449,638) Plumbing permits 60,552 60,552 - (60,552) Electrical permits 242,209 242,209 441,489 199,280 Mechanical permits 128,371 128,371 183,922 55,551
Special energy inspection fees 974,890 974,890 1,009,269 34,379 Sign permits and filing fees 41,252 41,252 44,306 3,054 Other licenses and permits - - 158 158 NPDES building permit fees 466,305 466,305 390,833 (75,472) Building TEQECC filing fees 26,396 26,396 34,308 7,912 Oversized vehicle permit fees 7,214 7,214 4,376 (2,838) Total licenses, fees, and permits 5,592,529 5,592,529 5,257,568 (334,961) See accompanying notes to the basic financial statements (continued) Budgeted Amounts

CITY OF TORRANCE, CALIFORNIA
Statement of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual General Fund
Year Ended June 30, 2024
38 64
Variance with
Actual Amounts Final Budget
Budgetary Basis positive
Original Final (see Note A) (negative)
Budgeted Amounts

CITY OF TORRANCE, CALIFORNIA
Statement of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual General Fund
Year Ended June 30, 2024
Fines, forfeitures and penalties:

Parking citations 671,069$ 671,069 $ 671,393 $ 324 $ Administrative citations - - 55,763 55,763 Traffic fines 72,627 72,627 - (72,627) General fines 16,976 16,976 - (16,976) Total fines, forfeitures and penalties 760,672 760,672 727,156 (33,516) Use of money and property:

Investment earnings 1,649,160 1,649,160 7,573,115 5,923,955 Rents and concessions 2,985,396 2,985,396 3,230,473 245,077 Royalties 26,472 26,472 7,390 (19,082) Total use of money and property 4,661,028 4,661,028 10,810,978 6,149,950 Intergovernmental:

State motor vehicle licenses 131,225 131,225 181,407 50,182 State homeowners property tax relief 50,938 50,938 167,624 116,686 Other state grants 167,338 167,338 19,937 (147,401) Total Intergovernmental 349,501 349,501 368,968 19,467 Charges for current services:

TUSD collection fees - - 27,616 27,616 Planning and zoning fees 1,261,793 1,261,793 1,159,477 (102,316) Traffic signal maintenance 242,177 242,177 231,583 (10,594) State encroachment collection fees 8,114 8,114 6,043 (2,071) Grading 80,603
80,603 84,206 3,603 Plan check fees-building 2,419,458 2,719,458 3,340,996 621,538 Plan check fees-engineering 41,004 41,004 29,063 (11,941) Green building code fees 954,784 954,784 986,892 32,108 Appeal fees 3,931 3,931 875 (3,056) Other inspection fees 423,071 423,071 637,337 214,266 Engineering mapping fees 56,687 56,687 38,055 (18,632) Engineering inspection fees 887,872 887,872 735,962 (151,910) General government service charges 639,334 639,334 640,042 708 Advertising on shelters 207,685 207,685 57,798 (149,887) Microfilming fees 401,524 401,524 394,073 (7,451) Police charges-copies and photos 57,700 57,700 48,189 (9,511) Police charges-fingerprinting and other 377,267 482,267 323,940 (158,327) Fire department fees 8,721,105 8,721,105 9,463,425 742,320 Fire department fees-hazardous materials fees 989,584 989,584 979,339 (10,245) Cultural arts center fees 1,167,489 1,167,489 943,769 (223,720) Parks and recreational fees 4,507,044 4,507,044 5,235,588 728,544 Miscellaneous 53,980 53,980 89,265 35,285 Library revenues 3,419 3,419 7,081 3,662 Total charges for current services 23,505,625 23,910,625 25,460,614 1,549,989 See accompanying notes to the basic financial statements (continued) 39 65
Variance with
Actual Amounts Final Budget
Budgetary Basis positive
Original Final (see Note A) (negative)
Budgeted Amounts

CITY OF TORRANCE, CALIFORNIA
Statement of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual General Fund
Year Ended June 30, 2024
Other revenues:

Donations-private sources -$ 20,200 $ 57,660 $ 37,460 $ Miscellaneous 209,360 209,360 639,145 429,785 Total other revenues 209,360 229,560 696,805 467,245 SBITA - 5,035,998 5,035,998 - Transfers in 14,542,835 14,581,095 14,652,197 71,102 Amounts available for appropriation 361,370,770 366,955,628 372,771,813 5,816,185 Charges to appropriation (outflows)
General government:

City Council 491,690 532,213 473,805 58,408 Commissions and committees:

Parks and recreation 5,683 5,683 3,310 2,373 Planning 27,571 27,571 19,335 8,236 Environmental quality 1,674 1,674 1,152 522 Cultural arts 2,342 2,342 1,723 619 Traffic 1,991 1,991 1,816 175 Youth council 11,103 11,103 4,970 6,133 Historic preservation 2,389 2,389 1,122 1,267 Commission on aging 2,719 2,719 1,764 955 Library 3,357 3,357 3,084 273 Social services 25,125 25,125 11,651 13,474 City manager 7,480,444 7,295,504 7,005,816 289,688 City attorney 3,101,007 3,230,446 3,083,359 147,087 City clerk 1,348,368 1,438,957 1,399,018 39,939 City treasurer 341,917 365,667 342,715 22,952 Finance 6,230,960 6,571,866 5,966,666 605,200 Human resources 2,337,826 2,665,716 2,558,706 107,010 Civil service 698,922 1,036,303 1,011,164 25,139 Communications & Info Tech 10,846,906 8,861,456 8,811,059 50,397 General services 10,416,004 11,168,843 10,326,786 842,057 Less indirect cost allocation, other funds (8,557,193) (8,557,193) (7,901,694) (655,499) Total general government 34,820,805 34,693,732 33,127,327 1,566,405 Nondepartmental
Community promotion 542,093 603,577 557,656 45,921 Other 3,263,293 6,075,492 6,074,597 895 Leaseback payments 3,779,812 3,779,812 3,762,835 16,977 Total nondepartmental 7,585,198 10,458,881 10,395,088 63,793 See accompanying notes to the basic financial statements (continued) 40 66
Variance with
Actual Amounts Final Budget
Budgetary Basis positive
Original Final (see Note A) (negative)
Budgeted Amounts

CITY OF TORRANCE, CALIFORNIA
Statement of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual General Fund
Year Ended June 30, 2024
Community Development 9,604,882$ 8,843,277$ 8,667,264$ 176,013$ Public safety:

Police 95,466,846 89,919,141 89,379,382 539,759 Fire 58,971,023 60,282,795 60,280,217 2,578 Total public safety 154,437,869 150,201,936 149,659,599 542,337 Public works 19,180,298 19,635,990 19,517,101 118,889 Culture and recreation 27,055,352 23,850,402 23,388,680 461,722 Capital lease 217,996 217,996 217,996 - Transfers out 3,889,639 11,670,750 11,605,911 64,839 Total Charges to appropriations 256,792,039 259,572,964 256,578,966 2,993,998 Budgetary Fund Balance, July 1, 2024 104,578,731$ 107,382,664$ 116,192,847$ 8,810,183$ See accompanying notes to the basic financial statements 41 67

CITY OF TORRANCE, CALIFORNIA
Budgetary Comparison Statement
General Fund
Note A - Explanation of Differences between Budgetary Inflows and Outflows and GAAP Revenues and Expenditures
Sources/inflows of resources
Actual amounts (budgetary basis) "available for appropriation" $ 372,771,813 from the budgetary comparison statement
Differences - budget to GAAP:

The fund balance at the beginning of the year (as restated) is not a current year revenue for financial
reporting purposes (78,439,211)
SBITA are inflows of budgetary resources,
but are not revenues for financial reporting purposes (5,035,998) Transfers from other funds are inflows of budgetary
resources, but are not revenues for financial reporting purposes (14,652,197)
Total Revenues as reported on the statement of
revenues, expenditures, and changes in fund balances -
governmental funds $ 274,644,407
Uses/outflows of resources
Actual amounts (budgetary basis) "total charges
to appropriations" from the budgetary comparison
statement $ 256,578,966
Differences - budget to GAAP:

Encumbrances for supplies and equipment ordered but
not received is reported in the year the order is placed for budgetary purposes, but in the year the supplies
are received for financial reporting purposes (3,942,109) Transfers to other funds are outflows of budgetary
resources but are not expenditures for financial
reporting purposes (11,605,911)
Total expenditures as reported on the statement of
revenues, expenditures, and changes in fund balances -
governmental funds $ 241,030,946
Budget-to-GAAP Reconciliation
42 68

PROPRIETARY FUND

FINANCIAL STATEMENTS

ANNUAL COMPREHENSIVE FINANCIAL REPORT
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43 70
Transit
System
Fund
Water
Fund
Sewer
Fund
Municipal
Airport
Fund
Nonmajor
Enterprise
Fund Total
Internal Service
Funds
Assets and Deferred Outflows of Resources
Current assets:

Pooled cash and investments (note 2) 45,845,965$ 33,365,425 $ 13,841,619 $ 14,468,086 $ 8,171,904 $ 115,692,999 $ 64,122,824 $ Cash and cash equivalents with fiscal agents (note 2) - - - - - - 1,016,231 Accounts receivable 702,088 7,689,000 1,641,586 848,409 4,257,596 15,138,679 4,375,929 Accrued interest receivable 321,816 232,843 96,876 1,052,361 107,243 1,811,139 312,482 Lease receivable - current (note 5) - - - 5,468,258 - 5,468,258 - Inventory 1,625,485 4,356,067 - - - 5,981,552 1,458,789 Due from other governments (note 16) 3,905,040 - 311 - 1,857 3,907,208 - Prepaids 147,250 - - - 41,567 188,817 344,962 Total current assets 52,547,644 45,643,335 15,580,392 21,837,114 12,580,167 148,188,652 71,631,217 Noncurrent assets:

Advance to successor agency (note 13) - 1,217,738 - - - 1,217,738 - Lease receivable - long term (note 5) - - - 162,427,972 - 162,427,972 - Capital assets, net (note 3) 15,396,683 107,079,208 36,649,777 8,419,845 3,651,889 171,197,402 9,127,698 Total noncurrent assets 15,396,683 108,296,946 36,649,777 170,847,817 3,651,889 334,843,112 9,127,698 Deferred outflows of resources:

Deferred pension amounts 4,143,161 2,637,999 1,058,681 560,745 1,977,367 10,377,953 1,792,721 Deferred OPEB amounts 1,335,408 485,604 194,241 97,121 364,202 2,476,576 339,922 Total deferred outflows of resources 5,478,569 3,123,603 1,252,922 657,866 2,341,569 12,854,529 2,132,643 Total Assets and Deferred Outflows of Resources 73,422,896 157,063,884 53,483,091 193,342,797 18,573,625 495,886,293 82,891,558 Liabilities and Deferred Inflows of Resources
Current liabilities:

Accounts payable 791,619 3,988,661 18,389 725,295 432,984 5,956,948 548,327 Contract retainage payable 72,287 3,340 - 45,385 - 121,012 71,775 Deposits payable - 44,570 - 200,654 - 245,224 - Accrued interest payable 11,940 8,912 - - 50,699 71,551 18,715 Accrued liabilities 424,417 2,930,848 33,230 25,762 83,046 3,497,303 6,099,763 Compensated absences payable-current 318,550 107,857 35,452 58,249 75,511 595,619 9,783,476 Current installment sale loan payable -
principal (notes 7 and 8) - 594,529 - - - 594,529 - Easement payable - current - 58,116 - - - 58,116 - SBITA liability - current (note 6) 174,907 - - - - 174,907 54,494 Accrued liabilities for self-insurance claims -
current (note 15) - - - - - - 12,333,118 Unearned revenues (note 17) 11,828,920 - - 285,399 - 12,114,319 - Total current liabilities 13,622,640 7,736,833 87,071 1,340,744 642,240 23,429,528 28,909,668 Noncurrent liabilities:

Compensated absences payable - long term 906,643 306,979 100,900 165,786 214,916 1,695,224 - Long-term obligations (notes 7 and 8) - 2,659,273 - - - 2,659,273 - SBITA liability - long term (note 6) 457,420 - - - - 457,420 224,271 Accrued liability for self-insurance claims
long-term (note 15) - - - - - - 55,146,636 Total pension liability 7,696,142 5,304,803 2,033,509 976,253 3,534,229 19,544,936 3,226,864 Total OPEB liability 3,392,438 1,233,614 493,445 246,723 925,210 6,291,430 863,530 Total noncurrent liabilities 12,452,643 9,504,669 2,627,854 1,388,762 4,674,355 30,648,283 59,461,301 Deferred inflows of resources:

Deferred leases (note 5) - - - 153,880,155 - 153,880,155 - Deferred pension amounts 204,248 126,774 51,649 28,172 98,602 509,445 89,212 Deferred OPEB amounts 155,207 56,439 22,576 11,288 42,329 287,839 39,507 Total deferred inflows of resources 359,455 183,213 74,225 153,919,615 140,931 154,677,439 128,719 Total Liabilities and Deferred Inflows of Resources 26,434,738 17,424,715 2,789,150 156,649,121 5,457,526 208,755,250 88,499,688 Net Position
Net investment in capital assets 14,692,069 103,763,950 36,649,777 8,374,460 3,651,889 167,132,145 9,055,923 Restricted
Transportation program 32,296,089 - - - - 32,296,089 - Unrestricted - 35,875,219 14,044,164 28,319,216 9,464,210 87,702,809 (14,664,053) Total Net Position 46,988,158$ 139,639,169$ 50,693,941$ 36,693,676$ 13,116,099$ 287,131,043$ (5,608,130)$ Business-type Activities Governmental
ActivityEnterprise Funds
See accompanying notes to the basic financial statements.

CITY OF TORRANCE, CALIFORNIA
Statement of Net Position
Proprietary Funds
June 30, 2024
44 71
Transit
System
Fund
Water
Fund
Sewer
Fund
Municipal
Airport
Fund
Nonmajor
Enterprise
Fund Total
Internal Service
Funds
Operating revenues:

Charges for services 1,205,361$ 51,545,640 $ 6,875,943 $ 17,047,114 $ 15,766,963 $ 92,441,021 $ 31,247,321 $ Other 5,891 2,428,107 31,327 1,213,766 136,104 3,815,195 146,921 Total operating revenues 1,211,252 53,973,747 6,907,270 18,260,880 15,903,067 96,256,216 31,394,242 Operating expenses:

Salaries and employee benefits 19,838,691 6,723,723 1,932,552 1,462,666 4,542,394 34,500,026 4,685,167 Services and supplies 2,948,185 2,369,365 323,201 200,411 2,945,215 8,786,377 1,636,702 Other professional services 2,270,017 631,300 404,647 4,557,127 3,958,636 11,821,727 575,616 Depreciation and amortization 2,718,741 2,204,891 1,181,866 260,581 873,796 7,239,875 1,575,065 Insurance and claims 142,794 32,439 - - 41,780 217,013 19,504,753 City charges 6,227,487 2,860,822 713,950 668,916 3,211,434 13,682,609 1,206,536 Cost of water - 33,568,387 - - - 33,568,387 - Other 116,943 152,091 32,337 1,096 98,753 401,220 58,517 Total operating expenses 34,262,858 48,543,018 4,588,553 7,150,797 15,672,008 110,217,234 29,242,356 Operating income (loss) (33,051,606) 5,430,729 2,318,717 11,110,083 231,059 (13,961,018) 2,151,886 Nonoperating revenues (expenses)
Investment earnings 2,032,415 1,927,037 531,746 5,164,100 153,716 9,809,014 1,641,719 Gain on sale of capital assets 566,467 - - - 12,500 578,967 84,150 Assistance from other governments 25,573,193 - - - - 25,573,193 - Interest expense (11,971) (61,489) - - - (73,460) - Grants - - - - 398,140 398,140 - Total nonoperating revenues (expenses) net 28,160,104 1,865,548 531,746 5,164,100 564,356 36,285,854 1,725,869 Income (loss) before contributions and transfers (4,891,502) 7,296,277 2,850,463 16,274,183 795,415 22,324,836 3,877,755 Capital grants 61,877 - - - - 61,877 - Transfers in (note 13) 3,000,000 12,430 22,212 - 351,768 3,386,410 4,200,000 Transfers out (note 13) (76,578) (8,868) - (10,454,994) (1,230,994) (11,771,434) (27,526) Change in net position (1,906,203) 7,299,839 2,872,675 5,819,189 (83,811) 14,001,689 8,050,229 Total net position - July 1, 2023 48,894,361 132,339,330 47,821,266 30,874,487 13,199,910 273,129,354 (13,658,359) Total net position - June 30, 2024 46,988,158$ 139,639,169$ 50,693,941$ 36,693,676$ 13,116,099$ 287,131,043$ (5,608,130)$ Business-type Activities Governmental
ActivityEnterprise Funds
See accompanying notes to the basic financial statements.

CITY OF TORRANCE, CALIFORNIA
Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds
Year ended June 30, 2024
45 72
Transit
System
Fund
Water
Fund
Sewer
Fund
Municipal
Airport
Fund
Nonmajor
Enterprise
Fund Total
Internal Service
Funds
Cash flows from operating activities:

Receipts from customers 1,205,361$ 51,378,378$ 7,096,971$ 13,967,796$ 15,974,437$ 89,622,943$ 32,048,766$ Cash payments to suppliers for goods and services (12,342,301) (39,647,913) (1,509,457) (5,122,106) (10,773,248) (69,395,025) (19,293,718) Cash payments to employees for services (18,477,372) (5,834,510) (1,707,373) (1,273,661) (3,955,812) (31,248,728) (3,415,347) Other receipts 5,891 2,428,107 31,327 1,213,766 136,104 3,815,195 146,921 Net cash provided by (used in) operating activities (29,608,421) 8,324,062 3,911,468 8,785,795 1,381,481 (7,205,615) 9,486,622 Cash flows from noncapital financing activities:

Cash received from noncapital grants and subsides 28,362,510 - - - 398,140 28,760,650 - Cash received from other funds 3,000,000 12,430 22,212 - 351,768 3,386,410 4,200,000 Cash transfers paid to other funds (76,578) (8,868) - (10,454,994) (1,230,994) (11,771,434) (27,526) Net cash provided by (used in) noncapital financing activities 31,285,932 3,562 22,212 (10,454,994) (481,086) 20,375,626 4,172,474 Cash flows from capital financing activities:

Cash received from capital grants and subsidies 61,877 - - - - 61,877 - Cash payments for capital additions (3,348,569) (9,099,836) (286,203) (499,815) (456,946) (13,691,369) (4,976,060) Proceeds from sale of capital assets 566,467 - - - 12,500 578,967 84,150 Payments for long-term obligations - principal & interest - (641,145) - - - (641,145) - Net cash provided by (used in) capital financing activities (2,720,225) (9,740,981) (286,203) (499,815) (444,446) (13,691,670) (4,891,910) Cash flows from investing activities:

Cash received from interest on investments 1,993,106 1,424,789 495,598 5,030,864 129,822 9,074,179 1,500,599 Cash paid for interest on investments (11,149) - - - - (11,149) - Cash provided by (used in) investing activities 1,981,957 1,424,789 495,598 5,030,864 129,822 9,063,030 1,500,599 Net increase (decrease) in cash, restricted cash and
cash equivalents 939,243 11,432 4,143,075 2,861,850 585,771 8,541,371 10,267,785 Cash and cash equivalents, July 1, 2023 44,906,722 33,353,993 9,698,544 11,606,236 7,586,133 107,151,628 54,871,270 Cash and cash equivalents, June 30, 2024 45,845,965$ 33,365,425$ 13,841,619$ 14,468,086$ 8,171,904$ 115,692,999$ 65,139,055$ Reconciliation of cash and cash equivalents:

Pooled cash and investments 45,845,965 33,365,425 13,841,619 14,468,086 8,171,904 115,692,999 64,122,824 Cash and cash equivalents with fiscal agents - - - - - - 1,016,231 Total cash and cash equivalents 45,845,965$ 33,365,425$ 13,841,619$ 14,468,086$ 8,171,904$ 115,692,999$ 65,139,055$ Reconciliation of operating income (loss) to net cash provided by (used in) operating activities:

Operating income (loss) (33,051,606)$ 5,430,729$ 2,318,717$ 11,110,083$ 231,059$ (13,961,018)$ 2,151,886$ Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization 2,718,741 2,204,891 1,181,866 260,581 873,796 7,239,875 1,575,065 Bad debt expense - - - 30,583 - 30,583 - Changes in assets and liabilities:

Accounts receivable (659,734) (167,262) 221,028 124,481 207,474 (274,013) 801,445 Prepaids and other assets (6,211) - - - (40,324) (46,535) (104,275) Inventory (100,969) (148,123) - - - (249,092) (55,637) Accounts payable 346,272 (2,598,590) (35,322) 279,612 219,165 (1,788,863) (792,813) Accrued salaries and benefits 103,585 94,822 (93,526) 20,456 (8,496) 116,841 730,002 Other accrued liabilities (279,210) 2,713,204 - (4,751) (696,271) 1,732,972 4,641,131 Lease receivable - - - 5,968,091 - 5,968,091 - SBITA liability 56,755 - - - 56,755 - Deferred outflows related to pensions 1,122,493 728,708 289,143 149,659 530,915 2,820,918 482,124 Deferred outflows related to OPEB (775,392) (281,961) (112,784) (56,393) (211,470) (1,438,000) (197,373) Total pension liability 333,502 202,613 83,607 46,709 162,508 828,939 146,788 Total OPEB liability 881,301 320,473 128,189 64,095 240,354 1,634,412 224,332 Deferred inflows related to pensions (231,340) (151,221) (59,762) (30,677) (109,063) (582,063) (99,098) Deferred inflows related to OPEB (66,608) (24,221) (9,688) (4,844) (18,166) (123,527) (16,955) Deferred inflows related to leases - - - (8,998,090) - (8,998,090) - Deposits and guarantees - - - (355) - (355) - Unearned revenues - - - (173,445) - (173,445) - Net cash provided by (used in) operating activities (29,608,421)$ 8,324,062$ 3,911,468$ 8,785,795$ 1,381,481$ (7,205,615)$ 9,486,622$ See accompanying notes to the basic financial statements.

Business-type Activities Governmental
ActivityEnterprise Funds
Noncash, investing, capital and financing activities:

During fiscal year 2023-24, there were no significant noncash investing, capital, or financing activities.

CITY OF TORRANCE, CALIFORNIA
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2024
46 73

FIDUCIARY FUND

FINANCIAL STATEMENTS

ANNUAL COMPREHENSIVE FINANCIAL REPORT
74 Private-
Purpose Total
Trust Custodial
Assets Fund Funds
Pooled cash and investments (note 2) $ 2,527,907 $ 2,659,806 Cash and cash equivalents with fiscal agents (note 2) 270 - Accounts receivable - 486,520
Accrued interest receivable - 5,974
Due from other governments - 133,612
Prepaids - 101,826
Capital assets, net - 299,845
Total assets 2,528,177 3,687,583
Liabilities
Accounts payable - 19,190
Deposits payable - 370,761
Interest payable 139,250 -
Advances from City (notes 13 and 21) 6,415,990 61,440 Unearned revenue - 176,028
Long-term debt:

Due within one year (note 21) 2,467,071 -
Due in more than one year (note 21) 34,642,949 - Total Liabilities 43,665,260 627,419
Net Position (Deficit)
Restricted for individuals and organizations (41,137,083) 3,060,164 Total Net Position (Deficit) $ (41,137,083) $ 3,060,164 See accompanying notes to basic financial statements.

CITY OF TORRANCE, CALIFORNIA
Statement of Net Position - Fiduciary Funds
June 30, 2024
47 75
Private-
Purpose Total
Trust Custodial
Additions Fund Funds
Property taxes $ 4,126,386 $ -
Contributions - 1,217,263
Fees - 20,605
Use of money and property 2,130 28,755 Total additions 4,128,516 1,266,623
Deductions
Residual commitments of former redevelopment agency 250,000 - Salaries and employee benefits - 181,286 Services and supplies - 32,680 Other professional services 10,490 722,770 Insurance and claims - 35,017
Depreciation and amortization - 116,824 Membership fees - 77,745
Debt service
Interest and fiscal charges of former redevelopment agency 1,218,320 - Other 4,000 -
Total deductions 1,482,810 1,180,617
Change in net position 2,645,706 86,006
Net position (deficit) - beginning (43,782,789) 2,974,158 Net position (deficit) - ending $ (41,137,083) $ 3,060,164 See accompanying notes to basic financial statements.

CITY OF TORRANCE, CALIFORNIA
Statement of Changes in Net Position - Fiduciary Funds
Year Ended June 30, 2024
48 76

NOTES TO BASIC

FINANCIAL STATEMENTS

ANNUAL COMPREHENSIVE FINANCIAL REPORT
77 CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

(1) Description of Funds and Summary of Significant Accounting Policies Reporting Entity
The City of Torrance (the City) was incorporated in 1921 and became a charter city in 1947. The City is governed by an elected mayor and a si

x-member council and provides a wide range of
services including police and fire protection, sanita tion and water services, airport and bus transit services, the construction and maintenance of street s and infrastructure, and recreational activities.

The accompanying annual comprehensive financial report includes the financial activities of the City, the primary government, and its component units, entities for which the government is considered to be financially accountable. A descr iption of the component units and the method of incorporating their financial information into the financial statements are summarized as follows:

The Torrance Joint Powers Financing Authority (the Authority) was created in 2020 by the City and the Industrial Development Authority of the City to assist the City with its financing programs. The City is obligated to make certain payments to

California Public Employees’ Retirement System
(CalPERS) in respect of current and retired public safety employees and miscellaneous employees under the pension programs of CalPERS. The Aut

hority issued revenue bonds for the purpose of
refunding all or a portion of the City’s obligatio ns under the CalPERS contract. In addition, the Authority issued revenue bonds to refund all or a portion of the City’s obligations with respect to its Certificates of Participation, Series 2014, and to finance the North Torrance Well Field Project. The financial activity of the Authority has been blended into the City’s financial statements within the Governmental Activities in the financial statements.

Separate financial statements for the Torrance Jo int Powers Financing Authority can be obtained from the City’s Finance Director.

Government-Wide and Fund Financial Statements
The Government-wide Financial Statements include a Statement of Net Position and a Statement of Activities and Changes in Net Position. These st atements present summaries of Governmental and Business-Type Activities for the City accompanied by a total column. Fiduciary activities of the City are not included in these statements. Certai n eliminations have been made as prescribed by GASB Statement No. 34 in regards to interfund activ ities, payables and receivables. All internal balances in the Statement of Net Position have b een eliminated except those representing balances between the governmental activities and the business-t ype activities. When such balances exist, they are presented as internal balances and elimin ated in the total primar

y government column.

Governmental activities, which normally are suppo rted by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.

The Statement of Activities and Changes in Net

Position demonstrates the degree to which the
direct and indirect expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Indirect expenses are allocated based on the annual City-wide cost allocation plan. Program revenues include 1) charges to customers or applicants who purchase, use or directly benefit from goods, 49 78

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

services, or privileges provided by a given function or segment and 2) grants and contributions, including special assessments that are restricted to meeting the op erational or capital requirements of a particular function or segment. Taxes a

nd other items not properly included among program
revenue are reported instead as general revenues. In the Statement of Activities and Changes in Net Position, internal service fund transactions have been eliminated; however, those transactions between the governmental and business type activities have not been eliminated.

The underlying accounting system of the City is or ganized and operated on the basis of separate funds, each of which is considered to be a separ ate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, deferred outflows of resources, liabilities, deferred infl ows of resources, net position, revenues, and expenditures or expenses, as appropriate. Governme ntal resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.

Separate financial statements are provided for governmental funds, enterprise funds, and fiduciary funds, even though the latter are excluded from the Government-wide financial statements, major individual governmental funds and major indivi dual enterprise funds are reported as separate columns in the fund financial statements.

Measurement Focus, Basis of Accounting, and Financial Statement Presentation The accounting and financial reporting treatment is determined by the applicable measurement focus and basis of accounting. Measurement focu s indicates the type of

resources being measured
such as current financial resources or economic resources. The basis of accounting indicates the timing of transactions or events for recognition in the financial statements.

The government-wide financial statements are re ported using the economic resources measurement focus and the accrual basis of accounting, as ar e the proprietary fund and private-purpose trust funds financial statements. Under the economic

resources measurement focus, all assets, deferred
outflows of resources, liabilities and deferred inflow s of resources (whether current or noncurrent) associated with their activity are included on their statements of net position. Operating statements present increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash

flows. Property taxes are recognized as revenues
in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

The City’s fiduciary fund financial statements report custodial funds and private-purpose trust funds. Custodial funds are used to account for si tuations where the government’s role is purely custodial. Private-purpose trust funds and custod ial funds are accounted for using the economic resources

measurement focus and the accrual basis of accounting.
50 79

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

Governmental fund financial statements are pr epared using the current financial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized in these funds when susceptible to accrual (i.e. when they are both measurable and available). “Measurabl e” means the amount of the transaction can be determined and “available” means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. For this purpose the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period, except for franchise taxes and grant revenues (for which the av ailability period is 180 days). Property taxes, taxpayer-assessed tax revenues (e.g., franchise taxes, sales taxes, motor vehicle fees, etc.), licenses, permits, charges for services, interest, and other miscellaneous revenues associated with the current fiscal period are all considered susceptible to accr ual and have been recognized as revenues of the current fiscal period. Expenditures in the govern mental funds are generally recognized in the accounting period in which the related fund liabil ity is incurred, if measurable, except for unmatured principal and interest on general long term debt, which is recognized when due.

The City reports the following major Governmental Fund:

The General Fund is the government’s primary operati ng fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.

The City reports the following major Enterprise Funds:

The Transit System Fund is used to account for the operation of the City’s transit system.

The Water Fund is used to account for the provision of water services to the residences and businesses of the City.

The Sewer Fund is used to account for the revenues and expenses associated with the operation and improvement of the City’s sewer system.

The Municipal Airport Fund

is used to account for the airfield operations of the City and leasing of commercial property outside of the airfield.

Additionally, the City reports the following fund types:

The Special Revenue Funds are used to account for the proceed s of specific revenue sources (other than special assessments, expendable trusts, or ma jor capital projects), that are restricted to expenditures for special purposes.

The Capital Project Funds are used to account for the acquisition, construction and improvement of capital facilities financed by transfers from the General Fund or debt financing.

The Debt Service Funds are used to account for the accumulati on of resources for, and the payment of, long-term debt principal, interest and re lated costs other than those being financed by proprietary funds.
51 80

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

The Internal Service Funds consist of the Fleet Services Fund which is used to account for costs relating to the City’s vehicular equipment; the Self-Insurance Fund that is used to account for risk management activities and the Postemployment/Com pensated Absences Fund that is used to account for inter-fund charges for postemployment

and compensated absence
s benefits. These
funds are financed by charges to other departments or agencies of the City on a cost reimbursement basis.

The Trust and

Custodial Funds are used to account for the resource s held by the City in a fiduciary capacity. The City's fiduciary funds include custodial funds, which are custodial in nature (assets equal liabilities) and a private-purpose trust fund which does include measurement of results of operations. The custodial funds are included in the Statement of Net Position and in the Statement of Changes in Net Position – Fiduciary Fund s and are accounted for on an accrual basis of accounting. The City uses a custodial (fiducia ry) funds to account for employee unspent pre-tax benefits collected from the participating employees

in the Flexible Benefits Fund, safekeeping and
disbursement of the private property collected and held in the custody of the police department in the Property Room Evidence Fund, the Area G Citiz en Corps Program Fund to account for Area G cities’ contributions to finance the community em ergency response teams, and the Interoperability Network of South Bay Fund to account for memb er city revenues to finance a wide-area interoperable government communications netw ork. The City uses a private-purpose trust (fiduciary) fund to account for th e successor agency activities since

the dissolution of the former
redevelopment agency (governmental) funds on February 1, 2012 (see Note 21).

The Enterprise Funds are presented on an “economic resour ces” measurement focus and the full- accrual basis of accounting. Accordingly, all of the City’s assets, deferred outflows of resources, liabilities and deferred inflows of resources, includi ng capital assets, infrastructure assets, and long- term liabilities, are included in the accompanying Statement of Net Position. The Statement of Revenues, Expenses and Changes in Fund Net Positi on presents changes in net assets. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. The types of transactions reported as program revenues for the City are reporte d in three categories: 1) charges for services, 2) operating grants and contributions, and 3) capital grants and contributions.

Enterprise funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with an enterprise fund’s prin

cipal ongoing operations. The principal operating
revenues for the Water Enterprise Fund, the Sewer Enterprise Fund, the Sanitation Enterprise Fund, the Transit System Enterprise Fund, and the M

unicipal Airport Enterprise Fund are charges for
goods and services. Operating expenses for these same enterprise funds include the cost of sales and services, administration expenses, and de preciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.

When both restricted and unrestricted resources are available for use, it is the government’s policy to use restricted resources first, then unrestricted resources, as they are needed. 52 81

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

Accounting for Encumbrances
The encumbrance system of accountin g is used. An encumbrance is

recorded as a charge against
appropriations in the accounting period in which a purchase order is issued, rather than in the accounting period when goods or services are received, as required by the United States of America generally accepted accounting principles (U.S. GAAP). Encumbrances at year end are reported as restricted, committed, or assigned depending on the resources that have been identified to fund the applicable encumbrance.

Cash and Investments
The City pools all nonrestricted cash from all funds for the purpose of increasing interest earnings through investment activities. Investments are carried at fair value. Fair value is estimated by the City’s investment management service. The fair value of guaranteed investment contracts and other investments with no regular market are at co st. The fair value of mutual funds, government- sponsored investment pools and other similar investme nts is stated at share value. Certain money market investments with initial maturities at the time of the purchase of less than one year are recorded at cost which approximates market. Inte rest income is allocated monthly to the various funds based on their average monthly cash balances. Interest income earned on restricted cash and investments is deposited directly to the fund earning the income.

For purposes of reporting cash flows for Enterprise Fund types, cash and cash equivalents include cash on hand and investments purchased with maturiti es within 90 days. Cash includes deposits in the cash management pool that has the general characteristics of a demand deposit account.

Cash and Cash Equivalents with Fiscal Agents
Cash and investments restricted as to their use by debt resolutions.

Inventories and Prepaids
Inventories of supplies as determined by perpetua

l records are accounted for using the consumption
method and are stated at cost applied on a first-in, first-out basis.

Prepaids are items that were paid in the current fiscal year but pertain to the next fiscal year activities. The governmental funds use the consumption method in accounting for prepaids.

Capital Assets
The City’s assets are capitalized at historical cost or estimated historical cost. City policy has set the capitalization threshold for reporting capital assets at $5,000. Gifts or contributions of capital assets are recorded at acquisition value when receive d. Depreciation is recorded on a straight-line basis over the useful life of the assets as follows:

53 82

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

Buildings – 40 years
Improvements – 40 years
Equipment – 5 to 7 years
Infrastructure – 25 to 80 years
For Enterprise Fund types, capital assets are recorded at historical cost, except assets of the Water Enterprise Fund acquired prior to June 30, 1980 whic h are recorded at their estimated historical cost. Depreciation is provided for on the straight-line method over the estimated useful lives of the assets.

Property Tax Calendar
In 1978, a state constitutional amendment (Propositi on 13) provided that the property tax rate is generally limited to 1% of market value, levied only by the County and shared with all other jurisdictions. The County of Los Angeles collects the taxes and distributes such revenues to taxing jurisdictions on the basis of the taxing jurisdicti ons’ assessed valuations subject to adjustments for voter-approved debt. Property taxes levied on March 1, are due on November 1 and March 1 and become delinquent on December 10 and April 10 for th e first and second installments, respectively.

The lien date is January 1. City

property tax revenues are recognized when levied to the extent that they result in current receivables

collectible within 60 days.

Pension Plans
For purposes of measuring the total pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about th e fiduciary net position of the Local Government of the City’s CalPERS plans (Plans) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS.

Similar information for the PARS Enhanced Retirement Defined Benefit Pension Plan is based on its own actuarial report. For this purpose, benefit payments (includi ng refunds of employee contributions) are recognized when due and payabl e in accordance with the benefit terms of each plan. Investments are reported at fair value.

Governmental Accounting Standards Board Statem ent 68 (GASB 68) requires that the reported results must pertain to liability and asset informati on within certain defined timeframes. For this report, the following timeframes are used:

CalPERS pension:

Valuation date (VD) June 30, 2022
Measurement date (MD) June 30, 2023
Measurement period (MP) June 30, 2022 to June 30, 2023

54 83

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

PARS pension:

Valuation date (VD) June 30, 2023
Measurement date (MD) June 30, 2023
Measurement period (MP) July 1, 2022 to June 30, 2023
Postemployment Benefits Other Than Pensions (OPEB)
For purposes of measuring the total OPEB liability and deferred outflows /inflows of resources related to OPEB, and OPEB expe nse, information about the fiduc iary net position of the Local Government of the City’s OPEB plan (Plan) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basi s as they are reported by the Plan. For this purpose, benefit payments are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

Governmental Accounting Standards Board Stat ement 75 (GASB 75) requires that the reported results must pertain to liability and asset informati on within certain defined timeframes. For this report, the following timeframes are used:

Valuation date (VD) June 30, 2023
Measurement date (MD) June 30, 2023
Measurement period (MP) July 1, 2022 to June 30, 2023
Vacation and Sick Leave
It is the policy of the City to

record the cost of vested vacation and sick leave as earned. This amount is included as a liability in the governmental activities in government-wide statements.

Claims and Judgments
The City is self-insured for State unemployment insurance, general liability claims, long-term disability and individual workers’ compensation claims of City employees up to certain limits. The City has established risk financing Internal Se rvice Funds where assets are set aside for claim settlements. The unpaid claims liabilities are included in the Self-Insurance Internal Service Fund.

Deferred Outflows and Deferred Inflows of Resources
In addition to assets, the Statement of Net Positi on and the Governmental Funds Balance Sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources , represents a consumption of net assets that applies to future periods and will not be recognized as an outflow of resources (expense/expenditure) until that time. The City h

as the following items that qualify for reporting in
this category:
 Deferred loss on refunding, net of accumulate d amortization reported in the government-wide statement of net position. A deferred loss on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and 55 84

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

amortized over the shorter of the life of the refunded or refunding debt.

 Deferred outflows related to pensions/OPEB e qual to employer contributions made after the measurement date of the total pension/OPEB liability.

 Deferred outflows related to pensions for diff erences between expected and actual experience.

This amount is amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plans.

 Deferred outflows from pensions resulting fro m changes in assumptions. These amounts are amortized over a closed period equal to the av

erage expected remaining service lives of all
employees that are provided with pensions through the plans.

In addition to liabilities, the Statement of Net Position and the Governmental Funds Balance Sheet will sometimes report a separate section for deferred in

flows of resources. This separate financial
statement element, deferred inflows of resources, represents an acquisition of net assets that applies to future periods and will not be recognized as an inflow of resources (revenue) until that time. The City has the following items that qualify for reporting in this category:
 Deferred inflows from unavailable revenues, which arises only under a modified accrual basis of accounting, is reported only in the government al funds balance sheet. The governmental funds report unavailable revenues for interest. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available.

 Deferred inflows related to pensions/OPEB for differences between expected and actual experience. This amount is amortized over a clo sed period equal to the average of the expected remaining service lives of all employees that are provided with pens ions/OPEB through the plans.

 Deferred inflows from pensions/OPEB resulti ng from changes in assumptions. These amounts are amortized over a closed period equal to the average expected remaining service lives of all employees that are provided with pensions/OPEB through the plans.

 Deferred inflows related to pensions/OPEB resulting from the difference in projected and actual earnings on investments of the pensions/OPEB plan fiduciary net position. These amounts are amortized over five years.

 Deferred inflows related to certain leases wh ich are measured at the present value of lease payments expected to be received during the lease term, plus any payments received at or before the commencement of the lease term that relate to future periods.

56 85

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

Fund Balance
Fund balances are reported in the fund statements in the following classifications:

Nonspendable Fund Balance
Nonspendable Fund Balance – this includes amounts th at cannot be spent beca use they are either not spendable in physical form (such as inventory) or that are legally or contractually required to be maintained intact (such as endowments).

Spendable Fund Balance
Restricted Fund Balance – this includes amount s that can be spent only for specific purposes stipulated by external legal requirements im posed by other governments, external resource providers, or creditors. City Council imposed rest rictions do not create restricted fund balance unless the legal document that initially authorized th

e revenue (associated with

that portion of fund
balance) also included language that specified the limited use for which the authorized revenues were to be expended.

Committed Fund Balance – this includes amounts that can only be used for specific purposes pursuant to the most binding constraint imposed by formal action of the City Council. Those committed amounts cannot be used for any other pur pose unless City Council rescinds or modifies the specified use by resolution. If the Council resolution that limits the use of the funds was separate from the action that initially created the reve nues that form the basis for the fund balance, then the resultant fund balance is considered to be committed, not restricted. The City considers a resolution to constitute a formal action of City Council for the purposes of establishing committed fund balance.

Assigned Fund Balance – this includes amounts that ar e intended to be used for specific purposes.

In Section 3 of the Operating Budget Resolution of the City, City Council delegated authority to assign amounts for specific purposes to the City Manager.

Unassigned Fund Balance – this includes the rema ining spendable amounts which are not included in one of the other classifications. The Gene ral Fund is the only fund that reports positive unassigned fund balance. In other governmental funds, if expenditures incurred for specific purposes exceeded the amounts restricted, committe d, or assigned to those purposes, negative unassigned fund balance is reported.

It is the City’s policy that restricted resources will be applied first, followed by (in order of application) committed, assigned, and unassigned resources, in the absence of a formal policy adopted by the Council.

57 86

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

Net Position
In the government-wide financial

statements and proprietary fund
financial statements, net position
is reported in three classifications:

Net Investment in Capital Assets - This amount consists of capital assets net of accumulated depreciation and reduced by outstanding debt and cap ital related payables that is attributed to the acquisition, construction, or improvement of the assets.

Restricted Net Position - This amount is restricted by external creditors, grantors, contributors, or laws or regulations of other governments.

Unrestricted Net Position - This amount is all net position that does not meet the definition of “net investment in capital assets” or “restricted net position”.

Net Position Flow Assumptions
Sometimes the City will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net positi on in the government-wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied.

It is the City’s practice to consider restricted ne t position to have been depleted before unrestricted net position is applied.

Budgetary Principles
The City uses the modified accrual plus encumbra nces as its budgetary basis of accounting. The City is required by its Charter to adopt an annual budget. On or befo re the first day of June each year, the City Manager shall submit to City Council a proposed budget for all departments. The said budget shall include estimates for all revenues and expenditures for the ensuing year. From the effective date of the budget, the amounts stated therein, as proposed expenditures become appropriations to the various City departments. The following governmental funds are annually appropriated: General Fund, Debt Service Fund, Rental Assistance Program Fund, Street Lighting District Assessment Fund, Vanpool Rideshare Fund, Low Mod Housing Fund, and Meadow Park Parking Lot District Fund. Budgets for the Cap ital Improvement Fund and Special Revenue Capital Project Funds are long-term in nature. Therefor e, no budgetary comparisons are presented in the accompanying financial statements. The enterprise f

unds with annual appropriations are: Transit
System Fund, Water Fund, Sewer Fund, Municipal Airport Fund, and Sanitation Fund.

The City Council may amend the budget by a major ity vote during the fiscal year. The City Manager may make such changes within the budget totals and allocations of any department during the fiscal year as he deems reasonably necessary in order to meet the City’s needs or goals, however, the City Manager may not increase appr opriations allocated in the budget for any 58 87

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

department without an amendment to the budget approved by the City Council. All operating appropriations lapse at the end of the fiscal year to the extent they have not been expended or encumbered. Capital project appropriations la pse when individual projects are completed or canceled.

Expenditures may not legally exceed budgeted appropriations at the department level. Budgeted revenue amounts, as presented in the accompanying financial statements, represent the original budget as modified by adjustments during the year for those items which were contingent upon new or additional revenue sources. Budgeted expenditure amounts repr esent original appropriations adjusted for supplemental appropriations during the year.

New Accounting Pronouncements
Current Year Standards
GASB 99, “Omnibus 2022”,

effective upon issuance for requirements related to extension of the use of LIBOR, accounting for SNAP distributions, disclosures of nonmonetary transactions, pledges of future revenues by pledging governme nts, clarification of certain provisions in Statement 34, as amended, and terminology updates related to Statement 53 and Statement 63. This statement is effective for fiscal years beginning after June 15, 2022 for requirements related to leases, PPPs, and SBITAs. This statement is also effective for fiscal years beginning after June 15, 2023 for requirements related to financial guara ntees and the classification and reporting of derivative instruments within the scope of Statem ent 53. The implementation of this standard did not have an impact on the City’s financial statements.

GASB 100, “Accounting Changes and Error Corrections”,

effective for fiscal years beginning
after June 15, 2023. This statement enhances the accounting and financial reporting requirements for accounting changes and error corrections. It defines

accounting changes
as changes in
accounting principles, changes in accounting estimat es, and changes to or within the financial reporting entity. The implementation of this standard did not have an impact on the City’s financial statements.

Pending Accounting Standards
GASB has issued the following statements, whic h may impact the City’s financial reporting requirements in the future:

GASB 101, “Compensated Absences”, effective for fiscal years beginning after December 15, 2023. This statement updates the recognition and measurement guidance for compensated absences through aligning the guidance under a unified mode l and by amending certain previously required disclosures.

59 88

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

GASB 102, “Certain Risk Disclosures”,

effective for fiscal years beginning after December 15, 2023. This statement provides users of government

financial statements with essential information
about risks related to a government’s vulnerabilities due to certain concentrations or constraints.

GASB 103, “Financial Reporting Model Improvements”, effective for fiscal years beginning after June 15, 2025. This statement improves key components of the financial reporting model to enhance its effectiveness in providing inform ation that is essential for decision making and assessing a government’s accountability.

GASB 104, “Disclosure of Certain Capital Assets”, effective for fiscal years beginning after June 15, 2025. This statement requires certain types of capital assets to be disclosed separately in the capital assets note disclosure, and requires additional disclosures for capital assets held for sale.

Use of Estimates
The preparation of financial statements in acco

rdance with U.S. GAAP requires management to
make estimates and assumptions that affect the reported amounts of assets, deferred outflows of resources, liabilities and deferred inflows of resources at the date of the financial statements and the reported amounts of revenues and expenditures/ expenses during the reporting period. Actual results could differ from those estimates.

60 89

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

(2) Cash and Investments
Cash and investments as of June 30, 2024 are cl

assified in the accompanying financial statements
as follows:

Statement of net position:

Cash and investments 345,963,082 $
Cash and investments held by bond trustee 32,471,963
Fiduciary funds:

Cash and investments 5,187,713
Cash and investments held by bond trustee 270
Total cash and investments 383,623,028 $

Cash and investments as of June 30, 2024 consist of the following:

Cash on hand 5,609$
Cash with fiscal agent 1,023,903
Deposits with financial institutions 43,855,320
Investments 338,738,196
Total cash and investments 383,623,028$

61 90

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

Investments Authorized by the California Government Code and the City Investment Policy

The table that follows identifies the investment types that are authorized for the City by the California Government Code and the City invest ment policy. The table also identifies certain provisions of the California Government Code (or th e City investment policy, if more restrictive) that address

interest rate risk
, credit risk, and concentration of credit risk . This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the ge neral provisions of the California Government Code or the City investment policy.

Authorized *Maximum *Maximum
Investment Types By Investmen t *Maximum Percentage Investment Authorized by State Law Policy Maturity Of Portfolio In One Issuer

Local Agency Bonds Yes 5 years 10% None
U.S. Treasury Obligations Yes 5 years None None
U.S. Agency Securities Yes 5 years 75% 30%
Banker's Acceptances Yes 180 days 20% 5%
Commercial Pape r Yes 270 days 15% 10%
Negotiable Certificates of Deposit Yes 5 years 20% None Time Certificates of Deposi t Yes 1 year 10% None
Repurchase Agreements Yes 30 days 10% None
Reverse Repurchase Agreements No N/A N/A None
Medium-Term Notes Yes 5 years 20% 5%
Mutual Funds No N/A N/A N/A
Money Market Mutual Funds Yes N/A None None
Mortgage Pass-Through Securities No N/A N/A None
County Pooled Investment Funds No N/A N/A None
Local Agency Investment Fund (LAIF) Yes N/A $65 mil per agency
None
JPA Pools (other investment pools) No N/A N/A None
* Based on state law requirements or investment policy requirements, whichever is more restrictive.

62 91

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

Investments Authorized by Debt Agreements

Investment of debt proceeds held by bond trustee is governed by provisions of the debt agreements, rather than the general provisions of the Califor nia Government Code or the City investment policy. The following table identifies the investment types that are authorized for investments held by bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk,

credit risk
, and concentration of credit risk.

Maximum Maximum
Authorized Maximum Percentage Investment
Investment Type Maturity Allowed In One Issuer

U.S. Treasury Obligations None None None
U.S. Agency Securities None None None
Banker's Acceptances 180 days None None
Commercial Pape r 270 days None None
Money Market Mutual Funds N/A None None
Investment Contracts 30 years None None
LAIF None None None

Disclosures Relating to Fair Value Measurement

The City categorizes its fair value measurements within the fair value hierarchy established by U.S.

GAAP. 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 quoted prices of similar assets in active markets; Level 3 inputs are significant unobservable inputs.

63 92

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

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

Investment Type
Exempt from
Disclosure
Level 1 Inputs
(not applicable)
Level 2 Inputs
(observable inputs)
Level 3 Inputs
(not applicable)
U.S. treasury notes 27,579,335$ -$ -$ 27,579,335$ -$ Local municipal bonds 617,665 - - 617,665 - Federal agency securities 147,549,390 - - 147,549,390 - Corporate medium term notes 42,808,677 - - 42,808,677 - Negotiable certificate of deposit 8,439,212 - - 8,439,212 - CAMP 86,247,426 - - 86,247,426 - Corporate bonds 4,989,650 - - 4,989,650 - Subtotal 318,231,355 - - 318,231,355 - Money market mutual funds 16,840,341 16,840,341 - - - State investment pool 8,116 8,116 - - - 335,079,812 16,848,457 - 318,231,355 - Held by bond trustee:

Money market mutual funds 3,658,384 3,658,384 - - - 3,658,384 3,658,384 - - - Total 338,738,196$ 20,506,841$ -$ 318,231,355$ -$ Fair Value Measurement

Disclosures Relating to Interest Rate Risk

Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combinati on 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 evenly over time as necessary to pr ovide the cash flow and liquidity needed for operations.

Information about the sensitivity of the fair values

of the City investments (including investments
held by bond trustee) to market interest rate fluc tuations is provided by the following table that shows the distribution of the City investments by maturity:

64 93

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

Investment Type
12 Months
Or Less
13 to 24
Months
25 to 60
Months
More than
60 Months
U.S. treasury notes 27,579,335 $ 14,772,900 $ 8,101,335 $ 4,705,100 $ - $ Local municipal bonds 617,665 278,272 - 339,393 - Federal agency securities 147,549,390 24,394,515 51,611,930 71,542,945 - Corporate medium term notes 42,808,677 11,097,895 3,465,648 28,245,134 - Negotiable certificate of deposit 8,439,212 4,374,370 2,367,473 1,697,369 - CAMP 86,247,426 86,247,426 - - - Corporate bonds 4,989,650 - - 4,989,650 - Money market mutual funds 16,840,341 16,840,341 - - - State investment pool 8,116 8,116 - - - 335,079,812 158,013,835 65,546,386 111,519,591 - Held by bond trustee:

Money market mutual funds 3,658,384 3,658,384 - - - 3,658,384 3,658,384 - - - Total 338,738,196$ 161,672,219$ 65,546,386$ 111,519,591$ -$ Remaining Maturity (in Months)

Disclosures Relating to Credit Risk

Generally, credit risk is the risk th

at 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. The followi ng presents the minimum rating required by (where applicable) the California Government Code, the Ci ty investment policy, or debt agreements, and the actual Standard and Poor’s rating as of year-end for each investment type.

65 94

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

Minimum
Legal Exempt from
Investment Type Rating Disclosure AAA AA A Not Rated
U.S. treasury notes 27,579,335 $ N/A - $ - $ -$ -$ 27,579,335$ Local municipal bonds 617,665 N/A - - - - 617,665 Federal agency securities 147,549,390 N/A - - 147,549,390 - - Corporate medium term notes 42,808,677 A - - 17,340,756 25,467,921 - Negotiable certificate of deposit 8,439,212 N/A - - - - 8,439,212 CAMP 86,247,426 N/A - - - - 86,247,426 Corporate bonds 4,989,650 N/A - - 4,989,650 - - Money market mutual funds 16,840,341 N/A - - - 16,840,341 - State investment pool 8,116 N/A - - - - 8,116 335,079,812 - - 169,879,796 42,308,262 122,891,754 Held by bond trustee
Money market mutual funds 3,658,384 A - 3,658,384 - - - 3,658,384 - 3,658,384 - - - TOTAL 338,738,196$ -$ 3,658,384$ 169,879,796$ 42,308,262$ 122,891,754$ Rating as of Year End

Concentration of Credit Risk

The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the Californi a Government Code. The one exception is the Policy limits the percentage allowed in any one i ssuer for Federal agencies to 30% per agency.

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 are as follows:

Investment Reported
Issuer Type Amount
Federal Farm Credit Bank Federal agency securities 61,939,190$ Federal Home Loan Bank Federal agency securities 57,196,895 Federal Home Loan Mortgage Corp Federal agency securities 25,426,745

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 recove r 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 failu re 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 investment policy do not contain legal or polic y requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits:
66 95

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

The California Government Code requires that a fi nancial institution secure deposits made by state or local governmental units by pledging securitie s in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law al so allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. As of June 30, 2024, $

15,923,958 of the City deposits
with financial institutions in
excess of federal depository insurance limits were secured by pledged securities in an undivided collateral pool held in the name of Bank of America under trust with Bank of New York Trust.

For investments identified herein as held by bond tr ustee, the bond trustee, at the direction of the City Treasurer, selects the investment under the term

s of the applicable trust agreement, acquires
the investment, and holds the investment on behalf of the reporting government.

Investment in State Investment Pool

The City is a voluntary participant in LAIF that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City investment in this pool is reported in the accompanying fina ncial 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 wit hdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. LAIF is not rated.

(3) Capital Assets

Infrastructure assets at June 30, 2024 (in thousands):

Description Cost
Accumulated
Depreciation Net Cost
Road system 345,219$ (206,072)$ 139,147$ Storm drain system 34,055 (11,630) 22,425 Sewer lines 78,053 (52,946) 25,107 Water system 151,479 (43,451) 108,028 608,806$ (314,099)$ 294,707$

67 96

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

Capital Asset activity for the year ended June 30, 2024 was as follows (in thousands):

Beginning
Balance Increases Decreases Transfers Ending Balance
Governmental Activities:

Capital assets not being depreciated:

Land 83,189 $ - $ - $ - $ 83,189$ Right-of-way 19,950 - - - 19,950 Construction in progress 21,064 8,167 (12,807) - 16,424 Total capital assets not being
depreciated 124,203 8,167 (12,807) - 119,563 Capital assets being depreciated:

Land improvements and buildings 146,073 2,667 - - 148,740 Machinery and equipment 78,020 7,126 (1,218) - 83,928 Infrastructure 369,378 13,210 - - 382,588 SBITA 5,353 5,482 (164) - 10,671 Total capital assets being depreciated 598,824 28,485 (1,382) - 625,927 Less accumulated depreciation and
amortization for:

Land improvements and buildings (70,469) (3,324) - - (73,793) Machinery and equipment (55,276) (4,908) 1,013 - (59,171) Infrastructure (210,386) (7,577) - - (217,963) SBITA (441) (1,273) 16 - (1,698) Total accumulated depreciation
and amortization (336,572) (17,082) 1,029 - (352,625) Total capital assets being
depreciated, net 262,252 11,403 (353) - 273,302 Governmental activities capital
assets, net 386,455$ 19,570$ (13,160)$ -$ 392,865$

68 97

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

Beginning
Balance Increases Decreases Transfers
Ending
Balance
Business-Type Activities:

Capital assets not being depreciated:

Land 8,833 $ - $ - $ - $ 8,833$ Construction in progress 19,461 9,686 (24,672) - 4,475 Capitalized construction interest 491 - - - 491 Total capital assets not being
depreciated 28,785 9,686 (24,672) - 13,799 Capital assets being depreciated:

Infrastructure 203,455 22,763 - - 226,218 Easement 1,743 - - - 1,743 Land improvements and buildings 22,607 454 - - 23,061 Machinery and equipment 78,784 2,383 (1,323) - 79,844 Furniture and fixtures 2,011 - - - 2,011 SBITA 747 221 - - 968 Total capital assets being depreciated 309,347 25,821 (1,323) - 333,845 Less accumulated depreciation and
amortization for:

Infrastructure (93,177) (2,959) - - (96,136) Easement (629) (58) - - (687) Land improvements and buildings (13,989) (296) - - (14,285) Machinery and equipment (60,551) (3,740) 1,304 - (62,987) Furniture and fixtures (2,011) - - - (2,011) SBITA (154) (187) - - (341) Total accumulated depreciation
and amortization (170,511) (7,240) 1,304 - (176,447) Total capital assets being
depreciated, net 138,836 18,581 (19) - 157,398 Business-type activities capital
assets, net 167,621 $ 28,267 $ (24,691) $ - $ 171,197$

The capital assets for the Fleet Services Fund and

the Self-Insurance Fund, internal service funds,
have been consolidated into the governmental ac

tivities, and are included in the machinery and
equipment and SBITA category: asset additions amounted to $3,804,043 and asset deductions amounted to $1,015,541.

69 98

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

Depreciation and amortization expense was char ged to functions/programs of the primary government as follows (in thousands):

Governmental Activities:

General government 5,012 $
Public safety 2,183
Public works 8,827
Community development 119
Culture and recreation 941
Total depreciation and amortization expense -
governmental activities 17,082$
Business-type activities:

Water 2,205 $
Sewer 1,182
Sanitation 874
Municipal Airport 260
Transit System 2,719
Total depreciation and amortization expense -
business-type activities 7,240$
Included in the depreciation charge to general government is the amount of depreciation for the Fleet Services Fund, an internal service funds . This amount includes depreciation expense of $1,575,065, and retirements of $1,016,979. The result is a net addition to accumulated depreciation in the amount of $558,086.
(4) Notes Receivable

Rehabilitation Housing
This represents a number of small loans given to elig

ible participants in the City’s Federal Housing
Rehabilitation program. These loans, usually less than $10,000, are no-interest bearing loans that will be repaid when the property is sold. The balance of these loans as of June 30, 2024 is $32,900. (5) Lease Receivables
The City leases land and commercial spaces to multiple entities with agreements ranging from 7 to 88 years with interest rates between 2.24% and 2.53%. The City recognized $9,643,653 of lease revenue during the fiscal year ended June 30, 2024, and reported $171, 244,863 and $156,992,858 of lease receivables and deferred inflows of resources, respectively, as of June 30, 2024.

The City’s lease receivable is measured at the present value of lease payments expected to be received during the lease term. Under the lease agreement, the City may receive variable lease payments that are calculated as a percentage of the lessee’s revenues. During the year ended June 70 99

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

30, 2024, the City received variable payments to taling $2,521,470, which are recorded as revenue in the period the payment is received.

A deferred inflow of resources is recorded at the

initiation of the lease in an amount equal to the
initial recording of the lease receivable. The deferre d inflow of resources is amortized on a straight- line basis over the term of the lease.

The future lease receipts are as follows (in thousands):

Principal Interest Total
Year ending June 30:
2025 6,037$ 4,121$ 10,158$ 2026 4,730 4,033 8,763 2027 4,964 3,956 8,920 2028 5,168 3,879 9,047 2029 5,195 3,784 8,979 2030 to 2034 23,272 17,167 40,439 2035 to 2039 16,864 14,671 31,535 2040 to 2044 18,995 12,105 31,100 2045 to 2049 18,854 9,764 28,618 2050 to 2054 17,341 7,286 24,627 2055 to 2059 10,405 5,679 16,084 2060 to 2064 13,138 4,197 17,335 2065 to 2069 16,907 2,305 19,212 2070 to 2072 9,375 357 9,732 171,245$ 93,304$ 264,549$

(6) Subscription-Based Information

Technology Arrangements (SBITA)
A SBITA is defined as a contractual agreement that conveys control of the right to use another party’s (a SBITA vendor’s) information technology (IT) software, alone or in combination with tangible capital assets (the underlying IT assets)

, as specified in the contract for a minimum
contractual period of greater than one year, in an exchange or exchange-like transaction.

The City uses various SBITA assets that it contr acts through cloud computing arrangements, such as software as a service and platform as a service. The related obligations are presented in the amounts equal to the present value of subscripti on payments, payable during the remaining SBITA term. A SBITA asset is presented in the Capital Assets section, on the government-wide Statement of Net Position and presented in the Capital Assets Note 3. 71 100

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

The City has a variety of variable payment cl

auses, within its SBITA arrangements, including
variable payments based on future performance and usage of the underlying asset. Components of variable payments that are fixed in substance, are included in the measurement of the SBITA liability presented in the table below. The City did not incur expenses related to its SBITA activities such as termination penalties, not previously included in the measurement of the SBITA liability, or losses due to impairment.

As of June 30, 2024, the City had minimum prin cipal and interest payment requirements for its SBITA activities, with a remaining term in excess of one year, as follows:

Principal Interest Total
Year ending June 30:
2025 972$ 174$ 1,146$ 2026 950 155 1,105 2027 818 137 955 2028 712 121 833 2029 738 107 845 2030 to 2034 3,392 321 3,713 2034 to 2036 1,383 54 1,437 8,965$ 1,069$ 10,034$
Principal Interest Total
Year ending June 30:
2025 175$ 12$ 187$ 2026 185 9 194 2027 196 5 201 2028 38 1 39 2029 38 1 39 632$ 28$ 660$
Governmental Activities
Business-Type Activities

(7) Long-term Debt
a) Certificates of Participation
2016 Refunding Certificates of Participation
In 2016, the City, with the Public Property Financing Corporation of California, issued $22,135,000 of refunding certificates of participation to refinance the 2009 certificates of 72 101

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

participation issued by the Torrance Public Fina ncing Authority to finance the acquisition of approximately 15 acres of real property for a regional transit center and other City uses. Debt proceeds and the 2009 certificates of participati on reserves of $1,251,320 were deposited in an irrevocable trust with an escrow agent to redeem the 2009 certificates of participation on November 15, 2016. As a result, the 2009 certificat es of participation are considered defeased, and the related liability has been removed from the books . The undiscounted cash flows required to service the 2016 Refunding Certificates of Participation that were issued during the year ended June 30, 2016 will be $10,134,685 more than the cash flows that would have been required to service the defeased 2009 Certificates. The 2016 Refunding Certificates of Participation extend the debt service period by 7 years through fiscal year 2046/47. The economic gain (difference between the present

values of the old and the new debt service
payments) resulting from this transaction was $1,565,891. A portion ($6,105,790) of the 2016 Refunding Certificates of Participation was set aside for the construction of capital improvements related to an emergency operations center a nd any other public capital improvements selected by the C

ity. The refunding certificates of participation debt is considered to be capital related.

There is no reserve requirement for the 2016 Refunding Certificates of Participation. Pledged rental payments equaled debt service payment during fiscal year ended June 30, 2024.

The principal matures November 1 each year

through 2046 at variable amounts ranging from
$395,000 to $1,235,000. Interest is payable on November 1 and May 1 with interest rates ranging from 2.00% to 5.00% and $19,070,000 remains outstanding as of June 30, 2024.

Annual debt service requirements are as follows (in thousands):

Annual Debt Service Requirement
Principal Interest Total
Year ending June 30:
2025 510$ 748$ 1,258$ 2026 530 727 1,257 2027 550 705 1,255 2028 580 680 1,260 2029 610 650 1,260 2030 to 2034 3,505 2,780 6,285 2035 to 2039 4,170 2,117 6,287 2040 to 2044 5,055 1,233 6,288 2045 to 2047 3,560 219 3,779 19,070$ 9,859$ 28,929$

73 102

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

b) Lease Revenue Bonds
2020 Lease Revenue Bonds
In 2020, the City, with the Torrance Joint Powe rs Financing Authority, issued $349,515,000 of lease revenue bonds to refinance a portion of the Unfunded Accrued Liability (UAL) of the City’s Miscellaneous, Safety Fire and Safety Police pension plans with CalPERS. The refinancing was estimated to generate overa ll savings through FY 2044 of about $172.2 million.

There is no reserve requirement for the 2021

Lease Revenue Bonds. Pledged rental payments
equaled debt service payment during fiscal year ended June 30, 2024.

The principal matures October 1 each year through 2043 at variab le amounts ranging from $2,015,000 to $26,590,000. Interest is payabl e on October 1 and April 1 with interest rates ranging from 1.239% to 3.803% and $332,070,000 remains outstanding as of June 30, 2024.

Annual debt service requirements are as follows (in thousands):

Annual Debt Service Requirement
Principal Interest Total
Year ending June 30:
2025 8,650 $ 10,691 $ 19,341 $ 2026 9,325 10,538 19,863 2027 10,050 10,348 20,398 2028 10,830 10,120 20,950 2029 11,655 9,858 21,513 2030 to 2034 72,600 44,001 116,601 2035 to 2039 103,190 30,023 133,213 2040 to 2044 105,770 8,978 114,748 332,070$ 134,557$ 466,627$

2021 Lease Revenue Bonds
In 2021, the City, with the Torrance Joint Powers Financing Authority, issued $39,725,000 of lease revenue bonds to refinance the 2014 certific ates of participation issued by the Torrance Public Financing Authority to construct certain maintenance and entert

ainment facilities within
the City. Debt proceeds and the 2014 certificates of participation reserves of $2,611,940 were deposited in an irrevocable trust with an escr ow agent to redeem the 2014 certificates of participation on April 15, 2021. As a result, the 2014 certificates of participation are considered defeased, and the related liability has been removed from the books. The economic gain (difference between the present values of the old and the new debt service payments) 74 103

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

resulting from this transaction was approxima tely $3.8 million. Proceeds from the 2014 Refunding Certificates of Participation was set aside for the construction of street improvements, storm drain improvements, and pur chases of equipment. The lease revenue bonds are considered to be capital related.

There is no reserve requirement for the 2021 Le

ase Revenue Bonds. Pledged rental payments
equaled debt service payment during fiscal year ended June 30, 2024.

The principal matures June 1 each year through 2044 at variable amounts ranging from $1,445,000 to $2,415,000. Interest is payable on December 1 and June 1 with interest rates ranging from 0.408% to 3.379% and $36,830,000 remains outstanding as of June 30, 2024.

Annual debt service requirements are as follows (in thousands):

Annual Debt Service Requirement
Principal Interest Total
Year ending June 30:
2025 1,465 $ 1,043 $ 2,508 $ 2026 1,480 1,026 2,506 2027 1,495 1,006 2,501 2028 1,520 981 2,501 2029 1,555 952 2,507 2030 to 2034 8,340 4,187 12,527 2035 to 2039 9,645 2,884 12,529 2040 to 2044 11,330 1,174 12,504 36,830$ 13,253 $ 50,083 $

c) Water Fund Easement
In August 2012, the City entered into a thirty year easement agreement with the Torrance Unified School District for access to a land-lock ed, City-owned parcel to be developed as a water well, treatment and storage facility. The net book value of the easement asset as of June 30, 2024 is $1,055,774. The related debt is considered to be capital debt.

75 104

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

The future easement obligations at June 30, 2024 are as follows (in thousands):

Water Enterprise
Fund

Year ending June 30:
2025 $ 58
2026 58
2027 58
2028 58
2029 58
2030 to 2034 291
2035 to 2039 291
2040 to 2042 174
$ 1,046

d) Water Fund Installment Sale Agreement
In 2017, the City entered into an installment sale agreement with the Public Property Financing Corporation of California (the “Corporation”), for the purpose of financing the drilling and construction of a new water well, the North Torra nce Well Field Project (the “Project”). The Corporation or its assignee provided $5,749,428 for construction of the Project. The installment sale agreement debt is considered to be capital related.

The principal matures May 1 and November 1 each year from 2018 through 2028 at variable amounts ranging from $195,000 to $317,071. Interest

is payable on May 1 and November 1 at a
rate of 2.36% and $2,265,830

remains outstanding as of June 30, 2024.

Annual debt service requirements are as follows (in thousands):

Water Fund Annual Debt Service Requirement
Principal Interest Total
Year ending June 30:
2025 595 $ 50 $ 645 $
2026 609 36 645
2027 623 21 644
2028 439 7 446
2,266$ 114 $ 2,380 $

76 105

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

(8) Changes in Long-Term Obligations
The following is a summary of changes in the City’s long-term obligations for the year ended June 30, 2024 (in thousands):

Govermental Activities:

Balance
June 30,
2023
Incurred or
Issued
Satisfied or
Matured
Balance
June 30,
2024
Amounts due
within
One Year
Amounts Due
in more than
One Year
Other Long-term Liabilities
Compensated absences payable 22,803 $ 5,578 4,342 24,039$ 6,250 17,789 Notes payable 1,139 - 219 920 223 697 SBITA liability (note 6) 4,904 4,878 817 8,965 972 7,993 Claims & judgments (note 15) 68,816 19,005 20,341 67,480 12,333 55,147 Other Debt
Certificates of Participation:
2016 refunding certificates 19,560 - 490 19,070 510 18,560 2016 premium 1,352 - 57 1,295 - 1,295 Lease Revenue Bonds:
2020 lease revenue bonds 340,085 - 8,015 332,070 8,650 323,420 2021 lease revenue bonds 38,280 - 1,450 36,830 1,465 35,365 Total Governmental
Activities $496,939 29,461 35,731 490,669$ 30,403 460,266 Business-T ype Activities:

Other Long-term Liabilities
Compensated absences payable 2,262$ 453 424 2,291$ 596 1,695 SBITA liability (note 6) 575 473 416 632 175 457 Direct Borrowings
Easement payable - Water Fund 1,104 - 58 1,046 58 988 Installment Sale Agreement - Water Fund 2,847 - 581 2,266 595 1,671 Total Business-Type Activities 6,788$ 926 1,479 6,235$ 1,424 4,811

Compensated Absences
The City’s policy regarding compensated absences is described in Note 1. The funded portion of this debt, is recorded in the Internal Service funds and business-type Enterprise funds totaling $9,783,476 and $2,290,843 respectively. The unfunded portion, amounting to $14,255,607 is recorded in the governmental activities and is expect ed to be paid from future resources. In prior years, compensated absences have been liquidated primarily by the General Fund.

Notes Payable
The City entered into a 7-year municipal lease- to-own financing with Republic First National to purchase eight ambulances from Southwest Ambulance Sales LLC in the amount of $1,560,528, with a total interest cost of $138,391 at an annual rate of 2.17%. The annual payment is payable on 77 106

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

March 15, and at the end of the term, the City

will own the ambulances. As of June 30, 2024,
$920,336 of principal remains outstanding.

Claims and Judgments
The long-term liability for self-insurance claims an d judgments is recorded in the Self-Insurance Fund of the Internal Service funds and the liability is liquidated in that fund. Since the Internal Service funds primarily serve the governmental funds, the long-term liability for claims and judgments has been included in the governmental activities in the Government-wide Statement of Net Position. As of June 30, 2024, claims and judgments payable was $67,479,754 (see Note 15). (9) Pension Plan
The following is a summary of pension related items for the year ended June 30, 2024:

Pension
Liability
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Pension
Expense /
(Income)
CalPERS Miscellaneous $ 76,841,231 $ 46,161,306 $ (2,347,675) $ 21,044,051 CalPERS Safety – Police 97,771,105 48,101,862 (402,430) 29,234,882 CalPERS Safety – Fire 57, 791,747 30,747,756 (19,244) 14,713,106 PARS (see Note 10) 18,052,760 2,270,140 - 2,054,905 Total $ 250,456,843 $ 127,281,064 $ (2,769,349) $ 67,046,944

Plan Descriptions
All qualified permanent and probationary employees are eligible to participate in the Local Government’s separate Safety (police and fire) an

d Miscellaneous (all other) plans, agent multiple-
employer defined benefit pension plans admini stered by the California Public Employees’ Retirement System (CalPERS), which acts as a co

mmon investment and administrative agent for its
participating member employers. Benefit provisions under the Plans are established by State statute and Local Government resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding be nefit provisions, assumptions and membership information that can be found on the CalPERS’ website under Forms and Publications.

Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 to 62 with statutorily reduced benefits. PEPRA miscellaneous members become elig

ible for service retirement upon a
ttainment of age 52 with at
least 5 years of service. All members are eligible for non-duty disability benefits after 5 years of service. The death benefit is one of the follo wing: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. Safety members can receive a special death 78 107

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

benefit if the member dies while actively employed and the death is job-related. Fire members may receive the alternate death benefit in lieu of the Basic Death Benefit or the 1957 Survivor Benefit if the member dies while actively employed and has at least 20 years of total CalPERS service. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law. The City typically uses the Ge neral Fund and the enterprise funds to liquidate pension and other post-retirement obligations. The Pl

ans’ provisions and benefits in effect at June
30, 2024, are summarized as follows:

Miscellaneous
Hire date
Prior to
January 1, 2013
On or after January
1, 2013
Benefit formula 2% @ 55 2% @ 62
Benefit vesting schedule 5 years of service 5 years of service Benefit payments monthly for life monthly for life
Retirement age 50-55 52-62
Monthly benefits, as a % of eligible compensation 2.0% 2.0% Required employee contribution rates 6.856% 6.000%
Required employer contribution:

Normal cost rate 9.25% 12.479%
Payment of unfunded liability $ 6,118,786 $ -

Safety - Police
Hire date
Prior to
January 1, 2013
On or after January
1, 2013
Benefit formula 3% @ 50 2.7% @ 57
Benefit vesting schedule 5 years of service 5 years of service Benefit payments monthly for life monthly for life
Retirement age 50 50-57
Monthly benefits, as a % of eligible compensation 3.0% 2.7% Required employee contribution rates 9.135% 11.25 % or 13.00% Required employer contribution:

Normal cost rate 26.76% 26.221% or 22.529%
Payment of unfunded liability $ 5,129,929 $ -

79 108

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

Safety – Fire
Hire date
Prior to
January 1, 2013
On or after January
1, 2013
Benefit formula 3% @ 50 2.7% @ 57
Benefit vesting schedule 5 years of service 5 years of service Benefit payments monthly for life monthly for life
Retirement age 50 50-57
Monthly benefits, as a % of eligible compensation 3.0% 2.7% Required employee contribution rates 9.049% 10.25% or 11.00% Required employer contribution:

Normal cost rate 20.07% 20.822% or 22.549%
Payment of unfunded liability $ 3,350,660 $ -

Employees Covered
At June 30, 2023 measurement date, the following employees were covered by the benefit terms for each Plan:

Miscellaneous Safety - Police Safety - Fire
Inactive employees or beneficiaries
currently receiving benefits 1,262 409 226
Inactive employees entitled to but
not yet receiving benefits 1,420 127 48
Active employees 924 175 135
Total 3,606 711 409

Contribution Description
Section 20814(c) of the California Public Empl oyees’ Retirement Law (PERL) requires that the employer contribution rates for all public empl oyers be determined on an annual basis by the actuary and shall be effective on the July 1 followi ng notice of a change in the rate. The total plan contributions are determined through the CalP ERS annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability.

The employer is required to contribute the differenc e between the actuarially determined rate and the contribution rate of employees. City contri bution rates may change if plan contracts are amended. Payments made by the employer to satis fy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions. For the measurement period ending June 30, 2023 (the measurement date), the average active employee contribution rate is 7.39 percent for Miscellaneous, 9.94 percent for Safety – Police and 9.74 percent for Safety – Fire, of an nual pay, and the employer’s contribution rate is

10.40 percent for Miscellaneous, 28.07 percent for Safety – Police and 22.02 percent for Safety – Fire, of annual payroll. Employer contribution rates may change if plan contracts are amended. It is the responsibility of the employer to make necessa ry accounting adjustments to reflect the impact 80 109

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

due to any Employer Paid Member Contributions or situations where members are paying a portion of the employer contribution.

Actuarial Methods and Assumptions Used to Determine Total Pension Liability The June 30, 2022 valuation was rolled forward to determine the June 30, 2023 total pension liability based on the following actuarial methods and assumptions:

Actuarial Cost Method Entry age normal in accordance with the requirements of GASB Statement No. 68
Actuarial Assumptions:

Discount Rate 6.90%
Inflation 2.5%
Salary Increases Varies by entry age and service
Investment Rate of Return 7.00% net of pension plan investment and administrative expenses; includes inflation
Retirement Age Based on 2021 CalPERS’ Experience Study for the period 2001 - 2019
Mortality Rate Table Based on 2021 CalPERS’ Experience Study for the period 2001 - 2019

Discount Rate
The discount rate used to measure the total pe nsion liability was 6.90%. The projection of cash flows used to determine the discount rate assume

d that contributions from plan members will be
made at the current member contribution rates a

nd 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 ex pected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

Subsequent Events
Since the valuation date, price inflation has been higher than the assumed rate of 2.3% per annum.

Since inflation influences cost of living adju stments for retirees and beneficiaries and active member pay increases, higher inflation is likely to put at least some upward pressure on the pension expense and the total pension liab ility in future valuations. The actual impact of higher inflation on future valuation results will depend on, among other factors, how long higher inflation persists. At this time, the long-term price inflation assumption of 2.3% per annum remains appropriate.

Long-term Expected Rate of Return

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

81 110

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calcu lated over the next 10 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:

Asset Class 1 New Strategic
Allocation
Real Return1,2
Public Equities – Cap Weighted 30.00% 9.3%
Public Equities – Factor Weighted 12.00 n/a
Treasury 5.00 1.2
Mortgage-backed Securities 5.00 2.0
Investment Grade Corporates 10.00 3.7
High Yield 5.00 n/a
Emerging Market Debt 5.00 n/a
Private Debt 5.00 n/a
Private Equity 13.00 11.8
Real Assets 15.00 7.7
Leverage (5.00) n/a
Total 100.00%
1 An expected inflation of 2.5% used for this period
2 Figures are based on the 2021 Asset Liability Management study 82 111

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

Changes in Total Pension Liability
The following table shows the changes in total pension liability recognized over the measurement period.

Miscellaneous
Increase (Decrease)
Total Pension Plan Fiduciary Total Pension
Liability Net Position Liability
(a) (b) (c) = (a) - (b)
Balance at: 6/30/2022 $ 735,664,670 $ 662,753,411 $ 72,911,259 Changes Recognized for the
Measurement Period:

Service Cost 10,772,264 - 10,772,264
Interest on the Total Pension Liability 49,672,891 - 49,672,891 Changes of Benefit Terms - - -
Differences between Expected and
Actual Experience
0 (555,304)

-
0 (555,304)
Changes of Assumptions - - -
Net Plan to Plan Resource Movement - - -
Contributions from the Empl oyer - 11,657,493 (11,657,493) Contributions from Employees - 4,393,192 (4,393,192)
Net Investment Income - 40,396,552 (40,396,192) Administrative Expense - (487,358) 487,358
Benefit Payments, including Refunds of
Employee Contributions

(41,197,053)

(41,197,053)
000000
-
Other Miscellaneous Income/(Expense) - - -
Net Changes during 2022-23 18,692,798 14,762,826 3,929,972 Balance at: 6/30/2023 $ 754,357,468 $ 677,516,237 $ 76,841,231

83 112

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

Safety - Police
Increase (Decrease)
Total Pension Plan Fiduciary Total Pension
Liability Net Position Liability
(a) (b) (c) = (a) - (b)
Balance at: 6/30/2022 $ 668,922,276 $ 582,620,327 $ 86,301,949 Changes Recognized for the
Measurement Period:

Service Cost 10,449,013 - 10,449,013
Interest on the Total Pension Liability 45,576,331 - 45,576,331 Changes of Benefit Terms - - -
Differences between Expected and
Actual Experience
0000000

5,654,688

-
0000000000

5,654,688
Changes of Assumptions - - -
Net Plan to Plan Resource Movement - - -
Contributions from the Empl oyer - 12,349,064 (12,349,064) Contributions from Employees - 2,831,357 (2,831,357) Net Investment Income - 35,458,887 (35,458,887)
Administrative Expense - (428,432) 428,432
Benefit Payments, including Refunds of
Employee Contributions

(38,549,863)

(38,549,863)
00000 0
-
Other Miscellaneous Income/(Expense) - - -
Net Changes during 2022-23 23,130,169 11,661,013 11,469,156 Balance at: 6/30/2023 $ 692,052,445 $ 594,281,340 $ 97,771,105

84 113

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

Safety - Fire
Increase (Decrease)
Total Pension Plan Fiduciary Total Pension
Liability Net Position Liability
(a) (b) (c) = (a) - (b)
Balance at: 6/30/2022 $ 418,086,191 $ 366,132,478 $ 51,953,713 Changes Recognized for the
Measurement Period:

Service Cost 5,798,843 - 5,798,843
Interest on the Total Pension Liability 28,354,338 - 28,354,338 Changes of Benefit Terms - - -
Differences between Expected and
Actual Experience
00000000
2,642,770

-
0000000000
2,642,770
Changes of Assumptions - - -
Net Plan to Plan Resource Movement - - -
Contributions from the Empl oyer - 7,224,125 (7,224,125) Contributions from Employees - 1,914,964 (1,914,964)
Net Investment Income - 22,088,065 (22,088,065)
Administrative Expense - (269,237) 269,237
Benefit Payments, including Refunds of
Employee Contributions

(25,391,886)

(25,391,886)

-
Other Miscellaneous Income/(Expense) - - -
Net Changes during 2022-23 11,404,065 5,566,031 5,838,034 Balance at: 6/30/2023 $ 429,490,256 $ 371,698,509 $ 57,791,747

Sensitivity of the Total Pension Liability to Changes in the Discount Rate The following presents the total pension liability of the Plan as of the Measurement Date, calculated using the discount rate of 6.90%, as well as what the total pension liability would be if it were calculated using a discount rate that is 1 percen tage-point lower (5.90%) or 1 percentage-point higher (7.90%) than the current rate:

Discount Rate – 1%
(5.90%)
Current Discount Rate
(6.90%)
Discount Rate + 1%
(7.90%)
Plan’s Total Pension Liability –
Miscellaneous $ 172,273,070 $

76,841,231 $ (2,232,734)
Plan’s Total Pension Liability –
Safety-Police $ 188,908,360 $ 97,771,105 $ 22,954,388 Plan’s Total Pension Liability –
Safety-Fire $ 110,450,365 $ 57,791,747 $ 14,088,325

85 114

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

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

For the measurement period ended June 30, 2023, the City recognized a pension expense of $21,044,051 for the Miscellaneous Plan, $29,234,882 for the Safety-Police Plan and $14,713,106 for the Safety-Fire Plan.

As of June 30, 2024, the City has deferred outflows and deferred inflows of resources related to the Plans as follows:

Miscellaneous Deferred Outflows of
Resources
Deferred Inflows of
Resources
Pension Contributions Subsequent to Measurement Date $ 7,411,431 $ - Differences between Expected and Actual Experience - (2,347,675) Changes of Assumptions 6,830,518 -
Net Difference between Projected and Actual Earnings on Pension Plan Investments
0 31,919,357

000000000

-
Total $ 46,161,306 $ (2,347,675)

Safety - Police De ferred Outflows of
Resources
Deferred Inflows of
Resources
Pension Contributions Subsequent to Measurement Date $ 8,143,861 $ - Differences between Expected and Actual Experience 3,822,534 (402,430) Changes of Assumptions 7,597,361 -
Net Difference between Projected and Actual Earnings on Pension Plan Investments
0 28,538,106
00000000
-
Total $ 48,101,862 $ (402,430)

Safety - Fire Deferred Outflows of
Resources
Deferred Inflows of
Resources
Pension Contributions Subsequent to Measurement Date $ 4,956,696 $ - Differences between Expected and Actual Experience 2,638,889 (19,244) Changes of Assumptions 5,101,556 -
Net Difference between Projected and Actual Earnings on Pension Plan Investments
0 18,050,615
00000000
0 -
Total $ 30,747,756 $ (19,244)

86 115

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

Deferred outflows of resources related to cont ributions subsequent to the measurement date reported above for Miscellaneous, Safety-Police an d Safety-Fire in the amounts of $7,411,431, $8,143,861 and $4,956,696, respectively, will be recognized as a reduction of the total pension liability in the year ending June 30, 2025. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Deferred
Outflows/(Inflows) of
Resources
Deferred
Outflows/(Inflows) of
Resources
Deferred
Outflows/(Inflows) of
Resources
Measurement Period
Ending June 30
Miscellaneous Safety - Police Safety - Fire
2025 $ 9,838,568 $ 14,120,096 $ 6,599,591 2026 3,717,279 5,329,009 5,179,848
2027 21,960,933 19,323,281 13,346,696
2028 885,420 783,185 654,681
2029 - - -
Thereafter - - -

(10) PARS Enhanced Retirement Defined Benefit Pension Plan Pursuant to a Plan Document dated January 25, 2004, the City provides an enhanced retirement benefit to members of the Torrance Professional and Supervisory Association (TPSA), the Engineer Bargaining Unit, the Fiscal Bargaining Unit, and certain Information Technology Specialists who migrated to the TPSA on October 19, 2004. Th is benefit takes the form of a single employer defined benefit pension plan. The authority to es tablish and amend the funding policy is the City Council. Currently it is the City’s policy to a nnually fund an amount budgeted to approximate the required annual contribution for that fiscal year.

Benefits are available to members hired on or be fore January 25, 2004 that retire from the City at an age of 55 or greater and with five or more years of City service. Benefits are also available to members hired between January 25, 2004 and December 31, 2012 that retire from the City at an age of 55 or greater and with five or more years of C ity service specific to the eligible bargaining unit, as identified previously. New hires after December 31, 2012 are not eligible for this benefit.

Generally, the enhanced benefit is expressed as .46951% times years of CalPERS eligible service times the member’s highest annual compensation wh ile a bargaining group member. This plan is administered for the City through a third party ad

ministrator, Public Agency Retirement Services
(PARS). Copies of PARS’ annual financial re port may be obtained from its executive office at 4350 Von Karman Avenue, Suite 100, Newport Beach, California 92660.

87 116

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

Employees covered – At June 30, 2023 (measurement date), the following employees were covered by the benefit term for the Plan:

Retirees 162
Vested terminations 35
Suspended 17
Active employees 52
Total 266

Contribution Description
The City’s funding policy is to make the contri bution as determined by the Plan’s actuary. The Plan’s annual pension cost for the fiscal year ended June 30, 2024, is based on an actuarial valuation as of June 30, 2022. For the fiscal ye

ar ended June 30, 2024, th
e City’s annual pension
cost is $2,054,905. The City contributed $1,372,000 to the plan.

Measurement Date: June 30, 2023
Actuarial Valuation Date: June 30, 2023
Asset Valuation Method: Investment ga ins and losses over 5 year period, not less than 80% nor more than 120% of market value
Discount rate: 5.25%
Mortality: CalPERS’ 2021 Experience Study
General Inflation: 2.5%
Cost of Living Adjustment: 2%
Termination: CalPERS’ 2021 Experience Study
Salary Increases: Varies by entry age and service
Retirement Age: CalPERS’ 2021 Experience Study

Actuarial Methods
The actuarial cost method used for this valuation is the Entry Age Normal (EAN) method. The Present Value of Projected Benefits (PVPB) is the present value of all future benefits for current plan participants. The Actuarial Accrued Liab ility (AAL) represents the portion of the PVPB attributable to past service. The AAL is recogni zed over service through the date a participant is expected to commence benefits.

Plan funded status based on the excess of
1) Plan Assets over
2) Actuarial Accrued Liability

Actuarial valuation of assets are not less than 80% nor more than 120% of market value. This is due to investment gains/losses being spread over a 5 year rolling period.

88 117

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

Discount Rate

The discount rate used to measure the total pe nsion liability was 5.25 percent. To determine whether the municipal bond rate shou ld be used in the calculation of a discount rate for each plan, the actuary stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing, none of the tested plans ran out of assets. Therefore, the current 5.25 percent discount rate is adequate and the use of the municipal bond rate calculation is not necessary.

Change in Total Pension Liability

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

Increase (Decrease)
Total Pension Plan Fiduciary Total Pension
Liability Net Position Liability
(a) (b) (c) = (a) - (b)
Balance at: 6/30/2022 $ 35,935,539 $ 17,732,689 $ 18,202,850 Changes Recognized for the
Measurement Period:

Service Cost 404,155 - 404,155
Interest on the total pension liability 1,865,183 - 1,865,183 Differences between actual and
expected experience 335,110 - 335,110
Change of assumptions - - -
Contributions from the employer - 1,362,000 (1,362,000) Investment income - 1,446,500 (1,446,500)
Administrative expense - (53,962) 53,962
Benefit payments, including refunds (1,645,856) (1,645,856) - Net Changes 958,592 1,108,682 (150,090) Balance at: 6/30/2023 $ 36,894,131 $ 18,841,371 $ 18,052,760

Sensitivity of the Total Pension Liability to Changes in the Discount Rate The following presents the total pension liability of the Plan as of the Measurement Date, calculated using the discount rate of 5.25%, as well as what the total pension liability would be if it were calculated using a discount rate that is 1 percen tage-point lower (4.25%) or 1 percentage-point higher (6.25%) than the current rate:

1% Decrease
(4.25%)
Discount Rate
(5.25%)
1% Increase
(6.25%)
Total Pension Liability $ 22,693,609 $ 18,052,760 $ 14,186,932

89 118

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

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

For the measurement period ended June 30, 2023 (t he measurement date), the City recognized a pension expense of $2,054,905 for the Plan.

As of June 30, 2024, the City has deferred outflows and deferred inflows of resources related to the Plan as follows:

Deferred Outflows
of Resources
Deferred Inflows
of Resources
Differences between expected and actual experience $ 107,144- $ - Changes of assumptions - - Net difference between projected and actual earnings on plan investments
000000000000
790,996
0000
-
Employer contributions made subsequent to the measurement date 1,372,000 - Total $ 2,270,140 $ -

As of June 30, 2024, deferred outflows of resources related to employer contributions subsequent to the measurement date in the amount of $1,372,000 will be recognized as a reduction of the total pension liability in the y ear ending June 30, 2025. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Measurement Period Ending
June 30:

Deferred Outflows/(Inflows)
of Resources
2025 $ 273,843
2026 86,476
2027 639,624
2028 (101,803)
2029 -
Thereafter -

(11) Other Postemployment Benefit Plan
Plan Description

The City has established the City of Torrance Re tiree Healthcare Plan (the “Plan”), an agent multiple-employer defined benefit postemployment healthcare plan. The Plan provides post- retirement medical benefits to eligible retirees and their dependents through the California Public Employees Medical and Hospital Care Act (PEMHCA) and managed through the California Retiree Benefit Trust (CERBT). All employees are vested after five years of employment and must reach the age of 50 and qualify for CalPERS retirement in order to receive these benefits. Benefits are 90 119

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

payable for the life of the retiree and survivor cove rage continues after the death of the retiree. A separate financial report is not prepared for the Plan.

Employees Covered

As of the June 30, 2023 valuation date, the followi ng current and former employees were covered by the benefit terms under the Plan:

Inactive employees or beneficiaries currently receiving benefits 842 Inactive employees entitled to but not yet receiving benefits 505 Active employees 1,196
Total 2,543

Contributions
The Plan and its contribution requirements are established by Memoranda of Understanding with the applicable employee bargaining units and may be amended by agreement between the City and the bargaining units. The annual contribution is based on the actuarially determined contribution (ADC). In the measurement date June 30, 2023 , the City’s cash contributions were $5,644,000 in payments to the Trust.

Total Other Postemployment Benefit (OPEB) Liability

The City’s total OPEB liability was measured as of June 30, 2023 and the total OPEB liability used to calculate the total OPEB liability was determined by an actuarial valuation dated June 30, 2022.

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

Measurement Date June 30, 2023
Measurement Period July 1, 2022 to June 30, 2023
Actuarial Cost Method Entry age nor mal, level percentage of payroll Actuarial Assumptions:

Discount Rate 6.25%
Inflation 2.5%
Salary Increases Aggregate – 2.75%, Merit - CalPERS 2021 assumptions
Investment Rate of Return 6.25%
Medical Trend Non-Medicare – 7.6%, Medicare – 5.9%
Mortality, Retirement, Disability,
Termination

CalPERS 2021 Experience Study

91 120

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

The target allocation shown below was adopted by CERBT effective March 2022.

Asset Class
Strategic Target
Allocation
Long-Term Expected
Real Rate of Return
Global Equity 49% 4.56%
Fixed Income 23 1.56
TIPS 5 (0.08)
Commodities 3 1.22
REITs 20 4.06
Total 100%

Discount Rate
The discount rate used to measure the total OPEB liability was 6.25%. The projection of cash flows used to determine the discount rate assumed that the City’s contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected OPEB payments for current active and inactive employees and dependents. Therefore, the long-term expected rate of return on Plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability.

92 121

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

Changes in Total OPEB Liability
The following table shows the changes in tota l OPEB liability recognized over the measurement period.

Increase (Decrease)
Total OPEB Plan Fiduciary Total OPEB
Liability Net Position Liability
(a) (b) (c) = (a) - (b)
Balance at: 6/30/2022 $ 80,137,762 $ 34,480,727 $ 45,657,035 Changes Recognized for the
Measurement Period:

Service Cost 2,105,585 - 2,105,585
Interest on the Total OPEB Liability 5,011,817 - 5,011,817 Changes of Benefit Terms - - -
Differences between Expected and
Actual Experience 5,732,980 - 5,732,980
Changes of Assumptions 11,852,107 - 11,852,107
Contributions from the Empl oyer - 5,644,000 (5,644,000) Contributions from Employees - - -
Net Investment Income - 3,067,253 3,067,253
Administrative Expense - (32,415) 32,415
Benefit Payments (4,171,763) (4,171,763) - Net Changes during 2022-23 20,530,726 4,507,075 16,023,651 Balance at: 6/30/2023 $ 100,668,488 $ 38,987,802 $ 61,680,686

Change of Assumptions
The claims cost was updated to reflect current pr emiums and plan selection, while morbidity and the population for curving were updated to reflect

the most recent CalPERS experience study.

Initial health trend rates were updated to reflect the most recent industry survey of current year expectations grading down to ultimate rates based on Bureau of Labor and Statistics 75-year averages.

Change of Benefit Terms

The City’s contribution to Police Yearly Stipend in creased from 2.0% to 2.5% of payroll effective July 1, 2024. The impact on the Total OPEB liability is $4,564,428.

93 122

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

Sensitivity of the Total OPEB Liability to Changes in the Discount Rate The following presents the total OPEB liability of the Plan as of the Measurement Date, calculated using the discount rate of 6.25%, as well as what the total OPEB liability would be if it were calculated using a discount rate that is 1 percen tage-point lower (5.25%) or 1 percentage-point higher (7.25%) than the current rate:

Discount Rate – 1%
(5.25%)
Current Discount Rate
(6.25%)
Discount Rate + 1%
(7.25%)
Total OPEB Liability $ 75,060,927 $ 61,680,686 $ 50,658,739

Sensitivity of the Total OPEB Liability to Changes in the Medical Trend Rates

The following presents the total OPEB liability of the Plan as of the Measurement Date, calculated using the medical trend rates of Non-Medicare – 7.60% and Medicare – 5.90%, as well as what the total OPEB liability would be if it were calculate d using medical trend rates that are 1 percentage- point lower (Non-Medicare – 6.60%, Medicare – 4.90%) or 1 percentage-point higher (Non- Medicare – 8.60%, Medicare – 6.90%) than the current rates:

Medical Trend Rates – 1%
(6.60% and 4.90%)
Current Medical Trend Rates
(7.60% and 5.90%)
Medical Trend Rates + 1%
(8.60% and 4.90%)
Total OPEB Liability $ 52,066,604 $ 61,680,686 $ 73,568,849

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

For the measurement period ended June 30, 202 3, the City recognized OPEB expense of $6,551,576.

As of June 30, 2024, the City has deferred outflows and deferred inflows of resources related to OPEB as follows:

Deferred Outflows of
Resources
Deferred Inflows of
Resources
OPEB Contributions Subsequent to Measurement Date $ 5,837,000 $ - Differences between Expected and Actual Experience 4,971,628 2,786,949 Changes of Assumptions 11,316,437 35,000
Net Difference between Projected and Actual Earnings on OPEB Plan Investments
0 2,155,080
0000
00000

-
Total $ 24,280,145 $ 2,821,949

94 123

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

Deferred outflows of resources related to cont ributions subsequent to the measurement date reported above in the amounts of $5,837,000, will be recognized as a reduction of the total OPEB liability in the year ending June 30, 2025. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as OPEB expense as follows:

Deferred
Outflows/(Inflows) of
Resources
Year Ending June 30 Miscellaneous
2025 $ 2,042,012
2026 2,073,529
2027 3,477,835
2028 2,119,418
2029 2,335,337
Thereafter 3,373,065

(12) Deferred Compensation Plan
During fiscal year 1973-74, the City Council a dopted Resolution 74-120 establishing a deferred compensation plan (Plan) for the benefit of its elig ible employees. The City established the Plan to attract and hold well-qualified City employees by permitting them to make special provisions for monthly payments upon retirement. The Plan was qualified under the applicable provisions of the Federal Internal Revenue Code and complies with the provisions of Sections 53212 and 53214 of the California Government Code. Prior to fiscal year 1996-97, in accordance with Section 457 of the Internal Revenue Code, all assets of the Plan

remained the property of the City until paid or
made available to participants, subject only to the claims of the City’s general creditors.

As a result of changes to Section 457 defe rred compensation plans resulting from the Small Business Job Protection Act of 1996, the City’s deferred compensation plan administrator, Great West Life & Annuity Insurance Company (GWLAIC) established a custodial account on behalf of the Plan participants. Effective July 1, 1998, all amounts of compensation deferred under the Plan, all property and rights purchased with those amount s, and all income attributable to those amounts are held in the custodial account for the exclusiv

e benefit of the employee participants and their
beneficiaries.

While the City has full power and authority to admi nister and to adopt rules and regulations for the Plan, all investment decisions under the Plan are the responsibility of the Plan participants. The City has no liability for losses under the Plan, but does have the duty of due care that would be required of an ordinary prudent investor. Under certain circumstances, employees may modify their arrangements with the Plan to provide for great er or lesser contributions or to terminate their participation. If participants retire under the Plan or terminate service with the City, they may be eligible to receive payments under the Plan in acco rdance with provisions thereof. In the event of 95 124

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

serious financial emergency, the City may approve, upon request, withdrawals from the Plan by the participants, along with their allocated contributions. (13) Other Required Individual Fund Disclosures
Interfund Transactions – Due to/Due from Other Funds
Interfund receivable and payable balances at June 30, 2024 were as follows (in thousands):

Receivable Fund Payable Fund Amount

General Fund Nonmajor G overnmental Funds $ 6,566
The receivables from the nonmajor governmental funds represent short-term loans to cover negative cash balances in various funds.

Interfund Transactions - Advances
The balances of advances between funds at June 30, 2024 were as follows (in thousands):

Receivable Fund Payable Fund Amount

Nonmajor Governmental Funds General Fund $ 600

The advance from the Parks and Recreation Facilitie s Fund (a nonmajor governmental fund) to the General Fund represents a loan for property acquisition.

Successor Agency – Advances
The balances of advances to the Successor Agency Trust at June 30, 2024 were as follows (in thousands):

Receivable Fund Amount

General Fund $ 3,915
Nonmajor Governmental Funds 1,283
Water Enterprise Fund 1,218

$ 6,416

The advances to the Successor Agency Trust repr esent loans to fund infrastructure improvements and Supplemental Educational Revenue Augmen tation Fund (SERAF) payments. As required by law, 20% of the loan repayments from the Su ccessor Agency are transferred to the Low Mod Housing Fund. More information regarding the Successor Agency Trust can be found in Note 21. 96 125

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

(14) Transfers In and Out
The balances of transfers between funds for the year ended June 30, 2024 were as follows (in thousands):

Transfer From Transfer To Amount

General Fund

Water Enterprise Fund

$

12 Sewer Enterprise Fun d 22
Nonma jor Enterprise Fund 283
Internal Service Funds 4,200
Nonma jor Governmental Funds 7,089
11,606

Transit System Enterprise Fund General Fund 61
Nonma jor Enterprise Fund 16
77 Water Enterprise Fund General Fund 6
Nonma jor Enterprise Fund 3
9 Municipal Airport Enterprise Fund General Fund 10,356 Nonma jor Governmental Funds 67
Nonma jor Enterprise Fund 32
10,455

Internal Service Funds General Fund 9
Nonma jor Enterprise Fund 18
27 Nonmajor Enterprise Fund General Fund 1,231

Nonmajor Governmental Funds General Fund 2,989
Transit System Enterprise Fund 3,000
Nonmajor Governmental Funds 613
6,602

Total $ 30,007

Major activity within the fund transfers cat

egory can be summarized as follows:
 General Fund transfers to the Self-Insurance Fund (an internal service fund) represent contributions to fund self-insured claims and settlements;  General Fund transfers to the Capital Impr ovement Fund (a nonmajor governmental fund) represents contributions to fund various capital projects; 97 126

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

 Transfers to the General Fund from the Municipal Airport Enterprise Fund represent transfers to fund operations and equipment replacement;
 Transfers to the Transit System Enterpri se Fund from the Proposition A Fund (a nonmajor governmental fund) represent contributions to im prove public transit and related transportation infrastructure;
 Transfers to the General Fund from the Gas Tax Fund (a nonmajor governmental fund) represent transfers to fund various street-related operations.

(15) Risk Management
The City self-insures some risks, often within certain dollar limits, and fully insures other risks through the purchase of commercial insurance.

Liability: The City insures automobile and general liability risks to $5,000,000 per occurrence. There is excess liability coverage of $25,000,000 for amounts above the $5,000,000 self-insured retention.

The City also purchases insurance with lower or no deductibles/retentions covering the following specific risks: The Airport, Pollution Liability related to named locations, th e Farmer’s Market and certain special events.

Workers’ Compensation: The City is self-insured for workers’ compensation risks up to $2,000,000 per occurrence. Excess coverage is in place for am ounts above the $2,000,000 self-insured retention up to State of California statutory limits.

Property: The City purchases all risks property in surance, subject to exclusions, covering City buildings, contents, vehicles, and machines s ubject to deductibles of $1,000 to $150,000 per occurrence depending upon the type of loss.

Crime: The City purchases crime insurance up to

$15,000,000 per occurrence for the loss of money
and securities caused by employees and or others.

Short and Long Term Disability: The City purchases commercially available insurance to cover disability claims.

As of June 30, 2024, $52,657,699 and $14,822,055 have been accrued for workers’ compensation and general liability claims, respectively. These accruals represent estimates of amounts to be ultimately paid for reported claims and incurred but unreported claims based upon past experience, modified for current trends and other information.
98 127

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

Changes in the balance of claim liabilities during the period for all Self-Insurance Funds combined are as follows (in thousands):

Fiscal years

Beginning fiscal
year liability
balance
Current year
claims and
changes in
estimates

Claim payments

Ending fiscal
year balance

2022-23 $ 73,014 $ 10,949 $ (15,147) $ 68,816 2023-24 68,816 7,779 (9,115) 67,480

(16) Due from/Due to Other Governments
Amounts due from other governments consisted of the following at June 30, 2024 (in thousands):

State of
California
Federal
Agencies
County of
Los Angeles
Other Local
Governments Total
Governmental Funds:

General Fund 14,182 $ - $ 1,501 $ - $ 15,683 $ Other Governmental Funds:

Measure R Highway Fund - - 651 - 651 State Gas Tax Improvement Fund 1,003 - - - 1,003 Grants and Donation Fund - 1,418 135 65 1,618 Police Inmate Welfare Fund - - 8 - 8 Measure M Grant Fund - - 39 - 39 Rental Assistance Program Fund - 40 - 4 44 DNA Sampling Fund - - 1 - 1 Enterprise Funds:

Transit System Fund 866 2,254 785 - 3,905 Nonmajor Enterprise Fund - - 2 - 2

Total 16,051$ 3,712$ 3,122$ 69$ 22,954$

(17) Unearned Revenue
The table that follows shows activity for the City’s unearned revenue accounts as of June 30, 2024.

The unearned revenue in the Transit System En

terprise Fund represents amounts that will be
recognized when eligible purchases occur. The rents received by the Municipal Airport Enterprise Fund in June for July will be recognized in July 2024. In May and June of 2024, the Parks and Recreation program of the General Fund collected revenues for summer classes which begin in July. These revenues will be recognized in July 2024.
99 128

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

Balance at Balance at
July 1, 2023 Additions Deductions June 30, 2024
Governmental Funds:

Parks and Recreation revenues received
in May and June for July classes 715$ 795 $ 715 $ 795$ Section 8 Housing - Emergency
Housing Voucher 10 33 13 30 Total governmental funds 725 828 728 825 Enterprise Funds:

Transit Security Reserve 1,343 - - 1,343 Transit Prop 1B 1,505 52 40 1,517 Transit Prop C (MOSIP) 2,193 6 8 2,191 Transit Measure R Operations 2,574 2,082 2,574 2,082 Transit Measure M Operations 3,636 4,288 3,636 4,288 Transit Cap and Trade Capital 392 16 - 408 Airport rents received for July 459 2,418 2,592 285 Total Enterprise Funds 12,102 8,862 8,850 12,114 Total 12,827$ 9,690$ 9,578 $ 12,939$ Unearned Revenue Activity for Fiscal Year Ended June 30, 2024 (in thousands)

(18) Deficit Fund Balance and Net Position (Accumulated Deficit) The Community Development Block Grant Fund, a special revenue fund, has an accumulated deficit of $64,853 at June 30, 2024. Such deficit is attributed to a retention withheld by the City from a construction contract that will be rel eased upon project completion and will then be submitted to the grantor for reimbursement. The grantor also withholds 5% retention on funding reimbursements.

The Self-Insurance Fund, an internal service fund, has an accumulated deficit of $52,056,248 at June 30, 2024. Such deficit is attributed to replenishment of the reserve for general liability claims resulting from settlements of claims in excess of esta blished reserves. It is anticipated that the deficit will continue to be reduced over future years through increases in annual charges made through the budgeting process, as they become nece ssary. Excess charges will be distributed to all funds proportionately depending on their proportionate benefit of the Self-Insurance Fund.

100
129

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

(19) Commitments and Contingencies
The City has various outstanding contracts and purchase orders for services, supplies, materials and capital projects that have not been completed as of fiscal year-end. These commitments total $37,984,266 at June 30, 2024.

The balances of encumbrances and other commitmen

ts by funds at June 30, 2024 were as follows
(in thousands):

The City has been named as a defendant in certain other claims and litigation matters as follows:
 The City is involved in an ongoing dispute relating to contamination on City-owned properties which have been leased out to i ndustrial operators since the 1950s. The City has filed a number of claims against the industrial operators, and counter-claims have been filed against the City, as the owner of the properties at issue. The case is currently in the expert discovery phase and is scheduled for trial in 2025. The Los Angeles Regional Water Quality Control Board has also issued a cleanup and abatement order, naming the City and several of the same defendants in this case. Several insu rance carriers are participating in the defense of the City. It is likely that other parties w ill be liable for the majority of the overall cleanup and remediation costs, which are estimated to be in excess of $50 million. The City’s liability cannot be reasonably estimated at th is time, however, given the total estimated liability of this matter, even a small share of liability could be material.  The City was sued as a result of a City-owned slope failing and depositing mud on a private property owner’s parking lot. The case is currently in the discovery phase and is scheduled for trial in 2025. There is the possibility that the City may be found liable. The City’s liability cannot be reasonably estimated at this time, but is anticipated to be less than $500,000.
 A claim was lodged against the City relating to injuries allegedly caused by a city- maintained tree. The case is cu rrently in the discovery phase and is scheduled for trial in 2025. Likelihood is unable to be determined at th is time as certain material facts have yet to be determined. The City estimates liability would be between $175,000 - $500,000.  A claim was lodged against the City relating to injuries and damages allegedly caused by a collision with a city-owned bus. The case is currently in the discovery phase and is scheduled for trial in 2025. Likelihood is unable to be determined at this time as certain material facts have yet to be determined. The City estimates liability would be between $150,000 - $350,000 but this may change as additional information is obtained.

Governmental Funds:

General Fund $ 4,002
Capital improvement funds 33,947
Nonmajor governmental funds 35
Total governmental funds $ 37,984

101
130

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

(20) Fund Balance Policies
The City will strive to maintain at the end of each fiscal year a General Fund Unassigned fund balance at a level that is equal to at least 20% of the fiscal year’s General Fund Operating Fund budget appropriation, as amended. In a year in which the City falls short, a plan shall be identified to return to meet the 20% policy. Within this amount, City Council may set a portion aside under an Economic Anomaly Reserve. As of June 30, 20 24, the unassigned fund balance of the General Fund includes an Economic Anomaly Reserve of $12,884,270. Council a pproval will be required before expending funds from the Economic Anomaly Reserve.

As part of the Operating Budget Resolution of the City, City Council delegates authority to assign amounts for specific purposes to the City Manager. As of June 30, 2024, the assigned fund balance of $25,605,239 consists of amounts intended to be used for capital-related projects, including a portion set aside for various equipment replacement.
(21) Successor Agency Trust for Assets of Former Redevelopment Agency a) Long-term Debt – Successor Agency Bonds
2018 Tax Allocation Refunding Bonds – Downtown Redevelopment Project On October 2018, the Former Redevelopment Agency issued $3,665,000 Tax Allocation Refunding Bonds. Proceeds of the Bonds were used to refund the Agency’s outstanding Downtown Redevelopment Project Tax Allocation Refunding Bonds, 1998 Series A, to fund a reserve for the Bonds, to pay premium of the 2018 Insurance Policy, and to pay the costs of issuing the Bonds. Starting from September 1, 2019 and continuing through 2028, the principal on the term bonds matures at variable amounts ranging from $310,000 to $445,000. Interest is payable on March 1 and September 1 of each year with rates ranging from 3.00% to 5.00%.

Principal and interest are to be repaid directly from the tax increments accruing to the Agency.

The reserve requirement is equal to the lesser of: 1) 10% of the original principal amount of the bonds; 2) 125% of average annual debt servi ce payments; or 3) the maximum annual debt service payments. This requirement will be satisfied by the delivery of the 2018 Reserve Policy in the amount of $412,448 on th e closing date of the 2018 bonds. The Successor Agency will have no obligation to replace the 2018 Reserve Polic y or to fund the reserve account with cash if 1) amounts are not available under the 2018 Rese rve Policy, or 2) any rating assigned to the bond insurer is downgraded, withdrawn or suspended.

2018 Tax Allocation Refunding Bonds – Industrial Redevelopment Project On October 2018, the Former Redevelopment Agency issued $11,505,000 Tax Allocation Refunding Bonds. Proceeds of the 2018 Series Bonds were used to refund the Agency’s outstanding Industrial Redevelopment Project Tax Allocation Refunding Bonds, 1998 Series A and B, and 1999 Series C, to fund a reserve for the Bonds, to pay premium of the 2018 Insurance Policy, and to pay the costs of issuing the Bonds. Starting from September 1, 2019 and continuing through 2028, the principal on the term bonds matures at variable amounts 102
131

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024
ranging from $960,000 to $1,390,000. Interest is payable on March 1 and September 1 of each year with rates ranging from 3.00% to 5.00%.

The reserve requirement is equal to the lesser of: 1) 10% of the original principal amount of the bonds; 2) 125% of average annual debt servi ce payments; or 3) the maximum annual debt service payments. This requirement will be satisfied by the delivery of the 2018 Reserve Policy in the amount of $1,294,318 on the closing date of the 2018 bonds. The Successor Agency will have no obligation to replace the 2018 Reserve Polic y or to fund the reserve account with cash if 1) amounts are not available under the 2018 Rese rve Policy, or 2) any rating assigned to the bond insurer is downgraded, withdrawn or suspended.

Annual debt service requirements to maturity fo r all tax allocation bonds to be paid from the Successor Agency Trust are as follows (in thousands):

Annual Debt Service Requirement
Principal Interest Total
Year ending June 30:
2025 1,515$ 380$ 1,895$
2026 1,590 302 1,892
2027 1,665 221
1,88 6
2028 1,750 135 1,885
2029 1,835 46 1,881
8,355$ 1,084$ $
9,4 39
Advances and Notes Payable
At June 30, 2024, the Successor Agency Trust had advances and notes payable in the following amounts:

Advance from Los Angeles County: The ma

ximum annual debt service on Agency
indebtedness may not exceed $1,550,000. Such a

dvances are to be repaid in the fiscal year
immediately following the year in which the Ag

ency’s annual tax increment allocation exceeds
the annual debt service requirement. This advance bears simple interest at the rate of 7.0% per year. At June 30, 2024, the principal balance outstanding is $12,733,970 and accrued interest is $15,201,159.

Pledged Revenue
The Successor Agency Trust reports debt issuan ces outstanding that were collateralized by the pledging of certain revenues of the former redevelopment agency. The amount and term of the remainder of these commitments is indicated in the debt service to maturity tables presented in the accompanying notes. The purpose for which the proceeds of the related debt issuances were utilized is disclosed in the debt descripti on of the accompanying notes. As a result of the 103
132

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

state’s action to dissolve all redevelopment agencies, the Successor Agency no longer receives the full amount of tax increment previously pledged by the dissolved redevelopment agency to its bondholders. In its place is a new revenue stream, Redevelopment Property Tax Trust Fund (RPTTF) funds, provided to th e Successor Agency that represents only that portion of tax increment that is necessary to pay the enfor ceable obligations approve d by the Department of Finance. For the current year, debt service payments as a percentage of RPTTF funds is indicated on the table below. This percentage also approximates the relationship of debt service to RPTTF revenues for the remainder of the term of the commitments.

b) Changes in Long-Term Obligations – Successor Agency Debt The following is a summary of changes in the Successor Agency Trust’s long-term obligations for the year ended June 30, 2024 (in thousands):

Trust Activities:

Balance
June 30,
2023
Incurred or
Issued
Satisfied or
Matured
Balance
June 30,
2024
Amounts due
within One
Year
Amounts Due
in more than
One Year
Advances and notes payable:

Direct Borrowing
County of Los Angeles 27,944$ 891$ 900$ 27,935 $ 952$ 26,983$ Other debt:

Tax Allocation Bonds
Downtown '18 project refunding 2,365 - 345 2,020 365 1,655 Downtown '18 project
refunding - premium 244 - 46 198 - 198 Industrial '18 project refunding 7,425 - 1,090 6,335 1,150 5,185 Industrial '18 project
refunding - premium 765 - 143 622 - 622

Total Trust Activities 38,743$ 891$ 2,524$ 37,110$ 2,467$ 34,643$

Description of
Pledged Revenue
Annual Amount of
RPTTF Revenue
Debt Service (Annual
Principal and Interest)
Debt Service as a
Percentage of RPTTF
Revenue
Successor Agency
Revenues (RPTTF)

$2,989,497

$1,888,625

63.2%
104
133

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2024

c) Advances from City – Successor Agency Advances
The advances from the City to the Successor Agency Trust of $6, 415,990 represent loans to fund infrastructure improvements including debt related interest and SERAF payments. d) Deficit Net Position – Successor Agency Deficit
The Successor Agency Trust has an accumulated deficit of $41,137,083 as of June 30, 2024, which represents the inclusion of long-term advances and bond debt in excess of cash with fiscal agents including related interest.
(22) Subsequent Event
In preparing these financial statements, the City h as evaluated events and transactions for potential recognition or disclosure through December 26, 2024

, which is the date these financial statements
were available to be issued. Based upon this ev

aluation, it was determined
that no subsequent
events occurred that require recognition or additional disclosure in the financial statements.

105
134
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his page intentionally left blank)
106
135

REQUIRED SUPPLEMENTARY

INFORMATION

ANNUAL COMPREHENSIVE FINANCIAL REPORT
136

CITY OF TORRANCE, CALIFORNIA
Required Supplementary Information
Year ended June 30, 2024
Schedules of Required Supplementary Information
1) Pension Plan
Schedule of Changes in Total Pension Liability and Related Ratios During the Measurement Period (Last Ten Fiscal Years)

MISCELLANEOUS
Fi
scal Year 2023-24 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 Measurement Period 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14

TOTAL PENSION LIABILITY
Service Cost 10,772,264$ 11,455,825$ 10,755,852$ 10,706,256$ 10,949,536$ 10,957,510$ 10,776,016$ $ 9,326,290 9,144,087 $ 9,490,054$ Interest 49,672,891 48,324,463 47,495,199 46,055,415 44,638,083 43,043,370 42,085,919 40,872,188 39,258,518 38,027,142 Changes of Benefit Terms - - - - - - - - - - Difference between Ex pected and
Actual Experience (555,304) (5,630,835) (2,912,611) (3,733,828) (1,659,363) (7,537,823) (4,660,868) (2,057,399) (7,405,941) - Changes of Assum ptions - 19,249,642 - - - (4,059,282) 34,423,764 - (9,412,681) - Benefit Payments, Including Refunds of
Em ployee Contributions (41,197,053) (37,484,512) (34,783,119) (32,690,913) (31,127,723) (28,939,991) (26,989,306) (25,708,633) (24,976,500) (23,765,315) Net Change in Total Pension Liab ility 18,692,798 35,914,583 20,555,321 20,336,930 22,800,533 13,463,784 55,635,525 22,432,446 6,607,483 23,751,881 Total Pension Liab ility – Beginning 735,664,670 699,750,087 679,194,766 658,857,836 636,057,303 622,593,519 566,957,994 544,525,548 537,918,065 514,166,184 Total Pension Liab ility – E nd ing (a) 754,357,468$ 735,664,670$ 699,750,087$ 679,194,766$ 658,857,836$ 636,057,303$ 622,593,519$ 566,957,994$ 544,525,548$ 537, 918,065$

PLAN FIDUCIARY NET POSITION
Contributions – Em ployer 11,657,493$ 10,950,442$ 93,550,447$ 15,584,372$ 13,593,022$ 11,610,677$ 10,402,620$ 10,695,442$ 8,666,613$ 8,663,640$ Contributions – Em ployee 4,393,192 4,272,378 4,684,750 4,742,292 4,681,095 4,804,470 4,751,970 4,489,879 4,427,144 4,631,916 Investment Income 40,396,552 (55,089,320) 133,797,877 26,295,191 33,414,583 40,668,268 49,956,056 2,292,263 10,203,028 70,021,160 Adm inistrative Ex pense (487,358) (461,328) (543,282) (748,123) (364,288) (755,023) (660,060) (277,649) (512,710) (583,338) Plan to Plan Resource Movem ent - - - - - (1,188) (572) (1,138) (1,092) - Benefit Payments, Including Refunds of
Em ployee Contributions (41,197,053) (37,484,512) (34,783,119) (32,690,913) (31,127,723) (28,939,991) (26,989,306) (25,708,633) (24,976,500) (23,765,315) Other Changes in Net Fiduciary Position - - - - 1,188 (1,433,802) - - - - Net Change in Fiduciary Net Position 14,762,826 (77,812,340) 196,706,673 13,182,819 20,197,877 25,953,411 37,460,708 (8,509,836) (2,193,517) 58,968,063 Plan Fiduciary Net Position – Beginning 662,753,411 740,565,751 543,859,078 530,676,259 510,478,382 484,524,971 447,064,263 455,574,099 457,767,616 39 8,799,553 Plan Fiduciary Net Position – Ending (b) 677,516,237$ 662,753,411$ 740,565,751$ 543,859,078$ 530,676,259$ 510,478,382$ 484,524,971$ 447,064,263$ 455,574,099$ 457,767,616$ Plan Total Pension Liab ility – E nd ing (a) - (b ) 76,841,231$ 72,911,259$ (40,815,664)$ 135,335,688$ 128,181,577$ 125,578,921$ 138,068,548$ 119,893,731$ 88,951,449$ 80,150,449$ Plan Fiduciary Net Position as a Percentage
of the Total Pension Liab ility 89.81% 90.09% 105.83% 80.07% 80.54% 80.26% 77.82% 78.85% 83.66% 85.10% Cov ered Payroll 75,235,099$ 74,291,497$ 74,945,198$ 75,648,179$ 77,403,884$ 74,413,027$ 72,998,617$ 70,886,923$ 69,039,875$ 66,675,430$ Plan Total Pension Liab ility as a Percentage of
Cov ered Payroll 102.13% 98.14% -54.46% 178.90% 165.60% 168.76% 189.14% 169.13% 128.84% 120.21% 107
137

CITY OF TORRANCE, CALIFORNIA
Required Supplementary Information
Year ended June 30, 2024

S AFETY - POLICE
Fiscal Year 2023-24 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 Measurement Period 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14

TOTAL PENSION LIABILITY
Service Cost 10,449,013 $ 11,371,123 $ 10,297,994 $ 10,266,470 $ 10,135,377 $ 9,617,998 $ 9,591,564 $ $ 8,469,089 8,309,481 $ 8,460,366 $ Interes t 45,576,331 43,930,948 42,612,265 41,172,526 39,814,196 38,480,738 37,507,939 36,797,609 35,673,874 34,278,788 Changes of Benefit Term s - - - - - - - - - - Difference between Ex pected and
Actual Experience 5,654,688 (1,207,290) 1,634,984 332,145 240,434 (2,314,059) (5,427,144) (2,637,099) 589,439 - Changes of Assum ptions - 22,792,083 - - - (2,610,368) 30,873,205 - (8,606,841) - Benefit Paym ents, Including Refunds of
Em ployee Contributions (38,549,863) (34,749,264) (33,904,651) (32,002,431) (30,696,816) (29,199,389) (27,966,047) (27,437,806) (26,035,590) (24,707,746) Net Change in Total Pension Liab ility 23,130,169 42,137,600 20,640,592 19,768,710 19,493,191 13,974,920 44,579,517 15,191,793 9,930,363 18,031,408 Total Pension Liab ility – Beginning 668,922,276 626,784,676 606,144,084 586,375,374 566,882,183 552,907,263 508,327,746 493,135,953 483,205,590 465,174,182 Total Pension Liab ility – E nd ing (a) 692,052,445$ 668,922,276 $ 626,784,676 $ 606,144,084 $ 586,375,374 $ 566,882,183 $ 552,907,263 $ 508,327,746 $ 493,135,953 $ 483,205,590$ PL

AN FIDUCIARY NET POSITION
Contributions – Em ployer 12,349,064$ 11,847,266$ 189,129,627$ 21,054,557$ 18,925,078$ 16,961,372$ 15,646,286$ 15,412,320$ 13,719,737$ 12,985,781$ Contributions – Em ployee 2,831,357 3,140,533 3,136,916 2,993,505 2,983,799 2,728,055 2,554,857 2,841,688 2,724,184 3,740,084 Investm ent Incom e 35,458,887 (48,468,581) 112,274,103 18,488,022 23,344,017 28,673,867 35,441,336 1,582,749 7,263,861 50,235,622 Adm inistrative Ex pense (428,432) (405,694) (380,596) (523,005) (254,540) (528,343) (463,367) (196,022) (361,983) (416,670) Plan to Plan Resource Movement - - - - - (832) 572 404 1,092 - Benefit Paym ents, Including Refunds of
Em ployee Contributions (38,549,863) (34,749,264) (33,904,651) (32,002,431) (30,696,816) (29,199,389) (27,966,047) (27,437,806) (26,035,590) (24,707,746) Other Changes in Net Fiduciary Position - - - - 832 (1,003,332) - - - - Net Change in Fid uciary Net Position 11,661,013 (68,635,740) 270,255,399 10,010,648 14,302,370 17,631,398 25,213,637 (7,796,667) (2,688,699) 41,837,071 Plan Fid uciary Net Position – Beginning 582,620,327 651,256,067 381,000,668 370,990,020 356,687,650 339,056,252 313,842,615 321,639,282 324,327,981 282,490,910 Pla
n Fid uciary Net Position – E nd ing (b ) 594,281,340$ 582,620,327$ 651,256,067$ 381,000,668$ 370,990,020$ 356,687,650$ 339,056,252$ 313,842,615$ 321,639,282$ 324,327,981$ Plan Total Pension Liab ility – E nd ing (a) - (b ) 97,771,105$ 86,301,949$ (24,471,391)$ 225,143,416$ 215,385,354$ 210,194,533$ 213,851,011$ 194,485,131$ 171,496,671$ 158,877,609$ Plan Fiduciary Net Pos ition as a Percentage
of the Total Pension Liab ility 85.87% 87.10% 103.90% 62.86% 63.27% 62.92% 61.32% 61.74% 65.22% 67.12% Cov ered Payroll 36,290,274$ 36,436,354$ 36,949,943$ 36,495,812$ 37,037,648$ 36,159,856$ 35,008,338$ 34,532,099$ 33,611,327$ 32,875,017$ Plan Total Pension Liability as a Percentage of
Cov ered Payroll 269.41% 236.86% -66.23% 616.90% 581.53% 581.29% 610.86% 563.20% 510.23% 483.28%

108
138

CITY OF TORRANCE, CALIFORNIA
Required Supplementary Information
Year ended June 30, 2024

S AFETY - FIRE
Fiscal Year 2023-24 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 Measurement Period 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14

TOTAL PENS ION LIABILITY
Service Cost 5,798,843 $ 6,081,104 $ 5,145,012 $ 5,373,553 $ 5,227,948 $ 5,388,369 $ 5,477,299 $ $ 4,792,460 4,548,904 $ 4,835,576 $ Interest 28,354,338 27,558,427 27,147,256 26,342,771 25,640,581 24,647,319 24,038,253 23,824,477 23,092,358 22,588,535 Changes of Benefit Term s - - - - - - - - - - Difference between Ex pected and
Actual Experience 2,642,770 403,770 1,655,408 (275,824) 3,732,401 (308,957) (5,110,618) (643,989) (4,479,829) - Changes of Assum ptions - 9,739,334 - - - (1,978,419) 18,706,825 - (5,267,980) - Benefit Paym ents, Including Refunds of
Em ployee Contributions (25,391,886) (23,820,561) (22,555,084) (21,456,735) (20,232,644) (19,359,553) (17,971,061) (17,603,550) (17,494,135) (16,210,971) Net Change in Total Pension Liab ility 11,404,065 19,962,074 11,392,592 9,983,765 14,368,286 8,388,759 25,140,698 10,369,398 399,318 11,213,140 Total Pension Liab ility – Beginning 418,086,191 398,124,117 386,731,525 376,747,760 362,379,474 353,990,715 328,850,017 318,480,619 318,081,301 306,868,161 Total Pension Liab ility – E nd ing (a) 429,490,256$ 418,086,191$ 398,124,117$ 386,731,525$ 376,747,760$ 362,379,474$ 353,990,715$ 328,850,017$ 318,480,619$ 318,081,301$ PL

AN FIDUCIARY NET POSITION
Contributions – Em ployer 7,224,125$ 6,192,282$ 109,127,284$ 11,622,060$ 10,531,151$ 9,397,067$ 8,711,092$ 9,381,268$ 7,929,158$ 7,969,925$ Contributions – Em ployee 1,914,964 1,811,128 1,785,080 1,711,907 1,802,278 1,715,776 1,759,306 1,645,230 1,582,829 1,677,069 Investment Income 22,088,065 (30,647,145) 71,728,027 12,375,436 15,731,227 19,484,911 24,165,084 1,103,442 4,937,128 34,621,145 Adm inistrative Ex pense (269,237) (257,183) (252,753) (351,198) (172,311) (360,377) (317,314) (134,400) (248,172) (277,780) Plan to Plan Resource Movem ent - - - - - (564) - 735 13,412 - Benefit Paym ents, Including Refunds of
Em ployee Contributions (25,391,886) (23,820,561) (22,555,084) (21,456,735) (20,232,644) (19,359,553) (17,971,061) (17,603,550) (17,494,135) (16,210,971) Other Changes in Net Fiduciary Position - - - - 564 (684,363) - - - - Net Change in Fid uciary Net Position 5,566,031 (46,721,479) 159,832,554 3,901,470 7,660,265 10,192,897 16,347,107 (5,607,275) (3,279,780) 27,779,388 Plan Fid uciary Net Position – Beginning 366,132,478 412,853,957 253,021,403 249,119,933 241,459,668 231,266,771 214,919,664 220,526,939 223,806,719 196,027,331 P
lan Fid uciary Net Position – E nd ing (b ) 371,698,509$ 366,132,478$ 412,853,957$ 253,021,403$ 249,119,933$ 241,459,668$ 231,266,771$ 214,919,664$ 220,526,939$ 223,806,719$ Plan Total Pension Liab ility – E nd ing (a) - (b ) 57,791,747$ 51,953,713$ (14,729,840)$ 133,710,122$ 127,627,827$ 120,919,806$ 122,723,944$ 113,930,353$ 97,953,680$ 94,274,582$ Plan Fiduciary Net Position as a Percentage
of the Total Pension Liab ility 86.54% 87.57% 103.70% 65.43% 66.12% 66.63% 65.33% 65.35% 69.24% 70.36% Cov ered Payroll 27,929,114$ 28,011,597$ 27,089,986$ 25,179,302$ 25,674,381$ 25,623,573$ 24,462,329$ 23,651,743$ 22,790,050$ 22,209,834$ Plan Total Pension Liab ility as a Percentage of
Cov ered Payroll 206.92% 185.47% -54.37% 531.03% 497.10% 471.91% 501.69% 481.70% 429.81% 424.47%

Notes to Schedule:

Benefit Changes - The figures above include any liability impact that may have resulted from voluntary benefit changes which occurred after the June 30, 2019 valuation.

Changes in Assumptions:

Fiscal year 2015-16 – the discount rate changed from 7.5% (net of administrativ

e expense) to 7.65% (without a reduction
for administrative expense).

Fiscal year 2017-18 – the discount rate changed from 7.65% to 7.15%.

Fiscal year 2018-19 – demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Assumptions December 2017.

Fiscal year 2022-23 – the discount rate changed from 7.15% to 6.9%.

Fiscal year 2023-24 – there were no significant changes in assumption.

109
139

CITY OF TORRANCE, CALIFORNIA
Required Supplementary Information
Year ended June 30, 2024

Schedule of Plan Contributions
(Last Ten Fiscal Years)

M iscellaneous Fis cal Year
2023-24
Fis cal Year
2022-23
Fis cal Year
2021-22
Fiscal Year
2020-21
Fiscal Year
2019-20
Fis cal Year
2018-19
Fis cal Year
2017-18
Fis cal Year
2016-17
Fiscal Year
2015-16
Fiscal Year
2014-15
Actuarially Determined Contribution 7,411,431$ 11,661,780$ 11,208,576 $ 16,843,019 $ 15,530,157$ 13,582,986$ 11,408,482$ 10,408,505$ 9,699,067$ 8,658,540$ Contributions in Relation to the
Actuarially Determined Contribution (7,411,431) (11,661,780) (11,208,576) (93,526,273) (15,530,157) (13,582,986) (11,408,482) (10,408,505) (9,699,067) (8,658,540) Contribution Deficiency (Excess) $ - $ - $ - $ (76,683,254) $ - $ - $ - $ - $ - $ - Covered Payroll 86,352,482$ 75,235,099$ 74,291,497$ 74,945,198$ 75,648,179$ 77,403,884$ 74,413,027$ 72,998,617$ 70,886,923$ 69,039,875$ Contributions as a Percentage of
Covered Payroll 8.58% 15.50% 15.09% 22.47% 20.53% 17.55% 15.33% 14.26% 13.68% 12.54%

Safety - Police Fiscal Year
2023-24
Fiscal Year
2022-23
Fiscal Year
2021-22
Fiscal Year
2020-21
Fis cal Year
2019-20
Fis cal Year
2018-19
Fiscal Year
2017-18
Fis cal Year
2016-17
Fiscal Year
2015-16
Fiscal Year
2014-15
Actuarially Determ ined Contribution 8,143,861$ 12,347,359$ 12,143,202 $ 23,112,845 $ 20,999,595 $ 18,933,276 $ 16,730,140 $ 15,640,401 $ 14,412,320 $ 13,719,737 $ Contributions in Relation to the
Actuarially Determ ined Contribution (8,143,861) (12,347,359) (12,143,202) (189,103,194) (20,999,595) (18,933,276) (16,730,140) (15,640,401) (14,412,320) (13,719,737) Contribution Deficiency (Ex cess) $ - $ - $ - $ (165,990,349) $ - $ - $ - $ - $ - $ - Covered Payroll 38,310,822 $ 36,290,274 $ 36,436,354 $ 36,949,943 $ 36,495,812 $ 37,037,648 $ 36,159,856 $ 35,008,338 $ 34,532,099 $ 33,611,327 $ Contributions as a Percentage of
Covered Payroll 21.26% 34.02% 33.33% 62.55% 57.54% 51.12% 46.27% 44.68% 41.74% 40.82%

Safety - Fire Fiscal Year
2023-24
Fis cal Year
2022-23
Fis cal Year
2021-22
Fiscal Year
2020-21
Fiscal Year
2019-20
Fis cal Year
2018-19
Fis cal Year
2017-18
Fis cal Year
2016-17
Fiscal Year
2015-16
Fiscal Year
2014-15
Actuarially Determ ined Contribution 4,956,696$ 7,217,148 $ 6,341,996 $ 13,356,419$ 11,610,002 $ 10,524,771 $ 9,272,712 $ 8,711,092 $ 8,381,268 $ 7,929,158 $ Contributions in Relation to the
Actuarially Determined Contribution (4,956,696) (7,217,148) (6,341,996) (109,115,882) (11,610,002) (10,524,771) (9,272,712) (8,711,092) (8,381,268) (7,929,158) Contribution Deficiency (Ex cess) $ - $ - $ - $ (95,759,463) $ - $ - $ - $ - $ - $ - Covered Payroll 30,551,662 $ 27,929,114 $ 28,011,597 $ 27,089,986 $ 25,179,302 $ 25,674,381 $ 25,623,573 $ 24,462,329 $ 23,651,743 $ 22,790,050 $ Contributions as a Percentage of
Covered Payroll 16.22% 25.84% 22.64% 49.30% 46.11% 40.99% 36.19% 35.61% 35.44% 34.79%

110
140

CITY OF TORRANCE, CALIFORNIA
Required Supplementary Information
Year ended June 30, 2024

Notes to Schedule:

Valuation Date 6/30/2022 6/30/2021 6/30/2020 6/30/2018 6/30/2017 6/30/2016 6/30/2015 6/30/2014 6/30/2013 6/30/2012 Methods and Assumptions Used to Determine Contribution Rates:

Actuarial cost m ethod Entry age Entry age Entry age Entry age Entry age Entry age Entry age Entry age E ntry age Entry age Amortization method (1) (1) (1) (1) (1) (1) (1) (1) (1) (1) As set valuation method Market Value Market Value Market Value Market Value Market Value Market Value Market Value Market Value Market Va lue 15 Year Sm oothed
Market Method
Inflation 2.50% 2.30% 2.50% 2.625% 2.625% 2.75% 2.75% 2.75% 2.75% 2.75% Payroll Growth 2.75% 2.75% 2.75% 2.875% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Investment rate of return 7.00% (2) 6.90% (2) 7.00% (2) 7.25% (2) 7.25% (2) 7.375% (2) 7.50% (2) 7.50% (2) 7.50% (2) 7.50% (2) Retirement age (5) (5) (5) (5) (4) (4) (4) (3) (3) (3)
Mortality (8) (8) (8) (8) (7) (7) (7) (6) (6) (5)
(1) Level percentage of payroll, closed
(2) Net of pension plan investm ent ex pense, including inflation (3) The probabilities of Retirem ent are based on the 2010 CalPERS Ex perience Study for the period from 1997 to 2007. (4) The probabilities of Retirem ent are based on the 2014 CalPERS Ex perience Study for the period from 1997 to 2011. (5) The probabilities of Retirem ent are based on the 2017 CalPERS Ex perience Study for the period from 1997 to 2015. (6) The probabilities of m ortality are based on the 2010 CalPERS Ex perience Study for the period from 1997 to 2007.

Pre-retirem ent and Post-retirem ent m ortality rates include 5 years of projected m ortality im provem ent using Scale AA published by the Society of Actuaries.
(7) The probabilities of m ortality are based on the 2014 CalPERS Ex perience Study for the period from 1997 to 2011.

Pre-retirem ent and Post-retirem ent m ortality rates include 20 years of projected m ortality im provem ent using Scale BB published by the Society of Actuaries.
(8) The probabilities of m ortality are based on the 2017 CalPERS Ex perience Study for the period from 1997 to 2015.

Pre-retirem ent and Post-retirem ent m ortality rates include 15 years of projected m ortality im provem ent using 90% of Scale MP-2016 published by the Society of Actuaries.

111
141

CITY OF TORRANCE, CALIFORNIA
Required Supplementary Information
Year ended June 30, 2024

2) PARS Enhanced Retirement Defined Benefit Pension Plan

Schedule of Changes in Total Pension Liability and Related Ratios During the Measurement Period (Last Ten Fiscal Years)

Fiscal Year 2023-24 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 Measurement Period 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14

TOTAL PENSION LIABILITY
Service Cost 404,155$ 410,733$ 418,495$ 441,715$ 493,000$ 518,000$ 480,000$ $ 504,000 504,000 $ 557,000$ Interest 1,865,183 1,830,031 1,891,988 1,836,979 1,785,000 1,721,000 1,741,000 1,664,000 1,581,000 1,499,000 Changes of Benefit Term s - - - - - - - - - - Difference between Ex pected and
Actual Experience 335,110 - (1,006,503) - (280,000) - (118,000) - (772,000) - Changes of Assum ptions - - 2,088,141 - 144,000 - 950,000 - 821,000 - Benefit Payments, Including Refunds (1,645,856) (1,504,467) (1,357,066) (1,240,507) (1,144,000) (1,068,000) (945,000) (844,000) (756,000) (673,000) Net Change in Total Pens ion Liability 958,592 736,297 2,035,055 1,038,187 998,000 1,171,000 2,108,000 1,324,000 1,378,000 1,383,000 Total Pension Liability – Beginning 35,935,539 35,199,242 33,164,187 32,126,000 31,128,000 29,957,000 27,849,000 26,525,000 25,147,000 23,764,000 Total Pension Liability – Ending (a) 36,894,131$ 35,935,539$ 35,199,242$ 33,164,187$ 32,126,000$ 31,128,000$ 29,957,000$ 27,849,000$ 26,525,000$ 25,147,000$

PL AN FIDUCIARY NET POSITION
Contributions – Employer 1,362,000$ 1,563,000$ 1,512,000$ 1,509,800$ 1,510,000$ 1,508,000$ 1,522,000$ 1,349,000$ 1,347,000$ 1,302,000$ Contributions – Employee - - - - - - - - - - Investment Income 1,446,500 (2,608,630) 3,753,615 545,042 913,000 857,000 1,190,000 77,000 235,000 1,139,000 Administrative Expense (53,962) (32,212) (47,917) (31,969) (33,000) (45,000) (31,000) (48,000) (28,000) (45,000) Benefit Payments, Including Refunds (1,645,856) (1,504,467) (1,357,066) (1,240,507) (1,144,000) (1,068,000) (945,000) (844,000) (756,000) (673,000) Other Changes in Net Fiduciary Position - - - - - - - - - - Net Change in Fiduciary Net Position 1,108,682 (2,582,309) 3,860,632 782,366 1,246,000 1,252,000 1,736,000 534,000 798,000 1,723,000 Plan Fiduciary Net Position – Beginning 17,732,689 20,314,998 16,454,366 15,672,000 14,426,000 13,174,000 11,438,000 10,904,000 10,106,000 8,383,000 Plan Fiduciary Net Position – E nding (b) 18,841,371$ 17,732,689$ 20,314,998$ 16,454,366$ 15,672,000$ 14,426,000$ 13,174,000$ 11,438,000$ 10,904,000$ 10,106,000$ Plan Total Pension Liability – Ending (a) - (b) 18,052,760$ 18,202,850$ 14,884,244$ 16,709,821$ 16,454,000$ 16,702,000$ 16,783,000$ 16,411,000$ 15,621,000$ 15,041,000$ Plan Fiduciary Net Position as a Percentage of the
Total Pens ion Liability 51.07% 49.35% 57.71% 49.61% 48.78% 46.34% 43.98% 41.07% 41.11% 40.19% Covered Payroll 7,305,916$ 8,349,228$ 9,235,008$ 10,286,106$ 11,318,533$ 11,518,508$ 13,423,893$ 14,409,690$ 15,371,654$ 15,757,979$ Plan Total Pension Liability as a Percentage of
Covered Payroll 247.10% 218.02% 161.17% 162.45% 145.37% 145.00% 125.02% 113.89% 101.62% 95.45%

Notes to Schedule:

Benefit Changes - There were no changes to benefit terms specific to the plan.

Changes of Assumptions:

Fiscal year 2015-16 - the CalPERS experience study was changed from 1997-2007 to 1997-2011 and the mortality improvement projection was changed from scale AA to MP-14.

Fiscal year 2017-18 – the CalPERS experience study was changed from 1997-2011 to 1997-2015. The discount rate and expected long-term rate of return on plan investments changed from 6.25% to 5.75% and the inflation rate changed from

3.00% to 2.75%.

Fiscal year 2019-20 – the mortality improvement projection was changed from scale MP-14 to MP-19.

Fiscal year 2021-22 – the mortality improvement projection was changed from scale MP-19 to MP-21.

Fiscal years 2022-23 thru 2023-24 – there were no significant changes in assumption.

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142

CITY OF TORRANCE, CALIFORNIA
Required Supplementary Information
Year ended June 30, 2024

Schedule of Plan Contributions
(Last Ten Fiscal Years)

Fis cal Year
2023-24
Fiscal Year
2022-23
Fiscal Year
2021-22
Fiscal Year
2020-21
Fiscal Year
2019-20
Fis cal Year
2018-19
Fis cal Year
2017-18
Fis cal Year
2016-17
Fis cal Year
2015-16
Fiscal Year
2014-15
Actuarially Determ ined Contribution 1,415,800$ 1,362,000 $ 1,563,000 $ 1,512,000 $ 1,509,800 $ 1,510,000 $ 1,466,000 $ 1,522,134 $ 1,348,502 $ 1,347,000 $ Contributions in Relation to the
Actuarially Determ ined Contribution (1,415,800) (1,362,000) (1,563,000) (1,512,000) (1,509,800) (1,510,000) (1,466,000) (1,522,134) (1,348,502) (1,347,000) Contribution Deficiency (Ex cess) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Covered Payroll 8,700,068 $ 7,305,916 $ 8,349,228 $ 9,235,008 $ 10,286,106$ 11,318,533 $ 11,518,508 $ 13,423,893 $ 14,409,690 $ 15,371,654 $ Contributions as a Percentage of
Covered Payroll 16.3% 18.6% 18.7% 16.4% 14.7% 13.3% 12.7% 11.3% 9.4% 8.8%

Notes to Schedule:

Valuation Date 6/30/2023 6/30/2022 6/30/2021 6/30/2020 6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015 6/30/2014 Methods and Assumptions Used to Determine Contribution Rates:

Actuarial cost method Entry age Entry age Entry age Entry age Entry age Entry age Entry age Entry age Entry age Entry age Amortization method (7) 6.02% (1) 6.02% (1) 6.02% (1) 6.02% (1) 6.02% (1) 6.02% (1) 6.02% (1) 6.02% (1) 6.02% (1) Am ortization period 19 yrs 19 yrs 16 yrs 17 yrs 16 yrs 16 yrs 17 yrs 18 yrs 19 yrs 19 yrs Asset valuation method (9) (2) (2) (2) (2) (2) (2) (2) (2) (2) Inflation 2.50% 2.50% 2.50% 2.75% 2.75% 2.75% 3.00% 3.00% 3.00% 3.00% Cost of living adjustment 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Investment rate of return 5.25% 5.25% 5.75% 5.75% 6.75% 5.75% 6.25% 6.25% 6.25% 6.25% Retirement age ( 8) ( 6)( 6)( 5)( 5)( 5)( 4)( 4)( 4) ( 3) Mortality (8) (6) (6) (5) (5) (5) (4) (4) (4) (3)
(1) Minus norm al cost
(2) Investm ent gains and losses spread over 5 year rolling period, not less than 80% nor m ore than 120% of m arket value. (3) CalPERS 1997-2007 Experience Study
(4) CalPERS 1997-2011 Experience Study
(5) CalPERS 1997-2015 Experience Study
(6) CalPERS 2000-2019 Experience Study
(7) Changes in the Total Pens ion Liability due to as s umption changes and liability experience gain/los s are amortized on a straight-line basis over Ex pected Rem aining Service Lives of plan participants. (8) CalPERS Public Agency 2021 Ex perience Study
(9) Investm ent gain/los is am ortized on a straight-line basis over 5 years

113
143

CITY OF TORRANCE, CALIFORNIA
Required Supplementary Information
Year ended June 30, 2024

3) Other Postemployment Benefits

Schedule of Changes in Total OPEB Liability and Related Ratios During the Measurement Period

Fiscal Year 2023-24 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 * Measurement Period 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 *

TOTA L OPEB LIA BILITY
Service Cost 2,105,585$ 1,935,301$ 1,857,231$ 1,803,137$ 1,724,000$ 1,674,000$ 1,625,000$ Interest 5,011,817 4,839,056 4,879,287 4,696,322 4,647,000 4,475,000 4,319,000 Changes of Benefit Term s - - 5,549,078 Difference between Expected and Actual 5,732,980 - (5,078,087) - (1,801,000) - - Experience
Changes of Assumptions 11,852,107 - 2,011,737 - (360,000) - - Benefit Payments (4,171,763) (4,252,385) (4,063,915) (3,622,000) (3,512,000) (3,763,000) (3,596,000) Net Change in Total OPEB Liability 20,530,726 2,521,972 5,155,331 2,877,459 698,000 2,386,000 2,348,000 Total OPEB Liability – Beginning 80,137,762 77,615,790 72,460,459 69,583,000 68,885,000 66,499,000 64,151,000 Total OPEB Liability – Ending (a) 100,668,488$ 80,137,762$ 77,615,790$ 72,460,459$ 69,583,000$ 68,885,000$ 66,499,000$

PLAN FIDUCIARY NET POSITION
Contributions – Employer 5,644,000$ 5,957,000$ 5,781,000$ 5,297,000$ 5,908,000$ 5,908,000$ 11,617,000$ Contributions – Em ployee - - - - - - - Investment Income 3,067,253 (5,999,322) 9,263,758 1,164,007 1,630,000 1,799,000 1,457,000 Administrative Expense (32,415) (26,519) (27,144) (29,753) (19,000) (35, 000) (8,000) Benefit Payments, Including Refunds (4,171,763) (4,252,385) (4,063,915) (3,622,000) (3,512,000) (3,763,000) (3,596,000) Net Change in Fiduciary Net Position 4,507,075 (4,321,226) 10,953,699 2,809,254 4,007,000 3,909,000 9,470,000 Plan Fiduciary Net Position – Beginning 34,480,727 38,801,953 27,848,254 25,039,000 21,032,000 17,123,000 7,653,000 Plan Fiduciary Net Position – Ending (b) 38,987,802$ 34,480,727$ 38,801,953$ 27,848,254$ 25,039,000$ 21,032,000$ 17,123,000$ Plan Total OPEB Liability – Ending (a) - (b) 61,680,686$ 45,657,035$ 38,813,837$ 44,612,205$ 44,544,000$ 47,853,000$ 49,376,000$ Plan Fiduciary Net Position as a Percentage
of the Total OPEB Liability 38.7% 43.0% 50.0% 38.4% 36.0% 30.5% 25.7% Covered Payroll 139,454,487$ 135,000,968$ 132,144,587$ 131,469,000$ 133,561,000$ 140,096,000$ 141,378,000$ Plan Total OPEB Liability as a Percentage of
Covered Payroll 44.2% 33.8% 29.4% 33.9% 33.4% 34.2% 34.9%

Notes to Schedule:

Benefit Changes:

Fiscal year 2021-22 – the City contribution to Police Yearly Stipend increased from 1.5% to 2.0% of payroll Changes of Assumptions:

Fiscal year 2019-20 – the mortality improvement projection was updated to scale MP-19.

Fiscal year 2020-21 – there were no significant changes in assumption.

Fiscal year 2021-22 - the mortality improvement projection was updated to scale MP-21.

Fiscal year 2022-23 thru 2023-24 – there were no significant changes in assumption.

* Fiscal year 2017-18 was the first year of GASB 75 implementation, therefore only seven fiscal years are shown.

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144

CITY OF TORRANCE, CALIFORNIA
Required Supplementary Information
Year ended June 30, 2024

Schedule of Plan Contributions

Fiscal Year
2023-24
Fiscal Year
2022-23
Fiscal Year
2021-22
Fiscal Year
2020-21
Fiscal Year
2019-20
Fiscal Year
2018-19
Fiscal Year
2017-18 *
Actuarially Determined Contribution 5,837,000$ 5,644,000$ 5,957,000$ 5,781,000$ 5,297,000$ 5,908,000$ 6,105,000$ Contributions in Relation to the
Actuarially Determined Contribution (5,837,000) (5,644,000) (5,957,000) (5,781,000) (5,297,000) (5,908,000) (5,908,000) Contribution Deficiency (Ex cess) $ - $ - $ - $ - $ - $ - $ 197,000 Covered Payroll 112,148,771$ 139,454,487$ 135,000,968$ 132,144,587$ 131,469,000$ 133,561,000$ 140,096,000$ Contributions as a Percentage of
Covered Payroll 5.2% 4.0% 4.4% 4.4% 4.0% 4.4% 4.4%

Notes to Schedule:

Methods and assumptions used to determine contribution rates -

Valuation Date June 30, 2023
Actuarial Cost Method Entry Age Normal
Amortization Method Changes in the Total OPEB Liability due to assumption changes and liability experience
gain/loss are amortized on a straight-line basis over
Expected Remaining Service Lives of plan
participants. Changes in Total OPEB Liability due
to changes in the benefit terms are recognized
immediately.

Asset Valuation Method Investment gains and losses is amortized on a straight-line basis over 5 years
Inflation 2.50%
Discount Rate 6.25%
Retirement Age CalPERS Public Agency 2021 experience study Mortality CalPERS Public Agency 2021 experience study

* Fiscal year 2017-18 was the first year of GASB 75 implementation, therefore only seven fiscal years are shown. 115
145

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116
146

COMBINING FINANCIAL

STATEMENTS & SCHEDULES

ANNUAL COMPREHENSIVE FINANCIAL REPORT
147

NON-MAJOR

GOVERNMENTAL FUNDS

ANNUAL COMPREHENSIVE FINANCIAL REPORT
148
Special
Revenue
Funds
Capital
Project
Funds
Debt
Service
Fund
Total
Nonmajor
Governmental
Funds
Assets
Pooled cash and investments 83,800,170$ 15,518,120$ -$ 99,318,290$ Cash and cash equivalents with fiscal agents - 3,657,077 6,808 3,663,885 Accounts receivable 316,131 - - 316,131
Accrued interest receivable 411,449 - - 411,449
Advance to successor agency 1,283,197 - - 1,283,197 Due from other governments 3,363,273 - - 3,363,273 Interfund advances receivable 600,000 - - 600,000
Notes receivable 32,900 - - 32,900
Lease receivable 771,796 - - 771,796
Prepaids 250 - - 250
Total Assets 90,579,166$ 19,175,197$ 6,808$ 109,761,171$ Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:

Accounts payable 975,399$ 917,522$ -$ 1,892,921$ Accounts payable - contract retention 409,126 59,158 - 468,284 Accrued liabilities 1,576,612 119,298 - 1,695,910 Due to other funds 6,497,659 68,192 - 6,565,851 Unearned revenue 30,143 - - 30,143
Deposits and guarantees 5,726,282 158,056 - 5,884,338 Total Liabilities 15,215,221 1,322,226 - 16,537,447 Deferred inflows of resources:

Unavailable revenue 703,197 - - 703,197
Deferred leases 691,420 - - 691,420
Total Deferred inflows of resources 1,394,617 - - 1,394,617 Fund Balances:

Nonspendable
Advances, net 580,000 - - 580,000
Prepaids 250 - - 250
Restricted for:

Public safety 3,744,172 - - 3,744,172
Public works 54,714,324 - - 54,714,324
Culture and recreation 4,491,175 - - 4,491,175 Community development 11,213,966 - - 11,213,966 Debt service - - 6,808 6,808
Assigned to:

Capital projects - 17,852,971 - 17,852,971
Unassigned (774,559) - - (774,559)
Total Fund Balances 73,969,328 17,852,971 6,808 91,829,107 Total Liabilities, Deferred Inflows of Resources
and Fund Balances 90,579,166$ 19,175,197$ 6,808$ 109,761,171$

CITY OF TORRANCE, CALIFORNIA
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2024
117
149
Special
Revenue
Funds
Capital
Project
Funds
Debt
Service
Fund
Total
Nonmajor
Governmental
Funds
Revenues:

Taxes 1,277,827$ - $ - $ 1,277,827$ Licenses, fees and permits 2,079,820 - - 2,079,820 Fines, forfeitures and penalties 242,302 - - 242,302 Use of money and property 2,568,742 208,504 22,593,694 25,370,940 Intergovernmental 44,202,958 - - 44,202,958 Other revenues 284,518 - - 284,518 Total revenues 50,656,167 208,504 22,593,694 73,458,365 Expenditures:

General government 2,436,402 2,648,664 - 5,085,066 Public safety 2,896,965 636,569 - 3,533,534 Public works 10,699,444 741,853 - 11,441,297 Culture and recreation 322,199 269,268 - 591,467 Community development 8,573,005 101,924 - 8,674,929 Debt service:

Principal retirement - - 9,955,000 9,955,000 Interest and fiscal charges - - 12,638,178 12,638,178 Total expenditures 24,928,015 4,398,278 22,593,178 51,919,471 Excess (deficiency) of revenues
over (under) expenditures 25,728,152 (4,189,774) 516 21,538,894 Other financing sources (uses):

SBITA - 113,760 - 113,760 Transfers in 1,117,283 6,651,881 - 7,769,164 Transfers out (6,602,900) - - (6,602,900) Total other financing sources (uses) (5,485,617) 6,765,641 - 1,280,024 Net change in fund balances 20,242,535 2,575,867 516 22,818,918 Fund balances, July 1, 2023 53,726,793 15,277,104 6,292 69,010,189 Fund balances, June 30, 2024 73,969,328$ 17,852,971$ 6,808$ 91,829,107$

CITY OF TORRANCE, CALIFORNIA
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds
Year ended June 30, 2024
118
150
Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than expendable
and nonexpendable trusts) that are restricted by law to expenditure for specified purposes.

The

PARKS AND RECREATION FACILITIES FUND
is
used to account for the revenues and expenditures in
connection with the City’s park and recreation facilities tax.

The

RENTAL ASSISTANCE PROGRAM FUND
is used
to account for the operations of the Federal rental
assistance program which provides relief for lower
income families.

The

SEISMIC EDUCATION FUND

is used to account for
the training and developing of the City’s staff on seismic activities.

The

STREET LIGHTING DISTRICT ASSESSMENT FUND

is used to account for the revenues and expenditures
associated with the maintenance and use of the City’s
street lighting system.

The

DRAINAGE IMPROVEMENT FUND
is used to account
for the revenues and expenditures in connection with
the improvement of the City’s drainage system.

The

PARKS, REHABILITATION AND OPEN SPACE, PARK

EQUIPMENT REPLACEMENT , AND GREENWOOD PARK

IMPROVEMENT REPLACEMENT FUNDS

are used to
account for the resources generated by a fee imposed
on new dwelling construction and certain remodeling
of dwellings.

The

PROPOSITION A FUND

is used to develop and
improve local public transit, paratransit and related
transportation infrastructure.

The

PROPOSITION C FUND

is used to improve transit
service and operations, reduce traffic congestion,
improve air quality, efficiently operate and improve the condition of the streets and freeways utilized by public transit and reduce foreign fuel dependence.

The

MEASURE R LOCAL RETURN AND HIGHWAY
FUND

is used for planning, right of way acquisitions,
engineering, administration, construction improvement,
maintenance, and operation of public streets and roads, highways and exclusive public mass transit guide ways.

The

MEASURE M LOCAL RETURN AND GRANT FUND
is
used for street and roads improvements, traffic control measures, bikeway and pedestrian improvements, and
public transit services.

The

MEASURE W FUND
is used to increase water
supply, improve water quality, and provide community
enhancements.

The

GRANTS AND DONATIONS FUND
is used to account
for monies received for the purpose of providing
educational, cultural and recreational needs of the
community and for specific infrastructure projects.

The

SPECIAL DEPOSITS FUND
is used to account
for private donations, deposits and other funds
disbursements on projects of the general government.

The

VANPOOL RIDESHARE FUND

is used to account
for rideshare revenues from Prop C and fares, and to
account for rideshare expenses.

The

BICYCLE TRANSPORTATION FUND

is used to
account for the revenues and expenditures in connection with the City’s bicycle transportation program.

The

LOW MOD HOUSING FUND

is used to account for
the revenues and expenditures in connection with
developing and managing affordable housing for low,
very low and extreme low income households.

The

DEVELOPMENT IMPACT FUND
is used to account
for the transportation, utility undergrounding, sewer
storm drain, Police & Fire impact fees that will be used to finance facilities identified by the study’s needs list.

The

GEOLOGIC HAZARD ABATEMENT FUND

is used to
account for the costs of installation and construction of improvements necessary to the prevention, mitigation,
abatement, or control of a geologic hazard within the
City.

The

STATE GAS TAX STREET IMPROVEMENT FUND
is used to account for the State gasoline tax revenues
received from the State which are used for maintenance
and improvement of the City’s streets.

The

ENVIRONMENTAL FUND

is used to account for
the cost of analysis and evaluation of air pollutants
potentially derived from refineries.

The

AIR QUALITY MANAGEMENT DISTRICT FUND
is
used to account for City compliance with air quality
management regulations.

The

MEADOW PARK PARKING LOT DISTRICT FUND

is used to account for the revenues and expenditures
generated through the cleaning and maintenance of the
Meadow Park parking lot district.

The
POLICE INMATE WELFARE FUND is comprised of
any money, refund, rebate or commission received from
a telephone company or pay telephone provider when
the money is attributable to the use of pay telephones
which are primarily used by inmates while incarcerated.

The

COMMUNITY DEVELOPMENT BLOCK GRANT FUND

is used to account for the funds allocated by the US
Department of Housing and Urban Development to the
City for community and infrastructure development.

The

FEDERAL HOUSING AND REHABILITATION FUND
is
used to account for the activities of the Federal Housing and Rehabilitation Grant.

The

ASSET FOREFEITURE FUND

is used to account
for resources used solely for investigation, detection
and prosecution of criminal activities. This includes
the purchase of equipment, investigation training, and
developing/acquiring personnel resources.

The
PROPOSITION 1B FUND
is used to account for
monies received from the State out of the State general obligation bonds for the purpose of providing roadway
extension, rehabilitation and reconstruction.

The

DNA SAMPLING FUND
is used to account for DNA
sampling of arrestees that is reimbursed by the State.

The

TORRANCE TOURISM BUSINESS IMPROVEMENT

DISTRICT FUND

is used to account for funds contributed
by lodging businesses to market the area, including
promotional activities, special events, and programs in order to increase business.

NON-MAJOR SPECIAL

REVENUE FUNDS

ANNUAL COMPREHENSIVE FINANCIAL REPORT
151
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119
152
Parks and
Recreation
Facilities
Fund
Rental
Assistance
Program
Fund
Seismic
Education Fund
Street Lighting
District
Assessment
Fund
Drainage
Improvement
Fund
Parks,
Rehabiliation
and Open Space
Fund
Park Equipment
Replacement
Fund
Assets
Pooled cash and investments 415,952$ 574,310 $ 118,334 $ 162,064 $ 21,897 $ 1,968,185 $ 265,542 $ Accounts receivable 1,100 2,317 689 5,663 - 3,707 - Accrued interest receivable 2,905 - 827 - 153 13,748 1,855 Advance to successor agency - - - - - - - Due from other governments - 43,794 - - - - - Interfund advances receivable 600,000 - - - - - - Notes receivable - - - - - - - Lease receivable - - - - - - 771,796 Prepaids - - - - - - - Total assets 1,019,957$ 620,421 $ 119,850 $ 167,727 $ 22,050 $ 1,985,640 $ 1,039,193 $ Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:

Accounts payable -$ 1,380$ 108,046$ 20,039$ -$ 1,540$ -$ Accounts payable - contract retention 480 - - - - - - Accrued liabilities - 14,283 - 147,688 - - - Due to other funds - - - - - - - Unearned revenue - 30,143 - - - - - Deposits and guarantees - - - - - - - Total liabilities 480 45,806 108,046 167,727 - 1,540 - Deferred inflows of resources:

Unavailable revenue - - - - - - - Deferred leases - - - - - - 691,420 Total deferred inflows of resources - - - - - - 691,420 Fund balances:

Nonspendable
Advances, net - - - - - - - Prepaids - - - - - - - Restricted for:

Public safety - - - - - - - Public works - - - - 22,050 - - Culture and recreation 1,019,477 - - - - 1,984,100 347,773 Community development - 574,615 11,804 - - - - Unassigned - - - - - - - Total fund balances 1,019,477 574,615 11,804 - 22,050 1,984,100 347,773 Total liabilities, deferred inflows of resources
and fund balances 1,019,957$ 620,421 $ 119,850 $ 167,727 $ 22,050 $ 1,985,640 $ 1,039,193 $ June 30, 2024

CITY OF TORRANCE, CALIFORNIA
Combining Balance Sheet
Nonmajor Special Revenue Funds
120
153
Greenwood
Park
Improvement
Replacement
Fund
Proposition A
Fund
Proposition C
Fund
Measure R
Local Return
and Highway
Fund
Measure M
Local Return
and Grant Fund
Measure W
Fund
Grants and
Donations Fund
Special Deposits
Fund
Vanpool
Rideshare Fund
10,202$ 5,425,007 $ 9,221,082 $ 7,743,580 $ 6,885,413 $ 8,511,396 $ 7,733,976 $ 3,208,882 $ 4,861 $ - - 112,807 - - - 187,359 - 833 71 37,895 65,663 54,091 107,264 - 213 - 40 - - - - - - - - - - - - 650,753 39,463 - 1,617,850 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - 10,273$ 5,462,902$ 9,399,552$ 8,448,424$ 7,032,140$ 8,511,396$ 9,539,398$ 3,208,882$ 5,734$ -$ -$ 273,776$ 66$ 53,546$ -$ 257,458$ 117,295$ 3,344$ - - 50,140 284,852 2,446 11,010 9,368 2,665 - - - 7,780 25,595 20,725 400,117 701,916 297 2,390 - - - 4,366,239 149,702 - 1,948,629 - - - - - - - - - - - - - - - - - 999 3,088,625 - - - 331,696 4,676,752 226,419 411,127 2,918,370 3,208,882 5,734 - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 816,399 - - - 5,462,902 9,067,856 3,771,672 6,805,721 8,100,269 - - - 10,273 - - - - - 1,129,552 - - - - - - - - 5,384,783 - - - - - - - - (709,706) - - 10,273 5,462,902 9,067,856 3,771,672 6,805,721 8,100,269 6,621,028 - - 10,273$ 5,462,902$ 9,399,552$
8,448,424$ 7,032,140$ 8,511,396$ 9,539,398$ 3,208,882$ 5,734$ (continued)
121
154
Bicycle
Transportation
Fund
Low Mod
Housing Fund
Development
Impact Fund
Geologic Hazard
Abatement Fund
State Gas
Tax Street
Improvement
Fund
Environmental
Fund
Air Quality
Management
District
Fund
Assets
Pooled cash and investments 65,741$ 3,522,092$ 6,094,769$ 14,317$ 17,377,170$ 159,685$ 505,707$ Accounts receivable - - 1,656 - - - - Accrued interest receivable - - - - 122,472 1,115 2,922 Advance to successor agency - 1,283,197 - - - - - Due from other governments - - - - 1,002,643 - - Interfund advances receivable - - - - - - - Notes receivable - - - - - - - Lease receivable - - - - - - - Prepaids - 250 - - - - - Total assets 65,741$ 4,805,539 $ 6,096,425 $ 14,317 $ 18,502,285$ 160,800 $ 508,629 $ Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:

Accounts payable 60,411$ -$ 35,395$ -$ 25,805$ -$ 2,275$ Accounts payable - contract retention 5,330 - - - 1,320 - - Accrued liabilities - 1,195 11,376 - 176,372 - 2,181 Due to other funds - - - - - - - Unearned revenue - - - - - - - Deposits and guarantees - - 2,590,927 - - - - Total liabilities 65,741 1,195 2,637,698 - 203,497 - 4,456 Deferred inflows of resources:

Unavailable revenue - 703,197 - - - - - Deferred leases - - - - - - - Total deferred inflows of resources - 703,197 - - - - - Fund balances:

Nonspendable
Advances, net - 580,000 - - - - Prepaids - 250 - - - - Restricted for:

Public safety - - 273,661 - - - - Public works - - 3,185,066 - 18,298,788 - - Culture and recreation - - - - - - - Community development - 3,520,897 - 14,317 - 160,800 504,173 Unassigned - - - - - - - Total fund balances - 4,101,147 3,458,727 14,317 18,298,788 160,800 504,173 Total liabilities, deferred inflows of resources
and fund balances 65,741$ 4,805,539 $ 6,096,425 $ 14,317 $ 18,502,285$ 160,800 $ 508,629 $ (continued)
June 30, 2024
Nonmajor Special Revenue Funds
Combining Balance Sheet

CITY OF TORRANCE, CALIFORNIA
122
155
Meadow Park
Parking Lot
District
Fund
Police
Inmate
Welfare
Fund
Community
Development
Block Grant
Fund
Federal Housing
and
Rehabilitation
Fund
Asset Forfeiture
Fund
Proposition
1B
Fund
DNA
Sampling
Fund
Torrance
Tourism
Business
Improvement
District Fund
Total
Nonmajor
Special Revenue
Funds
267,289$ 30,741$ 9,751$ 744,656$ 2,616,140$ -$ 75,698$ 45,731$ 83,800,170$ - - - - - - - - 316,131 - 215 - - - - - - 411,449 - - - - - - - - 1,283,197 - 7,750 - - - - 1,020 - 3,363,273 - - - - - - - - 600,000 - - - 32,900 - - - - 32,900 - - - - - - - - 771,796 - - - - - - - - 250 267,289$ 38,706$ 9,751$ 777,556$ 2,616,140$ -$ 76,718$ 45,731$ 90,579,166$ 2,268$ -$ -$ -$ 12,755$ -$ -$ -$ 975,399$ - - 41,515 - - - - - 409,126 - - - - 64,697 - - - 1,576,612 - - 33,089 - - - - - 6,497,659 - - - - - - - - 30,143 - - - - - - - 45,731 5,726,282 2,268 - 74,604 - 77,452 - - 45,731 15,215,221 - - - - - - - - 703,197 - - - - - - - - 691,420 - - - - - - - - 1,394,617 - - - - - - - - 580,000 - - - - - - - - 250 - 38,706 - - 2,538,688 - 76,718 - 3,744,172 - - - - - - - - 54,714,324 - - - - - - - - 4,491,175 265,021 - - 777,556 - - - - 11,213,966 - - (64,853) - - - - - (774,559) 265,021 38,706 (64,853) 777,556 2,538,688 - 76,718 - 73,969,328 267,289$ 38,706$ 9,751$ 777,556$ 2,616,140$ -$ 76,718$ 45,731$ 90,579,166$ 123
156
Parks and
Recreation
Facilities
Fund
Rental
Assistance
Program
Fund
Seismic
Education Fund
Street Lighting
District
Assessment
Fund
Drainage
Improvement
Fund
Parks,
Rehabiliation
and Open Space
Fund
Park Equipment
Replacement
Fund
Revenues:

Taxes -$ - $ - $ 1,277,827$ - $ - $ - $ Licenses, fees and permits 12,760 - - - - 317,633 - Fines, forfeitures and penalties - - - - - - - Use of money and property 14,682 18,712 3,825 - 777 66,332 75,009 Intergovernmental - 8,272,478 - - - - - Other revenues - 21,649 1,613 - - - - Total revenues 27,442 8,312,839 5,438 1,277,827 777 383,965 75,009 Expenditures:

General government - - - - - - - Public safety - - - - - - - Public works - - - 1,846,644 - - - Culture and recreation - - - - - 16,560 69,039 Community development - 8,183,386 5,700 - - - - Total expenditures - 8,183,386 5,700 1,846,644 - 16,560 69,039 Excess (deficiency) of revenues
over expenditures 27,442 129,453 (262) (568,817) 777 367,405 5,970 Other financing sources (uses):

SBITA - - - - - - - Transfers in - - - 568,817 - - - Transfers out - - - - - (38,260) - Net change in fund balances 27,442 129,453 (262) - 777 329,145 5,970 Fund balances, July 1, 2023 992,035 445,162 12,066 - 21,273 1,654,955 341,803 Fund balances, June 30, 2024 1,019,477$ 574,615 $ 11,804 $ - $ 22,050$ 1,984,100 $ 347,773 $ Year ended June 30, 2024

CITY OF TORRANCE, CALIFORNIA
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds
124
157
Greenwood
Park
Improvement
Replacement
Fund
Proposition A
Fund
Proposition C
Fund
Measure R
Local Return
and Highway
Fund
Measure M
Local Return
and Grant Fund
Measure W
Fund
Grants and
Donations Fund
Special Deposits
Fund
Vanpool
Rideshare Fund
-$ - $ - $ - $ - $ - $ - $ - $ - $ - - - - - - - - - - - - - - - - - - 362 183,518 317,259 249,562 233,377 280,831 36,544 - - - 3,829,841 3,289,571 4,874,116 2,931,228 2,160,379 9,928,441 - 33,033 - - - - - - 219,863 - 35,015 362 4,013,359 3,606,830 5,123,678 3,164,605 2,441,210 10,184,848 - 68,048 - - - - - - 2,436,402 - - -
- - - - - 2,054,442 - - - - 1,159,595 1,581,894 1,649,295 1,762,573 619,958 - - - - - - - - 236,600 - - - - - - - - 94,182 - 210,150 - - 1,159,595 1,581,894 1,649,295 1,762,573 5,441,584 - 210,150 362 4,013,359 2,447,235 3,541,784 1,515,310 678,637 4,743,264 - (142,102) - - - - - - - - - - - - - - - 406,364 - 142,102 - (3,000,000) (322,102) - - - - - - 362 1,013,359 2,125,133 3,541,784 1,515,310 678,637 5,149,628 - - 9,911 4,449,543
6,942,723 229,888 5,290,411 7,421,632 1,471,400 - - 10,273$ 5,462,902$ 9,067,856$ 3,771,672$ 6,805,721$ 8,100,269$ 6,621,028$ -$ -$ (continued)
125
158
Bicycle
Transportation
Fund
Low Mod
Housing Fund
Development
Impact Fund
Geologic
Hazard
Abatement Fund
State Gas
Tax Street
Improvement
Fund
Environmental
Fund
Air Quality
Management
District
Fund
Revenues:

Taxes -$ - $ - $ - $ - $ - $ - $ Licenses, fees and permits - - 1,749,427 - - - - Fines, forfeitures and penalties - - - - - - - Use of money and property - 168,411 178,881 - 580,093 5,664 13,843 Intergovernmental 106,598 - - - 7,744,007 - 192,470 Other revenues - - - - - - - Total revenues 106,598 168,411 1,928,308 - 8,324,100 5,664 206,313 Expenditures:

General government - - - - - - - Public safety - - 145,717 - - - - Public works 106,598 -
84,233 - 903,693 - 154,656 Culture and recreation - - - - - - - Community development - 54,794 - - - - - Total expenditures 106,598 54,794 229,950 - 903,693 - 154,656 Excess (deficiency) of revenues
over expenditures - 113,617 1,698,358 - 7,420,407 5,664 51,657 Other financing sources (uses):

SBITA - - - - - - - Transfers in - - - - - - - Transfers out - - - - (3,242,538) - - Net change in fund balances - 113,617 1,698,358 - 4,177,869 5,664 51,657 Fund balances, July 1, 2023 - 3,987,530 1,760,369 14,317 14,120,919 155,136 452,516 Fund balances, June 30, 2024 -$ 4,101,147$ 3,458,727 $ 14,317 $ 18,298,788$ 160,800 $ 504,173 $ (continued)
Year ended June 30, 2024
Nonmajor Special Revenue Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances

CITY OF TORRANCE, CALIFORNIA
126
159
Meadow Park
Parking Lot
District
Fund
Police
Inmate Welfare
Fund
Community
Development
Block Grant
Fund
Federal Housing
and
Rehabilitation
Fund
Asset Forfeiture
Fund
Proposition
1B
Fund
DNA
Sampling
Fund
Torrance
Tourism
Business
Improvement
District Fund
Total
Nonmajor Special
Revenue
Funds
-$ - $ - $ - $ - $ - $ - $ - $ 1,277,827 - - - - - - - - 2,079,820 - 83,862 - - 158,440 - - - 242,302 50,248 - - - 90,812 - - - 2,568,742 - - 840,796 - - - - - 44,202,958 - 258 - - - - 6,120 - 284,518 50,248 84,120 840,796 - 249,252 - 6,120 - 50,656,167 - - - - - - - - 2,436,402 - 74,616 - - 622,190 - - - 2,896,965 - - 830,305 - - - - - 10,699,444 - - - - - - - - 322,199 24,793 - - - - - - - 8,573,005 24,793 74,616 830,305 - 622,190 - - - 24,928,015 25,455 9,504 10,491 - (372,938) - 6,120 - 25,728,152 - - - - - - - - - - - - - - - - - 1,117,283 - - - - - - - - (6,602,900) 25,455 9,504 10,491 - (372,938) - 6,120 - 20,242,535 239,566 29,202 (75,344) 777,556 2,911,626 - 70,598 - 53,726,793 265,021$ 38,706$ (64,853)$ 777,556$ 2,538,688$ -$ 76,718$ -$ 73,969,328$ 127
160
Variance with
Original Final Actual Final Budget

REVENUES
Intergovernmental 7,786,880$ 8,471,903 $ 8,272,478 $ (199,425) $ Use of money and property 5,500 5,500 18,712 13,212 Other revenues 16,000 16,000 21,649 5,649 Total revenues 7,808,380 8,493,403 8,312,839 (180,564)

EXPENDITURES
Current:

Community development 7,172,191 8,367,410 8,183,386 184,024 Total expenditures 7,172,191 8,367,410 8,183,386 184,024 Excess (deficiency) of revenues over expenditures 636,189 125,993 129,453 3,460 Net change in fund balances 636,189 125,993 129,453 3,460 Fund balances - beginning 445,162 445,162 445,162 - Fund balances - ending 1,081,351$ 571,155$ 574,615$ 3,460$ Budgeted Amounts

CITY OF TORRANCE, CALIFORNIA
Rental Assistance Program Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual For the Year Ended June 30, 2024
128
161
Variance with
Original Final Actual Final Budget

REVENUES
Taxes 1,290,101$ 1,290,101 $ 1,277,827 $ (12,274) $ Total revenues 1,290,101 1,290,101 1,277,827 (12,274)

EXPENDITURES
Current:

Public works 1,806,995 1,806,995 1,846,644 (39,649) Total expenditures 1,806,995 1,806,995 1,846,644 (39,649) Excess (deficiency) of revenues over expenditures (516,894) (516,894) (568,817) (51,923)

OTHER FINANCING SOURCES (USES)
Transfers in 516,894 516,894 568,817 51,923 Total other financing sources (uses) 516,894 516,894 568,817 51,923 Net change in fund balances - - - - Fund balances - beginning - - - - Fund balances - ending -$ - $ - $ - $ Budgeted Amounts

CITY OF TORRANCE, CALIFORNIA
Street Lighting District Assessment Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual For the Year Ended June 30, 2024
129
162
Variance with
Original Final Actual Final Budget

REVENUES
Intergovernmental 34,825$ 34,825 $ 33,033 $ (1,792) $ Use of money and property 965 965 - (965) Other revenues 34,650 34,650 35,015 365 Total revenues 70,440 70,440 68,048 (2,392)

EXPENDITURES
Current:

Community development 228,030 228,030 210,150 17,880 Total expenditures 228,030 228,030 210,150 17,880 Excess (deficiency) of revenues over expenditures (157,590) (157,590) (142,102) 15,488

OTHER FINANCING SOURCES (USES)
Transfers in 157,590 157,590 142,102 (15,488) Total other financing sources (uses) 157,590 157,590 142,102 (15,488) Net change in fund balances - - - - Fund balances - beginning - - - - Fund balances - ending -$ -$ -$ -$ Budgeted Amounts

CITY OF TORRANCE, CALIFORNIA
Vanpool Rideshare Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual For the Year Ended June 30, 2024
130
163
Variance with
Original Final Actual Final Budget

REVENUES
Use of money and property 90,000$ 90,000 $ 168,411 $ 78,411 $ Total revenues 90,000 90,000 168,411 78,411

EXPENDITURES
Current:

Community development 61,780 61,780 54,794 6,986 Total expenditures 61,780 61,780 54,794 6,986 Excess (deficiency) of revenues over expenditures 28,220 28,220 113,617 85,397 Net change in fund balances 28,220 28,220 113,617 85,397 Fund balances - beginning 3,987,530 3,987,530 3,987,530 - Fund balances - ending 4,015,750$ 4,015,750$ 4,101,147$ 85,397$ Budgeted Amounts

CITY OF TORRANCE, CALIFORNIA
Low Mod Housing Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual For the Year Ended June 30, 2024
131
164
Variance with
Original Final Actual Final Budget

REVENUES
Use of money and property 43,203$ 43,203 $ 50,248 $ 7,045 $ Total revenues 43,203 43,203 50,248 7,045

EXPENDITURES
Current:

Community development 32,203 32,203 24,793 7,410 Total expenditures 32,203 32,203 24,793 7,410 Excess (deficiency) of revenues over expenditures 11,000 11,000 25,455 14,455 Net change in fund balances 11,000 11,000 25,455 14,455 Fund balances - beginning 239,566 239,566 239,566 - Fund balances - ending 250,566$ 250,566 $ 265,021 $ 14,455 $ Budgeted Amounts

CITY OF TORRANCE, CALIFORNIA
Meadow Park Parking Lot District Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual For the Year Ended June 30, 2024
132
165

NON-MAJOR CAPITAL

PROJECT FUNDS
The Capital Project funds are used to account for resources used for the acquisition or construction of major capital facilities, except for those financed by certain Special Revenue and Proprietary Funds.

The CAPITAL IMPROVEMENT FUND

is used to account for construction of street improvements, storm drain and building improvements and other capital projects within the City.

The TORRANCE PUBLIC PROPERTY FINANCING CAPITAL PROJECT FUND

is used to account for construction of capital
improvements related to an emergency operation center and any other public capital improvements selected by the City.

ANNUAL COMPREHENSIVE FINANCIAL REPORT
166
Capital
Improvement
Fund
Torrance
Public Property
Financing
Capital Project
Fund
Total Nonmajor
Capital Projects
Funds
Assets
Pooled cash and investments 15,518,120$ - $ 15,518,120$ Cash and cash equivalents with fiscal agents - 3,657,077 3,657,077 Total assets 15,518,120$ 3,657,077$ 19,175,197$ Liabilities and Fund Balances
Liabilities:

Accounts payable 917,522$ -$ 917,522$
Accounts payable - contract retention 57,685 1,473 59,158 Accrued liabilities 119,298 - 119,298
Due to other funds - 68,192 68,192
Deposits and guarantees 158,056 - 158,056
Total liabilities 1,252,561 69,665 1,322,226
Fund balances:

Assigned to capital projects 14,265,559 3,587,412 17,852,971 Total fund balances 14,265,559 3,587,412 17,852,971 Total liabilities and fund balances 15,518,120$ 3,657,077$ 19,175,197$

CITY OF TORRANCE, CALIFORNIA
Combining Balance Sheet
Nonmajor Capital Project Funds
June 30, 2024
133
167
Capital
Improvement
Fund
Torrance
Public Property
Financing
Capital Project
Fund
Total Nonmajor
Capital Projects Funds
Revenues:

Use of money and property 3,000$ 205,504$ 208,504$ Total revenues 3,000 205,504 208,504 Expenditures:

General government 2,648,664 - 2,648,664 Public safety 506,074 130,495 636,569 Public works 741,853 - 741,853 Culture and recreation 269,268 - 269,268 Community development 101,924 - 101,924 Total expenditures 4,267,783 130,495 4,398,278 Excess (deficiency) of revenues
over (under) expenditures (4,264,783) 75,009 (4,189,774) Other financing sources:

SBITA 113,760 - 113,760 Transfers in 6,651,881 - 6,651,881 Total other financing sources 6,765,641 - 6,765,641 Net change in fund balances 2,500,858 75,009 2,575,867 Fund balances, July 1, 2023 11,764,701 3,512,403 15,277,104 Fund balances, June 30, 2024 14,265,559$ 3,587,412$ 17,852,971$

CITY OF TORRANCE, CALIFORNIA
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Capital Project Funds
Year ended June 30, 2024
134
168

NON-MAJOR DEBT

SERVICE FUND
The Debt Service funds are used to account for the accumulation of resources for, and the payment of, principal and interest on specific long-term obligations of the City.

The TORRANCE PUBLIC PROPERTY FINANCING DEBT SERVICE FUND

is used to account for debt service related to certificates of participation and lease revenue bonds issued to provide for the refinance of a lease obligation that financed certain facilities and capital improvements within the City and the acquistion of real property for a regional transit center, and for the refinance of a portion of the unfunded accrued liability of the City’s pension plans with CalPERS.

ANNUAL COMPREHENSIVE FINANCIAL REPORT
169
(T
his page intentionally left blank)
135
170
Torrance
Public Property
Financing
Debt Service
Fund
Total
Nonmajor
Debt Service
Fund
Assets
Cash and cash equivalents with fiscal agents 6,808$ 6,808 $ Total assets 6,808$ 6,808 $
Liabilities and Fund Balances
Liabilities -$ - $
Total liabilities - -
Fund balances:

Restricted - debt service 6,808 6,808 Total fund balances 6,808 6,808
Total liabilities and fund balances 6,808$ 6,808 $

CITY OF TORRANCE, CALIFORNIA
Combining Balance Sheet
Nonmajor Debt Service Fund
June 30, 2024
136
171
Torrance
Public Property
Financing
Debt Service
Fund
Total
Nonmajor
Debt Service
Fund
Revenues:

Use of money and property $ 22,593,694 $ 22,593,694 Total revenues 22,593,694 22,593,694 Expenditures:

Debt Service:

Principal retirement 9,955,000 9,955,000 Interest and fiscal charges 12,638,178 12,638,178 Total expenditures 22,593,178 22,593,178 Excess (deficiency) of revenues
over (under) expenditures 516 516 Net change in fund balances 516 516 Fund balances, July 1, 2023 6,292 6,292 Fund balances, June 30, 2024 $ 6,808 $ 6,808

CITY OF TORRANCE, CALIFORNIA
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Debt Service Fund
Year ended June 30, 2024
137
172
Variance with
Original Final Actual Final Budget

REVENUES
Use of money and property 22,593,178$ 22,593,178 $ 22,593,694 $ 516$ Total revenues 22,593,178 22,593,178 22,593,694 516

EXPENDITURES
Debt service:

Principal retirement 9,955,000 9,955,000 9,955,000 - Interest and fiscal charges 12,638,178 12,638,178 12,638,178 - Total expenditures 22,593,178 22,593,178 22,593,178 - Excess (deficiency) of revenues over expenditures - - 516 516 Net change in fund balances - - 516 516 Fund balances - beginning 6,292 6,292 6,292 - Fund balances - ending 6,292$ 6,292$ 6,808$ 516$ Budgeted Amounts

CITY OF TORRANCE, CALIFORNIA
Torrance Public Property Financing Debt Service Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual For the Year Ended June 30, 2024
138
173

NON-MAJOR ENTERPRISE
FUND
The Enterprise Funds are used to account for City operations that are financed and operated in a manner similar to private business enterprises, where the costs of providing these services to the general public on a continuing basis are financed primarily through user charges.

The

SANITATION FUND

is used to account for the City’s refuse, recycling, and green waste programs.

ANNUAL COMPREHENSIVE FINANCIAL REPORT
174
(T
his page intentionally left blank)
139
175
Sanitation
Fund
Total
Nonmajor
Enterprise
Fund
Assets and Deferred Outflows of Resources
Current assets:

Pooled cash and investments 8,171,904$ 8,171,904 $ Accounts receivable 4,257,596 4,257,596
Accrued interest receivable 107,243 107,243 Due from other governments 1,857 1,857 Prepaids 41,567 41,567
Total current assets 12,580,167 12,580,167 Noncurrent assets:

Capital assets, net 3,651,889 3,651,889
Total noncurrent assets 3,651,889 3,651,889 Deferred outflows of resources:

Deferred pension amounts 1,977,367 1,977,367 Deferred OPEB amounts 364,202 364,202 Total deferred outflows of resources 2,341,569 2,341,569 Total Assets and Deferred Outflows of Resources 18,573,625 18,573,625 Liabilities and Deferred Inflows of Resources
Current liabilities:

Accounts payable 432,984 432,984
Accrued interest payable 50,699 50,699 Accrued liabilities 83,046 83,046
Compensated absences payable - current 75,511 75,511 Total current liabilities 642,240 642,240 Noncurrent liabilities:

Compensated absences payable - long term 214,916 214,916 Total pension liability 3,534,229 3,534,229 Total OPEB liability 925,210 925,210
Total noncurrent liabilities 4,674,355 4,674,355 Deferred inflows of resources:

Deferred pension amounts 98,602 98,602 Deferred OPEB amounts 42,329 42,329 Total deferred inflows of resources 140,931
140,931
Total Liabilities and Deferred Inflows of Resources 5,457,526 5,457,526 Net Position
Net investment in capital assets 3,651,889 3,651,889 Unrestricted 9,464,210 9,464,210
Total Net Position 13,116,099$ 13,116,099$

CITY OF TORRANCE, CALIFORNIA
Combining Statement of Net Position
Nonmajor Enterprise Fund
June 30, 2024
140
176
Sanitation
Fund
Total
Nonmajor
Enterprise
Fund
Operating revenues:

Charges for services 15,766,963$ 15,766,963$ Other 136,104 136,104
Total operating revenues 15,903,067 15,903,067 Operating expenses:

Salaries and employee benefits 4,542,394 4,542,394 Services and supplies 2,945,215 2,945,215 Other professional services 3,958,636 3,958,636 Depreciation and amortization 873,796 873,796 Insurance and claims 41,780 41,780 City charges 3,211,434 3,211,434
Other 98,753 98,753
Total operating expenses 15,672,008 15,672,008 Operating income 231,059 231,059
Nonoperating revenues:

Investment earnings 153,716 153,716 Gain (loss) on sale of capital assets 12,500 12,500 Grants 398,140 398,140
Interest expense - -
Total nonoperating revenues 564,356 564,356 Income before transfers 795,415 795,415 Transfers in 351,768 351,768
Transfers out (1,230,994) (1,230,994)
Change in net position (83,811) (83,811) Total net position - July 1, 2023 13,199,910 13,199,910 Total net position - June 30, 2024 13,116,099$ 13,116,099 $

CITY OF TORRANCE, CALIFORNIA
Combining Statement of Revenues, Expenses and Changes in Fund Net Position Nonmajor Enterprise Fund
Year ended June 30, 2024
141
177
Sanitation
Fund
Total
Nonmajor
Enterprise
Fund
Cash flows from operating activities:

Receipts from customers 15,974,437$ 15,974,437 $ Cash payments to suppliers for goods and services (10,773,248) (10,773,248) Cash payments to employees for services (3,955,812) (3,955,812) Other receipts 136,104 136,104
Net cash provided by operating activities 1,381,481 1,381,481 Cash flows from noncapital financing activities:

Cash received from noncapital grants and subsidies 398,140 398,140 Cash received from other funds 351,768 351,768 Cash paid to other funds (1,230,994) (1,230,994) Net cash provided by noncapital financing activities (481,086) (481,086) Cash flows from capital financing activities:

Cash payments for capital additions (456,946) (456,946) Proceeds from sale of capital assets 12,500 12,500 Net cash used in capital financing activities (444,446) (444,446) Cash flows from investing activities:

Cash received from interest on investments 129,822 129,822 Cash provided by investing activities 129,822 129,822 Net increase in cash, restricted cash and
cash equivalents 585,771 585,771
Cash and cash equivalents, July 1, 2023 7,586,133 7,586,133 Cash and cash equivalents, June 30, 2024 8,171,904$ 8,171,904$ Reconciliation of operating income to net cash
provided by operating activities:

Operating income 231,059$ 231,059
Adjustments to reconcile operating income to net cash provided by operating activities:

Depreciation and amortization 873,796 873,796 Changes in assets and liabilities:

Accounts receivable 207,474 207,474
Prepaids and other assets (40,324) (40,324) Accounts payable 219,165 219,165
Accrued salaries and benefits (8,496) (8,496) Other accrued liabilities (696,271) (696,271) Deferred outflows related to pensions 530,915 530,915 Deferred outflows related to OPEB (211,470) (211,470) Total pension liability 162,508 162,508 Total OPEB liability 240,354 240,354 Deferred inflows related to pensions (109,063) (109,063) Deferred inflows related to OPEB (18,166) (18,166) Net cash provided by operating activities 1,381,481$ 1,381,481$

CITY OF TORRANCE, CALIFORNIA
Combining Statement of Cash Flows
Nonmajor Enterprise Fund
Year ended June 30, 2024
142
178

INTERNAL SERVICE
FUNDS

ANNUAL COMPREHENSIVE FINANCIAL REPORT
The Internal Service funds are used to account for financing of goods or services provided by one City department to other departments of the City and to other governmental units on a cost-reimbursement basis.

The

SELF-INSURANCE FUND

is used to finance and account for the City’s risk management and self-insurance programs.

The

FLEET SERVICES FUND

is used to finance and account for the City’s vehicular equipment.

The POSTEMPLOYMENT/COMP ABSENCES FUND

is used to account for interfund charges to the City’s departments for postemployment benefits and compensated absences.
179
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his page intentionally left blank)
143
180
Self-Insurance
Fund
Fleet Services
Fund
Postemployment/
Comp Absences
Fund
Total
Internal Service
Funds
Assets and Deferred Outflows of Resources
Current assets:

Pooled cash and investments 20,525,495$ 37,704,973$ 5,892,356$ 64,122,824$ Cash and cash equivalents with fiscal agents 1,016,231 - - 1,016,231 Accounts receivable 52,239 - 4,323,690 4,375,929 Accrued interest receivable - 263,199 49,283 312,482 Prepaids - 344,962 - 344,962 Inventory - 1,458,789 - 1,458,789 Total current assets 21,593,965 39,771,923 10,265,329 71,631,217 Noncurrent assets:

Capital assets, net - 9,127,698 - 9,127,698 Total noncurrent assets - 9,127,698 - 9,127,698 Deferred outflows of resources:

Deferred pension amounts 138,484 1,654,237 - 1,792,721 Deferred OPEB amounts 24,280 315,642 - 339,922 Total deferred outflows of resources 162,764 1,969,879 - 2,132,643 Total Assets and Deferred Outflows of Resources 21,756,729 50,869,500 10,265,329 82,891,558 Liabilities and Deferred Inflows of Resources
Current liabilities:

Accounts payable 301,486 179,554 67,287 548,327 Contract retainage payable - 71,775 - 71,775 Compensated absences payable - 369,119 9,414,357 9,783,476 Accrued interest payable - 18,715 - 18,715 Accrued liabilities 5,729,667 370,096 - 6,099,763 SBITA liablity - current - 54,494 - 54,494 Accrued liability for self-insurance claims - current 12,333,118 - - 12,333,118 Total current liabilities 18,364,271 1,063,753 9,481,644 28,909,668 Noncurrent liabilities:

SBITA liability - long term - 224,271 - 224,271 Accrued liability for self-insurance claims - long-term 55,146,636 - - 55,146,636 Total pension liability 230,524 2,996,340 - 3,226,864 Total OPEB liability 61,681 801,849 - 863,530 Total noncurrent liabilities 55,438,841 4,022,460 - 59,461,301 Deferred inflows of resources:

Deferred pension amounts 7,043 82,169 - 89,212 Deferred OPEB amounts 2,822 36,685 - 39,507 Total deferred inflows of resources 9,865 118,854 - 128,719 Total Liabilities and Deferred Inflows of Resources 73,812,977 5,205,067 9,481,644 88,499,688 Net Position
Net position:

Net investment in capital assets - 9,055,923 - 9,055,923 Unrestricted (52,056,248) 36,608,510 783,685 (14,664,053) Total Net Position (52,056,248)$ 45,664,433$ 783,685$ (5,608,130)$

CITY OF TORRANCE, CALIFORNIA
Combining Statement of Net Position
Internal Service Funds
June 30, 2024
144
181
Self-Insurance
Fund
Fleet Services
Fund
Postemployment/
Comp Absences
Fund
Total
Internal Service
Funds
Operating revenues:

Charges for services 20,928,013$ 10,319,308$ -$ 31,247,321$ Other 142,795 4,126 - 146,921 Total operating revenues 21,070,808 10,323,434 - 31,394,242 Operating expenses:

Salaries and employee benefits 883,015 3,802,152 - 4,685,167 Services and supplies 7,097 1,629,605 - 1,636,702 Other professional services 445,142 130,474 - 575,616 Insurance and claims 19,504,753 - - 19,504,753 Depreciation and amortization - 1,575,065 - 1,575,065 City charges 205,161 1,001,375 - 1,206,536 Other 11,745 46,772 - 58,517 Total operating expenses 21,056,913 8,185,443 - 29,242,356 Operating income (loss) 13,895 2,137,991 - 2,151,886 Nonoperating revenues (expenses):

Investment earnings - 1,384,855 256,864 1,641,719 Gain on sale of capital assets - 84,150 - 84,150 Total nonoperating revenues (expenses) - 1,469,005 256,864 1,725,869 Net income (loss) before transfers 13,895 3,606,996 256,864 3,877,755
Transfers in 2,000,000 2,200,000 - 4,200,000 Transfers out (4,354) (23,172) - (27,526) Change in net position 2,009,541 5,783,824 256,864 8,050,229 Net position, July 1, 2023 (54,065,789) 39,880,609 526,821 (13,658,359) Net position, June 30, 2024 (52,056,248)$ 45,664,433$ 783,685$ (5,608,130)$

CITY OF TORRANCE, CALIFORNIA
Combining Statement of Revenues, Expenses and Changes in Fund Net Position Internal Service Funds
Year ended June 30, 2024
145
182
Self Insurance
Fund
Fleet Services
Fund
Postemployment/
Comp Absences
Fund
Total
Internal Service
Funds
Cash flows from operating activities:

Receipts from customers 21,860,302$ 10,319,308$ (130,844)$ 32,048,766$ Cash payments to suppliers for goods and services (15,934,935) (3,401,216) 42,433 (19,293,718) Cash payments to employees for services (836,094) (3,245,033) 665,780 (3,415,347) Other receipts 142,795 4,126 - 146,921 Net cash provided by (used in) operating activities 5,232,068 3,677,185 577,369 9,486,622 Cash flows from noncapital financing activities:

Cash received from other funds 2,000,000 2,200,000 - 4,200,000 Cash transfers paid to other funds (4,354) (23,172) - (27,526) Net cash provided by (used in) noncapital financing activities 1,995,646 2,176,828 - 4,172,474 Cash flows from capital financing activities:

Cash payments for capital additions - (4,976,060) - (4,976,060) Proceeds from sale of capital assets - 84,150 - 84,150 Net cash provided by (used in) capital financing activities - (4,891,910) - (4,891,910) Cash flows from investing activities:

Cash received from interest on investments - 1,258,452 242,147 1,500,599 Net cash provided by (used in) investing activities - 1,258,452 242,147 1,500,599 Net increase (decrease) in cash, restricted cash and
cash equivalents 7,227,714 2,220,555 819,516 10,267,785 Cash and cash equivalents, July 1, 2023 14,314,012 35,484,418 5,072,840 54,871,270 Cash and cash equivalents, June 30, 2024 21,541,726$ 37,704,973$ 5,892,356$ 65,139,055$ Reconciliation of cash and cash equivalents:

Pooled cash and investments 20,525,495$ 37,704,973$ 5,892,356$ 64,122,824$ Cash and cash equivalents with fiscal agents 1,016,231 - - 1,016,231 Total cash and cash equivalents 21,541,726$ 37,704,973$ 5,892,356$ 65,139,055$ Reconciliation of operating income to net cash provided by (used in) operating activities:

Operating income 13,895$ 2,137,991$ -$ 2,151,886$ Adjustments to reconcile operating income to net
cash provided by (used in) operating activities:

Depreciation and amortization - 1,575,065 - 1,575,065 Changes in assets and liabilities:

Accounts receivable 932,289 - (130,844) 801,445 Prepaids and other assets 240,687 (344,962) - (104,275) Inventory - (55,637) - (55,637) Accounts payable (360,102) (475,144) 42,433 (792,813) Accrued salaries and benefits 5,295 58,927 665,780 730,002 Other accrued liabilities 4,358,378 282,753 - 4,641,131 Deferred outflows related to pension 36,594 445,530 - 482,124 Deferred outflows related to OPEB (14,098) (183,275) - (197,373) Total pension liability 11,790 134,998 - 146,788 Total OPEB liability 16,024 208,308 - 224,332 Deferred inflows related to pension (7,473) (91,625) - (99,098) Deferred inflows related to OPEB (1,211) (15,744) - (16,955) Net cash provided by (used in) operating activities 5,232,068$ 3,677,185$ 577,369$ 9,486,622$

CITY OF TORRANCE, CALIFORNIA
Combining Statement of Cash Flows
Internal Service Funds
Year ended June 30, 2024
146
183

CUSTODIAL FUNDS

ANNUAL COMPREHENSIVE FINANCIAL REPORT
The Custodial funds are used to account for assets held by the City in a fiduciary capacity for individuals, governmental entities and others.

The AREA G CITIZEN CORPS PROGRAM FUND

is used to account for Area G cities’ contributions to finance the community emergency response teams.

The FLEXIBLE BENEFITS FUND

is used to account for unspent pre-tax benefits funds collected from the participating employees of the City.

The PROPERTY ROOM EVIDENCE FUND

is used to account for the safekeeping and disbursement of evidence held in the Police property room.

The

INTEROPERABILITY NETWORK OF THE SOUTH BAY FUND

is used to account for funds contributed by Network member cities to enhance the public safety and general government land mobile radio capabilities of its members by developing and managing a wide-area interoperable government communications network. 184
Area G Citizen
Corps Program
Fund
Flexible
Benefits
Fund
Property
Room
Evidence Fund
Interoperability
Network of
the South Bay
Fund
Total
Custodial
Funds
Assets
Pooled cash and investments -$ 370,761$ 1,433,831$ 855,214$ 2,659,806$ Accounts receivable 403,576 - - 82,944 486,520 Accrued interest receivable - - - 5,974 5,974
Due from other governments 133,612 - - - 133,612 Prepaids 101,826 - - - 101,826
Capital assets, net - - - 299,845 299,845
Total assets 639,014 370,761 1,433,831 1,243,977 3,687,583 Liabilities
Accounts payable 16,156 - 3,034 - 19,190
Deposits payable - 370,761 - - 370,761
Advances from City 61,440 - - - 61,440
Unearned revenue - - - 176,028 176,028
Total liabilities 77,596 370,761 3,034 176,028 627,419 Net Position
Restricted for individuals and organizations 561,418 - 1,430,797 1,067,949 3,060,164 Total net position 561,418$ -$ 1,430,797$ 1,067,949$ 3,060,164$

CITY OF TORRANCE, CALIFORNIA
Combining Statement of Fiduciary Net Position - Custodial Funds June 30, 2024
147
185
Area G Citizen
Corps Program
Fund
Flexible
Benefits
Fund
Property
Room
Evidence Fund
Interoperability
Network of
the South Bay
Fund
Total
Custodial
Funds
Additions
Contributions 587,263$ -$ -$ 630,000$ 1,217,263$ Fees - - - 20,605 20,605 Use of money and property 2,032 - - 26,723 28,755 Other - - - - - Total additions 589,295 - - 677,328 1,266,623 Deductions
Salaries and employee benefits 181,286 - - - 181,286 Services and supplies 32,680 - - - 32,680 Other professional services 353,247 - - 369,523 722,770 Insurance and claims 7,094 - - 27,923 35,017 Depreciation and amortization - - - 116,824 116,824 Membership fees 545 - - 77,200 77,745 Payments to others - - 14,295 - 14,295 Total deductions 574,852 - 14,295 591,470 1,180,617 Change in net position 14,443 - (14,295) 85,858 86,006 Net position, July 1, 2023 546,975 - 1,445,092 982,091 2,974,158 Net position, June 30, 2024 561,418$ -$
1,430,797$ 1,067,949$ 3,060,164$

CITY OF TORRANCE, CALIFORNIA
Combining Statement of Changes in Fiduciary Net Position - Custodial Funds Year ended June 30, 2024
148
186

STATISTICAL SECTION

ANNUAL COMPREHENSIVE FINANCIAL REPORT
(Not covered by Independent Auditors’ Report)
187
Overview of Statistical information Presented in Five Categories Financial Trend Information:

Intended to assist users in understanding and assessing how a government's financial position has changed over time.
151
Revenue Capacity Information:

Intended to assist users in unders tanding and assessing the factors affecting a government's ability to generate its own revenue. 156
Debt Capacity Information:

Intended to assist users in understanding and assessing a government's debt burden and its ability to issue additional debt. 163
Demographic and Economic Information:

Intended to assist users in understanding the socioeconomic environment within which a government operates and to provide information that facilitates co mparison of financial statement information over time and among governments.
168
Operating Information:

Intended to provide information about a government's operations and resources in order to assist r eaders in using financial statement information to understand and assess a government's economic condition.
170
149
188

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150
189
City of Torrance
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts in thousands)
Financial Trends
Exhibit 1
2024 2023 2022 2021 2020 2019 2018 2017 2016 2015
Governmental activities
Net investment in capital assets 330,710 $ 326,844 $ 310,909 $ 294,482 $ 286,532 $ 279,740 $ 272,707 $ 269,819 $ 272,391 $ 275,454 $ Restricted 105,050 60,773 52,988 41,942 42,561 46,401 45,389 45,987 49,306 41,882 Unrestricted (403,843) (393,476) (441,505) (498,999) (432,413) (372,163) (354,180) (280,023) (295,513) (299,768) Total governmental activities net position 31,917 $ (5,859)$ (77,608)$ (162,575)$ (103,320)$ (46,022)$ (36,084)$ 35,783 $ 26,184 $ 17,568 $ Business-type activities
Net investment in capital assets 167,132 $ 163,294 $ 158,220 $ 164,410 $ 155,891 $ 148,541 $ 153,167 $ 156,096 $ 157,593 $ 142,408 $ Restricted 32,296 31,197 21,482 - - - - - - - Unrestricted 87,703 78,638 67,823 47,888 (18,914) (24,541) (21,247) (7,868) (8,181) (19,433) Total business-type activities net position 287,131 $ 273,129 $ 247,525 $ 212,298 $ 136,977 $ 124,000 $ 131,920 $ 148,228 $ 149,412 $ 122,975 $ Primary government
Net investment in capital assets 497,842 $ 490,138 $ 469,129 $ 458,892 $ 442,423 $ 428,281 $ 425,874 $ 425,915 $ 429,984 $ 417,862 $ Restricted 137,346 91,970 74,470 41,942 42,561 46,401 45,389 45,987 49,306 41,882 Unrestricted (316,140) (314,838) (373,682) (451,111) (451,327) (396,704) (375,427) (287,891) (303,694) (319,201) Total primary government net position 319,048 $ 267,270 $ 169,917 $ 49,723 $ 33,657 $ 77,978 $ 95,836 $ 184,011 $ 175,596 $ 140,543 $ Fiscal Year
151
190
City of Torrance
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts in thousands)
Financial Trends
Exhibit 2
2024 2023 2022 2021 2020 2019 2018 2017 2016 2015
Expenses
Governmental activities:

General government 44,824 $ 38,888 $ 28,428 $ 27,553 $ 37,573 $ 35,459 $ 34,122 $ 27,838 $ 31,259 $ 28,474 $ Public safety 183,968 154,605 124,495 156,247 144,525 121,502 120,281 114,081 99,020 102,909 Public works 31,249 31,733 24,239 27,885 35,308 29,536 29,408 26,807 28,259 23,908 Culture and recreation 26,074 22,162 19,754 26,142 21,947 18,502 20,100 17,388 15,373 17,212 Community development 18,824 15,476 13,509 11,134 18,096 16,896 16,384 10,621 10,433 10,172 Interest on long-term debt 12,984 13,007 15,615 10,633 2,533 2,579 2,619 2,826 2,664 2,867 Total governmental activities expenses 317,923 275,871 226,040 259,594 259,982 224,474 222,914 199,561 187,008 185,542 Business-type activities:

Municipal Airport 7,151 3,848 2,612 3,223 3,386 3,374 3,542 3,425 3,433 3,301 Transit System 34,263 29,121 26,684 25,640 30,833 39,162 29,574 27,702 24,156 24,932 Water 48,543 46,405 41,263 41,465 39,090 43,294 38,323 35,447 31,843 34,414 Sewer 4,588 4,750 4,543 5,666 4,991 5,264 5,892 5,086 5,509 5,397 Sanitation 15,672 12,477 11,611 13,015 12,873 12,369 16,722 11,620 10,856 10,981 Cultural Arts Center - - - - 2,252 2,300 2,357 2,119 1,971 2,087 Parks and Recreation - - - - 7,099 7,602 7,456 7,080 6,864 6,638 Emergency Medical Services - - - - 16,854 13,824 14,154 12,422 11,141 11,060 Total business-type activities expenses 110,217 96,601 86,713 89,009 117,378 127,189 118,020 104,901 95,773 98,810 Total primary government expenses 428,140 $ 372,472 $ 312,753 $ 348,603 $ 377,360 $ 351,663 $ 340,934 $ 304,462 $ 282,781 $ 284,352 $ Program Revenues
Governmental activities:

Charges for services:

General government 2,383 $ 2,489 $ 1,867 $ 890 $ 1,000 $ 1,303 $ 495 $ 414 $ 464 $ 450 $ Public safety 12,066 9,284 8,625 3,704 2,037 2,520 8,576 8,475 8,192 7,433 Public works 1,628 501 426 216 216 631 1,819 1,164 926 867 Culture and recreation 5,706 5,211 4,364 2,093 600 635 577 641 628 667 Community development 11,984 10,955 10,040 8,777 6,208 7,272 - - - - Operating grants and contributions 13,618 11,656 30,483 29,051 17,309 17,226 18,241 17,279 22,097 22,641 Capital grants and contributions 30,924 37,841 29,256 23,246 13,040 9,929 5,248 6,178 7,787 8,927 Total governmental activities program revenues 78,309 77,937 85,061 67,977 40,410 39,516 34,956 34,151 40,094 40,985 Business-type activities:

Charges for services:

Municipal Airport 18,261 22,782 15,663 15,497 14,175 14,173 13,469 12,836 12,754 12,407 Transit System 1,211 960 540 63 3,175 2,743 2,740 2,861 3,165 3,351 Water 53,974 54,255 51,521 49,198 45,553 42,544 41,439 36,848 33,447 35,983 Sewer 6,907 5,899 6,105 6,025 5,712 5,676 5,750 3,783 2,417 2,731 Sanitation 15,903 13,699 13,941 12,920 12,748 12,793 12,368 11,363 11,475 11,360 Cultural Arts Center - - - - 782 1,195 1,186 1,018 934 942 Parks and Recreation - - - - 3,600 4,977 4,731 4,635 4,586 4,521 Emergency Medical Services - - - - 1,493 1,602 1,477 1,093 1,244 901 Operating grants and contributions 25,971 31,544 32,887 32,285 24,588 22,648 18,376 18,809 18,462 19,091 Capital grants and contributions 62 810 942 2,031 2,457 1,608 293 1,081 14,708 2,703 Total business-type activities program revenues 122,289 129,949 121,599 118,019 114,283 109,959 101,829 94,327 103,192 93,990 Total primary government program revenues 200,598 $ 207,886 $ 206,660 $ 185,996 $ 154,693 $ 149,475 $ 136,785 $ 128,478 $ 143,286 $ 134,975 $ Fiscal Year
152
191
City of Torrance
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts in thousands)
Financial Trends
Exhibit 2
2024 2023 2022 2021 2020 2019 2018 2017 2016 2015
Fiscal Year
Net (expense)/revenue
Governmental activities (239,614)$ (197,934)$ (140,979)$ (191,617)$ (219,572)$ (184,958)$ (187,958)$ (165,410)$ (146,914)$ (144,557)$ Business-type activities 12,072 33,348 34,886 29,010 (3,095) (17,230) (16,191) (10,574) 7,419 (4,820) Total primary government net expense (227,542)$ (164,586)$ (106,093)$ (162,607)$ (222,667)$ (202,188)$ (204,149)$ (175,984)$ (139,495)$ (149,377)$ General Revenues and Other Changes in
Net Position
Governmental activities:

Taxes
Property taxes 64,183 $ 61,161 $ 58,219 $ 55,037 $ 52,185 $ 51,984 $ 49,312 $ 46,967 $ 54,348 $ 54,609 $ Sales taxes 85,531 78,590 61,556 52,938 48,332 49,217 47,178 50,133 39,378 33,185 Other taxes 82,886 83,119 73,897 61,753 58,515 65,747 64,371 63,485 60,932 62,481 Investment earnings 35,410 27,927 19,299 4,389 7,310 7,935 4,763 5,001 6,554 6,043 Gain on sale of property - - - - - - - 1,552 - - Loss on disposal of SBITA (16) - - - - - - - - - Motor vehicle tax (unrestricted) 181 151 168 107 117 72 77 66 60 62 Other general revenues 830 4,896 5,170 4,298 4,845 7,651 5,394 4,560 4,898 15,617 Transfers 8,385 13,840 7,982 (4,710) (9,113) (7,586) (7,477) (7,848) (17,996) (6,855) Total governmental activities 277,390 269,684 226,291 173,812 162,191 175,020 163,618 163,916 148,174 165,142 Business-type activities:

Investment earnings 9,735 6,092 3,911 327 1,690 1,521 405 613 811 521 Other general revenues 579 3 40 78 303 204 294 247 212 83 Transfers (8,385) (13,840) (7,982) 4,710 9,113 7,586 7,477 7,848 17,996 6,855

Total business-type activities 1,929 (7,745) (4,031) 5,115 11,106 9,311 8,176 8,708 19,019 7,459 Total primary government general revenues 279,319 $ 261,939 $ 222,260 $ 178,927 $ 173,297 $ 184,331 $ 171,794 $ 172,624 $ 167,193 $ 172,601 $ Change in Net Position
Governmental activities 37,776 $ 71,750 $ 85,312 $ (17,805)$ (57,381)$ (9,938)$ (24,340)$ (1,494)$ 1,260 $ 20,585 $ Business-type activities 14,001 25,603 30,855 34,125 8,011 (7,919) (8,015) (1,866) 26,438 2,639 Total primary government 51,777 $ 97,353 $ 116,167 $ 16,320 $ (49,370)$ (17,857)$ (32,355)$ (3,360)$ 27,698 $ 23,224 $ Notes:
1 Effective February 1, 2012 all redevelopment agencies in the State of California were dissolved. Extraordinary amounts in 2012 represent losses due to write-off of advances to the former redevelopment agency of the City of Torrance and gains due to the transfer of bond debt obligations of the former redevelopment agency of the City of Torrance to a private-purpose Successor Agency Trust Fund. Extraordinary amounts in 2014 represent California Department of Finance adjustment to interest on a long-term advance from the General Fund to the Successor Agency Trust Fund. 153
192
City of Torrance
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
(amounts in thousands)
Financial Trends
Exhibit 3
2024 2023 2022 2021 2020 2019 2018 2017 2016 2015
General fund
Reserved - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ Unreserved - - - - - - - - - - Nonspendable2 2,661 2,145 2,094 2,718 3,395 4,621 4,814 15,485 21,607 21,245 Restricted 31,040 7,025 4,638 2,842 1,333 1,166 788 465 688 580 Assigned 7,684 5,849 5,483 3,768 5,498 7,612 14,809 14,831 15,895 15,470 Unassigned 78,750 63,420 44,727 22,633 581 16,725 16,501 24,079 21,101 29,439 Total general fund 120,135 $ 78,439 $ 56,942 $ 31,961 $ 10,807 $ 30,124 $ 36,912 $ 54,860 $ 59,291 $ 66,734 $ All other governmental funds
Reserved - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ Unreserved, reported in:

Special revenue funds - - - - - - - - - - Capital project funds - - - - - - - - - - Debt service fund - - - - - - - - - - Nonspendable 580 618 607 80 946 4 - - - - Restricted3 74,170 53,190 47,732 39,753 41,477 42,326 40,422 40,729 43,921 40,493 Assigned 17,853 15,277 13,462 14,686 20,061 20,877 22,399 22,887 19,073 14,648 Unassigned3 (774) (75) - - (2,747) - - - - - Total all other governmental funds 91,829 $ 69,010 $ 61,801 $ 54,519 $ 59,737 $ 63,207 $ 62,821 $ 63,616 $ 62,994 $ 55,141 $ Notes:
1The City of Torrance implemented GASB 54 for the fiscal year ended June 30, 2011. Information prior to the implementation of GASB 54 is not required to be restated. 2The change in fund balance in 2013 reflects a prior period adjustment to record transfer of interest related to the long-term advance from the General Fund to the former City of Torrance Redevelopment Agency. The net liabilities are held in a successor agency trust not reported here. In 2014, the California Department of Finance required an adjustment to reduce this interest on long-term advance. 3The change in fund balance in 2012 reflects the former City of Torrance Redevelopment Agency dissolution. The State of California dissolved all redevelopment agencies effective February 1,2012.

Fiscal Year
154
193
City of Torrance
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
(amounts in thousands)
Financial Trends
Exhibit 4
2024 2023 2022 2021 2020 2019 2018 2017 2016 2015
Revenues
Taxes 232,600 $ 222,870 $ 193,672 $ 172,217 $ 162,315 $ 168,084 $ 162,636 $ 161,817 $ 156,103 $ 152,045 $ Licenses, fees and permits 7,337 6,512 6,763 5,655 4,150 5,290 4,106 4,544 3,814 3,140 Fine, forfeitures and penalties 969 918 1,147 668 1,339 1,677 1,019 1,534 1,906 1,608 Investment earnings 36,182 28,753 20,726 4,791 9,180 9,355 6,154 6,082 7,893 7,433 Intergovernmental 44,572 49,575 60,012 50,525 27,073 26,525 23,265 22,897 28,743 32,386 Charges for current services 25,461 21,010 19,058 10,745 5,959 6,304 6,736 5,750 5,392 5,095 Other 981 4,969 1,798 3,928 1,155 4,616 2,000 1,282 2,280 11,141 Total revenues 348,102 334,607 303,176 248,529 211,171 221,851 205,916 203,906 206,131 212,848 Expenditures
General government 36,984 32,231 28,348 41,959 23,023 24,814 22,344 20,387 19,487 20,213 Public safety 151,862 153,790 138,928 413,044 121,693 116,066 109,485 112,160 105,319 103,043 Public works 29,980 47,524 40,894 44,779 32,749 30,526 29,129 30,859 31,958 36,532 Culture and recreation 23,694 21,633 21,812 31,869 17,996 17,657 17,830 17,066 17,115 17,131 Nondepartmental 10,343 5,958 2,151 2,927 5,601 7,619 5,642 6,423 8,656 5,445 Community development 17,276 16,266 15,712 23,765 16,011 15,334 14,725 10,619 10,501 10,459 Capital outlay1 - - - - - - - - - - Debt service
Principal retirement2 9,955 9,330 2,465 435 1,300 1,250 1,215 1,165 1,125 895 Interest and fiscal charges 12,638 12,768 17,838 1,606 2,431 2,477 2,516 2,522 2,599 2,835 Other 218 213 - 4,676 - - - 1,620 - - Total expenditures 292,950 299,713 268,148 565,060 220,804 215,743 202,886 202,821 196,760 196,553 Excess of revenues
over (under) expenditures 55,152 34,894 35,028 (316,531) (9,633) 6,108 3,030 1,085 9,371 16,295 Other financing sources (uses)
Transfers in 22,421 29,217 16,094 356,749 17,249 15,665 20,649 22,980 22,017 16,033 Transfers out (18,209) (40,741) (20,074) (375,288) (30,630) (26,391) (31,668) (35,910) (32,889) (28,029) SBITA 5,150 5,336 - - - - - - - - Proceeds from sale of property - - - - - - - 1,552 - - Proceeds from refunding bonds3 - - - - - - - 22,135 - - Issuance of debt3 - - 1,560 389,240 - - - - - - Premium on refunding bonds 3 - - - - - - - 1,727 - - Bond escrow refunding3 - - - (38,032) - - - (17,378) - - Total other financing
sources (uses) 9,362 (6,188) (2,420) 332,669 (13,381) (10,726) (11,019) (4,894) (10,872) (11,996) Extraordinary gain5 - - - - - - - - - - Net change in fund balances 64,514 $ 28,706 $ 32,608 $ 16,138 $ (23,014)$ (4,618)$ (7,989)$ (3,809)$ (1,501)$ 4,299 $ Debt service as a percentage of
noncapital expenditures 8.6% 8.2% 8.6% 0.4% 1.8% 1.9% 2.0% 2.0% 2.1% 2.2% Notes:
2 In 2014, the City retired the outstanding balance on their 1998 Certificates of Participation. 1 Starting in 2013, capital outlay expenditures are reported in the relevant departmental category. 3 In 2021, the City issued Lease Revenue Bonds to refinance their 2014 Certificates of Participation and generate additional monies for future capital projects. 4 In 2010, the City issued Certificates of Participation for land acquisition. 5 Effective February 1, 2012 all redevelopment agencies in the State of California were dissolved. The extraordinary gain is due to the transfer of net liabilities of the former redevelopment agency of the City of Torrance to a private-purpose Successor Agency Trust Fund.

In 2017, the City issued refunding Certificates of Participation to refinance their 2009 Certificates of Participation and generate additional monies for future capital projects.

Fiscal Year
155
194
City of Torrance
Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years
(in thousands of dollars)
Revenue Capacity
Exhibit 1
Real Property:
2024 35,044,419$ 525,306 $ 35,569,725 $ - $ - $ - $ 2023 33,347,358 473,358 33,820,716 - - - 2022 31,670,311 442,350 32,112,661 - - - 2021 30,651,720 425,167 31,076,887 - - - 2020 29,823,983 444,207 30,268,190 - - - 2019 28,206,700 419,422 28,626,122 - - - 2018 26,679,039 368,075 27,047,114 - - - 2017 24,972,616 355,712 25,328,328 - - - 2016 24,432,661 358,694 24,791,355 - - - 2015 23,512,947 366,569 23,879,516 - - - Personal Property:
2024 201,330$ 891,584$ 1,092,914$ - $ - $ - $ 2023 182,187 686,452 868,639 - - - 2022 214,252 667,627 881,879 - - - 2021 250,413 693,780 944,193 - - - 2020 184,551 700,667 885,218 - - - 2019 281,964 683,665 965,629 - - - 2018 461,991 656,073 1,118,064 - - - 2017 381,327 613,322 994,649 - - - 2016 386,952 614,496 1,001,448 - - - 2015 365,633 648,079 1,013,712 - - - Total:
2024 35,245,749$ 1,416,890$ 36,662,639$ - $ - $ - $ 0.1529% 2023 33,529,545 1,159,810 34,689,355 - - - 0.1529% 2022 31,884,563 1,109,977 32,994,540 - - - 0.1531% 2021 30,902,133 1,118,947 32,021,080 - - - 0.1528% 2020 30,008,534 1,144,874 31,153,408 - - - 0.1529% 2019 28,488,664 1,103,087 29,591,751 - - - 0.1518% 2018 27,141,030 1,024,148 28,165,178 - - - 0.1506% 2017 25,353,943 969,034 26,322,977 - - - 0.1507% 2016 24,819,613 973,190 25,792,803
- - - 0.1508% 2015 23,878,580 1,014,648 24,893,228 - - - 0.1507% Notes:

In 1978 the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of 1% based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property is only reassessed at the time that it is sold to a new owner. At that point, the new assessed value is reassessed at the purchase price of the property sold.

The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above. Amounts shown are net of any homeowner exemptions.

Source: Los Angeles County Auditor - Controller's Office Redevelopment AgencyFiscal
Year
Ended
June 30
City
Secured Unsecured
Taxable
Assessed
Value
Total
Direct Tax
RateSecured Unsecured
Taxable
Assessed
Value
156
195
City of Torrance
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
(Rate per $100 of assessed value)
Revenue Capacity
Exhibit 2
2024 2023 2022 2021 2020 2019 2018 2017 2016 2015
City Direct Rates:

City basic rate 0.1529 0.1529 0.1531 0.1528 0.1529 0.1518 0.1506 0.1507 0.1508 0.1507 Redevelopment Agency¹ - - - - - - - - - - Total City Direct Rate 0.1529 0.1529 0.1531 0.1528 0.1529 0.1518 0.1506 0.1507 0.1508 0.1507 Overlapping Rates:

Metropolitan Water District 0.007 0.0035 0.0035 0.0035 0.0035 0.0035 0.0035 0.0035 0.0035 0.0035 Torrance Unified School District 0.48196 0.4914 0.4961 0.4894 0.4989 0.5020 0.4940 0.4913 0.4903 0.4818 Community College 0.0210 0.0230 0.0226 0.0236 0.0216 0.0216 0.0222 0.0229 0.0174 0.0174 County of Los Angeles 0.2405 0.2405 0.2406 0.2401 0.2406 0.2403 0.2390 0.2394 0.2402 0.2407 Successor Agency¹ 0.1406 0.1401 0.1389 0.1396 0.1369 0.1344 0.1388 0.1356 0.1331 0.1306 Special Districts 0.0657 0.0658 0.0657 0.0657 0.0663 0.0675 0.0676 0.0686 0.0691 0.0697 Total Direct Rate 1.1097 1.0942 1.1205 1.1147 1.1207 1.1211 1.1157 1.1120 1.1044 1.0944 Notes:
1Effective February 1, 2012, all redevelopment agencies in the State of California were dissolved. Remaining assets and liabilities of the City of Torrance Redevelopment Agency were transferred to a Successor Agency Trust.

In 1978 California voters passed Proposition 13 which sets the property tax rate at a 1.00% fixed amount. This

1.00% is shared by all taxing agencies for which the subject property resides within. The rates over 1.00% are voter approved (special taxes) bond rates for the tax rate area.

Source: Los Angeles County Auditor - Controller's Office 157
196
City of Torrance
Principal Property Tax Payers
Current Fiscal Year and Nine Years Ago Ending June 30
Revenue Capacity
Exhibit 3
Rank Rank
Del Amo Fashion Center Operating Company 970,845,421 $ 1 2.65% 418,344,159$ 3 1.68% Torrance Refining Company 783,141,122 2 2.14%
American Honda Motor Company Inc. 417,953,260 3 1.14% 308,718,962 4 1.24% TI Commerce Center 298,974,574 4 0.82%
Rexford Industrial 3100 Lomita Blvd 185,685,900 5 0.51% CLPF Anza LP 132,659,355 6 0.36%
Allied Signal Inc. 126,448,582 7 0.34% 107,317,912 7 0.43% RREF II Pacific Center LLC 117,454,091 8 0.32% CLPF Vista North LP 100,242,596 9 0.27%
CTC Group Inc. 93,528,246 10 0.26% 0.00%
Exxon Mobil Oil Corporation 1,408,187,733 1 5.66%
Toyota Motor Sales/Credit Corp 534,172,545 2 2.15% Macy's West Stores Inc./Federated Western Properties Inc. 162,530,194 5 0.65% Torrance Memorial Medical Center 133,474,918 6 0.54% Continental Skypark LLC 95,059,313 8 0.38%
CTC Group Inc. 69,109,809 9 0.28%
Diamondrock Torrance Owner LLC 66,096,898 10 0.27% 3,226,933,147$ 8.81% 3,303,012,443$ 13.28%
Notes:

The amounts shown above for 2015 include assessed value data for both the City and the Redevelopment Agency.

The amounts shown above for 2024 include assessed value data for both the City and the Successor Agency Trust. Effective February 1, 2012, all redevelopment agencies in the State of California were dissolved.

Remaining assets and liabilities of the City of Torrance Redevelopment Agency were transferred to a Successor Agency Trust.

Source: Los Angeles County Assessor 2023/24 & 2014/15 Secured & Unsecured Tax Rolls Taxpayer
2024
Taxable
Assessed
Value
Percent of
Total City
Taxable
Assessed
Value
Taxable
Assessed
Value
2015
Percent of
Total City
Taxable
Assessed
Value
158
197
City of Torrance
Property Tax Levies and Collections
Last Ten Fiscal Years
(in thousands of dollars)
Revenue Capacity
Exhibit 4
Amount Percentage of Levy Amount Percentage of Levy
2024 45,783 $ 44,731 $ 97.70% 141$ 44,872$ 98.01% 2023 42,977 42,187 98.16% 92 42,279 98.38% 2022 40,966 40,175 98.07% 90 40,265 98.29% 2021 39,739 38,896 97.88% 90 38,986 98.11% 2020 38,683 37,614 97.24% 52 37,666 97.37% 2019 36,554 35,910 98.24% 44 35,954 98.36% 2018 34,820 34,254 98.37% 40 34,294 98.49% 2017 32,460 31,993 98.56% 31 32,024 98.66% 2016 31,843 31,296 98.28% 32 31,328 98.38% 2015 30,778 30,243 98.26% 23 30,266 98.34% Notes:

The amounts presented are for City property taxes only.

This schedule also includes amounts collected by the City that were passed-through to other agencies.

Source: Los Angeles County Auditor Controller's Office Total Collections to Date
Fiscal Year
Ended
June 30
Total Tax
Levy for
Fiscal Year
Collections in
Subsequent
Years
Collected within
Fiscal Year
159
198
City of Torrance Water Fund
Water Sold by Type of Customer
Last Ten Fiscal Years
(in thousands of cubic feet)
Revenue Capacity
Exhibit 5
2024 2023 2022 2021 2020 2019 2018 2017 2016 2015
Type of Customer:

Residential 346,902 341,953 380,937 424,835 370,278 382,206 396,034 381,521 371,531 431,201 Industrial 210,862 227,510 209,392 174,953 181,901 159,277 134,288 135,584 100,085 136,159 Commercial 146,920 126,375 161,636 160,497 158,787 164,730 154,406 164,215 158,623 193,565 Other 38,034 20,114 33,353 31,858 29,956 27,520 50,471 27,246 36,561 37,059 Total - Potable Water 742,718 715,952 785,318 792,143 740,922 733,733 735,199 708,566 666,800 797,984 Type of Customer:

Industrial 207,840 207,912 206,675 217,929 226,824 242,224 273,171 207,389 145,358 232,056 Other 10,165 10,934 14,696 14,671 11,694 14,218 17,944 13,553 15,905 15,154 Total - Recycled/Reclaimed Water 218,005 218,846 221,371 232,600 238,518 256,442 291,115 220,942 161,263 247,210 Type of Customer:

Residential 346,902 341,953 380,937 424,835 370,278 382,206 396,034 381,521 371,531 431,201 Industrial 418,702 435,422 416,067 392,882 408,725 401,501 407,459 342,973 245,443 368,215 Commercial 146,920 126,375 161,636 160,497 158,787 164,730 154,406 164,215 158,623 193,565 Other 48,199 31,048 48,049 46,529 41,650 41,738 68,415 40,799 52,466 52,213 Total Water 960,723 934,798 1,006,689 1,024,743 979,440 990,175 1,026,314 929,508 828,063 1,045,194 Source: Minol USA Usage Report for June 2016 through June 2024, Global Water Usage Report for 2014 through May 201 Fiscal Year
Total
Potable
Recycled/Reclaimed
160
199
City of Torrance Water Fund
Water Rates
Last Ten Fiscal Years
Revenue Capacity
Exhibit 6
Monthly Base Rate
Fiscal
Year Ended
June 30 Regular 1
Low
Income1
Torrance
Refining/
Exxon
Contract2
Wholesale
Contract2
Other -
Recycled
Regular3
2024 7.48$ 7.48 $ 4,000.14 $ 628.25 $ 28.68 $ 2023 7.48 7.48 4,000.14 628.25 28.68 2022 7.48 7.48 4,000.14 628.25 28.68 2021 7.10 7.10 1,898.00 † 590.39 27.22 2020 7.05 7.05 147,008.00 564.51 27.04 2019 6.83 6.83 142,273.00 547.01 26.20 2018 6.43 6.43 119,711.00 540.68 24.67 2017 5.84 5.84 89,657.00 398.31 19.24 2016 5.84 5.84 94,611.00 398.31 19.24 2015 5.84 5.84 92,960.00 394.37 19.24 Rate Per 100 Cubic Feet
Fiscal
Year Ended
June 30 Regular 4
Low
Income4
Torrance
Refining/
Exxon
Contract
Wholesale
Contract
Other -
Recycled
Regular
2024 5.37$ 3.65$ 5.55$ 3.30$ 4.46$ 2023 5.37 3.65 5.55 3.30 4.46 2022 4.86 3.65 5.55 2.95 3.78 2021 4.94 3.48 5.27 † 2.84 3.83 2020 4.58 3.44 2.76 2.79 3.56 2019 4.26 3.33 2.68 2.71 3.55 2018 3.86 3.01 2.59 2.62 3.21 2017 3.93 3.53 2.48 2.52 2.79 2016 3.93 3.53 2.50 2.52 2.79 2015 3.93 3.53 2.40 2.42 2.79 Notes:
1Base rate reflects monthly charge for 3/4 inch meter
2Base rate reflects monthly fixed charge stated in contracts. 3Base rate reflects monthly charge for 2 inch meter
4 Reflects Average Rate
† Effective FY20-21 major portion of fixed component converted to Quantity Rate Source: City of Torrance Public Works Department - Water Division 161
200
City of Torrance Water Fund
Principal Water Customers
Current Fiscal Year and Nine Years Ago
Ending June 30
Revenue Capacity
Exhibit 7
Water Customer Water Charges Rank
Percent of Total
Water Revenues Water Charges Rank
Percent of Total
Water Revenues
Torrance Refining Company 17,216,714 $ 1 31.90% - $ - City of Torrance 964,690 2 1.79% 808,738 2 2.33% California Water Service - Wholesale 922,066 3 1.71% 790,099 3 2.28% Torrance Unified School District 659,664 4 1.22% 539,199 4 1.56% Torrance Memorial Health System 582,843 5 1.08% 232,428 7 0.67% New Horizons 277,036 6 0.51% 213,422 9 0.62% American Honda Motors 243,292 7 0.45% - - Summerwind HOA 241,105 8 0.45% 203,722 10 0.59% Honeywell International 209,474 9 0.39% 361,373 5 1.04% Torrance HOA 187,368 10 0.35% - - Exxon Mobil Oil Corporation 8,513,016 1 24.57%
Toyota Motor Sales USA Inc. 270,263 6 0.78%
Don Wilson Builders 222,754 8 0.64%
Total 21,504,252$ 39.84% 12,155,014 35.09% Source: Minol USA and Golden State Top Customer reports 20152024
162
201
Debt Capacity
Exhibit 1
2024 368,900 $ 20,365 $ - $ 920 $ -$ 8,686$ 398,871$ - 1,046 $ 2,266 $ 632 $ 3,944$ 402,815$ 1.22% 2,816 $ 2023 378,365 20,912 - 1,138 - 4,904 405,319 - 1,104 2,847 576 4,527 409,846 1.24% 2,865 2022 387,225 21,440 - 1,352 - - 410,017 - 1,162 3,414 - 4,576 414,593 1.26% 2,870 2021 389,240 21,948 - - - - 411,188 - 1,221 3,968 - 5,189 416,377 1.30% 2,875 2020 - 58,765 - - - - 58,765 - 1,278 4,509 - 5,787 64,552 0.21% 444 2019 - 60,145 - - - - 60,145 - 1,337 5,038 - 6,375 66,520 0.24% 446 2018 - 61,474 - - - - 61,474 - 1,395 305 - 1,700 63,174 0.22% 424 2017 - 62,740 - - - - 62,740 - 1,453 - - 1,453 64,193 0.24% 437 2016 - 56,637 - - 65 - 56,702 - 1,453 - - 1,453 58,155 0.23% 396 2015 - 57,784 - - 155 - 57,939 - 1,453 - - 1,453 59,392 0.24% 401 Notes:

Details regarding the City's outstanding debt can be found in the notes to the financial statements. 4 In 2013, the City entered a 5-year capital lease agreement for vehicles and the City's Public Works Department - Notes
Payable3
2 In 2014 the City issued $40 million of new Certificates of Participation and retired $35 million of older Certificates of Participation generating $6 million for capital projects. The City also retired an additional $6 million from a separate 1998 Certificate of Participation issuance.

In 2020, the City issued $350 million of new Lease Revenue Bonds for refinancing of the City's pension plans with CalPERS. 7 Assessed Value has been used because Personal Income for the City of Torrance is unavailable. 1 In 2021, the City issued $40 million of new Lease Revenue Bonds and retired $36 million of older Certificates of Participation. 3 Effective February 1, 2012, all redevelopment agencies in the State of California were dissolved. Assets and liabilities of the City of Torrance Redevelopment Agency were transferred to a Successor Agency Trust that is not part of the governmental activities of the City.

Water Division entered a 30-year easement agreement for access to a land-locked parcel of City property. 5 In 2014 the final scheduled payment was made on the City's Public Works Department-Water Division $5 million Water Revenue Refunding Bonds.

In 2017 the City issued $22 million of new Certificates of Participation and retired $17 million of older Certificates of Participation generating $5 million for capital projects.

Installment
Sale
Agreement6
Debt
Per
Capita
6 In 2018 the City's Public Works Department - Water Division entered into an installment sale agreement to finance drilling and construction of a new water well.

Total
Business-type
Activities
Total
Primary
Government
Water
Revenue
Bonds5
Percent of
Assessed
Value7
SBITA
Liability8
Easement
Payable4
General
Government
Certificates of
Participation2
8 In 2023 the City implemented GASB Statement No. 96 - Subscription-Based Information Technology Arrangements (SBITAs). This resulted in the recognition of a subscription liability.

SBITA
Liability8
Governmental Activities
General
Government
Lease Revenue
Bonds1
City of Torrance
Ratio of Outstanding Debt by Type
Last Ten Fiscal Years
(in thousands of dollars, except Per Capita)
Business-type Activities
Total
Government
Activities
Tax
Allocation
Bonds3
Fiscal Year
Ended
June 30
Capital Lease
Payable4
163
202
City of Torrance
Ratio of Net General Bonded Debt Outstanding
Last Ten Fiscal Years
(in thousands of dollars, except Per Capita)
Debt Capacity
Exhibit 2
2024 368,900 $ 20,365 $ 7 $ 389,258$ 1.06% 2,721 $ 2023 378,365 20,912 6 399,271 1.15% 2,791 2022 387,225 21,440 5 408,660 1.24% 2,829 2021 389,240 21,948 1,212 409,976 1.28% 2,831 2020 - 58,765 2,620 56,145 0.18% 386 2019 - 60,145 2,524 57,621 0.19% 389 2018 - 61,474 2,427 59,047 0.21% 396 2017 - 62,740 2,450 60,290 0.23% 410 2016 - 56,637 3,741 52,896 0.21% 360 2015 - 57,784 3,737 54,047 0.22% 365 Notes:
2 Assessed value has been used because the actual value of taxable property is not readily availabl in the State of California.

Outstanding Net General Bonded Debt
1 Amounts represent cash in debt service reserve accounts held with fiscal agents restricted for the payment of existing bond debt.

General bonded debt is debt payable with governmental fund resources and general obligation bonds recorded in enterprise funds (of which, the City has none).

Per
Capita
Fiscal Year
Ended
June 30
General
Government
Lease Revenue
Bonds
Less Amounts
Available in
Debt Service
Funds1
Net General
Bonded Debt
Percent of
Assessed
Value2
General
Government
Certificates of
Participation
164
203
City of Torrance
Direct and Overlapping Debt
June 30, 2023
(in thousands of dollars)
Debt Capacity
Exhibit 3
City Assessed Valuation 36,662,639$
Overlapping Debt Repaid with Property Taxes:

Los Angeles County Flood Control District 0.987% 18,210$ 180$ El Camino Community College District 25.773% 447,104 115,232 Los Angeles Community College District 0.006% 5,155,845 309 Los Angeles Unified School District 0.007% 10,723,385 751 Palos Verdes Unified School District 0.014% 36,285 5 Torrance Unified School District 99.998% 418,104 418,096 Total overlapping debt to be repaid with property taxes 16,798,933 534,573 Overlapping Other Debt:

Los Angeles County General Fund Obligations 1.905% 2,479,230$ 47,229$ Los Angeles County Superintendent of Schools
Certificates of Participation 1.905% 2,857 54
Los Angeles Unified School District Certificates
of Participation 0.007% 471,590 33
Torrance Unified School District General Fund Obligations 99.998% 8,540 8,540 Total overlapping other debt 2,962,217 55,856
Total overlapping debt 19,761,150$ 590,429
City direct debt:

Certificates of Participation (including premium) 20,365 Lease Revenue Bonds 368,900
Notes Payable 920
SBITA Liability 8,686
Total City direct debt 398,871
Total direct and overlapping debt 989,300$
Notes:

Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. 1For debt repaid with property taxes, the percentages of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of another governmental unit's taxable assessed value that is within the city's boundaries and dividing it by each unit's total taxable assessed value.

Source: California Municipal Statistics, Inc
Percentage
Applicable1
Outstanding
Debt 6/30/24
Estimated
Share of
Overlapping
Debt
165
204
City of Torrance
Legal Debt Margin Information
Last Ten Fiscal Years
(in thousands of dollars)
Debt Capacity
Exhibit 4
2024 2023 2022 2021 2020 2019 2018 2017 2016 2015
Debt limit 1,374,849 $ 1,300,851 $ 1,237,295 $ 1,200,791$ 1,200,791$ 1,109,691$ 1,056,194$ 987,112 $ 967,230 $ 933,496 $ Total net debt applicable to limit 20,365 19,560 21,440 20,480 58,765 60,145 61,474 62,740 56,637 57,784 Legal debt margin 1,354,484$ 1,281,291$ 1,215,855$ 1,180,311$ 1,142,026$ 1,049,546$ 994,720$ 924,372 $ 910,593 $ 875,712 $ Total net debt applicable to the limit as a
percentage of debt limit 1.5% 1.5% 1.7% 1.7% 4.9% 5.4% 5.8% 6.4% 5.9% 6.2% Legal Debt Margin Calculation for Fiscal Year 2023:

Assessed value 36,662,639$
Debt limit (3.75% of assessed value) 1,374,849$
Debt applicable to limit:

General government Certificates of
Participation 20,365
Legal debt margin 1,354,484$
Notes:

The Government Code of the State of California provides for legal debt limit of 15% of gross assessed valuation. However, this provision was enacted when assessed valuation was based upon 25% of market value. Effective with the 1981-82 fiscal year, each parcel is now assessed at 100% of market value (as of the most recent change in ownership for that parcel). Although the statutory debt limit has not been amended by the State since this change, the percentages presented in the above computations have been proportionately modified to 3.75% (25% of 15%) for the purpose of this calculation in order to be consistent with the computational effect of the debt limit at the time of the State's establishment of the limit.

Source: City of Torrance Finance Department
Los Angeles County Auditor - Controller's Office
Fiscal Year
166
205
Debt Capacity
Exhibit 5
Tax
Principal Interest Increment Principal Interest
2024 53,974 $ 48,543 $ 5,431 $ 581 $ 64 $ 8.42 - - - - 2023 54,255 46,405 7,850 567 77 12.19 - - - - 2022 51,521 41,236 10,285 554 90 15.97 - - - - 2021 49,198 41,465 7,733 541 103 12.01 - - - - 2020 45,557 38,974 6,583 529 116 10.21 - - - - 2019 42,544 41,134 1,410 516 34 2.56 - - - - 2018 1 41,445 35,991 5,454 195 7 27.00 - - - - 2017 36,974 33,048 3,926 - - - - - - - 2016 33,473 29,641 3,832 - - - - - - - 2015 36,001 31,967 4,034 - - - - - - - Notes:

Details regarding the City's outstanding debt can be found in the notes to the financial statements. Operating expenses do not include interest or depreciation expenses.

Water
Revenue
Less
Operating
Expenses
Net
Available
Revenue
City of Torrance
Pledged-Revenue Coverage
Last Ten Fiscal Years
(in thousands of dollars, except Coverage)
2 The final Water Revenue Bonds debt service payment was made on March 1, 2014. There are no Water Revenue Bonds outstanding as of June 30, 2014.

Coverage
Debt Service
Fiscal Year
Ended
June 30
Debt Service
1 The City's Public Works Department - Water Division entered into an installment sale agreement to finance drilling and construction of a new water well.

Tax Allocation Bonds
Coverage
Water Revenue Bonds/Installment Sale Agreement
167
206
City of Torrance
Demographic and Economic Indicators
Last Ten Calendar Years
Demographic and Economic
Exhibit 1
2023 142,910 9,824,091 $ 756,659,481 77,021 4.9% 2022 143,057 9,761,210 722,935,767 74,062 3.7%
2021 144,433 9,861,224 719,455,363 72,958 3.5%
2020 144,832 10,044,458 678,548,600 67,555 7.6% 2019 145,546 10,172,951 629,245,755 61,855 13.3% 2018 148,054 10,253,716 595,765,931 58,102 3.6% 2017 149,245 10,283,729 573,348,398 55,753 3.3% 2016 147,101 10,241,278 554,158,129 54,110 3.6% 2015 147,175 10,241,335 535,960,148 52,333 4.7% 2014 148,427 10,136,559 503,099,674 49,632 5.8% Sources: 1 State Department of Finance.
2 U.S. Department of Commerce - Bureau of Economic Analysis The Personal Income data shown is for the previous calendar year. The calendar year 2024 data will be available in the spring of 2025.

The Personal Income for the City of Torrance is unavailable, the data shown is for Los Angeles County.
3 Office of Economic Development
Per bea.gov, new statistics for 2022 and revised statistics for 1979-2021 on November 16, 2023.

Per bea.gov, new statistics for 2023 and revised statistics for 2019-2022 on November 14, 2024 Unemployment
Rate3
Calendar
Year
Torrance
Population1
Personal
Income
(in thousands)2
Per Capita
Personal
Income2
Los Angeles
County
Population1
168
207
City of Torrance
Principal Employers
Current Fiscal Year and Nine Years Ago Ending June 30
Demographic and Economic
Exhibit 2
Rank Rank
Torrance Memorial Health System 4,070 1 5.6% - - Torrance Unified School District 2,675 2 3.7% 2,461 2 3.3% Providence Little Co of Mary Medical Center (4 locations) 2,429 3 3.3% 2,088 3 2.8% City of Torrance 1,556 4 2.1% 1,692 5 2.3% American Honda Motor Company 1,496 5 2.0% 2,009 4 2.7% Robinson Helicopter Company 1,212 6 1.7% 1,212 8 1.6% Honeywell International 766 7 1.0% 1,443 6 1.9% Moog Aircraft Group 684 8 0.9% - - PBF Energy - Torrance Refining Company 607 9 0.8% Arconic Fastening Systems (formerly Alcoa Fastening Systems & Rings) 583 10 0.8% 971 9 1.3% Toyota Motor Sales USA Inc. - - 3,886 1 5.2% Virco Manufacturing Corp. - - 960 10 1.3% Lisi Aerospace/Hi Shear Corporation - - 1,216 7 1.6%

Notes:
"Total Employment" as used above represents the total employment of all employers located within City limits.

Data for 2015 was revised in comparison to the FY2015 ACFR Publication to exclude employers not located in Torrance.

Source: City of Torrance Finance Department
Muniservices, LLC
State of California Employment Development Department

Employer
2015
Number of
Employees
Percent of
Total
Employment
Number of
Employees
Percent of
Total
Employment
2024
169
208
City of Torrance
Full-time and Part-time City Employees
by Function
Last Ten Fiscal Years
Operating
Exhibit 1
Function 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 General government 225 217 210 239 254 277 281 275 275 277 Public safety 517 498 516 509 466 516 515 501 504 520 Public works 119 122 117 129 136 140 145 143 146 141 Culture and recreation 352 320 308 282 265 478 498 451 454 441 Community development 67 69 59 64 67 69 68 63 62 63 Municipal airport 10 10 10 9 9 10 10 10 10 10 Transit system 174 152 119 140 151 154 141 143 131 130 Water 30 26 24 26 25 25 31 30 30 29 Sewer 27 18 22 24 24 23 24 22 17 19 Cultural arts center 35 34 32 28 13 47 48 47 50 52 Total 1,556 1,466 1,417 1,450 1,410 1,739 1,761 1,685 1,679 1,682 Source: City of Torrance Finance Department - Payroll Section Fiscal Year
170
209
City of Torrance
Operating Indicators by Function
Last Ten Fiscal Years
Operating
Exhibit 2
2024 2023 2022 2021 2020 2019 2018 2017 2016 2015
Function
Police
Arrests 1,972 1,864 2,131 2,098 2,809 2,839 3,023 3,265 3,739 4,217 Bookings 1,825 1,767 2,082 2,037 2,688 2,196 2,360 2,477 2,623 2,840 Parking violations 12,585 10,155 9,632 9,448 12,695 15,602 17,434 20,945 25,192 20,900 Traffic violations 2,558 2,944 1,254 1,550 2,980 2,657 2,046 26,988 16,987 19,776 Fire
Number of calls answered 16,484 16,474 16,135 14,214 14,816 15,270 15,208 15,183 14,863 13,669 Inspections 6,385 7,309 8,020 7,400 4,820 8,647 8,448 8,047 9,229 9,424 Highways, streets and other transportation
Potholes repaired 12,294 12,122 6,417 6,022 5,150 5,477 5,206 8,000 5,045 5,080 Number of tenant aircraft 500 500 500 500 500 500 500 500 500 500 Number of fixed bus routes 12 12 12 12 11 11 11 11 11 11 Sanitation
Refuse collected (tons/day) 134 138 143 160 151 144 144 143 144 143 Recyclables collected (tons/day) 39 40 43 47 46 46 50 48 49 49 Green waste collected (tons/day) 68 65 61 69 72 63 63 64 59 66 Culture and recreation
Number of registrants served 18,969 15,810 16,462 13,558 21,868 28,900 41,238 33,780 31,522 26,451 Registrant fees collected 2,738,248$ 2,175,372$ 2,056,373$ 720,189$ 2,294,747$ 3,150,985$ 3,103,074$ 3,282,886$ 2,931,701$ 2,952,473$ Community center admissions 22,448 19,524 12,387 2,105 18,110 23,167 30,375 33,097 34,600 40,230 Water
New connections 42 54 57 37 38 42 54 23 49 26 Water main emergency repairs (breaks) 35 50 56 66 35 75 69 70 53 36 Average daily consumption 15,285 15,172 17,189 16,811 16,720 15,055 16,093 15,454 15,137 16,400 (thousands of gallons)
Sources: City of Torrance various departments
Fiscal Year
171
210
City of Torrance
Capital Asset Indicators by Function
Last Ten Fiscal Years
Operating
Exhibit 3
2024 2023 2022 2021 2020 2019 2018 2017 2016 2015
Function
Public safety
Police
Stations 1 111111111
Patrol units 49 55 55 55 68 64 64 56 56 56
Motorcycles 12 12 16 16 16 16 16 16 16 16
Fire
Stations 6 66666 666
In-service fire control vehicles 16 17 18 18 17 17 17 17 17 17 In-service paramedic vehicles 22 21 20 12 888888
Sanitation
Collection trucks 32 33 32 32 34 33 38 34 34 34
Highways, streets and airport
Streets (centerline miles)-arterial 67 67 67 67 67 67 67 67 67 67 Streets (centerline miles)-collector 29 29 29 29 29 29 29 29 29 29 Streets (centerline miles)-residential 242 242 242 242 242 242 242 242 242 242 Streets (centerline miles)-alleys 19 19 19 19 19 19 19 19 19 19 Traffic signals 130 130 130 130 130 130 130 130 130 130 Street lights 10,560 10,560 10,560 10,560 10,560 10,560 10,492 10,492 10,877 10,877 Airport hangars 341 341 341 341 341 341 341 341 341 341 Culture and recreation
Parks acreage 276 276 276 279 279 279 279 279 279 279
Parks 33 33 33 33 33 33 33 33 33 33
Swimming pools 1 111111111
Tennis courts 11 11 11 11 11 11 11 11 11 11
Community centers 4 433333333
Public libraries 6 666666666
Water
Water mains (miles) 320 320 312 312 312 312 312 312 312 311 Fire hydrants 2,693 2,693 2,675 2,675 2,675 2,675 2,675 2,675 2,675 2,670 Maximum daily capacity 50,400 50,400 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 (thousands of gallons)
Sewer
Sanitary sewers (miles) 287 287 287 287 287 287 287 287 287 287 Storm sewers (miles) 59 59 59 59 59 59 59 59 59 59
Sources: City of Torrance various departments
Fiscal Year
172
211
CITY OF TORRANCE • DEPARTMENT OF FINANCE

BUDGET REVIEW REPORT
MID-YEAR FY 2024 - 2025

SEE WHAT

TORRANCE IS DOING
212
ATTACHMENT 3

Table of Contents
Executive Summary .......................................................................................................... 1 Introduction .........................................................................................................................................

1 Mid-Year Results

–

Citywide Revenues (All Major Funds)
..................................................................

1 Mid-Year Results

–

Citywide Expenditures (All Major Funds)
............................................................

2 Mid-Year Results

–

General Fund
-Operating Fund .............................................................................

4 Areas of Focus ......................................................................................................................................

9 Economic Outlook .............................................................................................................................

13 Reserve Balances ...............................................................................................................................

18 Conclusion .........................................................................................................................................

19 Program Modifications and Other Updates ........................................................................ 21

Program Modifications ......................................................................................................................

21 General Fund .................................................................................................................. 23

Overall Mid-Year Results ...................................................................................................................

23 General Fund-Operating Fund Mid-Year Results ..............................................................................

25 General Fund-Measure SST Fund Mid-Year Results .........................................................................

38 General Fund-Restricted/Assigned Fund Mid-Year Results .............................................................

40 General Fund-Unassigned Fund (Reserves) Mid-Year Results .........................................................

42 Internal Service Funds ..................................................................................................... 44

Self-Insurance Fund Mid-Year Results ..............................................................................................

44 Fleet Services Fund Mid-Year Results ...............................................................................................

46 Enterprise Funds ............................................................................................................ 49

Airport Fund Mid-Year Results

..........................................................................................................

49 Sanitation Fund Mid-Year Results .....................................................................................................

51 Sewer Fund Mid-Year Results ............................................................................................................

54 Transit Fund Mid-Year Results ..........................................................................................................

57 Water Fund Mid-Year Results ............................................................................................................

59 213
Mid-Year Budget Review Report

EXECUTIVE SUMMARY
214

1 Executive Summary
Introduction
The purpose of the Fiscal Year 2024 - 25 Mid-Year Budget Review Report is to provide City Council and the public with a summary of the City’s overall financial performance across all

major funds

through

the

first

six

months

of the fiscal year

ending

December 31
, 2024. This report

also

provides an update
on reserve balances, projected year

-
end

figures
, and a

summary of economic

trends.

The City published its audited financial statements in December 2024, which

included
an unassigned
fund balance ( reserves) of

$

78.7 million and a

California Employers’ Pension Prefunding Trust
(CEPPT) Section 115

Trust

fund balance of

$27.
8 million.

I
ncluding the

projec
ted results in the

Fiscal
Year 2024

-
25 Mid-Year Budget Review Report, it is

anticipated
that the City’s unassigned fund
balance (reserves) will climb

to
$81.1 million and the City’s CEPPT Fund will end the year at $38.4 million. The City’s CEPPT

Fund
can be leveraged to offset future pension costs for the City while the City’s unassigned fund ba

lance can be utilized for an
y purpose,

including economic downturns. Th
e
City’s audited Unassigned fund balance for Fiscal Year 2023

-
24 translates to a 31.7% reserve ratio ,
which will be reflected in the City’s Financial Key Performance Indicators . These balances provide the City with

flexibility to address
fluctuations in the economy and to address the City’s current net pension liability and OPEB liability balances of $250.5 million

and $61.7 million, respectively. In FY23

-
24, the California Public Employees’ Retirement System (CalPERS) reported preliminary investment gains of 9.3%, 2.5% higher than the 6.8% discount rate. This will translate to a decrease in unfunded actuarial liability (UAL) and the amortized repayment over the next 20 years, beginning in FY26

-

27. This budget report is prepared in collaboration with City departments using actual (unaudited) activity for

f
iscal year 2024

-
25 (FY24-25). Moreover, s tatistical data and economic analyses

are

gathered from consultants and other

third
-party sources to project year

-
end revenue s. The
projections presented in this report

are
based on the most recent available

data at the time of
publication;

however
,

data projections are subject to change.

Mid-Year Results – Citywide Revenues (All Major Funds) As of December 31 , 2024, City-wide revenues across all funds, including the General Fund, Internal Service Funds, and Enterprise Funds, totaled $223.6

million, achieving 44.4% of the

FY24
-25

revenue
budget. In comparison,

d
uring the same period

ending
December 31, 2023, the City realized

$
210.9
million in revenues, representing

42.9 %
of the

FY2
3-24 revenue budget. The following table provides
a

summary

comparison
of these

year
-over-year

figures
.

215

2 Citywide Revenues (All Major Funds )

Mid-Year Results – Citywide Expenditures (All Major Funds) As of December 31 , 2024, across all major funds , the City realized expenditures of $ 254.7 million, achieving 51.8

%
of the

FY24
-25

citywide expenditure budget. During the same period ending December 31, 2023, the City expended $233.6 million or 49.4

%
of the

FY2
3-24 citywide expenditure
budget.

The following table provides a summary comparison of these year -over-year figures.

Citywide Expenditures

(All Funds)

and

Projected Net Surplus/(Deficit)

216

3 As shown under the “Projected Net Surplus/(Deficit)” column in the previous table , the following year-end

results are projected

for

FY24
-25

:

•

The General Fund -Operating Fund is expected to operate at a

projected surplus of $3.3
million, primarily driven by vacancies. A portion of the projected salary savings is expec ted to be used to fund

the
Recruitment and Retention Incentive Pilot program for the Police Department, approved by City Council in July 2024.
•

The General Fund-Measure SST Fund will operate

at a

projected deficit of $1.0 million. This
fund’s budget was originally adopted with a deficit of $2.3 million due to planned use of fund balance to support the City’s Capital Improvement Plan.

•

The General Fund-Restricted/Assigned Fund will operate at a projected surplus

of
$12.3

million, primarily driven by a $9.4 million contribution to the City’s California Employers’ Pension Prefunding Trust ( CEPPT

)
Section 115 Fund and contributions to various
replacement funds for planned

future

equipment

purchase
s.
•

The Self-Insurance Fund will operate at a

projected surplus of $1.3 million due to

a
decrease in projected expenditures related to liabilities and settlements. •

The Fleet Services Fund will operate at a

$

4.4 million projected surplus, primarily driven by
contributions to the Fleet Services Replacement Fund and partially offset by an operating deficit in the Fleet Services Operating Fund.

•

The Enterprise Funds will operate at a projected surplus of $11.8

million overall, led by the
Water Fund, Sewer Fund , Airport Fund, and Sanitation Fund partially offset by projected deficit in

the

Transit

Fund
.

The forthcoming sections will provide greater detail of the above results with particular focus on the General Fund-Operating Fund, which constitutes

89. 3% of the General Fund budget and

58. 5% of the
citywide budget. Additional information is also included in the

Areas of Focus
section of this
document to elaborate on important topics that need to be addressed and are being closely monitored by staff.

217

4 Mid-Year Results – General Fund-Operating Fund
General Fund-Operating Fund Revenues and Expenditure s

As of

December 31
, 2024 , the General Fund -Operating Fund realized revenues of

$
109.4 million,
achieving 38.1% of the

FY24
-25

revenue budget. During the same period in the prior year, the fund realized

$

95.2 million
in revenues, representing

35.0 %

of the

FY23
-24

revenue budget. As shown in
the table

above
, the General Fund-Operating Fund’s FY24-25 revenue budget is projected to operate at a

deficit
of $1.0 million, mainly driven by decreases in Utility Users Tax

and Charges for Services
from various plan check fees and

inspection fees
, partially offset by expected increase in transfers
from the Airport Fund’s non

-
aeronautical

(la
nd leases)

division
.

The General Fund-Operating Fund realized expenditures of $ 148.8

million, achieving 51.8

% of the
FY24-25

expenditure budget as of December 31, 2024

. During the same period ending

December 31
,
2023

, the

fund
expended $139.8 million or

51.4 % of the

FY23
-24 expenditure budget. Currently, it is
projected that expenditures will fall below budget by

$

4.8 million at the end of the

fiscal year. This
is primarily the result of departmental vacancies across the General Fund. As of December 3 1, 2024, the General Fund had 154.1

FTE vacant positions. While this represents a decrease of

5.0 FTE
vacancies from the same period in the year prior, the City continues to experience challenges in attracting

and retaining
qualified candidates and currently has many recruitments underway.

At the end of FY24-25, it is projected that revenues will exceed expenditures by

$

3.3 million.

General Fund-Operating Fund Revenues
The three core revenue sources of the General Fund -Operating Fund are Sales and Use Tax , Property Tax , and

Utility Users’ Tax
. These three tax classifications cumulatively represent approximately 55% of the City’s total General Fund-Operating Fund revenue budget. Combined with Business License Tax

and

Occupancy
Tax, these five revenue sources make up approximately 63

%
of the City’s total General Fund -Operating Fund revenue budget. However, it should be noted that certain receipts are seasonally collected, such as Property Tax

(December through April), Business
License Tax renewals (January through February), and Sales and Use Tax from the holiday season (Black Friday, Cyber Monday, Christmas). Thus, revenue receipts for the

Mid
-Year do not provide a
“clear” representation of projected fiscal year-end results since most of these are not received until the

third quarter

of each fiscal year.

Amended
Budget
July-December
Actuals

Budget
Realized
Amended
Budget
July-December
Actuals

Budget
Realized
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Total Revenues 271,689,666$ 95,166,859$ 35.0% 287,065,655$ 109,420,973$ 38.1% 286,065,425$ (1,000,230)$ 99.7% Total Expenses 271,900,152

139,816,261

51.4% 287,514,706

148,840,929

51.8% 282,760,773

4,753,933

98.3%
Rev. Less Exp. (210,486)$

(44,649,402)$

(449,051)$

(39,419,956)$

3,304,652$

3,753,703$

Prior Year FY23-24 Current Year FY24-25
218

5 The table below represents a summary of all General Fund-Operating Fund revenue sources, but only the Sales and Use Tax , Property Tax, Utility Users’ Tax , Business License Tax , and

Occupancy
Tax

classifications will be examined for the purposes of this section. All classifications are examined in greater detail in the

General Fund
-Operating Fund Revenue Analysis

section of this document.

General Fund
-Operating Fund Revenue

s

by Classification

Sales and Use Tax
Sales and Use

Tax (
sales tax) receipts of $19.3

million through

the second fiscal quarter are tracking
below prior year actuals by $ 1.2 million or 5.9% lower. After the 2020 pandemic, s ales tax receipts peaked in

FY
2021

-
22 at $63.6 million

, fell to

$62.6 million in

FY22
-23

,
$61.9 million

in FY23-24, and are
projected to generate $ 61.5

million in

FY24
-25

.

This forecast project s a decreasing trend, with a
decrease of 0.6% from prior-year actuals and a 1.6% decrease below budgeted figures in the current fiscal year.

With sales tax revenues trending downward, staff continue to be cautious with economic forecasts.

In January 2025

, the Federal Reserve (Fed)

maintained
the Federal Funds Rate at a

range of

4. 25% -

4.50 %. The Fed’s policy to slow inflation has affected sales trends across various industries.

As of the
latest available data from the California Department of Tax & Fee Administration (CDTFA), a sharp drop in auto sales and leasing activity

was largely responsible for the overall decline

due to softening
demand as higher financing rates

adversely

impact buyers
’ spending power.

Many other general consumer categories were also down

compared to

the

2023

quarter, confirming
consumers are pulling back on purchases. Home furnishings , appa rel, and electronic appliances could not escape the change in shopper’s preferences for lower priced items from

large retailers like
discount department stores.

Despite the

decrease

in the Federal Funds Rate helping temper the cost
of financing, personal consumption forecasts remain insipid through the remainder of 2024

.

Consumers are more likely to wait for greater improvement of household economic conditions before extending themselves again.

Revenues
Amended
Budget
July-December
Actuals

Budget
Received
Amended
Budget
July-December
Actuals

Budget
Received
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Taxes 209,861,473$ 66,773,099$ 31.8% 214,595,854$ 69,352,398$ 32.3% 213,371,505$ (1,224,349)$ 99.4% Licenses, Fees and Permits 5,773,777

2,534,971

43.9% 5,429,133

3,252,123

59.9% 6,001,320

572,187

110.5%
Fines, Forfeitures and Penalties 760,672

227,119

29.9% 642,774

333,158

51.8% 712,510

69,736

110.8%
Use of Money and Property 4,527,970

3,261,475

72.0% 7,154,388

3,627,392

50.7% 6,614,040

(540,348)

92.4%
Intergovernmental 349,501

32,342

9.3% 490,127

45,357

9.3% 327,950

(162,177)

66.9%
Charges for Services 23,910,796

10,517,597

44.0% 25,217,466

11,927,104

47.3% 24,332,220

(885,246)

96.5%
Other Revenues 209,360

219,846

105.0% 319,604

86,858

27.2% 203,240

(116,364)

63.6%
Operating Transfers In 26,296,117

11,600,410

44.1% 33,216,309

20,796,583

62.6% 34,502,640

1,286,331

103.9%
Total Revenues 271,689,666$

95,166,859$

35.0% 287,065,655$

109,420,973$

38.1% 286,065,425$

(1,000,230)$

99.7%
Prior Year FY23-24 Current Year FY24-25
219

6 Despite challenges , the State and County Pools and Restaurants and Hotels sector s remained a bright spot

in the economy

and saw growth compared to the previous year.

The below chart is based on the latest available data from the CDTFA and illustrates quarter -over- quarter (3-month) results as of

September 30
, 2024. It should be noted that quarterly data typically becomes available after a four -month period and staff adjusts budgetary forecasts accordingly throughout the fiscal year.

Source: HdL Companies

Property Tax, Property Transfer Tax, and Vehicle License Fee (VLF) Swap & Repayment Tax The City’s property tax base consists of a healthy mix of residential, commercial, and industrial properties, with the residential category comprising most of the total assessed value in Torrance.

Property Tax revenues, which collectively includes property tax, property transfer tax, and VLF swap & repayment tax, are primarily received in

December

and

April each year.

As of

December 31
, 2024, property tax receipts of $ 20.9

million are tracking $1.2 million

higher, or

6.1%,

compared to the same period last year. Presently, the City projects total year -end revenues to
be slightly

higher
than budget by approximately $ 888,000 or 1.3% across the three combined property tax categories. The table below indicates that as of

December
2024

(2024 Q4), the median
sales price of a detached single

-
family residential (SFR) home in Torrance was $1, 205

,000, a

5.0 %
increase from the same period in

2023
(Q4), and a

7.3 % decrease

from $1,300,000 from the third
calendar quarter of

2024
(Q3). This is an important variable to monitor as transfer of ownership is the largest driver in assessed

value changes
.

220

7 Source: HdL Companies

Utility

U
sers’

T
ax
Utility users’ tax (UUT) receipts

of
$18.6

million translate to a 6.5% increase from the prior year.

Cellular, electricity, gas, and water experienced an increase from the prior year, while cable and telecom experienced a slight decrease. The Torrance Refinery experienced a decrease in

gas
as
production continues to normalize following planned maintenance in the second fiscal quarter of 2024

.

Presently, the City projects that total year -end UUT revenue will fall short of budget by approximately $ 2.5 million or 5.4%, primarily due to the projected deficit in the

natural gas
consumption at the Refinery.

Other Major Revenue Sources
Other major revenue sources of the General Fund-Operating Fund include

Business License Tax
and
Occupancy Tax. As of

December 31
, 2024

,
Business License Tax receipts are higher than the prior year by $

763,000

and are expected to

be within

the budget

by

1.0 %

at year
-end. Moreover, the

City’s
Occupancy Tax receipts have

decreased
by $89

,000 compared to

December 31
, 2023

. Based on the
latest information from data and analytics company STR, LLC, the City’s occupancy rate

for the

twelve months ending Dec

ember 20
24 increased from 81.2% in 2023 to 81.7% in 2024. Additionally, the average daily rate per room increased by $4.24 or 2.6% during this same twelve -month period.

Overall, it is projected that Occupancy Tax receipts will fall short of

budget by approximately
$707,000 or 5.1%.

221

8 General Fund-Operating Fund Expenditures
As of December 31 , 202 4 , the General Fund-Operating Fund’s expenditures increased by $9.0 million or 6.5% from the

same period in year prior
, primarily driven by the planned

increase

s
in Salaries and
Employee Benefits for renewed labor contracts and salary grid modifications, as well as

the
Police
Department’s recruitment and retention incentive package which was funded by salary savings .

These increases were partially offset by a reduction in

Other Operating Transfers Out
, due to
reduced contributions to the Section 115 CEPPT fund.

General Fund-Operating Fund

Expenditures by Department

As shown in the table above, most departments are expected to remain within budget with the General Fund-Operating Fund projected to operate at a surplus of

$4.
8 million by fiscal year-end. This
is primarily the result of departmental vacancies across the General Fund. As of December 31, 2024, the General Fund had 154.1

FTE vacant positions. While this represents a decrease of

5.0 FTE
vacancies from the same period in the year prior, the City continues to experience challenges in attracting and retaining qualified candidates and currently has many recruitments underway. As part of efforts to overcome this challenge, City Council approved an

e
nhanced Recruitment and Retention
Incentive Pilot program for the Police Department in July 2024

, to be funded by salary savings in the
Police Department.

Expenses
Amended
Budget
July-December
Actuals

Budget
Expended
Amended
Budget
July-December
Actuals

Budget
Expended
Annual
Projected Total
Projected
Surplus/(Deficit)

% of
Budget
City Council 580,611$ 254,355$ 43.8% 577,734$ 255,477$ 44.2% 554,159$ 23,575$ 95.9% City Manager 6,677,469

3,067,980

45.9% 7,736,510

3,382,876

43.7% 7,490,206

246,304

96.8%
City Attorney 3,108,064

1,465,612

47.2% 3,397,091

1,458,560

42.9% 3,146,491

250,600

92.6%
City Clerk 1,359,558

553,226

40.7% 1,664,355

557,825

33.5% 1,499,150

165,205

90.1%
City Treasurer 343,088

179,831

52.4% 483,686

187,134

38.7% 452,822

30,864

93.6%
Finance 6,251,439

2,615,848

41.8% 6,263,088

2,723,356

43.5% 6,121,791

141,297

97.7%
Human Resources 2,381,441

1,085,238

45.6% 3,244,183

1,387,514

42.8% 3,068,108

176,075

94.6%
Civil Service 1,035,845

482,380

46.6% 1,144,051

422,327

36.9% 1,043,053

100,998

91.2%
Community Development 9,815,788

4,329,726

44.1% 10,600,313

4,928,500

46.5% 10,103,669

496,644

95.3%
CIT 8,782,395

4,058,855

46.2% 9,400,911

4,308,467

45.8% 8,993,544

407,367

95.7%
General Services 10,493,231

4,664,661

44.5% 12,000,152

5,849,911

48.7% 11,668,025

332,127

97.2%
Non-Departmental 22,384,648

25,697,771

114.8% 12,064,204

17,826,402

147.8% 12,962,403

(898,199)

107.4%
Police 95,424,934

42,843,698

44.9% 101,934,294

50,523,060

49.6% 100,777,674

1,156,620

98.9%
Fire 59,352,214

28,783,050

48.5% 69,315,045

33,989,198

49.0% 68,326,434

988,611

98.6%
Public Works 19,315,737

8,535,313

44.2% 21,111,493

9,145,550

43.3% 20,736,213

375,280

98.2%
Community Services 24,593,691

11,198,719

45.5% 26,577,596

11,894,772

44.8% 25,817,033

760,563

97.1%
Total Expenses 271,900,153$

139,816,263$

51.4% 287,514,706$

148,840,929$

51.8% 282,760,775$

4,753,931$

98.3%
Prior Year FY23-24 Current Year FY24-25
222

9 Citywide-Vacancies by Department

The table above shows a summary of departmental vacanc ies as of

December 31,
2024

. The
estimated annual cost shows projected cost savings if these vacancies

were to remain vacant
throughout the fiscal year , which differ s from projected savings in this rep ort. When the City experiences vacancies , increased overtime costs are experienced with current staff needing to provide the same level of service to the community , which deteriorate the above amounts. Another reason for the difference is the enhanced Recruitment and Retention Pilot Program in the Police Department. These two factors are key in explaining why the

amounts above are not fully realized
when positions

are

vacant
.

These vacancies are examined in greater detail in the

appropriate fund’s
sections of this document.

Areas of Focus
There are multiple areas that staff are tracking closely that will require attention in the near term and over the coming budget cycles, including:
•

Self-Insurance Fund, which

is

underfunded by approximately

$

52.1 million

•

Cash Balances by Fund
•

Labor Trends
•

Expiring Labor Agreements
•

Aging Infrastructure and City Facilities/Parks
•

Pension/OPEB Benefits Liability Management

Department

General
Fund
Non-Major
Governmental
Funds

Enterprise
Fund

Internal
Service Total
General
Fund
Non-Major
Governmental
Funds
Enterprise
Fund
Internal
Service
Fund Total
CIT 8.0 - - - 8.0 1,096,390 - - - 1,096,390 City Attorney 2.0 - - - 2.0 264,891 - - - 264,891 City Clerk 2.0 - - - 2.0 178,879 - - - 178,879 City Manager 6.6 - - - 6.6 537,687 - - - 537,687 Community Development 5.5 0.5 - - 6.0 592,571 64,371 - - 656,942 Community Services 12.0 - - - 12.0 1,182,556 - - - 1,182,556 Finance 3.0 - - 1.0 4.0 478,525 - - 92,951 571,476 Fire 15.5 - - - 15.5 3,348,635 - - - 3,348,635 General Services 5.0 - 2.5 2.5 10.0 556,725 - 248,096 336,792 1,141,613 Human Resources 1.0 - - - 1.0 81,079 - - - 81,079 Police 72.0 - - - 72.0 13,312,291 - - - 13,312,291 Public Works 21.5 - 10.5 - 32.0 2,024,277 - 1,243,536 - 3,267,814 Transit - - 27.3 - 27.3 - - 2,494,259 - 2,494,259 Total 154.1 0.5 40.3 3.5 198.4 23,654,505$

64,371$

3,985,891$ 429,744$ 28,134,511$
Vacant Fulltime Equivalents (FTE's) Estimated Annual Cost 223

10 Self-Insurance Fund
The City’s Self -Insurance Fund covers expenditures associated with non -litigated claims, liability claims and settlements, workers’ compensation cases, and unemployment insurance payments.

This fund generates its revenues by allocating costs to the General Fund, Enterprise Funds, and Internal Service Funds. As of June 30,

2024

, this fund was

underfunded by approximately $

5 2.1
million. This is driven by existing outstanding liabilities in workers’ compensation totaling $ 52.7

million and liability claims of $14.8

million.

This
fund

shows slight improvement

when comparing
to
the underfunded

balance of $54.0 milli
on

as of June 30, 2023.

As of

December 31
, 2024, the cash balance in this fund stands at only $ 21.4 million, and

the Self
-
Insurance Fund is approximately 29.5% funded, which continues to place it in the High-Risk Category of the City’s Key Performance Indicator tracking. Given these trends, the City may recommend one- time contributions from the General Fund -Operating Fund’s

projected
operating surplus to help
restore the Self -Insurance Fund’s overall position. This will be a continued

Area of Focus
in future
quarterly budget updates and budget cycles to ensure the City is adequately prepared for funding its exposure.

Cash Balances by Fund
Although cash balances are currently sufficient to manage overall day -to-day operations, the table below shows the cash balances distribution as of

December 31,

202

4 and highlights the fund
categories that are relatively low for operations of their sizes.

As shown above, the City’s General Fund only sits at a cash balance of $ 43.1 million. This represents a small portion of the City’s pooled cash utilized for investments during the fiscal year. For reference, the current General Fund cash balance represents

12.8 % of all cash on hand, while the total General
Fund expenditure budget represents 65.5

% of the City’s total FY24
-25 Amended Budget. As the City
Fund Category
End Cash Balance
Q2 FY2024-25 Example Funds
Enterprise Funds 119,178,730$ Airport; Sanitation; Sewer; Water; Transit Nonmajor Governmental Funds 79,321,514 Meaure M; Prop A; Prop C; Measure W; Gas Tax General Fund 43,069,037
Internal Svc - Self-Insurance Fund 21,397,105
Internal Svc - Fleet Services Fund 34,556,351
Fiduciary Funds 9,915,340 INSB; Area G; Low Mod/RDA/Succesor Capital Improvement Fund 23,060,738 General Fund CIP Internal Svc - OPEB Fund 5,292,708
Total 335,791,523$

224

11 focuses on replenishing fund balances in the General Fund and Self -Insurance Fund, this will also help to improve the overall distribution of its cash balances.

Labor Trends
As of

December 31, 2024
, 24

1 employees are eligible for retirement (based 55 years of age; Employee Classification A). As the workforce ages, City staff will continue to monitor retirement eligibility for proper succession planning. Beginning in FY21

-
22, the City sustained a significant spike in
retirements and voluntary resignations. The most cited reasons for recent departures have been better salaries, benefits, flexibility and advancement opportunit

y
. As negotiations

have
settled
and progressed across the different groups, labor a

greements aimed to align salaries and benefits to
comparable cities within budgeted levels

have been
a primary focus to address these departure
reasons. As part of that effort, City Council approved an Enhanced Recruitment and Retention Incentive Pilot program in 2024 for the Police Department, w hich has been heavily impacted by consistently higher vacancy rates. As a result of this

Pilot pro
gram, 128

Police Officers and 14 Public
Safety Dispatchers have been placed on eligibility lists for department

hirin
g.

The number of retirements and voluntary resignations

has improved since the peak of FY21
-22 and
FY22-23

, however we are experiencing increases
compared to the same period during the year prior.

As of the

six
-month period ending

December
31, 202

4 , there have been

30 retirements and

44 voluntary resignations, compared to 20

and

44 during the prior year, respectively.

FY20-21 FY21-22 FY22-23 FY23-24
6 Months of
FY24-25
Retirement 57 72 59 33 30
Voluntary Resignation 42 133 121 96 44
Departure or Death 11 13 21 18 10
Total 110 218 201 147 84
225

12 Expiring Labor Agreements
The City’s agreements with the various labor groups follow different terms.

Below is a table that
summarizes the

status

of the City’s eleven unions and/or associations:

The City has put an emphasis on negotiating labor agreements designed to address gaps with the city’s compensation and the labor market. These efforts are aimed at improving the elevated vacancy rates that have been sustained for multiple years.

The City anticipates settling the remaining
labor agreements in the near term and will continue to be diligent in ensuring pay and benefits are competitive and that the City can attract top talent to deliver services for the community . For reference, it is estimated that across all funds, it costs the city approximately $ 2.1 million for every 1% in negotiated wage increase for

all

the City’s various bargaining units.

Aging Infrastructure and City Facilities/Parks
The City owns and operates over $500 million worth of buildings, public facilities, and infrastructure.

With each passing year, these buildings age and deteriorate, many of which are still in their original condition. Currently, the City’s capital assets h ave reached their half -life mark, requiring heavy maintenance, upgrades, and repairs. During

FY23
-24

,
the City completed a

Facility
Index Study and
assess

ed
the current state of the City’s building and park assets. The FY24-25 Capital Improvement Plan was designed to better address the ongoing and recurring maintenance at City facilities every year. Measure SST will provide a dedicated stream of funding to improve City parks and other areas throughout the community. For FY24 -25

, $

7.8 million of Measure SST funds

was
dedicated towards
capital improvements.

With that said, the FY24
-25 budget identified an approximate $ 13.0 million
funding gap each year between the needed investment in building and park assets and the amount the budget can sustain each year. This will be of continued focus in coming budget cycles to ensure the City’s assets are properly maintained.

Labor Group
Expiration
Date Status
Crossing Guards 6/30/2024 Pending Negotiations
Engineers & Torrance Fiscal Employees Association (Engineers & TFEA) 6/30/2028 Settled Torrance City Employees Association (TCEA) 6/30/2028 Settled Torrance Fire Fighters Association (TFFA) 12/31/2027 Settled Torrance Library Employees Association (TLEA) 6/30/2024 Pending Negotiations Torrance Municipal Employees (AFSCME) 6/30/2024 Pending Negotiations Torrance Police Commanders Association (TPCA) 12/31/2025 Settled Torrance Police Officers Association (TPOA) 12/31/2025 Settled Torrance Professional & Supervisory Association (TPSA) 6/30/2028 Settled Torrance Professional Park & Recreation Employees Organization (TPPREO) 6/30/2028 Settled Torrance Recurrent Recreational Employees Organization (TRREO) 6/30/2028 Settled 226

13 Pension/OPEB Benefits Liability Management
In FY2 3-24, the California Public Employees’ Retirement System (CalPERS)

reported preliminary

investment gains of

9.3%,

2.5% higher than the 6.8% discount rate. This

will
translate to

a decrease

in unfunded actuarial liability (UAL) and the amortized repayment over the next 20 years, beginning in FY26-27. To elaborate, citywide, the annual UAL payment will

range
from $6.2 million in FY24-25
to approximately $ 36.5 million in FY3 3-34. The impact of these recent returns will be incorporated into the City’s 10-year forecast

during the coming budget cycle
.

To help mitigate the impacts of UAL
costs ramping up in the coming ten -year period, the City established a Section 115 Trust with CalPERS (CEPPT). This restricted fund serves as a supplemental reserve to the City’s Unassigned Fund Balance, specifically dedicated to pension costs.

It is anticipated that the City will need to make
its first drawdown from the

CEPPT Fund
in FY25-26

to smooth the rising pension costs

previously
mentioned.

Economic Outlook
Federal Funds Rate
The Federal Funds Rate is the benchmark borrowing rate

largely
determined by the U.S. Federal
Reserve System (Fed) from which fixed income instrument, loan, mortgage, and credit card rates are based. Typically, a higher federal funds rate

incentivize

s
saving while

a
lower rate incentivize s
spending and borrowing. For city governments, a lower federal funds rate —

coupled with

a low
inflation rate—could mean increased tax revenues from economic growth as well as more affordable borrowing for critical projects.

The Fed significantly raised the federal funds rate

between
March 2022 and July 2023

,
aiming to
reduce post-pandemic inflation by incentivizing saving rather than spending . Since inflation successfully began to

fall
, the Fed maintained

its

5.25% - 5.50% target federal funds rate

until
September 2024, at which point it

began
to slightly lower the

target

rate.

The Fed has followed with
two more rate cuts in November and December 2024

but signaled no urgency

for further reductions,
citing a strong job market a nd lingering inflation. The Fed’s three most recent target federal funds rate actions

are summarized below:

Federal Reserve Meeting Action Taken Target Fed Fund Rate December 19, 2024 -25 basis points 4.25% - 4.50%
November 8, 2024 -25 basis points 4.50% - 4.75%
September 19, 2024 - 50 basis points 4.75% - 5.00%

227

14 Consumer Price Index (CPI) and Inflation
The Consumer Price Index (CPI)

tracks
changes in the average prices

of
consumer goods and services.

Annualized percent changes in CPI

reflect
a measure of inflation. The U.S. Federal Reserve System (Fed) has a target inflation rate of 2%

.

Inflation that is substantially

higher

or lower
reflects unstable
prices that make

financial planning

more difficult

and

often

hinders economic growth
.

The chart below shows inflation for the local region

using
CPI-U, CPI for All Urban Consumers . As
shown below, inflation climbed to a peak of 8.6% in June 2022

,
but federal funds

target
rate increases
helped

move inflation down to

2. 8% by September 2024

.

Inflation has

slightly
increased to 3.4%
since, however , the Federal Reserve System believes

their dual mandates of achieving maximum
employment and stable prices

are
nevertheless roughly balanced

for now
.

Real Gross Domestic Product (Real GDP)
Real GDP reflects the value of all goods and services produced by an economy

each year
controlled
for inflation. Essentially, it measures a country's total economic output and is particularly useful

for
analyzing economic growth over time.

According to the most recent data available from the U.S.

Bureau of Economic Analysis, national real GDP is up

by

2.7% in the third calendar quarter of 202 4
compared to the same period

last
year, and it is up by 2.5% in the

fourth
calendar quarter compared
to the same pe riod last year . The latter increase is primarily due to

increase
d consumer and
government

spending that is

partly offset by decrease
d

investment.

228

15 The increase in consumer spending reflected increases in both goods and services. According to the U.S. Bureau of Economic Analysis’ press release, t he increase in goods were led by spending on information processing equipment and new light trucks, goods that could potentially be affected by the imposition of tariffs , and services growth was led by hospital and nursing home services and outpatient services.

State and local g

overnment spending was driven by

increases in employee
compensation, while defense

spending drove federal government

spending.

Source: Bureau of Economic Analysis

Labor Market

The unemployment

rate
indicates the percentage of people who are unemployed out of the total number of people

working or actively seeking work.

As of

December
2024, the U.S. unemployment
rate was

4 .1%; California’s was

5. 5%; and Los Angeles (L.A.) County’s was

6 .0%. Like national, state,
and county results, local unemployment rates

peaked
during summer 2024

but have since
decreased. The U.S. Department of Labor ’s Employment Situation report for

December
2024
highlighted that the

decrease

in unemployment

was indeed due to more people finding jobs
and
increased employment rather than a decline in the number of people looking for work. As well, the National Conference of State Legislatures 2025 Forecast reported a trending increase in reemployment after retirement.

229

16 Source: National Conference of State Legislatures, State of California

-

EDD

While California and L.A. County unemployment rates are higher than the national level, Torrance unemployment levels fare better with an unemployment rate of

3.8 % and 4.5%

at the end of calendar
year 2023 and 2024, respectively. Although Torrance had a higher local unemployment rate in Q

4 2024

than the national average,

unemployment in
Torrance

remains

lower

than

other

nearby cities.

Source:

Employm
ent Development Department, State of California

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
National 3.5% 3.6% 3.7% 3.8% 3.8% 4.1% 3.7% 4.1%
California 4.3% 4.5% 4.6% 4.9% 5.3% 5.2% 5.3% 5.5%
Los Angeles County 5.3% 4.9% 5.0% 5.0% 5.4% 5.3% 6.0% 6.0% Carson 5.4% 4.7% 5.3% 4.9% 5.3% 5.9% 6.0% 5.5%
Gardena 5.0% 4.8% 5.4% 4.7% 4.8% 5.7% 6.1% 5.6%
Glendale 5.2% 4.7% 5.7% 4.9% 5.0% 5.7% 5.8% 5.6%
Hawthorne 5.2% 4.8% 5.3% 4.7% 5.2% 5.7% 5.8% 5.6%
Inglewood 5.8% 5.3% 6.1% 5.5% 5.9% 6.8% 7.1% 6.3%
Santa Monica 5.4% 5.1% 5.9% 5.0% 5.4% 5.8% 5.8% 5.6%
Torrance 4.1% 3.8% 4.3% 3.8% 4.2% 4.9% 4.9% 4.5%
Local Unemployment Rate Trends
20242023
230

17 Consumer Confidence Index
The Consumer Confidence Index

is a critical driver of the U.S. and local

economy which measures
consumer confidence levels regarding their financial situation, sentiment about the general economic situation, unemployment, and capability of savings. According to the Conference Board Consumer Confidence Index survey, consumer con fidence rose in December 2024 to 109.5, its highest

quarterly point
, up from

99.2 in September
,

97.8 in

June,

and

103.1

in
March

202

4. This increase in consumer confidence was

accompanied by
increased consumer spending. As the
Wall Street Journal

notes,
“consumer spending, which accounts for more than two -thirds of the economy, rose at a 4.2% pace, the fastest since early 2023.” However, economists note

this
is unlikely
to repeat in the first quarter of 2025.

Ear
ly January report s show that consumer confidence

has
declined with the expectation of higher inflation and new import tariffs. As for expectations in

the

coming six months

,
the report also shows that

consumers were less optimistic about the outlook for
business conditions and income prospects and remained pessimistic about labor market conditions.

231

18 Reserve Balances
The City’s adopted fiscal policy sets a 20% unassigned fund balance which translates to approximately $ 57

.
5 million based on the currently approved expenditure appropriation for the General Fund -Operating Fund. The total unassigned fund balance of the City’s General Fund is projected to end at $ 81.6 million for FY24 -25. By reaching the 2 8.4% mark, the key performance indicator for the City’s General Fund Reserves will now be in the Low -Risk category. Although the State Auditor’s High

-
Risk Dashboard was discontinued as of October 2023, staff continues to benchmark against the State Auditor’s

previous recommendations.

The State Auditor’s High

-
Risk Dashboard previously recommended greater than nine months of operating costs, which translates to 75% or $2 15.6 million of

the General Fund -Operating Fund’s
current expenditure appropriation. To be considered “Low -Risk” on the State Auditor’s High

-
Risk
Dashboard would require six months of operating costs, which translates to 50% or $ 143.8 million.

In the future, staff may recommend adjustments to increase the City’s General Fund reserve goals and fund balance levels to further

improve fiscal resiliency.

General Fund-Unassigned Fund Overall Fund Balance Projections

In addition to the above reserves, the City established a Section 115 Fund through CalPERS

(CEPPT)

in June 2021 and began making annual contributions in FY21

-

22. This is a separate reserve dedicated
specifically to pension costs and

is another
valuable tool in addition to the City’s unassigned fund balance shown above. Below is a summary table that highlights the current and projected balance of this fund as of FY24-25.

Annual contributions

to this fund

represent a minimum

amount equivalent to 20%
of the projected
savings from the issuance of the 2020 Lease Revenue Bonds that were used to pay down a majority of the City’s CalPERS Unfunded Actuarial Liability (UAL).

In recent years, the City has been able to
Unassigned Fund Balance
Beg Bal -
FY22-23
Additions/
(Uses)
End Bal -
FY23-24
Projected
Additions/
(Uses)
Proj End Bal
FY24-25
Reserve Fund - Economic Anomaly 8,081,847$ 4,802,423$ 12,884,270$ -$ 12,884,270$ Reserve Fund - Litigation -

-

-

-

-

Other Unassigned 55,338,393

10,526,798

65,865,191

2,349,062

68,214,253

Total 63,420,240$

15,329,221$

78,749,461$

2,349,062$

81,098,523$

Beg Bal -
FY22-23
Additions/
(Uses)
End Bal -
FY23-24
Projected
Additions/
(Uses)
Proj End Bal
FY24-25
Restricted Fund - Section 115 Trust (CEPPT) 3,668,763$ 24,123,084$ 27,791,847$ 10,593,227$ 38,385,074$ 232

19 accelerate contributions due to one - time savings realized from CalPERS outperforming its discount rate in FY20

-
21 .

The projected balance above

is available for future budget cycles to smooth the
increases in CalPERS cost experienced by the City.

Conclusion
The City continues to prioritize efforts with respect to development across the City to ensure continued growth in the City’s revenue base

. In 202

4 , the

Community Development Department
issued over 7,900

permits with

a
job valuation

for
permits submitted

totaling
$223.0

million,
compared to $157.2 million in 2023. Below are a handful of developments in Torrance, at various stages:
 Fashion Square Project/21515 Madrona Avenue

–
This multi-family residential project will
add 260 townhome

units.

 Pleskow Architects/3475 Torrance Blvd

–
This mixed -use development will add 106
apartment units and 12,558 square feet of medical office space.  Del Amo Circle Apartments/21507 Hawthorne Blvd

–

This multi
-family apartment building
will add

200 units and a multi
-story parking structure.

 Gable House

/
22501 Hawthorne Blvd – This multi-family residential project on Hawthorne Boulevard is currently under construction and will add 218 units for rent (17 very low-income affordable units).
 Rose Equities/2325 Crenshaw Blvd – This multi -family residential project on Crenshaw Boulevard was recently approved by City Council and

will

add 272 units for rent.

Given the levels of development interest, on January 23, 2024, Staff recommended to City Council the creation of a community facilities district (CFD) to mitigate the additional costs associated with private developments. On September 10, 2024, City Council conducted a public hearing, and Staff

is
currently moving

forward with the next steps in creating a CFD in the upcoming months.

233

20 Recommendation
Based on the information provided in this summary, it is the recommendation of the Finance Director that the Finance and Governmental Operations Committee accept and file the Fiscal Year 2024 -25 Mid-Year

Budget Review Report and authorize staff to bring forward to City Council at a future date.

Respectfully submitted,
__ _____________________
CONCUR: Ian Dailey
Finance Director
_______________________
Aram Chaparyan
City Manager

234
Mid-Year Budget Review Report

PROGRAM MODIFICATIONS
235
ATTACHMENT 4

21 Program Modifications and Other
Updates

Program Modifications
This section provides a summary of Program Modifications that will be presented to City Council for consideration and

approval.

Community Development Department
Delete 1.0 FTE Planning Associate and Add 1 .0 FTE Senior Planner Expenditure:

None

The Community Development Department is requesting the conversion of

1.0 F
ull-Time Equivalent
(FTE) Planning Associate

to

1.0 FTE Senior Planner. On October 29, 2024, the City Council approved the Resolution 2024

-
81, which added the position of Senior Planner to the Engineers and Torrance Fiscal Employees Association , as a

result of removing

a
20% premium

that was provided to a
Planning Associate who was primarily responsible for overseeing major projects and complex administrative cases as assigned.

On January 14, 2025, the City Council approved the proposed Class Specification for Senior Planner.

Th
is conversion has no fiscal impact, and the program modification is brought for approval to memorialize the conversion of the budgeted position change to align with the Resolution.

Increase General Fund – Community Development

Revenue and
Expenditure

Budget by
$250

,

000

The Community Development Department is requesting to

increase
the General Fund’s revenue and
expenditure operating budget to facilitate collection and payment of expedited plan review services.

The City of Torrance's Community Development Department Building and Safety Division requires engineering plan reviews of most proposed development projects. It’s not uncommon for applicants to choose expedited plan review service to meet their project sch edules or specific needs. These projects range from small single-family additions to large mixed-use developments.

To facilitate the expedited plan reviews, the department uses outside engineering consultants to facilitate the plan reviews. The fee charged to the applicant by the department is matched to the cost associated with the plan review services provided by the

outside consultant.

236

22 General Services Department
Increase Airport Fund - Operating Fund Revenue and Expenditure Budget by $ 2,0 00,000 The General Services Department is requesting an increase of

$
2,000,000 to the

Airport
Fund –
Operating Fund’s revenue and expenditure budget for FY2024 -25. This adjustment is related to reimbursements of litigations costs incurred. Since the litigation is related to leasing of a commercial property outside of the airfield, the reimbursements increase the amount to be

transferred to the
General Fund Operating Fund; thus, the request is to increase both revenue and expenditure budgets to accommodate the transfers.

Public Works Department
Increase Water Fund - Operati ng Fund Revenue and Expenditure Budget by $ 3,900,000 The Public Works Department is requesting an increase of $3,900,000

to the

Water

Fund

–

Operating
Fund’s revenue and expenditure budget for FY2024-25. This adjustment is related to the purchase of recycled water from the West Basin Municipal Water District (WBMWD ), an expense that is

fully
reimbursed through

revenues primarily from the Torrance Refining Company (TRC) and commercial accounts using

recycled water for landscape irrigation. The increase is

necessary
due to

significantly

higher recycled

water
rates from WBMWD than

initially
projected, as well as to cover the full pass -
through of fixed service charges levied by WBMWD , which are fully recovered through

our monthly
billings to TRC.

237
Mid-Year Budget Review Report

GENERAL FUND
238

23 General Fund
Overall Mid -Year Results
The City’s General Fund is the main operating fund of the city, used to account for essential services and activities that are not restricted to a specific purpose. It accounts for the city's core operations, including public safety (police and fire), portions of

public works, parks and recreation, libraries, and
administrative functions. The General Fund, as reported annually in the Annual Comprehensive
Financial Report (Annual Report) , is comprised of multiple sub-funds within its overall structure. This includes the City’s General Fund -Operating Fund, the City’s General Fund-Measure SST Fund, the City’s General Fund -Restricted/Assigned sub -funds, and the City’s General Fund -Unassigned sub- funds. All of these areas are consolidated under the General Fund umbrella in the City’s

Annual
Report. The activities in each of these

funds

impact
the overall performance of

the General Fund, so
this is reviewed in total and then broken down by each of its components.

This portion of the report

will

be broken

down into four

main sections:

•

General Fund-Operating Fund

–

Focuses on the

City’s

main

o
perating

f
und.
o

General Fund-Operating Fund

Revenue
Analysis

– Focuses on the

revenues of the
General Fund-Operating Fund.
o

General Fund-Operating Fund

Expenditure

Analysis

–

Focuses on the
expenditures
of the

General

Fund
-Operating Fund.
•

General Fund-Measure SST Fund – Focuses on the revenues and expenditures related to the

0.50% transaction and use tax (sales tax) approved by Torrance voters in June 2022. •

General Fund -Restricted/Assigned Fund

– Focuses mainly on the City’s various General
Fund Replacement Funds, the City’s CEPPT

Section
115 Fund (pension prefunding), Cable’s
PEG Funds, and other assigned/restricted sub-funds of the overall General Fund. •

General Fund-Unassigned Fund

– Focuses mainly on the City’s General Fund Reserve Fund and any other

unassigned sub
-funds as reported in the Annual Report of the overall General Fund.

The General Fund’s adopted FY24 -25 operating budget is balanced, with planned contributions aimed at increasing the fund balances of other sub-funds. These contributions are primarily directed toward the City’s replacement funds and the CalPERS CEPPT Secti

on 115 Fund.

The General

Fund
performance, including all sub -funds, for the Mid -Year of FY24 -25 is summarized in the following table.

239

24 General Fund Revenues and Expenditure s Summary

The General Fund, including all sub -funds, is projected to close the fiscal year with a

$14.6 million
surplus, driven by:

• A $ 9.4 million contribution to the City's CEPPT Section 115 Fund. • Expenditure surplus of $5.9 million ($4.8 million surplus in the General Fund -Operating Fund and $1.1

million surplus in the General Fund
-Measure SST Fund)

As of December 31, 2024 , the City has received $136.6 million in General Fund revenues, representing 41.3% of the FY24-25 budgeted amount. This reflects an increase from the same period last year, when

$131.1 million
or 40.3% of the FY23-24 budget was collected, marking a

$5.5 million
year-over-year increase . Overall, General Fund revenues are projected to reach

$330.6 million
,
slightly exceeding the FY24 -25 budget by

$0.1 million
. This is primarily driven by

surpluses in the
Use of Money and Property

and
Operating Transfers In and partially offset by shortfalls in the Taxes

and

Charges for Services
.

Looking at General Fund Expenditures , $174.3 million or 54.2% of the FY24 -25 budget has been spent as of December 31, 2024

,
up from

$152.6 million
or 51.4% at the same point last year. By fiscal
year-end, total General Fund expenditures are projected to reach

$316.0 million
, resulting in an
estimated

$5.9 million
budget surplus.

For a detailed breakdown, please refer to the

General Fund
-Operating Fund Revenue and
Expenditure Analysis

sections of the report.

Amended
Budget
July-December
Actuals

Budget
Realized
Amended
Budget
July-December
Actuals

Budget
Realized
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Total Revenues 325,283,203$ 131,147,306$ 40.3% 330,473,751$ 136,628,937$ 41.3% 330,615,151$ 141,400$ 100.0% Total Expenses 296,769,925 152,598,354 51.4% 321,853,534 174,342,703 54.2% 315,970,066 5,883,468 98.2% Rev. Less Exp. 28,513,278$ (21,451,048)$ 8,620,217$ (37,713,766)$ 14,645,085$ 6,024,868$ Prior Year FY23-24 Current Year FY24-25
240

25 General Fund-Operating Fund Mid-Year Results
This section highlight s the City’s main operating fund , which represents the largest portion under the overall structure of the General Fund as reported in the Annual Report . Below is a financial summary of this

f
und as of the

Mid
-Year

of FY
24 -
25 :

General Fund-Operating Fund

Revenue
s

and Expenditure
s

Summary

Year-to-date revenues are up by $14.2 million when comparing year to year. As of December 31, 2024, the General Fund-Operating Fund realized revenues of

$
109.4 million, achieving

38.1 % of the

FY
24 -
25 revenue budget. During the same period ending December 31 , 2023

, the City realized

$

95.2 million

in revenues, representing

35.0% of the FY23-24 revenue budget.

Overall
, the General Fund-
Operating Fund’s revenue budget is projected to operate at a

deficit
of $ 1.0 million due to the
following main factors:
•

Operating Transfers In

above budgeted expectations by $

1.3 million.
•

Taxes

below

budgeted expectations by $

1.2 million
.
•

Charges for Services

below budgeted

expectations by $

0.9 million

.

As of

December 31
, 2024, the General Fund -Operating Fund expended

$
148.8

million or 51.8% of
the FY24-25

expenditure budget. For the same period in

FY23
-24, expenditures totaled

$
139.8
million or 51.4

%
of the budget. The current spending rate aligns with expectations and will be further discussed in the

General Fund
-Operating Fund Expenditure Analysis

section. Originally
adopted as a balanced budget, General Fund -Operating Fund is now projected to end the year with a

$

3.3 million

surplus.

General Fund-Operating Fund Revenue Analysis
This section highlights the revenues of the main General Fund -Operating Fund. The City’s General Fund-Operating Fund revenue budget for FY24

-
25 increased by $15.4 million or 5.7% for a total

of

$287.1 million. This is largely due to steady growth in Taxes, Use of Money and

P
roperty, and
Charges for

S
ervices. Details of

revenue activity for the six months ending December 31,

2024,
are
covered in the following section . It is also important to note that

the Measure SST transaction and
use tax , enacted October 1,

2022

,
benefits the General Fund -Operating Fund Revenue through Operating Transfers In classification to support public safety and

cyber security
infrastructure.

Amended
Budget
July-December
Actuals

Budget
Realized
Amended
Budget
July-December
Actuals

Budget
Realized
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Total Revenues 271,689,666$ 95,166,859$ 35.0% 287,065,655$ 109,420,973$ 38.1% 286,065,425$ (1,000,230)$ 99.7% Total Expenses 271,900,152 139,816,261 51.4% 287,514,706 148,840,929 51.8% 282,760,773 4,753,933 98.3% Rev. Less Exp. (210,486)$ (44,649,402)$ (449,051)$ (39,419,956)$ 3,304,652$ 3,753,703$ Prior Year FY23-24 Current Year FY24-25
241

26 Overall, the City’s General Fund -Operating Fund revenue is projecting a year -end deficit of $ 1.0 million.

General Fund-Operating Fund Revenues

by Classification

As of

December 31
, 2024 , the General Fund -Operating Fund realized re venues of

$
109.4 million,
achieving 38.1% of the FY24

-
25 revenue budget. During the same period ending December 31, 2023

,
the City realized

$

95.2 million

in revenues, representing

35.0%

of the

FY2
3-24

revenue budget.

It is
important to note that certain General Fund -Operating Fund revenues are not

fully
realized until
after December, including property tax, business license taxes and most franchise fees. The timing of these receipts and current economic factors

results
in variances from the annual budget which are
discussed in more detail below.

Most General Fund -Operating Fund revenues are generated from the Taxes classification, which include sales and use taxes, property taxes, utility users’

taxes,
occupancy taxes, and franchise taxes.

The Taxes classification accounts for approximately

74. 7% of the City’s General Fund -Operating
Fund

revenue budget for

FY24
-25

.

General Fund-Operating Fund

Tax Revenues by

Type

Overall, the City ’s tax revenues are expected to fall short

of
the FY24-25

amended budget by $ 1.2
million, primarily driven by

lower collections of

utility users’

tax of $2.5 million, offset by

a
surplus in
franchise taxes of $1.3 million. Details of the

specific revenue sources and corresponding
increases
and decreases

are discussed in the following sections.

Revenues
Amended
Budget
July-December
Actuals

Budget
Received
Amended
Budget
July-December
Actuals

Budget
Received
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Taxes 209,861,473$ 66,773,099$ 31.8% 214,595,854$ 69,352,398$ 32.3% 213,371,505$ (1,224,349)$ 99.4% Licenses, Fees and Permits 5,773,777 2,534,971 43.9% 5,429,133 3,252,123 59.9% 6,001,320 572,187 110.5% Fines, Forfeitures and Penalties 760,672 227,119 29.9% 642,774 333,158 51.8% 712,510 69,736 110.8% Use of Money and Property 4,527,970 3,261,475 72.0% 7,154,388 3,627,392 50.7% 6,614,040 (540,348) 92.4% Intergovernmental 349,501 32,342 9.3% 490,127 45,357 9.3% 327,950 (162,177) 66.9% Charges for Services 23,910,796 10,517,597 44.0% 25,217,466 11,927,104 47.3% 24,332,220 (885,246) 96.5% Other Revenues 209,360 219,846 105.0% 319,604 86,858 27.2% 203,240 (116,364) 63.6% Operating Transfers In 26,296,117 11,600,410 44.1% 33,216,309 20,796,583 62.6% 34,502,640 1,286,331 103.9% Total Revenues 271,689,666$ 95,166,859$ 35.0% 287,065,655$ 109,420,973$ 38.1% 286,065,425$ (1,000,230)$ 99.7% Prior Year FY23-24 Current Year FY24-25
Revenues
Amended
Budget
July-December
Actuals

Budget
Received
Amended
Budget
July-December
Actuals

Budget
Received
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Business License Tax 10,197,549$ 2,617,580$ 25.7% 11,314,294$ 3,380,760$ 29.9% 11,305,490$ (8,804)$ 99.9% Construction Tax 2,033,484

456,704

22.5% 1,572,665

1,097,227

69.8% 2,383,426

810,761

151.6%
Franchise Taxes 9,831,080

1,646,075

16.7% 11,507,535

1,775,334

15.4% 12,807,450

1,299,915

111.3%
Occupancy Tax 13,126,729

4,405,181

33.6% 13,815,048

4,316,660

31.2% 13,108,030

(707,018)

94.9%
Oil Severance Tax 14,041

668

4.8% 7,000

1,263

18.0% 5,000

(2,000)

71.4%
Property Taxes 47,137,917

19,292,961

40.9% 48,288,709

20,448,465

42.3% 48,945,310

656,601

101.4%
Real Prop Transfer Tax 828,540

425,984

51.4% 1,016,060

481,841

47.4% 948,080

(67,980)

93.3%
Sales and Use Tax 64,400,972

20,500,433

31.8% 62,525,957

19,294,015

30.9% 61,487,941

(1,038,016)

98.3%
Utility Users Tax 44,465,104

17,427,513

39.2% 46,002,866

18,556,833

40.3% 43,535,600

(2,467,266)

94.6%
VLF Swap & Repayment 17,826,057

-

0.0% 18,545,720

-

0.0% 18,845,178

299,458

101.6%
Total Revenues 209,861,473$

66,773,099$

31.8% 214,595,854$

69,352,398$

32.3% 213,371,505$

(1,224,349)$

99.4%
Prior Year FY23-24 Current Year FY24-25
242

27 Sales and Use Tax
Sales and use tax es (sales tax)

is the City’s largest General Fund
-Operating Fund revenue source,
derived from point-of

-
sale transactions

(Bradley
-Burns 1% allocation) and Los Angeles County pool
allocations. The City receives sales tax revenue

from a wide range

of industries, as shown below.

Receipts of $19.3 million through the second fiscal quarter are tracking below prior year actuals by $1.2 million or 5.9%, and the annual

receipts are

projected to
fall short of

budget by $

1.0 million

which is mainly due to

decreased
consumer demand after the economy rebounded significantly from the COVID-19 pandemic. Sales tax receipts peaked in

FY
20 21
-22

at $63.6 million

and is projected to
pull back to $ 61.5

million in

FY24
-25

.

The forecast is projecting a decrease

of 0.6% from prior year

actuals or 1.7% below budgeted figures in the current fiscal year. As of the latest available data from the

California Department of Tax & Fee Administration, sales tax revenues are experiencing

declines

in Autos and

T
ransportation

,
General Consumer Goods , Business and Industry , and Building and Construction, while

Restaurants and Hotels and Fuel and Service Stations are experiencing increases
year-over-year.

With sales tax revenues

projecting
under budget ed amounts , s

taff
continue to be cautious with
forecasts. The Fed

maintained
the Federal Funds Rate

at
a range of

4. 25

-

4. 50

%
in January 2025

and
the Fed’s policy to slow inflation has affected sales across industries. For instance, the Autos and Transportation

,
General Consumer Goods , Business and Industry, and Building and Construction

industries have experienced a decrease

over the past year. In addition, the December 2024

year-over-
year change in Consumer Price Index for All Urban Consumers (CPI -U) was 2.9%. The inflation rate continues to drive up the cost of many taxable products and

consumer spending

is anticipated

to
remain

stagnant

through the

end of the

202
5 calendar year.

Autos &
Transportation 23%
Building &
Construction 7%
Business & Industry
10%
Food & Drugs 3%
Fuel & Service
Stations 4%
General Consumer
Goods 23%
Restaurants &
Hotels 11%
State and County
Pool 18%
Transfers 0%
Sales Tax by Industry Group
243

28 Property Tax, Property Transfer Tax, and Vehicle License Fee (VLF) Swap & Repayment Tax The City’s property tax base consists of a healthy mix of residential, commercial , and industrial properties, with the residential

category
comprising most of the total assessed value in Torrance.

Based on

calendar year 202

4 data from
property tax consultants,

HdL Coren & Cone,

the City’s

FY24
-
25 net taxable assessed value increased

to $

40.2 billion or 5.3% when compared to the same period
during the prior year, keeping Torrance in the top 10 highest value cities in Los Angeles County

at
eighth

place.

Property tax revenues are primarily received in December and April

of

each year. As of

December 31
,
2024

,
$20.4

million in property tax receipts were received compared to $19.3

million received during
the same period last year. Presently, the City projects the total year-end revenue to be

slightly higher
than the property tax budget by $888,000 for FY24-25, including property

transfer tax and vehicle
license

f
ee

s
wap & repayment.

In

2004,

the

California

Legislature

approved
a

property
tax

swap

of

v
ehicle license

f
ees (VLF) as part
of a state and local government budget agreement. As a result of the swap, more than 90% of the City’s Motor License Vehicle Fund was swapped for property taxes. The centerpiece of this legislation was the permanent reduction of the VLF rate. This revenue is received from the Los Angeles

County
Assessor

twice a year in January and May, and therefore not realized in the

second fiscal
quarter.

Utility Users’ Tax
Utility users’ tax (UUT), the City’s

third
largest revenue source, is a 6.5% consumption tax applied on the usage of utilities such as electricity and gas, and a 6.0% tax applied to water.

Residential, 67%
Commercial,
16%
Industrial, 9%
All Other, 8%
Land Use Composition by Taxable Value
244

29 Utility Users’ Tax by Type

Current period receipts of

$

18.6 million are higher by 6.5% compared to last year . Cellular, electricity, gas, and

w
ater experienced an increase from the prior year , while cable and telecom experienced a slight decrease. Receipts from the Torrance Refinery experienced a decrease in gas as production continues to normalize following planned maintenance in the second fiscal quarter of 2024

.

Presently, the City projects that total year -end revenue will

fall short of budget by
approximately $2.5 million or 5.4%, primarily due to the projected deficit in the

natural gas
consumption at the Refinery.

Business License

Tax

The City serves approximately

13,
987

businesses, including outside contractors. Annual renewals for this revenue source are billed in December, due on January 1 , and delinquent on February 1. As of December 31, 2024

, business license tax receipts are

higher than
prior year

by $763,000 or 29.2% and
are expected to

be within the

budget
by 1.0% at year-end. The increase in the year-to-date receipts is

mainly

due to the City’s

compliance

collection efforts

which began in December 2023.

Occupancy Tax
Occupancy tax is an 11% tax on room charges to guests staying at

hotels
, motels, and short-term
rentals. As of December 31, 2024

, the City has received $

4.3 million
, a

decrease

of $
89,000

compared
to December 31 , 2023

,
receipts of $ 4.4 million

.

The decrease

in the current year actuals is due to
timing of monthly receipts

being recognized

later

compared to the prior year.

Based on information
from data and analytics company STR, LLC,

the
City’s occupancy rate for the

twelve
months ending
December 31 increased

slightly
from 81.2% in 2023 to 81.7

%
in 2024. Additionally, the average daily
rate per room increased by $

4.24 or 2.6% during this same period. Overall, it is projected that occupancy tax receipts will fall short of

budget b
y

approximately $
707,000

, or

5.1%
.

Franchise

Tax

Franchise tax is

assessed to

entities
for the

privilege to operate within the

right
-of

-
way throughout
the City. The franchise taxes

collected
by the City are mainly from utility service providers, private waste haulers, and

the Enterprise Funds for

sanitation
, sewer, and water services . As of

December
Revenues
Amended
Budget
July-December
Actuals

Budget
Received
Amended
Budget
July-December
Actuals

Budget
Received
Annual
Projected Total
Projected
Surplus/(Deficit)

% of
Budget
Cable 1,575,385$ 553,558$ 35.1% 1,737,373$ 488,865$ 28.1% 1,301,030$ (436,343)$ 74.9% Cellular 1,296,803

554,778

42.8% 1,298,908

990,241

76.2% 2,958,070

1,659,162

227.7%
Electricity 20,912,992

9,918,139

47.4% 21,080,357

11,057,247

52.5% 23,083,680

2,003,323

109.5%
Gas 5,401,540

1,511,321

28.0% 6,003,793

1,864,184

31.1% 5,887,300

(116,493)

98.1%
Refinery: Co-Gen 757,698

239,338

31.6% 893,601

270,048

30.2% 683,660

(209,941)

76.5%
Refinery: Gas 8,304,467

2,206,086

26.6% 8,650,211

1,145,138

13.2% 3,363,690

(5,286,521)

38.9%
Telecom 2,052,774

919,851

44.8% 2,578,565

773,573

30.0% 2,274,110

(304,455)

88.2%
Water 4,163,445

1,524,443

36.6% 3,760,058

1,967,536

52.3% 3,984,060

224,002

106.0%
Total Revenues 44,465,104$

17,427,514$

39.2% 46,002,866$

18,556,832$

40.3% 43,535,600$

(2,467,266)$

94.6%
Prior Year FY23-24 Current Year FY24-25
245

30 31, 2024 , the City has received $ 1.8 million , which is slightly higher compared to December 31, 2023 , receipts of

$

1.6 million

.

Projected

year
-end receipts

are

expected to be $1.
3 million

above

budget
ed
revenues mainly due to increasing remittances from SoCal Edison , SoCal Gas and private waste haulers. Receipts from utility service providers are typically received during the fourth fiscal quarter.

Licenses, Fees & Permits
This revenue source accounts primarily for development -related fees such as building and inspection fees. As of

December 31
, 2024

, actual receipts of $

3.3 million represent a

3 2.0% increase
from prior year

receipts and
is primarily attributable to

the Gable House development.

Overall,
revenues are projected to

exceed
budget expectations by $57

2 ,000 or 10.5

%
due to increased
building-related fees. This revenue source is cyclical and can fluctuate based on the timing of payments for individual projects.

Use of Money and Property
This revenue source includes investment earnings, interest income

,
and rental income. As of
December 31, 2024

, actual receipts of $

3.6 million represent a

9.1 % increase from prior year receipts
of $ 3.3 million. This is mainly due to

an
increase in the investment balance and the timing of
maturities. It is anticipated that this revenue source will

fall short of

budget
expectations by $540,000
or

7.6 %

by

fiscal year
-end.

Fines,

Forfeitures

& Penalties

This revenue source includes general court fees, traffic fines, and citation revenues. As of

December
31, 2024

, actual receipts of $
333

,
000 represent a slight increase from last year’s

receipts of $227,000.

This classification is

expected to exceed

budget by about $
70 ,
000

or

10.8 %.

Charges for Services
This revenue source includes

various
user fees, construction -related fees (e.g. , plan checks), engineering fees,

recreation
fees, emergency transport fees, and fire inspection fees. As of

December
31 , 2024

, actual receipts of $

11.9 million represent a 13.3

% increase from prior year receipts of $

10.5 million.
246

31 Charges for Services by Department

As shown in the table above,

the
increase of $ 1.4 million is mainly due to the timing of receipts collected by the

Fire Department for
Annual Fire Inspection Fees and by

Public Works

for Traffic
Signal Maintenance Fees. Overall, this classification is expected to

fall short of

budget by

$
885

,000
or

3.5%

by fiscal year
-end.

Operating

Transfers In

This revenue source includes transfers from other funds

to
help support operations of the General
Fund-Operating Fund, with the main sources being the Airport Fund, Measure SST Fund, and Gas Tax Funds. As of

December 31
, 2024

, actual receipts of $

20.8 million exceeded the prior year by $ 9.2
million. The increase in the year -to-date transfers of $9.2 million is

mainly
due to

$5.0 million from
the Reserve Fund and $ 4.2 million from the Airport Fund ’s non-aeronautical net operating activity.

The Operating Transfers In classification is expected to

exceed
budgeted expectations by $1.3 million
or 3.9%

by fiscal

year
-end.

General Fund-Operating Fund Expenditure Analysis
This section highlight s the expenditures of the main General Fund -Operating Fund . The City’s General Fund-Operating Fund

expenditure budget

for FY
24 -
25 increased by $15.6 million or 5.7%
for a total of

$
287.5 million from the year prior. This was a result of

planned increases in salaries and
employee benefits and UAL payment . This increase is partially offset by reduced transfer

s to the
City’s

CEPPT

Section 115

Fund
.

Overall, the

City’s General Fund Operating Fund expenditure budget
is projected to generate a year-end surplus of

$4.
8 million
.

Revenues
Amended
Budget
July-December
Actuals

Budget
Received
Amended
Budget
July-December
Actuals

Budget
Received
Annual
Projected Total
Projected
Surplus/(Deficit)

% of
Budget
City Manager 846,330$ 319,471$ 37.7% 765,661$ 159,736$ 20.9% 638,940$ (126,721)$ 83.4% City Clerk 4,430

3,003

67.8% 16,117

4,285

26.6% 5,620

(10,497)

34.9%
Community Development 6,474,902

2,551,719

39.4% 6,220,288

2,425,605

39.0% 5,284,680

(935,608)

85.0%
General Services 1,222,919

480,303

39.3% 1,136,049

491,702

43.3% 982,050

(153,999)

86.4%
Non-Departmental 14,899

8,623

57.9% 16,491

7,598

46.1% 16,430

(61)

99.6%
Police 484,468

164,561

34.0% 448,673

174,970

39.0% 365,800

(82,873)

81.5%
Fire 10,084,175

3,836,340

38.0% 11,139,044

5,042,522

45.3% 11,093,510

(45,534)

99.6%
Public Works 242,177

-

0.0% 267,151

193,557

72.5% 543,800

276,649

203.6%
Community Services 4,536,496

3,153,579

69.5% 5,207,992

3,427,130

65.8% 5,401,390

193,398

103.7%
Total Revenues 23,910,796$

10,517,599$

44.0% 25,217,466$

11,927,105$

47.3% 24,332,220$

(885,246)$

96.5%
Prior Year FY23-24 Current Year FY24-25
247

32 General Fund-Operating Fund Expenditures by Classification

As of

December 31
, 2024, the General Fund-Operating Fund realized

expenditures of

$
148.8

million,
achieving 51.8

%
of the FY24-25

expenditure

budget. During the same period ending

December 31
,
2023

, the City

expended
$139.8

million or 51.4

%
of the

FY23
-24 expenditure budget. The main
drivers for this year-over-year increase of

$

9.0 million were the planned increases in

Salaries and
Employee Benefits for renewed labor contracts and salary grid modifications, as well as

the
Police
Department’s retention incentive package

which was funded by salary savings. These increases were partially offset by a reduction in

Other Operating Transfers Out
, due to the reduced contribution to
the Section 115 CEPPT fund. Expenditures to date are expected to be higher than the percentage of the fiscal year completed due to the timing of the annual contributions to the CEPPT Section 115 Fund and

Debt Service payments associated with the 2020 Lease Revenu e Bonds that were used to
pay down a majority of the City’s Ca lPERS UAL that are paid in July and September (included in the Non-Departmental expenditures), respectively.

Expenses
Amended
Budget
y
December
Actuals

Budget
Expende
Amended
Budget
July-December
Actuals

Budget
Expended
Annual
Projected Total
Projected
Surplus/(Deficit)
Projected %
of Budget
Salaries and Employee Benefits 195,320,911$ 91,544,152$ 46.9% 211,717,970$ 105,127,575$ 49.7% 207,978,591$ 3,739,379$ 98.2% Salaries and Benefits Reimb. (1,446,294)

(526,938)

36.4% (2,400,500)

(1,313,567)

54.7% (2,952,191)

551,691

123.0%
Materials, Supplies & Maintenance 15,703,378

5,466,684

34.8% 16,667,034

6,576,792

39.5% 16,206,766

460,268

97.2%
Materials Reimbursements (342,751)

(146,590)

42.8% (485,142)

(277,576)

57.2% (395,950)

(89,192)

81.6%
Professional/Contract Services 16,252,001

5,825,209

35.8% 19,529,656

6,529,149

33.4% 18,659,586

870,070

95.5%
Training, Travel & Membership Dues 1,579,532

909,136

57.6% 2,047,061

1,003,753

49.0% 1,979,446

67,615

96.7%
Liabilities, Settlements & Insurance 185,581

76,411

41.2% 221,680

80,844

36.5% 218,460

3,220

98.5%
Utilities 4,691,096

2,357,070

50.2% 4,932,602

2,341,546

47.5% 4,803,679

128,923

97.4%
Interdepartmental Charges 19,311,221

9,443,959

48.9% 24,303,425

12,061,503

49.6% 24,435,781

(132,356)

100.5%
Debt Service 22,855,281

14,856,518

65.0% 23,369,441

15,439,906

66.1% 23,369,441

-

100.0%
Debt Service Reimbursements (18,832,766)

(9,305,201)

49.4% (19,341,206)

(9,701,491)

50.2% (19,053,086)

(288,120)

98.5%
Capital Acquisitions 582,106

196,355

33.7% 691,109

164,369

23.8% 624,872

66,237

90.4%
Asset Contra Account -

-

0.0% -

-

0.0% -

-

0.0%
Bad Debts and Other Losses 1,000

-

0.0% 1,000

12 1.2% 1,000

-

100.0%
Reimbursements-Indirect Costs (8,557,193)

(3,884,976)

45.4% (9,147,553)

(4,416,600)

48.3% (8,523,751)

(623,802)

93.2%
Other Operating Transfers Out 24,597,049

23,004,472

93.5% 15,408,129

15,224,714

98.8% 15,408,129

-

100.0%
Total Expenses 271,900,152$ 139,816,261$ 51.4% 287,514,706$ 148,840,929$

51.8% 282,760,773$

4,753,933$

98.3%
Prior Year FY23-24 Current Year FY24-25
248

33 General Fund-Operating Fund Expenditures by Department

As shown in the table above, most General Fund -Operating Fund departments are projected to remain within budgeted expectations. However, the Non -Departmental expenditure budget is expected to show a deficit of

$0.9 million
, primarily due to a

$
624,000

reduction in Indirect Cost
Reimbursements resulting from lower salary projections. Overall, the

FY24
-25 General Fund -
Operating Fund expenditure budget is projected to generate

$

4.8 million in savings, largely due to
departmental vacancies.

As of

December 31
, 2024, there were 154

.1 FTE
vacant positions in the General Fund, a decrease of

5.0 FTE from the previous year. Despite this reduction, City departments continue to face challenges in attracting qualified candidates and have numerous recruitments underway.

Significant portion of
these vacancies are in the Police Department , with 72

.0 FTE
vacant positions as of December 31,
2024

,
and e fforts to fill vacancies and retain existing staff are ongoing . A s part of that effort , City Council approved an Enhanced Recruitment and Retention

I
ncentive Pilot program for the Police
Department in July 2024.

To better understand the trends driving the General Fund -Operating Fund expenditure budget, it is useful to analyze its two main components: 1)

Salaries & Salary Reimbursements
, and 2) Non-
Wage (Materials) expenditures.

As of

December 31
, 2024, the

City
ha

s
expended $103.8

million or 49.6% of the

FY24
-25 salary
budget, compared to $91.0 million or 46.9

%
for the same period in

FY23
-24. These expenditures are
generally in line with the fiscal year’s timing ( 50.4

%
of the year has elapsed ). As shown in the table
below, FY24-25 salary expenditures are higher than the previous year, reflecting reduced vacancies and planned increases in salaries and employee benefits due to labor contract renewals, salary grid Expenses
Amended
Budget
July-December
Actuals

Budget
Expended
Amended
Budget
July-December
Actuals

Budget
Expended
Annual
Projected Total
Projected
Surplus/(Deficit)

% of
Budget
City Council 580,611$ 254,355$ 43.8% 577,734$ 255,477$ 44.2% 554,159$ 23,575$ 95.9% City Manager 6,677,469

3,067,980

45.9% 7,736,510

3,382,876

43.7% 7,490,206

246,304

96.8%
City Attorney 3,108,064

1,465,612

47.2% 3,397,091

1,458,560

42.9% 3,146,491

250,600

92.6%
City Clerk 1,359,558

553,226

40.7% 1,664,355

557,825

33.5% 1,499,150

165,205

90.1%
City Treasurer 343,088

179,831

52.4% 483,686

187,134

38.7% 452,822

30,864

93.6%
Finance 6,251,439

2,615,848

41.8% 6,263,088

2,723,356

43.5% 6,121,791

141,297

97.7%
Human Resources 2,381,441

1,085,238

45.6% 3,244,183

1,387,514

42.8% 3,068,108

176,075

94.6%
Civil Service 1,035,845

482,380

46.6% 1,144,051

422,327

36.9% 1,043,053

100,998

91.2%
Community Development 9,815,788

4,329,726

44.1% 10,600,313

4,928,500

46.5% 10,103,669

496,644

95.3%
CIT 8,782,395

4,058,855

46.2% 9,400,911

4,308,467

45.8% 8,993,544

407,367

95.7%
General Services 10,493,231

4,664,661

44.5% 12,000,152

5,849,911

48.7% 11,668,025

332,127

97.2%
Non-Departmental 22,384,648

25,697,771

114.8% 12,064,204

17,826,402

147.8% 12,962,403

(898,199)

107.4%
Police 95,424,934

42,843,698

44.9% 101,934,294

50,523,060

49.6% 100,777,674

1,156,620

98.9%
Fire 59,352,214

28,783,050

48.5% 69,315,045

33,989,198

49.0% 68,326,434

988,611

98.6%
Public Works 19,315,737

8,535,313

44.2% 21,111,493

9,145,550

43.3% 20,736,213

375,280

98.2%
Community Services 24,593,691

11,198,719

45.5% 26,577,596

11,894,772

44.8% 25,817,033

760,563

97.1%
Total Expenses 271,900,153$

139,816,263$

51.4% 287,514,706$

148,840,929$

51.8% 282,760,775$

4,753,931$

98.3%
Prior Year FY23-24 Current Year FY24-25
249

34 adjustments, and newly approved Police Department’s retention incentive s . The salary budget is expected to yield

$

4.3 million in savings, due to vacancies across departments.

General Fund-Operating Fund –

Salar
y

&

Employee Benefit

Expenditures by
Department

City Manager’s Office
The City Manager’s Office has a total of

6.6 FTE vacancies, of which

2.0 FTE are expected to remain
unfilled through the end of the fiscal year. Based on currently approved

recruitment requests,

this
department is projected

to

generate

$
161

,
000

in budgetary savings.

City Attorney’s

Office

The

City

Attorney’s

Office

has

2.0 FTE vacancies
, which are

expected

be filled

by the end of the fiscal
year. Based on currently approved recruitment requests, this department is projected to generate $200

,
000

in budgetary savings.

City Clerk’s Office
The City Clerk’s Office has 2.0 FTE

vacancies, which are expected to

be
filled by the end of the fiscal
year. Based on currently approved recruitment requests, this department is projected to generate $162,00

0 in budgetary savings.

Community

Services Department

The Community

Services
Department (excluding seasonal/recurrent positions) has a total of

12.0 FTE
vacancies,

of which

2.0 FTE are expected to remain unfilled through the end of the fiscal year.

Based
on currently approved recruitment requests, this department is projected to generate $ 624,000

in
budgetary savings.

Expenses
Amended
Budget
July
December
Actuals
% of
Budget
Expende
Amended
Budget
July-December
Actuals
% of
Budget
Expended
Annual
Projected Total
Projected
Surplus/(Deficit)
Projected %
of Budget
City Council 198,102$ 90,975$ 45.9% 187,968$ 93,669$ 49.8% 181,921$ 6,047$ 96.8% City Manager 4,924,703

2,367,880

48.1% 5,267,941

2,508,088

47.6% 5,106,722

161,219

96.9%
City Attorney 2,652,979

1,267,215

47.8% 2,933,694

1,361,828

46.4% 2,733,612

200,082

93.2%
City Clerk 943,350

485,318

51.4% 1,126,334

451,019

40.0% 964,619

161,715

85.6%
City Treasurer 295,742

158,072

53.4% 334,159

165,055

49.4% 330,760

3,399

99.0%
Finance 4,297,541

2,067,106

48.1% 4,531,193

2,167,111

47.8% 4,384,406

146,787

96.8%
Human Resources 1,469,752

656,882

44.7% 1,998,080

967,443

48.4% 1,992,628

5,452

99.7%
Civil Service 593,066

288,059

48.6% 741,998

356,216

48.0% 706,466

35,532

95.2%
Community Development 8,550,048

3,902,870

45.6% 9,160,619

4,446,063

48.5% 8,813,015

347,604

96.2%
CIT 5,985,691

2,579,921

43.1% 6,046,087

2,770,001

45.8% 5,665,993

380,094

93.7%
General Services 6,790,819

2,992,636

44.1% 7,229,570

3,502,822

48.5% 6,965,331

264,239

96.3%
Non-Departmental 199,717

91,435

45.8% 199,717

109,658

54.9% 199,717

-

100.0%
Police 81,864,299

37,111,184

45.3% 85,826,303

43,894,677

51.1% 84,871,666

954,637

98.9%
Fire 50,192,578

25,107,341

50.0% 57,086,588

28,440,825

49.8% 56,202,141

884,447

98.5%
Public Works 8,933,068

4,323,660

48.4% 9,427,865

4,448,120

47.2% 9,312,255

115,610

98.8%
Community Services 15,983,162

7,526,660

47.1% 17,219,354

8,131,413

47.2% 16,595,147

624,207

96.4%
Total Expenses ########### 91,017,214$ 46.9% 209,317,470$ 103,814,008$

49.6% 205,026,400$

4,291,071$

97.9%
Prior Year FY23-24 Current Year FY24-25
250

35 Community Development Department
The Community Development Department has a total of 5.5 FTE vacancies, of which