Agenda packet, regular meeting — Laguna Hills City Council, May 23, 2023 (part 1 of 2)

CITY OF LAGUNA HILLS

CITY COUNCIL/PLANNING AGENCY

REGULAR MEETING AGENDA
Tuesday, May 23, 2023 – 7:00 PM
(Closed Session at 6:00 PM when scheduled)
Janine Heft, Mayor
Dave Wheeler, Mayor Pro Tempore Don Caskey, Council Member Erica Pezold, Council Member Joshua Sweeney, Council Member Location: City Council Chamber, 24035 El Toro Road, Laguna Hills, CA 92653 In Person Public Comments: Any person wishing to address the City Council/Planning Agency on any matter, whether or not it appears on this Agenda, is asked to complete a pink “Request to Speak” form available on the table at the back of the Chamber and submit the form to the City Clerk. The Request to Speak form assists the Mayor in ensuring that all persons wishing to address the City Council are recognized and ensures accurate identification of meeting participants in the City Council/Planning Agency Minutes. Completion of the form is voluntary.

It is City policy to limit public testimony to up to three minutes per person, an overall time limit of ten minutes for any one subject, and a total time limit of thirty minutes for Public Comments.

If you are commenting on an Agenda item, your comments will be heard at the time that item is scheduled on the Agenda. If you are addressing the City Council on an item not listed on the Agenda, the City Council is prohibited by law from discussing or taking any action on that item Submission of Electronic Public Comments: Those wishing to make electronic public comments may submit their comments by email to the City Clerk at [email protected], by 5:00 p.m. on Tuesday, May 23, 2023. In the subject line of the email, please state your name and the item number you are commenting on. Any public comment received that does not specify a particular agenda item number will be announced during the general public comment portion of the agenda. All comments received by 5:00 p.m. on the date of the meeting will be provided to the City Council and will be provided for public inspection at the meeting. During the applicable agenda item, the City Clerk will announce the name of the sender and subject matter of all electronic comments received by 5:00 p.m. on Tuesday, May 23, 2023. Email comments will NOT be read by the City Clerk during the meeting. Electronic public comments may only be submitted via email and comments via text and social media (Facebook, Twitter, etc.) will not be accepted.

Please note: The City Council is making every effort to follow the spirit and intent of the Brown Act and other applicable laws regulating the conduct of public meetings in order to maximize transparency and public access. For questions or assistance, please contact the City Clerk’s Office at (949) 707-2635 or via email at [email protected].

City of Laguna Hills City Council/Planning Agency Tuesday, May 23, 2023 Regular Meeting Agenda
2 GENERAL BUSINESS - CONVENING AT 7:00 PM

CALL TO ORDER
Resolution No. 96-04-09-1 established rules of decorum for public meetings held by the City of Laguna Hills. Resolution No. 96-04-09-1 is available on the table at the back of the City Council Chamber.

INVOCATION:

PLEDGE OF ALLEGIANCE: Council Member Pezold

ROLL CALL OF CITY COUNCIL MEMBERS

1. PRESENTATIONS AND PROCLAMATIONS

1.1 Valencia Elementary School Student Liaison Report
Recommendation: That the City Council present Certificates of Appointment and receive a report from Valencia Elementary School Student Liaisons Alex Kim and Catherine Karsaz.

1.2 Laguna Hills High School Student Liaison Report
Recommendation: That the City Council receive an oral report from Laguna Hills High School 2023 Spring Student Liaison Alexa Richter.

1.3 Certificates of Recognition for Laguna Hills High School Student Liaisons Alexa Richter and Audrey Masson
Recommendation: That Mayor Heft present Certificates of Recognition to Alexa Richter and Audrey Masson recognizing their service as the Laguna Hills High School 2023 Spring Student Liaisons.

1.4 Certificates of Recognition for Outgoing Parks and Recreation Commissioners Dan Cooper and Neel Patel and Outgoing Traffic Commissioner Chris Bieber
Recommendation: That Mayor Heft present Certificates of Recognition to Dan Cooper, Neel Patel, and Chris Bieber recognizing their service to the City.

1.5 Oaths of Office and Certificates of Appointment for Three Parks and Recreation Commissioners and One Traffic Commissioner
Recommendation: That Mayor Heft administer the Oaths of Office and present Certificates of Appointment to Parks and Recreation Commissioners Chris Bieber, Marc Trocchio, and Michael Zozaya and Traffic Commissioner Neel Patel.

City of Laguna Hills City Council/Planning Agency Tuesday, May 23, 2023 Regular Meeting Agenda
3 2. SCHEDULE OF FUTURE EVENTS

2.1 Schedule of Future Events
Recommendation: That the City Clerk announce the upcoming meetings and events.

3. PUBLIC COMMENTS
This is the time to address the City Council on any matter not listed on this Agenda that is within the subject matter jurisdiction of the City Council. Public Comments are limited to three minutes per person, an overall time limit of ten minutes for any one subject, and a total time limit of thirty minutes.

4. CONSENT CALENDAR
All matters listed under “CONSENT CALENDAR” are considered to be routine and will be enacted by one motion approving the recommendation listed on the Agenda. There will be no separate discussion unless Members of the City Council or Staff request specific items be removed from the Consent Calendar.

4.1 Waive Reading in Full of all Ordinances and Resolutions on the Agenda Recommendation: That the City Council waive reading in full of all ordinances and resolutions on the agenda and declare that said titles which appear on the public agenda shall be determined to have been read by title and further reading waived.

4.2 Approval of Minutes for May 9, 2023, Regular Meeting Recommendation: That the City Council approve the City Council Minutes for the May 9, 2023, Regular Meeting.

4.3 Approval of Minutes for May 16, 2023, Special Meetings Recommendation: That the City Council approve the City Council Minutes for the May 16, 2023, Special Meetings.

4.4 Ratification of May 23, 2023, Warrant Register
Recommendation: That the City Council ratify the accompanying Warrant Register for the period from April 28, 2023, to May 11, 2023, in the amount of $1,118,797.58.

City of Laguna Hills City Council/Planning Agency Tuesday, May 23, 2023 Regular Meeting Agenda
4 4.5 Treasurer's Investment Report for April 2023
Recommendation: That the City Council receive and file the Treasurer's Investment Report for the month of April 2023.

4.6 Financial Statements for Fiscal Year Ending June 30, 2022 Recommendation: That the City Council receive and file the Annual Comprehensive Financial Report and other audit reports for fiscal year 2021/2022.

4.7 Special Funds Budget Adjustments
Recommendation: That the City Council approve budget amendments in the following funds: 1) SB 1383 Grant Fund for $44,821; 2) Supplemental Law Enforcement Services (State COPS) Fund for $16,000; 3) American Rescue Plan Fund for $2,893,518; and 4) Liability Self-Insurance Fund (including transfer from General Fund) for $150,000.

4.8 Purchase or Lease of One Alternative Fuel Vehicle for Use by the Public Works Department Pursuant to Section 3-08.130 of the Laguna Hills Municipal Code
Recommendation: That the City Council: 1) Approve the purchase or lease of one (1) alternative fuel vehicle pursuant to LHMC Sections 3-08.130 from the list of approved vehicles; 2) Authorize the appropriation of funds from the City’s AB 2766 Subvention Fund for the purchase or lease of the approved vehicle; and 3) Authorize the City Manager to execute a purchase or lease agreement from a dealer in order to procure the vehicle from the list of approved vehicles.

4.9 Notice of Completion and Final Payment for the Civic Center Cooling Tower Replacement Project, CIP No. 505-A
Recommendation: That the City Council: 1) Certify the completion of and accept the improvements for the subject project; 2) Authorize the Public Works Director to sign the Notice of Completion; 3) Authorize the recording of the Notice of Completion with the County of Orange and to release the faithful performance and payment bonds one year and 35 days, respectively, after the date of recordation of the Notice of Completion contingent upon no claims or liens being filed with the City; and 4) Authorize payment of the final retention 35 days after the date of recordation of the Notice of Completion in the net amount of $7,330.00, if no liens have been filed.

City of Laguna Hills City Council/Planning Agency Tuesday, May 23, 2023 Regular Meeting Agenda
5 4.10 Declaring Support of the Iranian-American Community and Condemning the Violence Perpetrated by the Government of Iran Against Its People Recommendation: That the City Council: 1) Approve the Letters of Support to Congresswoman Young Kim, Congresswoman Katie Porter, Senator Alex Padilla, Senator Diane Feinstein, and Speaker Kevin McCarthy; and 2) Adopt a Resolution entitled: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAGUNA HILLS,

CALIFORNIA, DECLARING SUPPORT OF THE IRANIAN-AMERICAN COMMUNITY

AND CONDEMNING THE VIOLENCE PERPETRATED BY THE GOVERNMENT OF IRAN AGAINST ITS PEOPLE".

ITEMS REMOVED FROM THE CONSENT CALENDAR

5. PLANNING AGENCY

6. CITY COUNCIL PUBLIC HEARINGS

7. ADMINISTRATIVE REPORTS

7.1. City Manager

7.2. Deputy City Manager/Community Services Director

7.2.1 First Amendment to the Memorandum of Understanding Regarding Solid Waste Procurement Services by and Between the City of Laguna Hills and the City of Lake Forest (MOU) and a Report on the Ad-Hoc Committee Policy Decisions Under Phase 1 of the MOU
Recommendation: That the City Council: 1) Receive a report on the Solid Waste and Recycling Franchise Procurement Ad-Hoc Committee policy decisions for the next 10-year franchise agreement under Phase 1 MOU work efforts; 2) Approve the First Amendment to Memorandum of Understanding Regarding Solid Waste Procurement Services by and between the City of Laguna Hills and the City of Lake Forest; and 3) Authorize the City Manager to execute the First Amendment.

8. MATTERS AGENDIZED AND PRESENTED BY CITY COUNCIL MEMBERS

8.1. Mayor Heft and Council Member Sweeney

8.1.1 Council Discussion Regarding Options for Formation of a New Public Safety Standing Committee
City of Laguna Hills City Council/Planning Agency Tuesday, May 23, 2023 Regular Meeting Agenda
6 Recommendation: Mayor Heft and Council Member Sweeney recommend that the City Council revisit the formation of a new Public Safety Standing Committee and appoint two City Council Members to serve on said committee.

9. CITY COUNCIL MEMBER COMMITTEE REPORTS

9.1 Committee Assignment Reports
Recommendation: That the City Council receive reports from City Council Members on the City Council Committee Assignments listed in the staff report.

10. CITY COUNCIL MEMBER COMMENTS

ADJOURNMENT
The next Regular Meeting of the City Council/Planning Agency will be June 13, 2023, at 7:00 p.m., in the City Council Chamber, located at 24035 El Toro Road, Laguna Hills, California.

CERTIFICATION
I, JENNIFER LEE, City Clerk of the City of Laguna Hills, do hereby certify that a copy of the foregoing Agenda was posted at Laguna Hills City Hall, Laguna Hills Community Center, and the Courtyard at La Paz Center by May 19, 2023, at 5:00 p.m.

May 19, 2023
Jennifer Lee, City Clerk Date
It is the intention of the City of Laguna Hills to comply with the Americans with Disabilities Act in all respects. If as an attendee or a participant at this meeting you will need special assistance beyond what is normally provided, the City of Laguna Hills will attempt to accommodate you in every reasonable manner. Please contact the office of the City Clerk at (949) 707-2635. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to assure accessibility to this meeting.

Materials related to an item on this Agenda submitted to the City Council after distribution of the agenda packet are available for public inspection in the City Clerk’s Office at 24035 El Toro Road, Laguna Hills, California, during normal business hours. In addition, such writings or documents will be made available for public review on the City’s website at:
https://www.lagunahillsca.gov/supplementalagenda and at the respective public meeting.

City Council Members receive no additional compensation or stipend as a result of simultaneously convening meetings of the Laguna Hills Planning Agency.

City of Laguna Hills
City Council/Planning Agency
Staff Report
DATE: May 23, 2023
TO: Mayor and Council Members
FROM: Jennifer Lee
City Clerk
ISSUE: Certificates of Recognition for Laguna Hills High School Student Liaisons Alexa Richter and Audrey Masson
RECOMMENDATION: That Mayor Heft present Certificates of Recognition to Alexa Richter and Audrey Masson recognizing their service as the Laguna Hills High School 2023 Spring Student Liaisons.

SUMMARY:

The City of Laguna Hills and the Laguna Hills High School PTSA established a Student Liaison Program in 1993. Alexa Richter and Audrey Masson have served as the Student Liaisons for the 2023 spring semester. The two have served as the Student Liaisons with distinction, and it is in order to recognize their service.

ATTACHMENTS:
• Certificates of Recognition - 2023 Spring Student Liaisons

1.3 Packet Pg. 7

1.3.a
Packet Pg. 8
Attachment: Certificates of Recognition - 2023 Spring Student Liaisons (3154 : Certificates of Recognition LHHS Student Liaisons)

1.3.a
Packet Pg. 9
Attachment: Certificates of Recognition - 2023 Spring Student Liaisons (3154 : Certificates of Recognition LHHS Student Liaisons) City of Laguna Hills
City Council/Planning Agency
Staff Report
DATE: May 23, 2023
TO: Mayor and Council Members
FROM: Jennifer Lee
City Clerk
ISSUE: Certificates of Recognition for Outgoing Parks and Recreation Commissioners Dan Cooper and Neel Patel and Outgoing Traffic Commissioner Chris Bieber
RECOMMENDATION: That Mayor Heft present Certificates of Recognition to Dan Cooper, Neel Patel, and Chris Bieber recognizing their service to the City.

SUMMARY:

Dan Cooper, Parks and Recreation Commissioner, Neel Patel, Parks and Recreation Commissioner, and Chris Bieber, Traffic Commissioner have completed their terms of office on their respective Commission as of May 16, 2023. Commissioner Cooper took his oath of office on January 21, 2003, serving the City as a Parks and Recreation Commissioner for 20 years. Commissioner Patel took his oath of office on January 18, 2022, filing an unscheduled vacancy on the Parks and Recreation Commission and Chris Bieber took his oath of office on January 22, 2019, serving for a full term on the Traffic Commission. It is in order to recognize Dan Cooper, Neel Patel and Chris Bieber for their service to the City of Laguna Hills on the City’s Commissions.

ATTACHMENTS:
• Certificates of Recognition - Outgoing Commissioners

1.4 Packet Pg. 10

1.4.a
Packet Pg. 11
Attachment: Certificates of Recognition - Outgoing Commissioners (3174 : Recognition of Outgoing Commissioners)

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Attachment: Certificates of Recognition - Outgoing Commissioners (3174 : Recognition of Outgoing Commissioners)

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Attachment: Certificates of Recognition - Outgoing Commissioners (3174 : Recognition of Outgoing Commissioners) City of Laguna Hills
City Council/Planning Agency
Staff Report
DATE: May 23, 2023
TO: Mayor and Council Members
FROM: Jennifer Lee
City Clerk
ISSUE: Oaths of Office and Certificates of Appointment for Three Parks and Recreation Commissioners and One Traffic Commissioner
RECOMMENDATION: That Mayor Heft administer the Oaths of Office and present Certificates of Appointment to Parks and Recreation Commissioners Chris Bieber, Marc Trocchio, and Michael Zozaya and Traffic Commissioner Neel Patel.

SUMMARY:

The City Council held interviews for three, four-year term openings on the Parks and Recreation Commission, and two four-year term openings on the Traffic Commission at a Special Meeting on May 16, 2023. The City Council interviewed 6 of the 7 applicants for the Parks and Recreation and Traffic Commissions and made the following appointments:

Parks and Recreation Commission
Chris Bieber
Marc Trocchio
Michael Zozaya
Traffic Commission
Neel Patel
The terms for these Commissioners will run through January 31, 2027.

ATTACHMENTS:
• Certificates of Appointment - Incoming Commissioners

1.5 Packet Pg. 14

1.5.a
Packet Pg. 15
Attachment: Certificates of Appointment - Incoming Commissioners (3173 : Oaths of Office and Certificates of Appointment of Commissioners)

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Attachment: Certificates of Appointment - Incoming Commissioners (3173 : Oaths of Office and Certificates of Appointment of Commissioners)

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Attachment: Certificates of Appointment - Incoming Commissioners (3173 : Oaths of Office and Certificates of Appointment of Commissioners)

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Attachment: Certificates of Appointment - Incoming Commissioners (3173 : Oaths of Office and Certificates of Appointment of Commissioners) City of Laguna Hills
City Council/Planning Agency
Staff Report
DATE: May 23, 2023
TO: Mayor and Council Members
FROM: Jennifer Lee
City Clerk
ISSUE: Schedule of Future Events
RECOMMENDATION: That the City Clerk announce the upcoming meetings and events.

SUMMARY:

Memorial Day Half Marathon, 5K, 10K
Monday, May 29, 7:00 a.m. Starting Line on Calle de la Louisa between the former mall site and Saddleback Memorial Medical Center
Memorial Day – City Hall Offices and Community Center will be Closed Monday, May 29
Parks & Recreation Commission Regular Meeting
Wednesday, June 7, 7:00 p.m., Laguna Hills Civic Center Council Chamber Movies in the Park – Meet the Robinsons
Friday, June 9, 6:00 p.m., Laguna Hills Community Center CR&R Compost Giveaway
Saturday, June 10, 7:00 a.m. – 10:00 a.m., Soka University, Aliso Viejo City Council/Planning Agency Regular Meeting
Tuesday, June 13, 7:00 p.m., Laguna Hills Civic Center Council Chamber Parent’s Night Out
Friday, June 16, 6:00 p.m. – 8:30 p.m., Laguna Hills Community Center Events, Communication, and Beautification Committee Regular Meeting Monday, June 19, 11:00 a.m., Laguna Hills Civic Center Admin Conference Room

2.1 Packet Pg. 19
Schedule of Future Events
May 23, 2023

Page 2 ends

Pacific Symphony’s Symphony on the Go! Concert
Friday, June 23, 6:00 p.m., Laguna Hills Community Center 3 rd Annual Laguna Hills Chamber of Commerce Car Show
Saturday, June 24, 9:00 a.m. – 1:00 p.m., Former Laguna Hills Mall Site City Council/Planning Agency Regular Meeting
Tuesday, June 27, 7:00 p.m., Laguna Hills Civic Center Council Chamber

2.1 Packet Pg. 20
City of Laguna Hills
City Council/Planning Agency
Staff Report
DATE: May 23, 2023
TO: Mayor and Council Members
FROM: Jennifer Lee
City Clerk
ISSUE: Approval of Minutes for May 9, 2023, Regular Meeting RECOMMENDATION: That the City Council approve the City Council Minutes for the May 9, 2023, Regular Meeting.

ATTACHMENTS:
• May 9, 2023, City Council Regular Meeting Minutes

4.2 Packet Pg. 21

CITY OF LAGUNA HILLS

CITY COUNCIL/PLANNING AGENCY

REGULAR MEETING

MINUTES
Tuesday, May 9, 2023
GENERAL BUSINESS - CONVENING AT 7:00 PM

CALL TO ORDER
The meeting was called to order at 7:00 p.m. by Mayor Heft.

INVOCATION: Pastor Ric Rodeheaver of Christ Community Church PLEDGE OF ALLEGIANCE: Council Member Caskey

ROLL CALL OF CITY COUNCIL MEMBERS
Attendee Name Title Status Arrived
Janine Heft Mayor Present
Dave Wheeler Mayor Pro Tempore Present
Don Caskey Council Member Present
Erica Pezold Council Member Present
Joshua Sweeney Council Member Present

1. PRESENTATIONS AND PROCLAMATIONS

1.2 San Joaquin Elementary School Student Liaison Report The City Council received a report from San Joaquin Elementary School Student Liaison Mikailo Gomez. Mayor Heft presented Mikailo Gomez with a Certificate of Appointment.

1.1 Lomarena Elementary School Student Liaison Report
The City Council received a report from Lomarena Elementary School Student Liaison Ryan Chiorello. Mayor Heft presented Ryan Chiorello with Certificate of Appointment.

1.3 Laguna Hills High School Student Liaison Report
The City Council received an oral report from Laguna Hills High School 2023 Spring Student Liaison Audrey Masson.

4.2.a
Packet Pg. 22
Attachment: May 9, 2023, City Council Regular Meeting Minutes (3158 : Approval of Minutes for May 9, 2023, Regular Meeting) City of Laguna Hills City Council/Planning Agency Tuesday, May 9, 2023 Regular Meeting Minutes
2 1.4 Presentation of Proclamation for "Drowning Prevention Awareness" The City Council issued a Proclamation encouraging participation in the "Always Watch the Water" and “Never Swim Alone” campaigns by highlighting May through August as a "Drowning Prevention Awareness". Mayor Heft provided a presentation on drowning statistics including a video on water safety and presented the Proclamation to Baryic Hunter, Division Chief, Orange County Fire Authority.

1.5 Certificate of Recognition for Crime Prevention Specialist Alyssa Rabas, Orange County Sheriff's Department's 2022 Professional Staff Employee of the Year
Mayor Heft presented a Certificate of Recognition to Crime Prevention Specialist Alyssa Rabas, Orange County Sheriff's Department 2022 Professional Staff Employee of the Year.

2. SCHEDULE OF FUTURE EVENTS

2.1 Schedule of Future Events
Deputy City Clerk McDonald announced the upcoming meetings and events.

3. PUBLIC COMMENTS
There were no public comments on non-agendized items.

4. CONSENT CALENDAR
Motion to approve the Consent Calendar with Mayor Pro Tempore Wheeler removing Item No. 4.6, Council Member Caskey removing Item No. 4.2, and Mayor Heft removing Item No. 4.4 and Item No. 4.5.

RESULT: APPROVED [UNANIMOUS]
MOVER: Erica Pezold, Council Member
SECONDER: Dave Wheeler, Mayor Pro Tempore
AYES: Janine Heft, Mayor; Dave Wheeler, Mayor Pro Tempore; Don Caskey, Council Member; Erica Pezold, Council Member; Joshua Sweeney, Council Member

4.2.a
Packet Pg. 23
Attachment: May 9, 2023, City Council Regular Meeting Minutes (3158 : Approval of Minutes for May 9, 2023, Regular Meeting) City of Laguna Hills City Council/Planning Agency Tuesday, May 9, 2023 Regular Meeting Minutes
3 4.1 Waive Reading in Full of all Ordinances and Resolutions on the Agenda Recommendation: That the City Council waive reading in full of all ordinances and resolutions on the agenda and declare that said titles which appear on the public agenda shall be determined to have been read by title and further reading waived.

4.3 Ratification of May 9, 2023, Warrant Register
Recommendation: That the City Council ratify the accompanying Warrant Register for the period from April 14, 2023, to April 27, 2023, in the amount of $242,144.79.

4.7 Designation of Voting Delegate for California Joint Powers Insurance Authority 2023 Annual Board of Directors Meeting
Recommendation: That the City Council designate the Mayor as the Primary Voting Delegate and the Mayor Pro Tempore as the Alternate Voting Delegate for the California Joint Powers Insurance Authority (CJPIA) 2023 Annual Board of Directors Meeting.

ITEMS REMOVED FROM THE CONSENT CALENDAR

4.2 Approval of Minutes for April 25, 2023, Regular Meeting Council Member Caskey removed Item No. 4.2 to abstain from voting on the item.

Recommendation: That the City Council approve the City Council Minutes for the April 25, 2023, Regular Meeting.

RESULT: APPROVED [UNANIMOUS]
MOVER: Dave Wheeler, Mayor Pro Tempore
SECONDER: Dave Wheeler, Mayor Pro Tempore
AYES: Janine Heft, Mayor; Dave Wheeler, Mayor Pro Tempore; Erica Pezold, Council Member; Joshua Sweeney, Council
Member
ABSTAIN: Don Caskey, Council Member

4.4 Grant Application to OCTA for the Environmental Cleanup Program - Phase XII Catch Basin CPS-Mod and ARS-CL Screen Project, CIP No. 412-L Mayor Heft removed Item No. 4.4 from the Consent Calendar to allow for discussion on the item.

4.2.a
Packet Pg. 24
Attachment: May 9, 2023, City Council Regular Meeting Minutes (3158 : Approval of Minutes for May 9, 2023, Regular Meeting) City of Laguna Hills City Council/Planning Agency Tuesday, May 9, 2023 Regular Meeting Minutes
4 Public Works Director/City Engineer Ames reviewed the information provided in the staff report, provided a PowerPoint presentation, and responded to Council Member requests for additional information.

Recommendation: That the City Council approve the submission of a Grant Application to the Orange County Transportation Authority for the Measure M2 Environmental Cleanup Program for the Phase XII Catch Basin CPS-Mod & ARS-CL Screen Project and adopt Resolution No. 2023-05-09-1: "A RESOLUTION OF THE

CITY COUNCIL OF THE CITY OF LAGUNA HILLS, CALIFORNIA, AUTHORIZING AN APPLICATION FOR FUNDS FOR THE MEASURE M2 ENVIRONMENTAL CLEANUP TIER 1 GRANT PROGRAM, UNDER ORANGE COUNTY LOCAL TRANSPORTATION ORDINANCE NO. 3 FOR THE PHASE XII CATCH BASIN CPS-MOD & ARS-CL SCREEN PROJECT."
RESULT: APPROVED [UNANIMOUS]
MOVER: Erica Pezold, Council Member
SECONDER: Don Caskey, Council Member
AYES: Janine Heft, Mayor; Dave Wheeler, Mayor Pro Tempore; Don Caskey, Council Member; Erica Pezold, Council Member; Joshua Sweeney, Council Member

4.5 Proposed Office Lease with Agatha Global Tech, LLC for 24031 El Toro Road, Suite 205, Laguna Hills, California
Mayor Heft removed Item No. 4.5 from the Consent Calendar to allow for discussion on the item.

Recommendation: That the City Council: 1) Approve the Lease Agreement with Agatha Global Tech, LLC, a California limited liability company, for 24031 El Toro Road, Suite 205, Laguna Hills, California; and 2) Authorize the City Manager to make minor modifications, as necessary, to the Lease Agreement and to execute the Lease Agreement.

RESULT: APPROVED [UNANIMOUS]
MOVER: Erica Pezold, Council Member
SECONDER: Joshua Sweeney, Council Member
AYES: Janine Heft, Mayor; Dave Wheeler, Mayor Pro Tempore; Don Caskey, Council Member; Erica Pezold, Council Member; Joshua Sweeney, Council Member

4.2.a
Packet Pg. 25
Attachment: May 9, 2023, City Council Regular Meeting Minutes (3158 : Approval of Minutes for May 9, 2023, Regular Meeting) City of Laguna Hills City Council/Planning Agency Tuesday, May 9, 2023 Regular Meeting Minutes
5 4.6 Excused Absence Request from Council Member Don Caskey for May 9, 2023, City Council Meeting
Mayor Pro Tempore Wheeler removed Item No. 4.6 from the Consent Calendar to remove the item from consideration. No action was taken on the item.

Recommendation: That the City Council approve an Excused Absence Request from Council Member Don Caskey for the May 9, 2023, City Council Meeting, if he is not in attendance.

5. PLANNING AGENCY
There were no separate Planning Agency Business Items for this meeting.

6. CITY COUNCIL PUBLIC HEARINGS

6.1 Public Hearing on 2023 Weed, Rubbish, and Refuse Abatement Public Works Director/City Engineer Ames reviewed the information provided in the staff report and responded to Council Member requests for additional information.

Mayor Heft opened the Public Hearing.

Mayor Heft closed the Public Hearing.

Recommendation: That the City Council: 1) Conduct a Public Hearing, receive and consider all objections; and 2) Adopt Resolution No. 2023-05-09-2: "A

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAGUNA HILLS, CALIFORNIA,

ISSUING AN ABATEMENT ORDER AND AUTHORIZING THE PUBLIC WORKS

DIRECTOR TO COMMENCE ENFORCING WEED, RUBBISH, AND REFUSE ABATEMENT AGAINST SPECIFIED PARCELS OF LAND."
RESULT: APPROVED [UNANIMOUS]
MOVER: Erica Pezold, Council Member
SECONDER: Joshua Sweeney, Council Member
AYES: Janine Heft, Mayor; Dave Wheeler, Mayor Pro Tempore; Don Caskey, Council Member; Erica Pezold, Council
Member; Joshua Sweeney, Council Member

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Packet Pg. 26
Attachment: May 9, 2023, City Council Regular Meeting Minutes (3158 : Approval of Minutes for May 9, 2023, Regular Meeting) City of Laguna Hills City Council/Planning Agency Tuesday, May 9, 2023 Regular Meeting Minutes
6 Mayor Heft received consensus to take Item No. 8.1.1 out of order on the Agenda.

8. MATTERS AGENDIZED AND PRESENTED BY CITY COUNCIL MEMBERS

8.1. Mayor Heft

8.1.1 Condemning the Actions of the Government of Iran
Recommendation: Mayor Heft recommends that the City Council direct City staff to prepare a resolution or letter of support stating that the Laguna Hills City Council stands in solidarity with the women of Iran and our Iranian-American population who have been impacted by the human rights violations committed by the Government of Iran.

The following individuals addressed the City Council on this item:

Mona Sedaghat, Soheyla Torabi, Farhad Mafie, Maryam Mosallaie, Farzaneh Farhand, and Farah Poozeshi each provided public comments thanking the City Council for consideration of the item and urging the City Council to adopt a Resolution condemning crimes against humanity committed by the Islamic Republic.

City Attorney Simonian responded to Council Member requests for additional information.

City Manager Hildenbrand responded to Council Member requests for additional information.

An amended motion to draft a Resolution and letters of support to Congresswoman Young Kim, Speaker Kevin McCarthy, and all federal representatives for the City of Laguna Hills, modeled after the sample Resolution and letter provided in the Supplemental Agenda Materials Memo, for approval at the next regular City Council meeting was moved by Council Member Pezold, seconded by Council Member Caskey.

RESULT: APPROVED [UNANIMOUS]
MOVER: Erica Pezold, Council Member
SECONDER: Don Caskey, Council Member
AYES: Janine Heft, Mayor; Dave Wheeler, Mayor Pro
Tempore; Don Caskey, Council Member; Erica
Pezold, Council Member; Joshua Sweeney, Council
Member

4.2.a
Packet Pg. 27
Attachment: May 9, 2023, City Council Regular Meeting Minutes (3158 : Approval of Minutes for May 9, 2023, Regular Meeting) City of Laguna Hills City Council/Planning Agency Tuesday, May 9, 2023 Regular Meeting Minutes
7 7. ADMINISTRATIVE REPORTS

7.1. City Manager
The City Manager gave no Administrative Reports.

7.2. Public Works Director/City Engineer

7.2.1 Bicycle, Electric Bicycle, and Motorized Mobility Device Safety Public Works Director/City Engineer Ames reviewed the information provided in the staff report, provided a PowerPoint presentation and responded to Council Member requests for additional information.

The following individuals submitted an electronic public comment on Item No. 7.2.1 that was received, forwarded to the Council prior to the meeting, posted on the City’s website, and announced into the record by Deputy City Clerk McDonald:

Ronald Distor, a resident of Laguna Hills, submitted an electronic public comment on the item including a pdf brochure from calbike.org on safe bicycle infrastructure.

City Attorney Simonian responded to Council Member requests for additional information.

Recommendation: That the City Council direct Police Services to monitor and observe violations of State law and City codes related to motorized bicycles and devices and report back to City Council in one year.

A motion to move staff’s recommendation and to direct the Events, Communication, and Beautification Committee to research potential educational opportunities for the public was moved by Mayor Heft, seconded by Council Member Caskey.

RESULT: APPROVED [4 TO 1]
MOVER: Janine Heft, Mayor
SECONDER: Don Caskey, Council Member
AYES: Janine Heft, Mayor; Don Caskey, Council Member;
Erica Pezold, Council Member; Joshua Sweeney,
Council Member
NAYS: Dave Wheeler, Mayor Pro Tempore

4.2.a
Packet Pg. 28
Attachment: May 9, 2023, City Council Regular Meeting Minutes (3158 : Approval of Minutes for May 9, 2023, Regular Meeting) City of Laguna Hills City Council/Planning Agency Tuesday, May 9, 2023 Regular Meeting Minutes
8 9. CITY COUNCIL MEMBER COMMITTEE REPORTS

9.1. Committee Assignment Reports
Recommendation: That the City Council receive oral reports on the following City Council Committee Assignments:

1. Time Capsule Ad Hoc Committee
Council Member Caskey and Council Member Pezold
Project Update
Council Member Caskey and Council Member Pezold provided an oral report.

A motion to direct the Time Capsule Ad Hoc Committee to complete the committee objective by August 22, 2023, was moved by Mayor Heft, seconded by Mayor Pro Tempore Wheeler.

RESULT: APPROVED [3 TO 2]
MOVER: Janine Heft, Mayor
SECONDER: Dave Wheeler, Mayor Pro Tempore
AYES: Janine Heft, Mayor; Dave Wheeler, Mayor Pro
Tempore; Joshua Sweeney, Council Member
NAYS: Erica Pezold, Council Member; Don Caskey, Council Member

2. Association of California Cities - Orange County (ACC-OC) Legislative and Regulatory Committee
Mayor Pro Tempore Wheeler
April 27 Meeting
Mayor Pro Tempore Wheeler provided an oral report.

3. Orange County Fire Authority (OCFA)
Board of Directors
Council Member Sweeney
April 27 Regular Meeting
Council Member Sweeney provided an oral report.

10. CITY COUNCIL MEMBER COMMENTS
Mayor Heft
Mayor Heft reported that she and with the Executive Director of ACC-OC presented a PowerPoint presentation at the May 9, 2023, Irvine City Council meeting and achieved a unanimous vote for Irvine to rejoin the ACC-OC.

4.2.a
Packet Pg. 29
Attachment: May 9, 2023, City Council Regular Meeting Minutes (3158 : Approval of Minutes for May 9, 2023, Regular Meeting) City of Laguna Hills City Council/Planning Agency Tuesday, May 9, 2023 Regular Meeting Minutes
9 CLOSED SESSION

ANNOUNCEMENT OF CLOSED SESSION ITEM(S)
A. CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION
Pursuant to paragraph (1) of subdivision (d) of California Government Code Section 54956.9
Name of Case: Ross Massbaum vs. City of Laguna Hills; Orange County Superior Court Case No. 30-2021-01227472-CU-PO-CJC; Complaint for Personal Injury

PUBLIC COMMENT ON CLOSED SESSION ITEM(S)
There were no public comments on the closed session item.

ADJOURN TO CITY COUNCIL CONFERENCE ROOM OR CITY COUNCIL CHAMBER

CONVENE INTO CLOSED SESSION
The City Council convened into closed session to consider the matter(s) listed above.

RECONVENE TO CITY COUNCIL CHAMBER
The City Council reconvened the City Council Meeting at 10:17 p.m. All Council Members were present in Chamber.

CLOSED SESSION REPORT
A. CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION
Pursuant to paragraph (1) of subdivision (d) of California Government Code Section 54956.9
Name of Case: Ross Massbaum vs. City of Laguna Hills; Orange County Superior Court Case No. 30-2021-01227472-CU-PO-CJC; Complaint for Personal Injury City Attorney Simonian stated that the City Council convened into closed session this evening pursuant to the authorities listed on the Agenda with no reportable action taken.

ADJOURNMENT
There being no further business before the City Council at this session, Mayor Heft declared the meeting adjourned at 10:18 p.m.

4.2.a
Packet Pg. 30
Attachment: May 9, 2023, City Council Regular Meeting Minutes (3158 : Approval of Minutes for May 9, 2023, Regular Meeting) City of Laguna Hills City Council/Planning Agency Tuesday, May 9, 2023 Regular Meeting Minutes
10 Jennifer Lee, City Clerk
ATTEST:

Janine Heft, Mayor
Approved at meeting of May 23, 2023

4.2.a
Packet Pg. 31
Attachment: May 9, 2023, City Council Regular Meeting Minutes (3158 : Approval of Minutes for May 9, 2023, Regular Meeting) City of Laguna Hills
City Council/Planning Agency
Staff Report
DATE: May 23, 2023
TO: Mayor and Council Members
FROM: Jennifer Lee
City Clerk
ISSUE: Approval of Minutes for May 16, 2023, Special Meetings RECOMMENDATION: That the City Council approve the City Council Minutes for the May 16, 2023, Special Meetings.

ATTACHMENTS:
• May 16, 2023, City Council Special Meeting Minutes 5:00 p.m • May 16, 2023, City Council Special Meeting Meeting 7:00 p.m

4.3 Packet Pg. 32

CITY OF LAGUNA HILLS

CITY COUNCIL

SPECIAL MEETING

MINUTES
Tuesday, May 16, 2023

CALL TO ORDER
The meeting was called to order at 5:03 p.m. by Mayor Heft.

PUBLIC COMMENTS
There were no public comments.

INTERVIEWS OF APPLICANTS FOR PURPOSES OF APPOINTING TRAFFIC

COMMISSIONERS AND PARKS AND RECREATION COMMISSIONERS
Commission Interviews and Appointments
Recommendation: That the City Council interview applicants for the Traffic Commission and the Parks and Recreation Commission and appoint Commissioners to four-year terms ending January 31, 2027, to fill three vacancies on the Parks and Recreation Commission and two vacancies on the Traffic Commission.

The City Council conducted six interviews of a total of seven applicants for the Parks and Recreation Commission and the Traffic Commission. One applicant was unable to attend the interviews.

By motion the City Council appointed Neel Patel to the Traffic Commission and appointed Chris Bieber, Marc Trocchio, and Michael Zozaya to the Parks and Recreation Commission.

4.3.a
Packet Pg. 33
Attachment: May 16, 2023, City Council Special Meeting Minutes 5:00 p.m (3159 : Approval of Minutes for May 16, 2023, Special Meetings) City of Laguna Hills City Council Tuesday, May 16, 2023 Special Meeting Minutes
2 RESULT: APPROVED [UNANIMOUS]
MOVER: Dave Wheeler, Mayor Pro Tempore
SECONDER: Janine Heft, Mayor
AYES: Janine Heft, Mayor; Dave Wheeler, Mayor Pro Tempore; Don Caskey, Council Member; Erica Pezold, Council
Member; Joshua Sweeney, Council Member

ADJOURNMENT
There being no further business before the City Council at this session, Mayor Heft declared the meeting adjourned at 7:25 p.m.

Jennifer Lee, City Clerk
ATTEST:

Janine Heft, Mayor
Approved at meeting of May 23, 2023

4.3.a
Packet Pg. 34
Attachment: May 16, 2023, City Council Special Meeting Minutes 5:00 p.m (3159 : Approval of Minutes for May 16, 2023, Special Meetings)

CITY OF LAGUNA HILLS

CITY COUNCIL

SPECIAL MEETING

MINUTES
Tuesday, May 16, 2023

CALL TO ORDER
The meeting was called to order at 7:29 p.m. by Mayor Heft.

ANNOUNCEMENT OF CLOSED SESSION ITEM(S)
A. CONFERENCE WITH LABOR NEGOTIATORS
Pursuant to Government Code Section 54957.6(a)
City Designated Representatives: Jarad Hildenbrand, City Manager Employee Organization: Laguna Hills City Employee Association, City Employee Organization

PUBLIC COMMENTS
There were no public comments on the closed session item.

ADJOURN TO CITY COUNCIL CONFERENCE ROOM OR COUNCIL CHAMBER

CONVENE INTO CLOSED SESSION
The City Council convened into closed session to consider the matter(s) listed above.

RECONVENE TO CITY COUNCIL CHAMBER
The City Council reconvened the City Council Meeting at 9:07 p.m. All Council Members were present in Chamber.

4.3.b
Packet Pg. 35
Attachment: May 16, 2023, City Council Special Meeting Meeting 7:00 p.m (3159 : Approval of Minutes for May 16, 2023, Special Meetings) City of Laguna Hills City Council Tuesday, May 16, 2023 Special Meeting Minutes
2 CLOSED SESSION REPORT
A. CONFERENCE WITH LABOR NEGOTIATORS
Pursuant to Government Code Section 54957.6(a)
City Designated Representatives: Jarad Hildenbrand, City Manager Employee Organization: Laguna Hills City Employee Association, City Employee Organization
City Attorney Raileanu stated that the City Council convened into closed session this evening pursuant to the authorities listed on the Agenda with no reportable action taken.

ADJOURNMENT
There being no further business before the City Council at this session, Mayor Heft declared the meeting adjourned at 9:07 p.m.

Jennifer Lee, City Clerk
ATTEST:

Janine Heft, Mayor
Approved at meeting of May 23, 2023

4.3.b
Packet Pg. 36
Attachment: May 16, 2023, City Council Special Meeting Meeting 7:00 p.m (3159 : Approval of Minutes for May 16, 2023, Special Meetings) City of Laguna Hills
City Council/Planning Agency
Staff Report
DATE: May 23, 2023
TO: Mayor and Council Members
FROM: Eric Hendrickson
Finance Director
ISSUE: Ratification of May 23, 2023, Warrant Register
RECOMMENDATION: That the City Council ratify the accompanying Warrant Register for the period from April 28, 2023, to May 11, 2023, in the amount of $1,118,797.58.

SUMMARY:

The City issues accounts payable disbursements on a regular basis and presents it to City Council for ratification at its next regularly scheduled City Council Meeting. The attached Warrant Register containing checks and electronic funds transfers for the period from April 28, 2023, to May 11, 2023, is being presented for ratification by the City Council.

Payments have been reviewed and approved by the appropriate departmental staff. The Finance Director certifies to the accuracy of the attached register and to the availability of monies for payment thereof.

ATTACHMENTS:
• Warrant Register - May 23, 2023
• Payables Detail Report - May 23, 2023

4.4 Packet Pg. 37
Payment Amount

50.00 120.00
214.76
9,250.00
5,506.65

34.27 580.00
2,600.00
651.39
1,626.47
1,997.60
855.62

90.00 87,832.95
117.00
530.22
642.00

30.00 344.70
10,000.00
350.00
687.40
151.02
314.54
7,170.48
212.82
28,724.36
738.70
1,188.00
807.09
1,655.07
180.85
4,400.00

50.00 19,818.75
101.99
500.00
300.09
341.83
8,539.74
223.74
1,738.00
250.00
436.39
54,136.87
12,829.06
13,581.23
5,612.78
2,462.84
206.33

32.00 90.00
5/11/2023 6:36:08 PM Page 1 of 4
2038 S-1980 STATE DEPARTMENT OF JUSTICE ACCOUNTING OFFICE 05/11/2023 2039 V-2254 VITUITY - URGENT CARE SERVICES, PC 05/11/2023 2035 S-1904 SOUTHERN CALIFORNIA EDISON 05/11/2023
2036 O-1575 SOUTHERN CALIFORNIA NEWS GROUP 05/11/2023
2037 S-2250 SPARKLETTS 05/11/2023
2032 R-1986 RACEWAY FORD, INC 05/11/2023
2033 S-1902 SAN DIEGO GAS AND ELECTRIC 05/11/2023
2034 S-1904 SOUTHERN CALIFORNIA EDISON 05/11/2023
2029 C-1003 ORANGE COUNTY TREASURER-TAX COLLECTOR 05/11/2023 2030 Z-CS-0415 PARK, ESTER 05/11/2023
2031 P-1832 PRINTEX PRINTING AND GRAPHICS INC. 05/11/2023 2026 M-1388 MOBILE MINI, INC. 05/11/2023
2027 M-1302 MOULTON NIGUEL WATER DISTRICT 05/11/2023
2028 O-1546 OFFICE SOLUTIONS 05/11/2023
2023 I-0942 IRVINE RANCH WATER DISTRICT 05/11/2023
2024 Z-CS-0414 MARTINEZ, JUANA 05/11/2023
2025 Z-CD-0413 MILAN CAPITAL MANAGEMENT 05/11/2023
2020 F-0693 FIRST STUDENT, INC. 05/11/2023
2021 Z-CS-0410 FLORES, JESUS 05/11/2023
2022 G-0868 GLASER WEIL 05/11/2023
2017 C-0023 COX COMMUNICATION 05/11/2023
2018 D-0461 DATA TICKET, INC. 05/11/2023
2019 D-0561 DOCU-TRUST 05/11/2023
2014 C-1144 CHARLES ABBOTT ASSOCIATES, INC 05/11/2023
2015 C-1191 COUNTY OF ORANGE 05/11/2023
2016 C-1190 COUNTY OF ORANGE 05/11/2023
2011 W-2450 WEX BANK 05/04/2023
2012 A-0138 ALL CITY MANAGEMENT, INC. 05/11/2023
2013 B-0437 BRINKS, INCORPORATED 05/11/2023
2008 S-2198 STATE OF CALIFORNIA DEPT OF INDUSTRIAL RELATIONS 05/04/2023 2009 T-2698 TPX COMMUNICATIONS 05/04/2023
2010 U-2165 UNDERGROUND SERVICE ALERT OF SO CALIFORNIA 05/04/2023 2005 S-2194 SECURE LIVE SCAN 05/04/2023
2006 S-2296 SHUTE, MIHALY WEINBERGER LLP 05/04/2023
2007 S-2308 SPECTRUM SPORTS MANAGEMENT, INC. 05/04/2023 2002 O-1525 OCCMA 05/04/2023
2003 Q-1716 QUADIENT LEASING USA, INC. 05/04/2023
2004 Z-PS-0038 SANDOVAL, JESSICA 05/04/2023
1999 J-1071 JCTEES.COM CORPORATION 05/04/2023
2000 Z-CS-0412 MA, WENDY 05/04/2023
2001 N-1474 NIEVES LANDSCAPE, INC. 05/04/2023
1996 H-0958 HEFT, JANINE 05/04/2023
1997 I-0960 IRV SEAVER MOTORCYCLES 05/04/2023
1998 J-1057 JAMEY CLARK, INC. 05/04/2023
1993 F-0604 FEDERAL EXPRESS CORPORATION 05/04/2023
1994 Z-CS-0413 FLORES, ANGEL R 05/04/2023
1995 Z-CS-0204 GARDUNO, HECTOR 05/04/2023
1990 C-0023 COX COMMUNICATION 05/04/2023
1991 D-0578 DE NOVO PLANNING GROUP 05/04/2023
1992 E-0504 EL TORO WATER DISTRICT 05/04/2023
Payment Type: Regular
1988 Z-PS-0037 ALLOUCHE, NAJI 05/04/2023
1989 A-0226 AMES, JOSEPH JOHN 05/04/2023
Warrant Register - May 23, 2023
City of Laguna Hills, CA By Check Number
Date Range: 04/28/2023 - 05/11/2023
Check Number Vendor Number Vendor Name Payment Date

4.4.a
Packet Pg. 38
Attachment: Warrant Register - May 23, 2023 (3164 : Warrant Register, May 23, 2023) Payment Amount
961.88
Total Regular: 291,867.48
5/11/2023 6:36:08 PM Page 2 of 4
Warrant Register - May 23, 2023 Date Range: 04/28/2023 - 05/11/2023 Check Number Vendor Number Vendor Name Payment Date
2040 W-2450 WEX BANK 05/11/2023

4.4.a
Packet Pg. 39
Attachment: Warrant Register - May 23, 2023 (3164 : Warrant Register, May 23, 2023) Payment Amount
809,845.47
975.00
16,109.63
5/11/2023 6:36:08 PM Page 3 of 4
EFT's 0 0 0.00 0.00
84 56 0.00 1,118,797.58
Voided Checks 0 0 0.00 0.00
Bank Drafts 3 3 0.00 826,930.10
Regular Checks 81 53 0.00 291,867.48
Manual Checks 0 0 0.00 0.00
DFT0002468 H-0966 HIGH LEVEL SECURITY SOLUTIONS, INC. 05/10/2023 Total Bank Draft: 826,930.10
Bank Code AP Bank Summary
Payable
Count
Payment
Payment Type Count Discount Payment
Payment Type: Bank Draft
DFT0002466 C-1007 OCSD LAW ENFORCEMENT CONTRACT, OC TREASURER-TAX COLLECTOR 05/11/2023 DFT0002467 H-0966 HIGH LEVEL SECURITY SOLUTIONS, INC. 05/10/2023 Warrant Register - May 23, 2023 Date Range: 04/28/2023 - 05/11/2023 Check Number Vendor Number Vendor Name Payment Date

4.4.a
Packet Pg. 40
Attachment: Warrant Register - May 23, 2023 (3164 : Warrant Register, May 23, 2023) 1,118,797.58
5/11/2023 6:36:08 PM Page 4 of 4
Fund Summary
Fund Name Period Amount
998 POOL 5/2023 1,118,797.58
EFT's 0 0 0.00 0.00
84 56 0.00 1,118,797.58
Voided Checks 0 0 0.00 0.00
Bank Drafts 3 3 0.00 826,930.10
Regular Checks 81 53 0.00 291,867.48
Manual Checks 0 0 0.00 0.00
Warrant Register - May 23, 2023 Date Range: 04/28/2023 - 05/11/2023 All Bank Codes Check Summary
Payable
Count
Payment
Payment Type Count Discount Payment

4.4.a
Packet Pg. 41
Attachment: Warrant Register - May 23, 2023 (3164 : Warrant Register, May 23, 2023) Amount
5/11/2023 6:39:26 PM Page 1 of 5
05/04/2023 SANDOVAL, JESSICA PSV-0041 Refund, Citation #LH010005681 100-000-460100 192.00 05/04/2023 SANDOVAL, JESSICA PSV-0042 Refund, Citation #LH010005709 100-000-460100 82.00 05/04/2023 SANDOVAL, JESSICA PSV-0039 Refund, Citation #LH010005648 100-000-460100 92.00 05/04/2023 SANDOVAL, JESSICA PSV-0040 Refund, Citation #LH010005663 100-000-460100 192.00 05/04/2023 ALLOUCHE, NAJI PSV-0037 Refund, Citation #LH010005892 100-000-460100 50.00 05/04/2023 SANDOVAL, JESSICA PSV-0038 Refund, Citation #LH010005641 100-000-460100 42.00 05/04/2023 FLORES, ANGEL R FRF-0020 Refund, Facility Rental, R #1035459.002
100-000-451100 80.00
05/04/2023 QUADIENT LEASING USA, INC. N9917951 Lease - Mailing Equip, 2/28/23 - 5/27/23
100-195-641000 530.22
05/04/2023 GARDUNO, HECTOR FRF-0018 Refund, Facility Rental, R #1035400.002
100-000-451100 400.00
05/04/2023 GARDUNO, HECTOR FRF-0019 Refund, Facility Rental, R #1035467.002
100-000-451100 300.00
05/04/2023 GARDUNO, HECTOR FRF-0016 Refund, Facility Rental, R #1035251.002
100-000-451100 1,000.00
05/04/2023 GARDUNO, HECTOR FRF-0017 Refund, Facility Rental, R #1035373.002
100-000-451100 400.00
05/04/2023 GARDUNO, HECTOR FRD-0303 Refund, Facility Deposit, R #1034930.002
100-000-222000 500.00
05/04/2023 FLORES, ANGEL R FRD-0304 Refund, Facility Deposit, R #1035446.002
100-000-222000 500.00
05/04/2023 STATE OF CALIFORNIA DEPT OF

INDUSTRIAL RELATIONS
E 1951957 SN Elevator Conveyance #123653, Mar
'23
100-310-645500 225.00
05/04/2023 STATE OF CALIFORNIA DEPT OF

INDUSTRIAL RELATIONS
E 1951960 SN Elevator Conveyance #123674, Mar
'23
100-310-645500 125.00
05/04/2023 WEX BANK 88769990 COMDEV Vehicle Fuel, Apr '23 100-225-613100 314.54 05/04/2023 MA, WENDY CSP-0029 Refund, Program, R #1035405.002 100-000-451000 90.00 05/04/2023 FEDERAL EXPRESS CORPORATION 8-107-00682 Delivery Services, VALH, Apr '23 100-000-229100 34.27 05/04/2023 JCTEES.COM CORPORATION 8659 Rooted Campaign Event, Mar '23 100-310-695500 855.62 05/04/2023 NIEVES LANDSCAPE, INC. 74348 Monthly and Misc Landscape, Apr '23 100-355-720700 87,636.69 05/04/2023 NIEVES LANDSCAPE, INC. 74450 Monthly and Misc Landscape, Apr '23 100-355-720700 196.26 05/04/2023 JAMEY CLARK, INC. 73849 Graffiti Removal, Public Works, Apr 100-355-720500 315.00 05/04/2023 JAMEY CLARK, INC. 73856 Park Repairs, Public Works, Apr '23 100-355-720701 322.70 05/04/2023 DE NOVO PLANNING GROUP 3714 LH Housing, Rezone and ODS Program, Jan '23
100-225-700225 9,250.00
05/04/2023 JAMEY CLARK, INC. 73848 Graffiti Removal, Public Works, Apr 100-355-720500 1,359.90 05/04/2023 SPECTRUM SPORTS MANAGEMENT,
INC.
2023-75 Event Management Services, 1/2
Marathon
100-310-695507 10,000.00
05/04/2023 SHUTE, MIHALY WEINBERGER LLP 281108 Professional Services, Legal, Mar '23 100-155-700011 344.70 05/04/2023 IRV SEAVER MOTORCYCLES 20230885 Motorcycle Maintenance, Police Svcs, Apr '23
100-420-646100 312.17
05/04/2023 IRV SEAVER MOTORCYCLES 20230923 Motorcycle Maintenance, Police Svcs, Apr '23
100-420-646100 1,314.30
05/04/2023 SECURE LIVE SCAN 13724 Pre-employment Fingerprinting, Apr '23
100-195-617000 30.00
05/04/2023 TPX COMMUNICATIONS 169659158-0 Communications Expense, May '23 100-195-630000 687.40 05/04/2023 HEFT, JANINE 050323 Travel Reimbursement, ACC Advocacy, Washington DC
100-155-612002 651.39
05/04/2023 AMES, JOSEPH JOHN 050323 Reimbursement for Rooted Campaign Event, Apr '23
100-310-695500 120.00
05/04/2023 EL TORO WATER DISTRICT 050123 Water Usage, Public Works, Mar '23 100-355-635000 5,506.65 05/04/2023 OCCMA 050323 Annual Retreat, FY 22/23 100-155-612000 117.00 Fund: 100 - GENERAL FUND
05/04/2023 COX COMMUNICATION 041823 Cable, City Hall, Apr '23 100-195-630000 32.14 05/04/2023 COX COMMUNICATION 041923 WiFi, City Hall, Apr '23 100-195-630000 182.62 Payables Detail Report
City of Laguna Hills, CA By Fund
Payment Dates 04/28/2023 - 05/11/2023
Payment Date Vendor Name Payable Number Description (Payable) Account Number

4.4.b
Packet Pg. 42
Attachment: Payables Detail Report - May 23, 2023 (3164 : Warrant Register, May 23, 2023) Amount
05/11/2023 COUNTY OF ORANGE SH 65208 Fingerprint ID System Charges, May '23
100-420-720835 1,188.00
5/11/2023 6:39:26 PM Page 2 of 5
05/11/2023 FLORES, JESUS FRF-0021 Refund, Facility Rental, R #1035058.002
100-000-451100 50.00
05/11/2023 OFFICE SOLUTIONS I-02120824 Operating Supplies, May '23 100-195-622000 223.74 05/11/2023 MARTINEZ, JUANA FRD-0305 Refund, Facility Deposit, R #1035123.002
100-000-222000 500.00
05/11/2023 PARK, ESTER FRD-0306 Refund, Facility Deposit, R #1034927.002
100-000-222000 250.00
05/11/2023 ORANGE COUNTY TREASURER-TAX

COLLECTOR
APR 23 Parking Fee Surcharge, Apr '23 100-420-720823 1,738.00 05/11/2023 MILAN CAPITAL MANAGEMENT CD-0945-USE-0105-2022 Refund, Plan Application Deposit, R #00009926
100-000-223000 300.09
05/11/2023 WEX BANK 88769914 Vehicle Fuel, Apr '23 100-355-646100 16.00 05/11/2023 MOBILE MINI, INC. 9017548377 Storage Rental, Community Center, 4/27 - 5/24/23
100-310-641000 341.83
05/11/2023 WEX BANK 88769910 POLSVCS Vehicle Fuel, Apr '23 100-420-613100 215.56 05/11/2023 WEX BANK 88769914 Vehicle Fuel, Apr '23 100-355-613100 428.04 05/11/2023 ALL CITY MANAGEMENT, INC. 85269 Crossing Guard Services, 4/16/23 - 4/29/23
100-420-720822 7,170.48
05/11/2023 WEX BANK 88769635 COMSVCS Vehicle Fuel, Apr '23 100-310-613100 302.28 05/11/2023 CHARLES ABBOTT ASSOCIATES, INC 65713 - C (Bus Shelter) Public Works Other, Bus Shelter, Apr '23
100-355-720401 450.00
05/11/2023 CHARLES ABBOTT ASSOCIATES, INC 65713 - D (San Remo Park)Public Works Other, Parks, Apr '23 100-355-720401 3,750.00 05/11/2023 CHARLES ABBOTT ASSOCIATES, INC 65713 - A (Oso E/O Moulton) Public Works Other, Oso E/O Moulton, Apr '23
100-355-720401 900.00
05/11/2023 CHARLES ABBOTT ASSOCIATES, INC 65713 - B (Facilities) Public Works Other, Civic Center Maint, Apr '23
100-355-720401 675.00
05/11/2023 GLASER WEIL 272694 Professional Services Legal, Apr '23 100-155-700011 262.50 05/11/2023 STATE DEPARTMENT OF JUSTICE

ACCOUNTING OFFICE
653769 Pre-employment Fingerprinting, Apr
'23
100-195-617000 32.00
05/11/2023 GLASER WEIL 270253 Professional Services Legal, Feb '23 100-155-700011 12,600.00 05/11/2023 GLASER WEIL 271612 Professional Services Legal, Mar '23 100-155-700011 6,956.25 05/11/2023 DATA TICKET, INC. 151215 Process Fee, Parking Citations, Apr 100-420-720823 759.03 05/11/2023 PRINTEX PRINTING AND GRAPHICS
INC.
24414 (1) Advertising, Summer Nights, May '23 100-310-624500 436.39 05/11/2023 VITUITY - URGENT CARE SERVICES, 1427K20515 Recruitment, May '23 100-195-617000 90.00 05/11/2023 DATA TICKET, INC. 147479 Process Fee, Parking Citations, Jan 100-420-720823 896.04 05/11/2023 SPARKLETTS 12194330 042623 Operating Supplies, Comm Ctr, Apr 100-310-622005 206.33 05/11/2023 BRINKS, INCORPORATED 12280092 Courier Fee, Armored Transport, May '23
100-155-625000 212.82
05/11/2023 IRVINE RANCH WATER DISTRICT 050223 Water Usage, Public Works, Apr '23 100-355-635000 101.99 05/11/2023 SAN DIEGO GAS AND ELECTRIC 050223 Street Lights, Traffic Control, Apr '23 100-356-631400 12,829.06 05/11/2023 SOUTHERN CALIFORNIA EDISON 050123 - Acct #700234509668 Street Lights, Traffic Control, Mar & Apr '23
100-355-631000 715.42
05/11/2023 SOUTHERN CALIFORNIA EDISON 050123 - Acct #700234509668 Street Lights, Traffic Control, Mar & Apr '23
100-356-631400 12,865.81
05/11/2023 SOUTHERN CALIFORNIA EDISON 050123 - Acct #700162476559 Street Lights, Traffic Control, Mar & Apr '23
100-356-631400 1,284.95
05/11/2023 SOUTHERN CALIFORNIA EDISON 050123 - Acct #700162476559 Street Lights, Traffic Control, Mar & Apr '23
100-356-631900 4,327.83
05/11/2023 MOULTON NIGUEL WATER DISTRICT 042723a Water Usage, Public Works, Apr '23 100-355-635000 85.59 05/11/2023 COX COMMUNICATION 042823 WiFi, Community Center, Apr '23 100-195-630000 224.25 05/11/2023 COX COMMUNICATION 041723 T-1 Line, Apr '23 100-195-630000 582.84 05/11/2023 MOULTON NIGUEL WATER DISTRICT 042723 Water Usage, Public Works, Apr '23 100-355-635000 8,454.15 05/11/2023 FIRST STUDENT, INC. 00007348 1/2 Marathon Expense, Apr '23 100-310-695507 4,400.00 05/11/2023 DOCU-TRUST 0049741 Offsite Data Storage, Apr '23 100-155-700030 180.85 05/10/2023 HIGH LEVEL SECURITY SOLUTIONS,
INC.
5572 Private Security Patrol, May '23 100-420-720850 16,109.63 05/11/2023 SOUTHERN CALIFORNIA NEWS 0000564674 Legal Advertising, Apr '23 100-155-624001 2,462.84 05/04/2023 SANDOVAL, JESSICA PSV-0043 Refund, Citation #LH010005714 100-000-460100 42.00 05/10/2023 HIGH LEVEL SECURITY SOLUTIONS,
INC.
5569 Private Security Patrol, Apr '23 100-420-720850 975.00 Payables Detail Report Payment Dates: 04/28/2023 - 05/11/2023 Payment Date Vendor Name Payable Number Description (Payable) Account Number

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Attachment: Payables Detail Report - May 23, 2023 (3164 : Warrant Register, May 23, 2023) Amount
5/11/2023 6:39:26 PM Page 3 of 5
05/11/2023 RACEWAY FORD, INC 050923 2023 Ford F-150 Hybrid, Community Development
214-225-900000 54,136.87
Fund 214 - AB 2766 Total: 54,136.87
Grand Total: 1,118,797.58
05/11/2023 CHARLES ABBOTT ASSOCIATES, INC 65713 Road Maintenance, Apr '23 212-355-720400 22,949.36 Fund 212 - MEASURE M Total: 23,100.38
Fund: 214 - AB 2766
05/04/2023 UNDERGROUND SERVICE ALERT OF

SO CALIFORNIA
22-2303804 Street Maintenance, Apr '23 212-355-720400 37.77 05/04/2023 UNDERGROUND SERVICE ALERT OF

SO CALIFORNIA
420230382 Street Maintenance, Apr '23 212-355-720400 113.25 05/11/2023 COUNTY OF ORANGE STTM001046 Communications Charges, 2/1/23 - 2/28/23
100-420-646000 738.70
Fund 100 - GENERAL FUND Total: 1,041,560.33
Fund: 212 - MEASURE M
Payables Detail Report Payment Dates: 04/28/2023 - 05/11/2023 Payment Date Vendor Name Payable Number Description (Payable) Account Number 05/11/2023 OCSD LAW ENFORCEMENT

CONTRACT, OC TREASURER-TAX
SH 65231 Law Enforcement Services, May '23 100-420-720800 809,845.47

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Attachment: Payables Detail Report - May 23, 2023 (3164 : Warrant Register, May 23, 2023) 5/11/2023 6:39:26 PM Page 4 of 5
212-355-720400 Street Maintenance 23,100.38 23,100.38
214-225-900000 Vehicles 54,136.87 54,136.87
Grand Total: 1,118,797.58 1,118,797.58
100-420-720823 Parking Citation Processing 3,393.07 3,393.07 100-420-720835 Fingerprint Identification Svc 1,188.00 1,188.00 100-420-720850 Private Security Patrol 17,084.63 17,084.63 100-420-646100 Maint & Repairs - Vehicles 1,626.47 1,626.47 100-420-720800 General Law Enforcement 809,845.47 809,845.47 100-420-720822 Crossing Guard Services 7,170.48 7,170.48 100-356-631900 MOE Electrcity On-bill Financing 4,327.83 4,327.83 100-420-613100 Vehicle-Fuel 215.56 215.56
100-420-646000 Maint & Rep-Equip & Machinery 738.70 738.70 100-355-720700 Landscape Maintenance Contract 87,832.95 87,832.95 100-355-720701 Parks Contract Repair 322.70 322.70
100-356-631400 MOE Electricity-Streetlights & 26,979.82 26,979.82 100-355-646100 Maint & Repairs - Vehicles 16.00 16.00
100-355-720401 Other Public Works Maintenance 5,775.00 5,775.00 100-355-720500 Graffiti Removal 1,674.90 1,674.90
100-355-613100 Vehicle-Fuel 428.04 428.04
100-355-631000 Utilities - Electric 715.42 715.42
100-355-635000 Utilities - Water 14,148.38 14,148.38
100-310-645500 Maint&Repair-Facility Comm Ctr 350.00 350.00 100-310-695500 Special Events-Program Service 975.62 975.62 100-310-695507 Marathon 5k 14,400.00 14,400.00
100-310-622005 Operating Supplies Comm Ctr 206.33 206.33 100-310-624500 Advertising-Program Services 436.39 436.39 100-310-641000 Rent/Lease - Equipment 341.83 341.83
100-225-613100 Vehicle-Fuel 314.54 314.54
100-225-700225 Housing Element 9,250.00 9,250.00
100-310-613100 Vehicle-Fuel 302.28 302.28
100-195-622000 Operating Supplies 223.74 223.74
100-195-630000 Telephone & Communication 1,709.25 1,709.25 100-195-641000 Rent/Lease - Equipment 530.22 530.22
100-155-700011 Legal Services-Litigation 20,163.45 20,163.45 100-155-700030 Professional Svcs- City Clerk 180.85 180.85 100-195-617000 Recruitment 152.00 152.00
100-155-612002 Travel - ACC-OC 651.39 651.39
100-155-624001 Advertising - Legal 2,462.84 2,462.84
100-155-625000 Postage & Delivery 212.82 212.82
100-000-451100 Recreation Fees-Reservation 2,230.00 2,230.00 100-000-460100 Parking Revenues 692.00 692.00
100-155-612000 Travel, Conferences & Meetings 117.00 117.00 100-000-223000 Plan Application Deposit 300.09 300.09
100-000-229100 Trust Account - VALH Project - 34.27 34.27 100-000-451000 Recreation Fees 90.00 90.00
Grand Total: 1,118,797.58 1,118,797.58
Account Summary
Account Number Account Name Expense Amount Payment Amount 100-000-222000 Refundable Deposits 1,750.00 1,750.00
100 - GENERAL FUND 1,041,560.33 1,041,560.33
212 - MEASURE M 23,100.38 23,100.38
214 - AB 2766 54,136.87 54,136.87
Payables Detail Report Payment Dates: 04/28/2023 - 05/11/2023 Report Summary
Fund Summary
Fund Expense Amount Payment Amount

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Attachment: Payables Detail Report - May 23, 2023 (3164 : Warrant Register, May 23, 2023) **None** 1,118,797.58 1,118,797.58
Grand Total: 1,118,797.58 1,118,797.58
5/11/2023 6:39:26 PM Page 5 of 5
Payables Detail Report Payment Dates: 04/28/2023 - 05/11/2023 Project Account Summary
Project Account Key Expense Amount Payment Amount

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Attachment: Payables Detail Report - May 23, 2023 (3164 : Warrant Register, May 23, 2023) City of Laguna Hills
City Council/Planning Agency
Staff Report
DATE: May 23, 2023
TO: Mayor and Council Members
FROM: Eric Hendrickson
Finance Director
ISSUE: Treasurer's Investment Report for April 2023
RECOMMENDATION: That the City Council receive and file the Treasurer's Investment Report for the month of April 2023.

SUMMARY:

The Treasurer’s Investment Report for the month of April 2023 is submitted herewith.

The City’s total portfolio as of April 30, 2023, was $28,091,604. The pooled cash portfolio managed by the City Treasurer consisted of cash on hand, demand deposits, State Local Agency Investment Fund (LAIF) and Investment Trust of California (CalTRUST) investments and totaled $26,442,960. Restricted cash and investments totaled $1,648,644, and is mainly comprised of reserve funds for the 2010 bond issuance.

Interest income for the month of April was $149,625. FY 2022/2023 year-to-date interest earnings of $390,763 are 391% of the annual budget of $100,000.

The average yield on the City’s total portfolio for the month of April was 4.13%, compared to the prior month of 3.87%. The improvement in portfolio yield in April compared to March was the result of the rising interest rate environment, as dictated by the Federal Reserve, along with City staff maximizing available cash into the higher yielding CalTRUST option.

ATTACHMENTS:
• April 2023 Treasurer's Report

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Attachment: April 2023 Treasurer's Report (3165 : Treasurer's Report for April 2023)

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Attachment: April 2023 Treasurer's Report (3165 : Treasurer's Report for April 2023)

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Attachment: April 2023 Treasurer's Report (3165 : Treasurer's Report for April 2023)

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Attachment: April 2023 Treasurer's Report (3165 : Treasurer's Report for April 2023) City of Laguna Hills
City Council/Planning Agency
Staff Report
DATE: May 23, 2023
TO: Mayor and Council Members
FROM: Eric Hendrickson
Finance Director
ISSUE: Financial Statements for Fiscal Year Ending June 30, 2022 RECOMMENDATION: That the City Council receive and file the Annual Comprehensive Financial Report and other audit reports for fiscal year 2021/2022.

SUMMARY:

The certified public accounting firm of Eide Bailly was engaged by the City to perform the audit of the City’s financial statements and render an opinion as to whether the City’s fiscal year 2021/2022 financial statements are presented fairly in all material respects. Attached to this report are the final audit reports issued by the auditors.

In the opinion of the auditors, the attached financial statements present fairly, in all material respects, the financial position of the governmental activities, the businesstype activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2022, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with generally accepted accounting principles.

The financial section, which is the focal point of the Annual Comprehensive Financial Report (ACFR), is comprised of the independent auditors’ report, management’s discussion and analysis, and the financial statements. Along with the ACFR, are the other audit reports, including the Gann Appropriations Limit AUP, Governance Letter, and Single Audit Report.

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Financial Statements for Fiscal Year Ending June 30, 2022 May 23, 2023

Page 2 ends

The City's General Fund ended the year on a positive note, with revenues exceeding expenditures by $4,967,870. This increase brought the General Fund balance total to $13,794,449 as of June 30, 2022. These results are attributable to better than expected property tax and sales tax receipts, City staff monitoring expenditures, and the influx of cash from the first payment of the American Rescue Plan money.

ATTACHMENTS:
• City of Laguna Hills 2022 Final ACFR
• City of Laguna Hills 2022 Final GANN Limit AUP Report • City of Laguna Hills 2022 Final Single Audit Report
• City of Laguna Hills 2022 Final Governance Letter

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Annual Comprehensive Financial Report
Fiscal Year Ended June 30, 2022
California

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Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022)

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Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022)

ANNUAL COMPREHENSIVE FINANCIAL REPORT
Fiscal Year Ended June 30, 202

CITY OF LAGUNA HILLS
California
CITY MANAGER
Jarad Hildenbrand

FINANCE DIRECTOR
Eric Hendrickson

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Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Table of Contents
June 30, 2022

INTRODUCTORY SECTION
Certificate of Achievement for Excellence in Financial Reporting (GFOA)........................................................... i Letter of Transmittal ........................................................................................................................................ ii Organizational Chart ...................................................................................................................................... viii Elected Officials ............................................................................................................................................... ix Management Staff ........................................................................................................................................... ix

FINANCIAL SECTION
Independent Auditor’s Report ............................................................................................................................. 1 Management’s Discussion and Analysis ............................................................................................................... 5 Basic Financial Statements
Government Wide Financial Statements
Statement of Net Position .............................................................................................................................. 18 Statement of Activities ................................................................................................................................... 19 Fund Financial Statements
Balance Sheet - Governmental Funds ............................................................................................................. 21 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position ........................... 22 Statement of Revenues, Expenditures and Changes in Fund Balances ............................................................ 23 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ....................................................................................... 24 Proprietary Fund Financial Statements
Statement of Net Position – Proprietary Fund ................................................................................................ 25 Statement of Revenues, Expenses, and Changes in Fund Net Position – Proprietary Fund .............................. 26 Statement of Cash Flows – Proprietary Fund .................................................................................................. 27 Notes to Financial Statements ........................................................................................................................... 28 Required Supplementary Information
Schedule of Proportionate Share of the Net Pension Liability ......................................................................... 63 Schedule of Contributions .............................................................................................................................. 64 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – General Fund ...... 65 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – ARPA Special Revenue Fund ................................................................................................................................................ 66 Note to Required Supplementary Information ................................................................................................... 67 Supplementary Information
Non-Major Governmental Funds – Special Revenue:

Combining Balance Sheet ............................................................................................................................... 70 Combining Statement of Revenues, Expenditure, and Changes in Fund Balances ........................................... 75

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Table of Contents
June 30, 2022
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Capital Projects Fund – Major Fund ................................................................................................................ 80 CARES Act Special Revenue Fund ................................................................................................................... 81 Gas Tax Special Revenue Fund ....................................................................................................................... 82 Measure M Special Revenue Fund ................................................................................................................. 83 SB1 RMRA Special Revenue Fund ................................................................................................................... 84 AB 2766 Special Revenue Fund ...................................................................................................................... 85 Senior Mobility Program Special Revenue Fund ............................................................................................. 86 Beverage Recycling Special Revenue Fund ..................................................................................................... 87 CR&R Recycling Special Revenue Fund ........................................................................................................... 88 C & D Forfeited Deposits Special Revenue Fund ............................................................................................. 89 CASP Fund ..................................................................................................................................................... 90 Grants and Contributions Special Revenue Fund ............................................................................................ 91 SLESF/COPS Brulte Special Revenue Fund ...................................................................................................... 92 Debt Service Fund – Major Fund .................................................................................................................... 93

STATISTICAL SECTION
Financial Trends:

Net Position by Component ....................................................................................................................... 95 Change in Net Position ............................................................................................................................... 96 Governmental Activities Tax Revenues By Source....................................................................................... 98 Fund Balances of Governmental Funds ...................................................................................................... 99 Changes in Fund Balances of Governmental Funds ................................................................................... 100 Revenue Capacity:

Assessed Value and Estimated Actual Value of Taxable Property .............................................................. 102 Assessed Value of Property by Use Code, Citywide ................................................................................... 103 Direct and Overlapping Property Tax Rates .............................................................................................. 104 Principal Property Taxpayers .................................................................................................................... 105 Property Tax Levies and Collections ......................................................................................................... 106 Principal Sales Tax Producers ................................................................................................................... 107 Debt Capacity:

Ratios of Outstanding Debt by Type ......................................................................................................... 108 Ratios of General Bonded Debt Outstanding ............................................................................................ 109 Direct and Overlapping Governmental Activities Debt .............................................................................. 110 Legal Debt Margin Information ................................................................................................................ 111 Pledged Revenue Coverage ...................................................................................................................... 112

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Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Table of Contents
June 30, 2022
Demographic and Economic Information:

Demographic and Economic Statistics ...................................................................................................... 113 Principal Employers .................................................................................................................................. 114 Operating Information:

Full-time Equivalent Personnel Allocation by Function ............................................................................. 115 Operating Indicators by Function ............................................................................................................. 116 Capital Asset Statistics by Function .......................................................................................................... 117 City at a Glance ................................................................................................................................................ 118

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Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) Introductory Section

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Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) ii
March 30, 2023
Honorable Mayor and
Members of the City Council:
he Annual Comprehensive Financial Report (ACFR) of the
City of Laguna Hills for the fiscal year ended June 30, 2022, is submitted herewith. This report is published in accordance with local ordinance and State law
requirements that financial statements be presented in conformity with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards by an independent public accounting firm of licensed certified public accountants.

This report consists of management’s representations concerning the finances of the City of Laguna Hills. Responsibility for the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the City’s management. It is management’s opinion that the data is accurate in all material aspects, is presented in a manner designed to fairly set forth the financial position and results of operations of the City, and contains all disclosures necessary to enable the reader to gain an understanding of the City’s financial affairs. 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, misuse, and to compile sufficient reliable information for the preparation of the financial statements in conformity with GAAP.

Because the cost of internal controls should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute assurance that the financial statements are free of material misrepresentation. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects and is reported in a manner that presents fairly the financial position and results of operations of the various funds of the City, as well as the City as a whole.

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Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) iii
The City’s financial statements have been audited by Eide Bailly, LLP, a public accounting firm fully licensed and qualified to perform audits of local government. The independent auditors concluded that there was a reasonable basis for rendering an unmodified opinion on the City’s financial statements and that the financial statements present fairly, in all material respects, the financial condition of the City at the end of this fiscal year.

A narrative introduction, overview and analysis of the basic financial statements for the City for the fiscal year ended June 30, 2022, is discussed in the Management’s Discussion and Analysis (MD&A), which immediately follows the independent auditor’s report. The MD&A is designed to complement this letter of transmittal and should be read in conjunction with it.

PROFILE OF THE CITY OF LAGUNA HILLS
The City of Laguna Hills is located in South Orange County approximately 60 miles south of Los Angeles and 70 miles north of San Diego. Incorporated in 1991 under the laws of the State of California, it enjoys all the rights and privileges pertaining to “General Law” cities. The City is home to approximately 30,750 residents and over 1,000 businesses.

The City of Laguna Hills operates under a Council-Manager form of government. Policymaking and legislative authority are vested in the City Council, which consists of a Mayor and a four-member Council.

The Mayor is annually selected by the City Council from among its membership, and serves a one-year term. The governing Council is responsible, among other things, for passing the City’s ordinances and operating resolutions, adopting the biennial budget, appointing commissions and committees, retaining the City Attorney and hiring the City Manager. The City Manager is the chief executive officer of the City and administers the daily operations and programs of the City through department heads, other staff members and contracted services.

The City contracts for selected municipal services utilizing agreements with other governmental entities, private firms and individuals. Police services are provided by the Orange County Sheriff’s Department and fire services are provided through the Orange County Fire Authority, of which the City is a member.

Although the majority of the area in the City has a distinctive residential character, the City has a strong commercial base,

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specifically in the northern section of the City. This commercial area, or “Urban Village,” is anchored by the regional Village at Laguna Hills, the Oakbrook Village Shopping Center, and the Saddleback Memorial Medical Center. In addition, the area north of the Village at Laguna Hills holds a complement of commercial, retail and office mixed-uses.

FACTORS AFFECTING FINANCIAL CONDITION
Faced with the COVID-19 pandemic and its economic fallout several years ago, the City has remained resilient and adaptable to the everchanging situation. Government-mandated shutdowns and stay-athome orders in 2020 were followed by high unemployment, supply chain issues, and global uncertainty in all markets. Soon thereafter, government stimulus funds, like the CARES Act and American Rescue Plan, helped prop the economy up and allowed
unemployment rates to drop. However, the large influx of cash into the financial system have caused massive spikes in inflation.

Orange County saw its unemployment rate rise from 2.8 percent in February 2020 to a high of 14.7 percent in May 2020, before dropping to 9.0 percent in September 2020 and 6.9 percent in June 2021. In Fiscal Year 2021-2022, the unemployment rate dropped even more, to 2.9 percent as of June 2022.

Overall, the pandemic has dramatically upended nearly every aspect of life. The resilience of the Southern California region indicates, however, that just as after the Great Recession, the region will recover. Unquestionably, the pandemic, inflation, and the associated economic impacts remain a fluid situation. Many economists are worried of an economic recession, given the challenges with inflationary prices, the tight labor market, an inverted yield curve on U.S. Treasury notes, and the likelihood that no further Federal stimulus funds are forthcoming. As a result, the Southern California region’s economic situation remains uncertain.

To maintain its strong financial position into the future, the City must continue to promote overall fiscal health and sustainability by adhering to its conservative financial policies, focusing on organizational efficiency and performance, and fiscally prudent decision-making. This financially conservative stance has played a critical role in allowing the City to respond quickly to difficulties that were prevalent in the economy as a result of the coronavirus pandemic, as well as to the previous economic downturn during the years of the Great Recession.

ECONOMIC

CONDITIONS &

OUTLOOK

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The City utilizes a customized 8-Year Resource Allocation plan that is specifically designed to project the City’s operating and reserve policy ratios over an eight-year forecast horizon. The City’s policy is to strive to maintain an operating ratio of 1.1 to 1.0, and an Unassigned General Fund Balance Ratio of 35% as compared to General Fund operating expenditures. Both of these benchmarks were achieved as of June 30, 2022. The operating ratio for FY 2021- 22 came in at 1.12 and the Unassigned Fund Balance ratio was 59%.

In developing the City’s accounting system, consideration was given to the adequacy of internal accounting controls, which are designed to provide reasonable, but not absolute, assurance in connection with: (1) the safeguarding of assets against loss from unauthorized use or disposition, and (2) the reliability of financial records for preparing financial statements and maintaining
accountability for assets. All internal control evaluations occur within the above framework. We believe the City’s internal accounting controls adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions.

Furthermore, the City maintains budgetary controls to ensure compliance with the legal provisions embodied in the annual appropriated budget approved by the City Council. The City Manager is authorized to transfer budgeted amounts within and between funds as deemed necessary in order to meet the City’s needs. Revisions that exceed the appropriated budget must be approved by the City Council.

The City invests its temporary idle cash in investments authorized under the City’s prevailing Investment Resolution and Policies, which are reviewed and approved annually. These policies are significantly more restrictive than State law, limiting investments to a maturity of one year or less. The City’s investments at the close of the most recent fiscal year ended June 30, 2022, consisted of fully insured or collateralized certificates of deposit with qualified banks, money market mutual funds, and investment pools with the State Treasurer’s Local Agency Investment Fund (LAIF) and Investment Trust of California (CALTrust).

Generally, only assets which cost $5,000 or more and which have a useful life of five years or more are considered capital assets. This designation is extensively discussed in the City’s Internal Control Policies and Procedures for Capital Assets and Minor Equipment, which were developed for the City’s compliance with the requirements with GASB 34.

LONG TERM

FINANCIAL PLANNING

ACCOUNTING SYSTEM

AND BUDGETARY

CONTROLS

CASH MANAGEMENT

CAPITAL ASSETS

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MAJOR INITIATIVES
The following section provides a sampling of some of the various initiatives and highlights occurring throughout the 2021-2022 fiscal year:

In March of 2016, the City approved a plan for the renovation of the Laguna Hills Mall which included approximately 860,000 square feet of new and renovated commercial retail space, movie theaters, restaurants, and 988 residential units. The approved plan was known as Five Lagunas. In 2018, the property owner of Five Lagunas, Merlone-Geier Partners (MGP), informed City staff that they could not move forward with the approved 2016 plan. On November 4, 2019, MGP submitted a new application to redevelop the site. The new project, named “The Village at Laguna Hills”, was presented to the City Council by MGP at the November 12, 2019, City Council meeting.

On March 8, 2022, the City Council and Planning Agency approved “The Village at Laguna Hills” project. This project consists of demolition of the remaining mall property and buildings, along with development and construction of new retail buildings, residential buildings, a hotel, parking structures, and other infrastructure. As of June 30, 2022, the project is still under demolition; it is estimated to take many years before this major project is complete.

The California Department of Resources Recycling and Recovery (“CalRecycle”) finalized regulations for the implementation of Senate Bill (“SB”) 1383 in November 2020. SB 1383 requires local governments to reduce organic waste being sent to landfills. City staff began a concerted work effort in early 2021 to implement the requirements of SB 1383 and CalRecycle. Some of these efforts include:
● Negotiate a new contract with the City’s Franchise Waste Hauler, CR&R.
● Implement new and/or revised trash and recycling service fees.
● Establish an enforcement ordinance and policies to meet the requirements of SB 1383.
● Community outreach and education on the requirements of SB 1383.

THE VILLAGE AT

LAGUNA HILLS
(FORMERLY FIVE

LAGUNAS)
SB 1383 ORGANIC

WASTE REDUCTION

IMPLEMENTATION

WORK EFFORT

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Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) What inspires you, inspires us. | eidebailly.com
25231 Paseo De Alicia, Ste. 100 | Laguna Hills, CA 92653-4615 | T 949.768.0833 | F 949.768.8408 | EOE 1 Independent Auditor’s Report
To the Honorable Mayor and Members of the City Council
City of Laguna Hills
Laguna Hills, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Laguna Hills, California (City) as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2022, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Emphasis of Matter
Adoption of New Accounting Standard
As discussed in Note 1 to the financial statements, the City has adopted the provisions of Government Accounting Standards Board (GASB) Statement No. 87, Leases, for the year ended June 30, 2022.

Accordingly, a restatement has been made to the governmental activities, general fund, and enterprise – property leasing fund’s net position or fund balance as of July 1, 2021 to restate beginning net position/fund balance. Our opinions are not modified with respect to this matter.

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Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 2 Correction of an Error
As discussed in Note 16 to the financial statements, an error resulting in an overstatement of accumulated depreciation for proprietary assets as of June 30, 2021, was discovered by management of the City during the current year. Accordingly, a restatement has been made to net position of the enterprise – property leasing fund and business-type activities as of June 30, 2021, to correct the error.

Our opinions are not modified with respect to this matter.

Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America; and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of City’s internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

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Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 3 • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about City’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the schedule of proportionate share of the net pension liability, the schedule of contributions - defined benefit pension plans, and the schedule of revenues, expenditures and changes in fund balance - budget and actual - general fund and major special revenue funds, identified as Required Supplementary Information (RSI) in the accompanying table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual nonmajor funds financial statements and budgetary comparison schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor funds financial statements and budgetary comparison schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

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Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 4 Other Information
Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditor's report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 30, 2023, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of City’s 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 City’s internal control over financial reporting and compliance.

Laguna Hills, California
March 30, 2023

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Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) Management’s Discussion and Analysis

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Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 5 MANAGEMENT’S DISCUSSION AND ANALYSIS MANAGEMENT’S DISCUSSION AND ANALYSIS The management of the City of Laguna Hills offers the readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, June 30, June 30, June 30, 2022. We encourage readers to consider the information presented here in conjunction with the accompanying transmittal letter on page ii and the basic financial statements in the appropriate section.

Financial Highlights Financial Highlights
Government- Government-Wide
• The net position of the City of Laguna Hills at the close of the most recent fiscal year was $98,266,335. Of this amount, $8,438,626 is not restricted to a specific use or purpose. • After recording the value of the City’s infrastructure assets, net of accumulated depreciation, the net change in the City’s net position resulting from the most recent fiscal year’s operation was an increase of $4,944,552, or 5.3%.
• Total revenues from all sources were $31,345,823. Of this amount, $9,034,210, or 29%, was from program revenues and $21,606,030, or 71%, was from general revenues. • The total cost of all City programs and projects was $26,401,271. Approximately 18%, or $4,634,937, of this amount is attributable to depreciation on the City’s capital assets; 34%, or $9,005,866, is attributable to public safety; and, 26%, or $6,849,279, to public services. • The net pension liability reported as of June 30, 2022, for the City’s proportionate share of the net pension liability of all pension plans, was $1,943,651. Deferred inflows of resources related to pension plans was $2,117,375; and deferred outflows of resources related to pension plans was $1,149,869.
• The net position of governmental activities was $92,497,952 as of June 30, 2022, after recording the value of the City’s infrastructure assets, net of accumulated depreciation and long-term debt. • Governmental activities, which include certain capital projects and depreciation related to capital assets, increased the City’s net position by $5,635,511.

Fund Based Fund Based
• As of the close of the current fiscal year, the governmental funds reported combined ending fund balances of $17,856,016.
• Total non-spendable fund balances, amounts that are either not in spendable form or are legally or contractually required to be maintained, were $128,954. • Total spendable fund balances were $17,727,062. Of this amount, approximately 4% ($769,926 in total assigned) is constrained by the City’s intent to be used for a specific purpose and 24% ($4,226,804 in total restricted) is constrained in their use by external restrictions, such as by creditors, debt covenants, grantors, contributors, or by laws and regulations. This leaves a residual of $12,730,332 in unassigned fund balance for the City’s general fund. • Total governmental fund balances increased by $3,325,666.

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Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 6 • At the end of the most recent fiscal year, the total fund balance for the general fund was $13,794,449, an increase of $4,967,870 over prior year. • General fund reported revenues exceeded expenditures by $2,495,963.

Overview of the Financial Statements Overview of the Financial Statements This discussion and analysis are intended to serve as an introduction to the City of Laguna Hills’ basic financial statements. The City’s basic financial statements comprise three components: 1) governmentwide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statement themselves.
(1) Government- Government-wide financial statements wide financial statements wide financial statements. These statements are designed to provide readers with a broad overview of the City of Laguna Hills’ financial position, in a manner similar to a private-sector business, using the economic resources measurement focus and the full accrual basis of accounting.

The following reports comprise the government-wide financial statements:
a) Statement of Net Position. This report presents information on all the assets, deferred outflows of resources, liabilities, deferred inflows of resources, and net position. The difference between the assets and deferred outflows, on one hand, and liabilities and deferred inflows of resources, on the other hand, constitutes the 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 weakening, though it is important to consider other non-financial factors in accurately assessing the overall health of the City, such as the property tax base or condition of the roads, etc. b) Statement of Activities. The information presented in this report shows 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 expenditures are reported in this statement for some items that will only result in cash flows in future fiscal periods.

Both of these government-wide financial statements distinguish functions of the City that are principally supported by taxes, program revenues, and intergovernmental revenues (referred to as governmental activities), from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (referred to as business-type activities).

The governmental activities of the City of Laguna Hills include general government, public services, community development, community services and public safety. Property taxes, sales and use taxes, transient occupancy taxes, and franchise fees finance most of these activities.

The businessbusiness business- business-type activity activityactivity activity of the City of Laguna Hills pertains to the leasing of certain areas in the Laguna Hills Civic Center, which also houses City Hall.

The government-wide financial statements can be found on pages 18 to 20 of this report. (2) Fund financial statements. These statements show how City services were financed in the short term Fund financial statements. as well as what remains for future spending. These statements also report the City’s operation in more detail than the government-wide statements by providing information about the City’s most

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Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 7 significant funds, but not the City as a whole. Funds are required to be established, either by State or Federal laws, in order to meet legal responsibilities associated with the usage of certain taxes, grants, and other money. There are three types of funds, namely:
a) Governmental funds. The City maintains 19 individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balance for the general fund, Measure M fund, capital projects fund, and debt service fund, all of which are considered to be major funds. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each non-major governmental fund is provided in the form of combining statements elsewhere in this report.
b) Proprietary funds. When the City charges for the services it provides, other than those services associated with the City’s general governmental operations, these services are generally reported in proprietary funds. The proprietary fund is used to report the same function presented as the business-type activity in the government-wide financial statements. The City uses the proprietary fund to account for its Civic Center leasing activity.

The fund financial statements focus on the near-term inflows and outflows of spendable resources, as well as on balances of spendable resources at the end of the fiscal year. Such information provides a short-term view of the City’s general government operations and shows whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. These funds are reported using the modified accrual method of accounting, which measures cash and all other financial assets that can be readily converted to cash. The relationship between governmental activities and the governmental funds are reported in the reconciliation of government-wide and fund financial statements and in Note 1 in the Notes to the Basic Financial Statements.

The fund financial statements can be found on pages 21 to 27 of this report. (3) Notes to the basic financial statements. The notes provide additional information essential to a full Notes to the basic financial statements understanding of the data provided in the government-wide and fund financial statements. The notes to the basic financial statements can be found on pages 28 to 62 of this report. (4) Other Information. In addition to the basic financial statements and accompanying notes, this report Other Information also presents certain required supplementary information including budgetary comparison for the general fund, a schedule of proportionate share of the net pension liability, and a schedule of employer plan contributions. Additionally, the combining statements referred to earlier in connection with non-major governmental funds are presented immediately following the required supplementary information.

Government – Government –Wide Financial Analysis Financial Analysis Financial Analysis The City’s combined net position at the close of the most recent fiscal year ended June 30, 2022, was $98,266,335, as shown on Table 1 below. The City is able to report positive balances in all three categories of net position for the government as a whole, as well as for its separate governmental and business-type activities. The same situation held true for the prior fiscal year.

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Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 8 Table 1 Table 1 Table 1
Condensed Condensed Condensed Statement of Net Position Condensed Statement of Net Position Statement of Net Position (in thousands)
Governmental Business BusinessBusiness Business-type
Activities Activities Activities Activities Activities Activities Activities Activities Totals Totals Totals 2021 2022 2021 2022 2021 2022
Current and other assets $ 16,790 $ 21,218 $ 321 $ 1,615 $ 17,111 $ 22,833 Capital assets 79,999 79,469 5,578 5,556 85,577 85,025
Total assets 96,789 100,687 5,899 7,171 102,688 107,858 Total deferred outflows 1,358 1,224 - - 1,358 1,224
Long-term liabilities 8,602 3,654 - - 8,602 3,654
Other liabilities 2,249 2,845 102 94 2,532 2,939
Total liabilities 10,852 6,499 102 94 10,954 6,593
Total deferred inflows 433 2,914 - 1,309 433 4,223
Net position:

Net investment in capital assets 78,878 80,045 5,578 5,556 84,456 85,601 Restricted 3,894 4,227 - - 3,894 4,227
Unrestricted 4,090 8,226 219 212 4,309 8,438
Total net position $ 86,862 $ 92,498 $ 5,797 $ 5,768 $ 92,659 $ 98,266 By far the largest portion of the City’s net position (roughly $85.6 million, or 87% of total net position) reflects its net investment in capital assets, which is made up of: (1) capital assets (land, building, machinery, and equipment) less accumulated depreciation, any related debt used to acquire those assets that are still outstanding, and the unamortized bond premium, (2) outstanding deferred loss on refunding, and (3) the cash with fiscal agent held in reserve to secure the timely payment of principal and interest on the capital asset related debt. 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 and corresponding items, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. There is $1,282,860 in debt outstanding (including the unamortized debt premium) related to the acquisition and construction of these capital assets.

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Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 9 Another portion of the City’s net position, $4,226,804 (4% of the total net position), represents resources that are subject to external restrictions on how they may be used. The remaining balance of the City’s net position is unrestricted net position of $8,438,626 (9% of the total net position), which may be used to meet the City’s ongoing obligations to its citizens and creditors.

The City’s combined total assets at the close of the fiscal year was $107,858,349. Of this amount, $100,687,019, or 93%, represents assets from governmental activities and $7,171,330, or 7%, represents assets from business-type activities. By far the largest component of the City’s combined total assets is in the form of capital assets at $85,502,258, or 79%. The remaining $22,083,091 of combined total asset is largely in the form of cash and investment of $15,822,222 and restricted cash and investment of $1,784,112.

At the end of the fiscal year, the City’s combined total liabilities was $6,592,940, which was largely in the form of long-term liabilities of the City’s government activities at $3,654,401, or 55%. Long-term liabilities were mainly comprised of the City’s net pension liability of $1,943,651, or 53%, and $1,710,750, or 47%, in debt pertaining to Certificates of Participation for the 2010 Refinancing Project.

Deferred inflows and outflows reported in the Statement of Net Position represent an acquisition (revenue) or consumption (expense) of net position that applies to a future period and hence will not be recognized as an inflow or outflow of resources until that time. The reported deferred inflows of $4,223,339 and deferred outflows of $1,224,265 pertain to the City’s pension liability and leases. More information on the City’s pension plan can be found in Note 8, beginning on page 50 of this report.

The details of the changes in the City’s Net Position are shown in Table 2 Table 2 Table 2 on the following page.

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Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 10 Table 2 Table 2 Table 2
Statement of Changes in Net Position Statement of Changes in Net PositionPosition Position (in thousands)
Governmental Governmental Business BusinessBusiness Business-type Activities Activities Activities Activities Activities Activities Activities Activities Totals Totals Totals Totals 2021 2022 2021 2022 2021 2022
Revenues:

Program Revenues:

Charges for services $ 2,818 $ 2,501 $ 619 $ 706 $ 3,437 $ 3,207 Operating contributions 3,170 6,294 - - 3,170 6,294
Capital contributions - 239 - - - 239
General Revenues:

Property taxes 11,931 12,341 - - 11,931 12,341
Sales and use taxes 5,826 6,941 - - 5,826 6,941
Franchise taxes 1,218 1,252 - - 1,218 1,252
Transient occupancy taxes 679 1,021 - - 679 1,021
Motor vehicle in lieu taxes 23 36 - - 23 36
State subvention 10 - - - 10 -
Interest earnings 3 (117) - - 3 (117)
Miscellaneous revenues 217 133 - - 217 133
Total revenues 25,895 30,641 619 706 26,514 31,347
Expenses:

General government 4,468 3,319 - - 4,468 3,319
Public services 6,727 6,849 - - 6,727 6,849
Community development 2,270 1,763 - - 2,270 1,763
Community services 3,372 4,028 - - 3,372 4,028
Public safety 9,106 9,006 - - 9,106 9,006
Property leasing - - 1,312 1,397 1,312 1,397
Interest 119 41 - - 119 41
Total expenses 26,062 25,005 1,312 1,397 27,375 26,402
Change in net position before
transfers (167) 5,636 (694) (691) (860) 4,945
Transfers - - - - - -
Change in net position (167) 5,636 (694) (691) (860) 4,945 Net position, beginning
(with Prior Period Adj.) 87,029 86,862 6,490 6,459 93,519 93,322 Net position, ending $ 86,862 $ 92,498 $ 5,796 $ 5,768 $ 92,659 $ 98,266

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Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 11 During the fiscal year, the total revenue from all sources was $31,345,823and the cost of all activities was $26,401,271, resulting in an overall increase in net position of $4,944,552. The City’s governmental activities increased total net position by $5,635,511 and its business-type activities decreased total net position by $690,959.

The revenue sources from governmental activities presented in the preceding table are illustrated in a pie chart shown below as Figure 1 Figure 1Figure 1 Figure 1, which illustrates the percentage relationship of these revenues to each other, as well as their impact on the City’s total resources.

Figure 1Figure 1 Figure 1 Figure 1
Revenue by Sources – Revenue by Sources –Governmental Activities Governmental Activities Governmental Activities FY2021/22
As shown in the above pie chart, roughly 70%, or $21,554,295 of the City’s total governmental revenues are from taxes, comprised of property, sales and use, motor vehicle in lieu, franchise and transient occupancy taxes. Program revenues totaled $9,034,210, or 30%, of the total revenue resources, which is comprised of charges for services and operating contributions. Increases from the prior year in property taxes, sales taxes, franchise fees, and transient occupancy taxes were realized in Fiscal Year 21/22.

Transient occupancy taxes increased 51% over the prior year – increasing from $678,706 to $1,021,089.

This is a result of improvements in the travel and leisure industry after the easing of COVID-19 related travel restrictions. Sales taxes improved by 19% over the prior year – increasing from $5,825,883 to $6,940,812. This increase is mainly due to an economy saturated with federal stimulus funds and an increase in the price of taxable goods due to inflationary factors.

The City’s expenses in connection with its governmental activities are categorized by function, namely:
general government, public services, community development, community services and public safety. The program revenues associated with these governmental activities are classified into three categories, which are charges for services, operating contributions, and capital contributions. The relationship of the City’s program revenues to the related governmental functions are illustrated in a graph shown as Figure 2on the following page.

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Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 12 Expenses associated with governmental activities experienced an overall decrease of 4%, or $1,057,634 over the prior fiscal year, in an effort to manage costs to offset the economic impacts of the COVID-19 pandemic and uncertainty in the economy. This decrease is largely attributable to reductions in General Government activity of $1,149,651, Community Development of $507,811, Public Safety of $100,445, and interest expense on long-term debt of $77,948. Expenses increased over the prior fiscal year in Public Services (Public Works) activity by $122,271, and Community Services by $655,950, due to the reopening of facilities and community activities after the COVID-19 pandemic.

The City’s business-type activities for the leasing of the Civic Center decreased total net position by $690,959. The decrease from business-type activities is largely attributable to depreciation. Of the $1,396,618 of total operating expenses related to property leasing activities, depreciation represents 55%, or $761,720, of that total.

Program Revenues and Expenses:

Program revenues for the most recent fiscal year were $9,034,210. Expenses related to governmental activities were $25,004,653. The program revenues are generally not adequate to finance the governmental programs, so it is typical for governmental expenses to be subsidized by general revenues. The City’s expenses for public services and public safety are comparatively higher than the other expense categories, as shown in Figure 2 Figure 2Figure 2 Figure 2below. The interest on long-term debt was $40,507.

Figure2
B u s i n e s s - B u s i n e s s u s i n e s sB u s i n e s s- t y p e A c t i v i t i e s t y p e A c t i v i t i e s t y p e A c t i v i t i e s The City’s business-type activity involves the leasing of rentable areas in the Civic Center building. This 3- story building complex was renovated to accommodate the City offices and to add leasable spaces. Since June 28, 2004, the City government has operated from this facility. Altogether, there are 51,945 square feet of leasable office space in the Civic Center building. The City occupies 21,033 square feet and leases out 30,912 square feet. The occupancy rate was approximately 87% on June 30, 2022.

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Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 13 During the most recent fiscal year, the operating revenues of the Laguna Hills Civic Center were $705,583 and the operating expenses were $1,396,618, resulting in a net operating loss of $691,035, which is largely attributable to depreciation charge of $761,720. After interest income of $76, the change in net position at fiscal year-end was $(690,959). The net cash provided by the leasing operating activities was $70,761. The contra rent revenue associated with the occupied spaces for City Hall was $549,965 for the current fiscal year.

Analysis of Major Funds
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities and objectives. As noted earlier, the City of Laguna Hills uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental funds: Governmental funds:

Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, the focus of the governmental funds is to provide information on near-term inflows and outflows, as well as the balances of spendable resources at the end of the fiscal year. Such information is useful in assessing the City of Laguna Hills’ near term financing requirements. In particular, fund balances of the governmental funds are reported separately within classifications based on a hierarchy of constraints placed on the use of those resources. The classifications are based on the relative strength of the constraints that control how the specific amounts can be spent. The classifications are nonspendable, restricted, committed, assigned, and unassigned fund balance.

As of the end of the current fiscal year, the City’s governmental funds reported combined ending fund balance of $17,856,016, an increase of $3,325,666 from the prior year’s balance. Of the ending fund balance, $128,954 is non-spendable fund balance, which represents the portion of fund balance that is either not in spendable form or are legally or contractually required to be maintained. Of the remaining $17,727,062 in spendable fund balance, $4,226,804 is restricted fund balance, $769,926 is assigned fund balance and $12,730,332 is unassigned fund balance. Restricted fund balance includes amounts that have externally imposed restrictions on their usage by creditors, such as debt covenants, grantors, and contributors, or by laws and regulations. Assigned fund balance includes amounts which are constrained by the City’s intent to be used for a specific purpose. These include designations for claims liability and amounts assigned for equipment maintenance of the Civic Center, Community Center, Sports Complex, slopes, storm drains, and various parks.

The City identifies “major” governmental funds within the fund financial statements. Funds are reviewed annually to determine if any should be classified as a major fund. Specifically, funds that have 10% or more of total assets, liabilities, or fund balance of total governmental funds. The City may also classify as a major fund any fund or combination of funds that is considered essentially important to users.

The General Fund is the City’s primary operating governmental fund. The fund balance of the City’s general fund increased by $4,967,870 from the prior fiscal year’s balance. This is largely attributable

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Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 14 to the receipt of the first half of American Rescue Plan funds. The City spent these funds to partially pay for the Orange County Sheriff costs.

The Measure M Fund accounts for revenues and expenditures for road improvements and transportation system maintenance financed through an Orange County half-cent sales tax for transportation improvements as administered through the Orange County Transportation Authority (OCTA). Revenues and transfers out to other funds reflect financial resources are allocated to fund expenditures reported in other funds. During the fiscal year, the City recorded $731,430 from Measure M2 revenues and $930 in investment income. The City spent these restricted funds mainly on road maintenance and street sweeping costs.

The City’s capital projects fund accounts for financial resources related to the acquisition and construction of the City’s capital projects. Revenues and transfers in from other funds reflect the financial resources used to fund the capital project expenditures during the current fiscal year; therefore, this fund typically reflects no fund balance at the end of the fiscal year. Total expenditures and transfers in for the current fiscal year were $3,400,224. The largest capital expenditure during the current year was the Annual Street Maintenance Project CIP #101, which totaled $2,664,626, or 78% of the total capital improvement expenditures for the fiscal year, with the primary source of funding from the Gas Tax Fund and SB1 RMRA Fund.

The City’s debt service fund reports current financial resources restricted for the payment of principal and interest for long-term debt. As of the end of the current fiscal year, the debt service fund reported $1,787,496 in fund balance. Of the total fund balance, $1,787,496 is restricted to meet the reserve requirement under the Trust Agreement of the Certificates of Participation for the 2010 Refinancing Project. Pursuant to the Agreement, a reserve fund was established by the trustee, The Bank of New York Mellon Trust Company, N.A., to further secure the timely payment of principal and interest. All interest or income received by the investment of the reserve fund is required to be retained in the reserve fund. Only to the extent the reserve requirement is satisfied, may amounts in the reserve fund be allocated toward lease payments. Interest income for the current fiscal year was $(16,315) – a negative amount due to a fair market valuation on the assets at year end.

Proprietary fund: Proprietary fund:

The proprietary fund provides the same type of information found in the government-wide financial statements. The City’s proprietary fund consists of owning a piece of commercial real estate and leasing it to various entities. The total square footage of the Civic Center building is 51,945. The City is a tenant using approximately 21,033 square feet of the building.

The statement of revenues, expenses, and changes in net position reflect a net operating loss of $691,035, before the interest income of $76. The net effect is a decrease in the ending net position of $690,959, which is largely attributable to depreciation. Before accounting for $761,720 in depreciation expense, the net operating activity would result in a net operating income of $70,761 from the City’s other leasing related activities. Moreover, the enterprise fund does not charge the City rent and common area maintenance (CAM). The estimated annual rent for the space occupied by City Hall would be approximately $549,965, not including CAM.

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Packet Pg. 96
Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 15 G e n e r a l F u n d B u d g e t a r y H i g h l i g h t s G e n e r a l F u n d B u d g e t a r y H i g h l i g h t s At fiscal year-end, total general fund revenues came in at $24,163,211, which was roughly 8%, or $1,826,474, above the amended budget for the year. This substantial increase was a result of the economy bouncing back after being impacted by the COVID-19 pandemic in the prior year. Higher than anticipated property taxes, sales taxes, transient occupancy taxes, and franchise fees materialized in Fiscal Year 2021/2022. Also, community services revenues came in higher than the prior year, as programs, classes, and facilities began to re-open after the mandated stay-at-home orders and shutdowns.

Revenues from taxes, the City’s largest general fund revenue source, came in over budget by $1,698,423, or 8%, primarily due to sales taxes and property taxes coming in higher than anticipated. Additionally, licenses and permits, the City’s second largest general fund revenue source, came in higher than budgeted by $543,560, due to increased demand for building permits. Investment income resulted in a negative $241,330, due to a fair market valuation adjustment at year end. Due to the rising interest rate environment, investments held at the State Local Agency Investment Fund were carrying a market loss.

This investment loss is considered unrealized, and is only presented for financial statement purposes.

Given the indication that COVID-19 pandemic was going to have a significant negative affect on general fund revenues, a concerted effort was made to lower general fund expenditures to offset a portion of the negative impact. General fund expenditures totaled $21,667,248 at fiscal year-end, below budget by $563,700, or 2.5%. The largest budgetary savings by department was from Public Safety, which came under budget by $446,896. This was mainly due to a credit received on the final Sheriff’s invoice, in which overtime and vacancy credits are trued up for the fiscal year.

The net change in fund balance at fiscal year-end in the General Fund was $4,967,870, which exceeded budget by $2,255,751. The main reason for this transfer, as noted above, is better than expected property taxes and sales taxes, along with a one-time transfer of American Rescue Plan funds into the General Fund.

Capital Assets and Debt Administration Capital Assets and Debt Administration C a p i t a l A s s e t s C a p i t a l A s s e t s
The City’s investment in capital assets for its governmental and business-type activities as of June 30, 2022 amounted to $85,025,258, net of accumulated depreciation. This investment includes land, land improvements, easements, right-of-ways, building, building improvements, equipment, machinery, construction in progress, and infrastructure. In accordance with the requirement of GASB 34, the value of the City’s infrastructure assets are included in this report, which include streets, sidewalks, curbs, gutters, playground equipment, and similar assets that are considered public property. Equipment and machinery includes vehicles, furniture, computer hardware and software.

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Packet Pg. 97
Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 16 A schedule showing the changes in the City’s capital assets are shown in Table 3 below.

Table 3 Table 3 Table 3
City of Laguna Hills Capital Assets (Net of City of Laguna Hills Capital Assets (Net of (Net of (Net of accumulated accumulated accumulated depreciation) depreciation) depreciation) (in thousands)
Governmental Governmental Governmental Business BusinessBusiness Business-type Activities ActivitiesActivities Activities Activities ActivitiesActivities Activities * Totals 2021 2022 2021 2022 2021 2022
Land $ 17,955 $ 17,955 $ 2,855 $ 2,855 $ 20,810 $ 20,810 Land improvements 2,760 1,509 - - 2,760 1,509
Rights of ways/Easements 2,854 2,854 - - 2,854 2,854
Building & improvements 1,446 1,092 2,722 2,701 4,168 3,793 Equipment and machinery 206 261 - - 206 261
Construction in progress - - - - - -
Infrastructure 54,778 55,798 - - 54,778 55,798
Total capital assets
net of accumulated
depreciation $ 79,999 $ 79,469 $ 5,577 $ 5,556 $ 85,576 $ 85,025 * As restated at June 30, 2022
Additional information on the City’s capital assets can be found in Note 5 on page 43 of this report.

Long - term Debt term Debtterm Debt term Debt
On January 26, 2010, to take advantage of favorable interest rates, the City issued $17,190,000 of Certificates of Participation (COPs). Proceeds from the sale were placed in an irrevocable trust used to service the future debt requirements of the 2001 and 2003 Certificates of Participation, which were issued to finance a portion of the costs to develop certain property, including the Civic Center Renovation Project and Community Center. As a result, the balance of the 2001 and 2003 COPs are considered to be defeased and the liability for those bonds has been removed. At fiscal year-end June 30, 2022, the remaining principal balance was $1,075,000. The 2010 COPs maintain a “AA+” rating from Standard & Poor’s. Additional information on the City’s long-term debt can be found in Note 6 on pages 44 to 46 of this report.

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Packet Pg. 98
Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 17 Budget and Economic Factors Budget and Economic Factors The City’s most recent adopted biennial budget for fiscal years 2021/22 - 2022/23 demonstrates the City’s intent to effectively manage costs while simultaneously positioning the City for future growth. To mitigate the negative effects from the significant decrease in operating revenues, an extensive review of fiscal year 2021/22 expenditures, as well as one-time non-recurring revenue sources, were reviewed to offset the anticipated declines while the City continues to bounce back from the impacts from the COVID-19 pandemic. General Fund operating expenditures are projected at $22,125,948, while General Fund revenues is estimated at $22,236,737.

The major goals and issues that dominated the budget process for this 2021 – 2023 biennial period are discussed in the transmittal letter, along with measure adopted to address prevailing issues facing the City.

A copy of the 2021-2023 Biennial Budget is available on the City’s website: www.ci.laguna-hills.ca.us.

Requests for Information Requests for InformationInformation Information This financial report is designed to provide a general overview of the City of Laguna Hills’ finances to all interested parties. Any questions regarding this report or requests for additional information should be addressed to the City’s Finance Department, at 24035 El Toro Road, Laguna Hills, California, 92653. * * * * * *

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Packet Pg. 100 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) Basic Financial Statements

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Packet Pg. 102 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) See Notes to Basic Financial Statements 18
City of Laguna Hills, California
Statement of Net Position
June 30, 2022
Governmental Business-type
Activities Activities Total
Assets:

Cash and investments $ 15,600,881 $ 221,341 $ 15,822,222 Taxes receivable 2,100,905 - 2,100,905
Accounts receivable 50,818 55,203 106,021
Interest receivable 38,961 2,419 41,380
Lease receivable 793,586 1,336,157 2,129,743
Prepaid items 128,954 - 128,954
Due from other governments 719,754 - 719,754
Restricted cash and investments 1,784,112 - 1,784,112
Capital assets, not depreciated 20,809,536 2,855,425 23,664,961 Capital assets, net of accumulated
depreciation 58,659,512 2,700,785 61,360,297
Total assets 100,687,019 7,171,330 107,858,349
Deferred Outflows of Resources:

Deferred loss on refunding 74,396 - 74,396
Deferred amounts from pension plans 1,149,869 - 1,149,869 Total deferred outflows of resource 1,224,265 - 1,224,265 Liabilities:

Accounts payable 1,317,877 - 1,317,877
Accrued liabilities 166,769 44,079 210,848
Interest payable 20,250 - 20,250
Due to other governments 337,613 - 337,613
Deposits payable 483,089 44,251 527,340
Unearned revenue - 5,767 5,767
Noncurrent Liabilities:

Due within one year 518,844 - 518,844
Due in more than one year
Other long-term liabilities 1,710,750 - 1,710,750
Net pensions liability 1,943,651 - 1,943,651
Total liabilities 6,498,843 94,097 6,592,940
Deferred Inflows of Resources:

Deferred amounts from pension plans 2,117,375 - 2,117,375 Deferred amount from leases 797,114 1,308,850 2,105,964 Total deferred inflows of resources 2,914,489 1,308,850 4,223,339 Net Position:

Net investment in capital assets 80,044,695 5,556,210 85,600,905 Restricted for:

Public services 1,987,704 - 1,987,704
Community services 451,604 - 451,604
Debt service 1,787,496 - 1,787,496
Unrestricted 8,226,453 212,173 8,438,626
Total net position $ 92,497,952 $ 5,768,383 $ 98,266,335

4.6.a
Packet Pg. 103 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) See Notes to Basic Financial Statements 19
City of Laguna Hills, California
Statement of Activities
Year Ended June 30, 2022
Operating Capital Total
Charges for Contributions Contributions Program
Expenses Services and Grants and Grants Revenues
Governmental Activities:

General government $ 3,318,690 $ - $ - $ - $ -
Public services 6,849,279 787,032 2,349,871 239,224 3,376,127 Community development 1,762,606 1,042,546 - - 1,042,546 Community services 4,027,705 498,155 35,219 - 533,374
Public safety 9,005,866 173,454 3,908,709 - 4,082,163
Interest expenses 40,507 - - - -
Total governmental activities 25,004,653 2,501,187 6,293,799 239,224 9,034,210 Business-Type Activity:

Property leasing 1,396,618 705,583 - - 705,583
Total primary government $ 26,401,271 $ 3,206,770 $ 6,293,799 $ 239,224 $ 9,739,793 General Revenues:

Taxes:

Property taxes
Franchise tax
Transient occupancy tax
Intergovernmental, unrestricted:

Sales and use tax
Motor vehicle in lieu
Investment earnings (loss)
Miscellaneous revenue
Total general revenues
Change in Net Position
Net Position at Beginning of Year, as restated
Net Position at End of Year
Program Revenues
Functions/Programs

4.6.a
Packet Pg. 104 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) See Notes to Basic Financial Statements 20
City of Laguna Hills, California
Statement of Activities
Year Ended June 30, 2022
Governmental Business-type
Activities Activities Total
$ (3,318,690) $ - $ (3,318,690)
(3,473,152)- (3,473,152)
(720,060)- (720,060)
(3,494,331)- (3,494,331)
(4,923,703)- (4,923,703)
(40,507)- (40,507)
(15,970,443)- (15,970,443)
- (691,035) (691,035)
(15,970,443) (691,035) (16,661,478)
12,340,524- 12,340,524
1,251,870- 1,251,870
1,021,089- 1,021,089
6,940,812- 6,940,812
35,897- 35,897
(117,321) 76 (117,245)
133,083- 133,083
21,605,954 76 21,606,030
5,635,511 (690,959) 4,944,552
86,862,441 6,459,342 93,321,783
$ 92,497,952 $ 5,768,383 $ 98,266,335
Net (Expense) Revenue and Changes in Net Position

4.6.a
Packet Pg. 105 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) See Notes to Basic Financial Statements 21
City of Laguna Hills, California
Balance Sheet - Governmental Funds
June 30, 2022
ARPA Other
Special Revenue Capital Governmental
General Fund Projects Funds Totals
Assets:

Current Assets:

Cash and investments $ 13,299,951 $ - $ - $ 2,300,930 $ 15,600,881 Receivables:

Taxes 2,100,905 - - - 2,100,905
Accounts 49,195 - - 1,623 50,818
Interest 35,577 - 3,384 - 38,961
Leases 793,586 - - - 793,586
Prepaid items 128,954 - - - 128,954
Due from other funds 279,404 - - 3,384 282,788
Due from other governments 76,678 - - 643,076 719,754
Restricted Assets:

Cash and investments - - - 1,784,112 1,784,112
Total assets $ 16,764,250 $ - $ 3,384 $ 4,733,125 $ 21,500,759 Liabilities, Deferred Inflows of Resources,
and Fund Balances
Liabilities:

Accounts payable $ 1,195,131 $ - $ - $ 122,746 $ 1,317,877 Accrued liabilities 151,074 - - 15,695 166,769
Deposits 483,089 - - - 483,089
Due to other funds - - 3,384 279,404 282,788
Due to other governments 337,613 - - - 337,613
Total liabilities 2,166,907 - 3,384 417,845 2,588,136
Deferred Inflows of Resources:

Unavailable revenues 5,780 - - 253,713 259,493
Lease related 797,114 - - - 797,114
Total deferred inflows of resources 802,894 - - 253,713 1,056,607 Fund Balances:

Nonspendable 128,954 - - - 128,954
Restricted - - - 4,226,804 4,226,804
Assigned 769,926 - - - 769,926
Unassigned 12,895,569 - - (165,237) 12,730,332
Total fund balances 13,794,449 - - 4,061,567 17,856,016 Total liabilities, deferred inflows of
resources and fund balances $ 16,764,250 $ - $ 3,384 $ 4,733,125 $ 21,500,759

4.6.a
Packet Pg. 106 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) See Notes to Basic Financial Statements 22
City of Laguna Hills, California
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position Governmental Funds
June 30, 2022
Fund balances of governmental funds $ 17,856,016
Amounts reported for governmental activities in the statement of net position are different because:

Capital assets net of depreciation have not been included as financial resources in governmental fund activity
Capital assets 166,799,725
Accumulated depreciation (87,330,677)
Long-term liabilities are not available to pay for current-period expenditures and, therefore, are not reported in the governmental funds. Long-term liabilities consist of the following:

Certificates of participation (1,075,000)
Bond premium (207,860)
Direct borrowings (344,730)
Compensated absences (297,681)
Claims and judgments payable (304,323)
Deferred outflows of resources (loss on refunding of bonds) that have not been included in the governmental fund activity. 74,396 Accrued interest payable for the current portion of interest due on the Certificates of Participation has not been reported in the governmental funds. (20,250)
Pension related 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. Deferred outflows of resources and deferred inflows of resources related to pensions are only reported in the Statement of Net Position as the changes in these amounts affects only the government-wide statements for governmental activities:

Deferred outflows of resources 1,149,869
Deferred inflows of resources (2,117,375)
Net pension liability (1,943,651)
Revenues reported as deferred inflows in the governmental funds do not provide current financial resources but are recognized in the statement of activities. 259,493 Net Position of Governmental Activities $ 92,497,952

4.6.a
Packet Pg. 107 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) See Notes to Basic Financial Statements 23
City of Laguna Hills, California
Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds
Year Ended June 30, 2022
ARPA Other
Special Revenue Capital Governmental
General Fund Projects Funds Totals
Revenues:

Taxes $ 21,554,295 $ - $ - $ 54,843 $ 21,609,138
Licenses and permits 1,632,785 - - 121,293 1,754,078
Intergovernmental revenues 49,588 3,732,689 - 2,358,005 6,140,282 Charges for services 894,419 - - - 894,419
Fines and forfeitures 173,454 - - - 173,454
Investment income (loss) (141,330) 10,723 - (1,205) (131,812) Other revenues - - - 9,859 9,859
Total revenues 24,163,211 3,743,412 - 2,542,795 30,449,418 Expenditures:

Current:

General government 4,070,347 - - - 4,070,347
Public services 4,754,955 - 152,840 186,987 5,094,782
Community development 1,761,776 - - - 1,761,776
Community services 1,921,075 - 39,597 8,242 1,968,914
Public safety 8,988,518 - - 3,609 8,992,127
Capital outlay 78,017 - 3,207,787 57,520 3,343,324
Debt service:

Interest and fiscal charges - - - 129,922 129,922
Principal retirement 92,560 - - 1,670,000 1,762,560
Total expenditures 21,667,248 - 3,400,224 2,056,280 27,123,752 Excess (Deficiency) of Revenues
over (Under) Expenditures 2,495,963 3,743,412 (3,400,224) 486,515 3,325,666 Other Financing Sources (Uses):

Transfers in 7,666,600 - 3,400,224 1,794,469 12,861,293 Transfers out (5,194,693) (3,743,412) - (3,923,188) (12,861,293) Total other financing sources (uses) 2,471,907 (3,743,412) 3,400,224 (2,128,719) - Net Changes in Fund Balances 4,967,870 - - (1,642,204) 3,325,666 Fund Balances, Beginning of Year 8,826,579 - - 5,703,771 14,530,350 Fund Balances, End of Year $ 13,794,449 $ - $ - $ 4,061,567 $ 17,856,016

4.6.a
Packet Pg. 108 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) See Notes to Basic Financial Statements 24
City of Laguna Hills, California
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities Year Ended June 30, 2022
Net change in fund balances - total governmental funds $ 3,325,666 Amounts reported for governmental activities in the statement of activities are different because:

Governmental funds report capital outlays as expenditures. However, in the statement of activities, the costs of those assets are allocated over their estimated useful lives as depreciation expenses.

This activity is reconciled as follows:

Capital outlay, net of disposals 3,343,324
Depreciation and amortization expense (3,873,217)
Long-term debt proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the Statement of Net Position. Premiums associated with the issuance of long-term debt are reported as revenues in the governmental funds, but in the Statement of Net Position, the premiums are deferred and amortized throughout the period during which the related debt is outstanding. Repayment of principal is an expenditure in the governmental funds, but in the Statement of Net Position the repayment reduces long-term liabilities.

Principal payments 1,670,000
Amortization of bond premium 80,464
Direct borrowing principal payments 92,560
Deferred losses on refunding of long-term debt in the Statement of Net Position are deferred and amortized throughout the period during which the related debt is outstanding. (28,800)
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 the governmental funds.

Change in compensated absences 44,285
Change in claims and judgments payable 2,128
Change in accrued interest for Certificates of Participation 37,751 Net difference between pension expense recorded on the government wide statement of activities and contributions paid. 750,604 Revenues in the Statement of Activities that do not meet the "availability" criteria for revenue recognition are reported as deferred inflows of resources, unavailable revenues, in the governmental funds. This is the net change in deferred inflows of resources, unavailable revenues, from the prior year. 190,746 Change in net position of governmental activities $ 5,635,511

4.6.a
Packet Pg. 109 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) See Notes to Basic Financial Statements 25
City of Laguna Hills, California
Statement of Net Position – Proprietary Fund
June 30, 2022
Enterprise -
Property Leasing
Assets:

Current Assets:

Cash and investments $ 221,341
Receivables:

Accounts 55,203
Interest 2,419
Leases 1,336,157
Total current assets 1,615,120
Noncurrent Assets:

Capital assets not depreciated 2,855,425
Capital assets, net of accumulated depreciation 2,700,785 Total noncurrent assets 5,556,210
Total assets 7,171,330
Liabilities:

Current Liabilities:

Accrued liabilities 44,079
Deposits payable 44,251
Unearned revenue 5,767
Total current liabilities 94,097
Deferred Inflows of Resources:

Leases 1,308,850
Net Position:

Net investment in capital assets 5,556,210
Unrestricted 212,173
Total net position $ 5,768,383

4.6.a
Packet Pg. 110 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) See Notes to Basic Financial Statements 26
City of Laguna Hills, California
Statement of Revenues, Expenses, and Changes in Fund Net Position – Proprietary Fund Year Ended June 30, 2022
Enterprise -
Property Leasing
Operating Revenues:

Rental fees $ 678,862
Common area maintenance revenues 26,643
Other current service fees 78
Total operating revenues 705,583
Operating Expenses:

Direct operating expenses 607,247
Administrative and professional fees 27,651
Depreciation expense 761,720
Total operating expenses 1,396,618
Operating income (loss) (691,035)
Nonoperating Revenues:

Interest income 76
Change in Net Position (690,959)
Net Position at Beginning of Year, as restated 6,459,342 Net Position at End of Year $ 5,768,383

4.6.a
Packet Pg. 111 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) See Notes to Basic Financial Statements 27
City of Laguna Hills, California
Statement of Cash Flows – Proprietary Fund
Year Ended June 30, 2022
Enterprise -
Property Leasing
Operating Activities:

Receipts from tenants $ 379,949
Payments to suppliers for goods and services (635,903)
Net Cash Used for Operating Activities (255,954)
Capital and Related Financing Activities:

Acquisition of capital assets (77,408)
Cash received on lease receivables 229,900
Cash received for interest on lease receivables 20,647
Net Cash Provided by Capital and Related Financing Activities 173,139 Investing Activities:

Interest Received 76
Net Cash Provided by Investing Activities 76
Net Increase in Cash and Cash Equivalents (82,739)
Cash and Cash Equivalents at Beginning of Year 304,080
Cash and Cash Equivalents at End of Year $ 221,341
Reconciliation of cash and cash equivalents:

Operating loss $ (691,035)
Adjustments to reconcile operating loss to net cash
Provided by Operating Activities:

Depreciation expense 761,720
Recognition of lease income (280,273)
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (37,993)
Increase (decrease) in accrued liabilities (1,096)
Increase (decrease) in deposits payable 91
Increase (decrease) in unearned revenue (7,368)
Total adjustments 435,081
Net Cash Provided by (used for) Operating Activities $ (255,954) Schedule of Non-Cash Investing, Capital and Financing Activities Lease receivable and deferred inflows recognized on lessor lease transaction $ 427,746 Lease revenue recognized $ 27,307

4.6.a
Packet Pg. 112 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 28 City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
Note 1 - Reporting Entity and Summary of Significant Accounting Policies a) Summary of Significant Accounting Policies
The basic financial statements of the City have been prepared in accordance with generally accepted accounting principles as applicable to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles.

The Financial Reporting Entity
The City of Laguna Hills (the City) was incorporated on December 20, 1991 under the General Laws of the State of California. The City operates under a Council-Manager form of government and provides the following services: public safety, highways and streets, parks, solid waste, public improvements, planning and zoning, building and safety, community services, and general administrative services.

This report includes all fund types of the City (the primary government) and the Laguna Hills Public Improvement Corporation (the Corporation). The Corporation meets the definition of a component unit and is presented on a blended basis, as if it is a part of the primary government. Although it is a legally separate entity, the governing board of the Corporation is comprised of the same membership as the City Council. The City may impose its will on the Corporation, including the ability to appoint, hire, reassign, or dismiss management. There is also a financial benefit/burden relationship between the City and the Corporation.

The Corporation was established by the City Council on September 2, 1998. The Board of Directors of the Corporation is composed of the five members in connection with the acquisition, construction and improvement of public capital improvements. The activity of the Corporation is reported in the Debt Service Fund. Separate financial statements are not prepared for this blended component unit. 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. 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. Also, interfund services provided and used have not been eliminated.

4.6.a
Packet Pg. 113 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
29 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. The basis of accounting refers to when revenues and expenses are recognized in the accounts and reported in the financial statements. Under the accrual basis of accounting, revenues, expenses, gains, losses, assets, 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 non-exchange transactions are recognized in accordance with the requirements of GASB Statement No. 33.

The Statement of Activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. The types of transactions reported as program revenues for the City are reported in three categories: charges for service, operating grants and contributions, and capital grants and contributions.

Charges for services include revenues from customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function. Grants and contributions include revenues restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not properly included among program revenues are reported instead as general revenues.

Amounts paid to 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 governmentwide financial statements, rather than as another financing source. Amounts paid to reduce long-term indebtedness of the reporting government are reported as a reduction of the related liability, rather than as expenditures.

Reclassifications and Eliminations
Interfund balances must generally be eliminated in the government-wide statements, except for net residual amounts due between governmental and business-type activities. Amounts involving fiduciary funds should be reported as external transactions. Any allocations must reduce the expenses of the function from which the expenses are being allocated, so that expenses are reported only once - in the function in which they are allocated.

Fund Financial Statements
The underlying accounting system of the City is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, deferred inflows of resources, fund equity, revenues, and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.

4.6.a
Packet Pg. 114 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
30 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 non-major funds in the aggregate for governmental and enterprise funds. Fiduciary statements include financial information for fiduciary funds. Fiduciary funds of the City primarily represent assets held by the City in a custodial capacity for other individuals or organizations, of which none are reported in the current year.

Governmental Funds
In the fund financial statements, governmental funds are presented using the modified-accrual basis of accounting. Their revenues are recognized when they become measurable and available. 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. For this purpose, the City considers its general revenue, to be available if they are collected within 90 days of the end of the fiscal year. The City uses a 60-day and 180-day availability period for property tax and special revenue grants and contributions, respectively.

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 non-exchange 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.

Sales taxes, property taxes, franchise fees, gas taxes, motor vehicle in lieu fees, highway user’s taxes, transient occupancy taxes, grants and investment income associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period to the extent normally collected within the availability period. Other revenue items are considered to be measurable and available where cash is received by the government.

In the fund financial statements, governmental funds are presented using the current financial resources measurement focus. This means that only current assets, current liabilities, and deferred inflows of resources are generally 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.

Non-current portions of long-term receivables due to governmental funds are reported on their balance sheets in spite of their spending measurement focus.

Because of their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by non-current liabilities. Since they do not affect fund balance, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities.

4.6.a
Packet Pg. 115 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
31 Amounts expended to acquire capital assets are recorded as expenditures in the year that resources were expended, rather than as fund assets. The proceeds of long-term debt are recorded as other financing sources rather than as a fund liability. Amounts paid to reduce long-term indebtedness are reported as fund expenditures.

When expenditures are incurred, the City’s applies the most restrictive funds first; and then the City would use the appropriate funds in the following order: committed, assigned, and lastly unassigned amounts.

Proprietary Fund
The City’s enterprise fund is a proprietary fund. In the fund financial statements, the proprietary fund is presented using the accrual basis of accounting. Revenues are recognized when they are earned and expenses are recognized when the related goods or services are delivered. In the fund financial statements, the proprietary fund is presented using the economic resources measurement focus. This means that all assets and liabilities (whether current or non-current) associated with their activity are included on their statement of net position. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in total net position. The City has no internal service funds.

Proprietary fund operating revenues, such as rental fees, result from exchange transactions associated with principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Non-operating revenues, such as investment income, results from non-exchange transactions or ancillary activities. Proprietary fund operating expenses result from providing the services in connection with the proprietary fund’s principal ongoing operations.

Amounts paid to acquire capital assets are capitalized as assets in the enterprise fund financial statements, rather than reported as expenditures. Proceeds of long-term debt are recorded as a liability in the enterprise fund financial statements, rather than as an other financing source. Amounts paid to reduce long-term indebtedness of the enterprise fund are reported as a reduction of the related liability, rather than as expenditures.

When both restricted and unrestricted resources are combined in a fund, expenses are considered to be paid first from restricted resources, and then from unrestricted resources. c) Major Funds and Fiduciary Fund Types
The City reports the following major governmental funds:

General Fund
The General Fund is the general operating fund of the City. It is used to account for resources traditionally associated with government, which are not required legally or by sound financial management to be accounted for in another fund.

ARPA Special Revenue Fund
The ARPA Special Revenue Fund accounts for revenue received from U.S Department of Treasury from the local allocation for the American Rescue Plan Act to provide relief funds that have been negatively impacted from the coronavirus pandemic.

4.6.a
Packet Pg. 116 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
32 Capital Projects Fund
The Capital Projects Fund is used to account for the financial resources to be used for the acquisition and construction of the City’s capital projects.

The City reports the following major proprietary fund:

Property Leasing
The City Hall Fund is used to account for activity pertaining to the leasing of certain areas in the Laguna Hills Civic Center, which has been the City Hall site and seat of government since June 28, 2004.

Additionally, the City reports the following fund types:

Special Revenue Funds
The Special Revenue Funds are used to account for certain revenue sources set aside for specific purposes, to avoid including restricted revenues within the general fund and to provide separate information on the sources and applications of these restricted sources.
d) New Accounting Pronouncements
Current Year Standards
GASB Statement No. 87 - As of July 1, 2021, the City adopted GASB Statement No. 87, Leases. The implementation of this standard establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. The standard requires recognition of certain right to use leased assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract.

The standard also requires lessors to recognize a lease receivable and deferred inflow of resources. As a result of implementing this standard, the City recognized a lease receivable and deferred inflow of resources in the amount of $908,116 and $908,116 as of July 1, 2021, within the general fund, as well as the government wide governmental activities. The City also recognized a lease receivable and deferred inflow of resources in the amount of $1,138,311 and $1,138,311 as of July 1, 2021, within the Enterprise - Property Leasing fund, as well as the business-type activities. As a result of these adjustments there was no effect on beginning net position or fund balance. The additional disclosures required by this standard are included in Note 15.

Pending Accounting Standards
GASB has issued the following statements that may impact the City’s financial reporting requirements in the future. The City is currently evaluating the potential impact of these statements:

GASB Statement No. 91 - Conduit Debt Obligations.

GASB Statement No. 94 - Public-Private and Public-Public Partnerships and Availability Payment Arrangements.

GASB Statement No. 96 - Subscription-Based Information Technology Arrangements.

GASB Statement No. 99 - Omnibus 2022.

GASB Statement No. 100 - Accounting Changes and Error Corrections.

GASB Statement No. 101 - Compensated Absences.

4.6.a
Packet Pg. 117 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
33 e) Cash and Investments
Investments are reported in the accompanying basic financial statements at fair value, which is price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Investments that are not traded on a market, such as investments in external pools, are valued based on the stated fair value represented by the external pool.

Changes in fair value that occur during a fiscal year are recognized as investment income reported for that fiscal year. Investment income includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation, maturity, or sale of investments.

The City pools cash and investments of all funds, except for amounts held by fiscal agents. Investment income earned by the pooled investments is allocated to the various funds based on each fund’s average cash and investment balance.
f) Statement of Cash Flows
The enterprise proprietary fund participates in the City-wide cash and investments pool, which provides immediate access to invested funds. Accordingly, all cash and investments are considered to be cash and cash equivalents for purposes of the Statement of Cash Flows. g) Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the Government-Wide and Fund Financial Statements utilizing the consumption method. h) Property Taxes
Property tax revenue is recognized in the fiscal year for which the taxes have been levied providing they become available (within 60 days of the fiscal year end). The County of Orange collects property taxes for the City. Tax liens attach annually as of 12:01 am on the first day of January proceeding the fiscal year for which the taxes are levied. The tax levy covers the fiscal period July 1 to June 30. All secured personal property taxes and one-half of the taxes on real property are due November 1; the second installment is due February 1. All taxes are delinquent, if unpaid, on December 10 and April 10, respectively. Unsecured personal property taxes become due on January 1 each year, and are delinquent, if unpaid, on August 31. i) Capital Assets
Capital assets are capital outlay for assets of a permanent nature, valued at $5,000 or more and the usage of which is expected to be more than five years. Right to use leased assets in excess of $20,000 are capitalized.

Capital assets (including infrastructure) are recorded at cost where historical records are available and at an estimated original cost where no historical records exist. Contributed capital assets are valued at acquisition value at the date of the contribution.

Capital assets include public domain (infrastructure) general assets consisting of certain improvements including roads, streets, sidewalks, medians, and storm drains.

4.6.a
Packet Pg. 118 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
34 Capital assets used in operations are depreciated over their estimated useful lives using the straight-line method in the government-wide financial statements and in the fund financial statements of the enterprise fund.

Depreciation is charged as an expense against operations and accumulated depreciation is reported on the respective statements of net position. The range of lives used for depreciation purposes for each capital asset class, are as follows:

Years
Building and improvements 20 years
Machinery and equipment 5 - 10 years
Infrastructure 5 - 60 years
Land improvements 20 years
Asset
j) Lease Receivable
Lease receivables are recorded by the City as the present value of future lease payments expected to be received from the lessee during the lease term, reduced by any provision for estimated uncollectible amounts.

Lease receivables are subsequently reduced over the life of the lease as cash is received in the applicable reporting period. The present value of future lease payments to be received are discounted based on the interest rate the City charges the lessee.
k) Claims and Judgments Payable
As of July 1, 2003, the City became a member of the Exclusive Risk Management Authority of California. The annual premium includes estimates for the amounts paid for reported claims and incurred but not reported claims based upon past experience, modified for current trends and information. Premiums are recorded as expenditures when they become payable from expendable available resources. When it is probable that a claims liability has been incurred and the amount of the loss can be reasonably estimated through historical trends and calculation of incurred but not reported claims (IBNR), the City accrues the estimated liability for the expected claims and judgments. These amounts are recorded in the government-wide financial statements. A liability is reported in the governmental funds only if there is an amount due and payable at June 30. l) Deferred Inflows and Outflows of Resources
In addition to assets, the government-wide statement of net position and the governmental funds balance sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to future periods and so will not be recognized as an outflow of resources (expense) until that time. The City has the following items that qualify for reporting in this category:
• Deferred loss on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt, which is 15 years.
• Deferred outflows related to pensions equal to employer contributions made after the measurement date of the net pension liability.

4.6.a
Packet Pg. 119 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
35 • Deferred outflows related to pensions for differences between expected and actual experiences, changes in assumptions, and changes in proportion and differences between employer contributions and the proportionate share of contributions. These amounts are amortized over a closed period equal to the average expected remaining service lives of all employees that are provided with pensions through the plans.

In addition to liabilities, the government-wide statement of net position and the governmental funds balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to future periods and will not be recognized as an inflow of resources (revenue) until that time. The City has the following items that qualify for reporting in this category:
• Deferred inflows from unavailable revenues, which are reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from three sources, which are property damage, planning fees, and grants. These amounts are deferred and recognized as an inflow of resources in the period the amounts become available.
• Deferred inflows related to pensions for differences between expected and actual experiences, changes in assumptions, and changes in proportion and differences between employer contributions and the proportionate share of contributions. These amounts are amortized over a closed period equal to the average expected remaining service lives of all employees that are provided with pensions through the plans.
• Deferred inflows related to pensions resulting from the difference in projected and actual earnings on investments of the pension plan fiduciary net position. These amounts are amortized over five years. • Deferred inflows related to leases where the City is the lessor and is reported in the governmental fund balance sheet and statement of net position. The deferred inflows of resources related to leases are recognized as an inflow of resources (revenue) on the straight-line basis over the term of the lease. m) Compensated Absences
Vacation time is provided to all full-time and extended part-time employees. Upon separation or retirement from City service, all employees shall be compensated at their prevailing pay rate for their accrued vacation. No employee shall be allowed to carry over more than 320 hours of vacation time from one fiscal year to the next.

At the start of the fiscal year, if an employee has more than 320 hours accrued, the City will automatically cash out any hours in excess of 320.

The City provides an ICMA Vantage Care Retirement Health Savings (RHS) Plan, a defined contribution plan, to its full-time employees that have reached ten (10) years of service with the City. This employer- sponsored retiree health benefit allows employees to accumulate assets to pay for medical expenses on a tax-free basis either upon separation of service from the City or age 50 dependent upon when contributions to the plan were made. In compliance with the Patient Protection and Affordable Care Act, contributions to the plan made after December 31, 2013, are available to plan participants for medical expenses only upon separation of employment. In the event of a participant’s death, the participant’s surviving spouse and/or eligible dependent(s) are immediately eligible to maintain the account and utilize it to fund eligible medical expenses. If a participant’s balance is not fully depleted upon the death of the eligible spouse, the account balance may continue to be utilized to pay medical expenses of eligible dependents. An eligible dependent is (a) the

4.6.a
Packet Pg. 120 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
36 participant’s lawful spouse, (b) the participant’s child under the age of 27, as defined by IRC Section 152(f)(1) and Internal Revenue Service Notice 2010-38, or (c) any other individual who is a person described in IRC Section 152(a), as classified by Internal Revenue Service Notice 2004-79. The assets of the individual plans are not subject to claims of the City’s creditors. The start-up contribution for employees will be based on their accumulated sick leave hours in excess of 160 hours at their prevailing pay rate, upon the completion of ten (10) years of service to the City. Thereafter, annual contributions will be made to each employee’s account for their unused sick leave hours in excess of 160 hours on June 30th of each fiscal year at the employees’ prevailing pay rate. Upon separation from employment, the City will make a final contribution on behalf of the employee equivalent to all the unused sick leave balance of the employee at the employee’s prevailing pay rate at the time of separation. The City also contributes $5,000 on behalf of each participant, upon completion of ten years of service and annually thereafter on the participant’s employment anniversary date as long as the individual is an employee with the City. The $5,000 City contributions cease after termination or retirement of the employee. In the fiscal year ended June 30, 2022, the City contributed $45,000 to the RHS Plan.

All vacation and sick leave pay is accrued when incurred in the government-wide financial statements. A liability for these amounts is reported in the governmental funds only if they have matured, for example, as a result of employee resignations and retirements.
n) Pensions
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s California Public Employees’ Retirement System (CalPERS) plans (Plans) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. o) Use of Estimates
The preparation of the basic financial statements in accordance with accounting principles generally accepted in the United States of America, as prescribed by the GASB, requires management to make assumptions that affect the reported amounts of assets, deferred outflows of resources, liabilities, and deferred inflows of resources and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses/expenditures during the reporting period. Actual results could differ from those estimates.

4.6.a
Packet Pg. 121 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
37 Note 2 - Cash and Investments
The City maintains a cash and investment pool that is available for use by all funds. Cash and investments at June 30, 2022, are reported in the accompanying financial statements as follows:

Statement of Net Position:

Cash and investments $ 15,822,222
Restricted cash and investments 1,784,112
Total cash and investments $ 17,606,334
Cash and investments at June 30, 2022, consisted of the following:

Cash on hand $ 2,500
Pooled deposits:

Demand deposits $ 2,564,454
Certificates of deposit 70,502
Total pooled deposits 2,634,956
Pooled investments:

Local Agency Investment Fund 11,859,943
CalTRUST Money Market Mutual Fund 1,324,823
Total pooled investments and deposits 13,184,766
Restricted cash and investments:

Local Agency Investment Fund 1,784,112
Total restricted cash and investments 1,784,112
Total cash and investments $ 17,606,334
The City follows the practice of pooling cash and investments of all funds, except for funds required to be held by fiscal agents under provisions of bond indentures, including investment policy considerations. Interest income earned on pooled cash and investments is allocated quarterly to the various funds based on quarterly cash and investment balances. Interest income from cash and investments with fiscal agents is credited directly to the related fund.

4.6.a
Packet Pg. 122 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
38 Authorized Investments
Under the provision of the City’s investment policy, and in accordance with Section 53601 of the California Government Code, the City may invest in the following types of investments.

Maximum
Percent of
Diversification By Investments Portfolio
U.S. Treasury Obligations (bills, notes and bonds) 50%
Certificates of Deposit (CDs) Commercial Banks 50%
Certificates of Deposit (CDs) Savings and Loan 25%
State Treasurer’s Local Agency Investment Fund 75%
CalTRUST 75%
Overnight investment accounts managed by 50%
City’s primary bank
Commercial Paper 10%
Banker’s Acceptances 15%
Money Market Mutual Funds 15%
Maximum
Percent of
Diversification By Institution/Issuer Portfolio
Certificates of Deposit (CDs) Commercial Banks 25%
Certificates of Deposit (CDs) Savings and Loan $250,000 maximum
The maximum maturity for all investments listed above is 1 year with the exception of commercial paper and Prime Banker’s Acceptances for which the maximum maturity is 180 days and 270 days, respectively.

Investments Authorized by Debt Agreements
The above investments do not address investment of debt proceeds held by a bond trustee. Investments of debt proceeds held by a bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code.

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.

4.6.a
Packet Pg. 123 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
39 The City has a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from interest rates. The City limits the investment maturities for operating funds to be scheduled to coincide with projected cash flow needs, taking into account large routine expenditures as well as considering sizable blocks of anticipated revenue. The City has elected the specific identification method to present the investment maturities as follows.
6 Months
or less Fair Value
Local Agency Investment Fund $ 11,859,943 $ 11,859,943
CalTRUST Money Market Mutual Fund 1,324,823 1,324,823
Investment with Fiscal Agent:

Local Agency Investment Fund 1,784,112 1,784,112
Total $ 14,968,878 $ 14,968,878
Investment Type
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. The City’s minimum legal rating for Money Market Mutual Funds is AAA. There is no minimum legal rating applicable for investments in the Local Agency Investment Fund and the City has no minimum legal rating for investments in CalTRUST. As of June 30, 2022, the City’s investment in the Local Agency Investment Fund has not been rated by a nationally recognized statistical rating organization.

Concentration of Credit Risk
Concentration credit risk is the heightened risk of potential loss when investments are concentrated in one issuer. As of June 30, 2022, other than the State Treasurer’s Local Agency Investment Fund and the CalTRUST Money Market Mutual Fund, the City had no investments concentrated in one issuer which exceeded 5% of total investments.

Custodial Credit Risk
The 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 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 to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party.

4.6.a
Packet Pg. 124 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
40 The California Government Code requires California banks and savings and loan associations to secure a city's deposits by pledging government securities with a fair value of 110% of a city's deposits. California law also allows financial institutions to secure a city’s deposits by pledging first trust deed mortgage notes having a fair value of 150% of a city's total deposits. The collateral for deposits in federal and state-chartered banks is held in safekeeping by an authorized Agent of Depository recognized by the State of California Department of Banking.

The collateral for deposits with savings and loan associations is generally held in safekeeping by the Federal Home Loan Bank in San Francisco, California as an Agent of Depository. These securities are physically held in an undivided pool for all California public agency depositors. Under Government Code Section 53655, the placement of securities by a bank or savings and loan association with an "Agent of Depository" has the effect of perfecting the security interest in the name of the local governmental agency. Accordingly, all collateral held by California Agents of Depository are considered to be held for, and in the name of, the local governmental agency.

As of June 30, 2022, none of the City’s deposits with financial institutions in excess of federal depository insurance limits were held in uncollateralized accounts.

For investments identified herein as held by bond trustee, the bond trustee selects the investment under the terms of the applicable trust agreement acquires the investment, and holds the investment on behalf of the reporting government.

Investment in State Treasurer’s Local Agency Investment Fund The City is a voluntary participant in the State Treasurer’s Local Agency Investment Fund that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro rata share of the fair value provided by State Treasurer’s Local Agency Investment Fund for the entire State Treasurer’s Local Agency Investment Fund portfolio (in relation to the amortized cost of that portfolio).

The balance available for withdrawal is based on the accounting records maintained by State Treasurer’s Local Agency Investment Fund, which are recorded on an amortized cost basis. The Local Agency Investment Fund is not registered with the Securities Exchange Commission and not rated.

Investment in CalTRUST Investment Pool:

CalTRUST is a Joint Powers Agency Authority created by local public agencies to provide a convenient method for local public agencies to voluntarily pool their assets for investment purposes. CalTRUST is governed by a Board of Trustees made up of experienced local agency treasurers and investment officers. The Board sets overall policies for the program and selects and supervises the activities of the investment manager and other agents. CalTRUST maintains and administers four pooled accounts within the program: Government Fund, Money Market, Short-Term, and Medium-Term. The Government Fund and Money Market accounts permit daily transactions, with same-day liquidity (provided redemption requests are received by 1:00 p.m. Pacific time), with no limit on the amount of funds that may be invested. The Short-Term account permits an unlimited number of transactions per month (with prior day notice), with no limit on the amount of funds that may be invested. The Medium-Term account permits investments, withdrawals and transfers once per month, with five days advance notice. All CalTRUST accounts comply with the limits and restrictions placed on local agency investments by the California Government Code. CalTRUST imposes a $250,000 minimum investment; however, there is no maximum limit.

4.6.a
Packet Pg. 125 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
41 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 percentage interest of the fair value provided by CalTRUST for the CalTRUST accounts (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by CalTRUST.

Fair Value Measurements
The City categorizes its fair value measurement within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the assets. Level 1 inputs are quoted prices in active markets for identical assets, Level 2 inputs are quoted prices for similar assets in active markets, and Level 3 inputs are significant unobservable inputs.

Amounts invested in the Local Agency Investment Fund and CalTRUST Money Market Mutual Funds are not subject to fair value measurements. Deposits and withdrawals are made on the basis of $1 and not at fair value.

Note 3 - Due From/To Other Funds
Interfund receivables and payables at June 30, 2022, were as follows.

Due From Due To
Other Funds Other Funds
Major Governmental:

General Fund $ 279,404 $ -
Capital Projects - 3,384
Non-major Governmental Funds:

Special Revenue Funds:

SB1 RMRA - 109,241
Measure M - 39,926
Grants & Contributions - 130,237
Debt Service Fund 3,384 -
Total $ 282,788 $ 282,788
Funds
Outstanding balances at the end of the fiscal year between funds are reported as “due to/from other funds”.

These balances are the result primarily from short-term negative cash balances.

4.6.a
Packet Pg. 126 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
42 Note 4 - Transfers In and Out
Transfers in and out for the fiscal year ended June 30, 2022, are as follows:

Transfers Transfers
Out In
Major Governmental: Major Governmental:

General $ 5,194,693 General $ 7,666,600
ARPA 3,743,412 Capital Projects 3,400,224
Total Major Governmental 8,938,105 Total Major Governmental 11,066,824 Non-major Governmental: Non-major Governmental:

Gas Tax 1,479,362 Debt Service 1,792,821
Measure M 767,360 Senior Mobility Program 1,648
SB1 RMRA 1,214,489
AB 2766 61,065
Grants & Contributions 239,224
SLEFS / COPS BRULTE 161,688
Total Non-major Governmental 3,923,188 Total Non-major Governmental 1,794,469 Total $ 12,861,293 Total $ 12,861,293
Paying Fund Receiving Fund
Interfund transfers are principally used to 1) provide available funds to the Debt Service Fund for interest and principal payments on the City’s long-term debt 2) supply the Capital Projects Fund with funding necessary to accomplish those projects approved by the City Council and 3) provide available funds from American Rescue Protection Act (ARPA) to the General Fund to partially cover the law enforcement contract. There were no significant interfund transfers that were unusual or of a non-routine nature.

4.6.a
Packet Pg. 127 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
43 Note 5 - Capital Assets
Capital asset activity for the fiscal year ended June 30, 2022, was as follows:

Balance at
July 1, 2021, Ending
as restated Additions Deletions June 30, 2022
Governmental activities:

Land $ 17,955,354 $ - $ - $ 17,955,354
Rights of way / easements 2,854,182 - - 2,854,182
Total cost of non-depreciable assets 20,809,536 - - 20,809,536 Buildings and improvements 14,134,413 371,410 - 14,505,823 Machinery and equipment 2,618,682 135,537 - 2,754,219
Land improvements 26,347,918 69,338 - 26,417,256
Infrastructure 99,545,852 2,767,039 - 102,312,891
Total cost of depreciable assets 142,646,865 3,343,324 - 145,990,189 Less accumulated depreciation for:

Buildings and improvements (12,688,673) (725,292) - (13,413,965) Machinery and equipment (2,412,512) (80,863) - (2,493,375) Land improvements (23,587,800) (1,320,863) - (24,908,663) Infrastructure (44,768,475) (1,746,199) - (46,514,674)
Total accumulated depreciation (83,457,460) (3,873,217) - (87,330,677) Net depreciable assets 59,189,405 (529,893) - 58,659,512 Total capital assets, net $ 79,998,941 $ (529,893) $ - $ 79,469,048 Business-type activity:

Land $ 2,855,425 $ - $ - 2,855,425
Buildings and improvements 15,156,974 77,408 - 15,234,382 Total cost of depreciable assets 15,156,974 77,408 - 15,234,382 Less accumulated depreciation for:

Buildings and improvements (Note 16) (11,771,877) (761,720) - (12,533,597) Total accumulated depreciation (11,771,877) (761,720) - (12,533,597) Net depreciable assets 3,385,097 (684,312) - 2,700,785
Total capital assets, net $ 6,240,522 $ (684,312) $ - 5,556,210

4.6.a
Packet Pg. 128 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
44 Depreciation expense was charged in the following functions in the Statement of Activities:

Governmental Activities:

General government $ 45,360
Community development 830
Public works 1,754,497
Community services 2,058,791
Public safety 13,739
3,873,217
Business-type Activity:

Property leasing 761,720
Total $ 4,634,937
Note 6 - Long-term Liabilities
Long-term liability activity for the fiscal year ended June 30, 2022, was as follows:

Governmental Activities:

Balance at Balance at Amounts Due
July 1, 2021 Additions Reductions June 30, 2022 in One Year Certificates of Participation:
2010 COP $ 2,745,000 $ - $ (1,670,000) $ 1,075,000 $ 345,000 Unamortized premium 288,324 - (80,464) 207,860 -
Total Certificates of
Participation 3,033,324 - (1,750,464) 1,282,860 345,000 Direct Borrowings:

Edison 287,133 - (52,305) 234,828 51,934
SDGE 150,157 - (40,255) 109,902 40,368
Other Liabilities:

Compensated absences 341,966 216,810 (261,095) 297,681 51,110 Claims and judgements (Note 7) 306,451 104,323 (106,451) 304,323 30,432 Total other liabilities 1,085,707 321,133 (460,106) 946,734 173,844 Total $ 4,119,031 $ 321,133 $ (2,210,570) $ 2,229,594 $ 518,844 Typically, the City liquidates its certificates of participation, direct borrowings, compensated absences, and claims and judgments with general fund resources.

4.6.a
Packet Pg. 129 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
45 2010 Certificates of Participation
On January 26, 2010, the City (through the City’s blended component unit the Corporation) issued $17,190,000 of Certificates of Participation (COPs). Proceeds from the sale were placed in an irrevocable trust that was used to service the future debt requirements of the 2001 and 2003 Certificates of Participation. There are no amounts outstanding on the defeased COPs.

The 2010 COPs are direct obligations and pledge the full faith and credit of the City of Laguna Hills. The certificates were executed and delivered under the provisions of the Trust Agreement by and among The Bank of New York Mellon Trust Company, N.A, as trustee. The City is required under the Agreement to make rental payments each 15th day of the month immediately preceding each February 1st and August 1st from any source of available funds in an amount sufficient to pay the annual principal and interest due with respect to the Certificates.

The Serial bonds mature in annual installments ranging from $345,000 to $1,670,000, commencing February 1, 2011 and ending February 1, 2025. Interest accrues at rates between 4.00% and 5.00% and is payable semiannually. The annual requirements to amortize the certificates of participation as of June 30, 2022, are as follows:

Principal Interest Total
2023 $ 345,000 $ 44,381 $ 389,381
2024 355,000 30,581 385,581
2025 375,000 15,938 390,938
Total $ 1,075,000 $ 90,900 $ 1,165,900
Year Ending June 30:

The COPs are subject to federal arbitrage regulations. The City calculated no arbitrage rebate due.

The COPs require a reserve in an amount that is the least of (1) 125% of the average annual lease payments, (2) 10% of the original proceeds, or (3) maximum annual lease payments. This reserve is fully funded as of June 30, 2022 with a balance of $1,784,112.

4.6.a
Packet Pg. 130 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
46 Direct Borrowings:

Southern California Edison On-Bill Financing Program
In fiscal year 2016-2017, the City approved the installation of energy-efficient LED streets lights in areas of the City. The project was partially funded through Southern California Edison’s On-Bill Financing Program. Through this program, the City received zero percent financing for approved energy reduction projects for $471,344 as of June 30, 2022. Since each individual item is below the City’s capitalization policy, there are no amounts recorded as capital assets for these purchases. The costs are repaid from energy savings over a period of up to ten years.

The unpaid balance as of June 30, 2022 was $234,828. The annual debt service requirements are as follows:

Principal
2023 $ 51,934
2024 51,370
2025 50,342
2026 49,811
2027 30,404
2028 967
Total $ 234,828
Year Ending June 30:

San Diego Gas & Electric On-Bill Financing Program
In fiscal year 2017-2018, the City approved the installation of energy-efficient LED streets lights in areas of the City. The project was partially funded through San Diego Gas & Electric’s On-Bill Financing Program. Through this program, the City received zero percent financing for approved energy reduction projects for $287,539 as of June 30, 2022. Since each individual item is below the City’s capitalization policy, there are no amounts recorded as capital assets for these purchases. The costs are repaid from energy savings over a period of up to ten years.

The unpaid balance as of June 30, 2022 was $109,902. The annual debt service requirements are as follows:

Principal
2023 $ 40,368
2024 40,489
2025 8,858
2026 8,858
2027 7,872
2028 3,457
Total $ 109,902
Year Ending June 30:

Compensated Absences
The City’s policies relating to compensated absences are described in Note 1. The long-term portion of this liability, amounting to $246,571 at June 30, 2022 will be paid primarily from the general fund.

4.6.a
Packet Pg. 131 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
47 Note 7 - General Liability Insurance
In July 2003, the City joined the Exclusive Risk Management Authority of California (ERMAC), a pool of three other cities in California, namely Beaumont, Hayward, and Santa Maria, established under the provisions of California Government Code Section 6502, in order to jointly develop and fund General Liability insurance.

The ERMAC policy covers the City for losses due to personal injury, property damage, wrongful acts because of public officials’ errors and omissions and unfair employment practices (see the chart below for City’s retained limits and policy liability limits). Legal defense costs may be covered in addition to policy limits.

The City carries property, business interruption, flood, and boiler & machinery insurance with ERMAC (PEPIP Program) to cover all City property. In addition, Difference in Conditions (DIC) or earthquake, including flood, is provided by Everest Indemnity Insurance Company, which covers the Laguna Hills Civic Center only.

The City is also a member in an insurance pool through the Special District Risk Management Authority (SDRMA). SDRMA is a not-for-profit public agency formed under California Government Code Sections 6500 et.

Seq. SDRMA is governed by a board composed of members from participating agencies. The mission of SDRMA is to provide renewable, efficiently priced risk financing and risk management services through a financially sound pool. The City pays an annual premium for commercial insurance covering workers’ compensation and employers’ liability claims. Separate financial statements of SDRMA may be obtained at Special District Risk Management Authority, 1112 “I” Street, Suite 300, Sacramento, California 95814.

The following is a list of the allocation of risk coverage for the City as of June 30, 2022, taking in to account the City’s self-insurance portion, if any.

Area of Risk City
Self-Insurance
Carrier Risk Coverage
Municipal
Broad
General
Liability
• $100,000 for
Bodily Injury,
Personal Injury,
Property Damage
and public
officials E&O
• $1,000,000 for
employment
practices
liability
ERMAC • $50M per occurrence and in
the annual aggregate excess of
limit of the SIR of $1M
Property,
Business
Interruption
and Boiler &
Machinery
• $10,000 per
occurrence
(specific perils
may be higher)

ERMAC (PEPIP
program)
• $1,000M per occurrence
combined
• $10M flood limit per
occurrence
• $100M combined business
interruption
• $100M boiler explosion &
machinery breakdown
combined

4.6.a
Packet Pg. 132 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
48 Area of Risk City
Self-Insurance
Carrier Risk Coverage
Difference in
Conditions
(Multi-peril)
Civic Center
only
• $25,000 per
occurrence
• 5% earthquake
Trisura
Specialty
Insurance
Company
• $7.5M per occurrence and
annual aggregate
Crime • $2,500 CSAC-EIA $10M for the following:
• Funds transfer fraud
• Employee dishonesty
• Forgery alterations
• Money & securities theft,
inside premises
• Money & securities theft,
outside premises
• Computer fraud
• Money order & counterfeit
paper currency
• Theft of other property, inside
premises
• Theft of other property,
outside premises
Cyber
Liability
• $50,000 per
occurrence
APIP • $40M annual aggregate for all
members combined
• $2M per occurrence and
annual aggregate
Recreational
Class &
Officials
Supplemental
• None SCMAF • $1M per occurrence
• $2M aggregate
• $100,000 property damage
• $1M personal and adv injury,
products
• $5,000 medical expense
Workers’
Compensation
& Employers’
Liability
• None SDRMA • Statutory Workers’
Compensation per
occurrence
• $5M Employer’s Liability per
occurrence

4.6.a
Packet Pg. 133 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
49 Claims Liability
In the financial statements prepared using the economic resources measurement focus, authoritative standards require that the liability for claims and the corresponding expense should be recognized in the period in which the underlying event occurs. Therefore, the liability of outstanding unallocated loss adjustment expenses (ULAE) must be established to represent the amount that will be paid out in claims as well as the expenses associated with processing of those claims. The City’s third-party administrator provides the data on estimated claim liabilities (paid and reserves). As of June 30, 2022, the estimated outstanding ULAE was $304,323.

Furthermore, as a practical matter, claims are often not reported during the period in which the underlying event occurs. The claim, even if not filed timely, must still be reported in the period in which the underlying event took place. Therefore, when it is probable that a claims liability has been incurred and the amount of the loss can be reasonably estimated through historical trends, the liability for claims should include an amount for incurred but not reported (IBNR) claims. IBNR is estimated at 25% of the increase in the current year annual claim expenses as compared to the prior year annual claim expenses. As of June 30, 2022, the estimated IBNR was approximately $2,021.

The following is a summary of the changes in the claims liability for the last two fiscal years:

FY 2021/22 FY 2020/21
Claims payable, beginning $ 306,451 $ 55,435
Claims and changes in estimate 104,323 306,451
Claims payments (106,451) (55,435)
Claims payable, ending $ 304,323 $ 306,451
Fiscal Year Ending June 30,
The total amount assigned in the Claims Liability Loss Reserve Fund as of June 30, 2022 is $200,000 which would cover two full limit losses. The City’s self-insured retention is $100,000.

In the current fiscal year, the City experienced a claim for the amount of $593,196 which is $493,196 over the self-insured retention amount. The amount over the self-insurance limit is covered by the insurer.

During the fiscal year, the none of the above programs of protection have experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in 2021-2022.

4.6.a
Packet Pg. 134 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
50 Note 8 - Pension Plans
a) General Information about the Pension Plans
Plan Descriptions
All qualified permanent and probationary employees are eligible to participate in the City’s Miscellaneous Employee Pension Plans, cost-sharing multiple employer defined benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS). 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 and 52 with statutorily reduced benefits for Tier I and PEPRA, respectively. All members are eligible for non-industrial disability benefits after 5 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

The Plans’ provisions and benefits in effect at the measurement period ending June 30, 2021, are summarized as follows:

Tier 1 PEPRA
Prior to On or After
Hire date January 1, 2013 January 1, 2013
Benefit formula 2% @ 60 2% @ 62
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50 - 63 52 - 67
Monthly benefits, as a % of
eligible compensation 1.092% to 2.418% 1.0% - 2.5%
Required employee contribution rates 7.0% 7.25%
Required employer contribution rates:

Normal cost rate 9.780% 7.730%
Payments of unfunded liability $ 338,318 $ 3,555
Miscellaneous Plan

4.6.a
Packet Pg. 135 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
51 Contributions
Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. City contribution rates may change if plan contracts are amended.

Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contributions requirements are classified as plan member contributions.

Typically, the City liquidates its net pension liability with general fund resources. b) Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2022, the City reported net pension liabilities for its proportionate share of the net pension liability of all Plans as follows:

Proportionate
Share of Net
Pension Liability
Miscellaneous $ 1,943,651
The City’s net pension liability for the Plan is measured as the proportionate share of the net pension liability.

The net pension liability of the Plan is measured as of June 30, 2021, and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2020 rolled forward to June 30, 2021 using standard update procedures. The City’s proportionate share of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined.

The City’s proportionate share of the net pension liability for all Plans as of the measurement dates ended June 30, 2020 and 2021 was as follows:

Miscellaneous
Proportion - June 30, 2020 0.41204%
Proportion - June 30, 2021 0.35938%
Change - Increase (Decrease) -0.05266%

4.6.a
Packet Pg. 136 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
52 For the year ended June 30, 2022, the City recognized pension credit of $163,376. At June 30, 2022, (measurement period ending 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 $ 587,229 $ - Differences between expected and actual experience 217,959 - Differences between the employer's contributions and the employer's proportionate share of contributions - 420,670 Change in employer's proportion 344,681 -
Net differences between projected and actual earnings on plan investments - 1,696,705
Total $ 1,149,869 $ 2,117,375
$587,229 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2023. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Amount
2023 $ (348,209)
2024 (354,570)
2025 (383,073)
2026 (468,883)
$ (1,554,735)
Year Ending June 30,

4.6.a
Packet Pg. 137 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
53 Actuarial Assumptions
The total pension liability for the June 30, 2021 measurement period was determined by an actuarial valuation as of June 30, 2020, with update procedures used to roll forward the total pension liability to June 30, 2021. The total pension liability was based on the following assumptions:

Miscellaneous
Valuation Date June 30, 2020
Measurement Date June 30, 2021
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:

Discount Rate 7.15%
Inflation 2.50%
Salary Increases (1)
Mortality Rate Table (2)
Post Retirement Benefit Increase (3)
(1) Varies by entry age and service.
(2) The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2017 Cal PERS Experience Study for the period from 1997 to 2015.

Pre-retirement and Post-retirement mortality rates includes 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from December 2017 that can be found on the CalPERS website. (3) The less of contract COLA or 2.5% until Purchasing Power Protection Allowance Floor on purchasing power applies, 2.5% thereafter.

4.6.a
Packet Pg. 138 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
54 Long-term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.

The expected real rates of return by asset class are as follows:

Assumed Real Return Real Return
Asset Years Years
Allocation 1 - 10 (b) 11+ (c)
Global Equity 50.00% 4.80% 5.98%
Fixed Income 28.00% 1.00% 2.62%
Inflation Assets 0.00% 0.77% 1.81%
Private Equity 8.00% 6.30% 7.23%
Real Assets 13.00% 3.75% 4.93%
Liquidity 1.00% 0.00% -0.92%
100.0%
(a) In the CalPERS ACFR, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities
(b) An expected inflation of 2.00% used for this period (c) An expected inflation of 2.92% used for this period Asset Class (a)
Discount Rate
The discount rate used to measure the total pension liability was 7.15%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

4.6.a
Packet Pg. 139 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
55 Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the City’s proportionate share of the net pension liability for each Plan, calculated using the discount rate for each Plan, as well as what the City’s proportionate share of 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:

Miscellaneous
1% Decrease 6.15%
Net Pension Liability $ 5,045,629
Current Discount Rate 7.15%
Net Pension Liability $ 1,943,651
1% Increase 8.15%
Net Pension Liability $ (620,710)
Pension Plans Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.
c) Payable to the Pension Plans
At June 30, 2022, the City had no outstanding amount of contributions to the pension plans required for the year ended June 30, 2022.

Note 9 - Deferred Compensation
The City offers its employees two kinds of defined contribution deferred compensation plans. City contribution rates may change if plan contracts are amended.

One plan is created in accordance with Internal Revenue Code Section 457. This plan, available to all employees, permits them to defer annually up to a maximum of $19,500 for calendar years 2021 and 2022, respectively.

This maximum deferred compensation is not available to employees until termination, retirement, death or unforeseeable emergency. Amounts accumulated under the plan have been invested in several investment options administered by independent third-party administrators at the direction of the employee. The assets of the plan are held in trust for the exclusive benefit of the plan participants and their beneficiaries, and the assets cannot be diverted to any other purpose. The Trustee’s beneficial ownership of plan assets held in the ICMA Retirement Trust is held for the further exclusive benefit of the plan participants and their beneficiaries. The plan permits loans, administered by the City, in accordance with approved loan guidelines. The City contributes

3.75% of the employee’s compensation for part-time seasonal employees. There are no City contributions required for full-time and non-seasonal part-time employees. The City’s total contributions for the fiscal year ended June 30, 2022 was $5,017.

4.6.a
Packet Pg. 140 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
56 The other Plan is a defined contribution plan created in accordance with Internal Revenue Code Section 401A.

This Plan is available to all management staff regardless of years of service, and non-management employees who have reached a minimum of ten years of service with the City. The City is the sole contributor to this Plan and sets the contribution amount to each class of eligible employees. The contribution limit is in accordance with the prevailing IRS regulation, which is 3% for eligible non-management employees and 6.5% for eligible management employees. The City’s total contributions for the fiscal year ended June 30, 2022 was $73,282.

The assets of this Plan, held for the exclusive benefits of the Plan’s participants and their beneficiaries, are administered by the Public Agency Retirement System (PARS), and the trustee is Union Bank of California.

Amounts accumulated under this Plan are self-directed by each participant.

Note 10 - Classification of Net Position and Governmental Fund Balances Net Position is measured on the full accrual basis of accounting as compared to the concept of Fund Balance, which is measured on the modified accrual basis of accounting.

Net Position Classifications
Net Position is divided into three captions as described below:

Net Investment in Capital Assets, describes the portion of Net Position which is represented by the current net book value of the City’s capital assets, less outstanding balance of any debt issued to finance these capital assets.

Restricted describes the portion of Net Position which is restricted as to use by the terms and conditions of agreements with outside parties, governmental regulations, laws, or other restrictions which the City cannot unilaterally alter. Restricted net position is subject to constraints either by (1) externally imposed by creditors (such as debt covenants), grantors, contributors, or laws or regulation of other governments or (2) imposed by law through constitutional provisions or enabling legislation.

Unrestricted, describes the portion of which is not restricted as to use.

Net Position Flow Assumption
Sometimes the City will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted - net position and unrestricted - net position in the government-wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied.

It is the City’s practice to consider restricted net position to have been depleted before unrestricted net position is applied.

4.6.a
Packet Pg. 141 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
57 Governmental Fund Balances Classifications
Fund Balances of the governmental funds are reported separately within classifications based on a hierarchy of constraints placed on the use of those resources. The classifications are based on the relative strength of the constraints that control how the specific amounts can be spent. The classifications are nonspendable, restricted, committed, assigned, and unassigned fund balance.

The nonspendable fund balance classification includes amounts that cannot be spent because they are either not in spendable form or are legally or contractually required to be maintained intact.

Restricted fund balances are those that have externally imposed restrictions on their usage by creditors, such as through debt covenants, grantors, contributors, or laws and regulations.

Committed fund balances are those constrained to specific purposes determined by a formal action (resolution) of the City’s highest level of decision-making authority, the City Council. Commitments may be changed or lifted only by the City taking the same formal action that imposed the constraint originally. The City does not have any committed fund balances at June 30, 2022.

Assigned fund balances include amounts that are constrained by the City’s intent to be used for specific purposes. The City Manager has the authority to assign the portion of the fund balance in the general fund that are constrained by the City’s intent to be used for reserves as established in the City’s Financial Policy No. 105 Section G.

Unassigned fund balances include 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.

4.6.a
Packet Pg. 142 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
58 Fund balances are presented in the following categories: nonspendable, restricted, assigned, and unassigned. A detailed schedule of fund balances at June 30, 2022 is as follows:

Other
General Governmental
Fund Funds Total
Nonspendable:

Prepaid items $ 128,954 $ - $ 128,954
Total 128,954 - 128,954
Restricted:

Capital projects - - -
Public services - 1,987,704 1,987,704
Community services - 451,604 451,604
Debt service - 1,787,496 1,787,496
Total - 4,226,804 4,226,804
Assigned:

Claims liability 132,455 - 132,455
Community Center and
Sports Complex maintenance 240,000 - 240,000
Parks maintenance 365,700 - 365,700
Slopes/Storm Drain maintenance 31,771 - 31,771
Total 769,926 - 769,926
Unassigned 12,895,569 (165,237) 12,730,332
Total fund balances $ 13,794,449 $ 4,061,567 $ 17,856,016 Accumulated Fund Deficits
The following individual funds reported deficit fund balances as of June 30, 2022:

Deficit
Balance
Non-major Governmental Funds:

Special Revenue Funds:

Measure M $ 35,000
Grants & Contributions 130,237
Total $ 165,237
Funds
The City plans to eliminate the deficits in each fund with intergovernmental receivables to be collected in future periods.

4.6.a
Packet Pg. 143 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
59 Note 11 - Joint Venture
Orange County Fire Authority
In January 1995, the City of Laguna Hills entered into a Joint Powers Agreement with the Cities of Buena Park, Cypress, Dana Point, Irvine, Laguna Niguel, Lake Forest, La Palma, Los Alamitos, Mission Viejo, Placentia, San Clemente, San Juan Capistrano, Seal Beach, Stanton, Tustin, Villa Park, and Yorba Linda and the County of Orange to create the Orange County Fire Authority (the Authority). Since the creation of the Authority, the Cities of Aliso Viejo, Laguna Woods, Rancho Santa Margarita and Westminster have joined the Authority as members eligible for protection services. The purpose of the Authority is to provide for mutual fire protection, prevention and suppression services and related and incidental services including, but not limited to, emergency medical and transport services, as well as providing facilities and personnel for such services. The effective date of formation was March 1, 1995. The Authority’s governing board consists of one representative from each City and two from the County. The operations of the Authority are funded with structural fire fees collected by the County through the property tax roll for the unincorporated area and on behalf of all member Cities except for the Cities of Stanton, Tustin, San Clemente, Buena Park, Placentia, Seal Beach and Westminster.

The County pays all structural fire fees it collects to the Authority. The Cities of Stanton, Tustin, San Clemente, Buena Park, Placentia, Seal Beach and Westminster are considered “cash contract cities” and accordingly make cash contributions based on the Authority’s annual budget. No determination has been made as to each participant’s proportionate share of fund equity as of June 30, 2022. Upon dissolution of the Authority, all surplus money and property of the Authority will be conveyed or distributed to each member in proportion to all funds provided to the Authority by that member or by the County on behalf of that member during its membership.

Complete financial statements may be obtained from the Orange County Fire Authority, 180 South Water Street, Orange, California 92866.

Note 12 - Related Party Transactions
The City’s enterprise fund consists of owning a piece of commercial real estate and leasing it to various entities.

The total square footage of the building is 51,944. The City is a tenant using approximately 21,033 square feet of the building. The enterprise fund does not charge the City rent. The estimated annual rent for the space occupied by the City would be approximately $549,960.

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Packet Pg. 144 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
60 Note 13 - Other Required Individual Fund Disclosures Excess of Expenditures over Appropriations
The following are funds in which expenditures exceeded appropriations for the fiscal year ended June 30, 2022.

The City manages its budget at the fund level.

Variance
Positive
Appropriations Expenditures (Negative)
Major Governmental
ARPA $ 2,632,255 $ 3,743,412 $ (1,111,157)
Non-major Governmental
Special Revenue Funds:

CARES Act $ - $ 3,609 $ (3,609)
AB 2766 104,400 118,585 (14,185)
C&D Forfeited Deposits 130,000 168,052 (38,052)
SLESF/COPS BRULTE 150,000 161,688 (11,688)
Note 14 - Commitments and Contingencies
The City is occasionally a defendant in lawsuits which have arisen in the normal course of business. Damages are alleged in some of these actions and their outcome cannot be predicted with certainty. However, in the opinion of the City Attorney, the outcome of these actions will not have a material adverse effect on the financial position of the City.

The City participates in several federal and state grant programs. The programs are subject to examination by the granters and the amount, if any, of expenses which may be disallowed by the granting agency cannot be determined at this time. The City expects such amounts, if any, to be immaterial.

Note 15 - Leases
Governmental Activities/General Fund:

The City has accrued a receivable for five land leases. The remaining receivable for these leases was $793,586 for the year ended June 30, 2022. Deferred inflows related to these leases were $797,114 as of June 30, 2022.

Interest revenue recognized on these leases was $22,818 for the year ended June 30, 2022. Principal receipts of $111,002 were recognized during the fiscal year. The interest rate on the leases is between 2.25% and 3.25%.

Final receipt is expected in fiscal year 2042.

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Packet Pg. 145 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
61 The future receipts on these leases are as follows:

Years Ending June 30, Principal Interest Total
2023 $ 101,569 $ 21,547 $ 123,116
2024 104,720 19,125 123,845
2025 107,963 16,633 124,596
2026 83,960 13,993 97,953
2027 63,138 11,923 75,061
2028 - 2032 143,961 42,845 186,806
2033 - 2037 151,630 21,734 173,364
2038 - 2042 36,645 1,209 37,854
$ 793,586 $ 149,009 $ 942,595
Business-Type Activities - Property Leasing:

The City has accrued a receivable for 11 building leases. The remaining receivable for these leases was $1,336,157 for the year ended June 30, 2022. Deferred inflows related to these leases were $1,308,850 as of June 30, 2022. Interest revenue recognized on these leases was $23,066 for the year ended June 30, 2022.

Principal receipts of $257,208 were recognized during the fiscal year. The interest rate on the leases is between

1.25% and 3.25%. Final receipt is expected in fiscal year 2037.

The lease agreement call for payments that are partially variable and therefore were not included in lease receivable or deferred inflow of resources for leases. These variable payments are a result of the underlying lease measured not on a fixed rate, but rather variable due to the underlying payments derived from 1.18% through 5.83 percent of lessee’s share of operating expense. A total of $168,002 was recognized as revenue from these variable payments for the year ended June 30, 2022.

The future receipts on these leases are as follows:

Years Ending June 30, Principal Interest Total
2023 $ 303,799 $ 27,711 $ 331,510
2024 302,222 21,564 323,786
2025 184,317 16,347 200,664
2026 141,362 12,386 153,748
2027 104,440 9,527 113,967
2028 - 2032 295,199 17,705 312,904
2033 - 2037 4,818 20 4,838
$ 1,336,157 $ 105,260 $ 1,441,417

4.6.a
Packet Pg. 146 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Notes to Basic Financial Statements
June 30, 2022
62 Note 16 - Adoption of New Standard and Correction of an Error Accumulated depreciation pertaining to the enterprise – property leasing fund was overstated due to an erroneous depreciation expense calculation, resulting in an understatement of net position totaling $663,016 at June 30, 2021.

The effect of this restatement, as well as the implementation of GASB 87 (Note 1), are summarized below:

Enterprise -
Governmental General Business-Type Property
Activities Fund Activities Leasing Fund
Net Position/Fund Balance at July 1, 2021,
as previously presented $ 86,862,441 $ 8,826,579 $ 5,796,326 $ 5,796,326 Restatement for correction of an error -
accumulated depreciation - - 663,016 663,016
GASB 87 Implementation:

Add lease receivable 908,116 908,116 1,138,311 1,138,311 Add Deferred inflows of resources - leases (908,116) (908,116) (1,138,311) (1,138,311) Net Position/Fund Balance at July 1, 2021, as restated $ 86,862,441 $ 8,826,579 $ 6,459,342 $ 6,459,342

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Packet Pg. 148 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) Required Supplementary Information

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Packet Pg. 150 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 63 City of Laguna Hills, California
Schedule of Proportionate Share of the Net Pension Liability Last Ten Fiscal Years*
June 30, 2022
Fiscal year ended June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 Measurement period June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 Plan's proportion of the
net pension liability 0.03594% 0.04120% 0.03899% 0.03658% 0.03641% 0.03413% 0.02851% 0.03634% Plan's proportionate share of the
net pension liability $ 1,943,651 $ 4,483,185 $ 3,995,763 $ 3,524,547 $ 3,610,550 $ 2,953,536 $ 1,956,617 $ 2,261,011 Plan's covered payroll $ 2,968,115 $ 3,079,318 $ 2,978,329 $ 3,199,277 $ 3,197,331 $ 3,076,464 $ 3,093,576 $ 2,893,989 Plan's proportionate share of the
net pension liability as a percentage
of covered payroll 65.48% 145.59% 134.16% 110.17% 112.92% 96.00% 63.25% 78.13% Plan's fiduciary net position as a percentage
of the Plan's total pension liability 88.29% 75.10% 75.26% 75.26% 73.31% 74.06% 78.40% 79.82% Notes to Schedule:

Benefit Changes:

There were no changes in benefits.

Changes in Assumptions:

From fiscal year June 30, 2015 to June 30, 2016:

GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment expense but without reduction for pension plan administrative expense. The discount rate of 7.50% used for June 30, 2014 measurement date was net of administrative expenses. The discount rate of 7.65% used for the June 30, 2015 measure date is without reduction of pension plan administrative expense.

From fiscal year June 30, 2016 to June 30, 2017:

There were no changes in assumptions.

From fiscal year June 30, 2017 to June 30, 2018:

The discount rate was reduced from 7.65% to 7.15%.

From fiscal year June 30, 2018 to June 30, 2019:

There were no significant changes in assumptions.

From fiscal year June 30, 2019 to June 30, 2020:

There were no changes in assumptions.

From fiscal year June 30, 2020 to June 30, 2021:

There were no changes in assumptions.

From fiscal year June 30, 2021 to June 30, 2022:

There were no changes in assumptions.
* - Fiscal year 2015 was the 1st year of implementation; therefore, only eight years are shown.

4.6.a
Packet Pg. 151 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 64 City of Laguna Hills, California
Schedule of Contributions
Last Ten Fiscal Years*
June 30, 2022
Fiscal year ended June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 Contractually required $ 587,229 $ 546,745 $ 488,471 $ 422,127 $ 378,900 $ 346,439 $ 308,768 $ 278,231 contribution (actuarially determined)
Contributions in relation to the
actuarially determined contribution (587,229) (546,745) (488,471) (422,127) (378,900) (346,439) (308,768) (278,231) Contribution deficiency (excess) $ - $ - $ - $ - $ - $ - $ - $ - Covered payroll $ 2,820,234 $ 2,968,115 $ 3,079,318 $ 2,978,329 $ 3,199,277 $ 3,197,331 $ 3,076,464 $ 3,093,576 Contribution as a percentage of
covered payroll 20.82% 18.42% 15.86% 14.17% 11.84% 10.84% 10.04% 8.99% Notes to Schedule:

Valuation Date 6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015 6/30/2014 6/30/2013 6/30/2012 Methods and Assumptions Used to Determine Contribution Rates:

Actuarial cost method Entry age Entry age Entry age Entry age Entry age Entry age Entry age Entry age Amortization method (1) (1) (1) (1) (1) (1) (1) (1)
Asset valuation method Fair Value Fair Value Fair Value Fair Value Fair Value Fair Value Fair Value 15 Year Smoothed
Market Method
Inflation 2.50% 2.50% 2.625% 2.75% 2.75% 2.75% 2.75% 2.75% Salary increases (2) (2) (2) (2) (2) (2) (2) (2)
Investment rate of return 7.15 (3) 7.15 (3) 7.25 (3) 7.375% (3) 7.50% (3) 7.50% (3) 7.50% (3) 7.50% (3) Retirement age (4) (4) (4) (4) (4) (4) (4) (4)
Mortality (5) (5) (5) (5) (5) (5) (5) (5)
(1) Level percentage of payroll, closed
(2) Depending on age, service, and type of employment
(3) Net of pension plan investment expense, including inflation (4) 50 years (2%@60), 52 years (2%@62)**
(5) Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board
* - Fiscal year 2015 was the 1st year of implementation; therefore, only seven years are shown.

4.6.a
Packet Pg. 152 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) See Note to Required Supplementary Information 65
City of Laguna Hills, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – General Fund
Year Ended June 30, 2022
Variance with
Final Budget
Actual Positive/
Original Final Amounts (Negative)
Revenues:

Taxes $ 19,855,872 $ 19,855,872 $ 21,554,295 $ 1,698,423 Licenses and permits 1,089,225 1,089,225 1,632,785 543,560 Intergovernmental revenues 25,625 25,625 49,588 23,963
Charges for services 1,091,015 1,091,015 894,419 (196,596) Fines and forfeitures 175,000 175,000 173,454 (1,546)
Investment income (loss) 100,000 100,000 (141,330) (241,330) Total revenues 22,336,737 22,336,737 24,163,211 1,826,474 Expenditures:

Current:

General government 4,358,038 4,413,038 4,070,347 342,691 Public services 4,696,716 4,696,716 4,754,955 (58,239)
Community development 1,523,692 1,523,692 1,761,776 (238,084) Community services 2,037,088 2,037,088 1,921,075 116,013 Public safety 9,435,414 9,435,414 8,988,518 446,896
Debt service:

Principal retirement 90,000 90,000 92,560 (2,560)
Total expenditures 22,175,948 22,230,948 21,667,248 563,700 Excess (Deficiency) of Revenues
Over (Under) Expenditures 160,789 105,789 2,495,963 2,390,174 Other Financing Sources (Uses):

Transfers in 8,521,797 8,576,197 7,666,600 (909,597)
Transfers out (5,850,767) (5,969,867) (5,194,693) 775,174 Total other financing
sources (uses) 2,671,030 2,606,330 2,471,907 (134,423)
Net Change in Fund Balance 2,831,819 2,712,119 4,967,870 2,255,751 Fund Balance at Beginning of the Year 8,826,579 8,826,579 8,826,579 - Fund Balance at End of the Year $ 11,658,398 $ 11,538,698 $ 13,794,449 $ 2,255,751 Budget Amounts

4.6.a
Packet Pg. 153 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) See Note to Required Supplementary Information 66
City of Laguna Hills, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – ARPA Special Revenue Fund
Year Ended June 30, 2022
Variance with
Final Budget
Actual Positive/
Original Final Amounts (Negative)
Revenues:

Intergovernmental revenues $ 3,732,689 $ 3,732,689 $ 3,732,689 $ - Investment income - - 10,723 10,723
Total revenues 3,732,689 3,732,689 3,743,412 10,723
Excess (Deficiency) of Revenues
Over (Under) Expenditures 3,732,689 3,732,689 3,743,412 10,723 Other Financing Sources (Uses):

Transfers out (2,632,255) (2,632,255) (3,743,412) (1,111,157) Net Change in Fund Balance 1,100,434 1,100,434 - (1,100,434) Fund Balance at Beginning of the Year - - - -
Fund Balance at End of the Year $ 1,100,434 $ 1,100,434 $ - $ (1,100,434) Budget Amounts

4.6.a
Packet Pg. 154 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 67 City of Laguna Hills, California
Note to Required Supplementary Information
Year Ended June 30, 2022
Note 1 - Budgets and Budgetary Accounting
Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America and are used as a management control device. The City Council approves the two-year budget submitted by the City Manager prior to the beginning of the new two-year budget cycle. The Council conducts public hearings prior to its adoption. All remaining appropriations in the Operating Budget will be carried over from the first year to the second year of the two-year budget period. The City Council has the legal authority to amend the budget at any time during the fiscal year. The City Manager has the authority to transfer budgeted amounts between funds and divisions as deemed necessary to meet the City’s needs within the overall legal limit established by the City Council. The city maintains budgetary controls to ensure compliance with legal provisions embodied in the appropriated budget approved by the City Council. The level of budgetary control is total expenditures by fund. Formal budgetary integration is employed as a management control device during the fiscal year for the governmental fund types.

Biennial budgets are adopted for all governmental funds except for certain special revenue funds and capital projects funds, which adopt project length budgets. The following Special Revenue Funds did not have an adopted budget during the current fiscal year: CARITS, Public Art, CDBG, SB 1383 Grant, and Water Conservation.

The following funds had expenditures in excess of appropriations for the year ended June 30, 2022:

Variance
Positive
Appropriations Expenditures (Negative)
Major Governmental
ARPA $ 2,632,255 $ 3,743,412 $ (1,111,157)
Non-major Governmental
Special Revenue Funds:

CARES Act $ - $ 3,609 $ (3,609)
AB 2766 104,400 118,585 (14,185)
C&D Forfeited Deposits 130,000 168,052 (38,052)
SLESF/COPS BRULTE 150,000 161,688 (11,688)

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Packet Pg. 156 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) Supplementary Information

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Packet Pg. 158 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 68 City of Laguna Hills, California
Non-Major Governmental Funds
June 30, 2022
CARES Act Fund - The CARES Act Special Revenue Fund is used to account for revenues received and expenditures made for the CARES Act funds received from the County and State to respond to COVID-19.

Gas Tax Fund - Used to account for revenues and expenditures for general street improvement maintenance related to the City’s share of state gasoline taxes collected under Street and Highway Code, Sections 2103, 2105, 2106,2107 and 2107.5.

Measure M Fund - Used to account for Measure M revenues from the Orange County Transportation Authority to be used for street improvement and transportation system maintenance.

SB1 RMRA Fund - Used to account for revenues received from the State SB1 taxes. Expenditures are restricted to basic road maintenance, rehabilitation, and critical safety projects.

AB 2766 Fund - Used to account for revenues and expenditures for air quality improvement. AB 2766 was enacted to authorize air pollution control districts to impose fees on motor vehicles.

Senior Mobility Program Fund - Used to account for revenues and expenditures related to help design and operate a transit program that best fits the needs of older adults under the OCTA Senior Mobility Program.

CARITS Fund - Used to account for revenues and expenditures related to the cooperative agreement with the County of Orange for Coastal Area Road Improvement and Traffic Signals (CARITS) fee program.

CDBG Fund - Used to account for revenues and expenditures to improve local and national objectives to provide decent and safe housing for low- and moderate-income families. This is grant funding obtained from the United States Department of Housing and Urban Development (HUD) for the purposes of rehabilitating “eligible deteriorating housing.

Public Art Fund - Used to account for revenues and expenditures related to the City’s Public Art program designed to enhance the cultural and aesthetic environment and to encourage creativity, education and appreciation of the arts.

Beverage Recycling Fund - Used to account for revenues and expenditures related to grant funding received from the California State Department of Conservation for the purpose of implementing and supporting beverage container recycling programs within the City.

CR&R Recycling Fees Fund - Used to account for contractual revenues received from the City’s franchised hauler, CR&R, for the purposes of recycling consulting services and general recycling activity expenditures.

C & D Forfeited Deposits Fund - Used to account for Construction and Demolition Waste Recycling Program security deposits, which have been forfeited by the applicant, used for administration costs of the program, or on programs to divert the waste from construction, demolition and alteration projects from landfill disposal, or other recycling programs.

SB 1383 Grant Fund – Used to account for a one-time grant program meant to provide aid in the implementation of regulations adopted by CalRecycle pursuant to Chapter 395, Statutes of 2016 and SB170 Budget Act of 2021.

4.6.a
Packet Pg. 159 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 69 City of Laguna Hills, California
Non-Major Governmental Funds
June 30, 2022
CASP Fund - (Certified Access Specialist Program) Used to account for revenues and expenditures related to Senate Bill 1186 funds that are to be used for disability access and compliance with construction-related accessibility requirements.

Water Conservation Fund - Used to account for revenues and expenditures related to water use efficiency and conservation programs.

Grants & Contributions Fund - Used to account for revenues and expenditures made for specific projects including landscape improvements and certain capital expenditures. Land developers and builders, as well as other public agencies provide financing.

SLESF/COPS BRULTE Fund - Used to account for revenues received and expenditures made for front line law enforcement services related to the allocations received through the State Supplemental Law Enforcement Services Fund (SLESF)/COPS program.

Debt Service Fund - Used to pay the City’s debt service on its COP issue.

4.6.a
Packet Pg. 160 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 70 City of Laguna Hills, California
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2022
SB1
CARES Act Gas Tax Measure M RMRA
Assets:

Cash and investments $ - $ 108,566 $ - $ -
Receivables:

Accounts - - - -
Due from other funds - - - -
Due from other governments - 133,964 162,672 109,241
Restricted cash and investments - - - -
Total assets $ - $ 242,530 $ 162,672 $ 109,241
Liabilities and Fund Balances
Liabilities:

Accounts payable $ - $ - $ 122,746 $ -
Accrued liabilities - - - -
Due to other funds - - 39,926 109,241
Total liabilities - - 162,672 109,241
Deferred Inflows of Resources:

Unavailable revenues - - 35,000 -
Total deferred inflows of resources - - 35,000 -
Fund balances:

Restricted: - 242,530 - -
Unassigned - - (35,000) -
Total fund balances - 242,530 (35,000) -
Total liabilities and
fund balances $ - $ 242,530 $ 162,672 $ 109,241
Special Revenue Funds

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Packet Pg. 161 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 71 City of Laguna Hills, California
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2022
Assets:

Cash and investments
Receivables:

Accounts
Due from other funds
Due from other governments
Restricted cash and investments
Total assets
Liabilities and Fund Balances
Liabilities:

Accounts payable
Accrued liabilities
Due to other funds
Total liabilities
Deferred Inflows of Resources:

Unavailable revenues
Total deferred inflows of resources
Fund balances:

Restricted:

Unassigned
Total fund balances
Total liabilities and
fund balances
Senior
Mobility
AB 2766 Program CARITS CDBG
$ 216,777 $ 161,508 $ 1,276,481 $ -
- - - -
- - - -
10,220 8,266 - -
- - - -
$ 226,997 $ 169,774 $ 1,276,481 $ -
$ - $ - $ - $ -
- 258 - -
- - - -
- 258 - -
- - - -
- - - -
226,997 169,516 1,276,481 -
- - - -
226,997 169,516 1,276,481 -
$ 226,997 $ 169,774 $ 1,276,481 $ -
Special Revenue Funds

4.6.a
Packet Pg. 162 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 72 City of Laguna Hills, California
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2022
Assets:

Cash and investments
Receivables:

Accounts
Due from other funds
Due from other governments
Restricted cash and investments
Total assets
Liabilities and Fund Balances
Liabilities:

Accounts payable
Accrued liabilities
Due to other funds
Total liabilities
Deferred Inflows of Resources:

Unavailable revenues
Total deferred inflows of resources
Fund balances:

Restricted:

Unassigned
Total fund balances
Total liabilities and
fund balances

CR&R C & D
Public Beverage Recycling Forfeited
Art Recycling Fees Deposits
$ 72,180 $ 8,549 $ 9,069 $ 34,214
- - - -
- - - -
- - - -
- - - -
$ 72,180 $ 8,549 $ 9,069 $ 34,214
$ - $ - $ - $ -
- - - 15,437
- - - -
- - - 15,437
- - - -
- - - -
72,180 8,549 9,069 18,777
- - - -
72,180 8,549 9,069 18,777
$ 72,180 $ 8,549 $ 9,069 $ 34,214
Special Revenue Funds

4.6.a
Packet Pg. 163 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 73 City of Laguna Hills, California
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2022
Assets:

Cash and investments
Receivables:

Accounts
Due from other funds
Due from other governments
Restricted cash and investments
Total assets
Liabilities and Fund Balances
Liabilities:

Accounts payable
Accrued liabilities
Due to other funds
Total liabilities
Deferred Inflows of Resources:

Unavailable revenues
Total deferred inflows of resources
Fund balances:

Restricted:

Unassigned
Total fund balances
Total liabilities and
fund balances
Water Grants &
SB 1383 Grant CASP Conservation Contributions
$ 44,872 $ 25,175 $ 343,539 $ -
- 1,623 - -
- - - -
- - - 218,713
- - - -
$ 44,872 $ 26,798 $ 343,539 $ 218,713
$ - $ - $ - $ -
- - - -
- - - 130,237
- - - 130,237
- - - 218,713
- - - 218,713
44,872 26,798 343,539 -
- - - (130,237)
44,872 26,798 343,539 (130,237)
$ 44,872 $ 26,798 $ 343,539 $ 218,713
Special Revenue Funds

4.6.a
Packet Pg. 164 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 74 City of Laguna Hills, California
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2022
Assets:

Cash and investments
Receivables:

Accounts
Due from other funds
Due from other governments
Restricted cash and investments
Total assets
Liabilities and Fund Balances
Liabilities:

Accounts payable
Accrued liabilities
Due to other funds
Total liabilities
Deferred Inflows of Resources:

Unavailable revenues
Total deferred inflows of resources
Fund balances:

Restricted:

Unassigned
Total fund balances
Total liabilities and
fund balances
Special Revenue
Funds Total
Nonmajor
SLEFS/COPS Governmental
BRULTE Debt Service Funds
$ - $ - $ 2,300,930
- - 1,623
- 3,384 3,384
- - 643,076
- 1,784,112 1,784,112
$ - $ 1,787,496 $ 4,733,125
$ - $ 122,746
- - 15,695
- - 279,404
- - 417,845
253,713
- - 253,713
- 1,787,496 4,226,804
- - (165,237)
- 1,787,496 4,061,567
$ - $ 1,787,496 $ 4,733,125

4.6.a
Packet Pg. 165 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 75 City of Laguna Hills, California
Combining Statement of Revenues, Expenditure, and Changes in Fund Balances Non-Major Governmental Funds
Year Ended June 30, 2022
SB1
CARES Act Gas Tax Measue M RMRA
Revenues:

Taxes $ - $ - $ - $ -
Licenses and permits - - - -
Intergovernmental 3,609 736,266 731,430 627,548
Investment income (loss) - 4,222 930 2,820
Other revenues - - - -
Total revenues 3,609 740,488 732,360 630,368
Expenditures:

Current:

General government - - - -
Public services - - - -
Community services - - - -
Public safety 3,609 - - -
Capital outlay - - - -
Debt service:

Principal - - - -
Interest and fiscal charges - - - -
Total expenditures 3,609 - - -
Excess (deficiency) of revenues
over (under) expenditures - 740,488 732,360 630,368
Other Financing Sources (Uses):

Transfers in - - - -
Transfers out - (1,479,362) (767,360) (1,214,489)
Total other financing sources (uses) - (1,479,362) (767,360) (1,214,489) Net Change in Fund Balances - (738,874) (35,000) (584,121) Fund Balances (Deficit), Beginning of Year - 981,404 - 584,121 Fund Balances (Deficit), End of Year $ - $ 242,530 $ (35,000) $ - Special Revenue Funds

4.6.a
Packet Pg. 166 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 76 City of Laguna Hills, California
Combining Statement of Revenues, Expenditure, and Changes in Fund Balances Non-Major Governmental Funds
Year Ended June 30, 2022
Revenues:

Taxes
Licenses and permits
Intergovernmental
Investment income (loss)
Other revenues
Total revenues
Expenditures:

Current:

General government
Public services
Community services
Public safety
Capital outlay
Debt service:

Principal
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other Financing Sources (Uses):

Transfers in
Transfers out
Total other financing sources (uses)
Net Change in Fund Balances
Fund Balances (Deficit), Beginning of Year
Fund Balances (Deficit), End of Year
Senior
Mobility
AB 2766 Program CARITS CDBG
$ - $ - $ - $ -
- - - -
39,857 47,358 - -
877 450 3,656 -
- - - -
40,734 47,808 3,656 -
- - - -
- - - -
- 8,242 - -
- - - -
57,520 - - -
- - - -
- - - -
57,520 8,242 - -
(16,786) 39,566 3,656 -
- 1,648 - -
(61,065) - - -
(61,065) 1,648 - -
(77,851) 41,214 3,656 -
304,848 128,302 1,272,825 -
$ 226,997 $ 169,516 $ 1,276,481 $ -
Special Revenue Funds

4.6.a
Packet Pg. 167 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 77 City of Laguna Hills, California
Combining Statement of Revenues, Expenditure, and Changes in Fund Balances Non-Major Governmental Funds
Year Ended June 30, 2022
Revenues:

Taxes
Licenses and permits
Intergovernmental
Investment income (loss)
Other revenues
Total revenues
Expenditures:

Current:

General government
Public services
Community services
Public safety
Capital outlay
Debt service:

Principal
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other Financing Sources (Uses):

Transfers in
Transfers out
Total other financing sources (uses)
Net Change in Fund Balances
Fund Balances (Deficit), Beginning of Year
Fund Balances (Deficit), End of Year

CR&R C & D
Public Beverage Recycling Forfeited
Art Recycling Fees Deposits
$ - $ 8,022 $ 2,000 $ -
- - - 115,587
- - - -
207 32 26 91
- - - -
207 8,054 2,026 115,678
- - - -
- 18,935 - 168,052
- - - -
- - - -
- - - -
- - - -
- - - -
- 18,935 - 168,052
207 (10,881) 2,026 (52,374)
- - - -
- - - -
- - - -
207 (10,881) 2,026 (52,374)
71,973 19,430 7,043 71,151
$ 72,180 $ 8,549 $ 9,069 $ 18,777
Special Revenue Funds

4.6.a
Packet Pg. 168 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 78 City of Laguna Hills, California
Combining Statement of Revenues, Expenditure, and Changes in Fund Balances Non-Major Governmental Funds
Year Ended June 30, 2022
Revenues:

Taxes
Licenses and permits
Intergovernmental
Investment income (loss)
Other revenues
Total revenues
Expenditures:

Current:

General government
Public services
Community services
Public safety
Capital outlay
Debt service:

Principal
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other Financing Sources (Uses):

Transfers in
Transfers out
Total other financing sources (uses)
Net Change in Fund Balances
Fund Balances (Deficit), Beginning of Year
Fund Balances (Deficit), End of Year
Water Grants &
SB 1383 Grant CASP Conservation Contributions
$ 44,821 $ - $ - $ -
- 5,706 - -
- - - 10,652
51 70 984 291
- - - 9,859
44,872 5,776 984 20,802
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
44,872 5,776 984 20,802
- - - -
- - - (239,224)
- - - (239,224)
44,872 5,776 984 (218,422)
- 21,022 342,555 88,185
$ 44,872 $ 26,798 $ 343,539 $ (130,237)
Special Revenue Funds

4.6.a
Packet Pg. 169 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 79 City of Laguna Hills, California
Combining Statement of Revenues, Expenditure, and Changes in Fund Balances Non-Major Governmental Funds
Year Ended June 30, 2022
Revenues:

Taxes
Licenses and permits
Intergovernmental
Investment income (loss)
Other revenues
Total revenues
Expenditures:

Current:

General government
Public services
Community services
Public safety
Capital outlay
Debt service:

Principal
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other Financing Sources (Uses):

Transfers in
Transfers out
Total other financing sources (uses)
Net Change in Fund Balances
Fund Balances (Deficit), Beginning of Year
Fund Balances (Deficit), End of Year
Special Revenue
Funds Total
Nonmajor
SLEFS/COPS Debt Service Governmental
BRULTE Funds
$ - $ - $ 54,843
- - 121,293
161,285 - 2,358,005
403 (16,315) (1,205)
- - 9,859
161,688 (16,315) 2,542,795
- - -
- - 186,987
- - 8,242
- - 3,609
- - 57,520
- 1,670,000 1,670,000
- 129,922 129,922
- 1,799,922 2,056,280
161,688 (1,816,237) 486,515
- 1,792,821 1,794,469
(161,688) - (3,923,188)
(161,688) 1,792,821 (2,128,719)
- (23,416) (1,642,204)
- 1,810,912 5,703,771
$ - $ 1,787,496 $ 4,061,567

4.6.a
Packet Pg. 170 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 80 City of Laguna Hills, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Capital Projects Fund – Major Fund
Year Ended June 30, 2022
Variance with
Final Budget
Actual Positive/
Original Final Amounts (Negative)
Expenditures:

Current:

General government $ - $ - $ - $ -
Capital outlay 3,550,000 3,659,400 3,207,787 451,613
Total expenditures 4,040,000 4,159,100 3,400,224 758,876 Excess (Deficiency) of Revenues
Over (Under) Expenditures (4,040,000) (4,159,100) (3,400,224) 758,876 Other Financing Sources (Uses):

Transfers in 4,040,000 4,159,100 3,400,224 (758,876)
Net Change in Fund Balance - - - -
Fund Balance at Beginning of the Year - - - -
Fund Balance at End of the Year $ - $ - $ - $ -
Budget Amounts

4.6.a
Packet Pg. 171 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 81 City of Laguna Hills, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual CARES Act Special Revenue Fund
Year Ended June 30, 2022
Variance with
Final Budget
Actual Positive/
Original Final Amounts (Negative)
Revenues:

Intergovernmental revenues $ - $ - $ 3,609 $ 3,609
Total revenues - - 3,609 3,609
Expenditures:

Current:

Public safety - - 3,609 (3,609)
Total expenditures - - 3,609 (3,609)
Excess (Deficiency) of Revenues
Over (Under) Expenditures - - - -
Net Change in Fund Balance - - - -
Fund Balance at Beginning of the Year - - - -
Fund Balance at End of the Year $ - $ - $ - $ -
Budget Amounts

4.6.a
Packet Pg. 172 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 82 City of Laguna Hills, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Gas Tax Special Revenue Fund
Year Ended June 30, 2022
Variance with
Final Budget
Actual Positive/
Original Final Amounts (Negative)
Revenues:

Intergovernmental revenues $ 766,768 $ 766,768 $ 736,266 $ (30,502) Investment income - - 4,222 4,222
Total revenues 766,768 766,768 740,488 (26,280)
Excess (Deficiency) of Revenues
Over (Under) Expenditures 766,768 766,768 740,488 (26,280) Other Financing Sources (Uses):

Transfers out (1,700,000) (1,700,000) (1,479,362) 220,638 Total other financing
sources (uses) (1,700,000) (1,700,000) (1,479,362) 220,638 Net Change in Fund Balance (933,232) (933,232) (738,874) 194,358 Fund Balance at Beginning of the Year 981,404 981,404 981,404 - Fund Balance at End of the Year $ 48,172 $ 48,172 $ 242,530 $ 194,358 Budget Amounts

4.6.a
Packet Pg. 173 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 83 City of Laguna Hills, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Measure M Special Revenue Fund
Year Ended June 30, 2022
Variance with
Final Budget
Actual Positive/
Original Final Amounts (Negative)
Revenues:

Intergovernmental revenues $ 776,042 $ 776,042 $ 731,430 $ (44,612) Investment income - - 930 930
Total revenues 776,042 776,042 732,360 (43,682)
Excess (Deficiency) of Revenues
Over (Under) Expenditures 776,042 776,042 732,360 (43,682) Other Financing Sources (Uses):

Transfers out (776,042) (776,042) (767,360) 8,682
Total other financing
sources (uses) (776,042) (776,042) (767,360) 8,682
Net Change in Fund Balance - - (35,000) (35,000)
Fund Balance at Beginning of the Year - - - -
Fund Balance at End of the Year $ - $ - $ (35,000) $ (35,000) Budget Amounts

4.6.a
Packet Pg. 174 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 84 City of Laguna Hills, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual SB1 RMRA Special Revenue Fund
Year Ended June 30, 2022
Variance with
Final Budget
Actual Positive/
Original Final Amounts (Negative)
Revenues:

Intergovernmental revenues $ 605,278 $ 605,278 $ 627,548 $ 22,270 Investment income - - 2,820 2,820
Total revenues 605,278 605,278 630,368 25,090
Excess (Deficiency) of Revenues
Over (Under) Expenditures 605,278 605,278 630,368 25,090 Other Financing Sources (Uses):

Transfers out (1,300,000) (1,300,000) (1,214,489) 85,511 Total other financing
sources (uses) (1,300,000) (1,300,000) (1,214,489) 85,511 Net Change in Fund Balance (694,722) (694,722) (584,121) 110,601 Fund Balance at Beginning of the Year 584,121 584,121 584,121 - Fund Balance at End of the Year $ (110,601) $ (110,601) $ - $ 110,601 Budget Amounts

4.6.a
Packet Pg. 175 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 85 City of Laguna Hills, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual AB 2766 Special Revenue Fund
Year Ended June 30, 2022
Variance with
Final Budget
Actual Positive/
Original Final Amounts (Negative)
Revenues:

Intergovernmental revenues $ 40,000 $ 40,000 $ 39,857 $ (143) Investment income - - 877 877
Total revenues 40,000 40,000 40,734 734
Expenditures:

Current:

General government - - - -
Community development 50,000 50,000 - 50,000
Total expenditures 50,000 50,000 57,520 (7,520)
Excess (Deficiency) of Revenues
Over (Under) Expenditures (10,000) (10,000) (16,786) (6,786) Other Financing Sources (Uses):

Transfers out - (54,400) (61,065) (6,665)
Total other financing
sources (uses) - (54,400) (61,065) (6,665)
Net Change in Fund Balance (10,000) (64,400) (77,851) (13,451) Fund Balance at Beginning of the Year 304,848 304,848 304,848 - Fund Balance at End of the Year $ 294,848 $ 240,448 $ 226,997 $ (13,451) Budget Amounts

4.6.a
Packet Pg. 176 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 86 City of Laguna Hills, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Senior Mobility Program Special Revenue Fund
Year Ended June 30, 2022
Variance with
Final Budget
Actual Positive/
Original Final Amounts (Negative)
Revenues:

Intergovernmental revenues $ 38,970 $ 38,970 $ 47,358 $ 8,388 Investment income - - 450 450
Total revenues 38,970 38,970 47,808 8,838
Expenditures:

Current:

Community services 54,230 54,230 8,242 45,988
Total expenditures 54,230 54,230 8,242 45,988
Excess (Deficiency) of Revenues
Over (Under) Expenditures (15,260) (15,260) 39,566 54,826 Other Financing Sources (Uses):

Transfers in 10,846 10,846 1,648 (9,198)
Total other financing
sources (uses) 10,846 10,846 1,648 (9,198)
Net Change in Fund Balance (4,414) (4,414) 41,214 45,628 Fund Balance at Beginning of the Year 128,302 128,302 128,302 - Fund Balance at End of the Year $ 123,888 $ 123,888 $ 169,516 $ 45,628 Budget Amounts

4.6.a
Packet Pg. 177 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 87 City of Laguna Hills, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Beverage Recycling Special Revenue Fund
Year Ended June 30, 2022
Variance with
Final Budget
Actual Positive/
Original Final Amounts (Negative)
Revenues:

Taxes $ - $ - $ 8,022 $ 8,022
Investment income - - 32 32
Total revenues - - 8,054 8,054
Expenditures:

Current:

Public services 19,900 19,900 18,935 965
Total expenditures 19,900 19,900 18,935 965
Excess (Deficiency) of Revenues
Over (Under) Expenditures (19,900) (19,900) (10,881) 9,019 Net Change in Fund Balance (19,900) (19,900) (10,881) 9,019 Fund Balance at Beginning of the Year 19,430 19,430 19,430 - Fund Balance at End of the Year $ (470) $ (470) $ 8,549 $ 9,019 Budget Amounts

4.6.a
Packet Pg. 178 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 88 City of Laguna Hills, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual CR&R Recycling Special Revenue Fund
Year Ended June 30, 2022
Variance with
Final Budget
Actual Positive/
Original Final Amounts (Negative)
Revenues:

Taxes $ 110,000 $ 110,000 $ 2,000 $ (108,000)
Investment income - - 26 26
Total revenues 110,000 110,000 2,026 (107,974)
Expenditures:

Current:

Public services 117,000 117,000 - 117,000
Total expenditures 117,000 117,000 - 117,000
Excess (Deficiency) of Revenues
Over (Under) Expenditures (7,000) (7,000) 2,026 9,026
Net Change in Fund Balance (7,000) (7,000) 2,026 9,026
Fund Balance at Beginning of the Year 7,043 7,043 7,043 - Fund Balance at End of the Year $ 43 $ 43 $ 9,069 $ 9,026 Budget Amounts

4.6.a
Packet Pg. 179 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 89 City of Laguna Hills, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual C & D Forfeited Deposits Special Revenue Fund
Year Ended June 30, 2022
Variance with
Final Budget
Actual Positive/
Original Final Amounts (Negative)
Revenues:

Licenses and permits $ 100,000 $ 100,000 $ 115,587 $ 15,587 Investment income - - 91 91
Total revenues 100,000 100,000 115,678 15,678
Expenditures:

Current:

General government - - - -
Public services 130,000 130,000 168,052 (38,052)
Total expenditures 130,000 130,000 168,052 (38,052)
Excess (Deficiency) of Revenues
Over (Under) Expenditures (30,000) (30,000) (52,374) (22,374) Net Change in Fund Balance (30,000) (30,000) (52,374) (22,374) Fund Balance at Beginning of the Year 71,151 71,151 71,151 - Fund Balance at End of the Year $ 41,151 $ 41,151 $ 18,777 $ (22,374) Budget Amounts

4.6.a
Packet Pg. 180 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 90 City of Laguna Hills, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual CASP Fund
Year Ended June 30, 2022
Variance with
Final Budget
Actual Positive/
Original Final Amounts (Negative)
Revenues:

Licenses and permits $ 5,000 $ 5,000 $ 5,706 $ 706
Investment income - - 70 70
Total revenues 5,000 5,000 5,776 776
Expenditures:

Current:

General government 5,000 5,000 - 5,000
Total expenditures 5,000 5,000 - 5,000
Excess (Deficiency) of Revenues
Over (Under) Expenditures - - 5,776 5,776
Net Change in Fund Balance - - 5,776 5,776
Fund Balance at Beginning of the Year 21,022 21,022 21,022 - Fund Balance at End of the Year $ 21,022 $ 21,022 $ 26,798 $ 5,776 Budget Amounts

4.6.a
Packet Pg. 181 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 91 City of Laguna Hills, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Grants and Contributions Special Revenue Fund
Year Ended June 30, 2022
Variance with
Final Budget
Actual Positive/
Original Final Amounts (Negative)
Revenues:

Intergovernmental revenues $ 505,000 $ 505,000 $ 10,652 $ (494,348) Investment income - - 291 291
Other revenue - - 9,859 9,859
Total revenues 505,000 505,000 20,802 (484,198)
Excess (Deficiency) of Revenues
Over (Under) Expenditures 505,000 505,000 20,802 (484,198) Other Financing Sources (Uses):

Transfers out (505,000) (505,000) (239,224) 265,776
Total other financing
sources (uses) (505,000) (505,000) (239,224) 265,776
Net Change in Fund Balance - - (218,422) (218,422)
Fund Balance at Beginning of the Year 88,185 88,185 88,185 - Fund Balance at End of the Year $ 88,185 $ 88,185 $ (130,237) $ (218,422) Budget Amounts

4.6.a
Packet Pg. 182 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 92 City of Laguna Hills, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual SLESF/COPS Brulte Special Revenue Fund
Year Ended June 30, 2022
Variance with
Final Budget
Actual Positive/
Original Final Amounts (Negative)
Revenues:

Intergovernmental revenues $ 150,000 $ 150,000 $ 161,285 $ 11,285 Investment income - - 403 403
Total revenues 150,000 150,000 161,688 11,688
Excess (Deficiency) of Revenues
Over (Under) Expenditures 150,000 150,000 161,688 11,688 Other Financing Sources (Uses):

Transfers out (150,000) (150,000) (161,688) (11,688)
Total other financing
sources (uses) (150,000) (150,000) (161,688) (11,688)
Net Change in Fund Balance - - - -
Fund Balance at Beginning of the Year - - - -
Fund Balance at End of the Year $ - $ - $ - $ -
Budget Amounts

4.6.a
Packet Pg. 183 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 93 City of Laguna Hills, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Debt Service Fund – Major Fund
Year Ended June 30, 2022
Variance with
Final Budget
Actual Positive/
Original Final Amounts (Negative)
Revenues:

Investment income $ - $ - $ (16,315) $ (16,315)
Total revenues - - (16,315) (16,315)
Expenditures:

Debt service:

Interest and fiscal charges 129,922 129,922 129,922 -
Principal retirement 1,670,000 1,670,000 1,670,000 -
Total expenditures 1,799,922 1,799,922 1,799,922 -
Excess (Deficiency) of Revenues
Over (Under) Expenditures (1,799,922) (1,799,922) (1,816,237) (16,315) Other Financing Sources (Uses):

Transfers in 1,799,921 1,799,921 1,792,821 (7,100)
Transfers out (1,408,500) (1,408,500) - 1,408,500
Total other financing
sources (uses) 391,421 391,421 1,792,821 1,401,400
Net Change in Fund Balance (1,408,501) (1,408,501) (23,416) 1,385,085 Fund Balance at Beginning of the Year 1,810,912 1,810,912 1,810,912 - Fund Balance at End of the Year $ 402,411 $ 402,411 $ 1,787,496 $ 1,385,085 Budget Amounts

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Packet Pg. 184 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) Statistical Section

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Packet Pg. 185 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) This page intentionally left blank.

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Packet Pg. 186 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 94 City of Laguna Hills, California
Statistical Section
Year Ended June 30, 2022
This part of the City of Laguna Hills’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health.

Contents
Financial Trends
These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time.

Revenue Capacity
These schedules contain information to help the reader assess the factors affecting the City's ability to generate its property and sales taxes.

Debt Capacity
These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future.

Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place.

Operating Information
These schedules contain information about the City's operations and resources to help the reader understand how the City's financial information relates to the services the City provides and the activities it performs.

Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year.

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Packet Pg. 187 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Governmental activities
Net Investment in capital assets $     84,618,576 $     84,465,323 $     84,623,408 $  83,320,937 $     82,980,468 $     81,972,798 $     79,706,238 $     80,312,979 $     78,878,248 $     79,981,695 Restricted 998,727 2,414,686 5,240,670 2,470,305 2,394,252 2,155,589 3,462,431 2,538,747 3,894,336 4,226,804 Unrestricted 8,340,769 5,751,121 1,789,992 4,916,994 3,315,387 2,956,001 4,583,713 4,177,487 4,089,857 8,289,453 Total government activities net position $     93,958,072 $     92,631,130 $     91,654,070 $  90,708,236 $     88,690,107 $     87,084,388 $     87,752,382 $     87,029,213 $     86,862,441 $     92,497,952 Business‐type activities
Net Investment in capital assets $     10,403,077 $       9,894,503 $       9,324,493 $     8,998,114 $       8,343,488 $       7,635,240 $       6,964,651 $       6,311,356 $       5,577,506 $       5,556,210 Restricted ‐Unrestricted 47,563 47,801 (36,397) 68,288 117,338 236,196 227,320 178,595 218,820 212,173 Total business‐type activities net position $     10,450,640 $       9,942,304 $       9,288,096 $     9,066,402 $       8,460,826 $       7,871,436 $       7,191,971 $       6,489,951 $       5,796,326 $       5,768,383 Primary government
Net Investment in capital assets $     95,021,653 $     94,359,826 $     93,947,901 $  92,319,051 $     91,323,956 $     89,608,038 $     86,670,889 $     86,624,335 $     84,455,754 $    85,600,905 Restricted 998,727 2,414,686 5,240,670 2,470,305 2,394,252 2,155,589 3,462,431 2,538,747 3,894,336 4,226,804 Unrestricted 8,388,332 5,798,922 1,753,595 4,985,282 3,432,725 3,192,197 4,811,033 4,356,082 4,308,677 8,438,626 Total primary government net position $   104,408,712 $   102,573,434 $   100,942,166 $  99,774,638 $     97,150,933 $     94,955,824 $     94,944,353 $     93,519,164 $     92,658,767 $     98,266,335 Fiscal Year
95 4.6.a
Packet Pg. 188
Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
ExpensesGovernmental activities:

General Government $ 3,304,687 3,522,274 $ 3,088,372 $ 3,112,783 $ 4,226,233 $ 4,104,012 $ 3,467,852 $ 4,350,707 $ 4,468,341 $ 3,318,690 $ Public services 6,376,642 6,150,553 6,332,724 6,802,499 7,234,921 6,841,288 6,433,542 6,783,242 6,727,008 6,849,279Community development 1,265,719 1,138,280 1,434,213 1,309,210 1,462,611 1,287,931 1,385,455 1,656,277 2,270,417 1,762,606Community services 3,886,180 3,777,102 4,660,667 4,141,792 4,131,886 4,161,070 4,079,412 3,781,731 3,371,755 4,027,705Public safety 6,837,050 6,575,855 7,162,514 6,929,025 8,167,361 8,032,660 8,251,937 8,630,054 9,106,311 9,005,866Interest expense 530,039 583,461 479,589 431,264 376,993 323,513 267,582 202,566 118,455 40,507 Total governmental activities expenses 22,200,317 21,747,525 23,158,079 22,726,573 25,600,005 24,750,474 23,885,780 25,404,577 26,062,287 25,004,653 Business‐type activities:

Property leasing 1,163,305 1,278,434 1,204,437 1,222,043 1,255,765 1,247,849 1,273,554 1,299,630 1,312,224 1,396,618 Total business‐type activities expenses 1,278,434 1,163,305 1,204,437 1,222,043 1,255,765 1,247,849 1,273,554 1,299,630 1,312,224 1,396,618 Total primary government expenses $ 22,910,830 $ 23,478,751 $ 24,362,516 $ 23,948,616 $ 26,855,770 $ 25,998,323 $ 25,159,334 $ 26,704,207 $ 27,374,511 $ 26,401,271 Program Revenues
Government activities:Charges for Services:

General Government $ ‐ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$
Public services 112,629 106,633 136,037 205,446 196,054 189,662 253,438 738,335 1,480,182 787,032 Community development 750,626 799,316 1,050,127 881,286 894,150 988,719 1,010,326 1,182,430 1,009,012 1,042,546 Community services 714,634 608,877 775,330 780,519 756,089 821,388 777,605 345,328 183,008 498,155 Public safety 226,311 186,347 300,032 267,555 228,649 208,461 219,727 175,661 146,395 173,454 Operating Contributions 2,137,580 2,186,050 2,989,299 1,960,392 2,131,220 1,876,109 2,516,513 2,555,054 3,170,212 6,293,799Capital Contributions 945,068 807,545 2,264,558 60,850 716,200 ‐ ‐ 206,675 ‐ 239,224 Total governmental activities program revenues 4,886,848 4,694,768 7,515,383 4,156,048 4,922,362 4,084,339 4,777,609 5,203,483 5,988,809 9,034,210 Business‐type activities:Charges for Services:

Property Leasing 527,931 476,391 500,202 579,313 650,147 658,396 594,026 597,525 618,552 705,583 Operating grants and contributions
Capital grants and contributionsTotal business‐type activities program revenues 527,931 476,391 500,202 579,313 650,147 658,396 594,026 597,525 618,552 705,583Total primary government program revenues $      5,414,779 $      5,171,159 $       8,015,585 $       4,735,361 $       5,572,509 $       4,742,735 $       5,371,635 $       5,801,008 $       6,607,361 $       9,739,793 Net (expense)/revenue
Governmental activities $   (16,860,677) $  (17,505,549) $   (15,642,696) $   (18,570,525) $   (20,677,643) $   (20,666,135) $   (19,108,171) $   (20,201,094) $   (20,073,478) $   (15,970,443) Business‐ type activities (635,374) (802,043) (704,235) (642,730) (605,618) (589,453) (679,528) (702,105) (693,672) (691,035) $   (17,496,051) $  (18,307,592) $   (16,346,931) $   (19,213,255) $   (21,283,261) $   (21,255,588) $   (19,787,699) $   (20,903,199) $   (20,767,150) $   (16,661,478) (continued)
City of Laguna Hills
Change in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
96 4.6.a
Packet Pg. 189
Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
City of Laguna Hills
Change in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
(continued)
General Revenues and Other Changes in Net AssetsGovernmental activities:Taxes Property taxes $      8,722,406 $      8,826,271 $      9,128,568 $      9,660,614 $    10,064,067 $     10,481,864 $    10,981,130 $    11,314,045 $    11,930,666 $    12,340,524 Sales and use taxes 5,305,487 5,562,823 5,603,521 5,439,210 5,779,073 5,755,661 5,966,524 5,372,149 5,825,883 6,940,812 Motor vehicle in lieu taxes 17,332 14,344 13,856 12,506 13,745 16,604 15,273 24,988 23,109 35,897 Other State subvention ‐ 16,549 93,653 57,112 9,209 5,725 22,529 10,613 9,895 ‐ Franchise taxes 1,210,837 1,259,021 1,343,505 1,303,919 1,191,868 1,248,488 1,265,411 1,198,008 1,218,098 1,251,870 Transient occupancy taxes 1,108,290 1,203,422 1,285,455 1,406,823 1,437,420 1,381,719 1,311,213 1,025,047 678,706 1,021,089 12,216 12,251 14,266 14,893 21,911 49,179 99,204 112,250 2,988 (117,321) 21,016 29,706 56,542 150,614 142,221 121,176 114,881 420,825 217,361 133,083 2,769,504 ‐
(293,691) (50,000) (421,000) ‐ ‐ ‐ ‐ ‐ ‐
19,167,088 16,630,696 17,489,366 17,624,691 18,659,514 19,060,416 19,776,165 19,477,925 19,906,706 21,605,954 56 16 27 36 42 63 63 85 47 76
293,691 50,000 421,000 ‐ ‐ ‐ ‐ ‐ ‐
56 293,707 50,027 421,036 42 63 63 85 47 76
$    19,167,144 $    16,924,403 $     17,539,393 $     18,045,727 $     18,659,556 $     19,060,479 $     19,776,228 $     19,478,010 $     19,906,753 $     21,606,030 Investment earnings (loss)
Miscellaneous revenue Sale of capital assets TransfersTotal governmental activities Business‐type activities: Investment earnings
TransfersTotal business‐type activities
Total primary government
Change in Net Position:

Governmental activities $ 2,306,411 $ (874,853) $ 1,846,670 $ (945,834) $ (2,018,129) $ (1,605,719) $ 667,994 $ (723,169) $ (166,772) $ 5,635,511 Business‐type activities (635,318) (508,336) (654,208) (221,694) (605,576) (589,390) (679,465) (702,020) (693,625) (690,959) Total primary government $ 1,671,093 $ (1,383,189) $ 1,192,462 $ (1,167,528) $ (2,623,705) $ (2,195,109) $ (11,471) $ (1,425,189) $ (860,397) $ 4,944,552 97 4.6.a
Packet Pg. 190
Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending City of Laguna Hills
Governmental Activities ‐ Tax Revenues By Source
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Property Sales & Use Motor Vehicle Other State Franchise Transient Year Tax Tax in Lieu Tax Subvention Tax Occupancy Tax Total 2013 8,722,406 5,305,487 17,332 1,210,837 1,108,290 16,364,352 2014 8,826,271 5,562,823 14,344 16,549 1,259,021 1,203,422 16,882,430 2015 9,128,568 5,603,521 13,856 93,653 1,343,505 1,285,455 17,468,558 2016 9,660,614 5,439,210 12,506 57,112 1,303,919 1,406,823 17,880,184 2017 10,064,067 5,779,073 13,745 9,209 1,191,868 1,437,420 18,495,382 2018 10,481,864 5,755,661 16,604 5,725 1,248,488 1,381,719 18,890,061 2019 10,981,130 5,966,524 15,273 22,529 1,265,411 1,311,213 19,562,080 2020 11,314,045 5,372,149 24,988 10,613 1,198,008 1,025,047 18,944,850 2021 11,930,666 5,825,883 23,109 9,895 1,218,098 678,706 19,686,357 2022 12,340,524 6,940,812 35,897 ‐ 1,251,870 1,021,089 21,590,192 98 4.6.a
Packet Pg. 191
Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
General fund
Nonspendable $ 416,994 335,603 $ 318,769 $ $ 81,520 312,137 $ 78,971 $ 99,169 $ 69,834 $ 91,384 $ $ 128,954 Restricted 88,990 Committed Assigned 1,726,228 1,315,557 1,230,959 1,059,959 720,659 871,931 1, 795,659 145,659 910,659 769,926 Unassigned 4,184,661 6,718,179 5,078,583 6,727,197 6,029,507 6,373,541 7,161,146 7,487,247 7,824,536 12,895,569 Total general fund $ 6,327,883 8,369,339 $ 6,717,301 $ 8,099,293 $ 6,831,686 $ 7,324,443 $ 8,405,974 $ 8,352,740 $ 8,826,579 $ 13,794,449 $ All other governmental funds Nonspendable Restricted 4,222,459 2,813,802 5,151,680 4,276,934 4,209,039 3,983,335 5,291,312 4,364,330 5,703,771 4,226,804 Committed Assigned Unassigned ( (245,214) ( 322,781) 229,971) (227,254) (164,472) (165,237) Total all other governmental funds $ 3,899,678 2,568,588 $ 4,921,709 $ 4,049,680 $ 4,209,039 $ 3,983,335 $ 5,291,312 $ 4,199,858 $ 5,703,771 $ 4,061,567 $ Fiscal Year
City of Laguna Hills
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
99 4.6.a
Packet Pg. 192
Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending City of Laguna Hills
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of acounting)
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Revenues:
$ 11,061,533 $ 11,308,714 $ 11,777,528 $ 12,393,356 $ 12,695,355 $ 13,114,068 $ 13,559,754 $ 13,539,101 $ 13,829,470 $ 21,609,138 655,855 778,208 3,195,756 959,138 1,022,542 932,640 981,873 1,775,501 2,432,782 1,754,078 8,597,520 8,864,729 8,765,516 7,897,817 8,506,103 7,602,950 8,463,884 8,264,831 8,920,379 6,140,282 981,063 931,909 944,054 1,156,880 1,068,521 1,159,437 1,152,319 637,373 584,889 894,419 226,311 186,347 300,032 267,555 228,649 208,461 219,727 175,661 146,395 173,454 Taxes
Licenses and permitsIntergovernmentalCharges for current services Fines and forfeituresInvestment income (loss) 25,928 21,608 24,209 35,970 65,691 109,302 200,303 230,657 14,567 (121,953) Total revenues 21,548,210 22,091,515 25,007,095 22,710,716 23,586,861 23,126,858 24,577,860 24,623,124 25,928,482 30,449,418 Expenditures:

Current:

General Government 3,675,542 3,168,265 3,271,039 3,128,699 3,599,531 3,876,923 3,856,802 3,801,648 3,721,950 4,070,347 Public services 4,346,672 4,399,704 4,299,138 4,273,572 4,848,571 4,276,773 4,406,628 4,781,981 4,656,267 5,094,782Community development 1,259,502 1,261,715 1,433,383 1,308,380 1,461,781 1,287,101 1,384,625 1,655,447 2,269,587 1,761,776Community services 1,904,831 1,860,866 2,608,281 2,070,952 2,101,883 2,131,638 2,050,652 1,754,112 1,310,727 1,968,914Public safety 6,591,732 6,826,303 7,153,841 6,917,275 8,149,762 8,025,961 8,243,746 8,621,863 9,098,120 8,992,127 Capital outlay 4,402,694 2,965,511 2,976,435 2,277,446 2,777,691 2,151,578 356,354 3,251,173 1,024,620 3,343,324 Debt service:

Interest 625,043 601,542 553,529 503,429 451,427 397,428 342,922 284,921 208,924 129,922 Principal retirement 1,180,000 1,205,000 1,250,000 1,300,000 1,352,353 1,423,396 1,546,623 1,616,667 1,660,535 1,762,560 Total expenditures 23,986,016 22,288,906 23,545,646 21,779,753 24,742,999 23,570,798 22,188,352 25,767,812 23,950,730 27,123,752 Excess (deficiency) of revenues over expenditures (2,437,806) (197,391) 1,461,449 930,963 (1,156,138) (443,940) 2,389,508 (1,144,688) 1,977,752 3,325,666 (Continued)
Fiscal Year
100

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Packet Pg. 193
Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending (Continued)
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Other financing sources (uses):

Capital Lease Proceeds 47,890 710,993 ‐ ‐ ‐ ‐
Transfers in $ 10,468,784 $ 7,214,336 $ 8,059,715 $ 7,006,357 $ 7,582,790 $ 5,207,406 $ 2,992,799 $ 8,539,794 3,770,978 $ 12,861,293Transfers out (7,508,027) (10,468,784) (8,109,715) (7,427,357) (7,582,790) (5,207,406) (2,992,799) (8,539,794) (3,770,978) (12,861,293)Sale of Capital Assets 2,952,352 Total other financing sources (uses) 2,952,352 (293,691) (50,000) (421,000) 47,890 710,993 ‐ ‐ ‐ ‐ Net change in fund balances $ 514,546 $ (491,082) $ 1,411,449 $ 509,963 $ (1,108,248) $ 267,053 $ 2,389,508 $ (1,144,688) $ 3,325,666 1,977,752Debt service as a percentage of noncapital expenditures 9.22% 9.35% 8.60% 8.76% 8.00% 8.21% 8.57% 8.38% 8.05% 7.96% Fiscal Year
101

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Packet Pg. 194
Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending Fiscal Year End Secured Property
Unsecured
Property
Less Tax‐Exempt
Property
Taxable Assessed
Value
Total Direct Tax
Rate (1)
Estimated Actual
Taxable Value (2)
Factor of Taxable
Assessed Value (3)
Assessed Value as
a Percentage of
Actual Value
2012‐13 5,371,901 143,351 34,825 5,515,252 .05371 5,515,252 1.000000 100.00% 2013‐14 5,509,351 146,695 35,252 5,656,046 .05371 5,656,046 1.000000 100.00% 2014‐15 5,809,642 148,567 35,410 5,958,209 .05371 5,958,209 1.000000 100.00% 2015‐16 6,236,428 183,676 165,185 6,254,919 .05371 8,159,912 1.304559 76.65%2016‐17 6,499,868 187,553 218,920 6,468,501 .05371 9,167,561 1.417262 70.56% 2017‐18 6,728,482 188,841 209,680 6,707,643 .05371 9,373,474 1.397432 71.56% 2018‐19 7,089,277 245,352 212,722 7,121,907 .05371 9,878,938 1.387120 72.09% 2019‐20 7,353,496 211,472 242,642 7,322,326 .05371 9,834,824 1.343128 74.45% 2020‐21 7,623,019 213,636 219,789 7,616,866 .05371 10,190,719 1.337915 74.74% 2021‐22 7,889,791 210,848 167,326 7,933,313 .05371 11,575,188 1.459061 68.54% (2.) Estimated Actual Value is derived from a series of calculations comparing median assessed values from 1940 to current median sale prices. Based on these calculations a multiplier value was extrapolated and applied to current assessed values.

Source: Orange County Assessor data, Avenu Insights & Analytics Source: 2007‐2015 prior ACFR City of Laguna Hills
Assessed Value and Estimated Actual Value of Taxable Property, Citywide Last Ten Fiscal Years (in thousands)
Table has been reformatted to comply with GASB No. 44 and include estimated actual value.(1.) Total direct tax rate is the city share of the 1% Proposition 13 tax only for TRA 31‐001. 102

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Packet Pg. 195
Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending Category 2016‐17 2017‐18 2018‐19 2019‐20 2020‐21 2021‐22 Residential 5,170,783 5,398,624 5,669,336 5,889,434 6,106,523 6,288,266 Commercial 1,107,991 1,100,803 1,180,147 1,217,600 1,264,734 1,345,541 Industrial 221,072 229,033 239,771 246,439 251,738 255,960 Rural 22 23 23 23 24 24
Gross Secured Value 6,499,868 6,728,482 7,089,277 7,353,496 7,623,019 7,889,791 Unsecured Value 187,553 188,841 245,352 211,472 213,636 210,848 Exemptions 218,920 209,680 212,722 242,642 219,789 167,326 Net Taxable Value 6,468,501 6,707,643 7,121,907 7,322,326 7,616,866 7,933,313 Source: Orange County Assessor Data, Avenu Insights & AnalyticsNote - Data was only available for 6 years, as such, full 10 years to be presented as available.

City of Laguna Hills
Last Six Fiscal Years (In Thousands)
Assessed Value of Property by Use Code, Citywide
103

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Packet Pg. 196
Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending 2012‐13 2013‐14 2014‐15 2015‐16 2016‐17 2017‐18 2018‐19 2019‐20 2020‐21 2021‐22 Overlapping Basic Rate 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 Capistrano Union 0.011710 0.009720 0.009000 0.008450 0.008430 0.008000 0.007860 0.007450 0.007560 0.007270 Metropolitan Water District 0.003500 0.003500 0.003500 0.003500 0.003500 0.003500 0.003500 0.003500 0.003500 0.003500 Moulton Niguel Water District 0.145470 0.129770 0.086000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ Saddleback Valley Unified 0.032650 0.032070 0.028060 ‐ ‐ ‐ ‐ ‐ ‐ ‐ Total 1.193330 1.175060 1.126560 1.011950 1.011930 1.011500 1.011360 1.010950 1.011060 1.010770 City Direct Rate City Share of 1% Levy Per Prop 13 0.053710 0.053710 0.053710 0.053710 0.053710 0.053710 0.053710 0.053710 0.053710 0.053710 Source: Orange County Assessor data, Avenu Insights & Analytics TRA 31‐000 is represented.

City of Laguna Hills
Source: 2007‐2015 prior ACFR
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
104

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Packet Pg. 197
Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending Taxpayer Taxable Value ($)
Percent of Total
City Taxable
Value (%)
Taxable Value
($)
Percent of Total
City Taxable
Value (%)
MGP Fund X Laguna Hills LLC         133,903,197 1.69%
Laguna Hills Investment Co         105,045,367 1.32% 22,513,323        0.41% PMI Prado LLC            99,677,397 1.26%
Memorial Health Services            97,731,637 1.23% 24,456,787        0.45% Acquiport Three Corp            88,701,888 1.12% 75,376,203        1.38% Juniper SB Mob LlLC            80,627,990 1.02%
Lakehills CM‐CG LLC            50,307,716 0.63%
ROIC California LLC            0.61% 48,354,211
Vision Star II LLC 42,942,029            0.54%
La Paz Office Plaza LLC 42,916,221            0.54% 30,986,077        0.57% TM Medical Center LLC 42,435,119            0.53%
Pacifica Laguna Hills LLC 39,194,870            0.49%
AG‐LO Oakbrook Owner LLC 30,730,837            0.39%
Spectrum Property Owner LLC 29,557,751            0.37% EQR‐Villa Solana Vistas Inc 25,560,165            0.32% 22,021,792        0.40% Laguna Hills Estate LLC 24,886,167            0.31% 17,918,396        0.33% Sylmar Apartments LLC 22,540,625            0.28% 19,403,152        0.35% Orange Coast Memorial Medic 21,856,642            0.28% Calle De La Louisa Holdings LLC            0.25% 19,954,610 MPVCA Laguna LLC 19,793,480            0.25%
Mouldy LLC 17,013,716            0.21% 14,899,005        0.27% Laguna Hills Office Partners LLC 16,713,738            0.21% K & M Royal Group LLC 16,660,131            0.21% 14,205,809        0.26% La Paz Shopping Center            0.20% 15,953,400
Laguna Hills Real Estate Partners 15,837,709            0.20% Shopping Center Associates 123,340,391     2.25%
TGM Prado LLC 52,565,860        0.96%
Sptmrt Properties Trust 39,987,065        0.73%
LHT Saddleback LLC 36,339,650        0.66%
Lakehills at Laguna LLC 34,680,000        0.63%
Moulton Plaza LLC 22,890,967        0.42%
Columbia California Carlota 18,666,000        0.34%
Colton David A        0.33% 17,986,065
Westport Moulton Parkway Limit 15,555,000        0.28%
The Realty Associates Fund VII 14,889,489        0.27%
Universal Properties Lh Five L        0.25% 13,917,900
Alicia Office Park Associates 13,764,900        0.25%
Laguna Hills Business Park 13,648,468        0.25%
Muller‐Taj        0.24% 13,345,967
Yacoel Maria E        0.24% 13,196,937
Shurgard California Properties 12,799,976        0.23%
Total Top 25 Taxpayers 1,148,896,613 14.48% 699,355,179 12.78% Total Taxable Value 7,933,312,954 5,472,835,364
Source:  Orange County Assessor data, Avenu Insights & Analytics 2021‐22 2012‐13
City of Laguna Hills
Principal Property Tax Payers
Last Fiscal Year and Nine Years Ago
105

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Packet Pg. 198 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) Fiscal Year Secured Unsecured
Taxes Levied for
the Fiscal Year
Amount
Collected % of Levy Other Collections Amount % of Levy
2012‐13 5,587 239 $5,827 $ 5,694 97.7% $ 85 $ 5,779 99% 2013‐14 5,732 261 $5,992 $ 5,885 98.2% $ 62 $ 5,947 99%2014‐15 6,051 275 $6,327 $ 6,180 97.7% $ 52 $ 6,231 98%2015‐16 6,375 232 $6,607 $ 6,456 97.7% $ 72 $ 6,528 99%2016‐17 6,634 300 $6,934 $ 6,733 97.1% $ 69 $ 6,802 98%2017‐18 6,901 230 $7,131 $ 7,004 98.2% $ 66 $ 7,070 99%2018‐19 7,288 235 $7,523 $ 7,376 98.0% $ 66 $ 7,442 99%2019‐20 7,529 242 $7,771 $ 7,624 98.1% $ 73 $ 7,697 99%2020‐21 7,844 256 $8,100 $ 7,958 98.3% $ 90 $ 8,048 99%2021‐22 8,168 281 $8,449 $ 8,150 96.5% $ 77 $ 8,227 97% Source: County Auditor‐Controller, Avenu Insights & AnalyƟcs City of Laguna HillsProperty Tax Levy and Collections Last Ten Fiscal Years
Collected within the Fiscal
Year of the Levy
Total Collections to
Date
106

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Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending Taxpayer Business Type Taxpayer Business Type
Ashley Furniture Homestore Furniture/Appliance Apple Stores Furniture/ApplianceBJ's Restaurant & Brewhouse Restaurants Bentley Los Gatos Auto Sales ‐ NewChevron Service Stations Service Stations California Cafe Bar & Grill RestaurantsChick‐Fil‐A Restaurants Restaurants Chevron Service Stations Service StationsCircle K Food Stores Food Markets Coast to Coast Hardware Bldg.Matls‐RetailData Center Warehouse I.T. Infrastructure Compugraphics USA Business ServicesDick's Sporting Goods Recreation Products CVS Pharmacy Drug StoresHoward's Appliances Furniture/Appliance Dio Deka RestaurantsJackson Energy Co Energy Sales Forbes Mill Steakhouse RestaurantsJeromes Furniture Warehouse Furniture/Appliance Los Gatos Acura Auto Sales ‐ NewJohn Deere Landscapes Florist/Nursery Los Gatos Brewery RestaurantsKing's Seafood Company Restaurants Lunardi's Supermarket Food MarketsLaguna Hills Auto Spa Service Stations Moore Buick Auto Sales ‐ NewMarshall's Stores Apparel Stores Netflix Miscellaneous RetailMaterial Supply Incorporated Bldg.Matls‐Whsle Office Depot Office EquipmentNordstrom Department Store Department Stores Rotten Robbie Service Stations Service StationsPritchard Supply Bldg.Matls‐Whsle Safeway Stores Food MarketsRaising Cane's Chicken Fingers Restaurants Shell Service Stations Service StationsRalph's Grocery Company Food Markets Steamers Grill House RestaurantsSidepat Office Equipment Testarossa Vineyards Food Processing EqpSit 'N Sleep Furniture/Appliance Trader Joe's Food MarketsSnap One Office Equipment Union 76 Service Stations Service StationsTotal Wine & More Liquor Stores Walgreen's Drug Stores Drug StoresUnited Pacific Service Stations Whole Foods Market Food MarketsVertiv Corporation Electronic Equipment Willow Street Pizza RestaurantsSource: Avenu Insights & Analytics 2021‐22 2012‐13
City of Laguna Hills
Principal Sales Tax Producers
Last Fiscal Year and Nine Years Ago
107

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Packet Pg. 200
Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending Total Debt Percentage
Fiscal Certificates of Direct Per Personal of
Year Participation
Direct Borrowings (c) Debt Capita (a) Income (b) Personal Income 2013 14,388 14,388 466.29 1,320,001 1.09%
2014 13,437 13,437 435.57 1,336,181 1.01%
2015 12,106 12,106 390.60 1,373,184 0.88%
2016 10,726 10,726 340.02 1,479,761 0.72%
2017 9,295 46 9,341 296.12 1,587,577 0.59%2018 7,825 723 8,548 268.65 1,661,606 0.51%2019 6,294 627 6,921 219.21 1,724,666 0.40%2020 4,694 530 5,224 165.79 1,835,890 0.28%2021 3,033 437 3,470 111.68 1,935,992 0.18%2022 1,283 345 1,628 52.94 2,026,083 0.08% Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.Source: Income Data is provided by the United States Census Data and is adjusted for inflation. (a) Population data can be found in the Schedule of Demographic and Economic Statistics on page III ‐ 21.(b) 2021 personal income data not available at time of print; Hence, table provides personal income history for years 2012‐2020. (c) On‐bill financing program with Southern California Edison and San Diego Gas & Electric, for the installation of energy efficient LED street lighting throughout the City, beginning in FY 2016/17. Due to implementation of new pronouncements, terminology was updated. Previously noted as "capital lease." City of Laguna Hills
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(amounts expressed in thousands, except per capita amounts) Governmental Activities
108

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Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending City of Laguna Hills
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
Percentage of
General Less: Amounts Estimated
Fiscal Obligation Available in Debt Actual Taxable Per
Year Bonds Service Fund Value of Capita
Property
Note: There was no general bonded debt outstanding for the last ten fiscal years. 109

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Packet Pg. 202
Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending Debt
Outstanding
Estimated
Percentage
Applicable (a)
Estimated
Share of
Overlapping
Debt
OVERLAPPING TAX AND ASSESSMENT DEBT:

Metropolitan Water District 20,175,000 0.235% 47,411
Saddleback Valley Unified School District 92,040,000 16.542% 15,225,257Capistrano Unified School District Facilities Improvement District No. 1 13,015,244 0.022% 2,863 TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT: $        15,275,532 DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT
Orange County General Fund Obligations 376,780,000 1.171% 4,412,094 Orange County Pension Obligations 521,784,000 1.171% 6,110,091Orange County Board of Education Certificates of Participation 11,620,000 1.171% 136,070 Capistrano Unified School District Certificates of Participation 23,295,000 0.015% 3,494 Moulton‐Niguel Water District Certificates of Participation 53,095,000 13.281% 7,051,547 SUBTOTAL OVERLAPPING GENERAL FUND OBLIGATION DEBT: $         17,713,295 City of Laguna Hills Certificates of Participation, Direct Debt             100. 1,282,860 000% 1,282,860 City of Laguna Hills Capital Leases, Direct Debt 344,730                 100.000% 344,730 SUBTOTAL DIRECT GENERAL FUND OBLIGATION DEBT: $           1,627,590 TOTAL DIRECT & OVERLAPPING GENERAL FUND OBLIGATION DEBT: 19,340, $         885 OVERLAPPING TAX INCREMENT DEBT (Successor Agency)              . 8,880,000 791% ‐ 2.52% 134,280 GROSS COMBINED TOTAL DEBT $         34,750,698 (b)
(a) The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value.  Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value.
(b)
Source: Avenu Insights & Analytics
City of Laguna Hills
Direct and overlapping governmental activities debt
As of June 30, 2022
Excludes tax and revenue anticipation notes, revenue, mortgage revenue and non‐bonded capital lease obligations. 110

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Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Debt limit $ 832,512 $ 853,695 899,043$ $ 963,016 $ 1,003,113 $ 1,037,598 $ 1,100,194 $ 1,134,745 $ 1,175,498 $ 1,215,096 Total net debt applicable to limit 13,790 12,585 11,335 10,035 9,295 7,825 6,294 4,694 3,033 1,283 Legal debt margin $ 818,722 $ 841,110 887,708$ $ 952,981 $ 993,818 $ 1,029,774 $ 1,093,900 $ 1,130,051 $ 1,172,465 $ 1,213,813 Total net debt applicable to limit, as a percentage of debt limit 1.66% 1.47% 1.26% 1.04% 0.93% 0.75% 0.57% 0.41% 0.26% 0.11% Legal Debt Margin Calculation for Fiscal Year 2021/22
Assessed value 7,933,313Add back: exempt real property 167,326Total assessed value 8,100,639Debt limit (15% of total assessed value) 1,215,096Debt applicable to limit: Certificates of Participation 1,283 Total net debt applicable to limit 1,283Legal debt margin $ 1,213,813 Note: Under state finance law, the City of Laguna Hills' outstanding general obligation debt should not exceed15 percent of total assessed property value. By law, the general obligation debt subject to the limitation may be offset by amounts set aside for repaying general obligation bonds.

City of Laguna Hills
Legal Debt Margin Information
Last Ten Fiscal Years
(amounts expressed in thousands)
111

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Packet Pg. 204
Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending City of Laguna Hills
Pledged‐Revenue Coverage
Last Ten Fiscal Years
Note: There was no debt covenants that required pledged‐revenue coverage for the last ten fiscal years. 112

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Packet Pg. 205
Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending Calendar
Year Population (1)
Personal Income
(In Thousands)
Per Capita Personal
Income (2)
City Unemployment
Rate (3)
Median Age
(4)
% Of Pop with High
School Diploma (5)
% of Pop With
Bachelor's Degree (5)
2012 30,618 1,363,858 44,421 4.8% 41.6 92.3% 44.5%2013 30,703 1,320,001 42,778 4.2% 41.5 91.7% 42.8%2014 30,857 1,336,181 43,315 5.0% 41.8 91.6% 45.3%2015 30,681 1,373,184 44,757 4.1% 41.7 91.2% 44.8%2016 31,544 1,479,761 46,911 3.7% 41.8 91.5% 45.6%2017 31,818 1,587,577 49,896 2.6% 43.0 91.3% 46.7%2018 31,572 1,661,606 52,629 2.2% 41.4 92.1% 49.1%2019 31,508 1,724,666 54,737 12.2% 42.5 92.3% 49.4%2020 31,073 1,835,890 59,083 7.4% 42.8 92.2% 50.5%2021 30,750 2,086,807 67,864 2.2% 41.8 92.8% 50.4%

5.) School diploma and Bachelor's degree is provided by the United States Census data.Source: Avenu Insights & Analytics City of Laguna Hills
Demographic and Economic Statistics
Last Ten Fiscal Years

4.) Median Age is provided by the United States Census data estimation table.3.) Unemployment and Total Employment Data are provided by the EDD's Bureau of Labor Statistics Department. 2.) Income Data is provided by the United States Census Data and is adjusted for inflation. 1.) Population Projections are provided by the California Department of Finance Projections.Source: 2007‐2015 prior ACFR 113

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Packet Pg. 206
Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending Business Name
Number of
Employees
Percent of
Total
Employment
(%)
Number of
Employees
Percent of
Total
Employment
(%)
MemorialCare Saddleback Medical Center 1,838 10.88% 1,020           5.86% Saddleback Valley Unified School District 227 1.34%
Laguna Hills Health and Rehabiliation Center 193 1.14%
Moulton Niguel Water District 176 1.04%
BJ's Restaurant & Brewhouse 135 0.80%
United States Postal Service 130 0.77%
Orange Coast Women's Medical Group 120 0.71%
MemorialCare Home Health 110 0.65%
Villa Valencia Healthcare Center 103 0.61%
The Wellington 91 0.54%
Hines Growers LLC 600              3.45%
Professional Community Management 350              2.01% JC Penney Corp Inc. 250              1.44%
Allied Business Schools, Inc. 235              1.35%
Total Top Employees              3,123 18.48% 2,455           14.11% Total City Employment (1) 16,900
Results based on direct correspondence with city’s local businesses. (1) Total City Labor Force provided by EDD Labor Force Data.

City of Laguna Hills
Principal Employers
Last Fiscal Year and Nine Years Ago
Source: 2013 prior published ACFR lists Top 5 Employers only 2022
Source: Avenu Insights & Analytics
2013
114

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Packet Pg. 207 Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
General Government 11.75 11.75 10.99 10.99 10.49 9.74 9.50 9.50 9.50 9.50Non‐Departmental 1.25 1.25 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00Public Works 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00Community Development 7.85 7.85 8.23 8.23 8.23 8.00 7.10 7.10 6.50 6.50Community Services (a) 15.75 15.75 15.40 15.40 15.40 14.65 14.50 14.50 14.25 14.25 Total 41.60 41.60 40.62 40.62 40.12 38.39 37.10 37.10 36.25 36.25 (a) Community Services count includes number of full‐time equivalent employees furloughed due to the COVID‐19 pandemic due from cancelled programs and facility closures.

Source: City of Laguna Hills' Biennial Budget, includes vacant positions Function
City of Laguna Hills
Full‐time Equivalent Personnel Allocation by Function
Last Ten Fiscal Years
Fiscal Year
115

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Packet Pg. 208
Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending FY 12/13 FY 13/14 FY 14/15 FY 15/16 FY 16/17 FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22 Police (b)
Physical arrests 362 458 534 284 293             281             240             246             289             258 Parking violations 885              1,407          1,981          3,257          3,406          2,487        2,381        1,876        1,267        1,841 Traffic violations 2,462           2,070          3,041          3,187          2,669          1,512        1,136        722           842           900 Fire (c)
Number of calls answered 2,579           2,584          2,675          2,888          3,077          3,203        3,303        3,122        3,263        3,229 Inspections 273              379             494             364             299             440           327           310           211           283 Highways and Streets (d)
Sidewalk replacement (sq. ft.) 13,610         3,519          7,250          940             7,012          1,328        1,790        790           2,961        1,847 Curb & gutter replacement (linear ft.) 1,141           478             ‐              211             523             28             85             93             20             66 Asphalt concrete placed (tons) 16,319         7,857          16,276        134             10,536 1,215        174           266           18             6,059 Street sweeping debris collected (tons) 432              293             265             229             219             217           227           206           244           226           New sign installations 42 65                23                155             12              31             2 13             18             11 Sign Replacements 378              278             380             297             312             196           55             220           287           187           Trees trimmed 1,568           1,185          792             821             1,396          1,347        1,407        1,639        1,592        1,546 Trees removed 215              179             461             152             263             286           183           206           211           200 Trees planted 39 44                38                43                118             120           109           139           122           123 Sanitation (a)
Refuse collected (tons/day) 47 45                43                47                49              48             45             55             69             56 Recyclables collected (tons/day) 46 46                49                50                47              46             46             43             29             40 Culture and Recreation (e)
Community center programs (participants) 5,633           5,783          5,637          6,152          5,686          5,993        4,456        2,919        341           2,572       Athletic permits 41 45                41                42                48              41             43             30             6 26 Waste Stream (a)
Refuse collected (tons) 17,185          16,416          15,707          17,197          17,966 17,520 16,576 20,016 25,026 20,539 Recyclables collected (tons) 16,753          16,964          17,728          18,150          17,058 16,827 16,879 15,611 10,717 14,402 (a) CR&R Monthly Tonnage Report(b) Orange County Sheriff's Daily Booking Log,; Monthly Traffic Statistics; Data Ticket Citation Report (c) Orange County Fire Authority‐ Clerk of the Authority, Safety & Environmental Services, Planning & Development(d) City of Laguna Hills, Public Works Department (e) City of Laguna Hills, Community Center Department City of Laguna Hills
Operating Indicators by Function
Last Ten Fiscal Years
Function
116

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Packet Pg. 209
Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Highways and streets
Streets (miles) 83 83 83 83 83 83 83 83 83 83Traffic signals 46 46 47 47 47 48 48 48 49 49 Culture and recreation
Parks acreage 83 83 83 83 83 83 83 83 83 83
Parks 15 15 15 15 15 15 15 15 15 15Community centers 1111111111Civic Center 1111111111 Source: Various City Departments
City of Laguna Hills
Capital Assets Statistics by Function
Last ten Fiscal Years
Function Fiscal Year
117

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Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending CITY OF LAGUNA HILLS
AT A GLANCE
GENERAL INFORMATION The City of Laguna Hills, located in South Orange County, has approximately 6.6 square miles of land in its corporate boundary and is now home to 31,073 people. The majority of the area in the City has a distinctive residential character. Yet, the City has a commercial base in its northern part. This area, or “urban village”, is anchored by upcoming development of The Village at Laguna Hills, the Oakbrook Village Retail Center, and Saddleback Memorial Hospital. It includes retail, restaurant, professional office, and medical related building space. When the City annexed the “North Laguna Hills” area in July of 1996, the City acquired 1.2 square miles of primarily light industrial, professional office, specialty retail, hotel, and residential uses. This annexed area contains a furniture row, office headquarters, and the only light industrial/manufacturing establishments in the City. In September of 2000, the City grew by another 150 acres as a result of the annexation of residential properties identified as West Laguna Hills.

HISTORY Laguna Hills is built on one of the major land grants developed during the rancho area. Following Mexico’s independence from Spain in 1821, those who had served in the government or who had friends in authority were given vast lands for cattle grazing. Rancho Lomas de Santiago, Rancho San Joaquin, and Rancho Niguel covered much of the western portion of the Saddleback Valley. Don Juan Avila was granted the 13,000‐acre Rancho Niguel on which Laguna Hills is located. In 1874, Lewis Moulton purchased Rancho Niguel from Don Juan Avila and increased the original grant to 22,000 acres. Moulton and his partner, Jean Piedrea Daguerre, used the ranch to raise sheep and cattle. The Moulton ranch was eventually subdivided in the early 1960s, part of which is recognized as Laguna Hills. Incorporation efforts began in 1987 and on March 5, 1991, the goal of incorporation was finally achieved with 86% of the residents voting in favor of forming the City of Laguna Hills. On December 20, 1991, Laguna Hills officially became a City.

CITY GOVERNMENT The City of Laguna Hills is a General Law City that operates under the Council/Manager form of government. The voters elect five of their fellow citizens to the City Council for overlapping four‐year terms. The Council, in turn, selects one of its members to serve as Mayor for a one‐year term. The City Council holds regular public meetings on the second and fourth Tuesday of each month. 118

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Packet Pg. 211
Attachment: City of Laguna Hills 2022 Final ACFR (3160 : Financial Statements for Fiscal Year Ending eidebailly.com
Independent Accountant's Report on
Applying Agreed-Upon Procedures Related to
the Article XIII-B Appropriations Limit Calculation
June 30, 2022
City of Laguna Hills, California

4.6.b
Packet Pg. 212 Attachment: City of Laguna Hills 2022 Final GANN Limit AUP Report (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) What inspires you, inspires us. | eidebailly.com
25231 Paseo De Alicia, Ste. 100 | Laguna Hills, CA 92653-4615 | T 949.768.0833 | F 949.768.8408 | EOE 1 Independent Accountant’s Report
on the Article XIII-B Appropriations Limit Calculation
To the Honorable Mayor and Members of the City Council
City of Laguna Hills, California
We have performed the procedures enumerated below, on the Appropriations Limit Calculation of the City of Laguna Hills, California (City) prepared in accordance with Article XIII-B of the California Constitution for the fiscal year ended June 30, 2022. The City’s management is responsible for the Appropriations Limit Calculation.

The City has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of evaluating the Appropriations Limit Calculation and we will report on findings based on the procedures performed. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.

The procedures and associated findings are as follows:

1. We obtained the completed worksheets setting forth the calculations necessary to establish the City's appropriations limit and compared the limit and annual adjustment factors included in those worksheets to the limit and annual adjustment factors that were adopted by resolution of the City Council. We also compared the population and inflation options included in the aforementioned worksheets to those that were selected by a recorded vote of the City Council.

Finding: No exceptions were found as a result of this procedure.

2. We added last year’s limit to the annual adjustment amount, and compared the resulting amount to the 2021-2022 appropriations limit.

Finding: No exceptions were found as a result of this procedure.

3. We compared the current year information to the worksheets described in Procedure 1 above and to information provided by the California State Department of Finance.

Finding: No exceptions were found as a result of this procedure.

4. We agreed the prior year appropriations limit to the prior year appropriations limit adopted by the City Council.

Finding: No exceptions were found as a result of this procedure.

4.6.b
Packet Pg. 213 Attachment: City of Laguna Hills 2022 Final GANN Limit AUP Report (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 2 We were engaged by the City to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review, the objective of which would be the expression of an opinion or conclusion, respectively, on the City’s Appropriations Limit Calculation for the fiscal year ended June 30, 2022. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.

This report is intended solely for the information and use of City Council and management of the City and is not intended to be and should not be used by anyone other than those specified parties.

Laguna Hills, California
March 30, 2023

4.6.b
Packet Pg. 214 Attachment: City of Laguna Hills 2022 Final GANN Limit AUP Report (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) eidebailly.com
Federal Awards Reports in Accordance
with the Uniform Guidance
June 30, 2022
City of Laguna Hills, California

4.6.c
Packet Pg. 215 Attachment: City of Laguna Hills 2022 Final Single Audit Report (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills, California
Table of Contents
June 30, 2022
Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards .......................................................................................................................... 1 Independent Auditor’s Report on Compliance for the Major Federal Program; Report on Internal Control over Compliance; and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance ............................................................................................................................................... 3 Schedule of Expenditures of Federal Awards ....................................................................................................... 7 Notes to Schedule of Expenditures of Federal Awards ......................................................................................... 8 Schedule of Findings and Questioned Costs
Section I - Summary of Auditor’s Results .......................................................................................................... 9 Section II - Financial Statement Findings .........................................................................................................10 Section III - Federal Award Findings and Questioned Costs ..............................................................................12 Summary Schedule of Prior Audit Findings..........................................................................................................15

4.6.c
Packet Pg. 216 Attachment: City of Laguna Hills 2022 Final Single Audit Report (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) What inspires you, inspires us. | eidebailly.com
25231 Paseo De Alicia, Ste. 100 | Laguna Hills, CA 92653-4615 | T 949.768.0833 | F 949.768.8408 | EOE 1 Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards
To the Honorable Mayor and Members of the City Council
City of Laguna Hills, California
We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Laguna Hills (City), as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements and have issued our report thereon dated March 30, 2023. Our report included emphasis of matter paragraphs describing the City’s adoption of the provisions of Governmental Accounting Standards Board (GASB) Statement No. 87, Leases, for the year ended June 30, 2022 and restatement of beginning enterprise property leasing fund net position for the correction of an error.

Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of City’s internal control. Accordingly, we do not express an opinion on the effectiveness of City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We identified certain deficiencies in internal control, described in the accompanying schedule of findings and questioned costs as items 2022-001 and 2022-002 that we consider to be material weaknesses.

4.6.c
Packet Pg. 217 Attachment: City of Laguna Hills 2022 Final Single Audit Report (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 2 Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and which are described in the accompanying schedule of findings and questioned costs as item 2022-002.

City’s Response to Findings
Government Auditing Standards requires the auditor to perform limited procedures on the City’s response to the findings identified in our audit and described in the accompanying Schedule of Findings and Questioned Costs. The City’s response was not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response.

Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Laguna Hills, California
March 30, 2023

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Packet Pg. 218 Attachment: City of Laguna Hills 2022 Final Single Audit Report (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) What inspires you, inspires us. | eidebailly.com
25231 Paseo De Alicia, Ste. 100 | Laguna Hills, CA 92653-4615 | T 949.768.0833 | F 949.768.8408 | EOE 3 Independent Auditor’s Report on Compliance for the Major Federal Program; Report on Internal Control over Compliance; and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance
To the Honorable Mayor and Members of the City Council
City of Laguna Hills, California
Report on Compliance for the Major Federal Program
Opinion on the Major Federal Program
We have audited City of Laguna Hills (City) compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on the City’s major federal program for the year ended June 30, 2022. The City’s major federal program is identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs.

In our opinion, the City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on its major federal program for the year ended June 30, 2022.

Basis for Opinion on the Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards); and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.

We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the City’s compliance with the compliance requirements referred to above.

Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules and provisions of contracts or grant agreements applicable to the City‘s federal programs.

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Packet Pg. 219 Attachment: City of Laguna Hills 2022 Final Single Audit Report (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 4 Auditor’s Responsibilities for the Audit of Compliance Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material, if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City’s compliance with the requirements of the major federal program as a whole.

In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding City’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.
• Obtain an understanding of City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of City’s internal control over compliance.

Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.

Other Matters
The results of our auditing procedures disclosed an instance of noncompliance, which is required to be reported in accordance with the Uniform Guidance and which is described in the accompanying schedule of findings and questioned costs as item 2022-004. Our opinion on the major federal program is not modified with respect to this matter.

Government Auditing Standards requires the auditor to perform limited procedures on the City’s response to the noncompliance finding identified in our compliance audit described in the accompanying schedule of findings and questioned costs. The City’s response was not subjected to the other auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.

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Packet Pg. 220 Attachment: City of Laguna Hills 2022 Final Single Audit Report (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 5 Report on Internal Control over Compliance
Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, as discussed below, we did identify certain deficiencies in internal control over compliance that we consider to be significant deficiencies.

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. We consider the deficiencies in internal control over compliance described in the accompanying schedule of findings and questioned costs as items 2022-003 and 2022-004 to be significant deficiencies.

Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.

Government Auditing Standards requires the auditor to perform limited procedures on the City’s response to the internal control over compliance findings identified in our compliance audit described in the accompanying schedule of findings and questioned costs. The City’s response was not subjected to the other auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

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Packet Pg. 221 Attachment: City of Laguna Hills 2022 Final Single Audit Report (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 6 Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City as of and for the year ended June 30, 2022 and the related notes to the financial statements, which collectively comprise the City’s basic financial statements. We issued our report thereon dated March 30, 2023, which contained unmodified opinions on those financial statements. Our report included emphasis of matter paragraphs describing the City’s adoption of the provisions of Governmental Accounting Standards Board (GASB) Statement No. 87, Leases, for the year ended June 30, 2022 and restatement of beginning enterprise property leasing fund net position for the correction of an error. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the 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 schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole.

Laguna Hills, California
March 30, 2023

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Packet Pg. 222 Attachment: City of Laguna Hills 2022 Final Single Audit Report (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) See Notes to Schedule of Expenditures of Federal Awards 7 City of Laguna Hills, California
Schedule of Expenditures of Federal Awards
Year Ended June 30, 2022
Federal Pass-through
Financial Entity
Assistance Identifying
Listing Number Expenditures
U.S. Department of the Treasury
COVID-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), SLFRF 21.027 $ 3,743,412
COVID-19 Coronavirus Relief Fund (CRF) 21.019 EDD Account 932-0358-6 3,609 Total U.S. Department of the Treasury 3,747,021
U.S. Department of Homeland Security
Pass-through: California Governor's Office of Emergency Services Pre-Disaster Mitigation 97.047
Grant # 2020-0006
Project #PL0114
FIPS #059-39220 10,652
Total U.S. Department of Homeland Security 10,652
Total Federal Financial Assistance $ 3,757,673
Federal Grantor/Pass-Through
Grantor/Program or Cluster Title
Pass-through: California Department of Finance
Direct:

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Packet Pg. 223 Attachment: City of Laguna Hills 2022 Final Single Audit Report (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 8 City of Laguna Hills, California
Notes to Schedule of Expenditures of Federal Awards
Year Ended June 30, 2022
Note 1 - Basis of Presentation
The accompanying schedule of expenditures of federal awards (the schedule) includes the federal award activity of the City under programs of the federal government for the year ended June 30, 2022. The information is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).

Because the schedule presents only a selected portion of the operations of the City it is not intended to and does not present the financial position, changes in net position, or cash flows of the City.

Note 2 - Summary of Significant Accounting Policies
Expenditures reported in the schedule are reported on the modified-accrual basis of accounting. When applicable, such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. No federal financial assistance has been provided to a subrecipient.

Note 3 - Indirect Cost Rate
The City has not elected to use the 10% de minimis cost rate.

4.6.c
Packet Pg. 224 Attachment: City of Laguna Hills 2022 Final Single Audit Report (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 9 City of Laguna Hills, California
Schedule of Findings and Questioned Costs
Year Ended June 30, 2022
Section I – Summary of Auditor’s Results

FINANCIAL STATEMENTS
Type of auditor's report issued Unmodified
Internal control over financial reporting
Material weaknesses identified Yes
Significant deficiencies identified not considered
to be material weaknesses None Reported
Noncompliance material to financial statements noted? Yes

FEDERAL AWARDS
Internal control over major program
Material weaknesses identified No
Significant deficiencies identified not considered
to be material weaknesses Yes
Type of auditor's report issued on compliance
for major programs Unmodified
Any audit findings disclosed that are required to be reported in accordance with Uniform Guidance 2 CFR 200.516 Yes
Identification of major programs
Federal Financial Assistance Listing
COVID-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), SLFRF 21.027 Dollar threshold used to distinguish between type A
and type B programs $750,000
Auditee qualified as low-risk auditee? No
Name of Federal Program

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Packet Pg. 225 Attachment: City of Laguna Hills 2022 Final Single Audit Report (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 10 City of Laguna Hills, California
Schedule of Findings and Questioned Costs
Year Ended June 30, 2022
Section II – Financial Statement Findings
2022-001 Financial Reporting
Type of Finding: Material Weakness
Criteria:

Management is responsible for the preparation and fair presentation of the financial statements. Management is responsible for ensuring that all financial records and related information is reliable and properly recorded.

Condition:

During our audit we identified a misstatement relating to the enterprise - property leasing fund pertaining to overstated accumulated depreciation recorded in the prior year totaling $663,016 and causing an understatement to net position.

Cause:

The City’s procedures did not include an analysis of depreciation expense and accumulated depreciation for reasonableness and the misstatement was not identified.

Effect:

An adjustment, and restatement, was necessary to fairly present the financial statements.

Context:

The condition was noted during our testwork of capital assets.

Recommendation:

We recommend the City review and strengthen its procedures over the review of transactions and the financial statements.

Views of Responsible Officials:

Management agrees with the finding. See attached corrective action plan.

4.6.c
Packet Pg. 226 Attachment: City of Laguna Hills 2022 Final Single Audit Report (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 11 City of Laguna Hills, California
Schedule of Findings and Questioned Costs
Year Ended June 30, 2022
2022-002 Budget
Type of Finding: Material Weakness and Material Noncompliance Criteria:

City management has the responsibility for ensuring the ongoing financial health of the City. To accomplish this task, it is imperative that the City supplement appropriations in excess of budgeted amounts when they occur. The City adopts a biennial budget, with the legal level of budgetary control at the fund level.

Condition:

For the year ending June 30, 2022, the City had expenditures in excess of budgeted appropriations, resulting in excess expenditures of $1,111,157 and $67,534 for the ARPA fund and aggregate remaining funds, respectively.

Context:

The condition was noted during our audit procedures over the City’s financial statements and related budget-to-actual schedules included within the City’s financial statements for the year ended June 30, 2022.

Effect:

Excess expenditures over budgeted appropriations of $1,111,157 and $67,534, respectively, are disclosed in Note 13 to the financial statements.

Cause:

The City’s ARPA and aggregate remaining funds budgets were not amended for excess appropriations of $1,111,157 and $67,534, respectively, during the year ended June 30, 2022.

Recommendation:

We recommend the City revisit and/or amend the budget, when funds may be in excess of original amounts.

Views of Responsible Officials:

Management agrees with the finding. See attached corrective action plan.

4.6.c
Packet Pg. 227 Attachment: City of Laguna Hills 2022 Final Single Audit Report (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 12 City of Laguna Hills, California
Schedule of Findings and Questioned Costs
Year Ended June 30, 2022
Section III – Federal Award Findings and Questioned Costs 2022-003 Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Financial Assistance Listing Number: 21.027
Federal Agency: U.S. Department of Treasury
Award Year: 2021/22
Grant Number: N/A
Compliance Requirement: Other
Type of Finding: Significant Deficiency in Internal Control Criteria:

Title 2 CFR Section 200.303(a) of the Uniform Guidance requires all non-federal entities establish and maintain effective internal control over federal awards to provide reasonable assurance that the non-federal entity is managing the federal award in compliance with the federal statutes, regulations, and the terms and conditions of the federal award.

Condition:

During the audit, it was noted the preparation of the schedule of expenditures of federal awards (SEFA) lacked evidence of review.

Cause:

The City’s internal controls did not allow for evidence of review of the SEFA.

Effect:

The SEFA lacked evidence of review, which increases the risk of error or misstatement.

Questioned Costs:

None reported.

Context:

The condition was noted during our procedures related to internal controls over the SEFA.

Repeat Finding from Prior Year:

4.6.c
Packet Pg. 228 Attachment: City of Laguna Hills 2022 Final Single Audit Report (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 13 City of Laguna Hills, California
Schedule of Findings and Questioned Costs
Year Ended June 30, 2022
Recommendation:

We recommend the City establish procedures to ensure evidence of review exists over the SEFA.

Views of Responsible Officials:

Management agrees. See separately issued Corrective Action Plan. 2022-004 Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Financial Assistance Listing Number: 21.027
Federal Agency: U.S. Department of Treasury
Award Year: 2021/22
Grant Number: N/A
Compliance Requirement: Reporting
Type of Finding: Significant Deficiency in Internal Control and Instance of Noncompliance Criteria:

The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by applicable accounting or performance records, and are fairly presented in accordance with governing requirements.

The City of Laguna Hills (the City) must submit annual Project and Expenditure Reports that contain costs incurred during the covered period. Critical information includes:
• Obligations and Expenditures
o Current period obligation
o Cumulative obligation
o Current period expenditure
o Cumulative expenditure
• Subawards
• Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the recipient that are greater than $50,000. For amounts less than $50,000, the recipient must report in the aggregate for these same categories of loans issued; contracts and grants awarded; transfers made to other government entities and direct payments made by the recipient.

4.6.c
Packet Pg. 229 Attachment: City of Laguna Hills 2022 Final Single Audit Report (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 14 City of Laguna Hills, California
Schedule of Findings and Questioned Costs
Year Ended June 30, 2022
Condition:

Expenditure information was reported inaccurately.

Cause:

The City of Laguna Hills did not have adequate internal controls to ensure the Project and Expenditure Report was prepared in accordance with governing requirements.

Effect:

Inaccurate information was reported to the federal awarding agency.

Questioned Costs:

None
Context/Sampling:

The entire population of one Project and Expenditure Report submitted during the year was selected for testing.

The cumulative impact is as follows:

Period Ended March 31, 2022
Originally Reported Actual
Obligations and Expenditures:

Current Period Obligations $0 $7,465,378
Period Ended March 31, 2022
Originally Reported Actual
Obligations and Expenditures:

Current Period Expenditures $0 $3,732,688
Repeat Finding from Prior Year:

No
Recommendation:

We recommend the City enhance internal controls to ensure the Project and Expenditure Report is prepared in accordance with governing requirements.

Views of Responsible Official:

Management agrees. See separately issued Corrective Action Plan.

4.6.c
Packet Pg. 230 Attachment: City of Laguna Hills 2022 Final Single Audit Report (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 15 City of Laguna Hills, California
Summary Schedule of Prior Audit Findings
Year Ended June 30, 2022
Financial Statement Findings
Finding No. Area Status of Corrective Action
2021-001 Compliance – Continuing Disclosure Requirements Implemented Federal Award Findings
None reported

4.6.c
Packet Pg. 231 Attachment: City of Laguna Hills 2022 Final Single Audit Report (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) What inspires you, inspires us. | eidebailly.com
25231 Paseo De Alicia, Ste. 100 | Laguna Hills, CA 92653-4615 | T 949.768.0833 | F 949.768.8408 | EOE 1 March 30, 2023
To the Honorable Mayor and Members of the City Council
City of Laguna Hills
Laguna Hills, California
We have audited the financial statements of the City of Laguna Hills (City) as of and for the year ended June 30, 2022, and have issued our report thereon dated March 30, 2023. Professional standards require that we advise you of the following matters relating to our audit.

Our Responsibility in Relation to the Financial Statement Audit under Generally Accepted Auditing Standards and Government Auditing Standards and our Compliance Audit under the Uniform Guidance As communicated in our letter dated July 7, 2022, our responsibility, as described by professional standards, is to form and express an opinion about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America and to express an opinion on whether the City complied with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on the City’s major federal program. Our audit of the financial statements does not relieve you or management of your respective responsibilities.

Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, as part of our audit, we considered the internal control of the City solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control.

Our responsibility, as prescribed by professional standards as it relates to the audit of the City’s major federal program compliance, is to express an opinion on the compliance for the City’s major federal program based on our audit of the types of compliance requirements referred to above. An audit of major program compliance includes consideration of internal control over compliance with the types of compliance requirements referred to above as a basis for designing audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, as a part of our major program compliance audit, we considered internal control over compliance for these purposes and not to provide any assurance on the effectiveness of the City’s internal control over compliance.

4.6.d
Packet Pg. 232 Attachment: City of Laguna Hills 2022 Final Governance Letter (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 2 We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures for the purpose of identifying other matters to communicate to you.

We have provided our comments regarding internal controls during our audit in our Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards dated March 30, 2023. We have also provided our comments regarding compliance with the types of compliance requirements referred to above and internal controls over compliance during our audit in our Independent Auditor’s Report on Compliance with Each Major Federal Program and Report on Internal Control Over Compliance Required by the Uniform Guidance dated March 30, 2023.

Planned Scope and Timing of the Audit
The timing of the audit was modified to provide the City additional time to complete its year-end accounting close.

Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, as appropriate, our firm, and other firms utilized in the engagement, if applicable, have complied with all relevant ethical requirements regarding independence.

Qualitative Aspects of the Entity’s Significant Accounting Practices Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by the CIty is included in Note 1 to the financial statements. As discussed in Note 1 to the financial statements, the City adopted GASB Statement No. 87, Leases. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.

Significant Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ markedly from management’s current judgments.

The most sensitive accounting estimates affecting the financial statements are management’s estimates of the net pension liability (asset), related deferred inflows and outflows of resources, pension expense, and disclosures.

Management’s estimate of the pension information is based on actuarial valuations. We evaluated the key factors and assumptions used to develop the estimate and determined that it is reasonable in relation to the basic financial statements taken as a whole.

4.6.d
Packet Pg. 233 Attachment: City of Laguna Hills 2022 Final Governance Letter (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 3 Financial Statement Disclosures
Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the City’s financial statements relate to:
• Pension liabilities in Note 8 are sensitive to the underlying actuarial assumptions used, including, but not limited to, the investment rate of return and discount rate. As disclosed in Note 8, a 1% increase or decrease in the discount rate has a significant effect on the City’s net pension liabilities. • Excess of expenditures over appropriations in Note 13 are sensitive due to the non-compliance created when expenditures exceed the biennial budget figures. For the year ended June 30, 2022, expenditures exceeded appropriations for both the ARPA and aggregate remaining funds.

Significant Difficulties Encountered during the Audit
We encountered no significant difficulties in dealing with management relating to the performance of the audit.

Uncorrected and Corrected Misstatements
For purposes of this communication, professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole.Uncorrected misstatements or matters underlying those uncorrected misstatements could potentially cause future-period financial statements to be materially misstated, even though the uncorrected misstatements are immaterial to the financial statements currently under audit. There were no uncorrected missstatements identified as a result of our audit procedures.

The following misstatements that we identified as a result of our audit procedures were brought to the attention of, and corrected by, management:
• $663,016 to increase net position as a result of erroneous depreciation expense in a prior year. • $23,272 reduction in LAIF investments due to the GASB 31 fair market value adjustment.

Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the City’s financial statements or the auditor’s report. No such disagreements arose during the course of the audit.

Circumstances that Affect the Form and Content of the Auditor’s Report For purposes of this letter, professional standards require that we communicate any circumstances that affect the form and content of our auditor’s report. As described in Note 1 to the financial statements, due to the adoption of GASB Statement 87, Leases, the restated opening balances as of July 1, 2021, with no impact to beginning net position or fund balance. Additionally, the report included an emphasis of matter relating to the correction of an error as disclosed in Note 16. We have included an emphasis of matter in our report regarding these restatements.

4.6.d
Packet Pg. 234 Attachment: City of Laguna Hills 2022 Final Governance Letter (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) 4 Representations Requested from Management
We have requested certain written representations from management which are included in the management representation letter dated March 30, 2023.

Management’s Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters.

Other Significant Matters, Findings, or Issues
In the normal course of our professional association with the City, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, significant events or transactions that occurred during the year, operating and regulatory conditions affecting the entity, and operational plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as the City’s auditors.

Noncompliance with Laws and Regulations
We have identified the following matters involving noncompliance with laws and regulations that came to our attention during the course of the audit.

As described in 2022-002, the City had expenditures in excess of budgeted appropriations of $1,111,157 and $67,354 for the ARPA fund and aggregate remaining funds, respectively.

Other Information Included in Annual Reports
Pursuant to professional standards, our responsibility as auditors for other information, whether financial or nonfinancial, included in the City’s annual reports, does not extend beyond the financial information identified in the audit report, and we are not required to perform any procedures to corroborate such other information.

Additionally, in accordance with such standards, we have read the introductory and statistical sections of the City’s annual report and considered whether such information, or the manner of its presentation, was materially inconsistent with its presentation in the financial statements.

Our responsibility also includes communicating to you any information which we believe is a material misstatement of fact. Nothing came to our attention that caused us to believe that such information, or its manner of presentation, is materially inconsistent with the information, or manner of its presentation, appearing in the financial statements.

This report is intended solely for the information and use of the City Council, and management of the City and is not intended to be, and should not be, used by anyone other than these specified parties.

Laguna Hills, California

4.6.d
Packet Pg. 235 Attachment: City of Laguna Hills 2022 Final Governance Letter (3160 : Financial Statements for Fiscal Year Ending June 30, 2022) City of Laguna Hills
City Council/Planning Agency
Staff Report
DATE: May 23, 2023
TO: Mayor and Council Members
FROM: Eric Hendrickson
Finance Director
ISSUE: Special Funds Budget Adjustments
RECOMMENDATION: That the City Council approve budget amendments in the following funds: 1) SB 1383 Grant Fund for $44,821; 2) Supplemental Law Enforcement Services (State COPS) Fund for $16,000; 3) American Rescue Plan Fund for $2,893,518; and 4) Liability Self-Insurance Fund (including transfer from General Fund) for $150,000.

SUMMARY:

SB 1383 Grant Fund
In June 2022, the City received a one-time grant of $44,821 from CalRecycle, a department of the State of California. The purpose of this grant is to provide funding to local jurisdictions to assist with the implementation of regulation requirements associated with Senate Bill 1383, including but not limited to capacity planning, collection, edible food recovery, education and outreach (includes organic waste & edible food recovery), enforcement and inspection, program evaluation/gap analysis, procurement requirements, and record keeping.

The City contracted with recycling consultant Economics Inc. to maintain compliance with this Senate Bill. It is recommended that the City Council appropriate a budgetary amendment of $44,821.

4.7 Packet Pg. 236
Special Funds Budget Adjustments
May 23, 2023

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Laguna Hills City CouncilMay 23, 2023

Laguna Hills City Council
May 23, 2023