HomeMy WebLinkAbout04 FISCAL YEAR 2023-2024 AUDIT REPORTSDocusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
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AGENDA REPORT
MEETING DATE: FEBRUARY 18, 2025
TO: ALDO E. SCHINDER, CITY MANAGER
Agenda Item 4
Reviewed: Initial
Eats
City Manager
Finance Director I J�
FROM: JENNIFER KING, FINANCE DIRECTOR/CITY TREASURER
SUBJECT: FISCAL YEAR 2023-2024 AUDIT REPORTS
SUMMARY:
The financial statement audit for the 2023-2024 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. Davis Farr LLP discussed the results
of the audit with the Audit Commission on January 23, 2025.
The City's investment portfolio which includes investments in US Treasury bonds, agency
securities, corporate bonds, and local government investment pools of California Asset
Management Program (CAMP) and Local Agency Investment Fund (LAIF) have also
been reviewed as part of the audit.
RECOMMENDATION:
It is recommended that the City Council receive and file the fiscal year 2023-2024 audit
reports.
FISCAL IMPACT:
The total contractual cost of the annual audit with Davis Farr LLP is $45,300.Of this amount,
$9,060 is charged to the Water Enterprise Fund, and $36,240 is charged to the General
Fund. In addition, $3,300 was paid to CaIPERS and charged to the General Fund for the
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. Specifically, the annual audit confirms that the City has
implemented sound financial practices and ensured appropriate accounting of public funds.
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City Council Agenda Report
Fiscal Year 2023-2024 Audit Reports
February 18, 2025
Page 2 of 3
BACKGROUND AND 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.
Total General Fund revenues excluding transfers -in and the Navy North Hangar fire
incident, amounted to approximately $93.1 million, which reflects a decrease of $5.6
million (5.7%) compared to prior year revenues. The decreases in General Fund revenues
were attributed to the following factors:
• One-time development profit participation revenue of $11.6 million received
during last fiscal year 2022-2023.
• Taxes increased $1.9 million primarily due to higher property tax revenue from
annual assessed value increase and ownership changes.
• Investment earnings increased $4.7 million during 2024, largely from improved
market conditions.
Total General Fund expenditure amounted to approximately $104.7 million, an increase
of $14 million (15%) compared to prior year. This increase was primarily related to labor
obligations, increased public service demands, inflation adjustments, and capital
expenditures.
The Government Finance Officers Association (GFOA) awarded a Certificate of
Achievement for Excellence in Financial Reporting to the City for its ACFR for the fiscal
year ended June 30, 2023. This was the thirty-seventh (37) consecutive year that the City
received this prestigious award, which is the highest form of recognition in the area of
governmental accounting and financial reporting. The award is valid for a period of one
year only. Staff believes the current ACFR for the fiscal year ended June 30, 2024
continues to meet the award program's requirements and was submitted again to GFOA
upon completion of the audit.
In addition to the Independent Auditor's Report, the auditors issued a separate letter on
matters that are required to be communicated in connection with the audit. This letter,
referred to as the "Required Audit Communications", outlines the scope of the audit,
significant estimates, and other matters, including corrected and uncorrected material
misstatements. We are happy to report that no material misstatements have been
identified by the auditors.
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City Council Agenda Report
Fiscal Year 2023-2024 Audit Reports
February 18, 2025
Page 3 of 3
Davis Farr LLP discussed the results of the audit with the Audit Commission on January
23, 2025.
Signed by-
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Jennifer King
Finance Director/City Treasurer
Attachments:
Signed by:
4D86AFAFFF77473... for
Elsa Chow
Deputy Director - Financial Services
1. Annual Comprehensive Financial Report (ACFR)
2. Report on Appropriations Limit Calculation
3. Report on Compliance Applicable to the Air Quality Improvement Fund
4. Required Audit Communications
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CITY OF TUSTIN
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CITY OF TUSTIN, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2024
Prepared By: Finance Department
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CITY OF TUSTIN
Annual Comprehensive Financial Report
For the Year Ended June 30, 2024
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 Auditor's Report 1
Management's Discussion and Analysis
(Required Supplementary Information - Unaudited) 5
Basic Financial Statements:
Government -wide Financial Statements:
Statement of Net Position 21
Statement of Activities 22
Fund Financial Statements:
Governmental Funds:
Balance Sheet 25
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position 26
Statement of Revenues, Expenditures and Changes in Fund Balances 27
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities 28
Proprietary Fund:
Statement of Net Position 29
Statement of Revenues, Expenses and Changes in Net Position 30
Statement of Cash Flows 31
Fiduciary Funds:
Statement of Fiduciary Net Position 33
Statement of Changes in Fiduciary Net Position 34
Notes to Basic Financial Statements 36
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CITY OF TUSTIN
Annual Comprehensive Financial Report
For the Year Ended June 30, 2024
Table of Contents
Page
Number
REQUIRED SUPPLEMENTARY INFORMATION: 94
Safety Plan:
Schedule of Proportionate Share of the Net Pension Liability 95
Schedule of Contributions 97
Miscellaneous Plan:
Schedule of Changes in the Net Pension Liability and Related Ratios
99
Schedule of Contributions
101
Other Post -Employment Benefit Plan (OPEB):
Schedule of Changes in the Net OPEB Liability and Related Ratios
103
Schedule of Contributions - OPEB
104
Annual Money -Weighted Rate of Return on Investments
105
Budgetary Comparison Schedules:
General Fund
106
Housing Authority Special Revenue Fund
107
Note to Required Supplementary Information
118
SUPPLEMENTARY INFORMATION:
109
Other Governmental Funds:
Description of Special Revenue Funds
110
Description of Capital Projects Funds
III
Combining Balance Sheet
112
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances
114
Schedules of Revenues, Expenditures and Changes in Fund
Balance - Budget and Actual:
Gas Tax Special Revenue Fund
116
Community Development Block Grant (CDBG) Fund
117
Asset Forfeiture Special Revenue Fund
118
Air Quality Special Revenue Fund
119
Supplemental Law Enforcement Special Revenue Fund
120
American Rescue Plan Act (ARPA) Special Revenue Fund
121
Special Tax B Special Revenue Fund
122
Road Maintenance and Rehabilitation Special Revenue Fund
123
Voluntary Workforce Housing Incentive Special Revenue Fund
124
Solid Waste Special Revenue Fund
125
Park Acquisition and Development Special Revenue Fund
126
Measure M Special Revenue Fund
127
Custodial Funds:
Combining Statement of Fiduciary Net Position — Custodial Funds 128
Combining Statement of Changes in Fiduciary Net Position — Custodial Funds 129
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CITY OF TUSTIN
Annual Comprehensive Financial Report
For the Year Ended June 30, 2024
Table of Contents
Page
Number
STATISTICAL SECTION (UNAUDITED): 130
Description of Statistical Section Contents 131
Financial Trends:
Net Position by Component - Last Ten Fiscal Years 132
Changes in Net Position - Expenses and Program Revenues - Last Ten Fiscal Years 134
Changes in Net Position - General Revenues - Last Ten Fiscal Years 136
Fund Balances of Governmental Funds - Last Ten Fiscal Years 138
Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years 140
Revenue Capacity:
Assessed Value and Estimated Actual Values of Taxable Property - Last Ten Fiscal Years 142
Direct and Overlapping Property Tax Rates - Last Ten Fiscal Years 144
Principal Property Taxpayers - Current Year and Nine Years Ago 146
Property Tax Levies and Collections - Last Ten Fiscal Years 147
Debt Capacity:
Ratios of Outstanding Debt by Type - Last Ten Fiscal Years 148
Overlapping Debt Schedule 150
Legal Debt Margin Information - Last Ten Fiscal Years 151
Pledged -Revenue Coverage - Last Ten Fiscal Years 153
Demographic and Economic Information:
Demographic and Economic Statistics - Last Ten Calendar Years 154
Principal Employers - Current Year and Nine Years Ago 155
Operating Information:
Full -Time City Employees by Function - Last Ten Fiscal Years 156
Capital Asset Statistics by Function - Last Ten Fiscal Years 157
Water District Schedules for Revenue Capacity:
Water Consumption by Customer Type - Last Ten Fiscal Years 158
Water Rates - Last Ten Fiscal Years 160
Water Customers - Current Year and Nine Years Ago 161
Operating Indicators by Function — last Ten Fiscal Years 162
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CITY OF TUSTIN
Elected and Administrative Officials
As of June 30, 2024
AUSTIN LUMSARD
Mayor
LETITIA CLARK
Councilmember
RYAN GALLAGHER
REBECCA "SECKIE"
GOMEZ
Councilmember
AUDIT COMMISSION
Jered Elmore, Chair
John Wende, Chair Pro Tem
Daniel Erickson
Adrian Henson
Vacant
Mayor Pro Tem
RAY SCHNELL
Councilmember
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CITY MANAGER
Aldo E. Schindler
ASSISTANT CITY MANAGER
Nicole Bernard
David E. Kendig I City Attorney
Justina Willkom Director, Community Development
Jennifer King Finance Director / City Treasurer
Erica N. Yasuda City Clerk
Stu Greenberg Chief of Police
Derick Yasuda Director, Human Resources
Chad Clanton Director, Parks & Recreation Services
Michael Grisso Director, Public Works
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FINANCE DEPARTMENT
Remembering what connects us.
December 19, 2024
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, 2024.
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, 2024, 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, 2024, 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, 2024, 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 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
population at 78,844 as of January 1, 2024, an increase of about 0.4% from 2023.
Approximately half of the cities in Orange County showed minor increases in population,
with the County of Orange's total population increasing by 0.3%. The California
statewide population increased by 0.17% for the first time since 2020, fueled by a
rebound from the pandemic in foreign legal immigration, more domestic in -migration,
and slowed domestic out -migration. Also contributing to an uptick in population is the
natural increase (net result of births minus deaths) as the state emerged from the
pandemic.
The City was incorporated underthe General Laws of the State of California in 1927 and
is governed by a five -member elected City Council. The CounciVAdministrator 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. In 2021, the City code was amended to implement by -district elections for four
council members and established the Office of the Mayor to be elected at -large starting
in November 2022. At the same time, a Council Member was also elected in Council
District 3. The Council Members for Council District 1, 2, and 4 were elected in the
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general municipal election in November 2024. The Mayor and Council Members all serve
four-year terms. 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.
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 in the fund's approved appropriations.
ECONOMIC OUTLOOK
As year 2024 unfolds, many of the economic challenges such as inflation, labor
shortage, and higher interest rates, continue to be in play, although in varying degrees.
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Inflation has cooled compared to the year before, but prices remain high. Labor market
conditions have eased. The unemployment rate has inched up but remains low. These
factors and the increased borrowing costs have reorientated household spendings to
essential items while deferring discretionary purchases when possible. In response, the
Federal Open Market Committee (FOMC) lowered the federal funds rate in September
2024 by 0.5 percentage points, its first rate cut since 2020, and again in November 2024
by 0.25 percentage points. However, persistent high prices and elevated borrowing
costs continue to be major concerns for businesses and consumers. Looking ahead, the
market expects the FOMC to take additional rate cuts going into 2025 that may generate
some changes in consumer spending patterns in the short run. The U.S. economy is
projected to grow at an even pace of above two percent in the next two year.
The City's year two of the biennial budget reflects an increase of $7 million in General
Fund revenues in fiscal year 2024-2025 as compared to the amendment budget from
fiscal year 2023-2024, excluding the Navy North Hangar Fire incident responses. The
budgeted revenues reflect a slower growth trend in sales tax receipts and a steady
increase in property tax revenue. Despite its slower growth, local sales tax revenue has
seen a significant increase over the pre -pandemic periods. Activities for the City's top
three General Fund revenue sources are briefly described below:
• Sales tax revenue is the General Fund's largest revenue source. Even through
inflationary concerns remain prevalent, consumer spendings are expected to be
stable. Sales tax revenue is projected to merely increase by one to three percent
over the next two years.
• 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 primarily from the annual two percent
CPI adjustment and ownership changes.
• Transfers and reimbursements are primarily related to specific operating and
capital expenditures incurred and paid for by the General Fund. They are eligible
to be funded from other restricted funding sources. Some examples of the
reimbursements to the General Fund include service tax collected from the Tustin
Legacy area to support public services; and a return of the General Fund's capital
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outlay for the Main Street Improvement project as this project has secured a grant
funding.
The General Fund expenditures are projected to increase by $0.5 million over the fiscal
year 2023-2024 amended budget. Major factors impacting the General Fund are
contractually obligated salary increases; higher annual required contributions toward
the City's pension obligations; and an increase in most contracts for services, including
fire, animal services, and other professional services. These increases are offset by a
reduction in capital project funding from the General Fund.
Some of the factors impacting the sustainability of future budgets include the City's
increasing pension costs and related unfunded liabilities, and funding of construction
costs for infrastructure to further development in Tustin Legacy. The City Council
continues to advance the best long-term development strategies, with the intent of
maximizing long-term revenues. Staff will continue to work with the City Council to
prioritize these types of significant projects and seek new revenue sources to support a
growing community.
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Tustin Legacy
Development at Tustin Legacy, the City's newest community, continues to move
forward. Staff are 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 the 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:
• Senior Living — The City entered into an Exclusive Negotiating Agreement (ENA)
with Confluent Senior Living and Morningstar Senior Living for the development
of MorningStar at Tustin Legacy, an approximately 283,000-square-foot, Large-
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scale senior living community within Neighborhood D South. The project is
anticipated to feature 144 independent living units, 63 assisted living units, a
secure memory care wing with 28 supportive units, as well as 29 adjacent single -
story cottages. MorningStar at Tustin Legacy is anticipated to set the new gold
standard for Class A, luxury senior living in Orange County, California as a
community that integrates with the character of the surrounding 1,600-acre
Tustin Legacy community, while delivering innovative and progressive design,
and technology for the seniors of today and the future.
• Multifamily Residential Development —The City entered into an ENA with Irvine
Company for the development of 1,336 multifamily rental units within
Neighborhood D South. The project is utilizing a residential exemption under the
Surplus Land Act (SLA), which requires that 25% of the total amount of units be
reserved for persons and families of lower income households.
• For -Sale Residential Development — The Landing at Tustin Legacy, an award -
winning 400 for -sale home community by Brookfield within Neighborhood D
South has completed construction, all homes are sold, and all residents have
moved in. It offers three stylish home collections including contemporary
elevator -served flats, stylish townhomes, and sophisticated single-family homes,
all with flex spaces, offices, decks, smart home technology, and curated designer
finishes.
• South Orange County Community College District's (SOCCCD) Advanced
Technology and Education Park (ATEP) campus — The City is coordinating
development with SOCCCD of the Saddleback@ATEP project, the second
education project on the campus. Groundbreaking was held in March 2023 and
the new complex with two buildings will house Saddleback College's Advanced
Transportation department and Culinary Arts department. Estimated opening is
in year 2025. The City also coordinated development with SOCCCD of the first
non-SOCCCD project — the Goddard School, a 14,400-square-foot educational
preschool which completed construction in early 2024 and opened for business
in July 2024. The presence of the Goddard School adjacent to the community
college campus provides opportunities for learning and development for both the
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children in attendance and the community college students. Finally, the City is
working with SOCCCD to finalize design and entitlements for the Advantech
North America Headquarters Campus at ATEP, which will feature an
approximately 109,000-square-foot headquarter building and an approximately
79,000-square-foot research and development building.
Central Tustin
• The Jessup — In January 2023, the City Council approved a request from Intracorp
Homes to develop The Jessup residential community. The Jessup community
includes a request to demolish two existing 2-story office buildings and construct
a new, multifamily residential development at 17802 and 17842 Irvine
Boulevard. The project includes 40, three-story residential units (including two
very -low-income affordable units) consisting of eighteen duplexes (36 units) and
four single-family residences. Each unit includes a fully enclosed, two -car garage
(80 total parking stalls), and the site includes ten uncovered guest parking spaces.
The Jessup is currently under construction.
• KB Homes — On November 21, 2023, the City Council approved a request to
construct a new live/work and residential condominium development project at
14042 Newport Avenue. The development will include thirty-five residential
condominium units and seven live/work units, for a total of forty-two units in six
buildings. Two of the 42 units are set aside as affordable units for very -low-
income families. The project will also include an enclosed two -car garage and
private open space for each dwelling unit, a total of seventeen guest surface
parking spaces, common open space areas, landscaping, and a public amenity
space fronting El Camino Real. Construction will begin late 2024.
Transitional Housing
• House of Ruth — Family Promise of Orange County's House of Ruth, with seven
apartment -style units ranging in size from one to three bedrooms, completed
construction and opened in November 2023 to serve homeless families. With a
shared commitment to ending family homelessness in our community, the City
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conveyed the property to Family Promise of Orange County in May 2022. The
units provide emergency short-term housing for homeless families while they
receive housing navigation services to help secure long-term, permanent housing.
House of Ruth's Community Resource Center offers vital support programs that
promote stability, health, healing, and self-sufficiency.
CAPITAL PROJECT ACCOMPLISHMENTS AND FUTURE PROJECTS
Major capital improvement projects completed during fiscal year 2024 include the
following:
• Park Facilities
o Alley Grove Promenade
• Public Facilities
o Legacy Annex Improvements
• Transportation Facilities
o Red Hill Avenue Rehabilitation
o Annual Roadway and Pavement Maintenance Program
The City's capital projects for fiscal year 2024-2025 are budgeted at $102.2 million.
The budget reflects capital improvement projects funded by Tustin Legacy Backbone
Infrastructure Fees and proceeds from sale of land at the Tustin Legacy. Other funding
sources for the capital projects include the General Fund, water revenues, Gas Tax, state
grant for parks, Measure M2 transportation funds, and State Road Maintenance and
Rehabilitation funds (RMRA). Major capital projects for fiscal year 2024-2025 include:
• Public Facilities
o Civic Center Alternate Power Source Improvements
o Facility Improvements at the Police Department, Senior Center, and City
Hall
• Park Facilities
o Tustin Legacy Linear Park
o Tustin Legacy Dog Park
o Tustin Legacy Park
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o Centennial Park Improvements
• Traffic Facilities
o Main Street Improvements
o Neighborhood D-South Infrastructure Construction — Phase 2
o Neighborhood G Phase 1
o Neighborhood D-North Phase 1
o Armstrong Pedestrian Bridge
o Warner Pedestrian Bridge
• Transportation Facilities
o Annual Roadway Maintenance and Public Infrastructure Maintenance
Program
o Old Town Improvements
o Red Hill Rehabilitation — Walnut to 1-5
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, 2023. This was the thirty-seventh (37) consecutive year that Tustin has
achieved this prestigious award. 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
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to the following members of the Finance Department who assisted and contributed to
its preparation: Elsa Chow, Deputy Director - Financial Services; Sean Tran, Deputy
Director - Administrative Services; David Faraone, Jr., Senior Budget Analyst; Glenda
Babbitt, Management Analyst; JP Facundo, Accountant, and Kathy Dinh, 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
management of the City's finances; and finally, to the City's auditing firm of Davis Farr
LLP for their professional assistance.
Respectfully submitted,
Aldo E. Schindler
City Manager
Jennifer King
Finance Director/City Treasurer
300 Centennial Way, Tustin, CA 92780 • 714-573-3060 • tustinca.org
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LOCAL GOVERNMENT
FY 2023-2024
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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, 2023
Executive Director/CEO
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DavisFa r r
CERTIFIED PUBLIC ACCOUNTANTS
Davis Farr LLP
18201 Von Korman Avenue I Suite 1100 1 Irvine, CA 92612
Main: 949.474.2020 1 Fax: 949.263.5520
Independent Auditor's Report
Honorable Mayor and Members of 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, 2024, 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, 2024, 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 21 to the financial statements, during the year ended June 30, 2024,
the City recorded a prior period adjustment. 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.
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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
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
financial statements. We do not express an opinion or provide any assurance on the information
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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
19, 2024 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 19, 2024
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CITY OF TUSTIN
Management's Discussion and Analysis (Unaudited)
June 30, 2024
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, 2024. 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
• As of June 30, 2024, the City's assets and deferred outflows of resources exceeded its liabilities
and deferred inflows of resources by $823 million (net position). The net position includes $583
million invested in capital assets, $54 million in restricted net position, and $186 million in
unrestricted net position.
• The City's total net position increased by $3.6 million during the fiscal year ended June 30,
2024, after a prior period adjustment as noted in Note 21. Governmental activities accounted
for a decrease of $8.7 million, while business -type activity increased by $12.3 million.
• In governmental activities, total tax revenues increased by approximately $1.6 million
primarily driven by property tax due to assessed value increases from annual CPI
adjustment and ownership changes. Meanwhile, expenditure excluding the Navy
North Hangar Fire incident responses increased by $10.9 million mainly from
contractually obligated labor cost, inflationary adjustments and major capital projects
expenditures.
• Net position for business -type activity increased primarily due to a one-time $12.8
million asset contribution of a per -and polyfluoroalkyl substance (PFAS) treatment
plant from the Orange County Water District (OCWD).
• During the fiscal year, the City undertook emergency cleanup measures, under a cooperative
agreement with U.S. Navy, as the result of a fire that destroyed the Navy -owned Tustin North
Hangar. As of June 30, 2024, the City incurred $71.8 million in related expenditures and
received $36.6 million in reimbursements from the Navy. The City expects to receive the
remaining $35.2 million reimbursement revenue in the upcoming fiscal year.
• On February 6, 2024, the City issued a 2024 Water Revenue Bond totaling $4,125,000 with a
fixed interest rate of 4.82% over 20 years. The bond proceeds will finance the acquisition and
construction of certain capital improvements for the City's water enterprise.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City's basic financial
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CITY OF TUSTIN
Management's Discussion and Analysis (Unaudited)
June 30, 2024
Overview of the Financial Statements (continued)
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 the 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
intended to recover all or a significant portion of their costs through user fees and charges.
Governmental activities of the City, the Tustin Housing Authority, and Tustin Public Financing Authority,
both of which are blended component units, cover general government, public safety, community
services, and public works functions. 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
funds of the City can be divided into three categories: governmental funds, proprietary funds, and
fiduciary funds.
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CITY OF TUSTIN
Management's Discussion and Analysis (Unaudited)
June 30, 2024
Fund Financial Statements (Continued)
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 and Housing Authority 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.
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.
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CITY OF TUSTIN
Management's Discussion and Analysis (Unaudited)
June 30, 2024
Fund Financial Statements (Continued)
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 statements
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 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 several 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, and 2014-1. 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.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents certain
required supplementary information, which includes the Budgetary Comparison Schedules for the
General Fund and one other major fund, as well as schedules of funding progress for the City's defined
benefit pension plans and other post -employment healthcare benefits (OPEB) plan. The 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.
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CITY OF TUSTIN
Management's Discussion and Analysis (Unaudited)
June 30, 2024
Government -wide Financial Analysis
The government -wide financial statements provide long-term and short-term information about the
City's overallfinancial condition. This analysis addresses the financial statements of the City as a whole.
The largest portion of the City's net position (71%) 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 grew by $37.4 million or 3.9% compared to the prior fiscal year, while its total
deferred outflows of resources decreased by $2.7 million or 6.5%. As previously discussed, OCWD is
currently constructing a PFAS treatment plant on behalf of the City. The value of the project -in -
progress on June 30, 2024 was $12.8 million, boosting the water enterprise's capital asset. The
increase also included a $35.2 million receivable from the Navy, reimbursing the City for costs related
to the Navy North Hangar fire incident.
The City's total liabilities increased by $34.3 million, or 19%, while its total deferred inflows of
resources decreased by $3.2 million. The increase in liabilities was primarily driven by $22.8 million in
accrued expenditures related to the Navy North Hangar fire incident, a $3.8 million increase in net
pension liability, and the issuance of the 2024 Water Revenue Bonds of $4,125,000 on February 6,
2024.
The primary reason for variance in deferred outflows and deferred inflows of resources was due to
changes in CaIPERS pension liability valuation. Additionally, deferred inflows of resources was
reduced by a $1.7 million amortization of leases established under GASB Statement No. 87.
The City's total net position increased by $3.6 million or 0.44% (after a prior period adjustment from
interest accrual on certain housing loans as shown in Note 21). 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, 2024
Government -wide Financial Analysis (Continued)
City of Tustin
Summary of Net Position
As of June 30, 2024
(in millions of dollars)
Governmental Business -Type
Total
Activities Activities
Total
% Chancre
2023* 2024 2023 2024
2023
2024
2023-24
Assets:
Current and other assets
$ 351.0 $ 369.4 $ 15.0 $ 18.1
$ 366.0
$ 387.5
Capital assets
538.0 540.5 67.3 80.7
605.3
621.2
Total Assets
889.0 909.9 82.3 98.8
971.3
1,008.7
3.9%
Deferred Outflows of Resources
36.8 34.4 5.0 4.7
41.8
39.1
-6.5%
Liabilities:
Current liabilities
Non -Current liabilities
Total Liabilities
Deferred Inflows of
Resources
Net Position:
Net investment in capital assets
Restricted
Unrestricted
Total Net Position
27.2
52.7
3.8
4.8
31.0
57.5
105.4
110.3
43.1
46.0
148.5
156.3
132.6
163.0
46.9
50.8
179.5
213.8 19.1%
14.2 11.0 0.1 0.1 14.3 11.1 -22.4%
533.7
535.3
34.5 47.6 568.2
582.9 70.8%
57.3
54.2
- - 57.3
54.2
188.0
180.8
5.8 5.0 193.8
185.8
779.0
770.3
40.3 52.6 819.3
822.9 0.44%
*2023 numbers are restated to reflect the prior period adjustment (Note 21)
Governmental Activities. The net position of the City's governmental activities decreased by $8.7
million or -1.12% to $770.3 million (after restatement from accrued interest on certain housing loans
as shown in Note 21). Of the $770.3 million in net position, $535.3 million is invested in capital assets
such as land, buildings, equipment, and infrastructure; $54.2 million is restricted to specifically
stipulated spending agreements originated by law, contracts, or other agreements with external
parties. The remaining $180.8 million is unrestricted and available to be designated for specific
purposes by the City Council to meet the City's ongoing obligations.
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CITY OF TUSTIN
Management's Discussion and Analysis (Unaudited)
June 30, 2024
Government -wide Financial Analysis (Continued)
:millions
12.0.0
100.0
80.0
60.0
40.0
20.0
IN
AW
Program Revenues and Expenses - Governmental Activities
Year Ending June 30, 2024
GENERAL PUBUCSAFETY PU13LICWORKS COMMUNITY OPERATING CAPITAL GRANTS
GOVERNMENT SERVICES GRANTSA14D AND
CONTRIBUTIONS CONTRIBUTIONS
W Expenses Ld Revenue
General Revenues By Source - Governmental Activities
saps tax
44.8
Investment income
14.7%
Unrestricted
motor vehi-cle
in -lieu fees
0.1%
Business license taxes
0.6%
Other general
revenues
0.5%
Property taxes
.33.9%
i ransgenx occupancy saxes
3.0%
Other taxes
2A%
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CITY OF TUSTIN
Management's Discussion and Analysis (Unaudited)
June 30, 2024
Government -wide Financial Analysis (Continued)
City of Tustin
Summary
of Changes
in Net Position
For the Year Ended June 30, 2024
(in millions of dollars)
Governmental
Business -Type
Activities
Activities
Total
2023*
2024
2023 2024
2023
2024
Revenues:
Program revenues:
Charges for services
$ 15.8
$ 14.8
$ 19.5 $ 20.6 $
35.3 $
35.4
Operating grants and contributions
12.8
89.9
- -
12.8
89.9
Capital grants and contributions
3.1
2.3
4.1 13.4
7.2
15.7
General revenues:
Taxes
70.7
66.9
- -
70.7
66.9
Earnings(loss) on investments
6.1
11.6
0.3 0.8
6.4
12.4
Motor vehicle in -lieu fees
0.1
0.1
- -
0.1
0.1
Miscellaneous
1.1
0.4
- -
1.1
0.4
Profit participation
11.6
-
- -
11.6
-
Total Revenues
121.3
186.0
23.9 34.8
145.2
220.8
Expenses:
General government
23.3
98.4
- -
23.3
98.4
Public safety
43.4
51.5
- -
43.4
51.5
Public works
34.3
34.9
- -
34.3
34.9
Community services
11.0
9.9
- -
11.0
9.9
Water
-
-
22.6 22.5
22.6
22.5
Total Expenses
112.0
194.7
22.6 22.5
134.6
217.2
Change in net position
9.3
(8.7)
1.3 12.3
10.6
3.6
Net Position - Beginning
769.7
779.0
39.0 40.3
808.7
819.3
Net Position - Ending 779.0 $ 770.3 40.3 52.6 819.3 822.9
*2023 numbers are restated to reflect the prior period adjustment (Note 21)
Tota l
% Change
2023-2024
52.1%
61.4%
1.3%
0.4%
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CITY OF TUSTIN
Management's Discussion and Analysis (Unaudited)
June 30, 2024
Government -wide Financial Analysis (Continued)
In governmental activities, the decrease in net position of $8.7 million (after restatement for accrued interest
on certain housing loans as shown in Note 21) was primarily due to the following:
• The net pension liability increased by $3.7 million, a reduction to the net position mostly due to
actual investment return being slightly short of the targeted return (actual 5.8% vs. target 6.8%)
and changes in actuarial assumptions regarding future economic and geographic factors
affecting the calculation of pension liability.
• Changes in pension actuarial assumptions and pension contributions made by the City after
valuation date impact the calculation of deferred inflow of resources and deferred outflow of
resources. The net impact of pension changes is a $1.3 million reduction to the net position.
• Depreciation expense of $15 million was offset by a $18 million increase in capital assets.
• Accounts payable increased by $5 million primarily due to professional service contracts
construction and maintenance services.
• Other liabilities reduced by $1.8 million primarily from to a decrease in American Rescue Plan
Act (ARPA) fund unearned revenue, offset by increases in claims and judgments, compensated
absences, OPEB liability, and developer deposits.
In fiscal year 2022-23, the net position of governmental activities increased by $9.3 million compared
to a decrease of $8.7 million in 2023-24, reflecting a year -over year change of $18 million. A
significant factor of the change was due to a one-time $11.6 million revenue received from a Profit
Participation Agreement between the City and the developer during fiscal year 2022-23. Other
differences can be attributed to the following:
• Property tax increased by approximately $1.6 million primarily from annual CPI adjustments
and ownership changes in fiscal year 2024.
• Investment earnings increased by $5.5 million due to the improved market conditions.
• Excluding impact from the Navy North Hange fire incident, expenditure increased by $10.9
million mainly due to contractually obligated labor costs, public safety expenditures, and
inflation adjustments.
Business -Type activities net position increased by $12.3 million primarily due to a one-time $12.8
million asset contribution of a per -and polyfluoroalkyl substance (PFAS) treatment plant from OCWD
during the fiscal year.
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CITY OF TUSTIN
Management's Discussion and Analysis (Unaudited)
June 30, 2024
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 is useful in assessing the City's financing
requirements.
As of the end of the current fiscal year, the City's governmental funds reported a total combined ending
fund balance of $265.6 million, a decrease of $41 million compared to the prior year. The following
factors impacted the net change to fund balance:
• A combined increase of $1.8 million from property tax and transient occupancy tax, driven by a
strong real estate market and post pandemic tourism recovery, offset by a $0.4 million decrease
in sales tax and franchise fee due to lower spending from inflation.
• Investment earnings increased by $5.5 million due to improved market conditions.
• The City incurred $72 million in costs related to the Navy North Hangar fire incident and
received $36.7 million in reimbursements from the Navy in fiscal year 2024, resulting in a net
$35 million decrease to fund balance. The City anticipates receiving the remaining
reimbursements from the Navy in the coming fiscal year.
• Excluding the North Hangar fire incident, expenditure increased by $13.8 million. This included
an $8.2 million increase in capital outlays for various projects. Noncapital expenditure rose by
$5.6 million mainly due to contractually obligated labor costs, public safety expenditures, and
inflation adjustments.
Approximately $107.5 million or 40.5% of the City's governmental fund balance constitutes
nonspendable fund balance. Of this amount, $102.5 million represents land held for resale. The
remaining fund balance includes $43.4 million in restricted funds, $16.2 million assigned to capital
projects, and $98.5 million in unassigned funds.
The General Fund is the primary operating fund of the City. At the end of the current fiscal year, the
unassigned fund balance of the General Fund was $98.5 million, while total fund balance was $233.3
million. As a measure of the General Fund's liquidity, it may be useful to compare unassigned fund
balance to total fund expenditures. The unassigned fund balance covers 54% of the total General Fund
expenditures, including transfers out.
The Housing Authority Special Revenue Fund is the only other major governmental funds of the City. At
the end of the current fiscal year, it reported a restricted fund balance of $0.5 million for increasing or
improving low -and -moderate income housing. The Housing Authority Fund holds $8.6 million in
affordable housing loans and related accrued interest receivables.
14
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Management's Discussion and Analysis (Unaudited)
June 30, 2024
City of Tustin
Summary of Changes in Fund Balances - General Fund
For the Year Ended June 30, 2024
(in millions of dollars)
Revenues:
Taxes
Charges for services
Intergovernmental
Intergovernmental - N. Hangar fire
Fines and forfeitures
Licenses and permits
Investment income
Other
Profit participation
Total Revenues
Expenditures:
General government
General government - N. Hangar fire
Public safety
Public works
Community services
Capital outlay
Debt service
Total Expenses
Excess of Revenues Over
(Under) Expenditures
Other Financing Sources (Uses):
Net transfers
Lease acquisition
Net Change in Fund Balance
Tota l
% Change
2023 2024 2023-24
$ 67.6 $
69.5
5.0
5.1
0.6
1.3
-
36.7
1.2
0.9
3.0
2.2
5.0
9.7
4.7
4.4
11.6
-
98.7
129.8 31.5%
19.8
22.7
-
71.7
44.3
46.9
16.8
18.4
5.4
5.6
3.8
10.3
0.6
0.9
90.7
176.4 94.5%
8.0 (46.6)
2.2 5.2
- 0.1
$ 10.2 $ (41.4)-505.8%
15
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Management's Discussion and Analysis (Unaudited)
June 30, 2024
Financial Analysis of the Government's Funds (Continued)
General Fund total revenues increased by $31.1 million or 31.5% as noted in the previous table.
Significant transactions affecting revenues in the General Fund were as follows:
• Majority of the increase was due to $36.7 million in intergovernmental revenue from the Navy's
reimbursements to cover the cost of the Navy -owned North Hangar fire incident.
• One-time profit participation revenue of $11.6 million was recorded during last fiscal year
2022-2023.
• Taxes increased by$1.9 million primarily due to higher property tax revenues as high demands
in the housing market continues. Sales tax revenue totaled approximately $35.4 million,
virtually no changes from prior year reflecting a change in consumer spending trends
impacted by inflation concerns.
• Other revenues, including charges for services and license and permits, experienced a decrease
of $1 million due to several one-time settlements and cost recovery items in previous fiscal
year.
• Investment earnings increased by$4.7 million during 2024, largely as a resultof improved market
conditions.
General Fund's total expenditures increased by $85.7 million, or 94.5%, primarily due to a $71.7 million
expenditure incurred from the Navy North Hangar fire. The remaining $14 million increase was mainly
attributed to labor obligations, higher public service demands, capital outlays, and inflation adjustments.
General Fund Budgetary Highlights
The General Fund actual revenues were $40 million lower than the amended budgeted revenues,
primarily due to a receivable for the Navy North Hangar fire incident cost reimbursement. The amended
budgeted expenditures totaled $237.7 million, reflecting a $105 million increase from the original
budgeted expenditures of $132.6 million. This increase in appropriations was largely associated with a
$88 million budget for the Navy North Hangar fire incident, as well as additional capital outlays for
improvements in public infrastructure, public facilities, and special equipment.
Actual General Fund expenditures were $61.2 million less than the amended budgeted amount of
$237.7 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 revenue for the Water
Fund exceeded total expenses by $12.3 million due to a one-time contribution of PFAS treatment plant
from Orange County Water District, resulting in an increase in net position, from $40.3 million as of
June 30, 2023 to $52.6 million as of June 30, 2024.
Operating revenues increased by $1.1 million. Related operating costs increased by $0.5 million from
the prior fiscal year primarily due to increases in labor and on -going maintenance costs.
16
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Management's Discussion and Analysis (Unaudited)
June 30, 2024
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,
2024 amounts to $621.2 million, net of accumulated depreciation. The investment in capital assets
includes land, buildings and system improvements, machinery and equipment, park facilities, roads,
and bridges.
City of Tustin
Summary of Changes in Capital Assets
For the Year Ended June 30, 2024
(in mittions of dollars)
Governmental
Business -Type
Activities
Activities
Total
2023
2024
2023 2024
2023
2024
Land
$ 105.3
$ 105.3
$ 1.2 $ 1.2
$ 106.5 $
106.4
Right of way
45.9
45.9
- -
45.9
45.9
Construction in progress
6.6
11.9
7.6 23.2
14.2
35.1
Buildings and improvements
114.8
115.0
9.5 9.1
124.3
124.1
Machinery and equipment
5.6
6.0
- -
5.6
6.0
Infrastructure
257.1
254.7
- -
257.1
254.7
Lease assets
0.4
0.3
- -
0.4
0.3
Subsciption based IT
2.2
1.5
- -
2.2
1.5
Property, plant and equipment
-
-
49.1 47.2
49.1
47.2
Total
% Change
2023-2024
Total Capital Assets, Net $537.9 $540.5 67.4 80.7 605.3 $621.2 2.6%
The net increase of $15.9 million in capital assets consists of additions totaling $33.4 million (net of
transfers from construction in progress and asset disposals); depreciation expense of $17.5 million. In
fiscal year 2024, the following major construction projects were completed:
• Various Roadway and Public Infrastructure Maintenance
• Red Hill Avenue Rehabilitation between San Juan Street and Melvin Way
• Legacy Annex Tenant Improvement
• Alley Grove Promenade Project in Tustin Legacy
The following major construction projects were in progress in fiscal year 2024: South Hangar
Renovation, Neighborhood D-South Infrastructure Phase 2, Tustin Legacy Dog Park, Pedestrian
Bridge, Beneta Wells, and various road widening, extension, and traffic signal projects.
17
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Management's Discussion and Analysis (Unaudited)
June 30, 2024
Capital Assets (continued)
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
Long-term Debt
Atthe end of the current fiscal year, the City had total outstanding long-term liabilities of $156.3 million.
Of this amount, $39.5 million is secured solely by specified revenue sources such as water service
charges.
Bands payable
Claims and judgments
Postemployment
benefits obligation
Compensated absences
Lease payable
Subscription based payable
Pension liabilities
City of Tustin
Summary of Changes in Long -Term Liabilities
For the Year Ended June 30.2024
((n millions of dollars)
Governmental
Business -Type
Activities
Activities
Total
2023 2024
2023 2024
2023
2024
$ - $ -
$ 36.8 $ 39.5
$ 36.8
$ 39.5
9.3 11.0
- -
9.3
11.0
11.8 12.2
_.5 1.6
13.3
13.8
5.0 5.0
0.4 0.4
5.4
5.4
0.5 0.3
- -
0.5
0.3
2.1 =.5
- -
2.1
1.5
76.6 80.3
4.4 4.5
81.0
84.8
Total
% Change
2023-2024
Total Outstanding Debt 105.3 110.3 43.1 46.0 $148.4 156.3 5.3%
Overall, long-term debt increased by $7.9 million, or 5.3%, compared to the prior year's balance. This
increase was primarily driven by a $3.8 million rise in the City's net pension liability, as the actual
investment return fell short of the assumed discount rate of 6.8%. Additionally, claims and judgments
increased by $1.7 million, and the issuance of the $4.1 million 2024 Water Revenue Bond contributed
to the increase.
Additional information on the City's long-term debt can be found in Notes 9, 10, and 11 in the basic
financial statements section of this report.
IN'
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Management's Discussion and Analysis (Unaudited)
June 30, 2024
Next Year's Budget
On June 18, 2024, the City Council adopted the Budget for Fiscal Years 2024-2025, representing the
second year of the 2023-2025 Biennial Budget. The Budget allocates resources aligned with the City
Council's strategic priorities to deliver effective, high -quality public services across the community. The
2024-2025 Budget includes a total appropriation of $282 million. The General Fund's estimated
revenues are $97.5 million, while budgeted appropriations amount to $98.4 million. The resulting
operating deficit will be addressed through the planned use of reserves. The appropriations are $1
million higher than the prior year's amended appropriation, excluding the impact of the Navy North
Hangar fire incident.
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.
19
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
T
Z
a
Z
n
a
r
cn
a
m
3
m
z
cn
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
STATEMENT OF NET POSITION
June 30, 2024
ASSETS:
Cash and investments
Receivables:
Accounts
Interest
Leases
Loans
Allowance for uncollectibles
Internal balances
Prepaid items and deposits
Land held for resale
Restricted assets:
Cash and investments with fiscal agents
Cash and investments held by trust
Capital assets:
Not being depreciated
Being depreciated, net
TOTAL ASSETS
DEFERRED OUTFLOWS OF RESOURCES:
Deferred charge on refunding
Deferred amounts on OPEB plan
Deferred amounts on pension plans
TOTAL DEFERRED OUTFLOWS OF RESOURCES
LIABILITIES:
Accounts payable and accrued liabilities
Interest payable
Deposits payable
Unearned revenue
Noncurrent liabilities:
Due within one year
Due in more than one year
Due in more than one year - OPEB liability
Due in more than one year - pension liability
TOTAL LIABILITIES
DEFERRED INFLOWS OF RESOURCES:
Deferred amounts on leases
Deferred amounts on OPEB plan
Deferred amounts on pension plans
TOTAL DEFERRED INFLOWS OF RESOURCES
NET POSITION:
Net investment in capital assets
Restricted for:
Community services
Public safety
Public works
Unrestricted
TOTAL NET POSITION
Governmental Business -type
Activities Activity Total
$ 171,798,036 $ 13,830,937 $ 185,628,973
47,285,455
3,922,372
51,207,827
4,497,079
40,638
4,537,717
7,717,950
-
7,717,950
6,419,992
-
6,419,992
(1,611,436)
-
(1,611,436)
3,830,700
(3,830,700)
-
1,211,470
27,863
1,239,333
102,457,773
-
102,457,773
11,813,499
4,093,918
15,907,417
14,024,098
-
14,024,098
163,097,569
24,334,688
187,432,257
377,424,745
56,378,685
433,803,430
909,966,930
98,798,401
1,008,765,331
-
2,886,452
2,886,452
1,366,919
131,655
1,498,574
32,959,170
1,676,446
34,635,616
34,326,089
4,694,553
39,020,642
36,163,429
3,450,011
39,613,440
11,096
485,200
496,296
10,908,633
827,420
11,736,053
5,663,423
-
5,663,423
5,862,751
1,814,771
7,677,522
11,922,915
38,105,551
50,028,466
12,219,424
1,630,724
13,850,148
80,310,956
4,451,241
84,762,197
163,062,627
50,764,918
213,827,545
7,051,289
-
7,051,289
1,303,850
128,953
1,432, 803
2,573,799
-
2,573,799
10,928,938
128,953
11,057, 891
535,362,349
47,613,869
582,976,218
11,953,645
-
11,953,645
1,156,787
-
1,156,787
41,033,303
-
41,033,303
180,795,370
4,985,214
185,780,584
$ 770,301,454
$ 52,599,083
$ 822,900,537
21
See accompanying notes to the basic financial statements
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
STATEMENT OF ACTIVITIES
For the year ended June 30, 2024
Functions/programs
Expenses
Governmental activities:
General government
$ 98,403,543
Public safety
51,506,630
Public works
34,924,407
Community services
9,918,277
Interest on long-term liabilities
32,133
Total governmental activities
194,784,990
Business -type activity:
Water 22,540,741
Total $ 217,325,731
Program Revenues
Charges Operating Capital
for Grants and Grants and
Services Contributions Contributions
$ 3,836,719 $ 78,381,343 $ -
1,237,042 5,545,142 -
6,692,885 4,653,819 2,216,922
3,034,343 1,306,337 86,075
14,800,989 89,886,641 2,302,997
20,596,504 - 13,376,076
$ 35,397,493 $ 89,886,641 $ 15,679,073
General revenues:
Taxes:
Property
Franchise
Transient occupancy
Business license
Sales
Unrestricted intergovernmental revenue
Earnings on investments
Miscellaneous
Total general revenues
Change in net position
NET POSITION AT BEGINNING OF YEAR, AS RESTATED
NET POSITION AT END OF YEAR
See accompanying notes to the basic financial statements
22
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
Net (Expense) Revenue and
Changes in Net Position
Governmental Business -type
Activities Activity Total
$ (16,185,481)
(44,724,446)
(21,360,781)
(5,491,522)
(32,133)
(87,794,363)
(87,794,363)
- $ (16,185,481)
- (44,724,446)
- (21,360,781)
- (5,491,522)
- (32,133)
(87,794,363)
11,431,839
11,431,839
11,431,839
(76,362,524)
26,805,569
-
26,805,569
1,864,197
-
1,864,197
2,392,315
-
2,392,315
460,416
-
460,416
35,403,145
-
35,403,145
99,310
-
99,310
11,629,540
819,851
12,449,391
368,622
28,054
396,676
79,023,114
847,905
79,871,019
(8,771,249)
12,279,744
3,508,495
779,072,703
40,319,339
819,392,042
$ 770,301,454
$ 52,599,083
$ 822,900,537
23
See accompanying notes to the basic financial statements
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
7TIN
�;-,lavv
ILI
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
BALANCESHEET
GOVERNMENTALFUNDS
June 30, 2024
Other
Total
Housing
Governmental
Governmental
General
Authority Fund
Funds
Funds
ASSETS
Cash and investments
$ 133,777,593
$ 710,114
$ 37,310,329
$ 171,798,036
Restricted cash and investments
11,754,830
-
58,669
11,813,499
Restricted cash and investments held by trust
14,024,098
-
-
14,024,098
Receivables:
Accounts
46,125,328
-
1,160,127
47,285,455
Interest
648,464
3,699,872
148,743
4,497,079
Leases
3,057,633
-
4,660,317
7,717,950
Loans
433,220
5,986,772
-
6,419,992
Allowance for uncollectibles
(533,947)
(1,077,489)
-
(1,611,436)
Prepaid items and deposits
1,175,237
-
36,233
1,211,470
Due from other funds
131,869
-
-
131,869
Advances to other funds
3,830,700
-
-
3,830,700
Land held for resale
102,457,773
-
-
102,457,773
TOTAL ASSETS
$ 316,882,798
$ 9,319,269
$ 43,374,418
$ 369,576,485
LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES
LIABILITIES
Accounts payable and
accrued liabilities
$ 32,779,186
$ 243,522 $
3,140,721 $
36,163,429
Deposits payable
10,907,263
1,370
-
10,908,633
Due to other funds
-
-
131,869
131,869
Interest payable
11,096
-
-
11,096
Unearned revenue
1,611,457
-
4,051,966
5,663,423
TOTAL LIABILITIES
45,309,002
244,892
7,324,556
52,878,450
DEFERRED INFLOW OF RESOURCES
Unavailable revenue
35,441,861
8,515,882
51,064
44,008,807
Lease related
2,774,316
-
4,276,973
7,051,289
TOTAL DEFERRED INFLOW
OF RESOURCES
38,216,177
8,515,882
4,328,037
51,060,096
FUND BALANCES
Nonspendable
107,523,830
-
36,233
107,560,063
Restricted
27,317,982
558,495
15,532,283
43,408,760
Assigned
-
-
16,155,894
16,155,894
Unassigned
98,515,807
-
(2,585)
98,513,222
TOTAL FUND BALANCES
233,357,619
558,495
31,721,825
265,637,939
TOTAL LIABILITIES, DEFERRED
INFLOWS OF RESOURCES
AND FUND BALANCES
$ 316,882,798
$ 9,319,269 $
43,374,418 $
369,576,485
25
See accompanying notes to the basic financial statements
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET POSITION
June 30, 2024
Fund balances of governmental funds $ 265,637,939
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. 540,522,314
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, 2024 are:
Claims and judgments payable $ (10,995,980)
Compensated absences payable (4,954,588)
Subscription -based information technology arrangements (1,480,460)
Lease payable (354,638)
Total long-term liabilities (17,785,666)
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
32,959,170
Deferred inflows of resources
(2,573,799)
Pension liability
(80,310,956)
(49,925,585)
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
1,366,919
Deferred inflows of resources
(1,303,850)
Post employment benefit liability
(12,219,424)
(12,156,355)
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.
44,008,807
Net position of governmental activities
$ 770,301,454
26
See accompanying notes to the basic financial statements
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
REVENUES
Taxes
Licenses and permits
Fines and forfeitures
Investment income
Intergovernmental revenue
Charges for services
Rental income
Otherrevenue
TOTAL REVENUES
EXPENDITURES
Current:
General government
Public safety
Public works
Community services
Capital outlay
Debt service:
Principal retirement
Interest expenditures
TOTAL EXPENDITURES
For the year ended June 30, 2024
Other
Total
Housing Authority
Governmental
Governmental
General
Fund
Funds
Funds
$ 69,493,486
$ -
$ -
$ 69,493,486
2,246,204
-
-
2,246,204
928,628
-
2,150
930,778
9,650,880
11,340
1,967,327
11,629,547
37,981,832
659,464
17,166,415
55,807,711
5,110,902
2,245
375,903
5,489,050
3,263,520
-
397,953
3,661,473
1,098,165
-
412,500
1,510,665
129,773,617
673,049
20,322,248
150,768,914
94,387,427
-
7,000
94,394,427
46,860,655
-
169,057
47,029,712
18,445,346
-
2,019,502
20,464,848
5,611,123
1,348,502
375,393
7,335,018
10,255,517
-
11,554,301
21,809,818
829,157
-
-
829,157
32,133
-
-
32,133
176,421,358
1,348,502
14,125,253
191,895,113
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (46,647,741) (675,453) 6,196,995 (41,126,199)
OTHER FINANCING SOURCES (USES)
Transfer in
Transfer out
Proceeds of leases
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGES IN FUND BALANCES
10,262,550
880,616 4,200,200
15,343,366
(5,080,816)
- (10,262,550)
(15,343,366)
75,055
- -
75,055
5,256,789
880,616 (6,062,350)
75,055
(41,390,952)
205,163 134,645
(41,051,144)
FUND BALANCES - BEGINNING OF YEAR 274,748,571 353,332 31,587,180 306,689,083
FUND BALANCES - END OF YEAR $ 233,357,619 $ 558,495 $ 31,721,825 $ 265,637,939
27
See accompanying notes to the basic financial statements
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
For the year ended June 30, 2024
Net changes in fund balances - total governmental funds $ (41,051,144)
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
$ 17,997,161
Disposition of capital assets
(366,008)
Depreciation expense
(15,048,197)
2,582,956
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:
Issuance of debt - lease
(75,055)
Principal payments - lease
188,366
Principal payments - subscription -based information technology arrangements
640,791
Net changes in claims and judgments payable
(1,666,881)
Net changes in compensated absences payable
1,064
(911,715)
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.
(5,006,605)
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. 20,990
Some revenues and 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 35,594,269
Change in net position of governmental activities $ (8,771,249)
28
See accompanying notes to the basic financial statements
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
STATEMENT OF NET POSITION
PROPRIETARY FUND
June 30, 2024
ASSETS:
CURRENT ASSETS:
Cash and investments
Accounts receivable
Interest receivable
Prepaid items
Restricted cash and investments
TOTAL CURRENT ASSETS
NONCURRENT ASSETS:
Capital assets:
Not being depreciated
Being depreciated, net
TOTAL NONCURRENT ASSETS
TOTAL ASSETS
DEFERRED OUTFLOWS OF RESOURCES:
Deferred charge on refunding
Deferred amounts on pension plans
Deferred amounts on OPEB plan
TOTAL DEFERRED OUTFLOWS OF RESOURCES
LIABILITIES:
CURRENT LIABILITIES:
Accounts payable and accrued liabilities
Deposits payable
Interest payable
Advances from other funds
Compensated absences payable
Bonds payable
TOTAL CURRENT LIABILITIES
LONG-TERM LIABILITIES:
Compensated absences payable
Bonds payable
Net pension liability
Net OPEB liability
TOTAL LONG-TERM LIABILITIES
TOTAL LIABILITIES
DEFERRED INFLOWS OF RESOURCES:
Deferred amounts on OPEB plan
TOTAL DEFERRED INFLOWS OF RESOURCES
NET POSITION:
Net investment in capital assets
Unrestricted
TOTAL NET POSITION
Business -type
Activity
Water
Enterprise Fund
$ 13,830,937
3,922,372
40,638
27,863
4.093919
21,91J,12ZS
24,334,688
56378.695
�:111rAs:190
102_629.101
2,886,452
1,676,446
131,655
4,694,553
3,450,011
827,420
485,200
3,830,700
287,166
1,527,605
1 OA09.102
95,722
38,009,829
4,451,241
1,630,724
44,187,516
54,595,618
128,953
129 953
47,613,869
4,985,214
$ 52,599,083
See accompanying notes to the basic financial statements 29
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
PROPRIETARY FUND
For the year ended June 30, 2024
OPERATING REVENUES:
Charges for services
TOTAL OPERATING REVENUES
OPERATING EXPENSES:
Personnel services
Purchased water
Maintenance and operation
Depreciation
TOTAL OPERATING EXPENSES
OPERATING INCOME (LOSS)
NONOPERATING REVENUES (EXPENSES):
Investment income
Other income
Interest expense and other fiscal charges
TOTAL NONOPERATING REVENUES (EXPENSES)
INCOME BEFORE CAPITAL CONTRIBUTIONS
Capital contributions
Contributed capital assets
TOTAL CAPITAL CONTRIBUTIONS
CHANGE IN NET POSITION
NET POSITION AT BEGINNING OF YEAR
NET POSITION AT END OF YEAR
Business -type
Activity
Water
Enterprise Fund
$ 20,596,504
20,596,504
4,549,781
9,633,937
4,508,038
2,449,588
21,141,344
(544,840)
819,851
28,054
(1,399,397)
(551,492)
555,748
12,820,328
13,376,076
12,279,744
40,319,339
$ 52,599,083
See accompanying notes to the basic financial statements 30
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
STATEMENT OF CASH FLOWS
PROPRIETARY FUND
For the year ended June 30, 2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from customers
Payments to suppliers
Payments to employees
NET CASH PROVIDED BY OPERATING ACTIVITIES
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Acquisition of capital assets
Proceeds from the issuance of long-term debt
Principal paid on bonds
Interest paid on long-term debt
NET CASH USED BY CAPITAL AND RELATED FINANCING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment income
NET CASH PROVIDED BY INVESTING ACTIVITIES
NET INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS - END OF YEAR
CASH AND CASH EQUIVALENTS:
Cash and investments - current assets
Cash and investments - restricted assets
TOTAL CASH AND CASH EQUIVALENTS
Business -type
Activity
Water
Enterprise Fund
S 19,670,161
(13,304,709)
(4,156,112)
(2,445,103)
4,125,000
(1,345,000)
(1,084,540)
(749,643)
819,090
819,090
2,278,787
15,646,068
$ 17,924,855
S 13,830,937
4,093,918
S 17,924,855
See accompanying notes to the basic financial statements 31
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
STATEMENT OF CASH FLOWS
PROPRIETARY FUND
(CONTINUED)
For the year ended June 30, 2024
Business -type
Activity
Water
Enterprise Fund
RECONCILIATION OF OPERATING INCOME (LOSS) TO
NET CASH PROVIDED BY OPERATING ACTIVITIES:
Operating income (loss)
$ (544,840)
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation and amortization
2,449,588
Other nonoperating income (expense)
28,054
Change in assets, liabilities and deferrals:
(Increase) decrease in accounts receivable
(954,397)
(Increase) decrease in prepaid items
109,787
(Increase) decrease in deferred outflows of resources
170,180
Increase (decrease) in accounts payable and accrued liabilities
627,837
Increase (decrease) in deposits payable
99,642
Increase (decrease) in compensated absences
32,055
Increase (decrease) in net pension liability
80,626
Increase (decrease) in total OPEB liability
120,473
Increase (decrease) in deferred inflows of resources
(9,665)
NET CASH PROVIDED BY OPERATING ACTIVITIES
$ 2,209,340
SCHEDULE OF NON -CASH CAPITAL AND INVESTING ACTIVITIES
Unrealized gain on investments
$ 195,060
Donated capital assets
12,820,328
See accompanying notes to the basic financial statements 32
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
STATEMENT OF FIDUCIARY NET POSITION
June 30, 2024
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
$ 3,363,976
$ -
$ 60,634
Investments:
Money markets
-
137,783
-
Mutual funds - equity
-
2,145,684
-
Mutual funds - fixed income
-
1,985,540
-
Restricted cash and investments
3,350
-
14,129,068
Receivables:
Accounts
-
-
53,588
TOTAL ASSETS
3,367,326
4,269,007
14,243,290
DEFERRED OUTFLOWS OF RESOURCES:
Deferred charge on refunding
5,101,118
-
-
LIABILITIES:
Accounts payable
-
-
35,461
Interest payable
548,508
-
-
Long-term liabilities:
Due within one year
2,566,077
-
-
Due in more than one year
43,767,495
-
-
TOTAL LIABILITIES
46,882,080
-
35,461
NET POSITION:
Restricted for:
Postemployment benefits other than pensions
-
4,269,007
-
Individuals, organizations and other governments
(38,413,636)
-
14,207,829
TOTAL NET POSITION
$ (38,413,636)
$ 4,269,007
$ 14,207,829
33
See accompanying notes to the basic financial statements
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
ADDITIONS:
Tax revenue
Investment income
Employer contributions
TOTAL ADDITIONS
DEDUCTIONS:
Administrative expenses
Community services
Principal
Interest
TOTAL DEDUCTIONS
CHANGE IN NET POSITION
For the year ended June 30, 2024
Successor
Agency to the
Tustin Community
Redevelopment
Other
Agency Private
Post -Employment
Purpose Trust
Benefit (OPEB) Custodial
Fund
Trust Fund Funds
$ 3,976,973 $ - $ 7,237,941
10,952 352,276 566,868
- 500,000 -
3,987,925 852,276 7,804,809
-
17,386 177,018
25,803
- -
-
- 2,680,000
1,694,932
- 4,209,525
1,720,735
17,386 7,066,543
2,267,190
834,890 738,266
NET POSITION - BEGINNING OF YEAR
(40,680,826)
3,434,117
13,469,563
NET POSITION - END OF YEAR $
(38,413,636) $
4,269,007
$ 14,207,829
34
See accompanying notes to the basic financial statements
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
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Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE I - SUMMARY OF SIGNIFICANTACCOUNTING 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.
36
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE I - SUMMARY OF SIGNIFICANTACCOUNTING 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 regard 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.
37
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE I - SUMMARY OF SIGNIFICANTACCOUNTING 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 use the economic resource 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.
M
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE I - SUMMARY OF SIGNIFICANTACCOUNTING 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 Housing Authori . Fund is used to account for revenues and associated expenditures to be
used for the operation of the City's homeless shelter; and for increasing or improving low- and
moderate -income housing.
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.
39
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE I - SUMMARY OF SIGNIFICANTACCOUNTING POLICIES (CONTINUED)
c. Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)
The City's fund structure also includes the following fund types:
Governmental Funds
Special Revenue Funds are used to account for the proceeds of specific revenue sources that are
restricted by law or administrative action for a specified purpose.
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
Pending Accounting Standards
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.
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.
.V
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE I - SUMMARY OF SIGNIFICANTA CCOUNTING POLICIES (CONTINUED)
Pending Accounting Standards (Continued)
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.
In December 2023, GASB issued Statement No. 102 — Certain Risk Disclosures. State and local
governments face a variety of risks that could negatively affect the level of service they provide or
their ability to meet obligations as they come due. Although governments are required to disclose
information about their exposure to some of those risks, essential information about other risks that
are prevalent among state and local governments is not routinely disclosed because it is not
explicitly required. The objective of this Statement is to provide users of government financial
statements with essential information about risks related to a government's vulnerabilities due to
certain concentrations or constraints.
This Statement defines a concentration as a lack of diversity related to an aspect of a significant
inflow of resources or outflow of resources. A constraint is a limitation imposed on a government
by an external party or by formal action of the government's highest level of decision -making
authority. Concentrations and constraints may limit a government's ability to acquire resources or
control spending.
This Statement requires a government to assess whether a concentration or constraint makes the
primary government reporting unit or other reporting units that report a liability for revenue debt
vulnerable to the risk of a substantial impact. Additionally, this Statement requires a government to
assess whether an event or events associated with a concentration or constraint that could cause the
substantial impact have occurred, have begun to occur, or are more likely than not to begin to
occur within 12 months of the date the financial statements are issued.
If a government determines that those criteria for disclosure have been met for a concentration or
constraint, it should disclose information in notes to financial statements in sufficient detail to
enable users of financial statements to understand the nature of the circumstances disclosed and the
government's vulnerability to the risk of a substantial impact. The disclosure should include
descriptions of the following:
41
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
d. New Accounting Pronouncements (Continued)
Pending Accounting Standards (Continued)
• The concentration or constraint
• Each event associated with the concentration or constraint that could cause a substantial
impact if the event had occurred or had begun to occur prior to the issuance of the financial
statements
• Actions taken by the government prior to the issuance of the financial statements to
mitigate the risk.
In April 2024, GASB issued Statement No. 103 — Financial Reporting Model Improvements. The
objective of this Statement is to improve key components of the financial reporting model to
enhance its effectiveness in providing information that is essential for decision making and
assessing a government's accountability. This Statement also addresses certain application issues.
Management's Discussion and Anal
This Statement continues the requirement that the basic financial statements be preceded by
management's discussion and analysis (MD&A), which is presented as required supplementary
information (RSI). MD&A provides an objective and easily readable analysis of the government's
financial activities based on currently known facts, decisions, or conditions and presents
comparisons between the current year and the prior year. This Statement requires that the
information presented in MD&A be limited to the related topics discussed in five sections: (1)
Overview of the Financial Statements, (2) Financial Summary, (3) Detailed Analyses, (4)
Significant Capital Asset and Long -Term Financing Activity, and (5) Currently Known Facts,
Decisions, or Conditions. Furthermore, this Statement stresses that the detailed analyses should
explain why balances and results of operations changed rather than simply presenting the amounts
or percentages by which they changed. This Statement emphasizes that the analysis provided in
MD&A should avoid unnecessary duplication by not repeating explanations that may be relevant
to multiple sections and that "boilerplate" discussions should be avoided by presenting only the
most relevant information, focused on the primary government. In addition, this Statement
continues the requirement that information included in MD&A distinguish between that of the
primary government and its discretely presented component units.
Unusual or Infrequent Items
This Statement describes unusual or infrequent items as transactions and other events that are
either unusual in nature or infrequent in occurrence. Furthermore, governments are required to
display the inflows and outflows related to each unusual or infrequent item separately as the last
presented flow(s) of resources prior to the net change in resource flows in the government -wide,
governmental fund, and proprietary fund statements of resource flows.
42
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
d. New Accounting Pronouncements (Continued)
Pending Accounting Standards (Continued)
Presentation of the Proprietary Fund Statement of Revenues, Expenses, and Changes in Fund Net
Position
This Statement requires that the proprietary fund statement of revenues, expenses, and changes in
fund net position continue to distinguish between operating and nonoperating revenues and
expenses. Operating revenues and expenses are defined as revenues and expenses other than
nonoperating revenues and expenses. Nonoperating revenues and expenses are defined as (1)
subsidies received and provided, (2) contributions to permanent and term endowments, (3)
revenues and expenses related to financing, (4) resources from the disposal of capital assets and
inventory, and (5) investment income and expenses.
In addition to the subtotals currently required in a proprietary fund statement of revenues,
expenses, and changes in fund net position, this Statement requires that a subtotal for operating
income (loss) and noncapital subsidies be presented before reporting other nonoperating revenues
and expenses. Subsidies are defined as (1) resources received from another party or fund (a) for
which the proprietary fund does not provide goods and services to the other party or fund and (b)
that directly or indirectly keep the proprietary fund's current or future fees and charges lower than
they would be otherwise, (2) resources provided to another party or fund (a) for which the other
party or fund does not provide goods and services to the proprietary fund and (b) that are
recoverable through the proprietary f ind's current or future pricing policies, and (3) all other
transfers.
Major Component Unit Information
This Statement requires governments to present each major component unit separately in the
reporting entity's statement of net position and statement of activities if it does not reduce the
readability of the statements. If the readability of those statements would be reduced, combining
statements of major component units should be presented after the fund financial statements.
Budgetary Comparison Information
This Statement requires governments to present budgetary comparison information using a single
method of communication—RSI. Governments also are required to present (1) variances between
original and final budget amounts and (2) variances between final budget and actual amounts. An
explanation of significant variances is required to be presented in notes to RSI.
43
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE I - SUMMARY OF SIGNIFICANTA CCOUNTING POLICIES (CONTINUED)
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.
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
Subscription -based IT assets 1 — 7 years
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
e. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Net
Position or Equity (Continued)
Capital Assets (Continued)
Lease 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. Lease assets are amortized using the straight-line method of each leases' term.
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, represents 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.
W,
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE I - SUMMARY OF SIGNIFICANTA CCOUNTING 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)
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, represents 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:
• 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 lease 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.
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE I - SUMMARY OF SIGNIFICANTA CCOUNTING POLICIES (CONTINUED)
e. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Net
Position or Equity (Continued)
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.
Property Tax Calendar
Property taxes are assessed and collected each fiscal year according to the following property tax
calendar:
Lien date
January 1 st
Levy period
July I" to June 30th
Levy date
On or before 4th Monday in September
Due date
November 1st - 1st installment
February 1st - 2na installment
Collection date
December 101h - I" installment
April 1 Ott, - 2na 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.
Leases
At the commencement of the lease, the City initially measures the payable at the present value of
payments expected to be paid during the lease term. Subsequently, the payable is reduced by the
principal portion of payments made. The lease assets are initially measured by the present value of
payments expected to be paid during the lease term. Subsequently, the lease assets are amortized
over the life of the lease term.
47
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE I - SUMMARY OF SIGNIFICANTA CCOUNTING POLICIES (CONTINUED)
e. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Net
Position or Equity (Continued)
Subscription -Based Information Technology (IT) Arrangements
The City is a participant in subscription -based IT arrangements as detailed in Footnote 9. The City
recognizes a subscription -based IT payable and right to use IT assets in the financial statements.
At the commencement of the arrangement, the City initially measures the payable at the present
value of payments expected to be paid during the arrangement term. Subsequently, the payable is
reduced by the principal portion of payments made. The right to use assets are initially measured at
the initial amount of the subscription -based IT payable. Subsequently, the right to use assets are
amortized over the life of the arrangement term.
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 (Ca1PERS) 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.
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.
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE I - SUMMARY OF SIGNIFICANTACCOUNTING POLICIES (CONTINUED)
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 - CASHAND INVESTMENTS
Cash and Investments
Cash and investments as of June 30, 2024, are classified in the accompanying financial statements as
follows:
Unrestricted assets:
Cash and investments
Restricted assets:
Cash and investments
Cash and investments held by trust
Total cash and investments
Government-
Fiduciary
Wide
Funds
Statement of
Statement of
Net Position
Net Position Total
$ 185,628,973 $ 3,424,610 $ 189,053,583
15,907,417
14,024,098
$ 215,560,488
14,132,418
4,269,007
$ 21,826,035
Cash and investments as of June 30, 2024, consist of the following:
30,039,835
18,293,105
$ 237,386,523
Cash on hand $ 10,050
Deposits with financial institutions 4,489,069
Investments 232,887,404
Total cash and investments $ 237,386,523
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.
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 2 - CASHAND INVESTMENTS (CONTINUED)
Investments Authorized by the California Government Code and the City's Investment Policy
(Continued)
Investment Types Maximum
Authorized by the City's Policy Maturity
Negotiable certificates of deposit 5 years
Commercial paper 270 days
Local Agency Investment Pool (LAIF)
Orange County Investment Pool (OCIP)
Bankers acceptances
Medium -term notes
Municipal and state securities
Federal agency bonds or notes
United States (U.S.) Treasury securities
Money market mutual funds
Agency mortgage pass -through securities
Repurchase agreements
Supranationals
Shares of beneficial interest by a JPA
N/A - Not Applicable
Investments Authorized by Debt Agreements
N/A
N/A
180 days
5 years
5 years
5 years
5 years
N/A
5 years
1 year
5 years
5 years
Maximum
Maximum
Percentage
Investment in
of Portfolio
One Issuer
30%
30%
None
None
30%
30%
30%
None
None
20%
20%
30%
5%
None
5%
5%
Max permitted
by State
Treasurer
Max permitted
by County
Treasurer
5%
5%
5%
50%
None
10%
10%
5%
5%
50%
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 the concentration of credit risk.
50
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 2 - CASHAND INVESTMENTS (CONTINUED)
Investments Authorized by Debt Agreements (Continued)
Investment Types
Authorized by Debt Agreements
U.S Treasury Obligations
U.S Government Sponsored
Agency Securities
Banker's Acceptances
Commercial Paper
Money Market Mutual Funds
Investment Contracts
Certificates of Deposit
Corporate Notes
Repurchase Agreements
N/A - Not Applicable
Disclosures Relating to Interest Rate Risk
Maximum
Maturity
None
Maximum
Percentage
of Portfolio
Maximum
Investment in
One Issuer
None None
N/A
None
None
270 days
None
None
180 days
None
None
N/A
None
None
30 years
None
None
None
None
None
None
None
None
None
None
None
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of
an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair
value to changes in market interest rates. One of the ways that the City manages its exposure to interest
rate risk is by purchasing a combination of shorter 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.
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:
51
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 2 - CASHAND INVESTMENTS (CONTINUED)
Disclosures Relating to Interest Rate Risk (Continued)
Investment Type
U.S. Treasury Notes
U.S. Government Sponsored
Agency Securities:
Federal National Mortgage
Association (FNMA)
Federal Home Loan Bank (FHLB)
Federal Farm Credit Bank (FFCB)
Money Market Fund
Local Agency Investment Pool (LAIF)
California Asset Management Program (CAMP)
Negotiable Certificates of Deposit
Commercial Paper
Medium -term Notes
Commercial Mortgage -backed Securities
Held by Fiscal Agents:
Money Market Mutual Funds
Held by Pension Trust:
Money Market Mutual Funds
Mutual Funds - Equity
Mutual Funds - Fixed Income
Held by OPEB Trust:
Money Market Mutual Funds
Mutual Funds - Equity
Mutual Funds - Fixed Income
Total
Disclosures Relating to Credit Risk
12 Months or 12 to 24 25 - 60
less Months Months Total
$ 36,818,006 $ 3,729,141 $ 5,830,184 $ 46,377,331
1,913,280 -
-
1,913,280
2,960,890 -
5,365,753
8,326,643
995,683 -
5,366,478
6,362,161
812,025 -
-
812,025
7,029,895 -
-
7,029,895
89,532,930 -
-
89,532,930
- 941,929
225,975
1,167,904
998,529 -
-
998,529
14,565,584 11,543,008
5,295,630
31,404,222
242,961 -
2,165,896
2,408,857
18,260,522 -
-
18,260,522
450,998 -
-
450,998
7,050,145 -
-
7,050,145
6,522,955 -
-
6,522,955
137,783 - - 137,783
2,145,684 - - 2,145,684
1,985,540 - - 1,985,540
$ 192,423,410 $16,214,078 $24,249,916 $ 232,887,404
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.
52
Docusign Envelope ID: llA96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 2 - CASHAND INVESTMENTS (CONTINUED)
Disclosures Relating to Credit Risk (Continued)
Minimum
Total as of
Required
Not
Investment Type
June 30, 2024
Rating
AAA
AA A
Rated
U.S. TreasuryNotes *
$ 46,377,331
N/A
$ -
$ - $ -
$ -
U.S. Government Sponsored
Agency Securities:
FNMA
1,913,280
N/A
1,913,280
- -
-
FHLB
8,326,643
N/A
8,326,643
- -
-
FFCB
6,362,161
N/A
6,362,161
- -
-
Money Market Fund
812,025
N/A
812,025
- -
-
LAY
7,029,895
N/A
-
- -
7,029,895
CAMP
89,532,930
N/A
89,532,930
- -
-
Negotiable Certificates of Deposit
1,167,904
N/A
-
- -
1,167,904
Commercial Paper
998,529
A-1
-
- 998,529
-
MediunrtermNotes
31,404,222
A
1,668,603
3,728,577 26,007,042
-
CornmercialMortgage-backed Securities
2,408,857
A
2,408,857
- -
-
Held by Fiscal Agents:
Money Market Mutual Funds
18,260,522
AAA
18,260,522
- -
-
Held by Pension Trust:
Money Market Mutual Funds
450,998
N/A
450,998
- -
-
Mutual Funds - Equity
7,050,145
N/A
-
- -
7,050,145
Mutual Funds - Fixed Income
6,522,955
N/A
-
- -
6,522,955
Held by OPEB Trust:
Money Market Mutual Funds
137,783
N/A
137,783
- -
-
Mutual Funds - Equity
2,145,684
N/A
-
- -
2,145,684
Mutual Funds - Fixed Income
1,985,540
N/A
-
- -
1,985,540
Total
$232,887,404
$129,873,802
$ 3,728,577 $27,005,571
$ 25,902,123
* Securities are exempt from disclosure
Concentration of Credit Risk
There were no investments in any one issuer that represented five percent or more of the total City's
investments.
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:
53
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 2 - CASHAND INVESTMENTS (CONTINUED)
Custodial Credit Risk (Continued)
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 fair 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, 2024, none of the City's deposits with financial institutions in excess of federal
depository insurance limits were held in uncollateralized accounts.
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.
54
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 2 - CASHAND 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
Risk Management
Investment Objective
Strategic Ranges
Fair Value Measurements
Moderate
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.
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.
0% - 20% Cash
40% - 60% Fixed Income
40% - 60% Equity
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 inputs are significant
unobservable inputs.
55
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 2 - CASHAND INVESTMENTS (CONTINUED)
Fair Value Measurements (Continued)
The City has the following recurring fair value measurements as of June 30, 2024:
U.S. Treasury Notes
U.S. Government Sponsored
Agency Securities:
FNMA
FHLB
FFCB
Money Market Fund
Negotiable Certificates of Deposit
Commercial Paper
Mediunrterm Notes
Commercial Mortgage -backed Securities
Held by Pension Trust:
Mutual Funds - Equity
Mutual Funds - Fixed Income
Held by OPEB Trust:
Mutual Funds - Equity
Mutual Funds - Fixed Income
Total Leveled Investments
LAIF *
CAMP*
Money Market Mutual Funds*:
Held by Fiscal Agents
Held by Pension Trust
Held by OPEB Trust
Total Investment Portfolio
Quoted Observable Unobservable
Prices Inputs Inputs
Level Level Level
Total
$ - $ 46,377,331 $ -
$ 46,377,331
- 1,913,280 -
1,913,280
- 8,326,643 -
8,326,643
- 6,362,161 -
6,362,161
- 812,025 -
812,025
- 1,167,904 -
1,167,904
- 998,529 -
998,529
- 31,404,222 -
31,404,222
- 2,408,857 -
2,408,857
7,050,145
6,522,955
2,145,684
1,985,540
$ 17,704,324
* Not subject to fair value measurement hierarchy.
NOTE 3 - LOANS RECEIVABLE
$ 99,770,952 $
- 7,050,145
- 6,522,955
- 2,145,684
- 1,985,540
117,475,276
7,029,895
89,532,930
18,260,522
450,998
137,783
$232,887,404
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, 2024,
including accrued interest of $20,524 was $370,524.
56
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 3 - LOANS RECEIVABLE (CONTINUED)
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, 2024, was $12,840. An allowance of $12,840 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, 2024, including accrued interest of $54,662, was $427,762. An allowance of $427,762 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, 2024, including accrued interest of $563, was $60,684.
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 and accrued interest is forgivable, should
the owner comply with the Affordable Housing Covenant as of the maturity date. As of June 30, 2024,
the total outstanding principal balance was $92,478,647. An allowance of $87,854,715 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, 2024, including accrued interest of $64,649, was
$1,064,649. An allowance of $1,064,649 has been recorded to reflect the amount of the note not
expected to be collectible.
57
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 4 — INTERFUND RECEIVABLES, TRANSFERS, AND ADVANCES
The composition of interfund receivable/payable balances as of June 30, 2024:
General Fund
CDBG Fund
CFD Construction
Total
Due From Due to Other
Other Funds Funds
$ 131,869
76,550
55,319
$ 131,869 $ 131,869
The composition of interfund transfers for the year ended June 30, 2024, is as follows:
Transfers In Transfers Out Amount
General Fund Other Governmental Funds $ 10,262,550
Other Governmental Funds General Fund 4,200,200
Housing Authority Fund General Fund 880,616
$ 15,343,366
The transfers during the fiscal year ended June 30, 2024, were for the following purposes:
Other governmental fund (ARPA Special Revenue Fund) transferred to the General Fund $4,297,000
for costs of rehiring public sector staff and revenue replacement intended to cover public facility safety
salaries.
Other governmental fund (Special Tax B Special Revenue Fund) transferred $5,733,521 to the General
Fund for eligible Special Tax B area expenditures.
Other governmental fund (Measure M Special Revenue Fund) transferred $149,199 to the General
Fund for eligible Measure M expenditures.
Other governmental fund (Construction 95-1 Fund) transferred $82,830 to the General Fund for
eligible Assessment District 95-1 expenditures.
The General Fund transferred to the Housing Authority Fund $880,616 to support the homeless shelter
and to buy back an affordable housing property.
General Fund transferred to other governmental fund (Other Capital Projects Fund) $3,900,000 to
support the Main Street project, and $300,200 went to Facility Improvement.
The composition of interfund advances for the year ended June 30, 2024, is as follows:
Advance From
General Fund
Advance To
Water Enterprise Fund
Amount
$ 3,830,700
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 4 — INTERFUND RECEIVABLES, TRANSFERS, AND ADVANCES (CONTINUED)
In May 2023, the General Fund advanced a total of $3,830,700 to the Water Enterprise Fund to
replenish cash to meet bond covenant requirements. The advance accrues interest at a 3.5% annual
interest rate and has a maturity date no later than July 1, 2030.
NOTE 5 - LAND HELD FOR RESALE
Land held for resale as of June 30, 2024, consisted of the following:
Pacific Center East*
Tustin Legacy
Total Land Held for Resale
General Fund
$ 30,380,902
72,076,871
$ 102,457,773
*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.
59
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
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 in 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 five 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 five 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.
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.
.11
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 6 - LAND TRANSFER FROM THE UNITED STATES GOVERNMENT (CONTINUED)
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, 2024, 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 — LEASE RECIEVABLES
The City is a lessor in 18 noncancellable leases for use of City land and buildings. The lessees are
required to make fixed monthly payments ranging from $500 to $43,680. The City recognized
$1,726,797 in lease revenue and $187,090 in interest revenue during the current fiscal year related to
these agreements. As of June 30, 2024, the lease receivable is $7,717,950 and deferred inflows of
resources is $7,051,289.
A schedule of future payments is included below:
June 30,
Principal
2025
$ 1,680,076
2026
1,710,411
2027
471,800
2028
390,153
2028
411,604
2030 - 2034
1,928,643
2035 - 2039
946,394
2040 - 2041
178,869
Totals
$ 7,717,950
Interest
Total
$ 153,531
$ 1,833,607
111,434
1,821,845
82,854
554,654
75,503
465,656
67,909
479,513
222,033
2,150,676
73,673
1,020,067
3,155
182,024
$ 790,092
$ 8,508,042
61
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 8 - CAPITAL ASSETS
A summary of changes in the Governmental Activities capital assets for the year ended June 30, 2024,
is as follows:
Capital assets, not depreciated:
Land
Right of way
Construction in progress
Total capital assets,
not depreciated
Capital assets, being depreciated:
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Lease assets - buildings
Lease assets - machinery and equipment
Lease assets - vehicles
Subscription -based IT assets
Total capital assets,
being depreciated
Less accumulated depreciation for:
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Lease assets - buildings
Lease assets - machinery and equipment
Lease assets - vehicles
Subscription -based IT assets
Total accumulated
depreciation
Total capital assets,
being depreciated, net
Total governmental activities
capital assets, net
Balance at
June 30, 2023
Additions
Deletions
Balance at
June 30, 2024
$ 105,254,634
$ -
$ -
$ 105,254,634
45,926,681
-
-
45,926,681
6,629,658
16,337,832
(11,051,236)
11,916,254
157,810,973
16,337,832
(11,051,236)
163,097,569
86,708,311
3,469,232
-
90,177,543
75,546,529
1,271,767
(9,782)
76,808,514
20,188,465
1,807,426
(921,029)
21,074,862
425,533,864
6,070,519
(4,594,775)
427,009,608
258,160
-
(8,720)
249,440
156,937
75,055
-
231,992
250,601
-
-
250,601
2,797,692
-
(26,558)
2,771,134
611,440,559
12,693,999
(5,560,864)
618,573,694
(27,796,315)
(1,692,298)
-
(29,488,613)
(19,668,652)
(2,883,733)
9,782
(22,542,603)
(14,528,137)
(1,419,643)
828,714
(15,119,066)
(168,456,822)
(8,193,833)
4,329,802
(172,320,853)
(75,749)
(52,625)
-
(128,374)
(107,593)
(65,070)
-
(172,663)
(100,240)
(50,120)
-
(150,360)
(562,100)
(690,875)
26,558
(1,226,417)
(231,295,608) (15,048,197) 5,194,856 (241,148,949)
380,144,951 (2,354,198) (366,008)
377,424,745
$ 537,955,924 $13,983,634 $(11,417,244) $ 540,522,314
62
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 8 - CAPITAL ASSETS (CONTINUED)
Depreciation expense was charged to functions/programs of the governmental activities as follows:
General Government
Public Safety
Public Works
Community Services
Total
$ 3,180,477
394,152
9,235,283
2,238,285
$ 15,048,197
A summary of changes in the Business -type Activity capital assets for the year ended June 30, 2024, is
as follows:
Business -Type Activities
Capital assets, not depreciated:
Land
Construction in progress
Total capital assets,
not depreciated
Capital assets, being depreciated:
Buildings and improvements
Property, plant and equipment
Total capital assets,
being depreciated
Less accumulated depreciation for:
Buildings and improvements
Property, plant and equipment
Total accummulated
depreciation
Total capital assets,
being depreciated, net
Total business -type activity
capital assets, net
Balance at
June 30, 2023
$ 1,177,216
7,612,275
Additions Deletions
15,795,197 (250,000)
8,789,491 15,795,197 (250,000)
Balance at
June 30, 2024
$ 1,177,216
23,157,472
24,334,688
16,498,710 11,390 (10,694) 16,499,406
83,663,680 264,592 (8,700) 83,919,572
100,162,390 275,982 (19,394) 100,418,978
(7,009,317) (360,758)
(34,600,782) (2,088,830)
(41,610,099) (2,449,588)
58,552,291 (2,173,606)
10,694 (7,359,381)
8,700 (36,680,912)
19,394 (44,040,293)
- 56,378,685
$ 67,341,782 $13,621,591 $ (250,000) $ 80,713,373
63
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 9 - LONG-TERMLIABILITIES
A summary of long-term liability activity for the year ended June 30, 2024, is as follows:
Balance
Balance
Due Within
July 1, 2023
Additions
Deletions
June 30, 2024
One Year
Governmental Activities:
Claims and judgments
$ 9,329,099
$2,935,084
$(1,268,203)
$10,995,980
$ 1,401,024
Subscription -based IT payable
2,121,251
-
(640,791)
1,480,460
629,084
Lease payable
467,949
75,055
(188,366)
354,638
116,702
Compensated absences
4,955,652
3,890,106
(3,891,170)
4,954,588
3,715,941
Total governmental activities
long-term liabilities
$16,873,951
$6,900,245
$(5,988,530)
$17,785,666
$ 5,862,751
Business -type Activity:
2016 Water Refunding
Revenue Bonds
$21,515,000
$ -
$ (905,000)
$20,610,000
$ 925,000
Bond premium
960,039
-
(52,605)
907,434
52,605
2020 Taxable Water
Refunding Revenue Bonds
14,335,000
-
(440,000)
13,895,000
445,000
Direct Placement 2024
2024 Water Revenue Bonds
-
4,125,000
-
4,125,000
105,000
Compensated absences
350,833
325,609
(293,554)
382,888
287,166
Total business -type activity
long-term liabilities
$37,160,872
$4,450,609
$(1,691,159)
$39,920,322
$ 1,814,771
Governmental Activities
Subscription -Based Information Technology (IT) Arrangements Pqyable
The City has entered into 18 subscription -based IT arrangements for various software applications and
is required to make annual principal and interest payments ranging from $1,815 to $172,746 over the
arrangement terms. The payable at June 30, 2024, was $1,480,460. The future principal and interest
lease payments as of June 30, 2024, were as follows:
June 30,
Principal
Interest
Total
2025
$ 629,084
$ 46,647
$ 675,731
2026
298,126
20,978
319,104
2027
208,899
13,263
222,162
2028
140,455
7,720
148,175
2029
115,307
4,447
119,754
2030
88,589
1,227
89,816
Totals
$ 1,480,460
$ 94,282
$ 1,574,742
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 9 - LONG-TERMLIABILITIES (CONTINUED)
Governmental Activities (Continued)
Lease Pqyable
The City has entered into 12 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, 2024, was $354,638. The future principal and interest lease payments as of June
30, 2024, were as follows:
June 30,
Principal
Interest
Total
2025
$ 116,702
$ 14,512
$ 131,214
2026
125,213
9,898
135,111
2027
93,316
2,470
95,786
2028
9,570
438
10,008
2029
9,837
171
10,008
Totals
$ 354,638
$ 27,489
$ 382,127
Business -type Activity
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, 2024, is $2,258,897.
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, 2024, total
M,
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 9 - LONG-TERMLIABILITIES (CONTINUED)
Business -type Activity (Continued)
2016 Water Refunding Revenue Bonds (Continued)
interest and principal remaining on the bonds is $27,050,362. During the fiscal year, the total interest
expense incurred was $687,300, principal payments were $905,000, and net revenues were $3,348,526.
The annual debt service requirements to amortize the bonds are as follows:
June 30, Principal
2025 $ 925,000
2026
2027
2028
2029
2030 - 2034
2035 - 2039
2040 - 2041
Subtotals
Add: Premium
Totals
950,000
975,000
1,015,000
1,035,000
5,790,000
6,880,000
3.040.000
20,610,000
907,434
$ 21,517,434
2020 Taxable Water Refunding Revenue Bonds
Interest
$ 669,200
645,450
615,450
576,450
551,075
2,168,062
1,077,275
137,400
6,440,362
$ 6,440,362
Total
$ 1,594,200
1,595,450
1,590,450
1,591,450
1,586,075
7,958,062
7,957,275
3,177,400
27,050,362
907,434
$ 27,957,796
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, 2024, is $627,555.
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 9 - LONG-TERMLIABILITIES (CONTINUED)
Business -type Activity (Continued)
2020 Taxable Water Refunding Revenue Bonds (Continued)
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, 2024, total
interest and principal remaining on the bonds is $19,124,376. During the fiscal year, the total interest
expense incurred was $397,240, principal payments were $440,000, and net revenues were $3,348,526.
The annual debt service requirements to amortize the bonds are as follows:
June 30,
2025
2026
2027
2028
2029
2030-2034
2035-2039
2040-2043
Totals
2024 Water Revenue Bonds
Principal
$ 445,000
450,000
465,000
475,000
490,000
2,605,000
2,990,000
5,975,000
$ 13,895,000
Interest Total
$ 389,721
381,760
373,169
363,827
353,904
1,589,214
1,209,510
568,271
$ 5,229,376
$ 834,721
831,760
838,169
838,827
843,904
4,194,214
4,199,510
6,543,271
$ 19,124,376
On February 6, 2024, the Tustin Public Financing Authority ("Authority") and the City of Tustin
("City") authorized the issuance of direct placement debt with Capital One Public Financing, LLC.
The City received $4,125,000 of proceeds with a 4.82% fixed interest rated over the 20-year life of the
bonds. The bonds are being issued for the purpose of providing funds to finance the acquisition and
construction of certain improvements and facilities to the City's municipal water enterprise.
The City's outstanding bonds are secured by a pledge, charge and lien upon revenue which consist
primarily of installment payments to be made by the City to the Authority pursuant to an Installment
Sale Agreement, dated as of February 1, 2024, by and between the City and the Authority. The City's
obligations under the Installment Sale Agreement will be subordinate to the City's obligations with
respect to the payment of debt service on its City of Tustin 2016 Water Refunding Revenue Bonds and
its City of Tustin Taxable Water Refunding Revenue Bonds, Series 2020.
67
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 9 - LONG-TERMLIABILITIES (CONTINUED)
Business -type Activity (Continued)
2024 Water Revenue Bonds (Continued)
The outstanding debt contains (1) a provision that in an event of default, the holder of any outstanding
Parity Obligations is entitled to accelerate such Indebtedness, Bank may declare all sums of interest
and principal and any other amounts owing under the Note or under any other Loan Document
immediately due and payable, without notice of default, presentment or demand for payment, protest
or notice of nonpayment or dishonor or any other notices or demands. Otherwise, an Event of Default
hereunder shall not result in an acceleration of Borrower's obligations hereunder or under the Note and
(2) a provision that the District may prepay all, but not less than all of the aggregate unpaid amounts
after giving the Original Purchaser 30 days' prior written notice and at a price of 101% of the principal
amount so paid.
At June 30, 2024, total interest and principal remaining on the bonds is $6,559,030. During the fiscal
year, the total interest expense incurred was $75,222 and there were no principal payments.
The annual debt service requirements to amortize the bonds are as follows:
June 30,
2025
2026
2027
2028
2029
2030-2034
2035-2039
2040-2044
Totals
NOTE 10 - PENSION PLANS
Principal
Interest
Total
$ 105,000
$ 224,783 $
329,783
135,000
193,764
328,764
140,000
187,257
327,257
145,000
180,509
325,509
155,000
173,520
328,520
890,000
748,546
1,638,546
1,125,000
512,125
1,637,125
1,430,000
213,526
1,643,526
$ 4,125,000
$ 2,434,030 $
6,559,030
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 (Ca1PERS), 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. Ca1PERS issues publicly available reports that
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 10 - PENSION PLANS (CONTINUED)
a. General Information about the Pension Plans (Continued)
include a full description of the pension plans regarding benefit provisions, assumptions and
membership information that can be found on the Ca1PERS website.
Benefits Provided
Ca1PERS 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 five 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 five years of service. All members are eligible for non -duty disability retirement benefits
after five 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.
.•
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 10 - PENSION PLANS (CONTINUED)
a. General Information about the Pension Plans (Continued)
Benefits Provided (Continued)
The information below includes the aggregate total pension plan related items:
Miscellaneous
Net pension liability $ (34,240,313)
Deferred outflows of resources - pension 11,798,428
Deferred inflows of resources - pension -
Pension expense 7,714,903
Safety
$ (50,521,884)
22,837,188
(2,573,799)
9,547,285
Total
$ (84,762,197)
34,635,616
(2,573,799)
17,262,188
The Plans' provisions and benefits in effect at the measurement date ended June 30, 2023, are
summarized as follows:
Hire date
Benefit formula
Benefit vesting schedule
Benefit payments
Retirement age
Monthly benefits, as a % of
eligible compensation
Required employee contribution rates
Required employer contribution rates
Normal cost rate
Payment of unfunded liability
Prior to
January 1, 2012
2%@55
5 years of service
monthly for life
50+
2.00%
10.00%
Miscellaneous
January 1, 2012 to
December 31, 2012
2%@60
5 years of service
monthly for life
50+
2.00%
10.00%
10.01%
$2,613,842
On or After
January 1, 2013
2%@62
5 years of service
monthly for life
52+
2.00%
7.25%
70
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
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, 2023, are
summarized as follows:
Hire date
Benefit formula.
Benefit vesting schedule
Benefit payments
Retirement age
Monthly benefits, as a % of
eligible compensation
Required employee contribution rates
Required employer contribution rates:
Normal cost rate
Payment of unfunded liability
Employees Covered
Safety
Prior to
January 1, 2012 to
On or After
January 1, 2012
December 31, 2012
January 1, 2013
3%@50
2%@50
2.7%@57
5 years of service
5 years of service
5 years of service
monthly for life
monthly for life
monthly for life
50+
50+
50+
3.00% 2.00% 2.70%
12.00% 12.00% 13.75%
27.11% 19.95% 13.54%
$ 3,366,887 $ - $ 27,231
At the valuation date ended June 30, 2022, the following employees were covered by the benefit
terms for the Miscellaneous Plan:
Miscellaneous
Inactive employees or beneficiaries currently receiving benefits 323
Inactive employees entitled to but not yet receiving benefits 305
Active employees 213
Total 841
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 Ca1PERS' 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.
71
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 10 - PENSION PLANS (CONTINUED)
Contributions (Continued)
a. General Information about the Pension Plans (Continued)
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, 2023, using an annual actuarial valuation as of June 30, 2022, rolled forward to June
30, 2023, using standard update procedures. A summary of principal assumptions and methods
used to determine the net pension liability is shown on the next page.
Actuarial Assumptions
The total pension liabilities in the June 30, 2023, actuarial valuations were determined using the
following actuarial assumptions:
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Inflation
Projected Salary Increase
Mortality Rate Table
Post Retirement Benefit Increase
Miscellaneous
June 30, 2022
June 30, 2023
Safety
June 30, 2022
June 30, 2023
Entry -Age Actuarial Entry -Age Actuarial
Cost Method Cost Method
6.90%
6.90%
2.30%
2.30%
(1)
(1)
(2)
(2)
(3)
(3)
(1) Varies by entry age and service.
(2) The mortality table used was developed based on CaIPERS-specific data. The probabilities
of mortality are based on the 2021 Ca1PERS Experience Study and Review of Actuarial
Assumptions. Mortality rates incorporate full generational mortality improvement using 80%
of Scale MP-2020 published by the Society of Actuaries. For more details on this table,
please refer to the 2021 experience study report frorallovember 2021 that can be found on
the CalPERS website.
(3) The lesser of contract COLA or 2.30% until Purchasing Power Protection Allowance Floor
on purchasing power applies, 2.30% thereafter.
72
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
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, Ca1PERS took into account both short-
term and long-term market return expectations. Using historical returns of all of the funds'
asset classes, expected compound (geometric) returns were calculated over the next 20 years
using a building-block approach.
The expected rate of return was then adjusted to account for assumed administrative expenses of 10
Basis points. The expected real rates of return by asset class are as follows:
Asset Class
Global Equity - Cap -weighted
Global Equity - Non -Cap -weighted
Private Equity
Treasury
Mortgage -backed Securities
Investment Grade Corporates
High Yield
Emerging Market Debt
Private Debt
Real Assets
Leverage
Assumed
Asset
Real
Allocation
Return1,2
30.00%
4.54%
12.00%
3.84%
13.00%
7.28%
5.00%
0.27%
5.00%
0.50%
10.00%
1.56%
5.00%
2.27%
5.00%
2.48%
5.00%
3.57%
15.00%
3.21%
-5.00%
-0.59%
1 - An expected inflation of 2.30% used for this period.
2 - Figures are based on the 2021 Asset Liability Management study.
73
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 10 - PENSION PLANS (CONTINUED)
b. Net Pension Liability (Continued)
Discount Rate
The discount rate used to measure the total pension liability was 6.90%. 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.
c. Changes in the Net Pension Liability
The changes in the net pension liability for the Miscellaneous Plan are as follows:
Balance at June 30, 2022
(Valuation Date)
Changes in the Year:
Service cost
Interest on the total pension liability
Differences between actual and
expected experience
Changes of benefit terms
Contribution - employer
Contribution - employee
Net investment income
Administrative expenses
Benefit payments, including refunds
of employee contributions
Net Changes
Balance at June 30, 2023
(Measurement Date)
Increase (Decrease)
Total Plan Net Pension
Pension
Liability
$149,716,480
3,103,217
10,246,763
Fiduciary
Net Position
$116,096,362
Liability
(Asset)
$ 33,620,118
3,103,217
- 10,246,763
647,330 -
647,330
199,701 -
199,701
- 5,229,452
(5,229,452)
- 1,267,450
(1,267,450)
- 7,165,286
(7,165,286)
- (85,372)
85,372
(7,222,606) (7,222,606) -
6,974,405 6,354,210 620,195
$156,690,885 $122,450,572 $ 34,240,313
74
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 10 - PENSION PLANS (CONTINUED)
c. Changes in the Net Pension Liability (Continued)
As of June 30, 2024, the City reported $50,521,884 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, 2023, 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, 2022, rolled forward to June 30, 2023, 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.
The City's proportionate share of the net pension liability for the Safety Plan as of measurement
dates ended June 30, 2022, and 2023 was as follows:
Safety
Proportion - June 30, 2022 0.68936%
Proportion - June 30, 2023
Change - Increase (Decrease)
0.67588%
-0.01348%
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 6.90%, 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:
1 % Decrease
Net Pension Liability
Current Discount Rate
Net Pension Liability
1% Increase
Net Pension Liability
Miscellaneous Safety
5.90% 5.90%
$ 55,568,211
6.90%
$ 34,240,313
7.90%
$ 16,719,702
$ 76,745,092
6.90%
$ 50,521,884
7.90%
$ 29,082,546
75
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 10 - PENSION PLANS (CONTINUED)
c. Changes in the Net Pension Liability (Continued)
Pension Plan Fiduciary Net Position
Detailed information about each pension plan's fiduciary net position is available in the separately
issued Ca1PERS financial reports.
d. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
For the year ended June 30, 2024, the City recognized pension expense of $7,714,906 and
$9,547,285 for the Miscellaneous and Safety Plans, respectively. At June 30, 2024, the City
reported deferred outflows of resources and deferred inflows of resources related to pensions from
the following sources:
Pension contributions subsequent to measurement date
Differences between actual and expected experience
Change in assumptions
Net dffeerences between projected and actual
earrings on plan investments
Total
Pension contributions subsequent to measurement date
Differences between actual and expected experience
Change in assumptions
Change in employer's proportion and differences
between the employer's contributions and the
employer's proportionate share of contributions
Net differences between employer's contributions and
proportionate share of contributions
Net differences between projected and actual
earnings on plan investments
Total
-Nfiscellaneous
D eferre d
Outflows
of Resources
4-333-352
468-802
1-549-063
D eferre d
Inflows
of Resources
S -
5_447-211
-
S 11.798.428 S
-
afet-�-
Deferred
Deferred
Outflows
Inflows
of Resources
of Resources
S 6-729-176 S
-
3,709,238
(317-550)
2-948-525
-
1-707-454 (425-059)
828-889 (1-831-190)
6-913-906 -
S 22-837-188 S (2-573-799)
76
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 10 - PENSION PLANS (CONTINUED)
d. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Deferred outflows of resources $5,430,658 and $6,989,388 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, 2025.
Other amounts reported as deferred outflows of resources and deferred inflows of resources related
to pensions will be recognized as pension expense as follows:
Fiscal Year
Ending
June 30,
Miscellaneous
Safety
2025
$ 2,765,614
$ 4,496,767
2026
740,502
3,165,613
2027
3,797,034
5,678,852
2028
161,926
192,981
2029
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 Ca1PERS
pension and enroll in a Ca1PERS 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 Ca1PERS
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.
77
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 11- POST -EMPLOYMENT HEALTH CARE BENEFITS (CONTINUED)
a. General Information about the OPEB Plan (Continued)
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.
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, 2023, valuation date, the benefit terms covered the following employees:
Inactive employees or beneficiaries currently receiving benefits 136
Active employees 314
Total 450
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.
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.
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 11 - POST -EMPLOYMENT HEALTH CARE BENEFITS (CONTINUED)
a. General Information about the OPEB Plan (Continued)
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, 2024, the City contributed $500,000 to the PARS OPEB
trust, made payments of $564,457 to insurance providers and retirees, and the estimated implied
subsidy was $326,538, resulting in total contributions of $1,390,995. The liability for governmental
activities is primarily liquidated from the General Fund and the liability for the business -type
activity is liquidated from the Water Enterprise Fund.
b. Net OPEB Liability
The City's net OPEB liability was measured as of June 30, 2024, and the total OPEB liability used
to calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2023,
rolled forward to June 30, 2024, using standard update procedures. A summary of the principal
assumptions and methods used to determine the total OPEB liability is shown on the next page.
Actuarial Assumptions
The net OPEB liability in the June 30, 2023, actuarial valuation was determined using the
following actuarial assumptions, applied to all periods included in the measurement, unless
otherwise specified:
79
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE H - POST -EMPLOYMENT HEALTH CARE BENEFITS (CONTINUED)
b. Net OPEB Liability (Continued)
Actuarial Assumptions (Continued)
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Expected long term investment rate of return
Inflation
Salary Increase
Healthcare Cost Trend Rates
Pre -Retirement Mortality:
Miscellaneous
Safety
Post -Retirement Mortality:
Miscellaneous
Safety
June 30, 2023
June 30, 2024
Entry -Age Normal Level Percentage of Salary
6.00%
6.00% net of OPEB plan investment expense
2.50%
2.75%.
5.50 percent for 2024, 5.25 percent for 2025-2029, 5.00
percent for 2030-2039, 4.75 percent for 2040-2049, 4.50
percent for 2050-2069, and 4.00 percent for 2070 and later
years; Medicare ages: 4.50 percent for 2024-2029 and 4.00
percent for 2030 and later years.
Preretirement Mortality Rates for Public Agency
Miscellaneous from Ca1PERS Experience Study (2000-2019)
Preretirement Mortality Rates for Public Agency Police and
Fire from Ca1PERS Experience Study (2000-2019)
Post -retirement Mortality Rates for Public Agency
Miscellaneous from Ca1PERS Experience Study (2000-2019)
Post -retirement Mortality Rates for Public Agency Police and
Fire from Ca1PERS Experience Study (2000-2019)
Actuarial assumptions used in the June 30, 2023, valuation were based on a review of plan
experience during the period June 30, 2021, to June 30, 2023.
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).
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE H - POST -EMPLOYMENT HEALTH CARE BENEFITS (CONTINUED)
b. Net OPEB Liability (Continued)
Actuarial Assumptions (Continued)
Assumed
Long -Term
Asset
Expected Real
Asset Class Aflocation
Rate of Return
PARS OPEB Trust
Broad U.S Equity
U.S Fixed
Total
Discount Rate
60.00% 4.40%
40.00% 1.80%
100.00%
GASB 75 requires a discount rate that reflects the following:
a. The long-term expected rate of return on OPEB plan investment — to the extent that the
OPEB plan's fiduciary net position (if any) is projected to be enough to make projected
benefit payments and assets are expected to be invested using a strategy to achieve that
return.
b. A yield or index rate for 20-year, tax-exempt general obligation municipal bonds with an
average rating of AA/Aa or higher — to the extent that the conditions in (a) are not met.
To determine a resulting single (blended) rate, the amount of the plan's projected fiduciary net
position (if any) and the amount of projected benefit payments is compared in each period of
projected benefit payments. The discount rate used to measure the City's Total OPEB liability is
based on these requirements and the following information:
To determine a resulting single (blended) rate, the amount of the plan's projected fiduciary net
position (if any) and the amount of projected benefit payments is compared in each period of
projected benefit payments. The discount rate used to measure the City's Total OPEB liability is
based on these requirements and the following information:
Reporting Date
Measurement Date
Long -Term
Expected Return of
Plan Investments
Fidelity GO AA
20 Years
Municipal Index
Discount Rate
June 30, 2023
June 30, 2023
6.25%
3.86%
6.25%
June 30, 2024
June 30, 2023
6.00%
3.86%
6.00%
June 30, 2024
June 30, 2024
6.00%
3.97%
6.00%
81
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
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:
Balance at June 30, 2023
(Measurement Date)
Changes in the Year:
Service cost
Interest on the total OPEB liability
Differences between actual and
expected experience
Changes in assumptions
Contribution - employer
Net investment income
Benefit payments
Administrative expenses
Net Changes
Balance at June 30, 2024
(Measurement Date)
Change of Assumptions
Increase (Decrease)
Total Plan Net
OPEB Fiduciary OPEB
Liability Net Position Liability
$ 16,780,571 $ 3,434,117 $ 13,346,454
639,177 - 639,177
1,051,197 - 1,051,197
(163,610)
-
(163,610)
702,814
-
702,814
-
1,390,995
(1,390,995)
-
352,275
(352,275)
(890,995)
(890,995)
-
-
(17,386)
17,386
1,338,583
834,889
503,694
$ 18,119,154 $ 4,269,006 $ 13,850,148
From measurement date June 30, 2023, to measurement date June 30, 2024, there were no changes
in assumptions.
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
(5.00%) (6.00%) (7.00%)
Net OPEB Liability $ 15,882,576 $ 13,850,148 $ 12,132,855
EM
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
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 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
Net OPEB Liability $ 12,193,633 $ 13,850,148 $ 15,989,934
d. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB
For the year ended June 30, 2024, the City recognized OPEB expense of $1,434,667. At June 30,
2024, the City reported deferred outflows of resources and deferred inflows of resources related to
OPEB from the following sources:
Differences between actual and expected experience
Change in assumptions
Differences between projected and actual earnings
on investments
Total
Deferred
Deferred
Outflows
Inflows
of Resources
of Resources
$ 368,661
$ (1,071,605)
1,094,167
(361,198)
35,746 -
$ 1,498,574 $ (1,432,803)
Amounts reported as deferred inflows of resources related to OPEB will be recognized as OPEB
expense as follows:
Fiscal Year
Ending
June 30,
2025
2026
2027
2028
2029
Thereafter
Amount
$ (61,988)
(5,353)
(112,520)
(87,049)
(38,928)
371,609
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
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 their salary to the deferred compensation plan every pay
period. The City contributes an additional 2% of salary, for a total contribution of 7.5%. The City
Council established the plan by resolution in fiscal year 2011-2012 and has the authority to amend
contribution requirements. Contributions to the participant's 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 2024 were $113,198.
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 $300,000 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.
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, 2024. At June 30, 2024, estimated claims payable of $10,995,980, which includes a provision for
incurred but not reported claims and loss adjustment expenses, are reported as a long-term liability.
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 13 - SELF-INSURANCE PROGRAMIRISK POOL (CONTINUED)
Changes in the balances of claims liabilities for the years ended June 30, 2024, and 2023, including a
provision for incurred but not reported claims and loss adjustment expenses, were as follows:
June 30,
2023
2024
Beginning Ending
Balance Additions Deletions Balance
$ 10,428,570 $ 744,173 $ (1,843,644) $ 9,329,099
9,329,099 2,935,084 (1,268,203) 10,995,980
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 the collection of principal and interest payments by the property owners and remittance of such
monies to bondholders.
Neither the faith and credit nor the general taxing power of the City have been pledged to the payment
of the bonds. Therefore, none of the following special assessment bonds have been included in the
accompanying financial statements.
Amount
Outstanding
District Bonds
of Issue
June 30, 2024
Comn unity
Facilities District 04-1, 2013
$ 9,350,000
$ 5,910,000
Community
Facilities District 06-1, 2015A
49,740,000
40,895,000
Community
Facilities District 06-1, 2015B
2,735,000
1,955,000
Community
Facilities District 07-1, 2015A
13,155,000
11,950,000
Community
Facilities District 2014-01, 2015A
27,665,000
25,870,000
$ 102,645,000
$ 86,580,000
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
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 14 - SPECIAL ASSESSMENT DISTRICTS' BONDS (CONTINUED)
30, 2024, the outstanding amount of the Special Tax Refunding Bonds, Series 2013 was $5,910,000.
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, 2024, the outstanding amount of the CFD 2014-01 2015A Special Tax
Bonds was $25,870,000.
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, 2024, the
outstanding amount of the CFD 07-1 2015A Refunding Bonds was $11,950,000.
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, 2024, the outstanding amount of the CFD 06-01 2015A Refunding Bonds was
$40,895,000.
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, 2024, the outstanding
amount of the CFD 06-1 Special Tax 2015B Bonds was $1,955,000.
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
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.
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. The 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.
EM
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 15 - GOVERNMENTAL FUND BALANCE CLASSIFICATIONS (CONTINUED)
Other
Total
General
Housing
Governmental
Governmental
Fund
Authority
Funds
Funds
Nonspendable:
Prepaid items
$ 1,175,237
$ -
$ 36,233
$ 1,211,470
Land held for resale
102,457,773
-
-
102,457,773
Loan receivable
60,120
-
-
60,120
Advances to other fiords
3,830,700
-
-
3,830,700
Restricted for:
Capital projects (1)
12,489,709
-
10,311,155
22,800,864
Public safety program
226,230
-
869,363
1,095,593
Community services
577,945
-
-
577,945
Housing projects
-
558,495
2,301,323
2,859,818
Solid waste program
-
-
2,050,442
2,050,442
Pension
14,024,098
-
-
14,024,098
Assigned to:
Capital projects (2)
-
-
16,155,894
16,155,894
Unassigned
98,515,807
-
(2,585)
98,513,222
Total fumd balances
$ 233,357,619
$ 558,495
$ 31,721,825
$ 265,637,939
(1) Restricted for capital projects:
• General Fund $11,428,934 - legally restricted for backbone infrastructure at the Tustin Legacy
development.
• General Fund $903,316 — legally restricted for cable Public Education and Access (PEG) support.
• General Fund $157,459 — retention withheld in restricted escrow account to be paid to contractors
once projects are completed.
• Other Governmental Funds:
o Gas Tax Special Revenue Fund $1,831,965 - comprised of state gas taxes restricted for
allowable street -related purposes.
o Air Quality Special Revenue Fund $121,896 - restricted for projects to reduce pollution.
o Road Maintenance and Rehabilitation Special Revenue Fund $5,120,034 - restricted for
maintenance and rehabilitation of streets.
o Measure M Special Revenue Fund $2,987,481 — allocations from Orange County voter -
approved transportation sales tax, restricted for allowable street -related purposes.
o Assessment District Construction 95-1 Capital Projects Fund $249,779 - restricted for uses
specified in the bond indenture.
(2) Assigned to capital projects:
• Other Capital Projects Fund $14,126,898— for specific projects indicated in the adopted budget.
• Park Acquisition and Development Special Revenue Fund $2,028,996 — comprised of park fees for
improvement of City parks.
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 16 - JOINT POWERS AUTHORITY
Orange County Fire Authority
In January 1995, the City of Tustin entered into a joint powers agreement with the Cities of Buena
Park, Cypress, Dana Point, Irvine, Laguna Hills, Laguna Niguel, Lake Forest, La Palma, Los Alamitos,
Mission Viejo, Placentia, San Clemente, San Juan Capistrano, Seal Beach, Stanton, Villa Park, and
Yorba Linda and the County of Orange (County) to create the Orange County Fire Authority (Fire
Authority). The purpose of the Fire 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,
the City of Placentia left the Fire Authority.
The effective date of formation was March 1, 1995. The Fire Authority's governing board consists of
one representative from each City and two from the County. The operations of the Fire 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, and Seal Beach. The County pays all structural fees it collects to the Fire
Authority. The cities of Stanton, Tustin, San Clemente, Buena Park, and Seal Beach are considered
"cash contract cities" and, accordingly, make cash contributions based on the Fire 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.
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 16 - JOINT POWERS A UTHORITY (CONTINUED)
The financial statements of the Orange County Housing Finance Trust are available at 333 W. Santa
Ana Blvd, Santa Ana, California.
NOTE 17 - SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY REDEVELOPMENT
AGENCYDISCLOSURES
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, 2024, is as follows:
Balance
Balance
Due Within
June 30, 2023 Additions
Deletions
June 30, 2024
One Year
Tax allocation bonds $44,045,000 $ -
$ (2,215,000)
$41,830,000
$2,305,000
Unamortized premium 4,764,649 -
(261,077)
4,503,572
261,077
Total long-termliabilities $48,809,649 $ -
$(2,476,077)
$46,333,572
$2,566,077
2016 Tax Allocation Refunding Bonds
onds
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, 2024, the amount of defeased 2010 Housing Bonds outstanding was
$5,101,118. The defeased MCAS 2010 Redevelopment Bonds were paid in full on September 1, 2018.
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
.e
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 17 - SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY REDEVELOPMENT
AGENCYDISCLOSURES (CONTINUED)
Lone -Term Liabilities (Continued)
2016 Tax Allocation Refunding Bonds (Continued)
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, 2024, is $5,101,118.
At June 30, 2024, the 2016 Tax Allocation Refunding Bonds outstanding balance was $41,830,000.
The annual debt service requirements to amortize the tax allocation bonds are as follows:
Year Ending
June 30,
2025
2026
2027
2028
2029
2030 - 2034
2035 - 2039
2040 - 2041
Principal
$ 2,305,000
2,395,000
2,515,000
2,640,000
2,360,000
11,070,000
13,350,000
5,195,000
Interest
$ 1,599,425
1,493,450
1,370,700
1,241,825
1,116,825
4,134,638
1,858,700
146,025
Total
$ 3,904,425
3,888,450
3,885,700
3,881,825
3,476,825
15,204,638
15,208,700
5,341,025
Totals $ 41,830,000 $ 12,961,588 $ 54,791,588
NOTE 18 - 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.
91
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 18 - SCHOOL FACILITIES IMPLEMENTATION COMMITMENT (CONTINUED)
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, 2024, the City's total contributions to TUSD under the I/M agreement was
$65,226,635. The balance remaining under the I/M Agreement is $19,773,365.
NOTE 19 - 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, 2024, with an estimated cost to complete of
approximately $56,166,815 across all fund types.
Families Forward Affordable Housing
In November 2023, the City entered into an Affordable Housing Grant Agreement with Families
Forward to construct six to eight affordable rental units using $2,000,000 from Voluntary Workforce
Housing Incentive Special Revenue Fund. This affordable housing project aims to provide housing for
extremely low to low income families with at least one minor child that are homeless or at risk of
homelessness.
Under the grant agreement, Families Forward is required to contribute $500,000 of its own funding
toward the project and secure a $2.5 million grant from CalOptima. The agreement also specifies that
the City will not disburse grant funding until the affordable housing project has been fully entitled and
all necessary building permits have been issued.
As of June 30, 2024, the City has appropriated $2,100,000 from the Voluntary Workforce Housing
Incentive Special Revenue Fund to cover the grant and associated administrative costs. Construction is
estimated to begin toward the end of fiscal year 2024-2025, with a projected completion date in fiscal
year 2025-2026.
92
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Basic Financial Statements
June 30, 2024
NOTE 20 — NA VY NOR TH HANGAR FIRE
On November 7, 2023, a fire erupted at the former Marine Corps Air Station Tustin North Hangar, a
17-story, 300,000-square-feet wooden structure designated as a historical landmark. The fire
eventually destroyed the North Hangar. The debris and other matters from the fire spread to the
surrounding communities. The U.S. Navy (Navy), who owns the North Hangar and the approximately
78 acres surrounding the North Hangar, entered into a Cooperative Agreement with the City that
allows the City to take all appropriate emergency measures necessary to address public health and
environmental concerns related to this fire incident. Since then, the Cooperative Agreement has been
amended several times to reflect the Navy's commitment to provide up to $103.3 million in funding
for the costs of the emergency response and subsequent clean-up work in the nearby communities. The
clean-up work is still on -going. For the year ended June 30, 2024, the City recognized $71,712,518 in
emergency and clean-up expenses related to the fire incident. The City also recognized $36,633,952 in
reimbursement revenue from the Navy with the remaining costs to be reimbursed in the coming year.
NOTE 21— PRIOR PERIOD ADJUSTMENT
During the year, the City determined that interest had not been accrued on certain loans due to the City
since the inception of the loans. The effect of recording the interest receivable as well as the associated
interest revenue from prior years is shown below.
Net position, beginning of year, as previously reported
Interest receivable
Net position, beginning of year, as restated
Governmental
Activities
$ 775,689,798
3,382,905
$ 779,072,703
93
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
7TIN
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
SAFETY PLAN
Fiscal year ended
Measurement period
Plan's proportion of the
net pension liability
Plan's proportionate share
of the net pension liability
Plan's covered payroll
Plan's proportionate share
of the net pension liability as a
percentage of covered payroll
Plan's proportionate share of the
fiduciary net position as a
percentage of the Plan's total
pension liability
Plan's proportionate share of
aggregate employer contributions
Notes to Schedule:
Last Ten Fiscal Years
June 30, 2024 June 30, 2023 June 30, 2022 June 30, 2021 June 30, 2020
June 30, 2023 June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019
0.67588% 0.68936% 0.66329% 0.64745% 0.61609%
$ 50,521,884 $ 47,370,171 $ 23,278,195 $ 40,839,584 $ 38,459,938
$ 13,375,405 $ 12,664,376 $ 11,498,163 $ 10,848,695 $ 9,896,349
377.72% 374.04% 202.45% 376.45% 388.63%
74.87% 75.53% 86.61% 73.12% 73.37%
$ 5,604,256 $ 8,968,451 $ 7,653,147 $ 6,191,362 $ 5,000,688
Benefit Changes:
There were no changes to benefit terms that applied to all members of the Public Agency Pool. However, individual employers in
the Plan may have provided a benefit improvement to their employees such as Golden Handshakes, service purchases, and other
prior service costs. Employers that have done so may need to report this information as a separate liability in their financial
statement as Ca1PERS considers such amount to be separately financed employer -specific liabilities. These employers should
consult with their auditors. Additionally, the figures above do not include any liability impact that occurred after the June 30, 2022
valuation date, unless the liability impact is deemed to be material to the Public Agency Pool.
In 2022, SB 1168 increased the standard retiree lump sum death benefit from $500 to $2,000 for any death occurring on or after
July 1, 2023. For pooled plans this is a Class 3 benefit and there is no normal cost surcharge. The impact on the unfunded liability is
included in the pool's differences between expected and actual experience.
Changes in Assumptions:
There were no assumption changes in 2023. Effective with the June 30, 2021 valuation date (June 30, 2022 measurement date), the
accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, Ca1PERS took
into account long -tern market return expectations as well as the expected pension fund cash flows. In addition, demographic
assumptions and the price inflation assumption were changed in accordance with the 2021 CalPERS Experience Study and Review
of Actuarial Assumptions. The accounting discount rate was 7.15% for measurement dates June 30, 2017 through June 30, 2021,
7.65% for measurement dates June 30, 2015 through June 30, 2016, and 7.50% for measurement date June 30, 2014.
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
SAFETY PLAN
Last Ten Fiscal Years
Fiscal year ended
June 30, 2019
June 30, 2018
June 30, 2017
June 30, 2016
June 30, 2015
Measurement period
June 30, 2018
June 30, 2017
June 30, 2016
June 30, 2015
June 30, 2014
Plan's proportion of the
net pension liability
0.62908%
0.60938%
0.60679%
0.58972%
0.68843%
Plan's proportionate share
of the net pension liability
$ 36,911,786
$ 36,411,988
$ 31,427,228
$ 24,298,906
$ 25,822,675
Plan's covered payroll
$ 9,967,145
$ 10,443,467
$ 10,013,168
$ 9,495,434
$ 9,640,345
Plan's proportionate share
of the net pension liability as a
percentage of covered payroll
370.33%
348.66%
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
75.26%
73.31%
74.06%
78.40%
79.82%
Plan's proportionate share of
aggregate employer contributions
$ 4,600,007
$ 3,520,089
$ 3,193,318
$ 3,182,851
$ 2,544,912
M
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
Fiscal year ended
Contractually required contribution
(actuarially determined)
Contributions in relation to
the actuarially determined
contributions
Contribution deficiency (excess)
Covered payroll
Contributions as a percentage
of covered payroll
CITY OF TUSTIN
SCHEDULE OF CONTRIBUTIONS
SAFETY PLAN
Last Ten Fiscal Years
June 30, 2024 June 30, 2023 June 30, 2022 June 30, 2021 June 30, 2020
$ 5,989,388 $ 5,729,176 $ 5,243,210 $ 4,592,442 $ 4,132,787
(6,989,388) (6,729,176) (6,243,210) (4,592,442) (5,782,787)
$ (1,000,000) $ (1,000,000) $ (1,000,000) $ - $ (1,650,000)
$ 14,000,339 $ 13,375,405 $ 12,664,376 $ 11,498,163 $ 10,848,695
49.92% 50.31% 49.30% 39.94% 53.30%
Notes to Schedule:
Valuation Date
6/30/2021
6/30/2020
6/30/2019
6/30/2018
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)
Asset valuation method
Market Value
Market Value
Market Value
Market Value
Market Value
Inflation
2.300%
2.300%
2.500%
2.500%
2.625%
Salary increases
(2)
(2)
(2)
(2)
(2)
Discount rate
6.80% (3)
7.00% (3)
7.00% (3)
7.00% (3)
7.25% (3)
Retirement age
(4)
(4)
(4)
(4)
(4)
Mortality
(5)
(5)
(5)
(5)
(5)
(1) Varies by date established and source. May be level dollar or level percent of pay and may include direct rate smoothing.
(2) Varies by category, entry age, and duration of service.
(3) Net of pension plan investment expense, including inflation
(4) The probabilities of retirement are based on the 2017 Ca1PERS Experience Study for the period from 1997 to 2015.
(5) The probabilities of mortality are based on the 2017 Ca1PERS Experience Study for the period from 1997 to 2015.
Mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the
Society of Actuaries.
97
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
SCHEDULE OF CONTRIBUTIONS
SAFETY PLAN
Last Ten Fiscal Years
Fiscal year ended
June 30, 2019
June 30, 2018
June 30, 2017
June 30, 2016
June 30, 2015
Contractually required contribution
(actuarially determined)
$ 3,641,308
$ 3,204,833
$ 3,002,977
$ 2,708,192
$ 3,045,919
Contributions in relation to
the actuarially determined
contributions
(5,291,308)
(3,204,833)
(3,002,977)
(2,708,192)
(7,049,591)
Contribution deficiency (excess)
$ (1,650,000)
$ -
$ -
$ -
$ (4,003,672)
Covered payroll
$ 9,896,349
$ 9,967,145
$ 10,443,467
$ 10,013,668
$ 9,495,434
Contributions as a percentage
of covered payroll
53.47%
32.15%
28.75%
27.04%
74.24%
Notes to Schedule:
Valuation Date
6/30/2016
6/30/2015
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
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
2.75%
2.75%
2.75%
2.75%
2.75%
Salary increases
(2)
(2)
(2)
(2)
(2)
Investment rate of return
7.375% (3)
7.50% (3)
7.50% (3)
7.50% (3)
7.50% (3)
Retirement age
(4)
(4)
(4)
(4)
(4)
Mortality
(5)
(5)
(5)
(5)
(5)
M
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS
MISCELLANEOUS PLAN
Last Ten Fiscal Years
Fiscal year ended
June 30, 2024
June 30, 2023
June 30, 2022
June 30, 2021
June 30, 2020
Measurement period
June 30, 2023
June 30, 2022
June 30, 2021
June 30, 2020
June 30, 2019
Total Pension Liability:
Service cost
$ 3,103,217
$ 3,049,919
$ 2,693,820
$ 2,581,396
$ 2,456,587
Interest on total pension liability
10,246,763
9,777,454
9,379,056
8,860,960
8,458,273
Differences between expected and
actual experience
647,330
134,069
1,568,479
(417,769)
(222,610)
Changes in assumptions
-
4,647,187
-
Changes in benefit terms
199,701
-
Benefit payments, including refunds of
employee contributions
(7,222,606)
(6,576,321)
(6,434,816)
(5,207,052)
(4,648,016)
Net Change in Total Pension Liability
6,974,405
11,032,308
7,206,539
5,817,535
6,044,234
Total Pension Liability - Beginning of Year
149,716,480
138,684,172
131,477,633
125,660,098
119,615,864
Total Pension Liability - End of Year (a)
$ 156,690,885
$ 149,716,480
$ 138,684,172
$ 131,477,633
$ 125,660,098
Plan Fiduciary Net Position:
Contributions - employer
$ 5,229,452
$ 4,877,030
$ 3,581,172
$ 4,837,028
$ 4,373,702
Contributions - employee
1,267,450
1,239,440
1,196,644
1,190,426
1,097,180
Net investment income
7,165,286
(9,500,196)
23,665,065
5,011,357
6,030,153
Benefit payments
(7,222,606)
(6,576,321)
(6,434,816)
(5,207,052)
(4,648,016)
Net plan to plan resource movement
-
Other miscellaneous expense
213
Administrative expense
(85,372)
(78,575)
(104,120)
(138,915)
(65,475)
Net Change in Plan Fiduciary Net Position
6,354,210
(10,038,622)
21,903,945
5,692,844
6,787,757
Plan Fiduciary Net Position - Beginning of Year
116,096,362
126,134,984
104,231,039
98,538,195
91,750,438
Plan Fiduciary Net Position - End of Year (b)
$ 122,450,572
$ 116,096,362
$ 126,134,984
$ 104,231,039
$ 98,538,195
Net Pension Liability - Ending (a)-(b)
$ 34,240,313
$ 33,620,118
$ 12,549,188
$ 27,246,594
$ 27,121,903
Plan fiduciary net position as a percentage of the
total pension liability 78.15% 77.54% 90.95% 79.28% 78.42%
Covered payroll $ 18,865,908 $ 18,260,967 $ 17,513,680 $ 16,946,205 $ 16,542,504
Net pension liability as percentage of
covered payroll 181.49% 184.11% 71.65% 160.78% 163.95%
Benefit Changes:
The figures above generally include any liability impact that may have resulted from voluntary benefit changes that occurred on or before the
Measurement Date. However, offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes) that occurred after the Valuation Date are not
included in the figures above, unless the liability impact is deemed to be material by the plan actuary.
In 2022, SB 1168 increased the standard retiree lump sum death benefit from $500 to $2,000 for any death occurring on or after July 1, 2023. The
impact, if any, is included in the changes of benefit terms.
Changes in Assumptions:
There were no assumption changes in 2023. Effective with the June 30, 2021 valuation date (June 30, 2022 measurement date), the accounting discount
rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of retum, CalPERS took into account long-term market return
expectations as well as the expected pension fund cash flows. In addition, demographic assumptions and the price inflation assumption were changed in
accordance with the 2021 Ca1PERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was 7.15% for measurement
dates June 30, 2017 through June 30, 2021, 7.65% for measurement dates June 30, 2015 through June 30, 2016, and 7.50% for measurement date June
30, 2014.
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS
MISCELLANEOUS PLAN
Last Ten Fiscal Years
Fiscal year ended
June 30, 2019
June 30, 2018
June 30, 2017
June 30, 2016
June 30, 2015
Measurement period
June 30, 2018
June 30, 2017
June 30, 2016
June 30, 2015
June 30, 2014
Total Pension Liability:
Service cost
$ 2,402,594
$ 2,211,312
$ 1,840,275
$ 1,779,008
$ 1,747,494
Interest on total pension liability
8,052,611
7,614,130
7,306,376
6,982,672
6,613,765
Differences between expected and
actual experience
(426,547)
(737,480)
(531,595)
452,122
-
Changes inassumptions
1,050,413
6,589,964
(1,770,351)
Changes in benefit terms
-
-
Benefit payments, including refunds of
employee contributions
(4,523,921)
(4,300,829)
(4,102,189)
(3,956,389)
(3,974,724)
Net Change in Total Pension Liability
6,555,150
11,377,097
4,512,867
3,487,062
4,386,535
Total Pension Liability - Beginning of Year
113,060,714
101,683,617
97,170,750
93,683,688
89,297,153
Total Pension Liability - End of Year (a)
$ 119,615,864
$ 113,060,714
$ 101,683,617
$ 97,170,750
$ 93,683,688
Plan Fiduciary Net Position:
Contributions - employer
$ 2,249,216
$ 1,881,701
$ 1,850,072
$ 1,503,081
$ 1,379,562
Contributions - employee
1,043,932
1,037,304
998,937
905,331
962,617
Net investment income
7,268,642
8,829,526
372,172
1,753,374
11,900,167
Benefit payments
(4,523,921)
(4,300,829)
(4,102,189)
(3,956,389)
(3,974,724)
Net plan to plan resource movement
(213)
(114)
Other miscellaneous expense
(254,792)
-
Administrative expense
(134,170)
(116,299)
(48,573)
(89,714)
-
Net Change in Plan Fiduciary Net Position
5,648,694
7,331,403
(929,581)
115,569
10,267,622
Plan Fiduciary Net Position - Beginning of Year
86,101,744
78,770,341
79,699,922
79,584,353
69,316,731
Plan Fiduciary Net Position - End of Year (b)
$ 91,750,438
$ 86,101,744
$ 78,770,341
$ 79,699,922
$ 79,584,353
Net Pension Liability - Ending (a)-(b)
$ 27,865,426
$ 26,958,970
$ 22,913,276
$ 17,470,828
$ 14,099,335
Plan fiduciary net position as a percentage of the
total pension liability
Covered payroll
Net pension liability as percentage of
covered payroll
76.70% 76.16% 77.47% 82.02% 84.95%
$ 15,403,283 $ 14,684,868 $ 13,828,003 $ 12,847,036 $ 12,270,014
180.91% 183.58%
165.70% 135.99% 114.91%
100
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
Fiscal year ended
Contractually required contribution
(actuarially determined)
Contributions in relation to
the actuarially determined
contributions
Contribution deficiency (excess)
Covered payroll
Contributions as a percentage
of covered payroll
CITY OF TUSTIN
SCHEDULE OF CONTRIBUTIONS
MISCELLANEOUS PLAN
Last Ten Fiscal Years
June 30, 2024 June 30, 2023 June 30, 2022 June 30, 2021 June 30, 2020
$ 5,430,658 $ 4,333,352 $ 3,877,030 $ 3,581,172 $ 3,187,028
(6,375,658) (5,278,352) (4,877,030) (3,581,172) (4,837,028)
$ (945,000) $ (945,000) $ (1,000,000) $ - $ (1,650,000)
$ 19,265,627 $ 18,865,908 $ 18,260,967 $ 17,513,680 $ 16,946,205
33.09% 27.98% 21.22% 20.45% 28.54%
Notes to Schedule:
Valuation Date 6/30/2021 6/30/2020
6/30/2019
6/30/2018
Methods and Assumptions Used to Determine Contribution Rates:
Actuarial cost method Entry age Entry age
Entry age
Entry age
Amortization method (1) (1)
(1)
(1)
Asset valuation method Fair Value Fair Value
Fair Value
Fair Value
Inflation 2.300% 2.300%
2.500%
2.500%
Salary increases (2) (2)
(2)
(2)
Investment rate of return 6.80% (3) 7.00% (3)
7.00% (3)
7.00% (3)
Retirement age (4) (4)
(4)
(4)
Mortality (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) The probabilities of retirement are based on the 2017 Ca1PERS Experience
Study for the period from 1997 to 2015.
(5) The probabilities of mortality are based on the 2017 Ca1PERS Experience
Study for the period from
1997 to 2015.
Mortality rates include 15 years of projected mortality improvement using
90% of Scale MP-2016
published by the
Society of Actuaries.
6/30/2017
Entry age
(1)
Fair Value
2.625%
(2)
7.25% (3)
(4)
(5)
101
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
Fiscal year ended
Contractually required contribution
(actuarially determined)
Contributions in relation to
the actuarially determined
contributions
Contribution deficiency (excess)
Covered payroll
Contributions as a percentage
of covered payroll
CITY OF TUSTIN
SCHEDULE OF CONTRIBUTIONS
MISCELLANEOUS PLAN
Last Ten Fiscal Years
June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015
$ 2,723,702 $ 2,249,217 $ 1,881,701 $ 1,850,100 $ 1,503,081
(4,373,702) (2,249,217) (1,881,701) (1,850,100) (1,503,081)
$ (1,650,000) $ - $ - $ - $ -
$ 16,542,504 $ 15,403,283 $ 14,684,868 $ 13,828,003 $ 12,847,036
26.44% 14.60% 12.81% 13.38% 11.70%
Notes to Schedule:
Valuation Date
6/30/2016
6/30/2015
6/30/2014
6/30/2013
Methods and Assumptions Used
to Determine Contribution Rates:
Actuarial cost method
Entry age
Entry age
Entry age
Entry age
Amortization method
(1)
(1)
(1)
(1)
Asset valuation method
Fair Value
Fair Value
Fair Value
Fair Value
Inflation
2.75%
2.75%
2.75%
2.75%
Salary increases
(2)
(2)
(2)
(2)
Investment rate of return
7.375% (3)
7.50% (3)
7.50% (3)
7.50% (3)
Retirement age
(4)
(4)
(4)
(4)
Mortality
(5)
(5)
(5)
(5)
6/30/2012
Entry age
(1)
15 Year
Smoothed
Fair Value
2.75%
(2)
7.50% (3)
(4)
(5)
102
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS
Last Ten Fiscal Years*
Fiscal year ended
June 30,2024
June 30,2023
June 30,2022
June 30,2021
June 30,2020
June 30,2019
June 30,2018
Measurement date
June 30,2024
June 30,2023
June 30,2022
June 30,2021
June 30,2020
June 30,2019
June 30,2018
Total OPEB Liability
Service cost
$ 639,177
$ 546,336
$ 531,714
$ 482,722
$ 437,360
$ 735,504
$ 714,949
Interest on total OPEB liability
1,051,197
1,012,346
970,235
894,576
824,887
890,622
862,866
Differences between expected and actual experience
(163,610)
-
(10,715)
627,373
(1,778,679)
-
-
Changes of assumptions
702,814
639,802
-
(416,384)
(398,848)
Benefit payments
(890,995)
(845,810)
(839,870)
(849,652)
(791,153)
(777,685)
(686,172)
Net Change in Total OPEB Liability
1,338,583
712,872
1,291,166
1,155,019
(1,723,969)
449,593
891,643
Total OPEB Liability- Beginning of Year
16,780,571
16,067,699
14,776,533
13,621,514
15,345,483
14,895,890
14,004,247
Total OPEB Liability- End of Year (a)
18,119,154
16,780,571
16,067,699
14,776,533
13,621,514
15,345,483
14,895,890
Plan Fiduciary Net Position:
Contributions -employer
Net investment income
Benefit payments
Administrative expense
Net Change in Plan Fiduciary Net Position
Plan Fiduciary Net Position - Beginning of Year
Plan Fiduciary Net Position - End of Year (b)
Net OPEB Liability - Ending (a)-(b)
Plan fiduciary net position as a percentage of the
total OPEB liability
Covered - employee payroll
Net OPEB liability as percentage of
covered - employee payroll
Notes to Schedule:
Benefit Changes:
There were no changes in benefits.
Changes in Assumptions:
From fiscal year June 30, 2018 to June 30, 2019:
1,390,995
1,345,810
1,339,870
849,652
1,291,153
1,277,685
1,686,172
352,275
212,945
(335,000)
431,637
97,677
77,171
3,283
(890,995)
(845,810)
(839,870)
(849,652)
(791,153)
(777,685)
(686,172)
(17,386)
(14,960)
(14,404)
(13,016)
(11,216)
834,889
697,985
150,596
418,621
586,461
577,171
1,003,283
3,434,117
2,736,132
2,585,536
2,166,915
1,580,454
1,003,283
4,269,006
3,434,117
2,736,132
2,585,536
2,166,915
1,580,454
1,003,283
$ 13,850,148
$ 13,346,454
$ 13,331,567
$ 12,190,997
$ 11,454,599
$ 13,765,029
$ 13,892,607
23.56%
20.46%
17.03%
17.50%
15.91%
10.30%
6.74%
$ 45,427,638
$ 44,626,782
$ 39,276,574
$ 31,930,486
$ 34,926,881
$ 23,559,635
$ 24,156,049
30.49%
29.91%
33.94%
38.18%
32.80%
58.43%
57.51%
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.
From fiscal year June 30, 2019 to June 30, 2020:
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.
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.
From fiscal year June 30, 2023 to June 30, 2024:
Healthcare cost trend rates changed to 5.50% for 2024, 5.25% for 2025 to 2029, 5.00% for 2030 to 2039, 4.75% for 2040 to 2049, 4.50% for 2050 to 2069, and 4.00% for 2070 and later years.
* Fiscal year 2018 was the first year of implementation; therefore, only seven years are shown.
103
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
Fiscal year ended
Actuarially determined contribution
Contributions in relation to the
actuarially determined contributions
Contribution deficiency (excess)
Covered - employee payroll
Contributions as a percentage of
covered -employee payroll
Notes to Schedule
CITY OF TUSTIN
SCHEDULE OF CONTRIBUTIONS - OPEB
Last Ten Fiscal Years*
June 30, 2024 June 30, 2023 June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018
$ 1,898,528 $ 1,641,241 $ 1,597,315 $ 1,354,712 $ 1,318,454 $ 1,780,746 $ 1,729,589
(1,390,995) (1,345,810) (1,339,870) (849,652) (1,291,153) (1,277,685) (1,686,172)
$ 507,533 $ 295,431 $ 257,445 $ 505,060 $ 27,301 $ 503,061 $ 43,417
$ 45,427,638 $ 44,626,782 $ 39,276,574 $ 31,930,486 $ 34,926,881 $ 23,559,635 $ 24,156,049
3.06% 3.02% 3.41% 2.16% 4.04% 5.42% 6.98%
Valuation Date 6/30/2023 6/30/2021 6/30/2021 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
Entry age
Entry age
Amortization method
(1)
(1)
(1)
(1)
(1)
(1)
(1)
Inflation
2.50%
2.75%
2.75%
2.75%
2.50%
2.50%
2.50%
Salary increases
2.75%
2.75%
2.75%
2.75%
2.75%
2.75%
2.75%
Healthcare trend rates
(5)
(4)
(3)
(3)
(2)
(2)
(2)
Rate of return on assets
6.00%
6.25%
6.25%
6.25%
6.25%
6.25%
6.25%
Mortality rate
CalPERS Rates
CalPERS Rates
CalPERS Rates
CaIPERS Rates
CalPERS Rates
CalPERS Rates
CalPERS Rates
Retirement rates
CalPERS Rates
CalPERS Rates
CalPERS Rates
CaIPERS Rates
CaIPERS 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
(5) 5.50% until 2024, 5.25% for 2025 to 2029, 5.00% for 2030 to 2039, 4.75% for 2040
to 2049, 4.50% for 2050 to 2069, and
4.00% for 2070 and
later years
* Fiscal year 2018 was the first year of implementation; therefore, only seven years are shown
104
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Retiree Health Plan
Fiscal Year Ended
6/30/2018
6/30/2019
6/30/2020
6/30/2021
6/30/2022
6/30/2023
6/30/2024
OTHER POST -EMPLOYMENT BENEFIT PLAN
ANNUAL MONEY -WEIGHTED RATE OF RETURN ON INVESTMENTS
Last Ten Fiscal Years*
Annual Money -Weighted Rate of Return, Net of Investment Expense (1)
N/A*
6.16%
5.35%
19.62%
-11.23%
6.99%
9.92%
(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 seven years are presented.
Initial deposit to the OPEB trust was made on June 26, 2018.
105
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
BUDGETARY COMPARISON SCHEDULE
GENERALFUND
REVENUES:
Taxes
Licenses and permits
Fines and forfeitures
Investment income
Intergovernmental revenue
Intergovernmental revenue - Hanger fire
Charges for services
Rental income
Other revenue
TOTAL REVENUES
EXPENDITURES:
Current:
General government
General government - Hanger Fire
Public safety
Public works
Community services
Capital outlay
Debt service:
Principal retirement
Interest expense
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES):
Transfer in
Transfer out
Lease acquisition
TOTAL OTHER
FINANCING SOURCES (USES)
NET CHANGE IN FUND BALANCE
For the year ended June 30, 2024
Budgeted Amounts
Original Final
Actual
Variance with
Final Budget
Positive
(Negative)
$ 67,573,700
$ 68,233,498
$ 69,493,486
$ 1,259,988
1,260,535
1,849,749
2,246,204
396,455
1,016,000
966,578
928,628
(37,950)
1,508,247
2,300,000
9,650,880
7,350,880
300,300
613,703
1,305,651
691,948
-
88,000,000
36,676,181
(51,323,819)
4,184,172
4,389,625
5,110,902
721,277
1,931,497
3,045,465
3,263,520
218,055
388,600
548,600
1,098,165
549,565
78,163,051
169,947,218
129,773,617
(40,173,601)
27,698,501
30,038,278
22,674,909
7,363,369
-
88,000,000
71,712,518
16,287,482
45,983,303
47,695,188
46,860,655
834,533
17,245,613
18,019,107
18,445,346
(426,239)
5,227,039
5,365,958
5,611,123
(245,165)
36,379,564
48,469,364
10,255,517
38,213,847
81,200
81,200
786,049
(704,849)
3,500
7,000
75,241
(68,241)
132,618,720
237,676,095
176,421,358
61,254,737
(54,455,669)
(67,728,877)
(46,647,741)
21,081,136
9,000,233
(349,359)
9,906,596 10,262,550 355,954
(5,437,181) (5,080,816) 356,365
- 75,055 75,055
8,650,874 4,469,416 5,256,789 787,373
(45,804,795) (63,259,461) (41,390,952) 21,868,509
FUND BALANCE - BEGINNING OF YEAR 274,748,571 274,748,571 274,748,571 -
FUND BALANCE - END OF YEAR $ 228,943,776 $ 211,489,110 $ 233,357,619 $ 21,868,509
See accompanying notes to the required supplementary information
106
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
BUDGETARY COMPARISON SCHEDULE
HOUSING AUTHORITY SPECIAL REVENUE FUND
REVENUES:
Investment income
Intergovernmental revenue
Charges for services
TOTAL REVENUES
EXPENDITURES:
Current:
Community services
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
For the year ended June 30, 2024
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ - $ - $ 11,340 $ 11,340
659,464 659,464 659,464 -
1,120 1,120 2,245 1,125
660,584 660,584 673,049 12,465
1,592,318 1,592,316 1,348,502 243,814
1,592,318 1,592,316 1,348,502 243,814
(931,734) (931,732) (675,453) 256,279
OTHER FINANCING SOURCES (USES):
Transfer in
753,343
1,219,994
880,616 339,378
NET CHANGE IN FUND BALANCE
(178,391)
288,262
205,163 595,657
FUND BALANCE - BEGINNING OF YEAR
353,332
353,332
353,332 -
FUND BALANCE - END OF YEAR $
174,941 $
641,594 $
558,495 $ 595,657
See accompanying notes to the required supplementary information
107
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Notes to Required Supplementary Information
June 30, 2024
NOTE 1 - BUDGETS AND B UD GE TA R YA CCO UNTING
The City follows these procedures in establishing the budgets.
(1) The annual budget is adopted by the City Council after the holding of a public 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. The adopted budget and subsequent amendments cover
City expenditures in all governmental funds.
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 and amended for the General and Special Revenue Funds, on a
basis substantially consistent with accounting principles generally accepted in the United States
of America. Accordingly, actual revenues and expenditures can be compared with related
budgeted amounts without any significant reconciling items. No budgetary comparisons are
presented for the City's 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.
M
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
u
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Other Governmental Funds
June 30, 2024
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.
Community Development Block Grant — This fund is used to account for funds received from U.S.
Department of Housing and Urban Development to meet low-income housing and community
development needs.
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.
American Rescue Plan Act (ARPA) Fund — This fund is used to account for monies received from the
U.S. Treasury for COVID-19 related expenses.
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 service 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 road 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.
Park Acquisition and Development — This fund is used to account for fees received from developers
and park activities to develop the City's park system.
Measure M — This fund is used to account for monies received from the County of Orange for street
and maintenance projects.
110
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Other Governmental Funds
June 30, 2024
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 Assessment District 95-
1 Area.
Other Capital Projects — This fund is used to account for capital projects which are not funded by a
specific source.
CFD Construction — This fund is used to account for construction and improvements to the Tustin
Legacy area.
111
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
COMBINING BALANCE SHEET
OTHER GOVERNMENTAL FUNDS
June 30, 2024
Special Revenue Funds
Supplemental
American
Asset
Air
Law
Rescue Plan Act
Special
Gas Tax
CDBG Forfeiture
Quality
Enforcement
(ARPA) Fund
Tax B
ASSETS
Cash and investments
$3,539,139
$ - $ 303,651
$ 244,753
$ 534,214
$ 3,767,841
$ 1,750
Restricted cash and investments
-
- -
-
-
-
-
Receivables:
Accounts
190,537
135,184 -
26,766
93
-
35,489
Interest
9,870
- 837
668
1,472
50,603
-
Leases
-
- -
-
-
-
Prepaid items
1,805
- 34,428
-
-
-
-
TOTAL ASSETS
$3,741,351
$ 135,184 $ 338,916
$ 272,187
$ 535,779
$ 3,818,444
$ 37,239
LIABILITIES, DEFERRED
INFLOWS OF RESOURCES
AND FUND BALANCES
LIABILITIES:
Accounts payable and
accrued liabilities $1,907,581 $ 61,219 $ $ 123,525 $ 6,393 $ $ 1,750
Due to other funds 76,550 - - -
Unearned revenue - - - 3,818,444 -
TOTAL LIABILITIES 1,907,581 137,769 123,525 6,393 3,818,444 1,750
DEFERRED INFLOWS
OF RESOURCES:
Unavailable revenue
- 26,766
Lease related
- -
TOTAL DEFERRED INFLOW
OF RESOURCES:
- 26,766
FUND BALANCES:
Nonspendable
1,805 - 34,428 - -
Restricted
1,831,965 - 304,488 121,896 529,386
Assigned
- - - - -
Unassigned
- (2,585) - - -
TOTAL FUND BALANCES
1,833,770 (2,585) 338,916 121,896 529,386
TOTAL LIABILITIES, DEFERRED
INFLOWS OF RESOURCES
35,489
35,489
AND FUND BALANCES $3,741,351 $ 135,184 $ 338,916 $ 272,187 $ 535,779 $ 3,818,444 $ 37,239
112
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
Special Revenue Funds (Continued)
Capital Projects Funds
Road
Voluntary
Park
Total
Maintenance
Workforce
Acquisition
Other
Other
and
Housing
Solid
and
Construction Capital CFD
Governmental
Rehabilitation
Incentive
Waste
Development
Measure M
95-1 Projects Construction
Funds
$ 5,530,180
$2,294,984
$2,307,305
$ 1,699,961
$2,699,017
$ 249,779 $14,137,755 $ -
$ 37,310,329
-
-
-
-
- 58,669
58,669
361,589
-
23,803
24,353
362,313
- -
1,160,127
15,308
6,339
5,486
12,735
7,491
37,934
148,743
-
-
-
4,660,317
-
-
4,660,317
-
-
-
- -
36,233
$ 5,907,077
$2,301,323
$2,336,594
$ 6,397,366
$3,068,821
$ 249,779 $14,175,689 $ 58,669
$ 43,374,418
$ 787,043 $ $ 52,630 $ 67,099 $ 81,340 $ $ 48,791 $ 3,350 $ 3,140,721
- - - - - 55,319 131,869
233,522 4,051,966
787,043 286,152 67,099 81,340 48,791 58,669 7,324,556
- - 24,298 - - - 51,064
- 4,276,973 4,276,973
- 4,301,271 4,328,037
- - - - - 36,233
5,120,034 2,301,323 2,050,442 - 2,987,481 249,779 - 15,532,283
- - - 2,028,996 - - 14,126,898 16,155,894
- - - - - - - (2,585)
5,120,034 2,301,323 2,050,442 2,028,996 2,987,481 249,779 14,126,898 31,721,825
$ 5,907,077 $2,301,323 $2,336,594 $ 6,397,366 $3,068,821 $ 249,779 $14,175,689 $ 58,669 $ 43,374,418
113
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - OTHER GOVERNMENTAL FUNDS
For the year ended June 30, 2024
Special Revenue Funds
Supplemental
American
Asset
Air
Law
Rescue Plan Act
Special
Gas Tax
CDBG
Forfeiture
Quality
Enforcement
(ARPA) Fund
Tax B
REVENUES:
Fines and forfeitures
$ -
$
$ -
$
$ -
$ -
$
Investment income
222,109
16,342
11,816
28,026
247,634
Intergovernmental revenue
2,202,251
407,632
86,490
80,249
230,027
4,049,366
5,712,453
Charges for services
-
-
-
-
-
-
-
Rental income
Other revenue
-
-
-
-
-
-
TOTAL REVENUES
2,424,360
407,632
102,832
92,065
258,053
4,297,000
5,712,453
EXPENDITURES:
Current:
General government
-
-
-
-
-
-
7,000
Public safety
-
169,057
-
Public works
1,613,411
-
-
Community services
-
312,755
-
-
Capital outlay
4,015,922
-
175,153
223,582
-
-
TOTAL EXPENDITURES
5,629,333
312,755
175,153
223,582
169,057
-
7,000
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
(3,204,973)
94,877
(72,321)
(131,517)
88,996
4,297,000
5,705,453
OTHER FINANCING SOURCES (USES):
Transfers in
-
-
-
-
Transfers out
(4,297,000)
(5,733,521)
TOTAL OTHER
FINANCING (USES)
-
-
(4,297,000)
(5,733,521)
NET CHANGE IN
FUND BALANCES
(3,204,973)
94,877
(72,321)
(131,517)
88,996
(28,068)
FUND BALANCES - BEGINNING
OF YEAR
5,038,743
(97,462)
411,237
253,413
440,390
63,557
FUND BALANCES - END OF YEAR
$ 1,833,770
$ 2 5851
338,916
$ 121,896
$ 529,386
$
$ 35,489
114
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
Special Revenue Funds (Continued)
Capital Projects Funds
Road
Voluntary
Park
Total
Maintenance
Workforce
Acquisition
Other
Other
and
Housing
Solid
and
Construction Capital CFD
Governmental
Rehabilitation
Incentive
Waste
Development
Measure M
95-1 Projects Construction
Funds
$ -
$ -
$ 2,150
$ -
$ -
$ $ - $ -
$ 2,150
308,740
115,864
96,104
184,754
141,786
591,128 3,024
1,967,327
2,074,781
-
49,112
-
2,274,054
- -
17,166,415
-
101,346
255,692
18,865
-
375,903
-
-
-
397,953
397,953
98,100
-
314,400
-
-
- -
412,500
2,481,621
217,210
717,458
601,572
2,415,840
591,128 3,024
20,322,248
7,000
- - 169,057
25,636 - 380,455 - 2,019,502
- 5,471 - 57,167 - - - 375,393
3,166,358 - - 313,602 2,430,383 1,159,855 69,446 11,554,301
3,191,994 5,471 380,455 370,769 2,430,383 1,159,855 69,446 14,125,253
(710,373) 211,739 337,003 230,803 (14,543) (568,727) (66,422) 6,196,995
- - - 4,200,200 4,200,200
(149,199) (82,830) - (10,262,550)
(149,199) (82,830) 4,200,200 (6,062,350)
(710,373) 211,739 337,003 230,803 (163,742) (82,830) 3,631,473 (66,422) 134,645
5,830,407 2,089,584 1,713,439 1,798,193 3,151,223 332,609 10,495,425 66,422 31,587,180
$ 5,120034 $ 2,301,323 $ 2,050442 $ 2,028,996 $ 2,987,481 $ 249,779 $ 14,126,898 $ - $ 31,721,825
115
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
GAS TAX SPECIAL REVENUE FUND
For the year ended June 30, 2024
REVENUES:
Investment income
Intergovernmental revenue
TOTAL REVENUES
EXPENDITURES:
Current:
Public works
Capital outlay
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER (UNDER)
EXPENDITURES
NET CHANGE IN FUND BALANCE
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ - $ - $ 222,109 $ 222,109
2,180,879 2,180,879 2,202,251 21,372
2,180,879 2,180,879 2,424,360 243,481
1,904,249
1,904,249
1,613,411
290,838
2,625,000
5,425,000
4,015,922
1,409,078
4,529,249
7,329,249
5,629,333
1,699,916
(2,348,370)
(5,148,370)
(3,204,973)
1,943,397
(2,348,370)
(5,148,370)
(3,204,973)
1,943,397
5,038,743
5,038,743
5,038,743
-
$ 2,690,373 $
(109,627) $
1,833,770 $
1,943,397
116
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUND
For the year ended June 30, 2024
REVENUES:
Intergovernmental revenue
TOTAL REVENUES
EXPENDITURES:
Current:
Community services
Capital outlay
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER (UNDER)
EXPENDITURES
NET CHANGE IN FUND BALANCE
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ 749,455 $ 749,455 $ 407,632 $ (341,823)
749,455 749,455 407,632 (341,823)
360,308
360,308
312,755
47,553
389,147
389,147
-
389,147
749,455
749,455
312,755
436,700
-
-
94,877
94,877
-
-
94,877
94,877
(97,462)
(97,462)
(97,462)
-
$ (97,462) $
(97,462) $
(2,585) $
94,877
117
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
ASSET FORFEITURE SPECIAL REVENUE FUND
For the year ended June 30, 2024
Budgeted Amounts
Original
REVENUES:
Investment income
Intergovernmental revenue
TOTAL REVENUES
Final
Variance with
Final Budget
Positive
_
Actual
(Negative)
- $ 16,342
$ 16,342
- 86,490
86,490
- 102,832
102,832
EXPENDITURES:
Current:
Capital outlay 210,000 210,000 175,153 34,847
TOTAL EXPENDITURES 210,000 210,000 175,153 34,847
EXCESS OF REVENUES OVER
EXPENDITURES
(210,000)
(210,000)
(72,321) 137,679
NET CHANGE IN FUND BALANCE
(210,000)
(210,000)
(72,321) 137,679
FUND BALANCE - BEGINNING OF YEAR
411,237
411,237
411,237 -
FUND BALANCE - END OF YEAR $
201,237 $
201,237
$ 338,916 $ 137,679
118
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
AIR QUALITY SPECIAL REVENUE FUND
REVENUES:
Investment income
Intergovernmental revenue
TOTAL REVENUES
EXPENDITURES:
Capital outlay
TOTAL EXPENDITURES
NET CHANGE IN FUND BALANCE
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
For the year ended June 30, 2024
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ 500 $ 500 $ 11,816 $ 11,316
103,000 103,000 80,249 (22,751)
103,500 103,500 92,065 (11,435)
- 247,082 223,582 23,500
- 247,082 223,582 23,500
103,500 (143,582) (131,517) 12,065
253,413 253,413 253,413 -
$ 356,913 $ 109,831 $ 121,896 $ 12,065
119
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
SUPPLEMENTAL LAW ENFORCEMENT SPECIAL REVENUE FUND
For the year ended June 30, 2024
Variance with
Final Budget
Budgeted Amounts
Positive
Original Final
Actual
(Negative)
REVENUES:
Investment income
$ - $ -
$ 28,026
$ 28,026
Intergovernmental revenue
190,000 190,000
230,027
40,027
TOTAL REVENUES
190,000 190,000
258,053
68,053
EXPENDITURES:
Current:
Public safety 183,059 183,059 169,057 14,002
TOTAL EXPENDITURES 183,059 183,059 169,057 14,002
EXCESS OF REVENUES OVER
EXPENDITURES 6,941 6,941 88,996 82,055
NET CHANGE IN FUND BALANCE
6,941
6,941
88,996 82,055
FUND BALANCE - BEGINNING OF YEAR
440,390
440,390
440,390 -
FUND BALANCE - END OF YEAR $
447,331 $
447,331 $
529,386 $ 82,055
120
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
BUDGETARY COMPARISON SCHEDULE
ARPA SPECIAL REVENUE FUND
For the year ended June 30, 2024
Variance with
Final Budget
Budgeted
Amounts
Positive
REVENUES:
Original
Final
Actual
(Negative)
Investment income
$ 15,000
$ 15,000
$ 247,634
$ 232,634
Intergovernmental revenue
3,932,500
4,319,500
4,049,366
(270,134)
TOTAL REVENUES
3,947,500
4,334,500
4,297,000
(37,500)
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
3,947,500
4,334,500
4,297,000
(37,500)
OTHER FINANCING SOURCES (USES):
Transfer out
(3,900,000)
(4,297,000)
(4,297,000)
-
TOTAL OTHER
FINANCING SOURCES (USES)
(3,900,000)
(4,297,000)
(4,297,000)
-
NET CHANGE IN FUND BALANCE
47,500
37,500
-
(37,500)
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
$ 47,500 $ 37,500 $ - $ (37,500)
See accompanying notes to the required supplementary information
121
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
REVENUES:
Intergovernmental revenue
TOTAL REVENUES
EXPENDITURES:
Current:
General government
TOTAL EXPENDITURES
CITY OF TUSTIN
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
SPECIAL TAX B SPECIAL REVENUE FUND
For the year ended June 30, 2024
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ 5,724,417 $ 5,724,417 $ 5,712,453 $ (11,964)
5,724,417 5,724,417 5,712,453 (11,964)
7,000 7,000
7,000 7,000
EXCESS OF REVENUES OVER
EXPENDITURES 5,724,417 5,717,417 5,705,453 (11,964)
OTHER FINANCING SOURCES (USES):
Transfer out (5,724,417) (5,329,780) (5,733,521) (403,741)
NET CHANGE IN FUND BALANCE - 387,637 (28,068) (415,705)
FUND BALANCE - BEGINNING OF YEAR 63,557 63,557 63,557 -
FUND BALANCE - END OF YEAR $ 63,557 $ 451,194 $ 35,489 $ (415,705)
122
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
ROAD MAINTENANCE AND REHABILITATION SPECIAL REVENUE FUND
REVENUES:
Investment income
Intergovernmental revenue
Other revenue
For the year ended June 30, 2024
Budgeted Amounts
Original Final
1,948,194 1,948,194
Actual
$ 308,740
2,074,781
98.100
Variance with
Final Budget
Positive
(Negative)
$ 308,740
126,587
98.100
TOTAL REVENUES
1,948,194
1,948,194
2,481,621
533,427
EXPENDITURES:
Current:
Public works
24,826
24,826
25,636
(810)
Capital outlay
3,750,000
5,350,000
3,166,358
2,183,642
TOTAL EXPENDITURES
3,774,826
5,374,826
3,191,994
2,182,832
EXCESS OF REVENUES OVER (UNDER)
EXPENDITURES
(1,826,632)
(3,426,632)
(710,373)
2,716,259
NET CHANGE IN FUND BALANCE
(1,826,632)
(3,426,632)
(710,373)
2,716,259
FUND BALANCE - BEGINNING OF YEAR
5,830,407
5,830,407
5,830,407
-
FUND BALANCE - END OF YEAR $
4,003,775 $
2,403,775 $
5,120,034 $
2,716,259
123
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
VOLUNTARY WORKFORCE HOUSING INCENTIVE SPECIAL REVENUE FUND
For the year ended June 30, 2024
Budgeted Amounts
Original Final
REVENUES:
Investment income
Charges for services
Variance with
Final Budget
_ Positive
Actual (Negative)
$ 115,864 $ 115,864
101,346 101,346
TOTAL REVENUES
- -
217,210
217,210
EXPENDITURES:
Current:
Community services
- 2,000,000
5,471
1,994,529
TOTAL EXPENDITURES
- 2,000,000
5,471
1,994,529
EXCESS OF REVENUES OVER
EXPENDITURES
- (2,000,000)
211,739
2,211,739
OTHER FINANCING SOURCES (USES):
Transfer out
- (100,000)
-
(100,000)
TOTAL OTHER
FINANCING SOURCES (USES)
- (100,000)
-
(100,000)
NET CHANGE IN FUND BALANCE
- (2,100,000)
211,739
2,111,739
FUND BALANCE - BEGINNING OF YEAR
2,089,584 2,089,584
2,089,584
-
FUND BALANCE - END OF YEAR $
2,089,584 $ (10,416) $
2,301,323 $
2,111,739
124
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
SOLID WASTE SPECIAL REVENUE FUND
For the year ended June 30, 2024
REVENUES:
Fines and forfeitures
Investment income
Intergovernmental revenue
Charges for services
Other revenue
TOTAL REVENUES
EXPENDITURES:
Current:
Public works
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER (UNDER)
EXPENDITURES
NET CHANGE IN FUND BALANCE
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ - $ - $ 2,150 $ 2,150
96,104 96,104
- - 49,112 49,112
220,000 220,000 255,692 35,692
- - 314,400 314,400
220,000 220,000 717,458 497,458
416,174
441,174
380,455
60,719
416,174
441,174
380,455
60,719
(196,174)
(221,174)
337,003
558,177
(196,174)
(221,174)
337,003
558,177
1,713,439
1,713,439
1,713,439
-
$ 1,517,265 $
1,492,265 $
2,050,442 $
558,177
125
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
PARK ACQUISITION AND DEVELOPMENT SPECIAL REVENUE FUND
REVENUES:
Investment income
Intergovernmental revenue
Charges for services
Rental income
TOTAL REVENUES
EXPENDITURES:
Current:
Community services
Capital outlay
TOTAL EXPENDITURES
For the year ended June 30, 2024
Budgeted Amounts
Original Final
Actual
Variance with
Final Budget
Positive
(Negative)
$ 20,000 $ 20,000 $ 184,754 $ 164,754
700,000 700,000 - (700,000)
25,000 25,000 18,865 (6,135)
332,800 332,800 397,953 65,153
1,077,800 1,077,800 601,572 (476,228)
- 60,000 57,167 2,833
1,074,427 1,314,729 313,602 1,001,127
1,074,427 1,374,729 370,769 1,003,960
EXCESS OF REVENUES OVER
EXPENDITURES 3,373 (296,929) 230,803 527,732
NET CHANGE IN FUND BALANCE 3,373 (296,929) 230,803 527,732
FUND BALANCE - BEGINNING OF YEAR 1,798,193 1,798,193 1,798,193 -
FUND BALANCE - END OF YEAR $ 1,801,566 $ 1,501,264 $ 2,028,996 $ 527,732
See accompanying notes to the required supplementary information
126
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
MEASURE M SPECIAL REVENUE FUND
REVENUES:
Investment income
Intergovernmental revenue
TOTAL REVENUES
EXPENDITURES:
Capital outlay
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES):
Transfer out
For the year ended June 30, 2024
Budgeted Amounts
Original Final
Actual
Variance with
Final Budget
Positive
(Negative)
$ 20,000 $ 20,000 $ 141,786 $ 121,786
2,230,000 2,230,000 2,274,054 44,054
2,250,000 2,250,000 2,415,840 165,840
4,628,423 5,158,371 2,430,383 2,727,988
4,628,423 5,158,371 2,430,383 2,727,988
(2,378,423) (2,908,371) (14,543) 2,893,828
(80,000) (80,000) (149,199) (69,199)
NET CHANGE IN FUND BALANCE (2,458,423) (2,988,371) (163,742) 2,824,629
FUND BALANCE - BEGINNING OF YEAR 3,151,223 3,151,223 3,151,223 -
FUND BALANCE - END OF YEAR $ 692,800 $ 162,852 $ 2,987,481 $ 2,824,629
127
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
COMBINING STATEMENT OF FIDUCIARY NET POSITION
CUSTODIAL FUNDS
ASSETS
Cash and investments
Restricted cash and investments
Accounts receivable
TOTAL ASSETS
LIABILITIES
Accounts payable
TOTAL LIABILITIES
NET POSITION
Restricted for:
Bondholders
June 30, 2024
Community
Community
Community
Community
Facilities
Facilities
Facilities
Facilities
District
District
District
District
04-01
06-01
07-01
2014-1 Total
$ 3,921 $
21,242
$ - $ 35,471 $
60,634
1,207,804
7,017,602
2,077,425 3,826,237
14,129,068
3,901
37,471
- 12,216
53,588
1,215,626
7,076,315
2,077,425 3,873,924
14,243,290
34,086 1,375 35,461
34,086 1,375 35,461
$ 1,215,626 $ 7,076,315 $ 2,043,339 $ 3,872,549 $ 14,207,829
128
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
CUSTODIAL FUNDS
For the year ended June 30, 2024
Community
Community
Community
Community
Facilities
Facilities
Facilities
Facilities
District
District
District
District
04-01
06-01
07-01
2014-1
Total
ADDITIONS
Tax revenue
$ 693,207
$ 3,787,693
$ 1,108,740
$ 1,648,301
$ 7,237,941
Investment Income
41,785
278,177
82,523
164,383
566,868
TOTAL ADDITIONS
734,992
4,065,870
1,191,263
1,812,684
7,804,809
DEDUCTIONS
Administrative expenses
17,914
86,288
42,611
30,205
177,018
Principal
405,000
1,485,000
460,000
330,000
2,680,000
Interest
269,506
2,103,819
584,275
1,251,925
4,209,525
TOTAL DEDUCTIONS
692,420
3,675,107
1,086,886
1,612,130
7,066,543
NET INCREASE (DECREASE)
IN FIDUCIARY NET POSITION
42,572
390,763
104,377
200,554
738,266
NET POSITION AT BEGINNING
OF YEAR
1,173,054
6,685,552
1,938,962
3,671,995
13,469,563
NET POSITION AT END OF YEAR
$ 1,215,626
$ 7,076,315
$ 2,043,339
$ 3,872,549
$ 14,207,829
129
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
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Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
Description of Statistical Contents
June 30, 2024
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. 132
Revenue Capacity — These schedules contain information to help the reader
assess the City's most significant local revenue source, the property tax. 142
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. 148
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. 154
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. 156
Sources:
Unless otherwise noted, the information in these schedules is derived from the
Annual Comprehensive Financial Reports for the relevant years.
131
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
NET POSITION BY COMPONENT
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
2015
2016
2017
2018
Governmental activities:
Net investment in capital assets
$
456,649,085
$
483,229,135
$
490,574,647
$
499,190,473
Restricted
72,929,522
95,241,025
102,027,853
87,395,188
Unrestricted
140,727,040
107,224,779
144,442,931
151,119,177
Total governmental activities net position
$
670,305,647
$
685,694,939
$
737,045,431
$
737,704,838
Business -type activities:
Net investment in capital assets
$
24,270,718
$
25,443,651
$
23,252,432
$
22,753,763
Restricted
-
-
-
-
Unrestricted
11,845,734
12,227,557
15,129,697
16,505,744
Total business -type activities net position
$
36,116,452
$
37,671,208
$
38,382,129
$
39,259,507
Primary government:
Net investment in capital assets
$
480,919,803
$
508,672,786
$
513,827,079
$
521,944,236
Restricted
72,929,522
95,241,025
102,027,853
87,395,188
Unrestricted
152,572,774
119,452,336
159,572,628
167,624,921
Total primary government net position
$
706,422,099
$
723,366,147
$
775,427,560
$
776,964,345
* Fiscal year 2020 net position was restated.
132
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
Fiscal Year
2019
2020*
2021
2022
2023
2024
$
520,166,300
$
549,473,651
$
565,395,034
$
540,256,185
$
533,745,376
$
535,362,349
67,892,989
59,304,350
39,407,529
48,269,367
53,735,373
54,143,735
108,567,573
114,195,576
106,773,829
177,884,930
188,209,049
180,795,370
$
696,626,862
$
722,973,577
$
711,576,392
$
766,410,482
$
775,689,798
$
770,301,454
$
20,650,435
$
24,145,887
$
25,941,133
$
29,184,048
$
34,501,119
$
47,613,869
19,489,664
15,070,837
12,918,451
9,775,999
5,818,220
4,985,214
$
40,140,099
$
39,216,724
$
38,859,584
$
38,960,047
$
40,319,339
$
52,599,083
$
540,816,735
$
573,619,538
$
591,336,167
$
569,440,233
$
568,246,495
$
582,976,218
67,892,989
59,304,350
39,407,529
48,269,367
53,735,373
54,143,735
128,057,237
129,266,413
119,692,280
187,660,929
194,027,269
185,780,584
$
736,766,961
$
762,190,301
$
750,435,976
$
805,370,529
$
816,009,137
$
822,900,537
133
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TU STI N
CHANGES IN NET POSITION
EXPENSES AND PROGRAM REVENUES
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
Expenses:
Governmental activities:
General government
$ 17,121,057
$ 20,023,280
$ 24,504,764
$ 23,949,544
Public safety
29,886,284
27,779,830
34,611,078
33,713,796
Public works
34,435,214
47,326,664
24,822,480
37,599,662
Community services
3,699,059
7,869,124
19,524,660
10,795,733
Interest on Long-term debt
-
-
5,802
12,043
Total governmental activities expenses
85,141,614
102,998,898
103,468,784
106,070,778
Business -type activities:
Water
15,982,078
15,586,463
16,654,429
17,680,886
Total business -type activities expenses
15,982,078
15,586,463
16,654,429
17,680,886
Program revenues:
Governmental activities:
Charges for services:
General government
252,074
2,072,540
1,979,211
1,630,903
Public safety
1,071,099
1,195,350
1,255,299
1,283,672
Public works
1,564,314
3,538,906
1,861,045
2,167,726
Community services
892,102
953,149
1,101,294
1,434,988
Operating grants and contributions
3,546,823
2,722,978
2,742,140
3,863,547
Capital grants and contributions
20,244,479
48,711,583
26,535,693
7,641,510
Total governmental activities
program revenues
27,570,891
59,194,506
35,474,682
18,022,346
Business -type activities:
Charges for services:
Water
19,375,359
16, 511, 795
17,100,836
18, 229,013
Operating grants and contributions
-
-
-
-
Capital grants and contributions
-
-
-
-
Total business -type activities
program revenues
19,375,359
16,511,795
17,100,836
18,229,013
Net revenues (expenses):
Governmental activities
$ (57,570,723)
$ (43,804,392)
$ (67,994,102)
$ (88,048,432)
Business -type activities
3,393,281
925,332
446,407
548,127
Total net revenues (expenses)
$ (54,177,442)
$ (42,879,060)
$ (67,547,695)
$ (87,500,305)
134
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
Fiscal Year
2019
2020
2021
2022
2023
2024
$ 27,097,686
$ 29,282,004
$ 27,172,397
$ 19,435,937
$ 23,229,440
$ 98,403,543
36,215,060
39,064,730
42,307,312
37,274,550
43,411,070
51,506,630
45,849,976
40,430,009
25,720,382
34,752,971
34,453,960
34,924,407
20,304,550
5,682,249
7,898,475
11,705,919
11,011,517
9,918,277
9,297
6,444
3,476
25,311
25,402
32,133
129,476, 569
114,465,436
103,102,042
103,194,688
112,131,389
194, 784,990
17,763,633
17,767,158
19,283,136
21,303,398
22,544,478
22,540,741
17,763,633
17,767,158
19,283,136
21,303,398
22,544,478
22,540,741
1,920,214
2,157,735
2,011,470
3,072,210
3,344,041
3,836,719
1,285, 584
1,205, 519
1,298, 587
1,222,841
1,400,441
1,237,042
3,300,906
3,123,961
2,586,033
5,825,437
7,436,265
6,692,885
2,426,578
1,892,126
1,232,539
2,654,817
3,445,025
3,034,343
4,952,271
4,911,642
8,618,631
12,264,401
12,781,132
89,886,641
3,942,834
4,565,393
4,422,891
12,852,760
3,133,846
2,302,997
17,828,387
17,856,376
20,170,151
37,892,466
31,540,750
106,990,627
17,329,090 17,364,694 18,891,433 19,633,007 19,466,690 20,596,504
- - - dR Q1A - -
17,329,090 17,364,694 18,891,433 21,257,061 23,557,136 33,972,580
$ (111,648,182) $ (96,609,060) $ (82,931,891) $ (65,302,222) $ (80,590,639) $ (87,794,363)
(434,543) (402,464) (391,703) (46,337) 1,012,658 11,431,839
$ (112,082,725) $ (97,011,524) $ (83,323,594) $ (65,348,559) $ (79,577,981) $ (76,362,524)
135
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
CHANGES IN NET POSITION
GENERALREVENUES
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
2015
2016
2017
2018
General revenues and other changes
in net position:
Governmental activities:
Taxes:
Property taxes
$
14,552,535
$
16,451,763
$
24,437,717
$
25,636,673
Transient occupancy taxes
1,090,675
1,554,754
1,609,318
1,575,830
Business license taxes
419,148
406,891
420,684
431,457
Other taxes
1,763,878
1,839,963
1,931,185
1,781,175
Sales tax
22,269,896
24,513,610
25,133,146
24,925,934
Motor vehicle in Lieu, unrestricted
6,380,698
6,778,329
37,056
43,359
Investment income (Loss)
1,052,276
2,430,087
611,964
1,109,193
Other general revenues
7,829,149
2,671,845
4,594,651
4,838,383
Gain on sale of Land held for resale
48,136,121
-
24,241,261
33,636,759
Profit participation
-
-
31,327,612
-
Transfers
-
-
-
-
Contribution from successor agency
32,137,773
-
-
-
Extraordinary and special items
-
2,546,442
5,000,000
-
TotaL governmental activities
135,632,149
59,193,684
119,344,594
93,978,763
Business -type activities:
Investment income (Loss)
249,863
480,050
108,669
150,371
Miscellaneous
489,090
149,374
155,845
178,880
Transfers
-
-
-
-
TotaL business -type activities
738,953
629,424
264,514
329,251
Total primary government
$
136,371,102
$
59,823,108
$
119,609,108
$
94,308,014
Changes in net position:
Governmental activities
$
78,061,426
$
15,389,292
$
51,350,492
$
5,930,331
Business -type activities
4,132,234
1,554,756
710,921
877,378
Total primary government
$
82,193,660
$
16,944,048
$
52,061,413
$
6,807,709
136
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
Fiscal Year
2019 2020 2021 2022 2023 2024
$ 26,275,789
$
27,358,525
$
29,142,850
$
28,324,241
$
30,283,746
$
26,805,569
1,825,957
1,593,532
1,218,924
1,857,502
2,151,007
2,392,315
466,828
438,632
416,266
435,626
470,064
460,416
1,762,642
1,792,263
1,862,200
1,850,139
2,011,849
1,864,197
26,634,458
25,487,518
30,753,042
34,391,644
35,889,406
35,403,145
39,526
64,400
58,955
92,431
82,411
99,310
7,167,093
4,445,124
1,676,386
(3,500,691)
6,081,889
11,629,540
6,002,632
4,556,040
1,308,076
190,141
1,126,304
368,622
395,281
1,014,511
85,240
56,048,775
-
-
-
-
5,012,767
337,972
11,622,220
-
-
-
-
108,532
-
-
70,570,206
66,750,545
71,534,706
120,136,312
89,718,896
79,023,114
1,084,525
869,426
5,629
(173,093)
326,716
819,851
230,610
23,193
28,934
428,425
19,918
28,054
-
-
-
(108,532)
-
-
1,315,135
892,619
34,563
146,800
346,634
847,905
$ 71,885,341
$
67,643,164
$
71,569,269
$
120,283,112
$
90,065,530
$
79,871,019
$ (41,077,976)
$
(29,858,515)
$
(11,397,185)
$
54,834,090
$
9,128,257
$
(8,771,249)
880,592
490,155
(357,140)
100,463
1,359,292
12,279,744
$ (40,197,384)
$
(29,368,360)
$
(11,754,325)
$
54,934,553
$
10,487,549
$
3,508,495
137
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
FUND BALANCES OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
2015
2016
2017
2018
General fund:
Nonspendable
$
122,458,642
$
88,579,214 3
$
84,344,748
$
82,868,217
Restricted
16,650,332
18,657,461
34,901,943
41,269,878
Unassigned
84,278,138 1
79,667,061
102,517,562
116,332,458
Total general fund
$
223,387,112
$
186,903,736
$
221,764,253
$
240,470,553
All other governmental funds:
Nonspendable
$
$
1,922
$
1,922
$
Restricted
24,048,818
54,438,343
51,069,708
46,322,996
Assigned
37,350,531 Z
26,871,816
20,408,936
17,719,394
Unassigned
-
-
-
-
Total all other governmental funds
$
61,399,349
$
81,312,081
$
71,480,566
$
64,042,390
138
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
Fiscal Year
2019
2020*
2021
2022
2023
2024
$
82,902,130
$
107,921,521
$
108,201,957
$
103,464,420
$ 107,508,711
$
107,523,830
31,250,893
16,438,469
15,684,164
24,668,684
27,466,991
27,317,982
88,768,803
74,972,202
78,811,634
136,230,562 4
139,772,869
98,515,807
$
202,921,826
$
199,332,192
$
202,697,755
$
264,363,666
$ 274,748,571
$
233,357,619
$
1,922
$
-
$
3,305
$
5,731
$ 7,301
$
36,233
37,215,903
37,107,137
27,060,075
21,976,212
19,752,931
16,090,778
5,762,048
1,432,974
4,918,161
4,807,905
12,277,742
16,155,894
-
(628,792)
-
-
(97,462)
(2,585)
$ 42,979,873 $ 37,911,319 $ 31,981,541 $ 26,789,848 $ 31,940,512 $ 32,280,320
1 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.
2 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.
3 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.
4 Increase of $56 million due to the gain on sale of land in the former Marine Corp Air Station referred to as the Legacy.
* Fiscal. year 2020 fund balance was restated.
139
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
2015
2016
2017
2018
Revenues:
Taxes
$ 21,426,308
$ 23,525,899
$ 24,825,401
$ 25,770,970
Licenses and permits
885,043
1,334,311
853,990
905,086
Fines and forfeitures
752,597
982,123
953,665
996,912
Investment income (loss)
1,041,661
2,422,072
608,888
1,120,276
Intergovernmental revenues
37,302,283
42,838,003
35,382,444
42,121,841
Charges for services
1,870,401
2,357,268
1,999,860
2,177,345
Rental income
1,113,340
1,308,852
1,542,281
1,674,068
Developer contributions
16,934,704
26,357,490
16,804,964
1,341,143
Profit participation
-
-
23,495,709
7,179,553
Gain on sale of land held for resale
48,136,121
-
24,241,261
33,636,759
Contribution from Successor Agency
32,137,773
-
-
-
Other revenues
6,302,392
4,714,101
5,849,937
8,848,778
Total revenues
167,902,623
105,840,119
136,558,400
125,772,731
Expenditures:
Current:
General government
17,568,297
20,372,454
24,052,915
21,259,806
Public safety
33,062,929
27,897,182
30,733,524
32,335,404
Public works
6,417,257
7,182,380
7,591,876
7,795,849
Community services
3,170,747
7,308,498
18,727,257
9,747,562
Capital outlay
23,800,093
22,498,621
26,657,177
40,082,440
Debt service:
Principal retirement
5,000,000
4,101,171
4,129,203
3,271,503
Interest and fiscal charges
-
-
5,802
12,043
Total expenditures
89,019,323
89,360,306
111,897,754
114,504,607
Excess (deficiency) of revenues
over (under) expenditures
78,883,300
16,479,813
24,660,646
11,268,124
Other financing sources (uses):
Transfers in
5,266,102
5,453,988
4,242,209
8,908,605
Transfers out
(5,266,102)
(5,453,988)
(4,242,209)
(8,908,605)
Leasesissued
-
-
368,356
-
Total other financing sources (uses)
-
-
368,356
-
Extraordinary gain (loss)
-
976,042
-
-
Special item
21,404,683
(34,026,499)
-
-
Net change in fund balances
$ 100,287,983
$ (16,570,644) $
25,029,002
$ 11,268,124
Debt service as a percentage of
noncapital expenditures
8.86%
6.03%
5.28%
3.46%
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.
140
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
Fiscal Year
2019 2020 2021 2022 2023 2024
L0,307,3O.J
z;> L/,10/,V1L
z;> 00,/44,403 z;>
04,V/O,V31
> O/,O3/,430 Z;>
07,473,400
1,212,696
1,280,180
1,227,707
2,179,335
3,007,410
2,246,204
909,355
841,747
929,637
1,011,519
1,160,608
930,778
7,172,443
4,455,060
1,676,386
(3,500,691)
6,081,889
11,629,547
39,613,110
38,156,567
16,875,101 1
19,174,643
21,609,227
55,807,711
2,761,688
2,688,921
2,017,100
4,293,614
5,101,300
5,489,050
2,055,135
2,133,706
1,905,553
3,259,121
3,323,645
3,661,473
212,651
-
5,012,767
-
11,622,220
395,281
1,014,511
85,240
56,048,775
-
7.590.956
4.918.426
5.678.057
12.238.083
2.197.505
1.510.665
25,539,637
27,145,126
25,336,809
18,626,105
19,838,017
94,394,427
33,200,885
36,427,058
37,592,859
41,515,077
44,351,748
47,029,712
9,105,493
8,231,789
8,784,309
17,365,084
19,183,766
20,464,848
19,603,654
4,955,971
4,711,435
9,799,151
8,781,817
7,335,018
59,389,068
42,277,454
20,209,628
14,954,652
13,586,395
21,809,818
71,908
74,763
77,730
131,364
638,528
829,157
9.297
6.444
3.476
25.311
25.402
32.133
(58,611,244)
(36,442,475)
(2,564,215)
56,365,686
15,535,569
(41,126,199)
7,281,771
4,745,170
11,814,494
12,495,004
15,528,398
15,343,366
(7.281.771)
(4.745.170)
(11.814.494)
(12.386.472)
115.528.3981
(15.343.366)
108,532 75,055
0.06% 0.09% 0.10% 0.16% 0.71% 0.50%
141
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
ASSESSED VALUE AND ESTIMATED ACTUAL VALUE
OF TAXABLE PROPERTY
(IN THOUSANDS)
Last Ten Fiscal Years
City
Fiscal Year
Taxable
Ended
Assessed
June 30 Secured Unsecured
Value
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
2023 10,921,736 408,806
11,330,542
2024 11,625,131 532,993
12,158,124
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.
` This rate represents the weighted average of all individual direct rates applied by the City of Tustin.
142
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
Successor Agency 1
Taxable
Tota l
Assessed
Direct Tax
Secured
Unsecured
Value
Rate 2
$ 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%
4,290,538
145,081
4,435,619
0.117%
4,627,872
172,806
4,800,678
0.117%
143
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
DIRECT AND OVERLAPPING PROPERTY TAX RATES
Last Ten Fiscal Years
(rate per $100 of taxable value)
Fiscal Year
2015
2016
2017
2018
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
0.0696
0.0775
0.0700
0.0687
Metropolitan Water District Bonds
0.0035
0.0035
0.0035
0.0035
Rancho Santiago Community College District Bonds
0.0508
0.0504
0.0495
0.0509
Orange Unified School District Bonds
-
-
-
-
Irvine Ranch Water District Bonds
0.0960
0.0960
0.1270
0.1270
Santa Ana Unified School District Bonds
0.0687
0.0660
0.0638
0.0633
Irvine Unified School District Bonds
-
-
-
0.0271
Total Overlapping Rates 0.2886 0.2934 0.3138 0.3405
Total Direct and Overlapping Rates $ 1.2886 $ 1.2934 $ 1.3138 $ 1.3405
Source: Hdl, Coren & Cone
144
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
Fiscal Year
2019
2020
2021
2022
2023
2024
$ 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
0.0669
0.0638
0.0710
0.0652
0.0665
0.0586
0.0035
0.0035
0.0035
0.0035
0.0035
0.0035
0.0454
0.0518
0.0452
0.0429
0.0469
0.0456
0.0269
0.0229
0.0166
0.0166
0.0256
0.0253
0.1270
0.1270
0.1270
0.1270
0.1270
0.1270
0.0556
0.0730
0.0813
0.0686
0.0698
0.0589
0.0280
0.0253
0.0280
0.0231
0.0258
0.0239
0.3532
0.3673
0.3727
0.3469
0.3651
0.3428
$ 1.3532
$ 1.3672
$ 1.3727
$ 1.3469
$ 1.3651 $
1.3427
145
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
PRINCIPAL PROPERTY TAX PAYERS
Current Year and Nine Years Ago
2024
2015
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
$ 194,080,141
1.14%
$ 162,372,463
1.58%
Raintree Tustin LLC
158,921,136
0.94%
CSHV Myford Tustin LLC
142,137,552
0.84%
Schools First Federal Credit Union
139,649,608
0.82%
Legacy Villas LLC
139,268,642
0.82%
AVID Bioservices Inc
134,801,018
0.80%
Flight Phase I Owner LLC
134,355,435
0.79%
Tustin Market Place
92,255,693
0.54%
Costco Wholesale Corporation
72,051,827
0.42%
47,286,886
0.46%
Borchard Redhill SKB-Tustin LLC
71,236,070
0.42%
47,709,881
0.46%
Irvine Company LLC
228,477,924
2.22%
Avalon II California Value 1
98,143,300
0.95%
PK 11 Larwin Square SC LP
48,263,673
0.47%
Irvine Apartment Communities
50,873,840
0.49%
Ricoh Development
48,516,780
0.47%
Cadigan Communities
47,482,617
0.46%
CP II Park Place LLC
42,498,878
0.41%
$ 1,278,757,122
7.54%
$ 821,626,242
7.97%
Source: HdL, Coren & Cone
146
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
Fiscal
Year Ended
June 30
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Taxes Levied
for the
Fiscal Year
CITY OF TUSTIN
PROPERTY TAX LEVIES AND COLLECTIONS
Last Ten Fiscal Years
Collected within the
Fiscal Year of Levy
Amount
$ 9,287,149 $ 9,007,785
10,847,984
10,541,516
11,278,643
10,996,314
11,844,150
11,615,833
12,335,873
12,072,342
12,732,756
12,500,616
13,346,141
13,122,458
13,867,033
13,518,415
15,050,249
14,717,998
15,859,881
15,521,841
Collections in
Percent
Subsequent
of Levy
Years
96.99%
$ 163,497
97.17%
233,935
97.50%
207,332
98.07%
174,112
97.86%
183,788
98.18%
182,977
98.32%
180,669
97.49%
279,787
97.79%
277,170
97.79%
251,597
Total Collections to Date
Amount
$ 9,171,282
10,775,451
11,203,646
11,789,945
12,256,130
12,683,593
13,303,126
13,798,202
14,995,168
15,773,437
Percent
of Levy
98.75%
99.33%
99.34%
99.54%
99.35%
99.61%
99.68%
99.50%
99.63%
99.45%
Notes:
The amounts presented for fiscal years 2009 through 2012 include City property taxes and former Redevelopment
Effective February 1, 2012, the former Redevelopment Agency was dissolved. See Notes 18 for more information.
Source: County of Orange Auditor Controller's Office
Millions
$18.00
$16.00
$14.00
$12.00
$10.00
$8.00
$6.00
$4.00
$2.00
Property Tax Levies and Collections
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Taxes Levied Amount Collected
147
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
Fiscal
CITY OF TUSTIN
RATIOS OF OUTSTANDING DEBT BYTYPE
Last Ten Fiscal Years
Governmental Activities
Year Total
Ended Notes Lease Lease Subscription Governmental
June 30 PayabLe' PayabLe z Payable 3 PayabLe 4 Activities
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
2023 - - 467,949 2,121,251 2,589,200
2024 - - 354,638 1,480,460 1,835,098
Notes: 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.
z In February 2017 the City entered into a Lease to finance equipment with a present value of $368,356.
3 In fiscal year 2021-2022, the City implemented GASB 87 Lease PayabLe as a Lessee for facilities, vehicles and
equipment. See Note # for more information.
4 In fiscal year 2022-2023, the City implemented GASB 96 Subscription PayabLe as a Lessee for facilities,
vehicles and equipment. See Note # for more information.
Source: LT Debt -City & Water
Revenue Bonds + Bond Premium
148
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
Business -type Activity
Water
Water
Water
Water
Revenue
Revenue
Revenue
Revenue
Bonds 5
Bonds 6
Bonds 7
Bonds a
$ 21,023,911
$ 7,398,615
$ 14,111,418
$ -
21,013,711
6,571,858
14,062,474
-
-
5,720,101
14,013,530
22,790,666
-
4,843,344
13,959,586
22,738,061
-
3,931,858
13,905,642
22,685,456
-
2,989,831
-
22,632,852
-
2,023,074
-
22,580,247
-
1,021,317
-
22,527,643
22,475,037
21,517,432
Water Advance Water
Revenue to Revenue
Bonds 9 Water 10 Bonds"
14,910,000 - -
14,745,000 - -
14,540,000 - -
14,335,000 3,830,700 -
13,895,000 3,830,700 4,125,000
Percentage
Total
Total
of
Debt
Business -type
Primary
Personal
Per
Activity
Government
Income
Capita
$ 42,533,944
$ 58,938,627
2.44%
752
41,648,043
53,951,555
2.21%
656
42,524,297
46,066,962
1.82%
559
41,540,991
41,812,153
1.63%
508
40,522,956
40,722,211
1.46%
500
40,532,683
40,657,175
1.37%
506
39,348,321
39,395,082
1.27%
492
38,088,960
38,653,489
1.18%
486
40,640,737
43,229,937
1.23%
543
43,368,132
45,203,230
1.19%
573
6 In May 2011 the City issued $20,760,000 Water Revenue Bonds, 2011 Series A to finance water capital improvement projects.
6 In March 2012 the City issued $8.91 million of Refunding Water Bonds to defease the outstanding 2003 Water Revenue Bonds.
7 In October 2013 the City issued $14,045,000 Water Revenue Bonds to finance water capital improvement projects.
8 In September 2016 the City issued $21.515 million of Refunding Water Bonds to defease the outstanding 2011 Water Revenue Bonds.
s In February 2020 the City issued $14.91 million of Refunding Water Bonds to defease the outstanding 2013 Water Revenue Bonds.
i0 On June 1, 2023, the General Fund purchased a seven year Promisssory Note issued by the Water Enterprise Fund to provide cash flows.
u On February 2024, the City issued $4,125,000 Water Revenue Bond to fund capital improvements for the City's Water System
149
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
OVERLAPPING DEBT SCHEDULE
June 30, 2024
2023-24 Assessed Valuation: $ 16,960,027,928
Redevelopment Incremental Valuation (4,620,989,504)
Adjusted Assessed Value $ 12,339,038,424
City's
Share of
Total Debt
Debt at
OVERLAPPING TAX AND ASSESSMENT DEBT:
6/30/24
%Applicable 1
6/30/2024
Metropolitan Water District
$ 18,210,000
0.438%
$ 79,760
Rancho Santiago Community College District
154,276,441
0.16
246,842
Rancho Santiago Community College District School Facilities Improvement District No.1
144,765,000
0.276
399,551
Irvine Unified School District School Facilities Improvement District No. 1
211,575,000
2.737
5,790,808
Orange Unified School District
276,295,000
0.028
77,363
Santa Ana Unified School District
409,228,633
0.34
1,391,377
Tustin Unified School District School Facilities Improvement District No. 2002-1
36,420,000
47.276
17,217,919
Tustin Unified School District School Facilities Improvement District No. 2008-1
73,030,000
45.865
33,495,210
Tustin Unified School District School Facilities Improvement District No. 2012-1
47,005,000
46.186
21,709,729
Tustin Unified School District Community Facilities District No. 88-1
2,040,000
100
2,040,000
Tustin Unified School District Community Facilities District No. 06-1
12,570,000
100
12,570,000
City of Tustin Community Facilities Districts
86,580,000
100
86,580,000
Irvine Ranch Water District Improvement Districts
419,685,952
4.779 - 88.794
49,657,877
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT
231,256,436
DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT:
Orange County General Fund Obligations
$ 440,385,000
2.203%
$ 9,701,682
Orange County Board of Education General Fund Obligations
10,030,000
2.203
220,961
Orange Unified School District Certificates of Participation
8,440,000
0.028
2,363
Orange Unified School District Benefit Obligations
56,260,000
0.028
15,753
Santa Ana Unified School District General Fund Obligations
42,399,216
0.34
144,157
City of Tustin Lease Payable
354,638
100
354,638
City of Tustin Subscription Payable
1,480,460
100
1,480,460
TOTAL DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT
11,920,014
OVERLAPPING TAX INCREMENT DEBT (Successor Agencies)
$ 88,820,000
0.001-100.%
41,830,470 Z
TOTAL OVERLAPPING DEBT
TOTAL DIRECT DEBT
COMBINED TOTAL DEBT
283,171,822 s
1,835,098
$ 285,006,920
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.
Z 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
3 Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non -bonded leases
Ratios to 2023-2024 Assessed Valuations:
Total Overlapping Tax and Assessment Debt 1.36%
Total Direct Debt 0.01%
Combined Total Debt 1.68%
Ratios to Redevelopment Successor Agencies Incremental Valuation (54,255,930,133 .
Total Overlapping Tax Increment Debt 0.91%
Source: California Municipal Statistics, Inc. via HdL
150
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
LEGAL DEBT MARGIN INFORMATION
Last Ten Fiscal Years
Fiscal Year
2015 2016
2017
2018
2019
Assessed valuation $ 7,790,632,000 $ 8,218,228,000 $
8,566,757,000
$ 8,995,570,000
$ 9,405,874,000
Conversion percentage 25% 25%
25%
25%
25%
Adjusted assessed valuation 1,947,658,000 2,054,557,000
2,141,689,250
2,248,892,500
2,351,468,500
Debt limit percentage 15% 15%
15%
15%
15%
Debt Limit 292,148,700 308,183,550
321,253,388
337,333,875
352,720,275
Total net debt applicable to Limitation - -
-
-
-
Legal debt margin $ 292,148,700 $ 308,183,550 $
321,253,388
$ 337,333,875
$ 352,720,275
Total debt applicable to the Limit
as a percentage of debt Limit 0.0% 0.0%
0.0%
0.0%
0.0%
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
Sources: County Tax Assessor's Office
City Finance Department
151
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
Fiscal Year
2020
2021
2022
2023
2024
$ 9,819,597,000
$ 10,285,119,000
$ 10,609,472,000
$ 11,330,542,000
$ 12,158,124,000
25%
25%
25%
25%
25%
2,454,899,250
2,571,279,750
2,652,368,000
2,832,635,500
3,039,531,000
15%
15%
15%
15%
15%
368,234,888
385,691,962.50
397,855,200
424,895,325
455,929,650
$ 368,234,888 $
385,691,963 $
397,855,200 $
424,895,325 $
455,929,650
0.0%
0.0%
0.0%
0.0%
0.0%
152
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
PLEDGED -REVENUE COVERAGE
Last Ten Fiscal Years
Fiscal Year
Less
Net
Water Revenue Bonds
Ended
Water Proceeds from
Operating
Available
Debt Service
June 30
Revenue Advance 1
Expenses
Revenue
Principal
Interest
Coverage
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
2023
18,550,021 3,830,700
18,072,628
4,308,093
1,165,000
1,126,308
1.88
2024
21,743,329 -
18,394,803
3,348,526
1,345,000
1,084,540
1.38
1 On June 1, 2023, the General Fund purchased a seven year Promisssory Note issued by the Water Enterprise Fund to provide cash flows
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
153
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
DEMOGRAPHIC AND ECONOMIC STATISTICS
Last Ten Calendar Years
Personal
Per Capita
Calendar
City of Tustin
Income
Personal
Unemployment
Year
Population
(in Thousands)
Income
Rate
2014
78,347
$ 2,411,442
$ 30,779
5.10%
2015
82,717
2,441,169
29,512
4.20%
2016
82,372
2,506,380
30,427
3.70%
2017
82,344
2,570,460
31,216
3.50%
2018
81,369
2,785,795
34,237
2.80%
2019
80,382
2,963,734
36,870
2.60%
2020
80,009
3,112,332
38,899
8.30%
2021
79,535
3,271,521
41,133
5.90%
2022
79,558
3,510,034
44,119
3.00%
2023
78,844
3,788,661
48,052
3.40%
Source: HdL Coren & Cone, LLC
City of Tustin Population
100,000
80,000
60,000
40,000
20,000
Per Capita Personal Income
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
'LOti� 'LOtih ,LO,� ,LO,� .LO,� ,LO,� ,LOBO .LOOS .LOOS 'LOti�
Personal Income (in Thousands)
$4,000,000
$3,000,000
$2,000,000
$1,000,000
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
LO,yDLO,yh ,LO,O 'LOti� LO,y'b LO,y�i ,LOBO 'LO�� �00�'LO��
Unemployment Rate
ti ti ti ti ti ti ti ti ti ti
154
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
PRINCIPAL EMPLOYERS
Current Year and Nine Years Ago
2024
2015
Percent of
Percent of
Number of
Total
Number of
Total
Employer
Employees
Employment
Employees
Employment
Tustin Unified School District
2,491
6.20%
1,449
3.39%
Schools First Federal Credit Union
1,089
2.71%
Costco Wholesale Corporation
749
1.86%
450
1.05%
Rivian
500
1.24%
City of Tustin
440
1.09%
372
0.87%
Foothill Regional Medical Center
450
1.12%
Pacific Bell
416
1.03%
New American Funding
412
1.02%
Avid BioSciences
387
0.96%
Virgin Galactic
339
0.84%
Rockwell Collins
-
0.00%
600
1.40%
Ricoh Electronics Inc
-
0.00%
500
1.17%
Newport Specialty Hospital
-
0.00%
300
0.70%
Tustin Hospital Medical Center
-
0.00%
300
0.70%
Toshiba America Medical Systems
-
0.00%
300
0.70%
Micro Vention Inc.
-
0.00%
300
0.70%
Balboa Water Group
-
0.00%
253
0.59%
Sources: State of California Employment Development Department
City of Tustin
US Census Bureau
155
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
Function
General Government
Community Development
Public Works
Police
Parks and Recreation
Water
Tota L
CITY OF TUSTIN
FULL-TIME CITY EMPLOYEES
BY FUNCTION
Last Ten Fiscal Years
Fiscal Year
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
33
38
35
39
42
42
45
42
46
43
16
19
19
19
20
20
23
24
24
20
48
45
48
47
49
50
53
60
61
64
141
141
137
142
140
143
150
147
163
157
14
14
17
17
17
16
17
19
17
27
18
19
18
18
19
17
21
16
20
25
270 276 274 282 287 288 309 308 331 336
The City contracts with the OC Fire Authority for fire services.
Source: City of Tustin Human Resources Department
156
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
Function
CITY OF TUSTIN
CAPITAL ASSET STATISTICS
BY FUNCTION
Last Ten Fiscal Years
Fiscal Year
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Public Safety
Police Stations 1 1 1 1 1 1 1 1 1 1
Fire Stations 1 2 2 2 2 2 2 2 2 2 2
Public Works
Street (miles)
129.1
130.1
130.7
131.3
131.3
132.6
132.6
132.6
134.4
134.4
Street Lights
3,640
3,680
3,700
3,700
3,740
3,797
3,789
3,789
3,874
3,874
Traffic Signals
121
125
126
128
128
128
131
131
135
135
Storm Drain (miles)
51.4
51.8
52.9
53.9
53.9
53.9
54.8
54.8
56.5
56.5
Street Trees
15,815
15,706
15,542
15,574
15,042
14,606
14,546
14,546
14,566
14,183
Parks and Recreation
Parks
13
14
14
14
14
16
16
16
18
19
Parks (acres)
98.5
116.0
116.0
116.0
116.0
173.5
173.5
173.5
173.6
175.6
Community Centers
3
3
3
3
3
3
4
4
4
4
Senior Centers
1
1
1
1
1
1
1
1
1
1
Water
Metered Services
14,148
14,099
14,109
14,104
14,241
14,328
14,325
14,392
14,405
14,413
Average daily consumptic
13,975
9,975
10,601
11,770
11,098
11,097
12,494
11,755
10,389
10,131
Reservoirs
6
6
6
6
6
6
6
7
7
7
Wells
13
13
14
14
14
14
14
14
14
14
Water Main (miles)
178
178
178
178
178
178
178
178
183
183
Fire Hydrants
1,911
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
157
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
WATER CONSUMPTION BY CUSTOMER TYPE
Last Ten Fiscal Years
Fiscal Year
Type of Customer
2015
2016
2017
2018
Residential
2,603,538
1,934,761
2,119,716
2,398,744
Apartment/Multiple Units
1,139,321
1,003,808
987,688
1,039,878
Commercial
310,585
259,459
271,649
274,943
Fire Services
837
646
504
589
Irrigation
155,766
96,082
105,750
146,941
Government
229,262
134,446
162,843
195,695
Restaurants
51,658
45,069
44,947
45,086
Hospitals
10,018
11,166
11,276
10,536
Non -Profit
41,601
22,989
26,751
34,539
Industrial
59,292
40,407
45,071
45,062
HoteVMotels
21,379
23,387
25,185
28,908
All Others
71,324
68,830
70,721
75,208
4,694,581
3,641,050
3,872,101
4,296,129
Measured in hundred cubic feet.
*2021 data was restated.
Source: City of Tustin Finance Department
5,000,000
4,500,000
4,000,000
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
2015
Water Consumption By Customer
2016 2017 2018 2019
■ Residential ■ Apartment/Multiple Units Commercial ■ Fire Services Irrigation Government
158
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
Fiscal Year
2019
2020
2021*
2022
2023
2024
2,199,236
2,264,772
2,498,332
2,407,301
2,079,303
1,993,145
1,029,284
1,026,696
1,093,537
1,045,809
988,524
999,361
267,541
255,245
247,832
252,125
229,890
239,886
564
475
595
767
479
832
131,579
127,429
151,390
147,165
112,562
113,504
177,321
158,344
195,034
214,756
174,594
153,130
45,905
37,786
30,574
36,088
37,173
40,695
13,102
10,158
10,256
9,687
15,232
11,458
32,021
28,491
28,792
30,534
26,749
23,722
44,693
37,520
43,009
45,838
32,634
26,028
32,594
32,754
33,598
31,621
26,531
23,819
76,873
70,777
66,722
68,762
68,168
72,070
4,050,713 4,050,447 4,399,671 4,290,453 3,791,839 3,697,650
2020 2021 2022 2023 2024
t m Restaurants ■ Hospitals ■ Non -Profit m Industrial ■ Hotel/Motels ■ All Others
159
Docusign Envelope ID: 1lA96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
WATER RATES
Last Ten Fiscal Years
Consumption Charges
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
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
2023
46.03
12.02
3.24
3.24
3.24
3.24
3.24
3.24
2024
49.73
3.57
3.57
3.57
3.57
3.57
3.57
3.57
Emergency Drought Stage 2 - Consumption Charges
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 A revised seven (7) tiered rate structure was approved on August 5, 2014 to address a stage 2 emergency drought water demand
reduction mandate.
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.
2 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.
3 No longer in effect.
Source: City of Tustin Finance Department
160
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
Water Customer
Tustin Unified School District
Tustin Village Mhp Assoc LP
Tustin Acres Comm Assoc
Raintree Tustin LLC
City Of Tustin
Tustin Parc
Contesta Immobilien GMBH & Cc
Briarwood Investment Cc LTD
15701 TV Way Partnership
Westchester Park LP
Vio Tustin Investment LP
Waterstone Gardens Investments LP
Schroeder Prop Mgmt
Raintree-Evergreen LLC
Saddleback Mobilodge
Cadigan Communities - Monterey Pines
Regency West
Arnel Management (Walnut East)
Tustin Plaza Center LP
Tustin Village Comm Assn
New Villa Valencia MHP
Alders Apartment Company
Pacific Pointe South
Stonebrook LMTD
CMC Association Mgmt
CalTrans - District 12
Ricoh Electronics
AT& T Services, Inc.
Tustin Place HOA
SKB-Tustin LLC
HSA LP
EMS Development
Trinity United Presbyterian
Red Hill Association
Westchester Park LP
Valencia Gardens Owner LLC
School's First Credit Union
Tustin Hospital Medical Center
Avalon 2 Calif 1 LP
GRE Tustin Financial
Key Inn
Sierra Corporate Management
Total Water Sales
Source: City of Tustin Finance Dept.
CITY OF TUSTIN
Water Customers
Current Fiscal Year and Ten Years Ago
2024
Water
Charges
Percent of
Total Water
Revenues
$ 711,675
3.46%
379,372
1.84%
331,712
1.61%
224,488
1.09%
187,670
0.91 %
118,284
0.57%
96,369
0.47%
89,249
0.43%
89,229
0.43%
85,058
0.41 %
83,499
0.41 %
78,818
0.38%
78,150
0.38%
74,939
0.36%
70,604
0.34%
67,530
0.33%
65,859
0.32%
65,397
0.32%
63,730
0.31 %
63,655
0.31 %
62,151
0.30%
60,230
0.29%
57,721
0.28%
55,238
0.27%
52,556
0.26%
2014
Percent of
Water Total Water
Charges Revenues
$ 778,935 4.11 %
33,548 0.18%
171,104 0.90%
33,025 0.17%
44,598 0.24%
28,493 0.15%
47,173 0.25%
25,374
83,238
78,935
71,216
48,439
42,485
34,623
32,212
31,115
29,176
28,767
28,022
27,080
26,591
26,133
25,678
25,046
24,456
$ 3,313,183 16.09% $1,825,462
Total Water Revenues: 20,596,503 23/24 annual report
0.13%
0.44%
0.42%
0.38%
0.26%
0.22%
0.18%
0.17%
0.16%
0.15%
0.15%
0.15%
0.14%
0.14%
0.14%
0.14%
0.13%
0.13%
9.63%
161
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
CITY OF TUSTIN
OPERATING INDICATORS BY FUNCTION
Last Ten Fiscal Years
2015
2016 2017
2018
Encroachment Permits 124
147
107
155
Utility Permits 60
59
62
71
Curb Miles Swept 20,773
22,087
20,589
20,270
Community Services
Rentals 1,117
1,253
1,494
1,483
Classes 1,265
1,389
1,213
1,160
General Government
New Hires 49
47
67
48
Retiree/separations 30
38
47
63
(1) Prior to 2019, Community Services Classes include Classes that were canceled but offered.
Fiscal year 2019 on reflects the classes that were held.
* Reduced rentals and classes due to COVID-19 pandemic restrictions.
Public Safety
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
'L�yy ti�yb ti�1� ti�1� ti�19 ti�ryo ti�ryy ti�ryry ti��� ti�cb
■ Moving Citations ■ Parking Violations ■ Arrests ■ Calls for Service
Public Works - Permits
3,500
3,000
2,500
2,000
1,500
1,000
500
0
tiI1y ti'b ti1Z)
■ Number of Building Permits Issued
■ Encroachment Permits
'L�1$ ti�19 ti��O ti��1
■ Transportation Permits (Annual)
■ Utility Permits
■ Transportation Permits (Single)
162
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
Fiscal Year
2019
2020
2021
2022
2023
2014
136
161
117
147
209
267
65
57
65
55
43
96
22,162
20,766
20,766
20,766
19,276
20,317
1,326
550 *
187 *
1,102
1,176
1,597
854
805
362 *
758
735
873
62
46
24
26
35
34
56
37
24
30
34
41
Community Services
1,800
1,600
1,00
1,200
1,000
800
600
00 200
00 Ir
0
ti0yy ti0y0 ti0y� ti0y$ ��y1 �O.yO �O,y1 �O,y'L _OO �O,tib
O,
ti
Rentals ■ Classes
General Government
80
70
60
50
40
30
20
10
0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
-New Hires -Retiree/separations
163
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
DavisFarr
CERTIFIED PUBLIC ACCOUNTANTS
Davis Farr LLP
18201 Von Karman Avenue I Suite 1100 1 Irvine, CA 92612
Main: 949.474.2020 1 Fax: 949.263.5520
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, 2024. 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, 2024.
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:
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.
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
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 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 19, 2024
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
0 1 DavisFarr
CERTIFIED PUBLIC ACCOUNTANTS
Davis Farr LLP
18201 Von Korman Avenue I Suite 1100 1 Irvine, CA 92612
Main:949.474.2020 1 Fax:949.263.5520
Independent Auditor's Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters Based on an Audit of the Air Ouality
Improvement Special Revenue Fund Performed
in Accordance with Government Auditing Standards
Honorable Mayor and Members of 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, 2024, 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 19, 2024.
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
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
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 19, 2024
Docusign Envelope ID: 11A96A78-34D4-4488-B1A8-D7DA505A8514
DavisFarr
CERTIFIED PUBLIC ACCOUNTANTS
Honorable Mayor and Members of City Council
City of Tustin
Tustin, California
Davis Farr LLP
18201 Von Korman 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, the aggregate discretely presented component units, each
major fund, and the aggregate remaining fund information of the City of Tustin (the
"City") as of and for the year ended June 30, 2024, and have issued our report
thereon dated December 19, 2024. 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 12, 2024, our responsibility,
as described by professional standards, is to form and express an opinion(s) 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.
Compliance with All Ethics Requirements Regarding Independence
The engagement team, others in our firm, as appropriate, our firm, and our network
firms 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.
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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 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.
The City's issuance of new debt. As a result, we evaluated the accuracy of
the City's accounting for its 2024 Water Revenue Bonds.
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. 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
the following:
• Judgements involving the calculation of the pension liability
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• Judgements involving the calculation of the other post -employment
benefit (OPEB) liability
• Judgements involving estimates of 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 the 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 or corrected misstatements as a result of our audit proceudres.
Uncorrected misstatements or matters underlying those uncorrected misstatements
could potentially cause future -period financial statements to be materially
misstated, even though the uncorrected misstatements are immaterial to the
financial statements currently under audit.
In addition, professional standards require
corrected misstatements that were brough
result of our audit procedures. There were
a result of our audit procedures.
Disagreements with Management
us to communicate to you all material,
t to the attention of management as a
no material corrected misstatements as
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.
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Representations Requested from Management
We have requested certain written representations from management, which are
included in the attached letter dated December 19, 2024.
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 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 representation, 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.
This report is intended solely for the information and use of the City Council, and
management of the City of Tustin and is not intended to be and should not be used by
anyone other than these specified parties.
Irvine, California
December 19, 2024