HomeMy WebLinkAbout05 FISCAL YEAR 2021-2022 AUDIT REPORTSAGENDA REPORT
Agenda Item
Reviewed:
City Manager
Finance Director -®-
MEETING DATE: FEBRUARY 21, 2023
TO: MATTHEW S. WEST, CITY MANAGER
FROM:
SUBJECT:
JENNIFER KING, FINANCE DIRECTOR/CITY TREASURER
FISCAL YEAR 2021-2022 AUDIT REPORTS
SUMMARY:
The financial statement audit for the 2021-2022 fiscal year has been completed by Davis Farr
LLP, which reflects an "unmodified", or clean opinion that the City's financial statements for the
fiscal year are presented fairly. Jennifer Farr, the audit partner from Davis Farr LLP discussed
the results of the audit with the Audit Commission on January 26, 2023.
RECOMMENDATION:
It is recommended that the City Council receive and file the fiscal year 2021-2022 audit reports.
FISCAL IMPACT:
The total contractual cost of the annual audit with Davis Farr LLP is $48,000. Of this amount, $9,600
is charged to the Water Enterprise Fund, and $38,400 is charged to the General Fund. In addition, $3,300 was paid to CalPERS and charged to the General Fund for required GASB 68 information
related to pension liabilities and expenses.
CORRELATION TO THE STRATEGIC PLAN:
The recommendation correlates to the strategic plan by implementing Goal C, sustain long-term
financial strength with adequate reserves and enhanced capacity to provide a sustainable level of
City services.
DISCUSSION:
The City's financial statements reflect the results of the budgetary process and strategic decisions
made and implemented during the fiscal year. It is important to note that certain funds are
consolidated in the Annual Comprehensive Financial Report (ACFR). For example, the General
Fund includes amounts associated with the Land Proceeds Fund, Backbone Fee Fund, and other
funds that are not permitted to be reported as separate funds for financial statement reporting
purposes.
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CITY OF TUSTIN, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FISCAL YEAR ENDED JUNE 30, 2022
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CITY OF TUSTIN, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2022
Prepared By: Finance Department
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CITY OF TUSTIN
Annual Comprehensive Financial Report
For the Year Ended June 30, 2022
Table of Contents
Page
Number
INTRODUCTORY SECTION:
Elected and Administrative Officials i
Letter of Transmittal iii
Organization Chart xiii
GFOA Certificate of Achievement for Excellence in Financial Reporting xiv
FINANCIAL SECTION:
Independent Auditors’ Report 1
Management’s Discussion and Analysis
(Required Supplementary Information - Unaudited) 4
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position 19
Statement of Activities 20
Fund Financial Statements:
Governmental Funds:
Balance Sheet 22
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position 23
Statement of Revenues, Expenditures and Changes in Fund Balances 24
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities 25
Proprietary Fund:
Statement of Net Position 26
Statement of Revenues, Expenses and Changes in Net Position 27
Statement of Cash Flows 28
Fiduciary Funds:
Statement of Fiduciary Net Position 30
Statement of Changes in Fiduciary Net Position 31
Notes to Basic Financial Statements 32
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CITY OF TUSTIN
Annual Comprehensive Financial Report
For the Year Ended June 30, 2022
Table of Contents
Page
Number
REQUIRED SUPPLEMENTARY INFORMATION: 90
Safety Plan:
Schedule of Proportionate Share of the Net Pension Liability 91
Schedule of Contributions 93
Miscellaneous Plan:
Schedule of Changes in the Net Pension Liability and Related Ratios 95
Schedule of Contributions 97
Other Post-Employment Benefit Plan (OPEB):
Schedule of Changes in the Net OPEB Liability and Related Ratios 99
Schedule of Contributions - OPEB 100
Annual Money-Weighted Rate of Return on Investments 101
Budgetary Comparison Schedules:
General Fund 102
Housing Authority Special Revenue Fund 103
American Rescue Plan Act (ARPA) Special Revenue Fund 104
Park Acquisition and Development Special Revenue Fund 105
Note to Required Supplementary Information 106
SUPPLEMENTARY INFORMATION: 107
Other Governmental Funds: 108
Combining Balance Sheet 11 0
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances 11 2
Schedules of Revenues, Expenditures and Changes in Fund
Balance - Budget and Actual:
Gas Tax Special Revenue Fund 11 4
Air Quality Special Revenue Fund 11 5
Supplemental Law Enforcement Special Revenue Fund 116
Special Tax B Special Revenue Fund 117
Road Maintenance and Rehabilitation Fund 118
Solid Waste Special Revenue Fund 119
Measure M Special Revenue Fund 120
Custodial Funds:
Combining Statement of Fiduciary Net Position – Custodial Funds 121
Combining Statement of Changes in Fiduciary Net Position – Custodial Funds 122
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CITY OF TUSTIN
Annual Comprehensive Financial Report
For the Year Ended June 30, 2022
Table of Contents
Page
Number
STATISTICAL SECTION (UNAUDITED): 123
Description of Statistical Section Contents 124
Financial Trends:
Net Position by Component - Last Ten Fiscal Years 125
Changes in Net Position - Expenses and Program Revenues - Last Ten Fiscal Years 127
Changes in Net Position - General Revenues - Last Ten Fiscal Years 129
Fund Balances of Governmental Funds - Last Ten Fiscal Years 131
Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years 133
Revenue Capacity:
Assessed Value and Estimated Actual Values of Taxable Property - Last Ten Fiscal Years 135
Direct and Overlapping Property Tax Rates - Last Ten Fiscal Years 137
Principal Property Taxpayers - Current Year and Nine Years Ago 139
Property Tax Levies and Collections - Last Ten Fiscal Years 140
Debt Capacity:
Ratios of Outstanding Debt by Type - Last Ten Fiscal Years 141
Overlapping Debt Schedule 143
Legal Debt Margin Information - Last Ten Fiscal Years 144
Pledged-Revenue Coverage - Last Ten Fiscal Years 146
Demographic and Economic Information:
Demographic and Economic Statistics - Last Ten Calendar Years 147
Principal Employers - Current Year and Nine Years Ago 148
Operating Information:
Full-Time City Employees by Function - Last Ten Fiscal Years 149
Capital Asset Statistics by Function - Last Ten Fiscal Years 150
Water District Schedules for Revenue Capacity:
Water Consumption by Customer Type - Last Ten Fiscal Years 151
Water Rates - Last Ten Fiscal Years 153
Water Customers - Current Year and Nine Years Ago 154
Operating Indicators by Function – last Ten Fiscal Years 155
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Introductory
Section
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CITY OF TUSTIN
Elected and Administrative Officials
As of June 30, 2022
AUSTIN LUMBARD
Mayor
BARRY W. COOPER
Mayor Pro Tem
LETITIA CLARK
Councilmember
RYAN GALLAGHER
Councilmember
REBECCA “BECKIE”
GOMEZ
Councilmember
AUDIT COMMISSION
John Wende, Chair
Jered Elmore, Chair Pro Tem
Craig Shimomura
Robert Ammann
Daniel Erickson
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CITY MANAGER
Matthew S. West
ASSISTANT CITY MANAGER
Nicole Bernard
David E. Kendig
City Attorney
Justina Willkom Director, Community Development
Jason Al-Imam Finance Director / City Treasurer
Erica N. Yasuda City Clerk
Stu Greenberg
Christopher Koster
Chief of Police
Director, Economic Development
Derick Yasuda
Director, Human Resources
Chad Clanton Director, Parks & Recreation Services
Douglas S. Stack Director, Public Works / City Engineer
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FINANCE DEPARTMENT
December 09, 2022
To the Honorable Mayor, Members of the City Council
and Citizens of the City of Tustin:
It is our pleasure to submit the Annual Comprehensive Financial Report (ACFR) of the
City of Tustin for the fiscal year ended June 30, 2022.
These statements have been prepared in conformity with generally accepted accounting
principles (GAAP) as promulgated by the Government Accounting Standards Board
(GASB). This report consists of management’s representations concerning the finances
of the City of Tustin. Responsibility for the accuracy and completeness of the data
presented, including all disclosures, rests with management. To provide a reasonable
basis for making these representations and assurance that the financial statements will
be free from material misstatements, management has established a comprehensive
internal control framework that is designed both to protect the government’s assets
from loss, theft, or misuse, and to compile sufficient reliable information for the
preparation of the financial statements in conformity with GAAP. As the cost of internal
control should not outweigh their benefits, the City’s comprehensive framework of
internal controls has been designed to provide reasonable, rather than an absolute
assurance that the financial statements will be free from material misstatements.
The City of Tustin’s financial statements for the year ended June 30, 2022, have been
audited by Davis Farr LLP, an independent public accounting firm of licensed certified
public accountants. The goal of the audit was to provide reasonable assurance that the
financial statements of the City of Tustin for the fiscal year ended June 30, 2022, were
free of material misstatements. The independent audit involved 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; and evaluating the overall financial statement presentation. The
independent auditor concluded, based upon the audit, that there was a reasonable basis
for rendering an unmodified opinion that the City of Tustin’s financial statements for the
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fiscal year ended June 30, 2022, are fairly presented in conformity with GAAP. The
independent auditor’s report is presented as the first component of the financial section
of this report.
GAAP requires that management provide a narrative introduction, overview, and
analysis to accompany the basic financial statements in the form of Management’s
Discussion and Analysis (MD&A). This letter of transmittal 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 in the financial
section of the ACFR.
PROFILE OF THE CITY OF TUSTIN
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 adjacent to the cities of
Orange, Santa Ana, and Irvine. The State of California Department of Finance has
estimated the City’s January 1, 2022 population at 79,535, a decrease of about 0.8%
from 2021. Most cities in Orange County showed minor decreases in population, with
the County of Orange’s total population decreased by 0.2%. The California statewide
population also decreased by 0.3% as the state continues to experience declining birth
rates among younger cohorts and the aging baby boomer generation. Also contributing
to the decline in population is the fact that affordable housing remains challenging for
many Californians.
The City was incorporated under the General Laws of the State of California in 1927 and
is governed by a five-member elected City Council. The Council/Administrator form of
city government was adopted in 1965 and modified to the Council/City Manager form in
1981. Council members serve staggered, four-year terms, with a two-consecutive-term
limit. The Mayor was selected by the City Council from among its members and serves
a one-year term. The City Manager is appointed by the City Council to carry out the
policies and direction of the City Council, oversee the day-to-day operations of the City,
and appoint department directors. In 2021, the City code was amended to implement
by-district elections for four council members and established the Office of the Mayor to
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be elected at-large. Beginning in November 2022, a Council member for Council District
3 and Mayor are elected in the general municipal election. Council Members for Council
Districts 1, 2, and 4 will be elected in the general municipal election in November 2024.
Tustin is a full-service City. The services provided by the City include police, street and
park maintenance, water, recreation, traffic/transportation, public improvements,
economic development, planning, zoning, and general administrative services. The City
contracts with the Orange County Fire Authority for fire suppression and emergency
medical services. Also included in the City's overall operations are the Tustin Public
Financing Authority and the City of Tustin Housing Authority (Housing Authority). The
activities of both entities are included in these financial statements. Additional
information for the Tustin Public Financing Authority and the Tustin Housing Authority
is available in Note 1 of the Notes to Basic Financial Statements.
BUDGET DEVELOPMENT AND MONITORING
The key element of the City's financial management process is the development and
approval of the biennial budget. The two-year budget serves as the foundation for the
City’s financial planning and control, which allows the Council to prioritize expenditures
and focus on programs essential to our community. Additionally, the Council adopts a
second-year update to the biennial budget. As part of the budget development, the City
Council conducts various public workshops on the proposed budget and adopts the
budget at a public meeting. Budget documents are available on the City website at
www.tustinca.org.
Budgetary control is at the fund level. The City Manager is authorized to transfer
appropriations within the fund between various programs and/or departments as long
as the transfers do not result in an increase to the fund’s approved appropriations.
ECONOMIC OUTLOOK
As we enter into year three of the COVID pandemic, continued progress on vaccinations
has enabled the general population to gradually resume most pre-pandemic activities.
Many COVID-mandated restrictions were removed. During the first six months of Fiscal
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Year 2021-2022, the national and local economies continued to grow at an above-trend
pace, fueled by an increase in labor market participation and consumer spending.
However, geopolitical risks, persistent supply chain bottlenecks, and a strong job market
have all contributed to a heightened risk of inflation and potential economic slowdown.
The Federal Open Market Committee (FOMC) has increased the federal funds rate six
times since March 2022 in order to counter the highest inflation rate in 40 years.
The City’s second-year update of the biennial 2021-2023 budget reflects a slight
decrease of $1 million in General Fund revenues in Fiscal Year 2022-2023. Consumers’
pent-up demands had pushed some major revenues to levels never seen before in
Tustin. The slight reduction in Fiscal Year 2022-2023 General Fund revenues still
reflects a significant increase in revenues over the pre-pandemic periods. Activities for
the City’s top three revenue sources are briefly described below:
•Sales tax revenue is the General Fund’s largest revenue source. As consumer
demand remains strong, sales tax revenue is projected to increase by one to three
percent each year.
•Property tax revenue is the General Fund’s second largest revenue source. This
revenue is estimated to increase by three to four percent per year due to projected
increases in assessed property valuations and on-going development.
•Departmental revenues primarily consist of revenues generated by the Parks and
Recreation and Community Development Departments. Building and permit fees
are projected to increase based on anticipated development activity.
The General Fund expenditures are projected to increase by $5.6 million over the Fiscal
Year 2021-2022 amended budget. Major factors contributing to this increase are
contractually obligated salary increases; a $1.1 million contribution to the Liability Fund;
higher annual required contributions toward the City’s pension obligations; an increase
in the City’s annual contract with the Orange County Fire Authority; and an increase in
the Police Department’s overtime budget.
The City of Tustin first developed a “Tustin CARES” program in 2020 in response to the
pandemic. The City initially allocated over $3 million of federal funds to provide aid and
reinvestment into the Tustin community in the form of grants to small businesses and
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non-profits, meal gap assistance for seniors and families in need, and to provide
emergency rent and utility assistance. The Tustin CARES program continued in Fiscal
Year 2021-2022, utilizing $6.4 million from the American Rescue Plan Act of 2021
(ARPA) to provide additional rounds of aid and reinvestment into the local community
and for provisions of governmental services. An additional $7.8 million ARPA funds are
planned for similar purposes in Fiscal Year 2022-2023. This financial assistance
extended to Tustin residents, non-profits, and businesses help them recover from the
devastating impacts of COVID-related restrictions.
MAJOR ECONOMIC DEVELOPMENTS
Tustin Legacy
Development at Tustin Legacy, the City’s newest community, continues to move
forward. Staff is monitoring the costs of providing public services and maintaining
facilities including streets, sidewalks, and parks; these items are largely funded by
service taxes tied to Community Facility Districts (CFDs). A significant amount of
development has occurred to date, including major regional and local infrastructure,
residential neighborhoods, shopping centers, parks, and institutional uses. While there
is still a substantial amount of infrastructure to install and remaining land to develop,
some major projects are underway or nearing completion, including:
•Approximately 400,000 square feet of office space has been completed at
FLIGHT at Tustin Legacy, a creative office campus developed by Lincoln Property
Company. FLIGHT features several amenities, including a very popular 12,000-
square-foot market food hall with chef-driven food and beverage concepts, a
6,000-square-foot conference center for meetings and special events, and direct
access to Tustin Legacy Park creating a dynamic indoor/outdoor environment.
Over 94% of Flight is occupied or in lease negotiations. Current tenants include
Happy Money, OTTNO Inc, Virgin Galactic, InXile Entertainment, Branded Online,
WATG, Avetta, Chromadex, Taylor & Associates, Calloquy, Lendistry, PTS
Advance, Syspro, Incipio, Just Food for Dogs, and Synergy Training. A large
number of employees at FLIGHT will have a positive economic multiplier effect
that reaches beyond the boundaries of FLIGHT. FLIGHT will benefit the City in
balancing job growth with housing needs.
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•The Village at Tustin Legacy, a 22-acre neighborhood commercial center
developed by Regency Centers, is comprised of two major components:
o A retail center anchored by a Blue Ribbon Stater Bros., CVS, Bank of
America, Chipotle, and Dunkin’ Donuts. This portion is complete.
o A medical plaza with a medical office building, medical services, and an
acute care hospital/rehabilitation facility. All medical services buildings are
complete and Hoag Memorial Hospital Presbyterian completed the 60,000
square-foot medical office building in April 2018. Encompass Health
Rehabilitation Hospital, a 69,500-square-foot acute care
hospital/rehabilitation facility opened in early 2022. All portions of the
medical plaza are now complete.
•The Landing at Tustin Legacy, developed by Brookfield Homes Southern
California LLC (Brookfield) is a 25-acre residential community that features 400
for-sale units comprised of three design styles: 154 attached stacked flats (Terra),
129 row townhomes (Luna), as well as 117 luxury single-family homes (Cira).
The City closed on the land sale to Brookfield in September 2021. Construction
began in the Fall of 2021 and is projected to take three years for full build-out.
Model homes opened to the public in the spring of 2022; over 150 homes have
been built to date and sales are ongoing.
Pacific Center East
Pacific Center East, an area near the intersection of Edinger Avenue and the 55 freeway,
contains City-owned assets, portions of which have been conveyed for development,
leased, or will be available for future development. The area currently includes two
hotels that generate a significant amount of Transient Occupancy Tax (TOT) revenue for
the City.
•SchoolsFirst Federal Credit Union: In 2019, the City sold a 1.7-acre parcel to
SchoolsFirst to expand SchoolsFirst’s existing campus and consolidate their
facilities into a new headquarter in Tustin. The site is bounded by Newport
Avenue, Del Amo Avenue, and Edinger Avenue. SchoolsFirst has completed
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construction of its new 180,000 square-foot office building, 5,000 square-foot
retail bank branch, and 900+ space parking structure and began to move into their
facilities in phases starting in the Fall of 2021 and throughout 2022. The office
building and bank branch, when combined with existing SchoolsFirst buildings,
will be home to over 1,600 employees and serve as SchoolsFirst’s California
corporate headquarters.
Old Town Tustin
•The Downtown Commercial Core Specific Plan (DCCSP) provides the framework
to preserve and enhance the area as a vital, pedestrian-friendly, and attractive
commercial core in Tustin. The DCCSP also introduces the opportunity for mixed-
use residential development in select areas to bring more residents and visitors
to the area.
•Construction of 140 residential units known as Vintage was completed in 2021.
The Vintage by Taylor Morrison offers resort-style amenities, including a
community pool, and is within walking distance to Old Town businesses.
Affordable Housing
In May 2022, the City conveyed approximately 0.4 acres of land to Family Promise of
Orange County (Family Promise) to develop the House of Ruth, a seven (7) unit
apartment complex that will provide transitional housing for homeless families.
HomeAid Orange County is serving as the construction manager for Family Promise and
Brookfield Residential is the principal builder. Construction is scheduled to be complete
in Spring of 2023.
Some of the factors impacting the sustainability of future budgets include the City’s
pensions and unfunded liabilities, and funding of construction costs for infrastructure to
advance development within Tustin Legacy. City Staff will continue to work with the
Council to prioritize these types of significant projects and to seek new revenue sources
for the future. In addition, City Staff continues to strive to achieve the best long-term
development strategies, with the intent of maximizing the City’s long-term revenues.
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ACCOMPLISHMENTS AND FUTURE PROJECTS
Major capital improvement projects completed during fiscal year 2022 include the
following:
•Public Facilities
o Tustin Sports Park Playground Renovation
o HVAC for City Hall and Police Department
•Transportation Facilities
o Red Hill Median Improvements
o Annual Pavement Maintenance Program
•Water Production
o Simon Ranch Reservoir and Booster Pump Station Pipeline Replacement
The City’s capital projects for fiscal year 2022-2023 are budgeted at $61.2 million. The
budget reflects capital improvement projects funded by Tustin Legacy Backbone
Infrastructure Funds and proceeds from sale of land at the Tustin Legacy. Other funding
sources for the capital projects include Water Revenue Bond proceeds, Water Revenues,
Gas Tax, Park Development Funds, Measure M2, State Road Maintenance and
Rehabilitation funds (RMRA), and Community Development Block Grants. Major capital
projects for fiscal year 2022-2023 include:
•Tustin Legacy Facilities
o Alley Grove
o Neighborhood D-South Infrastructure Construction – Phase 2
•Traffic Control Facilities
o Main Street Improvements
•Transportation Facilities
o Annual Pavement Maintenance and Public Infrastructure Maintenance
Program
•Public Facilities
o Civic Center Generator
•Park Facilities
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o Pine Tree Park Irrigation and Turf Improvements, Picnic Shelter
Replacement, and Volleyball Court Reconfiguration
o Tustin Legacy Dog Park
•Water Projects
o Conjunctive Use Well at Beneta Well Site
AWARDS
The Government Finance Officers Association of the United States and Canada (GFOA)
awarded a Certificate of Achievement for Excellence in Financial Reporting to the City
of Tustin for its Annual Comprehensive Financial Report (ACFR) for the fiscal year ended
June 30, 2021. This was the thirty-fifth (35) consecutive year that Tustin has achieved
this prestigious award. In order to be awarded a Certificate of Achievement, a
municipality must publish an easily readable and efficiently organized annual
comprehensive financial report. This report must satisfy both generally accepted
accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our
current annual comprehensive financial report continues to meet the Certificate of
Achievement Program’s requirements, and we are submitting it to GFOA to determine
its eligibility for another certificate.
ACKNOWLEDGMENTS
The preparation of this report would not have been possible without the efficient and
dedicated services of the entire staff of the Finance Department. Special thanks are due
to the following members of the Finance Department who assisted and contributed to
its preparation: Sean Tran, Deputy Director – Administrative Services; David Faraone, Jr.,
Senior Budget Analyst; Glenda Babbitt, Management Analyst; Andrea Campbell, Senior
Accountant; and JP Facundo, Accountant.
Credit must also be given to the City Council for their exceptional support and
commitment to maintaining the highest standards of professionalism in the
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LOCAL GOVERNMENT
FY 2021-22
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Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Tustin
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2021
Executive Director/CEO
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Independent
Auditor’s Report
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Independent Auditor’s Report
City Council
City of Tustin
Tustin, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the City of Tustin,
California, as of and for the year June 30, 2022, and the related notes to the financial statements,
which collectively comprise the City of Tustin’s basic financial statements as listed in the table of
contents.
In our opinion, the accompanying financial statements 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, California, as of
June 30, 2022, and the respective changes in financial position and, where applicable, cash flows
thereof for the year then ended in accordance with accounting principles generally accepted in the
United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America (GAAS) and the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for
the Audit of the Financial Statements section of our report. We are required to be independent of
the City of Tustin, California, and to meet our other ethical responsibilities, in accordance with the
relevant ethical requirements relating to our audit. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our audit opinions.
Emphasis of Matter
As described further in Note 1 to the financial statements, during the year ended June 30, 2022,
the City of Tustin implemented Governmental Accounting Standards Board (GASB) Statement No.
87. Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Statements
The City of Tustin’s management is responsible for the preparation and fair presentation of the
financial statements in accordance with accounting principles generally accepted in the United
States of America, and for the design, implementation, and maintenance of internal control
relevant to the preparation and fair presentation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are
conditions or events, considered in the aggregate, that raise substantial doubt about the City of
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Tustin’s ability to continue as a going concern for one year after the date that the financial
statements are issued.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but
is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance
with GAAS will always detect a material misstatement when it exists. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control. Misstatements are considered material if there is a substantial likelihood that,
individually or in the aggregate, they would influence the judgment made by a reasonable user
based on the financial statements.
In performing an audit in accordance with GAAS, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether
due to fraud or error, and design and perform audit procedures responsive to those risks.
Such procedures include examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of The City of Tustin’s internal control.
Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluate the overall
presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the
aggregate, that raise substantial doubt about the City of Tustin’s ability to continue as a
going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit, significant audit findings, and certain internal
control–related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis, budgetary comparison information for the General Fund
and each major special revenue fund, Schedule of Proportionate Share of the Net Pension Liability
– Safety Plan, Schedule of Contributions – Safety Plan, Schedule of Changes in the Net Pension
Liability and Related Ratios – Miscellaneous Plan, Schedule of Contributions – Miscellaneous Plan,
Schedule of Changes in the Net OPEB Liability and Related Ratios, Schedule of Contributions –
OPEB, and the Annual Money-Weighted Rate of Return on Investments be presented to
supplement the basic financial statements. Such information is the responsibility of management
and, although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board who considers it to be an essential part of financial reporting for
placing the basic financial statements in an appropriate operational, economic, or historical
context. We have applied certain limited procedures to the required supplementary information 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 our audit of the basic
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financial statements. We do not express an opinion or provide any assurance on the information
because the limited procedures do not provide us with sufficient evidence to express an opinion
or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City of Tustin’s basic financial statements. The combining and individual
nonmajor fund financial statements and schedules are presented for purposes of additional
analysis and are not a required part of the basic financial statements.
The combining and individual nonmajor fund financial statements and schedules, are the
responsibility of management and were derived from and relate directly to the underlying
accounting and other records used to prepare the basic financial statements. Such information
has been subjected to the auditing procedures applied in the audit of the basic financial
statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic
financial statements or to the basic financial statements themselves, and other additional
procedures in accordance with auditing standards generally accepted in the United States of
America. In our opinion, the combining and individual nonmajor fund financial statements and
schedules are fairly stated, in all material respects, in relation to the basic financial statements as
a whole.
Other Information
Management is responsible for the other information included in the Annual Comprehensive
Financial Report. The other information comprises the introductory section and statistical section
but does not include the financial statements and our auditor's report thereon. Our opinions on
the financial statements do not cover the other information, and we do not express an opinion or
any form of assurance thereon. In connection with our audit of the financial statements, our
responsibility is to read the other information and consider whether a material inconsistency
exists between the other information and the financial statements, or the other information
otherwise appears to be materially misstated. If, based on the work performed, we conclude that
an uncorrected material misstatement of the other information exists, we are required to describe
it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report December 9,
2022 on our consideration of the City of Tustin’s internal control over financial reporting and on
our tests of its compliance with certain provisions of laws, regulations, contracts, and grant
agreements and other matters. The purpose of that report is solely to describe the scope of our
testing of internal control over financial reporting and compliance and the results of that testing,
and not to provide an opinion on the effectiveness of internal control over financial reporting or on
compliance. That report is an integral part of an audit performed in accordance with Government
Auditing Standards in considering the City of Tustin’s internal control over financial reporting and
compliance.
Irvine, California
December 9, 2022
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Management Discussion
and Analysis
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CITY OF TUSTIN
Management’s Discussion and Analysis (Unaudited)
June 30, 2022
As management of the City of Tustin, California (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, 2022. We encourage readers to consider the information presented here in conjunction
with additional information that we have furnished 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 and deferred outflows of resources of the City exceeded its liabilities and deferred
inflows of resources at June 30, 2022, by $805.4 million (net position). The net position consists
of $569.4 million invested in capital assets, $48.3 million in restricted net position, and $187.7
million in unrestricted net position.
• The City’s total net position increased by $54.9 million during the fiscal year ended June 30,
2022. The increase in net position is largely related to the sale of 25.44 acres of land to a
developer at the Tustin Legacy area during the fiscal year.
.
Overview of the Financial Statements
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) government-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 government-wide financial statements are designed to provide readers with a broad overview of
the City’s finance, in a manner similar to a private-sector business.
The statement of net position presents information on all of the City’s assets and liabilities and
deferred inflows/outflows of resources, with the difference reported as net position. Over time,
increases or decreases in net position may serve as a useful indicator of whether the financial position
of the City is improving or deteriorating.
The statement of activities presents information showing how the government’s net position changed
during the most recent fiscal year. All changes in net position are reported as soon as the underlying
event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues
and expenses are reported in this statement for some items that will only result in cash flows in future
fiscal periods (e.g., uncollected 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
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CITY OF TUSTIN
Management’s Discussion and Analysis (Unaudited)
June 30, 2022
Government-wide Financial Statements (Continued)
intended to recover all or a significant portion of their costs through user fees and charges.
Governmental activities of the City, and the Tustin Public Financing Authority, a blended component
unit, include general government, public safety, community services, and public works. Business-type
activity of the City is the water utility services.
The government-wide financial statements can be found immediately following this discussion and
analysis.
Fund Financial Statements
A fund 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 finance-related legal requirements. All
of the funds of the City can be divided into three categories: governmental funds, proprietary funds,
and fiduciary funds.
Governmental funds. Governmental funds are used to account for essentially the same functions
reported as governmental activities in the government-wide financial statements. However, unlike the
government-wide financial statements, the governmental fund financial statements focus on near-
term inflows and outflows of spendable resources, as well as on balances of spendable 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 governmental funds with similar
information presented for governmental activities in the government-wide financial statements. By
doing so, readers may better understand the long-term impact of the government’s near-term
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 governmental funds and governmental activities.
The City maintains various individual governmental funds organized by their type (special revenue and
capital projects funds). Information is presented separately in the Governmental Funds Balance Sheet
and in the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances.
The General Fund, American Rescue Plan Act (ARPA) Special Revenue Fund, Housing Authority
Special Revenue Fund, and Park Acquisition and Development Special Revenue 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 nonmajor governmental funds is provided in the
form of combining statements elsewhere in this report.
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CITY OF TUSTIN
Management’s Discussion and Analysis (Unaudited)
June 30, 2022
Fund Financial Statements (Continued)
The City adopts a biennial budget for its General Fund and the Special Revenue Funds. Budgetary
comparison schedules have been provided to demonstrate compliance with this budget requirement
elsewhere in this report.
The governmental funds financial statements can be found immediately following the government-
wide financial statements.
Proprietary funds. 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
services.
The proprietary fund financial statements can be found immediately following the governmental funds
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 government-wide financial statement
because the resources of those funds are not available to support the City’s own programs. The City
utilizes a private-purpose trust fund to account for the assets, liabilities, and activities of the Successor
Agency. The Successor Agency was created on February 1, 2012 with the dissolution of the Tustin
Community Redevelopment Agency.
The second fiduciary fund is the Other Post-Employment Benefit (OPEB) Trust Fund, which is used to
account for the assets in the section 115 trust with the Public Agency Retirement Services (PARS) for
pre-funding the City’s OPEB obligations. The City Council approved the establishment of the trust in
April 2017, and the City has made two deposits to the trust since its inception.
The third fiduciary fund is a custodial fund that is used to account for the assets of Community Facility
Districts 04-1, 06-1, 07-1, 2014-1, and 2018-1. 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.
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CITY OF TUSTIN
Management’s Discussion and Analysis (Unaudited)
June 30, 2022
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents certain
required supplementary information, which includes Budgetary Comparison Schedules for the General
Fund and three other major funds, as well as schedules of funding progress for the City’s defined
benefit pension plans and other post-employment healthcare benefits (OPEB) plan. Required
supplementary information can be found immediately following the notes to the basic financial
statements.
The combining statements referred to earlier in connection with nonmajor governmental funds are
presented for all nonmajor Special Revenue Funds and nonmajor Capital Projects Funds. These
combining and individual fund statements and schedules can be found immediately following the
required supplementary information.
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 position (70.7%) reflects its investment in capital assets (e.g., land,
buildings, and improvements other than buildings, equipment, infrastructure, and construction in
progress), less any related outstanding debt that was used to acquire those assets. 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.
The City’s total assets increased by $57.4 million or 6.4% compared to the prior fiscal year while its
total deferred outflows of resources increased by $4.6 million or 26.1%. As discussed previously, the
City sold land to a developer during the year, resulting in cash-inflows and an increase in assets. Major
factors to the increases in deferred outflows of resources stemmed from changes in assumptions used
for pension obligations as well as additional pension contributions made by the City, which will be
applied as a reduction of the net pension liabilities for the next fiscal year.
The City’s total liabilities decreased by $26.5 million or 15.9% while its total deferred inflows of
resources increased by $33.6 million. The primary reason for the decreased liabilities and increased
deferred inflows of resources can be attributed to CalPERS achieving a significantly higher investment
return during fiscal year 2020-2021. CalPERS’s 21% actual investment return far exceeded its
expected investment return of 7.15%. As a result, the City’s pension plan assets increased and
pension plan liabilities were reduced by $32.3 million. At the same time, this higher than expected
return widened the gap between the pension plan’s projected and actual investment earnings by $27
million, which was reported as an increase in deferred inflows of resources on the City’s financial
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CITY OF TUSTIN
Management’s Discussion and Analysis (Unaudited)
June 30, 2022
Government-wide Financial Analysis (Continued)
statements. The other component that offset the total liability decrease was an increase in unspent
American Rescue Plan Act (ARPA) funds. The City received two tranches of ARPA funds ($9.7 million
in May 2021 and $9.7 million in June 2022). ARPA funds are required to be classified as unearned
revenue until expended. The City expended $6.4 million in ARPA funds in the current year and the
remaining $13 million was classified as unearned revenue at June 30, 2022. Lastly, the City
implemented Governmental Accounting Standards Board (GASB) Statement No. 87 – Leases during
the current fiscal year. The City recognized approximately $7.1 million in deferred inflows of resources
related to various leases.
The City’s total net position increased by $54.9 million or 7.3%. Major factors that contributed to the
net position increase are discussed in the following pages.
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CITY OF TUSTIN
Management’s Discussion and Analysis (Unaudited)
June 30, 2022
Government-wide Financial Analysis (Continued)
Governmental activities. The net position of the City’s governmental activities increased by $54.8
million or 7.7% to $766.4 million. Of the $766.4 million in net position, $540.2 million is invested in
capital assets such as land, buildings, equipment, and infrastructure; $48.3 million is restricted to
specifically stipulated spending agreements originated by law, contracts, or other agreements with
external parties. The remaining $177.9 million is unrestricted and available to be designated for
specific purposes by the City Council to meet the City’s ongoing obligations.
Total
% Change
2021 2022 2021 2022 2021 2022 2021-2022
Assets:
Current and other assets 267.7$ 334.8$ 24.5$ 19.0$ 292.2$ 353.8$
Capital assets 550.5 542.4 60.7 64.6 611.2 607.0
Total Assets 818.2 877.2 85.2 83.6 903.4 960.8 6.4%
Deferred Outflows of Resources 13.5 18.1 4.1 4.1 17.6 22.2 26.1%
Liabilities:
Current liabilities 27.3 31.1 5.6 5.5 32.9 36.6
Non-Current liabilities 89.2 62.1 44.6 41.5 133.8 103.6
Total Liabilities 116.5 93.2 50.2 47.0 166.7 140.2 -15.9%
Deferred Inflows of
Resources 3.6 35.7 0.2 1.7 3.8 37.4 884.2%
Net Position:
Net investment in capital assets 565.4 540.2 26.0 29.2 591.4 569.4
Restricted 39.4 48.3 - - 39.4 48.3
Unrestricted 106.8 177.9 12.9 9.8 119.7 187.7
Total Net Position 711.6$ 766.4$ 38.9$ 39.0$ 750.5$ 805.4$ 7.3%
Total
Governmental
Activities
Business-Type
Activities
City of Tustin
Summary of Net Position
As of June 30, 2022
(in millions of dollars)
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CITY OF TUSTIN
Management’s Discussion and Analysis (Unaudited)
June 30, 2022
Government-wide Financial Analysis (Continued)
Gain on sale of land
45.3%
Sales tax
27.8%
Property taxes
22.9%
Transient occupancy taxes
1.5%
Other taxes
1.5%Other general
revenues
0.2%
Business license
taxes
0.4%
Profit participation
0.3%
Transfers
0.1%
Unrestricted
motor vehicle
in-lieu fees
0.1%
Revenues By Source -Governmental Activities
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CITY OF TUSTIN
Management’s Discussion and Analysis (Unaudited)
June 30, 2022
Government-wide Financial Analysis (Continued)
Total
% Change
2021 2022 2021 2022 2021 2022 2021-2022
Revenues:
Program revenues:
Charges for services 7.1$ 12.7$ 18.9$ 19.6$ 26.0$ 32.3$
Operating grants and contributions 8.6 12.3 - 0.1 8.6 12.4
Capital grants and contributions 4.4 12.9 - 1.6 4.4 14.5
General revenues:
Taxes 63.4 66.9 - - 63.4 66.9
Earnings(loss) on investments 1.7 (3.5) - (0.2) 1.7 (3.7)
Motor vehicle in-lieu fees 0.1 0.1 - - 0.1 0.1
Miscellaneous 1.3 0.2 0.1 0.4 1.4 0.6
Profit participation 5.0 0.3 - - 5.0 0.3
Gain on sale of assets 0.1 56.0 - - 0.1 56.0
Transfer - 0.1 - (0.1) - -
Total Revenues 91.7 158.0 19.0 21.4 110.7 179.4 62.1%
Expenses:
General government 27.2 19.4 - - 27.2 19.4
Public safety 42.3 37.3 - - 42.3 37.3
Public works 25.7 34.8 - - 25.7 34.8
Community services 7.9 11.7 - - 7.9 11.7
Water - - 19.3 21.3 19.3 21.3
Total Expenses 103.1 103.2 19.3 21.3 122.4 124.5 1.7%
Change in net position (11.4) 54.8 (0.3) 0.1 (11.7) 54.9
Net Position – Beginning 723.0 711.6 39.2 38.9 762.2 750.5
Net Position - Ending 711.6$ 766.4$ 38.9$ 39.0$ 750.5$ 805.4$ 7.3%
City of Tustin
Summary of Changes in Net Position
For the Year Ended June 30, 2022
(in millions of dollars )
Total
Governmental
Activities
Business-Type
Activities
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CITY OF TUSTIN
Management’s Discussion and Analysis (Unaudited)
June 30, 2022
Government-wide Financial Analysis (Continued)
In governmental activities, the increase in net position of $54.8 million is primarily due to the following:
• In September 2021, the City sold 25.44 acres of land to a developer for a gain of $56 million.
• As discussed previously, net pension liability changed due to higher than expected CalPERS
investment earnings from fiscal year 2020-2021, and resulted in an increase of $30 million to
net position.
• The same higher investment earnings also resulted in an increase to the net deferred resources
on pension plans and a $20.4 million reduction to net position.
• Capital asset depreciation expense in the amount of $14.5 million; offset by a $6.3 million
increase in capital assets.
• Governmental liabilities increased by $5 million due to ARPA fund unearned revenue, claims
and judgments, and compensated absences.
In the prior fiscal year, governmental activities decreased by approximately $11.4 million compared to
an increase of $54.8 million in 2021-22, which reflects a $66.2 million difference year-over-year.
Other than the gain from the sale of land, the year-over-year difference can also be attributed to the
following:
• A combined increase of $17.8 million in program revenues from charges for services,
operating grants and contributions, and capital grants.
• An increase of $3.6 million in sales tax revenue.
• The increases were offset by reductions in investment earnings and profit participation
revenue in 2022.
Business-Type activities net position increased slightly by $0.1 million. Revenues increased by $2.4
million, while expenses increased by $2 million when compared to the prior year.
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 governmental funds is to provide information on near-term inflows, outflows,
and balances of spendable 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 $291.2 million, an increase of $56.5 million from the prior year’s fund balance. Other
than a gain of $56 million from sale of land, the following factors impacted the net change to fund
balance:
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CITY OF TUSTIN
Management’s Discussion and Analysis (Unaudited)
June 30, 2022
Financial Analysis of the Government’s Funds (Continued)
• A combined increase of $5.3 million from sales tax, property tax and transient occupancy tax
as a result of economic recovery from the pandemic.
• A combined increase of $4.6 million in charges for services, licenses and permits revenue, and
rental income as service demands increased.
• An increase of $1.5 million in developer’s contribution, net of change in profit participation
revenue.
• A decrease of $5 million in investment earnings due to market volatilities.
• The revenue increases were offset by a corresponding increase in service costs. Total non-
capital expenditures increased by $10.9 million while capital outlays reduced by $5 million.
Approximately $103.5 million or 35.5%, of the City’s governmental fund balance constitutes
nonspendable fund balance. Of the nonspendable amount, $102.5 million is land held for resale. The
remaining fund balance consists of $46.6 million in restricted funds, $4.8 million assigned to capital
projects, and $136.2 million in unassigned funds.
The General Fund is the chief operating fund of the City. At the end of the current fiscal year, unassigned
fund balance of the General Fund was $136.2 million, while total fund balance was $264.4 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 covers 153% of the total General Fund expenditures,
including transfers out.
Three other Special Revenue Funds are determined to be major governmental funds of the City. The first
major governmental fund is the American Rescue Plan Act (ARPA) Special Revenue Fund, which has
$13 million in cash and investments with an offsetting unearned revenue of $13 million. This fund is
restricted for specific purposes relating to COVID-19 mitigation efforts and governmental services. The
Housing Authority Special Revenue Fund is the second major governmental fund with $0.7 million in
restricted fund balance at the end of the current fiscal year. This fund is restricted for increasing or
improving low-and-moderate income housing. The Housing Authority Fund holds $5 million in
affordable housing loans. The third major governmental fund is the Park Acquisition and Development
Special Revenue Fund, which holds fees collected to develop the City’s park system.
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CITY OF TUSTIN
Management’s Discussion and Analysis (Unaudited)
June 30, 2022
Financial Analysis of the Government’s Funds (Continued)
Total
% Change
2021 2022 2021-2022
Revenues:
Taxes 58.5$ 63.9$
Charges for services 2.0 4.2
Intergovernmental 5.0 2.1
Fines and forfeitures 1.0 1.0
Licenses and permits 1.2 2.2
Investment income (loss)1.6 (3.3)
Other 3.9 14.3
Profit participation 5.0 0.3
Gain on sale of land held for resale 0.1 56.0
Total Revenues 78.3 140.7 79.7%
Expenditures:
General government 23.8 18.5
Public safety 37.5 41.4
Public works 8.5 15.6
Community services 3.3 6.3
Capital Outlay 8.8 4.8
Debt service 0.1 0.1
Total Expenses 82.0 86.7 5.7%
Excess of Revenues Over
(Under) Expenditures (3.7) 54.0
Other Financing Sources (Uses):
Net transfers 7.1 7.6
Net Change in Fund Balance 3.4$ 61.6$ 1711.8%
City of Tustin
Summary of Changes in Fund Balances - General Fund
For the Year Ended June 30, 2022
(in millions of dollars )
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CITY OF TUSTIN
Management’s Discussion and Analysis (Unaudited)
June 30, 2022
Financial Analysis of the Government’s Funds (Continued)
General Fund total revenues increased by $62.4 million or 79.7% as noted in the previous table. Material
transactions impacting revenues in the General Fund were as follows:
• Taxes increased $5.3 million primarily due to higher sales tax and property tax revenues. Sales
tax revenue totaled approximately $34.4 million, an increase of $3.6 million or 12% due to
an increase in consumer spending. Property tax revenue totaled $25.5 million, an increase of
$1.0 million or 4%.
• Program and fee revenues such as licenses and permits, charges for services and rental income
experienced a total increase of $4.4 million as service demands grew during the year.
• One-time gain of $56 million from sale of land.
• One-time development contributions including profit participation revenue increased by $4.5
million.
• Intergovernmental revenue decreased by $2.9 million compared to the prior fiscal year. The
City received $3.0 million in CARES Act funding in 2021, which was primarily used for
economic assistance and meal gap assistance.
• Investment earnings decreased $4.9 million during 2022, largely due to market volatility.
General Fund total expenditures increased by $4.7 million or 5.8%, which is primarily related to
increased public service demands as local economy recovered.
General Fund Budgetary Highlights
The General Fund actual revenues were $61.5 million higher than the amended budgeted revenues,
mostly due to one-time development contributions and a gain from sale of land. The amended
budgeted expenditures were $111.7 million, an increase in appropriations of $8.3 million from the
original budgeted expenditures of $103.5 million. The increase in appropriations was largely
associated with increased service levels.
Actual General Fund expenditures were less than the amended budgeted amount of $111.7 million by
$25.0 million, primarily due to appropriations for capital projects spanning multiple years.
Financial Analysis of the Proprietary Funds
The City has one proprietary fund which is the Water Enterprise Fund. Total revenues for the Water
Fund exceeded total expenses by $0.1 million, resulting in an increase in net position during fiscal year
2022, from $38.9 million as of June 30, 2020, to $39.0 million as of June 30, 2022.
Operating revenues increased by $0.7 million or 3.9%, which is largely attributable to a 5% scheduled
rate increase. The City also received a one-time capital grant of $1.6 million during the fiscal year.
Related operating costs increased by $2.0 million from prior fiscal year, due to an increase in purchased
water.
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CITY OF TUSTIN
Management’s Discussion and Analysis (Unaudited)
June 30, 2022
Capital Asset and Debt Administration
Capital Assets
The City’s investment in capital assets for its governmental and business-type activities as of June 30,
2022 amounts to $607 million, net of accumulated depreciation. This investment in capital assets
includes land, buildings and system improvements, machinery and equipment, park facilities, roads,
and bridges.
Overall, capital asset additions of $12.3 million in fiscal year 2022 (net of transfers from construction
in progress) were offset by depreciation expense of $16.7 million for a net reduction in capital assets
of approximately $4.2 million. In fiscal year 2022, the following major construction projects were
completed:
• Tustin Sports Park Playground Renovations
• Various Roadway and Public Infrastructure Maintenance
• Red Hill Median Improvements
• Simon Ranch Reservoir, Booster Pump Station Pipeline Replacement
The following major construction projects were in progress in fiscal year 2022: South Hangar
Rehabilitation, Neighborhood D-South Infrastructure Project, Alley Grove, Tustin Legacy Dog Park,
Pine Tree Park Improvements, and various road widening, extension, and traffic signal projects.
Additional information on the City’s capital assets can be found in Note 8 of the notes to the basic
financial statements section of this report.
Total
% Change
2021 2022 2021 2022 2021 2022 2021-2022
Land 105.6$ 105.3$ 1.2$ 1.2$ 106.8$ 106.5$
Right of way 43.8 45.9 - - 43.8 45.9
Construction in progress 13.3 12.7 13.9 2.5 27.2 15.2
Buildings and improvements 120.7 116.6 10.2 9.8 130.9 126.4
Machinery and equipment 5.1 5.4 - - 5.1 5.4
Infrastructure 262.0 256.0 - - 262.0 256.0
Leased assets - 0.5 - 0.5
Property, plant and equipment - - 35.4 51.1 35.4 51.1
Total Capital Assets, Net 550.5$ 542.4$ 60.7$ 64.6$ 611.2$ 607.0$ -0.7%
City of Tustin
Summary of Changes in Capital Assets
For the Year Ended June 30, 2022
(in millions of dollars )
Total
Governmental
Activities
Business-Type
Activities
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CITY OF TUSTIN
Management’s Discussion and Analysis (Unaudited)
June 30, 2022
Long-term Debt
At the end of the current fiscal year, the City had total outstanding long-term liabilities of $103.6 million.
Of this amount, $38.1 million are secured solely by specified revenue sources such as water service
charges.
Overall, long-term debt decreased by $30.1 million from the prior year balances mostly due to a
reduction in the City’s net pension liabilities as a result of CalPERS’s higher than expected investment
returns for the 2020-2021 measurement period. As discussed previously, the reduction of pension
liabilities was offset by an increase in deferred inflows of resources related to pension plans.
Additionally, there were noted increases in postemployment benefits obligation (OPEB) of $1.1 million,
claims and judgments of $1.1 million, and compensated absences of $0.6 million, which was offset with
a decrease in bonds payable of $1.2 million.
Additional information on the City’s long-term debt can be found in Notes 9, 10, and 11 of the notes
to the basic financial statements section of this report.
Total
% Change
2021 2022 2021 2022 2021 2022 2021-2022
Bonds payable -$ -$ 39.3$ 38.1$ 39.3$ 38.1$
Claims and judgments 9.3 10.4 - - 9.3 10.4
Postemployment - -
benefits obligation 10.9 11.9 1.3 1.4 12.2 13.3
Compensated absences 4.5 5.0 0.3 0.4 4.8 5.4
Lease Payable - 0.6 - - - 0.6
Pension liabilities 64.5 34.2 3.6 1.6 68.1 35.8
Total Outstanding Debt 89.2$ 62.1$ 44.5$ 41.5$ 133.7$ 103.6$ -22.5%
Governmental
Activities
Business-Type
Activities
City of Tustin
Summary of Changes in Long-Term Liabilities
For the Year Ended June 30, 2022
(in millions of dollars )
Total
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CITY OF TUSTIN
Management’s Discussion and Analysis (Unaudited)
June 30, 2022
Next Year’s Budget and Rates
On June 21, 2022, the City Council adopted the second-year update of the 2021-2023 Biennial Budget
that established an operating and capital spending plan for Fiscal Year 2022-2023. The 2022-2023
Budget was adopted with total appropriations of $214.3 million. The General fund fiscal year 2022-
2023 estimated revenues are $82.2 million and budgeted appropriations are $84.6 million. The
operating deficit can be covered by planned use reserves and anticipated expenditure savings. The
appropriations are $5.6 million higher than the prior year’s amended appropriation as the City
anticipates increases in contractually obligated employee costs including pension, overtime at the
Police Department, contract with the Orange County Fire Authority, as well as a $1.1 million
contribution to the Liability Fund.
Requests for Information
This financial report is designed to provide a general overview of the City’s finances for all those with
an interest in the government’s finances. Questions concerning any of the information provided in this
report or requests for additional financial information should be addressed to the Finance Director, City
of Tustin, 300 Centennial Way, Tustin, California, 92780.
18
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Government-Wide
Financial Statements
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DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
Governmental Business-type
Activities Activity Total
ASSETS:
Cash and investments 182,659,501$ 9,582,269$ 192,241,770$
Receivables:
Accounts 9,417,907 4,656,250 14,074,157
Interest 556,209 27,690 583,899
Leases 7,326,268 - 7,326,268
Loans 6,449,149 - 6,449,149
Allowance for uncollectibles (1,612,825) - (1,612,825)
Prepaid items and deposits 940,938 89,865 1,030,803
Land held for resale 102,457,773 3,763,799 106,221,572
Restricted assets:
Cash and investments with fiscal agents 18,260,623 947,867 19,208,490
Cash and investments held by trust 8,327,240 - 8,327,240
Capital assets:
Not being depreciated 163,909,301 3,696,447 167,605,748
Being depreciated, net 378,492,423 60,884,225 439,376,648
TOTAL ASSETS 877,184,507 83,648,412 960,832,919
DEFERRED OUTFLOWS OF RESOURCES:
Deferred charge on refunding - 3,256,137 3,256,137
Deferred amounts on OPEB plan 1,248,870 96,867 1,345,737
Deferred amounts on pension plans 16,825,333 765,094 17,590,427
TOTAL DEFERRED OUTFLOWS OF RESOURCES 18,074,203 4,118,098 22,192,301
LIABILITIES:
Accounts payable and accrued liabilities 7,490,339 4,628,725 12,119,064
Interest payable - 281,577 281,577
Deposits payable 8,375,672 642,777 9,018,449
Unearned revenue 15,255,134 - 15,255,134
Noncurrent liabilities:
Due within one year 5,125,638 1,558,468 6,684,106
Due in more than one year 10,824,667 36,903,221 47,727,888
Due in more than one year - OPEB liability 11,885,474 1,446,093 13,331,567
Due in more than one year - pension liability 34,195,989 1,631,394 35,827,383
TOTAL LIABILITIES 93,152,913 47,092,255 140,245,168
DEFERRED INFLOWS OF RESOURCES:
Deferred amounts on leases 7,148,431 - 7,148,431
Deferred amounts on OPEB plan 1,634,652 161,669 1,796,321
Deferred amounts on pension plans 26,912,232 1,552,539 28,464,771
TOTAL DEFERRED INFLOWS OF RESOURCES 35,695,315 1,714,208 37,409,523
NET POSITION:
Net investment in capital assets 540,256,185 29,184,048 569,440,233
Restricted for:
Community services 8,076,384 - 8,076,384
Public safety 602,614 - 602,614
Public works 39,590,369 - 39,590,369
Unrestricted 177,884,930 9,775,999 187,660,929
TOTAL NET POSITION 766,410,482$ 38,960,047$ 805,370,529$
CITY OF TUSTIN
STATEMENT OF NET POSITION
June 30, 2022
See accompanying notes to the basic financial statements
19
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Charges Operating Capital
for Grants and Grants and
Expenses Services Contributions Contributions
Governmental activities:
General government 19,435,937$ 3,072,210$ 37,560$ -$
Public safety 37,274,550 1,222,841 3,782,774 -
Public works 34,752,971 5,825,437 3,791,516 12,569,259
Community services 11,705,919 2,654,817 4,652,551 283,501
Interest on long-term liabilities 25,311 - - -
Total governmental activities 103,194,688 12,775,305 12,264,401 12,852,760
Business-type activity:
Water 21,303,398 19,633,007 48,914 1,575,140
Total 124,498,086$ 32,408,312$ 12,313,315$ 14,427,900$
General revenues and transfers:
Taxes:
Property
Franchise
Transient occupancy
Business license
Sales tax
Unrestricted motor vehicle in-lieu fees
Earnings (loss) on investments
Gain on sale of land held for resale
Profit participation
Miscellaneous
Transfers
Total general revenues
Change in net position
NET POSITION AT BEGINNING OF YEAR
NET POSITION AT END OF YEAR
Functions/programs
Program Revenues
CITY OF TUSTIN
STATEMENT OF ACTIVITIES
For the year ended June 30, 2022
See accompanying notes to the basic financial statements
20
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Governmental Business-type
Activities Activity Total
(16,326,167)$ -$ (16,326,167)$
(32,268,935) - (32,268,935)
(12,566,759) - (12,566,759)
(4,115,050) - (4,115,050)
(25,311) - (25,311)
(65,302,222) - (65,302,222)
- (46,337) (46,337)
(65,302,222) (46,337) (65,348,559)
28,324,241 - 28,324,241
1,850,139 - 1,850,139
1,857,502 - 1,857,502
435,626 - 435,626
34,391,644 - 34,391,644
92,431 - 92,431
(3,500,691) (173,093) (3,673,784)
56,048,775 - 56,048,775
337,972 - 337,972
190,141 428,425 618,566
108,532 (108,532) -
120,136,312 146,800 120,283,112
54,834,090 100,463 54,934,553
711,576,392 38,859,584 750,435,976
766,410,482$ 38,960,047$ 805,370,529$
Net (Expense) Revenue and
Changes in Net Position
See accompanying notes to the basic financial statements
21
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Fund Financial
Statements
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DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
Park
American Acquisition Other Total
Rescue Plan Act Housing and Governmental Governmental
General (ARPA) Fund Authority Fund Development Funds Funds
Cash and investments 143,420,406$ 13,032,868$ 1,300,350$ 2,089,023$ 22,816,854$ 182,659,501$
Restricted cash and investments 16,150,586 - - - 2,110,037 18,260,623
Restricted cash and investments held by trust 8,327,240 - - - - 8,327,240
Receivables:
Accounts 8,301,277 - - 228,279 888,351 9,417,907
Interest 461,046 12,316 22,489 12,873 47,485 556,209
Leases 1,880,086 - - 5,446,182 - 7,326,268
Loans 479,414 - 5,969,735 - - 6,449,149
Allowance for uncollectibles (586,195) - (1,026,630) - - (1,612,825)
Prepaid items and deposits 935,207 - 5,731 - - 940,938
Due from other funds 6,900 - - - - 6,900
Land held for resale 102,457,773 - - - - 102,457,773
TOTAL ASSETS 281,833,740$ 13,045,184$ 6,271,675$ 7,776,357$ 25,862,727$ 334,789,683$
LIABILITIES
Accounts payable and
accrued liabilities 5,521,296$ -$ 31,601$ 246,533$ 1,690,909$ 7,490,339$
Deposits payable 8,375,672 - - - - 8,375,672
Due to other funds - - - - 6,900 6,900
Unearned revenue 1,496,907 13,045,184 599,257 - 113,786 15,255,134
TOTAL LIABILITIES 15,393,875 13,045,184 630,858 246,533 1,811,595 31,128,045
DEFERRED INFLOW OF RESOURCES
Unavailable revenue 235,028 - 4,870,071 228,279 26,315 5,359,693
Lease related 1,841,171 - - 5,307,260 - 7,148,431
TOTAL DEFERRED INFLOW
OF RESOURCES 2,076,199 - 4,870,071 5,535,539 26,315 12,508,124
FUND BALANCES
Nonspendable 103,464,420 - 5,731 - - 103,470,151
Restricted 24,668,684 - 765,015 1,994,285 19,216,912 46,644,896
Assigned - - - - 4,807,905 4,807,905
Unassigned 136,230,562 - - - - 136,230,562
TOTAL FUND BALANCES 264,363,666 - 770,746 1,994,285 24,024,817 291,153,514
TOTAL LIABILITIES, DEFERRED
INFLOWS OF RESOURCES
AND FUND BALANCES 281,833,740$ 13,045,184$ 6,271,675$ 7,776,357$ 25,862,727$ 334,789,683$
LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES
ASSETS
CITY OF TUSTIN
BALANCE SHEET
GOVERNMENTAL FUNDS
June 30, 2022
See accompanying notes to the basic financial statements
22
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Fund balances of governmental funds 291,153,514$
Amounts reported for governmental activities in the Statement of Net Position are
different because:
Capital assets net of depreciation have not been included as financial resources in
governmental funds.542,401,724
Long-term liabilities applicable to the City's governmental activities are not due and
payable in the current period and, accordingly, are not reported as fund liabilities.
All liabilities (both current and long-term) are reported in the Statement of Net Position:
Balance at June 30, 2022 are:
Claims and judgments payable (10,428,570)$
Compensated absences payable (4,957,206)
Lease payable (564,529)
Total long-term liabilities (15,950,305)
Pension related debt applicable to the City's governmental activities are not due and
payable in the current period and accordingly are not reported as fund liabilities.
Deferred outflows of resources and deferred inflows of resources related to pensions
are only reported in the Statement of Net Position as the changes in these amounts
effects only the government-wide statements for governmental activities:
Deferred outflows of resources 16,825,333
Deferred inflows of resources (26,912,232)
Pension liability (34,195,989)
(44,282,888)
OPEB related debt applicable to the City's governmental activities are not due and
payable in the current period and accordingly are not reported as fund liabilities.
Deferred outflows of resources and deferred inflows of resources related to OPEB
are only reported in the Statement of Net Position as the changes in these amounts
effects only the government-wide statements for governmental activities:
Deferred outflows of resources 1,248,870
Deferred inflows of resources (1,634,652)
Post employment benefit liability (11,885,474)
(12,271,256)
Other long-term assets are not available to pay for current period expenditures
and, therefore, are reported as unavailable revenue in the governmental
funds balance sheet.5,359,693
Net position of governmental activities 766,410,482$
CITY OF TUSTIN
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET POSITION
June 30, 2022
See accompanying notes to the basic financial statements
23
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Park
American Acquisition Other Total
Rescue Plan Act Housing Authority and Governmental Governmental
General (ARPA) Fund Fund Development Funds Funds
REVENUES
Taxes 63,868,163$ -$ -$ -$ 209,868$ 64,078,031$
Licenses and permits 2,179,335 - - - - 2,179,335
Fines and forfeitures 1,011,519 - - - - 1,011,519
Investment income (loss)(3,301,154) 23,532 (18,839) 75,754 (279,984) (3,500,691)
Intergovernmental revenue 2,107,144 6,335,600 385,545 5,498 10,340,856 19,174,643
Charges for services 4,209,793 - - 19,211 64,610 4,293,614
Rental income 2,866,998 - - 392,123 - 3,259,121
Other revenue 11,711,168 - 26,909 - 500,006 12,238,083
Gain on sale of land held for resale 56,048,775 - - - - 56,048,775
Total revenues 140,701,741 6,359,132 393,615 492,586 10,835,356 158,782,430
EXPENDITURES
Current:
General government 18,524,141 - - - 101,964 18,626,105
Public safety 41,389,452 - - - 125,625 41,515,077
Public works 15,550,797 - - - 1,814,287 17,365,084
Community services 6,307,129 2,959,132 479,850 53,040 - 9,799,151
Capital outlay 4,801,758 - - 782,596 9,370,298 14,954,652
Debt service:
Principal retirement 107,990 - 23,374 - - 131,364
Interest expenditures 24,208 - 1,103 - - 25,311
TOTAL EXPENDITURES 86,705,475 2,959,132 504,327 835,636 11,412,174 102,416,744
EXCESS OF REVENUES
(UNDER) EXPENDITURES 53,996,266 3,400,000 (110,712) (343,050) (576,818) 56,365,686
OTHER FINANCING SOURCES (USES)
Transfer in 10,028,533 - - - 2,466,471 12,495,004
Transfer out (2,358,888) (3,400,000) - - (6,627,584) (12,386,472)
TOTAL OTHER FINANCING
SOURCES (USES)7,669,645 (3,400,000) - (4,161,113) 108,532
NET CHANGES IN FUND BALANCES 61,665,911 - (110,712) (343,050) (4,737,931) 56,474,218
-
FUND BALANCES - BEGINNING OF YEAR 202,697,755 - 881,458 2,337,335 28,762,748 234,679,296
FUND BALANCES - END OF YEAR 264,363,666$ -$ 770,746$ 1,994,285$ 24,024,817$ 291,153,514$
CITY OF TUSTIN
For the year ended June 30, 2022
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
See accompanying notes to the basic financial statements
24
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Net changes in fund balances - total governmental funds 56,474,218$
Amounts 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 and contributions
exceeded depreciation and disposition of capital assets in the current period:
Capital outlay 6,273,810$
Disposition of capital assets (510,210)
Depreciation expense (14,513,525)
(8,749,925)
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 position. This amount is the
net effect of theses differences in the treatment of long-term liabilities:
Principal payments - lease 131,364
Claims and judgments payable (1,125,348)
Compensated absences payable (482,694)
(1,476,678)
Pension expenditures reported in the governmental funds includes the annual required
contributions. In the Statement of Activities, pension expense includes the change
in the net pension liability, and related change in pension amounts for deferred
outflows of resources and deferred inflows of resources.8,791,275
OPEB expenditures reported in the governmental funds includes the actuarially determined
contributions. In the Statement of Activities, pension expense includes the change
in the net pension liability, and related change in pension amounts for deferred
outflows of resources and deferred inflows of resources.147,174
Some revenues reported in the Statement of Activities are not considered to be available
to finance current expenditures and therefore are reported as available revenues in
the governmental funds:
Net change in unavailable revenue
(351,974)
Change in net position of governmental activities 54,834,090$
CITY OF TUSTIN
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES TO THE GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
For the year ended June 30, 2022
See accompanying notes to the basic financial statements
25
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Business-type
Activity
Water
ASSETS:Enterprise Fund
CURRENT ASSETS:
Cash and investments 9,582,269$
Accounts receivable 4,656,250
Interest receivable 27,690
Prepaid items 89,865
Land held for resale 3,763,799
Restricted cash and investments 947,867
TOTAL CURRENT ASSETS 19,067,740
NONCURRENT ASSETS:
Capital assets:
Not being depreciated 3,696,447
Being depreciated, net 60,884,225
TOTAL NONCURRENT ASSETS 64,580,672
TOTAL ASSETS 83,648,412
DEFERRED OUTFLOWS OF RESOURCES:
Deferred charge on refunding 3,256,137
Deferred amounts on pension plans 765,094
Deferred amounts on OPEB plan 96,867
TOTAL DEFERRED OUTFLOWS OF RESOURCES 4,118,098
LIABILITIES:
CURRENT LIABILITIES:
Accounts payable and accrued liabilities 4,628,725
Deposits payable 642,777
Interest payable 281,577
Compensated absences payable 279,547
Bonds payable 1,278,921
TOTAL CURRENT LIABILITIES 7,111,547
LONG-TERM LIABILITIES:
Compensated absences payable 93,182
Bonds payable 36,810,039
Net pension liability 1,631,394
Net OPEB liability 1,446,093
TOTAL LONG-TERM LIABILITIES 39,980,708
TOTAL LIABILITIES 47,092,255
DEFERRED INFLOWS OF RESOURCES:
Deferred amounts on pension plan 1,552,539
Deferred amounts on OPEB plan 161,669
TOTAL DEFERRED INFLOWS OF RESOURCES 1,714,208
NET POSITION:
Net investment in capital assets 29,184,048
Unrestricted 9,775,999
TOTAL NET POSITION 38,960,047$
CITY OF TUSTIN
STATEMENT OF NET POSITION
PROPRIETARY FUND
June 30, 2022
See accompanying notes to the basic financial statements 26
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
Business-type
Activity
Water
Enterprise Fund
OPERATING REVENUES:
Charges for services 19,633,007$
TOTAL OPERATING REVENUES 19,633,007
OPERATING EXPENSES:
Personnel services 3,422,930
Purchased water 10,141,113
Maintenance and operation 4,325,008
Depreciation 2,171,607
TOTAL OPERATING EXPENSES 20,060,658
OPERATING INCOME (LOSS)(427,651)
NONOPERATING REVENUES (EXPENSES):
Intergovernmental 48,914
Investment income (loss)(173,093)
Other income 428,425
Interest expense and other fiscal charges (1,242,740)
TOTAL NONOPERATING REVENUES (EXPENSES)(938,494)
CAPITAL CONTRIBUTIONS AND TRANSFERS:
Capital contributions 1,575,140
Transfer out (108,532)
CAPITAL CONTRIBUTIONS AND TRANSFERS 1,466,608
CHANGE IN NET POSITION 100,463
NET POSITION AT BEGINNING OF YEAR 38,859,584
NET POSITION AT END OF YEAR 38,960,047$
CITY OF TUSTIN
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
PROPRIETARY FUND
For the year ended June 30, 2022
See accompanying notes to the basic financial statements 27
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
Business-type
Activity
Water
Enterprise Fund
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from customers 18,742,595$
Payments to suppliers (14,515,481)
Payments to employees (3,927,858)
NET CASH PROVIDED BY
OPERATING ACTIVITIES 299,256
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:
Cash paid to other funds (108,532)
NET CASH FLOWS USED BY NONCAPITAL
FINANCING ACTIVITIES:(108,532)
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Acquisition of capital assets (6,029,142)
Proceeds from capital grants 1,575,140
Principal paid on bonds (1,125,000)
Interest paid on long-term debt (1,168,485)
NET CASH USED BY CAPITAL
AND RELATED FINANCING ACTIVITIES (6,747,487)
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment income 71,914
NET CASH PROVIDED BY
INVESTING ACTIVITIES 71,914
NET DECREASE IN CASH
AND CASH EQUIVALENTS (6,484,849)
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 17,014,985
CASH AND CASH EQUIVALENTS - END OF YEAR 10,530,136$
CASH AND CASH EQUIVALENTS:
Cash and investments - current assets 9,582,269$
Cash and investments - restricted assets 947,867
TOTAL CASH AND CASH EQUIVALENTS 10,530,136$
CITY OF TUSTIN
STATEMENT OF CASH FLOWS
PROPRIETARY FUND
For the year ended June 30, 2022
See accompanying notes to the basic financial statements 28
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
Business-type
Activity
Water
Enterprise Fund
RECONCILIATION OF OPERATING INCOME TO
NET CASH PROVIDED BY OPERATING ACTIVITIES:
Operating income (loss)(427,651)$
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation and amortization 2,171,607
Other nonoperating income (expense)237,587
Change in assets, liabilities and deferrals:
(Increase) decrease in accounts receivable (1,127,999)
(Increase) decrease in prepaid items 35,338
(Increase) decrease in deferred outflows of resources (237,539)
Increase (decrease) in accounts payable and accrued liabilities 273,251
Increase (decrease) in deposits payable (357,949)
Increase (decrease) in compensated absences 39,799
Increase (decrease) in net pension liability (1,910,663)
Increase (decrease) in total OPEB liability 116,205
Increase (decrease) in deferred inflows of resources 1,487,270
NET CASH PROVIDED BY OPERATING ACTIVITIES 299,256$
SCHEDULE OF NON-CASH INVESTING ACTIVITIES
Unrealized loss on investments (239,752)$
PROPRIETARY FUND
(CONTINUED)
For the year ended June 30, 2022
CITY OF TUSTIN
STATEMENT OF CASH FLOWS
See accompanying notes to the basic financial statements 29
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
Successor
Agency to the
Tustin Community
Redevelopment Other Post-
Agency Private Employment
Purpose Trust Benefit (OPEB) Custodial
Fund Trust Fund Funds
ASSETS:
Cash and investments 3,261,364$ -$ -$
Investments:
Money markets - 163,540 -
Mutual funds - equity - 1,303,215 -
Mutual funds - fixed income - 1,269,377 -
Restricted cash and investments 2 - 12,872,879
Receivables:
Accounts - - 70,781
TOTAL ASSETS 3,261,366 2,736,132 12,943,660
DEFERRED OUTFLOWS OF RESOURCES:
Deferred charge on refunding 5,692,552 - -
LIABILITIES:
Interest payable 606,442 - -
Long-term liabilities:
Due within one year 2,391,077 - -
Due in more than one year 48,809,648 - -
TOTAL LIABILITIES 51,807,167 - -
NET POSITION:
Restricted for:
Postemployment benefits other than pensions - 2,736,132 -
Individuals, organizations and other governments (42,853,249) - 12,943,660
TOTAL NET POSITION (42,853,249)$ 2,736,132$ 12,943,660$
CITY OF TUSTIN
STATEMENT OF FIDUCIARY NET POSITION
June 30, 2022
See accompanying notes to the basic financial statements
30
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
Successor
Agency to the
Tustin Community
Redevelopment Other
Agency Private Post-Employment
Purpose Trust Benefit (OPEB) Custodial
Fund Trust Fund Funds
ADDITIONS:
Tax revenue 3,974,498$ -$ 7,009,179$
Investment income (loss)(13,416) (335,000) 9,341
Employer contributions - 500,000 -
TOTAL ADDITIONS 3,961,082 165,000 7,018,520
Deductions:
Administrative expenses - 14,404 190,313
Community services 24,562 - -
Principal - - 2,150,000
Interest 1,867,632 - 4,415,969
TOTAL DEDUCTIONS 1,892,194 14,404 6,756,282
CHANGE IN NET POSITION 2,068,888 150,596 262,238
NET POSITION - BEGINNING OF YEAR (44,922,137) 2,585,536 12,681,422
NET POSITION - END OF YEAR (42,853,249)$ 2,736,132$ 12,943,660$
CITY OF TUSTIN
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
For the year ended June 30, 2022
See accompanying notes to the basic financial statements
31
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
Notes to the
Financial Statements
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 1 - SUMMARY OF 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 issue 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 and there is a financial
benefit/burden relationship.
Blended Component Units
The Tustin Public Financing Authority (the 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. 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. The Authority’s financial transactions consist of debt
service payments that are reported in the Water Enterprise Fund as the Authority has issued debt
for the Water Enterprise Fund.
The City of Tustin Housing Authority (the Housing Authority) was established by the City Council
in 2011, and is responsible for the administration of providing affordable housing in the City. The
Housing Authority is governed by a five-member Board of Directors which consists of members of
the City Council, which designates management and has full accountability for the Housing
Authority’s financial affairs. The Housing Authority’s financial transactions are reported in the
Housing Authority Special Revenue Fund.
All of the City’s component units are considered to be blended component units as the City
Council serves as the governing board, management of the City has operational reasonability, and
the City is considered financially accountable for these component units. Blended component units,
although legally separate entities, are in substance, part of the City’s operations and so data from
these units are reported within the funds of the primary government. These component units do not
issue separate component unit financial statements.
32
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CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
b. Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement of
activities) report information about the reporting government as a whole, except for its fiduciary
activities. All fiduciary activities are reported only in the fund financial statements. 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.
Certain eliminations have been made as prescribed by Governmental Accounting Standards Board
(GASB) Statement No. 34 in regards to interfund activities, payables and receivables. All internal
balances in the statement of net position have been eliminated except those representing balances
between the governmental activities and the business-type activity, which are presented as internal
balances and eliminated in the total primary government column. In the statement of activities,
inter-fund services have been eliminated; however, those transactions between governmental and
business-type activity have not been eliminated.
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
included among program revenues are reported instead as general revenues.
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 of self-balancing accounts that comprise its assets, deferred
outflows of resources, liabilities, deferred inflows of resources, 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 fund statements, even though excluded from the government-wide financial
statements, include financial information for private purpose trust funds, other post-employment
benefit trust fund, and custodial funds.
33
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
c. Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources measurement
focus and the accrual basis of accounting, as are the proprietary fund and fiduciary private purpose
trust fund (fiduciary custodial funds do not have a measurement focus) financial statements. Under
the economic resources measurement focus, all assets, deferred outflows of resources, liabilities,
and deferred inflows of resources (whether current or noncurrent) associated with their activity are
included on their statements of net position. Operating statements present increases (revenues) and
decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are
recorded when earned and expenses are recorded when a liability is incurred, regardless of the
timing of related cash flows.
Proprietary funds result from providing services and producing and delivering goods. Nonexchange
transactions, in which the City gives (or receives) value without directly receiving (or giving) 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.
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, current liabilities, and deferred inflows of
resources 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 fund balance. 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.
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 judgments,
and compensated absences, which are recognized as expenditures to the extent they have matured.
Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of
long-term liabilities are reported as other financing sources.
34
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
c. Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)
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.
The City’s fiduciary funds consist of a private purpose trust, other post-employment benefit
(OPEB) trust, and custodial funds which are reported using the economic resources measurement
focus.
All governmental activities, business-type activity and fund financial statements of the City follow
Governmental Accounting Standards Board (GASB) 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.
Fund Classifications
The funds designated as major funds are determined by a mathematical calculation. 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 American Rescue Plan Act (ARPA) Fund is used to account for monies received from the U.S
Treasury for COVID-19 related expenses.
The Housing Authority Fund is used to account for revenues and associated expenditures to be
used for increasing or improving low and moderate income housing.
The Park Acquisition and Development Fund is used to account for fees received from developers
to develop the City’s park system.
The City reports the following major proprietary fund:
The Water Enterprise Fund is used to account for the City’s water service operations to residents
and businesses.
The City’s fund structure also includes the following fund types:
35
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
c. Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)
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.
Capital Projects Funds are used to account for financial resources to be used for the acquisition or
construction of major capital facilities.
Fiduciary Funds
Private Purpose Trust Fund is used to account for the activities of the Successor Agency to the
Tustin Community Redevelopment Agency.
Other Post-Employment Benefit Trust Fund is used to account for the activities of the City’s trust
for the OPEB plan.
Custodial 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. The custodial funds are used to
account for taxes received for special assessment district debt for which the City is not obligated.
d. New Accounting Pronouncements
Current Year Standards
In June 2017, GASB issued Statement No. 87 – Leases. This statement requires recognition of
certain lease assets and liabilities for leases that previously were classified as operating leases and
recognized as inflows of resources or outflows of resources based on the payment provisions of the
contract. It establishes a single model for lease accounting based on the foundational principle that
leases are financings of the right to use an underlying asset for leases with a term of more than
12 months. Under this Statement, a lessee is required to recognize a lease liability and an
intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a
deferred inflow of resources, thereby enhancing the relevance and consistency of information
about governments’ leasing activities. For leases with a term of 12 months or less, lessees and
lessors should recognize short-term lease payments as outflows of resources or inflows of
resources, respectively, based on the payment provisions of the lease contract. The requirements of
this Statement are effective for reporting periods beginning after June 15, 2021, early application is
encouraged.
36
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
d. New Accounting Pronouncements (Continued)
Pending Accounting Standards
In May 2019, GASB issued Statement No. 91 – Conduit Debt Obligations. This Statement clarifies
existing definition of a conduit debt obligation; establishing that a conduit debt obligation is not a
liability of the issuer; establishing standards for accounting and financial reporting of additional
commitments and voluntary commitments extended by issuers and arrangements associated with
conduit debt obligations; and improving required note disclosures. The requirements of this
Statement are effective for reporting periods beginning after December 15, 2021, early application
is encouraged.
In May 2020, GASB issued Statement No. 96 – Subscription-Based Information Technology
Arrangements. This Statement provides guidance on the accounting and financial reporting for
subscription-based information technology arrangements (SBITAs) for government end users
(governments). This Statement (1) defines a SBITA; (2) establishes that a SBITA results in a right-
to-use subscription asset—an intangible asset—and a corresponding subscription liability; (3)
provides the capitalization criteria for outlays other than subscription payments, including
implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. The
requirements of this Statement are effective for fiscal years beginning after June 15, 2022, and all
reporting periods thereafter. Early application is encouraged. Assets and liabilities resulting from
SBITAs should be recognized and measured using the facts and circumstances that existed at the
beginning of the fiscal year in which this Statement is implemented.
In June 2022, GASB issued Statement No. 100 - Accounting Changes and Error Corrections – an
amendment of GASB Statement No. 62. This statement clarifies the existing definition of
accounting changes and requires enhancements accounting and financial reporting for accounting
changes and error corrections to provide more understandable, reliable, relevant, consistent and
comparable information.
In June 2022, GASB issued Statement No. 101 – Compensated Absences. This statement clarifies
the existing recognition and measurement guidance for compensated absences. This Statement
requires that liabilities for compensated absences be recognized for (1) leave that has not been used
and (2) leave that has been used but not yet paid in cash or settled through noncash means. A
liability should be recognized for leave that has not been used if (a) the leave is attributable to
services already rendered, (b) the leave accumulates, and (c) the leave is more likely than not to be
used for time off or otherwise paid in cash or settled through noncash means. Leave is attributable
to services already rendered when an employee has performed the services required to earn the
leave. Leave that accumulates is carried forward from the reporting period in which it is earned to
a future reporting period during which it may be used for time off or otherwise paid or settled.
37
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
d. New Accounting Pronouncements (Continued)
Pending Accounting Standards (Continued)
In estimating the leave that is more likely than not to be used or otherwise paid or settled, a
government should consider relevant factors such as employment policies related to compensated
absences and historical information about the use or payment of compensated absences. However,
leave that is more likely than not to be settled through conversion to defined benefit
postemployment benefits should not be included in a liability for compensated absences.
This Statement requires that a liability for certain types of compensated absences—including
parental leave, military leave, and jury duty leave—not be recognized until the leave commences.
This Statement also requires that a liability for specific types of compensated absences not be
recognized until the leave is used.
This Statement also establishes guidance for measuring a liability for leave that has not been used,
generally using an employee’s pay rate as of the date of the financial statements. A liability for
leave that has been used but not yet paid or settled should be measured at the amount of the cash
payment or noncash settlement to be made. Certain salary-related payments that are directly and
incrementally associated with payments for leave also should be included in the measurement of
the liabilities.
e. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Net
Position or Equity
Cash, Cash Equivalents and Investments
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 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.
38
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
e. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Net
Position or Equity (Continued)
Prepaids
The City uses the consumption method to record prepaid items.
Capital Assets
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 acquisition value at the date of contribution. Capital asset purchases (other than
infrastructure) in excess of $10,000 are capitalized if they have an expected useful life of five years
or more. Infrastructure assets with a cost exceeding $150,000 are capitalized.
Capital assets include additions to public domain (infrastructure), certain improvements including
pavement, curb and gutter, sidewalks, traffic control devices, streetlights, sewers, storm 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 position. The lives used for
depreciation purposes of each capital asset class generally are:
Buildings 5 - 40 years
Improvements other than buildings 5 - 40 years
Property and plant 5 - 40 years
Machinery and equipment 4 - 10 years
Infrastructure 25 - 75 years
Leased assets are defined as assets with an initial, individual cost of more than $10,000 and an
estimated useful life of at least one year. Such assets are recorded at the present value of the lease
liability. Leased assets are amortized using the straight-line method of each leases’ term.
39
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
e. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Net
Position or Equity (Continued)
Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position and the governmental funds balance sheet will
sometimes report a separate section for deferred outflows of resources. This separate financial
statement element, deferred outflows of resources, represent a consumption of net assets that
applies to future periods and so will not be recognized as an outflow of resources
(expense/expenditure) until that time.
The City has the following items that qualify for reporting in the deferred outflows of resources
category:
Deferred charge on refunding, net of accumulated amortization, reported in the
government-wide statement of net position, the proprietary fund and fiduciary funds
financial statements. A deferred charge on refunding results from the difference in the
carrying value of refunded debt and its reacquisition price. This amount is deferred and
amortized over the shorter of the life of the refunded or refunding debt.
Deferred outflow related to pensions resulting from employer contributions made after the
measurement date of the net pension liability. These amounts are recognized in the
subsequent fiscal year. Deferred outflow related to pensions for the changes in proportion
and differences between employer contributions and the proportionate share of
contributions, differences between expected and actual experience, and from changes of
assumptions. These amounts are amortized over a closed period equal to the average of the
expected remaining service lives of all employees that are provided with pensions through
the plans.
Deferred outflow related to OPEB plan resulting from the differences in projected and
actual earnings on investments of the OPEB plan fiduciary net position. These amounts are
amortized over five years. Deferred outflow related to changes in assumptions, and
differences between expected and actual experience. These amounts are amortized over a
closed period equal to the average of the expected remaining service lives of all employees
provided with OPEB.
In addition to liabilities, the statement of net position and the governmental funds balance sheet
will sometimes report a separate section for deferred inflows of resources. This separate financial
statement element, deferred inflows of resources, represent an acquisition of net assets that applies
to future periods and will not be recognized as an inflow of resources (revenue) until that time.
The City has the following items that qualify for reporting in this category:
40
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
e. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Net
Position or Equity (Continued)
Deferred Outflows/Inflows of Resources (Continued)
Deferred inflow from unavailable revenue, which arises only under a modified accrual
basis of accounting, is reported only in the governmental funds balance sheet. The
governmental funds report unavailable revenues from grants and rental. These amounts are
deferred and recognized as an inflow of resources in the period that the amounts become
available.
Deferred inflow related to pensions for the changes in proportion and differences between
employer contributions and the proportionate share of contributions. These amounts are
amortized over a closed period equal to the average of the expected remaining service lives
of all employees that are provided with pensions through the plans. Deferred inflow related
to pension plan resulting from the difference between projected and actual earnings on
investments of the pension plan fiduciary net positions. These amounts are amortized over
five years.
Deferred inflow related to pensions and OPEB for differences between expected and actual
experience. This amount is amortized over a closed period equal to the average of the
expected remaining service lives of all employees that are provided with pensions and
OPEB through the respective plans. Deferred inflow related to pensions and OPEB plan
resulting from changes in assumptions. These amounts are amortized over a closed period
equal to the average expected remaining service lives of all employees that are provided
with pensions and OPEB through the respective plans.
Deferred inflow related to future lease revenue which is recorded at present value at the
point of inception and is recognized over the life of each leases’ term.
Land Held for Resale
Land held for resale is carried at the lower of cost or estimated realizable value at fiscal year end.
Estimated realizable value is determined only upon the execution of a disposition and development
agreement. Land held for resale is recorded in the General Fund and the Water Enterprise Fund.
Property Taxes
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 formulas. The City accrues as revenues only those
taxes which are received within 60 days after year end in the fund financial statements.
41
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
e. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Net
Position or Equity (Continued)
Property Tax Calendar
Property taxes are assessed and collected each fiscal year according to the following property tax
calendar:
Lien date January 1st
Levy period July 1st to June 30th
Levy date On or before 4th Monday in September
Due date November 1st - 1st installment
February 1st - 2nd installment
Collection date December 10th - 1st installment
April 10th - 2nd installment
Interest and penalties are assessed after the collection date.
Compensated Absences
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. For governmental activities, compensated
absences are primarily liquidated from the general fund. Any additional accrued vacation and
compensatory time relating to governmental funds and amounts relating to the proprietary fund
type are included as long-term liabilities within the government-wide statement of net position.
Pensions
For purposes of measuring the net pension liability and deferred outflows/inflows of resources
related to pensions, and pension expense, information about the fiduciary net position of the City’s
California Public Employees’ Retirement System (CalPERS) plans (Plans) and additions
to/deductions from the Plans’ fiduciary net position have been determined on the same basis as
they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee
contributions) are recognized when due and payable in accordance with the benefit terms.
Investments are reported at fair value.
42
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
e. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Net
Position or Equity (Continued)
Post-Employment Benefits Other Than Pensions (OPEB)
For purposes of measuring the net OPEB liability and deferred outflows/inflows of resources
related to OPEB, and OPEB expense, information about the fiduciary net position of the City’s
OPEB Plan and additions to/deductions from the OPEB Plans’ fiduciary net position have been
determined on the same basis as they are reported by the Plan. For this purpose, the City’s OPEB
Plan recognizes benefit payments when due and payable in accordance with the benefit terms.
Investments are reported at fair value, except for money market investments that have a maturity at
the time of purchase of one year or less, which are reported at cost.
f. Use of Estimates
The preparation of financial statements in accordance with accounting principles generally
accepted in the United States of America requires management to make estimates and assumptions
that affect the reported amount of assets and liabilities and disclosure of contingent assets and
liabilities at the statement of net position date, and reported amounts of revenues and expenses
during the reporting period. Actual results may differ from those estimates.
NOTE 2 - CASH AND INVESTMENTS
Cash and Investments
Cash and investments as of June 30, 2022, are classified in the accompanying financial statements as
follows:
Government- Fiduciary
Wide Funds
Statement of Statement of
Net Position Net Position Total
Unrestricted assets:
Cash and investments 192,241,770$ 3,261,364$ 195,503,134$
Restricted assets:
Cash and investments 19,208,490 12,872,881 32,081,371
Cash and investments held by trust 8,327,240 2,736,132 11,063,372
Total cash and investments 219,777,500$ 18,870,377$ 238,647,877$
43
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 2 - CASH AND INVESTMENTS (CONTINUED)
Cash and Investments (Continued)
Cash and investments as of June 30, 2022, consist of the following:
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 or the funds within the
Pension Trust and OPEB Trust that are governed by the agreement between the City and the trustee,
rather than the general provisions of the California Government Code or the City’s investment policy.
Ca sh on hand 8,284$
Deposits with financial institutions 6,986,008
Investments 231,653,585
Total cash and investments 238,647,877$
Maximum
Maturity
Maximum
P ercentage
of P ortfolio
Maximum
Investment in
One Issuer
Negotiable certificates of deposit 5 years 30%5%
Commercial paper 270 days 30%5%
Local Agency Investment Pool (LAIF)N/A None
Max permitted
by State
Treasurer
Orange County Investment Pool (OCIP)N/A None
Max permitted
by County
Treasurer
Bankers acceptances 180 days 30%5%
Medium-term notes 5 years 30%5%
Municipal and state securities 5 years 30%5%
Federal agency bonds or notes 5 years None 50%
United States (U.S.) Treasury securities 5 years None None
Money market mutual funds N/A 20%10%
Mortgage pass-through securities 5 years 20%10%
Repurchase agreements 1 year 30%5%
Supranationals 5 years 5%5%
Shares of beneficial interest by a JPA 5 years None 50%
N/A - Not Applicable
Investment Types
Authorized by the City's Policy
44
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 2 - CASH AND INVESTMENTS (CONTINUED)
Investments Authorized by Debt Agreements
Investment of debt proceeds held by bond trustees 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 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.
Maximum
Maturity
Maximum
Percentage
of Portfolio
Maximum
Investment in
One Issuer
U.S Treasury Obligations None None None
U.S Government Sponsored
Agency Securities N/A None None
Banker's Acceptances 270 days None None
Commercial Paper 180 days None None
Money Market Mutual Funds N/A None None
Investment Contracts 30 years None None
Certificates of Deposit None None None
Corporate Notes None None None
Repurchase Agreements None None None
N/A - Not Applicable
Investment Types
Authorized by Debt Agreements
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of
an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair
value to changes in market interest rates. One of the ways that the City manages its exposure to interest
rate risk is by purchasing a combination of shorter term and longer term investments and by timing
cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity
evenly over time as necessary to provide the cash flow and liquidity needed for operations.
45
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 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 trustees) to market interest rate fluctuations is provided by the following table that shows
the distribution of the City’s investments by maturity:
12 Months or 12 to 24 25 - 60
less Months Months Total
U.S. Treasury Notes 31,117,456$ 8,378,594$ 9,745,006$ 49,241,056$
U.S. Government Sponsored
Agency Securities:
Federal National Mortgage
Association (FNMA)- - 1,857,020 1,857,020
Federal Home Loan Bank (FHLB)- 1,233,875 - 1,233,875
Federal Home Loan Mortgage
Corporation (FHLMC)2,000,698 - 998,705 2,999,403
Local Agency Investment Pool (LAIF)86,703,131 - - 86,703,131
California Asset Management Program (CAMP) 14,752,255 - - 14,752,255
Negotiable Certificates of Deposit 5,122,646 245,204 223,200 5,591,050
Commercial Paper 9,953,421 9,953,421
Medium-term Notes 3,498,657 1,002,411 27,220,404 31,721,472
Municipal Bonds 1,000,753 - - 1,000,753
Held by Fiscal Agents:
Money Market Mutual Funds 15,536,777 - - 15,536,777
Held by Pension Trust:
Money Market Mutual Funds 497,383 - - 497,383
Mutual Funds - Equity 3,966,459 - - 3,966,459
Mutual Funds - Fixed Income 3,863,398 - - 3,863,398
Held by OPEB Trust:
Money Market Mutual Funds 163,540 - - 163,540
Mutual Funds - Equity 1,303,215 - - 1,303,215
Mutual Funds - Fixed Income 1,269,377 - - 1,269,377
Total 180,749,166$ 10,860,084$ 40,044,335$ 231,653,585$
Investment Type
46
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 2 - CASH AND INVESTMENTS (CONTINUED)
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the
holder of the investment. This is measured by the assignment of a rating by a nationally recognized
statistical rating organization. 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 &
Poor’s actual rating as of year end for each investment type.
Minimum
Total as of Required Not
June 30, 2022 Rating AAA AA A A-1 Rated
U.S. Treasury Notes 49,241,056$ N/A -$ 49,241,056$ -$ -$ -$
U.S. Government Sponsored
Agency Securities:
FNMA 1,857,020 N/A - 1,857,020 - - -
FHLB 1,233,875 N/A - 1,233,875 - - -
FHLMC 2,999,403 N/A - 2,000,698 - - 998,705
LAIF 86,703,131 N/A - - - - 86,703,131
CAMP 14,752,255 N/A 14,752,255 - - - -
Negotiable Certificates of Deposit 5,591,050 N/A - - - 2,395,111 3,195,939
Commercial Paper 9,953,421 A-1 - - 9,953,421 -
Medium-term Notes 31,721,472 A - 5,592,105 26,129,367 - -
Municipal Bonds 1,000,753 N/A - 750,713 250,040 - -
Held by Fiscal Agents:
Money Market Mutual Funds 15,536,777 AAA 15,536,777 - - - -
Held by Pension Trust:
Money Market Mutual Funds 497,383 N/A 497,383 - - - -
Mutual Funds - Equity 3,966,459 N/A - - - - 3,966,459
Mutual Funds - Fixed Income 3,863,398 N/A - - - - 3,863,398
Held by OPEB Trust:
Money Market Mutual Funds 163,540 N/A 163,540 - - - -
Mutual Funds - Equity 1,303,215 N/A - - - - 1,303,215
Mutual Funds - Fixed Income 1,269,377 N/A - - - - 1,269,377
Total 231,653,585$ 30,949,955$ 60,675,467$ 26,379,407$ 12,348,532$ 101,300,224$
Investment Type
47
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 2 - CASH AND INVESTMENTS (CONTINUED)
Concentration of Credit Risk
The City did not have investments in any one issuer that represent 5% or more of total City’s
investments other than for LAIF, CAMP, U.S. Treasury notes, and money market mutual funds.
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial
institution, an investor 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, an investor
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, 2022, none of the City’s deposits with financial institutions in excess of federal
depository insurance limits were held in uncollateralized accounts.
48
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 2 - CASH AND INVESTMENTS (CONTINUED)
Investment 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 amortized cost basis.
The California Local Agency Investment Fund is not insured or collateralized. The Fund is subject to
regulatory oversight by the State of California Treasurer, although it is not registered with the SEC.
Deposits and withdrawals to and from LAIF are made on the basis of $1 and not at fair value.
Accordingly, under the fair value hierarchy, the investment with LAIF is uncategorized.
Investment in California Asset Management Program (CAMP)
The City is a voluntary participant in the California Asset Management Program (CAMP) that is
regulated by the California Government Code. 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 CAMP for the entire CAMP portfolio (in relation to the amortized cost of
that portfolio). The balance available for withdrawal is based on the accounting records maintained by
CAMP, which are recorded on an amortized cost basis.
49
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 2 - CASH AND INVESTMENTS (CONTINUED)
Investments in Pension and OPEB Trusts
The City established a trust account with Public Agency Retirement Services (PARS) to hold assets
that are legally restricted for use in administering the City’s pension and OPEB plans. The Pension and
OPEB Trusts’ specific cash and investments are managed by a third-party portfolio manager under
guidelines approved by the City. Those guidelines are as follows:
Risk Tolerance Moderate
Risk Management The portfolio is constructed to control risk
through four layers of diversification - asset
classes (cash, fixed income, equity), investment
styles (large cap, small cap, international, value,
growth), managers and securities. Disciplined
mutual fund selection and monitoring process
helps to drive return potential while reducing
portfolio risk.
Investment Objective To provide growth of principal and income. It is
expected that dividend and interest income will
comprise a significant portion of total return,
although growth through capital appreciation is
equally important.
Strategic Ranges 0% - 20% Cash
40% - 60% Fixed Income
40% - 60% Equity
50
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 2 - CASH AND INVESTMENTS (CONTINUED)
Fair Value Measurements
The City categorizes its fair value measurement within the fair value hierarchy established by generally
accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair
value of the assets. Level 1 inputs are quoted prices in active markets for identical assets, Level 2
inputs are quoted prices of similar assets in active markets, and Level 3 inputs are significant
unobservable inputs.
The City has the following recurring fair value measurements as of June 30, 2022:
Quoted Observable Unobservable
Prices Inputs Inputs
Level 1 Level 2 Level 3 Total
U.S. Treasury Notes -$ 49,241,056$ -$ 49,241,056$
U.S. Government Sponsored
Agency Securities:
FNMA - 1,857,020 - 1,857,020
FHLB - 1,233,875 - 1,233,875
FHLMC - 2,999,403 - 2,999,403
Negotiable Certificates of Deposit - 5,591,050 - 5,591,050
Commercial Paper - 9,953,421 - 9,953,421
Medium-term Notes - 31,721,472 - 31,721,472
Municipal Bonds - 1,000,753 - 1,000,753
Held by Pension Trust:
Mutual Funds - Equity 3,966,459 - - 3,966,459
Mutual Funds - Fixed Income 3,863,398 - - 3,863,398
Held by OPEB Trust:
Mutual Funds - Equity 1,303,215 - - 1,303,215
Mutual Funds - Fixed Income 1,269,377 - - 1,269,377
Total Leveled Investments 10,402,449$ 103,598,050$ -$ 114,000,499
LAIF*86,703,131
CAMP*14,752,255
Money Market Mutual Funds*:
Held by Fiscal Agents 15,536,777
Held by Pension Trust 497,383
Held by OPEB Trust 163,540
Total Investment Portfolio 231,653,585$
* Not subject to fair value measurement hierarchy.
51
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 3 - LOANS RECEIVABLE
Multi-Family Development Loan: A bridge loan was provided to a senior apartment developer to assist
in the development of 53 affordable rental units. The total outstanding balance as of June 30, 2022,
including accrued interest of $16,108 was $366,108.
Home Improvement Loans: Home improvement loans were provided 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, 2022, was $23,095. An allowance of $23,095 has been recorded to reflect the amount of
the loans not expected to be collectible.
Orange County Rescue Mission: On February 10, 2015, the City entered into an agreement with the
Orange County Rescue Mission (OCRM), whereby the City agreed to convey two residential buildings
to the OCRM to be used for housing for homeless veterans. In exchange, the OCRM executed a
promissory note to the City in the amount of $533,000. The note is payable after 30 years with 3%
interest. For every year that the OCRM uses the property for homeless veterans housing, the
promissory note and any accrued interest will be forgiven by 1/30th. Should the OCRM successfully
utilize the properties for homeless veterans housing for all 30 years in which the note is in effect, as
stipulated in the deed of trust, it will owe no money to the City. The total outstanding balance at
June 30, 2022, including accrued interest of $47,609, was $456,242. An allowance of $456,242 has
been recorded to reflect the amount of the note not expected to be collectible.
Boys’ and Girls’ Club Roof Loan: On January 7, 2019, the City executed a promissory note with the
Boys’ and Girls’ Club of Tustin (the Club) in the amount of $86,000 to assist in roof replacements of
the Club’s facility. The loan is payable over 15 years at 2% interest per annum with annual
installments of principal and interest in the amount of $6,693 commencing on January 11, 2021. The
total outstanding balance at June 30, 2022, including accrued interest of $659, was $71,440.
Affordable Housing Loans: The City executed promissory notes with approximately 279 affordable
home buyers to facilitate the preservation of the City’s affordable housing supply. The entire unpaid
principal amount and accrued interest is due 45 years from the date of the initial sale of the unit to a
member of the home-buying public. No prepayment of the note in whole, or in part, is allowed any
time prior to the maturity date. Additionally, 95% of the loan is forgivable, should the owner comply
with the Affordable Housing Covenant as of the maturity date. As of June 30, 2022 the total
outstanding principal balance was $91,932,786. An allowance of $87,336,147 has been recorded to
reflect the amount of the note not expected to be collectible.
Family Promise Loan: On February 18, 2020, the Housing Authority entered into an agreement with
Family Promise of Orange County, whereby the City agreed to convey real property for the
development of transitional housing units for homeless families. In exchange, Family Promise
executed a promissory note to the City in the amount of $1,000,000 on May 12, 2022. The note is
payable after 30 years with 3% interest. For each year that Family Promise complies with all
applicable terms, conditions, and covenants of the agreement, 1/30 of both principal and interest shall
be forgiven. The total outstanding balance at June 30, 2022, including accrued interest of $3,534, was
$1,003,534. An allowance of $1,003,534 has been recorded to reflect the amount of the note not
52
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 3 - LOANS RECEIVABLE (CONTINUED)
An allowance of $1,003,534 has been recorded to reflect the amount of the note not expected to be
collectible.
NOTE 4 - INTERFUND TRANSFERS
The composition of interfund transfers for the year ended June 30, 2022, is as follows:
The transfers during the fiscal year ended June 30, 2022, were for the following purposes:
ARPA fund transferred to the General Fund $3,400,000 for revenue replacement intended to cover
public safety salaries.
Water Fund transferred to the General Fund $108,532 for the purchase of a skid and trailer.
Other governmental fund (Special Tax B Special Revenue Fund) transferred $4,617,930 to the General
Fund for eligible Special Tax B area expenditures.
Other governmental fund (Measure M Special Revenue Fund) transferred $1,855,628 to the General
Fund for eligible Measure M expenditures.
Other governmental fund (Supplemental Law Enforcement Special Revenue Fund) transferred $46,443
to the General Fund for eligible public safety expenditures.
General Fund transferred to other governmental fund (Capital Projects Fund) $2,358,888 for capital
and maintenance expenditures.
Other governmental fund (Measure M Special Revenue Fund) transferred $62,712 to Other
Governmental Funds (Capital Projects Fund) for eligible construction expenditures.
Other governmental fund (Measure M Special Revenue Fund) transferred $44,871 to Other
Governmental Funds (Gas Tax Special Revenue Fund) for eligible construction expenditures.
Transfers In Amount
General Fund ARPA Fund 3,400,000$
General Fund Water Fund 108,532
General Fund Other Governmental Funds 6,520,001
Other Governmental Funds General Fund 2,358,888
Other Governmental Funds Other Governmental Funds 107,583
12,495,004$
Transfers Out
53
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 5 - LAND HELD FOR RESALE
Land held for resale as of June 30, 2022, consisted of the following:
Water Enterprise
General Fund Fund Total
Pacific Center East*30,380,902$ -$ 30,380,902$
Tustin Legacy 72,076,871 - 72,076,871
2061 Valhalla Drive - 1,957,602 1,957,602
11781 Outlook Lane - 1,806,197 1,806,197
Total Land Held for Resale 102,457,773$ 3,763,799$ 106,221,572$ *Pacific Center East includes several parcels bordered by Del Amo, Valencia, Edinger and Newport Avenue.
NOTE 6 - 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 Government 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.
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 I, (consisting of approximately 977 acres), was conveyed to the City on May 14, 2002. 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 II (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. The land parcels were recorded at their estimated fair values at the dates of conveyance.
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.
54
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 6 - LAND TRANSFER FROM THE UNITED STATES GOVERNMENT (CONTINUED)
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.
On May 21, 2013, the City Council approved a General Plan Amendment, MCAS Tustin Specific Plan
Amendment, Development Agreement, and Agreement for Exchange of Real Property with the
SOCCCD. The Exchange Agreement delineates the terms and processes associated with the exchange
of the ultimate ownership of approximately 89 acres of land within Planning Area 1 of Tustin Legacy.
The City of Irvine has identified concerns about that project’s traffic impacts in Irvine, and about the
traffic analysis of projects in the MCAS Tustin Specific Plan area generally. In July 2013, the City
entered into a settlement agreement with the City of Irvine which allowed the City to proceed with the
Exchange Agreement. The transfer of the parcels occurred August 2014 and was considered an even
exchange.
The City also entered into a separate agreement with the SOCCCD in July 2014 to acquire the
Valencia Parcels, approximately 5 acres of land, for $1,083,220 less a demolition credit of $500,000.
In August 2014, the City sold 74 acres of the land to a developer for $56,000,000 resulting in a gain on
land held for resale of $40,143,447.
In February 2015, the City entered into an Exchange Agreement with the United States of America
Department of Army. The Exchange Agreement delineates the terms associated with the exchange of
the ultimate ownership of approximately 15 acres of usable land and improvements. The transfer of
the property occurred in April 2015 and was determined to be of equivalent value.
In fiscal year 2015-16, the City reclassified 279 acres of the land held for resale related to the land
transfer from the United States Government to land to be used for government purposes. The
reclassification was for land to be given to another governmental agency and to be used for parks and
roads. In addition, the Valencia Parcels (about 5 acres) were reclassified due to a change in the
intended use of the property. As a result, land held for resale was reduced by $64,002,073 in the
General Fund and is reported as land in the government-wide statement of net position.
In July 2016, the City sold 20.96 acres of the land to a developer for $8,300,000 resulting in a gain on
land held for resale of $3,808,739.
55
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 6 - LAND TRANSFER FROM THE UNITED STATES GOVERNMENT (CONTINUED)
In June 2017, the City sold 17.54 acres of land to a developer for $18,292,602 resulting in a gain on
land held for resale of $14,533,528.
In June 2018, the City sold 14.48 acres of land to a developer for $34,202,712 resulting in a gain on
land held for resale of $31,100,613.
In September 2021, the City sold 25.44 acres of land to a developer for $61,500,000 resulting in a gain
on land held for resale of $56,048,775.
Additionally, in September of 2021 the City of Tustin took title to approximately 7.93 acres of
property at the Tustin Legacy, which was former Lease in Furtherance of Conveyance (LIFOC)
property. The property consists of Carveout 2 (6.23 acres) and Carveout 9 (1.7 acres). In May 2022,
4.74 acres associated with Carveout 2 was sold to a land developer for $1,784,115. An additional 1.49
acres of Carveout 2 and 0.14 acres of Carveout 9 were reclassified by the City out of land held for
resale to appropriately record the assets as rights-of-way. The remaining 1.56 acres from Carveout 9
remains in land held for resale at a value of $587,177.
The recorded value of the remaining conveyed parcels as of June 30, 2022, was $72,076,871. The
value of the parcels was recorded at estimated value at the time of conveyance. The remaining property
not sold will be park space or conveyed to other governmental agencies.
NOTE 7 – LEASES RECIEVABLE
The City is a lessor in 20 noncancellable leases for use of City land and buildings. The leases are
required to make fixed monthly payments ranging from $500 to $43,680 per month. The City
recognized $1,629,809 in lease revenue and $110,729 in interest revenue during the current fiscal year
related to these agreements. As of June 30, 2022, the lease receivable is $7,326,268 and deferred
inflows of resources is $7,148,431. A schedule of future payments is included below:
June 30, Principal Interest Total
2023 1,582,963$ 115,966$ 1,698,929$
2024 544,844 105,272 650,116
2025 528,314 97,515 625,829
2026 457,486 89,218 546,704
2027 361,293 82,333 443,626
2028 - 2032 2,021,432 299,586 2,321,018
2033 - 2037 1,300,579 122,347 1,422,926
2038 - 2041 529,357 20,198 549,555
Totals 7,326,268$ 932,435$ 8,258,703$
56
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 8 - CAPITAL ASSETS
A summary of changes in the Governmental Activities capital assets for the year ended June 30, 2022,
is as follows:
Balance at Balance at
June 30, 2021 * Additions Deletions June 30, 2022
Capital assets, not depreciated:
Land 105,574,634$ -$ (320,000)$ 105,254,634$
Right of way 43,758,156 2,168,525 - 45,926,681
Construction in progress 13,296,941 8,270,964 (8,839,919) 12,727,986
Total capital assets,
not depreciated 162,629,731 10,439,489 (9,159,919) 163,909,301
Capital assets, being depreciated:
Buildings 86,851,180 - (137,289) 86,713,891
Improvements other than buildings 71,703,698 1,217,162 (33,797) 72,887,063
Machinery and equipment 21,770,933 1,634,178 (4,737,841) 18,667,270
Infrastructure 412,116,946 1,822,900 (305,480) 413,634,366
Leased assets 695,893 - (46,761) 649,132
Total capital assets,
being depreciated 593,138,650 4,674,240 (5,261,168) 592,551,722
Less accumulated depreciation for:
Buildings (24,498,723) (1,729,978) 122,177 (26,106,524)
Improvements other than buildings (13,314,871) (3,588,742) 33,797 (16,869,816)
Machinery and equipment (16,682,241) (1,391,415) 4,781,154 (13,292,502)
Infrastructure (150,120,897) (7,674,187) 133,830 (157,661,254)
Leased assets - (129,203) - (129,203)
Total accumulated
depreciation (204,616,732) (14,513,525) 5,070,958 (214,059,299)
Total capital assets,
being depreciated, net 388,521,918 (9,839,285) (190,210) 378,492,423
Total governmental activities
capital assets, net 551,151,649$ 600,204$ (9,350,129)$ 542,401,724$ * - Balance at June 30, 2021 has been restated to implement GASB Statement No. 87.
Construction in progress deletion included $4,216,313 of write offs due to decisions to not move
forward with certain construction projects.
57
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 8 - CAPITAL ASSETS (CONTINUED)
Depreciation expense was charged to functions/programs of the governmental activities as follows:
General Government 1,764,086$
Public Safety 631,657
Public Works 9,937,878
Community Services 2,179,904
Total 14,513,525$
A summary of changes in the Business-type Activity capital assets for the year ended June 30, 2022, is
as follows:
Balance at Balance at
June 30, 2021 Additions Deletions June 30, 2022
Capital assets, not depreciated:
Land 1,177,216$ -$ -$ 1,177,216$
Construction in progress 13,921,725 6,414,084 (17,816,578) 2,519,231
Total capital assets,
not depreciated 15,098,941 6,414,084 (17,816,578) 3,696,447
Capital assets, being depreciated:
Buildings and improvements 16,498,710 - - 16,498,710
Property, plant and equipment 66,468,205 17,431,636 (435,041) 83,464,800
Total capital assets,
being depreciated 82,966,915 17,431,636 (435,041) 99,963,510
Less accumulated depreciation for:
Buildings and improvements (6,314,802) (345,346) - (6,660,148)
Property, plant and equipment (31,027,917) (1,826,261) 435,041 (32,419,137)
Total accumulated
depreciation (37,342,719) (2,171,607) 435,041 (39,079,285)
Total capital assets,
being depreciated, net 45,624,196 15,260,029 - 60,884,225
Total business-type activity
capital assets, net 60,723,137$ 21,674,113$ (17,816,578)$ 64,580,672$
Construction in progress deletions included $384,943 of write offs due to decisions to not move
forward with certain construction projects.
58
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 9 - LONG-TERM LIABILITIES
A summary of long-term liability activity for the year ended June 30, 2022, is as follows:
Balance Balance Due Within
July 1, 2021 * Additions Deletions June 30, 2022 One Year
Governmental Activities:
Claims and judgments 9,303,222$ 2,132,017$ (1,006,669)$ 10,428,570$ 1,275,135$
Lease payable 695,893 - (131,364) 564,529 132,598
Compensated absences 4,474,512 3,773,471 (3,290,777) 4,957,206 3,717,905
Total governmental activities
long-term liabilities 14,473,627$ 5,905,488$ (4,428,810)$ 15,950,305$ 5,125,638$
Business-type Activities:
2012 Refunding
Water Revenue Bonds 1,880,000$ -$ (920,000)$ 960,000$ 960,000$
Bond premium 143,074 - (81,757) 61,317 61,317
2016 Water Refunding
Revenue Bonds 21,515,000 - - 21,515,000 -
Bond premium 1,065,247 - (52,604) 1,012,643 52,604
2020 Taxable Water
Refunding Revenue Bonds 14,745,000 - (205,000) 14,540,000 205,000
Compensated absences 332,930 325,137 (285,338) 372,729 279,547
Total business-type activity
long-term liabilities 39,681,251$ 325,137$ (1,544,699)$ 38,461,689$ 1,558,468$
* - Balance at June 30, 2021 has been restated to implement GASB Statement No. 87.
Governmental Activities
Lease Payable
The City has entered into nine leases as a lessee for facilities, vehicles and equipment and is required
to make principal and interest payments ranging from $485 to $3,844 over the lease terms. The lease
liability at June 30, 2022, was $564,529. The future principal and interest lease payments as of June
30, 2022, were as follows:
June 30,Principal Interest Total
2023 132,598$ 24,494$ 157,092$
2024 173,403 18,044 191,447
2025 117,045 8,430 125,475
2026 106,004 4,539 110,543
2027 35,479 939 36,418
Totals 564,529$ 56,446$ 620,975$
59
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 9 - LONG-TERM LIABILITIES (CONTINUED)
Business-type Activity
2012 Refunding Water Revenue Bonds
On March 27, 2012, the City issued $8,910,000, 2012 Refunding Water Revenue Bonds. The Bonds
were issued to provide funds to defease the 2003 Refunding Water Revenue Bonds and prepay certain
outstanding notes payable incurred to finance improvements to the Water Enterprise. The 2003
Refunding Water Revenue Bonds were redeemed in full on April 1, 2013.
The Bonds are payable in annual installments ranging from $710,000 to $960,000 until maturity on
April 1, 2023. Interest is payable semiannually on April 1 and October 1, with rates ranging from 2.0%
to 4.0% per annum.
The defeasance resulted in a difference between the reacquisition price and the net carrying amount of
the old debt of $594,664. The difference reported in the accompanying statements as a deferred
outflow of resources, is being charged to interest expense through 2023. The remaining balance at
June 30, 2022, is $40,545.
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 yield net
revenues, at least equal to 120% of the annual debt service on the bonds. At June 30, 2022, total
interest and principal remaining on the bonds is $998,400. During the fiscal year, the total interest
expense incurred was $75,200, principal payments were $920,000, and net revenues were $3,258,708.
The annual debt service requirements to amortize the bonds are as follows:
June 30,Principal Interest Total
2023 960,000$ 38,400$ 998,400$
Add: Premium 61,317 - 61,317
Totals 1,021,317$ 38,400$ 1,059,717$
60
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 9 - LONG-TERM LIABILITIES (CONTINUED)
Business-type Activity (Continued)
2016 Refunding Water Revenue Bonds
On September 28, 2016, the City issued $21,515,000, 2016 Water Refunding Revenue Bonds. The
Bonds were issued to provide funds to defease the 2011 Water Revenue Bonds and pay the costs of
issuing the bonds. The 2016 Water Refunding Revenue Bonds proceeds were invested in an escrow
fund with a trustee to pay interest on the 2011 Water Revenue Bonds until April 1, 2021 and to redeem
all 2011 Bonds in full on April 1, 2021.
The Bonds are payable in annual installments ranging from $905,000 to $1,540,000 until maturity on
April 1, 2041. Interest is payable semiannually on April 1 and October 1, with rates ranging from 2.0%
to 4.0% per annum.
The defeasance resulted in a difference between the reacquisition price and the net carrying amount of
the old debt of $3,273,764. The difference reported in the accompanying statements as a deferred
outflow of resources, is being charged to interest expense through 2041. The remaining balance at
June 30, 2022, is $2,520,798.
The City has pledged net revenues received from the operation of the 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 yield net
revenues, at least equal to 120% of the annual debt service on the bonds. At June 30, 2022, total
interest and principal remaining on the bonds is $29,329,693. During the fiscal year, the total interest
expense incurred was $687,300, no principal payment was due, and net revenues were $3,258,708.
61
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 9 - LONG-TERM LIABILITIES (CONTINUED)
Business-type Activity (Continued)
2016 Water Refunding Revenue Bonds (Continued)
The annual debt service requirements to amortize the bonds are as follows:
June 30,Principal Interest Total
2023 -$ 687,300$ 687,300$
2024 905,000 687,300 1,592,300
2025 925,000 669,200 1,594,200
2026 950,000 645,450 1,595,450
2027 975,000 615,450 1,590,450
2028 - 2032 5,390,000 2,565,563 7,955,563
2033 - 2037 6,455,000 1,494,850 7,949,850
2038 - 2041 5,915,000 449,850 6,364,850
Subtotals 21,515,000 7,814,963 29,329,963
Add: Premium 1,012,643 - 1,012,643
Totals 22,527,643$ 7,814,963$ 30,342,606$
2020 Taxable Water Refunding Revenue Bonds
On February 11, 2020, the City issued $14,910,000, Taxable Water Refunding Revenue Bonds, Series
2020. The Bonds were issued to provide funds to defease the 2013 Water Revenue Bonds and pay the
costs of issuing the bonds. The 2020 Bonds proceeds were invested in an escrow fund with a trustee to
pay interest and principal on the 2013 Bonds until April 1, 2022 and to redeem all 2013 Bonds in full
on April 1, 2022.
The City refunded the 2013 Bonds to reduce its total debt services payments over 23 years by
$3,101,131 and to obtain an economic gain (difference between the present values of the old and new
debt) of $2,160,323.
The Bonds are payable in annual installments ranging from $609,834 to $2,429,165 until maturity on
April 1, 2043. Interest is payable semiannually on April 1 and October 1, with rates ranging from
1.567% to 3.107% per annum.
The defeasance resulted in a difference between the reacquisition price and the net carrying amount of
the old debt of $773,237. The difference reported in the accompanying statements as a deferred
outflow of resources, is being charged to interest expense through 2043. The remaining balance at
June 30, 2022, is $694,793.
62
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 9 - LONG-TERM LIABILITIES (CONTINUED)
Business-type Activity (Continued)
2020 Taxable Water Refunding Revenue Bonds
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 yield net
revenues, at least equal to 120% of the annual debt service on the bonds. At June 30, 2022, total
interest and principal remaining on the bonds is $20,567,224. During the fiscal year, the total interest
expense incurred was $403,862, principal payments were $205,000, and net revenues were $3,258,708.
The annual debt service requirements to amortize the bonds are as follows:
NOTE 10 - PENSION PLANS
a. General Information about the Pension Plans
Plan Descriptions
All qualified permanent and probationary employees are eligible to participate in the City’s
separate Safety (police) and Miscellaneous (all other) Plans. The Miscellaneous Plan is an agent
multiple-employer defined benefit pension plan, and the Safety Plan is a cost-sharing multiple
employer defined benefit pension plan. Both of these Plans are administered by the California
Public Employees’ Retirement System (CalPERS), which acts as a common investment and
administrative agent for its participating member employers. Benefit provisions under the Plans are
established by State statute and City resolution. CalPERS issues publicly available reports that
include a full description of the pension plans regarding benefit provisions, assumptions and
membership information that can be found on the CalPERS website.
June 30,Principal Interest Total
2023 205,000$ 400,608$ 605,608$
2024 440,000 397,240 837,240
2025 445,000 389,721 834,721
2026 450,000 381,760 831,760
2027 465,000 373,169 838,169
2028-2032 2,485,000 1,711,449 4,196,449
2033-2037 2,830,000 1,375,464 4,205,464
2038-2042 4,865,000 924,643 5,789,643
2043 2,355,000 73,170 2,428,170
Totals 14,540,000$ 6,027,224$ 20,567,224$
63
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 10 - PENSION PLANS (CONTINUED)
a. General Information about the Pension Plans (Continued)
Benefits Provided
CalPERS provides service retirement and disability retirement benefits, annual cost of living
adjustments and death benefits to plan members, who must be public employees or their
beneficiaries. Benefits are based on three factors: service credit (up to one year of service per
fiscal year), benefit factor (based on plan and age at retirement), and final compensation (highest
pensionable compensation for a consecutive 12 or 36 month period, depending on plan). Members
with five years of total service are eligible to retire at age 50 to 62 with statutorily reduced benefits.
Members of all but one plan available to employees are eligible to retire upon reaching age 50 and
attaining 5 years of service credit. PEPRA Miscellaneous members (membership date on or after
January 1, 2013) are eligible to retire upon reaching age 52 and attaining 5 years of service. All
members are eligible for non-duty disability retirement benefits after 5 years of service. Safety
members are eligible for industrial disability retirement benefits, regardless of age or years of
service, if they are determined to be industrially disabled within the meaning of the retirement law.
The survivors of members are eligible for the Basic Death Benefit, the 1957 Survivor Benefit,
and/or the 1959 Survivor Benefit. The survivors of Safety members who die prior to retirement are
also eligible for the Pre-Retirement Option 2W Death Benefit and, if the member is actively
employed and dies in the course of duty, the Special Death Benefit. Each plan provides retirees
with a cost-of-living adjustment of up to 2% per year.
The information below includes the aggregate total pension plan related items:
Miscellaneous Safety Total
Net pension liability (12,549,188)$ (23,278,195)$ (35,827,383)$
Deferred outflows of
resources - pension 5,885,338 11,705,089 17,590,427
Deferred inflows of
resources - pension (11,942,608) (16,522,163) (28,464,771)
Pension expense 318,421 1,417,924 1,736,345
64
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 10 - PENSION PLANS (CONTINUED)
a. General Information about the Pension Plans (Continued)
Benefits Provided (Continued)
The Plans’ provisions and benefits in effect at the measurement date ended June 30, 2021, are
summarized as follows:
Prior to January 1, 2012 to On or After
Hire date January 1, 2012 December 31, 2012 January 1, 2013
Benefit formula 2%@55 2%@60 2%@62
Benefit vesting schedule 5 years of service 5 years of service 5 years of service
Benefit payments monthly for life monthly for life monthly for life
Retirement age 50+50+52+
Monthly benefits, as a % of
eligible compensation 2.00%2.00%2.00%
Required employee contribution rates 10.00%10.00%6.25%
Required employer contribution rates
Normal cost rate
Payment of unfunded liability
Miscellaneous
$2,250,935
9.30%
The Plans’ provisions and benefits in effect at the measurement date ended June 30, 2021, are
summarized as follows:
Prior to January 1, 2012 to On or After
Hire date January 1, 2012 December 31, 2012 January 1, 2013
Benefit formula 3%@50 2%@50 2.7%@57
Benefit vesting schedule 5 years of service 5 years of service 5 years of service
Benefit payments monthly for life monthly for life monthly for life
Retirement age 50+50+50+
Monthly benefits, as a % of
eligible compensation 3.00%2.00%2.70%
Required employee contribution rates 12.00%12.00%13.00%
Required employer contribution rates:
Normal cost rate 23.71%18.19%13.13%
Payment of unfunded liability 3,060,005$ 10,899$ 23,734$
Safety
65
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 10 - PENSION PLANS (CONTINUED)
a. General Information about the Pension Plans (Continued)
Employees Covered
At the measurement date ended June 30, 2021, the following employees were covered by the
benefit terms for the Miscellaneous Plan:
Miscellaneous
Inactive employees or beneficiaries currently receiving benefits 286
Inactive employees entitled to but not yet receiving benefits 304
Active employees 213
Total 803
Contributions
Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer
contribution rates for all public employers are determined on an annual basis by the actuary and
shall be effective on the July 1 following notice of a change in the rate. The total plan contributions
are determined through CalPERS’ annual actuarial valuation process. The actuarially determined
rate is the estimated amount necessary to finance the costs of benefits earned by employees during
the year, with an additional amount to finance any unfunded accrued liability. The City is required
to contribute the difference between the actuarially determined rate and the contribution rate of
employees. City contribution rates may change if plan contracts are amended. Payments made by
the employer to satisfy contribution requirements that are identified by the pension plan terms as
plan member contributions requirements are classified as plan member contributions. The liability
for governmental activities is primarily liquidated from the general fund and the liability for
business-type activities is liquidated from the water enterprise fund.
b. Net Pension Liability
The City’s net pension liability for each Plan is measured as the total pension liability, less the
pension plan’s fiduciary net position. The net pension liability of each of the Plans is measured as
of June 30, 2021, using an annual actuarial valuation as of June 30, 2020 rolled forward to June 30,
2021 using standard update procedures. A summary of principal assumptions and methods used to
determine the net pension liability is shown below.
66
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 10 - PENSION PLANS (CONTINUED)
b. Net Pension Liability (Continued)
Actuarial Assumptions
The total pension liabilities in the June 30, 2021 actuarial valuations were determined using the
following actuarial assumptions:
Miscellaneous Safety
Valuation Date June 30, 2020 June 30, 2020
Measurement Date June 30, 2021 June 30, 2021
Actuarial Cost Method Entry-Age Normal Entry-Age Normal
Cost Method Cost Method
Actuarial Assumptions:
Discount Rate 7.15%7.15%
Inflation 2.50%2.50%
Projected Salary Increase (1)(1)
Mortality Rate Table (2)(2)
Post Retirement Benefit Increase (3)(3)
(1) Varies by entry age and service.
(2)
(3)
The mortality table used was developed based on CalPERS-specific data. The
probabilities of mortality are based on the 2017 CalPERS Experience Study for the period
from 1997 to 2015. Pre-retirement and Post-retirement mortality rates includes 15 years of
projected mortality improvement using 90% of Scale MP-2016 published by the Society
of Actuaries. For more details on this table, please refer to the CalPERS Experience Study
and Review of Actuarial Assumptions report from December 2017 that can be found on
the CalPERS website.
The lessor of contract COLA or 2.50% until Purchasing Power Protection Allowance
Floor on purchasing power applies, 2.50% thereafter.
67
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 10 - PENSION PLANS (CONTINUED)
b. Net Pension Liability (Continued)
Long-term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building
-block method in which expected future real rates of return (expected returns, net of pension plan
investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-term
and long-term market return expectations as well as the expected pension fund cash flows. Using
historical returns of all of the funds’ asset classes, expected compound (geometric) returns were
calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block
approach. Using the expected nominal returns for both short-term and long-term, the present value
of benefits was calculated for each fund. The expected rate of return was set by calculating the
rounded single equivalent expected return that arrived at the same present value of benefits for cash
flows as the one calculated using both short-term and long-term returns. The expected rate of return
was then set equal to the single equivalent rate calculated above and adjusted to account for
assumed administrative expenses. The expected real rates of return by asset class are as follows:
Assumed Real Return Real Return
Asset Years Years
Allocation 1 - 10 (b) 11+ (c)
Global Equity 50.00% 4.80% 5.98%
Fixed Income 28.00% 1.00% 2.62%
Inflation Assets 0.00% 0.77% 1.81%
Private Equity 8.00% 6.30% 7.23%
Real Assets 13.00% 3.75% 4.93%
Liquidity 1.00% 0.00% -0.92%
Total 100.00%
(a)
(b)An expected inflation of 2.00% used for this period
(c) An expected inflation of 2.92% used for this period
Asset Class (a)
In the System's ACFR, Fixed Income is included in Global Debt Securities; Liquidity is
included in Short-term Investments; Inflation Assets are included in both Global Equity
Securities and Global Debt Securities
68
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 10 - PENSION PLANS (CONTINUED)
b. Net Pension Liability (Continued)
Discount Rate
The discount rate used to measure the total pension liability was 7.15%. The projection of cash
flows used to determine the discount rate assumed that contributions from plan members will be
made at the current member contribution rates and that contributions from employers will be made
at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s
fiduciary net position was projected to be available to make all projected future benefit payments
of current plan members. Therefore, the long-term expected rate of return on plan investments was
applied to all periods of projected benefit payments to determine the total pension liability.
Subsequent Events
On July 12, 2021, CalPERS reported a preliminary 21.3% net return on investments for fiscal year
2020-21. Based on the thresholds specified in CalPERS Funding Risk Mitigation policy, the excess
return of 14.3% prescribes a reduction in investment volatility that corresponds to a reduction in
the discount rate used for funding purposes of 0.20%, from 7.00% to 6.80%. Since CalPERS was
in the final stages of the four-year Asset Liability Management (ALM) cycle, the board elected to
defer any changes to the asset allocation until the ALM process concluded, and the board could
make its final decision on the asset allocation in November 2021.
On November 17, 2021, the board adopted a new strategic asset allocation. The new asset
allocation along with the new capital market assumptions, economic assumptions and
administrative expense assumption support a discount rate of 6.90% (net of investment expense but
without a reduction for administrative expense) for financial reporting purposes. This includes a
reduction in the price inflation assumption from 2.50% to 2.30% as recommended in the November
2021 CalPERS Experience Study and Review of Actuarial Assumptions. This study also
recommended modifications to retirement rates, termination rates, mortality rates and rates of
salary increases that were adopted by the board. These new assumptions will be reflected in the
GASB 68 accounting valuation reports for the June 30, 2022, measurement date.
69
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 10 - PENSION PLANS (CONTINUED)
c. Changes in the Net Pension Liability
The changes in the net pension liability for the Miscellaneous Plan are as follows:
As of June 30, 2022, the City reported $23,278,195 of liabilities for its proportionate share of the
net pension liability for the Safety Plan.
The City’s net pension liability for the Safety Plan is measured as the proportionate share of the net
pension liability. The net pension liability of the Safety Plan is measured as of June 30, 2021, and
the total pension liability for the Safety Plan used to calculate the net pension liability was
determined by an actuarial valuation as of June 30, 2020 rolled forward to June 30, 2021 using
standard update procedures. The City’s proportionate share of the net pension liability was based
on a projection of the City’s long-term share of contributions to the pension plans relative to the
projected contributions of all participating employers, actuarially determined.
Total Plan Net Pension
Pension Fiduciary Liability
Liability Net Position (Asset)
Balance at June 30, 2020
(Measurement Date)131,477,633$ 104,231,039$ 27,246,594$
Changes in the Year:
Service cost 2,693,820 - 2,693,820
Interest on the total pension liability 9,379,056 - 9,379,056
Differences between actual and
expected experience 1,568,479 - 1,568,479
Changes in assumptions - - -
Changes in benefit terms - - -
Contribution - employer - 3,581,172 (3,581,172)
Contribution - employee - 1,196,644 (1,196,644)
Net investment income - 23,665,065 (23,665,065)
Administrative expenses - (104,120) 104,120
Benefit payments, including refunds
of employee contributions (6,434,816) (6,434,816) -
Net plan to plan resource movement - - -
Other miscellaneous expense - - -
Net Changes 7,206,539 21,903,945 (14,697,406)
Balance at June 30, 2021
(Measurement Date)138,684,172$ 126,134,984$ 12,549,188$
Increase (Decrease)
70
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 10 - PENSION PLANS (CONTINUED)
c. Changes in the Net Pension Liability (Continued)
The City’s proportionate share of the net pension liability for the Safety Plan as of measurement
dates ended June 30, 2020 and 2021 was as follows:
Sensitivity of the Net Pension Liability to Changes in the Discount Rate
The following presents the net pension liability of the City for each Plan, calculated using the
discount rate for each Plan of 7.15%, as well as what the City’s net pension liability would be if it
were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher
than the current rate:
Miscellaneous Safety
1% Decrease 6.15%6.15%
Net Pension Liability 31,116,437$ 45,694,227$
Current Discount Rate 7.15%7.15%
Net Pension Liability 12,549,188$ 23,278,195$
1% Increase 8.15%8.15%
Net Pension Liability (2,765,908)$ 4,866,194$
Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately
issued CalPERS financial reports.
d. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
For the year ended June 30, 2022, the City recognized pension expense of $318,421 and
$1,417,924 for the Miscellaneous and Safety Plans, respectively. At June 30, 2022, the City
reported deferred outflows of resources and deferred inflows of resources related to pensions from
the following sources:
Safety
Proportion - June 30, 2020 0.61299%
Proportion - June 30, 2021 0.66329%
Change - Increase (Decrease)0.05030%
71
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 10 - PENSION PLANS (CONTINUED)
d. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Deferred Deferred
Outflows Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 4,877,030$ -$
Differences between actual and expected experience 1,008,308 (119,363)
Net differences between projected and actual
earnings on plan investments - (11,823,245)
Total 5,885,338$ (11,942,608)$
Deferred Deferred
Outflows Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 6,243,210$ -$
Differences between actual and expected experience 3,977,060 -
Change in employer's proportion and differences
between the employer's contributions and the
employer's proportionate share of contributions 1,423,636 (240,139)
Net differences between employer's contributions and
proportionate share of contributions 61,183 (2,427,023)
Net differences between projected and actual
earnings on plan investments - (13,855,001)
Total 11,705,089$ (16,522,163)$
Miscellaneous
Safety
Deferred outflows of resources $4,877,030 and $6,243,210 reported in the Miscellaneous and
Safety Plans, respectively, are related to contributions subsequent to the measurement date and will
be recognized as a reduction of the net pension liability in the fiscal year ending June 30, 2023.
Other amounts reported as deferred outflows of resources and deferred inflows of resources related
to pensions will be recognized as pension expense as follows:
72
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 10 - PENSION PLANS (CONTINUED)
d. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Fiscal Year
Ending
June 30, Miscellaneous Safety
2023 (2,536,689)$ (1,942,652)$
2024 (2,291,792) (2,324,098)
2025 (2,848,390) (2,980,831)
2026 (3,257,429) (3,812,703)
2027 - -
Thereafter - -
NOTE 11 - POST-EMPLOYMENT HEALTH CARE BENEFITS
a. General Information about the OPEB Plan
Plan Description
The City administers a single-employer defined benefit other post-employment benefit (OPEB)
plan that provides eligible retirees with a subsidy towards retiree medical insurance premiums. An
employee hired by the City prior to July 1, 2011 is eligible for this benefit if they retire from the
City on or after age 50 (unless disabled), with five years of service and are eligible for a CalPERS
pension and enroll in a CalPERS medical insurance plan immediately after retirement. An
employee hired by the City on or after July 1, 2011 is eligible for this benefit if they retire from the
City on or after age 50 (unless disabled), with ten years of service and are eligible for a CalPERS
pension and enroll in a CalPERS medical insurance plan immediately after retirement. Eligible
employees who suffer a disability may satisfy the continuous service requirement using a
combination of service with the City and service with any public agency with a reciprocal
retirement system. Benefits vary by hire date, employment status and employment classification. In
the event of a retiree’s death, benefits may continue to surviving beneficiaries in certain
circumstances.
A portion of the City’s OPEB liability is in the form of an implied rate subsidy. Retirees and active
employees are insured together as a group, thus creating a lower rate for retirees than if they were
insured separately. Although the retirees are solely responsible for the cost of their health insurance
benefits through this plan, the retirees receive the benefit of a lower rate. The difference between
these amounts is the implied rate subsidy, which is considered an OPEB liability.
73
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 11 - POST-EMPLOYMENT HEALTH CARE BENEFITS (CONTINUED)
a. General Information about the OPEB Plan (Continued)
Plan Description (Continued)
In 2018, the City established a trust with Public Agency Retirement Services (PARS) to hold assets
that are legally restricted for the City’s OPEB plan under Section 115 of the Internal Revenue
Code. The City makes discretionary contributions to the OPEB Trust. Contributions to the OPEB
Trust and earnings on those contributions are irrevocable. The City also determines the timing of
the distribution of trust assets and whether those assets will be paid directly to the insurance
provider or to reimburse the City for plan benefits and expenses paid by the City. The OPEB Trust
is reported as a fiduciary fund since it would be misleading to exclude the OPEB Trust Fund from
the City’s financial statements. PARS issues a publicly available financial report for the fiduciary
net position of the OPEB Trust, which is available upon request. The plan itself does not issue a
separate financial report.
Employees Covered
At June 30, 2021, valuation date, the benefit terms covered the following employees:
Inactive employees or beneficiaries currently receiving benefits 139
Active employees 294
Total 433
Accounting for the Plan
The OPEB trust is prepared using the accrual basis of accounting. Employer contributions to the
plan are recognized when due and the employer has made a formal commitment to provide the
contributions. Benefits are recognized when due and payable in accordance with the terms of each
plan.
74
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 11 - POST-EMPLOYMENT HEALTH CARE BENEFITS (CONTINUED)
a. General Information about the OPEB Plan (Continued)
Method Used to Value Investments
Investments are reported at fair value, which is determined by the mean of the most recent bid and
asked prices as obtained from dealers that make markets in such securities. Securities for which
market quotations are not readily available are valued at their fair value as determined by the
custodian with the assistance of a valuation service.
Contributions
The contribution requirements of plan members and the City are established and may be amended
by City Council. Currently, contributions are not required from plan members. Administrative
costs of the OPEB plan are financed through investment earnings. The annual contribution is based
on the actuarially determined contributions.
For measurement period ending June 30, 2022, the City contributed $500,000 to the PARS OPEB
trust, made payments of $568,286 to insurance providers and retirees, and the estimated implied
subsidy was $271,584, resulting in total contributions of $1,339,870. The liability for governmental
activities is primarily liquidated from the General Fund and the liability for business-type activities
is liquidated from the Water Enterprise Fund.
b. Net OPEB Liability
The City’s net OPEB liability was measured as of June 30, 2022 and the total OPEB liability used
to calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2021
rolled forward to June 30, 2022 using standard update procedures. A summary of the principal
assumptions and methods used to determine the total OPEB liability is shown below.
75
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 11 - POST-EMPLOYMENT HEALTH CARE BENEFITS (CONTINUED)
b. Net OPEB Lability (Continued)
Actuarial Assumptions
The net OPEB liability in the June 30, 2021 actuarial valuation was determined using the following
actuarial assumptions, applied to all periods included in the measurement, unless otherwise
specified:
Valuation Date June 30, 2021
Measurement Date June 30, 2022
Actuarial Cost Method Entry-Age Normal Level Percentage of Salary
Actuarial Assumptions:
Discount Rate 6.25%
Expected long term investment rate of return 6.25% net of OPEB plan investment expense
Inflation 2.75%
Salary Increase 2.75%.
Healthcare Cost Trend Rates 6.00% for 2022; 4.00% for 2023; 5.20 percent for 2024 to
2069; and 4.00% for 2070 and later years; Medicare ages:
3.50% for all years
Pre-Retirement Mortality:
Miscellaneous Preretirement Mortality Rates for Public Agency
Miscellaneous from 2021 CalPERS Experience Study.
Safety Preretirement Mortality Rates for Public Agency Police
from 2021 CalPERS Experience Study.
Post-Retirement Mortality:
Miscellaneous Postretirement Mortality Rates for Public Agency
Miscellaneous from 2021 CalPERS Experience Study.
Safety Postretirement Mortality Rates for Public Agency Police
from 2021 CalPERS Experience Study
Actuarial assumptions used in the June 30, 2021 valuation were based on a review of plan
experience during the period June 30, 2020 to June 30, 2021.
76
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 11 - POST-EMPLOYMENT HEALTH CARE BENEFITS (CONTINUED)
b. Net OPEB Lability (Continued)
Actuarial Assumptions (Continued)
The long-term expected rate of return on OPEB plan investments was determined using a building-
block method in which expected future real rates of return (expected returns, net of investment
expense and inflation) are developed for each major asset class. The calculated investment rate of
return was set equal to the expected ten-year compound (geometric) real return plus inflation
(rounded to the nearest 25 basis points, where appropriate).
The table below provides the long-term expected real rates of return by asset class (based on
published capital market assumptions).
Assumed Long-Term
Asset Expected Real
Allocation Rate of Return
PARS OPEB Trust
Broad U.S Equity 60.00% 4.40%
U.S Fixed 40.00% 1.50%
Total 100.00%
Asset Class
Discount Rate
The discount rate used to measure the total OPEB liability was 6.25%. The projection of cash flows
used to determine the discount rate assumed that City’s contributions will be made at rates equal to
the actuarially determined contribution rates. Based on those assumptions, the OPEB plan’s
fiduciary net position was projected to be available to make all projected OPEB payments for
current active and inactive employees and beneficiaries. Therefore, the long-term expected rate of
return on the PARS OPEB trust investments was applied to all periods of projected benefit
payments to determine the total OPEB liability.
77
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 11 - POST-EMPLOYMENT HEALTH CARE BENEFITS (CONTINUED)
c. Changes in the net OPEB liability
The changes in the net OPEB liability are as follows:
Total Plan Net
OPEB Fiduciary OPEB
Liability Net Position Liability
Balance at June 30, 2021
(Measurement Date)14,776,533$ 2,585,536$ 12,190,997$
Changes in the Year:
Service cost 531,714 - 531,714
Interest on the total OPEB liability 970,235 - 970,235
Differences between actual and
expected experience (10,715) - (10,715)
Changes in assumptions 639,802 - 639,802
Changes in benefit terms - - -
Contribution - employer - 1,339,870 (1,339,870)
Net investment income - (335,000) 335,000
Benefit payments (839,870) (839,870) -
Administrative expenses - (14,404) 14,404
Net Changes 1,291,166 150,596 1,140,570
Balance at June 30, 2022
(Measurement Date)16,067,699$ 2,736,132$ 13,331,567$
Increase (Decrease)
Change of Assumptions
From measurement date June 30, 2021 to measurement date June 30, 2022, there were the
following changes of assumptions: (1) healthcare cost trend changed from 3.50% trending to
4.00% for 2023.
78
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 11 - POST-EMPLOYMENT HEALTH CARE BENEFITS (CONTINUED)
c. Changes in the net OPEB liability (Continued)
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate
The following presents the net OPEB liability of the City, as well as what the City’s net OPEB
liability would be if it were calculated using a discount rate that is 1-percentage point lower or
1-percentage point higher than the current discount rate:
1% Decrease Discount Rate 1% Increase
(5.25%)(6.25%)(7.25%)
Net OPEB Liability 15,151,604$ 13,331,567$ 11,792,251$
Sensitivity of the Net OPEB Liability to Changes in the Health-Care Cost Trend Rates
The following presents the net OPEB liability of the City, as well as what the City’s net OPEB
liability would be if it were calculated using healthcare cost trend rates that are 1-percentage point
lower or 1-percentage point higher than the current healthcare cost trend rates:
Current Healthcare
1% Decrease Cost Trend Rates 1% Increase
(5.0% decreasing (6.0% decreasing (7.0% decreasing
to 3.0%)to 4.0%)to 5.0%)
Net OPEB Liability 11,950,293$ 13,331,567$ 15,136,950$
d. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB
For the year ended June 30, 2022, the City recognized OPEB expense of $1,240,589. At
June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources
related to OPEB from the following sources:
Deferred Deferred
Outflows Inflows
of Resources of Resources
Differences between actual and expected experience 498,017$ (1,270,303)$
Change in assumptions 578,283 (526,018)
Differences between projected and actual earnings
on investments 269,437 -
Total 1,345,737$ (1,796,321)$
79
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 11 - POST-EMPLOYMENT HEALTH CARE BENEFITS (CONTINUED)
d. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB (Continued)
Amounts reported as deferred inflows of resources related to OPEB will be recognized as OPEB
expense as follows:
Fiscal Year
Ending
June 30, Amount
2023 (74,260)$
2024 (73,864)
2025 (79,397)
2026 (22,762)
2027 (129,930)
Thereafter (70,371)
NOTE 12 - IRS SECTION 457 DEFERRED COMPENSATION PLAN
In accordance with federal law, all part-time employees must be enrolled in Social Security or another
“qualified” retirement plan. Since the City does not participate in Social Security, part-time employees
are enrolled in the City’s IRS Section 457 deferred compensation plan. Nationwide Retirement
Solutions, Inc. acts as the third party administrative services provider for the defined contribution plan.
Employees are required to contribute 5.5% of salary to the deferred compensation plan every pay
period. The City contributes an additional 2% of salary, for a total contribution of 7.5%. Council
established the plan by resolution in fiscal year 2011-2012 and has the authority to amend contribution
requirements. Contributions to the participants account must equal at least 7.5% of the participant’s
compensation, or such other minimum amount as required for the plan to be considered a retirement
system under applicable government code and legal requirements. Total contributions to the plan
during fiscal year 2022 were $85,875.
NOTE 13 - 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 $350,000 per occurrence is provided
through a risk sharing pool, the California Insurance Pool Authority (CIPA). The CIPA provides
excess liability coverage above $3,000,000 per occurrence and $20,000,000 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
$2,000,000. Property, pollution, cyber and employment practices liability risk are financed through
insurance contracts and have various limits and deductibles.
80
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 13 - SELF-INSURANCE PROGRAM/RISK POOL (CONTINUED)
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 $20,000,000 annual aggregate in proportion to their annual premium. CIPA uses independent
actuaries and underwriters to determine premiums and help set insurance limits and deductible levels.
The pool is managed by an 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 366 San Miguel Drive, 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, 2022. At June 30, 2022, estimated claims payable of $10,428,570, which includes a provision
for incurred but not reported claims and loss adjustment expenses, are reported as a long-term liability.
Changes in the balances of claims liabilities for the years ended June 30, 2022 and 2021, including a
provision for incurred but not reported claims and loss adjustment expenses, were as follows:
Beginning Ending
June 30,Balance Additions Deletions Balance
2021 7,842,971$ 3,070,339$ (1,610,088)$ 9,303,222$
2022 9,303,222 2,132,017 (1,006,669) 10,428,570
NOTE 14 - 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. They are the liabilities of the
property owners and 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.
81
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 14 - SPECIAL ASSESSMENT DISTRICTS’ BONDS (CONTINUED)
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.
Amount Outstanding
of Issue June 30, 2022
Community Facilities District 04-1, 2013 9,350,000$ 6,705,000$
Community Facilities District 06-1, 2015A 49,740,000 43,500,000
Community Facilities District 06-1, 2015B 2,735,000 2,170,000
Community Facilities District 07-1, 2015A 13,155,000 12,835,000
Community Facilities District 2014-01, 2015A 27,665,000 26,485,000
102,645,000$ 91,695,000$
District Bonds
In May 2013, the City issued $9,350,000 of Special Tax Refunding Bonds, Series 2013, to refund in
full and defease the City of Tustin Community Facilities District No. 04-1 Special Tax Bonds,
Series 2004. The 2004 series was originally issued to facilitate the new infrastructure construction on
the former MCAS 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, 2032, and pay costs of issuing the
Series 2013 Bonds. Serial current interest bonds will mature from September 1, 2014 to
September 1, 2032. Term current interest bonds will mature on September 1, 2034, with mandatory
sinking payments from September 1, 2033 through September 1, 2034. Interest maturity rates of the
current interest bonds range from 2.00% at September 1, 2014 to 5.00% at September 1, 2024. At
June 30, 2022, the outstanding amount of the Special Tax Refunding Bonds, Series 2013 was
$6,705,000.
In November 2015, the City issued $27,665,000 Community Facilities District No. 2014-01 Special
Tax Bonds, Series 2015A (CFD 2014-01 2015A Special Tax Bonds). The CFD 2014-01 2015A
Special Tax Bonds were issued to finance certain infrastructure improvements and school facilities,
fund a reserve account, and pay for costs of issuance and administrative costs. Serial current interest
bonds will mature from September 1, 2016 to September 1, 2035 with interest rates ranging from 2.0%
to 5.0%. Term current interest bonds will mature on September 1, 2040 and September 1, 2045, with
mandatory sinking payments from September 1, 2036 through September 1, 2045 with interest rates of
5.0%. At June 30, 2022, the outstanding amount of the CFD 2014-01 2015A Special Tax Bonds was
$26,485,000.
82
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 14 - SPECIAL ASSESSMENT DISTRICTS’ BONDS (CONTINUED)
In December 2015, the City issued $13,155,000 Community Facilities District No. 07-1 Special Tax
Refunding Bonds, Series 2015A (CFD 07-1 2015A Refunding Bonds). The CFD 07-1 2015A
Refunding Bonds were issued to refund in full and defease the CFD 07-1 Series 2007 Bonds. Serial
bonds will mature from September 1, 2021 to September 1, 2025 with interest rates ranging from 2.5%
to 3.125%. Term current interest bonds will mature on September 1, 2030 and September 1, 2037, with
mandatory sinking payments from September 1, 2030 through September 1, 2037 with interest rates of
5.00%. The City’s refunding of the CFD 07-1 Series 2007 Bonds resulted in a decrease of its total
debt service payments by $2,152,849 and an economic gain (difference between the present values of
the old and new debt) of $1,423,246. At June 30, 2022, the outstanding amount of the CFD 07-1
2015A Refunding Bonds was $12,835,000.
In November 2015, the City issued $49,740,000 Community Facilities District No. 06-1 Special Tax
Refunding Bonds, Series 2015A (CFD 06-01 2015A Refunding Bonds). The CFD 06-01 2015A
Refunding Bonds were issued to refund in full and defease the CFD No 06-1 Series 2007A Bonds and
Special Tax Bonds 2010. Serial current bonds will mature from September 1, 2016 to
September 1, 2035 with interest rates ranging from 2.0% to 5.0%. Term current interest bonds will
mature on September 1, 2037 with an interest rate of 5.00%, September 1, 2037 with an interest rate of
3.75% and September 1, 2039 with an interest rate of 4.0% with mandatory sinking fund payments due
September 1, 2036 through September 1, 2039. The City’s refunding of the CFD No. 06-1 Series
2007A Bonds and Special Tax Bonds 2010 resulted in a decrease of its total debt service payments by
$15,726,836 and an economic gain (difference between the present values of the old and new debt) of
$7,020,039. At June 30, 2022, the outstanding amount of the CFD 06-01 2015A Refunding Bonds was
$43,500,000.
In November 2015, the City issued $2,735,000 Community Facilities District No. 06-1 Special Tax
Bonds, Series 2015B (CFD 06-1 Special Tax 2015B Bonds). The CFD 06-1 Special Tax 2015B Bonds
were issued to finance public improvements, fund a reserve account and pay for costs of issuance.
Serial current bonds will mature from September 1, 2016 to September 1, 2033 with interest rates
ranging from 2.0% to 3.75%. Term current interest bonds will mature on September 1, 2035 with an
interest rate of 3.75%, and September 1, 2037 with an interest rate of 3.75% with mandatory sinking
fund payments due September 1, 2035 through September 1, 2037. At June 30, 2022, the outstanding
amount of the CFD 06-1 Special Tax 2015B Bonds was $2,170,000.
NOTE 15 - GOVERNMENTAL FUND BALANCE CLASSIFICATIONS
The fund balances reported on the fund statements consist of the following categories:
Nonspendable - 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.
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CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 15 - GOVERNMENTAL FUND BALANCE CLASSIFICATIONS (CONTINUED)
Committed - This classification includes amounts that can be used only for the specific purposes
determined by a formal action of the City’s highest level of decision-making authority. The City
Council is the highest level of decision-making authority for the City that can, by adoption of an
ordinance prior to the end of the fiscal year, commit fund balance. Once adopted, the limitation
imposed by the ordinance remains in place until a similar action is taken (the adoption of another
ordinance) to remove or revise the limitation.
Assigned - This classification includes amounts that are intended to be used for specific purposes as
indicated by City Council or by persons to whom City Council has delegated the authority to assign
amounts for specific purposes. City Council has not delegated such authority.
Unassigned - This classification includes the residual balance for the City’s general fund including all
spendable amounts not contained in other classifications. Negative fund balance in governmental
funds, after determining the fund balance classifications described above, is also reported as
unassigned fund balance. The general fund is the only fund that reports a positive unassigned fund
balance amount.
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 fund balance first, then assigned fund
balance, and finally unassigned fund balance.
(1) Restricted for capital projects:
General Fund $16,182,443 - legally restricted for backbone infrastructure at the Tustin Legacy
development.
Parks
Development Other Total
General Housing & Acquisition Governmental Governmental
Fund Authority Fund Funds Funds
Nonspendable:
Prepaid items 935,207$ 5,731$ -$ -$ 940,938$
Land held for resale 102,457,773 - - - 102,457,773
Loan receivable 71,440 - - - 71,440
Restricted for:
Capital projects (1) 16,182,443 - 1,994,285 15,289,102 33,465,830
Public safety program 121,494 - - 576,299 697,793
Community services 37,507 - - - 37,507
Housing projects - 765,015 - 2,034,877 2,799,892
Solid waste program - - 1,316,634 1,316,634
Pension 8,327,240 - - - 8,327,240
Assigned to:
Capital projects (2)- - - 4,807,905 4,807,905
Unassigned 136,230,562 - - - 136,230,562
Total fund balances 264,363,666$ 770,746$ 1,994,285$ 24,024,817$ 291,153,514$
84
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CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 15 - GOVERNMENTAL FUND BALANCE CLASSIFICATIONS (CONTINUED)
Park Acquisition and Development Special Revenue Fund $1,994,285 - comprised of developer
fees restricted for improvement of City parks.
Other Governmental Funds:
o Gas Tax Special Revenue Fund $4,983,322 - comprised of state gas taxes restricted for
allowable street-related purposes.
o Air Quality Special Revenue Fund $117,068 - restricted for projects to reduce pollution.
o Road Maintenance and Rehabilitation Special Revenue Fund $5,648,592 - restricted for
maintenance and rehabilitation of streets.
o Measure M Special Revenue Fund $2,990,836 - state gas taxes restricted for allowable street-
related purposes.
o Construction 95-1 Capital Projects Fund $332,609 - restricted for uses specified in the bond
indenture.
o Other Capital Projects Fund $11,410 - retention amounts withheld in restricted escrow accounts
to be paid to contractors once projects are completed.
o CFD Construction Capital Projects Fund $1,205,265 - comprised of bond proceeds restricted
for uses specified in the bond indenture.
(2) Assigned to capital projects:
Other Capital Projects Fund $4,807,905 – for specific projects indicated in the adopted budget.
NOTE 16 - OTHER REQUIRED INDIVIDUAL FUND DISCLOSURES
Excess of Expenditures over Appropriations
Variance with
Budget Actual Final Budget
Other Governmental Funds:
Solid Waste Fund 227,264$ 356,694$ 129,430$
85
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CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 17 - 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, Seal Beach, Stanton, Villa Park, and
Yorba Linda and the County of Orange (County) to create the Orange County Fire Authority
(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. In 2021,
City of Placentia left the Authority.
The effective date of formation was March 1, 1995. The Authority’s governing 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 1 Fire Authority Road,
Irvine, California.
Orange County Housing Finance Trust
In May 2019, the City of Tustin entered into a joint powers agreement with cities throughout the
county and the County of Orange (County) to create the Orange County Housing Finance Trust
(OCHFT). The purpose of the OCHFT is to fund the planning and construction of housing of all types
and tenures for the homeless population and persons and families of extremely low, very low, and low
income as defined in the Section 50093 of the Health and Safety Code, including but not limited to,
permanent supportive housing, and to receive public and private financing and funds.
The OCHFT’s governing board consists of nine members: two members of the Board of Supervisors of
the County, two countywide elected officials, one city council member for each city member with the
greatest population in the North, Central, and South Region Service Planning Area, as depicted in the
agreement, and two city council members selected from member cities that are not already represented.
The County is responsible for OCHFT’s administrative costs for one year following the creation of
OCHFT. After the initial year, the member cities will make annual contributions towards the budgeted
administrative costs in accordance with a cost allocation formula approved by the governing board.
The particular programs and program budget, funded, sponsored or operated by OCHFT, as well as the
level of and mechanisms for, the involvement of OCHFT and each member city, in such programs and
program budget, will be determined and approved by the governing board. A member city’s individual
contribution, involvement and role in any particular program or budgeted program costs will be
mutually agreed to between the member city and OCHFT.
86
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CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 17 - JOINT POWERS AUTHORITY (CONTINUED)
Orange County Housing Finance Trust (Continued)
The financial statements of the Orange County Housing Finance Trust are available at 333 W. Santa
Ana Blvd, Santa Ana, California.
NOTE 18 - SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY REDEVELOPMENT
AGENCY DISCLOSURES
The assets and liabilities of the former redevelopment agency were transferred to the Successor
Agency to the Tustin Community Redevelopment Agency on February 1, 2012 as a result of the
dissolution of the former redevelopment agency. The City is acting in a fiduciary capacity for the
assets and liabilities. Disclosures related to these transactions are as follows:
Long-Term Liabilities
A summary of long-term liabilities activity for the year ended June 30, 2022, is as follows:
Balance Balance Due Within
June 30, 2021 Additions Deletions June 30, 2022 One Year
Tax allocation bonds 48,225,000$ -$ (2,050,000)$ 46,175,000$ 2,130,000$
Unamortized premium 5,286,802 - (261,077) 5,025,725 261,077
Total long-term liabilities 53,511,802$ -$ (2,311,077)$ 51,200,725$ 2,391,077$
2016 Tax Allocation Refunding Bonds
On September 29, 2016, the Successor Agency to the Tustin Community Redevelopment Agency
issued $55,940,000 Refunding Tax Allocation Bonds, Series 2016 (2016 Bonds) for the purpose of
refunding in advance the 2010 Housing Bonds and the MCAS 2010 Redevelopment Bonds and pay for
a surety bond insurance policy and costs of issuance of the bonds. The 2016 Bonds proceeds were
invested in escrow funds (2010 Housing Escrow Fund and 2010 Redevelopment Escrow Fund) with a
trustee which together will pay interest and principal on the 2010 Housing Bonds up to and including
September 1, 2021 and to redeem the then outstanding 2010 Housing Bonds in full on September 1,
2021; and pay interest and principal on the MCAS 2010 Redevelopment Bonds up to and including
September 1, 2018 and to redeem the then outstanding MCAS 2010 Redevelopment Bonds in full on
September 1, 2018. As of June 30, 2022 the amount of defeased 2010 Housing Bonds outstanding was
$17,760,000. The defeased MCAS 2010 Redevelopment Bonds were paid in full on September 1, 2018.
87
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CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 18 - SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY REDEVELOPMENT
AGENCY DISCLOSURES (CONTINUED)
Long-Term Liabilities (Continued)
2016 Tax Allocation Refunding Bonds (Continued)
The 2016 Bonds are payable in annual installments ranging from $2,025,000 to $2,925,000
commencing on September 1, 2017. Interest is payable semiannually on March 1 and September 1,
with rates ranging from 2.0% to 5.0% per annum. The bonds maturing on or after September 1, 2027,
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
The defeasance resulted in a difference between the reacquisition price and the net carrying amount of
the old debt of $7,392,925. The difference reported in the accompanying statements as a deferred
outflow of resources, is being charged to interest expense through 2040. The remaining balance at
June 30, 2022, is $5,692,552.
At June 30, 2022, the 2016 Tax Allocation Refunding Bonds outstanding balance was $46,175,000.
The annual debt service requirements to amortize the tax allocation bonds are as follows:
Year Ending
June 30,Principal Interest Total
2023 2,130,000$ 1,776,725$ 3,906,725$
2024 2,215,000 1,689,825 3,904,825
2025 2,305,000 1,599,425 3,904,425
2026 2,395,000 1,493,450 3,888,450
2027 2,515,000 1,370,700 3,885,700
2028 - 2032 11,395,000 5,090,688 16,485,688
2033 - 2037 12,420,000 2,780,175 15,200,175
2038 - 2041 10,800,000 627,150 11,427,150
Totals 46,175,000$ 16,428,138$ 62,603,138$
88
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CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2022
NOTE 19 - SCHOOL FACILITIES IMPLEMENTATION COMMITMENT
In August 2015, the City entered into a School Facilities Implementation, Funding and Mitigation
Agreement (I/M Agreement) as amended with the Tustin Unified School District (TUSD), as well as a
joint community facilities agreement with TUSD and Standard Pacific that provides a framework for
development of grades 6-12 schools on the 40-acre designated site, along with the opening of Heritage
Elementary School as a magnet elementary site in the fall of 2016. The estimated cost to complete the
project is $75,117,850. In order to facilitate the implementation plan, the City will advance funds to the
project development with three different approaches. First, the City advanced $4 million in October
2015. Second, the City will deposit an additional $15 million in the project development account
which occurred on August 1, 2016. Third, the City will have the option to advance additional funds for
the entire project or just certain projects. The City also issued 2014-1 Community Facilities District
Special Tax Bonds, Series 2015A, totaling $27,665,000.
In October 2017, the City conveyed approximately 40 acres of the former Marine Corps Air Station
Tustin (MCAS Tustin) to the Tustin Unified School District for the establishment of the grades 6-12
schools facility project in accordance with the site conveyance agreement.
The total obligation under the I/M Agreement with TUSD is the lesser of the actual cost to construct
TUSD facilities or $85,000,000. In January 2019, the City advanced $14,958,598 to TUSD to provide
the remaining funds necessary to fund both: (a) the Legacy Magnet Academy classroom building for
grades 6-9 along with associated parking and athletic fields, and (b) the Administration Building
portion of the Legacy Magnet Academy 6-12 School Project. These expenses are expected to be offset
by a credit the City will receive from TUSD in the amount of $11,849,685 which credit will be
redeemable by the City against any future prepayment by the City of the special tax obligations within
CFD 15-2. As of June 30, 2022, the City’s total contributions to TUSD under the I/M agreement was
$62,218,443. The balance remaining under the IM is $22,781,557.
NOTE 20 - COMMITMENTS AND CONTINGENCIES
Legal Claims
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.
Capital Projects
Various capital projects were in progress at June 30, 2022 with an estimated cost to complete of
approximately $65,420,661 across all fund types.
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Required Supplemental
Information
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
REQUIRED SUPPLEMENTARY INFORMATION
90
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Fiscal year ended June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018
Measurement period June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017
Plan's proportion of the
net pension liability 0.66329% 0.64745% 0.61609% 0.62908% 0.60938%
Plan's proportionate share
of the net pension liability 23,278,195$ 40,839,584$ 38,459,938$ 36,911,786$ 36,411,988$
Plan's covered payroll 11,498,163$ 10,848,695$ 9,896,349$ 9,967,145$ 10,443,467$
Plan's proportionate share
of the net pension liability as a
percentage of covered payroll 202.45% 376.45% 388.63% 370.33% 348.66%
Plan's proportionate share of the
fiduciary net position as a
percentage of the Plan's total
pension liability 86.02% 73.12% 73.37% 75.26% 73.31%
Plan's proportionate share of
aggregate employer contributions 7,653,147$ 6,191,362$ 5,000,688$ 4,600,007$ 3,520,089$
Notes to Schedule:
Benefit Changes:
There were no changes in benefits.
Changes in Assumptions:
From fiscal year June 30, 2015 to June 30, 2016:
From fiscal year June 30, 2016 to June 30, 2017:
There were no changes in assumptions.
From fiscal year June 30, 2017 to June 30, 2018:
The discount rate was reduced from 7.65% to 7.15%
From fiscal year June 30, 2018 to June 30, 2022:
There were no changes in assumptions.
* Fiscal year 2015 was the 1st year of implementation, therefore only eight years are shown.
GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan
investment expense but without reduction for pension plan administrative expense. The discount rate of 7.50% used for
the June 30, 2014 measurement date was net of administrative expenses. The discount rate of 7.65% used for the June
30, 2015 measurement date is without reduction of pension plan administrative expense.
Last Ten Fiscal Years*
CITY OF TUSTIN
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
SAFETY PLAN
91
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Fiscal year ended June 30, 2017 June 30, 2016 June 30, 2015
Measurement period June 30, 2016 June 30, 2015 June 30, 2014
Plan's proportion of the
net pension liability 0.60679% 0.58972% 0.68843%
Plan's proportionate share
of the net pension liability 31,427,228$ 24,298,906$ 25,822,675$
Plan's covered payroll 10,013,168$ 9,495,434$ 9,640,345$
Plan's proportionate share
of the net pension liability as a
percentage of covered payroll 313.86% 255.90% 267.86%
Plan's proportionate share of the
fiduciary net position as a
percentage of the Plan's total
pension liability 74.06% 78.40% 79.82%
Plan's proportionate share of
aggregate employer contributions 3,193,318$ 3,182,851$ 2,544,912$
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
CITY OF TUSTIN
SAFETY PLAN
Last Ten Fiscal Years*
92
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Fiscal year ended June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018
Contractually required contribution
(actuarially determined)5,243,210 4,592,442$ 4,132,787$ 3,641,308$ 3,204,833$
Contributions in relation to
the actuarially determined
contributions (6,243,210) (4,592,442) (5,782,787) (5,291,308) (3,204,833)
Contribution deficiency (excess)(1,000,000)$ -$ (1,650,000)$ (1,650,000)$ -$
Covered payroll 16,288,959$ 11,498,163$ 10,848,695$ 9,896,349$ 9,967,145$
Contributions as a percentage
of covered payroll 38.33% 39.94% 53.30% 53.47% 32.15%
Notes to Schedule:
Valuation Date 6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015
Methods and Assumptions Used to Determine Contribution Rates:
Actuarial cost method Entry age Entry age Entry age Entry age Entry age
Amortization method (1)(1)(1)(1)(1)
Asset valuation method Market Value Market Value Market Value Market Value Market Value
Inflation 2.500% 2.500% 2.625% 2.75% 2.75%
Salary increases (2)(2)(2)(2)(2)
Investment rate of return 7.00% (3) 7.00% (3) 7.25% (3) 7.375% (3) 7.50% (3)
Retirement age (4)(4)(4)(4)(4)
Mortality (5)(5)(5)(5)(5)
(1) Level percentage of payroll, closed
(2) Depending on age, service, and type of employment
(3) Net of pension plan investment expense, including inflation
(4) 3% at 50 and 2% at 50 and 2.7% at 57
(5) Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study
adopted by the CalPERS Board.
* Fiscal year 2015 was the 1st year of implementation, therefore only eight years are shown.
Last Ten Fiscal Years*
CITY OF TUSTIN
SCHEDULE OF CONTRIBUTIONS
SAFETY PLAN
93
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Fiscal year ended June 30, 2017 June 30, 2016 June 30, 2015
Contractually required contribution
(actuarially determined)3,002,977$ 2,708,192$ 3,045,919$
Contributions in relation to
the actuarially determined
contributions (3,002,977) (2,708,192) (7,049,591)
Contribution deficiency (excess)-$ -$ (4,003,672)$
Covered payroll 10,443,467$ 10,013,668$ 9,495,434$
Contributions as a percentage
of covered payroll 28.75% 27.04% 74.24%
Notes to Schedule:
Valuation Date 6/30/2014 6/30/2013 6/30/2012
Methods and Assumptions Used to Determine Contribution Rates:
Actuarial cost method Entry age Entry age Entry age
Amortization method (1)(1)(1)
Asset valuation method Market Value Market Value 15 Year
Smoothed
Market Method
Inflation 2.75% 2.75% 2.75%
Salary increases (2)(2)(2)
Investment rate of return 7.50% (3) 7.50% (3) 7.50% (3)
Retirement age (4)(4)(4)
Mortality (5)(5)(5)
CITY OF TUSTIN
Last Ten Fiscal Years*
SAFETY PLAN
SCHEDULE OF CONTRIBUTIONS
94
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Fiscal year ended June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018
Measurement period June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017
Total Pension Liability:
Service cost 2,693,820$ 2,581,396$ 2,456,587$ 2,402,594$ 2,211,312$
Interest on total pension liability 9,379,056 8,860,960 8,458,273 8,052,611 7,614,130
Differences between expected and
actual experience 1,568,479 (417,769) (222,610) (426,547) (737,480)
Changes in assumptions - - - 1,050,413 6,589,964
Benefit payments, including refunds of
employee contributions (6,434,816) (5,207,052) (4,648,016) (4,523,921) (4,300,829)
Net Change in Total Pension Liability 7,206,539 5,817,535 6,044,234 6,555,150 11,377,097
Total Pension Liability - Beginning of Year 131,477,633 125,660,098 119,615,864 113,060,714 101,683,617
Total Pension Liability - End of Year (a) 138,684,172$ 131,477,633$ 125,660,098$ 119,615,864$ 113,060,714$
Plan Fiduciary Net Position:
Contributions - employer 3,581,172$ 4,837,028$ 4,373,702$ 2,249,216$ 1,881,701$
Contributions - employee 1,196,644 1,190,426 1,097,180 1,043,932 1,037,304
Net investment income 23,665,065 5,011,357 6,030,153 7,268,642 8,829,526
Benefit payments (6,434,816) (5,207,052) (4,648,016) (4,523,921) (4,300,829)
Net plan to plan resource movement - - - (213) -
Other miscellaneous expense - - 213 (254,792) -
Administrative expense (104,120) (138,915) (65,475) (134,170) (116,299)
Net Change in Plan Fiduciary Net Position 21,903,945 5,692,844 6,787,757 5,648,694 7,331,403
Plan Fiduciary Net Position - Beginning of Year 104,231,039 98,538,195 91,750,438 86,101,744 78,770,341
Plan Fiduciary Net Position - End of Year (b) 126,134,984$ 104,231,039$ 98,538,195$ 91,750,438$ 86,101,744$
Net Pension Liability - Ending (a)-(b) 12,549,188$ 27,246,594$ 27,121,903$ 27,865,426$ 26,958,970$
Plan fiduciary net position as a percentage of the
total pension liability 90.95%79.28%78.42%76.70%76.16%
Covered payroll 17,513,680$ 16,946,205$ 16,542,504$ 15,403,283$ 14,684,868$
Net pension liability as percentage of
covered payroll 71.65% 160.78%163.95%180.91% 183.58%
Notes to Schedule:
Benefit Changes:
There were no changes in benefits.
Changes in Assumptions:
From fiscal year June 30, 2015 to June 30, 2016:
From fiscal year June 30, 2016 to June 30, 2017:
There were no changes in assumptions.
From fiscal year June 30, 2017 to June 30, 2018:
The discount rate was reduced from 7.65% to 7.15%.
From fiscal year June 30, 2018 to June 30, 2022:
There were no changes in assumptions.
* Fiscal year 2015 was the 1st year of implementation, therefore only eight years are shown.
GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment expense but without
reduction for pension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014 measurement date was net of
administrative expenses. The discount rate of 7.65% used for the June 30, 2015 measurement date is without reduction of pension plan
administrative expense.
CITY OF TUSTIN
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS
MISCELLANEOUS PLAN
Last Ten Fiscal Years*
95
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Fiscal year ended June 30, 2017 June 30, 2016 June 30, 2015
Measurement period June 30, 2016 June 30, 2015 June 30, 2014
Total Pension Liability:
Service cost 1,840,275$ 1,779,008$ 1,747,494$
Interest on total pension liability 7,306,376 6,982,672 6,613,765
Differences between expected and
actual experience (531,595) 452,122 -
Changes in assumptions - (1,770,351) -
Benefit payments, including refunds of
employee contributions (4,102,189) (3,956,389) (3,974,724)
Net Change in Total Pension Liability 4,512,867 3,487,062 4,386,535
Total Pension Liability - Beginning of Year 97,170,750 93,683,688 89,297,153
Total Pension Liability - End of Year (a) 101,683,617$ 97,170,750$ 93,683,688$
Plan Fiduciary Net Position:
Contributions - employer 1,850,072$ 1,503,081$ 1,379,562$
Contributions - employee 998,937 905,331 962,617
Net investment income 372,172 1,753,374 11,900,167
Benefit payments (4,102,189) (3,956,389) (3,974,724)
Net plan to plan resource movement - (114) -
Other miscellaneous expense - - -
Administrative expense (48,573) (89,714) -
Net Change in Plan Fiduciary Net Position (929,581) 115,569 10,267,622
Plan Fiduciary Net Position - Beginning of Year 79,699,922 79,584,353 69,316,731
Plan Fiduciary Net Position - End of Year (b) 78,770,341$ 79,699,922$ 79,584,353$
Net Pension Liability - Ending (a)-(b) 22,913,276$ 17,470,828$ 14,099,335$
Plan fiduciary net position as a percentage of the
total pension liability 77.47% 82.02% 84.95%
Covered payroll 13,828,003$ 12,847,036$ 12,270,014$
Net pension liability as percentage of
covered payroll 165.70% 135.99% 114.91%
Last Ten Fiscal Years*
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS
CITY OF TUSTIN
MISCELLANEOUS PLAN
96
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Fiscal year ended June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018
Contractually required contribution
(actuarially determined)3,877,030$ 3,581,172$ 3,187,028$ 2,723,702$ 2,249,217$
Contributions in relation to
the actuarially determined
contributions (4,877,030) (3,581,172) (4,837,028) (4,373,702) (2,249,217)
Contribution deficiency (excess)(1,000,000)$ -$ (1,650,000)$ (1,650,000)$ -$
Covered payroll 22,987,615$ 17,513,680$ 16,946,205$ 16,542,504$ 15,403,283$
Contributions as a percentage
of covered payroll 21.22% 20.45% 28.54% 26.44% 14.60%
Notes to Schedule:
Valuation Date 6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015
Methods and Assumptions Used to Determine Contribution Rates:
Actuarial cost method Entry age Entry age Entry age Entry age Entry age
Amortization method (1)(1)(1)(1)(1)
Asset valuation method Market Value Market Value Market Value Market Value Market Value
Inflation 2.500% 2.500% 2.625% 2.75% 2.75%
Salary increases (2)(2)(2)(2)(2)
Investment rate of return 7.00% (3) 7.00% (3) 7.25% (3) 7.375% (3) 7.50% (3)
Retirement age (4)(4)(4)(4)(4)
Mortality (5)(5)(5)(5)(5)
(1) Level percentage of payroll, closed
(2) Depending on age, service, and type of employment
(3) Net of pension plan investment expense, including inflation
(4) 2.5% at 55 and 2% at 60 and 2% at 62
(5) Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study
adopted by the CalPERS Board.
* Fiscal year 2015 was the 1st year of implementation, therefore only eight years are shown.
Last Ten Fiscal Years*
CITY OF TUSTIN
SCHEDULE OF CONTRIBUTIONS
MISCELLANEOUS PLAN
97
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
Fiscal year ended June 30, 2017 June 30, 2016 June 30, 2015
Contractually required contribution
(actuarially determined)1,881,701$ 1,850,100$ 1,503,081$
Contributions in relation to
the actuarially determined
contributions (1,881,701) (1,850,100) (1,503,081)
Contribution deficiency (excess)-$ -$ -$
Covered payroll 14,684,868$ 13,828,003$ 12,847,036$
Contributions as a percentage
of covered payroll 12.81% 13.38% 11.70%
Notes to Schedule:
Valuation Date 6/30/2014 6/30/2013 6/30/2012
Methods and Assumptions Used to Determine Contribution Rates:
Actuarial cost method Entry age Entry age Entry age
Amortization method (1)(1)(1)
Asset valuation method Market Value Market Value 15 Year
Smoothed
Market Method
Inflation 2.75% 2.75% 2.75%
Salary increases (2)(2)(2)
Investment rate of return 7.50% (3) 7.50% (3) 7.50% (3)
Retirement age (4)(4)(4)
Mortality (5)(5)(5)
CITY OF TUSTIN
SCHEDULE OF CONTRIBUTIONS
MISCELLANEOUS PLAN
Last Ten Fiscal Years*
98
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Fiscal year ended June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018
Measurement date June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018
Total OPEB Liability:
Service cost 531,714$ 482,722$ 437,360$ 735,504$ 714,949$
Interest on total OPEB liability 970,235 894,576 824,887 890,622 862,866
Differences between expected and actual experience (10,715) 627,373 (1,778,679) - -
Changes of assumptions 639,802 - (416,384) (398,848) -
Benefit payments (839,870) (849,652) (791,153) (777,685) (686,172)
Net Change in Total OPEB Liability 1,291,166 1,155,019 (1,723,969) 449,593 891,643
Total OPEB Liability - Beginning of Year 14,776,533 13,621,514 15,345,483 14,895,890 14,004,247
Total OPEB Liability - End of Year (a)16,067,699 14,776,533 13,621,514 15,345,483 14,895,890
Plan Fiduciary Net Position:
Contributions - employer 1,339,870 849,652 1,291,153 1,277,685 1,686,172
Net investment income (335,000) 431,637 97,677 77,171 3,283
Benefit payments (839,870) (849,652) (791,153) (777,685) (686,172)
Administrative expense (14,404) (13,016) (11,216) - -
Net Change in Plan Fiduciary Net Position 150,596 418,621 586,461 577,171 1,003,283
Plan Fiduciary Net Position - Beginning of Year 2,585,536 2,166,915 1,580,454 1,003,283 -
Plan Fiduciary Net Position - End of Year (b)2,736,132 2,585,536 2,166,915 1,580,454 1,003,283
Net OPEB Liability - Ending (a)-(b)13,331,567$ 12,190,997$ 11,454,599$ 13,765,029$ 13,892,607$
Plan fiduciary net position as a percentage of the
total OPEB liability 17.03%17.50%15.91%10.30%6.74%
Covered - employee payroll 39,276,574$ 31,930,486$ 34,926,881$ 23,559,635$ 24,156,049$
Net OPEB liability as percentage of
covered - employee payroll 33.94%38.18%32.80%58.43%57.51%
Notes to Schedule:
Benefit Changes:
There were no changes in benefits.
Changes in Assumptions:
From fiscal year June 30, 2018 to June 30, 2019:
From fiscal year June 30, 2019 to June 30, 2020:
From fiscal year June 30, 2020 to June 30, 2021:
There were no changes in assumptions.
From fiscal year June 30, 2021 to June 30, 2022:
Healthcare cost trend rates changed to 4.00% for 2023, 5.20% for 2024-2069 and 4.00% for 2070 and later years.
* Fiscal year 2018 was the first year of implementation; therefore, only five years are shown.
CITY OF TUSTIN
SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS
Last Ten Fiscal Years*
The discount rate increased from 6.00%to 6.25%.The inflation rate decreased from 2.75%to 2.50%.Salary increase changed from 2.875%
to 2.75%. June 30, 2018 contained healthcare cost trend rates of 7.00% trending down to 3.84% over 58 years while June 30, 2019 contained
healthcare cost trend rates from 6.50% trending down to 3.84% over 57 years.
The inflation rate increased from 2.50% to 2.75%. Healthcare cost trend rates changed to 3.50% trending down to 4.00% for 2070 and later
years.
99
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Fiscal year ended June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018
Actuarially determined contribution 1,597,315$ 1,354,712$ 1,318,454$ 1,780,746$ 1,729,589$
Contributions in relation to the
actuarially determined contributions (1,339,870) (849,652) (1,291,153) (1,277,685) (1,686,172)
Contribution deficiency (excess)257,445$ 505,060$ 27,301$ 503,061$ 43,417$
Covered - employee payroll 39,276,574$ 31,930,486$ 34,926,881$ 23,559,635$ 24,156,049$
Contributions as a percentage of
covered-employee payroll 3.41% 2.66% 3.70% 5.42% 6.98%
Notes to Schedule:
Valuation Date 6/30/2020 6/30/2019 6/30/2019 6/30/2017 6/30/2017
Methods and Assumptions Used to Determine Contribution Rates:
Actuarial cost method Entry age Entry age Entry age Entry age Entry age
Amortization method (1)(1)(1)(1)(1)
Inflation 2.75% 2.75% 2.75% 2.50% 2.50%
Salary increases 2.75% 2.75% 2.75% 2.75% 2.75%
Healthcare trend rates (4)(3)(3)(2)(2)
Rate of return on assets 6.25% 6.25% 6.25% 6.25% 6.25%
Mortality rate CalPERS Rates CalPERS Rates CalPERS Rates CalPERS Rates CalPERS Rates
Retirement rates CalPERS Rates CalPERS Rates CalPERS Rates CalPERS Rates CalPERS Rates
(1) Level percentage of payroll, closed
(2) 7.00%, trending down to 3.84%
(3) 3.50% until 2023, 5.20% for 2024 to 2069 and 4.00% for 2070 and later years
(4) 4.00% until 2023, 5.20% for 2024 to 2069 and 4.00% for 2070 and later years
* Fiscal year 2018 was the first year of implementation; therefore, only five years are shown.
CITY OF TUSTIN
SCHEDULE OF CONTRIBUTIONS - OPEB
Last Ten Fiscal Years*
100
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
Retiree Health Plan
(1)
*Initial deposit to the OPEB trust was made on June 26, 2018.
CITY OF TUSTIN
OTHER POST-EMPLOYMENT BENEFIT PLAN
ANNUAL MONEY-WEIGHTED RATE OF RETURN ON INVESTMENTS
Last Ten Fiscal Years*
Fiscal Year Ended Annual Money-Weighted Rate of Return, Net of Investment Expense (1)
Ten years of historical information is required by the Governmental Accounting Standards Board Statement No. 74. Fiscal year
ended June 30, 2018 was the first year of implementation; therefore, only five years are presented.
6/30/2020 5.35%
6/30/2018 N/A*
6/30/2019 6.16%
6/30/2021 19.62%
6/30/2022 -11.23%
101
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Variance with
Final Budget
Positive
Original Final Actual (Negative)
REVENUES:
Taxes 56,646,894$ 61,904,700$ 63,868,163$ 1,963,463$
Licenses and permits 1,361,102 1,894,290 2,179,335 285,045
Fines and forfeitures 916,000 944,450 1,011,519 67,069
Investment income (loss)983,000 563,000 (3,301,154) (3,864,154)
Intergovernmental revenue 3,348,645 3,614,362 2,107,144 (1,507,218)
Charges for services 7,581,883 7,660,666 4,209,793 (3,450,873)
Rental income 1,881,841 1,897,970 2,866,998 969,028
Other revenue 686,881 686,881 11,711,168 11,024,287
Gain on sale of land held for resale - - 56,048,775 56,048,775
TOTAL REVENUES 73,406,246 79,166,319 140,701,741 61,535,422
EXPENDITURES:
Current:
General government 21,428,734 21,865,717 18,524,141 3,341,576
Public safety 41,753,066 43,520,346 41,389,452 2,130,894
Public works 15,451,939 15,727,018 15,550,797 176,221
Community services 6,814,926 7,902,542 6,307,129 1,595,413
Capital outlay 17,931,414 22,649,773 4,801,758 17,848,015
Debt service:
Principal retirement 81,200 81,200 107,990 (26,790)
Interest expense 3,500 3,500 24,208 (20,708)
TOTAL EXPENDITURES 103,464,779 111,750,096 86,705,475 25,044,621
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (30,058,533) (32,583,777) 53,996,266 86,580,043
OTHER FINANCING SOURCES (USES):
Transfer in 10,940,363 14,445,046 10,028,533 (4,416,513)
Transfer out (6,167,544) (8,227,044) (2,358,888) 5,868,156
TOTAL OTHER
FINANCING SOURCES (USES) 4,772,819 6,218,002 7,669,645 1,451,643
NET CHANGE IN FUND BALANCE (25,285,714) (26,365,775) 61,665,911 88,031,686
FUND BALANCE - BEGINNING OF YEAR 202,697,755 202,697,755 202,697,755 -
FUND BALANCE - END OF YEAR 177,412,041$ 176,331,980$ 264,363,666$ 88,031,686$
CITY OF TUSTIN
For the year ended June 30, 2022
GENERAL FUND
BUDGETARY COMPARISON SCHEDULE
Budgeted Amounts
See accompanying notes to the required supplementary information
102
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Variance with
Final Budget
Positive
Original Final Actual (Negative)
REVENUES:
Investment income (loss)-$ -$ (18,839)$ (18,839)$
Intergovernmental revenue - - 385,545 385,545
Other revenue 386,400 386,400 26,909 (359,491)
TOTAL REVENUES 386,400 386,400 393,615 7,215
EXPENDITURES:
Current:
Community services 1,478,544 1,486,250 479,850 1,006,400
Principal - - 23,374 (23,374)
Interest - - 1,103 (1,103)
TOTAL EXPENDITURES 1,478,544 1,486,250 504,327 981,923
NET CHANGE IN FUND BALANCE (1,092,144) (1,099,850) (110,712) 989,138
FUND BALANCE - BEGINNING OF YEAR 881,458 881,458 881,458 -
FUND BALANCE - END OF YEAR (210,686)$ (218,392)$ 770,746$ 989,138$
Budgeted Amounts
CITY OF TUSTIN
BUDGETARY COMPARISON SCHEDULE
HOUSING AUTHORITY SPECIAL REVENUE FUND
For the year ended June 30, 2022
See accompanying notes to the required supplementary information
103
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Variance with
Final Budget
Positive
REVENUES:Original Final Actual (Negative)
Investment income (loss)-$ -$ 23,532$ 23,532$
Intergovernmental revenue - 19,380,784 6,335,600 (13,045,184)
TOTAL REVENUES - 19,380,784 6,359,132 (13,021,652)
EXPENDITURES:
Current:
Community Services - 7,380,784 2,959,132 4,421,652
TOTAL EXPENDITURES - 7,380,784 2,959,132 4,421,652
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES - 12,000,000 3,400,000 (8,600,000)
OTHER FINANCING SOURCES (USES):
Transfer out - (3,400,000) (3,400,000) -
TOTAL OTHER
FINANCING SOURCES (USES)- (3,400,000) (3,400,000) -
NET CHANGE IN FUND BALANCE - 8,600,000 - (8,600,000)
FUND BALANCE - BEGINNING OF YEAR - - - -
FUND BALANCE - END OF YEAR -$ 8,600,000$ -$ (8,600,000)$
CITY OF TUSTIN
BUDGETARY COMPARISON SCHEDULE
ARPA SPECIAL REVENUE FUND
For the year ended June 30, 2022
Budgeted Amounts
See accompanying notes to the required supplementary information
104
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Variance with
Final Budget
Positive
Original Final Actual (Negative)
REVENUES:
Investment income (loss)20,000$ 20,000$ 75,754$ 55,754$
Intergovernmental revenue - - 5,498 5,498
Charges for services 12,000 12,000 19,211 7,211
Rental income 325,000 325,000 392,123 67,123
TOTAL REVENUES 357,000 357,000 492,586 135,586
EXPENDITURES:
Current:
Community services - - 53,040 (53,040)
Capital outlay 1,518,412 2,339,308 782,596 1,556,712
TOTAL EXPENDITURES 1,518,412 2,339,308 835,636 1,503,672
EXCESS OF REVENUES OVER
EXPENDITURES (1,161,412) (1,982,308) (343,050) 1,639,258
NET CHANGE IN FUND BALANCE (1,161,412) (1,982,308) (343,050) 1,639,258
FUND BALANCE - BEGINNING OF YEAR 2,337,335 2,337,335 2,337,335 -
FUND BALANCE - END OF YEAR 1,175,923$ 355,027$ 1,994,285$ 1,639,258$
Budgeted Amounts
CITY OF TUSTIN
For the year ended June 30, 2022
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
PARK ACQUISITION AND DEVELOPMENT SPECIAL REVENUE FUND
See accompanying notes to the required supplementary information
105
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CITY OF TUSTIN
Notes to Required Supplementary Information
June 30, 2022
NOTE 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.
(2) 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 two Special Revenue Funds noted below 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) Formal 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. Unspent capital projects appropriations are
an automatic supplemental appropriation for the next year. All other operating appropriations
lapse unless they are re-appropriated through the formal budget process.
(4) Annual budgets are adopted for the General and Special Revenue Funds, except for the Asset
Forfeiture Special Revenue Fund and the Voluntary Workforce Housing Incentive Special
Revenue Fund, 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 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.
106
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Supplementary
Schedules
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
SUPPLEMENTARY INFORMATION
107
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CITY OF TUSTIN
Other Governmental Funds
June 30, 2022
SPECIAL REVENUE FUNDS
The 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.
Asset Forfeiture – This fund is used to account for monies received from the Federal government that
are used for special law enforcement purchases.
Air Quality – This fund is used to account for funds received from the 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 AB3229, Chapter 134, of the 1996 Statues and is an appropriation from the State Budget
for the “Citizen Option for Public Safety Program”. This fund 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.
Special Tax B – This fund is used to account for Special Tax B perpetual tax levied on taxable property
in the Tustin Legacy to pay for public services and administrative expenses.
Road Maintenance and Rehabilitation – This fund is used to account for revenues and expenditures
apportioned under the Road Repair and Accountability Act of 2017 (SB1) for read maintenance and
rehabilitation.
Voluntary Workforce Housing Incentive – This fund is used to account for in-lieu fees collected and
the associated expenditures that support development of City affordable housing programs and projects
under the City of Tustin Ordinance 1491.
Solid Waste – This fund is used to account for solid waste program revenues and expenditures.
Measure M – This fund is used to account for monies received from the County for street and
maintenance projects.
108
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CITY OF TUSTIN
Other Governmental Funds
June 30, 2022
CAPITAL PROJECTS FUNDS
The Capital Projects Funds are used to account for financial resources to be used for the acquisition or
construction of major capital facilities.
Construction 95-1 – This fund accounts for infrastructure improvements to the Tustin 95-1 Area.
Other Capital Projects – This fund is used to account for capital projects which are not funded by a
specific source.
MCAS 2010 – This fund is used to account for capital project costs at the Marine Corps Air Station.
CFD Construction – This fund is used to account for construction and improvements to the Tustin
Legacy area.
109
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DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
Road
Supplemental Maintenance
Asset Air Law Special and
Gas Tax Forfeiture Quality Enforcement Tax B Rehabilitation
Cash and investments 5,036,428$ 249,242$ 116,817$ 278,086$ 1,750$ 5,358,337$
Restricted cash and investments - - - - - -
Receivables:
Accounts 150,524 - 26,315 - 47,660 279,790
Interest 11,018 543 251 768 - 11,696
TOTAL ASSETS 5,197,970$ 249,785$ 143,383$ 278,854$ 49,410$ 5,649,823$
LIABILITIES:
Accounts payable and
accrued liabilities 214,648$ -$ -$ -$ 1,750$ 1,231$
Due to other funds - - - - - -
Unearned revenue - - - - - -
TOTAL LIABILITIES 214,648 - - - 1,750 1,231
DEFERRED INFLOWS
OF RESOURCES:
Unavailable revenue - - 26,315 - - -
FUND BALANCES:
Restricted 4,983,322 249,785 117,068 278,854 47,660 5,648,592
Assigned - - - - - -
TOTAL FUND BALANCES 4,983,322 249,785 117,068 278,854 47,660 5,648,592
TOTAL LIABILITIES, DEFERRED
INFLOWS OF RESOURCES
AND FUND BALANCES 5,197,970$ 249,785$ 143,383$ 278,854$ 49,410$ 5,649,823$
CITY OF TUSTIN
ASSETS
LIABILITIES, DEFERRED
INFLOWS OF RESOURCES
AND FUND BALANCES
Special Revenue Funds
COMBINING BALANCE SHEET
OTHER GOVERNMENTAL FUNDS
June 30, 2022
110
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Voluntary Total
Workforce Other Other
Housing Solid Construction Capital MCAS CFD Governmental
Incentive Waste Measure M 95-1 Projects 2010 Construction Funds
2,030,449$ 1,492,806$ 2,961,774$ 332,609$ 4,958,556$ -$ -$ 22,816,854$
- - 77,686 - 11,410 - 2,020,941 2,110,037
- 17,655 366,407 - - - - 888,351
4,428 2,267 6,601 - 9,913 - - 47,485
2,034,877$ 1,512,728$ 3,412,468$ 332,609$ 4,979,879$ -$ 2,020,941$ 25,862,727$
-$ 82,308$ 421,632$ -$ 160,564$ -$ 808,776$ 1,690,909$
- - - - - - 6,900 6,900
- 113,786 - - - - - 113,786
- 196,094 421,632 - 160,564 - 815,676 1,811,595
- - - - - - - 26,315
2,034,877 1,316,634 2,990,836 332,609 11,410 - 1,205,265 19,216,912
- - - - 4,807,905 - - 4,807,905
2,034,877 1,316,634 2,990,836 332,609 4,819,315 - 1,205,265 24,024,817
2,034,877$ 1,512,728$ 3,412,468$ 332,609$ 4,979,879$ -$ 2,020,941$ 25,862,727$
Capital Projects FundsSpecial Revenue Funds (Continued)
111
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Road
Supplemental Maintenance
Asset Air Law Special and
Gas Tax Forfeiture Quality Enforcement Tax B Rehabilitation
REVENUES:
Taxes -$ -$ -$ -$ -$ -$
Investment income (loss)(67,279) (3,335) (2,253) (4,727) - (72,558)
Intergovernmental revenue 1,695,077 8,865 77,084 197,414 4,603,670 1,613,614
Charges for services - - - - - -
Other revenue - - - - - -
TOTAL REVENUES 1,627,798 5,530 74,831 192,687 4,603,670 1,541,056
EXPENDITURES:
Current:
General government - - 23 - 7,000 -
Public safety - - - 125,625 - -
Public works 1,357,181 - - - - 23,439
Capital outlay 223,132 - 97,027 - - 160
TOTAL EXPENDITURES 1,580,313 - 97,050 125,625 7,000 23,599
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 47,485 5,530 (22,219) 67,062 4,596,670 1,517,457
OTHER FINANCING SOURCES (USES):
Transfers in 44,871 - - - - -
Transfers out - - - (46,443) (4,617,930) -
TOTAL OTHER
FINANCING (USES)44,871 - - (46,443) (4,617,930) -
NET CHANGE IN
FUND BALANCES 92,356 5,530 (22,219) 20,619 (21,260) 1,517,457
FUND BALANCES - BEGINNING
OF YEAR 4,890,966 244,255 139,287 258,235 68,920 4,131,135
FUND BALANCES - END OF YEAR 4,983,322$ 249,785$ 117,068$ 278,854$ 47,660$ 5,648,592$
Special Revenue Funds
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CITY OF TUSTIN
CHANGES IN FUND BALANCES - OTHER GOVERNMENTAL FUNDS
For the year ended June 30, 2022
112
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Voluntary Total
Workforce Other Other
Housing Solid Construction Capital MCAS CFD Governmental
Incentive Waste Measure M 95-1 Projects 2010 Construction Funds
-$ 209,868$ -$ -$ -$ -$ -$ 209,868$
(27,116) (12,562) (28,073) - (64,478) 1 2,396 (279,984)
- 45,975 2,099,157 - - - - 10,340,856
- 64,610 - - - - - 64,610
- 456,841 - - 1,763 - 41,402 500,006
(27,116) 764,732 2,071,084 - (62,715) 1 43,798 10,835,356
- 94,941 - - - - - 101,964
- - - - - - - 125,625
- 261,753 1,061 - 750 715 169,388 1,814,287
- - 3,170,852 - 2,465,628 - 3,413,499 9,370,298
- 356,694 3,171,913 - 2,466,378 715 3,582,887 11,412,174
(27,116) 408,038 (1,100,829) - (2,529,093) (714) (3,539,089) (576,818)
- - - - 2,421,600 - - 2,466,471
- - (1,963,211) - - - - (6,627,584)
- - (1,963,211) - 2,421,600 - - (4,161,113)
(27,116) 408,038 (3,064,040) - (107,493) (714) (3,539,089) (4,737,931)
2,061,993 908,596 6,054,876 332,609 4,926,808 714 4,744,354 28,762,748
2,034,877$ 1,316,634$ 2,990,836$ 332,609$ 4,819,315$ -$ 1,205,265$ 24,024,817$
Capital Projects FundsSpecial Revenue Funds (Continued)
113
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
Variance with
Final Budget
Positive
Original Final Actual (Negative)
REVENUES:
Investment income (loss)-$ -$ (67,279)$ (67,279)$
Intergovernmental revenue 2,032,800 2,032,800 1,695,077 (337,723)
TOTAL REVENUES 2,032,800 2,032,800 1,627,798 (405,002)
EXPENDITURES:
Current:
Public works 1,432,802 1,439,374 1,357,181 82,193
Capital outlay 550,000 685,454 223,132 462,322
TOTAL EXPENDITURES 1,982,802 2,124,828 1,580,313 544,515
EXCESS OF REVENUES OVER (UNDER)
EXPENDITURES 49,998 (92,028) 47,485 139,513
OTHER FINANCING SOURCES (USES):
Transfer in - - 44,871 44,871
NET CHANGE IN FUND BALANCE 49,998 (92,028) 92,356 184,384
FUND BALANCE - BEGINNING OF YEAR 4,890,966 4,890,966 4,890,966 -
FUND BALANCE - END OF YEAR 4,940,964$ 4,798,938$ 4,983,322$ 184,384$
Budgeted Amounts
CITY OF TUSTIN
For the year ended June 30, 2022
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
GAS TAX SPECIAL REVENUE FUND
114
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
Variance with
Final Budget
Positive
Original Final Actual (Negative)
REVENUES:
Investment income (loss)500$ 500$ (2,253)$ (2,753)$
Intergovernmental revenue 95,900 95,900 77,084 (18,816)
TOTAL REVENUES 96,400 96,400 74,831 (21,569)
EXPENDITURES:
Current:
General government - - 23 (23)
Capital outlay - 199,875 97,027 102,848
TOTAL EXPENDITURES - 199,875 97,050 102,825
EXCESS OF REVENUES OVER (UNDER)
EXPENDITURES 96,400 (103,475) (22,219) 81,256
NET CHANGE IN FUND BALANCE 96,400 (103,475) (22,219) 81,256
FUND BALANCE - BEGINNING OF YEAR 139,287 139,287 139,287 -
FUND BALANCE - END OF YEAR 235,687$ 35,812$ 117,068$ 81,256$
Budgeted Amounts
CITY OF TUSTIN
For the year ended June 30, 2022
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
AIR QUALITY SPECIAL REVENUE FUND
115
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
Variance with
Final Budget
Positive
Original Final Actual (Negative)
REVENUES:
Investment income (loss)-$ -$ (4,727)$ (4,727)$
Intergovernmental revenue 176,000 176,000 197,414 21,414
TOTAL REVENUES 176,000 176,000 192,687 16,687
EXPENDITURES:
Current:
Public safety 142,300 145,726 125,625 20,101
TOTAL EXPENDITURES 142,300 145,726 125,625 20,101
EXCESS OF REVENUES OVER
EXPENDITURES 33,700 30,274 67,062 36,788
OTHER FINANCING SOURCES (USES):
Transfer out - - (46,443) (46,443)
NET CHANGE IN FUND BALANCE 33,700 30,274 20,619 (9,655)
FUND BALANCE - BEGINNING OF YEAR 258,235 258,235 258,235 -
FUND BALANCE - END OF YEAR 291,935$ 288,509$ 278,854$ (9,655)$
Budgeted Amounts
CITY OF TUSTIN
For the year ended June 30, 2022
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
SUPPLEMENTAL LAW ENFORCEMENT SPECIAL REVENUE FUND
116
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
Variance with
Final Budget
Positive
Original Final Actual (Negative)
REVENUES:
Intergovernmental revenue 4,607,819$ 4,607,819$ 4,603,670$ (4,149)$
TOTAL REVENUES 4,607,819 4,607,819 4,603,670 (4,149)
EXPENDITURES:
Current:
General government - 7,000 7,000 -
TOTAL EXPENDITURES - 7,000 7,000 -
EXCESS OF REVENUES OVER
EXPENDITURES 4,607,819 4,600,819 4,596,670 (4,149)
OTHER FINANCING SOURCES (USES):
Transfer out (4,607,819) (4,617,929) (4,617,930) (1)
NET CHANGE IN FUND BALANCE - (17,110) (21,260) (4,150)
FUND BALANCE - BEGINNING OF YEAR 68,920 68,920 68,920 -
FUND BALANCE - END OF YEAR 68,920$ 51,810$ 47,660$ (4,150)$
Budgeted Amounts
CITY OF TUSTIN
For the year ended June 30, 2022
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
SPECIAL TAX B SPECIAL REVENUE FUND
117
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
Variance with
Final Budget
Positive
Original Final Actual (Negative)
REVENUES:
Investment income (loss)-$ -$ (72,558)$ (72,558)$
Intergovernmental revenue 1,590,300 1,590,300 1,613,614 23,314
TOTAL REVENUES 1,590,300 1,590,300 1,541,056 (49,244)
EXPENDITURES:
Current:
Public works 22,400 22,854 23,439 (585)
Capital outlay 1,231,854 2,041,670 160 2,041,510
TOTAL EXPENDITURES 1,254,254 2,064,524 23,599 2,040,925
EXCESS OF REVENUES OVER (UNDER)
EXPENDITURES 336,046 (474,224) 1,517,457 1,991,681
NET CHANGE IN FUND BALANCE 336,046 (474,224) 1,517,457 1,991,681
FUND BALANCE - BEGINNING OF YEAR 4,131,135 4,131,135 4,131,135 -
FUND BALANCE - END OF YEAR 4,467,181$ 3,656,911$ 5,648,592$ 1,991,681$
Budgeted Amounts
CITY OF TUSTIN
For the year ended June 30, 2022
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
ROAD MAINTENANCE AND REHABILITATION SPECIAL REVENUE FUND
118
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
Variance with
Final Budget
Positive
Original Final Actual (Negative)
REVENUES:
Taxes 210,000$ 210,000$ 209,868$ (132)$
Investment income (loss)- - (12,562) (12,562)
Intergovernmental revenue - - 45,975 45,975
Charges for services 10,000 10,000 64,610 54,610
Other revenue - - 456,841 456,841
TOTAL REVENUES 220,000 220,000 764,732 544,732
EXPENDITURES:
Current:
General government 5,500 5,500 94,941 (89,441)
Public works 218,500 221,764 261,753 (39,989)
TOTAL EXPENDITURES 224,000 227,264 356,694 (129,430)
EXCESS OF REVENUES OVER (UNDER)
EXPENDITURES (4,000) (7,264) 408,038 415,302
NET CHANGE IN FUND BALANCE (4,000) (7,264) 408,038 415,302
FUND BALANCE - BEGINNING OF YEAR 908,596 908,596 908,596 -
FUND BALANCE - END OF YEAR 904,596$ 901,332$ 1,316,634$ 415,302$
Budgeted Amounts
CITY OF TUSTIN
For the year ended June 30, 2022
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
SOLID WASTE SPECIAL REVENUE FUND
119
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
Variance with
Final Budget
Positive
Original Final Actual (Negative)
REVENUES:
Investment income (loss)50,000$ 50,000$ (28,073)$ (78,073)$
Intergovernmental revenue 1,646,900 1,646,900 2,099,157 452,257
TOTAL REVENUES 1,696,900 1,696,900 2,071,084 374,184
EXPENDITURES:
Current:
Public works - - 1,061 (1,061)
Capital outlay 2,263,740 4,113,843 3,170,852 942,991
TOTAL EXPENDITURES 2,263,740 4,113,843 3,171,913 941,930
EXCESS OF REVENUES OVER
EXPENDITURES (566,840) (2,416,943) (1,100,829) 1,316,114
OTHER FINANCING SOURCES (USES):
Transfer out (40,000) (1,746,510) (1,963,211) (216,701)
NET CHANGE IN FUND BALANCE (606,840) (4,163,453) (3,064,040) 1,099,413
FUND BALANCE - BEGINNING OF YEAR 6,054,876 6,054,876 6,054,876 -
FUND BALANCE - END OF YEAR 5,448,036$ 1,891,423$ 2,990,836$ 1,099,413$
Budgeted Amounts
CITY OF TUSTIN
For the year ended June 30, 2022
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
MEASURE M SPECIAL REVENUE FUND
120
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
Community Community Community Community Community
Facilities Facilities Facilities Facilities Facilities
District District District District District
04-01 06-01 07-01 2014-1 2018-1 Total
Restricted cash and investments 1,138,697$ 6,354,996$ 1,864,560$ 3,514,626$ -$ 12,872,879$
Accounts receivable 5,522 45,301 - 19,958 - 70,781
TOTAL ASSETS 1,144,219$ 6,400,297$ 1,864,560$ 3,534,584$ -$ 12,943,660$
Restricted for:
Bondholders 1,144,219$ 6,400,297$ 1,864,560$ 3,534,584$ -$ 12,943,660$
NET POSITION
ASSETS
CITY OF TUSTIN
COMBINING STATEMENT OF FIDUCIARY NET POSITION
CUSTODIAL FUNDS
June 30, 2022
121
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
Community Community Community Community Community
Facilities Facilities Facilities Facilities Facilities
District District District District District
04-01 06-01 07-01 2014-1 2018-1 Total
Tax revenue 719,849$ 3,636,248$ 1,064,179$ 1,588,903$ -$ 7,009,179$
Investment Income 163 5,141 1,489 2,548 - 9,341
TOTAL ADDITIONS 720,012 3,641,389 1,065,668 1,591,451 - 7,018,520
Administrative expenses 33,560 82,931 40,961 29,021 3,840 190,313
Principal 380,000 1,205,000 320,000 245,000 - 2,150,000
Interest 300,806 2,232,644 606,044 1,276,475 - 4,415,969
TOTAL DEDUCTIONS 714,366 3,520,575 967,005 1,550,496 3,840 6,756,282
NET INCREASE (DECREASE)
IN FIDUCIARY NET POSITION 5,646 120,814 98,663 40,955 (3,840) 262,238
NET POSITION AT BEGINNING
OF YEAR 1,138,573 6,279,483 1,765,897 3,493,629 3,840 12,681,422
NET POSITION AT END OF YEAR 1,144,219$ 6,400,297$ 1,864,560$ 3,534,584$ -$ 12,943,660$
ADDITIONS
DEDUCTIONS
CITY OF TUSTIN
COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
CUSTODIAL FUNDS
For the year ended June 30, 2022
122
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
Statistical
Section
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
STATISTICAL SECTION
123
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
CITY OF TUSTIN
Description of Statistical Contents
June 30, 2022
This part of the City of Tustin’s Annual Comprehensive Financial Report presents detail information as
a context for understanding what the information in the financial statements, note disclosures, and
required supplementary information says about the City’s overall financial health.
Contents: Pages
Financial Trends – These schedules contain trend information to help the reader
understand how the City’s financial performance and well-being have changed
over time. 125
Revenue Capacity – These schedules contain information to help the reader
assess the City’s most significant local revenue source, the property tax. 135
Debt Capacity – These schedules present information to help the read assess the
affordability of the City’s current levels of outstanding debt and the City’s
ability to issue additional debt in the future. 141
Demographic and Economic Information – These schedules offer demographic
and economic indicators to help the reader understand the environment within
which the City’s financial activities take place. 147
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. 149
Sources:
Unless otherwise noted, the information in these schedules is derived from the
Annual Comprehensive Financial Reports for the relevant year.
124
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
2013 2014 2015 2016
Governmental activities:
Net investment in capital assets 431,761,288$ 461,673,323$ 456,649,085$ 483,229,135$
Restricted 54,367,385 36,693,458 72,929,522 95,241,025
Unrestricted 177,532,888 93,877,440 140,727,040 107,224,779
Total governmental activities net position 663,661,561$ 592,244,221$ 670,305,647$ 685,694,939$
Business-type activities:
Net investment in capital assets 24,171,745$ 23,657,878$ 24,270,718$ 25,443,651$
Restricted - - - -
Unrestricted 7,094,771 8,326,340 11,845,734 12,227,557
Total business-type activities net position 31,266,516$ 31,984,218$ 36,116,452$ 37,671,208$
Primary government:
Net investment in capital assets 455,933,033$ 485,331,201$ 480,919,803$ 508,672,786$
Restricted 54,367,385 36,693,458 72,929,522 95,241,025
Unrestricted 184,627,659 102,203,780 152,572,774 119,452,336
Total primary government net position 694,928,077$ 624,228,439$ 706,422,099$ 723,366,147$
* Fiscal year 2020 net position was restated.
Fiscal Year
CITY OF TUSTIN
NET POSITION BY COMPONENT
Last Ten Fiscal Years
(accrual basis of accounting)
125
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
2017 2018 2019 2020*2021 2022
490,574,647$ 499,190,473$ 520,166,300$ 549,473,651$ 565,395,034$ 540,256,185$
102,027,853 87,395,188 67,892,989 59,304,350 39,407,529 48,269,367
144,442,931 151,119,177 108,567,573 114,195,576 106,773,829 177,884,930
737,045,431$ 737,704,838$ 696,626,862$ 722,973,577$ 711,576,392$ 766,410,482$
23,252,432$ 22,753,763$ 20,650,435$ 24,145,887$ 25,941,133$ 29,184,048$
- - - - - -
15,129,697 16,505,744 19,489,664 15,070,837 12,918,451 9,775,999
38,382,129$ 39,259,507$ 40,140,099$ 39,216,724$ 38,859,584$ 38,960,047$
513,827,079$ 521,944,236$ 540,816,735$ 573,619,538$ 591,336,167$ 569,440,233$
102,027,853 87,395,188 67,892,989 59,304,350 39,407,529 48,269,367
159,572,628 167,624,921 128,057,237 129,266,413 119,692,280 187,660,929
775,427,560$ 776,964,345$ 736,766,961$ 762,190,301$ 750,435,976$ 805,370,529$
Fiscal Year
126
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
2013 2014 2015 2016
Expenses:
Governmental activities:
General government 18,705,913$ 14,825,780$ 17,121,057$ 20,023,280$
Public safety 30,702,298 28,440,799 29,886,284 27,779,830
Public works 15,087,234 49,538,371 34,435,214 47,326,664
Community services 3,201,865 3,498,460 3,699,059 7,869,124
Interest on long-term debt 967,115 - - -
Total governmental activities expenses 68,664,425 96,303,410 85,141,614 102,998,898
Business-type activities:
Water 13,574,149 16,100,137 15,982,078 15,586,463
Total business-type activities expenses 13,574,149 16,100,137 15,982,078 15,586,463
Program revenues:
Governmental activities:
Charges for services:
General government 763,101 249,237 252,074 2,072,540
Public safety 917,947 920,112 1,071,099 1,195,350
Public works 1,248,595 1,710,813 1,564,314 3,538,906
Community services 926,432 967,134 892,102 953,149
Operating grants and contributions 4,513,158 3,325,304 3,546,823 2,722,978
Capital grants and contributions 20,998,311 12,222,106 20,244,479 48,711,583
Total governmental activities
program revenues 29,367,544 19,394,706 27,570,891 59,194,506
Business-type activities:
Charges for services:
Water 16,688,773 18,682,821 19,375,359 16,511,795
Operating grants and contributions - - - -
Capital grants and contributions - - - -
Total business-type activities
program revenues 16,688,773 18,682,821 19,375,359 16,511,795
Net revenues (expenses):
Governmental activities (39,296,881)$ (76,908,704)$ (57,570,723)$ (43,804,392)$
Business-type activities 3,114,624 2,582,684 3,393,281 925,332
Total net revenues (expenses) (36,182,257)$ (74,326,020)$ (54,177,442)$ (42,879,060)$
Fiscal Year
CHANGES IN NET POSITION
CITY OF TUSTIN
EXPENSES AND PROGRAM REVENUES
Last Ten Fiscal Years
(accrual basis of accounting)
127
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
2017 2018 2019 2020 2021 2022
24,504,764$ 23,949,544$ 27,097,686$ 29,282,004$ 27,172,397$ 19,435,937$
34,611,078 33,713,796 36,215,060 39,064,730 42,307,312 37,274,550
24,822,480 37,599,662 45,849,976 40,430,009 25,720,382 34,752,971
19,524,660 10,795,733 20,304,550 5,682,249 7,898,475 11,705,919
5,802 12,043 9,297 6,444 3,476 25,311
103,468,784 106,070,778 129,476,569 114,465,436 103,102,042 103,194,688
16,654,429 17,680,886 17,763,633 17,767,158 19,283,136 21,303,398
16,654,429 17,680,886 17,763,633 17,767,158 19,283,136 21,303,398
1,979,211 1,630,903 1,920,214 2,157,735 2,011,470 3,072,210
1,255,299 1,283,672 1,285,584 1,205,519 1,298,587 1,222,841
1,861,045 2,167,726 3,300,906 3,123,961 2,586,033 5,825,437
1,101,294 1,434,988 2,426,578 1,892,126 1,232,539 2,654,817
2,742,140 3,863,547 4,952,271 4,911,642 8,618,631 12,264,401
26,535,693 7,641,510 3,942,834 4,565,393 4,422,891 12,852,760
35,474,682 18,022,346 17,828,387 17,856,376 20,170,151 37,892,466
17,100,836 18,229,013 17,329,090 17,364,694 18,891,433 19,633,007
- - - - - 48,914
- - - - - 1,575,140
17,100,836 18,229,013 17,329,090 17,364,694 18,891,433 21,257,061
(67,994,102)$ (88,048,432)$ (111,648,182)$ (96,609,060)$ (82,931,891)$ (65,302,222)$
446,407 548,127 (434,543) (402,464) (391,703) (46,337)
(67,547,695)$ (87,500,305)$ (112,082,725)$ (97,011,524)$ (83,323,594)$ (65,348,559)$
Fiscal Year
128
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
2013 2014 2015 2016
General revenues and other changes
in net position:
Governmental activities:
Taxes:
Property taxes 14,526,101$ 13,661,771$ 14,552,535$ 16,451,763$
Transient occupancy taxes 137,064 616,897 1,090,675 1,554,754
Business license taxes 377,498 393,241 419,148 406,891
Other taxes 1,655,388 1,663,215 1,763,878 1,839,963
Sales tax 21,575,405 22,288,032 22,269,896 24,513,610
Motor vehicle in lieu, unrestricted 5,951,653 6,150,893 6,380,698 6,778,329
Investment income (loss)243,921 628,180 1,052,276 2,430,087
Other general revenues 7,231,648 4,040,996 7,829,149 2,671,845
Gain on sale of land held for resale 43,335,089 - 48,136,121 -
Profit participation - - - -
Transfers - - - -
Contribution from successor agency - - 32,137,773 -
Extraordinary and special items - 1,412,257 - 2,546,442
Total governmental activities 95,033,767 50,855,482 135,632,149 59,193,684
Business-type activities:
Investment income (loss) 39,700 144,381 249,863 480,050
Miscellaneous 271,858 408,749 489,090 149,374
Transfers - - - -
Total business-type activities 311,558 553,130 738,953 629,424
Total primary government 95,345,325$ 51,408,612$ 136,371,102$ 59,823,108$
Changes in net position:
Governmental activities 55,736,886$ (26,053,222)$ 78,061,426$ 15,389,292$
Business-type activities 3,426,182 3,135,814 4,132,234 1,554,756
Total primary government 59,163,068$ (22,917,408)$ 82,193,660$ 16,944,048$
Fiscal Year
CITY OF TUSTIN
CHANGES IN NET POSITION
GENERAL REVENUES
Last Ten Fiscal Years
(accrual basis of accounting)
129
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
2017 2018 2019 2020 2021 2022
24,437,717$ 25,636,673$ 26,275,789$ 27,358,525$ 29,142,850$ 28,324,241$
1,609,318 1,575,830 1,825,957 1,593,532 1,218,924 1,857,502
420,684 431,457 466,828 438,632 416,266 435,626
1,931,185 1,781,175 1,762,642 1,792,263 1,862,200 1,850,139
25,133,146 24,925,934 26,634,458 25,487,518 30,753,042 34,391,644
37,056 43,359 39,526 64,400 58,955 92,431
611,964 1,109,193 7,167,093 4,445,124 1,676,386 (3,500,691)
4,594,651 4,838,383 6,002,632 4,556,040 1,308,076 190,141
24,241,261 33,636,759 395,281 1,014,511 85,240 56,048,775
31,327,612 - - - 5,012,767 337,972
- - - - - 108,532
- - - - - -
5,000,000 - - - - -
119,344,594 93,978,763 70,570,206 66,750,545 71,534,706 120,136,312
108,669 150,371 1,084,525 869,426 5,629 (173,093)
155,845 178,880 230,610 23,193 28,934 428,425
- - - - - (108,532)
264,514 329,251 1,315,135 892,619 34,563 146,800
119,609,108$ 94,308,014$ 71,885,341$ 67,643,164$ 71,569,269$ 120,283,112$
51,350,492$ 5,930,331$ (41,077,976)$ (29,858,515)$ (11,397,185)$ 54,834,090$
710,921 877,378 880,592 490,155 (357,140) 100,463
52,061,413$ 6,807,709$ (40,197,384)$ (29,368,360)$ (11,754,325)$ 54,934,553$
Fiscal Year
130
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
2013 2014 2015 2016
General fund:
Nonspendable 128,988,209$ 129,049,954$ 122,458,642$ 88,579,214$ 4
Restricted 19,615,343 1,352,309 16,650,332 18,657,461
Unassigned 44,368,566 1 18,781,826 84,278,138 2 79,667,061
Total general fund 192,972,118$ 149,184,089$ 223,387,112$ 186,903,736$
All other governmental funds:
Nonspendable 1,287,607$ -$ -$ 1,922$
Restricted 33,885,757 29,820,853 24,048,818 54,438,343
Assigned 16,880,590 5,493,536 37,350,531 3 26,871,816
Unassigned - - - -
Total all other governmental funds 52,053,954$ 35,314,389$ 61,399,349$ 81,312,081$
Fiscal Year
CITY OF TUSTIN
FUND BALANCES OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(modified accrual basis of accounting)
131
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
2017 2018 2019 2020*2021 2022
84,344,748$ 82,868,217$ 82,902,130$ 107,921,521$ 108,201,957$ 103,464,420$
34,901,943 41,269,878 31,250,893 16,438,469 15,684,164 24,668,684
102,517,562 116,332,458 88,768,803 74,972,202 78,811,634 136,230,562 5
221,764,253$ 240,470,553$ 202,921,826$ 199,332,192$ 202,697,755$ 264,363,666$
1,922$ -$ 1,922$ -$ 3,305$ 5,731$
51,069,708 46,322,996 37,215,903 37,107,137 27,060,075 21,976,212
20,408,936 17,719,394 5,762,048 1,432,974 4,918,161 4,807,905
- - - (628,792) - -
71,480,566$ 64,042,390$ 42,979,873$ 37,911,319$ 31,981,541$ 26,789,848$
1
2
3
4
5 Increase of $56 million due to the gain on sale of land in the former Marine Corp Air Station referred to as the Legacy.
*
Increase of $40.3 million due to the gain on sale of land in the former Marine Corp Air Station referred to as the Legacy and
land held for resale along the 55 freeway and Edinger Avenue.
Increase of $65.5 million due to the gain on sale of land held for resale of $48.1 million for the development of residential
housing and special item totaling $21.4 million due to reclassification of promissory note to long-term debt.
Increase of $31.9 million due to the transfer of bond proceeds from the Successor Agency to the TCRA to the MCAS 2010
Capital Project Fund.
Decrease of $33.9 million due to the reclassification of $34 million of land held for resale to land reported as capital assets
which is not reflected in the governmental funds statements.
Fiscal year 2020 fund balance was restated.
Fiscal Year
132
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
2013 2014 2015 2016
Revenues:
Taxes 22,703,619$ 22,808,488$ 21,426,308$ 23,525,899$
Licenses and permits 577,044 1,284,232 885,043 1,334,311
Fines and forfeitures 678,428 631,340 752,597 982,123
Investment income (loss)173,890 621,786 1,041,661 2,422,072
Intergovernmental revenues 43,126,447 29,741,754 37,302,283 42,838,003
Charges for services 2,685,080 1,787,268 1,870,401 2,357,268
Rental income 550,003 751,724 1,113,340 1,308,852
Developer contributions - - 16,934,704 26,357,490
Profit participation - - - -
Gain on sale of land held for resale 43,340,797 - 48,136,121 -
Contribution from Successor Agency - - 32,137,773 -
Other revenues 9,773,813 6,110,735 6,302,392 4,714,101
Total revenues 123,609,121 63,737,327 167,902,623 105,840,119
Expenditures:
Current:
General government 17,357,805 14,205,424 17,568,297 20,372,454
Public safety 27,944,039 28,170,314 33,062,929 27,897,182
Public works 5,980,807 5,797,705 6,417,257 7,182,380
Community services 2,752,523 3,081,299 3,170,747 7,308,498
Capital outlay 28,487,231 74,422,436 23,800,093 22,498,621
Debt service:
Principal retirement - - 5,000,000 4,101,171
Interest and fiscal charges 967,115 - - -
Total expenditures 83,489,520 125,677,178 89,019,323 89,360,306
Excess (deficiency) of revenues
over (under) expenditures 40,119,601 (61,939,851) 78,883,300 16,479,813
Other financing sources (uses):
Transfers in 6,122,454 2,084,612 5,266,102 5,453,988
Transfers out (6,122,454) (2,084,612) (5,266,102) (5,453,988)
Capital lease issued - - - -
Total other financing sources (uses) - - - -
Extraordinary gain (loss) - 1,412,257 - 976,042
Special item - - 21,404,683 (34,026,499)
Net change in fund balances 40,119,601$ (60,527,594)$ 100,287,983$ (16,570,644)$
Debt service as a percentage of
noncapital expenditures 9.00% 1.73% 8.86% 6.03%
1 Sales tax revenues were classified as intergovernmental revenues prior to June 30, 2021.
Effective June 30, 2021, sales tax revenues have been classified as taxes in the financial statements.
Fiscal Year
CITY OF TUSTIN
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(modified accrual basis of accounting)
133
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
2017 2018 2019 2020 2021 2022
24,825,401$ 25,770,970$ 26,385,383$ 27,187,012$ 58,744,483$ 1 64,078,031$
853,990 905,086 1,212,696 1,280,180 1,227,707 2,179,335
953,665 996,912 909,355 841,747 929,637 1,011,519
608,888 1,120,276 7,172,443 4,455,060 1,676,386 (3,500,691)
35,382,444 42,121,841 39,613,110 38,156,567 16,875,101 1 19,174,643
1,999,860 2,177,345 2,761,688 2,688,921 2,017,100 4,293,614
1,542,281 1,674,068 2,055,135 2,133,706 1,905,553 3,259,121
16,804,964 1,341,143 - - - -
23,495,709 7,179,553 212,651 - 5,012,767 -
24,241,261 33,636,759 395,281 1,014,511 85,240 56,048,775
- - - - - -
5,849,937 8,848,778 7,590,956 4,918,426 5,678,057 12,238,083
136,558,400 125,772,731 88,308,698 82,676,130 94,152,031 158,782,430
24,052,915 21,259,806 25,539,637 27,145,126 25,336,809 18,626,105
30,733,524 32,335,404 33,200,885 36,427,058 37,592,859 41,515,077
7,591,876 7,795,849 9,105,493 8,231,789 8,784,309 17,365,084
18,727,257 9,747,562 19,603,654 4,955,971 4,711,435 9,799,151
26,657,177 40,082,440 59,389,068 42,277,454 20,209,628 14,954,652
4,129,203 3,271,503 71,908 74,763 77,730 131,364
5,802 12,043 9,297 6,444 3,476 25,311
111,897,754 114,504,607 146,919,942 119,118,605 96,716,246 102,416,744
24,660,646 11,268,124 (58,611,244) (36,442,475) (2,564,215) 56,365,686
4,242,209 8,908,605 7,281,771 4,745,170 11,814,494 12,495,004
(4,242,209) (8,908,605) (7,281,771) (4,745,170) (11,814,494) (12,386,472)
368,356 - - - - -
368,356 - - - - 108,532
- - - - - -
- - - - - -
25,029,002$ 11,268,124$ (58,611,244)$ (36,442,475)$ (2,564,215)$ 56,474,218$
5.28%3.46%0.06%0.09%0.10%0.16%
Fiscal Year
134
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
Fiscal Year Taxable
Ended Assessed
June 30 Secured Unsecured Value
2013 6,975,148$ 295,303$ 7,270,451$
2014 7,151,192 267,629 7,418,821
2015 7,503,074 287,558 7,790,632
2016 7,924,736 293,492 8,218,228
2017 8,254,232 312,525 8,566,757
2018 8,684,095 311,475 8,995,570
2019 9,092,631 313,242 9,405,874
2020 9,494,882 324,715 9,819,597
2021 9,958,441 326,678 10,285,119
2022 10,296,800 312,672 10,609,472
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
1% based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased
by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property is only reassessed at the time
that it is sold to a new owner. At that point, the new assessed value is reassessed at the purchase price of the property sold.
The assessed valuation data shown above represents the only data currently available with respect to the actual market
value of taxable property and is subject to the limitations described above.
1 Effective February 1, 2012, the Redevelopment Agency was dissolved. The Successor Agency took over the assets
and liabilities of the former Redevelopment Agency. See Note 18 for more information.
2 This rate represents the weighted average of all individual direct rates applied by the City of Tustin.
OF TAXABLE PROPERTY
CITY OF TUSTIN
ASSESSED VALUE AND ESTIMATED ACTUAL VALUE
(IN THOUSANDS)
Last Ten Fiscal Years
City
135
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
Taxable Total
Assessed Direct Tax
Secured Unsecured Value Rate 2
2,107,792$ 123,929$ 2,231,721$ 0.302%
2,192,026 121,534 2,313,560 0.116%
2,362,339 139,834 2,502,173 0.116%
2,643,865 141,934 2,785,799 0.116%
2,872,602 138,433 3,011,035 0.116%
3,260,212 143,833 3,404,045 0.116%
3,498,105 138,599 3,811,347 0.116%
3,671,553 167,199 3,996,268 0.116%
3,900,575 186,969 4,087,544 0.116%
4,077,588 125,960 4,203,548 0.116%
Successor Agency 1
136
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
2013 2014 2015 2016
Direct Rate:
City of Tustin 0.1272$ 0.1272$ 0.1272$ 0.1272$
Tustin Unified School District 0.4397 0.4397 0.4397 0.4397
South Orange County Community College District 0.0886 0.0886 0.0886 0.0886
County of Orange 0.0617 0.0617 0.0617 0.0617
Orange County Flood Control District 0.0198 0.0198 0.0198 0.0198
Orange County Library District 0.0167 0.0167 0.0167 0.0167
Orange County Department of Education 0.0161 0.0161 0.0161 0.0161
Various Special Districts 0.2302 0.2302 0.2302 0.2302
Total Direct Rate 1.0000 1.0000 1.0000 1.0000
Overlapping Rates:
Tustin Unified School District Bonds 0.0672 0.0891 0.0696 0.0775
Metropolitan Water District Bonds 0.0035 0.0035 0.0035 0.0035
Rancho Santiago Community College District Bonds 0.0324 0.0333 0.0508 0.0504
Orange Unified School District Bonds - - - -
Irvine Ranch Water District Bonds 0.2155 0.2155 0.0960 0.0960
Santa Ana Unified School District Bonds 0.0775 0.0736 0.0687 0.0660
Irvine Unified School District Bonds - - - -
Total Overlapping Rates 0.3961 0.4150 0.2886 0.2934
Total Direct and Overlapping Rates 1.3961$ 1.4150$ 1.2886$ 1.2934$
Source: Hdl, Coren & Cone
CITY OF TUSTIN
DIRECT AND OVERLAPPING PROPERTY TAX RATES
Last Ten Fiscal Years
(rate per $100 of taxable value)
Fiscal Year
137
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
2017 2018 2019 2020 2021 2022
0.1272$ 0.1272$ 0.1272$ 0.1272$ 0.1272$ 0.1272$
0.4397 0.4397 0.4397 0.4397 0.4397 0.4397
0.0886 0.0886 0.0886 0.0886 0.0886 0.0886
0.0617 0.0617 0.0617 0.0617 0.0617 0.0617
0.0198 0.0198 0.0198 0.0198 0.0198 0.0198
0.0167 0.0167 0.0167 0.0167 0.0167 0.0167
0.0161 0.0161 0.0161 0.0161 0.0161 0.0161
0.2302 0.2302 0.2302 0.2302 0.2302 0.2302
1.0000 1.0000 1.0000 1.0000 1.0000 1.0000
0.0700 0.0687 0.0669 0.0638 0.0710 0.0652
0.0035 0.0035 0.0035 0.0035 0.0035 0.0035
0.0495 0.0509 0.0454 0.0518 0.0452 0.0429
- - 0.0269 0.0229 0.0166 0.0166
0.1270 0.1270 0.1270 0.1270 0.1270 0.1270
0.0638 0.0633 0.0556 0.0730 0.0813 0.0686
- 0.0271 0.0280 0.0253 0.0280 0.0231
0.3138 0.3405 0.3532 0.3673 0.3727 0.3469
1.3138$ 1.3405$ 1.3532$ 1.3672$ 1.3727$ 1.3469$
Fiscal Year
138
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
Percent of Percent of
Total City Total City
Taxable Taxable Taxable Taxable
Assessed Assessed Assessed Assessed
Taxpayer Value Value Value Value
Vestar Kimco Tustin LP 188,175,161$ 1.27% 158,439,243$ 1.67%
Raintree Tustin LLC 152,552,125 1.03%
Legacy Villas LLC 133,321,306 0.90%
Flight Phase I Owner LLC 119,646,679 0.81%
Tustin Market Place 89,050,545 0.60%
Costco Wholesale Corporation 77,032,127 0.52% 46,801,088 0.49%
Schools First Federal Credit Union 76,741,785 0.52%
Tustin Parc LP 65,955,463 0.45%
Rancho Santa Fe Apartments LLC 59,361,136 0.40%
Borchard Redhill SKB-Tustin LLC 58,830,040 0.40% 46,563,000 0.49%
Irvine Company LLC 271,717,606 2.86%
Avalon II California Value I 95,784,066 1.01%
PK II Larwin Square SC LP 49,776,225 0.52%
Ricoh Development 47,679,705 0.50%
Rancho Alisal LLC 36,610,468 0.39%
CP II Park Place LLC 34,761,082 0.37%
Tustin Heights SC LP 33,737,223 0.36%
1,020,666,367$ 6.90% 821,869,706$ 8.66%
Source: HdL, Coren & Cone
2022 2013
CITY OF TUSTIN
PRINCIPAL PROPERTY TAX PAYERS
Current Year and Nine Years Ago
139
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
Fiscal Taxes Levied Collections in
Year Ended for the Percent Subsequent Percent
June 30 Fiscal Year Amount of Levy Years Amount of Levy
2013 9,492,638 9,257,817 97.53% 121,715 9,379,532 98.81%
2014 9,862,476 9,655,778 97.90% 121,400 9,777,178 99.14%
2015 9,287,149 9,007,785 96.99% 163,497 9,171,282 98.75%
2016 10,847,984 10,541,516 97.17% 233,935 10,775,451 99.33%
2017 11,278,643 10,996,314 97.50% 207,332 11,203,646 99.34%
2018 11,844,150 11,615,833 98.07% 174,112 11,789,945 99.54%
2019 12,335,873 12,072,342 97.86% 183,788 12,256,130 99.35%
2020 12,732,756 12,500,616 98.18% 182,977 12,683,593 99.61%
2021 13,346,141 13,122,458 98.32% 180,669 13,303,126 99.68%
2022 13,867,033 13,518,415 97.49% 279,787 13,798,202 99.50%
Notes:
Effective February 1, 2012, the former Redevelopment Agency was dissolved. See Notes 18 for more information.
Source: County of Orange Auditor Controller's Office
The amounts presented for fiscal years 2009 through 2012 include City property taxes and former Redevelopment
CITY OF TUSTIN
PROPERTY TAX LEVIES AND COLLECTIONS
Last Ten Fiscal Years
Collected within the
Fiscal Year of Levy Total Collections to Date
$‐
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
$16.00
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Millions Property Tax Levies and Collections
Taxes Levied Amount Collected
140
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
Fiscal
Year Total
Ended Notes Lease Lease Governmental
June 30 Payable
1 Payable 2 Payable 3 Activities
2013 22,816,940$ -$ -$ 22,816,940$
2014 21,404,683 - - 21,404,683
2015 16,404,683 - - 16,404,683
2016 12,303,512 - - 12,303,512
2017 3,202,341 340,324 - 3,542,665
2018 - 271,162 - 271,162
2019 - 199,255 - 199,255
2020 - 124,492 - 124,492
2021 - 46,761 - 46,761
2022 - - 564,529 564,529
Notes:
1
2
3
Source: LT Debt-City & Water
Revenue Bonds + Bond Premium
CITY OF TUSTIN
RATIOS OF OUTSTANDING DEBT BY TYPE
Last Ten Fiscal Years
Details regarding the City's outstanding debt can be found in the notes to the financial statements.
In December of 2008 the City executed a note payable to the Tustin Redevelopment Agency in the amount of
$18,881,750 to increase its deposit of probable compensation per court order pending litigation. As of February
1, 2012, this note became payable to the Successor Agency to the Tustin Community Redevelopment Agency.
See Note 18 for more information.
In February 2017 the City entered into a lease to finance equipment with a present value of $368,356.
Governmental Activities
In fiscal year 2021-2022, the City implemented GASB 87 Lease Payable as a lessee for facilities, vehicles and
equipment. See Note 9 for more information.
141
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
Percentage
Water Water Water Water Water Total Total of Debt
Revenue Revenue Revenue Revenue Revenue Business-type Primary Personal Per
Bonds 4 Bonds 5 Bonds 6 Bonds 7 Bonds 8 Activity Government Income Capita
21,044,310$ 8,997,129$ -$ -$ -$ 30,041,439$ 52,858,379$ 2.16% 678
21,034,111 8,205,372 14,160,362 - - 43,399,845 64,804,528 2.73% 827
21,023,911 7,398,615 14,111,418 - - 42,533,944 58,938,627 2.44% 752
21,013,711 6,571,858 14,062,474 - - 41,648,043 53,951,555 2.21% 656
- 5,720,101 14,013,530 22,790,666 - 42,524,297 46,066,962 1.82% 559
- 4,843,344 13,959,586 22,738,061 - 41,540,991 41,812,153 1.63% 508
- 3,931,858 13,905,642 22,685,456 - 40,522,956 40,722,211 1.46% 500
- 2,989,831 - 22,632,852 14,910,000 40,532,683 40,657,175 1.37% 506
- 2,023,074 - 22,580,247 14,745,000 39,348,321 39,395,082 1.27% 492
- 1,021,317 - 22,527,643 14,540,000 38,088,960 38,653,489 1.18% 486
4
5
6
7
8 In February 2020 the City issued $14.91 million of Refunding Water Bonds to defease the outstanding 2013 Water
Revenue Bonds.
In May 2011 the City issued $20,760,000 Water Revenue Bonds, 2011 Series A to finance water capital improvement
projects.
In March 2012 the City issued $8.91 million of Refunding Water Bonds to defease the outstanding 2003 Water Revenue
Bonds.
In October 2013 the City issued $14,045,000 Water Revenue Bonds to finance water capital improvement projects.
In September 2016 the City issued $21.515 million of Refunding Water Bonds to defease the outstanding 2011 Water
Revenue Bonds.
Business-type Activity
142
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
2021-22 Assessed Valuation:14,813,295,178$
Redevelopment Incremental Valuation (4,026,852,862)
Adjusted Assessed Value 10,786,442,316$
City’s
Share of
Total Debt Debt at
OVERLAPPING TAX AND ASSESSMENT DEBT: 6/30/22 % Applicable 1 6/30/22
Metropolitan Water District 20,175,000$ 0.436% 87,963$
Rancho Santiago Community College District 196,772,727 0.151 297,127
Rancho Santiago Community College District School Facilities Improvement District No.1 154,720,000 0.26 402,272
Irvine Unified School District School Facilities Improvement District No. 1 158,925,000 2.720 4,322,760
Orange Unified School District 277,865,000 0.029 80,581
Santa Ana Unified School District 338,925,119 0.321 1,087,950
Tustin Unified School District School Facilities Improvement District No. 2002-1 44,035,000 46.764 20,584,601
Tustin Unified School District School Facilities Improvement District No. 2008-1 79,340,000 45.207 35,867,234
Tustin Unified School District School Facilities Improvement District No. 2012-1 35,595,000 45.654 16,250,541
Tustin Unified School District Community Facilities District No. 88-1 12,265,000 100 12,265,000
Tustin Unified School District Community Facilities District No. 06-1 13,390,000 100 13,390,000
City of Tustin Community Facilities Districts 91,695,000 100 91,695,000
Irvine Ranch Water District Improvement Districts 444,496,616 4.964 - 88.258 53,746,844
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT 250,077,873
DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT:
Orange County General Fund Obligations 376,780,000$ 2.173%8,187,429$
Orange County Pension Obligations Bonds 521,784,000 2.173 11,338,366
Orange County Board of Education General Fund Obligations 11,620,000 2.173 252,503
Orange Unified School District Certificates of Participation 17,195,278 0.029 4,987
Orange Unified School District Benefit Obligations 60,835,000 0.029 17,642
Santa Ana Unified School District General Fund Obligations 50,389,370 0.321 161,750
City of Tustin Lease Payable 564,529 100 564,529
TOTAL DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT 20,527,206
OVERLAPPING TAX INCREMENT DEBT (Successor Agencies)111,455,000$ 0.001-100.% 46,175,653 2
TOTAL OVERLAPPING DEBT 316,216,203 3
TOTAL DIRECT DEBT 564,529
COMBINED TOTAL DEBT 316,780,732$
Ratios to 2021-2022 Assessed Valuations:
Total Overlapping Tax and Assessment Debt 1.69%
Total Direct Debt 0.00%
Combined Total Debt 2.13%
Ratios to Redevelopment Successor Agencies Incremental Valuation ($4,026,852,862):
Total Overlapping Tax Increment Debt 1.15%
Source: California Municipal Statistics, Inc.
CITY OF TUSTIN
OVERLAPPING DEBT SCHEDULE
June 30, 2022
3 Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non-bonded capital lease
2 Effective February 1, 2012, the former Redevelopment Agency was dissolved. The Successor Agency took over assets and liability of the former Redevelopment
agency. See Note 18 for more information
1 The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining
the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value.
143
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
2013 2014 2015 2016
Assessed valuation 7,270,451,000$ 7,418,821,000$ 7,790,632,000$ 8,218,228,000$
Conversion percentage 25%25%25%25%
Adjusted assessed valuation 1,817,612,750 1,854,705,250 1,947,658,000 2,054,557,000
Debt limit percentage 15%15%15%15%
Debt limit 272,641,913 278,205,788 292,148,700 308,183,550
Total net debt applicable to limitation - - - -
Legal debt margin 272,641,913$ 278,205,788$ 292,148,700$ 308,183,550$
Total debt applicable to the limit
as a percentage of debt limit 0.0%0.0%0.0%0.0%
Sources: County Tax Assessor’s Office
City Finance Department
The Government Code of the State of California provides for a legal debt limit of 15% of gross assessed valuation. However, this
provision was enacted when assessed valuation was based on 25% of market value. Effective with the 1981-82 fiscal year, each parcel
is now assessed at 100% of market value (as of the most recent change in ownership for that parcel). The computations shown above
reflect a conversion of assessed valuation data for each fiscal year from the current full valuation perspective to the 25% level 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.
CITY OF TUSTIN
LEGAL DEBT MARGIN INFORMATION
Last Ten Fiscal Years
Fiscal Year
144
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2017 2018 2019 2020 2021 2022
8,566,757,000$ 8,995,570,000$ 9,405,874,000$ 9,819,597,000$ 10,285,119,000$ 10,609,472,000$
25%25%25%25%25%25%
2,141,689,250 2,248,892,500 2,351,468,500 2,454,899,250 2,571,279,750 2,652,368,000
15%15%15%15%15%15%
321,253,388 337,333,875 352,720,275 368,234,888 385,691,962.50 397,855,200
- - - - - -
321,253,388$ 337,333,875$ 352,720,275$ 368,234,888$ 385,691,963$ 397,855,200$
0.0%0.0%0.0%0.0%0.0%0.0%
Fiscal Year
145
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Fiscal Year Less Net
Ended Water Operating Available
June 30 Revenue Expenses Revenue Principal Interest Coverage
2013 16,688,773 11,462,258 5,226,515 710,000 957,111 3.14
2014 18,955,616 13,198,598 5,757,018 710,000 1,622,859 2.47
2015 19,428,741 12,511,648 6,917,093 770,000 1,973,820 2.52
2016 17,141,219 12,013,376 5,127,843 790,000 1,951,170 1.87
2017 17,365,350 13,032,698 4,332,652 815,000 1,229,673 2.12
2018 18,558,264 14,315,827 4,242,437 845,000 1,535,895 1.78
2019 18,644,225 14,284,473 4,359,752 880,000 1,503,095 1.83
2020 18,257,313 14,022,416 4,234,897 860,000 1,474,120 1.81
2021 19,083,377 15,889,077 3,194,300 1,050,000 1,251,630 1.39
2022 21,740,382 18,481,674 3,258,708 1,125,000 1,166,362 1.42
Notes:
Details regarding the City's outstanding debt can be found in the notes to the basic financial statements.
Operating expenses do not include interest or depreciation and amortization expenses.
Source: Proprietary Fund (ACFR) & Debt Service Schedules
Water Revenue Bonds
Debt Service
CITY OF TUSTIN
PLEDGED-REVENUE COVERAGE
Last Ten Fiscal Years
146
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Personal Per Capita County of Orange
Calendar City of Tustin Income Personal Unemployment
Year Population (in Thousands) Income Rate
2013 77,983 2,451,708 31,439 5.60%
2014 78,360 2,375,640 30,317 4.90%
2015 78,347 2,411,442 30,779 5.10%
2016 82,717 2,441,169 29,512 4.20%
2017 82,372 2,506,380 30,427 3.70%
2018 82,344 2,570,460 31,216 3.50%
2019 81,369 2,785,795 34,237 2.80%
2020 80,382 2,963,734 36,870 2.60%
2021 80,009 3,112,332 38,899 8.30%
2022 79,535 3,271,521 41,133 5.90%
Source: HdL Coren & Cone, LLC
CITY OF TUSTIN
DEMOGRAPHIC AND ECONOMIC STATISTICS
Last Ten Calendar Years
‐
20,000
40,000
60,000
80,000
100,000
City of Tustin Population
‐
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
Personal Income (in Thousands)
‐
10,000
20,000
30,000
40,000
50,000
Per Capita Personal Income
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
County of Orange Unemployment Rate
147
DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
Percent of Percent of
Number of Total Number of Total
Employer Employees Employment Employees Employment
Tustin Unified School District 2,805 6.63% 1,100 2.63%
Schools First Federal Credit Union 1,076 2.54%
Costco Wholesale Corporation*658 1.56% 450 1.08%
Foothill Regional Medical Center*575 1.36%
New American Funding 449 1.06%
City of Tustin 424 1.00%300 0.72%
Youngs Market Company LLC*350 0.83%
Avid Bioservices, Inc.*282 0.67%
Kaiser Foundation Hospitals*200 0.47%
Logomark Inc*196 0.46%200 0.48%
Ricoh Electronics Inc - 0.00%500 1.20%
Toshiba America Medical Systems - 0.00%300 0.72%
Rockwell Collins - 0.00%600 1.44%
Safmarine - 0.00%400 0.96%
GE Power Electronics (formerly Cherokee International)- 0.00%330 0.79%
Tustin Hospital Medical Center - 0.00%300 0.72%
Micro Vention Inc.- 0.00%300 0.72%
Balboa Water Group - 0.00%253 0.61%
Kleen Impressions - 0.00%250 0.60%
Warner Systems - 0.00%250 0.60%
Alliance One - 0.00%215 0.51%
Home Depot - 0.00%203 0.49%
Health South Tustin Rehab Hospital - 0.00%200 0.48%
Straub Distributing Co - 0.00%200 0.48%
SMC Corp - 0.00%200 0.48%
KTBN Channel 40 Trinity Broadcasting - 0.00%200 0.48%
*Employment numbers from 2021 year.
Sources: State of California Employment Development Department
City of Tustin
US Census Bureau
CITY OF TUSTIN
PRINCIPAL EMPLOYERS
Current Year and Nine Years Ago
2022 2013
148
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Function 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
General Government 26 35 33 38 35 39 42 42 45 42
Community Development 15 15 16 19 19 19 20 20 23 24
Public Works 40 47 48 45 48 47 49 50 53 60
Police 131 140 141 141 137 142 140 143 150 147
Parks and Recreation 13 13 14 14 17 17 17 16 17 19
RDA/Successor Agency 3 - - - - - - - - -
Water 17 17 18 19 18 18 19 17 21 16
Total 245 267 270 276 274 282 287 288 309 308
The City contracts with the OC Fire Authority for fire services.
Source: City of Tustin Human Resources Department
Fiscal Year
CITY OF TUSTIN
FULL-TIME CITY EMPLOYEES
BY FUNCTION
Last Ten Fiscal Years
149
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Function 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Public Safety
Police Stations 1 1 1 1 1 1 1111
Fire Stations 1 2 2 2 2 2 2 2222
Public Works
Street (miles)127.2 129.1 129.1 130.1 130.7 131.3 131.3 132.6 132.6 132.6
Street Lights 3,544 3,640 3,640 3,680 3,700 3,700 3,740 3,797 3,789 3,789
Traffic Signals 118 121 121 125 126 128 128 128 131 131
Storm Drain (miles) 49.2 51.2 51.4 51.8 52.9 53.9 53.9 53.9 54.8 54.8
Street Trees 16,097 16,073 15,815 15,706 15,542 15,574 15,042 14,606 14,546 14,546
Parks and Recreation
Parks 13 13 13 14 14 14 14 16 16 16
Parks (acres)98.5 98.5 98.5 116.0 116.0 116.0 116.0 173.5 173.5 173.5
Community Centers 3 3 3 3 3 3 3 3 4 4
Senior Centers 1 1 1 1 1 1 1 1 1 1
Water
Metered Services 14,172 14,181 14,148 14,099 14,109 14,104 14,241 14,328 14,325 14,392
Average daily consumptio 13,601 13,975 13,975 9,975 10,601 11,770 11,098 11,098 12,494 11,755
Reservoirs 6 6 6 6 6 6 6 6 6 7
Wells 13 13 13 13 14 14 14 14 14 14
Water Main (miles)178 178 178 178 178 178 178 178 178 178
Fire Hydrants 2,201 1,911 1,911 1,911 1,911 1,911 1,911 1,911 1,911 1,911
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
CITY OF TUSTIN
CAPITAL ASSET STATISTICS
BY FUNCTION
Last Ten Fiscal Years
150
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DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
2013 2014 2015 2016
Residential 2,815,322 2,905,069 2,603,538 1,934,761
Apartment/Multiple Units 1,158,480 1,163,159 1,139,321 1,003,808
Commercial 308,376 321,125 310,585 259,459
Fire Services 818 577 837 646
Irrigation 151,965 167,346 155,766 96,082
Government 268,581 276,292 229,262 134,446
Restaurants 53,461 52,520 51,658 45,069
Hospitals 12,442 7,634 10,018 11,166
Non-Profit 44,476 45,920 41,601 22,989
Industrial 57,462 60,438 59,292 40,407
Hotel/Motels 10,417 12,866 21,379 23,387
All Others 82,716 87,785 71,324 68,830
4,964,516 5,100,731 4,694,581 3,641,050
Measured in hundred cubic feet.
*2021 data was restated.
Source: City of Tustin Finance Department
CITY OF TUSTIN
WATER CONSUMPTION BY CUSTOMER TYPE
Last Ten Fiscal Years
Type of Customer
Fiscal Year
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
2013 2014 2015 2016 2017
Water Consumption By Customer
Residential Apartment/Multiple Units Commercial Fire Services Irrigation Government
151
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2017 2018 2019 2020 2021*2022
2,119,716 2,398,744 2,199,236 2,264,772 2,498,332 2,407,301
987,688 1,039,878 1,029,284 1,026,696 1,093,537 1,045,809
271,649 274,943 267,541 255,245 247,832 252,125
504 589 564 475 595 767
105,750 146,941 131,579 127,429 151,390 147,165
162,843 195,695 177,321 158,344 195,034 214,756
44,947 45,086 45,905 37,786 30,574 36,088
11,276 10,536 13,102 10,158 10,256 9,687
26,751 34,539 32,021 28,491 28,792 30,534
45,071 45,062 44,693 37,520 43,009 45,838
25,185 28,908 32,594 32,754 33,598 31,621
70,721 75,208 76,873 70,777 66,722 68,762
3,872,101 4,296,129 4,050,713 4,050,447 4,399,671 4,290,453
Fiscal Year
2018 2019 2020 2021 2022
t Restaurants Hospitals Non‐Profit Industrial Hotel/Motels All Others
152
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Bi-Monthly Up 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 61
Year Charge HCF HCF HCF HCF HCF HCF HCF
2012 36.94$ 0.70$ 1.22$ 1.60$ 1.99$ 2.37$ 2.76$ 3.17$
2013 40.63 0.73 1.29 1.69 2.10 2.56 2.97 3.40
2014 43.59 0.79 1.38 1.81 2.25 2.79 3.24 3.70
2015 1 46.85 0.84 1.48 1.94 2.41 3.05 3.53 4.05
2016 46.85 0.84 1.48 1.94 2.41 3.05 3.53 4.05
2017 46.85 0.84 1.48 1.94 2.41 3.05 3.53 4.05
2018 46.85 0.84 1.48 1.94 2.41 3.05 3.53 4.05
2019 46.85 0.84 1.48 1.94 2.41 3.05 3.53 4.05
2020 46.85 0.84 1.48 1.94 2.41 3.05 3.53 4.05
2020 2 39.76 2.79 2.79 2.79 2.79 2.79 2.79 2.79
2021 41.75 2.93 2.93 2.93 2.93 2.93 2.93 2.93
2022 43.84 11.44 3.08 3.08 3.08 3.08 3.08 3.08
Bi-Monthly Up to From From From From From All
Fiscal Fixed 8 9 to 16 17 to 24 25 to 32 33 to 40 41 to 48 Over 49
Year Charge HCF HCF HCF HCF HCF HCF HCF
2015 1 46.85$ 0.84$ 1.48$ 1.94$ 2.41$ 3.05$ 3.53$ 4.05$
2016 46.85 0.84 1.48 1.94 2.41 3.05 3.53 4.05
2017 46.85 0.84 1.48 1.94 2.41 3.05 3.53 4.05
2018 46.85 0.84 1.48 1.94 2.41 3.05 3.53 4.05
2019 46.85 0.84 1.48 1.94 2.41 3.05 3.53 4.05
2020 3 46.85 0.84 1.48 1.94 2.41 3.05 3.53 4.05
Notes:
HCF = Hundred Cubic Feet (1 HCF = 748 gallons)
1
2
3
Source: City of Tustin Finance Department
A seven (7) tiered rate structure was implemented on July 1, 2010. Additionally, a new fixed charge (Capital Fee) was
implemented with the new rate structure, which has been included in the Bi-Monthly Fixed Charge. The rate shown is for a
standard residential customer.
The bi-monthly fixed rate shown is based on the standard residential customer meter (5/8"). 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 1 to 6 inches.
Emergency Drought Stage 2 - Consumption Charges
No longer in effect.
The City Council adopted Resolution No. 20-04 to replace the tiered rate structure with a rate structure that consists a fixed
component based on the size of water meter and a variable component based on usage. The new rate structure went into effect
on February 1, 2020.
CITY OF TUSTIN
WATER RATES
Last Ten Fiscal Years
Consumption Charges
A revised seven (7) tiered rate structure was approved on August 5, 2014 to address a stage 2 emergency drought water demand
reduction mandate.
153
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Percent of Percent of
Water Total Water Water Total Water
Water Customer Charges Revenues Charges Revenues
Tustin Unified School District 639,956$ 3.26% 658,670$ 3.95%
Tustin Village Community Association 209,435 1.07%
Tustin Acres Community Association 200,291 1.02%35,290 0.21%
City of Tustin 163,968 0.84%150,073 0.90%
Raintree Tustin LLC 135,389 0.69%
Tustin Parc 68,918 0.35%
Sycamore Gardens HOA 57,966 0.30%23,548 0.14%
Briarwood Investment Co. Ltd.55,844 0.28%21,833 0.13%
CMC Association Management 52,844 0.27%25,006 0.15%
Schroeder Property Management 52,833 0.27%37,473 0.22%
15701 TV Way Partnership 51,707 0.26%23,703 0.14%
Vio Tustin Investment LP 50,864 0.26%
Westchester Park LP 50,380 0.26%
Cadigan Communites - Monterey Pines 48,647 0.25%
Pointe Newport Appartments 46,968 0.24%
Waterstone Gardens Investments LP 44,819 0.23%
Contesta Immobilien Gmbh & Co 43,960 0.22%
Tustin Plaza Center, LP 43,778 0.22%32,934 0.20%
Saddleback Mobilodge 43,032 0.22%
Tree Haven Owners Assoc.42,072 0.21%
Arnel Management (Walnut East)40,977 0.21%
Curtis Grieder 40,830 0.21%
Tustin Village Com.Assn 39,459 0.20% 18,901 0.11%
Regency West 38,978 0.20%
New Villa Valencia MHP 38,750 0.20%
CalTrans - District 12 129,767 0.78%
AT& T Services, Inc.73,129 0.44%
Ricoh Electronics 72,988 0.44%
HSA LP 37,964 0.23%
Tustin Place HOA 32,028 0.19%
SKB-Tustin LLC 29,315 0.18%
Trinity United Presbyterian 27,114 0.16%
Valencia Gardens Owner LLC 26,899 0.16%
Red Hill Association 26,727 0.16%
GRE Tustin Financial 26,478 0.16%
Tustin Care Center 25,206 0.15%
Key Inn 24,533 0.15%
Company of Mary 24,488 0.15%
Tustin Hospital Medical Center 24,222 0.15%
Sierra Corporate Management 24,180 0.14%
Avalon 2 Calif 1 LP 24,149 0.14%
Westchester Park LP 23,297 0.14%
Total Water Sales 2,302,665$ 11.74% 1,679,915$ 10.07%
Total Water Revenues 19,633,007$
Source: City of Tustin Finance Department
CITY OF TUSTIN
WATER CUSTOMERS
Current Fiscal Year and Nine Years Ago
2022 2013
154
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2013 2014 2015 2016
Public Safety
Moving Citations 3,748 3,499 5,444 6,982
Parking Violations 7,754 7,136 11,994 13,855
Arrests 2,420 2,139 2,155 2,494
Calls for Service 27,954 29,527 33,114 36,618
Public Works
Number of Building Permits Issued 1,130 1,517 1,828 2,334
Number of Building Inspections Completed 5,934 5,655 6,344 11,947
Transportation Permits
Annual 50 59 55 66
Single 99 89 88 82
Encroachment Permits 123 148 124 147
Utility Permits 55 66 60 59
Curb Miles Swept 20,003 21,118 20,773 22,087
Community Services
Rentals 1,147 1,138 1,117 1,253
Classes 1,544 1,508 1,265 1,389
General Government
New Hires 60654947
Retiree/separations 82683038
(1) Prior to 2019, Community Services Classes include Classes that were canceled but offered.
Fiscal year 2019 on reflects the classes that were held.
* Reduced rentals and classes due to COVID-19 pandemic restrictions.
Fiscal Year
CITY OF TUSTIN
OPERATING INDICATORS BY FUNCTION
Last Ten Fiscal Years
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
Public Safety
Moving Citations Parking Violations Arrests Calls for Service
0
500
1,000
1,500
2,000
2,500
3,000
3,500 Public Works ‐Permits
Number of Building Permits Issued Transportation Permits (Annual)Transportation Permits (Single)
Encroachment Permits Utility Permits
155
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2017 2018 2019 2020 2021 2022
5,590 4,762 4,355 2,811 3,079 3,312
14,514 16,836 17,017 12,609 16,256 17,898
2,343 2,302 2,463 2,448 2,774 2,810
35,172 36,571 38,326 38,288 37,616 39,168
2,430 2,078 2,425 1,915 1,560 2,265
11,768 9,816 11,348 15,884 9,907 10,073
56 46 77 74 73 81
208 137 127 104 64 84
107 155 136 161 117 147
62 71 65 57 65 55
20,589 20,270 22,162 20,766 20,766 20,766
1,494 1,483 1,326 550 *187 * 1,102
1,213 1,160 854 805 362 *758
67 48 62 46 24 26
47 63 56 37 24 30
Fiscal Year
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Community Services
Rentals Classes
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
General Government
New Hires Retiree/separations
156
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DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2
INDEPENDENT ACCOUNTANT’S REPORT
The Honorable Mayor and City Council
City of Tustin, California
We have performed the procedures enumerated below on the City of Tustin, California
(City) appropriations limit worksheets for compliance with the requirements of Section 1.5
of Article XIIIB of the California Constitution for the year ended June 30, 2022. The City is
responsible for compliance with Section 1.5 of Article XIIIB of the California Constitution.
The City has agreed to and acknowledged that these procedures are appropriate to meet
the intended purpose of evaluating compliance with the requirements of Section 1.5 of
Article XIIIB of the California Constitution and the League of California Cities publication
entitled Article XIIIB Appropriations Limitation Uniform Guidelines for the year ended June
30, 2022. This report may not be suitable for any other purpose. The procedures
performed may not address all the items of interest to a user of this report and may not
meet the needs of all users of this report and, as such, users are responsible for
determining whether the procedures performed are appropriate for their purposes.
The procedures and the associated findings are as follows:
1. We obtained the worksheets referred to above and compared the limit and
annual adjustment factors included in those worksheets to the limit and annual
adjustment factors that were adopted by resolution of the City Council. We also
compared the population and inflation options included in the aforementioned
worksheets to those that were selected by a recorded vote.
Results: No exceptions were noted as a result of our procedures.
2. We recalculated the mathematical computations reflected in the City’s
worksheets.
Results: No exceptions were noted as a result of our procedures.
3. We compared the current year information used to determine the current year
limit and agreed it to worksheets prepared by the City and to information
provided by the State Department of Finance.
Results: No exceptions were noted as a result of our procedures.
4. We compared the amount of the prior year appropriations limit presented in the
worksheets to the amount adopted by the City Council for the prior year.
Results: No exceptions were noted as a result of our procedures.
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The Honorable Mayor and City Council
City of Tustin, California
Page Two
We were engaged by the City to perform this agreed-upon procedures engagement and
conducted our engagement in accordance with standards established by the American
Institute of Certified Public Accountants. We were not engaged to and did not conduct an
examination or review, the objective of which would be the expression of an opinion or
conclusion, respectively on the worksheets referred to above. Accordingly, we do not
express such an opinion or conclusion. Had we performed additional procedures, other
matters might have come to our attention that would have been reported to you. No
procedures have been performed with respect to the determination of the appropriation
limit for the base year, as defined by the League publication entitled Article XIIIB
Appropriations Limitation Uniform Guidelines.
We are required to be independent of the City and to meet our other ethical responsibilities,
in accordance with the relevant ethical requirements related to our agreed-upon procedures
engagement.
This report is intended solely for the information and use of the Mayor, City Council and
Management of the City of Tustin, California and is not intended to be, and should not be,
used by anyone other than the specified party.
Irvine, California
December 9, 2022
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Independent Auditor’s Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters Based on an Audit of the Air Quality
Improvement Special Revenue Fund Performed
in Accordance with Government Auditing Standards
City Council
City of Tustin
Tustin, California
We have audited, in accordance with the auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards issued by the Comptroller General of the United States, the financial
statements of the City of Tustin, California (the City) including the Air Quality Improvement
Special Revenue Fund (the Fund) of the City, as of and for the year ended June 30, 2022, and
the related notes to the financial statements, which collectively comprise the City’s basic
financial statements and have issued our report thereon dated December 9, 2022.
Internal Control over Financial Reporting
In planning and performing our audit of the Fund’s financial statements, we considered the
City’s internal control over financial reporting (internal control) as a basis for designing audit
procedures that are appropriate in the circumstances for the purpose of expressing our
opinions on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the
effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct, misstatements on a timely basis. A material weakness is a
deficiency, or a combination of deficiencies, in internal control such that there is a reasonable
possibility that a material misstatement of the entity’s financial statements will not be prevented
or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a
combination of deficiencies, in internal control that is less severe than a material weakness, yet
important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph
of this section and was not designed to identify all deficiencies in internal control that might be
material weaknesses or significant deficiencies. Given these limitations, during our audit we did
not identify any deficiencies in internal control that we consider to be material weaknesses.
However, material weaknesses may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s Fund financial statements
are free from material misstatement, we performed tests of its compliance with certain
provisions of laws, regulations, contracts and grant agreements, noncompliance with which
could have a direct and material effect on the financial statements. Such provisions include
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those provisions of laws and regulations identified in Assembly Bill 2766 Chapter 1705 [Health
and Safety Code Sections 44220 through 44247] (the Guide). However, providing an opinion
on compliance with those provisions was not an objective of our audit, and accordingly, we
do not express such an opinion. The results of our tests disclosed no instances of
noncompliance or other matters that are required to be reported under Government Auditing
Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness
of the City’s internal control or on compliance. This report is an integral part of an audit
performed in accordance with Government Auditing Standards and the Guide in considering
the City’s internal control and compliance. Accordingly, this communication is not suitable for
any other purpose.
Irvine, California
December 9, 2022
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DavisFarr
CERTIFIED PUBLIC ACCOUNTANTS
City Council
City of Tustin
Tustin, California
Davis Farr LLP
18201 Von Karman Avenue I Suite 1100 1 Irvine, CA 92612
Main: 949.474.2020 1 Fax: 949.263.5520
We have audited the financial statements of the governmental activities, the business -type
activities, each major fund, and the aggregate remaining fund information of the City of Tustin
("City") as of and for the year ended June 30, 2022 and have issued our report thereon dated
December 9, 2022. Professional standards require that we advise you of the following matters
relating to our audit.
Our Responsibility in Relation to the Financial Statement Audit
As communicated in our engagement letter dated April 22, 2022, our responsibility, as
described by professional standards, is to form and express opinions about whether the
financial statements that have been prepared by management with your oversight are
presented fairly, in all material respects, in accordance with accounting principles generally
accepted in the United States of America. Our audit of the financial statements does not
relieve you or management of your respective responsibilities.
Our responsibility, as prescribed by professional standards, is to plan and perform our audit
to obtain reasonable, rather than absolute, assurance about whether the financial statements
are free of material misstatement. An audit of financial statements 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 entity's internal control over financial reporting. Accordingly, as part of
our audit, we considered the internal control of the City solely for the purpose of determining
our audit procedures and not to provide any assurance concerning such internal control.
We are also responsible for communicating significant matters related to the audit that are,
in our professional judgment, relevant to your responsibilities in overseeing the financial
reporting process. However, we are not required to design procedures for the purpose of
identifying other matters to communicate to you.
Planned Scope and Timing of the Audit
We conducted our audit consistent with the planned scope and timing we previously
communicated to you in our letter dated April 26, 2022.
Compliance with All Ethics Requirements Regarding Independence
The engagement team, others in our firm, and our firm have complied with all relevant ethical
requirements regarding independence under the American Institute of Certified Public
Accountants ("AICPA") independence standards, contained in the Code of Professional
Conduct.
We identified independence threats related to the preparation of the financial statements. We
have applied certain safeguards to reduce them to an acceptable level, including using an
independent party within the firm to perform a quality control review of the financial
statements, and obtaining confirmation from the City's management that their review of the
financial statements included comparing the financial statement footnotes to the underlying
accounting records.
Significant Risks Identified
We are required by the auditing standards to evaluate significant risks. We have identified
the following areas for additional audit emphasis:
The new lease accounting standard, Governmental Accounting Standards Board
(GASB) Statement No. 87. As a result, we received the City's inventory of leases,
reviewed a sample of lease agreements, tested the calculations of the lease
transactions, and ensured the City's lease disclosure footnotes are accurate and
complete in accordance with the new standard.
The City's land management activities. As a result, we evaluated the accuracy and
completeness of the City's land held for resale records, reviewed the recent developer
agreements for financial impact, and evaluated whether related transactions have
been recorded properly in the City's accounting records.
• Federal government grant compliance for COVID-19 related grants. As a result, we
plan to test the City's federal expenditures of COVID-19 related grants for compliance
with federal guidelines when performing our single audit procedures. We also
evaluated grant revenue for proper revenue recognition in the financial statements.
Qualitative Aspects of the Entity's Significant Accounting Practices
Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A
summary of the significant accounting policies adopted by the City is included in Note 1 to
the financial statements. As described in Note 1 to the financial statements, during the year,
the entity changed its method of accounting for leases by adopting Governmental Accounting
Standards Board (GASB) Statement No. 87, Leases, in the fiscal year 2022. No matters have
come to our attention that would require us, under professional standards, to inform you
about (1) the methods used to account for significant unusual transactions and (2) the effect
of significant accounting policies in controversial or emerging areas for which there is a lack
of authoritative guidance or consensus.
Significant Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by
management and are based on management's current judgments. Those judgments are
normally based on knowledge and experience about past and current events and assumptions
about future events. Certain accounting estimates are particularly sensitive because of their
significance to the financial statements and because of the possibility that future events
affecting them may differ markedly from management's current judgments.
The most sensitive accounting estimates affecting the financial statements include:
• Judgements involving the calculation of the pension liability
• Judegments involving the calculation of the other post employment benefit
(OPEB) liability.
• Judgements involving estimates of the claims payable liabilities related to general
liability and workers' compensation claims.
Management's estimate of the pension liability, OPEB liability, and claims payable liability are
based on actuarial valuation reports. We evaluated the key factors and assumptions used to
develop the pension liability, OPEB liability, and claims payable liability and determined that
it is reasonable in relation to the basic financial statements taken as a whole and in relation
to the applicable opinion units.
Financial Statement Disclosures
Certain financial statement disclosures involve significant judgment and are particularly
sensitive because of their significance to financial statement users. The most sensitive
disclosures affecting City's financial statements relate to the net pension liability and related
amounts and the net OPEB liability and related amounts.
Significant Difficulties Encountered during the Audit
We encountered no significant difficulties in dealing with management relating to the
performance of the audit.
Uncorrected and Corrected Misstatements
For purposes of this communication, professional standards also require us to accumulate all
known and likely misstatements identified during the audit, other than those that we believe
are trivial, and communicate them to the appropriate level of management. Further,
professional standards require us to also communicate the effect of uncorrected
misstatements related to prior periods on the relevant classes of transactions, account
balances or disclosures, and the financial statements as a whole and each applicable opinion
unit. There were no uncorrected misstatements identified during the audit.
In addition, profesisonal standards require us to ommunicate to you all material, correct
misstatements that were brought to the attention of management as a result of our audit
procedures. There were no material misstatements identified during the audit.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management
as a matter, whether or not resolved to our satisfaction, concerning a financial accounting,
reporting, or auditing matter, which could be significant to the City's financial statements or
the auditor's report. No such disagreements arose during the course of the audit.
Representations Requested from Management
We have requested certain written representations from management in a letter dated
December 9, 2022.
Management's Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing
and accounting matters. Management informed us that, and to our knowledge, there were no
consultations with other accountants regarding auditing and accounting matters.
Other Significant Matters, Findings, or Issues
In the normal course of our professional association with the City, we generally discuss a
variety of matters, including the application of accounting principles and auditing standards,
significant events or transactions that occurred during the year, operating and regulatory
conditions affecting the entity, and operational plans and strategies that may affect the risks
of material misstatement. None of the matters discussed resulted in a condition to our
retention as the City's auditors.
Other Information Included in the Annual Comprehensive Financial Report
Pursuant to professional standards, our responsibility as auditors for other information,
whether financial or nonfinancial, included in the City's annual comprehensive financial report,
does not extend beyond the information identified in the audit report, and we are not required
to perform any procedures to corroborate such other information. However, in accordance
with such standards, we have read the information and considered whether such information,
or the manner of its presentation, was materially inconsistent with its presentation in the
financial statements.
Our responsibility also includes communicating to you any information which we believe is a
material misstatement of fact. Nothing came to our attention that caused us to believe that
such information, or its manner of presentation, is materially inconsistent with the
information, or manner of its presentation, appearing in the financial statements.
Irvine, California
December 9, 2022