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City of Redwood City <br />Management’s Discussion and Analysis (Unaudited) <br />For the Year Ended June 30, 2025 <br /> <br /> <br />5 <br />As the management of the City of Redwood City (the “City”), we offer readers of the City's financial statements this <br />narrative overview and analysis of the financial activities of the City of Redwood City for the year ended June 30, 2025. <br />We encourage readers to consider the information presented here in conjunction with additional information that we <br />have furnished in our letter of transmittal, which can be found on pages ix of this report. <br /> <br /> <br />FINANCIAL HIGHLIGHTS <br /> <br />City-wide Financial Highlights: <br /> <br /> Net Position – The City’s total assets and deferred outflows of resources exceeded its liabilities and deferred <br />inflows of resources at June 30, 2025 by $741.2 million (net position). Of this amount, $71.6 million was <br />reported as unrestricted net position, which may be used to meet obligations. <br /> <br /> Changes in Net Position – The City’s total net position increased by $32.7 million as reflected in the <br />government-wide statement of activities. Net position of governmental activities increased by $13.1 million, <br />and net position in business-type activities increased by $19.5 million. <br /> <br /> Cash and Investments – At June 30, 2025, cash and investments totaled $493.3 million, of which $326.5 million <br />was classified as governmental activities and $166.8 million was related to the business-type activities <br />category. Overall, the City’s cash position increased $4.5 million year-over-year. <br /> <br />Fund Highlights: <br /> <br /> Governmental Funds – At the close of the fiscal year, the City’s governmental funds reported a combined fund <br />balance of $256.4 million, an increase of $4.9 million, or 1.9 percent, from the prior year. Of the total, $32.4 <br />million, or 12.6 percent, of the fund balance is available for spending at the government’s discretion <br />(unassigned fund balance). <br /> <br /> General Fund – Unassigned fund balance in the general fund at June 30, 2025 was $34.0 million, an increase <br />of $3.4 million, or 11.1 percent, over the previous year. Overall fund balance in the general fund decreased <br />$2.3 million, predominantly due to an increase in transfers out in fiscal year 2024-25. <br /> <br /> Proprietary or Enterprise Funds – Unrestricted net position at June 30, 2025 for enterprise activities was <br />$175.9 million, which was a $8.1 million increase over the prior fiscal year. This is largely a function of an <br />improved position for cash and investment assets year-over-year, as well as a reduction in long-term liabilities. <br />This includes unrestricted net position of $49.0 million for the Water Utility, $95.4 million for the Sewer Utility, <br />and $24.4 million for the Port of Redwood City. <br /> <br /> Pension and OPEB – At the close of this fiscal year, the City’s net pension liability was $296.1 million, which <br />is a decrease of $7.0 million year-over-year. The net OPEB liability increased by $0.1 million year-over- <br />year. <br /> <br /> <br />OVERVIEW OF THE FINANCIAL STATEMENTS <br /> <br />Management’s Discussion and Analysis (MD&A) is intended to serve as an introduction to the City's basic financial <br />statements, which consist of three components: government-wide financial statements, fund financial statements, and <br />notes to the financial statements. This report also contains information in addition to the basic financial statements, such <br />as this discussion and analysis, required supplementary information, and a statistical section. <br />7.C. - Page 37 of 269 <br />56