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Net position serves as a useful indicator of a government's financial position. Net position is reported based on accrual basis of accounting that is similar to private businesses. Of the $774.4 million net position, $658.0 million (85.0 percent of the total) represents net investment in capital assets (e.g., infrastructure, land, buildings, improvements other than buildings, construction in progress, and equipment). $124.2 million (16.0 percent of the total) represents restricted net position reflecting resources earmarked for capital projects, community development and special projects, and pension funding. $11.6 million (1.5 percent of the total) represents committed net position reflecting resources set aside for specific purposes/programs such as the Rainy Day Fund. The unrestricted net position of negative $19.4 million (-2.5 percent of the total) reflects the City's net pension and OPEB liabilities of$95.2 million and $6.3 million. It also includes the City's share of Livermore-Pleasanton Fire Department's (LPFD) net deficit of $44.2 million (also reflecting LPFD's pension and OPEB liabilities), which is offset by various reserves including amounts set aside for future capital improvements in the capital projects funds, and reserves held in internal service funds to pay for retiree medical expenses, general liability claims, and repair and replacement of City facilities and equipment. Governmental activities account for $78.5 million of the negative unrestricted net position. Business-type activities account for $59.1 million, the majority of which is held in the utility funds for future capital projects and emergency repairs and replacement. It is common for agencies to report a negative unrestricted net position due to the recording of net pension and OPEB liabilities. Governmental Funds - Fund Balances The City's governmental funds reported ending fund balances of$157.5 million, an increase of$5.3 million from FY 2020/21 as revenues continue to exceed expenditures. This is due to the City's conservative financial planning and policies that helps ensure there will be a year-end surplus. Governmental Funds are based on modified accrual basis of accounting and focus on near-term inflows and outflows of spendable resources. As a result, long-term liabilities such as pension and OPEB obligations are not reported. The City's Governmental Funds include the General Fund, Special Revenue Funds, and Capital Projects Funds. Of the $157.5 million fund balances, restricted fund balances constitute $85.6 million of the combined governmental fund balance and are constrained for a specific purpose by external parties, constitutional provision, or enabling legislation: for example, low- income housing projects, projects funded by park development fees, and street projects funded by gas tax, Measure B and Measure BB funds. Committed fund balances of$11.6 million represent amounts constrained for specific purposes by the City Council (Rainy Day Reserve, Crisis Responses, etc.). Assigned fund balances of$37.4 million represent funds to be used for City-funded capital projects. Unassigned fund balances of $22.4 million consist of amounts that are not classified as non-spendable, restricted, committed, or assigned. Non-spendable fund balances of$0.5 million represent advances to other funds and notes receivable. Page 5 of 7