San Diego Tourism Authority

Financial Statements

For the Years Ended June 30, 2022

With Summarized Financial Information for 2021

San Diego Tourism Authority

Contents

2

Independent Auditors’ Report 3-5

Financial Statements

Statements of Financial Position 6

Statements of Activities 7-8

Statements of Cash Flows 9

Notes to Financial Statements 10-21

Supplementary Information

Schedule of Budget and Actual Expenditures of San Diego Tourism Marketing District Funds 23

Schedule of Budget and Actual Expenditures – Indirect Costs 24 Mayer Hoffman McCann P.C.

13500 Evening Creek Drive North ■ Suite 450 ■ San Diego, CA 92128 Main: 858-***-**** ■ Fax: 858-***-**** ■ www.mhmcpa.com Member of Kreston International — a global network of independent accounting firms Independent Auditors’ Report

To the Audit Committee

San Diego Tourism Authority

San Diego, California

Opinion

We have audited the financial statements of San Diego Tourism Authority (the “Organization”), which comprise the statement of financial position as of June 30, 2022, and the related statements of activities, and cash flows for the year then ended, and the related notes to the financial statements. In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Organization as of June 30, 2022, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (“GAAS”). 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 Organization 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 opinion. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Organization’s ability to continue as a going concern for one year after the date that the financial statements are available to be issued.

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 auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS, we:

• Exercise professional judgment and maintain professional skepticism throughout the audit.

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

• Obtain an understanding of internal control relevant to the audits 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 Organization’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 Organization’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.

Report on Summarized Comparative Information

We have previously audited the Organization’s 2021 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated October 5, 2021. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2021, is consistent, in all material respects, with the audited financial statements from which it has been derived.

Report on Supplementary Information

Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The Schedule of Budget and Actual Expenditures of San Diego Tourism Marketing District Funds and Schedule of Budget and Actual Expenditures – Indirect Costs are presented for purposes of additional analysis and are not a required part of the 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 financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information, excluding the budget amounts, is fairly stated in all material respects in relation to the financial statements as a whole. San Diego, California

November 14, 2022

San Diego Tourism Authority

Statements of Financial Position

June 30, 2022 2021

Assets

Current Assets

Cash $ 3,772,970 $ 5,632,236

Accounts receivable:

Public revenue contracts 4,744,301 3,448,964

Advertising 135,858 153,838

Membership dues 11,641 28,091

Events & sponsorships 40,500 -

Federal tax credits and other - 354,110

Allowance for doubtful accounts (8,836) (8,836)

Total accounts receivable, net 4,923,464 3,976,167 Deposits and prepaid expenses 42,249 62,367

Total Current Assets 8,738,683 9,670,770

Investments 162,617 188,391

Property and equipment, net 331,881 388,974

Total Assets $ 9,233,181 $ 10,248,135

Liabilities and Net Assets

Liabilities

Current Liabilities

Current portion of accrued pension costs $ 48,984 $ 72,000 Current portion of capital lease obligations 19,115 29,539 Accounts payable 2,340,317 2,276,361

Accrued expenses 1,307,314 585,681

Advance payable 2,000,000 2,000,000

Deferred revenue - Paycheck Protection Program Loan - 1,258,362 Deferred income:

Advertising 38,248 17,023

Events and sponsorships 99,710 82,960

Membership dues 15,109 4,933

Service agreements - 200,000

Total deferred income 153,067 304,916

Total Current Liabilities 5,868,797 6,526,859

Non-Current Liabilities

Accrued pension costs, less current portion - 338,555 Capital lease obligations, less current portion 7,683 26,799 Deferred compensation plan liability 162,617 188,391 Deferred rent 644,766 719,837

Total Non-Current Liabilities 815,066 1,273,582

Total Liabilities 6,683,863 7,800,441

Net Assets Without Donor Restrictions 2,549,318 2,447,694 Total Liabilities and Net Assets $ 9,233,181 $ 10,248,135 The accompanying notes are an integral part of these financial statements. 6

San Diego Tourism Authority

Statements of Activities

For Year Ended June 30, 2022

(With Summarized Comparative Financial Information for the Year Ended June 30, 2021) Without Donor

Restrictions

With Donor

Restrictions 2022 2021

Revenue

Public Revenue

San Diego Tourism Marketing District $ 25,462,611 $ - $ 25,462,611 $ 20,955,905 Federal tax grants - - - 649,127

Federal grants 1,258,362 - 1,258,362 1,932,718

Total Public Revenue 26,720,973 - 26,720,973 23,537,750 Private Revenue

Service agreements 2,343,750 - 2,343,750 1,736,667 Membership dues 1,154,355 - 1,154,355 1,200,333

Advertising sales 744,016 - 744,016 558,443

Events 309,696 - 309,696 58,653

Sponsorships 125,000 - 125,000 -

Commissions 73,774 - 73,774 16,824

Total Private Revenue 4,750,591 - 4,750,591 3,570,920 Total Revenue 31,471,564 - 31,471,564 27,108,670

Operating Expenses

Salaries & Benefits

Salaries 6,648,179 - 6,648,179 5,251,419

Benefits 998,131 - 998,131 966,849

Payroll taxes 440,379 - 440,379 388,162

Training & recruitment 97,119 - 97,119 60,749

Total Salaries & Benefits 8,183,808 - 8,183,808 6,667,179 Program of Work

Advertising 17,306,929 - 17,306,929 14,324,404

Outside professional services 2,552,261 - 2,552,261 2,117,198 Promotions & events 754,044 - 754,044 69,028

Tourism research 482,053 - 482,053 357,999

Travel & entertainment 427,023 - 427,023 27,032

Dues & subscriptions 204,815 - 204,815 214,903

Publications 82,625 - 82,625 77,528

Promotional materials 19,900 - 19,900 2,199

Total Program of Work 21,829,650 - 21,829,650 17,190,291 The accompanying notes are an integral part of these financial statements. 7

San Diego Tourism Authority

Statements of Activities

For Year Ended June 30, 2022

(With Summarized Comparative Financial Information for the Year Ended June 30, 2021) Without Donor

Restrictions

With Donor

Restrictions 2022 2021

General & Administrative

Office and equipment rent 749,980 - 749,980 693,197 Software and equipment maintenance 328,662 - 328,662 306,088 Depreciation & amortization 119,589 - 119,589 127,549 Outside professional services 109,521 - 109,521 92,633 Telecommunications 100,057 - 100,057 111,017

Bank charges & processing fees 65,064 - 65,064 50,020 Insurance & taxes 56,037 - 56,037 52,084

Printing & postage 43,973 - 43,973 44,139

Miscellaneous expenses 38,462 - 38,462 4,179

Office supplies 26,159 - 26,159 11,702

Facility maintenance 549 - 549 832

Bad debt Expense - - - 20,000

Total General & Administrative 1,638,053 - 1,638,053 1,513,440 Total Operating Expenses 31,651,511 - 31,651,511 25,370,910 Change in Net Assets from Operating Activities (179,947) - (179,947) 1,737,760 Pension Changes and Net Periodic

Pension Benefit Cost 281,571 - 281,571 1,157,565

Change in Net Assets 101,624 - 101,624 2,895,325

Net Assets Without Donor Restrictions at

Beginning of Year 2,447,694 - 2,447,694 (447,631)

Net Assets Without Donor Restrictions at

End of Year $ 2,549,318 $ - $ 2,549,318 $ 2,447,694 The accompanying notes are an integral part of these financial statements. 8

San Diego Tourism Authority

Statements of Cash Flows

For Year Ended June 30, 2022

(With Summarized Comparative Financial Information for the Year Ended June 30, 202*-****-****

Cash Flows from Operating Activities

Change in Net Assets $ 101,624 $ 2,895,325

Adjustments to reconcile change in net assets

to net cash from operating activities:

Depreciation & amortization 119,589 127,549

Bad debt expense - 20,000

(Increase) / decrease in operating assets:

Accounts receivable, net (947,297) (382,941)

Deposits and prepaid expenses 20,118 (50,969)

Increase / (decrease) in operating liabilities:

Accounts payable 63,956 1,953,314

Accrued expenses 721,633 (32,203)

Accrued pension costs (361,571) (1,220,440)

Advances payable - (1,000,000)

Deferred rent (75,071) 19,549

Deferred revenue - Paycheck Protection Program Loan (1,258,362) 1,258,362 Deferred income (151,849) (290,069)

Net cash from operating activities (1,767,230) 3,297,477 Cash Flows from Investing Activities

Purchases of property and equipment (62,496) -

Net cash from investing activities (62,496) -

Cash Flows from Financing Activities

Principal payments on capitalized lease obligations (29,540) (49,036) Net cash from financing activities (29,540) (49,036) Net (Decrease) Increase in Cash (1,859,266) 3,248,441 Cash at Beginning of Year 5,632,236 2,383,795

Cash at End of Year $ 3,772,970 $ 5,632,236

Supplemental Disclosures of Cash Flow Information: Cash paid during the year for:

Interest $ 1,832 $ 2,209

The accompanying notes are an integral part of these financial statements. 9

San Diego Tourism Authority

Notes to Financial Statements

10

1. Nature of Organization and Significant Accounting Policies Nature of

organization

The San Diego Tourism Authority (“SDTA”), formerly the San Diego Convention & Visitors Bureau, was incorporated in California in October 1954 as the San Diego Convention & Tourist Bureau, a not-for-profit mutual benefit corporation. SDTA is a community organization with the goal of developing, promoting, and maintaining the convention and visitor industry in the San Diego region. SDTA also has an office in Chicago, Illinois and employs regionally based sales professionals to promote San Diego tourism nationally. Summary of

significant

accounting

policies

A summary of the SDTA’s significant accounting policies consistently applied in the preparation of the accompanying financial statements follows. Liquidity and

availability of

financial assets

SDTA is substantially supported by revenue received from a Services Agreement with the San Diego Tourism Marketing District (“SDTMD”) as described in Note 7. Under the Agreement, SDTA is reimbursed for valid Agreement program expenditures upon submission of required documentation, including proof of payment. SDTMD reimburses SDTA within 30 days of submission of a reimbursement request. SDTMD advanced $2.0 million to SDTA to ensure adequate funding to timely execute programs given the Agreement’s reimbursement process. The Agreement also provides for invoice payments to be issued directly from SDTMD to SDTA vendors, upon request from SDTA, for significant expenditures that may not be accommodated by the advance. SDTA can also draw upon $350,000 from the available revolving line of credit as described in Note 4.

The following represents the financial assets for the year ended: June 30, 2022

Financial assets

Cash $ 3,772,970

Accounts receivable, net within one year 4,923,464 Financial assets available for general

expenditures within one year

$ 8,696,434

Basis of

accounting

The financial statements of SDTA have been prepared on the accrual basis of accounting.

Financial

statement

presentation

SDTA’s financial statement presentation is in accordance with authoritative guidance for not-for-profit organizations. SDTA reports information regarding its financial position and activities according to two classes of net assets: net assets with donor restrictions and net assets without donor restrictions. San Diego Tourism Authority

Notes to Financial Statements

11

Financial

statement

presentation,

cont’d

Net assets without donor restrictions represent expendable funds available for operations which are not otherwise limited by donor restrictions. Net assets with donor restrictions consist of contributed funds, subject to specific donor-imposed restrictions, contingent upon a specific performance of a future event or a specific passage of time before SDTA may spend the funds and of irrevocable donor restrictions, requiring the assets be maintained in perpetuity. SDTA does not have net assets with donor restrictions. The financial statements include certain prior-year summarized comparative information in total but not by net asset class. Such information does not include sufficient detail to constitute a presentation in conformity with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the organization's financial statements for the year ended June 30 of the prior year, from which the summarized information was derived. Use of

estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Significant estimates used in preparing these financial statements include the functional allocation of expenses, allowance for doubtful accounts for uncollectible amounts and accrued pension costs.

Accounts

receivable

Accounts receivable arise primarily from contracts, membership dues, and advertising. Uncollectible accounts are charged to income when management determines the amounts are uncollectible. The allowance for doubtful accounts was $8,836 at June 30, 2022 and 2021. It is the policy of management to review the outstanding accounts receivable at year end, as well as bad debt write-off experienced in the past, to establish an allowance for doubtful accounts for uncollectible amounts.

Property and

equipment

Property and equipment are recorded at cost. Acquisitions of property and equipment with a cost of $1,500 or more are capitalized. Provisions for depreciation and amortization of property and equipment are made on a straight- line basis over their estimated useful lives, principally three to ten years, or, in the case of leasehold improvements, over the lesser of the useful lives of the related assets or the lease term. Maintenance and repairs are charged to expense as incurred. When equipment is sold or retired, cost and accumulated depreciation are removed from the accounts and the resultant gain or loss, if any, is credited or charged to operations.

San Diego Tourism Authority

Notes to Financial Statements

12

Revenue

recognition

Membership dues and advertising contracts are recorded as income when earned. Amounts billed in advance are recorded as deferred income and recognized as income over the advertising contract period. Appropriations from government funding sources are recognized when earned in accordance with the contract. Revenue from SDTMD funding is recognized as services are performed and qualifying expenditures are incurred. Donated and

contributed

services

Donated and contributed services are not included in the accompanying financial statements, as they do not meet the requirements for recognition as contributions.

Advertising

expenses

SDTA expenses advertising costs ratably over the advertising contract period. Advertising expenses were $17,306,929 and $14,324,404 for the years ended June 30, 2022 and 2021, respectively.

Fair value

measurements

Financial Accounting Standards Board (“FASB”) issued authoritative guidance relating to fair value measurements and disclosure which establishes a common definition for fair value to be applied to U.S. generally accepted accounting principles requiring use of fair value, establishes a framework for measuring fair value, and expands disclosures about such fair value measurements. SDTA measures fair value at the price that would be received upon a sale of an asset in an orderly transaction between market participants at the measurement date. The guidance establishes a hierarchy for ranking the quality and reliability of the information used to determine fair values. The guidance requires that assets and liabilities carried at fair value be classified and disclosed in one of the following categories:

Level 1: Unadjusted quoted market prices in active markets for identical assets or liabilities.

Level 2: Unadjusted quoted prices in active markets for similar assets or liabilities or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability. Level 3: Significant unobservable inputs for the asset or liability. The valuation methodology SDTA uses to measure financial instruments at fair value utilize inputs derived principally from or corroborated by observable market data by correlation or other means. SDTA attempts to utilize the best available information in measuring fair value. Refer to Note 6 for the fair value measurements of SDTA’s defined benefit plan and deferred compensation plan. San Diego Tourism Authority

Notes to Financial Statements

13

Income taxes SDTA is a tax exempt organization per the Internal Revenue Code and Section 23701(e) of the Revenue and Taxation Code. Income determined to be unrelated business taxable income (“UBTI”) would be taxable. SDTA evaluates their uncertain tax positions, if any, on a continual basis through review of their policies and procedures, review of their regular tax filings, and discussions with outside experts. At June 30, 2022 and 2021, management believes SDTA did not have any uncertain tax positions.

At June 30, 2022, the federal statute of limitation remains open for the fiscal years 2019 through 2021. The statute of limitation for the state income tax returns remains open for the fiscal years 2019 through 2021. As of the date of this report, the fiscal year 2022 return has not been filed. Functional

allocation of

expenses

The cost of providing various programs and other activities is summarized on a functional basis below for the year ended June 30, 2022 (with comparative summarized financial information for the year ended June 30, 2021): June 30, 2022 June 30, 2021

Program

Services

Management

and General

Total

Expenses

Total Expenses

Salaries, taxes, and benefits $ 6,329,508 $ 1,854,300 $ 8,183,808 $ 6,667,179 Program expenses

Advertising 17,306,929 - 17,306,929 14,324,404

Outside professional services 2,326,997 225,264 2,552,261 2,117,198 Tourism research 482,053 - 482,053 357,999

Dues & subscriptions 113,701 91,114 204,815 214,903 Promotions & events 741,888 12,156 754,044 69,028

Other expenses 468,094 61,454 529,548 106,759

Total 21,439,662 389,988 21,829,650 17,190,291

General and administrative

Office and equipment rent 579,698 170,283 749,980 693,197 Software and equipment

maintenance 254,039 74,622 328,662 306,088

Depreciation & amortization 92,437 27,153 119,589 127,549 Telecommunications 77,339 22,718 100,057 111,017

Other expenses 262,619 77,145 339,765 275,589

Total 1,266,132 371,921 1,638,053 1,513,440

Pension related benefit cost (221,468) (60,103) (281,571) (1,157,565) Total Expenses $ 28,813,834 $ 2,556,106 $ 31,369,940 $ 24,213,345 San Diego Tourism Authority

Notes to Financial Statements

14

COVID-19 The World Health Organization declared the outbreak of a coronavirus

(COVID-19) pandemic. The operations of SDTA have been significantly impacted with reductions in revenue from SDTMD. While the reductions in revenue is currently expected to be temporary, there is uncertainty around the duration and extent of the impact on SDTMD and its financial condition. SDTA and SDTMD have agreed to approximately $38.5 million for sales and marketing activities for the 2023 fiscal year.

Grants Grants are recognized as without donor restrictions or with donor restrictions, depending on the stipulations of the grant agreements. When a grant restriction expires, stipulated time restrictions end or purpose restrictions expire, net assets with donor restrictions are reclassified to net assets without donor restrictions and reported in the statements of activities as net assets released from restrictions. Grants whose restrictions are met in the same reporting period are reported as net assets without donor restrictions. 2. Concentrations SDTA maintains its cash in bank deposit accounts, which at times exceed federally insured deposit limits. SDTA has not experienced any losses in these deposit accounts. Management believes that SDTA is not exposed to any significant credit risk with respect to its cash.

All receivables are unsecured and, thus, subject to credit risk. See Note 7 for discussion of revenue concentrations. 3. Property and

Equipment

Property and equipment was comprised of the following at June 30: 2022 2021

Leasehold improvements $ 414,126 $ 414,126

Computer equipment 186,500 168,914

Furniture and fixtures 181,990 181,990

Automobiles 44,909 -

827,525 765,030

Accumulated depreciation and amortization (495,644) (376,056)

$ 331,881 $ 388,974

Depreciation and amortization expense was $119,589 and $127,549 for the years ended June 30, 2022 and 2021, respectively.

San Diego Tourism Authority

Notes to Financial Statements

15

4. Debt

Line of Credit

SDTA has a revolving line of credit with Bank of America for $350,000. Interest is payable monthly at a rate equal to the Bank’s prime rate plus 0.50%. The line of credit expires on April 30, 2023.

There were no drawdowns on the line of credit during the years ended June 30, 2022 and 2021.

Paycheck Protection Program loan

SDTA received Paycheck Protection Program (PPP) loans of $3,191,080 granted by the Small Business Administration under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). PPP loans are considered conditional contributions, with a right-of-return in the form of an obligation to be repaid if a barrier to entitlement is not met. The barrier is that PPP loan funds must be used to maintain compensation costs and employee headcount, and other qualifying expenses, such as mortgage interest, rent and utilities incurred following receipt of the funds.

SDTA recognized $1,258,362 and $1,932,718 as grant revenue for the years ended June 30, 2022 and 2021, respectively, as qualified expenses occurred or barriers to entitlement were met during each respective year. Forgiveness of the PPP loans were granted by the Small Business Administration to SDTA in December 2021 and June 2022. 5. Capital Leases

SDTA periodically enters into capital leases, which are reported as assets and lease obligations in the accompanying financial statements. Property and equipment under capital leases include computer and telecommunication equipment, which totaled $138,437 at June 30, 2022 and 2021. Depreciation expense related to these capitalized leases was $29,677 and

$48,028 for the years ended June 30, 2022 and 2021, respectively. Future minimum lease payments under capital leases together with the present value of the lease payments are as follows:

Year Ending June 30,

2023 $ 20,000

2024 7,871

Total minimum lease payments 27,871

Amount representing interest (1,073)

Present value of minimum lease payments 26,798

Less current portion (19,115)

Long-term portion $ 7,683

San Diego Tourism Authority

Notes to Financial Statements

16

6. Employee

Benefit Plans

Defined benefit

plan

SDTA has a non-contributory defined benefit plan covering substantially all of its employees who completed one year of service by June 30, 2005. The plan is frozen, and employees hired after June 30, 2005 are not eligible. The change in plan assets and the related change in benefit obligation are as follows for the years ended June 30:

Change in benefit obligation: 2022 2021

Projected benefit obligation at beginning of

year $ 6,301,321 $ 6,592,231

Interest cost 160,052 178,347

Disbursements (240,997) (203,864)

Lump sum benefits paid (283,661) -

Actuarial gain (1,074,482) (265,393)

Projected benefit obligation at end of year $ 4,862,233 $ 6,301,321 Change in plan assets: 2022 2021

Fair value of plan assets at beginning of

year $ 5,890,766 $ 4,961,236

Employer contributions 80,000 62,875

Periodic benefits paid (240,997) (203,864)

Lump sum benefits paid (283,661) -

Actual return on plan assets (632,859) 1,070,519

Fair value of plan assets at year end $ 4,813,249 $ 5,890,766 Amounts recognized in the statement of financial position consist of: Current portion $ (48,984) $ (72,000)

Noncurrent portion - (338,555)

Funded Status $ (48,984) $ (410,555)

The accumulated benefit obligation for the plan was $4,862,233 and $6,301,321 at June 30, 2022 and 2021, respectively.

The actuarially computed net periodic benefit cost includes the following components for the years ended June 30:

2022 2021

Interest cost $ 160,052 $ 178,347

Recognition of net gain (136,683) (1,049,951)

Expected return on plan assets (304,940) (285,961) Net periodic benefit income $ (281,571) $ (1,157,565) San Diego Tourism Authority

Notes to Financial Statements

17

Defined benefit

plan, cont’d

The plan’s assumptions used to determine the net periodic benefit cost and the benefit obligation for the years ended June 30:

2022 2021

Discount rate for net periodic pension cost 2.75% 2.75% Expected long term return on plan assets 7.00% 7.00% Discount rate for benefit obligation 4.50% 2.75%

The Plan’s expected future benefit payments at June 30, 2022, were as follows: Years Ending June 30,

2023 $ 287,141

2024 216,095

2025 253,416

2026 602,249

2027 515,497

2028-2032 $ 1,729,756

The basis used to determine the plan’s overall expected long-term rate of return on assets has been the historical return of the investment portfolio. The plan’s assets by category were as follows as of

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