1 AGENDA
ALISO VIEJO CITY COUNCIL
WEDNESDAY, JANUARY 18, 2023
6:30 PM CLOSED SESSION
7:00 PM REGULAR MEETING
City Hall
Council Chambers
12 Journey
Aliso Viejo, CA
Mayor Richard W. Hurt
Mayor Pro Tem Mike Munzing
Councilmember Tiffany Ackley
Councilmember Ross Chun
Councilmember Max Duncan
SPECIAL NOTICE REGARDING COVID-19
On March 4, 2020, Governor Newsom proclaimed a State of Emergency in California as a result of the threat of COVID-19. On September 16, 2021, Assembly Bill 361 (AB 361) was signed by Governor Newsom, to allow for the City Council to attend City Council meetings telephonically and for the public to participate in the City Council meeting by electronic means.
Given the health risks associated with COVID-19, state and local officials are recommending measures to promote social distancing; therefore, the City of Aliso Viejo will not have the Council Chambers open to the public for this meeting. Members of the public may access the meeting live using any of the following sources:
• Cox Communications Channel 851
• AT&T U-Verse Channel 99
• Online at www.avcity.org/agendas
• Online via GoToWebinar at https://attendee.gotowebinar.com/register/8631847304192135003 Public comments may be submitted by calling (949) 425-2509 to leave a recorded message by 4:00 pm on the day of the meeting or via email to [email protected]. Alternatively, public comments may be submitted by logging onto the meeting through this link and using the “Raise Hand” feature:
https://attendee.gotowebinar.com/register/8631847304192135003. Comments are limited to three minutes each.
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WELCOME to the City of Aliso Viejo City Council meeting.
It is the City’s intention to comply with the Americans with Disabilities Act (ADA). If you need special assistance to participate in the meeting, the City will make reasonable arrangements to ensure accessibility and/or accommodations. [28 CFR 35.102-35.104 ADA Title II] Please contact the City Clerk’s Office at (949) 425-2505 at least 48 hours prior to the meeting.
Regular meetings of the City Council are held on the first and third Wednesday of the month at the City Hall Council Chambers, 12 Journey, Aliso Viejo. Copies of the agenda are available in the lobby at City Hall on the Thursday preceding a regularly scheduled City Council meeting. All communications received by the City regarding an agenda item have been included in the agenda materials. Supplemental documents relating to specific agenda items, including communications received after agenda delivery, are presented at the dais and in the Public Copy agenda binder at the time of the meeting. Supplemental documents are also available for review in the City Clerk’s office, 12 Journey, Aliso Viejo. For more information, please contact City Hall at (949) 425-2505.
This meeting will be broadcast live on Cox Communications Channel 851, AT&T U-Verse Channel 99 and the City's website. By attending the City Council Meeting, you are giving your permission to be televised. The Council Meetings are rebroadcast on Wednesday at 7:00 p.m. on Cox Communications Channel 851, AT&T U-Verse Channel 99, and can be viewed on the internet at www.avcity.org.
DAVID A. DOYLE SCOTT C. SMITH MITZI ORTIZ
CITY MANAGER CITY ATTORNEY CITY CLERK
PLEASE SILENCE ALL CELL PHONES AND OTHER
ELECTRONIC EQUIPMENT WHILE CITY COUNCIL IS IN SESSION
CALL TO ORDER: CONVENE SPECIAL MEETING
PUBLIC COMMENTS:
CLOSED SESSION:
CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION
Significant exposure to litigation pursuant to Government Code section 54956.9(d)(2) Number of potential cases: 1
CALL TO ORDER: CONVENE REGULAR MEETING
ROLL CALL
PLEDGE OF ALLEGIANCE:
REPORT FROM CLOSED SESSION:
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1. SPECIAL PRESENTATIONS:
1.1. RECOGNITION OF 2022 MAYOR ROSS CHUN
1.2. RECOGNITION OF ADMINISTRATIVE SERGEANT CHAD PHILLIPS
1.3. INTRODUCTION OF ADMINISTRATIVE SERGEANT RYAN DIERCKMAN
1.4. OCSD EMERGENCY EVACUATION SIREN SYSTEM VIDEO PRESENTATION
2. ADDITIONS, DELETIONS, REORDERING TO THE AGENDA:
3. COMMUNITY INPUT:
Members of the public wishing to address the City Council can submit public comments by calling (949) 425-2509 to leave a recorded by 4:00 pm on the day of the meeting or via email to [email protected]. Written comments will be read into the record and recorded messages will be aired during the meeting. Alternatively, public comments may be submitted by logging onto the meeting through this link and using the “Raise Hand” feature: https://attendee.gotowebinar.com/register/8631847304192135003. Comments are limited to three (3) minutes each. In compliance with the Brown Act, no discussion or action may be taken on comments received at this time, except the City Council may briefly respond to statements made or questions posed.
4. CONSENT CALENDAR:
All matters listed on the Consent Calendar will be acted upon by one vote unless members of the City Council, or staff request a matter to be discussed and/or removed from the Consent Calendar for separate action. Items removed from the Consent Calendar will be discussed and voted upon immediately following City Council action on the remainder of the Consent Calendar.
4.1. WAIVE THE READING OF ALL ORDINANCES AND RESOLUTIONS Recommended Action: Approve the reading by title only of all ordinances and resolutions wherein the titles appear on the public agenda; said titles shall be determined to have been read by title, and further reading is waived.
4.2. RESOLUTION EXTENSION AUTHORIZING VIRTUAL CITY COUNCIL MEETINGS PURSUANT TO ASSEMBLY BILL 361
Recommended Action: Move to reconfirm findings under Assembly Bill 361 and extend Resolution No. 2021-27 to continue virtual City Council meetings.
Staff Report
Attachment 1 - Resolution No. 2021-27
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4.3. APPROVAL OF MINUTES
Recommended Action: Approve the Minutes as submitted for the December 7, 2022 Regular Meeting and the December 14, 2022 Adjourned Regular Meeting.
Draft Minutes - December 7, 2022 Regular Meeting
Draft Minutes - December 14, 2022 Adjourned Regular Meeting
4.4. ACCOUNTS PAYABLE
Recommended Action:
1. Ratify accounts payable checks and electronic funds transfers issued December 8, 2022, in the amount of $1,881,455.71;
2. Ratify accounts payable checks and electronic funds transfers issued December 22, 2023, in the amount of $339,347.60; and
3. Ratify accounts payable checks and electronic funds transfers issued January 5, 2023, in the amount of $1,147,426.95.
Staff Report
Attachment 1 - Accounts Payable Report
4.5. TREASURER’S STATEMENT – OCTOBER AND NOVEMBER 2022
Recommended Action: Receive and file the October and November 2022 Treasurer’s Statement.
Staff Report
Attachment 1 - Oct 2022 Treasurer's Report
Attachment 2 - Nov 2022 Treasurer's Report
4.6. FISCAL YEAR 2021-22 ANNUAL COMPREHENSIVE FINANCIAL REPORT Recommended Action:
1. Receive and file the Annual Comprehensive Financial Report (ACFR) for the year ended June 30, 2022; and
2. Adopt a Resolution reappropriating certain fiscal year 2021-22 fund balances and amending the fiscal year 2022-23 budget.
Staff Report
Attachment 1 - FY 2021-22 ACFR
Attachment 2 - Statement on Auditing Standards 114 Letter Attachment 3 - Report on Internal Controls
Attachment 4 - Report on Appropriations Limit
Attachment 5 - Report on Treasurer's Monthly Statement
Attachment 6 - Resolution
4.7. RESOLUTION APPROVING THE ISSUANCE BY THE CALIFORNIA MUNICIPAL
FINANCE AUTHORITY OF THE PORTION OF REVENUE BONDS THE PROCEEDS OF WHICH ARE TO BE LOANED TO QCF/I, INC., A 501(c)(3) NONPROFIT HEALTHCARE
ORGANIZATION, AND USED TO ACQUIRE THE EXISTING FACILITY LOCATED AT 200 FREEDOM LANE, ALISO, VIEJO, CALIFORNIA; AND APPROVING CERTAIN
OTHER MATTERS RELATING THERETO
Recommended Action: Adopt a Resolution approving the issuance by the California Municipal Finance Authority of the portion of revenue bonds the proceeds of which are to be loaned to QCF/I, Inc., a 501 (c)(3) nonprofit healthcare organization, and used to 4 5
acquire the existing facility located at 200 Freedom Lane, Aliso, Viejo, California; and approving certain other matters relating thereto.
Staff Report
Attachment 1 - Resolution
4.8. AGREEMENT WITH WOOD RODGERS, INC. FOR STORM DRAIN CONDITION
ASSESSMENT SERVICES
Recommended Action:
1. Approve an agreement with Wood Rodgers, Inc. to perform storm drain condition assessment services; and
2. Authorize the City Manager to execute a professional services agreement with Wood Rodgers, Inc. for an amount of $286,000.
Staff Report
Attachment 1 - Agreement
4.9. LEASE WITH FAMILY ASSISTANCE MINISTRIES
Recommended Action:
1. Find that the lease of the City-owned property is exempt from the California Environmental Quality Act pursuant to State CEQA Guidelines Sections 15301 (Existing Facilities); and
2. Approve the lease agreement with Family Assistance Ministries (FAM) for the property and direct the City Manager to take all necessary steps to execute the lease of the property.
Staff Report
Attachment 1 - Lease Agreement
Attachment 2 - FAM Materials
4.10. RESOLUTION UPDATING SALARY SCHEDULE DUE TO MINIMUM WAGE INCREASE Recommended Action: Adopt a Resolution to update the salary schedule due to increase in minimum wage.
Staff Report
Attachment 1 - Resolution
Attachment 2 - Salary Schedule
5. PUBLIC HEARINGS:
5.1. FIVE-YEAR ECONOMIC DEVELOPMENT SUBSIDY REPORT
Recommended Action:
1. Conduct a public hearing; and
2. Approve the economic subsidy report.
Staff Report
Attachment 1 - Five-Year Subsidy Report
Attachment 2 - Agreement with EFUEL, LLC
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5.2. REQUEST TO APPROVE A SITE DEVELOPMENT PERMIT TO REMODEL THE TWOSTORY CLUBHOUSE BUILDING, UPGRADE THE OUTDOOR COMMON AREA
INCLUDING THE POOL AND ASSOCIATED LANDSCAPE/HARDSCAPE, DEMOLISH THE GUARD TOWER AT 5000 CITY LIGHTS DRIVE, AND DETERMINE THAT THE PROJECT IS CATEGORICALLY EXEMPT FROM CEQA (PA22-006 & SDP 2022- 00002).
Recommended Action:
1. Find that the request is exempt from the California Environmental Quality Act pursuant to State CEQA (California Environmental Quality Act) Guidelines Section 15301 (Existing Facilities); and
2. Adopt a Resolution approving a Site Development Permit (SDP) to remodel the twostory clubhouse building, pool, landscape, and hardscape including American with Disability Act (ADA) compliant upgrades and demolish the guard tower at 5000 City Lights Drive (PA22-006 & SDP-2022-00002).
Staff Report
Attachment 1 - Resolution
Attachment 2 - Project Description Letter
Attachment 3 - Project Plans
Attachment 4 - Presentation
5.3. CONDITIONAL USE PERMIT AND SITE DEVELOPMENT PERMIT TO ESTABLISH A NEW RESTAURANT SERVING FULL ALCOHOL AT 26611 ALISO CREEK ROAD,
SUITE A
Recommended Action: Open and continue the public hearing to a date uncertain.
Staff Report
6. DISCUSSION:
None.
7. CITY MANAGER' S REPORT:
8. ANNOUNCEMENTS / COUNCIL COMMENTS / COMMITTEE UPDATES:
9. ADJOURNMENT:
The next regularly scheduled City Council meeting is February 1, 2023. 6 City of Aliso Viejo
AGENDA ITEM
DATE: January 18, 2023
TO: Mayor and City Council
FROM: Mitzi Ortiz, Director of Government Services
SUBJECT: RESOLUTION EXTENSION AUTHORIZING VIRTUAL CITY COUNCIL MEETINGS PURSUANT TO ASSEMBLY BILL 361
Recommended Action:
Move to reconfirm findings under Assembly Bill 361 and extend Resolution No. 2021-27 to continue virtual City Council meetings.
Fiscal Impact:
None.
Background:
Assembly Bill 361 (“AB 361”), effective October 1, 2021, waives certain provisions of the Ralph M. Brown Act and allows legislative bodies to meet virtually until January 1, 2024, provided there is a state of emergency and either:
1. state or local officials have imposed or recommended measures to promote social distancing; or
2. the legislative body determines by majority vote that meeting in person would present imminent risks to the health and safety of attendees.
Under AB 361, the City is not required to allow public access at teleconference locations; however, the City must provide access to meetings via a call-in option or internet-based service option so that members of the public may address the City Council in real time.
Additionally, every 30 days the City Council must reconsider the state of emergency and make the determination to continue meeting virtually in accordance with AB 361.
Discussion:
On October 20, 2021, the City Council adopted Resolution No. 2021-27 authorizing virtual City Council meetings under AB 361, having found and determined that (1) a state of emergency related to COVID-19 is currently in effect; (2) state and local officials have 7
recommended measures to promote social distancing in connection with COVID-19; and (3) due to the COVID-19 emergency, meeting in person would present imminent risks to the health and safety of attendees. At subsequent meetings, the City Council has reconfirmed the findings and extended the resolution pursuant to AB 361.
Staff will agendize this matter for consideration at each City Council meeting until such time as the state of emergency has been terminated or the City Council determines that conditions no longer exist to prevent meeting safely in person.
Staff recommends that the City Council reconfirm the findings in Resolution No. 2021-27 continue to exist and approve the extension of the resolution.
Attachment:
1. Resolution No. 2021-27
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RESOLUTION NO. 2021-27
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ALISO
VIEJO, CALIFORNIA, AUTHORIZING VIRTUAL CITY COUNCIL
MEETINGS PURSUANT TO ASSEMBLY BILL 361
WHEREAS, the Aliso Viejo City Council (“Council”) is committed to preserving and nurturing public access and participation in meetings of the Council; and WHEREAS, with the exception of closed sessions, all meetings of the Council are open and public, as required by the Ralph M. Brown Act (Cal. Gov. Code 54950 – 54963), so that any member of the public may attend and participate in the Council’s meetings; and
WHEREAS, starting in March 2020, in response to the spread of COVID-19 in the State of California, the Governor issued a number of executive orders aimed at containing the COVID-19 virus; and
WHEREAS, among other things, these orders waived certain requirements of the Brown Act to allow legislative bodies to meet virtually; and WHEREAS, pursuant to the Governor’s executive orders, the Council has been holding virtual meetings during the pandemic in the interest of protecting the health and safety of the public, staff, and Councilmembers; and
WHEREAS, the Governor’s executive order related to the suspension of certain provisions of the Brown Act expires on September 30, 2021; and WHEREAS, on September 16, 2021 the Governor signed Assembly Bill 361 (in effect as of October 1, 2021 – Government Code Section 54953(e)), which allows legislative bodies to meet virtually provided there is a state of emergency, and either (1) state or local officials have imposed or recommended measures to promote social distancing; or (2) the legislative body determines by majority vote that meeting in person would present imminent risks to the health and safety of attendees; and WHEREAS, such conditions now exist in Orange County, specifically, a state of emergency has been proclaimed related to COVID-19, state and local officials are recommending measures to promote social distancing, and because of the ongoing threat of COVID-19, meeting in person would present imminent risks to the health and safety of attendees;
NOW, THEREFORE, BE IT RESOLVED BY THE ALISO VIEJO CITY COUNCIL AS FOLLOWS:
Section 1. Recitals. The Recitals set forth above are true and correct and are incorporated into this Resolution by this reference. 9
Section 2. Remote Teleconference Meetings. Consistent with the provisions of Government Code Section 54953(e), the Council finds and determines that (1) a state ofemergency related to COVID-19 is currently in effect; (2) state and local officials have recommended measures to promote social distancing in connection with COVID-19; and (3) due to the COVID-19 emergency, meeting in person would present imminent risks to the health and safety of attendees. Based on such facts, findings and determinations, the Council authorizes staff to conduct remote teleconference meetings of the Council under the provisions of Government Code Section 54953(e).
Section 3. Effective Date of Resolution. This Resolution shall take effect upon adoption and shall be effective for 30 days unless earlier extended by a majority vote of the Council in accordance with Section 4 of this Resolution.
Section 4. Extension by Motion. The Council may extend the application of this Resolution by motion and majority vote by up to 30 days at a time, provided that it makes all necessary findings consistent with and pursuant to the requirements of Section 54953(e)(3).
PASSED, APPROVED AND ADOPTED this 20th day of October, 2021.
Tiffany Ackley
Mayor
APPROVED AS TO FORM: ATTEST:
Scott C. Smith Mitzi Ortiz, MMC
City Attorney City Clerk
Mitzi Ortiz, MMC
City Clerk
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STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.
CITY OF ALISO VIEJO )
I, MITZI ORTIZ, City Clerk of the City of Aliso Viejo, California, DO HEREBY CERTIFY that foregoing Resolution No. 2021-27 was duly passed and adopted by the City Council of the City of Aliso Viejo at their regular meeting held on the 20th day of October 2021, by the following roll call vote, to wit:
AYES: Mayor Ackley, Mayor Pro Tem Chun, Councilmembers Harrington, Hurt and Munzing
NOES: None
ABSENT: None
MITZI ORTIZ, MMC
CITY CLERK
(SEAL)
MITZI ORTIZ, MMC
CITY CLERK
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CITY OF ALISO VIEJO
CITY COUNCIL MINUTES
REGULAR MEETING
December 7, 2022, 7:00 P.M.
Council Chambers, City Hall, 12 Journey
Aliso Viejo, California
City Council conducted this meeting in accordance with California Government Code Section 54953(e)(2) and COVID-19 pandemic protocols.
CALL TO ORDER: City Clerk Mitzi Ortiz called the Regular Meeting of the City Council of the City of Aliso Viejo to order at 7:00 p.m.
ROLL CALL:
PRESENT: NONE
ABSENT: MAYOR ROSS CHUN
MAYOR PRO TEM RICHARD HURT
COUNCILMEMBER TIFFANY ACKLEY
COUNCILMEMBER DAVID C. HARRINGTON
COUNCILMEMBER MIKE MUNZING
STAFF PRESENT: MITZI ORTIZ, CITY CLERK
ISAAC AZIZ, INFORMATION TECHNOLOGY MANAGER
ADJOURNMENT: The following agenda item will be adjourned to Wednesday, December 14, 2022 at 7:00 p.m.
SECOND READING AND ADOPTION OF ORDINANCES REGARDING A SPECIFIC
PLAN AMENDMENT AND A DEVELOPMENT AGREEMENT FOR THE COMMONS
SPECIFIC PLAN
Recommended Action:
1. Find that the Project is exempt from the California Environmental Quality Act pursuant to State CEQA Guidelines Section 15332 (Infill Development);
2. Give second reading and adopt an Ordinance entitled: AN ORDINANCE OF THE
CITY COUNCIL OF THE CITY OF ALISO VIEJO, CALIFORNIA, TO AMEND SPECIFIC PLAN NO. 2 FOR THE COMMONS AT ALISO VIEJO TOWN CENTER
AND DETERMINE THE PROJECT TO BE CATEGORICALLY EXEMPT FROM CEQA UNDER CLASS 32 (PLANNING APPLICATION SP-22-00001); and
3. Give second reading and adopt Ordinance entitled: AN ORDINANCE OF THE CITY
COUNCIL OF THE CITY OF ALISO VIEJO, CALIFORNIA, APPROVING A
DEVELOPMENT AGREEMENT BETWEEN THE CITY OF ALISO VIEJO AND VALUEROCK ALISO VIEJO, LLC FOR SPECIFIC PLAN NO. 2 (THE COMMONS AT 12 2
ALISO VIEJO TOWN CENTER) PURSUANT TO CALIFORNIA GOVERNMENT CODE SECTION 65864 ET SEQ. AND DETERMINE THE PROJECT TO BE CATEGORICALLY EXEMPT FROM CEQA UNDER CLASS 32 (PLANNING APPLICATION DA-22-00001).
City Clerk Mitzi Ortiz adjourned the meeting at 7:01 p.m. due to a lack of quorum to Wednesday, December 14, 2022 at 7:00 p.m.
Respectfully submitted: Approved by:
________________________ ________________________
MITZI ORTIZ, MMC ROSS CHUN
CITY CLERK MAYOR
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Adjourned Regular Meeting Minutes
CITY OF ALISO VIEJO
CITY COUNCIL MINUTES
ADJOURNED REGULAR MEETING
DECEMBER 14, 2022, 7:00 PM
Council Chambers, City Hall, 12 Journey
Aliso Viejo, California
CALL TO ORDER: Mayor Chun called the Adjourned Regular Meeting of the City Council of the City of Aliso Viejo to order at 7:03 p.m.
ROLL CALL
PRESENT: MAYOR ROSS CHUN
MAYOR PRO TEM RICHARD HURT
COUNCILMEMBER TIFFANY ACKLEY
COUNCILMEMBER DAVID C. HARRINGTON
COUNCILMEMBER MIKE MUNZING
ABSENT: NONE
STAFF PRESENT: DAVID A. DOYLE, CITY MANAGER
SCOTT C. SMITH, CITY ATTORNEY
MITZI ORTIZ, CITY CLERK
ANN EIFERT, FINANCIAL SERVICES DIRECTOR
SHAUN PELLETIER, PUBLIC WORKS DIRECTOR
SO KIM, COMMUNITY DEVELOPMENT DIRECTOR
LIZZY MENDOZA, RECREATION & COMMUNITY SERVICES MANAGER
ISAAC AZIZ, INFORMATION TECHNOLOGY MANAGER
CAPT. SCOTT MERRILL, CHIEF OF POLICE SERVICES
PLEDGE OF ALLEGIANCE: Councilmember Harrington led the pledge of allegiance.
1. POST ELECTION MATTERS:
1.1. CERTIFICATION OF OFFICIAL ELECTIONS RESULTS
City Clerk Mitzi Ortiz provided an overview.
Recommended Action: Adopt Resolution No. 2022-32 reciting the facts of the General Municipal Election held on November 8, 2022, declaring the result and such other matters as provided by law.
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Adjourned Regular Meeting Minutes
Motion: Councilmember Munzing moved and Mayor Pro Tem Hurt seconded to approve the recommended action. Motion carried 5-0.
1.2. RECOGNITION OF OUTGOING COUNCILMEMBER DAVID C. HARRINGTON Mayor Chun presented a tile plaque and recognition on behalf of the City. Councilmember Harrington expressed his appreciation to City staff, Council colleagues, and residents.
MAYOR CHUN RECESSED THE MEETING AT 7:13 P.M. AND RECONVENED AT 7:35 P.M.
1.3. OATH OF OFFICE CEREMONY AND INSTALLATION OF COUNCILMEMBER TIFFANY ACKLEY
Laurel Ackley, accompanied by Jared and Keith Ackley, administered the Oath of Office to Councilmember Tiffany Ackley.
1.4. OATH OF OFFICE CEREMONY AND INSTALLATION OF COUNCILMEMBER MAX DUNCAN
Allison and Gavin Duncan, accompanied by Monica Duncan, administered the Oath of Office to Councilmember Max Duncan.
Councilmember Duncan joined the dais for the remainder of the meeting.
2. ADDITIONS, DELETIONS, REORDERING TO THE AGENDA:
None.
3. COMMUNITY INPUT:
None.
4. CONSENT CALENDAR:
Unless otherwise indicated below, the following pertains to all items on the Consent Calendar.
Motion: Mayor Pro Tem Hurt moved and Councilmember Munzing seconded to approve the recommended actions. Motion carried 5-0.
4.1. WAIVE THE READING OF ALL ORDINANCES AND RESOLUTIONS Recommended Action: Approve the reading by title only of all ordinances and resolutions wherein the titles appear on the public agenda; said titles shall be determined to have been read by title, and further reading is waived. 15
Adjourned Regular Meeting Minutes
4.2. APPROVAL OF MINUTES
Recommended Action: Approve the Minutes as submitted for the November 16, 2022 Regular Meeting.
4.3. SECOND READING AND ADOPTION OF ORDINANCES REGARDING A SPECIFIC
PLAN AMENDMENT AND A DEVELOPMENT AGREEMENT FOR THE COMMONS
SPECIFIC PLAN
Recommended Action:
1. Find that the Project is exempt from the California Environmental Quality Act pursuant to State CEQA Guidelines Section 15332 (Infill Development);
2. Give second reading and adopt Ordinance No. 2022-233 entitled: AN ORDINANCE
OF THE CITY COUNCIL OF THE CITY OF ALISO VIEJO, CALIFORNIA, TO AMEND SPECIFIC PLAN NO. 2 FOR THE COMMONS AT ALISO VIEJO TOWN CENTER
AND DETERMINE THE PROJECT TO BE CATEGORICALLY EXEMPT FROM CEQA UNDER CLASS 32 (PLANNING APPLICATION SP-22-00001); and
3. Give second reading and adopt Ordinance No. 2022-234 entitled: AN ORDINANCE
OF THE CITY COUNCIL OF THE CITY OF ALISO VIEJO, CALIFORNIA,
APPROVING A DEVELOPMENT AGREEMENT BETWEEN THE CITY OF ALISO VIEJO AND VALUEROCK ALISO VIEJO, LLC FOR SPECIFIC PLAN NO. 2 (THE
COMMONS AT ALISO VIEJO TOWN CENTER) PURSUANT TO CALIFORNIA GOVERNMENT CODE SECTION 65864 ET SEQ. AND DETERMINE THE PROJECT TO BE CATEGORICALLY EXEMPT FROM CEQA UNDER CLASS 32 (PLANNING APPLICATION DA-22-00001).
4.4. ACCOUNTS PAYABLE
Recommended Action:
1. Ratify accounts payable checks and electronic funds transfers issued October 27, 2022, in the amount of $725,675.47;
2. Ratify accounts payable checks and electronic funds transfers issued November 10, 2022, in the amount of $1,238,790.98; and
3. Ratify accounts payable checks and electronic funds transfers issued November 22, 2022, in the amount of $743,562.60.
4.5. MEASURE M2 EXPENDITURE REPORT
Recommended Action: Adopt Resolution No. 2022-33 approving the City’s annual Measure M2 expenditure report for fiscal year ending June 30, 2022.
4.6 RESOLUTION EXTENSION AUTHORIZING VIRTUAL CITY COUNCIL MEETINGS PURSUANT TO ASSEMBLY BILL 361
Recommended Action: Move to reconfirm findings under Assembly Bill 361 and extend Resolution No. 2021-27 to continue virtual City Council meetings. 16
Adjourned Regular Meeting Minutes
5. PUBLIC HEARINGS:
None.
6. DISCUSSION:
6.1. CITY COUNCIL REORGANIZATION
City Clerk Mitzi Ortiz provided the staff report and opened the floor to accept nominations for Mayor. Councilmember Munzing nominated Mayor Pro Tem Hurt. There were no further nominations for Mayor and nominations were closed.
Motion: Nomination of Mayor Pro Tem Hurt to serve as Mayor for 2023. Motion carried 5-0.
City Clerk Mitzi Ortiz opened the floor to accept nominations for Mayor Pro Tem.
Councilmember Duncan nominated Councilmember Munzing. There were no further nominations for Mayor Pro Tem and nominations were closed.
Motion: Nomination of Councilmember Munzing to serve as Mayor Pro Tem for 2023.
Motion carried 5-0.
6.2. CITY COUNCIL APPOINTMENTS TO SERVE ON REGIONAL BOARDS,
COMMISSIONS AND COMMITTEES
City Clerk Mitzi Ortiz presented the staff report.
Recommended Action:
1. Review and update Council appointment list to regional boards, commissions, and committees; and
2. If needed, adopt a Resolution designating and appointing the City’s representative to the Orange County Fire Authority Board of Directors.
Motion: Councilmember Ackley moved and Councilmember Munzing seconded to approve the appointment list as presented. Motion carried 5-0.
7. CITY MANAGER' S REPORT:
City Manager David Doyle expressed appreciation to City staff and volunteers for the All is Bright Holiday Celebration and Tree Lighting Ceremony; and extended well wishes for the holiday season.
8. ANNOUNCEMENTS / COUNCIL COMMENTS / COMMITTEE UPDATES:
Councilmember Munzing:
Extended well wishes for the holiday season
17
Adjourned Regular Meeting Minutes
Mayor Pro Tem Hurt:
Expressed appreciation to Council colleagues, staff, and wife for their support Congratulated Councilmember Ackley and Councilmember Duncan Requested announcement from Captain Merrill on available mental health resources Councilmember Duncan:
Expressed appreciation to his family, residents, and Council for their support Councilmember Ackley:
Attended All is Bright Holiday Celebration and Tree Lighting Ceremony Encouraged residents to celebrate the holidays safely Mayor Chun:
Expressed appreciation to Council, staff, residents, and community partners
9. ADJOURNMENT: Mayor Chun adjourned the meeting at 7:55 p.m. to the regularly scheduled meeting of December 21, 2022.
Respectfully submitted: Approved by:
________________________ ________________________
MITZI ORTIZ, MMC ROSS CHUN
CITY CLERK MAYOR
18 City of Aliso Viejo
AGENDA ITEM
DATE: January 18, 2023
TO: Mayor and City Council
FROM: Ann Eifert, Director of Financial Services
SUBJECT: ACCOUNTS PAYABLE
Recommended Actions:
1. Ratify accounts payable checks and electronic funds transfers issued December 8, 2022, in the amount of $1,881,455.71;
2. Ratify accounts payable checks and electronic funds transfers issued December 22, 2023, in the amount of $339,347.60; and
3. Ratify accounts payable checks and electronic funds transfers issued January 5, 2023, in the amount of $1,147,426.95.
Fiscal Impact:
Expenditures in the amount of $3,368,230.26.
Background:
The City issues accounts payable checks on bi-weekly basis and presents it to City Council for ratification at its next regularly scheduled City Council meeting.
Discussion:
The attached register containing checks and electronic funds transfers dated December 8, 2022, through January 5, 2023, for a total of $3,368,230.26 is being presented for ratification. All payments have been made in compliance with the City’s purchasing policy and procedures. Payments have been reviewed and approved by the appropriate departmental staff. The issued accounts payable checks and electronic funds transfers have been reviewed and deemed in accordance with the fiscal year budget by the Director of Financial Services.
Attachment:
1. Accounts Payable Report
19 20
21 22
23 24
25 26
27 28
29 30
31 32
33 34
City of Aliso Viejo
AGENDA ITEM
DATE: January 18, 2023
TO: Mayor and City Council
FROM: Ann Eifert, Director of Financial Services/City Treasurer SUBJECT: TREASURER’S STATEMENT – OCTOBER AND NOVEMBER 2022 Recommended Action:
Receive and file the October and November 2022 Treasurer’s Statement.
Fiscal Impact:
No Fiscal Impact.
Background:
Per City policy, the Finance Department presents the monthly Treasurer’s Statement for the City Council’s review. This statement shows the cash balances for the various funds, with a breakdown of bank account balances, investment account balances and the effective yield earned from investments.
Discussion:
The City’s portfolio consists of investments in Certificates of Deposits, US Treasuries, US Federal Agencies, Corporate Bonds, and Local Agency Investment Fund (LAIF). All funds invested with LAIF are available for withdrawal within 24 hours.
The Treasurer’s Statement provides information regarding the City’s investment portfolio and activity during the reporting month. The City’s investment portfolio is in compliance with all government codes as well as the City’s investment policy. Interest is credited to the City’s bank account monthly and allocated among the City’s funds. The current portfolio provides sufficient cash flow liquidity to meet the upcoming operating expenses and spending requirements for the next 6 months.
Attachments:
1. October 2022 Treasurer’s Statement
2. November 2022 Treasurer’s Statement
35 TREASURER'S MONTHLY CASH STATEMENT
BEGINNING TRANSFERS ENDING
BALANCE RECEIPTS DISBURSEMENTS IN (OUT) BALANCE
GENERAL FUND 5,766,102.31 $ 1,978,965.96 $ 4,056,955.11 $ 3,688,113.16 $ TCRF 72,729.31 $ 72,729.31
GAS TAX FUND 823,100.04 $ 115,334.33 128,731.75 809,702.62 MEASURE M 1,534,834.98 $ - 1,694.00 1,533,140.98
SB1-RMRA $ 97,241.89 (354,443.59) (257,201.70)
PUBLIC SAFETY GRANTS $ 184,605.80 11,809.26 28,147.63 200,944.17 (1) AIR QUALITY IMPRVMNT FD 1,098,588.59 $ 1,098,588.59
INTEGRATED WASTE MGMT FD 82,975.21 $ 82,975.21
OTHER GRANTS $ (154,028.55) (154,028.55)
TECHNOLOGY GRANT 228,781.82 $ 3,456.54 225,325.28
DEVELOPMENT IMPACT 1, $ 167.24 367,316.01 1,367,148.77
FEDERAL GRANTS 239,663.99 $ 401,841.64 (162,177.65)
CITY FACILITY - AV CTR 179,758.92 $ 179,758.92
CITY FACILITY - AQUATIC CTR 74,329.06 $ 62,757.44 131,417.19 5,669.31 STREET IMPROVEMENTS 118,886.23 $ 19,541.70 441,434.98 (303,007.05) (2) CAPITAL IMPROVEMENTS - $ - 10,079.20 (10,079.20) (2)
STORM WATER - $ 2,401.34 1,896.00 505.34 (2)
COP CAPITAL - $ - (2)
COP $ (4,819.40) (4,819.40)
AV RANCH FOUNDATION 100.00 $ 100.00
CFD 2005-01 $ 11.98 (3,558.00) 3,877.55 (7,423.57)
RENEWABLE FARMS 35,757.85 $ 49,428.45 46,418.63 38,767.67 COMMUNITY TRUST 7,540.68 $ 7,540.68
TOTALS 11,298,221.26 $ 2,353,830.72 $ 5,239,779.09 $ - $ 8,412,272.89 $ SUMMARY OF CASH:
DEMAND DEPOSITS: GENERAL ACCOUNT 1,582,986.91 $
SAVINGS ACCOUNT: MONEY MARKET 25,725.31 $
INVESTMENTS: LOCAL AGENCY INVESTMENT FD 6,803,560.67 $
TOTAL CASH 8,412,272.89 $
Years to Maturity for October 2022 1.23
Weighted Average Yield for October 2022 2.260%
All investments are placed in accordance with the City of Aliso Viejo's Investment Policy.
The above summary provides sufficient cash flow liquidity to meet the next six month's estimated expenditures.
Other monies held include Cash with Fiscal Agent, Investments, Payroll and AV Center. $ 31,157,452.42 Cash With Fiscal Agent COPS/CFD 2005-01 3,147,897.91
Cash With Investment Advisor City Investments 26,042,061.10 AV Center 1,763,646.80
PR Account 201,041.61
Petty Cash 2,805.00
GRAND TOTAL OF CITY FUNDS 39,569,725.31 $
(1) Public Safety Grant includes the MDC and PVS Program Costs budgeted with SLESF funds. (2) Transfers in and out are done on a quarterly basis.
Street Improvements include the Slurry Seal, Traffic Management and Street Improvement Projects.
Capital Improvements include park and AV Ranch improvement projects.
Storm Water includes the Dairy Fork and Wood Canyon Emergent Wetland Project.
CITY OF ALISO VIEJO
October 31, 2022
36 Portfolio Summary
City of Aliso Viejo October 31, 2022
Investments Par Value Book Value
% of
Portfolio Maturity YTM
Days to
Market Value
Book
Certificates of Deposit 5,635,000.00 5,275,537.47 5,628,671.65 17.14 893 1.75 Corporate Bonds 2,000,000.00 1,910,374.50 2,000,620.00 6.09 607 1.93 LAIF 6,803,560.67 6,803,560.67 6,803,560.67 20.71 1 1.77 U.S. Agencies 9,235,000.00 8,983,184.80 9,198,016.05 28.00 410 2.48 U.S. Treasuries 9,500,000.00 9,117,147.00 9,214,753.42 28.05 508 2.78 33,173,560.67 32,089,804.44 32,845,621.79 100.00 448 2.26 Investments
Total Earnings October 31 Month Ending Fiscal Year To Date Current Year 22,924.26 141,718.30
Average Daily Balance 32,598,597.87 33,127,239.43
Book Rate of Return 0.83% 1.27%
Run Date: 11/18/2022 - 2:37 PM
Non-Amortizing
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42 LAIF Regular Monthly Statement
https://laifms.treasurer.ca.gov/RegularStatement.aspx
Local Agency Investment Fund
P.O. Box 942809
Sacramento, CA 94209-0001
(916) 653-3001
CITY OF ALISO VIEJO
DIRECTOR OF FINANCIAL SVCS/ CITY TREAS
12 JOURNEY, #100
ALISO VIEJO, CA 92656
Account Number: 98-30-007
October 2022 Statement
Effective
Date
Transaction
Date
Tran
Type Confirm
Number
Web
Confirm
Number Authorized Caller Amount
10/11/2022 10/11/2022 RW 1714237 1674556 ANN EIFERT -1,000,000.00 10/14/2022 10/13/2022 QRD 1716398 N/A SYSTEM 30,716.86
Account Summary
Total Deposit: 30,716.86 Beginning Balance: 7,772,843.81 Total Withdrawal: -1,000,000.00 Ending Balance: 6,803,560.67 43 October 1.772
September 1.513
August 1.276
0.00003699565555327
0.980760962
LAIF Earnings Ratio(2):
LAIF Fair Value Factor(1):
PMIA Daily(1): 1.63%
LAIF Apportionment Rate 1.35 (2):
PMIA Quarter to Date(1): 1.29%
PMIA Average Life 304 (1):
Treasuries
66.57%
Agencies
19.19%
Certificates of
Deposit/Bank Notes
6.51%
Time
Deposits
2.30%
Commercial
Paper
5.02%
Corporate
Bonds
0.24%
Loans
0.17%
Notes: The apportionment rate includes interest earned on the CalPERS Supplemental Pension Payment pursuant to Government Code 20825 (c)(1) and interest earned on the Wildfire Fund loan pursuant to Public Utility Code 3288 (a).
Source:
(1) State of California, Office of the Treasurer
(2) State of Calfiornia, Office of the Controller
PMIA Average Monthly
Effective Yields(1)
PMIA/LAIF Performance Report
as of 11/16/22
Daily rates are now available here. View PMIA Daily Rates Quarterly Performance
Quarter Ended 09/30/22
Chart does not include $3,715,000.00 in mortgages, which equates to 0.002%. Percentages may not total 100% due to rounding.
Pooled Money Investment Account
Monthly Portfolio Composition (1)
10/31/22
$215.3 billion
44 TREASURER'S MONTHLY CASH STATEMENT
BEGINNING TRANSFERS ENDING
BALANCE RECEIPTS DISBURSEMENTS IN (OUT) BALANCE
GENERAL FUND 3,688,113.16 $ 3,946,889.05 $ 4,092,945.95 $ 3,542,056.26 $ TCRF 72,729.31 $ 72,729.31
GAS TAX FUND 809,702.62 $ 149,220.09 94,060.55 864,862.16 MEASURE M 1,533,140.98 $ 163,793.53 1,890.00 1,695,044.51 SB1-RMRA (257,201.70) $ 99,719.22 (157,482.48)
PUBLIC SAFETY GRANTS 200,944.17 $ 7,948.00 192,996.17 (1) AIR QUALITY IMPRVMNT FD 1,098,588.59 $ 1,098,588.59
INTEGRATED WASTE MGMT FD 82,975.21 $ 82,975.21
OTHER GRANTS (154,028.55) $ (154,028.55)
TECHNOLOGY GRANT 225,325.28 $ 24,721.23 1,243.21 248,803.30 DEVELOPMENT IMPACT 1,367,148.77 $ 14,935.49 1,352,213.28 FEDERAL GRANTS (162,177.65) $ (162,177.65)
CITY FACILITY - AV CTR 179,758.92 $ 179,758.92
CITY FACILITY - AQUATIC CTR 5,669.31 $ 30,864.97 76,981.16 (40,446.88) STREET IMPROVEMENTS (303,007.05) $ 76,944.23 (379,951.28) (2) CAPITAL IMPROVEMENTS (10,079.20) $ 8,640.00 (18,719.20) (2) STORM WATER 505.34 $ 505.34 (2)
COP CAPITAL - $ - (2)
COP (4,819.40) $ (4,819.40)
AV RANCH FOUNDATION 100.00 $ 100.00
CFD 2005-01 (7,423.57) $ 318,577.64 319,359.62 (8,205.55) RENEWABLE FARMS 38,767.67 $ 28,152.25 25,797.50 41,122.42 COMMUNITY TRUST 7,540.68 $ 7,540.68
TOTALS 8,412,272.89 $ 4,761,937.98 $ 4,720,745.71 $ - $ 8,453,465.16 $ SUMMARY OF CASH:
DEMAND DEPOSITS: GENERAL ACCOUNT 2,374,162.27 $
SAVINGS ACCOUNT: MONEY MARKET 25,742.22 $
INVESTMENTS: LOCAL AGENCY INVESTMENT FD 6,053,560.67 $
TOTAL CASH 8,453,465.16 $
Years to Maturity for November 2022 1.22
Weighted Average Yield for November 2022 2.490%
All investments are placed in accordance with the City of Aliso Viejo's Investment Policy.
The above summary provides sufficient cash flow liquidity to meet the next six month's estimated expenditures.
Other monies held include Cash with Fiscal Agent, Investments, Payroll and AV Center. $ 31,037,972.89 Cash With Fiscal Agent COPS/CFD 2005-01 3,467,031.00
Cash With Investment Advisor City Investments 25,539,239.01 AV Center 1,791,572.80
PR Account 237,593.08
Petty Cash 2,537.00
GRAND TOTAL OF CITY FUNDS 39,491,438.05 $
(1) Public Safety Grant includes the MDC and PVS Program Costs budgeted with SLESF funds. (2) Transfers in and out are done on a quarterly basis.
Street Improvements include the Slurry Seal, Traffic Management and Street Improvement Projects.
Capital Improvements include park and AV Ranch improvement projects.
Storm Water includes the Dairy Fork and Wood Canyon Emergent Wetland Project.
CITY OF ALISO VIEJO
November 30, 2022
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51 LAIF Regular Monthly Statement
https://laifms.treasurer.ca.gov/RegularStatement.aspx 1/1 Local Agency Investment Fund
P.O. Box 942809
Sacramento, CA 94209-0001
(916) 653-3001
CITY OF ALISO VIEJO
DIRECTOR OF FINANCIAL SVCS/ CITY TREAS
12 JOURNEY, #100
ALISO VIEJO, CA 92656
Account Number: 98-30-007
November 2022 Statement
Effective
Date
Transaction
Date
Tran
Type Confirm
Number
Web
Confirm
Number Authorized Caller Amount
11/18/2022 11/18/2022 RW 1718237 1678574 ANN EIFERT -750,000.00 Account Summary
Total Deposit: 0.00 Beginning Balance: 6,803,560.67
Total Withdrawal: -750,000.00 Ending Balance: 6,053,560.67 52 November 2.007
October 1.772
September 1.513
0.00003699565555327
0.980760962
LAIF Earnings Ratio(2):
LAIF Fair Value Factor(1):
PMIA Daily(1): 1.63%
LAIF Apportionment Rate 1.35 (2):
PMIA Quarter to Date(1): 1.29%
PMIA Average Life 304 (1):
Treasuries
66.35%
Agencies
19.46%
Certificates of
Deposit/Bank Notes
6.63%
Time
Deposits
2.58%
Commercial
Paper
4.54%
Corporate
Bonds
0.26%
Loans
0.18%
Notes: The apportionment rate includes interest earned on the CalPERS Supplemental Pension Payment pursuant to Government Code 20825 (c)(1) and interest earned on the Wildfire Fund loan pursuant to Public Utility Code 3288 (a).
Source:
(1) State of California, Office of the Treasurer
(2) State of Calfiornia, Office of the Controller
PMIA Average Monthly
Effective Yields(1)
PMIA/LAIF Performance Report
as of 12/14/22
Daily rates are now available here. View PMIA Daily Rates Quarterly Performance
Quarter Ended 09/30/22
Chart does not include $3,542,000.00 in mortgages, which equates to 0.002%. Percentages may not total 100% due to rounding.
Pooled Money Investment Account
Monthly Portfolio Composition (1)
11/30/22
$203.7 billion
53 City of Aliso Viejo
AGENDA ITEM
DATE: January 18, 2023
TO: Mayor and City Council
FROM: Ann Eifert, Director of Financial Services
SUBJECT: FISCAL YEAR 2021-22 ANNUAL COMPREHENSIVE FINANCIAL REPORT
Recommended Actions:
1. Receive and file the Annual Comprehensive Financial Report (ACFR) for the year ended June 30, 2022; and
2. Adopt a Resolution reappropriating certain fiscal year 2021-22 fund balances and amending the fiscal year 2022-23 budget.
Fiscal Impact:
At the end of fiscal year 2021-22, the net change in fund balance for the City’s General Fund totaled $3,449,005. The reappropriation of unspent funds will reduce the fund balance in the General Fund by $123,000. The reappropriation of CDBG-CARES Act grant funds in the amount of $239,983 will be fully reimbursed through the grant.
Background:
The Comprehensive Annual Financial Report was prepared in conformity with Generally Accepted Accounting Principles (GAAP) and audited by independent certified public accountants at Rogers, Anderson, Malody & Scott, LLP (RAMS). The goal of the audit is to provide reasonable assurance that the City’s financial statements are free from material misstatement.
As part of the audit, RAMS issues the following reports:
Report on Internal Control Over Financial Reporting and on Compliance and Other Matters
Statement on Auditing Standards (SAS) 114 Letter
Report on Agreed-Upon Procedures Applied to the Appropriations Limit Report on Agreed-Upon Procedures for the City’s Treasurer’s Monthly Report 54
Discussion:
The annual audit of the financial statements was completed on December 15, 2022. The financial statements were prepared in accordance with all applicable accounting standards. The independent auditor has issued an unmodified opinion of the City’s financial statements for the fiscal year ended June 30, 2022, which provides reasonable assurance that the financial statements of the City are presented fairly, in all material respects, in accordance with generally accepted accounting principles.
In addition to reviewing and examining the City’s financial records, the auditors also reviewed the internal control framework of the City. Internal control is a set of activities, rules, and procedures implemented by the City to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud. There were no findings cited by the auditors during their review of the City internal control over its financial reporting. Additionally, the auditors issued their reports on the agreed upon procedures for the City’s monthly treasurer’s report and the City’s appropriations limit worksheets.
Government-wide Financials
Fiscal year 2021-22 reflects significant economic recovery from the pandemic and the effects of stay-at-home orders, which drastically impacted the City’s sales and transient occupancy taxes in the prior year. The City’s total revenues from all sources were $31,197,957 while the total cost of all programs and services was $26,917,782.
Compared to fiscal year 2020-21 total revenues were up 27.5%, primarily due to increases in sales tax, transient occupancy tax, recreation, and grants. Some of the financial highlights at the government-wide level are:
The City increased its overall net position by $4,280,175 or 3.2% for a total net position of $136,113,993 primarily as a result of an increase in revenues, including federal stimulus funds, and lower than expected expenses during the fiscal year ending June 30, 2022.
The City’s overall fund balance increased by $3,702,578 for a total of $36,017,932 for all funds.
Federal stimulus funds from the American Rescue Plan Act were received in the amount of $2,839,053.
Charges for services saw an increase of 43.5% as a result of the opening of the Aliso Viejo Ranch, resuming recreation classes, aquatics, and higher demand for the Aliso Viejo Center.
Gas taxes and funds from the Road Maintenance and Rehabilitation Account (RMRA or also referred to as SB1) increased due to higher gas consumption in fiscal year 2021-22. Gas taxes totaled $1,155,022 and expenses totaled $1,162,911, which funded road maintenance and rehabilitation. RMRA funding totaled $1,014,000 and expenditures in the amount $944,154 funded street rehabilitation projects along Deerhurst/Foxborough and Aliso Creek (Wolverine to Alicia).
55
Total Capital Improvement projects totaling $2,096,842 was expended through a combination of special revenue funds, such as gas taxes, RMRA, and grants, as well as the General Fund. Street and traffic capital projects totaled $1,500,043, facility and building improvements in the amount of $572,107, and storm water projects totaling $24,692. Of the total expenses, the General Fund contributed $319,433 for storm water projects, facility improvements at the Aliso Viejo Ranch and Aquatic Center, and implementation of permitting software.
General Fund Highlights
Revenues: Excluding interfund transfers, General Fund revenues increased by $3,261,796 million or 18.5% for the year and again is attributed to higher sales and transient occupancy taxes. The City’s main revenue sources are property tax, sales tax, transient occupancy taxes, and franchise fees. Property taxes have been the most reliable and stable local government revenue for decades and continues to be the City’s largest revenue source at $9,211,738 this year. Property taxes were up 2.6% from the prior year and are expected to have similar growth next year.
Sales tax, the City’s second largest revenue source, increased by $2,593,024 to $6,117,932, representing a 73.6% increase compared to fiscal year 2020-21. Reopening of businesses, people returning to work, higher gas prices, and inflation all contributed to the better-than-expected sales tax revenue. Fuel and service stations make up 30% of the City’s sales tax revenues, followed by the City’s share of the County pool receipts.
The hardest hit revenue category from the pandemic was transient occupancy taxes.
Tourism and large gatherings such as conventions and conferences came to a halt during the pandemic and caused transient occupancy taxes to drop by more than 50% in fiscal year 2020-21. Fiscal year 2021-22 saw a rebounding in transient occupancy taxes to $1,413,074, an increase of almost 100% from the prior year. Although transient occupancy taxes were strong, revenue in fiscal year 2021-22 was still below the highs seen in fiscal year 2017-18 in the city.
Franchise fees increased slightly by 4.3% to $1,744,239 as a result of higher receipts from utility franchises as well as a double payment from the County of Orange, OC Waste and Recycling Waste Disposal Agreement for both fiscal year 2020-21 and 2021-22.
Expenditures: Actual expenditures incurred were $1,993,126 lower than the final yearend budget as a result of vacancy credits provided by the Orange County Sheriff’s Department due to lower staffing levels, part-time vacancies in recreation, lower consulting costs for building and planning, and delayed capital improvement projects at the Ranch.
Ending Fund Balance: Ending Fund Balance for the year increased by $3,449,005 or
12.7% from fiscal year 2020-21, for a total ending balance of $30,580,168. Included in the fund balance are non-spendable funds of $81,267 and assigned funds of $25,983,015 for contingencies, self-insurance and benefit obligations, asset replacement, and 56
emergencies. The unassigned portion is the part of fund balance that is available for use without constraints established by legal requirements totals $4,515,886. The total fund balance at the fiscal year end of June 30, 2022, is equal to 125% of the fiscal year 2022- 23 Adopted General Fund Budget appropriations.
Re-appropriation of Fund Balances
As part of the closing process of fiscal year 2021-22, Staff has identified various grants and projects that were approved and budgeted in fiscal year 2021-22 and were unspent as of June 30, 2022. Staff is requesting the following funds to be re-appropriated to the current fiscal year 2022-23 budget so that the projects can be completed.
Fund Project Description Amount
General Fund AV Ranch audio and visual equipment
installation $48,000
General Fund AV Ranch design and construction of
historic site exhibitions $75,000
Federal Grants Community Development Block Grant -
CARES Act $239,983
Total $362,983
Attachments:
1. FY 2021-22 Annual Comprehensive Financial Report
2. Statement on Auditing Standards 114 Letter
3. Report on Internal Controls
4. Report on Appropriations Limit
5. Report on Treasurer’s Monthly Statement
6. Resolution
57 58
59 CITY OF ALISO VIEJO
Aliso Viejo, California
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2022
Prepared by
FINANCIAL SERVICES
60 THIS PAGE INTENTIONALLY LEFT BLANK
61 CITY OF ALISO VIEJO
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR FISCAL YEAR ENDED JUNE 30, 2022
TABLE OF CONTENTS
Page
Number
INTRODUCTORY SECTION
Letter of Transmittal i
GFOA Certificate of Achievement vii
Organizational Chart viii
List of Principal Officials ix
FINANCIAL SECTION
Independent Auditor's Report 1
Management's Discussion and Analysis 5
BASIC FINANCIAL STATEMENTS
Government–Wide Financial Statements:
Statement of Net Position 18
Statement of Activities 19
Fund Financial Statements:
Balance Sheet – Governmental Funds 21
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 23
Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 24
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the
Statement of Activities 26
Statement of Fiduciary Net Position 27
Statement of Changes in Fiduciary Net Position 28
Notes to Basic Financial Statements 29
62 CITY OF ALISO VIEJO
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR FISCAL YEAR ENDED JUNE 30, 2022
TABLE OF CONTENTS (Continued)
Page
Number
REQUIRED SUPPLEMENTARY INFORMATION
Budgetary Comparison Information: 66
Budgetary Comparison Schedule - General Fund 67
Budgetary Comparison Schedule - Other Grants 68
Budgetary Comparison Schedule - Aliso Viejo Center 69
Budgetary Comparison Schedule - Federal Grants 70
Capital Assets – Modified Approach for Infrastructure 71 Miscellaneous Plan:
Schedule of Proportionate Share of Net Pension Liability and Related Ratios as of the Measurement Date 73
Schedule of Plan Contributions 74
Schedule of Changes in the Total OPEB Liability and Related Ratios 75
SUPPLEMENTARY INFORMATION
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
Other Governmental Funds Information 76
Combining Balance Sheet – Other Governmental Funds 78
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Other Governmental Funds 82
Budgetary Comparison Schedules – Special Revenue Funds:
Traffic Congestion Relief 86
Gas Tax 87
Measure M 88
SB1 - RMRA 89
Public Safety Grants 90
Air Quality Improvement 91
Integrated Waste Management 92
Technology Grants 93
Aquatic Center 94
Budgetary Comparison Schedules – Capital Projects Funds:
Capital Improvements 95
Storm Water 96
Street Improvements 97
Custodial Funds: 98
Combining Statement of Fiduciary Net Position - All Custodial Funds 99 Combining Statement of Changes in Fiduciary Net Position All Custodial Funds 100
63 CITY OF ALISO VIEJO
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR FISCAL YEAR ENDED JUNE 30, 2022
TABLE OF CONTENTS (Continued)
Page
Number
STATISTICAL SECTION
Net Position by Component – Table 1 103
Change in Net Position – Table 2 104
Fund Balances of Governmental Funds – Table 3 105
Changes in Fund Balances of Governmental Funds – Table 4 106 General Government – Expenditures by Function – Table 5 107 General Government – Revenues by Source – Table 6 108
General Government – Tax Revenues by Source – Table 7 109 Principal Sales Tax Producers by Category – Table 8 110 Property Tax Levies and Collections – Table 9 111
Assessed and Estimated Actual Value of Taxable Property – Table 10 112 Direct and Overlapping Property Tax Schedules – Table 11 113 Principal Property Taxpayers – Table 12 114
Ratios of Outstanding Debt by Type - Table 13 115
Computation of Direct and Overlapping Bonded Debt – Table 14 116 Legal Debt Margin – Table 15 117
Demographic and Economic Statistics – Table 16 118
Principal Employers – Table 17 119
Operating Indicators by Function – Table 18 120
Full-Time and Part-Time City Employees by Function – Table 19 121 Capital Assets Statistics by Function – Table 20 122
Schedule of Insurance – Table 21 123
Miscellaneous Statistical Information - Table 22 124
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65 15
66 67
68 69
70 71
vii
72 viii
City of Aliso Viejo
Organizational Chart
June 30, 2022
73 ix
CITY OF ALISO VIEJO
LIST OF PRINCIPAL OFFICIALS
Council-Manager Form of Government
CITY COUNCIL
ROSS CHUN
Mayor
RICHARD HURT
Mayor Pro Tem
TIFFANY ACKLEY DAVID HARRINGTON MIKE MUNZING
Council Member Council Member Council Member
CITY ADMINISTRATION
DAVID DOYLE
City Manager
Scott Smith, City Attorney
Ann Eifert, Director of Financial Services/City Treasurer Mitzi Ortiz, Director of Government Services/City Clerk So Kim, Director of Community Development
Shaun Pelletier, City Engineer/Public Works Director
Lizzy Mendoza, Community Services Manager
Isaac Aziz, Information Technology Manager
Captain Scott Merrill, Chief of Police Services (Orange County Sheriff’s Department) Division Chief Baryic Hunter, Fire Services (Orange County Fire Authority) 74 THIS PAGE INTENTIONALLY LEFT BLANK
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1 Independent Auditor’s Report
To the Honorable Mayor and Members of the City Council
City of Aliso Viejo, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Aliso Viejo, California (the City), as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements 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, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2022, and the respective changes in financial position 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 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.
Responsibilities of Management for the Financial Statements The City’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. 76 2
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’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
Emphasis of Matter
As discussed in Note 1 to the financial statements, in the year ended June 30, 2022, the City adopted new accounting guidance under Governmental Accounting Standards Board (GASB) Statement No. 87, Leases. Our opinions are not modified with respect to this matter.
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’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’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.
77 3
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the required supplementary information, such as management’s discussion and analysis and schedules as listed in the table of contents 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 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’s basic financial statements. The supplementary information listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements.
The supplementary information is the responsibility of management and was derived from and relates 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 supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Information Included in the Annual Report
Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections 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.
78 4
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 15, 2022 on our consideration of the City’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’s internal control over financial reporting and compliance.
San Bernardino, California
December 15, 2022
79 THIS PAGE INTENTIONALLY LEFT BLANK
80 CITY OF ALISO VIEJO
MANAGEMENT’S DISCUSSION & ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2022
5 Our discussion and analysis of the City of Aliso Viejo’s financial performance provides an overview of the City’s financial activities for the year ended June 30, 2022. Please read it in conjunction with the transmittal letter at the front of this report and the accompanying basic financial statements which follow this section.
FINANCIAL HIGHLIGHTS
• The General Fund balance increased by $3,449,005 or 12.7% from fiscal year 2020-21, to a total balance of $30,580,168. This balance is comprised of non-spendable funds of $81,267, assigned funds of $25,983,015, and $4,515,886 of unassigned funds. The estimated fund balance at the fiscal year end of June 30, 2022, is equal to 125% of the fiscal year 2022-23 Adopted General Fund budget appropriations, including debt service payments.
• The General Fund’s actual resources available for appropriation (revenue inflows) exceeded the final budget by $1,427,212 and actual expenditures (outflows) were $1,993,126 under budget. General Fund revenues and transfers in for the amount of $24,296,263 exceeded expenditures and transfers out of $20,847,258 by $3,449,005.
• The City increased its overall net position by $4,280,175 or 3.2% for a total net position of $136,113,993 primarily as a result of an increase in revenues, including federal stimulus funds, and lower than expected expenses during the fiscal year ending June 30, 2022. • The City’s overall fund balance increased by $3,702,578 for a total of $36,017,932 for all funds. Total revenue from all sources amounted to $30,980,639, an increase of $6,676,138, primarily due to federal stimulus funds from the American Rescue Plan Act in the amount of $2,839,053 and an increase in sales and transient occupancy taxes, as a result of economic recovery from the pandemic.
Total expenditures, including debt service and capital outlay totaled $27,301,192. • City governmental activities amounted to $26,917,782, a slight decrease of $46,459, from fiscal year 2020-21. The decrease is a result of one-time expenses related to the pandemic response that occurred in fiscal year 2020-21. City program revenues totaled $12,687,822, which is comprised of charges for services and funding through other governmental agencies. The net cost of governmental activities is $14,229,960, which is primarily funded with General Fund revenues. • Deferred inflows increased by $180,289 or 33.4% primarily due to GASB 87 reporting of lease revenue from City Hall rental agreements.
• The City spent $2,641,341 for its street maintenance, traffic mitigation, and street improvements and rehabilitation projects. Per the City’s most recent Pavement Management Plan, the City’s pavement condition index improved from 82 to 83.
• The City spent $596,799 on Capital Improvement projects such as Dairy Fork and Wood Canyon wetland rehabilitation projects, new permitting software implementation, and facility improvements at the Aquatic Center and Aliso Viejo Ranch.
• Gas taxes and funds from the Road Maintenance and Rehabilitation Account (RMRA or also referred to as SB1) increased due to higher gas prices in fiscal year 2021-22. Gas taxes totaled $1,155,022 and expenses totaled $1,162,911, which funded road maintenance and rehabilitation. RMRA funding totaled $1,014,000 and expenditures in the amount $944,154 funded the City’s street rehabilitation projects along Deerhurst/Foxborough and Aliso Creek (Wolverine to Alicia). 81 CITY OF ALISO VIEJO
MANAGEMENT’S DISCUSSION & ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2022
6 • Measure M revenue totaled $862,377, while expenses totaled $398,961. This contributed to the increase of $630,395 in fund balance for other governmental funds. These funds are typically carried over to fund larger capital improvement projects.
USING THIS ANNUAL REPORT
This annual report consists of a series of financial statements. The Statement of Net Position and the Statement of Activities provide information about the activities of the City as a whole and allow a longer term view of the City’s finances. Fund Financial Statements tell how City services were financed in the short-term as well as what remains for future spending. Fund financial statements also report the City’s operations in more detail than the government-wide statements by providing information about the City’s most significant funds.
Reporting the City as a Whole: The Statement of Net Position and the Statement of Activities The Statement of Net Position and the Statement of Activities report information about the City as a whole and in a way that helps clarify the City’s overall financial position. These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting method used by most private sector companies. All current year revenues and expenses are taken into account, regardless of when cash is received or paid. These two statements report the City’s net position and changes in them. Net position, which is the difference between assets and liabilities, is one way to measure the City’s financial health, or financial position. Over time, increases or decreases in the City’s net position is one indicator of whether its financial health is improving or deteriorating. Consideration should also be given to other non-financial factors, such as changes in the City’s property tax base and the condition of the City’s roads, to assess the overall health of the City.
All of the City’s basic services are considered to be governmental activities. The Statement of Net Position and the Statement of Activities present information about these governmental activities, including general government, community development, community services, public safety, and public works. Property tax, sales tax, transient occupancy tax, and franchise fees finance 69% of these activities.
Reporting the City’s Most Significant Funds: Fund Financial Statements The Fund Financial Statements provide detailed information about the most significant funds - not the City as a whole. In addition to the General Fund, other funds included are Other Grants, Aliso Viejo Center, and Federal Grants. Lesser funds are collectively reported as Other Governmental Funds. Some funds are required to be established by State law. However, the City Council establishes many other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants, and other money.
The City currently has just one type of fund - governmental - which uses the modified accrual accounting approach. Governmental funds focus on how money flows into and out of those funds and the balances left at year-end that are available for spending. Most of the City’s basic services are reported in governmental funds. Under the modified accrual method of accounting, revenues are recognized in the accounting period in which they become measurable and available to finance expenditures of the current fiscal period while expenditures are recognized in the accounting period in which the liability is incurred.
The governmental fund statements provide a detailed short-term view of the City’s general government operations and the basic services it provides. Governmental fund information helps the reader determine whether there are more or less financial resources that can be spent in the near future to finance the 82 CITY OF ALISO VIEJO
MANAGEMENT’S DISCUSSION & ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2022
7 City’s programs. The relationship and differences between governmental activities reported in the Statement of Net Position and the Statement of Activities and the governmental funds statements are detailed in the reconciliations immediately following each of the fund financial statements.
The City as Trustee: Reporting the City’s Fiduciary Responsibilities The City is the trustee, or fiduciary, for certain amounts held on behalf of developers, property owners, and others. The City’s fiduciary activities are reported in the Statement of Fiduciary Assets and Liabilities.
We exclude these activities from the City’s other financial statements because the City cannot use these assets to finance its operations. The City is responsible for ensuring that the assets reported in these funds are used only for their intended purposes.
THE CITY AS A WHOLE
Our analysis focuses on the net position (Table 1) and changes in net position (Table 2) of the City’s governmental activities. The City has no business-type activities.
Table 1
Condensed Statement of Net Position
2022 2021
Current and other assets 44,459,929 $ 39,453,424 $
Capital assets, net 113,104,830 113,977,966
Intangible assets, net 14,862 - Total assets 157,579,621 153,431,390 Total deferred outflows of resources 618,811 630,871 Current liabilities 8,140,125 7,268,987 Non current liabilities 13,224,141 14,419,572 Total liabilities 21,364,266 21,688,559 Total deferred inflows of resources 720,173 539,884 Net Position:
Invested in capital assets 100,348,736 101,009,829 Restricted 5,840,779 5,222,524 Unrestricted 29,924,478 25,601,465 Total net position 136,113,993 $ 131,833,818 $ Governmental Activities
83 CITY OF ALISO VIEJO
MANAGEMENT’S DISCUSSION & ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2022
8 Total net position increased by $4,280,175 or 3.2% to $136,113,993 in fiscal year 2021-22, as a result of an increase in current and other assets. Total assets increased 2.7% or $4,148,231 to $157,579,621 from the prior fiscal year primarily due to funding from the American Rescue Plan Act, higher than expected sales and transient occupancy tax revenue, and lower than expected expenditures related to public safety and recreation. The largest portion of the City’s net position at June 30, 2022, reflects its investment in its buildings and infrastructure. Capital assets, net of related debt for fiscal year 2021-22 total $100,348,736 and represents 74% of the City’s total net position. $5,840,779 is restricted, representing special revenue resources that are subject to their funding stipulations, such as street improvements, specific public safety expenditures, and community development projects. Unrestricted net position totals $29,924,478 for the year ending June 30, 2022, and is an increase of $4,323,013, which is attributed to an increase in resources, such as ARPA funding and tax revenue.
Charges for
services
18%
Operating
contributions
and grants
22%
Capital
contributions and
grants
0%
Taxes
59%
Use of money and
property
0% Other
1%
Sources of Revenue
84 CITY OF ALISO VIEJO
MANAGEMENT’S DISCUSSION & ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2022
9 Table 2
Change in Net Position
2022 2021
Revenues
Program revenues:
Charges for services 5,742,780 $ 4,001,459 $
Operating contributions and grants 6,945,042 4,852,523 General revenues:
Taxes:
Sales taxes 6,117,932 3,524,908 Property taxes 9,211,738 8,981,521 Franchise taxes 1,744,239 1,672,280
Transient occupancy taxes 1,413,074 723,599 Motor vehicle license fees 57,547 36,704 Use of money and property (153,060) 377,709 Other 118,665 292,095 Total revenues 31,197,957 24,462,798 Expenses
General government 4,943,476 5,621,731 Community development 1,244,026 1,754,782 Community services 5,264,667 3,695,994
Public works 5,473,152 6,016,332
Public safety 9,601,888 9,480,235
Interest and fiscal charges 390,573 395,167 Total expenses 26,917,782 26,964,241 Increase (Decrease) in net position 4,280,175 (2,501,443) Net position - beginning of year 131,833,818 134,335,261 Net position - end of year 136,113,993 $ 131,833,818 $ Governmental Activities
Fiscal year 2021-22 reflects significant economic recovery from the pandemic and the effects of stay-athome orders, which drastically impacted the City’s sales and transient occupancy taxes in the prior year.
The City’s total revenues from all sources were $31,197,957 while the total cost of all programs and services was $26,917,782. Compared to fiscal year 2020-21 total revenues were up 27.5%, primarily due to increases in sales tax, transient occupancy tax, charges for services, such as recreation, and grants. 85 CITY OF ALISO VIEJO
MANAGEMENT’S DISCUSSION & ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2022
10 Total expenses decreased by less than 1% or $46,459. Decreases in general government, community development, and public works were offset by increases in spending for public safety and Community Services as a result of the opening of the Aliso Viejo Ranch and resuming of recreation activities that were halted because of the pandemic in fiscal year 2020-21. Community Services saw an increase in spending of $1,568,673, or 42.4%. This reflects the first full fiscal year of the operation of the Aliso Viejo Ranch, as well as the reopening of the Aliso Viejo Center and the Aliso Viejo Aquatic Center. Public Safety increases of $121,653, or 1.3%, resulted from higher contractual costs with the Orange County Sheriff’s Department and animal control services.
Overall decrease in spending for all other programs were primarily due to one-time funding programs that were available in fiscal year 2020-21 as a response to the pandemic. Funds were provided for business assistance and other Covid-19 safety measures and thus impacted Economic development expenditures by approximately $600,000. Other programs saw various expenditure decreases from savings in salaries and benefits due to vacant positions, supply chain issues, and lower contractual costs due to delay in various projects.
Excluding interfund transfers, General Fund revenues increased by $3,261,796 or 18.5% for the year and again is attributed to higher sales and transient occupancy taxes. The City’s main revenue sources are Property Tax, Sales Tax, Transient Occupancy Taxes and Franchise Fees. Property Taxes have been the most reliable and stable local government revenue for decades and continues to be the City’s largest revenue source at $9,211,738 this year. Property Taxes were up 2.6% from the prior year and are expected to have similar growth next year. This increase can be attributed to increases in home values resulting in higher assessed values and the effect of Proposition 8 assessed value adjustments.
Sales tax, the City’s second largest revenue source, increased by approximately $2.6 million or 73.6% compared to fiscal year 2020-21. Reopening of businesses, people returning to work, higher gas prices, and inflation all attributed to the better-than-expected sales tax revenue. Fuel and service stations make up 30% of the City’s sales tax revenues, followed by the City’s share of the County pool receipts.
The hardest hit revenue category from the pandemic was transient occupancy taxes. Tourism and large gatherings such as conventions and conferences came to a halt during the pandemic and caused transient occupancy taxes to drop by more than 50% in fiscal year 2020-21. Fiscal year 2021-22 saw a rebounding in transient occupancy taxes to $1.4 million, an increase of almost 100% from the prior year.
Although transient occupancy taxes were strong, revenue in fiscal year 2021-22 was still below the highs seen in fiscal 2017-18 in the city.
Franchise fees increased slightly by 4.3% as a result of higher receipts from utility franchises as well as a double payment from the County of Orange, OC Waste and Recycling Waste Disposal Agreement for both fiscal year 2020-21 and 2021-22.
Charges for services saw an increase of 43.5% as a result of the opening of the Aliso Viejo Ranch, resuming recreation classes, aquatics, and higher demand for the Aliso Viejo Center.
The current performance of City revenues is reflective of the present state of the economy, impacts of the pandemic, recovery solutions implemented by the State and Federal governments as well as its excellent fiscal management and direction by Council. These significant revenues fund a large part of the City’s basic services.
86 CITY OF ALISO VIEJO
MANAGEMENT’S DISCUSSION & ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2022
11 Government Activities
Tables 3 and 3A present the cost of each of the City’s programs: General Government (Administrative Services), Community Development, Community Services, Public Safety, and Public Works as well as each program’s net cost (total cost less revenues generated by the activities).
Table 3
Net Cost of Governmental Activities
Fiscal Year Ended June 30, 2022
Total Cost of
Services
Program
Revenues
Net
(Revenue)/Cost
of Service
General government 4,943,476 $ - $ 4,943,476 $
Community development 1,244,026 (1,045,592) 198,434 Community services 5,264,667 (5,054,146) 210,521 Public works 5,473,152 (6,258,548) (785,396) Public safety 9,601,888 (329,536) 9,272,352 Interest and fiscal charges 390,573 - 390,573 Total 26,917,782 $ (12,687,822) $ 14,229,960 $ Table 3A
Net Cost of Governmental Activities
Fiscal Year Ended June 30, 2021
Total Cost of
Services
Program
Revenues
Net
(Revenue)/Cost
of Service
General government 5,621,731 $ - $ 5,621,731 $
Community development 1,754,782 (1,985,136) (230,354) Community services 3,695,994 (2,469,572) 1,226,422 Public works 6,016,332 (3,929,195) 2,087,137 Public safety 9,480,235 (470,079) 9,010,156
Interest and fiscal charges 395,167 - 395,167 Total 26,964,241 $ (8,853,982) $ 18,110,259 $ The City’s total expenses were $26,917,782 for all city services, which includes, law enforcement, animal control services, NPDES (storm water runoff), street repairs, engineering, building and planning services, recreation programs, administrative costs, and capital outlay.
General Government expenses are 18.4% of the total expenses and include City Council, City Manager, City Attorney, City Clerk, Human Resources, Financial Services, Information Technology, and other general expenses, such as insurance premiums, maintenance of City Hall, community outreach, and City memberships. The decrease of $678,255, or 12.1% over the prior year was primarily due to one-time 87 CITY OF ALISO VIEJO
MANAGEMENT’S DISCUSSION & ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2022
12 expenses incurred in fiscal year 2020-21 for Covid-19 response, as well as the movement of economic development activities into Community Development.
Community Development expenses are 4.6% of the expenses and include Planning, Building and Safety, Code Enforcement, and Economic Development activities. Expenses incurred for these activities decreased this year by 29% and is due to lower building and planning services. In addition, fiscal year 2020-21 saw one-time funding in the amount of $154,650 towards low-income housing programs, which was funded through development impact fees.
Community Services expenses are 19.6% of the governmental services expenses and increased 42.4% over last year as programs reopened after the pandemic. These costs include Community Services administration, recreation programs, Iglesia Community Center, and operating costs for Iglesia Park, Aliso Viejo Ranch, Aliso Viejo Center, and Aliso Viejo Aquatic Center. Events at the Aliso Viejo Center resumed during the fiscal year and resulted in a net transfer to the General Fund in the amount of $479,243. General fund provided a transfer in the amount of $108,388 to cover the operational gap for the Aquatic Center Fund. The City continues to explore marketing of the facilities and new programs to generate additional revenues to assist with offsetting operational costs. Personnel costs increased in preparation of new programs that will be offered by the recreation department as well as the management and operations of the Aliso Viejo Ranch facility. One-time spending on capital projects completed at the aquatic center included shade structures and gate repairs. Improvements at the Ranch included equipment and construction of a sound barrier wall.
Public Works expenses are 20.3% of the governmental services. Public Works spending decreased by
9.0%, or $543,180, mainly due to lower street rehabilitation and maintenance costs. The Public Works department manages all street and traffic maintenance, environmental compliance, and all capital improvement projects. Operating contributions and grants provide a large portion of the funding for this function. Special Revenue funds, which are comprised of TCRF, Gas Tax, SB1, and Measure M monies, are also used to subsidize the costs of this program.
Public Safety expenses comprise the largest expense of the City at 35.7% of the governmental services expenses and include contract costs with the Orange County Sheriff Department for law enforcement services, the City of Mission Viejo for animal services, crossing guards, emergency operations management, and crime prevention outreach services for the City. Public Safety costs were up $121,653, or 1.3%, from the prior year largely due to the increase in contract costs. Revenues from Fines, Fees & Forfeitures, and Operating Contributions & Grants assist with offsetting the costs of this program.
A portion of the increases in appropriations across all departments are due to cost-of-living adjustments as required by existing contract services agreements, the City’s employee pay for performance plan, and
1.7% cost-of-living adjustment effective July 1, 2021.
FINANCIAL ANALYSIS OF THE CITY’S FUNDS
At year-end, the City’s Governmental Funds reported a combined Fund Balance of $36,017,932, an increase of 11.5% or $3,702,578 from the prior year. This was primarily due to the increase in revenue as the local economy rebounded from the pandemic and funding from ARPA.
Overall, City operations were consistent with prior year operating levels, with the exception of services at the Aliso Viejo Ranch and increase in recreation programs. The current fund balance reflects both compliance with the Management and Budget policy adopted by the City Council and the City’s fiscal 88 CITY OF ALISO VIEJO
MANAGEMENT’S DISCUSSION & ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2022
13 responsibility towards services. Gas taxes and funds from Road Maintenance and Rehabilitation Account (RMRA or also referred to as SB1) increased due to higher gas prices in fiscal year 2021-22. Gas taxes totaled $1,155,022 and expenses totaled $1,162,911, which funded road maintenance and rehabilitation.
RMRA funding totaled $1,014,000 and expenditures in the amount $944,154 funded the City’s street rehabilitation projects along Deerhurst/Foxborough and Aliso Creek (Wolverine to Alicia). Measure M revenue totaled $862,377, while expenses totaled $398,961. This contributed to the increase of $630,395 in fund balance for other governmental funds. These funds are typically carried over to fund larger capital improvement projects.
Total Capital Improvement projects totaling $2,096,842 was expended through a combination of special revenue funds, such as gas taxes, SB1, and other grants, and the General Fund. Street and traffic capital projects totaled $1,500,043, facility and building improvements in the amount of $572,107, and storm water projects totaling $24,692. Of the total funding, General Fund funded various CIP projects totaling $319,433 for storm water projects, facility improvements at the Aliso Viejo Ranch and Aquatic Center, and implementation of permitting software.
General Fund Budgetary Highlights
Revenues: Actual revenues received exceeded the final year-end budget projections by $1,427,212 or
6.2%. General fund taxes totaled $18,420,699 and represents 75.8% of the fund’s resources. Property tax is the largest contributor, followed by sales, franchise fees, and transient occupancy taxes. Property taxes received was on target at an approximately $9.2 million. Sales tax revenue totaled $6,117,932 and outperformed budget estimates by $1,117,932 due to conservative budget estimates as uncertainty in economic activity remained high following the pandemic’s stay-at-home measures. In addition, high inflation and gas prices experienced during the fiscal year also attributed to the better-than-expected sales tax revenue.
Transient occupancy taxes totaled $1,413,074 and was $213,074 higher than the estimated budget as occupancy rates increased more than expected. Franchise fees received were 5.9%, or $91,741 over budget primarily from higher revenue from utilities, as well as an additional payment in the amount of $55,022 received during fiscal year 2021-22 for fiscal year 2020-21 from the County of Orange, OC Waste and Recycling Waste Disposal Agreement.
Expenditures: Actual expenditures incurred were $1,993,126 or 8.7% lower than the final year-end budget as a result of the vacancy credits provided by the Orange County Sheriff’s Department due to lower staffing levels, part-time vacancies in recreation, delayed information technology projects, and lower consulting costs for building and planning. Overall, General Fund expenditures in fiscal year 2022- 23 are expected to increase due to higher labor costs as a result of cost-of-living adjustments and inflationary pressures on contracts and materials.
Ending Fund Balance: Ending Fund Balance for the year increased by 12.7% from fiscal year 2020-21, for a total ending balance of $30,580,168. Included in the fund balance are non-spendable funds of $81,267 and assigned funds of $25,983,015. The unassigned portion is the part of fund balance that is available for use without constraints established by legal requirements and totals $4,515,886. The total fund balance at the fiscal year end of June 30, 2022, is equal to 125% of the fiscal year 2022-23 Adopted General Fund Budget appropriations.
89 CITY OF ALISO VIEJO
MANAGEMENT’S DISCUSSION & ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2022
14 CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
As of June 30, 2022, the City had $113,104,830 invested in a broad range of capital assets, including police equipment, buildings, land, park facilities, furniture and fixtures, and roads. (See Table 4 below).
Additions to capital assets being depreciated were made in the amount of $420,330 for various improvements at the Aliso Viejo Ranch. Depreciation expense in the amount of $1,293,466 was incurred in fiscal year 2021-22. For additional information on capital assets, refer to Note 5 of Notes to the Financial Statements.
The City of Aliso Viejo elected to use the modified approach in reporting their streets and roads network.
Under the modified approach, infrastructure assets that are part of a network or subsystem of a network are not required to be depreciated if certain requirements are met, which are disclosed in the accompanying Basic Financial Statements and Required Supplementary Information. In March 2002, the City Council approved a condition level of 80 as the minimum acceptable Pavement Condition Index (PCI). The following schedule discloses a comparison between the City’s assessed condition level of the streets and roads network as of June 30, 2022, and the City’s adopted target level of condition.
Actual Assessed Minimum Condition
Condition Level Level
Overall Pavement Network 83 80
Under the modified approach, GASB Statement No. 34 requires that condition assessments be performed every three years. Last completed in June 2022, the City traditionally performs an assessment every two years. It is the City’s intention to have another complete assessment performed on or before fiscal year ending June 30, 2024.
During the year ended June 30, 2022, actual streets and roads maintenance project costs were $2,641,341 compared to the estimate of $3,432,500. The amount of underspending was due to project cost savings.
Table 4
Capital Assets at Year End
(Net of Depreciation)
Asset Type 2022 2021
Land 14,315,978 $ 14,315,978 $
Buildings and improvements 37,017,900 37,371,801 Equipment, furniture and fixtures 522,540 562,440 Other infrastructure 7,159,777 7,639,112 Streets and highways 53,871,430 53,871,430 Construction in progress 217,205 217,205 Total capital assets 113,104,830 $ 113,977,966 $ 90 CITY OF ALISO VIEJO
MANAGEMENT’S DISCUSSION & ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2022
15 Table 4A
Intangible Assets at Year End
(Net of Amortization)
2022 2021
Intangible right to use asset, net 14,862 $ - $
Total intangible assets 14,862 $ - $
In fiscal year 2021-22, the City implemented permit tracking software for Planning, Building, Code Enforcement, and Public Works. The software will increase efficiency with permitting processes for both internal and external customers, improve response times, and provide integration with the City’s financial software.
Debt
On August 13, 2019, the City issued $12,250,000 of tax-exempt Certificates of Participation to provide financing for the construction of the Aliso Viejo Ranch. The principal is due annually in amounts ranging from $230,000 to $635,000 on November 1 of each year commencing in 2020 through the year 2049 with a coupon rate ranging from 2% to 4%.
In March of 2014, staff coordinated the refinancing of the Community Facilities District (CFD) bonds issued in conjunction with the Glenwood development. Based on the final pricing of the CFD bonds, Glenwood property owners are saving an average of $899 per year.
Non-Current Liabilities
Changes in non-current liabilities for the fiscal year ended June 30, 2022 were as follows:
Table 5
Non-Current Liabilities
June 30, 2022
Balance at
July 1, 2021 Additions Deletions
Balance at
June 30, 2022
Amount due
within one
year
Amount due
beyond one
year
Bonds payable 12,020,000 $ - $ 235,000 $ 11,785,000 $ 240,000 $ 11,545,000 $ Unamortized premium 935,795 - 32,269 903,526 - 903,526 Lease liability - 23,131 8,625 14,506 8,682 5,824 Compensated absences 302,117 154,348 211,482 244,983 68,038 176,945 Total 13,257,912 $ 177,479 $ 487,376 $ 12,948,015 $ 316,720 $ 12,631,295 $ For additional information on non-current liabilities, refer to Note 6 of the Notes to the Financial Statements.
91 CITY OF ALISO VIEJO
MANAGEMENT’S DISCUSSION & ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2022
16 ECONOMIC FACTORS AND FISCAL YEAR 2022-23 BUDGET
Although the national, state, and local economies continue to recover from the pandemic, economic uncertainty remains high due to the emergence of Covid variants, inflation, supply chain concerns, labor shortages, and political unrest abroad. Based on the UCLA Anderson’s Forecast in September 2022, economic growth will continue to slow in 2023. UCLA projects the economy will grow on average 1.5% in 2022 and 0.3% in 2023, and projects a less than 50% chance of a recession in the next 12 months.
However, factors such as the Federal Reserve continuing to aggressively raise rates and high inflation reaching 8%, may exacerbate a slowing economy and worsen economic conditions.
As a result, the fiscal year 2022-23 budget incorporates conservative revenue estimates with a spending plan that exercises fiscal restraint across all departments. The budget includes one-time funds from the American Rescue Plan Act (ARPA) in the amount of $2.8 million. This funding is essential in providing a balanced operating budget by restoring lost revenue from the pandemic and allowing the City to offset government service expenditures, primarily in public safety.
The coming year brings forth new challenges as communities face severe inflation. Inflation rates have reached 40-year highs and pose a significant threat to the economy as recession fears come into focus.
Higher costs for fuel, goods, and services impact the quality of life of residents, exacerbate the housing and homelessness crises, and affect the City's ability to maintain the current levels of service our community has come to expect.
With City expenses outpacing revenue growth, it is more critical now than ever to focus on economic development and to pursue future revenue growth opportunities in the City. Funding for economic development activities at the Aliso Viejo Town Center remains a priority in the new year in order to expand on the City's diverse business base, which consists of a mix of high tech, medical/pharmaceutical, and retail companies.
Revenue projections are based on current market conditions, legislative developments, and impacts of the pandemic. Appropriations have been budgeted at a level to ensure operations are not impacted and fiscal reserves are maintained. Increases in expenditures are attributed to higher public safety contract costs for law enforcement, animal control, and crossing guards, as well as costs for the November election, information technology, professional and maintenance agreements, and recreation programs.
Incremental increases in appropriations across all departments are due to increases in salaries and benefits for employees and include a 4.3% cost of living adjustment approved by Council. In addition, the budget includes various facility improvements at City Hall, Aliso Viejo Ranch, and the Aliso Viejo Center.
All revenues and expenditures will be closely monitored to respond to challenges as they arise.
The budget for fiscal year 2022-23 includes appropriations for programs and projects as directed by the City Council. For fiscal year 2022-23, the City is projecting a balanced operating budget with General Fund revenues exceeding operating expenditures by $60,838. General Fund reserves totaling $657,050 will be utilized for debt service payment on the Certificates of Participation (COP). The General Fund balance at the end of fiscal year 2022-23 is estimated to be $29,983,956 and is 128% of the estimated operating budget.
The Capital Improvement Program Budget represents a balanced approach for meeting the community's current and future needs, while continuing to address priority issues expressed by the community and City Council. The Capital Improvement Program for fiscal year 2022-23 totals approximately $4.0 million and includes improvements to streets, storm water projects, and improvements to City facilities. Staff 92 CITY OF ALISO VIEJO
MANAGEMENT’S DISCUSSION & ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2022
17 continues to maximize the use of special revenues by actively pursuing grants and other funding opportunities from County, State, and Federal sources to help fund these programs.
CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the City’s finances and to show the City’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact the City’s Department of Financial Services, City of Aliso Viejo, 12 Journey, Suite 100, Aliso Viejo, California, 92656, or call (949) 425-2520.
93 CITY OF ALISO VIEJO
STATEMENT OF NET POSITION
JUNE 30, 2022
See accompanying notes to the financial statements.
18 Governmental
Activities
Assets:
Cash and investments 40,675,427 $
Receivables:
Accounts 1,086,934 Accrued interest 22,879 Lease 214,621 Due from other governments 2,366,019 Inventory 9,032 Prepaid costs 85,017
Intangible assets, net of amortization 14,862
Capital assets not being depreciated 68,404,613 Capital assets, net of depreciation 44,700,217 Total Assets 157,579,621 Deferred Outflows of Resources:
Pension related items 550,755 OPEB related items 68,056 Total Deferred Outflows of Resources 618,811 Liabilities:
Current liabilities:
Accounts payable 2,467,547 Accrued liabilities 282,995 Deposits payable 2,165,886 Retentions payable 67,924 Unearned revenue 2,839,053
Compensated absences - current portion 68,038
Long-term liabilities - current portion 248,682 Non-current liabilities:
Compensated absences - non-current portion 176,945
Long-term liabilities - non-current portion 12,454,350 Net pension liability 47,870 Total OPEB liability 544,976 Total Liabilities 21,364,266 Deferred Inflows of Resources:
Pension related items 72,529 OPEB related items 426,341 Leases 221,303 Total Deferred Inflows of Resources 720,173
Net Position:
Net investment in capital assets 100,348,736 Restricted for:
Community development projects 1,721,020 Public works 3,990,740 Public safety 129,019 Unrestricted 29,924,478 Total Net Position 136,113,993 $ 94 CITY OF ALISO VIEJO
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2022
See accompanying notes to the financial statements.
19 Net
(Expenses)
Revenues and
Changes in
Net Position
Operating Capital
Charges for Contributions Contributions Governmental
Functions/ Programs Expenses Services and Grants and Grants Activities Primary Government:
Governmental activities:
General government 4,943,476 $ - $ - $ - $ (4,943,476) $ Public safety 9,601,888 173,133 156,403 - (9,272,352) Community development 1,244,026 1,045,592 - - (198,434) Community services 5,264,667 4,524,055 530,091 - (210,521) Public works 5,473,152 - 6,258,548 - 785,396 Interest and fiscal charges 390,573 - - - (390,573) Total governmental activities 26,917,782 5,742,780 6,945,042 - (14,229,960) Total primary government 26,917,782 $ 5,742,780 $ 6,945,042 $ - $ (14,229,960) General revenues:
Taxes:
Property taxes, levied for general purpose 9,211,738 Transient occupancy taxes 1,413,074 Sales taxes 6,117,932
Franchise taxes 1,744,239
Motor vehicle in lieu - unrestricted 57,547 Use of money and property (153,060) Other 118,665 Total general revenues 18,510,135 Change in net position 4,280,175 Net position, beginning of year 131,833,818 Net position, end of year 136,113,993 $ Program Revenues
95 20
GENERAL FUND
The General Fund has been classified as a major fund and is used to account for revenues and expenditures that are not required to be accounted for in another fund.
SPECIAL REVENUE FUNDS
Special Revenue Funds are used to account for specific revenues that are legally restricted to expenditure for a particular purpose. The following funds have been classified as major funds.
Other Grants Fund
This fund is used to account for state, local, and other grants received such as Prop 10, CalRecycle, and the urban Runoff Grant.
Aliso Viejo Center
This fund is used to account for the operations of the Aliso Viejo Center. The Aliso Viejo Center is a City owned facility that serves as an ideal venue to accommodate an array of functions, such as banquets, wedding celebrations, conferences, and corporate events.
Federal Grants
The Federal Grants Fund is used to account for Federal Grants received by the City for various projects. Grants included are FTA Grants, T.A.R.P Funds, Federal Community Development Block Grants, and Energy Efficiency and Conservation Block Grants.
NON-MAJOR FUNDS
Other Governmental Funds
These funds constitute all other governmental funds that do not meet the major 10% and 5% test of assets, liabilities, revenues, or expenditures for the governmental funds. These funds consist of other Special Revenue Funds and Capital Projects Funds for the City. 96 THIS PAGE INTENTIONALLY LEFT BLANK
97 CITY OF ALISO VIEJO
BALANCE SHEET
GOVERNMENTAL FUNDS, (continued)
JUNE 30, 2022
See accompanying notes to the financial statements.
21 General Aliso Viejo Federal
Fund Other Grants Center Grants
Assets:
Cash and investments 29,720,150 $ - $ 2,114,668 $ 2,759,187 $ Receivables:
Accounts 1,044,013 - 7,706 - Accrued interest 22,879 - - - Leases 214,621 - - - Due from other governments 1,384,534 358,114 - 168,180 Inventory - - 9,032 - Prepaid costs 81,267 - 1,200 - Due from other funds 322,651 - - - Total Assets 32,790,115 $ 358,114 $ 2,132,606 $ 2,927,367 $ Liabilities, Deferred Inflows of Resources
and Fund Balances:
Liabilities:
Accounts payable 844,529 $ - $ 864,802 $ 159,373 $
Accrued liabilities 225,399 - - - Deposits payable 910,582 - 1,255,304 - Due to other funds - 314,029 - - Retentions payable - - 12,500 - Unearned revenue - - - 2,839,053 Total Liabilities 1,980,510 314,029 2,132,606 2,998,426 Deferred Inflows of Resources:
Leases 221,303 - - - Unavailable revenue - grants 8,134 358,114 - 14,658 Total Deferred Inflows of Resources 229,437 358,114 - 14,658 Fund Balances:
Non-Spendable:
Prepaid costs and inventory 81,267 - - - Restricted for:
Community development projects - - - - Capital projects - - - - Public safety - - - - Assigned to:
Contingencies 3,500,571 - - - Self Insurance/benefit obligations 600,000 - - - Asset replacement 11,882,444 - - - Emergencies and unanticipated traffic projects 10,000,000 - - - Unassigned (314,029) 4,515,886 - (85,717) Total Fund Balances (Deficit) 30,580,168 (314,029) - (85,717) Total Liabilities, Deferred Inflows of
Resources and Fund Balances 32,790,115 $ 358,114 $ 2,132,606 $ 2,927,367 $ Special Revenue Funds
98 CITY OF ALISO VIEJO
BALANCE SHEET
GOVERNMENTAL FUNDS, (continued)
JUNE 30, 2022
See accompanying notes to the financial statements.
22 Other Total
Governmental Governmental
Funds Funds
Assets:
Cash and investments 6,081,422 $ 40,675,427 $
Receivables:
Accounts 35,215 1,086,934 Accrued interest - 22,879 Leases - 214,621 Due from other governments 455,191 2,366,019 Inventory - 9,032 Prepaid costs 2,550 85,017 Due from other funds - 322,651 Total Assets 6,574,378 $ 44,782,580 $ Liabilities, Deferred Inflows of Resources
and Fund Balances:
Liabilities:
Accounts payable 598,843 $ 2,467,547 $
Accrued liabilities 57,596 282,995 Deposits payable - 2,165,886 Due to other funds 8,622 322,651 Retentions payable 55,424 67,924 Unearned revenue - 2,839,053 Total Liabilities 720,485 8,146,056 Deferred Inflows of Resources:
Leases - 221,303 Unavailable revenue - grants 16,383 397,289 Total Deferred Inflows of Resources 16,383 618,592
Fund Balances:
Non-Spendable:
Prepaid costs and inventory - 81,267 Restricted for:
Community development projects 1,721,020 1,721,020 Capital projects 3,990,740 3,990,740 Public safety 129,019 129,019 Assigned to:
Contingencies - 3,500,571 Self Insurance/benefit obligations - 600,000 Asset replacement - 11,882,444 Emergencies and unanticipated traffic projects 10,000,000 - Unassigned 4,112,871 (3,269) Total Fund Balances (Deficit) 5,837,510 36,017,932 Total Liabilities, Deferred Inflows of Resources and Fund Balances 6,574,378 $ 44,782,580 $
99 THIS PAGE INTENTIONALLY LEFT BLANK
100
CITY OF ALISO VIEJO
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
JUNE 30, 2022
See accompanying notes to the financial statements.
23 Fund Balances of Governmental Funds 36,017,932 $
Position are different because:
Capital assets used in governmental activities are not current financial resources and, therefore, are not reported in the funds:
Capital assets 138,163,184 Accumulated depreciation (25,058,354) Intangible assets 23,131 Accumulated amortization (8,269) Deferred inflows and outflows of resources related to pension and OPEB have not been reported in the governmental funds:
Deferred outflows - Pension related items 550,755 Deferred outflows - OPEB related items 68,056 Deferred inflows - Pension related (72,529) Deferred inflows - OPEB related (426,341) Compensated absences that have not been included in the governmental fund activity. (244,983)
Governmental funds report all pension contributions as expenditures, however, in the Statement of Net Position, the excess of the plan's proportionate share of the total pension liability over the proportionate share of the plan's fiduciary net position is reported as a net pension liability. (47,870) Governmental funds report all OPEB contributions as expenditures, however, in the Statement of Net Position, any excesses of the OPEB plan's total pension liability over the OPEB plan's fiduciary net position is reported as a net OPEB liability. (544,976)
Revenues reported as unavailable revenue in the governmental funds are recognized in the Statement of Activities. These are classified as intergovernmental revenues in the Government-Wide Financial Statements. 397,289 Long-term liabilities are not due and payable in the current period:
Bonds payable (11,785,000) Unamortized premium (903,526) Lease liability (14,506) Net Position of Governmental Activities 136,113,993 $ Amounts reported for governmental activities in the Statement of Net 101
CITY OF ALISO VIEJO
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
See accompanying notes to the financial statements.
24 General Aliso Viejo Federal
Fund Other Grants Center Grants
Revenues:
Taxes 18,420,699 $ - $ - $ - $
Licenses and permits 714,168 - - -
Intergovernmental 64,675 72,873 - 3,033,181 Charges for services 380,965 - 2,213,056 - Use of money and property 1,150,007 - - (127,074) Fines and forfeitures 173,133 - - - Contributions - - - - Other 20,730 - 473,677 - Total revenues 20,924,377 72,873 2,686,733 2,906,107 Expenditures:
Current:
General government:
City council 184,469 - - - City manager 686,092 - - - Human resources 161,248 - - - City clerk 424,599 - - - City attorney 622,995 - - - Finance 667,581 - - - Information technology 864,958 - - - General government 662,893 - - 163,991 Community development:
Community services 2,324,010 - 2,207,490 - Planning 905,654 - - - Building 565,536 - - - Economic development 481,443 - - - Public works 1,841,106 - - - Public safety 9,340,524 - - - Debt service:
Principal payment 8,625 - - -
Interest and fiscal charges 137 - - - Capital outlay 23,131 - - - Total expenditures 19,765,001 - 2,207,490 163,991 Excess (Deficiency) of Revenues Over (Under) Expenditures 1,159,376 72,873 479,243 2,742,116 Other Financing Sources (Uses):
Transfers in 3,348,755 - - - Transfers out (1,082,257) (348,569) (479,243) (2,843,242) Lease acquisiiton 23,131 - - - Total other financing sources (uses) 2,289,629 (348,569) (479,243) (2,843,242) Net change in fund balances 3,449,005 (275,696) - (101,126) Fund balances (deficit), beginning of year 27,131,163 (38,333) - 15,409 Fund balances (deficit), end of year 30,580,168 $ (314,029) $ - $ (85,717) $ Special Revenue Funds
102
CITY OF ALISO VIEJO
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS, (continued) FOR THE YEAR ENDED JUNE 30, 2022
See accompanying notes to the financial statements.
25 Other Total
Governmental Governmental
Funds Funds
Revenues:
Taxes - $ 18,420,699 $
Licenses and permits - 714,168
Intergovernmental 3,503,349 6,674,078 Charges for services 1,042,244 3,636,265 Use of money and property (155,094) 867,839 Fines and forfeitures - 173,133 Contributions 50 50 Other - 494,407 Total revenues 4,390,549 30,980,639 Expenditures:
Current:
General government:
City council - 184,469 City manager - 686,092
Human resources - 161,248
City clerk - 424,599
City attorney - 622,995
Finance - 667,581
Information technology - 864,958
General government 24,831 851,715
Community development:
Community services 1,170,133 5,701,633 Planning - 905,654 Building - 565,536 Economic development - 481,443
Public works 3,147,162 4,988,268 Public safety 164,879 9,505,403 Debt service:
Principal payment 235,000 243,625
Interest and fiscal charges 422,705 422,842
Capital outlay - 23,131 Total expenditures 5,164,710 27,301,192 Excess (Deficiency) of Revenues Over (Under) Expenditures (774,161) 3,679,447 Other Financing Sources (Uses):
Transfers in 2,887,215 6,235,970
Transfers out (1,482,659) (6,235,970) Lease acquisition - 23,131 Total other financing sources (uses) 1,404,556 23,131 Net change in fund balances 630,395 3,702,578 Fund balances (deficit), beginning of year 5,207,115 32,315,354 Fund balances (deficit), end of year 5,837,510 $ 36,017,932 $ 103
CITY OF ALISO VIEJO
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, 2022
See accompanying notes to the financial statements.
26 Net Change in Fund Balances - Total Governmental Funds 3,702,578 $ are different because:
Governmental funds report capital outlays as expenditures. However, in the Government-Wide Statement of Activities, the costs of those assets are allocated over their estimated useful lives as depreciation expense.
Capital outlay and deletions 299,347 Depreciation and amortization (1,301,735) Capital projects expensed 120,983 Compensated absences expenses reported in the Statement of Activities do not require the use of current financial resources and therefore, are not reported as expenditures in governmental funds. 57,134 Pension obligation expenses, net of pension deferred related amounts, reported in the Statement of Activities do not require current financial resources and therefore, are not reported as expenditures in governmental funds. 930,336
OPEB obligation expenses, net of OPEB deferred related amounts, reported in the Statement of Activities do not require current financial resources and therefore, are not reported as expenditures in governmental funds. (21,680)
Revenues reported as unavailable revenue in the governmental funds are recognized in the Statement of Activities. These are classified as program revenues in the Government-Wide Financial Statements. 217,318 The issuance of long-term debt provides current financial resources in the governmental funds, but issuance of debt increases the long-term liabilities in the Statement of Net Position, while the repayment of long-term liabilities consumes the current financial resources of governmental funds.
Bonds payable 235,000 Unamortized premium 32,269 Leases 8,625 Change in Net Position of Governmental Activities $ 4,280,175 Amounts reported for governmental activities in the Statement of Activities 104
CITY OF ALISO VIEJO
STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS
JUNE 30, 2022
See accompanying notes to the financial statements.
27 Custodial
Funds
Assets:
Cash and investments 44,257 $
Restricted cash and investments 4,375,616
Interest receivable 1,436 Due from other governments 39,349 Total assets 4,460,658
Liabilities:
Accounts payable 39,870 Deposits payable 7,841
Total liabilities 47,711
Net position:
Restricted for organizations and other governments 4,412,947 Total net position $ 4,412,947 105
CITY OF ALISO VIEJO
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
See accompanying notes to the financial statements.
28 Custodial
Funds
Additions:
Assessments 2,164,165 $
Events and rentals 387,552
Interest income (145,985) Total additions 2,405,732
Deductions:
Administrative expenses 387,552 Payments to bondholders:
Principal 710,000
Interest 1,422,318 Total deductions 2,519,870
Net increase (decrease) in fiduciary net position (114,138) Net position, beginning of year 4,527,085 Net position, end of year 4,412,947 $ 106
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107
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
29 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Note 1: Summary of Significant Accounting Policies
The accounting policies of the City of Aliso Viejo conform to generally accepted accounting principles as applicable to governments. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles.
a. Reporting Entity
The City of Aliso Viejo (the City) was incorporated July 1, 2001, under the general laws of the State of California. The City operates under the Council-Manager form of government.
The City provides the following services as authorized by its general laws: public safety, public works, community development and general administrative services.
Generally accepted accounting principles require that these financial statements present the City and its component units, entities for which the City is considered to be financially accountable. As of the end of the reporting period the City had one component unit as defined by the GASB.
Aliso Viejo Public Facilities Corporation
The Aliso Viejo Public Facilities Corporation (Corporation) was created on July 19, 2006, for the purpose of providing for the financing of the acquisition and improvement of a building to be used as City Hall through the issuance of Certificates of Participation (COP) by the Corporation and the lease-back of the building from the Corporation to the City. Members of the City Council and management of the City act as the Corporation’s governing board and exerts significant influence over its operations. Separate financial statements are not prepared for this Corporation, however, the Corporation is active as of August 2019 due to the issuance of the 2019 COPs.
b. Measurement Focus, Basis of Accounting, and Basis of Presentation The basic financial statements of the City are composed of the following:
Government-wide financial statements
Fund financial statements
Notes to the basic financial statements
108
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
30 Note 1: Summary of Significant Accounting Policies (Continued) b. Measurement Focus, Basis of Accounting, and Basis of Presentation (Continued) Government-Wide Financial Statements: Government-wide financial statements display information about the reporting government as a whole, except for its fiduciary activities.
These statements include a single column for the governmental activities of the primary government. The City of Aliso Viejo has no business-type activities. Eliminations have been made in the Statement of Activities so that certain allocated expenses are recorded only once (by the function to which they were allocated). However, general government expenses have not been allocated as indirect expenses to the various functions of the City.
Government-wide financial statements are presented using the economic resources measurement focus and the accrual basis of accounting. Under the economic resources measurement focus, all (both current and long-term) economic resources and obligations of the reporting government are reported in the government-wide financial statements. Basis of accounting refers to when revenues and expenses are recognized in the accounts and reported in the financial statements. Under the accrual basis of accounting, revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place.
Program revenues include charges for services, special assessments, and program payments. Program revenues are netted with program expenses in the Statement of Activities, to present the net cost of each program.
Amounts paid to acquire capital assets are capitalized as assets in the government-wide financial statements, rather than reported as an expenditure. Proceeds of long-term debt are recorded as a liability in the government-wide financial statements, rather than as another financing source. Amounts paid to reduce long-term indebtedness of the reporting government are reported as a reduction of the related liability, rather than as an expenditure.
Fund Financial Statements: 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 selfbalancing accounts that comprise its assets, liabilities, fund balances, 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.
Fund financial statements for the primary government’s governmental, and fiduciary funds are presented after the government-wide financial statements. These statements display information about major funds individually and other funds in the aggregate for governmental funds. Fiduciary statements include financial information for fiduciary funds. Fiduciary funds of the City primarily represent assets held by the City in a custodial capacity for other individuals or organizations.
109
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
31 Note 1: Summary of Significant Accounting Policies (Continued) b. Measurement Focus, Basis of Accounting, and Basis of Presentation (Continued) Governmental Funds: In the fund financial statements, governmental funds are presented using the modified-accrual basis of accounting. Their revenues are recognized when they become measurable and available as net current assets. Measurable means that the amounts can be estimated, or otherwise determined. Available means that the amounts were collected during the reporting period or soon enough thereafter to be available to finance the expenditures accrued for the reporting period. The City uses an availability period of 60 days.
Sales taxes, property taxes, franchise taxes, gas taxes, motor vehicle license fee, transient occupancy taxes, grants, 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 to the extent normally collected within the availability period. Other revenue items are considered to be measurable and available where cash is received by the government.
Revenue recognition is subject to the measurable and availability criteria for the governmental funds in the fund financial statements. Exchange transactions are recognized as revenues in the period in which they are earned (i.e., the related goods or services are provided). Locally imposed derived tax revenues are recognized as revenues in the period in which the underlying exchange transaction upon which they are based takes place. Imposed nonexchange transactions are recognized as revenues in the period for which they were imposed.
If the period of use is not specified, they are recognized as revenues when an enforceable legal claim to the revenues arises or when they are received, whichever occurs first.
Government-mandated and voluntary non-exchange transactions are recognized as revenues when all applicable eligibility requirements have been met. Revenues, expenses, gains, losses, assets, and liabilities resulting from non-exchange transactions are recognized in accordance with the requirements of GASB Statement No. 33 which requires that local governments defer grant revenue that is not received within 60 days after the fiscal year ends to meet the “available” criteria of revenue recognition.
In the fund financial statements, governmental funds are presented using the current financial resources measurement focus. This means that only current assets and current liabilities are generally included on their balance sheets. The reported fund balance (net current assets) is considered to be a measure of “available spendable resources.” Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of “available spendable resources” during a period.
Non-current portions of long-term receivables due to governmental funds are reported on their balance sheets in spite of their spending measurement focus. Special reporting treatments are used to indicate, however, that they should not be considered “available spendable resources,” since they do not represent net current assets. 110
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
32 Note 1: Summary of Significant Accounting Policies (Continued) b. Measurement Focus, Basis of Accounting, and Basis of Presentation (Continued) Recognition of governmental fund type revenue represented by non-current receivables are deferred until they become current receivables. Non-current portions of other long-term receivables are classified as non spendable fund balance.
Because of their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by non-current liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities.
Amounts expended to acquire capital assets are recorded as expenditures in the year that resources were expended, rather than as fund assets. The proceeds of long-term debt are recorded as another financing source rather than as a fund liability. Amounts paid to reduce long-term indebtedness are reported as fund expenditures.
When both, restricted and unrestricted resources, are combined in a fund, expenses are considered to be paid first from restricted resources, and then from unrestricted resources. c. Fund Classifications
The City reports the following major governmental funds:
General Fund: The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund.
Other Grants Special Revenue Fund: This fund is used to account for state, local, and other grants received such as Prop 10, CalRecycle, and the urban Runoff Grant. The fund does not qualify to be presented as major, however the client has elected to present it as such for FY 2022
Aliso Viejo Center Special Revenue Fund: This fund is used to account for the operations of the Aliso Viejo Center. The Aliso Viejo Center is a City owned facility that serves as an ideal venue to accommodate an array of functions, such as banquets, wedding celebrations, conferences and corporate events. Revenues are generated from events held at the facility.
Federal Grants Special Revenue Fund: This fund is used to account for Federal Grants received by the City for various projects. Grants included are FTA Grants, T.A.R.P Funds, Federal Community Development Block Grants, and Energy Efficiency and Conservation Block Grants.
Additionally, the government reports the following fund types:
Special Revenue Funds: These funds are used to account for revenues which are legally restricted to expenditures for special purposes.
111
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
33 Note 1: Summary of Significant Accounting Policies (Continued) c. Fund Classifications (Continued)
Capital Projects Funds: These funds are used to account for the financial resources used for the acquisition of capital assets and are funded by the General Fund, Gas Tax Fund, Measure M Fund, and the Federal Grants Fund.
Custodial Funds: These funds are used to account for special assessments received for which the City acts as an agent for all Community Facilities District debt activity. d. Cash and Investments
Investments are reported in the accompanying statement of net position at fair value. Changes in fair value that occur during a fiscal year are recognized as investment income reported for that fiscal year. Investment income includes interest earnings and changes in fair value. The City pools cash and investments of all funds. Each fund’s share in this pool is displayed in the accompanying financial statements as cash and investments. Investment income earned by the pooled investments is allocated to the various funds based on each fund’s average cash and investment balance, except for investment income associated with funds not legally required to receive pooled investment income which has been assigned to and recorded as revenue of the General Fund, as provided by California Government Code Section 53647. e. Prepaids
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both, the government-wide and fund financial statements.
Prepaid items are reported in the governmental funds under the consumption method and are offset by a reservation of fund balance to indicate that they are not spendable for appropriation and are not expendable financial resources.
f. 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. Donated capital assets, donated works of art and similar items, and capital assets received in a service concession arrangement are reported at acquisition value rather than fair value. Generally, capital asset purchases in excess of $5,000 are capitalized if they have an expected useful life of three years or more.
Capital assets include public domain (infrastructure) general capital assets consisting of certain improvements including roads, streets, sidewalks, medians, and storm drains. The City has elected to include infrastructure capital assets in their entirety (e.g., prior to 1980) in compliance with requirements of GASB Statement No. 34.
112
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
34 Note 1: Summary of Significant Accounting Policies (Continued) f. Capital Assets (Continued)
Capital assets used in operations are depreciated over their estimated useful lives, except for streets, of which the City reports based on using the modified approach. The City uses the straight-line method in the government-wide financial statements for depreciating storm drains, park equipment, buildings, equipment and furniture, and leasehold improvements.
Depreciation is charged as an expense against operations and accumulated depreciation is reported on the respective statement of net position. The range of lives used for depreciation purposes for each capital asset class are as follows:
Items Useful Life
Buildings 100 years
Improvements 3-50 years
Equipment and furniture 5 years
Infrastructure:
Sidewalks 20-50 years
Curb and gutters 20-50 years
Medians 20-50 years
Traffic signals 15 years
Street signs 15 years
Storm drains 20-50 years
Park equipment 10-50 years
The City of Aliso Viejo met all the criteria required by GASB Statement No. 34 to report their streets and roads network using the modified approach, which allows those infrastructure assets to be non-depreciable. Hence, all expenditures made for the streets and roads asset network (except for additions and improvements) are expensed in the period incurred.
Additions or improvements to the streets and roads network assets that increase the capacity or efficiency of those assets (rather than preserve the useful life) are capitalized. The City elected to set their minimum acceptable level of condition at 80 for all streets and roads network systems based on their pavement management system scale of 1 to 100. The City plans to test/assess the condition level at least every three years. See the accompanying Required Supplementary Information section for additional information. g. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position 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 position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then. The City has deferred outflows of resources related to pension and OPEB items.
113
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
35 Note 1: Summary of Significant Accounting Policies (Continued) g. Deferred Outflows/Inflows of Resources (Continued)
In addition to liabilities, the statement of financial position 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 position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City of Aliso Viejo has three types of items. Unavailable revenue is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from various sources such as, grant revenue, taxes, and other special revenue. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. The second item is deferred pension and OPEB related items. The third item is deferred inflows related to leases.
h. Net Pension Liabilities
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, pension expense, information about the fiduciary net position of the Plan, and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.
Generally accepted accounting principles requires that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used.
Valuation Date (VD) June 30, 2020
Measurement Date (MD) June 30, 2021
Measurement Period (MP) July 1, 2020 to June 30, 2021
i. Compensated Absences
In accordance with generally accepted accounting principles, an employee benefits payable liability is recorded for unused vacation and similar compensatory leave balances. The employee’s entitlements to these balances are attributable to services already rendered and it is probable that virtually all of these balances will be liquidated by either paid time off or payments upon termination or retirement.
114
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
36 Note 1: Summary of Significant Accounting Policies (Continued) j. 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. Accordingly, the City recognizes as revenue only those taxes which are received within 60 days after year end.
The property tax calendar is as follows:
Lien Date: January 1
Levy Date: July 1
Due Date: First Installment - November 1
Second Installment - February 1
Delinquent Date: First Installment - December 10
Second Installment - April 10
k. Use of Estimates
The preparation of basic financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenditures during the reporting period. Actual results could differ from those estimates.
l. Net Position Flow Assumption
Sometimes the City will fund outlays for a particular purpose from both, restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted – net position and unrestricted – net position in the government-wide, a flow assumption must be made about the order in which the resources are considered to be applied. It is the City’s policy to consider restricted – net position to have been depleted before unrestricted – net position is applied. m. Fund Balance Flow Assumption
Sometimes the City will fund outlays for a particular purpose from both, restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the government’s policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last.
115
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
37 Note 1: Summary of Significant Accounting Policies (Continued) n. Fund Equity and Net Position
In the fund financial statements, government funds report the following fund balance classification:
Nonspendable include 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 include amounts that are constrained on the use of resources by either (a) external creditors, grantors, contributors, or laws of regulations of other governments or (b) by law through constitutional provisions or enabling legislation.
Committed include amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government’s highest authority, City Council. The formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution.
Assigned include amounts that are constrained by the government’s intent to be used for specific purposes, but are neither restricted nor committed. The City Manager and/or Financial Services Director is authorized to assign amounts to a specific purpose, which was established by the governing through a resolution.
Unassigned include the residual amounts that have not been restricted, committed, or assigned to specific purposes.
An individual governmental fund could include nonspendable resources and amounts that are restricted or unrestricted (committed, assigned, or unassigned) or any combination of those classifications. Restricted or unrestricted amounts are to be considered spent when an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available and committed, assigned, then unassigned amounts are considered to have been spent when an expenditure is incurred for purposes for which amounts in any of those unrestricted fund balance classifications can be used.
In other governmental funds it is not appropriate to report a positive unassigned fund balance amount. However, in governmental funds other than the general fund, if expenditures incurred for specific purposes exceed the amounts that are restricted, committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that fund.
In the government-wide financial statements and fiduciary fund financial statements, net position is reported in three categories: net investment in capital assets, restricted net position and unrestricted. The restricted portion of net position represents net position restricted by parties outside of the City (such as creditors, grantors, contributors, and laws and regulations of over governments) and includes unspent proceeds of bonds issued to acquire or construct capital assets. The City’s other restricted net position is temporarily restricted (ultimately expendable assets). All other net position is considered unrestricted.
116
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
38 Note 1: Summary of Significant Accounting Policies (Continued) o. Other Postemployment Benefits (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, OPEB expense, information about the fiduciary net position of the City’s plan (OPEB Plan), and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined on the same basis. For this purpose, benefit payments are reported at fair value.
Generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used:
Valuation Date (VD) June 30, 2021
Measurement Date (MD) June 30, 2021
Measurement Period (MP) July 1, 2020 to June 30, 2021
p. Implementation of New GASB Pronouncement
Governmental Accounting Standards Board has issued Statement No. 87, Leases. The objective of this Statement is to better meet the information needs of financial statement users by improving accounting and financial reporting for leases by governments. This Statement increases the usefulness of governments’ financial statements by requiring recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. Under this Statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about governments’ leasing activities.
117
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
39 II. DETAILED NOTES ON ALL FUNDS
Note 2: Cash and Investments
Cash and investments as of June 30, 2022, are classified in the accompanying financial statements as follows:
Statement of Net Position:
Cash and investments 40,675,427 $
Statement of Fiduciary Net Position:
Cash and investments 44,257 Cash and investments held by fiscal agent 4,375,616 Total cash and investments 45,095,300 $ Cash and investments as of June 30, 2022 consists of the following:
Deposits with financial institutions 10,361,118 $
Cash on hand 2,797
Investments 34,731,385 Total cash and investments 45,095,300 $ Investments Authorized by the California Government Code and the City’s Investment Policy The following table identifies the investment types that are authorized for the City by the California Government Code and the City’s investment policy. The table also identifies certain provisions of the California Government Code (or the City’s investment policy, if more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s investment policy. The City Treasurer may waive the collateral requirement for deposits that are fully insured up to $250,000 by the FDIC.
118
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
40 Note 2: Cash and Investments (Continued)
Authorized by Maximum Maximum
Investment Types Authorized Investment Maximum Percentage of Investment in by State Law Policy Maturity Portfolio One Issuer*
U.S. Treasury Obligations Yes 5 years 100% None
U.S. Agency Securities Yes 5 years 60% 35% per Agency
Banker's Acceptances Yes 180 days 20% 5% per issuer
Commercial Paper Yes 270 days 20% 5%
Certificates of Deposit Yes 5 years 30% 250,000 $
Negotiable Certificates of Deposit Yes 5 years 30% 20%
Repurchase Agreements Yes 92 days 20% 2,000,000 Medium-Term Notes Yes 5 years 30% 1,000,000 Money Market Mutual Funds Yes None 10% 1,000,000
Local Agency Investment Fund Yes None 100% 75,000,000
* Based on state law requirements or investment policy requirements, whichever is more restrictive.
Investments Authorized by Debt Agreements
Investment of debt proceeds held by bond trustee are 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 trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk.
Maximum Maximum
Investment Types Authority Maximum Percentage of Investment in by State Law Maturity Portfolio One Issuer*
U.S. Treasury Obligations 5 years 75% None
U.S. Agency Securities 5 years 60% 35%
Banker's Acceptances 180 days 20% 3,000,000 $
Commercial Paper 270 days 20% None
Money Market Funds N/A 10% None
Investment Agreements None None None
Defeasance Obligations None None None
Municipal Obligations None None None
Local Agency Investment Fund None None 75,000,000 $
119
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
41 Note 2: Cash and Investments (Continued)
Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value is to changes in market interest rates. Information about the sensitivity of the fair values of the City’s investments to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity:
Investment Type Fair Value
12 Months or
Less
13 to 24
Months
25 to 60
Months
State Investment Pool 8,637,414 $ 8,637,414 $ - $ - $
Negotiable Certificates of Deposit 4,933,096 979,669 1,422,991 2,530,436 Federal Home Loan Mtg Corp 456,959 - - 456,959 Federal Home Loan Bank 4,968,040 3,482,155 493,642 992,243 Federal Farm Credit Bank 1,686,754 495,960 963,856 226,938 U.S. Treasury obligations 7,732,695 4,453,944 491,016 2,787,735 Medium Term Notes 1,941,884 - 495,176 1,446,708 Held By Fiscal Agent:
U.S. Treasury money market 2,859,666 1,541,953 439,386 878,327 Federal Home Loan Bank 1,514,877 - - 1,514,877 Total 34,731,385 $ 19,591,095 $ 4,306,067 $ 10,834,223 $ Remaining Maturity
Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented on the next page is the minimum rating required by (where applicable) the California Government Code, the City’s investment policy, or debt agreements and the actual rating as of year-end for each investment type:
120
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
42 Note 2: Cash and Investments (Continued)
Investment Type Total
Minimum Legal
Rating Aaa Aa1 Not Rated
State Investment Pool 8,637,414 $ N/A - $ - $ 8,637,414 $ Negotiable Certificates of Deposit 4,933,096 N/A - - 4,933,096 Federal Home Loan Mtg Corp 456,959 Aaa 456,959 - - Federal Home Loan Bank 4,968,040 Aaa 4,968,040 - - Federal Farm Credit Bank 1,686,754 Aaa 1,686,754 - - U.S. Treasury obligations 7,732,695 Aaa 7,732,695 - - Medium Term Notes 1,941,884 Aaa 1,941,884 - - Held By Fiscal Agent:
U.S. Treasury money market 2,859,666 Aaa 2,859,666 - - Federal Home Loan Bank 1,514,877 Aaa 1,514,877 - - Total 34,731,385 $ 21,160,875 $ - $ 13,570,510 $ Ratings as of Year End
Concentration of Credit Risk
The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. Investments in any one issuer (other than U.S. Treasury securities, mutual funds and external investment pools) that represent 5% or more of the total City’s investments are as follows:
Issuer Investment Type
Reported
amount
Percentage
of portfolio
Federal Home Loan Bank Federal Agency Securities 6,482,917 $ 18.7% Custodial Credit Risk
Custodial credit risk for deposits is the risk that in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits:
The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.
121
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
43 Note 2: Cash and Investments (Continued)
Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California.
The fair value of the City’s investment in this pool is reported in the accompanying financial statements at an amount 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. Currently, LAIF does not have an investment rating.
Fair Value Measurements
The City categorizes its fair value measurements 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 asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs.
The City has the following recurring fair value measurements as of June 30, 2022:
Total Level 1 Level 2 Level 3
Negotiable Certificates of Deposit 4,933,096 $ - $ 4,933,096 $ - $ Federal Home Loan Mtg Corp 456,959 - 456,959 - Federal Home Loan Bank 4,968,040 - 4,968,040 - Federal Farm Credit Bank 1,686,754 - 1,686,754 - U.S. Treasury obligations 7,732,695 7,732,695 - - Medium Term Notes 1,941,884 - 1,941,884 - Held By Fiscal Agent:
U.S. Treasury money market 2,859,666 2,859,666 - - Federal Home Loan Bank 1,514,877 - 1,514,877 - Total investments by fair value level 26,093,971 10,592,361 $ 15,501,610 $ - $ Investments not subject to fair value:
State Investment Pool 8,637,414 Total 34,731,385 $
Fair Value Measurement Using
The following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used:
Level 1: inputs are unadjusted quoted prices in active markets for identical assets; level 2: quoted prices for similar assets or liabilities in active markets; level 3: inputs to the valuation methodology are unobservable and significant to the fair value measurement. 122
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
44 Note 3: Lease Receivable
City Hall Space - Suite 255
On July 1, 2021, the City entered into a 31-month lease as Lessor for the use of City Hall Space - Suite 255. An initial lease receivable was recorded in the amount of $186,106. As of June 30, 2022, the value of the lease receivable is $115,478. The lessee is required to make monthly fixed payments of $5,920. The lease has an interest rate of 0.7270%. The building’s estimated useful life was 30 months as of the contract commencement. The value of the deferred inflow of resources as of June 30, 2022 was $119,868, and the City recognized lease revenue of $72,041 during the fiscal year.
City Hall Space - Suite 280
On August 1, 2021, the City entered into a 23-month lease as Lessor for the use of City Hall Space - Suite 280. An initial lease receivable was recorded in the amount of $179,923. As of June 30, 2022, the value of the lease receivable is $99,144. The lessee is required to make monthly fixed payments of $8,134. The lease has an interest rate of 0.4660%. The building’s estimated useful life was 22 months as of the contract commencement. The value of the deferred inflow of resources as of June 30, 2022 was $101,435, and the City recognized lease revenue of $86,050 during the fiscal year.
At June 30, 2022, the City had total outstanding lease receivables of $214,621 and related deferred inflows of resources of $221,303.
Note 4: Interfund Receivables, Payables and Transfers
Due To/From Other Funds
Interfund receivables and payables as of June 30, 2022, consisted of the following:
Due From Other Funds Other Grants
Other
Governmental
Funds Total
General Fund 314,029 $ 8,622 $ 322,651 $
$ 8,622 314,029 $ 322,651 $
Due To Other Funds
The amount due from the General Fund to other governmental funds was to cover negative cash and are expected to be repaid within one year.
123
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
45 Note 4: Interfund Receivables, Payables and Transfers (Continued) Interfund Transfers
Interfund transfers for the year ended June 30, 2022, consisted of the following:
Transfers In General Fund Other Grants
Aliso Viejo
Center Federal Grants
Other
Governmental
Funds Total
General Fund - $ 53,818 $ 479,243 $ 2,815,694 $ - $ 3,348,755 $ Other Governmental Funds 1,082,257 294,751 - 27,548 1,482,659 2,887,215 Total 1,082,257 $ 348,569 $ 479,243 $ 2,843,242 $ 1,482,659 $ 6,235,970 $ Transfers Out
Transfers into the General Fund included funds from ARPA, LEAP grant, CDBG and SMP admin hours reimbursement as well as Aliso Viejo Center net income. Transfers into Public Safety Grants fund included reimbursements for expenditures in compliance with ARPA. Transfers into Aquatic Center included funds to cover operational gap for the facility. Transfers into Street Improvement included slurry seal, signal improvement, and rehabilitation projects. Transfers into Capital Improvements included improvement projects at various City facilities and permit tracking Energov system. Transfers into Storm Water fund included monitoring costs for the Wetland and Dairy Fork storm water projects. Transfer into Debt Service included principal and interest payments for the 2019 COP. Transfers out of the General Fund included funding the operational gap for Aquatic Center, AV Ranch improvements, Aquatic Center improvements, permit tracking Energov software system, monitoring costs for the Wetland and Dairy Fork storm water projects, and principal and interest payments for the City’s 2019 COP. Transfer out of the TCRF, Gas Tax, Measure M, and SB1 funds included street improvement projects. Transfers out of Other Grants included CalRecyle reimbursement for a street project, SB2 reimbursement for permit tracking Energov software system, and Per Capita Grant reimbursements for AV Ranch video surveillance system as well as audio and video equipment. Transfers out of the Federal Grants included reimbursing General Fund for expenditures in compliance with ARPA and CDBG monies for administrative staff hours. Transfers out of the Aliso Viejo Center to General Fund included net income from the Center's operations.
124
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
46 Note 5: Capital & Intangible Assets
Capital asset activity for the year ended June 30, 2022, was as follows:
Balance Balance
July 1, 2021 Additions Deletions* June 30, 2022
Capital assets, not being depreciated:
Land $ 14,315,978 $ - $ - $ 14,315,978
Infrastructure - streets 53,871,430 - - 53,871,430
Construction in progress* 217,205 420,330 (420,330) 217,205 Total capital assets, not
being depreciated 68,404,613 420,330 (420,330) 68,404,613 Capital assets, being depreciated:
Buildings 41,164,809 - - 41,164,809
Improvements 722,675 274,347 - 997,022
Equipment 1,040,049 120,983 - 1,161,032
Furniture 274,034 25,000 - 299,034
Infrastructure - other* 26,136,674 - - 26,136,674
Total capital assets, being
depreciated 69,338,241 420,330 - 69,758,571
Accumulated Depreciation:
Buildings (4,262,932) (550,674) - (4,813,606)
Improvements (252,751) (77,574) - (330,325)
Equipment (667,234) (134,999) - (802,233)
Furniture (84,409) (50,884) - (135,293)
Infrastructure - other (18,497,562) (479,335) - (18,976,897) Total accumulated depreciation (23,764,888) (1,293,466) - (25,058,354) Total capital assets, being
depreciated, net 45,573,353 (873,136) - 44,700,217
Capital assets, net $ 113,977,966 $ (452,806) $ (420,330) $ 113,104,830 *Other infrastructure consisted of sidewalks, curbs and gutters, medians, traffic signals, street signs, storm drains, and park equipment. Construction in progress consists primarily of additions to infrastructure and buildings. Certain deletions in the capital assets activity schedule shown above are the result of reclassifications of assets into different classes of assets or reclassification to expenses when a project is determined not to meet the capitalization requirement. If assets that are disposed of are not fully depreciated at the time of the disposal, these deletions in the asset classes may not be accompanied by a like decrease in the accumulated depreciation for the same asset class.
Depreciation expense by function for the fiscal year ending June 30, 2022 is as follows:
General government 704,331 $
Community development 4,344 Public safety 96,485 Public works 484,884 Community services 3,422 Total 1,293,466 $
125
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
47 Note 5: Capital & Intangible Assets (Continued)
A summary of changes in intangible assets of the City for the year ending June 30, 2022 is as follows:
Balance Balance
July 1, 2021 Additions* Deletions June 30, 2022
Intangible assets, being amortized:
Intangible right to use asset $ - $ 23,131 $ - $ 23,131 Accumulated amortization - (8,269) - (8,269)
Intangible assets, net of amortization: $ - 14,862 $ $ - 14,862 $ *Additions resulted from the implementation of GASB Statement No. 87, Leases.
Note 6: Non-current Liabilities
Compensated Absences
The City’s policies relating to employee leave benefits are described in Note 1.i. This liability will be paid in future years from future resources primarily from the General Fund.
Changes in compensated absences for the fiscal year ended June 30, 2022, were as follows:
Balance Balance
Amount Due
Within
July 1, 2021 Additions Deletions June 30, 2022 One Year Compensated absences 302,117 $ 154,348 $ 211,482 $ 244,983 $ 68,038 $ Remainder of page left blank
126
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
48 Note 6: Non-current Liabilities (Continued)
Changes in non-current liabilities for the fiscal year ended June 30, 2022, were as follows:
Balance Balance
Amount Due
Within
July 1, 2021 Additions Deletions June 30, 2022 One Year Bonds payable 12,020,000 $ - $ 235,000 $ 11,785,000 $ 240,000 $ Unamortized premium 935,795 - 32,269 903,526 - Lease liability - 23,131 8,625 14,506 8,682 Total 12,955,795 $ 23,131 $ 275,894 $ 12,703,032 $ 248,682 $ Bonds Payable – Direct Placement
On July 31, 2019, the City issued the 2019 Certificates of Participation (COP) in the amount of $12,250,000 in order to finance a portion of the construction of improvements to the Aliso Viejo Ranch and pay delivery costs incurred in connection with the execution, delivery and sale of the Certificates. The 2019 COP mature annually on November 1 through 2039 and bear interest ranging from 2.0% to 4.0%. In the event of default, the City waives all rights to any rentals received by the trustee through re-letting of the lease agreement. The City agrees to pay any and all costs, loss, or damage, howsoever occurring, as a result of any re-entry or re-letting.
The annual debt service requirements for the 2019 COPs outstanding at June 30, 2022 are as follows:
Year Ending June 30, Principal Interest Total
2023 240,000 $ 415,350 $ 655,350 $
2024 250,000 405,750 655,750 2025 260,000 395,750 655,750 2026 270,000 385,350 655,350
2027 280,000 374,550 654,550
2028 - 2032 1,595,000 1,694,150 3,289,150 2033 - 2037 1,930,000 1,349,750 3,279,750 2038 - 2042 2,350,000 935,850 3,285,850
2043 - 2047 2,755,000 531,000 3,286,000
2048 - 2050 1,855,000 112,350 1,967,350
Total 11,785,000 $ 6,599,850 $ 18,384,850 $
127
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
49 Note 6: Non-current Liabilities (Continued)
Lease Liability
On July 1, 2021, the City entered into a 32-month lease as Lessee for the use of Ricoh - Copiers.
An initial lease liability was recorded in the amount of $23,131. As of June 30, 2022, the value of the lease liability is $14,506. The City is required to make monthly fixed payments of $730. The lease has an interest rate of 0.7270%. The Equipment estimated useful life was 32 months as of the contract commencement. The value of the right to use asset as of June 30, 2022 of $23,131 with accumulated amortization of $8,269 is included with intangible assets, detailed in Note 5.
Estimated future debt service requirements are as follows:
Year Ending June 30, Principal Interest Total
2023 8,682 $ 77 $ 8,759 $
2024 5,824 16 5,840 Total 14,506 $ 93 $ 14,599 $
Note 7: Debt Without Government Commitment Community Facilities District No. 2005-01 In November 2007, the City issued $34,070,000 in Special Tax Bonds for Community Facilities District No. 2005-01 (Glenwood at Aliso Viejo). The bonds were issued to finance the acquisition and improvement of various public facilities within Community Facilities District 2005-01 (Glenwood at Aliso Viejo). The City later refinanced the 2007 Special Tax Bonds with the issuance of the 2014 Special Tax Bonds.
On September 1, 2014, the City issued $32,270,000 in Special Tax Bonds for Community Facilities District No. 2005-01 (Glenwood at Aliso Viejo). Interest payments commenced on September 1, 2014, and are paid semiannually thereafter on September 1 and March 1 of each year. Principal payments commence on September 1, 2014, and are paid annually in amounts ranging from $295,000 to $2,850,000 until September 1, 2038. The bonds were issued to refinance the outstanding 2007 Special Tax Bonds and cause the early redemption thereof on March 1, 2014. The principal balance outstanding at June 30, 2022 is $28,240,000.
128
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
50 Note 8: Pension Plan
A. General Information about the Pension Plan
Plan Description
All qualified permanent and probationary employees are eligible to participate in the Public Agency Cost-Sharing Multiple-Employer Defined Benefit Pension Plan (Plan or PERF C) administered by the California Public Employees’ Retirement System (CalPERS.) The Plan consists of a miscellaneous pool and a safety pool (also referred to as “risk pools”), which are comprised of individual employer miscellaneous and safety rate plans, respectively. Plan assets may be used to pay benefits for any employer rate plan of the safety and miscellaneous pools.
Accordingly, rate plans within the safety or miscellaneous pools are not separate plans under generally accepted accounting principles. Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The City participates in two rate plans (both miscellaneous). Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS’ website, at www.calpers.ca.gov.
Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments, and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 5 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.
The Plan operates under the provisions of the California Public Employees’ Retirement Law (PERL), the California Public Employees’ Pension Reform Act of 2013 (PEPRA), and the regulations, procedures and policies adopted by the CalPERS Board of Administration. The Plan’s authority to establish and amend the benefit terms are set by the PERL and PEPRA, and may be amended by the California state legislature and in some cases require approval by the CalPERS Board.
The Plan’s provisions and benefits in effect at June 30, 2022 are summarized as follows:
PEPRA
Miscellaneous Miscellaneous
And prior to On or after
Hire Date January 1, 2013* January 1, 2013
Benefit formula 2.7% @ 55 2% @ 62
Benefit vesting schedule 5 years of service 5 years of service Benefit payments monthly for life monthly for life
Retirement age 50 - 55 52 - 67
Monthly benefits, as a % eligible compensation 2.0% to 2.7% 1.0% - 2.5% Required employer contribution rates 10.34% 7.59%
129
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
51 Note 8: Pension Plan (Continued)
A. General Information about the Pension Plan (Continued) Contributions
Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’s annual actuarial valuation process. For public agency cost-sharing plans covered by either the Miscellaneous or Safety risk pools, the Plan’s actuarially determined rate is based on the estimated amount necessary to pay the Plan’s allocated share of the risk pool’s costs of benefits earned by employees during the year, and any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer 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 contribution requirements are classified as plan member contributions. Employer Contributions to the Plan for the fiscal year ended June 30, 2022 were $318,599. The actual employer payments of $319,112 made to CalPERS by the City during the measurement period ended June 30, 2021, differed from the City’s proportionate share of the employer’s contributions of $325,719 by $6,607, which is being amortized over the expected average remaining service lifetime in the Public Agency Cost-Sharing Multiple Employer Plan.
B. Net Pension Liability
The City’s net pension liability for the Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of the Plan is measured as of June 30, 2021, using an annual actuarial valuation as of June 30, 2020 rolled forward to June 30, 2021 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is as follows.
Actuarial Methods and Assumptions Used to Determine Total Pension Liability All other actuarial assumptions used in the June 30, 2020 valuation were based on the results of an actuarial experience study for the period from 1997 to 2015, including updates to salary increase, mortality and retirement rates. The Experience Study report can be obtained at CalPERS’s website at www.calpers.ca.gov.
130
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
52 Note 8: Pension Plan (Continued)
B. Net Pension Liability (Continued)
Valuation Date June 30, 2020
Measurement Date June 30, 2021
Actuarial Cost Method Entry Age Normal in accordance with the requirements of GASB 68
Asset Valuation Method Market Value of Assets
Actuarial Assumptions:
Discount Rate 7.15%
Inflation 2.50%
Salary Increases Varies by entry age and service
Mortality Rate Table (1) Derived using CalPERS’ membership data for all Funds
Post Retirement Benefit Increase The lesser of contract COLA or 2.50% until Purchasing Power Protection Allowance floor on
purchasing power applies, 2.50% thereafter.
(1) The mortality table used was developed based on CalPERS’ specific data. The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and Post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries.
For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from December 2017 that can be found on the CalPERS website..
Long-term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.
131
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
53 Note 8: Pension Plan (Continued)
B. Net Pension Liability (Continued)
The expected real rates of return by asset class are as follows:
Asset Class1
Assumed
Asset
Allocation
Real Return
Years 1 - 102
Real Return
Years 11+ 3
Public equity 50% 4.80% 5.98%
Fixed income 28% 1.00% 2.62%
Inflation assets - 0.77% 1.81%
Private equity 8% 6.30% 7.23%
Real assets 13% 3.75% 4.93%
Liquidity 1% - -0.92%
2 An expected inflation of 2.0% used for this period
3 An expected inflation of 2.92% used for this period
1 In the System's ACFR, fixed income is included in global debt securities; liquidity is included in short-term investments; inflation assets are included in both global equity securities and global debt securities.
Change of Assumptions
There were no change of assumptions for measurement date June 30, 2021.
Discount Rate
The discount rate used to measure the total pension liability for PERF C was 7.15%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
Subsequent Events
On July 12, 2021, CalPERS reported a preliminary 21.3% net return on investments for fiscal year 2020-21. Based on the thresholds specified in CalPERS Funding Risk Mitigation policy, the excess return of 14.3% prescribes a reduction in investment volatility that corresponds to a reduction in the discount rate used for funding purposes of 0.20%, from 7.00% to 6.80%. Since CalPERS was in the final stages of the four-year Asset Liability Management (ALM) cycle, the board elected to defer any changes to the asset allocation until the ALM process concluded, and the board could make its final decision on the asset allocation in November 2021.
132
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
54 Note 8: Pension Plan (Continued)
B. Net Pension Liability (Continued)
On November 17, 2021, the board adopted a new strategic asset allocation. The new asset allocation along with the new capital market assumptions, economic assumptions and administrative expense assumption support a discount rate of 6.90% (net of investment expense but without a reduction for administrative expense) for financial reporting purposes. This includes a reduction in the price inflation assumption from 2.50% to 2.30% as recommended in the November 2021 CalPERS Experience Study and Review of Actuarial Assumptions. This study also recommended modifications to retirement rates, termination rates, mortality rates and rates of salary increases that were adopted by the board. These new assumptions will be reflected in the GASB 68 accounting valuation reports for the June 30, 2022, measurement date.
Pension Plan Fiduciary Net Position
Information about the pension plan’s assets, deferred outflows of resources, liabilities, deferred inflows of resources, and fiduciary net position are presented in CalPERS’s audited financial statements, which are publicly available reports that can be obtained at CalPERS’s website at www.calpers.ca.gov. The plan’s fiduciary net position and additions to/deductions from the plan’s fiduciary net position have been determined on the same basis used by the pension plan, which is the economic resources measurement focus and the accrual basis of accounting. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan.
Investments are reported at fair value.
C. Proportionate Share of Net Pension Liability
The following table shows the Plan’s proportionate share of the net pension liability over the measurement period.
Plan Total
Pension Liability
Plan Fiduciary
Net Position
Plan Net
Pension Liability
Balance at 6/30/2020 (VD) 7,475,465 $ 6,439,634 $ 1,035,831 $ Balance at 6/30/2021 (MD) 8,329,229 8,281,359 47,870 Net changes during 2020 - 2021 853,764 $ 1,841,725 $ (987,961) $ Valuation Date (VD), Measurement Date (MD)
The City’s proportion of the net pension liability was determined by CalPERS using the output from the Actuarial Valuation System and the fiduciary net position, as provided in the CalPERS Public Agency Cost-Sharing Allocation Methodology Report, which is a publicly available report that can be obtained at CalPERS’ website, at www.calpers.ca.gov. The City’s proportionate share of the net pension liability for the miscellaneous Plan as of the June 30, 2020 and 2021 measurement dates was as follows:
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CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
55 Note 8: Pension Plan (Continued)
C. Proportionate Share of Net Pension Liability (Continued) Proportionate Share - June 30, 2020 0.02456%
Proportionate Share - June 30, 2021 0.00252%
Change - Increase (Decrease) -0.02204%
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate
The following presents the City’s proportionate share of the net pension liability of the Plan as of the measurement date, calculated using the discount rate of 7.15 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (6.15 percent) or 1 percentage-point higher (8.15 percent) than the current rate:
Discount Rate - 1%
(6.15%)
Current Discount Rate
(7.15%)
Discount Rate + 1%
(8.15%)
Plan's Net Pension Liability / (Asset) 1,147,585 $ 47,870 $ (861,249) $ Amortization of Deferred Outflows and Deferred Inflows of Resources Under GASB 68, gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time.
The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense.
The amortization period differs depending on the source of the gain or loss:
Difference between projected
and actual earnings
5 year straight-line amortization
All other amounts Straight-line amortization over the expected average remaining service lives of all members that are
provided with benefits (active, inactive and retired) as of the beginning of the measurement period
The expected average remaining service lifetime (EARSL) is calculated by dividing the total future service years by the total number of plan participants (active, inactive, and retired) in the Public Agency Cost-Sharing Multiple-Employer Plan (PERF C).
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CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
56 Note 8: Pension Plan (Continued)
C. Proportionate Share of Net Pension Liability (Continued) The EARSL for PERF C for the measurement period ending June 30, 2021 is 3.7 years, which was obtained by dividing the total service years of 561,622 (the sum of remaining service lifetimes of the active employees) by 150,648 (the total number of participants: active, inactive, and retired) in PERF C. Inactive employees and retirees have remaining service lifetimes equal to 0. Total future service is based on the members’ probability of decrementing due to an event other than receiving a cash refund.
D. Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions
As of the start of the measurement period (July 1, 2020), the City’s net pension liability was $1,035,831. For the measurement period ending June 30, 2021 (the measurement date), the City incurred a pension credit of $611,736.
As of June 30, 2022, the City has deferred outflows and deferred inflows of resources related to pensions as follows:
Deferred Outflows
of Resources
Deferred Inflows of
Resources
Differences between expected and
actual experience
Differences between projected and
actual investments earnings
Differences between employer's contributions
and proprotionate share
Change in employer's proportion 184,954 19,778 Pension contributions made subsequent to measurement date 318,599 - Total 550,755 $ 72,529 $
$ - 5,368 $
41,788 -
10,963 41,834
The amounts above are net of outflows and inflows recognized in the 2020-21 measurement period expense. Contributions subsequent to the measurement date of $318,599 reported with deferred outflows of resources will be recognized as a reduction of the net pension liability in the upcoming fiscal year. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in future pension expense as follows:
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CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
57 Note 8: Pension Plan (Continued)
D. Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions (Continued)
Fiscal Year Ending
June 30:
Deferred
Outflows/(Inflows) of
Resources
2023 86,796 $
2024 59,460 2025 24,920
2026 (11,549) 2027 - Remaining -
E. Payable to the Pension Plan
At June 30, 2022, the City reported a payable of $12,821 for the outstanding amount of contributions to the pension plan required for the year ended June 30, 2022.
Note 9: Other Post-Employment Benefits (OPEB)
Plan Description
The City has established a Retiree Healthcare Plan (HC Plan), and participates in a singleemployer defined benefit retiree healthcare plan. Medical coverage is currently provided through CalPERS as permitted under the Public Employees’ Medical and Hospital Care Act (PEMHCA).
This coverage requires the employee to satisfy the requirements for retirement under CalPERS:
either (a) attainment of age 50 (age 52, if a miscellaneous employee new to PERS on or after January 1, 2013) with 5 years of State or public agency service or (b) an approved disability retirement.
The employee must begin his or her retirement benefit within 120 days of terminating employment with the City to be eligible to continue medical coverage through the agency and be entitled to the benefits described below. If an eligible employee is not already enrolled in the medical plan, he or she may enroll within 60 days of retirement, during any future open enrollment period or with a qualifying life event. In other words, it is the timing of initiating retirement benefits and not timing of enrollment in the medical program which determines whether or not a City retiree qualifies for lifetime medical coverage and any benefits defined in the PEMHCA resolution. Once eligible, coverage may be continued at the retiree’s option for his or her lifetime. A surviving spouse and other eligible dependents may also continue coverage.
PEMHCA Benefits provided: As a PEMHCA employer, the City is obligated to contribute toward the cost of retiree medical coverage for the retiree’s lifetime or until coverage is discontinued. The City maintains a resolution with CalPERS defining the level of the City’s contribution toward the cost of medical plan premiums for employees and retirees to be the PEMHCA minimum employer contribution (MEC). The MEC is $143 per month in 2021 and $149 per month in 2022. A separate financial report is not prepared for the HC Plan.
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CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
58 Note 9: Other Post-Employment Benefits (OPEB) (Continued) Employees Covered
As of the June 30, 2021 actuarial valuation, the following current and former employees were covered by the benefit terms under the HC Plan:
Active employees 29
Inactive employees or beneficiaries currently receiving benefits 4 Total 33
Contributions
City contributions to the Plan occur as benefits are paid to or on behalf of retirees. Benefit payments may occur in the form of direct payments for premiums and taxes (“explicit subsidies”) and/or indirect payments to retirees in the form of higher premiums for active employees (“implicit subsidies”). The City makes contributions to eligible retirees for their medical plan premiums when the retiree enrolls in a City sponsored health plan. The current monthly amount paid by the City is $149 per month per retiree. For the fiscal year ended June 30, 2022, the City’s cash contributions were $7,008 in payments for premiums and $497 in implicit contributions.
Total OPEB Liability
The City’s total OPEB liability was measured as of June 30, 2021 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2021, based on the following actuarial methods and assumptions:
Actuarial Assumptions:
Discount Rate 2.18%
Inflation 2.50%
Salary Increases 3.00%
Mortality Rate CalPERS 2017 Experience Study
Healthcare Trend Rate Getzen Model 2022_b published by the Society of Actuaries Discount Rate
The discount rate used to measure the total OPEB liability was 2.18% percent. The City is currently financing its OPEB liability on a pay‐as‐you‐go basis. With the City’s approval, the discount rate used in the valuation is based on the S&P Municipal Bond 20 Year High Grade Index. As of the beginning and end of the Measurement Period, use of this index results in discount rates of 2.66% on June 30, 2020 and 2.18% on June 30, 2021.
Changes of Assumptions
The discount rate was decreased from 2.66% to 2.18%.
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CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
59 Note 9: Other Post-Employment Benefits (OPEB) (Continued) Changes in the Total OPEB Liability
The changes in the total OPEB liability for the HC Plan are as follows:
Total OPEB
Liability (a)
Balance at June 30, 2021
(Measurement Date June 30, 2020) 436,717 $
Changes recognized for the measurement period:
Service Cost 61,087
Interest 13,141
Changes of assumptions 35,505
Plan experience differences 6,123 Benefit payments (7,597) Net Changes 108,259 Balance at June 30, 2022
(Measurement Date June 30, 2021) 544,976 $
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate The following presents the total OPEB liability of the City if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2021:
Current
1% Decrease Discount Rate 1% Increase
1.18% 2.18% 3.18%
Total OPEB Liability 646,664 $ 544,976 $ 464,285 $
138
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
60 Note 9: Other Post-Employment Benefits (OPEB) (Continued) Sensitivity of the Total OPEB Liability to Changes in the Health Care Cost Trend Rates The following presents the total OPEB liability of the Authority if it were calculated using health care cost trend rates that are one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2021:
Current
1% Decrease
Healthcare Cost
Trend Rates 1% Increase
Total OPEB Liability 445,900 $ 544,976 $ 676,136 $
Recognition of Deferred Outflows and Deferred Inflows of Resources Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time.
Amounts are first recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense.
The recognition period differs depending on the source of the gain or loss:
Assumption changes and experience
gains/losses
Expected average remaining service lifetime
(EARSL) (12.25 Years at June 30, 2019)
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2022, the City recognized OPEB expense of $29,185. As of fiscal year ended June 30, 2022, the City reported deferred outflows of resources related to OPEB from the following sources:
Deferred Outflows
of Resources
Deferred Inflows of
Resources
OPEB contributions subsequent to measurement date 7,505 $ - $ Changes of assumptions 54,928 195,543 Differences between expected and actual experience 5,623 230,798
Total 68,056 $ 426,341 $
139
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
61 Note 9: Other Post-Employment Benefits (OPEB) (Continued) OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB (Continued) The $7,505 reported as deferred outflows of resources related to contributions subsequent to the June 30, 2021 measurement date will be recognized as a reduction of the net OPEB liability in the upcoming fiscal year. Other amounts reported as deferred outflows of resources related to OPEB will be recognized as expense as follows:
Fiscal Year Ended
June 30:
Deferred Outflows/(Inflows)
of Resources
2023 (45,043) $
2024 (45,043) 2025 (45,043)
2026 (45,043)
2027 (37,415)
Thereafter: (148,203)
Note 10: Risk Management
A. Description of Self-Insurance Pool Pursuant to Joint Powers Agreement The City of Aliso Viejo is a member of the California Joint Powers Insurance Authority (Authority). The Authority is composed of 124 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The California JPIA began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine-member Executive Committee.
B. Primary Self-Insurance Programs of the Authority
Each member pays an annual contribution at the beginning of the coverage period. A retrospective adjustment is then conducted annually thereafter, for coverage years 2012-13 and prior. Coverage years 2013-14 and forward are not subject to routine annual retrospective adjustment. The total funding requirement for primary self-insurance programs is based on an actuarial analysis. Costs are allocated to individual agencies based on payroll and claims history, relative to other members of the risk-sharing pool.
140
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
62 Note 10: Risk Management (Continued)
B. Primary Self-Insurance Programs of the Authority (Continued) Primary Liability Program
Claims are pooled separately between police and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $100,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $100,000 to $500,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs from $500,000 to $50 million, are distributed based on the outcome of cost allocation within the first and second loss layers.
The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence. Subsidence losses have a sub-limit of $50 million per occurrence. The coverage structure is composed of a combination of pooled self-insurance, reinsurance, and excess insurance. Additional information concerning the coverage structure is available on the Authority’s website: https://cjpia.org/coverage/risk-sharing-pools/.
Primary Workers’ Compensation Program
Claims are pooled separately between public safety (police and fire) and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $75,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $75,000 to $200,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs from $200,000 to statutory limits are distributed based on the outcome of cost allocation within the first and second loss layers.
For 2021-22 the Authority’s pooled retention is $1 million per occurrence, with reinsurance to statutory limits under California Workers’ Compensation Law. Employer’s Liability losses are pooled among members to $1 million. Coverage from $1 million to $5 million is purchased as part of a reinsurance policy, and Employer’s Liability losses from $5 million to $10 million are pooled among members.
141
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
63 Note 10: Risk Management (Continued)
C. Purchased Insurance
Pollution Legal Liability Insurance
The City of Aliso Viejo participates in the pollution legal liability insurance program which is available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City of Aliso Viejo. Coverage is on a claimsmade basis. There is a $250,000 deductible. The Authority has an aggregate limit of $20 million.
Property Insurance
The City of Aliso Viejo participates in the all-risk property protection program of the Authority.
This insurance protection is underwritten by several insurance companies. City of Aliso Viejo property is currently insured according to a schedule of covered property submitted by the City of Aliso Viejo to the Authority. City of Aliso Viejo property currently has all-risk property insurance protection in the amount of $28,497,001. There is a $10,000 deductible per occurrence except for non-emergency vehicle insurance which has a $2,500 deductible.
Crime Insurance
The City of Aliso Viejo purchases crime insurance coverage in the amount of $1,000,000 with a $2,500 deductible. The fidelity coverage is provided through the Authority.
Special Event Tenant User Liability Insurance
The City of Aliso Viejo further protects against liability damages by requiring tenant users of certain property to purchase low-cost tenant user liability insurance for certain activities on agency property. The insurance premium is paid by the tenant user and is paid to the City of Aliso Viejo according to a schedule. The City of Aliso Viejo then pays for the insurance. The insurance is facilitated by the Authority.
D. Adequacy of Protection
During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in 2021-22.
142
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
64 Note 11: Joint Venture
Orange County Fire Authority
In July 2001, the City 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, Tustin, Villa Park, Westminster, and Yorba Linda and the County of Orange to create the Orange County Fire Authority (Authority). Since the creation of the Authority, the Cities of Laguna Woods, Rancho Santa Margarita, Garden Grove and Santa Ana joined the Authority as members eligible for fire protection services. The purpose of the Authority is to provide for mutual fire protection, prevention and suppression services, and related and incidental services including, but not limited to, emergency medical and transport services as well as providing facilities and personnel for such services. The effective date of formation was March 1, 1995. The Authority’s governing board consists of one representative from each City and two from the County. The operations of the Authority are funded with fire fees collected by the County through the property tax roll for the unincorporated area and on behalf of all member cities except for the Cities of Stanton, Tustin, San Clemente, Buena Park, Placentia, Seal Beach, Garden Grove and Santa Ana. The County pays all structural fire fees it collects to the Authority. The Cities of Stanton, Tustin, San Clemente, Buena Park, Placentia, Seal Beach, Garden Grove and Santa Ana are considered “cash contract cities” and accordingly, make cash contributions based on the Authority’s annual budget. The City of Aliso Viejo does not have an equity interest in the assets of the Orange County Fire Authority.
Complete financial statements may be obtained from the Orange County Fire Authority, 1 Fire Authority Rd., Irvine, California, 92602.
Note 12: Contingent Liabilities
Various claims and suits have been filed against the City in the normal course of business.
Although the outcome of these matters is not presently determinable in the opinion of legal counsel, the resolutions of these matters will not have a material adverse effect on the financial condition of the City.
Note 13: Tax Abatements
The City entered into sales tax abatement agreements with local businesses under the Economic Development Subsidy under Government Code Section 53083. For the fiscal year ended June 30, 2022, the City abated sales taxes totaling $407,866.
143
CITY OF ALISO VIEJO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
65 Note 14: Reconciliation of Net Position
The net investment in capital assets as presented in the Statement of Net Position is calculated as follows:
Capital assets, net 113,104,830 $
Intangible assets, net 14,862 Less bonds payable (11,785,000) Lease liability (14,506) Less premium on bonds payable (903,526) Less retentions payable (67,924) Net investment in capital assets 100,348,736 $
Note 15: Stewardship, Compliance and Accountability
The following governmental funds reported a deficit fund balance at June 30, 2022:
Major Funds:
Other Grants (314,029) $
Federal Grants (85,717) Non-major Governmental Funds:
Debt Service Fund (3,269)
144
CITY OF ALISO VIEJO
REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2022
66 Budgetary Comparison Information
Budget Policies
The City Manager shall prepare and submit the proposed annual budget to the City Council for its approval for all governmental funds. The agenda for the budget workshops and budget meetings are noticed in accordance with the Brown Act. After reviewing the same and making such revisions as it may deem advisable and public input the budget is then adopted annually by the Council at a regularly held meeting. The budget is adopted prior to the beginning of the fiscal year and serves as the foundation for the City’s financial plan.
The level of budgetary control (the level at which expenditures cannot legally exceed the appropriated amount) is established at the fund level. Transfers of appropriations between funds can be made with the City Manager/Financial Services Director approval. City Council’s approval is required for all budget amendments that result in a change to the fund balances.
Budgets are prepared in accordance with generally accepted accounting principles using the modified accrual basis of accounting.
Appropriations lapse at the end of the fiscal year unless they are re-appropriated through the formal budget process. Encumbrances do not constitute expenditures or liabilities of the City.
Budgeted amounts are as originally adopted, or as amended in accordance with prescribed procedures throughout the fiscal year.
Excess of expenditures over appropriations are as follows:
Expenditures that exceeded appropriations for the year ended June 30, 2022 are as follows:
Government Funds: Final Budget Expenditures Excess
Major Government Funds:
Aliso Viejo Center:
Community services 2,118,355 $ 2,207,490 $ (89,135) $
Non-major Governmental Funds:
Public safety 164,767 164,879 (112) Aquatic Center 1,033,085 1,170,133 (137,048) 145
CITY OF ALISO VIEJO
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2022
67 Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Fund Balances - Beginning $ 27,131,163 27,131,163 $ 27,131,163 $ - $ Resources (Inflows):
Taxes 16,510,075 16,946,238 18,420,699 1,474,461 Licenses and permits 716,100 718,300 714,168 (4,132) Intergovernmental 50,000 42,500 64,675 22,175 Charges for services 536,850 361,850 380,965 19,115 Use of money and property 962,165 1,104,708 1,150,007 45,299 Fines and forfeitures 280,000 250,000 173,133 (76,867) Other 60,040 40,040 20,730 (19,310) Lease acquisition - - 23,131 23,131 Transfers in 3,102,300 3,405,415 3,348,755 (56,660) Amounts available for appropriations 50,000,214 49,348,693 51,427,426 1,427,212 Charges to Appropriations (Outflows):
General government:
City council 196,065 209,062 184,469 24,593 City manager 725,815 724,820 686,092 38,728 Human resources 254,160 153,790 161,248 (7,458) City clerk 428,630 428,630 424,599 4,031 City attorney 465,000 465,000 622,995 (157,995) Finance 937,690 698,105 667,581 30,524 Information technology 917,730 1,005,803 864,958 140,845 General government 809,020 803,520 662,893 140,627 Community development:
Community services 2,720,655 2,835,956 2,324,010 511,946 Planning 1,172,310 1,184,285 905,654 278,631
Building 648,130 648,130 565,536 82,594 Economic development 476,870 486,870 481,443 5,427 Public works 1,937,180 1,913,935 1,841,106 72,829 Public safety 9,998,659 9,995,659 9,340,524 655,135 Debt service:
Principal payment - - 8,625 (8,625)
Interest and fiscal charges - - 137 (137) Capital outlay 23,131 23,131 23,131 - Transfers out 1,013,570 1,263,688 1,082,257 181,431 Total charges to Appropriations 22,724,615 22,840,384 20,847,258 1,993,126 Fund Balances - Ending $ 26,624,078 $ 27,159,830 $ 30,580,168 $ 3,420,338 Budget Amounts
146
CITY OF ALISO VIEJO
BUDGETARY COMPARISON SCHEDULE
OTHER GRANTS
FOR THE YEAR ENDED JUNE 30, 2022
68 Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Fund Balances (Deficit) - Beginning $ (38,333) (38,333) $ (38,333) $ - $ Resources (Inflows):
Intergovernmental 210,000 489,703 72,873 (416,830) Use of money and property 405 405 - (405) Amount Available for Appropriations 172,072 451,775 34,540 (417,235) Charges to Appropriations (Outflows):
Transfers out 210,000 419,703 348,569 71,134 Total Charges to Appropriations 210,000 419,703 348,569 71,134 Fund Balances (Deficit) - Ending (37,928) $ 32,072 $ (314,029) $ (346,101) $ Budget Amounts
147
CITY OF ALISO VIEJO
BUDGETARY COMPARISON SCHEDULE
ALISO VIEJO CENTER
FOR THE YEAR ENDED JUNE 30, 2022
69 Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Fund Balances - Beginning $ - - $ - $ - $
Resources (Inflows):
Charges for services 1,592,725 2,210,200 2,213,056 2,856 Other 282,425 435,870 473,677 37,807 Amounts Available for Appropriations 1,875,150 2,646,070 2,686,733 40,663 Charges to Appropriations (Outflows):
Community services 1,650,550 2,118,355 2,207,490 (89,135) Transfers out 224,600 527,715 479,243 48,472 Total Charges to Appropriations 1,875,150 2,646,070 2,686,733 (40,663) Fund Balances - Ending - $ - $ - $ - $ Budget Amounts
148
CITY OF ALISO VIEJO
BUDGETARY COMPARISON SCHEDULE
FEDERAL GRANTS
FOR THE YEAR ENDED JUNE 30, 2022
70 Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Fund Balances - Beginning 15,409 $ 15,409 $ 15,409 $ - $ Resources (Inflows):
Intergovernmental 3,338,820 3,338,820 3,033,181 (305,639) Use of money and property - - (127,074) (127,074) Amount Available
for Appropriations 3,354,229 3,354,229 2,921,516 (432,713) Charges to Appropriations (Outflows):
General government 31,500 364,405 163,991 200,414 Transfer out 2,988,620 2,988,620 2,843,242 145,378 Total Charges to Appropriations 3,020,120 3,353,025 3,007,233 345,792 Fund Balances (Deficit) - Ending 334,109 $ 1,204 $ (85,717) $ (86,921) $ Budget Amounts
149
CITY OF ALISO VIEJO
REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED JUNE 30, 2022
71 CAPITAL ASSETS – MODIFIED APPROACH FOR INFRASTRUCTURE The City elected to use the modified approach in reporting their street pavement infrastructure network.
Under the modified approach, infrastructure assets that are part of a network or subsystem of a network are not required to be depreciated as long as two requirements are met. First, the government manages the eligible infrastructure assets using an asset management system that has the following characteristics:
Has an up-to-date inventory of eligible infrastructure assets Performs condition assessments of the eligible infrastructure assets and summarize the results using a measurement scale
Estimates each year the annual amount to maintain and preserve the eligible infrastructure assets at the condition level established and disclosed by the government.
Second, the government documents that the eligible infrastructure assets are being preserved approximately at (or above) a condition level established and disclosed by the government. If eligible infrastructure assets meet all requirements and are not depreciated, all expenditures made for those assets (except for additions and improvements) are expensed in the period incurred. Additions and improvements to eligible infrastructure assets are capitalized. Additions or improvements increase the capacity or efficiency of infrastructure assets rather than preserve the useful life of the assets.
The condition of road pavement is measured using the Abbott Pavement Management System.
All city streets have asphalt surfaces. Six distress factors are assessed for all street segments.
Pavement condition is rated on a scale of 0 to 100 points. This rating scale is called a deficiency rating. The scale is subdivided into ranges or categories. Pavement condition is commonly defined by the following five categories.
1. Very good (86 to 100 Rating) — A street rated as excellent has the characteristics of a new street. A street in this category has no surface defects that would affect ride quality or cause excess tire noise.
2. Good (75 to 85 Rating) — A street rated as good has some surface defects that can be seen when walking along the street. Some cracking and raveling will probably exist. In fact, there could be large cracks in the street or many hairline cracks. There may be some minor bumps that can be felt when driving the street at posted speeds.
3. Fair (60 to 74 Rating) — A street rated as fair has areas of surface defects that are apparent to drivers and passengers as they use the street. There will probably be significant cracking and raveling of the asphalt surface. If cracking does not exist, the street will probably have many patches and utility cuts or perhaps some rutting and deformation. There will be some ride roughness and some additional tire noise. These streets will not cause increases in vehicle driving costs due to extra wear and tear on vehicles. 150
CITY OF ALISO VIEJO
REQUIRED SUPPLEMENTARY INFORMATION (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2022
72 CAPITAL ASSETS – MODIFIED APPROACH FOR INFRASTRUCTURE (CONTINUED)
4. Poor (41 to 59 Rating) — A street rated as poor has surface defects generally throughout its length that are readily apparent to anyone using the street. There will be areas showing structural failure with closely spaced cracking and there may be pieces of loose pavement. A street in this category will cause additional vehicle user costs and excessive tire noise.
5. Very poor (40 and below Rating) — A street rated critical will have major areas of structural failure which may alter the speeds at which typical drivers drive on the street. There will be missing pieces of pavement. Repair of a street in this category will require reconstruction.
Annual street maintenance costs for the previous five fiscal years were as follows:
Year Ended
June 30, Actual Estimated
2018 1,730,400 $ 2,100,080 $
2019 3,131,301 3,621,540 2020 3,135,658 4,308,590
2021 3,425,241 3,779,360
2022 2,641,341 3,432,500
Total 14,063,941 $ 17,242,070 $
The City of Aliso Viejo City Council (the Council) accepted the findings of the Pavement Management System performed in fiscal year 2002 (see results below) and adopted a condition rating of 75 as the minimum acceptable Pavement Condition Index (PCI). The PMS was updated using statistical methods in 2004. The approach incorporated a new field survey of approximately 10% of all streets. The survey was then statistically extended to the entire street system. A complete field survey was performed and accepted by the City Council starting fiscal year 2008 and every two years thereafter. See below for the three most recent condition assessments:
2018 Mileage 2020 Mileage 2022 Mileage
86-100 Very good 58.1% 41.9 40.8% 30.5 41.6% 31.2 75-85 Good 25.4% 18.3 36.3% 25.5 34.8% 23.7 60-74 Fair 14.6% 10.5 20.1% 14.1 17.6% 11.5
41-59 Poor 1.9% 1.4 2.1% 1.5 6.0% 4.0 0-40 Very poor 0.0% - 0.7% 0.5 0.0% - 100.0% 72.1 100.0% 72.1 100.0% 70.4 Conditions
The results of the most recent complete condition assessment (performed in fiscal year 2022) reported an average condition rating of 83 which is 1 point higher than the 2020 average of 82.
Funding in the amount of $2,310,000 was utilized for the maintenance/rehabilitation to achieve the minimum PCI standard as of June 30, 2022. The estimated funding required to maintain the PCI standard was calculated at $5,000,000. The condition survey will be updated during the fiscal year ended June 30, 2024, for a two-year cycle.
151
CITY OF ALISO VIEJO
REQUIRED SUPPLEMENTARY INFORMATION
MISCELLANEOUS PLAN
SCHEDULE OF PLAN CONTRIBUTIONS
AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS*
73 Measurement
Date
Employer's
Proportion of the
Collective Net
Pension
Liability1
Employer's
Proportionate
Share of the
Collective Net
Pension Liability
Employer's
Covered Payroll
Employer's
Proportionate
Share of the
Collective Net
Pension Liability
as a Percentage
of the
Employer's
Covered Payroll
Pension Plan's
Fiduciary Net
Position as a
Percentage of
the Total
Pension Liability
6/30/2014 0.009530% 593,141 $ 1,385,329 $ 42.82% 83.03% 6/30/2015 0.008707% 597,632 1,512,663 39.51% 84.98%
6/30/2016 0.008898% 845,320 1,553,759 54.40% 81.19%
6/30/2017 0.010501% 1,041,374 1,863,005 55.90% 80.23%
6/30/2018 0.009633% 928,264 2,081,191 44.60% 84.47%
6/30/2019 0.008506% 871,568 2,339,338 37.26% 86.96%
6/30/2020 0.009520% 1,035,831 2,602,634 39.80% 86.14%
6/30/2021 0.000885% 47,870 2,732,043 1.75% 99.43%
1Proportion of the net pension liability represents the plan's proportion of PERF C, which includes both the Miscellaneous and Safety Risk Pools excluding the 1959 Survivors Risk Pool. * Measurement date 6/30/2014 (fiscal year 2015) was the first year of implementation. Additional years will be presented as information becomes available.
152
CITY OF ALISO VIEJO
REQUIRED SUPPLEMENTARY INFORMATION
MISCELLANEOUS PLAN
SCHEDULE OF PLAN CONTRIBUTIONS
AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS*
74 Fiscal Year
Contractually
Determined
Contributions
Contributions in
Relation to the
Contractually
Determined
Contributions
Contribution
Deficiency
(Excess)
Employer's
Covered Payroll
Contributions as
a Percentage of
Covered Payroll
2014-15 164,464 $ (164,464) $ - $ 1,512,663 $ 10.87%
2015-16 146,386 (146,386) - 1,553,759 9.42%
2016-17 179,320 (179,320) - 1,863,005 9.63%
2017-18 270,996 (270,996) - 2,081,191 13.02%
2018-19 239,511 (439,511) (200,000) 2,339,338 10.24%
2019-20 274,755 (274,755) - 2,602,634 10.56%
2020-21 319,112 (319,112) - 2,732,043 11.68%
2020-22 318,599 (318,599) - 2,740,729 11.62%
Notes to Schedule:
Changes in Benefit Terms: There were no changes to benefit terms that applied to all members of the Public Agency Pool.
Additionally, the figures above do not include any liability impact that may have resulted from Golden Handshakes that occurred after the June 30, 2020 valuation date, unless the liability impact is deemed to be material to the Public Agency Pool.
Changes in Assumptions: There were no assumption changes for 2021. For 2020, the Plan adopted a new amortization policy effective with the 2019 actuarial valuation. The new amortization policy shortens the period over which actuarial gains and losses are amortized from 30 years to 20 years with the payments computed as a level dollar amount. In addition, the new policy does not utilize a five-year ramp-up and ramp-down on UAL bases attributable to assumption changes and non-investment gains/losses. The new policy also does not utilize a five-year ramp-down on investment gains/losses. These changes apply only to new UAL bases established on or after June 30, 2019. There were no changes in assumptions in 2019. In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in the discount rate in 2019. In 2017, the accounting discount rate was reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes in the discount rate. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense). In 2014, amounts reported were based on the 7.5 percent discount rate. 153
CITY OF ALISO VIEJO
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CHANGES IN THE TOTAL OPEB LIABILITY AND RELATED RATIOS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS*
75 Measurement Period 2017 2018 2019 2020 2021 Total OPEB Liability Service Cost 100,385 $ 90,249 $ 97,449 $ 57,648 $ 61,087 $ Interest on the Total OPEB Liability 17,635 23,007 25,402 11,677 13,141 Actual and expected experience difference - - (308,246) - - Changes in assumptions (73,112) 26,106 (217,431) 9,295 35,505 Difference between expected and actual experience - - - - 6,123 Benefit payments (4,554) (11,378) (11,963) (5,572) (7,597) Net change in Total OPEB Liability 127,984 40,354 (414,789) 73,048 108,259 Total OPEB Liability - Beginning 650,474 610,120 778,458 363,669 436,717 Total OPEB Liability - Ending (a) $ 778,458 650,474 $ 363,669 $ 436,717 $ 544,976 $ Plan Fiduciary Net Position
Contribution - employer 4,554 $ 11,378 $ 11,963 $ 5,572 $ 7,597 $ Benefit payments (4,554) (11,378) (11,963) (5,572) (7,597) Net change in Plan Fiduciary Net Position - - - - - Plan Fiduciary Net Position - Beginning - - - - - Plan Fiduciary Net Position - Ending (b) $ - - $ - $ - $ - $ Net OPEB Liability - Ending (a) - (b) $ 778,458 650,474 $ 363,669 $ 436,717 $ 544,976 $ Plan fiduciary net position as a percentage of the total OPEB liability 0.00% 0.00% 0.00% 0.00% 0.00% Covered-employee payroll 2,227,782 $ 2,451,516 $ 3,166,359 $ 3,357,784 $ 2,740,729 $ Net OPEB liability as a percentage of covered-employee payroll 29.20% 31.75% 11.49% 13.01% 19.88% Notes to schedule: The City does not have assets accumulated in a trust that meets the criteria of GASB 75 to pay related benefits.
Contributions are fixed and not based on a measure of pay, therefore covered-employee payroll is used in the schedule. Valuation Date 6/30/2021 Actuarial cost method Entry Age Normal Level % of Pay Discount rate 2.18% Inflation 2.50%
Healthcare cost trend rates Salary increases 3.00%
Retirement age 50 to 75
Mortality CalPERS 2017 Experience Study
Mortality improvement MW Scale 2022
* Measurement date 6/30/2017 (fiscal year 2018) was the first year of implementation. Additional years will be presented as information becomes available.
5.8% in 2022 (increase effective January 1, 2023) and grade down to 3.9% for years 2027 and later
154
76 OTHER GOVERNMENTAL FUNDS
OTHER SPECIAL REVENUE FUNDS
Traffic Congestion Relief
The Traffic Congestion Relief Fund is used to account for revenue received from the SB1 Loan Repayment Program from the State of California.
Gas Tax
This fund is used to account for the City’s share of the motor vehicle gas tax imposed under the provisions of the Street and Highway Code of the State of California under Sections 2105, 2106, 2107, and 2107.5 which are legally restricted for the acquisition, construction, improvements, and maintenance of public streets.
Measure M
The Measure M Fund is used to account for the City’s share of the sales tax increase authorized by Orange County’s Measure “M”. These monies are legally restricted for the acquisition, construction, and improvement of public streets.
SB1 – RMRA
Senate Bill (SB) 1 created the Road Rehabilitation Maintenance Account to address deferred maintenance on the State Highway System and the local street and road system. These funds are legally restricted for basic road maintenance, rehabilitation, and critical safety projects on the local streets and roads.
Public Safety Grants
This fund is used to account for law enforcement grants received such as the California Law Enforcement Equipment Program (CLEEP) and the Supplemental Law Enforcement State Fund (SLESF).
Air Quality Improvement
This fund is used to account for the City’s share of vehicle registration fees that the State of California has allocated to address air quality concerns in Southern California. These monies are to be used in air quality maintenance programs locally and/or regionally.
Integrated Waste Management
This fund is used to account for the receipt of the California Beverage and Recycling Grant.
155
77 OTHER GOVERNMENTAL FUNDS (continued)
Technology Grants
This fund is a result of negotiations between the City and a franchisee for a new franchise agreement. These funds will be used for new technology purchases, provide City information on the Cable T.V. Government Access Channel and provide programs and access to computers through technology upgrades to the Family Resource Center.
Development Impact Fund
This fund is used to account for revenue received as a result of negotiated developer agreements for affordable housing, traffic mitigation, community enhancement, and open spaces. This fund had no legally adopted budget for fiscal year ending June 30, 2022.
Aquatic Center
This fund is used to account for the operations of the Aliso Viejo Aquatic Center. The Aliso Viejo Aquatic Center is a City owned facility that provides residents with a resort-style swimming complex that includes a lap pool, whirlpool, tots wading pool, snack bar, and patio.
AV Ranch Foundation
This fund is used to account for donations received for the AV Ranch and payments approved by its Board of Trustees. This fund had no legally adopted budget for fiscal year ending June 30, 2022.
CAPITAL PROJECTS FUNDS
Capital Improvements
This fund is used to account for the City’s street improvement projects.
Storm Water
This fund is used to account for the City’s storm water related improvement projects.
Street Improvements
This fund is used to account for the City’s street improvement projects.
DEBT SERVICE FUNDS
Debt Service Fund
This fund is used to account for the City’s debt payments as well as any additional debt amounts deemed to be advisable and necessary for any public or municipal purposes. This fund had no legally adopted budget for fiscal year ending June 30, 2022. 156
CITY OF ALISO VIEJO
COMBINING BALANCE SHEET
OTHER GOVERNMENTAL FUNDS
JUNE 30, 2022
78 Gas Tax Measure M SB1 - RMRA
Assets:
Cash and investments 76,109 $ 773,138 $ 1,162,276 $ 645,128 $ Receivables:
Accounts - 6,870 - - Due from other governments - 99,459 153,564 180,432 Prepaid costs - - - - Total Assets 76,109 $ 879,467 $ 1,315,840 $ 825,560 $ Liabilities, Deferred Inflows of Resources,
and Fund Balances:
Liabilities:
Accounts payable - $ 146,727 $ 876 $ - $
Accrued liabilities - - - - Due to other funds - - - - Retentions payable - - - - Total Liabilities - 146,727 876 - Deferred Inflows of Resources:
Unavailable revenues - grants - - - - Fund Balances:
Restricted for: - - Debt service - - - - Community services - - - - Community development projects - - - - Capital projects 76,109 732,740 1,314,964 825,560 Public safety - - - - Unassigned - - - - Total Fund Balances (Deficit) 76,109 732,740 1,314,964 825,560 Total Liabilities, Deferred Inflows of Resources, and Fund Balances 76,109 $ 879,467 $ 1,315,840 $ 825,560 $ Traffic
Congestion
Relief
Special Revenue Funds
157
CITY OF ALISO VIEJO
COMBINING BALANCE SHEET
OTHER GOVERNMENTAL FUNDS
JUNE 30, 2022 (Continued)
79 Integrated
Public Safety Air Quality Waste Technology
Grants Improvement Management Grants
Assets:
Cash and investments 141,390 $ 1,041,367 $ 83,592 $ 198,732 $ Receivables:
Accounts - - - 26,289 Due from other governments - 16,383 - - Prepaid costs - - - 2,550 Total Assets 141,390 $ 1,057,750 $ 83,592 $ 227,571 $ Liabilities, Deferred Inflows of Resources,
and Fund Balances:
Liabilities:
Accounts payable 12,371 $ - $ - $ 815 $
Accrued liabilities - - - - Due to other funds - - - - Retentions payable - - - - Total Liabilities 12,371 - - 815 Deferred Inflows of Resources:
Unavailable revenues 16,383 - - - Fund Balances:
Restricted for:
Debt service - - - - Community services - - - - Community development projects - - 83,592 226,756 Capital projects - 1,041,367 - - Public safety 129,019 - - - Unassigned - - - - Total Fund Balances (Deficit) 129,019 1,041,367 83,592 226,756 Total Liabilities, Deferred Inflows of Resources, and Fund Balances 141,390 $ 1,057,750 $ 83,592 $ 227,571 $ Special Revenue Funds
158
CITY OF ALISO VIEJO
COMBINING BALANCE SHEET
OTHER GOVERNMENTAL FUNDS
JUNE 30, 2022 (Continued)
80 Capital
Projects Funds
Development Aquatic AV Ranch Capital
Impact Center Foundation Improvements
Assets:
Cash and investments 1,410,622 $ 213,105 $ 50 $ 166,105 $ Receivables:
Accounts - 2,056 - - Due from other governments - - - - Prepaid costs - - - - Total Assets 1,410,622 $ 215,161 $ 50 $ 166,105 $ Liabilities, Deferred Inflows of Resources,
and Fund Balances:
Liabilities:
Accounts payable - $ 157,565 $ - $ 166,105 $
Accrued liabilities - 57,596 - - Due to other funds - - - - Retentions payable - - - - Total Liabilities - 215,161 - 166,105 Deferred Inflows of Resources:
Unavailable revenues - - - - Fund Balances:
Restricted for:
Debt service - - - - Community services - - - - Community development projects 1,410,622 - 50 - Capital projects - - - - Public safety - - - - Unassigned - - - - Total Fund Balances (Deficit) 1,410,622 - 50 - Total Liabilities, Deferred Inflows of Resources, and Fund Balances 1,410,622 $ 215,161 $ 50 $ 166,105 $ Special Revenue Funds
159
CITY OF ALISO VIEJO
COMBINING BALANCE SHEET
OTHER GOVERNMENTAL FUNDS
JUNE 30, 2022 (Continued)
81 Debt Service
Funds
Total
Nonmajor
Street Debt Service Governmental
Storm Water Improvements Fund Funds
Assets:
Cash and investments - $ 169,808 $ - $ 6,081,422 $
Receivables:
Accounts - - - 35,215 Due from other governments 5,353 - - 455,191 Prepaid costs - - - 2,550 Total Assets 5,353 $ 169,808 $ - $ 6,574,378 $ Liabilities, Deferred Inflows of Resources,
and Fund Balances:
Liabilities:
Accounts payable - $ 114,384 $ - $ 598,843 $
Accrued liabilities - - - 57,596 Due to other funds 5,353 - 3,269 8,622 Retentions payable - 55,424 - 55,424 Total Liabilities 5,353 169,808 3,269 720,485 Deferred Inflows of Resources:
Unavailable revenues - - - 16,383 Fund Balances:
Restricted for:
Debt service - - - - Community services - - - - Community development projects - - - 1,721,020 Capital projects - - - 3,990,740 Public safety - - - 129,019 Unassigned - - (3,269) (3,269) Total Fund Balances (Deficit) - - (3,269) 5,837,510 Total Liabilities, Deferred Inflows of Resources, and Fund Balances 5,353 $ 169,808 $ - $ 6,574,378 $ Capital Projects Funds
160
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161
CITY OF ALISO VIEJO
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
82 Measure M SB1 - RMRA
Revenues:
Intergovernmental - $ 1,186,433 $ 902,573 $ 1,014,000 $ Charges for services - - - - Use of money and property (3,031) (31,431) (40,196) (27,626) Contributions - - - - Total Revenues (3,031) 1,155,002 862,377 986,374 Expenditures:
Current:
General government - - - - Community development:
Community services - - - - Public works - 1,030,996 4,140 - Public safety - - - - Debt service:
Principal payment - - - -
Interest expense - - - - Total Expenditures - 1,030,996 4,140 - Excess (deficiency) of revenues over (under) expenditures 124,006 (3,031) 858,237 986,374 Other Financing Sources (Uses):
Transfers in - - - - Transfers out (11,769) (131,915) (394,821) (944,154) Total Other Financing Sources (Uses) (131,915) (11,769) (394,821) (944,154) Net change in fund balances (14,800) (7,909) 463,416 42,220 Fund balances, beginning of year 90,909 740,649 851,548 783,340 Fund balances (deficit), end of year $ 732,740 76,109 $ 1,314,964 $ 825,560 $ Special Revenue Funds
Traffic
Congestion
Relief Gas Tax
162
CITY OF ALISO VIEJO
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022 (Continued)
83 Integrated
Public Safety Air Quality Waste Technology
Grants Improvement Management Grants
Revenues:
Intergovernmental 161,285 $ 47,694 $ 83,866 $ 107,498 $ Charges for services - - - - Use of money and property (4,882) (38,400) (2,842) (6,686) Contributions - - - - Total Revenues 156,403 9,294 81,024 100,812 Expenditures:
Current:
General government - - - 24,831 Community development:
Community services - - - - Public works - - 15,184 - Public safety 164,879 - - - Debt service:
Principal payment - - - -
Interest expense - - - - Total Expenditures 164,879 - 15,184 24,831 Excess (deficiency) of revenues over (under) expenditures 9,294 (8,476) 65,840 75,981 Other Financing Sources (Uses):
Transfers in 27,548 - - - Transfers out - - - - Total Other Financing Sources (Uses) - 27,548 - - Net change in fund balances 19,072 9,294 65,840 75,981 Fund balances, beginning of year 109,947 1,032,073 17,752 150,775 Fund balances (deficit), end of year $ 1,041,367 129,019 $ 83,592 $ 226,756 $ Special Revenue Funds
163
CITY OF ALISO VIEJO
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022 (Continued)
84 Capital
Projects Funds
Development Aquatic AV Ranch Capital
Impact Center Foundation Improvements
Revenues:
Intergovernmental - $ - $ - $ - $
Charges for services - 1,042,244 - - Use of money and property - - - - Contributions - - 50 - Total Revenues - 1,042,244 50 - Expenditures:
Current:
General government - - - - Community development:
Community services - 1,170,133 - - Public works - - - 572,107 Public safety - - - - Debt service:
Principal payment - - - -
Interest expense - - - - Total Expenditures - 1,170,133 - 572,107 Excess (deficiency) of revenues over (under) expenditures (127,889) - 50 (572,107) Other Financing Sources (Uses):
Transfers in - 108,389 - 572,107 Transfers out - - - - Total Other Financing Sources (Uses) 108,389 - - 572,107 Net change in fund balances - (19,500) 50 - Fund balances, beginning of year 1,410,622 19,500 - - Fund balances (deficit), end of year $ - 1,410,622 $ 50 $ - $ Special Revenue Funds
164
CITY OF ALISO VIEJO
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022 (Continued)
85 Debt Service
Funds
Total
Nonmajor
Street Debt Service Governmental
Storm Water Improvements Fund Funds
Revenues:
Intergovernmental - $ - $ - $ 3,503,349 $
Charges for services - - - 1,042,244 Use of money and property - - - (155,094) Contributions - - - 50 Total Revenues - - - 4,390,549 Expenditures:
Current:
General government - - - 24,831 Community development:
Community services - - - 1,170,133 Public works 24,692 1,500,043 - 3,147,162 Public safety - - - 164,879 Debt service:
Principal payment - - 235,000 235,000
Interest expense - - 422,705 422,705
Total Expenditures 24,692 1,500,043 657,705 5,164,710 Excess (deficiency) of revenues over (under) expenditures (1,500,043) (24,692) (657,705) (774,161) Other Financing Sources (Uses):
Transfers in 24,692 1,500,043 654,436 2,887,215 Transfers out - - - (1,482,659) Total Other Financing Sources (Uses) 1,500,043 24,692 654,436 1,404,556 Net change in fund balances - - (3,269) 630,395 Fund balances, beginning of year - - - 5,207,115 Fund balances (deficit), end of year $ - - $ (3,269) $ 5,837,510 $ Capital Projects Funds
165
CITY OF ALISO VIEJO
BUDGETARY COMPARISON SCHEDULE
TRAFFIC CONGESTION RELIEF
FOR THE YEAR ENDED JUNE 30, 2022
86 Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Fund Balances - Beginning 90,909 $ 90,909 $ 90,909 $ - $ Resources (Inflows):
Use of money and property 1,125 1,125 (3,031) (4,156) Amount Available for Appropriations 92,034 92,034 87,878 (4,156) Charges to Appropriations (Outflows):
Transfers out 144,305 90,905 11,769 79,136 Total Charges to Appropriations 144,305 90,905 11,769 79,136 Fund Balances - Ending (52,271) $ 1,129 $ 76,109 $ 74,980 $ Budget Amounts
166
CITY OF ALISO VIEJO
BUDGETARY COMPARISON SCHEDULE
GAS TAX
FOR THE YEAR ENDED JUNE 30, 2022
87 Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Fund Balances - Beginning $ 740,649 740,649 $ 740,649 $ - $ Resources (Inflows):
Intergovernmental 1,316,425 1,316,425 1,186,433 (129,992) Use of money and property 8,350 8,350 (31,431) (39,781) Amounts Available for Appropriations 2,065,424 2,065,424 1,895,651 (169,773) Charges to Appropriations (Outflows):
Public works 1,006,800 1,073,700 1,030,996 42,704 Transfers out 125,000 125,000 131,915 (6,915) Total Charges to Appropriations 1,131,800 1,198,700 1,162,911 35,789 Fund Balances - Ending 933,624 $ 866,724 $ 732,740 $ (133,984) $ Budget Amounts
167
CITY OF ALISO VIEJO
BUDGETARY COMPARISON SCHEDULE
MEASURE M
FOR THE YEAR ENDED JUNE 30, 2022
88 Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Fund Balances - Beginning 851,548 $ 851,548 $ 851,548 $ - $ Resources (Inflows):
Intergovernmental 714,030 714,030 902,573 188,543 Use of money and property 7,130 7,130 (40,196) (47,326) Amount Available for Appropriations 1,572,708 1,572,708 1,713,925 141,217 Charges to Appropriations (Outflows):
Public works 25,430 25,430 4,140 21,290 Transfers out 790,695 844,095 394,821 449,274 Total Charges to Appropriations 816,125 869,525 398,961 470,564 Fund Balances - Ending 756,583 $ 703,183 $ 1,314,964 $ 611,781 $ Budget Amounts
168
CITY OF ALISO VIEJO
BUDGETARY COMPARISON SCHEDULE
SB1 – RMRA
FOR THE YEAR ENDED JUNE 30, 2022
89 Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Fund Balances - Beginning 783,340 $ 783,340 $ 783,340 $ - $ Resources (Inflows):
Intergovernmental 1,000,000 1,000,000 1,014,000 14,000 Use of money and property 4,670 4,670 (27,626) (32,296) Amount Available for Appropriations 1,788,010 1,788,010 1,769,714 (18,296) Charges to Appropriations (Outflows):
Transfers out 1,225,000 1,225,000 944,154 280,846 Total Charges to Appropriations 1,225,000 1,225,000 944,154 280,846 Fund Balances - Ending 563,010 $ 563,010 $ 825,560 $ 262,550 $ Budget Amounts
169
CITY OF ALISO VIEJO
BUDGETARY COMPARISON SCHEDULE
PUBLIC SAFETY GRANTS
FOR THE YEAR ENDED JUNE 30, 2022
90 Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Fund Balances - beginning 109,947 $ 109,947 $ 109,947 $ - $ Resources (Inflows):
Intergovernmental 175,000 175,000 161,285 (13,715) Use of money and property 1,620 1,620 (4,882) (6,502) Transfers in - - 27,548 (27,548) Amount Available for Appropriations 286,567 286,567 293,898 (47,765) Charges to Appropriations (Outflows):
Public safety 164,767 164,767 164,879 (112) Total Charges to Appropriations 164,767 164,767 164,879 (112) Fund Balances - Ending 121,800 $ 121,800 $ 129,019 $ (47,877) $ Budget Amounts
170
CITY OF ALISO VIEJO
BUDGETARY COMPARISON SCHEDULE
AIR QUALITY IMPROVEMENT
FOR THE YEAR ENDED JUNE 30, 2022
91 Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Fund Balances - Beginning 1,032,073 $ 1,032,073 $ 1,032,073 $ - $ Resources (Inflows):
Intergovernmental 65,000 65,000 47,694 (17,306) Use of money and property 8,240 8,240 (38,400) (46,640) Amount Available
for Appropriations 1,105,313 1,105,313 1,041,367 (63,946) Charges to Appropriations (Outflows):
Public safety 65,000 65,000 - 65,000 Total Charges to Appropriations 65,000 65,000 - 65,000 Fund Balances - Ending 1,040,313 $ 1,040,313 $ 1,041,367 $ 1,054 $ Budget Amounts
171
CITY OF ALISO VIEJO
BUDGETARY COMPARISON SCHEDULE
INTEGRATED WASTE MANAGEMENT
FOR THE YEAR ENDED JUNE 30, 2022
92 Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Fund Balances - Beginning 17,752 $ 17,752 $ 17,752 $ - $ Resources (Inflows):
Intergovernmental 12,880 12,880 83,866 70,986 Use of money and property 45 45 (2,842) (2,887) Amount Available for Appropriations 30,677 30,677 98,776 68,099 Charges to Appropriations (Outflows):
Public works 4,000 16,000 15,184 816 Transfers out 9,000 9,000 - 9,000 Total Charges to Appropriations 4,000 25,000 15,184 9,816 Fund Balances - Ending 26,677 $ 5,677 $ 83,592 $ 77,915 $ Budget Amounts
172
CITY OF ALISO VIEJO
BUDGETARY COMPARISON SCHEDULE
TECHNOLOGY GRANTS
FOR THE YEAR ENDED JUNE 30, 2022
93 Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Fund Balances - Beginning 150,775 $ 150,775 $ 150,775 $ - $ Resources (Inflows):
Intergovernmental 123,200 123,200 107,498 (15,702) Use of money and property 1,950 1,950 (6,686) (8,636) Amount Available for Appropriations 275,925 275,925 251,587 (24,338) Charges to Appropriations (Outflows):
General government 75,180 180,180 24,831 155,349 Total Charges to Appropriations 75,180 180,180 24,831 155,349 Fund Balances - Ending 200,745 $ 95,745 $ 226,756 $ 131,011 $ Budget Amounts
173
CITY OF ALISO VIEJO
BUDGETARY COMPARISON SCHEDULE
AQUATIC CENTER
FOR THE YEAR ENDED JUNE 30, 2022
94 Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Fund Balances - Beginning $ 19,500 19,500 $ 19,500 $ - $ Resources (Inflows):
Charges for services 871,000 885,000 1,042,244 157,244 Transfers in 152,110 148,085 108,389 (39,696) Amounts Available for Appropriations 1,042,610 1,052,585 1,170,133 117,548 Charges to Appropriations (Outflows):
Community services 1,023,110 1,033,085 1,170,133 (137,048) Total Charges to Appropriations 1,023,110 1,033,085 1,170,133 (137,048) Fund Balances - Ending 19,500 $ 19,500 $ - $ (19,500) $ Budget Amounts
174
CITY OF ALISO VIEJO
BUDGETARY COMPARISON SCHEDULE
CAPITAL IMPROVEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
95 Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Fund Balances - Beginning - $ - $ - $ - $
Resources (Inflows):
Transfers in 502,180 880,700 572,107 (308,593) Amount Available for Appropriations 502,180 880,700 572,107 (308,593) Charges to Appropriations (Outflows):
Public works 502,180 880,700 572,107 308,593 Total Charges to Appropriations 502,180 880,700 572,107 308,593 Fund Balances - Ending - $ - $ - $ - $
Budget Amounts
175
CITY OF ALISO VIEJO
BUDGETARY COMPARISON SCHEDULE
STORM WATER
FOR THE YEAR ENDED JUNE 30, 2022
96 Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Fund Balances - Beginning - $ - $ - $ - $
Resources (Inflows):
Transfers in 30,000 30,000 24,692 (5,308) Amount Available for Appropriations 30,000 30,000 24,692 (5,308) Charges to Appropriations (Outflows):
Public works 30,000 30,000 24,692 5,308 Total Charges to Appropriations 30,000 30,000 24,692 5,308 Fund Balances - Ending - $ - $ - $ - $
Budget Amounts
176
CITY OF ALISO VIEJO
BUDGETARY COMPARISON SCHEDULE
STREET IMPROVEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
97 Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Fund Balances - Beginning - $ - $ - $ - $
Resources (Inflows):
Transfer in 2,285,000 2,285,000 1,500,043 (784,957) Amount Available for Appropriations 2,285,000 2,285,000 1,500,043 (784,957) Charges to Appropriations (Outflows):
Public works 2,285,000 2,285,000 1,500,043 784,957 Total Charges to Appropriations 2,285,000 2,285,000 1,500,043 784,957 Fund Balances - Ending - $ - $ - $ - $
Budget Amounts
177
98 CUSTODIAL FUNDS
Custodial Funds are used to account for the assets held by the City as an agent for individuals, private organizations and other government units. The City of Aliso Viejo has the following Custodial Funds:
Community Trust
This fund is used to account for funding received from the Aliso Viejo Community Foundation, a non-profit organization. The foundation holds fundraisers and provides opportunities for donors to contribute to the Aliso Viejo Community programs.
CFD 2005-01
This fund is used to account for CFD 2005-01 Mello Roos funds held with the City’s fiscal agent.
Funds held by the fiscal agent include special taxes and the reserve funds for the payment of the bonds.
Renewable Farms
This fund is used to account for the operations of the Renewable Farms facility. Renewable Farms is a City owned outdoor facility that serves as a venue to accommodate an array of functions such as wedding celebrations and private events.
178
CITY OF ALISO VIEJO
COMBINING STATEMENT OF FIDUCIARY NET POSITION
ALL CUSTODIAL FUNDS
JUNE 30, 2022
99 Community Renewable
Trust CFD 2005-1 Farms Total
Assets:
Cash and investments 7,841 $ - $ 36,416 $ 44,257 $
Restricted cash and investments - 4,375,616 - 4,375,616 Accounts receivable - - 1,436 1,436 Due from other governments - 39,349 - 39,349 Total assets 4,414,965 7,841 37,852 4,460,658 Liabilities:
Accounts payable - 2,018 37,852 39,870 Deposits payable 7,841 - - 7,841 Total liabilities 2,018 7,841 37,852 47,711 Net position:
Restricted for organizations and other governments 4,412,947 - - 4,412,947 Total net position $ 4,412,947 - $ - $ 4,412,947 $ 179
CITY OF ALISO VIEJO
COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
ALL CUSTODIAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
100
Community Renewable
Trust CFD 2005-1 Farms Total
Additions:
Assessments - $ 2,164,165 $ - $ 2,164,165 $
Events and rentals - - 387,552 387,552
Interest income - (145,985) - (145,985) Total additions 2,018,180 - 387,552 2,405,732 Deductions:
Administrative expenses - - 387,552 387,552 Payments to bondholders:
Principal - 710,000 - 710,000
Interest - 1,422,318 - 1,422,318 Total deductions 2,132,318 - 387,552 2,519,870 Net increase (decrease) in fiduciary net position (114,138) - - (114,138) Net position, beginning of year 4,527,085 - - 4,527,085 Net position, end of year $ 4,412,947 - $ - $ 4,412,947 $ 180
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181
Contents
Financial Trends Table Page
Net Position by Component 1 103
Change in Net Position 2 104
Fund Balances of Governmental Funds 3 105
Changes in Fund Balances of Governmental Funds 4 106
General Government - Expenditures by Function 5 107
Revenue Capacity
General Government - Revenues by Source 6 108
General Government - Tax Revenues by Source 7 109
Principal Sales Tax Producers by Category 8 110
Property Tax Levies and Collections 9 111
Assessed and Estimated Actual Value of Taxable Property 10 112 Direct and Overlapping Property Tax Schedules 11 113
Principal Property Taxpayers 12 114
Debt Capacity
Ratios of Net General Obligation Debt to Assessed Value and Net General Obligation Debt Per Capita 13 115
Computation of Direct and Overlapping Bonded Debt 14 116 Legal Debt Margin 15 117
Demographic and Economic Information
Demographic and Economic Statistics 16 118
Principal Employers 17 119
Operating Information
Operating Indicators by Function 18 120
Full-Time and Part-Time City Employees by Function 19 121 Capital Assets Statistics by Function 20 122
Schedule of Insurance 21 123
Miscellaneous Statistical Information 22 124
These schedules contain service and infrastructure data to help the reader understand how the information in the government's financial report relates to the services the government provides and the activities it performs.
STATISTICAL SECTION
This part of the City of Aliso Viejo's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information say about the government's overall financial health.
These schedules contain trend information to help the reader understand how the government's financial performances and well-being have changed over time.
These schedules contain information to help the reader assess the government's most significant local revenue source, the property tax.
These schedules present information to help the reader assess the affordability of the government's current levels of outstanding debt and the government's ability to issue additional debt in the future.
These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's financial activities take place. 101 182
Page Intentionally left Blank
102 183
Table 1
CITY OF ALISO VIEJO
NET POSITION BY COMPONENT
LAST TEN FISCAL YEARS
2012-13 2013-14 2014-15 2015-16 2016-17
Governmental Activities
$ 95,679,944 89,326,107 $ 95,155,183 $ 94,579,142 $ 95,000,131 $ Restricted
Community Development 770,031 731,008 482,242 279,027 (34,396) Community Services -
Public Works 11,351,165 11,451,213 12,018,986 11,840,453 8,299,848 Public Safety 57,693 84,886 - 12,953 39,957
Debt Service 515,759 - - - -
Unrestricted 25,767,983 20,080,095 21,354,275 23,233,017 26,937,175 Total governmental activities net position 127,788,738 $ 128,027,146 $ 129,010,686 $ 129,944,592 $ 130,242,715 $ 2017-18 2018-19 2019-20 2020-21 2021-22
Governmental Activities
$ 95,555,817 94,791,785 $ 93,873,835 $ 101,009,829 $ 100,348,736 $ Restricted
Community Development 203,708 334,190 2,891,135 1,579,149 1,721,020 Community Services - - - 19,500 -
Public Works 7,637,647 8,536,428 122,819 3,498,519 3,990,740 Public Safety 83,097 105,213 4,121,343 125,356 129,019
Debt Service - - 4,319,695 - -
Unrestricted 29,312,285 30,211,693 29,006,434 25,601,465 29,924,478 Total governmental activities net position 132,028,522 $ 134,743,341 $ 134,335,261 $ 131,833,818 $ 136,113,993 $ Source: City Finance Department
Net Investment in Capital Assets
Net Investment in Capital Assets
Fiscal Years
Fiscal Years
$70,000
$80,000
$90,000
$100,000
$110,000
$120,000
$130,000
$140,000 Thousands
Fiscal Year
Total Net Position by Component
103 184
Table 2
CITY OF ALISO VIEJO
CHANGE IN NET POSITION
LAST TEN FISCAL YEARS
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Revenues
Program Revenues
Charges for Services 1,861,661 $ 1,853,679 $ 2,287,957 $ 2,654,055 $ 3,474,104 $ 4,202,366 $ 3,836,994 $ 3,070,201 $ 4,001,459 $ 5,742,780 $ Operating Contributions & Grants 2,604,100 3,902,695 2,682,605 2,770,178 3,672,804 2,805,856 5,171,638 4,342,486 4,852,523 6,945,042 Capital Contributions & Grants - 99,283 99,283 18,875 17,831 - - 9,600 - - Taxes
Sales Tax 4,685,598 4,814,560 4,795,433 4,601,042 6,236,832 6,545,732 6,128,143 4,765,921 3,524,908 6,117,932 Property Tax 6,379,228 6,441,021 6,741,164 7,317,139 7,503,432 7,936,613 8,211,394 8,647,685 8,981,521 9,211,738 Franchise Fees 1,487,395 1,511,450 1,584,358 1,573,339 1,507,041 1,577,213 1,829,070 1,729,418 1,672,280 1,744,239 Transient Occupancy Tax 780,075 862,294 916,286 1,108,102 1,606,165 1,696,598 1,640,628 1,220,997 723,599 1,413,074 Motor Vehicle License Fees 25,112 20,991 20,470 20,256 22,627 26,483 24,936 40,659 36,704 57,547 Investment Income 66,734 72,969 273,901 328,416 324,781 402,978 790,051 1,053,024 377,709 (153,060) Other 79,919 61,559 132,872 195,831 186,455 191,376 174,274 292,184 292,095 118,665 Total Revenues 17,969,822 19,640,501 19,534,329 20,587,233 24,552,072 25,385,215 27,807,128 25,172,175 24,462,798 31,197,957 Expenses
General Government 2,993,646 3,030,088 3,189,090 3,459,012 4,139,974 4,418,462 4,725,232 4,878,395 5,621,731 4,943,476 Community Services 1,935,808 2,139,277 2,221,206 2,982,463 3,433,106 3,771,964 3,878,633 3,433,830 1,754,782 5,264,667 Community Development 1,676,713 1,615,338 1,635,629 1,450,043 3,824,732 1,735,901 1,601,865 1,830,144 3,695,994 1,244,026 Public Works 4,927,121 5,246,908 3,360,251 4,038,360 4,484,898 4,444,500 5,924,079 5,631,039 6,016,332 5,473,152 Public Safety 6,637,899 7,022,580 7,427,581 7,723,449 8,371,239 8,831,639 8,962,500 9,312,287 9,480,235 9,601,888 Interest and Fiscal Charges 360,975 347,902 - - - - - 494,561 395,167 390,573 Total Expense 18,532,162 19,402,093 17,833,757 19,653,327 24,253,949 23,202,466 25,092,309 25,580,256 26,964,241 26,917,782 Change in net Position (562,340) $ 238,408 $ 1,700,572 $ 933,906 $ 298,123 $ 2,182,749 $ 2,714,819 $ (408,080) $ (2,501,442) $ 4,280,175 $ Source: City Finance Department
Fiscal Years
(3,000)
(2,000)
(1,000)
0 1,000
2,000
3,000
4,000
5,000
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Thousands Fiscal Year
Changes in Net Position
104 185
Table 3
CITY OF ALISO VIEJO
FUND BALANCES OF GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
2012-13 2013-14 2014-15 2015-16 2016-17
General Fund Balances
Nonspendable:
Prepaid 130,620 $ 111,045 $ 146,132 $ 187,681 $ 231,198 $ Assigned to:
Contingencies 4,000,331 4,127,631 4,229,500 4,351,653 4,681,192 Self Insurance/benefit obligations 570,000 570,000 738,900 724,000 1,200,000 Asset Replacement 8,657,715 9,065,735 9,440,700 9,850,000 10,044,448 Emergencies & Unanticipated Traffic Projects 500,000 1,500,000 1,500,000 1,500,000 1,500,000 800 MHZ Upgrade & Replacement - 262,000 262,000 - -
Long Term Debt 7,335,000 - - - -
Unassigned: 4,521,835 4,709,175 5,616,888 7,374,518 9,509,904 Total General Fund $ 20,158,246 25,902,841 $ 21,934,120 $ 23,987,852 $ 27,166,742 $ All other govenmental funds
Nonspendable:
Prepaid 30,942 $ 30,562 $ 4,272 $ 14,127 $ 25,041 $
Assigned to:
Emergencies & Unanticipated Traffic Projects - - - - -
Restricted For:
Community Development Projects 770,031 731,008 482,242 278,992 19,736 Community Services - - - - -
Public Safety 57,693 84,886 - - 39,957
Capital Projects 11,351,165 11,451,213 12,018,986 11,853,406 8,299,848 Debt Service 515,759 - - - -
Unassigned: (30,562) (23,971) (19,027) (198,271) (79,173) Total All Other Governmental Funds $ 12,267,107 12,701,619 $ 12,486,473 $ 11,948,254 $ 8,305,409 $ 2017-18 2018-19 2019-20 2020-21 2021-22
General Fund Balances
Nonspendable:
Prepaid 206,488 $ 222,029 $ 236,326 $ 76,150 $ 81,267 $ Assigned to:
Contingencies 4,700,000 2,963,795 2,860,265 2,649,388 3,500,571 Self Insurance/benefit obligations 1,200,000 900,000 1,445,475 1,150,474 600,000 Asset Replacement 10,000,000 9,700,000 9,096,430 8,317,710 11,882,444 Emergencies & Unanticipated Traffic Projects 1,500,000 15,000,000 15,000,000 15,000,000 10,000,000 800 MHZ Upgrade & Replacement - - - -
Unassigned: 3,811,349 12,935,238 4,332,263 (62,559) 4,515,886 Total General Fund $ 32,597,173 30,541,726 $ 32,970,759 $ 27,131,163 $ 30,580,168 $ All other govenmental funds
Nonspendable:
Prepaid - $ - $ - $ - $ - $
Assigned to:
Emergencies & Unanticipated Traffic Projects -
Restricted For:
Community Development Projects 203,708 334,190 2,891,135 1,579,149 1,721,020 Community Services - - - 19,500 -
Public Safety 83,097 105,213 122,819 125,356 129,019
Capital Projects 7,637,647 8,536,428 4,121,343 - 3,990,740 Debt Service - 4,319,695 3,498,519 -
Unassigned: - - - (38,333) (403,015)
Total All Other Governmental Funds $ 8,975,831 7,924,452 $ 11,454,992 $ 5,184,191 $ 5,437,764 $ Source: City Finance Department
Fiscal Years
Fiscal Years
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2012 13 2013 14 2014 15 2015 16 2016 17 2017 18 2018 19 2019 20 2020 21 2021 22 Thousands Fiscal Year
Fund Balances Of Governmental Funds Series1 Series2
105 186
Table 5
CITY OF ALISO VIEJO
GENERAL GOVERNMENT - EXPENDITURES BY FUNCTION
LAST TEN FISCAL YEARS
Fiscal General Community Public Public Capital Debt
Year Government Development Works Safety Outlay Service Total 2012-13 2,632,999 $ 3,549,268 $ 4,421,239 $ 6,624,180 $ 103,249 $ 514,065 $ 17,845,000 $ 2013-14 2,744,983 3,663,530 4,705,326 7,014,723 4,457 7,686,590 25,819,609 2014-15 3,101,820 3,821,432 2,940,272 7,407,531 268,034 - 17,539,088 2015-16 3,079,528 4,485,482 3,557,336 7,677,426 292,742 - 19,092,514 2016-17 3,797,104 7,267,554 3,605,820 8,030,234 1,981,850 - 24,682,562 2017-18 3,907,504 5,479,501 3,962,004 8,730,712 736,315 - 22,816,036 2018-19 4,368,307 5,504,012 5,441,582 8,844,067 1,723,775 - 25,881,743 2019-20 4,370,213 5,177,202 5,148,542 9,170,586 10,006,820 494,561 34,367,924 2020-21 5,110,883 5,381,558 5,531,650 9,358,289 10,375,082 657,436 36,414,898 2021-22 4,463,657 7,654,266 4,988,268 9,505,403 23,131 666,467 27,301,192 * Fiscal Year 2013-14 debt service includes payoff of the City Hall COP bond. **Includes General and Special Revenue Funds.
Source: City Finance Department
*
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Thousands Fiscal Year
Total General Government Expenditures
General Government Community Development Public Works Public Safety Capital Outlay Debt Service *
106 187
Table 4
CITY OF ALISO VIEJO
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
2012-13 2013-14* 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Revenues
Taxes 13,348,264 $ 13,648,081 $ 14,064,937 $ 14,629,530 $ 16,884,140 $ 17,777,707 $ 17,704,139 $ 16,270,976 $ 14,823,926 $ 18,420,699 $ Licenses and Permits 482,730 377,459 676,218 694,054 664,202 957,209 706,764 719,720 976,781 714,168 Intergovernmental 2,090,978 2,858,226 2,189,004 2,617,535 2,585,675 2,963,077 4,218,802 4,208,995 3,987,463 6,674,078 Charges for Services 817,633 1,029,007 1,190,138 1,639,479 2,519,225 2,864,619 2,639,775 2,047,978 2,198,864 3,636,265 Use of Money and Property 342,103 332,170 288,325 358,917 359,023 524,729 1,152,130 1,258,109 1,068,212 867,839 Fines and Forfeitures 327,174 271,644 415,671 312,400 282,322 300,988 307,513 275,229 310,419 173,133 Developer Fees 355,137 992,783 521,859 30,500 536,182 - 715,000 9,600 585,000 - Contributions - - 42,894 - - - - - 100,000 50
Other 205,803 131,131 145,283 325,612 387,838 421,734 333,252 423,194 253,836 494,407 Total Revenues 17,969,822 19,640,501 19,534,329 20,608,027 24,218,607 25,810,063 27,777,375 25,213,801 24,304,501 30,980,639 Expeditures
General Government 2,632,999 2,744,983 3,101,820 3,079,528 3,797,104 3,907,504 4,368,307 4,370,213 5,110,883 4,463,657 Community Development 3,549,268 3,663,530 3,821,432 4,485,482 7,267,554 5,479,501 5,504,012 5,177,202 5,381,558 7,654,266 Public Works 4,421,239 4,705,326 2,940,272 3,557,336 3,605,820 3,962,004 5,441,582 5,148,542 5,531,650 4,988,268 Public Safety 6,624,180 7,014,723 7,407,531 7,677,426 8,030,234 8,730,712 8,844,067 9,170,586 9,358,289 9,505,403 Capital Outlay 103,249 4,457 268,034 292,742 1,981,850 736,315 1,723,775 10,006,820 10,375,082 23,131 Debt Service
Principal 155,000 7,335,000 - - - - - - 230,000 243,625 Interest 359,065 351,590 - - - - - 494,561 427,436 422,842 Other Charges
Total Expenditures 17,845,001 25,819,608 17,539,088 19,092,514 24,682,562 22,816,036 25,881,743 34,367,924 36,414,898 27,301,192 (6,179,107) 124,821 1,995,241 1,515,513 (463,955) 2,994,027 1,895,632 (9,154,123) (12,110,397) 3,679,447 Transfers In 2,284,326 9,422,668 1,209,782 2,040,859 3,517,923 2,548,103 3,708,774 13,309,198 14,573,345 6,235,970 Transfers Out (2,284,326) (9,422,668) (1,209,782) (2,040,859) (3,517,923) (2,548,103) (3,708,774) (13,309,198) (14,573,345) (6,235,970) Bonds Issued** - - - - 1,211,194 12,006,870 - 23,131
Total Other Financing - - - - - - 1,211,194 12,006,870 - 23,131 Sources (Uses)
Net Change in Fund Bal. 124,821 $ (6,179,107) $ 1,995,241 $ 1,515,513 $ (463,955) $ 2,994,027 $ 3,106,826 $ 2,852,747 $ (12,110,397) $ 3,702,578 $
2.90% 29.78% 0.00% 0.00% 0.00% 0.00% 0.00% 2.03% 2.52% 2.44% * Fiscal Year 2013-14 debt service includes payoff of the City Hall COP bond.
Source: City Finance Department
**In anticipation of the issuance of tax-exempt obligations for the Aliso Viejo Ranch project, the City Council passed a reimbursement resolution on February 20, 2019. The resolution would allow the City to reimburse itself for expenditures relating to the Aliso Viejo Ranch Project. On August 13, 2019, the City issued $12,250,000 of tax-exempt Certificates of Participation to provide financing for the construction of the Aliso Viejo Ranch.
Excess of Revenues over
Expeditures
Fiscal Years
Other Financing Sources
(Uses)
Debt Service as a % of
Noncapital Expenditures
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2012-13 2013-14* 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Thousands Fiscal Year
Changes in Fund Balance Revenues Expeditures Other Sources/Uses 107 188
Table 6
CITY OF ALISO VIEJO
GENERAL GOVERNMENT - REVENUES BY SOURCE
LAST TEN FISCAL YEARS
Fiscal Licenses Inter- Charges for Fines & Use of Money Other Year Taxes & Permits Governmental Services Forfeitures & Property Revenue Total 2012-13 13,348,264 $ 482,730 $ 2,090,978 $ 817,633 $ 327,174 $ 342,103 $ 560,940 $ 17,969,822 $ 2013-14 13,648,082 377,459 2,858,224 1,029,005 271,644 332,172 1,123,915 19,640,501 2014-15 14,064,937 676,218 2,189,004 1,190,138 415,671 288,325 710,036 19,534,329 2015-16 14,629,530 694,054 2,617,535 1,639,479 312,400 358,917 356,112 20,608,027 2016-17 16,884,140 664,202 2,585,675 2,519,225 282,322 359,023 924,020 24,218,607 2017-18 17,777,707 957,209 2,963,077 2,864,619 300,988 524,729 421,734 25,810,063 2018-19 17,704,139 706,763 4,218,802 2,639,775 307,513 1,152,130 1,048,252 27,777,374 2019-20 16,270,976 719,720 4,208,995 2,047,978 275,229 1,258,109 432,794 25,213,801 2020-21 14,823,926 976,781 3,987,463 2,198,864 310,419 1,068,212 938,836 24,304,501 2021-22 18,420,699 714,168 6,674,078 3,636,265 173,133 867,839 494,457 30,980,639 ** Includes General and Special Revenue Funds.
Source: City Finance Department
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000 Thousands
Fiscal Year
Total General Government Revenues
Other Revenue
Use of Money & Property
Fines & Forfeitures
Charges for Services
Inter- Governmental
Licenses & Permits
Taxes
108 189
Table 7
CITY OF ALISO VIEJO
GENERAL GOVERNMENT - TAX REVENUES BY SOURCE
LAST TEN FISCAL YEARS
Fiscal
Year Total
2012-13 4,685,598 $ 6,379,228 $ 1,487,395 $ 780,075 $ 15,968 $ 13,348,264 $ 2013-14 4,814,560 6,441,021 1,511,450 862,294 18,756 13,648,081 2014-15 4,795,433 6,741,164 1,584,358 916,286 27,696 14,064,937 2015-16 4,601,042 7,317,139 1,573,339 1,108,102 29,908 14,629,530 2016-17 6,236,832 7,503,432 1,507,041 1,606,165 30,670 16,884,140 2017-18 6,545,732 7,936,613 1,577,213 1,696,598 21,551 17,777,707 2018-19 6,128,143 8,211,394 1,685,807 1,640,628 38,167 17,704,139 2019-20 4,765,921 8,647,685 1,598,246 1,220,997 38,127 16,270,976 2020-21 3,524,908 8,981,521 1,552,231 723,599 41,577 14,823,836 2021-22 6,117,932 9,211,738 1,744,239 1,413,074 - 18,486,983 Source: City Finance Department
Sales Taxes Property Taxes Franchise Taxes
Transient
Occupancy Taxes Other Taxes
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
$10,000,000
Tax Source
Total General Government Tax Revenues by Source
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
109 190
Table 8
CITY OF ALISO VIEJO
TAXABLE SALES TAX PRODUCERS BY CATEGORY (IN THOUSANDS)
LAST TEN CALENDAR YEARS
ADJUSTED FOR ECONOMIC DATA
2012 2013 2014 2015 2016
Food Stores 18,951 $ 19,427 $ 20,207 $ 21,587 $ 22,672 $ Eating and Drinking Places 61,591 63,636 64,117 66,766 73,322 Auto Dealers and Supplies 6,074 6,193 5,581 6,136 6,132 Services Stations 71,050 68,668 67,240 60,348 55,131
Other Retail Stores 150,222 154,642 157,732 171,341 179,247 All Other Outlets 137,390 146,720 149,466 137,276 255,630 Total 445,278 $ 459,286 $ 464,343 $ 463,454 $ 592,134 $ 2017 2018 2019 2020 2021
Food Stores 22,453 $ 22,417 $ 21,367 $ 23,954 $ 22,567 $ Eating and Drinking Places 70,005 69,414 69,100 57,032 69,754 Auto Dealers and Supplies 5,545 5,421 6,521 5,329 5,281 Services Stations 57,190 65,193 64,494 42,939 71,162
Other Retail Stores 163,600 162,082 128,486 102,006 123,125 All Other Outlets 306,885 258,170 233,582 177,317 243,052 Total 625,678 $ 582,697 $ 523,550 $ 408,577 $ 534,941 $ Source: State Board of Equalization, California Department of Taxes and Fees Administration, State Controller's Office, The HdL Companies $- $100 $200 $300 $400 $500 $600 $700
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Thousands Fiscal Year
Sales Tax Producers by Category
Food Stores Eating and Drinking Places
Auto Dealers and Supplies Services Stations
Other Retail Stores All Other Outlets
110 191
Table 9
CITY OF ALISO VIEJO
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
Fiscal
Year Amount Amount
2012-131 $ 5,830,184 5,902,705 $ 98.77% 37,843 $ 5,868,027 $ 99.41% 2013-141 6,139,991 6,109,976 99.51% 26,570 6,136,546 99.94% 2014-151 6,453,445 6,412,710 99.37% 23,671 6,436,381 99.74% 2015-161 6,778,670 6,724,355 99.20% 22,577 6,746,932 99.53% 2016-171 7,167,823 7,103,256 99.10% 21,428 7,124,684 99.40% 2017-18 7,559,194 7,499,294 99.21% 25,595 7,524,890 99.55% 2018-19 7,985,095 7,948,958 99.55% 19,426 7,968,384 99.79% 2019-20 8,269,551 8,233,770 99.57% 20,806 8,254,576 99.82% 2020-21 8,585,769 8,549,014 99.57% 28,004 8,577,018 99.90% 2021-22 8,818,634 8,733,020 99.03% 28,433 8,761,453 99.35% 1 Includes amounts received for Property Tax-In Lieu of VLF 3 Total Levy Collections may exceed 100% due to prior years delinquent taxes and delinquent tax penalties collected.
Source: Orange County Auditor/Controller.
Collected within the Fiscal Year
of Levy
Total Levy Collections
to Date 3
2 The column includes the total amount of delinquent taxes collected in each fiscal year. The Orange County Auditor-Controller tax ledger does not provide detailed information regarding the levy year to which delinquent tax collections pertain.
Taxes Levied for
the Fiscal Year
Percent of
Levy
Collections in
Subsequent Years 2
Percent of
Levy
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
$10,000,000
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Fiscal Year
Property Tax Levies and Collections Taxes Levied
Total Collections
111 192
Table 10
CITY OF ALISO VIEJO
ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
Fiscal Secured Unsecured Nonunitary Percentage Total Direct Year Gross Value Gross Value Utilities Exemptions Total Increase Rate Applied 2011-12 7,553,096,782 $ 310,902,332 $ - $ 352,590,770 $ 7,511,408,344 $ 0.69% 0.02174 2012-13 7,643,633,146 290,218,553 - 328,327,398 7,605,524,301 1.25% 0.02167 2013-14 7,889,773,458 332,701,593 - 344,663,043 7,877,812,008 3.58% 0.02166 2014-15 8,449,701,616 320,520,081 - 329,481,251 8,440,740,446 7.15% 0.02165 2015-16 8,821,939,196 306,239,139 - 362,214,100 8,765,964,235 3.85% 0.02165 2016-17 9,298,401,724 305,313,282 - 341,610,276 9,262,104,730 5.66% 0.02165 2017-18 9,788,791,533 339,021,986 - 370,210,705 9,757,602,814 5.35% 0.02170 2018-19 10,497,372,155 280,375,081 - 457,069,555 10,320,677,681 5.77% 0.02163 2019-20 10,902,480,454 290,597,292 - 486,424,453 10,706,653,293 3.74% 0.02165 2020-21 11,227,375,357 335,321,001 - 504,713,951 11,057,982,407 3.28% 0.02168 2021-22 11,546,139,848 349,456,510 - 537,926,777 11,357,669,581 2.71% 0.02167 Source: The HDL Companies
$4,000
$4,500
$5,000
$5,500
$6,000
$6,500
$7,000
$7,500
$8,000
$8,500
$9,000
$9,500
$10,000
$10,500
$11,000
$11,500
$12,000
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Millions Fiscal Year
Net Taxable Property Value
112 193
Table 11
CITY OF ALISO VIEJO
DIRECT AND OVERLAPPING PROPERTY TAX RATES
(RATE PER $100 OF ASSESSED VALUE)
LAST TEN FISCAL YEARS
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 City Direct Rates
City's Share of 1% Levy per Prop 13(1) 0.02134 0.02134 0.02134 0.02134 0.02134 0.02134 0.02134 0.02134 0.02134 0.02134 Total City Direct Rate (2) 0.02166 0.02167 0.02165 0.02165 0.02165 0.02170 0.02163 0.02165 0.02165 0.02167 Overlapping Rates
Basic Levy(3) 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 Capistrano Union 0.01171 0.00972 0.00900 0.00845 0.00843 0.00800 0.00786 0.00745 0.00756 0.00727 Laguna Beach Unified 0.01694 0.01567 0.01461 0.01396 0.01371 0.01287 0.01285 0.01266 0.01012 0.01018 Saddleback Valley Unified 0.03265 0.03207 0.00350 0.03008 0.02688 0.02365 0.02392 0.02295 0.02336 0.02200 Moulton Niguel Water District 0.13840 0.12977 0.08600 0.09041 0.00815 0.00000 0.00000 0.00000 0.00000 0.00000 Metropolitan Water District 0.00350 0.00350 0.02806 0.00350 0.00350 0.00350 0.00350 0.00350 0.00350 0.00350 Total Overlapping Rates(4) 1.19073 1.20320 1.14117 1.14640 1.06067 1.04802 1.04813 1.04656 1.04454 1.04295 Total Direct & Overlapping Tax Rates 1.22487 1.21239 1.16282 1.16805 1.08232 1.06972 1.06976 1.06821 1.06619 1.06462 Source: The HDL Companies, Orange County Assessor
(3) In 1978, California voters passed Proposition 13 which set the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of any voter approved bonds.
(4) Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all city property owners.
Fiscal Years
(1) City's Share of 1% Levy is based on the City's share of the general fund tax rate area with the largest net taxable value within the city. ERAF general fund tax shifts may not be included in tax ratio figues.
(2) Total Direct Rate is the weighted average of all individual direct rates applied to by the government preparing the statistical section information and excludes revenues derived from aircraft. Beginning in 2013/14 the Total Direct Rate no longer includes revenue generated from the former redevelopment tax rate areas. Challenges to recognized enforceable obligations are assumed to have been resolved during 2012/13. For the purposes of this report, residual revenue is assumed to be distributed to the City in the same proportions as general fund revenue.
113 194
Table 12
CITY OF ALISO VIEJO
PRINCIPAL PROPERTY TAXPAYERS
JUNE 30, 2022 AND 10 YEARS AGO
Taxpayer Primary Use
Moritz Associates LLC Residential 214,440,422 $ 1.89%
Barcelona LLC Residential 188,707,570 1.66%
Enterprise Office Owner Commercial 165,035,028 1.45%
Vantis Multifamily LLC Residential 157,841,890 1.39%
Microventon, Inc Commercial 146,609,699 1.29%
City Lights-Aliso Viejo LLC Residential 125,888,928 1.11% Summit Office LLC Commercial 120,568,003 1.06%
Sequoia Equities Residential 89,728,852 0.79%
PLC 3 LP Residential 87,876,110 0.77%
20 30 Enterprise JV LLC Commercial 86,890,960 0.77%
Top Ten Totals 1,383,587,462 $ 12.18%
Taxpayer Primary Use
Sequoia Equities Residential 140,259,368 $ 1.84%
City Lights - Aliso Viejo LLC Residential 108,162,157 1.42% Moritz Associates LLC Residential 107,738,690 1.42%
Barcelona LLC Residential 92,827,869 1.22%
RREEF America Reit II Corporation Commercial 92,442,600 1.22% Qlogic Corporation Commerical 75,954,534 1.00%
Aliso Viejo Office Partners Holding Co. Commerical 75,804,000 1.00% OC SD Holdings LLC Residential 65,969,917 0.87%
Aliso - Holly Oaks Partners LP Residential 61,667,126 0.81% Aliso Viejo RP-V1 LLC Commerical 58,463,037 0.77%
Top Ten Totals 879,289,298 $ 11.57%
Source: The HDL Companies
Orange County Assessor
2012-13
Percentage of Total
Assessed Valuation Assessed Valuation
2021-22
Percentage of Total
Assessed Valuation Assessed Valuation
114 195
Table 13
CITY OF ALISO VIEJO
RATIOS OF NET DIRECT GENERAL OBLIGATION DEBT TO ASSESSED VALUE AND NET GENERAL OBLIGATION DEBT PER CAPITA
LAST TEN FISCAL YEARS
Percentage of General Net General
Fiscal Net Direct General Assessed Obligation Debt to Population Obligation Year Obligation Debt Value Assessed Value Debt per Capita 2012-13 7,335,000 $ 7,605,524,301 $ 0.096% 49,477 0.35% 148.25 2013-14 - 7,877,812,008 0.000% 49,951 - -
2014-15 - 8,440,740,446 0.000% 50,509 - -
2015-16 - 8,765,964,235 0.000% 50,509 - -
2016-17 - 9,262,104,730 0.000% 50,312 - -
2017-18 - 9,757,602,814 0.000% 51,950 - -
2018-19** - 10,320,677,681 0.000% 51,372 - -
2019-20 - 10,706,653,293 0.000% 50,044 - -
2020-21 - 11,057,982,407 0.000% 49,813 - -
2021-22 - 11,350,064,655 0.000% 50,782 - -
Ratios to Assessed Valuation:
Total Overlapping Tax and Assessment Debt 0.26%
Total Direct Debt 0.10%
Gross Combined Total Debt 0.58%
Net Combined Total Debt 0.58%
Source: California Municipal Statistics, Inc
HDL Coren & Cone
Percentage of
Personal
Income
** Subsequent Event: On August 13, 2019 the City issued $12,250,000 of tax-exempt Certificates of Participation to provide financing for the construction of the Aliso Viejo Ranch. This debt will be refelected in the FY 2019-20 financial report. 115 196
Table 14
CITY OF ALISO VIEJO
COMPUTATION OF DIRECT AND OVERLAPPING BONDED DEBT
JUNE 30, 2022
2021-2022 Assessed Valuations $ 11,357,669,581
OVERLAPPING TAX AND ASSESSMENT DEBT: Total Debt 6/30/22 % Applicable (1) Debt 6/30/22 Metropolitan Water District 26,830,088 $ 0.335% 67,586 $ Capistrano USD School Facilities Improvement District No 1 16,013,342 0.772% 100,478 Laguna Beach Unified School District, 15,920,024 1.668% 234,104 Saddleback Valley Unified School District 99,864,969 0.477% 439,031 City of Aliso Viejo Community Facilities Disctrict No. 2005-01 28,950,000 100.000% 28,240,000 TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT 29,081,199
OVERLAPPING GENERAL FUND DEBT:
Orange County General Fund Obligations 208,914,523 1.666% 6,362,204 Orange County Pension Obligation Bonds 116,492,175 1.666% 2,019,192 Orange County Board of Education Certificates of Participation 12,929,994 1.666% 205,085 Capistrano Unified School District Certificates of Participation 25,160,002 10.477% 2,440,617 Moulton-Niguel Water District Certificates of Participation 55,179,999 26.699% 14,175,834 TOTAL NET DIRECT OVERLAPPING GENERAL FUND DEBT 25,202,932 TOTAL NET OVERLAPPING DEBT 54,284,131
DIRECT GENERAL FUND DEBT:
City of Aliso Viejo** 12,020,000 100.000% 11,785,000
TOTAL DIRECT DEBT 12,020,000
GROSS COMBINED TOTAL DEBT 66,069,131 (2)
NET COMBINED TOTAL DEBT 66,304,131 $
(1) Percentage of overlapping agency's assesed valuation located within boundries of the city. (2) Excludes tax and revenue anticipation notes, enterprise revenue, mortage revenue and non-bonded capital lease obligations.
Ratios to Assessed Valuation:
Total Overlapping Tax and Assessment Debt 0.26%
Total Direct Debt 0.10%
Gross Combined Total Debt 0.58%
Net Combined Total Debt 0.58%
Source: California Municipal Statistics, Inc
** Subsequent Event: On August 13, 2019 the City issued $12,250,000 of tax-exempt Certificates of Participation to provide financing for the construction of the Aliso Viejo Ranch. This debt will be refelected in the FY 2019-20 financial report. 116 197
Table 15
CITY OF ALISO VIEJO
LEGAL DEBT MARGIN
LAST TEN FISCAL YEARS
Fiscal Years Legal Debt Margin
2012-13 277,872,161
2013-14 296,030,537
2014-15 316,527,767
2015-16 328,567,264
2016-17 347,328,927
2017-18 365,910,106
2018-19 387,025,413
2019-20 388,081,390
2020-21 402,654,340
2021-22 414,127,609
Assessed Valuations:
Assessed Value $ 11,562,696,358
Add Back: Exempt Property (504,713,951)
Total Assessed Value $ 11,057,982,407
Legal Debt Margin:
Debt limitations-3.75% of Total Assessed Value* $ 414,674,340 Amount of Debt Applicable to Limit** 12,020,000
Legal Debt Margin $ 402,654,340
Note: The general laws of the State of California for muncipalities provide for a legal debt limit of 15% of grossed assessed valuation. However, this provision was enacted when assessed valuation was established based on 25% of market value. Effective with fiscal year 1981-82, taxable property is assessed at 100% of market value. Although the debt limit provision has not been amended by the State since this change, the percentage has been proportionately modified to 3.75% for the purpose of this calculation for consistency with the original intent of the State's debt limit.
Source: City Finance Department
The HDL Companies
Computation Of Legal Debt Margin for Fiscal Year 2021-22 ** Subsequent Event: On August 13, 2019 the City issued $12,250,000 of tax-exempt Certificates of Participation to provide financing for the construction of the Aliso Viejo Ranch. This debt will be refelected in the FY 2019-20 financial report. 117 198
Table 16
CITY OF ALISO VIEJO
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
Population Total Income
2012 49,477 $ 2,100,001,788 $ 42,444 27,200 2.64% 5.60% 2013 49,951 2,100,839,000 42,058 27,400 0.74% 4.50%
2014 49,939 2,181,535,000 43,684 27,900 1.82% 3.60%
2015 50,509 2,223,991,000 44,032 28,200 1.08% 3.10%
2016 50,312 2,274,460,000 45,207 29,100 3.19% 3.30%
2017 51,950 2,311,366,000 44,492 29,400 1.03% 2.70%
2018 51,372 2,385,153,000 46,429 29,700 1.02% 2.60%
2019 50,044 2,447,088,000 48,899 29,300 -1.35% 2.30%
2020 49,813 2,559,352,000 51,379 26,200 -10.58% 6.60%
2021 50,782 2,566,572,000 50,541 28,000 6.87% 3.40%
#DIV/0!
* Calendar year unemployment data uses December year-over-year figures.
Source: California Department of Finance, California Employment Development Department, The HDL Companies Unemployment
Rate*
Calendar
Year
Per Capita
Income
Total
Employment*
Employment
Growth Rate*
-
10,000
20,000
30,000
40,000
50,000
60,000
Calendar Year
Aliso Viejo Total Employment*
Per Capita Income
Population
118 199
Table 17
CITY OF ALISO VIEJO
PRINCIPAL EMPLOYERS
JUNE 20, 2022 AND 10 YEARS AGO
MicroVention 1700 6.87%
United Parcel Service 1200 4.85%
Ambry Genetics 705 2.85%
Vylla 607 2.45%
Fluor Corporation 606 2.45%
Orange County Sheriffs Department 450 1.82%
UST 349 1.41%
NeoGenomics Laboratories 300 1.21%
Metagenics 280 1.13%
Alcon Lensx Inc 201 0.81%
Total Top Employers 6,398 25.87%
Total Employees in City 24,735
United Parcel Service 1,000 5.67%
Pacific Life Insurance 811 4.59%
Capistrano Unified School District 679 3.85%
Fluor Corporation 630 3.57%
Quest Software 600 3.40%
Qlogic 490 2.78%
Renaissance-Aliso Viejo 259 1.47%
Pepsi Bottling Group Inc 215 1.22%
Smith Micro Software Inc 200 1.13%
Merit Property Management 199 1.13%
Total Top Employers 5,083 28.80%
Total Employees in City 17,650
Data was not available in 2012
Source: City Finance Department
2011
Employer Number of Employees Percent of Total Employment 2022
Employer Number of Employees Percent of Total Employment 119 200
Table 18
CITY OF ALISO VIEJO
OPERATING INDICATORS BY FUNCTION
LAST TEN FISCAL YEARS
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Public Safety:
Part I Crimes 458 340 308 395 440 438 488 460 415 424
Public Works:
Streets Resurfaced 42 63 53 38 29 1 57 1 103 47
Building Permits Issued 1,328 1,486 2,093 2,455 2,129 2,225 1,711 1,754 1,755 2,105 Plan Checks Performed 218 185 219 275 205 184 197 234 309 686 Community Services***:
Recreation
Contract Classes - - - - - 145 452 999 283 934
Contract Class Participants - - - - - 443 1,559 2,239 1,599 4,352 Events
City Events 8 8 8 7 7 16 26 8 9 17
City Sponsored Events 6 6 6 6 7 26 27 5 2 8
Senior Programs
Senior Mobility Program Rides - - - 1,796 2,141 2,419 2,102 2,340 - 345 Finance
Accounts Payable
AP Line Items Entered 3,647 3,344 3,745 4,041 4,368 4,454 4,791 4,964 4,855 5,947 Invoices Processed 2,412 2,309 2,560 2,852 3,012 3,069 3,271 3,216 3,166 3,698 Payments Processed 1,712 1,715 2,148 2,220 2,257 2,284 2,474 2,330 2,338 2,699 Payroll
Payroll Checks Issued 490 524 547 622 627 635 748 834 912 1,069 ***The Community Services department was restructured in FY 2017-18 Source: City Public Works Department, Community Services Department, Orange 120 201
Table 19
CITY OF ALISO VIEJO
FULL-TIME AND PART-TIME CITY EMPLOYEES BY FUNCTION
LAST TEN FISCAL YEARS
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 General Government 1 8 9 9 10 10 10 10 11.3 12.9 13.3
Public Safety 0.5
Public Works** - - - 1 1 1 2 3 3 3
Community Services*** - - - - - 2.6 5.5 7.3 12.1 12.0
Community Development 7 7 7.4 7.4 7.4 5.0 5 6 5.5 7
Total 15.0 16.0 16.4 18.4 18.4 18.6 22.5 27.6 33.5 35.3 1 Attorney Services were contracted through Best, Best, & Krieger LLP and are not included. * Full Time Equivalent
**Public Works Engineering and Building & Safety were contracted through Charles Abbott and Associates *** Community Services Department was restructured in FY 17-18 Source: City Finance Department
Police Services were contracted through the Orange County Sheriffs Department 121 202
Table 20
CITY OF ALISO VIEJO
CAPITAL ASSETS STATISTICS BY FUNCTION
LAST TEN FISCAL YEARS
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 General Government
City Hall 1 1 1 1 1 1 1 1 1 1
Public Works:
Streets (Miles) 73 73 73 73 73 73 73 73 73 73
Street Lights ** 1,263 1,299 1,410 1,410 1,410 1,410 1,411 1,407 1,407 1,407 Traffic Signals ** 42 42 47 47 47 47 47 48 48 48
Parks & Recreation:
Parks *** 2 2 2 2 2 2 2 2 2 2
Community Facilities 4 4 4 4 4 4 4 4 4 4
Community Development
Housing - - - - - - - - - 1
** The City leases 1,230 of the streetlights and shares 3 of the traffic signals with neighboring cities. *** Aliso Viejo Community Association independently owns and manages 21 parks in Aliso Viejo.
Source: City Public Works Department
Fiscal Year
122 203
Table 21
CITY OF ALISO VIEJO
SCHEDULE OF INSURANCE
JUNE 30, 2022
Type of Coverage Limits/Deductibles Insurer Policy period General and Automobile Liability:
General Liability, Automobile Liability, $50,000,000 combined single limit California Joint Powers 07/01/21 - 07/01/22 Bodily Injury, Property Damage, per occurrence Insurance Authority.
Personal Injury.
Pollution & Remediation Legal Liability:
Scheduled property, streets, storm $5,000,000 per member Self Insured Program/ 07/01/21 - 07/01/22 drains, approved underground tanks & $250,000 per occurrence self-insured California Joint Powers non-owned disposal sites. retention. Insurance Authority.
Property:
All-Risk, including buildings, contents, Limit $500,000,000 per occurrence Self Insured Program/ 07/01/21 - 07/01/22 garaged vehicles, contractor's equipment, $10,000 deductible per occurrence California Joint Powers fine arts, rental income and other Insurance Authority. miscellaneous extensions of coverage.
Crime:
Public Employee Blanket
Fidelity Bond-
Faithful Performance Bond $1,000,000 limit per member, Alliant Insurance 07/01/21 - 07/01/22 Coverage 'O' deductible of $2,500 per occurrence Services, Inc.
Depositor's Forgery $1,000,000 limit per member, Alliant Insurance 07/01/21 - 07/01/22 Coverage 'B' deductible of $2,500 per occurrence Services, Inc.
Crime- Money & Securities $1,000,000 limit per member, Alliant Insurance 07/01/21 - 07/01/22 Coverage 'C' deductible of $2,500 per occurrence Services, Inc.
Computer Fraud $1,000,000 limit per member, Alliant Insurance 07/01/21 - 07/01/22 Coverage 'F' deductible of $2,500 per occurrence Services, Inc.
Worker's Compensation:
Work related injury/illness claims for California Statutory Benefits for Self Insured Program/ 07/01/21 - 07/01/22 temporary and permanent disability, and workers' compensation California Joint Powers Employer's Liability $10,000,000 per occurrence for
Employer's Liability Insurance Authority.
Special Events:
Tenants/Users for Property $1,000,000 per occurrence, Alliant Insurance 07/01/21 - 07/01/22 damage/bodily injury $1,000,000 aggregate per event. Services, Inc. $5,000 medical expense limit.
Source: City Finance Department
123 204
Table 22
CITY OF ALISO VIEJO
MISCELLANEOUS STATISTICAL INFORMATION
JUNE 30, 2022
Date of Incorporation
July 01, 2001
Form of Government
Council-Manager
Area
7 Square miles
Miles of Streets
72.1 miles
Miles of Sidewalks
147 miles
Employees
35.3 Public Safety
Police Department
Contracted with the Orange County Sheriff's Department
Fire Department
Contracted with the Orange County Fire Authority
Recreation & Culture:
Parks - Community & Neighborhood
23 Park Acreage (developed)
260 Acres
Education:
Elementary Schools (K-6)
4 Middle Schools (6-8)
2 High Schools (9-12)
1 Charter Schools
1 Private Schools
10 Universities
1 *Source: State of California, Department of Finance
124 205
735 E. Carnegie Dr. Suite I 00
San Bernardino , CA 92408
909 889 087 1 T
909 889 536 1 F
r amscpa.net
PARTNERS
Teny P Shea. CPA
Scott W Manno. CPA. CGMA
Leena Shanbhag. CPA. MST. CGMA
Br·adferd A. Welebir. CPA. MBA. CGMA
Jenny W Liu. CPA. MST
Brenda L Odle. CPA, MST 1Parrner Emer·irus l
MANAGERS / STAFF
Gar·denya Duran, CPA. CGMA
Br·ianna Schulu. CPA. CGMA
Seong-Hyea Lee. CPA. MBA
Evelyn Mor·entin-Barcena. CPA
Veronrca Hernandez. CPA
Laura Arvizu. CPA
X rnlu Zoe Zhang, CPA MSA
John Maldonado, CPA. MSA
Julia Rodr·iguez Fuentes. CPA. MSA
Demi Hrte. CPA
Jeffrey McKennan, CPA
MEMBERS
Amer-ican I nstrtute of
Cernfied Public Accountants
PCPS The A/CPA A.I/ranee
{o, CPA Ftrms
Governmental Audit
Quality Cente,
Employee Benefit Plan
Aud,r Qual,ry Cente,
Californra Socrety of
Cen:ifred Publrc Accountants
dil5b Proud Member of
qgp AlliottGlobalAlliance™
mm IIIJ
ROGERS, ANDERSON , MALODY & SCOTT, LLP
CERTIFIED PUBLIC ACCOUNTANTS. SINCE 1948
STABILITY. ACCURACY. TRUST.
1 December 15, 2022
To the Honorable Mayor and Members of the City Council
City of Aliso Viejo, California
We have audited the financial statements of City of Aliso Viejo (the City) as of and for the year ended June 30, 2022, and have issued our report thereon dated December 15, 2022. Professional standards require that we advise you of the following matters relating to our audit.
Our Responsibility in Relation to the Financial Statement Audit As communicated in our engagement letter dated May 26, 2022, our responsibility, as described by professional standards, is to form and express an opinion 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 City’s internal control over financial reporting. Accordingly, as part of our audit, we considered the internal control of the entity 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.
206
Honorable City Council December 15, 2022
City of Aliso Viejo
2 Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, as appropriate, our firm have complied with all relevant ethical requirements regarding independence.
Significant Risks
We have identified the possibility of the following significant risks:
Management's override of internal controls over financial reporting – Management override of internal controls is the intervention by management in handling financial information and making decisions contrary to internal control policy.
Revenue recognition – Revenue recognition is a generally accepted accounting principle that refers to the conditions under which an entity can recognize a transaction as revenue.
Auditing standards indicate that recognizing revenue is a presumed fraud risk and usually classified as a significant risk in most audits.
These significant risks are presumptive in most audits and merit attention by the auditors due to the direct impact over financial reporting and internal control processes. Although identified as significant risks, we noted no matters of management override of controls or deviations from generally accepted accounting principles which caused us to modify our audit procedures or any related matters which are required to be communicated to those charged with governance due to these identified risks.
Qualitative Aspects of the Entity’s Significant Accounting Practices Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by the City is included in Note 1 to the financial statements. As described in Note 1 to the financial statements, during the year, the entity changed its method of accounting for leases by adopted Governmental Accounting Standards Board (GASB) Statement No. 87, Leases. 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.
207
Honorable City Council December 15, 2022
City of Aliso Viejo
3 The most sensitive accounting estimates affecting the financial statements are:
Management’s estimate of capital asset depreciation is based on historical estimates of each capitalized item’s useful life. We evaluated the key factors and assumptions used to develop the estimated useful lives in determining that it is reasonable in relation to the financial statements taken as a whole.
The estimate of the net pension liability and net OPEB liability are based on actuarial reports provided by independent actuaries. We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable in relation to the financial statements taken as a whole.
Management’s estimate of leases receivable, deferred inflows of resources related to leases, and lease amortization is based on present value calculations using certain terms and assumptions in the lease agreements in accordance with generally accepted accounting principles. Management’s estimate of lease liabilities, right-to-use assets, and asset amortization is based on present value calculations using certain terms and assumptions in the lease agreements and estimated useful lives of assets in accordance with generally accepted accounting principles. We evaluated the key factors and assumptions used to develop the lease related estimates in determining that it is reasonable in relation to the financial statements taken as a whole.
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 disclosure of accumulated depreciation in notes to the basic financial statements is based on estimated useful lives which could differ from actual useful lives of each capitalized item.
The disclosure of the net pension liability and related pension information in the notes to the basic financial statements is based on actuarial assumptions which will differ from actual amounts in future periods. The information disclosed is based on actuarial information.
The disclosure of the postemployment benefits other than pensions (OPEB) in the notes to the basic financial statements identifies the annual OPEB cost and the funded status of the actuarial accrued liability. The information disclosed is based on actuarial information.
The disclosure of leases receivable, deferred inflows of resources related to leases, lease amortization, leases liabilities, right-to-use assets, and asset amortization in the basic financial statements is based on certain terms and assumptions in the lease agreements which could differ from actual amounts.
Significant Difficulties Encountered during the Audit
We encountered no significant difficulties in dealing with management relating to the performance of the audit.
208
Honorable City Council December 15, 2022
City of Aliso Viejo
4 Uncorrected and Corrected Misstatements
For purposes of this communication, professional standards 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. None of the misstatements identified by us as a result of our audit procedures and corrected by management were material, either individually or in the aggregate, to the financial statements taken as a whole or applicable opinion units.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the City’s financial statements or the auditor’s report. No such disagreements arose during the course of the audit.
Representations Requested from Management
We have requested certain written representations from management, which are included in the attached letter dated December 15, 2022.
Management’s Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters.
Other Significant Matters, Findings, or Issues
In the normal course of our professional association with the City, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, 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 Annual Reports
Pursuant to professional standards, our responsibility as auditors for other information, whether financial or nonfinancial, included in City’s annual report, does not extend beyond the information identified in the audit report, and we are not required to perform any procedures to corroborate such other information. However, in accordance with such standards, we have:
Read the information and considered whether such information, or the manner of its presentation, was materially inconsistent with its presentation in the financial statements. 209
Honorable City Council December 15, 2022
City of Aliso Viejo
5 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 and management of the City and is not intended to be and should not be used by anyone other than these specified parties.
San Bernardino, California
210
211
212
213
214
215
735 E. Carnegie Dr. Suite I 00
San Bernardino , CA 92408
909 889 087 1 T
909 889 536 1 F
r amscpa.net
PARTNERS
Teny P Shea. CPA
Scott W Manno. CPA. CGMA
Leena Shanbhag. CPA. MST. CGMA
Br·adferd A. Welebir. CPA. MBA. CGMA
Jenny W Liu. CPA. MST
Brenda L Odle. CPA, MST 1Parrner Emer·irus l
MANAGERS / STAFF
Gar·denya Duran, CPA. CGMA
Br·ianna Schulu. CPA. CGMA
Seong-Hyea Lee. CPA. MBA
Evelyn Mor·entin-Barcena. CPA
Veronrca Hernandez. CPA
Laura Arvizu. CPA
X rnlu Zoe Zhang, CPA MSA
John Maldonado, CPA. MSA
Julia Rodr·iguez Fuentes. CPA. MSA
Demi Hrte. CPA
Jeffrey McKennan, CPA
MEMBERS
Amer-ican I nstrtute of
Cernfied Public Accountants
PCPS The A/CPA A.I/ranee
{o, CPA Ftrms
Governmental Audit
Quality Cente,
Employee Benefit Plan
Aud,r Qual,ry Cente,
Californra Socrety of
Cen:ifred Publrc Accountants
dil5b Proud Member of
qgp AlliottGlobalAlliance™
mm IIIJ
ROGERS, ANDERSON , MALODY & SCOTT, LLP
CERTIFIED PUBLIC ACCOUNTANTS. SINCE 1948
STABILITY. ACCURACY. TRUST.
1 REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
Independent Auditor’s Report
To the Honorable Mayor and Members of the City Council
City of Aliso Viejo, California
We have audited, in accordance with 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 governmental activities, each major fund, and the aggregate remaining fund information of the City of Aliso Viejo (the City) as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated December 15, 2022.
Internal Control over Financial Reporting
In planning and performing our audit of the 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.
216
2 Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control over financial reporting 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 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 determination of financial statement amounts. 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 entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
San Bernardino, California
December 15, 2022
217
735 E. Carnegie Dr. Suite I 00
San Bernardino , CA 92408
909 889 087 1 T
909 889 536 1 F
r amscpa.net
PARTNERS
Teny P Shea. CPA
Scott W Manno. CPA. CGMA
Leena Shanbhag. CPA. MST. CGMA
Br·adferd A. Welebir. CPA. MBA. CGMA
Jenny W Liu. CPA. MST
Brenda L Odle. CPA, MST 1Parrner Emer·irus l
MANAGERS / STAFF
Gar·denya Duran, CPA. CGMA
Br·ianna Schulu. CPA. CGMA
Seong-Hyea Lee. CPA. MBA
Evelyn Mor·entin-Barcena. CPA
Veronrca Hernandez. CPA
Laura Arvizu. CPA
X rnlu Zoe Zhang, CPA MSA
John Maldonado, CPA. MSA
Julia Rodr·iguez Fuentes. CPA. MSA
Demi Hrte. CPA
Jeffrey McKennan, CPA
MEMBERS
Amer-ican I nstrtute of
Cernfied Public Accountants
PCPS The A/CPA A.I/ranee
{o, CPA Ftrms
Governmental Audit
Quality Cente,
Employee Benefit Plan
Aud,r Qual,ry Cente,
Californra Socrety of
Cen:ifred Publrc Accountants
dil5b Proud Member of
qgp AlliottGlobalAlliance™
mm IIIJ
ROGERS, ANDERSON , MALODY & SCOTT, LLP
CERTIFIED PUBLIC ACCOUNTANTS. SINCE 1948
STABILITY. ACCURACY. TRUST.
1 Independent Accountant’s Report on
Agreed-Upon Procedures Applied to the
Appropriations Limit Worksheet
Independent Accountant’s Report
To the Honorable Mayor and City Council Members
City of Aliso Viejo, California
We have performed the procedures enumerated below to the accompanying Appropriations Limit Worksheet of the City of Aliso Viejo, California (the City) for the year ended June 30, 2022. The management of the City is responsible for the accompanying Appropriations Limit Worksheet.
The City has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of meeting the requirements of Section 1.5 of Article XIII-B of the California Constitution. These procedures, which were suggested by the League of California Cities and presented in the publication entitled Agreed-upon Procedures Applied to the Appropriations Limitation Prescribed by Article XIII-B of the California Constitution, were performed solely to assist you in meeting the requirements. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.
The procedures and the associated findings are as follows:
1. We obtained the completed worksheets 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 documents to those that were selected by a recorded vote of the City Council.
Finding: No exceptions were noted as a result of our procedures.
2. For the accompanying Appropriations Limit worksheet, we added last year’s limit to total adjustments and agreed the resulting amount to this year’s limit.
Finding: No exceptions were noted as a result of our procedures. 218
2 3. We agreed the current year information presented in the accompanying Appropriations Limit Worksheet to the other documents referenced in number one above.
Finding: No exceptions were noted as a result of our procedures.
4. We agreed the prior year appropriations limit presented in the accompanying Appropriations Limit Worksheet to the prior year appropriations limit adopted by the City Council during the prior year.
Finding: No exceptions were noted as a result of our procedures.
We were engaged by the City to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation 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 accompanying Appropriations Limit Worksheet for the year ended June 30, 2022. 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.
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 City Council and management of the City of Aliso Viejo, California, and is not intended to be and should not be used by anyone other than these specified parties. However, this report is a matter of public record and its distribution is not limited.
San Bernardino, California
December 15, 2022
219
CITY OF ALISO VIEJO
APPROPRIATIONS LIMIT COMPUTATION
2021 - 2022
2021 – 2022
Per Capita Personal Income Change 5.73
Population Change
County Population Growth (0.84)
CPI Change Converted to a Ratio 1.0573
Population Change Converted to a Ratio 0.9916
Calculation of Growth Factor 1.0484
2020 – 2021 Limit $45,974,884
2021 – 2022 Appropriations Limit
($45,974,884 X 1.0484) $48,200,927
220
735 E. Carnegie Dr. Suite I 00
San Bernardino , CA 92408
909 889 087 1 T
909 889 536 1 F
r amscpa.net
PARTNERS
Teny P Shea. CPA
Scott W Manno. CPA. CGMA
Leena Shanbhag. CPA. MST. CGMA
Br·adferd A. Welebir. CPA. MBA. CGMA
Jenny W Liu. CPA. MST
Brenda L Odle. CPA, MST 1Parrner Emer·irus l
MANAGERS / STAFF
Gar·denya Duran, CPA. CGMA
Br·ianna Schulu. CPA. CGMA
Seong-Hyea Lee. CPA. MBA
Evelyn Mor·entin-Barcena. CPA
Veronrca Hernandez. CPA
Laura Arvizu. CPA
X rnlu Zoe Zhang, CPA MSA
John Maldonado, CPA. MSA
Julia Rodr·iguez Fuentes. CPA. MSA
Demi Hrte. CPA
Jeffrey McKennan, CPA
MEMBERS
Amer-ican I nstrtute of
Cernfied Public Accountants
PCPS The A/CPA A.I/ranee
{o, CPA Ftrms
Governmental Audit
Quality Cente,
Employee Benefit Plan
Aud,r Qual,ry Cente,
Californra Socrety of
Cen:ifred Publrc Accountants
dil5b Proud Member of
qgp AlliottGlobalAlliance™
mm IIIJ
ROGERS, ANDERSON , MALODY & SCOTT, LLP
CERTIFIED PUBLIC ACCOUNTANTS. SINCE 1948
STABILITY. ACCURACY. TRUST.
1 Independent Accountant’s Report
To the Honorable Mayor and Members of the City Council
City of Aliso Viejo, California
We have performed the procedures enumerated below on the Treasurer's Monthly Cash Statement for the month ended June 30, 2022 for compliance with the provisions of the California Government Code and with the City of Aliso Viejo’s (the City) investment policy dated September 1, 2021. The City’s management is responsible for the Treasurer's Monthly Cash Statement for the month ended June 30, 2022.
The City has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of determining whether Treasurer's Monthly Cash Statement for the month ended June 30, 2022 is in compliance with the provisions of the California Government Code and with the City's investment policy dated September 1, 2021. 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, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.
The procedures and the associated findings are as follows:
1. We obtained a copy of the City Treasurer's Report for June 30, 2022 and reconciled individual investments/deposits to
supporting documentation obtained from City staff. We also traced total funds reported on the Treasurer's Report to the City's General Ledger at June 30, 2022.
Finding: No exceptions were noted as a result of our
procedures.
2. We compared the investments listed on the City Treasurer's Report for the month of June 30, 2022 to the type of
investments authorized by the City's Investment Policy and Government Code Section 53601.
Finding: No exceptions were noted as a result of our
procedures.
221
Honorable City Council
City of Aliso Viejo
2 3. We compared the market value of the investments listed on the Treasurer's Report for the month of June 30, 2022 to the City's copies of investment statements.
Finding: No exceptions were noted as a result of our procedures.
4. We read the City Treasurer's Report for the month of June 30, 2022 to ascertain that it contains all the information/data required by Government Code Section 53646 and meets the timing requirements of Government Code Section 53646 as follows:
a. Was submitted within 30 days following the end of the quarter b. Included the type of investment, issuer, date of maturity, par and dollar amount invested on all securities, investments, and monies held by the City c. Included those funds under management of contracted parties (fiscal agents, trustee, deferred compensation, plan administrators, etc.)
d. Included market value (and source) as of the date of the report for all securities held by the City or under management of any outside party that is not also a local agency or the State of California Local Agency Investment Fund e. Stated compliance of the portfolio to the investment policy of the City f. Included a statement addressing the ability of the City to meet the pool's expenditure requirements for the next six months
g. Included the most recent statements from the Local Agency Investment Fund in lieu of the information required by (b) and (d) above, for City investments that have been placed in those pools
Finding: For step 4a, Auditor noted that the Treasurer’s report was approved by Council on the August 17, 2022 meeting. Per review of the City’s website, the meeting of August 3rd was canceled.
5. We compared the investments listed in the City Treasurer's Report for the month of June 30, 2022 to the prohibited investments listed in the City's Investment Policy and Government Code Section 53601.6.
Finding: No exceptions were noted as a result of our procedures.
6. We calculated the totals (cost basis) for the investments listed in the City Treasurer's Report for the month of June 30, 2022 and compared those totals to the limitations imposed by the City's Investment Policy and Government Code Section 53601 for specified investment types.
Finding: No exceptions were noted as a result of our procedures. 222
Honorable City Council
City of Aliso Viejo
3 7. We agreed individual investment maturity dates listed on the City Treasurer's Report for the month of June 30, 2022 to the City's copies of the investment statements, to determine if they conformed to the maturity requirements of the City's Investment Policy and Government Code Section 53601.
Finding: No exceptions were noted as a result of our procedures.
We were engaged by the City to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the Treasurer's Monthly Cash Statement dated June 30, 2022.
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.
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 City Council and management of the City of Aliso Viejo and is not intended to be and should not be used by anyone other than these specified parties.
San Bernardino, California
December 15, 2022
223