HomeMy WebLinkAboutItem 10 - COUNCIL READING FILE_a_Comprehensive Annual Financial Report 2020COMPREHENSIVE ANNUAL FINANCIAL REPORT
Fiscal Year Ended June 30, 2020
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
Traci 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, 2020
Table of Contents
Page
Introductory Section
Transmittal Memorandum ...................................................................................................................................................... vii-xxii
Report Purpose and Organization ............................................................................................................................................... vii
Profile of the City of San Luis Obispo ........................................................................................................................................ ix
Factors Affecting Financial Condition ......................................................................................................................................... x
Financial Condition Overview ...................................................................................................................................................xiii
Relevant Financial Policies ......................................................................................................................................................xviii
Major Initiatives ........................................................................................................................................................................ xxi
Award for Excellence in Financial Reporting .......................................................................................................................... xxii
Acknowledgments .................................................................................................................................................................... xxii
Directory of Officials and Advisory Bodies ................................................................................................................................xxiii
City Council .............................................................................................................................................................................xxiii
Advisory Bodies ......................................................................................................................................................................xxiii
Appointed Officials and Department Heads ............................................................................................................................xxiii
Mission Statement ....................................................................................................................................................................... xxiv
Organizational Values ......................................................................................................................................................... xxv-xxvi
Organization of the City of San Luis Obispo ............................................................................................................................. xxvii
GFOA Certificate of Achievement for Excellence in Financial Reporting ............................................................................... xxviii
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, 2020
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 ................................................................................................................................ 39-90
Required Supplementary Information Section
Budgetary Comparison Schedule – General Fund ................................................................................................................. 93-98
Schedule of the Changes in the Net Pension Liability and Related Ratios – Miscellaneous
Agent Multiple – Employer Plan ................................................................................................................................... 100-101
Schedule of the Pension Plan Contributions – Miscellaneous Agent Multiple – Employer Plan ...................................... 102-103
Schedule of the City’s Proportionate Share of the Net Pension Liability – Safety Cost-Sharing Plan .............................. 104-105
Schedule of the City’s Pension Contributions – Safety Cost-Sharing Plan ....................................................................... 106-107
Schedule of the Changes in the Net OPEB Liability and Related Ratios ................................................................................. 108
Schedule of Employer OPEB Contributions ............................................................................................................................. 109
Notes to Required Supplementary Information ........................................................................................................................ 110
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City of San Luis Obispo, California
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2020
Table of Contents Page 3
Page
Other Supplementary Information and Combining and Individual Fund Statements and Schedules
Half Percent Sales Tax Measure Funding Schedule .......................................................................................................... 113-115
Nonmajor Governmental Funds ........................................................................................................................................ 116-119
Combing Balance Sheet – Nonmajor Governmental Funds .............................................................................................. 120-124
Combining Statement of Revenues, Expenditures and Changes in Fund Balance
- Nonmajor Governmental Funds ................................................................................................................................... 126-130
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual:
Downtown Business Improvement District Fund ................................................................................................................. 131
Transportation Development Act (TDA) Fund ..................................................................................................................... 132
Tourism Business Improvement District Fund ...................................................................................................................... 133
Gas Tax Fund ........................................................................................................................................................................ 134
Community Development Block Grant (CDBG) Fund ......................................................................................................... 135
Law Enforcement Grants Fund ............................................................................................................................................. 136
Public Art Contributions Fund .............................................................................................................................................. 137
SB1 Road Repair Fund ......................................................................................................................................................... 138
SB1186 ASP Certify ............................................................................................................................................................. 139
Debt Service Fund ................................................................................................................................................................. 140
Agency Funds ........................................................................................................................................................................... 141
Combining Statement of Assets and Liabilities – Agency Funds ................................................................................... 142-143
Combining Statement of Changes in Assets and Liabilities – Agency Funds ................................................................ 144-146
Statistical Section
Statistical Section – Overview (Unaudited) .............................................................................................................................. 149
Financial Trends:
Net Assets by Component – Last Ten Fiscal Years .............................................................................................................. 151
Changes in Net Position – Last Ten Fiscal Years ........................................................................................................... 152-153
Fund Balances of Governmental Funds – Last Ten Fiscal Years ................................................................................... 154-155
Revenues, Expenditures and Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years ................................................................................................................................................. 156-157
General Fund Operating Expenditure Trends by Type – Last Ten Fiscal Years ................................................................... 158
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City of San Luis Obispo, California
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2020
Table of Contents Page 4
Page
Revenue Capacity:
Governmental Activities Tax and Franchise Revenues by Source – Last Ten Fiscal Years ................................................. 159
Assessed and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years ........................................................... 160
Property Tax Rates – Last Ten Fiscal Years .......................................................................................................................... 161
Principal Property Taxpayers – Current Year and Nine Years Ago ...................................................................................... 162
Secured Property Tax Roll Levies and Collections – Last Ten Fiscal Years ......................................................................... 163
Schedule of Taxable Sales and Permits by Category – Last Ten Calendar Years ................................................................. 164
Historical Sales and Use Tax Rates ....................................................................................................................................... 165
Schedule of Business Tax Certificates Issued ....................................................................................................................... 166
Debt Capacity:
Per Capital Outstanding Debt by Type – Last Ten Fiscal Years ........................................................................................... 167
Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt per Capita
Last Ten Fiscal Years ........................................................................................................................................................ 168
Direct and Overlapping Long-Term Debt – Fiscal Year Ended June 30, 2018 ..................................................................... 169
Computation of Legal Debt Margins – Last Ten Fiscal Years .............................................................................................. 170
Revenue Bond Coverage:
Water Fund – Last Ten Fiscal Years ..................................................................................................................................... 171
Parking Fund – Last Ten Fiscal Years .................................................................................................................................. 172
Demographic and Economic Information:
Demographic and Economic Statistics – Last Ten Fiscal Years ........................................................................................... 173
Principal Employers – Current Year and Nine Years Ago .................................................................................................... 174
Regular Authorized Positions – Last Ten Fiscal Years ......................................................................................................... 175
Operating Information:
Operating Indicators and Capital Asset Statistics by Function – Last Ten Fiscal Years ................................................ 176-179
Water System Statistical Data ............................................................................................................................................... 180
Water and Sewer Rates – Last Ten Fiscal Years ............................................................................................................ 182-183
Water System Ten Largest Users – Fiscal Year Ended June 30, 2018 .................................................................................. 184
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INTRODUCTORY SECTION
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City of San Luis Obispo, Finance and Information Technology, 990 Palm Street, San Luis Obispo, CA, 934013249, 805.781.7130,
slocity.org
Date December 31, 2020
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 2019-20
REPORT PURPOSE AND ORGANIZATION
We are pleased to submit the City of San Luis Obispo’s 2019-20 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, 2020.
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.
Audited Financial Statements
This is the second 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, 2020 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 estimates 1 made by
management; and evaluating the overall financial statement presentation.
1 Significant estimates included in the financial statements are made in conformity with GAAP.
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TRANSMITTAL MEMORANDUM
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, 2020, and the respective changes in financial
position, and, where applicable, cash flows therefore 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 controls 2 and
compliance with legal requirements, with special emphasis on the administration of Federal awards (such as
Transit funding). This audit will be completed and will be filed and distributed to appropriate agencies to meet
Federal requirements.
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; 4) notes to the financial statements; and 5) required
supplementary information; and additional supplementary statements and schedules including the local half-
percent sales tax, non-major governmental funds, and agency funds.
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
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
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 47,459, 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:
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
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TRANSMITTAL MEMORANDUM
basis. With the FY 2019-20 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 accounting or Enterprise Resource
Planning (ERP) 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. This system also maintains the City’s list
of fixed assets.
It is the City's policy to maintain an assigned fund balance in the General Fund of at least 20% of operating
expenditures. This policy objective has been achieved for fiscal year 2019-20. The City maintains a similar
policy for working capital balances in the water, sewer, and parking enterprise funds. The Fleet Replacement
Fund reserve policy is $500,000 and the Information Technology (IT) Replacement Fund reserve policy is
$400,000. The goal has been met for these funds in 2019-20.
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.
Global Pandemic
In March 2020, the World Health Organization declared the outbreak of coronavirus disease 2019 (COVID-19)
a pandemic. The responses have caused global social and economic disruptions, including the largest global
recession since the Great Depression. Many events have been postponed or cancelled. Widespread supply
shortages and partial or full closure of educational institutions have occurred. In the United States, the President
declared the U.S. outbreak a national emergency on March 13, 2020 and disaster declarations were approved for
all states and territories by the end of April. The City declared a local emergency on March 17, 2020 and
extended through the remainder of the 2019-20 Fiscal Year.
Federal funding for the cost of the City’s pandemic response relies on the emergency declaration. The Federal
Emergency Management Agency (FEMA) has indicated that some of the City’s costs are reimbursable expenses,
however the financial statements for fiscal year 2019-20 reflect only receipt of Coronavirus Aid, Relief, and
Economic Security (CARES) Act funding in the Transit Fund. Any reimbursement from FEMA is not
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TRANSMITTAL MEMORANDUM
considered available at June 30, 2020 and is therefore not included in the accompanying financial statements.
With a population of under 50,000, the City was not a direct recipient of CARES Act funding other than for
Transit. It did however receive an allocation through the State of California in the amount of $566,980. Though
the funding can be used for expenditures back to the beginning of the pandemic, it was part of the State’s 2020-
21 budget under Assembly Bill No.89 and will be accounted for as a receivable in fiscal year 2020-21.
In California, on March 19, 2020, an Executive Order and Public Health Order directed all Californians to stay
home except to go to an essential job or to shop for essential needs. It was modified on May 4, 2020 and
on August 28, 2020 the State released the Blueprint for a Safer Economy to permit gradual reopening of certain
businesses and activities.
In San Luis Obispo, the City has responded quickly to the restrictions and has focused efforts on economic
recovery and stability. Local restaurants have turned to outdoor dining, which was facilitated by the City’s
nimble adjustment of parking regulations and the creation of “parklets” which allow dining to occur in the public
right of way. In addition, for most of the final quarter of the fiscal year, fees for on-street and garage parking,
as well as City bus ridership, were waived. The decline in revenue is seen in the Parking and Transit Enterprise
Funds respectively. The Transit Fund received significant assistance from the Federal CARES act, as previously
mentioned, which contributes to the financial condition of the Fund.
The stay-at-home orders and subsequent business closures did affect several of the City’s main revenue sources
(addressed later in the document) and required immediate action to counter-act the losses. The City activated its
Fiscal Health Contingency Plan that instituted immediate hiring, purchasing, and travel chills. This action
assisted in curtailing the effects of heavily reduced economic activity during the initial stages of the pandemic
and into 2020-21.
Local Economic Environment
Historically, and prior to the aforementioned pandemic, 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. It is also the County seat with significant county administrative offices and the regional courts.
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 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.
The historically solid base of employment in the County was not immune from the impacts of the pandemic.
The California Employment Development Department (EDD) reported the unemployment rate in San Luis
Obispo County was 11.5% in June 2020, down from a revised 12.9% in May, reflecting the 12th lowest
unemployment rate in California. Between June 2019 and June 2020, all industries experienced job losses, with
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the Leisure & Hospitality industry experiencing the highest loss of 6,600 jobs. Government experienced a loss
of 3,500 jobs followed by the Trade, Transportation & Utilities industry with 2,100 jobs, the Manufacturing and
Mining, Logging, & Construction industries with 1,400 jobs, Educational & Health Services with 1,300 jobs and
Professional & Business Services lost 1,200 jobs.
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
latter part of 2020. The City did, however, receive some Cannabis tax revenue from outside delivery businesses
selling within City boundaries.
The pandemic, the subsequent shelter-at-home order, and the change to largely online classes of the two colleges
had effects on two of the major tax revenue sources. The closure of retail businesses and the fitness,
entertainment, and dining industry impacted sales tax revenue. Travel restrictions and curtailment of Cal Poly
classes diminished hospitality. As a result, sales tax shrank by 8.5% ($1.5 million), the Local Revenue Measure
by 9% ($770,900), and Transient Occupancy Tax by 22% ($1.7 million). Though the year continued to see strong
development and building activity, recreation was also heavily influenced by the order and Parks & Recreation
fee revenue plummeted by 39% ($784,600). The pandemic seemed to have accelerated trends toward online
commerce and the City saw its portion of sales tax pertaining to online purchases increase but could not negate
the overall losses of the City’s largest revenue source.
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 and the Enterprise Funds to help set the stage for long-term
decision-making. The purpose of the forecast is to consider 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 2019-24 forecast was completed in April 2018, before the City Council
considered the 2019-21 two-year Financial Plan for adoption. Due to CalPERS policy changes and rapidly
increasing payment requirements to pay down pension unfunded liabilities, a ten-year forecast had previously
been developed as part of the City’s Fiscal Sustainability and Responsibility Major City Goal. The 2019-21
Financial Plan continued year two and three of the fiscal health response plan that began the previous year and
allowed the City to make additional payments toward the pension obligation. Under the plan, most employee
groups began paying a share of the employer’s contribution toward CalPERS obligations in 2019-20 that will
further increase in 2020-21.
A first payment of $4.2 million had been made in April 2019 and a second payment of equal amount was
scheduled for April 2020. Due to the state of health emergency, the City Council decided to retain any unassigned
fund balance until the fiscal situation can be better assessed. However, the City remains committed to making
additional payments.
Major City Goals and Other Important Objectives. The City Council adopts Major City Goals and, at times,
Other Important Objectives as an integral part of the Financial Plan. These goals address the highest priority
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TRANSMITTAL MEMORANDUM
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 five major City goals adopted by the Council as part of the 2019-21
Financial Plan. Detailed work programs were prepared for each of them and their status is updated four times
each year through presentation to the Council.
Major City Goals:
x Housing. Facilitate the production of housing with an update of the Housing Element, including an
emphasis on affordable housing (including unhoused people) and workforce housing through the lens
of climate action and regionalism.
x Fiscal Sustainability and Responsibility. Continue to implement the City’s Fiscal Responsibility
Philosophy with a focus on efficiencies, strategic economic development, unfunded liabilities, and
infrastructure financing (Funding the Future).
x Sustainable Transportation. Enhance accessible regional transit, bicycle, and pedestrian mobility to
promote a transition to a car-free or shared-car lifestyle and to reduce greenhouse gases.
x Climate Action. In response to the climate crisis, continue to update and implement the Climate Action
Plan for carbon neutrality, including preservation and enhancement of our open space and urban forest
and planning for resilience.
x Downtown Vitality. Support the economic and cultural heart of the City with attention to safety,
maintenance, infrastructure, and amenities.
By the end of the fiscal year, the City had achieved many of the objectives related to its Major City Goals with
41% completed or moved to ongoing service delivery.
FINANCIAL CONDITION OVERVIEW
Despite being economically affected by the COVID-19 pandemic, the City ended the fiscal year 2019-20 in a
solid fiscal position. Actual Sales tax revenues performed better than the initial downward adjusted assumptions
in April 2020, though several revenue sources saw diminished revenue levels. Certain fee revenues in the Parks
& Recreation programs were significantly affected by the pandemic. The immediate activation of the Fiscal
Health Contingency Plan assisted in counter-acting the revenue losses and brought expenditures below revenue
levels.
At June 30, 2020, the total General Fund balance was $33.6 million; an increase of $3.6 million over 2018-19.
Of this amount, $26.9 million is assigned for several purposes: $10.6 million is assigned for General Government
programs, $10.2 million for the 20% required operating reserve, $1 million for revenue stabilization, $1.4 million
for the Section 115 Trust Fund, $1.1 million for Public Safety, and $899,277 for Development Services. In
addition, the City retains a fund balance in the Insurance Fund for claims related to liability and workers’ comp.
insurance. Finally, $7.1 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
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adopted fiscal health response plan, the Council has given direction to aggressively pay down CalPERS unfunded
liabilities with available one-time funding which will be reflected in the recommended action. Though needs to
re-activate the economy and “re-open” San Luis Obispo are high, the City remains committed to its obligations
toward additional pension payments.
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 2018-19 to seed the trust fund. It was anticipated that the trust
would be established in March 2020, however due to the global pandemic this was deferred, and the amount
remains in the assigned General Fund Balance.
Revenue Base Growth. Since the Great Recession, the US had experienced an unprecedented long-term
expansion that continued into 2019-20. Sales tax (including the Half Percent Sales Tax Measure), Property Tax
and Transient Occupancy Tax (TOT) account for 66% 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. However, all of this came to an abrupt halt with the onset of COVID-19 and the resulting global
pandemic. The losses experienced in Sales and Transient Occupancy Tax are not expected to recover to pre-
pandemic levels until 2022-23 and uncertainty remains as initial signs of a normalizing economy came into
question as the pandemic anticipated a second wave during the 2020 winter months.
Despite the pandemic, development related fee revenue continues to see significant growth as development
activity remain at unprecedented levels in the City with two Community Facilities 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 60% 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
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TRANSMITTAL MEMORANDUM
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 (FHRP)
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 beginning in FY 2018-19 as
well as the FY 2019-21 Financial Plan.
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 City was able to implement the adopted deliverables and maintain within the allocated budget appropriations
in 2019-20.
The FHRP allowed the City to tackle the economic and fiscal challenges brought on by the COVID-19 in solid
fiscal footing. However, the City also activated its Fiscal Health Contingency Plan that immediately implements
hiring, purchasing, and travel chills. This essentially means that the City departments “put on the breaks” in order
to keep expenditures within available and anticipated resources at year-end.
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 continues to be 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.
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TRANSMITTAL MEMORANDUM
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 2023 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 result of that feedback was shared with
the City Council in June 2020. The City Council ultimately decided to place the measure on
the November, 2020 ballot for the renewal of the Local Revenue Measure at 1.5
cents; a rate that aligns the financial resources needed to deliver the service and
infrastructure the community prioritizes most. The new measure will cease when
ended by the San Luis Obispo voters. The new measure was approved by the voters with no sunset clause and
is estimated to generate approximately $21 million per year.
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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 2019-20.
Total expenditures during 2019-20 amounted to $10.6 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
2019-20
Operating Capital
Programs Projects* Total
Preservation of Essential Services
Public Safety $ 613,991 $ 1,068,158 $ 1,682,149
Community Development 391,187 123,030 514,217
Transportation 1,023,503 2,438,079 3,461,582
Code Enforcement 0 19,836 19,836
Leisure, cultural and social services 209,308 885,354 1,094,662
General Government 0 243,342 243,342
Total $ 2,237,989 $ 4,757,963 $ 6,752,610
Half Percent Sales Tax Measure Revenues & Uses Summary
Revenues:
Sales and use tax - Measure G 1/2 Cent add-on tax $ 7,554,375
Use of money and property 174,495
Total Revenues 7,728,870
Uses:
Operating Programs (2,237,989)
Capital Projects (4,757,963)
Total Uses (6,995,952)
Excess of revenues over expenditures 732,918
Prior Sales Tax Measure Balance 6,329,722
Encumbered or designated for carryover for future year expenditures (3,559,926)
Net available for future year appropriations $ 2,769,796
*Detail of Capital Projects is included with other supplementary information in the financial statements, which can be
found on page 113.
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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. The policies are reviewed, amended, and updated with
each Financial Plan adoption and as needed throughout the year. The policies cover virtually every aspect of
financial management but several of these policies are particularly relevant to the understanding of the City’s
financial performance in 2019-20.
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 lon g-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 reserve levels. Under this policy it is allowable for total expenditures to exceed revenues in
any 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 and a reserve is retained in
these funds to safeguard against unforeseen and unfunded issues.
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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 in 2019-20. Additionally, the City retains $1.4
million for the Section 115 Pension Trust fund which will show in subsequent financial reports as assigned 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 pension
liabilities and infrastructure. This policy addresses long-term costs and prioritizes allocation of funds to reduce
the pension 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 needs of its infrastructure in early 2018 and the assessment continued into FY
2018-19 with the beginning stages of the SLOForward effort. It culminated in the City Council’s decision to
place a measure on the November 2020 ballot for a 1.5 cent local transaction and use tax measure that will
supplant the current half-cent measure.
Pension and Other Post-Employment Benefits
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 will also reduce overall annual
cost 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 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.
All employees currently pay the full employee contribution and the additional contributions agreed to are listed
in the chart below:
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TRANSMITTAL MEMORANDUM
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.
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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.
Additional information on the City’s retirement and post-employment benefits can be found in Note 7 in the
notes to the financial statements.
MAJOR INITIATIVES
The City continued its efforts on a number of significant initiatives in 2019-20 which had a beneficial effect on
fiscal health and quality of life despite the onset of the global pandemic in March 2020.
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 City had to change course with the onset of the pandemic and is currently concentrating its
Economic Development efforts on assisting the community with reopening in accordance with State directives.
For more information see www.slocity.org/covid19.
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 City’s Downtown district remains the cultural and historical center of the City of San Luis Obispo. The City
therefore schedules maintenance and renewal projects that will invigorate the district and keep it clean, attractive
and safe to residents and tourist alike. The pandemic and its required closures of retail and dining businesses hit
this district hard as its mainly small businesses and restaurants had to close their doors and tourists and day-time
visitors stayed away. The City took this opportunity to schedule maintenance projects, such as a critical sidewalk
repair, bridge replacement, and prepare for the re-opening of the business district. New police officers were
added to support safety in the Downtown.
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AWARD FOR EXCELLENCE IN FINANCIAL REPORTING
The City submitted its CAFR for the fiscal year ended June 30, 2019 to the Government Finance Officers
Association of the United States and Canada (GFOA) Certificate of Achievement for Excellence in Financial
Reporting program. Due to the global pandemic, processing of the award applications has been delayed. The
City anticipates that the prior year CAFR will meet the criteria for the award.
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
and in the other departments as well as 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.
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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
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
Matt Horn Director of Public Works
xxiii
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.
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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.
xxv
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.
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PatrolFire, Medical & Haz MatNatural ResourcesRecruitmentAssistant City ManagerTraffic Safety Emergency ResponseEconomic DevelopmentLabor RelationsInvestigationsHazard PreventionCultural ActivitiesFair EmploymentNeighborhood ServicesFire InspectionsCity Clerk ServicesRisk ManagementAnimal RegulationDisaster PlanningGeneral AdministrationHuman RelationsInformation TechnologyGIS ManagementBudgetRecreation ProgramsWaterEngineeringLong Range PlanningPurchasingRanger ServicesSewerTransportationDevelopment ReviewAccounting & RevenuePark PlanningUtilities ResourceCreek & Flood ProtectionBuilding & SafetySupport ServicesGolf CourseConservationMaintenance Services:CDBG AdministrationFinance AdministrationPublic ArtWhale Rock Reservoir Streets, Parks, BldgsHousingCommunityDevelopmentAdministrationDept Appointed by the Assistant City ManagerUtilitiesHumanResourcesParks &RecreationPublicWorksCommunity ServicesCITIZENSADVISORYBODIESCITY MANAGERMAYOR &CITY COUNCILDeptAppointed by the City Council Appointed by the City ManagerCITY ATTORNEYPoliceFireFinancexxvii
xxviii
FINANCIAL SECTION
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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, 2020, 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, 2020, 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 93-110 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 113-146 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 December 31,
2020, 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
December 31, 2020
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. In the private sector, it is similar
to a balance sheet.
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. In conformance with GASB 68, the Statement of Net Position reported
for fiscal year 2019-20 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
5
Management’s Discussion and Analysis
component units that require discrete presentation in accordance with Governmental Accounting Standards Board
(GASB) standards.
Pension Obligation. Pursuant to GASB Statement No. 68 (GASB 68), Accounting and Financial Reporting for
Pensions, the City 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 2019-20 pension liabilities is as of the fiscal year ended
June 30, 2019. 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 2019-20 are reported
as deferred outflows of resources in accordance with GASB Statement No. 71.
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.
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Management’s Discussion and Analysis
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.
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, 2020 . It should be read in conjunction with the accompanying
transmittal memorandum and the basic financial statements.
In the beginning of fiscal year (FY) 2019-20, the City continued to experience slow but steady economic growth. Like
many other jurisdictions, San Luis Obispo experienced rapid change with the introduction of the shelter-at-home
orders brought on by the worldwide COVID-19 health emergency. Though not all revenue sources were affected by
the downturn of economic activity, the City experienced losses in its Sales tax and local revenue measure. Since
tourism all but ceased and the two colleges had to turn to largely online classes, Transient Occupancy Tax saw the
largest decline compared to the previous year. Development related fee revenue continued strong throughout the year
due to a very active housing market that provided confidence to development interests and public health directives
closed most recreation programs and Parks & Recreation fees saw steep declines.
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, was 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 identifies actions that
reduce or contain expenses, including new ways to accomplish goals and work programs, as well as collaborating with
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Management’s Discussion and Analysis
employee groups regarding compensation agreements. In addition, it identifies opportunities and actions related to
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. Three retail business have since been permitted, but none opened its doors in 2019-20. The first
delivery operator opened in November 2019 and one retailer began business in the second half of 2020. However, the
City began collecting tax revenue from outside delivery businesses selling within City limits, resulting in $81,599, a
minor revenue stream for 2019-20.
The following outlines financial highlights for the year, which are detailed in the table on page 9 of the Management
Discussion and Analysis.
x The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows at June 30,
2020 by $340 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
x Per the City’s Statement of Net Position, total City-wide assets increased by approximately $40.5 million or 7.6%.
In governmental activities, amounts received from various sources increased by $1.1 million; cash and investment
balances increased by $8.9 million; prepaid expenses decreased by $274,000 and cash held with fiscal agent
decreased slightly from 2018-19.
x In business-type activities which include Water, Sewer, Parking and Transit, amounts receivable, including due
from other governments, increased by $234,000 while cash and investment balances increased by $8.2 million.
Prepaid items decreased by $6 million and cash held with fiscal agents and investments in joint ventures decreased
by $198,000.
x City-wide liabilities increased by $13 million during the fiscal year. The increase of $1.4 million in governmental
funds, largely driven by the timing of invoice payments to vendors, was also augmented by an increase of $11.8
million in the business-type activities, reflecting new long-term debt obligations.
x The City’s governmental funds altogether reported combined ending fund balances of $72 million. Approximately
$29 million or 40% of this total amount is not available for new spending as it is either restricted for (1) debt
service, (2) grant obligations, or (3) or specific programs like impact fee programs and general capital outlay.
Another $35.9 million is assigned as of June 30, 2020 to meet expenditures in subsequent years in the form of
purchase orders, encumbrances, and unspent appropriations that have been rolled over into fiscal year 2020-21 in
accordance with the City’s budget policies. Per the City’s policy, $13.6 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.
x The total General Fund balance increased by $1.9 million to $33.7 million. After the adjustments to reflect
amounts assigned to general government programs ($10.4 million), and designated reserves including the 20%
operating reserve, $7.1 million remain as unassigned balance at June 30, 2020. While it maintains a healthy
fund balance, due to economic uncertainties from COVID-19, the City has postponed $7.3 million of planned
payments towards its CALPERS unfunded liability in FY 19-20 and FY 20-21.
1 More information on the City’s pension plans and obligations. can be found in Note 7 beginning on page 65.
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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 2020.
For the Fiscal Year ending on June 30, 2020, the City’s combined total assets and deferred outflows of resources were
greater than its liabilities and deferred inflows of resources by $339.7 million. The largest portion of the City’s net
position reflects its investment in capital assets in the amount of $327 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, $32.3 million, is subject to restrictions imposed by external parties and its use is
determined by those restrictions and contractual obligations. The governmental activities and business-type activities
contributed a $10.7 million and $8.6 million increase, respectively, to the combined net position. The $10.7 million
increase in governmental activities includes a prior year restatement totaling $6 million, resulting in a total net position
of $340 million at June 30, 2020.
Information about changes in net position for fiscal years 2019-20 and 2018-19 is summarized below. Reasons for
the changes are discussed in the following sections for governmental activities and business-type activities.
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Management’s Discussion and Analysis
Governmental Activities. The City’s net position in the Governmental activities increased by $10.7 million to $133.4
million on June 30, 2020 largely due to operating grants of $4.8 million and a favorable adjustment for the fair market
value of the City’s investments, which nearly doubled investment earnings from the prior year. In addition, in March
2020, the City took action to reduce expenses amid COVID-19 uncertainties, which significantly contributed to the
increase in net position. Lastly, the change in net position also reflects a $6 million prior year restatement related to
recognition of notes receivable associated with the City’s Affordable Housing program.
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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 $4.6 million or 5% which was due to several factors.
Decreases in sales and transient occupancy taxes were offset by a substantial fair market value adjustment for
investments, strong property tax results and one-time miscellaneous revenue.
General revenues represent 63% of the total revenue and are used to pay costs of providing program services such as
public safety, parks and open space, streetlights and traffic signals, recreation opportunities, economic development
and environmental sustainability.
Top Governmental Activity Revenue Sources. As shown in the graph below, the City’s top five tax revenues
accounted for almost 61% of total revenues, with service charges accounting for another 21% and ancillary revenue
making up the remainder. The main revenue sources for fiscal year 2019-20 were impacted by COVID-19 restrictions,
resulting in large decreases for sales and transient occupancy tax. Other revenues fared better and reflect increases
from 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.
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Management’s Discussion and Analysis
The following narrative addresses the significant variances in key revenues from the prior fiscal year:
x Sales Tax. Sales Tax decreased by $2.3 million over the prior year. This includes the City’s half-cent
transaction tax, commonly referred to as the Local Revenue Measure. This is attributable to COVID-19
restrictions and the impact to the local economy in the last quarter of the fiscal year that was under the
state’s shelter-at-home directive and resulting closure of a large part of the economy.
x Property Tax. Property tax revenue including the portion in-lieu of vehicle license fees (VLF) increased
by $1.3M with the real estate market continuing strong in the City. Though property tax has been
growing at a five percent rate over the past few years, this eight percent increase points to an ongoingly
strong real estate market that continues with interest rates at an all-time low. However, the County
Assessor, responsible for property tax collection, does not forecast this to continue and anticipates a three
percent growth in FY 20-21.
x Transient Occupancy Tax (TOT). Decreased by $1.7 million which was directly impacted by COVID-
19 and the associated restrictions on travel. During the height of the pandemic induced shut-down, hotel
occupancy dipped to 15%; an all-time low that was also heavily influenced by the closure of Cal Poly
State University and related visitor and business travel.
x Charges for Services. These revenues decreased by approximately $665,000 over 2018-19. This revenue
is largely based on a 36% revenue decline in Parks & Recreation as most of the programs offered were
directly affected by the shelter-at-home order.
x Governmental Activities Program Expenses: Program expenses saw a marked decrease from the prior fiscal
year, ending 2019-20 at $86.9 million. The City took immediate action in March to curtail spending in light of
the uncertainties associated with the pandemic by activating its Fiscal Health Contingency Plan. Under this
measure, a hiring, purchasing, and travel chill is activated, and additional approvals are necessary to curtail
spending. In addition, the Fiscal Health Response Plan (FHRP), introduced in 2018-19 and lasting through the
end of FY 2021, was maintained which 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. Due to this plan, the City entered the beginning stages of the pandemic in a solid
financial position that allowed it to weather the drastic events brought on by a closed economy.
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Management’s Discussion and Analysis
The following chart compares program revenues and expenses which is useful when reviewing the costs of various
governmental activities:
Revenues presented in this chart are related to service fees only.
Business-Type Activities. The City’s business-type activities are financed through rates for services and should be
self-sufficient in covering their expenses with their sales and services revenue. Also called Enterprise funds, the City
has four such entities: Water, Sewer, Parking, and Transit.
Revenue Sources: Operating revenues for services decreased by $296,000 due to decreases in charges of sales and
services in the Parking and Transit funds offset by increased rates in the Water and Sewer funds as follows:
1.Water revenues. Total operating revenues increased by $1.6 million due to higher water sales and impact fee
revenue compared to the prior year. Water sales remained relatively unaffected due to the shift from business,
hotel, and office activity to residential use during the shelter-at-home order.
2.Sewer revenues. Total operating revenue increased by $368,000 over the prior year with charges from sales and
services coming in $72,000 lower, however, the fund also saw an increase in development related fees, ending
the year with over $2 million in collected fees, an increase of $442,000.
3.Parking Fees. In fiscal year 2019-20 the Parking Fund saw a decrease in revenue of $2.1 million. The City
Council waived parking fees for both on-street and garage parking during the last quarter of the fiscal year. This
was an effort to maintain the economic activity in the downtown core area during the pandemic. Many parking
spaces (72) were converted to outdoor dining “parklets” which allowed restaurants to continue operating in
accordance with the state regulations.
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 historically funded by rider fares. In 2019-20, the
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Management’s Discussion and Analysis
revenue for sales decreased by $129,000, or 17%. In addition to waiving parking fees, the City Council waived
fares for bus passengers during the final quarter of the year. The fund will however benefit from CARES Act
funding that will assist with the consequences of the pandemic on transit operation and ridership.
Overall, the change in net position for the business-type activities amounted to $8.6 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 increased by $1 million with most of
the increase attributable to the Water Fund which had a $1.9 million increase due to capital projects and the cost of
water supply. This was offset by a $867,000 decrease in Sewer, a $57,000 increase in Parking and a $168,000 decrease
in Transit. All four funds combined ended 2019-20 with an operating net income of $6 million.
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.
x As of June 30, 2020, the City’s governmental funds reported combined ending fund balances of $72 million,
or an increase of $15.4 million compared to the prior fiscal year. The total fund balance of the governmental
funds consists of the following:
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Management’s Discussion and Analysis
o Non-spendable fund balance represents prepaid items. No balance was held in non-spendable at
fiscal year-end.
o Restricted fund balance of $29.1 million, including 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 $36.0 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 $6.9 million. The unassigned balance is largely due to the City
Council’s decision to leave the 2018-19 unassigned balance of $5.9 million intact. At the time the
Council considered the year-end financial position for FY 19, the shelter-at-home directive had just
taken hold. With uncertainty ahead, the Council retained the fund balance and gave permission to
the City Manager to use it for COVID-19 related expenditures for the duration of the pandemic.
Major Governmental Funds. In the fiscal year 2019-20 the City maintained only one major fund: the General Fund.
Changes in the General Fund are highlighted in the Financial Highlights section above.
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 the 10) Transportation Impact
Fee Fund and 11) the Capital Outlay Fund. These funds are presented in the basic financial statements in the aggregate.
A significant number of these funds represent activity for capital projects. On June 30, 2020, these funds had an
aggregate fund balance of $38.4 million. Of this total, $29.1 million is restricted for payment of debt service or
specific future capital projects and related funding needs.
The remaining balance of $9.3 million is assigned for contingency reserves, affordable housing loans, 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, 2020, 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, 2020.
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Management’s Discussion and Analysis
The following summarizes the original budget compared with the adjusted final budget for fiscal year 2019-20. 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.
As discussed below, differences between the original budget and the final amended budget reflect the following key
changes:
x Revenue budgets increased for development services, reimbursement for Fire mutual aid and other grant
revenues received during the year.
x Expenditure budgets were augmented for encumbrances and carryover of purchase commitments that had
not yet been executed at the end of the prior fiscal year.
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.
Additional amendments to the budget were made with the adoption of the 2019-21 Financial Plan Supplement to
reflect refined estimates based on the pandemic.
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 were above the final budget by more than $5.7 million, and
expenditures ended below the final budget by approximately $1.2 million. The net other sources and uses also ended
above the budget by $2.1 million. Due to prior period restatements, which were not budgeted, the net result of these
variances is an ending fund balance that exceeded the amount anticipated in the budget by $12 million.
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Management’s Discussion and Analysis
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 recommendation of the City Council’s advisory body overseeing the allocations.
For FY 2019-20, the following revenues and expenditures were recorded:
2019-20 Local Revenue Measure Budget to Actual
Budget Actual
Revenue
Transaction Tax $7,840,000 $7,554,375
Investment Income 174,495
Total $7,840,000 $7,728,870
Expenditures Budget Actual Encumbrances Carryover
Operating Programs $2,237,989 $2,237,989
Capital Programs
Open Space Preservation $323,956 $123,030 $78,981 $121,945
Bike & Pedestrian
Improvements.
924,759 670,484 147,706 106,569
Traffic Congestion Relief 135,877 50,393 12,032 73,452
Public Safety 2,219,790 1,068,158 189,755 961,877
Neighborhood Street
Paving
2,385,089 1,684,203 226,621 474,265
Code Enforcement 19,836 19,836 0 0
Flood Protection 332,367 32,999 1,638 297,730
P&R / Senior Programs 1,684,425 975,874 62,414 646,137
Other Vital Services 494,790 132,986 88,710 273,094
Total Expenditures $8,520,889 $4,757,963 $807,857 $2,955,069
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, 2020, the City’s investment in capital assets for its governmental and business type activities
amounts increased to $398 million (net of accumulated depreciation).
The investment in capital assets includes open space, park improvements, building maintenance and improvements,
vehicles and equipment, streets, bikeways, water, wastewater, and storm drain systems.
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Management’s Discussion and Analysis
Major capital asset2 expenditures during the fiscal year included the following:
x $1.8M for South Broad Street Improvements
x $629,000 on Hub Parking Technologies
x $410,000 on the Directional Sign Program
x $75,000 on the City Hall EV Charging Station
x $366,000 on the Anholm Neighborhood Greenway Plan – Phase 1
x $46,000 on Mission Plaza Enhancements
x $172,000 on police SUVs
x $121,000 on the Swim Center replastering
x $2.2M on the Water TTHM Byproduct Reduction Project
x $978,000 on the Stafford, Taft, Kentucky Sewer line replacement
x $357,000 South Hills Radio Upgrade
x $436,000 for the Islay Hill Park Playground
x $1.4M for the Marsh Street Bridge Replacement
x $565,000 for the Phillips Bike Bridge
x $12.8M for the Water Resource Recovery Facility (WRRF) Upgrade
x $957,000 for the Palm Nipomo Parking Garage
Long-Term Debt. At June 30, 2020, the City’s long-term debt had increased by $7.7 million with $75.4 million
outstanding. The Sewer Fund incurred new debt of $14 million during the year, as part of the $140 million upgrade to
the Water Resource Recovery Facility.
Long- Term Debt Governmental Business-Type Total
Activities Activities
2019-20 2018-19 2019-20 2018-19 2019-20 2018-19
Lease-revenue bonds $ 21,084,777 $ 22,171,441 $ 18,185,089 $ 19,542,657 $ 39,269,866 $ 41,714,098
Lease-purchase financing 745,213 1,413,937 - - 745,213 1,413,937
Claims & Liabilities - - - - - -
Installment sale agreement - - 5,562,462 6,181,902 5,562,462 6,181,902
Loans 323,380 413,667 26,133,837 14,750,783 26,457,217 15,164,450
Compensated absences 2,786,993 2,728,422 510,984 545,228 3,297,977 3,273,650
$ 24,940,363 $ 26,727,467 $ 50,392,372 $ 41,020,570 $ 75,332,735 $ 67,748,037
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, 2020, 2% of the assessed valuation was $190,423,485. As of June 30, 2020, 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
On March 18, 2020, the City of San Luis Obispo proclaimed a local emergency following the State of California’s
“Shelter in Place” executive order in response to nationwide COVID-19 pandemic. The pandemic and the resulting
directives to curb the spread of the disease have had significant impacts on the City’s operations.
2 Additional information on the City’s capital assets can be found in Note 5 on page 56 to the basic financial statements.
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Management’s Discussion and Analysis
Employment: Employment in the City was adversely affected by the pandemic and the emergency orders that
required many businesses to close. The unemployment rate in June 2020 for San Luis Obispo County was 11.5%.
All industries experienced job losses with Leisure & Hospitality experiencing the highest loss of 6,600 jobs.
Sales Tax: As with most California Cities, the actual sales tax revenues came in higher than initial projections. This
was largely due to an increase in the state and county pool allocation which reflect online purchases. This helped offset
the decrease in tax revenue from general consumer goods and other negatively affected industries, such as dining.
Tourism: Tourism and hospitality continue to play a large part of the economy in San Luis Obispo contributing to
both, sales and transient occupancy tax. However, the tourism industry was one of the most immediately impacted
industries from COVID-19. Occupancy rates were down significantly during the last quarter of the fiscal year which
in turn lowered the average daily rate per room. Restaurants and retail outlets, especially in the downtown core, also
rely heavily on tourism and have experienced revenue declines.
Real Estate: Though 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.
Housing has also been a major city goal during the 2019-20 fiscal year.
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 a bounce-back of the economy once shelter-at-home orders are lifted and
business can resume its normal pace. However, a full recovery of General Fund revenue to pre-pandemic levels is not
anticipated until FY 2022-23. Continued vigilance is warranted as uncertainties continue with further waves of
COVID-19 anticipated until a vaccine can be readily available. The City is therefore taking a cautious approach to its
forecasting to inform the development of the upcoming two-year financial plan.
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.
Next Year’s Budgets and Rates
On June 2, 2020, the City Council adopted the 2019-21 Financial Plan Supplement and 2020-21 budget with an
appropriation of $199 million. The appropriated budgets remain high due to the capital investments and related debt
issuances for the Water Resource Recovery Facility upgrade and the Water Treatment Plant.
Local Revenue Measure (LRM). The local half-percent transaction & use tax that was authorized by City voters in
November 2014 with over 70% of the vote will continue in 2020-21. The local half-percent sales tax measure is
projected to generate $7.2 Million in 2020-21; a reduced revenue assumption due to COVID-19. The Citizen’s
Revenue Enhancement Oversight Commission (REOC) reviews, reports, and makes recommendations directly to the
City Council regarding the use of the revenue.
For 2020-21, the following operating allocations were recommended and approved by the City Council. The largest
use of LRM funding for operating cost is for public safety. Other categories include staffing for neighborhood street
paving, flood control, and code enforcement.
19
Management’s Discussion and Analysis
Local Revenue Measure Operating Categories FTE 2020-21
1. Open Space Preservation (Ranger Staffing) 2 $152,922
2. Bicycles and Pedestrian Improvements (Engineer, Active Transportation Manager) 1.6 $215,023
3. Traffic Congestion Relief (Signal and Light Maintenance (Technician) 1 $112,237
4. Public Safety (Downtown Officers, Sergeant) 4 $663,940
5. Neighborhood Street Paving (Project Engineer & Maintenance Worker) 2 $189,527
6. Code Enforcement (Code Enforcement Technicians and Officer) 3 $302,046
7. Flood Protection (Collection Operators) 6 $667,282
8. Parks and Recreation/Senior Programs and Facilities (Maintenance Worker) 1 $66,954
9. Other Vital Services and Capital Projects - -
TOTAL 20.6 $2,369,931
The largest use of Local Revenue Measuring for capital expenditures is for Neighborhood Street Paving. Other projects
include playground equipment replacement, park major maintenance and repairs and pedestrian and bicycle pathway
maintenance. A detailed list of the projects funded through the Local Revenue Measure is included in Section 7 of
the Capital Improvement Plan.
Local Revenue Measure Uses
Expenditures are broken into the following nine categories developed from the Measure G (Local Revenue Measure)
ballot language:
1. Open Space Preservation
2. Bicycle and Pedestrian Improvements
3. Traffic Congestion Relief/Safety Improvements
4. Public Safety
5. Neighborhood Street Paving
6. Code Enforcement
7. Flood Protection
8. Parks and Recreation/Senior Programs and Facilities
Based upon the recommendation by the REOC, operating expenditures were budgeted close to the proposed split with
67% for capital and 33% for operating. The balance of capital and operating costs for the 2020-21 budget is listed
below:
Capital Expenditure
Percentage
Operating Expenditure
Percentage
FY 2020-21 67% - $4,830,069 33% - $2,369,931
In June 2020, the City Council approved the placement of a measure on the November 2020 ballot to increase the
local transaction and use tax to one-and-a-half cent until revoked by the voters.
General Fund Revenue. Based on the economic outlook, the City’s General Fund five-year forecast assumes that
2020-21 will continue to be heavily influenced by the pandemic and the ongoing health emergency. It anticipates a
bounce-back of revenues once the economy fully re-opens and the City is actively assisting those efforts through
economic development. However, a return to pre-pandemic revenue levels is not anticipated until 2022-23. Around
this timeframe, it is expected that CalPERS will make further adjustments to its pension liability assumptions due to
the investment losses experienced in 2019-20.
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 218 and was adopted for both years of the
Financial Plan.
Due to the ongoing pandemic and health emergency and the hardship it placed on many of its community members,
the City Council postponed the implementation of the approved rate increases for 2020-21. Council directed staff to
closely monitor the rate revenue and return to Council with a recommendation later in the fiscal year.
With this decision, the 2019-20 rates as shown below will remain in effect in 2020-21 until further action is taken.
Water Rates for 2019-20 and 2020-21
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 and 2020-21
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 $8.28 per Unit
Parking Fund. On June 20, 2017, the City Council approved a multi-year plan, through 2020, to modify the rate
structures for fines, forfeitures, as well as the parking rates for meters, structures, and most permit types. During FY
2019-20, the parking structures were equipped with new pay stations to ultimately implement a 24/7 payment
structure. However, the COVID-19 pandemic had significant impacts to the Parking Fund as most fee services were
suspended and most parking enforcement ceased during the initial shelter-at-home order. In addition, the 842 Palm
Street structure was temporarily closed at the end of March. Several Capital Improvement Plan projects were deferred,
and the construction of the Palm-Nipomo parking structure was delayed until parking demand returns and Parking
Fund revenues and fund balance can support the debt service.
Requests for Additional Information
This financial report is designed to provide a general overview of the City’s finances for all those interested. The City
also prepares a Popular Annual Financial Report that can be found on the City’s website under the Finance
Department’s online documents. Questions concerning any of the information provided in this report should be
addressed to the Department of Finance, 990 Palm Street, San Luis Obispo, CA 93401.
22
BASIC FINANCIAL STATEMENTS
23
24
Governmental
Activities
Business-Type
Activities Total
Assets
Current assets:
Cash and investments 65,241,904$ 80,172,975$ 145,414,879$
Taxes receivable 6,060,416 - 6,060,416
Accounts receivable 3,065,983 7,537,473 10,603,456
Accrued interest receivable 1,592,415 297,772 1,890,187
Prepaid items and other assets 821,031 3,245 824,276
Loans receivable 6,099,429 - 6,099,429
Internal balances 306 (306) -
Noncurrent assets:
Cash and investments held by fiscal agent 421,510 479,948 901,458
Investment in joint venture - 1,726,663 1,726,663
Nondepreciable capital assets 41,894,097 45,990,329 87,884,426
Depreciable capital assets (net of accumulated
depreciation) 156,959,376 153,505,725 310,465,101
Total assets 282,156,467 289,713,824 571,870,291
Deferred Outflows of Resources
Other post-employment benefits related 1,121,796 554,278 1,676,074
Pension related 24,604,009 3,180,478 27,784,487
Unamortized loss on refunding of debt 221,878 233,898 455,776
Total deferred outflows of resources 25,947,683 3,968,654 29,916,337
Liabilities
Current liabilities:
Accounts payable 4,869,231 3,642,725 8,511,956
Accrued salaries 2,918,161 396,588 3,314,749
Unearned revenue 1,236,226 1,546,765 2,782,991
Interest payable 87,789 160,400 248,189
Other liabilities 91,803 - 91,803
Compensated absence - due within one year 1,909,895 357,687 2,267,582
Long-term debt - due within one year 1,480,928 2,453,885 3,934,813
Noncurrent liabilities:
Compensated absence - due in more than on year 877,098 153,297 1,030,395
Long-term debt - due in more than one year 20,672,442 47,427,503 68,099,945
Net OPEB liability 3,771,723 1,863,604 5,635,327
Net pension liability 129,868,761 28,198,498 158,067,259
Total liabilities 167,784,057 86,200,952 253,985,009
Deferred Inflows of Resources
Other post-employment benefits related 1,284,467 634,652 1,919,119
Pension related 5,604,958 524,459 6,129,417
Total deferred inflows of resources 6,889,425 1,159,111 8,048,536
Net Position
Net investment in capital assets 177,335,648 149,848,564 327,184,212
Restricted
Debt service 2,226,898 479,948 2,706,846
Transportation projects 9,371,824 2,010,898 11,382,722
Affordable housing programs 8,698,494 - 8,698,494
Impact fee programs 3,126,925 - 3,126,925
Parkland development programs 4,709,560 - 4,709,560
Public art programs 591,097 - 591,097
Tourism programs 322,975 - 322,975
Public safety 32,332 - 32,332
Claims 821,031 - 821,031
Unrestricted (72,985,085) 56,473,851 (19,823,111)
Total net position 133,430,668$ 206,322,415$ 339,753,083$
City of San Luis Obispo, California
Statement of Net Position
June 30, 2020
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 34,670,383$ 3,045,294$ 822,325$ -$
Transportation 7,416,335 531,424 2,159,109 2,143,902
Culture and recreation 10,063,304 2,508,565 - -
Community development 11,882,018 11,812,417 1,830,091 -
General government 22,058,724 760,606 17,312 360,820
Interest on long-term debt 839,661 - - -
Total governmental activities 86,930,425 18,658,306 4,828,837 2,504,722
Business-type activities:
Water 22,914,013 25,666,777 - -
Sewer 13,100,905 19,042,384 78,815 -
Parking 4,145,364 3,293,941 - -
Transit 4,152,798 633,567 3,087,251 -
Total business-type activities 44,313,080 48,636,669 3,166,066 -
Total primary government 131,243,505$ 67,294,975$ 7,994,903$ 2,504,722$
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
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, 2020
The accompanying notes are an integral part of these financial statements.
26
Governmental
Activities
Business-type
Activities Total
(30,802,764)$ -$ (30,802,764)$
(2,581,900) - (2,581,900)
(7,554,739) - (7,554,739)
1,760,490 - 1,760,490
(20,919,986) - (20,919,986)
(839,661) - (839,661)
(60,938,560) - (60,938,560)
- 2,752,764 2,752,764
- 6,020,294 6,020,294
- (851,423) (851,423)
- (431,980) (431,980)
- 7,489,655 7,489,655
(60,938,560)7,489,655 (53,448,905)
16,571,064 - 16,571,064
7,554,375 - 7,554,375
13,301,736 - 13,301,736
6,325,841 - 6,325,841
5,439,144 - 5,439,144
5,290,215 - 5,290,215
1,888,414 - 1,888,414
2,995,263 - 2,995,263
59,366,052 - 59,366,052
3,368,951 2,880,634 6,249,585
1,001,369 - 1,001,369
- 153,949 153,949
1,889,900 (1,889,900) -
65,626,272 1,144,683 66,770,955
4,687,712 8,634,338 13,322,050
122,726,827 197,707,567 320,434,394
6,016,129 (19,490) 5,996,639
128,742,956 197,688,077 326,431,033
133,430,668$ 206,322,415$ 339,753,083$
Net Revenues (Expenses) and
Changes in Net Position
27
General
Other
Governmental
Funds
Total
Governmental
Funds
Assets
Cash and investment 33,437,815$ 31,804,089$ 65,241,904$
Taxes receivable 5,936,633 123,784 6,060,417
Accounts receivable 1,042,550 1,936,100 2,978,650
Due from other funds 148,712 50,000 198,712
Accrued interest receivable 122,010 1,470,404 1,592,414
Cash and investments held by fiscal agent - 421,510 421,510
Loans receivable - 6,099,429 6,099,429
Total assets 40,775,053$ 41,905,316$ 82,680,369$
Liabilities, Deferred Inflows of Resources
and Fund Balance
Liabilities:
Accounts payable 2,964,457$ 1,904,775$ 4,869,232$
Accrued liabilities 2,909,403 8,757 2,918,160
Due to other funds 49,694 148,712 198,406
Unearned revenue 1,108,400 127,826 1,236,226
Total liabilities 7,123,757 2,190,070 9,313,827
Deferred Inflows of Resources:
Unavailable revenue - 1,362,983 1,362,983
Fund balance:
Restricted for:
Debt service -2,226,898 2,226,898
Transportation projects -9,371,824 9,371,824
Affordable housing programs -8,698,494 8,698,494
Impact fee programs -3,126,925 3,126,925
Parkland development programs -4,709,560 4,709,560
Public art programs -591,097 591,097
Tourism programs -322,975 322,975
Public safety program -32,332 32,332
Assigned to:
Contingency fund 10,251,000 900,000 11,151,000
Establishment of Section 115 Trust 1,400,000 - 1,400,000
Revenue stabilization 1,000,000 - 1,000,000
Development services 899,277 8,521,320 9,420,597
Risk management 1,498,078 - 1,498,078
General government programs 10,384,119 - 10,384,119
Public safety 1,096,215 - 1,096,215
Unassigned 7,122,607 (149,162) 6,973,445
Total fund balance 33,651,296 38,352,263 72,003,559
Total liabilities, deferred inflows of resources
and fund balance 40,775,053$ 41,905,316$ 82,680,369$
City of San Luis Obispo, California
Balance Sheet
Governmental Funds
June 30, 2020
The accompanying notes are an integral part of these financial statements.
28
Total fund balance - governmental funds 72,003,559$
Capital assets at estimated historical cost $ 302,209,654
Accumulated depreciation (103,356,181)
198,853,473
1,362,983
1,121,796
24,604,009
221,878
821,031
Lease revenue bonds 19,778,125$
Lease purchase financing 745,246
Compensated absences 2,786,993
Conservation loan 323,347
Bond premium 1,306,652
Accrued interest payable 87,789
(25,028,152)
Net pension liability is not a current financial obligation and, therefore, is not reported
in the governmental funds. (129,868,761)
Net OPEB liability is not a current financial obligation and, therefore, is not reported
in the governmental funds. (3,771,723)
(1,284,467)
(5,604,958)
Total net position - governmental activities 133,430,668$
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, 2020
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.
Unavailable revenue recorded in the fund financial statements resulting from activities in which revenues
were earned but funds were not available are reclassified as revenues in the Government-Wide Financial
Statements.
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 16,571,064$ -$ 16,571,064$
Sales and use tax - Half Percent Sales Tax 7,554,375 - 7,554,375
Property tax 13,301,736 - 13,301,736
Transient occupancy tax 6,325,841 - 6,325,841
Utility users tax 5,439,144 - 5,439,144
Property tax in lieu of VLF 5,290,215 - 5,290,215
Franchise taxes 1,888,414 - 1,888,414
Business tax 2,995,263 - 2,995,263
Fines, forfeitures and penalties 239,048 - 239,048
Use of money and property 1,161,703 844,265 2,005,968
Subventions and grants 1,460,410 6,494,942 7,955,352
Charges for services 11,924,961 5,903,600 17,828,561
Miscellaneous 625,628 82,951 708,579
Total revenues 74,777,802 13,325,758 88,103,560
Expenditures:
Current:
General government 14,503,410 - 14,503,410
Public safety 30,174,346 42,649 30,216,995
Transportation 3,440,849 270,094 3,710,943
Leisure, cultural and social services 8,416,687 - 8,416,687
Community development 8,821,689 1,655,373 10,477,062
Debt service:
Principal - 1,605,239 1,605,239
Interest and fiscal charges - 993,697 993,697
Capital outlay:
Public safety 124,413 57,822 182,235
Transportation 2,374,927 4,037,614 6,412,541
Leisure, cultural and social services 915,093 298,589 1,213,682
Community development 84,415 701,102 785,517
General government 1,212,785 868,697 2,081,482
Total expenditures 70,068,614 10,530,876 80,599,490
Revenues over (under) expenditures 4,709,188 2,794,882 7,504,070
City of San Luis Obispo, California
Statements of Revenues, Expenditures, and
Changes in Fund Balances
Governmental Funds
For the Fiscal Year Ended June 30, 2020
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 3,347,367$ 6,108,418$ 9,455,785$
Transfers out (6,108,418) (1,457,467) (7,565,885)
Total other financing sources (uses) (2,761,051) 4,650,951 1,889,900
Net change in fund balance 1,948,137 7,445,833 9,393,970
Fund balance, beginning of year, as restated 31,703,159 30,906,430 62,609,589
Fund balance, end of year 33,651,296$ 38,352,263$ 72,003,559$
City of San Luis Obispo, California
Statements of Revenues, Expenditures, and
Changes in Fund Balances
Governmental Funds
For the Fiscal Year Ended June 30, 2020
The accompanying notes are an integral part of these financial statements.
31
Total net change in fund balance - governmental funds 9,393,970$
Expenditures for capital outlay - governmental funds $ 8,747,599
Deletion of capital assets (830,273)
Depreciation expense (6,846,927)
1,070,399
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:1,684,913
(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:4,951
160,762
Changes in actuarially determined claim liabilities for uninsured claims do not provide current
financial resources and are not reported in the governmental funds. 69,967
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:(58,571)
1,362,983
14,877,456
1,108,951
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 (24,515,265)
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 (461,126)
Total change in net position - governmental activities 4,687,712$
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, 2020
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.
Revenues that are not considered to be available are reported as unavailable revenues in
the governmental funds, however, these amounts are recognized in the Government-
Wide Statement of Activities. This amount represents the change in unavailable
revenues.
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 20,576,027$ 41,611,727$ 15,667,328$ 2,317,893$ 80,172,975$
Accounts receivable 2,737,529 2,436,884 29,360 2,333,700 7,537,473
Accrued interest receivable 75,357 152,591 61,332 8,492 297,772
Prepayments 3,245 - - - 3,245
Total current assets 23,392,158 44,201,202 15,758,020 4,660,085 88,011,465
Noncurrent assets:
475,629 278 4,041 - 479,948
Investment in joint venture 1,726,663 - - - 1,726,663
Capital assets:
Land 945,926 2,176,114 5,947,455 - 9,069,495
Infrastructure 104,827,285 91,849,913 28,716,364 221,744 225,615,306
Buildings and improvements 19,134,912 5,024,388 888,420 5,101,506 30,149,226
Equipment 5,842,674 5,793,983 1,103,958 9,021,099 21,761,714
Construction in progress 5,729,883 29,570,958 1,619,992 1 36,920,834
Total capital assets 136,480,680 134,415,356 38,276,189 14,344,350 323,516,575
Less accumulated depreciation (57,603,921) (44,460,654) (13,647,401) (8,308,545) (124,020,521)
Capital assets, net of
accumulated depreciation 78,876,759 89,954,702 24,628,788 6,035,805 199,496,054
Total noncurrent assets 81,079,051 89,954,980 24,632,829 6,035,805 201,702,665
Total assets 104,471,209 134,156,182 40,390,849 10,695,890 289,714,130
Deferred Outflows of Resources
Pension related 1,524,330 1,268,159 297,091 90,898 3,180,478
235,074 242,429 62,077 14,698 554,278
123,466 7,114 103,318 - 233,898
1,882,870 1,517,702 462,486 105,596 3,968,654
City of San Luis Obispo
Statement of Net Position
Business-Type Activities - Enterprise Funds
June 30, 2020
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 1,257,856$ 1,885,797$ 114,632$ 384,440$ 3,642,725$
Accrued liabilities 202,022 166,711 11,981 15,874 396,588
Compensated absences 163,030 159,654 19,488 15,515 357,687
Unearned revenue - - - 1,546,765 1,546,765
Interest payable 43,974 38,509 77,917 - 160,400
Due to other funds - - 306 - 306
Current portion of long-term debt 960,390 962,404 531,091 - 2,453,885
Total current liabilities 2,627,272 3,213,075 755,415 1,962,594 8,558,356
Noncurrent liabilities:
Compensated absences 69,871 68,424 8,352 6,650 153,297
Lease revenue bonds 11,890,915 5,187,019 4,743,322 - 21,821,256
Installment sale agreement - 4,919,405 - - 4,919,405
State loan/note payable - 16,923,702 3,763,139 - 20,686,841
Net pension liability 12,446,569 11,942,571 3,099,205 710,153 28,198,498
840,212 777,245 199,024 47,123 1,863,604
Total noncurrent liabilities 25,247,567 39,818,367 11,813,042 763,926 77,642,902
Total liabilities 27,874,839 43,031,442 12,568,457 2,726,520 86,201,258
Deferred Inflows of Resources
Pension related 282,145 184,032 47,123 11,159 524,459
263,195 282,114 72,239 17,104 634,652
545,340 466,146 119,362 28,263 1,159,111
Net Position
Net investment in capital assets 66,148,920 61,969,285 15,694,554 6,035,805 149,848,564
Restricted:
Debt service 475,629 278 4,041 - 479,948
Transportation projects - - - 2,010,898 2,010,898
Unrestricted 11,309,351 30,206,733 12,466,921 - 53,983,005
Total net position 77,933,900$ 92,176,296$ 28,165,516$ 8,046,703$ 206,322,415$
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, 2020
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 21,713,030$ 16,896,990$ 2,677,438$ 630,067$ 41,917,525$
Impact fees 3,723,460 2,031,476 - - 5,754,936
Fines and forfeitures - - 602,409 - 602,409
Other revenues 230,287 113,918 14,094 3,500 361,799
Total operating revenues 25,666,777 19,042,384 3,293,941 633,567 48,636,669
Operating expenses:
Salaries and benefits 4,638,948 4,869,963 1,465,774 357,718 11,332,403
Supplies and maintenance 1,252,083 1,752,068 387,749 282,917 3,674,817
Contract services 12,002,287 1,390,111 689,788 2,630,270 16,712,456
General government 1,592,154 1,711,224 537,277 276,806 4,117,461
Depreciation 2,640,219 2,899,058 634,365 592,039 6,765,681
Total operating expenses 22,125,691 12,622,424 3,714,953 4,139,750 42,602,818
Operating income (loss)3,541,086 6,419,960 (421,012) (3,506,183) 6,033,851
Nonoperating revenues (expenses)
Interest on investments, net 663,838 1,181,829 976,529 58,438 2,880,634
Grants - 78,815 - 3,087,251 3,166,066
Interest expense and fiscal charges (603,740) (452,719) (320,020) - (1,376,479)
Income (loss) from investment
in joint venture 153,949 - - - 153,949
Miscellaneous nonoperating
revenues (expenses)(184,582) (25,762) (110,391) (13,048) (333,783)
Total nonoperating revenues
(expenses)29,465 782,163 546,118 3,132,641 4,490,387
Income (loss) before transfers
and capital contributions 3,570,551 7,202,123 125,106 (373,542) 10,524,238
Transfers out (943,700)(718,500)(227,700)-(1,889,900)
Total transfers (943,700)(718,500)(227,700)-(1,889,900)
Change in net position 2,626,851 6,483,623 (102,594) (373,542) 8,634,338
Net position, beginning of year 75,326,539 85,692,673 28,268,110 8,420,245 197,707,567
Prior year restatements (19,490) - - - (19,490)
Net position, beginning of year,
as restated 75,307,049 85,692,673 28,268,110 8,420,245 197,688,077
Net position, end of year 77,933,900$ 92,176,296$ 28,165,516$ 8,046,703$ 206,322,415$
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, 2020
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 25,684,109$ 19,402,499$ 3,365,222$ 12,732$ 48,464,562$
(7,297,396) (2,199,468) (1,293,094) (2,764,787) (13,554,745)
(1,592,154) (1,711,224) (537,277) (276,806) (4,117,461)
(3,817,783) (4,002,503) (1,283,218) (300,633) (9,404,137)
Net cash provided by (used in)
operating activities 12,976,776 11,489,304 251,633 (3,329,494) 21,388,219
Operating grants received - 78,815 - 4,572,121 4,650,936
Transfers to other funds (943,700)(718,500)(227,700)-(1,889,900)
(943,700) (639,685) (227,700) 4,572,121 2,761,036
Cash flows from capital and related
financing activities:
(9,443,326) (16,051,683) (1,000,296) (231,546) (26,726,851)
Principal paid on debt financing (3,809,103) (928,643) (513,480) - (5,251,226)
Interest paid on debt financing (803,688) (456,630) (343,314) - (1,603,632)
Proceeds from issuance of debt - 14,845,739 - - 14,845,739
Net cash used in capital and
related financing activities (14,056,117) (2,591,217) (1,857,090) (231,546) (18,735,970)
Cash flows from investing activities:
Interest on investments, net 710,561 1,170,551 990,876 56,337 2,928,325
Net cash provided by
investing activities 710,561 1,170,551 990,876 56,337 2,928,325
(1,312,480) 9,428,953 (842,281) 1,067,418 8,341,610
22,364,136 32,183,052 16,513,650 1,250,475 72,311,313
21,051,656$ 41,612,005$ 15,671,369$ 2,317,893$ 80,652,923$
Enterprise Funds
City of San Luis Obispo, California
Statement of Cash Flows
Business-Type Activities - Enterprise Funds
For the Fiscal Year Ended June 30, 2020
Cash payments to suppliers for goods
and services
Cash payments to General Fund for
interfund services
Cash payments to employees for
services
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
Net cash provided by (used in)
noncapital financing activities
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, 2020
Page 2
Water Sewer Parking Transit Total
Operating income (loss) 3,541,086$ 6,419,960$ (421,012)$ (3,506,183)$ 6,033,851$
Depreciation 2,640,219 2,899,058 634,365 592,039 6,765,681
Accounts receivable 17,332 360,115 70,975 (2,167,600) (1,719,178)
Prepaid expense 6,076,600 - - - 6,076,600
Due to (from) other funds - - 306 - 306
Accounts payable (119,626) 942,711 (215,557) 148,400 755,928
Unearned revenue - - - 1,546,765 1,546,765
25,144 5,001 (38,287) 4,795 (3,347)
927,931 1,005,378 257,439 60,954 2,251,702
(131,910) (142,919) (36,596) (8,664) (320,089)
Net cash provided by (used in)
operating activities 12,976,776$ 11,489,304$ 251,633$ (3,329,494)$ 21,388,219$
Reconciliation of cash and investments to the balance sheet:
Cash and cash equivalents 20,576,027$ 41,611,727$ 15,667,328$ 2,317,893$ 80,172,975$
475,629 278 4,041 - 479,948
Total cash and investments 21,051,656$ 41,612,005$ 15,671,369$ 2,317,893$ 80,652,923$
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 5,281,647$
Cash and investment held by fiscal agent 30,864
Accounts receivable 15,877
Accrued interest receivable 14,851
Other assets 59,091
Capital assets, net of accumulated depreciation 756,522
Total assets 6,158,852$
Liabilities
Current liabilities:
Accounts payable 238,603$
Accrued liabilities 21,853
Other liabilities 2,430,600
Due to agency participants 3,467,796
Total liabilities 6,158,852$
City of San Luis Obispo, California
Statement of Net Position
Fiduciary Funds - Agency Funds
June 30, 2020
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, 2020
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: Loan Receivable 15
Note 5: Capital Assets 16
Note 6: Long Term Debt 19
Summary of Long-Term Debt 19
Governmental Activities Summary: 20
Revenue Bonds 20
Lease-Purchase Financing 21
2014 Energy Sources Conservation State Loan 22
Business-Type Activities Summary: 22
Revenue Bonds 22
Loans 24
Installment Sale Agreements 24
Note 7: Pension Plans 25
Agent-Multiple Employer Plan 25
General Information about the Pension Plan 25
Net Pension Liability 27
Changes in the Net Pension Liability 29
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions 30
Cost-Sharing Employer Plan 31
General Information about the Pension Plan 31
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions 32
Payable to the Pension Plan 36
39
City of San Luis Obispo, California
Notes to the Financial Statements
Table of Contents
June 30, 2020
Page 2
Note 8: Other Post-Employment Benefits (OPEB) 36
General Information about OPEB 36
Net OPEB Liability 37
Changes in the Net OPEB Liability 39
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB 40
Payable to the OPEB Plan 41
Note 9: Interfund Transactions 41
Note 10: Joint Ventures, Jointly Governed Organizations and Operating Agreements 42
Whale Rock Commission 42
San Luis Obispo Regional Transit Authority 43
San Luis Obispo Council of Governments 43
Nacimiento Water Supply Project 43
Note 11: Risk Management 44
California Joint Powers Insurance Authority 44
Self-Insurance Programs of the Authority 45
Adequacy of Protection 45
Self-Insurance 45
Note 12: Operating Lease 46
Note 13: Commitments and Contingencies 46
Litigation 46
Grant Awards 47
Regional Transit Authority Pension Expense 47
Note 14: Construction and Other Significant Commitments 47
Note 15: Fund Balance Deficiency 48
Note 16: Subsequent Events 48
Note 17: New Accounting Standards 48
Accounting Standards Adopted 48
New Accounting Standards 48
Note 18: Prior Period Adjustments 50
Note 19: COVID-19 PANDEMIC 50
40
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
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 45,920, 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, 2020
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, 2020
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 a ccount 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 141
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, 2020
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 refunding 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.
44
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 5
Note 1: Summary of Significant Accounting Policies (Continued)
Net Pension Liability. The City recognizes a net pension liability, which represents 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, 2019
Measurement Date June 30, 2019
Measurement Period July 1, 2018 to June 30, 2019
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, 2020
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, 2020
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.
x 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:
x 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.
x Second Year. Before the beginning of the second year of the two-year cycle, the Council reviews the progress
during the first year, adjusts 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, 2020 was the first year of the 2019-21 two-year cycle.
x Mid-Year Reviews. The Council formally reviews the City's financial condition and amends appropriations, if
necessary, each February.
x 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, 2020
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
provided 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 2020 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 Depa rtment to ensure that it maintained a development review process
that complied with State law considering 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, 2020, 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, 2020
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:
x Treasury bills and notes
x Government Sponsored Enterprises
x Commercial paper
x Repurchase agreements
x Bankers' acceptances
x Corporate medium-term notes
x Negotiable certificates of deposit
x Collateralized bank deposits
x Money market mutual funds
x 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, 2020
Page 10
Note 2: Cash and Investments (Continued)
At June 30, 2020, cash and investments consisted of the following:
At June 30, 2020, 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.
50
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 11
Note 2: Cash and Investments (Continued)
The following is a summary of the fair value measurements as of June 30, 2020:
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 $43,648,405 at June 30, 2020 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.
51
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
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:
x 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.
x 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:
x 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.
x Pre-qualifying the financial institutions, broker/dealers, intermediaries and advisors with which the City will do business.
52
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
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, 2020:
Concentration Credit Risk. The City’s policies contained in the Investment Policy and 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:
x No more than 5% of the City’s portfolio (exclusive of government agency issues or LAIF) shall be placed with any financial
institution.
53
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 14
Note 2: Cash and Investments (Continued)
x No more than 25% of the City’s portfolio shall be invested in collateralized certificates of deposit issued by financial
institutions.
x 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:
x 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.
x Tax Levies. Under the provisions of Proposition 13, the countywide 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.
x 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.
x 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.
x 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.
54
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 15
Note 3: Property Taxes (Continued)
x Tax Levy Apportionments. Due to the nature of the countywide maximum levy, it is not possible to identify general purpose
tax rates for specific entities. Under State legislation adopted after 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.
x 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: Loan Receivable
Loans receivable, including accrued interest comprised balances from the following programs, all of which are discussed
on the following pages.
A. Affordable Housing Loans - The City’s Affordable Housing Fund provides grants and loans to certain development
projects that meet the City’s affordability criteria. As of June 30, 2020, the Fund had 12 loans for affordable housing
developments with interest rates ranging from 0% to 4% and repayment terms of 30 to 57 years. These loans had a
remaining principal balance of $5.6 million, one of the loans for $215,000 is forgivable if certain criteria are met. The Fund
has secured more than 350 affordable housing units for City residents.
B. BEGIN Homeownership Loan - The City has provided deferred payment loans utilizing funding from the State of
California under the BEGIN program. On June 30, 2020, the Fund had three outstanding loans utilizing this program with
a principal balance of $90,000. These loans are provided for a term of 30 years with an annual interest rate of 3%.
C. Down Payment Assistance - In addition, the Fund has provided down payment assistance loans to individuals purchasing
affordable housing units. As of June 30, 2020, the Affordable Housing Fund had nine outstanding down payment assistance
loans with a principal balance of $431,155. These loans are provided for a term of 30 years with an annual interest rate of
3%.
55
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 16
Note 5: 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.
56
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 17
Note 5: Capital Assets (Continued)
Capital assets activity for the fiscal year ended June 30, 2020 was as follows:
57
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 18
Note 5: Capital Assets (Continued)
Depreciation expense was charged to functions/programs as follows:
58
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 19
Note 6: 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, 2020:
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 11.
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, 2019 Additions Deductions June 30, 2020 One Year
Governmental activities:
2012 Lease revenue refunding bonds 3,480,000$ -$ (250,000)$ 3,230,000$ 260,000$
2014 Lease revenue bonds 6,970,000 - (165,000) 6,805,000 170,000
2018 Lease revenue refunding bonds 10,254,025 - (510,900) 9,743,125 530,550
20,704,025 - (925,900) 19,778,125 960,550
Add: Unamortized bond premium 1,467,414 - (160,762) 1,306,652 -
Total revenue bonds 22,171,439 - (1,086,662) 21,084,777 960,550
Lease-purchase financing 1,413,939 - (668,693) 745,246 429,142
Compensated absences 2,728,422 58,571 2,786,993 1,909,895
Conservation Loan 413,667 - (90,320)323,347 91,236
Total long-term debt,
governmental activities 26,727,467$ 58,571$ (1,845,675)$ 24,940,363$ 3,390,823$
Business-type activities:
2012 Water revenue refunding bonds 2,070,000 - (485,000) 1,585,000 505,000
2018 Lease revenue refunding bonds 5,400,975 - (269,100) 5,131,875 279,450
2018 Water revenue refunding bonds 9,640,000 - (415,000) 9,225,000 440,000
17,110,975 - (1,169,100) 15,941,875 1,224,450
Add: Unamortized bond premium 2,431,682 - (188,468) 2,243,214
Total revenue bonds 19,542,657 - (1,357,568) 18,185,089 1,224,450
Loans 14,750,783 14,845,739 (3,462,685) 26,133,837 586,379
Installment sale agreements 6,181,902 - (619,440) 5,562,462 643,056
Compensated absences 545,228 - (34,244)510,984 357,687
Total long-term debt,
business-type activities 41,020,570 14,845,739 (5,473,937) 50,392,372 2,811,572
Total Government-wide 73,035,096$ 14,904,310$ (7,319,612)$ 75,332,735$ 6,202,395$
59
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 20
Note 6: 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, 2020, the principal amount outstanding on the bonds was $3,230,000. 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, 2020.
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, 2020, the unamortized premium was $181,273.
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, 2020, the principal amount outstanding
on the bonds was $6,805,000.
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, 2020, the unamortized premium was $157,353.
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, 2020, the principal amount outstanding that pertains to governmental activities was $9,743,125
of the total $14,875,000 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, 2020, the unamortized premium for governmental activities was $968,026.
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).
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 21
Note 6: Long Term Debt (Continued)
At June 30, 2020, 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 $528,287 included in equipment at
June 30, 2020. 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. The City completed
the payments of this lease in the fiscal year ending June 30, 2020.
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 $190,563 included in equipment at June 30, 2020. 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. The City completed the payments of this lease
in the fiscal year ending June 30, 2020.
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 $257,158
included in equipment at June 30, 2020. 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, 2020, the
principal amount outstanding is $236,055.
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 $39,675 included in equipment at June 30,
2020. 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, 2020, the principal amount outstanding is $59,663.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 22
Note 6: 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, 2020, the principal amount outstanding is $449,528.
At June 30, 2020, 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,
2020, the principal amount outstanding is $323,347.
At June 30, 2020, 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, 2020, the principal amount outstanding on the bonds was $1,585,000. 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, 2020.
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, 2020, the unamortized premium was $217,794.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 23
Note 6: 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, 2020, principal and interest paid, and total customer net revenues
were $567,800 and $3,121,683, 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, 2020, the principal amount outstanding that pertains to business-type activities was $5,131,875
of the total $14,875,000 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, 2020, the unamortized premium that pertains to business-type activities was
$512,613.
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, 2020, the principal amount outstanding on the bonds was $9,225,000.
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, 2020, principal and interest paid, and total customer net revenues
were $883,900 and $3,121,683, 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, 2020, the unamortized premium was
$1,512,807.
At June 30, 2020, the aggregate maturities of the business-type revenue bonds were as follows:
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 24
Note 6: 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, 2020, the principal amount outstanding on the loan was
$4,047,180.
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. The City completed the payments of this lease in the fiscal year ending June 30, 2020.
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, 2020, the
principal amount outstanding on the loan was $7,240,918.
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, 2020, principal and interest paid, and total customer net revenues
were $532,910 and $8,355,453, 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 1.8%. As of June 30, 2020, the City had drawn down
$14,845,739 of the loan funds.
At June 30, 2020, 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, 2020, the principal amount outstanding on the loan was $675,000.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 25
Note 6: 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, 2020,
the principal amount outstanding on the loan was $4,887,462.
At June 30, 2020, 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 7: 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, 2020 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.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 26
Note 7: 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, 2020, 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, 2019, 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. Employees that are classified as unrepresented management or unrepresented
confidential contribute 1.5% of pay toward the cost of the City’s share of the annual required contribution.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 27
Note 7: 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, 2019, using an annual actuarial valuation as of June 30,
2018 rolled forward to June 30, 2019 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, 2018 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.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 28
Note 7: Pension Plans (Continued)
In determining the long-term expected rate of return, CalPERS considered both short-term and long-term market return expectations
as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound
(geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block
approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for
each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same
present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return
was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.
The table below reflects the long-term expected real rate of return by asset class.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 29
Note 7: 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, 2018 218,270,720$ 136,478,311$ 81,792,409$
Changes during the year:
Service cost 4,042,717 - 4,042,717
Interest on the total pension liability 15,531,812 - 15,531,812
Changes in assumptions - - -
Differences between expected and
actual experience 2,966,923 - 2,966,923
Net plan to plan resource movement - - -
Contribution - employer - 9,361,882 (9,361,882)
Contribution - employee - 1,775,245 (1,775,245)
Net investment income - 9,124,520 (9,124,520)
Benefit payments, including refunds - - -
of employee contributions (12,061,701) (12,061,701) -
Administrative expense - (97,394) 97,394
Other Miscellaneous Income/(Expense)- 316 (316)
Net changes 10,479,751 8,102,868 2,376,883
Balance at June 30, 2019 228,750,471$ 144,581,179$ 84,169,292$
69
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 30
Note 7: Pension Plans (Continued)
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
For the year ended June 30, 2020, the City’s pension expense for the Miscellaneous Plan was $14,888,537. At June 30, 2020, 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 $7,709,918 will be recognized as
a reduction of the net pension liability in the year ended June 30, 2021. 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, 2020, the City reported a payable of $0 for the outstanding amount of contributions to the pension plan required for the
year ended June 30, 2020.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 31
Note 7: 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, 2020, are summarized as follows:
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 32
Note 7: 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. Members of the International Association of Firefighters,
Local 3523 contribute 1.5% of pay toward the cost of the City’s share of the annual required contribution.
For the year ended June 30, 2020, the contributions recognized as part of pension expense were $8,348,780.
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
As of June 30, 2020, the City reported a net pension liability for its proportionate share of the Plan’s net pension liability of
$73,897,967.
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, 2019, 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, 2018 rolled forward to June 30, 2019 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, 2018 and 2019 was as follows:
72
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 33
Note 7: Pension Plans (Continued)
For the year ended June 30, 2020, the City recognized pension expense of $11,886,126 for the Safety Plan. At June 30, 2020, 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 $7,167,638 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, 2021. Other amounts reported as deferred outflows
of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
73
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 34
Note 7: Pension Plans (Continued)
Actuarial Assumptions. The total pension liabilities in the June 30, 2018 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.
74
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 35
Note 7: 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:
75
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 36
Note 7: 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, 2020, the City reported a payable of $0 for the outstanding amount of contributions to the pension plan required for the
year ended June 30, 2020
Note 8: 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 $136 per month per retiree in calendar year 2019 and $139
per month per retiree in calendar year 2020. 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
one 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.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 37
Note 8: Other Post-Employment Benefits (OPEB) (Continued)
Employees Covered. At June 30, 2019, 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, 2020, the City’s contributions totaled $1,656,882.
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, 2019 using an actuarial valuation as of June 30, 2019. 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, 2019.
77
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 38
Note 8: 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.
78
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 39
Note 8: Other Post-Employment Benefits (OPEB) (Continued)
Changes in the Net OPEB Liability
The changes in the net OPEB liability for the June 30, 2019 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.
79
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 40
Note 8: 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, 2020, the City’s OPEB expense was $688,967. At June 30, 2020, 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 $1,656,882 are reported as deferred outflows of resources and will be
recognized as a reduction of the net OPEB liability in the year ended June 30, 2021. Other amounts reported as deferred outflows of
resources and deferred inflows of resources related to OPEB will be recognized as OPEB expense as follows:
Fiscal Year
Ended June 30 Amount
2021 (295,846)$
2022 (295,847)
2023 (258,366)
2024 (244,368)
2025 (251,721)
Thereafter (553,779)
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 41
Note 8: Other Post-Employment Benefits (OPEB) (Continued)
Payable to the OPEB Plan
At June 30, 2020, the City reported a payable of $0 for the outstanding amount of contributions to the OPEB plan required for the
year ended June 30, 2020.
Note 9: Interfund Transactions
Interfund receivable and payable balances as of June 30, 2020 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, 2020 consist of the following:
81
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 42
Note 10: 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 the
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 is 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, 2020:
82
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 43
Note 10: 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
2019-20 the City contributed approximately $603,019 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 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.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 44
Note 10: 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. In addition, the District sold water revenue bonds in the amount of $182 million. These bonds were refinanced in
May 2018. Based on the City’s share of construction costs, debt service and operating and maintenance, the following summarizes
the City’s Project obligations for 2019-20 and five-year projections for the 2018 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 11: 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.
84
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 45
Note 11: 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 re-evaluated 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 claim’s 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 2019-20. 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.
85
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 46
Note 11: Risk Management (Continued)
The last actuarial study to determine the undiscounted outstanding claims liability was completed for the year ended June 30, 2019.
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, 2020 is calculated as follows:
Note 12: 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
$5,323.91 for the year ended June 30, 2020. The final lease payment was made during the fiscal year and there is no remaining
obligation as of June 30, 2020.
Note 13: 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.
86
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 47
Note 13: 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 Re gional Transit Authority (SLORTA) (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% of the total expense. 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 14: Construction and Other Significant Commitments
Construction and other significant commitments as of June 30, 2020, 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.
87
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 48
Note 15: Fund Balance Deficiency
At June 30, 2020, the City had a negative fund balance in the following funds:
Note 16: Subsequent Events
Events subsequent to June 30, 2020 have been evaluated through December 31, 2020, which is the date that the financial statements
are available to be issued. Management identified no subsequent events that required disclosure.
Note 17: New Accounting Standards
Accounting Standards Adopted
In 2020, GASB issued Statement No 95, Postponement of the Effective Dates of Certain Authoritative Guidance. Hence, no new
accounting standards applicable to the Agency during the current fiscal year due to the spread of COVID-19.
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, 2019. 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, 2020. 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, 2020. Management will determine the impact of this
statement on its financial statements with the 2021-22 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, 2019 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, 2020
Page 49
Note 17: New Accounting Standards (Continued)
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, 2021 with earlier implementation encouraged.
Management has not yet determined the impact of this Statement on its financial statements.
In January 2020, GASB issued Statement No. 92, Omnibus 2020. Statement No. 92 is to enhance comparability in accounting and
financial reporting and to improve the consistency of authoritative literature by addressing practice issues that have been identified
during implementation and application of certain GASB Statements. The provisions of Statement No. 92 has multiple effective dates.
Management has not yet determined the impact of this Statement on its financial statements.
In March 2020, GASB issued Statement GASB No. 93, Replacement of Interbank Offered Rates. Statement No.93 requires a
government to terminate hedge accounting when it renegotiates or amends a critical term of a hedging derivative instrument, such
as the reference rate of a hedging derivative instrument’s variable payment. In addition, in accordance with Statement No. 87, Leases,
as amended, replacement of the rate on which variable payments depend in a lease contract would require a government to apply the
provisions for lease modifications, including remeasurement of the lease liability or lease receivable. The provisions of Statement
No. 93 has multiple effective dates. Management has not yet determined the impact of this Statement on its financial statements.
In March 2020, GASB issued GASB Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment
Arrangements. Statement No. 94 is to improve financial reporting by addressing issues related to public-private and public-public
partnership arrangements (PPPs), and also provides guidance for accounting and financial reporting for availability payment
arrangements (APAs). The provisions of Statement No. 94 are effective for fiscal years beginning after June 15, 2022. Management
has not yet determined the impact of this Statement on its financial statements.
In May 2020, GASB issued GASB Statement No. 96, Subscription-Based Information Technology Arrangements. Statement No. 96
provides guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs)
for government end users (governments). The provisions of Statement No. 96 are effective for fiscal years beginning after June 15,
2022. Management has not yet determined the impact of this Statement on its financial statements.
In June 2020, GASB issued GASB Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting
for Internal Revenue Code Section 457 Deferred Compensation Plans—an amendment of GASB Statements No. 14 and No. 84, and
a supersession of GASB Statement No. 32. Statement No. 97 will result in more consistent financial reporting of defined contribution
pension plans, defined contribution OPEB plans, and other employee benefit plans, while mitigating the costs associated with
reporting those plans. The requirements will also enhance the relevance, consistency, and comparability of (1) the information related
to Section 457 plans that meet the definition of a pension plan and the benefits provided through those plans and (2) investment
information for all Section 457 plans. The provisions of Statement No. 97 has multiple effective dates. Management has not yet
determined the impact of this Statement on its financial statements.
89
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2020
Page 50
Note 18: Prior Period Adjustments
During 2020, a prior period adjustment a was made to properly record the City’s investment in the Whale Rock Reservoir, a joint
venture, due to a prior year adjustment on the Whale Rock Commission not properly reflected in the City’s financial statements.
The prior period adjustment in the General Fund was made to properly record the cash transfer between the General Fund and
Whale Rock Commission in prior year, which was not reflected in the City’s financial statements. Additionally, an adjustment
was made to properly record the loan receivables in Affordable Housing, which the City expensed in the past years.
Note 19: COVID-19 PANDEMIC
During December 2019, the Novel Corona Virus Disease (COVID-19) was discovered and subsequently declared a world-wide
pandemic by the World Health Organization on March 11, 2020. On March 4, 2020, California State Governor Gavin Newsom
proclaimed a State of Emergency as a result of the threat of the COVID-19 in the State of California, leading to the San Luis
Obispo County Health Officer issuing a shelter-at-home order on March 18, 2020 and the City Council declaring a health
emergency on March 17, 2020. This halted all business within San Luis Obispo County outside of essential activities and largely
stifled economic activity in the last quarter of the 2019-20 fiscal year.
COVID-19 had an immediate and severe impact on two of the City’s tax revenues. While 2019-20 property tax revenues were
inoculated from COVID-19 due to the lien date (and change in California Consumer Price Index) of January 1, 2019, preceding the
onset of COVID-19 in March 2020, as clearly evident in the City’s basic financial statements, sales tax, transient occupancy tax
(TOT), and property transfer tax were susceptible to the economic impact of COVID-19. The reduction in sales tax revenue including
the Local Revenue Measure reflects a decrease of $2.3 million from the prior year. Non-tax revenues were also impacted by COVID-
19, largely in charges for services, which reflected closure of City parking garages, waiver of transit fares and a 36% revenue decline
in Parks & Recreation as most of the programs offered were cancelled and facilities such as the Swim Center and the Golf Course
closed due to the shelter-at-home order.
In response to the economic impact and the resultant structural imbalance of the City’s General Fund brought on by COVID-19, the
City activated the Fiscal Health Contingency Plan. Under this measure, a hiring, purchasing, and travel chill is activated, and
additional approvals are necessary to curtail spending. In addition, the City Council deferred or defunded several capital expenditures
in order to balance the budget. These actions allowed the City to finish 2019-20 with its reserve levels fully intact and a healthy fund
balance to enter the new fiscal year in a strong fiscal position and ready to encounter the remaining uncertainties with an ongoing
health emergency.
90
REQUIRED SUPPLEMENTARY INFORMATION
(UNAUDITED)
91
92
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund
For the Fiscal Year Ended June 30, 2020
Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
REVENUES:
Taxes and franchise fees:
Sales and use tax - general 17,675,000$ 17,675,000$ 16,571,064$ (1,103,936)$
Sales and use tax - Half Percent Sales Tax 7,840,000 7,840,000 7,554,375 (285,625)
Property tax 12,876,101 12,876,101 13,301,736 425,635
Transient occupancy tax 8,033,001 8,033,001 6,325,841 (1,707,160)
Utility users tax 5,854,000 5,854,000 5,439,144 (414,856)
Property tax in lieu of VLF 5,064,000 5,064,000 5,290,215 226,215
Franchise taxes 1,558,000 1,558,000 1,888,414 330,414
Business tax 3,006,400 3,006,400 2,995,263 (11,137)
Total taxes 61,906,502 61,906,502 59,366,052 (2,540,450)
Fines, forfeitures and penalties 221,715 221,715 239,048 (17,333)
Use of money and property 230,000 230,000 1,161,703 931,703
Subventions and grants:
Other State and Federal grants 900,000 1,297,750 1,043,951 (253,799)
Other subventions and grants 385,000 385,000 416,459 31,459
Total subventions and grants 1,285,000 1,682,750 1,460,410 (222,340)
93
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2020
Page 2
Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
Charges for services:
Public safety:
Police 508,930 632,841 802,924 170,083
Fire:
Medical emergency recovery 509,346 509,346 531,771 22,425
Fire safety/hazardous materials permits 901,677 901,677 881,833 (19,844)
Other fire revenues 5,890 5,890 21,083 15,193
Community development:
Planning and zoning fees 1,318,000 2,003,758 1,503,301 (500,457)
Construction plan and check inspections 3,845,000 4,157,489 4,130,938 (26,551)
Infrastructure plan check and inspections 1,800,000 1,800,000 1,638,456 (161,544)
Culture and recreation:
Adult athletic fees 324,637 324,827 117,958 (206,869)
Youth athletic fees 699,945 700,355 555,305 (145,050)
Rental and use fees 333,562 333,562 262,276 (71,286)
Aquatics 277,779 279,903 145,856 (134,047)
Golf course 288,122 288,122 166,916 (121,206)
General government:
Other service charges 527,620 527,620 560,934 33,314
Total charges for services 11,340,508 12,465,390 11,319,551 (1,145,839)
Impact Fees -- 605,410 605,410
Other revenues 2,177,502 2,295,446 625,628 (1,669,818)
Total Revenues 77,161,227 78,801,803 74,777,802 (4,058,667)
94
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2020
Page 3
Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
Expenditures:
Public Safety:
Police protection:
Administration 1,982,936 2,089,214 1,997,594 91,620
Investigations 2,738,091 2,730,388 2,786,997 (56,609)
Neighborhood services 263,061 263,629 229,238 34,391
Support services 2,595,174 2,660,634 2,484,815 175,819
Patrol services 9,493,775 9,664,281 9,337,298 326,983
Traffic safety 939,023 945,345 796,078 149,267
Total police protection 18,012,060 18,353,490 17,632,020 721,470
Fire and environmental safety:
Administration 1,254,699 2,274,546 966,567 1,307,979
Emergency response 10,294,205 10,589,387 10,175,128 414,259
Fire Apparatus Services 437,775 429,724 379,185 50,539
Hazard protection 918,867 973,468 885,601 87,867
Training 138,725 187,229 73,793 113,436
Disaster preparedness 6,800 150,419 62,052 88,367
Total fire and environmental safety 13,051,071 14,604,774 12,542,326 2,062,448
Total public safety 31,063,131 32,958,264 30,174,346 2,783,918
Transportation:
Transportation planning and engineering 906,874 949,992 896,196 53,796
Street and sidewalk maintenance 1,425,568 1,480,278 1,144,746 335,532
Traffic signals and street lights 550,074 539,518 519,399 20,119
Creek and flood protection 1,181,100 1,140,757 880,508 260,249
Total transportation 4,063,616 4,110,545 3,440,849 669,696
95
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2020
Page 4
Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
Culture and Recreation:
Recreation programs:
Recreation administration 899,015 891,204 790,083 101,121
Aquatics/Sinsheimer park facilities 484,246 501,397 402,346 99,051
Children's services 984,855 962,975 853,586 109,389
Facilities 238,920 238,920 190,312 48,608
Special events - 10,200 7,238 2,962
Recreational sports 637,048 609,695 474,519 135,176
Golf course 646,001 646,427 594,910 51,517
Ranger services 544,076 563,026 495,332 67,694
Maintenance programs:
Swim center maintenance 449,215 449,699 504,654 (54,955)
Parks and landscape maintenance 2,736,466 2,881,987 2,587,151 294,836
Tree maintenance 651,790 950,277 830,659 119,618
Cultural and social service programs: Human relations
Human relations 367,000 367,000 353,546 13,454
Cultural activities 337,601 337,601 332,351 5,250
Total leisure, cultural and social services 8,976,233 9,410,407 8,416,687 993,720
Community Development:
Planning:
Commissions and communities 51,453 52,295 15,514 36,781
Community development administration 781,653 816,296 867,164 (50,868)
Long-range planning -7,500114,993 (107,493)
Development review 2,624,510 2,554,858 1,062,439 1,492,419
Development services - 21,161 1,003,441 (982,280)
Natural resource protection 760,449 757,574 622,845 134,729
Construction regulation:
Building and safety 1,637,404 2,677,028 2,269,498 407,530
CIP project engineering 2,026,791 2,030,878 2,208,458 (177,580)
Economic health:
Community promotion 405,302 409,006 394,024 14,982
Economic development 294,691 420,966 263,313 157,653
Total community development 8,582,253 9,747,563 8,821,689 925,874
96
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2020
Page 5
Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
General Government:
Legislation:
Council 159,473 159,446 157,339 2,107
General administration:
City administration 1,135,820 1,288,075 1,281,150 6,925
Public works administration 1,131,548 1,138,987 945,448 193,539
Legal services:
City attorney 827,237 954,774 980,784 (26,010)
City clerk services:
Administration and records 575,437 588,457 573,612 14,845
Organization support services:
Human resource administration 1,361,145 1,413,629 1,217,672 195,957
Risk management 15,200 39,054 5,402 33,652
Finance and administration 2,128,029 6,359,208 6,864,564 (505,356)
Revenue management 351,868 344,782 296,855 47,927
Accounting 1,029,258 1,004,111 903,100 101,011
Finance non-departmental 650,536 650,536 166,196 484,340
Network services 2,912,312 2,897,479 2,951,172 (53,693)
Support services 202,507 202,507 40,028 162,479
Wellness program 18,600 18,760 3,114 15,646
Building and vehicle maintenance:
Buildings 1,235,921 1,275,746 1,157,246 118,500
Vehicle and equipment maintenance 1,183,712 1,154,294 1,077,189 77,105
Total general government before cost reimburseme 14,918,605 19,489,843 18,620,871 868,972
Cost reimbursement (Note 3 to RSI)(4,117,461) (4,117,461) (4,117,461)-
Total general government 10,801,144 15,372,382 14,503,410 868,972
Capital Outlay:
Public safety - 49,010 124,413 (75,403)
Transportation -3,159,150 2,374,927 784,223
Culture and recreation -992,776 915,093 77,683
Community development - 45,683 84,415 (38,732)
General government - 1,556,891 1,212,785 344,106
Total capital outlay - 5,941,878 4,711,633 1,230,245
Total Expenditures 63,486,376 77,541,039 70,068,614 7,472,425
Excess of Revenues Over Expenditures 13,674,851 1,260,764 4,709,188 3,448,424
97
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2020
Page 6
Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
Other Financing Sources (Uses)
Transfers in - 14,273,653 3,347,367 (10,926,286)
Transfers out (12,317,507)(12,756,407)(6,108,418)6,647,989
Total other financing uses (12,317,507) 1,517,246 (2,761,051) (4,278,297)
Net Change in Fund Balance 1,357,344 2,778,010 1,948,137 (829,873)
Fund Balance, Beginning of the Year, as restated 31,703,159 31,703,159 31,703,159
Fund Balance, End of Year 33,060,503$ 34,481,169$ 33,651,296$
98
99
Fiscal Year 2019-20 2018-19 2017-18
Measurement Period 2018-19 2017-18 2016-17
Total pension liability:
Service Cost 4,042,717$ 4,328,129$ 4,124,832$
Interest on total pension liability 15,531,812 14,778,918 14,197,897
Difference between expected and actual experience 2,966,923 1,445,049 694,843
Changes in assumptions - (1,292,326) 11,219,603
Benefit payments, including refunds of employee contributions (12,061,701) (10,740,816) (10,161,053)
Net change in total pension liability 10,479,751 8,518,954 20,076,122
Total pension liability - beginning 218,270,720 209,751,766 189,675,644
Total pension liability - ending (a)228,750,471$ 218,270,720$ 209,751,766$
Plan fiduciary net position:
Contributions - employer 9,361,882$ 6,693,987$ 6,776,849$
Contributions - employee 1,775,245 1,820,697 1,841,331
Net investment income 9,124,520 10,820,033 13,053,453
Benefit payments (12,061,701) (10,740,816) (10,161,053)
Net plan to plan resource movement - (316) (2,936)
Administrative expense (97,394) (200,184) (172,935)
Other miscellaneous income/(expense)316 (380,153)
Net change in plan fiduciary net position 8,102,868 8,013,248 11,334,709
Plan fiduciary net position - beginning 136,478,311 128,465,063 117,130,354
Plan fiduciary net position - ending (b)144,581,179$ 136,478,311$ 128,465,063$
Net pension liability (asset) - ending (a) - (b)84,169,292$ 81,792,409$ 81,286,703$
Plan fiduciary net position as a percentage of the total pension
liability 63.20% 62.53% 61.25%
Covered payroll 22,951,725 23,736,588 21,841,841
Net pension liability as percentage of covered payroll 366.72% 344.58% 372.16%
* Fiscal year 2020 was the 6th 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, 2019.
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 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
and 2019. 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 Changes in the Net Pension Liability and Related Ratios
Miscellaneous Agent Multiple-Employer Plan
June 30, 2020
Last 10 Years *
100
2016-17 2015-16 2014-15
2015-16 2014-15 2013-14
3,580,882$ 3,578,172$ 3,703,087$
13,688,523 13,193,597 12,756,967
(1,160,933) (2,433,791)
(3,057,724)
(9,476,508) (8,808,668) (8,258,611)
6,631,964 2,471,586 8,201,443
183,043,680 180,572,094 172,370,651
189,675,644$ 183,043,680$ 180,572,094$
6,122,173$ 5,027,356$ 4,631,254$
1,666,606 1,509,834 1,664,654
677,557 2,673,657 17,746,607
(9,476,508) (8,808,668) (8,258,611)
(72,044) (133,042)
(1,082,216) 269,137 15,783,904
118,212,570 117,943,433 102,159,529
117,130,354$ 118,212,570$ 117,943,433$
72,545,290$ 64,831,110$ 62,628,661$
61.75% 64.58% 65.32%
20,499,668 19,769,997 19,235,818
353.89% 327.93% 325.58%
101
Fiscal Year 2019-20 2018-19 2017-18 2016-17
Acuarially determined contribution 7,709,918$ 7,093,882$ 6,693,987$ 6,776,849$
Contributions in relation to the actuarially
determined contribution (7,709,918) (9,361,882) (6,693,987) (6,776,849)
Contribution deficiency (excess)-$ (2,268,000)$ -$ -$
Covered payroll 21,588,085 22,951,725 23,736,588 21,841,841
Contributions as percentage of covered payroll 35.71% 40.79% 28.20% 31.03%
Actuarial Cost Method Entry Age Normal
Amortization Method
Amortization Period
Asset Valuation Method
Inflation 2.75%
Salary Increases Varies by Entry Age and Service
Payroll Growth 3.00%
Discount Rate
Retirement Age CalPERS 1997-2011 experience study
Mortality CalPERS 1997-2011 experience study
City of San Luis Obispo, California
Schedule of the Pension Plan Contributions
Miscellaneous Agent Multiple-Employer Plan
June 30, 2020
The actuarial methods and assumptions used to set the actuarially determined contributions for fiscal year 2019-20 contributions
rates are as follows:
Pre-retirement and post-retirement mortality rates include 20 years of
projected mortality improvement using Scale BB published by the Society
of Actuaries.
7.375% Net of Pension Plan Investment and Administrative Expenses
* Fiscal year 2020 was the 6th year of implementation. Therefore, only seven 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, 2019.
Last 10 Years *
For details, see June 30, 2016 CalPERS Funding Valuation Report
For details, see June 30, 2016 CalPERS Funding Valuation Report
102
2015-16 2014-15 2013-14
6,122,173$ 5,027,356$ 4,631,254$
(6,122,173) (5,027,356) (4,631,254)
-$ -$ -$
20,499,668 19,769,997 19,235,818
30.97% 25.43% 24.08%
103
Fiscal Year 2019-20 2018-19 2017-18
Measurement Period 2018-2019 2017-18 2016-17
Proportion of the Collective Net Pension Liability 0.7212% 1.2261% 1.1943%
Proportionate Share of the Collective Net Pension Liability 73,897,967$ 71,940,534$ 71,364,346$
Covered payroll 11,197,562$ 11,246,306$ 10,614,437$
Proportionate share of the net pension liability as percentage of covered
payroll 659.95% 639.68% 672.33%
Plan fiduciary net position as a percentage of the total pension liability 75.26% 75.26% 73.31%
*-Fiscal year 2015 was the first year of implementation, therefore only six 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, 2018 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 and 2019. 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, 2020
Last 10 Years *
104
2016-17 2015-16 2014-15
2015-16 2014-15 2013-14
1.2510% 1.3654% 1.3754%
64,792,760$ 56,260,280$ 51,592,420$
10,643,123$ 10,849,863$ 10,768,119$
608.78% 518.53% 479.12%
74.06% 78.40% 79.82%
105
Fiscal Year 2019-20 2018-19 2017-18 2016-17
Contractually required contribution (actuarially determined)7,167,638$ 6,416,780$ 5,910,345$ 5,549,915$
Contribution in relation to the actuarially determined contributions (7,167,638) (8,348,780) (5,910,345) (6,299,915)
Contribution deficiency (excess)-$ (1,932,000)$ -$ (750,000)$
Covered payroll 9,488,971$ 11,197,562$ 11,246,306$ 10,614,437$
Contributions as a percentage of covered payroll 75.54% 74.56% 52.55% 59.35%
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.
*- Fiscal year 2015 was the first year of implementation, therefore only seven years are shown
City of San Luis Obispo, California
Schedule of the City's Pension Contributions
Safety Cost-Sharing Plan
As of June 30, 2020
Last 10 Years *
106
2015-16 2014-15 2013-14
5,074,217$ 4,350,871$ 4,226,211$
(5,824,217) (4,650,871) (5,161,211)
(750,000)$ (300,000)$ (935,000)$
10,643,123$ 10,849,863$ 10,768,119$
54.72% 42.87% 47.93%
107
Fiscal Year 2019-20 2018-19 2017-18
Measurement Period 2018-19 2017-18 2016-17
Total OPEB liability:
Service Cost 477,538$ 463,629$ 450,125$
Interest on total OPEB liability 935,528 891,794 856,436
Difference between expected and actual experience (2,085,962)
Changes in assumptions 21,857
Benefit payments, including refunds of employee
contributions (677,824) (765,000) (827,500)
Net change in total OPEB liability (1,328,863) 590,423 479,061
Total OPEB liability - beginning 13,721,056 13,130,633 12,651,572
Total OPEB liability - ending (a)12,392,193$ 13,721,056$ 13,130,633$
Plan fiduciary net position:
Contributions - employer 677,824$ 1,221,000$ 1,493,996$
Net investment income 392,852 439,828 469,883
Benefit payments (677,824) (765,000) (827,500)
Administrative expense (1,364) (10,170) (2,387)
Net change in plan fiduciary net position 391,488 885,658 1,133,992
Plan fiduciary net position - beginning 6,365,378 5,479,720 4,345,728
Plan fiduciary net position - ending (b)6,756,866$ 6,365,378$ 5,479,720$
Plan net OPEB liability - ending (a) - (b)5,635,327$ 7,355,678$ 7,650,913$
Plan fiduciary net position as a percentage of the total OPEB
liability 54.53%46.39%41.73%
Covered-employee payroll 33,429,600$ 33,790,437$ 33,722,592$
Plan net OPEB liability as percentage of covered payroll 16.86%21.77%22.69%
Changes in assumptions. As of June 30, 2019 measurement date, the mortality improvement scale was updated to Scale
MP-2019. Medical plan at retirement estimated using weighted premium of recent retirees; updated based on retirements
during 2015-2019
* 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, 2019 measurement date.
Prepared for the City of San Luis Obispo OPEB Plan
an Agent Multiple-Employer Defined Benefit OPEB Plan
As of June 30, 2020
Last 10 Years *
Schedule of Changes in the Net OPEB Liability and Related Ratios
108
Fiscal Year 2019-20 2018-19 2017-18
1,190,000$ 1,154,000$ 1,221,000$
(1,656,882) (677,824) (1,221,000)
Contribution deficiency (excess)(466,882)$ 476,176$ -$
Covered-employee payroll 33,077,056$ 33,429,600$ 33,790,437$
Contributions as a percentage of covered payroll 3.60%3.45%3.61%
Contributions paid as of June 30, 2020 are deferred to June 30, 2021.
Valuation date June 30, 2017
Actuarial Cost Method Entry Age Normal, Level % of pay
Amortization Method Level % of pay
Amortization Period Average 14.7 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, 2020
Last 10 Years *
Schedule of Employer OPEB Contributions
Actuarially determined contribution
Contributions in relation to the actuarially determined
contributions
109
City of San Luis Obispo, California
Notes to Required Supplementary Information
June 30, 2020
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, 2020 expenditures exceeded appropriations in the General Fund as noted below.
Department/Division Budget Variance
Police Protection:
Investigations 56,609$
Maintenance programs:
Swim center maintenance 54,955
Planning:
Community development administration 50,868
Long-range planning 107,493
Development services 982,280
Construction regulation:
CIP project engineering 177,580
Legal services:
City attorney 26,010
Organization support services:
Finance and administration 505,356
Network services 53,693
Capital Outlay:
Public safety 75,403
Culture and recreation (77,683)
Community development 38,732
110
OTHER SUPPLEMENTARY INFORMATION
AND COMBINING AND INDIVIDUAL FUND
STATEMENTS AND SCHEDULES
111
112
Revenues:
Sales and use tax - Measure G 1/2 cent add-on tax 7,554,375$
Use of money and property 174,495
Total revenues 7,728,870
Expenditures:
Operating Programs:2,237,989
Total Operating Programs 2,237,989
Capital Programs:
Open Space Preservation 123,030
Bicycles and Pedestrian Improvements 670,484
Traffic Congestin/Relief/Safety Improvements 50,393
Public Safety 1,068,158
Nieghborhood Street Paving 1,684,203
Code Enforcement 19,836
Flood Protection 32,999
Parks & Recreation 975,874
Other Vial Services and Capital Projects 132,986
Total Capital Expenditures 4,757,963
Net change in fund balance 732,918
Fund balance, beginning of year 6,329,722
Fund balance, end of year 7,062,640$
* 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, 2020
113
Page 2
Revenues Budget Actual
$0.005 Sales Tax 7,840,000$ 7,554,375$
Investment Income 174,495
7,840,000$ 7,728,870$
Expenditures
Operating Programs:
Open Space Wildfire Fuel Reduction -$ -$
Ranger Services (FTE = 2)146,474 146,474
Transportation Planning and Engineering (FTE = 1.6)200,678 200,678
Signal and Light Maintenance (FTE = 1)109,598 109,598
PulsePoint CPR Software - -
Patrol Services (FTE = 4)613,991 613,991
CIP Project Engineering (FTE = 1)101,324 101,324
Streets and Sidewalk Maintenance (FTE = 1)76,693 76,693
Building and Safety (FTE = 3)289,863 289,863
Creek and Flood Protection (FTE = 6)636,534 636,534
Parks and Landscape Maintenance (FTE = 1)62,834 62,834
2,237,989$ 2,237,989$
Capital Programs:Budget Actual Encumbrances Carryover
Open Space Preservation
Open Space Acquisition 68,189$ 35,663$ 3,579$ 28,947$
Open Space Maintenance 59,993 17,709 5,685 36,599
Laguna Lake Dredging 19,977 14,316 4,127 1,534
Urban Forest Annual Asset Maintenance 175,797 55,342 65,590 54,865
323,956 123,030 78,981 121,945
Bicycles and Pedestrian Improvements
Sidewalk Replacement 169,707 142,836 651 26,220
Railroad Safety Trail: Taft Street to Pepper Street 230,261 83,623 146,638 -
Bicycle Facility Improvements 16,403 16,359 44 -
Anholm Neighborhood Greenway Plan 46,045 45,672 373 -
Downtown Renewal 286,096 280,801 - 5,295
Street Lights Annual Asset Maintenance 76,101 26,079 - 50,022
Active Transportation Plan 100,146 75,114 - 25,032
924,759 670,484 147,706 106,569
Traffic Congestion Relief/ Safety Improvements
Traffic Safety Report Implementation 32,587 4,118 - 28,469
Transportation Safety & Operations 9,196 9,196 - -
Neighborhood Traffic Improvements 94,094 37,079 12,032 44,983
135,877 50,393 12,032 73,452
Public Safety
Police Station Replacement Study 160,310 47,022 3,475 109,813
Police Patrol Vehicle Replacements (5) 263,000 253,704 9,296 -
Police Station Building Maintenance and Improvements 17,500 9,310 - 8,190
City of San Luis Obispo
Half Percent Sales Tax Measure Funding Schedule, continued
For the Fiscal Year Ended June 30, 2020
114
Page 3
Public Safety (cont.) Budget Actual Encumbrances Carryover
Fire Stations Building Maintenance 101,100 12,390 - 88,710
EDC DataAire Replacement 136,563 136,563 - -
Public Surveillance Camera 3,435 3,435 - -
IT replacements and improvments 597,150 270,943 1,258 324,949
Police Facilities Parking Lot Maintenance 120,000 21,051 - 98,949
Radio Handhelds 203,000 - - 203,000
Community Safety Emergency Response Communication Equipment 516,855 237,059 175,726 104,070
Fire Station 4 Backup Generator 100,877 76,681 - 24,196
2,219,790 1,068,158 189,755 961,877
Neighborhood Street Paving
Street Reconstruction and Resurfacing 430,438 96,677 - 333,761
Marsh Street Bridge Replacement 725,089 357,964 226,621 140,504
South Broad Street Improvements 1,229,562 1,229,562 - -
2,385,089 1,684,203 226,621 474,265
Code Enforcement
Mission Plaza Railing Upgrade 19,836 19,836 - -
19,836 19,836 - -
Flood Protection
Storm Drain System Replacement 332,367 32,999 1,638 297,730
332,367 32,999 1,638 297,730
Parks & Recreation/Senior Programs and Facilities
Parks Major Maintenance & Repairs 398,626 13,817 - 384,809
Swim Center Building Maintenance and Equipment Replacement 18,978 13,557 1,269 4,152
Swim Center Re-plaster Therapy Pool 121,170 121,170 - -
Swim Center Co-generation Plant 85,000 1,500 - 83,500
Jack House Building Maintenance 57,500 12,750 - 44,750
Islay Hill Park Playground Equipment Replacement 518,058 435,563 44,932 37,563
Meadow Park Pedestrian Bridges and Pathways 263,187 239,867 12,727 10,593
Laguna Lake Golf Course Annual Asset Maintenance 10,000 10,000 - -
City/County Library Major Maintenance 110,420 110,356 - 64
Mission Plaza Restroom Replacements and Enhancements 101,486 17,294 3,486 80,706
1,684,425 975,874 62,414 646,137
Other Vital Services and Capital Projects
Facilities Annual Asset Maintenance Account 232,371 49,557 3,010 179,804
Multisite Energy Management 32,600 7,770 - 24,830
City Facilities HVAC Replacements 99,005 66,779 3,638 28,588
Fleet Replacements Annual Asset Maintenance 127,359 5,425 82,062 39,872
Undesignated Capital 3,455 3,455 - -
494,790 132,986 88,710 273,094
Total Capital Expenditures 8,520,889$ 4,757,963$ 807,857$ 2,955,069$
Net Change in Fund Balance (2,918,878)$ 732,918$
Fund balance, beginning of year 6,329,722 6,329,722
Fund balance, end of year 3,410,844$ 7,062,640$
For the Fiscal Year Ended June 30, 2019
City of San Luis Obispo
Half Percent Sales Tax Measure Funding Schedule, continued
115
City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2020
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.
116
City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2020
Page 2
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.
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.
117
City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2020
Page 3
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.
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
118
City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2020
Page 4
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.
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 $11,072,775 of 2018 Lease Revenue
Refunding Bonds. These bonds were issued to refinance the outstanding 2005 Revenue Bonds, 2006 Lease Revenue
Bonds, and 2009 Lease Revenue Bonds. The original bonds were used to accomplish several high priority capital
improvement projects including the headquarters fire station, seismic safety and HVAC improvements to City Hall,
Mission Plaza expansion, and various properties and street lighting system purchases. Further, the bonds were used to
purchase a parking structure and office building and to the finance the construction of the Public Safety Communications
and Emergency Operations Center project.
The Board has entered into a lease agreement with the City under which the City is responsible for making lease payments
to fund the annual debt service requirements.
119
Downtown BID
Transportation
Development
Act (TDA) Tourism BID Gas Tax
Assets
Cash and investment -$ -$ 337,533$ -$
Accounts receivable - - 117,525 -
Tax receivable - - - -
Due from other funds - - - -
Accrued interest receivable - - 1,676 -
Cash held by fiscal agent - - - -
Loans receivable - - - -
Total assets -$ -$ 456,734$ -$
Liabilities, Deferred Inflows of
Resources and Fund Balance
Liabilities:
Accounts payable 450$ -$ 125,434$ -$
Accrued liabilities - - 8,325 -
Due to other funds 5,332 - - 143,380
Unearned revenue - - - -
Total liabilities 5,782 - 133,759 143,380
Deferred Inflows of Resources:
Unavailable revenue - - - -
Fund balance:
Nonspendable - - - -
Restricted for:
Debt service - - - -
Transportation projects - - - -
Affordable housing programs - - - -
Impact fee programs - - - -
Parkland development programs - - - -
Public art programs - - - -
Tourism programs - - 322,975 -
Public safety program - - - -
Assigned to:
Contingency fund - - - -
Subsequent years expenditures - - - -
Unassigned (5,782) - - (143,380)
Total fund balance (5,782) - 322,975 (143,380)
-$ -$ 456,734$ -$
City of San Luis Obispo, California
Combining Balance Sheets
Nonmajor Governmental Funds
June 30, 2020
Special Revenue Funds
Total liabilities, deferred inflows of resources,
and fund balance
120
Community
Development
Block Grant
(CDBG)
Law
Enforcement
Grants
Public Art
Contributions Insurance
SB1 Road
Repair
SB1186 CASP
Certify
108,575$ 40,913$ 603,924$ -$ 530,930$ 59,286$
- 4,710 - - - -
- - - - 123,784 -
- - - - - -
- - 2,218 - 1,950 218
- - - - - -
- - - - - -
108,575$ 45,623$ 606,142$ -$ 656,664$ 59,504$
-$ -$ 15,045$ -$ -$ -$
- 432 - - - -
- - - - - -
- 12,859 - - - -
- 13,291 15,045 - - -
- - - - - -
- - - - - -
- - - - - -
- - - - 656,664 59,504
108,575 - - - - -
- - - - - -
- - - - - -
- - 591,097 - - -
- - - - - -
- 32,332 - - - -
- - - - - -
- - - - - -
- - - - - -
108,575 32,332 591,097 - 656,664 59,504
108,575$ 45,623$ 606,142$ -$ 656,664$ 59,504$
Special Revenue Funds
121
City of San Luis Obispo, California
Combining Balance Sheets
Nonmajor Governmental Funds, continued
Capital Outlay
Parkland
Development
Open Space
Protection
Airport Area
Impact Fee
Assets
Cash and investment 2,264,711$ 4,776,859$ 20,236$ 1,137,388$
Accounts receivable 1,813,865 - - -
Tax receivable - - - -
Due from other funds - - - -
Accrued interest receivable 5,294 17,545 74 4,178
Cash held by fiscal agent - - - -
Loans receivable - - - -
Total assets 4,083,870$ 4,794,404$ 20,310$ 1,141,566$
Liabilities, Deferred Inflows of
Resources and Fund Balance
Liabilities:
Accounts payable 890,165$ 84,844$ -$ -$
Accrued liabilities - - - -
Due to other funds - - - -
Unearned revenue 114,967 - - -
Total liabilities 1,005,132 84,844 - -
Deferred Inflows of Resources:
Unavailable revenue - - - -
Fund balance:
Unspendable - - - -
Restricted for:
Debt service - - - -
Transportation projects - - - -
Affordable housing programs - - - -
Impact fee programs - - - 1,141,566
Parkland development programs - 4,709,560 - -
Public art programs - - - -
Tourism programs - - - -
Public safety program - - - -
Assigned to:
Contingency fund - - - -
Subsequent years expenditures 3,078,738 - 20,310 -
Unassigned - - - -
Total fund balance 3,078,738 4,709,560 20,310 1,141,566
4,083,870$ 4,794,404$ 20,310$ 1,141,566$
June 30, 2020
Capital Projects Funds
Total liabilities, deferred inflows of resources,
and fund balance
122
LOVR Sub-
Area Fee
Waste Water
Impact Fee
Fleet
Replacement
Info Tech
Replacement
Affordable
Housing
Transportation
Impact Fee
916,241$ 1,322,973$ 1,215,487$ 2,813,000$ 2,431,193$ 8,697,023$
- - - - - -
- - - - - -
- - - - 50,000 -
3,365 4,859 4,470 10,332 1,372,280 31,944
- - - - - -
- - - - 6,099,429 -
919,606$ 1,327,832$ 1,219,957$ 2,823,332$ 9,952,902$ 8,728,967$
450,000$ -$ 1,309$ 264,217$ -$ 73,311$
- - - - - -
- - - - - -
- - - - - -
450,000 - 1,309 264,217 - 73,311
- - - - 1,362,983 -
- - - - - -
- - - - - -
- - - - - 8,655,656
- - - - 8,589,919 -
469,606 1,327,832 - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - 500,000 400,000 - -
- - 718,648 2,159,115 - -
- - - - - -
469,606 1,327,832 1,218,648 2,559,115 8,589,919 8,655,656
919,606$ 1,327,832$ 1,219,957$ 2,823,332$ 9,952,902$ 8,728,967$
Capital Projects Funds
123
City of San Luis Obispo, California
Combining Balance Sheets
Nonmajor Governmental Funds, continued
Infrastructure
Public Safety
Development
Impact Fee Debt Service
Total Nonmajor
Governmental
Funds
Assets
Cash and investment 2,535,197$ 187,232$ 1,805,388$ 31,804,089$
Accounts receivable - - - 1,936,100
Tax receivable - - - 123,784
Due from other funds - - - 50,000
Accrued interest receivable 9,312 689 - 1,470,404
Cash held by fiscal agent - - 421,510 421,510
Loans receivable - - - 6,099,429
Total assets 2,544,509$ 187,921$ 2,226,898$ 41,905,316$
Liabilities, Deferred Inflows of
Resources and Fund Balance
Liabilities:
Accounts payable -$ -$ -$ 1,904,775$
Accrued liabilities - - - 8,757
Due to other funds - - - 148,712
Unearned revenue - - - 127,826
Total liabilities - - - 2,190,070
Deferred Inflows of Resources:
Unavailable revenue - - - 1,362,983
Fund balance:
Unspendable - - - -
Restricted for:
Debt service - - 2,226,898 2,226,898
Transportation projects - - - 9,371,824
Affordable housing programs - - - 8,698,494
Impact fee programs - 187,921 - 3,126,925
Parkland development programs - - - 4,709,560
Public art programs - - - 591,097
Tourism programs - - - 322,975
Public safety program - - - 32,332
Assigned to:
Contingency fund - - - 900,000
Subsequent years expenditures 2,544,509 - - 8,521,320
Unassigned - - - (149,162)
Total fund balance 2,544,509 187,921 2,226,898 38,352,263
2,544,509$ 187,921$ 2,226,898$ 41,905,316$
June 30, 2020
Capital Projects Funds
Total liabilities, deferred inflows of
resources and fund balance
124
125
Downtown BID
Transportation
Development
Act (TDA) Tourism BID Gas Tax
Revenues:
Use of money and property -$ -$ 14,747$ -$
Subventions and grants - 48,608 - 1,047,224
Charges for services 271,715 - 1,260,048 -
Other revenues - - - -
Total revenues 271,715 48,608 1,274,795 1,047,224
Expenditures:
Current:
Public safety - - - -
Transportation - - - -
Community development 272,165 - 1,383,208 -
Debt service:
Principal - - - -
Interest and fiscal charges - - - -
Capital:
General Government - - - -
Public safety - - - -
Transportation - - - -
Leisure, cultural and social services - - - -
Community development - - - -
Total expenditures 272,165 - 1,383,208 -
Excess (deficiency) of revenues over
(under) expenditures (450) 48,608 (108,413) 1,047,224
Other financing sources (uses):
Transfers in - - - -
Transfers out - (48,608) (24,635) (1,047,224)
Total other financing
sources (uses) - (48,608) (24,635) (1,047,224)
Net change in fund balance (450) - (133,048) -
Fund balance, beginning of year, as restated (5,332) - 456,023 (143,380)
Fund balance (deficit),
end of year (5,782)$ -$ 322,975$ (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, 2020
126
Community
Development
Block Grant
(CDBG)
Law
Enforcement
Grants
Public Art
Contributions Insurance
SB1 Road
Repair
SB1186 ASP
Certify
-$ -$ 17,813$ -$ 12,927$ 1,716$
- 99,325 - - 1,015,564 -
- 294 18,673 - - 27,358
- - - - - -
- 99,619 36,486 - 1,028,491 29,074
- 42,649 - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - 701,441 -
- - 66,323 - - -
- - - - 151,810 -
- 42,649 66,323 - 853,251 -
- 56,970 (29,837) - 175,240 29,074
- - - - - -
- - - - - -
- - - - - -
- 56,970 (29,837) - 175,240 29,074
108,575 (24,638) 620,934 - 481,424 30,430
108,575$ 32,332$ 591,097$ -$ 656,664$ 59,504$
Special Revenue Funds
127
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, 2020
Capital Outlay
Parkland
Development
Open Space
Protection
Airport Area
Impact Fee
Revenues:
Use of money and property 42,051$ 137,453$ (383)$ 33,425$
Subventions and grants 2,191,714 - 200,000 -
Charges for services - 1,249,959 - 827
Other revenues - - - -
Total revenues 2,233,765 1,387,412 199,617 34,252
Expenditures:
Current:
Public safety - - - -
Transportation - - - -
Community development - - - -
Debt service:
Principal - - - -
Interest and fiscal charges - - - -
Capital:
General Government 234,618 (5,730) 34,235 -
Public safety - - - -
Transportation 2,103,871 - - 46,188
Leisure, cultural and social services 20,022 212,244 - -
Community development 219,293 - - -
Total expenditures 2,577,804 206,514 34,235 46,188
Excess (deficiency) of revenues over
(under) expenditures (344,039) 1,180,898 165,382 (11,936)
Other financing sources (uses):
Transfers in 1,830,000 - - -
Transfers out - - - -
Total other financing
sources (uses) 1,830,000 - - -
Net change in fund balance 1,485,961 1,180,898 165,382 (11,936)
Fund balance, beginning of year, as restated 1,592,777 3,528,662 (145,072) 1,153,502
Fund balance (deficit),
end of year 3,078,738$ 4,709,560$ 20,310$ 1,141,566$
Capital Projects Funds
128
LOVR Sub-
Area Fee
Waste Water
Impact
Fleet
Replacement
Info Tech
Replacement
Affordable
Housing
Transportation
Impact Fee
26,656$ 35,834$ 35,956$ 81,111$ 73,778$ 252,654$
- - - - - -
- 550,721 - 169,951 17,737 2,157,533
- - 82,951 - - -
26,656 586,555 118,907 251,062 91,515 2,410,187
- - - - - -
270,094 - - - - -
- - - - - -
- - - - - -
- - - - - -
- - 29,098 576,476 - -
- - 57,822 - - -
- - - - - 1,186,114
- - - - - -
- - - - 329,999 -
270,094 - 86,920 576,476 329,999 1,186,114
(243,438) 586,555 31,987 (325,414) (238,484) 1,224,073
- - 593,000 943,900 - -
- - - - (57,000) (280,000)
- - 593,000 943,900 (57,000) (280,000)
(243,438) 586,555 624,987 618,486 (295,484) 944,073
713,044 741,277 593,661 1,940,629 8,885,403 7,711,583
469,606$ 1,327,832$ 1,218,648$ 2,559,115$ 8,589,919$ 8,655,656$
Capital Projects Funds
129
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, 2020
Infrastructure
Public Safety
Development
Impact Fee Debt Service
Total Nonmajor
Governmental
Funds
Revenues:
Use of money and property 72,851$ 5,027$ 649$ 844,265$
Subventions and grants 1,892,507 - - 6,494,942
Charges for services - 178,784 - 5,903,600
Other revenues - - - 82,951
Total revenues 1,965,358 183,811 649 13,325,758
Expenditures:
Current:
Public safety - - - 42,649
Transportation - - - 270,094
Community development - - - 1,655,373
Debt service:
Principal - - 1,605,239 1,605,239
Interest and fiscal charges - - 993,697 993,697
Capital:
General Government - - - 868,697
Public safety - - - 57,822
Transportation - - - 4,037,614
Leisure, cultural and social services - - - 298,589
Community development - - - 701,102
Total expenditures - - 2,598,936 10,530,876
Excess (deficiency) of revenues over
(under) expenditures 1,965,358 183,811 (2,598,287) 2,794,882
Other financing sources (uses):
Transfers in - - 2,741,518 6,108,418
Transfers out - - - (1,457,467)
Total other financing
sources (uses) - - 2,741,518 4,650,951
Net change in fund balance 1,965,358 183,811 143,231 7,445,833
Fund balance, beginning of year 579,151 4,110 2,083,667 30,906,430
Fund balance (deficit),
end of year 2,544,509$ 187,921$ 2,226,898$ 38,352,263$
Capital Projects Funds
130
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Charges for services
Assessments 260,400$ 272,165$ 271,715$ (450)$
Total Revenues 260,400 272,165 271,715 (450)
Expenditures:
Current
Community development 260,400 272,165 272,165 -
Total Expenditures 260,400 272,165 272,165 -
Excess of Revenues Over Expenditures - - (450) (450)
Net Change in Fund Balance - - (450) (450)
Fund Balance, Beginning of Year (5,332) (5,332) (5,332) -
Fund Balance, End of Year (5,332)$ (5,332)$ (5,782)$ (450)$
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, 2020
Budget
131
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2020
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Subventions and grants 45,000$ -$ 48,608$ 48,608$
Total Revenues 45,000 - 48,608 48,608
Excess of Revenues Over Expenditures 45,000 - 48,608 48,608
Other Financing Uses:
Operating transfers out (45,000) (45,000) (48,608) (3,608)
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
132
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2020
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property 1,400$ 1,400$ 14,747$ 13,347$
Assessments 1,606,000 1,678,740 1,260,048 (418,692)
Total Revenues 1,607,400 1,680,140 1,274,795 (405,345)
Expenditures:
Current
Community development 1,533,586 1,662,689 1,383,208 279,481
Total Expenditures 1,533,586 1,662,689 1,383,208 279,481
Excess of Revenues Over (Under) Expenditures 73,814 17,451 (108,413) (125,864)
Other Financing Uses:
Operating transfers out (28,679) (28,679) (24,635) 4,044
Net Change in Fund Balance 45,135 (11,228) (133,048) (121,820)
Fund Balance, Beginning of Year 456,023 456,023 456,023 -
Fund Balance, End of Year 501,158$ 444,795$ 322,975$ (121,820)$
Tourism Business Improvement District Fund
Budget
133
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2020
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Subventions and grants 1,080,000$ 1,080,000$ 1,047,224$ (32,776)$
Total Revenues 1,080,000 1,080,000 1,047,224 (32,776)
Excess of Revenues Over Expenditures 1,080,000 1,080,000 1,047,224 (32,776)
Other Financing Uses:
Operating transfers out (1,000,000) (1,000,000) (1,047,224) (47,224)
Net Change in Fund Balance 80,000 80,000 - (80,000)
Fund Balance, Beginning of Year - - (143,380) -
Fund Balance, End of Year 80,000$ 80,000$ (143,380)$ (80,000)$
Gas Tax
Budget
134
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2020
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Subventions and grants -$ -$ -$ -$
Total Revenues - - - -
Expenditures:
Current
Community development - - - -
Total Expenditures - - - -
Net Change in Fund Balance - - - -
Fund Balance, Beginning of Year 108,575 108,575 108,575 -
Fund Balance, End of Year 108,575$ 108,575$ 108,575$ -$
Community Development Block Grant (CDBG) Fund
Budget
135
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2020
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Subventions and grants 24,050$ 24,050$ 99,325$ 75,275$
Charges for services 2,142 2,142 294 (1,848)
Total Revenues 26,192 26,192 99,619 73,427
Expenditures:
Public Safety 24,050 24,050 42,649 (18,599)
Total Expenditures 24,050 24,050 42,649 (18,599)
Excess of Revenues Over (Under) Expenditures 2,142 2,142 56,970 54,828
Other Financing Uses:
Operating transfers out - (13,800) - 13,800
Net Change in Fund Balance 2,142 (11,658) 56,970 68,628
Fund Balance, Beginning of Year (24,638) (24,638) (24,638) -
Fund Balance, End of Year (22,496)$ (36,296)$ 32,332$ 68,628$
Budget
Law Enforcement Grants Fund
136
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2020
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property 2,100$ 2,100$ 17,813$ 15,713$
Other revenues 38,500 38,500 18,673 (19,827)
Total Revenues 40,600 40,600 36,486 (4,114)
Expenditures:
Capital Projects - 63,188 66,323 (3,135)
Total Expenditures - 63,188 66,323 (3,135)
Excess of Revenues Over (Under) Expenditures 40,600 (22,588) (29,837) (7,249)
Net Change in Fund Balance 40,600 (22,588)(29,837)(7,249)
Fund Balance, Beginning of Year 620,934 620,934 620,934 -
Fund Balance, End of Year 661,534$ 598,346$ 591,097$ (7,249)$
Budget
Public Art Contributions Fund
137
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2020
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property -$ -$ 12,927$ 12,927$
Subventions and grants 818,000 818,000 1,015,564 197,564
Total Revenues 818,000 818,000 1,028,491 210,491
Expenditures:
Capital Projects - 702,613 853,251 (150,638)
Total Expenditures - 702,613 853,251 (150,638)
Excess of Revenues Over (Under) Expenditures 818,000 115,387 175,240 59,853
Net Change in Fund Balance 818,000 115,387 175,240 59,853
Fund Balance, Beginning of Year 481,424 481,424 481,424 -
Fund Balance, End of Year 1,299,424$ 596,811$ 656,664$ 59,853$
Budget
SB1 Road Repair Fund
138
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2020
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property -$ -$ 1,716$ 1,716$
Charges for services - - 27,358 27,358
Total Revenues - - 29,074 29,074
Net Change in Fund Balance --29,074 29,074
Fund Balance, Beginning of Year 30,430 30,430 30,430 -
Fund Balance, End of Year 30,430$ 30,430$ 59,504$ 29,074$
SB1186 ASP Certify
Budget
139
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2020
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property -$ -$ 649$ 649$
Total Revenues - - 649 649
Expenditures:
Principal 1,709,531 1,709,531 1,605,239 104,292
Interest and fiscal charges 1,031,986 1,031,986 993,697 38,289
Total Expenditures 2,741,517 2,741,517 2,598,936 142,581
Excess of Revenues Over (Under) Expenditures (2,741,517) (2,741,517) (2,598,287) 143,230
Other Financing Uses:
Operating transfers in - 2,741,518 2,741,518 -
Total other Financing Uses: - 2,741,518 2,741,518 -
Net Change in Fund Balance (2,741,517) 1 143,231 143,230
Fund Balance, Beginning of Year 2,083,667 2,083,667 2,083,667 -
Fund Balance, End of Year (657,850)$ 2,083,668$ 2,226,898$ 143,230$
Budget
Debt Service Fund
140
City of San Luis Obispo, California
Agency Funds
For the Fiscal Year Ended June 30, 2020
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.
141
Whale Rock
Fund
Jack House
Fund
Hazardous
Materials Task
Force Fund
General Agency
Fund
Assets
Cash and equivalents 2,432,815$ 19,060$ 367,648$ 1,405,680$
Cash and investments held by fiscal agent - - - 30,864
Accounts receivable 15,875 - - -
Accrued interest receivable 8,900 70 1,349 -
Other assets 59,091 - - -
Capital assets, net of
accumulated depreciation 756,522 - - -
Total Assets 3,273,203$ 19,130$ 368,997$ 1,436,544$
Liabilities
Accounts payable 73,566$ -$ 30,237$ 90,339$
Accrued salaries 21,666 - 187 -
Other liabilities 48,748 19,130 - 1,346,205
Due to agency participants 3,129,223 - 338,573 -
Total Liabilities 3,273,203$ 19,130$ 368,997$ 1,436,544$
City of San Luis Obispo, California
Combining Statement of Assets and Liabilities
Agency Funds
For the Fiscal Year Ended June 30, 2020
142
Duvall Fund
Boysen Ranch
Conservation
Easement
PEG - City of
San Luis Obispo PEG - SLCUSD
Total Agency
Funds
171,574$ 425,577$ 133,609$ 325,684$ 5,281,647$
- - - - 30,864
- - 1 1 15,877
630 1,563 1,143 1,196 14,851
- - - - 59,091
- - - - 756,522
172,204$ 427,140$ 134,753$ 326,881$ 6,158,852$
615$ 24,567$ 19,279$ -$ 238,603$
- - - - 21,853
171,589 402,573 115,474 326,881 2,430,600
- - - - 3,467,796
172,204$ 427,140$ 134,753$ 326,881$ 6,158,852$
143
Adjusted
Balance Balance
June 30, 2019 Additions Deductions June 30, 2020
Whale Rock Fund
Assets
Cash and cash equivalents 1,583,358$ 3,568,993$ 2,719,536$ 2,432,815$
Accounts receivable 25,300 809,172 818,597 15,875
Accrued interest receivable 7,725 8,900 7,725 8,900
Prepaid expense - 59,091 - 59,091
Capital assets, net of
accumulated depreciation 1,221,044 452,365 916,887 756,522
Total Assets 2,837,427$ 4,898,521$ 4,462,745$ 3,273,203$
Liabilities
Accounts payable 30,783$ 621,073$ 578,290$ 73,566$
Accrued salaries 20,737 26,803 25,874 21,666
Other liabilities 46,467 2,281 - 48,748
Due to agency participants 2,739,440 4,099,397 3,709,614 3,129,223
Total Liabilities 2,837,427$ 4,749,554$ 4,313,778$ 3,273,203$
Balance Balance
June 30, 2019 Additions Deductions June 30, 2020
Jack House Fund
Assets
Cash and cash equivalents 18,332$ 798$ 70$ 19,060$
Accrued interest receivable 89 70 89 70
Total Assets 18,421$ 868$ 159$ 19,130$
Liabilities
Other liabilities 18,421$ 709$ -$ 19,130$
Total Liabilities 18,421$ 709$ -$ 19,130$
Balance Balance
June 30, 2019 Additions Deductions June 30, 2020
Hazardous Materials Task Force Fund
Assets
Cash and cash equivalents 144,168$ 444,090$ 220,610$ 367,648$
Accrued interest receivable 714 1,349 714 1,349
Total Assets 144,882$ 445,439$ 221,324$ 368,997$
Liabilities
Accounts payable 724$ 31,539$ 2,026$ 30,237$
Accrued salaries 840 - 653 187
Due to agency participants 143,318 195,255 - 338,573
Total Liabilities 144,882$ 226,794$ 2,679$ 368,997$
City of San Luis Obispo, California
Combining Statement of Changes in Assets and Liabilities
Agency Funds
For the Fiscal Year Ended June 30, 2020
144
Page 2
Balance Balance
June 30, 2019 Additions Deductions June 30, 2020
General Agency Fund
Assets
Cash and cash equivalents 1,467,007$ 515,403$ 576,730$ 1,405,680$
Cash and investment held by fiscal agent 30,864 - - 30,864
Total Assets 1,497,871$ 515,403$ 576,730$ 1,436,544$
Liabilities
Accounts payable 117,004$ 655,589$ 682,254$ 90,339$
Other liabilities 1,380,867 591,910 626,572 1,346,205
Total Liabilities 1,497,871$ 1,247,499$ 1,308,826$ 1,436,544$
Balance Balance
June 30, 2019 Additions Deductions June 30, 2020
Duvall Fund
Assets
Cash and cash equivalents 166,406$ 5,798$ 630$ 171,574$
Accrued interest receivable 807 630 807 630
Total Assets 167,213$ 6,428$ 1,437$ 172,204$
Liabilities
Accounts payable -$ 615$ -$ 615$
Other liabilities 167,213 4,992 616 171,589
Total Liabilities 167,213$ 5,607$ 616$ 172,204$
Balance Balance
June 30, 2019 Additions Deductions June 30, 2020
Boysen Ranch Conservation Easement
Assets
Cash and cash equivalents 416,058$ 14,424$ 4,905$ 425,577$
Accrued interest receivable 2,017 1,563 2,017 1,563
Total Assets 418,075$ 15,987$ 6,922$ 427,140$
Liabilities
Accounts payable 24,567$ 10,027$ 10,027$ 24,567$
Other liabilities 393,508 15,749 6,684 402,573
Total Liabilities 418,075$ 25,776$ 16,711$ 427,140$
City of San Luis Obispo, California
Combining Statement of Changes in Assets and Liabilities
Agency Funds, continued
For the Fiscal Year Ended June 30,2020
145
Page 3
Balance Balance
June 30, 2019 Additions Deductions June 30, 2020
PEG - City of San Luis Obispo
Assets
Cash and cash equivalents 267,243$ 69,531$ 203,165$ 133,609$
Accounts receivable 9,968 29,816 39,783 1
Accrued interest receivable 1,150 1,143 1,150 1,143
Total Assets 278,361$ 100,490$ 244,098$ 134,753$
Liabilities
Accounts payable -$ 23,998$ 4,719$ 19,279$
Other liabilities 278,361 38,698 201,585 115,474
Total Liabilities 278,361$ 62,696$ 206,304$ 134,753$
Balance Balance
June 30, 2019 Additions Deductions June 30, 2020
PEG - SLCUSD
Assets
Cash and cash equivalents 277,355$ 70,157$ 21,828$ 325,684$
Accounts receivable 9,969 29,816 39,784 1
Accrued interest receivable 1,396 1,196 1,396 1,196
Total Assets 288,720$ 101,169$ 63,008$ 326,881$
Liabilities
Other liabilities 288,720$ 39,078$ 917$ 326,881$
Total Liabilities 288,720$ 39,078$ 917$ 326,881$
Balance Balance
June 30, 2019 Additions Deductions June 30, 2020
Totals - All Agency Funds
Assets
Cash and cash equivalents 4,339,927$ 4,689,194$ 3,747,474$ 5,281,647$
Cash and investment held by fiscal agent 30,864 - - 30,864
Accounts receivable 45,237 868,804 898,164 15,877
Accrued interest receivable 13,898 14,851 13,898 14,851
Other assets - 59,091 - 59,091
Capital assets, net of
accumulated depreciation 1,221,044 452,365 916,887 756,522
Total Assets 5,650,970$ 6,084,305$ 5,576,423$ 6,158,852$
Liabilities
Accounts payable 173,078$ 1,342,841$ 1,277,316$ 238,603$
Accrued salaries 21,577 26,803 26,527 21,853
Other liabilities 2,573,557 693,417 836,374 2,430,600
Due to agency participants 2,882,758 4,294,652 3,709,614 3,467,796
Total Liabilities 5,650,970$ 6,357,713$ 5,849,831$ 6,158,852$
Combining Statement of Changes in Assets and Liabilities
Agency Funds, continued
For the Fiscal Year Ended June 30, 2020
City of San Luis Obispo, California
146
STATISTICAL SECTION (UNAUDITED)
147
148
City of San Luis Obispo, California
Statistical Section Overview
For the Fiscal Year Ended June 30, 2020
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 1-5 . 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 6-13. 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.
149
150
2010-112011-122012-132013-142014-152015-162016-172017-182018-192019-20Governmental activities: Net investment in capital assets133,145,800$ 141,686,600$ 142,239,500$ 145,266,043$ 150,430,226$ 163,449,992$ 165,100,426$ 171,472,251$ 174,431,254$ 177,335,648$ Restricted2,543,800 2,620,700 2,374,800 4,825,662 2,350,838 2,762,387 2,268,499 421,954 20,458,677 29,901,136 Unrestricted26,401,500 23,583,000 29,927,200 (66,610,104) (57,421,778) (49,031,893) (41,496,841) (49,909,657) (72,041,172) (73,806,116)Total governmental activities net position162,091,100$ 167,890,300$ 174,541,500$ 83,481,601$ 95,359,286$ 117,180,486$ 125,872,084$ 121,984,548$ 122,848,759$ 133,430,668$ Business-type activities: Net investment in capital assets117,314,700$ 119,957,600$ 123,510,200$ 119,116,303$ 125,801,845$ 128,390,611$ 131,149,516$ 136,694,402$ 139,659,544$ 149,848,564$ Restricted2,777,100 2,293,900 2,254,200 2,248,979 2,261,213 2,278,392 2,276,526 1,558,795 500,645 2,490,846 Unrestricted36,493,600 37,759,000 41,712,200 35,224,987 42,117,143 49,495,220 53,421,102 50,866,147 57,379,689 53,983,005Total business-type activities net position156,585,400$ 160,010,500$ 167,476,600$ 156,590,269$ 170,180,201$ 180,164,223$ 186,847,144$ 189,119,344$ 197,539,878$ 206,322,415$ Primary government (City wide totals): Net investment in capital assets250,460,500$ 261,644,200$ 265,749,700$ 264,382,346$ 276,232,071$ 291,840,603$ 296,249,942$ 308,166,653$ 314,090,798$ 327,184,212$ Restricted5,320,900 4,914,600 4,629,000 7,074,641 4,612,051 5,040,779 4,545,025 1,980,749 20,959,322 32,391,982 Unrestricted62,895,100 61,342,000 71,639,400 (31,385,117) (15,304,635) 463,327 11,924,261 956,490 (14,661,483) (19,823,111)Total primary government net position318,676,500$ 327,900,800$ 342,018,100$ 240,071,870$ 265,539,487$ 297,344,709$ 312,719,228$ 311,103,892$ 320,388,637$ 339,753,083$ Schedule 1City of San Luis Obispo, CaliforniaNet Assets by ComponentLast Ten Fiscal Years(Accrual basis of accounting)151
2010-112011-12 2012-13 2013-14 2014-15 2015-16 2016-172017-182018-192019-20Expenses:Governmental activities:Public safety26,774,800$ 27,993,900$ 28,859,200$ 29,651,702$ 26,881,732$ 29,318,821$ 31,806,692$ 42,097,557$ 34,320,108$ 34,670,383$ Transportation 8,809,400 7,778,000 8,551,500 8,975,04711,457,3118,792,028 9,668,840 9,229,042 7,546,278 7,416,335Culture and recreation9,299,200 9,500,300 10,078,700 10,239,85310,332,740 9,808,5459,824,262 11,125,792 9,469,520 10,063,304Community development8,166,300 8,782,200 8,866,900 10,183,782 10,960,778 12,900,27514,656,604 13,457,99312,573,95311,882,018General Government - - - - - - - - 22,429,78522,058,724Interest on long-term debt1,248,400 1,198,000 1,217,200 1,221,2051,015,0111,351,468 1,170,984 1,488,183702,885839,661Total governmental activities expenses54,298,100 55,252,400 57,573,500 60,271,589 60,647,572 62,171,13767,127,382 77,398,56787,042,529 86,930,425Business-type activities:Water16,106,300 17,455,200 17,019,000 17,575,96117,128,04118,136,120 19,069,96719,523,736 20,986,430 22,914,013Sewer9,633,900 9,530,400 10,189,400 10,647,25510,132,214 10,842,45111,683,262 14,158,612 13,967,71713,100,905Parking3,501,500 3,598,000 3,678,600 3,636,6073,556,6373,900,052 3,791,4934,098,840 4,088,6814,145,364Transit 3,409,700 3,778,900 3,903,900 4,059,138 3,994,194 4,088,4234,076,8714,355,1034,320,976 4,152,798Golf724,100-------- -Total business-type activities expenses33,375,500 34,362,500 34,790,900 35,918,96134,811,086 36,967,046 38,621,59342,136,29143,363,804 44,313,080Total primary government expenses87,673,600$ 89,614,900$ 92,364,400$ 96,190,550$ 95,458,658$ 99,138,183$ 105,748,975$ 119,534,858$ 130,406,333$ 131,243,505$ Program Revenues:Governmental activities:Charges for services:Public safety1,745,200$ 1,750,700$ 1,599,000$ 1,589,278$ 1,697,748$ 1,673,800$ 1,771,383$ 1,881,725$ 1,633,223$ 3,045,294$ Transportation2,690,200 418,000221,200 1,321,3231,270,7871,691,7571,793,010 1,669,5632,399,692531,424Culture and recreation1,421,600 1,834,200 1,926,800 3,048,274 2,155,4112,048,780 3,501,8373,487,2254,078,539 2,508,565Community development3,166,200 4,563,200 4,126,400 4,981,2117,210,132 7,974,880 8,144,128 7,355,8319,941,95111,812,417General Government-------- 1,391,940760,606Operating grants and contributions1,885,100 2,152,700 2,814,700 2,412,469 2,509,3232,667,058 2,488,706 4,015,502 2,990,2114,828,837Capital grants and contributions3,066,300 2,021,800 1,991,900 3,680,440 7,911,8679,355,70740,53139,78147,234 2,504,722Total governmental activities program revenues13,974,600 12,740,600 12,680,000 17,032,99522,755,268 25,411,982 17,739,59518,449,62722,482,790 25,991,865Business-type activities:Charges for services:Water14,298,100$ 16,753,100$ 18,148,200$ 19,755,909$ 20,446,730$ 19,884,850$ 20,180,931$ 22,202,069$ 24,026,385$ 25,666,777$ Sewer13,320,400 14,789,700 16,212,000 17,151,212 18,007,064 16,460,140 16,272,53316,753,094 18,674,54719,042,384Parking3,564,700 3,533,300 4,693,400 3,998,730 4,905,494 7,408,729 4,666,970 5,226,780 5,443,038 3,293,941Transit593,100 552,900682,700688,585649,899 659,471666,296703,451776,808633,567Golf364,000-------- -Operating grants and contributions2,220,700 2,502,500 2,673,500 2,458,640 3,148,6512,888,820 4,180,386 3,099,618 3,259,9753,166,066Capital grants and contributions1,242,000 750,900731,30082,35960,063---- -Total business-type activities programs revenues35,603,000 38,882,400 43,141,100 44,135,43547,217,90147,302,010 45,967,116 47,985,012 52,180,75351,802,735Total primary government program revenues49,577,600$ 51,623,000$ 55,821,100$ 61,168,430$ 69,973,169$ 72,713,992$ 63,706,711$ 66,434,639$ 74,663,543$ 77,794,600$ Net Revenues (Expenses):Governmental activities(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)$ (60,938,560)$ Business-type activities2,227,500 4,519,900 8,350,200 8,216,474 12,406,81510,334,964 7,345,5235,848,7218,816,949 7,489,655Total primary government(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)$ (53,448,905)$ Schedule 2(Accrual Basis of Accounting)Changes in Net Position, Last Ten Fiscal YearsCity of San Luis Obispo, California152
General Revenues and Other Changes in Net Position:Governmental activities:Sales and use taxes17,714,900$ 19,527,500$ 20,736,000$ 22,180,173$ 22,408,980$ 24,676,377$ 24,068,665$ 24,559,570$ 26,444,775$ 24,125,439$ Property taxes8,441,100 8,367,000 9,176,600 8,960,010 9,631,890 10,186,858 10,756,47711,425,510 12,238,35713,301,736Transient occupancy tax4,844,200 5,222,000 5,572,400 6,063,232 6,805,742 7,127,756 7,381,989 7,514,289 8,061,0876,325,841Utility users tax4,592,300 4,584,100 4,916,100 5,345,342 5,211,2075,413,720 5,539,4075,627,356 4,919,892 5,439,144Property tax in-lieu of vehicle license fees3,551,100 3,492,400 3,533,2003,645,692 3,849,3414,113,244 4,353,912 4,637,2534,961,080 5,290,215Other taxes and fees4,149,900 4,299,800 4,607,600 4,779,570 4,993,2854,800,592 3,929,3775,006,594 4,332,5574,883,677Investment earnings742,500 770,100237,100566,931467,348 825,760997,995164,434 1,618,354 3,368,951Miscellaneous and other414,700 227,200349,900679,127707,781---146,579 1,001,369Special item - sale of land--------- -Gain (loss) on disposal of capital assets(11,000)------ -Prior period adjustment2,657,100(833,234)----- -Cumulative change in accounting principle (GASB 65)(345,400)---- -Transfers(227,200)1,820,900115,100(73,771)(329,452)1,436,048 1,051,5631,198,0272,456,0351,889,900Total governmental activities44,223,500 48,311,000 51,544,700 51,313,072 53,746,122 58,580,35558,079,38560,133,03365,178,716 65,626,272Business-type activitiesInvestment earnings 725,300$ 726,100$ 73,500$ 364,551$ 361,627$ 845,906$ 182,261$ 320,471$ 2,516,216$ 2,880,634$ Cumulative change in accounting principle(842,600)Income from investment in joint venture239,200206,700209,300(25,469)153,949Transfers 227,200(1,820,900)(115,100)73,771329,452(1,436,048)(1,051,563)(1,198,027)(2,456,035)(1,889,900)Total business-type activities952,500(1,094,800)(884,200)438,322691,079(350,942)(662,602)(668,256)34,712 1,144,683Total primary government45,176,000$ 47,216,200$ 50,660,500$ 51,751,394$ 54,437,201$ 58,229,413$ 57,416,783$ 59,464,777$ 65,213,428$ 66,770,955$ Change in net position:Governmental activities3,900,000$ 5,799,200$ 6,651,200$ 8,074,478$ 15,853,818$ 21,821,200$ 8,691,598$ 1,184,093$ 618,977$ 4,687,712$ Business-type activities3,180,000 3,425,100 7,466,000 8,654,796 13,097,894 9,984,022 6,682,9215,180,4658,851,6618,634,338Total primary government 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$ 13,322,050$ 153
2010-112011-122012-132013-142014-152015-162016-172017-182018-192019-20General fund: Nonspendable: Prepaid items$ $ 2,777,000$ 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 Fund- - - 10,458,000 10,486,931 11,092,782 10,902,368 10,171,464 13,418,400 10,251,000Establishment of Section 115 Trust- - - - - - - - - 1,400,000Revenue stabilization- - - - - - - - - 1,000,000Development Services- - - - 1,848,386 382,396 41,110 596,796 531,000 899,277Public Safety- - - - 97,239 - - - - 1,096,215Risk management- - - - - - - - - 1,498,078City Attorney- - - - - - 100,000 100,000 - 100,000 Subsequent years expenditures8,200 11,900 - - - 2,716,534 - - 9,908,932 10,284,119 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 7,122,607Total general fund12,907,900 13,684,400 18,937,700 20,317,179 24,566,807 29,625,532 26,496,154 29,576,440 30,095,542 33,651,296For the Fiscal Year Ended June 30Schedule 3City of San Luis Obispo, CaliforniaFund Balances, Governmental FundsLast Ten Fiscal Years(Modified Accrual Basis of Accounting)154
All other governmental funds:Nonspendable - - - - - - 5,642 (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 2,226,898 Law enforcement grant programs42,000 20,500 22,900 27,145 16,886 23,492 20,786 3,073 - 32,332Transportation projects- - - - - - - - 8,151,487 9,371,824Affordable housing programs- - - - - - - - 2,944,549 8,698,494Impact fee programs- - - - - - - - 1,870,656 3,126,925Parkland development programs- - - - - - - - 3,528,662 4,709,560Public art programs- - - - - - - - 620,934 591,097Tourism programs- - - - - - - - 456,023 322,975 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 programs- 183,400 194,300 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 fund- - - - - - - 519,885 - - Public art programs293,700 373,700 347,400 - - - - - - - Assigned to: Contingency fund- - - - - - 900,000 900,000 900,000 900,000 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 8,521,320 Unassigned- - (2,500) 1,039 (83) - - - (318,422) (149,162)Total all other governmental funds18,605,600 14,544,400 15,352,400 21,353,232 22,476,959 20,498,689 26,059,944 23,891,661 26,619,850 38,352,263Total all governmental funds31,513,500$ 28,228,800$ 34,290,100$ 41,670,411$ 47,043,766$ 50,124,221$ 52,556,098$ 53,468,101$ 56,715,392$ 72,003,559$ 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.155
2010-112011-122012-132013-142014-152015-16 2016-172017-182018-192019-20Revenues: Sales and use - general12,098,600$ 13,290,000$ 14,242,200$ 15,405,808$ 15,272,683$ 17,498,218$ 16,737,005$ 17,055,085$ 17,805,482$ 16,571,064$ Sales and Use - half percent sales tax5,616,300 6,237,500 6,493,800 6,774,365 7,136,297 7,178,159 7,331,660 7,504,485 8,325,230 7,554,375 Prop. 172 Public Safety tax271,300 307,400 327,700 391,567 409,590 405,066 405,512 397,488 314,063 416,459 Property tax 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 12,913,661 Transient Occupancy4,844,200 5,222,000 5,572,400 6,063,232 6,805,742 7,127,756 7,381,989 7,514,289 8,061,087 6,325,841 Utility users tax4,592,300 4,584,100 4,916,100 5,345,342 5,211,207 5,413,720 5,539,407 5,627,356 4,919,892 5,439,144 Property tax in-lieu of VLF (Note 1)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 5,290,215 Franchise fees2,352,100 2,462,300 2,552,300 2,636,599 2,790,077 1,537,922 1,557,128 1,597,655 1,428,296 1,888,414 Business tax1,797,800 1,837,500 2,055,300 2,142,971 2,203,208 2,491,516 2,372,249 2,663,686 2,630,499 2,995,263 Real property transfer133,700 144,000 256,300 287,560 298,191 366,088 332,314 347,765 273,762 388,075 Fines, forfeitures and penalties171,400 174,300 159,700 150,185 184,320 172,353 139,534 199,374 155,269 239,048 Use of money and property742,500 770,100 237,100 566,931 467,348 825,760 260,169 164,434 1,996,382 2,005,968 Vehicle License Fees (Note 1)205,600 45,600 19,300 - - - - - - - Subventions and grants4,776,500 3,932,100 4,603,140 5,989,881 10,858,570 11,771,980 2,624,753 4,156,333 3,110,689 7,538,893 Charges for services9,209,300 8,954,500 8,106,600 11,167,033 12,450,887 13,622,945 15,173,707 14,672,746 18,394,586 17,828,561 Other revenues270,500 36,500 526,500 357,469 217,710 242,744 446,456 634,391 590,796 708,579Total revenues59,074,300 59,857,300 62,778,240 69,884,645 77,787,061 82,954,329 75,412,272 78,597,850 85,205,470 88,103,560Expenditures:Current: General Government6,828,700$ 8,175,200$ 8,723,300$ 9,362,031$ 10,534,463$ 12,409,567$ 11,824,360$ 12,709,324$ 13,769,778$ 14,503,410$ Public safety23,506,100 23,953,200 23,973,400 24,798,500 24,356,077 26,468,454 28,091,747 28,862,906 31,714,220 30,216,995 Transportation2,901,900 2,865,100 2,798,200 2,882,241 2,969,111 3,317,177 3,780,804 3,565,022 3,495,909 3,710,943 Culture and recreation6,268,700 6,704,200 6,790,300 7,155,619 7,250,398 7,428,198 7,712,834 8,571,184 8,636,582 8,416,687 Community development7,053,500 6,986,300 7,777,400 8,389,957 10,047,272 10,770,827 10,300,894 10,815,667 10,677,334 10,477,062Debt service: Principal1,774,000 1,493,200 1,543,000 1,534,668 3,856,325 1,792,849 2,101,296 15,665,904 1,974,050 1,605,239 Interest1,249,200 1,211,800 1,192,700 1,048,671 1,063,820 1,349,216 1,215,504 1,524,180 809,977 993,697 Debt issuance costs36,000 - - - - - - - - -Capital: Public safety494,100 447,900 457,700 892,351 2,371,865 1,220,759 1,772,454 506,491 706,918 182,235 Transportation6,913,200 9,121,000 5,228,300 4,859,863 14,302,937 15,038,306 4,161,966 6,419,137 6,441,229 6,412,541 Culture and recreation584,500 862,000 395,500 1,272,510 2,399,211 1,463,269 1,499,704 981,768 597,187 1,213,682 Community development (Note 2)884,100 705,300 70,900 939,017 123,258 149,537 2,078,181 525,105 1,568,147 785,517 General government1,731,400 274,900 429,700 145,199 1,684,045 590,263 633,682 1,192,424 4,695,978 2,081,482Total expenditures60,225,400 62,800,100 59,380,400 63,280,627 80,958,782 81,998,422 75,173,426 91,339,112 85,087,309 80,599,490Excess of revenues over(under) expenditures(1,151,100) (2,942,800) 3,397,840 6,604,018 (3,171,722) 955,907 238,846 (12,741,262) 118,161 7,504,070Schedule 4(Modified accrual basis of accounting)Last Ten Fiscal Years Revenues, Expenditures and Changes in Fund Balances of Governmental FundsCity of San Luis Obispo, California156
Other FinancingSources(Uses):Sale of surplus property 393,900$ 30,200$ -$ -$ -$ -$ -$ -$ -$ -$ Issuance of debt/refunding debt 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 - (5,442,200) - - - - - - - -Transfers in 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 9,455,785Transfers out (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) (7,565,885)Total other financing sources(uses) 1,246,700 (341,900) 103,600 777,004 8,042,871 2,124,548 2,193,031 13,670,725 3,129,130 1,889,900Net change in fund balance 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$ 9,393,970$ Debt service as a percentage of noncapital expenditures 7.61% 6.68% 6.62% 5.98% 8.92% 5.20% 5.37% 26.64% 4.08% 3.86%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. 157
2009-102010-112011-122012-132013-142014-152015-162016-172017-182018-192019-20Staffing: 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$ 28,601,004$ 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 1,882,307 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 3,292,469 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 12,593,753 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 4,291,139 Medicare370,300 367,100 371,200 384,400 393,913 408,889 418,704 455,966 469,688 477,925 481,571 Unemployment Reimbursements87,600 35,500 26,200 28,800 31,634 48,588 5,159 150,929 61,972 - 61,240 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 53,481,475 51,203,483Contract 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 6,557,9396,444,957Other 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 2,444,5642,115,821 Rents & leases130,500141,800136,800139,600197,104159,718164,729170,288171,909180,478160,045 Insurance: General liability & property1,447,300 1,434,600 1,475,600 1,320,700 1,425,450 1,646,605 1,847,422 1,273,133 1,658,319 1,600,9622,196,462 Workers compensation760,500447,100594,400918,000 1,405,916 1,631,585 2,019,722 1,627,423 2,145,046 2,422,8432,611,827 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 3,575,9304,902,050 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 11,986,205Minor capital38,300 10,800 14,200 99,400 195,473 78,414 92,853 203,098 90,346 - -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 70,264,191 69,634,645 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) (4,277,664)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$ 66,282,402$ 65,356,981$ 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 $364,800. While this change in accounting increases costs initially, in the not-so-distant future (about 12 years), it becomes a much less expensive option than continuing "pay-as-you-go" cash funding.Schedule 5(Modified Accrual Basis of Accounting)Last Ten Fiscal YearsGeneral Fund Operating Expenditures by TypeCity of San Luis Obispo, California158
Fiscal Sales Half Percent Property Transient Utility Property Franchise BusinessOther Yearand UseSales (Note 2) (Note 1) Occupancy Usersin-lieu of VLFFeesTaxTaxesTotal2010-11 12,098,600$ 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$ 2019-20 16,571,064$ 7,554,375$ 12,913,661$ 6,325,841$ 5,439,144$ 5,290,215$ 1,888,414$ 2,995,263$ 388,075$ 59,366,052$ 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 6City of San Luis Obispo, CaliforniaGovernmental Activities Tax and Franchise Revenues by SourceLast Ten Fiscal Years159
Fiscal YearHomeowners Secured Roll Unitary UnsecuredTotal Direct Market Value of MarketExemptions Gross ValueRollTOTAL Tax Rate (Note 1) Value2010-1141,929,800$ 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%2019-2043,335,854$ 9,156,811,458$ 3,990,145$ 360,372,662$ 9,521,174,265$ 1.00% 9,521,174,265$ 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, Coren & Cone CAFR 2019-20 report - 2019/20 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 Years160
2010-112011-122012-13 2013-14 2014-152015-16 2016-17 2017-18 2018-19 2019-20Proposition 13 maximum tax rate (Note 2)1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000Voter approved indebtedness: State Water Bond0.00290 0.00300 0.00400 0.00400 0.00400 0.00374 0.00400 0.00400 0.00400 0.00400 Cuesta Community College 2014 A & A10.01925 0.01925 0.01925 0.01925 0.01925 San Luis Coastal Usd 2014 Series A & B0.04900 0.04900 0.04900 0.04900 0.04900Total (Notes 1 and 3)1.00290 1.00300 1.00400 1.00400 1.00400 1.07199 1.07225 1.07225 1.07225 1.07225Notes:1. Property tax rates are levied per $100 of assessed valuation. The tax rate information provided is for Tax Rate Area 003-000, which is the largest tax rate area in the City.2. The passage of Proposition 13 on June 6, 1978 established a maximum County-wide levy for general revenue purposes of 1% of market value. Voter-approved tax rates for the retirement of long-term liabilities were excluded from this limit.3. It is not possible to identify tax rates for individual agencies however, the following is a summary of derived property tax allocations within Tax Rate Area 003-000 for Fiscal Year 2019-20:BaseERAFNetRateAllocation ApportionmentSan Luis Coastal Unified School District36.100.0036.10San Luis Obispo County - General Fund30.33(8.06)21.52City of San Luis Obispo18.37 *(3.48)14.88San Luis Obispo Community College District6.420.006.42County School Services3.810.003.81City/County Library1.98(0.32)1.66Port San Luis Harbor1.63(0.44)1.19Other Agencies1.38(0.32)1.06Education Revenue Augmentation Fund (ERAF)12.6112.61 Total100%0%100%*The County further adjusts the 18.4% base rate for revenue shifts to school districts as directed by the State as part of their cuts to local agencies,resulting in an effective rate for the City of approximately 14.9%. Source: HdL, Coren & Cone CAFR 2019-20 report - Direct & Overlapping Property Tax Rates tableData source: San Luis Obispo County Assessor 2019-20 Post ERAF TRA Allocation FactorsSchedule 8Last Ten Fiscal YearsProperty Tax RatesCity of San Luis Obispo, California161
Number of SecuredPercent of Total Number of SecuredPercent of TotalOwnerParcels Assessed Value Rank City Assessed Value Parcels Assessed Value Rank City Assessed ValueJamestown Premier San Luis Obispo Retail 10115,502,974$ 11.24%CAP VIII - Mustang Village LLC594,501,067 21.02%Sierra Vista Hospital Inc.878,295,740 30.84% 669,716,275$ 21.11%San Luis Obispo Promenade DE LLC1068,806,495 40.74%Dignity Community Care562,548,476 50.67%Irish Hills Plaza East LLC650,598,101 60.54%Charles Pasquini Jr Trust Et Al343,901,568 70.47% 643,385,222 30.69%DS Marigold LP842,429,179 80.46%Costco Wholesale Corporation136,519,170 90.39% 132,069,250 60.51%BRE Atlas Property Owner LLC133,159,218 100.36%CSHV Mustang Village574,933,498 11.20%Irish Hills Plaza West II LLC233,818,948 40.54%JM Wilson Promenade Properties II1032,700,000 50.52%Charter Communications Properties319,235,211 70.43%John E. and Carole D. King525,270,768 80.40%Marigold Center LLC924,957,077 90.40%Stephen N. Dorsi Trust921,123,420 100.34% Total57626,261,988$ 6.73% 56377,209,669$ 6.14%Source: HdL, Coren & Cone CAFR 2019-20 and 2010-11 reports - Top Ten Property Taxpayers table.2010-11Schedule 9City of San Luis Obispo, CaliforniaPrincipal Property Tax Payers Current Year and Nine Years Ago2019-20162
Schedule 1Total SecuredCurrent Year PercentFiscal Tax Levy Current Year Percent Delinquencies DelinquentYear (Notes 1 and 2) Collections Collected (Note 3) (Note 3)2010-118,405,600$ 8,405,600$ 100% 002011-128,269,300$ 8,269,300$ 100% 00`2012-138,151,000$ 8,151,000$ 100% 002013-148,601,630$ 8,601,630$ 100% 002014-159,097,280$ 9,097,280$ 100% 002015-169,707,340$ 9,707,340$ 100% 002016-1710,250,205$ 10,250,205$ 100% 002017-1810,868,920$ 10,868,920$ 100% 002018-1911,648,706$ 11,648,706$ 100% 002019-2012,180,662$ 12,180,662$ 100% 00123Source: San Luis Obispo County Auditor-Controller - 2019-20 Property Tax Estimates and Delinquencies ReportThe 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. Theamount reported is before the SB2557 County administrative fees of approximately 3% of total property tax revenues.Notes:The secured levy does not include supplemental assessments, unsecured tax revenues, or prior year adjustments, which can be significant. Forexample, in 2012-13 revenue to the City from supplemental assessments was$99,500 and $215,100 from unsecured. A one-time refund was receivedfrom the County Auditor-Controller, refunding $632,800 representing prior overcharges for the SB2557 fee. Property tax revenues totaled $8,740,762.The City has elected the Teeter Plan method of property tax collection, whereby the County remits 100% of taxes levied and pursues collection andretains any delinquent taxes and related penalties and interest.Schedule 10City of San Luis Obispo, CaliforniaSecured Property Tax Roll Levies and CollectionsLast Ten Fiscal Years163
2010 2011 2012 2013 2014 2015 20162017 2018 2019Sales In Thousands of DollarsApparel stores 69,554$ 70,240$ 71,723$ 73,170$ 73,241$ 75,037$ 72,522$ 74,300$ 72,735$ 71,058$ General merchandise stores123,307 148,869 171,667 173,940 179,551 182,530 179,478 182,184 179,353 181,492Food and drug stores38,209 39,565 39,704 40,638 41,985 43,799 43,473 46,065 47,138 48,805Eating & drinking palces119,491 127,627 142,844 147,953 159,828 172,341 178,362 184,366 184,909 188,430Building materials & farm tools 92,126 102,999 111,633 126,123 133,143 140,258 142,370 159,569 162,295 163,186Auto dealers & supplies178,594 193,085 227,510 269,602 287,880 304,905 306,812 319,977 323,272 322,174Service stations84,354 103,659 107,588 103,094 101,510 88,116 78,033 83,481 94,320 95,367Other retail stores247,854 256,828 263,571 262,668 267,764 277,591 282,844 278,792 279,760 263,986 Total retail stores953,489 1,042,872 1,136,240 1,197,188 1,244,902 1,284,577 1,283,894 1,328,734 1,343,782 1,334,498All other outlets242,792 286,156 278,271 293,532 311,225 359,242 363,023 372,575 431,884 421,068 Total 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 1,755,566Source: HdL, Coren & Cone CAFR 2019-20 report - Taxable Sales by Category tableLast Ten Calendar YearsSchedule of Taxable Sales and Permits by CategoryCity of San Luis Obispo, CaliforniaSchedule 11164
EffectiveEnd StateLocalCityCombinedDateDateJurisdictionTransportation FundRateRate8/1/1933 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%4/1/2009 6/30/20117.25%0.25% 1.25%8.75%7/1/2011 12/31/20126.25%0.25% 1.25%7.75%1/1/2013 12/31/20167.25%0.25% 0.50%8.00%1/1/2017 current7.00%0.25% 0.50%7.75%Notes:12345Schedule 12City of San Luis Obispo, CaliforniaHistorical Sales and Use Tax RatesSource: State Board of Equalization, State of CaliforniaThe 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 January1, 1962, all cities and counties have adopted ordinances for the State Board of Equalization to collect the local tax.Sales tax only. The use tax was enacted effective July 1, 1935.In March 2004, a State ballot measure was passed issuing deficit reductionbonds for State purposes. Funding was provided effective July 1, 2004 by repealing 25% ofthe 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 thenbe "madewhole" by the State from increased property tax allocations via reduced contributions to ERAF. This "triple flip" is theoretically revenue-neutral, and as such, theeffective rate for revenue purposes remains at 1%.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 taxmeasure has a sunset provision of 8 years. The local Sales Tax was extended as Measure G in the November 2014 election for 8 years.Proposition 30,The Schools and Local Public Safety Protection Act of 2012, was approved by California voters in November 2012 to temporarily increase the salesand use tax by 0.25%. The sales and use tax imposed by Proposition 30 expired December 31, 2016.165
No. of No. of Certificates Percent Certificates PercentConstruction932 12.1%1,056 12.9%Manufacturing143 1.9%167 2.0%Transportation/Utilities45 0.6%36 0.4%Wholesale129 1.7%138 1.7%Retail972 12.7%1,064 13.0%Professional1,159 15.1%1,098 13.4%Residential Rental2,134 27.8%2,252 27.4%Commercial Rental294 3.8%301 3.7%Services1,867 24.3%2,093 25.5% Total business certificates issued7,675100%8,205100%Home occupations 693 9.0% 762 9.3%Located outside City limits 1,839 24.0% 1,948 23.7%Located in Downtown Business Improvement District 572 7.5% 620 7.6%Source: City of San Luis Obispo Finance Department - Revenue DivisionFiscal Years Ended June 30, 2020 and 2019Schedule of Business Tax Certificates Issued City of San Luis Obispo, CaliforniaSchedule 1320192020166
Percentage ofFiscal Lease Purchase Lease Purchase Installment Total Primary Per Gross AssessedYear Bonds Financing Loans Bonds Financing Sales Agreement Loans Government Capita Value2010-11 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%2019-20 21,084,777$ 745,213$ 323,380$ 18,185,089$ -$ 5,562,462$ 26,133,837$ 72,034,758$ 1,569$ 0.76%Sources:City of San Luis Obispo Finance DepartmentSchedule 14City of San Luis Obispo, CaliforniaPer Capita Outstanding Debt By TypeLast Ten Fiscal YearsGovernmental ActivitiesBusiness-Type Activities167
ServiceRatio of NetNet Taxable General Payable from Net Bonded Debt Net BondedAssessed Bonded Enterprise Bonded to Assessed Debt perFiscal Year Population Value Debt Revenues DebtValueCapita2010-1144,948 $6,270,234,2000000.0%02011-1245,308 $6,176,832,1000000.0%02012-1345,541 $6,261,931,9000000.0%02013-1445,473 $6,467,600,4000000.0%02014-1545,484 $6,814,727,7850000.0%02015-1646,117 $7,275,544,1220000.0%02016-1746,724 $7,702,282,8280000.0%02017-1846,548 $8,179,683,4540000.0%02018-1946,802 $9,052,361,8990000.0%02019-2045,920 $9,521,174,2650000.0%0Notes:1. Valuations are established by the County Assessor of the County of San Luis Obispo, except for property owned by private utility companies, which is valued by the State of California.2. See Schedule of Demographic and Economic Statistics for population data. 3. Personal income information is not available. Net Bonded Debt is expressed as a ratio to Assessed Value. Source: HdL, Coren & Cone CAFR 2019-20 report - Demographic and Economic Statistics tableDemographics changed from FY to Calendar YearSchedule 15City of San Luis Obispo, CaliforniaRatio of Net General Bonded Debt to Assessed Value and Net Bonded Debt per CapitalLast Ten Fiscal Years168
Amount ApplicablePercent Applicable to the City ofto the City ofSan Luis ObispoSan Luis Obispoas of June 30, 2020Direct long-term debt: City of San Luis Obispo 2018 Water Revenue Refunding Bonds100.000%9,640,000$ 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 15,655,00037,815,000Overlapping long-term debt (percentage of overlapping agency's assessed valuation located within boundaries of the City): San Luis Obispo County General Fund Obligations16.184%6,810,817 San Luis Obispo County Pension Obligations16.184%5,986,217 City of San Luis Obispo Lease Revenue Bonds100.000%26,861,93139,658,965Less: City of San Luis Obispo obligations supported by enterprise revenues5,131,875Total gross direct and overlapping long-term debt34,527,090Less 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) 2,070,000Total self-supporting issues11,710,000Net direct and overlapping long-term debt22,817,090$ Ratio of long-term debt to assessed valuation and populationGross Assessed Valuation9,521,174,265$ Population45,920Percent of GrossPer CapitaAmountAssessed ValuationLong-Term DebtDirect and Overlapping Debt:Gross $34,527,090 0.4% $751.90Net 22,817,090 0.2% 497Direct Debt:Gross $37,815,000 0.4% $823.50Net 26,105,000 0.3% 568Source: California Municipal Statistics, Inc., HdL, Coren & Cone CAFR 2019-20 report - Demographic and Economic Statistics tableSchedule 16City of San Luis Obispo, CaliforniaDirect and Overlapping Long-Term DebtFiscal Year Ended June 30, 2020169
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-192019-20Legal debt limit 234,887$ 231,384$ 234,822$ 241,812$ 244,175$ 272,833$ 288,836$ 306,738$ 339,464$ 357,044$ Total debt applicable to limitLegal debt margin234,887 231,384 234,822 241,812 244,175 272,833 288,836 306,738 339,464 357,044Total 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 2019-20Gross Assessed Valuation9,521,174,265$ Legal Debt Limit - 3.75% of Gross Assessed Valuation357,044,035$ Long-term Debt:Revenue Bonds Secured by Capital Leases 18,105,000$ Water Revenue Bonds10,810,000$ 28,915,000Less deductions allowed by law:Revenue Bonds Secured by Capital Leases18,105,000Water Revenue Bonds10,810,00028,915,000Total debt applicable to computed limit$0Legal debt margin357,044,035$ 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. (Amounts Expressed in Thousands)Last Ten Fiscal YearsComputation of Legal Debt MarginCity of San Luis Obispo, CaliforniaSchedule 17170
LessOperating &Net RevenueCoverage Fiscal Operating Development Other MaintenanceAvailable forWith Year Revenues Impact Fees Revenues Expenses Bond Debt ServicePrincipal Interest Total CoverageImpact Fees2010-11 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%2019-20 25,666,777$ (3,723,460)$ 663,838$ (19,485,472)$ 3,121,683$ 1,367,920$ 637,348$ 2,005,268$ 156% 341%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 DepartmentCity of San Luis Obispo, CaliforniaSchedule 183. 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 loanLast Ten Fiscal YearsRevenue Bond Coverage - Water Fund171
Net RevenueFiscal Gross OperatingAvailable forYear Revenues Expenses Bond Debt Service Principal Interest Total Coverage2010-11 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%2019-20 3,293,941$ (3,080,588)$ 213,353$ 513,480$ 354,806$ 868,286$ 25%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. Schedule 19City of San Luis Obispo, CaliforniaRevenue Bond Coverage - Parking FundLast Ten Fiscal Years2. 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 Requirements172
PersonalPublic Elementary andCuesta CollegeCalendarIncome Median Secondary SchoolFull Time Enrollment Unemployment Year Population (1) in 000's (1) Age (1)Enrollment (2)SLO Campus (3)Rate (1)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%201945,920 1,505 26.2 7,801 4,627 2.4%Sources:1. HdL, Coren & Cone CAFR 2019-20 report - Demographic and Economic Statistics table2. 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 Years173
PercentagePercentageNumberof Total CityNumberof Total CityEmployerEmployees Rank Employment Employees Rank EmploymentCal Poly State University3,000 1 12.45%2,426 2 8.70%County of San Luis Obispo2,920 2 12.12%2,601 1 9.32%Dept of State Hospitals - Atascadero2,000 3 8.30%P.G. & E (Diablo Canyon)1,866 4 7.74%1,719 4 6.16%California Men's Colony1,517 5 6.29%1,768 3 6.34%Tenet Health Care Corp.1,305 6 5.41%Compass Health1,200 7 4.98%Lucia Mar Unified School District1,000 8 4.15%1100 5 3.94%MindBody929 9 3.85%San Luis Coastal Unified School District760 10 3.15%8287 2.97%King Ventures8506 3.05%Cuesta Community College8268 2.96%French Hospital5209 1.86%City of San Luis Obispo520 10 1.86%Total16,49768.45%13,15837.84%Note: Source for the 2019-20 employers information is San Luis Obispo Chamber of Commerce. This information represents employers in San Luis Obispo community. 2010-11 data is from the City's CAFR. Schedule 21City of San Luis Obispo, CaliforniaPrincipal EmployersCurrent Year and Nine Years Ago2010-112019-20174
Function2010-11 2011-12 2012-13 2013-14 2014-15 2015-162016-17 2017-18 2018-19 2019-20Public Safety Police Sworn59.0 57.0 57.0 60.0 60.0 61.0 61.0 61.5 61.5 64.5 Non-sworn27.5 26.5 25.5 25.5 25.5 25.5 25.5 24.0 24.0 24.0 Fire Sworn44.0 44.0 44.0 49.0 49.0 50.0 47.0 47.0 47.0 47.0 Non-sworn9.0 7.8 6.8 4.0 4.0 4.0 10.0 10.0 10.0 10.0Public Utilities63.8 60.9 61.9 64.8 64.8 67.1 69.1 69.1 69.1 69.1Transportation29.2 31.8 31.8 28.9 28.9 36.8 36.8 210.8 84.3 68.3Culture and recreation33.0 32.0 32.0 34.0 34.0 35.0 35.0 34.0 18.0 33.0Community Development37.3 42.8 43.8 39.5 40.0 51.0 51.0 32.4 32.9 32.5General Government54.8 50.5 52.2 56.0 56.0 57.0 61.0 45.5 46.8 49.3Total357.6 353.3 355.0 361.7 362.2 387.4 396.4 534.3 393.6 397.7Ratio of Sworn Police Personnel per 1,000 Population:* 1.30 1.261.25 1.32 1.32 1.33 1.31 1.31 1.31 1.31Ratio of Sworn Fire Personnel per 1,000 Population:* 0.97 0.97 0.97 1.08 1.08 1.06 1.01 1.00 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 DepartmentLast Ten Fiscal YearsRegular Authorized PositionsCity of San Luis Obispo, CaliforniaSchedule 22175
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20Function/Program:Police:Calls for police/fire service 32,074 34,751 36,236 34,659 36,515 38,300 39,620 39,103 37,825 37,335Incident numbers issued 27,595 29,991 31,156 29,277 31,048 32,542 33,360 32,730 31,471 31,472Police reports written 7,661 8,322 9,192 8,665 8,435 8,852 8,675 7,735 6,999 6,297Traffic citations issuedOther citations issuedViolations cited 5,939 8,119 7,213 5,793 6,648 7,673 7,649 7,524 5,874 4,020Citations issued 5,380 7,718 6,665 5,275 6,204 7,038 7,030 6,752 5,287 3,660Collision reports 728 669 643 625 630 587 608 609 623 481Violent crimes:** 126 134 117 158 237 173 177 178 191 187 Willful homicide** 2 1 0 0 00010 Forcible rape** 27 24 18 31 44 29 38 44 55 39 Robbery** 35 34 19 26 25 13 21 23 33 34 Aggravated assault** 64 74 79 101 168 131 118 111 103 114Property crimes:**640 714 804 713 542 637 731 644 728 728 Burglary**372 330 414 328 206 225 251 172 244 277 Motor vehicle theft**54 107 81 63 71 87 95 94 74 74Larceny-theft:**1,260 1,345 1,476 1,384 1,162 1,335 1,730 1,516 1,493 1,387 Over $400**214 277 309 322 265 325 385 378 410 377 $400 and under**1,046 1,068 1,167 1,062 897 1,010 1,345 1,138 1,083 1,010Fire:Medical responses***(Note 4)2,799 2,856 2,985 3,232 3,417 3,540 4,5384,2483,7153,884Fire suppression responses***(Note 4)101 102 95 105 111151143163122127Hazardous materials responses***(Note 4)23 17 21 15 212221172529Other responses***(Note 4)1,528 1,552 1,812 1,840 1,929 2,158 1,7991,7852,1002,140 Total service responses***4,451 4,527 4,913 5,1925,478 5,871 6,5016,2135,9626,180Fire and life-safety inspections***2,489 2,431 2,494 644 2,476 2,516 3,7563,7382,0023,128Arson investigations*** (note 6)22 18 49 44 17448122421Education activities (# of people)***20,106 23,120 23,377 23,945 23,697 23,680 23,575 23,5402,6902,700Public Utilities:Water/Sewer customer accounts14,734 14,695 14,742 14,899 14,953 15,167 15,188 15,505 15,555 15,672Miles of sewerline 137 137 137 197 139.6138143143146Miles of waterline 185 185 187 187 *187191197187190191Water service line repairs and renewals***** 86 50 66 58 605050573848Sewer main stoppages9 7 12 15 13114108Acre feet of water delivered - Nacimiento981 2,321 663 1,506 839 3,574 3,817 3,753 3,484 1,470Acre feet of water delivered - Salinas2,640 2,149 2,378 1,444 1,98682738537902,165Acre feet of water delivered - Whale Rock1,277 2,875 3,212 2,615 1,3759499248001,556Last Ten Fiscal YearsOperating Indicators and Capital Asset Statistics by FunctionCity of San Luis Obispo, CaliforniaSchedule 23176
Last Ten Fiscal YearsOperating Indicators and Capital Asset Statistics by FunctionCity of San Luis Obispo, CaliforniaSchedule 23Transportation:Signals and lights: Intersections with traffic signals 67 70 68 70 70 70 70 70 Traffic signal service requests 80 85 80 85 90 60 71 59 Streetlights operated & maintained 2,230 2,300 2,300 2,300 2,300 2,280 2,280 2,280 Streetlight service requests 500 180 175 45 50 13 8 11Roadways: Estimated miles of paved streets 130 132 132 133 133 133 133 134 197 134 Pavement condition index 74 72 71 72 72 71 71 70 73 70 Number of street lights 2,270 2,270 2,270 2,300 2,300 2,300 2,300 2,280 2,280 2,280 Traffic collisions 597 621 593 660 720 531 482 501 431 441 Parking spaces provided (lot, garage & street) 3,067 3,065 3,071 3,119 3,176 2,953 2,892 2,871 2,865 2,865 Parking citations written 30,278 26,515 28,690 23,957 20,690 24,213 23,348 21,647 24,415 21,240 Total transit passengers 1,045,299 1,118,519 1,109,600 1,122,000 1,099,274 1,209,708 1,131,716 945,288 981,995 715,380Culture and recreation:Open space acres maintained 3,420 3,510 3,510 3,510 3,510 3,510 3,510 3,775 4,040 4,040Open space easement acres 161 3,200 3,200 3,200 3,200 3,200 3,200 3,200 3,500 3,500Trail mileage 40 45 47 49 49 52 52 55 55 56Total golf rounds played 32,228 34,699 33,067 34,766 33,674 30,572 28,196 35,670 24,662 16,428Acres of park landscape maintained 157 157 157 157 157 157 157 500 570 530City Maintained Trees 18,700 18,700 18,700 18,700 19,000 20,000 20,000 20,000 20,000 20,000Children's services program enrollment totals 1,664 1,755 1,605 2,338 2,360 2,115 2,115 1,950 2,050 1,775Triathlon: participants, spectators and volunteers****** 5,400 6,000 6,525 6,000 5,500 5,200 5,000 887 869 0Annual senior attendance (total)****** 14,500 14,000 14,200 * * * 265 331 350 315Facility permits processed 1,806 1,803 1,269 1,416 836 1,305 1,073864909650Annual aquatics attendance (total)56,676 56,042 67,000 73,903 83,107 68,403 96,687 97,701 87,690 55,202Adult athletic teams registered245 320 325 338 320325325362292184Youth athletic participants registered1,320 1,400 1,300 1,200 1,350 1,300 1,1501,1151,140618Special event applications processed68 78 84 103 103 77 101 88 95 40Banner permits processed72 86 76 82 478756458178Instructional class enrollments1,628 1,400 1,308 1,424 1,751 1,151 1,7241,4391,118595177
Last Ten Fiscal YearsOperating Indicators and Capital Asset Statistics by FunctionCity of San Luis Obispo, CaliforniaSchedule 23Community Development (Note 7):Housing characteristics: Single family units (annually cumulative) 10,951 10,969 10,994 11,133 11,230 11,306 11,413 11,510 11,693 2-4 units (annually cumulative) 2,634 2,650 2,656 2,692 2,695 2,789 2,851 2,865 2,869 5 or more unit structures (annually cumulative) 5,596 5,596 5,647 5,767 5,804 6,038 6,097 6,148 6,209 Mobile homes (annually cumulative) 1,482 1,482 1,482 1,482 1,482 1,482 1,482 1,482 1,483 Total (annually cumulative) - 20,663 20,697 20,779 21,074 21,211 21,615 21,843 22,005 22,254 Housing units (replaces above categories) 20,578 Households (replaces above categories)Building permits issued (Note 1): 442 463 566 511 597 584 584 623 Residential: Single family residential (Note 2) 7 13 48 59 114 97 62 125 159 171 Multi-family residential (includes second units & ADUs) 3 10 6 8 32 5 13 18 19 17 Non-residential 7 5 7 9 27 13 14 10 15 12 Other permits: Additions, alternations, demolitions (Note 4) 499 459 530 458 460 522 545 502 381 510 Other improvements (motel rooms)1 Total 516 487 591 534 1,230 1,221 1,218 1,278 575 710Approximate value of building permits (in thousands) Residential: Single family residential 6,085$ 3,278$ 15,698$ 15,412$ 36,722$ 26,441$ 15,024$ 19,707$ 24,300$ 28,026$ Multi-family residential926 3,847 1,560 6,744 26,499 13,500 8,172 17,249 21,162 33,606 Non-residential16,608 5,142 1,935 15,310 9,791 11,484 51,110 6,248 20,430 16,981 Other permits: Additions, alternations, demolitions (Note 4)15,948 16,589 20,761 19,139 22,897 30,230 27,711 14,928 34,596 60,812 Other improvements Total39,567$ 28,856$ 39,954$ 56,605$ 95,909$ 81,655$ 102,017$ 58,132$ 100,488$ 139,425$ Building inspections conducted10,210 13,685 10,543 8,996 6,641 7,195 10,745 9,974 7,537 8,670Home occupation permits processed/applied for126 117 142 129 113 163 144 112 112 131Development permit applications received172 148 217 311 293 253 236 215 215 338178
Last Ten Fiscal YearsOperating Indicators and Capital Asset Statistics by FunctionCity of San Luis Obispo, CaliforniaSchedule 23General Government:Business tax certificates issued: Located outside city limits 1,569 1,670 1,670 1,472 1,602 2,018 1,699 1,872 1,948 1,839 Total certificates issued 6,873 7,086 7,086 6,934 7,805 7,597 8,118 8,230 8,205 7,675Human resources recruitments (total) 42 59 91 105 129 103 103 97 99 86City-wide fleet & equipment assets 290 290 290 290 300 318 323 339 338Telephone lines managed 1,003 1,024 981 995 1,037 1,005 998 907 971 963Cell phones supported**** 351 338 344 383 460 453 476 492 481 487IT users supported 450 498 498 490 511 515 467 471 488 475* 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. 5. Leisure, Culture and Social Services Indicators for FY 19-20 were lower compared to previous years due to COVID-19 program closures and capacity restrictions.6. Police Department Conducts Arson Investigations, Fire Department Conducts Cause and Origin Investigations. Reported number is Cause and Origin Investigations7. Beginnig in 2016-17, building permit data reported in terms of calendar years, in alignment with State-mandated reporting requirements. Beginning in 2019-20, All Community Development Indicators, all data reported in terms of calendar years,.Source: City of San Luis Obispo Departments179
Fiscal Historic Increase/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%2019-20 15,6720.01%21,519,632$ 9.92%5,1912%Source: City of San Luis Obispo Utilities Department. Schedule 24City of San Luis Obispo, CaliforniaWater SystemStatistical Data180
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As ofMonthlyMulti-family dwellingCommercialLandscapeSingle family Multi-family dwellingJune 30 of Each YearConsumption Price per hcf*dwellingCommercial20110-5 hcf5.21$ $6.55 min. charge per $6.55 min. charge per $6.55 min. charge per6-25 hcf6.52 dwelling unitaccountaccount26 + hcf (note 2)8.17 $7.22/unit volume charge ** $7.22/unit volume charge ** $7.22/unit volume charge20120-5 hcf5.73$ $7.01 min. charge per $7.01 min. charge per $7.01 min. charge per6-25 hcf7.17 dwelling unitaccountaccount26 + hcf (note 2)8.99 $7.73/unit volume charge ** $7.73/unit volume charge ** $7.73/unit volume charge2013Base Fee5.00$ $7.43 min. charge per $7.43 min. charge per $7.43 min. charge per0-8 hcf6.25 dwelling unitdwelling unitdwelling unit8 + hcf 7.82 $8.19/unit volume charge ** $8.19/unit volume charge ** $8.19/unit volume charge2014Base Fee5.28$ $7.73 min. charge per $7.73 min. charge per $7.73 min. charge per1-8 hcf6.56 dwelling unitdwelling unitdwelling unit8 + hcf8.20 $8.52/unit volume charge** $8.52/unit volume charge** $8.52/unit volume charge2015Base Fee9.98$ $7.96 min. charge per $7.96 min. charge per $7.96 min. charge per1-8 hcf6.92 dwelling unitdwelling unitdwelling unit8 + hcf8.65 $8.77/unit volume charge** $8.77/unit volume charge** $8.77/unit volume charge2016Base Fee9.98$ $8.32 min. charge per $8.32 min. charge per $8.32 min. charge perBase Fee Drought Surcharge0.74 dwelling unitdwelling unitdwelling unit1-8 hcf6.92 $9.17/unit volume charge** $9.17/unit volume charge** $9.17/unit volume chargeDrought Surcharge1.109 + hcf8.65Drought Surcharge1.372017Base Fee9.98$ $8.57 min. charge per $8.57 min. charge per $8.57 min. charge perBase Fee Drought Surcharge0.74 dwelling unitdwelling unitdwelling unit1-8 hcf6.92 $9.44/unit volume charge** $9.44/unit volume charge** $9.44/unit volume chargeDrought Surcharge1.109 + hcf8.65Drought Surcharge1.372018Base Fee12.33$ $8.57 min. charge per $8.57 min. charge per $8.57 min. charge per1-8 hcf7.27 dwelling unitdwelling unitdwelling unit9 + hcf9.08 $9.44/unit volume charge** $9.44/unit volume charge** $9.44/unit volume chargeWater Rates (Note 1)Sewer Rates (Monthly)Schedule 25City of San Luis Obispo, CaliforniaWater and Sewer RatesLast Ten Fiscal Years182
2019***Residential SFR Base Fee20.61$ Base fee determined Base fee determined Base fee determined Base fee determined Base fee determined Base fee determined1-5 hcf5.90 by 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** $7.85/unit volume charge**13 +12.592020Residential SFR Base Fee21.74$ Base fee determined Base fee determined Base fee determined Base fee determined Base fee determined Base fee determined1-5 hcf6.22 by meter size**** by meter size**** by meter size**** by meter size **** by meter size **** by meter size ****6-12 hcf7.25 $7.10/unit volume charge $8.62/unit volume charge $10.57/unit volume charge $8.28/unit volume charge** $8.28/unit volume charge** $8.28/unit volume charge**13 +13.28*hcf = 100 cubic feet** Total monthly volume charge capped based on average winter water consumption.*** Beginning FY 18-19, different rate structures for SFR, Multi-Family, Commercial, and Landscape****See table below Notes:1. Rates are for services inside the City, outside the City rates are double.2. Third tier applies only to single-family residential customers. Source: City of San Luis Obispo Utilities DepartmentAs ofWaterSewerJune 30 of Each YearBase chargeBase Charge20203/4 inch or less21.74$ 19.72$ 1-inch36.2932.931.5-inch72.4365.662-inch115.89105.103-inch217.44197.184-inch362.45328.706-inch724.73657.198-inch1,159.601,051.5410-inch1,511.75Meter SizeBase fee charges for Multi-Family, Non-Residential, Irrigation183
ServiceWater Use Percent of NameType(acre-feet) TotalCity of San Luis Obispo ParksLandscape94.28 22.0%SLO Coastal UnifiedSchools59.47 13.9%Sierra Vista HospitalCare Facilities57.38 13.4%Silver City Mobile Home ParkMobile Homes50.66 11.8%ELL-CAP 97 - Laguna Lake Mobile Homes50.16 11.7%Creekside CommunityMobile Homes30.03 7.0%CAP VIII - Mustang Village LLCApartments28.88 6.7%Irish Hills Hamlet Apartments19.97 4.7%Embassy SuitesHotel19.78 4.6%Dignity Health #366Care Facilities18.76 4.4%Total429.37 100.00%Source: City of San Luis Obispo - Utilities DepartmentFiscal Year Ended June 30, 2020Water System - Ten Largest Water UsersCity of San Luis Obispo, CaliforniaSchedule 26184