Agenda packet — Finance and Governmental Operations Council Committee, March 12, 2026 (part 1 of 2)

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TORRANCE

FINANCE AND GOVERNMENTAL OPERATIONS

COUNCIL COMMITTEE

AGENDA

Thursday, March 12, 2026

REGULAR MEETING
5:00 P.M.

LeROY J. JACKSON COUNCIL CHAMBER
3031 TORRANCE BLVD.

In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Manager’s office at (310) 618-5880. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting. [28CFR35.102-35.104 ADA Title II]

Direct questions or concerns to the City Council at (310) 618-2801, City Manager at (310) 618-5880, or the individual department head prior to submission to the City Council. Parties will be notified if the complaint will be included on a subsequent agenda.

PARTICIPATE BEFORE THE MEETING by submitting a public comment on the OneMeeting Public Portal at https://torranceca.primegov.com/public/portal?fromiframe=true. Hard copies of public comment may be submitted to the City Clerk’s Office during regular business hours. All comments submitted before 5:30 p.m. on Wednesday, March 11, 2026, will be published for public review prior to the meeting. Comments received after the deadline, but prior to the adjournment of the meeting will be added to the record.

The agenda was posted on the Public Notice Board at 3031 Torrance Blvd and on the City’s Website on Thursday, March 5, 2026 /s/ Rebecca Poirier

1. CALL TO ORDER
Aram Chaparyan, City Manager

ROLL CALL: ____ Chair Kaji ____ Kalani ____ Sheikh

2. PLEDGE OF ALLEGIANCE
Councilmember Sheikh

3. WELCOME AND INTRODUCTIONS
Councilmember Kaji, Chair

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4. CONSENT CALENDAR
Matters listed under the Consent Calendar are considered routine and will be enacted by one motion and one vote.

There will be no separate discussion of these items. If discussion is desired, that item will be removed by a Committee member from the Consent Calendar and considered separately.

4A. Finance – Approve the Finance and Governmental Operations Committee Meeting Minutes.

Expenditure: None.

Recommendation of the Finance Director that the Finance and Governmental Operations Committee approve the meeting minutes of December 11, 2025.

5. ADMINISTRATIVE MATTERS
Ian Dailey, Finance Director

5A. Finance – Accept and File Annual Comprehensive Financial Report for Fiscal Year Ended 2024-2025.

Expenditure: None.

Recommendation of the Finance Director that the Finance and Governmental Operations Committee:

1. Accept and file the Annual Comprehensive Financial Report for the Fiscal Year Ended 2024-2025; and

2. Recommend to City Council to accept and file the Annual Comprehensive Financial Report for the Fiscal Year Ended 2024-2025.

5B. Finance – Accept and File Fiscal Year 2025-26 Mid-Year Budget Review Report and Approve Proposed Fiscal Year 2025-26 Mid-Year Program Modifications and Budget Adjustments. Expenditure: $31,954 (General Fund).

Recommendation of the Finance Director that the Finance and Governmental Operations Committee:

1. Accept and file the Fiscal Year 2025-26 Mid-Year Budget Review Report; and

2. Approve the proposed program modifications in the fiscal year 2025-26 operating expenditure budget in the amount of $31,954 in the General Services Department; and

3. Approve the proposed increase to the Airport Fund’s fiscal year 2025-26 operating expenditure budget in the amount of $4,500,000; and

4. Approve the proposed increase to the Self-Insurance Fund’s fiscal year 2025-26 operating expenditure budget in the amount of $2,000,000; and

5. Recommend to City Council to accept and file the Fiscal Year 2025-26 Mid-Year Budget Review Report; and

6. Recommend to City Council the approval of the proposed fiscal year 2025-26 Mid-Year program modifications and budget adjustments.

6. ORAL COMMUNICATIONS
This portion of the meeting is reserved for comment on items not on the agenda or on topics of general interest to the public that are within the subject matter jurisdiction of the Finance and Governmental Operations Council Committee. Under the Ralph M. Brown Act, the Finance and Governmental Operations Council Committee cannot act on items raised during public comment but may respond briefly to statements made or questions posed; request clarification; or refer the item to staff. No more than 2 minutes per speaker. If presenting handout material to the Committee, please provide 5 copies to staff before speaking.

7. CLOSING REMARKS
Aram Chaparyan, City Manager

8. ADJOURNMENT

Councilmember Kaji, Chair

#L
Date: March 12, 2026
To: Honorable Chair and Members of the Finance and Governmental Operations Committee
From: Ian Dailey, Finance Director | [email protected] Subject: Finance – Approve the Finance and Governmental Operations Committee Minutes.

Expenditure: None.

RECOMMENDATION
Recommendation of the Finance Director that the Finance and Governmental Operations Committee approve the meeting minutes of December 11, 2025.

FUNDING
None required.

ATTACHMENT

1. Finance and Governmental Operations Committee Meeting Minutes for December 11, 2025
1 Finance - Approve Finance and Governmental Operations Committee Meeting Minutes. Expenditure: None.
4A

Alexis Motonaga Torrance Finance and
Governmental Operations Committee
Minute

s
Secretary

December 11

,
2025
December 11

,
2025

MINUTES OF REGULAR MEETING OF THE

TORRANCE FINANCE AND GOVERNMENTAL

OPERATIONS COMMITTEE AGENDA

1. CALL MEETING TO ORDER
The Torrance Finance and Governmental Operations Committee convened in a regular session at

3:30

p.m.

on Thursday, December 11, 202

5 , in the LeRoy J. Jackson Council
Chambers.

ROLL CALL

Present: Committee Member Kalani, Committee Member Sheikh, and Chair Kaji

Also Present: City Manager Chaparyan

,
City Treasurer Goodrich, Deputy City
Treasurer Allen, Finance Director

Dailey
, Assistant Finance
Director Pabalan

2. FLAG SALUTE
Chair Kalani led the Pledge of Allegiance.

3. WELCOME AND INTRODUCTIONS
None.

4. CONSENT CALENDAR

4A. APPROVAL OF MINUTES OF FEBRUARY 27, 2024
MOTION: Committee Member Sheikh moved to accept and file the Meeting Minutes of February 26 , 202 5 . Committee Member Kalani seconded the motion; a roll call vote reflected a 3-

0 approval.

5. ADMINISTRATIVE MATTERS

City Manager Chaparyan spoke regarding the fiscal year 202

5 -26 operating budget.

5A. ACCEPT AND FILE FISCAL YEAR 2025 -

26 FIRST QUARTER BUDGET REVIEW
REPORT AND APPROVE PROPOSED FISCAL YEAR 2025 - 26 FIRST QUARTER PROGRAM MODIFICATIONS.
1) ACCEPT AND FILE THE FISCAL YEAR 2025-26 FIRST QUARTER BUDGET REVIEW REPORT; AND

2) APPROVE THE PROPOSED PROGRAM MODIFICATIONS IN THE FISCAL YEAR 2025

-
26 OPERATING EXPENDITURE BUDGET IN THE AMOUNT OF $3,672,663 IN THE CITY ATTORNEY’S OFFICE, CITY MANAGER’S OFFICE, COMMUNITY

DEVELOPMENT DEPARTMENT, COMMUNITY SERVICES DEPARTMENT, FINANCE

DEPARTMENT, GENERAL SERVICES DEPARTMENT, NON -DEPARTMENTAL,

POLICE DEPARTMENT, PUBLIC WORKS DEPARTMENT, AND TRANSIT DEPARTMENT; AND

3) APPROVE THE PROPOSED INCREASE TO THE GENERAL FUND’S FISCAL YEAR 2025-26 OPERATING REVENUE BUDGET IN THE AMOUNT OF $877,028; AND 2 ATTACHMENT 1

Alexis Motonaga Torrance Finance and
Governmental Operations Committee
Minute

s
Secretary

December 11

,
2025
4) APPROVE THE PROPOSED INCREASE TO THE GENERAL FUND’S FISCAL YEAR 2025

-
26 OPERATING EXPENDITURE BUDGET IN THE AMOUNT OF $567,602; AND 5) APPROVE THE PROPOSED DECREASE TO THE FLEET SERVICES FUND’S FISCAL YEAR 2025 -26 OPERATING REVENUE AND EXPENDITURE BUDGET IN THE AMOUNT OF $(194,654); AND
6) APPROVE THE PROPOSED INCREASE TO THE AIRPORT FUND’S FISCAL YEAR 2025

-
26 OPERATING REVENUE BUDGET IN THE AMOUNT OF $876,600; AND 7) APPROVE THE PROPOSED INCREASE TO THE AIRPORT FUND’S FISCAL YEAR 2025

-
26 OPERATING EXPENDITURE BUDGET IN THE AMOUNT OF $1,791,600; AND 8) APPROPRIATE FUNDS TO A NEWLY CREATED PROJECT IN THE AMOUNT OF $100,000; AND
9) RECOMMEND TO CITY COUNCIL TO ACCEPT AND FILE THE FISCAL YEAR 2025- 26 FIRST QUARTER BUDGET REVIEW REPORT; AND
10) RECOMMEND TO CITY COUNCIL THE APPROVAL OF THE PROPOSED FISCAL YEAR 2025 -26 FIRST QUARTER PROGRAM MODIFICATIONS AND BUDGET ADJUSTMENTS.

Finance Director Dailey presented the 202

5 -26 First Quarter Budget Review Report

and
proposed 2025

26 First Quarter Program Modifications which included actuals through September 30

, 202

5 .

Members of

the

Committee

spoke.

Member Kalani requested further information regarding
the police recruitment and retention program be provided in the Council meeting.

Finance Director Dailey spoke regarding

the citywide expenditures budget summary
questions, self-

insurance fund questions
, technology questions, reserve questions, capital
infrastructure plan questions, and police recruitment and retention program questions from the committee

City Manager Chaparyan spoke regarding

self
-

insurance fund

questions, capital
infrastructure plan questions, and police recruitment and retention program questions from the committee.

Members of the

p
ublic spoke.

MOTION: Committee Membe

r
Sheikh

moved to accept and file the FY2

5 -26 First
Quarter Budget Review Report and approve the FY25 - 26 First Quarter Program Modifications.

Committee Member

Kalani
seconded the motion; a roll call vote reflected
a 3-

0 approval.

5B. PROVIDE DIRECTION REGARDING FISCAL YEAR 2026 -

27 OPERATING
BUDGET & CAPITAL IMPROVEMENT PLAN PRIORITIES.

RECOMMENDATION OF THE FINANCE DIRECTOR THAT THE FINANCE AND

GOVERNMENTAL OPERATIONS COMMITTEE PROVIDE DIRECTION REGARDING THE FISCAL YEAR 2026

27 OPERATING BUDGET & CAPITAL IMPROVEMENT
PLAN PRIORITIES.

Finance Director

Dailey
presented

the proposed fiscal year 2026

27 Operating Budget
and Capital Improvement Plan priorities on Item

5 B.

3 Alexis Motonaga Torrance Finance and Governmental Operations Committee
Minute

s
Secretary

December 11

,
2025
MOTION: Committee Member

Kalani
moved to provide direction regarding FY26

27 Operating Budget and Capital Improvement Plan Priorities. Committee Member Sheikh seconded the motion; a roll call vote reflected a

3 -0 approval.

5C. ACCEPT AND FILE FISCAL YEAR 2025 -

26 FIRST QUARTER INVESTMENT

PORTFOLIO REPORT

RECOMMENDATION OF THE CITY TREASURER THAT THE FINANCE AND

GOVERNMENTAL OPERATIONS COMMITTEE ACCEPT AND FILE THE FISCAL YEAR 2025

26 FIRST QUARTER INVESTMENT PORTFOLIO REPORT.

Deputy City Treasurer Jasmine Allen

presented the

fiscal year 2025

26 First Quarter
Investment Portfolio Report on Item

5 C.

Members of the Committee spoke.

City Treasurer Goodrich and Deputy City Treasurer Allen spoke regarding

economic
securities questions from the committee

MOTION: Committee Member

Sheikh

moved to accept and file the proposed program
modifications. Committee Member Kalani seconded the motion; a roll call vote reflected a 3-

0 approval.

5D. ACCEPT AND FILE AN UPDATE FOR THE CALIFORNIA PUBLIC EMPLOYEES’

RETIREMENT SYSTEM PENSION UPDATE

RECOMMENDATION OF THE FINANCE DIRECTOR THAT THE FINANCE AND

GOVERNMENTAL OPERATIONS COMMITTEE ACCEPT AND FILE AN UPDATE ON THE CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM.

Finance Director Ian Dailey presented the update for the California Public Employees’ Retirement System Pension

on Item

5 D.

Members of the Committee spoke.

Finance Director Dailey spoke regarding lease revenue bond

questions
from the
committee

MOTION: Committee Member

Kalani
moved to accept and file the proposed program
modifications. Committee Member Sheikh seconded the motion; a roll call vote reflected a 3

0 approval.

6. ORAL COMMUNICATIONS
Members of the public spoke.

7. CLOSING REMARKS
City Manager Chaparyan spoke.

8. ADJOURNMENT
MOTION: Committee Member Kalani moved to adjourn the meeting at 4:59 p.m. on 4 Alexis Motonaga Torrance Finance and Governmental Operations Committee
Minute

s
Secretary

December 11

,
2025
December 11, 202

5 . Committee Member

Sheikh

seconded the motion

; a roll call vote
reflected a

3 -

0 approval.

###

5 #L
Date: March 12, 2026
To: Honorable Chair and Members of the Finance and Governmental Operations Committee
From: Ian Dailey, Finance Director
By: David Cessor, Accounting Manager | [email protected] Subject: Finance – Accept and File Annual Comprehensive Financial Report for Fiscal Year Ended 2024-2025. Expenditure: None.

RECOMMENDATION
Recommendation of the Finance Director that the Finance and Governmental Operations Committee:

1. Accept and file the Annual Comprehensive Financial Report for the Fiscal Year Ended 2024-2025; and

2. Recommend to City Council to accept and file the Annual Comprehensive Financial Report for the Fiscal Year Ended 2024-2025.

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 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 the consulting services agreement to provide external auditing services for the fiscal year ending 2024. On May 6, 2024, City Council approved a third amendment to the consulting services agreement to provide external auditing services for the fiscal year ending 2025. The ACFR is comprised of the City’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, 2025 5A
1 City Council
March 12, 2026

Page 2 ends

(Attachment B), and issued an unmodified audit opinion as of December 30, 2025, stating that the financial statements present fairly in all material respects, in accordance 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, 2024. 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, 2025, for consideration.

Financial Highlights for Fiscal Year 2024-25 Audited Year-End Results General Fund:

The City’s General Fund revenues increased $7.9 million or 2.9% from the prior fiscal year. Within the General Fund revenues, there are seven main categories, of which the City experienced increases in four categories in fiscal year 2024-25.
• The largest revenue source in the General Fund is taxes, which decreased $9.3 million or

4.0%. $12.6 million of this decrease is strictly due to revenues related to franchise fees, Public Education Government fees, and alarm permit fees which were previously presented under the classification of Taxes and are now presented under the classification of Licenses, Fees, and Permits. After controlling for this presentation change, this classification effectively increased by $3.3 million primarily driven by the increase in Property Tax and Construction Tax receipts, partially offset by decreases in Sales Tax receipts.
• The second largest revenue source in the General Fund is charges for current services, which decreased $0.4 million or 1.6%.
• The third largest revenue source in the General Fund is licenses, fees and permits, which increased $13.3 million to $18.5 million in fiscal year 2024-25, compared to $5.2 million in fiscal year 2023-24. $11.8 million of this increase is strictly due to revenues related to franchise fees, Public Education Government fees, and alarm permit fees which were previously presented under the classification of Taxes and are now presented under the classification of Licenses, Fees, and Permits. After adjusting for this presentation change this classification effectively increased by $1.5 million primarily due to an increase in building permit revenues.
• The fourth largest revenue source in the General fund is use of money and property, which increased $3.8 million to $14.6 million in fiscal year 2024-25, compared to $10.8 million in fiscal year 2023-24. This increase is primarily due to increased investment earnings and increases in market value of securities.
• The City’s General Fund expenditures increased $34.5 million from $241.0 million in fiscal year 2023-24 to $275.5 million in fiscal year 2024-25. This increase was mainly driven by an increase in Public Safety expenditures of $20.9 million or 14.1% and increases in other functions of $13.7 million.
• Public Safety expenditures increased mainly due to increases in salaries and compensation of approximately $14.9 million (including $3.4 million related to incentives for employee recruitment and retention).

Finance and Governmental Operations Council Committee
2 2
City Council
March 12, 2026

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• Other significant areas of General Fund expenditure increases include: $6.3 million related to increased salaries and compensation for Non-Public Safety functions, and $4.3 million related to increased contributions to the self-insurance fund.

In total, the City’s General Fund fund balance increased $30.7 million in fiscal year 2024-25. A detailed summary of the General Fund’s audited financial statements is included in Attachment

1. While the General Fund realized a notable increase in the ending fund balance for FY24-25, staff believe this is still insufficient given the scale of the City’s operations as a full-service city. Ending General Fund unrestricted fund balance for FY24-25 was $104.8 million, which is 36.3% of its total expenditures and transfers out of $288.9 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 each year to ensure the City remains on a fiscally resilient and sustainable path going forward.

Self-Insurance Fund:

The City’s Self-Insurance Fund had a decrease in net position of $0.2 million or 0.4%, which is primarily due to estimated settlements and claims that were higher than anticipated. As of June 30, 2025, the fund balance deficit was $52.2 million. This is driven by existing outstanding liabilities in workers’ compensation claims of $49.5 million and general liability claims of $18.4 million. As of June 30, 2025, the current assets in this fund was $27.5 million. Despite the minor deficit in the FY24-25 performance, the City continues to make progress with Self-Insurance Fund’s funded status: as of the end of FY24-25, the Self-Insurance fund is approximately 34.6% funded, up from 29.5% in FY23-24. This indicates that cash is accumulating faster than liabilities are coming due. It is anticipated that one-time contributions can continue to be made over time to further rebuild the City’s Self-Insurance fund balance. This will be a 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.

ATTACHMENTS

1. General Fund and Self-Insurance Fund FY24-25 Audited Financial Statements Summary

2. FY24-25 Annual Comprehensive Financial Report (Document link:
https://www.torranceca.gov/government/finance/annual-reports ) Finance and Governmental Operations Council Committee
3 FY2023-24 Actual FY2024-25 Actual Change ($) Change (%) Revenues:

Taxes 231,322,318 $ 221,947,580 $ (9,374,738) $ -4.1% Sales and use tax 87,643,496 84,770,086 (2,873,410) -3.3% Property tax 65,094,737 68,370,767 3,276,030 5.0% Utility users tax 41,289,435 41,357,001 67,566 0.2% Business license tax* 11,078,225 11,135,448 57,223 0.5% Occupancy tax 12,580,760 13,030,832 450,072 3.6% Franchise fee* 12,045,564 - (12,045,564) -100.0% Construction tax 1,308,065 3,277,189 1,969,124 150.5% Oil severance tax 4,998 6,257 1,259 25.2% Other* 277,038 - (277,038) -100.0% Licenses, fees and permits* 5,257,568 18,461,818 13,204,250 251.1% Fines, forfeitures and penalties 727,156 1,702,725 975,569 134.2% Use of money and property 10,810,978 14,610,811 3,799,833 35.1% Intergovernmental 368,968 435,406 66,438 18.0% Charges for current services 25,460,614 25,124,687 (335,927) -1.3% Other revenues 696,805 206,449 (490,356) -70.4% Total Revenues 274,644,407 282,489,476 7,845,069 2.9% Expenditures:

General government 31,899,220 36,896,742 4,997,522 15.7% Nondepartmental 10,343,454 13,564,693 3,221,239 31.1% Public safety 148,328,400 169,253,612 20,925,212 14.1% Public works 18,538,439 20,213,612 1,675,173 9.0% Culture and recreation 23,102,457 25,257,310 2,154,853 9.3% Community development 8,600,980 10,074,622 1,473,642 17.1% Debt Service 217,996 222,727 4,731 2.2% Total Expenditures 241,030,946 275,483,318 34,452,372 14.3% Excess of revenues over (under) expenditures 33,613,461 7,006,158 (26,607,303) -79.2% Other financing sources (uses):

Transfers in 14,652,197 29,169,493 14,517,296 99.1% Transfers out (11,605,911) (13,375,660) (1,769,749) 15.2% SBITA 5,035,998 7,864,699 2,828,701 56.2% Total other financing sources (uses) 8,082,284 23,658,532 15,576,248 192.7% Net change in fund balances 41,695,745 30,664,690 (11,031,055) -26.5% Beginning fund balances 78,439,211 120,134,956 41,695,745 53.2% Prior period adjustment - - - 0.0% Ending fund balances 120,134,956 150,799,646 30,664,690 25.5% Fund balances:

Nonspendable 2,661,453 1,822,932 (838,521) -31.5% Restricted 31,039,967 44,224,849 13,184,882 42.5% Assigned 7,684,075 81,100,002 73,415,927 955.4% Unassigned 78,749,461 23,651,863 (55,097,598) -70.0% Ending fund balances 120,134,956$ 150,799,646 $ 30,664,690 $ 25.5% Statement of Revenues, Expenditures and Changes in Fund Balances General Fund
*Revenues related to Franchise Fees, Public Education Government fees, and Alarm Permit Fees, were previously reported under the classifcation of Taxes are now presented under the classifcation of Licenses, Fees, and Permits.

ATTACHMENT 1
4 FY2023-24 Actual FY2024-25 Actual Change ($) Change (%) Operating revenues:

Charges for services 20,928,013 $ 23,643,920 $ 2,715,907 $ 13.0% Other 142,795 330,808 188,013 131.7% Total operating revenues 21,070,808 23,974,728 2,903,920 13.8% Operating expenses:

Salaries and employee benefits 883,015 919,310 36,295 4.1% Services and supplies 7,097 4,564 (2,533) -35.7% Other professional services 445,142 428,800 (16,342) -3.7% Insurance and claims 19,504,753 22,596,159 3,091,406 15.8% Depreciation and amortization - - - 0.0% City charges 205,161 222,833 17,672 100.0% Other 11,745 4,296 (7,449) -63.4% Total operating expenses 21,056,913 24,175,962 3,119,049 14.8% Operating income (loss) 13,895 (201,234) (215,129) -1548.2% 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 13,895 (201,234) (215,129) -1548.2% Transfers in 2,000,000 - (2,000,000) -100.0% Transfers out (4,354) - 4,354 -100.0% Change in net position 2,009,541 (201,234) (2,210,775) -110.0% Beginning net position (54,065,789) (52,056,248) 2,009,541 -3.7% Ending net position (52,056,248) (52,257,482) (201,234) 0.4% Net position:

Net investment in capital assets - - - 0.0% Unrestricted (52,056,248) (52,257,482) (201,234) 0.4% Total net position (52,056,248)$ (52,257,482) $ (201,234) $ 0.4% Statement of Revenues, Expenses and Changes in Fund Net Position Internal Service Fund - Self-Insurance Fund
5 ANNUAL COMPREHENSIVE

FINANCIAL REPORT

CITY OF TORRANCE, CALIFORNIA
DEPAR TMENT OF FINANCE • FISCAL YEAR ENDED

JUNE 30, 202

5 ATTACHMENT 2
6 ANNUAL COMPREHENSIVE FINANCIAL REPORT
Fiscal Year Ended June 30, 2025
Prepared by
Department of Finance
Ian Dailey
Finance Director

CITY OF TORRANCE, CALIFORNIA
7 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
v

i
City Departments
vi

i
Government Finance Officers Association Certificate of Achievement ix

FINANCIAL SECTION
Independent Auditor’s 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
3 2

Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position
3 3

Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds
3 4

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
3 5

Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – General Fund
3 6

Budgetary Comparison Statement – Budget-to-GAAP Reconciliation – General Fund 4 0

Proprietary Fund Financial Statements:

Statement of Net Position
4 2

Statement of Revenues, Expenses and Changes in Net Position 4 3

Statement of Cash Flows
4 4

Fiduciary Fund Financial Statements:

Statement of Net Position
4 5

Statement of Changes in Net Position
4 6

Notes to the Basic Financial Statements
4 7

Required Supplementary Information:

Pension Plan:

Schedule of Changes in Total Pension Liability and Related Ratios During the Measurement Period
10 3

Schedule of Plan Contributions
1 06

PARS Enhanced Retirement Defined Benefit Pension Plan:

Schedule of Changes in Total Pension Liability and Related Ratios During the Measurement Period
1 08

Schedule of Plan Contributions
1 09

8 Other Postemployment Benefits:

Schedule of Changes in Total OPEB Liability and Related Ratios During the Measurement Period
110
Schedule of Plan Contributions
11 1

Combining Financial Statements and Schedules:

Combining Balance Sheet – Nonmajor Governmental Funds
11 3
Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Governmental Funds
114
Combining Balance Sheet – Nonmajor Special Revenue Funds 1 16

Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Special Revenue Funds
12 0
Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – Nonmajor Special Revenue Funds
12 4

Combining Balance Sheet – Nonmajor Capital Project Funds 129
Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Capital Project Funds
130
Combining Balance Sheet – Nonmajor Debt Service Fund
13 2

Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Debt Service Fund
13 3
Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – Nonmajor Debt Service Fund
13 4

Combining Statement of Net Position – Nonmajor Enterprise Fund 136
Combining Statement of Revenues, Expenses and Changes in Net Position – Nonmajor Enterprise Fund
1 37
Combining Statement of Cash Flows - Nonmajor Enterprise Fund 1 38

Combining Statement of Net Position - Internal Service Funds 14 0

Combining Statement of Revenues, Expenses and Changes in Net Position – Internal Service Funds
141
Combining Statement of Cash Flows – Internal Service Funds 142
Combining Statement of Fiduciary Net Position – Custodial Funds 143
Combining Statement of Changes in Fiduciary Net Position – Custodial Funds 14 4
STATISTICAL SECTION (Not Covered by Independent Auditors’ Report) Overview of Statistical Information Presented in Five Categories 14 5
Financial Trends:

Net Position by Component – Last Ten Fiscal Years
147
Changes in Net Position – Last Ten Fiscal Years
148
Fund Balances of Governmental Funds – Last Ten Fiscal Years 150
Changes in Fund Balances of Governmental Funds – Last Ten Fiscal Years 151
Revenue Capacity:

Assessed Value and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years 152
Direct and Overlapping Property Tax Rates – Last Ten Fiscal Years 153
Principal Property Tax Payers – Current Fiscal Year and Nine Years Ago 154
Property Tax Levies and Collections – Last Ten Fiscal Years 155
Water Sold by Type of Customer – Last Ten Fiscal Years
156
Water Rates – Last Ten Fiscal Years
157
Principal Water Customers – Current Fiscal Year and Nine Years Ago 158
Debt Capacity:

Ratio of Outstanding Debt by Type – Last Ten Fiscal Years 159

Ratio of Net General Bonded Debt Outstanding – Last Ten Fiscal Years 160
Direct and Overlapping Debt – June 30, 2025
16 1

Legal Debt Margin Information – Last Ten Fiscal Years
16 2

9 Pledged-Revenue Coverage – Last Ten Fiscal Years
16 3
Demographic and Economic:

Demographic and Economic Indicators – Last Ten Calendar Years 16 4
Principal Employers – Current Fiscal Year and Nine Years Ago 165
Operating:

Full-time and Part-time City Employees by Function – Last Ten Fiscal Years 166
Operating Indicators by Function – Last Ten Fiscal Years 167
Capital Asset Indicators by Function – Last Ten Fiscal Years 168
10 INTRODUCTORY SECTION

ANNUAL COMPREHENSIVE FINANCIAL REPORT
11 i

December 30, 2025

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

In accordance with Article 11 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, 2025.

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 Standards 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 gover nment) 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 143,261 within a boundary of approximately 21 square miles. The

CITY OF

TORRANCE
12 ii
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; 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 through the City Manager’s Office of Economic Development targeted at attracting new businesses and as well as retaining those currently thriving in the City. In the area of tourism, the number of visitors to Torrance hotels has remained steady with occupancy higher than neighboring cities. Finally, several developments are underway throughout the City including the following:

 Gable House Redevelopment Project (22501 Hawthorne Boulevard): 218 mixed-income apartments with 12,000 sq. ft. of commercial space; construction underway.
 Del Amo Circle Apartments (21507 Hawthorne Boulevard): 200-unit, five- story complex with rooftop amenities; construction underway.  Lennar Homes (21515 Madrona Avenue): 274-unit townhome community; construction underway.
 Rose Equities (2325 Crenshaw Boulevard): 272-unit apartment complex with subterranean parking; project entitled.
 City Ventures (1407-1455 Crenshaw Boulevard): 35-unit townhome development; in plan check phase.
 Prologis (Northeast corner of Pr airie/Madrona Avenue and Del Amo Boulevard): 403,000 sq. ft. industrial warehous e with office space; in entitlement phase.
 The Brookhollow Group (KP Torrance Comme rce Center, LLC): 132,425 sq. ft. industrial/cold storage facility; in plan check process.

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.

The City’s financial status continues to remain strong with the City’s unrestricted fund balance for the General Fund ending the fisc al year at $104.8 million, or 36.3% of annual expenditures. Staff continue to monitor the fiscal health of the City through multi-year projections. In these projec tions, CalPERS unfunded accrued liability payments are anticipated to increase over the next decade. To mitigate the impacts of these rising costs, the City has establis hed its CalPERS Section 115 Trust (CEPPT), 13 iii
which ended the fiscal year at $40.9 million and is part of the General Fund’s restricted fund balance. The City is currently budgeted to make its first drawdown from the CEPPT fund in fiscal year 2025-26 to smooth out these rising pension costs. Despite this planned use of fund balance, the City continues to project structural balance over the long-term in its 10-year financial model.

The City has made progress with the City’s Self -Insurance fund. Over the last five years, the City has been able to improve its funded status from 18.6% (FY20-21) to

34.6% (FY24-25). The enterprise funds cont inue 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 c onformity with GAAP. The internal control structure is designed to provide reasonable, but not absolute, assurance that the above-referenced objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control 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 budget 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 cycl e 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 each year, with amendments and appropriations done annually, similar to the operating budget bas ed on the financial viability to fund new infrastructure projects.

The City’s annual appropriated budget is es tablished and controlled at the fund and individual organization level (department). The budget is monitored at a more detailed level (program) that closely tracks cost. City Manager and Department Directors are held accountable for meeting the objectives within each of their 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 14 iv
extent they have not been expended or encumbered. Capital project appropriations lapse when individual projects are closed.

INDEPENDENT AUDIT

The City Charter requires an annual audit of the records and accounts of the City by an independent Certified Public Accountant. 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 Presentation Award to the City for the fiscal year 2025-26 Adopted Operating Budget and Capital Improvement Plan for the fourth 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 Presentation 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 pl an, operations guide and a communications device.

Additionally, the California Society of Municipal Finance Officers (CSMFO) awarded Operating Budget Excellence Award to the City for its annual budget document for the fiscal year 2024-25 for the second consecutive year. This award recognizes public sector agencies with well-presented budget documents, best practices, processes, and procedures and is valid for a one-year peri od. The City submitted an application for award consideration for the fiscal year 2025-26 Adopted Operating Budget, and we believe the budget document continues to meet the requirements.

The GFOA also awarded a Certificate of Ac hievement for Excellence in Financial Reporting to the City of Torrance for its Annual Comprehensive Financial Report for the fiscal year ended June 30, 2024. 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 ac cepted accounting principles and applicable legal requirements. A Certificate of Achievement 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.

15 v
OTHER

The City recommends that the Management Discussion and Analysis section be read in conjunction with the other sections of the ACFR to obtain an understanding of the City’s financial condition as of June 30, 2025. This section also provides an overview of the City’s financial activities during the fiscal year.

Respectfully submitted,

Ian Dailey
Finance Director

16 vi

CITY OF TORRANCE

DIRECTORY OF CITY OFFICIALS

June 30, 2025

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
Ian Dailey, 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

17 vii

18 viii

19 ix

20 FINANCIAL SECTION

ANNUAL COMPREHENSIVE FINANCIAL REPORT
21 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, 2025, the budgetary comparison for the General Fund for the year ended June 30, 202

5 , 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, 20 25 , 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

Emphasis of Matter

Implementation of a New Accounting Standard
As discussed in Notes 1 and 19, the City implemented the provisions of Governmental Accounting Standards Board Statement No. 101,

Compensated Absences
, during the fiscal year ended June 30,
2025. Our opinion is not modified with respect to this matter. 22 2
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.

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.
23 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 2 7 , an d the required supplementary information on pages 10 3 through 144 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 method s 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. 24 4
Other Reporting Required by Government Auditing Standards

In accordance with

Government Auditing Standards
, we have also issued a report dated
December 30, 2025

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 30, 2025

25 MANAGEMENT

DISCUSSION & ANALYSIS

ANNUAL COMPREHENSIVE FINANCIAL REPORT
26 CITY OF TORRANCE, CALIFORNIA
Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2025
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 for the fiscal year ended June 30, 2025 (Fiscal Year 2024-25). 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, 2025.

FINANCIAL HIGHLIGHTS
• Total assets and deferred outflows

of resources of the City excee ded its liabilities
and deferred inflows of resources by $362.3 million, as of June 30, 2025. Of this amount, $513.4 million

represents net inve

stment in capital assets, $155.4 million

represents net position res tricted for specific purposes, and ($306.5) million represents unrestricted deficit in net position. ($423.9) million

repres

ents

unrestricted

defic

it in net position for gove

rnmental activities a

$117.4 million

represents unrestricted net position for business-type activities. • The City’s to

tal

net position

at fiscal year-end incr eas ed $43.3 million, to $362.3 millio

n, which

is primarily driven by the accumulation of current ass ets which increased by $77.0

million to $698.8 million as

of June

30,

2025. This increase is
net of

adjustment of the beg

inning

net position balance resulting from GASB

101

implementation which amounted to

$7 million.
• The City’s net capital assets (Table 4) increased by $33.0 million or 5.9% to $597.0 million as of June 30, 2025,

as the City continues to invest and complete

capital projec ts. This also includes the inta ngible assets, net of accumulated amortization per implementation of GASB

96 for Subscription-

Based Information

Technology

Arrang

ements (SBITA).
• The

City’s outstanding debt

(Table 5)

crease d by $11.3 millio n to $3 79.0 million
as of June

30, 2025. Within the City’s governmental activities, outstanding debt decreas

by $10.7 mi

llion

due t

paym

ents

made on

e 20

20 and

202

1 Lease

Revenue B

onds

and 2

016

Refund

ing

Certificates. Within the City’s

business-type
activities, long-term debt decreased

by $0.6

million d

to continued

yments

made

on the installment loan

greement to

drill and construct a

new water

well,

for the North Torra

nce

Well Field Project.
• The City’s total pension liability decrea sed $18.6 million from $250.5 million in fiscal y

ear

2023-24 to

a $231.9 million t

otal

ension

liability in fisc al year
2024-

25. • The City’s other postemployment benefit

s (OPEB) liability increased from $61.7

million in fiscal year 2023-24 to $63.9 million in fisc al year 202 4-25, an increase of $2.2 million or 3.6%.
• At the end of the fiscal year, the City’s governmental funds reported

total year

ending fund

bala

nces

$253.6 million, compared to $212.0 million at

the end of

the prior fiscal year, which is an in crease of $41.6 million. 5 27

CITY OF TORRANCE, CALIFORNIA
Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2025
 The General Fund reported an ending fund balance of $150.8 million as of June 30, 2025, compared to $120.1 million as of June 30, 2024, which represents an increase of $30.7 million. Excess revenues over expenditures (before transfers and SBITA) were $7.0 million in 2024-25, which represents a decrease from $33.6 million in 2023-24. More detailed analysis is included in the Financial Analysis section below.

OVERVIEW OF THE BASIC FINANCIAL STATEMENTS
This annual report con
sists 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.

In Fiscal Year 2024-25, the City has implemented GASB 101 related to Compensated Absences which resulted in restatement of beginning net position in both the governmental activities and the business-type activities. The City also implemented GASB 102, this standard did not have an impact on the City’s financial statements.

Government-wide financial statements. The government-wide financial statements are designed to provide information 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 recover all or a significant portion 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 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 6 28

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2025

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 res ources, 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 about 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 gover nment-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 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 7 29

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2025

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 en suring 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 $362.3 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, $513.4 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, $155.4 million, represents resources that have restrictions on how they may be used. The remaining balance of the City’s unrestricted net position, ($306.5) 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.

8 30

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2025

The City’s net position for fiscal year 2024-25 compared to 2023-24 is shown in Table 1:

Total assets increased $110.0 million or 9.3% from the prior fiscal year. Governmental activities increased by $72.9 million and business-type activities increased by $37.1 million. The increase in governmental activity assets is primarily driven by increases in pooled cash and investments and cash with fiscal agents. The increase in business- type activity assets is primarily driven by increases in pooled cash and investments and accounts receivable (specifically accounts receivable related to the pending receipt of a substantial legal settlement).

Total deferred outflows of resources decreased by $54.7 million from the prior fiscal year. Governmental activities decreased $49.5 million and business-type activities decreased $5.2 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 decreased in differences in projected and actual earnings for pension plans.

Total liabilities increased $14.6 million or 1.7%

from the prior fiscal year. Governmental
activities increased by $3.4 million and business-type activities increased by $11.2 million. The increase in governmental activities is primarily driven by increases in accrued settlement liabilities in the Self Insurance fund offset by decreases in total pension liability. The increase in business- type activities is primarily driven by the issuance of new debt in the Water Enterprise Fund to fund the construction of new ground water wells and a new transmission main.
2025 2024 2025 2024 2025 2024
$355.8 $310.0 $343.0 $311.8 $698.8 $621.8
419.9 392.8 177.1 171.2 597.0 564.0 775.7 702.8 520.1 483.0 1,295.8 1,185.8

94.7 144.2 7.7 12.9 102.4 157.1
730.0 746.6 41.4 30.7 771.4 777.3

80.6 60.6 23.9 23.4 104.5 84.0
810.6 807.2 65.3 54.1 875.9 861.3

6.7 7.9 153.3 154.7 160.0 162.6 353.1 330.7 160.3 167.1 513.4 497.8
123.9 105.0 31.5 32.3 155.4 137.3
(423.9) (403.8) 117.4 87.7 (306.5) (316.1)
$53.1 $31.9 $309.2 $287.1 $362.3 $319.0
Current and other assets
Current and other liabilities
Long-term debt
Deferred outflows of resources
Total assets
Capital assets
Net Position
Deferred inflows of resources
Total liabilities
Unrestricted
Restricted
Net investment in capital assets
Activities Activities Total
Table 1
Statement of Net Position
(In Millions)
Governmental Business-type
9 31

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2025

Overall, as a result of the above changes, the City’s total net position increased by a total of $43.3 million. Net position of t

he City’s governmental activities amounted to
$53.1 million. $353.1 million is net governmental investment in capital assets such as land, buildings, machinery, infrastructure, equipment and other capital improvements, net of related debt; $123.9 million is re

stricted for streets and highways, capital
projects, community development, public safety, pension and debt service; and ($423.9) million is unrestricted. The net posit ion of the City’s governmental activities increased by $21.2 million (FY2024-25 is $53.1 million compared to FY2023-24 of $31.9 million) prior to restatement. Net position of the City’s business-type activities amounted to $309.2 million. $160.3 million is

net investment in capital assets, $31.5
million is restricted for the Transit System Fund, and $117.4 million is unrestricted.

The net position of the City’s business-type activities increased by $22.1 million (FY2024-25 is $309.2 million compared to FY2023-24 of $287.1 million) prior to restatement. This is discussed in more detail in the following section, Changes in Net Position.

10 32
2025 2024 2025 2024 2025 2024
Charges for services* $48.4 $33.8 $1 22.4 $96.2 $1 70.8 $1 30.0 Operating grants/contributions 1 3.8 1 3.6 30.8 26.0 44.6 39.6 Capital grants/contributions 37.2 30.9 0.6 0.1 37.8 31 .0 Property taxes 67.4 64.2 - - 67.4 64.2
Sales taxes 82.7 85.5 - - 82.7 85.5
Utility users tax 40.9 40.7 - - 40.9 40.7
Oc c upanc y tax 13.0 12.6 - - 13.0 12.6
Business lic ense tax 10.9 10.5 - - 10.9 10.5
Other taxes* 8.3 19.1 - - 8.3 19.1

40.9 35.4 11.1 9.7 52.0 45.1
Motor vehic le tax (unrestric ted) 0.2 0.2 - - 0.2 0.2

0.7 0.8 0.1 0.6 0.8 1.4
364.4 347.3 1 65.0 1 32.6 529.4 479.9

50.6 44.8 - - 50.6 44.8
200.1 1 84.0 - - 200.1 1 84.0

47.0 31.2 - - 47.0 31.2

27.7 26.1 - - 27.7 26.1

20.8 18.8 - - 20.8 18.8

13.0 13.0 - - 13.0 13.0
- - 8.7 7.1 8.7 7.1
- - 39.7 34.3 39.7 34.3
- - 52.1 48.5 52.1 48.5
- - 4.8 4.6 4.8 4.6
- - 14.6 15.7 14.6 15.7
359.2 317.9 119.9 110.2 479.1 428.1

5.2 29.4 45.1 22.4 50.3 51 .8

22.4 8.4 (22.4) (8.4) 0.0 0.0
$27.6 $37.8 $22.7 $1 4.0 $50.3 $51 .8
31 .9 (5.8) 287.1 273.1 31 9.0 267.3 (6.4) - (0.6) (7.0) -

25.5 (5.8) 286.5 273.1 312.0 267.3
Net Position- ending $53.1 $31 .9 $309.2 $287.1 $362.3 $31 9.0 Net Position - beginning (as
restated)
Governmental Business- type
Activities Activities

CITY OF TORRANCE, CALIFORNIA
Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2025

Changes in net position
The City’s total rev enues are $529.4 million and total costs of all programs and services are $479.1 million which resulted in a c hange in net position of $50.3 million during the year (See Table 2). The City rest ated the beginning net position due to the

implementation of GASB 101, Compensated Absences.

ble

2 Summa

C
ha

nge

s in

N
e

P
osition
(In

M
illions)
Total
Revenues
Public safety
Expenses
General government
Incr ease (decrease) in net
Total expenses
Excess of revenues over expenses
Miscellaneous
Total revenues
Transfers
Public works
Culture and recreation
Program revenues:

General revenues:

Restatement for change in
accounting principle (note 1 9)
Investment earnings
Community development
Interest on long-term debt
Airport
before transfers
Transit
Water
Sewer
Sanitation
Net Position - beginning (as previously
reported)
11 33

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2025

Governmental Activities: Revenues. The City’s governmental activities total revenues of $364.4 million, by category, are shown below in Figure A-1.

Overall, revenues for the City’s governmental activities increased by $17.1 million, or

4.9%. The largest category of revenue for governmental activities is sales tax, which represents 22.7% of total governmental activities revenues. This category totaled $82.7 million in fiscal year 2024-25, compared to $85.5 million in fiscal year 2023-24, which is a decrease of $2.8 million or 3.3%. This is primarily due to lower sales tax receipts than prior year, specifically in the category of Business and Industry. 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 $67.4 million in fiscal year 2024-25, compared to $64.2 million in fiscal year 2023-24, which is an increase of $3.2 million or 5.0%. This is primarily due to growth in the City’s net taxable assessed property values. The third largest category, the Charges for Services classification, represents 13.3% of total governmental activities revenues. This category totaled $48.4 million in fiscal year 2024-25, compared to $33.8 million in fiscal year 2023-24, which is a $14.6 million or 43.2% increase. $11.8 million of this is strict ly due to change in financial reporting presentation noted in MD&A Note 1 (see page 20). After adjusting for this presentation 12 34

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2025

change, this increase is primarily due to increased revenues related to building permits and parking citations. The fourth largest category of revenues for governmental activities, investment earnings, increased by $5.5 million to $40.9 million in fiscal year 2024-25, up from $35.4 million in 2023-24. The fifth largest category is utility user’s tax, which represents 11.2% of total governmental activities revenue. This category totaled $40.9 million in fiscal year 2024-25, compared to $40.7 million in fiscal year 2023-24, which is an increase of $0.2 million or 0.5%.

The category of Other Taxes decreased by $ 10.8 million to $8.3 million in fiscal year 2024-2025, down from $19.1 million in fiscal year 2023-24. $12.6 million of this decrease is strictly due to change in financial reporting presentation noted in MD&A Note 1 (see page 20). After adjusting for this presentation change, this revenue classification increased largely due to increased receipts for Construction Tax compared to the prior fiscal year.

13 35

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2025

Governmental Activities: Functional Expenses. The City’s governmental activities total expenditures of $359.2 million as shown below in Figure A-2.

The City’s governmental activities expenditures increased by $41.3 million or by

13.0%, when comparing fiscal year 2024-25 with fiscal year 2023-24. The largest category of expense for governmental activities is public safety, which represents

55.7% of total governmental activities expenses. This category totaled $200.1 million in fiscal year 2024-25, compared to $184.0 million in fiscal year 2023-24, which is an increase of $16.1 million or 8.7%. The second largest category is general government, which represents 14.1% of total governmental activities expenses. This category totaled $50.6 million in fiscal year 2024-25, compared to $44.8 million in fiscal year 2023-24, which is an increase of $5.8 million or 12.9%. The third largest category is public works, which represents 13.1% of total governmental activities expenses. This category totaled $47.0 million in fiscal year 2024-25, compared to $31.2 million in fiscal year 2023-24, which is an increase of $15.8 million or 50.6%.

14 36

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2025

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 2024-25 is Community Development. Community Development had expenses of $20.8 million and program revenues of $21.0 million, which is a ratio of 101.0%. The second highest is Public Works. Public Works had expenses of $47.0 million and program revenues of $28.6 millio n, which is a ratio of 60.9%. The third highest is General Government. General Government had expenses of $50.6 million and program revenues of $26.9 million, which is a ratio of 53.2%.

The function with the lowest percentage of program revenues to direct expenses in fiscal year 2024-25 is Public Safety. Public Safety had expenses of $200.1 million and program revenues of $15.5 million, which is

a ratio of 7.7%. The second lowest is
Culture and Recreation. Culture and Recreation had expenses of $27.7 million and program revenues of $7.4 million, which is a ratio of 26.7%. 15 37

CITY OF TORRANCE, CALIFORNIA
Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2025
Business-type Activities: Revenues. The City’s business-type activities total revenues of $165.0 million, by category, are shown below in Figure A-4.

Overall, revenues for the City’s business-type activities increased by $32.4 million, or

24.5%. The largest category of revenue for business-type activities is charges for services, which represents 74.2% of tot al business-type activities revenues. This category totaled $122.4 million in fiscal year 2024-25, compared to $96.2 million in fiscal year 2023-24, which is an increase of $26.2 million or 27.1%, primarily due to the accrual of settlements related to ongoing remediation efforts. The second largest category is operating grants, which represent 18.7% of total business-type activities revenues. This category totaled $30.8 million in fiscal year 2024-25, compared to $26.0 million in fiscal year 2023-24, which is an increase of $4.8 million or 18.5%, primarily due to receipt of additional grant funding for the Transit Fund. The third largest category for business-type activities revenue is Investment Earnings, which showed increase of $1.4 million to $11.1 million in fiscal year 2024-25, compared to $9.7 million in fiscal year 2023-24.
16 38

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2025

Business-type Activities: Expenses. The City’s business-type activities total expenses of $119.8 million, by category, are shown below in Figure A-5.

The City’s business-type activities expenditures increased by $9.7 million, or 8.7%, when comparing fiscal year 2024-25 with fiscal year 2023-24. The largest category of expense for business-type activities is the City’s Water Fund, which represents 43.5% of total business-type activities expenses. This category totaled $52.1 million in fiscal year 2024-25, compared to $48.5 million in fiscal year 2023-24, which is an increase of $3.6 million or 7.4%. This increase is mainly due to increased water costs and pumping assessment expenses. The second largest category is the City’s Transit System Fund, which represents 33.1% of total business-type activities expenses. This category totaled $39.7 million in fiscal year 2024-25, compared to $34.3 million in fiscal year 2023-24, which is an increase of $5.4 million or 15.5%. This increase is mainly due to increased expenses for salary and benefits as Transit continues to expand its operating capacity. The third largest category is the City’s Sanitation fund, which represents 12.2% of total business-type ac tivities expenses. This category totaled $14.6 million in fiscal year 2024-25, compared to $15.7 million in fiscal year 2023-24, 17 39

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2025

a decrease of $1.1 million or 7.0%. This decrease is mainly due to reductions in assessed contributions to the Self Insurance Fund for liability claims.

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 City’s business-type activities fund their own operations. 18 40

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2025

FINANCIAL ANALYSIS OF THE CITY’S MAJOR FUNDS

Governmental funds

The focus of the City’s major 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 $253.6 million (See Table 3). The General Fund is the main operating fund of the City and is the only major fund this year.

General Fund

As shown in Table 3, General Fund revenues increased $7.9 million or 2.9% from the prior fiscal year. Within the General Fund revenues, there are seven main categories, of which the City experienced increases in four categories in fiscal year 2024-25. The largest revenue source in the General Fund is taxes, which decreased $9.3 million or

4.0%. $12.6 million of this decrease is strictly due to change in financial reporting presentation noted in MD&A Note 1. After controlling for this presentation change, this 2025 2024 2025 2024 2025 2024
Taxes* $222.0 $231 .3 $1 .3 $1 .3 $223.3 $232.6
Lic enses, fees and permits* 18.5 5.2 2.3 2.1 20.8 7.3 Fines, forfeitures and penalties 1.7 0.7 0.8 0.2 2.5 0.9 Use of money and property 14.6 10.8 26.3 25.3 41.0 36.1 Intergovernmental 0.4 0.4 50.8 44.2 51.2 44.6 Charges for c urrent servic es 25.1 25.5 - - 25.1 25.5 Other Revenues 0.2 0.7 0.4 0.3 0.6 1.0 282.5 274.6 81 .9 73.4 364.5 348.0
General government 36.9 31.9 6.5 5.1 43.4 37.0 Nondepartmental 13.6 10.3 - - 13.6 10.3 Public Safety 169.2 148.3 4.7 3.5 173.9 151.8 Public works 20.2 18.5 32.3 11.4 52.5 29.9 Culture and rec reation 25.3 23.1 1.2 0.6 26.5 23.7 Community development 10.1 8.6 9.9 8.7 20.0 17.3 Debt Service
Princ ipal Retirement - - 10.6 10.0 10.6 10.0 Interest and fisc al c harges - - 12.5 12.6 12.5 12.6 Capital lease 0.2 0.2 - - 0.2 0.2 275.5 241 .0 77.7 51 .9 353.3 292.8

7.0 33.6 4.2 21.5 11.2 55.2

15.8 3.0 6.6 1.2 22.4 4.2 SBITA 7.9 5.0 0.1 0.1 8.0 5.1

30.7 41.7 10.9 22.8 41.6 64.5 Fund balanc e- beginning 120.1 78.4 91.8 69.0 212.0 147.4 Fund balance- ending $1 50.8 $1 20.1 $1 02.7 $91 .8 $253.6 $21 2.0 Increase (decrease) 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
19 41

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2025

classification effectively increased by $3.3 million primarily driven by the increase in Property Tax and Construction Tax receipts, partially offset by decreases in Sales Tax receipts. The second largest revenue source in the General Fund is charges for current services, which decreased $0.4 million or 1.6%. The third largest revenue source in the General Fund is licenses, fees and permits, which increased $13.3 million to $18.5 million in fiscal year 2024- 25, compared to $5.2 million in fiscal year 2023-24. $11.8 million of this increase is st rictly due to change in financial reporting presentation noted in MD&A Note 1 (see below). After adjusting for this presentation change this classification effectively increased by $1.5 million primarily due to an increase in building permit revenues. The fourth largest revenue source in the General fund is use of money and property, which in creased $3.8 million to $14.6 million in fiscal year 2024-25, compared to $10.8 million in fiscal year 2023-24. This increase is primarily due to increased investment earnings and increases in market value of securities.

General Fund expenditures increased $34.5 million from $241.0 million in fiscal year 2023-24 to $275.5 million in fiscal year 2024-25. This increase was mainly driven by an increase in Public Safety of $20.9 million or 14.1% and increases in other functions of $13.7 million. Public Safety expenditures increased mainly due to increases in salaries and compensation of approxim

ately $14.9 million (i
ncluding $3.4 million
related to incentives for employee recruitment and retention). Other significant areas of General Fund expenditure increases incl ude: $6.3 million related to increased salaries and compensation for Non-Public Safety functions, and $4.3 million related to increased contributions to the self-insurance fund.

The fund balance increased $30.7 million in General Fund in fiscal year 2024-25, down from $41.7 million in fiscal year 2023-24.

*MD&A Note 1: Changes to or within the financial reporting entity:

Revenues related to franchise fees, Public Education Government fees, and alarm permit fees were previously reported as follows:


On Table 2, these revenues were previously presented under the classification of Other Taxes and are now presented under the classification of Charges for Services.


On Table 3, these revenues were previously presented under the classification of Taxes and are now presented under the classification of Licenses, Fees, and Permits.

These revenues totaled $11.8 million in fiscal year 2024-25 and $12.6 million in fiscal year 2023-24
As prescribed by GASB100.36-37, prior period presentation has not been restated to address this change within the financial reporting entity. 20 42

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2025

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 $1.8 million compared to the decrease of $1.9 million in fiscal year 2023 -24. The slight improvement in change of net position is mainly driven by increases in Passenger Fares and Transit Access Pass Revenues.

The Water Fund had an increase in fund net position of $8.3 million compared to the increase of $7.3 million in fiscal year 2023-24. The increase in change of net position is significantly due to increased Charges for Services revenues resulting from annual water rate increases that went into effect on January 1, 2025. Subsequent increases are scheduled to be implemented annually through 2029.

The Sewer Fund had an increase in fund net position of $3.4 million compared to the increase of $2.9 million in fiscal year 2023-24, primarily driven by increased Charges for Services revenues resulting from annual sewer rate increases that went into effect on January 1, 2025. Subsequent increases are scheduled to be implemented annually through 2027.

The Municipal Airport Fund had an increase in fund net position of $9.9 million, compared to the increase of $5.8 million in fiscal year 2023-24. The increased change in net position is primarily related to the accrual of significant settlements associated with ongoing remediation efforts.

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 Cit

y 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.

21 43

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2025

During the First Quarter Budget Presentation, the following modifications were approved:
 Increase Mayor and City Council Compensation (General Fund)  Delete 2.0 FTE Program Coordinator and Add 2.0 FTE Recreation Supervisor in the Community Services Department (General Fund)
 Delete 1.0 FTE Senior Program Specialist and Add 1.0 FTE Instructor II in the Community Services Department (General Fund)
 Delete 1.0 FTE Assistant City Librarian and Add 1.0 FTE Senior Librarian in the Community Services Department (General Fund)
 Delete 3.27 FTE Program Leader, Add 2.77 FTE Program Specialist, and Add

0.96 FTE Senior Program Specialist in the Community Services Department (General Fund)
 Delete 1.0 FTE Senior Business Manager and Add 0.5 FTE Deputy Finance Director in the Finance Department (General Fund)
 Delete 1.35 FTE Box Office Attendan t, Delete 1.2 FTE Senior Box Office Attendant, Delete 1.0 FTE Stage Manager, Delete 1.0 FTE Facility Operations Attendant, Senior in the General Services Department (General Fund)  Delete 1.2 FTE Theatre Tech Coordinator and Add 1.7 FTE Theater Technician in the General Services Department (General Fund)
 Delete 1.0 FTE Intern and Add 1.0 FTE Staff Assistant in the General Services Department (General Fund)
 Add 1.0 FTE Capital Projects Construction Superintendent in the General Services Department (General Fund)
 Add 1.0 FTE Maintenance Worker in the Public Works Department (General Fund)
 Add 1.0 FTE Lead Maintenance Worker in the Public Works Department (General Fund)

During the Mid-Year Budget presentation, the following modification was approved:
 Delete 1.0 FTE Planning Associate and Add 1.0 FTE Senior Planner in the Community Development Department (General Fund)
 Increase Budget for Expedited Plan Review Services in the Community Development Department (General Fund)

Although the City amended its General Fund expenditure budget, actual charges to appropriations exceeded the final adopted budget amounts by $3.3 million. The budgetary fund balance for July 1, 2025 exceeded the final budgeted values primarily due to revenues that outperformed the budget, specifically transfers in from the Airport fund related to significant settlements asso ciated with ongoing remediation efforts.

The total expenditure generated a negative budgetary variance only due to the recording of non-cash adjustments related to Subscription-Based Information Technology Arrangements (SBITAs).

The City’s General Fund fund balance of $150.8 million differs from the General Fund’s budgetary fund balance of $147.5 million bec ause $3.3 million of encumbrances are included for budgetary purposes.
22 44

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2025

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, 2025 amount s to $597.0 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.

The total capital assets in the governmental activities increased by $27.1 million ($419.9 million in fiscal year 2024-25, compared to $392.8 million in 2023-24) and the business-type activities increased by $5.9 million ($177.1 million in fiscal year 2024- 25, compared to $171.2 million in 2023-24). More detailed information about the City’s capital assets and its activities during the year is shown in Note 3 of the Notes to Basic Financial Statements.
2025 2024 2025 2024 2025 2024
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 19.3 16.4 9.8 5.0 29.1 21.4
Infrastructure 171.1 164.6 128.3 130.1 299.4 294.7
Buildings and improvements 74.3 74.9 8.6 8.8 82.9 83.7
Equipment 37.1 24.7 20.0 16.8 57.1 41.5
Easement - - 1.0 1.1 1.0 1.1 Intangible 14.9 9.0 0.6 0.6 15.5 9.6 Total $419.9 $392.8 $177.1 $171.2 $597.0 $564.0
Table 4
Capital Assets
(net of depreciation, in millions)
Activities Activities Total
G overnmental Business-type
23 45

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2025

Long-Term Debt

At the end of the fiscal year, the City ha d total bonded debt outstanding of $379.0 million as shown in Table 5:

For governmental activities, the City curr ently has $377.3 million of outstanding bonded debt. During fiscal year 2024-25 the total debt of the City decreased by $10.7 million due to the annual payments on the Ci ty’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 bonded debt of $1.7 million due to the installment sale agreement 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.

2025 2024 2025 2024 2025 2024
Revenue bonds and notes
(backed by specific tax
and fee revenues) 377.3$ 388.0 $ 1.7 $ 2.3 $ 379.0 $ 390.3 $ Table 5
Outstanding Debt
(In Millions)
Activities Activities Total
G overnmental Business-type
24 46

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2025

ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES

Key Highlights of the 2025-26 Budget
(Reference the 2025-26 Adopted Budget and Capital Improvement Plan along with the Fiscal Year 2025-26 First Quarter Budget Review Report)

The City Council adopted in June 2025, the first year (fiscal year 2025-26) 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 decrease to the General Fund’s overall fund balance of $11 million as a result of planned use of the City’s pension prefunding trust to smooth the rising costs of the City’s CalPERS pension costs and additional one-time contributions to the City’s Capital Improvement Funds.

The fiscal year 2024-25 Bu dget was awarded the Gove

rnment Finance Officers
Association’s Distinguished Budget Presentation Award Program. Additionally, the fiscal year 2024-25 budget was awarded the California Society of Municipal Finance Office’s Operating Budget Excellence Aw ard. The Fiscal Year 2025-26 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 2025 for fiscal year 2025-26, which indicated that the General Fund Operating Fund revenues were projected to realize a deficit of $3.9 million largely due to one-time litigation expense in the Airport Fund temporarily lowering Operating Transfers In by $4.7 million.

Additionally, it is projected that the General Fund Operating Fund’s expenditure budget will operate at a surplus of $4.7 millio n. This is largely driven by vacancies savings. As a result, the General Fund Operating Fund is projected to net a deficit of $8.2 in fiscal year 2025-26.

This Budget Review Report highlighted other Areas of Focus that will be monitored for years to come. This includes:
 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, 2025, this fund was underfunded by approximately $52.2 million. This is driven by existing outstanding liabilities in workers’ compensation totaling $49.5 million and liability claims of $18.4 million. As of June 30, 2025, the fund’s assets stand at $27.5 million. As a result, the Self -Insurance Fund is approximately 35% funded, which continues to place it in the High-Risk Category of the City’s Key Performance Indicator tracking. 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.
 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 25 47

CITY OF TORRANCE, CALIFORNIA

Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2025

advancement opportunity. Staff highlighted positive trends in fiscal year 2025- 26 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.
 Aging Infrastructure and City Facilities/Parks:

The City owns and operates
$1 billion worth of buildings, public facilities, and infrastructure (book value).

With each passing year, these buildings age and deteriorate, many of which are still in their original condition. Currently, the City’s capital assets have passed their half-life mark, requiring heavy maintenance, upgrades, and repairs. During FY23-24, the City completed a Building Index Study and assessed the current state of the City’s building and park assets. The Building Index Study, which did not include park playgrounds, playing courts, or utility infrastructure at parks, identified $205 million as the minimum investment required over the next 10 years to maintain the current state of the City’s buildings. This translates to approximately $20.5 million per year, exceeding the City’s fiscal capacity of approximately $8 million on a recurring basis. This will be of continued focus in coming budget cycles 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 FY24-25, the California Public Employees’ Retirement System (CalPERS) reported investment gains of 12.1%, surpassing its discount rate of

6.8%. This will translate to a decrease in unfunded accrued liability (UAL) payments over the amortized period of 20 years, beginning in FY27-28. To help mitigate the impacts of fluctuations in CalPERS investment performance, the City established a Section 115 Trust with CalPERS (CEPPT). This restricted fund serves as a supplemental reserve to the City’s Economic Anomaly Reserve, specifically dedicated to pension costs. The City is projected to make its first drawdown of $7.3 million from the CEPPT Fund in FY25-26 to smooth the rising pension costs previously mentioned.

Additionally, as part of negotiations with the Torrance Professional and Supervisory Association (TPSA) and Engineers and Fiscal Employees Association (TFEA) in 2024, the PARS supplemental pension was frozen capping the accrued liability of this pl an. The City will continue to make its actuarially determined contribution each fiscal year addressing the funded status of this plan over coming budget cycles.

Employee Pensions and Related Debt:

 The City is primarily a service organization with 73.3% 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 17.5% (CalPERS cost is 11.6% and LRB cost 5.9%).
o Based on CalPERS 12.1% estimated investment return in fiscal year 2024-25.
26 48

CITY OF TORRANCE, CALIFORNIA
Management’s Discussion and Analysis
For the Fiscal Year ended June 30, 2025
 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, 2025 the balance stands at $40.9 million. In fiscal year 2025-26 an additional contribution of $2.3 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 $158 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 o
rt 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. 27 49

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28 50

BASIC FINANCIAL

STATEMENTS

ANNUAL COMPREHENSIVE FINANCIAL REPORT
51 GOVERNMENT - WIDE

FINANCIAL STATEMENTS

ANNUAL COMPREHENSIVE FINANCIAL REPORT
52 Governmental
Activities
Business-type
Activities Total
Assets
Pooled cash and investments (note 2) 260,566,993$ 124,819,934 $ 385,386,927$ Cash and cash equivalents with fiscal agents (note 2) 45,287,970 - 45,287,970 Accounts receivable 16,646,472 30,448,131 47,094,603 Accrued interest receivable 1,273,485 1,744,179 3,017,664 Due from other governments (note 16) 22,527,767 8,516,982 31,044,749 Lease receivable - current (note 5) 473,796 5,109,172 5,582,968 Notes receivable (note 4) 32,900 - 32,900 Advance to custodial fund 79,157 - 79,157 Inventories, at cost 1,462,223 6,009,303 7,471,526 Prepaids and other assets 1,149,275 375,573 1,524,848 Long term assets:

Advance to successor agency (note 22) 4,062,770 1,234,538 5,297,308 Lease receivable - long term (note 5) 2,311,231 164,727,684 167,038,915 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 19,323,750 9,778,299 29,102,049 Infrastructure, net of accumulated depreciation 171,072,065 128,263,074 299,335,139 Building and improvements net of accumulated depreciation 74,353,129 8,600,984 82,954,113 Machinery, equipment, furniture and fixtures, net of accumulated depreciation 37,106,660 20,035,925 57,142,585 Easement, net of accumulated depreciation - 997,658 997,658 SBITA assets, net of accumulated amortization 14,871,368 665,056 15,536,424 Total Assets 775,739,942 520,159,625 1,295,899,567 Deferred Outflows of Resources
Deferred refunding charge 5,171,937 - 5,171,937 Deferred pension amounts (notes 9 and 10) 71,141,233 5,571,056 76,712,289 Deferred OPEB amounts (note 11) 18,443,774 2,094,952 20,538,726 Total Deferred Outflows of Resources 94,756,944 7,666,008 102,422,952 Liabilities
Accounts payable 11,735,875 7,633,990 19,369,865 Accounts payable - contract retention 1,358,103 28,611 1,386,714 Accrued liabilities 21,041,453 6,187,519 27,228,972 Due to other governments (note 16) 1,077 - 1,077 Notes payable (note 8) 227,561 - 227,561 Unearned revenue (note 17) 1,122,624 7,250,431 8,373,055 Deposits and guarantees 7,021,989 356,358 7,378,347 Interest payable 3,130,054 46,939 3,176,993 SBITA liability - portion due or payable within one year (note 6) 1,728,198 228,293 1,956,491 Long-term liabilities - portion due or payable within one year (notes 7, 8 and 15) 33,272,453 2,128,296 35,400,749 Long-term liabilities:

Long-term liabilities - portion due or payable after one year (notes 7, 8 and 15) 444,391,365 17,301,161 461,692,526 Notes payable - due in more than one year (note 8) 470,048 - 470,048 SBITA liability - due in more than one year (note 6) 12,993,456 428,588 13,422,044 Total pension liability - due in more than one year (notes 9 and 10) 214,720,555 17,133,297 231,853,852 Total OPEB liability - due in more than one year (note 11) 57,405,117 6,520,403 63,925,520 Total Liabilities 810,619,928 65,243,886 875,863,814 Deferred Inflows of Resources
Deferred leases (note 5) 2,526,385 152,934,798 155,461,183 Deferred pension amounts (notes 9 and 10) 1,905,339 131,363 2,036,702 Deferred OPEB amounts (note 11) 2,317,616 263,247 2,580,863 Total Deferred Inflows of Resources 6,749,340 153,329,408 160,078,748 Net Position (Deficit)
Net investment in capital assets 353,068,646 160,264,532 513,333,178 Restricted
Streets & highways 56,094,592 - 56,094,592 Capital projects 4,593,996 - 4,593,996 Community development 19,156,673 - 19,156,673 Public safety 3,222,580 - 3,222,580 Transportation program - 31,542,148 31,542,148 Pension 40,852,636 - 40,852,636 Debt service 1,145 - 1,145 Unrestricted (423,862,650) 117,445,659 (306,416,991) Total Net Position (Deficit) 53,127,618$ 309,252,339$ 362,379,957$ See accompanying notes to the basic financial statements.

CITY OF TORRANCE, CALIFORNIA
Statement of Net Position
June 30, 2025
29 53
Functions/Programs Expenses
Charges for
Services
Operating
Grants and
Contributions
Capital Grants
and
Contributions
Governmental
Activities
Business-type
Activities Total
Primary Government:

Governmental Activities:

General government 50,593,268$ 14,997,749 $ 3,920,710 $ 7,941,811 $ (23,732,998) $ - $ (23,732,998)$ Public safety 200,141,292 13,329,872 792,381 1,370,837 (184,648,202) - (184,648,202) Public works 46,988,118 1,144,356 - 27,501,373 (18,342,389) - (18,342,389) Culture and recreation 27,688,060 7,320,938 94,209 - (20,272,913) - (20,272,913) Community development 20,848,427 11,574,876 9,019,056 371,506 117,011 - 117,011 Interest on long-term debt 12,946,750 - - - (12,946,750) - (12,946,750) Total Governmental Activities 359,205,915 48,367,791 13,826,356 37,185,527 (259,826,241) - (259,826,241) Business-Type Activities:

Municipal airport 8,718,110 38,444,025 - - - 29,725,915 29,725,915 Transit system 39,665,214 1,561,160 30,650,375 651,449 - (6,802,230) (6,802,230) Water 52,141,659 57,180,861 - - - 5,039,202 5,039,202 Sewer 4,836,785 7,370,769 - - - 2,533,984 2,533,984 Sanitation 14,576,901 17,827,822 188,508 - - 3,439,429 3,439,429 Total Business-Type Activities 119,938,669 122,384,637 30,838,883 651,449 - 33,936,300 33,936,300 Total Primary Government 479,144,584$ 170,752,428 $ 44,665,239 $ 37,836,976 $ (259,826,241) 33,936,300 (225,889,941) 67,398,500 - 67,398,500 82,693,078 - 82,693,078 40,883,599 - 40,883,599 13,030,832 - 13,030,832 10,903,663 - 10,903,663 8,328,784 - 8,328,784 40,919,350 11,090,153 52,009,503
231,493 - 231,493 649,828 67,000 716,828
22,368,082 (22,368,082) -
287,407,209 (11,210,929) 276,196,280
27,580,968 22,725,371 50,306,339
31,916,896 287,131,043 319,047,939
Restatement for change in accounting principle (note 19) (6,333,590) (604,075) (6,937,665) Error correction (note 19) (36,656) - (36,656) 25,546,650 286,526,968 312,073,618
53,127,618$ 309,252,339 $ 362,379,957 $ Net Position (Deficit) - ending See accompanying notes to the basic financial statements.

Total General Revenues and Transfers
Change in Net Position
Net Position - beginning (as previously reported)
Investment earnings
Motor vehicle tax (unrestricted)
Miscellaneous
Transfers
Net Position - beginning (as restated)
Sales taxes
Utility users taxes
Occupancy taxes
Business license taxes
Construction, real property, cogeneration and misc. taxes Net (Expense) Revenue
and Changes in Net PositionProgram Revenues
General Revenues:

Taxes:

Property taxes

CITY OF TORRANCE, CALIFORNIA
Statement of Activities and Changes in Net Position
Year ended June 30, 2025
30 54

GOVERNMENT FUND

FINANCIAL STATEMENTS

ANNUAL COMPREHENSIVE FINANCIAL REPORT
55 (This page intentionally left blank)

31 56
General Fund
Nonmajor
Governmental Funds
Total Governmental
Funds
Assets
Pooled cash and investments (note 2) 86,871,816$ 114,670,906 $ 201,542,722 $ Cash and cash equivalents with fiscal agents (note 2) 40,852,636 3,757,915 44,610,551 Accounts receivable 10,054,909 615,306 10,670,215 Accrued interest receivable 911,635 317,665 1,229,300 Due from other funds (note 13) 8,585,471 - 8,585,471 Due from other governments (note 16) 17,091,354 5,436,414 22,527,768 Advance to successor agency (note 13) 3,003,308 1,059,462 4,062,770 Advance to custodial fund 79,157 - 79,157 Interfund advances receivable (note 13) - 600,000 600,000 Notes receivable (note 4) - 32,900 32,900 Lease receivable (note 5) 2,042,479 742,548 2,785,027 Prepaids 918,608 17,998 936,606 Total Assets 170,411,373$ 127,251,114 $ 297,662,487 $ Liabilities
Accounts payable 5,280,205$ 4,848,510 $ 10,128,715 $ Accounts payable - contract retention 1,860 1,356,243 1,358,103 Accrued liabilities 8,079,972 1,870,179 9,950,151 Due to other funds (note 13) - 8,585,471 8,585,471 Interfund advances payable (note 13) 600,000 - 600,000 Unearned revenue (note 17) 940,587 182,037 1,122,624 Deposits and guarantees 731,501 6,290,688 7,022,189 Total Liabilities 15,634,125 23,134,205 38,768,330 Deferred Inflows of Resources:

Unavailable revenue 2,098,984 693,381 2,792,365 Deferred leases (note 5) 1,878,618 647,767 2,526,385 Total Deferred Inflows of Resources 3,977,602 1,341,148 5,318,750 Fund Balances
Nonspendable
Advances, net 904,324 - 904,324 Prepaids 918,608 17,998 936,606 Restricted for:

Public safety - 4,833,127 4,833,127 Public works - 57,190,036 57,190,036 Culture and recreation -
Cable TV education 3,372,213 - 3,372,213 Parks and recreation - 5,770,047 5,770,047 Community development - 11,997,197 11,997,197 Pension 40,852,636 - 40,852,636 Debt service - 1,145 1,145 Assigned to:

Economic anomaly reserve 68,906,208 - 68,906,208 Capital projects - 22,966,211 22,966,211 Technology replacement 12,193,794 - 12,193,794 Unassigned 23,651,863 - 23,651,863 Total Fund Balances 150,799,646 102,775,761 253,575,407 Total Liabilities, Deferred Inflows of Resources and Fund Balances 170,411,373$ 127,251,114$ 297,662,487$ See accompanying notes to the basic financial statements.

CITY OF TORRANCE, CALIFORNIA
Balance Sheet
Governmental Funds
June 30, 2025
32 57
253,575,407$
83,188,658$
19,950,273
14,060,968
171,072,066
74,353,129
17,969,590
14,492,746
395,087,430
(22,305,607)
(697,609)
(14,364,409)
(358,785,000)
(18,560,000)
(1,237,755)
5,171,937
(211,901,483)
(56,510,159)
(679,190,085)
(2,863,881)
(266,173)
(3,130,054)
2,792,365
2,792,365
70,178,626
18,156,231
(1,886,475)
(2,281,484)
84,166,898
(174,343)
53,127,618$
See accompanying notes to the basic financial statements.

Notes payable
Construction in progress

CITY OF TORRANCE, CALIFORNIA
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position
June 30, 2025
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 $225,988,741 accumulated depreciation Buildings and improvements, net of $77,166,011 accumulated depreciation SBITA asset, net of $3,202,491 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 $47,313,909 accumulated depreciation 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
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
33 58
General Fund
Nonmajor
Governmental Funds
Total Governmental
Funds
Revenues:

Taxes 221,947,580$ 1,290,875 $ 223,238,455 $ Licenses, fees and permits 18,461,818 2,276,644 20,738,462 Fines, forfeitures and penalties 1,702,725 801,917 2,504,642 Use of money and property 14,610,811 26,374,659 40,985,470 Intergovernmental 435,406 50,807,570 51,242,976 Charges for current services 25,124,687 - 25,124,687 Other revenues 206,449 435,573 642,022 Total revenues 282,489,476 81,987,238 364,476,714 Expenditures:

Current expenditures:

General government 36,896,742 6,470,874 43,367,616 Nondepartmental 13,564,693 - 13,564,693 Public safety 169,253,612 4,695,764 173,949,376 Public works 20,213,612 32,316,255 52,529,867 Culture and recreation 25,257,310 1,198,434 26,455,744 Community development 10,074,622 9,888,686 19,963,308 Debt service:

Principal retirement (note 8) - 10,625,000 10,625,000 Interest and fiscal charges - 12,482,338 12,482,338 Capital lease 222,727 - 222,727 Total expenditures 275,483,318 77,677,351 353,160,669 Excess of revenues over (under) expenditures 7,006,158 4,309,887 11,316,045 Other financing sources (uses):

Transfers in (note 14) 29,169,493
13,777,931 42,947,424
Transfers out (note 14) (13,375,660) (7,185,224) (20,560,884) SBITA 7,864,699 80,716 7,945,415 Total other financing sources (uses) 23,658,532 6,673,423 30,331,955 Net change in fund balances 30,664,690 10,983,310 41,648,000 Fund balances, July 1, 2024 (as previously reported) 120,134,956 91,829,107 211,964,063 Error correction (note 19) - (36,656) (36,656) Fund balance, July 1, 2024 (as restated) 120,134,956 91,792,451 211,927,407 Fund balances, June 30, 2025 150,799,646$ 102,775,761$ 253,575,407$ 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, 2025
34 59
41,648,000$
(14,714,937)
20,264,699
5,549,762
222,727
10,625,000
1,779,991
57,570
(293,980)
12,391,308
39,528
39,528
(363,674)
(65,887)
(1,756,403)
(2,185,964)
(28,863,987)
(5,078,730)
4,081,051
27,580,968$
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, 2025
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
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.
35 60
Variance with
Actual Amounts Final Budget
Budgetary Basis positive
Original Final (see Note A) (negative)
Budgetary fund balance, July 1, 2024 120,134,956$ 120,134,956 $ 120,134,956 $ - $ Resources (inflows):

Taxes:

Property Taxes:

Current secured taxes 44,490,637 44,490,637 45,078,136 587,499 Current unsecured taxes 1,319,518 1,319,518 1,500,346 180,828 Prior years secured taxes - - - - Prior years unsecured taxes 83,634 83,634 78,943 (4,691) VLF swap and repayment taxes 18,545,720 18,545,720 18,847,542 301,822 Penalties and interest 210,801 210,801 183,038 (27,763) Supplemental current secured 1,318,662 1,318,662 819,766 (498,896) Redemption 688,145 688,145 712,575 24,430 Aircraft assessment tax 177,312 177,312 178,154 842 66,834,429 66,834,429 67,398,500 564,071 Taxes other than property:

Sales and use tax 85,733,277 85,733,277 82,693,078 (3,040,199) Prop 172 sales tax 2,137,796 2,137,796 2,077,008 (60,788) Business license tax 11,095,855 11,095,855 10,903,663 (192,192) Business permit tax 218,439 218,439 231,785 13,346 Utility users tax 45,109,265 45,109,265 40,883,599 (4,225,666) Construction tax 1,572,665 1,572,665 3,277,189 1,704,524 Real property transfer tax 1,016,060 1,016,060 972,267 (43,793) Occupancy tax 13,815,048 13,815,048 13,030,832 (784,216) Oil severance tax 7,000 7,000 6,257 (743) Cogeneration tax 893,601 893,601 473,402 (420,199) 161,599,006 161,599,006 154,549,080 (7,049,926) Total taxes 228,433,435 228,433,435 221,947,580 (6,485,855) Licenses, fees and permits:

Franchise fee-all other 11,507,535 11,507,535 11,329,068 (178,467) Public education government fees 350,000 350,000 243,257 (106,743) Alarm permit fees 190,000 190,000 260,704 70,704 Fire permits 210,000 210,000 239,687 29,687 Animal permits 215,000 215,000 269,683 54,683 Construction/excavation permits 286,875 286,875 193,176 (93,699) Grading permits 97,000 97,000 108,661 11,661 Building permits 2,340,000 2,340,000 3,446,614 1,106,614 Plumbing permits 60,000 60,000 - (60,000) Electrical permits 411,220 411,220 606,507 195,287 Mechanical permits 191,997 191,997 220,811 28,814 Special energy inspection fees 1,000,000 1,000,000 847,065 (152,935) Sign permits and filing fees 22,872 22,872 37,771 14,899 Other licenses and permits 2,526 2,526 18,526 16,000 NPDES building permit fees 380,000 380,000 608,550 228,550 Building TEQECC filing fees 16,643 16,643 28,988 12,345 Oversized vehicle permit fees 5,000 5,000 2,750 (2,250) Total licenses, fees, and permits 17,286,668 17,286,668 18,461,818 1,175,150 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, 2025
36 61
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, 2025
Fines, forfeitures and penalties:

Parking citations 538,882$ 538,882 $ 1,692,100 $ 1,153,218 $ Administrative citations 25,000 25,000 10,625 (14,375) Traffic fines 66,454 66,454 - (66,454) General fines 12,438 12,438 - (12,438) Total fines, forfeitures and penalties 642,774 642,774 1,702,725 1,059,951 Use of money and property:

Investment earnings 3,953,260 3,953,260 11,507,116 7,553,856 Rents and concessions 3,266,615 3,266,615 3,092,116 (174,499) Royalties 4,721 4,721 11,579 6,858 Total use of money and property 7,224,596 7,224,596 14,610,811 7,386,215 Intergovernmental:

State motor vehicle licenses 140,461 140,461 231,492 91,031 State homeowners property tax relief 162,201 162,201 166,497 4,296 Other state grants 187,465 187,465 37,417 (150,048) Total Intergovernmental 490,127 490,127 435,406 (54,721) Charges for current services:

TUSD collection fees 13,978 13,978 94,185 80,207 Planning and zoning fees 716,000 716,000 1,041,418 325,418 Traffic signal maintenance 267,151 267,151 453,995 186,844 Vacation processing fees 4,605 4,605 - (4,605) State encroachment collection fees 13,451 13,451 10,448 (3,003) Grading 109,844 109,844 100,078 (9,766) Plan check fees-building 2,466,100 2,466,100 2,333,371 (132,729) Plan check fees-engineering 423,589 423,589 28,471 (395,118) Green building code fees 1,000,000 1,000,000 860,368 (139,632) Appeal fees 13,860 13,860 5,250 (8,610) Other inspection fees 640,686 640,686 408,499 (232,187) Engineering mapping fees 47,561 47,561 33,098 (14,463) Engineering inspection fees 616,541 616,541 579,452 (37,089) General government service charges 607,302 607,302 689,111 81,809 Advertising on shelters 159,384 159,384 30,466 (128,918) Microfilming fees 370,644 370,644 429,106 58,462 Police charges-copies and photos 55,741 55,741 47,972 (7,769) Police charges-fingerprinting and other 395,189 430,189 341,373 (88,816) Fire department fees 9,739,300 9,778,300 9,955,567 177,267 Fire department fees-hazardous materials fees 999,100 999,100 1,000,619 1,519 Cultural arts center fees 1,118,039 1,118,039 958,221 (159,818) Parks and recreational fees 5,184,421 5,184,421 5,668,191 483,770 Miscellaneous 33,999 33,999 47,220 13,221 Library revenues 7,550 7,550 8,208 658 Total charges for current services 25,004,035 25,078,035 25,124,687 46,652 See accompanying notes to the basic financial statements (continued) 37 62
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, 2025
Other revenues:

Donations-private sources 797$ 20,797 $ 55,301 $ 34,504 $ Miscellaneous 298,807 298,807 151,148 (147,659) Total other revenues 299,604 319,604 206,449 (113,155) SBITA - - 7,864,699 7,864,699 Transfers in 14,178,277 15,524,105 29,169,493 13,645,388 Amounts available for appropriation 413,694,472 415,134,300 439,658,624 24,524,324 Charges to appropriation (outflows)
General government:

City Council 525,470 619,894 542,207 77,687 Commissions and committees:

Parks and recreation 3,470 1,157 510 647 Planning 21,962 10,171 1,559 8,612 Environmental quality 1,379 329 304 25 Cultural arts 2,246 1,111 402 709 Traffic 2,132 767 310 457 Youth council 11,935 11,935 9,201 2,734 Historic preservation 1,728 678 380 298 Commission on aging 2,974 900 609 291 Library 3,536 1,940 1,348 592 Social services 27,676 28,852 20,141 8,711 City manager 8,258,281 8,813,217 7,965,642 847,575 City attorney 3,347,091 3,379,522 3,293,292 86,230 City clerk 1,598,328 1,643,855 1,524,714 119,141 City treasurer 483,686 483,686 411,164 72,522 Finance 6,336,896 6,589,658 6,579,884 9,774 Human resources 2,994,183 3,396,942 3,396,052 890 Civil service 1,147,201 1,110,213 1,089,956 20,257 Communications & Info Tech 11,189,472
11,813,320 10,367,838 1,445,482 General services 11,926,519 12,343,441 12,300,448 42,993 Less indirect cost allocation, other funds (9,147,553) (9,147,553) (9,031,620) (115,933) Total general government 38,738,612 41,104,035 38,474,341 2,629,694 Nondepartmental
Community promotion 604,890 842,247 712,040 130,207 Other 2,542,659 1,307,804 9,117,518 (7,809,714) Leaseback payments 3,785,532 3,785,532 3,758,392 27,140 Total nondepartmental 6,933,081 5,935,583 13,587,950 (7,652,367) See accompanying notes to the basic financial statements (continued) 38 63
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, 2025
Community Development 10,600,313$ 10,591,929$ 10,192,238$ 399,691$ Public safety:

Police 101,885,966 101,422,658 101,315,491 107,167 Fire 69,052,342 69,163,138 68,926,637 236,501 Total public safety 170,938,308 170,585,796 170,242,128 343,668 Public works 21,122,469 21,148,602 20,613,821 534,781 Culture and recreation 26,598,270 25,864,530 25,446,244 418,286 Capital lease 242,703 242,703 222,727 19,976 Transfers out 6,677,379 13,375,660 13,375,660 - Total Charges to appropriations 281,851,135 288,848,838 292,155,109 (3,306,271) Budgetary Fund Balance, July 1, 2025 131,843,337$ 126,285,462 $ 147,503,515 $ 21,218,053 $ See accompanying notes to the basic financial statements 39 64

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" $ 439,658,624 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 (120,134,956)
SBITA are inflows of budgetary resources,
but are not revenues for financial reporting purposes (7,864,699) Transfers from other funds are inflows of budgetary
resources, but are not revenues for financial reporting purposes (29,169,493)
Total Revenues as reported on the statement of
revenues, expenditures, and changes in fund balances -
governmental funds $ 282,489,476
Uses/outflows of resources
Actual amounts (budgetary basis) "total charges
to appropriations" from the budgetary comparison
statement $ 292,155,109
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 (3,296,131) Transfers to other funds are outflows of budgetary
resources but are not expenditures for financial
reporting purposes (13,375,660)
Total expenditures as reported on the statement of
revenues, expenditures, and changes in fund balances -
governmental funds $ 275,483,318
Budget-to-GAAP Reconciliation
40 65

PROPRIETARY FUND

FINANCIAL STATEMENTS

ANNUAL COMPREHENSIVE FINANCIAL REPORT
66 (This page intentionally left blank)

41 67
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) 38,780,668$ 50,955,074 $ 16,816,381 $ 6,673,277 $ 11,594,534 $ 124,819,934 $ 59,024,271 $ Cash and cash equivalents with fiscal agents (note 2) - - - - - - 677,419 Accounts receivable 416,787 6,804,548 1,777,714 16,892,269 4,556,813 30,448,131 5,976,256 Accrued interest receivable 196,328 259,119 85,535 1,113,209 89,988 1,744,179 44,185 Lease receivable - current (note 5) - - - 5,109,172 - 5,109,172 - Inventory 1,572,922 4,436,381 - - - 6,009,303 1,462,223 Due from other governments (note 16) 8,417,185 - 392 - 99,405 8,516,982 - Prepaids 23,205 205,290 109,456 - 37,622 375,573 212,668 Total current assets 49,407,095 62,660,412 18,789,478 29,787,927 16,378,362 177,023,274 67,397,022 Noncurrent assets:

Advance to successor agency (note 13) - 1,234,538 - - - 1,234,538 - Lease receivable - long term (note 5) - - - 164,727,684 - 164,727,684 - Capital assets, net (note 3) 13,943,894 112,757,307 37,152,879 8,935,627 4,384,422 177,174,129 24,778,471 Total noncurrent assets 13,943,894 113,991,845 37,152,879 173,663,311 4,384,422 343,136,351 24,778,471 Deferred outflows of resources:

Deferred pension amounts 2,224,291 1,415,572 568,253 301,147 1,061,793 5,571,056 962,607 Deferred OPEB amounts 1,129,630 410,776 164,310 82,155 308,081 2,094,952 287,543 Total deferred outflows of resources 3,353,921 1,826,348 732,563 383,302 1,369,874 7,666,008 1,250,150 Total Assets and Deferred Outflows of Resources 66,704,910 178,478,605 56,674,920 203,834,540 22,132,658 527,825,633 93,425,643 Liabilities and Deferred Inflows of Resources
Current liabilities:

Accounts payable 687,702 6,193,608 22,352 174,564 555,764 7,633,990 1,607,157 Contract retainage payable - 3,340 - 25,271 - 28,611 - Deposits payable - 44,570 - 311,788 - 356,358 -
Accrued interest payable 9,755 6,574 - - 30,610 46,939 4,738 Accrued liabilities 1,203,896 1,616,447 46,032 2,162,430 1,158,714 6,187,519 11,086,364 Compensated absences payable-current 481,418 146,812 53,315 78,491 73,354 833,390 8,841,173 Current installment sale loan payable -
principal (notes 7 and 8) - 1,236,790 - - - 1,236,790 - Easement payable - current - 58,116 - - - 58,116 - SBITA liability - current (note 6) 228,293 - - - - 228,293 83,355 Accrued liabilities for self-insurance claims -
current (note 15) - - - - - - 13,839,290
Unearned revenues (note 17) 7,018,707 - - 231,724 - 7,250,431 - Total current liabilities 9,629,771 9,306,257 121,699 2,984,268 1,818,442 23,860,437 35,462,077 Noncurrent liabilities:

Compensated absences payable - long term 1,370,191 417,851 151,744 223,398 208,778 2,371,962 - Long-term obligations (notes 7 and 8) - 14,929,199 - - - 14,929,199 - SBITA liability - long term (note 6) 428,588 - - - - 428,588 273,890 Accrued liability for self-insurance claims
long-term (note 15) - - - - - - 54,094,993
Total pension liability 6,739,639 4,671,945 1,785,154 850,650 3,085,909 17,133,297 2,819,072 Total OPEB liability 3,515,904 1,278,510 511,404 255,702 958,883 6,520,403 894,958 Total noncurrent liabilities 12,054,322 21,297,505 2,448,302 1,329,750 4,253,570 41,383,449 58,082,913 Deferred inflows of resources:

Deferred leases (note 5) - - - 152,934,798 - 152,934,798 - Deferred pension amounts 49,709 42,018 14,417 5,052 20,167 131,363 18,864 Deferred OPEB amounts 141,947 51,617 20,647 10,323 38,713 263,247 36,132 Total deferred inflows of resources 191,656 93,635 35,064 152,950,173 58,880 153,329,408 54,996 Total Liabilities and Deferred Inflows of Resources 21,875,749 30,697,397 2,605,065 157,264,191 6,130,892 218,573,294 93,599,986 Net Position
Net investment in capital assets 13,287,013 96,529,862 37,152,879 8,910,356 4,384,422 160,264,532 24,778,471 Restricted
Transportation program 31,542,148 - - - - 31,542,148 - Unrestricted - 51,251,346 16,916,976 37,659,993 11,617,344 117,445,659 (24,952,814) Total Net Position 44,829,161$ 147,781,208 $ 54,069,855 $ 46,570,349 $ 16,001,766 $ 309,252,339 $ (174,343) $ 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, 2025
42 68
Transit
System
Fund
Water
Fund
Sewer
Fund
Municipal
Airport
Fund
Nonmajor
Enterprise
Fund Total
Internal Service
Funds
Operating revenues:

Charges for services 1,559,985$ 54,718,788 $ 7,359,954 $ 17,386,570 $ 17,113,176 $ 98,138,473 $ 35,995,866 $ Other 1,175 2,462,073 10,815 21,057,455 714,646 24,246,164 586,791 Total operating revenues 1,561,160 57,180,861 7,370,769 38,444,025 17,827,822 122,384,637 36,582,657 Operating expenses:

Salaries and employee benefits 22,495,848 6,532,976 2,069,743 1,557,561 4,604,385 37,260,513 5,146,479 Services and supplies 3,129,668 1,277,198 298,003 86,491 3,228,409 8,019,769 662,571 Other professional services 3,844,960 1,186,861 323,386 5,922,799 3,899,264 15,177,270 610,302 Depreciation and amortization 2,535,847 2,773,504 1,327,109 269,103 792,152 7,697,715 2,502,058 Insurance and claims 38,662 - - - 3,640 42,302 22,596,159 City charges 7,219,556 3,664,057 733,385 610,104 1,970,147 14,197,249 2,425,972 Cost of water - 36,462,990 - - - 36,462,990 - Other 400,673 244,073 85,159 272,052 78,904 1,080,861 26,403 Total operating expenses 39,665,214 52,141,659 4,836,785 8,718,110 14,576,901 119,938,669 33,969,944 Operating income (loss) (38,104,054) 5,039,202 2,533,984 29,725,915 3,250,921 2,445,968 2,612,713 Nonoperating revenues (expenses)
Investment earnings 1,978,489 2,565,755 787,993 5,454,071 405,642 11,191,950 1,254,193 Gain on sale of capital assets - 11,250 50,500 - 5,250 67,000 232,604 Assistance from other governments 30,650,375 - - - - 30,650,375 - Interest expense (10,097) (91,700) - - - (101,797) - Grants - - - - 188,508 188,508 - Total nonoperating revenues (expenses) net 32,618,767 2,485,305 838,493 5,454,071 599,400 41,996,036 1,486,797 Income (loss) before contributions and transfers (5,485,287) 7,524,507 3,372,477 35,179,986 3,850,321 44,442,004 4,099,510 Capital grants 651,449 - - - - 651,449 - Transfers in (note 13) 3,000,000 758,284 34,347 - 382,321 4,174,952 - Transfers out (note 13) (15,430) (2,686) - (25,243,319) (1,281,599) (26,543,034) (18,459) Change in net position (1,849,268) 8,280,105 3,406,824 9,936,667 2,951,043 22,725,371 4,081,051 Total net position - July 1, 2024 (as previously reported) 46,988,158 139,639,169 50,693,941 36,693,676 13,116,099 287,131,043 (5,608,130) Restatement for change in accounting principle (note 19) (309,729) (138,066) (30,910) (59,994) (65,376) (604,075) 1,352,736 Total net position - July 1, 2024 (as restated) 46,678,429 139,501,103 50,663,031 36,633,682 13,050,723 286,526,968 (4,255,394) Total net position - June 30, 2025 44,829,161$ 147,781,208 $ 54,069,855 $ 46,570,349 $ 16,001,766 $ 309,252,339 $ (174,343) $ 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, 2025
43 69
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 1,559,985$ 55,603,240 $ 7,223,744 $ (1,485,814) $ 16,716,411 $ 79,617,566 $ 34,395,539 $ Cash payments to suppliers for goods and services (13,594,485) (42,236,894) (1,545,093) (5,312,467) (7,998,195) (70,687,134) (19,627,693) Cash payments to employees for service (20,932,360) (5,894,844) (1,768,675) (1,398,888) (4,182,833) (34,177,600) (4,290,054) Other receipts 1,175 2,462,073 10,815 21,057,455 714,646 24,246,164 586,791 Net cash provided by (used in) operating activitie (32,965,685) 9,933,575 3,920,791 12,860,286 5,250,029 (1,001,004) 11,064,583 Cash flows from noncapital financing activities
Cash received from noncapital grants and subsides 21,328,019 - - - 188,508 21,516,527 - Cash received from other funds 3,000,000 758,284 34,347 - 382,321 4,174,952 - Cash transfers paid to other funds (15,430) (2,686) - (25,243,319) (1,281,599) (26,543,034) (18,459) Net cash provided by (used in) noncapital financing activitie 24,312,589 755,598 34,347 (25,243,319) (710,770) (851,555) (18,459) Cash flows from capital financing activities
Cash received from capital grants and subsidies 651,449 - - - - 651,449 - Cash payments for capital additions (1,155,345) (8,451,603) (1,830,210) (804,999) (1,524,685) (13,766,842) (18,224,606) Proceeds from sale of capital assets - 11,250 50,500 - 5,250 67,000 232,604 Proceeds from debt issuance, net - 13,564,833 - - - 13,564,833 - Payments for long-term obligations - principal & interes - (652,645) - - - (652,645) - Net cash provided by (used in) capital financing activitie (503,896) 4,471,835 (1,779,710) (804,999) (1,519,435) (136,205) (17,992,002) Cash flows from investing activities
Cash received from interest on investment 2,103,977 2,522,679 799,334 5,393,223 402,806 11,222,019 1,508,513 Cash paid for interest on investments (12,282) (94,038) - - - (106,320) - Cash provided by (used in) investing activitie 2,091,695 2,428,641 799,334 5,393,223 402,806 11,115,699 1,508,513 Net increase (decrease) in cash, restricted cash and
cash equivalents (7,065,297) 17,589,649 2,974,762 (7,794,809) 3,422,630 9,126,935 (5,437,365) Cash and cash equivalents, July 1, 2024 45,845,965 33,365,425 13,841,619 14,468,086 8,171,904 115,692,999 65,139,055 Cash and cash equivalents, June 30, 2025 38,780,668$ 50,955,074 $ 16,816,381 $ 6,673,277 $ 11,594,534 $ 124,819,934 $ 59,701,690 $ Reconciliation of cash and cash equivalents
Pooled cash and investments 38,780,668 50,955,074 16,816,381 6,673,277 11,594,534 124,819,934 59,024,271 Cash and cash equivalents with fiscal agents - - - - - - 677,419 Total cash and cash equivalents 38,780,668$ 50,955,074 $ 16,816,381 $ 6,673,277 $ 11,594,534 $ 124,819,934 $ 59,701,690 $ Reconciliation of operating income (loss) to net cash provided by (used in) operating activities:

Operating income (loss) (38,104,054)$ 5,039,202 $ 2,533,984 $ 29,725,915 $ 3,250,921 $ 2,445,968 $ 2,612,713 $ Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization 2,535,847 2,773,504 1,327,109 269,103 792,152 7,697,715 2,502,058 Bad debt expense - 12,857 11,054 17,460 32,283 73,654 - Changes in assets and liabilities
Accounts receivable 285,301 871,595 (147,183) (16,061,320) (331,500) (15,383,107) (1,600,327) Due from other governmen - - (81) - (97,547) (97,628) - Prepaids and other assets 124,045 (205,290) (109,456) - 3,944 (186,757) 132,294 Inventory 52,562 (80,315) - - - (27,753) (3,434) Accounts payable (103,918) 2,204,946 3,963 (550,731) 122,780 1,677,040 1,058,830 Accrued salaries and benefits 435,056 18,417 50,266 24,818 (53,444) 475,113 424,020 Other accrued liabilities 661,110 (1,321,056) 333 2,129,710 1,055,443 2,525,540 5,506,023 Lease receivable - - - (1,940,626) - (1,940,626) - SBITA liability 24,554 - - - 24,554 - Deferred outflows related to pensions 1,918,870 1,222,427 490,428 259,598 915,574 4,806,897 830,114 Deferred outflows related to OPEB 205,778 74,828 29,931 14,966 56,121 381,624 52,379 Total pension liability (956,503) (632,858) (248,355) (125,603) (448,320) (2,411,639) (407,792) Total OPEB liability 123,466 44,896 17,959 8,979 33,673 228,973 31,428 Deferred inflows related to pension (154,539) (84,756) (37,232) (23,260) (78,435) (378,222) (70,348) Deferred inflows related to OPEB (13,260) (4,822) (1,929) (825) (3,616) (24,452) (3,375) Deferred inflows related to leases - - - (945,357) - (945,357) - Deposits and guarantees - - - 111,134 - 111,134 - Unearned revenues - - - (53,675) - (53,675) - Net cash provided by (used in) operating activitie (32,965,685)$ 9,933,575$ 3,920,791$ 12,860,286$ 5,250,029$ (1,001,004)$ 11,064,583$

CITY OF TORRANCE, CALIFORNIA
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2025
See accompanying notes to the basic financial statements.

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

During fiscal year 2024-25, there were no significant noncash investing, capital, or financing activities. 44 70

FIDUCIARY FUND

FINANCIAL STATEMENTS

ANNUAL COMPREHENSIVE FINANCIAL REPORT
71 Private-
Purpose Total
Trust Custodial
Assets Fund Funds
Pooled cash and investments (note 2) $ 2,437,508 $ 3,073,417 Cash and cash equivalents with fiscal agents (note 2) 381 - Accounts receivable - 602,158
Accrued interest receivable - 8,345 Prepaids - 101,826
Capital assets, net - 199,727
Total assets 2,437,889 3,985,473
Liabilities
Accounts payable - 17,478
Interest payable 114,000 -
Advances from City (notes 13 and 22) 5,297,308 79,157 Long-term debt:

Due within one year (note 22) 2,614,275 -
Due in more than one year (note 22) 32,713,717 - Total Liabilities 40,739,300 96,635
Fiduciary Net Position (Deficit)
Restricted for individuals and organizations (38,301,411) 3,888,838 Total Net Position (Deficit) $ (38,301,411) $ 3,888,838 See accompanying notes to basic financial statements.

CITY OF TORRANCE, CALIFORNIA
Statement of Net Position - Fiduciary Funds
June 30, 2025
45 72
Private-
Purpose Total
Trust Custodial
Additions Fund Funds
Property taxes $ 3,980,835 $ -
Contributions - 1,905,082
Fees - 61,736
Use of money and property 4,839 60,675 Other - 14,165
Total additions 3,985,674 2,041,658
Deductions
Residual commitments of former redevelopment agency 25,000 - Salaries and employee benefits - 221,762 Services and supplies - 5,726
Other professional services 4,007 762,304 Insurance and claims - 44,064
Depreciation and amortization - 100,118 Membership fees - 79,010
Debt service
Interest and fiscal charges of former redevelopment agency 1,116,995 - Other 4,000 -
Total deductions 1,150,002 1,212,984
Change in fiduciary net position 2,835,672 828,674 Fiduciary net position (deficit) - beginning (41,137,083) 3,060,164 Fiduciary net position (deficit) - ending $ (38,301,411) $ 3,888,838 See accompanying notes to basic financial statements.

CITY OF TORRANCE, CALIFORNIA
Statement of Changes in Net Position - Fiduciary Funds
Year Ended June 30, 2025
46 73

NOTES TO BASIC

FINANCIAL STATEMENTS

ANNUAL COMPREHENSIVE FINANCIAL REPORT
74 CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

(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, 47 75

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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.
48 76

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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.
49 77

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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 (fiduciary) funds to account for 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 22).

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. 50 78

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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:

51 79

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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, 2023
Measurement date (MD) June 30, 2024
Measurement period (MP) July 1, 2023 to June 30, 2024

52 80

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

PARS pension:

Valuation date (VD) June 30, 2023
Measurement date (MD) June 30, 2024
Measurement period (MP) July 1, 2023 to June 30, 2024
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, 2024
Measurement period (MP) July 1, 2023 to June 30, 2024
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 53 81

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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.

 Deferred outflows related to pension/OPEB from difference between projected and actual earnings on investments.

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.

54 82

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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.

55 83

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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 56 84

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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 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 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. It requires that liabilities for compensated absences be recognized for (1) leave that has not been used and (2) leave that has been used but not yet paid in cash or settled through noncash means. It establishes guidance for measuring the lia bility by using an employee’s pay rate as of the date of the financial statements. The implementa tion of this new accounting standard resulted in restatement of beginning net position in both th e governmental activities and the business-type activities.

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. It
defines concentration as a lack of diversity related to an aspect of a significant inflow of resources or outflow of resources. A constraint is a limita tion imposed on a government by an external party or by formal action of the government’s highest level of decision-making authority. 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 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 57 85

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025
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.
(2) Cash and Investments
Cash and investments as of June 30, 2025 are cl

assified in the accompanying financial statements
as follows:

Statement of net position:

Cash and investments 385,386,927 $
Cash and investments held by bond trustee 45,287,970
Fiduciary funds:

Cash and investments 5,510,925
Cash and investments held by bond trustee 381
Total cash and investments 436,186,203 $
Cash and inv
estments as of June 30, 2025 consist of the following:

Cash on hand 5,609$
Cash with fiscal agent 679,626
Deposits with financial institutions 54,672,822
Investments 380,828,146
Total cash and investments 436,186,203$
58 86

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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.

59 87

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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.

60 88

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

The City has the following recurring fair value measurements as of June 30, 2025:

Investment Type
Exempt from
Disclosure
Level 1 Inputs
(not applicable)
Level 2 Inputs
(observable inputs)
Level 3 Inputs
(not applicable)
U.S. treasury notes 77,282,565$ -$ -$ 77,282,565$ -$ Local municipal bonds 356,842 - - 356,842 - Federal agency securities 108,785,185 - - 108,785,185 - Corporate medium term notes 84,092,036 - - 84,092,036 - Negotiable certificate of deposit 3,888,091 - - 3,888,091 - CAMP 95,777,058 - - 95,777,058 - Corporate bonds 5,122,750 - - 5,122,750 - Subtotal 375,304,527 - - 375,304,527 - Money market mutual funds 1,764,010 1,764,010 - - - State investment pool 1,353 1,353 - - - 377,069,890 1,765,363 - 375,304,527 - Held by bond trustee:

Money market mutual funds 3,758,256 3,758,256 - - - 3,758,256 3,758,256 - - - Total 380,828,146$ 5,523,619$ -$ 375,304,527$ -$ Fair Value Measurement

The City’s investments measured using Level 2 inputs utilized matrix pricing model. Matrix pricing is used to value securities based on securities’ relationships to benchmark quoted prices.

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.

61 89

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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:

Investment Type
12 Months
Or Less
13 to 24
Months
25 to 60
Months
More than
60 Months
U.S. treasury notes 77,282,565 $ 13,248,215 $ 14,823,600 $ 49,210,750 $ - $ Local municipal bonds 356,842 - - 356,842 - Federal agency securities 108,785,185 44,368,665 34,966,320 29,450,200 - Corporate medium term notes 84,092,036 3,565,512 8,448,000 72,078,524 - Negotiable certificate of deposit 3,888,091 2,405,678 1,231,506 250,907 - CAMP 95,777,058 95,777,058 - - - Corporate bonds 5,122,750 - - 5,122,750 - Money market mutual funds 1,764,010 1,764,010 - - - State investment pool 1,353 1,353 - - - 377,069,890 161,130,491 59,469,426 156,469,973 - Held by bond trustee:

Money market mutual funds 3,758,256 3,758,256 - - - 3,758,256 3,758,256 - - - Total 380,828,146$ 164,888,747$ 59,469,426$ 156,469,973$ -$ 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.

62 90

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

Minimum
Legal Exempt from
Investment Type Rating Disclosure AAA AA A Not Rated
U.S. treasury notes 77,282,565 $ N/A - $ - $ -$ -$ 77,282,565$ Local municipal bonds 356,842 N/A - - - - 356,842 Federal agency securities 108,785,185 N/A - - 108,785,185 - - Corporate medium term notes 84,092,036 A - - 26,595,398 49,048,638 8,448,000 Negotiable certificate of deposit 3,888,091 N/A - - - - 3,888,091 CAMP 95,777,058 N/A - - - - 95,777,058 Corporate bonds 5,122,750 N/A - - 5,122,750 - - Money market mutual funds 1,764,010 N/A - - - 1,764,010 - State investment pool 1,353 N/A - - - - 1,353 377,069,890 - - 140,503,333 50,812,648 185,753,909 Held by bond trustee
Money market mutual funds 3,758,256 A - 3,758,256 - - - 3,758,256 - 3,758,256 - - - TOTAL 380,828,146$ -$ 3,758,256$ 140,503,333$ 50,812,648$ 185,753,909$ 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 52,323,930$ Federal Home Loan Bank Federal agency securities 26,485,505 Federal Home Loan Mortgage Corp Federal agency securities 29,975,750

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:

63 91

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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, 2025, $

13,425,806 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, 2025 (in thousands):

Description Cost
Accumulated
Depreciation Net Cost
Road system 359,276$ (213,487)$ 145,789$ Storm drain system 34,447 (12,158) 22,289 Sewer lines 78,077 (44,524) 33,553 Water system 153,189 (55,485) 97,704 624,989$ (325,654)$ 299,335$

64 92

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

Capital Asset activity for the year ended June 30, 2025 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 16,424 15,712 (12,812) - 19,324 Total capital assets not being
depreciated 119,563 15,712 (12,812) - 122,463 Capital assets being depreciated:

Land improvements and buildings 148,740 2,784 (5) - 151,519 Machinery and equipment 83,928 18,109 (2,056) - 99,981 Infrastructure 382,588 14,503 (30) - 397,061 SBITA 10,671 8,108 (489) - 18,290 Total capital assets being depreciated 625,927 43,504 (2,580) - 666,851 Less accumulated depreciation and
amortization for:

Land improvements and buildings (73,793) (3,373) - - (77,166) Machinery and equipment (59,171) (5,760) 2,056 - (62,875) Infrastructure (217,963) (8,026) - - (225,989) SBITA (1,698) (1,916) 196 - (3,418) Total accumulated depreciation
and amortization (352,625) (19,075) 2,252 - (369,448) Total capital assets being
depreciated, net 273,302 24,429 (328) - 297,403 Governmental activities capital
assets, net 392,865 $ 40,141 $ (13,140) $ - $ 419,866$

65 93

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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

Capital assets not being depreciated:

Land 8,833 $ $ - $ - $ - 8,833$ Construction in progress 4,475 10,113 (4,810) - 9,778 Capitalized construction interest 491 - (491) - - Total capital assets not being
depreciated 13,799 10,113 (5,301) - 18,611 Capital assets being depreciated:

Infrastructure 226,218 1,711 - - 227,929 Easement 1,743 - - - 1,743 Land improvements and buildings 23,061 132 - - 23,193 Machinery and equipment 79,844 6,776 (1,094) - 85,526 Furniture and fixtures 2,011 - - - 2,011 SBITA 968 244 - - 1,212 Total capital assets being depreciated 333,845 8,863 (1,094) - 341,614 Less accumulated depreciation and
amortization for:

Infrastructure (96,136) (3,530) - - (99,666) Easement (687) (58) - - (745) Land improvements and buildings (14,285) (307) - - (14,592) Machinery and equipment (62,987) (3,597) 1,094 - (65,490) Furniture and fixtures (2,011) - - - (2,011) SBITA (341) (206) - - (547) Total accumulated depreciation
and amortization (176,447) (7,698) 1,094 - (183,051) Total capital assets being
depreciated, net 157,398 1,165 - - 158,563 Business-type activities capital
assets, net 171,197$ 11,278$ (5,301)$ -$ 177,174$

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, construction in progress and SBITA category: asset additions amounted to $20,322,476 and asset deductions amounted to $4,219,984.

66 94

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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

Governmental Activities:

General government 5,853 $
Public safety 2,923
Public works 9,311
Community development 128
Culture and recreation 860
Total depreciation and amortization expense -
governmental activities 19,075$
Business-type activities:

Water 2,774 $
Sewer 1,327
Sanitation 792
Municipal Airport 269
Transit System 2,536
Total depreciation and amortization expense -
business-type activities 7,698$
Included in the depreciation charge to general government is the amount of depreciation and amortization for the Fleet Services Fund, an internal service fund. This amount includes depreciation and amortization e xpense of $2,502,058, and retirements of $2,050,339. The result is a net addition to accumulated depreciation in the amount of $451,719. (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, 2025 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 $9,040,103 of lease revenue during the fiscal year ended June 30, 2025, and reported $172, 621,883 and $155,461,183 of lease receivables and deferred inflows of resources, respectively, as of June 30, 2025.

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 67 95

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

30, 2025, the City received variable payments to taling $2,541,361, 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:
2026 5,578 $ 4,199 $ 9,777 $ 2027 5,831 4,103 9,934 2028 6,056 4,006 10,062 2029 6,103 3,892 9,995 2030 5,009 3,797 8,806 2031 to 2035 22,482 16,968 39,450 2036 to 2040 16,490 14,689 31,179 2041 to 2045 18,962 12,080 31,042 2046 to 2050 21,033 9,645 30,678 2051 to 2055 16,628 7,059 23,687 2056 to 2060 11,503 5,423 16,926 2061 to 2065 13,822 3,854 17,676 2066 to 2070 17,032 1,876 18,908 2071 to 2072 6,093 157 6,250 172,622$ 91,748 $ 264,370 $

(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.

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 68 96

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

such as termination penalties, not previously included in the measurement of the SBITA liability, or losses due to impairment.

As of June 30, 2025, 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:
2026 1,728 $ 285 $ 2,013 $ 2027 1,953 252 2,205 2028 1,692 215 1,907 2029 1,746 181 1,927 2030 1,172 147 1,319 2031 to 2035 5,485 382 5,867 2036 945 28 973 14,721$ 1,490 $ 16,211 $
Principal Interes t Total
Year ending June 30:
2026 228 $ 13 $ 241 $ 2027 244 8 252 2028 90 3 93 2029 95 2 97 657$ 26 $ 683 $ 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 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 69 97

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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, 2025.

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 $18,560,000 remains outstanding as of June 30, 2025.

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

Annual Debt Service Requirement
Principal Interest Total
Year ending June 30:
2026 530 $ 727 $ 1,257 $ 2027 550 705 1,255 2028 580 680 1,260 2029 610 650 1,260 2030 640 618 1,258 2031 to 2035 3,645 2,640 6,285 2036 to 2040 4,320 1,965 6,285 2041 to 2045 5,265 1,027 6,292 2046 to 2047 2,420 99 2,519 18,560$ 9,111 $ 27,671 $

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, 2025. 70 98

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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 $323,420,000 remains outstanding as of June 30, 2025.

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

Annual Debt Service Requirement
Principal Interest Total
Year ending June 30:
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 12,535 9,557 22,092 2031 to 2035 77,875 41,876 119,751 2036 to 2040 110,690 26,119 136,809 2041 to 2044 80,460 5,450 85,910 323,420$ 123,866 $ 447,286 $

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 certificat es of participation issued by the Torrance Public Financing Authority to construct certain maintenance and entertainment 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 resu lt, 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) resulting from this transaction was approximate ly $3.8 million. Proceeds from the 2014 Refunding Certificates of Participation was set aside for the construction of street improvements, storm drain improvements, and purchases of equipment. The lease revenue bonds are considered to be capital related.

There is no reserve requirement for the 2021

Lease Revenue Bonds. Pledged rental payments
equaled debt service payment during fiscal year ended June 30, 2025.

The principal matures June 1 each year th rough 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 $35,365,000 remains outstanding as of June 30, 2025.

71 99

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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

Annual Debt Service Requirement
Principal Interest Total
Year ending June 30:
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 1,590 918 2,508 2031 to 2035 8,555 3,969 12,524 2036 to 2040 9,955 2,566 12,521 2041 to 2044 9,215 792 10,007 35,365$ 12,210 $ 47,575 $

c) Water Fund Easement
In August 2012, the City entered into a th

irty 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, 2025 is $987,972. The related debt is considered to be capital debt.

The future easement obligations at June 30, 2025 are as follows (in thousands):

Water Enterprise
Fund

Year ending June 30:
2026 $ 58
2027 58
2028 58
2029 58
2030 58
2031 to 2035 291
2036 to 2040 291
2041 to 2042 116
$ 988

d) Water Fund Installment Sale Agreement
In 2017, the City entered into an installment sal e 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 Torrance Well Field Project (the “Project”). The 72 100

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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 $1,671,301 remains outstanding as of June 30, 2025.

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

Water Fund Annual Debt Service Requirement
Principal Interes t Total
Year ending June 30:
2026 609 36 645
2027 623 21 644
2028 439 7 446
1,671$ 64 $ 1,735 $

e) Water Fund Construction Installment Sale Agreement
In 2025, the City entered into a construction installment sale agreement with the California State Water Resources Control Board (“State Water Board”), for the purpose of financing the drinking water construction project, the Van Ness Avenue Well Field Project (the “Project”).

The State Water Board or its assignee provide d $14,338,835 for construction of the Project.

The installment sale agreement debt is considered to be capital related.

The principal matures June 30 each year from

2025 through 2044 at variable amounts ranging
from $628,146 to $806,759. Interest is payable on June 30 at a rate of 1.4% and $13,564,833 remains outstanding as of June 30, 2025.

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

Water Fund Annual Debt Service Requirement
Principal Interes t Total
Year ending June 30:
2026 628 190 818
2027 637 181 818
2028 646 172 818
2029 655 163 818
2030 664 154 818
2031 to 2035 3,462 628 4,090 2036 to 2040 3,711 379 4,090 2041 to 2044 3,162 111 3,273 13,565$ 1,978 $ 15,543 $

73 101

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

(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, 2025 (in thousands):

Govermental Activities:

Balance
June 30,
2024
(as restated)
Incurred or
Issued
Satisfied or
Matured
Balance
June 30,
2025
Amounts due
within
One Year
Amounts Due
in more than
One Year
Other Long-term Liabilities
Compensated absences payable * 30,351 $ 796 - 31,147 $ 8,098 23,049 Notes payable 920 - 222 698 227 471 SBITA liability (note 6) 8,965 8,107 2,351 14,721 1,728 12,993 Claims & judgments (note 15) 67,480 3,577 3,123 67,934 13,839 54,095 Other Debt
Certificates of Participation:
2016 refunding certificates 19,070 - 510 18,560 530 18,030 2016 premium 1,295 - 57 1,238 - 1,238 Lease Revenue Bonds:
2020 lease revenue bonds 332,070 - 8,650 323,420 9,325 314,095 2021 lease revenue bonds 36,830 - 1,465 35,365 1,480 33,885 Total Governmental Activities $496,981 12,480 16,378 493,083$ 35,227 457,856 Business-T ype Activities:

Other Long-term Liabilities
Compensated absences payable * 2,916 $ 289 - 3,205 $ 833 2,372 SBITA liability (note 6) 632 244 219 657 228 429 Direct Borrowings
Easement payable - Water Fund 1,046 - 58 988 58 930 Installment Sale Agreement - Water Fund 2,266 - 595 1,671 609 1,062 Drinking Water State Revolving Loan - Water Fund - 14,339 774 13,565 628 12,937 Total Business-Type Activities 6,860$ 14,872 1,646 20,086$ 2,356 17,730 * - The change in compensated absences above is a net change for the year.

Compensated Absences
The City’s policy regarding compen

sated absences is described in Note 1. The funded portion of this debt, is recorded in the Internal Servi ce funds and business-type Enterprise funds totaling $8,841,173 and $3,205,352 respectively. The unfunded portion, amounting to $22,305,607 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.

74 102

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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 annua l rate of 2.17%. The annual payment is payable on March 15, and at the end of the term, the City

will own the ambulances. As of June 30, 2025,
$697,609 of principal remains outstanding.

Claims and Judgments
The long-term liability for self-insurance claims and 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, 2025, claims a

nd judgments payable was $67,934,283 (see Note 15).
(9) Pension Plan
The following is a summary of pension related items for the year ended June 30, 2025:

Pension
Liability
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Pension
Expense /
(Income)
CalPERS Miscellaneous $ 66,709,126 $ 24,796,619 $ (325,609) $ 19,359,937 CalPERS Safety – Police 86,154,368 24,362,316 (1,329,296) 24,582,741 CalPERS Safety – Fire 62,277,052 26,357,199 - 15,935,775 PARS (see Note 10) 16,713,306 1,196,155 (381,797) 1,312,483 Total $ 231,853,852 $ 76,712,289 $ (2,036,702) $ 61,190,936

Plan Descriptions
All qualified permanent and proba tionary employees are eligible to participate in the Local Government’s separate Safety (police and fire) and 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 common 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.

75 103

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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 y

ear 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 eligible for service retirement upon attainment 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 followi ng: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Bene fit. Safety members can receive a special death 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 oblig ations. The Plans’ provisions and benefits in effect at June 30, 2025, 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 7.00% 8.00%
Required employer contribution:

Normal cost rate 10.34% 12.479%
Payment of unfunded liability $ - $ -

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 9.00% 15.50 % or 13.00% Required employer contribution:

Normal cost rate 29.39% 26.221% or 22.529%
Payment of unfunded liability $ - $ -

76 104

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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 9.00% 12.00%
Required employer contribution:

Normal cost rate 22.23% 20.822% or 22.549%
Payment of unfunded liability $ - $ -

Employees Covered
At June 30, 2024 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 1,281 419 232
Inactive employees entitled to but
not yet receiving benefits 1,528 125 44
Active employees 994 180 140
Total 3,803 724 416

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 following notice of a change in the rate. The total plan contributions are determined through the Ca lPERS 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 satisfy contribution requirements that are identified by the pension plan terms as plan member contri

bution requirements are classified as plan member
contributions. For the measureme

nt period ending June
30, 2024 (the measurement date), the
average active employee contribution rate is 7. 47 percent for Miscellaneous, 10.05 percent for Safety – Police and 9.93 percent for Safety – Fire , of annual pay, and th e employer’s contribution rate is 10.14 percent for Miscellaneous, 27.51 pe rcent for Safety – Police and 20.95 percent for Safety – Fire, of annual payroll. Employer contri bution rates may change if plan contracts are 77 105

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

amended. It is the responsibility of the empl oyer to make necessary accounting adjustments to reflect the impact 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, 2023 valuation was rolled forward to determine the June 30, 2024 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 2.3%
Salary Increases Varies by entry age and service
Investment Rate of Return 6.80% net of pension plan investment and administrative expenses; includes inflation
Retirement Age Based on 2021 CalPERS’ Experience Study and Review of Actuarial Assumptions
Mortality Rate Table Based on 2021 CalPERS’ Experience Study and Review of Actuarial Assumptions

Discount Rate
The discount rate used to measure the total pension 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 de termined. 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.

78 106

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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 (exp ected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated 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 31.80% 8.8%
Public Equities – Factor Weighted 10.00 n/a
Treasury 7.30 0.3
Mortgage-backed Securities 5.30 1.6
Investment Grade Corporates 6.40 2.7
High Yield 5.30 n/a
Emerging Market Debt 5.30 n/a
Private Debt 2.80 n/a
Private Equity 15.50 11.0
Real Assets 13.20 5.6
Leverage (2.90) n/a
Total 100.00%
1 An expected inflation of 2.3% used for this period
2 Figures are based on the CalPERS Trust Level Review as of June 20th, 2024 79 107

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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: 6/30/2023 $ 754,357,468 $ 677,516,237 $ 76,841,231 Changes Recognized for the
Measurement Period:

Service Cost 11,281,868 - 11,281,868
Interest on the Total Pension Liability 51,219,945 - 51,219,945 Changes of Benefit Terms - - -
Differences between Expected and
Actual Experience
0 3,472,715

-
0 3,472,715
Changes of Assumptions - - -
Net Plan to Plan Resource Movement - - -
Contributions from the Empl oyer - 7,682,596 (7,682,596) Contributions from Employees - 5,570,731 (5,570,731)
Net Investment Income - 63,404,603 (63,404,603)
Administrative Expense - (551,297) 551,297
Benefit Payments, including Refunds of
Employee Contributions

(42,306,119)

(42,306,119)
000000
-
Other Miscellaneous Income/(Expense) - - -
Net Changes during 2023-24 23,668,409 33,800,514 (10,132,105) Balance at: 6/30/2024 $ 778,025,877 $ 711,316,751 $ 66,709,126

80 108

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

Safety - Police
Increase (Decrease)
Total Pension Plan Fiduciary Total Pension
Liability Net Position Liability
(a) (b) (c) = (a) - (b)
Balance at: 6/30/2023 $ 692,052,445 $ 594,281,340 $ 97,771,105 Changes Recognized for the
Measurement Period:

Service Cost 10,188,830 - 10,188,830
Interest on the Total Pension Liability 46,578,056 - 46,578,056 Changes of Benefit Terms - - -
Differences between Expected and
Actual Experience
0000000

(2,111,235)

-
0000000000

(2,111,235)
Changes of Assumptions - - -
Net Plan to Plan Resource Movement - - -
Contributions from the Empl oyer - 8,474,142 (8,474,142) Contributions from Employees - 2,937,049 (2,937,049) Net Investment Income - 55,344,766 (55,344,766)
Administrative Expense - (483,569) 483,569
Benefit Payments, including Refunds of
Employee Contributions

(39,982,692)

(39,982,692)
00000 0
-
Other Miscellaneous Income/(Expense) - - -
Net Changes during 2023-24 14,672,959 26,289,696 (11,616,737) Balance at: 6/30/2024 $ 706,725,404 $ 620,571,036 $ 86,154,368

81 109

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

Safety - Fire
Increase (Decrease)
Total Pension Plan Fiduciary Total Pension
Liability Net Position Liability
(a) (b) (c) = (a) - (b)
Balance at: 6/30/2023 $ 429,490,256 $ 371,698,509 $ 57,791,747 Changes Recognized for the
Measurement Period:

Service Cost 6,266,328 - 6,266,328
Interest on the Total Pension Liability 29,648,354 - 29,648,354 Changes of Benefit Terms - - -
Differences between Expected and
Actual Experience
00000000
10,210,410

-
0000000000
10,210,410
Changes of Assumptions - - -
Net Plan to Plan Resource Movement - - -
Contributions from the Empl oyer - 5,169,039 (5,169,039) Contributions from Employees - 2,263,492 (2,263,492)
Net Investment Income - 34,509,708 (34,509,708)
Administrative Expense - (302,452) 302,452
Benefit Payments, including Refunds of
Employee Contributions

(26,295,080)

-
Other Miscellaneous Income/(Expense) - - -
Net Changes during 2023-24 19,830,012 15,344,707 4,485,305 Balance at: 6/30/2024 $ 449,320,268 $ 387,043,216 $ 62,277,052

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 th

e 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 $ 164,395,367 $ 66,709,126 $ (14,221,455) Plan’s Total Pension Liability –
Safety-Police $ 178,258,858 $

86,154,368 $ 10,470,693
Plan’s Total Pension Liability –
Safety-Fire $ 117,645,615 $ 62,277,052 $ 16,369,049

82 110

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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

For the measurement period ended June 30, 2024, the City recognized a pension expense of $19,359,937 for the Miscellaneous Plan, $24,582,741 for the Safety-Police Plan and $15,935,775 for the Safety-Fire Plan.

As of June 30, 2025, the City has deferred outflows and deferred in flows of resources related to the Plans as follows:

Miscellaneous Deferred Outflows of
Resources
Deferred Inflows of
Resources
Pension Contributions Subsequent to Measurement Date $ 9,878,256 $ - Differences between Expected and Actual Experience 2,186,524 (325,609) Changes of Assumptions 620,956 -
Net Difference between Projected and Actual Earnings on Pension Plan Investments
0 12,110,883

000000000

-
Total $ 24,796,619 $ (325,609)

Safety - Police De ferred Outflows of
Resources
Deferred Inflows of
Resources
Pension Contributions Subsequent to Measurement Date $ 11,202,785 $ - Differences between Expected and Actual Experience 1,884,896 (1,329,296) Changes of Assumptions - -
Net Difference between Projected and Actual Earnings on Pension Plan Investments
0 11,274,635
00000000
-
Total $ 24,362,316 $ (1,329,296)

Safety - Fire Deferred Outflows of
Resources
Deferred Inflows of
Resources
Pension Contributions Subsequent to Measurement Date $ 6,866,814 $ - Differences between Expected and Actual Experience 9,441,100 - Changes of Assumptions 2,782,667 -
Net Difference between Projected and Actual Earnings on Pension Plan Investments
0 7,266,618
00000000
0 -
Total $ 26,357,199 $ -

83 111

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

Deferred outflows of resources related to contributions subsequent to the measurement date reported above for Miscellaneous, Safety-Police an d Safety-Fire in the amounts of $9,878,256, $11,202,785 and $6,866,814, respec tively, 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 relate d 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
2026 $ 1,464,119 $ 1,478,084 $ 5,543,011 2027 19,321,915 15,706,938 13,709,859
2028 (2,653,931) (2,285,801) 1,008,844
2029 (3,539,349) (3,068,986) (771,329)
2030 - - -
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. This benefit takes the form of a single employer defined benefit pension plan. The authority to est ablish 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 year s 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 City 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 report may be obtained from its executive office at 4350 Von Karman Avenue, Suite 100, Newport Beach, California 92660.

84 112

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

Employees covered – At June 30, 2023 (valuation 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 contribution as determined by the Plan’s actuary. The Plan’s annual pension cost for the fiscal year ended June 30, 2025, is based on an actuarial valuation as of June 30, 2023. For the fiscal year ended June 30, 2025, th e City’s annual pension cost is $1,312,483. The City contributed $1,196,155 to the plan.

Measurement Date: June 30, 2024
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.

85 113

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

Discount Rate

The discount rate used to measure the total pe nsion liability was 5.25 pe rcent. To determine whether the municipal bond rate should 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: 6/30/2023 $ 36,894,131 $ 18,841,371 $ 18,052,760 Changes Recognized for the
Measurement Period:

Service Cost 359,576 - 359,576
Interest on the total pension liability 1,909,226 - 1,909,226 Differences between actual and
expected experience - - -
Change of assumptions - - -
Contributions from the employer - 1,372,000 (1,372,000) Investment income - 2,267,121 (2,267,121)
Administrative expense - (30,865) 30,865
Benefit payments, including refunds (1,798,007) (1,798,007) - Net Changes 470,795 1,810,249 (1,339,454) Balance at: 6/30/2024 $ 37,364,926 $ 20,651,620 $ 16,713,306

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 th e 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 $ 21,413,375 $ 16,713,306 $ 12,798,147

86 114

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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

For the measurement period ended June 30, 2024 (t he measurement date), the City recognized a pension expense of $1,312,483 for the Plan.

As of June 30, 2025, the City has deferred outflows and deferred in flows of resources related to the Plan as follows:

Deferred Outflows
of Resources
Deferred Inflows
of Resources
Differences between expected and actual experience $ -- $ - Changes of assumptions - - Net difference between projected and actual earnings on plan investments
000000000000
-
0000
(

(381,797)
Employer contributions made subsequent to the measurement date 1,196,155 - Total $ 1,196,155 $ (381,797)

As of June 30, 2025, deferred outflows of resources related to employer contributions subsequent to the measurement date in the

amount of $1,196,155
will be recognized as a
reduction of the total pension liability in the y ear ending June 30, 2026. Other amounts reported as deferred outflows of resources and deferred inflow s of resources related to pensions will be recognized as pension expense as follows:

Measurement Period Ending
June 30:

Deferred Outflows/(Inflows)
of Resources
2026 $ (165,047)
2027 388,101
2028 (353,326)
2029 (251,525)
2030 -
Thereafter -

(11) Other Postemployment Benefit Plan
Plan Description

The City has established the City of Torrance Reti

ree Healthcare Plan (the “Plan”), an agent
multiple-employer defined benefit postemploymen t healthcare plan. The Plan provides post- retirement medical benefits to eligible retirees a nd 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 87 115

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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 follo wing 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, 2024, the City’s cash contributions were $5,837,000 in payments to the Trust.

Total Other Postemployment Benefit (OPEB) Liability

The City’s total OPEB liability was measured as of June 30, 2024 and the total OPEB liability used to calculate the total OPEB liability was determined

by an actuarial valuati
on dated June 30, 2023.

Actuarial Methods and Assumptions
The total OPEB liability in the June 30, 2024 actuarial valuation was determined using the following actuarial methods and assumptions:

Measurement Date June 30, 2024
Measurement Period July 1, 2023 to June 30, 2024
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

88 116

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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.

89 117

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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: 6/30/2023 $ 100,668,488 $ 38,987,802 $ 61,680,686 Changes Recognized for the
Measurement Period:

Service Cost 2,475,922 - 2,475,922
Interest on the Total OPEB Liability 6,314,131 - 6,314,131 Changes of Benefit Terms 4,933,108 - 4,933,108
Differences between Expected and
Actual Experience (898,249) - (898,249)
Changes of Assumptions - - -
Contributions from the Empl oyer - 5,837,000 (5,837,000) Contributions from Employees - - -
Net Investment Income - 4,779,492 (4,779,492)
Administrative Expense - (36,414) 36,414
Benefit Payments (4,301,819) (4,301,819) - Net Changes during 2023-24 8,523,093 6,278,259 2,244,834 Balance at: 6/30/2024 $ 109,191,581 $ 45,266,061 $ 63,925,520

Change of Assumptions
There have been no changes in the assumptions since the last measurement date.

Change of Benefit Terms

The City’s contribution to Police Yearly Stipend increased from 2.0% to 2.5% of payroll effective July 1, 2024. The impact on the Total OPEB liability is $4,933,108.

90 118

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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 $ 78,526,047 $ 63,925,520 $ 51,902,341

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 6.90%)
Total OPEB Liability $ 53,933,057 $ 63,925,520 $ 76,279,930

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

For the measurement period ended June 30, 202 4, the City recognized OPEB expense of $12,506,362.

As of June 30, 2025, the City has deferred outfl

ows and deferred inflows
of resources related to
OPEB as follows:

Deferred Outflows of
Resources
Deferred Inflows of
Resources
OPEB Contributions Subsequent to Measurement Date $ 6,761,195 $ - Differences between Expected and Actual Experience 4,210,276 (2,580,863) Changes of Assumptions 9,417,978 -
Net Difference between Projected and Actual Earnings on OPEB Plan Investments
0 149,277
0000
00000

-
Total $ 20,538,726 $ (2,580,863)

91 119

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

Deferred outflows of resources related to contributions subsequent to the measurement date reported above in the amounts of $6,761,195, will be recognized as a reduction of the total OPEB liability in the year ending June 30, 2026. Other amounts reported as deferred outflows of resources and deferred inflows of resources relate d to OPEB will be recognized as OPEB expense as follows:

Deferred
Outflows/(Inflows) of
Resources
Year Ending June 30 Miscellaneous
2026 $ 1,553,351
2027 2,957,657
2028 1,599,240
2029 1,815,159
2030 2,216,048
Thereafter 1,055,213

(12) Deferred Compensation Plan
During fiscal year 1973-74, the City Council adopted 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 deferred 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 amounts, 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 administer and to adopt rules and regulations for the Plan, all investment decisions unde r 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. U nder certain circumstances, employees may modify their arrangements with the Plan to provide for greater or lesser contributions or to terminate their participation. If participants retire under the Pl

an 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 92 120

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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, 2025 were as follows (in thousands):

Receivable Fund Payable Fund Amount

General Fund Nonmajor G overnmental Funds $ 8,585
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, 2025 were as follows (in thousands):

Receivable Fund Payable Fund Amount

Nonmajor Governmental Funds General Fund $ 600 The advance from the Parks and Recreation Facilities 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, 2025 were as follows (in thousands):

Receivable Fund Amount

General Fund $ 3,003
Nonmajor Governmental Funds 1,059
Water Enterprise Fund 1,235

$ 5,297

The advances to the Successor Agen cy Trust represent 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 22. 93 121

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

(14) Transfers In and Out
The balances of transfers between funds for the year ended June 30, 20 25 were as follows (in thousands):

Transfer From Transfer To Amount

General Fund

Water Enterprise Fund

18 Sewer Enterprise Fun d 34
Nonma jor Enterprise Fund 315
Nonma jor Governmental Funds 13,009
13,376

Transit System Enterprise Fund Nonma jor Enterprise Fund 15

Water Enterprise Fund Nonmajor Enterprise Fund 3

Municipal Airport Enterprise Fund General Fund 25,145
Nonmajor Governmental Funds 67
Nonma jor Enterprise Fund 31
25,243

Internal Service Funds Nonmajor Enterprise Fund 18

Nonmajor Enterprise Fund General Fund 1,282

Nonmajor Governmental Funds General Fund 2,743
Transit System Enterprise Fund 3,000
Water Enterprise Fund 740
Nonmajor Governmental Funds 702
7,185

Total $ 47,122

Major activity within the fund transfers category can be summarized as follows:
 General Fund transfers to the Capital Impr

ovement Fund (a nonmajor governmental fund)
represents contributions to fund various capital projects;  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 impr ove public transit and related transportation infrastructure;
94 122

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

 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 cer tain 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 rela ted 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 amounts above the $2,000,000 self-insured retention.

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 $25,000,000 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, 2025, $49,534,713 and $18,399,570 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.

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

2023-24 $ 68,816 $ 7,779 $ (9,115) $ 67,480 2024-25 67,480 12,069 (11,615) 67,934

95 123

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

(16) Due from/Due to Other Governments
Amounts due from other governments consisted of th

e following at June 30, 2025 (in thousands):

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

General Fund 15,545$ $ - 1,546$ $ - $ 17,091 Other Governmental Funds:

Measure R Highway Fund - - 134 - 134 State Gas Tax Improvement Fund 1,052 - - - 1,052 Grants and Donation Fund 175 27 94 238 534 Community Development Block Grant Fund - 663 - - 663 Police Inmate Welfare Fund - - 11 - 11 Measure M Grant Fund - - 863 - 863 Measure W Fund - - 2,157 - 2,157 Rental Assistance Program Fund - 9 - - 9 Street Lighting District Assessment Fund - - 14 - 14 Enterprise Funds:

Transit System Fund 851 2,268 5,298 - 8,417 Sewer Fund - - 1 - 1 Nonmajor Enterprise Fund 96 - 3 - 99

Total 17,719$ 2,967 $ 10,121$ 238$ $ 31,045

Amounts due to other governments consisted of the following at June 30, 2025:

Federal Agencies
Other Governmental Fund:

Rental Assistance Program Fund $ 1,077

The payables to the Federal Agencies represent inte rest earnings in excess of $500 that must be returned to the U.S. Department of Housing and Urban Development (HUD). (17) Unearned Revenue
The table that follows shows activity for the City ’s unearned revenue accounts as of June 30, 2025.

The unearned revenue in the Transit System Enterprise Fund represents amounts that will be recognized when eligible purchases occur. The re nts received by the Municipal Airport Enterprise Fund in June for July will be recognized in July 2025. In May and June of 2025, 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 2025.
96 124

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

Balance at Balance at
July 1, 2024 Additions Deductions June 30, 2025
Governmental Funds:

Parks and Recreation revenues received
in May and June for July classes 795$ $ 9 41 $ 795 941$ Section 8 Housing - Emergency
Housing Voucher 30 3 - 33 Bicycle Transportation Fund - 1 49 - 149 Total governmental funds 825 1 ,093 795 1,123 Enterprise Funds:

Transit Security Reserve 1,343 - - 1,343 Transit Prop 1B 1,517 57 - 1,574 Transit Prop C (MOSIP) 2,191 - 40 2,151 Transit Measure R Operations 2,082 3 59 2,082 359 Transit Measure M Operations 4,288 1 ,165 4,288 1,165 Transit Cap and Trade Capital 408 18 - 426 Airport rents received for July 285 3 ,260 3,313 232 Total Enterprise Funds 12,114 4 ,859 9,723 7,250 Total 12,939 $ 5,952 $ 10,518$ 8,373$ Unearned Revenue Activity for Fiscal Year Ended June 30, 2025 (in thousands)

(18) Deficit Fund Balance and Net Position (Accumulated Deficit) The Self-Insurance Fund, an internal service fund,

has an accumulated de
ficit of $52,257,482 at
June 30, 2025. Such deficit is attributed to replenishment of the reserve for general liability claims resulting from settlements of claims in excess of estab lished 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 necessary. Excess charges will be distributed to all funds proportionately depending on their proportionate benefit of the Self-Insurance Fund. (19) Adjustments to and Restatements of Beginning Balances Change in Accounting Principle
During the year ended June 30, 2025, the City implemented the provisions of GASB Statement 101, Compensated Absences. Under this new standa rd, compensated absences liability should be estimated by multiplying the unused le ave more likely than not to be used or settled by the pay rate at the end of the fiscal period. However, if a

different pay rate applies for leaves settled at
termination, that rate should be applied. The liability should also include salary-related payments. 97 125

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

Depending on an employee’s labor group, the City

policy requires sick leaves settled at termination
to be paid at a certain percentage of the pay ra te at period end depending on years of service. The City previously estimated accrued sick leave by only accounting for leave settled at termination.

The City therefore examined its past experience with accumulated sick leave and estimated the amount of leave that is more likely than not to be used as time off in a future period. This estimate is now reported as a liability. The portion of this lia bility that existed at the beginning of the current fiscal year is recognized as a decrease in beginn ing net position resulting from implementation of a new accounting standard.

The City also restated the co mpensated liability arising from compensatory leave and Police annual leave by multiplying the unused leave by the pay rate at the end of the fiscal period and adding in salary-related payments. This resulted in a ne t increase in the beginning net position of the Postemployment/Comp Absences Fund, an internal service fund.

Error Correction
The City failed to accrue an invoice that was related to the previous fiscal period. This error overstated the fund balance of the Measure W Fund and the net position of governmental activities in the government-wide statements.

Change in
Beginning Accounting Error Restated
Balance Principle Correction Balance
Net Position: Government-Wide Statements
Governmental Activities 31,916,896 $ (6,333,590) (36,656) 25,546,650$ Business-Type Activities 287,131,043 (604,075) - 286,526,968 Total Primary Government 319,047,939 (6,937,665) (36,656) 312,073,618 Fund Balances: Governmental Funds
Nonmajor Governmental Funds 91,829,107 - (36,656) 91,792,451 Total Governmental Funds 91,829,107 - (36,656) 91,792,451 Fund Net Position: Enterprise Funds
Transit System Fund 46,988,158 (309,729) - 46,678,429 Water Fund 139,639,169 (138,066) - 139,501,103 Sewer Fund 50,693,941 (30,910) - 50,663,031 Municipal Airport Fund 36,693,676 (59,994) - 36,633,682 Nonmajor Enterprise Fund 13,116,099 (65,376) - 13,050,723 Total Enterprise Funds 287,131,043 (604,075) - 286,526,968 Fund Net Position: Internal Service Funds
Fleet Services Fund 45,664,433 (110,939) - 45,553,494 Postemployment/Comp Absences Fund 783,685 1,463,675 - 2,247,360 Total Internal Service Funds 46,448,118$ 1,352,736 - 47,800,854$

98 126

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

Changes within the Financial Reporting Entity
During the fiscal year ended June 30, 2025, the City reclassified the activities in the Flexible Benefits Fund, previously reported as a custodial f und, to the General Fund. The Flexible Benefits Fund was used to account for employee unspent pre- tax benefits collected from the participating employees. Upon further assessment, th

e City determined that the ac
tivities of this clearing account
do not meet the criteria to be repor ted as fiduciary activities and ther efore should not be reported in a custodial fund. This change resulted in the transfer of deposits payable from the custodial fund to the General Fund.
(20) Commitments and Contingencies
The City has various outstanding contracts and purch ase orders for services, supplies, materials and capital projects that have not been completed as of fiscal year-end. These commitments total $20,737,808 at June 30, 2025.

The balances of encumbrances and other commitmen ts by funds at June 30, 2025 were as follows (in thousands):

The City has been named as a defendant in certa in other claims and litigation matters. In the opinion of City management, the outcome of such li tigation is not expected to result in a material adverse effect on the financial condition of the C ity beyond that accrued for in the City’s Self- Insurance Fund.
(21) Fund Balance Policies
The City will 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.

As part of the Operating Budget Resolution of th e City, City Council delegates authority to assign amounts for specific purposes to the City Manager.

As of June 30, 2025,
the assigned fund balance
of $104,066,213 consists of amount s intended to be used for capital-related projects, including a portion set aside for various technology replacement, as well as portion set aside under an Economic Anomaly Reserve. Counc il approval will be required be fore expending funds from the Economic Anomaly Reserve.

Governmental Funds:

General Fund $ 3,296
Capital improvement funds 17,401
Nonmajor governmental funds 41
Total governmental funds $ 20,738

99 127

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

(22) 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 20 18 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 service

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 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 Reser ve 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 B onds 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 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 service

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 da te 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 Reser ve Policy, or 2) any rating assigned to the bond insurer is downgraded, withdrawn or suspended.

100
128

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025

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:
2026 1,590 $ 302 $ 1,892 $ 2027 1,665 221 1,886 2028 1,750 135 1,885 2029 1,835 46 1,881 6,840$ 704 $ 7,544 $ Advances and Notes Payable
At June 30, 2025, the Successor Agency Trust had advances and notes payable in the following amounts:

Advance from Los Angeles County: The maximum annual debt service on Agency indebtedness may not exceed $1,550,000. Such

advances 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 b ears simple interest at the rate of 7.0% per year. At June 30, 2025, the principal balance outstanding is $12,733,970 and accrued interest is $15,123,897.

Pledged Revenue
The Successor Agency Trust reports debt issuan ces outstanding that were collateralized by the pledging of certain revenues of the former rede velopment 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
state’s action to dissolve all redevelopment ag encies, the Successor Agen cy no longer receives the full amount of tax increment previously ple dged 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 the Successor Agency that represents only that portion of tax increment that is necessary to pay the enforceab le obligations approved 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 percenta ge also approximates the relationship of debt service to RPTTF revenues for the remainder of the term of the commitments.

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)

$3,105,702

$1,890,875

60.9%
101
129

CITY OF TORRANCE, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2025
b) Changes in Long-Term Ob ligations
– Successor Agency Debt
The following is a summar
y of changes in the Successor Agency Trust’s long-term obligations for the year ended June 30, 2025 (in thousands):

Trust Activities:

Balance
June 30,
2024
Incurred or
Issued
Satisfied or
Matured
Balance
June 30,
2025
Amounts due
within One
Year
Amounts Due
in more than
One Year
Advances and notes payable:

Direct Borrowing
County of Los Angeles 27,935$ 891$ 968 $ 27,858$ 1,024$ 26,834$ Other debt:

Tax Allocation Bonds
Downtown '18 project refunding 2,020 - 365 1,655 385 1,270
Downtown '18 project
refunding - premium 198 - 46 152 - 152
Indus
trial '18 project refunding 6,335 -
1,150
5,185 1,205 3,980
Indus
trial '18 project
refunding - premium 622 - 144 478 - 478
Tota
l Trust Activities 37,110$ 891$ 2,673$ 35,328$ 2,614$ 32,714$ c) Advances
from City – Successor Agency Advances
The advances from the City to the Successor Agency Trust of $5, 297,308 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 $38,301,411 as of June 30, 2025, which represents the inclusion of long-term advances and bond debt in excess of cash with fiscal agents including related interest.
(23) Subsequent Event
In preparing these fin ancial statements, the City has evaluated ev ents and transactions for poten tial recognition or disclosure through December 30

, 2025,

which is the d ate these financial statements
were available to be issued . Based upon th is ev aluation, it was determined that no subseq uent events occurred that require recognition or additional disclosure in the financial statements. 102
130

REQUIRED

SUPPLEMENTARY

INFORMATION

ANNUAL COMPREHENSIVE FINANCIAL REPORT
131

CITY OF TORRANCE, CALIFORNIA
Required Supplementary Information
Year ended June 30, 2025

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
Fiscal Year 2024-25 2023-24 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 Measurement Period 2023-24 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15

TOTAL PENSION LIABILITY
Service Cost 11,281,868$ 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$ Interest 51,219,945 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 Changes of Benefit Terms - - - - - - - - - - Difference between Expected and
Actual Experience 3,472,715 (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 Assumptions - - 19,249,642 - - - (4,059,282) 34,423,764 - (9,412,681) Benefit Payments, Including Refunds of
Employee Contributions (42,306,119) (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) Net Change in T otal Pension Liabilit y 23,668,409 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 T otal Pension Liability – Beginning 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 Total Pension Liability – Ending (a) 778,025,877$ 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 $

PLAN FIDUCIARY NET POSITION
Contributions – Employer 7,682,596 $ 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 $ Contributions – Employee 5,570,731 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 Investment Income 63,404,603 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 Administrativ e Expense (551,297) (487,358) (461,328) (543,282) (748,123) (364,288) (755,023) (660,060) (277,649) (512,710) Plan to Plan Resource Movement - - - - - - (1,188) (572) (1,138) (1,092) Benefit Payments, Including Refunds of
Employee Contributions (42,306,119) (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) Other Changes in Net Fiduciary Position - - - - - 1,188 (1,433,802) - - - Net Change in Fiduciar y Net Position 33,800,514 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 ) Plan Fiduciary Net Position – Beginning 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 Fiduciary Net Position – Ending (b) 711,316,751$ 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 $ Plan Total Pension Liability – Ending (a) - (b 66,709,126$ 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 $ Plan Fiduciary Net Position as a Percentage
of the T otal Pension Liability 91.43% 89.81% 90.09% 105.83% 80.07% 80.54% 80.26% 77.82% 78.85% 83.66% 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 $ Plan Total Pension Liability as a Percentage of
Covered Payroll 77.25% 102.13% 98.14% -54.46% 178.90% 165.60% 168.76% 189.14% 169.13% 128.84%

103
132

CITY OF TORRANCE, CALIFORNIA
Required Supplementary Information
Year ended June 30, 2025

SAFETY - POLICE
Fiscal Year 2024-25 2023-24 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 Measurement Period 2023-24 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15

TOTAL PENSION LIABILITY
Service Cost 10,188,830$ 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 $ Interest 46,578,056 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 Changes of Benefit Terms - - - - - - - - - - Difference between Expected and
Actual Experience (2,111,235) 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 Assumptions - - 22,792,083 - - - (2,610,368) 30,873,205 - (8,606,841) Benefit Payments, Including Refunds of
Employee Contributions (39,982,692) (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) Net Change in T ota l Pension Liability 14,672,959 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 T otal Pension Liabilit y – Beginning 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 T otal Pension Liability – Ending (a) 706,725,404$ 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 $

PLAN FIDUCIARY NET POSITION
Contributions – Employer 8,474,142 $ 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 $ Contributions – Employee 2,937,049 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 Investment Income 55,344,766 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 Administrative Expense (483,569) (428,432) (405,694) (380,596) (523,005) (254,540) (528,343) (463,367) (196,022) (361,983) Plan to Plan Resource Movement - - - - - - (832) 572 404 1,092 Benefit Payments, Including Refunds of
Employee Contributions (39,982,692) (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) Other Changes in Net Fiduciary Position - - - - - 832 (1,003,332) - - - Net Change in Fiduciar y Net Position 26,289,696 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) Plan Fiduciar y Net Position – Be ginning 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 Fiduciary Net Position – Ending (b) 620,571,036$ 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 $ Plan Total Pension Liability – Ending (a) - (b) 86,154,368$ 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 $ Plan Fiduciary Net Position as a Percentage
of the T otal Pension Liability 87.81% 85.87% 87.10% 103.90% 62.86% 63.27% 62.92% 61.32% 61.74% 65.22% 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 $ Plan T otal Pension Liability as a Percentage of
Covered Payroll 224.88% 269.41% 236.86% -66.23% 616.90% 581.53% 581.29% 610.86% 563.20% 510.23%

104
133

CITY OF TORRANCE, CALIFORNIA
Required Supplementary Information
Year ended June 30, 2025

SAFETY - FIRE
Fiscal Year 2024-25 2023-24 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 Measurement Period 2023-24 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15

TOTAL PENSION LIAB ILITY
Service Cost 6,266,328$ 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 $ Interest 29,648,354 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 Changes of Benefit Terms - - - - - - - - - - Difference between Expected and
Actual Experience 10,210,410 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 Assumptions - - 9,739,334 - - - (1,978,419) 18,706,825 - (5,267,980) Benefit Payments, Including Refunds of
Employee Contributions (26,295,080) (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) Net Change in T otal Pension Liabilit y 19,830,012 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 T otal Pension Liability – Beginning 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 T otal Pension Liability – Ending (a) 449,320,268$ 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 $

PLAN FIDUCIARY NET POSITION
Contributions – Employer 5,169,039 $ 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 $ Contributions – Employee 2,263,492 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 Investment Income 34,509,708 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 Administrative Expense (302,452) (269,237) (257,183) (252,753) (351,198) (172,311) (360,377) (317,314) (134,400) (248,172) Plan to Plan Resource Movement - - - - - - (564) - 735 13,412 Benefit Payments, Including Refunds of
Employee Contributions (26,295,080) (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) Other Changes in Net Fiduciary Position - - - - - 564 (684,363) - - - Net Change in Fiduciar y Net Position 15,344,707 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) Plan Fiduciary Net Position – Beginning 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 Fiduciary Net Position – Ending (b) 387,043,216$ 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 $ Plan T otal Pension Liabilit y – Ending (a) - (b 62,277,052$ 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 $ Plan Fiduciary Net Position as a Percentage
of the T otal Pension Liability 86.14% 86.54% 87.57% 103.70% 65.43% 66.12% 66.63% 65.33% 65.35% 69.24% 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 $ Plan Total Pension Liability as a Percentage of
Covered Payroll 203.84% 206.92% 185.47% -54.37% 531.03% 497.10% 471.91% 501.69% 481.70% 429.81%

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, 2021 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 years 2023-24 thru 2024-25 – there were no significant changes in assumption.

105
134

CITY OF TORRANCE, CALIFORNIA
Required Supplementary Information
Year ended June 30, 2025

Schedule of Plan Contributions
(Last Ten Fiscal Years)

Miscellaneous Fiscal Year
2024-25
Fiscal Year
2023-24
Fiscal Y ear
2022-23
Fiscal Year
2021-22
Fiscal Year
2020-21
Fiscal Year
2019-20
Fiscal Year
2018-19
Fiscal Year
2017-18
Fiscal Y ear
2016-17
Fiscal Year
2015-16
Actuarially Determined Contribution 9,878,256$ 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 $ Contributions in Relation to the
Actuarially Determined Contribution (9,878,256) (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) Contribution Deficiency (Excess) $ - $ - $ - $ - $ (76,683,254) $ - $ - $ - $ - $ - Cov ered Payroll 94,920,889$ 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$ Contributions as a Percentage of
Cov ered Payroll 10.41% 8.58% 15.50% 15.09% 22.47% 20.53% 17.55% 15.33% 14.26% 13.68%

Safety - Police Fiscal Year
2024-25
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
Fiscal Year
2016-17
Fiscal Year
2015-16
Actuarially Determined Contribution 11,202,785$ 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$ Contributions in Relation to the
Actuarially Determined Contribution (11,202,785) (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) Contribution Deficiency (Excess) $ - $ - $ - $ - $(165,990,349) $ - $ - $ - $ - $ - Covered Payroll 44,138,163$ 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$ Contributions as a Percentage of
Cov ered Payroll 25.38% 21.26% 34.02% 33.33% 62.55% 57.54% 51.12% 46.27% 44.68% 41.74%

Safety - Fire Fiscal Year
2024-25
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
Fiscal Year
2016-17
Fiscal Year
2015-16
Actuarially Determined Contribution 6,866,814$ 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 $ Contributions in Relation to the
Actuarially Determined (6,866,814) (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) Contribution Deficiency (Excess) $ - $ - $ - $ - $ (95,759,463) $ - $ - $ - $ - $ - Covered Payroll 35,153,611$ 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$ Contributions as a Percentage of
Cov ered Payroll 19.53% 16.22% 25.84% 22.64% 49.30% 46.11% 40.99% 36.19% 35.61% 35.44%

106
135

CITY OF TORRANCE, CALIFORNIA
Required Supplementary Information
Year ended June 30, 2025

Notes to Schedule:

Valuation Date 6/30/2023 6/30/2022 6/30/2021 6/30/2020 6/3 0/2018 6/30/2017 6/30/2016 6/30/2015 6/30/2014 6/30/2013 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 (1) (1) (1) (1) (1) (1) (1) (1) (1) (1) Asset valuation method Market Value Market Value Market Value Market Value Market Value Market Value Market Value Market Value Market Va lue Market Value Inflation 2.30% 2.50% 2.30% 2.50% 2.625% 2.625% 2.75% 2.75% 2.75% 2.75% Payroll Growth 2.80% 2.75% 2.75% 2.75% 2.875% 3.00% 3.00% 3.00% 3.00% 3.00% Investment rate of return 6.8% (2) 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) Retirement age (6) (5) (5) (5) (5) (4) (4) (4) (3) (3)
Mortality (10) (9) (9) (9) (9) (8) (8) (8) (7) (7)
(1) Level percentage of payroll, closed
(2) Net of pension plan investment expense, including inflatio n (3) The probabilities of Retirement are based on the 2010 CalPERS Experience Study for the period from 1997 to 2007. (4) The probabilities of Retirement are based on the 2014 CalPERS Experience Study for the period from 1997 to 2011. (5) The probabilities of Retirement are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. (6) The probabilities of Retirement are based on the 2021 CalPERS Experience Study. (7) The probabilities of mortality are based on the 2010 CalPERS Experience Study for the period from 1997 to 2007.

Pre-retirement and Post-retirement mortality rates include 5 years of projected mortality improvement using Scale AA published by the Society of Actuaries.
(8) The probabilities of mortality are based on the 2014 CalPERS Experience Study for the period from 1997 to 2011.

Pre-retirement and Post-retirement mortality rates include 20 years of projected mortality improvement using Scale BB published by the Society of Actuaries.
(9) The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015.

Pre-retirement and Post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries.
(10) The probabilities of mortality are based on the 2021 CalPERS Experience Study. Mortality rates incorporate full generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries.

107
136

CITY OF TORRANCE, CALIFORNIA
Required Supplementary Information
Year ended June 30, 2025

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 2024-25 2023-24 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 Measurement Period 2023-24 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15

TOTAL PENSION LIABILITY
Serv ice Cost 359,576$ 404,155$ 410,733$ 418,495$ 441,715$ 493,000$ 518,000$ 480,000$ $ 504,000 504,000 $ Interest 1,909,226 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 Changes of Benefit Terms - - - - - - - - - - Difference between Expected and
Actual Experience - 335,110 - (1,006,503) - (280,000) - (118,000) - (772,000) Changes of Assumptions - - - 2,088,141 - 144,000 - 950,000 - 821,000 Benefit Payments, Including Refunds (1,798,007) (1,645,856) (1,504,467) (1,357,066) (1,240,507) (1,144,000) (1,068,000) (945,000) (844,000) (756,000) Net Change in Total Pension Liability 470,795 958,592 736,297 2,035,055 1,038,187 998,000 1,171,000 2,108,000 1,324,000 1,378,000 Total Pension Liability – Beginning 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 Total Pension Liability – Ending (a) 37,364,926$ 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$

PLAN FIDUCIARY NET POSITION
Contributions – Employer 1,372,000$ 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$ Contributions – Employee - - - - - - - - - - Investment Income 2,267,121 1,446,500 (2,608,630) 3,753,615 545,042 913,000 857,000 1,190,000 77,000 235,000 Administrative Expense (30,865) (53,962) (32,212) (47,917) (31,969) (33,000) (45,000) (31,000) (48,000) (28,000) Benefit Payments, Including Refunds (1,798,007) (1,645,856) (1,504,467) (1,357,066) (1,240,507) (1,144,000) (1,068,000) (945,000) (844,000) (756,000) Other Changes in Net Fiduciary Position - - - - - - - - - - Net Change in Fiduciary Net Position 1,810,249 1,108,682 (2,582,309 ) 3,860,632 782,366 1,246,000 1,252,000 1,736,000 534,000 798,000 Plan Fiduciary Net Position – Be ginning 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 Fiduciary Net Position – Ending (b) 20,651,620$ 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$ Plan Total Pension Liability – Ending (a) - (b) 16,713,306$ 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$ Plan Fiduciary Net Position as a Percentage of the
Total Pension Liability 55.27% 51.07% 49.35% 57.71% 49.61% 48.78% 46.34% 43.98% 41.07% 41.11% 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$ Plan Total Pension Liability as a Percentage of
Covered Payroll 192.11% 247.10% 218.02% 161.17% 162.45% 145.37% 145.00% 125.02% 113.89% 101.62%

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 2024-25 – there were no significant changes in assumption.

108
137

CITY OF TORRANCE, CALIFORNIA
Required Supplementary Information
Year ended June 30, 2025

Schedule of Plan Contributions
(Last Ten Fiscal Years)

Fiscal Year
2024-25
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
Fiscal Year
2016-17
Fiscal Year
2015-16
Actuarially Determined Contribution 1,196,155$ 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 $ Contributions in Relation to the
Actuarially Determined (1,196,155) (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) Contribution Deficiency (Excess) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Cov ered Payroll 8,310,651 $ 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 $ Contributions as a Percentage of
Cov ered Payroll 14.4% 16.3% 18.6% 18.7% 16.4% 14.7% 13.3% 12.7% 11.3% 9.4%

Notes to Schedule:

Valuation Date 6/30/2024 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 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) (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) Amortization period 19 yrs 19 yrs 19 yrs 16 yrs 17 yrs 16 yrs 16 yrs 17 yrs 18 yrs 19 yrs Asset v aluation method (9) (9) (2) (2) (2) (2) (2) (2) (2) (2) Inflation 2.50% 2.50% 2.50% 2.50% 2.75% 2.75% 2.75% 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% 5.25% 5.75% 5.75% 6.75% 5.75% 6.25% 6.25% 6.25% Retirement age (8) (8) (6) (6) (5) (5) (5) (4) (4) (4)
Mortality (8) (8) (6) (6) (5) (5) (5) (4) (4) (4)
(1) Minus normal cost
(2) Inv estment gains and losses spread ov er 5 year rolling period, not less than 80% nor more than 120% of market v alue. (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 Pension 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. (8) CalPERS Public Agency 2021 Experience Study
(9) Investment gain/los is amortized on a straight-line basis over 5 years

109
138

CITY OF TORRANCE, CALIFORNIA
Required Supplementary Information
Year ended June 30, 2025

3) Other Postemployment Benefits

Schedule of Changes in Total OPEB Liability and Related Ratios During the Measurement Period

Fiscal Year 2024-25 2023-24 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 * Measurement Period 2023-24 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 *

TOTAL OPEB LIABILITY
Service Cost 2,475,922$ 2,105,585$ 1,935,301$ 1,857,231$ 1,803,137$ 1,724,000$ 1,674,000$ 1,625,000$ Interest 6,314,131 5,011,817 4,839,056 4,879,287 4,696,322 4,647,000 4,475,000 4,319,000 Changes of Benefit Terms 4,933,108 - - 5,549,078 Difference between Expected and Actual (898,249) 5,732,980 - (5,078,087) - (1,801,000) - - Experience
Changes of Assumptions - 11,852,107 - 2,011,737 - (360,000) - - Benefit Payments (4,301,819) (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 8,523,093 20,530,726 2,521,972 5,155,331 2,877,459 698,000 2,386,000 2,348,000 Total OPEB Liability – Beginning 100,668,488 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) 109,191,581$ 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 5,837,000$ 5,644,000$ 5,957,000$ 5,781,000$ 5,297,000$ 5,908,000$ 5,908,000$ 11,617,000$ Contributions – Employee - - - - - - - - Inv estment Income 4,779,492 3,067,253 (5,999,322) 9, 263,758 1,164,007 1,630,000 1,799,000 1,457,000 Administrative Expense (36,414) (32,415) (26,519) (27,144) (29,753) (19,000) (35,000) (8,000) Benefit Payments, Including Refunds (4,301,819) (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 6,278,259 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 38,987,802 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) 45,266,061$ 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) 63,925,520$ 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 41.5% 38.7% 43.0% 50.0% 38.4% 36.0% 30.5% 25.7% Cov ered Payroll 112,148,771$ 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
Cov ered Payroll 57.0% 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 2024-25 – there were no significant changes in assumption.

* Fiscal year 2017-18 was the first year of GASB 75 implementation, therefore only eight fiscal years are shown.

110
139

CITY OF TORRANCE, CALIFORNIA
Required Supplementary Information
Year ended June 30, 2025

Schedule of Plan Contributions

Fiscal Year
2024-25
Fiscal Year
2023-24
Fiscal Y ear
2022-23
Fiscal Year
2021-22
Fiscal Year
2020-21
Fiscal Y ear
2019-20
Fiscal Year
2018-19
Fiscal Year
2017-18 *
Actuarially Determined Contribution 6,761,195$ 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 (6,761,195) (5,837,000) (5,644,000) (5,957,000) (5,781,000) (5,297,000) (5,908,000) (5,908,000) Contribution Deficiency (Excess) $ - $ - $ - $ - $ - $ - $ - $ 197,000 Cov ered Payroll 130,160,671$ 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% 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 eight fiscal years are shown. 111
140

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112
141

COMBINING FINANCIAL

STATEMENTS & SCHEDULES

ANNUAL COMPREHENSIVE FINANCIAL REPORT
142

NON-MAJOR
G

VERNMEN

AL FUNDS

ANNUAL COMPREHENSIVE FINANCIAL REPORT
143
Special
Revenue
Funds
Capital
Project
Funds
Debt
Service
Fund
Total
Nonmajor
Governmental
Funds
Assets
Pooled cash and investments 91,828,697$ 22,842,209$ -$ 114,670,906$ Cash and cash equivalents with fiscal agents - 3,756,770 1,145 3,757,915 Accounts receivable 615,006 300 - 615,306 Accrued interest receivable 317,665 - - 317,665 Advance to successor agency 1,059,462 - - 1,059,462 Due from other governments 5,436,414 - - 5,436,414 Interfund advances receivable 600,000 - - 600,000 Notes receivable 32,900 - - 32,900 Lease receivable 742,548 - - 742,548 Prepaids 12,498 5,500 - 17,998 Total Assets 100,645,190$ 26,604,779 $ 1,145 $ 127,251,114$ Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:

Accounts payable 3,875,207$ 973,303 $ - $ 4,848,510$ Accounts payable - contract retention 1,258,204 98,039 - 1,356,243 Accrued liabilities 1,310,976 559,203 - 1,870,179 Due to other funds 6,741,004 1,844,467 - 8,585,471 Unearned revenue 182,037 - - 182,037 Deposits and guarantees 6,132,632 158,056 - 6,290,688 Total Liabilities 19,501,137 3,633,068 - 23,134,205 Deferred inflows of resources:

Unavailable revenue 693,381 - - 693,381 Deferred leases 647,767 - - 647,767 Total Deferred inflows of resources 1,341,148 - - 1,341,148 Fund Balances:

Nonspendable
Prepaids 12,498 5,500 - 17,998 Restricted for:

Public safety 4,833,127 - - 4,833,127 Public works 57,190,036 - - 57,190,036 Culture and recreation 5,770,047 - - 5,770,047 Community development 11,997,197 - - 11,997,197 Debt service - - 1,145 1,145 Assigned to:

Capital projects - 22,966,211 - 22,966,211
Total Fund Balances 79,802,905 22,971,711 1,145 102,775,761 Total Liabilities, Deferred Inflows of Resources
and Fund Balances 100,645,190$ 26,604,779$ 1,145$ 127,251,114$

CITY OF TORRANCE, CALIFORNIA
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2025
113
144
Special
Revenue
Funds
Capital
Project
Funds
Debt
Service
Fund
Total
Nonmajor
Governmental
Funds
Revenues:

Taxes 1,290,875$ -$ -$ 1,290,875$ Licenses, fees and permits 2,276,644 - - 2,276,644 Fines, forfeitures and penalties 801,917 - - 801,917 Use of money and property 3,100,899 172,085 23,101,675 26,374,659 Intergovernmental 50,807,570 - - 50,807,570 Other revenues 95,573 340,000 - 435,573 Total revenues 58,373,478 512,085 23,101,675 81,987,238 Expenditures:

General government 2,134,608 4,336,266 - 6,470,874 Public safety 2,207,917 2,487,847 - 4,695,764 Public works 31,601,161 715,094 - 32,316,255 Culture and recreation 888,958 309,476 - 1,198,434 Community development 9,267,577 621,109 - 9,888,686 Debt service:

Principal retirement - - 10,625,000 10,625,000 Interest and fiscal charges - - 12,482,338 12,482,338 Total expenditures 46,100,221 8,469,792 23,107,338 77,677,351 Excess (deficiency) of revenues
over (under) expenditures 12,273,257 (7,957,707) (5,663) 4,309,887 Other financing sources (uses):

SBITA - 80,716 - 80,716 Transfers in 782,200 12,995,731 - 13,777,931 Transfers out (7,185,224) - - (7,185,224) Total other financing sources (uses) (6,403,024) 13,076,447 - 6,673,423 Net change in fund balances 5,870,233 5,118,740 (5,663) 10,983,310 Fund balances, July 1, 2024 (as previously presented) 73,969,328 17,852,971 6,808 91,829,107 Error correction (note 19) (36,656) - - (36,656) Fund balances, June 30, 2025 79,802,905$ 22,971,711$ 1,145$ 102,775,761$

CITY OF TORRANCE, CALIFORNIA
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds
Year ended June 30, 2025
114
145
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 of 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
146

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115
147
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 681,049$ 1,115,507$ 99,381$ 149,359$ 22,816$ 3,020,671$ 341,424$ Accounts receivable - 10,560 723 20 - 1,925 -
Accrued interest receivable 3,488 - 509 - 117 15,470 1,749 Advance to successor agency - - - - - - -
Due from other governments - 8,662 - 14,310 - - - Interfund advances receivable 600,000 - - - - - - Notes receivable - - - - - - -
Lease receivable - - - - - - 742,548
Prepaids - - - - - - -
Total assets 1,284,537$ 1,134,729$ 100,613$ 163,689$ 22,933$ 3,038,066$ 1,085,721$ Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:

Accounts payable -$ 244$ 86,131$ 155,182$ -$ 81,985$ -$ Accounts payable - contract retention 480 - - - - - - Accrued liabilities - 19,001 - 8,507 - - -
Due to other funds - 561,727 - - - - -
Due to other governments - 1,077 - - - - -
Unearned revenue - 32,633 - - - - -
Deposits and guarantees - - - - - - -
Total liabilities 480 614,682 86,131 163,689 - 81,985 - Deferred inflows of resources:

Unavailable revenue - - - - - - -
Deferred leases - - - - - - 647,767
Total deferred inflows of resources - - - - - - 647,767 Fund balances:

Nonspendable
Prepaids - - - - - - -
Restricted for:

Public safety - - - - - - -
Public works - - - - 22,933 - -
Culture and recreation 1,284,057 - - - - 2,956,081 437,954 Community development - 520,047 14,482 - - - -
Total fund balances 1,284,057 520,047 14,482 - 22,933 2,956,081 437,954 Total liabilities, deferred inflows of resources
and fund balances 1,284,537$ 1,134,729$ 100,613$ 163,689$ 22,933$ 3,038,066$ 1,085,721$ June 30, 2025

CITY OF TORRANCE, CALIFORNIA
Combining Balance Sheet
Nonmajor Special Revenue Funds
116
148
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
10,631$ 6,421,591$ 9,813,953$ 8,696,655$ 7,477,524$ 12,704,817$ $10,351,737 3,449,500$ 11,189$ - - - - - - 242,845 330,809 4,538 54 32,886 50,301 44,537 103,358 - 163 - 16 - - - - - - - - - - - - 134,088 862,579 2,156,730 533,862 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - 12,498 - - 10,685$ 6,454,477$ 9,864,254$ 8,875,280$ 8,443,461$ 14,861,547$ 11,141,105$ 3,780,309$ 15,743$ -$ -$ 65,626$ 55,601$ 181,869$ 13,227$ 660,912$ 55,033$ 24$ - - 167,442 77,818 252,832 - 110,389 - - - - 938,594 84,327 35,273 12,172 28,276 8,933 15,719 - - - 3,923,682 1,352,158 - 870,348 - - - - - - - - - - - - - - - - - - - - - - - - - - 999 3,716,343 - - - 1,171,662 4,141,428 1,822,132 25,399 1,670,924 3,780,309 15,743 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 12,498 - - - - - - - - 1,610,547 - - - 6,454,477 8,692,592 4,733,852 6,621,329 14,836,148 1,095,443 - - 10,685 - - - - - 1,081,270 - - - - - - - - 5,670,423 - - 10,685 6,454,477 8,692,592 4,733,852 6,621,329 14,836,148 9,470,181 - - 10,685$ 6,454,477$ 9,864,254$ 8,875,280$ 8,443,461$ 14,861,547$ 11,141,105$ 3,780,309$ 15,743$ (continued)
117
149
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 149,404$ 3,698,349$ 6,721,412$ 14,317$ 12,073,532$ 166,389$ 476,211$ Accounts receivable - - - - - - - Accrued interest receivable - - - - 61,965 852 1,991 Advance to successor agency - 1,059,462 - - - - - Due from other governments - - - - 1,052,332 - - Interfund advances receivable - - - - - - - Notes receivable - - - - - - - Lease receivable - - - - - - - Prepaids - - - - - - - Total assets 149,404$ 4,757,811$ 6,721,412$ 14,317$ 13,187,829$ 167,241$ 478,202$ Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:

Accounts payable -$ -$
114,513$ -$ 1,653,921$ -$ -$ Accounts payable - contract retention - - - - 615,286 - - Accrued liabilities - 1,143 - - 156,736 - 2,295 Due to other funds - - - - - - - Due to other governments - - - - - - - Unearned revenue 149,404 - - - - - - Deposits and guarantees - - 2,370,000 - - - - Total liabilities 149,404 1,143 2,484,513 - 2,425,943 - 2,295 Deferred inflows of resources:

Unavailable revenue - 693,381 - - - - - Deferred leases - - - - - - - Total deferred inflows of resources - 693,381 - - - - - Fund balances:

Nonspendable
Prepaids - - - - - - Restricted for:

Public safety - - 265,525 - - - - Public works - - 3,971,374 - 10,761,886 - - Culture and recreation - - - - - - - Community development - 4,063,287 - 14,317 - 167,241 475,907 Total fund balances - 4,063,287 4,236,899 14,317 10,761,886 167,241 475,907 Total liabilities, deferred inflows of resources
and fund balances 149,404$ 4,757,811$ 6,721,412$ 14,317$ 13,187,829$ 167,241$ 478,202$ (continued)
June 30, 2025
Nonmajor Special Revenue Funds
Combining Balance Sheet

CITY OF TORRANCE, CALIFORNIA
118
150
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
295,999$ 40,848$ 27,250$ 744,656$ 2,925,448$ -$ 81,788$ 45,290$ 91,828,697$ - - 23,586 - - - - - 615,006 - 209 - - - - - - 317,665 - - - - - - - - 1,059,462 - 11,365 662,486 - - - - - 5,436,414 - - - - - - - - 600,000 - - - 32,900 - - - - 32,900 - - - - - - - - 742,548 - - - - - - - - 12,498 295,999$ 52,422$ 713,322$ 777,556$ 2,925,448$ -$ 81,788$ 45,290$ 100,645,190$ 2,062$ -$ 646,274$ -$ 102,603$ -$ -$ -$ 3,875,207$ - - 33,957 - - - - - 1,258,204 - - - - - - - - 1,310,976 - - 33,089 - - - - - 6,741,004 - - - - - - - - 1,077 - - - - - - - - 182,037 - - - - - - - 45,290 6,132,632 2,062 - 713,320 - 102,603 - - 45,290 19,501,137 - - - - - - - - 693,381 - - - - - - - - 647,767 - - - - - - - - 1,341,148 - - - - - - - - 12,498 - 52,422 - - 2,822,845 - 81,788 - 4,833,127 - - 2 - - - - - 57,190,036 - - - - - - - - 5,770,047 293,937 - - 777,556 - - - - 11,997,197 293,937 52,422 2 777,556 2,822,845 - 81,788 - 79,802,905 295,999$ 52,422$ 713,322$ 777,556$ 2,925,448$ -$ 81,788$ 45,290$ 100,645,190$ 119
151
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 -$ -$ -$ 1,290,875$ -$ -$ -$ Licenses, fees and permits 243,100 - - - - 1,131,757 - Fines, forfeitures and penalties - - - - - - - Use of money and property 21,480 24,585 4,017 - 883 99,946 111,079 Intergovernmental - 8,801,886 - - - - - Other revenues - 26,138 3,311 - - - - Total revenues 264,580 8,852,609 7,328 1,290,875 883 1,231,703 111,079 Expenditures:

General government - - - - - - - Public safety - - - - - - - Public works - - - 1,882,096 - - - Culture and recreation - - - - - 259,722 20,898 Community development - 8,907,177 4,650 - - - - Total expenditures - 8,907,177 4,650 1,882,096 - 259,722 20,898 Excess (deficiency) of revenues
over expenditures 264,580 (54,568) 2,678 (591,221) 883 971,981 90,181 Other financing sources (uses):

Transfers in - - - 591,221 - - - Transfers out - - - - - - - Net change in fund balances 264,580 (54,568) 2,678 - 883 971,981 90,181 Fund balances, July 1, 2024 (as previously presented) 1,019,477 574,615 11,804 - 22,050 1,984,100 347,773 Error correction (note 19) - - - - - - - Fund balances, June 30, 2025 1,284,057$ 520,047$ 14,482$ -$ 22,933$ 2,956,081$ 437,954$ Year ended June 30, 2025

CITY OF TORRANCE, CALIFORNIA
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds
120
152
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
-$ -$ -$ -$ -$ -$ -$ -$ -$ - - - - - - - - - - - - - - - - - - 412 237,943 372,347 335,050 294,160 502,452 45,126 - - - 3,753,632 3,113,543 3,534,619 5,691,882 7,523,683 9,345,662 - 28,296 - - - - - - 25,753 - 34,254 412 3,991,575 3,485,890 3,869,669 5,986,042 8,026,135 9,416,541 - 62,550 - - - - - - 2,134,608 - - - -
- - - - 1,344,778 - - - - 3,683,000 2,907,489 6,170,434 1,253,600 1,741,874 - - - - - - - - 608,338 - - - - - - - - 10,615 - 240,704 - - 3,683,000 2,907,489 6,170,434 1,253,600 5,840,213 - 240,704 412 3,991,575 (197,110) 962,180 (184,392) 6,772,535 3,576,328 - (178,154) - - - - - - 12,825 - 178,154 - (3,000,000) (178,154) - - - (740,000) - - 412 991,575 (375,264) 962,180 (184,392) 6,772,535 2,849,153 - - 10,273 5,462,902 9,067,856 3,771,672 6,805,721 8,100,269 6,621,028 - - - - -
- - (36,656) - - - 10,685$ 6,454,477$ 8,692,592$ 4,733,852$ 6,621,329$ 14,836,148$ 9,470,181$ -$ -$ (continued)
121
153
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 - - 901,787 - - - - Fines, forfeitures and penalties - - - - - - - Use of money and property - 21,967 236,197 - 600,709 6,441 13,753 Intergovernmental - - - - 8,066,118 - 188,874 Other revenues - - - - - - - Total revenues - 21,967 1,137,984 - 8,666,827 6,441 202,627 Expenditures:

General government - - - - - - - Public safety - - 243,841 - - - - Public works - -
115,971 - 12,936,659 - 230,893 Culture and recreation - - - - - - - Community development - 59,827 - - - - - Total expenditures - 59,827 359,812 - 12,936,659 - 230,893 Excess (deficiency) of revenues
over expenditures - (37,860) 778,172 - (4,269,832) 6,441 (28,266) Other financing sources (uses):

Transfers in - - - - - - - Transfers out - - - - (3,267,070) - - Net change in fund balances - (37,860) 778,172 - (7,536,902) 6,441 (28,266) Fund balances, July 1, 2024 (as previously presented) - 4,101,147 3,458,727 14,317 18,298,788 160,800 504,173 Error correction (note 19) - - - - - - - Fund balances, June 30, 2025 -$ 4,063,287$ 4,236,899$ 14,317$ 10,761,886$ 167,241$ 475,907$ (continued)
Year ended June 30, 2025
Nonmajor Special Revenue Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances

CITY OF TORRANCE, CALIFORNIA
122
154
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
-$ -$ -$ -$ -$ -$ -$ -$ 1,290,875 - - - - - - - - 2,276,644 - 57,120 - - 744,797 - - - 801,917 58,145 795 - - 113,412 - - - 3,100,899 - - 759,375 - - - - - 50,807,570 - 1,047 - - - - 5,070 - 95,573 58,145 58,962 759,375 - 858,209 - 5,070 - 58,373,478 - - - - - - - - 2,134,608 - 45,246 - - 574,052 - - - 2,207,917 - - 679,145 - - - - - 31,601,161 - - - - - - - - 888,958 29,229 - 15,375 - - - - - 9,267,577 29,229 45,246 694,520 - 574,052 - - - 46,100,221 28,916 13,716 64,855 - 284,157 - 5,070 - 12,273,257 - - - - - - - - 782,200 - - - - - - - - (7,185,224) 28,916 13,716 64,855 - 284,157 - 5,070 - 5,870,233 265,021 38,706 (64,853) 777,556 2,538,688 - 76,718 - 73,969,328 - - - - - - - - (36,656) 293,937$ 52,422$ 2$ 777,556$ 2,822,845$ -$ 81,788$ -$ 79,802,905$ 123
155
Variance with
Original Final Actual Final Budget

REVENUES
Intergovernmental 8,928,000$ 9,018,000 $ 8,801,886 $ (216,114) $ Use of money and property 5,500 5,500 24,585 19,085 Other revenues 16,000 16,000 26,138 10,138 Total revenues 8,949,500 9,039,500 8,852,609 (186,891)

EXPENDITURES
Current:

Community development 8,825,679 8,915,679 8,907,177 8,502 Total expenditures 8,825,679 8,915,679 8,907,177 8,502 Excess (deficiency) of revenues over expenditures 123,821 123,821 (54,568) (178,389) Net change in fund balances 123,821 123,821 (54,568) (178,389) Fund balances - beginning 574,615 574,615 574,615 - Fund balances - ending 698,436$ 698,436$ 520,047$ (178,389)$ 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, 2025
124
156
Variance with
Original Final Actual Final Budget

REVENUES
Taxes 1,291,500$ 1,291,500 $ 1,290,876 $ (624) $ Total revenues 1,291,500 1,291,500 1,290,876 (624)

EXPENDITURES
Current:

Public works 1,866,272 1,882,854 1,882,096 758 Total expenditures 1,866,272 1,882,854 1,882,096 758 Excess (deficiency) of revenues over expenditures (574,772) (591,354) (591,220) 134

OTHER FINANCING SOURCES (USES)
Transfers in 574,772 605,551 591,220 (14,331) Total other financing sources (uses) 574,772 605,551 591,220 (14,331) Net change in fund balances - 14,197 - (14,197) Fund balances - beginning - - - - Fund balances - ending -$ 14,197$ - $ (14,197)$ 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, 2025
125
157
Variance with
Original Final Actual Final Budget

REVENUES
Intergovernmental 35,000$ 35,000 $ 28,296 $ (6,704) $ Use of money and property 965 965 - (965) Other revenues 30,000 30,000 34,254 4,254 Total revenues 65,965 65,965 62,550 (3,415)

EXPENDITURES
Current:

Community development 245,871 245,871 240,704 5,167 Total expenditures 245,871 245,871 240,704 5,167 Excess (deficiency) of revenues over expenditures (179,906) (179,906) (178,154) 1,752

OTHER FINANCING SOURCES (USES)
Transfers in 179,906 179,906 178,154 (1,752) Total other financing sources (uses) 179,906 179,906 178,154 (1,752) 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, 2025
126
158
Variance with
Original Final Actual Final Budget

REVENUES
Use of money and property 40,450$ 40,450 $ 21,967 $ (18,483) $ Total revenues 40,450 40,450 21,967 (18,483)

EXPENDITURES
Current:

Community development 65,061 65,061 59,827 5,234 Total expenditures 65,061 65,061 59,827 5,234 Excess (deficiency) of revenues over expenditures (24,611) (24,611) (37,860) (13,249) Net change in fund balances (24,611) (24,611) (37,860) (13,249) Fund balances - beginning 4,101,147 4,101,147 4,101,147 - Fund balances - ending 4,076,536$ 4,076,536$ 4,063,287$ (13,249)$ 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, 2025
127
159
Variance with
Original Final Actual Final Budget

REVENUES
Use of money and property 40,064$ 40,064 $ 58,145 $ 18,081 $ Total revenues 40,064 40,064 58,145 18,081

EXPENDITURES
Current:

Community development 29,064 30,264 29,229 1,035 Total expenditures 29,064 30,264 29,229 1,035 Excess (deficiency) of revenues over expenditures 11,000 9,800 28,916 19,116 Net change in fund balances 11,000 9,800 28,916 19,116 Fund balances - beginning 265,021 265,021 265,021 - Fund balances - ending 276,021$ 274,821 $ 293,937 $ 19,116 $ 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, 2025
128
160
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.

NON-MAJOR CAPITAL

PROJECT FUNDS

ANNUAL COMPREHENSIVE FINANCIAL REPORT
161
Capital
Improvement
Fund
Torrance
Public Property
Financing
Capital Project
Fund
Total Nonmajor
Capital Projects
Funds
Assets
Pooled cash and investments 22,842,209$ - $ 22,842,209$ Cash and cash equivalents with fiscal agents - 3,756,770 3,756,770 Accounts receivable 300 - 300 Prepaids 5,500 - 5,500 Total assets 22,848,009$ 3,756,770 $ 26,604,779 $ Liabilities and Fund Balances
Liabilities:

Accounts payable 633,888$ 339,415 $ 973,303 $ Accounts payable - contract retention 34,262 63,777 98,039 Accrued liabilities 559,203 - 559,203 Due to other funds - 1,844,467 1,844,467 Deposits and guarantees 158,056 - 158,056 Total liabilities 1,385,409 2,247,659 3,633,068 Fund balances:

Nonspendable
Prepaids 5,500 - 5,500 Assigned to capital projects 21,457,100 1,509,111 22,966,211 Total fund balances 21,462,600 1,509,111 22,971,711 Total liabilities and fund balances 22,848,009$ 3,756,770 $ 26,604,779 $

CITY OF TORRANCE, CALIFORNIA
Combining Balance Sheet
Nonmajor Capital Project Funds
June 30, 2025
129
162
Capital
Improvement
Fund
Torrance
Public Property
Financing
Capital Project
Fund
Total Nonmajor Capital
Projects Funds
Revenues:

Use of money and property 4,200$ 167,885$ 172,085$ Other 340,000 - 340,000 Total revenues 344,200 167,885 512,085 Expenditures:

General government 4,336,266 - 4,336,266 Public safety 241,661 2,246,186 2,487,847 Public works 715,094 - 715,094 Culture and recreation 309,476 - 309,476 Community development 621,109 - 621,109 Total expenditures 6,223,606 2,246,186 8,469,792 Excess (deficiency) of revenues
over (under) expenditures (5,879,406) (2,078,301) (7,957,707) Other financing sources:

SBITA 80,716 - 80,716 Transfers in 12,995,731 - 12,995,731 Total other financing sources 13,076,447 - 13,076,447 Net change in fund balances 7,197,041 (2,078,301) 5,118,740 Fund balances, July 1, 2024 14,265,559 3,587,412 17,852,971 Fund balances, June 30, 2025 21,462,600$ 1,509,111$ 22,971,711$

CITY OF TORRANCE, CALIFORNIA
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Capital Project Funds
Year ended June 30, 2025
130
163
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

NON-MAJOR DEBT

SERVICE FUND
164

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131
165
Torrance
Public Property
Financing
Debt Service
Fund
Total
Nonmajor
Debt Service
Fund
Assets
Cash and cash equivalents with fiscal agents 1,145$ 1,145$ Total assets 1,145$ 1,145$
Liabilities and Fund Balances
Liabilities -$ -$
Total liabilities - -
Fund balances:

Restricted - debt service 1,145 1,145
Total fund balances 1,145 1,145
Total liabilities and fund balances 1,145$ 1,145$

CITY OF TORRANCE, CALIFORNIA
Combining Balance Sheet
Nonmajor Debt Service Fund
June 30, 2025
132
166
Torrance
Public Property
Financing
Debt Service
Fund
Total
Nonmajor
Debt Service
Fund
Revenues:

Use of money and property $ 23,101,675 $ 23,101,675 Total revenues 23,101,675 23,101,675 Expenditures:

Debt Service:

Principal retirement 10,625,000 10,625,000 Interest and fiscal charges 12,482,338 12,482,338 Total expenditures 23,107,338 23,107,338 Excess (deficiency) of revenues
over (under) expenditures (5,663) (5,663) Net change in fund balances (5,663) (5,663) Fund balances, July 1, 2024 6,808 6,808 Fund balances, June 30, 2025 $ 1,145 $ 1,145

CITY OF TORRANCE, CALIFORNIA
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Debt Service Fund
Year ended June 30, 2025
133
167
Variance with
Original Final Actual Final Budget

REVENUES
Use of money and property 23,107,338$ 23,107,338 $ 23,101,675 $ (5,663)$ Total revenues 23,107,338 23,107,338 23,101,675 (5,663)

EXPENDITURES
Debt service:

Principal retirement 10,625,000 10,625,000 10,625,000 - Interest and fiscal charges 12,482,338 12,482,338 12,482,338 - Total expenditures 23,107,338 23,107,338 23,107,338 - Excess (deficiency) of revenues over expenditures - - (5,663) (5,663) Net change in fund balances - - (5,663) (5,663) Fund balances - beginning 6,808 6,808 6,808 - Fund balances - ending 6,808$ 6,808$ 1,145$ (5,663)$ 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, 2025
134
168
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

NON-MAJOR ENTERPRISE
FUND
169

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135
170
Sanitation
Fund
Total
Nonmajor
Enterprise
Fund
Assets and Deferred Outflows of Resources
Current assets:

Pooled cash and investments 11,594,534$ 11,594,534$ Accounts receivable 4,556,813 4,556,813
Accrued interest receivable 89,988 89,988 Due from other governments 99,405 99,405 Prepaids 37,622 37,622
Total current assets 16,378,362 16,378,362 Noncurrent assets:

Capital assets, net 4,384,422 4,384,422
Total noncurrent assets 4,384,422 4,384,422 Deferred outflows of resources:

Deferred pension amounts 1,061,793 1,061,793 Deferred OPEB amounts 308,081 308,081
Total deferred outflows of resources 1,369,874 1,369,874 Total Assets and Deferred Outflows of Resources 22,132,658 22,132,658 Liabilities and Deferred Inflows of Resources
Current liabilities:

Accounts payable 555,764 555,764
Accrued interest payable 30,610 30,610 Accrued liabilities 1,158,714 1,158,714
Compensated absences payable - current 73,354 73,354 Total current liabilities 1,818,442 1,818,442 Noncurrent liabilities:

Compensated absences payable - long term 208,778 208,778 Total pension liability 3,085,909 3,085,909 Total OPEB liability 958,883 958,883
Total noncurrent liabilities 4,253,570 4,253,570 Deferred inflows of resources:

Deferred pension amounts 20,167 20,167 Deferred OPEB amounts 38,713 38,713
Total deferred inflows of resources 58,880
58,880
Total Liabilities and Deferred Inflows of Resources 6,130,892 6,130,892 Net Position
Net investment in capital assets 4,384,422 4,384,422 Unrestricted 11,617,344 11,617,344
Total Net Position 16,001,766$ 16,001,766 $

CITY OF TORRANCE, CALIFORNIA
Combining Statement of Net Position
Nonmajor Enterprise Fund
June 30, 2025
136
171
Sanitation
Fund
Total
Nonmajor
Enterprise
Fund
Operating revenues:

Charges for services 17,113,176$ 17,113,176 $ Other 714,646 714,646
Total operating revenues 17,827,822 17,827,822 Operating expenses:

Salaries and employee benefits 4,604,385 4,604,385 Services and supplies 3,228,409 3,228,409 Other professional services 3,899,264 3,899,264 Depreciation and amortization 792,152 792,152 Insurance and claims 3,640 3,640 City charges 1,970,147 1,970,147
Other 78,904 78,904
Total operating expenses 14,576,901 14,576,901 Operating income 3,250,921 3,250,921
Nonoperating revenues:

Investment earnings 405,642 405,642 Gain (loss) on sale of capital assets 5,250 5,250 Grants 188,508 188,508
Total nonoperating revenues 599,400 599,400 Income before transfers 3,850,321 3,850,321 Transfers in 382,321 382,321
Transfers out (1,281,599) (1,281,599)
Change in net position 2,951,043 2,951,043 Total net position - July 1, 2024 (as previously presented) 13,116,099 13,116,099 Restatement for change in accounting principle (note 19) (65,376) (65,376) Total net position - June 30, 2025 16,001,766$ 16,001,766 $

CITY OF TORRANCE, CALIFORNIA
Combining Statement of Revenues, Expenses and Changes in Fund Net Position Nonmajor Enterprise Fund
Year ended June 30, 2025
137
172
Sanitation
Fund
Total
Nonmajor
Enterprise
Fund
Cash flows from operating activities:

Receipts from customers 16,716,411$ 16,716,411$ Cash payments to suppliers for goods and services (7,998,195) (7,998,195) Cash payments to employees for services (4,182,833) (4,182,833) Other receipts 714,646 714,646
Net cash provided by operating activities 5,250,029 5,250,029 Cash flows from noncapital financing activities:

Cash received from noncapital grants and subsidies 188,508 188,508 Cash received from other funds 382,321 382,321 Cash paid to other funds (1,281,599) (1,281,599) Net cash provided by noncapital financing activities (710,770) (710,770) Cash flows from capital financing activities:

Cash payments for capital additions (1,524,685) (1,524,685) Proceeds from sale of capital assets 5,250 5,250 Net cash used in capital financing activities (1,519,435) (1,519,435) Cash flows from investing activities:

Cash received from interest on investments 402,806 402,806 Cash provided by investing activities 402,806 402,806 Net increase in cash, restricted cash and
cash equivalents 3,422,630 3,422,630
Cash and cash equivalents, July 1, 2024 8,171,904 8,171,904 Cash and cash equivalents, June 30, 2025 11,594,534$ 11,594,534$ Reconciliation of operating income to net cash
provided by operating activities:

Operating income 3,250,921$ 3,250,921
Adjustments to reconcile operating income to net cash provided by operating activities:

Depreciation and amortization 792,152 792,152 Bad debt expense 32,283 32,283
Changes in assets and liabilities:

Accounts receivable (331,500) (331,500) Due from other governments (97,547) (97,547) Prepaids and other assets 3,944
3,944
Accounts payable 122,780 122,780
Accrued salaries and benefits (53,444) (53,444) Other accrued liabilities 1,055,443 1,055,443 Deferred outflows related to pensions 915,574 915,574 Deferred outflows related to OPEB 56,121 56,121 Total pension liability (448,320) (448,320) Total OPEB liability 33,673 33,673 Deferred inflows related to pensions (78,435) (78,435) Deferred inflows related to OPEB (3,616) (3,616) Net cash provided by operating activities 5,250,029$ 5,250,029$

CITY OF TORRANCE, CALIFORNIA
Combining Statement of Cash Flows
Nonmajor Enterprise Fund
Year ended June 30, 2025
138
173
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.

ANNUAL COMPREHENSIVE FINANCIAL REPORT

INTERNAL SERVICE FUNDS
174

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139
175
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 26,522,199$ 26,991,167 $ 5,510,905 $ 59,024,271 $ Cash and cash equivalents with fiscal agents 677,419 - - 677,419 Accounts receivable 308,271 200,720 5,467,265 5,976,256 Accrued interest receivable - - 44,185 44,185 Prepaids - 212,668 - 212,668 Inventory - 1,462,223 - 1,462,223 Total current assets 27,507,889 28,866,778 11,022,355 67,397,022 Noncurrent assets:

Capital assets, net - 24,778,471 - 24,778,471 Total noncurrent assets - 24,778,471 - 24,778,471 Deferred outflows of resources:

Deferred pension amounts 74,391 888,216 - 962,607 Deferred OPEB amounts 20,538 267,005 - 287,543 Total deferred outflows of resources 94,929 1,155,221 - 1,250,150 Total Assets and Deferred Outflows of Resources 27,602,818 54,800,470 11,022,355 93,425,643 Liabilities and Deferred Inflows of Resources
Current liabilities:

Accounts payable 718,575 888,582 - 1,607,157 Compensated absences payable - 475,654 8,365,519 8,841,173 Accrued interest payable - 4,738 - 4,738 Accrued liabilities 10,939,831 146,533 - 11,086,364 SBITA liablity - current - 83,355 - 83,355 Accrued liability for self-insurance claims - current 13,839,290 - - 13,839,290 Total current liabilities 25,497,696 1,598,862 8,365,519 35,462,077 Noncurrent liabilities:

SBITA liability - long term - 273,890 - 273,890 Accrued liability for self-insurance claims - long-term 54,094,993 - - 54,094,993 Total pension liability 200,127 2,618,945 - 2,819,072 Total OPEB liability 63,926 831,032 - 894,958 Total noncurrent liabilities 54,359,046 3,723,867 - 58,082,913 Deferred inflows of resources:

Deferred pension amounts 977 17,887 - 18,864 Deferred OPEB amounts 2,581 33,551 - 36,132 Total deferred inflows of resources 3,558 51,438 - 54,996 Total Liabilities and Deferred Inflows of Resources 79,860,300 5,374,167 8,365,519 93,599,986 Net Position
Net position:

Net investment in capital assets - 24,778,471 - 24,778,471 Unrestricted (52,257,482) 24,647,832 2,656,836 (24,952,814) Total Net Position (52,257,482)$ 49,426,303$ 2,656,836$ (174,343)$

CITY OF TORRANCE, CALIFORNIA
Combining Statement of Net Position
Internal Service Funds
June 30, 2025
140
176
Self-Insurance
Fund
Fleet Services
Fund
Postemployment/
Comp Absences
Fund
Total
Internal Service
Funds
Operating revenues:

Charges for services 23,643,920$ 12,351,946 $ - $ 35,995,866$ Other 330,808 255,983 - 586,791 Total operating revenues 23,974,728 12,607,929 - 36,582,657 Operating expenses:

Salaries and employee benefits 919,310 4,227,169 - 5,146,479 Services and supplies 4,564 658,007 - 662,571 Other professional services 428,800 181,502 - 610,302 Insurance and claims 22,596,159 - - 22,596,159 Depreciation and amortization - 2,502,058 - 2,502,058 City charges 222,833 2,203,139 - 2,425,972 Other 4,296 22,107 - 26,403 Total operating expenses 24,175,962 9,793,982 - 33,969,944 Operating income (loss) (201,234) 2,813,947 - 2,612,713 Nonoperating revenues (expenses):

Investment earnings - 844,717 409,476 1,254,193 Gain on sale of capital assets - 232,604 - 232,604 Total nonoperating revenues (expenses) - 1,077,321 409,476 1,486,797 Net income (loss) before transfers (201,234) 3,891,268 409,476 4,099,510
Transfers in - - - - Transfers out - (18,459) - (18,459) Change in net position (201,234) 3,872,809 409,476 4,081,051 Net position, July 1, 2024 (as previously presented) (52,056,248) 45,664,433 783,685 (5,608,130) Restatement for change in accounting principle (note 19) - (110,939) 1,463,675 1,352,736 Net position, June 30, 2025 (52,257,482)$ 49,426,303$ 2,656,836$ (174,343)$

CITY OF TORRANCE, CALIFORNIA
Combining Statement of Revenues, Expenses and Changes in Fund Net Position Internal Service Funds
Year ended June 30, 2025
141
177
Self Insurance
Fund
Fleet Services
Fund
Postemployment/
Comp Absences
Fund
Total
Internal Service
Funds
Cash flows from operating activities:

Receipts from customers 23,387,888$ 12,151,226$ (1,143,575)$ 34,395,539$ Cash payments to suppliers for goods and services (17,181,435) (2,378,971) (67,287) (19,627,693) Cash payments to employees for services (879,369) (3,825,522) 414,837 (4,290,054) Other receipts 330,808 255,983 - 586,791 Net cash provided by (used in) operating activities 5,657,892 6,202,716 (796,025) 11,064,583 Cash flows from noncapital financing activities:

Cash received from other funds - - - - Cash transfers paid to other funds - (18,459) - (18,459) Net cash provided by (used in) noncapital financing activities - (18,459) - (18,459) Cash flows from capital financing activities:

Cash payments for capital additions - (18,224,606) - (18,224,606) Proceeds from sale of capital assets - 232,604 - 232,604 Net cash provided by (used in) capital financing activities - (17,992,002) - (17,992,002) Cash flows from investing activities:

Cash received from interest on investments - 1,093,939 414,574 1,508,513 Net cash provided by (used in) investing activities - 1,093,939 414,574 1,508,513 Net increase (decrease) in cash, restricted cash and
cash equivalents 5,657,892 (10,713,806) (381,451) (5,437,365) Cash and cash equivalents, July 1, 2024 21,541,726 37,704,973 5,892,356 65,139,055 Cash and cash equivalents, June 30, 2025 27,199,618$ 26,991,167$ 5,510,905$ 59,701,690$ Reconciliation of cash and cash equivalents:

Pooled cash and investments 26,522,199$ 26,991,167$ 5,510,905$ 59,024,271$ Cash and cash equivalents with fiscal agents 677,419 - - 677,419 Total cash and cash equivalents 27,199,618$ 26,991,167$ 5,510,905$ 59,701,690$ Reconciliation of operating income to net cash provided by (used in) operating activities:

Operating income (201,234)$ 2,813,947$ -$ 2,612,713$ Adjustments to reconcile operating income to net
cash provided by (used in) operating activities:

Depreciation and amortization - 2,502,058 - 2,502,058 Changes in assets and liabilities:

Accounts receivable (256,032) (200,720) (1,143,575) (1,600,327) Prepaids and other assets - 132,294 - 132,294 Inventory - (3,434) - (3,434) Accounts payable 417,089 709,028 (67,287) 1,058,830 Accrued salaries and benefits 6,566 2,617 414,837 424,020 Other accrued liabilities 5,658,127 (152,104) - 5,506,023 Deferred outflows related to pension 64,093 766,021 - 830,114 Deferred outflows related to OPEB 3,742 48,637 - 52,379 Total pension liability (30,397) (377,395) - (407,792) Total OPEB liability 2,245 29,183 - 31,428 Deferred inflows related to pension (6,066) (64,282) - (70,348) Deferred inflows related to OPEB (241) (3,134) - (3,375) Net cash provided by (used in) operating activities 5,657,892$ 6,202,716 $ (796,025) $ 11,064,583 $

CITY OF TORRANCE, CALIFORNIA
Combining Statement of Cash Flows
Internal Service Funds
Year ended June 30, 2025
142
178
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

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.

ANNUAL COMPREHENSIVE FINANCIAL REPORT

CUSTODIAL FUNDS
179
Area G Citizen
Corps Program
Fund
Property
Room
Evidence Fund
Interoperability
Network of
the South Bay
Fund
Total
Custodial
Funds
Assets
Pooled cash and investments -$ 1,443,990$ 1,629,427 $ 3,073,417 $ Accounts receivable 602,158 - - 602,158 Accrued interest receivable - - 8,345 8,345 Prepaids 101,826 - - 101,826 Capital assets, net - - 199,727 199,727 Total assets 703,984 1,443,990 1,837,499 3,985,473 Liabilities
Accounts payable 16,878 600 - 17,478 Advances from City 79,157 - - 79,157 Total liabilities 96,035 600 - 96,635 Net Position
Restricted for individuals and organizations 607,949 1,443,390 1,837,499 3,888,838 Total net position 607,949$ 1,443,390$ 1,837,499$ 3,888,838$

CITY OF TORRANCE, CALIFORNIA
Combining Statement of Fiduciary Net Position - Custodial Funds June 30, 2025
143
180
Area G Citizen
Corps Program
Fund
Property
Room
Evidence Fund
Interoperability
Network of
the South Bay
Fund
Total
Custodial
Funds
Additions
Contributions 659,584$ -$ 1,245,498$ 1,905,082$ Fees - - 61,736 61,736 Use of money and property - - 60,675 60,675 Other 1,572 12,593 - 14,165 Total additions 661,156 12,593 1,367,909 2,041,658 Deductions
Salaries and employee benefits 221,762 - - 221,762 Services and supplies 5,726 - - 5,726 Other professional services 378,907 - 383,397 762,304 Insurance and claims 7,867 - 36,197 44,064 Depreciation and amortization - - 100,118 100,118 Membership fees 363 - 78,647 79,010 Total deductions 614,625 - 598,359 1,212,984 Change in net position 46,531 12,593 769,550 828,674 Net position, July 1, 2024 561,418 1,430,797 1,067,949 3,060,164 Net position, June 30, 2025 607,949$ 1,443,390$ 1,837,499$ 3,888,838$

CITY OF TORRANCE, CALIFORNIA
Combining Statement of Changes in Fiduciary Net Position - Custodial Funds Year ended June 30, 2025
144
181

ANNUAL COMPREHENSIVE FINANCIAL REPORT

STATISTICAL SECTION
(Not covered by Independent Auditors’ Report)
182
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.
147
Revenue Capacity Information:

Intended to assist users in unders tanding and assessing the factors affecting a government's ability to generate its own revenue. 152
Debt Capacity Information:

Intended to assist users in understanding and assessing a government's debt burden and its ability to issue additional debt. 159
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.
164
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.
166
145
183
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146
184
City of Torrance
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts in thousands)
Financial Trends
Exhibit 1
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
Governmental activities
Net investment in capital assets $ 353,069 $ 330,710 $ 326,844 $ 310,909 $ 294,482 $ 286,532 $ 279,740 $ 272,707 $ 269,819 $ 272,391 Restricted 123,922 105,050 60,773 52,988 41,942 42,561 46,401 45,389 45,987 49,306 Unrestricted (423,863) (403,843) (393,476) (441,505) (498,999) (432,413) (372,163) (354,180) (280,023) (295,513) Total governmental activities net position $ 53,128 $ 31,917 (5,859)$ (77,608)$ (162,575)$ (103,320)$ (46,022)$ (36,084)$ $ 35,783 $ 26,184 Business-type activities
Net investment in capital assets $ 160,264 $ 167,132 $ 163,294 $ 158,220 $ 164,410 $ 155,891 $ 148,541 $ 153,167 $ 156,096 $ 157,593 Restricted 31,542 32,296 31,197 21,482 - - - - - - Unrestricted 117,446 87,703 78,638 67,823 47,888 (18,914) (24,541) (21,247) (7,868) (8,181) Total business-type activities net position $ 309,252 $ 287,131 $ 273,129 $ 247,525 $ 212,298 $ 136,977 $ 124,000 $ 131,920 $ 148,228 $ 149,412 Primary government
Net investment in capital assets $ 513,333 $ 497,842 $ 490,138 $ 469,129 $ 458,892 $ 442,423 $ 428,281 $ 425,874 $ 425,915 $ 429,984 Restricted 155,464 137,346 91,970 74,470 41,942 42,561 46,401 45,389 45,987 49,306 Unrestricted (306,417) (316,140) (314,838) (373,682) (451,111) (451,327) (396,704) (375,427) (287,891) (303,694) Total primary government net position $ 362,380 $ 319,048 $ 267,270 $ 169,917 $ 49,723 $ 33,657 $ 77,978 $ 95,836 $ 184,011 $ 175,596 Fiscal Year
147
185
City of Torrance
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts in thousands)
Financial Trends
Exhibit 2
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
Expenses
Governmental activities:

General government $ 50,593 $ 44,824 $ 38,888 $ 28,428 $ 27,553 $ 37,573 $ 35,459 $ 34,122 $ 27,838 $ 31,259 Public safety 200,142 183,968 154,605 124,495 156,247 144,525 121,502 120,281 114,081 99,020 Public works 46,988 31,249 31,733 24,239 27,885 35,308 29,536 29,408 26,807 28,259 Culture and recreation 27,687 26,074 22,162 19,754 26,142 21,947 18,502 20,100 17,388 15,373 Community development 20,849 18,824 15,476 13,509 11,134 18,096 16,896 16,384 10,621 10,433 Interest on long-term debt 12,947 12,984 13,007 15,615 10,633 2,533 2,579 2,619 2,826 2,664 Total governmental activities expenses 359,206 317,923 275,871 226,040 259,594 259,982 224,474 222,914 199,561 187,008 Business-type activities:

Municipal Airport 8,718 7,151 3,848 2,612 3,223 3,386 3,374 3,542 3,425 3,433 Transit System 39,665 34,263 29,121 26,684 25,640 30,833 39,162 29,574 27,702 24,156 Water 52,142 48,543 46,405 41,263 41,465 39,090 43,294 38,323 35,447 31,843 Sewer 4,837 4,588 4,750 4,543 5,666 4,991 5,264 5,892 5,086 5,509 Sanitation 14,577 15,672 12,477 11,611 13,015 12,873 12,369 16,722 11,620 10,856 Cultural Arts Center - - - - - 2,252 2,300 2,357 2,119 1,971 Parks and Recreation - - - - - 7,099 7,602 7,456 7,080 6,864 Emergency Medical Services - - - - - 16,854 13,824 14,154 12,422 11,141 Total business-type activities expenses 119,939 110,217 96,601 86,713 89,009 117,378 127,189 118,020 104,901 95,773 Total primary government expenses $ 479,145 $ 428,140 $ 372,472 $ 312,753 $ 348,603 $ 377,360 $ 351,663 $ 340,934 $ 304,462 $ 282,781 Program Revenues
Governmental activities:

Charges for services:

General government $ 14,998 $ 2,383 $ 2,489 $ 1,867 $ 890 $ 1,000 $ 1,303 $ 495 $ 414 $ 464 Public safety 13,330 12,066 9,284 8,625 3,704 2,037 2,520 8,576 8,475 8,192 Public works 1,144 1,628 501 426 216 216 631 1,819 1,164 926 Culture and recreation 7,321 5,706 5,211 4,364 2,093 600 635 577 641 628 Community development 11,575 11,984 10,955 10,040 8,777 6,208 7,272 - - - Operating grants and contributions 13,826 13,618 11,656 30,483 29,051 17,309 17,226 18,241 17,279 22,097 Capital grants and contributions 37,186 30,924 37,841 29,256 23,246 13,040 9,929 5,248 6,178 7,787 Total governmental activities program revenues 99,380 78,309 77,937 85,061 67,977 40,410 39,516 34,956 34,151 40,094 Business-type activities:

Charges for services:

Municipal Airport 38,444
18,261 22,782 15,663 15,497 14,175 14,173 13,469 12,836 12,754 Transit System 1,561 1,211 960 540 63 3,175 2,743 2,740 2,861 3,165 Water 57,181 53,974 54,255 51,521 49,198 45,553 42,544 41,439 36,848 33,447 Sewer 7,371 6,907 5,899 6,105 6,025 5,712 5,676 5,750 3,783 2,417 Sanitation 17,828 15,903 13,699 13,941 12,920 12,748 12,793 12,368 11,363 11,475 Cultural Arts Center - - - - - 782 1,195 1,186 1,018 934 Parks and Recreation - - - - - 3,600 4,977 4,731 4,635 4,586 Emergency Medical Services - - - - - 1,493 1,602 1,477 1,093 1,244 Operating grants and contributions 30,839 25,971 31,544 32,887 32,285 24,588 22,648 18,376 18,809 18,462 Capital grants and contributions 651 62 810 942 2,031 2,457 1,608 293 1,081 14,708 Total business-type activities program revenues 153,875 122,289 129,949 121,599 118,019 114,283 109,959 101,829 94,327 103,192 Total primary government program revenues $ 253,255 $ 200,598 $ 207,886 $ 206,660 $ 185,996 $ 154,693 $ 149,475 $ 136,785 $ 128,478 $ 143,286 Fiscal Year
148
186
City of Torrance
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts in thousands)
Financial Trends
Exhibit 2
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
Fiscal Year
Net (expense)/revenue
Governmental activities (259,826)$ (239,614)$ (197,934)$ (140,979)$ (191,617)$ (219,572)$ (184,958)$ (187,958)$ (165,410)$ (146,914)$ Business-type activities 33,936 12,072 33,348 34,886 29,010 (3,095) (17,230) (16,191) (10,574) 7,419 Total primary government net expense (225,890)$ (227,542)$ (164,586)$ (106,093)$ (162,607)$ (222,667)$ (202,188)$ (204,149)$ (175,984)$ (139,495)$ General Revenues and Other Changes in
Net Position
Governmental activities:

Taxes
Property taxes $ 67,399 $ 64,183 $ 61,161 $ 58,219 $ 55,037 $ 52,185 $ 51,984 $ 49,312 $ 46,967 $ 54,348 Sales taxes 82,693 85,531 78,590 61,556 52,938 48,332 49,217 47,178 50,133 39,378 Other taxes 73,147 82,886 83,119 73,897 61,753 58,515 65,747 64,371 63,485 60,932 Investment earnings 40,919 35,410 27,927 19,299 4,389 7,310 7,935 4,763 5,001 6,554 Gain on sale of property - - - - - - - - 1,552 - Loss on disposal of SBITA - (16) - - - - - - - - Motor vehicle tax (unrestricted) 231 181 151 168 107 117 72 77 66 60 Other general revenues 650 830 4,896 5,170 4,298 4,845 7,651 5,394 4,560 4,898 Transfers 22,368 8,385 13,840 7,982 (4,710) (9,113) (7,586) (7,477) (7,848) (17,996) Total governmental activities 287,407 277,390 269,684 226,291 173,812 162,191 175,020 163,618 163,916 148,174 Business-type activities:

Investment earnings 11,090 9,735 6,092 3,911 327 1,690 1,521 405 613 811 Other general revenues 67 579 3 40 78 303 204 294 247 212 Transfers (22,368) (8,385) (13,840) (7,982) 4,710 9,113 7,586 7,477 7,848 17,996

Total business-type activities (11,211) 1,929 (7,745) (4,031) 5,115 11,106 9,311 8,176 8,708 19,019 Total primary government general revenues $ 276,196 $ 279,319 $ 261,939 $ 222,260 $ 178,927 $ 173,297 $ 184,331 $ 171,794 $ 172,624 $ 167,193 Change in Net Position
Governmental activities $ 27,581 $ 37,776 $ 71,750 $ 85,312 (17,805)$ (57,381)$ (9,938)$ (24,340)$ (1,494)$ $ 1,260 Business-type activities 22,725 14,001 25,603 30,855 34,125 8,011 (7,919) (8,015) (1,866) 26,438 Total primary government $ 50,306 $ 51,777 $ 97,353 $ 116,167 $ 16,320 (49,370)$ (17,857)$ (32,355)$ (3,360)$ $ 27,698 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. 149
187
City of Torrance
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
(amounts in thousands)
Financial Trends
Exhibit 3
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
General fund
Reserved $ - $ - $ - $ - $ - $ - $ - $ - $ - Unreserved - - - - - - - - - Nonspendable2 1,823 2,661 2,145 2,094 2,718 3,395 4,621 4,814 15,485 21,607 Restricted 44,225 31,040 7,025 4,638 2,842 1,333 1,166 788 465 688 Assigned 81,100 7,684 5,849 5,483 3,768 5,498 7,612 14,809 14,831 15,895 Unassigned 23,652 78,750 63,420 44,727 22,633 581 16,725 16,501 24,079 21,101 Total general fund $ 150,800 $ 120,135 $ 78,439 $ 56,942 $ 31,961 $ 10,807 $ 30,124 $ 36,912 $ 54,860 $ 59,291 All other governmental funds
Reserved $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Unreserved, reported in:

Special revenue funds - - - - - - - - - - Capital project funds - - - - - - - - - - Debt service fund - - - - - - - - - - Nonspendable 18 580 618 607 80 946 4 - - - Restricted3 79,792 74,170 53,190 47,732 39,753 41,477 42,326 40,422 40,729 43,921 Assigned 22,966 17,853 15,277 13,462 14,686 20,061 20,877 22,399 22,887 19,073 Unassigned3 - (774) (75) - - (2,747) - - - - Total all other governmental funds $ 102,776 $ 91,829 $ 69,010 $ 61,801 $ 54,519 $ 59,737 $ 63,207 $ 62,821 $ 63,616 $ 62,994 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
150
188
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
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
Revenues
Taxes $ 223,238 $ 232,600 $ 222,870 $ 193,672 $ 172,217 $ 162,315 $ 168,084 $ 162,636 $ 161,817 $ 156,103 Licenses, fees and permits 20,738 7,337 6,512 6,763 5,655 4,150 5,290 4,106 4,544 3,814 Fine, forfeitures and penalties 2,505 969 918 1,147 668 1,339 1,677 1,019 1,534 1,906 Investment earnings 40,986 36,182 28,753 20,726 4,791 9,180 9,355 6,154 6,082 7,893 Intergovernmental 51,243 44,572 49,575 60,012 50,525 27,073 26,525 23,265 22,897 28,743 Charges for current services 25,125 25,461 21,010 19,058 10,745 5,959 6,304 6,736 5,750 5,392 Other 642 981 4,969 1,798 3,928 1,155 4,616 2,000 1,282 2,280 Total revenues 364,477 348,102 334,607 303,176 248,529 211,171 221,851 205,916 203,906 206,131 Expenditures
General government 43,368 36,984 32,231 28,348 41,959 23,023 24,814 22,344 20,387 19,487 Public safety 173,949 151,862 153,790 138,928 413,044 121,693 116,066 109,485 112,160 105,319 Public works 52,530 29,980 47,524 40,894 44,779 32,749 30,526 29,129 30,859 31,958 Culture and recreation 26,456 23,694 21,633 21,812 31,869 17,996 17,657 17,830 17,066 17,115 Nondepartmental 13,565 10,343 5,958 2,151 2,927 5,601 7,619 5,642 6,423 8,656 Community development 19,963 17,276 16,266 15,712 23,765 16,011 15,334 14,725 10,619 10,501 Capital outlay1 - - - - - - - - - - Debt service
Principal retirement2 10,625 9,955 9,330 2,465 435 1,300 1,250 1,215 1,165 1,125 Interest and fiscal charges 12,482 12,638 12,768 17,838 1,606 2,431 2,477 2,516 2,522 2,599 Other 223 218 213 - 4,676 - - - 1,620 - Total expenditures 353,161 292,950 299,713 268,148 565,060 220,804 215,743 202,886 202,821 196,760 Excess of revenues
over (under) expenditures 11,316 55,152 34,894 35,028 (316,531) (9,633) 6,108 3,030 1,085 9,371 Other financing sources (uses)
Transfers in 42,947 22,421 29,217 16,094 356,749 17,249 15,665 20,649 22,980 22,017 Transfers out (20,560) (18,209) (40,741) (20,074) (375,288) (30,630) (26,391) (31,668) (35,910) (32,889) SBITA 7,945 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) 30,332 9,362 (6,188) (2,420) 332,669 (13,381) (10,726) (11,019) (4,894) (10,872) Extraordinary gain5 - - - - - - - - - - Net change in fund balances $ 41,648 $ 64,514 $ 28,706 $ 32,608 $ 16,138 (23,014)$ (4,618)$ (7,989)$ (3,809)$ (1,501)$ Debt service as a percentage of
noncapital expenditures 6.9% 8.1% 8.3% 8.6% 0.4% 1.8% 1.9% 2.0% 2.0% 2.1% 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
151
189
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:
2025 36,976,952$ 625,121 $ 37,602,073 $ $ - $ - $ - 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 - - - Personal Property:
2025 211,015$ 919,039$ 1,130,054$ $ - $ - $ - 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 - - - Total:
2025 37,187,967$ 1,544,160$ 38,732,127$ $ - $ - $ - 0.1526% 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% 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
152
190
City of Torrance
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
(Rate per $100 of assessed value)
Revenue Capacity
Exhibit 2
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
City Direct Rates:

City basic rate 0.1526 0.1529 0.1529 0.1531 0.1528 0.1529 0.1518 0.1506 0.1507 0.1508 Redevelopment Agency¹ - - - - - - - - - - Total City Direct Rate 0.1526 0.1529 0.1529 0.1531 0.1528 0.1529 0.1518 0.1506 0.1507 0.1508 Overlapping Rates:

Metropolitan Water District 0.0070 0.0070 0.0035 0.0035 0.0035 0.0035 0.0035 0.0035 0.0035 0.0035 Torrance Unified School District 0.4815 0.4820 0.4914 0.4961 0.4894 0.4989 0.5020 0.4940 0.4913 0.4903 Community College 0.0210 0.0210 0.0230 0.0226 0.0236 0.0216 0.0216 0.0222 0.0229 0.0174 County of Los Angeles 0.2406 0.2405 0.2405 0.2406 0.2401 0.2406 0.2403 0.2390 0.2394 0.2402 Successor Agency¹ 0.1414 0.1406 0.1401 0.1389 0.1396 0.1369 0.1344 0.1388 0.1356 0.1331 Special Districts 0.0656 0.0657 0.0658 0.0657 0.0657 0.0663 0.0675 0.0676 0.0686 0.0691 Total Direct Rate 1.1097 1.1097 1.0942 1.1205 1.1147 1.1207 1.1211 1.1157 1.1120 1.1044 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 153
191
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 987,986,236 $ 1 2.55% 447,333,570$ 3 1.73% Torrance Refining Company 792,979,554 2 2.05%
TI Commerce Center 413,571,713 3 1.07%
Rexford Industrial 3100 Lomita Blvd 345,260,119 4 0.89% Torrance IE Property Owner 173,155,200 5 0.45% CLPF Anza LP 135,312,503 6 0.35%
Allied Signal Inc. 128,977,552 7 0.33% 109,462,121 6 0.42% RREF II Pacific Center LLC 119,081,658 8 0.31% California Water Service Company 104,967,500 9 0.27% CLPF Vista North LP 102,246,133 10 0.26% 0.00% Exxon Mobil Oil Corporation 1,407,927,873$ 1 5.46%
Toyota Motor Sales/Credit Corp 529,776,433 2 2.05% American Honda Motor Company Inc. 308,488,677 4 1.20% Macy's West Stores Inc./Federated Western Properties Inc. 195,219,929 5 0.76% Continental Skypark LLC 108,536,063 7 0.42%
XLD GROUP LLC / Marriott 81,450,703 8 0.32%
CTC Group Inc 70,703,917 9 0.27%
Robinson Helicopter Company 64,673,735 10 0.25% 3,303,538,168$ 8.53% 3,323,573,021$ 12.88%
Notes:

The amounts shown above 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 2024/25 & 2015/16 Secured & Unsecured Tax Rolls Taxpayer
2025
Taxable
Assessed
Value
Percent of
Total City
Taxable
Assessed
Value
Taxable
Assessed
Value
2016
Percent of
Total City
Taxable
Assessed
Value
154
192
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
2025 $ 48,383 $ 46,976 97.09% 116$ 47,092$ 97.33% 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% 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
155
193
City of Torrance Water Fund
Water Sold by Type of Customer
Last Ten Fiscal Years
(in thousands of cubic feet)
Revenue Capacity
Exhibit 5
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
Type of Customer:

Residential 369,483 346,902 341,953 380,937 424,835 370,278 382,206 396,034 381,521 371,531 Industrial 204,547 210,862 227,510 209,392 174,953 181,901 159,277 134,288 135,584 100,085 Commercial 115,455 146,920 126,375 161,636 160,497 158,787 164,730 154,406 164,215 158,623 Other 46,463 38,034 20,114 33,353 31,858 29,956 27,520 50,471 27,246 36,561 Total - Potable Water 735,947 742,718 715,952 785,318 792,143 740,922 733,733 735,199 708,566 666,800 Type of Customer:

Industrial 203,926 207,840 207,912 206,675 217,929 226,824 242,224 273,171 207,389 145,358 Other 13,088 10,165 10,934 14,696 14,671 11,694 14,218 17,944 13,553 15,905 Total - Recycled/Reclaimed Water 217,014 218,005 218,846 221,371 232,600 238,518 256,442 291,115 220,942 161,263 Type of Customer:

Residential 369,483 346,902 341,953 380,937 424,835 370,278 382,206 396,034 381,521 371,531 Industrial 408,473 418,702 435,422 416,067 392,882 408,725 401,501 407,459 342,973 245,443 Commercial 115,455 146,920 126,375 161,636 160,497 158,787 164,730 154,406 164,215 158,623 Other 59,551 48,199 31,048 48,049 46,529 41,650 41,738 68,415 40,799 52,466 Total Water 952,961 960,723 934,798 1,006,689 1,024,743 979,440 990,175 1,026,314 929,508 828,063 Source: Minol USA Usage Report for June 2016 through June 2025, Global Water Usage Report for 2016 through May 2025 Total
Fiscal Year
Potable
Recycled/Reclaimed
156
194
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
2025 7.48$ 7.48 $ 1,895.31 $ 589.39 $ 27.55 $ 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 Rate Per 100 Cubic Feet
Fiscal
Year Ended
June 30 Regular 4
Low
Income4
Torrance
Refining/
Exxon
Contract
Wholesale
Contract
Other -
Recycled
Regular
2025 5.37$ 3.65$ 6.04$ 3.30$ 4.46$ 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 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 157
195
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 18,212,507 $ 1 31.89% - - California Water Service - Wholesale 1,443,765 2 2.53% 898,056 2 2.68% City of Torrance 1,212,951 3 2.12% 708,135 3 2.12% Torrance Memorial Health System 565,104 4 0.99% 228,272 7 0.68% Torrance Unified School District 551,188 5 0.96% 609,752 4 1.82% New Horizons 320,632 6 0.56% 170,774 10 0.51% American Honda Motors 286,569 7 0.50% - - Summerwind HOA 235,850 8 0.41% 197,819 9 0.59% Honeywell International 227,641 9 0.40% 275,164 5 0.82% Health-Ade LLC 221,179 10 0.39% - - Exxon Mobil Oil Corporation 6,596,605 1 19.71%
Toyota Motor Sales USA Inc. 253,922 6 0.76%
Don Wilson Builders 223,167 8 0.67%
Total 23,277,386$ 40.75% 10,161,666 30.36% Source: Minol USA and Golden State Top Customer reports 20162025
158
196
Debt Capacity
Exhibit 1
2025 358,785 $ 19,798 $ $ - $ 698 -$ 14,721$ 394,002$ - $ 988 $ 15,236 $ 657 16,881$ 410,883$ 1.06% 2,868 2024 368,900 20,365 - 920 - 8,965 399,150 - 1,046 2,266 632 3,944 403,094 1.10% 2,818 2023 378,365 20,912 - 1,138 - 4,904 405,319 - 1,104 2,847 576 4,527 409,846 1.18% 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 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 - 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
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
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.

In 2025, the City's Public Works Department - Water Division entered into a construction installment sale agreement to finance a drinking water construction project. 159
197
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
2025 358,785 $ 19,798 $ 1 $ 378,582$ 1.01% 2,643 $ 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 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
160
198
City of Torrance
Direct and Overlapping Debt
June 30, 202

5 (in thousands of dollars)
Debt Capacity
Exhibit 3
City Assessed Valuation 38,732,127$
Overlapping Debt Repaid with Property Taxes:

Los Angeles County Flood Control District 0.988% 17,155$ 169$ El Camino Community College District 25.412% 480,045 121,989 Los Angeles Community College District 0.005% 4,919,505 246 Los Angeles Unified School District 0.006% 11,745,405 705 Palos Verdes Unified School District 0.014% 107,023 15 Torrance Unified School District 99.998% 388,756 388,748 Total overlapping debt to be repaid with property taxes 17,657,889 511,872 Overlapping Other Debt:

Los Angeles County General Fund Obligations 1.914% 3,036,637$ 58,121$ Los Angeles County Superintendent of Schools
Certificates of Participation 1.914% 2,332 45
Los Angeles Unified School District Certificates
of Participation 0.006% 225,010 14
Total overlapping other debt 3,263,979 58,180
Total overlapping debt 20,921,868$ 570,052
City direct debt:

Certificates of Participation (including premium) 19,798 Lease Revenue Bonds 358,785
Notes Payable 698
SBITA Liability 14,721
Total City direct debt 394,002
Total direct and overlapping debt 964,054$
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 6/30/25
Estimated
Share of
Overlapping
Debt
161
199
City of Torrance
Legal Debt Margin Information
Last Ten Fiscal Years
(in thousands of dollars)
Debt Capacity
Exhibit 4
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
Debt limit 1,452,455 $ 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 $ Total net debt applicable to limit 19,798 20,365 19,560 21,440 20,480 58,765 60,145 61,474 62,740 56,637 Legal debt margin 1,432,657 $ 1,354,484 $ 1,281,291 $ 1,215,855 $ 1,180,311 $ 1,142,026 $ 1,049,546 $ 994,720 $ 924,372 $ 910,593 $ Total net debt applicable to the limit as a
percentage of debt limit 1.4% 1.5% 1.5% 1.7% 1.7% 4.9% 5.4% 5.8% 6.4% 5.9% Legal Debt Margin Calculation for Fiscal Year 2025:

Assessed value 38,732,127 $
Debt limit (3.75% of assessed value) 1,452,455 $
Debt applicable to limit:

General government Certificates of
Participation 19,798
Legal debt margin 1,432,657 $
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
162
200
Debt Capacity
Exhibit 5
Tax
Principal Interest Increment Principal Interest
2025 2 $ 57,181 $ 49,368 $ 7,813 $ 1,369 $ 50 5.51 - - - - 2024 53,974 46,338 7,636 581 64 11.84 - - - - 2023 54,255 44,214 10,041 567 77 15.59 - - - - 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 - - - - - - - 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. 2 The City's Public Works Department - Water Division entered into a construction installment sale agreement to finance a drinking water construction project.

Tax Allocation Bonds
Coverage
Water Revenue Bonds/Installment Sale Agreement
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.

Water
Revenue
Less
Operating
Expenses
Net
Available
Revenue
City of Torrance
Pledged-Revenue Coverage
Last Ten Fiscal Years
(in thousands of dollars, except Coverage)
Coverage
Debt Service
Fiscal Year
Ended
June 30
Debt Service
163
201
City of Torrance
Demographic and Economic Indicators
Last Ten Calendar Years
Demographic and Economic
Exhibit 1
2024 143,261 39,431,263 $ 3,400,237 86,232 5.6% 2023 142,910 39,198,693 3,182,779 81,196 4.9% 2022 143,057 39,142,414 3,021,646 77,196 3.7% 2021 144,433 39,142,565 3,019,216 77,134 3.5% 2020 144,832 39,521,958 2,770,489 70,100 7.6% 2019 145,546 39,547,995 2,539,747 64,219 13.3% 2018 148,054 39,535,920 2,411,055 60,984 3.6% 2017 149,245 39,424,315 2,295,049 58,214 3.3% 2016 147,101 39,223,789 2,191,138 55,862 3.6% 2015 147,175 38,966,939 2,097,050 53,816 4.7% 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 the State of California.
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 Calendar
Year
Torrance
Population1
California State
Population1
Personal
Income
(in millions)2
Per Capita
Personal
Income2
Unemployment
Rate3
164
202
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 4,366 1 6.0% 3,400 2 4.6% Torrance Unified School District 2,695 2 3.7% 2,469 3 3.3% Providence Little Co of Mary Medical Center (4 locations) 2,533 3 3.5% 1,871 4 2.5% American Honda Motor Company 1,688 4 2.3% 1,757 5 2.4% City of Torrance 1,615 5 2.2% 1,651 6 2.2% Robinson Helicopter Company 1,196 6 1.6% 1,175 8 1.6% Honeywell International 868 7 1.2% 1,332 7 1.8% Moog Aircraft Group 696 8 1.0% - -
King's Hawaiian Bakery, West Inc. 633 9 0.9%
Arconic Fastening Systems (formerly Alcoa Fastening Systems & Rings) 605 10 0.8% 802 10 1.1% Toyota Motor Sales USA Inc. - - 3,790 1 5.1% Chemring Energetic Devices Inc. - - 1,114 9 1.5% Notes:
"Total Employment" as used above represents the total employment of all employers located within City limits.

Source: City of Torrance Finance Department
Muniservices, LLC
State of California Employment Development Department
Employer
2016
Number of
Employees
Percent of
Total
Employment
Number of
Employees
Percent of
Total
Employment
2025
165
203
City of Torrance
Full-time and Part-time City Employees
by Function
Last Ten Fiscal Years
Operating
Exhibit 1
Function 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 General government 234 225 217 210 239 254 277 281 275 275 Public safety 515 517 498 516 509 466 516 515 501 504 Public works 126 119 122 117 129 136 140 145 143 146 Culture and recreation 380 352 320 308 282 265 478 498 451 454 Community development 70 67 69 59 64 67 69 68 63 62 Municipal airport 10 10 10 10 9 9 10 10 10 10 Transit system 186 174 152 119 140 151 154 141 143 131 Water 29 30 26 24 26 25 25 31 30 30 Sewer 28 27 18 22 24 24 23 24 22 17 Cultural arts center 37 35 34 32 28 13 47 48 47 50 Total 1,615 1,556 1,466 1,417 1,450 1,410 1,739 1,761 1,685 1,679 Source: City of Torrance Finance Department - Payroll Section Fiscal Year
166
204
City of Torrance
Operating Indicators by Function
Last Ten Fiscal Years
Operating
Exhibit 2
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
Function
Police
Arrests 2,413 1,972 1,864 2,131 2,098 2,809 2,839 3,023 3,265 3,739 Bookings 2,228 1,825 1,767 2,082 2,037 2,688 2,196 2,360 2,477 2,623 Parking violations 30,802 12,585 10,155 9,632 9,448 12,695 15,602 17,434 20,945 25,192 Traffic violations 2,816 2,558 2,944 1,254 1,550 2,980 2,657 2,046 26,988 16,987 Fire
Number of calls answered 17,083 16,484 16,474 16,135 14,214 14,816 15,270 15,208 15,183 14,863 Inspections 4,449 6,385 7,309 8,020 7,400 4,820 8,647 8,448 8,047 9,229 Highways, streets and other transportation
Potholes repaired 12,046 12,294 12,122 6,417 6,022 5,150 5,477 5,206 8,000 5,045 Number of tenant aircraft 540 500 500 500 500 500 500 500 500 500 Number of fixed bus routes 12 12 12 12 12 11 11 11 11 11 Sanitation
Refuse collected (tons/day) 140 134 138 143 160 151 144 144 143 144 Recyclables collected (tons/day) 37 39 40 43 47 46 46 50 48 49 Green waste collected (tons/day) 68 68 65 61
69 72 63 63 64 59
Culture and recreation
Number of registrants served 31,794 18,969 15,810 16,462 13,558 21,868 28,900 41,238 33,780 31,522 Registrant fees collected 3,159,552$ 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$ Community center admissions 24,431 22,448 19,524 12,387 2,105 18,110 23,167 30,375 33,097 34,600 Water
New connections 33 42 54 57 37 38 42 54 23 49
Water main emergency repairs (breaks) 51 35 50 56 66 35 75 69 70 53 Average daily consumption 17,250 15,285 15,172 17,189 16,811 16,720 15,055 16,093 15,454 15,137 (thousands of gallons)
Sources: City of Torrance various departments
Fiscal Year
167
205
City of Torrance
Capital Asset Indicators by Function
Last Ten Fiscal Years
Operating
Exhibit 3
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
Function
Public safety
Police
Stations 1 1 11111111
Patrol units 49 49 55 55 55 68 64 64 56 56
Motorcycles 12 12 12 16 16 16 16 16 16 16
Fire
Stations 6 6 66666 66
In-service fire control vehicles
14 16 17 18 18 17 17 17 17 17
In-service paramedic vehicles 20 22 21 20 12 88888
Sanitation
Collection trucks 32 32 33 32 32 34 33 38 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 10,560 10,492 10,492 10,877 Airport hangars 341 341 341 341 341 341 341 341 341 341 Culture and recreation
Parks acreage 276 276 276 276 279 279 279 279 279 279
Parks 33 33 33 33 33 33 33 33 33 33
Swimming pools 1 1 11111111
Tennis courts 11 11 11 11 11 11 11 11 11 11
Community centers 4 4 43333333
Public libraries 6 6 66666666
Water
Water mains (miles) 320 320 320 312 312 312 312 312 312 312 Fire hydrants 2,708 2,693 2,693 2,675 2,675 2,675 2,675 2,675 2,675 2,675 Maximum daily capacity 50,400 50,400 50,400 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
168
206
#L
Date: March 12, 2026
To: Honorable Chair and Members of the Finance and Governmental Operations Committee
From: Ian Dailey, Finance Director | [email protected] Subject: Finance – Accept and File Fiscal Year 2025-26 Mid-Year Budget Review Report and Approve Proposed Fiscal Year 2025-26 Mid-Year Program Modifications and Budget Adjustments. Expenditure: $31,954 (General Fund).

RECOMMENDATION
Recommendation of the Finance Director that the Finance and Governmental Operations Committee:

1. Accept and file the Fiscal Year 2025-26 Mid-Year Budget Review Report; and

2. Approve the proposed program modifications in the fiscal year 2025-26 operating expenditure budget in the amount of $31,954 in the General Services Department; and

3. Approve the proposed increase to the Airport Fund’s fiscal year 2025-26 operating expenditure budget in the amount of $4,500,000; and

4. Approve the proposed increase to the Self-Insurance Fund’s fiscal year 2025-26 operating expenditure budget in the amount of $2,000,000; and

5. Recommend to City Council to accept and file the Fiscal Year 2025-26 Mid-Year Budget Review Report; and

6. Recommend to City Council the approval of the proposed fiscal year 2025-26 Mid-Year program modifications and budget adjustments.

FUNDING
Funding is available in the fiscal year 2025-26 General Services Department’s operating budgets and is anticipated to be available in subsequent fiscal years.

DISCUSSION
Each year, the Finance Department provides two budget updates 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 budgets, year-to-date spending, and projections for the remainder of the fiscal year.

Staff have completed the mid-year analysis through December 31, 2025, and have prepared the Fiscal Year 2025-26 Mid-Year Budget Review Report (Attachment 1) for the Committee.

The full report is available on the City’s Finance website at the below link:
https://www.torranceca.gov/government/finance/budget-documents 1 5B
City Council
March 12, 2026

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Finance and Governmental Operations Council CommitteeMarch 12, 2026

Finance and Governmental Operations Council Committee
March 12, 2026