HomeMy WebLinkAbout16 COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR YEAR END 6-30-11TO: JEFFREY C. PARKER, CITY MANAGER
FROM: PAMELA ARENDS-KING, FINANCE DIRECTOR
SUBJECT: COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR
ENDED JUNE 30TH 2011
SUMMARY:
The City engages an independent certified public accounting firm to complete an annual
audit of the City's financial records. There are a number of reports such as the
Comprehensive Annual Financial Report (CAFR), produced as a result of the annual
audit and there are actions that are required by the City's governing board (City Council)
to meet the requirements of various auditing standards.
RECOMMENDATION:
1. Receive and file the CAFR for the year ended June 30, 2011.
2. Designate two council members to serve as a Council Audit Committee to
discuss the audit and internal control issues with the auditors to meet auditing
standard requirements.
FISCAL IMPACT:
The independent certified public accounting firm that the City contracted with to
complete the annual audit is White Nelson Diehl Evans LLP. Total cost of the annual
audit including the Single Audit is $48,835. Of this amount, 25% or $12,209 is charged
to the Redevelopment Agency (RDA), 15% or $7,325 is charged to the Water Enterprise
Fund and 60% or $29,301 is charged to the General Fund.
BACKGROUND:
The reports that are produced as a result of the annual audit are the Redevelopment
Agency (RDA) audited financial statements that were submitted to council at the
December 6, 2011 Council meeting; the RDA State Controllers report; the City State
Controllers report; the Single Audit report (the audit of the federal grants awarded to the
City); the report of the auditors consideration of the City's internal control over financial
reporting and on their tests of its compliance with certain provisions of laws, regulations,
contracts, grant agreements and other matters; and the CAFR.
COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2011
February 7, 2012 Page 2 of 3
The auditors are in the process of completing the Single Audit, which is due to the
Federal Government in March 2012. When this report is finalized the auditors will also
complete their report on internal control issues and meet with the Council Audit Committee
to discuss the results of the audit.
The CAFR consists of a transmittal letter, independent auditor's report, a management's
discussion and analysis (MD & A); basic financial statements; notes to the financial
statements; supplementary information and a statistical section. The MD & A presents an
overview of the basic financial statements and what each section consists of and
discusses financial highlights for the year ended June 30, 2011.
General Fund financial highlights for the year ended June 30, 2011 are as follows:
• The City's General Fund total expenditures were $48.7 million, $0.7 million more
than prior year's expenditures and $1.7 million less than originally budgeted. The
primary reason for the increase in expenditures is due to the increase in public
safety expenses filling vacant positions.
• General Fund revenues were $47.7 million. Revenues received were $2.3 million
more than prior fiscal year primarily due to the increase in sales tax of $2.7 million.
Revenues were $3.2 million higher than what was projected for fiscal year
2010/2011 primarily due to the increase in sales tax and property tax that were
higher than expected because of the slow economic recovery.
• Total revenues and transfers in of $50.3 million exceeded total expenditures of
$48.7million, by $1.6 million. Therefore, the General Fund's fund balance of $150
million as of June 30, 2010 increased to $151.6 million as of June 30, 2011. Of the
$151.6 million, $144.1 million are nonspendable funds primarily due to a total of
$144 million in land held for resale and $7.4 million are unassigned and/or
spendable funds not contained in other classifications.
Other Financial Highlights for the year ended June 30, 2011 are as follows:
• The City's assets, which encompass all governmental and business type activities
(i.e. General Fund, Special Revenue Funds, RDA Funds, Capital Projects Funds
and the Water Enterprise Fund) as of June 30, 2011, exceeded its liabilities by
$638.6 million (net assets). The net assets consist of $399.8 million invested in
capital assets, net of related debt, $116.7 million in restricted net assets and $122
million in unrestricted net assets. Total net assets increased $0.6 million from the
prior fiscal year.
• Net Long-term liabilities increased $54.9 million. The net increase is primarily due
to the issuance of 2010 MCAS Tax Allocation Bonds of $44.1 million for the Tustin
Ranch Road Extension and 2011 Water Revenue Bonds of $20.7 million for
rehabilitation of the Rawlings Water Reservoir.
COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2011
February 7, 2012 Page 3 of 3
A more thorough discussion of the financial activities for the year ended June 30, 2011 is
presented in the MD & A.
Pamela Arends-King, Finance Director
Attachment: Comprehensive Annual Financial Report for the year ended
June 30, 2011
CI'T'Y OF TIUSTIN,
Comprehensive Annual Financial Report
For the year ended June 30th, 2011
Tustin Ranch Road
TUSTIN CITY COUNCIL
JERRY AMANTE, MAYOR
JOHN NIELSEN, MAYOR PRO TEM
DEBORAH GAVELLO
REBECCA "BECKIE" GOMEZ
AL MURRAY
Esly"Gol
WITH REPORT ON AUDIT
BY INDEPENDENT
FES] xv 9910SIAMM11 MUG") MILORMIK1191
Prepared By: Finance Department
CITY OF TI STIN
TABLE OF CONTENTS
For the year ended :Time 30, 2011
INTRODUCTORY SECTION:
Page
z�
Number
Elected and Administrative Officials i
Letter of Transmittal iii
Organization Chart Vii
GFOA Certificate of Achievement for Excellence in Financial Reporting Viii
FINANCIAL SECTION:
Independent Auditors' Report I
Management's Discussion and Analysis
(Required Supplementary Information - Unaudited) 3
Basic Financial Statements:
Government -wide Financial Statements:
Statement of Net Assets 15
Statement of Activities 16
Fund Financial Statements:
Governmental Funds:
Balance Sheet 18
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Assets 21
Statement of Revenues, Expenditures and Changes in Fund Balances 22
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities 24
Proprietary Fund:
Statement of Net Assets 25
Statement of Revenues, Expenses and Changes in Net Assets 26
Statement of Cash Flows 27
Fiduciary Funds:
Statement of Fiduciary Assets and Liabilities 29
Notes to Basic Financial Statements 31
CITY OF TUSTIN
TABLE OF CONTENTS
(CONTINUED)
For the year ended June 30, 2011
REQUIRED SUPPLEMENTARY fNFORMATION: 75
Schedule of Funding Progress for PERS and Post -Employment Benefit Plan 77
Budgetary Comparison Schedule - General Fund 78
Note to Required Supplementary Information 79
SUPPLEMENTARY INFORMATION: 81
Other Governmental Funds:
83
Combining Balance Sheet
86
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances
90
Schedules of Revenues, Expenditures and Changes in Fund
Balance - Budget and Actual:
Cas "fax Special Revenue Fund
94
Measure M Special Revenue Fund
95
Park Acquisition and Development Special Revenue Fund
96
Asset Forfeiture Special Revenue Fund
97
Air Quality Special Revenue Fund
98
Supplemental Law Enforcement Special Revenue Fund
99
Agency Funds: 101
Con;bining Statement of Assets and Liabilities 102
Combining, Statement of Changes in Assets and Liabilities 103
STATISTICAL, SECTION (UNAUDITED): 107
Description of Statistical Section Contents 109
Financial Trends:
Net Assets by Component - Last Seven Fiscal Years 110
Changes in Net Assets - Expenses and Program Revenues - Last Seven Fiscal Years 112
Changes in Net Assets - General Revenues - Last Seven Fiscal Years 114
Fund Balances of Governmental Funds - Last Seven Fiscal Years 116
Changes in Fund Balances of Governmental Funds - Last Seven Fiscal Years 118
CITY OFTUSTIN
TABLE OF CONTENTS
(CONTINTUED)
For the year ended June 30, 2011
STATISTICAL SECTION (UNAUDITED) (CONTINUED):
Revenue Capacity:
Assessed Value and Estimated Actual Values of Taxable Property - Last Ten Fiscal Years 120
Direct and Overlapping Property Tax Rates - Last Seven Fiscal Years 122
Principal Property Taxpayers - Current Year and Nine Years Ago 124
Property Tax Levies and Collections - Last Seven Fiscal Years 125
--
Ratios of Outstanding Debt by Type - Last Ten Fiscal Years 126
Ratio of General Bonded Debt Outstanding - Last Ten Fiscal Years 128
Overlapping Debt Schedule 129
Legal Debt Margin Information - Last Ten Fiscal Years 130
Pledged -Revenue Coverage - Last Ten Fiscal Years 132
Demographic and Economic Information:
Demographic and Economic Statistics - Last Ten Calendar Years 134
Principal Employers - Current Year and Nine Years Ago 135
Operating Information:
Full -Time City Employees by Function - Last Ten Fiscal Years 136
Capital Asset Statistics by Function - Last Ten Fiscal Years 137
Water District Schedules for Revenue Capacity:
Water Consumption by Customer Type - Last Nine Fiscal Years 138
Water Rates - Last Ten Fiscal Years 140
Water Customers - Current Year and Nine Years Ago 141
David E. Kendig
City Attorney
George W. Jeffries
City Treasurer
CITY OF TUSTIN
Elected and Administrative Officials
It
Jerry Amante
CITY COUNCIL
John Nielsen, Mayor Pro Tern
Deborah Gavello
Rebecca "Beckie" Gomez
At Murray
AUDIT COMMISSION
Craig Shimomura, Chair
R. Lawrence Friend, Chair Pro Tem
Richard G. Hilde
Gregory C. Moore
CITY MANAGER
William A. Huston, Interim
Pamela Stoker
City Clerk
Christine A. Shingleton
Assistant City, Manager
Elizabeth A. Binsack
Director, Communitv
Development
Pamela Arends-King
Director, Finance
Douglas S. Stack
Director, Public Works / City
Engineer
Kristi Recchia
Director, Human Resources
David Wilson
Director, Parks and Recreation
Services
The page left blank intentionally
Fillance Department
December 29, 2011
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
CITIZENS OF THE CITY OF TUSTI IN
City of Tustin
Tustin, California 92780
Tru'r S- T I N
BUILDING Oup, FUTURE
HONORING OUR PAST
The Comprehensive Annual Financial Report (CAFR) of the City of Tustin for the fiscal year
ended June 30, 2011, is hereby submitted, These statements have been prepared in
conformity with generally accepted accounting principles (GAAP) and audited in accordance
with generally accepted auditing standards by an independent public accounting firm of licensed
certified public accountants.
The report consists of management's representations concerning the finances of the City
Tustin. Responsibility for both the accuracy of the data, and the completeness and fairness
the presentation, including all disclosures, rests with management. To provide a reasonab
basis for making these representations, management has established an internal contr
framework that is designed both to protect the government's assets from loss, theft, or misul
I
and to compile sufficient reliable information for the preparation of the financial statements
conformity with GAAP. Because the cost of internal controls should not outweigh their benefit
the City's framework of internal controls has been designed to provide reasonable rather th
absolute assurance that the financial statements will be free from material misstatement. I
of Tustin. All disclosures necessary to enable the reader to gain an understanding of the Cityl
financial activities have been included.
The City of Tustin's financial statements for the year ended June 30, 2011, have been audit
by White Nelson Diehl Evans LLP, an independent public accounting firm of licensed certifi
public accountants. The independent auditor concluded, based upon the audit, that there was
reasonable basis for rendering an unqualified opinion that the City of Tustin's financi
statements for the fiscal year ended June 30, 2011, are fairly presented in conformity wi
GAAP. The independent auditor's report is presented as the first component of the financi
section of this report.
M
300 Centennial, Way, Tustin, CA 92780 * P. (714) 573-3060 0 F M1 832-0825 & wwwltustinca,org
GAAP requires that management provide a narrative introduction, overview and analysis to
accoms" the basic financial statemento
(MD&A). This letter of transmiftal is designed to complement the MD&A and should be read in
conjunction with it. The City of Tustin's MD&A can be found immediately following the report of
the independent auditors.
The City of Tustin is located in the central part of Orange County, about forty miles southeast of
Los Angeles and eighty miles north of San Diego, at the intersection of the 5 and 55 Freeways.
Tustin covers over eleven square miles and adjoins the cities of Orange, Santa Ana and Irvine.
The State of California Delartment of Finance has estimated the Ckp's Janua 1, 2011 pXmN10"
at 75,781. The population has remained flat since 2010.The City was incorporated under the
General Laws of the State of California in 1927 as the "City of Tustin". Government was by a five
member elected City Council. The Council/Administrator form of city government was adopted in
1965 and was modified to the Council/Manager form in 1981. Tustin is in the center of Orange
County and, while surrounded by much of the County's main industrial employment, it is essentially
a residential community.
Tustin is a full service City. The services provided by the City include police, street and park
maintenance, water. recreation, traffic/transportation, public improvements, planning, zoning,
and general administrative services. The City contracts with the Orange County Fire Authority
for fire suppression services. Also included in the City's overall operations are the Tustin
Community Redevelopment Agency and the Tustin Public Financing Authority. Additional
information is available on these blended component units in the notes to the financial
statements.
The key element of the City's financial management process is the development and approval
of the annual budget. The City Council conducts various open budget workshops as necessary
and adopts the budget at a noticed public meeting. The budget is prepared pursuant to
generally accepted accounting principles (GAAP) and is balanced by fund. The level of
appropriations is controlled by the City Council for each fund. The City Manager is authorized to
transfer appropriations within the fund between the various programs and/or departments.
Budgetary control is maintained by a monthly financial reporting system. Budget to actual
comparisons are provided in this report for each individual governmental fund for which an
appropriated annual budget has been adopted. For the General Fund this comparison is
presented on page 78 as part of the required supplementary information and for nonmajor
governmental funds this comparison is presented on pages 83 — 99 as part of the other
supplementary information for the governmental funds.
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ECONOMIC OUTLOOK
The State of California is slowly recovering from the economic downturn. The statewide
unemployment rate has dropped from 12.5% in November 2010 to 11.3% for November 2011
The Orange County unemolmyrnent rate has decreased 1.4% from November 2010 to 8. 1 OL -for
November 2011. The continued recovery from the recession has resulted in an increase in
sales tax revenue, which is the General Fund's largest revenue source. Annual Sales tax
revenue went from $20A million in fiscal year 2007-2008 to $15.9 million in fiscal year
2009-2010, a 22% decline over three years,however sales tax increased $2.7 million in fiscal
year 2010-2011 to $18.6 million, Property tax revenue is the City's largest revenue source. It
increased $1.8 million in fiscal year 2010-2011 but is expected to remain flat for fiscal year
2011-2012. Commercial and residential development has decreased significantly due to the
recent economic conditions. New development at the Marine Corp Air Station base has been
put on hold except for construction that was already planned. The City's agreement with the
phase of development, ended August 2010 due to the recession. The City continues to pursue
development for the Marine Corp Air Station base area. It is expected that the completion of the
Tustin Ranch Road Extension project will be very helpful in triggering that development.
The City Council continues to take a proactive approach for maintaining the City's healt
financial position by monitoring revenues and expenses. The future economic outlo,
continues to improve slowly in a positive direction for 2012. To maintain General Fund resery
for fiscal year 2011-2012, the City did not implement employee cost of living raises a
increased the employees' contribution to their pension plans for subsequent fiscal year to equ-
7% of the total miscellaneous employees' payroll and 9% of the total safety employees' payro
City Council will be reviewing the City's financial condition during the mid -year budget review
February 2012,
ACCOMPLISHMENTS AND FUTURE PROJECTS
During fiscal year 2010-2011, REJ Inc., sporting goods store relocated to the City. The Toy
dealership expanded its operations and Hyundai automobiles are now being sold in Tusti
These events helped contribute to the slight increase in sales tax revenue. Major capi
improvement projects completed included the Red Hill Avenue Quiet Zone; playgrou
renovations at Magnolia Tree Park, Laurel Glenn Park, and Centennial Park; Tustin Ran
Road Rehabilitation; and the Red Hill Avenue Parking Bay. I
The City's capital projects for fiscal year 2011-2012 are budgeted at $77.5 million. Fundi
sources for the capital projects include revenues from gas tax, Community Development Blo
Grant, water revenues, Redevelopment Agency tax increment, Measure M, Park Developme
Funds, Water Revenue Bond proceeds and Tax Allocation bond proceeds. Major projec
include the expansion of Tustin Ranch Road; Tustin Legacy Fire Station-, Red Hill Aven
median improvements between Barranca Parkway and north of Valencia Avenue-, Tustin Leg
Park; and the rehabilitation of the Rawlings water reservoir. I
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The Government Finance Officers Association of the United States and Canada (GFO
awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Tust
for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2010. Th
was the twenty-fourth consecutive year that the government has achieved this prestigio
award. In order to be awarded a Certificate of Achievement, a government must publish
easily readable and efficiently organized comprehensive annual financial report. This rep
must satisfy both generally accepted accounting principles and applicable legal requirerr
A Certificate of Achievement is valid for a period of one year only. We, believe that our curre
' u
comprehensive annual financial report continues to meet the Certificate of Achjieveme
Pro ram s reauirements and we are submittino it
ROW
department during the year. Their efforts are reflected in this report and in other documen
resulting from the annual audit process, Special thanks are due to Jennifer Leisz, jFinan
Manager, Nipa Shah, Part-time Accounting Supervisor, Sean Tran, Administrative Servic
Manager, and the finance staff. Their significance in preparing the final financial documents
reflected in the quality of this report.
Respectfully submitted,
Pamela Are ds -Kin
Finance Director
W�
City Of Tustin
Califomia
For its Comprehensive Annual
Financial, Report
for the Fiscal Year Ended
A CerOicate of Achiwvetnent for Fxceflence in Financial
Reporting is presented by the Gcwernment Finmee Officers,
Association of the United States and Canada to
gove—mment uwts and public employ-ce retwement
systems whose comprehensive annual financial
reports (CAM) achieve the higbest
standards in go-vermewt accownting
and finmneial reportipg.
Executive atrector
INDEPEINIDENT AUDITORS'REPORT
City Council Members
City of Tustin
Tustin, California
We have audited the accompanying financial statements of' the governmental activities, the business -type
activities, each ma�jor Fund, and the aggregate remaining fund information of the City of Tustin, as of and for the
year ended June 30, 2011, which collectively comprise the City's basic financial statements as listed in the table
of contents. These financial statements are the responsibility of the City of Tustin's management. Our
responsibility is to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in.Governi-nent Aaditin Standards issued by
the Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement, An audit
includes consideration of internal control over financial reporting as a basis for designing 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 over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit provides a reasonable basis for our
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In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities, the business -type activities, each major fund, and the aggregate
remaining fund information of the City of Tustin, as of June 3 )0, 2011, and the respective changes in financial
position, and cash flows, where applicable, for the year then ended in conformity with accounting principles
generally accepted in the United States of America.
As described in Note 13, the City has implemented the provisions of Governmental Accounting Standards Board
Statement Number 54, "Fund Balance Reporting and Governmental Fund Type Definitions", for the year ended
June 30, 2011.
As explained further in Note 17, the California State Legislature has enacted legislation that is intended to
provide for the dissolution of redevelopment agencies in the State of California.
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In accordance with Government Auditing;Standards,we have also issued our report dated December 28, 2011 on
our consideration of the City of TustiWs 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 to describe the scope of our testing of internal control over financial reporting and compliance and
the results of that testing, and not to provide an opinion on the internal control over financial reporting or on
compliance. That report is an integral part of an audit performed in accordance with Governrnent Auditing
Standards and should be considered in assessing the results of our audit.
The management's discussion and analysis, the schedule of funding progress and budgetary comparison
schedule, identified as required supplementary information in the table of contents, are not a required part of the
basic financial statements but are supplementary information required by the accounting principles generally
accepted in the United States of America. This information is 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 management's discussion and analysis and the schedule of funding progress in
accordance with auditing standards generally accepted in the United States of America, which consisted of
inquiries of management about the methods of preparing the information and comparing the information for
consistency with management's responses to our inquiries, the basic financial statements, and other knowledge
we obtained during the audit of the basic financial statements. We do not express an opinion or provide any
assurance on the management's discussion and analysis and the schedule of funding progress because the
limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
The budgetary comparison schedule and related note have 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 auditing standards generally accepted in the United States of America. In our opinion, the
information is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
Our audit was made for the purpose of forming opinions on the financial staternents that collectively comprise
the City's basic financial statements. The combining statements and individual fund schedules are presented for
purposes of additional analysis and are not a required part of the basic financial statements of the City. 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 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 financial statements themselves, and other additional
procedures in accordance with auditing standards generally accepted in the United States of America, In our
opinion, the information is fairly stated in all material respects in relation to the basic financial statements taken
as a whole.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements of the City of
Tustin, California as a whole. The introductory section and statistical section are presented for purposes of
additional analysis and are not a required part, of the basic financial statements. Such information has not been
subjected to the auditing procedures applied in the audit of the basic financial staternents and, accordingly, we
do not express an opinion or provide airy assurance on them.
December 29.1,?til 1
Irvine, California
CITY OF TUSTIN
Management's Discussion and Analysis (Unaudited)
June 30, 2011
As management of the City of Tustin, Cafiftnma (the City), we offer readers of the City of Tustin's
financial statements this narrative overview and analysis of the financial activities of the City for the
fiscal year ended June 30, 2011. We encourage readers to consider the information presented here ill
conjunction with additional information that we have famished in our letter of transmittal, which can
be found in the introductory section of this report, and with the City's financial statements.
Financial Highlights
The assets of the City exceeded its liabilities at June 30, 2011, by $638.6 million (net assets).
Net assets consist of $399.8 million invested in capital assets. net of related debt,
$116.7 million in restricted net assets and $122 million in unrestricted net assets.
® The governmerifs total net assets increased by $0.6 million during the fiscal year ended
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June 30, 2011. Revenues remained relatively flat from prior year; therefore, the increase in
total net assets is primarily due to cuts in expenses in governmental activities. Total
unrestricted net assets are $4.5 million higher than last fiscal year, an increase of 3.9%.
0 As of June 30, 2011. the City's governmental funds reported combined ending fund balances of
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$312.3 million, an increase of $36.6 million in comparison with the prior year. Approximately
$166.5 million (53.3%) is nonspendable and $131.6 is restricted.
The net increase in the City's total long-term liabilities was $54.9 million, The $54.9 million
net increase is primarily due to the issuance of 2010 MCAS Tax Allocation Bonds of
$44.1 million and 2011 Water Revenue Bonds of $20.7 million for major capital projects.
This discussion and analysis is intended to serve as an introduction to the City's basic financial
statements. The City's basic financial statements consist of three components: 1) govemment-wide
financial statements, 2) fund financial statements, and 3) notes to the basic financial statements. This
report also contains required supplementary and other supplementary information in addition to the
basic financial statements themselves.
Government -wide financial statements
The goilernmetit--�t�idc-,fin(inciaI statements are designed to provide readers with a broad overview of
the City's finances, in a manner similar to a private -sector business.
The statement cif' net assets presents information on all of the City's assets and liabilities, with the
difference between the two reported as net assets. Over time, increases in the net assets may serve as a
useful indicator of whether the financial position of the City is improving or deteriorating.
See independent auditors' report.
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CITY OF I'N
arna a ent*s Discussion and Analysis (Unaudited)
June 30,2011
Government -wide financial statements (continued)
The statement of activities presents information showing how the gove ent's net assets changed.
during the most recent fiscal year. All changes in net assets are reported as soon as the underlying
event giving rise to the change occurs, regardless of the titning of related cash flows, ` hus, revenues
and expenses are reported in this statement for some items that will only result in cash flows in future;
fiscal periods (e.g., collected taxes and earned but unused vacation leave).
Government -wide financial statements distinguish City governmental activities that are principally
supported by taxes and intergovernmental revenues from other business -type; activities that are
intended to recover all or a significant portion of their costs through user fees and charges.
Governmental activities of the City, the Tustin Community Redevelopment Agency, a blended
component unit, and the Tustin Public Financing Authority, a blended component unit, include general
government, public safety, public works and community services. Business -type activity of the City is
the Water Utility.
The government -wide financial statements can be found immediately following this discussion and
analysis.
Fund financial statements
A„fiend is a grouping of related accounts that is used 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 mance-related legal requirements, All of
the funds of the City can be divided into three categories: governmental funds, proprietary funds, and
fiduciary funds.
Governmental l f nds. Governmental f ands are used to account for essentially the same functions
reported as governmental activities in the government -wide financial statements, However, unlike the
government -wide financial statements, governmental fund financial statements focus on near -teras
inflows and outfloivs oaf slwndable resources, as well as on balances of slaendable resources available
at the end of the fiscal year. Such information may be useful in evaluating a government's near-term
financing requirements.
Because the focus of governmental funds is narrower than that of the government -wide financial
statements, it is useful to compare the information presented for gvv°ernmentcal fund s with similar
information presented for governmental activities in the government -wide financial statements. By
doing so, readers may better understand the long -terra impact of the government's near -tern financing
decisions. Both the Governmental Funds Balance Sheet and the Governmental Funds Statement of
Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this
comparison between governmentalhands and governmental activities.
The City maintains various individual governmental funds organized by their type (special revenue,
debt service and capital projects funds). Information is presented separately in the Governmental
Funds Balance Sheet, the Governmental Funds Statement of revenues, Expenditures, and Changes in
Fund Balances. The General Fund, the Marine Base Project Area Debt Service Fund and the CFD
Construction. Capital Projects Fund are considered to be major funds. Data from other governmental
funds are combined into a single, aggregated presentation. Individual fund. data for each of these other
governmental funds is provided in the fonn of combining statements elsewhere in this report.
See independent auditors' report.
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CITY OF TUSTIN
Management's Discussion and Analysis (Unaudited)
June 30, 2011
Fund financial statements (Continued)
Goven nmental funds (continued). The City adopts an annual appropriated budget for its General Fund
and the special revenue funds to demonstrate compliance with the annual budget. Budgetary
comparison schedules have been provided to demonstrate compliance with this budget elsewhere in
this report.
The governmental funds financial statements can be found immediately following the
financial mancial statements.
Proprietai:v fund& The City of Tustin maintains one type of proprietary (Enterprise) fund, This
enterprise fund is used to report the same functions presented as business -type activities in the
government -wide financial statements. The City uses an enterprise fund to account for its Water
utility.
The proprietary fund financial statements can be found immediately following the governmental lunds
financial statements.
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties
outside the government, Fiduciary funds are not reflected in the goverimient-wide financial statement,
because the resources of those funds are not available to support the City's own programs. The
fiduciary funds financial statements can be found immediately following the proprietary fund financial
statements.
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. The notes
to the basic financial statements can be found immediately following the fiduciary funds financial
statements.
Other information
In addition to the basic financial statements and accompanying notes, this report also presents certain
required supplementaty inf6rination which includes a Budgetary Comparison Schedule for the General
Fund and schedules of funding progress for the City's defined benefit pension plan and other
postemployment healthcare benefits plan. Required supplementary information can be found
immediately following the notes to the basic financial statements.
Z�
The combining statements referred to earlier in connection with other governmental funds are
presented for all other Special Revenue Funds, other Debt Service. Funds and other Capital Projects
Funds. These combining and individual fund statements and schedules can be found immediately
following the required supplementary information.
See independent auditors' report.
_5®
CITY OF TUSTIN
Management's Discussion and Analysis (Unaudited)
June 30, 2011
Government -wide Financial Analysis
The government -wide financial statements provide long-term and short-term information about the
City's overall financial condition. This analysis addresses the financial statements of the City as a
whole,
'The largest portion of the City's net assets (63 percent) reflects its investment in capital assets
e.g., land, buildings, improvements other than buildings, equipment, infrastructure, and construction in
progress, less any related debt used to acquire those assets that is still outstanding. The City uses these
capital assets to provide services to citizens; consequently. these assets are not available for future,
spending. Although the City's investment in its capital assets is reported net of related debt, it should
be noted that the resources needed to repay this debt must be provided from other sources, since the
capital assets themselves cannot be used to liquidate these liabilities.
Citv of Tustin
Summary of Net Assets
As of June 30, 2011
(in millions of dollars)
Govemmental activities. Net assets of the City's governmental activities increased 0.1. % to
$612.2 million, of which $378.9 million is invested in capital assets such as equipment, buildings and
infrastructure, net of related debt. Of the remaining total, $116.7 million is restricted to specifically
stipulated spending agreements originated by law, contract or other agreements with external parties.
See independent auditors' report.
-6-
Governmental
Business -Type
Total
Activities
Activities
Total
Change
2010
2011
1010
2011
2010
2011
2010-2011
Assets:
Current and other assets
$295.5
$338.5
$5.4
$27.5
$300,9
$366.0
Capital assets
385.2
3811
35.1
33.9
4203
417.0
Total Assets
680.7
721.6
40.5
61 A
721
783,0
8.6%
Liabilities:
Current liabilities
17.0
22.8
2.2
2.7
192
25.5
Non -Current liabilities
52.1
86.6
I1.9
32.3
64.0
118.9
Total Liabilities
69.1
109A
14.1
35.0
83.2
144.4
73.5%
Net Assets:
Invested in capital assets,
net of related debt
385.2
378.9
24.5
20.9
409.7
399.8
Restricted
135.7
116.7
-
-
1135.7
116.7
Unrestricted
90.7
116.6
1.9
5. 5
92,6
122.1
31.9%
Total Net Assets
S611-4
$6122
S2 .
U?6 -4
$
--63S.0
SAIM6
0.1%
Govemmental activities. Net assets of the City's governmental activities increased 0.1. % to
$612.2 million, of which $378.9 million is invested in capital assets such as equipment, buildings and
infrastructure, net of related debt. Of the remaining total, $116.7 million is restricted to specifically
stipulated spending agreements originated by law, contract or other agreements with external parties.
See independent auditors' report.
-6-
CITY OF TUSTIN
Management's Discussion and Analysis (Unaudited)
June 30, 2011
Government -wide Financial Analysis (Continued)
Goveminental activities (continued). The remaining $116.6 million is subject to designation for
specific purposes as approved by the City Council, and may be used to meet the City's ongoing
obligations.
City of Tustin
Summary of Changes in Net Assets
For the Year Ended June 30, 2011
(in millions of dollars)
Governmental
Business -Type
Total
Activities
Activities
Total
% Change
2010
1011
2010
2011
2010
2011
2010-2011
Revenues:
Program revenues:
Charges for services
$73
$6.8
$10,6
$12.4
$1T9
S19.2
Operating grants & contributions
3.4
3.4
-
-
3.4
3.4
Capital grants and contributions
6.3
3.4
-
-
6.3
3.4
General revenues:
Taxes
30.6
32.4
-
-
30.6
32.4
Sales taxes shared state revenues
15,9
18.6
-
-
15.9
18.6
Motor vehicle taxes
6.1
62
-
-
6.1
6.2
Earnings on investments
4.1
2.4
0.1
0.2
4.2
16
Miscellaneous
1.5
1.7
-
-
1.5
1.7
Total Revenues
752
14.9
10.7
12.6
85.9
87.5
1.9%
Expenses:
General government
7.8
7.9
-
-
7.8
7.9
Public safety
27.3
28.6
-
-
27.3
28,6
Public works
19.9
19.8
-
-
19.9
19.8
Community services
12.7
13.2
-
-
12.7
13.2
interest on long-term debt
4.1
4.8
-
-
4.1
4.8
Water
-
-
11.9
116
11.9
12.6
Total Expenses
71.8
743
11.9
116
83.7
86.9
3.8%
Change in net assets
3,4
0.6
(1.2)
-
12
0.6
Net Assets - Beginning, restated
608,2
611.6
27.6
26.4
635.8
638.0
Net Assets - Ending
$6-11-6
S-0-2-2
S26
64
16 J "
$6356
0.1%
See independent auditors' report.
-7-
CITY OF TUSTIN
Management's Discussion and Analysis (Unaudited)
June 30, 2011
Government -wide Financial Analysis (Continued)
Governmental activities increased the net assets by $0.6 million. The primary reason for this slight
increase in net assets is due budgeting and monitoring city-wide expenses. Due to the ramifications of
the recession, revenues have increased slowly; therefore expenses have been carefully monitored to not
exceed the pace of revenue growth.
Overall, revenues decreased $0.3 million from prior year. Capital grants and contributions program
revenues decreased S2.9 from prior year because time was spent planning projects and applying for
grants that will reimburse capital projects in the next fiscal year. Those funds will be earned when
eligible expenditures are incurred in fiscal year 2012. Charges for services decreased $0.5 million due
to the decrease in building and development because of current economic conditions. Taxes increased
$1.8 million primarily due to an increase in property tax revenue. The City's property values continue
to remain stable; therefore there were no significant property devaluations to impact revenues, also
delinquent secured property tax revenue increased. Sales tax revenue increased $21.7 million due to the
slow economic recovery. Earnings on investments decreased $1 .7 million primarily due to the
decrease in interest revenue paid from the Redevelopment Agency's Low and Moderate Income
Housing funds to the General Fund for the Reimbursement Agreement in regards to meeting affordable
housing obligations. The decline in interest revenue was the result of the significant reduction in
principal balance in fiscal year 2009-2010 (See footnote 15.) Earnings on the City's investment
portfolio averaged less than 0.8%. Public safety expenses increased S1.3 million from prior year
primarily due to the increase in pension contribution rates and filling vacant positions. Community
services expenses increased $0.5 million due to filling vacant positions and interest on long-term debt
increased $0.7 million due to the issuance of bonds last fiscal year and this fiscal year.
Business -Type activities net assets remained flat primarily due to the increase in water rates, resulting
in a $1.8 million increase in revenues from prior _year that was adequate to cover the annual operating
costs. Water operation costs increased $0.7 primarily due to the increase in production costs,
Financial Analysis of the Government's Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with
finance -related legal requirements.
The focus of the City's g-overnmentalfiinds is to provide information on near-term inflows, outflows,
and balances ofspendable resources. Such information may be useful in assessing the City's financing
requirements.
As of the end of the current fiscal year, the City's governmental funds reported total combined ending
fund balances of $312.3 million, an increase of $36.6 million in comparison with the prior year
primarily due to the issuance of the 2010 MCAS -Tustin Redevelopment Project Area Tax Allocation
Bonds for $44.1 million. Approximately $166,5 million (53.3 %) of this total amount constitutes
nonspendable fund balance. Of the nonspendable amount $145.8 million is land held for resale. The
remainder of the fund balance consists of $130.7 million in, restricted funds, $18.6 million of assigned
funds and $3.5 million deficit of unassigned funds.
See independent auditors* report.
CITY OF TUSTIN
Managernent's Discussion and Analysis (Unaudited)
June 30, 2011
Financial Analysis of the Government's Funds (Continued)
The General Fund is the chief operating hind of the City. At the end of the current fiscal year,
unassigned fund balance of the General Fund was $7.4 million, while total ftmd balance was
$151.6 million, As a measure of the General Fund's liquidity, it may be useful to compare unassigned
fund balance to total fund expenditures. Unassigned fund balance represents 15.3% of the total
General Fund expenditures.
City of Tustin
Summary of Changes in Fund Balances - General Fund
For the Year Ended June 30, 20111
(in millions of dollars)
Revenues:
Taxes
Charges for services
Intergovernmental
Investment revenue
Licenses and permits
Other
HEM
Expenditures:
General government
Public safetv
Public works
Community services
Capital outlay
Interest and fiscal charges
Total Expenses
Excess of Revenues Over
(Under) Expenditures
Net Increase in Fund Balance
See independent auditors' report.
-9-
Total
L/.Chan ge
2010 2011 2010-2011
$319
$36.6
5.7
4.9
1.3
1.1
23
0.9
0.4
M
1.8
3,5
45.4
47,7 5.1%
TI
7.4
26.3
271.4
101
M
2.7
2.8
Lo
1.1
0e8
0.9
48.0
48,7 1.5%
(2.6)
(1.0)
28.5
226 (90,9%)
-S25.9
S1 —6 (93.8%)
CITY OF TUSTIN
Management's Discussion and Analysis (Unaudited)
June 30, 2011
Financial Analysis of the Government's Funds (Continued)
Transactions impactingC revenues in the General Fund were as follows:
• Sales tax revenues were $18.6 million reflecting a $2.7 million 'increase from prior year due to
the economic recovery,
• Investment revenue decreased $1 .4 million due to the decrease in interest revenue paid from the
Redevelopment Agency's Low and Moderate Income Housing funds to the General fund for
the Reimbursement Agreement in regards to meeting affordable housing obligations. The
decline in interest revenue was the result of the significant reduction in principal balance in
fiscal year 2009-2010.
® Other revenue increased $1 .7 million due to reimbursement from other funds for information
technology services,
• Charges for services revenue decreased $0.8 million due to the slowdown of construction
because of the recession.
Changes in General Fund expenditures from previous fiscal year, by function, occurred as follows
during the year ended June, 30, 0, 2011:
Public safety expenditures increased $1.1 million due to the filling of vacant positions and
increase in pension contribution rates.
Public works decreased $ 1.0 million due to not filling vacant positions, decrease in property
insurance paid; and controlling maintenance expenses,
The Marine Base Project Area Debt Service Fund expenditures exceeded revenues by $4.5 million,
primarily due to the payoff of Notes Payable Series B and Series A of $8.2 million. The Notes were
paid off to ensure a better bond rating for improved interest rates in conjunction with the issuance of
the 2010 MCAS Tax allocation bonds.
The CFD Construction Capital Projects Fund revenues exceeded expenditures by $0.3 million
primarily due to the issuance of $1.6 million Special Tax Bonds, Series 2010, for Community Facilities
District No. 06-1. The bond proceeds will be used to continue infrastructure improvements for the
Tustin Legacy Columbus Villages development.
Differences between the General Fund actual revenues and transfers and amended budgeted revenues
and transfers were $3.2 million primarily due to the increase in sales and property taxes that were
higher than what was expected. Actual General Fund expenditures were less than the amended
budgeted amount of $50.4 million by 51.7 million.
See independent auditors' report.
CITY OF TUSTIN
Management"s Discussion and Analysis (Unaudited)
June 30, 2011
Financial Analysis of the Proprietary Funds
The City has one proprietary fund which is the Water Enterprise Fund. Unrestricted net assets of the
Water Enterprise are $5.5 million, There was no change in net assets as revenues collected were
sufficient to cover costs. New water rates approved June 15, 2010, became effective July 1, 2010. The
new water rate structure increased revenues from $10,7 million to $12.6, eliminating the ongoing
operating deficit from prior fiscal years.
Capital Asset and Debt Administration
The City's investment in capital assets for its governmental and business -type activities as of
June 30, 2011 amounts to 5417 million, net of accumulated depreciation. This investment in capital
assets includes land, buildings and system improvements, machinery and equipment, park facilities,
roads, highways, and bridges.
City of Tustin
Summary of Changes in Capital Assets
Net of Accumulated Depreciation
For the Year Ended June 30, 2011
(in millions qf dollars)
Land
Right of way
Construction in progress
Buildings and improvements
Machinery and equipment
Infrastructure
Property, plant and equipment
Total Capital Assets, Net
Governmental
Activities
2010
2011
544.3
$44.3
42.4
42.4
31.8
34.8
510
51.1
15
2.8
212.2 207.7
Business -Type
Activities
2010 2011
$1.2 SL2
Li 1.3
5.9 5.6
26.9 25.8
385.2 L383.1 35.1 $_13 .9 $4 20.3 J4�17 0 (0.8%)
-
The major activity affecting capital assets this year was the completion of the Red Hill Avenue Parking
L_
Bay; playground renovations at Magnolia Tee Park, Laurel Glenn Park, and Centennial Park;
completion of the Red Hill Avenue quiet zone, Tustin Ranch Road and Bryan Avenue rehabilitation --
and replacement of the San Juan Avenue sidewalk.
Additional information on the City's capital assets can be found in the notes to the basic financial
statements section of this report (beginning on page 48).
See independent auditors' report.
- 11-
Total
Total
0//oChan,.,,e
2010
2011 2010-2011
$45.5
$45.5
42.4
42.4
32.9
36.1
57.9
56.7
2.5
2.8
212.2
207.7
26.9
25.8
385.2 L383.1 35.1 $_13 .9 $4 20.3 J4�17 0 (0.8%)
-
The major activity affecting capital assets this year was the completion of the Red Hill Avenue Parking
L_
Bay; playground renovations at Magnolia Tee Park, Laurel Glenn Park, and Centennial Park;
completion of the Red Hill Avenue quiet zone, Tustin Ranch Road and Bryan Avenue rehabilitation --
and replacement of the San Juan Avenue sidewalk.
Additional information on the City's capital assets can be found in the notes to the basic financial
statements section of this report (beginning on page 48).
See independent auditors' report.
- 11-
CITY OF TU TI
Management's Discussion and Analysis (Unaudited)
June 30,2011
Capital Asset and Debt Administration (Continued)
Long-term Debt
At the end of the current fiscal year, the City had total long-term liabilities outstanding of
$118.9 million. Of this amount, $108.9 million are secured solely by specified revenue sources such as
property tax increment and water service charges.
Tax allocation bonds
Notes payable
Bonds payable
Claims and judgments
Postemployment
benefits obligation
Compensated absences
City of Tustin
Summary of Changes in Long -Term Liabilities
For the Year Ended June 3 0, 2011
(in millions qf dollars)
Governmental
Activities
2010 2011
$36.0 $76.8
82
22 3.3
15 3.2
3.2 3.3
Business -Type
Activities
2010 2011
11.7 32.1
02 O 2
Total
Total 0,,o Change
2010 2011 2010-2011
$36.0 576.8
&2
11.7 311
12 3.3
2.5 3.2
334 3.5
Total Outstanding Debt S5_21 s6 -4,o
85.8%
The City's long-term debt increased $54.9 million from prior year as a result of the following
transactions:
• Total payments to reduce long -tete obligations were $14.8 million, which included the payoff
of the Marine Base Project Area Notes Payable of $8.2 million,
• The City issued 2010 Marine Corp Aviation Station -Tustin Redevelopment Project Area Tax
Allocation Bonds for $44.1 million for the financing of redevelopment activities within the
project area, primarily the extension of Tustin Ranch Road.
• The Public Financing Authority issued $20.7 million Water Revenue bonds to complete the
reconstruction of the Rawlins Water reservoir.
Additional information on the Cityr`s long-term debt can be found in the notes to the basic financial
statements section of this report starting on page 50.
4:1
See independent auditors' report.
-12-
CITY OF TUSTIN
Management's Discussion and Analysis (Unaudited)
June 3O,2011
* The unemployment rate for Orange County, California area was 8. I% as of November 2011.
This is a 1.4% decrease from November 2010.
* Due to the recession over the past two years, the local economy was significantly impacted by
the decline in the financial services and construction sectors. During fiscal year 2010-2011.
Orange County has seen a slight increase in activity in the area of financial services and
construction sectors. Also the decrease in unemployment has helped to contribute to the
increase in sales tax.
* The City's sales tax revenues increased $2.6 million to $18.6 from prior fiscal year and are
expected to increase slightly ($0.7 million) for fiscal year 2011-2012. Property tax revenues
increased $1.8 from prior fiscal year, but are expected to remain flat for fiscal year 2011-2012.
The City Council adopted the fiscal year 2011-2012 Budget with total appropriations of
$179.8 million. The General Fund fiscal year 2011-2012 budgeted appropriations are $53.1 million.
This reflects an increase in appropriations of $5 million due to the increase in transfers from the
General Fund to the Liability fund, Unemployment fund, Workers Compensation Fund and
Information Technology Funds to meet minimum self-insurance reserve levels based on recent
actuaries. Due to the critical economic conditions the City Council will be reviewing the City's
financial condition in February 2012.
Requests for Information
This financial report is designed to provide a general overview of the City's finances for all those with
an interest in the government's finances. Questions concerning any of the information provided in this
report or requests for additional financial information should be addressed to the Finance Director,
City of Tustin, 300 Centennial Way, Tustin, California, 92780.
See independent auditors' report.
-13-
The page left blank intentionally
-14-
CITY OF TUSTIN
STATEMENT OF NET ASSETS
Julie 30, 2011
See independent auditors' report and notes to basic financial staternents.
-15-
Governmental
Business -type
Activities
Activitv
Total
ASSETS:
Cash and investments
S 1321356,903
S 23.598,315
S 155,955,218
Receivables:
Accounts
5,461 ,966
2.251,894
Interest
142,640
18,140
164t780
Loans
33,520,547
700
33,521,247
Due from other government,;
1,741,713
-
1.74 1 .77 13
Allowance for uncollectibles
(31147,347)
(33,147,3471)
Internal balances
1,727,456
(1,727,456)
-
Prepaid expenses and deposits
150,935
150,935
Land held for resale
145,779,527
-
145,779,527
Deferred bond issuance costs
1,287,745
343,298
1,631 043
Restricted assets:
Cash and investments with fiscal agents
49,516,890
2,988,038
52,504,928
Capital assets:
Not being depreciated
121 A78.086
2,443,351
123.921,437
Being depreciated, net
261,608,575
.31,483,7221
2293,092,297
TOTAL ASSETS
721.625,636
61,400,002
783,025,638
LIABILUTIES:
Accounts payable and accrued liabilities
13300,733
2,100,378
15,401,111
Interest payable
1,089,116
210,243
1,299359
Deposits payable
6,418,91(})
328,071
6,746,990
Unearned revenue
2,075,138
-
2,075,138
Noncurrent liabilities:
Due within one Fear
8,830,225
957.251
9,787.476
Due in more than one year
77,7136,113
31,389,895
109.126,008
TOTAL LIABILITIES
109,450-144
34,985,838
144,436,082
NET ASSETS:
Invested in capital assets, net of related debt
378,911,546
20,871492
399,784,038
Restricted for:
Corm-nunity services
17,904,381
-
17,904,381
Public salety
266,592
266,592
Public works
76,986,905
764986.905
Debt service
21,5611,617
21,5610,617
Unrestricted
—116,545,351
5,54L672
122,08-7,023
TOTAL NET ASSETS
S 612,175,392
S 26,414,164
S 638,589,556
See independent auditors' report and notes to basic financial staternents.
-15-
STATEMENT OF ACTIVITIES
For the vear ended Aline 30, 2011
Business -type activity:
Water 12,578,667
Total 86,830A29
lenses
Governmental activities:
Charge,,;
General government
7,854,361
Public safety
28,621807
Public works
19,809,907
Connnunitv set -vices
13, 150,089
Interest on long-term liabilities
4,814,598
Total goverranental activities
74,251,762)
Business -type activity:
Water 12,578,667
Total 86,830A29
12,422,746 -
19,206,636 3,441,281 S 3,395,929
General revenues:
Taxes:
Property
Franehise
Transient occupancy
Business license
Sales taxes shared state revenues
Motor vehicle taxes shared state revenues
Earnings on investments
Miscellaneous
Total general revenues
Change in net assets
Net assets at beginning of year, as restated
Net assets at end of year
See independent auditors' report and notes to basic financial statements,
- 16-
Pros -ran Revenues
Charge,,;
Operating
Capital
for
Grants and
Grants and
Sendces
Contributions
Contributions
1,109,150
59,559
$
I � 196,830
374,799
1508,904
2,443,057
3,349.834
969,006
563,866
46,095
6,783,890
3,441,281
3,395,929
12,422,746 -
19,206,636 3,441,281 S 3,395,929
General revenues:
Taxes:
Property
Franehise
Transient occupancy
Business license
Sales taxes shared state revenues
Motor vehicle taxes shared state revenues
Earnings on investments
Miscellaneous
Total general revenues
Change in net assets
Net assets at beginning of year, as restated
Net assets at end of year
See independent auditors' report and notes to basic financial statements,
- 16-
Net (Expense) Revenue and
-
n Net Assets
Chan -es in Net Assets
1,648,319
Governmental Business -type
1,648,3 19
Activities L—Ii—vilv
Total
(16,685,652) $ -
$ (6,685,652)
(27,051.178) -
(27,051,178)
(10,508,112) -
(14,548,112)
(11,571,122) -
(11,571,122)
-
(4,814,598)
(60,630,662)
(60,630,662)
(155,921) J]55,921)
(60,630,662) (155,921)
(60,786,583)
30,205,879
-
30,205,879
1,648,319
-
1,648,3 19
142,915
-
142,915
358,526
-
358,526
18,597,453
-
18,597,453
6.189,249
-
6,189,249
2,358,847
158,242
2,517,089
1,700,323
19,064
1,719,387
61,241,511.
117,34E
61,378,817
570,849
21,385
592,234
611 ,604,543
26,392,779
637,997,322
612,175.392
$ 26,414,104
S 638,589,556
-17-
BALA'NC'E SHEET
GOVERNMENTAL FUNDS
June 30, 2011
ASSETS
Cash and investments
Cash and investments with fiscal agents
Receivables:
Accounts
Interest
Loans
Notes
Due from other governments
Allowance for uncollectibles
Due from other funds
Advances to other funds
Prepaid items and deposits
Land held for resale
LIABILITIES AND FUND BALANCES
LIABILITIES:
Accounts payable and accrued liabilities
Due to other funds
Advances from other funds
Deposits payable
Deferred revenue
TOTAL LIABILITIES
FUND BALANCES (DEFI(,'IT)-
Nonspendable
Restricted
Assigned
Unassigned
TOTAL FUND BALANCES (DEFICIT)
To,rAL LIABILITIES AND FU'ND BALANCES
See independent auditors' report and notes to basic financial statements,
_18_
Marine Base
Prqject Area
Debt Service
Genera, Fund
$ 22,070,894
- 2,827,620
4,293,078 88,876
17,643 -
1,741
6,992, 105
115,105 -
144,071,850
185,726,302 S 9,908.601
5,77(v 112
S 2,472,407
-
8,263,285
20,976,317
-
6,407,983
-
935,776
698,189
34,096,182
11,433,881
144,186,955 6,293.916
- 2,827,620
7,443.1165 (10,646,816)
151,630,120 ([,525,286)
S 185,726.302 S 9,908,601
CFD
4,628,397
13,300,733
Construction
Other
Total
Capital Prqjects
Govemmental
Governmental
Fund
Funds
Funds
-
110,286009
132,3567903
39,247,336
7,441,934
49,516,890
-
1,080,012
5,461,966
-
124.997
142,640
-
1,095,904
1,095,904
-
32t424,643
32,424,643
(342,647)
(3,546,2298)
1,741,713
123,844,343
(33,147,347)
(33,147,347)
-
13,416,019
15,711,668
22,703,773
35,830
150,935
-
1,7,07,677
145,779,527
S 39,247,336
136,761,327
371,643,566
423,817
4,628,397
13,300,733
502,734
4.650,000
13,416,0 19
-
-
20,976.3 17
10.936
6A18,919
-
3,627,651
5,261,610
926,551
12,916,984
59,373,598
-
16,058,797
166,539,668
38,320,785
89,524,876
130,673,281
-
18,603,317
18,,603,317
(342,647)
(3,546,2298)
38,320.785
123,844,343
312,269,968
39,247,336 136,7161,327 S 371,643,566
-19-
The page left blank intentionally
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS
June 30, 2011
Fund balances - total governmental funds S 312,269,968
Amounts reported for governmental activities in the Statement of Net Assets are
different because:
Capital assets net of depreciation have not been included as financial resources in
governmental funds. 383,086,661
Long-term liabilities applicable to the City's governmental activities are not due and payable it
the current period and accordingly are not reported as fund liabilities. Also, Bond issuance
costs are not recorded as assets under the modified accrual basis of accounting. All liabilities,
both current and long-term, are, reported in the Statement of Net Assets.
Balances at June 30, 2011 are:
Tax allocation bonds
S(77,6005000)
Claims and judgments payable
(3,286,318)
Compensated absences
(1282,119)
Post employfaent benefits obligation
(3,171,070)
Deferred charges for issuance costs
1,287,745
Bond discount
872,665
Bond premium
(99A96)
Total long-term liabilities
(85,278,593)
Accrued interest payable for the current portion of interest due on long-term
liabilities has not been reported in the governmental funds. (1,089,116)
Certain revenues in the governmental funds are deferred because they are not
collected within the prescribed time period after year-end. Therefore, they
are revenue on the accrual basis used in the government -wide statements. 3,186,472
Net assets of governmental activities 612,175,392
See independent auditors' report and notes to basic financial statements,
-21 -
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For the year ended June 30, 2011
REVENUES:
Taxes
Licenses and permits
Fines and forfeitures
Investment income
Intergovernmental revenue
Charges for services
Rental income
Contributions from property owners - special assessments
Other revenue
TOTAL REVENUES
EXPENDITURES:
Current:
General government
Public safety
Public works
Community services
Capital outlay
Debt service:
Principal retirement
Interest and fiscal charges
Bond issue costs
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER
(-UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES):
Transfers in
Transfers out
Sale of property
Discount on bonds
Issuance of debt
TOTAL OTHER FINANCING SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES (DEFICIT) - BEGINNING OF YEAR (AS RESTATED)
FUND BALANCES (DEFICIT) - END OF YEAR
See independent auditors' report and notes to basic financial statements.
-22-
Marine Base
Project Area
Debt Service
General Fund
S 36,588,482 $ 9,800,395
71(x,144
893,642 -
911,146 2,952
1,120,299 -
4,915,295
180,520
2,234,187
47,659,715 9,893,34 -
7,432,956
27,410,893
9,11 O 621 -
2,752,91 1
1,752,911 4,999,120
1,107,607 -
- 8,199,000
863,861 662,2241
- 429t731
48,678,849 14,290,092
(1,019,134) (4,486,745)
2,620.,957
(24,057)
18,138 -
4,170,000
2,639,095 3.257.232
1,619,961 (1.229,513)
150 O 1 O, 159 (295,767)
$ 151,630,120 S (1,,525,280)
CFD
Construction
Other
Total
Capital ProJects
Governmental
Governmental
Fund
Funds
-----Funds
$
S 10,935,134
57,324,011
-
716,144
-
893,642
2,098
716,019
1,632,215
-
4,252,606
5,372,905
105,190
5,020,485
-
177,510
358,030
1,593,475
-
1.593,475
-
90,865
2,425,052
1595,573
16,2717,324
75,335,959
-
72,972
7,505,928
97,621
27,508,514
-
9.11 0621
-
4,988,938
12,740,969
1,150,346
7.721,717
9,979,670
-
2,460,000
10,659,000
139,232
2t466JO1
4 131,4345
-
-
429,731
1289,578
17,807,349
82.065,868
305,995
(1.530,025)
(6,717 29,909)
24.'057
057
2,645,014
(2,620,957)
(1645,014)
18,138
(888,711)
40M0,000
44,170,000
-
----737,403, 1 (K)
43,299,427
305,995
35,873,075
36,569,518
1 7 11
38,0141,790
87,971,268
275,70101,4501275,70101,4501-
$ 38,320,785 $ 123,844,343 $ 311269.968
-23-
RECONCILIATION OF THE STATE LENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
For the year ended June 30, 2011
Net change in fund balances - total governmental funds
Atnounts reported for governmental activities in the Statement of Activities are 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 as
depreciation expense. This is the amount by which capital expenditures exceeded
depreciation and disposition of capital assets in the current period:
Capital expenditures
Disposition of capital assets
Depreciation expenses
The issuance of long-term debt provides current financial resources to governmental
funds, while the repayment of the principal of long term -debt and changes in other
long-term liabilities affects 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 -teen liabilities:
Bond issuance
Discount on bond issuance
Bond issuance costs
Principal repayments
Amortization of bond discount
Amortization of bond premium
Amortization of bond issuance costs
Postemployment benefits obligation
Claims and judgments payable
Compensated absence,
Some revenues reported in the Statement of Activities are not considered to be
available to finance current expenditures and therefore are not reported as revenues
in the governmental funds.
Net change in deferred revenues
St.yrne expenses reported in the Statement of Activities do not require the use of
current financial resources and therefore are not reported as expenditures in the
governmental funds.
Oct change in accrued interest payable on long-term liabilities
Change in net assets of governmental activities
See independent auditors' report and notes to basic financial statements,
$ 8J21,160
(997,854)
(9,319,337)
$(44,170,000)
888,711
429,731
10,659,000
(16,046)
3,532
(31,510)
(710,054)
(1,045,355)
(106,3{11)
(2,196,031)
(34,098,292)
966,303
(670,649)
STATEMENT OF NET ASSETS
PROPRIETARY FUND
jure 30, 2011
NONCURRENT ASSETS:
Restricted cash and investments with fiscal a(lents
Business -type
Deferred bond issuance costs
Activity
Capital assets:
Water
Not being depreciated
Enterprise
ASSETS
Fund
CURRENT ASSETS:
37,258,409
Cash and investments
$ 21598,315
Accounts receivable
2,251,894
Interest receivable
18,140
Prepaid expenses
700
TOTAL CURRENT ASSET'S
25,869.049
NONCURRENT ASSETS:
Restricted cash and investments with fiscal a(lents
2,988,038
Deferred bond issuance costs
343,298
Capital assets:
Not being depreciated
2,443,351
Being depreciated, net
31,483,721
TOTAL NONCURRENT ASSETS
37,258,409
TOTAL ASSETS 63,127,458
LIABILITIES
LIABILITIES:
CURRENT LIABILITIES.
Accounts payable and accrued liabilities
2,100 378
Advances from other funds
1,727,456
Deposits payable
328,071
Compensated absences
217,251
Interest payable
210,243
Bonds payable
740.000
TOTAL CURRENT LIABILITIES
5,-323,399_
LONG-TERM LIABILITIES:
Compensated absences 24,139
Bonds payable .31,3615,756
TOTAL LONG-TERM LIABILITIES 31,389,895
TOTAL LIABILITIES 36,713,294
NET ASSETS:
Invested in capital assets., net of related debt 20,872,492
Unrestricted 5,541,672
TOTAL NET ASSETS -1-261,414,164
See independent auditors' report and notes to basic financial statements.
mmmmnm��
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
PROPRIETARY FUND
For the year ended June 30, 2011
OPERATING REVENUES:
Charges for services
OPERATING EXPENSES:
Personnel services
Purchased water and power
Maintenance and operation
Depreciation and amortization
TOTAL OPERATING EXPENSES
OPERATING INCOME
NONOPERATING REVENUES (EXPENSES):
Investment income
Other income
Interest expense
TOTAL, NONOPERATING REVENUES (EXPENSES)
CHANGE IN NET ASSETS
TOTAL NET ASSETS AT BEGINNING OF YEAR
TOTAL NET ASSETS AT END OF YEAR
See independent auditors' report, and notes to basic financial statements,
-26-
Business -type
Activity
Water
Enterprise
Fund
$ 11422,746
2,551,420
2,386,984
5,628,031
1,343,779
11,910,214
512,532
158,2142
19,064
_(668,453)
(491,147)
21.385
26,392,779
$ 26,414,164
STATEMENT OF CASH FLOWS
PROPRIETARY FUND
For the year ended June 30, 2011
NET CASH PROVIDED BY
OPERATING ACTIVITIES 1,930,752
CASH FLOWS FROM CAPITAL AND
Business -type
RELATED FINANCING ACTIVITIES:
-Activity
Acquisition of capital assets
Water
Cash Paid to other funds for capital assets
Enterprise
Proceeds from issuance of debt
Fund
CASH FLOWS FROM OPERATING ACTIVITIES -
(269,640)
Receipts from customers
S 12J70,877
payments to suppliers
(6,534, 142)
Cash paid to other funds for services
(1,200,000)
Payments to employees
(2,5(35,983)'
NET CASH PROVIDED BY
OPERATING ACTIVITIES 1,930,752
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Acquisition of capital assets
(150,532)
Cash Paid to other funds for capital assets
(413,735)
Proceeds from issuance of debt
19,269,637
Issuance cost
(269,640)
Principal Paid on bonds
(710,000)
Interest paid
INET CASH PROVIDED BY CAPITAL
AND RELATED FINANCING ACTIVITIES 17,140,569
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment income 153,726
NET INCREASE IN CASH
AND CASH EQUIVALENTS 19,225,047
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 4,373,268
CASH AND CASH EQUIVALENTS - END OF YEAR S 23,598,315
See independent auditors' report and notes to basic financial statements. (Continued)
_27_
STATEMENT OF CASH FLOWS
PROPRIETARY FUND
(CONTINUED)
For the year ended June 30, 2201 1
RECONCILIATION OF OPERATING INCOME TO
NET CASH PROVIDED BY OPERATING ACTIVITIES -
Operating income
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation and amortization
Other nonoperating income
Change in assets and liabilities:
(Increase) decrease in accounts receivable
(Increase) decrease in prepaid costs
Increase (decrease) in accounts payable and accrued liabilities
Increase (decrease) in deposits payable
Increase (decrease) in compensated absences
NET CASH PROVIDED BY OPERATING ACTIVITIES
See independent auditors'rtpott and notes to basic financial statements.
Business -type
,P
Activity
Water
Enterprise
Fund
1,343,779
19,064
(328,511
360
291,396
57,578
34,554
1,930.7S2
001111mummm
STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES
June 30, 2011
Ban=
Cash and investments with fiscal agents
Taxes receivable
Due from City of Tustin
TOTAL ASSETS
lifflam
Accounts payable
Due to the City of Tustin
Due to bondholde-s
TOTAL LIABILITIES
0
25,730,572
110,430
139.734
124,064
1,881.390
23,975,302
I'll 11-1 1 11 111-1-1
See independent auditor's report and notes to basic financial statements,
-29-
The pmts Ie -ft blank intentionally
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
1. SUMMARYOF SIGNIFICANT ACCOUNTING POLICIES:
a. The Financial Reporting Entity:
The City of Tustin (City) was incorporated in 1927 as a "General Law" City governed by an
elected five -member city council. As required by accounting principles generally accepted in
the United States of America, these financial statements present the City of Tustin (the primary
government) and its component units. The component units discussed below are included in the
City's reporting entity because of the significance of their operational or financial relationship
with the City. These entities are legally separate from each other. However, the City of Tustin's
elected officials have a continuing full or partial accountability for fiscal matters of the other
entities. The financial reporting entity consists of: (1) the City, (2) organizations for which the
City is financially accountable, and (3) organizations for which the nature and significance of
their relationship with the City are such that exclusion would cause the City's financial
statements to be misleading or incomplete.
An organization is fiscally dependent on the primary government if it is unable to adopt its
budget, levy taxes, or set rates or charges, or issues bonded debt without approval by the
primary government. In a blended presentation, a component unit's balances and transactions
are reported in a manner similar to the balances and transactions of the City. Component units
are presented on a blended basis when the component unit's governing body is substantially the
same as the City's or the component unit provides services almost entirely to the City.
The Tustin ComMj!pi > Iedevelo nient A =eXcv (Agency) was established October 20, 1.976
pursuant to the State of California Health and Safety Code, Section 33000, entitled
"Community Redevelopment Law". Its purpose is to prepare and carry out plans for
improvement, rehabilitation, and redevelopment of blighted areas within the territorial limits of
the City of Tustin. The City provides management assistance to the Agency, and the members
of the City Council constitute the members of the Board of Directors of the Agency. The
Agency's financial data and transactions are included with the debt service fund type and
capital projects fund type.
The separate financial statements of the Tustin Community Redevelopment Agency component
unit may be obtained from the City of Tustin Finance Department located in the Tustin Civic
Center.
See independent auditors' report.
-31-
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL, STATEMENTS
(CONTINUED)
1. SUMMARYOF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) -
a. The Financial Reporting Entity (Continued):
The Tustin Public Financim-, Authority is a joint powers authority organized pursuant to the
State of California Government Code, Section 6500. The Authority exists under a Joint
Exercise of Power Agreement dated May 1, 1995, by and between the City of Tustin and the
Tustin Community Redevelopment Agency. The members of the City Council constitute the
members of the Board of Directors of the Authority. The Authority is authorized to borrow
money for the purpose of financing the acquisition of bonds, notes, and other obligations of, or
for the purpose of making loans to the City and/or to refinance outstanding obligations of the
City or Assessment Districts of the City. Separate component unit financial statements for the
Tustin Public Financing Authority are not issued.
The government -wide financial statements (i.e., the statement of net assets and the statement of
changes in net assets) report information about the reporting government as a whole, except for
its fiduciary activities. Governmental activities, which normally are supported by taxes and
intergovernmental revenues, are reported separately from business -type activities, which rely to
a significant extent on fees and charges for support. Likewise, the primary government
(including its blended component units) is reported separately from discretely presented
component units for which the primary government is financially accountable. The City has no
discretely presented component units. For the most part, the effect of interfund activity has
been removed from these statements.
The statement of activities demonstrates the degree to which the direct 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, Program revenues include 1) charges to
customers or applicants who purchase, use, or directly benefit from goods, services, or
privileges provided by a given function or segment and 2) grants and contributions that are,
restricted to meeting the operational or capital requirements of a particular function or segment.
Taxes and other items not properly included among program revenues are reported instead as
general revenues.
See independent auditors' report.
_32-
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
1. SUMMARN70F SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
b. Government -wide and Fund Financial Statements (Continued):
The underlying accounting system of the City is organized and operated on the basis of
separate funds, each of which is considered to be a separate accounting entity. The operations
of each fund are accounted for with a separate set ofself-balancing accounts that comprise its
assets, liabilities, fund equity, revenues, and expenditures or expenses, as appropriate.
Governmental 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 for the City's governmental, proprietary, and fiduciary funds are
presented after the government -wide financial statements. These statements display information
about major funds individually and other governmental funds in the aggregate for governmental
funds. Fiduciary lund statements, even though excluded from the government -wide financial
statements, include financial information that primarily represent assets held by the City in a
custodial capacity for other individuals or organizations,
c. Measurement Focus, Basis of Accounting and Financial Statement Presentation:
The goverDment-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary fund and
fiduciary fund (fiduciary funds do not have a measurement focus) financial statements. Under
the economic resources measurement focus, all assets and liabilities (whether current or
noncurrent) associated with their activity are included on their balance sheets/statements of net
assets. Operating statements present increases (revenues) and decreases (expenses) in total net
assets. 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.
Proprietary funds result from providing services and producing and delivering goods.
Nonexchange transactions, in which the City gives (or receives) value without directly
receivinggiving) (or gi) equal value in exchange include taxes, grants, entitlements, and donations,
Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all
the eligibility requirements have been satisfied. Property taxes are recognized as revenue in the
year for which they are levied. Operating revenues are those that result from providing services.
Operating expenses for proprietary funds include the cost of sales and services, administrative
expenses, and depreciation on capital assets. All revenues and expenses not meeting this
definition are reported as nonoperating revenues and expenses.
See independent auditors' report.
CITY CSF TUSTIIii
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
SUNIMARYOF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
c. Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued):
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Under the current financial
resources measurement focus, only current assets and current liabilities are generally included
on their balance sheets. The reported fund balance (net current assets) is considered to be a
measure of "available spendable resources". Governmental fund operating statements present
increases (revenues and other financing sources) and decreases (expenditures and other
financing uses) in net current assets. Accordingly, they are, said to present a summary of
sources and uses of' "available spendable resources" during a period. Noncurrent portions of
long-term receivables due to governmental funds are reported on their balance sheets in spite of
their spending measurement focus. However, special reporting treatments are used to indicate
that they should not be considered "available spendable resources" since they do not represent
net current assets. Recognition of governmental fund type revenue represented by noncurrent
receivables is deferred until they become current receivables.
Under the modified accrual basis of accounting, revenues are considered to be available when
they are collectible within the current period or soon enough thereafter to pay liabilities of the
current period. For this purpose, the government considers revenues to be available if they are
collected within 60 days of the end of the current fiscal period. Expenditures generally are
recorded when a liability is incurred, except for principal and interest on long-term liabilities,
claims and judain ients, and compensated absences, which are recognized as expenditures to the
extent they have matured. Capital asset acquisitions are reported as expenditures in
goveinmenta.1 funds. Proceeds of long-term liabilities are reported as other financing sources.
Property taxes, franchise taxes, licenses, intergovernmental revenue and interest associated
with the current fiscal period are, all considered to be susceptible to accrual and so have been
recognized as revenues of the current fiscal period. All other revenue items are considered to be
measurable and available only when cash is received by the government.
All governmental activities, business -type activities and proprietary funds of the City follow
Clove omental Accounting Standards Board (CYASB) pronouncements.
When both restricted and unrestricted resources are available for use, it is the City's policy to
use restricted resources first, then unrestricted resources as they are needed.
See independent auditors' report.
-34-
CITY 0FTi_ ST1N
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
1. SUMMARYOF SIGNTIFICANTACC" OUTINTING POLICIES (CONTINUED):
c. Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued):
Fund Classifications
The Rinds designated as major funds are determined by a mathematical calculation consistent
with GASB Statement No. 34. The City reports the following major governmental funds:
The General Fund is the primary operating fund of the City and is used to account for all
revenues and expenditures that are not required to be accounted for in another fund.
The Marine Base Project Area Debt Service Fund is used to meet the debt service requirements
of the Marine Base Project Area.
The CFD Construction Capital Proiects Fund is used to account for construction and
improvements to the. Tustin Legacy area.
The City reports the following major proprietary fund:
The MWLa�terEnt�ee Fuad is used to account for the City's water service operations to
residents and businesses.
The City's hind structure also includes the following fund types -
Governmental Funds
Special Revenue Funds are used to account for the proceeds of specific revenue sources that are
restricted by law or administrative action for a specified purpose.
Debt Service Funds are used to account for the accumulation of resources for, and the payment
of, long-term liabilities, interest, and related fiscal agent costs.
Ca ital ProLects Funds are used to account for financial resources to be used for the acquisition
or construction of major capital facilities, and for the improvement, rehabilitation, and
redevelopment of the Community Redevelopment Agency project areas.
Fiduciary Funds
Amey Funds are used to account for assets held by the City in a trustee capacity or as an
agent for individuals, private, organizations and other governments. Agency funds are custodial
in nature (assets equal liabilities) and do not involve measurement of results of operations. The
agency funds are used to account for taxes received for special assessments debt for which the
City is not obligated.
See independent auditors' report.
-35-
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
1. SUMMARN70F SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
d. Assets, Liabilities and Net Assets or Equity:
Investments are stated at fair value (the value at which a financial instrument would be
exchanged in a current transaction between willing parties other than a forced or liquidation
sale), except for certain investments which have a remaining life of less than one year when
zl.:
purchased and investment contracts, which are stated at amortized cost,
The City's proprietary fund participates in the pooling of City-wide cash and investments.
Amounts held in the City pool are available to the fund on demand and are considered to be
cash and cash equivalents for statement of cash flow purposes. Investments not held in the City
pool that are short-term investments with original maturities of three months or less from the
date of acquisition are considered cash and cash equivalents.
affamu=
Capital assets (including infrastructure) are recorded at cost where historical records are
available and at an estimated original cost where no historical records exist. Contributed capital
assets are valued at their estimated fair value at the date of contribution. Capital asset purchases
(other than infrastructure) in excess of $5,000 are capitalized if they have an expected useful
life of one year or more. Infrastructure assets with a cost exceeding $100,000 are capitalized.
Capital assets include additions to public domain (infrastructure), certain improvements
including pavement, curb and gutter, sidewalks, traffic control devices, streetlights, sewers,
storni drains, bridges, and right-of-way corridors within the City.
Capital assets used in operations are depreciated over their estimated useful lives using the
straight-line method in the government -wide financial statements and in the fund financial
statements of the enterprise fund. Depreciation is charged as an expense against operations and
accumulated depreciation is reported on the respective statement of net assets. The lives used
for depreciation purposes of each capital asset class are:
Buildings
Improvement other than buildings
Property and plant
Machinery and equipment
Infrastructure
See independent auditors' report.
-36-
5 - 40 years
5 - 40 years
5 - 40 years
4 - 10 vears
25 - 75 years
CITY OFTuSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
1. SUS MAR SIGNIFICANT ACCOUNTING POLICIES (CONTINUED). -
d. Assets, Liabilities and Net Assets or Equity (Continued):
Land Held for Resale
--I=-
I-allu 11 --fu Jul SMUMS-MMIC 177V icauzaoiu-77777 Lietcrunnect omy
upon the execution of a disposition and development agreement.
Under California law, property taxes are assessed and collected by the counties up to 1% of
assessed value, plus other increases approved by the voters. The property taxes go into a pool,
and are then allocated to the cities based on complex fon-nulas. Accordingly., the City of Tustin
accrues as revenues only those taxes which are received within 60 days after year end in the
fund financial statements.
Property Tax Calendar
Property taxes are assessed and collected each fiscal year according to the following property
tax calendar:
Lien date
January I
Levy period
July I to June 30
Levy date
On or before 4 1h Monday in September
Due date
November I - V installment
February I - 2'd installment
Collection date
December 10 - I" installment
I 01 ),d 1i _
April - installment
Interest and penalties are assessed after the collection date.
See independent auditors* report.
-37-
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
1. SUMMARYOF SIG NIFICAINIT ACCOUNTING POLICIES (CONTINUED) -
d. Assets, Liabilities and Net Assets or Equity (Continued):
All vested vacation and compensatory leave time is recognized as an expense and as a liability
in the proprietary type fund at the time the liability vests. Governmental fund types recognize
the vested vacation and compensatory time as an expenditure in the current year to the extent it
is paid during the year or is due and payable at year-end. Accrued vacation and compensatory
time relating to governmental funds is included as a liability in the long-term, liabilities as those
amounts are payable from future resources, and within the statement of net assets for amounts
relating to the proprietary fund type.
2. CASH AND INVESTMENTS -
Cash and Investments
Cash and investments as of June 30, 2011 are classified in the accompanying financial statements
as follows:
Statement of Net Assets:
Cash and investments $ 155,955,218
Cash and investments with fiscal agents 52,504,928
Fiduciary Funds:
Cash and investments with fiscal agents 15,730,572
Total Cash and Investments&—
2-14 1-99
�.71S
Cash and investments as of June 30, 2011 consist of the following:
Cash on hand 8,850
Deposits with financial institutions 2,524,374
Investments --231.,657.494
Total Cash and Investments "?1AT
—419 71A
See independent auditors' report.
-38-
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
2. CASH AND INVESTMENTS (CONTINUED):
Investments Authorized by the California Government Code and the City's Investment
Policy
The table below identifies the investment types that are authorized for the City. The table also
identifies certain provisions of the City`s investment policy that address interest rate risk and
concentration of credit risk. This table does not address investments of debt proceeds held by fiscal
agents that are governed by the provisions of debt agreements of the City, rather than the general
provisions of the California Government Code or the City's investment policy.
N/A - Not Applicable
See independent auditors' report.
-39-
Authorized
Maximum
Maximum
Investment Types
by Investment
Percentage
Investment
Authorized by State Law
Polio
Maturity
of Portfolio
in One Issuer
Local Agency Bonds
Yes
5 years
None
None
U.S. Treasury Obligations
Yes
5 years
None
None
U.S. Agency Securities
Yes
5 years
None
None
Banker's Acceptances
Yes
180 days
40%
30%
Commercial Paper
Yes
90 days
15%
10%
Negotiable Certificates
of Deposit
Yes
5 years
30%
None
Repurchase Agreements
Yes
I year
None
None
Reverse Repurchase
Agreements
No
92 days
220% of
base value
None
Medium -Term Notes
Yes
5 vears
30%
None
Mutual Funds
Yes
N/yk
15%
10%
Money Market Mutual Funds
Yes
N/A
10%
10%
Mortgage Pass -Through
Securities
Yes
5 years
None
None
County Pooled Investment Funds
Yes
N/A
None
None
Local Agency Investment
Fund (LAIF)
Yes
N/A
None
None
JPA Pools (other Investment
Pools)
Yes
NWA
None
None
N/A - Not Applicable
See independent auditors' report.
-39-
CITY OFTUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
1. CASH AND INVESTMENTS (CONTINUED):
Investment of debt proceeds held by bond trustee is governed by provisions of the debt agreements,
rather than the general provisions of the California Government Code or the City's investment
policy. The table below identifies the investment types pes that are authorized for investments held by
bond trustees. The table also identifies certain provisions of these debt agreements that address
interest rate risk and concentration of credit risk.
N/A Not Applicable
Disclosures Relating to Interest Rate Risk
Maximum
Percentage
of Portfolio
None
None
None
None
None
None
None
None
None
Maximum
Investment
in One Issuer
None
None
None
None
None
None
None
None
None
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 combination of shorter to and longer to
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 provide the cash flow and liquidity
needed for operations,
As of June 30, 2011, the City had the following investments. Except for the investments in money
market funds and investment contracts, all investments are in the City's internal investment pool.
See independent auditors' report.
Maximum
Authorized Investment Tvve
MatqdlK_
U.S. Treasury Obligations
None
U.S. Agency Securities
None
Banker's Acceptances
270 days
Commercial Paper
180 days
Money Market Funds
N/A
Investment Contracts
30 years
Certificates of Deposit
None
Corporate Notes
None
Repurchase Agreements
None
N/A Not Applicable
Disclosures Relating to Interest Rate Risk
Maximum
Percentage
of Portfolio
None
None
None
None
None
None
None
None
None
Maximum
Investment
in One Issuer
None
None
None
None
None
None
None
None
None
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 combination of shorter to and longer to
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 provide the cash flow and liquidity
needed for operations,
As of June 30, 2011, the City had the following investments. Except for the investments in money
market funds and investment contracts, all investments are in the City's internal investment pool.
See independent auditors' report.
CITY OF TI
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
2. CASH AND INVESTMENTS (CONTINUED):
Disclosures Relating to Interest Rate Risk (Continued)
Information about the sensitivity of the fair values of the City's investments
(including investments
held by bond trustee) to market interest rate fluctuations is provided by the following table that
shows the distribution of the City's investments by maturity-.
Remainina Vnfllril in Mont'
12 Months 13-24 25-60
Over 60
Investment Type --ar Less Months Months
Months Total
United States Treasury Bills S 9,999,7 10 S -
9.999,7I0
United States Treasury Notes 3,013,125 7,036,681 1992.7134
13,042,540
I.Jnited States Government
Sponsored Agency Securities:
FNMA 9,998,700 - -
9,998,700
FHLM(, 9,998,800 - -
9,99&800
State Investment Pool 79,069,583 - -
- 79,069,583
Orange County Investment Pool 15.283,146 - -
- 15,283,146
Government reserve money
market fund 11,034,158 - -
- 11,034,158
Corporate notes 4,995,356 - -
- 4,995,356
Held by Fiscal Agents:
Money market funds 71,095,305 - -
- 71,095,305
Investment contracts - 14189.243
5.950.953 7.140.196
S,— 53-
SIM 7 �4
A
See Independent auditors' report.
-41-
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
2. CASH AND INVESTMENTS (CONTINUED):
Disclosures Relating to Credit Risk
Generally., credit risk is the risk that air issuer of an investment will not fulfill its obligation to the
C�
holder of the investment. This is measured by the assignment of a rating by a nationally recognized
statistical rating organization. Presented below is the minimum rating required by (where,
applicable) the California Government Code, the City's investment policy, or debt agreements, and
the Standard and Poor's actual rating as of year end for each investment type.
Investment
IJ,S.Trcasurs Bill's
U.S. Treasury Notes
U.S. Government
sponsored Agency
'securities:
FNMA
F1 ILMC
State Investment pool
Orange County
InNestntent Pool
Gove-ament reserve
money market funds
Corporate notes
Held Im, Fiscal Agents:
Money market funds
Investment contracts
Total Minimum Exempt
as of Leg
,a] front Not
lune _30, 2011 _—Rating Dig sure SAA -ted
9,999,710 N/A S 9,999,710 IS S
13,042,540 N,A 13,042,540
9,998,700 N,A
9,998,800 NI/A
7
NA
15,283,146 N''I"A
11,034,158 A
4,995,356 AA
71,095.305 A
t4Q 1 �)_6 MA
9,ca)8,?0
0
9,998,8(to
11,034,158 -
2,001,038 2,994,;18
79,069,583
15,283.146
Total S 23 -Q42 �'50 $ - FIR 121 1 S 99&,18 10' 1 492 92�
Subsequent to June 30, 2011, Standards and Door's reduced the rating of the United States
Government Sponsored Agency Securities from AAA to AA+.
See independent auditors' report.
_42_
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
2. CASH AND INVESTMENTS (CONTINUED):
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 California Government Code. The City does not have
Investments in any one issuer (other than U. S. Treasury securities, mutual funds, and external
investment pools) that represents 5% or more of total City investments.
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 recover 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 failure 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's investment policy do not contain legal or policy requirements that would limit the exposure
to custodial credit risk for deposits or investments, other than the following provision for deposits:
The California Government Code requires that a financial institution secures deposits made by
state or local governmental units by pledging securities 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 also 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, 2011, none of the City's deposits with financial institutions ill excess of federal
depository insurance limits were held in uncollateralized accounts. As of June 30, 2011, the City's
investments in the following investment types were held by the same broker-dealer (counterparty)
that was used by the City to buy the securities:
Reported
Investment Ty e�.. Amount
U.S, Treasuries S 23,042,250
Federal Agency Securities 19.997,500
Corporate Notes 4,995,356
See independent auditors' report.
-43-
CITY CSF TUT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
2. CASH AND INVESTMENTS (CO-NTTINUED)-
Invest ment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (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's investment in this pool is reported in the accompanying financial
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 withdrawal is based on the accounting records maintained by LAIF, which are recorded on an
Z�l
amortized cost basis.
Investment in County Investment Pool
The Orange County Investment Pool Fund (OCPIF) is a pooled investment fund program governed
by the Orange County Board of Supen4sors, and is administered by the Orange County Treasurer
and Tax Collector. Investments in OCRIF are highly liquid as deposits and withdrawal can be made
at any time without penalty. The City's fair value of its share in the pool is the same value of the
pool shares, which amounted to $15,283,146. Information on OCPIF's use of derivative securities
in its investment portfolio and 0CP1F's and the City's exposure to credit, market, or legal risk is
not available,
1 LOA -NIS RECEIVABLE:
Multi -Family Develgpm�ent Loan- The Agency provided a Bridge Loan to Senior Apartment
Developer to assist in the development of 53 affordable rental units. The total outstanding balance
as of June 30, 2011, was $347,510.
Home Improvement Loans: The Agency has provided deferred home improvement loans to low
and moderate income households (rental and ownership). These deferred loans are due upon sale,
refinance, or when the rental units are no longer available as affordable units. Term is 30 years'
The total outstanding balance as of June. 30, 2011, was $67,468. An allowance of $67,468 has
been recorded to reflect the amount of the loans not expected to be collectible.
Homebqyq-Program ,Loans; The Agency has provided down payment assistance to qualified first
time homebuvers. The loans provided in the Ambrose Lane Development are due beginning
in 2016, or when the homeowner sells or refinances. The loans provided in the Tustin Grove
Development are due when the homeowner sells or refinances. If the homeowner does not sell or
refinance before July 2015, the loan is forgiven. The total outstanding balance as of June 30, 2011,
was $680,926. An allowance of $655,237 has been recorded to reflect the amount of loans not
expected to be collectible.
See independent auditors' report.
CITY OFTUSTI N
NOTES TO BASIC FINANCIAL, STATEMENTS
(CONTINUED)
June 30, 2011
4. INTERFUND RECEIVABLE, PAYABLES AND TRANSFER&
The composition of interfund balances as of June 30, 2011 is as follows:
Due To Due From
General Fund Marine Base Project Area
Debt Service Fund
CFD Construction
Capital Projects Fund
Other Governmental Funds
Amount
The amounts loaned from General Fund to Marine Base Project Area Debt Service Fund, CFD
Construction Capital Projects Fund and Other Governmental Funds, are to provide short-term loans
to, fund operations.
The composition of interfund advances as of June 30, 2011 is as follows:
Advances To Advances From Amount
General Fund Marine Base Project Area
Debt Service Fund 6,992,105
Other Governmental Funds 13,984,212
Water Enterprise Fund Other Governmental Funds 1,727,456
On April 6, 2010, the City entered into a promissory note with Tustin Water Enterprise Fund in the
amount of $2,123,437 to provide the cash necessary y to meet the bond covenant The Water
Enterprise Fund promised to pay the City on June 1, 2015, the principal amount of $2,123,437 with
interest accrued thereon from April 6. 2010 to the maturity date at the rate of 3.5% per annum,
compounded semiannually on June I and December I in each year, commencing June 1, 2010, The
total amount receivable from Water Fund as of June 30, 2011 for other governmental funds is
$1,727,456.
See independent auditors' report.
-45-
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
4. INTERFUND RECEIVABLE, PAYABLES AND TRANSFERS (CONTINUED):
Advances To and Advances From (Continued)
On December 31, 2008, the City entered into a promissory note with the Agency in the amount of
518,881,750. The City promised to pay the Agency on December 1, 2013, the principal amount of
$18,881,750 with interest accrued thereon from December 30, 2008 to the maturity date at the rate
of 4,25% per annum, compounded semiannually on June I and December I in each year,
commencing June 1, 2009. The total amounts receivable from the General Fund as of
June 30, 2011 for the Marine Base Project Area Debt Service Fund and Other Governmental Funds
are $6,992,105 and $13,984,212, respectively,
Interfund Transfers
The composition of interfund transfers for the year ended June 30, 2011 is as follows:
Transfers In Transfers Out Amount
General Fund Other Governmental Funds $ 2,620,957
Other Governmental Funds Marine Base Project Area
Debt Service Fund 24,057
A transfer from other Z:�crovernmental funds was made to reimburse the General Fund per adopted
budget for fiscal year 2010-11 and for activities related to the reimbursement agreement between
the City and the Agency.
5. LAND TRANSFER FROM THE UNITED STATES GOVERNMENT:
On May 13, 2002, the City entered into an agreement with the United States of America (the
Government) wherein the 6overnment agreed to convey to the City a portion of the former Marine
Corps Air Station Tustin (MCAS Tustin). The transfer is pursuant to the authority provided by
Section 2905(b)4 of the Defense Base Closure and Realignment Act of 1990, as amended, and the
implementing regulations of the Department of Defense to convey surplus property at a closing
installation to the local redevelopment authority at no cost for economic development purposes.
See independent auditors' report.
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
5. LAND TRANSFER FROM THE UNITED STATES GOVERNMENT (CONTINUED) -
The real properties, consisting of approximately 1,153 acres of land located within the bounds of
the former MCAS Tustin, were conveyed to the City in multiple parcels, by separate conveyances,
Parcel Group 1, (consisting of approximately 977 acres), was conveyed to the City on.
May 14, 2001 A portion of Parcel Group I (consisting of approximately 23 acres) was conveyed to
the City during fiscal year 2003 and the remainder was conveyed to the City in fiscal year 2004.
Conveyance of Parcel Group 11 (consisting of a total of 49 acres) was conveyed in September 2006
and May and July 2003. Conveyance of Parcel Group III (consisting of approximately 18 acres)
and Parcel Group IV (consisting of approximately 119 acres) were conveyed in September 2006
and April 2008, respectively. As part of the agreement, the City also received certain personal
property and utilities on the base.
Subsequent to the conveyance of properties from the Government, the Agreement required the City
to convey approximately 22 acres to Santa Ana Unified School District (SAUSD), 15 acres to
Rancho Santiago Community College District (RSCCD) and 65 acres to South Orange County
Community College District (SOCCCD) subject to certain conditions as detailed in the agreement
with the Government and the terms and conditions of the settlement and release agreements
between the City and SAUSD and the City and the RSCCD.
The SAUSD declined the conveyance of the land from the City and instead of receiving the land,
the SAUSD was paid $60,000,000 under an agreement dated December 20, 2002. The City
conveyed the RSCCD parcel during fiscal year 2003. Conveyance of the SOCCCD parcel
happened in fiscal year 2004.
The value of the remaining parcels that have been conveyed to the City as of June 30, 2011 is
S101,558,282 and is included in the total of the land held for resale reported in the General Fund.
The value was based on an assumption that most of the land will be sold in a bulk sale to a single
developer and the remaining property not sold will be park space or conveyed to other
governmental agencies.
See independent auditors' report.
-47-
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
6. CAPITAL ASSETS:
A summary of changes in the Governmental Activities capital assets for the year ended
June 30, 2011 is as follows:
Balance at
July 1, 2010
As Restated Balance at
-(See Note 18 Additions Deletions June 30 2011
Capital assets, not being depreciated:
Land 44,259,596 $ $ 44,259,596
Right of way 42,408,200 42,408,200
Construction in progress 31,846.583 5 �504,— t2� 113 540A06) �34810 290
_
Total capital assets, not
being depreciated —18514,"1 -79 5x504,11:3 (2,540.406 121 �478 086
Capital assets, being depreciated:
Buildings 49,837,024 613,469 50,450,493
Improvements other than buildings 14,136,665 - 14,136,665
Machinery and equipment 12,762,7338 1,286,079 (273,153) 13,775,664
Infrastructure 283,754,422 3257,905 -12167,132) - 284 345,195
Total capital assets,
being depreciated 360,490,849 -'49 5 157AL-1 940,285) 362.708017
Buildings (9,207,727) (1,046,117) (10,253,844)
Improvements other than buildings (2,704,931) (503,861) (3,208,792)
Machinery and equipment (10,257,452) (9591585) 216,115 (11,000,922)
Infrastructure --j2L-�552426) ---(6 �809774) 1 72_6 316--(2LO-35884)
'total accumulated depreciation (23 �722536)�319337) 1,942;431101.099 4�42)
Total capital assets,
being depreciated, net
Total governmental activities
capital assets, net
See independent auditors' report.
266§768.313 x,161,884) — L4 �161884) --j2�97—.854)— 26
1�608575
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
6. CAPITAL ASSETS (CONTINUED):
Depreciation expense was charged to functions/programs of the govenimental activities as follows:
Z111
General gave rninent 102,783
Public safety 472,891
Public works 8,247,638
Community services 496,,025
A summary of changes in the Business -type Activities capital assets for the year ended
June 30, 2011 is as follows:
Capital assets, not being depreciated
Land
Construction in progress
Total capital assets,
not being depreciated
Capital assets, being depreciated:
Buildings and improvements
Property, plant and equipment
`total capital assets,
being depreciated
Less accumulated depreciation for:
Buildings and improvements
Property, plant and equipment
Total accumulated depreciation
Total capital assets, being
depreciated, net
Total business -type activity
capital assets, net
See independent auditors' report.
Balance at
Balance at
July 1.201 0
Additions
Deletions June 30 2011
1,177,216 $
-
S 1,177,216
ll46l_j7
—174091
--154113) �1266 35
232,3 73
— 17-4091
54 113.)�43
4 351
9,546,474
21,898
9,568,372
422831,232
86-56
�42839 888
�52377 706
—30554
�52408 260
(3,681,855)
(268,565)
- (3,950,420)
(j5 �941995)
j1 �032123)
- (16,974x118)
L1_9023 8-50)---1!
�3W688)
- (20 �924.538)
�32753 856
_jL �2701 34)
- L51 �483722
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
7. LONG-TERM LIABILITIES -
A summary of Ion -term liability activity for the year ended June 30, 2011 is as follows:
'total governmental
activities long-term
liabilities &_5_2
Business -tree activities:
Balance at
Balance at
Due Within
July 1,
June 30,
One
2010
Additions
—Deletions
2011
Year
Governmental activities:
on refunding
147,1931)
23,240
Tax allocation bonds
35,890,000
44,170,000
(2,460.000)
$ 77,600,000
$ 2,590,000
Unamortized premium
103,028
-
(3,532)
99,496
-
Unamortized discount
-
(888,711)
16.046
(872,665)
�206,816
Notes payable
— _8199.000
-
_A&19 QQQ)
Total business -type
I
Total bonds and
activities long-term
notes payable
44,192,028
43,281,289
(10,646,486)
76,826,83 ,1
2,590,000
Claims andjudgments
2,240,963
2,138,342
(1,092,987)
3,296318
3,286.318
Postemployment benefits
Obligation (see Note 9)
2,461,016
887.145
(177,091)
3,171,070
-
Compensated absences
.. 3,175.818
2LQ3_7697
j( _9,31.396)
3tl282 119953_907
'total governmental
activities long-term
liabilities &_5_2
Business -tree activities:
2003 Refunding 'Water
Revenue bonds
S 11,875,000
(710,000)
$ IL165,000 740,000
Deferred charges
on refunding
147,1931)
23,240
(123053)
2011 Water
Revenue bonds
-
20,760,000
-
20.760,000
Bond premium
305,984
(1,275)
304,709
Compensated absences
�206,816
279A8
----(2-45434)
241.390 L1 7,Z51
Total business -type
I
activities long-term
liabilities
S -1t,914-643
S-21-145-972
S_ _(03,469)
S-1 47,146 S ____95 51
See independent auditors' report.
_3(}®
CITY OFTUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
7. LONG-TERM LIABILITIES (CONTINUED):
Governmental Activities
1998 Town Center Tax Allocation Bonds
On July 1, 1998, the Tustin Community Redevelopment Agency issued $20,805,000 Tax
Allocation Refunding Bonds to refund the Agency's Town Center Area Redevelopment Project
Tax Allocation Refunding Bonds, Series 1987, in aggregate principal amount of $5,145,000 and
the Agency's Town Center Area Redevelopment Project Subordinate Tax Allocation Bonds,
Series 1991 in aggregate principal amount of $12,880,000. As of June 30, 2006, the 1987 and 1991
bonds have been fully redeemed.
Serial bonds are payable in annual installments ranging from $775,000 to $1,315,000 commencing
on December 1, 1998. Interest is payable semiannually on June I and December 1, with rates
ranging from 3.5% to 5.0% per annum. The bonds maturing on or after December 1, 2009, are
subject to redemption prior to maturity as a whole or in part, at the option of the Agency, on any
date on or after December 1. 2008 at prices ranging from 100% to 101% of principal. At
June 30. 2011, the 1998 Bonds outstanding balance was $8,515,000.
The annual debt service requirements to amortize the tax allocation bonds are as follows:
Year Ending
June 30
2012
2013
2014
2015
2016
2017
See independent auditors' report.
Principal
1,255,000
1,315,000
1,380,000
1,445,000
1,525,000
1 595000
_51-
Interest
385,466
323,771
258,073
188,138
113,888
_37,881
Total
1,640,466
1,638,771
1,638,073
1,633,1318
1,638,888
�1632 881
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
7. LONG-TERM LIABILITIES (CONTINUED):
Governmental Activities (Continued)
RIVI&X71,113ifff i NMI, Iffirls'.
-010 IlousinTax allocation Bonds
On March 1, "010. the Tustin Community Redevelopment Agency issued $26,170,000 Tax
Allocation Housing Bonds, Series 2010 to refinance low and moderate income housing activities
throughout the geographic boundaries of the City and, in particular, to repay a reimbursement
obligation from the Agency to the City, relating to the City's write down of land for use for
affordable housing purposes. Serial bonds are payable in annual installments ranging from
$550,000 to $1,300,000 commencing on September 1, 2010. Interest is payable semiannually on
March I and September 1, with rates ranging from 2% to 5% per annum. At June 30, 2011, the
2010 Housing Bonds outstanding balance was $24,915,000.
The annual debt service requirements to amortize the tax allocation bonds are as follows:
Year Ending
June 30
2012
2013
2014
2015
2016
2017-2021
2022 - 21026
2027 - 2031
2032 -2036
2037-2040
Principal
695,000
715,000
(35,000
/760,000
785,000
4,420,000
51415,000
4,6205000
3,375,000
3395,000
24 915-000
See independent auditors' report.
-5)
Interest
$ 1,121,331
1,100,181
1,078431
1,054,106
1,025,106
4,619,031
3,595,753
2,251,125
1,352,531
367,894
j_JZ.L56 48
Total
1,816,331
1,815,181
1,813,431
1,814,106
1,810,106
9,039,031
9,010,753
6,871,125
4,727,531
3762 894
$� " 480 489
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
7. LONG-TERM LIABILITIES (CONTINUED):
ME=
2010 MCAS Tax Allocation Bonds
On October 27, 2010, the Tustin Community Redevelopment Agency issued $44,170,000 Tax
Allocation Bonds, Series 2010 for the purpose of financing redevelopment activities within or for
the benefit of the Agency's MCAS -Tustin Redevelopment Project Area, The bonds are payable in
annual installments ranging from $640,000 to $12,230,000 commencing on September 1, 2011.
Interest is payable semiannually on March I and September 1, with rates ranging from 2.0% to
5.0% per annum. The bonds maturing on or after September 1, 2019, are subject to optional
redemption prior to maturity, as a whole or in part, from any available source of funds, at a
redemption price equal to the principal amount thereof, together with accrued interest to the date
fixed for redemption, without premium. At June 30., 2011, the 2010 MCAS Bonds outstanding
balance was $44,170,000.
The annual debt service requirements to amortize the tax allocation bonds are as follows:
Year Ending
June 30
2012
2013
2014
1015
2016
2017-2021
2022-2026
2027-2031
2032-2036
2037-2041
---Principal
640,000
805,000
830,000
855,000
880,000
4,870,000
5,955,000
7,520,000
9,585,000
12-230-000
S_=j4AZQ_,0_Q0
See independent auditors' report.
-53-
Interest
$ 2,025,375
1,006,900
1,982,375
1,957,100
1,931,075
9,157,700
8,035,881
6,422,431
4,302,625
13588.000
3.94 4 -
Total
S 2,665,375
2,811,900
2,812,375
'),812,100
2,811,075
14,027,700
13,990,881
13,9421,431
13,887,625
13.818.000
j�__U_ 4"
A 3=,5
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
7. LONG-TERM LIABILITIES (CONTINUED):
Governmental Activities (Continued)
wmmu=
On April 1, 2007, the Tustin Community Redevelopment Agency entered into two related Note
Purchase Agreements in the amounts of $19,900,000 Series B (Tax-exempt) and $5,100,000
Series A (Taxable) with Citigroup Global Markets, Inc. for the acquisition of a thirty-seven acre
parcel of land adjacent to the Marine Base Project Area that will provide freeway access to and
from the Marine Base Project Area, Principal is payable in annual payments due in November of
each year. Interest payments are payable monthly during the Initial Note Period with a fixed
interest rate of 4.32% through November 2008. After the Initial Note Period, variable rate interest
payments are payable monthly based upon the current Securities Industry and Financial Markets
Association Municipal Swap Index (SIFMA) on the 2007 Series A Note and the London Interbank
Offered Rate (LIBOR) for the 2007 Series B Note. Interest payments after the Initial Note Period
have been calculated based upon the year-end interest rates of 1,035% for Series A and 4.56% for
Series B. The remaining balances of the notes were paid off in fiscal year 2011.
The tax allocation bonds are secured and to be serviced from tax increment revenues and dedicated
housing tax increment, through the fiscal year 2041. Total debt senfice requirements for tax
allocation bonds through 2041 are $135,882,168 consisting of principal payments of $77,600,000
and interest payments of $58,282,168. Pledged tax increment revenue recognized during the year
was $18.3 million aaamst the total debt service payment of $12.9 million.
C
Although the incremental property taxes were projected to produce sufficient revenues to meet the
debt service requirements over the life of the bonds, certain conditions could have a material,
adverse impact on revenues allocated to the Agency. These include future decreases in the assessed
valuation of the project areas, decreases in the applicable tax rates or collection rates, general
decline in the economic condition of the project areas, or a change in the law reducing the tax
increment received by the Agency.
See independent auditors' report.
-54-
CITY OF TUSTfN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
I
7. LONG-TERM LIABILITIES (CONTINUED) -
2003 refunding )XI ater Revenue Bonds
On September 9, 2003, the City issued $14,355,000. 2003 Refunding Water Revenue Bonds. The
Bonds were issued to provide funds to defease the Water System Revenue Certificates of
Participation, Series 1993 and prepay certain outstanding notes payable incurred to finance
improvements to the Water Enterprise.
The Bonds are payable in annual installments ranging from $130,000 to $1,160,000 until maturity
on April 1, 2023. Interest is payable semiannually on April I and October 1, with rates ranging
from 3.7% to 4.65% per annum.
The defeasance resulted in a difference between the reacquisition price and the net carrying amount
of the old debt of $309,873. The difference reported in the accompanying statements as a deduction
from revenue bonds payable, is being charged to interest expense through 2023.
The City has pledged net revenues received from the operation of Water Enterprise to repay the
outstanding debt service. The net revenues are the amount of the gross revenues received less the
amount of maintenance and operation costs, which include management, personnel, services,
equipment, repair and other necessary costs of maintaining and operating the Water Enterprise. The
City has covenanted to fix, prescribe, revise and collect rates, fees and charges for the services and
facility famished by the Water Enterprise during each fiscal year which are sufficient to yield net
revenues, at least equal to 120% of the annual debt service on the bonds. At June 30, 2011, total
interest and principal remaining on the bonds is 514,564,360, During the fiscal year, the total
principal paid and interest expense incurred were $1;212,705 and net revenues were $2,033,617.
The annual debt service requirements to amortize the bonds are as follows:
Year Ending
June 30
2012
2013
2014
2015
2016
2017 ® 21021
2022-2023
Less: deferred
charges on
refunding
Totals
See independent auditors' report.
KPrincj al
740,000
770,000
800,000
830,000
865,000
4,890,000
2,.,270,000
11,165,000
am=
474,305
444,705
413,905
381,905
348,705
1,176,895
—158.940
3,399,360
Total
$ 1,214,305
1,214,705
1,213,905
1,211,905
1,22 13,{7$05
6,066,95
2,428940
14,564,360
123,953)
1104 Q47 _ 4�CE
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
7. LONG-TERM LIABILITIES (CONTINUED):
Business -type Activities (Continued)
2011 Water Revenue Bonds
On May 25, 2011, the Public Financing Authority issued $20,760,000, 20111 Water Revenue
Bonds. The Bonds were issued to finance certain water system improvements. The Bonds are
payable in annual installments ranging from $735,000 to $1,690,000 until maturity on April 1,
2041. Interest is payable semiannually on April I and October 1, with rates ranging from 5.0% to
5-215% per annum.
The City has pledged net revenues received from the operation of Water Enterprise to repay the
outstanding debt service. The net revenues are the amount of the gross revenues received less the
amount of maintenance and operation costs, which include management, personnel, services,
equipment, repair and other necessary costs of maintaining and operating the Water Enterprise. The
City has covenanted to fix, prescribe, revise and collect rates, fees and charges for the services and
facility furnished by the Water Enterprise during each fiscal year which are sufficient to vield net
revenues, at least equal to 120% of the annual debt service on the bonds. At June 30, 2011, total
interest and principal remaining on the bonds is $44,459,044. During the fiscal year, there were no
debt service payments due.
The annual debt service requirements to amortize the bonds are as follows:
year Ending
June 30,
2012
2013
2014
2015
2016
2017-2021
2022 - 2026
2027-2031
2032-2036
2037-2041
See independent auditors` report.
---En
ncitaal
2,315,000
4,700'000
6.1040,000
7705000
20,760,000
304�,709
�79
Interest
$ 890,481
1,047,625
1,047,625
1,047,625
1,047,625
5,238,125
51126,125
4,199,313
2,861,`,'50
1 192 750
23,699,044
Total
890,481
1,047,625
1,047,625
1,047,625
1,047,625
5,238,125
7,441,125
8,899,313
8,901,750
8 �897 750
44,459,044
304,709
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
8. PENSION PLAN:
Plan Description
The City contributes to the California Public Employees' Retirement System (PERS), an
agent -multiple employer public employee defined pension benefit plan for miscellaneous
employees and a cost-sharing multiple -employer public employee defined benefit pension plan for
public safety employees. PERS provides retirement and disability benefits, annual cost -of -living
adjustments, and death benefits to plan members and beneficiaries. PERS acts as a common
investment and administrative agent for participating public entities within the State of California.
Benefit provisions and all other requirements are established by state statute and City ordinance.
Copies of PERS' annual financial report may be obtained from their executive office- 400 P Street,
Sacramento, CA 95814.
IMEMEM
Participants are required to contribute 7% (9% for safety employees) of their annual covered
salary, For City employees, other than safety and management, the City contributes 3.5% of the
employees' contribution and the employee contributes 3.5%. For safety employees, the City
contributes 4.5% of the employees' contribution and the employee contributes 4.5%. For City
management, other than safety management, the City contributes 3% of the employees'
contribution and the employee contributes 4%. For safety management, the City contributes 5% of
the employees' contribution and the employee contributes 4%. The City is required to contribute
the remaining amount necessary to fund the benefits for its members, using the actuarial methods
recommended by the PERS actuaries and actuarial consultants and adopted by the Board of
Administration.
The required employer contribution rate for year ended June 30, 2011 was 8,962% and 27.402%
for miscellaneous and safety employees, respectively. The contribution requirements of the plan
members are established by the state statute and the employer contribution rate is established and
may be amended by PERS.
The funded status of the plan based on the June 30, 2010 actuarial valuation is as follows.
Actuarial Actuarial
Accrued 'V'alue of
Unfunded
Liability
(Excess Funded
Unfunded
Annual Liability %
Covered of Covered
LiLbility AssetsAssets) Ratio avroll Pa roll
$69,334,930 $ 63,773,252 $ 5,561,678 92.0 % S 13,660,580 40,7 %
See independent auditors' report.
-57-
CITY OFTUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
yffffq��
S. PENSION PLAN (CONTINUED) -
Funding Policy (Continued)
The schedule of funding progress presented as Required Supplementary Information following the
Notes to Financial Statements, presents multi-year trend information about whether the actuarial
value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability
for benefits. The assumptions for the June 30, 2010 actuarial valuation for the funded status were
the same as those of the June 30, 2008 valuation that determined the required contributions.
Annual Pension Cost
For 2011, the City's annual pension cost of $2,205,531 for the Miscellaneous Plan and $3,396,182
for the Safety Plan (based on an actuarially determined basis) was equal to the City's required and
actual contributions. The required contribution for the miscellaneous plan for the year ended
June 30, 2011 was determined as part of the June 30, 2008 actuarial valuation using the entry age
normal actuarial cost method. The actuarial assumptions for the Miscellaneous Plan included
(a) 7.75% investment rate of return (net of administrative expenses), (b) projected annual salary
increases that vary by duration of service, and (c) 3.25% per year cost -of -living adjustments.
Both (a) and (b) included an inflation component of 3.0%. The actuarial value of PERS assets was
determined using techniques that smooth the effects of short-term volatility in the market value of
investments over a four-year period (smoothed market value). PERS unfunded actuarial accrued
liability is being amortized as a level percentage of projected payroll on a closed basis. The
remaining amortization period as of the actuarial valuation date was 19 years for the miscellaneous
employee plan.
Fiscal
Year
6/30/09
6/30/10
630/11
Fiscal
Year
_6/_3_0/09
6/30/10
6/30/11
Three -Year Trend Information for PERS
Miscellaneous Plan
Annual Pension
Cost ORO -
2,379,894
2,254,708
2,205,531
Percentage
APC Contributed
100%
100%
100%
Three -Year Trend Information for PERS
Safety Plan
3,323,919
3,245,673
3,3965182
See independent auditors* report.
-58-
Percentage
APC Contributed
100%
100%
100%
Net Pension
Obligation
Net Pension
Obligation
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
9. POST -EMPLOYMENT HEALTH CARE BENEFITS -
Plan Description
The City provides other posternployment benefits (OPEB) to retired employees in the form of a
contribution towards their medical premiums under the PERS health plan, a single -employer
deferred benefit plan which provides medical insurance benefits to eligible retirees in accordance
with various labor agreements. Survivor benefits are not provided. The City`s OPER plan does not
issue a separate stand-alone report.
Employees are eligible for retiree health benefits if they retire from the City on or after age 50
(unless disabled), with five years of service and are eligible for a PERS pension and are enrolled in
a PERS retiree health plan. The benefits are available only to employees who retire from the City.
Membership of the plan consisted of the following at June 30, 2011:
Police
Police General L\4gnit Conf Tp
—Su ort Total
—
Retirees Receiving
Benefits 29 20 18 0 5 72
Eligible Active
Employees 87 101 43 6 40 277
The above table does not reflect current retirees not enrolled in the PERS health plan who may be
eligible to enroll in the plan at a later date.
Funding Policy
The City's current contribution is based on pay-as-you-go. As of July 1, 2010, the City's monthly
contribution rate was $250 for the Confidential, General, and Police Support groups, $350 for the
Police and Management group. For the year ended June 30, 2011, the City paid $177,091 directly
to retirees towards their postemployment health care benefits. Current active employees are not
required to contribute any portion towards these benefits.
Annual OPEB Cost and Net OPER Obligation, The City's annual (OPEB cost (expense) is
calculated based on the annual required contribution of the emplqver (ARC), an amount actuarially
determined in accordance with the parameters of GASB Statement 45. The ARC represents a level
of funding that, if paid on an ongoing basis, is projected to cover nonual cost each year and
amortize any unfunded actuarial liabilities (or funding excess) not to exceed thirty years,
See independent auditors' report.
-59-
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
9. POST -EMPLOYMENT HEALTH CARE BENEFITS (CONTINUED):
Funding Policy (Continued)
The City's ARC for the year ended June 30, 2011 was $985,173. The following table shows the
components of the City's annual OPEB cost for the year, the amount actually contributed to the
plan, and changes in the City's net OPE B obligation:
The Citv's annual OPEB cost, the percentage of annual OPER cost contributed to the plan, and the
net OPE B obligation for 2011 and the two preceding years were as follows:
Fiscal
Annual
Year
OPE,B
Ended
Police
6/30/09
1,090,989
Police
General
_--jiftnt -
Conf
ao
--Sup rt
,-
Total
ARC, (OPER cost)
$ 327,450
$ 341,564
$ 172,194
16.,937
127,028
985,173
Interest on net
OPER obligation
31,078
23,955
24,498
15,252
9,436
104,219
Adjustment to ARC
---j6-0.3 10)
t46 487)
47-5
__--L 4 1 )
9598)
---12—
---A_I811 1)
47)
-__L2O2 —2
Annual pension
cost
298,218
319.032
149,151
2,591
118,153
887,145
Contributions made
_____(79622)
____.1636)
---058-450)
-
CjL3)
-—
I�L, -09 1)
---L 7--
Increase in net,
OPEB obligation
218,596
287,396
90301
2,591
110,7710
710.054
Net OPEB obligation,
beginning
—733 878
565,666
578.492
— 360364
_____222"816
---2.461.016
Net OPEB obligation,
ending
,-952AM
S—A-5-1-062
S—_3
33-3�5A6
S�JXLM
The Citv's annual OPEB cost, the percentage of annual OPER cost contributed to the plan, and the
net OPE B obligation for 2011 and the two preceding years were as follows:
Fiscal
Annual
Year
OPE,B
Ended
Cost
6/30/09
1,090,989
6/30/10
897,043
6130/11
887,145
See independent auditors' report.
-60-
Percentage of
Annual OPER
Cost Contributed
17.90%
15 10%
19.96%
Net
OPEB
—Obligation
1,699,651
2
�,461,016
3,171,070
CITY OF TUSTtN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
9. POST-EMI'LOYMENT HEALTH CARE BENEFITS (CONTINUED)-
Fundina Status and Progress
F15
As of June 30, 2009, the most recent valuation date, the actuarial accrued liability for benefits was
$13.6 million, and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued
liability (UAAL) of $13.6 million and a funded ratio (actuarial value of assets as a percentage of
the actuarial accrued liability) of 0%. The covered payroll (annual payroll of active employees) was
$23.1 million and the ratio of the UAAL to the covered payroll was 58.9%. Actuarial valuations of
an ongoing plan involve estimates of the value of reported amounts and assumptions about the
probability of occurrence of events far into the future. Examples include assumptions about future
employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded
status of the plan and the annual required contributions of the employer are subject to continual
revision as actual results are compared with past expectations and new estimates are made about
the future. The schedule of funding progress, presented as required supplementary inforination
following the notes to the financial statements, presents multi-year trend information about whether
the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial
accrued liabilities for the benefits.
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan
as understood by the employer and the plan, members) and include the types of benefits provided at
the time of each valuation and the historical pattern of sharing of benefit costs between employer
and plan members to that point. The actuarial methods and assumptions used include techniques
that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the
actuarial assets, consistent with the long-term perspective of the calculations.
The required contribution for the fiscal year 2011 was determined as part of the July 1, 2009
actuarial valuation. The actuarial cost method used for determining the benefit obligations is the
9
entry age normal cost method, The actuarial assumptions included a 4.25% investment rate of
1
return (which is based on assumed long-term investment return on plan assets and on the City's
assets, as appropriate), annual inflation rate of 3%. annual payroll increase of 3.25% and an annual
healthcare cost trend rate with increases that vary by year. The URAL, is being amortized as a level
percentage of projected payroll over a, closed period of 30 years.
See independent auditors' report.
-61-
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
10. SELF-INSURANCE PROGRAM/RISK POOL:
The City uses a combination of insured and self-insured programs to finance its property and
casualty risk. The City is self-insured for worker's compensation, automotive, and general liability
risks. Excess liability coverage for the City's self-insurance retention of $250,000 per occurrence is
provided through a risk sharing pool, the California Insurance Pool Authority (CIPA), The CIPA
provides excess liability coverage above $2,000,000 per occurrence and $40,000,000 annual
aggregate. The City's self-insurance retention limit is $400,000 per occurrence for worker's
compensation claims. Worker's compensation claims which exceed the self-insurance retention are
insured by CIPA up to the California statutory limit for worker's compensation. Property and
employment practices liability risk are financed through insurance contracts and have various
limits and deductibles.
The City is a member of CIPA in order to jointly purchase insurance coverage and to share costs
for professional risk management, claim administration, and group purchasing of insurance
products with ten other Orange County cities. Members may be assessed the difference between
the funds available and the 540,000,000 annual aggregate in proportion to their annual premium.
CIPA uses independent actuaries and undemriters to determine premiums and help set insurance
limits and deductible levels.
The pool is managed by all independent general manager and contracted legal advisers. Two
internal subcommittees are made up of City members, to provide direction on underwriting and
claims activities. The Governing Board of CIPA is comprised of one member from each
participating City and is responsible for the selection of the independent general manager, legal
counsel, and electing subcommittee members. The financial statements of the CIPA are available at
the administrative office located at 240 Newport Center Drive, Suite 210, Newport Beach,
California.
The government retains a risk of loss, due to the fact that actual losses may exceed estimated
claims or coverage amounts, Settled claims have not exceeded any of the City's coverage amounts
in any of the last three fiscal years, and there were no reductions in the City's coverage during the
year ended June 30, 2011. At June 30, 2011. estimated claims payable of $3,268,318, which
includes a provision for incurred but not reported claims and loss adjustment expenses, are reported
as a long-term liability.
Changes in the balances of claims liabilities for the years ended June 30, 2010 and 2011, including
a provision for incurred but not reported claims and loss adjustment expenses, were as follows:
June 30,
Balance
Estimates
Pa_ments
.3L
Balance —
2010
1,939,920
S 1.342,669
1,041,626
2,240,963
2011
2,240,963
2,138,342
1,092,987
3,286,318
See independent auditors' report.
-62-
Wismatimia
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
I I. SPECIAL ASSESSMENT DISTRICTS'BONDS:
Special assessment districts exist in various parts of the City to provide improvements to properties
located in those districts. Properties are assessed for the cost of improvements; these assessments
are payable over the term of the debt issued to finance the improvements and must be sufficient to
repay this debt. The bonds listed below were issued pursuant to the Refunding Act of 1984 for the
1915 Improvement Act Bonds and the Improvement Bond Act of 1915 and are the liabilities of the
property owners and are secured by liens against the assessed property. The City Treasurer acts as
an agent for collection of principal and interest payments by the property owners and remittance of
such monies to bondholders.
Neither the faith and credit nor the general taxing power of the City have been pledged to the
payment of the bonds. Therefore, none of the following special assessment bonds have been
included in the accompanying financial statements.
District Bonds
Assessment District 95-1
Assessment District 95-2, 1996
Assessment District 95-2. 1997
Assessment District 95-' .1, 1998
Assessment District 95-2, 1999
Assessment District 95-2, 2001
Community Facilities District 04-1, 2004
Community Facilities District 06-1, 2007
Community Facilities District 06-1, 2010
Community Facilities District 07-1, 2007
See independent auditors' report.
-63-
Amount
Outstanding
of Issue
June 302011
35,705,000
8,045,000
41,500,000
20,066,000
3,300,000
780,000
4,185,000
1,240,000
4,995,000
1,355,000
2,245,000
675,000
11,415,000
10,335,000
53,570,000
53.1,425,000
1,675,000
1,675,000
13M0,000
13,650,000
�L72 Q 01,11 246 0
$ ..
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
11. SPECIAL ASSESSMENT DISTRICTS 5130NDS (CONTINUED):
Tustin Public Financing Authority
In February 1999, the Tustin Public Financing Authority (PFA) issued $35,705,000 of Revenue
Bonds, Series A, to facilitate the issuance of the $35,705,000 of Assessment District Bonds for
Reassessment District 95-1. The proceeds of the PFA bonds were used to purchase certain limited
obligation bonds of Reassessment District 95-1. At June 30, 2011, the amount of the PEA Revenue
Bonds, Series A, outstanding was $8,045,000.
41
In February 1996, the PEA issued $41,500,000 of Limited Obligation Improvement Bonds, Series
A. The proceeds from the sale of the Series A Bonds were used to refund outstanding limited
obligation improvernent bonds of the City for Assessment District 85-1 and Assessment
District 86-2. At June 30, 2011, the amount of the PFA Limited Obligation Improvement Bonds,
Series A, outstanding was $20,066,000.
In November 1997, the PEA issued $3,300,000 of Revenue Bonds, Series B, to facilitate the
issuance of the $3,300,000 of Assessment District bonds for Reassessment District 95-2, The
proceeds were used to purchase the entire issue of limited obligation bonds of the Reassessment
District 95-2. The 95-2 Assessment bonds (issued October 1997 and concurrently sold to the PEA)
were issued for the purpose of refunding a portion of the 1996 Assessment bonds 95-2. At
June 30, 2011, the amount of the PEA Revenue Bonds, Series B, outstanding was $780,000.
In November 1998, the PFA issued $4,185,000 of Revenue Bonds, Series C, to facilitate the
issuance of the $4,185,000 of Assessment District bonds for Reassessment District 95-22. The
proceeds were used to purchase the entire issue of limited obligation bonds of the Reassessment
District 95-2. The 95-2 Assessment bonds (issued December 1998 and concurrently sold to the
PFA) were issued for the purpose of refunding a portion of the 1996 Assessment Bonds 95-2
bonds. The net proceeds of $4,135,943 were used to refund $3,648,000 of Assessment District 95-2
bonds. As a result, a portion of the Assessment District 95-2 bonds are considered to be defeased.
At June 30, 2011, the amount of the PEA Revenue Bonds, Series C, outstanding was $1,240,000.
In November 1999, the PFA issued $4,995,000 of Revenue Bonds, Series D, to facilitate the
issuance of the $4,995,000 of Assessment District bonds for Reassessment District 95-2. The
proceeds were used to purchase the entire issue of limited obligation bonds of the Reassessment
District 95-2, The 95-2 Assessment bonds (issued November 1999 and concurrently sold to the
PFA) were issued for the purpose of refunding a portion of the 1996 Assessment Bonds 95-2. The
net proceeds of $4,937,880 were, used to refund $4,323,000 of Assessment District 95-2 bonds. As
a result, a portion of the Assessment District 95-2 bonds are considered to be defeased. At
June 30, 2011, the amount of the PEA Revenue Bonds, Series D, outstanding was $1,355,000.
See independent auditors* report.
-64-
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
11. SPECIAL ASSESSMENT DISTRICT'S t BONDS (CONTINUED):
"M11111W9111111311MMUM M�� mlmlslji.
In October 2001, the PEA issued $2,245,000 of Revenue Bonds, Series E, to facilitate the issuance
of the $2,245,000 of Assessment District bonds for Reassessment District 95-2. The proceeds were
used to purchase the entire issue of limited obligation bonds of the Reassessment District 95-22.
The 95-2 Assessment bonds (issued October 2001 and concurrently sold to the PFA) were issued
for the purpose of refunding a portion of the 1996 Assessment Bonds 95-2. The net proceeds of
$2,223,063 were used to refund $1,970,000 of Assessment District 95-2 bonds. As a result, a
portion of the Assessment District 95-2 bonds are considered defeased. At June 30, 2011, the
amount of the PEA Revenue Bonds, Series E. outstanding was $675,000.
Community Facilities District
In December 2004, the City issued $11,415,000 of Special Tax Bonds, Series 2004, to facilitate the
infrastructure I I
new rastructure construction on the former CAB being converted into various public, housing,
commercial and educational uses. The proceeds of the bonds will be used to pay the cost and
expense of acquisition and construction of certain public facilities necessary for the development of
the Tustin Legacy District, fund the reserve account, pay capitalized interest on bonds through
September 16, 2005, and pay costs of issuing the Series 2604 Bonds. Serial current interest bonds
will mature from September 1, 2006 to September 1, 2025. Tenn current interest bonds will mature
on September 1, 2029, with mandatory sinking payments from September 1, 2030 through
September 1, 2034. Interest maturity rates of the current interest bonds range from 2.75% at
September 1, 2006 to 5.35% at September 1, 2025 - and current term interest bonds are, 5.375%
and 5.50% on their respective maturity dates. At June 30, 2011, the amount of the Special Tax
Bonds, Series 2004 was $10,335,000.
In September 2007, the City issued $53,570,000 of Special Tax Bonds, Series 2007A, to facilitate
the new infrastructure construction on the former MCAB being converted into various public,
housing, commercial and educational uses. The proceeds of the bonds will be used to pay the cost
and expense of acquisition and construction of certain public facilities necessary for the
development of the Tustin Legacy District, fund the reserve account, pay capitalized interest on
bonds through September 1, 2008, and pay costs of issuing the Series 2007A Bonds. Serial current
interest bonds will mature from September 1, 2009 to September 1, 2025. Term, current interest
bonds will mature on September 1, 2036, with mandatory sinking payments from
September 1, 2026 through September 1, 2036. Interest maturity rates of the current interest bonds
range from 4% at September 1, 2009 to 5.375% at September 1. 2025 and current to interest
bonds are 6% on their respective maturity dates. At June 30, 2011. the amount of the Special Tax
Bonds, Series 2007A was $53,425,000.
See independent auditors' report.
-65-
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
11. SPECIAL ASSESSMENT DISTRICTSWNDS (CONTI-NUED):
G3303M��
In September 2007, the City issued $13,680,000 of Special Tax Bonds, Series 2007, to facilitate the
new infrastructure construction on the former MCAB beinp- converted into various public, housing,
commercial and educational uses. The proceeds of the bonds will be used to pay the cost and
expense of acquisition and construction of certain public facilities necessary for the development of
the Tustin Legacy District, fund the reserve account, and pay costs of issuing the Series 2007
Bonds. Serial current interest bonds will mature from September 1, 2009 to September 1, 2025.
Term current interest bonds will mature on September 1, 2037, with mandatory sinking payments
from September 1, 2026 through September 1, 2037. Interest maturity rates of the current interest
bonds range from 4% at September 1, 2009 to 5.65% at September 1, 2025 and current term
interest bonds are 6% through their respective maturity dates. At June 30, 2011, the amount of the
Special Tax Bonds, Series 2007 was $13,650,000.
In October 2010, the City issued $1,675,000 of Special Tax Bonds, Series 2010 to, to facilitate the
new infrastructure construction on the former MCAB beiric, converted into various public, housing,
commercial and educational uses. The proceeds of the bonds will be used to pay the cost and
expense of acquisition and construction of certain public facilities necessary for the development of
the Tustin Legacy District, fund the reserve account, and pay costs of issuing the Series 2010
Bonds. Serial current interest bonds will mature from September 1, 2011 to September 1, 2035.
Term current interest bonds will mature on September 1, 2039, with mandatory sinking payments
from September 1, 2036 through September 1, 2039. Interest maturity rates of the current interest
bonds range from 1.5% at September 1, 2011 to 5.625% at September 1, 2035 and current to
interest bonds are 5,75% through their respective maturity dates. At June 30, 2011, the amount of
the Special Tax Bonds, Series 2010 was $1,675,000.
Neither the general taxing power of the City nor the faith or credit of the PFA or the City have been
pledged to the payment of the bonds, Therefore, the bonds have not been included in the
accompanying financial statements.
See independent auditors' report.
-66-
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
12, COMMITMENTS AND CONTINGENCIES :
There are certain legal actions pending against the City which have arisen in the normal course of
operations. In the opinion of management and the City Attorney, the ultimate resolution of such
actions is not expected to have a significant impact, if any, on the financial statements or operations
of the City.
The California Health and Safety Code requires redevelopment agencies to set aside 20 percent of
their tax increment from project areas established after 1976 for low and moderate income housing.
Between fiscal years 1985-86 and 1991492, the Tustin Community Redevelopment Agency
deferred a total of $2,776,042 from its low and moderate -income housing obligation, and is the
amount outstanding as of June 30, 2011.
In July 2004, the City entered into a disposition and development agreement ("DDA") with Vestar
Development Company ("Developer") where the City agreed to sell and/or lease or sublease and
developer agreed to purchase and/or lease or sublease the Tustin Legacy Property. Pursuant to the
DDA, the City and Developer entered into an infrastructure construction and payment agreement
("Agreement") dated June 8, 2005. The Agreement calls for the Developer to pay the Project Fair
Share Contribution (as defined in the DDA) with respect to the Tustin Legacy Backbone
Infrastructure program. Pursuant to the original and subsequent agreements, the Developer is
entitled to reimbursement of its infrastructure costs that exceed the Project Fair Share Obligation
upon full acceptance of individual Developer Backbone Infrastructure Segments. As of
June 30, 2011, the total infrastructure cost incurred by the Developer that is subject to
reimbursement was $45,164,084 and the total reimbursement made by the City was $30,241,666.
Estimated future reimbursements to be made by the City as the infrastructure segments are
completed and accepted by the City and only if there are excess land sale proceeds from parcels
identified in the agreement) are $21,873,901.
See independent auditors' report.
-67-
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
13. GOVERNMENTAL FUND BALANCE CLASSIFICATIONS:
The City has implemented Governmental Accounting Standards Board Statement No. 54, "Fund
Balance Reporting and Governmental Fund Type Definitions", for the year ended June 30, 2011
The fund balances reported on the fund statements now consist of the following categories:
C�
Nons en a le - This classification includes amounts that cannot be spent because they are either
(a) not in spendable form or (b) legally or contractually required to be maintained intact,
Restricted - This classification includes amounts that can be spent only for specific purposes
stipulated by constitution, external resource providers or through enabling legislation.
Committed - This classification includes amounts that can be used only for the specific purposes
determined by a formal action of the government's highest level of decision-making authority.
Assigned - This classification includes amounts to be used by the government for specific purposes
but do not meet the criteria to be classified as restricted or committed. In governmental funds,
other than the general fund, assigned fund balance represents the remaining amount that is not
restricted or committed.
Unassigned - The classifications include the residual balance for the government's general fund
and includes all spendable amounts not contained in other classifications. In other funds. the
unassigned classification is used only to report a deficit balance resulting from overspending for
specific purposes for which amounts had been restricted, committed or assigned.
When an expenditure is incurred for purposes for which both restricted and unrestricted fund
balances are available, the City's policy is to apply restricted fund balance first.
When an expenditure is incurred for purposes for which committed, assigned or unassigned fund
balances are available, the City's policy is to apply committed fimd balance first, then assigned
fund balance, and finally unassigned fund balance.
See independent auditors' report.
-68-
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
13. GOVERNMENTAL FUND BALANCE CLASSIFICATIONS (CONTINUED):
Fund balances (deficit):
Nonspendable:
Prepaid ftems
Advance to other funds
Land held for resale
Restricted for:
Low income
housing projects
Capital projects
Debt service
Public safety
Redeveloment protects
Assigned to:
Capital projects
Unassigned
Total fund
balances (deficit)
R 11W_ 5�4_1_3)_
,9W 90
14. OTHER REQUIRED INDIVIDUAL FUND DISCLOSURES:
Deficit Fund Balance
The Marine Base Project Area Debt Sen4ce Fund had deficit fund balance of $1,525,280 at
June 30, 2011. This deficit is expected to be relieved from future revenues or transfers.
Other Governmental Funds:
Supplemental Law Enforcement
Special Revenue Fund
See independent auditors' report.
-69-
Variance with
Bydat Actual _ Final Budget
88,200 $ 121,346 $ (33,146,
Marine
Base
CFD
Project Area
Construction
Debt
Capital
Other
Total
General
Service
Projects
Governmental
Governmental
Fund
Fund
Funds
Funds
—Fund
115,105
$
35,830
S 150,935
6,291,916
14,3 ) 15,290
20,609.206
144.071,850
-
1,707,677
145,779,
�527
-
-
15,245,065
15,245,065
-
38,320,785
6,122,384
44,443,169
1827,620
-
9,518,666
12,3 146,286
-
-
266,592
266,592
-
58.372369
58,372,169
-
18,603,317
18,603,317
1__44L65
1_
_Cl_�0(40,910)
-
--A3 2-64-7)
_0_54Ea,2_98)
R 11W_ 5�4_1_3)_
,9W 90
14. OTHER REQUIRED INDIVIDUAL FUND DISCLOSURES:
Deficit Fund Balance
The Marine Base Project Area Debt Sen4ce Fund had deficit fund balance of $1,525,280 at
June 30, 2011. This deficit is expected to be relieved from future revenues or transfers.
Other Governmental Funds:
Supplemental Law Enforcement
Special Revenue Fund
See independent auditors' report.
-69-
Variance with
Bydat Actual _ Final Budget
88,200 $ 121,346 $ (33,146,
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
15. CITY ANDAGENCY REIMBURSEMENT AGREEMENT:
Reimbursement Agreement
In order to assist the Agency in meeting its affordable housing obligations, the City entered into an
agreement to sell property at a discount sufficient to permit developers to economically develop the
required number of affordable housing its and has encumbered the sale of the properties and
units with covenants, promissory notes and deeds of trust to ensure maintaining the affordability of
those units in accordance with the California Community Redevelopment Law. The affordable
units are located at Tustin Fields I and 11 and are comprised of thirty-three very low, twenty-three
low and sixty-two moderate income units, which are secured by promissory notes and deeds of
trusts by the City that reflect an average of approximately $502,600 for very low-income units,
$485,900 for low-income units and $279,100 for moderate -income units. The City's promissory
notes and deeds of trust reflect the affordable housing subsidy (the difference between the fair
market value of the dwelling unit at the time of purchase and the affordable housing purchase price
of the units),
On June 5, 2007, the City and Agency executed a Reimbursement Agreement whereby the Agency
agrees to reimburse the City for the affordable housing subsidy from tax increment revenues,
including but not limited to the Agency's Low and Moderate -Income Housing Set -Aside deposits
from the MCAS Tustin Project Area, Town Center and South Central Project Areas as determined
on an annual basis as part of the budget process. As of the date of the agreement, the total subsidy
value associated with the production of the affordable housing units is $23,585,726 on Tustin Field
I and S22,822,0 10 on Tustin Field 11, for a total of $46,407,736.
During the fiscal year 2011, the Agency reimbursed the City $1,325,546 from the South Central
and Town Center Low Income Housing Fund and $1,084,537 from the. Marine Base Low Income
Housing Fund. The reimbursement amounts were, recorded as a transfer in the accompanying
financial statements. Interest paid by the Agency during the fiscal year to the City was as
follows: $368,846 by the Marine Base Low Income Housing Fund and $450,813 by the South
Central and Town Center Low Income Housing Fund. This obligation is expected to increase in
future years as the City anticipates reselling additional property to developers and affordability
subsidy for these additional affordable housing units is estimated at $195,658,760. Since the
obligation is contingent upon future tax increment revenues, only actual payments by the Agency
to the City are recorded in the accompanying financial statements.
As a result of the reimbursement agreement, any payments received from the promissory notes that
are held in the City's will be returned to the Agency. The outstanding balance of the promissory
notes at June 30, 2011 of $32,424,643 is offset by an allowance of $32,424,643 to reflect the
amount of the, notes not expected to be collected.
See independent auditors' report.
-70-
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
15. CITY AND AGENCY REIMBURSEMENT AGREEMENT (CONTINUED):
AMMMUMME=
On February 1 2011, the Agency entered into a cooperation agreement with the City, whereby the
City will help the Agency and cooperate with the Agency to expeditiously implement the projects
outlined in the five year implementation plans adopted by the Agency. As consideration for City's
help, the Agency agreed to pay the City an amount equal to the cost to the City to carry out the
projects, including without limitation all costs incurred by the City for the planning, acquisition and
disposition, financing, development, permitting, design, site testing, bidding, construction and
construction management for the projects. The Agency's obligation Linder the cooperation
agreement constitutes an indebtedness of the Agency for the purpose of carrying out the
redevelopment of the Project Areas, The obligation will be payable out of net available tax
increments. During the fiscal year, the City did not incur any costs covered by this agreement.
I
Therefore, no reimbursements were made by the Agency.
16. JOINT POWERS AUTHORITY,
Orange County Fire Authority
In January 1995, the City of Tustin entered into a joint powers agreement with the Cities of Buena
Park, Cypress, Dana Point, Irvine, Laguna Hills, Laguna Niguel, Lake Forest, La Palma, Los
Alamitos, Mission Viejo, Placentia, San Clemente, San Juan Capistrano, Sea] Beach, Stanton, Villa
Park, and Yorba Linda and the County of Orange (County) to create the Orange County Fire
Authority. The purpose of the Authority is to provide for mutual fire protection, prevention, and
suppression services and related and incidental services including, but not limited to, emergency
medical and transport services, as well as providing facilities and personnel for such services.
The effective date of fonriation was March 1, 1995, The Authority's goverrung board consists of
one representative from each City and two from the County. The operations of the Authority are
funded with structural fire fees collected by the County through the property tax roll for the
unincorporated area and on behalf of all member cities except for the Cities of Stanton, Tustin, San
Clemente, Buena Park, Placentia, and Seal Beach. The County pays all structural fees it collects to
the Authority. The Cities of Stanton, Tustin, San Clemente, Buena Park, Placentia, and Seal Beach
are considered "cash contract cities" and, accordingly, make cash contributions based on the
Authority's annual budget.
The financial statements of the Orange County Fire Authority are available at I Fire Authority
Road, Irvine, California.
See independent auditors' report.
-71 -
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
171. RECENT CHANGES FN LEGISLATION AFFECTING CALIFORNIA REDEVELOPMENT
AGENCIES:
On June 29, 2011, the Governor of the State of California signed Assembly Bills XI 26 and 27 as
part of the State's budget package. Assembly Bill XI 26 requires each California redevelopment
agency to suspend (effective July 1, 2011) nearly all activities except to implement existing
contracts, meet already -incurred obligations, preserve its assets and prepare for the impending
dissolution of the agency, Assembly Bill XI 217 provides a means for redevelopment agencies to
continue to exist and operate by means of a, Voluntary Alternative Redevelopment Program. Under
this program, each city would adopt an ordinance agreeing to make certain payments to the County
Auditor Controller in fiscal year 2011-12 and annual payments each fiscal year thereafter.
Assembly Bill XI 26 indicates that the city "may use any available funds not otherwise obligated
for other uses" to make this payment. The City of Tustin intends to use tax increment allocable to
its redevelopment agency for this purpose. The amounts to be paid after fiscal year 2011-12 and
2012-13 have yet to be determined by the state legislature.
Assembly Bill X 1 26 directs the State Controller of the State of California to review the propriety
of anv transfers of assets between redevelopment agencies and other public bodies that occurred
after January 1, 2011. If the public body that received such transfers is not contractually committed
to a third party for the expenditure or encumbrance of those assets, the State Controller is required
to order the available assets to be transferred to the public body designated as the successor agency
by Assembly Bill X1 26.
In the event that Assembly Bill XI 26 is upheld, the receivable recognized by funds of the City that
had previously loaned or advanced funds to the redevelopment agency may become uncollectible
with a loss recognized by the advancing funds. Funds of the City may also be impacted by the
elimination of reimbursements previously paid to the City by the redevelopment agency for shared
administrative services.
The League of California Cities and the California Redevelopment Association (CRA) filed a
lawsuit, on July 18, 2011 on behalf of cities, counties and redevelopment agencies petitioning the
California Supreme Court to overturn Assembly Bills XI 26 and 27 on the grounds that they
violate the California Constitution. On August 11, 2011. the California Supreme Court issued a
stay of all of Assembly Bill XI 27 and most of Assembly Bill XI 26. The California Supreme
Court stated in its order that "the briefing schedule is designed to facilitate oral argument as early
as possible in 2011, and a decision before January 15, 2011" A second order issued by the
California Supreme Court on August 17, 2011 indicated that certain provisions of Assembly
Bills XI 26 and 27 were still in effect and not affected by its previous stay, including requirements
to file an appeal of the determination of the community remittance payment by August 15, the
requirement to adopt an Enforceable Obligations Payment Schedule ("EOPS") by August 29, 2011,
and the requirement to prepare a preliminary draft of the initial Recognized Obligation Payment
Schedule ("ROPS") by September 30, 2011.
See independent auditors' report.
-72-
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
17. RECENT CHANGES IN LEGISLATION AFFECTING CALIFORINIA REDEVELOPMENT
AGENCIES (CONTINUED):
Because the stay provided by Assembly Bill XI 26 only affects enforcement, each agency must
adopt an Enforceable Obligation Payment Schedule prior to September 30, as required by the
statute. Enforceable obligations include bonds, loans and payments required by the federal or State
goveniment.- legally enforceable payments required in connection with agency employees such as
pension payments and unemployment payments, judgments or settlements; legally binding and
enforceable agreements or contracts; and contracts or agreements necessary for the continued
administration or operation of the agency that are permitted for purposes set forth in AB I X 26.
Z:>
On August 2, 2011, Agency Ordinance No. 1405 was adopted, indicating that the Agency will
comply with the Voluntary Alternative Redevelopment Program in order to permit the continued
existence and operation of the agency, in the event Assembly Bills XI 26 and/or 27 are upheld as
constitutional. The initial payment by the agency is estimated to be $7,105,796 with one half due
on January 15, 2012 and the other half due May 15, 2012. The amounts to be paid after fiscal
year 2011-12 and 2012-13 have yet to be determined by the state legislature. The semi-annual
payments will be due on January 15 and May 15 of each year and would increase or decrease with
changes in tax increment. Additionally, an increased amount would be due to schools if any new
debt is incurred, Assembly Bill XI 27 allows a one-year reprieve on the agency's obligation to
contribute 20% of tax increment to the low -and -moderate -income housing fund so as to permit the
Agency to assemble sufficient funds to make its initial payments.
On December 29, 2011, the California Supreme Court rendered an opinion upholding Assembly
Bill I x 26 and invalidating Assembly Bill I x, 27. The impact of this decision is not reflected in the
accompanying financial statements.
See independent auditors' report.
-73-
CITY OF TUSTIN
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
18. RESTATEMENT OF BEGINNING BALANCES:
The balance of governmental activities net assets at July 1, 2010 was restated as follows:
Net assets at July 1 2010, as previously reported
S 610,690,043
To correct CFD expenses that were
inadvertently reported as City expenses 914,500
Net assets at July 1, 2010, as restated S--6U&�44
The fund balance of the CFD Construction Capital Projects Fund at July 1, 2010 was restated by
5914,500 from $37,100,290 to $38,014,790 to correct CFD expenses that were inadvertently
reported as City expenses.
The fund balance of the Marine Base Project Area Capital Projects Fund at July 1., 2010 was
restated by $25,000,000 from S271,379,849 to $2,3379,849 to remove land held for resale that is
owned by City of Tustin.
See independent auditors' report.
-74-
REQUIRED SUPPLEMENTARY INFORMATION
The page left blank intentionally
SCHEDULES OF FUNDING PROGRESS
For the year ended June 30.1 21011
SCHEDULE OF FUNDING PROGRESS FOR PERS
MISCELLANEOUS EMPLOYEES
SCHEDULE OF FUNDING PROGRESS FOR
OTHER POST-EMPLOYMFNT BENEFIT PLAN
Actuarial
Actuarial
Value
Accrued
Unfunded
L'AAL as a
Actuarial
of Assets
Liability
AAL
Funded
Covered
%of
Valuation
(AVA)
(AAL)
(t'AAL)
Ratio
Payroll
Payroll
Date
(a)
(b)
(b) - (a)
(a)/(b)
(c)
[(b)-(a)]/(c)
06/30/08
S 55,906,203
S 58.955.701
S 3,049.498
94.83%
$ 14.416,837
21.15%
06/30/09
59.641,991
64,934,473
5,292,482
91,85%
14,785,480
35.80%
06/30/10
631773,252
69,334,930
5,56t,678
91,98%
13,660,580
4071%
SCHEDULE OF FUNDING PROGRESS FOR
OTHER POST-EMPLOYMFNT BENEFIT PLAN
See independent auditors' report.
-77-
Actuarial
Actuarial
Value
Accrued
Unfunded
L'AAL as a
Actuarial
of Assets
Liability
AAL
Funded
Covered
% of
Valuation
(AVA)
(AAL)
HIAAL)
Ratio
Payroll
Payroll
Date
(a)
(a)/(b)
(c)
06/0L/07
$ 13,602,031
$ 13,602,03t
0.00%
21,886,909
6115%
06/30/09
13,626.000
13,626,000
0°00%
23.100,000
58.99%
See independent auditors' report.
-77-
REVENUES:
Taxes
Licenses and permits
Fines and forfeitures
Investment income
Intergovernmental
Charges for services
Rental income
Other revenue
TOTAL REVENUES
EXPENDITURES:
Current:
General government
Pub! le safety
Public work,
Community services
Capital outlay
Debt service:
Interest and fiscal charges
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
OTHER FINANCING SOURCES:
Transfers in
Sale of property
TOTAL OTHER
FINANCING SOURCES
CITY OF TUSTIN
BUDGETARY COMPARISON SCHEDULE
GENE P,ALFUND
For the year ended June 30, 2011
Budgeted Amounts
Original Final
Variance with
Final Budget
Positive
Actual (Negative)
$ 34,642,300
34,642,300
S 36,588,482
$ 1.946,182
2,043,500
339,500
716.1144
376,644
751,900
751,900
893,642
141,742
248,000
248,000
911.146
663,146
1,022,900
1,013,000
120,299
107,299
1,796,800
3,506,200
4,915,295
1,409,095
117,100
470,100
180,520
(289,580)
2,309,300
2,315,800
2,334,187
18,387
42,932,000
43,286,800
47.659,715
4,3 71915
6, 786,940
6,850,340
7,432,956
(582,616)
28,324.517
28,324,517
27,410,893
913,624
107352,500
10,459,900
9,110,621
1,349,2'79
1,815,700
2,815,700
1752,911
62,789
1,369M0
1,952,543
1.107,607
844,936
863,861 (863,861)
49,649957 50,403,000 48,678,849 1,724,151
(6,717,457) (7,116.200) (1,019,134) 6,097,066
4,869,703 3,832,745 2,620,957 (1,211,788)
3,000 -,0W 18.138 15,138
4,872,703 3,835,745 2.639,095 (1,196,650)
NET CHANGE IN FUND BALANCE (1,844,754) (3,280,455) 1,619,961 4,900,416
FUND BALANCE - BEGINNING OF YEAR 150,010,159 150n010,159 150tO 10,11 59
FUND BALANCE - END OF YEAR S 148,165,405 $ 146,729,704 151,630,120 S 4.900,416
See independent auditors' report and note to required supplementary infortnation,
_78®
CITY OF USTIN
NOTE TO REQUIRED SUPPLEMENTARY INFORMATION
1. BUDGETS AND BUDGETARY ACCOUNTING:
The City follows these procedures in establishing the budgets.
(1) The annual budget is adopted by the City Council after the holding of a hearing and provides
for the general operation of the City. The operating budget includes proposed expenditures and
the means of financing them.
(21) The City Council approves total budgeted appropriations and any amendments to
appropriations throughout the year. This "appropriated budget" covers City expenditures in all
governmental funds, except for debt service and capital improvement projects carried forward
from prior years.
The City Manager is authorized to transfer budgeted amounts between departments. Actual
expenditures may not exceed budgeted appropriations at the fund level. Budget figures used in
the accompanying required supplementary information are the original and final adjusted
amounts,
(3) Fon-nal budgetary integration is employed as a management control device during the year,
Commitments for materials and services, such as purchase orders and contracts, are recorded as
encumbrances to assist in controlling expenditures. Capital projects appropriations are an
automatic supplemental appropriation for the next year. All others lapse unless they are
encumbered at year-end or re -appropriated through the formal budget process. There were no
outstanding encumbrances at year-end.
(4) Annual budgets are adopted for the General and Special Revenue Funds on a basis substantially
consistent with accounting principles generally accepted in the United States of America.
Accordingly, actual revenues and expenditures can be compared with related budgeted amounts
without any significant reconciling items. No budgetary comparisons are presented for the
City's Debt Service and Proprietary Funds as the City is not legally required to adopt budgets
for these fund types. Budgetary comparisons of Capital Projects Funds are primarily
"long-term" budgets, which emphasize capital outlay plans extending over one year. Because of
the long-term nature of these budgets, "annual" budget comparisons are not considered
meaningful and accordingly, no budgetary information is provided.
See independent auditors' report.
-79-
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SUPPLEMENTARY INFORMATION
The page left blank intentionally
CITY OF TUSTIN
OTHER GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS are used to account for the proceeds of specific revenue sources that
are restricted by law or administrative action for a, specific purpose.
Gas Tax - This fund accounts for revenues and expenditures apportioned under the Street and
Highways Code of the State of California. Expenditures may be made for any street -related purpose
allowable under the Code.
Measure M - This fund is used to account for monies received from the County for street projects,
EqLk Acquisition and DevelopnLent - This fund is used to account for fees received from developers to
develop the City's park system.
Asset Forfeiture - This fund is used to account for monies received from the Federal government that
are used for special law enforcement purchases.
A LirI
Quality - This fund is used to account for funds received from South Coast Air Quality
Management District to be used for reducing pollution.
Supplemental Law Enforcement - This law was established under Government Code Section 30061
enacted by A133229, Chapter 134, of the 1996 Statutes and is an appropriation from the State Budget
for the "Citizen Option for Public Safety Program", This fiend can only be used for police front line
municipal activities that provide police services to the City in prevention of drug abuse, crime
prevention, and community awareness programs,
DEBT SERVICE FUNDS are used to account for the accumulation of resources for, and payment of,
long-term liabilities, interest, and related fiscal agent costs.
Town Center Pro'e�etAreq - This fund records the accumulation and disbursement of monies to meet
the debt service requirements of the Town Center Redevelopment Project.
South CentgLplroJect Area - This fund is used to meet the debt service requirements of the South
Center Project Area.
-83-
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CITY OF TUSTIN
OTHER GOVERNMENTAL FUNDS
(CO NTINTUED)
CAPITAL PROJECTS FUNDS are used to account for financial resources to be used for the
acquisition or construction of major capital facilities, and for the improvement, rehabilitation, and
redevelopment of the Community Redevelopment Agency project areas,
I
Other Coital Projects - This fund is used to account for capital projects which are not funded by a
specific source.
Construction 95-1 - This fund accounts for infrastructure improvements to the Tustin 95-1 Area,
Town Center Project Area - This fund accounts for acquisition and construction activity in the Town
Center Redevelopment Project Area.
Low Income Housing - This fund accounts for acquisition and construction activity for low income
housing to residents of South Central and Town Center Project Areas. As prescribed by the California
Health and Safety Code, 20% of Redevelopment Agency tax increment revenue is set aside in this fund
for the purpose of low income housing development.
Marine Base Project Area -`This fund accounts for acquisition and construction activity in the Marine
Base Redevelopment Project Area.
South, Central Project Area - This fund accounts for acquisition and construction activity in the South
Central Redevelopment Project Area.
Marine Base Low IncomeHousing - This fund accounts for acquisition and construction activity for
low income housing. As prescribed by the California Health and Safety Code, 20% of Redevelopment
Agency tax increment revenue is set aside in this fund for the purpose of low income housing
development.
CITY 0FLuSTIN
COMBINING BALANCE SHEET
OTHER GOVERNMENTAL FUNDS
June 30, 2011
LIABILITIES AND FUND BALANCES
LIABILITIES:
Accounts payable and accrued liabilities $ 2,727,349 S 39,688 88,643
Due to other funds - - -
Deposits payable -
Deferred revenue - 262,345 -
TOTAL LIABILITIES 2,727,349 302,033 88,643
FUND BALANCES:
Nonspendable - - -
Restricted 2,536,735 2,215,000 - 219,893
Assigned - - 8,612,595 -
Unassigned - - - -
TOTAL FUND BALANCES 2,536,735 2.215,000 8,612,595 219,893
TOTAL LIABILITIES
AND FUND BALANCES 5,264,084 S 2,517,033, 8,701,238 219,893
See independent auditors' report.
Special Revenue Funds
Park
Acquisition
and
Asset
Gas Tax
Measure M
DeveI22!Lent
Forfeiture
ASSETS
Cash and investments
S 4.952,120
2,150,184
S 8,692,052
219.725
Cash and investments with fiscal agents
-
-
-
-
Receivables:
Accounts
308,183
365,207
2,549
-
Interest
3,781
I,Ei42
6,637
168
Loans
-
-
-
Notes
-
Allowance for uncollectibles
-
Advances to other funds
-
Prepaid items and deposits
-
Land held for resale
-
-
-
TOTAL ASSETS
S 5,264,084
S 2,517,033
8,701,238
S 219.,893
LIABILITIES AND FUND BALANCES
LIABILITIES:
Accounts payable and accrued liabilities $ 2,727,349 S 39,688 88,643
Due to other funds - - -
Deposits payable -
Deferred revenue - 262,345 -
TOTAL LIABILITIES 2,727,349 302,033 88,643
FUND BALANCES:
Nonspendable - - -
Restricted 2,536,735 2,215,000 - 219,893
Assigned - - 8,612,595 -
Unassigned - - - -
TOTAL FUND BALANCES 2,536,735 2.215,000 8,612,595 219,893
TOTAL LIABILITIES
AND FUND BALANCES 5,264,084 S 2,517,033, 8,701,238 219,893
See independent auditors' report.
Special Revenue Funsis {Conimued)
Debt Service Funds
Total
Town
South
Total
Supplemental
Special
Center
Central
Debt
Air
Law
Revenue
Project
Project
Service
QEality_
Enforcement
Funds
Area
Area
Funds
72.959
S 39,243
S 16.126,283
S 1,649,059
4,993,843 S
6,642.902
-
-
-
1 7100,255
-
1,700,255
17,617
11,316
704,872
37,057
46,867
83,924
56
30
12.314
1,259
3.813
5.072
6,9925106
6,992,106
13,984,212
90,632
S 50,589
S 16,843,469
S 10,379,736
S 12,036,629 S
22,416365
3,890 $ 2,859,570 484 S 4,682 S 5,166
- - - 4.650,000 4,650,000
- 262,345 698,190 698.188 1,396,378
3,890 3,121,915 698,674 5,352,870 6,05 1,544
- - - 6,293,916 6,293,918 12,587,834
90.6332 46,699 5,108,959 3,387,146 389,841-3 3,776,987
- - 8,612,595 - - -
90.632 46,699 13,721,554 9,681,062 6,683,759 16,364,821
$ 90,632 $ 50,589 $ 16,843,469 S 10.1379,736 $ 12,036,629 $ 22,416,365
-87-
mulym��
COMBINING BALANCE SHEET
OTHER GOVERNMENTAL FUNDS
(CONTINUED)
ASSETS
Cush and investments
Cash and investments with fiscal agents
Receivables:
Accounts
Interest
Loans
Notes
Allowance for uncollectibles
Advances to other funds
Prepaid items and deposits
Land field for resale
LIABILITIES AND FUND BALANCES
LIABILITIES:
Accounts payable and accrued liabilities
Due to other funds
Deposits payable
Deferred revenue
TOTAL LIABILITIES
FUND BALANCES:
Nonspendable
Restricted
Assigned
Unassigned
TOTAL FUND BALANCES
TOTAL LIABILITIES
AND FUND BALANCES
June 30 2011
Ca ital Projects Funds
Town
Other Center
Capital Construction Project
Projects 95-1 Area
12.476676 $ 19281,813 S 4,649,628
3,869, 142
247,032 -
9,526 3,553
1.727,456 -
- 855
$ 14,460,490 $ 5,150,955 $ 4,654,036
S 1,167.485 1,796 S 11,,441
1,574.,827 - -
2,742,312 1.796 11,441
1,727,456 - 855
- 5,149,159 4k41,740
9.990 722 -
11,718,178 5,149,159 —4,642,59,41–
$ 14,460,,490 $ 5,150,955 $ 4,654,036
See independent auditors' report,
_88-
Capital Proiects Funds (Continued)
Marne
South
Mlarine Base
Total
Total
Low
Base
Central
Low
Capital
Other
Income
Project
Project
Inconne
Projects
Governmental
1-lousi2,g_
Area
Area
Housing
Funds
Funds
12,331,1 5
$
40.153,343
S
13.743.371
2,881,128
S
87516.824
110,286,1)09
1,248,358
-
-
624,1"9
5,741,679
7,441934
21,416
550
-
22.218
291,216
1,080,012
51,175
30,661
10,496
2,200
107,611
124,997
1,095.904
-
-
-
1.1095,904
1,095,904
19,678, 176
12,746,467
32,424,643
32,424.,643
(20,400,880)
(12.746,467)
(33J47,3471)
(33,147t347)
-
-
-
1,727.,456
15,711,668
30,000
480
4.,495
-
35,830
35,830
217,606
-
1.345,000
145,071
1,707,677
1,707,677
14,272,820
$
40,185,034
$
15,103,362
S
3,674,796
97.501.493
$
136,761,327
21,869
$
531,316
$
18,323
S
111,431
S
15763,661
$
4,628,397,
-
-
-
-
-
4,650,000
9,936
1,00()
10,936
10.936
394J01
-
-
-
1,968,1928
3.627,651
425,906
532,;16 16
18,323
11.431
3,743,525
12,916,984
247,606
480
1,349A95
145,071
3,4',•
16,058,797
13,599,308
39,9947885
13,735,544
3,518,294
80,638,930
89,524,876
-
-
-
-
9,9953,722
18,603,317
-
(342,647)
-
-
-
(342,647)
(3-12-647)
13,846,914
39,652,718
15,085,039
3,663,365
93,757,968
123,844,343
14,272,820
$
40,185,034
S
15,103,362
S
3,674,796
97,501,493
S
136,761327
CITY OF TUSTIN
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - OTHER GOVERNMEN'TAL FUNDS
For the year ended June 30, 2011
See independent auditors' report.
Special Revenue Funds
Park
Acquisition
and
Asset
Gas Tax
Measure M
Devel2pLent
Forfeiture
REVENUES:
Taxes
S -
S -
S -
Investment income
22,131
10,151
31,348
741
Intergovernmental revenue
2,137,935
1,187.138
20,309
185,694
Charges for services
-
-
22,554
-
Rental income
83,549
Other revenue
-
-
32,800
-
TOTAL REVENUES
2,16O,066
1,197,289
190560
186,435
EXPENDITURES:
Current:
General government
9,600
63,372
Public safety
-
-
Communitv services
-
-
Capital outlay
3-2 12,345
292j146
458,384
Debt service:
Principal retirement
-
-
interest and fiscal charges
-
-
-
-
TOTAL, EXPENDITURES
3,212,345
292,046
467,984
63,372
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
(1,052,279)
905,243
(2.77x424)
123,063
OTHER FINANCING SOURCES (USES),
Transfers in
-
-
Transfers out
-
(210 874)
Issuance of debt
-
TOTAL OTHER FINANCING
SOURCES (USES)
-
(2111,874)
-
NETCHANGE IN
FUND BALANCES
(1,052,279)
694,369
(277,424)
123,063
FUND BALANCES - BEGINNING
OF YEAR (AS RESTATED)
3,589,014
1,520,631
8,890,019
96,830
FUND BALANCES - END OF YEAR
2,536,735
2,215,000
S 8,612.,595
219,893
See independent auditors' report.
Special Revenue Funds (Continued)
Debt Service Funds
-170-t',
Town
South
Total
Supplemental
Special
Center
Central
Debt
Air
Law
Revenue
Project
Project
Service
(__ua I i ty,
Enforcement
Funds
Area
Area
Funds
S -
S -
3,981 ,348
2,80600
S 6,7WO218
353
345
65,069
1 o9j)2 1
36,215
145,236
-
163,154
3,694,230
-
-
-
82,636
-
105,190
-
-
-
-
83.549
-
-
-
-
-
32.800
-
-
-
82.989
163,499
3,980,838
4,090,369
2.842,895
6=9334264
-
-
'72,972
-
-
97,621
97,621
-
-
-
-
-
772,722
518,057
1.,290,779
169,000
23,725
4,155,500
-
-
-
-
-
1,205,000
-
1,2105,000
-
-
-
446,334
29,604
475,938
169,000
121,346
4,326,093
2,424,056
547,661
2,971,717
180,1111}
42,153
........ (345,255}
1.666,313
2,295,234
3,961,547.
(210,874)
-
10,8 74}
-
-
(867011}
42,153
(556,129)
1,666,313
2,295,234
3,961,547
176,643
4,546
14,277.683
8,014749
4.388,525
12,403,274
90,632
$ 46,699
S 13,721.554
$ 901,062
S 6,683,759
16,164,8211
(Continued)
CITY OF TUSTIN
COMBINING STAT-EMENT OF REVENUES, EXPENDITURES AND
C14ANGES IN FUND BALANCES - OTHER GOVERNMENTAL FUNDS
(CONTINUED)
For the veer ended June 30, -1011
REVENUES:
Taxes
Investment incorne
Intergovernmental revenue
Charges for services
Rental income
Other revenue
TOTAL REVENUES
EXPENDITURES:
Current:
General government
Public safety
Community services
Capital outlay
Debt service:
Principal retirement
Interest and fiscal charges
TOTAL, EXPENDITURES
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES):
Transfers in
Transfers out
Issuance of debt
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN
FUND BALANCES
FUND BALANCES - BEGINNING
OF YEAR (AS RESTATED)
FUND BALANCES - END OF YEAR
Canital Proiects Funds
Town
Other Center
Capital Construction Project
Projects 95-1 Area
S $
115,255 3,597 16,351
558,376 - -
50,797 - -
724.428 3,597 16,351
- - 198,268
3,111,739 90,926 2,419
- - 4,127
3,111,739 90,926 204,813
87,3 , 11 8,,329) 188-402)
(2,387.311) 11) (87,329) (188,462)
14,105,489 5,236,488 4,831,057
11,718,178 $ 51t49,159 4,642,595
=Z --
See independent auditors' report.
-92-
71972
- - - - - 97,621
230,071 2,930,888 193,839 145,093 3,€198,159 4,988,938
- 101,215 259.1919 - 3,5(16,2 1 7, 7,721,717
836,607
Capital Projects Funds (Continued)
-
418,333
1,255,000
Marine
South
Marine Base
Total
Total
Low
Base
Central
Low
Capital
Other
Income
Project
Project
Income
Projects
Governmental
flousjp_g
Area
Area
flousi
Funds
Funds
I.697M07
24,057
(1,325,546)
$ 2,450,099
4,147,106
$ 10,935,134
39,908
271,296
49,53 r
9,770
505,714
716,019
-
-
(1,325,546)
-
558,376
4,252,606
-
-
(1,802,211)
37,272,869
-
105.190
74,561
4,400
15,000
2,379,849
93,961
177,510
- 798
6,470
-
-
58.065
90,865
1,812,274
282,166
64,53'7
2,459.869
5,363,222
16,277,324
71972
- - - - - 97,621
230,071 2,930,888 193,839 145,093 3,€198,159 4,988,938
- 101,215 259.1919 - 3,5(16,2 1 7, 7,721,717
836,607
-
-
418,333
1,255,000
2,460,0(0
1,222,201
1,251
12,143
750,441
1,99€4,163
2,466,101
2,288,939
3,033.354
465,901
1,313,867
10,509,539
17,807,349
(476,065)
(2,751,1881
(4(31 ,364)
1,146,0025
140, -317)
(1,530.025)
24,057
24.057
24,057
(1,325,546)
-
(1.084,537)
(2,410,083)
(16201957)
40,000,000
-
40,000,000
40,000,000
(1,325,546)
40,024,057
084,537}
37,613,974
37,403,100
(1,802,211)
37,272,869
(401.364)
61,465
32,467,657
35,873,075
15,649J25
2,379,849
15,486,403
3,601,900
61,290,311
87,971,268
13,846,914
39,652,718
15,085.039
S 3,663,365 S
93,757,968
5 123,844,343
mff��
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
GAS TAX SPECIAL REVENUE FUND
REVENUES:
Investment income
Intergovernmental revenue
TOTAL REVENUES
EXPENDITURES:
Capital outlay
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
For the vear ended June 30,12011
See independent auditors' report.
-94-
Variance with
Final Budget
Budgeted
Amounts
Positive
--22LIn—al
Final
Actual —
LtNegative)
S 18,600
S M600
$ 22.131
S 3,531
1348,4210
1,175,200
2,137,935
962,735
1,3167,020
1,193,800
2,16{),066
966,266
3,341,180
3,949,912
3,212,345
737,567
(1,974,160)
(2,756,112)
(1,052.,279)
1,703,833
3,589,014
3,589,014
3,589,014
-
$ 1.614,854
$ 832,902
S 2536,735
S 1;703,833
See independent auditors' report.
-94-
CITY OF TUSTIN
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
MEASURE'M SPECIAL REVENUIE FUND
For the year ended June 30, 2011
See independent auditors` report.
Variance with
Final Budget
Budgeted Amounts
Positive
Final
Actual
riye
(?legative}
REVENUES:
Investment income
S 9.000
S 9,000
10,151
S 1,151
Intergovemmental revenue
647,708
647,708
1;187,138
539,430
TOTAL REVENUES
656,708
656.,708
1,197,289
540,581
EXPENDITURES:
Capital outlay
2,476,033
2,476,033
292,046
2,181987
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
(I,810,325}
(1,819,325)
X305,243
2,71724,568
OTHER FINANCING USES:
Transfers out
(210874)
210,8774)
NET CHANGE IN FUND BALANCE
(1,819,325)
(1,819,325)
694,369
2,511694
FUND BALANCE - BEGINNING OF YEAR
1,520,631
1,520631
1,520,631
-
FUND BALANCE - END OF YEAR
S 228,694
==(=298==6=94)
S 2,215,000
S 21,513,694
See independent auditors` report.
CITY OFTUSTIN
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
PARK ACQUISITION AND DEVELOPMENT SPECIAL REVENUE FUND
For the year ended June 30, 2011
See independent auditors' report.
Variance with
Final Budget
Amount-,
Positive
-Budgeted
Original
Final
Actual
_LN-elative)
REVENUES -
Investment income
122.000
122,000
S 31,348
(90,652)
Intergovernmental revenue
-
-
20,309
20,309
Charges for services
13,000
13,000
22,554
9,554
Rental income
-
-
83,549
83,549
Other revenue
-
-
32,800
32,800
TOTAL REVENUES
135,000
135,000
190,560
55,560
EXPENDITURES:
Current:
General government
-
-
9,600
(9,600)
Capital outlay
673,000
687,000
458,384
228,616
TOTAL EXPENDITURES
673,000
687,000
467,984
219,016
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
(538,000)
(552,000)
(277,424)
274,576
FUND BALANCE - BEGINNING OF YEAR
_8,890;019
8,890,019
8,890,019
-
FUND BALANCE - END OF YEAR
8.1352,019
8,338,019
8,612,595
274,576
See independent auditors' report.
MUMOMENIFEME
SCHEDULE OF REVENUES., EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGETAND ACTUAL
ASSET FORFEITURE SPECIAL REVENUE FUND
REVENUES:
Investment incorne
Intergoverntncrital revenue
'roTAL REVENUES
EXPENDITURES:
Current:
General government
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
For the year ended June 30, 2011
50.000 70,000 63,372 6,628
1,300 (8,700) 123,063 131,763
96,830 96,830 96.830 -
$ 98,130 $ 88,130 219,893 S 131,763
See independent auditors' report.
-97-
Variance with
Final Budget
Budgeted
Amounts
Positive
Oribjnal
Final
Actual Itive)
1.300
S 1,300
$ 741 (559)
50,000
WOW
185.694 125,694
51,300
61,300
186,435 125,135
50.000 70,000 63,372 6,628
1,300 (8,700) 123,063 131,763
96,830 96,830 96.830 -
$ 98,130 $ 88,130 219,893 S 131,763
See independent auditors' report.
-97-
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND Ac'rUAL
AIR QUALITY SPECIAL, REVENUE FUND
REVENUES:
Investment income
Charges for sem-ices
TOTAL REVENUES
EXPENDITURES:
Capital outlay
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
For the year ended June 30, 2011
Variance with
Final Budget
Buddaeted Amounts Positive
ia2l Final Actual _jNe�aative
100 100 3153 253
81,600 81,600 82,636 1,036
81,700 81,700 82,989 1,289
16000 169,000
81,700 (87300) (86,011) 1.289
176,643 176,643 176,643 -
S 258,343 $ 89,343 90,632 $ 1,289
See independent auditors' report.
-98-
offlumemossam
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACT UAL
SUPPLEMENTAL, LAW ENFORCEMENT SPECIAL, REVENUE FUND
For the vear ended June 30, 2011
See independent auditors' report.
-99-
Variance with
Final Budget
Budgeted Amounts
Positive
--21rgmal
Final
Actual—
egative)
REVENUES:
Investment income
345
S 345
Intergovemmental revenue
116,000
116,000
163,154
47,154
TOTAL REVENUES
116,000
116,000
163,499
47,499
EXPENDITURES:
Current:
Public safety
88,200
88,200
97,621
(9.421)
Capital outlay
-
-
23,725
_12333,7251
TOTAL EXPENDITURES
88,200
88,200
121,346
L33-146)
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
27,800
27,800
42,153
14,353
FUND BALANCE - BEGINNING OF YEAR
4,546
4,546
4,546
-
FUND BALANCE - END OF YEAR
32,346
32,346
46,699
14,35 3
See independent auditors' report.
-99-
The page left blank intentionally
CITY OF TUSTIN
AGENCY FUNDS
June 30, 2011
AGENCY FUNDS are used to account for assets held by the City in a trustee capacity or as an agent
for individual, private organizations and other governments.
Assessment District 95-1 - This fund records the deposit of monies held to pay the debt service
requirements of the assessment district.
Assessment District 95-2 - This fund records the deposit of monies held to pay the debt service
requirements of the assessment district.
orrrnunity Facilities District (}4-(}1 - This fund records the deposit of monies held to pay the debt
service requirements of the community facilities district.
Community Facilities District 06-01 - This fund records the deposit of monies held to pay the debt
service requirements of the community facilities district,
Community _Facilities District 07-01 - This fund records the deposit of monies held to pay the debt
service requirements of the community facilities district.
COMBINING STATEMENT OF ASSETS AND LIABILITIES
:ALL AGENCY FUNDS
June 10, 2011
TOTAL LIABILITIES S 8,443,395 S 3,063,572 3,126,953 9,145,735 1201.101 S 25,980,756
See independent auditors' report.
- 102 -
Community
Community
Coit munitv
Assessment
Assessment
Facilities
Facilities
Facilities
District
District
District
District
District
95-1
95-2
04-01
06-01
011-01
Total
ASSETS
Cash and investments
with fiscal agents
$ 8,281,889
3,029,637
3,120 784
S 9,097,213
2,201,049
$ 25,730,572
Taxes receivable
21,752
33,935
6,169
48,522
52
110,430
Due from City of Tustin
139,754
-
-
-
-
139,7154
TOTAL ASSETS
S 8,443,395
3,063,572
3,126,953
9,145,735
$ 2,201,101
S 25,980,756
LIABILITIES
Accounts payable
31,624
$ 34,186
5,128
52,659
467
$ 124.,064
Due to the City of Tustin
313.679
155,836
132.1525
926,395
352,955
1,881,390
Due to bondholders
8,098,092
2,873,550
2,989,300
8,166,681
1,847.679
23,975,302
TOTAL LIABILITIES S 8,443,395 S 3,063,572 3,126,953 9,145,735 1201.101 S 25,980,756
See independent auditors' report.
- 102 -
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
ALL AGENCY FUNDS
For the year ended June 30, 201 1
See independent auditors' report, (Continued)
- 103 -
Balance
Balance
July 1,
June 30,
2010
Additions
Deletions
2011
ASSESSMENT DISTRICT 95-1
ASSETS:
Cash and investments with fiscal agents
$
9,395,603
S
7,304,814
8,418,528
8,281,889
Taxes receivable
24,996
21,752
24,996
21,752
Due from the City
-
139,754
-
139,754
TOTAL ASSETS
S
9,420,599
$
7,466.320
$
8,443,524
$
8,443, 395
LIABILITIES:
Accounts payable
$
26,878
S
1,747,680
$
1,742,9314
$
31,624
Bice to city of Tustin
236,940
313,679
236,940
313,679
Due to bondholders
9,156,781
5,404,961
6,463,650
8,098,092
TOTAL LIABILITIES
$
9,420,599
$
7,466,320
$
8,443,524
8,443.395
ASSESSMENT DISTRICT 95-2
ASSETS:
Cash and investments with fiscal agents
$
3,104,668
$
1.353359
S
1,428,390
S
3,029,637
Taxes receivable
9,618
33,935
9,618
33,935
TOTAL ASSETS
$
3,114,286
S
1,387.294
$
1,438,008
3,061572
LIABILITIES"
Accounts payable
$
9,642
$
1,231,458
$
1,X06 x)14
34,186
Due to city of rustin
12,161
155,836
12,361
155,836
Due to bondholders
3,092,283
-
218,733
2,873,550
TOTAL LIABILITIES
3,114,286
$
1,387,294
S
1,43&0081
$
3.063,572
See independent auditors' report, (Continued)
- 103 -
mummmemmmom
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
ALL AGENCY FUNDS
(CONTINUED)
For the year ended June 30, 2011
Accounts payable
Balance
-
$
Balance
$
July 1,
S
5,128
June 30,
2010
Additions
Deletions
2011
�OMXIUNITY FACILITIES DISTRICT 04-01
132,525
Due to bondholders
ASSETS:
60,293
-
Cash and investments with fiscal agents
$ 3,039,780
856,255
$ 775,251
3,120,71 84
Taxes receivable
33,179
6,169
33,179
6,169
TOTAL ASSETS
$ 3,072,959
$ 862.4214
S 808,430
3,126,953
Accounts payable
$
-
$
669,606
$
664,478
S
5,128
Due to City of Tustin
143,952
1,32,525
143,952
132,525
Due to bondholders
2,929,007
60,293
-
2,989,300
TOTAL LIABILITIES
$
3,072.,959
$
862,424
$
808,430
3,126,953
:OVIMUNITY FACILITIES DISTRICT 06-01
ASSETS:
Cash and investments with fiscal agents
$
9,812,090
S
5,955,964
$
6,670,841
$
9,097,213
Taxes receivable
67,071
48,522
6707I
48,522
TOTAL ASSETS
$
9,879,161
$
6t011}4,486
$
6,7317,912
9,145,735
LIABILITIES -
Accounts payable
$
1,964
S
3,908,743
$
3,858,048
S
52,659
Due to City of Tustin
29,152
1 ,840,894
943,651
926,395
Due to bondholders
9,848,045
254,849
1,936,213
8,166,681
TOTAL LIABILITIES
S
9,879,161
S
6.004,486
$
6,737,912
S
9,145,735
See independent auditors' report. (Continued)
- 104 -
ME-mM=
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
ALL AGENCY FUNDS
(CONTIMJED)
For the year ended June 30, 2011
Balance Balance
July 1, June 30,
2010 Additions Deletions 2011
'-OMMUNITY FACILITIES DISTRICT 07-01
ASSETS:
Cash and investments with fiscal agents $ 1,833,910 $ 8' 35,362 $ 468,223 $ 2,201,049
Taxes receivable - 52 - 52
TOTAL ASSETS $ 1,833,910 $ 835,414 S 468,223 $ 2,201,101
LIABILITIES:
Accounts payable 465,435 464,968 $ 467
Due to City of Tustin 3,255 352,955 3,255 352,955
Due to bondholders 1,830,655 17,024 1,847,679
TOTAL LIABILITIES S 1,833,910 $ 835,414 $ 468,223 $ 2,201,10I
TOTAL ALL AGENCY FUNDS
ASSETS:
Cash and investments with fiscal agents $ 27.186,051 S 16,305,754 S 17,761,233 S 25,730,572
Taxes receivable 134,864 110,430 134,864 110,430
Due from the City - 139.754 - 139,7154
TOTAL ASSETS S 27320,915 S 16,555,938 S 17,896,097 $ 25,980,756
LIABILITIES:
Accounts pay=able;
$ 38,484
$ 8,022,922
7,937,342
$ 124,064
Due to City of Tustin
425,660
2,795,889
1,340, 159
1,881390
Due to bondholders
26,856,771
5,737,127
&618,596
23,975,302
TOTAL LIABILITIES
$ 27,320,915
$ 16,555,938
$ 17,896,097
S 25,980,756
See independent auditors' report,
The page left blank intentionally
ED=
STATISTICAL SECTION
The lugs left blank intentionally
DESCRIPTION OF STATISTICAL SECTION CONTENTS
This part of the City of Tustin's Comprehensive Annual Financial Report presents detailed information
as a context for understanding what the information in the financial statements, note disclosures, and
required supplementary information say about the City's overall financial health.
Contents:
MR
Financial Trends - 'Theses schedules contain trend information to help the
reader understand how the City's financial performance and well-being have
changed over time, 110
RRevYent Cat aci - These schedules contain information to help the reader
assess the City's most significant local revenue source, the property tax. 120
Debt CWgcitv - These schedules present information to help the reader assess
the affordability of the City's current levels of outstanding debt and the City's
ability to issue additional debt in the future. 126
Demo chic and Econornic Information - These schedules offer demographic
and economic indicators to help the reader understand the environment within
which the City`s financial activities take place. 134
Operating Information - These schedules contain service and infrastructure
data to help the reader understand how the information in the City's financial
report relates to the services the City provides and the activities it performs. 136
Unless otherwise noted, the inforination in these schedules is derived from the
Comprehensive Annual Financial Reports for the relevant year. The City
implemented GASB Statement 34 in 2005, schedules presenting
goverriment-wide information include inforrnation beginning in that year.
NET ASSETS BY COMPONENT
Last Seven Fiscal Years
(accrual bases of accounting)
Business -type activities:
Invested in capital assets,
net of related debt $ 22,198,864 $ 20,494,561 S 22,150,723 S 22,267386
Restricted - - - -
Unrestricted 207,310-935 206,342,244 199,289,608 172,421511
Total business -type activities net assets $ 229,509,799 $ 226,836.8115 j $ L
221,440,331 194,611,197
=�
Primary government:
Fiscal Year
21005
2006
2007
2008
Governmental activities:
net of related debt
$ 260,681,661
$ 281,627,346
$ 3017,482,225
Invested in capital assets,
Restricted
5_3 3,511,631
55,021,376
94,111,615
net of related debt
$ 238,482,797
$ 261,132,785
$ 285,331,502
343,062,465
Restricted
53,5 11,631
55,021 X6
94,111,615
161 ,669,815
Unrestricted
8,287,989
14,993,866
19,930,904)
1{ ±320,020)
Total governmental activities net assets
$ 300,281417
$ 331,148,027
_$ 35,9,506,153
$ 490,412,260
Business -type activities:
Invested in capital assets,
net of related debt $ 22,198,864 $ 20,494,561 S 22,150,723 S 22,267386
Restricted - - - -
Unrestricted 207,310-935 206,342,244 199,289,608 172,421511
Total business -type activities net assets $ 229,509,799 $ 226,836.8115 j $ L
221,440,331 194,611,197
=�
Primary government:
Invested in capital assets,
net of related debt
$ 260,681,661
$ 281,627,346
$ 3017,482,225
365,329,851
Restricted
5_3 3,511,631
55,021,376
94,111,615
161,669,815
Unrestricted
215,598,924
221,336,110
179,352,644
158,101,491
Total primary government net assets
$ 529,792,216
$ 557,984,832
$ 580 946,484
6 5,101,1.57
GASB 34 was implemented for the fiscal year ended June 30, 2005,
Information prior to implementation of GASB 34 is not available.
_ 110-
Fiscal Year
2009 2010 2011
357,299,104 $ 360,282,692 378,911.546
145,602,640 135,670,302 116,718,495
104,037,153 114,737,049 116,545,351
()=06,()3=9, c)7 5 610,690,043 612,175,392
24,904,824 24,541,113 S 2'U72,492
1,191,694 - -
1,981,499 1,851,666 5,541,E=72
28,138,017 S 21{,392.779 26,414,164
382,263,928 384M3,805 $ 39984,038
146,794,334 135,670302 116,718,495
106,018,652 116,588,715 122,087,023
635,076,914 637,082,822 638,589,556
CHANGES IN NET ASSETS
EXPENSES AND PROGRAM REVENUES
Expenses:
Governmental activities:
General government
Public safety
Public works
Community services
Interest on lung -terra debt
Total governmental activities expenses
Last Seven Fiscal Years
(accrual basis of accounting)
Fiscal Year
2005 2006 2007 2008
$ 9,151,650
$ 10,269,053
7,926,778
S 8,668.759
21,748.046
23,255,837
25,269,653
27,875,230
14,169,030
14,354.535
19,091.1399
30,814,898
3,255,036
3,425,790
3,444,799
3,442,833
874,939
1,003,920
1,618,814
4,715,026
49;198,701
52,309,135
57,351,443
75,516,746
Business -type activities:
Water 9,324,853 9,365,401 11 879,958 11,870,706
Tustin Legacy 1.788,633 1,355.822 1,518,560 1 .279,802
Total business -type activities expenses 11,113,486 10,721,223 13;308,518 13,150,508
Program revenues:
Governmental activities:
Charges for services:
General government
Public safety
Public works
Community services
Operating grants and contributions
Capital grants and contributions
Total governmental activities
program revenues
Business -type activities:
Charges for services:
Water
Tustin Legacy
Operating grants and contributions
Capital grants and contributions
Total business -type activities
program revenues
Net, revenues (expenses):
Governmental activities
Business -type activities
Total net revenues (cxpenses?
1,928,287
2,388,279
2,540796
2,716,431
1,180,959
1,364,877
1,476,811
2,749,660
1,631,277
3,2330,212
2,987,687
1,688,753
941,297
876,199
916,075
929,548
2,377440
3,655,881
3,677,905
3,831,037
4.484,592
19,470,274
9,652,907
79,210,370
12,543,852
30,985,722
21,252.181
9
L1,125,800
8,478,119
8,858,151
10,418,522
10,923,061
1,328fi86
3,660,334
409,693
34,370
805,777
-
28,299,036
10,612,582
12,5 18,485
10,828,215
39,256,467
$ (36,654,849) S (21,323,413) $ (36,099,262-1 S 15,60( ),054
jOO,904) 1,797,26" (2,570i3303) 26,105,959
=1=13 -3
=Z,=15�5
,753
=1=(3=,S 9,565) 41.715,0
GASB 34 was implemented for the fiscal year ended June 30, 2005,
Information prior to implenrentation of GASB 34 is not available.
Fiscal Year
2001) 2010 2011
8,499,303 7,802,579 7,854,361
29,126,O 19 27,277,141 28,622,807
22,102,002 2016,686 19,809,907
5,1 112,770 12,7742,391 13,150,089
3.566,782 4,087,839 4,814,598
68,406,876 72,26,636 7425 1 ,762
12,569,331 11,938,146 12.578,667
1,259,093 - -
13,828,424 11,738,146 11578.667
1,694,464 1,404.925 1,109,150
2,136,772 1,1168,348 1,196,830
2,374,308 3,761,321 3.508.904
897,386 957,545 969.006
4,253,442 3,403,411 3,441,291
18.865,776 6,287,231 3,395,929
30,222,148 16,982,781 13,621,100
11,1281,679 10,594,47111 11422,746
22,587 -
11304,266 10,594,471 12,422,746
$ (38,184,728) (55,743,855) (60,630,662)
(2,524,158) (1,343,675)
(40.708,880)-087,5�30) (6(1,780-583)
- 113-
General revenues and other changes
in net assets:
Governmental activities:
Taxes:
Property taxes
Transient occupancy taxes
Business license taxes
Cather taxes
Sales tax
Motor vehicle in lieu, unrestricted
Investment income
Other general revenues
Gain (loss) on disposal of capital assets
Transfers
Total governmental activities
business type activities:
�
Pe actities:
MEtsaw
CHANGES IN NET ASSETS
GENERAL REVENUES
Last Seven Fiscal Years
(accrual basis of accounting)
Fiscal Year
2005 2006 2007 2008
$ 19,338,392
$ 21,2241797
28,617.1969
$ 31,070,501
139,8?9
155A99
161,105
16-1,831
N/A
N/A
N/A
NIA
1,320,209
1,409,696
1,534,720
1,665,60i
18,351,207
18,912,722
193 17,135
20,1428,465
455,244
433,795
443,222
3211,918
-
3,202,914
4,842,033
7,417,199
10,846,132
1,323,230
1,591;,{)99
1,523,530
(216,936)
(422,555)
-
(1366,208)
1,233,209
5,931,225
7,2434105
53,668,609
51,467,336
52,179,023
64,457,388
_11- 114,893,446
Investment -income
-
1,411.899
1.567,316
815,560
Gain (loss) on disposal of capital assets
8,358,415
-
3.519,618
(681)
k.4iscellaneous
509,956
49,070
23,337
Transfers
21,233,209)
X5,931,225)
(7,943,105)
53,668-609)
Total business -type activities
7,635,162
j4,470.,250j
856,1711
(52.830393
Total primary government
$ 59302,498
$ 47,718,767
$ 61,601,217
62,063,053
Changes in net assets:
Governmental activities
$ 14,812,487
$ 30,865,610
$ 28,358,126
130,502,500
Business -type activities
7,134,258
02,6"72,994)
(5,420,474)
26,721434)
Total primary government
$ 21.946,745
28,192,616
$ 22,931,652
$ 103,781,066
GASB 34 was implemented for the fiscal year ended June 30, 20051
inforniation prior wimplernentation of GASB 34 is not available.
Fiscal Year
2009 2010 2011
$ 34,021959
$ 28,347,659
S 30,205,8719
154,379
141,3335
142,915
356,565
337,867
3158,526
1,689,5773
1,720,505
1,648.319
19,858,142
15,917,332
18,597,453
252,666
6,122,789
6,189,249
4,863,469
4,086,852
2t' 358,847
2,314,540
1,520,662
1,700,323
101805.196
-
-
167,317,489
58,195, 0-01
61,201,511
164,764
86,654
158,242)
82,810
25,340
19.1064
(103,805.196)
-
-
_ 12 557,622
_112L557,622
111,994
177.306
63.,759,86" _� 58,306,995 61,378,8 17
129,132,761 2,451,146 S 5 711,849
(1 €16,1381,78(1} (1,231,681) 21,385
$ 23,050,981 $ 1,219,465 S 592,234
CITY OF T `STIN
FUND BALANCES OF GOVERNMENTAL FUNDS
Last Seven Fiscal Years
(modified accrual basis of accounting)
Fund Balance prior to GASB 54
Fund Balance prior to GASB 54
General fund:
N onspendable -
Committed
Assigned -
Unassigned
Total general funs - - -
All other other governmental funds:
Nonspendable
Restricted _ a
Committed _
Assigned - -
Unassigned - -
`Total all other governmental ental fund:
The City of Tustin has elected to show only, severs 1 ears of data for this schedule.
-116-
Fiscal Year
2105
2006
2007
2008
General fund:
Reserved
$
276,989
$
118,510
248,372
$
116,342
Unreserved
19,931,022
24,124,968
20,454,356
24,471,(}29
Total general funs
S
21,208,011
$
24,243,478
$
2M102,728
24,587371
All other governmental funds:
Reserved
32,804A61
34,612.789
68,724,358
S
76,696,588
Unreser-ved, reported an:
Special revenue funds
7,592,615
8,550,855
10,639,839
64,896,223
Debt service funds
1,936,057
2,510,686
-
-
Capital projects funds
17,029,831
11,145,244
12,388,651
17,558,428
Total all other governmental f€an&
S
29,362,964
S
56,819,574
S
91,752,848
S
159,151,239
Fund Balance prior to GASB 54
General fund:
N onspendable -
Committed
Assigned -
Unassigned
Total general funs - - -
All other other governmental funds:
Nonspendable
Restricted _ a
Committed _
Assigned - -
Unassigned - -
`Total all other governmental ental fund:
The City of Tustin has elected to show only, severs 1 ears of data for this schedule.
-116-
Fiscal Year
2009 2010 2011
1211,632,293 144,139,167
1,97L846 5,8711,992
122,604,139 150,010059 s
S 49,777,973 $ 66,609,267 $ -
16,437,1310 14,277,683 -
(6,774,245)
90,474,987 75,663,086
156,690,090 149,775,791 h
- 144, l 39,167 a 144,186,95 5
47,608 -
5,1323.384
7,443,165
150,010,159 151,630,120
- 34,800,738 22,352.713
11€ ,455,097 130,673,281
344,708 -
- 11,670,324 18,6133317
(8,495,076) (.0,989 463}
s - 149.775.791 160,639,848
- 117-
0``HANGES IN FUND BALANCES 01" GOVERNMENTAL FUNDS
Last Seven Fiscal Years
(nodified accrual basis of accounting)
Other financing sources (uses):
Proceeds froin debt issuance
-
Discal Year
25,000.000
-
Transfers in
2005
2006
2007
2008
Revenues:
(3,970.443)
(5,270,356)
(10,795,694)
(7,803,274)
Taxes
39,29{},491
40,542,668
48,306,569
51,775,505
Licenses and permits
1,008,965
2,153,355
2,095,154
2,710,309
Fines and forfeitures
895,816
784.1966
783,390
818,868
Investment income
1,662,329
1,849,921
4,228,582
7,529,448
Intergovernmental revenues
7,613,141
15,338,254
20,136,822
27,394,402
Charges for services
1,530,537
2,107,336
1043.251
1,583,324
Rental income
208,222
304,733
349,450
786,438
Developer contributions
-
-
-
-
Other revenues
12,827.879
8,260,032
3,160,370
59,309,772
Total revenues
65m03-17 380
72.341,265
81n1O3,548
151,908,106
Expenditures:
Current:
General government
8,429.464
10,134,368
7,406.,916
8,295,887
Public safety
21,075,766
22697,122
24,450,803
26,561,960
Public works
7,475,332
7,691,894
9,651.745
10,136,680
Community services
2,834,472
3,026,890
3,023,644
2,886,132
Capital outlay
13,509,,215
27,057,889
28,503,673
15,080,865
Debt seri=ice.
Principal retirement
1,220,000
1,275,000
1,330,000
1,055,000
Interest and fiscal charges
484,53:3
1,023,622
1,620,897
4,718,806
Bond issue costs
-
_
Total expenditures
55=428.782
72,906,785
76,387,682
64,735,3:3£)
Excess (deficiency) of revenues
over (under) expenditures
9,608,598
__(5f)5,520)
4,715,966
83,172,776
Other financing sources (uses):
Proceeds froin debt issuance
-
-
25,000.000
-
Transfers in
5,203,652
7,190,511
10,795,694
7,803,274
Transfers out
(3,970.443)
(5,270,356)
(10,795,694)
(7,803,274)
Contribution to developer.
_
-
-
(11,934,400)
Sale of property
65,431
137,442
1.676.618
44,658
Total other financing sources (users)
1,298,640
2,057,597
26,676,618
(11.489,742)
Net change in fund balances
10,907.238
1,492,077
"i 31,392,524
71,283.034
Debt service as a percentage of
noncapital expenditures 5.29% 5.28% 6.571;�o 12.06%
The Cit} of Tustin has elected to show only seven years of data for this schedule.
Fiscal Year
2009 2010 2011
56,198,002
52,579,529
57,324,011
1,692.955
3,538,198
716,144
832,188
890,770
893.642
4,429.915
31, 198,484
1,632,215
14,626,663
5,378,430
5,3712,905
4,497,309
2,7108,705
54020A85
771,807
869,645
358,030
-
4,051,180
1,593,475
1,188,200
1,028,432
2,425,052
84,237,039
74,243,373
75,335,959
6,728,236
7,197,7109
7,505,928
27,759,939
26,359,435
27508,514
11,311,291
10,133,685
9,110,621
5,005,986
12,251,479
11740,969
24,772,717
(3,125,983
9.979,670
11, 143,000
7,913,000
10,659,000
3,570,834
4,6031,661
4,$31,435
-
-
41-9,731
90292,003
81,584,952
82,065,868
(6,054,964) (7,341,579)
- 26,274.205 43,281,289
142,866,218 37,207.661 2,645,014
(41 295,836) (37,207k61) (2,645,014)
40,201 7,421 18,138
101,610,583 26.281,626 43,299,427
$ 95,555,619 $ 18,940,047 S 36,569,518
28.96% 22.37% 26,76%
CITY OF TUSTIN
ASSESSED VALL, !E AND ESTIMATED ACTUAL VALUE
OF TAXABLE PROPERTY
Last Ten Fiscal Years
Notes:
Exemptions are netted directly against individual categories.
In 1978 the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of
I % based upon the assessed value of the property being taxed. Each yean the assessed value of proarty may be increased
p
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.
C;tV
Fiscal Year
Taxable
Ended
Assessed
June 30
Secured
Unsecured
Value
2002
4,360,086
385,783
4,745,869
2003
4,637,831
301,761
4,939,592
2004
4,969,203
314,645
5.283,848
2005
2
5,306,887
308,339
5,615,226
2006
5,753,518
285,670
6,039,188
2007
6,3597.216
301,747
6,698,963
2008
7,109,465
359,631
7,469,096
2009
7,505,735
435,026
7,940,761
2010
7,381,782
3"71,1`22'
7,753,504
2011
7,274,075
371,027
7,645,102
Notes:
Exemptions are netted directly against individual categories.
In 1978 the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of
I % based upon the assessed value of the property being taxed. Each yean the assessed value of proarty may be increased
p
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.
Redevelo anent —encu
Taxable
Assessed
Secured Unsecured Value
S 598,180
621,304
659,266
927,400
1,039,506
1.4965217
2,425,555
1,946, 578
1,667,398
1,696,957
S 99,367
67,143
61,810
68,767
7€,738
84,203
165,392
71,422
80,166
77,235
09
61)7,547
688,447
721,076
996.,167
1,111,244
1,580,420
2,590,947
2,017,800
1,747,564
1,774.11.12
Total
Direct Tax
Rate
0.195%
0,091%
0,190%
0.220°
0.226°
0.261%
0.279%
0.326° �
0308%
0,310%
CITY OF TUSTI
DIRECTAND OVERLAPPING PROPERTY TAX RATES
Last Seven Fiscal Years
(rate Per $100 of taxably value)
Direct bate:
City of ustln
Tustin Unified School District
South Orange County Community College District
County of Orange
Orange County Flood Control District
Orange County Library Dist ict
Orange County Department of Education
Various Special Districts
"Total Direct Rate
Overlapping Rates:
Tustin Unified School District Bonds
Met4ropliton Water district Bonds
Rancho Santiago Connntunity College.. District Bands
Irvine.. Ranch Water District Bonds
Santa Ana Unified School District Bonds
Total Overlapping Rates
"rotas Direct and Overlapping Rates
The City of Tustin has elected to show only seven years of data for this schedule,
Source: f1dl, Coren z& Cone
Fiscal Year
2005
2006
2007
2008
S 0,1272
S 0.1272
S 01277
S 0.1272
0.4397
0.4397
0.4397
04397
0.0886
0,08136
0.0886
0.0886
€}.0617
0.017
0.0617
0.0617
0.0198
0.0198
0.0198
0.0198
0.€1167
0.0167
0,0161,
0.0167
0.0161
0,0161
0.6161
0,0161
0.2302
0.2302
0.2302
0.2302
1.0000
1.0000
1,0000
1.0000
0.0554
0.0311
0.0023
{1.0317
00058
0.0052
0.0}C}47
0M45
0.0273
0.0169
0.0191
0.0237
00001
0.0477
1.7.2138
0.2143
0.0496
0.0435
0.0392
0.0359
01382
01444
0.2791
0.31101
S 1.1382
S 1.1444
S 1.2791
S 1.3101
The City of Tustin has elected to show only seven years of data for this schedule,
Source: f1dl, Coren z& Cone
Fuca( Year
2009 2010 2011
S 0.1272
S 0.1272
S 0.1272
04397
0.4397
0.4397
0,0886
(W886
0,0886
4.0617
0.4617
07.0617
07 0195
0.0198
0.0198
0.4167
03 0167
4.0167
4.4161
0.0161
0.0161
0.2302
4.2302
4.2302
I.0000
I.0€ 00
1.0000
0.0310
0,0380
0.0396
0.0443
0.4443
0.0037
0.0225
01.0274
4.03314
0.2143
0,2242
0.2242
0.4321
0.4739
0.0717
4.3442
0.36;5
0.3946
S 1.3442 S 1.3678 S 1.3906
PRINCIPAL PROPERTYTAX PAYERS
Current Year and Nine Year-, Ago
846.498,102 9M% $ 91
=L99-51 1,41-7 11,21%
The amounts shown above include the Combined Tax Rolls and the SBE Non -Unitary Tax Roll.
Sources: Orange County Assessor's Office
HdL, Coren & Cone
2011
2002
Percent of
Percent of
Total City
Total City
Taxable
Taxable
Taxable
Taxable
Assessed
Assessed
Assessed
Assessed
Taxpayer
Value
Value. (I)
Value
Llalue (2)
Irvine Company LLC
S 215,725.010
129%
268,500,342
5.03%
Vestar Kirrico Tustin I -P
154,066.1340
1.64%
-
0,00%
Avalon it California' Value 1
84,390,000
OM%
-
0.00%
Irvine Apartment Communities LP
83,879,946
0,89%
-
0,00%
Tustin Legacy Community Partners
60,304,007
0.64%
-
0,00%
American Funding US Investments LP
57,006,297
0.61%
-
OM%
Borchard Redhill SKB- Tustin LLC
49,334,093
0,52%
24,097,260
0A5%
PK II Larwin Square SC LP
48,435,507
O.SM
0.00%
Ricoh Development of California Inc
46,703,056
0.50%
0.00%
Costco Wholesale
46.,653,846
O.50%
0,00%
Steelcase Inc
OM%
-10,631,906
132%
Ricoh Electronics Inc
-
()M%
37,874,047
0'", 1%
Sanyo Foods Corporation
-
OM%
40,35 1.683
0,76%
AIMCO Brookside Tustin
-
0,00%
36,270,723
0.68%
Pairgain Technologies Inc
-
OM%
357,017,058
0.67%
Texas Instruments Inc
-
0,00%
30,928,673
0,58%
Catellus Finance
-
0J00%
26,730,107
0.50%
Duragag Company Inc
-
0.00%
27,216,688
Ml%
846.498,102 9M% $ 91
=L99-51 1,41-7 11,21%
The amounts shown above include the Combined Tax Rolls and the SBE Non -Unitary Tax Roll.
Sources: Orange County Assessor's Office
HdL, Coren & Cone
CITY OF TUSTIN
PROPERTY TAX LEVIES AND COLLECTIONS
Last Eight Fiscal Years
Notes:
The amounts presented include City property taxes and Redevelopment Agency tax increment.
This schedule also include amounts collected by the City and Redevelopment Agency that were passed -through
to other agencies.
The City of Tustin has elected to show only eight years of data for this schedule,
Source: County of Orange Auditor Controller's Office
Collected within the
Fiscal
Taxes Levied
Fiscal Year of Lery
Collections in
Total Collections to Date
Year Ended
for the
Percent
Subsequent
Pei -cent
June 30
Fiscal Year
Amount
of Levy
Years
Amount
of Levv
2004
to 11011,332
11,507,1 71
95,80%
27,851
11,535,022
96.03%
2005
19,7,00,674
19,338,392
98,13%
42,299
19,380,691
98,35%
2006
21,602,011
211, 2 421, 7 9 7
98.34%
309,074
21,55L871
99 77%
2007
30,701,393
28.,617,969
9321%
695,793
29,313,762
95,48%
2008
31554.781
31,070,501
9160%
325,973
31,396.474
93.57%
2009
38,515,110
34,022.1959
88,34%
11417,067
35,440,026
9102%
2010
31,739,378
28.347,659
893 1%
917,222
29,264M1
92,20%
2011
30,713,746
29,541,000
96.18%
610,052
30.151,052
98,171%
Notes:
The amounts presented include City property taxes and Redevelopment Agency tax increment.
This schedule also include amounts collected by the City and Redevelopment Agency that were passed -through
to other agencies.
The City of Tustin has elected to show only eight years of data for this schedule,
Source: County of Orange Auditor Controller's Office
CITY OF TUSTIN
RATIOS OF OUTSTANDING DEBT BY TYPE
Last Ten Fiscal Years
Fiscal
Govenii`nenlal Activities
Year
General Tax I,ax `Fax Lease
Total
Ended
Obligation Allocation Allocation Allocation Revenue Notes Nates
Governmental
June 30
Bonds Bonds (1) Bonds (7) Bonds (8) Bonds (2) Payable (3) Payable (4)
Activit€e4
T00217,650f)(1(1
S 1,50{,1}0(1
19, 150,000
2003
16,80),000 1,230,000 -
18,030,otlfl
2004
- 15,910,000 - - 945,0010
16,855,000
2005
- 14,990,0010 645;6010 -
15,635,0(X1
2006
- 14,030,),00 - 330,000
14360,000
2007
13,020,000 - - 25,000100
38,020;000
2008
11,97500 2S,00000
36,975,000
2009
- 10,870,0011 _ _ 14,962,000 19184,17()
45,116,170
2010
9,720,0000 26,170„000 - 8,199,000 20,112,456
64,201,456
2011
8,515,000 24,915,000 44,170,0010 - - 20,976,317
48,576,317
Notes:
Details regarding the City's outstanding debt can be found In the notes to the financial statements,
Per Capita Personal Income is not available for the City of Tustin alone so the Percentage of Personal Per Capita
Income has been left ofTthis schedule.
(1)
On July 1, 1998 the City= issued 520.8 million (,flax allocation Refunding Bonds to retire Series 1487 Refunding
Bonds.
(2)
In June. of 1996 the Citv issued S2.7 million of Lease Revenue. Bonds as a member of the Countywide Joint
Powers Authority. The final maturity was August, 2006.
(? }
In April of 2007 tate Tustin Redevelopment Agency executed a note payable in the antoinit of S25 million to
acquire property to carry out the program objectives of the Agency.
(4)
In December of 2008 the City executed a note payable to the Tustin Redevelopment Agency in the amount of
818,881,750 to increase its deposit of probable compensation fvr court order lending liti;ation. I`hc balance
also includes accrued interest in the amount of 51,162,188.
(5)
in September of 2003 the City issued S14.355 million of Refunding Water Revenue Bonds to detc ase the
outstanding Certificates of Participation and the Orange County Water District Notes,
161
In 1998 the City execrated a nate payable in the aiuount of $6.8 million with the Grange County Water District.
(7)
In March 2010 the € ustin Redevelopment Agency issued $26,170,000 `Fax Allocation Housing, Bonds, genes 2010
to refinance low and moderate income housing activities throughout the; geographic tioundaries in the City.
- 127-
Business-t�qpe Activities
Water
W er
,at
Certificates
'Total
Total
Debt
Revenue
Revenue
of
Notes
Business -type
Primary
per
Bonds (5)
Bonds (9)
Participation
Pavable (6)
Activities
Ciovelmnlent
Capita
S 9,600,(.X)f) S
5,248,472
13,848,472
S 32.998,472
S 477
8,100,0()0
4,632,456
12,732,456
30,762,456
445
7,575,000
3,991,272
11 ,566,272
28,421,272
408
1-1,668,367
-
-
-
13,668,367
29,303,367
417
13,461,607
-
13,461 ,607
27,821,607
393
13,331,607
-
13,331,607
51,351,607
716
13,080,000
-
13,090,000
50,055,000
690
12,560,000
-
12,560,000
57.676J70
782
11,875,000
-
11,875,000
76,076,456
1,018
11,165,000
20,760,000
31,925,000
130501.317
1,722
- 127-
CITY OF TLISTI '
RATIO OF GENERAL BONDED DEBT OUTSTANDING
Last'ren Fiscal Year
General bonded debt is debt payable with governmental fund resources and general obligation bonds recorded in
enterprise funds. The City currently does not have general bonded debt in either fund.
- Assessed value has beer, used because the actual value of taxable property is not readily available in the State
of California,
Outstandina General Bonded Debt
Fiscal Year
General Tax
Percent of
Ended
Obligation Allocation
Assessed
Per
.lune 30
Bonds Bonds
Total
Value *
C2 tta
2002
$ $ 17,650,000
S 17,650,000
0.32%
255
2003
- 16,800,000
16,800,000
0.30%
243
2004
15,910,000
15,910,000 10,000
0.26%
228
2005
- 14,990,000
14,990.000
0,23%
213
2006
- 14,030,000
14,030,000
0.20%
198
2007
- 13t02O,OOO
13,020,000
0.16%
181
2008
_ 11,975,000
11,75,0>00
C}.12°l
165
2009
- 10,870,000 €1,000
10,8 70,000
0.111%
147
2010
- 35,890,000
35,890,000
0.38%
480
2011
4 77,6013,000
77,600,000
OM%
1,024
General bonded debt is debt payable with governmental fund resources and general obligation bonds recorded in
enterprise funds. The City currently does not have general bonded debt in either fund.
- Assessed value has beer, used because the actual value of taxable property is not readily available in the State
of California,
xmvmnm��
OVERLAPPING DEBT SCHEDULE
,June 30, 2011
2010-11 Assessed Valuation
S 9.419,294,337
Redevelopinent incremental Valuation
(2,137240,963)
Arliusted Assessed Value
S 7,282.053374
City's
Share of
Total Debt
(1)
Debt at
OVERLAPPING TAX AND ASSESSMENT DEBT:
6,30/11
% Applicable
030/11
7t-I.P.Twu Water District
S 227,670,000
0.408%
S 928,894
Rancho Santiago Community College District
309,908,025
():016
49,585
IiN,ine Unified School District Community Facilities District No. 86-11
89,440,000
0,251
221,984
Tustin Unified School District School Facilities Improvement District No. 2002-1
60,148,766
40 899
24,600,244
Tustin Unified School District School Facilities Improvement District No, 2008-1
50,000.000
40.47]
20,235,500
Tustin Unified School District Community Facilities District No. 88-1
52325,000
100
51,325.000
Tustin Unified School District Community Facilities District No. 06-1
13,560.000
100
13,560,000
City of Tustin Community Facilities Districts
79.0851000
100
79,085,000
City offustin 1915 Act Bonds
32j61,000
too
32,161.000
Irvine Ranch Water District Improvement Districts
348,132,340
0,543-5().558
101,942,939
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT
325,110,146
DIRECT AND OVERLAPPING GENERAL FUND DEBT:
Orange County General Fund Obligations
S 316,898,000
1,949%
6,176342
Orange County Pension Obligations
54,682,497
1.949
1,065,762
Orange County Board of Education Certificates of Participation
19,000,000
1.949
370310
Municipal Witter District of Orange County Water Facilities Corporation
14,120,000
2.302
325,042
South Orange County Community College District Certificates of Participation
1737-55,000
4.532
787,435
Orange Unified School District Certificates of Participation
49,350,000
0,033
16,286
Orange Unified School District Benefit Obligations
91,365,000
0,033
30.1150
Tustin Unified School District Certificates of Participation
5,005,000
42.299
2,117.065
Ciq- of Tustin
20,976,317
100
20,976,317
Irvine Ranch Water District Certificates of Participation
81 A00.000
7,378
6c005,692
Orange County Fire Authority
0
-
TOTAL GROSS DIRECT AND OVERLAPPING GENERAL FUND DEBT:
337,870,401
Less: MWDOC Water Facilities Corporation (100% self supporting)
(325,042)
TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND DEBT:
545359
GROSS COMBINED TOTAL DEBT (2) S 362,980,547
NET COMBINED TOTAL DEBT S 362,655.505
(I I Percentage of overlapping agency's assessed valuation located within boundaries of the City,
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and
non -bonded capital lease obligations.
Ratios to 201 0- 11 Assessed Valuations:
Total Overlapping Tax and Assessment Debt 4.460%
Ratio-sjo Adjusted Assessed Valuations:
Combined Direct Debt 0.2"%
Gross Combined Total Debt 4.980%
Net Combined Total Debt 4,980%
Source: Califromia Municipal Stitstics, Inc.
Assessed valuation
Conversion percentage
Adjusted assessed valuation
Debt limit percentage
Debt limit
Total net debt applicable to limitation
Legal debt margin
Total debt applicable to the limit
as a percentage of debt limit
CITY OF TI STIN
LEGAL DEBTMARGIN INFORMATION
Last Ten Fiscal Fears
2002
200-1
2004
2005
4,74 ,869,£}£)t)
9; 4,939,592.000-
5,283,848,000
$ 5,61'5,220,000
25%
25%
25%
25%
1,186,467,250
1,234,898,000
1,320,962,000
1,403,806,500
15%
15%
15%
15%
177,970,088
185,234,700
198,144,300
210,570,975
1";7.970} 088 $ 185,234,700 198,1 .300 210,570,975
0.0% (W% 0.0% 0.0%
The Government Code of the State of California provides for a legal debt limit of 15% of gross assessed
However, this provision was enacted when assessed valuation was based upon 25% of market value,
Effective with the 1€181-82 fiscal year, each parcel is now assessed at 100% of market value (as ofthe
most recent change in ownership for that parcel). The computations shown above reflect a conversion
of assessed valuation data for each fiscal year that was in effect at the time that the legal debt margin
was enacted by the; State of California for local governments located within the state.
Sources: County Tax Assessor's Office
City Finance Department
131
Fiscal areal"
2006
2007
2008
2009
2010
2011
6,039,188,000
S 6.698,963,000
$ 7,469,096,000
7,940,761,000
S 7,753,504,000
$ 7,645,102,000
25%
25°0
25%
25/0
25%
25%
1,509,797,000
1,614,740,750
1,867,274,000
1,985,190,250
1,938,376.000
1,911,275.500
1 5i
I,%
15%
1.JL /f
#.sq,"
i
i5`f+$
226,469,550
251,211,113
280,091,100
297,778,538
290356,400
286,691.325
226,469,550
$ 251,211,113
$ 280,091,100
297,778,538
$ 290,756,400
286.691,325
0.0%
0.bifli'ei
0,0%
0.0%
0�0%
0,0%
131
CITY OFTUSTIN
PLEDGED -REVENUE COVERAGE
Last Ten Fiscal Years
Fiscal Year
Less
Net
Refundin- Water Revenue Bonds
Ended
Water
Operating
Available
Debt Service -
June 30
Revenue
Revenue
7"c"t
--Ld�vera e°
2002
9,789,933
$6.208,470
$ 3,581,463
$ 50000
459,950
3,73
2003
8,718,072
6,019,880
2,698,192
525.000
421,200
2,85
2004
9,189,579
6,032,117
3.157,462
400,000
311,002
4.44
2005
8,905,221
7,297.101
1,608, 120
230,000
583,920
1,98
2006
9,348,715
7,417,023
1,931,692
130,000
575,410
2.74
2007
10.1844,515
9,986.251
858,264
180,00()
570,470
1.14
2008
11,240,7152
10,053,706
1,187,046
335,000
503,450
1.32
2009
11,5 1 O,315
10,573,932
936,383
520,000
550,385
0.87
2010
11829,902
9,928,608
21,901.294
685,000
530,105
2,39
20111
12,422,746
10,566,435
1,1856,311
710,000
502,705
1,53
Notes:
Details regarding the City's outstanding debt can be found in the notes to the basic financial statement";.
Operating expenses do not include interest or depreciation expenses.
Water revenues in 2010 include proceeds frona an advance from the City's general fund,
- 132-
Tax Allocation Bonds
Tax
Debt Service
AllocationPrinci
aon�� i ®�
Interest
CO
2,359,830
$ 825,000 S
833,537
1.42
2,295,614
850,000
800,450
1.39
2,362,640
890,000
765,205
1.43
2,401,247
920,000
727,640
1.46
2,952,481
960,000
687,680
1.79
3,956,7.34
1,0001000
642,040
2.41
3,381,188
11055,000
594,358
2.05
4,460,947
1,105,000
547,365
2.70
3,831,975
1,150,000
497.180
2.33
17,928,849
2,460.1 00
2,204,419
3.84
CITY OFTUSTIN
DEMOGRAPHIC AND ECO'NOMIC STATISTICS
Last Ten Calendar Years
Source: Hdl, Coren & Cone, LLC
Personal
Per Capita
County of Orange
0
Calendar
City of Tustin
Income
Personal
Unemployment
Year
�Jation
(In Thousands)
income
Rate
2002
68,366
1,738,009
$ 25,422
190%
2003
69,126
1,764,929
25,532
4.90%
2004
69,753
1,832, 204
26,267
4.70%
2005
70,291
1,951946
27°798
4.20%
2006
70,524
2,064,542
229,274
3,70%6
2007
71,383
2,246,281
31,468
3.30%
2008
71,931
2,368,395
32,926
3,80%
2009
73,670
2,450,480
33,263
5.20%
2010
74,736
2,407,036
32,207
8.90%
2011
'75,733
2,363,057
31,186
9,40%
Source: Hdl, Coren & Cone, LLC
PRINCIPAL EMPLOYERS
Curren', Year and Nine Years Ago
Sources: US Census Butcau
www.InfoUSA.com
Tustin Chamber of Commerce
-135-
2011
2002
Percent of
Percent of
Number of
Total
Number of
Total
Employer
Employees
L, -n
Lloyrn,nt
Lj2!oy.es
_LEL!arnent
Young's Market Co LLC
2,100
5,42%
Lamppost Pizya Corp
1,400
3.61%
Ricoh Electronics Inc
1,384
3.57%
1,038
2.75%
Toshiba America Medical Systs
900
232%
300
0.80%
Rockwell Collins Inc
600
1.;5"
costec,
450
1.16%
Cherokee International Inc
350
0.90%
300
0.80%
City Of Tustin
300
0.77"16
275
0,73%
Raj Manufacturing Inc
260
0,67%
Cash Plus Inc
250
0,64%
Kleen Impressions
250
0,0400
Ricoh Business Solutions
250
0.64%
Southern California PiPchrle
235
0.61%
Home Depot
203
0.52%
Health South Tustin Rehab Hosp
200
0t5200
Logornark Inc
200
0.52%
Red Robin Gourmet Burgers
200
0.52%
Srnc Corp Of America
200
O52%
Straub Distributing Co
200
0.52%
Tustin'royout
200
0.52%
Steelcase Inc
1,100
2,92%
Silicon Systems. Inc
400
1.06%
MAI Systems Corporation
363
O 96%
MacPherson Enterprises
360
0,95%
Dynachern Electronic Materials
350
0,93%
L. H. Research
300
0.80%
Tustin Hospital
240
0.64%
Elite Security Services
200
0.53%
Eldorado Bank
200
0.53%
Fireunan's Fund Insurance
190
0,50%
KTBN Channel 40 Trinity Broadcasting
179
04700
Safeguard Business Systems
175
0.47%
Sources: US Census Butcau
www.InfoUSA.com
Tustin Chamber of Commerce
-135-
CITY OF TUSTTN
FULL-TIME CITY EMPLOYEES
BY FUNCTION
Last Ten Fiscal Years
The City contracts with the OC Fire authority for fire services.
Source: City of Tustin Finance Department
Fiscal Year
Function
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
General G€?vemment
32
32
32
31
3l
31
31
27
27
25
Community Development
24
21
21
22
24
28
29
28
24
17
Public Works
48
47
47
48
48
50
51
50
53
52
Police
139
141
141
141
141
145
I44
147
147
140
Parks and Recreation
16
20
20
18
17
17
15
16
15
14
Redevelopment agency
3
5
5
2
3
5
5
6
6
6
Water
21
22
22
22
22
20
20
23
22
23
Total
283
288
288
284
286
296
295
297
294
277
The City contracts with the OC Fire authority for fire services.
Source: City of Tustin Finance Department
CITY OF TUSTIN
CAPrrAl- ASSET STATISTICS
BY FUNCTION
Last Ten Fiscal Years
(1) The City contracts with the OC Fire Authority for fire services, and they have full use of City owned stations.
Source: City of Tustin Finance Department
- 137 -
Fiscal Year
Function
2002
2003
1-004
2005
2006
2007
2008
2009
2010
2011
Public Safety
Police Stations
Fire, Stations (1)
2
2
2
2
2
2
2
2
2
Public Works
Street f1miles,
j
i0l'8
l0i.8
110L8
101,8
10L8
101.8
106.3
1272
117
-2
127.2
Street Lights
2,955
2,855
2,855
2.855
2,855
2.855
3,285
3,544
3,544
3.544
Traffic Signals
97
97
()7
97
97
()7
113
113
116
117
Storm Drain (miles)
23.7
23.7
223.7
23.7
23.7
`23.7
49,1
49.2
49.2
49,2
Street Trees
16,559
16.689
16,667
16,744
16,638
16.638
15,821
15.853
15,853
15,837
Parks and Recreation
Parks
12
12
12
12
12
11
12
12
13
13
Parks (acres)
SL5
81.5
81,5
81.5
81.5
81.5
81.5
81,5
98.5
98.5
Community Center's
I
I
I
I
I
I
I
I
I
I
Senior Centers
I
I
I
I
I
I
I
I
I
Water
Metered Sen, 'ces
13,500
13.500
13.500
13,500
13,900
14,080
14.117
14,118
14,118
14,139
Average daily consumption
11500
12,500
12,500
12,500
12,514
17,205
14,970
14.460
14,460
12,899
Reservoirs
6
6
6
6
6
6
6
6
6
6
Wells
12
12
12
12
12
12
12
13
13
13
Water Main (miles)
173
173
173
173
173
173
173
173
173
173
Fire Hydrants
2,200
1200
2,200
2,200
2,200
2,200
2,200
2,201
2.201
2,201
(1) The City contracts with the OC Fire Authority for fire services, and they have full use of City owned stations.
Source: City of Tustin Finance Department
- 137 -
WATER CONSUMPTION BY CUSTOMER TYPE
Last Nine Fiscal Years
$ 3,993,055 S 4,440,506 S 4,524,895 S 5,036,629
Measured in hundred cubic feet,
The City of Tustin has elected to show only nine years of data for this schedule.
Source: City of Tustin Finance Department
Fiscal Year
Tvl,X of Custorner
2003
2004
2005
2006
Residential
S 2,259,295
$ 2,522,125 S
2.539,105
2,847,140
Apartment!'Multiple Units
958,049
1,042,914
1,101,639
1,218,770
Commercial
270,860
288,347
285,628
331,990
Fire Services
557
598
1,100
306
Irrigation
118,393
129,127
132,442
137,651
Government
133,120
180,387
170,830
179,426
Restaurants
48,046
59,591
61,706
71,356
Hospitals
15,756
18,333
13,732
14,690
Non -Profit
33,287
35,386
37,906
43,427
Industrial
64,6715
57,214
60,262
77,425
HoteliMotels
10,705
9,806
8,502
10,878
All Others
80,312
96,678
112,043
103,570
$ 3,993,055 S 4,440,506 S 4,524,895 S 5,036,629
Measured in hundred cubic feet,
The City of Tustin has elected to show only nine years of data for this schedule.
Source: City of Tustin Finance Department
2007
2008
2009
2010
2011
3,319,069
$ 3,202,982
3,012,575
S 2,749-415
S 2,592,741
1,312,731
1,264,584
1,226,181
1,142,749
1-133,899
360,170
326,987
305,601
287,951
296,001
11,45-31
478
184
217
275
1-11,200
174,858
171,382
145,287
134,408
265,158
260,688
264,425
238,914
212,561
6-7,378
61-029
54,916
-52,761
�873
48.
14,243
14,376
11,222
9,636
11,587
48320
48,922
45,387
43,985
41,291
71,065
69,920
67,985
56,360
51,760
13,367
12,803
12,890
13,562
8,332
100.604
115,246
105,221
1,781
176,248
5,754,758
$ 5,552,873
$ 5,277,969
S 4,912,618
S- 4JO7,976
CITY OF "1"USTIN
WATER RATES
Last Teta Fiscal Years
'dotes:
HCF == Hundred Cubic Feet (I HCF = 748 gallons)
A seen (7) tiered rate structure was implement on July 1, 2010. Additionally, a new fixed charge (Capital Fee)
was implemented with the new rate structure, which has been included in tate Bi -Monthly Fixed Charge. The
rate shown is for a standard residential customer.
The hi -monthly fixed rate shown is based on the standard residential customer meter (518"), The City uses the
American Water Works Association equivalent meter capacity ratios from the AWWA Manual M6 to calculate
fixed charges for meters ranging from I to 6 inches.
Source: City of Tustin Finance Department
Consurn )tion Charges
Bi -Monthly
L'p to
Froin
From
All
Fiscal
Fixed
12
13 to 40
41 to 60
Over 60
Year
Charge
HCF
F€CF
HCF
HCF
2062
16.00
0.35
1.12
1.20
1.32
2003
16,00
0,35
1.12
1.20
1.32
2004
16.00
035
1.12
1,20
1.32
2005
16.00
0.35
1.12
1,20
1.32
2006
18.16
0.40
1.27
1.36
3.50
2007
20.24
0,44
1.42
1-52
1.67
2008
22.26
0,49
1.56
1.67
1.54
2009
22.26
0.49
1.56
1.67
1,54
201€;
22.26
0.49
1.56
1.67
1.84
Consumption
Char{ e:
Bi -Monthly
Cap to
From
From
From From
From
All
Fiscal
Fixed
10
11 to 20
21 to 30
31 to 40 41 to 50
51 to 60
Over 60
Year
Chargc
HCF
HCF
HCF
IICF HCF
HCF
HCF
2011
S 34.49
$ 0.58
$ 1,02
S 1.33
$ 1.65 $ 1.97
2.29
S 2.62
'dotes:
HCF == Hundred Cubic Feet (I HCF = 748 gallons)
A seen (7) tiered rate structure was implement on July 1, 2010. Additionally, a new fixed charge (Capital Fee)
was implemented with the new rate structure, which has been included in tate Bi -Monthly Fixed Charge. The
rate shown is for a standard residential customer.
The hi -monthly fixed rate shown is based on the standard residential customer meter (518"), The City uses the
American Water Works Association equivalent meter capacity ratios from the AWWA Manual M6 to calculate
fixed charges for meters ranging from I to 6 inches.
Source: City of Tustin Finance Department
'A`I'Eia CUSTOMERS
Current Year and Nine Years A o
21011
Percent of
Nater Total Nater
Nater Customer Charges Revenues
TUSTIN CiNIFIED SCHOOL DIST
CITY OF TUSTIN
AVA1.C3N 2 CALIF I LP
AT&T SERVICES, INC.
RICO ELEC'TRONIC'S INC
CALTRA±vS - DISTRICT 12
SCHROEDER PROP MGMT
TUSTIN ACRES COMM ASSOC
V KAY - NNC VALENCIA GARDENS A
CARMEL PARTNERS MS43
C,.ADIGAN COMMUNITIES MONTEREY PINE`
WESTCHESTER PARC L.P
BRIAR`S OOD INVESTMENT CO LT
SIERRA CORP MGT
157031 TV WAY PARTNERSHIP
CMC ASSOCIATION MGMT
SKB-TUSTIN LLC
VILLA VALENCIA MHP
SADDLEBACK MOBILODGE
ARCHSTONE COMMUNITIES
TUSTIN PLAZA CENTER, LP
REGENCY WEST
WATERSTONE GARDENS INVESTMENTS LP
ALDERS APARTMENT COMPANY
GREAT WEST AMERICAN
STEELCASE
HSA LP
SYCAMORE GARDENS ASSOC"
PACIFIC BELL
GREENWOOD AND MC KENZIE
Ai2NEL MANAGEMENT
TUSTIN VILLAGE COMMUNITY ASSOC
PACIFIC POINT APTS
Source: City of Tustin Finance Department
`002
Percent of
Water 'Total Water
Charas,eRevenues
466,467
3.75% $
214,528
3.52°
148,837
1.20%
51.706
0.85%
126,158
1,02%
76.797
[
59,51-5
(0.682%
OA 8%
59,225
0,48%
58.441
0.47%
32,948
OI 54%
54,514
11.44%
30,846
0,51%
52x204'
11.42%
32,238
€ ,53%
52,142
0.42%
51,282
0AI%
49,524
0.40%
22.864
0,38`''
49,336
(t,40%
21,578
0,35%
47,:67
0,38%
42,6036
034%
42.345
13.340 �
26,974
0.44%
39,779
0,32%
39;776
032%
39.391
0,32%
18,900
0,31%
37,021
€,30%
36,341
0.29%
17,562
0.29%
35,454
O) 29%
34.499
0,28°"o
17,091
11.28%
3M21
027%
85,132
1,40%
51,655
0.85%
46,640
0.72%
377,580
0.62%
27,811
OA6`? �
21184
036%
19.834
07 3300
14.752
0,24%
$ 1.771,800
14.26% $
773,923
12.67%
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