Laguna Niguel City Council
February 17, 2026

To:

FROM:

DATE:

SUBJECT:

CITY OF LAGUNA NIGUEL

CITY COUNCIL AGENDA ITEM
Honorable Mayor and Council Members
Trevor Agrelius, Finance Director
February 17, 2026
Fiscal Year 2024-2025 Annual Comprehensive Financial Report

RECOMMENDATION
Staff recommends that the City Council receive and file the City's Annual Comprehensive Financial Report (ACFR) and related audit reports of the City of Laguna Niguel for the fiscal year ended June 30, 2025.

BACKGROUND
The City's independent accounting firm Clifton Larson Allen, LLP has completed its audit work of the City of Laguna Niguel for the fiscal year ended June 30, 2025.

Attached are the following reports in relation to the external audit:
• Annual Comprehensive Financial Report for fiscal year ended June 30, 2025 (Attachment A)
• Independent Accountants' Report on Agreed-Upon Procedures Applied to Appropriations Limit for Fiscal Year 2024-2025 (Attachment B) • Popular Annual Financial Report for the year ended June 30, 2025 (Attachment C) The City's ACFR for Fiscal Year 2023-2024 received the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association of the United States and Canada (GFOA). This was the 25th consecutive award that the City received for its ACFR. We believe the Fiscal Year 2024-2025 report continues to meet the Certificate of Achievement Program requirement, so it has been submitted to the GFOA for award consideration.

Notably, the City received an unmodified audit opinion on the financial statements, and the report indicated there were no instances of material weaknesses nor significant deficiencies in the City's internal controls.

The 2023-2024 PAFR received the Popular Annual Financial Reporting Award from the GFOA. This was the first year the City received the award for the PAFR. The PAFR is a way for the City to communicate selected financial data to a broad audience. The report is encouraged by GFOA and designed to assist those who need or desire a less Page2
detailed overview of the City's financial activities. Staff has submitted the 2024-2025 PAFR to the GFOA for award consideration.

These reports were presented to the Investment Banking and Audit Committee on January 28, 2026. During the meeting, the Committee unanimously voted to receive and file these reports.

ANALYSIS
As detailed in the ACFR, the General Fund ended the fiscal year with a $2.8 million surplus. General Fund revenues and transfers totaled $57.5 million and operating expenses and transfers out totaled $54.7 million. The General Fund balance at June 30, 2025, is $56.1 million. The City's financial reserve policy establishes the minimum reserve equals 50% of annual operating expenditures. The General Fund $56.1 million fund balance represents 108.5% of operating expenditures at June 30, 2025.

LEGAL REVIEW
No legal review is required for this report.

FISCAL IMPACT
There is no fiscal impact to receive and file these reports.

CONCLUSION
The City of Laguna Niguel is in excellent financial condition. The City's strong financial policies and fiscally conservative leadership since incorporation have served the City well. The City has a strong tax base and plans its spending very conservatively. The City is prospering today and is well positioned to thrive in the future.

Staff recommends that the City Council receive and file the City's Annual Comprehensive Financial Report (ACFR) and related audit reports of the City of Laguna Niguel for the fiscal year ended June 30, 2025.
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City Manager
Attachments :
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Trevor Agrelius
Finance Director
A. Annual Comprehensive Financial Report for fiscal year ended June 30, 2025 B. Independent Accountants' Report on Agreed-Upon Procedures Applied to Appropriations Limit for Fiscal Year 2024-2025
C. Popular Annual Financial Report for the year ended June 30, 2025

ATTACHMENT A
Annual Comprehensive Financial Report (ACFR) for
Fiscal Year ended June 30, 2025

CITY OF LAGUNA NIGUEL

CALIFORNIA
ANNUAL

COMPREHENSIVE
FINANCl,AL REPORT
Fiscal Vear Ended June 30, 2025
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CITY OF LAGUNA NIGUEL,

CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT

WITH REPORTS ON AUDIT BY

INDEPENDENT PUBLIC ACCOUNTANTS
YEAR ENDED JUNE 30, 2025
Prepared by the Finance Department
of the City of Laguna Niguel
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CITY OF LAGUNA NIGUEL

TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2025

INTRODUCTORY SECTION (UNAUDITED)

LETTER OF TRANSMITTAL

GFOA CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL

REPORTING X

ORGANIZATIONAL CHART XI

ELECTED OFFICIALS AND MANAGEMENT STAFF XII

FINANCIAL SECTION

INDEPENDENT AUDITORS' REPORT

MANAGEMENT'S DISCUSSION AND ANALYSIS (UNAUDITED)

BASIC FINANCIAL STATEMENTS

GOVERNMENT-WIDE FINANCIAL STATEMENTS

STATEMENT OF NET POSITION

STATEMENT OF ACTIVITIES

FUND FINANCIAL STATEMENTS

GOVERNMENTAL FUND FINANCIAL STATEMENTS
1 5
19 21
BALANCE SHEET 26

RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL
FUNDS TO THE GOVERNMENT-WIDE STATEMENT OF NET POSITION 27

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCES 28

RECONCILIATION OF THE STATEMENT OF REVENUES,

EXPENDITURES, AND CHANGES IN FUND BALANCES OF
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES 29

PROPRIETARY FUND FINANCIAL STATEMENTS

STATEMENT OF NET POSITION

STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET

POSITION

STATEMENT OF CASH FLOWS

NOTES TO BASIC FINANCIAL STATEMENTS

REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED)

BUDGETARY COMPARISON SCHEDULES

GENERAL FUND

MISCELLANEOUS GRANTS SPECIAL REVENUE FUND

NOTE TO REQUIRED SUPPLEMENTARY INFORMATION
32 33
34 37
72 73
74 CITY OF LAGUNA NIGUEL

TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2025

SCHEDULE OF THE CITY'S PROPORTIONATE SHARE OF THE NET

PENSION LIABILITY AND RELATED RATIOS

SCHEDULE OF CONTRIBUTIONS - PENSION

SCHEDULE OF THE CHANGES IN TOTAL OPEB LIABILITY AND

RELATED RATIOS

SUPPLEMENTARY INFORMATION

NONMAJORGOVERNMENTALFUNDS
75 76
77 COMBINING BALANCE SHEET 81

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES 83

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND

BALANCE - BUDGET AND ACTUAL
GAS TAX SPECIAL REVENUE FUND 85
MEASURE M SPECIAL REVENUE FUND 86
AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND 87
LAW ENFORCEMENT SPECIAL REVENUE FUND 88

COMMUNITY DEVELOPMENT BLOCK GRANT SPECIAL REVENUE
FUND 89
SENIOR TRANSPORTATION SPECIAL REVENUE FUND 90
CITY CAPITAL PROJECTS FUND 91

STATISTICAL SECTION (UNAUDITED)

NET POSITION BY COMPONENT

CHANGES IN NET POSITION

FUNDBALANCESOFGOVERNMENTALFUNDS

CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS

TAX REVENUES BY SOURCE - GOVERNMENTAL FUNDS

ASSESSED VALUE OF TAXABLE PROPERTY

DIRECT AND OVERLAPPING PROPERTY TAX RA TES

PRINCIPAL PROPERTY TAXPAYERS

PROPERTY TAX LEVIES AND COLLECTIONS

RATIO OF OUTSTANDING DEBT BY TYPE

DIRECT AND OVERLAPPING GOVERNMENT AL ACTIVITIES DEBT

LEGAL DEBT MARGIN INFORMATION

DEMOGRAPHIC AND ECONOMIC STATISTICS

PRINCIPAL EMPLOYERS
96 98
100
102
104
105
106
108
109
110
111
112
113
114

CITY OF LAGUNA NIGUEL

TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2025

FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY

FUNCTION/PROGRAM

CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM

OPERA TING INDICATORS BY FUNCTION/PROGRAM
115
117
118
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CITY OF LAGUNA NIGUEL
30111 Crown Valley Parkway, Laguna Niguel, California 92677 Phone (949) 362-4300 Fax (949) 362-4352
December 11, 2025

CITY COUNCIL
Mayor Ray Gennawey
Mayor Pro Tern Gene Johns
Council Member Kelly Jennings
Council Member Stephanie Oddo
Council Member Stephanie Winstead
Honorable Mayor, Council Members, and Residents of the City of Laguna Niguel

LETTER OF TRANS MITT AL
2024-25 ANNUAL COMPREHENSIVE FINANCIAL REPORT
It is a pleasure to submit the City's Annual Comprehensive Financial Report for the fiscal year ended June 30, 2025. This report has been compiled and prepared by the City's Finance Department in accordance with generally accepted accounting principles. Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements.

The City's financial statements have been audited by Clifton Larson Allen, LLP, a firm of licensed certified public accountants. The independent auditor rendered an unmodified (clean) opinion that the City's financial statements for the fiscal year ended June 30, 2025, are fairly presented in conformity with Generally Accepted Accounting Principles (GAAP). The independent auditors' report is presented as the first component of the financial section of this report.

The Management's Discussion and Analysis (MD&A) immediately follows the independent auditors' report and provides a comprehensive and detailed narrative introduction, overview, and analysis of the basic financial statements. The MD&A is designed to complement this letter of transmittal and should be read in conjunction with it.

GENERAL INFORMATION ABOUT LAGUNA NIGUEL
The City of Laguna Niguel was incorporated on December 1, 1989. The City is a master-planned community encompassing 14.72 square miles in the coastal area of South Orange County, California. As of January 2025, the State of California Department of Finance projected the City's population as 65,257. The City is primarily a residential community supported by a strong retail and commercial base. Over one-third of Laguna Niguel's geographic area is permanently designated as open space. This is one of the key features that define the character and urban form of the City.

Laguna Niguel is a General Law City and operates under the Council-Manager form of government. The City is governed by a five-member City Council, which is elected by District and serves staggered four-year terms. City Council elections are held in November of even­ numbered years. Annually, the City Council appoints a Mayor and Mayor Pro Tern from its own membership to serve a one-year term.

The City operates primarily as a contract city, utilizing agreements with other governmental entities, private firms, and individuals to provide numerous municipal services to the community, including fire services, which are provided through the Orange County Fire Authority, and police services, which are provided by the Orange County Sheriff's Department.

FACTORS AFFECTING FINANCIAL CONDITION
Federal Stimulus Funds. As a result of the COVID-19 health crisis, the Federal Government enacted several different pieces of legislation to stimulate the national economy. The American Rescue Plan Act was a federal stimulus bill signed into law in March 2021. The City of Laguna Niguel received approximately $8.8 million from this legislation. The City has utilized these funds for infrastructure and capital improvements. The funds were required to be fully spent by December 31, 2026. As of June 30, 2025, the City has spent the entire $8.8 million on the following one-time capital improvement projects:

Project
Chapparosa Park Playground Replacement
Crown Valley Park Interim Parking Lot
La Paz Road Evaluation (Phases 1 and 2)
La Plata Park Playground Replacement
Marina Hills Park Playground Replacement
City Council Chamber Improvements (Furniture & Carpet)
Chapparosa Park Soccer Field Synthetic Turf Replacement Citywide Sports Field Grass Turf Rehabilitation Program Parks Modernization Project
Residential Annual Resurfacing Program (Zones 3 & 4)
Crown Valley Park Wi-Fi Project
Crown Valley Parkway Landscape Improvement Design
Sea Country Senior and Community Center Roof Replacement Marina Hills Drive - Niguel Road to Golden Lantern
La Paz Road Evaluation (Phase 3)
Marina Hills Park Improvements (Phase 1)
Traffic Signal Equipment Upgrades Program
City Hall AV Equipment Upgrade Project
Crown Valley Westbound Widening 1-5 to Oso Creek
Crown Valley Pkwy Traffic Signal Synch & TMC Improvements Citywide VoIP Telephone System Upgrade
Marina Hills Park Improvements (Phase 2)
Local Economy. The City's largest revenue source is property tax. Actual property tax receipts in fiscal year 2024-25 totaled $29. 7 million and represented more than 50% of total General Fund revenues. As a point of comparison, the prior year's property tax receipts totaled $28.4 million, representing a 4.6% increase year over year. Property values and sales continue to remain strong in South Orange County and the City of Laguna Niguel. ii
Sales tax is the second largest revenue source in the City. Actual sales tax receipts in fiscal year 2024-25 totaled $14.2 million, matching the amount received in the prior year, and is consistent with the County and State year-over-year results. Higher interest rates in fiscal year 2024-2025 continued to negatively impact the auto-transportation sector. The City actively monitors trends that affect property taxes and sales taxes, both locally and across the State, as these two revenue sources historically comprise approximately 80% of annual General Fund revenues.

The City adopted its first-ever two-year budget for fiscal years 2025-2027. The fiscal years 2025- 2027 budget is balanced without incurring any debt and maintains all service levels and programs. The adopted General Fund budget includes approximately $56.5 million in revenues and transfers in for fiscal year 2025-2026, $54.6 million in expenditures, and another $3.0 million in transfers out to the CIP fund. The budget provides $24.8 million in funding for the annual Capital Improvement Program that funds projects for the City's streets, parks, and other improvements.

Major Initiatives. The City is actively working on two of the largest capital projects in its history:
the La Paz Road Mobility Enhancements and Permanent Repair project, and the Crown Valley Parkway Westbound Widening project. The estimated combined costs to complete these projects is over $31 million. The City continues to engage with Federal and State agencies to provide grant funding for those projects. Other significant projects being planned, designed, or constructed over the next several years include the Residential Annual Resurfacing Program, street improvements along several main thoroughfares, the Residential Overlay Program, completion of playground replacements at various City parks, and capital improvements at the various parks and facilities throughout the City.

The City has a dedicated page to the Capital Improvement Program that discusses each of these projects in more detail at: https://cityoflagunaniguel.org/810/Cap ital-lmprovement-Prog ram Reserve Policy. The City's Financial Reserves Policy is reviewed on an annual basis for the purpose of providing fiscal stability and to ensure the long-term financial health of the City. It is the goal of both the City Council and management to maintain adequate reserve funds for known and unknown contingencies. The policy calls for maintaining a reserve of no less than 50% of annual General Fund operating expenditures. The total reserves at the end of fiscal year 24-25 were $56.1 million. The Policy allows the City Council to designate portions of the fund balance of the General Fund for future capital projects, continuing or carry-over appropriations, or any other municipal purpose that the City Council deems prudent or necessary. Total reserves applicable to those categories at the end of the fiscal year were $53.5 million, representing 103.5% of actual General Fund expenditures for the year, far exceeding the 50% threshold. All fund balance classifications comply with the requirements of Governmental Accounting Standards Board (GASB) Statement No. 54 and are identified in Note 9 of the Notes to Financial Statements.

Budget Control. The City Council has the legal authority to amend the budget at any time during the fiscal year. The City Manager is authorized to adjust appropriations within or between functions or programs, provided that the adjustment does not increase the adopted annual budget appropriations. Adjustments to appropriations between funds require City Council iii
approval. Transfers of each or unappropriated fund balance from one fund to another can only be made with City Council's approval. Unexpended appropriations for authorized, but uncompleted, projects in the Capital Improvement Program budget and some unexpended operating appropriations can be carried forward to the next succeeding budget year upon recommendation of the City Manager. All other appropriations lapse at the end of the fiscal year.

Long-term Financial Planning. The City of Laguna Niguel adopted its first-ever strategic plan in 2019, which included a planning process to set goals and priorities for its future. Through the strategic planning process, the City created a blueprint for the future and developed a plan to accomplish its determined direction. The Strategic Plan defines current and future needs, establishes goals and strategies, and includes the City's mission statement, vision statement, and guiding values.

A collaborative process was used to update the Strategic Plan. Throughout the process, a variety of stakeholders were involved, including City residents, business owners, Council Members, commissioners , committee members, department heads, and staff. The process included a workshop to discuss the City's goals for the future. The City's continued success in implementing the identified priorities outlined in the strategic plan has furthered the achievement of the goals established by the City Council. This 2025 Strategic Plan update reflects new and modified strategies and timelines to ensure those goals are achieved. The City has accomplished a great deal since the first strategic plan was adopted and the City continues to update the Strategic Plan annually to reflect current priorities and plan for the future.

The City has also taken other tangible actions to ensure long-term fiscal sustainability. These include, but are not limited to, establishing a Section 115 trust to prepare for future pension costs, evaluating service levels on a constant basis, and adhering to the financial principle of not issuing bonded debt.

SUMMARY OF FISCAL YEAR 24-25 ACCOMPLISHMENTS
The City completed many projects and achieved many accomplishments in fiscal year 2024- 2025. Some of these include:

The remainder of this page is intentionally left blank. iv
Fiscal Year
2024-2025 Accomplishments
Strategic Plan Goal 1: Public Safety
Strateav
Continue enhancing public safety education
throughout the community
Continue enhancing neighborhood watch
Public Safety Technology Enhancements
Continue implementation of the Business
Enhancement Team
Status
Complete & Ongoing
• Enhanced Laguna Niguel Police Services on
social media platforms to increase awareness in
the community .
• Continued educating the public regarding police
services (e.g., ebikes, You Are Not Alone
Program (YANA), safety information through the
monthly Chiefs Brief, etc.).

Complete & Ongoing
• Continued the implementation of Neighborhood
Watch meetings in both multi-family and single­
family neighborhoods through small group
meetings, block captain meetings, and
community-wide safety meetings.
• Seven new neighborhood watch groups were
formed.
• Continued outreach efforts to the HOA's.

Complete & Ongoing
• Continued implementation of the Flock cameras
and the trail camera program. Increased the use
of Flock cameras in coordination with HOA's to
enhance effectiveness .

Complete & Ongoing
• The Business Enhancement Team educates
business owners on security, safety
implementation plans, and crime prevention and
reporting.
• The Team has completed the outreach to all of
the businesses in the community, and now the
ongoing relationship building will continue to
provide businesses with ongoing safety
information.

Strategic Plan Goal 2: Fiscal Sustainability
Strategy Status
Produce a clean audit Complete
• Received a clean audit for the Senior Wheels
program. (Laguna Niguel was the only City to
receive a clean audit).

V
Present a balanced budget & the City's first
biennial budget for FY 25-27
Continue implementation of organizational
efficiencies that save both money and staff
resources
Awards
Complete
• Prepared the City's first 2-year budget.
• Presented a balanced budget to the City
Council, which was later adopted on June 3,
2025.

Complete & Ongoing
• Increased the number of credit card payments to
vendors to reduce the cost of printing actual
checks, which increases our efficiency and
helps to decrease the risk of fraud.
• Renegotiation of the Recreation Management
Software contract for recreation program sign­
ups resulted in $25,000 annual savings to the
City.

Complete
• Obtained the award for our Annual
Comprehensive Financial Award from the
Government Finance Officers Association.
• For the first time in the history of the City,
Laguna Niguel won the Government Finance
Officers Association Budget Award for the FY
23-24 Operating & Capital Improvement Budget.

Strategic Plan Goal 3: Open Space & Environmental Preservation Stratenv Status
Tree City USA Complete
• Completed all of the requirements and obtained
the Tree City USA designation.

Continue open space and environmental Ongoing
preservation public education. • Hosted multiple education and outreach events regarding the City's open space.
• Conducted a social media campaign for Wildfire
Awareness Month in September.
. • Conducted a "What's in your Pack" trail safety
campaign at various City trailheads .

Strategic Plan Goal 4: Infrastructure & Technology
Strateav Status
Complete the Energy Efficiency Evaluation In Progress
• Completed Energy Efficiency Study in summer
of 2024.

Develop and implement a short and long-term plan Complete & Ongoing to address the landslide under La Paz Road and • Opened two-way traffic on La Paz Road a make the permanent repairs month ahead of schedule and on budget. • Began the design phase of the long-term plan .
vi
Continue the Active Transportation Study In Progress
• Awarded the consulting contract for the Active
Transportation Plan (ATP) project.
• Successfully implemented the ATP Temporary
Pilot Bike Lane along Aliso Creek Road and
held numerous stakeholder and community
outreach activities.
• Received the B.E.S.T Project Award from the
American Public Works Association (APWA) for
the ATP Temporary Bike Lane along Aliso
Creek Road.

Complete the design of the Traffic Management In Progress Center • The Traffic Management Center will open in Fall 2025.

Design the Bus Shelter Improvements Complete
• The design is complete, and the RFP for
construction will occur next fiscal year.

Design and install the Spring Street Banner Complete
• Design is completed , and the banners were
installed following the holiday season.

Strategic Plan Goal 5: Economic & Community Development Strateav Status
General Plan Update In Progress
• Draft General Plan Update completed in June
2025.
• General Plan Update is scheduled for Planning
Commission and City Council meetings in Fall
2025.

Municipal Code Update Ongoing
• Draft Municipal Code Update is in the final stage
of review between the Municipal Code
Consulting firm and legal counsel.
• Final code adoption is expected to be completed
in summer 2026.

Economic Development Ongoing
• Successful coordination with all shopping center
owners and businesses through our ongoing
Economic Development Program.
• Continued the Featured Business Program
videos on the Economic Development website .
• Continued the Economic Development weekly
newsletters.

Housing Element Policy Implementation Complete
• All Phase I & Phase II State-mandated code
amendments have been adopted.
• All new ADU requirements have been adopted
vii
Strategic Plan Goal 6: Communication & Community Outreach Strateav Status
Continued enhancement of City communication and Ongoing community outreach • Increased the social media followers by over 10,000 in the last two years.
• Continued to enhance the quarterly community
newsletter, Beacon, which has a "click open
rate" double industry standards.
• Enhanced community communications at all
levels with quality and informative content for
the community.

Develop and Implement a Crisis Communication Complete
Policy • The Crisis Communication Policy has been
written & staff training has been completed.

Additional Items/Projects Completed
• Developed and implemented the annual commissioner/committee training. • Successfully negotiated the settlement with the Bear Brand Homeowners Association to keep the trail open for public use.
• Conducted executive leadership and management team building and trainings throughout the year.
• Developed and implemented aquatics service enhancements, which provided more programs to the community and reduced costs to the City. • Updated the City's Audio-Visual production services and quality, resulting in cost savings to the City.

OTHER INFORMATION
Awards. The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Laguna Niguel for its annual comprehensive financial report for the fiscal year ended June 30, 2024. This was the 25th consecutive year that the City has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized annual comprehensive financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. We believe that our current annual comprehensive financial report continues to meet the Certificate of Achievement Program's requirements, and we are submitting it to GFOA to determine its eligibility for another certificate.

Conclusion and Acknowledgments. The City of Laguna Niguel is in excellent financial condition. The City's strong financial policies and keen leadership since incorporation have served the City well. The City has a strong tax base and plans its spending very conservatively.

The City is prospering today and is well-positioned to continue to thrive in the future.

Viii
The preparation and development of this report would not have been possible without the continued support and encouragement of the Laguna Niguel City Council. We thank you for your support, vision, and leadership.

Respectfully submitted:
~~~
Tamara S. Letourneau
City Manager
Trevor Agrelius
Finance Director
ix
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Laguna Niguel
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2024
~ p. ~
Executive Director/CEO
X
Legal Counsel

FINANCE
Budget
Accounting
Investments
Purchasing

CITY OF LAGUNA NIGUEL

ORGANIZATIONAL CHART
JUNE 30, 2025

PARKS &

RECREATION

ADMINISTRATION
Personnel
Risk Management
IT
Records Mgmt.

Elections
Recreation Programs
Senior & Community Center
Skateboard Park
Animal Control

LAGUNA NIGUEL

RESIDENTS

CITY COUNCIL

CITY MANAGER

PUBLIC WORKS
Engineering
Street Lighting
Street Sweeping
Street Maintenance
Parks Maintenance
PUBLIC
SAFETY
Law Enforcement
Emergency Prep.

Slopes & Median Maintenance
Environmental Services
Facilities Maintenance
Capital Improvements
xi

COMMUNITY DEVELOPMENT
Planning
Building & Safety
Code Enforcement
Service Request System

CITY OF LAGUNA NIGUEL

ELECTED OFFICIALS AND MANAGEMENT STAFF
JUNE 30, 2025

CITY COUNCIL
Ray Gennawey, Mayor
Gene Johns, Mayor Pro Tern
Kelly Jennings , Council Member
Stephanie Oddo, Council Member
Stephanie Winstead, Council Member

MANAGEMENT STAFF
City Manager .... .... ...... ..... ....... ......... .... ... ......... ........ .. ............. ....................... ................................... Tamara S. Letourneau Assistant City Manager .......................... ........ .... ..... .. .......................... .......... ........ ........ .................... .......... Justin Martin City Attorney ............. .. ... ........ .... ............................. .. .. ....... ....... .. ...... ........ .... .. ......... ........ .... ........... ...... . Scott C. Smith City Clerk .......... ........ .............. ............ .... ... .............. , .............................. ........ ....................... ....... ..... .. Marissa Asistin Chief of Fire Services (Division 5) ...... ..................... ................... .. ........ ............ ...... ............ ....................... Mike Summers Chief of Police Services (O.C. Sheriff Department) ....... .... .................... .. ..... ........ ......... ........... ...... ..... .. ................ Isaac Flores Community Development Director ............ ..... .......... ........ ..... ... .. ..... ..... .............. .. ............ ........... ............ Jonathan Orduna Finance Director ................ .... ............................................ ........ ....... .. ........ .. ........... ..................... ......... Trevor Agrelius Parks and Recreation Director ... ..... ....... ............ ......... ... ....................... ........... ....... .. ...... . _ ........... ......... Jonathon Harmon Public Works Director ...... .... ..... .......... ...... .. ... ... ...... .... .......................... ... ... ...... ... ..... ............. .. .... ............... ... Jacki Scott xii
CliftonlarsonAllen LLP
CLAconnect.com

INDEPENDENT AUDITORS' REPORT
Honorable Mayor and City Council
City of Laguna Niguel
Laguna Niguel, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Laguna Niguel (the City) as of and for the year June 30, 2025, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the City as of June 30, 2025, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

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

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

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.

CLAglobal.com/disda imer
(1)
Honorable Mayor and City Council
City of Laguna Niguel
Auditors' 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 the City's internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City's ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
(2)
Honorable Mayor and City Council
City of Laguna Niguel
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, budgetary comparison schedule for the general fund and miscellaneous grants special revenue fund, schedule of the city's proportionate share of the net pension liability and related ratios, schedule of contribution - pension, schedule of the changes in total OPEB liability and related ratios 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 fund financial statements and budget to actual 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 fund financial statements and budget to actual schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information
Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditors' 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 basic 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. (3)
Honorable Mayor and City Council
City of Laguna Niguel
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 11, 2025 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 the 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 the City's internal control over financial reporting and compliance.

CliftonlarsonAllen LLP
Irvine, California
December 11 , 2025
(4)

CITY OF LAGUNA NIGUEL

MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2025
As management of the City of Laguna Niguel ("City"), we offer 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, 2025. Our intent is to assist the reader of these financial statements in better understanding the impact of financial decisions made by the City. This analysis will focus on the significant changes from the prior year and in relation to the current budget in an effort to explain the City's overall financial condition. We encourage readers to consider the information presented here in conjunction with the additional information furnished in our letter of transmittal.

OVERVIEW OF FINANCIAL STATEMENTS
The City's basic financial statements consist of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the basic financial statements. This report also consists of supplementary information in addition to the basic financial statements.

Government-Wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the City's finances, in a manner similar to private-sector business. They are comprised of the following:
• Statement of Net Position
The Statement of Net Position presents information on all City assets, deferred outflows of resources, liabilities, and deferred inflows of resources on a full accrual basis of accounting similar to that used by private­ sector companies. The difference between assets and deferred outflows of resources, and liabilities and deferred inflows of resources is reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. • Statement of Activities
The Statement of Activities presents information about the City's revenues and expenses on a full accrual basis, with an emphasis on measuring net revenues or expenses for each of the City's programs. This statement also reflects the change in net position for the year.

Government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, public works, community development, and parks and recreation. The City has no business-type activities.

The government-wide financial statements can be found behind the tab section titled Government-Wide Financial Statements.

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

The fund financial statements provide detail information about each of the City's most significant funds, called Major Funds. The concept of Major Funds, and the determination of which are Major Funds, was established by Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments (GASB 34) and replaces the concept of combining like funds and presenting them in total. Instead, each Major Fund is presented individually, while all Nonmajor Funds are summarized and presented in a single column. (5)

CITY OF LAGUNA NIGUEL

MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2025
OVERVIEW OF FINANCIAL STATEMENTS (Continued)
Fund Financial Statements (Continued)
• Governmental Funds
Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financial requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. A reconciliation of both the governmental funds balance sheet and the governmental funds statement of revenues, expenditures, and changes in fund balances with the government-wide financial statements can be found on pages behind the tab section titled Government-Wide Financial Statements.

The City has nine governmental funds for financial reporting purposes, of which three are considered major funds for presentation purposes. Each major fund is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund balances. The City's three major funds are its General Fund, City Capital Projects Fund, and Miscellaneous Grants Special Revenue Fund. Data from the nonmajor governmental funds (e.g., Gas Tax Fund, Air Quality Improvement Fund, Law Enforcement Fund, Community Development Block Grant Fund, etc.) are combined into a single, aggregated presentation. The governmental funds financial statements can be found on pages behind the tab section titled Fund Financial Statements. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements on pages behind the tab section titled Supplementary Schedules.

The City adopts an annual appropriated budget for all governmental funds. A budgetary comparison schedule has been provided for each of the funds to demonstrate compliance with this budget. • Proprietary Funds
The sole proprietary fund used by the City is an internal service fund. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City's various functions. The City uses an internal service fund to account for its fleet of vehicles.

Proprietary fund financial statements provide the same type of information as the government-wide financial statements, only in more detail. Like the government-wide financial statements, proprietary fund financial statements use the accrual basis of accounting. A separate financial statement is provided for the Vehicle Replacement Fund.

The fund financial statements can be found behind the tab section titled Fund Financial Statements.

Notes to the Basic Financial Statements
The notes provide additional information that is essential to obtain a full understanding of the data provided in the government-wide and fund financial statements. The notes to the basic financial statements can be found behind the tab section titled Notes to the Basic Financial Statements.

Required Supplementary Information
Required supplementary information includes budgetary information on the General Fund, the budget process, the City's share of net pension liability and related ratios, the schedule of pension contributions and schedule of changes in net OPES liability and related ratios. Required supplementary information can be found behind the tab section titled Required Supplementary Information.
(6)

CITY OF LAGUNA NIGUEL

MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2025
OVERVIEW OF FINANCIAL STATEMENTS (Continued)
Supplementary Schedules
Supplementary schedules provide budgetary information on the City Capital Projects Fund, as well as detail about the nonmajor governmental funds, which are added together and presented in single columns in the fund financial statements. Supplementary schedules can be found behind the tab section titled Supplementary Schedules.

The following table summarizes the major features of the City's financial statements, including the portion of the City government they cover and the types of information they contain.

Major Features of the City's Government-Wide and Fund Financial Statements Scope
Government-Wide
Financial Statements
Entire City government
Required financial • Statement of Net
Position
Statement of
Activities
statements
Accounting basis
and measurement
focus
Type of asset/
liability information
Type of inflow/
outflow
information
Financial Highlights
•
Accrual accounting and
economic resources
focus
All assets and liabilities,
both financial and
capital, and short-term
and long-term debt
All revenues and
expenses during year,
regardless of when
cash is received or paid
Fund Financial Statements
Governmental Funds
The activities of the City that
are not proprietary
Proprietary Funds
Activities the City operates
similar to a private business
•
•
Balance Sheet •
Statement of Revenues, •
Expenditures and
Statement of Net Position
Statement of Revenues,
Expenses and Changes in
Net Position Changes in Fund
Balances • Statement of Cash Flows
Modified accrual accounting
and current financial
resources focus
Only assets expected to be
used up and liabilities that
come due during the year or
soon thereafter; no capital
assets or long-term debt
included
Revenues for which cash is
received during or soon after
the end of the year;
expenditures when goods or
services have been received
and payment is due during
the year or soon thereafter
Accrual accounting and
economic resources focus
All assets and liabilities, both
financial and capital, and
short-term and long-term debt
All revenues and expenses
during the year, regardless of
when cash is received or paid
• The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at June 30, 2025, by $620.2 million. The amount is referred to as the net position of the City. Of this amount, $46.5 million is unrestricted net position and may be used to meet the City's ongoing obligations to citizens and creditors.
• The City's overall net position decreased by $9.3 million in the current year. Total revenues decreased by $0.5 million, or 0.8%, primarily due to decreases in grant revenues. Expenses increased by $13.7 million, or 22.5% as compared to fiscal year 2023-2024 levels, primarily due to an increase in spending on public works activities.
• At the close of fiscal year 2024-2025, the City's governmental funds reported combined ending fund balances of $65.3 million, an increase of $3.6 million compared to the prior year. Of the total $65.3 million fund balances at year-end, $53.2 million is available for spending at the government's discretion (the sum of the committed, assigned, and unassigned fund balance categories reported on the accompanying financial statements). (7)

CITY OF LAGUNA NIGUEL

MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2025
OVERVIEW OF FINANCIAL STATEMENTS (Continued)
Financial Highlights (Continued)
• As of June 30, 2025, the total fund balance of the General Fund, the City's chief operating fund, totaled $56.1 million, representing an increase of $2.8 million, or 5.3% over the prior year. • Of the total fund balance of the General Fund at June 30, 2025, the City Council has committed $24.7 million for capital asset replacement, $27.3 million for economic contingencies, $0.2 million for compensated absences, and $1 .0 million for Other Postemployment Benefits (OPES). $2.4 million has been restricted for the unfunded pension liability. The remaining amount of fund balance is either classified as non-spendable or assigned and consists of previously obligated items.

FINANCIAL PERFORMANCE
Government-Wide Financial Analysis
The following analysis focuses on the net position and changes in net position of the City's governmental activities presented in the Government-Wide Statement of Net Position and Statement of Activities. As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the City, assets and deferred outflows of resources exceed liabilities and deferred inflows of resources by $620.2 million at June 30, 2025.

The following is a summary of the Government-Wide Statement of Net Position:

Cash and investments
Other current assets
Noncurrent assets
Total assets
Deferred pension related items
Deferred OPEB related items
Total deferred outflows
Long-term liabilities
Other liabilities
Total liabilities
Deferred pension related items
Deferred OPEB related items
Lease related items
Total deferred inflows
Net position:

Net Investment in capital assets
Restricted
Unrestricted
Total net position
(8)
$
2025

66.6 8.9
563.6
639.1

4.9 0.3

5.2 9.2

9.7 18.9

2.0 1.2

2.0 5.2
559.7

14.0 46.5
$ 620.2
$
2024

66.2 7.9
575.8
649.9

6.6 0.4

7.0 9.5

11.9 21.4

2.7 1.0

2.3 6.0
570.0

14.8 44.7
$ 629.S
Increase/
(Decrease)
from 2024
$
$

0.4 1.0
(12.2)
(10.8)
(1.7)
(0.1)
(1.8)
(0.3}
(2.2)
(2.5)
{0.7)

0.2 (0.3)
(0.8)
(10.3)
(0.8)

1.8 (9.3)

CITY OF LAGUNA NIGUEL

MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2025
FINANCIAL PERFORMANCE (Continued)
Government-Wide Financial Analysis (Continued)
The City's net position decreased by $9.3 million, or 1.5%, during fiscal year 2024-2025, primarily due to a decrease in the City's capital asset balances, mostly the result of depreciation of existing assets. The City adjusted the estimates for useful lives associated with its roadway system to better align with the pavement management program. This change increased deprecation expense by over $8.0 million.

The following is a summary of the Government-Wide Statement of Activities :

Revenues:

Program revenues:

Charges for services
Operating contributions and grants
Capital contributions and grants
Total program revenues
General revenues:

Property taxes
Sales taxes
Other taxes
Investment earnings
Other revenues
Total general revenues
Total revenues
Program expenses:

General government
Public safety
Comm unity development
Parks and recreation
Public works
Total expenses
lncrease/(decrease) in net position
Beginning net position
Ending net position
(9)
$
2025

4.2 3.0

4.8 12.0

29.7 14.2

3.1 3.9

2.3 53.2

65.2 8.1

18.9 5.3

7.0 35.2

74.5 (9.3)
629.5
$ 620.2
$
2024
Increase/
(Decrease)
from 2024

6.2 $ (2.0)
(0.2)
(1.7)

3.2 6.5

15.9 28.4

14.2 3.4

2.8 1.0

49.8 65.7

7.7 17.9

5.4 6.9

22.9 60.8

4.9 624.6
(3.9)

1.3 (0.3)

1.1 1.3

3.4 (0.5)

0.4 1.0
(0.1)

0.1 12.3

13.7 (14.2)

4.9 $ 629.5 $ (9.3)

CITY OF LAGUNA NIGUEL

MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2025
FINANCIAL PERFORMANCE (Continued)
Government-Wide Financial Analysis (Continued)
The City's total revenues were $65.2 million in fiscal year 2024-2025, while the total cost of all programs was $74.5 million. Total revenues decreased by $0.5 million, or 0.8%, from prior year's levels and total expenses increased by $13.7 million, or 22.5%.

The City received approximately $2.0 million less in grant revenues in fiscal year 2024-2025. This is because the City was focused on spending the American Rescue Plan Act (ARPA) funds in the prior fiscal year, as those funds were required to be appropriated by December 31, 2025. In fiscal year 2024-2025, the City had less ARPA funds available and capital funding was more heavily focused on local sources.

General revenues remained strong, earning $3.4 million more than the prior year. Property taxes increased by approximately $1.3 million, or 4.5%, with 2.0% being associated with higher assessed values, and the other 2.5% of the increase associated with transfers of ownership. Sales tax revenue remained flat for the year.

The cost of all governmental activities this year was $74.5 million. However, as shown in the Statement of Activities, the amount that Laguna Niguel taxpayers ultimately financed for these activities through City taxes was $62.5 million, as portions of those expenses were paid by those who directly benefited from the programs ($4.2 million) or by other governments and organizations that subsidized certain programs with contributions and grants ($7.8 million). As mentioned in the previous section, depreciation expense increased by over $8.0 million due to a change in the estimates used for useful lives of the City's roadway system. The following chart graphically depicts the amount of general revenue used in relation to program revenue in funding governmental activities.

40.0 35,0

30.0 ai 25.0 C:
,g 20.0 e
.5 15.0

10.0 5.0
General
Government
Funding of Governmental Activities
■ Program Revenue ■ General Revenue
Public Safety Community
Development
Par1<s and
Recreation
Public Wor1<s
Approximately 72.1 % of all revenues this past year came from some form of tax, which is slightly lower than the

70.0% taxes represented of total revenues in fiscal year 2023-2024. Property tax revenue, the City's largest revenue source, accounted for 45.6% of total City revenue, compared to 43.2% last year. Sales tax revenue was the second largest revenue source at 21.8% of total revenues, up from 21.6% last year. While the tax revenues continued to increase ($1.0 million), the investment earnings and other revenues increased $2.4 million representing 9.5% of total revenues, up from 5.8% in the prior year. The chart on the next page provides a graphical depiction of the City's governmental revenue sources. (10)

CITY OF LAGUNA NIGUEL

MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2025
FINANCIAL PERFORMANCE (Continued)
Government-Wide Financial Analysis (Continued)
Governmental Activities - Revenues by Source
Property taxes

45.6%
Capital contributions
and grants

7.4%
Operating
contributions and
grants

4.6%
Charges for services

6.4%
Sales taxes

21.8%
Other taxes

4.8%
Investment earnings
and other revenues

9.5%
Public works activities comprise the City's largest function at 47.2% of all expenses in fiscal year 2024-2025, compared to 37.7% last year. The large increase over the prior year is due to the increase in depreciation expense due to a change in the estimated useful lives of the City's roadway system. Public Works activities include all street maintenance, sweeping, and lighting; median, park, and slope maintenance; storm drain/water quality maintenance; Metrolink station maintenance and City Hall maintenance. The Public Safety function represents the second largest activity in the City, accounting for 25.4% of total expenses in the current fiscal year, compared to

29.4% last year. Public safety costs increased year-over-year, however, with the Public Works activities increasing, most other functions decreased as a percentage of the total expenses. Public safety activities include police services and emergency preparedness. Most of the public safety costs are for police services provided by the Orange County Sheriff, which were approximately $17.9 million in fiscal year 2024-2025. The following chart graphically depicts the City's governmental expenses by function.

Governmental Activities• Expenses by Function
Community
Development

7.1%
Public Safety __ _

25.4%
Parks and
Recreation
94%
General
Government

10.9%
(11)
Public Works
47 2%

CITY OF LAGUNA NIGUEL

MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2025
FINANCIAL PERFORMANCE (Continued)
Fund Financial Analysis
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financing requirements. Under GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, the sum of committed, assigned, and unassigned fund balance serves as a useful measure of a government's net resources available at its discretion for spending at the end of the fiscal year.

As of the end of the current fiscal year, the City's governmental funds reported a total combined ending fund balance of $65.3 million, an increase of $3.6 million, or 5.8%, in comparison to the prior year. Of the total combined ending fund balance, $53.2 million, or 81.5%, is available for spending at the government's discretion. Of the remaining $12.1 million, $0.3 million is classified as non-spendable, indicating that it is not in spendable form and previously obligated, and $11 .8 million is restricted, indicating that its use is constrained by externally imposed limitations to be spent for pension, public safety, public works, community development, and air quality improvement purposes.

The City's three major funds are the General Fund, the Miscellaneous Grants Special Revenue Fund, and the City Capital Projects Fund. A description and analysis of each fund is presented as follows:
• General Fund - This fund is the chief operating fund of the City. The general fund is responsible for most of the City's general governmental operations and basic services, including operating costs for public safety, community development, parks and recreation, public works, and general government. At the end of the current fiscal year, the total fund balance was $56.1 million. General Fund revenues exceeded expenditures this year by $2.8 million, or 5.3%.
• Miscellaneous Grants Special Revenue Fund - This fund accounts for revenues and expenditures made for various City projects with funding provided by Federal and State grants. For FY 2024-2025, this fund has been classified as major due to the funds received and expended from the Federal government's American Rescue Plan Act (ARPA). At the end of the current fiscal year, total assets were $0.5 million and total liabilities and deferred inflows were $0.7 million. The City received a total of $8.8 million in ARPA funds. As of June 30, 2025, the City spent the entire balance of the ARPA funds on various capital improvement projects. • City Capital Projects Fund - This fund accounts for all expenditures relating to City capital projects. Total expenditures were $8.5 million and subsequent transfers into the fund were $8.7 million for the current fiscal year, an increase of $0.2 million from the previous fiscal year.

GENERAL FUND BUDGETARY HIGHLIGHTS
The original adopted General Fund revenue budget for FY 2024-2025 was $55.3 million. Actual revenues for the General Fund totaled $57.3 million, a positive variance of $2.0 million, or 3.6%.

The primary reasons for this variance was investment income (a positive $1 .9 million variance), which came in stronger than budgeted. The City is intentional about conservative budgeting.

The original adopted General Fund expenditure budget for fiscal year 2024-2025 was $52.8 million. Actual expenditures came in at $51. 7 million, a positive variance of $1 .1 million. The variance was due to actions the City took to continuously monitor and evaluate many operational budget items for effectiveness and efficiency. The General Fund ended with a positive, operational surplus of $5.6 million (actual revenues vs. actual non-capital expenditures), exceeding the budgeted operational surplus estimate of $2.5 million (12)

CAPITAL ASSETS

CITY OF LAGUNA NIGUEL

MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2025
The table below presents all City capital assets, net of accumulated depreciation, including infrastructure.

Infrastructure includes roads, sidewalks, traffic signals, bridges, storm drains, and similar assets used by the entire population.

Increase/
(Decrease)
2025 2024 from 2024
Land $ 271.1 $ 271.1 $
Construction in progress 10.6 6.8 3.8
Buildings and improvements 58.9 60.4 (LS)
Park & other improvements 22.5 22.5
Swimming pool 1.6 1.6
Furniture, equipment, and software 1.0 0.8 0.2
Vehicles 0.1 0.2 (0.1)
Right to Use Assets 0.2 0.6 (0.4)
Infra s tru ctu re 195.8 209.6 (13.8)
Total $ 561.8 $ 573.6 $ (11.8)
The City's investment in capital assets, net of accumulated depreciation, decreased by $11.8 million, or 2.0%, during FY 2024-2025 primarily due to additional depreciation expense of the City's roadway system. The City adjusted the estimates used for the useful lives of those assets, resulting in higher annual depreciation expense. In total, $3.7 million in projects were completed during the year, while the City also added another $8.8 million to improve its parks and infrastructure during the year.

Depreciation expense for the year was $17.3 million, an increase of $8.7 million, or 101.2% as compared to the prior year. The useful life for the City's roadway system was changed from 75 years to 20-30 years to align with the City's pavement management program. For more information on the City's capital assets, refer to Note 5 of the Notes to the Basic Financial Statements.

DEBT ADMINISTRATION
As of June 30, 2025, the City had the following outstanding liabilities related to its vehicle leases, as well as compensated absences:

Leases
Subscriptions Payable
Compensated Absences
Total
2025
$ 0.1
$

0.1 0.7

0.9 $
$
Increase/
(Decrease)
2024 from 2024

0.2 $ (0.1)

0.2 (0.1)

0.6 0.1

1.0 $ (0.1)
For more information on the City's long-term liabilities, refer to Note 7 of the Notes to the Basic Financial Statements.
(13)

NEXT YEAR'S BUDGET

CITY OF LAGUNA NIGUEL

MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2025
The FY 2025-2026 adopted General Fund budget includes revenues of $56.4 million, transfer in of $0.1 million, operating expenditures of $54.6 million, and transfers out of $3.0 million. The budget includes approximately $24.8 million from a variety of funding sources for the Capital Improvement Program (GIP). The GIP for FY 2025-2026 includes improvements to the City streets, playgrounds, parks, city hall, and technology infrastructure. The adopted budget can be found on the City's website at www.cityoflagunaniguel.org.

CONTACTING THE CITY'S FINANCIAL MANAGEMENT
This financial report is designed to provide a general overview of the City's finances for all those interested in the government's finances. If you have questions about this report, or need additional financial information, please contact the Finance Department, City of Laguna Niguel, 30111 Crown Valley Parkway, Laguna Niguel, California 92677.
(14)

BASIC FINANCIAL STATEMENTS
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(16)

GOVERNMENT-WIDE FINANCIAL STATEMENTS
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(18)

CITY OF LAGUNA NIGUEL

STATEMENT OF NET POSITION
JUNE 30, 2025
ASSETS
Current Assets:

Cash and Investments
Restricted Cash and Investments
Receivables:

Accounts
Taxes
Interest
Prepaid Items
Deposits
Due from Other Governments
Lease Receivable
Total Current Assets
Noncurrent Assets :

Lease Receivable
Capital Assets, Not Being Depreciated
Capital Assets , Being Depreciated, Net
Total Noncurrent Assets
Total Assets

DEFERRED OUTFLOWS OF RESOURCES
Pension Related Deferred Outflows of Resources
OPEB Related Deferred Outflows of Resources
Total Deferred Outflows Of Resources

LIABILITIES
Current Liabilities :

Accounts Payable
Accrued Liabilities
Deposits Payable
Unearned Revenue
Retention Payable
Subscription Payable, Due Within One Year
Leases Payable, Due Within One Year
Compensated Absences, Due Within One Year
Other Postemployment Benefits Liabilities, Due Within One Year Total Current Liabilities
Noncurrent Liabilities:

Leases Payable, Due in More Than One Year
Compensated Absences, Due in More Than One Year
Net Pension Liabilities
Other Postemployment Benefits Liabilities, Due in More Than One Year Total Noncurrent Liabilities
Total Liabilities

DEFERRED INFLOWS OF RESOURCES
Lease Related Deferred Inflows of Resources
Pension Related Deferred Inflows of Resources
OPEB Related Deferred Inflows of Resources
Total Deferred Inflows of Resources

NET POSITION
Net Investment in Capital Assets
Restricted for:

Pension
Public Safety
Community Development
Public Works
Unrestricted
Total Net Position
See accompanying Notes to Basic Financial Statements.
(19)
Total
Governmental
Activities
$ 66,625,995
2,419,141
462,394
3,517,084
441,656
224,855
19,459
1,473,376
313.431
75,497,391
1,837,507
281 ,666,143
280. 148,907
563,652,557
639,149,948
4,916,410
305 704
5,222,114
8,038,608
413,375
561,405
259,842
80,189
44,190
81,147
192,928
88,501
9,760,185
16,930
493,379
7,040 ,175
1,607,701
9,158,185
18,918,370
1,958,895
2,076 ,825
1 186 473
5,222,193
559,750,518
2,419,141
101,855
472,551
11,016,168
46,471 ,266
~ 6io 231 499
This page intentionally left blank
(20)
Functions/Programs

PRIMARY GOVERNMENT
Governmental Activities:

General Government
Public Safety
Community Development
Parks and Recreation
Public Works
Interest Expense
Total Governmental Activities

CITY OF LAGUNA NIGUEL

STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2025
Program Revenues
Operating Capital
Charges for Contribut ions Contributions
Expenses Services and Grants and Grants
$ 8,095,895 $ 1,100 $ 22,828 $
18,901 ,965 254,552 251 ,542
5,287,903 2,147,627 221,656 49,831
6,975,454 1,502,552 167,541
35,173,678 334,732 2,376,425 4,743,532
23,121
$ 74,458,016 $ 4,240,563 $ 3,039,992 $ 4,793,363

GENERAL REVENUES
Taxes:

Property Taxes, Levied for General Purpose
Sales Taxes
Franchise Taxes
Other Taxes
Total Taxes
Motor Vehicle in Lieu - Unrestricted
Use of Money and Property
Other
Total General Revenues

CHANGES IN NET POSITION
Net Position - Beginning of Year

NET POSITION - END OF YEAR
See accompanying Notes to Basic Financial Statements.
(21)
$
$
Net Revenues
(Expenses) and
Changes in
Net Position
Governmental
Activities
(8,071,967)
(18,395,871)
(2,868,789)
(5,305,361)
(27,718,989)
(23,121)
(62,384,098)
29,658,031
14,178,832
2,320,723
720,840
46,878,426
101,687
3,872,709
2,280,663
53,133.485
(9,250,613)
629,482,112
620,231 ,499
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(22)

FUND FINANCIAL STATEMENTS
Governmental Fund Financial Statements
Proprietary Fund Financial Statements
(23)
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(24)

GOVERNMENTAL FUND FINANCIAL STATEMENTS
General Fund - The City's primary operating fund that accounts for all financial resources of the general government except those required to be accounted for in another fund.

Miscellaneous Grants Special Revenue Fund - To account for revenues received and expenditures made for various City projects with funding provided by federal and state grants.

City Capital Projects Fund - To account for the activity relating to the City's individual capital projects.

Nonmajor Governmental Funds - To account for the aggregate of all the nonmajor governmental funds.
(25)
ASSETS
Cash and Investments
Restricted Cash and Investments
Receivables:

Accounts
Taxes
Interest
Lease Receivable
Prepaid Items
Deposits
Due from Other Governments
Due from Other Funds
Total Assets

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES

LIABILITIES
Accounts Payable
Accrued Salaries
Deposit Payable
Due to Other Funds
Unearned Revenue
Retentions Payable
Total Liabilities

DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue
Lease Related
Total Deferred Inflows of Resources

FUND BALANCES
Nonspendable
Restricted
Committed
Assigned
Unassigned (Deficit)
Total Fund Balances
Total Liabilities, Deferred Inflows of
Resources , and Fund Balances

CITY OF LAGUNA NIGUEL

BALANCE SHEET

GOVERNMENTAL FUNDS
JUNE 30, 2025
Miscellaneous
Grants Special City Capital
General Revenue Projects
$ 55,855,684 $ $ 4,319,137
2,419,141
462,295
3,052,028
397,709
2,150,938
224,855
19,459
370,188 464,806
334,180
s 65,267 ,018 $· 464,806 $ 4,338.596
$ 5,840,629 $ 55,078 $ 1,842,076
413,375
561,405
288,325
138,439 121,403
7,556 62,634
6,961,404 464,806 1,904,710
243,600 238,151
1,958,895
2,202,495 23B, 151
224,855 19,459
2,419,141 2,414,427
53,174,027
285,096
(238,151)
56,103,119 (238,151! 2,433,886
S 65,267.018 s 464,806 s 4,338.596
See accompanying Notes to Basic Financial Statements.
(26)
Nonmajor Total
Governmental Governmental
Funds Funds
$ 6,451 ,174 $ 66,625,995
2,419,141
99 462,394
465,056 3,517,084
43,947 441,656
2,150,938
224,855
19,459
638,382 1,473,376
334,180
s 7,598,658 s 77,669,078
$ 300,825 $ 8,038,608
413,375
561.405
45,855 334,180
259,842
9,999 80,189
356,679 9,687,599
262,290 744,041
1,958,895
262,290 2,702,936
244,314
6,980,428 11 ,813,996
53,174,027
285,096
(739) {238,8901
6,979,689 65,278,543
s 7,598.658 s 77,669.078

CITY OF LAGUNA NIGUEL

RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS

TO THE GOVERNMENT-WIDE STATEMENT OF NET POSITION
JUNE 30, 2025

RECONCILIATION TO THE STATEMENT OF NET POSITION
Fund Balances of Governmental Funds
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 (excluding amount reported in the internal service fund):

Capital Assets
Accumulated Depreciation
Long-term liabilities were not due and payable in the current period and, therefore, were not reported in the governmental funds. All liabilities, both current and long-term, are reported in the statement of net position:

Compensated Absences
Lease Payable
Subscription Payable
Net pension liabilities and the related deferred outflows of resources and deferred inflows of resources are not due and payable in the current period or not available for current expenditures and are not reported in the governmental fund financial statements:

Pension Related Deferred Outflows of Resources
Net Pension Liabilities
Pension Related Deferred Inflows of Resources
Other postemployment benefits liability and the related deferred outflows of resources and deferred inflows of resources are not due and payable in the current period or not available for current expenditures and are not reported in the governmental fund financial statements :

OPES Related Deferred Outflows of Resources
Other Postemployment Benefits Liabilities
OPEB Related Deferred Inflows of Resources
Revenues reported as unavailable revenue in the governmental funds and recognized in the statement of activities. These are included in the revenues of governmental activities.

Net Position of Governmental Activities as Reported in the Statement of Net Position See accompanying Notes to Basic Financial Statements.
(27)
$ 65,278,543
772,756,527
(210,941,477)
(686,307)
(98,077)
(44,190)
4,916,410
(7,040,175)
(2,076,825)
305,704
(1,696,202)
(1,186,473)
744,041
$ 620,231,499

CITY OF LAGUNA NIGUEL

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2025
Miscellaneous Nonmajor Total
Grants Special City Capital Governmental Governmental
General Revenue Projects Funds Funds

REVENUES
Taxes $ 46,878,426 $ $ $ $ 46,878,426
Licenses and Permits 2,462,182 2,462,182
Intergovernmental 306,735 1,456,907 6,324,723 8,088,365 Charges for Services 1,502,752 1,502,752
Fines and Forfeitures 274,729 274,729
Use of Money and Property (Loss) 3,452,845 381.705 3,834,550 Leases 423,765 423,765
Miscellaneous 2,024,081 2,024.081
Total Revenues 57,325,515 1,456,907 6,706,428 65,488,850

EXPENDITURES
Current:

General Government 6,741,141 6,741,141
Public Safety 18,642,258 190,000 18,832,258
Community Development 4,827,986 184,700 116,439 5,129,125 Parks and Recreation 4,472,023 199,405 4,671,428
Public Works 15,319,971 1,182,665 16,502,636
Capital Outlay 1,460,240 8,487,495 9,947,735
Debt Service:

Principal 209,120 209,120
Interest 23,121 23,121
Total Expenditures 51,695,860 184,700 8,487,495 1,688,509 62,056,564

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 5,629,655 1,272,207 (8,487,495) 5,017,919 3,432,286

OTHER FINANCING SOURCES (USES)
Transfers In 203,845 8,689,271 8,893,116
Transfers Out (3,039,087) (1,195,206) (4,454,978) (8,689,271) Total Other Financing Sources (Uses) (2,835,242) (1 ,195,206) 8,689,271 (4,454,978) 203.845 NET CHANGES IN FUND BALANCES 2,794,413 77,001 201,776 562,941 3,636,131 Fund Balances (Deficit) - Beginning of Year 53,308.706 (315,152) 2,232,110 6,416,748 61 ,642,412 FUND BALANCES (DEFICIT) - END OF YEAR s 56,103.119 $ {238.151} $ 2,433,886 s 6,979.689 s 65,278.543 See accompanying Notes to Basic Financial Statements.
(28)

CITY OF LAGUNA NIGUEL

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN

FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2025

RECONCILIATION TO THE STATEMENT OF ACTIVITIES
Net Change in Fund Balances - Total Governmental Funds
Amounts reported for governmental activities in the statement of activities are different because:

Governmental funds report capital outlay as expenditures . However, in the statement of activities , the costs of those assets are allocated over their estimated useful lives as depreciation expense . This is the amount by which capital outlay exceeded depreciation in the current period (excluding amount reported in the internal service fund):

Capital Assets
Depreciation Expense
Disposals
Compensated absences expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds.

Payment of long-term debt used current financial resources in governmental funds, but payment of debt decreased long-term liabilities in the statement of net position.

Principal payments
Pension expenses reported in the statement of activities do not require the use of current financial resources and, therefore , are not reported as expenditures in governmental funds.

OPEB expenses reported in the statement of activities do not require the use of current financial resources and, therefore , are not reported as expenditures in governmental funds.

Revenues reported as unavailable revenue in the governmental funds are recognized in the statement of activities. These are included in the revenues of governmental activities.

Internal service funds are used by management to charge the costs of certain activities, such as vehicle replacement, to individual funds. The net revenues (expenses) of the internal service funds are reported with governmental activities.

Changes in Net Position of Governmental Activities as Reported on the Statement of Activities
See accompanying Notes to Basic Financial Statements.
(29)
$ 3,636,131
8,783,201
(17,325,380)
(3,286,864)
(38,867)
209,120
(715,074)
(27,588)
(281,447)
(203,845)
$ (9,250,613)
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(30)

PROPRIETARY FUND FINANCIAL STATEMENTS
Internal Service Funds account for financing of goods and services provided by one department to other departments of the City on a cost-reimbursement basis.

Vehicle Replacement Internal Service Fund - Accounts for interdepartmental operations where it is the stated intent that costs of replacing vehicles to the departments of the City on a continuing basis be financed or recovered primarily by charges to the user departments. (31)

CITY OF LAGUNA NIGUEL

STATEMENT OF NET POSITION

PROPRIETARY FUND
JUNE 30, 2025
ASSETS
Current:

Cash and Investments
Interest Receivable
Total Current Assets
Noncurrent:

Vehicles, Net of Accumulated Depreciation
Total Noncurrent Assets
Total Assets

LIABILITIES
Current:

Lease Payable, Due Within One Year
Total Current Liabilities
Noncurrent:

Lease Payable, Due in More Than One Year
Total Noncurrent Liabilities
Total Liabilities

NET POSITION
Net Investment in Capital Assets
Unrestricted
Total Net Position
See accompanying Notes to Basic Financial Statements.
(32)
Governmental
Activities -
Internal
Service Fund
Vehicle
Replacement
Fund
$
$

CITY OF LAGUNA NIGUEL

STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION

PROPRIETARY FUND
YEAR ENDED JUNE 30, 2025

NONOPERATING REVENUES (EXPENSES)
Loss on Disposal of Assets
Forgiveness of Debt
Total Nonoperating Revenues (Expenses)

TRANSFER OUT

CHANGES IN NET POSITION
Net Position - Beginning of Year

NET POSITION - END OF YEAR
See accompanying Notes to Basic Financial Statements.
(33)
Governmental
Activities -
Internal
Service Fund
Vehicle
Replacement
Fund
$ (419,501)
184,299
{235,202)
(203,845)
(439,047)
439,047
$

CITY OF LAGUNA NIGUEL

STATEMENT OF CASH FLOWS

PROPRIETARY FUND
YEAR ENDED JUNE 30, 2025

CASH FLOWS FROM NONCAPITAL AND RELATED FINANCING ACTIVITIES Transfer to Other Funds
Cash and Cash Equivalents - Beginning of Year

CASH AND CASH EQUIVALENTS - END OF YEAR
See accompanying Notes to Basic Financial Statements .
(34)
Governmental
Activities -
Internal
Service Fund
Vehicle
Replacement
Fund
$
$
(202,594)
202,594

NOTES TO BASIC FINANCIAL STATEMENTS
(35)
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(36)

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The basic financial statements of the City of Laguna Niguel, California (the City) are prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) as applied to governmental agencies. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing accounting and financial reporting principles. The more significant of the City's accounting policies are described below.

A. Financial Reporting Entity
The City was incorporated on December 1 , 1989 under the general laws of the state of California and enjoys all the rights and privileges pertaining to such "General Law" cities.

The City operates under a council-manager form of government and currently provides public safety, animal control, planning, building, code enforcement, engineering, street and park maintenance, street lighting, parks and recreation programs, and general administrative services.

This report includes all fund types of the City (the primary government). The City does not include any component units for the fiscal year ended June 30, 2025. Component units are entities for which the City is considered to be financially accountable. The City is considered to be financially accountable for an organization if the City appoints a voting majority of that organization's governing body and the City is able to impose its will on that organization, or there is a potential for that organization to provide specific financial benefits to, or impose specific financial burdens on, the City. The City is also considered to be financially accountable if that organization is fiscally dependent (i.e., it is unable to adopt its budget, levy taxes, set rates or charges, or issue bonded debt without approval from the City). In certain cases, other organizations are included as component units if the nature and significance of their relationship with the City are such that their exclusion would cause the City's financial statements to be misleading or incomplete.

B. Basis of Accounting, Measurement Focus, and Financial Statement Presentation The accounts of the City are organized on the basis of funds, each of which is considered 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, fund equity, revenues, and expenditures or expenses, as appropriate. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number of funds is maintained in accordance with legal and managerial requirements.

Government-Wide Financial Statements
The City's Government-Wide Financial Statements include a Statement of Net Position and a Statement of Activities. These statements present summaries of governmental activities for the City.
(37)

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) B. Basis of Accounting, Measurement Focus, and Financial Statement Presentation (Continued)
Government-Wide Financial Statements (Continued)
These financial statements are presented on an "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all of the City's assets and liabilities, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred.

Certain types of transactions are reported as program revenues for the City in three categories:
• Charges for services
• Operating grants and contributions
• Capital grants and contributions
Certain eliminations have been made in regard to interfund activities, payables and receivables. All internal balances in the Statement of Net Position have been eliminated.

In the Statement of Activities, direct expenses (charges based on actual use) are not eliminated, whereas indirect expense allocations made in the funds are reversed. The following interfund activities have been eliminated:
• Due to/from other funds
• Transfers in/out
Governmental Fund Financial Statements
Governmental fund financial statements include a Balance Sheet and a Statement of Revenues, Expenditures, and Changes in Fund Balances for all major governmental funds and nonmajor governmental funds aggregated. An accompanying schedule is presented to reconcile and explain the differences in Net Position as presented in these statements to the Net Position presented in the Government-Wide Financial Statements.

The City has presented all major funds that met the applicable criteria.

All governmental funds are accounted for on a spending or "current financial resources" measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the Balance Sheet. The Statement of Revenues, Expenditures, and Changes in Fund Balances presents increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period. (38)

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) B. Basis of Accounting, Measurement Focus, and Financial Statement Presentation (Continued)
Governmental Fund Financial Statements (Continued)
Revenues are recognized as soon as they are both "measurable" and "available".

Revenues are considered to be available when they are collectible within the current period as soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. The primary revenue sources, which have been treated as susceptible to accrual by the City, are property taxes, sales tax, intergovernmental revenues, and other taxes. Expenditures are recorded in the accounting period in which the related fund liability is incurred.

The reconciliations of the Fund Financial Statements to the Government-Wide Financial Statements is provided to explain the differences.

The City reports the following major governmental funds:

General Fund
The City's primary operating fund that accounts for all financial resources of the general government except those required to be accounted for in another fund.

Miscellaneous Grants Special Revenue Fund
Accounts for revenues received and expenditures made for various City projects with funding provided by federal and state grants.

City Capital Projects Fund
Accounts for the expenditures relating to the City's individual capital projects.

Additionally, the City reports nonmajor governmental funds. These nonmajor governmental funds are special revenue funds which account for the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service and capital projects.

Proprietary Fund Financial Statements
Proprietary fund financial statements include a statement of net position, a statement of revenues, expenses, and changes in net position, and a statement of cash flows.

An internal service fund is also presented in these statements. However, internal service balances and activities have been combined with the governmental activities in the government-wide financial statements. The City's Internal Service Fund includes one individual fund which provides services directly to other City funds. During the fiscal year, the Internal Service Fund was absorbed by the General Fund. (39)

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL ST A TEMENTS
JUNE 30, 2025
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

8. Basis of Accounting, Measurement Focus, and Financial Statement Presentation (Continued)
Proprietary Fund Financial Statements (Continued)
Proprietary funds are accounted for using the "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included in the statement of net position. The statement of revenues, expenses, and changes in net position present increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. In these funds, receivables have been recorded as revenue and provisions have been made for uncollectible amounts.

Operating revenues in the proprietary funds are those revenues that are generated from the primary operations of the fund. All other revenues are reported as nonoperating revenues. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as nonoperating expenses.

The City reports the following proprietary fund:

Vehicle Replacement Internal Service Fund
Accounts for interdepartmental operations where it is the stated intent that costs of replacing vehicles to the departments of the City on a continuing basis be financed or recovered primarily by charges to the user departments.

C. Cash and Cash Equivalents
The City pools its available cash for investment purposes. The City considers pooled cash and investment amounts, with original maturities of three months or less, to be cash equivalents.

For purposes of the statement of cash flows, cash equivalents are defined as short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in fair value because of changes in interest rates. Cash equivalents generally have an original maturity date of three months or less from the date of purchase. Cash equivalents also represent the proprietary fund's share in the cash and investments pool of the City.

D. Investments
Investments are reported in the accompanying financial statements at fair value.

Changes in fair value that occur during the 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.
(40)

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. Investments (Continued)
The City pools cash and investments of all funds. Each fund's share in this pool is displayed in the accompanying financial statements as cash and investments.

Investment income earned by the pooled investments is allocated to the various funds based on each fund's average cash and investment balance, except for investment income associated with funds not legally required to receive pooled investment income, which has been assigned to and recorded as revenue of the General Fund, as provided by California Government Code 5364 7.

E. Fair Value Measurements
U.S. GAAP defines fair value, establishes a framework for measuring fair value and establishes disclosures about fair value measurement. Investments, unless otherwise specified, recorded at fair value in the financial statements, are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Levels of inputs are as follows:

The three levels of the fair value measurement hierarchy are described below:

Level 1 - Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.

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

Level 3 - Unobservable inputs that reflect management's best estimate of what market participants would use in pricing the assets or liabilities at the measurement date.

F. Receivables
Receivables include such items as taxes, intergovernmental revenues, charges for services, miscellaneous accounts receivable, and interest receivable. No allowance for doubtful accounts has been established, as the City believes all amounts are considered to be collectible in the normal course of business.
(41)

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) G. Prepaid Items and Deposits
Prepaid items are payments made to vendors for services that will benefit periods beyond the fiscal year ended using the purchase method. Deposits are payments made as security or in part payment.

A nonspendable fund balance has been reported in the governmental funds to show that prepaid items and deposits do not constitute "available spendable resources", even though they are a component of net current assets.

H. Leases
The City accounts for leases in accordance with GASS Statement No. 87 based on the principle that leases are financings of the right to use an underlying asset. The primary objective of this statement is to enhance the relevance and consistency of information about governments' leasing activities. This statement establishes a single model for lease accounting based on the principle that leases are financings of the right to use an underlying asset. Under this statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources. For additional information, refer to the disclosures in Note 4 Leases Receivable and Note 7 Long-Term Obligations.

At the commencement of the lease, the City initially measures the lease receivable at the present value of payments expected to be received during the lease term.

Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources are initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflows of resources are recognized as revenue over the life of the lease term.

Key estimates and judgments include how the City determines the discount rate it uses to discount the expected lease receipts to present value, lease term and lease receipts.

The City used the estimated incremental borrowing rate as the discount rate for leases.

The lease term includes the noncancellable period of the lease. Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.

The City monitors changes in circumstances that would require a remeasurement of its leases, and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable.
(42)

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) I. Capital Assets
All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Contributed capital assets are valued at their acquisition value on the date of acquisition. The City's policy is to capitalize all assets with an initial, individual cost equal to or more than $5,000 with a useful life of more than one year.

Capital assets, which include land, buildings and building improvements, park improvements, swimming pool, furniture and equipment, software, vehicles, constructions in progress, and infrastructure assets (street systems, storm drains, bridges, etc.), are reported in the governmental activities column of the government-wide financial statements.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed.

Depreciation has been provided on capital assets in the government-wide financial statements. Depreciation of all capital assets is charged as an expense against operations each year and the total amount of depreciation taken over the years, called accumulated depreciation, is reported on the Statement of Net Position as a reduction in the book value of capital assets. Depreciation is reported using the straight-line method, which means the cost of the asset is divided by its expected useful life in years and the result is charged to expense each year until the asset is fully depreciated.

The City has assigned the useful lives listed below to capital assets:

Infrastructure:

Streets
Storm Drains
Traffic Signals
Bridges
Trails
Asset Type
Buildings and Building Improvements
Swimming Pool and Improvements
Park Improvements
Furniture and Equipment
Vehicles
Software
Right-to-Use Lease Assets
(43)
Useful Lives
20 to 30 Years
75 Years
75 Years
75 Years
75 Years
15 to 45 Years
15 to 25 Years
10 to 25 Years
3 to 15 Years
3 to 10 Years
10 Years
The Estimated Life of the
Lease Asset or the Contract
Term, Whichever is Shorter

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) J. Deferred Outflows and Inflows of Resources
The statement of net position and the governmental funds balance sheet will sometimes report a separate section for deferred outflows of resources. This financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to future periods and so will not be recognized as an outflow of resources (expenditure) until that time. The City has two items that qualify for reporting in this category. The items are deferred outflows related to pensions and deferred outflows related to OPEB.

The statement of net position and the governmental funds balance sheet will sometimes report a separate section for deferred inflows of resources. This financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to future periods and so will not be recognized as an inflow of resources (revenue) until that time. The City has four types of items which qualify for reporting in this category. Three of the items are deferred inflows related to pensions and deferred inflows related to OPEB, and leases, which are presented on the government-wide statement of net position. The fourth item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from accounts, taxes and grant receivables. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available.

K. Pension Plans
For purposes of measuring the net pension liability, deferred outflows and inflows of resources related to pensions, and pension expense, information about the fiduciary net position and additions to/deductions from the fiduciary net position have been determined on the same basis as they are reported by the California Public Employees' Retirement System (CalPERS). For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.

The following timeframes are used for pension reporting:

Valuation Date
Measurement Date
Measurement Period
(44)
June 30, 2023
June 30, 2024
July 1, 2023 to June 30, 2024

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) K. Pension Plans (Continued)
Gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time. The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and inflows of resources related to pensions and are to be recognized in further pension expense. The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized over five years. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period. The net pension liability is generally liquidated by the General Fund.

L. Other Postemployment Benefits Plan
For the purpose of measuring the Total OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, the OPEB Plan recognizes benefit payments when due and payable in accordance with the benefit terms.

The following timeframes are reported OPEB reporting:

Valuation Date
Measurement Date
Measurement Period
June 30, 2024
June 30, 2025
July 1, 2024 to June 30, 2025
Gains and losses related to changes in total OPEB liability are recognized in OPEB expense systematically over time. The first amortized amounts are recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense. Gain and loss are amortized on a straight-line basis over the average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) at the beginning of the measurement period. Other postemployment benefits are generally liquidated by the General Fund.

M. Property Taxes
Property tax revenue is recognized in the fiscal year for which the taxes have been levied providing they become available. Available means due, or past due and receivable within the current period and collected within the current period or expected to be collected soon enough thereafter (not to exceed 60 days) to be used to pay liabilities in the current period.
(45)

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) M. Property Taxes (Continued)
Under California law, property taxes are assessed and collected by the counties at up to 1 % of assessed value, plus other increases approved by the voters. The property taxes go into a· pool, and are then allocated to the cities based on complex formulas. The County of Orange collects property taxes for the City. Tax liens attach annually as of 12:01 a.m. on the first day of January preceding the fiscal year for which the taxes are levied. Taxes are levied on July 1 and cover 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 March 1 each year, and are delinquent, if unpaid, on August 31.

N. Compensated Absences
Upon termination or retirement, permanent employees are entitled to receive compensation at their current base salary for all unused vacation leave, and 0%-50% of the value of unused sick leave depending on length of service and date of hire.

The liability for compensated absences reported in the government-wide and proprietary fund statements consists of leave that has not been used that is attributable to services already rendered, accumulates and is more likely than not to be used for time off or otherwise paid in cash or settled through noncash means. The liability also includes amounts for leave that has been used for time off but has not yet been paid in cash or settled through noncash means and certain other types of leave.

0. Net Position and Fund Balances
In the government-wide financial statements and proprietary fund financial statements, net position is classified as follows:

Net investment in capital assets. This component of net position consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of debt that are attributable to the acquisition, construction, or improvement of those assets and retention payable.

Restricted net position. This component of net position consists of restricted assets reduced by liabilities and deferred inflows of resources related to those assets.

Unrestricted net position. This component of net position is the amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that are not included in the determination of net investment in capital assets or the restricted component of the net position.
(46)

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

0. Net Position and Fund Balances (Continued)
In the Governmental Fund Financial Statements, fund balances are classified in the following categories:

Nonspendable fund balance. Nonspendable fund balances are items that are not expected to be converted to cash, such as prepaid items and deposits, or items that are required to be maintained intact, such as principal of an endowment or revolving loan funds.

Restricted fund balance. Restricted fund balances include amounts that can be spent only for the specific purposes stipulated by external resources providers, such as grant providers, constitutionally, or through enabling legislation. Effectively, restrictions may be changed or lifted only with the consent of resource providers.

Committed fund balance. Committed fund balances include amounts that can be used only for the specific purposes determined by formal action of the government's highest level of decision-making authority, i.e. adoption of the annual City Financial Reserves Policy and resolutions. Commitments may be changed or lifted only by the government taking the same formal action that imposed the constraint originally. The City Council is considered the highest authority for the City. Commitments of fund balance are specified in the City's Financial Reserves Policy, which is reviewed and amended as appropriate on an annual basis by the City Council Assigned fund balance. Assigned fund balances comprise amounts intended to be used by the government for specific purposes. Intent can be expressed by the governing body or by an official or body to which the governing body delegates the authority. The City Council is the body authorized to assign amounts to a specific purpose. In governmental funds, other than the General Fund, assigned fund balance represents all amounts that are not classified as restricted or committed.

Resources in governmental funds other than the General Fund are to be used for the specific purpose of that fund.

Unassigned fund balance. Unassigned fund balance is a residual (surplus) classification used for the General Fund only and includes amounts not contained in the other classifications. Unassigned amounts in the General Fund are available for any purpose. If a governmental fund, other than the General Fund, has a fund balance deficit, it will be reported as a negative amount in the unassigned classification in that fund.

Spending Policy
Government-Wide Financial Statements and the Proprietary Fund Financial Statements When expenses are incurred for purposes for which both restricted and unrestricted components of net position are available, the City's policy is to apply the restricted component of net position first, then the unrestricted component of net position as needed.
(47)

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

0. Net Position and Fund Balances (Continued)
Spending Policy (Continued)
Governmental Fund Financial Statements
When expenditures are incurred for purposes for which all restricted, committed, assigned, and unassigned fund balances are available, the City's policy is to apply in the following order, except for instances wherein an ordinance specifies the fund balance:
• Restricted
• Committed
• Assigned
• Unassigned
P. Use of Estimates
The preparation of basic financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from these estimates and assumptions.

NOTE 2 STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
Deficit Fund Balance
The following funds had a deficit fund balance at June 30, 2025:

Special Revenue Funds:

CDBG
Miscellaneous Grants
$ (739)
(238,151)
The fund deficit in the CDBG Special Revenue Fund and the Miscellaneous Grants Special Revenue Fund is the result of expenditures incurred during the fiscal year that have not been reimbursed since the grant is on-going.

Excess of Expenditures Over Appropriations
The following funds had expenditures in excess of appropriations:

Fund Description Appropriations Expenditures Excess
Nonmajor Governmental Funds:

Senior Transportation
Special Revenue Fund Total Expenditures $ 120,860 $ 199,405 $ (78,545) (48)

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 3 CASH AND INVESTMENTS
The City maintains a cash and investment pool, which includes cash balances and authorized investments of all funds.

The City had the following cash and investments at June 30, 2025:

Governmental
Activities
Cash and Investments $ 66,625,995
2,419,141 Restricted Cash and Investments
Total Cash and Investments $ 69,045,136
The City's cash and investments at June 30, 2025 in more detail:

Cash and Cash Equivalents :

Cash on Hand $ 2,400
Demand Deposits 3,043,559
Total Cash and Cash Equivalents 3,045,959
Investments:

A.

Federal Government Agency Securities 29,586,190
U.S. Treasury Obligations 28,254,740
Insured Certificates of Deposits 4,050,555
Money Market Mutual Fund 1,580,622
PARS Pooled 115 Trust 2,419,141
State Local Agency Investment Fund 107,929
Total Investments 65,999,177
Total Cash and Investments $ 69,045,136
Demand Deposits
The carrying amounts of the City's deposits were $3,043,559 at June 30, 2025. Bank balances at that date were $2,779,426, the total amount of which was collateralized or insured with accounts held by the pledging financial institutions in the City's name as discussed below.

The California Government Code requires California banks and savings and loan associations to secure the City's cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in the City's name. (49)

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 3 CASH AND INVESTMENTS (CONTINUED)
A. Demand Deposits (Continued)
The market value of pledged securities must equal at least 110% of the City's cash deposits. California law also allows institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the City's total cash deposits. The City may waive collateral requirements for cash deposits, which are fully insured up to $250,000 by the Federal Deposit Insurance Corporation. The City, however, has not waived the collateralization requirements.

The City follows the practice of pooling cash and investments of all funds, except for funds deposited in escrow which were required by construction projects. Interest income earned on pooled cash and investments is allocated on an accounting period basis to the various funds based on the period-end cash and investment balances.

B. Investments Authorized by California Government Code and the City's Investment Policy
The table below identifies the investment types that are authorized for the City by the California Government Code (or the City's investment policy, where more restrictive).

The table also identifies certain provisions of the California Government Code (or the City's investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City's investment policy.

Maximum Maximum
Maximum Percentage Investments in
Authorized Investment Type Maturity Allowed One Issuer
U.S. Treasury Obligations 10 Years None $10 Million
Federal Agency Securities or U.S. Government
Sponsored Enterprise Securities 5 Years 60% 25%
State Local Agency Investment Fund (LAIF) N/A 55% $40 Million Insured Certificates of Deposits 5 Years 30% $250,000
Insured Money Market Accounts N/A None None
Money Market Mutual Funds N/A 20% 10%
Orange County Investment Pool (OCIP) N/A 55% $40 Million California Asset Management Program (CAMP) N/A 20% $10 Million Section 115 Pension Trust NIA 20% None
(50)

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 3 CASH AND INVESTMENTS (CONTINUED)
C. Fair Value Measurement Disclosure
At June 30, 2025, investments are reported at fair value. The following table presents the fair value measurements of investments on a recurring basis and the levels with GASB 72 fair value hierarchy in which the fair value measurements fall at June 30, 2025:

Investment Type
Federal Government Agency Securit ies
U.S. Treasury Obligations
Insured Cert ificates of Deposits
Money Market Mutual Fund
PARS Pooled 115 Trust
LAIF
Total
D. Risk Disclosures
Interest Rate Risk
$
$
Measurement Inputs
Level 1 Level2
$ 29,586 ,190
28 ,254 ,740
4,050,555
1,580,622

28.254.740 $ 35,217 ,367
Uncate2orized Total
$ $ 29,586 ,190
28 ,254,740
4,050,555
1,580,622
2,419,141 2,419,141
107,929 107,929
$ 2,527. 070 s 65 ,999,177
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter-term and longer-term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.

Information about the sensitivity of the fair values of the City's investments to market interest rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity:

Measurement Inputs
12 Months 13-24 25-60 60
Investment Tl pe or Less Months Months Months and over Total Federal Government Agency Securities $ 13,210,435 $ 8,324,200 $ 8,051,555 $ $ 29,586,190 U.S. Treasury Obligations 2,006,340 1,009,690 $10,075,625 15,163,085 28,254,740 Insured Certificates of Deposits 4,050,555 4,050,555
Money Market Mutual Fund 1,580,622 1,580,622
PARS Pooled 115 Trust 2,419,141 2,419,141
LAIF 107,929 107,929
Total s 19.324.467 S 9,333.890 $ 22.177,735 S 15,163,085 $ 65 999,177 (51)

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 3 CASH AND INVESTMENTS (CONTINUED)
D. Risk Disclosures (Continued)
Credit Risk
Generally, credit risk is the risk that the issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code or the City's investment policy, and the actual rating as of the fiscal year-end for each investment type:

Legal Not Total as of
Investment Type Rating AAA Rated June 30, 2025
Federal Government Agency Securities AAA $ 29,586,190 $ - $ 29,586,190 U.S. Treasury Obligations * NIA 28,254,740 28,254,740
Insured Certificates of Deposits NIA 4,050,555 4,050,555 Money Market Mutual Fund AAA 1,580,622 1,580,622
PARS Pooled 115 Trust NIA 2,419,141 2,419,141
LAIF NIA 107,929 107,929
Total $ 31,166,812 $ 34,832,365 $ 65,999.177
*Exempt from Rating Disclosure
Concentration of Credit Risk
The investment policy of the City contains a limitation on the amount that can be invested in any one issuer of Federal Agency securities to a maximum of 25% of total investments. The City was in compliance with this limitation at June 30, 2025 and throughout the fiscal year.

The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code.

Investments in any one issuer (other than mutual funds and external investment pools) that represent 5% or more of total City investments are as follows:

Issuer
Federal National Mortgage Association
Federal Home Loans Banks
Federal Farm Credit Banks
Custodial Credit Risk
Investment Type
Federal Government Agency Securities
Federal Government Agency Securities
Federal Government Agency Securities
Amount
$ 8,646,669
9,970,966
10,968,555
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City's investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than as follows.
(52)

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 3 CASH AND INVESTMENTS (CONTINUED)
D. Risk Disclosures (Continued)
Custodial Credit Risk (Continued)
The California Government Code requires that a financial institution secure deposit made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the City. California law also allows financial institutions to secure city deposits by pledging first trust deed mortgage notes having a value of 150% of the secured City deposits. The City's investment policy requires delivery versus payment procedures and that all securities be held in third-party safekeeping by a custodial financial institution.

As of June 30, 2025, all of the City's deposits with financial institutions in excess of federal depository insurance limits were collateralized by an interest in an undivided collateral pool as required by state law. In addition, all investments were held by the third-party safekeeping institution.

E. Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The value of the City's investment in this pool is reported in the accompanying financial statements at amounts based upon the City's pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. As of June 30, 2025, the City had $107,929 invested in LAIF.

F. Investment in Public Agency Retirement Services
The City established an Internal Revenue Service Section 115 irrevocable trust with the Public Agency Retirement Services (PARS) for the purposes of funding pension obligations. PARS is an external investment pool, is not rated and is not registered with the Securities Exchange Commission. The City selects the investment strategy and the pool is managed by the PARS Board. The fair value of the City's investments in the pool is reported in the accompanying financial statements at amounts based upon the City's pro-rata share of the fair value provided by PARS for the entire PARS portfolio. (53)

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 4 LEASE RECEIVABLE
NOTE 5
As of June 30, 2025, the City has 16 cell tower leases for easements located throughout Laguna Niguel. The interest rate for each lease is 1.65% . The initial lease agreement term is five years with the option to extend for three additional terms of five years. The total amount of lease revenue recognized in the current reporting period from leases is $323,517 and the total amount of interest received related to the lease was $38,160 . The balance of the lease receivable at June 30, 2025 is $2,150,938. The City has a deferred inflow of resources associated with these leases that will be recognized as revenue over the lease term. The balance of the deferred inflow of resources at June 30, 2025 is $1,958,895.

CAPITAL ASSETS
The following is a summary of changes in the capital assets for governmental activities during the fiscal year:

Balance Balance
July_ 11 2024 Additions Deletions Redass ficabon June 30. 2025 Capital Assets, Not Being Depreciated
Land $ 271,068,667 $ $ $ $ 271,068,667
Construction In Progress 6,826,797 7.487 892 (3,717,213) 10 597 476 Total Capital Assets, Not
Being Depreciated 277,895,464 7,487.892 (3,717,213) 281.666, 143 Capital Assets, Being Depreciated:

Infrastructure 357,933,691 (11,902,000) 2,568,244 348,599,935 Buildings and Building Improvements 81 ,956,893 418,363 82,375,256 Improvements Other Than Buildings 1,904,458 116,665 2,021,123 Park Improvements 50,117,470 294,820 1,148,969 51,561,259 Swimming Pool 2,408,558 150,882 2,559,440
Furniture and Equipment 1,849,859 314,578 (148,250) 2,016,187 Software 424,269 424,269
Right-to-Use Subscription Assets 527,508 527,508
Vehicles 561,299 (16,618) 544,681
Right-to-Use Lease Assets - Vehicles 460,727 460 727
Total Capital Assets, Being
Depreciated 498,144,732 1,295,308 (12,066,868) 3,717,213 491,090,385 Less: Accumulated Depreciation:

Infrastructure (148,339,564) (13,088,591) 8,652,605 (152,775,550) Buildings and Building Improvements (21,508,202) (1,926,350) (23,434,552) Improvements Other Than Buildings (527,069) (124,429) (651,498) Park Improvements (28,973,929) (1 ,443,798) (30,417,727) Swimming Pool (836,782) (99,923) (936,705)
Furniture And Equipment (1,126,028) (125,522) 120,080 (1,131,470) Software (376,504) (16,474) (392,978)
Righi-to-Use Subscription Assets (105,500) (316,500) (422,000) Vehicles (326,591) (98,064) 7.320 (417,335)
Right-to-Use Lease Assets - Vehicles (275,934) (85,729) (361,663) Total Accumulated Depreciation (202,396,103) (17,325.380) 8.780.005 (210,941,478) Total Capital Assets, Being
Depreciated , Net 295,748,629 (16.030,072) {3.286.863) 3 717 213 280 148 907 Governmental Activities Capital Assets, Net s 573,644,093 S (8,542,180! s {3,286,863} $ 561,815,050 (54)

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 5 CAPITAL ASSETS (CONTINUED)
NOTE 6
Depreciation and amortization expense was charged to the City's programs as follows :

Governmental Activities :

General Government
Public Safety
Community Development
Parks and Recreation
Public Works
Total Depreciation and Amortization Expense
$ 921,691
69,707
45,162
2,187,956
14,100,864
$ 17,325,380
Infrastructure assets comprise a significant portion of capital assets. Infrastructure assets are further identified by type as follows:

Balance
June 30. 2024 Additions Deletions
Infrastructure Assets:

Streets $ 313,276,097 $ 1,594,628 $ (11,282,561)
Storm Drains 21,301,683 686,158
Traffic Signals 10,530,461 287,458 (619,439)
Bridges 5,625,168
Trails 7,200,282
Total Infrastructure Assets 357,933,691 2,568,244 (11,902,000) Less: Accumulated Depreciation for:

Streets (128,019,733) (12,501,416) 8,391,267
Storm Drains (11,206,831) (284,022)
Traffic Signals (4,442,747) (132,147) 261,338
Bridges (2,338,813) (75,002)
Trails (2,331.440) (96,004)
Total Accumulated Depreciation (148,339,564) (13,088,591) 8,652,605 Total Infrastructure Assets , Net $ 209,594.127 $ (10,520 .347) s (3,249,395)

INTERFUND ACTIVITY
A. Due From and To Other Funds
The composition of interfund balances as of June 30, 2025, is as follows :

Due from Other Funds
Governmental Funds:

General Fund
Due from other Funds
Miscellaneous
Grants
$ 288,325
(55)
Nonmajor
Governmental
Funds
$ 45 855 $
Balance
June 30, 2025
$ 303,588,164
21,987,841
10,198,480
5,625,168
7,200,282
348,599,935
(132,129,882)
(11,490,853)
(4,313,556)
(2,413,815)
(2,427,444)
{152,775,550)
$ 195,824.385
Total
334 180

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 6 INTERFUND ACTIVITY (CONTINUED)
A. Due From and To Other Funds (Continued)
All interfund balances are short-term in nature and are expected to be repaid within one year. The Miscellaneous Grants and Community Development Block Grant Special Revenue Fund had a negative cash balance at June 30, 2025. This amount has been reclassified as interfund receivables/payables for financial statement purposes.

B. Transfers In and Out
Transfers Out
Governmental Funds:

General Fund
Miscellaneous Grants Special Revenue Fund
Nonmajor Governmental Funds
Internal Service Fund
Total
$
$
Transfers In
General City Capital
Fund Projects Total
$ 3,039,087 $ 3,039,087
1,195,206 1,195,206
4,454,978 4,454,978
203,845 203,845
203,845 $ 8,689.271 $ 8,893.116
Transfers from General Fund, Miscellaneous Grants Special Revenue Fund and Nonmajor Governmental Funds to the City Capital Projects Fund in the amount of $8,689,271 were to cover capital project expenditures during the fiscal year. These projects are approved through the annual budget process and each project is approved with identified funding sources.

NOTE 7 LONG-TERM LIABILITIES
Summary of changes in long-term liabilities for the year ended June 30, 2025 is as follows:

Governmental Activities:

Balance
July 1, 2024 Additions
Balance Due Within Due in More
Deletions June 301 2025 One Year Than One Year
Subscription Payable
Leases Payable
Compensated Absences
$ 167,088 $ - $ (122,898) $ 44,190 $ 44,190 $
184,299 (86,222) 98,077 81,147 16,930
Total Governmental Activities $
647.440 464,260
996,827 S 464,260
(445.393} __ 6..,..86~3 __ 07_
$ (654.5 131 $ 828,574 $
192.928 493 379
318.265 $ 510 309
Subscription Payable
The City entered into a subscription-based information technology arrangement (SBITA) for a software. The SBITA arrangement expires in 2026. The subscription asset and the related accumulated amortization are detailed in Note 5. The future minimum subscription payments under the SBIT A agreement is as follows:

Fiscal Year Ending June 30,
2026
Principal
$ 44,190
(56)
Interest Total
$ 1,980 $ 46,170

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 7 LONG-TERM LIABILITIES (CONTINUED)
Leases Payable
The City leases vehicles for various terms under long-term noncancelable lease agreements. The leases expire at various dates through 2028. The right-to-use lease assets and the related accumulated amortization are detailed in Note 5. The future minimum lease payments under the lease agreements are as follows:

Fiscal Year Ending June 30, Princieal Interest Total
2026 $ 81 ,147 $ 16,750 $ 97,897
2027 14,454 3,317 17,771
2028 2.476 678 3,154
Total ~ 98,077 ~ 20,745 i 118,822
NOTE 8 LIABILITY, WORKERS' COMPENSATION PLAN, AND PURCHASED INSURANCE A. Description of Self-Insurance Pool Pursuant to Joint Powers Agreement The City is a member of the California Joint Powers Insurance Authority (the Authority).

The Authority is composed of 126 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The California JPIA began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine-member Executive Committee.

B. Primary Self-Insurance Programs of the Authority
Each member pays an annual contribution at the beginning of the coverage period. The total funding requirement for primary self-insurance programs is based on an actuarial analysis. Costs are allocated to individual agencies based on payroll and claims history, relative to other members of the risk-sharing pool.

Primary Liability Program
Claims are pooled separately between police and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula; (2) The first layer of losses includes incurred costs up to $100,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer; (3) The second layer of losses includes incurred costs from $100,000 to $500,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer; and (4) Incurred costs from $500,000 to $50 million, are distributed based on the outcome of cost allocation within the first and second loss layers. (57)

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 8 LIABILITY, WORKERS' COMPENSATION PLAN, AND PURCHASED INSURANCE (CONTINUED)
B. Primary Self-Insurance Programs of the Authority
Primary Liability Program (Continued)
The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence. Subsidence losses also have a $50 million per occurrence limit. The coverage structure is composed of a combination of pooled self-insurance, reinsurance, and excess insurance. Additional information concerning the coverage structure is available on the Authority's website: https://cjpia.org/coverage/risk-sharing­ pools/.

Primary Workers' Compensation Program
Claims are pooled separately between public safety (police and fire) and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula; (2) The first layer of losses includes incurred costs up to $75,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer; (3) The second layer of losses includes incurred costs from $75,000 to $200,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer; and (4) Incurred costs from $200,000 to statutory limits are distributed based on the outcome of cost allocation within the first and second loss layers.

For 2024-25 the Authority's pooled retention is $1 million per occurrence, with reinsurance to statutory limits under California Workers' Compensation Law. Employer's Liability losses are pooled among members to $1 million. Coverage from $1 million to $5 million is purchased through reinsurance policies, and Employer's Liability losses from $5 million to $1 0 million are pooled among members.

Pollution Legal Liability Insurance
The City participates in the pollution legal liability insurance program which is available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City. Coverage is on a claims-made basis. There is a $250,000 deductible. The Authority has an aggregate limit of $20 million.
(58)

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 8 LIABILITY, WORKERS' COMPENSATION PLAN, AND PURCHASED INSURANCE (CONTINUED)
C. Purchasedlnsurance
Property Insurance
The City participates in the all-risk property protection program of the Authority. This insurance protection is underwritten by several insurance companies. The City property is currently insured according to a schedule of covered property submitted by the City to the Authority. The City property currently has all-risk property insurance protection in the amount of $151,062,026. There is a $10,000 deductible per occurrence except for nonemergency vehicle insurance which has a $2,500 deductible.

Crime Insurance
The City purchases crime insurance coverage in the amount of $1 ,000,000 with a $2,500 deductible. The fidelity coverage is provided through the Authority.

D. Adequacy of Protection
During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in 2024-2025.

NOTE 9 CLASSIFICATION OF FUND BALANCE
Details of the fund balance classifications at June 30, 2025 are as follows:

Miscellaneous City Capital Nonmajor
General Fund Grants Projects Governmental Total
Nonspendable:

Prepaid Items $ 224,855 $ - $ - $ - $ 224,855
Deposits 19 459 19 459
Total Nonspendable 224,855 19,459 244,314
Restricted:

Pension 2,419,141 2,419,141
Public Safety 101,855 101,855
Community Development 472,551 472,551
Public Works 2,414,427 6.406 ,022 8.820.449
Total Restricted 2,419,141 2,414.427 6,980.428 11,813,996 Committed:

Compensated Absences 192,928 192,928
Capital Asset Replacement 24,694,296 24,694,296
OPEB 962,187 962,187
Economic Uncertainty• 27 324 616 27,324.616
Total Committed 53,174,027 53,174,027
Assigned:

Continuing Appropriations:

Community Development 165,101 165,101
Public Works Operations 119,995 119 995
Total Assigned 285,096 285,096
Unassigned (Deficit) (238,151) (739l (238,890!
Total Fund Balance s 56,103 119 s (238,151) $ 2.433:886 s 6 979.689 $ 65 278 543 (59)

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 9 CLASSIFICATION OF FUND BALANCE (CONTINUED)
*The City Council adopted the Financial Reserves Policy through resolution during the budget adoption process. The City will maintain a committed fund balance for Financial and Economic Uncertainty equal to no less than 50% of annual General Fund operating expenditures. City Council approval shall be required before expending any portion of the committed fund balance for Financial and Economic Uncertainty. Unforeseen circumstances that may require an expenditure of such amounts include, but are not limited to natural disasters, unforeseen deficiencies of a major revenue source, or unexpected operating or capital expenditures.

NOTE 10 JOINTLY GOVERNED ORGANIZATION
Orange County Fire Authority
In January 1995, the City entered into a joint powers agreement with the cities of Buena Park, Cypress, Dana Point, Irvine, Laguna Hills, Lake Forest, La Palma, Los Alamitos, Mission Viejo, Garden Grove, 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 (OCFA). Since the creation of the OCFA, the cities of Laguna Woods, Rancho Santa Margarita, Westminster, Aliso Viejo, and Santa Ana joined the OCFA as members eligible for fire protection services. The purpose of the OCFA 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 OCFA's governing board consists of one representative from each city and two from the County. The operations of the OCFA 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, Garden Grove, Seal Beach, Westminster, and Santa Ana. The County pays all structural fire fees it collects to the OCFA. The cities of Stanton, Tustin, San Clemente, Buena Park, Garden Grove, Seal Beach, Westminster, and Santa Ana are considered "cash contract cities" and accordingly, make cash contributions based on the OCFA's annual budget. No determination has been made as to each participant's proportionate share of fund equity as of June 30, 2025. Upon dissolution of the OCFA, all surplus money and property of the OCFA will be conveyed or distributed to each member in proportion to all funds provided to the OCFA by that member or by the County on behalf of that member during its membership. The OCFA financial statements can be obtained from the OCFA at 1 Fire Authority Road, Irvine, CA 92602.
(60)

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 11 DEFINED BENEFIT PENSION PLANS
A. General Information about the Pension Plan
Plan Description
The City contributes to CalPERS, a cost-sharing, multiemployer defined pension plan, for its' miscellaneous employees. CalPERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries.

CalPERS acts as a common investment and administrative agent for participating public entities within the state of California. Benefit provisions and all other requirements are established by state statute and City ordinance. Copies of CalPERS' annual financial report may be obtained from its website under Forms and Publications.

Benefits Provided
CalPERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. A first tier classic CalPERS member becomes eligible for service retirement upon attainment of age 55 with at least five years of credited service. A second tier classic CalPERS member becomes eligible for service retirement upon attainment of age 60 with at least five years of credited service. A PEPRA miscellaneous member becomes eligible for service retirement upon attainment of age 62 with at least five years of service. The service retirement benefit is a monthly allowance equal to the product of the benefit factor, years of service, and final compensation. The final compensation is the monthly average of the member's highest 12 - 36 months of full-time equivalent monthly pay.

The following are the benefit provisions for each plan:
• Classic Tier 1: 2.0% (at age 55) of the average final 12 months compensation. • Classic Tier 2: 2.0% (at age 60) of the average final 36 months compensation. • PEP RA: 2.0% (at age 62) of the average final 36 months compensation.

Participants are eligible for nonindustrial disability retirement if they become disabled and have at least five years of credited service. There is no special age requirement.

The standard nonindustrial disability retirement benefit is a monthly allowance equal to

1.8% of final compensation, multiplied by service.

An employee's beneficiary may receive the basic death benefit if the employee dies while actively employed. The employee must be actively employed with the City to be eligible for this benefit. An employee's survivor who is eligible for any other pre­ retirement death benefit may choose to receive that death benefit instead of this basic death benefit. The basic death benefit is a lump sum in the amount of the employee's accumulated contributions, where interest is currently credited at 7.5% per year, plus a lump-sum in the amount of one month's salary for each completed year of current service, up to a maximum of six months' salary. For purposes of this benefit, one month's salary is defined as the member's average monthly full-time rate of compensation during the 12 months preceding death. Upon the death of a retiree, a one­ time lump-sum payment of $500 will be made to the retiree's designated survivor(s) or to the retiree's estate
(61)

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL ST A TEMENTS
JUNE 30, 2025
NOTE 11 DEFINED BENEFIT PENSION PLANS (CONTINUED)
A. General Information about the Pension Plan (Continued) Benefits Provided (Continued)
Benefit terms provide for annual cost-of-living adjustments to each employee's retirement allowance. Beginning the second calendar year after the year of retirement, retirement and survivor allowances will be annually adjusted on a compound basis by

2.0%.

Contributions
Section 20814(c) of the California Public Employees' Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following the 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 employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contributions for the fiscal year ended June 30, 2025 were $1,311,789.

Actuarial Methods and Assumption Used to Determine Total Pension Liability For the measurement period ended June 30, 2024, the total pension liability was determined by an actuarial valuation as of June 30, 2023, with update procedure used to roll forward the total pension liability to June 30, 2024. The June 30, 2024 total pension liabilities were based on the following actuarial methods and assumptions:

Actuarial Cost Method
Discount Rate
Inflation
Salary Increases
Mortality Rate Table
Post-Retirement Benefit Increase
Entry Age Actuarial Cost Method

6.90%

2.30%
Varies by entry age and service
(1)
The lessor of contract COLA or 2.30% until Purchasing
Power Protection Allowance floor on purchasing
power applies, 2.30% thereafter
(1) The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study for the period from 2001 to 2019. Pre-retirement and post-retirement mortality rates include generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021 that can be found on the Cal PERS website. (62)

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 11 DEFINED BENEFIT PENSION PLANS (CONTINUED)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pension
Discount Rate
The discount rate used to measure the total pension liability was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

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. Using historical returns of all of the funds' asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 1 O Basis points. The expected real rates of return by asset class are as follows:

Asset Class (1)
Global Equity - Cap-Weighted
Global Equity - Non-Cap-Weighted
Private Equity
Treasury
Mortgage-Backed Securities
Investment Grade Corporates
High Yield
Emerging Market Debt
Private Debt
Real Assets
Leverage
Total
1 An expected inflation of 2.30% used for this period.

Assumed Asset
Allocation

30.00 %

12.00 13.00

5.00 5.00

10.00 5.00

5.00 5.00

15.00 (5.00)
100.00 %
2 Figures are based on the 2021 Asset Liability Management study. (63)
Real Return (1,2)

4.54 %

3.84 7.28

0.27 0.50

1.56 2.27

2.48 3.57

3.21 (0.59)

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 11 DEFINED BENEFIT PENSION PLANS (CONTINUED)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pension (Continued) Proportionate Share of Net Pension Liability
As of the fiscal year ended June 30, 2025, the City reported a net pension liability for its proportionate share of the collective net pension liability of the miscellaneous plan of $7,040,175
The City's net pension liability for the miscellaneous plan is measured as the proportionate share of the net pension liability. The City's proportionate share of the net pension liability was based on a projection of the City's long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined.

The City's proportionate share of the net pension liability for the Safety Plan as of the measurement dates ended June 30, 2023 and 2024, were as follows:

Proportion - June 30, 2023 (MD)
Proportion - June 30, 2024 (MD)
Change - Increase (Decrease)
Miscellaneous

0.14730 %

0.14556
(0.00174)%
Pension Expense and Deferred Outflows and Inflows of Resources For the year ended June 30, 2025, the City recognized pension expense in the amount of $2,026,863. At June 30, 2025, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Changes in Assumptions
Differences Between Expected and Actual Experience
Differences Between Expected and Actual
Investment Earnings
Differences between Employer's Contributions and
Proportionate Share of Contributions
Change in Employer's Proportion
Pension Contributions Made Subsequent to
Measurement Date
Total
(64)
Deferred
Outflows of
Resources
$ 180,947
608,689
405,294
2,122,806
286,885
1,311 ,789
$ 4 916 410
$
Deferred
Inflows of
Resources
23,751
532,761
1,520,313
$ 2,076,825

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 11 DEFINED BENEFIT PENSION PLANS (CONTINUED)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pension (Continued) Pension Expense and Deferred Outflows and Inflows of Resources (Continued) $1 ,311 ,789 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, 2026. Differences between projected and actual investment earnings are amortized on a five-year straight-line basis and all other amounts are amortized over the expected average remaining service lives of all members that are provided with benefits. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Fiscal Year Ending June 30.
2026
2027
2028
2029
Total
Miscellaneous
Plan
$ 636,386
1,083,526
(53,227)
(138,890)
$ 1,527,796
Sensitivity of the City's Proportionate Share of the Net Pension Liability to Changes in the Discount Rate
The following presents the City's proportionate share of the net pension liability of the Plan as of the measurement date, calculated using the discount rate of 6.90%, 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 (5.90%) or 1-percentage-point higher (7.90%) than the current rate:

Plan's Net Pension Liability (Asset)
Pension Plan Fiduciary Net Position
1 % Decrease to
Discount Rate
(5.90%)
$ 13,911,328
Current Discount
Discount Rate
(6.90%)
$ 7 040 175
1 % Increase to
Discount Rate
(7.90%)
$ 1,384,205
Detailed information about the plan's fiduciary net position is available in the separately issued CalPERS' financial report and can be obtained from CalPERS' website under Forms and Publications.

Payable to the Pension Plan
At June 30, 2025, the City had no outstanding amount of contributions to the miscellaneous cost-sharing pension plans required for the year ended June 30, 2025. (65)

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 12 OTHER POSTEMPLOYMENT BENEFITS
A. General Information About the Other Postemployment Benefits (OPEB) Plan Plan Description
The City provides postretirement medical benefits to employees who retire directly from the City under CalPERS under a single employer defined benefit postemployment benefits plan. Eligible retirees can continue participation in the City's medical plans (PEMHCA). For miscellaneous retirees, the City contributes up to a capped dollar amount which varies by bargaining unit, medical coverage, and years of service.

The City has not established a trust for the purpose of holding assets accumulated for plan benefits.

Eligibility
Participants directly retire from the City under CalPERS plan at age 50 and 52 for classic members and PEPRA members, respectively or retire due to disability retirement.

Covered Participants
At June 30, 2025, the measurement date, the following numbers of participants were covered by the benefit terms:

Active Employees
Inactive Currently Receiving Benefits
Inactive Entitled to But Not Yet Receiving Benefits
Total
Contributions
80 23
31 134
The obligation of the City to contribute to the plan is established and may be amended by the City Council. For the year ended June 30, 2025 the City made contributions on a pay-as-you-go basis.

B. Total OPEB Liability
The City's total OPEB liability was measured as of June 30, 2025, and the total OPEB liability was determined by an actuarial valuation as of June 30, 2024, rolled forward to June 30, 2025, using standard updated procedures.
(66)

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 12 OTHER POSTEMPLOYMENT BENEFITS (CONTINUED)
B. Total OPEB Liability (Continued)
Actuarial Methods and Assumption Used to Determined Total OPES Liability The total OPES liability was determined using the following actuarial methods and assumptions, applied to all periods included in the measurement period, unless otherwise specified:

Contribution Policy
Discount Rate
Inflation
Mortality, Retirement,
Disability, and Termination
Mortality Improvement
Salary Increases
Medical Trend
PEMHCA Minimum Increase
Healthcare Participation at Retirement
Spouse Coverage
Medicare Eligible
Change of Assumptions
No Pre-Funding

5.20% at June 30, 2025
(Bond Buyer 20-Bond Index)

2.50% Annually
CalPERS 2000-2019 Experience Study
Mortality Projected Fully Generational with
Scale MP-2021
Aggregate - 2.75% Annually
Merit- CalPERS 2000-2019 Experience Study
Non-Medicare - 7.90% for 2026, Decreasing to
an Ultimate Rate of 3.45% in 2076
Medicare - 6.90% for 2026, Decreasing to
an Ultimate Rate of 3.45% in 2076

3.50% Annually
Actives - 50%
Retirees - Current Election
Actives: Current Election if Covered, 80% if Waived
Retirees: Current Election
100%
During the measurement period June 30, 2025, the accounting discount rate was updated based on the municipal bond rate.

Discount Rate
The discount rate used to measure the total OPES liability was 5.20%. The discount rate is based on the yield or index rate for 20-year, tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher (or equivalent quality on another rating scale).
(67)

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 12 OTHER POSTEMPLOYMENT BENEFITS (CONTINUED)
B. Total OPEB Liability (Continued)
Change in Total OPES Liabili!Y
Total 0PEB
Liability
Balance at July 1, 2024 (Measurement Date) $ 1,924,375
Changes Recognized for the Measurement Period:

Service Cost 135,399
Interest on the Total 0PEB Liability 79,210
Changes of Assumptions (407,985)
Difference Between Expected
and Actual Experience 53,704
Benefit Payments, Including Refunds of Employee (88,501) Net Changes During July 1, 2024 to
June 30, 2025 (228,173)
Balance at June 30, 2025 (Measurement Date) $ 1,696,202 Sensitivi!Y of the Total OPEB Liability to Change in the Discount Rate The following presents the total OPES liability of the City, as well as what the City's total OPEB liability would be if it were calculated using a discount rate that is 1-percentage­ point lower (4.20%) or 1-percentage- point higher (6.20%) than the current discount rate:

Plan's Total 0PEB Liability
1 % Decrease to
Discount Rate
(4.20%)
$ 1,914,131
Current Discount
Discount Rate
(5.20%)
$ 1,696,202
1 % Increase to
Discount Rate
(6.20%)
$ 1.515,913
Sensitivi!Y of the Total OPES Liability to Changes in the Health Care Cost Trend Rates The following presents the total OPES liability of the City, as well as what the City's total OPES liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower (Non-Medicare - 6.90% to 2.45% and Medicare - 5.90% to

2.45%) or 1-percentage-point higher (Non-Medicare - 8.90% to 4.45% and Medicare -

7.90% to 4.45%) than the current healthcare cost trend rates:

Plan's Total 0PEB Liability
1 % Decrease to
Current Trend
$ 1,473,020
(68)
Current Trend
$ 1,696,202
1 % Increase to
Current Trend
$ 1,974,859

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 12 OTHER POSTEMPLOYMENT BENEFITS (CONTINUED)
C. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB
For the measurement period ended June 30, 2025, the City recognized OPEB expense of $116,656. At June 30, 2025, the City reported deferred outflows and inflows of resources related to OPEB from the following sources:

Difference Between Expected and Actual Experience
Changes in Assumptions
Total
Deferred
Outflows of
Resources
$ 112,937
192,767
$ 305 704
Deferred
Inflows of
Resources
$ 361,909
824,564
$ 1,186,473
Amounts are amortized over the expected average remaining service lives of all members that are provided with benefits and will be recognized in the future OPEB expense as follows:

Fiscal Year Ending June 30,
2026
NOTE 13 CONTINGENCIES
2027
2028
2029
2030
Thereafter
Total
Deferred
Outflows
(Inflows)
of Resources
OPEB Plan
$ (98,514)
(94,546)
(97,644)
(126,300)
(163,760)
(300,005)
$ (880,769)
The City is involved as a defendant in various legal proceedings. While it is not feasible to predict or determine the outcome in these cases, it is the opinion of the City that the outcome of the majority of these cases will have no material adverse effect on the financial position of the City.

The City has received state and federal funds for specific purposes that are subject to review by the granter agencies. Although such audits could generate expenditures disallowances under the terms of the grants, it is believed that any required reimbursements, if any, will not be material.
(69)

CITY OF LAGUNA NIGUEL

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025
NOTE 14 OUTSTANDING COMMITMENTS
Prior to the end of the fiscal year, the City awarded several consulting and capital project contracts. At June 30, 2025, the unspent balance of the significant contracts is as follows:

Projects with Outstanding Contracts
Golden Lantern Median Modifications
La Paz Road Mobility Enhancements
Alicia Parkway Regional Traffic Signal Synchronization
Total
(70)
Balance
$ 346,948
520,323
683,070
$ 1,550,341

REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED)
(71)

REVENUES
Taxes
Licenses and Permits
Intergovernmental
Charges for Services
Fines and Forfeitures
Use of Money and Property (Loss)
Leases
Miscellaneous
Total Revenues

EXPENDITURES
Current:

General Government
Public Safety
Community Development
Parks and Recreation
Public Works
Capital Outlay
Debt Service:

Principal
Interest
Total Expenditures

CITY OF LAGUNA NIGUEL

BUDGETARY COMPARISON SCHEDULE

GENERAL FUND
YEAR ENDED JUNE 30, 2025
Budget Amounts
Ori9inal Final
$ 47,033,960 $ 47,033,960
3,797,800 3,797,800
160,500 160,500
1,328,450 1,328,450
512,000 512,000
1,550,000 1,550,000
360,252 360,252
521,375 1,521,375
55,264,337 56,264,337
7,248,093 7,132,071
19,199,874 18,682,888
5,288,736 4,920,923
4,502,927 4,726,321
16,044,909 15,602,241
521,760 1,509,615
209,120
23,121
52,806,299 52,806,300

EXCESS OF REVENUES OVER (UNDER)
EXPENDITURES 2,458,038

OTHER FINANCING SOURCES (USES)
Transfer In
Transfers Out (2,258 ,038)
Total Other Financing Sources (Uses) (2,258,038)
NET CHANGE IN FUND BALANCE 200,000
Fund Balance - Beginning of Year 53,308,706
FUND BALANCE - END OF YEAR $ 53,508,706
See accompanying Note to Required Supplementary Information. (72)
3,458,037
439,047
(6,005,254)
{5,566,207)
(2,108,170)
53,308,706
$ 51,200,536
Variance with
Final Budget
Actual Positive
Amounts (Negative)
$ 46,878,426 $ (155,534)
2,462,182 (1,335,618)
306,735 146,235
1,502,752 174,302
274,729 (237,271)
3,452,845 1,902,845
423,765 63,513
2,024,081 502,706
57,325,515 1,061,178
6,741,141 390,930
18,642,258 40,630
4,827,986 92,937
4,472,023 254,298
15,319,971 282,270
1,460,240 49,375
209,120
23,121
51 ,695,860 1,110,440
5,629,655 2,171,618
203,845 (235,202)
(3,039,087) 2,966,167
(2,835,242) 2,730,965
2,794,413 4,902,583
53,308,706
$ 56,103,119 i 4,902,583

CITY OF LAGUNA NIGUEL

BUDGETARY COMPARISON SCHEDULE

MISCELLANEOUS GRANTS SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2025
Budget Amounts
Origlnal

REVENUES
Intergovernmental $ 9,277,730

EXPENDITURES
Current:

Community Development 528,616

EXCESS OF REVENUES OVER
EXPENDITURES 8,749,114

OTHER FINANCING SOURCES (USES)
Transfers Out (5,313,796)
NET CHANGE IN FUND BALANCE 3,435,318
Fund Balance (Deficit) - Beginning of Year (315. 152)
FUND BALANCE (DEFICIT) - END OF YEAR $ 3,120,1 66
See accompanying Note to Required Supplementary Information . (73)
Final
$ 11 ,059,244
528,616
10,530,628
(7,095,310)
3,435,318
(315,152)
$ 3,120,166
Actual
Amounts
$ 1,456,907
184,700
1,272,207
(1,195,206)
77,001
(315,152)
$ (238. 151 l
Variance with
Final Budget
Positive
(Negative)
$ (9,602,337)
343,91 6
(9,258,421)
5,900,104
(3,358,317)
$ (3,358,317}

CITY OF LAGUNA NIGUEL

NOTE TO REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2025
NOTE 1 BUDGET POLICY AND CONTROL
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. Annual budgets are adopted for the General Fund, all Special Revenue Funds, and the Capital Projects Fund. The City Manager and Director of Finance prepare and submit a proposed budget to the City Council. The City Council conducts a noticed public hearing to invite public input before the City Council conducts its detailed review of the proposed budget at a special meeting where additional public input is invited. After reviewing the proposed budget and making such revisions that it deems advisable, the City Council approves each year's budget by resolution before the first meeting of the new fiscal year. The City Council has the legal authority to amend the budget at any time during the fiscal year.

The City Manager is authorized to adjust appropriations within or between functions or programs as long as the transfer does not increase the adopted annual budget appropriations. Adjustments to appropriations between funds require City Council approval.

Transfers of each or unappropriated fund balance from one fund to another can only be made with City Council's approval. Unexpended appropriations for authorized, but uncompleted, projects in the Capital Improvement Program budget and some unexpended operating appropriations can be carried forward to the next succeeding budget year upon recommendation of the City Manager. All other appropriations lapse at the end of the fiscal year.
(74)

CITY OF LAGUNA NIGUEL

SCHEDULE OF THE CITY'S PROPORTIONATE SHARE OF THE

NET PENSION LIABILITY AND RELATED RATIOS

LAST TEN FISCAL YEARS
Measurement Period June 30. 2015 June 30, 2016 June 301 2017 June 30. 2018 City's Proportion of the Net Pension Liability 0.06905% 0.07545% 0.07849% 0.07924% City's Proportionate Share of the Net Pension Liability $ 4,739,802 $ 6,528,796 $ 7,784,390 $ 7,635,951 City's Covered Payroll $ 5,256,476 $ 5,508,425 $ 5,759,712 $ 6,079,244 City's Proportionate Share of the Net Pension Liability as a Percentage of Covered Payroll 90.17% 118.52% 135,15% 12561% Plan's Proportionate Share of the Fiduciary Net Position as a Percentage of the Total Pension Liability 83.02% 7849% 77.30% 78.97% Measurement Period June 30, 2020 June 30, 2021 June 30, 2022 June 30, 2023 City's Proportion of the Net Pension Liability 0.08621% 0.09199% 0.09845% 0.14730% City's Proportionate Share of the Net Pension Liability $ 9,380,067 $ 4,974,843 $ 11,371,523 $ 7,365,509 City's Covered Payroll $ 6,477,797 $ 6,234,178 $ 6,854,621 $ 6,969,135 City's Proportionate Share of the Net Pension Liability as a Percentage of Covered Payroll 144.80% 79.80% 165.90% 105.69% Plan's Proportionate Share of the Fiduciary Net Position as a Percentage of the Total Pension Liability 77.71% 90.49% 78.19% 84.74% Notes to Schedules:

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

Changes of Assumptions: In 2022 (measurement date), the accounting discount rate was reduced from 7.15% to 6.90% and the inflation rate decreased from 2.50% to 2.30%. None in 2021, 2020, and 2019. In 2018, demographic assumptions and inflation were changed in accordance to CalPERS Experience Study and Review of Actuarial Assumptions December 2017. In 2017, the accounting discount rate was reduced from 7 .65% to 7 .15%.
(75)
June 30 2019

0.08299%
$ 8,504,317
$ 6,140,757
138.49%

77.49%
June 301 2024
0 14556%
$ 7,040,175
$ 7,334,693

95.98%

84.74%

CITY OF LAGUNA NIGUEL

SCHEDULE OF CONTRIBUTIONS - PENSION

LAST TEN FISCAL YEARS
Fiscal Year 2015-16 2016-17 2017-18
Actuarially Determined Contribution:

Miscellaneous Tier 1 Plan $ 342,524 $ 322,907 $ 260,533 Miscellaneous Tier 2 Plan 58,843 81,272 88,913
Miscellaneous PEPRA 52,055 73 523 122.796
Total Actuarially Determined Contribution 453,422 477,702 472,242 Contribution in Relation to the Actuarially
Determined Contribution 453,422 710,160 768,939
Contribution Deficiency (Excess) § {232,458} s {296 697! Covered Payroll $ 5,508,425 $ 5,759,712 $ 6,079,244
Contributions as a Percentage of Covered Payroll 8.23% 12.33% 12.65% Fiscal Year 2020-21 2021-22 2022-23
Actuarially Determined Contribution:

Miscellaneous Tier 1 Plan $ 790,976 $ 1,025,893 $ 1,067,671 Miscellaneous Tier 2 Plan 119,672 88,169 119,663
Miscellaneous PEPRA 210,519 199 567 241,197
Total Actuarially Determined Contribution 1,121,167 1,313,629 1,428,531 Contribution in Relation to the Actuarially
Determined Contribution 1 120 667 1 275 264 6,181,424
Contribution Deficiency (Excess) ! 500 § 38,365 s {4 zs2 893} Covered Payroll $ 6,234,178 $ 6,854,621 $ 6,969,135
Contributions as a Percentage of Covered Payroll 17.98% 18.60% 88.70% Notes to Schedule of Plan Contributions:

Valuation Date June 30, 2021
Methods and Assumptions Used to Determine Contribution
Rates:

Actuarial Cost Method Entry Age Normal
Amortization Method/Period Level Percent of Payroll
Asset Valuation Method Fair Value
Inflation 2.30%
Salary Increases Varies by Entry Age and Service
Payroll Growth 2.80%
2018-19 2019-20
$ 777,461 $ 862,885
82,534 118,559
82,944 116 294
942,939 1,097,738
920,585 1,035,270
! 22 354 s 62468
$ 6,140,757 $ 6,477,797

14.99% 15,98%
2023-24 2024-25
$ 628,010 $ 778,003
118,743 136,770
331,396 397,016
1,078,149 1,311,789
1 078 149 1 311.789
$ 7,334,693 $ 8,057,562

14.70% 16.28%
Investment Rate of Return 6.80%, net of pension plan investment and administrative expense; including inflation.

Retirement Age Classic Tier 1: 2% @ 55, Classic Tier 2: 2% @ 60, PEPRA: 2% @ 62.

Mortality Based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board.

Other Information:

For changes to previous year's information, refer to past GASB 68 reports. (76)

CITY OF LAGUNA NIGUEL

SCHEDULE OF THE CHANGES IN TOTAL OPEB LIABILITY AND RELATED RATIOS LAST TEN FISCAL YEARS,.

Measurement Period June 30. 2016 June 30 2019 June 30, 2020 June 30. 2021 June 301 2022 Total OPEB Liability:

Service Cost $ 164,306 $ 159,560 $ 177,199 $ 238 ,974 $ 249,137 Interest 52,069 60,500 64,566 59,262 63,322
Changes of Assumptions (62,212) 90,002 423,242 22,375 (605,217) Differences Between Expected and
Actual Experience 172,569 (599,226)
Benefit Payments, Including Refunds of
Employee Contributions (36,705J (44,467l (46,040) (75, 176l (66,151l Net Change in Total OPEB Liability 117,460 265,595 769,536 245,453 (960,135) Total OPEB Liability - Beginning 1 308 .503 1.425 ,963 1 691 556 2 48 1,094 2,726 ,547 Total OPEB Liability - Ending $ 1 425 963 11! 1 69 1 558 s 2 481 094 $ 2,726 ,54 7 s 174 6 412 Plan Fiduciary Net Position as a Percentage
of the Total OPEB Liability 0.00% 0.00% 0.00% 0.00% 0.00% Covered Employee Payroll $ 5,927 ,346 $ 6,140,757 $ 6,392,532 $ 6,476,4 16 $ 7,098,959 Plan Net OPEB Liability as a Percentage of
Covered Employee Payroll 24.06% 27.55% 36.61% 42.10% 24.60% Measurement Period June 30, 2023 June 30, 2024 June 30, 2025 Total OPEB Liability:

Service Cost $ 139,630 $ 140,169 $ 135,399
Interest 65,606 71,671 79,210
Changes of Assumptions (29,346) (77,706) (407,965)
Differences Between Expected and
Actual Experience 53,704
Benefit Payments, Including Refunds of
Employee Contributions ;s5,955l (66,326l (66,501l
Net Change in Total OPEB Liability 110,135 67,626 (226,173) Total OPEB Liability - Beginning 1,746.412 1,1156,54,7 1,924 ,375 Total OPEB Liability - Ending (a) $ 1,856,547 $ 1,924,375 s 1,696,202 Plan Fiduciary Net Position as a Percentage
of the Total OPEB Liability 0.00% 0.00% 0.00%
Covered Employee Payroll $ 7.430,446 $ 7,645,576 $ 6.454,053 Plan Net OPEB Liability as a Percentage of
Covered Employee Payroll 24.99% 24.53% 20.06%
Historical information 1s presented only for measurement periods for which GASB 75 1s applicable. Additional years of information will be displayed as it becomes available.

Notes to Schedules:

Change in Benefit Terms: There were no changes in the benefit terms.

Changes of Assumptions : In 2022 , the discount rate changed from 3.54% to 3.65% In 2024 , discount rate was updated based on municipal bond rate as of the measurement date.

The City has not established a trust for the purpose of holding assets accumulated for plan benefits. (77)
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(78)

SUPPLEMENTARY INFORMATION
(79)
Spec~IRevenueFunds

CITY OF LAGUNA NIGUEL

NONMAJORGOVERNMENTALFUNDS
YEAR ENDED JUNE 30, 2025
State Gasoline Tax Fund (Gas Tax) - Accounts for revenues received and expenditures made for general street maintenance. Financing is provided by the City's share of state gasoline taxes collected under the Street and Highway Code, Sections 2103, 2105, 2106, 2107, and 2107.5, as well as the Road Maintenance and Rehabilitation Account funding (SB1).

Measure M - Accounts for revenues received and expenditures made for various City transportation projects fully or partially funded by Orange County Transportation Authority grants and County 1 /2 cent local fair share sales tax apportionments.

Air Quality Improvement Fund - Accounts for revenues received under AB2766 and expenditures made for air quality improvements. AB2766 was enacted to authorize air pollution control districts to impose fees on motor vehicles. The California Department of Motor Vehicles collects the fees by assessing an amount on each registered vehicle in the South Coast District.

This fee is distributed by the South Coast Air Quality Management District to local governments on a prorated basis based on population in the area.

Law Enforcement Fund - Accounts for various law enforcement revenues received and expenditures made for certain law enforcement and crime prevention expenditures for Police Services. Funding is provided by the State of California's Citizens' Option for Public Safety (COPS) program.

Community Development Block Grant Fund - Accounts for revenues received and expenditures made for Community Development Block Grant eligible grants and capital projects.

Funding is provided by the U.S. Department of Housing and Urban Development.

Senior Transportation Fund - Accounts for the proceeds and outlays as designated in the Senior Mobility Program (SMP), which is funded through the Orange County Transportation Authority from the County's local 1/2 cent transportation sales tax measure. (80)

CITY OF LAGUNA NIGUEL

COMBINING BALANCE SHEET

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2025
Special Revenue Funds
Air Quality
Gas Tax Measure M lmerovement
ASSETS
Cash and Investments $ 4,160,308 $ 1,562,117 $ 143,293
Receivables:

Accounts 99
Taxes 465,056
Interest 27,581 10,756 950
Due from Other Governments 514,051 22,378
Total Assets $ 4,653,044 $ 2,086,924 $ 166 621

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES

LIABILITIES
Accounts Payable $ 43,593 $ 151,099 $ 34,325
Due to Other Funds
Retentions Payable 9,999
Total Liabilities 53,592 151,099 34,325

DEFERRED INFLOWS OF RESOURCES
Unavailable Revenues 99 239,074 22,378
Total Deferred Inflows of Resources 99 239,074 22,378

FUND BALANCES
Restricted for:

Public Safety
Community Development
Public Works 4,599,353 1,696,751 109,918
Unassigned (Deficit)
Total Fund Balances 4,599,353 1,696,751 109,918
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances $ 4,653,044 $ 2,086,924 $ 166,621 (81)
Law
Enforcement
$ 116,809
879
$ 117,688
$ 15,833
15,833
101,855
101 ,855
$ 117,688

CITY OF LAGUNA NIGUEL

COMBINING BALANCE SHEET (CONTINUED)

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2025
Special Revenue Funds
Community
Development Senior
Block Grant T ranseortation
ASSETS
Cash and Investments $ $ 468,647
Receivables:

Accounts
Taxes
Interest 3,781
Due from Other Governments 80,905 21 ,048
Total Assets $ 80,905 $ 493,476

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, ANO FUND BALANCES

LIABILITIES
Accounts Payable $ 35,050 $ 20,925
Due to Other Funds 45,855
Retentions Payable
Total Liabilities 80,905 20,925

DEFERRED INFLOWS OF RESOURCES
Unavailable Revenues 739
Total Deferred Inflows of Resources 739

FUND BALANCES
Restricted for:

Public Safety
Community Development 472,551
Public Works
Unassigned (Deficit) (739)
Total Fund Balances (739) 472,551
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances $ 80,905 $ 493 476
(82)
Total
Nonmajor
Governmental
Funds
$ 6,451,174
99 465,056
43,947
638,382
$ 7,598,658
$ 300,825
45,855
9 999
356,679
262,290
262,290
101,855
472,551
6,406,022
(739)
6,979,689
$ 7,598,658

CITY OF LAGUNA NIGUEL

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES

NONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2025
Special Revenue Funds
Air Quality
Gas Tax Measure M lmerovement

REVENUES
Intergovernmental $ 3,578,970 $ 2,182,065 $ 85,085
Use of Money and Property 210,185 127,210 7,948
Total Revenues 3,789,155 2,309,275 93,033

EXPENDITURES
Current:

Public Safety
Community Development
Parks and Recreation
Public Works 818,715 267.470 96,480
Total Expenditures 818,715 267.470 96,480

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 2,970,440 2,041,805 (3,447)

OTHER FINANCING SOURCES (USES)
Transfers Out (1 ,571 ,535) (2,836,094)
Total Other Financing Sources (Uses) (1,571,535) (2,836.0941 NET CHANGES IN FUND BALANCES 1,398,905 (794,289) (3,447) Fund Balances (Deficit) - Beginning of Year 3,200,448 2,491,040 113,365 FUND BALANCES (DEFICIT) - END OF YEAR $ 4,599,353 $ 1,696,751 $ 109,918 (83)
Law
Enforcement
$ 195,231
6,779
202,010
190,000
190,000
12,010
12,010
89,845
$ 101 855

CITY OF LAGUNA NIGUEL

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES (CONTINUED)

NONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2025
Special Revenue Funds
Community
Development Senior
Block Grant Transeortation

REVENUES
Intergovernmental $ 165,531 $ 117,841
Use of Money and Property 29,583
Total Revenues 165,531 147,424

EXPENDITURES
Current:

Public Safety
Community Development 116,439
Parks and Recreation 199,405
Public Works
Total Expenditures 116,439 199,405

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 49,092 (51,981)

OTHER FINANCING SOURCES (USES)
Transfers Out (47,349)
Total Other Financing Sources (Uses) (47,349)
NET CHANGES IN FUND BALANCES 1,743 (51 ,981)
Fund Balances (Deficit) - Beginning of Year (2,482) 524,532 FUND BALANCES (DEFICIT) - END OF YEAR $ (739) $ 472,551 (84)
Total
Nonmajor
Governmental
Funds
$ 6,324,723
381 ,705
6,706,428
190,000
116,439
199,405
1,182,665
1,688,509
5,017,919
(4,454,978)
(4,454,978)
562,941
6,416,748
$ 6,979,689

CITY OF LAGUNA NIGUEL

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL

REVENUES
Intergovernmental
Use of Money and Property
Total Revenues

EXPENDITURES
Current:

Public Works

EXCESS OF REVENUES OVER

EXPENDITURES

OTHER FINANCING USES
Transfers Out
Total Other Financing Uses

NET CHANGES IN FUND BALANCE
Fund Balances - Beginning of Year

FUND BALANCES - END OF YEAR

GAS TAX SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2025
Budget Amounts
Original Final
$ 3,446,786 $ 3,446,786
75,000 75,000
3,521,786 3,521,786
830 000 830,000
2,691,786 2,691,786
{450,000) (1,571,535)
(450,000) (1,571,535)
2,241,786 1,120,251
3,200,448 3,200,448
$ 5,442234 $ 4,320,699
(85)
Variance with
Final Budget
Actual Positive
Amounts (Negative)
$ 3,578,970 $ 132,184
210,185 135,185
3,789,155 267,369
818,715 11 ,285
2,970,440 278,654
p ,571 ,535)
(1,571,535)
1,398,905 278,654
3,200,448
$ 4,599,353 $ 278,654

CITY OF LAGUNA NIGUEL

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL

MEASURE M SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2025
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)

REVENUES
Intergovernmental $ 1,828,677 $ 1,828,677 $ 2,182,065 $ 353,388 Use of Money and Property 30,000 30,000 127,210 97,210
Total Revenues 1,858,677 1,858,677 2,309,275 450,598

EXPENDITURES
Current:

Public Works 178,012 267,470 267,470

EXCESS OF REVENUES OVER
EXPENDITURES 1,680,665 1,591,207 2,041,805 450,598

OTHER FINANCING USES
Transfers Out (1,500,000) (2,836.094) (2,836,094)
Total Other Financing Uses (1,500,000) (2,836,094) (2,836,094) NET CHANGES IN FUND BALANCE 180,665 (1,244,887) (794,289) 450,598 Fund Balances - Beginning of Year 2,491,040 2,491,040 2,491,040 FUND BALANCES - END OF YEAR $ 2,671 705 $ 1,246,153 $ 1,696,751 $ 450 598 (86)

CITY OF LAGUNA NIGUEL

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL

AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2025
Budget Amounts Actual
Original Final Amounts

REVENUES
Intergovernmental $ 85,000 $ 85,000 $ 85,085
Use of Money and Property 2,500 2,500 7,948
Total Revenues 87,500 87,500 93,033

EXPENDITURES
Current:

Public Works 100,000 100,000 96,480
NET CHANGES IN FUND BALANCE (12,500) (12,500) (3,447)
Fund Balances - Beginning of Year 113,365 113,365 113,365 FUND BALANCES - END OF YEAR $ 100 865 $ 100,865 $ 109 918 (87)
Variance with
Final Budget
Positive
(Negative)
$ 85
5,448
5,533
3,520
9,053
$ 9,053

CITY OF LAGUNA NIGUEL

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL

LAW ENFORCEMENT SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2025
Budget Amounts Actual
Ori9inal Final Amounts

REVENUES
Intergovernmental $ 175,000 $ 175,000 $ 195,231
Use of Money and Property 2,500 2,500 6,779
Total Revenues 177,500 177,500 202,010

EXPENDITURES
Current:

Public Safety 190,000 190,000 190,000
NET CHANGES IN FUND BALANCE (12,500) (12,500) 12,010
Fund Balances - Beginning of Year 89,845 89,845 89,845
FUND BALANCES - END OF YEAR $ 77 345 $ 77 345 $ 101,855 (88)
Variance with
Final Budget
Positive
{Ne9ative)
$ 20,231
4,279
24,510
24,510
$ 24,510

CITY OF LAGUNA NIGUEL

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL

COMMUNITY DEVELOPMENT BLOCK GRANT SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2025
Variance with
Final Budget
Budget Amounts Actual Positive
Ori9inal Final Amounts (Ne9ative)

REVENUES
Intergovernmental $ 430,355 $ 430,355 $ 165,531 $ (264,824)

EXPENDITURES
Current:

Community Development 114,100 116,753 116,439 314

EXCESS OF REVENUES OVER
EXPENDITURES 316,255 313,602 49,092 (264,510)

OTHER FINANCING USES
Transfers Out (229,343) (229,343) (47,349) 181,994
NET CHANGES IN FUND BALANCE 86,912 84,259 1,743 (82,516) Fund Balances (Deficit) - Beginning of Year (2,482) (2,482) (2,482) FUND BALANCES (DEFICIT) - END OF YEAR $ 84,430 $ 81 ,777 $ (739) $ (82,516) (89)

CITY OF LAGUNA NIGUEL

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL

SENIOR TRANSPORTATION SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2025
Budget Amounts Actual
Original Final Amounts

REVENUES
Intergovernmental $ 120,000 $ 120,000 $ 117,841
Use of Money and Property 10 000 10,000 29,583
Total Revenues 130,000 130,000 147,424

EXPENDITURES
Current:

Parks and Recreation 170,500 120,860 199,405
NET CHANGES IN FUND BALANCE (40,500) 9,140 (51,981)
Fund Balances - Beginning of Year 524,532 524,532 524,532 FUND BALANCES - END OF YEAR $ 484 032 $ 533.672 $ 472,551 (90)
Variance with
Final Budget
Positive
(Negative)
$ (2,159)
19,583
17,424
(78,545)
(61,121)
$ (61,121)

CITY OF LAGUNA NIGUEL

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL

EXPENDITURES
Capital Outlay

OTHER FINANCING SOURCES
Transfers In

NET CHANGES IN FUND BALANCE
Fund Balances - Beginning of Year

FUND BALANCES - END OF YEAR

CITY CAPITAL PROJECTS FUND
YEAR ENDED JUNE 30, 2025
Budget Amounts
Original Final
$ 10,147,139 $ 23,578,567
9,751,177 17,679,935
(395,962) (5,898,632)
2,232,110 2,232,110
$ 1,836,148 $ (3,666,522)
(91)
Variance with
Final Budget
Actual Positive
Amounts {Negativel
$ 8,487,495 $ 15,091,072
8,689,271 ,a.990,664l
201,776 6,100,408
2,232,110
$ 2,433.886 $ 6,100,408
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(92)

STATISTICAL SECTION (UNAUDITED)
(93)
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(94)

CITY OF LAGUNA NIGUEL

STATISTICAL SECTION OVERVIEW (UNAUDITED)
YEAR ENDED JUNE 30, 2025
This part of the City's annual comprehensive 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 government's overall financial health.

Contents Page
Financial Trends Information - These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. 96
Revenue Capacity Information - These schedules contain information to help the reader assess the City's most significant local revenue source, property taxes. 104 Debt Capacity Information - 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. 110
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. 114
Operating Information - These schedules contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services the City provides and the activities it performs. 117 (95)
City of Laguna Niguel
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
2016 2017 2018 2019 2020
Governmental activities:

Net investment in capital assets $ 564,600,741 $ 566,781,948 $ 565,916,027 $ 579,093,630 $ 588,977,831 Restricted:

Pension $ $ $ $ $ 153,013
Public safety 85,186 71,752 49,739 62,619 72,830
Public works 290,728 142,399 587,123 4,107,797 5,614,824 Community development 590,853 440,446 483,737 158,702 216,803 Air quality improvement 400,601 469,297 513,707 565,153 Total restricted $ 1,367,368 $ 1,123,894 $ 1,634,306 $ 4 894 271 $ 6,057,470 Unrestricted 76,932.061 67,674,106 67,449,901 50,029,493 32,595,299 Total governmental activities net position $ 642,900,170 $ 635,579,948 $ 635,000,234 $ 634,017,394 $ 627,630,600 The City does not have any Business-Type activities.

Therefore, all governmental activities comprise the primary government of the City of Laguna Niguel. (96)
City of Laguna Niguel
Net Position by Component (Continued)
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
2021 2022 2023 2024 2025
Governmental activities :

Net investment in capital assets $ 579,071,088 $ 572.776,21 I $ 571,646,645 $ 570,027,950 $ 559, 750,5 I 8 Restricted :

Pension $ 692,039 $ 916,958 $ 2,004,472 $ 2,179,843 $ 2,419,141 Public safety 84,285 34,327 48,977 89,845 101,855
Public works 5,718,205 6,382,693 6,567,634 11,667,794 11,016, 168 Community development 304,171 393,984 475,183 842,166 472,551 Air quality improvement
Total restricted $ 6,798,700 $ 7,727,962 $ 9,096,266 $ 14,779,648 $ 14,009,715 Unrestricted 35,742,243 38,117,655 43.826.907 44,674,514 46,471.266 Total governmental activities net position $ 621,612,031 $ 618.621.828 $ 624,569,818 $ 629,482,112 $ 620,231,499 The City does not have any Business-Type activities.

Therefore, all governmental activities comprise the primary government of the City of Laguna Niguel. (97)
City of Laguna Niguel
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
2016 2017 2018 2019 2020
Expenses:

General government 5,049,643 4,721,188 5, 105,212 5,087,668 6,128,946 Public safety 11,778,228 13,034,018 14,741,788 15,714,696 16,199,542 Community development 3,903,064 3,125,278 3,370,376 3,225,177 3,652,984 Parks and recreation 5,022,013 6,655,833 6,707,133 6,049,242 7,079,349 Public works 15,402,736 23,735,075 22,324,184 19,227,179 22,205,098 Interest expense 27,437 26,770
Total expenses 41,155,684 51.271.392 52,248,693 49,331,399 55,292,689 Program Revenues:

Charges for services :

General government 223,747 1,850 1,675
Public safety 297,386 334,475 353,257 456,443 336,530
Community development 6,931,625 2,058,550 6,150,591 2,131,215 2,288,391 Parks and recreation 1,087,258 1,162,176 1,204,757 987,371 660,087 Public works 18,389 33,407 16,776 241,672 209,672
Operating grants and contributions 2,917,219 2,660,052 3,376,124 4,037,554 4,401,389 Capital grants and contributions 3,903,895 1,387,051 2,126,133 453,036 273,159 Total program revenues 15,379,519 7,635,711 13,227,638 8,309,141 8,170,903 Net (expenses)/revenues (25,776,165) (43,635,681) (39,021,055) (41,022,258) (47,121,786) General Revenues:

Taxes:

Property taxes 19,965,053 20,786,789 21,968,448 22,749,160 23,584,278 Sales taxes 12,244,172 11,448,371 11,223,516 11,831,049 12,229,918 Franchise fees 2,519,116 2,270,993 2,362,138 2,400,540 2,359,348 Other taxes 642,043 625,562 701,611 542,175 589,705
Motor vehicle license fee 26,160 29,631 35,104 31,381 52,828 Use of money and property (loss) 1,372,860 618,864 1,094,790 1,873,121 1,036,458 Other 476,168 535,249 589,613 611 ,992 882,457
Total general revenues 37,245,572 36,315,459 37,975,220 40,039,418 40,734,992 Changes in net position 11.469.407 (7,320,222) (1,045,835) (982,840) (6.386 .794) The City does not have any Business-Type activities.

Therefore, all governmental activities comprise the primary government of the City of Laguna Niguel. (98)
City of Laguna Niguel
Changes in Net Position (Continued)
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
2021 2022 2023 2024 2025
Expenses :

General government 6,163,102 6,588,919 10,894,992 7,658,663 8,095,895 Public safety 16,499,129 16,899,038 17,480,349 17,891,745 18,901,965 Community development 3,812,834 5,081,656 3,629,822 5,410,121 5,287,903 Parks and recreation 5,400,764 12,841,310 7,951,880 6,892,680 6,975,454 Public works 24,756,891 17,077,691 17,368,965 22,934,310 35, 173,678 Interest expense 22,892 23,753 18,383 18,251 23,121
Total expenses 56,655,612 58,512,367 57,344,391 60,805,770 74,458,016 Program Revenues:

Charges for services:

General government 1,500 895 775 1,100
Public safety 295,071 601,684 400,866 267,507 254,552
Community development 1,845,081 3,740,831 3,656,316 4,192,344 2,147,627 Parks and recreation 508,182 970,591 1,205,036 I ,331,529 1,502,552 Public works 200,655 227,387 234,857 370,717 334,732
Operating grants and contributions 5,776,718 2,539,129 2,888,410 3,156,932 3,039,992 Capital grants and contributions 463,305 5,070,885 7,760,533 6,487,128 4,793,363 Total program revenues 9,089,012 13,152,007 16, 146,913 15,806,932 12,073,918 Net ( expenses )/revenues (47,566,600) (45,360,360) (41,197,478) (44,998,838) (62,384,098) General Revenues:

Taxes:

Property taxes 24,630,701 25,292,654 27,072,457 28,371 ,584 29,658,031 Sales taxes 13,135,671 14,518,028 14,818,183 14,209,464 14,178,832 Franchise fees 2,352,241 2,348,798 2,546,264 2,657,013 2,320,723 Other taxes 851,034 1,085,753 603,923 722,135 720,840
Motor vehicle license fee 47,905 75,286 66,153 79,921 101,687 Use of money and property (loss) 12,375 (1,917,952) 1,318,001 2,854,024 3,872,709 Other 518,104 967,590 720,487 1,016,991 2,280,663
Total general revenues 41 ,548,031 42,370,157 47,145,468 49,911,132 53,133,485 Changes in net position (6,018,569) (2,990,203) 5 947,990 4,912,294 (9,250,613) The City does not have any Business-Type activities.

Therefore , all governmental activities comprise the primary government of the City of Laguna Niguel. (99)
City of Laguna Niguel
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
2016 2017 2018 2019 2020
General Fund
Nonspendable 250,345 514,590 141,903 909,697 698,381
Restricted 153,013
Committed 57,492,610 51,733,497 49,216,920 31 ,822,082 40,818,817 Assigned 25,158,015 21,555.152 24,965,800 24,714,780
Total General Fund 82,900.970 73,803,239 74,324,623 57,446,559 41,670,211 All other governmental funds
Nonspendable 137,000 153,207 157,740 145,462
Restricted 1,238,087 964,646 1,465,968 4,834,624 5,668,141 Unassigned (3,825,510) (1 ,558,827) (367,234) (10,816) (1 53.879) Total all other governmental funds (2,450,423) (440,974) 1,256,474 4,969,270 5,514,262 (100)
City of Laguna Niguel
Fund Balances of Governmental Funds (Continued)
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
2021 2022 2023 2024 2025
General Fund
Non spendable 75,745 111,990 191,832 173,938 224,855
Restricted 692,039 916,958 2,004,472 2,179,843 2,419,141 Committed 45,229,355 46,679,510 47,494,533 50,732,702 53,174,027 Assigned 349,954 782,099 628,821 222.223 285,096
Total General Fund 46,347,093 48,490,557 50,319,658 53,308,706 56,103,119 All other governmental funds
Nonspendable 64,900 64,094 77,036 17,684 19,459
Restricted 5,594,900 6,811,004 7,091,794 8,633,656 9,394,855 Unassigned (58,477) (276,42 1) (289,193) (317,634) (238,890) Total all other governmental funds 5,601,323 6,598,677 6,879,637 8,333,706 9,175,424 (101)
City of Laguna Niguel
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
2016 2017 2018 2019 2020
Revenues:

Taxes 35.446,201 35,577,102 36,255,713 37.522,924 38,763,249 Licenses and permits 3,548,393 2,052,662 2,841,459 2,346,727 2,426,416 Intergovernmental 5,590,258 6,259,760 6,672,937 4,985,890 4,518,791 Charges for services 4,105,706 1,214,619 4,543,201 989,221 661,762 Fines and forfeitures 297,239 334,394 353,041 460,296 352,064 Use of money and property (loss) 1,372,862 618,870 1,087,116 2,239,707 1,413,887 Leases
Contributions 6,440 9,820 41,153 33,747 19,340
Miscellaneous 842,297 535,249 589,613 193,546 492,781
Total revenues 51,209,396 46,602,476 52,384,233 48,772,058 48,648,290 Expenditures:

Current:

General government 4,134,758 3,948,320 4,393,163 4,334,859 4,470,422 Public safety 11,727,774 12,665,551 14,595,731 15,627,937 16,118,936 Community development 3,909,385 3,019,055 3,199,919 3,159,263 3,397,810 Parks and recreation 3,386,718 3,873,182 4,065,192 11,085,148 4,619,532 Public works 8,644,212 9,710,338 9,483,108 4,481,142 12,828,535 Capital outlay 10,752,057 20,474,312 14,406,858 23,223,090 22,419,678 Debt service:

Principal
Interest
Total expenditures 42,554,904 53,690,758 50,143,971 61,911,439 63,854,913 Excess (deficiency) ofrevenues
over (under) expenditures 8,654,492 (7,088,282) 2,240,262 (13,139,381) (1 5,206 623) Other Financing Sources (Uses):

Transfers in 10,802,763 20,246,160 14,477,949 22,769,659 22,095,320 Transfers out ( I 0,802, 763) (20,246,160) (14,499,379) (22,795,546) (22,120,053) Issuance of Subscription Payable
Total other financing sources (uses) (21.430) (25,887) (24,733) Net change in fund balances 8,654,492 (7,088,282) 2,218,832 (13,165,268) (15,231,356) Debt service as a percentage of noncapital
expenditures
(102)
City of Laguna Niguel
Changes in Fund Balances of Governmental Funds (Continued) Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
2021 2022 2023 2024 2025
Revenues:

Taxes 40,969,647 43,245,233 45,040,827 45,960,196 46,878,426 Licenses and permits 2,037,023 3,957,690 3,882,045 4,554,662 2,462,182 Intergovernmental 6,030,006 7,351,559 10,954,663 9,628,372 8,088,365 Charges for services 465,020 1,014,777 1,205,931 1,331,604 1,502,752 Fines and forfeitures 302,213 612,212 409,994 275,907 274,729 Use of money and property (loss) 437,998 (1 ,946,386) 1,243,879 2,796,346 3,834,550 Leases 451,984 471,266 467,970 423,765
Contributions
Miscellaneous 122,880 550,772 296,312 378,161 2,024.08 1 Total revenues 50,364,787 55,237,841 63,504,917 65,393.218 65,488,850 Expenditures:

Current:

General government 4,637,532 5,905,024 11,451,201 6,599,798 6,741,141 Public safety 16,431,019 16,812,695 17,515,403 17,793,906 18,832,258 Community development 3,555,966 4,952,180 4,675,676 4,929,086 5,129,125 Parks and recreation 3,488,633 3,722,525 4,249,042 4,266,972 4,671,428 Public works 12,407,056 14,997,087 15,155,681 16,836,995 16,502,636 Capital outlay 5,069,588 5,587,512 8,347,853 10,690,432 9,947,735 Debt service:

Principal 209,120
Interest 23, 121
Total expenditures 45,589,794 51,977.023 61,394,856 61,117189 62,056,564 Excess (deficiency) ofrevenues
over ( under) expenditures 4,774,993 3,260,818 2,110.061 4,276,029 3,432,286 Other Financing Sources (Uses):

Transfers in 4,872,673 4,792,500 7,668,675 11,661,147 8,893,116 Transfers out (4,883,723) (4,912,500) (7,668,675) (11,661,147) (8,689,271) Issuance of Subscription Payable 167,088
Total other financing sources (uses) (I 1,050) (120,000) 167,088 203,845 Net change in fund balances 4,763,943 3,140,818 2,110,061 4,443,117 3,636,131 Debt service as a percentage of noncapital 0.3% 0.4%
expenditures
(103)
City of Laguna Niguel
Tax Revenues by Source - Governmental Funds
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Property Taxes Sales Taxes Franchise Fees Other Taxes I Total
Year Actual % Change Actual % Change Actual % Change Actual % Change Actual % Change 2016 19,965,053 6.0% 12,244,172 6.9% 2,519,116 0.0% 642,043 Il.0% 35,370,384 5.9% 2017 20,786,789 4.1% 11,448,371 -6.5% 2,270,993 -9.8% 625,562 -2.6% 35,131,715 -0.7% 2018 21,968,448 5.7% 11,223,516 -2.0% 2,362,138 4.0% 701,611 12.2% 36,255,713 3.2% 2019 22,749,160 3.6% 11.831,049 5.4% 2,400,540 1.6% 542,175 -22. 7% 37,522,924 3.5% 2020 23,584,278 3.7% 12,229,918 3.4% 2,359,348 -1.7% 589,705 8.8% 38,763,249 3.3% 2021 24,630,701 4.4% 13,135,671 7.4% 2,352,241 -0.3% 851,034 44.3% 40,969,647 5.7% 2022 25,292,654 2.7% 14,518,028 10.5% 2,348,798 -0./% 1,085,753 27.6% 43,245,233 5.6% 2023 27,072,457 7.0% 14,818, 183 2.1% 2,546,264 8.4% 603,923 -44.4% 45,040,827 4.2% 2024 28,371,584 4.8% 14,209,464 -4.1% 2,657,013 4.3% 722,135 19.6% 45,960,196 2.0% 2025 29,658,031 4.5% 14,178,832 -0.2% 2,320,723 -12.7% 720,840 -0.2% 46,878,426 2.0% Change
20/6-2025 48.5% 15.8% -7.9% 12.3% 32.5%
1 Other Taxes includes Real Property Transfer Taxes and Transient Occupancy Taxes. (104)
Fiscal
Year Residential Commercial
2016 12,908.323.391 748,131,051
2017 13,476,324,468 810,527,445
2018 14, 170, 189,583 828,023,757
2019 14.772.757,911 848,077,767
2020 15,400,702,974 871,787,891
2021 16,007,464.645 897,926,358
2022 16,460,566,082 903,240,811
2023 17,395,760,387 929,649,358
2024 18,445,311,904 960,659,628
2025 19,277,584,159 947,016,121
Notes:

Exempt values are not included in totals.

City of Laguna Niguel
Assessed Value of Taxable Property
Last Ten Fiscal Years
Industrial Other Unsecured
133,378,348 92,189,497 136.727,885
106,755,978 89,220,631 143,473,801
130,240,687 80,636,282 153,767,064
111,794,126 108,077,098 149.085,955
115,436,254 335,849,810 209,118,079
125,099,940 351,139,057 172. 712,600
122,824,193 373,231,982 163,547,376
113,043,157 376,558,228 170,068,561
142,275,923 351,788,867 I 82,835,131
123,581,757 68,490,728 220,296,739
Taxable Total
Assessed Direct
Value Tax Rate
14,018,750,172 0.13463%
14,626,302,323 0.13463%
15,362,857,373 0.13463%
15,989,792,857 0.13463%
16,932,895,008 0.13463%
17,554,342,600 0.13463%
18,023,410,444 0.13463%
18,985,079,691 0.13463%
20,082,871,453 0.13463%
20,636,969,504 0.13463%
In 1978 the voters of the State of California passed Proposition 13 which limited taxes to a total maximum rate of I%, based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum of 2%). With few exceptions, property is only reassessed as a result of new construction activity or at the time it is sold to a new owner. At that point, the property is reassessed based upon the added value of the construction or at the purchase price (market value) or economic value of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above.

Source: Orange County Assessor 2015/ 16- 2024/25 combined tax rolls, through HdL, Coren & Cone. (105)
County
Direct
Year Rate
2016 1.00000%
2017 1.00000%
2018 1.00000%
2019 l.00000%
2020 1.00000%
2021 1.00000%
2022 1.00000%
2023 1.00000%
2024 1.00000%
2025 1.00000%
Notes:

City of Laguna Niguel
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
Overlapping Rates
Laguna Moulton
Capistrano Beach Niguel
Unified Unified Water District

0.00845% 0.01396% 0.06270%

0.00843% 0.01371% 0.09377%

0.00800% 0.01287% 0.05179%

0.00786% 0.01285% 0.06644%

0.00745% 0.01266% 0.03072%

0.00756% 0.01012% 0.00000%

0.00727% 0.01018% 0.00000%

0.00691% 0.00971% 0.00000%

0.00633% 0.00883% 0.00000%

0.00446% 0.00876% 0.00000%
Overlapping rates are those that apply to property owners within the City.

Not all overlapping rates apply to all city property owners.

Total direct rate is the weighted average of all individual direct rates applied by the City.

Saddleback
Valley South Coast
Unified Water District

0.03008% 0.00665%

0.02688% 0.00207%

0.02365% 0.00000%

0.02392% 0.00000%

0.02295% 0.00000%

0.02336% 0.00000%

0.02200% 0.00000%

0.02227% 0.00000%

0.02037% 0.00000%

0.02108% 0.00000%
(Continued)
In 1978, California voters passed Proposition 13 which set the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of any voter approved bonds.

Source: Orange County Assessor 2015/16 - 2024/25 Tax Rate Tables, through HdL, Coren & Cone (106)
City of Laguna Niguel
Direct and Overlapping Property Tax Rates (Continued)
Last Ten Fiscal Years
Overlapping Rates
Total
Direct and
Metropolitan Overlapping
Year Water District Rates
2016 0.00350% 1.12534%
2017 0.00350% 1.\4836%
2018 0.00350% 1.09981%
2019 0.00350% I.I 1457%
2020 0.00350% 1.07728%
2021 0.00350% 1.04454%
2022 0.00350% 1.04295%
2023 0.00350% 1.04239%
2024 0.00350% 1.03903%
2025 0.00700% 1.04130%
Notes:

Overlapping rates are those that apply to property owners within the City.

Not all overlapping rates apply to all city property owners .

City
Share of
Direct
Rate

0.13463%

0.13463%

0.13463%

0.13463%

0.13463%

0.13463%

0.13463%

0.13463%

0.13463%

0.13463%
Total direct rate is the weighted average of all individual direct rates applied by the City.

Total
Direct
Rates

0.10015%

0.10023%

0.10020%

0.10010%

0.09997%

0.10064%

0.10062%

0.10097%

0.10117%

0.10132%
(Concluded)
In 1978, California voters passed Proposition 13 which set the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of any voter approved bonds.

Source: Orange County Assessor 2015/16 - 2024/25 Tax Rate Tables, through HdL, Coren & Cone (107)
City of Laguna Niguel
Principal Property Taxpayers
Current Year and Nine Years Ago
2025 2016
%of %of
Total City Total City
Taxable Taxable
Assessed Estimated Assessed Assessed Estimated Assessed Tax payer Value Revenue Rank Value Value Revenue Rank Value Vilara Evergreen SPE LLC $ 169,681,334 228,442 0.82%
imt Capital VI Laguna Niguel LLC 153,250,000 206.320 2 0.74% BRE-FMCA LLC 129,534,139 174,392 3 0.64% 107,913,884 145,284 0.77% Crestavilla Propco LLC 118,866,150 160,029 4 0.58%
Sequoia Equities Inc. 98,851,791 133,084 5 0.48% 83,660,367 112,632 2 0.60% Cal I Crown Valley LLC 77,014,030 103,684 6 0.37%
Costco Wholesale Corporation 60,078,939 80,884 7 0.29% 48,136,801 64,807 5 0.34% TPG 2020-1 Owner LLC 59,261,425 79,784 8 0.29%
Seaside Meadows LLC 55,579,148 74,826 9 0.27% 46,864.598 63,094 6 0.33% TPG Acquisition LLC 55,557,432 74,797 10 0.27%
Shapell SoCal Rental Properties LLC 48,247,089 64,955 4 0.34% Rancho Niguel Office Partners 49,817,427 67,069 3 0.35% Laguna Niguel Investors No I LLC 41,681,195 56,115 7 0.30% BRE California Office Owner LLC 40,002,201 53,855 8 0.28% Ocean Ranch II 39,821,025 53,611 9 0.28%
FG Laguna Niguel Senior Apartment LP 39,365,343 52,998 10 0.28% Total $ 977.674 388 1,316,242 4.75% $ 545 509,930 $734,420 3.87% Source: Orange County Assessor 2015/2016 and 2024/2025 Combined Tax Rolls and the SBE Non Unitary Tax Roll through Hdl. Coren & Cone (108)
Fiscal Year Taxes Levied
Ended for the
June 30, Fiscal Year
2016 20,253,052
2017 21 ,044,889
2018 22,153,447
2019 22,966,722
2020 23,755,074
2021 24,748,265
2022 25,596,929
2023 27,339,653
2024 28,567,086
2025 29,915,111
Notes:

City of Laguna Niguel
Property Tax Levies and Collections
Last Ten Fiscal Years
Collected within the
Fiscal Year of the Levy
Collections in
Percentage Subsequent
Amount of Levy Years
19,817,313 97.85% I 16,490
20,646,100 98.11% 95,185
21,827,913 98.53% 85,105
22,606,099 98.43% 86,280
23,429,306 98.63% 94,1 15
24,436,951 98.74% 127,181
25,109,378 98.10% 120,526
26,659,907 97.51% 159,864
27,882,745 97.60% 135,841
29,703,806 99.29% 108,243
Total Collections to Date
Percentage
Amount of Levy
19,933,803 98.42%
20,741,285 98.56%
21,913,019 98.91%
22,692,379 98.81%
23,523,421 99.02%
24,564,132 99.26%
25,229,904 98.57%
26,819.771 98.10%
28,018,586 98.08%
29,812,049 99.66%
Tax ledgers do not identify the tax year for which delinquent taxes are paid, therefore, this schedule reflects the cumulative collections from delinquent taxes.

Source: Orange County Auditor Controller Tax Ledgers
(109)
Fiscal
Year
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Notes:

City of Laguna Niguel
Ratio of Outstanding Debt by Type
Governmental Activities
Leases
353,262
276,999
515,684
364,963
157,984
181.490
318.897
270,521
184.299
98,077
Last Ten Fiscal Years
Percentage
of Assessed
Subscriptions Property Value
167,088
44,190

0.00252%

0.00189%

0.00336%

0.00228%

0.00093%

0.00103%

0.00177%

0.00142%

0.00175%

0.00048%
Details regarding the City's outstanding debt can be found in the notes to the basic financial statements.

The City does not have any Business-Type activities. All debt is reported as governmental activities.

Per
Capita b

5.34 4.15

7.89 5.47

2.42 2.78

4.96 4.18

5.47 2.18
• See "Assessed Value of Taxable Property" schedule for assessed property value data. This ratio is calculated using assessed property value for the prior calendar year.
b See "Demographic and Economic Statistics" schedule for population data. This ratio is calculated using population as of January of each fiscal year as reported by the State Department of Finance.
(110)
City of Laguna Niguel
Direct and Overlapping Governmental Activities Debt
June 30, 2025
2024-25 Assessed Valuation : $20,635,326,693
%
DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: Total Debt 6/30/25 Applicable( I) Metropolitan Water District $ 17,155,000 0.507% $
Capistrano Unified School District School Facilities Improvement District No. I 3,327,455 24.079% Laguna Beach Unified School District 7,690,000 0.013%
Saddleback Valley Unified School District 64,475,000 0.048% TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT $
DIRECT AND OVERLAPPING GENERAL FUND DEBT:

Orange County General Fund Obligations $ 429,065,000 2.545% $ Orange County Board of Education General Fund Obligations 9,120,000 2.545% Capistrano Unified School District Certificates of Participation 17,290,000 17.026% Moulton Niguel Water District Certificates of Participation 117,810,000 42.845% City of Laguna Niguel leases and subscriptions 142,267 100.000% !TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT s
!GROSS COMBINED TOT AL DEBT II II mis
City's Share of
Debt 6/30/25
86,976
801,218
1,000
30,948
920,142
10,919,704
232,104
2,943,795
50,475,695
142,267
64,713.565
65,633,707 I
(I) 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 .
(2) Excludes tax and revenue anticipation notes, enterprise revenue. mortgage revenue and tax allocation bonds and non­ bonded capital lease obligations .

Ratios to 2024-25 Assessed Valuation:

Total Direct Debt ........................... ................................................... .... ......... ................... ..

Total Direct and Overlapping Tax and Assessment Debt ........ -..................... .

Combined Total Debt ................................................................................ ..

Source: Avenu Insights & Analytics
California Municipal Statistics, Inc
(111)

0.000%

0.004%

0.320%
2016 2017
Debt limit $525,703 $ 546.443
Debt applicable
to limit
Legal debt
margin 525,703 546,443
Total debt
applicable to the
limit as a
percentage of
debt limit
City of Laguna Niguel
Legal Debt Margin Information
Last Ten Fiscal Years
(dollars in thousands)
Legal Debt Margin Calculation for Fiscal Year 2025
2018 2019
$573,609 $597,132
573,609 597,132
Assessed value
Debt limit (3. 75% of assessed value)
Debt applicable to limit
Legal debt margin
2020 2021 2022
$634,984 $658,288 $675,878
634,984 658,288 675,878
$
$
2023 2024
$711,940 $753,108
658,288 753,108
20,636,970
773,886
773.886
2025
$773,886
773,886
The general laws of the State of California for municipalities provide for a legal debt limit of 15% of gross assessed valuation. However, this provision was enacted when assessed valuation was established based on 25% of market value. Effective with FY 1981-82, taxable property is assessed at I 00% of market value. Although the debt limit provision has not been amended by the State since this change, the percentage has been proportionately modified to 3.75% for the purpose of this calculation for the consistency with the original intent of the State's debt limit. (112)
City of Laguna Niguel
Demographic and Economic Statistics
Last Ten Fiscal Years
Fiscal Personal Income Per Capita Taxable Sales Registered Housing Year Population d (in thousands) d Income d Per Capita • Voters Units 2016 66,142 3,327,443 50,308 17,724 39,915 25,458
2017 66,689 3,337,813 50,050 17,167 37,397 25,884
2018 65,377 3,380,822 51,713 17,167 40,188 25,888
2019 66,748 3,496,077 52,377 17,725 41,080 26,235
2020 65,316 3,654,152 55,946 18,724 45,119 26,236
2021 65,168 3,920,887 60,166 20,157 45,024 26,774
2022 64,316 4,058,420 63, 101 22,573 45,036 27,822
2023 64,702 4,358,404 67,361 22,902 45,100 27,827
2024 64,291 4,793,710 74,563 22,102 46,302 28, 136
2025 65,257 4,945,539 75,786 21,728 46,551 28,452
Notes
• Taxable sales is based upon sales tax revenue reported by the City on the modified accrual basis of accounting. 6 Median home value includes both single family and condo/townhouse units. Data obtained from HDL. c Data obtained from OC Registrar of Voters.
d Data obtained from Hdl, Coren & Cone.
• Data obtained from State Department of Finance/Center for Demographic Research.

Source: State Department of Finance
HdL, Coren & Cone
Center for Demographic Research
O.C. Registrar of Voters
(113)
Median
Home Unemployment
Value Rate d
695,000 4.10%
745,500 3.70%
799,250 3.30%
795,000 2.80%
811,500 2.70%
952,000 7.70%
1, 175,000 5.50%
1,200,000 3.10%
1,327,500 3.50%
1,400,000 4.00%
City of Laguna Niguel
Principal Emplo yers
Current Year and Nine Years Ago
2025
Employer Employees Rank
Costco Wholesale Corporation (2 locations)* 607
Capistrano Unified School District 3 17 2
Whole Foods Market* 249 3
Wal-Mart Stores, Inc.* 246 4
Mercedes-Benz of Laguna Niguel 185 5
Albertsons, Inc. (2 locations)* 160 6
The Home Depot* ISi 7
Vons* 150 8
Confluent Medical Technologies(previously Interface Associates, Inc.) 131 9 St. Anne School 11 7 IO
Life Time Fitness
YMCA
Moulton Niguel Water District
Total 2,3 13
~
Source: MuniServices, LLC / Neumo, FY2016, City of Laguna Niguel --ACFR Publication Report (I) Total City Labor Force provided by EDD Labor Force Data.

Notes :

Results based on direct correspondence with city's local businesses. *Includes Full & Part-time Employment.
(114)
Percentage
or Total City
Employment

1.79%
0,93%

0.73%

0.72%

0.54%

0.47%

0.44%

0.44%

0.39%

0.34%

6.79%
2016
Percentage
of Total City
Employee Rank Employme nt
525 1.50%
509 2 1.46%
210 7 0.60%
294 4 0.84%
215 6 0.62%
170 9 0.49%
200 8 0.57%
332 3 0.95%
262 5 0.75%
125 10 0.36%
2,842 8.14%
City of Laguna Niguel
Full-Time Equivalent City Government Employees by Function / Program Last Ten Fiscal Years
Fiscal Year
2016 2017 2018 2019
General Government
City Council 0.5 0.5 0.5 0.5
City Manager 4.5 6.2 4.2 6.1
City Clerk 2.0 2.0 2.5 2.0
Finance 7.0 6.0 6.5 6.3
Public Safety
Police Services 2.0 2.0 2.0 1.5
Emergency Preparedness 1.0 1.0 1.0 1.0
Community Development
Administration 2.8 4.0 4.0 4.1
Planning 9.8 8.0 9.0 9.0
Building and Safety 1.0 1.0 1.0 1.0
Code Compliance
Public Works
Administration 3.0 3.3 2.3 3.6
Engineering/ Water Quality 8.3 9.0 10.5 11.4
Street Maintenance
Median Maintenance 0.8 0.8 0.8
Park Maintenance 2.0 3.0 4.0 5.2
Slope Maintenance 0.8 0.8 0.8
Building and Facility Maintenance 1.5 1.5 1.5 1.5
Parks and Recreation
Administration 4.0 4.0 3.5 4.0
Recreational Programs 14.0 14.0 13.5 16.2
Aquatics 10.8 9.0 12.0 5.4
Skateboard Park 5.5 5.0 5.0 5.3
Sports
Sea Country Senior & Community Center 11.9 15.0 13.0 13.2 Totals 93.2 96.1 97.6 97.3
2020

4.6 2.0

6.4 1.0

1.0 3.2

5.1 2.0

5.0 6.6

1.0 6.5

1.5 3.7

13.2 9.1

4.7 4.3

12.5 93.4
For part-time employees, full-time equivalent employment is calculated by dividing part-time labor costs by average hourly wage and total labor hours of 2,080. The City is a full contract City and contracts out the following services: Police and Fire Services; Street Maintenance, including Street Sweeping; Park, Slope and Median Landscape Maintenance; Metrolink Station and Park Building Maintenance, and Building and Planning Inspection Services.

Source: Finance Department
(115)
City of Laguna Niguel
Full-Time Equivalent City Government Employees by Function / Program (Continued) Last Ten Fiscal Years
Fiscal Year
2021 2022 2023 2024
General Government
City Council 0.5 0.5 0.5 0.5
City Manager 5.1 5.3 6.0 7.1
City Clerk 2.1 2.6 2.1 2.0
Finance 6.0 6.0 6.0 6.0
Public Safety
Police Services 1.0 1.0 1.0
Emergency Preparedness 1.0 1.0 1.0
Community Development
Administration 3.2 4.1 3.3 5.2
Planning 5.0 5.0 7.0 7.0
Building and Safety
Code Compliance 2.2 2.8 2.5 2.7
Public Works
Administration 10.6 13.4 11.5 12.1
Engineering/ Water Quality
Street Maintenance 1.0 1.0 1.0 3.0
Median Maintenance
Park Maintenance 4.0 4.0 4.0 3.0
Slope Maintenance
Building and Facility Maintenance 3.0 3.1 3.4 4.7
Parks and Recreation
Administration 3.5 2.6 2.2 2.5
Recreational Programs 9.5 11.l 12.7 15.4
Aquatics 7.2 7.6 7.2 7.7
Skateboard Park 3.3 4.6 4.6 3.4
Sports 3.9 4.3 3.9 5.2
Sea Country Senior & Community Center 4.6 7.6 9.5 9.8
Totals 76.7 87.6 89.4 97.3
2025

0.5 6.5

2.0 6.0

5.5 6.0

2.8 II.I

3.0 3.0

4.6 5.9

14.3 7.2

5.9 4.8

9.0 98.I
For part-time employees, full-time equivalent employment is calculated by dividing part-time labor costs by average hourly wage and total labor hours of 2,080. The City is a full contract City and contracts out the following services: Police and Fire Services; Street Maintenance, including Street Sweeping; Park, Slope and Median Landscape Maintenance; Metrolink Station and Park Building Maintenance, and Building and Planning Inspection Services.

Source: Finance Department
(116)
2016
Public Safety: 1
Patrol motorcycles 3
PACT units 2
Public Works:

Street miles 140
Traffic signals 78
Traffic signals - shared 2
Parks and Recreation:

Acreage 135
City parks 29
Playgrounds 21
Swimming pool 1
Skateboard park I
Baseball/softball diamonds 16
Soccer fields 16
Community centers 2
City of Laguna Niguel
Capital Asset Statistics by Function / Program
Last Ten Fiscal Years
2017 2018 2019 2020 2021 2022
4 4 4 4 5 5
2 2 2 2 2 2
140 140 140 140 140 140
78 78 78 78 78 78
2 2 2 2 2 2
135 135 135 135 135 135
29 29 29 29 29 29
21 21 21 21 21 21
I I
I I l l 1
16 16 16 16 16 16
16 16 16 16 16 16
2 2 2 2 2 2
No capital asset indicators are available for the general government or community development functions. 2023 2024 2025
5 5 5
2 2 2
140 140 140
78 78 78
2 2 2
135 135 135
29 29 29
21 21 21
I l I
16 16 16
16 16 16
2 2 2
1 The City contracts with the Orange County Sheriffs Department for its police services. The City does not own the patrol cars used by the County.

Therefore, they are not included in this schedule, yet are part of the services provided to achieve the response times and issue the citations included in the "Operating Indicators By Function" schedule.

Sources: Various City departments
(117)
Public Safety:

City of Laguna Niguel
Operating Indicators by Function/Program
Last Ten Fiscal Years
2016 2017 2018 2019 2020 2021
Police priority one response time (minutes) 5.30 5.21 4.51 4.53 4.36 4.40 Fire response time (minutes)* 6.03 6.00 6.09 7.15 7.03 6.53 Traffic citations 2,719 3,729 4,397 7,029 4,540 4,998
Parking citations 2,975 3,405 3,747 3,099 2,203 2,836
Community Development:

Permits issued 3,755 4,139 3,735 4,106 3,105 3,258
Public Works:

Streets - miles resurfaced 2.7 10.4 37.2 0.6 2.1 7.2
* 80% response rate used through 2023. 90% response rate used from 2024 and forward Sources:

Orange County Fire Authority
Orange County Sheriffs Department
Data Ticket
Public Works Department
Community Development Department
(118)
2022 2023 2024 2025

4.45 5.08 5.24 5.06

7.03 6.49 9.42 8.56
6,778 6,906 6,524 1,713
3,922 4,016 3,305 3,552
3,665 3,798 3,268 2.876

0.8 10.5 6.4 I.I
This page intentionally left blank
(119)

ATTACHMENT B
Independent Accountants' Report on Agreed-Upon
Procedures Applied to Appropriations Limit for
Fiscal Year 2024-2025

CITY OF LAGUNA NIGUEL, CALIFORNIA

INDEPENDENTACCOUNTANTS'REPORT

ON AGREED-UPON PROCEDURES APPLIED TO
APPROPRIATIONS LIMIT WORKSHEET NO. 6
YEAR ENDED JUNE 30, 2025
CliftonlarsonAllen LLP
ClAconnect .com

INDEPENDENT ACCOUNTANTS' REPORT
Honorable Mayor and City Council
City of Laguna Niguel
Laguna Niguel, California
We have performed the procedures enumerated below on the accompanying Appropriations Limit Worksheet No. 6 of the City of Laguna Niguel (the City) for the year ended June 30, 2025. The City's management is responsible for the Appropriations Limit Worksheet No. 6.

The City and the League of California Cities (as presented in the League publication entitled "Article Xlll-8 Appropriations Limit Uniform Guidelines") have agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of meeting the requirements of Section 1.5 of Article XIIIB of the California Constitution. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.

The procedures and the associated findings are as follows:

1. We obtained the completed Appropriations Limit Worksheet No. 6 for the year ended June 30, 2025, and compared the limit and annual adjustment factors included in the worksheet 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 worksheet to those that were selected by a recorded vote of the City Council.

No exceptions were noted as a result of us performing this procedure.

2. For the Appropriations Limit Worksheet No. 6, we added last year's limit to the total adjustments, and compared the resulting amount to this year's limit. We also recalculated the adjustment factor and the adjustment for inflation and population and compared the results to the amounts on Worksheet No. 6.

No exceptions were noted as a result of us performing this procedure.

3. We compared the prior year appropriations limit presented in the Appropriations Limit Worksheet No. 6 to the prior year appropriations limit adopted by the City Council for the prior year.

No exceptions were noted as a result of us performing this procedure.

CLAglobal.com/disclaimer
(1)
Honorable Mayor and City Council
City of Laguna Niguel
We were engaged by the City to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the accompanying Appropriations Limit Worksheet No. 6. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

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

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

CliftonlarsonAllen LLP
Irvine, California
July 7, 2025
(2)

CITY OF LAGUNA NIGUEL
APPROPRIATIONS LIMIT WORKSHEET NO. 6
YEAR ENDED JUNE 30, 2025
Appropriations Limit for Fiscal Year Ended June 30, 2024 (see Note 2) Adjustment Factors for the Fiscal Year Ended June 30, 2025 (see Note 2):

Inflation
Factor
(Note 3)

1.0362
Population
Factor
(Note 4)

1.0067
Adjustment for Inflation and Population
Other Adjustments (Note 5)
Total Adjustments
Combined
Factor

1.04314254
Appropriations Limit for the Fiscal Year Ended June 30, 2025 See accompanying Notes to Appropdations Limit Worksheet No. 6. (3)
$ 274,970,727
X 0.0431425
11,862,935
11 ,862,935
$ 286,833,662

CITY OF LAGUNA NIGUEL
NOTES TO APPROPRIATIONS LIMIT WORKSHEET NO. 6
JUNE 30, 2025
NOTE 1 PURPOSE OF AGREED-UPON PROCEDURES
Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative), California governmental agencies are restricted as to the amount of annual appropriations from proceeds of taxes. Effective for years beginning on or after July 1, 1990, under Section 1.5 of Article XIIIB, the annual calculation of the appropriations limit is subject to agreed-upon procedures in connection with the annual audit.

NOTE 2 METHOD OF CALCULATION
Under Section 10.5 of Article XIIIB, for fiscal years beginning on or after July 1, 1990, the appropriations limit is required to be calculated based on the limit for the fiscal year 1986-87, adjusted for the inflation and population factors discussed at Notes 3 and 4 below.

NOTE 3 INFLATION FACTORS
A California governmental agency may adjust its appropriations limit by either the annual percentage change in California per capita personal income from the preceding year (which is supplied by the State Department of Finance), or the percentage change in the local assessment roll from the preceding year due to the change of local nonresidential construction. The factor utilized by the City for the fiscal year 2024-2025 represents the annual percentage change in California per capita personal income from the preceding year.

NOTE 4 POPULATION FACTORS
A California governmental agency may adjust its appropriations limit by either the annual percentage change of the jurisdiction's own population, or the annual percentage change in population in the County where the jurisdiction is located. The factor utilized by City for fiscal year 2024-2025 represents the annual percentage change in the population of the City.

NOTE 5 OTHER ADJUSTMENTS
A California governmental agency may be required to adjust its appropriations limit when certain events occur, such as the transfer of responsibility for municipal services to, or from, another governmental agency or private entity. The City had no such adjustments for the year ended June 30, 2025.
(4)
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01· r£Hl1r. y,,;h C r.o .. La~scrr ..

S[C r

ATTACHMENT C
Popular Annual Financial Report (P AFR) for Fiscal
Year ended June 30, 2025

CITY OF LAGUNA NIGUEL I CALIFORNIA

POPULAR ANNUAL

FINANCIAL REPORT
FOR FISCAL YEAR ENDED JUNE 30, 2025
cityoflagunaniguel.org
City of Laguna Niguel Popular Annual Financial Report I Year Ended June 30, 2025

TABLE OF CONTENTS
Introduction ....................................................................................................................................... . 02 About Laguna Niguel ............................................................................................................................ 03 City Organization Chart ....................................................................................................................... 04 Government Finance Officers Association Award ................................................................................ 05 Demographics and Key Statistics ........................................................................................................ 06 Notable Community Events ................................................................................................................... 07 Strategic Plan Executive Summary ..................................................................................................... 08 Fund Balances ....................................................................................................................................... 10 General Fund Revenues........................................................................................................................ 11 General Fund Expenditures .......................................................................................... ......................... 12 General Fund Reserves ......................................................................................................................... 13 Capital Improvement Program ........................................................ .. ................................................... 14 Investments ........................................................................................................................................ .. 15

GLOSSARY OF ACCOUNTING TERMS
FUND: An accounting entity with a self-balancing set of accounts. Each fund operates independently almost like its own "company" . Funds are established for specific purposes, like the Gas Tax Fund, which records revenues received for gas taxes, and allowable expenditures of those revenues.

FUND BALANCE: The "retained earnings" of the City since its incorporation. Each fund has its own fund balance.

GENERAL FUND: The primary fund of the City used to account for all revenues and expenditures of the City not legally restricted as to use.

SPECIAL REVENUE FUNDS: These funds are separately administered because revenues are restricted by the State of California, the Federal government , or other governmental agencies as to how the City may spend them.

MODIFIED ACCRUAL BASIS: Revenues are recognized when both measurable and available to the City. Expenditures are recorded as they occur.
cityoflagunaniguel. org ------------- ------- - -------- 01 City of Laguna Niguel Popular Annual Financial Report I Year Ended June 30, 2025

INTRODUCTION
To the Residents of Laguna Niguel:

Thank you for reading the City of Laguna Niguel's Popular Annual Financial Report (PAFR). The PAFR is intended to provide residents and stakeholders of Laguna Niguel with information in an easy-to-read format, simplifying complex financial data and using less technical language. This report contains condensed and simplified financial information from audited results contained in the City's Annual Comprehensive Financial Report (ACFR) for the year ended June 30, 2025. The PAFR provides an overview of the City's financial condition and brief descriptions of other areas of interest.

We hope you enjoy reading the City's PAFR and find its contents helpful and interesting . For more information on the City's various financial reports or other financial information, please visit the Finance Department page on the City of Laguna Niguel website at www.citY.oflagunaniguel.org,._ cityoflagunaniguel. org 02
City of Laguna Niguel Popular Annual Financial Report I Year Ended June 30, 2025

ABOUT LAGUNA NIGUEL
Laguna Niguel is a 14.72 square mile planned community in South Orange County, California and is located approximately halfway between Los Angeles and San Diego. Laguna Niguel is a General Law city with municipal elections held in November of even numbered years.

The City is known for fostering a strong retail and commercial environment. Over one-third of Laguna Niguel is designated as open space, making this one of the key features defining the character and urban form of the City.

Approximately seventy two percent (72%) of Laguna Niguel's 26,187 housing units are owner occupied.

Originally, Rancho Niguel was primarily used as a sheep ranch. The first private landowner of the area was Juan Avila, a resident of San Juan Capistrano, who obtained land through a Mexican land grant in 1842. Juan Avila was also successful in re-establishing his title to the land after California became a US territory in 1848 and remained the owner of "Rancho Niguel" until 1865. In 1895, the "Rancho Niguel" land became part of the Moulton Company, a company that would eventually control over 19,000 acres of local ranch land.

In 1959 the Laguna Niguel Corporation was formed,
and Laguna Niguel became one of the first master
planned communities in California. Land sales started
to occur in 1961 in the Monarch Bay and Laguna
Terrace subdivisions. The City was officially
incorporated on December 1, 1989, becoming the
29th city in Orange County.
cityoflagunaniguel. org 03
City of Laguna Niguel Popular Annual Financial Report I Year Ended June 30, 2025

ORGANIZATION CHART

LAGUNA NIGUEL RESIDENTS
' I
Council Member Council Member
Stephanie Winstead Kelly Jennings
--- -

COMMISSIONS & COMMITTEES
Parks, Recreation & Senior
Commission
Planning
Commission
Traffic & Transportation
Commission
Investment, Banking & Audit
Committee
Military Support
Committee
Youth
Committee

CITY COUNCIL
11 '
I t I
I(
r,¥
t;;
~,.,.J I,,, -~
ft
..

Mayor Mayor Pro Tern Council Member
Ray Gennawey Gene Johns Stephanie Oddo

CITY DEPARTMENTS
ilil City Attorney
<®t City Manager
"-"-"'
~ Administration
~ Community Development
5I Finance
~l Parks & Recreation
'Jt, Public Safety
~ Public Works
cityoflagunaniguel. org ---------------------------- 04 cityoflagunaniguel.org
Government Finance Officers Association
Award for
Outstanding
Achievement in
Popular Annual
Financial Reporting
Presented to
City of Laguna Niguel
California
For its Annual Financial Report
For the Fiscal Year Ended
June 30, 2024
~P-~
Executive Director/CEO
-------------------- 05
City of Laguna Niguel Popular Annual Financial Report I Year Ended June 30, 2025

DEMOGRAPHICS AND KEY STATISTICS

POPULATION TREND
1 JD,DDD
69,0DD
U.00D
li7.DOO

64.D0D
"·"'
U.000
61,1100
66,688
•• .,.~-••• 65,257

POPULATION I
66,748
di

47.7 MEDIAN AGE'
64,291
&1

59.2%

BACHELOR'S DEGREE

OR HIGHER'

HOUSING TREND
4 30000
29D0D
28,452
28DOD
27,82.,,..2 ---,21,...::,8,:::--21
27,0QD
,.,,. 25,884
26,235
25,888
"'" 25,458
2400D

23.000

22.000

EXISTING & PLANNED LAND USE
1 HDL, Coren & C11ne
2 US Census Bureau
3 QC Registrar of Vahirs
4 St.ate Department of rmance
■ Residential 46%
Commercial 4%
■ Mixed Use 2%
~ Public Facilities 2%
■ Parks & Open Space 46%

COMMUNITY DEMOGRAPHICS
2 ...
,6-
$140,605

MEDIAN HOUSEHOLD

INCOME'
•
~
1'l -~
~
141 MILES
■ White 66.5%
■ Hispanic/Latino 16.3%
■ Asian 9.8%
~ Blackl.2%
Other 6.2%
(?)
46,551
REGISTmED VOTERS'
28,452

HOUSING UNITS'

66.5%

OWNER-OCCUPIED'
$1,400,000'
MmlAN HOME VALUE
11_
31 CITY
PARKS

MAINTAINED
80 TRAIL

CITY STREETS MILES
cityoflagunaniguel. org ------------------------ 06
City of Laguna Niguel Popular Annual Financial Report I Year Ended June 30, 2025

NOTABLE COMMUNITY EVENTS

SUMMER CONCERT SERIES

JUNE - AUGUST

SEA COUNTRY FESTIVAL
AUGUST

VETERANS DAY CEREMONY

NOVEMBER
4TH OF JULY CELEBRATIONS
JULY

HAUNTED TRAILS

OCTOBER

HOLIDAY PARADE

DECEMBER
cityoflagunaniguel.org -------------------- 07
City of Laguna Niguel Popular Annual Financial Report I Year Ended June 30, 2025

STRATEGIC PLAN EXECUTIVE SUMMARY
LAGUNA NIGUEL 2050: STRATEGIC PLAN
2025 UPDATE

EXECUTIVE SUMMARY
The City of Laguna Niguel adopted its first-ever strategic plan in 2019, which included a planning process to set goals and priorities for its future . Through the strategic planning process, the City created a blueprint for the future and developed a plan to accomplish its determined direction. The Strategic Plan defines current and future needs, establishes goals and strategies, and includes the City's mission statement, vision statement, and guiding values. •
•

CITY OF LAGUNA NIGUEL

STRATEGIC PLAN GOALS
GOAL 1: PUBLIC SAFm
GOAL 3: OPEN SPACE AND

ENVIRONMENTAL PRESERVATION
GOAL 5: ECONOMIC AND

COMMUNITT DEVELOPMENT
e
• •
.

GOAL 2: FISCAL SUSTAINABILITY
GOAL 4: INFRASTRUCTURE

AND TECHNOLOGY
GOAL 6: COMMUNICATION AND

COMMUNITY OUTREACH
A collaborative process was used to update the Strategic Plan. Throughout the process, a variety of stakeholders were involved, including City residents, business owners, Council Members, commissioners, committee members, department heads," and staff. The process included a workshop to discuss the City's goals for the future. The City's continued success in implementing the identified priorities outlined in the strategic plan has furthered the achievement of the goals established by the City Council. This 2025 Strategic Plan update reflects new and modified strategies and timelines to ensure those goals are achieved. The City has accomplished a great deal since the first strategic plan was adopted and the City continues to update the Strategic Plan annually to reflect current priorities and plan for the future.

The 2025 Laguna Niguel Strategic Plan contains the following elements:
• Organizational mission, vision, and values.
• Six goals
• Strategies for each goal
• Implementation Action Plan
cityoflagunaniguel. org 08
City of Laguna Niguel Popular Annual Financial Report I Vear Ended June 30, 2025

STRATEGIC PLAN EXECUTIVE SUMMARY
GOAL 1: PUBLIC SAFETY
• Maintain current service levels
• Enhance neighborhood watch programs
• Share resources with surrounding communities
• Enhance public safety community messaging, volunteer support programs, and community education initiatives • Business watch/business enhancement team
• Leverage technology to enhance public safety and emergency preparedness GOAL 2: FISCAL SUSTAINABILITY
• Analyze and monitor current fee structure
• Transition City's banking services provider
• Implement efficiencies for City payments and maximize returns on City investments • Transition City to a biennial budget process and conduct utility and franchisee audit • Implement Citywide electronic contract management and procurement software • Update records retention policy and practices, and perform Citywide processes analysis • Institute the Advancement through Collaboration and Engagement (A.C.E.) Team to enhance internal efficiencies GOAL 3: OPEN SPACE AND ENVIRONMENTAL PRESERVATION
• Take inventory of all components of open space and develop a 10-year trails and open space maintenance plan • Enhance public education and obtain a Tree City USA designation • Implement the County Waste Infrastructure System Enhancement (WISE) Agreement • Complete habitat restoration project at Chapparosa Park GOAL 4: INFRASTRUCTURE AND TECHNOLOGY
• Conduct an energy efficiency evaluation for all City facilities • Evaluate the City's infrastructure and maintenance needs and explore options for a public works facility • Develop and implement smart cities solutions
• Conduct an active transportation study
• Complete Citywide bus shelter improvements
• Complete La Paz Road mobility enhancements and permanent repairs • Embrace emerging technologies to enhance community experience • Complete an information technology infrastructure assessment • Enhance the City roadway infrastructure utilizing the City's pavement management plan GOAL 5: ECONOMIC AND COMMUNITY DEVELOPMENT
• Update and implement the Gateway Specific Plan
• Complete comprehensive General Plan update
• Business attraction/retention/education
• Update: local coastal program, town center area specific plan, municipal code, subdivision codes and manuals, discretionary design guidelines, sign code, and triennial local building code • Monitor the General Services Administration (GSA) federal building property disposal • Implement code amendments in response to new state legislation • Implementation of the housing element
• Public document accessibility enhancements
• Expand the Laguna Niguel Summer Trolley
GOAL 6: COMMUNICATION AND COMMUNITY OUTREACH
• Utilize new and existing technologies to expand community outreach • Enhance existing partnerships and regular communication with key stakeholders • Leverage data analysis to curate Citywide messaging
• Update the Cable Channel programming to enhance viewer experience • Adopt Citywide Style Guide
cityoflagunaniguel. org 09
City of Laguna Niguel Popular Annual financial Report I Year Ended June 30, 2025

FUND BALANCES
MAJOR GOVERNMENTAL FUNDS= $58,298,854

GENERAL FUND
$56,103,119
The General Fund is the primary
account for the City's money, used to
support most City operations.

Revenue in this fund can be spent on a
variety of programs and services
without specific restrictions.

MEASURE M2 FUND
$1,696,751
The Measure M2 Fund is used for street
improvement and maintenance, supported
by the City's share of County Measure M2
funds.

GAS TAX FUND
$4,599,353

CAPITAL

PROJECTS FUND
$2,433,886
The Capital Projects Fund accounts
for the City's capital projects,
including the construction, repair,
and upgrades of facilities, streets,
storm drains, sewers, and parks.

SENIOR

TRANSPORTATION FUND
$472,551
The Senior Transportation Fund
accounts for the proceeds and
eligible expenditures as designated in
the Senior Mobility Program, funded
through the Orange County
Transportation Authority.

SUPPLEMENTAL

LAW ENFORCEMENT

SERVICES FUND
$101,855
The Gas Tax Fund is used for general street
maintenance , with money coming from the City's
share of state gasoline taxes. Most of this revenue
can be used for street maintenance and
construction , but a portion is specifically reserved
for street engineering activities.

The Supplemental Law
Enforcement Services Fund
is used for specific law
enforcement and crime
prevention activities in the
Police Services
Department.

MISCELLANEOUS GRANTS
$(238,151)·
The Miscellaneous Grants
Fund accounts for revenues
and expenditures related to
City projects that are fully
or partially funded by
outside grants, primarily
from the State of California.

AQMD FUND
$109,918
The AQMD Fund is used
for air quality
improvement projects,
supported by revenue
from AB 2766. The South
Coast Air Quality
Management District
distributes the funds to
local governments based
on populat ion.

COMMUNITY

DEVELOPMENT

BLOCK GRANT FUND
S(739J*
The Community
Development Block Grant
(CDBG) Fund accounts for
revenues received and
expenditures made for
CDBG eligible grants and
capital projects.
"Grant-related negative balances reflect pending reimbursements, in accordan ce wit h accounti ng rules requiri ng revenues to be recognized only when received. cityoflagunanigue/. org 10
City of Laguna Niguel Popular Annual Financial Report I Year Ended June 30, 2025

GENERAL FUND REVENUES
General Fund Revenues have continued to remain stable and resilient from the period of time preceding the pandemic through the most recent period of heightened inflation. While the City has experienced growth in the revenue categories of property tax, sales tax revenues have remained relatively flat. The Fiscal Year 2024-25 General Fund Revenues were $57.3 million.

REVENUE SUMMARY

SALES TAXES

PROPERTY TAXES

FRANCHISE FEES

INTEREST INCOME
COM. DEV. REVENUE

ALL OTHER SOURCES

TOTAL REVENUE

FISCAL YEAR
2024-25
$14,178,832
S29,658,031
$2,320,723
S3,452,845
$2,609,254
S5,105,830
$57,325,515

MAJOR SOURCES OF REVENUE
Prop.fflY. Tax:
■ Property Tax 52%
Sales Tax 25%
■ All Other Sources 9%
Interest Income 6%
Com. Dev. Revenue 5%
■ Franchise Fees 4%
ad
Property Tax revenues remain the City's largest source of funding, representing over 50% of total General Fund revenues in Fiscal Year 2024-25. The City received $29. 7 million in property taxes in Fiscal Year 2024-25, representing an increase of 4.5% over the prior year.

Sales Tax:

Sales Tax revenue remain the City's second largest source of funding. While Sales Tax revenue has increased over the past five years, the City saw a reduction in revenues in Fiscal Year 2024-25. Total sales tax revenues were $14.2 million, down 0.2% as compared to the prior year.

REVENUE TRENDS - LAST 5 YEARS (IN MILLIONS)
"' Total Revenues & Transfers In $57.3
'" $53.4 $55.8
■ Other Revenues $~ w
-
sso $45.8
Community Development Revenue
-"'
I I I
Interest Income
$JO
■ Franchise Fees
"'
■ Property Taxes
"'
Sales Taxes ,.
l11102021klml l02120Z:7Adml 2tZ'l1021Actu.ll 2023-ltl41d111/ 202,HOlSArtul cityoflagunaniguel. org 11
City of Laguna Niguel Popular Annual Financial Report I Year Ended June 30, 2025

GENERAL FUND EXPENDITURES
The Fiscal Vear 2024-25 activities included the continuation and implementation of many important projects and programs that positively impacted the community and met the goals and objectives set forth in the updated Strategic Plan. Additionally, the FY 2024-25 General Fund expenditures supported the City's building and facility maintenance, street and traffic signal maintenance, parks maintenance, trail maintenance, landscaping, engineering, and environmental services.

EXPENDITURE SUMMARY

GENERAL GOVERNMENT

PUBLIC SAFETY

COMMUNITT DEVELOPMENT

PARKS & RECREATION

PUBLIC WORKS

I I I I

TRANSFERS OUT

TOTAL EXPENDITURES &

TRANSFERS OUT

FISCAL YEAR
2024-25
$6,741,141
$18,642,258
$4,827,986
S4.472.023
$15,319,971
Sl.692,481
$3,093,087
$54,734,947

SUMMARY OF FULL TIME PERSONNEL
(LESS CITY COUNCIL)
■ Public Works 21
Parks & Recreation 18
■ Community Development 12 66
■ Administration 7 TOTAL
Finance 6
■ City Clerk 2
FISCAL YEAR 2024-25

FULL TIME POSITIONS
cityoflagunaniguel. org
■ Public Safety 34%
Public Works 28%
■ General Government 12%
Community Development 9%
Parks & Recreation 8%
■ Transfers Out 6%
Capital Outlay 3%
TOTAL FULL TIME POSITIONS - LAST 5 YEARS
70 63 64 66 66
62 60
50 40
30 20
10 0
- -
FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25
P.rks & Recreation ■ Public Works ■ Community 0evelopment Public Safely Finance ■ GityGlerk ■ Administration
12 City of Laguna Niguel Popular Annual Financial Report I Year Ended June 30, 2025

GENERAL FUND RESERVES
The City of Laguna Niguel's Financial Reserves Policy requires maintaining reserves totaling at least 50% of General Fund operating expenditures. Based on the $56.1 million reserve balance on June 30, 2025, the City has 108.5% of General Fund operating expenditures in reserves, easily meeting the policy. Net changes to fund balance was $2.8 million, representing a 5.2% increase over the prior year total. The City has also designated portions of its fund balance for other categories, as identified below. Each of these categories are identified in the Financial Reserves Policy. The City Council reviews the Financial Reserves Policy annually.

DESCRIPTION OF RESERVES/FUND BALANCE

NON-SPENDABLI - DEPOSITS AND PREPAID ITEMS
RESTRICTED FOR SECTION 115 PENSION TRUST

ASSIGNED FOR DEPARTMENTAL OPERATIONS
COMMITTED:

FINANCIAL AND ECONOMIC UNCERTAINTY

COMPENSABLE ACCRUED UNUSED VACATION ANO SICK LEAVE

OTHER POST-EMPLOYMENT BENEFITS (OPEB)

INFRASTRUCTURE REPLACEMENT ANO DEFERRED MAINTENANCE
TOTALS
5-YEAR RESERVES TREND (IN MILLIONS)
110
$3D
12D
SID
Fl2020-21 F12021-Z2

FISCAL YEAR
2024-25
$224,855
S2,419,141
$285,096
$27,324,616
S192.928
$962,187
S24,694.296
$56,103,119
FY 2D'Z2-23
'l, iii
108.5°/o

OF GENERAL FUND OPERATING

EXPENDITURES IN RESERVES
FY202:J.24 FY2024-2S
Non-spendable - Deposits and Prepaid Items Restricted for Section 115 Pension Trust ■ Assigned for Departmental Operations ■ Financial and Economic Uncertainty Compensable Accrued Unused Vacation and Sick Leave Other Post-Employment Benefits (OPEB) ■ Infrastructure Replacement and Deferred Maintenance - General Reserves Totals cityoflagunaniguel.org ------------------------------- 13 City of Laguna Niguel Popular Annual Financial Report I Year Ended June 30, 2025

CAPITAL IMPROVEMENT PROGRAM
The City of Laguna Niguel invested $8.5 million in Fiscal Year 2024-25 towards maintaining and improving the City's infrastructure, as identified in the Strategic Plan. It is critical that the City continues to provide appropriately designed and well-maintained infrastructure and amenities. A variety of funding sources support the capital plan, including funds such as Measure M2, AQMD, Gas Tax, CDBG, other grants, the General Fund, and the City's infrastructure reserves.

NOTABLE COMPLETED CAPITAL IMPROVEMENT PROJECTS

ADOPTION OF CITY'S FIRST EVER

ACTIVE TRANSPORTATION PLAN

COMPLETION OF PROJECT APPROVAL AND

ENVIRONMENJAL DOCUMENJ (PAED) PHASE

FOR LA PAZ ROAD

CAPITAL IMPROVEMENT PROGRAM FUNDING SOURCES

FUNDING SOURCES

AMERICAN RESCUE PLAN ACT

CDBG FUND

GAS TAX

GENERAL FUND
MEASURE M2 FUND

OTHER GRANTS
TOTAL

FISCAL YEAR
2024-25
$789,550
S47,349
$1,Sn,535
S2,824.086
$2,778,493
S476,482
$8,487,495
$8.5

MILLION

RESIDENTIAL RESURFACING

PROGRAM (SLURRY SEAL PROJECJ)
■ General Fund 33%
Measure M2 Fund 33%
■ Gas Tax Fund 19%
American Rescue Plan Act 9%
Other Grants 6%
■ CDBG Fund 1%
cityoflagunaniguel. org ----------------------------- 14 City of Laguna Niguel Popular Annual Financial Report I Year Ended June 30, 2025

INVESTMENTS
The City of Laguna Niguel's Investment Policy provides a framework for managing its investment portfolio. The policy's primary objectives, in order of priority , are: 1) Safety - the City intends to preserve its investment; 2) Liquidity - the portfolio should remain liquid enough to meet all operating needs; and 3) Return on Investment - the portfolio should be designed with the objective of attaining a market rate of return, while taking into account investment risk constraints and cash flow characteristics. The average return of the State Treasurer's Local Agency Investment Fund (LAIF) is used as benchmark for the City's portfolio .
0 :iii

3.1°/o

AVG YIELD

FOR THE YEAR
CITY & LAIF PORTFOLIO YIELDS - 5 YEAR HISTORY
The Local Agency Investment Fund
(LAIF), managed by the State Treasurer,
serves as an alternative investment pool
for public agencies. The LAIF yield is used
as benchmark for the City's portfolio.

The graph on the right compares the
City's portfolio yields with the LAIF
portfolio yields over the past five years.

5.00%

4.50%

4.00%

3.50%

3.00%

2.500/o

2.00%

1.50%

1.00%

0.500/o

0.00%
- CITY - LAIF
20-21 21-72
~@
$3.9

MILLION

EARNED FOR THE YEAR
22-23 23-24
PORTFOLIO DIVERSIFICATION 5-YEAR PORTFOLIO SIZE TREND [IN MILLIONS) S70.0
S68.D
S66.0
■ Agency Securities 45% S64.0
US Treasuries 42% S62.0
■ Money Market 7% S60.D
■ Certificate of Deposits 6% SSB.D
S56.D
SSI.O
rf2t12~21 FT 2021-22 f'f202H3 fY 2D23-24
cityoflagunaniguel. org
24-25
rY 2t24-25
15 CONTACT US
~ 949-362-4300 (8} 30111 Crown Valley Parkway, Laguna Niguel, CA 926n @1 info·[email protected]