Costa Mesa City Council
January 18, 2022

FISCAL YEAR ENDED
JUNE 30, 2021

CITY OF COSTA MESA

CALIFORNIA

ANNUAL COMPREHENSIVE

FINANCIALREPORT

CITY OF COSTA MESA, CALIFORNIA
Annual Comprehensive Financial Report
Year ended June 30, 2021
Prepared by: Finance
Department
www.costamesaca.gov

C
I

TY OF COSTA MESA, CALIFORNIA

Annual
Compr
e
hensive
Financial Report

Year ended June 30, 20
2 1

TABLE

OF

CONTENTS

Page

INTRODUCTORY SECTION:

Letter of Transmittal

i

List of Principal Officials

vi
i

Organizational Chart

vii
i

GFOA Certificate of
Achievement for Excellence in Financial Reporting

ix

FINANCIAL SECTION:

Independent Auditor
’
s Report

1 Management’s Discussion and Analysis (Required Supplementary

Information)

4 Basic Financial Statements:

Government
-
wide
Financial Statements:

Statement of Net Position

1 5

Statement of Activities

1 6

Fund Financial Statements:

Governmental Funds:

Balance Sheet

18 Reconciliation of the Balance Sheet to the Statement of

Net Position

20 Statement of Revenues, Expenditures and Changes in Fund

Balances

21 Reconciliation of the Statement of Revenues, Expenditures

and Changes in Fund Balances to
the Statement of Activities

23 Proprietary Funds:

Statement of Net Position

24 Statement of Revenues, Expenses and Changes in Net Position

25 Statement of Cash Flows

26 Fiduciary Funds:

Statement of
Fiduciary
Net Position

27 Statement of Changes in
Fiduciary
Net Position

28 Notes to the Basic Financial Statements

29 C
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TY OF COSTA MESA, CALIFORNIA

Annual
Compr
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hensive
Financial Report

Year ended June 30, 20
2 1

TABLE OF CONTENTS,
(CONTINUED)

Page

Required Supplementary Information:

Miscellaneous Plan:

Schedule of Changes in the Net Pension Liability and Related Ratios

7 3

Schedule of Contributions

7 5

Police Safety Plan:

Schedule of Changes in the Net
Pension Liability and Related Ratios

7 7

Schedule of Contributions

7 9

Fire Safety Plan:

Schedule of Proportionate Share of the Net Pension Liability

81 Schedule of Contributions

83 Police 1% Supplemental Retirement Plan:

Schedule

of Changes in the Net Pension Liability and Related Ratios

85 Other Post
-
Employment Benefit Plan:

Schedule of Changes in OPEB Liability and Related Ratios

87 Schedule of Revenues, Expenditures and Changes in Fund

Balances
–

Budget and Actual:

General Fund

8 9

Gas Tax Fund

91 Notes to Required Supplementary Information

92 Supplementary Schedules:

Nonmajor Governmental Funds:

Combining Balance Sheet

96 Combining Statement of Revenues, Expenditures and

Changes in Fund Balances

100

Schedule of Revenues, Expenditures and Changes in Fund

Balances
–

Budget and Actual:

Major and Nonmajor

Special Revenue Funds

HOME Program Fund

104

Air Quality Improvement Fund

105

Community Development Fund

106

Supplemental Law Enforcement Services Fund

10 7

Rental Rehabilitation Fund

1 0
8 Narcotics Forfeiture Fund

1 0
9 Local Law Enforcement Block Grant Fund

1 10

Office of Traffic Safety Fund

1 11

Housing Authority Fund

1 12

N
onmajor
C
apital
P
rojects
F
unds:

Capital Improvements

1 13

Measure “M2” Fund

1 14

Parking Districts Fund

1 15

Golf Course

Improvements

Fund

1 1
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Annual
Compr
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hensive
Financial Report

Year ended June 30, 20
2 1

TABLE OF CONTENTS, (CONTINUED)

Page

Park Development

1 17

Drainage Fees Fund

1 18

Traffic Impact Fees Fund

11 9

Fire System Development Fees Fund

1 20

Jack Hammett Sports Complex Fund

1 21

Lions Park
Capital
Improvements

Fund

1 22

Internal Service Funds:

Combining Statement of Net Position

1 24

Combining Statement of Revenues, Expenses and Changes in

Net Position

1 25

Combining Statement of Cash Flows

1 26

STATISTICAL SECTION:

Table

Net Position by
Component
–

Last Ten Fiscal Years

1 1
2 8

Changes in Net Position
–

Last Ten Fiscal Years

2 1
2 9

Fund Balances of Governmental Funds
–

Last Ten Fiscal Years

3 1
30 Changes in Fund Balance of Governmental Funds
–

Last Ten Fiscal Years

4 1
31 Tax
Revenues by Source, Governmental Funds
–

Last Ten Fiscal Years

5 1
32 Taxable Sales by Category
–

Last Ten Calendar Years

6 1
3 3

Principal Sales Tax Remitters by Category
–

Current Year and Nine Years Ago
7 1
3 4

Direct and Overlapping Sales Tax Rates
–

Last Ten Fiscal Years

8 13
5 Property Tax Levies and Collections
–

Last Ten Fiscal Years

9 13
6 Assessed Value and Estimated Actual Value of

Taxable Property
–

Last Ten Fiscal Years

10 13
7 Direct and Overlapping Property Tax Rates
–

Last Ten
Fiscal Years

11 1
3 8

Principal Property Taxpayers
–

Current Year and Nine Years Ago

12 1
3 9

Ratio of General Bonded Debt Outstanding

and Legal Debt Margin
–

Last Ten Fiscal Years

13 1
40 Ratio
s

of Outstanding Debt by Type
-

Last Ten Fiscal Years

14 1
41 Direct and Overlapping Governmental Activities Debt

15 1
42 C
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TY OF COSTA MESA, CALIFORNIA

Annual
Compr
e
hensive
Financial Report

Year ended June 30, 20
2 1

TABLE

OF

CONTENTS,

(CONTINUED)

Table

Page

Demographic and Economic Statistics
–

Last Ten Calendar Years

16 1
4 3

Principal Employers
-

Current Year and Nine Years Ago

17 1
4 4

Operating Indicators by Function/Program
–

Last Ten Fiscal Years

18 1
4 5

Full Time Equivalent City Government Employees by

Function/Program
–

Last Ten Fiscal Years

19 1
4 6

Capital Asset Sta
tistics by Function/Program
–

Last Ten Fiscal Years

20 1
4 7

INTRODUCTORY SECTION

INTRODUCTORY SECTION

FINANCIAL REPORT

ANNUAL COMPREHENSIVE

i

CITY OF COSTA MESA

77 FAIR DRIVE, P.O. BOX 1200, COSTA MESA, CA 92628 -1200

FROM THE OFFICE OF THE FINANCE DIRECTOR —CITY TREASURER

December 17, 2021

Honorable Mayor and Councilmembers:

The Annual Comprehensive Financial Report of the City of Costa Mesa (the City) for the fiscal year ended June 30, 2021, is hereby submitted. These statements have been prepared in conformity with generally accepted accounting principl es (GAAP) and audited in accordance with generally accepted auditing standards by an independent public accounting firm of licensed certified public accountants.

This report consists of management’s representations conc erning finances of the City .

Responsibility for both accuracy of the data, and completeness and fairness of presentation, including all disc losures, rests with management. To provide a reasonable basis for making these representations, management has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse and to compile suffici ent reliable i nformation for preparation of financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City’s comprehensive framework of internal controls has been designed to provide reasonable rather tha n absolute assurance that the financial statements will be free from material misstatement.

Management asserts that to the best of its knowledge and belief, the enclosed data is accurate in all material respects , and reported in a manner designed to pre sent fairly the financial position and results of operations of various funds and component units of the City . All disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been included.

The City’s financial statements for the fiscal year ended June 30, 2021, have been audited by Davis Farr LLP, an independent public accounting firm of licensed certified public accountants.

The goal of the independent audit was to provide reasonable assurance that the financial statements of the City for th e fiscal year ended June 30, 202 1, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and , evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the City’s financial statements for the fiscal year ended June 30, 2021, are fairly presented in conformity with GAAP. The independent auditor’s report is pre sented as the first component in the financial section of this report.

The independent audit of the financial statements of the City was part of a broader, federally mandated “Single Audit” designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government’s internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. These reports are available in the City’s separately issued Single Audit Report.

ii
GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The MD&A can be found immediately following the independent auditor’s report.

PROFILE OF THE GOVERNMENT

The City, incorporated in 1953, has an estimated population of 112,780 and a land area of

16.8 square miles. It is located in the southern coastal area of Orange County, California, and is bordered by the cities of Santa Ana, Newport Beach, Hun tington Beach, Fountain Valley, and Irvine. The City is approximately 35 miles southeast of Los Angeles and 8 5 miles northwest of San Diego. At its nearest point, the City is approximately 1. 5 miles from the Pacific Ocean. The City is also home to the world-renowned Henry and Renee Segerstrom Concert Hall, the Segerstrom Center for the Arts, and the Orange County Fairgrounds.

The City has operated under the council -manager form of government since incorporation.

Policy making and legislative authority are vested in the Mayor and City Council . The City Manager is responsible for implementing policies and ordinances approved by the City Council, overseeing the day-to-day operations of the City, and appointing department heads.

In November 2016, voters approved Measure EE regarding Voting District Formation and six voting districts were formed. Beginning in December 2018, the City Council transitioned from five Council Members to seven Council Members. E ach of the six districts elects one Council Member and the Mayor is elected at -large every two years. Council members are elected to four-year staggered terms.

The City is a “full service city” and provides a wide range of services. These services include:
police and fire protection; emergency medical aid; building safety regulation and inspection; land use planning and zoning; housing and community development; maintenance and improvement of streets and related structures; traffic safety, maintenance, and improvement; homeless street outreach and shelter services; and a full range of recreational and cultural programs. A “full-service city" is defined as a city that is financially responsible for the full set of basic tax -dependent municipal services within its jurisdiction including police, fire, park s and recreation, public works, and land-use planning.

The City maintains budgetary controls, the objective of which is to ensure compliance with legal provisions embodied in the annual budget approved by the City Council. Annual budgets are legally adopted for all governmental funds on a basis consistent with GAAP, except for certain special revenue and debt service fun ds for which annual budgets are not adopted.

Budgetary control for management purposes is maintained as authorized by City Council.

The City Manager submits the budget to the City Council, who adopts it prior to the beginning of the fiscal year. Public hearings are conducted prior to budget adopti on. Supplemental appropriations, when required during the fiscal year, are als o approved by the City Council.

Intra-functional and interfund budgetary amendments are approved by the C ity Manager subject to the total amount authorized by City Council.

ECONOMIC CONDITION

Fiscal year 2020-21 marks a full fiscal year’s economic impact of the unprecedented worldwide pandemic, COVID -19. The pandemic continues to impact the global economy , our public health care system, and capital markets. Americans experienced job losses, rising rents, and increased inflation. The r etail sector and dining industry experienced unparalleled fiscal challenges resulting from the government lockdowns necessary to reduce the transmission of COVID-19 and stabilize the nation’s health care system. iii

Governments utilized multiple financial assistance grants and programs to help stimulate the economy and to fund the increased costs associated with managing the pandemic . Federal and State stimulus monies were sent to Americans and also to businesses through the CARES Act approved by Congress in March 2020 for $2.2 trillion and December 2020 for $900 billion.

A third stimulus package was later approved, the American Rescue Plan Act, enacted in March 2021 for $1.9 trillion. Due to social distancing requirements and restricted indoor and outdoor activities, spending on services such as dining, leisure, travel and personal services was significantly reduced. Americans either saved the financial assistance or purchased g oods.

Online spending surged. Service -related industry workers experienced record job loss es.

When the demand for services restarted, many employees chose not to return to service - related positions.

The shortage of workers and the demand for goods have resulted in a backlog in the supply chain. Globally, many ports are jammed, and cargo ships are significantly delayed in docking to transport cargo to their destinations. As a result, the price of consumer goods continues to increase.

In fiscal year 2020 -21, General Fund revenue, not including transfers, increased by $4.6 million or 3.4 percent. This is primarily due to a strong rebound in the retail sector and online purchases resulting in a sales tax revenue increase of $8.0 million, or 14 percent. Costa Mesa is home to the renowned South Coast P laza, Metro Pointe, and a variety of brick and mortar stores that have offered curbside pickup and social distancing shopping experiences that have assisted in the rebound of sales tax revenues. It is important to note that sales tax revenues in comparison to fiscal year 2018-19, the last full fiscal year prior to the pandemic, was lower by $1.0 million, or 2 percent.

The sales tax increases were partially offset by the losses in the City’s hotel taxes. Transient Occupancy Tax decreased by $2.3 million or 35 percent. Business closures, shelter -in-place orders, and the significant reduction of conventions and conferences led to a continued decline in this revenue stream.

General Fund expenditures decreased by 2.6 percent compared to the pri or year. For fiscal year 2020-21, the General Fund ended with a net operating positive of $17.5 million before other financing uses of $17.5 million, comprised of transfers to the Disaster Services Fund and to the Internal Services Funds for the City’s Capital, Technology, and Equipment Funds .

Net financing uses increased by 150 percent compared to the prior fiscal year due to interfund transfers to the Capital and Information Technology Replacement Funds to ensure compliance with the CAN (Capital Asset Needs), and to the Disaster Fund to cover expenditures incurred during the pandemic . After the net of other financing uses, the General Fund ended with a very slight increase of $30,000 to the fund balance for fiscal year 2020-21.

The City is cautiously expecting a positive outlook for the local economy . The pandemic’s negative impact on the economy , coupled with the multitude of stimulus funding by the Federal government, show a stabilization of sorts. Economic indicators show inflation rates are expected to close calendar year 2021 around 7 percent . In October 2021, the United States wages increased by 9.77 percent over the same month in the previous year. While the City of Costa Mesa is experiencing a slight reduction in its financial situation, the City is well positioned to continue to weather the impacts of the pandemic. The City enjoys a strong , diverse local economy, well-funded emergency reserves, and a solid commitment to continue to deliver top quality services to the community.

iv

MAJOR AND FUTURE DEVELOPMENT INITIATIVES

Major Developments:

Anduril Headquarters (1375 Sunflower Street- former LA Times) – The master plan for the 665,000 square foot office project was approved in August 2017. Construction for rehabilitation of the first two phases of the project is under way. The first phase is near completion and the second phase is expected to be completed by end of 2021. Phase 3, which includes a new 185,000 square foot research and development building will be completed in 2022.

Harbor / Hamilton (2095 Harbor Blvd. and Hamilton Street) – This 1.53-acre site is approved for construction of a detached single -family condominium development. This project will consist of 28 two and three-bedroom, three story, and detached homes including seven units with ground level work space. The model homes and firs t phase are complete d and the remainder of the project is anticipated to be completed this year, or in the beginning of 2022.

Vanguard University (55 Fair Drive) – The university has an approved master plan to replace some of the existing buildings with more modern facilities, provide additional student housing, and replace some surface parking with a parking structure. This amendment reflects long range plans for the university and will take several years to complete. The 42,687 square foot 2-story student center is complete. Construction drawings have been submitted and are being reviewed for perimeter improvements along Fair Drive and Newport Boulevard. Construction drawings for the new 61,006-square-foot gymnasium and events center are anticipated to be submitted in 2022 , and would consist of a multipurpose gymnasium and an athletic facility with additional student facilities.

Halcyon House (former Symphony Apartments located at 595 Anton Blvd.) – The five-story project consisting of 393 luxury apartm ent units and retail shops at the corner of Anton Boulevard and Avenue of the Arts, was approved in 2015. Construction of Building A is nearing completion and the exterior façade is well under way. Building B is currently in the framing stage. The project is anticipated to be completed in 2022.

Newport & Ford (1957 Newport Blvd.) – The 38-unit three-story condominium project was approved by the City Council in October 2018. The first phase is now occupied and the project is anticipated to be completed in 2022.

Orange County Museum of Art (3333 Avenue of the Arts) – The project consists of 53,875 square-foot two -story structure , which will become the new home to the Orange County Museum of Art , on the existing vacant site within the Theater Arts District. Construction is well underway and the project is expected to be completed in 2022.

LUX Apartments (2277 Harbor Boulevard) – The project consists of 200 apartment units (including 9 very low -income units). The project is under construction and is anticip ated to be completed in 2022.

Avenue of the Arts Hotel Expansion (3350 Avenue of the Arts) – The master plan amendment for the project that included a new building design of the approved hotel expansion , was approved in November 2019. The new master plan includes a two-level underground parking structure, a new restaurant and hotel lobby, and six levels of 150 new hotel rooms. Minor changes are being submitted to the design in 2021, with construction commencing in 2022.

The Plant (765 -767 Baker Street a nd 2972 Century Place ) – This project consists of the proposed renovation of three existing commercial buildings (containing the former Car Mart and Plant Stand) totaling 19,100 square feet, for retail and restaurant uses surrounding a central courtyard area. In addition, new buildings are proposed consisting of two greenhouse structures which will contain food stall uses, and a four -story mixed use building with 48 residential units, 14 live/work units, and 2,570 square feet of workshop/maker office space v
above a two-level parking structure containing 170 parking spaces. Additionally, 39 on -site open parking spaces and 34 open parking spaces accessible from Century Place are proposed, for a total of 243 proposed parking spaces. This project was approved by the City Council; submittal of development plans is anticipated in 2021.

Vans Headquarter Expansion (1588 South Coast Drive)- The Vans Building Expansion Project proposes to construct a three-story, 91,032 square foot office building approximately 40-feet north of the existing Vans Headquarter building on the Vans Headquarters Campus (Campus) located at 1588 South Coast Drive, Costa Mesa. The proposed project would also construct a three-story parking structure accommodating 358 parking spaces in the northeast quadrant of the Campus. Ancillary improvements include a small amphitheater/seating area just east of the proposed office building and south of the proposed parking structure, and a half pipe skate ramp, just west of the proposed office building. A project design feature is a n addition of a traffic signal on Hyland Avenue at the Vans north driveway. The project has been entitled, plans approved, and construction is anticipated to be completed in 2022.

Future Development (pending approval):

One Metro West (1683 Sunflower Avenue) – The proposed Project is a mixed-use development and consists of residential, specialty retail, creative office, and recreational uses. The Project is proposed to include up to 1,057 dwelling units (anticipated to be rental units), 25,000 square feet of commercial creative office, 6,000 square feet of specialty retail, and 1.5-acres of public open s pace. All existing buildings, structures, parking areas, drive aisles, and hardscape/landscape improvements are proposed to be demolished. The proposed development includes : three multi -family residential structures with a maximum building height of seven stories; one stand-alone office building up to four stories in height; tenant - serving commercial retail space integrated into one of the residential structures; open space; landscaping; streetscape improvements; and a Class-I bike trail system on Sunflower Avenue providing access to the Santa Ana River Trail. The proposed Project is subject to Measure Y, as codified in Article 22, Chapter IX of Title 13 (Zoning) of the Costa Mesa Municipal Code.

Pursuant to Measure Y, after final approval by the City Council, including all CEQA review, the voters must then approve the Project.

Senior Housing Project at Senior Center (Jamboree Housing ENA) – In 2020, the City Council approved an Exclusive Negotiating Agreement (ENA) to partner with Jamboree Housing Corporation in determining the feasibility, and potential terms, for the right to acquire a long- term leasehold interest in an approximately 0.90-acre portion of the parking lot at the Senior Center property to develop a senior housing project. The conceptual density study plans envision the potential for 60 senior affordable dwelling units (59 plus one manager unit). An application for an Urban Master Plan Screening for the proposed project was submitted in November 2021.

DEBT ADMINISTRATION

The City accounts for general debt service under the following funds in the financial statements: the Public Financing Authority (PFA) Debt Service Fund and the Financing Authority (FA) Debt Service Fund. Sources of revenues for retirement of outstanding bonded indebtedness include general property and sales taxes.

In October 2017, the FA issued the 2017 Lease Revenue Bonds that refinanced the PFA Series 2007 Certificates of Participation (COP ) and provided partial funding for the Lion’s Park , Donald Dungan Library and Neighborhood Community Center project. Standard & Poor’s (S&P) rated the 2017 bonds AA+ upon initial issuance. On November 3, 2020, S&P reaffirmed the 2017 bonds’ AA+ long-term rating with a stable outlook. According to the final report, S&P “reviewed governance risks and consider them better than the sector standard because of the City's very strong management profile with strong financial policies and practices, and successful economic development efforts.”

vii
City of Costa Mesa
List of Principal Officials
June 30, 2021
Mayor
John Stephens
City Council
Andrea Marr
Manuel Chavez
Loren Gameros
Jeff Harlan
Don Harper
Arlis Reynolds
City Manager ------------------------------------- --Lori Ann Farrell Harrison Assistant City Manager----------------------------------------- --Susan Price City Attorney (Contract) ------------------------------- Kimberly Hall Barlow Economic and Development Services Director ------------------- Jennifer Le Finance Director --------------------------------------------------Carol Molina Information Technology Director -----------------------------------Steve Ely Parks and Community Services Director ----------------------- Jason Minter Public Services Director ------------------------------------ Raja Sethuraman Fire Chief -------------------------------------------------------- Dan Stefano Police Chief ----------------------------------------------------- Ron Lawrence

CITY OF COSTA MESA, CALIFORNIA
City of Costa Mesa, California
Organization Chart
Visit our website at www.costamesaca.gov
Citizens of Costa Mesa
City Council
City AttorneyParks, Arts & Community
Services Commission
Council Appointed
Committees
and Commissions
Planning
Commission

0.53"

0.48"

0.02"
Mayor and
Council Members
City Manager
Administration
City Clerk
Human Resources
Risk Management
Contracted
Administration
Engineering Services
Transportation Services
Maintenance Services
Development Services Finance
$
Parks & Community
Services
Administration
Planning
Building Safety
Housing and Community Development
Community Improvement
Administration
Financial Operations
Successor Agency
Information
Technology
Fire Public Services Police
Administration
Operations/EMS
Prevention
Police Administration
Police Field Operations
Police Support Services
Recreation
Animal Services
Homeless Program
viii
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Costa Mesa
California
For its Comprehensive Annual
Financial Report
For the Fiscal Year Ended
June 30, 2020
Executive Director/CEO
ix

FINANCIAL REPORT

ANNUAL COMPREHENSIVE
INDEPENDENT AUDITOR’S
REPORT
INDEPENDENT AUDITOR’S REPORT

INDEPENDENT AUDITOR’S REPORT
The Honorable Mayor and
Members of the City Council
of the City of Costa Mesa
Costa Mesa, California
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Costa Mesa (the City), as of and for the year ended June 30, 2021 and the related notes to the basic financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes 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.

Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America, and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the City’s preparation and fair presentation of the financial statements 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, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
1 Opinions
In our opinion, the financial statements referred to above 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 of Costa Mesa, as of June 30, 2021, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter
As described further in note 20 to the financial statements, during the year ended June 30, 2021, the City implemented Governmental Accounting Standards Board (GASB) Statement No. 84 resulting in a prior period adjustment. Our opinion is not modified with respect to this matter.

Report on Summarized Comparative Information
We have previously audited the City of Costa Mesa’s 2020 financial statement s, and we expressed an unmodified opinion on those audited financial statements in our report dated, December 21, 2020. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2020 is consistent, in all material respects, with the audited financial statements from which it has been derived.

Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the pension and OPEB schedules, and the budgetary comparison schedules identified as Required Supplementary Information (RSI) in the accompanying table of contents, be presented to supplement the basic financial statements.

Such information, although not a part of the basic financial statements, is required by the GASB, 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 RSI in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during the audit of the basic financial statements. We do not express an opinion or provide any assurance on the RSI because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other 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 introductory section, combining and individual fund financial statements and schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements.
2 The combining and individual nonmajor fund financial statements and schedules are 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 section is fairly stated in all material respects in relation to the basic financial statements as a whole.

The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated December 17, 2021, 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 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.

Irvine, California
December 17, 2021
3 FINANCIAL REPORT

ANNUAL COMPREHENSIVE
MANAGEMENT’S DISCUSSION

AND ANALYSIS
MANAGEMENT’S DISCUSSION AND ANALYSIS

MANAGEMENT’S DISCUSSION AND ANALYSIS
As management of the City of Costa Mesa (City), we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities for the fiscal year ended June 30, 2021. We encourage all readers to consider information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages i–vi of this report.

FINANCIAL HIGHLIGHTS
 Assets and deferred outflows of resources of the City’s primary government exceeded its liabilities and deferred inflows of resources at the close of fiscal year 2021 by $37.1 million (net position). Of this amount, $243.9 million (unrestricted net position deficit) primarily resulted from implementations of Governmental Accounting Standards Board (GASB) Statement Nos. 68, 71 and 73 for pensions, and GASB Statement No. 75 for Postemployment Benefit Other than Pensions (OPEB). These statements established standards for measuring and recognizing liabilities for defined benefit plans.
 In the government-wide financial statements, total net position increased by $15.3 million from the prior fiscal year total of $21.8 million primarily due to an increase federal funding from the CARES Act and American Rescue Plan Act (ARPA). This increase was offset by a decrease in charges for services and an increase in expendituresdue to the ongoing COVID-19 pandemic.  In the fund financial statements, the governmental funds reported a combined ending fund balance of $109.4 million, an increase of $7.1 million in comparison with the prior year total of $102.3 million.
 At the end of fiscal year 2021, the General Fund’s unassigned fund balance was $17.4 million or 14.1 percent of general fund expenditures of $123.5 million. Unassigned fund balance may be used to meet the government’s ongoing obligations.
 At June 30, 2021, the City reported $314.7 million in pension liabilities and $62.9 million in OPEB liabilities.

OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the basic financial statements which are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the basic financial statements. This report also contains other required supplementary information in addition to the basic financial statements themselves.

Government-Wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private-sector business.

The statement of net position presents information on all assets, deferred outflows of resources, liabilities, and deferred inflows of resources, with difference between assets/deferred outflows of resources and liabilities/deferred inflows of resources reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.

The statement of activities presents information to show how the government’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. 4 Thus, revenues and expenses are reported in this statement for some items that will result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).

Both government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). Governmental activities include general government, protection of persons and property, community programs, public services, and interest on long-term debt. The City has no business-type activities or discretely presented component units.

The basic government-wide financial statements can be found on pages 15-16 of this report.

Fund Financial Statements
A fund is a grouping of related accounts used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the City’s funds can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.

Governmental Funds
Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near- term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental funds balance sheet and statement of revenues, expenditures, and changes in fund balances provide reconciliations to facilitate this comparison between governmental funds and governmental activities.

The City maintains 26 individual governmental funds. Information is presented separately in the governmental funds balance sheet and statement of revenues, expenditures, and changes in fund balances for the General, Capital Improvements and Gas Tax funds, all of which are considered to be major funds. Data from the other 23 governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report.

The City adopts an annual operating and capital budget for its General, Special Revenue, and Capital Projects funds. Budgetary comparison statements have been provided for these fund types to demonstrate compliance with the budget.

The basic governmental fund financial statements can be found on pages 18-23 of this report. 5 Proprietary Funds
The City maintains one type of proprietary fund, internal service funds. Internal service funds are an accounting device used to accumulate and allocate costs internally among various City functions.

The City uses internal service funds to account for equipment replacement, self-insurance (workers’ compensation, general liability, unemployment), and information technology replacement functions. Because there are no business-type functions, they have been included within governmental activities in the government-wide financial statements.

Proprietary funds provide the same type of information as government-wide financial statements, only in more detail. Proprietary fund financial statements provide separate information for the Equipment Replacement, Self-Insurance, and Information Technology Replacement funds, all of which are considered to be nonmajor funds. The internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for each nonmajor internal service funds is provided in the form of combining statements in the supplementary schedules section of this report.

The basic proprietary fund financial statements can be found on pages 24-26 of this report.

Fiduciary Funds
Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because resources of these funds are not available to support the City’s own programs and services. The accounting method used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements can be found on page 27-28 of this report.

Notes to the Basic Financial Statements
The notes provide additional information that is essential to a full understanding of data provided in the government-wide and fund financial statements. The notes to the basic financial statements can be found on pages 29-72 of this report.

Other Information
In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City. Required supplementary information can be found on pages 73-92 of this report.

The combining statements referred to earlier in connection with nonmajor governmental funds and internal service funds are presented immediately following the required supplementary information section. Combined and individual fund statements and schedules can be found on pages 96-126 of this report.

GOVERNMENT-WIDE FINANCIAL ANALYSIS
City assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $37.1 million at June 30, 2021, an increase of $15.3 million from 2020.

As in previous years, the City’s net position continued to reflect the impact from implementations of GASB Statements No. 68, 71 and 73 for pension and GASB 75 for OPEB, all of which account for the City’s defined benefit liabilities. The City’s total defined benefit liability is estimated at $377.6 million on the Statement of Net Position, an increase of $14.0 million as compared to the prior year. 6 Another significant portion of the City’s total net position reflects its investment in capital assets (e.g., land, buildings, machinery, and equipment), less related outstanding debt used to acquire assets that are still in service. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, it should be noted that resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

At the end of fiscal year 2020-21, the City continued to report positive balances in two out of three categories of net position for the government as a whole, as well as for its separate governmental activities. The unrestricted net position improved by $7.5 million, ending the fiscal year with a balance of $243.9 million primarily due to implementations of pension and OPEB accounting standards.

Percent
Increase/ Increase/
June 30, 2021 June 30, 2020 (Decrease) (Decrease)
ASSETS:

Current and other assets $155,763,694 $139, 065,874 $ 16,697,820 12.01% 282,879,937 277,554,449 5,325,488 1.92%
Total assets 438,643,631 416,620,323 22,023,308 5.29% Deferred outflows of resources 52,911,235 47,770,801 5,140,434 10.76% LIABILITIES:

Current and other liabilities 15,215,718 16,028,238 (812,520) -5.07% Long-term liabilities 430,748,965 414,825,401 15,923,564 3.84% Total liabilities 445,964,683 430,853,639 15,111,044 3.51% Deferred inflows of resources 8,529,449 11,771,635 (3,242,186) -27.54% NET POSITION:

Net investment in capital
assets 255,443,158 248,815,081 6,628,077 2.66% Restricted 25,552,401 24,367,869 1,184,532 4.86% Unrestricted (243,934,825) (251,417,100) 7,482,275 -2.98% Total net position $ 37,060,734 $21,765,850 $ 15,294,884 70.27%

CONDENSED STATEMENT OF NET POSITION
Capital assets, net of
accumulated depreciation
7 During the fiscal year 2020-21, the City’s total net position increased by $15.3 million. 2021 2020
REVENUES:

Program Revenues:

Charges for services 17,113,465$ 19,374,347$
Operating contributions and grants 32,519,129 10,576,719 Capital contributions and grants 8,267,623 6,251,484 General Revenues:

Taxes:

Property taxes 47,891,698 45,548,585
Sales and use taxes 63,738,411 55,866,831
Transient occupancy tax 4,282,802 6,587,224 Franchise taxes 4,895,574 4,822,964
Business tax 1,227,843 1,663,100
Other intergovernmental, unrestricted 84,182 91,674 Investment income (80,831) 4,075,623
Miscellaneous 1,420,418 1,638,221
Total revenues 181,360,314 156,496,772
EXPENSES:

General Government 36,763,868 32,124,703
Protection of persons and property 88,643,852 96,625,585 Community programs 22,007,275 17,285,898
Public services 17,663,842 16,269,612
Interest on long-term debt 986,593 1,083,190 Total expenses 166,065,430 163,388,988
Change in net position 15,294,884 (6,892,216) NET POSITION, BEGINNING OF YEAR 21,765,850 28,658,066 NET POSITION, END OF YEAR $ 37,060,734 $21,765,850

CHANGES IN NET POSITION
Governmental Activities
8 Governmental Activities
Governmental activities increased the City’s net position by $15.3 million. The Coronavirus (COVID- 19) pandemic that started at the beginning of 2020 forced government agencies worldwide to issue business closure and shelter-at-home orders to protect life and safety. In fiscal year 2020-21, the City continued to implement multi-pronged operating cost reduction measures. These measures along with re-opening of businesses, lifting of the shelter-at-home order and Federal funding, contributed to the increase of the net position. Key factors in the City’s net position included:
 Sales tax increased by $7.9 million or 14.1 percent. Costa Mesa is primarily based on retail commercial business, sales tax from which is the City’s large st revenue source. The lifting of the State’s shelter-in-place order, resulting from COVID-19, has given citizens an opportunity to consume again, positively affecting sales tax revenue.  Operating contributions and grants increased $21.9 million or 207.5 percent primarily due to one-time federal stimulus funding; CARES Act and American Rescue Plan Act.  Transient occupancy tax decreased by $2.3 million or 35.0 percent due to the continuing decline in tourism, travel, conferences, and conventions directly correlated to the ongoing worldwide pandemic.
 Investment income decreased by $4.2 million or 102.0 percent. Due to the continuing global COVID-19 pandemic throughout fiscal year 2020-21, the economy was negatively impacted resulting in a decrease in the market.
 Overall expenses increased by $2.7 million or 1.6 percent from fiscal year 2019-20 as the City continued to implement safety measures against COVID-19 while reopening its doors for public service.

FINANCIAL ANALYSIS OF THE GOVERNMENT’S FUNDS
As was noted earlier, the City uses fund accounting to ensure and demonstrate compliance with professional standards promulgated by oversight agencies and also due to finance-related legal requirements.

Governmental Funds
The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing financing requirements. I n particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year.

As of the end of fiscal year 2020-21, the City’s governmental funds reported combined ending fund balance of $109.4 million, an increase of $7.1 million in comparison with the prior fiscal year fund balance of $102.3 million. Of this total amount:
 $0.9 million represents nonspendable fund balance which includes amounts that cannot be used because they are either not spendable in form or legally or contractually required to remain intact.
 $27.0 million represents restricted fund balance which includes amounts that can be spent only for specific purposes stipulated by external sources or through enabling legislation. 9  $25.1 million represents committed fund balance which includes amounts that can be used only for specific purposes determined by a formal action of the City Council. It includes legislation (City Council action) that can only be overturned by a subsequent council action requiring a voting consensus.
 $39.4 million represents assigned fund balance which includes amounts that are designated or expressed by the City Council for certain purposes but do not require formal actions like resolutions or ordinances. City Council, via resolution, delegated the authority to establish, modify, or rescind a fund balance assignment to the Finance Director.  The remaining $17 million constitutes unassigned fund balance.

The General Fund is the primary operating fund of the City. At the end of fiscal year 2020-21, the General Fund’s fund balance increased by $28,593. While the total fund balance amounted to $53.5 million, the unassigned fund balance was $ 17 million. As discussed in previous section s, the worldwide COVID pandemic continues to significantly impact key revenues and expenditures:
 Sales tax revenues increased by $8.0 million or 14.3 percent from fiscal year 2019-20. This increase is due to consumer online spending in addition to storefronts offering contact less curbside pickup and social distancing while shopping in store.  Transient occupancy tax decreased by $2 .3 million or 35.0 percent due to a reduction of convention conferences, business closures and shelter-in-place orders.  Property tax increased by $2.3 million or 5.0 percent.  Overall, total revenues in the General Fund increased by $4.6 million or 3.4 percent.  Community programs and public service s expenditures decreased by $ 1.6 million, in total, as the City implemented cost reduction measures in response to revenue losses from COVID.  Overall, total expenditures in the General Fund decreased by $3.2 million or 2.6 percent.

Major Funds Other Than the General Fund
The Capital Improvements Fund had $17.2 million in fund balance at the end of the fisca l year which represents a net increase of $5.7 million or 49.6 percent from the prior fiscal year. The increase in fund balance is mainly attributed to Transfers in for various capital improvement projects as well as the true up of 5% per the City’s Capital Asset Needs Ordinance requirement.

The Gas Tax Fund had $13.6 million in fund balance at the end of the fiscal year which represents a net increase of $ 1.8 million or 15.1 percent from the prior fiscal year. The increase is mainly attributed to fewer expenditures in capital projects due to the ongoing COVID-19 pandemic.

Proprietary Funds
The City’s proprietary funds provide the same type of information found in the government -wide financial statements, but in more detail. The City also utilizes Internal Service Funds, which are a propriety fund type.

The unrestricted net position of the Internal Service Funds at the end of the year was $10.4 million.

Total net position in creased by $6.8 million from the prior fiscal year . This was primarily due to increases in Transfer In for various equipment and fleet purchases, and for pending litigations. 10 GENERAL FUND BUDGETARY HIGHLIGHTS
During fiscal year 2020-21 the actual revenues were $295,510 or 0.2 percent higher, than the final adjusted budget. The actuals were higher than the final adjusted budget due to a one -time rebate from Southern California Edison, as a result from changing all the City street lights to LED. This is seen in advances/repayment. There was a decrease in charges for services due to the pandemic that caused cancellations of activities that normally take place. There was also a slight decrease in franchise tax monies.

Actual expenditures were $4.3 million or 3.4 percent lower than originally estimated and final adjusted budget. The variance was due to the defunding of full-time vacant positions citywide, the reduction of certain non-essential services, the closure of City parks, the establishment of a five percent employee furlough, the partial waiver of the Capital Asset Needs Ordinance (CAN), and the prepayment of the annual CalPERS contribution obligations.

CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
The City’s investment in capital assets for its governmental activities (the City has no business- type activities or discretely presented component units) as of June 30, 2021, amounted to $282.9 million net of accumulated depreciation and amortization. The investment in capital assets includes land, building improvements and structures, landscaping and sprinklers, machinery and equipment, intangible assets, park system and facilities, and road and storm drain infrastructure. The City’s investment in capital assets for the current fiscal year increased by $5.3 million. Major infrastructure asset additions during fiscal year 2020-21 were citywide street rehabilitation for Zones 6 and 7, Fairview Traffic Signal Synchronization, and other ongoing capital projects. Other assets capitalized included vehicle replacements and a variety of equipment purchases. During the fiscal year, capital assets not being depreciated decreased by $8.5 million and capital assets being depreciated increased by $21.3 million.
2021 2020
Land $ 34,579,306 $ 34,579,306
Land rights related to streets 29,821,224 29,821,224 Construction in progress 8,437,088 16,985,950 Building impr ovements and structures 75,902,623 59,748,311 Machinery and equipment 12,037,596 12,920,546 Intangibles 466,741 587,320
Park system and facilities 7,399,467 6,616,992 Infrastructure- roads 99,900,537 100,823,445 Infrastructure- storm drains 14,335,355 15,471,355 TOTALS $282,879,937 $277,554,449
Governmental Activities

CAPITAL ASSETS
(NET OF DEPRECIATION)
11 Construction in progress as of June 30, 2021 totaled $8.4 million and included some of the following projects with significant commitment balances:

Additional information on capital assets can be found in note 6 on pages 48-49 of this report.

Long-Term Debt
At year-end, the City had two outstanding bond issues: the Public Financing Authority 2006 Revenue Refunding Bonds with an outstanding balance of $210,000 and the Financing Authority 2017 Lease Revenue Bonds with an outstanding balance of $24.9 million. Additionally, the City had $25 million in other outstanding liabilities related to loans, claims and employee benefits.

Long-term liabilities had a net increase of $3.5 million, primarily due to an increase in notes payable for the financing of the Pierce Arrow XT Firetruck and the City’s outstanding liability claims.

Additional information on the City’s long-term debt can be found in notes 7 through 8 on pages 49- 52 of this report.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES
During fiscal year 2020-21, the local economy continues to face the financial hardships arising from the COVID-19 pandemic. The City took a multi-faceted approach for addressing the estimated deficit by reducing spending across City Departments and implementing five percent employee furloughs, which were subsequently funded through ARPA monies. With the funding from the CARES Act and Federal American Rescue Plan Act, the City was able to sustain core services until revenues return to pre-pandemic levels. The City of Costa Mesa is experiencing a slight increase in its financial situation, attesting that the City is well positioned to continue to weather the fiscal impacts of the pandemic. For fiscal year 2021-22 the City is carefully restoring staffing and service levels cut at the height of the pandemic, while continuing to utilize federal stimulus funds.

CONSTRUCTION PROJECT
TOTAL
BUDGET

SPEND TO
DATE

REMAINING

COMMITMENT
Land Management System 2,054,941$ 695,206$ 1,359,735$ ERP system for Human Resource, Finance and Payroll 1,028,318 55,625 972,693 Fairview Road Improvement 405/Adams 1,178,820 2,670 1,176,150 SB Newport Blvd Improvements Mesa Victoria 1,908,337 2,431 1,905,906 Newport NB 22th Bristol SB Bristol Mesa 2,134,145 2,360 2,131,785 Citywide Street Maintenance 7,409,627 5,286,818 2,122,809 Jack Hammett Field Upgrade 1,706,071 8,796 1,697,275 TOTALS 17,420,259$ 6,053,906$ 11,366,353$

CONSTRUCTION COMMITMENTS
2021 2020
Bonds Payable 28,200,046$ 30,222,813$
Other Liabilities 24,960,460 21,019,797
TOTALS 53,160,506$ 51,242,610$

OUTSTANDING DEBT
Governmental Activities
12 REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the City’s finances for all who have an interest in the government’s funding streams and overall fiscal conditions. This report and other financial related information can be found on the City’s website www.costamesaca.gov. Questions concerning any information provided in this report or requests for additional financial information should contact:
 by mail: Finance Department, City of Costa Mesa, P.O. Box 1200, Costa Mesa, California, 92628-1200
 by e-mail: [email protected]
 by phone: (714) 754-5243
13 FINANCIAL REPORT

ANNUAL COMPREHENSIVE

GOVERNMENT-WIDE

FINANCIAL STATEMENTS

GOVERNMENT-WIDE FINANCIAL STATEMENTS

GOVERNMENT-WIDE FINANCIAL STATEMENTS
The Statement of Net Position and the Statement of Activities report information about the City as a whole and its activities. These statements include all assets, deferred outflows of resources, liabilities, deferred inflows of resources, and net position using the accrual basis of accounting, which is similar to accounting used by most private-sector companies. All current year revenues and expenses are taken into account regardless of when cash is received or paid.

Statement of Net Position
The Statement of Net Position presents information on all of the City’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources, with the difference between assets/deferred outflows and liabilities/deferred inflows reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.

Statement of Activities
The Statement of Activities presents information to show how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). 14 Governmental Activities
2021 2020
Assets:

Cash and investments (note 2) 127,921,427$ 119,401,427$ Cash and investments with fiscal agent (note 2) 978,262 2,011,305 Due from other governments 20,450,671 13,093,504
Accounts receivable 2,351,222 2,284,298
Interest receivable 312,024 529,414
Loans receivable, net (note 5) 650,674 862,534 Rent receivable 346,702 425,221
Inventories 202,311 164,782
Prepaid items 2,550,401 293,389
Capital assets (note 6):

Nondepreciable 72,837,618 81,386,480
Depreciable, net of accumulated depreciation 210,042,319 196,167,969 Total assets 438,643,631 416,620,323
Deferred outflows of resources:

Deferred outflows related to pensions (note 10) 41,380,794 41,239,600 Deferred outflows related to OPEB (note 13) 11,530,441 6,531,201 Total deferred outflows of resources 52,911,235 47,770,801 Liabilities:

Accounts payable 7,898,300 7,432,608
Accrued liabilities 3,876,294 3,080,801
Accrued interest payable 280,975 301,975
Retentions payable 474,229 1,734,890
Deposits payable 2,381,365 644,495
Unearned revenue 304,555 2,833,469
Long-term liabilities:

Portion due within one year (note 8) 9,234,500 7,666,000 Portion due beyond one year (note 8) 43,926,006 43,576,610 OPEB liability (note 13) 62,882,272 58,917,480
Police retirement 1% supplemental liability (note 11) 2,274,765 2,364,522 Net pension liability (note 10) 312,431,422 302,300,789 Total liabilities 445,964,683 430,853,639
Deferred inflows of resources:

Deferred inflows related to pensions (note 10) 5,792,266 11,548,022 Deferred inflows related to OPEB (note 13) 2,737,183 223,613 Total deferred inflows of resources 8,529,449 11,771,635 Net position:

Net investment in capital assets 255,443,158 248,815,081 Restricted for:

Protection of persons and property 1,329,350 1,628,892 Community programs 6,176,036 5,687,227
Public services 18,047,015 17,051,750
Unrestricted (243,934,825) (251,417,100)
Total net position 37,060,734$ 21,765,850$

CITY OF COSTA MESA, CALIFORNIA
Statement of Net Position
June 30, 2021
(With Comparative Data for Prior Year)
See notes to financial statements
15 Program Revenue
Operating Capital
Charges for Contributions Contributions
Functions/programs Expenses Services and Grants and Grants 2021 2020 Governmental activities:

General government 36,763,868$ -$ 15,493,343$ -$ (21,270,525)$ (30,941,207)$ Protection of persons
and property 88,643,852 5,497,350 6,770,524 - (76,375,978) (86,288,667) Community programs 22,007,275 5,243,843 4,670,623 186,238 (11,906,571) (10,513,178) Public services 17,663,842 6,372,272 5,584,639 8,081,385 2,374,454 1,639,804 Interest on long-term debt 986,593 - - - (986,593) (1,083,190) Total governmental activities 166,065,430$ 17,113,465$ 32,519,129$ 8,267,623$ (108,165,213) (127,186,438) General revenues:

Taxes:

Property taxes 47,891,698 45,548,585
Sales and use taxes 63,738,411 55,866,831
Transient occupancy tax 4,282,802 6,587,224
Franchise taxes 4,895,574 4,822,964
Business tax 1,227,843 1,663,100
Other intergovernmental, unrestricted 84,182 91,674 Investment income (loss) (80,831) 4,075,623
Miscellaneous 1,420,418 1,638,221
Total general revenues 123,460,097 120,294,222
Change in net position 15,294,884 (6,892,216)
Net position - beginning of year 21,765,850 28,658,066 Net position - end of year 37,060,734$ 21,765,850$
Changes in Net Position
Revenue and
Net (Expense)

CITY OF COSTA MESA, CALIFORNIA
Statement of Activities
Year ended June 30, 2021
(With Comparative Data for Prior Year)
See notes to financial statements
16 FINANCIAL REPORT

ANNUAL COMPREHENSIVE

FUND FINANCIAL

STATEMENTS

FUND FINANCIAL STATEMENTS

GOVERNMENTAL FUNDS
Major Governmental Funds

GENERAL FUND
The General Fund must be classified as a major fund in the accompanying fund financial statements and is used to account for all general revenues of the City not specifically levied or collected for some special purpose, and for expenditures related to the rendering of general services by the City. The General Fund is used to account for all resources not required to be accounted for in another fund.

SPECIAL REVENUE FUNDS
Gas Tax Fund
Established to account for the receipt and disbursement of funds required to be used for construction and maintenance of the City’s road network system. Financing is provided by the City’s share of State gasoline taxes, including allocations from the Highway Users Tax Account (HUTA) and the Road Maintenance and Rehabilitation Account (RMRA).

CAPITAL PROJECTS FUNDS

Capital Improvements Fund
Established to account for the construction of capital facilities financed by the City’s General Fund and various governmental grants.

Nonmajor Governmental Funds

Nonmajor governmental funds constitute all other governmental funds which include twelve Special Revenue Funds, two Debt Service Funds and nine Capital Projects Funds.

17 Special Revenue Capital Projects
Capital
General Gas Tax Improvements
Cash and investments 43,565,140$ 13,874,809$ 17,201,815$ Cash and investments with fiscal agents - - - Due from other governments 16,060,992 387,749 764,471 Accounts receivable, net 2,217,497 - - Interest receivable 171,700 26,645 22,261 Loans receivable, net - - - Rent receivable 346,702 - -
Due from other funds (note 3) 590,847 - - Inventories 70,717 - -
Prepaid items 894,129 - -
Total assets 63,917,724$ 14,289,203$ 17,988,547$
Accounts payable 3,604,333$ 619,547$ 535,508$
Accrued liabilities 3,791,548 16,424 30 Retentions payable - 66,288 55,156 Deposits payable 2,339,773 - -
Due to other funds (note 3) - - - Unearned revenue 28,404 - -
Total liabilities 9,764,058 702,259 590,694 Unavailable revenue 661,405 33,678 210,674 Non-spendable:

Prepaid items 894,129 - -
Inventories 70,717 - -
Restricted:

Pension and OPEB 1,778,220 - -
Protection of persons and property - - - Community programs - - -
Public services - 13,553,266 -
Debt service - - -
Committed 25,125,000 - -
Assigned 8,195,429 - 17,187,179
Unassigned 17,428,766 - -
Total fund balances 53,492,261 13,553,266 17,187,179 Total liabilities, deferred inflows of
resources, and fund balances 63,917,724$ 14,289,203$ 17,988,547$

CITY OF COSTA MESA, CALIFORNIA
Balance Sheet
Governmental Funds
June 30, 2021
(With Comparative Data for Prior Year)
Liabilities:

Deferred inflows of resources:

Fund balances (note 9):

Assets:

See notes to financial statements
18 Nonmajor
Governmental
Funds 2021 2020
25,116,579$ 99,758,343$ 99,766,839$
978,262 978,262 2,011,305
3,237,459 20,450,671 13,093,504
133,725 2,351,222 2,278,271
48,983 269,589 454,533
650,674 650,674 862,534
- 346,702 425,221
- 590,847 2,966,367
- 70,717 68,800
- 894,129 293,389
30,165,682$ 126,361,156$ 122,220,763$
2,490,732$ 7,250,120$ 6,879,879$
36,875 3,844,877 3,068,226
352,785 474,229 1,734,890
41,592 2,381,365 644,495
590,847 590,847 2,966,367
276,151 304,555 2,833,469
3,788,982 14,845,993 18,127,326
1,194,548 2,100,305 1,791,323
- 894,129 293,389
- 70,717 68,800
- 1,778,220 -
1,329,138 1,329,138 1,510,346
5,655,880 5,655,880 5,636,628
4,098,695 17,651,961 17,763,641
563,401 563,401 765,715
- 25,125,000 25,125,000
13,986,106 39,368,714 34,625,698
(451,068) 16,977,698 16,512,897
25,182,152 109,414,858 102,302,114
30,165,682$ 126,361,156$ 122,220,763$
Totals
See notes to financial statements
19 Fund balances of governmental funds 109,414,858$
Amounts reported for governmental activities in the Statement of Net Position are different because:

Capital Related Items
When capital assets (property, plant, equipment) for governmental activities are purchased or constructed, the cost of those assets are reported as expenditures in the governmental funds. However, the Statement of Net Position includes those capital assets among the assets of the City as a whole:

Cost of capital assets 643,937,768
Accumulated depreciation/amortization (368,472,038)
Long-Term Debt Transactions
Long-term liabilities applicable to the City's governmental activities are not due and payable in the current period and, accordingly, are not reported as fund liabilities. All liabilities (both current and long-term) are reported in the Statement of Net Position:

Bonds payable (22,685,516)
Premium on bonds (3,140,046)
Claims payable (2,374,484)
Loans payable (112,870)
Employee benefits leave payable (5,920,664)
Accrued Interest
Accrued liabilities in the Statement of Net Position differ from the amount reported in governmental funds are due to accrued interest on outstanding debt payable. (280,975) Internal Service Funds
Internal Service Funds are used by management to charge the costs of certain activities to individual City funds. The assets and liabilities of the Internal Service Funds are included in governmental activities in the Statement of Net Position because they primarily service governmental activities of the City. 17,801,069 Deferred Inflows of Resources
Certain unavailable revenues that do not provide current financial resources are reported as deferred inflows of resources in the funds. 2,100,305 Pension and OPEB
Amounts regarding the pension plans and OPEB are as follows:

Deferred outflows of resources related to pensions 41,380,794 Deferred outflows of resources related to OPEB 11,530,441 Deferred inflows of resources related to pensions (5,792,266) Deferred inflows of resources related to OPEB (2,737,183) CalPERS pension liability (312,431,422)
OPEB liability (62,882,272)
Police 1% supplemental retirement liability (2,274,765) Net position of governmental activities 37,060,734$

CITY OF COSTA MESA, CALIFORNIA
Governmental Funds
Reconciliation of the Balance Sheet to the Statement of Net Position June 30, 2021
See notes to financial statements
20 Capital Projects
Capital
General Gas Tax Improvements
Revenues:

Taxes 121,743,217$ -$ -$
Licenses and permits 4,368,740 - - Charges for services 4,897,671 - - Fines and forfeitures 1,055,886 - - Intergovernmental 4,097,821 4,640,209 5,048,416 Investment income (loss) (67,681) (11,307) (1,744) Rental income 4,112,442 - -
Miscellaneous 859,000 71,583 283,801 Total revenues 141,067,096 4,700,485 5,330,473 Expenditures:

Current:

General government 29,109,247 - - Protection of persons and property 79,892,925 - 157,318 Community programs 7,641,580 - 14,242 Public services 6,873,941 2,925,039 7,247,016 Debt service:

Principal 15,391 - -
Interest and fiscal charges - - - Total expenditures 123,533,084 2,925,039 7,418,576 Excess (deficiency) of revenues
over (under) expenditures 17,534,012 1,775,446 (2,088,103) Other financing sources (uses):

Transfer in (note 4) 9,173,146 - 7,787,926 Transfer out (note 4) (26,678,565) - - Total other financing sources (uses) (17,505,419) - 7,787,926 Net change in fund balances 28,593 1,775,446 5,699,823 Fund balances at beginning of year 53,463,668 11,777,820 11,487,356 Fund balances at end of year 53,492,261$ 13,553,266$ 17,187,179$ Special Revenue

CITY OF COSTA MESA, CALIFORNIA
Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances Year ended June 30, 2021
(With Comparative Data for Prior Year)
See notes to financial statements
21 Nonmajor
Governmental
Funds 2021 2020
395,371$ 122,138,588$ 114,463,599$
- 4,368,740 5,496,049
2,412,201 7,309,872 9,489,827
5,460 1,061,346 2,067,884
26,069,188 39,855,634 15,006,292
43,716 (37,016) 3,394,398
661,220 4,773,662 3,566,255
196,612 1,410,996 2,161,633
29,783,768 180,881,822 155,645,937
2,742,385 31,851,632 30,808,182
3,977,405 84,027,648 82,939,180
10,922,489 18,578,311 14,297,137
9,987,546 27,033,542 20,506,675
1,875,000 1,890,391 1,815,392
1,155,360 1,155,360 1,230,958
30,660,185 164,536,884 151,597,524
(876,417) 16,344,938 4,048,413
9,658,445 26,619,517 10,811,227
(9,173,146) (35,851,711) (11,936,227)
485,299 (9,232,194) (1,125,000)
(391,118) 7,112,744 2,923,413
25,573,270 102,302,114 99,378,701
25,182,152$ 109,414,858$ 102,302,114$
Totals
See notes to financial statements
22 Net changes in fund balances - total governmental funds 7,112,744$ Amounts reported for governmental activities in the Statement of Activities are different because:

Capital Related Items
When capital assets for governmental activities are purchased or constructed, the resources expended for those assets are reported as expenditures in governmental funds. However, in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. As a result, fund balance decreases by the amount of financial resources used, whereas net position decreases by the amount of depreciation expense charged for the year.

Capital outlay 19,312,819
Depreciation expense (13,466,970)
Other capital asset related items (333,539)
Long-Term Debt Transactions
Some 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. Repayment of debt service is reported as an expenditure in governmental funds and, thus, has the effect of reducing fund balances because current financial resources have been used. For the City as a whole, however, the principal payments reduce the liabilities in the Statement of Net Position and do not result in an expense in the Statement of Activities.

Net changes in employee benefits leave payable (884,124) Principal payments - bonds 1,875,000
Principal payments - loans payable 15,391
Amortization of bond premium 147,767
Pension and OPEB
Pension and OPEB expense reported in the governmental funds include the actual contributions. In the Statement of Activities, pension and OPEB expenses include the change in net pension and opeb liabilities and the related changes in pension and OPEB amounts for deferred outflows of resources and deferred inflows of resources. of resources and deferred inflows of resources.

Net change in pension liability (4,143,926)
Net change in OPEB liability (1,479,122)
Accrued Interest
Recording of the current year change of accrued interest on outstanding debt payable. 21,000 Internal Service Funds
Internal Service Funds are used by management to charge the costs of certain activities to individual City funds. The adjustments for Internal Service Funds "close" those funds by charging additional amounts to participating governmental activities to completely cover the Internal Service Funds' costs for the year. 6,808,862 Deferred Inflows of Resources
Certain unavailable revenues that do not provide current financial resources are reported as deferred inflows of resources in the funds. 308,982 Change in net position of governmental activities 15,294,884$

CITY OF COSTA MESA, CALIFORNIA
Governmental Funds
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities Year ended June 30, 2021
See notes to financial statements
23 2021 2020
Assets:

Current assets:

Cash and investments 28,163,084$ 19,634,588$
Accounts receivable - 6,027
Interest receivable 42,435 74,881
Prepaid expenses 1,656,272 -
Inventories 131,594 95,982
Total current assets 29,993,385 19,811,478
Capital Assets:

Construction in progress 693,456 391,214
Motorized equipment 14,512,571 14,323,172
Other equipment 3,349,326 2,846,895
Accumulated depreciation (11,141,146) (9,960,252)
Net capital assets 7,414,207 7,601,029
Total assets 37,407,592 27,412,507
Liabilities:

Current liabilities:

Accounts payable 648,180 552,729
Accrued liabilities 31,417 12,575
Note payable 135,493 -
Claims payable 3,754,328 2,299,557
Total current liabilities 4,569,418 2,864,861
Long-term liabilities:

Note payable 1,336,909 -
Claims payable 13,700,196 13,555,439
Total long-term liabilities 15,037,105 13,555,439
Total liabilities 19,606,523 16,420,300
Net Position:

Investment in capital assets 7,414,207 7,601,029
Unrestricted 10,386,862 3,391,178
Total net position 17,801,069$ 10,992,207$
Governmental Activities -
Internal Service Funds

CITY OF COSTA MESA, CALIFORNIA
Proprietary Funds
Statement of Net Position
(With Comparative Data for Prior Year)
June 30, 2021
See notes to financial statements
24 2021 2020
Operating revenues:

Charges for services 7,525,179$ 7,875,941$
Total operating revenues 7,525,179 7,875,941
Operating expenses:

Allocated administrative costs 2,006,201 1,488,451 Depreciation 1,216,665 1,279,612
Fuel and repair parts 1,015,493 1,061,932
Materials and supplies - 30,602
Claims and premiums 5,716,404 3,550,804
Total operating expenses 9,954,763 7,411,401
Operating income (loss) (2,429,584) 464,540
Nonoperating revenues (expenses):

Investment income (42,398) 694,080
Intergovernmental 25,670 -
Contributions 186,238 278,521
Gain/(loss) on disposal of equipment (163,258) 2,294 Total nonoperating revenues (expenses) 6,252 974,895 Income (loss) before transfers (2,423,332) 1,439,435 Transfers in (note 4) 9,232,194 1,125,000
Change in net position 6,808,862 2,564,435
Net position at beginning of year 10,992,207 8,427,772 Net position at end of year 17,801,069$ 10,992,207$
Internal Service Funds

CITY OF COSTA MESA, CALIFORNIA
Proprietary Funds
Statement of Revenues, Expenses, and Changes in Net Position Year ended June 30, 2021
Governmental Activities -
(With Comparative Data for Prior Year)
See notes to financial statements
25 2021 2020
Cash flows from operating activities:

Cash received from customers and user departments 7,531,206$ 7,880,985$ Cash payments to suppliers for goods and services (5,437,822) (5,252,269) Cash payments to employees for services (1,597,124) (1,206,551) Net cash provided by (used for) operating activities 496,260 1,422,165 Cash flows from noncapital financing activities:

Cash received from other funds 9,232,194 1,125,000 Cash paid to other funds - (56,271)
Intergovernmental revenue received 26,355 -
Net cash provided by (used for)
noncapital financing activities 9,258,549 1,068,729 Cash flows from capital and related financing activities:

Cash received from disposal of assets - 36,198 Acquisition of capital assets (1,216,361) (347,732) Net cash provided by (used for) capital
and related financing activities (1,216,361) (311,534) Cash flows from investing activities:

Investment income received (9,952) 704,677
Net cash provided by (used for) investing activities (9,952) 704,677 Net increase (decrease) in cash and cash equivalents 8,528,496 2,884,037 Cash and cash equivalents at beginning of year 19,634,588 16,750,551 Cash and cash equivalents at end of year 28,163,084$ 19,634,588$ Reconciliation of operating income (loss) to net cash
provided by (used for) operating activities:

Operating income (loss) (2,429,584)$ 464,540$
Adjustments to reconcile operating income (loss)
to net cash provided by (used for) operating activities:

Depreciation 1,216,665 1,279,612
(Increase) decrease in inventories (35,612) 17,729 (Increase) decrease in accounts receivable 6,027 5,044 (Increase) decrease in prepaid items (183,870) 5,828 Increase (decrease) in accounts payable 304,264 (143,917) Increase (decrease) in accrued liabilities 18,842 3,920 Increase (decrease) in claims payable 1,599,528 (210,591) Net cash provided by (used for) operating activities 496,260$ 1,422,165$ There were no noncash investing, capital and financing activities during fiscal years ended June 30, 2021, except for a note payable issued to prepay the purchase of equipment and donations of $185,553 worth of equipment that was recorded in the Equipment Replacement Internal Service Fund.

Internal Service Funds
Governmental Activities -

CITY OF COSTA MESA, CALIFORNIA
Proprietary Funds
Statement of Cash Flows
Year ended June 30, 2021
(With Comparative Data for Prior Year)
See notes to financial statements
26 Successor Agency
to the City of
Costa Mesa
Redevelopment
Agency
Private Purpose Custodial
Trust Fund Fund 2021 2020
Assets:

Cash and cash investments (note 2) 1,524,563$ 1,720,038$ 3,244,601$ 3,482,152$ Total assets 1,524,563$ 1,720,038$ 3,244,601$ 3,482,152$ Liabilities:

Accounts payable -$ 1,076,667$ 1,076,667$ 309,633$ Loan from City (note 5) 4,916,327 - 4,916,327 6,212,950 Deposits payable - - - 2,136,682 Total liabilities 4,916,327 1,076,667 5,992,994 8,659,265 Net Position:

Restricted for:

Held in trust for Successor
Agency (3,391,764) - (3,391,764) (5,177,113) Individuals, organizations and
other governments - 643,371 643,371 - Total net position (3,391,764)$ 643,371$ (2,748,393)$ (5,177,113)$ Totals

CITY OF COSTA MESA, CALIFORNIA
Fiduciary Funds
Statement of Fiduciary Net Position
June 30, 2021
(With Comparative Data for Prior Year)
See notes to financial statements
27 Successor Agency
to the City of
Costa Mesa
Redevelopment
Agency
Private Purpose Custodial
Trust Fund Fund 2021 2020
Additions:

Property tax 1,902,703$ -$ 1,902,703$ 1,270,135$ Assessments and fees - 1,373,718 1,373,718 - Donations - 56,239 56,239 - Total additions 1,902,703$ 1,429,957$ 3,332,660$ 1,270,135$ Deductions:

Administrative expenses -$ -$ -$ 1,500$ Interest expense 117,354 - 117,354 156,085 Remittance to others - 1,448,285 1,448,285 - Total deductions 117,354 1,448,285 1,565,639 157,585 Net increase (decrease) in
fiduciary net position 1,785,349 (18,328) 1,767,021 1,112,550 Net position at beginning of year,
as restated (note 20) (5,177,113) 661,699 (4,515,414) (6,289,663) Net position at end of year (3,391,764)$ 643,371$ (2,748,393)$ (5,177,113)$ Totals

CITY OF COSTA MESA, CALIFORNIA
Fiduciary Funds
Statement of Changes in Fiduciary Net Position
Year ended June 30, 2021
(With Comparative Data for Prior Year)
See notes to financial statements
28 FINANCIAL REPORT

ANNUAL COMPREHENSIVE

NOTES TO THE FINANCIAL

STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(1) Summary of Significant Accounting Policies
The following is a summary of the significant accountingpolicies of the City of Costa Mesa, California (City):
(a) Description of Reporting Entity
The City of Costa Mesa was incorporated on June 29, 1953as a general law city under the Government Code of the State of California. The City operates under a Council- Manager form of government. Among services provided by the City are the following:
public works, parks and recreation, planning, commu nity development, fire, and law enforcement services.

As required by generally accepted accounting principles, these financial statements present the City and its component units, entities for which the City is considered to be financially accountable. The City is considered to be financially accountable for an organization if the City appoints a voting majority of that organization’s governing body and the City is either able to impose its will on that organization, or there is a potential for that organization to provide specific financial benefits to or impose specific financial burdens on the City. The City is also considered to be financially accountable if an organization is fiscally dependent upon the City (i.e., it is unable to adopt its budget, levy taxes, set rates or charges, or issue bonded debt without approval from the City). In certain cases, other organizations are included as component units if the nature and significance of their relationship with the City are such that their exclusion would cause the City’s financial statements to be misleading or incomplete.

All of the City’s component units are considered to be blended component units.

Blended component units, although legally separate entities, are, in substance, part of the City’s operations and so data from these units are appropriately presented as funds of the primary government. The following organizations are considered to be component units of the City:

Costa Mesa Public Financing Authority
The Costa Mesa Public Financing Authority (Public Financing Authority) was established on August 20, 1990 for the purpose of financing public capital improvements. Even though it is legally separate, it is reported as if it were part of the City because the City Council also serves as the governing board of the Authority.

Transactions of the Public Financing Authority are reported in the Debt Service Fund.

Separate financial statements of the Public Financing Authority can be obtained at City Hall.

Costa Mesa Housing Authority
The Costa Mesa Housing Authority (Housing Authority) was created pursuant to the State of California Health and Safety Code, Section 34176(a). The Housing Authority promotes affordable housing for low and moderate income households within the City, administers the homeless outreach program and operates the bridge shelter for homeless individuals.
29 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(1) Summary of Significant Accounting Policies (Continued) The Housing Authority is a separate entity primarily funded by housing loan repayments and transfers from the City.

City Council members, in separate session, serve as the governing board of the Housing Authority, and all accounting and administrative functions are performed by the City. Financial activity of the Housing Authority has been reported as if it were part of the City in the Housing Authority Special Revenue Fund. Separate financial statements of the Housing Authority can be obtained at City Hall.

Costa Mesa Financing Authority
The Costa Mesa Financing Authority (Financing Authority) was created by a joint powers agreement between the City of Costa Mesa (the City) and the Costa Mesa Housing Authority (the Housing Authority), dated August 1, 2017. It was created pursuant to Article 1 of Chapter 5 of Division 7 of Title of the Government Code of the State of California (the “JPA Act”). Transactions of the Financing Authority are reported in the Debt Service Fund. Separate financial statements of the Financing Authority can be obtained at City Hall.
(b) Basis of Accounting and Measurement Focus
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
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 separate columns for the governmental and business-type activities of the primary government (including its blended component units), as well as its discretely presented component units. The City has no business-type activities or discretely presented component units. 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. 30 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(1) Summary of Significant Accounting Policies (Continued) Under the accrual basis of accounting, revenues, expenses, gains, losses, assets, deferred outflows of resources, liabilities and deferred inflows of resources resulting from exchange and exchange-like transactions are recognized when the exchange takes place. Revenues, expenses, gains, losses, assets, deferred outflows of resources, liabilities and deferred inflows of resources resulting from nonexchange transactions are recognized in accordance with the requirements of GASB Statement No. 33.

Program revenues include charges for services, special assessments, and payments made by parties outside of the reporting government’s citizenry if that money is restricted to a particular program. Program revenues are netted with program expenses in the Statement of Activities to present the net cost of each program.

Amounts paidto acquire capital assets are capitalized as assets in the government- wide financial statements, rather than reported as expenditures. Proceeds of long- term debt are recorded as a liability in the government-wide financial statements, rather than as other financing sources. Amounts paid to reduce long-term indebtedness of the reporting government are reported as areduction of the related liability, rather than as expenditures.

Franchise fees and business license charges have been reported as general revenues because the fees are based on gross receipts, not charges for services.

Fund Financial Statements
The underlying account system of the City is organized and operated on the basis of separate funds. A fund is defined as an independent fiscal and accounting entity with a self-balancing set of accounts, recording resources, related liabilities, obligations, reserves, and equities segregated for the purpose of carrying out specific ac tivities or attaining certain objectives in accordance with special regulations, restrictions or limitations. Fund financial statements for the primary government’s governmental, proprietary, and fiduciary funds are presented after the government-wide financial statements. These statements display information about major funds individually and nonmajor funds in the aggregate for governmental funds. Proprietary statements include financial information for internal service funds.

Fiduciary statements include financial information for agency and private purpose trust funds. Fiduciary funds of the City represent assets held by the City in acustodial capacity for other individuals or organizations.

Governmental Funds
In the fund financial statements, governmental funds are presented using the modified accrual basis of accounting. 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. 31 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(1) Summary of Significant Accounting Policies (Continued) The City uses an availability period of 60 days for all governmental fund revenue, except for grant revenue which uses an availability period of 90 days.

Sales taxes, property taxes, franchise taxes, motor vehicle in lieu, 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 when 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 nonexchange transactions are recognized as revenues when all applicable eligibility requirements have been met.

In the fund financial statements, governmental funds are presented using the current financial resources measurement focus. This means that generally only current assets, current liabilities and deferred inflows of resources are included on their balance sheets. The reported fund balance is considered to be a measure of “available spendable resources.” Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in fund balance. Accordingly, they are said to present a summary of sources and uses of “available spendable resources” during a period.

Noncurrent portions of long-term receivables due to governmental funds are reported on the balance sheet 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 fund balance.

Recognition of governmental fund type revenues represented by unavailable revenues are reported as deferred inflows of revenues.

Due to the nature of their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by noncurrent 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. Proceeds of long-term debt are recorded as other financing sources, rather than a fund liability. Amounts paid to reduce long-term indebtedness are reported as fund expenditures. 32 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(1) Summary of Significant Accounting Policies (Continued) 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.

Proprietary and Fiduciary Funds
The City’s internal service funds are proprietary funds. In the fund financial statements, proprietary and private-purpose trust funds are presented using the accrual basis of accounting. Revenues are recognized when they are earned and expenses are recognized when related goods or services are delivered.

In the fund financial statements, proprietary and private-purpose trust funds are presented using the economic resources measurement focus. This means that all assets and all liabilities (whether current or noncurrent) associated with their activity are included on the Statement of Net Position. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in total net position.

Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with principal activity of the fund. Exchange transactions are those in which each party receives and gives us essentially equal values. Nonoperating revenues, such as investment income, gain or loss on sale of equipment and miscellaneous revenues result from nonexchange transactions or ancillary activities. Operating expenses for internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All expenses not meeting this definition are reported as nonoperating expenses. Amounts paid to acquire capital assets are capitalized as assets in the internal service fund financial statements, rather than being reported as expenses. Proceeds of long-term debt are recorded as liabilities in the internal service fund financial statements, rather than being reported as other financing sources. Amounts paid to reduce long-term indebtedness of the internal service fund are reported as reductions of the related liability, rather than as expenses. The City’s custodial funds are fiduciary funds and are accounted for according to the nature of the fund.
(c) Property Tax Calendar
Property tax revenues are recognized in the fiscal year for which the taxes have been levied, provided this accrual meets the available criteria. “Available” means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The County of Orange collects property taxes for the City tax liens attached annually as of 12:01 a.m. on the first day in January preceding the fiscal year for which the taxes are levied. The tax levy covers the fiscal period July 1st to June 30th. All secured personal property taxes and one-half of the taxes on real property are due November 1st. The second installment is due February 1st. All taxes are delinquent if not paid as of December 10th and April 10th, respectively. Unsecured personal property taxes become due on the first of March each year and are delinquent if not paid as of August 31st.
33 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(1) Summary of Significant Accounting Policies (Continued) (d) Fund Classifications
The City reports the following major governmental funds:

General Fund – The General Fund is the general operating fund of the City. All general tax revenues and other receipts that are not restricted by law or contractual agreement to some other fund are accounted for in this fund. Expenditures of this fund include the general operating expenditures and other costs, which are not paid through other funds.

Special Revenue Fund
Gas Tax Fund - Established to account for the receipt and disbursement of funds required to be used for construction and maintenance of the City’s road network system. Financing is provided by the City’s share of State gasoline taxes, including allocations from the Highway Users Tax Account (HUTA) and the Road Maintenance and Rehabilitation Account (RMRA).

Capital Projects Fund
Capital Improvements Fund – This capital projects fund was established to account for construction of capital facilities financed by the City’s General Fund and various governmental grants.

The City’s fund structure also includes the following fund types:

Special Revenue Funds – The special revenue funds are used to account for the proceeds of specific revenue sources that are restricted by law or administrative action for a specified purpose.

Debt Service Funds– The debt service funds are used to account for the accumulation of resources for, and the payment of, long-term liabilities, interest, and related fiscal agent costs.

Capital Projects Funds – The capital projects funds are used to account for financial resources segregated for the acquisition and construction of major capital facilities (other than those financed by the proprietary funds).

Internal Service Funds – The internal service funds are used to finance and account for activities involved in rendering equipment replacement, self-insurance services, and information technology replacement to departments within the City. Costs of materials, equipment, and services used are accumulated in these funds and charged to the user departments as such goods are delivered or services rendered.

Private Purpose Trust Fund – The private-purpose trust fund accounts for the assets, liabilities, additions, and deductions made on behalf of the former Costa Mesa Redevelopment Agency.
34 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(1) Summary of Significant Accounting Policies (Continued) Custodial Funds – The custodial funds are used to account for assets held by the City in a trustee capacity or as an agent for individuals, private organizations and other governments. The custodial funds are used to account for fees, assessments , seizures and donations for which the City is acting in an agent capacity. (e) Cash and Investments
Certain assets and liabilities are required to be reported at fair value. The fair value framework provides a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of fair value hierarchy are described as follows:

Level 1 - Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly and fair value is determined through the use of models or other valuation methodologies including:
 Quoted prices for similar assets or liabilities in active markets;  Quoted prices for identical or similar assets or liabilities in markets that are inactive;
 Inputs other than quoted prices that are observable for the asset or liability;  Inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement. These unobservable inputs reflect the City’s own assumptions about the inputs market participants would use in pricing the asset or liability (including assumptions about risk). These unobservable inputs are developed based on the best information available in the circumstances and may include the City’s own data.
(f) Cash Equivalents
For purposes of the statement of cash flows, cash equivalents are defined as short- term, highly liquid investments that are both readily convertible to known amounts of cash or so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Cash and cash equivalents include all investments with original purchase maturities of three months or less. Cash equivalents also represent the proprietary funds share in the cash and investment pool of the City.
35 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(1) Summary of Significant Accounting Policies (Continued) The City pools idle cash from all funds in order to maximize income from investment activities. Investments are recorded on the City’s books at fair value (quoted market price or best available estimate thereof). Interest income on investments is allocated to individual funds on the basis of monthly cash and investment balances. (g) Inventories
Inventories of materials and supplies are carried at cost on an average cost basis.

The City uses the consumption method of accounting for inventories. (h) Prepaids
The City uses the consumption method to record prepaid items. (i) New Accounting Pronouncements
Current Year Standards
GASB 84 - Fiduciary Activities. The implementation of this statement resulted in a prior period restatement as described in note 20.

GASB 90 – Majority Equity Interests – an amendment of GASB Statements No. 14 and No. 61. The implementation of this statement did not result in financial impact to the City.

GASB 98 – The Annual Comprehensive Financial Report. The implementation of this statement resulted in a change to the name of this report from Comprehensive Annual Financial Report to Annual Comprehensive Financial Report.

Pending Accounting Standards
GASB has issued the following pronouncements that have an effective date subsequent to June 30, 2021, which may impact the City’s financial reporting requirements in the future. Unless otherwise noted, management has not determined what, if any, impact implementation of the following Statements may have on future financial statements.

GASB 87 – Leases: Effective for the City’s fiscal year ending June 30, 2022.

GASB 91 – Conduit Debt Obligations: Effective for the City’s fiscal year ending June 30, 2023.

GASB 92 – Omnibus 2020: Effective for the City’s fiscal year ending June 30, 2022.

GASB 93 – Replacement of Interbank Offered Rates: Effective for the year ending June 30, 2022.
36 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(1) Summary of Significant Accounting Policies (Continued) GASB 94 – Public-Private and Private-Public Partnerships and Availability Payment Arrangements: Effective for the City’s fiscal year ending June 30, 2023.

GASB 96 – Subscription-Based Information Technology Arrangement: Effective for the year ending June 30, 2023.

GASB 97 – Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans: Effective for the year ending June 30, 2021.
(j) Capital Assets
Capital assets (including infrastructure) are recorded at historical cost at the time of purchase. Assets acquired from gifts or contributions are recorded at acquisition value on the date received. Generally, capital asset purchases in excess of $5,000 are capitalized if they have an expected useful life of two years or more.

Capital assets include public domain (infrastructure) capital assets consisting of certain improvements including roads, streets, sidewalks, medians, sewers, and storm drains. Public domain assets acquired prior to 1980 have been included in the accompanying financial statements.

Capital assets used in operations are depreciated or amortized over their estimated useful lives using the straight-line method in the government-wide financial statements and in the fund financial statements of proprietary funds. It is the City’s policy not to depreciate or amortize assets in its first year of service. A full year of depreciation or amortization is charged at final year of asset life or upon disposal.

Depreciation and amortization are charged as expenses against operations and accumulated depreciation and amortization are reported on the respective statement of net position.

The ranges of lives used for computing depreciation and amortization for each capital asset class are as follows:

Building improvements and structures 10-20 years Landscaping and sprinklers 35-40 years Automotive equipment 2-20 years Office furniture 5-20 years Office machines 3-20 years Other equipment 5-60 years Intangible assets 7-10 years Park system and facilities 10-25 years Infrastructure – roads 10-50 years Infrastructure – storm drains 50-100 years 37 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(1) Summary of Significant Accounting Policies (Continued) (k) Deferred Outflows/Inflows of Resources
The statement of net position and the governmental funds balance sheet will sometimes report a separate section for deferred outflows of resources. This financial statement element, deferred outflows of resources, represents a consumption of net position that applies to future periods and so will not be recognized as an outflow of resources (expenditure) until that time. The City has two items that qualify for reporting in this category. The items are deferred outflows related to pensions and OPEB.

The statement of net position and the governmental funds balance sheet will sometimes report a separate section for deferred inflows of resources. This financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to future periods and so will not be recognized as an inflow of resources (revenue) until that time. The City has three types of items which qualify for reporting in this category. Two of the items are deferred inflows related to pensions and OPEB, which are presented on the government-wide statement of net position.

The third item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from accounts, taxes and grant receivables. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. (l) Fund Balances
Fund balances are reported in the fund statements in the following classifications:

Nonspendable Fund Balance – This includes amounts that cannot be spent because they are either not spendable in form(such as inventory) or legally or contractually required to be maintained intact (such as endowments).

Restricted Fund Balance – This includes amounts that can be spent only for specific purposes stipulated by constitution, external resource providers, or through enabling legislation. If Council action limiting the use of funds is included in the same action (legislation) that created (enables) the funding source, then it is restricted.

Committed Fund Balance – This includes amounts that can be used only for specific purposes determined by formal action of a city ordinance by the Council. It includes legislation (Council action) that can only be overturned by new legislation requiring the same type of voting consensus that created the original action. Therefore, if Council action limiting the use of funds is separate from the action (legislation) that created (enables) the funding source, then it is committed, not restricted. For the purposes of establishing, modifying, and rescinding a committed fund balance, the City considers anordinance more binding than a resolution or a minute action by City Council.
38 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(1) Summary of Significant Accounting Policies (Continued) Assigned Fund Balance – This includes amounts that are designated orexpressed by the Council, but does not require a formal action like a resolution or ordinance. The Council may delegate the ability to an employee or committee to assign uses of specific funds for specific purposes. In June 2011, the City Council passed Resolution 11-27, delegating authority to establish, modify, or rescind a fund balance assignment to the Finance Director.

Unassigned Fund Balance – This includes amounts that are the residual balance for the City’s general fund and includes all spendable amounts not contained in other classifications. In other funds, the unassigned classification is used only to report a deficit balance resulting from overspending for specific purposes for which amounts had been restricted, committed or assigned.

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 components of unrestricted fund balance. Further, when components of the 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.
(m) Em ployee Leave Benefits
Eligible employees accumulate up to 26.5 days of vacation each year, depending on the employee’s bargaining unit and length of service, but may not carry over from one year to the next more than the equivalent of one to two (depends on Memorandum of Understanding or Salary Resolution) year’s vacation without prior approval of the respective department head and/or City Manager.

A liability is recorded for unused vacation and similar compensatory leave balances since the employees’ entitlement 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.

A liability is recorded for unused sick leave balances except for miscellaneous, confidential and Costa Mesa Police Association (CMPA) employee groups. The liability is recorded only to the extent that it is probable that the unused balances will result in termination payments. Unused sick leave is converted to CalPERS service credit at the time of retirement. The ability to liquidate leave balances is available to all employee groups with the exception of miscellaneous, confidential and CMPA employee groups, separations from which result in the forfeiture of the accrued sick leave benefit. Other amounts of unused sick leave are excluded from the liability since their payment is contingent solely upon the occurrence of a future event (illness), which is outside the control of the City and the employee. 39 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(1) Summary of Significant Accounting Policies (Continued) A current liability is accrued in the governmental funds for material leave benefits due on demand to governmental fund employees that have terminated prior to year -end.

All other amounts are only recorded in the government-wide financial statements.

These non-current amounts will be recorded as fund expenditures in the year in which they are paid or become due on demand to terminated employees. (n) Claims and Judgments
The City records a liability for litigation, judgments, and claims when it is probable that an asset has been impaired or a liability has been incurred prior to year-end and the probable amount of loss (net of any insurance coverage) can be reasonably estimated.

This liability is recorded in an internal service fund, which accounts for the City’s self-insurance activities.
(o) Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and 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 the 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.

GASB 68 requires that the reported results must pertain to liability and asset information within certain defined timeframe. For this report, the following timeframes are used:

CalPERS Plans
Valuation Date June 30, 2019
Measurement Date June 30, 2020
Measurement Period July 1, 2019 to June 30, 2020
Supplemental Plan
Valuation Date June 30, 2020
Measurement Date June 30, 2021
Measurement Period July 1, 2020 to June 30, 2021
(p) Other Post Employment Benefits (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense and information about the plan (OPEB Plan), have been determined by an independent actuary. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms.
40 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(1) Summary of Significant Accounting Policies (Continued) Generally accepted accounting principles require that the reported results must pertain to liability information within certain defined timeframes. For this report, the following timeframes are used:

Valuation Date June 30, 2019
Measurement Date June 30, 2020
Measurement Period July 1, 2019 to June 30, 2020
(q) Use of Estimates
The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
(r) Prior Year Data
The information included in the accompanying financial statements for the prior year has been presented for comparison purposes only and does not represent a complete presentation in accordance with generally accepted accounting principles.

Certain minor reclassifications of prior year data have been made in order to enhance their comparability with current year figures.
(2) Cash and Investments
Cash and investments are reported as follows:

Cash and investments at June 30, 2021 consisted of the following:

Petty cash on hand 58,202$
Demand deposits 4,474,508
Investments 127,611,580
Total cash and investments 132,144,290$
Statement of Net Position:

Cash and Investments 127,921,427$
Cash and Investments with Fiscal Agent 978,262
Statement of Fiduciary Net Position:

Cash and Investments 3,244,601
Total cash and investments 132,144,290$
41 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(2) Cash and Investments (Continued)
Investments Authorized by the California Government Code and the City of Costa Mesa’s Investment Policy
The table below identifies investment types that are authorized for the City by the California Government Code and investment policies of the City. The table also identifies certain provisions of the California Government Code (or the City’s investment policy, where 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. * 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 trustees 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 trustees. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk.

Authorized Maximum Percentage Investment In
Investments Maturity* of Portfolio* One Issuer*
U.S. Treasury Securities 5 years None None
Federal Agency Securities 5 years None 35%
Municipal Securities 5 years None 5%
Banker’s Acceptances 180 days 40% 5%
Commercial Paper 270 days 25% 5%
Federally Insured Time Deposit 5 Years None None
Non-Negotiable Certificates of Deposit 5 years 20% None Certificate of Deposit Placement Service 5 years 30% None Negotiable Certificates of Deposit 5 years 30% 5%
Repurchase Agreements 1 year 30% None
Medium-Te rm Corporate Notes 5 years 30% 5%
Money Market Mutual Funds N/A 20% 10%
Asset Backed Securities 5 years 20% None
County Pooled Investment Funds N/A 35% None
Local Agency Investment Fund N/A up to $65 million None 42 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(2) Cash and Investments (Continued)
Generally, the following investment types are authorized by the City’s debt agreements:

Authorized
Investments
Maximum
Maturity
Maximum
Percentage
Allowed
Maximum
Investment in
One Issuer
U.S. Treasury Securities None None None
Federal Agency Securities 1 year None None
Banker’s Acceptances 30 days None None
Commercial Paper 270 days None None
Money Market Mutual Funds None None None
Investment Agreements None None None
Interest-Bearing Time Deposits 30 days None None
Repurchase Agreements 270 days None None
Local Agency Investment Fund None None None
State Obligations None None None
Pre-funded Municipal Obligations None None None
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer-term investments, and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.

Information about the sensitivity of the fair values of the City’s investments (including investments held by bond trustee) to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity:

Investment Type
12 Months
Or Less
13 to 24
Months
25 to 60
Months Total
Federal Agency Securities 1,520,529$ 13,579,438$ 10,358,785$ 25,458,752$ State Investment Pool (LAIF) 62,348,656 - - 62,348,656 U.S. Treasury Securities 3,523,199 7,021,046 12,323,210 22,867,455 Medium-Term Corporate Notes 1,953,344 7,508,049 3,170,110 12,631,503 Asset Backed Securities - 160,105 1,394,339 1,554,444 Money Market Mutual Funds 59,195 - - 59,195 PARS Section 115 Trust:

Pooled Balanced Index Plus 1,778,220 - - 1,778,220 Held by Trustee:

Money Market Mutual Funds 878,355 - - 878,355 Lehman Brothers Holdings
Inc. Bankruptcy 35,000 - - 35,000 Total 72,096,498$ 28,268,638$ 27,246,444$ 127,611,580$
43 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(2) Cash and Investments (Continued)
Investments with Fair Values Highly Sensitive to Interest Rate Fluctuations The City (including investments held by bond trustees) held no investments that were highly sensitive to interest rate fluctuations (to a greater degree than already indicated in the information provided above).

Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code, the City’s investment policy, or debt agreements, and the actual rating as of year-end for each investment type:
* not required to be rated
GASB requires the disclosure of more than 5% total investments with a single issuer. At June 30, 2021, the City’s investment in the following single issuers exceeded 5%:

Issuer Investment Type Reported Amount Percentage
FNMA Federal Agency Securities $ 12,112,545 10%
FHLMC Federal Agency Securities 7,837,514 6%
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:

Minimum Legal
Investment Type Rating AAA AA A Not Rated Total
Federal Agency Securities N/A -$ 25,458,752$ -$ -$ 25,458,752$ U.S. Treasury Securities* N/A - - - - 22,867,455 Medium-Term Corporate Notes A 700,165 3,564,494 8,366,844 - 12,631,503 State Investment Pool (LAIF) N/A - - - 62,348,656 62,348,656 Asset Backed Securities AAA 1,554,444 - - - 1,554,444 Money Market Mutual Funds AAA 59,195 - - - 59,195 PARS Section 115 Trust:

Pooled Balanced Index Plus N/A - - - 1,778,220 1,778,220 Held by Trustee:

Money Market Mutual Funds AAA 878,355 - - - 878,355 Lehman Brothers Holdings
Inc. Bankruptcy N/A - - - 35,000 35,000 Total 3,192,159$ 29,023,246$ 8,366,844$ 64,161,876$ 127,611,580$ 44 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(2) Cash and Investments (Continued)
The California Government Code requires that a financial institution secure deposits made by the 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.

Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro- rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis.

Investment in Public Agency Retirement Services
The City is a voluntary participant in the Public Agency Retirement Services (PARS). In 2021, the City funded an Internal Revenue Services Section 115 irrevocable trust with PARS for pension and OPEB benefits. The trust account allows more control and flexibility in investment allocations compared to the City’s portfolio which is restricted by State regulations to fixed income instruments. OPEB and Pension trust fund assets are held on behalf of the City by PARS. The City provides investment direction and determines the amount and timing of disbursements of PARS trust fund assets.

Fair Value Measurements
The City’s investments in the Costa Mesa Community Facilities District Bonds and Lehman Brothers Holdings, Inc. Bankruptcy are valued based on cost and the City’s assumptions originated from market participant input, respectively. These investments are not traded on, and therefore, are categorized in Level 3. When valuing Level 3 securities, the inputs or methodology are not necessarily an indication of the risks associated with investing in those securities. Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy.
45 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(2) Cash and Investments (Continued)
Fair value measurements for the year ended June 30, 2021 are as follows:
(3) Interfund Receivables and Payables
Interfund receivable and payable balances at June 30, 2021 are as follows:

All receivables resulted from short term borrowing to cover negative cash balances. (4) Transfers In and Out
Transfers in and out for the year ended June 30, 2021 are as follows:

Quoted
Prices
Level 1
Observable
Inputs
Level 2
Unobservable
Inputs
Level 3 Total
Federal Agency Securities -$ 25,458,752$ - $ 25,458,752$ U.S. Treasury Securities - 22,867,455 - 22,867,455 Medium Term Corporate Notes - 12,631,503 - 12,631,503 Asset Backed Securities - 1,554,444 - 1,554,444 Held by Trustee:

Lehman Brothers Holdings
Inc. Bankruptcy - - 35,000 35,000 Investments measured at Fair
Value -$ 62,512,154$ 35,000$ 62,547,154
State Investment Pool (LAIF)* 62,348,656
Money Market Mutual Funds* 59,195
PARS Section 115 Trust:

Pooled Balanced Index Plus* 1,778,220
Held By Trustee:

Money Market Mutual Funds* 878,355
Total Investment Portfolio 127,611,580$
* Not subject to fair value categorization
Receivable Fund Payable Fund Amount
General Fund Nonmajor Governmental Funds 590,847$
Transfers out Transfers in Total
General Fund Capital Improvements Fund 7,787,926$ (a1) General Fund Nonmajor Governmental Funds 18,890,639 (a2 to a6) Nonmajor Governmental Funds General Fund 9,173,146 (b1) 35,851,711$
46 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(4) Transfers In and Out (Continued)
(a) The General Fund transferred the following:

1. $7,787,926 to the Capital Improvements Capital Projects Fund for capital improvement projects and transfer for 5% CAN Ordinance;

2. $2,814,501 to the Financing Authority Debt Service Fund for debt service payments;

3. $1,790,836 to the Housing Authority for subsidy of homeless program costs;

4. $6,857,710 to the Internal Service Funds for various equipment and vehicle purchases as well as true up 5% per CAN Ordinance;

5. $5,053,108 to the Disaster Fund for Small Business grants and to backfill spending gap; and

6. $2,374,484 to the Self-Insurance Fund for pending litigations. (b) The Nonmajor Governmental Funds (American Rescue Plan Act Fund) transferred the following:

1. $9,173,146 to the General Fund as reimbursement of ARPA eligible expenses incurred. (5) Loans Receivable
The City’s loans receivable at June 30, 2021 by loan programs are as follows:

Allowance for uncollectible accounts are established for various loans.

General Fund Loan to the Successor Agency
In years prior to 2013, the General Fund made loans in the amount of $9,278,545 to the Successor Agency (formerly the Redevelopment Agency of the City of Costa Mesa). Loan repayments are approved annually by the State. As a result, an allowance for doubtful accounts has been recorded for the outstanding loan balance.

Loan receivable $ 4,916,327
Less allowance for doubtful accounts (4,916,327)
Loans receivable, net $ -
HOME Program 1,237,455$
Community Development Loan Program 191,195
Rental Rehabilitation Program 228,560
First Time Home Buyer Program 1,488,656
Single Family Rehabilitation Program 142,500
Neighborhood Stabilization Program 181,250
Other Programs 508,542
Total 3,978,158
Less allowance for uncollectible loans (3,327,484)
Loans receivable, net 650,674$
47 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(6) Capital Assets
A summary of changes in capital assets is as follows:

Depreciation expense is charged to the following functions for the year ended June 30, 2021:

Governmental activities:

General government $ 1,065,878
Protection of persons and property 3,478,321
Community programs 2,367,048
Public services 7,772,387
Total depreciation expense-governmental activities $14,683,634 Balance at Balance at
July 1, 2020 Additions Deletions June 30, 2021
Capital assets not being depreciated:

Land 34,579,306$ -$ -$ 34,579,306$ Land rights related to streets 29,821,224 - - 29,821,224 Construction in progress 16,985,950 19,221,067 (27,769,929) 8,437,088 Total capital assets not
being depreciated 81,386,480 19,221,067 (27,769,929) 72,837,618 Capital assets being depreciated/am ortized:

Building impr ovements and structures 103,411,671 19,874,001 (353,019) 122,932,653 Landscaping and sprinklers 10,116,095 19,692 (59,112) 10,076,675 Automotive equipment 14,731,108 396,073 (316,748) 14,810,433 Office furniture 921,225 35,834 (15,707) 941,352 Office machines 8,923,216 - (411,839) 8,511,377 Other equipment 13,375,679 1,179,244 (859,459) 13,695,464 Intangible assets 1,606,245 40,636 - 1,646,881 Park system and facilities 18,038,086 1,596,523 - 19,634,609 Infrastructure - roads 296,336,980 5,700,838 (5,483,208) 296,554,610 Infrastructure - storm drains 100,891,798 219,580 (259,929) 100,851,449 Total capital assets being
depreciated/amortized 568,352,103 29,062,421 (7,759,021) 589,655,503 Less accumulated depreciation/amortization:

Building impr ovements and structures (43,663,360) (3,719,689) 353,019 (47,030,030) Landscaping and sprinklers (9,425,644) (76,445) 59,112 (9,442,977) Automotive equipment (9,215,930) (892,108) 145,848 (9,962,190) Office furniture (569,704) (49,838) 11,241 (608,301) Office machines (7,791,440) (261,530) 411,839 (7,641,131) Other equipment (8,144,059) (1,058,506) 859,459 (8,343,106) Intangible assets (1,018,925) (161,215) - (1,180,140) Park system and facilities (11,421,094) (814,048) - (12,235,142) Infrastructure - roads (195,513,535) (6,294,675) 5,154,137 (196,654,073) Infrastructure - storm drains (85,420,443) (1,355,580) 259,929 (86,516,094) Total accumulated
depreciation/amortization (372,184,134) (14,683,634) 7,254,584 (379,613,184) Total capital assets being
depreciated/amortized, net 196,167,969 14,378,787 (504,437) 210,042,319 Capital assets, net 277,554,449$ 33,599,854$ (28,274,366)$ 282,879,937$ 48 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021

(6) Capital Assets (Continued)

The City has active construction projects as of June 30, 2021. The significant projects include the following:

Remaining
Construction Project Total Budget Spent to Date Commitment Land Management System $ 2,054,941 $ 695,206 $ 1,359,735 ERP system for Human
Resource, Finance and Payroll 1,028,318 55,625 972,693
Fairview Road Improvement
405/Adams 1,178,820 2,670 1,176,150
SB Newport Blvd Improvements
Mesa Victoria 1,908,337 2,431 1,905,906 Newport NB 22th Bristol SB
Bristol Mesa 2,134,145 2,360 2,131,785
Citywide Street Maintenance 7,409,627 5,286,818 2,122,809 Jack Hammett Field Upgrade 1,706,071 8,796 1,697,275 Total $ 17,420,259 $ 6,053,906 $11,366,353

(7) Changes in Long-Term Liabilities

A summary of changes in long-term liabilities in primary government for the year ended June 30, 2021 is as follows:

Due Due
Balance at Balance at Within One Beyond One
July 1, 2020 Additions Reductions June 30, 2021 Year Year Bonds payable:

Public Financing Authority
2006 Revenue
Refunding Bonds 410,000$ - $ (200,000)$ 210,000 $ 210,000 $ - $ Financing Authority
2017 Lease Revenue
Bonds 26,525,000 - (1,675,000) 24,850,000 1,740,000 23,110,000 Unamortized premium 3,287,813 - (147,767) 3,140,046 147,767 2,992,279 Total bonds payable 30,222,813 - (2,022,767) 28,200,046 2,097,767 26,102,279 Other liabilities:

Loans payable 128,261 - (15,391) 112,870 15,391 97,479 Claims payable 15,854,996 3,705,942 (2,106,414) 17,454,524 3,754,328 13,700,196 Note payable - 1,472,402 - 1,472,402 135,493 1,336,909 Employee leave
benefits payable 5,036,540 3,896,266 (3,012,142) 5,920,664 3,231,521 2,689,143 Total other liabilities 21,019,797 9,074,610 (5,133,947) 24,960,460 7,136,733 17,823,727 Total 51,242,610 $ 9,074,610 $ (7,156,714) $ 53,160,506 $ 9,234,500 $ 43,926,006 $ 49 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(8) Long-Term Liabilities
Costa Mesa Public Financing Authority Bonds - 2006 Revenue Refunding Bonds On June 1, 2006, Costa Mesa Public Financing Authority issued $2,365,000 of Revenue Refunding Bonds, Series 2006A, to advance refund the outstanding portion of the $3,225,000 of the 1991 Lease Revenue Bonds issued on November 1, 1991. The bonds were issued to provide monies to enable the Authority to acquire the City of Costa Mesa Community Facilities District 91-1 (Plaza Tower Public Improvements) 1991 Special Tax Bonds, issued under the Mello-Roos Community Facilities Act of 1982.

The $2,365,000 Revenue Refunding Bonds, which consists of $1,955,000 of serial bonds and $410,000 of term bonds. The serial bonds mature from August 1, 2007 through August 1, 2019 in annual installments ranging from $120,000 to $190,000. The term bonds mature from August 1, 2020 through August 1, 2021 in annual installments ranging from $200,000 to $210,000. Interest is payable semi-annually on February 1 and August 1 of each year, commencing on February 1, 2007 at rates ranging from 3.85% to 5.10%.

There is a reserve requirement of $220,910 on the 2006 Revenue Refunding Bonds. The City has $220,715 on reserve with the fiscal agent at June 30, 2021. The principal balance outstanding at June 30, 2021 is $210,000.

The bonds are secured by special tax levied within CFD 91-1 Plaza Tower Public Improvements. The special taxes are levied and collected for debt service on the bonds are required to be remitted to the fiscal agent for the bonds within ten business days of receipt.

The City received taxes on December 23, 2020 and April 22, 2021 and remitted payments to the fiscal agent one and seven business days later, respectively.

The annual debt service requirements for the bonds as of June 30, 2021 are as follows:

Costa Mesa Financing Authority Bonds - 2017 Lease Revenue Bonds On October 1, 2017, the Costa Mesa Financing Authority issued $29,735,000 of 2017 Lease Revenue Bonds to finance certain capital improvements of the City of Costa Mesa and to advance refund $16,765,000 of outstanding Costa Mesa Public Financing Authority 2007 Certificates of Participation (2007 Certificates). The bond issue also included a bond premium of $3,694,172. The bonds mature from October 1, 2018 through October 1, 2042 in annual installments ranging from $570,000 to $2,220,000. Interest is payable semi-annually on April 1 and October 1 of each year, commencing on April 1, 2018 at a rate ranging from 2% to 5%. As of June 30, 2021, the principal outstanding is $24,850,000 and the unamortized bond premium balance is $3,140,046.

Year
Ending
June 30 Principal Interest Total
2022 210,000$ 5,355$ 215,355$
Total 210,000$ 5,355$ 215,355$
50 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(8) Long-Term Liabilities (Continued)
Bond proceeds of $14,530,520 along with $2,302,225 of 2007 Certificates sinking fund monies, were used to purchase U.S. government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the 2007 Certificates. As a result, the 2007 Certificates are considered to be defeased and the liability for those certificates have been removed from the government-wide Statement of Net Position.

The annual debt service requirements for the bonds as of June 30, 2021 are as follows:

Loans Payable – SCE On-Bill Financing (OBF) Loans
During the year ended June 30, 2019, the City entered into loan agreements with Southern California Edison to finance certain street lighting projects. The total amount of the loans was $153,914. The loan’s term is ten years with monthly payments of $1,282. The loans bears no interest.

The annual debt service requirements for loans payable as of June 30, 2021 are as follows:

Year
Ending
June 30 Principal Interest Total
2022 1,740,000$ 1,062,550$ 2,802,550$
2023 1,830,000 973,300 2,803,300
2024 1,920,000 879,550 2,799,550
2025 2,015,000 781,175 2,796,175
2026 2,115,000 677,925 2,792,925
2027 - 2031 4,685,000 2,387,125 7,072,125
2032 - 2036 3,840,000 1,501,200 5,341,200
2037 - 2041 4,635,000 719,999 5,354,999
2042 - 2043 2,070,000 67,763 2,137,763
Total 24,850,000$ 9,050,587$ 33,900,587$
Year
Ending
June 30 Principal Total
2022 15,391$ 15,391$
2023 15,391 15,391
2024 15,391 15,391
2025 15,391 15,391
2026 15,391 15,391
2027 - 2029 35,915 35,915
Total 112,870$ 112,870$
51 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(8) Long-Term Liabilities (Continued)
Firetruck Note Payable
On February 25, 2021, the City entered into a Master Lease – Purchase Agreement and financed the purchase of a Pierce Arrow XT Firetruck for $1,472,402. The note matures annually on March 5th of each year with annual payments of $162,497. The note bears an interest rate of 1.8340% per annum.

The annual debt service requirements for the note as of June 30, 2021 is as follows:
(9) Fund Balances
Fund balance consisted of the following at June 30, 2021:

Year
Ending
June 30 Principal Interest Total
2022 135,493$ 27,004$ 162,497$
2023 137,978 24,519 162,497
2024 140,509 21,988 162,497
2025 143,086 19,411 162,497
2026 145,710 16,787 162,497
2027 - 2031 769,626 42,858 812,484
Total 1,472,402$ 152,567$ 1,624,969$
Gas Capital Non-Major
General Tax Improvements Funds
Nonspendable:

Prepaid items 894,129$ -$ -$ -$ Inventories 70,717 - - - Restricted for:

Pension and OPEB 1,778,220 - - - Protection of persons and Property - - - 1,329,138 Community programs - - - 5,655,880 Public services (1) - 13,553,266 - 4,098,695 Debt service - - - 563,401 Committed for:

Declared disasters (2) 14,125,000 - - - Self insurance (3) 2,000,000 - - - Economic reserves 9,000,000 - - - Assigned for:

Compensated absences 5,920,664 - - - Police Retirement 1% Supplemental 2,274,765 - - - Protection of persons and Property - - - 651,541 Public services - - 17,187,179 13,334,565 Unassigned 17,428,766 - - (451,068) Total Fund Balance 53,492,261$ 13,553,266$ 17,187,179$ 25,182,152$ Major Funds
52 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(9) Fund Balances (Continued)

1. Restricted fund balances in the Public Services category consist of fund balances in the Gas Tax, Air Quality Improvement, Lions Park Capital Improvements, and Measure “M2” Construction funds. Revenues received in these funds are legally restricted for specific purposes, such as transportation and facility related capital projects.

2. The fund balance committed for declared disasters was adopted by Ordinance No. 91-20 and Municipal Code Section 2-206 to provide required funding as a result of a declared emergency by the City Council for an unanticipated but urgent event threatening the public health, safety and welfare of the City. Any fund balance utilized has to be replenished.

3. The fund balance committed for self-insurance was codified in the Ordinance No. 96-14 and City Municipal Code Section 2-154 to provide a self-insurance reserve to be used to pay actual losses not covered by insurance policies or insurance pools. Any fund balance utilized has to be replenished.

4. The fund balance committed for economic reserves was adopted by the City Council on March 3, 2015 as a part of the reserve goal plan. The City commits $1,500,000 each year toward economic reserve.

The following funds had deficits at June 30, 2021:

Nonmajor Governmental Funds:

Special Revenue Funds:

Office of Traffic Safety (213)
Government Grants (450,855)
Internal Service Fund:

Self-Insurance – Worker’s Compensation/General Liability Unemployment (652,519)
Fiduciary Fund:

Successor Agency to the City of Costa Mesa Redevelopment Agency Private Purpose Trust Fund (3,391,764)
(10) Defined Benefit Pension Plans
(a)General Information about the Pension Plans
Employees of the City are members of the California Public Employees’ Retirement System (CalPERS), the cost of which is paid by the City. The information below includes the aggregate total pension plan related items:

Miscellaneous Police Safety Fire Safety Total
Net pension liability (103,519,168)$ (127,350,714)$ (81,561,540)$ (312,431,422)$ Deferred outflows of
resources - pension 12,331,404 13,248,345 15,801,045 41,380,794 Deferred inflows of
resources - pension (189,457) (2,809,254) (2,793,555) (5,792,266) Pension expense 12,034,930 13,842,978 12,985,103 38,863,011 53 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(10) Defined Benefit Pension Plans (Continued)
The total aggregate amount of pension expense, including the Police 1% Supplemental Retirement Plan, is $38,977,699. Plan Below are descriptions of the retirement plans along with selected information regarding benefits, contributions, liabilities and actuarial assumptions:

Plan Descriptions
All qualified permanent and probationary employees are eligible to participate in the City’s separate Miscellaneous and Police Safety Plans, agent multiple-employer defined benefit pension plans and the Fire Safety cost sharing plans. The plans are administered by CalPERS, which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plans are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

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 to 62 with statutorily reduced benefits. For employees hired into a plan with the 1.5% at 65 formula, eligibility for service retirement is age 55 with at least 5 years of service.

PEPRA miscellaneous members become eligible for service retirement upon attainment of age 52 with at least 5 years of service. 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.

Safety members can receive a special death benefit if the member dies while actively employed and the death is job-related. Fire members may receive the alternate death benefit in lieu of the Basic Death Benefit or the 1957 Survivor Benefit if the member dies while actively employed and has at least 20 years of total CalPERS service. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law. 54 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(10) Defined Benefit Pension Plans (Continued)
The Plans’ provisions and benefits in effect at June 30, 2021, are summarized as follows:

Police Safety (Agent Multiple-Employer)
On or After On or After
Hire Date March 11, 2012 January 1, 2013
Benefit formula 3% @50 2.7% @57
Benefit vesting schedule 5 years of service 5 years of service Benefit payments monthly for life monthly for life
Retirement age 50 50 - 57
Monthly benefits, as a % of
eligible compensation 3% 2.0% to 2.7%
rates 14% 11.50%
rates 16.62% 21.62%
Required employee contribution
Required employer contribution
Prior to On or After On or After
Hire Date December 30, 2012 December 30, 2012 January 1, 2013 Benefit formula 3.0% @50 2.0% @50 2.7% @57
Benefit vesting schedule 5 years of service 5 years of service 5 years of service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 50 - 55 50 - 57
Monthly benefits, as a % of
eligible compensation 3% 2.0% to 2.7% 2.0% to 2.7%
rates 14% 9% 12%
rates 20.54% 18.15% 13.04%
Fire Safety (Cost Sharing Multiple-Emplo yer)
Required employer contribution
Required employee contribution
Prior to On or After On or After
Hire Date March 11, 2012 March 11, 2012 January 1, 2013 Benefit formula 2.5% @55 2.0% @60 2% @62
Benefit vesting schedule 5 years of service 5 years of service 5 years of service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 - 55 50 - 63 52 - 67
Monthly benefits, as a % of
eligible compensation 2.0% to 2.5% 1.092% to 2.418% 1.0% to 2.5% rates 10.469% 7% 6.75%
rates 7.98% 10.45% 10.45%
Miscellaneous (Agent Multiple-Emplo yer)
Required employee contribution
Required employer contribution
55 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(10) Defined Benefit Pension Plans (Continued)
Employees Covered
At the June 30, 2020 measurement date, the following employees were covered by each plan’s benefit terms:

Miscellaneous Police Safety Fire Safety
Inactive employees or
beneficiaries currently
receiving benefits 565 19 7 1 44
Inactive employees entitled to
but not yet receiving benefits 742 71 -
Active employees 351 129 80
Totals 1,658 397 224
Contributions
Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of achange in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process.

The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The 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 plan member contribution requirements as identified by the pension plan terms are classified as plan member contributions. (b) Net Pension Liability
The City’s net pension liability for each Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of each Plan is measured as of June 30, 2020, based on an annual actuarial valuation as of June 30, 2019 and rolled forward to June 30, 2020 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown below. 56 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(10) Defined Benefit Pension Plans (Continued)
Actuarial Methods and Assumptions Used to Determine Total Pension Liability For the three CalPERS Plans, the June 30, 2019 valuation was rolled forward to determine the June 30, 2020 pension liability, based on the following actuarial methods and assumptions:

Valuation date June 30, 2019
Measurement date June 30, 2020
Actuarial cost method Entry-Age Normal in accordance with the requirements of GASB 68
Actuarial assumptions:

Discount rate 7.15%
Inflation 2.50%
Salary increases Varies by Entry Age and Service
Mortality Rate Table1 Derived using CalPERS Membership Data for all Funds
Post Retirement Benefit
Increase
The lessor 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. P re-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.

Discount Rate
The discount rate used to measure the total pension liability was 7.15%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at the 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 on investment was applied to all periods of projected benefit payments to determine the total pension liability.

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. 57 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(10) Defined Benefit Pension Plans (Continued)
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, except 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 single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long- term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.

The expected real rate of return by asset class are as followed:

Asset Class1
Assumed asset
allocation
Real Return
Years 1–102
Real Return
Years 11+3
Global Equity 50.0% 4.80% 5.98%
Fixed Income 28.0% 1.00% 2.62%
Inflation assets 0.0% 0.77% 1.81%
Private Equity 8.0% 6.30% 7.23%
Real assets 13.0% 3.75% 4.93%
Liquidity 1.0% 0.00% (0.92%)
1 In the system’s ACFR, Fixed Income is included Global Debt Securities; Liquidity is included in Short-term Investment; Inflation Assets are included both Global Equity Securities and Global Debt Securities.
2 An expected inflation of 2.00% used for this period
3 An expected inflation of 2.92% used for this period
58 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(10) Defined Benefit Pension Plans (Continued)
Changes in Net Pension Liability
The changes in the net pension liability for the Miscellaneous (Agent Multiple-Employer) Plan, using the measurement date of June 30, 2020, are as follows:

Changes in Net Pension Liability for the Miscellaneous (Agent Multiple-Employer) Plan Total Plan Net Position
Pension Fiduciary Liability
Liability Net Position (Asset)
Balance at June 30, 2019
(Valuation Date) 293,335,282$ 193,198,539$ 100,136,743$ Changes in the Year:

Service cost 4,081,002 - 4,081,002 Interest on the total pension liability 20,506,212 - 20,506,212 Differences between actual and
expected experience (324,784) - (324,784) Net plan to plan resource movement - - - Changes in assumptions - - - Contributions - employer - 9,336,852 (9,336,852) Contributions - employees - 2,205,872 (2,205,872) Net investment income - 9,609,644 (9,609,644) Administrative expenses - (272,363) 272,363 Benefit payments, including refunds
of employee contributions (16,501,681) (16,501,681) - Other Miscellaneous Income/(Expense) - - - Net Changes 7,760,749 4,378,324 3,382,425 Balance at June 30, 2020
(Measurement Date) 301,096,031$ 197,576,863$ 103,519,168$ Increase (Decrease)
59 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(10) Defined Benefit Pension Plans (Continued)
The changes in the net pension liability for the Police Safety (Agent-Multiple-Employer) Plan, using the measurement date of June 30, 2020, are as follows:

Proportionate Share of the Net Pension Liability for the Fire Safety Plan As of June 30, 2021, the City reported net pension liabilities for its proportionate share of the net pension liability of the Fire Safety Plan as follows:

The City’s proportionate share of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined.

Total Plan Net Position
Pension Fiduciary Liability
Liability Net Position (Asset)
Balance at June 30, 2019
(Valuation Date) 313,204,725$ 188,816,224$ 124,388,501$ Changes in the Year:

Service cost 4,912,766 - 4,912,766 Interest on the total pension liability 21,872,003 - 21,872,003 Differences between actual and
expected experience (1,729,542) - (1,729,542) Net plan to plan resource movement - - - Changes in assumptions - - - Contributions - employer - 10,608,592 (10,608,592) Contributions - employees - 2,285,323 (2,285,323) Net investment income - 9,465,284 (9,465,284) Administrative expenses - (266,185) 266,185 Benefit payments, including refunds
of employee contributions (16,058,867) (16,058,867) - Other Miscellaneous Income/(Expense) - - - Net Changes 8,996,360 6,034,147 2,962,213
Balance at June 30, 2020
(Measurement Date) 322,201,085$ 194,850,371$ 127,350,714$ Increase (Decrease)
Proportionate
Share of Net
Pension Liability
Balance at: 6/30/2019 77,775,545$
Balance at: 6/30/2020 81,561,540
Net Changes during 2020-21 3,785,995
60 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(10) Defined Benefit Pension Plans (Continued)
The City’s proportionate share of the net pension liability for this Plan as of the measurement dates of June 30, 2019 and 2020 was as follows:

Sensitivity of the Net Pension Liability to Changes in the Discount Rate The followingpresents the City’s net pension liability for each Plan, calculated using the Plan’s discount rate, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:

Miscellaneous Police Safety Fire Safety
1% Decrease 6.15% 6.15% 6.15%
Net Pension Liability $ 141,911,089 $ 171,420,503 $ 110,397,610 Current Discount Rate 7.15% 7.15% 7.15%
Net Pension Liability $ 103,519,168 $ 127,350,714 $ 81,561,540 1% Increase 8.15% 8.15% 8.15%
Net Pension Liability $ 71,878,916 $ 91,325,064 $ 57,898,815 Pension Plans Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

Amortization of Deferred Outflows and 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. T he 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:

Net difference between projected and actual
earnings on pension plan investments
All other amounts
5 years
Straight-line amortization over the
expected average remaining lifetime of
all members (EARSL)
Fire Safety
Proportion - June 30, 2019 1.24590%
Proportion - June 30, 2020 1.22422%
Change - Increase (Decrease) (.02168%)
61 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(10) Defined Benefit Pension Plans (Continued)
Pension Expense and Deferred Outflows/Inflows of Resources Related to Pension For the year ended June 30, 2021, the City recognized pension expense of $12,034,930, $13,842,978 and $12,985,103 for the Miscellaneous, Police Safety, and Fire Safety Plans, respectively. At June 30, 2021, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred Deferred
Outflows Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 10,249,971$ -$ Differences between expected and actual experience 692,024 (189,457) Net differences between projected and actual
earnings on plan investments 1,389,409 -
Total 12,331,404$ (189,457)$
Deferred Deferred
Outflows Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 11,803,904$ -$ Differences between expected and actual experience - (2,552,529) Change in assumptions - (256,725)
Net differences between projected and actual
earnings on plan investments 1,444,441 -
Total 13,248,345$ (2,809,254)$
Deferred Deferred
Outflows Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 7,555,477$ -$ Differences between expected and actual experience 6,324,684 - Change in assumptions - (271,683)
Change in employer's proportion - (2,466,826) Net difference between projected and actual
earnings on plan investments 1,772,676 -
Differences between employer's contributions and
change in employer's proportion 148,208 (55,046) Total 15,801,045$ (2,793,555)$
Miscellaneous
Police Safety
Fire Safety
62 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(10) Defined Benefit Pension Plans (Continued)
At June 30, 2021, deferred outflows of resources in the amounts of $10,249,971, $11,803,904, and $7,555,477 were related to contributions subsequent to the measurement date for the Miscellaneous, Police Safety and Fire Safety Plans, respectively. They will be recognized as a reduction of the net pension liability in the fiscal year ending June30, 2022.

Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
(11) Police 1% Supplemental Retirement Plan
(a) General Information about the Pension Plan
Plan Description
The plan was effective on July 1, 1993 for sworn members of the City of Costa Mesa Police Department. The plan was originally a 1% supplemental plan to the City’s 2%@50 benefit.

Under the Retirement Plan for Safety Employees of the City of Costa Mesa, the City joined CalPERS with 3%@50 Safety benefit as of December 31, 2000 and transferred active members to CalPERS. Employees who retired prior to July 1, 1999 were not transferred to CalPERS.

The Police 1% Supplemental Retirement Plan is a single employer defined benefit plan.

This Plan currently has only retired participants as all active employees were transferred to the CalPERS 3%@ 50 benefit plan. The number of participants at June 30, 2021 was 18.

The average monthly benefit being paid is $949.24. The retirement benefit is 1% of the highest 12-month earnings for credited services up to 25 years. Maximum benefit is 75% of the highest 12-month earnings for service retirement including all public plan pension benefits but not including Social Security. The 75% is proportionately reduced for less than 25 years of Costa Mesa Police Department service.

Contributions
The City has not adopted a funding policy for this supplemental retirement plan and accordingly plan benefits impact financial resources as benefits are paid.

Fiscal Year
Ending
June 30 Miscellaneous Police Safety Fire Safety
2022 (375,065)$ (2,269,812)$ 292,694$
2023 441,016 (466,005) 2,387,180
2024 1,036,784 591,820 1,883,929
2025 789,241 779,184 888,210
Thereafter - - - 63 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(11) Police 1% Supplemental Retirement Plan (Continued) (b) Pension Liability
The City’s pension liability for the Plan is measured as the total pension liability, as the pension plan has no fiduciary net position. The pension liability of the Plan is measured as of June 30, 2021, using an annual actuarial valuation as of June 30, 2021. A summary of principal assumptions and methods used to determine the net pension liability is shown below.

Actuarial Methods and Assumptions
The total pension liabilities in the June 30, 2021 actuarial valuations were determined using the following actuarial assumptions:

Measurement Date June 30, 2021
Actuarial Assumptions:

Discount Rate 2.10% per annum. This discount rate is the mid-point, rounded to 5basis points, of 3-20 year municipal bond
rate indices: S&P Municipal Bond 20 Year High Grade
Rate Index, Bond Buyer 20-Bond GO Index, Fidelity GO
AA 20 Year Bond Index.

Payroll Growth N/A; all participants have retired
Inflation Rate 2.75% per year
Cost Method Entry Age Normal as a level percentage of payroll Employer Funding Policy Pay-as-you-go
Census Data
Retirement
Disability/Turnover Rate
Mortality
Census information was provided by the Plan Sponsor
as of June 2020.

N/A; all participants have retired
Rates are based on the 2017 CalPERS Experience Study
for Public Agency Police as shown below:

Age Male Female Male Female
50 0.37% 0.35% 0. 37% 0.35%
60 0.67% 0.48% 0. 67% 0.48%
70 1.34% 0.93% 1. 61% 1.11%
80 3.98% 3.01% 4. 77% 3.61%
90 13.04% 10.09% 14.35% 11.10%
100 32. 22% 28.15% 32.22% 28.15%
110 100.00% 100.00% 100.00% 100.00%
Healthy Retirees Non-Duty Disabled Retirees
64 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(11) Police 1% Supplemental Retirement Plan (Continued) Discount Rate
The discount rate used to measure the total pension liability was 2.10%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate.

Professional judgment on future contributions has been applied in those cases where contribution patterns deviate from the actuarially determined rates. Basted on those assumptions, the pension plan's fiduciary net position was projected to be depleted for current members during the fiscal year. Therefore, the long-term expected rate of return of 2.10% was used to discount funded projected benefit payments to determine the total pension liability. The single effective discount rate was 2.10%.

The discount rate changed from 2.45% as of June 30, 2020 to 2.10% as of June 30, 2021 measurement date.
(c) Changes in the Pension Liability
Sensitivity of the Total Pension Liability to Changes in the Discount Rate The following presents the total pension liability, calculated using the discount rate of

2.10%, as well as what the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:
1% Decrease 1.10%
Pension Liability $ 2,459,749
Current Discount Rate 2.10%
Pension Liability $ 2,274,765
1% Increase 3.10%
Pension Liability $ 2,112,199
Balance at June 30, 2020 2,364,522 $
Changes in the year:

Interest on the total pension liability 55,426
Changes in assumptions 59,262
Benefit payments, including r efunds
of member contributions (204,445)
Net Changes (89,757)
Balance at June 30, 2021 2,274,765 $
65 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(11) Police 1% Supplemental Retirement Plan (Continued) (d)Pension expenses and Deferred Outflows/Inflows of Resources Related to Pensions
For the fiscal year ended June 30, 2021, the City recognized pension expense of $114,688.

At June 30, 2021, the City did not report any deferred outflows/inflows of resources related to the Police 1% Supplemental Retirement Plan.
(12) Defined Contribution Plan
On January 1, 2000, the City adopted a Defined Contribution Plan (Plan) for part-time employees that work under 1,000 hours during the fiscal year and do not meet the eligibility requirements to be enrolled in the California Public Employee Retirement System (CalPERS).

The Plan is administered by the Public Agency Retirement Services (PARS). As of June 30, 2021, there were 112 active participants in the Plan. Both the City and employees are required to each contribute 3.75% of gross wages. The City’s contribution to the defined contribution plan for the year ended June 30, 2021 was $23,576. (13) Other Post Employment Benefits Plan (OPEB)
Plan Description
The City administers a single-employer defined benefit plan, which provides medical insurance benefits to eligible retirees and their spouses in accordance with various labor agreements. The plan covers employees hired before January 1, 2004 who retire directly from the City with 10 years or more of City service. The City provides a contribution up to a percentage of the lesser of $500 per month or the premium for the most popular medical plan elected by the employees. The percentage varies by retirement date and years of City service. For employees hired on or after January 1, 2004, the City will only pay for the PEMHCA subsidy once they meet the definition of a retiree under CalPERS. The City provides retiree life insurance of $1,000 for the retiree and $500 for the retiree’s spouse.

Employees Covered
As of the June 30, 2020 measurement date, the following current and former employees were covered by the benefit terms under the Plan:

Active employees 445
Inactive employees or beneficiaries currently receiving benefits 429 Inactive employees entitled to, but not yet receiving benefits - Total 874
66 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(13) Other Post Employment Benefits Plan (OPEB) (Continued) Contributions
The contribution requirements of plan members and the City are established and may be amended by the City Council. The contribution required to be made under the City Council and labor agreement requirements is on a pay-as-you-go basis (i.e., as medical insurance premiums become due). For the fiscal year ended June 30, 2021, the City contributed $1,814,944 to the Plan. The City has not established a trust for the purpose of holding assets accumulated for plan benefits.

The City’s total OPEB liability was measured as of June 30, 2020 by an actuarial valuation based on the following actuarial methods and assumptions:

Discount Rate: 2.66% for accounting disclosure purposes. The rate is based on a yield for 20-year tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher (or equivalent quality on another rating scale). For the current valuation, the discount rate was selected from the range of indices as shown in the table below:

As of 06/30/20
Bond Buyer Go 20 – Municipal Bond Index 2.21%
S&P Municipal Bond 20-year High Grade
Rate Index

2.66%
Fidelity 20-year Go Municipal Bond Index 2.45%
Bond Index Range 2.21% -2.66%
Actual Discount Rate Used 2.66%
Inflation Rate: 2.75% per year
Aggregate Payroll Increases: 3.00% per year. This assumption is used to amortize the unfunded actuarial accrued liability and to determine the Entry Age Normal actuarial liabilities.

Mortality Rate: Based on rates used in the most recent CalPERS pension valuation.

Turnover Rate: Assumption used to project terminations (voluntary and involuntary) prior to meeting minimum retirement eligibility for retiree health coverage. The rates represent the probability of termination in the next 12 months. The termination rates are based on those used in the most recent CalPERS pension valuation.

Retirement Rate: Annual retirement rates are based on those used in the most recent CalPERS pension valuation.
67 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(13) Other Post Employment Benefits Plan (OPEB) (Continued) Changes in the Total OPEB Liability
The changes in the Plan’s total OPEB liability is as follows:

Sensitivity of the OPEB Liability to Changes in the Discount Rate The following presents the City’s OPEB liability if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for the measurement period ended June 30, 2021:
1% Decrease
(1.66%)
Current
Discount Rate
(2.66%)
1% Increase
(3.66%)
OPEB Liability $ 72,392,116 $ 62,882,272 $ 55,226,160 Sensitivity of the OPEB Liability to Changes in the Health Care Cost Trend Rates The following presents the OPEB liability of the City 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 the measurement period ended June 30, 2021:

Recognition of Deferred Outflows and Deferred Inflows of Resources Gains and losses related to changes in total OPEB liability are recognized in OPEB expense systematically over time. Amounts are first recognized in OPEB expense for the year the gain or loss occurs.

Current Healthcare Cost
1% Decrease Trend Rates 1% Increase
(5.25% decreasing to (6.25% decreasing to (7.25% decreasing to

3.50%) 4.50%) 5.50%)
OPEB Liability $58,118,782 $62,882,272 $69,757,991
Balance at June 30, 2020 58,917,480$
Changes recognized for the measurement period:

Service cost 1,145,090
Interest 2,060,874
Differences between expected and actual experience (3,128,209) Changes of assumptions 6,606,929
Contributions - employer -
Benefit payments (2,719,892)
Administrative expense -
Net Changes 3,964,792
Balance at June 30, 2021
(Measurement Date June 30, 2020) 62,882,272$
68 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(13) Other Post Employment Benefits Plan (OPEB) (Continued) 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 initial amortization period for deferred inflows and deferred outflows is three years.

OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2021, the City recognized OPEB expense of $4,203,278. At June 30, 2021, the City reported deferred outflows and inflows of resources related to OPEB from the following sources:

The $1,814,944 reported as deferred outflows of resources related to contributions subsequent to the June 30, 2020 measurement date will be recognized as a reduction of the net OPEB liability during the fiscal year ending June 30, 2022.

Other amounts reported as deferred inflows of resources related to OPEB will be recognized as expense as follows:

Fiscal Year
Ending June 30:

Deferred
Outflows/(Inflows)
of Resources
2022 $ 1,220,927
2023 1,220,927
2024 1,220,927
2025 1,220,927
2026 1,220,926
Thereafter 869,680
(14) Post Employment Benefits-RHS (Defined Contribution) On January 1, 2004, the City adopted a new Retirement Health Savings Plan (RHS) for all full-time active employees. This benefit was ratified in the City’s contractual agreements (MOU) with the Costa Mesa Employees Association (CMCEA), Costa Mesa Police Association (CMPA), Costa Mesa Police Management Association (CMPMA), and the Costa Mesa Firefighters Association (CMFA). This post-employment medical benefit is to assist employees with their qualifying medical expenses or premiums upon retirement or separation from the City with no minimum age requirement. The RHS plan is a defined contribution plan for all full time employees at the City. Under this plan, the employee and the City each make a mandatory 1% of base pay contribution. If the employee separates from the City prior to the 10-year vesting period, the employee forfeits his or her share of the City’s contribution.

Deferred
Outflows Deferred Inflows
of Resources of Resources
OPEB contributions subsequent to measurement date 1,818,944$ -$ Differences between expected and actual differences 1,487,138 (2,737,183) Changes in assumptions 8,224,359 -
Total 11,530,441$ (2,737,183)$
69 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(14) Post Employment Benefits-RHS (Defined Contribution) The City has no payment obligations once the employee separates from the City. Per a side letter agreement with employees, the RHS program was suspended starting November 7, 2010. For the CMPMA, effective July 2014, a 1% employee contribution is required to the plan, but no employer contribution is required. The City’s contribution to the defined contribution post retirement plan for the year ended June 30, 2021 was $0. (15) Expenditures in Excess of Appropriations
Excess of expenditures over appropriations in individual funds at the function level (level of budgetary control) is as follows at June 30, 2021:
(16) Risk Management
For the fiscal year ended June 30, 2021, the City participated in the California Municipal Excess Liability (“CAMEL”) Program. The membership of CAMEL consists of 21 cities with similar interests and needs regarding liability insurance. The Board of Directors sets the premiums for each participant and each participant is represented on the Board. Premiums are based upon the losses incurred by each member and are not affected by losses incurred by other members.

In the Self-Insurance Workers’ Compensation/General Liability/Unemployment Internal Service Fund, the City has recorded liabilities of $17,454,524 for lawsuits and other claims arising in the ordinary course of business. The City is also self-insured for the first $2,000,000 of each claim arising for workers’ compensation and has purchased outside insurance coverage in excess of the $2,000,000 up to an unlimited maximum. The City is self-insured for the first $2,000,000 of each claim arising for general liability. The City has purchased outside insurance coverage in excess of the $2,000,000 up to a maximum of $25,000,000 per occurrence. For the past three years, claim payments have not exceeded the amount of applicable insurance coverage. The City has estimated losses for claims and judgments and has established liabilities of $8,903,985 for workers’ compensation and $8,550,539 for general liability. Losses for claims incurred but not reported are recorded when the probable amount of loss can be reasonably estimated. These amounts represent estimates of amounts to be paid for reported claims and incurred but not yet reported claims based upon past experience, modified for current trends and information. While the ultimate amount of losses incurred through June 30, 2021 is dependent on future developments, based upon information from the City Attorney, the City’s claims administrators and others involved with the administration of the programs, Citymanagement believes the accrual is adequate to cover such losses.

Function Expenditures Appropriations Excess
Special Revenue Funds:

Supplemental Law Protection of Persons
Enforcement Services Fund and property 268,637 245,013 23,624 Office of Traffic Safety Fund Enhance traffic safety 270,456 267,125 3,331 70 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(16) Risk Management (Continued)
The City is contingently liable for additional losses not reported in the accompanying financial statements in the range of approximately $25,000 to $2,000,000 for which the likelihood of an unfavorable outcome is only reasonably possible, as determined by legal counsel.

Changes in claims payable for the past two fiscal years are as follows:

The City is currently the subject of a number of lawsuits related to sober living facilities within Costa Mesa. These cases are at various phases. At this time, the probability of an unfavorable outcome ranges from remote to probable, however the City Council has not given direction on whether to vigorously defend these cases or attempt to settle. Without direction, it is difficult to estimate the potential exposure to the City. P rofessional standards require a loss contingency to be accrued if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. As of June 30, 2021, the City set up a loss reserve of $2,374,484 related to sober living lawsuits.
(17) Pledged Revenue
The City and its component units has one debt issuance outstanding that is collateralized by the pledging of certain revenues. The amount and term of the remainder of this commitment is indicated in the debt service to maturity table presented in the notes. The purpose for which the proceeds of the related debt issuance was utilized is disclosed in the debt description in Note 8. For the current year, debt service payments as a percentage of the pledged gross revenue (or net of certain expense where so required by the debt agreement) are indicated in the table below. This percentage also approximates the relationship of debt service to pledged revenue for the remainder of the term of the commitment:
(18) Golf Course Lease Agreement
The City has entered into an agreement with Mesa Verde Partners (MVP) under which MVP will operate and collect user fees from the Costa Mesa Country Club through August 31, 2029. The agreement requires MVP to pay a percentage of gross receipts that MVPreceives from green fees, driving range, cart rental, sales from the proshop, food and beverages, and the rental of banquet and meeting rooms, or a flat minimum monthly rate, whichever is greater.

Fiscal Year
Beginning
Balance
Claims
Incurred and
Changes in
Estimates
Claim
Payments Ending Balance
2019-20 16, 065,587 2,360,983 (2,571,574) 15,854,996 2020-21 15, 854,996 3,705,942 (2,106,414) 17,454,524 Annual Amount of Annual Debt Service Debt Service as a
Description of Pledged Revenue (net Payments (of all debt Percentage of Pledged Revenue of expenses) secured by this revenue) Pledged Revenue Mello-Roos CFD 91-1 243,675$ 215,355$ 88.38% 71 CITY OF COSTA MESA, CALIFORNIA
Notes to the Basic Financial Statements
Year ended June 30, 2021
(18) Golf Course Lease Agreement (Continued)
The percentage of gross receipts varies from 6 percent to 35 percent depending on the revenue type, and the minimum rent is adjusted every two years. The minimum rent for the period of September 1, 2019 to August 31, 2021 is $147,000 per month.

In fiscal year 2021, the City received a total of $3,689,953 from the golf course operations, $3,526,237 of which is reported in the General Fund and the remaining $163,716 in the Golf Course Improvements Capital Projects Fund. The City reports the golf course and related equipment under capital assets in the government-wide financial statements. (19) Legislation and Litigation Affecting the Successor Agency As of February 1, 2012, California redevelopment agencies were dissolved. The Successor Agency to the Costa Mesa Redevelopment Agency (Successor Agency) succeeded to the former Costa Mesa Redevelopment Agency (former Agency) and administers the enforceable obligations, including a $9,278,545 loan from the City’s General Fund to the former agency.

The Department of Finance has approved the Successor Agency to reinstate this loan on its Report Obligation Payment Schedule (ROPS).

The City has adjusted the loan for principal/interest additions and principal repayments from the annual ROPS as approved by the Department of Finance. As of June 30, 2021, the Successor Agency’s loan payable balance was $4,916,327.

A summary of changes in long-term liabilities in the Successor Agency for the year ended June 30, 2021 is as follows:
(20) Prior Period Restatement
The City had a prior period restatement due to the implementation of GASB 84 as follows:

Fiduciary Activities
Beginning net position,
as previously reported $ -
Implementation of GASB 84 661,699
Beginning net position,
as restated $ 661,699
Portion Due Portion Due
Balance Balance at Within One Beyond One
July 1, 2020 Additions Reductions June 30, 2021 Year Year Loans Payable 6,212,950$ -$ (1,296,623)$ 4,916,327$ 1,905,703$ 3,010,624$ Total 6,212,950$ -$ (1,296,623)$ 4,916,327$ 1,905,703$ 3,010,624$ 72 FINANCIAL REPORT

ANNUAL COMPREHENSIVE

REQUIRED SUPPLEMENTARY

INFORMATION

REQUIRED SUPPLEMENTARY INFORMATION

Measurement date June 30, 2014 June 30, 2015 June 30, 2016 June 30, 2017 Total pension liability:

Service cost 3,366,560$ 3,187,235$ 3,269,125$ 3,659,618$ Interest on total pension liability 17,792,384 18,262,096 18,633,944 18,996,998 Difference between expected and
actual experience - (2,016,112) (2,818,846) (1,038,444) Changes in assumptions - (4,399,842) - 15,484,252 Benefit payments, including refunds
of employee contributions (12,853,585) (13,476,175) (14,145,202) (14,720,378)

Net Change in Total Pension Liability 8,305,359 1,557,202 4,939,021 22,382,046 Total pension liability - beginning of year 241,975,291 250,280,650 251,837,852 256,776,873 Total pension liability - End of Year (a) 250,280,650$ 251,837,852$ 256,776,873$ 279,158,919$ Plan Fiduciary Net Position:

Contributions - employer 4,903,142$ 5,768,827$ 6,226,072$ 6,712,045$ Contributions - employees 2,137,933 1,978,052 1,966,557 1,936,240 Net investment income 26,075,603 3,881,685 897,287 18,711,484 Benefit payments (12,853,585) (13,476,175) (14,145,205) (14,720,378) Plan to plan resource movement - 13,634 3,064 - Administrative expense - (193,604) (104,766) (246,188) Other miscellaneous income (expense) - - - - Net change in plan fiduciary net position 20,263,093 (2,027,581) (5,156,991) 12,393,203 Plan fiduciary net position - beginning of year 153,666,841 173,929,934 171,902,353 166,745,362 Plan fiduciary net position - end of year (b) 173,929,934$ 171,902,353$ 166,745,362$ 179,138,565$ Net pension liability - ending (a)-(b) 76,350,716$ 79,935,499$ 90,031,511$ 100,020,354$ Plan fiduciary net position as a percentage of
the total pension liability 69.49% 68.26% 64.94% 64.17% Covered payroll 18,366,435$ 17,928,997$ 19,890,931$ 19,532,886$ Net pension liability as a percentage of
covered payroll 415.71% 445.84% 452.63% 512.06%
Notes to schedule:

Benefit changes:

The figures above do not include any liability impact that may have resulted from plan changes which occurred after the June 30, 2018 valuation date. This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes).

Changes in assumptions:
* - Fiscal year 2015 was the first year of implementation, therefore only seven years are shown.

None in 2020 or 2019. In 2018, demographic assumptions and inflation were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. In 2017, The accounting discount rate reduced from 7.65% to 7.15%. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.50% (net of administrative expense) to 7.65% (without a reduction for pension plan administrative expenses). In 2014, amounts reported were based on the 7.50% discount rate.

CITY OF COSTA MESA, CALIFORNIA
Schedule of Changes in the Net Pension Liability and Related Ratios Miscellaneous Plan
Last Ten Fiscal Years*
73 June 30, 2018 June 30, 2019 June 30, 2020
3,528,896$ 3,828,540$ 4,081,002$
19,188,563 19,990,625 20,506,212
(3,837,320) 4,152,146 (324,784)
(1,071,584) - -
(15,285,935) (16,317,568) (16,501,681)
2,522,620 11,653,743 7,760,749
279,158,919 281,681,539 293,335,282
281,681,539$ 293,335,282$ 301,096,031$
7,300,573$ 8,320,570$ 9,336,852$
1,906,040 2,055,169 2,205,872
15,161,548 11,863,211 9,609,644
(15,285,935) (16,317,568) (16,501,681)
(1,077) - -
(279,147) (133,740) (272,363)
(530,105) 435 -
8,271,897 5,788,077 4,378,324
179,138,565 187,410,462 193,198,539
187,410,462$ 193,198,539$ 197,576,863$
94,271,077$ 100,136,743$ 103,519,168$

66.53% 65.86% 65.62%
20,067,193$ 24,394,495$ 24,012,483$
469.78% 410.49% 431.11%
74 Fiscal year ended June 30, 2015 June 30, 2016 June 30, 2017 Actuarially determined contribution 5,221,083$ 6,056,123$ 6,522,784$ Contributions in relation to the actuarially
determined contributions (5,221,083) (6,056,123) (6,522,784) Contribution deficiency (excess) -$ -$ -$ Covered payroll 17,928,997$ 19,890,931$ 19,532,886$
Contributions as a percentage of covered payroll 29.12% 30.45% 33.39%

Notes to schedule:

Valuation date for June 30, 2021 6/30/2018
Methods and assumptions used to determine contribution rates:

Single and agent employers
Amortization method/period
Asset valuation method
Inflation
Salary increases
Payroll growth
Investment rate of return
Retirement age
Mortality
Other information:

For changes to previous year’s information, refer to past GASB 68 reports. * - Fiscal year 2015 was the first year of implementation, therefore only seven years are shown.

CITY OF COSTA MESA, CALIFORNIA
Schedule of Contributions
Miscellaneous Plan
Last Ten Fiscal Years*

2.75%

7.00%, net of pension plan investment and administrative expense; includes inflation.

The probabilities of Retirement are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015.

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 period from 1997 to 2015. Pre-retirement and Post-retirement
mortality rates include 20 years of projected mortality improvement using Scale BB published by the Society of
Actuaries.

Entry Age Normal
For details, see June 30, 2018 Funding Valuation Report.

Fair Value of Assets. For details, see June 30, 2018 Funding Valuation Report.

2.50%
Varies by Entry Age and Service
75 June 30, 2018 June 30, 2019 June 30, 2020 June 30, 2021 6,913,866$ 9,256,492$ 9,876,401$ 10,249,971$
(6,913,866) (9,256,492) (9,876,401) (10,249,971) -$ -$ -$ -$
20,067,193$ 24,394,495$ 24,012,483$ 26,206,105$

34.45% 37.95% 41.13% 39.11%
76 Measurement date June 30, 2014 June 30, 2015 June 30, 2016 June 30, 2017 Total pension liability:

Service cost 4,675,505$ 4,048,034$ 4,011,055$ 4,475,641$ Interest on total pension liability 17,563,332 18,452,568 19,519,447 20,072,034 Difference between expected and
actual experience - 1,744,508 4,436,634 (2,148,051) Changes in assumptions - (4,744,823) - 17,608,748 Benefit payments, including refunds of
employee contributions (11,159,179) (12,625,831) (13,319,431) (13,984,335)

Net Change in Total Pension Liability 11,079,658 6,874,456 14,647,705 26,024,037 Total pension liability - beginning of year 237,419,600 248,499,258 255,373,714 270,021,419 Total pension liability - end of year (a) 248,499,258$ 255,373,714$ 270,021,419$ 296,045,456$ Plan fiduciary net position:

Contributions - employer 5,066,147$ 5,228,944$ 5,992,098$ 7,592,902$ Contributions - employees 2,204,590 2,191,295 1,988,684 2,012,546 Net investment income 24,794,991 3,618,253 825,770 17,309,154 Benefit payments (11,159,179) (12,625,831) (13,319,431) (13,984,335) Plan to plan resource movement - - 72 - Administrative expense - (182,933) (98,993) (233,009) Other miscellaneous income (expense) - - - - Net change in plan fiduciary net position 20,906,549 (1,770,272) (4,611,800) 12,697,258 Plan fiduciary net Position -beginning of year 143,294,304 164,200,853 162,430,581 157,818,781 Plan fiduciary new position - end of year (b) 164,200,853$ 162,430,581$ 157,818,781$ 170,516,039$ Net pension liability - ending (a)-(b) 84,298,405$ 92,943,133$ 112,202,638$ 125,529,417$ Plan fiduciary net position as a percentage
of the total pension liability 66.08% 63.61% 58.45% 57.60% Covered payroll 14,884,359$ 13,714,558$ 14,161,162$ 14,696,132$ Net pension liability as a percentage of
covered payroll 566.36% 677.70% 792.33% 854.17%
Notes to schedule:

Benefit changes:

The figures above do not include any liability impact that may have resulted from plan changes which occurred after the June 30, 2017 valuation date. This applies for voluntary benefit changes as well as any offers of Two Years Additional Credit (a.k.a. Golden Handshakes).

Changes in assumptions:
* - Fiscal year 2015 was the first year of implementation, therefore only seven years are shown.

None in 2020 or 2019. In 2018, demographic assumptions and inflation were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. In 2017, The accounting discount rate reduced from 7.65% to 7.15%. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.50% (net of administrative expense) to 7.65% (without a reduction for pension plan administrative expenses). In 2014, amounts reported were based on the 7.50% discount rate.

CITY OF COSTA MESA, CALIFORNIA
Schedule of Changes in the Net Pension Liability and Related Ratios Police Safety Plan
Last Ten Fiscal Years*
77 June 30, 2018 June 30, 2019 June 30, 2020
4,653,580$ 4,959,915$ 4,912,766$
20,611,486 21,235,614 21,872,003
(1,494,789) (2,112,152) (1,729,542)
(1,540,347) - -
(14,129,155) (15,024,883) (16,058,867)
8,100,775 9,058,494 8,996,360
296,045,456 304,146,231 313,204,725
304,146,231$ 313,204,725$ 322,201,085$
8,263,652$ 9,471,893$ 10,608,592$
2,120,029 2,222,313 2,285,323
14,402,562 11,872,172 9,465,284
(14,129,155) (15,024,883) (16,058,867)
222 - -
(265,711) (128,739) (266,185)
(504,590) 420 -
9,887,009 8,413,176 6,034,147
170,516,039 180,403,048 188,816,224
180,403,048$ 188,816,224$ 194,850,371$
123,743,183$ 124,388,501$ 127,350,714$

59.31% 60.29% 60.47%
14,529,255$ 17,534,445$ 16,175,525$
851.68% 709.40% 787.30%
78 Fiscal year ended June 30, 2015 June 30, 2016
Actuarially determined contribution 5,237,595$ 5,994,277$ Contributions in relation to the actuarially
determined contributions (5,237,595) (5,994,277)
Contribution deficiency (excess) -$ -$
Covered payroll 13,714,558$ 14,161,162$
Contributions as a percentage of covered payroll 38.19% 42.33%

Notes to schedule:

Valuation date for June 30, 2021 6/30/2018
Methods and assumptions used to determine contribution rates:

Actuarial Cost Method
Amortization method/period
Asset valuation method
Inflation 2.50%
Salary increases Varies by Entry Age and Service
Payroll growth 2.75%
Investment rate of return
Retirement age
Mortality
Other information:

For changes to previous year’s information, refer to past GASB 68 reports. * -

CITY OF COSTA MESA, CALIFORNIA
Schedule of Contributions
Police Safety Plan
Last Ten Fiscal Years*
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 20 years of
projected mortality improvement using Scale BB
published by the Society of Actuaries.

Fiscal year 2015 was the first year of implementation, therefore only seven years are shown.

Entry Age Normal
For details, see June 30, 2018 Funding Valuation
Report.

Fair Value of Assets. For details, see June 30,
2018 Funding Valuation Report.

7.00%, net of pension plan investment and
administrative expense; includes inflation.

The probabilities of Retirement are based on the
2017 CalPERS Experience Study for the period
from 1997 to 2015.
79 June 30, 2017 June 30, 2018 June 30, 2019 June 30, 2020 June 30, 2021 7,592,899$ 8,098,773$ 10,894,754$ 11,174,155$ 11,803,904$ (7,592,899) (8,098,773) (10,894,754) (11,174,155) (11,803,904) -$ -$ -$ -$ -$ 14,696,132$ 14,529,255$ 17,534,445$ 16,175,525$ 15,883,165$

51.67% 55.74% 62.13% 69.08% 74.32%
80 Measurement date June 30, 2014 June 30, 2015 June 30, 2016 Plan's proportion of the net pension
liability 0.86630% 0.85980% 0.78750%
Plan's proportionate share of the net
pension liability 53,906,245$ 59,018,969$ 68,144,130$ Plan's covered payroll 9,348,967$ 8,616,507$ 9,235,056$ Plan's proportionate share of the
net pension liability as a percentage
of covered payroll 576.60% 684.95% 737.89%
Plan's proportionate share of the
fiduciary net position as a percentage
of the Plan's total pension liability 70.20% 78.40% 74.06% Plan's proportionate share of aggregate
employer contributions 4,567,080$ 4,600,229$ 4,087,020$ Notes to schedule:

Benefit changes:

Changes in assumptions:
* - Fiscal year 2015 was the first year of implementation, therefore only seven years are shown.

CITY OF COSTA MESA, CALIFORNIA
Schedule of Proportionate Share of the Net Pension Liability Fire Safety Plan
Last Ten Fiscal Years*
None in 2020 or 2019. In 2018, demographic assumptions and inflation were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. In 2017, The accounting discount rate reduced from 7.65% to 7.15%. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.50% (net of administrative expense) to 7.65% (without a reduction for pension plan administrative expenses). In 2014, amounts reported were based on the

7.50% discount rate.

The figures above do not include any liability impact that may have resulted from plan changes which occurred after the June 30, 2017 valuation date. This applies for voluntary benefit changes as well as any offers of Two Years Additional Credit (a.k.a. Golden Handshakes).
81 June 30, 2017 June 30, 2018 June 30, 2019 June 30, 2020

0.75976% 0.78122% 0.75901% 0.74962%
75,347,795$ 75,280,246$ 77,775,545$ 81,561,540$
9,116,708$ 9,057,608$ 9,614,585$ 9,034,047$
826.48% 831.13% 808.93% 902.82%

71.74% 73.39% 73.37% 73.12%
5,040,152$ 5,855,909$ 6,865,279$ 7,555,475$
82 Fiscal year ended June 30, 2015 June 30, 2016 June 30, 2017 Contractually required contribution
(actuarially determined) 3,877,163$ 3,286,280$ 3,598,782$ Contributions in relation to the actuarially
determined contributions (4,603,714) (3,786,280) (3,598,782) Contribution deficiency (excess) (726,551)$ (500,000)$ -$ Covered payroll 8,616,507$ 9,235,056$ 9,116,708$
Contributions as a percentage
of covered payroll 53.43% 41.00% 39.47%
Notes to schedule:

Valuation date for June 30, 2021 6/30/2018
Methods and assumptions used to determine contribution rates:

Actuarial Cost Method Entry Age Normal
Amortization method/period For details, see June 30, 2018 Funding Valuation Report.

Asset valuation method
Inflation 2.50%
Salary increases Varies by Entry Age and Service
Payroll growth 2.75%
Investment rate of return
Retirement age
Mortality
Other information:

For changes to previous year’s information, refer to past GASB 68 reports. * -

CITY OF COSTA MESA, CALIFORNIA
Schedule of Contributions
Fire Safety Plan
Last Ten Fiscal Years*
Fiscal year 2015 was the first year of implementation, therefore only seven years are shown.

Fair Value of Assets. For details, see June 30, 2018 Funding Valuation Report.

7.00%, net of pension plan investment and administrative expense; includes inflation.

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 20 years of projected mortality improvement using Scale BB published by the Society of Actuaries.

The probabilities of Retirement are based on the 2017
CalPERS Experience Study for the period from 1997 to 2015. 83 June 30, 2018 June 30, 2019 June 30, 2020 June 30, 2021 5,040,152$ 5,855,909$ 6,865,279$ 7,555,477$
(5,040,152) (5,855,909) (6,865,279) (7,555,477) -$ -$ -$ -$
9,057,608$ 9,614,585$ 9,034,047$ 9,203,544$

55.65% 60.91% 75.99% 82.09%
84 Measurement date June 30, 2016 June 30, 2017
Total pension liability:

Interest on total pension liability 80,950$ 77,214$ Difference between expected and actual experience (19) - Changes in assumptions - (107,900)
Benefit payments, including refunds of
employee contributions (211,287) (208,260)

Net Change in Total Pension Liability (130,356) (238,946) Total pension liability - beginning of year 2,897,028 2,766,672 Total pension liability - end of year (a) 2,766,672$ 2,527,726$ Plan fiduciary net position as a percentage of the
total pension liability 0.00% 0.00%
Covered - employee payroll N/A N/A
Net pension liability as a percentage of
covered payroll N/A N/A
Notes:

The discount rate changed from 3.50% as of June 30, 2018 to 3.15% as of June 30, 2019 measurement date.

The discount rate changed from 3.15% as of June 30, 2019 to 2.45% as of June 30, 2020 measurement date.

The discount rate changed from 2.45% as of June 30, 2020 to 2.10% as of June 30, 2021 measurement date.
* - Fiscal year 2016 was the first year of implementation, therefore only six years are shown.

CITY OF COSTA MESA, CALIFORNIA

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS POLICE 1% SUPPLEMENTAL RETIREMENT PLAN
Last Ten Fiscal Years*
There are no assets accumulated in a trust that meets the criteria of GASB codification P22.101 or P52.101 to pay related benefits for the pension plan. 85 June 30, 2018 June 30, 2019 June 30, 2020 June 30, 2021 82,454$ 79,579$ 69,134$ 55,426$ (9,704) - 80,298 -
(18,938) 46,602 122,873 59,262 (205,233) (205,233) (205,036) (204,445) (151,421) (79,052) 67,269 (89,757) 2,527,726 2,376,305 2,297,253 2,364,522
2,376,305$ 2,297,253$ 2,364,522$ 2,274,765$

0.00% 0.00% 0.00% 0.00%

N/A N/A N/A N/A

N/A N/A N/A N/A
86 Measurement date June 30, 2017 June 30, 2018 June 30, 2019 June 30, 2020 Total OPEB liability
Service cost 1,229,918$ 1,098,145$ 1,110,733$ 1,145,090$ Interest on the total OPEB liability 1,622,474 1,812,069 1,852,821 2,060,874 Actual and expected experience difference - - 2,081,994 (3,128,209) Changes in assumptions (3,959,316) (670,841) 3,420,614 6,606,929 Benefit payments (2,318,709) (2,469,425) (2,751,358) (2,719,892) Net change in total OPEB liability (3,425,633) (230,052) 5,714,804 3,964,792 Total OPEB liability - beginning 56,858,361 53,432,728 53,202,676 58,917,480 Total OPEB liability - ending 53,432,728$ 53,202,676$ 58,917,480$ 62,882,272$ Plan fiduciary net position as a percentage
of the total OPEB liability 0.00% 0.00% 0.00% 0.00%
Covered - employee payroll1
41,026,788$ 43,392,898$ 43,828,141$ 45,645,442$ OPEB liability as a percentage of
covered-employee payroll1
130.24% 122.61% 134.43% 137.76%
Notes to schedule:
1 - OPEB benefits are not based on employee payroll.

In Fiscal Year 2021 the City created a trust that meets the criteria of GASB codification P22.101 or P52.101 to pay related benefits for the OPEB plan. The funds are in a pooled account - balanced index. As of June 30, 2021 the market value of the investments held in the trust was $1,778,220 and is reflected as a contribution subsequent to the measurement date as of Fiscal Year 2021.

Changes in assumptions. The discount rate as of the June 30, 2016 measurement date was 2.85%. The discount rate as of the June 30, 2017 measurement date was 3.40%. The discount rate as of the June 30, 2018 measurement date was 3.50%. The discount rate as of the June 30, 2019 measurement date was 3.51%. The discount rate as of the June 30, 2020 measurement date was 2.66%.

Historical information is required only for measurement periods for which GASB 75 is applicable.

Future years' information will be displayed up to 10 years as information becomes available. * - Fiscal year 2018 was the first year of implementation, therefore only four years are shown.

CITY OF COSTA MESA, CALIFORNIA
Schedule of Changes in Total OPEB Liability and Related Ratios Last Ten Fiscal Years*
87 GENERAL FUND
The General Fund is used to account for all general revenues of the City not specifically levied or collected for special purposes, and for expenditures related to the provision of general services by the City. The GeneralFund is used to account for all resources not required to be accounted for in another fund.
88 Variance with
Final Budget
Original Final Positive Prior Year
Budget Budget Actual (Negative) Actual
Revenues:

Taxes:

Sales tax 54,343,382$ 63,834,760$ 63,834,761$ 1$ 55,866,831$ Property tax 44,168,930 47,340,563 47,502,237 161,674 45,248,448 Transient occupancy tax 4,772,862 4,250,110 4,282,802 32,692 6,587,224 Franchise tax 5,183,672 5,183,672 4,895,574 (288,098) 4,822,964 Business license tax 716,250 897,000 901,604 4,604 899,426 Marijuana business tax 107,864 302,466 326,239 23,773 763,674 Total taxes 109,292,960 121,808,571 121,743,217 (65,354) 114,188,567 Licenses and permits 3,125,304 4,079,929 4,368,740 288,811 5,496,049 Fines and forfeitures 1,487,358 1,322,702 1,055,886 (266,816) 1,400,807 Intergovernmental:

Motor vehicle in-lieu 60,000 60,000 84,182 24,182 91,674 Prop 172 1,035,655 1,035,655 1,151,953 116,298 1,102,506 Advances repayment 556,850 1,032,836 1,581,124 548,288 1,060,817 Grants and other reimbursements 862,023 1,210,861 1,280,562 69,701 841,062 Total intergovernmental 2,514,528 3,339,352 4,097,821 758,469 3,096,059 Charges for services 6,804,044 5,608,722 4,897,671 (711,051) 6,813,680 Rental 2,445,661 4,055,466 4,112,442 56,976 2,901,367 Investment income (loss) 240,000 90,361 (67,681) (158,042) 1,578,983 Miscellaneous 450,247 466,483 859,000 392,517 974,524 Total revenues 126,360,102 140,771,586 141,067,096 295,510 136,450,036 Expenditures:

Current:

General government:

City council 769,749 769,749 644,710 125,039 698,823 City manager:

Administration 4,235,745 3,764,845 3,600,414 164,431 3,186,039 City clerk 1,206,780 1,136,780 917,491 219,289 778,232 Personnel services 1,700,155 1,375,155 1,252,768 122,387 1,413,892 Risk management services 337,909 351,809 298,024 53,785 2,388,330 City attorney 950,000 970,000 968,030 1,970 1,102,739 Financial services 4,485,375 3,926,788 3,578,773 348,015 3,252,348 Information technology 3,714,192 4,010,366 3,760,161 250,205 3,191,741 Facilities and equipment
maintenance 10,871,262 10,857,230 10,905,348 (48,118) 11,091,624 Non-departmental 2,807,294 3,408,857 3,183,528 225,329 2,052,728 Total general government 31,078,461 30,571,579 29,109,247 1,462,332 29,156,496

CITY OF COSTA MESA, CALIFORNIA
General Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year ended June 30, 2021
(With Comparative Data for Prior Year)
See notes to required supplementary information
89 Variance with
Final Budget
Original Final Positive Prior Year
Budget Budget Actual (Negative) Actual
Protection of persons and property:

Police protection 48,334,032 49,918,397 48,905,954 1,012,443 50,525,708 Fire protection 27,747,083 29,458,632 29,042,308 416,324 28,840,324 Building and safety 2,471,053 2,208,231 1,944,663 263,568 2,106,571 Total protection of persons
and property 78,552,168 81,585,260 79,892,925 1,692,335 81,472,603 Community programs:

Community recreation 7,414,732 5,218,599 4,004,633 1,213,966 5,562,004 Planning 2,043,040 1,849,389 1,750,901 98,488 1,981,670 Community improvement 1,367,440 1,216,325 1,077,268 139,057 1,169,632 Development services
administration 444,133 481,614 808,778 (327,164) 851,382 Total community programs 11,269,345 8,765,927 7,641,580 1,124,347 9,564,688 Public services:

Administration 1,983,056 2,015,569 1,967,042 48,527 1,567,609 Engineering 2,210,661 2,180,711 2,151,377 29,334 2,423,039 Transportation 2,736,092 2,758,887 2,755,522 3,365 2,569,353 Total public services 6,929,809 6,955,167 6,873,941 81,226 6,560,001 Debt Service:

Principal - - 15,391 (15,391) 15,392 Total debt service - - 15,391 (15,391) 15,392 Total expenditures 127,829,783 127,877,933 123,533,084 4,344,849 126,769,180 Excess (deficiency) of revenues
over (under) expenditures (1,469,681) 12,893,653 17,534,012 4,640,359 9,680,856 Other financing sources (uses):

Transfers in - 9,173,146 9,173,146 - 1,150,000 Transfers out (8,807,487) (26,855,901) (26,678,565) 177,336 (10,663,687) Total other financing sources (uses) (8,807,487) (17,682,755) (17,505,419) 177,336 (9,513,687) Net change in fund balance (10,277,168) (4,789,102) 28,593 4,817,695 167,169 Fund balance at beginning of year 53,463,668 53,463,668 53,463,668 - 53,296,499 Fund balance at end of year 43,186,500$ 48,674,566$ 53,492,261$ 4,817,695$ 53,463,668$

CITY OF COSTA MESA, CALIFORNIA
General Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the fiscal year ended June 30, 2021
(With Comparative Data for Prior Year)
(continued)
See notes to required supplementary information
90 Variance with
Final Budget
Original Final Positive Prior Year
Budget Budget Actual (Negative) Actual
Revenues:

Intergovernmental 4,874,148$ 4,730,930$ 4,640,209$ (90,721)$ 4,651,870$ Investment income (loss) 45,000 45,000 (11,307) (56,307) 399,539 Miscellaneous - - 71,583 71,583 10,780 Total revenues 4,919,148 4,775,930 4,700,485 (75,445) 5,062,189 Expenditures:

Current:

Public services 4,839,146 11,436,081 2,925,039 8,511,042 2,290,228 Total expenditures 4,839,146 11,436,081 2,925,039 8,511,042 2,290,228 Excess (deficiency) of revenues
over (under) expenditures 80,002 (6,660,151) 1,775,446 8,435,597 2,771,961 Net change in fund balance 80,002 (6,660,151) 1,775,446 8,435,597 2,771,961 Fund balance at beginning of year 11,777,820 11,777,820 11,777,820 - 9,005,859 Fund balance (deficit) at end of year 11,857,822$ 5,117,669$ 13,553,266$ 8,435,597$ 11,777,820$

CITY OF COSTA MESA, CALIFORNIA
Gas Tax Fund - Major Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year ended June 30, 2021
(With Comparative Data for Prior Year)
See notes to required supplementary information
91 CITY OF COSTA MESA, CALIFORNIA
Notes to Required Supplementary Information
Year ended June 30, 2021
(1) Budgetary Data
Annual budgets are legally adopted or amended for all governmental funds on a basis consistent with generally accepted accounting principles, except for the following funds for which annual budgets were not adopted or amended:

Special Revenue Funds:

American Rescue Plan Act
Disaster Fund
Government Grants
Debt Service Funds:

Financing Authority Debt Service Fund
Public Financing Authority Debt Service Fund
The City Council adopts an annual budget submitted by the City Manager prior to the beginning of each new fiscal year. Public hearings are conducted prior to budget adoption by the Council. Supplemental appropriations, when required during the period, are also approved by the City Council. Interfunctional budget adjustments are approved by the City Manager. Expenditures may not legally exceed appropriations at the department functional level. At fiscal year-end all operating budget appropriations lapse. 92 FINANCIAL REPORT

ANNUAL COMPREHENSIVE

SUPPLEMENTARY

SCHEDULES

SUPPLEMENTARY SCHEDULES

MAJOR AND NONMAJOR GOVERNMENTAL FUNDS

SPECIAL REVENUE FUNDS
Special Revenue Funds are used to account for revenue derived from specific taxes or other earmarked revenues sources (other than expendable trust or for major capital projects) that are restricted by law or administrative action to expenditures for specified purposes.

The following funds have been classified as major funds in the accompanying government - wide financial statements:

Gas Tax Fund
Established to account for the receipt and disbursement of funds required to be used for construction and maintenance of the City’s road network system. Financing is provided by the City’s share of State gasoline taxes, including allocations from the Highway Users Tax Account (HUTA) and the Road Maintenance and Rehabilitation Account (RMRA).

The followingfunds have been classified as nonmajor governmental funds in the accompanying fund financial statements:

HOME Program Fund
Established to account for the receipt and disbursement of funds received under the Federal Home Investment Partnership Program of the Department of Housing and Urban Development. These revenues must be expended for acquisition, rehabilitation, and new construction of rental housing.

Air Quality Improvement Fund
Established to account for the receipt and disbursement of the City’s share of funds received under Health & Safety Code 44223 (AB 2766) to finance mobile source air pollution reduction programs consistent with the California Clean Air Act of 1988.

Community Development Fund
This fund accounts for the receipt and disbursement of the Department of Housing and Urban Development grants. These revenues must be expended to accomplish one of the following objectives: elimination of slum or blighted areas to benefit low and moderate income persons, or to meet certain urgent community development needs.

Supplemental Law Enforcement Services Fund (SLESF)
Established to account for the receipt and disbursement of funds received under the State Citizen’s Option for Public Safety (COPS) Program allocated pursuant to Government Code Section 30061 enacted by Assembly Bill 3229, Chapter 134 of the 1996 Statutes. These COPS/SLESF funds are allocated based on population and can only be spent for “front line municipal police services” as per Government Code Section 30061(c)(2).

Rental Rehabilitation Program Fund
Established to account for the receipt and disbursement of grants received from the Department of Housing and Urban Development under Section 17 of the U.S. Housing Act of 1937. These revenues must be expended to provide assistance to rehabilitate primarily privately -owned residential rental property.

Narcotics Forfeiture Fund
Established to account for the receipt and disbursement of narcotic forfeitures received from County, State, and Federal agencies pursuant to Section 11470 of State Health and Safety Code and Federal Statute 21USC Section 881.
93 Local Law Enforcement Block Grant Fund
Established to account for the receipt and disbursement of Federal grant monies provided by the 1998 Appropriations Act, Public Law 105-119. These funds are restricted for projects utilized to reduce crime and improve public safety.

Office of Traffic Safety Fund
Established to account for the receipt and disbursement of Federal grant monies received through the State Office of Traffic Safety. These funds are restricted for operations utilized to enhance traffic safety and to reduce drunk driving within the City.

Government Grants
Established to account for receipt and disbursement of grant monies provided by Federal, State, and County governmental agencies for various programs.

Housing Authority Fund
Established pursuant to the California Health and Safety Code, Section 34176(a). The Housing Authority serves two distinct functions: Low and Moderate Income Housing Asset Fund (LMIHAF) and homeless program. The LMIHAF is to promote affordable housing for families of low and moderate income within the City. The homeless program is to provide temporary assistance including housing to homeless individuals.

Disaster Fund
Established to account for receipt and disbursement of Federal and State grant monies received for COVID-19 mitigation and relief efforts.

American Rescue Plan Act (ARPA)
Established to account for receipt and disbursement of ARPA monies received under the American Rescue Plan Act.

CAPITAL PROJECTS FUNDS
Capital Projects Funds are established to account for financial resources segregated for acquisition and construction of major capital facilities (other than those financed by proprietary funds).

The following have been classified as a major fund in the accompanying government-wide financial statements:

Capital Improvements Fund
Established to account for construction of capital facilities funded by the City’s General Fund and various governmental grants.

The following have been classified as nonmajor funds in the accompanying fund financial statements:

Measure “M2” Fund
Established to account for the receipt and expenditure of the 2006 voter-approved one-half percent sales tax for local transportation improvements. Measure M2 is a 30-year extension of the earlier Measure M program.

Parking Districts Fund
Established under the Vehicle Parking District Law of 1943 to provide vehicle facilities in the downtown area. Funding is provided through specific property tax levies. 94 Golf Course Improvements Fund
Established to account the receipt and disbursement of funds for Costa Mesa Country Club capital improvements. Funding is provided by the receipt of two and one-half percent of monthly gross receipts of green and tournament fees.

Park Development Fund
Established to account for the receipt and disbursement of funds for development and maintenance of the City’s park system. Funding is provided by fees charged to residential and commercial developers.

Drainage Fees Fund
Established to account for the receipt and disbursement of funds for construction and maintenance of the City’s drainage system. Funding is provided by fees charged to residential and commercial developers.

Traffic Impact Fees Fund
Established to account for the receipt and disbursement of funds for transportation improvements Citywide. Funding is provided by fees charged to residential and commercial developers.

Fire System Development Fees Fund
Established to account for receipt and disbursement of development impact fees established by Ordinance 89-1 for future construction of fire protection facilities and equipment for the north Costa Mesa area.

Jack Hammett Sports Complex Fund
Establish to account for receipt and disbursement of funds related to on-going maintenance of Jack Hammett Sports Complex. Funding is provided by the facility’s rental income.

Lions Park Capital Improvements Fund
Established to account for the receipt and disbursement of funds for construction of a new library and renovation of the existing library into a neighborhood community center. Project funding is partially provided by bond proceeds with the remaining balance provided by the Capital Improvements Fund.

DEBT SERVICE FUNDS
Debt Service Funds are used to account for accumulated resources for and payment of general long- term debt.

The following have been classified as nonmajor funds in the accompanying fund financial statements:

Public Financing Authority Debt Service Fund
To accumulate monies for payment of the 2006 Revenue Refunding bonds. The 2006 Revenue Refunding bonds refunded the 1991 Local Agency Revenues Bonds that provided monies for the purchase of the Costa Mesa Community Facilities 1991 Special Tax Bonds.

Financing Authority Debt Service Fund
To accumulate monies for the payment of the 2017 Lease Revenue Bonds. The 2017 Lease Revenue bonds refunded the Public Financing Authority 2007 Certificates of Participation and provided partial funding for the Lion’s Park Project.
95 Supplemental
Air Law Rental
HOME Quality Community Enforcement Rehabilitation
Program Improvement Development Services Program
Assets:

Cash and investments 1,578,173$ 480,353$ -$ 19,386$ 280,942$ Cash and investments with fiscal agents - - - - - Due from other governments 19,307 38,109 265,760 - - Accounts receivable, net - - - - - Interest receivable 3,117 920 - 60 552 Loans receivable, net - - - - - Total assets 1,600,597$ 519,382$ 265,760$ 19,446$ 281,494$ Liabilities:

Accounts payable 27,367$ 17,053$ 135,855$ -$ -$ Accrued liabilities 1,181 - 6,760 2,669 - Retentions payable - - - - - Deposits payable - - - - - Due to other funds - - 35,993 - - Unearned revenue - - - - - Total liabilities 28,548 17,053 178,608 2,669 - Deferred Inflows of Resources:

Unavailable revenues - - - - - Fund Balances:

Restricted for:

Protection of persons or property - - - 16,777 - Community programs 1,572,049 - 87,152 - 281,494 Public services - 502,329 - - - Debt service - - - - - Assigned for:

Protection of persons and property - - - - - Public services - - - - - Unassigned - - - - - Total fund balances (deficit) 1,572,049 502,329 87,152 16,777 281,494 Total liabilities, deferred inflows
of resources, and fund balances 1,600,597$ 519,382$ 265,760$ 19,446$ 281,494$ Special Revenue

CITY OF COSTA MESA, CALIFORNIA
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2021
(With Comparative Data for Prior Year)
96 Capital Projects
Local Law American
Enforcement Office of Rescue Plan
Narcotics Block Traffic Government Housing Disaster Act Forfeiture Grant Safety Grants Authority Fund Fund Measure "M2" 1,274,589$ 34,376$ -$ -$ 3,389,539$ -$ 127,064$ 3,117,464$ - - - - 23,652 - - 78,406 - - 63,644 1,057,414 513,081 158,638 - 1,121,496 - - - - 17,297 - - - 3,329 67 - - 4,940 - 229 7,579 - - - - 650,674 - - - 1,277,918$ 34,443$ 63,644$ 1,057,414$ 4,599,183$ 158,638$ 127,293$ 4,324,945$ -$ -$ 148$ 320,344$ 839,142$ 132,305$ -$ 156,987$ - - - 931 18,264 3,675 - 3,395 - - - 49,281 - - - 218,746 - - - - 26,592 - - - - - 63,497 468,699 - 22,658 - - - - - 148,858 - - 127,293 - - - 63,645 988,113 883,998 158,638 127,293 379,128 - - 212 520,156 - - - 674,180 1,277,918 34,443 - - - - - - - - - - 3,715,185 - - - - - - - - - - 3,271,637 - - - - - - - - - - - - - - - - - - - - - - - - - - (213) (450,855) - - - - 1,277,918 34,443 (213) (450,855) 3,715,185 - - 3,271,637 1,277,918$ 34,443$ 63,644$ 1,057,414$ 4,599,183$ 158,638$ 127,293$ 4,324,945$ Special Revenue
97 Parking Golf Course Park Drainage Traffic
Districts Improvements Development Fees Impact Fees
Assets:

Cash and investments 122,346$ 372,571$ 5,220,375$ 2,390,433$ 5,548,579$ Cash and investments with fiscal agents - - - - - Due from other governments 10 - - - - Accounts receivable, net - 15,678 - - - Interest receivable 240 734 10,229 4,655 10,080 Loans receivable, net - - - - - Total assets 122,596$ 388,983$ 5,230,604$ 2,395,088$ 5,558,659$ Liabilities:

Accounts payable -$ -$ 510,627$ 294,162$ 56,742$ Accrued liabilities - - - - - Retentions payable - - 68,521 4,534 11,703 Deposits payable - - - - - Due to other funds - - - - - Unearned revenue - - - - - Total liabilities - - 579,148 298,696 68,445 Deferred Inflows of Resources:

Unavailable revenues - - - - - Fund Balances:

Restricted for:

Protection of persons or property - - - - - Community programs - - - - - Public services - - - - - Debt service - - - - - Assigned for:

Protection of persons and property - - - - - Public services 122,596 388,983 4,651,456 2,096,392 5,490,214 Unassigned - - - - - Total fund balances (deficit) 122,596 388,983 4,651,456 2,096,392 5,490,214 Total liabilities, deferred inflows
of resources, and fund balances 122,596$ 388,983$ 5,230,604$ 2,395,088$ 5,558,659$ Capital Projects
(With Comparative Data for Prior Year)

CITY OF COSTA MESA, CALIFORNIA
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2021
(Continued)
98 Fire System Jack Hammett Lions Park Public
Development Sports Capital Financing Financing
Fees Complex Improvements Authority Authority 2021 2020 650,266$ 498,197$ 11,926$ -$ -$ 25,116,579$ 30,614,362$ - - 312,803 563,400 1 978,262 1,971,321 - - - - - 3,237,459 1,998,370 - 100,750 - - - 133,725 110,707 1,275 977 - - - 48,983 115,504 - - - - - 650,674 862,534 651,541$ 599,924$ 324,729$ 563,400$ 1$ 30,165,682$ 35,672,798$ -$ -$ -$ -$ -$ 2,490,732$ 1,750,629$ - - - - - 36,875 55,885 - - - - - 352,785 1,457,014 - 15,000 - - - 41,592 465,783 - - - - - 590,847 2,966,367 - - - - - 276,151 2,833,469 - 15,000 - - - 3,788,982 9,529,147 - - - - - 1,194,548 570,381 - - - - - 1,329,138 1,510,346 - - - - - 5,655,880 5,636,628 - - 324,729 - - 4,098,695 5,985,821 - - - 563,400 1 563,401 765,715 651,541 - - - - 651,541 651,497 - 584,924 - - - 13,334,565 13,335,783 - - - - - (451,068) (2,312,520) 651,541 584,924 324,729 563,400 1 25,182,152 25,573,270 651,541$ 599,924$ 324,729$ 563,400$ 1$ 30,165,682$ 35,672,798$ Totals
Debt ServiceCapital Projects
99 Supplemental
Air Law Rental
HOME Quality Community Enforcement Rehabilitation
Program Improvement Development Services Program
Revenues:

Taxes -$ -$ -$ -$ -$ Charges for services - - - - - Fines and forfeitures - - - - - Intergovernmental 41,261 272,415 1,895,058 273,945 - Investment income (loss) 903 (1,404) - 62 19 Rental income - - - - - Miscellaneous 46,325 - - - - Total revenues 88,489 271,011 1,895,058 274,007 19 Expenditures:

Current:

General government - - - - - Protection of persons and property - - - 268,637 - Community programs 193,092 - 1,845,791 - - Public services - 137,450 - - - Debt service:

Principal - - - - - Interest - - - - - Total expenditures 193,092 137,450 1,845,791 268,637 - Excess (deficiency) of revenues
over (under) expenditures (104,603) 133,561 49,267 5,370 19 Other financing sources (uses):

Transfer in - - - - - Transfer out - - - - - Total other financing
sources (uses) - - - - - Net change in fund balances (104,603) 133,561 49,267 5,370 19 Fund balances (deficit) at beginning
of the year 1,676,652 368,768 37,885 11,407 281,475 Fund balances (deficit) at end of year 1,572,049$ 502,329$ 87,152$ 16,777$ 281,494$ (With Comparative Data for Prior Year)
Special Revenue

CITY OF COSTA MESA, CALIFORNIA
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Year ended June 30, 2021
100
Capital Projects
Local Law American
Enforcement Office of Rescue Plan
Narcotics Block Traffic Government Housing Disaster Act Forfeiture Grant Safety Grants Authority Fund Fund Measure "M2" -$ -$ -$ -$ 381,141$ -$ -$ -$ - - - - - - - - 5,460 - - - - - - - - - 273,383 4,015,354 1,041,662 2,322,310 13,113,464 2,820,336 415 1 - 5,887 (2,497) - 381 19,408 - - - - 396,753 - - - - - - - 41,466 - - - 5,875 1 273,383 4,021,241 1,858,525 2,322,310 13,113,845 2,839,744 - - - - - 749,201 1,988,022 - 129,039 - 270,456 619,643 - 954,116 1,735,514 - - - - 2,930,251 3,574,792 2,014,327 134,315 - - - - 985,617 - 1,348,394 82,848 4,862,070 - - - - - - - - - - - - - - - - 129,039 - 270,456 4,535,511 3,574,792 5,066,038 3,940,699 4,862,070 (123,164) 1 2,927 (514,270) (1,716,267) (2,743,728) 9,173,146 (2,022,326) - - - - 1,790,836 5,053,108 - - - - - - - - (9,173,146) - - - - - 1,790,836 5,053,108 (9,173,146) - (123,164) 1 2,927 (514,270) 74,569 2,309,380 - (2,022,326) 1,401,082 34,442 (3,140) 63,415 3,640,616 (2,309,380) - 5,293,963 1,277,918$ 34,443$ (213)$ (450,855)$ 3,715,185$ -$ -$ 3,271,637$ Special Revenue
101
Parking Golf Course Park Drainage Traffic
Districts Improvements Development Fees Impact Fees
Revenues:

Taxes 14,230$ -$ -$ -$ -$ Charges for services - - 766,372 433,329 1,212,500 Fines and forfeitures - - - - - Intergovernmental - - - - - Investment income (loss) (77) (434) 8,022 2,101 (9,495) Rental income - 163,716 - - - Miscellaneous - - 106,966 - 1,855 Total revenues 14,153 163,282 881,360 435,430 1,204,860 Expenditures:

Current:

General government - - - - - Protection of persons and property - - - - - Community programs - - 229,921 - - Public services - 49,820 1,523,234 593,407 404,706 Debt service:

Principal - - - - - Interest - - - - - Total expenditures - 49,820 1,753,155 593,407 404,706 Excess (deficiency) of revenues
over (under) expenditures 14,153 113,462 (871,795) (157,977) 800,154 Other financing sources (uses):

Transfer in - - - - - Transfer out - - - - - Total other financing
sources (uses) - - - - - Net change in fund balances 14,153 113,462 (871,795) (157,977) 800,154 Fund balances (deficit) at beginning
of the year 108,443 275,521 5,523,251 2,254,369 4,690,060 Fund balances (deficit) at end of year 122,596$ 388,983$ 4,651,456$ 2,096,392$ 5,490,214$ Capital Projects
(With Comparative Data for Prior Year)
(Continued)

CITY OF COSTA MESA, CALIFORNIA
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Year ended June 30, 2021
102
Fire System Jack Hammett Lions Park Public
Development Sports Capital Financing Financing
Fees Complex Improvements Authority Authority 2021 2020 -$ -$ -$ -$ -$ 395,371$ 275,032$ - - - - - 2,412,201 2,676,147 - - - - - 5,460 667,077 - - - - - 26,069,188 5,931,174 44 34 1,639 18,700 7 43,716 1,111,178 - 100,751 - - - 661,220 664,888 - - - - - 196,612 100,219 44 100,785 1,639 18,700 7 29,783,768 11,425,715 - - - 5,162 - 2,742,385 1,598,046 - - - - - 3,977,405 1,258,206 - - - - - 10,922,489 4,672,274 - - - - - 9,987,546 5,792,792 - - - 200,000 1,675,000 1,875,000 1,800,000 - - - 15,810 1,139,550 1,155,360 1,230,958 - - - 220,972 2,814,550 30,660,185 20,016,119 44 100,785 1,639 (202,272) (2,814,543) (876,417) (8,590,404) - - - - 2,814,501 9,658,445 5,258,547 - - - - - (9,173,146) (122,540) - - - - 2,814,501 485,299 5,136,007 44 100,785 1,639 (202,272) (42) (391,118) 209,446 651,497 484,139 323,090 765,672 43 25,573,270 25,363,824 651,541$ 584,924$ 324,729$ 563,400$ 1$ 25,182,152$ 25,573,270$ Totals
Debt ServiceCapital Projects
103
Variance with
Final Budget
Final Positive Prior Year
Budget Actual (Negative) Actual
Revenues:

Intergovernmental 505,820$ 41,261$ (464,559)$ 141,966$ Investment income 10,000 903 (9,097) 61,227 Miscellaneous 70,000 46,325 (23,675) 49,818 Total revenues 585,820 88,489 (497,331) 253,011 Expenditures:

Current:

Community programs 580,820 193,092 387,728 241,430 Total expenditures 580,820 193,092 387,728 241,430 Excess (deficiency) of revenues
over (under) expenditures 5,000 (104,603) (109,603) 11,581 Net change in fund balance 5,000 (104,603) (109,603) 11,581 Fund balance at beginning of year 1,676,652 1,676,652 - 1,665,071 Fund balance at end of year 1,681,652$ 1,572,049$ (109,603)$ 1,676,652$

CITY OF COSTA MESA, CALIFORNIA
HOME Program Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year ended June 30, 2021
(With Comparative Data for Prior Year)
104
Variance with
Final Budget
Final Positive Prior Year
Budget Actual (Negative) Actual
Revenues:

Intergovernmental 126,809$ 272,415$ 145,606$ 146,894$ Investment income (loss) 3,547 (1,404) (4,951) 14,257 Total revenues 130,356 271,011 140,655 161,151 Expenditures:

Current:

Public services 400,086 137,450 262,636 62,209 Total expenditures 400,086 137,450 262,636 62,209 Excess (deficiency) of revenues
over (under) expenditures (269,730) 133,561 403,291 98,942 Other financing sources (uses):

Transfer out - - - (122,540) Total other financing sources (uses) - - - (122,540) Net change in fund balance (269,730) 133,561 403,291 (23,598) Fund balance at beginning of year 368,768 368,768 - 392,366 Fund balance (deficit) at end of year 99,038$ 502,329$ 403,291$ 368,768$

CITY OF COSTA MESA, CALIFORNIA
Air Quality Improvement Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year ended June 30, 2021
(With Comparative Data for Prior Year)
105
Variance with
Final Budget
Final Positive Prior Year
Budget Actual (Negative) Actual
Revenues:

Intergovernmental 2,463,107$ 1,895,058$ (568,049)$ 411,358$ Investment income - - - 445 Miscellaneous 30,000 - (30,000) - Total revenues 2,493,107 1,895,058 (598,049) 411,803 Expenditures:

Current:

Community programs 721,643 1,845,791 (1,124,148) 448,742 Public services 1,971,694 - 1,971,694 - Total expenditures 2,693,337 1,845,791 847,546 448,742 Excess (deficiency) of revenues
over (under) expenditures (200,230) 49,267 249,497 (36,939) Net change in fund balance (200,230) 49,267 249,497 (36,939) Fund balance at beginning of year 37,885 37,885 - 74,824 Fund balance (deficit) at end of year (162,345)$ 87,152$ 249,497$ 37,885$

CITY OF COSTA MESA, CALIFORNIA
Community Development Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year ended June 30, 2021
(With Comparative Data for Prior Year)
106
Variance with
Final Budget
Final Positive Prior Year
Budget Actual (Negative) Actual
Revenues:

Intergovernmental 258,111$ 273,945$ 15,834$ 273,684$ Investment income - 62 62 248 Total revenues 258,111 274,007 15,896 273,932 Expenditures:

Current:

Protection of persons and property 245,013 268,637 (23,624) 259,786 Total expenditures 245,013 268,637 (23,624) 259,786 Excess (deficiency) of revenues
over (under) expenditures 13,098 5,370 (7,728) 14,146 Net change in fund balance 13,098 5,370 (7,728) 14,146 Fund balance at beginning of year 11,407 11,407 - (2,739) Fund balance at end of year 24,505$ 16,777$ (7,728)$ 11,407$

CITY OF COSTA MESA, CALIFORNIA
Supplemental Law Enforcement Services Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year ended June 30, 2021
(With Comparative Data for Prior Year)
107
Variance with
Final Budget
Final Positive Prior Year
Budget Actual (Negative) Actual
Revenues:

Investment income 1,000$ 19$ (981)$ 10,139$ Miscellaneous - - - 40,000 Total revenues 1,000 19 (981) 50,139 Excess (deficiency) of revenues
over (under) expenditures 1,000 19 (981) 50,139 Net change in fund balance 1,000 19 (981) 50,139 Fund balance at beginning of year 281,475 281,475 - 231,336 Fund balance at end of year 282,475$ 281,494$ (981)$ 281,475$

CITY OF COSTA MESA, CALIFORNIA
Rental Rehabilitation Program Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year ended June 30, 2021
(With Comparative Data for Prior Year)
108
Variance with
Final Budget
Final Positive Prior Year
Budget Actual (Negative) Actual
Revenues:

Fines and forfeitures -$ 5,460$ 5,460$ 667,077$ Investment income 1,000 415 (585) 57,113 Total revenues 1,000 5,875 4,875 724,190 Expenditures:

Current:

Protection of persons and property 150,710 129,039 21,671 45,523 Total expenditures 150,710 129,039 21,671 45,523 Excess (deficiency) of revenues
over (under) expenditures (149,710) (123,164) 26,546 678,667 Net change in fund balance (149,710) (123,164) 26,546 678,667 Fund balance at beginning of year 1,401,082 1,401,082 - 722,415 Fund balance at end of year 1,251,372$ 1,277,918$ 26,546$ 1,401,082$

CITY OF COSTA MESA, CALIFORNIA
Narcotics Forfeiture Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year ended June 30, 2021
(With Comparative Data for Prior Year)
109
Variance with
Final Budget
Final Positive Prior Year
Budget Actual (Negative) Actual
Revenues:

Investment income -$ 1$ 1$ 1,297$ Total revenues - 1 1 1,297 Excess (deficiency) of revenues
over (under) expenditures - 1 1 1,297 Net change in fund balance - 1 1 1,297 Fund balance at beginning of year 34,442 34,442 - 33,145 Fund balance at end of year 34,442$ 34,443$ 1$ 34,442$

CITY OF COSTA MESA, CALIFORNIA
Local Law Enforcement Block Grand Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year ended June 30, 2021
(With Comparative Data for Prior Year)
110
Variance with
Final Budget
Final Positive Prior Year
Budget Actual (Negative) Actual
Revenues:

Intergovernmental 267,125$ 273,383$ 6,258$ 163,410$ Total revenues 267,125 273,383 6,258 163,410 Expenditures:

Current:

Protection of persons and property 267,125 270,456 (3,331) 166,550 Total expenditures 267,125 270,456 (3,331) 166,550 Excess (deficiency) of revenues
over (under) expenditures - 2,927 2,927 (3,140) Fund balance (deficit) at beginning of year (3,140) (3,140) - - Fund balance (deficit) at end of year (3,140)$ (213)$ 2,927$ (3,140)$

CITY OF COSTA MESA, CALIFORNIA
Office of Traffic Safety Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year ended June 30, 2021
(With Comparative Data for Prior Year)
111
Variance with
Final Budget
Final Positive Prior Year
Budget Actual (Negative) Actual
Revenues:

Taxes 258,209$ 381,141$ 122,932$ 258,209$ Intergovernmental 2,531,464 1,041,662 (1,489,802) - Investment income (loss) 38,000 (2,497) (40,497) 102,263 Rental income 384,000 396,753 12,753 405,379 Miscellaneous 7,000 41,466 34,466 10,401 Total revenues 3,218,673 1,858,525 (1,360,148) 776,252 Expenditures:

Current:

Community programs 5,301,666 3,574,792 1,726,874 2,968,016 Total expenditures 5,301,666 3,574,792 1,726,874 2,968,016 Excess (deficiency) of revenues
over (under) expenditures (2,082,993) (1,716,267) 366,726 (2,191,764) Other financing sources (uses):

Transfers in 1,963,180 1,790,836 (172,344) 2,438,346 Total other financing
sources (uses) 1,963,180 1,790,836 (172,344) 2,438,346 Net change in fund balance (119,813) 74,569 194,382 246,582 Fund balance at beginning of year 3,640,616 3,640,616 - 3,394,034 Fund balance at end of year 3,520,803$ 3,715,185$ 194,382$ 3,640,616$

CITY OF COSTA MESA, CALIFORNIA
Housing Authority Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year ended June 30, 2021
(With Comparative Data for Prior Year)
112
Variance with
Final Budget
Final Positive Prior Year
Budget Actual (Negative) Actual
Revenues:

Intergovernmental 7,456,462$ 5,048,416$ (2,408,046)$ 1,327,189$ Investment income (loss) 50,000 (1,744) (51,744) 304,698 Miscellaneous 50,000 283,801 233,801 1,076,110 Total revenues 7,556,462 5,330,473 (2,225,989) 2,707,997 Expenditures:

Current:

General government - - - 53,640 Protection of persons and property 350,278 157,318 192,960 208,371 Community programs 283,563 14,242 269,321 60,175 Public services 20,467,137 7,247,016 13,220,121 5,863,654 Total expenditures 21,100,978 7,418,576 13,682,402 6,185,840 Excess (deficiency) of revenues
over (under) expenditures (13,544,516) (2,088,103) 11,456,413 (3,477,843) Other financing sources (uses):

Transfers in 7,787,926 7,787,926 - 4,402,680 Transfers out - - - (1,150,000) Total other financing sources (uses) 7,787,926 7,787,926 - 3,252,680 Net change in fund balance (5,756,590) 5,699,823 11,456,413 (225,163) Fund balance at beginning of year 11,487,356 11,487,356 - 11,712,519 Fund balance at end of year 5,730,766$ 17,187,179$ 11,456,413$ 11,487,356$

CITY OF COSTA MESA, CALIFORNIA
Capital Improvements Fund - Major Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year ended June 30, 2021
(With Comparative Data for Prior Year)
113
Variance with
Final Budget
Final Positive Prior Year
Budget Actual (Negative) Actual
Revenues:

Intergovernmental 2,352,152$ 2,820,336$ 468,184$ 3,439,446$ Investment income 25,000 19,408 (5,592) 194,417 Total revenues 2,377,152 2,839,744 462,592 3,633,863 Expenditures:

Current:

Public services 7,986,340 4,862,070 3,124,270 2,524,353 Total expenditures 7,986,340 4,862,070 3,124,270 2,524,353 Excess (deficiency) of revenues
over (under) expenditures (5,609,188) (2,022,326) 3,586,862 1,109,510 Net change in fund balance (5,609,188) (2,022,326) 3,586,862 1,109,510 Fund balance at beginning of year 5,293,963 5,293,963 - 4,184,453 Fund balance (deficit) at end of year (315,225)$ 3,271,637$ 3,586,862$ 5,293,963$

CITY OF COSTA MESA, CALIFORNIA
Measure "M2" Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year ended June 30, 2021
(With Comparative Data for Prior Year)
114
Variance with
Final Budget
Final Positive Prior Year
Budget Actual (Negative) Actual
Revenues:

Taxes 16,233$ 14,230$ (2,003)$ 16,823$ Investment income (loss) 200 (77) (277) 2,368 Total revenues 16,433 14,153 (2,280) 19,191 Excess (deficiency) of revenues
over (under) expenditures 16,433 14,153 (2,280) 19,191 Net change in fund balance 16,433 14,153 (2,280) 19,191 Fund balance at beginning of year 108,443 108,443 - 89,252 Fund balance at end of year 124,876$ 122,596$ (2,280)$ 108,443$

CITY OF COSTA MESA, CALIFORNIA
Parking Districts Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year ended June 30, 2021
(With Comparative Data for Prior Year)
115
Variance with
Final Budget
Final Positive Prior Year
Budget Actual (Negative) Actual
Revenues:

Investment income (loss) 1,500$ (434)$ (1,934)$ 10,387$ Rental income 100,000 163,716 63,716 108,759 Total revenues 101,500 163,282 61,782 119,146 Expenditures:

Current:

Public services 275,000 49,820 225,180 45,143 Total expenditures 275,000 49,820 225,180 45,143 Excess (deficiency) of revenues
over (under) expenditures (173,500) 113,462 286,962 74,003 Net change in fund balance (173,500) 113,462 286,962 74,003 Fund balance at beginning of year 275,521 275,521 - 201,518 Fund balance at end of year 102,021$ 388,983$ 286,962$ 275,521$

CITY OF COSTA MESA, CALIFORNIA
Golf Course Improvements Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year ended June 30, 2021
(With Comparative Data for Prior Year)
116
Variance with
Final Budget
Final Positive Prior Year
Budget Actual (Negative) Actual
Revenues:

Charges for services 672,869$ 766,372$ 93,503$ 1,049,018$ Investment income 25,000 8,022 (16,978) 223,901 Miscellaneous - 106,966 106,966 - Total revenues 697,869 881,360 183,491 1,272,919 Expenditures:

Current:

Community programs 1,210,132 229,921 980,211 304,172 Public services 4,538,499 1,523,234 3,015,265 1,285,782 Total expenditures 5,748,631 1,753,155 3,995,476 1,589,954 Excess (deficiency) of revenues
over (under) expenditures (5,050,762) (871,795) 4,178,967 (317,035) Net change in fund balance (5,050,762) (871,795) 4,178,967 (317,035) Fund balance at beginning of year 5,523,251 5,523,251 - 5,840,286 Fund balance (deficit) at end of year 472,489$ 4,651,456$ 4,178,967$ 5,523,251$

CITY OF COSTA MESA, CALIFORNIA
Park Development Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year ended June 30, 2021
(With Comparative Data for Prior Year)
117
Variance with
Final Budget
Final Positive Prior Year
Budget Actual (Negative) Actual
Revenues:

Charges for services 721,057$ 433,329$ (287,728)$ 898,498$ Investment income 10,000 2,101 (7,899) 78,484 Total revenues 731,057 435,430 (295,627) 976,982 Expenditures:

Current:

Public services 2,423,880 593,407 1,830,473 194,126 Total expenditures 2,423,880 593,407 1,830,473 194,126 Excess (deficiency) of revenues
over (under) expenditures (1,692,823) (157,977) 1,534,846 782,856 Net change in fund balance (1,692,823) (157,977) 1,534,846 782,856 Fund balance at beginning of year 2,254,369 2,254,369 - 1,471,513 Fund balance at end of year 561,546$ 2,096,392$ 1,534,846$ 2,254,369$

CITY OF COSTA MESA, CALIFORNIA
Drainage Fees Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year ended June 30, 2021
(With Comparative Data for Prior Year)
118
Variance with
Final Budget
Final Positive Prior Year
Budget Actual (Negative) Actual
Revenues:

Charges for services 50,000$ 1,212,500$ 1,162,500$ 259,298$ Investment income (loss) 15,000 (9,495) (24,495) 174,805 Miscellaneous - 1,855 1,855 - Total revenues 65,000 1,204,860 1,139,860 434,103 Expenditures:

Current:

Public services 2,069,682 404,706 1,664,976 295,541 Total expenditures 2,069,682 404,706 1,664,976 295,541 Excess (deficiency) of revenues
over (under) expenditures (2,004,682) 800,154 2,804,836 138,562 Net change in fund balance (2,004,682) 800,154 2,804,836 138,562 Fund balance at beginning of year 4,690,060 4,690,060 - 4,551,498 Fund balance at end of year 2,685,378$ 5,490,214$ 2,804,836$ 4,690,060$

CITY OF COSTA MESA, CALIFORNIA
Traffic Impact Fees Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year ended June 30, 2021
(With Comparative Data for Prior Year)
119
Variance with
Final Budget
Final Positive Prior Year
Budget Actual (Negative) Actual
Revenues:

Charges for services -$ -$ -$ 469,333$ Investment income 700 44 (656) 25,318 Total revenues 700 44 (656) 494,651 Net change in fund balance 700 44 (656) 494,651 Fund balance at beginning of year 651,497 651,497 - 156,846 Fund balance at end of year 652,197$ 651,541$ (656)$ 651,497$

CITY OF COSTA MESA, CALIFORNIA
Fire System Development Fees Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year ended June 30, 2021
(With Comparative Data for Prior Year)
120
Variance with
Final Budget
Final Positive Prior Year
Budget Actual (Negative) Actual
Revenues:

Investment income 3,000$ 34$ (2,966)$ 18,998$ Rental income 150,750 100,751 (49,999) 150,750 Total revenues 153,750 100,785 (52,965) 169,748 Net change in fund balance 153,750 100,785 (52,965) 169,748 Fund balance at beginning of year 484,139 484,139 - 314,391 Fund balance at end of year 637,889$ 584,924$ (52,965)$ 484,139$

CITY OF COSTA MESA, CALIFORNIA
Jack Hammett Sports Complex Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year ended June 30, 2021
(With Comparative Data for Prior Year)
121
Variance with
Final Budget
Final Positive Prior Year
Budget Actual (Negative) Actual
Revenues:

Investment income -$ 1,639$ 1,639$ 27,550$ Total revenues - 1,639 1,639 27,550 Expenditures:

Current:

Public services 1,096,600$ - 1,096,600 816,102 Total expenditures 1,096,600 - 1,096,600 816,102 Excess (deficiency) of revenues
over (under) expenditures (1,096,600) 1,639 1,098,239 (788,552) Net change in fund balance (1,096,600) 1,639 1,098,239 (788,552) Fund balance at beginning of year 323,090 323,090 - 1,111,642 Fund balance (deficit) at end of year (773,510)$ 324,729$ 1,098,239$ 323,090$

CITY OF COSTA MESA, CALIFORNIA
Lions Park Capital Improvements Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year ended June 30, 2021
(With Comparative Data for Prior Year)
122

INTERNAL SERVICE FUNDS
Internal Service Funds are used to account for the financing of goods and services provided by one City department to another City department on a cost-reimbursement basis.

Equipment Replacement Fund
Established to account for all motorized equipment used by City departments.

Self Insurance Fund – Workers’ Compensation/General Liability/Unemployment Established to account for receipt and disbursement of funds used to pay worker’s compensation, general liability, and unemployment premiums and claims filed against the City.

Information Technology Replacement Fund
Established to provide funds for future replacements and upgrades to City computer equipment, systems, and supporting infrastructure.
123
Self-Insurance
Workers'
Compensation/
General Information
Equipment Liability/ Technology
Replacement Unemployment Replacement 2021 2020
Assets:

Current assets:

Cash and investments 4,577,772$ 16,753,672$ 6,831,640$ 28,163,084$ 19,634,588$ Accounts receivable - - - - 6,027 Interest receivable 6,030 24,875 11,530 42,435 74,881 Prepaid expenses 1,472,402 183,870 - 1,656,272 - Inventories 131,594 - - 131,594 95,982 Total current assets 6,187,798 16,962,417 6,843,170 29,993,385 19,811,478 Capital assets:

Construction in progress - - 693,456 693,456 391,214 Motorized equipment 14,512,571 - - 14,512,571 14,323,172 Other equipment 3,161,527 - 187,799 3,349,326 2,846,895 Accumulated depreciation (11,073,538) - (67,608) (11,141,146) (9,960,252) Net capital assets 6,600,560 - 813,647 7,414,207 7,601,029 Total assets 12,788,358 16,962,417 7,656,817 37,407,592 27,412,507 Liabilities:

Current liabilities:

Accounts payable 459,434 154,527 34,219 648,180 552,729 Accrued liabilities 23,651 5,885 1,881 31,417 12,575 Notes payable 135,493 - - 135,493 - Claims payable - 3,754,328 - 3,754,328 2,299,557 Total current liabilities 618,578 3,914,740 36,100 4,569,418 2,864,861 Long-term liabilities:

Notes payable 1,336,909 - - 1,336,909 - Claims payable - 13,700,196 - 13,700,196 13,555,439 Total long-term liabilities 1,336,909 13,700,196 - 15,037,105 13,555,439 Total liabilities 1,955,487 17,614,936 36,100 19,606,523 16,420,300 Net Position:

Investment in capital assets 6,600,560 - 813,647 7,414,207 7,601,029 Unrestricted (deficit) 4,232,311 (652,519) 6,807,070 10,386,862 3,391,178 Total net position (deficit) 10,832,871$ (652,519)$ 7,620,717$ 17,801,069$ 10,992,207$ Totals

CITY OF COSTA MESA, CALIFORNIA
Internal Service Funds
Combining Statement of Net Position
June 30, 2021
(With Comparative Data for Prior Year)
124
Self-Insurance
Workers'
Compensation/
General Information
Equipment Liability/ Technology
Replacement Unemployment Replacement 2021 2020
Operating revenues:

Charges for services 2,635,841$ 4,889,338$ -$ 7,525,179$ 7,875,941$ Total operating revenues 2,635,841 4,889,338 - 7,525,179 7,875,941 Operating expenses:

Allocated administrative costs 1,057,039 787,763 161,399 2,006,201 1,488,451 Depreciation 1,182,861 - 33,804 1,216,665 1,279,612 Fuel and repair parts 1,015,493 - - 1,015,493 1,061,932 Materials and supplies - - - - 30,602 Claims and premiums - 5,716,404 - 5,716,404 3,550,804 Total operating expenses 3,255,393 6,504,167 195,203 9,954,763 7,411,401 Operating income (loss) (619,552) (1,614,829) (195,203) (2,429,584) 464,540 Nonoperating revenues (expenses):

Investment income (loss) (34,288) (1,771) (6,339) (42,398) 694,080 Intergovernmental 25,670 - - 25,670 - Contributions 185,553 685 - 186,238 278,521 Gain (loss) on disposal of equipment (163,258) - - (163,258) 2,294 Total nonoperating revenues (expenses) 13,677 (1,086) (6,339) 6,252 974,895 Income (loss) before transfers (605,875) (1,615,915) (201,542) (2,423,332) 1,439,435 Transfers in 2,862,342 4,004,586 2,365,266 9,232,194 1,125,000 Change in net position 2,256,467 2,388,671 2,163,724 6,808,862 2,564,435 Net position (deficit) at beginning of year 8,576,404 (3,041,190) 5,456,993 10,992,207 8,427,772 Net position (deficit) at end of year 10,832,871$ (652,519)$ 7,620,717$ 17,801,069$ 10,992,207$ Totals

CITY OF COSTA MESA, CALIFORNIA
Internal Service Funds
Combining Statement of Revenues, Expenses, and Changes in Net Position Year ended June 30, 2021
(With Comparative Data for Prior Year)
125
Self-Insurance
Workers'
Compensation/
General Information
Equipment Liability/ Technology
Replacement Unemployment Replacement 2021 2020
Cash flows from operating activities:

Cash received from customers and user departments 2,641,868$ 4,889,338$ -$ 7,531,206$ 7,880,985$ Cash payments to suppliers for goods and services (752,282) (4,525,393) (160,147) (5,437,822) (5,252,269) Cash payments to employees for services (1,042,609) (554,515) - (1,597,124) (1,206,551) Net cash provided by (used for) operating activities 846,977 (190,570) (160,147) 496,260 1,422,165 Cash flows from noncapital financing activities:

Cash received from other funds 2,862,342 4,004,586 2,365,266 9,232,194 1,125,000 Cash paid to other funds - - - - (56,271) Intergovernmental revenue received 25,670 685 - 26,355 - Net cash provided by (used for)
noncapital financing activities 2,888,012 4,005,271 2,365,266 9,258,549 1,068,729 Cash flows from capital and related financing activities:

Cash received from disposal of assets - - - - 36,198 Acquisition of capital assets (705,306) - (511,055) (1,216,361) (347,732) Net cash provided by (used for) capital
and related financing activities (705,306) - (511,055) (1,216,361) (311,534) Cash flows from investing activities:

Investment income (loss) (34,284) 22,642 1,690 (9,952) 704,677 Net cash provided by (used for) investing activities (34,284) 22,642 1,690 (9,952) 704,677 Net increase (decrease) in cash and cash equivalents 2,995,399 3,837,343 1,695,754 8,528,496 2,884,037 Cash and cash equivalents at beginning of year 1,582,373 12,916,329 5,135,886 19,634,588 16,750,551 Cash and cash equivalents at end of year 4,577,772$ 16,753,672$ 6,831,640$ 28,163,084$ 19,634,588$ Reconciliation of operating income (loss) to net cash
provided by (used for) operating activities:

Operating income (loss) (619,552)$ (1,614,829)$ (195,203)$ (2,429,584)$ 464,540$ Adjustments to reconcile operating income (loss)
to net cash provided by (used for) operating activities:

Depreciation 1,182,861 - 33,804 1,216,665 1,279,612 (Increase) decrease in accounts receivable 6,027 - - 6,027 5,044 (Increase) decrease in prepaid items - (183,870) - (183,870) 5,828 (Increase) decrease in inventories (35,612) - - (35,612) 17,729 Increase (decrease) in accounts payable 298,823 5,441 - 304,264 (143,917) Increase (decrease) in accrued liabilities 14,430 3,160 1,252 18,842 3,920 Increase (decrease) in claims payable - 1,599,528 - 1,599,528 (210,591) Net cash provided by (used for) operating activities 846,977$ (190,570)$ (160,147)$ 496,260$ 1,422,165$ Totals

CITY OF COSTA MESA, CALIFORNIA
Internal Service Funds
Combining Statement of Cash Flows
Year ended June 30, 2021
(With Comparative Data for Prior Year)
126

FINANCIAL REPORT

ANNUAL COMPREHENSIVE

STATISTICAL SECTION

STATISTICAL SECTION

STATISTICAL SECTION
This part of the City’s annual comprehensive financial report presents detailed information as a context for understanding what information in the financial statements, note disclosures, and required supplementary information says about the government’s overall financial health.

FINANCIAL TRENDS TABLES 1 - 4
These schedules contain financial trend information to help the reader understand how the government’s financial performance and well- being have changed over time.

REVENUE CAPACITY TABLES 5 - 12
These schedules contain revenue information to help the reader assess the government’s most significant local revenue source.

DEBT CAPACITY TABLES 13 - 15
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.

DEMOGRAPHIC AND ECONOMIC INFORMATION TABLES 16 - 17
These schedules offer demographic and economic indicators to help the reader understand the environment within which the
government’s financial activities take place.

OPERATING INFORMATION TABLES 18 - 20
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.
127
TABLE 1
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Governmental Activities
Net investment in capital assets 207,954,876$ 204,884,524$ 211,291,261$ 211,133,458$ 216,195,466$ 219,280,752$ 235,177,233$ 248,255,931$ 248,815,081$ 255,443,158$ Restricted
Protection of Persons and
Property 2,519,015 2,329,840 1,441,906 552,573 1,022,546 217,303 150,169 872,898 1,628,892 1,329,350 Community programs 10,262,006 8,713,244 9,622,339 8,892,751 12,793,475 9,588,998 3,767,377 6,162,341 5,687,227 6,176,036 Public services 28,568,791 26,485,938 21,642,345 17,660,289 15,495,090 20,253,747 13,625,826 14,845,159 17,051,750 18,047,015 Unrestricted 44,741,840 43,798,620 51,403,839 (170,836,260) (159,357,224) (161,805,274) (224,657,548) (241,478,263) (251,417,100) (243,934,825) Total governmental activities
net position 294,046,528$ 286,212,166$ 295,401,690$ 67,402,811$ 86,149,353$ 87,535,526$ 28,063,057$ 28,658,066$ 21,765,850$ 37,060,734$ Source: Government-Wide Financial Statements

NET POSITION BY COMPONENT

LAST TEN FISCAL YEARS
(accrual basis of accounting)

CITY OF COSTA MESA, CALIFORNIA
128
TABLE 2
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Expenses
Governmental Activities:

General government 19,977,655$ 22,655,452$ 23,396,581$ 25,225,607$ 24,631,010$ 28,474,037$ 31,695,402$ 34,008,731$ 32,124,703$ 36,763,868$ Protection of persons and
property 61,788,930 63,383,715 62,634,432 64,184,047 63,956,413 70,786,483 86,777,544 86,440,751 96,625,585 88,643,852 Community programs 4,310,750 6,519,916 6,784,867 10,189,480 4,639,743 12,069,675 10,126,755 16,363,506 17,285,898 22,007,275 Public services 18,873,545 20,508,217 22,768,197 21,549,681 22,498,495 21,415,061 20,062,183 27,937,004 16,269,612 17,663,842 Redevelopment 911,704 - - - - - - - - - Interest on long-term debt 2,683,598 1,726,008 1,273,152 1,210,723 1,081,605 974,233 1,082,361 1,138,694 1,083,190 986,593 Total primary government
expenses 108,546,182 114,793,308 116,857,229 122,359,538 116,807,266 133,719,489 149,744,245 165,888,686 163,388,988 166,065,430 Program Revenues
Governmental Activities:

Charges for services:

Protection of persons and
property 2,635,880 2,739,881 2,338,910 2,299,476 2,707,819 2,819,809 3,805,473 7,267,233 7,461,872 5,497,350 Community programs 5,268,839 5,856,107 6,229,677 7,498,348 8,232,995 7,577,878 9,536,570 8,207,122 4,816,413 5,243,843 Public services 2,861,971 2,646,611 2,680,625 3,089,801 3,721,366 3,232,506 5,046,984 6,179,653 7,096,062 6,372,272 Operating grants and
contributions 8,832,089 8,443,327 8,534,673 8,562,955 4,907,815 4,487,089 7,727,382 9,339,283 10,576,719 32,519,129 Capital grants and
contributions 4,555,065 5,140,960 6,148,876 5,143,592 3,370,260 7,114,471 4,755,573 9,142,040 6,251,484 8,267,623 Total primary government
revenues 24,153,844 24,826,886 25,932,761 26,594,172 22,940,255 25,231,753 30,871,982 40,135,331 36,202,550 57,900,217 Total primary government
net expense (84,392,338)$ (89,966,422)$ (90,924,468)$ (95,765,366)$ (93,867,011)$ (108,487,736)$ (118,872,263)$ (125,753,355)$ (127,186,438)$ (108,165,213)$ General Revenues and Other
Changes in Net Position
Governmental Activities:

Taxes:

Property taxes 21,564,340$ 23,192,755$ 22,984,093$ 24,139,297$ 26,168,612$ 37,925,385$ 40,373,351$ 43,226,688$ 45,548,585$ 47,891,698$ Sales and use taxes 43,077,849 46,743,795 50,329,310 52,117,128 58,524,162 57,591,889 56,971,636 62,689,811 55,866,831 63,738,411 Transient occupancy tax 6,524,510 7,257,695 7,676,090 7,995,154 8,622,505 8,924,854 8,819,617 8,595,417 6,587,224 4,282,802 Franchise taxes 4,471,326 4,818,972 4,891,465 4,885,925 5,060,402 4,593,631 4,965,515 5,042,551 4,822,964 4,895,574 Business tax 888,967 917,633 916,285 954,408 973,521 918,928 919,450 1,093,154 1,663,100 1,227,843 Other intergovernmental
unrestricted 8,594,277 8,814,644 9,229,059 5,660,305 11,209,989 51,340 60,031 55,343 91,674 84,182 Investment income (loss) 1,377,209 640,159 1,772,900 1,692,528 1,871,216 496,650 256,438 4,264,987 4,075,623 (80,831) Miscellaneous 978,394 181,943 495,154 949,533 913,351 1,333,610 1,903,266 1,380,413 1,638,221 1,420,418 Settlements - 1,452,623 121,971 - - - - - - - Extraordinary items:

Gain on transfer of assets
to Successor Agency 9,260,371 - - - - - - - - - (Loss) on advance
to Successor Agency - (11,888,159) - - - - - - - - Total primary government 96,737,243 82,132,060 98,416,327 98,394,278 113,343,758 111,836,287 114,269,304 126,348,364 120,294,222 123,460,097 Change in Net Position 12,344,905$ (7,834,362)$ 7,491,859$ 2,628,912$ 19,476,747$ 3,348,551$ (4,602,959)$ 595,009$ (6,892,216)$ 15,294,884$ Source: Government-Wide Financial Statements
Fiscal Years

CHANGES IN NET POSITION

LAST TEN FISCAL YEARS
(accrual basis of accounting)

CITY OF COSTA MESA, CALIFORNIA
129
TABLE 3
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
General fund
Nonspendable 13,917,262$ 3,137,794$ 3,430,104$ 4,165,795$ 2,486,085$ 2,253,843$ 2,038,518$ 280,195$ 362,189$ 964,846$ Restricted - - - - - - - - - 1,778,220 Committed 16,125,000 16,125,000 16,125,000 16,125,000 16,125,000 16,125,000 16,125,000 23,625,000 25,125,000 25,125,000 Assisgned 10,347,804 10,131,615 10,016,092 11,325,819 13,820,663 13,819,088 13,730,832 8,940,072 9,151,062 8,195,429 Unassigned 7,419,860 16,252,032 20,629,130 22,199,337 32,040,713 30,867,198 23,329,730 20,451,232 18,825,417 17,428,766 Total general fund 47,809,926$ 45,646,441$ 50,200,326$ 53,815,951$ 64,472,461$ 63,065,129$ 55,224,080$ 53,296,499$ 53,463,668$ 53,492,261$ All other governmental funds
Nonspendable -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Restricted 31,441,902 29,302,059 25,097,114 20,914,771 19,309,083 28,056,898 30,108,463 21,753,832 25,676,330 25,200,380 Committed - - - - - - - - - - Assisgned 7,095,166 9,162,682 11,741,220 19,147,805 23,738,380 27,619,480 25,415,708 24,337,823 25,474,636 31,173,285 Unassigned (2,572,973) (2,892,237) (2,288,538) (368,083) (139,064) (248,979) (6,353) (9,453) (2,312,520) (451,068) Total all other governmental funds 35,964,095$ 35,572,504$ 34,549,796$ 39,694,493$ 42,908,399$ 55,427,399$ 55,517,818$ 46,082,202$ 48,838,446$ 55,922,597$ Source: Fund Financial Statements

FUND BALANCES OF GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS
(modified accrual basis of accounting)

CITY OF COSTA MESA, CALIFORNIA
130
TABLE 4
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Revenues
Taxes 76,526,993$ 82,930,849$ 86,797,242$ 90,091,915$ 99,349,202$ 99,464,729$ 110,884,896$ 123,969,423$ 114,463,599$ 122,138,588$ Licenses and permits 1,903,361 1,997,057 2,085,348 2,313,296 2,983,081 2,933,305 3,837,564 5,104,022 5,496,049 4,368,740 Fines and forfeits 3,508,181 4,483,240 3,614,144 1,367,190 1,609,134 1,352,682 1,612,230 2,468,993 2,067,884 1,061,346 Intergovernmental 19,838,941 19,213,168 21,769,293 22,010,125 17,612,288 23,205,265 10,558,481 16,646,740 15,006,292 39,855,634 Charges for services 4,167,896 4,320,932 4,721,191 6,117,030 6,668,445 5,909,112 9,553,421 9,990,454 9,489,827 7,309,872 Rental 3,054,100 2,987,055 3,021,585 3,113,662 3,336,053 3,289,222 3,404,676 3,479,527 3,566,255 4,773,662 Investment income (loss) 1,189,168 533,469 1,712,058 1,771,527 1,775,765 420,561 244,606 3,616,606 3,394,398 (37,016) Return on equity - 2,551,815 - - - - - - - - Settlements - 1,452,623 121,971 - - - - - - - Miscellaneous 1,376,946 892,970 1,177,245 2,206,428 1,679,917 2,170,215 2,081,739 3,226,941 2,161,633 1,410,996 Total revenues 111,565,586 121,363,178 125,020,077 128,991,173 135,013,885 138,745,091 142,177,613 168,502,706 155,645,937 180,881,822 Expenditures
General government 20,974,387 21,982,783 23,893,450 24,699,226 25,102,067 26,518,266 29,048,355 29,219,530 30,808,182 31,851,632 Protection of persons and
property 59,993,364 60,468,091 64,047,209 61,096,404 64,426,376 66,141,703 70,198,327 78,762,212 82,939,180 84,027,648 Community programs 6,125,337 6,166,791 6,442,241 8,821,298 8,019,356 9,410,168 10,888,393 13,265,742 14,297,137 18,578,311 Public services 13,613,312 16,781,751 22,863,385 21,860,252 19,836,633 21,680,495 42,305,565 50,429,478 20,506,675 27,033,542 Redevelopment 911,704 - - - - - - - - - Debt service:

Principal 4,525,739 3,872,050 2,450,000 2,540,000 2,650,000 2,755,000 4,070,000 1,795,261 1,815,392 1,890,391 Interest 2,734,050 1,741,101 1,296,111 1,213,671 1,109,037 992,383 1,041,853 1,298,315 1,230,958 1,155,360 Bond issuance costs - - - - - - 344,858 - - - Payment to refunded
bond escrow agent - - - - - - 2,302,225 - - - Total expenditures 108,877,893 111,012,567 120,992,396 120,230,851 121,143,469 127,498,015 160,199,576 174,770,538 151,597,524 164,536,884 Excess of revenues over
(under) expenditures 2,687,693 10,350,611 4,027,681 8,760,322 13,870,416 11,247,076 (18,021,963) (6,267,832) 4,048,413 16,344,938 Other financing sources
(uses):

Transfers in 5,099,168 6,212,460 8,597,756 14,253,945 12,852,940 16,058,019 12,370,819 15,899,228 10,811,227 26,619,517 Transfers out (5,099,168) (6,212,460) (9,094,260) (14,253,945) (12,852,940) (19,658,019) (18,063,009) (21,148,507) (11,936,227) (35,851,711) Extraordinary gain (loss) 5,645,371 (11,888,159) - - - - - - - - Issuance of debt - - - - - - 29,735,000 153,914 - - Premium on debt issue - - - - - - 3,694,172 - - - Payment to bond
escrow agent - - - - - - (14,530,520) - - - Bond proceeds - - - - - - - - - - Total other financing
sources (uses) 5,645,371 (11,888,159) (496,504) - - (3,600,000) 13,206,462 (5,095,365) (1,125,000) (9,232,194) Net change in fund
balances 8,333,064$ (1,537,548)$ 3,531,177$ 8,760,322$ 13,870,416$ 7,647,076$ (4,815,501)$ (11,363,197)$ 2,923,413$ 7,112,744$ Debt service as a percentage
of noncapital expenditures 7.03% 5.40% 3.44% 3.37% 3.38% 3.18% 5.64% 2.21% 2.19% 2.10% Source: Fund Financial Statements

CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS
(modified accrual basis of accounting)

CITY OF COSTA MESA, CALIFORNIA
131
TABLE 5
Transient Proposition
Fiscal Years Sales Property Occupancy Franchise Business 172 Total 2012 42,234,307 21,564,340 6,524,510 4,471,326 888,967 843,542 76,526,993 2013 45,830,107 23,192,755 7,257,695 4,818,972 917,633 913,688 82,930,850 2014 49,264,634 22,984,093 7,676,090 4,891,465 916,285 1,064,676 86,797,243 2015 51,115,064 24,139,297 7,995,154 4,885,926 954,408 1,002,064 90,091,914 2016 57,593,561 26,168,612 8,622,505 5,060,402 973,521 930,601 99,349,202 2017 56,556,867 27,435,427 8,924,854 4,593,631 918,928 1,035,022 99,464,729 2018 54,656,183 40,458,402 8,819,617 4,965,515 919,450 1,065,729 110,884,896 2019 64,902,009 42,873,901 8,595,417 5,042,551 1,093,154 1,126,008 123,633,040 2020 55,866,831 45,548,585 6,587,224 4,822,964 1,663,100 1,102,506 115,591,210 2021 63,738,411 47,891,698 4,282,802 4,895,574 1,227,843 1,151,953 123,188,281 Source: Required Supplementary Information

CITY OF COSTA MESA, CALIFORNIA

TAX REVENUES BY SOURCE, GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS
(modified accrual basis of accounting)
132
TABLE 6
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Apparel stores 484,036$ 604,936$ 681,348$ 715,097$ 727,073$ 754,197$ 714,478$ 814,593$ 835,594$ 569,776$ General merchandise 568,293 591,832 599,163 615,702 618,702 582,500 565,635 534,747 512,500 315,884 Food stores 93,721 94,377 87,225 88,872 103,225 90,941 88,385 90,178 91,470 92,557 Eating and drinking
establishments 371,523 387,667 421,830 443,384 469,465 496,041 515,683 535,744 556,504 405,696 Building materials 142,575 150,604 180,198 193,248 205,343 224,225 236,497 242,750 251,846 251,117 Auto dealers and supplies 577,755 613,669 670,976 753,804 858,187 924,641 1,006,804 1,153,396 1,230,062 1,149,598 Service stations 240,892 269,067 263,352 245,432 215,707 190,969 200,170 235,572 232,911 161,495 Other retail stores 924,979 961,488 972,383 1,025,424 1,047,009 1,050,063 1,116,930 1,178,337 1,165,897 943,056 All other outlets 778,329 839,005 914,501 1,015,134 1,112,851 1,206,829 1,157,415 1,269,997 1,402,675 1,447,700 4,182,103$ 4,512,645$ 4,790,976$ 5,096,097$ 5,357,562$ 5,520,406$ 5,601,997$ 6,055,314$ 6,279,459$ 5,336,879$ City direct sales tax rate 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% Source: State of California Board of Equalization, California Department of Taxes and Fees Administration, State Controller's Office and the HdL Companies Calendar Years

TAXABLE SALES BY CATEGORY

LAST TEN CALENDAR YEARS
(in thousands of dollars)

CITY OF COSTA MESA, CALIFORNIA
133
TABLE 7
Percentage Percentage
of Total City of Total City
Taxable Taxable Taxable Taxable
Category Sales Rank Sales Sales Rank Sales
All other outlets 1,447,700$ 1 27.13% 778,329$ 2 18.61% Auto dealers and supplies 1,149,598 2 21.54% 577,755$ 3 13.81% Other retail stores 943,056 3 17.67% 924,979$ 1 22.12% Apparel stores 569,776 4 10.68% 484,036$ 5 11.57% Eating and drinking establishments 405,696 5 7.60% 371,523$ 6 8.88% General merchandise 315,884 6 5.92% 568,293$ 4 13.59% Building materials 251,117 7 4.71% 142,575$ 8 3.41% Service stations 161,495 8 3.03% 240,892$ 7 5.76% Food stores 92,557 9 1.73% 93,721$ 9 2.24% Source: State of California Board of Equalization, California Department of Taxes and Fees Administration, State Controller's Office and the HdL Companies

CITY OF COSTA MESA, CALIFORNIA

PRINCIPAL SALES TAX REMITTERS BY CATEGORY

CURRENT YEAR AND NINE YEARS AGO
2020 2011
134
TABLE 8
City Orange State of Total
Local County California Sales Tax
Fiscal Years Rate Rate Rate Rate
2012 1.00 0.50 6.25 7.75 2013 1.00 0.50 6.50 8.00 2014 1.00 0.50 6.50 8.00 2015 1.00 0.50 6.50 8.00 2016 1.00 0.50 6.50 8.00 2017 1.25 0.50 6.00 7.75 2018 1.25 0.50 6.00 7.75 2019 1.25 0.50 6.00 7.75 2020 1.25 0.50 6.00 7.75 2021 1.25 0.50 6.00 7.75 Source: State of California Board of Equalization

CITY OF COSTA MESA, CALIFORNIA

DIRECT AND OVERLAPPING SALES TAX RATES

LAST TEN FISCAL YEARS
135
TABLE 9
Fiscal Year Taxes Levied Collected for
Ended for the Percentage Subsequent Percentage
June 30, Fiscal Year Amount of Levy Years (2) Amount of Levy (1) 2012 20,574,309 19,958,891 97.01% 408,220 20,367,111 98.99% 2013 21,112,082 20,599,679 97.57% 382,281 20,981,960 99.38% 2014 22,178,464 21,732,926 97.99% 285,325 22,018,251 99.28% 2015 23,405,838 22,897,171 97.83% 242,634 23,139,805 98.86% 2016 24,960,369 24,222,713 97.04% 227,104 24,449,817 97.95% 2017 26,330,538 25,640,344 97.38% 216,963 25,857,308 98.20% 2018 27,825,846 27,272,459 98.01% 198,624 27,471,083 98.73% 2019 29,820,941 29,186,740 97.87% 196,710 29,383,450 98.53% 2020 31,300,931 30,714,805 98.13% 214,204 30,929,009 98.81% 2021 32,769,949 32,203,394 98.27% 294,030 32,497,424 99.17% (1) The Percentage of Levy may exceed 100% if the amounts collected for subsequent years exceed the delinquency. (2) The County of Orange only makes this data available by collection year. Data by levy year is not available.

Source: Orange County Assessor 2020/2021 Combined Tax Rolls

CITY OF COSTA MESA, CALIFORNIA
Fiscal Year of the Levy Total Collections to Date
Collected within the

PROPERTY TAX LEVIES AND COLLECTIONS

LAST TEN FISCAL YEARS
136
TABLE 10
Total Taxable Estimated Taxable Assessed
Residential Commerical Industial Miscellaneous Assessed Total Direct Actual Taxable Value as a Percentage Fiscal Years Property Property Property Property Value Tax Rate Value (1) of Actual Taxable Value 2012 8,557,101,277 3,394,223,104 1,100,996,492 1,065,596,839 14,117,917,712 0.17226% 14,117,917,712 100.00% 2013 8,704,306,093 3,479,681,880 1,122,815,201 1,070,250,329 14,377,053,503 0.17288% 14,377,053,503 100.00% 2014 9,101,889,466 3,566,114,710 1,117,794,289 1,140,508,581 14,926,307,046 0.15040% 14,926,307,046 100.00% 2015 9,745,389,688 3,633,678,888 1,126,437,386 1,206,217,946 15,711,723,908 0.15035% 15,711,723,908 100.00% 2016 10,456,976,124 3,766,616,981 1,190,970,066 1,118,171,362 16,532,734,533 0.15038% 16,532,734,533 100.00% 2017 11,033,602,522 3,918,807,590 1,336,961,702 1,180,683,099 17,470,054,913 0.15014% 17,470,054,913 100.00% 2018 11,685,011,850 4,096,390,455 1,500,236,782 1,222,877,713 18,504,516,800 0.15009% 18,504,516,800 100.00% 2019 12,557,043,739 4,473,583,090 1,646,413,988 1,223,132,784 19,900,173,601 0.15002% 19,900,173,601 100.00% 2020 13,389,240,208 4,687,990,535 1,744,806,502 1,290,509,110 21,112,546,355 0.14848% 21,112,546,355 100.00% 2021 14,143,690,438 4,858,631,950 1,822,103,130 1,295,199,231 22,119,624,749 0.14856% 22,119,624,749 100.00% (1) In 1978 the voters of the State of California passed Proposition 13 which limited taxes to a total maximum rate of 1%, based upon the assessed vaule of the property being taxed. Each year, the assessed value of property may be increased by an inflation factor (limited to a maximum of 2%). With few exceptions, property is only reassessed as a result of new construction or at the purchase price (market value) or economic value of the property sold. The assessed valuation data shown above, represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above. Therefore, the estimated actual taxable value equals the total taxable assessed value.

Source: HdL Coren & Cone, Orange County Assessor 2011/2012- 2020/2021 Combined Tax Rolls.

CITY OF COSTA MESA, CALIFORNIA

ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY

LAST TEN FISCAL YEARS
(modified accrual basis of accounting)
137
TABLE 11
Total County of School Special
Basic Redevelopment Redevelopment Direct Orange District Districts Fiscal Year Rate Debt Service (2) Program Rate (1) Debt Debt Debt 2012 0.14879 0.00370 1.00000 0.17226 0.36649 0.48300 0.00535 2013 0.14879 - - 0.17288 0.36649 0.48300 0.00535 2014 0.14879 - - 0.15040 0.36649 0.48300 0.00535 2015 0.14879 - - 0.15035 0.36649 0.48300 0.00515 2016 0.14879 - - 0.15038 0.36649 0.48300 0.00515 2017 0.14879 - - 0.15014 0.36649 0.48300 0.00515 2018 0.14879 - - 0.15009 0.36649 0.48300 0.00515 2019 0.14879 - - 0.15002 0.36649 0.48300 0.00515 2020 0.14879 - - 0.14848 0.36649 0.48300 0.00515 2021 0.14879 - - 0.14856 0.36649 0.48300 0.00515 (1) Per the Government Finance Officers Association, the definition of "total direct rate" is as follows:
"The weighted average of all individual rates applied by the government preparing the statistical section" The "total direct rate" for the City of Costa Mesa is a weighted average derived by dividing total City revenue by taxable assessed value.
(2) As of February 1, 2012, the Successor Agency to the former Costa Mesa Redevelopment Agency is responsible for the outstanding Redevelopment debt.

Source: HdL Coren & Cone, Orange County Assessor 2011/2012 - 2020/2021 Combined Tax Rolls.

City Direct Rates Overlapping Rates

CITY OF COSTA MESA, CALIFORNIA

DIRECT AND OVERLAPPING PROPERTY TAX RATES

LAST TEN FISCAL YEARS
138
TABLE 12
Percentage Percentage
of Total City of Total City
Property Property Property Property
Tax Tax Tax Tax
Taxpayer Revenue Rank Revenue Revenue Rank Revenue
The Irvine Company LLC 723,793$ 1 1.99% 390,145$ 1.61% Trust Costa Mesa Courtyards LLC 568,259 2 1.56% 378,322 1.56% Triangle Center LLC 556,282 3 1.53% 373,056 1.54% Behringer Harvard Pacifica Project 524,677 4 1.44% 316,261 1.31% South Coast Plaza 511,230 5 1.40% 308,005 1.27% 1901 Newport LLC Royal Street 420,106 6 1.15% 255,674 1.06% PR II MCC South Coast Property Owner 393,506 7 1.08% 238,639 0.99% United Dominion Realty LP 312,593 8 0.86% 212,834 0.88% Automobile CLUB of Southern CA 222,962 9 0.61% 192,764 0.80% Advanced Group 245,987 10 0.68% 191,320 0.79%
Total 4,479,395$ 12.30% 2,857,020$ 11.81%
Source: HdL Coren & Cone, Orange County Assessor 2020/2021 & 2011/2012 Combined Tax Rolls.

CITY OF COSTA MESA, CALIFORNIA

PRINCIPAL PROPERTY TAX PAYERS

CURRENT YEAR AND NINE YEARS AGO
2020-2021 2011-2012
139
TABLE 13
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
General bonded debt outstanding
General oligation bonds -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Redevelopment bonds (1) 3,615,000 - - - - - - - - - Total 3,615,000$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Percentage of taxable
assessed value 0.0256% 0.0000% 0.0000% 0.0000% 0.0000% 0.0000% 0.0000% 0.0000% 0.0000% 0.0000% Per capita 8.43$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Less: Amounts set aside to
repay general debt 704,300 - - - - - - - - - Total net debt applicable to
debt limit 2,910,700 - - - - - - - - - Legal debt limit
(3.75% of Assessed Value) 575,152,015 585,780,638 607,508,126 637,377,201 669,713,004 705,606,516 743,516,945 796,252,660 842,737,426 881,515,407 Legal debt margin 572,241,315 585,780,638 607,508,126 637,377,201 669,713,004 705,606,516 743,516,945 796,252,660 842,737,426 881,515,407 Legal debt margin as a
percentage of the debt limit 99.49% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% (1) As of February 1, 2012, the Successor Agency to the former Costa Mesa Redevelopment Agency is responsible for the outstanding Redevelopment debt.

Source: City of Costa Mesa Finance Department and Orange County Assessor 2020/2021 combined tax rolls

FISCAL YEARS

CITY OF COSTA MESA, CALIFORNIA

RATIO OF GENERAL BONDED DEBT OUTSTANDING AND LEGAL DEBT MARGIN

LAST TEN FISCAL YEARS
140
TABLE 14
Percentage
Fiscal Year of Total Certificates Lease Total Percentage Ended Redevelopment Taxable Per Revenue of Loan Purchase Primary of Personal Per June 30, Bond (1) Assessed Value Capita Bonds (2) Participation Payable Financing Government Income Capita 2012 3,615,000 0.0256% 8.43 10,490,000 25,140,000 - 1,057,907 40,302,907 1.11% 1,224.86 2013 - 0.0000% - 8,140,000 23,875,000 - 611,729 32,626,729 0.89% 999.53 2014 - 0.0000% - 7,005,000 22,560,000 - 415,395 29,980,395 0.79% 886.84 2015 - 0.0000% - 5,830,000 21,195,000 - - 27,025,000 0.73% 832.10 2016 - 0.0000% - 4,600,000 19,775,000 - - 24,375,000 0.64% 732.66 2017 - 0.0000% - 3,325,000 18,295,000 - - 21,620,000 0.57% 649.85 2018 - 0.0000% - 34,103,345 - - - 34,103,345 0.77% 991.21 2019 - 0.0000% - 32,170,580 - 143,653 - 32,314,233 0.78% 906.39 2020 - 0.0000% - 30,222,813 - 128,261 - 30,351,074 0.69% 788.54 2021 - 0.0000% - 28,200,046 - 112,870 1,472,402 29,785,318 0.64% 721.65 (1) As of February 1, 2012, the Successor Agency to the former Costa Mesa Redevelopment Agency is responsible for the outstanding Redevelopment debt. (2) Amount includes the unamortized Bond Premium.

Source: City of Costa Mesa Finance Department

CITY OF COSTA MESA, CALIFORNIA

RATIOS OF OUTSTANDING DEBT BY TYPE

LAST TEN FISCAL YEARS
Other Governmental Activities DebtGeneral Bonded Debt
141
TABLE 15
Estimated
Share of
Estimated Direct and
Debt Percentage Overlapping
Governmental Unit Outstanding Applicable (2) Debt
Overlapping Debt
Newport Mesa Unified School District 240,672,640$ 26.472% 63,710,765$ Coast Community College District 936,924,018 13.372% 125,285,480 Santa Ana Unified School District 351,580,064 3.352% 11,784,085 Rancho Santiago Community College District 215,876,120 1.465% 3,163,146 Rancho Santiago Community College District SFID No. 1 167,375,000 2.730% 4,570,040 Metropolitan Water District 5,385,044 3.373% 181,639 Total Overlapping Debt 1,917,812,886 208,695,155 City Direct Debt
Costa Mesa Public Financing Authority 2006 Revenue Refunding Bonds/ Costa Mesa Community Facilities District No. 91-1 21,000$ 100% 21,000$ City of Costa Mesa General Fund Obligations (1) 27,990,046 100% 27,990,046 Loan Payable 112,870 100% 112,870
Total Direct Debt 28,123,916 28,123,916
Total Direct and Overlapping Debt 236,819,071$
(1) See Note 7 in Finance Statement for more information about the City's direct debt. The amount included the unamortized Bond Premium $3,140,046
(2) Overlapping governments are those that coincide with the geographic boundaries of the city. The percentage of overlapping debt applicable is estimated by using taxable assessed values. Applicable percentages were estimated by determining the portion of another governmental unit’s taxable assessed value that is within the city’s boundaries and dividing it by each unit’s total taxable assessed value.

Source: HdL Coren & Cone, Orange County Assessor and Auditor Combined 2020/21 Lien Data Tax Rolls.

AS OF JUNE 30, 2021

DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT

CITY OF COSTA MESA, CALIFORNIA
142
TABLE 16
Personal
Income Per Capita Orange County
(thousands Personal Median School Unemployment
Year Population (2)
of dollars) Income (1)
Age
(1) Enrollment (3) Rate (4)
2012 110,757 3,644,348 32,904 33 21,619 7.90% 2013 111,358 3,711,117 33,326 33 21,944 6.10% 2014 111,846 3,650,877 32,642 34 21,683 5.20% 2015 111,835 3,780,694 33,806 34 21,540 4.30% 2016 114,603 3,722,083 32,478 34 21,392 4.40% 2017 114,044 3,794,132 33,269 34 20,801 3.80% 2018 115,296 3,966,839 34,406 35 20,853 3.30% 2019 115,830 4,129,505 35,651 35 20,316 3.00% 2020 114,778 4,417,883 38,490 35 20,008 13.60% 2021 112,780 4,654,963 41,274 35 20,173 6.50% Source: (1) - City of Costa Mesa Finance Department / and The HdL Companies (2) - California State Department of Finance
(3) - Newport-Mesa Unified School District.
(4) - State of California Employment Development Department as of June 30th each year.

CITY OF COSTA MESA, CALIFORNIA

DEMOGRAPHIC AND ECONOMIC STATISTICS

LAST TEN CALENDAR YEARS
143
TABLE 17
Percentage Percentage
of Total City of Total City
Employer Employees Rank Employment Employees Rank Employment Experian Information Solutions, Inc. 3,700 1 5.74% 3,700 5.74% Coast Community College District 2,900 2 4.50% 2,900 4.50% Orange Coast College 1,900 3 2.95% 1,900 2.95% Auto Club Enterprises 1,376 4 2.14% 0.00%
Contech Engnered Solutions LLC 1,288 5 2.00% 0.00% Westar Capital Assoc II LLC  1,184 6 1.84% 0.00% Western Medical Center    1,052 7 1.63% 0.00%
Gary D. Nelson Assoc., Inc   935 8 1.45% 0.00%
Deloitte Consulting LLC    800 9 1.24% 0.00% Dynamic Cooking                   700 10 1.09% 0.00%

0.00%
Source: City of Costa Mesa department of Economic Development, Dunn & Bradstreet, State of California Employment Development Department

CITY OF COSTA MESA, CALIFORNIA

PRINCIPAL EMPLOYERS

CURRENT YEAR AND NINE YEARS AGO
2020-2021 2011-2012
144
TABLE 18
Function/Program 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 General Government
Number of residents served via
public services programs 2,023 1,500 1,000 1,500 785 750 700 700 700 700 Accounts payable checks issued 9,634 9,561 9,506 9,764 9,182 9,031 8,734 8,857 8,604 7,269 Total printshop photocopies produced 2,746,559 1,554,927 1,691,606 1,806,965 1,619,784 1,749,460 1,996,486 1,699,007 1,116,892 1,250,000 Protection of persons and property
Police protection
Emergency calls 1,128 1,160 1,180 1,330 N/A 1,000 1,029 882 876 847 Calls responded to within 5 minutes 76% 80% 82% 77% N/A 66% 72% 75% 72% 76% Assigned theft cases 1,951 1,900 1,000 400 900 1,200 N/A N/A N/A N/A Percentage of theft cases cleared 34% 25% 40% 40% 40% 60% 74% 64% 52% 31% Assigned burglary cases 1,452 1,460 800 350 400 200 N/A N/A N/A N/A Percentage of burglary cases
cleared 21% 25% 40% 40% 40% 70% 69% 64% 50% 38%
Case and arrest reports processed 15,324 21,921 18,133 15,128 14,584 19,310 19,319 18,382 19,079 18,794 Fire protection
Number of calls for service 9,800 10,000 11,300 11,100 12,955 12,721 12,936 10,572 10,637 10,073 Fire related responses 110 200 218 214 238 271 218 261 245 246 Emergency medical aid responses 6,400 7,000 7,818 7,250 9,366 9,374 9,603 9,639 9,454 8,960 Community Programs
Number of program participants at
the Downtown Recreation Center 32,404 42,411 31,018 31,521 33,446 34,939 38,247 42,000 28,000 21,150 Over-the-counter plan checks
reviewed within five working days 319 338 337 225 240 240 522 630 630 630 Inspection requests with 24 hours 14,345 14,345 17,460 22,560 29,100 31,040 29,585 29,100 18,966 28,012 Complaint response within two
working days 90% 90% 90% 90% 90% 90% 90% 90% 90% 90%
Public services
Number of trees trimmed annually 7,206 7,882 8,140 7,700 7,750 6,250 6,250 6,250 8,750 5,291 Number of catch basins cleaned
annually 1,165 1,165 1,165 1,165 1,165 1,115 1,100 1,100 1,165 1,165 Source: City of Costa Mesa Finance Department
Fiscal Years

CITY OF COSTA MESA, CALIFORNIA

OPERATING INDICATORS BY FUNCTION/PROGRAM

LAST TEN FISCAL YEARS
145
TABLE 19
Function/Program 2012 2013 (1) 2014 2015 (2) 2016 2017 2018 2019 2020 2021 General Government
City council 5.0 6.0 6.0 6.0 6.0 6.0 6.0 8.0 10.5 10.5 City Manager's office 15.75 22.00 29.75 38.41 33.30 37.59 39.74 41.60 36.48 37.00 Financial services 17.75 27.21 27.21 20.21 21.71 21.50 22.25 22.50 22.00 23.00 Information technology - - - 10.50 12.50 12.94 13.16 12.16 13.70 15.50 Administrative services 96.47 - - - - - - - - - Development services 26.50 27.59 27.00 37.25 43.50 46.23 45.95 44.80 48.79 51.64 Park and community
services - - - 53.43 70.70 74.00 80.54 87.23 96.71 95.67 Protection of persons and property
Police protection 220.68 235.60 237.68 236.41 232.63 234.46 235.60 233.76 235.17 235.86 Fire protection 96.44 95.44 95.75 84.75 87.25 87.50 94.00 94.00 95.00 96.25 Public services 79.25 114.99 124.43 83.37 81.77 84.82 77.47 72.05 76.70 76.50 557.84 528.83 547.82 570.33 589.36 605.04 614.71 616.10 635.05 641.92 (1) City's Administrative Servies Department was reorganized. Divisions previously allocated to that department such as Human Resources, Central Services, and Risk Management were combined with the City Manager's Office and the Information Technology Division was combined with the Finance Department. In addition, the Recreation division was combined with Public Service Department. (2) The Information Technology was separated from the Finance Department. and Park & Community Services Department was separated from Public Service Department.

Source: City of Costa Mesa Finance Department

CITY OF COSTA MESA, CALIFORNIA

FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM

LAST TEN FISCAL YEARS
146
TABLE 20
Function/Program 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Police
Stations/substations 2 2 2 2 2 2 2 2 2 2 Fire
Fire stations 6 6 6 6 6 6 6 6 6 6 Other public works
Streets (lane miles) 525.0 525.0 529.0 529.0 529.0 529.0 535.6 535.6 535.6 540.0 Streetlights 6,674 6,674 6,674 6,674 6,674 6,674 6,674 6,881 6,869 6,869 Traffic signals 124 123 123 124 124 124 125 126 127 128 Parks and recreation
Acres of open space 1,957 1,957 1,957 1,957 1,957 1,957 1,957 1,957 2,067 2,067 Park sites 30 30 30 31 31 31 31 31 32 32 Baseball/softball diamonds 6 5 5 6 6 6 6 6 6 6 Soccer/football fields 8 10 10 10 10 10 10 10 6 6 Community centers 3 3 3 4 4 3 3 3 4 4 Wastewater (miles)
Sanitary sewers 325.7 325.7 325.7 325.7 325.7 325.7 325.7 325.7 325.7 325.7 Storm sewers 45.5 45.5 45.5 45.5 45.5 45.5 45.5 45.5 45.5 64.7 Source: City of Costa Mesa Finance Department
Fiscal Years

CITY OF COSTA MESA, CALIFORNIA

CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM

LAST TEN FISCAL YEARS
147