Agda Pkt 2026.07.27 Joint SA PFA

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City of Redwood City Notes to the Basic Financial Statements For the Year Ended June 30, 2025 61 Note 1 – Summary of Significant Accounting Policies The basic financial statements of the City of Redwood City, California (the “City”) have been prepared in conformity with Accounting Principles Generally Accepted in the United States of America (“U.S. GAAP”) as applied to governmental agencies. The Governmental Accounting Standards Board (“GASB”) is the accepted standard setting body for establishing governmental accounting and financial reporting standards in the United States. The more significant of the City’s accounting policies are described below. A. Financial Reporting Entity The City of Redwood City was incorporated in 1867, became a Charter City in 1929. The City operates under a Council-Manager form of government and provides the following services: public safety (police and fire), public ways and facilities, culture and leisure, public improvements, planning and zoning, general administration services, and redevelopment. Blended Component Units The financial reporting entity consists of the primary government, the City, and its component units. Component units are legally separate entities for which the elected officials of the primary government are financially accountable. In addition, component units can be other organizations for which the primary government is accountable and their exclusion would cause the reporting entity’s financial statements to be misleading or incomplete. Blended component units, although legally separate entities, are, in substance part of the government’s operation and so data from these units are combined with data of the primary government. Discretely presented component units, on the other hand, are reported in a separate column in the combined financial statements to emphasize that they are legally separate from the government. Although the following are legally separate from the City, they have been “blended” as though they are part of the City because the component unit’s governing body is substantially the same as the City’s and there is a financial benefit or burden relationship between the City and the component unit; management of the City has operational responsibilities for the component units; and/or the component units provide services entirely, or almost entirely, to the City or otherwise exclusively, or almost exclusively, benefits the City, even though it does not provide services directly to it. The accompanying basic financial statements of the City include the financial activities of the City as well as the Redwood City Facilities and Infrastructure Authority, Redwood City Public Financing Authority, and Port of Redwood City, which are controlled by and dependent on the City. While they are separate legal entities, City Council serves in separate sessions as the governing body of the Redwood City Facilities and Infrastructure Authority, Redwood City Public Financing Authority, and Port of Redwood City; their financial activities are integral to those of the City. The financial activities of all three entities have been aggregated and merged (termed "blended") with those of the City in the accompanying financial statements. Further details about each entity follow: The Redwood City Facilities and Infrastructure Authority (RCFISA) was established in 1986 to finance the construction of certain public facilities such as the Main Fire Station, City Hall, and Main Library. After acquiring certain properties from the City, RCFISA leased them back to the City. The lease money provided the funds for the debt service for the certificates of participation issued by the RCFISA to acquire the properties from the City. The Redwood City Public Financing Authority (PFA) was established in 1991 to finance construction of the new Police Facility, to finance the defeasance of outstanding certificates of participation issued by the RCFISA, and to issue tax increment bonds on behalf of the former Redevelopment Agency. The PFA has since issued various types of debt on behalf of the City and the former Redevelopment Agency. 7.C. - Page 93 of 269 112