HomeMy WebLinkAbout2018-19 CAFR
COMPREHENSIVE ANNUAL FINANCIAL REPORT
Fiscal Year Ended June 30, 2019
HEIDI HARMON, MAYOR
AARON GOMEZ, VICE MAYOR
CARLYN CHRISTIANSON, COUNCIL MEMBER
ANDY PEASE, COUNCIL MEMBER
ERICA A. STEWART, COUNCIL MEMBER
DEREK JOHNSON, CITY MANAGER
Prepared by the Department of Finance
Brigitte Elke, Finance Director
Debbie Malicoat, Accounting Manager/Controller
Tavy Garcia, Senior Accountant
Tracy Kawaguchi, Accountant
City of San Luis Obispo, California
www.slocity.org
City of San Luis Obispo, California
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2019
Table of Contents
Page
Introductory Section
Transmittal Memorandum ..................................................................................................................................................... vii-xviii
Report Purpose and Organization ............................................................................................................................................... vii
Profile of the City of San Luis Obispo ........................................................................................................................................ ix
Factors Affecting Financial Condition ......................................................................................................................................... x
Financial Condition Overview .................................................................................................................................................... xii
Relevant Financial Policies ........................................................................................................................................................ xvi
Major Initiatives ........................................................................................................................................................................ xix
Award for Excellence in Financial Reporting ............................................................................................................................ xx
Acknowledgments ...................................................................................................................................................................... xx
Directory of Officials and Advisory Bodies .................................................................................................................................. xxi
City Council ............................................................................................................................................................................... xxi
Advisory Bodies ........................................................................................................................................................................ xxi
Appointed Officials and Department Heads .............................................................................................................................. xix
Mission Statement ........................................................................................................................................................................ xxii
Organizational Values ........................................................................................................................................................ xxiii-xxiv
Organization of the City of San Luis Obispo ............................................................................................................................... xxv
GFOA Certificate of Achievement for Excellence in Financial Reporting ................................................................................. xxvi
Financial Section
Independent Auditors’ Report .......................................................................................................................................................1-3
Management’s Discussion and Analysis ..................................................................................................................................... 5-22
Overview of the Financial Statements .......................................................................................................................................... 5
Financial Highlights ..................................................................................................................................................................... 7
Government-wide Overall Financial Analysis .............................................................................................................................. 9
Financial Analysis of Governmental Funds ................................................................................................................................ 14
General Fund Budgetary Highlights ........................................................................................................................................... 15
Capital Assets and Debt Administration ..................................................................................................................................... 17
Economic Factors ....................................................................................................................................................................... 18
Next Year’s Budgets and Rates .................................................................................................................................................. 19
Requests for Additional Information .......................................................................................................................................... 22
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City of San Luis Obispo, California
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2019
Table of Contents Page 2
Page
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position ........................................................................................................................................................ 25
Statement of Activities ....................................................................................................................................................... 26-27
Fund Financial Statements:
Balance Sheet – Governmental Funds ..................................................................................................................................... 28
Reconciliation of the Governmental Funds Balance Sheet to the
Government-wide Statement of Net Position ...................................................................................................................... 29
Statement of Revenues, Expenditures and Changes in Fund Balance –
Governmental Funds ...................................................................................................................................................... 30-31
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund
Balance to the Government-wide Statement of Activities ................................................................................................... 32
Statement of Fund Net Position Business-Type Activities – Enterprise Funds .................................................................. 33-34
Statement of Revenues, Expenses and Changes in Fund Net Position Business-Type Activities—Enterprise
Funds .................................................................................................................................................................................. 35
Statement of Cash Flows Business-Type Activities – Enterprise Funds ............................................................................ 36-37
Statement of Net Position - Fiduciary Funds - Agency Funds ................................................................................................ 38
Notes to the Basic Financial Statements ................................................................................................................................ 39-89
Required Supplementary Information Section
Budgetary Comparison Schedule – General Fund ................................................................................................................. 92-97
Schedule of the Changes in the Net Pension Liability and Related Ratios – Miscellaneous
Agent Multiple – Employer Plan ............................................................................................................................................ 98
Schedule of the Pension Plan Contributions – Miscellaneous Agent Multiple – Employer Plan ............................................... 99
Schedule of the City’s Proportionate Share of the Net Pension Liability – Safety Cost-Sharing Plan ..................................... 100
Schedule of the City’s Pension Contributions – Safety Cost-Sharing Plan .............................................................................. 101
Schedule of the Changes in the Net OPEB Liability and Related Ratios ................................................................................. 102
Schedule of Employer OPEB Contributions ............................................................................................................................. 103
Notes to Required Supplementary Information ........................................................................................................................ 104
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City of San Luis Obispo, California
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2019
Table of Contents Page 3
Page
Other Supplementary Information and Combining and Individual Fund Statements and Schedules
Half Percent Sales Tax Measure Funding Schedule .......................................................................................................... 107-109
Nonmajor Governmental Funds ........................................................................................................................................ 110-113
Combing Balance Sheet – Nonmajor Governmental Funds .............................................................................................. 114-119
Combining Statement of Revenues, Expenditures and Changes in Fund Balance
- Nonmajor Governmental Funds ................................................................................................................................... 120-125
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual:
Downtown Business Improvement District Fund ................................................................................................................. 126
Transportation Development Act (TDA) Fund ..................................................................................................................... 127
Tourism Business Improvement District Fund ...................................................................................................................... 128
Gas Tax Fund ........................................................................................................................................................................ 129
Community Development Block Grant (CDBG) Fund ......................................................................................................... 130
Law Enforcement Grants Fund ............................................................................................................................................. 131
Public Art Contributions Fund .............................................................................................................................................. 132
Insurance Fund ...................................................................................................................................................................... 133
SB1 Road Repair Fund ......................................................................................................................................................... 134
Debt Service Fund ................................................................................................................................................................. 135
Agency Funds ........................................................................................................................................................................... 137
Combining Statement of Changes in Assets and Liabilities – Agency Funds ................................................................ 138-140
Statistical Section
Statistical Section – Overview (Unaudited) .............................................................................................................................. 142
Financial Trends:
Net Positions by Component – Last Ten Fiscal Years .......................................................................................................... 143
Changes in Net Position – Last Ten Fiscal Years ........................................................................................................... 144-145
Governmental Activities Tax and Franchise Revenues by Source – Last Ten Fiscal Years ................................................. 146
Fund Balances of Governmental Funds – Last Ten Fiscal Years ................................................................................... 147-148
Revenues, Expenditures and Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years ................................................................................................................................................. 149-150
General Fund Operating Expenditure Trends by Type – Last Ten Fiscal Years ................................................................... 151
Revenue Capacity:
Assessed and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years ........................................................... 152
Property Tax Rates – Last Ten Fiscal Years .......................................................................................................................... 153
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City of San Luis Obispo, California
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2019
Table of Contents Page 4
Page
Principal Property Taxpayers – Current Year and Nine Years Ago ...................................................................................... 154
Secured Property Tax Roll Levies and Collections – Last Ten Fiscal Years ......................................................................... 155
Schedule of Taxable Sales and Permits by Category – Last Ten Calendar Years ................................................................. 156
Historical Sales and Use Tax Rates ....................................................................................................................................... 157
Schedule of Business Tax Certificates Issued ....................................................................................................................... 158
Debt Capacity:
Per Capital Outstanding Debt by Type – Last Ten Fiscal Years ........................................................................................... 159
Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt per Capita
Last Ten Fiscal Years ........................................................................................................................................................ 160
Direct and Overlapping Long-Term Debt – Fiscal Year Ended June 30, 2018 ..................................................................... 161
Computation of Legal Debt Margins – Last Ten Fiscal Years .............................................................................................. 162
Revenue Bond Coverage:
Water Fund – Last Ten Fiscal Years ..................................................................................................................................... 163
Parking Fund – Last Ten Fiscal Years .................................................................................................................................. 164
Demographic and Economic Information:
Demographic and Economic Statistics – Last Ten Fiscal Years ........................................................................................... 165
Principal Employers – Current Year and Nine Years Ago .................................................................................................... 166
Regular Authorized Positions – Last Ten Fiscal Years ......................................................................................................... 167
Operating Information:
Operating Indicators and Capital Asset Statistics by Function – Last Ten Fiscal Years ................................................ 168-172
Water System Statistical Data ............................................................................................................................................... 173
Water and Sewer Rates – Last Ten Fiscal Years ................................................................................................................... 174
Water System Ten Largest Users – Fiscal Year Ended June 30, 2018 .................................................................................. 175
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INTRODUCTORY SECTION
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vi
City of San Luis Obispo, Finance and Information Technology, 990 Palm Street, San Luis Obispo, CA, 93401‐3249, 805.781.7130,
slocity.org
Date
TO: The Honorable Mayor and Members of the City Council and Citizens of the City of San Luis
Obispo
FROM: Derek Johnson, City Manager
Brigitte Elke, Finance Director
SUBJECT: TRANSMITTAL MEMORANDUM FOR COMPREHENSIVE ANNUAL FINANCIAL
REPORT FOR FISCAL YEAR 2018-19
REPORT PURPOSE AND ORGANIZATION
We are pleased to submit the City of San Luis Obispo’s 2018-19 Comprehensive Annual Financial Report
(CAFR). Section 810 of the City’s Charter requires that an audit of the City financial records be conducted each
year by an independent certified public accountant. Such an audit has been performed and this report is being
published as part of the requirement for the fiscal year ended June 30, 2019.
City management assumes full responsibility for the completeness and reliability of the information contained
in this report. We attest that, to the best of our knowledge, the data presented is accurate in all material respects
and all statements and disclosures needed for the reader to obtain a thorough understanding of the City’s financial
activities have been included.
To provide a reasonable basis for making these representations, management of the City has established a
comprehensive internal control framework that is designed both to protect the government’s assets from loss,
theft, or misuse and to compile sufficient and reliable information for the preparation of the City’s financial
statements in conformity with U.S. Generally Accepted Accounting Principles (GAAP). Because the cost of
internal controls should not outweigh their benefits, the City’s comprehensive framework of internal controls
has been designed to provide reasonable rather than absolute assurance that the financial statements will be free
from material misstatement.
Historically, the City’s audited financial statements have been completed within 180 days of the end of the fiscal
year and posted by December 31st. During FY2018-19, the City implemented a new Enterprise Resource
Planning (ERP) system, which included accounting and financial reporting functions as well as the
implementation of a Human Capital Management module including payroll. The implementation was complex
and encountered substantial issues, which delayed staff’s ability to close the year and ensure all transactions were
posted and reflected appropriately and accurately. The issues encountered during 2018-19 are not expected to
recur as many have been rectified and staff does not anticipate delayed financial statements in the future.
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TRANSMITTAL MEMORANDUM
Audited Financial Statements
This is the first year that the City’s financial statements have been audited by Badawi and Associates, a firm of
licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that
the financial statements of the City for the fiscal year ended June 30, 2018 are free of material misstatement.
The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements; assessing the overall accounting principles used and significant estimates1 made by
management; and evaluating the overall financial statement presentation.
The independent auditor concluded that the City’s financial statements present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major fund, and the
aggregate remaining fund information of the City as of June 30, 2019, and the respective changes in financial
position, and, where applicable, cash flows therefor for the year then ended in accordance with accounting
principles generally accepted in the United States of America. The independent auditors’ report is presented as
the first component of the financial section of this report.
“Single Audit” for Federal Grant Programs. The independent audit of the financial statements of the City was
part of a broader, federally mandated “Single Audit” designed to meet the special needs of Federal grantor
agencies. The standards governing Single Audit engagements require the independent auditor to report not only
on the fair presentation of the financial statements, but also on the audited government’s internal controls2 and
compliance with legal requirements, with special emphasis on the administration of Federal awards (such as
Transit funding). This audit has been completed and will be filed and distributed to appropriate agencies to meet
Federal requirements. Additionally, this separately prepared report will be presented to the City Council
concurrent with the CAFR and is available from the Department of Finance upon request.
GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the
basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of
transmittal is designed to complement the MD&A and should be read in conjunction with it. The City’s MD&A
can be found immediately following the report of the independent auditors.
Organization of Report
The comprehensive annual financial report is presented in three sections: introductory, financial, and statistical.
SECTION ONE - The Introductory section includes this transmittal memorandum and other information to
familiarize the reader with the City, including a directory of officials and advisory bodies, the City's mission
statement and organizational values, and charts.
SECTION TWO - The Financial section consists of five parts: the independent auditors’ report; 1)
Management’s Discussion and Analysis; 2) the basic financial statements including the government-wide
financial statements, 3) fund financial statements, and 4) notes to the financial statements; 5) required
supplementary information; and additional supplementary statements and schedules including the local half-
percent sales tax, non-major governmental funds, and agency funds.
1 Significant estimates included in the financial statements are made in conformity with GAAP.
2 Internal controls are systematic measures instituted by an organization to conduct its business in an orderly and efficient manner; safeguard its assets and resources; deter and detect
errors, fraud, and theft; ensure accuracy and completeness of its accounting data; produce reliable and timely financial and management information; and ensure adherence to its policies
and plans.
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TRANSMITTAL MEMORANDUM
SECTION THREE - The Statistical section includes selected unaudited financial and demographic information
generally presented on a multi-year basis. This information includes financial trends, revenue capacity, debt
capacity, demographics, and economic and operating information.
As required by GAAP, these financial statements present the City (the primary government) and its component
units (entities for which the government is financially accountable). Blended component units (although legally
separate entities) are in substance part of the government's operations, and so data from these units are combined
with data of the primary government. The City has one component unit, the San Luis Obispo Capital
Improvement Board, which provides financing for the construction and acquisition of City facilities. The Board
is comprised solely of members of the City Council. Activities of the Board are accounted for in the applicable
City governmental or enterprise funds.
PROFILE OF THE CITY OF SAN LUIS OBISPO
With a population of 46,802, the City is located eight miles from the Pacific Ocean and is midway between San
Francisco and Los Angeles at the junction of Highway 101 and scenic Highway 1.
The City serves as the commercial, governmental, and cultural hub of California’s Central Coast. San Luis
Obispo is the seat of San Luis Obispo County and a number of Federal and State regional offices and facilities
are located within the City along with California Polytechnic State University and Cuesta College.
One of California’s oldest communities, the City began with the founding of Mission San Luis Obispo de Tolosa
in 1772 by Father Junipero Serra as the fifth mission in the California chain of 21 missions. It was first
incorporated in 1856 as a General Law City and became a Charter City in 1876. As a Charter City, San Luis
Obispo has more local authority than cities that incorporate under the general laws of the State of California.
The Charter is the City’s governing document and any changes must be approved by the voters. The City’s
Charter has been amended several times since its adoption, most recently in August 2011.
Form of Government
As set forth in the City Charter, the City operates under the “Council-Mayor-City Manager” form of government.
The City Council has the authority to make and enforce all laws and regulations with respect to municipal affairs,
subject only to the limitations of the City Charter and the State Constitution. There are four Council members,
who are elected at-large and serve overlapping, four-year terms. The Mayor is also elected at-large for a two-
year term and serves as an equal member of the Council. The City Council appoints the City Manager and City
Attorney. All other department heads are appointed by the City Manager.
City Services
The City provides a wide range of municipal services, including police and fire protection, water and sewer
utilities, street and parks maintenance, public transportation, parking, parks and recreation, planning, building
and safety, and other general government services. Financial data for all funds through which services are
provided by the City have been included in this report. Several municipal services are provided through other
governmental agencies or private utility companies, including:
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TRANSMITTAL MEMORANDUM
Service Agency
Courts, Health and Social Services County of San Luis Obispo
Elementary and Secondary Schools San Luis Coastal Unified School District
Community College San Luis Obispo County Community College District
Solid Waste Collection and Disposal San Luis Garbage Company
Gas, Electric and Telephone Private Utility Companies
Budgetary Policy and Control
Budgets are legally adopted annually by the City Council by resolution and are prepared for each fund in
accordance with its basis of accounting. As provided under City Charter, the City Manager is responsible for
preparing the budget and for its implementation after adoption. Financial reports are posted on-line on a quarterly
basis, and formal financial status updates are held with Council every six months (Mid-Year Review). With the
FY2019-20 budget, staff implemented quarterly reports to the City Council with a more in-depth status report
for the first six months of the fiscal year (Mid-Year).
Since the City uses a two-year Financial Plan and budget, operating appropriations not expended during the first
year may be carried forward into the second year for specific purposes with the approval of the City Manager.
(When applicable, these amounts are shown as assigned for subsequent year expenditures in the financial
statements.) At the end of the final year of the two-year plan, operating appropriations lapse unless they are
committed by contract or purchase order. Multi-year budgets are adopted for capital projects as necessary.
The City Council has the legal authority to amend the budget at any time during the fiscal year. The City Manager
has the authority to make administrative adjustments to the appropriated budget if those changes will have neither
a significant policy impact nor affect budgeted year-end fund balances. The City's budgetary policies are more
fully described in Note 1 of the financial statements.
Expenditure and budgeting details are maintained by the City for each fund and department by program area at
the line item level. Budgetary control is exercised through a computerized system, which interfaces with the
City's general ledger. The system maintains an ongoing record of budget balances throughout the year based on
actual expenditures and unfilled purchase orders. Open purchase orders at year-end are reported as committed
fund balance.
It is the City's policy to maintain an unassigned fund balance in the General Fund of at least 20% of operating
expenditures. This policy objective has been achieved for fiscal year 2018-19. The City maintains a similar
policy for working capital balances in the water, sewer, and parking enterprise funds. The Fleet Replacement
Fund reserve requirement is $500,000 and the Information Technology (IT) Replacement Fund reserve
requirement is $400,000. The goal has been met for these funds in 2018-19.
FACTORS AFFECTING FINANCIAL CONDITION
The information presented in the financial statements is perhaps best understood when it is considered from the
broader perspective of the specific environment within which the City operates.
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TRANSMITTAL MEMORANDUM
Local Economic Environment
Historically, the City has experienced a relatively stable economy, largely insulated from economic downturns
in other parts of the State or the nation due to major State and federal employers such as the California
Polytechnic State University (Cal Poly), California Men’s Colony, California Department of Transportation (Cal
Trans) District 5 offices, the Regional Water Control Board, and Camp San Luis.
Employment. Employment in the San Luis Obispo County region has historically been stabilized by a large
government presence and diversity. As noted above, the State has a major university, correctional facility, and
other regional offices located in the community. The County government and school districts are also major
employers. Other major employers include two major hospital facilities, several engineering and software
companies, and Pacific Gas and Electric. The recent announcement of the pending closure of the Diablo Canyon
Nuclear Power Plan presents some uncertainties and adjustment for the region over the coming years as the
process takes place. However, the passage of SB1090 and the monetary allocation for economic development
from the measure will assist in the transition. The City received $1.8 million which was allocated towards
economic development and capital priorities.
As measured by the labor market, the local economic fared well in 2018-19. San Luis Obispo County continues
to maintain solid employment levels and unemployment fell below national and state levels to a record low. For
all of 2019 total nonfarm employment in San Luis Obispo County increased 1.2% with unemployment being
near historic lows at 2.7%. The industry sectors leading the job gains in the region accounting for 95% of net
nonfarm jobs were Leisure and Hospitality and Education and Health; sectors associated with an expanding
economy, as well as a growing population and subsequent spending base.
Key Revenue Sources. As the commercial, governmental, and cultural hub of San Luis Obispo County, the City
is fortunate to attract a diverse array of strong revenue sources. The top three revenue sources for the City are
1) Sales Tax, 2) Property Tax, and 3) Transient Occupancy Tax (TOT). Since 2006, the City’s voters have also
approved a transaction tax of half-a-percent (Local Revenue Measure) to provide for an array of City services.
In November 2018, the City voters also approved Cannabis tax allowing this new industry to take hold in the
City. The first delivery business opened in November 2019 and retail businesses are expected to open in the later
part of 2020.
Long-Term Financial Planning.
The City engages in a number of activities focused on long-term financial planning, including:
Long-Term Fiscal Forecast. Before the two-year Financial Plan and budget process begins, the City Council
reviews long-term fiscal forecasts for the General Fund and the Enterprise Funds to help set the stage for long-
term decision-making. The purpose of the forecast is to facilitate long-term fiscal health and to identify the
funds’ ability – on an order of magnitude basis – to maintain current services and existing assets and look at the
opportunity to fund new initiatives. The 2018-23 forecast was completed in April 2018, before the City Council
considered the 2018-19 Financial Plan Supplement for adoption. Due to CalPERS policy changes and rapidly
increasing payment requirements to pay down pension unfunded liabilities, a ten-year forecast was developed as
part of the City’s Fiscal Sustainability and Responsibility Major City Goal and in April 2018 the City Council
adopted a three-year fiscal health response plan beginning in fiscal year 2018-19 to address long-term effects of
the pension reform. This plan will be closely monitored, and should projections and assumptions hold, the City
will avoid over$19 million in interest costs.
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TRANSMITTAL MEMORANDUM
Major City Goals and Other Important Objectives. The City Council adopts Major City Goals and Other
Important Objectives as an integral part of the Financial Plan. These goals address the highest priority needs
and community-wide interests. The Financial Plan is the City’s main tool for programming implementation of
these goals, plans, work programs, and policies by allocating the resources necessary to achieve them.
The following is a brief summary of the four major City goals and one other important objective adopted by the
Council as part of the 2017-19 Financial Plan and in effect for 2018-19. Detailed work programs were prepared
for each of them and their status is updated three times each year through presentation to the Council.
Major City Goals:
Housing. Facilitate increased production of all housing types designed to be economically accessible
to the area workforce and low and very low-income residents, through increased density and proximity
to transportation corridors in alignment with the Climate Action Plan.
Multi-Modal Transportation. Prioritize implementation of the Bicycle Master Plan, pedestrian safety,
and the Short-Range Transit Plan.
Climate Action. Implement Climate Action Plan, assess requirements to achieve a “net-zero carbon
City” target, and implement cost-effective measures, including implementation of a Sustainability
Coordinator and formation of a Green Team.
Fiscal Sustainability & Responsibility. Continue to implement the City’s Fiscal Responsibility
Philosophy with a focus on economic development and responsiveness, unfunded liabilities, and
infrastructure financing.
Other Important Objective:
Downtown Vitality. Continue to improve safety, infrastructure investment, and maintenance in the
Downtown and support Downtown Association’s proposal to consider a Downtown improvement
district.
FISCAL HEALTH RESPONSE PLAN
FINANCIAL CONDITION OVERVIEW
Financial results, both for revenue and expenditures, for the fiscal year were higher when compared to the budget
estimates in the areas of the City’s operations.
At June 30, 2019, the total General Fund balance was $30.1 million; a modest increase of $500,000 over 2017-
18. Of this amount, $51,636 are non-expendable and represent prepaid items; $9.9 million is committed for
General government programs; $14 million is assigned and includes $11 million for the 20% required operating
reserve, $1 million in revenue stabilization, $1.4 million for the Section 115 Trust Fund, and $531,000 for
Development Services. Finally, $6.1 million is classified as unassigned at fiscal year-end. Per City Council
direction, and in conjunction with adopted Council policies, staff will provide a recommendation for the use of
any available fund balance for one-time allocations during the review of the year-end financials. However,
through the City’s adopted fiscal health response plan, the Council has given direction to aggressively pay down
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TRANSMITTAL MEMORANDUM
CalPERS unfunded liabilities with available one-time funding which will be reflected in the recommended
action.
Continue to Focus on Sustainability and Long-term Fiscal Health
As part of the fiscal health response plan, the City Council considered the formation of a Section 115 Pension
Trust fund to further safeguard the City from changes by CalPERS related to unfunded liabilities and possible
fluctuations in the economy and income streams to the City. For that purpose, the City has set aside $1.4 million
from one-time funding available at the end of 2017-18 to seed the trust fund in March 2020.
Revenue Base Growth. Since the Great Recession, the country has experienced an unprecedented long-term
expansion that continued in 2018-19. Sales tax (including the Half Percent Sales Tax Measure), Property Tax
and Transient Occupancy Tax (TOT) account for 50% of all funding sources in the General Fund. All of these
revenues have shown slow but steady growth over the past several years with Property Tax seeing the largest
increase. This growth is expected to continue into FY2019-20 as signs of a recession have subsided. However,
the City took a cautious approach to its forecast due to the slowing of sales tax revenue to a growth factor of
around 1.5%. Development related fee revenue continues to see significant growth as development activity is at
unprecedented levels in the City with two Community Services Districts beginning construction and housing
continuing as a major City goal and new State mandate. However, a cooling of the real estate market could trickle
into private development slowing within the community and reflect in the revenue growth. By policy, the City
of San Luis Obispo has set the cost recovery fees for development activity at 100%.
Containment of Operating Costs. The City’s efforts to control costs are ongoing. The City implemented 2nd and
3rd tier retirement benefit programs and now 59% of the workforce is enrolled in those tiers of the retirement
plans. These actions have been instrumental in helping the City contain current costs and long-term liabilities
related to retirement benefit programs. The City’s adopted Fiscal Health Response plan and the direction to pay
down the unfunded liability as much as possible, in addition to negotiated additional CalPERS contributions
from employees, will assist in managing the liability and pension cost over the long run.
Fiscal Health Response Plan
The purpose of the plan was to establish a three-year framework to respond to the long-term impacts of the
significant increases in required pension contributions to the CalPERS retirement system. The plan is a specific
deliverable and is structured in a manner to provide guidance for budgetary action in FY 2018-19 as well as the
FY 2019-21 Financial Plan.
Nonspendable 51,636$
Assigned to:
Contingency fund (20% Minimum reserve) 13,418,400
General Government 9,908,932
Development services 531,000
Unassigned 6,185,574
Total fund balance 30,095,542$
General Fund - Fund Balance June 30, 2019
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TRANSMITTAL MEMORANDUM
Through the plan, the City addresses a $8.9 million ($7.5 million from the General Fund and $1.4 million from
the Enterprise Funds) budget gap over the three-year period. There are three key components that have been
identified to be accomplished:
The FY2018-19 financials show that the City was able to implement the first-year plan deliverables and maintain
within the allocated budget appropriations.
Infrastructure and Facilities Maintenance. The estimated cost of adequately maintaining, repairing, or
replacing existing General Fund facilities, infrastructure and equipment exceeds $10 million annually. This
excludes any enhancements or “betterments.” As part of the Fiscal Sustainability and Responsibility Major City
Goal, the City has established a ten-year Capital Improvement Program projection to prioritize limited
investments. Capital Improvement Program allocations for the fiscal year were fully funded by the voter
approved Local Revenue Measure half-cent sales tax. Approximately 70% of the Local Revenue Measure sales
tax is committed to the Capital Improvement Program.
As part of the City of San Luis Obispo’s comprehensive, long-range review of city services and infrastructure
needs, the City has identified a financial gap of approximately $15 million annually. The city services and
infrastructure needs have been identified through a number of adopted plans including the general plan, bicycle
transportation plan, downtown concept plan, and mission plaza concept plan. Each plan represents hours of
community input and a vision to maintain and improve the San Luis Obispo now and into the future.
The existing Local Revenue Measure (half-cent sales tax) is used to deliver basic city services and maintenance
of existing infrastructure and is insufficient to implement the service and infrastructure identified by the
community. The Local Revenue Measure will sunset in 20203 if not renewed by the residents.
The City launched SLO Forward as a conversation with the community to share the information
and to collect their feedback on what their highest priorities are. The results of that feedback is
anticipated to be shared with the City Council in June, 2020. The City Council
will consider placing a ballot measure for the renewal of the Local Revenue
Measure at a rate that aligns the financial resources needed to deliver the service
and infrastructure the community prioritizes most.
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TRANSMITTAL MEMORANDUM
Ongoing Commitment to Half Percent Sales Tax Measure Priorities (Essential Services Measure)
The City remains committed to the priorities for the use of the half percent sales tax measure as identified by the
community. They include public safety, senior services, code enforcement, neighborhood street paving, open
space preservation, traffic congestion relief and flood protection. The following table summarizes how the half
percent sales tax measure funds were used during fiscal year 2018-19.
Total expenditures during 2018-19 amounted to $12.9 million (including encumbrances and carryovers); the
remaining balances of these resources are designated for future year expenditures. A more detailed schedule of
half percent sales tax measure sources and uses is provided in the Financial Section of this report.
Half Percent Sales Tax Measure Expenditures
2018-19
Operating Capital
Programs Projects* Total
Preservation of Essential Services
Public Safety 575,310 25,901 601,211
Community Development 269,025 795,165 1,064,190
Transportation 1,085,216 3,366,119 4,450,335
Leisure, cultural and social services 187,245 492,825 680,070
General Government - 1,368,994 1,368,994
Total $ 2,116,796 $ 6,049,004 $ 8,165,800
Half Percent Sale Tax Measure Revenues & Uses Summary
Revenues:
Sales and use tax - Measure G 1/2 Cent add-on tax $ 8,325,230
Use of money and property 102,933
Total Revenues 8,428,163
Uses:
Operating Programs (2,116,796)
Capital Projects (6,049,004)
Total Uses (8,165,800)
Excess of revenues over expenditures 262,363
Prior Sales Tax Measure Balance 6,067,359
Encumbered or designated for carryover for future year expenditures (4,773,675)
Net available for future year appropriations $ 1,556,047
*Detail of Capital Projects is included with other supplementary information in the financial statements, which can be
found on page 107.
xv
TRANSMITTAL MEMORANDUM
RELEVANT FINANCIAL POLICIES
The City of San Luis Obispo has adopted a comprehensive set of budget and financial policies to provide
guidance for all fiscal activities and resource allocations. Although the policies cover virtually every aspect of
financial management, several of these policies are particularly relevant to the understanding of the City’s
financial performance in 2017-18.
Debt Administration Policies
The City’s Capital Financing and Debt Management policies contain general guidelines for refinancing of
outstanding debt. These guidelines call for periodic review of all outstanding debt to determine refinancing
opportunities, particularly to create economic benefit such as lower debt service payment or reduction of
principal.
Information on the City’s outstanding debt issues and other long-term liabilities is provided in Note 6 in the notes
to the financial statements.
In May 2018, the City received affirmation from the nationally recognized statistical rating organization
Standard & Poors Ratings (S&P) that City bond ratings remain “AA” and the rating outlook is stable. S&P’s
long-term credit ratings are assigned on an alphabetic scale from AAA to C. The bond rating AA means that the
City’s investment grade is “quality”. The City’s 2018 Lease Revenue Bonds are rated AA, and the City’s implied
General Obligation bond rating is AA+. Currently, the City of San Luis Obispo has no general obligation debt.
In reaching its decision, S&P’s analysts lauded the City’s “excellent financial management.” The analysis noted
factors that led to their conclusion including (1) active budget monitoring by the City Council and staff, (2)
comprehensive financial policies, and (3) the use of long-term budget planning to provide a solid framework for
managing financial resources through unexpected budgetary challenges during the economic downturn. S&P
analysts noted that the City has robust fiscal management and recovered quickly from the Great Recession.
Budgetary Policies
The City of San Luis Obispo has a policy that requires the adoption of a balanced budget over the two-year
period of the Financial Plan. This means that operating revenues must fully cover operating expenditures,
including debt service. Additionally, ending fund balance (or working capital in the enterprise funds) must meet
minimum policy levels. Under this policy it is allowable for total expenditures to exceed revenues in a given
year but only when fund balance is used to pay for capital improvement plan projects or other “one-time,” non-
recurring expenditures.
Fund Balance and Reserve Policies
The City’s policies recognize the importance of long-range planning in managing the City’s fiscal affairs in order
to provide for stable operations, promote more orderly spending patterns, and assure the City’s long-term fiscal
health. The reserves contained in the General Fund and Enterprise Funds play a pivotal role in this strategy. The
reserve policies call for a minimum fund balance of at least 20% of operating expenditures in the General Fund
and a working capital level of 20% of operating expenses in the Water, Sewer, and Parking Enterprise Funds.
The policies also require the Fleet Management Information Technology Replacement Funds to provide for the
timely replacement of vehicles and equipment as well as IT equipment and software.
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TRANSMITTAL MEMORANDUM
With 2018-19, the City also implemented a revenue stabilization reserve of $1 million in order to counter-act
potential swings in its major revenue sources that remains intact into 2019-20. Additionally, the City retains $1.4
million for the Section 115 Pension Trust fund which will show in subsequent financial reports as a restricted
fund balance.
Long-Term Liabilities and Maintenance of Infrastructure
In 2015, the City Council adopted a guidance to apply one-time funds above policy reserve to unfunded liabilities
and infrastructure. This policy addresses long-term costs and prioritizes allocation of funds to reduce the liability.
With the 2017-19 Financial Plan, the guidance was incorporated into the City’s fiscal policies. Additionally, the
City began addressing the long-term needs of its capital assets and categorizing asset maintenance, asset
replacement, and new assets driven by new development. The City Council received a first presentation of the
long-term need of its infrastructure in early 2018 and the assessment continued into FY 2018-19 with the
beginning stages of the SLOForward effort.
Pension and Other Post-Employment Benefits
Pension Obligations. The City contributes to the California Public Employees’ Retirement System (CalPERS),
an agent multiple-employer public employee defined benefit pension plan. 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 provision and all other requirements are established by State statute and City ordinance.
The amount of the City’s required annual contribution is determined actuarially and is reported to the City via
the Annual Valuation Reports provided by CalPERS for each retirement plan.
It is the policy of the City to fully fund the annual contribution to ensure that the plan will fully meet its obligation
to retired employees on a timely basis. Prepaying the City’s unfunded liability should also reduce overall annual
costs depending on whether approved actuarial assumptions are realized and are not adjusted by the CalPERS’
Board.
As part of its cost reduction strategy, the City has implemented 2nd Tier and the state mandated 3rd Tier retirement
benefit programs for new hires while also requiring all employees to pay at least the full amount of the member
share of the annual retirement contribution. Beginning in 2018-19 and increasing in 2019-20, the City negotiated
further concessions with employee groups to pay into CalPERS which will help to lessen pension impacts to the
City’s budget. The City continues to monitor legal developments and legislation that could positively or
negatively impact the City’s finances.
xvii
TRANSMITTAL MEMORANDUM
All employees currently pay the full employee contribution and the additional contributions agreed to are listed
in the chart below:
Police (Sworn) Employee Contribution Levels to PERS Retirement
(Percent of Salary)
Safety PERS Tier Current Jul-20
Tier 1 (3% @ 50) 13.50% 15%
Tier 2 (2% @ 50) 13.50% 15%
Tier 3 (2.7% @ 57) 14.25% 15.75%
Police (Non-Sworn) Employee Contribution Levels to PERS Retirement
(Percent of Salary)
Miscellaneous PERS Tier Current Jul-20
Tier 1 (2.7% @ 55) 12.50% 14%
Tier 2 (2% @ 60) 12.50% 14%
Tier 3 (2% @ 62) 8.50% 10%
Fire (Sworn) Employee Contribution Levels to PERS Retirement
Safety PERS Tier Current Jul-20
Tier 1 (3% @ 50) 10.50% 12%
Tier 2 (2% @ 50) 10.50% 12%
Tier 3 (2.7% @ 57) 14.25% 15.75%
Employee Contribution Levels (includes appointed officials, department heads, unrepresented
management, unrepresented confidential and non-sworn fire employees) to PERS Retirement
Miscellaneous PERS Tier Current Jul-20
Tier 1 (2.7% @ 55) 9.50% 11%
Tier 2 (2% @ 60) 8.50% 10%
Tier 3 (2% @ 62) 8.50% 10%
Other Post-Employment Benefits (OPEB). The City’s primary OPEB cost obligation is for retiree health
benefits under its election to participate in the CalPERS Health Benefit Program under the “unequal contribution
option.”
When the City joined the CalPERS health plan in 1993, it immediately experienced an increase in the plan
choices available along with a significant reduction in rates. Due to CalPERS purchasing power, the City
continues to experience competitive health care rates. However, as a condition of joining the CalPERS health
program, the City agreed to contribute the minimum monthly amount required by law towards retiree health care
coverage for both active and retired employees. This allows retired employees to purchase health insurance at
the same rate offered to active employees.
Additionally, the City had established certain post-retirement health care benefits available to executive
management employees appointed prior to August 2000. There is only one employee remaining who receives
one-half of the retiree health insurance premiums paid by the City through the City's group health plan. This
provision ceases upon the death of the retired employee or upon the retired employee reaching age 65.
xviii
TRANSMITTAL MEMORANDUM
These OPEB benefits were financed on a pay-as-you-go basis in the past. As directed by Council in May 2008,
the City began fully pre-funding the OPEB obligation via an irrevocable trust in 2008-09. In 2018-19, the City
paid $300,000 towards the OPEB liability in addition to the annual required contribution.
Additional information on the City’s retirement and post-employment benefits can be found in Note 6 and Note
7 in the notes to the financial statements.
MAJOR INITIATIVES
The City continued its efforts on a number of significant initiatives in 2018-19 which had a beneficial effect on
fiscal health and quality of life.
Local Sales Tax Measure. The local half-percent sales tax revenue was approved by City voters with 70% of
the vote in November 2014. As part of the local sales tax measure, the Revenue Enhancement Oversight
Committee (REOC) was established to review, report, and makes recommendations to the City Council regarding
the revenue and expenditures of the City's voter-approved general purpose, half-percent sales tax. The REOC
consists of five members who must be residents and registered voters of the City.
Economic Development Strategic Plan.
The City’s 2012 Economic Development Strategic Plan (EDSP) provides a prioritized list of strategic actions
aimed at overcoming barriers to job creation and nurturing the conditions, relationships, and resources that enable
and encourage the private sector to create head of household jobs on a consistent basis while continuing to
support the broader economy of the City. To create and implement these efforts, the EDSP identified the City’s
fee program and the lack of infrastructure in key areas as barriers to overcome and is in the process of
implementing strategies to improve the economic environment for job creation in the City. The EDSP builds on
the San Luis Obispo County Economic Strategy, which identified five industry clusters with the greatest potential
to drive local and regional economic prosperity, and job creation. The EDSP focuses on partnerships and
collaborative efforts with community partners including the Economic Vitality Corporation, the Chamber of
Commerce, the Small Business Development Center, California Polytechnic State University and Cuesta
College.
The planned closure of Diablo Canyon Nuclear Power Plant catalyzed a study of the economic and fiscal impacts
on the region and the City, an updated Economic Development Strategic Plan with identified strategies to address
impacts of the closure, and a comprehensive plan of how to invest closure settlement funds to be received under
SB1090, and informed by SB 968.
Downtown Development Projects
The Downtown Vitality Other Important Objective sets initiatives to be completed during the 2017-19 Financial
Plan to 1) maintain and improve Downtown infrastructure, 2) maintain and improve public safety in the
Downtown, 3) develop implementation plan for adopted Downtown Concept and Mission Plaza Master Plans,
and 4) develop a policy framework to ensure the continued vitality and success of Downtown.
xix
TRANSMITTAL MEMORANDUM
AWARD FOR EXCELLENCE IN FINANCIAL REPORTING
The Government Finance Officers Association of the United States and Canada (GFOA) has awarded a
Certificate of Achievement for Excellence in Financial Reporting to the City for our CAFR for the fiscal year
ended June 30, 2018.
The Award Program
The Certificate of Achievement is a prestigious national award recognizing conformance with the highest
standards for preparation of State and local government financial reports.
In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and
efficiently organized comprehensive annual financial report whose contents conform to program standards. This
report must satisfy both U.S. generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. The City has received a Certificate of
Achievement each year since 1984. We believe our current CAFR continues to conform to the Certificate of
Achievement program requirements, and we are submitting it to GFOA to determine its eligibility for another
certificate.
Value of Program Participation. There are benefits to participating in these programs beyond simply receiving
recognition for the City’s efforts. For example, by striving to meet program standards and goals, the City
produces better reports. Additionally, as part of the review process, comments for improvement from other
municipal finance professionals who review the reports from a “fresh” perspective are received. Staff believes
that this results in continuous improvements in reporting the City’s financial results to elected officials, staff,
and other interested parties such as bondholders, credit agencies, and the public at-large.
ACKNOWLEDGMENTS
The preparation and development of this report would not have been possible without the year-round dedication
of the Finance Division staff and their special efforts, working in conjunction with the City's independent
auditors, to produce this document.
We would like to take this opportunity to compliment all those staff members within the Finance Department as
well as in the other departments and our independent auditors who were associated with the preparation of this
report. We would also like to thank the City Council for the continued support and dedication in planning and
conducting the financial operations of the City in a fiscally responsible and progressive manner.
Derek Johnson, City Manager
Brigitte Elke, Finance Director
xx
DIRECTORY OF OFFICIALS AND ADVISORY BODIES
CITY COUNCIL
Heidi Harmon Mayor
Aaron Gomez Vice Mayor
Carlyn Christianson Council Member
Andy Pease Council Member
Erica A. Stewart Council Member
ADVISORY BODIES
Active Transportation Committee
Administrative Review Board
Architectural Review Commission
Construction Board of Appeals
Council Compensation Committee
Cultural Heritage Committee
Housing Authority
Human Relations Commission
Investment Oversight Committee
Jack House Committee
Mass Transportation Committee
Parks and Recreation Commission
Personnel Board
Planning Commission
Promotional Coordinating Committee
Revenue Enhancement Oversight Commission
Tourism Business Improvement District Board
Tree Committee
APPOINTED OFFICIALS AND DEPARTMENT HEADS
Appointed Officials
Derek Johnson City Manager
J. Christine Dietrick City Attorney
Department Heads
Shelly Stanwyck Assistant City Manager/Acting Public Works Director
Greg Hermann Deputy City Manager
Michael Codron Director of Community Development
Brigitte Elke Director of Finance
Keith Aggson Fire Chief
Monica Irons Director of Human Resources
Deanna Cantrell Police Chief
Aaron Floyd Director of Utilities
Greg Avakian Director of Parks & Recreation
xxi
MISSION STATEMENT
SAN LUIS OBISPO STYLE
Quality with Vision WHO ARE WE?
People Serving People
A team that puts high value on each citizen it serves.
Providers of programs that meet basic service needs of each citizen.
Enhancers of the quality of life for the community as a whole.
WHAT DO WE STAND FOR?
Quality in all Endeavors – Pride in Results
Service to the community – the best – at all times.
Respect – for each other and for those we serve.
Value – ensuring delivery of service with value for cost.
Community involvement – the opportunity to participate in attaining the goals of the City.
WHERE ARE WE GOING?
Into the Future with a Design
Planning and managing for levels of service consistent with the needs of the citizens.
Offering skills development and organizational direction for employees in order to improve the delivery of
municipal services.
Developing sources of funding and establishing a sound financial management program which will result in
fiscal independence and flexibility in the delivery of City services.
Providing the residents of the City with accurate and timely information on issues which affect them, and
encouraging the full utilization of City services.
Promoting the City as a regional trade, recreational and tourist center and improving the quality of life for
residents and visitor.
xxii
ORGANIZATIONAL VALUES
We, as an organization, embrace opportunities to improve our services and the quality and effectiveness of our
relationships with the community and our teams. The following values guide and inspire our efforts.
Shared Vision, Mission and Goals
We have a sense of common purpose and direction pursued with passion and translated into concrete actions.
Service
We are dedicated to the best use of resources to fulfill identified community goals and needs.
Leadership and Support
We recognize that the ability to lead can be found at all levels and that to create an environment to succeed requires
leading by example.
Communication
We foster open and clear discussion that encourages the willingness to speak up and to listen, within a framework of
respect and understanding.
Team Players
We encourage effective working relationships within and between departments and the public to address issues and
achieve valuable results.
Honesty, Respect and Trust
We honor commitments, acknowledge legitimate differences of opinion and accept decisions reached with integrity.
Initiative and Accountability
We take personal responsibility to do what needs to be done and report the results in a straightforward manner.
Innovation and Flexibility
We are open to change and willing to try new ways to fulfill the organization’s vision, mission, and goals more
effectively.
xxiii
Employee Development and Recognition
We encourage and support each employee to improve relevant job skills and celebrate personal and team
accomplishments.
Stewardship and Ethics
We promote public trust by using City resources wisely, and through consistent fulfillment of these values.
xxiv
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xxvi
FINANCIAL SECTION
xxvii
xxviii
INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and Members of the City Council
of the City of San Luis Obispo
San Luis Obispo, California
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-
type activities, each major fund, and the aggregate remaining fund information of the City of San Luis
Obispo, California (City) as of and for the year ended June 30, 2019, and the related notes to the
financial statements, which collectively comprise the City’s basic financial statements as listed in the
table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall presentation of
the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
To the Honorable Mayor and Members of the City Council
of the City of San Luis Obispo
San Luis Obispo, California
Page 2
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major
fund, and the aggregate remaining fund information of the City as of June 30, 2019, 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.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis, budgetary comparison information, pension plan and OPEB
plan information on pages 5-22 and 92-104 be presented to supplement the basic financial statements.
Such information, 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.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City’s basic financial statements. The introductory section, half percent sales
tax measure funding schedule, combining and individual nonmajor fund financial statements,
budgetary comparison schedules and statistical section, are presented for purposes of additional
analysis and are not a required part of the basic financial statements.
The half percent sales tax measure funding schedule, the combining and individual nonmajor fund
financial statements and budgetary comparison schedules on pages 107-140 are the responsibility of
management and were derived from and relate directly to the underlying accounting and other records
used to prepare the basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and certain additional procedures,
including comparing and reconciling such information directly to the underlying accounting and other
records used to prepare the basic financial statements or to the basic financial statements themselves,
and other additional procedures in accordance with auditing standards generally accepted in the
United States of America. In our opinion, the half percent sales tax measure funding schedule, the
combining and individual nonmajor fund financial statements and budgetary comparison schedules
are fairly stated in all material respects in relation to the basic financial statements as a whole.
2
To the Honorable Mayor and Members of the City Council
of the City of San Luis Obispo
San Luis Obispo, California
Page 3
The introductory and statistical sections have not been subjected to the auditing procedures applied in
the audit of the basic financial statements and, accordingly, we do not express an opinion or provide
any assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated Month XX,
2019, 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 to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to provide an opinion on
internal control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the City’s internal control
over financial reporting and compliance.
Badawi and Associates
Certified Public Accountants
Berkeley, California
Month XX, 2019
3
4
Management’s Discussion and Analysis
Overview of the Financial Statements
The discussion and incorporated analysis in this document are intended to serve as an introduction to the City’s basic
financial statements, which include the following components: (1) government-wide financial statements, (2) fund
financial statements and (3) notes to financial statements. This report also contains required supplementary
information (RSI) as well as other supplemental financial information.
Government-wide Financial Statements. This set of statements is designed to provide readers with a broad overview
of the City’s finances, in a manner similar to private-sector business reporting.
The Statement of Net Position presents financial information on all the City’s assets/deferred outflows of sources and
liabilities/deferred inflows of sources, with the difference reported as net position. Over time, increases or decreases
in net financial position may serve as a useful indicator of whether the financial position of the City is improving or
declining. According to GASB 68, the Statement of Net Position reported for fiscal year 2018-19 considers the City’s
long-term pension liabilities, effectively decreasing the City’s net financial position.
The Statement of Activities presents changes in the government’s net position during the most recent fiscal year. All
changes in net position are reported during the period when the underlying events giving rise to the change occur,
regardless of the timing of the related cash flow. Thus, revenues and expenses are reported in this statement for some
items that will only result in cash flows in future fiscal periods such as revenue pertaining to uncollected taxes.
The City’s government-wide financial statements distinguish the functions of the City that are principally supported
by taxes and intergovernmental revenues (governmental activities) from functions that are intended to recover all or a
significant portion of their cost through user fees or that are required by grantor agencies or City policies to be
accounted for in this fashion (business-type activities).
The governmental activities include: (1) public safety, (2) transportation, (3) leisure, cultural and social services, (4)
community development and (5) general government support services such as legal services, elections, human
resources, risk management, finance, and information technology. The business-type activities of the City include:
(1) water, (2) sewer, (3) parking operations and the (4) transit program.
As required by U.S. Generally Accepted Accounting Principles (GAAP), these financial statements present the City
(the primary government) and its component units (entities for which the government is considered to be financially
accountable). Blended component units, although legally separate entities, are in substance, part of the government's
operations and data from these units are combined with data of the primary government.
The San Luis Obispo Capital Improvement Board (Board) is reported as a blended component unit in these statements.
The Board provides financing for the construction and acquisition of City facilities. The Board consists of members
of the City Council. Activities of the Board are accounted for in the applicable City governmental or enterprise funds.
Separate financial statements are not prepared for the San Luis Obispo Capital Improvement Board. The City has no
component units that require discrete presentation in accordance with Governmental Accounting Standards Board
(GASB) standards.
5
Management’s Discussion and Analysis
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 can be divided into three categories: (1) governmental funds, (2) proprietary funds, and (3) fiduciary funds.
Governmental Funds. Governmental funds are used to account for essentially the same functions reported as
governmental activities in the government-wide financial statements. However, unlike the government-wide financial
statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources,
as well as on balances of spendable resources available at the end of the fiscal year. Such information reflects financial
resources available in the near future to finance the City’s programs.
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 financial decisions. Both the governmental funds balance sheet and
the governmental funds statement of revenues, expenditures and changes in fund balances provide a reconciliation to
facilitate this comparison between governmental funds and governmental activities.
The City maintains several individual governmental funds organized according to their purpose (general, special
revenue, debt services, and capital projects). Information is presented in the governmental funds balance sheet and in
the governmental funds statement of revenues, expenditures and changes in fund balances. The General Fund and
Capital Outlay Fund are both considered major funds. Data from the major governmental funds are combined into
one aggregated presentation. Individual fund data for each of the non-major governmental funds is provided in the
form of combining statements in the supplementary information section in this report.
Of the major funds, the City adopts an annual appropriated budget for all funds. A budgetary comparison statement
has been provided as required supplementary information to demonstrate compliance with the budget. Budgetary
information for non-major governmental funds with annual budgets has been provided with the fund financial
statements in the supplementary information section in this report.
Proprietary Funds. Proprietary funds are generally used to account for services for which the City charges customers;
either outside customers or internal units/divisions of the City. Proprietary funds provide the same type of information
as shown in the government-wide financial statements, only in more detail.
The only type of proprietary fund the City maintains is enterprise funds. The Water, Sewer, Parking, and Transit
Funds are presented as business-type activities in the government-wide financial statements. The City considers all
four of its enterprise funds to be major funds.
Fiduciary Funds. Custodial funds are the only type of fiduciary funds maintained by the City. These are used to
account for resources held for the benefit of parties outside the primary government. Fiduciary funds are not reflected
in the government-wide financial statements because the resources of those funds are not available to support the
City’s own programs. An example of a custodial fund may include donations provided to the City to be utilized for
specific purposes as well as other funds held in trust of another entity to be utilized for a specific purpose. A specific
example is the Hazardous Materials Task Force Fund, created to provide special fire services around the County,
which is funded by multiple county and city agencies.
6
Management’s Discussion and Analysis
The accounting used for fiduciary funds is much like that used for proprietary funds. The Custodial Funds are
presented with the fund financial statements in the supplementary information section.
Notes to the Financial Statements. The notes provide additional information that is essential to the reader for a full
understanding of the data provided in the government-wide and fund financial statements.
Other Information. In addition to the basic financial statements and accompanying notes, this report also presents
required supplementary information including budgetary comparison schedules, reporting of the half-percent sales tax
measure and more detailed information concerning the City’s net pension liability, schedule of contributions to the
pension plan and progress in funding its obligation to provide other post-employment benefits (OPEB).
Statistical Information. The statistical section presents detailed information as a context for understanding what the
information in the financial statements, notes disclosures, and required supplementary information indicates about the
City’s overall financial health.
Financial Highlights
The following information provides a narrative overview and analysis of the financial activities of the City of San
Luis Obispo (City) for the fiscal year that ended June 30, 2019. It should be read in conjunction with the accompanying
transmittal memorandum and the basic financial statements.
In fiscal year (FY) 2018-19, the City continued to experience slow but steady economic growth. Actual revenues
received were slightly higher than budgeted and, with the implementation of its Fiscal Health Response Plan, the
City’s expenditures ended slightly above budgeted amounts considering the permitted carry-over from fiscal year
2017-18.
Following CalPERS’ announcement regarding policy changes lowering the expected rate of return from 7.5% to 7%,
the City adopted a Fiscal Health Response Plan (FHRP) on April 17, 2018. The three-year plan, spanning fiscal years
2019 through 2021, is designed to align the City’s budget with a long-term fiscal outlook to address the payment of
the unfunded liabilities over the 30-year schedule beginning in 2015 through 2045. The FHRP will assist the City in
containing expenses while finding new ways to accomplish goals and work programs, working with employee groups
regarding compensation agreements, and pursue new revenue sources. In November 2018, the City’s voters approved
the taxation of cannabis, thus allowing the industry to begin business in San Luis Obispo. The first operator opened
in November 2019 and two retailers are expected to begin business in the second half of 2020. A third retailer has
been issued an operating permit and has yet to announce an opening date.
Pursuant to GASB Statement No. 68 (GASB 68), Accounting and Financial Reporting for Pensions, the City’s reports
on the unfunded pension liability on the full accrual basis of accounting in the government-wide financial statements.
The reports also include note disclosure requirements and supplementary schedules as required by GASB 68. The
measurement date for fiscal year 2018-19 pension liabilities is as of the fiscal year ended June 30, 2018. This date
reflects a one-year lag and was used so that these financial statements could be issued in an expedient manner. Activity
(i.e. contributions made by the City) occurring during fiscal year 2018-19 are reported as deferred outflows of
resources in accordance with GASB Statement No. 71.
The following outlines financial highlights for the year, which are detailed in the table on page 8 of the Management
Discussion and Analysis.
7
Management’s Discussion and Analysis
The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows at June 30,
2019 by $320 million (net position). The City’s unrestricted net position was negatively impacted beginning in
fiscal year 2014-15 with the implementation of GASB 68 that requires the disclosure of the City’s unfunded
pension liability.1
In FY2018-19 the City reclassified the OPEB and Pension liability from its Whale Rock Agency Fund to the
City’s Water Fund with a prior period adjustment.
Per the City’s Statement of Net Position, total City-wide assets increased by approximately $14.2 million or 2.8%.
In governmental activities, amounts received from various sources decreased by $749,000; cash and investment
balances increased by $10.6 million; prepaid expenses decreased by $3.1 million and cash held with fiscal agent
increased slightly form 2017-18.
In business-type activities which include Water, Sewer, Parking and Transit, amounts receivable, including dues
from other governments, increased by $1.9 million while cash and investment balances increased by $6.9 million.
Prepaid items increased by $278,500 and cash held with fiscal agents and investments in joint ventures decreased
by $400,000.
City-wide liabilities increased slightly by $322,000 the fiscal year. The increase of $2.7 million in governmental
funds, largely driven by accrued salaries, was offset by a decrease of $2.4 million in the business-type activities.
The Water Fund’s revenue refunding bond in July 2019 contributed to this decrease.
The City’s governmental funds altogether reported combined ending fund balances of $56.7 million.
Approximately $19.7 million or 35% of this total amount is not available for new spending as it is either restricted
for (1) debt service, (2) grant obligations, (3) prepaid insurance obligations, or (4) specific programs like impact
fee programs and general capital outlay. Another $31million is assigned as of June 30, 2019 to meet expenditures
in subsequent years in the form of purchase orders, encumbrances, and unspent appropriations that have been
rolled over into fiscal year 2019-20 in accordance with the City’s budget policies. Per the City’s policy, $14.3
million of the fund balance is assigned to the governmental funds’ 20% operating reserve, the Revenue
Stabilization reserve and the Pension 115 Trust Fund as well as minimum levels in the Fleet and IT Replacement
Funds.
It has to be noted that fund balances have be recharacterized from previous reports in accordance of GASB 54.
For the reporting period ending June 30, 2019, the City had only restricted, assigned, and unassigned fund
balances in the governmental funds.
The total General Fund balance increased by $519,000 to $30.million. After the adjustments to reflect amounts non-
spendable ($52,000), assigned to general government programs ($10.4 million), and designated reserves including
the 20% operating reserve, $6.1 million remain as unassigned balance at June 30, 2019. However, through the Fiscal
Health Response Plan, the City Council has provided direction to aggressively pay-down the City’s unfunded
pension liability and $4.2 million are earmarked for this purpose.
1 More information on the City’s pension plans and obligations. can be found in Note 6 beginning on page 64.
8
Management’s Discussion and Analysis
Government-wide Overall Financial Analysis
Statement of Net Position Net position may serve over time as useful indicator of a government’s financial position.
The following is the condensed statement of net position for the fiscal years ended June 30, 2019 and 2018
For the Fiscal Year ending on June 30, 2019, the City’s combined total assets and deferred outflows of resources were
greater than its liabilities and deferred inflows of resources by $320 million. The largest portion of the City’s net
position reflects its investment in capital assets in the amount of $314 million (e.g. land, buildings infrastructure,
machinery, and equipment), less any related outstanding debt used to acquire those assets. The City uses these capital
assets to provide services to citizens; consequently, these assets are not available for future spending. Although the
City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to
repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate
these liabilities.
A portion of the City’s net position, $21 million, is subject to restrictions imposed by external parties and its use is
determined by those restrictions and contractual obligations. This is the fifth year of the GASB 68 Statement
implementation by the City requiring the disclosure of the City’s long-term pension liability. The governmental
activities and business-type activities contributed a $619,000 and $8.9 million increase to the combined net position.
In addition, a prior year restatement totaling $186,000 also increased the governmental net position resulting in a total
net position of $320.4 million at June 30, 2019.
9
Management’s Discussion and Analysis
Information about changes in net position for fiscal years 2018-19 and 2017-18 is summarized below. Reasons for
the changes are discussed in the following sections for governmental activities and business-type activities.
*Operating grants and contributions in the current year represent the net amount after deducting general government
grants and contributions as this activity nets to zero.
Governmental Activities. The City’s net position in the Governmental activities increased by $864,000 to $122.9
million on June 30, 2019 due to a current year increase of $619,000 and a prior year restatement of $245,000. However,
the City is continuing to see growth in its revenue base and realized savings in the General Fund compared to the level
anticipated in the fiscal year 2018-19 appropriated budget. Contributing to the growth trend is the hospitality and
tourism sector and a healthy real estate market. In 2018-19, private development remained strong and generated
development related permit revenues, as well as development-related impact and in-lieu fees which are held until
needed for planned capital outlay.
The governmental activities and business-type activities contributed a $619,000 and $8.9 million increase to the
combined net position.
10
Management’s Discussion and Analysis
Management’s Discussion and Analysis
Governmental Revenues: Revenues are divided into charges for services and general revenues including applicable
taxes as listed in the following table. Charges for services are revenues directly related to service activity while
operating and capital grants and contributions, and related investment earnings are a mechanism of cost recovery. The
total governmental revenue increased from fiscal year 2018-19 by $6.6 million or 8% which was largely due to fees
related to development services and a favorable year in investment earnings.
General revenues represent 74% of the total revenue and are used to pay costs of providing program services such as
Public Safety.
Top Governmental Activity Revenue Sources. As shown in the graph below, the City’s top five tax revenues
accounted for almost 70% of total revenues, with service charges accounting for another 20% and ancillary revenue
making up the remainder. Generally, the main revenue sources for fiscal year 2018-19 increased from those of the
prior fiscal year. Operating grants can vary from year to year depending on availability and applicable work programs
that can benefit from available grant opportunities.
11
Management’s Discussion and Analysis
The following narrative addresses the significant variances in key revenues from the prior fiscal year:
Sales Tax. Sales Tax increased by $1.9 million over the prior year. This includes the City’s half-cent
transaction tax, commonly referred to as the Local Revenue Measure.
Property Tax. Property tax revenue including the portion in-lieu of VLF increased by $812,000 with
the real estate market continuing strong in the City.
Transient Occupancy Tax (TOT). Increased by $547,000 largely due to a new hotel opening during the
fiscal year and increased room rents.
Charges for Services. These revenues increased by approximately $3.9 million over 2017-18. This is
increase is largely based on very strong private development activity and related development review
fees.
Governmental Activities Program Expenses: Program expenses saw a slight increase from budgeted amounts
ending 2018-19 at $72.4 million. Fiscal Year 2018-19 was the first year of the Fiscal Health Response Plan
(FHRP) that reduced expenditure budgets in all City programs in order to address the City’s pension liability. The
plan has a three-part approach with expenditure reductions or doing business differently being one part. For 2018-
19, most City services lead the effort with adjusting operating expenditures thus ending the fiscal year with only
a slight increase is pointing to a successful first year of the FHRP. In April 2019, the City will send an additional
payment above the annual contribution to CalPERS in the amount of $4.2 million.
The following chart compares program revenues and expenses which is useful when reviewing the costs of
government cost centers:
12
Management’s Discussion and Analysis
Business-Type Activities. The City’s business-type activities are financed through rates for services and have to be
self-sufficient in covering their expenses with their sales and services revenue.
Revenue Sources: Operating revenues for services increased by $1.1 million largely due to growth in service charges
in the Parking fund and increased rates in the Water and Sewer funds as follows:
1. Water revenues. Total operating revenues increased by $1.8 million largely due to water impact fees that
increased by $1.6 million compared to the prior year as a result of an active development environment. The change
in rate methodology and the shift to collecting a larger portion of the cost through the applicable base fee seemed
to have stabilized sales revenue that increased by $460,000.
2. Sewer revenues. Total operating revenue increased by $1.9 million over the prior year with charges from sales
and services contributing $1.4 million. Like in the Water Fund, this is due to the change in rate methodology and
a larger portion of the rate being collected through the base fee. Sewer also saw an increase in development related
fees during 2018-19, ending the year with almost $1.6 million in collected fees. based on an increase in rates in
FY2018-19.
3. Parking Fees. In fiscal year 2018-19 the Parking Fund also saw an increase in revenue though rather modest at
$141,000. The City Council had approved a multi-year rate increase to prepare the fund for the construction of
its fourth Parking structure.
4. Transit Fund. This fund is heavily supported by Federal and State grants that make up most of the funding for
the City’s Transit system. However, 20% of the services are funded by rider fares. In 2018-19, the revenue for
sales increased by $86,000, a 13% increase.
Overall, the change in net position over for the business-type activities amounted to $8.8 million and all funds also
benefited from a strong investment year, yielding net interest allocations.
Program Expenses: Overall, the program expenses for the proprietary funds decreased by $2.8 million with only the
Water Fund experiencing a very slight increase. Most of the savings came from the Sewer Fund with $1.9 million in
operating expense savings. All four funds combined ended 2018-19 with an operating income of $11 million.
A significant change can also be seen in the Water Funds pension liability as reported under GASB 68. The financial
statements for FY2018-19 include a prior period adjustment related to recognizing the pension and OPEB liabilities
connected to the Whale Rock Fund. The key issue in determining whether these items are liabilities of the City or of the
Whale Rock Commission centers around the contractual obligations of the Whale Rock Commission partners and the
actuarially determined liability. Fundamentally, the Whale Rock reservoir is operated and maintained by employees of
the City assigned to this function. These employees participate in the City’s CalPERS retirement program and are included
in the actuarial valuation of the pension liability for all City employees. The Whale Rock Commission does not have its
own contract with CalPERS, nor do the other two partners in the commission, California Polytechnic State University (Cal
Poly) and the California Men’s Colony, directly pay into the City’s plan. As the Whale Rock Commission was formed in
1959 based on agreements between the partners, no other structure such as a JPA was formed that could hire the employees
directly and be a contributing CalPERS agency. The City has previously assigned pension costs and share of unfunded
liability based on a reasonable allocation methodology; however, this methodology does not meet the requirements under
GASB Statement Nos. 68 and 75 for recording these liabilities in the Whale Rock Fund. The financials were therefore
restated, and the liability is now reflected in the City’s Water Fund. Staff intends on addressing this issue with the
Commission and amend the agreement to reflect the liability for the two outside member agencies.
13
Management’s Discussion and Analysis
Financial Analysis of Governmental Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements. The following funds have been classified as either governmental or proprietary fund types.
Governmental Funds. The focus of the City’s governmental funds is on near-term inflows, outflows and balances of
spendable resources. Such information is useful in assessing the City’s financing requirements. In particular,
unassigned fund balance serves as a useful measure of a government’s net resources available for spending at the end
of the fiscal year.
As of June 30, 2019, the City’s governmental funds reported combined ending fund balances of $56.7 million,
or an increase of $3.2 million compared to the prior fiscal year. The total fund balance of the governmental
funds consists of the following:
o Non-spendable fund balance of $344,277 represents prepaid items.
o Restricted fund balance of $19.4 million, which have reserves for capital outlay, impact fees
programs, general government programs, housing and the net balance of the Half Percent Local
Sales Tax.
o Assigned fund balance of $31.1 million, which includes the amounts to be used for specific purposes
of the City but do not meet the criteria to be classified as restricted or committed. Funds in this
category included Contingency funds (20% minimum reserve) and funds to be used for
Development Services.
o Unassigned fund balance of $5.8 million as of June 30, 2019
14
Management’s Discussion and Analysis
Major Governmental Funds. The City has two major governmental funds: the General Fund and the Capital Outlay
Fund. Changes in the General Fund are highlighted in the Financial Highlights section above. The following
information highlights changes in the Capital Outlay Fund:
Capital Outlay Fund. This fund was established to account for the City’s capital facility and infrastructure
improvement program projects where the cost will be at least $25,000. Not counted in this fund are costs that are
programmed into one or more of the following funds: 1) Parkland Development, 2) Transportation Impact Fees, 3)
Open Space Protection, 4) Airport Area Impact Fees, 5) Fleet Replacement, 6) Affordable Housing, 7) Los Osos
Valley Road Sub-Area Fees, 8) Information Technology Replacement and 9) Enterprise Funds. The Capital Outlay
fund relies primarily on resources provided by the General Fund and grants from the state and federal government.
At June 30, 2019, the Capital Outlay Fund experienced a decrease to its fund balance to $1.6 million. The entire
amount of the fund balance has been committed to capital projects or is assigned to liquidate contracts and purchase
orders. The fund balance decreased by $137,000 over the prior fiscal year due to funding for projects being spent
incrementally as the projects proceed to completion. Year-to-year, spending activity in the Capital Outlay Fund may
therefor show significant fluctuations depending on the phase of completion of the various capital projects in progress.
Significant variances from the prior year include:
Non-Major Governmental Funds. Non-major funds include 1) the Debt Service Fund, 2) the Los Osos Valley Road
Sub-Area Fee Fund, 3) the Downtown Business Improvement District Fund, 4) the Tourism Business Improvement
Fund, 5) the Gas Tax Fund, 6) the Transportation Development Act Fund, 7) the Community Development Block
Grant Fund, 8) the Law Enforcement Grants Fund 9) the Public Art Contributions Fund and the 10) Transportation
Impact Fee Fund. These funds are presented in the basic financial statements in the aggregate.
A significant number of these funds represent activity for capital projects. At June 30, 2019, these funds had an
aggregate fund balance of $28 million. Of this total, $19.4 million is restricted for payment of debt service or specific
future capital projects and related funding needs.
The remaining balance of $6 million is assigned for contingency reserves and expenditures in subsequent years. More
information about these aggregated non-major funds can be found in the combining and individual fund statements
and schedules immediately following the required supplementary information.
Proprietary Funds. The City’s four enterprise funds provide the same type of information found in the government-
wide financial statements, but in more detail. Highlights of the annual activity for these funds have already been
presented in the discussion of the business-type activities.
General Fund Budgetary Highlights
A detailed budgetary comparison schedule for the year ended June 30, 2019, is presented as required supplementary
information following the notes to the financial statements. The final budget amounts include changes that were
approved by the City Council through June 30, 2019.
The following summarizes the original budget compared with the adjusted final budget for fiscal year 2018-19. The
adjusted final budget includes Council approved adjustments as well as administrative budget adjustments in
accordance with the City’s adopted fiscal policies and procedures.
15
Management’s Discussion and Analysis
As discussed below, differences between the original budget and the final amended budget reflect the following key
changes:
Key revenue source estimates including sales tax, property tax, transient occupancy tax (TOT) and subventions and
grants were estimated within a five-year fiscal forecast and updated for each fiscal year through the mid-year review.
The following table compares the actual results for revenues, expenditures, and fund balance with the final budget for
the General Fund. As the table shows, revenues exceeded the final budget by nearly $4.0 million, while expenditures
ended slightly above budgeted levels. The largest variance can be seen in the assumed beginning fund balance which
ultimately netted to a positive variance to budget of 31%.
The City’s Local Revenue Measure (half percent sales tax) is a sub-fund of the General Fund. The activities reflected
in the Financial Statements of this report are provided for information regarding the use of the measure according to
the community’s priorities and the City Council’s advisory body overseeing the allocations. For FY 2018-19, the
following revenues and expenditures were recorded:
BUDGETARY HIGHLIGHTS
General Fund Original Budget Final Budget
Positive
(Negative)
Variance
Revenues 70,360,277$ 71,332,510$ 972,233$
Expenditures 67,055,126 74,031,470 (6,976,344)$
Other sources (uses)(2,319,511) (2,319,511) -$
Beginning fund balance 29,576,440 29,576,440 -$
Ending fund balance 30,562,080$ 24,557,969$ (6,004,111)$
General Fund 2018-19
Final Budget
2018-19
Actual
Positive
(Negative)
Variance
Revenues 71,332,510$ 74,524,795$ 3,192,285$
Expenditures 74,031,470 72,462,957 1,568,513
Other sources (uses) (2,319,511) (1,542,736) 776,775
Beginning fund balance 29,576,440 29,576,440 -
Ending fund balance 24,557,969$ 30,095,542$ 5,537,573$
Ending fund balance
Nonspendable 51,636 51,636
Restricted - -
Committed - -
Assigned 23,858,332 23,858,332
Unassigned 6,185,574 6,185,574
Total ending fund balance 24,557,969$ 30,095,542$ 5,537,573$
BUDGET - ACTUAL COMPARISON
16
Management’s Discussion and Analysis
2018-19 Local Revenue Measure Budget to Actual
Budget Actual
Revenue
Transaction Tax $7,373,084 $8,325,230
Investment Income $102,933
Total $7,373,084 $8,428,163
Expenditures Budget Actual Encumbrances Carryover
Operating Programs $2,624,935 $2,116,796
Capital Programs
Open Space Preservation $720,507 $634,918 $14,781 $70,808
Bike & Pedestrian Impr. $1,326,077 $468,517 $43,488 $814,070
Traffic Congestion Relief $325,842 $65,320 $3,578 $256,944
Public Safety $1,720,301 $357,891 $328,765 $1,033,643
Neighborhood Street
Paving
$3,973,648 $3,043,303 $1,451 $955,415
Flood Protection $682,711 $597,634 $3,686 $81,390
P&R / Senior Programs $1,642,977 $679,604 $20,692 $942,683
Other Vital Services $430,619 $201,817 $12,648 $216,154
Total Expenditures $13,447,617 $8,165,800 $429,089 $4,344,586
Capital Assets and Debt Administration
Capital Assets. Capital assets, including infrastructure, are those assets that are used in the performance of the City’s
functions. As of June 30, 2019, the City’s investment in capital assets for its governmental and business type activities
amounts increased to $377.6 million (net of accumulated depreciation).
The investment in capital assets includes open space, park improvements, buildings and improvements, vehicles and
equipment, streets, bikeways, water, wastewater, and storm drain systems.
Major capital asset2 expenditures during the fiscal year included the following:
$2.9 million for roadway improvements
$185,000 for the preservation of the Octagon barn facility
$2.1 million for waterline replacements
$630,000 for upgrades to parking structure
$146,000 for City/County library improvements
2 Additional information on the City’s capital assets can be found in Note 4 on page 55 to the basic financial statements.
Capital Assets (Net of Depreciation) Governmental
Activities
2019-18 2018-17 2019-18 2018-17 2019-18 2018-17
Nondepreciable capital assets 40,241,768$ 42,787,165$ 29,090,402$ 27,060,991$ 69,332,170$ 69,848,156$
Depreciable capital assets (net of
accumulated depreciation ) 157,541,308 153,769,305 150,778,265 153,840,778 308,319,573 307,610,083
Total Capital Assets 197,783,076$ 196,556,470$ 179,868,667$ 180,901,769$ 377,651,743$ 377,458,239$
Business-Type
Activities
Total
17
Management’s Discussion and Analysis
$208,00 for initial work on the Orcutt & Tank Roundabout
$1.2 million for the Margarita sewer lift station
$56,000 for improvements to City Fire stations
$673,000 to purchase a fire pumper for Fire Station 3
$1.7 million for the acquisition and implementation of the City’s new ERP system
Long-Term Debt. At June 30, 2019, the City’s long-term debt had decreased by $5.3 million with $67.7 million still
outstanding. Part of the decrease is the refinancing of three lease revenue bonds into a combined 2018 Revenue
Refunding Bond that will yield an annual debt payment savings of $370,00. Additionally, in July 2018, the City
refinanced the 2006 Water Revenue Bond, yielding savings for the Water Fund and reducing its long-term debt.
The California Government Code provides for a limit on debt secured by real property of 3.75% based on market
value. The City’s debt management policy, however, sets a lower debt limit of 2% of assessed valuation. As of
June 30, 2019, 2% of the assessed valuation was $181,047,237. At June 30, 2019, the City did not have any general
obligation debt subject to the limit. Additional information about the City’s long-term debt can be found in Note 6 to
the basic financial statements.
Economic Factors
Overall, the economic outlook for San Luis Obispo continues to be stable for 2020, but staff continues to monitor
economic trends closely. Though recessionary trends have somewhat abated, continued influences on the markets and
consumer confidence might be early indicators of a further slowing in the economy that could affect the City’s major
revenue sources.
Employment: Employment continues to be strong into 2020 with an unemployment rate close to history lows at 2.7%.
Continued diversification in the job market with new businesses opening will continuingly offer a strong job market.
This is especially true for the two dominating employment sectors of Leisure & Hospitality and Education & Health.
With two new hotels in the heart of San Luis Obispo and several hotels in the planning and building phase, this sector
will continue to attract job growth. The new French Hospital campus will equally offer opportunity for health-related
employment opportunities.
Sales Tax: Sales tax continues at very modest growth but is beginning to see larger discrepancies between the various
sales tax elements. With the Wayfair decision, use tax is experiencing growth which in turn increases the City’s County
pool allocation. The City’s half-cent measure provides for a strong transaction tax base slightly ahead of the Bradley-
Burns sales tax.
Tourism: Tourism and hospitality continue to play a large part of the economy in San Luis Obispo as is seen with the
County airport reaching two years of record-breaking passenger levels and new flight being added constantly. Two
new luxury hotels provide additional lodging in Downtown, providing a new segment to the City’s lodging industry.
Long- Term Debt Governmental
Activities
2018-19 2017-18 2018-19 2017-18 2018-19 2017-18
Lease-revenue bonds 22,171,441$ 23,484,450$ 19,542,657$ 21,815,204$ 41,714,098$ 45,299,654$
Lease-purchase financing 1,413,937 1,599,769 1,413,937 1,599,769
Installment sale agreement 6,181,902 6,783,114 6,181,902 6,783,114
Loans 413,667 503,101 14,750,783 15,743,808 15,164,450 16,246,909
Compensated absences 2,728,422 2,468,124 545,228 637,526 3,273,650 3,105,650
26,727,467$ 28,055,444$ 41,020,570$ 44,979,652$ 67,748,037$ 73,035,096$
Business-Type Total
Activities
18
Management’s Discussion and Analysis
With low snow levels in the Sierras and worldwide health concerns lingering, this income sector might experience a
strong summer and fall season.
Real Estate: The housing market has begun to show signs of slowing throughout California, it has remained strong
in San Luis Obispo and inventory remains tight despite historically high construction activity. The upcoming years
will show the influence of recent State legislation that make housing construction a major goal of the governor.
Construction Activity: Continuing the trend from 2019, construction activity and with it the City’s development
related services have reached all-time highs. Two community facility districts will go underway in 2020 and the Orcutt
annexation area enters the final build-out phases.
Overall, the economic forecast indicates modest growth relative to the local economy and should be beneficial for the
City’s tax revenue projections in 2019-20. Continued vigilance is still warranted as uncertainties continue to develop
with various influences on the economy, the stock markets, and consumer confidence.
Additionally, along with its regional partners, the City continues to address the closure of the Diablo Canyon Power
Plant and prepare for the impacts to the region due to significant loss of jobs and property taxes. This has nurtured
stronger regional efforts with continued efforts into the future.
19
Management’s Discussion and Analysis
Next Year’s Budgets and Rates
On June 2, 2019, the City Council adopted the 2019-21 Financial plan and 2019-20 budget with an appropriation of
$199 million. The appropriated budgets remain high throughout the next financial plan due to the capital investments
and related debt issuances for the Water Resource Recovery Facility upgrade and the new Palm-Nipomo parking
structure.
Sales Tax. The local half-percent transaction tax was reauthorized by City voters in November 2014 with over 70%
of the vote. The local half-percent sales tax measure is projected to generate over $7.8 Million in 2019-20. With the
approval of Measure G and the establishment of the Citizen’s Revenue Enhancement Oversight Commission (REOC),
the Council is further supported through the advisory body. The REOC reviews, reports, and makes recommendations
directly to the City Council regarding revenues and expenditures of half-percent local sale tax.
With the 2019-21 Financial Plan, the following budget allocations were approved for the nine priority categories:
Local Revenue Measure Categories 2019-20 2020-21 2-Year
Total
1. Open Space Preservation $ 436,474 $ 692,922 $ 1,129,396
2. Bicycles and Pedestrian Improvements $ 1,062,475 $ 813,923 $ 1,876,398
3. Traffic Congestion Relief (Safety
Improvements)
$ 119,598 $ 428,237 $ 547,835
4. Public Safety $ 2,036,141 $ 1,905,440 $ 3,941,581
5. Neighborhood Street Paving $ 2,083,017 $ 1,614,581 $ 3,697,598
6. Code Enforcement $ 324,863 $ 302,046 $ 626,909
7. Flood Protection $ 841,534 $ 847,282 $ 1,688,816
8. Parks and Recreation/Senior Programs and
Facilities
$ 835,834 $ 1,105,954 $ 1,941,788
9. Other Vital Services and Capital Projects $ 72,920 $ 204,943 $ 277,863
TOTAL $ 7,812,856 $ 7,915,328 $ 15,728,184
Based upon the recommendation by the REOC, expenditures were budgeted 70% for capital and 30% for operating.
The balance of capital and operating costs for the 2019-21 Financial Plan are listed below:
Capital Expenditure
Percentage
Operating Expenditure
Percentage
FY 2019-20 71% - $5,574,867 29% - $2,237,989
FY 2020-21 70% - $5,545,397 30% - $2,369,931
General Fund Revenue. Based on the economic outlook, the City’s General Fund five-year forecast assumes slow,
but steady growth in all of the revenue streams as recessionary trends have abated some. In November 2018, the City’s
voters approved a Cannabis tax and the City is in the process of establishing businesses related to this revenue source.
However, the required due-diligence process delayed the opening of the three retail businesses to mid- to late 2020.
Staff will track revenue assumptions closely and has adjusted the 2019-20 budget during its mid-year review before
Council on February 17, 2020.
20
Management’s Discussion and Analysis
Utility Rates. On June 19, 2019, the City Council approved a new rate methodology for both the water and sewer
utilities after a multitude of study sessions and public presentations to the City Council. The rate adoption followed
all necessary notifications and public hearings as dictated by Proposition 2018.
The following rates and rate components were adopted:
Water Rates for 2019-20
Single Family Residential Rate Description Cost
Water Base Fee $21.74 per month
Water Usage Tier 1 (1-5 Units) $6.22per Unit
Water Usage Tier 2 (6-12 Units) $7.25 per Unit
Water Usage Tier 3 (13+ Units) $13.28 per Unit
Multi-Family, Non-Residential, Irrigation Water Rate
Description Cost
Base Fee by Water Meter Size Monthly Base Fee
3/4 inch or less $21.74
1-inch meter $36.29
1.5-inch meter $72.43
2-inch meter $115.89
3-inch meter $217.44
4-inch meter $362.45
6-inch meter $724.73
8-inch meter $1,159.60
Water Usage Per Unit Cost
Multi-Family $7.10
Non-Residential $8.62
Landscape Irrigation $10.57
21
Management’s Discussion and Analysis
Sewer Rates for 2019-20
Single Family Residential Rate Description Cost
Sewer Base Fee $19.72 per month
All use up to Sewer Cap $8.28 per Unit
Multi-Family, Non-Residential, Irrigation Sewer Rate
Description Cost
Base Fee by Water Meter Size Monthly Base Fee
3/4 inch or less $19.72
1-inch meter $32.93
1.5-inch meter $65.66
2-inch meter $105.10
3-inch meter $197.18
4-inch meter $328.70
6-inch meter $657.19
8-inch meter $1,051.54
10-inch meter $1,511.75
All use up to Sewer Cap $8.28 per Unit
Parking Fund. On June 20, 2017, the City Council approved a multi-year plan, through 2020, to modify the rate
structures for fines, forfeitures, as well as the parking rates for meters, structures and most permit types. During FY
2018-19, the parking structures were equipped with new pay stations to ultimately implement a 24/7 payment
structure. The fund is also preparing for the construction of its fourth structure located on Palm and Nipomo that
should begin late 2020 and will be funded through working capital and debt financing.
Requests for Additional Information
This financial report is designed to provide a general overview of the City’s finances for all those interested. The City
also prepares a Popular Annual Financial Report that can be found on the City’s website under the Finance
Department’s online documents. Questions concerning any of the information provided in this report should be
addressed to the Department of Finance, 990 Palm Street, San Luis Obispo, CA 93401.
22
BASIC FINANCIAL STATEMENTS
23
24
Governmental
Activities
Business-Type
Activities Total
Assets
Current assets:
Cash and investments 56,452,071$ 71,521,752$ 127,973,823$
Taxes receivable 5,764,254 - 5,764,254
Accounts receivable 1,965,606 5,818,295 7,783,901
Accrued interest receivable 235,063 345,463 580,526
Due from other governments - 1,484,870 1,484,870
Prepaid items and other assets 1,095,340 6,079,845 7,175,185
Noncurrent assets:
Cash and investments held by fiscal agent 421,666 500,645 922,311
Investment in joint venture - 1,713,431 1,713,431
Nondepreciable capital assets 40,241,768 29,090,402 69,332,170
Depreciable capital assets (net of accumulated
depreciation) 157,541,308 150,778,265 308,319,573
Total assets 263,717,076 267,332,968 531,050,044
Deferred Outflows of Resources
Other post-employment benefits related 453,667 224,157 677,824
Pension related 29,285,609 4,552,651 33,838,260
Unamortized loss on refunding of debt 233,556 266,219 499,775
Total deferred outflows of resources 29,972,832 5,043,027 35,015,859
Liabilities
Current liabilities:
Accounts payable 3,731,603 2,886,797 6,618,400
Accrued salaries 2,507,161 365,691 2,872,852
Unearned revenue 1,853,794 - 1,853,794
Interest payable 92,740 231,407 324,147
Other liabilities 374,988 - 374,988
Compensated absence - due within one year 1,909,895 381,659 2,291,554
Long-term debt - due within one year 1,684,946 2,804,701 4,489,647
Noncurrent liabilities:
Compensated absence - due in more than on year 818,527 163,569 982,096
Long-term debt - due in more than one year 22,314,099 37,670,641 59,984,740
Net OPEB liability 4,923,155 2,432,523 7,355,678
Net pension liability 126,280,786 27,452,157 153,732,943
Total liabilities 166,491,694 74,389,145 240,880,839
Deferred Inflows of Resources
Other post-employment benefits related 112,732 55,701 168,433
Pension related 4,236,723 391,271 4,627,994
Total deferred inflows of resources 4,349,455 446,972 4,796,427
Net Position
Net investment in capital assets 174,431,254 139,659,544 314,090,798
Restricted 20,458,677 500,645 20,959,322
Unrestricted (72,041,172) 57,379,689 (14,661,483)
Total net position 122,848,759$ 197,539,878$ 320,388,637$
City of San Luis Obispo, California
Statement of Net Position
June 30, 2019
The accompanying notes are an integral part of these financial statements.
25
Functions/Programs Expenses
Charges for
Services
Operating
Grants and
Contributions
Capital Grants
and
Contributions
Governmental activities:
Public safety 34,320,108$ 1,633,223$ 732,500$ -$
Transportation 7,546,278 2,399,692 1,731,418 47,234
Culture and recreation 9,469,520 4,078,539 - -
Community development 12,573,953 9,941,951 467,222 -
General government 22,429,785 1,391,940 59,071 -
Interest on long-term debt 702,885 - - -
Total governmental activities 87,042,529 19,445,345 2,990,211 47,234
Business-type activities:
Water 20,986,430 24,026,385 136,367 -
Sewer 13,967,717 18,674,547 121,189 -
Parking 4,088,681 5,443,038 - -
Transit 4,320,976 776,808 3,002,419 -
Total business-type activities 43,363,804 48,920,778 3,259,975 -
General revenues and transfers:
General sales and use taxes
Half Percent Sales Tax and use tax
Property taxes
Transient occupancy tax (TOT)
Utility users tax
Property tax-in-lieu of vehicle license fees
Franchise taxes
Business tax
Other taxes
Total taxes
Unrestricted investment earnings
Other revenue
Income from investment in joint venture
Transfers
Total general revenues and transfers
Change in net position
Net position, beginning of year
Prior year restatements
Net position, beginning of year, as restated
Net position, end of year
Program Revenues
City of San Luis Obispo, California
Statement of Activities
For the Fiscal Year Ended June 30, 2019
The accompanying notes are an integral part of these financial statements.
26
Governmental
Activities
Business-type
Activities Total
(31,954,385)$ -$ (31,954,385)$
(3,367,934) - (3,367,934)
(5,390,981) - (5,390,981)
(2,164,780) - (2,164,780)
(20,978,774) - (20,978,774)
(702,885) - (702,885)
(64,559,739) - (64,559,739)
- 3,176,322 3,176,322
- 4,828,019 4,828,019
- 1,354,357 1,354,357
- (541,749) (541,749)
- 8,816,949 8,816,949
18,119,545 - 18,119,545
8,325,230 - 8,325,230
12,238,357 - 12,238,357
8,061,087 - 8,061,087
4,919,892 - 4,919,892
4,961,080 - 4,961,080
1,428,296 - 1,428,296
2,630,499 - 2,630,499
273,762 - 273,762
60,957,748 - 60,957,748
1,618,354 2,516,216 4,134,570
146,579 - 146,579
- (25,469) (25,469)
2,456,035 (2,456,035) -
65,178,716 34,712 65,213,428
618,977 8,851,661 9,470,638
121,984,548 189,119,344 311,103,892
245,234 (431,127) (185,893)
122,229,782 188,688,217 310,917,999
122,848,759$ 197,539,878$ 320,388,637$
Net Revenues (Expenses) and
Changes in Net Position
27
General
Other
Governmental
Funds
Total
Governmental
Funds
Assets
Cash and investment 29,195,155$ 27,256,916$ 56,452,071$
Taxes receivable 5,764,254 - 5,764,254
Accounts receivable 774,200 550,641 1,324,841
Other receivables 640,766 - 640,766
Due from other funds 311,583 - 311,583
Accrued interest receivable 116,581 118,482 235,063
Prepaid items 51,636 292,641 344,277
Cash and investments held by fiscal agent - 421,666 421,666
Total assets 36,854,175$ 28,640,346$ 65,494,521$
Liabilities and Fund Balance
Liabilities:
Accounts payable 2,327,573$ 1,404,030$ 3,731,603$
Accrued liabilities 2,497,151 10,010 2,507,161
Due to other funds - 311,583 311,583
Unearned revenue 1,738,827 114,967 1,853,794
Other liabilities 195,082 179,906 374,988
Total liabilities 6,758,633 2,020,496 8,779,129
Fund balance:
Nonspendable 51,636 292,641 344,277
Restricted for:
Debt service - 1,791,026 1,791,026
Transportation projects - 8,151,487 8,151,487
Affordable housing programs - 2,944,549 2,944,549
Impact fee programs - 1,870,656 1,870,656
Parkland development programs - 3,528,662 3,528,662
Public art programs - 620,934 620,934
Tourism programs - 456,023 456,023
Assigned to:
Contingency fund 13,418,400 900,000 14,318,400
Development services 531,000 6,382,294 6,913,294
General government programs 9,908,932 - 9,908,932
Unassigned 6,185,574 (318,422) 5,867,152
Total fund balance 30,095,542 26,619,850 56,715,392
Total liabilities and fund balance 36,854,175$ 28,640,346$ 65,494,521$
City of San Luis Obispo, California
Balance Sheet
Governmental Funds
June 30, 2019
The accompanying notes are an integral part of these financial statements.
28
Total fund balance - governmental funds 56,715,392$
Capital assets at estimated historical cost $ 300,461,645
Accumulated depreciation (102,678,569)
197,783,076
453,667
29,285,609
233,556
751,064
Lease revenue bonds 20,704,025$
Lease purchase financing 1,413,939
Compensated absences 2,728,422
Conservation loan 413,667
Bond premium 1,467,414
Accrued interest payable 92,740
(26,820,207)
Net pension liability is not a current financial resource and, therefore, is not reported
in the governmental funds. (126,280,786)
Net OPEB liability is not a current financial resource and, therefore, is not reported
in the governmental funds. (4,923,155)
(112,732)
(4,236,723)
Total net position - governmental activities 122,848,759$
Long-term liabilities, including related interest payable, are not due and payable in the current period and
therefore are not reported in the funds.
Deferred inflow of resources, pension related, are not current assets or resources; and they are not due in
the current period and therefore are not reported in the governmental funds.
Deferred inflow of resources, OPEB related, are not current assets or resources; and they are not due in the
current period and therefore are not reported in the governmental funds.
City of San Luis Obispo, California
Reconciliation of the Governmental Funds Balance Sheet
to the Government-wide Statement of Net Position
June 30, 2019
Capital assets used in governmental activities are not financial resources and therefore are not reported in
the funds.
Other long-term assets are not available to pay for current period expenditures and therefore are not
reported in the governmental funds.
Deferred outflows of resources, pension related, are not current asset or resources; and they are not due in the
current period and therefore are not reported in the governmental funds.
Deferred outflows of resources, OPEB related, are not current asset or resources; and they are not due in the
current period and therefore are not reported in the governmental funds.
Deferred amounts related to the refunding of long-term debt were not current financial resources.
Therefore, they were not reported in the Governmental Funds Balance Sheet.
The accompanying notes are an integral part of these financial statements.
29
General
Other
Governmental
Funds
Total
Governmental
Funds
Revenues:
Sales and use tax - general 18,119,545$ -$ 18,119,545$
Sales and use tax - Half Percent Sales Tax 8,325,230 - 8,325,230
Property tax 12,238,357 - 12,238,357
Transient occupancy tax 8,061,087 - 8,061,087
Utility users tax 4,919,892 - 4,919,892
Property tax in lieu of VLF 4,961,080 - 4,961,080
Franchise taxes 1,428,296 - 1,428,296
Business tax 2,630,499 - 2,630,499
Real property transfer tax 273,762 - 273,762
Use of money and property 1,186,670 809,712 1,996,382
Subventions and grants 990,612 2,120,077 3,110,689
Charges for services 10,958,049 7,591,808 18,549,857
Miscellaneous 431,716 159,078 590,794
Total revenues 74,524,795 10,680,675 85,205,470
Expenditures:
Current:
General government 13,766,803 2,975 13,769,778
Public safety 31,634,183 80,037 31,714,220
Transportation 3,495,909 - 3,495,909
Leisure, cultural and social services 8,636,582 - 8,636,582
Community development 8,880,475 1,796,859 10,677,334
Debt service:
Principal - 1,974,050 1,974,050
Interest and fiscal charges - 809,977 809,977
Capital outlay:
Public safety 25,901 681,017 706,918
Transportation 3,368,647 3,072,582 6,441,229
Leisure, cultural and social services 490,298 106,889 597,187
Community development 795,165 772,982 1,568,147
General government 1,368,994 3,326,984 4,695,978
Total expenditures 72,462,957 12,624,352 85,087,309
Revenues over (under) expenditures 2,061,838 (1,943,677) 118,161
City of San Luis Obispo, California
Statements of Revenues, Expenditures, and
Changes in Fund Balances
Governmental Funds
For the Fiscal Year Ended June 30, 2019
The accompanying notes are an integral part of these financial statements.
30
Page 2
General
Other
Governmental
Funds
Total
Governmental
Funds
Other Financing Sources (Uses):
Transfers in 3,639,483$ 5,424,773$ 9,064,256$
Transfers out (5,182,219) (1,426,002) (6,608,221)
Capital lease financing 673,095 673,095
Total other financing sources (uses) (1,542,736) 4,671,866 3,129,130
Net change in fund balance 519,102 2,728,189 3,247,291
Fund balance, beginning of year 29,576,440 23,891,661 53,468,101
Fund balance, end of year 30,095,542$ 26,619,850$ 56,715,392$
City of San Luis Obispo, California
Statements of Revenues, Expenditures, and
Changes in Fund Balances
Governmental Funds
For the Fiscal Year Ended June 30, 2019
The accompanying notes are an integral part of these financial statements.
31
Total net change in fund balance - governmental funds 3,247,291$
Expenditures for capital outlay - governmental funds $ 7,840,270
Depreciation expense (6,613,666)
1,226,604
Repayments of long-term debt are recognized as expenditures in the governmental funds. In
the government-wide statements, repayments of long-term liabilities are reported as reductions
of liabilities. Expenditures for repayment of the principal portion of long-term debt were:2,172,109
The issuance of long-term debt provides current financial resources to governmental funds.
This transaction, however, has no effect on net position. Proceeds from the issuance of
lease-purchase financing was: (673,095)
(11,678)
it is due. In the statement of activities, interest expense is recognized as the interest accrues,
regardless of when it is due. The difference between interest expense paid and interest
accrued was:29,509
89,261
Changes in actuarially determined claim liabilities for uninsured claims do not provide current
financial resources and are not reported in the governmental funds. 50,005
governmental funds. In the statement of activities, compensated absences are measured
by the amounts earned. The difference between compensated absences paid and
compensated absences earned was:(260,298)
11,729,180
453,668
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 (16,624,194)
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 (809,385)
Total change in net position - governmental activities 618,977$
Current year employer pension contributions are recorded as expenditures in the
governmental funds, however, these amounts are reported as a deferred outflow of
resources in the Government-Wide Statement of Net Position
Current year employer OPEB contributions are recorded as expenditures in the
governmental funds, however, these amounts are reported as a deferred outflow of
resources in the Government-Wide Statement of Net Position
Compensated absences are measured by the amounts paid during the period in the
Capital outlay net of depreciation expense and disposal.
Interest on long-term debt is recognized as an expenditure in the governmental funds when
Change in unamortized discount/premium (netted with debt)
Reconciliation of the Statement of Revenues,
Expenditures and Changes in Fund Balances of
Governmental Funds to the Statement of Activities
For the Fiscal Year Ended June 30, 2019
Deferred amounts related to the refunding of long-term debt were not current financial
resources. Therefore, they were not reported in the Governmental Funds Balance Sheet.
This amount is to be amortized over the life of the long-term debt. This amount is the
current year net amortization expense.
City of San Luis Obispo, California
The accompanying notes are an integral part of these financial statements.
32
Water Sewer Parking Transit Totals
Assets
Current assets:
Cash and investment 21,951,952$ 32,182,774$ 16,509,609$ 877,417$ 71,521,752$
Accounts receivable 2,754,861 2,796,999 100,335 166,100 5,818,295
Accrued interest receivable 122,080 141,313 75,679 6,391 345,463
Prepayments 6,079,845 - - - 6,079,845
Due from other governments - - - 1,484,870 1,484,870
Total current assets 30,908,738 35,121,086 16,685,623 2,534,778 85,250,225
Noncurrent assets:
496,326 278 4,041 - 500,645
Investment in joint venture 1,713,431 - - - 1,713,431
Capital assets:
Land 945,926 2,176,114 5,947,455 - 9,069,495
Public art - - 74,100 - 74,100
Infrastructure 101,245,431 89,183,094 29,149,949 221,744 219,800,218
Buildings and improvements 19,134,912 5,024,388 888,420 5,101,506 30,149,226
Equipment 4,781,006 6,143,153 397,551 9,688,534 21,010,244
Construction in progress 2,152,704 16,286,925 1,479,578 27,600 19,946,807
Total capital assets 128,259,979 118,813,674 37,937,053 15,039,384 300,050,090
Less accumulated depreciation (56,001,745) (41,985,835) (13,563,805) (8,630,038) (120,181,423)
Capital assets, net of
accumulated depreciation 72,258,234 76,827,839 24,373,248 6,409,346 179,868,667
Total noncurrent assets 74,467,991 76,828,117 24,377,289 6,409,346 182,082,743
Total assets 105,376,729 111,949,203 41,062,912 8,944,124 267,332,968
Deferred Outflows of Resources
Pension related 2,089,805 1,880,830 453,973 128,043 4,552,651
99,030 95,031 24,334 5,762 224,157
149,976 7,488 108,755 - 266,219
2,338,811 1,983,349 587,062 133,805 5,043,027
City of San Luis Obispo
Statement of Net Position
Business-Type Activities - Enterprise Funds
June 30, 2019
Total deferred outflow of
resources
Cash and investments held by
fiscal agent
Other post-employment benefits
related
Unamortized loss on refunding of
debt
Enterprise Funds
The accompanying notes are an integral part of these financial statements.
33
Page 2
Water Sewer Parking Transit Totals
Liabilities
Current liabilities:
Accounts payable 1,377,482$ 943,086$ 330,189$ 236,040$ 2,886,797$
Accrued liabilities 156,068 148,471 47,534 13,618 365,691
Compensated absences 177,597 168,922 21,402 13,738 381,659
Interest payable 107,321 41,162 82,924 - 231,407
Current portion of long-term debt 1,367,920 928,672 508,109 - 2,804,701
Total current liabilities 3,186,388 2,230,313 990,158 263,396 6,670,255
Noncurrent liabilities:
Compensated absences 76,114 72,395 9,172 5,888 163,569
Lease revenue bonds 13,014,416 345,045 5,014,096 - 18,373,557
Installment sale agreement 5,562,432 5,562,432
State loan/note payable 2,441,183 7,240,918 4,052,551 - 13,734,652
Net pension liability 12,139,000 11,609,332 3,013,875 689,950 27,452,157
1,074,665 1,031,266 264,069 62,523 2,432,523
Total noncurrent liabilities 28,745,378 25,861,388 12,353,763 758,361 67,718,890
Total liabilities 31,931,766 28,091,701 13,343,921 1,021,757 74,389,145
Deferred Inflows of Resources
Pension related 227,258 124,564 31,896 7,553 391,271
24,608 23,614 6,047 1,432 55,701
251,866 148,178 37,943 8,985 446,972
Net Position
Net investment in capital assets 55,584,691 62,758,260 14,907,247 6,409,346 139,659,544
Restricted:
Debt service 496,326 278 4,041 - 500,645
Unrestricted 19,450,891 22,934,135 13,356,822 1,637,841 57,379,689
Total net position 75,531,908$ 85,692,673$ 28,268,110$ 8,047,187$ 197,539,878$
Other post-employment benefits
related
Total deferred inflow of
resources
City of San Luis Obispo
Statement of Net Position
Business-Type Activities - Enterprise Funds
June 30, 2019
Enterprise Funds
Net other post-employment benefits
liability
The accompanying notes are an integral part of these financial statements.
34
Water Sewer Parking Transit Total
Operating revenues:
Charges for sales and service 20,247,092$ 16,969,246$ 4,634,209$ 759,450$ 42,609,997$
Impact fees 3,745,666 1,589,771 - - 5,335,437
Fines and forfeitures - - 783,116 - 783,116
Other revenues 33,627 115,530 25,713 17,358 192,228
Total operating revenues 24,026,385 18,674,547 5,443,038 776,808 48,920,778
Operating expenses:
Salaries and benefits 4,260,738 4,322,289 1,328,661 358,188 10,269,876
Supplies and maintenance 10,120,072 2,422,702 459,312 3,001,375 16,003,461
Contract services 1,509,174 245,300 648,048 - 2,402,522
General government 1,455,958 1,768,405 664,092 391,958 4,280,413
Depreciation 2,810,842 4,725,546 650,244 569,455 8,756,087
Total operating expenses 20,156,784 13,484,242 3,750,357 4,320,976 41,712,359
Operating income (loss)3,869,601 5,190,305 1,692,681 (3,544,168) 7,208,419
Nonoperating revenues (expenses)
Interest on investments, net 914,697 1,023,930 533,289 44,300 2,516,216
Grants 136,367 121,189 - 3,002,419 3,259,975
Interest expense and fiscal charges (829,646) (483,475) (338,324) - (1,651,445)
Income(loss) from investment
in joint venture (25,469) - - - (25,469)
Total nonoperating revenues
(expenses)195,949 661,644 194,965 3,046,719 4,099,277
Income (loss) before transfers
and capital contributions 4,065,550 5,851,949 1,887,646 (497,449) 11,307,696
Transfers out (1,114,703) (993,756) (211,905) (135,671) (2,456,035)
Total transfers (1,114,703) (993,756) (211,905) (135,671) (2,456,035)
Change in net position 2,950,847 4,858,193 1,675,741 (633,120) 8,851,661
Net position, beginning of year 73,134,243 80,826,618 26,478,176 8,680,307 189,119,344
Prior year restatements (553,182) 7,862 114,193 - (431,127)
Net position, beginning of year,
as restated 72,581,061 80,834,480 26,592,369 8,680,307 188,688,217
Net position, end of year 75,531,908$ 85,692,673$ 28,268,110$ 8,047,187$ 197,539,878$
Enterprise Funds
City of San Luis Obispo, California
Statement of Revenues, Expenses, and Changes in Fund Net Assets
Business-Type Activities - Enterprise Funds
For the Fiscal Year Ended June 30, 2019
The accompanying notes are an integral part of these financial statements.
35
Water Sewer Parking Transit Total
Cash flows from operating activities:
Cash received from customers 23,983,975$ 18,398,038$ 5,433,218$ 686,866$ 48,502,097$
(11,053,663) (4,030,095) (852,657) (3,035,960) (18,972,375)
(1,455,958) (1,768,405) (664,092) (391,958) (4,280,413)
(3,804,616) (3,932,475) (1,220,723) (321,546) (9,279,360)
Other cash receipts - - - - -
Other cash payments - - - - -
Net cash provided by (used in)
operating activities 7,669,738 8,667,063 2,695,746 (3,062,598) 15,969,949
Operating grants received 136,367 121,189 - 2,959,169 3,216,725
Transfers to other funds (1,114,703) (993,756) (211,905) (135,671) (2,456,035)
financing activities (978,336) (872,567) (211,905) 2,823,498 760,690
Cash flows from capital and related
financing activities:
(2,742,785) (3,781,933) (917,743) (373,058) (7,815,519)
Capital grants received - - - - -
Disposition of capital assets 87,649 - 4,885 - 92,534
Principal paid on debt financing (14,091,254) (912,698) (672,346) - (15,676,298)
Interest paid on debt financing (858,471) (486,562) (353,790) - (1,698,823)
Proceeds from issuance of debt 11,809,515 - - - 11,809,515
Net cash used in capital and
related financing activities (5,795,346) (5,181,193) (1,938,994) (373,058) (13,288,591)
Cash flows from investing activities:
Interest on investments, net 884,964 1,000,648 517,199 44,476 2,447,287
Net cash provided by
investing activities 884,964 1,000,648 517,199 44,476 2,447,287
1,781,020 3,613,951 1,062,046 (567,682) 5,889,335
20,667,258 28,569,101 15,451,604 1,445,099 66,133,062
22,448,278$ 32,183,052$ 16,513,650$ 877,417$ 72,022,397$
Enterprise Funds
City of San Luis Obispo, California
Statement of Cash Flows
Business-Type Activities - Enterprise Funds
For the Fiscal Year Ended June 30, 2019
Cash payments to suppliers for goods
and services
Cash payments to General Fund for
interfund services
Cash payments to employees for
services
Net cash provided by (used in)
noncapital
Acquisition and construction of capital
assets
Cash flows from noncapital financing
activities:
Net change in cash and cash
equivalents
Cash and cash equivalents, beginning
of year
Cash and cash equivalents, end of year
The accompanying notes are an integral part of these financial statements.
36
City of San Luis Obispo, California
Statement of Cash Flows
Business-Type Activities - Enterprise Funds
For the Fiscal Year Ended June 30, 2019
Page 2
Water Sewer Parking Transit Total
Operating income (loss) 3,869,601$ 5,190,305$ 1,692,681$ (3,544,168)$ 7,208,419$
Depreciation 2,810,842 4,725,546 650,244 569,455 8,756,087
Accounts receivable (36,170) (276,509) (9,820) (89,942) (412,441)
Prepaid expense (285,714) 7,200 - - (278,514)
Accounts payable 861,297 (1,369,293) 254,703 (34,585) (287,878)
Deposits payable (6,240) - - - (6,240)
Unearned revenue - - - - -
104,136 57,844 27,029 14,806 203,815
386,996 371,368 95,094 22,516 875,974
(35,010) (39,398) (14,185) (680) (89,273)
Net cash provided by (used in)
operating activities 7,669,738$ 8,667,063$ 2,695,746$ (3,062,598)$ 15,969,949$
Reconciliation of cash and investments to the balance sheet:
Cash and cash equivalents 21,951,952$ 32,182,774$ 16,509,609$ 877,417$ 71,521,752$
496,326 278 4,041 - 500,645
Total cash and investments 22,448,278$ 32,183,052$ 16,513,650$ 877,417$ 72,022,397$
Noncash investing, capital, and financing activities:
None
Enterprise Funds
Deferred OPEB and net OPEB
liability
Cash and investments held by fiscal
agent
Reconciliation of operating income
(loss) to net cash provided by (used in)
operating activities:
Adjustments to reconcile operating
income (loss) to net cash provided by
(used in) operating activities:
Change in assets, deferred outflows of
resources, liabilities, and deferred
inflows of resources:
Accrued salaries and compensated
absences
Deferred pensions and net
pension liability
The accompanying notes are an integral part of these financial statements.
37
Assets
Current assets:
Cash and investment 4,591,053$
Cash and investment held by fiscal agent 30,864
Accounts receivable 45,237
Accrued interest receivable 13,898
Capital assets, net of accumulated depreciation 1,221,044
Total assets 5,902,096$
Liabilities
Current liabilities:
Accounts payable 173,078$
Accrued liabilities 21,577
Other liabilities 2,451,625
Due to agency participants 3,255,816
Total liabilities 5,902,096$
City of San Luis Obispo, California
Statement of Net Position
Fiduciary Funds - Agency Funds
June 30, 2019
The accompanying notes are an integral part of these financial statements.
38
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page
Note 1: Summary of Significant Accounting Policies 1
Description of the Reporting Entity 1
Government-wide and Fund Financial Statements 1
Measurement Focus, Basis of Accounting and Basis of Presentation 2
Assets, Liabilities, and Net Position or Fund Balance 3
Reconciliation of Government-wide and Fund Financial Statements 6
Budgets and Budgetary Accounting 6
Fair Value Measurements 8
Note 2: Cash and Investments 8
Funds with Fiscal Agent 9
Investments 9
Note 3: Property Taxes 14
Note 4: Capital Assets 15
Note 5: Long Term Debt 18
Summary of Long-Term Debt 18
Governmental Activities Summary: 19
Revenue Bonds 19
Lease-Purchase Financing 20
2014 Energy Sources Conservation State Loan 21
Business-Type Activities Summary: 21
Revenue Bonds 21
Loans 23
Installment Sale Agreements 23
Note 6: Pension Plans 24
Agent-Multiple Employer Plan 24
General Information about the Pension Plan 24
Net Pension Liability 26
Changes in the Net Pension Liability 28
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions 29
Cost-Sharing Employer Plan 30
General Information about the Pension Plan 30
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions 31
Payable to the Pension Plan 35
39
City of San Luis Obispo, California
Notes to the Financial Statements
Table of Contents
June 30, 2019
Page 2
Note 7: Other Post-Employment Benefits (OPEB) 35
General Information about OPEB 35
Net OPEB Liability 36
Changes in the Net OPEB Liability 38
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB 39
Payable to the OPEB Plan 40
Note 8: Interfund Transactions 40
Note 9: Joint Ventures, Jointly Governed Organizations and Operating Agreements 41
Whale Rock Commission 41
San Luis Obispo Regional Transit Authority 42
San Luis Obispo Council of Governments 42
Nacimiento Water Supply Project 42
Note 10: Risk Management 43
California Joint Powers Insurance Authority 43
Self-Insurance Programs of the Authority 44
Adequacy of Protection 44
Self-Insurance 44
Note 11: Operating Lease 45
Note 12: Commitments and Contingencies 45
Litigation 45
Grant Awards 46
Regional Transit Authority Pension Expense 46
Note 13: Construction and Other Significant Commitments 46
Note 14: Fund Balance Deficiency 47
Note 15: Subsequent Events 47
Note 16: New Accounting Standards 47
Accounting Standards Adopted 47
New Accounting Standards 48
Note 17: Prior Period Adjustments 49
40
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Note 1: Summary of Significant Accounting Policies
The basic financial statements of the City of San Luis Obispo (City) have been prepared in conformity with U.S. Generally Accepted
Accounting Principles (GAAP), as applied to governmental agencies. The Governmental Accounting Standards Board (GASB) is
the accepted standard setting body for establishing governmental accounting and financial reporting principles.
The following is a summary of the more significant policies:
Description of the Reporting Entity
The City is a California charter city. It was incorporated on February 19, 1856 and chartered on May 1, 1876. It is organized in
accordance with the Council-Mayor-City Manager form of government. With a population of approximately 46,802, the City
provides a broad range of municipal services, including police and fire protection, parks and recreation, water and sewer utilities,
street maintenance, public transportation, parking, planning, and building and safety.
As required by GAAP, these financial statements present the City (the primary government) and its component units, entities for
which the government is considered to be financially accountable. Blended component units, although legally separate entities, are
in substance part of the government's operations which creates the need to include their financial information with that of the primary
government. The City has no component units that require discrete presentation in accordance with GASB standards.
Blended Component Unit. The City has identified The San Luis Obispo Capital Improvement Board (the Board) as a blended
component unit in accordance with GASB standards. The Board provides financing for the construction and acquisition of City
facilities. The Board consists of members of the City Council. Activities of the Board are accounted for in the applicable City
governmental fund and consist of the issuance of debt secured by the lease of property. Separate financial statements are not prepared
for the San Luis Obispo Capital Improvement Board.
Government-wide and Fund Financial Statements
The government-wide financial statements (i.e. the statement of net position and the statement of activities) report information on
all of the non-fiduciary activities of the primary government and its component unit. Governmental activities, which normally are
supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely primarily on
fees and charges for services.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program
revenues. Direct expenses are those that are clearly identifiable within a specific function or segment. The indirect expense allocation
transfers general support services to operating programs based on the most current Cost Allocation Plan. Program revenues include
1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given
function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a
particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general
revenues.
Separate fund financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the
latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual
enterprise funds are reported as separate columns in the fund financial statements.
41
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 2
Note 1: Summary of Significant Accounting Policies (Continued)
Measurement Focus, Basis of Accounting and Basis of Presentation
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of
accounting, as are the proprietary funds and fiduciary funds. Revenues are recorded when earned and expenses are recorded when a
liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which
they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider
have been met.
As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to
this general rule are charges between the government’s enterprise funds and various other functions of the government. Elimination
of these charges would distort the direct costs and program revenues reported for the various functions concerned.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified
accrual basis of accounting. 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 or soon enough thereafter to pay liabilities of the current period.
For this purpose, the government generally considers revenues to be available if they are collected within 60 days of the end of the
current fiscal period. An exception to this timeframe is made to allow for the recognition of the final property tax distributions
received from the County, if necessary, as well as for sales tax revenues received in September. This later provision is made in order
for the City’s revenue stream to match that recognized by the State of California. Expenditures generally are recorded when a liability
is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated
absences and claims and judgments, are recorded only when payment is due.
Property taxes, sales taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be
susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered
to be measurable and available only when cash is received by the government.
Major Funds and Other Funds. GASB Standards define major funds and require that the City’s major governmental funds be
identified and presented separately in the fund financial statements. All other funds, called non-major funds, are combined and
reported in a single column, regardless of their fund type.
Major funds are defined as funds that have assets, liabilities, revenues, or expenditures/expenses equal to ten percent of their fund-
type total and at least five percent of the grand total. The General Fund is always a major fund. The City may also select other funds
it believes should be presented as major funds.
The City reports the following major governmental funds:
General Fund. This fund is the government’s primary operating fund. It accounts for all financial resources of the general
government, except those required to be accounted for in another fund.
The only proprietary funds the City reports are the Enterprise Funds, all of which are major funds. Proprietary funds are accounted
for on the economic resources measurement focus and the accrual basis of accounting. Under this method, revenues are recorded
when earned and expenses are recorded at the time liabilities are incurred. The City reports the following major enterprise funds:
Water Fund. This fund accounts for the provision of water services to the residents of the City as well as some customers in the
County. All activities necessary to provide such services are accounted for in this fund, including, but not limited to, administration,
operations, maintenance, capital improvements and debt service.
42
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 3
Note 1: Summary of Significant Accounting Policies (Continued)
Sewer Fund. This accounts for the provision of wastewater collection and treatment services to the residents of the City as well as
some customers in the County. All activities necessary to provide such services are accounted for in this fund, including, but not
limited to, administration, operations, maintenance, capital improvements and debt service.
Parking Fund. This fund accounts for activities related to the implementation of the Access and Parking Management Plan,
including the operation of municipal parking lots, parking structures, parking meters and residential parking districts. All activities
necessary to provide such services are accounted for in this fund, including, but not limited to, administration, operations,
maintenance, capital improvements and debt service.
Transit Fund. This fund accounts for the operation and maintenance of the City's transit system. Although user fees are not the
primary funding source for the operation of the system, the State of California and the Federal government, which provide the major
funding sources for the system, require that local transit systems be accounted for on an enterprise fund basis.
Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally
result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing
operations. The principal operating revenues of the enterprise funds are charges to customers for sales and services. Operating
expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All
revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.
The City has established nine Agency Funds, which are used to account for funds held by the City as an agent for private individuals,
organizations or other governmental agencies. Agency funds are accounted for using the accrual basis of accounting. See page 137
for a complete list of Agency Funds.
Assets, Liabilities, and Net Position or Fund Balance
Cash, Cash Equivalents and Investments. The City pools cash resources of its various funds to facilitate cash management. Cash
in excess of current requirements is invested and reported as investments. It is the City’s intent to hold investments until maturity.
However, the City may, in response to market conditions, sell investments prior to maturity in order to improve the quality, liquidity
or yield of the portfolio.
The City's cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original
maturities of three months or less from the date of acquisition. Cash and investments held by fiscal agents are treated as cash
equivalents for purposes of the statement of cash flows.
Money markets and non-negotiable certificates of deposit are reported at amortized cost. All other investments are stated at fair
value.
Receivables and Payables. Activity between funds that are representative of lending/borrowing arrangements outstanding at the end
of the fiscal year are referred to as “due to/from other funds”.
All receivables are shown net of any allowance for uncollectible accounts if material. Charges for utility services rendered but
unbilled as of June 30 are accrued and are recognized as revenues.
Prepaids and Inventories. The City has no significant inventories. The cost of any inventoriable item has been recorded as an
expenditure or expense at the time of purchase. Certain payments to vendors reflect costs applicable to future accounting periods
and are recorded as prepaid items in both government-wide and fund financial statements. Prepayments in the governmental funds
are accounted for using the consumption method.
43
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 4
Note 1: Summary of Significant Accounting Policies (Continued)
Restricted Assets. Certain proceeds of debt financings, as well as resources set aside for their repayment, are classified as restricted
assets on the balance sheet because they are maintained in separate trust bank accounts and their use is limited by applicable debt
covenants. Notes 2 and 5 have additional information on funds held by fiscal agents.
Capital Assets. Capital assets, which include property, plant, equipment and infrastructure assets (such as streets, sidewalks and
bridges), are reported in the applicable governmental or business-type activities columns in the government-wide financial
statements, and in the proprietary funds statement of net position. Capital assets are defined by the City as assets with an initial,
individual cost of more than $25,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or
estimated historical cost if purchased or constructed. Donated capital assets, donated works of art and similar items, and capital
assets received in a service concession arrangement would be reported at acquisition value rather than fair value. The costs of normal
maintenance and repairs that do not add to the value of assets or materially extend assets’ lives are not capitalized. Major outlays for
capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital
assets of the business- type activities is included as part of the capitalized value of the assets constructed. Detailed information on
the City’s capital assets can be found in Note 4.
Property, plant and equipment of the City are depreciated using the straight line method over the following estimated useful lives:
Deferred Outflows and Inflows of Resources. The City recognizes deferred outflows and inflows of resources in the Statement of
Net Position. A deferred outflow of resources is defined as a consumption of net position by the City that is applicable to a future
reporting period. The City has deferred outflows of resources related to pensions, other post- employment benefits (OPEB), and
unamortized loss on refundings of debt. A deferred inflow of resources is defined as an acquisition of net position by the City that
is applicable to a future reporting period. The City has deferred inflows of resources related to pensions and OPEB.
Compensated Absences. City employees are granted vacation and sick leave in varying amounts. In the event of termination,
employees are reimbursed for the total value of their accumulated vacation days. Employees are reimbursed for 10% to 30% of the
accumulated sick leave only upon retirement and only after at least 10 years of service. In selected cases, similar accumulated sick
leave reimbursements may be available after 20 years of continuous employment. An employee's estate is reimbursed for 30% of
the employee's accumulated sick leave in the event of death while in the City's employ. A liability for compensated absences is
accrued in the government-wide and proprietary funds financial statements.
Long-Term Obligations. In the government-wide financial statements, and proprietary funds in the fund financial statements, long-
term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities,
or proprietary funds statement of net position. Bond premiums and discounts and deferred amounts on refunding are deferred and
amortized over the life of the bonds. Deferred amounts on refunding are reported separately from assets and liabilities in the
Statement of Net Position. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are
expensed as incurred.
In the fund financial statements, governmental funds recognize bond premiums and discounts, as well as bond issuance costs, during
the period they originate. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances
are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether
or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
Assets Years
Infrastructure 20-100
Buildings and structures 20-50
Improvements other than buildings 10-100
Equipment 3-21
44
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 5
Note 1: Summary of Significant Accounting Policies (Continued)
Net Pension Liability. The City recognizes a net pension liability, which represents the City’s proportionate share of the excess of
the total pension liability over the fiduciary net position of the pension reflected in the actuarial reports provided by the California
Public Employees’ Retirement System (CalPERS) plans (Plans). The net pension liability is measured as of the City’s prior fiscal
year-end. Changes in the net pension liability are recorded, in the period incurred, as pension expense or as deferred inflows of
resources or deferred outflows of resources depending on the nature of the change. The changes in the net pension liability that are
recorded as deferred inflows of resources or deferred outflows of resources (that arise from changes in actuarial assumptions or other
inputs and differences between expected or actual experience) are amortized over the weighted average remaining service life of all
participants in the respective pension plan and are recorded as a component of pension expense beginning with the period in which
they are incurred.
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension
expense, information about the fiduciary net position of the City’s CalPERS Plans and additions to/deductions from the Plans’
fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments
(including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms.
Investments are reported at fair value. Projected earnings on pension investments are recognized as a component of pension expense.
Other Post-Employment Benefits (OPEB) Liability. For purposes of measuring net OPEB liability, deferred outflows of resources
and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City’s
plan (OPEB Plan), and additions to or deductions from the OPEB Plan’s fiduciary net position, have been determined on the same
basis as they are reported by the California Employer’s Retiree Benefit Trust Program (CERBT). For this purpose, benefit payments
(including refunds of employee contributions) are recognized when currently due and payable in accordance with benefit terms.
Investments are reported at fair value.
Generally accepted accounting principles require that the reported OPEB results must pertain to liability and asset information within
certain defined timeframes. For this report, the following timeframes are used:
Valuation Date June 30, 2017
Measurement Date June 30, 2018
Measurement Period July 1, 2017 to June 30, 2018
Fund Equity. In the fund financial statements, fund balance for governmental funds is reported in classifications that comprise a
hierarchy based primarily on the extent to which the City is bound to honor constraints on the specific purpose for which amounts
in the funds can be spent. Fund balance is reported in five components in accordance with GASB Statement No. 54 Fund Balance
Reporting and Governmental Fund Type Definitions – nonspendable, restricted, committed, assigned and unassigned. The City
Council may take action via minute order to add, delete or amend a fund balance commitment that is not required as a condition of
a bond covenant or other external, legal requirement.
Nonspendable. This component includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally
or contractually required to be maintained intact.
Restricted. This component consists of amounts that have constraints placed on them either externally by third-parties (creditors,
grantors, contributors, or laws or regulations of other governments) or by law through constitutional provisions or enabling
legislation. Enabling legislation authorizes the City to assess, levy, charge or otherwise mandate payment of resources (from external
resource providers) and includes legally enforceable requirements (compelled by external parties) that those resources be used only
for the specific purposes stipulated in the legislation.
45
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 6
Note 1: Summary of Significant Accounting Policies (Continued)
Committed. This component consists of amounts that can only be used for specific purposes pursuant to constraints imposed by
minute order authorized by the City Council. Those committed amounts established by minute order cannot be used for any other
purpose unless the City Council adopts a new minute order so directing. With respect to encumbered amounts, the City may take
steps to cancel the order for goods or services and thereby terminate the obligation.
Assigned. This component consists of amounts that are constrained by the City’s intent to be used for specific purposes, but are
neither restricted nor committed. The City Manager or Director of Finance are authorized by City Council, via formal action at
regular public meetings, to assign amounts to a specific purpose. Constraints imposed on the use of assigned amounts can be removed
with no formal Council actions.
Unassigned. This component is the residual classification for the General Fund and includes all amounts not contained in the other
classifications. Unassigned amounts are technically available for any purpose. The General Fund is the only fund that reports a
positive unassigned fund balance amount. Other governmental funds may report negative unassigned fund balance, which occurs
when a fund has a residual deficit after allocation of fund balance to the nonspendable, restricted, or committed categories.
Fund Balance Spending Practice. The City follows a practice in which restricted, committed, assigned, and unassigned fund
balances are spent when more than one amount is available for a specific purpose. When both restricted and unrestricted resources
are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources (committed, assigned and
unassigned) as they are needed. When unrestricted resources (committed, assigned and unassigned) are available for use, it is the
City’s policy to use committed resources first, then assigned, and then unassigned as they are needed.
Reconciliation of Government-wide and Fund Financial Statements
A reconciliation between total fund balance of the governmental funds and total net position of the governmental activities as reported
in the government-wide statement of net position is presented in the basic financial statements.
A reconciliation between total net change in fund balance of the governmental funds and total change in net position of governmental
activities as reported in the government-wide statement of activities is presented in the basic financial statements.
There are no differences between total net position of the proprietary funds and total net position of the business-type activities as
reported in the government-wide statement of net position.
Budgets and Budgetary Accounting
Overview. The City has received national recognition for its use of a two-year Financial Plan and budgetary process that emphasizes
long-range planning and effective program management. Significant features of the City's two-year Financial Plan include the
integration of Council goal-setting into the budgetary process and the extensive use of formal policies and measurable objectives.
The Financial Plan includes operating budgets for two years and a capital improvement plan (CIP) covering five years.
Under this multi-year approach, appropriations continue to be made annually; however, the Financial Plan is the foundation for
preparing the budget for the second year. Additionally, unexpended operating appropriations from the first year may be carried over
for specific purposes into the second year with the approval of the City Manager.
46
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 7
Note 1: Summary of Significant Accounting Policies (Continued)
Management Policies. The overall goal of the City's Financial Plan is to link what the City wants to accomplish over the next two
years with the resources required to do so. Formal statements of budgetary policies and major objectives provide the foundation for
achieving this goal. Key budget principles include: maintaining fund balances at levels which will protect the City from future
uncertainties; estimating revenues at realistic levels; making current expenditures with current revenues; maintaining the City's
traditional commitment to a strong General Fund; and complying with provisions of the State constitution, City charter, municipal
code, and sound fiscal policy. Key revenue policies include: maintaining a diversified and stable revenue base; setting enterprise
fund rates at levels that fully recover the total cost of providing services in the Water, Sewer and Parking Funds; and at policy levels
for cost recovery in the Transit Fund; charging fees for General Fund programs in accordance with adopted user fee cost recovery
goals; and ensuring that new development pays its fair share of the cost of constructing necessary community facilities.
Budget Process. The City Manager is responsible for preparing the budget and submitting it to the Council for approval.
Although specific steps will vary from year to year, the following is an overview of the general approach used under the
City's two-year budgetary process:
First Year. The Financial Plan process begins with City Council goal-setting to determine major objectives to be
accomplished over the next two years. As part of this process, community groups, interested individuals, and
Council advisory bodies present their recommendations to the Council. Goals approved by the City Council are
incorporated into the budget instructions issued to the operating departments, who are responsible for submitting
initial budget proposals. After these proposals are comprehensively reviewed and a detailed financial forecast is
prepared, the City Manager issues the Preliminary Financial Plan for public comment. A series of study sessions
and public hearings are then held leading to Council adoption of the Financial Plan and Budget prior to the start
of the fiscal year.
Second Year. Before the beginning of the second year of the two-year cycle, the Council reviews the progress
during the first year, makes adjustments as necessary and approves appropriations for the second fiscal year.
Unspent operating appropriations from the first year may be carried over for specific purposes into the second year
with the approval of the City Manager. Unspent and unencumbered operating appropriations lapse at the end of
the second year. The fiscal year which ended June 30, 2019 was the second year of the 2017-19 two-year cycle.
Mid-Year Reviews. The Council formally reviews the City's financial condition and amends appropriations, if
necessary, each February.
Status Reports. Financial reports are prepared monthly to monitor the City's fiscal condition; more formal reports
are posted to the City's website on a quarterly basis. Additionally, more focused reports are issued on key revenues,
such as sales tax, transient occupancy tax and quarterly reports on investments. The status of major goals and
program objectives, including Construction in Progress (CIP) projects, are also formally reported to the Council
on an ongoing basis.
Accounting and Budget Administration. Budgets are prepared for each fund in accordance with its respective basis of accounting
consistent with U.S. Generally Accepted Accounting Principles (GAAP). All governmental funds have legally adopted budgets
annually. While budgets are prepared for the City's capital projects funds, the capital projects generally span more than one year and
are effectively controlled at the project level; accordingly, budgetary comparisons are not presented for capital projects funds in the
accompanying other supplementary information following the basic financial statements.
As provided under the City Charter, the Council may amend or supplement the budget at any time after its adoption by majority vote
of the Council members. The legal level of budgetary control – the level at which expenditures are not to exceed appropriations – is
the fund level.
47
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 8
Note 1: Summary of Significant Accounting Policies (Continued)
For management control purposes, the City Manager has the authority to make or approve administrative adjustments to the budget
as long as those changes will not have a significant policy impact nor affect budgeted year-end fund balances. Department heads
have the authority to transfer line-item budgets within the department within a fund. During fiscal year 2019 several supplemental
budget appropriations were made to reflect the inclusion of costs related to prior year encumbered amounts as well as the rollover
of unspent capital appropriations. Additional appropriations were added to fund a prepayment made to the retirement system as well
as to provide additional resources for the Community Development Department to ensure that it maintained a development review
process that complied with State law in light of the increased demand for services. These adjustments were material when compared
to the original appropriations. Both the original and final amended budgets of the general fund are presented as required
supplementary information following the notes to the financial statements. Budget information for non-major governmental funds
with annual budgets is presented in other supplementary information following the notes to the financial statements.
Encumbrances. The City uses an encumbrance system as an extension of normal budgetary accounting for the other governmental
funds. Under this system, purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to
reserve that portion of applicable appropriations. Encumbrances outstanding at year-end are recorded as restricted, committed, or
assigned fund balances since they do not constitute expenditures or liabilities. Unencumbered appropriations lapse at year-end.
Encumbered appropriations are carried forward in the ensuing year’s budget.
Indirect Cost Reimbursement. All of the City's general government and engineering programs are accounted and budgeted for in
the General Fund. However, some of these support service programs also benefit the City's enterprise and agency fund operations,
and accordingly, payments are made from these funds to reimburse the General Fund for these services. The payments are based on
a Central Service Cost Allocation Plan prepared for this purpose, which distributes these shared costs in a uniform, consistent manner
in accordance with GAAP.
Fair Value Measurements
As defined in GASB Statements, fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. The City uses valuation techniques that are appropriate
under the circumstances and for which sufficient data are available to measure fair value. Valuation techniques maximize the use of
relevant observable inputs and minimize the use of unobservable inputs.
GASB Statements establish a hierarchy of inputs to valuation techniques used to measure fair value. That hierarchy has three levels:
Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 — Observable inputs, other than Level 1 prices, for the asset or liability, either directly or indirectly;
Level 3 — Unobservable inputs for the asset or liability.
For fiscal year ended June 30, 2019, the application of valuation techniques applied to the City’s financial statements has been
consistent.
Note 2: Cash and Investments
The City follows the practice of pooling cash and investments for all funds under its direct daily control. Funds held by outside fiscal
agents under provisions of bond indentures are maintained separately.
Interest earned on pooled cash and investments is allocated quarterly to the various funds based on the respective fund's average
quarterly cash balance. Interest earned from cash and investments with fiscal agents is credited directly to such funds.
48
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 9
Note 2: Cash and Investments (Continued)
Funds with Fiscal Agent
The City has monies held by trustees or fiscal agents pledged to the payment or security of certain bonds. The California Government
Code provides that these funds, in the absence of specific statutory provisions governing the issuance of bonds, may be invested in
accordance with the ordinance, resolutions, or indentures specifying the types of investments its trustees or fiscal agents may make.
These ordinances, resolutions, or indentures are generally more restrictive than the City's general investment policy. In no instance
have additional types of investments been authorized which are not permitted by the City's investment policy.
Investments
The City is authorized by its investment policy, in accordance with Section 53601 of the California Government Code, to invest in
the following instruments:
Treasury bills and notes
Government Sponsored Enterprises
Commercial paper
Repurchase agreements
Bankers' acceptances
Corporate medium-term notes
Negotiable certificates of deposit
Collateralized bank deposits
Money market mutual funds
State Local Agency Investment Fund (LAIF)
Investments are stated at fair value, based on quoted market prices, in accordance with GASB standards. Investment income has
been adjusted to reflect any unrealized gains and losses resulting from the fair value adjustment annually. While U.S. generally
accepted accounting principles require recording any increases or decreases in the market value of the City’s investments, it is the
City’s policy to make all investment decisions based on holding them through maturity, and therefore the City may not realize the
gains or losses resulting from the fair value adjustment. As such, changes in market value generally do not affect the long-term
results of the portfolio, but they can result in significant fluctuations from year-to-year.
The fair value of the City’s position in the State LAIF pool is the same as the value of the pool shares. The State LAIF pool credit
quality is unrated. LAIF is overseen by the Local Agency Investment Advisory Board, which consists of five members, in accordance
with State statute. The State Treasurer’s Office audits the fund annually.
49
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 10
Note 2: Cash and Investments (Continued)
At June 30, 2019, cash and investments consisted of the following:
At June 30, 2019, cash and investments are reflected in the financial statements as following:
Investment Fair Value Measurements. The City categorizes its fair value measurements within the fair value hierarchy established
by generally accepted accounting principles. Investment securities classified in Level 1 of the fair value hierarchy are valued using
prices quoted in active markets for those securities. Investment securities classified in Level 2 of the fair value hierarchy are valued
using matrix pricing or market corroborated pricing. Matrix pricing is used to value securities based on the securities’ relationship
to benchmark quoted prices.
Fair
Value
Percent of
Portfolio
Cash and cash equivalents 27,901,572$ 20.90%
Investments:
State Local Agency Investment Fund 23,339,125 17.48%
U.S. Treasury Bond / Note 33,762,592 25.29%
Federal Agency Bond / Note 19,339,493 14.48%
Corporate Note 14,829,220 11.11%
Commercial Paper 1,483,937 1.11%
Asset-Backed Securities 2,537,880 1.90%
Negotiable Certificates of Deposit 7,863,350 5.89%
Non-Negotiable Certificates of Deposit 1,000,000 0.75%
Money Market Funds 1,460,882 1.09%
Total investments 105,616,479
Total cash and investments 133,518,051$ 100.00%
Governmental
Funds
Business-Type
Funds
Fiduciary
Funds Total
Cash and investments 56,452,071$ 71,521,752$ 4,591,053$ 132,564,876$
Cash and investments held by fiscal agents 421,666 500,645 30,864 953,175
Total cash and investments 56,873,737$ 72,022,397$ 4,621,917$ 133,518,051$
Government-Wide Statement of
Net Position
50
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 11
Note 2: Cash and Investments (Continued)
The following is a summary of the fair value measurements as of June 30, 2019:
Custodial Credit Risk – Deposits with Financial Institutions. The custodial credit risk for deposits is the risk that, in the event of
the failure of a depository financial institution, the City will not be able to recover deposits. Deposits with financial institutions,
including non-negotiable certificates of deposit, totaled $27,994,949 at June 30, 2019 and were insured or collateralized with
securities held by the pledging financial institution's trust department or agent in the City's name.
The California Government Code requires California financial institutions to secure the City's deposits by pledging government
securities as collateral. The market value of the pledged securities must equal 110% of the City's deposits. California law also allows
financial institutions to secure City deposits by pledging first trust deed mortgage notes equal to 150% of the City's deposits or letters
of credit issued by the Federal Home Loan Bank of San Francisco having a value of 105% in excess of the total amount of deposits.
Custodial Credit Risk - Investments. This is the risk that in the event of the failure of a counterparty, the City will not be able to
recover the value of its investments that are in the possession of an outside party. All of the City’s investments in securities are
insured or registered and held by a counterparty in the City’s name in accordance with the City’s policies.
Fair Value
Investments by fair value hierarchy
U.S. Treasury Bond / Note 33,762,592$ 33,762,592$ $ $
Federal Agency Bond / Note 19,339,493 19,339,493
Corporate Note 14,829,220 14,829,220
Commercial Paper 1,483,937 1,483,937
Asset-Backed Securities 2,537,880 2,537,880
Negotiable Certificates of Deposit 7,863,350 7,863,350
Total investments by fair value hierarchy 79,816,472 33,762,592$ 46,053,880$ -$
Investments not subject to fair value hierarchy
State Local Agency Investment Fund 23,339,125
Non-Negotiable Certificates of Deposit 1,000,000
Money market funds 1,460,882
Total investments not subject to fair value hierarchy 25,800,007
Total investments measured at fair value 105,616,479$
Fair Value Measurements Using
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
51
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 12
Note 2: Cash and Investments (Continued)
Interest Rate Risk. This is the risk that the market value of securities in the portfolio will fall due to changes in general interest rates.
In accordance with its policies in the Investment Management Plan, the City mitigates interest rate risk by:
Structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby
avoiding the need to sell securities on the open market before maturity.
Investing operating funds primarily in shorter-term securities.
The City’s investment policy also includes portfolio maturity targets. A minimum of 20% of the portfolio will be invested in
securities maturing in one year or less. Up to 80% of the portfolio can be invested in securities with a maturity over one year, with
no more than 10% of the portfolio invested in securities with a maturity over five years.
Maturities using the segmented time distribution method for those investments requiring this disclosure are as follows:
Investments held by fiscal agents are structured with maturity dates that correspond to the payment of final debt service of the
respective bond indenture.
Credit Risk. This is the risk of loss due to the failure of the security issuer or backer. The City’s policies to mitigate credit risk
include:
Limiting investments to the safest types of securities. As noted above, the California Government Code limits the investment
vehicles available to local agencies. The credit risk of these securities is measured by the assignment of a rating by a
nationally recognized statistical rating organization. The table below presents the rating for each investment type as
provided by Standard & Poor’s except as noted.
Pre-qualifying the financial institutions, broker/dealers, intermediaries and advisors with which the City will do business.
Fair
Value
Less Than
One Month
One Month to One
Year
One to Five
Years
State Local Agency Investment Fund 23,339,125$ $ 23,339,125$ $
U.S. Treasury Bond / Note 33,762,592 1,730,724 32,031,868
Federal Agency Bond / Note 19,339,493 274,778 7,641,209 11,423,506
Corporate Note 14,829,220 639,934 3,354,429 10,834,857
Commercial Paper 1,483,937 1,483,937
Asset-Backed Securities 2,537,880 2,537,880
Negotiable Certificates of Deposit 7,863,350 3,640,337 4,223,013
Non-Negotiable Certificates of Deposit 1,000,000 1,000,000
Money Market Funds 1,460,882 1,460,882
Total maturities 105,616,479$ 2,375,594$ 42,189,761$ 61,051,124$
Cash in banks and on hand 27,901,572
133,518,051$
52
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 13
Note 2: Cash and Investments (Continued)
The following table identifies the Standard & Poor’s credit quality ratings for those investments requiring this disclosure as of June
30, 2019:
Concentration Credit Risk. The City’s policies contained in the Investment Management Plan provide guidelines (by type of
investment that limits either the dollar amount, the percent of the portfolio or the maturity term) for diversifying the investment
portfolio so that potential losses on individual securities will be minimized.
The City’s Investment Management Plan outlines the following criteria related to portfolio diversification:
No more than 5% of the City’s portfolio (exclusive of government agency issues or LAIF) shall be placed with any financial
institution.
Type of Investment Rating Total
Federal Agency Bonds / Notes AA+19,339,493$
Corporate Notes AAA 998,041
AA+1,062,618
AA 2,871,049
AA-2,183,279
A+607,155
A 4,799,367
A-977,733
BBB+1,329,978
Total Corporate Notes 14,829,220
Commercial Paper A-1 1,483,937
Asset-Backed Securities AAA 2,537,880
Negotiable Certificates of Deposit A-1+1,149,114
AA-2,863,625
A+1,359,388
A-1 2,491,223
Total Negotiable Certificates of Deposit 7,863,350
Not Applicable:
U.S. Treasury Bonds / Notes 33,762,592
Not Rated:
State Local Agency Investment Fund 23,339,125
Non-Negotiable Certificates of Deposit 1,000,000
Money Market Mututal Funds 1,460,882
Total Investments 105,616,479$
53
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 14
Note 2: Cash and Investments (Continued)
No more than 25% of the City’s portfolio shall be invested in collateralized certificates of deposit issued by financial
institutions.
Certificates of deposit (negotiable and collateralized) placed by the City shall not constitute more than 15% of the total
assets of the institution; and negotiable certificates of deposit will only be placed with institutions with total assets in excess
of $200 million and that maintain a ratio of equity to total assets of at least 5%.
Foreign Currency Risk. The City does not hold any investment that is based on foreign currency exchange rates.
Note 3: Property Taxes
Property taxes in the State of California (State) are administered for all local agencies at the county level, and consist of secured,
unsecured and utility tax rolls. The following is a summary of major policies and practices relating to property taxes:
Property Valuation. Valuations are established by the Assessor of the County of San Luis Obispo (County) for the secured
and unsecured property tax rolls; the utility property tax roll is valued by the State Board of Equalization. Under the
provisions of Article XIIIA of the State Constitution (Proposition 13 adopted by the voters on June 6, 1978), properties are
assessed at 100% of full value. Proposition 13 also modified the value of taxable real property for fiscal 1979 by rolling
back values to fiscal 1976 levels. From this base of assessment, subsequent annual increases in valuation are limited to a
maximum of 2%. However, increases to full value are allowed for property improvements or upon change in ownership.
Personal property is excluded from these limitations and is subject to annual reappraisal.
Tax Levies. Under the provisions of Proposition 13, the County wide tax levy for general revenue purposes is limited to
1% of full market value, which results in a tax rate of $1.00 per $100 assessed valuation. Tax rates for voter approved
indebtedness are excluded from this limitation.
Tax Levy Dates. All lien dates attach annually on January 1 preceding the fiscal year for which the taxes are levied. The
fiscal year begins July 1 and ends June 30 of the following year. Taxes are levied on both real and unsecured personal
property as it exists at that time. The lien against real estate as well as the tax on personal property is not relieved by
subsequent renewal or change in ownership.
Tax Collections. The County Treasurer/Tax Collector is responsible for all property tax collections. Taxes and assessments
on the secured and utility rolls, which constitute a lien against the property, may be paid in two installments: the first
installment is due on November 1 of the fiscal year and is delinquent if not paid by December 10; and the second installment
is due on March 1 of the fiscal year and is delinquent if not paid by April 10. Unsecured personal property taxes do not
constitute a lien against real property. However, if the taxes become delinquent the lien is attached against anything the
individual owns, which could include real property.
Payment must be made in one installment, which is delinquent if not paid by August 31 of the fiscal year. Significant
penalties are imposed by the County for late payments.
54
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 15
Note 3: Property Taxes (Continued)
Teeter Plan. In 1993-94 the City elected to receive property tax revenue in accordance with the alternative method of
distribution prescribed by Sections 4701-4717 of the California Revenue and Taxation Code, which is commonly known
as the “Teeter Plan” whereby the County remits 100% of taxes levied without regard to delinquencies. The County then
pursues collection, retaining any delinquent taxes and related penalties and interest.
Tax Levy Apportionments. Due to the nature of the County wide maximum levy, it is not possible to identify general
purpose tax rates for specific entities. Under State legislation adopted subsequent to the passage of Proposition 13,
apportionments to local agencies are made by the County Auditor Controller based primarily on two factors: the ratio that
each agency represented of the total County wide levy for the three years prior to fiscal 1979; and subsequent adjustments
to these apportionments and transfers to the “Educational Revenue Augmentation Fund” (ERAF) as determined by the
State.
City Property Tax Distribution Policy. Property taxes are recorded in the General Fund as general purpose revenue.
Transfers are made from the General Fund as needed to support expenditures in the Capital Outlay, Open Space Protection,
Fleet Replacement, Information Technology Replacement, Major Facility Replacement and Debt Service Funds. Property
taxes receivable at June 30, 2019 have been accrued since they will be collected within 60 days subsequent to year-end.
Note 4: Capital Assets
GASB standards require that the City report in the government-wide statements the value of all capital assets net of accumulated
depreciation, including infrastructure assets, in accordance with GAAP. Infrastructure assets are defined as long-lived capital assets
that are stationary in nature and normally can be preserved for a significantly greater number of years than most capital assets.
The minimum requirement for compliance with GASB standards is to provide infrastructure valuations for all assets constructed,
acquired, or placed into service on or after July 1, 1980. Relevant assets for the City were valued at one of two dates: 1) the original
date of construction, if available, or 2) the incorporation date of the City. Each asset was reviewed to determine the adequacy of the
data to value the asset prior to July 1, 1980 using historical cost or estimated historical cost.
55
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 16
Note 4: Capital Assets (Continued)
Capital assets activity for the fiscal year ended June 30, 2019 was as follows:
Balance Balance
June 30, 2018 Additions Deletions Transfers June 30, 2019
Governmental activities:
Capital assets not being depreciated:
Land 32,020,193$ $ $ $ 32,020,193$
Construction in progress 10,120,342 7,765,801 (598,624) (9,712,574) 7,574,945
Public art 646,630 646,630
Total capital assets not
being depreciated 42,787,165 7,765,801 (598,624) (9,712,574) 40,241,768
Capital assets being depreciated:
Infrastructure 182,328,513 5,346,068 187,674,581
Accumulated Depreciation (58,307,345) (3,011,582) (61,318,927)
Buildings and improvements 37,074,841 2,285,127 39,359,968
Accumulated Depreciation (19,596,157) (1,704,539) (21,300,696)
Equipment 30,767,595 673,095 (336,740) 2,081,379 33,185,329
Accumulated Depreciation (18,498,142) (1,897,545) 336,740 (20,058,947)
Total capital assets being
depreciated, net 153,769,305 (5,940,571) - 9,712,574 157,541,308
Governmental activities,
capital assets, net 196,556,470 1,825,230 (598,624) - 197,783,076
Business-type activities:
Capital assets not being depreciated:
Land 9,069,495$ $ $ $ 9,069,495$
Construction in progress 17,917,396 7,801,221 (78,236) (5,693,574) 19,946,807
Public art 74,100 74,100
Total capital assets not
being depreciated 27,060,991 7,801,221 (78,236) (5,693,574) 29,090,402
Capital assets being depreciated:
Infrastructure 215,159,295 4,640,922 219,800,217
Accumulated Depreciation (79,355,401) (6,454,224) (85,809,625)
Buildings and improvements 30,149,226 30,149,226
Accumulated Depreciation (13,579,744) (648,860) (14,228,604)
Equipment 20,098,881 (141,289) 1,052,652 21,010,244
Accumulated Depreciation (18,631,479) (1,653,003) 141,289 (20,143,193)
Total capital assets being
depreciated, net 153,840,778 (8,756,087) - 5,693,574 150,778,265
Business-type activities,
capital assets, net 180,901,769 (954,866) (78,236) - 179,868,667
Total Government-wide 377,458,239$ 870,364$ (676,860)$ -$ 377,651,743$
56
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 17
Note 4: Capital Assets (Continued)
Depreciation expense was charged to functions/programs as follows:
Governmental activities:
Public safety 535,707$
Transportation 2,519,807
Culture and recreation 244,706
Community development 112,432
General government 3,201,014
Total depreciation - governmental activities 6,613,666$
Business-type activities:
Water 2,810,842
Sewer 4,725,546
Parking 650,244
Transit 569,455
Total depreciation - business-type activities 8,756,087
Total Government-wide 15,369,753$
57
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 18
Note 5: Long Term Debt
Summary of Long-Term Debt
The following is a summary of the City's long-term debt transactions for the year ended June 30, 2019:
Compensated absences in the governmental funds are generally liquidated by the General Fund on a pay as you go basis. For detail
of estimated claims and liabilities, see Note 10.
The San Luis Obispo Capital Improvement Board (Board) has entered into a number of lease agreements with the City of San Luis
Obispo wherein the City is obligated to make all debt service payments. The transactions between the Board and the City have been
eliminated from these financial statements.
Balance Balance Due Within
June 30, 2018 Additions Deductions June 30, 2019 One Year
Governmental activities:
2012 Lease revenue refunding bonds 3,725,000$ (245,000)$ 3,480,000$ 250,000$
2014 Lease revenue bonds 7,130,000 (160,000) 6,970,000 165,000
2018 Lease revenue refunding bonds 11,072,775 (818,750) 10,254,025 510,900
21,927,775 - (1,223,750) 20,704,025 925,900
Add: Unamortized bond premium 1,556,675 (89,261) 1,467,414
Total revenue bonds 23,484,450 - (1,313,011) 22,171,439 925,900
Lease-purchase financing 1,599,769 673,095 (858,925) 1,413,939 668,726
Compensated absences 2,468,124 260,298 2,728,422 1,909,895
Conservation Loan 503,101 (89,434) 413,667 90,320
Total long-term debt,
governmental activities 28,055,444$ 933,393$ (2,261,370)$ 26,727,467$ 3,594,841$
Business-type activities:
2006 Water revenue bonds 12,520,000$ (12,520,000)$ -$
2012 Water revenue refunding bonds 2,540,000 (470,000) 2,070,000 485,000
2018 Lease revenue refunding bonds 5,832,225 (431,250) 5,400,975 269,100
2018 Water revenue refunding bonds - 10,095,000 (455,000) 9,640,000 415,000
20,892,225 10,095,000 (13,876,250) 17,110,975 1,169,100
Add: Unamortized bond premium 922,979 1,714,515 (205,812) 2,431,682
Total revenue bonds 21,815,204 11,809,515 (14,082,062) 19,542,657 1,169,100
Loans 15,743,808 (993,025) 14,750,783 1,016,131
Installment sale agreements 6,783,114 (601,212) 6,181,902 619,470
Compensated absences 637,526 (92,298) 545,228 381,659
Total long-term debt,
business-type activities 44,979,652 11,809,515 (15,768,597) 41,020,570 3,186,360
Total Government-wide 73,035,096$ 12,742,908$ (18,029,967)$ 67,748,037$ 6,781,201$
58
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 19
Note 5: Long Term Debt (Continued)
Governmental Activities Summary:
Revenue Bonds
2012 Refunding Lease Revenue Bonds. In 2012, the Board issued refunding lease revenue bonds in the amount of $5,050,000 to
refinance the outstanding 2001 lease revenue bonds, Series C. The purpose of these bonds was to purchase property and build athletic
fields, purchase property for police station expansion, and purchase Downtown Plan properties. The bonds bear interest from 2.0%
to 4.0% and are due in annual installments on December 1 through December 1, 2029 that range from $210,000 to $390,000. At
June 30, 2019, the principal amount outstanding on the bonds was $3,480,000. The bond indenture agreement specifies reserve
requirements equal to the maximum debt service in any particular year to be held in the Trustee’s reserve funds. The reserve
requirement has been met for the year ended June 30, 2019.
In the Statement of Net Position, the 2012 bonds include the related unamortized premium which is being amortized and charged to
expense over the term of the 2012 bonds. At June 30, 2019, the unamortized premium was $200,525.
2014 Lease Revenue Bonds. In 2014, the Board issued lease revenue bonds in the amount of $7,580,000 to finance the expansion
of the Los Osos Valley Road interchange at U.S. 101. The bonds bear interest from 3.00% to 4.00% and are due in annual installments
on November 1 through November 1, 2044 that range from $145,000 to $410,000. At June 30, 2019, the principal amount outstanding
on the bonds was $6,970,000.
In the Statement of Net Position, the 2014 bonds include the related unamortized premium which is being amortized and charged to
expense over the term of the 2014 bonds. At June 30, 2019, the unamortized premium was $172,602.
2018 Lease Revenue Refunding Bonds. In 2018, the Board issued lease revenue bonds in the amount of $16,905,000 to advance
refund the outstanding 2005 revenue refunding bonds and the 2006 and 2009 lease revenue bonds, which were originally issued to
construct several high priority capital improvement projects and to finance the costs of acquisition and construction of public parking
facilities, and the public safety communications and emergency operations center project. Of the original bond issuance, $11,072,775
was used for financing governmental activities related to the original bonds and the remainder was used for business-type activities.
The bonds bear interest from 3.00% to 5.00% and are due in annual installments on June 1, through June 1, 2039 that range from
$255,000 to $1,250,000. At June 30, 2019, the principal amount outstanding that pertains to governmental activities was $10,254,025
of the total $16,905,000 outstanding.
In the Statement of Net Position, the 2018 bonds include the related unamortized premium which is being amortized and charged to
expense over the term of the 2018 bonds. At June 30, 2019, the unamortized premium for governmental activities was $1,018,974.
The refunding resulted in a difference of $374,404 between the reacquisition price and the net carrying value of the old debt and is
being amortized to expense through 2039. The City completed the refunding to reduce its total debt service payments over the
following 21 years by $3,838,338 and to obtain an economic gain of $2,960,278 (difference between the present values of the old
and the new debt service payments).
59
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 20
Note 5: Long Term Debt (Continued)
At June 30, 2019, the aggregate maturities of the aforementioned governmental activities revenue bonds were as follows:
Lease-Purchase Financing
Fire Apparatus. In 2010 the Board obtained lease-purchase financing in the amount of $1,080,000 to purchase a fire truck. The
gross amount of assets under this lease is $1,047,927 million with accumulated depreciation of $423,494 included in equipment at
June 30, 2018. Amortization of the equipment is included in depreciation expense. The lease agreement bears an interest rate of
2.99% due in annual installments on February 1 through February 1, 2020 that range from $80,000 to $125,100. At June 30, 2019
the principal amount outstanding is $125,000.
Fire Engine. In 2013 the City obtained lease-purchase financing in the amount of $548,351 to purchase a fire truck. The gross
amount of assets under this lease is $550,738 with accumulated depreciation of $183,579 included in equipment at June 30, 2019.
Amortization of the equipment is included in depreciation expense. The lease agreement bears an interest rate of 6.00% due in annual
installments on July 11 through July 11, 2018 that range from $106,000 to $114,000. The City completed the payments of this lease
in the fiscal year ending June 30, 2019.
Computers. In 2016 the City obtained lease-purchase financing in the amount of $688,500 to purchase mobile data computers,
hardware to install the computers in City vehicles, installation costs, and wireless network components. The gross amount of assets
under this lease is $714,611 with accumulated depreciation of $142,922 included in equipment at June 30, 2019. Amortization of
the equipment is included in depreciation expense. The lease agreement bears an interest rate of 1.55% due in quarterly installments
beginning December 1, 2015 through September 1, 2019 in the amount of $44,000. At June 30, 2019 the principal amount
outstanding is $44,291.
Fire Engine and Street Sweeper. In 2017 the City obtained lease-purchase financing in the amount of $1,141,468 to purchase a fire
truck and street sweeper. The gross amount of assets under this lease is $1,142,712 with accumulated depreciation of $171,439
included in equipment at June 30, 2019. Amortization of the equipment is included in depreciation expense. The lease agreement
bears an interest rate of 1.69% due in annual installments on April 28 through April 28, 2021 of $240,067. At June 30, 2019 the
principal amount outstanding is $468,163.
Street Sweeper. In 2018 the City obtained lease-purchase financing in the amount of $330,000 to purchase a street sweeper. The
gross amount of assets under this lease is $303,400 with accumulated depreciation of $19,838 included in equipment at June 30,
2019. The lease agreement bears an interest rate of 1.94% due in annual installments on June 1 through December 1, 2020 of $70,614.
At June 30, 2019 the principal amount outstanding is $197,688.
For the Year Ending June 30, Principal Interest Total
2020 925,900 830,723 1,756,623
2021 960,550 794,412 1,754,962
2022 998,475 755,890 1,754,365
2023 1,039,850 715,750 1,755,600
2024 1,091,050 674,056 1,765,106
2025-2029 5,513,250 2,648,587 8,161,837
2030-2034 4,591,125 1,523,246 6,114,371
2035-2039 3,348,825 734,137 4,082,962
2040-2044 1,825,000 348,294 2,173,294
2045 410,000 8,200 418,200
20,704,025$ 9,033,295$ 29,737,320$
60
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 21
Note 5: Long Term Debt (Continued)
Fire Truck. In 2018 the City obtained lease-purchase financing in the amount of $673,095 to purchase a fire truck. The gross amount
of assets under this lease is $673,095 with no accumulated depreciation as it was placed in service at the end of the year. The lease
agreement bears an interest rate of 3.178% due in quarterly installments of $36,533 beginning December 5, 2018 through September
5, 2023. At June 30, 2019 the principal amount outstanding is $578,795.
At June 30, 2019, the aggregate maturities of the aforementioned governmental activities lease-purchase financing were as follows:
2014 Energy Sources Conservation State Loan
In 2014, the City obtained a note in the amount of $850,775 for the purchase of streetlights. The note bears an interest rate of 1%
due in semi-annual installments on December 22 and June 22 through December 22, 2023 in the amount of $92,242. At June 30,
20198 the principal amount outstanding is $413,667.
At June 30, 2019, the aggregate maturities of the aforementioned governmental activities conservation loan is as follows:
Business-Type Activities Summary:
Revenue Bonds
2012 Water Revenue Refunding Bonds. In 2012, the City issued water revenue refunding bonds in the amount of $4,960,000 to
refund the 2002 water revenue bonds, which were originally issued to fund water system improvements. The bonds bear interest
from 2.0% to 4.0% and are due in annual installments on June 1 through June 1, 2023 that range from $340,000 to $550,000. At
June 30, 2019, the principal amount outstanding on the bonds was $2,070,000. The bond indenture agreement specifies reserve
requirements equal to the maximum debt service in any particular year to be held in the Trustee’s reserve funds. The reserve
requirement has been met for the year ended June 30, 2019.
In the Statement of Net Position, the 2012 bonds include the related unamortized premium which is being amortized and charged to
expense over the term of the 2012 bonds. At June 30, 2019, the unamortized premium was $278,573.
For the Year Ending June 30, Principal Interest Total
2020 668,726 31,798 700,524
2021 429,108 17,297 446,405
2022 137,715 8,415 146,130
2023 142,144 3,986 146,130
2024 36,246 289 36,535
1,413,939$ 61,785$ 1,146,929$
For the Year Ending June 30, Principal Interest Total
2020 90,320 3,922 94,242
2021 91,236 3,007 94,243
2022 92,150 2,092 94,242
2023 93,074 1,168 94,242
2024 46,887 234 47,121
413,667$ 10,423$ 424,090$
61
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 22
Note 5: Long Term Debt (Continued)
The City has pledged future water system revenues, net of specific operating expenses, to repay the bonds on parity with a pledge
that services all parity obligations. The bonds are payable solely from water customer net revenues and any moneys in the bond
service fund and the reserve fund. For the year ended June 30, 2019, principal and interest paid and total customer net revenues were
$571,600 and $4,285,260, respectively.
2018 Lease Revenue Refunding Bonds. In 2018, the Board issued lease revenue bonds in the amount of $16,905,000 to advance
refund the outstanding 2005 revenue refunding bonds and the 2006 and 2009 lease revenue bonds, which were originally issued to
construct several high priority capital improvement projects and to finance the costs of acquisition and construction of public parking
facilities, and the public safety communications and emergency operations center project. Of the original bond issuance, $5,832,225
was used for financing business-type activities related to the original bonds and the remainder was used for governmental activities.
The bonds bear interest from 3.00% to 5.00% and are due in annual installments on June 1, through June 1, 2039 that range from
$255,000 to $1,250,000. At June 30, 2019, the principal amount outstanding that pertains to business-type activities was $5,400,975
of the total $15,655,000 outstanding.
In the Statement of Net Position, the 2018 bonds include the related unamortized premium which is being amortized and charged to
expense over the term of the 2018 bonds. At June 30, 2019, the unamortized premium that pertains to business-type activities was
$536,712.
The refunding resulted in a difference of $374,404 between the reacquisition price and the net carrying value of the old debt and is
being amortized to expense through 2039. The City completed the refunding to reduce its total debt service payments over the next
21 years by $3,838,338 and to obtain an economic gain of $2,960,278 (difference between the present values of the old and the new
debt service payments).
2018 Water Revenue Refunding Bonds. In 2018, the City issued water revenue refunding bonds the in the amount of $10,095,000
to refund the 2006 water revenue bonds, which were originally issued to fund improvements to the water treatment plant. The bonds
bear interest from 4% to 5% and are due in annual installments on June 1 through June 1, 2035 that range from $455,000 to $845,000.
At June 30, 2019, the principal amount outstanding on the bonds was $9,640,000.
The City has pledged future water system revenues, net of specific operating expenses, to repay the bonds on parity with a pledge
that services all parity obligations. The bonds are payable solely from water customer net revenues and any moneys in the bond
service fund and the reserve fund. For the year ended June 30, 2019, principal and interest paid and total customer net revenues were
$898,082 and $4,285,260, respectively. In the Statement of Net Position, the bonds include the related unamortized premium which
is being amortized and charged to expense over the term of the bonds. At June 30, 2019, the unamortized premium was $1,613,661.
At June 30, 2019, the aggregate maturities of the business-type revenue bonds were as follows:
For the Year Ending June 30, Principal Interest Total
2020 1,169,100$ 780,040$ 1,949,140$
2021 1,224,450 733,276 1,957,726
2022 1,276,525 684,298 1,960,823
2023 1,320,150 633,238 1,953,388
2024 808,950 575,732 1,384,682
2025-2029 4,296,750 2,265,928 6,562,678
2030-2034 5,198,875 1,125,860 6,324,735
2035-2039 1,816,175 115,254 1,931,429
17,110,975$ 6,913,626$ 24,024,601$
62
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 23
Note 5: Long Term Debt (Continued)
Loans
2001 CIEDB State Loan. In 2001, the City obtained a note in the amount of $7,765,900 to go towards expanding the March Street
parking structure. The note bears an interest rate of 3.37% due in semi-annual installments on February 1 and August 1 through
August 31, 2031 that range from $169,000 to $396,000. At June 30, 2019, the principal amount outstanding on the loan was
$4,322,760.
2004 State Water Control Board Loan. In 2004, the City obtained a note in the amount of $8,883,231 to go towards the water reuse
project. The note bears an interest rate of 2.5% due in annual installments on August 31 through August 31, 2024 that range from
$296,000 to $512,600. At June 30, 2019, the principal amount outstanding on the loan was $2,894,283.
2009 Infrastructure and Economic Development Bank Loan– Tank Farm Lift Station. In 2009, the City obtained a note in the
amount of $10,000,000 to go towards the Tank Farm lift station and main sewer project. The note bears an interest rate of 3.25%
due in annual installments on December 1 through December 1, 2037 that range from $212,600 to $520,744. At June 30, 2019, the
principal amount outstanding on the loan was $7,533,740.
The City has pledged future sewer system revenues, net of specific operating expenses, to repay the loan. The loan is payable solely
from sewer customer net revenues. For the year ended June 30, 2019, principal and interest paid and total customer net revenues
were $533,060 and $9,908,662, respectively.
2018 Clean Water State Revolving Fund Loan. In 2018, the City Council approved the Clean Water State Revolving Fund loan
agreement between the City of San Luis Obispo and the California State Water Resources Control Board for a $140 million loan for
the Water Resource Recovery Facility Project. The City will receive $4 million in principal forgiveness and the remaining $136
million will be repaid over 30 years. The applicable interest rate was set at 1%. As of June 30, 2019, the City had not drawn down
any of the loan funds.
At June 30, 2019, the aggregate maturities of the aforementioned business-type loans were as follows:
Installment Sale Agreements
2008 Suntrust Bond. In 2008, the Board entered into an installment sale contract financing $2,050,000 to finance the Tank Farm lift
station. The terms state an interest rate of 4.2% due in annual installments through 2023 that range from $372,900 to $607,200. At
June 30, 2019, the principal amount outstanding on the loan was $825,000.
For the Year Ending June 30, Principal Interest Total
2020 1,016,131$ 368,567$ 1,384,698$
2021 1,050,806 350,305 1,401,111
2022 1,080,963 331,466 1,412,429
2023 1,111,897 312,030 1,423,927
2024 1,143,934 291,979 1,435,913
2025-2029 4,050,280 1,136,190 5,186,470
2030-2034 3,304,624 555,921 3,860,545
2035-2038 1,992,148 131,613 2,123,761
14,750,783$ 3,478,071$ 18,228,854$
63
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 24
Note 5: Long Term Debt (Continued)
US Bancorp 2014 Wastewater Lease. In 2013, the Board entered into an installment sale contract financing $7,479,000 to finance
the acquisition and installation of improvements to its water reclamation facility. The note bears an interest rate of 2.8994% due in
annual installments on June 1 and December 1 through December 1, 2028 that range from $372,900 to $607,200. At June 30, 2019,
the principal amount outstanding on the loan was $5,356,902.
At June 30, 2019, the aggregate maturities of the aforementioned business-type installment sale agreements were as follows:
There are a number of limitations and restrictions contained in the various bond indentures. City management believes that the City
has complied with the indenture requirements. Security for revenue bonds is paid from receipts or net income and amounts in funds
or accounts established under bond indentures.
Note 6: Pension Plans
The City contributes to the California Public Employees’ Retirement System (CalPERS) for its employees. The City participates in
one agent multiple-employer plan for its miscellaneous employees (Miscellaneous Plan) and one cost-sharing multiple-employer
plan for its safety employees (Safety Plan). The Miscellaneous Plan is described in the first section of the footnote under Agent-
Multiple Employer Plan and the Safety Plan follows and is described in the second section of the footnote under Cost-Sharing
Employer Plan. A summary of the government-wide balances for all Plans at June 30, 2019 are as follows:
Agent-Multiple Employer Plan
General Information about the Pension Plan
Plan Descriptions. As noted above, the City contributes to CalPERS for a defined benefit pension plan for all qualified permanent
and probationary employees. CalPERS acts as a common investment and administrative agent for its participating member
employers. Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available
reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information
that can be found on the CalPERS website.
For the Year Ending June 30, Principal Interest Total
2020 619,470 179,994 799,464
2021 643,055 292,673 935,728
2022 662,064 138,685 800,749
2023 681,479 117,026 798,505
2024 706,312 94,628 800,940
2025-2029 2,869,522 212,766 3,082,288
6,181,902$ 1,035,772$ 7,217,674$
Net Pension Deferred Outflows Deferred Inflows
Liability of Resources of Resources
Miscellaneous Plan 81,792,409$ 14,631,641$ 888,474$
Safety Plan 71,940,534 19,206,619 3,739,520
Total Government-Wide 153,732,943$ 33,838,260$ 4,627,994$
64
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 25
Note 6: Pension Plans (Continued)
Benefits Provided. CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits
to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year
of full-time employment for Tier 1 employees. Tier 2 and PEPRA employees are based on a three-year average of full time
employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members
are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death
Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for the plan are
applied as specified by the Public Employees’ Retirement Law.
The Miscellaneous Plan’s provisions and benefits by tier in effect at June 30, 2019, are summarized as follows:
While the City's Miscellaneous Plan is not closed to new entrants, the component option of 2.7% @ 55 is closed to new entrants.
Classic Members as defined by CalPERS entering the City's Miscellaneous Plan would enter the 2% @ 60 option while New
Members as defined by CalPERS entering the City Miscellaneous Plan would enter the 2% @ 62 option.
Employees Covered. As of the measurement date June 30, 2018, the following employees were covered by the benefit terms for the
Miscellaneous Plan:
Contributions. Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates
for all public employers be determined on an annual basis by the actuary and shall be effective on July 1 following notice of a change
in the rate. Funding contributions for the Plan are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially
determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an
additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially
determined rate and the contribution rate of employees.
Prior to On or after On or after
Hire date December 6, 2012 December 6, 2012 January 1, 2013
Benefit formula 2.7% @ 55 2% @ 60 2% @ 62
Benefit vesting schedule 5 years service 5 years service 5 years service
Benefit payments monthly for life monthly for life monthly for life
Retirement age 50 - 55 50 - 63 52 - 67
Monthly benefits, as a % of
eligible compensation 2.0% to 2.7% 1.092% to 2.418% 1.0% to 2.5%
Required employee contribution rates 7.515%7.515%6.25%
Required employer contribution rates 10.497%10.497%10.497%
Tiers within the Miscellaneous Plan
Miscellaneous Plan
Inactive employees or beneficiaries
currently receiving benefits 399
Inactive employees entitled to but
not yet receiving benefits 230
Active employees 312
Total 941
65
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 26
Note 6: Pension Plans (Continued)
Net Pension Liability
The City’s net pension liability for the Miscellaneous Plan is measured as the total pension liability, less the pension plan’s fiduciary
net position. The net pension liability of the Plan is measured as of June 30, 2018, using an annual actuarial valuation as of June 30,
2017 rolled forward to June 30, 2018 using standard update procedures. A summary of principal assumptions and methods used to
determine the net pension liability is shown below.
Actuarial Assumptions. The total pension liability in the June 30, 2017 actuarial valuation was determined using the following
actuarial assumptions:
Discount Rate. The discount rate used to measure the total pension liability was 7.15% for the Plan. To determine whether the
municipal bond rate should be used in the calculation of a discount rate for each plan, CalPERS stress tested plans that would most
likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing, none of the
tested plans run out of assets. Therefore, the current 7.15% discount rate is adequate and the use of the municipal bond rate calculation
is not necessary. The long-term expected discount rate of 7.15% will be applied to all plans in the Public Employees Retirement
Fund (PERF). The cash flows used in the testing were developed assuming that both members and employers will make their required
contributions on time and as scheduled in all future years. The stress test results are presented in a detailed report called “GASB
Crossover Testing Report” that can be obtained from the CalPERS website.
The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-
estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are
developed for each major asset class.
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Inflation
Salary Increase
Mortality (1)
Post Retirement Benefit Increase
(1) The mortatily table used was developed based on CalPERS-specific data. The table includes 15 years of
mortality improvements using the Society of Actuaries Scale 90% of scale MP 2016. For more details on this
table, please refer to the December 2017 experience study report (based on CalPERS demographic data from 1997
to 2015) that can be found on the CalPERS website.
Contract COLA up to 2.75% until Purchasing Power Protection
Allowance Floor on Purchasing Power applies, 2.75% thereafter
Derived using CalPERS' Membership Data for all Funds
Varies by Entry Age and Service
2.75%
7.15%
Entry-Age Normal Cost Method
June 30, 2018
Miscellaneous Plan
June 30, 2017
66
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 27
Note 6: Pension Plans (Continued)
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return
expectations as well as the expected pension fund (PERF) cash flows. Taking into account historical returns of all the Public
Employees Retirement Funds’ asset classes (which includes the agent plan and two cost-sharing plans or PERF A, B, and C),
expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a
building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was
calculated for each PERF. The expected rate of return was set by calculating the single equivalent expected return that arrived at the
same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate
of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative
expenses.
The table below reflects the long-term expected real rate of return by asset class.
Assumed
Asset Real Return Real Return
Asset Class (a)Allocation Years 1 - 10 (b)Years 11+ (c)
Global Equity 50.0%4.80%5.98%
Fixed Income 28.0%1.00%2.62%
Inflation Assets ―0.77%1.81%
Private Equity 8.0%6.30%7.23%
Real Assets 13.0%3.75%4.93%
Liquidity 1.0%―-0.92%
(a) In the CalPERS's CAFR, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-
term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities
(b) An expected inflation of 2.0% used for this period
(c) An expected inflation of 2.92% used for this period
Miscellaneous Plan
67
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 28
Note 6: Pension Plans (Continued)
Changes in the Net Pension Liability
The changes in the Net Pension Liability for the Miscellaneous Plan follows:
Sensitivity of the Net Pension Liability to Changes in the Discount Rate. The following presents the net pension liability of the
City for the Plan, calculated using the discount rate for each Plan, as well as what the City’s net pension liability would be if it were
calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:
Pension Plan Fiduciary Net Position. Detailed information about the pension plan’s fiduciary net position is available in the
separately issued CalPERS financial reports.
Plan Net
Total Fiduciary Pension
Pension Net Liability/
Liability Position (Asset)
Balance at June 30, 2017 209,751,766$ 128,465,063$ 81,286,703$
Changes during the year:
Service cost 4,328,129 4,328,129
Interest on the total pension liability 14,778,918 14,778,918
Changes in assumptions (1,292,326) (1,292,326)
Differences between expected and
actual experience 1,445,049 1,445,049
Net plan to plan resource movement (316) 316
Contribution - employer 6,693,987 (6,693,987)
Contribution - employee 1,820,697 (1,820,697)
Net investment income 10,820,033 (10,820,033)
Benefit payments, including refunds
of employee contributions (10,740,816) (10,740,816) -
Administrative expense (200,184) 200,184
Other Miscellaneous Income/(Expense)(380,153) 380,153
Net changes 8,518,954 8,013,248 505,706
Balance at June 30, 2018 218,270,720$ 136,478,311$ 81,792,409$
Miscellaneous Plan
1% Decrease 6.15%
Net Pension Liability 109,534,233$
Current Discount Rate 7.15%
Net Pension Liability 81,792,409$
1% Increase 8.15%
Net Pension Liability 58,718,302$
68
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 29
Note 6: Pension Plans (Continued)
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
For the year ended June 30, 2019, the City’s pension expense for the Miscellaneous Plan was $11,998,851. At June 30, 2019, the
City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
The deferred outflows of resources related to contributions subsequent to the measurement date of $9,354,287 will be recognized as
a reduction of the net pension liability in the year ended June 30, 2019. Other amounts reported as deferred outflows of resources
and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Payable to the Pension Plan
At June 30, 2019, the City reported a payable of $0 for the outstanding amount of contributions to the pension plan required for the
year ended June 30, 2019.
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to
measurement date 9,354,287$ $
Changes in assumptions 3,739,867 888,474
Differences between expected and
actual experiences 1,225,086
Net differences between projected and
actual earnings on plan investments 312,401
Total 14,631,641$ 888,474$
Miscellaneous Plan
Measurement Period
Ended June 30 Amount
2019 5,624,511$
2020 404,652
2021 (1,290,466)
2022 (349,817)
4,388,880$
Miscellaneous Plan
69
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 30
Note 6: Pension Plans (Continued)
Cost-Sharing Employer Plan
General Information about the Pension Plan
Plan Descriptions. As noted above, the City contributes to CalPERS for a defined benefit pension plan for all qualified permanent
and probationary employees. CalPERS acts as a common investment and administrative agent for its participating member
employers. Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available
reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information
that can be found on the CalPERS website.
The City participates in five tiers of the safety cost-sharing multiple-employer plan. The Safety Plan tiers consist of Safety Tier 1
(police and fire), Police Tier 2, Fire Tier 2, Police PEPRA and Fire PEPRA.
Benefits Provided. CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits
to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year
of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits.
All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the
Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for
each plan are applied as specified by the Public Employees’ Retirement Law.
The Plan’s provisions and benefits within each tier in effect at June 30, 2019, are summarized as follows:
Police Fire Police Fire
Prior to Prior to On or after On or after
Hire date December 6, 2012 August 30, 2012 December 6, 2012 August 30, 2012
Benefit formula 3.0% @ 50 3.0% @ 50 2.0% @ 50 3.0% @ 55
Benefit vesting schedule 5 years service 5 years service 5 years service 5 years service
Benefit payments monthly for life monthly for life monthly for life monthly for life
Retirement age 50 - 55 50 - 55 50-55 50 - 55
Monthly benefits, as a % of eligible compensation 3.00%3.00% 2.0% to 2.7% 2.4% to 3%
Required employee contribution rates 8.989%8.989%8.936%8.984%
Required employer contribution rates 22.346%22.346%17.334% 19.353%
Police PEPRA Fire PEPRA
On or after On or after
Hire date January 1, 2013 January 1, 2013
Benefit formula 2.7% @ 57 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service
Benefit payments monthly for life monthly for life
Retirement age 50-57 50-57
Monthly benefits, as a % of eligible compensation 2.0% to 2.7% 2.0% to 2.7%
Required employee contribution rates 12.750%12.750%
Required employer contribution rates 12.965%12.965%
Safety Tier 1 Safety Tier 2
70
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 31
Note 6: Pension Plans (Continued)
The Safety Tier 1 is closed to new entrants.
Contributions. Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates
for all public employers be determined on an annual basis by the actuary and shall be effective on July 1st following notice of a
change in the rate. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30th by CalPERS.
The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the
year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between
the actuarially determined rate and the contribution rate of employees. Members of the Police Officers Association contribute 3% of
pay toward the cost of the City's share of the annual required contribution.
For the year ended June 30, 2019, the contributions recognized as part of pension expense were $5,910,345.
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
As of June 30, 2019, the City reported a net pension liability for its proportionate share of the Plan’s net pension liability of
$71,940,534.
The City’s net pension liability for the Plan is measured as the proportionate share of the net pension liability. The net pension
liability of the Plan is measured as of June 30, 2018, and the total pension liability for the Plan used to calculate the net pension
liability was determined by an actuarial valuation as of June 30, 2017 rolled forward to June 30, 2018 using standard update
procedures. The City’s proportion 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 as of the measurement dates of June 30, 2017 and 2018 was as follows:
Proportionate Share
Percentage share at 6/30/2017 1.19434%
Percentage share at 6/30/2018 1.22607%
Change - Increase/(Decrease)0.03173%
71
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 32
Note 6: Pension Plans (Continued)
For the year ended June 30, 2019, the City recognized pension expense of $11,470,923 for the Safety Plan. At June 30, 2019, the
City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Pension contributions subsequent to the measurement date of $8,348,780 are reported as deferred outflows of resources and will be
recognized as a reduction of the net pension liability in the year ended June 30, 2020. Other amounts reported as deferred outflows
of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 8,348,780$ $
Changes in assumptions 7,058,621 952,334
Differences between expected and actual experiences 1,545,759 5,864
Differences between projected and actual investment
earnings 487,071
Difference between employer's contributions and
proprtionate chare of contributions 2,781,322
Change in employer's proportion 1,766,388
Total 19,206,619$ 3,739,520$
Safety Plan
Measurement Period
Ended June 30 Amount
2019 6,483,319$
2020 3,520,357
2021 (2,387,060)
2022 (498,297)
7,118,319$
Safety Plan
72
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 33
Note 6: Pension Plans (Continued)
Actuarial Assumptions. The total pension liabilities in the June 30, 2016 actuarial valuations for the Safety Plan was determined
using the following actuarial assumptions:
Discount Rate. The discount rate used to measure the total pension liability was 7.15% for the Plan. To determine whether the
municipal bond rate should be used in the calculation of a discount rate for the Plan, CalPERS stress-tested plans that would most
likely result in a discount rate that would be different from the actuarially assumed discount rate. Based in the testing, none of the
tested plans run out of assets. Therefore, the current 7.15 percent discount rate is adequate and the use of the municipal bond rate
calculation is not necessary. The long-term expected discount rate of 7.15 percent will be applied to all plans in the Public Employees
Retirement Fund (PERF). The stress test results are presented in a detailed report that can be obtained from the CalPERS website.
The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-
estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are
developed for each major asset class.
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Inflation
Salary Increases
Post Retirement Benefit Increase
Mortality (1)
Varies by Entry Age and Service
Contract COLA up to 2.50% until Purchasing Power Protection
Allowance Floor on Purchasing Power applies, 2.75% thereafter
Derived using CalPERS' membership data for all funds
(1) The mortatily table used was developed based on CalPERS-specific data. The table includes 15 years of
mortality improvements using the Society of Actuaries Scale 90% of scale MP 2016. For more details on this table,
please refer to the December 2017 experience study report (based on CalPERS demographic data from 1997 to 2015)
that can be found on the CalPERS website.
Safety Plan
June 30, 2017
June 30, 2018
Entry-Age Normal Cost Method
7.15%
2.50%
73
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 34
Note 6: Pension Plans (Continued)
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return
expectations as well as the expected pension fund (PERF) cash flows. Taking into account historical returns of all the Public
Employees Retirement Funds’ asset classes (which includes the agent plan and two cost-sharing plans or PERF A, B, and C funds),
expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11-60 years) using a
building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was
calculated for each PERF fund. The expected rate of return was set by calculating the single equivalent expected return that arrived
at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected
rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of
one percent.
The table below reflects the long-term expected real rate of return by asset class. The rate of return was calculated using the capital
market assumptions applied to determine the discount rate and asset allocation. These rates of return are net of administrative
expenses.
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate. The following presents the City’s
proportionate share of the net pension liability, calculated using the discount rate for the Plans as well as what the City’s proportionate
share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage
point higher than the current rate:
Assumed
Asset Real Return Real Return
Asset Class (a)Allocation Years 1 - 10 (b)Years 11+ (c)
Global Equity 50.0% 4.80% 5.98%
Fixed Income 28.0% 1.00% 2.62%
Inflation Assets ―0.77% 1.81%
Private Equity 8.0% 6.30% 7.23%
Real Assets 13.0% 3.75% 4.93%
Liquidity 1.0%―-0.92%
Safety Plan
1% Decrease 6.15%
Net Pension Liability 99,483,321$
Current Discount Rate 7.15%
Net Pension Liability 71,940,533$
1% Increase 8.15%
Net Pension Liability 49,374,150$
74
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 35
Note 6: Pension Plans (Continued)
Pension Plan Fiduciary Net Position. Detailed information about each safety plan’s fiduciary net position is available in the
separately issued CalPERS financial reports.
Payable to the Pension Plan
At June 30, 2019, the City reported a payable of $0 for the outstanding amount of contributions to the pension plan required for the
year ended June 30, 2019.
Note 7: Other Post-Employment Benefits (OPEB)
General Information about OPEB
Plan Description. The City’s primary other post-employment benefits (OPEB) cost obligation is for retiree health benefits under its
election to participate in the CalPERS Health Benefit Program, an agent multiple-employer defined benefit OPEB plan, under the
“unequal contribution option.” The City entered the CalPERS medical insurance program in 1993 under the Public Employees’
Medical and Hospital Care Act (PEMHCA). During the fiscal year ended June 30, 2009, the City entered into an agreement to
participate in an irrevocable trust to provide a funding mechanism for retiree health benefits. The Trust, California Employers’
Retiree Benefit Trust (CERBT), is administered by CalPERS and managed by a separately appointed board, which is not under
control of the City Council. This Trust is not considered a component unit of the City.
Benefits Provided. The City provides post-employment heath care insurance, in accordance with Memorandums of Understanding,
to all employees who retire from the City upon or after attaining age 50 with at least 5 years of service or disability retirement.
Miscellaneous retires who are PEPRA new hires are eligible at age 52. For each retiree enrolled in a CalPERS medical plan, the
employer will pay the required statutory PEMHCA minimum, which is $133 per month per retiree in calendar year 2018 and $136
per month per retiree in calendar year 2019. This amount will increase with the health care component of CPI, as announced by the
CalPERS Board each year. The retiree must pay the difference between the premium amount, which depends upon the medical plan
benefits selected, and the employer-paid minimum. In addition, the City pays 50% of the premium up to the retiree’s age of 65 for
three grandfathered executive management retirees hired prior to August 2000.
There is no OPEB provided to terminated vested employees. The employer-paid amount will continue to a surviving spouse if the
retiree elects a CalPERS survivor annuity. There are no required employee contributions, although the retiree must pay the difference
between the premium and the employer-paid amount. The employer is contributing the full Actuarially Determined Contribution.
75
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 36
Note 7: Other Post-Employment Benefits (OPEB) (Continued)
Employees Covered. At June 30, 2018, the measurement date, the following number of employees were covered by the benefit terms:
Contributions. The contribution requirements of the plan members and the City are established and may be amended by the City.
The City prefunds the plan through CERBT by contributing at least 100% of the annual required contribution. For the year ended
June 30, 2019, the City’s contributions totaled $677,824.
Net OPEB Liability
The City’s net OPEB liability for the Plan is measured as the total OPEB liability less the Plan’s fiduciary net position. The net
OPEB liability of the Plan is measured as of June 30, 2018 using an actuarial valuation as of June 30, 2017. The principal assumptions
and methods used to determine the net liability are described below.
Change in Assumptions. There were no changes in assumptions for the measurement date June 30, 2018.
OPEB Plan
Inactive employees or beneficiaries
currently receiving benefits 179
Inactive employees entitled to but
not yet receiving benefit payments 185
Active employees 418
Total 782
Actuarial Valuation Date June 30, 2017
Measurement Date June 30, 2018
Contribution Policy Contributes full ADC
Actuarial Assumptions:
Discount Rate and 6.75% at June 30, 2018 and June 30, 2017
expected Long-Term Rate of Expected City contributions projected to keep
Return on Assets sufficient plan assets to pay all benefits from trust
General Inflation 2.75% annually
Mortality, Retirement, Disability, Rates from CalPERS 1997-2015 Experience Study
Termination
Mortality Improvement Post-retirement mortality projected fully generational with Society of
Actuaries Scale MP-2017
Salary Increases Aggregate - 3%
Merit - CalPERS 1997-2015 Experience Study
Medical Trend Non-Medicare - 7.5% for 2019, decreasing to an ultimate rate of 4.0%
in 2076 and later years.
Medicare - 6.5% for 2019, decreasing to an ultimate rate of 4.0% in
2076 and later years
Participation at Retirement Currently covered: 70% Currently waived: 15%
ACA Excise Tax Estimated by 2% load on Cash benefit payments.
OPEB Plan
76
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 37
Note 7: Other Post-Employment Benefits (OPEB) (Continued)
Discount Rate. The discount rate used to measure the total OPEB liability was 6.75% for the Plan. To determine whether the
municipal bond rate should be used in the calculation of a discount rate for the Plan, the actuary performed a stress-test on the Plan
that would most likely result in a discount rate that would be different from the actuarially-assumed discount rate. Based on the test,
the Plan will not run out of assets. Therefore, the current 6.75% discount rate is adequate, and the use of the municipal bond rate
calculation is not necessary. The long term expected discount rate of 6.75% is applied to the Plan. The stress-test results are presented
in the detailed actuarial report, which can be obtained from the City.
Investments. The following table reflects the long-term expected real rate of return of the Plan’s investments by asset class. The rates
of return are presented as geometric means developed over a twenty year period. These rates of return are net of administrative
expenses.
Current Expected
Target Real Rate
Asset Class Allocation (1) of Return (2)
Public Equity 57.0%4.82%
Fixed Income 27.0%1.47%
TIPS 5.0%1.29%
Commodities 3.0%0.84%
REITs 8.0%3.76%
Assumed Long-Term Rate of Inflation 2.75%
Assumed Long-Term Investment Expenses n/a
Expected Long-Term Net Rate of Return, Rounded 6.75%
Discount Rate (3)6.75%
(1) Provided by CalPERS' Strategic Asset Allocation Analysis Overview in August 2014 - Strategy 1.
(2) Geometric Average
(3) The fiduciary net position is projected to be sufficient to make projected benefit payments, and the
plan assets are expected to be invested using the strategy to achieve the expected return.
OPEB Plan
77
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 38
Note 7: Other Post-Employment Benefits (OPEB) (Continued)
Changes in the Net OPEB Liability
The changes in the net OPEB liability for the June 30, 2018 measurement date are as follows:
Sensitivity of Net OPEB Liability to Changes in the Discount Rate. The following presents the net OPEB liability at the current
discount rate, as well as what the net OPEB liability would be if it were calculated using a hypothetical discount rate that is one
percentage point lower or one percentage point higher than the current rate.
Plan
Total Fiduciary Net
OPEB Net OPEB
Liability Position Liability
Balance at June 30, 2017 13,130,633$ 5,479,720$ 7,650,913$
Changes during the year:
Service cost 463,629 463,629
Interest on the total pension liability 891,794 891,794
Contribution - employer 1,221,000 (1,221,000)
Net investment income 439,828 (439,828)
Benefit payments, including refunds
of employee contributions (765,000) (765,000) -
Administrative expense (10,170) 10,170
Net changes 590,423 885,658 (295,235)
Balance at June 30, 2018 13,721,056$ 6,365,378$ 7,355,678$
OPEB Plan
1% Decrease 5.75%
Net OPEB Liability 9,214,711$
Current Discount Rate 6.75%
Net OPEB Liability 7,355,678$
1% Increase 7.75%
Net OPEB Liability 5,825,382$
78
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 39
Note 7: Other Post-Employment Benefits (OPEB) (Continued)
Sensitivity of Net OPEB Liability to Changes in Healthcare Cost Trend Rates. The following presents the net OPEB liability at
current healthcare cost trend rates, as well as what the net OPEB liability would be if it were calculated using hypothetical healthcare
cost trend rates that are one percentage point lower or one percentage point higher than the current rate.
OPEB Plan Fiduciary Net Position. Detailed information about the OPEB Plan’s fiduciary net position is available in the separately
issued CalPERS financial reports on the CERBT.
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB
For the year ended June 30, 2019, the City’s OPEB expense was $944,269. At June 30, 2019, the City reported deferred outflows of
resources and deferred inflows of resources related to OPEB from the following sources:
OPEB contributions subsequent to the measurement date of $677,824 are reported as deferred outflows of resources and will be
recognized as a reduction of the net OPEB liability in the year ended June 30, 2020. Other amounts reported as deferred outflows of
resources and deferred inflows of resources related to OPEB will be recognized as pension expense as follows:
OPEB Plan
1% Decrease
Net OPEB Liability 5,559,777$
Current Trend
Net OPEB Liability 7,355,678$
1% Increase
Net OPEB Liability 9,577,917$
Deferred Outflows Deferred Inflows
of Resources of Resources
OPEB contributions subsequent to
measurement date 677,824$ $
Net differences between projected and
actual earnings on plan investments 168,433
Total 677,824$ 168,433$
Fiscal Year
Ended June 30 Amount
2020 (51,478)$
2021 (51,478)
2022 (51,479)
2023 (13,998)
(168,433)$
79
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 40
Note 7: Other Post-Employment Benefits (OPEB) (Continued)
Payable to the OPEB Plan
At June 30, 2019, the City reported a payable of $0 for the outstanding amount of contributions to the OPEB plan required for the
year ended June 30, 2019.
Note 8: Interfund Transactions
Interfund receivable and payable balances as of June 30, 2019 consist of the following:
Interfund receivables and payables include temporary negative cash balances that result from the timing of cash flows at year end
and the time lag between the dates that transactions are recorded in the accounting system and payment between funds are made.
Liquidation of interfund receivables and payables typically occurs in the first quarter of the subsequent fiscal year. Interfund balances
between governmental funds are not included in the government-wide Statement of Net Position.
Interfund transfers are used to move revenues from the fund with collection authorization to the debt service fund as debt service
principal and interest payments become due or to move unrestricted revenues to finance various programs that the government must
account for in other funds in accordance with budgetary authorizations. This may include amounts provided as matching funds for
various grant programs.
Interfund transfers for the year ended June 30, 2019 consist of the following:
Interfund
Receivables
Interfund
Payables
General Fund 311,583$ $
Nonmajor Governmental Funds:311,583
Total 311,583$ 311,583$
Non-Major
General Governmental
Transfer Out Fund Funds Total
General Fund -$ 5,182,219$ 5,182,219$
Non-Major 1,426,002 - 1,426,002
Water 1,040,953 73,750 1,114,703
Sewer 900,376 93,380 993,756
Parking 193,051 18,854 211,905
Transit 79,101 56,570 135,671
Total 3,639,483$ 5,424,773$ 9,064,256$
Transfer In
80
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 41
Note 9: Joint Ventures, Jointly Governed Organizations and Operating Agreements
The City participates in three multi-governmental organizations: the Whale Rock Commission, the San Luis Obispo Regional Transit
Authority, and the San Luis Obispo Council of Governments. The City also has an operating agreement related to Nacimiento Water
Supply Project. The following provides a general description of each of these agencies and operating agreements along with a
summary of financial information and indebtedness:
Whale Rock Commission
General Description. The Whale Rock Commission (Commission) was established on December 12, 1960 to govern the operations
of the Whale Rock Reservoir. The Commission is composed of six voting members and two non-voting members: three voting
members are appointed by the City; one is appointed by California Polytechnic State University; one by California Men's Colony;
and one by the Director of Finance, State of California. The two non-voting members are position appointments: the Director of
Water Resources, State of California; and the Water Superintendent, City of San Luis Obispo. The Commission is authorized by its
respective agencies to establish policies for the operation of the Reservoir, to contract for the sale of excess water, and to approve
the annual budget.
The City, in accordance with established policies of the Commission, operates and maintains the Reservoir; prepares and
recommends the annual budget; and maintains the fiscal records and funds of the Commission. The Whale Rock Agency Fund is
used to account for the Commission's ongoing operating activities. Ownership in the Reservoir is as follows: 55.05%, City of San
Luis Obispo; 33.71%, California Polytechnic State University; and 11.24%, California Men's Colony. The City's share of the
Commission's expenses are recorded as expenses of the Water Fund. All receipts and disbursements of the Commission are included
in an Agency Fund.
Financial Information and Indebtedness. In 1959, the City issued general obligation bonds to secure a future water supply to City
residents. Some of the proceeds from the bonds were used to participate with the State of California in the development of the
Reservoir. Participation, which is in proportion to the original investment, includes continued operation and maintenance of the
facilities. Such indebtedness was directly attributable to provision of water service, and as such, all related indebtedness was recorded
in the City's Water Enterprise Fund. These bonds matured in August 1999.
The City's original investment in the Reservoir project aggregates $3,900,000, and was amortized on a straight-line basis over thirty-
five years. Separate financial statements are available from the Whale Rock Commission, 879 Morro Street, San Luis Obispo, CA
93401.
The following segment financial information for the Whale Rock Commission and the Water Fund’s related investment in the joint
venture is presented as of and for the year ended June 30, 2019:
City's Investment
Joint Venture in Joint Venture
Total assets 3,210,485$ 1,767,372$
Total liabilities 97,987 53,941
Fund balance 3,112,498$ 1,713,431$
Total revenues 1,789,312$ 985,016$
Total expenditures 1,835,578 1,010,485
Excess of revenues over expenditures (46,266)$ (25,469)$
81
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 42
Note 9: Joint Ventures, Jointly Governed Organizations and Operating Agreements (Continued)
San Luis Obispo Regional Transit Authority
General Description. The City is a member of the San Luis Obispo Regional Transit Authority (Authority), which was established
on February 27, 1990, to operate a joint public transportation system. The Authority is composed of the Cities of Arroyo Grande,
Atascadero, Grover Beach, Morro Bay, Paso Robles, Pismo Beach, and San Luis Obispo, as well as the County of San Luis Obispo.
The Authority is governed by a Board of Directors comprised of representatives of each of the seven cities, in addition to the five
members of the Board of Supervisors. Each member of the Board has one vote. The Board has the authority to establish policies for
the operation of the transit system and to adopt an annual budget. Each member makes an annual contribution to the agency for
funding the adopted budget.
Financial Information. The City allocates a portion of its Transportation Development Act funds directly to the Authority. During
2018-19 the City contributed approximately $789,588 of these funds to the Authority. The City's share of assets, liabilities, and fund
equity has not been calculated by the Authority and therefore is not known to the City; however, based on the City's limited financial
participation in the Authority, any such assets, liabilities, or equity are not believed to be significant to the basic financial statements
taken as a whole. Separate financial statements are available from the Authority, 179 Cross Street, Suite A, San Luis Obispo, CA
93401.
San Luis Obispo Council of Governments
General Description. The San Luis Obispo Council of Governments (SLOCOG) was formed in 1968 through a joint powers
agreement among the incorporated cities and the County of San Luis Obispo. It acts as the regional transportation planning agency
for the county and is the metropolitan planning organization and the congestion management agency for the region. The governing
board consists of twelve delegates, each with one vote that includes the five members of the County Board of Supervisors and one
representative from each of the seven cities in the County.
Financial Information. A portion of the City's Transportation Development Act funds are directly allocated to the SLOCOG. The
City's share of assets, liabilities, and fund equity has not been calculated by SLOCOG and therefore is not known to the City;
however, based on the City's limited financial participation in SLOCOG, any such assets, liabilities, or equity are not believed to be
significant to the basic financial statements taken as a whole. Separate financial statements are available from SLOCOG, 1114 Marsh
Street, San Luis Obispo, CA 93401.
Nacimiento Water Supply Project
General Description. In 2004, the Council adopted a resolution approving an agreement with the San Luis Obispo County Flood
Control and Water Conservation District (District) for the design, construction, and operations of the facilities required for the
delivery of 5,482 acre-feet of water per year to the City of San Luis Obispo from the Nacimiento Water Supply Project (Project).
The agreement includes conditions relative to the costs associated with the project and how these costs will be shared and paid by
the participants in the project.
Each project participant, including the City, has entered into an agreement in order to provide for the development, financing,
construction, operation and maintenance of the Project. The agreement is a “take-or-pay” obligation: the City is obligated to pay
amounts specified in the agreement whether or not water is delivered. The City is required to pay an amount equal to its share of
various capital expenses relating to the funding of design costs, engineering, planning, environmental mitigation, equipping new
facilities and/or construction efforts, accounting services, project administration and management, installation, grading, razing and
building the Project. The City is also required to pay for its share of operating and maintenance costs. The City records these payments
as operating expenses in its water enterprise fund.
82
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 43
Note 9: Joint Ventures, Jointly Governed Organizations and Operating Agreements (Continued)
The City is required to make payments under its agreement solely from the revenues of its water system. The City agreed to establish
and collect rates and charges from the customers of the City’s water enterprise fund at levels sufficient to produce revenues equal
to: (1) the costs of operating and maintaining the City’s water enterprise; plus (2) the contract payments, calculated in accordance
with the delivery contract including the amounts allocated as the City’s share of capital projects installment debt service; plus (3)
the coverage factor for the amounts allocated as the City’s share of capital projects installment debt service; and (4) under certain
circumstances, that the City understands and agrees that the delivery contract may impose a surcharge following the occurrence of
any payment default.
Financial Information. In September 2007, the District sold water revenue bonds in the amount of $196 million for the construction
of the Project. These bonds were refinanced in August 2015. In addition, the District sold water revenue bonds in the amount of
$182 million. Based on the City’s share of construction costs, debt service and operating and maintenance, the following summarizes
the City’s Project obligations for 2018-19 and five-year projections for the 2015 bonds and the 2007 bonds that will remaining
outstanding following the refunding.
Separate financial statements are available from the San Luis Obispo County Flood Control and Water Conservation District, 1050
Monterey Street, San Luis Obispo, CA 93401.
Note 10: Risk Management
California Joint Powers Insurance Authority
The City is a member of the California Joint Powers Insurance Authority (Authority). The Authority is composed of 119 California
public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose
of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or
reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The California JPIA began
covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of
Directors. The Board operates through a nine-member Executive Committee.
Each member pays an annual contribution to cover estimated losses for the coverage period. This initial funding is paid at the
beginning of the coverage period. After the close of the coverage period, outstanding claims are valued. A retrospective deposit
computation is then conducted annually thereafter until all claims incurred during the coverage period are closed on a pool-wide
basis. This subsequent cost reallocation among members based on actual claim development can result in adjustments of either
refunds or additional deposits required.
Actual 2019 6,235,537$
Projected:
2020 4,945,455
2021 4,948,523
2022 4,945,814
2023 4,948,105
2024 4,950,993
2025-29 24,732,945
2030-34 24,736,939
2035-39 24,732,709
2040-41 10,737,705
Nacimiento Water Supply Obligations
83
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 44
Note 10: Risk Management (Continued)
The total funding requirement for self-insurance programs is estimated using actuarial models and prefunded through the annual
contribution. Costs are allocated to individual agencies based on exposure (payroll) and experience (claims) relative to other
members of the risk-sharing pool. Additional information regarding the cost allocation methodology is provided below.
Self-Insurance Programs of the Authority
General Liability and Workers’ Compensation. The City is a member of the California Joint Powers Insurance Authority (CJPIA),
which provides joint protection programs and group purchased insurance for public entities covering liability, errors and omission
losses, auto liability, employment practices liability, crime, pollution, workers’ compensation injuries and coverage for city-owned
property. The City has a retained limit of $500,000 per occurrence for liability and no retained limit for workers’ compensation.
Liabilities of the City are reported when it is probable that a loss has occurred and the amount of the loss can be reasonable estimated.
Liabilities include an amount for claims that have been incurred but not reported (IBNR). The result of the process to estimate the
claims liability is not an exact amount as it depends on many complex factors, such as inflation, changes in legal doctrines and
damage awards. Accordingly, claims are reevaluated periodically to consider the effects of economic and social factors. The estimate
of the claims liability also includes amounts for incremental claim adjustment expenses related to specific claims and other claim
adjustment expenses regardless of whether or not they are attributable to specific claims. Estimated recoveries, for example from
salvage or subrogation, are another component of the claims liability estimate.
During the past three fiscal years, none of the protection programs experienced settlements or judgments that exceeded pooled or
insured coverage. There were also no significant reductions in pooled or insured coverage in 2018-19. CJPIA covers workers’
compensation claims up to a pooled limit of $2 million per occurrence and provides excess coverage to statutory limits with a group
purchased commercial insurance policy. The City pays an annual contribution to CJPIA and may share in any member refunds in
the event that pooled funding exceeds the cost of pooled claims and claim-related expenses, or the City may be required to pay
additional contributions based upon CJPIA’s operating results.
Financial statements of CJPIA may be obtained from its administrative office located at 8081 Moody Street, La Palma, California
90623, or by calling (562) 467-8700.
Additional claims and lawsuits have been filed against the City in the normal course of business. It is reasonably possible that the
City may be liable for claims not to exceed $500,000. In the opinion of management, the resolution of these matters will not have a
material adverse effect on the financial condition of the City.
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 from coverage in 2018-
19.
Self-Insurance
The City retains the risk for workers’ compensation losses incurred prior to joining the California Joint Powers Insurance Authority.
Several member agencies of the now dissolved Central Coast Cities Self-Insurance Fund continue to participate in a non-risk sharing
arrangement for claims management and the purchase of excess insurance. The participating agencies share a set of common
guidelines and annually set aside premiums to pay their individual losses within their self-insured retentions. Losses are debited and
investment income is credited to specific member accounts. The City has not incurred any losses in excess of insurance coverage.
Claims liabilities in the governmental funds are generally liquidated by the General Fund.
84
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 45
Note 10: Risk Management (Continued)
The last actuarial study to determine the undiscounted outstanding claims liability was completed for the year ended June 30, 2018.
The liability was estimated based on the actuarial study and considered claims asserted and paid, and the time limitations for filing
claims. There are no estimates for claims incurred but not reported because the time limit for filing claims has elapsed. The estimated
asset at June 30, 2018 is calculated as follows:
Note 11: Operating Lease
The City entered into an operating lease in October 2014 for the use of various office equipment. Total expense for the lease was
$20,982 for the year ended June 30, 2019. At June 30, 2019, the future minimum lease payments were as follows:
Note 12: Commitments and Contingencies
Litigation
The City is presently involved in certain matters of litigation that have arisen in the normal course of conducting City business. City
management believes, based upon consultation with the City Attorney, that these cases, in the aggregate, are adequately covered by
insurance and not expected to result in a material adverse financial impact on the City.
Self-insurance activity as of and for the year ended June 30, 2019
is summarized is as follows:
Interest earnings 26,747$
Claims expense (80,591)
Estimated liability for reported claims and settlement expenses (444,310)
Assets on deposit 1,195,374
Estimated unpaid claims asset 751,064$
Changes in the balances of claim assets during the past two fiscal years
are as follows:
Estimated unpaid claims asset June 30, 2017 824,862$
Claim payments and related expenditures reimbursement (257,114)
Change in estimated claims asset June 30, 2018 117,027
Interest earnings 16,283
Estimated unpaid claims asset June 30, 2018 701,058
Claim payments and related expenditures reimbursement (76,554)
Change in estimated claims asset June 30, 2018 99,813
Interest earnings 26,747
Estimated unpaid claims asset June 30, 2019 751,064$
For the Year Ending June 30,
2020 10,625$
10,625$
85
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 46
Note 12: Commitments and Contingencies (Continued)
Grant Awards
Under the terms of Federal and State grants, audits may be required and certain costs may be questioned as not being appropriate
expenditures under the terms of the grants. Such audits could lead to requests for reimbursement to the grantor agencies. City
management believes disallowances, if any, will be immaterial.
Regional Transit Authority Pension Expense
The City is presently a member agency of the San Luis Obispo Regional Transit Authority (see Note 9), a duly established Joint
Powers Authority (JPA) comprised of all local cities and the County of San Luis Obispo. The City’s contractual contribution to that
entity is approximately 18%. The City was advised that the Regional Transit Authority was working with CalPERS to determine
whether it is required to enroll certain previously unenrolled transit employees in the CalPERS pension system and whether the
entity may be liable for obligations related to the failure to enroll those employees and make contributions on their behalf. On
December 10, 2019 the County Board of Supervisors approved a contract for participation of the JPA in the San Luis Obispo County
Pension Trust and the Employees Retirement Plan. The current amount of potential CalPERS unfunded liability for the JPA may
reach as high as $4 million. It is not anticipated that the City’s annual payment to the JPA will increase to satisfy this unfunded
liability.
Note 13: Construction and Other Significant Commitments
Construction and other significant commitments as of June 30, 2019, including encumbrances outstanding at year-end, are as follows:
Long-term construction contracts are billed and paid on a percentage completion basis by construction phase.
General Fund 4,088,507$
Special Revenue Funds 192,462
Capital Project Funds 1,386,736
Enterprise Funds:
Water 342,297
Sewer 9,726,886
Parking 1,343,542
Transit 448,362
Total 17,528,792$
86
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 47
Note 14: Fund Balance Deficiency
At June 30, 2019, the City had a negative fund balance in the following funds:
Note 15: Subsequent Events
Events subsequent to June 30, 2019 have been evaluated through March 31, 2020, which is the date that the financial statements are
available to be issued. Management identified the below subsequent events that required disclosure.
2020 Water Energy Efficiency Project Loan
On November 19, 2019, the City Council approved an agreement with PG&E for implementation of the Water Energy Efficiency
Project and up to $14,300,000 in debt financing for construction of the project. On January 21, 2020, the City Council accepted a
good faith estimate provided by the California Infrastructure and Economic Development Bank (I Bank) and authorized the payment
in-full of the 2004 State Water Control Board Loan.
Note 16: New Accounting Standards
Accounting Standards Adopted
In November 2016, GASB issued Statement No. 83, Certain Asset Retirement Obligations. Statement No. 83 provides financial
statement users with information about asset retirement obligations that were not addressed in GASB standards by establishing
uniform accounting and financial reporting requirements for these obligations. The provisions of Statement No. 83 are effective for
reporting periods beginning after June 15, 2018. Implementation of this Statement did not have a material impact on the City’s
financial statements.
In April 2018, GASB issued Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct
Placements. Statement No. 88 is meant to improve the information that is disclosed in notes to government financial statements
related to debt, including direct borrowings and direct placements. It also clarifies which liabilities governments should include when
disclosing information related to debt. This Statement requires that additional essential information related to debt be disclosed in
notes to financial statements. The provisions of Statement No. 88 are effective for fiscal years beginning after June 15, 2018. The
City reviewed and updated, as necessary, disclosures relating to long-term debt as part of implementing this standard.
Funds Deficiency
Downtown BID 5,332$
Gas Tax 143,380
Law Enforcement Grants 24,638
Open Space Protection 145,072
Total 318,422$
87
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 48
Note 16: New Accounting Standards (Continued)
New Accounting Standards
In January 2017, GASB issued Statement No. 84, Fiduciary Activities. Statement No. 84 establishes criteria for identifying fiduciary
activities of all state and local governments. Activities meeting the criteria should be reported in a fiduciary fund in the basic financial
statements. This Statement also provides for recognition of a liability to the beneficiaries in a fiduciary fund when an event has
occurred that compels the entity to disburse fiduciary resources. The provisions of Statement No. 84 are effective for fiscal years
beginning after December 15, 2018. Management has not yet determined the impact of this Statement on its financial statements.
In June 2017, GASB issued Statement No. 87, Leases. Statement No. 87 increases the usefulness of entities’ financial statements by
requiring recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized
as inflows of resources or outflows of resources based on the payment provisions of the contract. It establishes a single model for
lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. The provisions
of Statement No. 87 are effective for fiscal years beginning after December 15, 2019. Management has not yet determined the impact
of this Statement on its financial statements.
In June 2018, GASB issued Statement No 89, Accounting for Interest Cost Incurred before the End of a Construction Period.
Statement No. 89 enhances the relevance and comparability of information about capital assets and the cost of borrowing for a
reporting period and simplifies accounting for interest cost incurred before the end of a construction period. The provisions of
Statement No. 89 are effective for fiscal years beginning after December 15, 2019. Management will determine the impact of this
statement on its financial statements with the 2020-21 Comprehensive Annual Financial Report.
In August 2018, GASB issued Statement No 90, Majority Equity Interests. Statement No. 90 improves the consistency and
comparability of reporting a government’s majority equity interest in a legally separate organization and improves the relevance of
financial statement information for certain component units. The provisions of Statement No. 90 are effective for fiscal years
beginning after December 15, 2018 with earlier implementation encouraged. Management has not yet determined the impact of this
Statement on its financial statements.
In May 2019, GASB issued Statement No 91, Conduit Debt Obligations. Statement No. 91 provides a single method of reporting
conduit debt obligations by issuers and eliminates diversity in practice associated with (1) commitments extended by issuers, (2)
arrangements associated with conduit debt obligations, and (3) related note disclosures. This Statement achieves those objectives by
clarifying the existing definition of a conduit debt obligation; establishing that a conduit debt obligation is not a liability of the issuer;
establishing standards for accounting and financial reporting of additional commitments and voluntary commitments extended by
issuers and arrangements associated with conduit debt obligations; and improving required note disclosures. The provisions of
Statement No. 91 are effective for fiscal years beginning after December 15, 2020 with earlier implementation encouraged.
Management has not yet determined the impact of this Statement on its financial statements.
88
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2019
Page 49
Note 17: Prior Period Adjustments
During 2019, a prior period adjustment a was made to properly record the City’s OPEB and pension balances, as well as its
investment in the Whale Rock Commission, a joint venture, due to removal of OPEB and pension balances in the Whale Rock
agency fund. Additionally, an adjustment was made to properly record a deferred loss on refunding for the 2018 Lease Revenue
Refunding Bonds
Govern-
mental
Activities
Business-
type
Activities Water Fund Sewer Fund
Parking
Fund
Net Position as previously
reported at June 30, 2018 121,984,548$ 189,119,344$ 73,134,243$ 80,826,618$ 26,478,176$
Prior Period Adjustments:
Deferred Loss on Refunding 245,234 129,169 7,114 7,862 114,193
Deferred Pension Outflows 353,908 353,908
Net Pension Liability (1,377,969) (1,377,969)
Deferred Pension Inflows (103,916) (103,916)
Deferred OPEB Outflows 11,764 11,764
Net OPEB Liability (127,770) (127,770)
Deferred OPEB Inflows (2,504) (2,504)
Investment in Joint Venture 686,191 686,191
Net Position as restated at
June 30, 2018 122,229,782$ 188,688,217$ 72,581,061$ 80,834,480$ 26,592,369$
Government-wide Statements Fund Statements
89
90
REQUIRED SUPPLEMENTARY INFORMATION
(UNAUDITED)
91
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund
For the Fiscal Year Ended June 30, 2019
Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
REVENUES:
Taxes and franchise fees:
Sales and use tax - general 17,619,608$ 17,619,608$ 18,119,545$ 499,937$
Sales and use tax - Half Percent Sales Tax 7,673,084 7,673,084 8,325,230 652,146
Sales tax - Prop 172 - - - -
Property tax 11,734,945 11,734,945 12,238,357 503,412
Transient occupancy tax 7,367,000 7,755,495 8,061,087 305,592
Utility users tax 5,617,000 5,617,000 4,919,892 (697,108)
Property tax in lieu of VLF 4,846,013 4,846,013 4,961,080 115,067
Franchise taxes 1,526,717 1,526,717 1,428,296 (98,421)
Business tax 2,884,241 2,884,241 2,630,499 (253,742)
Real property transfer tax 388,495 - 273,762 273,762
Total taxes 59,657,103 59,657,103 60,957,748 1,300,645
Use of money and property 446,643 446,643 1,186,670 740,027
Subventions and grants:
Other State and Federal grants 504,682 1,111,906 813,318 (298,588)
Other subventions and grants - - 177,294 177,294
Total subventions and grants 504,682 1,111,906 990,612 (121,294)
92
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2019
Page 2
Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
Charges for services:
Public safety:
Police 624,097 415,005 702,998 287,993
Fire:
Medical emergency recovery - - 407,925 407,925
Fire safety/hazardous materials permits 154,124 294,689 116,858 (177,831)
Other fire revenues 360,000 175,730 10,184 (165,546)
Community development:
Planning and zoning fees 3,701,000 3,701,000 6,376,140 2,675,140
Construction plan and check inspections 1,930,000 2,048,175 26,028 (2,022,147)
Infrastructure plan check and inspections 260,000 260,000 342 (259,658)
Fire plan check and inspections 331,142 332,013 305,294 (26,719)
Culture and recreation:
Adult athletic fees 3,378 325,854 297,768 (28,086)
Youth athletic fees 1,605,887 1,295,789 820,778 (475,011)
Rental and use fees 2,252 - (320) (320)
Aquatics - 4,633 284,034 279,401
Golf course 19,864 15,059 220,390 205,331
General government:
Other service charges 534,905 860,384 1,026,952 166,568
Total charges for services 9,526,649 9,728,331 10,595,371 867,040
Impact Fees 85,000 170,000 362,678 192,678
Other revenues 140,200 218,527 431,716 213,189
Total Revenues 70,360,277 71,332,510 74,524,795 3,192,285
93
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2019
Page 3
Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
Expenditures:
Public Safety:
Police protection:
Administration 1,875,436 1,944,038 1,866,869 77,169
Investigations 2,253,399 2,302,369 2,625,952 (323,583)
Neighborhood services 262,094 274,877 263,697 11,180
Support services 2,603,849 2,602,955 2,577,373 25,582
Patrol services 8,590,188 8,842,240 9,700,945 (858,705)
Traffic safety 879,697 906,361 829,542 76,819
Total police protection 16,464,662 16,872,840 17,864,378 (991,538)
Fire and environmental safety:
Administration 1,088,845 1,027,500 1,001,122 26,378
Emergency response 10,198,291 10,471,973 11,067,375 (595,402)
Fire Apparatus Services 418,144 419,115 378,942 40,173
Hazard protection 922,759 960,175 926,601 33,574
Training 125,650 128,040 118,945 9,095
Disaster preparedness 9,900 28,703 276,820 (248,117)
Total fire and environmental safety 12,763,588 13,035,505 13,769,805 (734,300)
Total public safety 29,228,251 29,908,346 31,634,183 (1,725,837)
Transportation:
Transportation planning and engineering 892,371 908,640 896,897 11,743
Street and sidewalk maintenance 1,441,679 1,398,074 1,207,017 191,057
Traffic signals and street lights 542,158 540,535 537,539 2,996
Creek and flood protection 1,002,905 997,428 854,456 142,972
Total transportation 3,879,113 3,844,676 3,495,909 348,767
94
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2019
Page 4
Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
Culture and Recreation:
Recreation programs:
Recreation administration 759,597 848,116 793,686 54,430
Aquatics/Sinsheimer park facilities 444,002 468,802 458,827 9,975
Children's services 941,455 945,450 973,889 (28,439)
Facilities 251,974 245,031 237,835 7,196
Special events - 10,500 5,883 4,617
Recreational sports 574,863 565,215 542,194 23,021
Golf course 659,248 683,631 621,659 61,972
Ranger services 554,652 558,405 487,919 70,486
Maintenance programs:
Swim center maintenance 442,497 452,025 465,842 (13,817)
Parks and landscape maintenance 2,789,928 2,820,534 2,848,301 (27,767)
Tree maintenance 555,618 755,815 625,617 130,198
Cultural and social service programs: Human relations
Human relations 249,800 251,145 250,345 800
Cultural activities 327,863 327,863 324,585 3,278
Total leisure, cultural and social services 8,551,497 8,932,531 8,636,582 295,949
Community Development:
Planning:
Commissions and communities 55,440 55,062 32,292 22,770
Community development administration 806,371 910,395 919,089 (8,694)
Long-range planning 636,728 700,258 676,830 23,428
Development review 1,670,196 1,666,171 1,919,299 (253,128)
Development services 118,978 119,086 115,859 3,227
Natural resource protection 405,796 397,601 407,673 (10,072)
Construction regulation:
Building and safety 1,720,946 2,075,681 2,095,557 (19,876)
CIP project engineering 1,934,456 2,151,549 2,049,917 101,632
Economic health:
Community promotion 403,702 397,661 373,003 24,658
Economic development 228,241 330,010 290,956 39,054
Total community development 7,980,854 8,803,474 8,880,475 (77,001)
95
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2019
Page 5
Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
General Government:
Legislation:
Council 155,828 174,018 162,709 11,309
General administration:
City administration 955,789 1,504,789 1,311,008 193,781
Public works administration 1,004,002 1,012,731 991,570 21,161
Legal services:
City attorney 813,370 831,700 832,944 (1,244)
City clerk services:
Administration and records 750,911 790,077 668,355 121,722
Organization support services:
Human resource administration 1,202,642 1,270,067 1,307,603 (37,536)
Risk management 4,518,043 4,368,015 4,029,011 339,004
Finance and information technology administrati 2,115,742 2,049,627 1,756,234 293,393
Revenue management 285,683 283,205 299,543 (16,338)
Accounting 1,092,541 1,093,573 1,067,711 25,862
Finance non-departmental 815,938 1,498,938 273,334 1,225,604
Network services 2,366,011 2,326,526 2,284,252 42,274
Support services 282,061 280,421 207,284 73,137
Wellness program 18,600 18,440 14,236 4,204
Building and vehicle maintenance:
Buildings 1,228,974 1,269,081 1,213,928 55,153
Vehicle and equipment maintenance 1,179,293 1,194,905 1,197,321 (2,416)
Total general government before cost reimburs 18,785,429 19,966,115 17,617,043 2,349,072
Cost reimbursement (Note 3 to RSI)(3,850,240) (3,850,240) (3,850,240) -
Total general government 14,935,189 16,115,875 13,766,803 2,349,072
Capital Outlay:
Public safety 299,500 212,562 25,901 186,661
Transportation 671,000 3,458,821 3,368,647 90,174
Culture and recreation 585,000 564,172 490,298 73,874
Community development - 799,683 795,165 4,518
General government 924,723 1,391,331 1,368,994 22,337
Total capital outlay 2,480,223 6,426,569 6,049,005 377,564
Total Expenditures 67,055,126 74,031,470 72,462,957 1,568,513
Excess of Revenues Over Expenditures 3,305,151 (2,698,960) 2,061,838 4,760,798
96
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2019
Page 6
Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
Other Financing Sources (Uses)
Transfers in 4,017,158 4,017,158 3,639,483 (377,675)
Transfers out (6,336,669) (6,336,669) (5,182,219) 1,154,450
Total other financing uses (2,319,511) (2,319,511) (1,542,736) 776,775
Net Change in Fund Balance 985,640 (5,018,471) 519,102 (5,537,573)
Fund Balance, Beginning of the Year 29,576,440 29,576,440 29,576,440
Fund Balance, End of Year 30,562,080$ 24,557,969$ 30,095,542$
97
Fiscal Year 2018-19 2017-18 2016-17 2015-16 2014-15
Measurement Period 2017-18 2016-17 2015-16 2014-15 2013-14
Total pension liability:
Service Cost 4,328,129$ 4,124,832$ 3,580,882$ 3,578,172$ 3,703,087$
Interest on total pension liability 14,778,918 14,197,897 13,688,523 13,193,597 12,756,967
Difference between expected and actual
experience
1,445,049 694,843 (1,160,933) (2,433,791)
Changes in assumptions (1,292,326) 11,219,603 (3,057,724)
Benefit payments, including refunds of
employee contributions
(10,740,816) (10,161,053) (9,476,508) (8,808,668) (8,258,611)
Net change in total pension liability 8,518,954 20,076,122 6,631,964 2,471,586 8,201,443
Total pension liability - beginning 209,751,766 189,675,644 183,043,680 180,572,094 172,370,651
Total pension liability - ending (a)218,270,720$ 209,751,766$ 189,675,644$ 183,043,680$ 180,572,094$
Plan fiduciary net position:
Contributions - employer 6,693,987$ 6,776,849$ 6,122,173$ 5,027,356$ 4,631,254$
Contributions - employee 1,820,697 1,841,331 1,666,606 1,509,834 1,664,654
Net investment income 10,820,033 13,053,453 677,557 2,673,657 17,746,607
Benefit payments (10,740,816) (10,161,053) (9,476,508) (8,808,668) (8,258,611)
Net plan to plan resource movement (316) (2,936)
Administrative expense (200,184) (172,935) (72,044) (133,042)
Other miscellaneous income/(expense)(380,153)
Net change in plan fiduciary net position 8,013,248 11,334,709 (1,082,216) 269,137 15,783,904
Plan fiduciary net position - beginning 128,465,063 117,130,354 118,212,570 117,943,433 102,159,529
Plan fiduciary net position - ending (b)136,478,311$ 128,465,063$ 117,130,354$ 118,212,570$ 117,943,433$
Net pension liability (asset) - ending (a) - (b)81,792,409$ 81,286,703$ 72,545,290$ 64,831,110$ 62,628,661$
Plan fiduciary net position as a percentage of the total pension
liability 62.53%61.25%61.75%64.58%65.32%
Covered payroll 23,794,341 21,841,841 20,499,668 19,769,997 19,235,818
Net pension liability as percentage of covered payrol 343.75% 372.16% 353.89% 327.93% 325.58%
Benefit changes . The figures shown do not include any liability impact that may have resulted from plan changes which occurred after the June 30,
2017 valuation date. This applies to voluntary benefit changes as well as any offers of two years of additional service credit (a.k.a. Golden
Handshakes).
Changes in assumptions . In 2017, the accounting discount rate decreased from 7.65% to 7.15% and has remained at 7.15% in 2018. In 2016, there
were no changes in assumptions. In 2015, amounts reported reflect an adjustment of the discount rate from 7.50% (net of administrative expense)
to 7.65%. In 2014, amounts reported were based on the 7.5% discount rate.
* Fiscal year 2019 was the 5th year of implementation. Therefore, only five years are shown. Information is required only for measurement
periods for which GASB 68 is applicable. The current measurement period is the year ended June 30, 2018.
City of San Luis Obispo, California
Schedule of the Changes in the Net Pension Liability and Related Ratios
June 30, 2019
Last 10 Years *
Miscellaneous Agent Multiple-Employer Plan
98
Fiscal Year 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14
Acuarially determined contribution 7,086,287 6,698,266 6,776,849 6,122,173 5,027,356 4,631,254
Contributions in relation to the actuarially
determined contribution (9,354,287) (6,698,266) (6,776,849) (6,122,173) (5,027,356) (4,631,254)
Contribution deficiency (excess)(2,268,000)$ -$ -$ -$ -$ -$
Covered payroll 22,463,706 23,794,341 21,841,841 20,499,668 19,769,997 19,235,818
Contributions as percentage of covered
payroll 41.64% 28.15% 31.03% 30.97% 25.43% 24.08%
Actuarial Cost Method Entry Age Normal
Amortization Method For details, see June 30, 2016 CalPERS Funding Valuation Report
Amortization Period For details, see June 30, 2016 CalPERS Funding Valuation Report
Asset Valuation Method
Inflation 2.75%
Salary Increases Varies by Entry Age and Service
Payroll Growth 3.00%
Discount Rate 7.375% Net of Pension Plan Investment and Administrative Expenses
Retirement Age CalPERS 1997-2011 experience study
Mortality CalPERS 1997-2011 experience study
Pre-retirement and post-retirement mortality rates include 20 years of projected mortality
improvement using Scale BB published by the Society of Actuaries.
The actuarial methods and assumptions used to set the actuarially determined contributions for fiscal year 2018-19 contributions rates are as
follows:
Last 10 Years *
* Fiscal year 2019 was the 5th year of implementation. Therefore, only six years are shown. Information is required only for measurement periods
for which GASB 68 is applicable. The current measurement period is the year ended June 30, 2018.
City of San Luis Obispo, California
Schedule of the Pension Plan Contributions
Miscellaneous Agent Multiple-Employer Plan
June 30, 2019
Market Value of Assets. For details, see June 30, 2016 CalPERS Funding Valuation Report
99
Fiscal Year 2018-19 2017-18 2016-17 2015-16 2014-15
Measurement Period 2017-18 2016-17 2015-16 2014-15 2013-14
Proportion of the Collective Net Pension Liability 1.2261% 1.1943% 1.2510% 1.3654% 1.3754%
Proportionate Share of the Collective Net Pension
Liability 71,940,533$ 71,364,346$ 64,792,760$ 56,260,280$ 51,592,420$
Covered payroll 11,246,306$ 10,614,437$ 10,643,123$ 10,849,863$ 10,768,119$
Proportionate share of the net pension liability as
percentage of covered payroll 639.68% 672.33% 608.78% 518.53% 479.12%
Plan fiduciary net position as a percentage of the total
pension liability 75.26% 73.31% 74.06% 78.40% 79.82%
*-Fiscal year 2015 was the first year of implementation, therefore only five years are shown.
Benefit changes . The figures shown do not include any liability impact that may have resulted from plan changes which occurred after June 30,
2017 as they have minimal cost impact.
Changes in assumptions . In 2017, the accounting discount rate decreased from 7.65% to 7.15% and has remained at 7.15% in 2018. In 2016, there
were no changes in assumptions. In 2015, amounts reported reflect an adjustment of the discount rate from 7.50% (net of administrative expense)
to 7.65%. In 2014, amounts reported were based on the 7.5% discount rate.
City of San Luis Obispo, California
Schedule of the City's Proportionate Share of the Net Pension Liability
Safety Cost-Sharing Plan
As of June 30, 2019
Last 10 Years *
100
Fiscal Year 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14
Contractually required contribution
(actuarially determined)6,416,780$ 5,910,345$ 5,549,915$ 5,074,217$ 4,350,871$ 4,226,211$
Contribution in relation to the actuarially
determined contributions (8,348,780) (5,910,345) (6,299,915) (5,824,217) (4,650,871) (5,161,211)
Contribution deficiency (excess)(1,932,000)$ -$ (750,000)$ (750,000)$ (300,000)$ (935,000)$
Covered payroll 11,197,562$ 11,246,306$ 10,614,437$ 10,643,123$ 10,849,863$ 10,768,119$
Contributions as a percentage of covered
payroll 74.56% 52.55% 59.35% 54.72% 42.87% 47.93%
The Plan’s proportionate share of aggregate contributions may not match the actual contributions made by the employer during
the measurement period. The Plan’s proportionate share of aggregate contributions is based on the Plan’s proportion of fiduciary
net position as well as any additional side fund (or unfunded liability) contributions made by the employer during the
measurement period.
City of San Luis Obispo, California
Schedule of the City's Pension Contributions
Safety Cost-Sharing Plan
As of June 30, 2019
*- Fiscal year 2015 was the first year of implementation, therefore only six years are shown
Last 10 Years *
101
Fiscal Year 2018-19 2017-18
Measurement Period 2017-18 2016-17
Total pension liability:
Service Cost 463,629$ 450,125$
Interest on total OPEB liability 891,794 856,436
Difference between expected and actual experience
Changes in assumptions
Benefit payments, including refunds of employee contributions (765,000) (827,500)
Net change in total OPEB liability 590,423 479,061
Total OPEB liability - beginning 13,130,633 12,651,572
Total OPEB liability - ending (a)13,721,056$ 13,130,633$
Plan fiduciary net position:
Contributions - employer 1,221,000$ 1,493,996$
Net investment income 439,828 469,883
Benefit payments (765,000) (827,500)
Administrative expense (10,170) (2,387)
Net change in plan fiduciary net position 885,658 1,133,992
Plan fiduciary net position - beginning 5,479,720 4,345,728
Plan fiduciary net position - ending (b)6,365,378$ 5,479,720$
Plan net OPEB liability - ending (a) - (b)7,355,678$ 7,650,913$
Plan fiduciary net position as a percentage of the total OPEB liability 46.39%41.73%
Covered payroll 33,790,437$ 33,722,592$
Plan net OPEB liability as percentage of covered payroll 21.77%22.69%
Changes in assumptions . There were no changes in assumptions.
* Fiscal year 2018 was the first year of implementation. Information is required only for measurement periods for
which GASB 75 is applicable.
Benefit changes . The figures shown do not include any liability impact that may have resulted from plan changes which
occurred after the June 30, 2018 measurement date.
Prepared for the City of San Luis Obispo OPEB Plan
an Agent Multiple-Employer Defined Benefit OPEB Plan
As of June 30, 2019
Last 10 Years *
Schedule of Changes in the Net OPEB Liability and Related Ratios
102
Fiscal Year 2018-9 2017-18
Contractually determined contribution (actuarially determined)1,154,000$ 1,221,000$
Contributions in relation to the actuarially determined contributions (677,824) (1,221,000)
Contribution deficiency (excess)476,176$ -$
Covered payroll 33,429,600$ 33,790,437$
Contributions as a percentage of covered payroll 3.45%3.61%
Contributions paid as of June 30, 2019 are deferred to June 30, 2020.
Valuation date June 30, 2017
Actuarial Cost Method Entry Age Normal, Level % of pay
Amortization Method Level % of pay
Amortization Period Average 15.7 years remaining fixed period for 2018/19
Asset Valuation Method Investment gains and losses spread over 5-year rolling period
Discount Rate 6.75%
General Inflation 2.75%
Medical Trend
Mortality CalPERS 1997-2015 experience study
Mortality Improvement
The actuarial methods and assumptions used to set the actuarially determined contributions for fiscal year 2018-19 are
as follows:
Non-Medicare - 7.5% for 2019, decreasing to an ultimate rate of 4.0% in 2076
Medicare - 6.5% for 2019, decreasing to an ultimate rate of 4.0% in 2076
Post-retirement mortality projected fully generational with Scale MP-2017
* Fiscal year 2018 was the first year of implementation. Information is required only for measurement periods for
which GASB 75 is applicable.
Prepared for the City of San Luis Obispo Miscellaneous Plan
an Agent Multiple-Employer Defined Benefit OPEB Plan
As of June 30, 2019
Last 10 Years *
Schedule of Employer OPEB Contributions
103
City of San Luis Obispo, California
Notes to Required Supplementary Information
June 30, 2019
Budgetary Comparison Schedule
1. The budget is prepared using the modified accrual basis of accounting consistent with U.S. generally accepted accounting
principles.
2. Outstanding encumbrances from the prior fiscal year are not reflected in the original budget column but are included in the
final budget amounts.
3. All the City’s general government and engineering programs are initially accounted and budgeted for in the General Fund.
However, certain of these support service programs also benefit the City’s enterprise and agency fund operations, and
accordingly, transfers are made from these funds to reimburse the General Fund for these services. The transfers are based
on a Cost Allocation Plan prepared for this purpose which distributes the shared costs in a uniform, consistent manner in
accordance with U.S. generally accepted accounting principles.
Excess of Expenditures Over Appropriations
1. At June 30, 2019 expenditures exceeded appropriations in the General Fund as noted below.
Department/Division Budget Variance
Police Protection:
Investigations 323,583
Patrol services 858,705
Fire and environmental safety:
Emergency response 595,402
Disaster preparedness 248,117
Recreation programs:
Children's services 28,439
Maintenance programs:
Swim center maintenance 13,817
Parks and landscape maintenance 27,767
Planning:
Community development administration 8,694
Development review 253,128
Natural resource protection 10,072
Construction regulation:
Building and safety 19,876
Legal services:
City attorney 1,244
Organization support services:
Human resource administration 37,536
Revenue management 16,338
Building and vehicle maintenance:
Vehicle and equipment maintenance 2,416
104
OTHER SUPPLEMENTARY INFORMATION
AND COMBINING AND INDIVIDUAL FUND
STATEMENTS AND SCHEDULES
105
106
Revenues:
Sales and use tax - Measure G 1/2 cent add-on tax 8,325,230$
Use of money and property 102,933
Total revenues 8,428,163
Expenditures:
Operating Programs:2,116,796
Total Operating Programs 2,116,796
Capital Programs:
Open Space Preservation 634,918
Bicycles and Pedestrian Improvements 468,517
Traffic Congestin/Relief/Safety Improvements 65,320
Public Safety 357,891
Nieghborhood Street Paving 3,043,303
Flood Protection 597,634
Parks & Recreation 679,604
Other Vial Services and Capital Projects 201,817
Total Capital Expenditures 6,049,004
Net change in fund balance 262,363
Fund balance, beginning of year 6,067,359
Fund balance, end of year 6,329,722$
* The Half Percent Local Sales Tax Measure is a sub-fund of the General Fund. All activity is reflected in the General Fund and
is reported here for informational purposes only.
City of San Luis Obispo
Half Percent Sales Tax Measure Funding Schedule
For the Fiscal Year Ended June 30, 2019
107
Page 2
Revenues Budget Actual
$0.005 Sales Tax 7,373,084$ 8,325,230$
Investment Income 102,933
7,373,084$ 8,428,163$
Expenditures
Operating Programs:
Open Space Wildfire Fuel Reduction 5,000$ 4,999$
Ranger Services (FTE = 2) 147,068 147,068
Transportation Planning and Engineering (FTE = 1.6) 201,675 186,543
Signal and Light Maintenance (FTE = 1) 112,138 110,398
PulsePoint CPR Software 8,000 8,000
Patrol Services (FTE = 4) 928,077 562,311
CIP Project Engineering (FTE = 1) 115,325 115,325
Streets and Sidewalk Maintenance (FTE = 1) 101,869 75,728
Building and Safety (FTE = 3) 269,025 269,025
Creek and Flood Protection (FTE = 6) 652,195 597,222
Parks and Landscape Maintenance (FTE = 1) 84,563 40,177
2,624,935$ 2,116,796$
Capital Programs:Budget Actual Encumbrances Carryover
Open Space Preservation
Open Space Acquisition 551,064$ 509,886$ 2,280$ 38,899$
Open Space Maintenance 131,341 91,392 8,263 31,685
Laguna Lake Dredging 38,102 33,640 4,238 224
720,507 634,918 14,781 70,808
Bicycles and Pedestrian Improvements
Sidewalk Replacement 135,943 44,550 7,006 84,387
Bob Jones Octagon Barn Connection 227,285 184,754 42,531
Bob Jones Trail: Prefumo Creek to Oceanaire 216,000 216,000
Railroad District Boardwalk Replacement 5,000 1,165 49 3,786
Railroad Safety Trail: Pepper Street to the Train Station 30,000 27,852 2,148
Railroad Safety Trail - Bike Bridge at Phillips Lane 230,840 41,826 35,567 153,447
Bicycle Transportation Plan Implementation 91,826 90,763 1,063
Sidewalk Access Improvements 52,604 52,604
Bicycle Facility Improvements 75,000 592 74,408
Safe Routes to School 104,263 58,809 45,453
Pedestrian and Bicycle Pathway Maintenance 151,316 14,006 26 137,283
Downtown Renewal 6,000 4,200 840 960
1,326,077 468,517 43,488 814,070
Traffic Congestion Relief/ Safety Improvements
Traffic Signs and Striping Maintenance 47,930 21,962 25,968
Traffic Safety Report Implementation 111,564 10,880 108 100,576
Transportation Safety & Operations 9,196 530 3,470 5,196
Neighborhood Traffic Improvements 148,819 23,615 125,204
Parking Structure Assessment 8,333 8,333
325,842 65,320 3,578 256,944
Public Safety
Police Dispatch Technology Maintenance 40,826 2,000 4,595 34,231
Police Station Replacement Study 145,685 27,755 10,470 107,459
Police Patrol Vehicle Replacements (4) 265,558 366 235,112 30,080
City of San Luis Obispo
Half Percent Sales Tax Measure Funding Schedule, continued
For the Fiscal Year Ended June 30, 2019
108
Page 3
Public Safety (cont.) Budget Actual Encumbrances Carryover
Fire Vehicle Replacment (Fire Training Pickup, Ambulance Van) 14,867 14,366 500
Police Station Building Maintenance and Improvements 13,750 8,750 5,000
Fire Stations Building Maintenance 154,250 77,781 7,881 68,588
Police Handheld and Vehicle Radio Replacement 280,000 280,000
South Hills Radio Upgrade 238,455 75,342 50,916 112,196
Emergency Dispatch Center Maintenance 256,033 5,409 1,850 248,774
New Street Lights 110,000 48,009 17,941 44,050
Laurel Lane Streetlight 100,000 91,007 8,994
Fire Station 4 Backup Generator 100,877 7,106 93,771
1,720,301 357,891 328,765 1,033,643
Neighborhood Street Paving
Street Reconstruction and Resurfacing (Laurel Lane and Southwood) 2,466,861 2,464,872 1,989
Concrete Streets Repair (Dana, Toro & Palm, Palm & Johnson) 436,661 435,360 1,301
Marsh Street Bridget Replacement 725,089 725,089
Streets Maintenance Loader with Skip & Drag Attachment 330,287 130,022 200,265
Corp Yard Fuel Island Siding 14,750 13,049 1,451 250
3,973,648 3,043,303 1,451 928,894
Flood Protection
Storm Drain System Replacement 431,211 392,839 3,686 34,685
Ellen Way Storm Drain Improvements 2017 241,500 202,408 39,092
Broad and Leff Culvert Repair 10,000 2,387 7,613
682,711 597,634 3,686 81,390
Parks & Recreation/Senior Programs and Facilities
Parks Major Maintenance & Repairs 565,416 134,500 75 430,842
Ludwick Center Gym Lights 15,500 15,610 (110)
Swim Center Building Maintenance and Equipment Replacement 79,981 11,006 400 68,575
Jack House Building Maintenance 74,000 2,250 71,750
Islay Hill Park Playground Equipment Replacement 80,000 46,139 4,964 28,897
Sinsheimer Irrigation & Drainage 120,000 120,000
Sinsheimer Stadium Backstop 2017 165,886 165,886
City/County Library Major Maintenance 177,076 145,839 31,237
Parks and Recreation Building Maintenance 47,279 15,635 2,529 29,116
Swim Center Co-generation Plant 85,000 85,000
Parks Maintenance Equipment Replacement 30,000 14,060 15,940
Parks Maintennace Walk Behind Mower & Aerator 41,839 41,839
Parks Maintenance Utility Carts With Dump Beds (2) 56,000 55,885 115
Mission Plaza Restroom Replacements and Enhancements 105,000 30,955 12,724 61,321
1,642,977 679,604 20,692 942,683
Other Vital Services and Capital Projects
Facilities Annual Asset Maintenance Account 58,168 58,168
City Hall Chiller Replacement 224,924 201,817 12,648 10,459
Multisite Energy Management 32,600 32,600
Undesignated Capital 114,927 114,927
430,619 201,817 12,648 216,154
Total Capital Expenditures 10,822,682$ 6,049,004$ 429,089$ 4,344,586$
Net Change in Fund Balance (6,074,533)$ 262,363$
Fund balance, beginning of year 6,067,359 6,067,359
Fund balance, end of year (7,174)$ 6,329,722$
For the Fiscal Year Ended June 30, 2019
City of San Luis Obispo
Half Percent Sales Tax Measure Funding Schedule, continued
109
City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2019
The City maintains the following nonmajor governmental funds:
Special Revenue Funds
The City has established the following ten special revenue funds in order to account for the proceeds from revenue sources
that are restricted or committed to expenditures for specified purposes. Budgets are prepared using the modified accrual
basis of accounting consistent with U.S. generally accepted accounting principles.
Downtown Business Improvement District (BID) Fund. This fund has been established to account for the receipt of a
surcharge derived from a supplemental assessment upon businesses within the Downtown Business Improvement
District’s boundaries. Pursuant to the provisions of the Municipal Code, this surcharge is equal to $150.00 per year.
Expenditures from the fund are limited to four basic purposes: decorating public places within the downtown; promoting
public events in the downtown core; promoting trade activities; and improving parking in the downtown core.
Transportation Development Act (TDA) Fund. The State of California has designated 1/4% of the sales tax levied
statewide for local transportation purposes. Funding for this program was provided during the 1971 legislative session
with the enactment of the Transportation Development Act, which extended the State sales tax to include purchases of
gasoline. Revenues allocated to the City of San Luis Obispo under this program are divided into two categories: Article
3 funds, which are restricted for the improvement and maintenance of street systems including pedestrian and bicycle
facilities; and Article 4 funds, which are restricted for public transit systems and are recorded directly in the Transit Fund.
Under the City's Financial Plan policies, all TDA Article 3 revenues are allocated for alternative transportation purposes.
The purpose of this fund is to account for these revenues.
Tourism Business Improvement District (BID) Fund. This fund has been established to account for the receipt of a
surcharge derived from assessments upon the lodging establishments within the City. The surcharge is equal to 2% of
gross room rents. Expenditures from the fund are limited to the marketing and promotion of tourism.
Gas Tax Fund. Portions of the tax rate per gallon levied by the State of California on all gasoline purchases are allocated
to cities throughout the State on a population basis. These funds are restricted for expenditures by the State of California
for street-related purposes only. Under the City's Financial Plan policies, all gas tax revenues are transferred to the General
Fund for street maintenance purposes.
Community Development Block Grant (CDBG) Fund. This fund has been established to account for federal funds
received by the City specifically to benefit low and moderate income persons, aid in the elimination of blight, and meet
other community development needs as allowed by block grant regulations.
Law Enforcement Grants Fund. This fund has been established to account for public safety grant funds.
Public Arts Contribution Fund. Public contributions to the public art program are accounted for in this fund along with
the expenditures for public art projects funded by this revenue source.
110
City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2018
Page 2
Insurance Fund. This fund was established to accumulate resources needed to pay for certain insurance and employee
benefit program costs. Financing is primarily provided through operating transfers from the General Fund.
SB1 Road Repair Fund. This fund has been established to account for stable and ongoing funding for maintenance and
improvements to transportation infrastructure as provided through Senate Bill 1 (2017), the Road Repair and
Accountability Act.
SB1186 ASP Certify Fund. This fund has been established as Senate Bill 1186 (2012) requires local agencies to collect
an additional fee when issuing a permit for the purpose of increasing certified access specialist (CASp) services and
compliance with construction-related accessibility requirements. The first priority is to spend the funds on the training
and retention of CASps in order to meet the needs of the public in the jurisdiction. The funds may also be spent on
activities or programs that facilitate accessibility compliance.
Capital Projects Funds
The following eleven capital project funds are used by the City to account for the financial resources used in the
construction or acquisition of major capital facilities or equipment (with the exception of those financed primarily through
proprietary funds). Budgets are prepared using the modified accrual basis of accounting consistent with U.S. generally
accepted accounting principles on a multi-year project basis. Accordingly, budgetary comparisons for the capital projects
funds are not presented in the accompanying other supplementary information.
Capital Outlay Fund. This fund was established to account for all of the City’s construction projects and capital purchases
in excess of $25,000 with the exception of those funded through non-major capital project funds and Enterprise Funds.
Financing is provided primarily through transfers in from the General Fund, and from State and Federal Grants.
Parkland Development Fund. This fund was established to account for construction projects related to park acquisition
and development that will be financed primarily with park in-lieu fees.
Open Space Protection Fund. This fund was established to account for projects funded as part of the City’s open space
protection program to enhance open space and agricultural conservation on lands within and surrounding the City,
improve passive recreational and nature study opportunities, and restore and enhance wildlife habitat. Projects in this
fund will be financed with General Fund contributions, outside contributions, and State and Federal grants.
Airport Area Impact Fee Fund. This fund was established to account for interim annexation fees collected for the specific
plan and related infrastructure master plans for annexing the airport area to the City.
Los Osos Valley Road (LOVR) Sub-Area Fee Fund. This fund was established to account for sub-area impact fees
collected from development activity in the Los Osos Valley Road sub-area boundary.
111
City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2018
Page 3
Waste Water Impact Fee Fund. This fund was established to account for the collection of development impact fees
collected from the Tank Farm Road, Irish Hills, and Silver City sub-areas.
Fleet Replacement Fund. This fund was established to account for the financing and replacement of vehicles for all
General Fund programs of the City. Financing is primarily provided through operating transfers from the General Fund
as well as from interest earnings and sales of surplus property.
Information Technology Replacement Fund. This fund was established in FY 12-13 to account for the financing and
replacement of information technology for all General Fund programs of the City. Financing is primarily provided
through operating transfers from the General Fund as well as from interest earnings.
Affordable Housing Program. This fund accumulates revenues from inclusionary housing fees for capital projects related
to affordable housing programs and projects.
Transportation Impact Fee Fund. This fund was established to account for construction projects that will be financed
primarily with transportation impact fees.
Infrastructure Fund. This fund was established to provide financing to infrastructure projects that have a wide
community benefit. Financing is primarily provided through operating transfers from the General Fund.
Public Safety Development Impact Fee Fund. This fund was established to account for construction projects that will
be financed primarily with public safety development impact fees.
Debt Service Fund
The City has established one debt service fund to account for the payment and accumulation of resources related to
governmental activities long-term debt principal and interest for the following debt issues. Budgets are prepared using
the modified accrual basis of accounting consistent with U.S. generally accepted accounting principles. The following
governmental activity debt issuances are serviced by this fund.
2010 Fire Engine/Truck Lease-Purchase Financing. Lease-purchase financing was obtained in order to purchase a fire
apparatus with 100-foot ladder. Debt service obligations are recorded in the Debt Service Fund.
Capital Improvement Board 2012 Refunding Lease Revenue Bonds. On May 24, 2012 the Board issued $5,050,000 of
2012 Lease Revenue Refunding Bonds. These bonds were issued to refinance the outstanding 2001 Lease Revenue
Bonds, Series C, which will be redeemed on December 1, 2029. The 2001 bonds were used to purchase property and
build athletic fields; purchase property for police station expansion; purchase Downtown Plan properties.
The Board has entered into a lease agreement with the City under which the City is responsible for making lease payments
to fund the annual debt service requirements.
112
City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2018
Page 4
2013 Fire Engine/Truck Lease-Purchase Financing. Lease-purchase financing was obtained in order to purchase an
engine. Debt service obligations are recorded in the Debt Service Fund.
Capital Improvement Board 2014 Lease Revenue Bonds. In 2014 the Board issued $7,580,000 of 2014 Lease Revenue
Bonds. These bonds were issued to finance the expansion of the Los Osos Valley Road interchange at U.S. 101. Debt
service related to the interchange is recorded in the Debt Service Fund.
The Board has entered into a lease agreement with the City under which the City is responsible for making lease payments
to fund the annual debt service requirements.
2016 Mobile Data Computers Lease. Lease-purchase financing was obtained in order to purchase mobile data computers,
hardware to install the computers in City vehicles, installation costs, and wireless network components. Debt service
obligations are recorded in the Debt Service Fund.
2017 Fire Engine and Street Sweeper. Lease-purchase financing was obtained in order to purchase a fire truck and street
sweeper. Debt service obligations are recorded in the Debt Service Fund.
2018 Street Sweeper. Lease-purchase financing was obtained in order to purchase a street sweeper. Debt service
obligations are recorded in the Debt Service Fund.
Capital Improvement Board 2018 Lease Revenue Bonds. In 2018 the Board issued $11,072,775 of 2018 Lease Revenue
Refunding Bonds. These bonds were issued to refinance the outstanding 2005 Revenue Bonds, 2006 Lease Revenue
Bonds, and 2009 Lease Revenue Bonds. The original bonds were used to accomplish several high priority capital
improvement projects including the headquarters fire station, seismic safety and HVAC improvements to City Hall,
Mission Plaza expansion, and various properties and street lighting system purchases. Further, the bonds were used to
purchase a parking structure and office building and to the finance the construction of the Public Safety Communications
and Emergency Operations Center project.
The Board has entered into a lease agreement with the City under which the City is responsible for making lease payments
to fund the annual debt service requirements.
113
Downtown BID
Transportation
Development Act
(TDA) Tourism BID Gas Tax
Assets
Cash and investment -$ -$ 444,003$ -$
Accounts receivable - - 211,571 -
Accrued interest receivable - - 2,344 -
Prepaid expense - - - -
Cash held by fiscal agent - - - -
Total assets -$ -$ 657,918$ -$
Liabilities and Fund Balance
Liabilities:
Accounts payable -$ -$ 193,830$ -$
Accrued liabilities - - 8,065 -
Due to other funds 5,332 - - 143,380
Unearned revenue - - - -
Other liabilities - - - -
Total liabilities 5,332 - 201,895 143,380
Fund balance:
Nonspendable - - - -
Restricted for:
Debt service - - - -
Transportation projects - - - -
Affordable housing programs - - - -
Impact fee programs - - - -
Parkland development programs - - - -
Public art programs - - - -
Tourism programs - - 456,023 -
Assigned to:
Contingency fund - - - -
Subsequent years expenditures - - - -
Unassigned (5,332) - - (143,380)
Total fund balance (5,332) - 456,023 (143,380)
Total liabilities and fund balance -$ -$ 657,918$ -$
City of San Luis Obispo, California
Combining Balance Sheets
Nonmajor Governmental Funds
June 30, 2019
Special Revenue Funds
114
Community
Development Block
Grant (CDBG)
Law Enforcement
Grants
Public Art
Contributions Insurance
SB1 Road
Repair
SB1186 CASP
Certify
146,724$ -$ 622,361$ 1,833,278$ 451,631$ 30,310$
- - - - - -
- - 2,973 1,521 531 120
- - - - - -
- - - - - -
146,724$ -$ 625,334$ 1,834,799$ 452,162$ 30,430$
38,149$ -$ 4,400$ -$ 42,688$ -$
- 1,945 - - - -
- 22,693 - - - -
- - - - - -
- - - - - -
38,149 24,638 4,400 - 42,688 -
- - - - - -
- - - - - -
- - - - 409,474 30,430
108,575 - - - - -
- - - - - -
- - - - - -
- - 620,934 - - -
- - - - - -
- - - - - -
- - - 1,834,799 - -
- (24,638) - - - -
108,575 (24,638) 620,934 1,834,799 409,474 30,430
146,724$ -$ 625,334$ 1,834,799$ 452,162$ 30,430$
Special Revenue Funds
115
City of San Luis Obispo, California
Combining Balance Sheets
Nonmajor Governmental Funds, continued
June 30, 2019
Capital Outlay
Parkland
Development
Open Space
Protection
Assets
Cash and investment 1,470,988$ 4,094,757$ -$
Accounts receivable 339,070 - -
Accrued interest receivable 8,892 19,602 646
Prepaid expense - - -
Cash held by fiscal agent - - -
Total assets 1,818,950$ 4,114,359$ 646$
Liabilities and Fund Balance
Liabilities:
Accounts payable 111,206$ 585,697$ 5,540$
Accrued liabilities - - -
Due to other funds - - 140,178
Unearned revenue 114,967 - -
Other liabilities - - -
Total liabilities 226,173 585,697 145,718
Fund balance:
Unspendable - - -
Restricted for:
Debt service - - -
Transportation projects - - -
Affordable housing programs - - -
Impact fee programs - - -
Parkland development programs - 3,528,662 -
Public art programs - - -
Tourism programs - - -
Assigned to:
Contingency fund - - -
Subsequent years expenditures 1,592,777 - -
Unassigned - - (145,072)
Total fund balance 1,592,777 3,528,662 (145,072)
Total liabilities and fund balance 1,818,950$ 4,114,359$ 646$
Capital Projects Funds
116
Airport Area
Impact Fee
LOVR Sub-Area
Fee
Waste Water
Impact Fee Fleet Replacement
Info Tech
Replacement
1,147,938$ 888,706$ 737,908$ 587,498$ 2,145,593$
- - - - -
5,564 4,244 3,369 6,163 5,570
- - - - -
- - - - -
1,153,502$ 892,950$ 741,277$ 593,661$ 2,151,163$
-$ -$ -$ -$ 210,534$
- - - - -
- - - - -
- - - - -
- 179,906 - - -
- 179,906 - - 210,534
- - - - -
- - - - -
- - - - -
- - - - -
1,153,502 713,044 - - -
- - - - -
- - - - -
- - - - -
- - - 500,000 400,000
- - 741,277 93,661 1,540,629
- - - - -
1,153,502 713,044 741,277 593,661 1,940,629
1,153,502$ 892,950$ 741,277$ 593,661$ 2,151,163$
Capital Projects Funds
117
City of San Luis Obispo, California
Combining Balance Sheets
Nonmajor Governmental Funds, continued
June 30, 2019
Affordable
Housing
Transportation
Impact Fee Infrastructure
Public Safety
Development
Impact Fee
Assets
Cash and investment 2,819,484$ 7,840,242$ 577,563$ 4,110$
Accounts receivable - - - -
Accrued interest receivable 16,490 38,865 1,588 -
Prepaid expense - - - -
Cash held by fiscal agent - - - -
Total assets 2,835,974$ 7,879,107$ 579,151$ 4,110$
Liabilities and Fund Balance
Liabilities:
Accounts payable -$ 167,524$ -$ -$
Accrued liabilities - - - -
Due to other funds - - - -
Unearned revenue - - - -
Other liabilities - - - -
Total liabilities - 167,524 - -
Fund balance:
Unspendable - - - -
Restricted for:
Debt service - - - -
Transportation projects - 7,711,583 - -
Affordable housing programs 2,835,974 - - -
Impact fee programs - - - 4,110
Parkland development programs - - - -
Public art programs - - - -
Tourism programs - - - -
Assigned to:
Contingency fund - - - -
Subsequent years expenditures - - 579,151 -
Unassigned - - - -
Total fund balance 2,835,974 7,711,583 579,151 4,110
Total liabilities and fund balance 2,835,974$ 7,879,107$ 579,151$ 4,110$
Capital Projects Funds
118
Debt Service
Total Nonmajor
Governmental
Funds
1,413,822$ 27,256,916$
- 550,641
- 118,482
292,641 292,641
421,666 421,666
2,128,129$ 28,640,346$
44,462$ 1,404,030$
- 10,010
- 311,583
- 114,967
- 179,906
44,462 2,020,496
292,641 292,641
1,791,026 1,791,026
- 8,151,487
- 2,944,549
- 1,870,656
- 3,528,662
- 620,934
- 456,023
- 900,000
- 6,382,294
- (318,422)
2,083,667 26,619,850
2,128,129$ 28,640,346$
119
Downtown BID
Transportation
Development Act (TDA) Tourism BID Gas Tax
Revenues:
Use of money and property -$ -$ 17,615$ -$
Subventions and grants - 47,234 - 937,033
Charges for services 276,769 - 1,598,067 -
Other revenues - - - -
Total revenues 276,769 47,234 1,615,682 937,033
Expenditures:
Current:
General Government - - - -
Public safety - - - -
Community development 204,772 - 1,545,600 -
Debt service:
Principal - - - -
Interest and fiscal charges - - - -
Capital:
General Government - - - -
Public safety - - - -
Transportation - - - -
Leisure, cultural and social services - - - -
Community development - - - -
Total expenditures 204,772 - 1,545,600 -
Excess (deficiency) of revenues over
(under) expenditures 71,997 47,234 70,082 937,033
Other financing sources (uses):
Transfers in - - - -
Transfers out - (47,234) (31,355) (1,080,413)
Capital lease financing - - - -
Total other financing
sources (uses)- (47,234) (31,355) (1,080,413)
Net change in fund balance 71,997 - 38,727 (143,380)
Fund balance, beginning of year (77,329) - 417,296 -
Fund balance (deficit),
end of year (5,332)$ -$ 456,023$ (143,380)$
Special Revenue Funds
City of San Luis Obispo, California
Combining Statement of Revenues, Expenditures, and
Changes in Fund Balances
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2019
120
Community
Development Block
Grant (CDBG)
Law Enforcement
Grants
Public Art
Contributions Insurance
SB1 Road
Repair
SB1186 ASP
Certify
-$ -$ 20,333$ 55,248$ 6,812$ 2,416$
19,287 51,497 - - 722,436 -
- 829 150,596 - - 27,301
- - - - - -
19,287 52,326 170,929 55,248 729,248 29,717
- - - - - -
- 80,037 - - - -
46,487 - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - 567,808 -
- - 69,880 - - -
- - - - 39,553 -
46,487 80,037 69,880 - 607,361 -
(27,200) (27,711) 101,049 55,248 121,887 29,717
- - - - - -
- - - - - -
- - - - - -
- - - - - -
(27,200) (27,711) 101,049 55,248 121,887 29,717
135,775 3,073 519,885 1,779,551 287,587 713
108,575$ (24,638)$ 620,934$ 1,834,799$ 409,474$ 30,430$
Special Revenue Funds
121
City of San Luis Obispo, California
Combining Statement of Revenues, Expenditures, and
Changes in Fund Balances
Nonmajor Governmental Funds, continued
For the Fiscal Year Ended June 30, 2019
Capital Outlay
Parkland
Development
Open Space
Protection
Revenues:
Use of money and property 18,576$ 119,458$ 9,905$
Subventions and grants 342,590 - -
Charges for services - 1,080,178 -
Other revenues - - 89,559
Total revenues 361,166 1,199,636 99,464
Expenditures:
Current:
General Government 2,975 - -
Public safety - - -
Community development - - -
Debt service:
Principal - - -
Interest and fiscal charges - - -
Capital:
General Government 148,758 13,966 839,792
Public safety - - -
Transportation 1,245,202 - -
Leisure, cultural and social services 16,654 20,355 -
Community development 23,429 - -
Total expenditures 1,437,018 34,321 839,792
Excess (deficiency) of revenues over
(under) expenditures (1,075,852) 1,165,315 (740,328)
Other financing sources (uses):
Transfers in 938,800 - -
Transfers out - - -
Capital lease financing - - -
Total other financing
sources (uses) 938,800 - -
Net change in fund balance (137,052) 1,165,315 (740,328)
Fund balance, beginning of year 1,729,829 2,363,347 595,256
Fund balance (deficit),
end of year 1,592,777$ 3,528,662$ (145,072)$
Capital Projects Funds
122
Airport Area
Impact Fee
LOVR Sub-Area
Fee
Waste Water
Impact Fleet Replacement
Info Tech
Replacement
39,168$ 29,509$ 21,609$ 25,123$ 49,872$
- - - - -
2,097 586,015 438,403 58,679 125,281
- - - - -
41,265 615,524 460,012 83,802 175,153
- - - - -
- - - - -
- - - - -
- - - - -
- - - - -
- - - 251,421 2,073,047
- - - 681,017 -
8,992 - - 9 -
- - - - -
- - - - -
8,992 - - 932,447 2,073,047
32,273 615,524 460,012 (848,645) (1,897,894)
- - - - 1,066,436
- - - - -
- - - 673,095 -
- - - 673,095 1,066,436
32,273 615,524 460,012 (175,550) (831,458)
1,121,229 97,520 281,265 769,211 2,772,087
1,153,502$ 713,044$ 741,277$ 593,661$ 1,940,629$
Capital Projects Funds
123
City of San Luis Obispo, California
Combining Statement of Revenues, Expenditures, and
Changes in Fund Balances
Nonmajor Governmental Funds, continued
For the Fiscal Year Ended June 30, 2019
Affordable
Housing
Transportation
Impact Fee Infrastructure
Public Safety
Development
Impact Fee
Revenues:
Use of money and property 112,574$ 261,924$ 11,181$ -$
Subventions and grants - - - -
Charges for services 1,193,099 2,034,421 - 4,110
Other revenues 12,501 41,964 - -
Total revenues 1,318,174 2,338,309 11,181 4,110
Expenditures:
Current:
General Government - - - -
Public safety - - - -
Community development - - - -
Debt service:
Principal - - - -
Interest and fiscal charges - - - -
Capital:
General Government - - - -
Public safety - - - -
Transportation - 1,250,571 - -
Leisure, cultural and social services - - - -
Community development 710,000 - - -
Total expenditures 710,000 1,250,571 - -
Excess (deficiency) of revenues over
(under) expenditures 608,174 1,087,738 11,181 4,110
Other financing sources (uses):
Transfers in - - 250,000 -
Transfers out (17,000) (250,000) - -
Capital lease financing - - - -
Total other financing
sources (uses)(17,000) (250,000) 250,000 -
Net change in fund balance 591,174 837,738 261,181 4,110
Fund balance, beginning of year 2,244,800 6,873,845 317,970 -
Fund balance (deficit),
end of year 2,835,974$ 7,711,583$ 579,151$ 4,110$
Capital Projects Funds
124
Debt Service
Total Nonmajor
Governmental
Funds
8,389$ 809,712$
- 2,120,077
- 7,575,845
15,054 159,078
23,443 10,664,712
- 2,975
- 80,037
- 1,796,859
1,974,050 1,974,050
809,977 809,977
- 3,326,984
- 681,017
- 3,072,582
- 106,889
- 772,982
2,784,027 12,624,352
(2,760,584) (1,959,640)
3,185,500 5,440,736
- (1,426,002)
- 673,095
3,185,500 4,687,829
424,916 2,728,189
1,658,751 23,891,661
2,083,667$ 26,619,850$
125
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Charges for services
Assessments 227,000$ 227,000$ 276,769$ 49,769$
Total Revenues 227,000 227,000 276,769 49,769
Expenditures:
Current
Community development 227,000 227,000 204,772 22,228
Total Expenditures 227,000 227,000 204,772 22,228
Excess of Revenues Over Expenditures - - 71,997 71,997
Net Change in Fund Balance - - 71,997 71,997
Fund Balance, Beginning of Year (77,329) (77,329) (77,329) -
Fund Balance, End of Year (77,329)$ (77,329)$ (5,332)$ 71,997$
Downtown Business Improvement District Fund
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2019
Budget
126
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2019
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Subventions and grants 45,000$ 90,000$ 47,234$ (42,766)$
Total Revenues 45,000 90,000 47,234 (42,766)
Excess of Revenues Over Expenditures 45,000 90,000 47,234 (42,766)
Other Financing Uses:
Operating transfers out (45,000)$ (45,000)$ (47,234) (2,234)
Net Change in Fund Balance - 45,000 - (45,000)
Fund Balance, Beginning of Year - - - -
Fund Balance, End of Year -$ 45,000$ -$ (45,000)$
Transportation Development Act (TDA)
Budget
127
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2019
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property 1,400$ 1,400$ 17,615$ 16,215$
Assessments 1,473,000 1,473,000 1,598,067 125,067
Other revenues - - - -
Total Revenues 1,474,400 1,474,400 1,615,682 141,282
Expenditures:
Current
Community development 1,356,082 1,623,905 1,545,600 78,305
Total Expenditures 1,356,082 1,623,905 1,545,600 78,305
Excess of Revenues Over (Under) Expenditures 118,318 (149,505) 70,082 219,587
Other Financing Uses:
Operating transfers out (28,679) (28,679) (31,355) (2,676)
Net Change in Fund Balance 89,639 (178,184) 38,727 216,911
Fund Balance, Beginning of Year 417,296 417,296 417,296 -
Fund Balance, End of Year 506,935$ 239,112$ 456,023$ 216,911$
Tourism Business Improvement District Fund
Budget
128
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2019
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Subventions and grants 965,000$ 965,000$ 937,033$ (27,967)$
Total Revenues 965,000 965,000 937,033 (27,967)
Excess of Revenues Over Expenditures 965,000 965,000 937,033 (27,967)
Other Financing Uses:
Operating transfers out (965,000)$ (965,000)$ (1,080,413) (115,413)
Net Change in Fund Balance - - (143,380) (143,380)
Fund Balance, Beginning of Year - - - -
Fund Balance, End of Year -$ -$ (143,380)$ (143,380)$
Gas Tax
Budget
129
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2019
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Subventions and grants -$ -$ 19,287$ 19,287$
Total Revenues - - 19,287 19,287
Expenditures:
Current
Community development 99,990 99,758 46,487 53,271
Total Expenditures 99,990 99,758 46,487 53,271
Excess of Revenues Over (Under) Expenditures (99,990) (99,758) (27,200) 72,558
Other Financing Uses:
Operating transfers in 154,000 154,000 - (154,000)
Net Change in Fund Balance 54,010 54,242 (27,200) (81,442)
Fund Balance, Beginning of Year 135,775 135,775 135,775 -
Fund Balance, End of Year 189,785$ 190,017$ 108,575$ (81,442)$
Community Development Block Grant (CDBG) Fund
Budget
130
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2019
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Subventions and grants 21,325$ 21,325$ 51,497$ 30,172$
Charges for services 2,142 2,142 829 (1,313)
Total Revenues 23,467 23,467 52,326 28,859
Expenditures:
Public Safety 44,096 44,096 80,037 (35,941)
Total Expenditures 44,096 44,096 80,037 (35,941)
Excess of Revenues Over (Under) Expenditures (20,629) (20,629) (27,711) (7,082)
Other Financing Uses:
Operating transfers out - (13,800) - 13,800
Net Change in Fund Balance (20,629) (34,429) (27,711) 6,718
Fund Balance, Beginning of Year 3,073 3,073 3,073 -
Fund Balance, End of Year (17,556) (31,356) (24,638) 6,718
Budget
Law Enforcement Grants Fund
131
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2019
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property 2,100$ 2,100$ 20,333$ 18,233$
Other revenues 38,500 38,500 150,596 112,096
Total Revenues 40,600 40,600 170,929 130,329
Expenditures:
Leisure, cultural and social services - - - -
Capital Projects 126,700 74,465 69,880 4,585
Total Expenditures 126,700 74,465 69,880 4,585
Excess of Revenues Over (Under) Expenditures (86,100) (33,865) 101,049 134,914
Net Change in Fund Balance (86,100) (33,865) 101,049 134,914
Fund Balance, Beginning of Year 519,885 519,885 519,885 -
Fund Balance, End of Year 433,785$ 486,020$ 620,934$ 134,914$
Budget
Public Art Contributions Fund
132
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2019
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property -$ -$ 55,248$ 55,248$
Total Revenues - - 55,248 55,248
Expenditures:
Leisure, cultural and social services - - - -
Capital Projects - - - -
Total Expenditures - - - -
Excess of Revenues Over (Under) Expenditures - - 55,248 55,248
Net Change in Fund Balance - - 55,248 55,248
Fund Balance, Beginning of Year 1,779,551 1,779,551 1,779,551 -
Fund Balance, End of Year 1,779,551 1,779,551 1,834,799 55,248
Budget
Insurance Fund
133
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2019
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property -$ -$ 6,812$ 6,812$
Subventions and grants - - 722,436 722,436
Total Revenues - - 729,248 729,248
Expenditures:
Leisure, cultural and social services - - - -
Capital Projects - 759,192 607,361 151,831
Total Expenditures - 759,192 607,361 151,831
Excess of Revenues Over (Under) Expenditures - (759,192) 121,887 881,079
Net Change in Fund Balance - (759,192) 121,887 881,079
Fund Balance, Beginning of Year 287,587 287,587 287,587 -
Fund Balance, End of Year 287,587 (471,605) 409,474$ 881,079$
Budget
SB1 Road Repair Fund
134
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2019
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property -$ -$ 8,389$ 8,389$
Other revenues - - 15,054 15,054
Total Revenues - - 23,443 23,443
Expenditures:
Principal 2,259,149 2,259,149 1,974,050 285,099
Interest and fiscal charges 938,578 938,578 809,977 128,601
Total Expenditures 3,197,727 3,197,727 2,784,027 413,700
Excess of Revenues Over (Under) Expenditures (3,197,727) (3,197,727) (2,760,584) 437,143
Other Financing Uses:
Operating transfers in 3,185,500 3,185,500 3,185,500 -
Long-term debt proceeds - 48,096 (48,096)
Total other Financing Uses:3,185,500 3,233,596 3,185,500 (48,096)
Net Change in Fund Balance (12,227) (12,227) 424,916 389,047
Fund Balance, Beginning of Year 1,658,751 1,658,751 1,658,751 -
Fund Balance, End of Year 1,646,524$ 1,646,524$ 2,083,667$ 389,047$
Budget
Debt Service Fund
135
136
City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2019
City of San Luis Obispo, California
Agency Funds
For the Fiscal Year Ended June 30, 2018
The City of San Luis Obispo has established the following agency funds, which are used to account for funds held by the
City as an agent for private donations and programs operated jointly with other local agencies:
Whale Rock Fund. This fund was established to account for the financial activities of the Whale Rock Commission, a
joint venture providing water service to the City, the California Polytechnic State University, and the California Men's
Colony.
Jack House Fund. This fund was established to account for the financial activities of the Jack House Committee, which
includes the rehabilitation and use of a use of the historic Jack House property.
Hazardous Materials Task Force Fund. This fund was established to account for the financial activities of the County
task force.
General Agency Fund. This fund was established to account for a broad category of funds, including donations, provided
to the City to be utilized for specific purposes.
Duvall Fund. This fund was established to account for a bequest by Mary Jane Duvall to assist in civic and beautification
projects in the Mission Plaza area and extensions.
Boysen Ranch Conservation Easement Fund. This fund was established to account for contributions toward obtaining
a conservation easement on the Boysen Ranch property.
Cable Television Public, Educational and Government Funds (PEG) for the City of San Luis Obispo, San Luis
Coastal Unified School District (SLCUSD) and San Luis Obispo County Public Access, Inc. Public Access Television
(PAT). These funds account for collections by Charter Communications from its customers for PEG access equipment
and facilities. The City of San Luis Obispo, SLCUSD and PAT annually receive equal shares of collections, restricted
for approved uses as stipulated in the cable franchise agreement.
137
Adjusted
Balance Balance
June 30, 2018 Additions Deductions June 30, 2019
Whale Rock Fund
Assets
Cash and cash equivalents 142,436$ 4,047,811$ 2,233,831$ 1,956,416$
Investments 1,869,592 (1,869,592) - -
Accounts receivable 31,443 605,752 611,895 25,300
Accrued interest receivable 7,945 7,725 7,945 7,725
Prepaid expense 6,100 - 6,100 -
Capital assets, net of
accumulated depreciation 1,188,758 2,224,010 2,191,724 1,221,044
Total Assets 3,514,493$ 5,015,706$ 5,051,495$ 3,210,485$
Liabilities
Accounts payable 29,621$ 911,178$ 910,016$ 30,783$
Accrued salaries 40,881 (16,411) 3,733 20,737
Other liabilities 17,006 29,461 - 46,467
Due to agency participants 3,140,832 (28,334) - 3,112,498
Total Liabilities 3,514,493$ 895,894$ 913,749$ 3,210,485$
Balance Balance
June 30, 2018 Additions Deductions June 30, 2019
Jack House Fund
Assets
Cash and cash equivalents 17,268$ 1,064$ -$ 18,332$
Accrued interest receivable 68 89 68 89
Total Assets 17,336$ 1,153$ 68$ 18,421$
Liabilities
Accounts payable -$ -$ -$ -$
Other liabilities 17,336 1,085 - 18,421
Total Liabilities 17,336$ 1,085$ -$ 18,421$
City of San Luis Obispo, California
Combining Statement of Changes in Assets and Liabilities
Agency Funds
For the Fiscal Year Ended June 30, 2019
138
Page 2
Balance Balance
June 30, 2018 Additions Deductions June 30, 2019
Hazardous Materials Task Force Fund
Assets
Cash and cash equivalents 125,779$ 88,312$ 69,923$ 144,168$
Accrued interest receivable 537 714 537 714
Total Assets 126,316$ 89,026$ 70,460$ 144,882$
Liabilities
Accounts payable 817$ 40,474$ 40,567$ 724$
Accrued salaries 122 840 122 840
Due to agency participants 125,377 142,912 124,971 143,318
Total Liabilities 126,316$ 184,226$ 165,660$ 144,882$
Balance Balance
June 30, 2018 Additions Deductions June 30, 2019
General Agency Fund
Assets
Cash and cash equivalents 1,544,498$ 515,421$ 714,844$ 1,345,075$
Other assets 30,864 - - 30,864
Total Assets 1,575,362$ 515,421$ 714,844$ 1,375,939$
Liabilities
Accounts payable 114,606$ 567,795$ 565,397$ 117,004$
Other liabilities 1,460,756 539,086 740,907 1,258,935
Total Liabilities 1,575,362$ 1,106,881$ 1,306,304$ 1,375,939$
Balance Balance
June 30, 2018 Additions Deductions June 30, 2019
Duvall Fund
Assets
Cash and cash equivalents 160,893$ 167,045$ 161,532$ 166,406$
Accrued interest receivable 639 808 640 807
Total Assets 161,532$ 167,853$ 162,172$ 167,213$
Liabilities
Other liabilities 161,532$ 167,213$ 161,532$ 167,213$
Total Liabilities 161,532$ 167,213$ 161,532$ 167,213$
Balance Balance
June 30, 2018 Additions Deductions June 30, 2019
Boysen Ranch Conservation Easement
Assets
Cash and cash equivalents 402,274$ 13,784$ -$ 416,058$
Accrued interest receivable 1,599 2,017 1,599 2,017
Total Assets 403,873$ 15,801$ 1,599$ 418,075$
Liabilities
Accounts payable 24,567$ -$ -$ 24,567$
Other liabilities 379,306 317,968 303,766 393,508
Total Liabilities 403,873$ 317,968$ 303,766$ 418,075$
City of San Luis Obispo, California
Combining Statement of Changes in Assets and Liabilities
Agency Funds, continued
For the Fiscal Year Ended June 30, 2019
139
Page 3
Balance Balance
June 30, 2018 Additions Deductions June 30, 2019
PEG - City of San Luis Obispo
Assets
Cash and cash equivalents 218,186$ 129,057$ 80,000$ 267,243$
Accounts receivable 10,606 50,657 51,295 9,968
Accrued interest receivable 849 1,150 849 1,150
Total Assets 229,641$ 180,864$ 132,144$ 278,361$
Liabilities
Accounts payable 9,067$ 800$ 9,867$ -$
Other liabilities 220,574 58,587 800 278,361
Total Liabilities 229,641$ 59,387$ 10,667$ 278,361$
Balance Balance
June 30, 2018 Additions Deductions June 30, 2019
PEG - SLCUSD
Assets
Cash and cash equivalents 268,667$ 71,240$ 62,552$ 277,355$
Accounts receivable 10,606 30,534 31,171 9,969
Accrued interest receivable 1,068 1,396 1,068 1,396
Total Assets 280,341$ 103,170$ 94,791$ 288,720$
Liabilities
Other liabilities 280,341$ 40,387$ 32,008$ 288,720$
Total Liabilities 280,341$ 40,387$ 32,008$ 288,720$
Adjusted Balance Balance
June 30, 2018 Additions Deductions June 30, 2019
Totals - All Agency Funds
Assets
Cash and cash equivalents 2,880,001$ 5,033,734$ 3,322,682$ 4,591,053$
Investments 1,869,592 (1,869,592) - -
Accounts receivable 52,655 686,943 694,361 45,237
Accrued interest receivable 12,705 13,899 12,706 13,898
Other assets 36,964 - 6,100 30,864
Due from other governments - - - -
Capital assets, net of
accumulated depreciation 1,188,758 2,224,010 2,191,724 1,221,044
Total Assets 6,040,675$ 6,088,994$ 6,227,573$ 5,902,096$
Liabilities
Accounts payable 178,678$ 1,520,247$ 1,525,847$ 173,078$
Accrued salaries 41,003 (15,571) 3,855 21,577
Other liabilities 2,536,851 1,153,787 1,239,013 2,451,625
Due to agency participants 3,266,209 114,578 124,971 3,255,816
Total Liabilities 6,022,741$ 2,773,041$ 2,893,686$ 5,902,096$
Combining Statement of Changes in Assets and Liabilities
Agency Funds, continued
For the Fiscal Year Ended June 30, 2019
City of San Luis Obispo, California
140
STATISTICAL SECTION (UNAUDITED)
141
City of San Luis Obispo, California
Statistical Section Overview
For the Fiscal Year Ended June 30, 2019
This part of the City of San Luis Obispo’s comprehensive annual financial report presents detailed information as a
context for understanding what the information in the financial statements, note disclosures, and required
supplementary information says about the government’s overall financial health.
Contents
Financial Trends – Schedules 1-6. These schedules contain trend information to help the reader understand how
the City’s financial performance and well-being have changed over time.
Revenue Capacity – Schedules 7-13. These schedules contain information to help the reader assess the government’s
most significant local revenue sources, sales and property taxes.
Debt Capacity – Schedules 14-19. These schedules present information to help the reader assess the affordability of the
City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future.
Demographic and Economic Information – Schedules 20-22. These schedules offer demographic and economic
indicators to help the reader understand the environment within which the government’s financial activities take place.
Operating Information – Schedules 23-26. 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 government provides and the
activities it performs.
142
2009-102010-112011-122012-132013-142014-152015-162016-172017-182018-19Governmental activities: Net investment in capital assets129,416,800$ 133,145,800$ 141,686,600$ 142,239,500$ 145,266,043$ 150,430,226$ 163,449,992$ 165,100,426$ 171,472,251$ 174,431,254$ Restricted2,569,800 2,543,800 2,620,700 2,374,800 4,825,662 2,350,838 2,762,387 2,268,499 421,954 20,458,677 Unrestricted26,204,500 26,401,500 23,583,000 29,927,200 (66,610,104) (57,421,778) (49,031,893) (41,496,841) (49,909,657) (72,041,172) Total governmental activities net position158,191,100$ 162,091,100$ 167,890,300$ 174,541,500$ 83,481,601$ 95,359,286$ 117,180,486$ 125,872,084$ 121,984,548$ 122,848,759$ Business-type activities: Net investment in capital assets112,395,800$ 117,314,700$ 119,957,600$ 123,510,200$ 119,116,303$ 125,801,845$ 128,390,611$ 131,149,516$ 136,694,402$ 139,659,544$ Restricted2,763,700 2,777,100 2,293,900 2,254,200 2,248,979 2,261,213 2,278,392 2,276,526 1,558,795 500,645 Unrestricted38,245,900 36,493,600 37,759,000 41,712,200 35,224,987 42,117,143 49,495,220 53,421,102 50,866,147 57,379,689 Total business-type activities net position153,405,400$ 156,585,400$ 160,010,500$ 167,476,600$ 156,590,269$ 170,180,201$ 180,164,223$ 186,847,144$ 189,119,344$ 197,539,878$ Primary government (City wide totals): Net investment in capital assets241,812,600$ 250,460,500$ 261,644,200$ 265,749,700$ 264,382,346$ 276,232,071$ 291,840,603$ 296,249,942$ 308,166,653$ 314,090,798$ Restricted5,333,500 5,320,900 4,914,600 4,629,000 7,074,641 4,612,051 5,040,779 4,545,025 1,980,749 20,959,322 Unrestricted64,450,400 62,895,100 61,342,000 71,639,400 (31,385,117) (15,304,635) 463,327 11,924,261 956,490 (14,661,483) Total primary government net position311,596,500$ 318,676,500$ 327,900,800$ 342,018,100$ 240,071,870$ 265,539,487$ 297,344,709$ 312,719,228$ 311,103,892$ 320,388,637$ Schedule 1City of San Luis Obispo, CaliforniaNet Assets by ComponentLast Ten Fiscal Years(Accrual basis of accounting)143
2008-09 2009-102010-11 2011-12 2012-132013-142014-15 2015-162016-172017-182018-19Expenses:Governmental activities:Public safety29,330,300$ 27,687,200$ 26,774,800$ 27,993,900$ 28,859,200$ 29,651,702$ 26,881,732$ 29,318,821$ 31,806,692$ 42,097,557$ 34,320,108$ Transportation6,619,300 7,116,400 8,809,400 7,778,000 8,551,500 8,975,047 11,457,311 8,792,028 9,668,840 9,229,042 7,546,278 Leisure, cultural and social services9,778,900 9,445,600 9,299,200 9,500,300 10,078,700 10,239,853 10,332,740 9,808,545 9,824,262 11,125,792 9,469,520 Community development8,233,600 11,020,400 8,166,300 8,782,200 8,866,900 10,183,782 10,960,778 12,900,275 14,656,604 13,457,993 12,573,953 General Government22,429,785 Interest on long-term debt951,500 1,348,100 1,248,400 1,198,000 1,217,200 1,221,205 1,015,011 1,351,468 1,170,984 1,488,183 702,885 Total governmental activities expenses54,913,600 56,617,700 54,298,100 55,252,400 57,573,500 60,271,589 60,647,572 62,171,137 67,127,382 77,398,567 87,042,529 Business-type activities:Water11,532,900 11,323,200 16,106,300 17,455,200 17,019,000 17,575,961 17,128,041 18,136,120 19,069,967 19,523,736 20,986,430 Sewer9,250,200 9,153,200 9,633,900 9,530,400 10,189,400 10,647,255 10,132,214 10,842,451 11,683,262 14,158,612 13,967,717 Parking3,704,700 3,494,300 3,501,500 3,598,000 3,678,600 3,636,607 3,556,637 3,900,052 3,791,493 4,098,840 4,088,681 Transit3,199,200 3,295,500 3,409,700 3,778,900 3,903,900 4,059,138 3,994,194 4,088,423 4,076,871 4,355,103 4,320,976 Golf722,100 708,400 724,100 - - - - - - - - Total business-type activities expenses28,409,100 27,974,600 33,375,500 34,362,500 34,790,900 35,918,961 34,811,086 36,967,046 38,621,593 42,136,291 43,363,804 Total primary government expenses83,322,700$ 84,592,300$ 87,673,600$ 89,614,900$ 92,364,400$ 96,190,550$ 95,458,658$ 99,138,183$ 105,748,975$ 119,534,858$ 130,406,333$ Program Revenues:Governmental activities:Charges for services:Public safety1,508,600$ 1,501,500$ 1,745,200$ 1,750,700$ 1,599,000$ 1,589,278$ 1,697,748$ 1,673,800$ 1,771,383$ 1,881,725$ 1,633,223$ Transportation1,492,800 241,700 2,690,200 418,000 221,200 1,321,323 1,270,787 1,691,757 1,793,010 1,669,563 2,399,692 Leisure, cultural and social services1,470,000 1,304,700 1,421,600 1,834,200 1,926,800 3,048,274 2,155,411 2,048,780 3,501,837 3,487,225 4,078,539 Community development3,107,400 2,917,700 3,166,200 4,563,200 4,126,400 4,981,211 7,210,132 7,974,880 8,144,128 7,355,831 9,941,951 General Government1,391,940 Operating grants and contributions3,671,200 2,052,000 1,885,100 2,152,700 2,814,700 2,412,469 2,509,323 2,667,058 2,488,706 4,015,502 2,990,211 Capital grants and contributions5,320,500 2,946,800 3,066,300 2,021,800 1,991,900 3,680,440 7,911,867 9,355,707 40,531 39,781 47,234 Total governmental activities program revenues16,570,500 10,964,400 13,974,600 12,740,600 12,680,000 17,032,995 22,755,268 25,411,982 17,739,595 18,449,627 22,482,790 Business-type activities:Charges for services:Water13,836,000$ 13,812,100$ 14,298,100$ 16,753,100$ 18,148,200$ 19,755,909$ 20,446,730$ 19,884,850$ 20,180,931$ 22,202,069$ 24,026,385$ Sewer11,785,200 13,225,100 13,320,400 14,789,700 16,212,000 17,151,212 18,007,064 16,460,140 16,272,533 16,753,094 18,674,547 Parking3,508,100 3,496,100 3,564,700 3,533,300 4,693,400 3,998,730 4,905,494 7,408,729 4,666,970 5,226,780 5,443,038 Transit607,000 551,600 593,100 552,900 682,700 688,585 649,899 659,471 666,296 703,451 776,808 Golf382,200 394,600 364,000 - - - - - - - - Operating grants and contributions2,192,200 2,350,200 2,220,700 2,502,500 2,673,500 2,458,640 3,148,651 2,888,820 4,180,386 3,099,618 3,259,975 Capital grants and contributions1,627,300 952,300 1,242,000 750,900 731,300 82,359 60,063 - - - - Total business-type activities programs revenues33,938,000 34,782,000 35,603,000 38,882,400 43,141,100 44,135,435 47,217,901 47,302,010 45,967,116 47,985,012 52,180,753 Total primary government program revenues50,508,500$ 45,746,400$ 49,577,600$ 51,623,000$ 55,821,100$ 61,168,430$ 69,973,169$ 72,713,992$ 63,706,711$ 66,434,639$ 74,663,543$ Net Revenues (Expenses):Governmental activities(38,343,100)$ (45,653,300)$ (40,323,500)$ (42,511,800)$ (44,893,500)$ (43,238,594)$ (37,892,304)$ (36,759,155)$ (49,387,787)$ (58,948,940)$ (64,559,739)$ Business-type activities5,528,900 6,807,400 2,227,500 4,519,900 8,350,200 8,216,474 12,406,815 10,334,964 7,345,523 5,848,721 8,816,949 Total primary government(32,814,200)$ (38,845,900)$ (38,096,000)$ (37,991,900)$ (36,543,300)$ (35,022,120)$ (25,485,489)$ (26,424,191)$ (42,042,264)$ (53,100,219)$ (55,742,790)$ Schedule 2City of San Luis Obispo, CaliforniaChanges in Net Position, Last Ten Fiscal Years(Accrual Basis of Accounting)144
2008-09 2009-102010-11 2011-12 2012-132013-142014-15 2015-162016-172017-182018-19Schedule 2City of San Luis Obispo, CaliforniaChanges in Net Position, Last Ten Fiscal Years(Accrual Basis of Accounting)General Revenues and Other Changes in Net Position:Governmental activities:Sales and use taxes 17,712,100$ 15,976,400$ 17,714,900$ 19,527,500$ 20,736,000$ 22,180,173$ 22,408,980$ 24,676,377$ 24,068,665$ 24,559,570$ 26,444,775$ Property taxes 8,788,400 8,579,300 8,441,100 8,367,000 9,176,600 8,960,010 9,631,890 10,186,858 10,756,477 11,425,510 12,238,357 Transient occupancy tax 4,679,500 4,496,100 4,844,200 5,222,000 5,572,400 6,063,232 6,805,742 7,127,756 7,381,989 7,514,289 8,061,087 Utility users tax 4,358,500 4,862,400 4,592,300 4,584,100 4,916,100 5,345,342 5,211,207 5,413,720 5,539,407 5,627,356 4,919,892 Property tax in-lieu of vehicle license fees 3,504,700 3,565,100 3,551,100 3,492,400 3,533,200 3,645,692 3,849,341 4,113,244 4,353,912 4,637,253 4,961,080 Other taxes and fees 4,317,900 4,226,800 4,149,900 4,299,800 4,607,600 4,779,570 4,993,285 4,800,592 3,929,377 5,006,594 4,332,557 Investment earnings 1,775,300 1,239,500 742,500 770,100 237,100 566,931 467,348 825,760 997,995 164,434 1,618,354 Miscellaneous and other 400,800 339,600 414,700 227,200 349,900 679,127 707,781 - - - 146,579 Special item - sale of land - - - - - - - - - - - Gain (loss) on disposal of capital assets(3,400) (11,000) - - - - - - Prior period adjustment2,657,100 (833,234) - - - - - Cumulative change in accounting principle (GASB 65)(345,400) - - - - Transfers(335,000) (301,500) (227,200) 1,820,900 115,100 (73,771) (329,452) 1,436,048 1,051,563 1,198,027 2,456,035 Total governmental activities45,202,200 42,980,300 44,223,500 48,311,000 51,544,700 51,313,072 53,746,122 58,580,355 58,079,385 60,133,033 65,178,716 Business-type activitiesInvestment earnings1,699,600$ 1,372,500$ 725,300$ 726,100$ 73,500$ 364,551$ 361,627$ 845,906$ 182,261$ 320,471$ 2,516,216$ Cumulative change in accounting principle(842,600) Income from investment in joint venture239,200 206,700 209,300 (25,469) Transfers335,000 301,500 227,200 (1,820,900) (115,100) 73,771 329,452 (1,436,048) (1,051,563) (1,198,027) (2,456,035) Total business-type activities2,034,600 1,674,000 952,500 (1,094,800) (884,200) 438,322 691,079 (350,942) (662,602) (668,256) 34,712 Total primary government47,236,800$ 44,654,300$ 45,176,000$ 47,216,200$ 50,660,500$ 51,751,394$ 54,437,201$ 58,229,413$ 57,416,783$ 59,464,777$ 65,213,428$ Change in net position:Governmental activities6,859,100$ (2,673,000)$ 3,900,000$ 5,799,200$ 6,651,200$ 8,074,478$ 15,853,818$ 21,821,200$ 8,691,598$ 1,184,093$ 618,977$ Business-type activities7,563,500 8,481,400 3,180,000 3,425,100 7,466,000 8,654,796 13,097,894 9,984,022 6,682,921 5,180,465 8,851,661 Total primary government14,422,600$ 5,808,400$ 7,080,000$ 9,224,300$ 14,117,200$ 16,729,274$ 28,951,712$ 31,805,222$ 15,374,519$ 6,364,558$ 9,470,638$ 145
Fiscal Sales Measure Y Property Transient Utility Property Franchise Business Other Yearand Use 1/2 cent (Note 1) Occupancy Users in-lieu of VLF Fees Tax Taxes Total2009-10 10,723,900 5,252,500 8,579,300 4,496,100 4,862,400 3,565,100 2,396,700 1,830,100 204,600 41,910,700 2010-11 12,098,600 5,616,300 8,441,100 4,844,200 4,592,300 3,551,100 2,352,100 1,797,800 209,100 43,502,600 2011-12 13,290,000 6,237,500 8,367,000 5,222,000 4,584,100 3,492,400 2,462,300 1,837,500 227,200 45,720,000 2012-13 14,242,200 6,493,800 9,176,600 5,572,400 4,916,100 3,533,200 2,552,300 2,055,300 349,900 48,891,800 2013-14 15,405,808 6,774,365 8,960,010 6,063,232 5,345,692 3,645,692 2,636,599 2,142,971 679,127 51,653,496 2014-15 15,272,683 7,136,297 9,631,890 6,805,742 5,211,207 3,849,341 2,790,077 2,203,208 707,781 53,608,226 2015-16 17,498,218 7,178,159 10,186,858 7,127,756 5,413,720 4,113,244 1,537,922 2,491,516 771,154 56,318,547 2016-17 16,737,005 7,331,660 10,756,477 7,381,989 5,539,407 4,353,912 1,557,128 2,372,249 737,826 56,767,653 2017-18 17,055,085 7,504,485 11,425,510 7,514,289 5,627,356 4,637,253 1,597,655 2,663,686 745,253 58,770,572 2018-19 18,119,545 8,325,230 12,238,357 8,061,087 4,919,892 4,961,080 1,428,296 2,630,499 273,762 60,957,748 Notes:1. Property tax revenues are presented net of SB2557 County administrative fees (approximately 3% of total property tax revenues). The City has elected to receive its property tax revenues based on the Teeter Plan method of collection whereby the County remits 100% of taxes levied, pursues collection and retains any delinquent taxes and related penalties and interest.2. In November 2014 voters in San Luis Obispo reauthorized the local Half -percent sales and use tax measure (Measure G) .(Accrual Basis of Accounting)Schedule 3City of San Luis Obispo, CaliforniaGovernmental Activities Tax and Franchise Revenues by SourceLast Ten Fiscal Years146
2009-102010-112011-122012-132013-142014-152015-162016-172017-182018-19General fund: Reserved201,800$ $ $ $ $ $ $ $ $ $ Unreserved: Designated923,500 Undesignated9,988,800 Nonspendable: Prepaid items2,777,000 3,191,055 60,181 56,020 3,173,248 3,520,473 51,636 Restricted for: (Note 1) Debt service258,100 602,800 331,600 312,037 303,126 489,056 128,102 159,724 - Committed to: (Note 1) General government programs317,500 1,288,200 1,768,200 4,973,497 3,942,459 4,468,863 9,428,034 8,693,113 Assigned to: Contingency Fund10,458,000 10,486,931 11,092,782 10,902,368 10,171,464 13,418,400 Development Services1,848,386 382,396 41,110 596,796 531,000 Safety Fire97,239 City Attorney100,000 100,000 - Subsequent years expenditures8,200 11,900 2,716,534 9,908,932 Unassigned12,324,100 11,781,500 14,060,900 1,382,590 7,828,485 10,419,881 2,723,292 6,334,870 6,185,574 Total general fund11,114,100 12,907,900 13,684,400 18,937,700 20,317,179 24,566,807 29,625,532 26,496,154 29,576,440 30,095,542 For the Fiscal Year Ended June 30Schedule 4City of San Luis Obispo, CaliforniaFund Balances, Governmental FundsLast Ten Fiscal Years(Modified Accrual Basis of Accounting)147
2009-102010-112011-122012-132013-142014-152015-162016-172017-182018-19For the Fiscal Year Ended June 30Schedule 4City of San Luis Obispo, CaliforniaFund Balances, Governmental FundsLast Ten Fiscal Years(Modified Accrual Basis of Accounting)All other governmental funds: Reserved6,932,600$ $ $ $ $ $ $ $ $ $ Unreserved reported in: Capital projects funds1,245,000 Special revenue funds920,300 Unspendable5,642 (71,687) 292,641 Restricted for: (Note 1) Debt service2,285,700 2,017,900 2,043,200 2,043,222 2,140,980 2,119,724 2,119,611 1,653,109 1,791,026 Law enforcement grant programs42,000 20,500 22,900 27,145 16,886 23,492 20,786 3,073 Transportation projects8,151,487 Affordable housing programs2,944,549 Impact fee programs1,870,656 Parkland development programs3,528,662 Public art programs620,934 Tourism programs456,023 Committed to: Affordable housing programs294,000 1,052,000 1,254,900 2,946,847 2,601,882 2,562,825 5,054,332 3,974,629 Assessment district programs170,700 183,000 Capital outlay1,172,800 1,227,700 1,326,000 6,045,091 3,632,641 2,954,223 General government programs4,743,552 1,084,221 7,463,605 8,092,594 Impact Fees Programs4,350,000 4,069,800 3,542,700 411,592 9,410,273 549,349 8,795,074 595,256 Open space programs183,400 194,300 1,582,425 983,402 1,265,620 588,743 2,363,347 Parkland development programs998,900 1,057,100 1,209,600 2,728,883 Contingency fund519,885 Public art programs293,700 373,700 347,400 Assigned to: Contingency fund900,000 900,000 900,000 Subsequent years expenditures8,997,800 4,359,300 5,413,900 3,552,319 2,606,757 3,559,851 5,846,873 5,861,455 6,382,294 Unassigned(2,500) 1,039 (83) (318,422) Total all other governmental funds9,097,900 18,605,600 14,544,400 15,352,400 21,353,232 22,476,959 20,498,689 26,059,944 23,891,661 26,619,850 Total all governmental funds20,212,000$ 31,513,500$ 28,228,800$ 34,290,100$ 41,670,411$ 47,043,766$ 50,124,221$ 52,556,098$ 53,468,101$ 56,715,392$ Note:The City implemented GASB Statement No. 54 in the 2010-11 fiscal year which requires the City to use new designations of ending fund balances.148
2008-092009-102010-112011-122012-132013-142014-152015-162016-172017-182018-19Revenues:Taxes Sales and Use - general12,070,700$ 10,723,900$ 12,098,600$ 13,290,000$ 14,242,200$ 15,405,808$ 15,272,683$ 17,498,218$ 16,737,005$ 17,055,085$ 18,119,545$ Sales and Use - Measure Y5,641,400 5,252,500 5,616,300 6,237,500 6,493,800 6,774,365 7,136,297 7,178,159 7,331,660 7,504,485 8,325,230 Prop. 172 Public Safety308,400 257,900 271,300 307,400 327,700 391,567 409,590 405,066 405,512 397,488 - Property8,788,400 8,579,300 8,441,100 8,367,000 9,176,600 8,960,010 9,631,890 10,186,858 10,756,477 11,425,510 12,238,357 Transient Occupancy4,679,500 4,496,100 4,844,200 5,222,000 5,572,400 6,063,232 6,805,742 7,127,756 7,381,989 7,514,289 8,061,087 Utility Users4,358,500 4,862,400 4,592,300 4,584,100 4,916,100 5,345,342 5,211,207 5,413,720 5,539,407 5,627,356 4,919,892 Property tax in-lieu of VLF (Note 1)3,504,700 3,565,100 3,551,100 3,492,400 3,533,200 3,645,692 3,849,341 4,113,244 4,353,912 4,637,253 4,961,080 Franchise Fees2,439,400 2,396,700 2,352,100 2,462,300 2,552,300 2,636,599 2,790,077 1,537,922 1,557,128 1,597,655 1,428,296 Business Tax1,878,500 1,830,100 1,797,800 1,837,500 2,055,300 2,142,971 2,203,208 2,491,516 2,372,249 2,663,686 2,630,499 Real Property Transfer159,100 129,000 133,700 144,000 256,300 287,560 298,191 366,088 332,314 347,765 273,762 Fines, forfeitures and penalties261,000 201,700 171,400 174,300 159,700 150,185 184,320 172,353 139,534 199,374 - Use of money and property1,775,300 1,239,500 742,500 770,100 237,100 566,931 467,348 825,760 260,169 164,434 1,996,382 Subventions and grants- - - - - - - - - 4,156,333 3,110,689 Vehicle License Fees (Note 1)166,500 135,000 205,600 45,600 19,300 - - - - - - Other subventions and grants8,774,200 4,837,000 4,776,500 3,932,100 4,603,140 5,989,881 10,858,570 11,771,980 2,624,753 - - Charges for services6,677,700 5,865,700 9,209,300 8,954,500 8,106,600 11,167,033 12,450,887 13,622,945 15,173,707 14,672,746 18,549,855 Other revenues1,810,300 398,000 270,500 36,500 526,500 357,469 217,710 242,744 446,456 634,391 590,796 Total revenues63,293,600 54,769,900 59,074,300 59,857,300 62,778,240 69,884,645 77,787,061 82,954,329 75,412,272 78,597,850 85,205,470 Expenditures:Current:General Government6,793,100$ 7,253,500$ 6,828,700$ 8,175,200$ 8,723,300$ 9,362,031$ 10,534,463$ 12,409,567$ 11,824,360$ 12,709,324$ 13,769,778$ Public safety26,002,400 24,203,800 23,506,100 23,953,200 23,973,400 24,798,500 24,356,077 26,468,454 28,091,747 28,862,906 31,714,220 Transportation3,224,200 3,019,700 2,901,900 2,865,100 2,798,200 2,882,241 2,969,111 3,317,177 3,780,804 3,565,022 3,495,909 Leisure, cultural and social services6,598,900 6,279,900 6,268,700 6,704,200 6,790,300 7,155,619 7,250,398 7,428,198 7,712,834 8,571,184 8,636,582 Community development6,280,800 6,690,200 7,053,500 6,986,300 7,777,400 8,389,957 10,047,272 10,770,827 10,300,894 10,815,667 10,677,334 Debt service: Principal1,159,900 1,550,200 1,774,000 1,493,200 1,543,000 1,534,668 3,856,325 1,792,849 2,101,296 15,665,904 1,974,050 Interest915,900 1,358,500 1,249,200 1,211,800 1,192,700 1,048,671 1,063,820 1,349,216 1,215,504 1,524,180 809,977 Debt issuance costs- - 36,000 - - - - - - - - Capital: Public safety1,652,700 4,704,400 494,100 447,900 457,700 892,351 2,371,865 1,220,759 1,772,454 506,491 706,918 Transportation6,177,600 4,237,200 6,913,200 9,121,000 5,228,300 4,859,863 14,302,937 15,038,306 4,161,966 6,419,137 6,441,229 Leisure, cultural and social services1,213,900 1,188,500 584,500 862,000 395,500 1,272,510 2,399,211 1,463,269 1,499,704 981,768 597,187 Community development (Note 2)1,382,500 3,893,700 884,100 705,300 70,900 939,017 123,258 149,537 2,078,181 525,105 1,568,147 General government869,700 3,076,800 1,731,400 274,900 429,700 145,199 1,684,045 590,263 633,682 1,192,424 4,695,978 Total expenditures62,271,600 67,456,400 60,225,400 62,800,100 59,380,400 63,280,627 80,958,782 81,998,422 75,173,426 91,339,112 85,087,309 Schedule 5City of San Luis Obispo, CaliforniaRevenues, Expenditures and Changes in Fund Balances of Governmental FundsLast Ten Fiscal Years (Modified accrual basis of accounting)149
2008-092009-102010-112011-122012-132013-142014-152015-162016-172017-182018-19Schedule 5City of San Luis Obispo, CaliforniaRevenues, Expenditures and Changes in Fund Balances of Governmental FundsLast Ten Fiscal Years (Modified accrual basis of accounting)Excess of revenues over(under) expenditures 1,022,000 (12,686,500) (1,151,100) (2,942,800) 3,397,840 6,604,018 (3,171,722) 955,907 238,846 (12,741,262) 118,161 Other FinancingSources(Uses):Sale of surplus property -$ -$ 393,900$ 30,200$ -$ -$ -$ -$ -$ -$ -$ Issuance of debt/refunding debt 9,067,000 - 1,080,000 5,050,000 - 850,775 8,372,323 688,500 1,141,468 12,472,698 673,095 Cost of debt issuance - - - - (11,500) - - - - - - Payment to refunded bond escrow agent (281,800) - - (5,442,200) - - - - - - - Transfers in 8,655,400 8,081,900 6,464,100 8,121,200 8,407,600 13,834,998 11,682,079 12,747,578 15,739,036 19,815,144 9,064,256 Transfers out (8,990,400) (8,383,400) (6,691,300) (8,101,100) (8,292,500) (13,908,769) (12,011,531) (11,311,530) (14,687,473) (18,617,117) (6,608,221) Total other financing sources(uses) 8,450,200 (301,500) 1,246,700 (341,900) 103,600 777,004 8,042,871 2,124,548 2,193,031 13,670,725 3,129,130 Net change in fund balance 9,472,200$ (12,988,000)$ 95,600$ (3,284,700)$ 3,501,440$ 7,381,022$ 4,871,150$ 3,080,455$ 2,431,877$ 929,463$ 3,247,291$ Debt service as a percentage of noncapital expenditures4.93%7.24%7.61%6.68%6.62%5.98%8.92%5.20%5.37%26.64%3.60%Notes:1. Beginning in 2005-06 the State implemented a "VLF swap," under which an equal amount of Vehicle License Fees was "swapped" for an equal amount of revenues to be collected on the property tax roll. 2. Community Development Block Grant (CDBG) expenditures are included in the Community Development total for purposes of this schedule. 150
2009-102010-112011-122012-132013-142014-152015-162016-172017-182018-19Staffing: Salaries and wages: Regular salaries24,180,400$ 23,848,400$ 23,432,400$ 23,214,900$ 23,242,170$ 23,804,510$ 24,790,947$ 26,944,188$ 26,666,447$ 27,520,149$ Temporary salaries1,592,700 1,507,300 1,626,900 1,812,700 2,191,214 2,137,487 1,964,521 1,793,360 1,711,755 1,898,331 Overtime2,397,500 2,162,500 2,763,100 3,309,000 3,018,181 3,222,698 3,473,489 3,604,336 4,420,756 4,241,294 Benefits: Retirement7,915,900 7,899,200 8,444,000 7,661,900 7,637,931 7,943,827 9,323,782 10,394,523 10,570,883 15,150,755 Group health/disability ins (Note 1)3,744,200 3,407,500 3,441,700 3,463,500 3,387,101 3,319,117 3,828,238 4,129,004 4,638,471 4,193,021 Medicare370,300 367,100 371,200 384,400 393,913 408,889 418,704 455,966 469,688 477,925 Unemployment Reimbursements87,600 35,500 26,200 28,800 31,634 48,588 5,159 150,929 61,972 57,628 Total staffing40,288,600 39,227,500 40,105,500 39,875,200 39,902,144 40,885,116 43,804,840 47,472,306 48,539,972 53,539,103 Contract services3,812,400 3,728,100 4,306,000 5,208,900 5,725,290 5,903,638 6,271,607 6,962,949 6,940,018 6,557,939Other operating expenditures Communications & utilities1,538,000 1,629,500 1,658,000 1,842,300 2,034,997 1,945,243 2,192,384 2,023,057 2,190,695 2,444,564 Rents & leases130,500141,800136,800139,600197,104159,718164,729170,288171,909180,478 Insurance: General liability & property1,447,3001,434,600 1,475,600 1,320,700 1,425,450 1,646,605 1,847,422 1,273,133 1,658,319 1,600,962 Workers compensation760,500447,100594,400918,000 1,405,916 1,631,585 2,019,722 1,627,423 2,145,046 2,422,843 Other operating expenditures2,399,300 2,544,400 2,696,500 2,910,900 2,991,619 3,635,542 3,079,347 3,345,191 3,017,537 3,575,930 Total operating expenditures6,275,600 6,197,400 6,561,300 7,131,500 8,055,086 9,018,693 9,303,604 8,439,092 9,183,506 10,224,777 Minor capital38,300 10,800 14,200 99,400 195,473 78,414 92,853 203,098 90,346 157,362 Total program expenditures50,414,900 49,163,800 50,987,000 52,315,000 53,877,993 55,885,861 59,472,903 63,077,445 64,753,842 70,479,181 Reimbursed expenditures(4,264,000) (4,449,900) (3,774,900) (3,732,100) (3,897,420) (3,451,208) (4,008,992) (4,164,747) (4,264,633) (3,981,789) Total general fund operating expenditures46,150,900$ 44,713,900$ 47,212,100$ 48,582,900$ 49,980,573$ 52,434,653$ 55,463,911$ 58,912,698$ 60,489,209$ 66,497,392$ Note:1. Beginning in 2008-09, the City began to fund retiree health costs on a full accrual basis. The added cost compared with the prior "pay-as-you-go" approach in 2011-12 is $364,800. While this change in accounting increases costs initially, in the not-so-distant future (about 12 years), it becomes a much less expensive option than continuing "pay-as-you-go" cash funding.Schedule 6City of San Luis Obispo, CaliforniaGeneral Fund Operating Expenditures by TypeLast Ten Fiscal Years(Modified Accrual Basis of Accounting)151
Fiscal Year Homeowners Secured Roll Unitary UnsecuredTotal Direct Market Value of MarketExemptions Gross ValueRollTOTAL Tax Rate (Note 1) Value2009-1042,222,400 6,008,936,600 4,904,100 277,718,500 6,291,559,200 1.00% 6,291,559,200 100%2010-1141,929,800 5,985,294,700 5,505,000 279,434,500 6,270,234,200 1.00% 6,270,234,200 100%2011-1241,988,100 5,894,189,700 6,842,300 275,800,100 6,176,832,100 1.00% 6,176,832,100 100%2012-1341,572,300 5,963,182,500 5,382,272 279,203,900 6,261,931,900 1.00% 6,261,931,900 100%2013-1441,327,300 6,152,693,400 5,300,173 295,626,200 6,467,600,400 1.00% 6,467,600,400 100%2014-1541,185,200 6,512,370,260 5,032,204 297,325,321 6,814,727,785 1.00% 6,814,727,785 100% 2015-1641,518,400 6,965,233,454 4,883,115 305,427,553 7,275,544,122 1.00% 7,275,544,122 100% 2016-1742,109,709 7,393,890,993 5,269,573 303,122,262 7,702,282,828 1.00% 7,702,282,828 100%2017-1842,702,377 7,844,131,236 4,369,188 331,183,030 8,179,683,454 1.00% 8,179,683,454 100%2018-1943,352,906 8,688,541,007 4,231,993 359,588,899 9,052,361,899 1.00% 9,052,361,899 100%Notes: 1. Valuations are established by the County Assessor of the County of San Luis Obispo, except for property owned by private utility companies, which is valued by the State of California. The City assumes that Market Values are equal to total Assessed Valuation.2. For comparison purposes, gross assessed valuations include homeowners' exemptions. Although these exemptions reduce property tax collections, the revenue loss is reimbursed by the State of California. As such, gross assessed valuation is the revenue base used in establishing property tax-related revenues.SOURCE: HDL CAFR 2018-19 report - 2018-19 Roll Summary table. Gross Assessed Valuation (Notes 1 and 2)Schedule 7City of San Luis Obispo, CaliforniaAssessed Value and Estimated Actual Value of Taxable PropertyLast Ten Fiscal Years152
2009-10 2010-112011-122012-13 2013-14 2014-152015-16 2016-17 2017-18 2018-19Proposition 13 maximum tax rate (Note 2)1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 Voter approved indebtedness: State Water Bond0.00220 0.00290 0.00300 0.00400 0.00400 0.00400 0.00374 0.00400 0.00400 0.00400 Cuesta Community College 2014 A & A10.01925 0.01925 0.01925 0.01925 San Luis Coastal Usd 2014 Series A & B0.04900 0.04900 0.04900 0.04900 Total (Notes 1 and 3)1.00220 1.00290 1.00300 1.00400 1.00400 1.00400 1.07199 1.07225 1.07225 1.07225 Notes:1. Property tax rates are levied per $100 of assessed valuation. The tax rate information provided is for Tax Rate Area 003-000, which is the largest tax rate area in the City.2. The passage of Proposition 13 on June 6, 1978 established a maximum County-wide levy for general revenue purposes of 1% of market value. Voter-approved tax rates for the retirement of long-term liabilities were excluded from this limit.3. It is not possible to identify tax rates for individual agencies however, the following is a summary of derived property tax allocations within Tax Rate Area 003-000 for Fiscal Year 2018-19:BaseERAFNetRate Allocation ApportionmentSan Luis Coastal Unified School District36.1036.10San Luis Obispo County - General Fund30.33(8.81)21.52City of San Luis Obispo18.36 * (3.54)14.82San Luis Obispo Community College District6.426.42County School Services3.813.81City/County Library1.98(0.32)1.66Port San Luis Harbor1.63(0.44)1.19Other Agencies1.38(0.30)1.08Education Revenue Augmentation Fund (ERAF)13.4113.41 Total100%0%100%*The County further adjusts the 18.4% base rate for revenue shifts to school districts as directed by the State as part of their cuts to local agencies,resulting in an effective rate for the City of approximately 14.9%. Source: Prepared by HdL, Coren & ConeData source: San Luis Obispo County Assessor 2017-18 Post ERAF TRA Allocation FactorsSchedule 8City of San Luis Obispo, CaliforniaProperty Tax RatesLast Ten Fiscal Years153
Number of SecuredPercent of Total Number of SecuredPercent of TotalOwnerParcels Assessed Value Rank City Assessed Value Parcels Assessed Value Rank City Assessed Value Jamestown Premir SLO Court Etal10113,238,219$ 11.34%$ CAP VIII Mustang - LLC492,423,980 21.10%Sierra Vista Hospital Inc.880,002,356 30.95% 659,100,195 20.98%SLO Promenade Limited Partnership 1167,457,357 40.80%Irish Hills Plaza West II LLC649,605,987 50.59% 233,899,291 30.56%DS Marigold843,550,000 60.52% 925,016,374 90.42%Charles Pasquini Jr Trust343,040,756 70.51% 533,666,819 40.73%Costco Wholesale Corporation135,463,872 80.42% 132,194,693 60.54%Bre Atlas Property Owner LLC132,569,822 90.39%Target Corporation130,998,323 100.37%CSHV Mustang Village474,976,905 11.25%JM Wilson Promenade Properties II LLC1032,700,000 50.54%Charter Communications Properties319,280,909 70.32%John E. and Carole D. King525,016,417 80.42%De Tolosa Ranch LLP122,408,500 100.37% Total588,350,672$ 6.99%358,260,103$ 6.13%Source: HDL CAFR 2018-19 report - 2018-19 and 2009-10 Top Ten Property Taxpayers tables.2018-192009-10Schedule 9City of San Luis Obispo, CaliforniaPrincipal Property Tax Payers Current Year and Nine Years Ago154
Schedule 1Total Secured Current Year PercentFiscal Tax Levy Current Year Percent Delinquencies DelinquentYear (Notes 1 and 2) Collections Collected (Note 3) (Note 3)2009-10 8,456,800 8,456,800 100% 0 02010-11 8,405,600 8,405,600 100% 0 02011-12 8,269,300 8,269,300 100% 0 02012-13 8,151,000 8,151,000 100% 0 02013-14 8,601,630 8,601,630 100% 0 02014-15 9,097,280 9,097,280 100% 0 02015-16 9,707,340 9,707,340 100% 0 02016-17 10,250,205 10,250,205 100% 0 02017-18 10,868,920 10,868,920 100% 0 02018-19 11,648,706 11,648,706 100% 0 0Notes:1. The secured property tax roll is composed of ad valorem taxes as well as special assessments, and is calculated by the San Luis Obispo County Auditor-Controller. The San Luis Obispo County Tax Collector is responsible for all property tax roll collections within the City of San Luis Obispo. The amount reported is before the SB2557 County administrative fees of approximately 3% of total property tax revenues.2. The secured levy does not include supplemental assessments, unsecured tax revenues, or prior year adjustments, which can be significant. For example, in 2012-13 revenue to the City from supplemental assessments was $99,500 and $215,100 from unsecured. A one-time refund was received from the County Auditor-Controller, refunding $632,800 representing prior overcharges for the SB2557 fee. Property tax revenues totaled $8,740,762.3. The City has elected the Teeter Plan method of property tax collection, whereby the County remits 100% of taxes levied and pursues collection and retains any delinquent taxes and related penalties and interest.Source: San Luis Obispo County Auditor-Controller - 2017-18 Property Tax Estimates and Delinquencies ReportSchedule 10City of San Luis Obispo, CaliforniaSecured Property Tax Roll Levies and CollectionsLast Ten Fiscal Years155
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Sales In Thousands of DollarsApparel stores 64,790$ 69,554$ 70,240$ 71,723$ 73,170$ 73,241$ 75,037$ 72,522$ 74,300$ 72,735$ General merchandise stores122,039 123,307 148,869 171,667 173,940 179,551 182,530 179,478 182,184 179,353Food and drug stores40,128 38,209 39,565 39,704 40,638 41,985 43,799 43,473 46,065 47,138Eating & drinking palces119,419 119,491 127,627 142,844 147,953 159,828 172,341 178,362 184,366 184,909Building materials & farm tools 92,373 92,126 102,999 111,633 126,123 133,143 140,258 142,370 159,569 162,295Auto dealers & supplies161,347 178,594 193,085 227,510 269,602 287,880 304,905 306,812 319,977 323,272Service stations70,810 84,354 103,659 107,588 103,094 101,510 88,116 78,033 83,481 94,320Other retail stores246,968 247,854 256,828 263,571 262,668 267,764 277,591 282,844 278,792 279,760 Total retail stores917,874 953,489 1,042,872 1,136,240 1,197,188 1,244,902 1,284,577 1,283,894 1,328,734 1,343,782All other outlets231,728 242,792 286,156 278,271 293,532 311,225 359,242 363,023 372,575 431,884 Total 1,149,602 1,196,281 1,329,028 1,414,511 1,490,720 1,556,127 1,643,819 1,646,917 1,701,309 1,775,666 Source: State Board of Equalization, State of California Taxable Sales in California, and the HDL CAFR 2018-19 report - Taxable Sales by Category table.Schedule 11City of San Luis Obispo, CaliforniaSchedule of Taxable Sales and Permits by CategoryLast Ten Calendar Years156
Effective End StateLocalCity CombinedDateDateJurisdiction Transportation Fund RateRate8/1/1933 6/30/1935 (Note 2) 2.50%2.50%7/1/1935 6/30/19433.00%3.00%7/1/1943 6/30/19492.50%2.50%7/1/1949 12/31/19613.00%3.00%1/1/1962 7/31/19673.00%1.00%4.00%8/1/1967 6/30/19724.00%1.00%5.00%7/1/1972 6/30/19733.75%0.25% 1.00%5.00%7/1/1973 9/30/19734.75%0.25% 1.00%6.00%10/1/1973 3/31/19743.75%0.25% 1.00%5.00%4/1/1974 11/30/19894.75%0.25% 1.00%6.00%12/1/1989 12/31/19905.00%0.25% 1.00%6.25%1/1/1991 7/14/19914.75%0.25% 1.00%6.00%7/15/1991 12/31/20006.00%0.25% 1.00%7.25%1/1/2001 12/31/20015.75%0.25% 1.00%7.00%1/1/2002 6/30/20046.00%0.25% 1.00%7.25%7/1/2004 3/31/2007 (Note 3) 6.25%0.25% 0.75% (Note 3) 7.25%4/1/2007 3/31/20096.25%0.25% 1.25% (Note 4) 7.75%4/1/20097.25%0.25% 1.25%8.75%7/1/20116.25%0.25% 1.25%7.75%1/1/20137.25%0.25% 0.50%8.00%1/1/20147.25%0.25% 0.50%8.00%1/1/20157.25%0.25% 0.50%8.00%1/1/20167.25%0.25% 0.50%8.00%1/1/20177.00%0.25% 0.50%7.75%1/1/20187.00%0.25% 0.50%7.75%1/1/20197.00%0.25% 0.50%7.75%Notes:1. The Bradley-Burns Uniform Local Sales and Use Tax Law was enacted in 1955. The law authorizes cities and counties to impose a sales and use tax. Effective January 1, 1962, all cities and counties have adopted ordinances for the State Board of Equalization to collect the local tax. 2. Sales tax only. The use tax was enacted effective July 1, 1935.3. In March 2004, a State ballot measure was passed issuing deficit reduction bonds for State purposes. Funding was provided effective July 1, 2004 by repealing 25% of the local 1% sales tax and then adopting a new 1/4-cent sales tax dedicated to repayment of the deficit reduction bonds. Cities and counties would then be "made whole" by the State from increased property tax allocations via reduced contributions to ERAF. This "triple flip" is theoretically revenue-neutral, and as such, the effective rate for revenue purposes remains at 1%.4. In November 2006, voters in San Luis Obispo approved a local sales tax measure increasing the City rate by 1/2%, which became effective April 1, 2007. The sales tax measure has a sunset provision of 8 years. The local Sales Tax was extended as Measure G in the November 2014 election for 8 years.5. Proposition 30, The Schools and Local Public Safety Protection Act of 2012, was approved by California voters in November 2012 to temporarily increase the sales and use tax by 0.25%. The sales and use tax imposed by Proposition 30 expired December 31, 2016.Source: State Board of Equalization, State of CaliforniaSchedule 12City of San Luis Obispo, CaliforniaHistorical Sales and Use Tax Rates157
No. of No. of Certificates Percent Certificates PercentConstruction1,056 12.9%993 12.1%Manufacturing167 2.0%165 2.0%Transportation/Utilities36 0.4%40 0.5%Wholesale138 1.7%138 1.7%Retail1,064 13.0% 1,087 13.2%Professional1,098 13.4% 1,059 12.9%Residential Rental2,252 27.4% 2,338 28.4%Commercial Rental301 3.7%311 3.8%Services2,093 25.5% 2,099 25.5% Total business certificates issued8,205 100% 8,230 100%Home occupations 762 9.3%751 9.1%Located outside City limits1,948 23.7% 1,872 22.7%Located in Downtown Business Improvement District620 7.6%628 7.6%Source: City of San Luis Obispo Finance Department - Revenue Division20182019Schedule 13City of San Luis Obispo, CaliforniaSchedule of Business Tax Certificates Issued Fiscal Years Ended June 30, 2019 and 2018158
Percentage ofFiscal Lease Purchase Lease Purchase Installment Total Primary Per Gross AssessedYear Bonds Financing Loans Bonds Financing Sales Agreement Loans Government Capita Value2009-10 28,448,900 161,400 33,946,100 872,900 1,950,000 28,554,000 93,933,300 2,090 1.49%2010-11 26,806,500 1,109,800 32,503,500 593,500 1,845,000 25,807,000 88,665,300 1,973 1.41%2011-12 24,962,100 955,900 30,082,900 302,300 1,735,000 22,976,300 81,014,500 1,788 1.31%2012-13 23,574,900 823,400 2,025,100 28,625,150 - 1,620,000 20,309,200 76,977,750 1,690 1.23% 2013-14 22,152,010 711,622 850,775 27,083,025 - 8,979,000 19,446,784 79,223,216 1,742 1.27%2014-15 28,556,715 1,127,606 766,092 25,983,320 - 8,481,043 18,559,851 83,474,627 1,836 1.28%2015-16 27,762,893 1,374,773 679,314 25,323,405 - 7,932,327 17,647,622 80,720,334 1,741 1.16%2016-17 26,328,540 1,898,652 591,647 24,072,708 - 7,366,468 16,709,160 76,967,175 1,660 0.99%2017-18 23,484,450 1,599,769 503,101 21,815,204 - 6,783,114 15,743,808 69,929,446 1,497 0.91%2018-19 22,171,441 1,413,937 413,667 19,542,657 - 6,181,902 14,750,783 64,474,387 1,385 0.79%Sources:City of San Luis Obispo Finance DepartmentSchedule 14City of San Luis Obispo, CaliforniaPer Capita Outstanding Debt By TypeLast Ten Fiscal YearsGovernmental ActivitiesBusiness-Type Activities159
ServiceRatio of NetNet Taxable General Payable from Net Bonded Debt Net BondedAssessed Bonded Enterprise Bonded to Assessed Debt perFiscal Year Population Value Debt Revenues Debt Value Capita2009-1044,829 6,291,559,200 00 00.0%02010-1144,948 6,270,234,200 00 00.0%02011-1245,308 6,176,832,100 00 00.0%02012-1345,541 6,261,931,900 00 00.0%02013-1445,473 6,467,600,400 00 00.0%02014-1545,484 6,814,727,785 00 00.0%02015-1646,117 7,275,544,122 00 00.0%02016-1746,724 7,702,282,828 00 00.0%02017-1846,548 8,179,683,454 00 00.0%02018-1946,802 9,052,361,899 00 00.0%0Notes:1. Valuations are established by the County Assessor of the County of San Luis Obispo, except for property owned by private utility companies, which is valued by the State of California.2. See Schedule of Demographic and Economic Statistics for population data. 3. Personal income information is not available. Net Bonded Debt is expressed as a ratio to Assessed Value. Sources: HDL CAFR 2018-19 report - Demographic and Economic Statistics table.Demographics changed from FY to Calendar YearSchedule 15City of San Luis Obispo, CaliforniaRatio of Net General Bonded Debt to Assessed Value and Net Bonded Debt per CapitalLast Ten Fiscal Years160
Amount ApplicablePercent Applicable to the City ofto the City ofSan Luis ObispoSan Luis Obispoas of June 30, 2019Direct long-term debt: City of San Luis Obispo 2001 Refunding Lease Revenue Bonds (1999)100.000%-$ City of San Luis Obispo 2002 Water Revenue Refunding Bonds (1993)100.000%- City of San Luis Obispo 2004 Refunding Lease Revenue Bonds (1994) 100.000%- City of San Luis Obispo 2005 Refunding Revenue Bonds (1996)100.000%- City of San Luis Obispo 2006 Lease Revenue Bonds100.000%- City of San Luis Obispo 2018 Water Revenue Refunding Bonds100.000%9,640,000$ City of San Luis Obispo 2009 Lease Revenue Bonds100.000%- City of San Luis Obispo 2012 Refunding Revenue Bonds (2001)100.000%3,480,000 City of San Luis Obispo 2012 Water Revenue Refunding Bonds (2002)100.000%2,070,000 City of San Luis Obispo 2014 LOVR Lease Revenue Bonds 100.000%6,970,000 City of San Luis Obispo 2018 Lease Revenue Bonds 15,655,000 Total gross direct debt37,815,000Less self-supporting issues: City of San Luis Obispo 2018 Water Revenue Refunding Bonds9,640,000 City of San Luis Obispo 2012 Water Revenue Refunding Bonds (2002)2,070,000 Total self-supporting issues11,710,000 Total net gross direct debt26,105,000$ Overlapping long-term debt (percentage of overlapping agency's assessed valuation located within boundaries of the City): San Luis Obispo County General Fund Obligations16.170%3,693,691 San Luis Obispo County Pension Obligations16.170%13,596,555 City of San Luis Obispo Lease Revenue Bonds100.000%26,105,000 Total gross overlapping long-term debt43,395,246Less: City of San Luis Obispo obligations supported by enterprise revenues5,400,975 Total net overlapping long-term debt37,994,271Ratio of long-term debt to assessed valuation and populationGross Assessed Valuation9,052,361,899$ Population46,802Percent of GrossPer CapitaAmountAssessed ValuationLong-Term DebtOverlapping Debt:Gross$43,395,2460.5%$927.21Net37,994,2710.4%812Direct Debt:Gross37,815,000 0.4%$807.98Net26,105,0000.3%558SOURCE: California Municipal Statistics, Inc. HDL CAFR report.Schedule 16City of San Luis Obispo, CaliforniaDirect and Overlapping Long-Term DebtFiscal Year Ended June 30, 2019161
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19Legal debt limit235,815$ 234,887$ 231,384$ 234,822$ 241,812$ 244,175$ 272,833$ 288,836$ 306,738$ 339,464$ Total debt applicable to limit- Legal debt margin235,815 234,887 231,384 234,822 241,812 244,175 272,833 288,836 306,738 339,464 Total debt applicable to the limitas a percentage of debt limit 0.00%0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%0.00%Legal Debt Margin Calculation for Fiscal Year 2018-19Gross Assessed Valuation9,052,361,899$ Legal Debt Limit - 3.75% of Gross Assessed Valuation339,463,571$ Long-term Debt:Revenue Bonds Secured by Capital Leases 26,105$ Water Revenue Bonds27,365$ 53,470Less deductions allowed by law:Revenue Bonds Secured by Capital Leases26,105Water Revenue Bonds27,36553,470Total debt applicable to computed limit$0Legal debt margin339,463,571$ Note: The California Government Code provides for a legal debt limit of 15% of gross assessed valuation based on 25% of market value, or a legal debt limit of 3.75%. The City's debt management policy, however, sets a more restrictive debt limit of 2% of assessed valuation. Schedule 17City of San Luis Obispo, CaliforniaComputation of Legal Debt MarginLast Ten Fiscal Years(Amounts Expressed in Thousands)162
LessOperating & Net RevenueCoverage Fiscal Operating Development Other Maintenance Available forWith Year Revenues Impact Fees Revenues Expenses Bond Debt Service Principal InterestTotal Coverage Impact Fees2008-09 13,447,400$ (663,000)$ 1,339,700$ (7,877,500)$ 6,246,600$ 1,420,300$ 1,200,368$ 2,620,668$ 238% 264%2009-10 13,755,800 (448,200) 719,800 (7,603,500) 6,423,900 1,078,960 1,171,884 2,250,844 285% 305%2010-11 14,256,100 (639,600) 384,500 (12,389,200)1,611,800 1,107,790 1,137,021 2,244,811 72% 100%2011-12 16,266,300 (643,200) 825,400 (13,666,100)2,782,400 1,146,885 1,137,445 2,284,330 122% 150%2012-13 18,250,700 (1,578,100) 97,500 (13,353,300)3,416,800 1,096,215 995,419 2,091,634 163% 239%2013-14 19,676,199 (819,477) 215,915 (13,996,427)5,076,210 1,160,700 964,148 2,124,848 239% 277%2014-15 20,552,417 (2,471,501) 59,594 (13,451,298)4,689,212 1,285,686 906,775 2,192,461 214% 327%2015-16 20,137,422 (1,543,268) 53,731 (14,056,603)4,591,282 1,245,486 881,318 2,126,804 216% 288%2016-17 19,873,517 (1,266,674) 410,484 (14,754,114)4,263,213 1,290,748 837,657 2,128,405 200% 260%2017-18 21,997,054 (2,131,345) 325,268 (16,250,751)3,940,226 1,336,267 792,337 2,128,604 185% 285%2018-19 23,992,758 (3,745,666) 948,324 (15,995,459)5,199,957 2,281,739 858,471 3,140,210 166% 285%Notes:2. The City refinanced its 2005 Refunding Lease Revenue Bonds, 2006 Lease Revenue Bonds, and 2009 Lease Revenue Bonds into the 2018 Lease Revenue Bonds.4. Net revenues available for debt service exclude development impact fees. 5. Operating expenses exclude depreciation and amortization.Source: City of San Luis Obispo Utilities DepartmentSchedule 18City of San Luis Obispo, CaliforniaRevenue Bond Coverage - Water FundLast Ten Fiscal Years3. Principal and interest amounts do not include the subordinate private placement loan retired in 2013. Bonded Debt Service Requirements1. Debt service requirements include 2012 Refunding Revenue Bonds, 2006 Refunding Revenue Bonds, and the 2004 state revolving loan163
Net RevenueFiscal Gross Operating Available forYear Revenues Expenses Bond Debt Service Principal Interest Total Coverage2009-10 3,788,300 (2,142,400) 1,645,900 599,600 449,200 1,048,800 157%2010-11 3,730,100 (2,190,200) 1,539,900 621,800 428,700 1,050,500 147%2011-12 3,688,200 (2,351,400) 1,336,800 642,600 408,100 1,050,700 127%2012-13 4,726,000 (2,440,600) 2,285,400 663,500 386,000 1,049,500 218%2013-14 4,122,860 (2,488,797) 1,634,063 690,600 361,822 1,052,422 155%2014-15 4,905,494 (2,409,027) 2,496,467 447,962 504,407 952,369 262%2015-16 4,606,249 (2,757,299) 1,848,950 466,185 501,631 967,816 191%2016-17 4,659,562 (2,671,028) 1,988,534 481,981 487,407 969,388 205%2017-18 6,651,038 (2,998,555) 3,652,483 498,058 469,314 967,372 378%2018-19 5,443,038 (3,100,113) 2,342,925 672,346 353,790 1,026,136 228%Notes:1. In 1994 the Capital Improvement Lease Revenue Bonds were refinanced resulting in new debt of $11,780,000, of which $7,421,400 is designated for the Parking Fund. In 2004 the 1994 bonds were refinanced with a maturity date of 2014. In 2006 Lease Revenue Bonds were issued resulting in new debt of $16,160,000, of which $8,726,400 is allocated to the Parking Fund.3. Operating expenses exclude depreciation.Source: City of San Luis Obispo Finance Department. 2. The City refinanced its 2005 Refunding Lease Revenue Bonds, 2006 Lease Revenue Bonds, and 2009 Lease Revenue Bonds into the 2018 Lease Revenue Bonds.Bonded Debt Service RequirementsSchedule 19City of San Luis Obispo, CaliforniaRevenue Bond Coverage - Parking FundLast Ten Fiscal Years164
PersonalPublic Elementary and Cuesta CollegeCalendarIncome Median Secondary School Full Time Enrollment Unemployment Year Population (1) in 000's (1) Age (1) Enrollment (2)SLO Campus (3) Rate (1)200944,829 1,143 27.0 7,112 6,943 9.9%201044,948 1,078 23.4 7,226 6,641 11.2%201145,308 1,178 24.5 7,402 6,187 10.2%201245,541 1,163 24.5 7,368 5,651 6.7%201345,473 1,242 25.3 7,366 5,751 5.7%201445,484 1,191 25.0 7,636 5,116 5.9%201546,117 1,211 25.0 7,638 5,402 4.9%201646,724 1,270 25.4 7,718 4,757 4.5%201746,548 1,300 26.1 7,755 4,988 3.2%201846,802 1,398 26.5 7,813 4,515 2.5%Sources:1. HDL 2018-19 CAFR report - Demographic and Economic Statistics table.2. CA Dept of Education DataQuest: Enrollment Reports, by Academic Year start date3. https://www.cuesta.edu/about/depts/research/Enrollment_Management.html Post Term FTES Dashboard, 320 Year Reported by academic year start dateSchedule 20City of San Luis Obispo, CaliforniaDemographic and Economic StatisticsFor The Last Ten Calendar Years165
PercentagePercentageNumberof Total CityNumberof Total CityEmployerEmployees Rank EmploymentEmployees Rank EmploymentCal Poly State University3,000 1 11.95%1,382 23.79%County of San Luis Obispo2,920 2 11.63%2,939 18.06%Dept of State Hospitals - Atascadero2,000 37.97%P.G. & E (Diablo Canyon)1,866 47.43%1,200 33.29%California Men's Colony1,517 56.04%Tenet Health Care Corp.1,305 65.20%Compass Health1,200 74.78%Lucia Mar Unified School District1,000 83.98%MindBody929 93.70%San Luis Coastal Unified School District760 10 3.03%Cuesta Community College800 42.19%Sierra Vista Regional Medical Center800 52.19%French Hospital490 61.34%City of San Luis Obispo358 70.98%Madonna Inn 300 80.82%Steno-Wolf Associates300 90.82%Apple Farm250 10 0.69%Total16,49765.73%8,81924.17%Note: Source for the 2018-19 employers information is San Luis Obispo Chamber of Commerce. This information represents employers in San Luis Obispo community. 2009-10 data is from the City's CAFR. 2009-102018-19Schedule 21City of San Luis Obispo, CaliforniaPrincipal EmployersCurrent Year and Nine Years Ago166
Function2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19Public Safety Police Sworn59.0 59.0 57.0 57.0 60.0 60.0 61.0 61.0 61.5 61.5 Non-sworn27.5 27.5 26.5 25.5 25.5 25.5 25.5 25.5 24.0 24.0 Fire Sworn44.0 44.0 44.0 44.0 49.0 49.0 50.0 47.0 47.0 47.0 Non-sworn9.8 9.0 7.8 6.8 4.0 4.0 4.0 10.0 10.0 10.0Public Utilities63.8 63.8 60.9 61.9 64.8 64.8 67.1 69.1 69.1 69.1Transportation30.0 29.2 31.8 31.8 28.9 28.9 36.8 36.8 210.8 84.3Leisure, Cultural and Social Services33.0 33.0 32.0 32.0 34.0 34.0 35.0 35.0 34.0 18.0Community Development37.3 37.3 42.8 43.8 39.5 40.0 51.0 51.0 32.4 32.9General Government54.8 54.8 50.5 52.2 56.0 56.0 57.0 61.0 45.5 46.8Total359.2 357.6 353.3 355.0 361.7 362.2 387.4 396.4 534.3 393.6Ratio of Sworn Police Personnel per 1,000 Population:* 1.31 1.30 1.26 1.25 1.32 1.32 1.33 1.31 1.31 1.31 Ratio of Sworn Fire Personnel per 1,000 Population:* 0.98 0.97 0.97 0.97 1.08 1.08 1.06 1.01 1.00 1.00*Does not include the Cal Poly student and faculty population served.Note: See Schedule of Demographic and Economic Statistics for population data.Source: City of San Luis Obispo Finance DepartmentSchedule 22City of San Luis Obispo, CaliforniaRegular Authorized PositionsLast Ten Fiscal Years167
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19Function/Program:Police:Calls for police/fire service32,057 32,074 34,751 36,236 34,659 36,515 38,300 39,620 39,103 37,825 Incident numbers issued27,555 27,595 29,991 31,156 29,277 31,048 32,542 33,360 32,730 31,471 Police reports written7,454 7,661 8,322 9,192 8,665 8,435 8,852 8,675 7,735 6,999 Violations cited8,471 5,939 8,119 7,213 5,793 6,648 7,673 7,649 7,524 5,874 Citations issued7,398 5,380 7,718 6,665 5,275 6,204 7,038 7,030 6,752 5,287 Collision reports718 728 669 643 625 630 587 608 609 623 Violent crimes:**140 126 134 117 158 237 173 177 178 191 Willful homicide**2 1 000001 Forcible rape**30 27 24 18 31 44 29 38 44 55 Robbery**39 35 34 19 26 25 13 21 23 33 Aggravated assault**71 64 74 79 101 168 131 118 111 103 Property crimes:**620 640 714 804 713 542 637 731 644 728 Burglary**324 372 330 414 328 206 225 251 172 244 Motor vehicle theft**68 54 107 81 63 71 87 95 94 74 Larceny-theft:**1,240 1,260 1,345 1,476 1,384 1,162 1,335 1,730 1,516 1,493 Over $400**228 214 277 309 322 265 325 385 378 410 $400 and under**1,012 1,046 1,068 1,167 1,062 897 1,010 1,345 1,138 1,083 Fire:Medical responses***(Note 4)3,325 2,799 2,856 2,985 3,232 3,4173,540 4,5384,2483,715Fire suppression responses***(Note 4)133 101 102 95 105 111151143163122Hazardous materials responses***(Note 4)36 23 17 21 15 2122211725Other responses***(Note 4)1,224 1,528 1,552 1,812 1,840 1,9292,158 1,7991,7852,100 Total service responses***4,718 4,451 4,527 4,913 5,192 5,4785,871 6,5016,2135,962Fire and life-safety inspections***1,110 2,489 2,431 2,494 644 2,4762,516 3,7563,7382,002Arson investigations***47 22 18 49 44 174481224Education activities (# of people)***14,000 20,106 23,120 23,377 23,945 23,697 23,680 23,575 23,5402,690Schedule 23City of San Luis Obispo, CaliforniaOperating Indicators and Capital Asset Statistics by FunctionLast Ten Fiscal Years168
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19Schedule 23City of San Luis Obispo, CaliforniaOperating Indicators and Capital Asset Statistics by FunctionLast Ten Fiscal YearsPublic Utilities:Water/Sewer customer accounts 14,875 14,734 14,695 14,742 14,899 14,953 15,167 15,188 15,505 15,555Miles of sewerline 137 137 137 137 197 139.6 138 143 143Miles of waterline 182 185 185 187 187 *187 191 197 187 190Water service line repairs and renewals***** 95 86 50 66 58 60 50 50 57 38Sewer main stoppages 10 9 7 12 15 13 11 4 10Acre feet of water delivered - Nacimiento 981 2,321 663 1,506 839 3,574 3,817 3,753 3,484 Acre feet of water delivered - Salinas 2,736 2,640 2,149 2,378 1,444 1,986 8 273 853 790Acre feet of water delivered - Whale Rock 3,402 1,277 2,875 3,212 2,615 1,375 949 924 800Transportation:Signals and lights: Intersections with traffic signals 60 67 70 68 70 70 70 70 Traffic signal service requests 100 80 85 80 85 90 60 71 Streetlights operated & maintained 220 2,230 2,300 2,300 2,300 2,300 2,280 2,280 Streetlight service requests 285 500 180 175 45 50 13 8Parking spaces: Estimated miles of paved streets 125 130 132 132 133 133 133 133 134 197 Pavement condition index 73 74 72 71 72 72 71 71 70 73 Number of street lights 2,179 2,270 2,270 2,270 2,300 2,300 2,300 2,300 2,280 2,280 Traffic collisions 708 597 621 593 660 720 531 482 623 Parking spaces provided (lot, garage & street) 3,059 3,067 3,065 3,071 3,119 3,176 2,953 2,892 2,871 2,865 Parking citations written30,087 30,278 26,515 28,690 23,957 20,690 24,21323,34821,647 24,415 Total transit passengers1,019,852 1,045,299 1,118,519 1,109,600 1,122,000 1,099,274 1,209,708 1,131,716 945,288 981,995
169
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19Schedule 23City of San Luis Obispo, CaliforniaOperating Indicators and Capital Asset Statistics by FunctionLast Ten Fiscal YearsLeisure, Cultural and Social Services:Open space acres maintained 3,420 3,420 3,510 3,510 3,510 3,510 3,510 3,510 3,775 4,040Open space easement acres 3,161 161 3,200 3,200 3,200 3,200 3,200 3,200 3,200 3,500Trail mileage 40 40 45 47 49 49 52 52 55 55Total golf rounds played 34,376 32,228 34,699 33,067 34,766 33,674 30,572 28,196 35,670 24,662Acres of park landscape maintained 157 157 157 157 157 157 157 157 500 570Trees in City jurisdiction 17,779 18,700 18,700 18,700 18,700 19,000 20,000 20,000 20,000 20,000Children's services enrollment totals 900 1,664 1,755 1,605 2,338 2,360 2,115 2,115 1,950 2,050Triathlon: participants, spectators and volunteers****** 6,700 5,400 6,000 6,525 6,000 5,500 5,200 5,000 887 869Annual senior attendance (total)****** 14,250 14,500 14,000 14,200 * * * 265 331 350Facility permits processed 1,971 1,806 1,803 1,269 1,416 836 1,305 1,073 864 909Annual aquatics attendance (total) 60,052 56,676 56,042 67,000 73,903 83,107 68,403 96,687 97,701 87,690Adult athletic teams registered 255 245 320 325 338 320 325 325 362 292Youth athletic participants registered 1,650 1,320 1,400 1,300 1,200 1,350 1,300 1,150 1,115 1,140Special event applications processed 57 68 78 84 103 103 77 101 88 95 Banner permits processed 65 72 86 76 82 47 87 56 45 81Instructional class enrollments 1,837 1,628 1,400 1,308 1,424 1,751 1,151 1,724 1,439 1,118
170
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19Schedule 23City of San Luis Obispo, CaliforniaOperating Indicators and Capital Asset Statistics by FunctionLast Ten Fiscal YearsCommunity Development:Housing characteristics: Single family units 10,808 10,951 10,969 10,994 11,133 11,230 11,306 11,413 11,413 2-4 units 2,350 2,634 2,650 2,656 2,692 2,695 2,789 2,851 2,851 5 or more unit structures 5,702 5,596 5,596 5,647 5,767 5,804 6,038 6,097 6,097 Mobile homes 1,534 1,482 1,482 1,482 1,482 1,482 1,482 1,482 1,482 Total 20,394 - 20,663 20,697 20,779 21,074 21,211 21,615 21,843 21,843 Housing units (replaces above categories)20,578 Households (replaces above categories)1,361 Building permits issued (Note 1):438 442 463 566 511 597 584 584 623 758 Residential: Single family residential (Note 2)16 7 13 48 59 114 97 62 125 541 Multi-family residential5 3 10 6 8 32 5 13 18 228 Non-residential1 7 5 7 9 27 13 14 10 6 Other permits: Additions, alternations, demolitions (Note 4)416 499 459 530 458 460 522 545 502 187 Other improvements Total438 516 487 591 534 1,230 1,221 1,218 1,278 Approximate value of building permits (in thousands)118,000 Residential: Single family residential 4,424$ 6,085$ 3,278$ 15,698$ 15,412$ 36,722$ 26,441$ 16,340$ 23,094$ 99,210$ Multi-family residential2,528 926 3,847 1,560 6,744 26,499 13,500 15,022 16,094 43,338 Non-residential525 16,608 5,142 1,935 15,310 9,791 11,484 56,308 9,703 9,703 Other permits: Additions, alternations, demolitions (Note 4)26,464 15,948 16,589 20,761 19,139 22,897 30,230 24,787 30,686 83,246 Other improvements Total33,941$ 39,567$ 28,856$ 39,954$ 56,605$ 95,909$ 81,655$ 112,457$ 79,577$ 235,497$ Building inspections conducted8,359 10,210 13,685 10,543 8,996 6,641 7,195 10,745 9,974 7,537 Home occupation permits processed146 126 117 142 129 113 163 144 112 112 Development permit applications received194 172 148 217 311 293 253 236 215 215 171
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19Schedule 23City of San Luis Obispo, CaliforniaOperating Indicators and Capital Asset Statistics by FunctionLast Ten Fiscal YearsGeneral Government:Business tax certificates issued: Located outside city limits 1,548 1,569 1,670 1,670 1,472 1,602 2,018 1,699 - 1,918 Total certificates issued7,090 6,873 7,086 7,086 6,934 7,805 7,597 8,118 - 8,044 Human resources recruitments (total)46 42 59 91 105 129 103 103 97 99 Fleet vehicles maintained301 City-wide fleet & equipment assets290 290 290 290 300 318 323 339 338 Replaces prior categoryTelephone lines managed1,003 1,003 1,024 981 995 1,037 1,005 998 907 971 Cell phones supported****348 351 338 344 383 460 453 476 492 481 IT users supported450 450 498 498 490 511 515 467 471 488 * Data Not Available** Data from California Department of Justice based on calendar year*** Data is based on calendar year**** Includes cellular modems (70) (90 for 11-12)***** The 2013-14 amount now includes recycled waterline.******The FY 2017-18 amount only includes Triathlon participants and volunteers*******Starting in FY 2016-17, the amount only includes senior center membershipNotes: Some workload indicators are projections.1. Excludes special permits such as plumbing, mechanical, electrical, signs, and grading as well as plan check permits.2. Condominiums are included with single family residential.3. Swimming pools are included with additions, alterations and demolitions.4. In Fiscal year 2010-11, numbers reported used observed code from Spillman rather than condition code. Source: City of San Luis Obispo Departments172
Fiscal HistoricIncrease/Sales Increase/ Deliveries Increase/Year Connections (Decrease) Revenues (Decrease) In Acre Feet (Decrease)2009-10 14,8752.64%13,025,900 4.65%5,612-11%2010-11 14,777-0.66%13,302,800 2.13%5,9095%2011-12 14,537-1.62%15,291,008 14.95%5,9992%2012-13 14,7581.52%16,163,012 5.70%5,823-3%2013-14 14,8990.01%18,398,901 13.83%5,9332%2014-15 14,8470.01%17,530,717 -4.72%5,354-10%2015-16 15,1671.40%17,939,024 2.33%4,957-7%2016-17 15,3571.25%18,196,937 1.44%5,0392%2017-18 15,5050.01%19,159,169 5.29%5,53010%2018-19 15,5550.01%19,577,182 2.18%5,074-8%Source: City of San Luis Obispo Utilities Department. Schedule 24City of San Luis Obispo, CaliforniaWater SystemStatistical Data173
As ofMonthlyMulti-family dwellingCommercialLandscapeSingle family Multi-family dwellingJune 30 of Each YearConsumption Price per hcf*dwellingCommercial20100-5 hcf$4.69$6.00 min. charge per$6.00 min. charge per$6.00 min. charge per6-25 hcf$5.87dwelling unitaccountaccount26 + hcf (note 2)$7.36$6.63/unit volume charge ** $6.63/unit volume charge**$6.63/unit volume charge20110-5 hcf$5.21$6.55 min. charge per$6.55 min. charge per$6.55 min. charge per6-25 hcf$6.52dwelling unitaccountaccount26 + hcf (note 2)$8.17$7.22/unit volume charge ** $7.22/unit volume charge **$7.22/unit volume charge20120-5 hcf$5.73$7.01 min. charge per$7.01 min. charge per$7.01 min. charge per6-25 hcf$7.17dwelling unitaccountaccount26 + hcf (note 2)$8.99$7.73/unit volume charge ** $7.73/unit volume charge **$7.73/unit volume charge2013Base Fee$5.00$7.43 min. charge per$7.43 min. charge per$7.43 min. charge per0-8 hcf$6.25dwelling unitdwelling unitdwelling unit8 + hcf $7.82$8.19/unit volume charge ** $8.19/unit volume charge **$8.19/unit volume charge2014Base Fee$5.28$7.73 min. charge per$7.73 min. charge per$7.73 min. charge per1-8 hcf6.56dwelling unitdwelling unitdwelling unit8 + hcf8.20$8.52/unit volume charge** $8.52/unit volume charge**$8.52/unit volume charge2015Base Fee$9.98$7.96 min. charge per$7.96 min. charge per$7.96 min. charge per1-8 hcf6.92dwelling unitdwelling unitdwelling unit8 + hcf8.65$8.77/unit volume charge** $8.77/unit volume charge**$8.77/unit volume charge2016Base Fee$9.98$8.32 min. charge per$8.32 min. charge per$8.32 min. charge perBase Fee Drought Surcharge 0.74dwelling unitdwelling unitdwelling unit1-8 hcf6.92$9.17/unit volume charge** $9.17/unit volume charge**$9.17/unit volume chargeDrought Surcharge1.109 + hcf8.65Drought Surcharge1.372017Base Fee$9.98$8.57 min. charge per$8.57 min. charge per$8.57 min. charge perBase Fee Drought Surcharge 0.74dwelling unitdwelling unitdwelling unit1-8 hcf6.92$9.44/unit volume charge** $9.44/unit volume charge**$9.44/unit volume chargeDrought Surcharge1.109 + hcf8.65Drought Surcharge1.372018Base Fee$12.33$8.57 min. charge per$8.57 min. charge per$8.57 min. charge per1-8 hcf7.27dwelling unitdwelling unitdwelling unit9 + hcf9.08$9.44/unit volume charge** $9.44/unit volume charge**$9.44/unit volume charge2019***Residential SFR Base Fee $20.61 Base fee determined Base fee determined Base fee determinedBase fee determinedBase fee determinedBase fee determined1-5 hcf5.9by meter size**** by meter size**** by meter size****by meter size ****by meter size ****by meter size ****6-12 hcf6.87 $6.73/unit volume charge $8.17/unit volume charge $10.02/unit volume charge $7.85/unit volume charge** $7.85/unit volume charge** $7.85/unit volume charge**13 +12.59*hcf = 100 cubic feet** Total monthly volume charge capped based on average winter water consumption.*** Beginning FY 18-19, different rate structures for SFR, Multi-Family, Commercial, and Landscape****See table below Notes:1. Rates are for services inside the City, outside the City rates are double.2. Third tier applies only to single-family residential customers. Source: City of San Luis Obispo Utilities DepartmentSchedule 25City of San Luis Obispo, CaliforniaWater and Sewer RatesLast Ten Fiscal YearsWater Rates (Note 1)Sewer Rates (Monthly)174
Service Water Use Percent of Name Type (acre-feet) TotalCity of San Luis Obispo Parks Landscape 129.98 29.6%Mustang Village Apartments 60.37 13.7%Silver City Mobile Home Park Mobile Homes 46.09 10.5%Laguna Lake Mobile Homes Mobile Homes 37.75 8.6%Sierra Vista Hospital Care Facilities 33.28 7.6%Irish Hills Hamlet Apartments 34.66 7.9%SLO Coastal Unified School District School 24.21 5.5%Creekside Mobile Homes Mobile Homes 27.01 6.2%Embassy Suites Hotel 23.98 5.5%Chumash Village Mobile Homes 21.78 5.0%Total 439.1 100.00%Source: City of San Luis Obispo - Utilities DepartmentSchedule 26City of San Luis Obispo, CaliforniaWater System - Ten Largest Water UsersFiscal Year Ended June 30, 2019175