HomeMy WebLinkAboutItem 7b. Acceptance of the Annual Comprehensive Financial Report (ACFR) for FY 2021-22 Item 7b
Department: Finance
Cost Center: 2005
For Agenda of: 1/17/2023
Placement: Business
Estimated Time: 60 minutes
FROM: Emily Jackson, Finance Director
Prepared By: Debbie Malicoat, Accounting Manager/Controller
SUBJECT: ACCEPTANCE OF THE ANNUAL COMPREHENSIVE FINANCIAL
REPORT FOR 2021-22
RECOMMENDATION
Review and accept the Annual Comprehensive Financial Report for Fiscal Year 2021-22.
POLICY CONTEXT
The City’s Charter under Section 810 requires the employment of an independent certified
public account to examine the City’s financials.
REPORT IN BRIEF
The purpose of this item is to present the Annual Comprehensive Financial Report
(ACFR) for the accounting period from July 1, 2021 -June 30, 2022 consistent with City
Charter Section 810 1. The ACFR fairly and accurately presents the City’s financial
position and compliance with applicable standards. The independent auditor will present
the report to the City Council and concluded that management has generally managed
the City’s finances in a positive way, and as the year unfolded, the City’s major revenue
sources continued to recover and grow, providing a much-improved fiscal outlook and the
City’s ability to deliver on goals and objectives.
1 Section 810. Independent Audits.
The Council shall employ, at the beginning of each fiscal year, an independent certified public accountant who, at such
time or times as may be specified by the Council, at least annually, shall examine the books, records, inventories, and
reports of all officials, employees, departments, and agencies who receive, handle, or disburse public funds. As soon
as practicable after the end of the fiscal year, a final audit and report shall be submitted by such accountant to the
Council, one copy thereof to be distributed to each member, one each to the City Clerk, the City Treasurer, the City
Manager, and City Attorney respectively, and three (3) additional copies to be placed on file in the office of the City
Clerk where they shall be available for inspection by the general public for the period required by the laws of the State
of California. Restricted and special assessment district funds shall be segregated in the audit report.
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DISCUSSION
The accompanying Annual Comprehensive Financial Report (ACFR) has been prepared as
required by the City’s Charter and applicable State laws regarding financial reporting for
municipalities. The ACFR provides a final and audited representation of the City’s financial
condition across all funds for the fiscal year that ended June 30, 2021. The ACFR was
published on the City’s website on December 21, 2022, and copies were provided to the
City Council the same day.
In accordance with the City Charter, the City’s financial statements have been audited by
independent certified public accountants from Badawi & Associates. The objective of the
financial audit is to provide users of the financial reports with reasonable assurance from an
independent source that the financial reports are reliable and represent a fair assessment
of the City’s financial condition. The auditor issued the financial statements with an
unmodified opinion which means that they are presented fairly and in conformity with
generally accepted accounting principles (see pages 1-3 of the ACFR- Independent
Auditors’ report).
The independent auditors are also reviewing the City’s Federal Single Audit Report and
Transportation Development Act annual audit with both expected to be completed on
January 31, 2023 and presented to Council in the second meeting of February. The
deadline for submission to the Federal Government is March 31st. The Federal Single
Audit includes the auditor’s opinion on internal controls, findings and questioned costs, if
any. An auditor’s findings are written explanations and can range from errors, compliance,
adverse conditions, or simply improvements that should be made. The auditor’s findings
in this year are all continued improvements to City processes and controls. There are no
questioned costs or instances of noncompliance.
New Government Accounting Standard Board (GASB) Statements
As described more fully in Note 18 to the financial statements, the City implemented six new
GASB statements for this fiscal year. The two most impactful to the City were Statement No.
87 and Statement No. 97.
Statement No. 87 relates to leases. The objective is to recognize in the financial statement
certain assets and liabilities for leases that were previously classified as operating leases
and recognized as inflows or outflows of resources, based on the payment provisions of the
contract. Implementation of this Statement results in lease assets or liabilities, such as the
99-year ground lease with Garden Street SLO Partners to be reflected in the financial
statements, not just when the lease revenue is received, but also as a long-term asset (lease
receivable) and a corresponding recognition that the lease receivable will be paid in the long-
term future (deferred inflows of resources). Note 6 to the financial statements now provides
detailed information on leases.
Statement No. 97 amended certain accounting and reporting requirements for Internal
Revenue Code Section 457 deferred compensation plans (457 plans). Under some
circumstances, Section 457 plans meet the definition of a pension plan and have different
accounting and reporting requirements.
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The City offers 457 plans to its employees, however the plans do not meet the definition that
would require the City to report the plan as a fiduciary activity, due largely to the fact that the
City is not required to make contributions to the plan; it is offered simply as a voluntary
benefit to employees. Note 10 to the financial statements provides the required disclosure
information.
Financial Results Highlighted in the ACFR
Within the ACFR, the Transmittal Memorandum and Management’s Discussion and
Analysis (MD&A) summarize the City’s fiscal performance and provide an analysis by
management of the influencing factors. They also provide information on the City’s fiscal
policies, practices, and financial results. Key variances from projected ending balances for
2021-22 are highlighted in the Transmittal Memorandum. Both documents allow the reader
to gain insight into the City’s fiscal year experiences that lead to the audited financials and
provide context to the statements that follow.
Financial results for fiscal year 2021-22 were generally positive, however the ongoing
pandemic continued to have some impacts. As the year unfolded, the City’s major
revenue sources continued to recover and grow, providing a much -improved fiscal
outlook and the City’s ability to deliver on goals and objectives. This allowed the City
Council to significantly increase budgets at Mid-Year to address developing trends such
as labor market challenges, supply shortages, and ongoing economic recovery efforts.
Revenues and expenditures in the General Fund came in favorably compared to budget
estimates. Revenues were $4.2 million above the final budget, and expenditures, which
include an additional discretionary payment to CalPERS of $10.2 million, were $6.9
million under budget. Net other sources and uses ended above budget by $3.8 million.
The result was an ending fund balance of $40.7 million, which was $7.3 million above
budget estimates. As the chart below outlines, most of the ending balance is committed
or assigned for future spending or reserve requirements, and not available for spending
in conformance with GASB 54.
General Fund 2021-22 2021-22
Actual
Positive (Negative)
Variance
Revenues 102,188,180$ 106,399,537$ 4,211,357$
Expenditures 93,440,299 86,545,247 6,895,052
Other sources (uses)(22,632,216) (26,474,501) (3,842,285)
Beginning fund balance 47,365,717 47,365,717 -
Ending fund balance 33,481,382$ 40,745,506$ 7,264,124$
Ending fund balance
Nonspendable - 90,797 90,797
Restricted - - -
Committed - 19,556,799 19,556,799
Assigned - 12,741,186 12,741,186
Unassigned - 8,356,724 8,356,724
Total ending fund balance 33,481,382$ 40,745,506$ 7,264,124$
BUDGET - ACTUAL COMPARISON
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The unassigned balance of $8.3 million represents the amount available for additional
spending, although the Council has already taken action in October 2022 to allocate $6.9
million of this balance as shown below.
Council Action on Unassigned General Fund Balance
A. Unassigned Fund Balance at Year End $ 8,356,724
B. Approved City Manager Carryover Budget per Council Policies $ 2,857,159
C. Revenue Stabilization Reserve (Council action) $ 2,000,000
D. Remaining Year End Fund Balance (A-B-C) $ 3,499,567
E. Projected Year End Fund Balance
(required for balanced budget) $ 2,095,000
F. Variance from Forecast (for consideration at midyear) (D-E) $ 1,404,567
Capital Outlay Fund
This year, the Capital Outlay Fund meets the definition of a major fund 2 and is displayed
separately on the financial statements. This is due, in large part to the current unexpended
balance in the fund. Major capital projects are planned, but have been delayed, resulting
in the fund balance. Staff expects to be able to significantly spend down this balance with
upcoming capital investments.
Enterprise Funds
The City maintains four Enterprise Funds for its Water and Sewer utility, and the Parking
and Transit enterprises. Enterprise Funds are business-type activities within government
accounting and are reported separately.
The primary sources of revenue for the Water, Sewer, and Parking Funds are fees for
sales and services. Most revenues in these funds exceeded budget assumptions however
all funds continued to be impacted by the pandemic. While the Parking Fund is slowly
recovering and parking activities return, the Utilities funds are experiencing the effects of
supply shortages with steep increases experienced in chemical and utility charges.
However, all three funds finished the year in good financial standing.
The Transit Fund had a small reduction in net position, but saw a resurgence of ridership,
which was indicative of the post-pandemic reopening.
2 Major funds are reported separately on the financial statements to ensure that the City’s most important funds are
discretely presented. Relative size can make a given fund important to financial statement users, as can other
qualitative and quantitative factors. The General Fund is always a major fund, as are the four Enterprise Funds. Other
funds might be considered major if they meet certain criteria, such as comprising a significant portion of overall assets,
revenues, or expenses. Nonmajor funds are aggregated into a single column on the financial statements.
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The two utility funds ended the fiscal year positively, both experiencing an increase in net
position at year end. The Parking Fund experienced an increase in net position by just
over $800,000 and the Transit Fund decreased by almost $62,000 (ACFR page 45).
ACFR Organization
In accordance with generally accepted accounting principles for state and local
governments, the City’s ACFR is organized into three major sections: Introduction, Financial
Reports and Statistical Tables. The following is a brief summary of the contents of each of
these sections.
Introduction. The Transmittal Memorandum and other information of general interest are
presented in this section, including directory of officials, advisory bodies, and organization
chart.
Financial Reports. This section includes the City’s primary financial statements in five
major parts:
1. Auditors’ opinion regarding the financial statements.
2. Management’s discussion and analysis providing a narrative overview of City-wide
finances, influencing factors, and operations experiences throughout the year.
3. The basic financial statements presenting the government-wide year-end results
combining the activities of the major funds (General, Capital Outlay and all four
Enterprise Funds) and non-major funds into governmental and business-type
categories; the fund financial statements; and the notes to the financial statements.
4. Required supplementary information presenting the General Fund actual results with
both the original and final adjusted budgets.
5. Other supplemental schedules and financial statements providing financial information
for each of the City’s non-major governmental and agency funds. This includes a
financial schedule presenting Local Revenue Measure revenues and uses in 2021-22.
Statistical Tables. This section provides demographic and financial tables showing current
and historical trend information for the City and is organized into six major parts:
1. Statistical overview. General information about the San Luis Obispo community.
2. General financial trends. Ten-year summary information on net assets, governmental
revenues and expenditures and fund balances.
3. Revenue capacity. Ten-year summary information on property and sales tax trends.
4. Debt capacity. Ten-year summary information on debt service requirements.
5. Economic and demographic trends. Ten-year summaries of taxable sales, building
permits and valuations, housing, population and other demographic trends.
6. Operating information. Ten-year trend information on operating indicators by function.
The City structures its statistical section to consider debt disclosure requirements including
all relevant information so the ACFR can be used for submission to the Electronic Municipal
Market Access (EMMA) system.
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Recognition for Excellence in Financial Reporting
Beginning in fiscal year 1983-84, all of the City’s ACFRs have been awarded the certificate
of achievement for excellence in financial reporting from the Government Finance Officers
Association of the United States and Canada (GFOA). This is a prestigious national award
recognizing the City’s use of the highest standards in preparing its annual financial report.
The certificate for 2020-21 is included in the ACFR document and staff will submit the 2021-
22 ACFR for the award program.
Public Engagement
The City’s annual audit and issuance of the annual comprehensive financial report fulfills
a legal requirement and does not have a public engagement component outside the
required presentation before Council during a public session.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act does not apply to the recommended action in
this report, because the action does not constitute a “Project” under CEQA Guidelines
Sec. 15378.
FISCAL IMPACT
Budgeted: Yes Budget Year: 202-23
Funding Identified: Yes
Fiscal Analysis:
Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $75,000 $62,405 $12,595 $
State
Federal
Fees
Other:
Total $75,000 $62,405 $12,595 $
The City budgets the cost for the auditing firm annually. The cost is appropriated with the
annual budget approval. The current fiscal year contains a budget of $75,000 for the
previous fiscal year audit. Actual costs are anticipated to be $62,405 in accordance wi th
the City’s contract with the auditing firm.
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Item 7b
ALTERNATIVES
The City Council could decide to revise or not accept the Annual Comprehensive
Financial Report for fiscal year 2021-22. This is not recommended as the report has
been prepared in conformance with a variety of accounting and other reporting
requirements and represent the professional evaluation and analysis by the City’s
independent auditors. The auditors have rendered an unqualified opinion which means
that the reports are presented fairly and in conformity with generally accepted accounting
principles.
ATTACHMENTS
A - Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2022
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San Luis Obispo, California
Annual Comprehensive
Financial Report
Fiscal Year Ended
June 30, 2022
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1
“The Greys in Between”, the 3-legged sculpture at the
center of the newly completed roundabout at Orcutt
and Tank Farm, was created by artist Anila Quayyum
Agha. The permanent public art installation was
commissioned by the City of San Luis Obispo’s Public
Art Program in partnership with the San Luis Obispo
Museum of Art. In exploring the intersections of race,
class, culture, and religion, “The Greys in Between”
celebrates minority and immigrant peoples’
contributions to our society and signifies San Luis
Obispo as a community committed to being a
welcoming place for all. Drawing from symbols found in
South Asian art and architecture, Agha used her large
lit sculpture to show the relationships that exist
between light and darkness, fact and fiction,
community and solitude. “The Greys in Between”
honors diversity and inclusion, while also inviting
viewers to reflect on these different states of being.
For more information about the City’s use of
roundabouts, visit www.slocity.org/roundabouts.
Photo credit: Steven Heraldo
About the Cover
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ANNUAL COMPREHENSIVE FINANCIAL REPORT
Fiscal Year Ended June 30, 2022
ERICA A. STEWART, MAYOR
CARLYN CHRISTIANSON, VICE MAYOR
MICHELLE SHORESMAN, COUNCIL MEMBER
ANDY PEASE, COUNCIL MEMBER
JAN MARX, 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
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City of San Luis Obispo, California
Annual Comprehensive Financial Report
Fiscal Year Ended June 30, 2022
Table of Contents
Page
Introductory Section
Transmittal Memorandum ..................................................................................................................................................... vii-xxiii
Report Purpose and Organization ............................................................................................................................................... vii
Profile of the City of San Luis Obispo ........................................................................................................................................ ix
Factors Affecting Financial Condition ........................................................................................................................................ xi
Financial Condition Overview .................................................................................................................................................... xv
Relevant Financial Policies ....................................................................................................................................................... xvii
Major Initiatives ........................................................................................................................................................................ xxi
Award for Excellence in Financial Reporting .......................................................................................................................... xxii
Acknowledgments ...................................................................................................................................................................xxiii
Directory of Officials and Advisory Bodies ................................................................................................................................ xxiv
City Council ............................................................................................................................................................................. xxiv
Advisory Bodies ...................................................................................................................................................................... xxiv
Appointed Officials and Department Heads ............................................................................................................................ xxiv
Mission Statement ........................................................................................................................................................................ xxv
Organizational Values ....................................................................................................................................................... xxvi-xxvii
Organization of the City of San Luis Obispo ............................................................................................................................ xxviii
GFOA Certificate ....................................................................................................................................................................... xxix
Financial Section
Independent Auditors’ Report .......................................................................................................................................................1-4
Management’s Discussion and Analysis ..................................................................................................................................... 5-31
Overview of the Financial Statements .......................................................................................................................................... 5
The Financial Year in Review ...................................................................................................................................................... 8
Overall Year-End Financial Statements ..................................................................................................................................... 21
2022-23 Budget Highlights......................................................................................................................................................... 29
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City of San Luis Obispo, California
Annual Comprehensive Financial Report
Fiscal Year Ended June 30, 2022
Table of Contents Page 2
Page
Basic Financial Statements
Government-wide Financial Statements:
Statement of Net Position ........................................................................................................................................................ 35
Statement of Activities ....................................................................................................................................................... 36-37
Fund Financial Statements:
Balance Sheet – Governmental Funds ..................................................................................................................................... 38
Reconciliation of the Governmental Funds Balance Sheet to the
Government-wide Statement of Net Position ...................................................................................................................... 39
Statement of Revenues, Expenditures and Changes in Fund Balance –
Governmental Funds ...................................................................................................................................................... 40-41
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund
Balance to the Government-wide Statement of Activities ................................................................................................... 42
Statement of Fund Net Position Business-Type Activities – Enterprise Funds .................................................................. 43-44
Statement of Revenues, Expenses and Changes in Fund Net Position Business-Type Activities –
Enterprise Funds .................................................................................................................................................................. 45
Statement of Cash Flows Business-Type Activities – Enterprise Funds ............................................................................ 46-47
Statement of Fiduciary Net Position - Fiduciary Funds .......................................................................................................... 48
Statement of Changes in Fiduciary Net Position - Fiduciary Funds ....................................................................................... 49
Notes to the Basic Financial Statements ................................................................................................................................ 51-99
Required Supplementary Information Section
Budgetary Comparison Schedule – General Fund ............................................................................................................. 103-108
Schedule of the Changes in the Net Pension Liability and Related Ratios – Miscellaneous
Agent Multiple – Employer Plan ................................................................................................................................... 110-111
Schedule of the Pension Plan Contributions – Miscellaneous Agent Multiple – Employer Plan ...................................... 112-113
Schedule of the City’s Proportionate Share of the Net Pension Liability – Safety Cost-Sharing Plan .............................. 114-115
Schedule of the City’s Pension Contributions – Safety Cost-Sharing Plan ....................................................................... 116-117
Schedule of the Changes in the Net OPEB Liability and Related Ratios ................................................................................. 118
Schedule of Employer OPEB Contributions ............................................................................................................................. 119
Notes to Required Supplementary Information ........................................................................................................................ 120
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City of San Luis Obispo, California
Annual Comprehensive Financial Report
Fiscal Year Ended June 30, 2022
Table of Contents Page 3
Page
Other Supplementary Information and Combining and Individual Fund Statements and Schedules
Local Transaction Tax Measure Funding Schedule ........................................................................................................... 123-125
Nonmajor Governmental Funds ........................................................................................................................................ 127-130
Combing Balance Sheet – Nonmajor Governmental Funds .............................................................................................. 132-137
Combining Statement of Revenues, Expenditures and Changes in Fund Balance
- Nonmajor Governmental Funds ................................................................................................................................... 138-143
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual:
Downtown Business Improvement District Fund ................................................................................................................. 144
Transportation Development Act (TDA) Fund ..................................................................................................................... 145
Tourism Business Improvement District Fund ...................................................................................................................... 146
Gas Tax Fund ........................................................................................................................................................................ 147
Community Development Block Grant (CDBG) Fund ......................................................................................................... 148
Law Enforcement Grants Fund ............................................................................................................................................. 149
Public Art Contributions Fund .............................................................................................................................................. 150
SB1 Road Repair Fund ......................................................................................................................................................... 151
SB1186 ASP Certify ............................................................................................................................................................. 152
Debt Service Fund ................................................................................................................................................................. 153
Custodial Funds ................................................................................................................................................................. 155-159
Combining Statement of Fiduciary Net Position – Custodial Funds .............................................................................. 156-157
Combining Statement of Changes in Fiduciary Net Position – Fiduciary Funds............................................................ 158-159
Statistical Section
Statistical Section – Overview (Unaudited) .............................................................................................................................. 163
Financial Trends:
Net Position by Component – Last Ten Fiscal Years ............................................................................................................ 164
Changes in Net Position – Last Ten Fiscal Years ........................................................................................................... 165-166
Fund Balances of Governmental Funds – Last Ten Fiscal Years ................................................................................... 167-168
Revenues, Expenditures and Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years ................................................................................................................................................. 169-171
General Fund Operating Expenditure Trends by Type – Last Ten Fiscal Years ................................................................... 172
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City of San Luis Obispo, California
Annual Comprehensive Financial Report
Fiscal Year Ended June 30, 2022
Table of Contents Page 4
Page
Revenue Capacity:
Governmental Activities Tax and Franchise Revenues by Source – Last Ten Fiscal Years ................................................. 173
Assessed and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years ........................................................... 174
Property Tax Rates – Last Ten Fiscal Years .......................................................................................................................... 175
Principal Property Taxpayers – Current Year and Nine Years Ago ...................................................................................... 176
Secured Property Tax Roll Levies and Collections – Last Ten Fiscal Years ......................................................................... 177
Schedule of Taxable Sales and Permits by Category – Last Ten Calendar Years ................................................................. 178
Historical Sales and Use Tax Rates ....................................................................................................................................... 179
Schedule of Business Tax Certificates Issued ....................................................................................................................... 180
Debt Capacity:
Per Capital Outstanding Debt by Type – Last Ten Fiscal Years ........................................................................................... 181
Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt per Capita
Last Ten Fiscal Years ........................................................................................................................................................ 182
Direct and Overlapping Long-Term Debt – Fiscal Year Ended June 30, 2021 ..................................................................... 183
Computation of Legal Debt Margins – Last Ten Fiscal Years .............................................................................................. 184
Revenue Bond Coverage:
Water Fund – Last Ten Fiscal Years ..................................................................................................................................... 185
Parking Fund – Last Ten Fiscal Years .................................................................................................................................. 186
Demographic and Economic Information:
Demographic and Economic Statistics – Last Ten Fiscal Years ........................................................................................... 187
Principal Employers – Current Year and Nine Years Ago .................................................................................................... 188
Regular Authorized Positions – Last Ten Fiscal Years ......................................................................................................... 189
Operating Information:
Operating Indicators and Capital Asset Statistics by Function – Last Ten Fiscal Years ................................................ 190-193
Water System Statistical Data ............................................................................................................................................... 194
Water and Sewer Rates – Last Ten Fiscal Years ............................................................................................................ 195-196
Water System Ten Largest Users – Fiscal Year Ended June 30, 2021 .................................................................................. 197
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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, 93401‐3249, 805.781.7130,
slocity.org
Date
TO: The Honorable Mayor and Members of the City Council and Citizens of the City of San Luis
Obispo
FROM: Derek Johnson, City Manager
Brigitte Elke, Finance Director
SUBJECT: TRANSMITTAL MEMORANDUM FOR ANNUAL COMPREHENSIVE FINANCIAL
REPORT FOR FISCAL YEAR 2021-22
We are pleased to submit the City of San Luis Obispo’s 2021-22 Annual Comprehensive Financial Report
(ACFR). 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, 2022, within applicable timelines.
Though the audit is conducted by an independent certified public account firm, 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 and review 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. However, it is critically reviewed by the auditors annually and Finance staff
throughout the year to assure compliance with applicable GASB rules and best practices in government
accounting. Additionally, the City’s governing body receives reports on a quarterly basis and additional reports
in accordance with State requirements are posted online on the City’s website at www.slocity.org.
REPORT PURPOSE AND ORGANIZATION
Audited Financial Statements
The City’s financial statements were audited by Badawi and Associates, a firm of licensed certified public
accountants currently under contract with the City. 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, 2022, are free of material
misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and
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TRANSMITTAL MEMORANDUM
disclosures in the financial statements; assessing the overall accounting principles used and significant estimates1
made by management; and evaluating the overall financial statement presentation.
The independent auditor concluded that the City’s financial statements present fairly2, in all material respects,
the respective financial position of the governmental activities, the business-type activities, each major fund, and
the aggregate remaining fund information of the City as of June 30, 2022. They also fairly represent the respective
changes in financial position, and, where applicable, cash flows 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 beginning on page 1.
“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 controls3 and
compliance with legal requirements, with special emphasis on the administration of Federal awards (such as
Transit funding). This audit has been completed and will be filed and distributed to appropriate agencies to meet
Federal requirements and deadlines.
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 beginning on page 5.
Organization of the Annual Comprehensive Financial Report
The 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 six parts: 1) the independent auditors’ report; 2)
Management’s Discussion and Analysis; 3) the basic financial statements including the government-wide
financial statements; 4) fund financial statements; 5) notes to the financial statements; and 6) required
supplementary information; and additional statements and schedules including the local transaction tax
information, 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 trends, debt
capacity, demographics, and economic and operating information. This section also contains important
information for the benefit of the required bond disclosures and rating agencies.
1 Significant estimates included in the financial statements are made in conformity with GAAP.
2 The Term “present fairly” means that the financial statements give a reasonable view of the financial results, financial position, and cash-flow of the reporting entity.
3 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
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 two component units, the San Luis Obispo Capital
Improvement Board and the San Luis Obispo Public Financing Authority, both of which provide financing for
the construction and acquisition of City facilities. The Board/Authority is comprised solely of members of the
City Council. Activities of the Board/Authority are accounted for in the applicable City governmental or
enterprise funds.
PROFILE OF THE CITY OF SAN LUIS OBISPO
With a population of 47,653, 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 San Luis Obispo County. San Luis Obispo
is the county seat and a number of Federal and State regional offices and facilities are located within the City
and California Polytechnic State University and Cuesta College are in its sphere of influence.
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
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The City is also a member of a Joint Powers Authority called Central Coast Community Energy (3CE) which
sources clean and renewable electricity at competitive prices for the community and is delivered through the grid
by PG&E. CCCE follows a Community Choice Aggregator or “CCA” model, a community-focused, “not-for-
profit” model that allows for greater commitment to clean and renewable energy while supporting community
reinvestment for affordable and fair rates and equitable access to clean-energy resources.
It is locally controlled and governed by board members who represent the communities served by 3CE.
Becoming a member of 3CE was an integral part of the City’s Major City Goal for Climate Action. For more
information visit: www.3cenergy.org
Budgetary Policy and Control
Though the City adopts a two-year Financial Plan, annual budgets are legally appropriated by the City Council
by resolution and are prepared for each fund in accordance with its basis of accounting. As provided under the
City Charter, the City Manager is responsible for preparing the budget and for its implementation after adoption.
Financial reports are presented to the City Council and posted online on a quarterly basis. At mid-year, staff
prepares a more in-depth status report for the City Council for the first six months of the fiscal year in addition
to any fund balance information and long-term forecast based on the audited annual comprehensive financial
report.
Since the City uses a two-year Financial Plan, 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 second 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 but revert to fund
balance after three years of non-activity.
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 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 purchase order obligations. Open purchase orders
at year-end are reported as assigned fund balance. The ERP system also maintains the City’s list of fixed assets.
It is the City's policy to maintain an operating reserve in the General Fund of at least 20% of operating
expenditures which is reflected in the committed fund balance. This policy objective has been achieved for fiscal
year 2021-22. 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 which have been met for 2021-22. With the 2021-22 fiscal year,
the City also adopted a capital reserve in its Capital Outlay Fund of 20% of budgeted capital investments from
the Local Revenue Measure for the fiscal year. This reserve will be adjusted with each budget adoption, funded
from the local transactions tax, and is reflected in the Capital Outlay Fund.
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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 operated in 2021-22.
Ongoing Global Pandemic
Though a gradual re-opening began in Spring of 2021, the City Council adopted its two-year Financial Plan for
2021-23 and the 2021-22 budget considering the effects of the worldwide pandemic brought on by COVID-19.
Given the ongoing uncertainty regarding economic recovery, workforce reintegration and beginning issues with
supply chain shortfalls, the budget approach, while cautiously optimistic based on better than anticipated results
in 2020-21, remained relatively conservative in its forecasting.
However, the investments into the adopted major city goals remained strong and concentrated on assisting the
community with the recovery from the depth of the pandemic as well as addressing emerging trends and needs.
The following goals were adopted, and specific work programs implemented to deliver on the community’s
ambitions:
Economic Recovery, Resiliency & Fiscal Sustainabiltiy
Diversity, Equity, Inclusion
Housing and Homelessness
Climate Action, Open Space, and Sustainable Transportation
As the year unfolded, the City’s major revenue sources continued to recover and grow, providing a much-
improved fiscal outlook and the City’s ability to deliver on goals and objectives, as well as certain deliverables
set forth in the adopted Fiscal Health Response Plan that stipulated significant additional payments toward the
City’s unfunded pension liability. Several other factors played into the City’s financial condition throughout the
year and at 2021-22 year-end:
1.Strong tax revenue including increased levels of Sales and Use Tax, Property Tax as well as record
high Transient Occupancy Tax. The 2020 voter approved local transaction tax went into effect on April
1, 2021, and FY 2021-22 was the first full fiscal year with the increased tax rate. This local revenue
measure has now become the City’s largest single tax revenue. The revenue picture forming during the
first six months of the fiscal year allowed for significant adjustments at mid-year to address community
needs and emerging issues in a timely fashion and as they were developing.
2.State & Local Fiscal Recovery Funds under the American Rescue Plan Act (ARPA). The
Congressional American Rescue Plan Act approved $350 billion for state, local, territorial, and Tribal
governments in form of the Coronavirus State and Local Fiscal Recovery Funds (SLFRF). As an
entitlement city, San Luis Obispo received $13.5 million in funding directly from the U.S. Treasury.
The funding was received on July 6, 2021 and June 30, 2022, respectively. The City will use $10 million
of the funding to replenish the revenue loss experienced in 2020 and pay for general government
services. The remaining funding will be used in accordance with the U.S. Treasury Final Rule and was
approved by the City Council via the 2022-23 Budget Supplement resolution in June 2022. None of the
funding was used in FY 2021-22 and remains available for spending through 2026 per Council action
which is as follows:
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3.Emerging Needs & Investment in Homelessness response and Diversity, Equity, and Inclusion
The City’s two-year Financial Plan invested in response to homelessness and housing and well as
Diversity, Equity, and Inclusion through Major City Goals and extensive work programs to fulfill the
objectives adopted by the City Council. Due to the City’s fiscal outlook at mid-year, further investments
were possible, and the adopted budget amended.
The following are examples of the investments with the full report available at: Mid-Year 2021-22
Downtown Safety Enhancements Capital $375,000
Crisis Communication Planning Operating $50,000
Mission Plaza Landscape & Lighting Capital $120,000
Convert Mobile Crisis Unit to Permanent4 Operating $-
Railroad Square Safe Parking Operating $64,633
Public Safety Customer Engagement Operating $17,000
Additional Pressure Washing Operating $25,000
Central Resident Inquiry Platform Operating $40,000
Additional Fire Inspection Personnel Operating $33,410
The total budget augmentation amounted to $8.3 million including a $3.9 million grant to the SLO Rep
Theater for the new theater location on Monterey and Palm Street. Of the additions, $6.7 million were
one-time investments and do not have an ongoing budgetary impact.
Throughout the 2021-22 Fiscal Year, the City organization was asked to remain flexible and adjust to the
changing conditions that the pandemic and continued directives, as well as the re-opening of business and travel
activities presented. The local colleges returned to in-person sessions; all indicating a “normalization” of
economic and service activities.
Some of the programs implemented the previous year continued such as sidewalk dining, the tenant improvement
program, shop local promotions, augmented childcare options, and virtual holiday activities.
4 The Mobile Crisis Unit was fully budgeted in FY2021-22 and this action integrated it into the budget ongoingly.
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For additional information regarding the City’s ongoing investments in the City’s economic vitality please visit:
https://www.slocity.org/business/economic-development.
Economic Indicators for San Luis Obispo in General
Local Economic Environment
Historically, and prior to the pandemic-driven conditions, 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. Due to the local economic environment and a large government presence and diversity,
employment in the San Luis Obispo County region has historically been relatively stable. 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
to prolong the use of the Diablo Canyon Nuclear Power Plan presents an opportunity to continue jobs for trained
professionals in the region.
Of course, the historically solid base of employment in the County was not immune from the impacts of the
pandemic; especially due to the full closure of Cal Poly and the change in the hospitality industry that relies on
the student population. The California Employment Development Department (EDD) reported the
unemployment rate in San Luis Obispo County at 11.5% in June 2020, down from a high of 14.8% in April 2020
and the height of the “stay at home” orders. However, after July 2020, the unemployment rate started to trend
downward and with the gradual reopening, renewed travel activity, and the return of the colleges to on-campus
teaching, the unemployment rate went from 5.5% in July 2021 to 2.6% at the end of the fiscal year according to
the U.S. Bureau of Labor Statistics.
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
Sales & Use Tax, Property Tax, and Transient Occupancy Tax (TOT). The 2020 voter approved local transaction
tax of one-and-a-half cent (Local Revenue Measure) went into effect in April 2021 to provide for an array of
City services including infrastructure. In just over one year, this Local Revenue Measure has become the largest
single tax revenue to the City, growing from $12 million to over $29 million.
Of additional note in this fiscal year is the return of travel activity, especially for a drive-to market such as the
City of San Luis Obispo. As people began enjoying time away from home, the City’s tourism industry bounced
back and reached levels of activity not seen before. The related TOT ended the year well above the anticipated
budget at its highest level to date at $10.6 million.
All in all, the City’s Sales Tax revenue, strengthened by the new Local Revenue Measure, ended the year well
above the adopted budget. Property Tax remained strong and experienced a further increase over previous fiscal
years. The City’s fee revenues mostly provided the budgeted cost recovery, but development activities, though
still strong, lagged and had to be adjusted downward.
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Long-Term Financial Planning.
The City engages in a number of activities focused on long-term financial planning to gauge and adjust to current
economic conditions and trends. Different scenarios are developed considering a multitude of information and
resources. This effort was even more elaborate in FY 2021-22 due to the uncertainties surrounding the pandemic
and gradual re-opening to pre-pandemic activity and assisted the City’s response to the unprecedented economic
environment.
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 sustainable
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 2022-27 forecast was completed in April 2021, before the City Council
considered the 2021-23 Financial Plan. The City continued its cautiously optimistic approach given the multitude
of remaining uncertainties, but due to a much better fiscal standing was able to adjust the budget at mid-year
with a multitude of efforts to address community needs and further investments to assist with economic vitality
after the depth of the pandemic. For more information on the Council action at mid-year 2021-22, please visit:
2021-22 Mid-Year Report.
CalPERS and the City’s Unfunded Liability
With the 2018-19 three-year Fiscal Health Response plan, the City had prepared a path to pay-down the City’s
pension liability over a 20-year term, shortening the duration of prescribed payments and saving around $19
million in payments due. It did so by aligning its expenditures with the revenue forecast that would allow for
additional annual payments. A first payment of $4.2 million was made in April 2019 and a second payment of
equal amount was scheduled for April 2020. Due to the state of the health emergency, the City Council decided
to retain any unassigned fund balance until the fiscal situation could be better assessed. It did so again in February
2021 when the next payment of $3 million was scheduled and uncertainties with pandemic driven restrictions
continued. Given the City’s commitment to the additional payments and the year-end results, the previously
earmarked amounts for the past three fiscal years were paid through unassigned fund balance, making good on
$10.2 million in additional funding toward the City’s pension liability. An additional $2.2 million was paid
through the City’s four enterprise funds as well as the Whale Rock Reservoir custodial fund and Tourism
Business Improvement District Fund.
In July 2021, CalPERS announced having ended the 2020-21 Fiscal Year with a 21.3% investment gain. This
result triggered the previously adopted Risk Mitigation policy, lowering the future discount rate to 6.8%. The
CalPERS board ratified the discount rate in November 2021, and it will become effective for the City with the
2023-24 fiscal year. Given this new reality, further influenced by a 6.1% investment loss at June 30, 2022, staff
is reviewing its long-term strategy to gauge the appropriate level of additional payments moving forward and
plans on including the strategy as a fiscal policy going forward.
FINANCIAL CONDITION OVERVIEW
Despite the background of economic uncertainty, changes in doing business, as well as new challenges stemming
from the pandemic, the City ended the fiscal year 2021-22 in a better fiscal position than originally anticipated.
All major revenue sources recovered or exceeded pre-pandemic levels and service fees recovered with the re-
opening of venues and an immediate bounce back once restrictions were lifted. Though the Fiscal Health
Contingency Plan was deactivated with the new Financial Plan, it assisted greatly in counter-acting the situation
during the depth of the pandemic and allowed the City to invest in the community and situate it perfectly for an
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immediate recovery. The ultimate fiscal result was greatly supported by the additional local transaction tax that
was in effect for the first full year in FY 2021-22, generating an additional $19 million in General Fund revenue.
At June 30, 2022, the total General Fund balance was $40.7 million; a decrease of $6 million over 2020-21
despite the additional $10.2 million payment to CalPERS. This decrease was deliberate and funded a variety of
one time costs such as pilot programs to address homelessness.
Additionally, the City continued investing heavily in the economic vitality of the community and made
substantial investment at mid-year to address emerging needs as well as new challenges such as labor and supply
chain shortages. The table below shows the levels of fund balance in accordance with GASB 54 and the City’s
policy pertaining to fund balance assignments. Fund Balance & Reserve Policy
General Fund – Fund Balance per June 30, 2022
Non-spendable $90,797
Committed
Contingency Fund – 20% policy level $12,014,000
General government programs $5,696,864
Risk Management $1,845,935
Assigned to:
Encumbrances
SLO Rep Theater grant
$4,270,529
$3,940,000
115 Trust Fund $2,000,000
CalPERS Payment $2,000,000
Development Services $530,657
Unassigned $8,356,724
Total Fund Balance $40,745,506
Continue to Focus on Sustainability and Long-term Fiscal Health
With its Major City Goal for Economic Recovery, Resiliency & Fiscal Sustainability, the City continues its
commitment to long-term fiscal health. The goal program aims to, in collaboration with local partners, continue
to assist with economic recovery for all from the pandemic and sustain a thriving local economy by supporting
local businesses, arts and culture, downtown vitality. It commits to practicing fiscal responsibility, paying down
unfunded pension liabilities, and investing in critical infrastructure.
Revenue Base Growth. Since the Great Recession, the US had experienced an unprecedented long-term
expansion that continued into the latter part of 2019-20. Sales tax (including the local Transaction tax), Property
Tax and Transient Occupancy Tax (TOT) had accounted for 69% of all funding sources in the General Fund. All
of these revenues showed 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 that placed the national and local economy on temporary halt. The forecast was uncertain as the
pandemic ultimately influenced the entire 2020-21 fiscal year.
However, quick action by Congress and substantial aid packages ranging from additional unemployment
benefits, one-time payments to households, and protection from rent and utility payments, lead to an
accumulation of wealth that resulted in continued purchasing power and consumption. The beginning trends of
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the migration to online shopping were accelerated and sales tax revenue did not see the originally anticipated
decline. Property tax remained strong as the real estate market continued to deliver. Tourism did clearly take a
hit but continued to see activity and bounced back due to pent-up demand in the last quarter into the summer
months. Development related fee revenue continued to see significant growth as development activity remained
at unprecedented levels in the City, with two Community Facilities Districts beginning construction and housing
continuing as a major City goal.
These trends largely continued to accelerate during FY 2021-22 with travel activities returning strongly, retail
shopping re-discovered, and housing markets retaining momentum. Only development began to tighten due to
inflationary pressures and resulting monetary policy from the Federal Reserve to counter-act inflation. Labor
shortages as well as supply chain challenges began to take a toll in the third quarter of the Fiscal Year and will
be influencing the second year of the Financial Plan greatly.
Containment of Operating Costs. The City’s efforts to control costs are ongoing while also addressing the need
to remain an attractive employer and provide the services the community expects. The City has an extensive
policy framework that allows immediate and nimble action to address adverse changes in economic and fiscal
condition and will continue to activate as needed. The City’s implementation of a 2nd and 3rd tier retirement
benefit program continues to change the City’s annual retirement contributions as 72% of the workforce is now
enrolled in those retirement plan tiers. This is an increase of 15% over last year. These actions have been
instrumental in helping the City contain current costs and long-term liabilities related to retirement benefit
programs; furthermore, two of the City’s bargaining units as well as the Management & Confidential group pay
additional contributions toward the City’s pension obligation.
Infrastructure and Facilities Maintenance. As a growing city, San Luis Obispo has seen the need for capital
expenditures grow steadily over the past decade. The need to maintain, repair or replace its current infrastructure
is met with the need to build amenities for the community at large and the City’s Local Revenue Measure plays
a vital part. The City plans on using 75 to 85% of the revenue for infrastructure improvements and enhancements
and the Public Works department is gearing up to deliver the projects. For a list of projects delivered in FY 2021-
22 see page 5 in the Management Discussion and Analysis.
The funding is allocated to projects in coordination of 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 San Luis Obispo now and into the future.
Ongoing Commitment to Local Transaction Tax Measure Priorities (Local Revenue Measure)
The City remains committed to the priorities for the use of the local transaction 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 local
transaction tax measure funds were used during fiscal year 2021-22. The voter approved increase took effect on
April 1, 2021, and the table below reflects the first complete year with the new level of Local Revenue Measure
in place and revenue amounting to $29 million.
Total uses of the funding during 2020-21 amounted to $32.5 million, with an additional $2 million encumbered
through purchase orders or contracts; the remaining balances of these resources are designated for future year
expenditures. A more detailed schedule of local transaction tax measure sources and uses is provided in the
Financial Section of this report beginning on page 123.
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Local Sales Tax Measure Revenue & Uses Summary
2021-22
Revenues:
Sales and use tax - Measure G add-on tax $ 29,172,258
Use of money and property ($283,748)
Total Revenues $28,888,510
Uses:
Operating Programs ($6,912,660)
Capital Projects ($25,578,957)
Total Uses ($32,491,617)
Change in Fund Balance ($3,603,107)
Prior Sales Tax Measure Balance $9,299,971
Encumbered or designated for carryover for future year expenditures ($1,958,912)
Net available for future year appropriations (note 1) $ 3,737,952
Note 1: Council took action on October 4, 2022 (R-11367) to allocate $2.1 million of the available fund balance
*Detail of transfers and expenditures is included with other supplementary information in the financial statements, which
can be found beginning on page 121.
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 matters 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 2021-22.
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. The City always evaluates various options when considering the issuance of debt in order to benefit
from the best long-term terms and conditions.
Information on the City’s outstanding debt issues and other long-term liabilities is provided in Note 7 in the notes
to the financial statements.
In February 2022, Fitch Ratings, a nationally recognized statistical rating organization, reviewed the City’s
financials, its fiscal outlook, and the current rating. On February 22, 2022, Fitch Ratings subsequently concluded
that there should be no change to the existing rating at AA+ with a stable rating outlook. Fitch Ratings’ long
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term credit ratings are assigned on an alphabetic scale from AAA to D. The City’s AA+ bond rating means that
the City’s investment grade is “quality”. Specifically, current lease revenue bonds (LRBs) issued by the San Luis
Obispo Public Financing Authority remain at an 'AA’ rating and the LRBs issued by the City of San Luis Obispo
Capital Improvement Board at an 'AA' rating. At this time, the City of San Luis Obispo has no general obligation
debt.
Fitch Ratings’ analysts had previously commended the City’s ability to respond to the economic impacts of the
COVID-19 pandemic, “budget management at times of recovery is very strong, leaving the city well prepared to
manage the current period of economic stress. The city engages in thorough and conservative long-term financial
planning with a focus on maintaining structural budget balance, maintaining the city's capital assets with minimal
debt reliance, and proactive efforts to pay down its unfunded retirement liabilities above actuarially determined
levels.”
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 and 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. All reserve policies continue to be met.
To further strengthen the Water and Sewer fund against revenue fluctuations, both funds carry a Rate
Stabilization reserve of 10% of sales revenue for Water and 5% of sales revenue for Sewer.
Long-Term Liabilities and Maintenance of Infrastructure
With the 2017-19 Financial Plan, the City began to incorporate the use of one-time funds above policy reserve
to unfunded pension liabilities and infrastructure 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 2019-20 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 tax measure to supplant the 2006 enacted half-cent measure. The measure was
successfully approved by 58% of the voters and the new local transaction tax went into effect on April 1, 2021.
The immediate increase in this revenue stream is part of the favorable financial condition of the City at fiscal
year-end and greatly assisted in additional economic recovery efforts at the tail end of the COVID19 restrictions
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and continued investment in the City’s extensive infrastructure. This Local Revenue Measure has now become
the City’s largest tax revenue and the City remains committed to the majority of the funds being used to maintain,
replace, and renew its growing infrastructure needs.
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 and plans to counteract any adverse investment results with additional
payments to CalPERS.
The City has also established a Section 115 Trust fund with the California Employer’s Pension Prefunding Trust
(CEPPT), and based on the audited financials, plans on making its first contribution of $2.4 million in FY 2022-
23.
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All employees currently pay the full employee contribution and the additional contributions agreed to are listed
in the chart below:
Police (Sworn) Employee Contribution Levels to PERS
Retirement
(Percent of Salary)
Safety PERS Tier Jul-20
Tier 1 (3% @ 50) 15%
Tier 2 (2% @ 50) 15%
Tier 3 (2.7% @ 57) 16.75%
Police (Non-Sworn) Employee Contribution Levels to PERS
Retirement
(Percent of Salary)
Miscellaneous PERS Tier Jul-20
Tier 1 (2.7% @ 55) 14%
Tier 2 (2% @ 60) 13%
Tier 3 (2% @ 62) 10%
Fire (Sworn) Employee Contribution Levels to PERS
Retirement
Safety PERS Tier Jul-20
Tier 1 (3% @ 50) 12%
Tier 2 (2% @ 50) 12%
Tier 3 (2.7% @ 57) 16.75%
Employee Contribution Levels (includes appointed officials,
department heads, unrepresented management,
unrepresented confidential and non-sworn fire employees) to
PERS Retirement
Miscellaneous PERS Tier Jul-20
Tier 1 (2.7% @ 55) 11%
Tier 2 (2% @ 60) 10%
Tier 3 (2% @ 62) 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
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TRANSMITTAL MEMORANDUM
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. 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 8 in the
notes to the financial statements.
MAJOR INITIATIVES
The City continued its efforts on a number of significant initiatives in 2021-22 as adopted with the 2021-23
Financial Plan. As such, the Major City Goals drive the City’s strategic direction while maintaining the
established core services the community expects and is accustomed to. For additional information on the City’s
strategic initiatives go to 2021-23 Financial Plan
Economic Recovery, Resiliency & Fiscal Sustainability
In collaboration with local partners, continue to support economic recovery for all from the
COVID pandemic and support a thriving local economy by supporting local businesses, arts and
culture, downtown vitality, practicing fiscal responsibility, paying down unfunded pension
liabilities, and investing in critical infrastructure.
Housing and Homelessness
To expand housing options for all, continue to facilitate the production of housing, including the
necessary supporting infrastructure, with an emphasis on affordable and workforce housing.
Collaborate with local non-profit partners and the county, the state, and federal governments to
discover and implement comprehensive and effective strategies to reduce chronic homelessness.
Diversity, Equity, Inclusion (DEI)
In response to our commitment to making San Luis Obispo a more welcoming and inclusive city
for all, continue to develop programs and policies to support diversity, equity, and inclusion
initiatives and advance the recommendations of the DEI Task Force.
Climate Action, Open Space, and Sustainable Transportation
To proactively address the climate crisis, continue to update and implement the Climate Action
Plan for carbon neutrality, including preservation and enhancement of open space and the urban
forest, alternative and sustainable transportation, and planning and implementation for
resilience.
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TRANSMITTAL MEMORANDUM
GASB Pronouncements for FY 2021-22
GASB Statement No. 87 - Leases
This pronouncement became effective for fiscal years beginning after June 15, 2021 and was included in the
City’s financial statements for the first time with FY 2021-22. As such, GASB 87 requires recognition of certain
lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows
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.
Under this Statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset,
and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the
relevance and consistency of information about the governments’ leasing activities. More detail is provided under
Note 6 in the Financial Statements that follow.
GASB Statement 97 – Certain Component Unit Criteria, and Accounting & Financial Reporting for
Internal Revenue Code Section 457 Deferred Compensation Plans
The primary objectives of this Statement are to (1) increase consistency and comparability related to the reporting
of fiduciary component units in circumstances in which a potential component unit does not have a governing
board and the primary government performs the duties that a governing board typically would perform; (2)
mitigate costs associated with the reporting of certain defined contribution pension plans, defined contribution
other postemployment benefit (OPEB) plans, and employee benefit plans other than pension plans or OPEB
plans (other employee benefit plans) as fiduciary component units in fiduciary fund financial statements; and (3)
enhance the relevance, consistency, and comparability of the accounting and financial reporting for Internal
Revenue Code (IRC) Section 457 deferred compensation plans (Section 457 plans) that meet the definition of a
pension plan and for benefits provided through those plans.
As disclosed in Note 10, the City’s 457 plans do not meet the definition of a pension plan as they are voluntary
contribution plans available to employees who choose to contribute and have no required City contribution.
AWARD FOR EXCELLENCE IN FINANCIAL REPORTING
The Government Finance Officers Association of the United States and Canada (GFOA) has awarded a
Certificate of Achievement for Excellence in Financial Reporting to the City for its ACFR for the fiscal year
ended June 30, 2021.
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 annual comprehensive 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. Staff believe that the City’s current ACFR continues to conform to the
Certificate of Achievement program requirements and will submit it to GFOA to determine its eligibility for
another certificate.
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TRANSMITTAL MEMORANDUM
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 Department 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
Erica A. Stewart Mayor
Carlyn Christianson Vice Mayor
Andy Pease Council Member
Jan Marx Council Member
Michelle Shoresman 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
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
Nickole Domini Director of Human Resources
Richard Scott Police Chief
Aaron Floyd Director of Utilities
Greg Avakian Director of Parks & Recreation
Matt Horn Director of Public Works
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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.
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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.
xxvii
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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, BldgsHousingCommunityDevelopmentAdministrationDeptReporting to the Assistant City ManagerUtilitiesHumanResourcesParks &RecreationPublicWorksCommunity ServicesRESIDENTSADVISORYBODIESCITY MANAGERMAYOR &CITY COUNCILDeptAppointed by the City Council Appointed by the City ManagerCITY ATTORNEYPolice FireFinancexxviii Page 868 of 1069
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of San Luis Obispo
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2021
Executive Director/CEO
xxix
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xxx Page 870 of 1069
FINANCIAL SECTION
xxxi
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xxxii Page 872 of 1069
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 Audit of the Financial Statements
Opinions
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, 2022, and the related notes to the
financial statements, which collectively comprise the City’s basic financial statements as listed in the
table of contents.
In our opinion, the accompanying financial statements present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major
fund, and the aggregate remaining fund information of the City, as of June 30, 2022, and the respective
changes in financial position and, where applicable, cash flows thereof for the year then ended in
accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States
of America (GAAS) and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Statements section of our report. We are required to be independent of the City and to meet our other
ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinions.
Responsibilities of Management for the Financial Statements
The City’s management is responsible for the preparation and fair presentation of the financial
statements in accordance with accounting principles generally accepted in the United States of
America, and for the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error.
Page 873 of 1069
To the Honorable Mayor and Members of the City Council
of the City of San Luis Obispo
San Luis Obispo, California
Page 2
In preparing the financial statements, management is required to evaluate whether there are conditions
or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue
as a going concern for twelve months beyond the financial statement date, including any currently
known information that may raise substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance
and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a
material misstatement when it exists. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control. Misstatements are considered
material if there is a substantial likelihood that, individually or in the aggregate, they would influence
the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, and design and perform audit procedures responsive to those risks. Such
procedures include examining, on a test basis, evidence regarding the amounts and disclosures
in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is
expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate,
that raise substantial doubt about the City’s ability to continue as a going concern for a
reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit, significant audit findings, and certain internal control–
related matters that we identified during the audit.
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 5-31 and 103-120 be presented to supplement the basic financial statements.
2
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To the Honorable Mayor and Members of the City Council
of the City of San Luis Obispo
San Luis Obispo, California
Page 3
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.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City’s basic financial statements. The local sales tax measure funding schedule,
combining and individual nonmajor fund financial statements and budgetary comparison schedules,
are presented for purposes of additional analysis and are not a required part of the basic financial
statements.
The local sales tax measure funding schedule, the combining and individual nonmajor fund financial
statements and budgetary comparison schedules on pages 123-159 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 local 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.
Other Information
Management is responsible for the other information included in the annual report. The other
information comprises the introductory and statistical sections but does not include the financial
statements and our auditor's report thereon. Our opinions on the financial statements do not cover the
other information, and we do not express an opinion or any form of assurance thereon. In connection
with our audit of the financial statements, our responsibility is to read the other information and
consider whether a material inconsistency exists between the other information and the financial
statements, or the other information otherwise appears to be materially misstated. If, based on the work
performed, we conclude that an uncorrected material misstatement of the other information exists, we
are required to describe it in our report.
3
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To the Honorable Mayor and Members of the City Council
of the City of San Luis Obispo
San Luis Obispo, California
Page 4
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 20,
2021, 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, CPAs
Berkeley, California
December 20, 2022
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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 2021-22 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 and the San Luis Obispo Public Financing Authority are reported
as blended component units in these statements. Both provide financing for the construction and acquisition of City
facilities and consist of members of the City Council. Activities of both units are accounted for in the applicable City
governmental funds. Separate financial statements are not prepared for the San Luis Obispo Capital Improvement
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Management’s Discussion and Analysis
Board or San Luis Obispo Public Financing Authority. The City has no 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 2021-22 pension liabilities is as of the fiscal year ended
June 30, 2021. 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 2021-22 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 non-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 the General Fund. 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 local transaction tax
measure (Measure G and G-20) 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. This information has been adjusted over time to also serve as required bond disclosure
information.
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Management’s Discussion and Analysis
The Financial Year in Review
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, 2022. It should be read in conjunction with the accompanying
transmittal memorandum and the basic financial statements.
The 2021-22 City budget, representing the first of the two-year adopted
Financial Plan, was prepared just when the gradual re-opening of the
economy began to take shape. In many ways, FY 2021-22 therefore marked
a transition year for the City organization. It restored the work postponed by
the pandemic and allowed the City to reinvest in its core services and
important Major City Goal efforts and strategic initiatives. The next several
years will concentrate on transforming the City’s role in finding a balance
between the delivery of service and programs and capital infrastructure to
serve a growing community and remaining an attractive employer in a
rapidly changing and dynamic labor market; all trends that have become a
part of the recovery from the pandemic and its influence on worldwide all the way to City economics.
Year-End Expenditures – General Fund
Overall, the General Fund finished the year in a positive position and experienced about 8% in net expenditure budget
savings. The savings can be associated mainly with staffing vacancies as the overall labor market experienced the
great “resignation/reshuffle”. In addition to the increased turnover due to labor market trends, the City also approved
over 60 new positions with the 2021-23 Financial Plan to meet growing needs of the community and challenges related
to Major City Goals. While most of these new positions were approved to hire on July 1, 2021 many were not hired
until much later in the year due to the time required for recruitment. In some cases, the salary savings were re-purposed
to hire temporary or consultant staffing to assist with the workload in the interim. FY 2021-22 also included a very
ambitious Major City Goal work plan, and many efforts were not fully achieved by year-end due to the staffing
vacancies and emerging priorities that emanated from factors outside the City’s control.
While many factors account for annual budget fluctuations, the graph below provides a high-level illustration of the
year-over-year growth in the General Fund Operating Expenditures. Prior to FY 2021-22, average operating budget
growth hovered around 2.9% per year which was about 2.3% lower than the average annual CPI (Los Angeles
Riverside) for the same period (5.2%). Growth spiked in FY 2021-22 due to a number of factors discussed below, thus
increasing the six-year average to 4.8%.
1. The passage of Measure G-20 increased the local transaction tax from half to one-and-a-half cent. The local
sales tax measure was approved to specifically offset increasing costs and the infrastructure needs of a
growing city. While most of this new funding was allocated to the Capital Improvement Plan (CIP), there are
also needs on the operating side to deliver the CIP and maintain the City’s growing infrastructure in addition
to delivering a multitude of services and programs throughout the community.
2. A “catch-up” on costs of services. Over the 12 months ended June 2022, the Consumer Price Index for All
Urban Consumers increased 9.1%. The 9.1% increase index was the largest 12-month increase since the 12-
month period ending November 1981. FY 2021-22 includes some of these increases, but the base budget will
increase even more significantly with the 2022-23 Budget.
Economic
Growth
Tax RevenueCity
Expenditures
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Mid-Year Adjustments
Given the 2020-21 audited financial results and the better-than-anticipated revenue picture at mid-year, the City was
able to immediately address emerging needs and make further investments in capital infrastructure and assets. The
following adjustments need to be considered when looking at the Financial Statements and the required supplementary
information and budgetary comparison schedules (page 103 – 108).
GENERAL FUND One-time Budget Appropriations 2021-22
SLO Rep Challenge Grant Operating 3,950,000
Vehicles for New Maintenance Positions Capital 210,000
Bob Jones Bike Trail Vegetation Management Operating 25,000
Downtown Safety Enhancements Capital 375,000
Crisis Communications Planning Operating 50,000
Transfer of Mitigation Fee Payment Operating 10,000
Litigation Support Operating 120,000
Council Hearing Room - Auto Tracking Camera Operating 30,000
Covid Tests Operating 30,000
Golf Course Pro Shop Flood Damage Repairs Capital 275,000
Reimbursement Agreement for 600 Tank Farm Capital 1,545,000
Mission Plaza Landscape & Lightning Improvements Capital 120,000
Total $ 6,740,000
Several of these one-time investments bridged immediate and emerging needs that turn into longer-term funding
obligations. They will have to be carefully reviewed and ongoing funding could require trade-offs the City Council
and City Management will have to consider with the new Financial Plan.
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General Fund Operating Budget Additions1 FY 21-22
One-time Contingency: Benchmark Study Adjustments One-time 250,000
Part-time Fire Inspector (0.5 FTE) (Revenue Offset) Ongoing 11,025
Housing/Homelessness Contract Position Operating $40,000
Increased Mission Plaza Maintenance Ongoing $27,000
Additional Pressure Washing Ongoing $25,000
Additional Pruning/Watering Ongoing $200,000
Additional Streets Maintenance Staff Ongoing $60,750
CAPSLO Programming – Safe Parking One-Time $64,633
Centralized Resident Inquiry Platform Ongoing $40,000
Public Safety Customer Engagement Ongoing $17,000
Mobile Data Computers One-Time $14,200
Additional Farmers’ Market Support Ongoing $15,000
Contract Volunteer Coordinator P&R One-Time $32,850
Emergency Manager Ongoing $38,627
Parks Maintenance Beautification Gardener Ongoing $48,600
$884,685
Detailed department information and variances explanations can be found in the year-end report that the City Council
considered on October 4, 2022 , but overall, the General Fund departments ended the year within the appropriated
budget at $66.5 million . As mentioned above, many departments ended the year with significant savings due to
vacancies.
The overall expenditure actual of $87.3 million includes the CalPERS annual payment for unfunded liabilities as well
as the Additional Discretionary Payment (ADP) of $10.2 million ($12.4 million when combining all funds) that was
made in March 2022. This amount reflects three years’ worth of allocations as prescribed by the City’s Fiscal Health
Response Plan. The payments were originally scheduled to be made annually but were delayed due to the onset of the
pandemic and the ensuing uncertainties as to the revenue sources of the City to preserve liquidity to maintain its
services to the community. The City Council therefore decided to leave the amounts earmarked annually in fund
balance until such time that there was more certainty that the effects of the pandemic were largely mitigated, and the
City’s overall financial condition allowed for the payment. Also included in the final expenditures are the contractual
and purchasing commitments entered into in FY2021-22. This amount is subsequently marked as assigned fund
balance as portrayed on page 38. Though the City Council could take action regarding these commitments, they are
often tied to contractual obligations the City has or are connected to work efforts already under way.
1 The ongoing services and programs are fully integrated into the 2022-23 budget and the long-term forecast.
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Management’s Discussion and Analysis
* Shown separately in order to reflect a more accurate year-over-year comparison for departments. Line 17 includes the FY 2021-22 one-time
$10.2 million additional down payment to CalPERS from the General Fund (R-11307). This cost is distributed annually between the departments
based on calculated weights.
Year-End Revenue – General Fund
Sales and Use Tax Revenue: Sales and use tax revenue far exceeded the City’s (and its Sales Tax consultant’s)
projections for the year. This is consistent with trends across the state. High consumer spending accelerated by savings
accumulation and pent-up demand continued with the gradual opening of the economy, the return of students to in-
class sessions, and renewed travel activity. High inflation through labor and supply chain issues intertwined with
Federal Reserve monetary policy to counteract inflation and a war driving gas prices to all-time highs, all greatly
impacted sales tax. A highly vulnerable revenue stream, sales tax remains a cautionary tale. Although unemployment
rates remain low, fuel price instability, stock market woes, and rising consumer prices (as raw materials and
components are more expensive) could further weaken consumer confidence and households will likely pull back on
discretionary purchases as 2023 arrives. International supply chain issues show a steady recovery, but employee costs
and labor shortages may impact future spending patterns, especially in the City’s tourism realm as household income
realities catch up with pent-up demand from the pandemic lock-down.
The graph below shows the change in sales tax by major business group for Q1 2022 (January-March 2022). For the
full report, visit slocity.org/finance.
FY 2020‐21 FY 2022‐23
Actual Budget Actual
Funds Available % Budget
1 Internal Services
2 Administration/IT 7,060,343$ 9,758,782$ 8,720,808$ 1,037,974$ 11%9,620,216$
3 City Attorney 897,198$ 1,395,133$ 1,357,168$ 37,965$ 3%1,132,935$
4 Finance 1,533,386$ 1,999,107$ 1,878,681$ 120,426$ 6%2,010,387$
5 Non‐dept, Support Services 1,528,100$ 1,689,430$ 647,282$ 1,042,148$ 62%2,912,928$
6 Human Resources 1,215,799$ 1,620,810$ 1,608,917$ 11,894$ 1%1,480,118$
7 Public Safey
8 Fire 11,621,200$ 12,192,029$ 12,082,810$ 109,219$ 1%11,585,358$
9 Police 13,902,407$ 15,394,812$ 15,180,032$ 214,780$ 1%16,324,782$
10 Community Services Group (CSG)
11 CSG Administration 321,209$ 698,691$ 577,508$ 121,183$ 17%496,566$
12 Community Development 5,941,116$ 7,563,761$ 6,621,942$ 941,818$ 12%5,968,524$
13 Parks & Recreation 3,653,727$ 4,800,963$ 4,158,021$ 642,942$ 13%4,758,728$
14 Public Works 11,359,789$ 14,338,105$ 13,332,656$ 1,005,449$ 7%14,662,503$
15 Solid Waste (Utilities)117,439$ 332,271$ 170,662$ 161,610$ 49%282,743$
16 Total 59,151,714$ 71,783,893$ 66,336,486$ 5,447,407$ 8%71,235,788$
17 CalPERs Unfunded Liability* 9,586,928$ 20,837,422$ 20,837,422$ 0%11,815,513$
18 Total 68,738,643$ 92,621,316$ 87,173,909$ 5,447,407$ 6%83,051,301$ IndexDepartment FY 2021‐22
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Management’s Discussion and Analysis
Local Transaction Tax (Local Revenue Measure): The local transaction tax largely mirrors the sales tax trends. FY
2021-22 marks the first full year that the City collected the additional 1% tax from Measure G-20. As a result, annual
collection increased to about $29 million from this revenue source, making it the largest tax revenue for the City. For
a more detailed account of the Local Revenue Measure, see pages 123 to 125.
Property Tax: Property tax revenue continues to increase, and the City recorded an all-time high in FY 2021-22,
nearly 4% higher than the prior year due to an attractive and flourishing real estate market. The main reason for growth
is the transfer of ownership and the increase in Taxable Assessed Value of homes in the community largely supported
by record-low mortgage rates in 2021. As rates now increase, the housing market is beginning to cool, and sales prices
begin to plateau. Data shows that number of home sales were down 30.3% in July 2022 compared to July 2021, but
the median sale price was up 13.3%2 . The County Assessor’s Office anticipates an additional 4% growth in 2022-23
based on Proposition 13 increases and assessed valuations of homes.
Transient Occupancy Tax (TOT): Tourism along the central coast made a strong comeback in FY 2021-22 as the
region reopened and benefited from being a drive-to destination. Monthly TOT receipts reached all-time highs largely
driven by high room rates. The City received about $1.6 million more than its revenue projections for the year.
However, as inflation and gas prices increase and pent-up demand declines, the City’s tourism program together with
the countywide tourism office expect to see a growth plateau and a possible decline in FY 2022-23.
Utility User Tax (UUT): UUT was slightly below the budgeted amount in FY 2021-22. Utility User Taxes have
historically been considered a stable tax revenue source for local governments; however, that changed in 2017, when
the Federal Communications Commission reclassified broadband internet, voicemail, and text messaging to a
nontaxable classification of communication. The result has been declining or stagnant UUT revenue for
telecommunications for most local governments. Increased taxes due to increased energy costs (particularly over the
last year) have helped offset the decline in telecommunications taxes. As a result, the City collected nearly $200,000
more than what was collected in the previous year. The City has further benefited from its UUT Administration
contract with a third-party vendor. Staff time has been reduced nearly tenfold on collection, enforcement, and other
administrative duties required of this tax. Additionally, the vendor helped collect over $25,000 in penalties from
delinquent businesses over the last fiscal year, neutralizing the cost of the contract.
2 “San Luis Obispo County Housing Market.” Redfin, 20 Aug. 2022, https://redfin.com/county/342/CA/San-Luis-
Obispo-County/housing-market.
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Management’s Discussion and Analysis
Business Tax: Business taxes are collected at the beginning of the fiscal year and are based on the gross receipts of
the previous calendar year. FY 2021-22 revenues were lower than the previous fiscal year because businesses remitted
payment based on their 2020 gross receipts, the year most impacted by COVID-19 and the economic shutdown. Staff
had anticipated the decline in revenue and the year-end result slightly surpassed the budgeted forecast.
Cannabis Tax: Cannabis tax revenues stabilized in FY 2021-22 now that two retail locations are operating in the
City, Cal Poly is fully open, and tourism is returning to pre-pandemic levels. Interestingly, the monthly remittal
amounts were nearly the same across the entire fiscal year, unlike sales and transient occupancy taxes which fluctuate
seasonally. Staff will closely monitor this revenue during the next fiscal year to determine how variables such as new
operators entering the market will impact total cannabis sales within the City. Audits and periodic inspections will
continue to be a part of the City’s operations to ensure compliance with state and local regulations.
General Government: General Government revenue includes all of the City’s non-departmental revenue such as
business licenses, interest earnings, and rent revenue. It also includes grant and subvention revenue which often
fluctuates significantly from year to year. For example, in 2021-22 the City received over $1.0 million in Mutual Aid
reimbursement. This revenue offsets the Fire Department’s overtime expenditures incurred from sending aid to
multiple fires throughout the state. The most notable variance in this category was a negative $1.7 million Fair Market
Value (FMV) adjustment. The FMV adjustment is essentially an accounting process that makes it possible to reassess
the fair value of the City’s assets when there is a considerable difference between the market and the current book
value of the City’s monetary assets.
General Fund Revenue compared to previous year and final budget
*Gas Tax (SB1) is reflected in this schedule of revenues however it is recorded as a transfer from the Gas Tax Fund
in the fund financial statements.
Development Review Revenue
Though high development activity continued into FY 2021-22, several of the fees collected in Community
Development for Planning and Building services did not reach the anticipated budget. Most notably, Building Permits,
2021 Actuals 2022 Budget 2022 Actuals 2022 Variance % Received
Tax and Franchise Revenue 72,785,610$ 89,230,869$ 96,491,194$ 7,260,326$ 108.1%
Tax and Franchise Revenue 72,785,610$ 89,230,869$ 96,491,194$ 7,260,326$ 108.1%
Local Revenue Measure G 12,779,713$ 25,810,000$ 29,172,258$ 3,362,258$ 113.0%
Sales Tax (Bradley Burns)20,067,740$ 20,790,779$ 22,247,303$ 1,456,524$ 107.0%
Property Tax 19,858,530$ 20,157,153$ 20,711,004$ 553,851$ 102.7%
Transient Occupancy Tax 6,960,035$ 9,051,000$ 10,650,762$ 1,599,762$ 117.7%
Utility User Tax 5,225,979$ 5,383,000$ 5,338,325$ (44,675)$ 99.2%
Business Tax 2,937,176$ 2,832,000$ 2,823,163$ (8,837)$ 99.7%
Franchise Fees 1,796,829$ 1,575,000$ 1,978,295$ 403,295$ 125.6%
Gas Tax 1,038,124$ 1,223,937$ 1,130,063$ (93,874)$ 92.3%
Cannabis Tax 844,939$ 1,000,000$ 998,875$ (1,125)$ 99.9%
Gas Tax (SB1)851,408$ 915,000$ 911,849$ (3,151)$ 99.7%
Safety Prop 172 425,136$ 493,000$ 529,299$ 36,299$ 107.4%
Fees for Service and Other Revenue 15,897,980$ 13,695,038$ 11,855,961$ (1,839,076)$ 86.6%
Development Review 7,089,762$ 6,971,140$ 5,964,790$ (1,006,350)$ 85.6%
Parks & Recreation 1,616,445$ 1,626,151$ 1,694,241$ 68,090$ 104.2%
Fire 1,500,759$ 1,443,440$ 1,498,428$ 54,988$ 103.8%
Grants & Subventions 3,200,951$ 1,274,368$ 2,028,668$ 754,300$ 159.2%
Other Revenue 1,357,008$ 1,184,751$ (533,074)$ (1,717,825)$ ‐45.0%
Police 600,406$ 619,744$ 577,441$ (42,304)$ 93.2%
Business Licenses (Incl Cannabis)532,649$ 575,443$ 625,468$ 50,025$ 108.7%
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Management’s Discussion and Analysis
while the second highest total for building permits in the City’s history and the highest total in FY 2020-21, began to
notice the slow-down associated with supply chain issues, inflation, and increased interest rates. Infrastructure Plan
Check and Inspections realized the most significant gap in the revenue projections as several anticipated projects did
not complete the plan review process during the FY2021-22. In addition, there were approximately $1 million
associated with future phases of the Avila Ranch project that were not submitted in FY 2021-22 as previously
forecasted.
Other Revenue
This Revenue category includes rents & leases, fines & forfeitures, damage to City property, and miscellaneous
revenues not easily categorized. It also reports on the City’s Interest on Investments which experienced large losses
due to the largest Fair Market Value adjustments on investments experienced in 40 years. See Note 2 – Cash and
Investments.
Detail for the Local Revenue Measure
The City’s Local Revenue Measure (half percent transaction tax) is a sub-fund of the General Fund. The activities
reflected in the Financial Statements of this report are provided for information regarding the use of the Measure’s
according to the community’s priorities and the recommendation of the Revenue Enhancement Oversight
Commission, a City Council advisory body, overseeing the allocations. For FY 2021-22, the following revenues and
expenditures were recorded:
General Fund Budgetary Highlights
A detailed budgetary comparison schedule for the year ended June 30, 2022, is presented as required supplementary
information following the notes to the financial statements. The final budget amounts include changes that were
approved by the City Council through June 30, 2022.
The following summarizes the original budget compared with the adjusted final budget for fiscal year 2021-22. The
adjusted final budget includes Council approved adjustments as well as administrative budget adjustments in
Budget Actual
Revenue
Transaction Tax 25,810,000$ 29,172,258$
Investment Income (283,748)
Total 25,810,000$ 28,888,510$
Expenditures Budget Actual Encumbrances Carryover
Operating Programs 6,912,660$ 6,912,660$ -$ -$
Capital Programs
Community Safety and Emergency Preparedness 2,755,697 848,909 609,179 1,297,609
Creek and Flood Protection 1,074,772 741,423 119,342 214,007
Safe and Clean Public Areas 1,334,564 419,810 183,161 731,593
Economic Development and Business Retention 1,154,716 410,161 7,500 737,055
Youth/Senior Services and Recreation Facilities 3,996,965 1,775,775 41,997 2,179,193
Street Maintenance and Transportation 11,723,238 4,791,725 1,756,116 5,175,396
Open Space/Natural Areas Preservation and Maint. 1,819,605 1,190,577 98,057 530,971
Other Services and Projects 1,975,179 913,890 89,672 971,617
Total Expenditures 32,747,396$ 18,004,930$ 2,905,024$ 11,837,441$
2021-22 Local Revenue Measure Budget to Actual
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Management’s Discussion and Analysis
accordance with the City’s adopted fiscal policies and procedures. As outlined on page 103, the City Council took
action at mid-year to address emerging needs and community interest which resulted in significant budget adjustments
for the fiscal year.
As discussed below, differences between the original budget and the final amended budget reflect the following key
changes:
Revenue budgets were increased by $9.4 million primarily for sales, transaction and transient occupancy tax.
Overall expenditure budgets were also augmented by $17.1 million for the General Fund. The increases were
made to respond to emerging needs and community services as outlined above. Budgets were also increased
for encumbrances and carryover of purchase commitments that had not yet been executed at the end of the
prior fiscal year as well as the additional payment to CalPERS towards the City’s unfunded liabilities.
The following table compares the actual results for revenues, expenditures, and fund balance with the final budget for
the General Fund. As the table shows, revenues exceeded the final budget by over $4.2 million, while expenditures
ended below the final budget by approximately $6.9 million. The net other sources and uses ended above budget by
$3.8 million resulting in an ending fund balance that was $7.2 million greater than anticipated.
BUDGETARY HIGHLIGHTS
General Fund Original Budget Final Budget
Positive (Negative)
Variance
Revenues 92,799,078$ 102,188,180$ 9,389,102$
Expenditures 76,294,603 93,440,299 (17,145,696)
Other sources (uses)(18,937,662) (22,632,216) (3,694,554)
Beginning fund balance 47,365,717 47,365,717 -
Ending fund balance 44,932,530$ 33,481,382$ (11,451,148)$
General Fund 2021-22 2021-22
Actual
Positive (Negative)
Variance
Revenues 102,188,180$ 106,399,537$ 4,211,357$
Expenditures 93,440,299 86,545,247 6,895,052
Other sources (uses) (22,632,216) (26,474,501) (3,842,285)
Beginning fund balance 47,365,717 47,365,717 -
Ending fund balance 33,481,382$ 40,745,506$ 7,264,124$
Ending fund balance
Nonspendable - 90,797 90,797
Restricted - - -
Committed - 19,556,799 19,556,799
Assigned - 12,741,186 12,741,186
Unassigned - 8,356,724 8,356,724
Total ending fund balance 33,481,382$ 40,745,506$ 7,264,124$
BUDGET - ACTUAL COMPARISON
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Management’s Discussion and Analysis
Year-End – 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 with
Water, Sewer, Parking, and Transit.
While two of the City’s four Enterprise funds fared well through the pandemic years and moved seamlessly back into
the re-opening period, two of them remained subdued and only seeing a return to more normalized activity toward the
end of the fiscal year. Following is an analysis of each fund and their fiscal standing at the end of 2021-22 and like
the Governmental Funds, all of the Enterprise funds were affected by the Fair Market Value Adjustments indicated in
Note 2 – Cash and Investments.
Water Fund
Water Revenue was $6.7 million more than budgeted primarily due to high development activity and the related impact
fees. Staff continues to refine the methodology behind development impact fee projections; but the cyclical nature of
development makes forecasting challenging. Water service charges surpassed budget by $1.1 million due to a dry
winter which resulted in increased irrigation needs within the community. Additionally, staff had budgeted
conservatively for water service charges in FY 2021-22 to account for uncertainties associated with continued COVID-
19 impacts.
Though the Water Fund began seeing the influences of supply chain issues related to raw material and chemicals as
well as increases in utilties toward the end of the fiscal year, it was able to manage its expenses and remain under
budgeted allocations. As inflation continues to remain at high levels further driving the factors influencing the Fund’s
operation, the effects will be more pronounced in the coming fiscal year.
Budget Actual Variance %
Service Charges and Base Fees 22,645,942$ 23,269,764$ 24,622,357$ 1,352,593$ 106% 24,123,079$
Investment and Property Revenue 585,004 407,600 (714,713) (1,156,998) ‐175%50,000
Other Revenue 414,589 339,780 222,451 121,316 65%209,000
State Grants 326,440 256,395 1,621,599 1,365,204 632% 1,395,000
Cal Poly Capacity & Resilience 535,180 223,000 114,317 (108,683) 51%259,490
COVID Rate Relief Program ‐ ‐ (225,016) (225,016) ‐
Development Impact Fees 4,746,439 ‐ 5,160,020 5,160,020 ‐
Federal Stimulus Grants ‐ ‐ 226,994 226,994 ‐
Total 29,253,595$ 24,496,539$ 31,028,009$ 6,735,429$ 127% 26,036,569$
Water Fund Revenue FY 21 Actual FY 2021‐2022 FY 23 Forecasted
Budget
Budget Actual Funds Available %
Staffing * 4,142,776$ 5,551,424$ 5,174,679$ 376,745$ 7%4,961,606$
Contract Services 10,066,890 11,620,462 10,700,008 920,454 8%11,393,356
Other Operating Expenses 770,887 1,286,281 967,819 318,462 25%1,449,507
Utilities 564,395 676,872 531,769 145,103 21%688,885
General Government 1,729,965 1,722,409 1,722,409 ‐ 0%1,535,175
TOTAL 17,274,913$ 20,857,448$ 19,096,684$ 1,760,764$ 8%20,028,529$
*Exclusive of GASB 68/75 adjustments
FY 21 Actual FY 2022‐23 BudgetWater Fund Operating Expenses FY 2021‐22
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Management’s Discussion and Analysis
Sewer Fund
Sewer development impact fees exceeded budget by approximately $3.7 million, reflective of continued development
in the City and changes associated with construction timelines. Sewer service charges and base fees were more than
budgeted by $1.1 million as staff budgeted conservatively for Sewer service charges in FY 2021-22 considering
ongoing pandemic influences and impacts and the moratorium for service shut-off due to non-payment was not lifted
until December 2021.
As reflected in the Statement of Cash Flows, cash was impacted in the Sewer Fund due to the timing of debt proceeds
received for the Water Resource Recovery Facility (WRRF) project reimbursements. Last fiscal year, debt proceeds
were lower due to delays in funding related to the construction timeline and project costs carrying over to FY 2021-
22. In addition, State Grants was $4.6M below anticipated budget primarily due to the timing of WRRF construction
and reimbursement requests associated with grant awards.
Like the Water Fund, the Sewer Fund began feeling the effects of inflation and related labor and supply chain issues
toward the end of the fiscal year. However, staff had taken action early to make sure materials related to the WRRF
upgrade were already on site and most of the work was able to proceed. Overall, the Fund was able to maintain within
its allocated expense budget achieving an overall savings of $1.5 million with significant savings in staffing costs.
Parking Fund
As part of the mid-year budget process, the Parking Fund forecast was adjusted to estimate revised revenues for FY
2021-22 due to the economic impacts and parking activities following the height of COVID-19, and adjustments in
parking operations. When preparing budget adjustments, staff used a conservative approach considering the
limitations COVID-19, the re-opening of the economy and renewed travel activity may have on parking revenue.
Ultimately, Parking programs returned to pre-COVID activity levels quicker than anticipated and revenue actuals
exceeded the revised projections by year-end by 10%. On-street parking revenue in June 2021 was nearly identical to
revenue received in February 2020 prior to the COVID pandemic. Similarly, parking structure usage quickly returned
to pre-COVID levels beginning in May 2021 when the Farmer’s Market was reestablished and non-city staff who
work in the downtown area began to utilize the long-term parking program. These are positive indicators of a Parking
Budget Actual Variance %
Service Charges and Base Fees 16,942,094$ 18,004,047$ 19,109,600$ 1,105,553$ 106% 18,634,189$
Development Impact Fees 3,836,955 ‐ 3,685,008 3,685,008 ‐
Other Revenue 541,862 382,000 603,873 223,981 159%291,000
Investment and Property Revenue 9,607 401,514 (1,024,551) (1,437,268) ‐258%50,000
Grants 258,467 4,784,288 97,413 (4,686,875) 2%‐
Cal Poly Capacity & Resilience 243,568 243,568 243,568 ‐ 100%243,568
Total 21,832,552$ 23,815,417$ 22,714,910$ (1,109,602)$ 95%19,218,757$
FY 2021‐2022 FY 23 Forecasted
BudgetSewer Fund Revenue FY 21 Actual
Budget Actual Funds Available %
Staffing*4,424,073$ 5,775,389$ 5,183,631$ 591,758$ 10%4,889,494$
Contract Services 3,517,931 1,999,295 1,574,248 425,047 21%863,361
Other Operating Expenditures 1,182,999 1,542,872 1,357,622 185,250 12%1,741,111
Utilities 540,553 790,227 539,357 250,870 32%937,710
General Government 1,632,521 1,712,752 1,712,752 ‐ 0%2,573,783
TOTAL 11,298,077$ 11,820,535$ 10,367,610$ 1,452,925$ 12%11,005,459$
*Exclusive of GASB 68/75 adjustments
FY 2020‐21 FY 2022‐23Sewer Fund Operating Expenses FY 2021‐22
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Management’s Discussion and Analysis
Fund moving toward fiscal sustainability into the new fiscal year. The Parking fund also experienced the effects from
the Fair Market Value adjustments which is included under “Other Revenue” however, other miscellaneous revenues
such as rents & leases were able to counteract some of the downward adjustments of $445,207.
Due to the revenue shortfall and gradual recovery to pre-pandemic levels, Parking managed its expenses while also
grappling with labor market challenges influencing the re-staffing of its programs. It therefore ended the year within
the allocated budget with savings stemming from salary savings that in turn necessitated the use of contract services
to maintain the services.
Transit Fund
In FY 2021-22, the Transit Program looked to the Federal Urbanized Area Grant Funding program (5307 funds) to
supplement the Transit Fund, paying for 50% of the operating costs while the remaining funds were state and local
transit funds. The City secured Federal grant funding from the American Rescue Plan Act (ARPA) for 100% of
operational costs beginning in FY 2022-23 for three fiscal years, and will address driver wages, allow for the purchase
of additional zero emission buses, and support other capital projects. The reduction in service levels resulted in cost
savings that helped to offset lost fare revenues. The unused balance of annual allocations of Federal 5307 and State
Transit Development Act (TDA) Funds have been deferred for future use in FY 2022-23. The variance in the table
below is due to both State and Federal grant disbursement timing where it is normal for full revenues to be realized in
the Fall or based on receipts of reimbursements.
Budget Actuals Variance %
Parking Meters 1,265,085$ 1,940,863$ 2,210,191$ 269,328$ 114% 2,268,500$
Parking Fines 654,284 657,606 928,909 271,303 141% 793,500
Parking Structures 346,300 835,294 1,109,187 273,893 133% 1,328,450
Long Term Parking 422,381 547,795 623,639 75,844 114% 844,900
Other Revenue 380,778 569,578 685,822 116,244 120% 595,400
Total 3,068,827$ 4,551,136$ 5,557,749$ 1,006,613$ 122% 5,830,750$
FY 2021‐2022 Forecasted
BudgetFY 21 ActualsParking Fund Revenue
Budget Actual Funds Available %
Staffing*1,126,434$ 2,022,327$ 1,574,054$ 448,273$ 22%1,917,920$
Contract Services 847,922 1,129,895 1,008,835 121,060 11%584,065
Other Operating Expenditures 200,385 362,989 374,319 (11,330) ‐3%401,525
Utilities 117,581 211,301 170,905 40,396 19%221,933
General Government 710,211 869,887 869,887 ‐ 0%‐
TOTAL 3,002,533$ 4,596,400$ 3,998,000$ 598,399$ 13%3,125,444$
*Exclusive of GASB 68/75 adjustments
FY 2020‐21 FY 2022‐23Parking Fund Expenses FY 2021‐22
Budget Actuals Variance %
Federal 2,805,689$ 4,093,659$ 1,877,362$ (2,216,297)$ 46% 7,248,297$
Local (Bus Fare) 328,184 687,500 710,457 22,957 103% 850,000
Other Revenue/ Interest Revenue 4,047 30,826 (131,428) (162,254) ‐426% 6,500
State 351,998 2,743,064 1,332,876 (1,410,188) 49% 2,040,941
Total 3,489,918$ 7,555,049$ 3,789,267$ (3,765,782)$ 50% 10,145,738$
Forecasted
Budget
FY 2021‐2022FY 2020‐21 ActualsTransit Fund Revenue
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The Transit Fund operating costs are typically split equally between state and federal funding sources after deducting
the mandated 20% farebox recovery. The state provides TDA funds based on the adopted budget and federal funds
are based upon actual costs. When the Transit Fund has savings there will be a reduction in federal funds being
reimbursed which shows as a reduction in revenues. The largest expense for the Fund is in contract services as the
operation of the transit service as well as maintenance is contracted out.
Ridership Recovery
Budget Actual Funds Available %
Staffing*313,020$ 422,212$ 334,738$ 87,474$ 21%298,896$
Contract Services 2,611,522 3,788,402 2,666,078 1,122,324 30%2,895,950
Other Operating Expenditures 220,003 496,424 353,858 142,566 29%684,513
General Government 321,727 226,183 226,183 ‐ 0%365,544
TOTAL 3,466,272$ 4,933,221$ 3,580,857$ 1,352,364$ 27%4,244,903$
*Exclusive of GASB 68/75 adjustments
FY 2020‐21 FY 2022‐23Transit Fund Expenses FY 2021‐22
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Combined Program Expenses and Revenue for Business Type Activities
Revenue Sources: Operating revenues for services increased by $6 million with Parking and Transit revenue
beginning to normalize to pre-pandemic levels while Water and Sewer services remained strong throughout the year
with the pandemic restrictions lifted in December 2021.
Program Expenses: As outlined in the prior section, the program expenses for the proprietary funds decreased from
the previous year leading to a 10% increase in ending Net Position across all funds.
Summary of Changes in Net Position
2021-22 2020-21
Revenues:
Program Revenues:
Charges for services 59,140,271$ 52,740,882$
Operating grants and contributions 5,156,782 3,742,594
Investment earnings (1,207,118) 577,722
Miscellaneous and other 585,101 519,677
Total revenues 63,675,036 57,580,875
Program expenses:
Public utilities 33,468,921 36,534,518
Transportation 8,368,389 8,080,778
Total expenses 41,837,310 44,615,296
Increase (decrease) in net position
before transfers 21,837,726 12,965,579
Transfers (1,685,314) (1,992,911)
Change in net position 20,152,412 10,972,668
Net position - beginning of year 217,715,565 206,322,415
Prior year restatement 2,516,509 420,482
Net position - end of year 240,384,486$ 217,715,565$
Business-Type Activities
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Overall Year-End Financial Statements
When evaluating the overall Financials, several influencing factors should be considered. While GASB Statement No.
87 as well as the integration of the outstanding housing related loans will continue to be a part of the Financial
Statements going forward, the Fair Market Value adjustments currently seen will likely adjust in the latter part of 2023
into 2024 as inflation begins to flatten and monetary policy counteracting it begins to ease.
GASB Statement No. 87
This pronouncement became effective for fiscal years beginning after June 15, 2021 and was included in the City’s
financial statements for the first time with FY 2021-22. As such, GASB 87 requires recognition of certain lease assets
and liabilities for leases that previously were classified as operating leases and recognized as inflows 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. Under this Statement, a
lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to
recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of
information about the governments’ leasing activities. Within the City’s Financial Statements, Note 6 lists the
applicable lease receivables.
Housing Loans and Fee Deferrals
The City administers an extensive housing program for workforce and low-income housing. Through the program, it
has extended loans and impact fee deferrals to low-income housing developers such as the Housing Authority of San
Luis Obispo, Transitions Mental Health, and People’s Self-Help Housing (to name a few). The loans are long-term in
nature, include a modest interest rate, and will become due in future years. The loans are disclosed in the City’s
financial statement under the respective governmental funds as loans receivables and restricted within fund balance.
Detailed information can be found in Note 4 – Loans Receivables.
Fair Market Value Adjustments
The City follows the practice of pooling cash and investments for all funds under its direct daily control. Interest
earned on pooled cash and investments is allocated quarterly to the various funds based on the respective fund’s
average quarterly cash balance. Investments are stated at fair value, based on quoted market prices in accordance with
GASB standards and is adjusted to reflect any unrealized gains and losses resulting from the fair value adjustment
annually.
Due to the worldwide pandemic brought on by COVID-19 and the subsequent effects on inflationary trends, the
Federal Reserve’s monetary policy to counteract inflation has lead to the largest fair market value adjustment in 40
years. The City’s investments were not immune to the adjustments and the effects are reflected in the Financial
Statements under “Use of money and property” in all funds based on the City’s mentioned practices. More information
on the City’s investments can be found in Note 2 – Cash & Investments.
The following outlines financial highlights for the year which are detailed in the table on page 23 of the Management
Discussion and Analysis.
Per the City’s Statement of Net Position, total City-wide assets increased by approximately $136.1 million or
21.2%. The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows at
June 30, 2022 by $418 million (net position). They include again the disclosure of the City’s net unfunded pension
liability which decreased by $23.2 million to $66 million as of June 2021 largely due the 2021 interest gain of
21.3%. The City’s net pension liability is measured as the total pension liability of $243.8 million less the
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Management’s Discussion and Analysis
pension’s fiduciary net position of $177.8 million. This picture will likely change with the experienced losses at
the end of June 2022 but will be counter-acted by the City’s additional discretionary payments made in FY 2021-
22 and anticipated in FY 2022-23.
In governmental activities, amounts received from various sources were slightly below previous year-end results,
but the City’s cash and investment balances increased by $24 million; prepaid expenses increased slightly as well
and cash held with fiscal agent remained stagnant from 2020-21. Of note is the increase in Loans Receivables of
over $4.5 million from the City’s Housing program.
In business-type activities, total assets increased from $337 million to $435 million. Of note is the lease receivable
amount of $37 million in the Parking Fund due to the reporting of leases under GASB 87. The Sewer Fund
increased its construction in progress by almost $40 million as the upgrade of the Water Resource Recovery
Facility is ongoing. This $140 million multi-year construction project is scheduled to be completed at the end of
2023.
City-wide liabilities increased by $11.6 million during the fiscal year with the decrease in the Governmental funds
being offset by an almost $40 million increase in the business-type activities. The decrease in governmental funds
is mostly due to the decrease in net unfunded pension liabilities while the increase in the business-type activities
reflects new long-term debt obligations.
The City’s governmental funds altogether reported combined ending fund balances of $100.5 million. Roughly
78% or $87.5 million is not available for new spending and is reflected as restricted, committed or assigned in
the Financial Statements.
The total General Fund balance decreased by 15% to $40.7 million due to the additional $10.2 million payment
toward the City’s unfunded pension liability with CalPERS (Note 8 – Pension Plans). The Fund balance combines
the following levels as outlined in the City’s Fund Balance & Reserve Policy and in accordance with GASB 54:
non-spendable, restricted, committed, assigned and unassigned .
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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, 2021 and 2022.
For the Fiscal Year ending on June 30, 2022, the City’s combined total assets and deferred outflows of resources were
greater than its liabilities and deferred inflows of resources by $418 million. The largest portion of the City’s net
position reflects its investment in capital assets in the amount of $351.7 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.
Just over $44.5 million of the City’s net position is subject to restrictions imposed by external parties and its use is
determined by those restrictions and contractual obligations. The governmental and business-type activities each
contributed $22 million to the combined net position resulting in a total net position of $418 million at June 30, 2022.
Information about changes in net position for fiscal years 2021-22 and 2020-21 is summarized below. Reasons for
the changes are discussed in the following sections for governmental activities and business-type activities.
2021-22 2020-21 2021-22 2020-21 2021-22 2020-21
Current and other assets 128,456,785$ 100,429,898$ 118,049,970$ 95,663,836$ 246,506,755$ 196,093,734$
Capital Assets 214,799,171 205,190,494 317,277,636 241,196,715 532,076,807 446,387,209
Total assets 343,255,956 305,620,392 435,327,606 336,860,551 778,583,562 642,480,943
Total Deferred Outflows of
Resources 36,401,908 25,815,578 6,080,805 4,088,384 42,482,713 29,903,962
Current liabilities 25,318,783 11,006,354 17,393,178 16,047,477 42,711,961 27,053,831
Noncurrent liabilities 123,973,399 161,634,631 140,126,065 106,481,087 264,099,464 268,115,718
Total liabilities 149,292,182 172,640,985 157,519,243 122,528,564 306,811,425 295,169,549
Total Deferred Inflows of Resources 52,069,013 3,053,401 43,504,682 704,806 95,573,695 3,758,207
Net position:
Net investment in capital assets 193,984,593 184,205,733 157,728,990 160,750,886 351,713,583 344,956,619
Restricted 41,770,187 35,137,179 2,684,781 2,493,859 44,454,968 37,631,038
Unrestricted (57,458,111) (63,601,328) 79,970,715 54,470,820 22,512,604 (9,130,508)
Total Net Position 178,296,669$ 155,741,584$ 240,384,486$ 217,715,565$ 418,681,155$ 373,457,149$
CONDENSED STATEMENT OF NET POSITION
Governmental Activities Business-Type Activities Total
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Governmental Activities. The City’s net position in the Governmental activities increased by $22 million to $178.3
million on June 30, 2022 based on very strong tax revenues and expenditure savings in all of its operation that were
able to absorb the losses experienced by large fair market value adjustments seen under investment earnings.
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 2020-21 by $12.7 million or 13% based on the re-opening of
the economy, strong purchasing and a rapidly returning travel and tourism activities. This increase achieved despite
the reduction in charges for services from development related activities and lower revenue from capital grants and
contributions revenue3. Fiscal Year 2021-22 saw the first full year of the local transaction tax at the augmented level,
adding an additional $18 million to the revenue total.
Charges for services decreased from the previous year primarily due to a decline in development related activity.
Building and planning reviews, permits and inspection activity can vary significantly from year to year. Similarly,
grant revenues, particularly for capital projects, such as the Marsh Street Bridge rehabilitation or the Taft to Pepper
section of the Railroad Safety Trail were higher in the prior fiscal year.
3 Contribution revenue is grants, donations, transfers and other miscellaneous funding.
2021-22 2020-21 2021-22 2020-21 2021-22 2020-21
Revenues:
Program Revenues:
Charges for services 18,920,886$ 24,096,385$ 59,140,271$ 52,740,882$ 78,061,157$ 76,837,267$
Operating grants and contributions 3,647,813 3,601,973 5,156,782 3,742,594 8,804,595 7,344,567
Capital grants and contributions 1,531,157 5,688,200 - - 1,531,157 5,688,200
General Revenues:- -
Sales taxes (Including local Sales Tax) 51,419,561 32,847,453 51,419,561 32,847,453
Property taxes 14,716,412 14,197,869 14,716,412 14,197,869
Transient occupancy tax 10,650,762 6,960,035 10,650,762 6,960,035
Utility users tax 5,338,325 5,225,979 5,338,325 5,225,979
Property tax in lieu of VLF 5,994,592 5,660,661 5,994,592 5,660,661
Other taxes and fees 5,800,333 5,578,944 5,800,333 5,578,944
Investment earnings (1,638,993) 435,243 (1,207,118) 577,722 (2,846,111) 1,012,965
Miscellaneous and other 1,213,401 1,019,626 585,101 519,677 1,798,502 1,539,303
Total revenues 117,594,249 105,312,368 63,675,036 57,580,875 181,269,285 162,893,243
- -
Program expenses:- -
Public safety 41,132,177 35,323,339 41,132,177 35,323,339
Public utilities 33,468,921 36,534,518 33,468,921 36,534,518
Transportation 10,395,516 8,040,919 8,368,389 8,080,778 18,763,905 16,121,697
Culture and recreation 12,407,720 11,122,003 12,407,720 11,122,003
Community development 15,506,092 11,918,019 15,506,092 11,918,019
General Government 20,982,321 17,276,491 20,982,321 17,276,491
Interest on long-term debt 699,284 731,045 699,284 731,045
Total expenses 101,123,110 84,411,816 41,837,310 44,615,296 142,960,420 129,027,112
- -
Increase (decrease) in net position
before transfers 16,471,139 20,900,552 21,837,726 12,965,579 38,308,865 33,866,131
Transfers 1,685,314 1,992,911 (1,685,314) (1,992,911) - -
Change in net position 18,156,453 22,893,463 20,152,412 10,972,668 38,308,865 33,866,131
Net position - beginning of year 155,741,584 133,430,668 217,715,565 206,322,415 373,457,149 339,753,083
Prior year restatement 4,398,632 (582,547) 2,516,509 420,482 6,915,141 (162,065)
Net position - end of year 178,296,669$ 155,741,584$ 240,384,486$ 217,715,565$ 418,681,155$ 373,457,149$
SUMMARY OF CHANGES IN NET POSITION
Governmental Activities Business-Type Activities Total
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General revenues are used to pay costs of providing program services such as public safety, parks and open space,
streetlights and traffic signals, recreation opportunities, Diversity, Equity, and Inclusion (DEI) programs as well as
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 75% of total revenues, with service charges accounting for another 16% and ancillary revenue
making up the remainder. Despite ongoing pandemic condition and restrictions, most of the City’s main revenue
sources performed well and above initial expectations. Next to the local transaction tax, Transient Occupancy Tax
ended the fiscal year at record levels, surpassing $10 million in annual revenue. This is indicative of the City gaining
from being a drive-to market and benefiting from the travel activity that followed the pandemic related restrictions.
Investment in tourism marketing and programs designed to bring people to San Luis Obispo paid dividends and
continue to experience strong lodging and retail activity.
Governmental Activities Program Expenses: Program expenses increased from the prior fiscal year, ending 2021-22
at $101 million. As mentioned in the Fiscal Year in Review section above, FY 2021-22 marked a transition year for
the City organization as it restored the work postponed by the pandemic and allowed the City to reinvest in its core
services and important Major City Goal efforts and strategic initiatives. Increases happened across all programs with
Revenues 2021-22 2020-21 Inc / (Dec) %
Charges for services 18,920,886$ 22,090,479$ (3,169,593)$ -14%
Operating grants and contributions 3,647,813 3,626,087 21,726 1%
Capital grants and contributions 1,531,157 7,093,611 (5,562,454) -78%
General Revenues:
Sales taxes (Including local transaction tax)51,419,561 32,847,453 18,572,108 57%
Property taxes 14,716,412 14,197,869 518,543 4%
Transient occupancy tax 10,650,762 6,960,035 3,690,727 53%
Utility users tax 5,338,325 5,225,979 112,346 2%
Property tax in lieu of VLF 5,994,592 5,660,661 333,931 6%
Other taxes and fees 5,800,333 5,578,944 221,389 4%
Investment earnings (1,638,993) 219,611 (1,858,604) -846%
Miscellaneous and other 1,213,401 1,366,458 (153,057) -11%
Total governmental revenues 117,594,249$ 104,867,187$ 12,727,062$ 12%
GOVERNMENTAL ACTIVITY CHANGE IN REVENUE
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Management’s Discussion and Analysis
the most significant ones seen in Community Development, General Government with new initiatives regarding DEI
and homelessness, and Public Safety with the new Emergency Management and Mobile Crisis Unit.
The following chart compares program fee revenues and expenses which is useful when reviewing the costs of various
governmental activities:
Financial Analysis of Governmental Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements. The following funds have been classified as either governmental or proprietary fund types.
Governmental Funds. The focus of the City’s governmental funds is on near-term inflows, outflows and balances of
spendable resources. Such information is useful in assessing the City’s financing requirements. In particular,
unassigned fund balance serves as a useful measure of a government’s net resources available for spending at the end
of the fiscal year.
As of June 30, 2022, the City’s governmental funds reported combined ending fund balances of $100.5
million or an increase of $10 million compared to the prior fiscal year. The total fund balance of the
governmental funds consists of the following:
o Non-spendable fund balance represents prepaid items. Approximately $100,000 was held in non-
spendable at fiscal year-end.
o Restricted fund balance of $34 million, including reserves for debt service or capital outlay, impact
fees programs, general government programs, housing and the net balance of the local transaction
tax that increased during the last quarter of the fiscal year once pandemic restrictions were lifted.
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Management’s Discussion and Analysis
o Committed fund balance amounted to $19.5 million accounting for the City’s reserve funds as
prescribed by its Fund Balance and Reserve policies.
o Assigned fund balance of $16.7 million 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
include contingency funds (20% minimum reserve) and funds to be used for Development
Services.as well as purchase orders and encumbrances that have been rolled over into fiscal year
2022-23 in accordance with the City’s budget policies. Fund balance has been assigned to an
additional discretionary payment to CalPERS, the newly established Section 115 Trust Fund, and
the contingency funds in the IT Replacement and Fleet funds amounting to $4.9 million.
o Unassigned fund balance of $22 million of which $13.7 million are in the City’s Capital Outlay
Fund for investments in the City’s expansive infrastructure. Some of the General Fund’s $8.3
million in unassigned fund balance was already appropriated for 2022-23 by the Council with the
year-end report4. Of the $8.3 million, $2.8 million was approved as carryover into the 2022-23
budget and $2 million was used to establish a Revenue Stabilization Reserve to help insulate the
City from large fluctuations in tax revenue. These actions left $3.3 million truly unassigned;
however, the five-year forecast relies on $2 million to remain in order to have a balanced five-year
budget outlook.
Major Governmental Funds. In the fiscal year 2021-22 the City maintained two major funds: the General Fund and
the Capital Outlay Fund. Changes in both are highlighted in the Financial Highlights section above.
Non-Major Governmental Funds. The City has numerous non-major governmental funds including the Debt Service
Fund and various Special Revenue Funds or Capital Projects Funds. 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,
2022, these funds had an aggregate fund balance of almost $46 million. Of this total, $34 million is restricted for
payment of debt service or specific future capital projects and related funding needs.
More information about the 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.
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, 2022 the City’s investment in capital assets for its governmental and business type activities
amounts increased to $490 million (net of accumulated depreciation).
The investment in capital assets includes things such as: open space, park improvements, buildings and associated
improvements, vehicles and equipment, streets, bikeways, water, wastewater, and storm drain systems.
4 Council Agenda Item 6a, October 4, 2022 and Resolution No. 11367
http://opengov.slocity.org/WebLink/DocView.aspx?id=164377&dbid=0&repo=CityClerk
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Major capital asset5 expenditures during the fiscal year included the following:
$37.7 million for the Water Resource Recovery Facility
Sewer lift stations: Airport, Buckley, Foothill, Calle Joaquin
$847,000 for Water Treatment Plant Energy Efficiency
Waterline improvements
Meadow Park Pathway Maintenance
Orcutt/Tank Farm roundabout construction
Parks & Recreation office rehabilitation
Railroad Safety Bridge/Trail Taft to Pepper
Parks and Recreation Interior Office Rehabilitation
Emerson Park Fitness Court
Long-Term Debt. At June 30, 2022, the City’s long-term debt had increased by $40.7 million and $142.7 million
outstanding. The increase is due to large debt finance projects in the Water and Sewer funds adding $46 million to the
business-type activities long-term debt. Within governmental activities, several loans were paid off, lowering the debt
burden by $1.3 million from the previous year.
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, 2022, 2% of the assessed valuation was $234 million6. As of June 30, 2022, the City did not have any general
obligation debt subject to the limit. Additional information about the City’s long-term debt can be found in Note 7 to
the basic financial statements.
5 Additional information on the City’s capital assets can be found in Note 5 on page 67 to the basic financial statements.
6 Based on the San Luis Obispo County Assessor’s 2021-22 Annual Valuation report.
Capital Assets (Net of Depreciation)
2021-22 2020-21 2021-22 2020-21 2021-22 2020-21
Nondepreciable capital assets 43,547,370$ 41,769,864$ 132,025,105$ 91,238,405$ 175,572,475$ 133,008,269$
Depreciable capital assets (net of
accumulated depreciation ) 169,708,981 162,999,121 145,011,649 147,232,029 314,720,630 310,231,150
Total Capital Assets 213,256,351$ 204,768,985$ 277,036,754$ 238,470,434$ 490,293,105$ 443,239,419$
Governmental Business-Type Total
Activities Activities
Long- Term Debt
2021-22 2020-21 2021-22 2020-21 2021-22 2020-21
Lease-revenue bonds 18,954,856$ 20,038,779$ 15,307,178$ 16,772,171$ 34,262,034$ 36,810,950$
Lease-purchase financing 390,420 734,673 - - 390,420 734,673
Claims & Liabilities - - - - - -
Installment sale agreement - - 4,257,343 4,919,407 4,257,343 4,919,407
Loans 139,961 232,111 99,918,648 56,229,546 100,058,609 56,461,657
Leases 125,003 - - 125,003 -
Compensated absences 3,104,605 3,016,523 526,111 613,247 3,630,716 3,629,770
22,714,845$ 24,022,086$ 120,009,280$ 78,534,371$ 142,724,125$ 102,556,457$
Governmental Business-Type Total
Activities Activities
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Pension Obligations and Outlook
With the development of the 2017-19 Financial Plan, it became apparent that the City was facing a structural budget
gap due to increases in pension cost. Starting in 2018-19, it implemented an aggressive three-year Fiscal Health
Response Plan to pay down the pension obligation. The plan included multiple one-time additional payments to
CalPERS to reduce the unfunded liability payment term from 30 to 20 years and the City made it’s first $4.2 additional
payment in April of 2019. At the onset of the pandemic, the City had successfully built-up sufficient fund balance in
its General Fund to make the second scheduled payment of $4.2 million to CalPERS for 2019-20. However, the City
Council decided to retain this funding to cover anticipated revenue shortfalls and to assist with economic recovery
efforts as the shut-down of the economy and shelter-at-home directives had just taken place and the future looked
precarious. With the prolonged duration of the pandemic and slow reopening of the economy, the third payment
scheduled in Spring of 2021 was also postponed. However, due to the prudent approach to its expenditures, the
investment in the recovery efforts for the community, and a strong revenue recovery in the 4th quarter, the City was
able to catch up on the earmarked payments to CalPERS and improve the City’s funding ratio to 75%.
In July 2021, CalPERS reported a 21.3% net return on investments for the 12-month period that ended June 30, 2021.
Under the Funding Risk Mitigation Policy, approved by the CalPERS Board of Administration in 2015, the double-
digit return triggered a reduction in the discount rate used to calculate employer and Public Employees’ Pension
Reform Act (PEPRA) members contributions. The discount rate, or assumed rate of return, has now dropped from 7%
to 6.8% ongoing. The lowering of the discount rate will increase both employee and employer normal cost and also
influence the unfunded liability. However, the double-digit gains should largely mitigate the impact of the lower
discount rate on the unfunded liability. The City will see the effects of the change to the discount rate with the 2023-
24 contributions.
2022-23 Budget Highlights
As adopted in June 2022, the second year of the Financial Plan provides investments into Council adopted strategic
initiatives and 74 established service programs while maintaining a carefully balanced budget. These ambitious work
plans continue to bring new challenges. Several of the challenges that the City addresses with the second-year budget
are some of the most pernicious issues facing society, but the solutions are neither easy nor inexpensive. In order to
make progress and achieve meaningful outcomes, the organization must stay focused and disciplined.
Workforce – the Great Reshuffle
First dubbed the “Great Resignation” is now more accurately labeled the “Great Reshuffle.” Globally, millions of
people are reconsidering and reconfiguring their careers and lives and leveraging the current labor market to find
opportunities and positions that fit with their desired lifestyle. The City is not immune from this phenomenon and has
seen record number of transitions.
The City of San Luis Obispo is committed to provide competitive compensation to continue to attract and retain
talented, qualified, and experienced employees who provide the high-quality public services the community requires
and expects. In order to do so, the City will need to prioritize competitive compensation.
To that end, the City Council received and filed the 2021 Benchmark Compensation Report for the San Luis Obispo
City Employees’ Association (SLOCEA) and Unrepresented Management and Confidential Bargaining Units on
February 1, 2022. Immediate action was taken to address compensation shortfalls found by the report on April 19,
2022 for confidential and unrepresented management. As of the writing of this message, the City has negotiated a
tentative agreement with labor partners on the potential wage and benefit increases identified in the benchmark study
in addition to cost of living agreements over three years.
29
Page 901 of 1069
Management’s Discussion and Analysis
The increases in General Fund revenue forecasts allowed Council to quickly address this need and the Council
approved negotiation parameters for equity adjustments and cost of living increases are now included in the 2022-23
Supplemental Budget. Moving forward, the City will need to be flexible and creative in order to attract and retain
well-qualified employees. More broadly, there is a need region-wide for a concerted strategy to attract and retain
employees and the absence of an effective strategy likely portends less than optimum growth and, in the case of the
City, struggles to meet service demands.
Investment into the Community
The City’s ongoing services have been developed over many years with the input from the community, resulting in
programs that provide the envisioned quality of life in San Luis Obispo. After years of “tightening the belt” to face
challenges and pension obligations head-on, the 2021-23 Financial Plan allowed the City to allocate much needed
resources back into ongoing services, programs and infrastructure and this effort continues with the Financial Plan
Supplement and 2022-23 budget.
Capital
While the City has made considerable progress on delivering capital projects, it is constrained by unprecedented
conditions that are affecting the entire nation. These obstacles include labor market shortages, significant construction
activity in our area due to Federal stimulus monies (increasing local competition for design, inspection, and
construction services), supply chain issues, and inflation.
While the construction phase of projects is often the community’s first view of the improvements that are being made,
it is really the result of months and sometimes years of planning, outreach, study, and design work that must be
completed prior to making visible progress on a project. In light of this, the City must ensure that operating resources
are right sized to deliver projects and continue meaningful progress for the community in the maintenance and
improvements to its infrastructure.
Long-Term Outlook and the Path Ahead
In many ways, the 2022-23 Supplemental Budget will mark a transition period for the City organization. The 2021-
23 Financial Plan restored the work postponed by the pandemic and allowed the City to re-invest in its core services
and important Major City Goal efforts and strategic initiatives. The next several years will concentrate on transforming
the City’s role as an attractive employer and finding a balance between the delivery of service and programs and
capital programs.
Due to the current economic and geo-political circumstances, uncertainty continues to be the one certainty in economic
forecasting. However, the updated long-term forecast considers many of the current trends and conditions and remains
balanced but this and future Councils will need to be mindful that expansion of programs or new programs will likely
require tradeoffs. The effect of uncertainty meant that for the 21-23 Financial Plan, the budget included $3.08 million
of one-time General Funds in order to balance the budget for needed programs such as DEI Grant Funding, Mobile
Crisis Unit and other services. Many of the services and programs likely require ongoing and dedicated funding to
maintain services levels to achieve the intended impact and funding these one-time expenses should be carefully
considered.
The City will need to remain agile and cautious as it moves through this challenging economic and fiscal climate. As
we embark on another year of this “strange routine”, we will need to remain focused and committed to making San
Luis Obispo the kind of resilient, dynamic, and sustainable community we want to live and thrive in and advance the
key initiatives and tasks the Council set forth in the City’s Major City Goals.
30
Page 902 of 1069
Management’s Discussion and Analysis
For information on the 2022-23 Financial Plan Supplement and the appropriated budget including the
allocation of the Local Revenue Measure, please visit:
https://www.slocity.org/government/department-directory/finance/city-budget
Utility Rates. The City adopts its water and sewer rates with the two-year Financial Plan and in accordance with
Proposition 218 requirements. As such, notifications were sent to all rate payers in April 2021 and the rates
subsequently adopted in a public hearing by the City Council.
Parking Rates. The Parking Fund, hit hardest by the pandemic restrictions, nevertheless began its recovery in 2021-
22 and in the first months of 2022-23 appears to be seeing pre-COVID19 demand. It continues to assist economic
recovery by offering free parking during holiday times to bring people to downtown.
In June 2023, the City Council also adopted fee increases for parking meters and structure parking in preparation for
the debt issuance to build the City’s cultural district garage.
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.
31
Page 903 of 1069
32
Page 904 of 1069
BASIC FINANCIAL STATEMENTS
33
Page 905 of 1069
34
Page 906 of 1069
Governmental
Activities
Business-Type
Activities Total
Assets
Current assets:
Cash and investments 99,356,588$ 105,676,349$ 205,032,937$
Taxes receivable 11,639,323 - 11,639,323
Accounts receivable 1,465,191 9,090,763 10,555,954
Accrued interest receivable 2,887,198 840,342 3,727,540
Prepaid items and other assets 651,218 - 651,218
Lease receivables 129,740 167,582 297,322
Loans receivable 12,327,527 2,274,934 14,602,461
Total current assets 128,456,785 118,049,970 246,506,755
Noncurrent assets:
Cash and investments held by fiscal agent 421,510 437,884 859,394
Investment in joint venture - 2,831,432 2,831,432
Lease receivables 1,121,310 36,971,566 38,092,876
Nondepreciable capital assets 43,547,370 132,025,105 175,572,475
Depreciable capital assets (net of accumulated
depreciation) 169,708,981 145,011,649 314,720,630
Total noncurrent assets 214,799,171 317,277,636 532,076,807
Total assets 343,255,956 435,327,606 778,583,562
Deferred Outflows of Resources
Other post-employment benefits related 1,391,750 687,662 2,079,412
Pension related 34,811,636 5,217,738 40,029,374
Unamortized loss on refunding of debt 198,522 175,405 373,927
Total deferred outflows of resources 36,401,908 6,080,805 42,482,713
Liabilities
Current liabilities:
Accounts payable 4,558,580 8,452,754 13,011,334
Accrued salaries 1,597,094 211,651 1,808,745
Unearned revenue 15,237,246 5,191,916 20,429,162
Interest payable 82,324 165,194 247,518
Other liabilities 212,617 - 212,617
Compensated absence - due within one year 2,111,566 157,833 2,269,399
Long-term debt - due within one year 1,519,356 3,213,830 4,733,186
Total current liabilities 25,318,783 17,393,178 42,711,961
Noncurrent liabilities:
Compensated absence - due in more than on year 993,039 368,278 1,361,317
Long-term debt - due in more than one year 18,090,884 116,269,339 134,360,223
Net OPEB liability 2,551,999 1,260,937 3,812,936
Net pension liability 102,337,477 22,227,511 124,564,988
Total noncurrent liabilities 123,973,399 140,126,065 264,099,464
Total liabilities 149,292,182 157,519,243 306,811,425
Deferred Inflows of Resources
Other post-employment benefits related 1,786,911 882,909 2,669,820
Pension related 49,056,568 5,649,701 54,706,269
Lease related 1,225,534 36,972,072 38,197,606
Total deferred inflows of resources 52,069,013 43,504,682 95,573,695
Net Position
Net investment in capital assets 193,984,593 157,728,990 351,713,583
Restricted
Debt service 2,540,255 437,884 2,978,139
Transportation projects 9,314,755 2,246,897 11,561,652
Affordable housing programs 13,526,749 - 13,526,749
Impact fee programs 9,669,643 - 9,669,643
Parkland development programs 3,256,800 - 3,256,800
Public art programs 798,038 - 798,038
Tourism programs 1,147,881 - 1,147,881
Subsequent year expenditures 864,848 - 864,848
Claims 651,218 - 651,218
Unrestricted (57,458,111) 79,970,715 22,512,604
Total net position 178,296,669$ 240,384,486$ 418,681,155$
City of San Luis Obispo, California
Statement of Net Position
June 30, 2022
The accompanying notes are an integral part of these financial statements.
35
Page 907 of 1069
Functions/Programs Expenses
Charges for
Services
Operating
Grants and
Contributions
Capital Grants
and
Contributions
Governmental activities:
Public safety 41,132,177$ 3,197,692$ 965,923$ -$
Transportation 10,395,516 636,874 2,220,788 453,162
Culture and recreation 12,407,720 4,046,439 497 -
Community development 15,506,092 10,509,106 151,581 -
General government 20,982,321 530,775 309,024 1,077,995
Interest on long-term debt 699,284 - - -
Total governmental activities 101,123,110 18,920,886 3,647,813 1,531,157
Business-type activities:
Water 20,892,863 29,894,129 1,848,593 -
Sewer 12,576,058 23,642,048 97,413 -
Parking 4,517,125 4,890,317 538 -
Transit 3,851,264 713,777 3,210,238 -
Total business-type activities 41,837,310 59,140,271 5,156,782 -
Total primary government 142,960,420$ 78,061,157$ 8,804,595$ 1,531,157$
General revenues and transfers:
General sales and use taxes
Transaction and use tax - Local Revenue Measure
Property tax (including real property transfer tax)
Transient occupancy tax (TOT)
Utility users tax
Property tax-in-lieu of vehicle license fees
Franchise taxes
Business tax
Cannabis 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, 2022
The accompanying notes are an integral part of these financial statements.
36
Page 908 of 1069
Governmental
Activities
Business-type
Activities Total
(36,968,562)$ -$ (36,968,562)$
(7,084,692) - (7,084,692)
(8,360,784) - (8,360,784)
(4,845,405) - (4,845,405)
(19,064,527) - (19,064,527)
(699,284) - (699,284)
(77,023,254) - (77,023,254)
- 10,849,859 10,849,859
- 11,163,403 11,163,403
- 373,730 373,730
- 72,751 72,751
- 22,459,743 22,459,743
(77,023,254) 22,459,743 (54,563,511)
22,247,303 - 22,247,303
29,172,258 - 29,172,258
14,716,412 - 14,716,412
10,650,762 - 10,650,762
5,338,325 - 5,338,325
5,994,592 - 5,994,592
1,978,295 - 1,978,295
2,823,163 - 2,823,163
998,875 - 998,875
93,919,985 - 93,919,985
(1,638,993) (1,207,118) (2,846,111)
1,213,401 - 1,213,401
- 585,101 585,101
1,685,314 (1,685,314) -
95,179,707 (2,307,331) 92,872,376
18,156,453 20,152,412 38,308,865
155,741,584 217,715,565 373,457,149
4,398,632 2,516,509 6,915,141
160,140,216 220,232,074 380,372,290
178,296,669$ 240,384,486$ 418,681,155$
Net Revenues (Expenses) and
Changes in Net Position
37
Page 909 of 1069
General
Capital Outlay
Fund
Other
Governmental
Funds
Total
Governmental
Funds
Assets
Cash and investment 34,540,875$ 14,807,005$ 50,008,708$ 99,356,588$
Taxes receivable 11,473,880 - 165,443 11,639,323
Accounts receivable 1,004,373 74,493 322,757 1,401,623
Other receivables 63,568 - - 63,568
Accrued interest receivable 210,686 - 2,676,512 2,887,198
Prepaid items 90,797 - - 90,797
Cash and investments held by fiscal agent - - 421,510 421,510
Loans receivable 240,637 - 12,086,889 12,327,526
Lease receivable 1,251,050 - - 1,251,050
Total assets 48,875,866$ 14,881,498$ 65,681,819$ 129,439,183$
Liabilities, Deferred Inflows of Resources
and Fund Balance
Liabilities:
Accounts payable 2,325,910$ 1,143,842$ 1,088,828$ 4,558,580$
Accrued liabilities 1,593,058 - 4,036 1,597,094
Unearned revenue 2,471,916 - 12,765,330 15,237,246
Other liabilities 212,617 - - 212,617
Total liabilities 6,603,501 1,143,842 13,858,194 21,605,537
Deferred Inflows of Resources:
Lease related 1,225,534 - - 1,225,534
Unavailable revenue 301,325 - 5,780,599 6,081,924
Total deferred inflows of resources 1,526,859 - 5,780,599 7,307,458
Fund balance:
Nonspendable 90,797 - 8,681 99,478
Restricted for:
Debt service - - 2,540,255 2,540,255
Transportation projects - - 8,051,050 8,051,050
Affordable housing programs - - 9,893,314 9,893,314
Impact fee programs - - 8,935,786 8,935,786
Parkland development programs - - 3,107,198 3,107,198
Public art programs - - 798,038 798,038
Tourism programs - - 1,147,881 1,147,881
Public safety program - - 864,848 864,848
Committed to:
General government programs 5,696,864 - - 5,696,864
Risk management 1,845,935 - - 1,845,935
Contingency fund 12,014,000 - - 12,014,000
Assigned to:
CalPERS pension payment 2,000,000 - - 2,000,000
Contingency fund - - 900,000 900,000
Establishment of Section 115 Trust 2,000,000 - - 2,000,000
Development services 530,657 - 9,795,975 10,326,632
SLO Repertory Theater Grant 3,940,000 - - 3,940,000
General government programs 4,270,529 - - 4,270,529
Subsequent year expenditures - 13,737,656 - 13,737,656
Unassigned 8,356,724 - - 8,356,724
Total fund balance 40,745,506 13,737,656 46,043,026 100,526,188
Total liabilities, deferred inflows of resources
and fund balance 48,875,866$ 14,881,498$ 65,681,819$ 129,439,183$
City of San Luis Obispo, California
Balance Sheet
Governmental Funds
June 30, 2022
The accompanying notes are an integral part of these financial statements.
38
Page 910 of 1069
Total fund balance - governmental funds 100,526,188$
Capital assets at estimated historical cost $ 330,212,574
Accumulated depreciation (116,956,223)
213,256,351
6,081,924
1,391,750
34,811,636
198,522
560,422
Lease revenue bonds 17,819,100$
Lease purchase financing 390,420
Compensated absences 3,104,605
Conservation loan 139,930
Bond premium 1,260,790
Accrued interest payable 82,324
(22,797,169)
Net pension liability is not a current financial obligation and, therefore, is not reported
in the governmental funds. (102,337,477)
Net OPEB liability is not a current financial obligation and, therefore, is not reported
in the governmental funds. (2,551,999)
(1,786,911)
(49,056,568)
Total net position - governmental activities 178,296,669$
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, 2022
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.
39
Page 911 of 1069
Total net change in fund balance - governmental funds 8,709,833$
Expenditures for capital outlay - governmental funds $ 14,932,670
Depreciation expense (6,602,831)
8,329,839
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:1,467,402
(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:1,694
85,448
Changes in actuarially determined claim liabilities for uninsured claims do not provide current
financial resources and are not reported in the governmental funds. 72,321
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:(88,082)
512,234
23,414,472
1,309,367
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 (25,045,115)
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 (601,282)
Total change in net position - governmental activities 18,156,453$
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, 2022
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.
40
Page 912 of 1069
General
Capital Outlay
Fund
Other
Governmental
Funds
Total
Governmental
Funds
Revenues:
22,247,303$ -$ -$ 22,247,303$
29,172,258 - - 29,172,258
14,716,412 - - 14,716,412
10,650,762 - - 10,650,762
5,338,325 - - 5,338,325
5,994,592 - - 5,994,592
1,978,295 - - 1,978,295
2,823,163 - - 2,823,163
998,875 - - 998,875
173,915 - - 173,915
(1,455,527) (2,903) (692,797) (2,151,227)
2,596,930 1,477,476 2,371,786 6,446,192
10,751,046 9,000 6,897,082 17,657,128
413,188 363,342 259,491 1,036,021
Total revenues 106,399,537 1,846,915 8,835,562 117,082,014
Expenditures:
Current:
General government 17,190,472 - 7,440 17,197,912
Public safety 39,656,509 - 264,699 39,921,208
Transportation 4,818,976 - 312,156 5,131,132
Leisure, cultural and social services 10,156,139 - 284,404 10,440,543
Community development 12,726,420 514,482 1,826,616 15,067,518
Debt service:
Principal - - 1,467,402 1,467,402
Interest and fiscal charges - - 774,747 774,747
Capital outlay:
Public safety 16,178 - 232,435 248,613
Transportation 976,123 8,165,271 4,512,455 13,653,849
Leisure, cultural and social services 170,729 3,126,097 636,637 3,933,463
Community development 17,672 583,643 - 601,315
General government 816,029 286,929 516,835 1,619,793
Total expenditures 86,545,247 12,676,422 10,835,826 110,057,495
Revenues over (under) expenditures 19,854,290 (10,829,507) (2,000,264) 7,024,519
City of San Luis Obispo, California
Statements of Revenues, Expenditures, and
Changes in Fund Balances
Governmental Funds
For the Fiscal Year Ended June 30, 2022
Sales and use tax - general
Transaction and use tax - Local
Revenue Measure
Property tax (including real property
transfer tax)
Transient occupancy tax
Utility users tax
Property tax in lieu of VLF
Franchise taxes
Business tax
Cannabis Tax
Miscellaneous
Fines, forfeitures and penalties
Use of money and property
Subventions and grants
Charges for services
The accompanying notes are an integral part of these financial statements.
41
Page 913 of 1069
Page 2
General
Capital Outlay
Fund
Other
Governmental
Funds
Total
Governmental
Funds
Other Financing Sources (Uses):
Transfers in 3,942,248$ 22,098,191$ 9,232,840$ 35,273,279$
Transfers out (30,416,749) (644,267) (2,526,949) (33,587,965)
Total other financing sources (uses)(26,474,501) 21,453,924 6,705,891 1,685,314
Net change in fund balance (6,620,211) 10,624,417 4,705,627 8,709,833
Fund balance, beginning of year 47,118,071 3,113,239 41,177,283 91,408,593
Prior year restatements 247,646 - 160,116 407,762
Fund balance, beginning of year, as restated 47,365,717 3,113,239 41,337,399 91,816,355
Fund balance, end of year 40,745,506$ 13,737,656$ 46,043,026$ 100,526,188$
City of San Luis Obispo, California
Statements of Revenues, Expenditures, and
Changes in Fund Balances
Governmental Funds
For the Fiscal Year Ended June 30, 2022
The accompanying notes are an integral part of these financial statements.
42
Page 914 of 1069
Water Sewer Parking Transit Totals
Assets
Current assets:
Cash and investment 33,073,104$ 52,727,181$ 14,128,393$ 5,747,671$ 105,676,349$
Accounts receivable 4,398,755 2,785,425 29,280 1,877,303 9,090,763
Lease Receivables - - 167,582 - 167,582
Accrued interest receivable 245,438 190,379 393,894 10,631 840,342
Total current assets 37,717,297 55,702,985 14,719,149 7,635,605 115,775,036
Noncurrent assets:
433,565 278 4,041 - 437,884
Investment in joint venture 2,831,432 - - - 2,831,432
Loan Receivables 1,476,189 798,745 - - 2,274,934
Lease Receivables - - 36,971,566 - 36,971,566
Capital assets:
Land 945,926 2,176,114 5,947,455 - 9,069,495
Infrastructure 108,647,893 93,826,165 28,282,818 110,972 230,867,848
Buildings and improvements 19,139,492 5,074,388 1,101,218 5,212,278 30,527,376
Equipment 6,118,066 5,976,085 1,823,586 9,021,099 22,938,836
Construction in progress 17,303,911 103,110,782 2,457,859 83,058 122,955,610
Total capital assets 152,155,288 210,163,534 39,612,936 14,427,407 416,359,165
Less accumulated depreciation (63,371,214) (51,023,333) (14,999,323) (9,928,541) (139,322,411)
Capital assets, net of
accumulated depreciation 88,784,074 159,140,201 24,613,613 4,498,866 277,036,754
Total noncurrent assets 93,525,260 159,939,224 61,589,220 4,498,866 319,552,570
Total assets 131,242,557 215,642,209 76,308,369 12,134,471 435,327,606
Deferred Outflows of Resources
Pension related 2,383,634 2,162,794 526,173 145,137 5,217,738
290,042 301,984 77,327 18,309 687,662
70,786 6,739 97,880 - 175,405
2,744,462 2,471,517 701,380 163,446 6,080,805
City of San Luis Obispo
Statement of Net Position
Business-Type Activities - Enterprise Funds
June 30, 2022
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.
43
Page 915 of 1069
Page 2
Water Sewer Parking Transit Totals
Liabilities
Current liabilities:
Accounts payable 1,131,492$ 6,544,127$ 306,689$ 470,446$ 8,452,754$
Accrued liabilities 89,113 75,376 29,662 17,500 211,651
Compensated absences 81,979 63,356 9,486 3,012 157,833
Unearned revenue - 190,752 700,000 4,301,164 5,191,916
Interest payable 64,865 32,915 67,414 - 165,194
Current portion of long-term debt 1,624,674 1,022,058 567,098 - 3,213,830
Total current liabilities 2,992,123 7,928,584 1,680,349 4,792,122 17,393,178
Noncurrent liabilities:
Compensated absences 191,285 147,831 22,133 7,029 368,278
Lease revenue bonds 9,527,139 293,094 4,172,799 - 13,993,032
Installment sale agreement - 3,569,862 - - 3,569,862
State loan/note payable 11,583,434 83,954,380 3,168,631 - 98,706,445
Net pension liability 9,830,803 9,394,348 2,446,700 555,660 22,227,511
591,852 508,157 130,120 30,808 1,260,937
Total noncurrent liabilities 31,724,513 97,867,672 9,940,383 593,497 140,126,065
Total liabilities 34,716,636 105,796,256 11,620,732 5,385,619 157,519,243
Deferred Inflows of Resources
Pension related 2,550,380 2,353,872 602,738 142,711 5,649,701
365,502 392,960 100,623 23,824 882,909
Lease related - - 36,972,072 - 36,972,072
2,915,882 2,746,832 37,675,433 166,535 43,504,682
Net Position
Net investment in capital assets 66,119,613 70,307,546 16,802,965 4,498,866 157,728,990
Restricted:
Debt service 433,565 278 4,041 - 437,884
Transportation projects - - - 2,246,897 2,246,897
Unrestricted 29,801,323 39,262,814 10,906,578 - 79,970,715
Total net position 96,354,501$ 109,570,638$ 27,713,584$ 6,745,763$ 240,384,486$
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, 2022
Enterprise Funds
Net other post-employment benefits
liability
The accompanying notes are an integral part of these financial statements.
44
Page 916 of 1069
Water Sewer Parking Transit Total
Operating revenues:
Charges for sales and service 24,511,658$ 19,825,026$ 3,943,018$ 710,457$ 48,990,159$
Impact fees 5,160,020 3,685,008 - - 8,845,028
Fines and forfeitures - 1,425 928,909 - 930,334
Other revenues 222,451 130,589 18,390 3,320 374,750
Total operating revenues 29,894,129 23,642,048 4,890,317 713,777 59,140,271
Operating expenses:
Salaries and benefits 3,374,350 3,444,226 1,128,657 229,282 8,176,515
Supplies and maintenance 1,499,588 1,896,979 545,224 353,857 4,295,648
Contract services 10,700,008 1,574,248 1,008,835 2,666,079 15,949,170
General government 1,722,409 1,712,752 869,887 226,183 4,531,231
Depreciation 2,863,988 3,559,830 688,790 375,863 7,488,471
Total operating expenses 20,160,343 12,188,035 4,241,393 3,851,264 40,441,035
Operating income (loss) 9,733,786 11,454,013 648,924 (3,137,487) 18,699,236
Nonoperating revenues (expenses)
Use of money and property (714,713) (1,024,551) 666,894 (134,748) (1,207,118)
Grants 1,848,593 97,413 538 3,210,238 5,156,782
Interest expense and fiscal charges (732,520) (388,023) (275,732) - (1,396,275)
Income (loss) from investment
in joint venture 585,101 - - - 585,101
Total nonoperating revenues
(expenses) 986,461 (1,315,161) 391,700 3,075,490 3,138,490
Income (loss) before transfers
and capital contributions 10,720,247 10,138,852 1,040,624 (61,997) 21,837,726
Capital Contributions
Transfers out (794,769) (655,312) (235,233) - (1,685,314)
Total transfers (794,769) (655,312) (235,233) - (1,685,314)
Change in net position 9,925,478 9,483,540 805,391 (61,997) 20,152,412
Net position, beginning of year 84,800,287 99,201,571 26,905,947 6,807,760 217,715,565
Prior year restatements 1,628,736 885,527 2,246 - 2,516,509
Net position, beginning of year,
as restated 86,429,023 100,087,098 26,908,193 6,807,760 220,232,074
Net position, end of year 96,354,501$ 109,570,638$ 27,713,584$ 6,745,763$ 240,384,486$
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, 2022
The accompanying notes are an integral part of these financial statements.
45
Page 917 of 1069
Water Sewer Parking Transit Total
Cash flows from operating activities:
Cash received from customers 29,124,164$ 23,929,298$ 4,894,662$ 2,710,830$ 60,658,954$
(12,057,282) (3,839,076) (1,433,120) (3,000,375) (20,329,853)
(1,722,409) (1,712,752) (869,887) (226,183) (4,531,231)
(5,390,029) (5,432,177) (1,618,671) (339,057) (12,779,934)
Net cash provided by (used in)
operating activities 9,954,444 12,945,293 972,984 (854,785) 23,017,936
Operating grants received 1,848,593 288,165 700,538 3,210,238 6,047,534
Transfers to other funds (794,769) (655,312) (235,233) - (1,685,314)
1,053,824 (367,147) 465,305 3,210,238 4,362,220
Cash flows from capital and related
financing activities:
(4,955,323) (40,437,426) (581,164) (80,878) (46,054,791)
Principal paid on debt financing (1,574,854) (991,973) (550,486) - (3,117,313)
Interest paid on debt financing (873,993) (392,496) (304,792) - (1,571,281)
Proceeds from issuance of debt 2,275,261 42,592,565 - - 44,867,826
Net cash used in capital and
related financing activities (5,128,909) 770,670 (1,436,442) (80,878) (5,875,559)
Cash flows from investing activities:
Use of money and property (755,835) (1,042,658) 139,980 (136,978) (1,795,491)
Net cash provided by
investing activities (755,835) (1,042,658) 139,980 (136,978) (1,795,491)
5,123,524 12,306,158 141,827 2,137,597 19,709,106
28,383,145 40,421,301 13,990,607 3,610,074 86,405,127
33,506,669$ 52,727,459$ 14,132,434$ 5,747,671$ 106,114,233$
Enterprise Funds
City of San Luis Obispo, California
Statement of Cash Flows
Business-Type Activities - Enterprise Funds
For the Fiscal Year Ended June 30, 2022
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, as restated
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.
46
Page 918 of 1069
City of San Luis Obispo, California
Statement of Cash Flows
Business-Type Activities - Enterprise Funds
For the Fiscal Year Ended June 30, 2022
Page 2
Water Sewer Parking Transit Total
Operating income (loss) 9,733,786$ 11,454,013$ 648,924$ (3,137,487)$ 18,699,236$
Depreciation 2,863,988 3,559,830 688,790 375,863 7,488,471
Accounts receivable (769,965) 287,250 4,345 931,620 453,250
Accounts payable 142,314 (367,849) 120,939 19,561 (85,035)
Unearned revenue - - - 1,065,433 1,065,433
(166,288) (195,391) (31,007) (1,095) (393,781)
(1,705,210) (1,636,347) (419,007) (99,208) (3,859,772)
(144,181) (156,213) (40,000) (9,472) (349,866)
Net cash provided by (used in)
operating activities 9,954,444$ 12,945,293$ 972,984$ (854,785)$ 23,017,936$
Reconciliation of cash and investments to the balance sheet:
Cash and cash equivalents 33,073,104$ 52,727,181$ 14,128,393$ 5,747,671$ 105,676,349$
433,565 278 4,041 - 437,884
Total cash and investments 33,506,669$ 52,727,459$ 14,132,434$ 5,747,671$ 106,114,233$
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.
47
Page 919 of 1069
Custodial Funds
Assets
Current assets:
Cash and investment 8,729,369$
Accounts receivable 16,549
Accrued interest receivable 10,789
Capital assets, net of accumulated depreciation 789,639
Total assets 9,546,346
Liabilities
Accounts payable 385,905
Compensated absence 54,086
Accrued Salaries 10,887
Other liabilities 2,000
Total liabilities 452,878
NET POSITION
Restricted for
Individuals, organizations, and other governments 9,093,468
Total Net Position 9,093,468$
City of San Luis Obispo, California
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2022
The accompanying notes are an integral part of these financial statements.
48
Page 920 of 1069
Custodial Funds
ADDITIONS:
Assessment revenue 152,848$
Charges for services 1,014,126
Charges for public programming 39,951
Contribution from developers 1,704,858
Other revenue 1,647,991
Use of money and property (137,980)
Total additions 4,421,794
DEDUCTIONS:
Administration expenses 258,616
Contractual services 1,347,589
Materials and supplies 89,444
Public programming 65,750
Use of developer deposits 416,978
Depreciation 63,459
Total deductions 2,241,836
Change in net position 2,179,958
NET POSITION:
Beginning of year, as restated 6,913,510
End of year 9,093,468$
City of San Luis Obispo
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the year ended June 30, 2022
The accompanying notes are an integral part of these financial statements.
49
Page 921 of 1069
50
Page 922 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
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 1
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 8
Investments 9
Note 3: Property Taxes 13
Note 4: Loan Receivable 14
Note 5: Capital Assets 15
Note 6: Leases 16
Note 7: Long Term Debt 18
Summary of Long-Term Debt 18
Governmental Activities Summary: 19
Revenue Bonds 19
Lease-Purchase Financing 20
2014 Energy Sources Conservation State Loan 21
Business-Type Activities Summary: 21
Revenue Bonds 21
Loans 23
Installment Sale Agreements 24
Note 8: Pension Plans 24
Agent-Multiple Employer Plan 25
General Information about the Pension Plan 25
Net Pension Liability 26
Changes in the Net Pension Liability 28
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions 29
Cost-Sharing Employer Plan 29
General Information about the Pension Plan 29
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions 31
51
Page 923 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
Table of Contents
June 30, 2022
Page 2
Page
Payable to the Pension Plan 34
Note 9: Other Post-Employment Benefits (OPEB) 35
General Information about OPEB 35
Net OPEB Liability 35
Changes in the Net OPEB Liability 37
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB 38
Payable to the OPEB Plan 39
Note 10: Deferred Compensation Plan 39
Note 11: Interfund Transactions 39
Note 12: Joint Ventures, Jointly Governed Organizations and Operating Agreements 40
Whale Rock Commission 40
San Luis Obispo Regional Transit Authority 41
San Luis Obispo Council of Governments 41
Nacimiento Water Supply Project 41
Note 13: Risk Management 42
California Joint Powers Insurance Authority 42
Self-Insurance Programs of the Authority 43
Adequacy of Protection 43
Self-Insurance 43
Note 14: Commitments and Contingencies 44
Litigation 44
Grant Awards 44
Regional Transit Authority Pension Expense 44
Note 15: Construction and Other Significant Commitments 45
Note 16: Fund Balance Deficiency 45
Note 17: Subsequent Events 45
Note 18: New Accounting Standards 45
Accounting Standards Adopted 45
New Accounting Standards 46
Note 19: Prior Period Adjustments 47
52
Page 924 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
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) and the San Luis
Obispo Public Financing Authority (the Authority) as blended component units in accordance with GASB standards. Both provide
financing for the construction and acquisition of City facilities and consist of members of the City Council. Activities of both units
are accounted for in the applicable City governmental funds 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 or San Luis Obispo Public
Financing Authority.
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.
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.
53
Page 925 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 2
Note 1: Summary of Significant Accounting Policies (Continued)
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.
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.
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.
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.
54
Page 926 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 3
Note 1: Summary of Significant Accounting Policies (Continued)
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 eight Custodial Funds, which are used to account for funds held by the City as an agent for Whale Rock
Commission, Jack House Committee, County Task Force, individual donations, Boysen Ranch, San Luis Ranch Community
Facilities District and San Luis Coastal Unified School District and San Luis Obispo County Public Access, Inc. Public Access
Television. Custodial funds are accounted for using the accrual basis of accounting. See supplementary information for a complete
list of Custodial 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.
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.
55
Page 927 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 4
Note 1: Summary of Significant Accounting Policies (Continued)
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 assets 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 assets by the City that is
applicable to a future reporting period. The City has deferred inflows of resources related to pensions and OPEB.
Compensated Absences. City employees are granted vacation and sick leave in varying amounts. In the event of termination,
employees are reimbursed for the total value of their accumulated vacation days. Employees are reimbursed for 10% to 30% of the
accumulated sick leave only upon retirement and only after at least 10 years of service. In selected cases, similar accumulated sick
leave reimbursements may be available after 20 years of continuous employment. An employee's estate is reimbursed for 30% of
the employee's accumulated sick leave in the event of death while in the City's employ. A liability for compensated absences is
accrued in the government-wide and proprietary funds financial statements.
Long-Term Obligations. In the government-wide financial statements, and proprietary funds in the fund financial statements, long-
term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities,
or proprietary funds statement of net position. Bond premiums and discounts and deferred amounts on refunding are deferred and
amortized over the life of the bonds. Deferred amounts on refunding are reported separately from assets and liabilities in the
Statement of Net Position. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are
expensed as incurred.
In the fund financial statements, governmental funds recognize bond premiums and discounts, as well as bond issuance costs, during
the period they originate. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances
are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether
or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
Assets Years
Infrastructure 20-100
Buildings and structures 20-50
Improvements other than buildings 10-100
Equipment 3-21
56
Page 928 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
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
General fund is the governmental fund used to liquidate the pension liabilities of the governmental activities.
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. General fund is the governmental fund used to liquidate the OPEB liabilities of the
governmental activities.
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, 2021
Measurement Date June 30, 2021
Measurement Period July 1, 2020 to June 30, 2021
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.
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.
57
Page 929 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 6
Note 1: Summary of Significant Accounting Policies (Continued)
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.
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.
58
Page 930 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 7
Note 1: Summary of Significant Accounting Policies (Continued)
Budget Process. The City Manager is responsible for preparing the budget and submitting it to the Council for approval.
Although specific steps will vary from year to year, the following is an overview of the general approach used under the
City's two-year budgetary process:
First Year. The Financial Plan process begins with City Council goal setting to determine major objectives to be
accomplished over the next two years. As part of this process, community groups, interested individuals, and
Council advisory bodies present their recommendations to the Council. Goals approved by the City Council are
incorporated into the budget instructions issued to the operating departments, who are responsible for submitting
initial budget proposals. After these proposals are comprehensively reviewed and a detailed financial forecast is
prepared, the City Manager issues the Preliminary Financial Plan for public comment. A series of study sessions
and public hearings are then held leading to Council adoption of the Financial Plan and Budget prior to the start
of the fiscal year.
Second Year. Before the beginning of the second year of the two-year cycle, the Council reviews the progress
during the first year, 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, 2022 was the first year of the 2021-23 two-year cycle.
Mid-Year Reviews. The Council formally reviews the City's financial condition and amends appropriations, if
necessary, each February.
Status Reports. Financial reports are prepared monthly to monitor the City's fiscal condition; more formal reports
are posted to the City's website on a quarterly basis. Additionally, more focused reports are issued on key revenues,
such as sales tax, transient occupancy tax and quarterly reports on investments. The status of major goals and
program objectives, including Construction in Progress (CIP) projects, are also formally reported to the Council
on an ongoing basis.
Accounting and Budget Administration. Budgets are prepared for each fund in accordance with its respective basis of accounting
consistent with U.S. Generally Accepted Accounting Principles (GAAP). All governmental funds have legally adopted budgets
annually. While budgets are prepared for the City's capital projects funds, the capital projects generally span more than one year and
are effectively controlled at the project level; accordingly, budgetary comparisons are not presented for capital projects funds in the
accompanying other supplementary information following the basic financial statements.
As provided under the City Charter, the Council may amend or supplement the budget at any time after its adoption by majority vote
of the Council members. The legal level of budgetary control – the level at which expenditures are not to exceed appropriations – is
the fund level.
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 2022 several supplemental budget
appropriations were made to reflect the inclusion of costs related to prior year encumbered amounts as well as the rollover of unspent
capital appropriations. Additional appropriations were added to fund a prepayment made to the retirement system as well as to
provide additional resources for the Community Development Department to ensure that it maintained a development review process
that complied with State law 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.
59
Page 931 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 8
Note 1: Summary of Significant Accounting Policies (Continued)
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 custodial 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, 2022, 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.
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.
60
Page 932 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 9
Note 2: Cash and Investments (Continued)
Investments
The City is authorized by its investment policy, in accordance with Section 53601 of the California Government Code, to invest in
the following instruments:
Treasury bills and notes
Government Sponsored Enterprises
Commercial paper
Repurchase agreements
Bankers' acceptances
Corporate medium-term notes
Negotiable certificates of deposit
Collateralized bank deposits
Money market mutual funds
State Local Agency Investment Fund (LAIF)
Investments are stated at fair value, based on quoted market prices, in accordance with GASB standards. Investment income has
been adjusted to reflect any unrealized gains and losses resulting from the fair value adjustment annually. While U.S. generally
accepted accounting principles require recording any increases or decreases in the market value of the City’s investments, it is the
City’s policy to make all investment decisions based on holding them through maturity, and therefore the City may not realize the
gains or losses resulting from the fair value adjustment. As such, changes in market value generally do not affect the long-term
results of the portfolio, but they can result in significant fluctuations from year-to-year.
The fair value of the City’s position in the State LAIF pool is the same as the value of the pool shares. The State LAIF pool credit
quality is unrated. LAIF is overseen by the Local Agency Investment Advisory Board, which consists of five members, in accordance
with State statute. The State Treasurer’s Office audits the fund annually.
At June 30, 2022, cash and investments consisted of the following:
Fair
Value
Percent of
Portfolio
Cash and cash equivalents 43,770,453$ 20.39%
Investments:
State Local Agency Investment Fund 68,226,726 31.79%
U.S. Treasury Bond / Note 56,725,859 26.43%
Federal Agency Bond / Note 22,151,948 10.32%
Corporate Note 13,692,137 6.38%
Municipal Bond/Note 2,081,845 0.97%
Asset-Backed Securities 1,688,832 0.79%
Negotiable Certificates of Deposit 3,354,299 1.56%
Non-Negotiable Certificates of Deposit 2,025,090 0.94%
Money Market Funds 904,511 0.42%
Total investments 170,851,247 79.61%
Total cash and investments 214,621,700$ 100.00%
61
Page 933 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 10
Note 2: Cash and Investments (Continued)
At June 30, 2022, 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.
The following is a summary of the fair value measurements as of June 30, 2022:
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 $45,787,008 at June 30, 2022 and were insured or collateralized with
securities held by the pledging financial institution's trust department or agent in the City's name.
Governmental
Funds
Business-Type
Funds
Fiduciar y
Funds Total
Cash and investments 99,356,588$ 105,676,349$ 8,729,369$ 213,762,306$
Cash and investments held by fiscal agents 421,510 437,884 - 859,394
Total cash and investments 99,778,098$ 106,114,233$ 8,729,369$ 214,621,700$
Government-Wide Statement of Net
Position
Fair Value
Investments by fair value hierarchy
U.S. Treasury Bond / Note 56,725,859$ -$ 56,725,859$ -$
Federal Agency Bond / Note 22,151,948 - 22,151,948 -
Corporate Note 13,692,137 - 13,692,137 -
Municipal Bond/Note 2,081,845 - 2,081,845 -
Asset-Backed Securities 1,688,832 - 1,688,832 -
Negotiable Certificates of Deposit 3,354,299 - 3,354,299 -
Total investments by fair value hierarchy 99,694,920 -$ 99,694,920$ -$
Investments not subject to fair value hierarchy
State Local Agency Investment Fund 68,226,726
Non-Negotiable Certificates of Deposit 2,025,090
Money Market Funds 904,511
Total investments not subject to fair value hierarchy 71,156,327
Total investments measured at fair value 170,851,247$
Fair Value Measurements Using
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
62
Page 934 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 11
Note 2: Cash and Investments (Continued)
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.
Interest Rate Risk. This is the risk that the market value of securities in the portfolio will fall due to changes in general interest rates.
In accordance with its policies in the Investment Management Plan, the City mitigates interest rate risk by:
Structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby
avoiding the need to sell securities on the open market before maturity.
Investing operating funds primarily in shorter-term securities.
The City’s investment policy also includes portfolio maturity targets. A minimum of 20% of the portfolio will be invested in
securities maturing in one year or less. Up to 80% of the portfolio can be invested in securities with a maturity over one year, with
no more than 10% of the portfolio invested in securities with a maturity over five years.
Maturities using the segmented time distribution method for those investments requiring this disclosure are as follows:
Investments held by fiscal agents are structured with maturity dates that correspond to the payment of final debt service of the
respective bond indenture.
Credit Risk. This is the risk of loss due to the failure of the security issuer or backer. The City’s policies to mitigate credit risk
include:
Limiting investments to the safest types of securities. As noted above, the California Government Code limits the investment
vehicles available to local agencies. The credit risk of these securities is measured by the assignment of a rating by a
nationally recognized statistical rating organization. The table below presents the rating for each investment type as
provided by Standard & Poor’s except as noted.
Pre-qualifying the financial institutions, broker/dealers, intermediaries and advisors with which the City will do business.
Fair Value
Less Than One
Month
One Month to
One Year
One to Five
Years
Over Five
Years
State Local Agency Investment Fund 68,226,726$ -$ 68,226,726$ -$ -$
U.S. Treasury Bond / Note 56,725,859 - 15,296,323 41,429,536 -
Federal Agency Bond / Note 22,151,948 - 4,529,113 17,622,835 -
Corporate Note 13,692,137 - 4,083,726 9,608,411 -
Municipal Bond/Note 2,081,845 - - 2,081,845 -
Asset-Backed Securities 1,688,832 - 38,679 1,650,153 -
Negotiable Certificates of Deposit 3,354,299 - 3,354,299 - -
Non-Negotiable Certificates of Deposit 2,025,090 - 2,025,090 - -
Money Market Funds 904,511 904,511 - - -
Total maturities 170,851,247$ 904,511$ 97,553,956$ 72,392,780$ -$
Cash in banks and on hand 43,770,453
214,621,700$
63
Page 935 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 12
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, 2022:
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:
No more than 5% of the City’s portfolio (exclusive of government agency issues or LAIF) shall be placed with any financial
institution.
No more than 25% of the City’s portfolio shall be invested in collateralized certificates of deposit issued by financial
institutions.
Certificates of deposit (negotiable and collateralized) placed by the City shall not constitute more than 15% of the total
assets of the institution; and negotiable certificates of deposit will only be placed with institutions with total assets in excess
of $200 million and that maintain a ratio of equity to total assets of at least 5%.
Foreign Currency Risk. The City does not hold any investment that is based on foreign currency exchange rates.
Type of Investment Rating Total
Federal Agency Bonds / Notes AA+22,151,948$
Corporate Notes AA 3,772,200
A+3,716,448
A 3,160,474
A-2,519,382
BBB+523,633
Total Corporate Notes 13,692,137
Municipal Bond/Note AAA 584,228
AA+291,627
AA 227,666
AA-978,324
Asset-Backed Securities AAA 1,688,832
Negotiable Certificates of Deposit A-1+1,144,808
A-1 2,209,491
Total Negotiable Certificates of Deposit 3,354,299
Not Applicable:
U.S. Treasury Bonds / Notes 56,725,859
Not Rated:
State Local Agency Investment Fund 68,226,726
Non-Negotiable Certificates of Deposit 2,025,090
Money Market Mutual Funds 904,511
Total Investments 170,851,247$
64
Page 936 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 13
Note 3: Property Taxes
Property taxes in the State of California (State) are administered for all local agencies at the county level, and consist of secured,
unsecured and utility tax rolls. The following is a summary of major policies and practices relating to property taxes:
Property Valuation. Valuations are established by the Assessor of the County of San Luis Obispo (County) for the secured
and unsecured property tax rolls; the utility property tax roll is valued by the State Board of Equalization. Under the
provisions of Article XIIIA of the State Constitution (Proposition 13 adopted by the voters on June 6, 1978), properties are
assessed at 100% of full value. Proposition 13 also modified the value of taxable real property for fiscal 1979 by rolling
back values to fiscal 1976 levels. From this base of assessment, subsequent annual increases in valuation are limited to a
maximum of 2%. However, increases to full value are allowed for property improvements or upon change in ownership.
Personal property is excluded from these limitations and is subject to annual reappraisal.
Tax Levies. Under the provisions of Proposition 13, the 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.
Tax Levy Dates. All lien dates attach annually on January 1 preceding the fiscal year for which the taxes are levied. The
fiscal year begins July 1 and ends June 30 of the following year. Taxes are levied on both real and unsecured personal
property as it exists at that time. The lien against real estate as well as the tax on personal property is not relieved by
subsequent renewal or change in ownership.
Tax Collections. The County Treasurer/Tax Collector is responsible for all property tax collections. Taxes and assessments
on the secured and utility rolls, which constitute a lien against the property, may be paid in two installments: the first
installment is due on November 1 of the fiscal year and is delinquent if not paid by December 10; and the second installment
is due on March 1 of the fiscal year and is delinquent if not paid by April 10. Unsecured personal property taxes do not
constitute a lien against real property. However, if the taxes become delinquent the lien is attached against anything the
individual owns, which could include real property. Payment must be made in one installment, which is delinquent if not
paid by August 31 of the fiscal year. Significant penalties are imposed by the County for late payments.
Teeter Plan. In 1993-94 the City elected to receive property tax revenue in accordance with the alternative method of
distribution prescribed by Sections 4701-4717 of the California Revenue and Taxation Code, which is commonly known
as the “Teeter Plan” whereby the County remits 100% of taxes levied without regard to delinquencies. The County then
pursues collection, retaining any delinquent taxes and related penalties and interest.
Tax Levy Apportionments. Due to the nature of the 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.
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, 2022 have been accrued since they will be collected within 60 days subsequent to year-end.
65
Page 937 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 14
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, 2022, the Fund has 17 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 $8.5 million; 4 loans for $669,063 are forgivable if certain criteria are met. The Fund has
secured more than 450 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, 2022, the Fund had two outstanding loans utilizing this program with a
principal balance of $130,000. These loans are provided for a term of 30 years with an annual interest rate of 3%.
C. Down Payment Assistance - The Fund has provided down payment assistance loans to individuals purchasing affordable
housing units. As of June 30, 2022, the Affordable Housing Fund had eight outstanding down payment assistance loans
with a principal balance of $381,155. These loans are provided for a term of 30 years with an annual interest rate of 3%.
D. Impact Fee Deferral Loan – The City has provided certain affordable housing developments with loans equal to the
amount of certain impact fees. These loans are reflected in the respective impact fee funds. As of June 30, 2022, the total
principal outstanding was $4,487,674. These loans are provided for a term of 55 years with an annual interest rate of 3%.
E. Community Development Block Grant (CDBG) Fund Loans – The City has provided loans from the City’s allocation
of CDBG funding for certain affordable housing developments. As of June 30, 2022, the CDBG Fund had $1,112,944
principal outstanding on the loans. The loans have terms of 30 years and annual interest rates of 3% to 4%.
Total Balance
Description Loan Receivable Interest Receivable June 30, 2022
Governmental Funds:
Affordable Housing Loan 8,490,688$ 1,608,237$ 10,098,925$
BEGIN Homeownership Loan 130,000 48,775 178,775
Down Payment Assistance 381,155 69,328 450,483
CDBG 1,112,944 648,481 1,761,425
Impact Fee Loan 2,212,740 175,711 2,388,451
Total governmental funds 12,327,527 2,550,532 14,878,059
Enterprise Funds:
Impact Fee Loan 2,274,934 278,913 2,553,847
Total enterprise funds 2,274,934 278,913 2,553,847
Total Primary Government 14,602,461$ 2,829,445$ 17,431,906$
66
Page 938 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 15
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.
Capital assets activity for the fiscal year ended June 30, 2022 was as follows:
Balance Balance
June 30, 2021 Additions Deletions Transfers Adjustments June 30, 2022
Governmental activities:
Capital assets not being depreciated:
Land 32,263,736$ -$ -$ -$ -$ 32,263,736$
Construction in progress 8,859,498 14,980,282 (16,990) (13,185,786) - 10,637,004
Public art 646,630 - - - - 646,630
Total capital assets not -
being depreciated 41,769,864 14,980,282 (16,990) (13,185,786) - 43,547,370
Capital assets being depreciated:
Infrastructure 201,307,747 - - 4,402,519 - 205,710,266
Accumulated Depreciation (70,327,468) (3,340,085) - - (763,910) (74,431,463)
Buildings and improvements 41,071,359 - - 7,433,755 - 48,505,114
Accumulated Depreciation (21,770,258) (1,606,739) - - 806,458 (22,570,539)
Equipment 30,980,665 - - 1,349,512 - 32,330,177
Accumulated Depreciation (18,262,924) (1,618,942) - - (73,170) (19,955,036)
Capital assets being amortized:
Right of use - Lease asset - 157,527 - - - 157,527
Accumulated Amortization - (37,065) - - - (37,065)
Total capital assets being
depreciated/amortized, net 162,999,121 (6,445,304) - 13,185,786 (30,622) 169,708,981
Governmental activities,
capital assets, net 204,768,985$ 8,534,978$ (16,990)$ -$ (30,622)$ 213,256,351$
Business-type activities:
Capital assets not being depreciated:
Land 9,069,495$ -$ -$ -$ -$ 9,069,495$
Construction in progress 82,168,910 46,158,398 (93,545) (5,278,153) - 122,955,610
Total capital assets not
being depreciated 91,238,405 46,158,398 (93,545) (5,278,153) - 132,025,105
Capital assets being depreciated:
Infrastructure 227,144,816 - - 4,770,092 (1,047,060) 230,867,848
Accumulated Depreciation (102,024,535) (5,578,768) - - (473,101) (108,076,404)
Buildings and improvements 30,156,529 (7,303) 50,000 328,150 30,527,376
Accumulated Depreciation (15,225,339) (601,014) - - (134,991) (15,961,344)
Equipment 21,761,714 - - 458,061 719,061 22,938,836
Accumulated Depreciation (14,581,156) (1,308,689) - - 605,182 (15,284,663)
Total capital assets being
depreciated, net 147,232,029 (7,488,471) (7,303) 5,278,153 (2,759) 145,011,649
Business-type activities,
capital assets, net 238,470,434 38,669,927 (100,848) - (2,759) 277,036,754
Total Government-wide 443,239,419$ 47,204,905$ (117,838)$ -$ (33,381)$ 490,293,105$
67
Page 939 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 16
Note 5: Capital Assets (Continued)
Depreciation expense was charged to functions/programs as follows:
Note 6: Leases
Pursuant to GASB 87, the City has the following lease receivables:
James Town
On 11/5/2013, the City entered into a lease with James Town Premier SL Retail, L.P. or commercial retail space located at the Marsh
Street parking structure. Under the lease, the lessee pays the City $11,310 per month from 2/1/2014 – 1/31/2015 and with 3% increase
each year from 2/1/2015 – 1/31/2024. The lease term has one 5-year extension option. The lease receivable is measured as the
present value of the future minimum rent payments expected to be received during the lease term at a discount rate of 3.5%, which
was the 5-year US Treasury rate in effect when the lease was entered into. In fiscal year 2022, the City recognized $165,652 of lease
revenue and $11,983 of interest revenue under the lease.
Crown Castle
On 9/19/2017, the City entered into a lease with Crown Castle NG West LLC to utilize City utility poles for communications
equipment. Under the lease, the initial annual pole fee shall consist of $1,000 for each city pole which Crown Castle’s facilities are
to be installed pursuant to this agreement and is payable to city upon execution and delivery of this agreement and prior to Crown
Castle installing any portion of the network or any facilities. The term ends on 9/1/2047 with 3% increase annually. The lease
receivable is measured as the present value of the future minimum rent payments expected to be received during the lease term at a
discount rate of 3.5%, which was the 5-year US Treasury rate in effect when the lease was entered into. In fiscal year 2022, the City
recognized $8,564 of lease revenue and $5,743 of interest revenue under the lease.
Garden Street
On 8/1/2015, the City entered into a lease with Garden Street SLO Partners, L.P for the right to use land formerly a surface parking
lot in order to build a hotel. Under the lease, the lessee pays the City $171,600 or the “Base Annual Rent Floor”, which is the amount
of Landlord’s annual net revenue from the operation of Parking Lot 2 on the premises in the period of twelve months ended on the
last day of the last full calendar month ended two months prior to the rent commencement date. The amount of base rent shall be
increased as of the first day of each rent adjustment period commencing with the rent adjustment period that begins on the first day
of the third lease year and on the first day of each subsequent rent adjustment period. The lease receivable is measured as the present
value of the future minimum rent payments expected to be received during the lease term at a discount rate of 1%, which is the 5-
year US Treasury rate in effect when the lease was entered into. In fiscal year 2022, the City recognized $394,729 of lease revenue
and $367,683 of interest revenue under the lease.
Governmental activities:
Public safety 531,827$
Transportation 2,501,557
Culture and recreation 242,933
Community development 111,618
General government 3,214,896
Total depreciation - governmental activities 6,602,831
Business-type activities:
Water 2,863,988
Sewer 3,559,830
Parking 688,790
Transit 375,863
Total depreciation - business-type activities 7,488,471
Total Government-wide 14,091,302$
68
Page 940 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 17
Note 6: Leases (Continued)
Laguana AT&T
On 9/16/2009, the City entered into a lease with New Cingular Wireless PCS, LLC to locate a cellular communication site at the
Laguna Lake Golf Course. Under the lease, the lessee pays the City $26,000 annually and thereafter, be multiplied by the CPI
Adjuster or 3%, whichever is greater that ends on 9/30/2029. The lease receivable is measured as the present value of the future
minimum rent payments expected to be received during the lease term at a discount rate of 2%, which is the 5-year US Treasury rate
in effect when the lease was entered into. In fiscal year 2022, the City recognized $40,785 of lease revenue and $5,994 of interest
revenue under the lease.
Laguna SBA
On 2/1/2005, the City entered into a lease with SBA 2012 TC Assets, LLC to locate a cellular communication site at the Laguna
Lake Golf Course. Under the lease, the lessee pays the City $25,000 annually and thereafter, be multiplied by the CPI Adjuster or
3%, whichever is greater, that ends in 2025. The lease receivable is measured as the present value of the future minimum rent
payments expected to be received during the lease term at a discount rate of 3%, which is the 5-year US Treasury rate in effect when
the lease was entered into. In fiscal year 2022, the City recognized $45,734 of lease revenue and $3,680 of interest revenue under
the lease.
Santa Rosa St
On 5/13/2011, the City entered into a lease with New Cingular Wireless PCS, LLC to locate a cellular communication site at the
Santa Rosa Park. Under the lease, the lessee pays the City $26,000 annually and thereafter, be multiplied by the CPI Adjuster or 3%,
whichever is greater, that ends on 5/13/2031. The lease receivable is measured as the present value of the future minimum rent
payments expected to be received during the lease term at a discount rate of 2%, which is the 5-year US Treasury rate in effect when
the lease was entered into. In fiscal year 2022, the City recognized $73,432 of lease revenue and $14,114 of interest revenue under
the lease.
The future revenue payments as of June 30, 2022 are as follows:
Year Ending
June 30, Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest
2023 167,582$ 6,335$ 1,197$ 5,717$ -$ 368,693$ 31,013$ 5,392$ 38,545$ 2,537$ 58,985$ 12,969$ 297,322$ 401,643$
2024 102,280 917 1,448 5,682 - 369,703 32,744 4,750 40,968 1,312 62,299 11,806 239,739 394,170
2025 - - 1,698 5,607 - 368,693 34,530 4,047 43,499 4 65,810 10,509 145,537 388,860
2026 - - 1,994 5,537 - 368,693 36,412 3,319 - - 69,426 9,175 107,832 386,724
2027 - - 2,292 5,457 - 368,693 38,354 2,552 - - 73,183 7,768 113,829 384,470
2028-2032 - - 16,544 25,702 - 1,845,484 127,475 2,647 - - 333,279 15,460 477,298 1,889,293
2033-2037 - - 26,937 21,739 - 1,844,474 - - - - - - 26,937 1,866,213
2038-2042 - - 40,470 15,651 - 1,844,474 - - - - - - 40,470 1,860,125
2043-2047 - - 57,878 6,799 - 1,844,474 - - - - - - 57,878 1,851,273
2048-2052 - - 14,070 1 - 1,845,484 - - - - - - 14,070 1,845,485
2053-2057 - - - - - 1,844,474 - - - - - - - 1,844,474
2058-2062 - - - - 161,351 1,842,865 - - - - - - 161,351 1,842,865
2063-2067 - - - - 986,479 1,807,993 - - - - - - 986,479 1,807,993
2068-2072 - - - - 1,353,075 1,748,798 - - - - - - 1,353,075 1,748,798
2073-2077 - - - - 1,732,118 1,669,339 - - - - - - 1,732,118 1,669,339
2078-2082 - - - - 2,161,637 1,569,604 - - - - - - 2,161,637 1,569,604
2083-2087 - - - - 2,695,176 1,445,748 - - - - - - 2,695,176 1,445,748
2088-2092 - - - - 3,248,775 1,295,791 - - - - - - 3,248,775 1,295,791
2093-2097 - - - - 3,869,169 1,113,664 - - - - - - 3,869,169 1,113,664
2098-2102 - - - - 4,634,199 897,046 - - - - - - 4,634,199 897,046
2103-2107 - - - - 5,426,984 643,007 - - - - - - 5,426,984 643,007
2108-2112 - - - - 6,313,092 344,758 - - - - - - 6,313,092 344,758
2113-2115 - - - - 4,287,231 43,275 - - - - - - 4,287,231 43,275
Total 269,862$ 7,252$ 164,528$ 97,892$ 36,869,286$ 27,335,227$ 300,528$ 22,707$ 123,012$ 3,853$ 662,982$ 67,687$ 38,390,198$ 27,534,618$
TotalJames Town Crown Castle Garden St Laguna ATT Laguna SBA Santa Rosa St
69
Page 941 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 18
Note 7: 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, 2022:
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) and the San Luis Obispo Public Financing Authority (Authority) have
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/Authority have been eliminated from these financial statements.
Balance Balance Due Within
June 30, 2021 Additions Deductions June 30, 2022 One Year
Governmental activities:
2012 Lease revenue refunding bonds 2,970,000$ -$ (270,000)$ 2,700,000$ 285,000$
2014 Lease revenue bonds 6,635,000 - (175,000) 6,460,000 185,000
2018 Lease revenue refunding bonds 9,212,575 - (553,475) 8,659,100 569,850
Add: Unamortized bond premium 1,221,204 - (85,448) 1,135,756 -
Total revenue bonds 20,038,779 - (1,083,923) 18,954,856 1,039,850
Lease liability - 157,527 (32,524) 125,003 32,257
Lease-purchase financing 734,673 - (344,253) 390,420 354,175
Conservation Loan 232,111 - (92,150) 139,961 93,074
Total long-term debt,
governmental activities 21,005,563$ 157,527$ (1,552,850)$ 19,610,240$ 1,519,356$
Compensated absences 3,016,523$ 3,121,720$ (3,033,638)$ 3,104,605$ 2,111,566$
Business-type activities:
2012 Water revenue refunding bonds 1,080,000 - (530,000) 550,000 550,000
2018 Lease revenue refunding bonds 4,852,425 - (291,525) 4,560,900 300,150
2018 Water revenue refunding bonds 8,785,000 - (455,000) 8,330,000 470,000
Add: Unamortized bond premium 2,054,746 - (188,468) 1,866,278 -
Total revenue bonds 16,772,171 - (1,464,993) 15,307,178 1,320,150
Loans 56,229,546 44,867,826 (1,178,724) 99,918,648 1,212,201
Installment sale agreements 4,919,407 - (662,064) 4,257,343 681,479
Total long-term debt,
business-type activities 77,921,124 44,867,826 (3,305,781) 119,483,169 3,213,830
Compensated absences 613,247 449,589 (536,725) 526,111 157,833
Total Government-wide 102,556,457$ 48,596,662$ (8,428,994)$ 142,724,125$ 7,002,585$
70
Page 942 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 19
Note 7: 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, 2022, the principal amount outstanding on the bonds was $2,700,000. 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, 2022.
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, 2022, the unamortized premium was $142,771.
2014 Lease Revenue Bonds. In 2014, the Authority 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, 2022, the principal amount outstanding
on the bonds was $6,460,000.
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, 2022, the unamortized premium was $126,857.
2018 Lease Revenue Refunding Bonds. In 2018, the Authority 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, 2022, the principal amount outstanding that pertains to governmental activities was $8,659,100
of the total $13,220,000 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, 2022, the unamortized premium for governmental activities was $866,128.
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).
Lease Liability (Cuesta Peak)
On October 23, 2003, the City entered into a 22-year Lease Agreement as lessee of a site for City radio equipment. The City pays
the landlord $16,857.96 annually with a 4% increase. An initial lease liability was recorded in the amount of $157,527. As of June
30, 2022, the value of the lease liability is $125,003. The City is required to make monthly payments of $670 and increase annually
by 5% in October of each year. The lease has an interest rate of 3.04%. The value of the right to use asset as of June 30, 2022 of
$157,527 with accumulated amortization of $37,065 is included in the intangible assets on the capital assets activities table found in
Note 5 above.
71
Page 943 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 20
Note 7: Long Term Debt (Continued)
At June 30, 2022, the aggregate maturities of the aforementioned governmental activities revenue bonds were as follows:
At June 30, 2022, the aggregate maturities of the aforementioned governmental lease liability was as follows:
Lease-Purchase Financing
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 $90,732 accumulated depreciation included in equipment at June 30, 2021. 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, 2022, the principal amount outstanding is $178,389.
Motorola Radios. In 2020, the City obtained lease-purchase financing in the amount of $636,240 to purchase Motorola radios and
equipment for public safety. The gross amount of assets under this lease is $636,240 with $212,080 accumulated depreciation as it
was placed in service at year end. The lease agreement bears an interest rate of 2.66% due in annual installments of $217,671
beginning June 1, 2021 through June 1, 2023. At June 30, 2022, the principal amount outstanding was $212,031.
For the Year Ending June 30, Principal Interest Total
2023 1,039,850$ 715,750$ 1,754,365$
2024 1,091,050 674,056 1,755,600
2025 1,133,975 630,214 1,765,106
2026 1,178,450 578,566 1,764,189
2027 1,021,775 524,744 1,546,519
2028-2032 4,992,400 1,941,690 6,934,090
2033-2037 4,144,450 1,008,511 5,152,961
2038-2042 2,032,150 428,645 2,460,795
2043-2045 1,185,000 72,300 1,257,300
17,819,100$ 6,574,476$ 24,393,576$
For the Year Ending June 30, Principal Interest Total
2023 32,257$ 3,637$ 35,894$
2024 34,901 2,411 37,312
2025 37,694 1,074 38,768
2026 20,151 2 20,153
125,003$ 7,124$ 132,127$
72
Page 944 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 21
Note 7: Long Term Debt (Continued)
At June 30, 2022, 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,
2022, the principal amount outstanding is $139,961.
At June 30, 2022, 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, 2022, the principal amount outstanding on the bonds was $550,000. 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, 2022.
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, 2022, the unamortized premium was $96,234.
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, 2022, principal and interest paid, and total customer net revenues
were $573,200 and $6,723,041, respectively.
For the Year Ending June 30, Principal Interes t Total
2023 354,175$ 3,986$ 358,161$
2024 36,245 289 36,534
390,420$ 4,275$ 394,695$
For the Year Ending June 30, Principal Interest Total
2023 93,074$ 1,168$ 94,242$
2024 46,887 235 47,122
139,961$ 1,403$ 141,364$
73
Page 945 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 22
Note 7: Long Term Debt (Continued)
2018 Lease Revenue Refunding Bonds. In 2018, the Authority 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, 2022, the principal amount outstanding that pertains to business-type activities was $4,560,900
of the total $13,220,000 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, 2022, the unamortized premium that pertains to business-type activities was
$458,944.
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, 2022, the principal amount outstanding on the bonds was $8,330,000.
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, 2022, principal and interest paid, and total customer net revenues
were $889,700 and $6,723,041, 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, 2022, the unamortized premium was
$1,311,100.
At June 30, 2022, the aggregate maturities of the business-type revenue bonds were as follows:
For the Year Ending June 30, Principal Interest Total
2023 1,320,150$ 633,238$ 1,953,388
2024 808,950 575,732 1,384,682
2025 846,025 538,424 1,384,449
2026 886,550 496,122 1,382,672
2027 813,225 451,794 1,265,019
2028-2032 4,737,600 1,604,980 6,342,580
2033-2037 3,845,550 406,180 4,251,730
2038-2039 182,850 9,542 192,392
13,440,900$ 4,716,012$ 18,156,912$
74
Page 946 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 23
Note 7: 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 Marsh 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, 2022, the principal amount outstanding on the loan was
$3,470,379.
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, 2022, the
principal amount outstanding on the loan was $6,626,416.
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, 2022, principal and interest paid, and total customer net revenues
were $532,596 and $10,304,284, 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, 2022, the City had partially drawn
down the loan and had an outstanding principal balance of $77,650,275.
2020 CIEDB State Loan. In 2020, the City obtained a note in the amount of $14,300,000 for improvements to the City’s Water
Treatment Plant to provide enhanced reliability and energy and operational efficiencies. The note bears an interest rate of 2.5% and
a term of 20 years. At June 30, 2022, the City had partially drawn down the loan and had an outstanding principal balance of
$12,171,578.
At June 30, 2022, the aggregate maturities of the aforementioned business-type loans were as follows:
For the Year Ending June 30, Principal Interest Total
2023 1,212,201$ 641,190$ 1,853,391$
2024 3,211,641 1,967,763 5,179,404
2025 3,280,590 1,895,817 5,176,407
2026 3,352,693 1,822,214 5,174,907
2027 3,426,480 1,746,888 5,173,368
2028-2032 18,301,173 7,541,107 25,842,280
2033-2037 18,253,321 5,414,014 23,667,335
2038-2042 16,310,457 3,624,403 19,934,860
2043-2047 14,615,022 2,236,669 16,851,691
2048-2052 17,955,069 2,270,809 20,225,879
99,918,648$ 29,160,874$ 129,079,522$
75
Page 947 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 24
Note 7: Long Term Debt (Continued)
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, 2022, the principal amount outstanding on the loan was $350,000.
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, 2022,
the principal amount outstanding on the loan was $3,907,343.
At June 30, 2022, the aggregate maturities of the aforementioned business-type installment sale agreements were as follows:
There are a number of limitations and restrictions contained in the various bond indentures. City management believes that the City
has complied with the indenture requirements. Security for revenue bonds is paid from receipts or net income and amounts in funds
or accounts established under bond indentures.
Note 8: Pension Plans
The City contributes to the California Public Employees’ Retirement System (CalPERS) for its employees. The City participates in
one agent multiple-employer plan for its miscellaneous employees (Miscellaneous Plan) and one cost-sharing multiple-employer
plan for its safety employees (Safety Plan). The Miscellaneous Plan is described in the first section of the footnote under Agent-
Multiple Employer Plan and the Safety Plan follows and is described in the second section of the footnote under Cost-Sharing
Employer Plan. A summary of the government-wide balances for all Plans at June 30, 2022 are as follows:
For the Year Ending June 30, Principal Interest Total
2023 681,479$ 117,026$ 798,505$
2024 706,312 94,628 800,940
2025 541,575 75,364 616,939
2026 557,280 59,431 616,711
2027 573,441 43,035 616,476
2028-2029 1,197,256 34,968 1,232,224
4,257,343$ 424,452$ 4,681,795$
Net Pension Deferred Outflows Deferred Inflows Pension
Liability of Resources of Resources Expense
Miscellaneous Plan 65,993,658$ 16,642,794$ 16,789,383$ 4,429,353$
Safety Plan 58,571,330 23,386,580 37,916,886 22,198,982
Total Government-Wide 124,564,988$ 40,029,374$ 54,706,269$ 26,628,335$
76
Page 948 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 25
Note 8: Pension Plans (Continued)
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.
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, 2022, 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.
Prior to On or after On or after
Hire date December 6, 2012 December 6, 2012 January 1, 2013
Benefit formula 2.7% @ 55 2% @ 60 2% @ 62
Benefit vesting schedule 5 years service 5 years service 5 years service
Benefit payments monthly for life monthly for life monthly for life
Retirement age 50 - 55 50 - 63 52 - 67
Monthly benefits, as a % of
eligible compensation 2.0% to 2.7% 1.092% to 2.418% 1.0% to 2.5%
Required employee contribution rates 7.520%7.520%7.00%
Required employer contribution rates 9.950%9.950%9.950%
Required unfunded accrued liability payment - (1)- (1)6,819,439$
(1) -Combined with on or after January 1, 2013
Tiers within the Miscellaneous Plan
77
Page 949 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 26
Note 8: Pension Plans (Continued)
Employees Covered. As of the measurement date June 30, 2021, 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. During the measurement
period, the City contributions totaled $8,246,755.
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, 2021, using an annual actuarial valuation as of June 30,
2020 rolled forward to June 30, 2021 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, 2020 actuarial valuation was determined using the following
actuarial assumptions:
Miscellaneous Plan
Inactive employees or beneficiaries
currently receiving benefits 418
Inactive employees entitled to but
not yet receiving benefits 422
Active employees 319
Total 1,159
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Inflation
Salary Increase
Mortality (1)
Post Retirement Benefit Increase
7.15%
Entry-Age Normal Cost Method
June 30, 2021
Miscellaneous Plan
June 30, 2020
(1) The mortatily table used was developed based on CalPERS-specific data. The table includes 15 years of
mortality improvements using the Society of Actuaries Scale 90% of scale MP 2016. For more details on this table,
please refer to the December 2017 experience study report (based on CalPERS demographic data from 1997 to
2015) that can be found on the CalPERS website.
Contract COLA up to 2.50% until Purchasing Power Protection
Allowance Floor on Purchasing Power applies, 2.50% thereafter
Derived using CalPERS' Membership Data for all Funds
Varies by Entry Age and Service
2.50%
78
Page 950 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 27
Note 8: Pension Plans (Continued)
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.
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.
Assumed
Asset Real Return Real Return
Asset Class (a)Allocation Years 1 - 10 (b)Years 11+ (c)
Global Equity 50.0%4.80%5.98%
Fixed Income 28.0%1.00%2.62%
Inflation Assets -0.77%1.81%
Private Equity 8.0%6.30%7.23%
Real Assets 13.0%3.75%4.93%
Liquidity 1.0%--0.92%
(a) In the CalPERS's ACFR, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-
term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities
(b) An expected inflation of 2.0% used for this period
(c) An expected inflation of 2.92% used for this period
Miscellaneous Plan
79
Page 951 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 28
Note 8: 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, 2020 237,568,349$ 148,289,275$ 89,279,074$
Changes during the year:
Service cost 3,939,785 - 3,939,785
Interest on the total pension liability 16,589,680 - 16,589,680
Differences between expected and
actual experience (755,414) - (755,414)
Contribution - employer - 8,246,755 (8,246,755)
Contribution - employee - 2,056,274 (2,056,274)
Net investment income - 32,904,570 (32,904,570)
Benefit payments, including refunds
of employee contributions (13,518,666) (13,518,666) -
Administrative expense - (148,132) 148,132
Net changes 6,255,385 29,540,801 (23,285,416)
Balance at June 30, 2021 243,823,734$ 177,830,076$ 65,993,658$
Miscellaneous Plan
1% Decrease 6.15%
Net Pension Liability 96,151,600$
Current Discount Rate 7.15%
Net Pension Liability 65,993,658$
1% Increase 8.15%
Net Pension Liability 40,892,112$
80
Page 952 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 29
Note 8: Pension Plans (Continued)
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
For the year ended June 30, 2022, the City’s pension expense for the Miscellaneous Plan was $4,429,353. At June 30, 2022, 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 $15,923,929 will be recognized
as a reduction of the net pension liability in the year ended June 30, 2023. Other amounts reported as deferred outflows of resources
and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Payable to the Pension Plan
At June 30, 2022, the City reported a payable of $0 for the outstanding amount of contributions to the pension plan required for the
year ended June 30, 2022.
Cost-Sharing Employer Plan
General Information about the Pension Plan
Plan Descriptions. As noted above, the City contributes to CalPERS for a defined benefit pension plan for all qualified permanent
and probationary employees. CalPERS acts as a common investment and administrative agent for its participating member
employers. Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available
reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information
that can be found on the CalPERS website.
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to
measurement date 15,923,929$ -$
Changes in assumptions
Differences between expected and
actual experiences 718,865 (511,732)
Net differences between projected and
actual earnings on plan investments - (16,277,651)
Total 16,642,794$ (16,789,383)$
Miscellaneous Plan
Measurement Period
Ended June 30 Amount
2022 (3,649,106)$
2023 (4,018,154)
2024 (3,915,060)
2025 (4,488,198)
(16,070,518)$
Miscellaneous Plan
81
Page 953 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 30
Note 8: Pension Plans (Continued)
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, 2022, are summarized as follows:
The Safety Tier 1 is closed to new entrants.
Police Fire Police Fire
Prior to Prior to On or after On or after
Hire date December 6, 2012 August 30, 2012 December 6, 2012 August 30, 2012
Benefit formula 3.0% @ 50 3.0% @ 50 2.0% @ 50 3.0% @ 55
Benefit vesting schedule 5 years service 5 years service 5 years service 5 years service
Benefit payments monthly for life monthly for life monthly for life monthly for life
Retirement age 50 - 55 50 - 55 50-55 50 - 55
Monthly benefits, as a % of eligible compensation 3.00%3.00% 2.0% to 2.7% 2.4% to 3%
Required employee contribution rates 8.990%8.990%8.950%8.990%
Required employer contribution rates 25.590%25.590%19.880%22.470%
Required unfunded accrued liability payment 6,029,105$ -$ (1)16,086$ 33,223$
Police PEPRA Fire PEPRA
On or after On or after
Hire date January 1, 2013 January 1, 2013
Benefit formula 2.7% @ 57 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service
Benefit payments monthly for life monthly for life
Retirement age 50-57 50-57
Monthly benefits, as a % of eligible compensation 2.0% to 2.7% 2.0% to 2.7%
Required employee contribution rates 13.750%13.750%
Required employer contribution rates 13.980%13.980%
Required unfunded accrued liability payment 31,825$ 3,197$
(1) - Combined with Police Tier 1
Safety Tier 1 Safety Tier 2
82
Page 954 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 31
Note 8: Pension Plans (Continued)
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, 2022, the contributions recognized as part of pension expense were $8,069,806.
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
As of June 30, 2022, the City reported a net pension liability for its proportionate share of the Plan’s net pension liability of
$58,571,330.
The City’s net pension liability for the Plan is measured as the proportionate share of the net pension liability. The net pension
liability of the Plan is measured as of June 30, 2021, and the total pension liability for the Plan used to calculate the net pension
liability was determined by an actuarial valuation as of June 30, 2020 rolled forward to June 30, 2021 using standard update
procedures. The City’s 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, 2020 and 2021 was as follows:
For the year ended June 30, 2022, the City recognized pension expense of $22,198,982 for the Safety Plan. At June 30, 2022, the
City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Proportionate Share
Percentage share at 6/30/2020 0.72250%
Percentage share at 6/30/2021 1.08299%
Change - Increase/(Decrease) 0.36049%
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 12,756,585$ -$
Changes in assumptions -
Differences between expected and actual experiences 10,006,862
Differences between projected and actual investment -
earnings - 34,861,200
Net Difference between employer's contributions and
proprtionate chare of contributions 604,494 729,122
Change in employer's proportion 18,639 2,326,564
Total 23,386,580$ 37,916,886$
Safety Plan
83
Page 955 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 32
Note 8: Pension Plans (Continued)
Pension contributions subsequent to the measurement date of $12,756,585 are reported as deferred outflows of resources and will
be recognized as a reduction of the net pension liability in the year ended June 30, 2023. Other amounts reported as deferred outflows
of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Actuarial Assumptions. The total pension liabilities in the June 30, 2020 actuarial valuations for the Safety Plan was determined
using the following actuarial assumptions:
Discount Rate. The discount rate used to measure the total pension liability was 7.15% for the Plan. To determine whether the
municipal bond rate should be used in the calculation of a discount rate for the Plan, CalPERS stress-tested plans that would most
likely result in a discount rate that would be different from the actuarially assumed discount rate. Based in the testing, none of the
tested plans run out of assets. Therefore, the current 7.15 percent discount rate is adequate, and the use of the municipal bond rate
calculation is not necessary. The long-term expected discount rate of 7.15 percent will be applied to all plans in the Public Employees
Retirement Fund (PERF). The stress test results are presented in a detailed report that can be obtained from the CalPERS website.
The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-
estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are
developed for each major asset class.
Measurement Period
Ended June 30 Amount
2023 (4,365,560)$
2024 (5,682,875)
2025 (7,645,141)
2026 (9,593,315)
(27,286,891)$
Safety Plan
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Inflation
Salary Increases
Post Retirement Benefit Increase
Mortality (1)
Varies by Entry Age and Service
Contract COLA up to 2.50% until Purchasing Power
Protection Allowance Floor on Purchasing Power applies
Derived using CalPERS' membership data for all funds
(1) The mortatily table used was developed based on CalPERS-specific data. The table includes 15 years of
mortality improvements using the Society of Actuaries Scale 90% of scale MP 2016. For more details on this table,
please refer to the December 2017 experience study report (based on CalPERS demographic data from 1997 to
2015) that can be found on the CalPERS website.
7.15%
2.50%
Safet y Plan
June 30, 2020
June 30, 2021
Entry-Age Normal Cost Method
84
Page 956 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 33
Note 8: Pension Plans (Continued)
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return
expectations as well as the expected pension fund (PERF) cash flows. Taking into account historical returns of all the Public
Employees Retirement Funds’ asset classes (which includes the agent plan and two cost-sharing plans or PERF A, B, and C funds),
expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11-60 years) using a
building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was
calculated for each PERF fund. The expected rate of return was set by calculating the single equivalent expected return that arrived
at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected
rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of
one percent.
The table below reflects the long-term expected real rate of return by asset class. The rate of return was calculated using the capital
market assumptions applied to determine the discount rate and asset allocation. These rates of return are net of administrative
expenses.
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate. The following presents the City’s
proportionate share of the net pension liability, calculated using the discount rate for the Plans as well as what the City’s proportionate
share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage
point higher than the current rate:
Assumed
Asset Real Return Real Return
Asset Class (a)Allocation Years 1 - 10 (b)Years 11+ (c)
Global Equity 50.0% 4.80% 5.98%
Fixed Income 28.0% 1.00% 2.62%
Inflation Assets -0.77% 1.81%
Private Equity 8.0%6.30% 7.23%
Real Assets 13.0% 3.75% 4.93%
Liquidity 1.0%--0.92%
(a) In the CalPERS's ACFR, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-
term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities
(b) An expected inflation of 2.0% used for this period
(c) An expected inflation of 2.92% used for this period
Safety Plan
1% Decrease 6.15%
Net Pension Liability 88,201,347$
Current Discount Rate 7.15%
Net Pension Liability 58,571,330$
1% Increase 8.15%
Net Pension Liability 34,233,930$
85
Page 957 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 34
Note 8: 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, 2022, the City reported a payable of $0 for the outstanding amount of contributions to the pension plan required for the
year ended June 30, 2022
Defined Contribution Pension Plan
The City makes bi-weekly contributions to a 401a retirement plan (Plan) for each department head. The current contribution on
behalf of each Participant equals 1% of base earnings up to the maximum allowable by law. In addition, each Participant may
contribute up to 14% of earnings to the Plan. Prior to August 2018, non-department head management employees also participated
in the Plan and received a 1% employer contribution.
Employees are fully vested in the City’s contributions (and interest allocated to the employee’s account) at all times. The Plan is
administered by Public Agency Retirement Services (PARS). The Plan assets are held in trust for the exclusive benefit of the
Participants or their Beneficiaries. The City has the right at any time to terminate the Plan by resolution of the City Council.
During the fiscal year, the City contributed $18,542 to the Plan and Participants contributed $118,507. There were no Plan
forfeitures. As of June 30, 2022, the City had $5,337 payable to the Plan.
The City makes bi-weekly contributions to 401a retirement plans (Appointed Officials Plans) for the City Manager and City
Attorney.
Employees are fully vested in the City’s contributions (and interest allocated to the employee’s account) at all times. The Appointed
Officials Plans are administered by Mission Square Retirement. The Plan assets are held in trust for the exclusive benefit of the
Participants or their Beneficiaries. The City has the right at any time to terminate the Plan by resolution of the City Council.
During the fiscal year, the City contributed $25,372 to the Appointed Officials Plans. There were no Plan forfeitures. As of June 30,
2022, the City had $1,039 payable to the Plan.
In the year 2022, The City evaluated the requirements of GASB Statement No. 97, Certain Component Unit Criteria, and Accounting
and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans and determined that plan didn’t meet
the criteria to be reported as a fiduciary activity, as required by the above mentioned GASB Statements.
86
Page 958 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 35
Note 9: 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 $143 per month per retiree in calendar year 2021 and $149
per month per retiree in calendar year 2022. 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 retiree 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.
Employees Covered. At June 30, 2021, 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 measurement
period, the City’s contributions totaled $921,000.
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, 2021 using an actuarial valuation as of June 30, 2021. The principal assumptions
and methods used to determine the net liability are described below.
OPEB Plan
Inactive employees or beneficiaries
currently receiving benefits 196
Inactive employees entitled to but
not yet receiving benefit payments 211
Active employees 418
Total 825
87
Page 959 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 36
Note 9: Other Post-Employment Benefits (OPEB) (Continued)
Change in Assumptions. See the note below for the change in assumptions for the measurement date June 30, 2021.
Discount Rate. The discount rate used to measure the total OPEB liability was 6.25% 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 6.25% discount rate is adequate, and the use of the municipal bond rate
calculation is not necessary. The long term expected discount rate of 6.25% 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.
Actuarial Valuation Date June 30, 2021
Measurement Date June 30, 2021
Contribution Policy Contributes full ADC
Actuarial Assumptions:
Discount Rate and 6.25% at June 30, 2021 and 6.75% at June 30, 2020
expected Long-Term Rate of Expected City contributions projected to keep
Return on Assets sufficient plan assets to pay all benefits from trust
General Inflation 2.50% annually
Mortality, Retirement, Disability, Rates from CalPERS 2000-2019 Experience Study
Termination
Mortality Improvement Post-retirement mortality projected fully generational with Society of
Actuaries Scale MP-2021
Salary Increases Aggregate - 2.75%
Merit - CalPERS 2000-2019 Experience Study
Medical Trend Non-Medicare - 6.5% for 2023, decreasing to an ultimate rate of 3.75%
in 2076 and later years.
Medicare - 5.65% (non-Kaiser) for 2023, decreasing to an ultimate rate of 3.75% in
2076 and later years
Participation at Retirement Currently covered: 70% Currently waived: 15%
Current Expected
Target Real Rate
Asset Class Allocation *of Return
Global Equity 59.0%4.56%
Fixed Income 25.0%0.78%
TIPS 5.0%-0.08%
Commodities 3.0%1.22%
REITs 8.0%4.06%
Assumed Long-Term Rate of Inflation 2.50%
Expected Long-Term Net Rate of Return, Rounded 6.25%
The long-term expected real rates of return are presented as geometric means.
*Policy target effective October 1, 2018
OPEB Plan
88
Page 960 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 37
Note 9: Other Post-Employment Benefits (OPEB) (Continued)
Changes in the Net OPEB Liability
The changes in the net OPEB liability for the June 30, 2021 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.
Total Plan Fiduciary Net
OPEB Liability Net Position OPEB Liability
Balance at June 30, 2020 12,766,729$ 7,991,098$ 4,775,631$
Changes during the year:
Service cost 423,364 - 423,364
Interest on the total OPEB liability 867,422 - 867,422
Changes in assumptions 507,115 - 507,115
Differences between Expected and
actual experience 349,893 - 349,893
Net plan to plan resource movement - - -
Contribution - employer - 921,000 (921,000)
Contribution - employee - - -
Net investment income - 2,196,724 (2,196,724)
Benefit payments, including refunds
of employee contributions (678,789) (678,789) -
Administrative expense - (7,235) 7,235
Net changes 1,469,005 2,431,700 (962,695)
Balance at June 30, 2021 14,235,734$ 10,422,798$ 3,812,936$
OPEB Plan
1% Decrease 5.25%
Net OPEB Liability 5,684,195$
Current Discount Rate 6.25%
Net OPEB Liability 3,812,936$
1% Increase 7.25%
Net OPEB Liability 2,264,616$
89
Page 961 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 38
Note 9: 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, 2022, the City’s OPEB expense was $251,416. At June 30, 2022, 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 $1,309,367 are reported as deferred outflows of resources and will be
recognized as a reduction of the net OPEB liability in the year ended June 30, 2023. Other amounts reported as deferred outflows of
resources and deferred inflows of resources related to OPEB will be recognized as OPEB expense as follows:
OPEB Plan
1% Decrease
Net OPEB Liability 2,093,874$
Current Trend
Net OPEB Liability 3,812,936$
1% Increase
Net OPEB Liability 5,934,516$
Deferred Outflows Deferred Inflows
of Resources of Resources
OPEB contributions subsequent to
measurement date 1,309,367$ -$
Changes in assumptions 461,316 153,802
Differences between expected and
actual experiences 308,729 1,322,804
Net differences between projected and
actual earnings on plan investments - 1,193,214
Total 2,079,412$ 2,669,820$
Fiscal Year
Ended June 30 Amount
2023 (469,827)$
2024 (455,829)
2025 (463,180)
2026 (507,190)
2027 (175,703)
Thereafter 171,954
(1,899,775)$
90
Page 962 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 39
Note 9: Other Post-Employment Benefits (OPEB) (Continued)
Payable to the OPEB Plan
At June 30, 2022, the City reported a payable of $0 for the outstanding amount of contributions to the OPEB plan required for the
year ended June 30, 2022.
Note 10: Deferred Compensation Plan
All employees of the City are eligible to participate in a City sponsored deferred compensation plan (457 Plan). The 457 Plan
provides for the deferral of a portion of the employees’ compensation until retirement, termination, or certain other covered events.
The assets of the 457 Plan are held in trust for the exclusive benefit of Plan Participants or Beneficiaries.
Deferred contribution(s) by a participant in any taxable year will not exceed the lessor of (1) the applicable dollar amount provided
under Section 457(b)(2) of the Internal Revenue Code (adjusted for cost of living under Section 457(e)(15) of the Internal Revenue
Code), or (2) 100% of the participant’s includible compensation. A participant who has attained age 50 before the close of the
calendar year may elect Age 50 Plus Catch-up Contributions and commence making such contributions to his/her Participant Deferral
Account.
The City has the right at any time to terminate the 457 Plan by resolution of the City Council.
In the year 2022, The City evaluated the requirements of GASB Statement No. 97, Certain Component Unit Criteria, and Accounting
and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans and determined that plan didn’t meet
the criteria to be reported as a fiduciary activity, as required by the above mentioned GASB Statements.
Note 11: Interfund Transactions
There is no interfund receivable and payable balances as of June 30, 2022.
Interfund transfers for the year ended June 30, 2022 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.
Non-Major
General Capital Outlay Governmental
Transfer Out Fund Fund Funds Total
General Fund -$ 21,621,221$ 8,795,528$ 30,416,749$
Capital Outlay Fund 497,600 - 146,667 644,267
Non-Major Governmental Fund 1,759,334 476,970 290,645 2,526,949
Water Fund 794,769 - - 794,769
Sewer Fund 655,312 - - 655,312
Parking Fund 235,233 - - 235,233
Total 3,942,248$ 22,098,191$ 9,232,840$ 35,273,279$
Transfer In
91
Page 963 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 40
Note 12: Joint Ventures, Jointly Governed Organizations and Operating Agreements
The City participates in three multi-governmental organizations: the Whale Rock Commission, the San Luis Obispo Regional Transit
Authority, and the San Luis Obispo Council of Governments. The City also has an operating agreement related to Nacimiento Water
Supply Project. The following provides a general description of each of these agencies and operating agreements along with a
summary of financial information and indebtedness:
Whale Rock Commission
General Description. The Whale Rock Commission (Commission) was established on December 12, 1960 to govern the operations
of the Whale Rock Reservoir. The Commission is composed of six voting members and two non-voting members: three voting
members are appointed by the City; one is appointed by California Polytechnic State University; one by California Men's Colony;
and one by the Director of Finance, State of California. The two non-voting members are position appointments: the Director of
Water Resources, State of California; and the Water Superintendent, City of San Luis Obispo. The Commission is authorized by its
respective agencies to establish policies for the operation of the Reservoir, to contract for the sale of excess water, and to approve
the annual budget.
The City, in accordance with established policies of the Commission, operates and maintains the Reservoir; prepares and
recommends the annual budget; and maintains the fiscal records and funds of the Commission. The Whale Rock Custodial 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 Custodial 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 $3,900,000 and was amortized on a straight-line basis over thirty-
five years. Separate financial statements are available from the Whale Rock Commission, 879 Morro Street, San Luis Obispo, CA
93401.
The following segment financial information for the Whale Rock Commission and the Water Fund’s related investment in the joint
venture is presented as of and for the year ended June 30, 2022:
City's Investment
Joint Venture in Joint Ventur e
Total assets 5,258,221$ 2,894,651$
Total liabilities 114,839 63,219
Fund balance 5,143,382$ 2,831,432$
Total revenues 2,394,659$ 1,318,260$
Total expenditures 1,332,112 733,328
Excess of revenues over expenditures 1,062,547$ 584,932$
92
Page 964 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 41
Note 12: 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
2021-22 the City contributed approximately $588,596 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.
93
Page 965 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 42
Note 12: 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 2021-22 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 13: 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.
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.
Actual 2022 4,610,790$
Projected:
2023 4,609,730
2024 4,619,370
2025 4,621,210
2026 4,622,040
2027-31 23,089,920
2032-36 23,101,490
2037-41 18,565,360
Nacimiento Water Supply Obligations
94
Page 966 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 43
Note 13: Risk Management (Continued)
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 2020-21. 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 2020-
21.
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.
95
Page 967 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 44
Note 13: Risk Management (Continued)
The last actuarial study to determine the undiscounted outstanding claims liability was completed for the year ended June 30, 2022.
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, 2022 is calculated as follows:
Note 14: 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.
Grant Awards
Under the terms of Federal and State grants, audits may be required, and certain costs may be questioned as not being appropriate
expenditures under the terms of the grants. Such audits could lead to requests for reimbursement to the grantor agencies. City
management believes disallowances, if any, will be immaterial.
Regional Transit Authority Pension Expense
The City is presently a member agency of the San Luis Obispo Regional Transit Authority (SLORTA) (see Note 14), 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 $4 million. It is not anticipated that the City’s annual payment to the JPA will
increase to satisfy this unfunded liability.
Self-insurance activity as of and for the year ended June 30, 2022
is summarized is as follows:
Interest earnings 2,455$
Claims expense (8,568)
Estimated liability for reported claims and settlement expenses (286,622)
Assets on deposit 847,044
Estimated unpaid claims asset 560,422$
Changes in the balances of claim assets during the past two fiscal years
are as follows:
Estimated unpaid claims asset June 30, 2020 803,567$
Claim payments and related expenditures reimbursement (441,021)
Change in estimated claims asset June 30, 2021 120,677
Interest earnings 4,878
Estimated unpaid claims asset June 30, 2021 488,101
Claim payments and related expenditures reimbursement 55,979
Change in estimated claims asset June 30, 2022 13,887
Interest earnings 2,455
Estimated unpaid claims asset June 30, 2022 560,422$
96
Page 968 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 45
Note 15: Construction and Other Significant Commitments
Construction and other significant commitments as of June 30, 2022, 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.
Note 16: Fund Balance Deficiency
As of June 30, 2022, the City had no fund with negative fund balance.
Note 17: Subsequent Events
Events subsequent to June 30, 2022 have been evaluated through December 20, 2022, which is the date that the financial statements
are available to be issued. Management identified no subsequent events that required disclosure.
Note 18: New Accounting Standards
Accounting Standards Adopted
In GASB Statement No. 87, Leases – The objective of this statement is to recognize in the financial statements 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.
GASB Statement 89, Accounting for Interest Cost Incurred before the End of a Construction Period – The objective of
this statement is to (1) to enhance the relevance and comparability of information about capital assets and the cost of
borrowing for a reporting period and (2) to simplify accounting for interest cost incurred before the end of a construction
period. This statement establishes accounting requirements for interest cost incurred before the end of a construction
period. This Statement requires that interest cost incurred before the end of a construction period be recognized as an
expense in the period in which the cost is incurred for financial statements prepared using the economic resources
measurement focus. As a result, interest cost incurred before the end of a construction period will not be included in
the historical cost of a capital asset reported in a business-type activity or enterprise fund. The requirements of this
statement did not apply to the City for the current fiscal year.
GASB Statement No. 92, Omnibus 2020 - The objectives of this Statement are 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.
GASB Statement 93, Replacement of Interbank Offered Rates – The objective of this Statement is to address the
accounting and financial reporting implications that result from the elimination of the London Interbank Offered rate
General Fund 3,524,689$
Special Revenue Funds 85,030
Capital Project Funds 4,643,698
Enterprise Funds:
Water 2,549,243
Sewer 36,750,388
Parking 445,846
Transit 2,126,016
Total 50,124,910$
97
Page 969 of 1069
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 46
Note 18: New Accounting Standards (Continued)
(LIBOR) that is notably used in most agreements in which variable payments made or received depend on an interbank
offered rate (IBOR). As a result of global reference rate reform, LIBOR is expected to cease to exist in its current form
at the end of 2021, prompting governments to amend or replace financial instruments for the purpose of replacing
LIBOR with other reference rates, by either changing the reference rate or adding or changing fallback provisions
related to the reference rate. The requirements of this statement did not apply to the City for the current year.
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 – The primary objectives of this Statement are to (1) increase consistency
and comparability related to the reporting of fiduciary component units in circumstances in which a potential
component unit does not have a governing board and the primary government performs the duties that a governing
board typically would perform; (2) mitigate costs associated with the reporting of certain defined contribution pension
plans, defined contribution other postemployment benefit (OPEB) plans, and employee benefit plans other than pension
plans or OPEB plans (other employee benefit plans) as fiduciary component units in fiduciary fund financial statements;
and (3) enhance the relevance, consistency, and comparability of the accounting and financial reporting for Internal
Revenue Code (IRC) Section 457 deferred compensation plans (Section 457 plans) that meet the definition of a pension
plan and for benefits provided through those plans.
GASB Statement No. 99, Omnibus 2022 – The primary objectives of this Statement are to enhance comparability in
accounting and financial reporting and to improve the consistency of authoritative literature by addressing (1) practice
issues that have been identified during implementation and application of certain GASB Statements and (2) accounting
and financial reporting for financial guarantees. The requirements of this Statement did not apply to the City for the
current fiscal year.
New Accounting Standards
The City is currently analyzing its accounting practices to determine the potential impact on the financial statements for the
following GASB Statements:
GASB Statement 91, Conduit Debt Obligations – The objective of this statement is to provide a single method of
reporting conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments
extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. The
requirements of this Statement are effective for the City’s year ending June 30, 2023.
GASB Statement 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements – The
objective of this Statement is to improve financial reporting by addressing issues related to public-private and public-
public partnership arrangements (PPPs). As used in this Statement, a PPP is an arrangement in which a government
(the transferor) contracts with an operator (a governmental or nongovernmental entity) to provide public services by
conveying control of the right to operate or use a nonfinancial asset, such as infrastructure or other capital asset (the
underlying PPP asset), for a period of time in an exchange or exchange-like transaction. The requirements of this
Statement are effective for the City’s year ending June 30, 2023.
GASB Statement No. 96, Subscription-Based Information Technology Arrangements – The objective of this statement
is to provide guidance on the accounting and financial reporting for subscription-based information technology
arrangements (SBITAs) for government end users (governments). This Statement (1) defines a SBITA; (2) establishes
that a SBITA results in a right-to-use subscription asset—an intangible asset—and a corresponding subscription
liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation
costs of a SBITA; and (4) requires note disclosures regarding a SBITA. The requirements of this Statement are effective
for the City’s year ending June 30, 2023.
98
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page 47
Note 18: New Accounting Standards (Continued)
GASB Statement No. 100, Accounting Changes and Error Corrections-an Amendment of GASB Statement No. 62 –
The primary objective of this Statement is to enhance accounting and financial reporting requirements for accounting
changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable
information for making decisions or assessing accountability. The requirements of this Statement are effective for the
City’s year ending June 30, 2024.
GASB Statement No. 101, Compensated Absences – The primary objective of this Statement is to better meet the
information needs of financial statement users by updating the recognition and measurement guidance for compensated
absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and
by amending certain previously required disclosures. The requirements of this Statement are effective for the City’s
year ending June 30, 2025.
Note 19: Prior Period Adjustments
During 2022, prior period adjustments were made to correct payroll errors and to properly record the loan receivables in Affordable
Housing Fund, CDBG Fund, Impact Fee Funds, Water Fund and Sewer Fund, which the City expensed or not recorded in the past
years.
Governmental
Activities
Business-
type
Activities General Fund
Non-Major
Governmental
Fund Water Fund Sewer Fund Parking
Fiduciary
Funds
Net Position as
previously reported at
June 30, 2021 155,741,584$ 217,715,565$ 47,118,071$ 41,177,283$ 84,800,287$ 99,201,571$ 26,905,947$ 6,888,633$
Prior Period Adjustments:
Loan Receivables 3,558,933 2,274,934 - 160,116 1,476,189 798,745 - -
Cash 247,646 17,176 247,646 - 4,539 10,391 2,246 310
Accrued interest 592,053 224,399 - - 148,008 76,391 - -
Correction of GASB 84 - 49,134 24,567 24,567 24,567 24,567 - 24,567
Net Position as restated
at
June 30, 2021 160,140,216$ 220,232,074$ 47,365,717$ 41,361,966$ 86,453,590$ 100,111,665$ 26,908,193$ 6,913,510$
Government-wide Statements Fund Statements
99
Page 971 of 1069
100
Page 972 of 1069
REQUIRED SUPPLEMENTARY INFORMATION
(UNAUDITED)
101
Page 973 of 1069
102
Page 974 of 1069
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund
For the Fiscal Year Ended June 30, 2021
Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
REVENUES:
Taxes and franchise fees:
Sales and use tax - general 18,387,000$ 20,790,779$ 22,247,303$ 1,456,524$
Transaction and use tax - Local Revenue Measure 24,279,000 25,810,000 29,172,258 3,362,258
Property tax 14,396,883 14,215,765 14,716,412 500,647
Transient occupancy tax 7,213,000 9,051,000 10,650,762 1,599,762
Utility users tax 5,565,000 5,383,000 5,338,325 (44,675)
Property tax in lieu of VLF 5,796,000 5,941,388 5,994,592 53,204
Franchise taxes 1,575,000 1,575,000 1,978,295 403,295
Business tax 2,426,000 2,832,000 2,823,163 (8,837)
Cannabis Tax 1,300,000 1,000,000 998,875 (1,125)
Total taxes 80,937,883 86,598,932 93,919,985 7,321,053
Fines, forfeitures and penalties 229,096 209,096 173,915 (35,181)
Use of money and property 495,000 230,000 (1,455,527) (1,685,527)
Subventions and grants:
Other State and Federal grants 900,000 4,935,697 2,067,631 (2,868,066)
Other subventions and grants 336,000 493,000 529,299 36,299
Total subventions and grants 1,236,000 5,428,697 2,596,930 (2,831,767)
103
Page 975 of 1069
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2021
Page 2
Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
Charges for services:
Public safety:
Police 533,196 506,105 468,144 (37,961)
Fire:
Medical emergency recovery 498,476 475,560 478,674 3,114
Fire safety/hazardous materials permits 900,010 940,010 1,000,075 60,065
Other fire revenues 5,890 (10,631) 26,067 36,698
Community development:
Planning and zoning fees 1,305,000 1,305,000 1,383,043 78,043
Construction plan and check inspections 3,955,000 3,951,284 4,507,348 556,064
Infrastructure plan check and inspections (291,721) (291,721) 197,874 489,595
Fire plan check and inspections - - (3,929) (3,929)
Culture and recreation:
Adult athletic fees 256,200 259,800 232,412 (27,388)
Youth athletic fees 770,935 770,935 866,805 95,870
Rental and use fees 289,649 289,649 305,902 16,253
Aquatics 189,378 189,378 273,546 84,168
Golf course 260,543 260,543 220,087 (40,456)
General government:
Other service charges 757,443 604,443 726,873 122,430
Total charges for services 9,429,999 9,250,355 10,682,921 1,432,566
Impact Fees - - 68,125 68,125
Other revenues 471,100 471,100 413,188 (57,912)
Total Revenues 92,799,078 102,188,180 106,399,537 4,211,357
104
Page 976 of 1069
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2021
Page 3
Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
Expenditures:
Public Safety:
Police protection:
Administration 2,186,391 2,436,920 1,880,726 556,194
Investigations 3,458,235 4,119,375 3,621,224 498,151
Neighborhood services 274,535 297,704 284,409 13,295
Support services 2,920,629 3,417,769 3,315,494 102,275
Patrol services 9,508,130 11,517,804 12,616,286 (1,098,482)
Traffic safety 885,312 1,031,932 863,845 168,087
Total police protection 19,233,231 22,821,505 22,581,984 239,521
Fire and environmental safety:
Administration 1,221,830 1,493,080 1,397,025 96,055
Emergency response 11,034,040 13,653,788 13,924,054 (270,266)
Fire Apparatus Services 468,759 526,567 502,880 23,687
Hazard protection 871,697 1,063,119 965,976 97,143
Training 392,703 185,008 143,900 41,108
Disaster preparedness 50,069 115,434 97,605 17,829
Mobile Crisis Unit - 263,311 43,085 220,226
Total fire and environmental safety 14,039,098 17,300,308 17,074,525 225,783
Total public safety 33,272,329 40,121,813 39,656,509 465,304
Transportation:
Transportation planning and engineering 1,016,643 1,163,539 1,123,041 40,498
Street and sidewalk maintenance 2,009,761 2,019,992 1,796,108 223,884
Traffic signals and street lights 569,934 597,520 598,015 (495)
Creek and flood protection 1,448,876 1,563,631 1,301,812 261,819
Total transportation 5,045,214 5,344,682 4,818,976 525,706
105
Page 977 of 1069
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2021
Page 4
Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
Culture and Recreation:
Recreation programs:
Recreation administration 781,671 899,033 872,935 26,098
Aquatics/Sinsheimer park facilities 651,167 684,067 568,014 116,053
Children's services 1,272,354 1,384,098 1,228,850 155,248
Facilities 284,066 321,958 299,765 22,193
Special events 10,500 8,600 1,008 7,592
Recreational sports 655,001 708,683 516,824 191,859
Golf course 705,094 805,838 831,862 (26,024)
Ranger services 818,243 954,994 803,371 151,623
Maintenance programs:
Swim center maintenance 592,191 615,215 601,262 13,953
Parks and landscape maintenance 3,327,234 3,494,417 3,553,119 (58,702)
Tree maintenance 492,709 380,741 334,499 46,242
Cultural and social service programs: Human relations
Human relations 572,086 571,416 212,279 359,137
Cultural activities 347,632 347,632 332,351 15,281
Total leisure, cultural and social services 10,509,947 11,176,692 10,156,139 1,020,553
Community Development:
Planning:
Commissions and communities 34,939 34,939 13,395 21,544
Community development administration 994,382 1,141,294 903,001 238,293
Long-range planning (656,102) (575,147) 751,455 (1,326,602)
Development review 2,038,597 2,381,429 1,839,094 542,335
Natural resource protection 1,008,766 1,066,623 1,017,359 49,264
Construction regulation:
Building and safety 2,296,644 3,634,026 3,235,364 398,662
CIP project engineering 2,159,868 2,940,360 2,664,647 275,713
Economic health:
Community promotion 437,898 422,612 415,604 7,008
Economic development 1,294,993 1,164,443 869,369 295,074
Housing 962,157 987,983 1,017,132 (29,149)
Total community development 10,572,142 13,198,563 12,726,420 472,143
106
Page 978 of 1069
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2021
Page 5
Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
General Government:
Legislation:
Council 215,501 241,611 245,855 (4,244)
General administration:
City administration 2,129,156 2,256,453 2,077,196 179,257
Public works administration 923,458 1,060,927 1,069,343 (8,416)
Legal services:
City attorney 1,330,474 1,412,670 1,374,705 37,965
City clerk services:
Administration and records 574,916 642,094 601,382 40,712
Organization support services:
Human resource administration 5,916,713 6,372,946 6,175,678 197,268
Finance and administration 2,276,820 2,364,395 2,557,005 (192,610)
Revenue management 420,193 493,732 438,580 55,152
Accounting 1,136,747 1,156,943 1,110,033 46,910
Finance non-departmental 377,658 1,569,473 288,297 1,281,176
Network services 3,374,515 3,310,079 3,204,644 105,435
Wellness program 18,251 16,415 10,134 6,281
Building and vehicle maintenance:
Buildings 1,428,128 1,508,715 1,359,287 149,428
Vehicle and equipment maintenance 1,489,883 1,552,441 1,395,775 156,666
Total general government before cost reimburseme 21,612,413 23,958,894 21,907,914 2,050,980
Cost reimbursement (Note 3 to RSI)(4,717,442) (4,717,442) (4,717,442) -
Total general government 16,894,971 19,241,452 17,190,472 2,050,980
Capital Outlay:
Public safety - 15,869 16,178 (309)
Transportation - 2,457,476 976,123 1,481,353
Culture and recreation - 418,213 170,729 247,484
Community development - 19,327 17,672 1,655
General government - 1,446,557 816,029 630,528
Total capital outlay - 4,357,097 1,996,731 2,360,366
Total Expenditures 76,294,603 93,440,299 86,545,247 6,895,052
Excess of Revenues Over Expenditures 16,504,475 8,747,881 19,854,290 11,106,409
107
Page 979 of 1069
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2021
Page 6
Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
Other Financing Sources (Uses)
Transfers in 18,800,657 18,800,657 3,942,248 (14,858,409)
Transfers out (37,738,319) (41,432,873) (30,416,749) 11,016,124
Total other financing uses (18,937,662) (22,632,216) (26,474,501) (3,842,285)
Net Change in Fund Balance (2,433,187) (13,884,335) (6,620,211) 7,264,124
Fund Balance, Beginning of the Year, as restated 47,365,717 47,365,717 47,365,717
Fund Balance, End of Year 44,932,530$ 33,481,382$ 40,745,506$
108
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109
Page 981 of 1069
Fiscal Year 2021-22 2020-21 2019-20 2018-19
Measurement Period 2020-21 2019-20 2018-19 2017-18
Total pension liability:
Service Cost 3,939,785$ 3,681,240$ 4,042,717$ 4,328,129$
Interest on total pension liability 16,589,680 16,160,011 15,531,812 14,778,918
Difference between expected and actual experience (755,414) 1,869,474 2,966,923 1,445,049
Changes in assumptions - - - (1,292,326)
Benefit payments, including refunds of
employee contributions (13,518,666) (12,892,847) (12,061,701) (10,740,816)
Net change in total pension liability 6,255,385 8,817,878 10,479,751 8,518,954
Total pension liability - beginning 237,568,349 228,750,471 218,270,720 209,751,766
Total pension liability - ending (a) $ 243,823,734 237,568,349$ 228,750,471$ 218,270,720$
Plan fiduciary net position:
Contributions - employer 8,246,755$ 7,709,918$ 9,361,882$ 6,693,987$
Contributions - employee 2,056,274 1,889,583 1,775,245 1,820,697
Net investment income 32,904,570 7,205,266 9,124,520 10,820,033
Benefit payments (13,518,666) (12,892,847) (12,061,701) (10,740,816)
Net plan to plan resource movement - - - (316)
Administrative expense (148,132) (203,824) (97,394) (200,184)
Other miscellaneous income/(expense)- - 316 (380,153)
Net change in plan fiduciary net position 29,540,801 3,708,096 8,102,868 8,013,248
Plan fiduciary net position - beginning 148,289,275 144,581,179 136,478,311 128,465,063
Plan fiduciary net position - ending (b)177,830,076$ 148,289,275$ 144,581,179$ 136,478,311$
Net pension liability (asset) - ending (a) - (b)65,993,658$ 89,279,074$ 84,169,292$ 81,792,409$
Plan fiduciary net position as a percentage of the total pension
liability 72.93% 62.42% 63.20% 62.53%
Covered payroll 23,675,396 21,795,380 22,951,725 23,736,588
Net pension liability as percentage of covered payroll 278.74% 409.62% 366.72% 344.58%
* Fiscal year 2015 was the first year of implementation. Therefore, only eight 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, 2021.
Benefit changes . The figures above include any liability impact that may have resulted from voluntary benefit changes that occurred after the
June 30, 2019 valuation. However, offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes) that occurred after the June 30,
2019 valuation date are not included in the figures above, unless the liability impact is deemed to be material by the plan actuary.
Changes in assumptions . None in 2019 or 2020 or 2021. In 2018, demographic assumptions and inflation rate were changed in accordance to
the CalPERS Experience Study and Review of Assumptions December 2017. There were no changes in the discount rate. In 2017, the discount
rate was reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the
discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense). In
2014, amounts reported were based on the 7.5 percent 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, 2022
Last 10 Years *
110
Page 982 of 1069
2017-18 2016-17 2015-16 2014-15
2016-17 2015-16 2014-15 2013-14
4,124,832$ 3,580,882$ 3,578,172$ 3,703,087$
14,197,897 13,688,523 13,193,597 12,756,967
694,843 (1,160,933) (2,433,791) -
11,219,603 - (3,057,724) -
(10,161,053) (9,476,508) (8,808,668) (8,258,611)
20,076,122 6,631,964 2,471,586 8,201,443
189,675,644 183,043,680 180,572,094 172,370,651
209,751,766$ 189,675,644$ 183,043,680$ 180,572,094$
6,776,849$ 6,122,173$ 5,027,356$ 4,631,254$
1,841,331 1,666,606 1,509,834 1,664,654
13,053,453 677,557 2,673,657 17,746,607
(10,161,053) (9,476,508) (8,808,668) (8,258,611)
(2,936) - - -
(172,935) (72,044) (133,042) -
- - - -
11,334,709 (1,082,216) 269,137 15,783,904
117,130,354 118,212,570 117,943,433 102,159,529
128,465,063$ 117,130,354$ 118,212,570$ 117,943,433$
81,286,703$ 72,545,290$ 64,831,110$ 62,628,661$
61.25% 61.75% 64.58% 65.32%
21,841,841 20,499,668 19,769,997 19,235,818
372.16% 353.89% 327.93% 325.58%
111
Page 983 of 1069
Fiscal Year 2021-22 2020-21 2019-20 2018-19
Acuarially determined contribution 8,390,908$ 8,069,806$ 7,709,918$ 7,093,882$
Contributions in relation to the actuarially determined
contribution (15,923,929) (8,069,806) (7,709,918) (9,361,882)
Contribution deficiency (excess)(7,533,021)$ -$ -$ (2,268,000)$
Covered payroll 26,238,385 23,675,396 21,795,380 22,951,725
Contributions as percentage of covered payroll 60.69% 34.09% 35.37% 40.79%
Actuarial Cost Method Entry Age Normal
Amortization Method
Amortization Period
Asset Valuation Method
Inflation 2.50%
Salary Increases Varies by Entry Age and Service
Payroll Growth 2.750%
Discount Rate 7.15% Net of Pension Plan Investment and Administrative Expenses
Retirement Age
Mortality
City of San Luis Obispo, California
Schedule of the Pension Plan Contributions
Miscellaneous Agent Multiple-Employer Plan
June 30, 2022
For details, see June 30, 2018 CalPERS Funding Valuation Report
For details, see June 30, 2018 CalPERS Funding Valuation Report
The probabilities of Retirement are based on the 2017 CalPERS Experience
Study for the period from 1997 to 2015.
The probabilities of mortality are based on the 2017 CalPERS Experience
Study for the period from 1997 to 2015.
Pre-retirement and Post-retirement mortality rates include 15 years of
projected mortality improvement using 90% of Scale MP-2016 published by
the Society of Actuaries.
Last 10 Years *
The actuarial methods and assumptions used to set the actuarially determined contributions for fiscal year 2020-21 contributions rates are as
follows:
* Fiscal year 2014 was the first year of implementation. Therefore, only nine 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, 2021.
112
Page 984 of 1069
2017-18 2016-17 2015-16 2014-15 2013-14
6,693,987$ 6,776,849$ 6,122,173$ 5,027,356$ 4,631,254$
(6,693,987) (6,776,849) (6,122,173) (5,027,356) (4,631,254)
-$ -$ -$ -$ -$
23,736,588 21,841,841 20,499,668 19,769,997 19,235,818
28.20% 31.03% 30.97% 25.43% 24.08%
113
Page 985 of 1069
Fiscal Year 2021-22 2020-21 2019-20 2018-19
Measurement Period 2020-2021 2019-2020 2018-2019 2017-18
Proportion of the Collective Net Pension Liability 1.08299% 0.7225% 0.7212% 1.2261%
Proportionate Share of the Collective Net Pension Liability 58,571,330$ 78,611,581$ 73,897,967$ 71,940,534$
Covered payroll 10,744,808$ 9,488,971$ 11,197,562$ 11,246,306$
Proportionate share of the net pension liability as percentage of
covered payroll 545.11% 828.45% 659.95% 639.68%
Plan fiduciary net position as a percentage of the total pension
liability 88.29% 75.26% 75.26% 75.26%
*-Fiscal year 2015 was the first year of implementation, therefore only eight years are shown.
The CalPERS discount rate was increased from 7.5% to 7.65% in fiscal year 2016, and then decreased from 7.65% to 7.15%
in fiscal year 2018.
The CalPERS mortality assumptions were adjusted in fiscal year 2019.
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, 2022
Last 10 Years *
114
Page 986 of 1069
2017-18 2016-17 2015-16 2014-15
2016-17 2015-16 2014-15 2013-14
1.1943% 1.2510% 1.3654% 1.3754%
71,364,346$ 64,792,760$ 56,260,280$ 51,592,420$
10,614,437$ 10,643,123$ 10,849,863$ 10,768,119$
672.33% 608.78% 518.53% 479.12%
73.31% 74.06% 78.40% 79.82%
115
Page 987 of 1069
Fiscal Year 2021-22 2020-21 2019-20 2018-19
Contractually required contribution (actuarially determined)7,860,585$ 7,631,620$ 7,167,638$ 6,416,780$
Contribution in relation to the actuarially determined
contributions (12,756,585) (7,631,620) (7,167,638) (8,348,780)
Contribution deficiency (excess)(4,896,000)$ -$ -$ (1,932,000)$
Covered payroll 12,207,346$ 10,744,808$ 9,488,971$ 11,197,562$
Contributions as a percentage of covered payroll 104.50% 71.03% 75.54% 74.56%
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 nine years are shown
City of San Luis Obispo, California
Schedule of the City's Pension Contributions
Safety Cost-Sharing Plan
As of June 30, 2022
Last 10 Years *
116
Page 988 of 1069
2017-18 2016-17 2015-16 2014-15 2013-14
5,910,345$ 5,549,915$ 5,074,217$ 4,350,871$ 4,226,211$
(5,910,345) (6,299,915) (5,824,217) (4,650,871) (5,161,211)
-$ (750,000)$ (750,000)$ (300,000)$ (935,000)$
11,246,306$ 10,614,437$ 10,643,123$ 10,849,863$ 10,768,119$
52.55% 59.35% 54.72% 42.87% 47.93%
117
Page 989 of 1069
Fiscal Year 2021-22 2020-21 2019-20 2018-19 2017-18
Measurement Period 2020-21 2019-20 2018-19 2017-18 2016-17
Total OPEB liability:
Service Cost 423,364$ 415,244$ 477,538$ 463,629$ 450,125$
Interest on total OPEB liability 867,422 841,590 935,528 891,794 856,436
Difference between expected and
actual experience 349,893 - (2,085,962) - -
Changes in assumptions 507,115 (203,416) 21,857 - -
Benefit payments, including refunds of
employee contributions (678,789) (678,882) (677,824) (765,000) (827,500)
Net change in total OPEB liability 1,469,005 374,536 (1,328,863) 590,423 479,061
Total OPEB liability - beginning 12,766,729 12,392,193 13,721,056 13,130,633 12,651,572
Total OPEB liability - ending (a)14,235,734$ 12,766,729$ 12,392,193$ 13,721,056$ 13,130,633$
Plan fiduciary net position:
Contributions - employer 921,000$ 1,656,882$ 677,824$ 1,221,000$ 1,493,996$
Net investment income 2,196,724 259,704 392,852 439,828 469,883
Benefit payments (678,789) (678,882) (677,824) (765,000) (827,500)
Administrative expense (7,235) (3,472) (1,364) (10,170) (2,387)
Net change in plan fiduciary net position 2,431,700 1,234,232 391,488 885,658 1,133,992
Plan fiduciary net position - beginning 7,991,098 6,756,866 6,365,378 5,479,720 4,345,728
Plan fiduciary net position - ending (b)10,422,798$ 7,991,098$ 6,756,866$ 6,365,378$ 5,479,720$
Plan net OPEB liability - ending (a) - (b)3,812,936$ 4,775,631$ 5,635,327$ 7,355,678$ 7,650,913$
Plan fiduciary net position as a percentage of
the total OPEB liability 73.22% 62.59% 54.53% 46.39% 41.73%
Covered-employee payroll 40,691,438$ 33,077,056$ 33,429,600$ 33,790,437$ 33,722,592$
Plan net OPEB liability as percentage of
covered payroll 9.37% 14.44% 16.86% 21.77% 22.69%
Changes in assumptions. As of June 30, 2021 measurement date, the assumption adds 1. Discount rate was updated based on newer
capital market assumptions 2. Medical plan election at retirement assumption was updated 3. Inflation rate decreased from 2.75% to
2.50%, which decreased the discount rate, medical trend, and aggregate salary increases by 0.25% 4. Demographic assumptions updated
to CalPERS 2000-2019 Experience Study 5. Mortality improvement scale was updated to Scale MP-2021. As of June 30, 2020
measurement date, the assumption removed the ACA excise tax. 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, 2020 measurement date.
Prepared for the City of San Luis Obispo OPEB Plan
an Agent Multiple-Employer Defined Benefit OPEB Plan
As of June 30, 2022
Last 10 Years *
Schedule of Changes in the Net OPEB Liability and Related Ratios
118
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Fiscal Year 2021-22 2020-21 2019-20 2018-19 2017-18
1,309,367$ 921,000$ 1,190,000$ 1,154,000$ 1,221,000$
(1,309,367)$ (921,000) (1,656,882) (677,824) (1,221,000)
Contribution deficiency (excess)-$ -$ (466,882)$ 476,176$ -$
Covered-employee payroll 38,691,777$ 40,691,438$ 33,077,056$ 33,429,600$ 33,790,437$
3.38% 2.26% 3.60% 3.45% 3.61%
Contributions paid as of June 30, 2022 are deferred to June 30, 2023.
Valuation date June 30, 2019
Actuarial Cost Method Entry Age Normal, Level % of pay
Amortization Method Level % of pay
Amortization Period Average 12.1 years remaining fixed period for 2021/22
Asset Valuation Method Investment gains and losses spread over 5-year rolling period
Discount Rate
General Inflation
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 2021-22 are as
follows:
Non-Medicare - 7.25% for 2021, decreasing to an ultimate rate of 4.0% in 2076
Medicare - 6.3% for 2021, decreasing to an ultimate rate of 4.0% in 2076
Post-retirement mortality projected fully generational with Scale MP-2019
* Fiscal year 2018 was the first year of implementation. Information is required only for measurement periods for which
GASB 75 is applicable.
6.75%
2.75%
Prepared for the City of San Luis Obispo Miscellaneous Plan
an Agent Multiple-Employer Defined Benefit OPEB Plan
As of June 30, 2022
Last 10 Years *
Schedule of Employer OPEB Contributions
Actuarially determined contribution
Contributions in relation to the
actuarially determined contributions
Contributions as a percentage of covered
payroll
119
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City of San Luis Obispo, California
Notes to Required Supplementary Information
June 30, 2022
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, 2022 expenditures exceeded appropriations in the General Fund as noted below.
Department/Division Budget Variance
Police Protection:
Patrol services 1,098,482$
Fire and environmental safety:
Emergency response 270,266
Culture and Recreation:
Golf course 26,024
Transportation:
Traffic signals and street lights 495
Recreation programs:
Maintenance programs:
Parks and landscape maintenance 58,702
Planning:
Long-range planning 1,326,602
Organization support services:
Finance and administration 192,610
Housing 29,149
General Government:
Council 4,244
General Administration:
Public works administration 8,416
Capital Outlay:
Public safety 309
120
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OTHER SUPPLEMENTARY INFORMATION
AND COMBINING AND INDIVIDUAL FUND
STATEMENTS AND SCHEDULES
121
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122
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Revenues Budget Actual
Local Transaction and Use Tax 25,810,000$ 29,172,258$
Investment Income (283,748)
25,810,000$ 28,888,510$
Expenditures
Transfer Out for Operating Programs:
Protect Financial Stability (FTE = 3.5) 328,811$ 328,811$
Community Safety and Emergency Preparedness (FTE = 8) 1,417,636 1,417,636
Creek and Flood Protection (FTE = 6) 632,567 632,567
Address Homelessness (FTE = 1) 810,647 810,647
Safe and Clean Public Areas (FTE = 3) 371,021 371,021
Economic Development and Business Retention 998,688 998,688
Youth/Senior Services and Recreation Facilities (FTE = 3.5) 341,009 341,009
Street Maintenance and Transportation (FTE = 5.6) 1,016,455 1,016,455
Open Space/Natural Areas Preservation and Maint. (FTE = 5) 741,007 741,007
Other Services and Projects 254,819 254,819
6,912,660$ 6,912,660$
Transfer Out for 2021-22 Capital Projects
Community Safety and Emergency Preparedness 2,119,473$ 2,119,473$
Creek and Flood Protection 960,000 960,000
Safe and Clean Public Areas 805,000 805,000
Economic Development and Business Retention 1,140,555 1,140,555
Youth/Senior Services and Recreation Facilities 3,234,000 3,234,000
Street Maintenance and Transportation (incl bike and ped improvements) 9,021,975 9,021,975
Open Space/Natural Areas Preservation and Maintenance 1,490,000 1,490,000
Other Services and Projects 1,365,464 1,365,464
Allocation to Capital Reserve 3,426,208 3,426,208
23,562,674$ 23,562,674$
Expenditures on Legacy Projects (projects funded before 2021-22)
Legacy Projects 3,975,195$ 2,016,283$
Net Change in Fund Balance (3,603,107)$
Fund Balance Beginning of Year 9,299,971$
Fund Balance End of Year 5,696,864$
Encumbered for Legacy Projects (1,958,912)$
Available Fund Balance (note 1) 3,737,952$
Note 1: Council took action on October 4, 2022 (R-11367) to allocate $2.1 million of the available fund balance.
City of San Luis Obispo
Local Transaction Tax Measure Funding Schedule
For the Fiscal Year Ended June 30, 2022
123
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Page 2
Capital Programs: Budget Actual Encumbrances Carryover
Community Safety and Emergency Preparedness
Fire Hydrant Replacement 40,000 39,976 - 24
IT Replacements - Annual Asset Maintenance Account 1,703,757 511,052 120,507 1,072,198
Police Station Replacement 262,520 29,950 232,570 0
Fleet Replacement: Police 340,000 109,589 116,367 114,045
Fleet Replacement: Fire 295,000 129,034 133,236 32,730
Community Safety Emergency Response
Communication Equip 89,420 29,309 6,500 53,611
Fire Station #3 & #4 Remodel Space Study and Design 25,000 - - 25,000
2,755,697 848,909 609,179 1,297,609
Creek and Flood Protection
Pismo/Johnson/San Luis Creek Bank Stabilization 235,000 104,166 88,811 42,023
Broad and Leff Culvert Repair 7,613 7,612 - 1
Storm Drains Annual Asset Maintenance 822,159 629,646 30,530 161,983
Woodbridge Groundwater Runoff Diversion 10,000 - - 10,000
1,074,772 741,423 119,342 214,007
Safe and Clean Public Areas
Downtown Safety Enhancements 400,000 208,581 51 191,368
Sidewalk Annual Asset Maintenance 287,613 89,993 2,465 195,155
Mission Plaza Restroom Replacements and Enhancements 377,435 110,918 167,068 99,449
Bob Jones Trail and Railroad Safety Trail Solar Lighting 100,000 - - 100,000
Downtown Cleaning Equipment 21,368 4,500 16,868
Street Lights - Annual Asset Maintenance 73,148 5,818 13,577 53,753
Street and Pathway Lighting 75,000 - - 75,000
1,334,564 419,810 183,161 731,593
Economic Development and Business Retention
Open SLO 200,000 65,015 7,500 127,485
Banner Arm - Bench Rests - Signs 100,000 20,878 - 79,122
Annual Public Art Maintenance and Projects 92,500 62,800 - 29,700
Neighborhood Greenways Public Art 11,216 - - 11,216
Downtown Public Art Installations 211,000 172,738 - 38,262
Mission Plaza Maintenance Improvements 275,000 88,730 - 186,271
Mission Plaza Arbor Refurbishment 15,000 - - 15,000
Downtown Zig‐Zag Lighting 250,000 - - 250,000
1,154,716 410,161 7,500 737,055
Youth/Senior Services and Recreation Facilities
Meadow Park Pathways Refurbishment 220,035 220,035 - -
Laguna Lake Golf Course Maintenance 40,000 28,430 - 11,570
Golf Course Pro Shop Flood Damage Repairs 120,000 26,778 - 93,222
Parks Major Maintenance - Annual Asset Maintenance 1,977,135 1,198,349 15,517 763,269
Parks and Recreation Master Plan Implementation 200,000 - - 200,000
Playground Equipment Replacement -
Annual Asset Maint.110,000 - - 110,000
Parks and Recreation Interior Office Rehabilitation 150,000 150,000 - -
North Broad Street Neighborhood Park Construction 175,000 - - 175,000
Major Facilities Maintenance - Annual Asset Maintenance 1,004,795 152,183 26,480 826,132
3,996,965 1,775,775 41,997 2,179,193
City of San Luis Obispo
Local Transaction Tax Measure Funding Schedule, continued
Includes Legacy Projects and projects funded by Capital Reserve
Local Revenue Measure Funded Projects
124
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Page 3
Street Maintenance and Transportation
Ped and Bike Pathway Inventory and
Pavement Condition 82,407 39,544 4,699 38,164
Neighborhood Greenway Plan Implementation ‐ Phase II 744,775 338,562 379,028 27,186
South Street Median Landscaping 36,676 22,596 11,090 2,990
Avila Ranch ‐ Buckley Extension Class I Bike Lane 1,665,000 56,989 96 1,607,915
Pedestrian Crossing Improvements 363,773 33,149 24,344 306,280
Curb Ramps 1,000,000 616,142 200,848 183,010
2021 Downtown Pavement Improvements Project 2,630,095 2,573,536 - 56,559
Active Transportation Plan Implementation 400,107 106,312 229,912 63,884
Monterey at Santa Rosa Paving and Signal Proect 1,000,000 9,770 230 990,000
Roadway Sealing 2022 238,160 10,360 - 227,800
Street Reconstruction and Resurfacing - Annual
Asset Maint.413,118 83,484 147,490 182,143
Mid-Higuera Bypass 110,000 11,546 42,154 56,300
Traffic Signs and Striping Maintenance 62,919 43,770 - 19,149
California Taft Roundabout 300,000 1,721 68,040 230,240
Orcutt/Tank Roundabout Construction 1,069,494 707,019 97,262 265,214
Prado Road Interchange 500,000 - - 500,000
Prado Road Bridge & Road Widening 427,780 26,260 401,520 -
Higuera Street Paving 24,634 5,299 - 19,335
Transportation Safety & Operations 59,119 16,930 - 42,189
Marsh at Santa Rosa Replacement 74,250 32,531 2,011 39,709
Traffic Safety Implementation 149,469 14,440 16,390 118,639
Railroad Safety Trail Taft to Pepper 156,706 34,956 121,750 0
Broad Street Corridor Access Improvements 35,000 5,402 - 29,598
Neighborhood Traffic Improvements 179,756 1,410 9,252 169,094
11,723,238 4,791,725 1,756,116 5,175,396
Open Space/Natural Areas Preservation and Maintenance
Urban Forest Maintenance 721,610 453,782 75,168 192,660
Open Space - Annual Asset Maintenance 166,395 72,482 4,137 89,776
Laguna Lake Dredging 653,003 634,918 - 18,085
Open Space Acquisition 278,597 29,395 18,752 230,450
1,819,605 1,190,577 98,057 530,971
Other Services and Projects
Fleet Replacement: Public Works 631,000 9,289 59,619 562,092
Roundabout Public Art Installations 300,000 217,500 - 82,500
Parking Lot Maintenance - Annual Asset Maintenance 279,583 109,577 - 170,006
Multi-space On-Street Pay Stations 17,000 17,000 - -
Fleet Services Vehicle Lift 9,616 9,616 - -
Capital Projects Engineering Staff (6 FTE)500,000 412,928 - 87,072
Multisite Energy Management 137,980 137,980 - -
Electric Vehicle Charing Stations 100,000 - 30,053 69,947
1,975,179 913,890 89,672 971,617
Total Capital Expenditures 25,834,735$ 11,092,269$ 2,905,025$ 11,837,441$
Local Transaction Tax Measure Funding Schedule, continued
For the Fiscal Year Ended June 30, 2022
City of San Luis Obispo
Local Revenue Measure Funded Projects
Includes Legacy Projects and projects funded by Capital Reserve
125
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126
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City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2022
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.
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 CASP 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
127
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City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2022
Page 2
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.
Parkland Development Fund - Quimby. This fund was established to account for parkland in-lieu fees in accordance with the AB
1191 Act, also known as the Quimby Act; it authorizes the City to require residential subdivisions to dedicate land for parks or pay
fees in lieu of dedication. Impact fees may be collected to pay for park land (for projects not involving a subdivision), park
improvements, community centers, recreation facilities, trails, open space, etc.
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 the LOVR add-on impact fee created
for the expansion of capacity for the LOVR interchange at US 101 for construction, project management, and inspection. Though
the project has been completed, the City has an existing reimbursement agreement with Costco Wholesale Corporation for
improvements already constructed at the LOVR interchange.
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.
Major Facility Replacement Fund. This fund accounts for the financing and replacement of major facilities 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 Fund. This fund accumulates revenues from inclusionary housing fees for capital projects related to
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City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2022
Page 3
affordable housing programs and projects.
Transportation Impact Fee Fund. This fund was established to account for construction projects related to transportation facilities
and travel lanes within the City 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.
Parkland Development Impact Fee – Citywide Fund. This fund was created to account for impact fees that were established for the
purpose of acquisition and improvement of community parks and existing park facilities intended for access and use by the entire
city.
OASP Park Development Fund. This fund was established to account for impact fees created for the purpose of acquisition and
improvement of community parks and existing park facilities intended for access and use by the entire city but more specifically by
the Orcutt Area residents as the location of this park projects are in the Orcutt Area.
MASP Park Development Fund. This fund was established to account for impact fees created for the purpose of acquisition and
improvement of community parks and existing park facilities intended for access and use by the entire city but more specifically by
the Margarita Area residents as the location of this park projects are in the Margarita Area.
OASP Transportation Impact Fee Fund. This fund was established to account for construction projects that will be financed
primarily with transportation impact fees within the Orcutt Area Specific Plan in accordance with its Development Agreement
Fire Impact Fee Fund. This fund was established to account for fire department related construction projects that will be
financed primarily with public safety development impact fees.
Police Impact Fee Fund. This fund was established to account for police department related construction projects that will be
financed primarily with public safety development impact fees.
Park Improvement Impact Fee – Citywide Fund. This fund was established to account for construction projects related to park
improvements that will be financed primarily with park in-lieu fees.
SLR Transportation Impact Fee. This fund was established to account for construction projects that will be financed primarily
with transportation impact fees within the San Luis Ranch development, in accordance with its Development Agreement.
Public Safety Equipment Replacement Fund. This fund accounts for the financing and replacement of public safety equipment.
Financing is primarily provided through operating transfers from the General Fund as well as from interest earnings.
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.
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City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2022
Page 4
Capital Improvement Board 2012 Refunding Lease Revenue Bonds. In May 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.
Public Financing Authority 2014 Lease Revenue Bonds. In 2014 the Authority issued $7,580,000 of 2014 Lease Revenue Bonds.
These bonds were issued to finance the expansion of the Los Osos Valley Road interchange at U.S. 101. Debt service related to the
interchange is recorded in the Debt Service Fund.
The Authority 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 engine 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.
2018 Fire Truck. Lease-purchase financing was obtained in order to purchase a fire truck. Debt service obligations are recorded in
the Debt Service Fund.
Public Financing Authority 2018 Lease Revenue Bonds. In 2018 the Authority issued $11,072,775 of 2018 Lease Revenue
Refunding Bonds. These bonds were issued to refinance the outstanding 2005 Revenue Bonds, 2006 Lease Revenue Bonds, and
2009 Lease Revenue Bonds. The original bonds were used to accomplish several high priority capital improvement projects including
the headquarters fire station, seismic safety and HVAC improvements to City Hall, Mission Plaza expansion, and various properties
and street lighting system purchases. Further, the bonds were used to purchase a parking structure and office building and to the
finance the construction of the Public Safety Communications and Emergency Operations Center project.
The Authority has entered into a lease agreement with the City under which the City is responsible for making lease payments to fund
the annual debt service requirements.
2020 Motorola Radio Lease. Lease-purchase financing was obtained in order to purchase new Motorola radios and related equipment
for public safety departments. Debt service obligations are recorded in the Debt Service Fund.
130
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131
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Downtown
BID
Transportation
Development
Act (TDA) Tourism BID Gas Tax
Assets
Cash and investment 29$ 8,681$ 1,113,272$ -$
Accounts receivable - - 257,536 -
Tax receivable - - - -
Accrued interest receivable - - 1,982 -
Cash held by fiscal agent - - - -
Loans receivable - - - -
Total assets 29$ 8,681$ 1,372,790$ -$
Liabilities, Deferred Inflows of
Resources and Fund Balance
Liabilities:
Accounts payable -$ -$ 220,873$ -$
Accrued liabilities - - 4,036 -
Unearned revenue - - - -
Total liabilities - - 224,909 -
Deferred Inflows of Resources:
Unavailable revenue - - - -
Fund balance:
Nonspendable - 8,681 - -
Restricted for:
Debt service - - - -
Transportation projects - - - -
Affordable housing programs - - - -
Impact fee programs - - - -
Parkland development programs - - - -
Public art programs - - - -
Tourism programs - - 1,147,881 -
Public safety program - - - -
Assigned to:
Contingency fund - - - -
Subsequent years expenditures 29 - - -
Total fund balance 29 8,681 1,147,881 -
29$ 8,681$ 1,372,790$ -$
City of San Luis Obispo, California
Combining Balance Sheets
Nonmajor Governmental Funds
June 30, 2022
Special Revenue Funds
Total liabilities, deferred inflows of resources, and fund
balance
132
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Community
Development
Block Grant
(CDBG)
Law
Enforcement
Grants
Public Art
Contributions
SB1 Road
Repair
SB1186 CASP
Certify
Parkland
In-Lieu Fee
Open Space
Protection
108,574$ 55,000$ 804,244$ 740,408$ 111,845$ 3,117,272$ 12,920$
- 65,221 - - - - -
- - - 165,443 - - -
648,482 - 1,433 1,277 211 12,429 29
- - - - - - -
1,112,944 - - - - 143,044 -
1,870,000$ 120,221$ 805,677$ 907,128$ 112,056$ 3,272,745$ 12,949$
-$ 52,300$ 7,639$ -$ -$ 15,945$ -$
- - - - - - -
- 863 - - - - -
- 53,163 7,639 - - 15,945 -
1,761,425 - - - - 149,602 -
- - - - - - -
- - - - - - -
- - - 907,128 112,056 - -
108,575 - - - - - -
- - - - - - -
- - - - - 3,107,198 -
- - 798,038 - - - -
- - - - - - -
- 67,058 - - - - -
- - - - - - -
- - - - - - 12,949
108,575 67,058 798,038 907,128 112,056 3,107,198 12,949
1,870,000$ 120,221$ 805,677$ 907,128$ 112,056$ 3,272,745$ 12,949$
Special Revenue Funds Capital Projects Funds
133
Page 1005 of 1069
City of San Luis Obispo, California
Combining Balance Sheets
Nonmajor Governmental Funds, continued
Airport Area
Impact Fee
LOVR Sub-
Area Fee
Fleet
Replacement
Info Tech
Replacement
Assets
Cash and investment 674,261$ 583,299$ 2,612,864$ 3,886,420$
Accounts receivable - - - -
Tax receivable - - - -
Accrued interest receivable 1,275 1,066 3,587 -
Cash held by fiscal agent - - - -
Loans receivable - - - -
Total assets 675,536$ 584,365$ 2,616,451$ 3,886,420$
Liabilities, Deferred Inflows of
Resources and Fund Balance
Liabilities:
Accounts payable -$ -$ 1,896$ 6,155$
Accrued liabilities - - - -
Unearned revenue - - - 600,000
Total liabilities - - 1,896 606,155
Deferred Inflows of Resources:
Unavailable revenue - - - -
Fund balance:
Nonspendable - - - -
Restricted for:
Debt service - - - -
Transportation projects - - - -
Affordable housing programs - - - -
Impact fee programs 675,536 584,365 - -
Parkland development programs - - - -
Public art programs - - - -
Tourism programs - - - -
Public safety program - - - -
Assigned to:
Contingency fund - - 500,000 400,000
Subsequent years expenditures - - 2,114,555 2,880,265
Total fund balance 675,536 584,365 2,614,555 3,280,265
675,536$ 584,365$ 2,616,451$ 3,886,420$
June 30, 2022
Total liabilities, deferred inflows of resources, and fund
balance
Capital Projects Funds
134
Page 1006 of 1069
Affordable
Housing
Transportation
Impact Fee Infrastructure
Public Safety
Development
Impact Fee
Parkland
Development
Impact Fee-
Citywide OASP Park MASP Park
3,812,404$ 7,793,366$ 13,988,177$ -$ 656,891$ 2,039,747$ 1,665,767$
- - - - - - -
- - - - - - -
1,806,969 114,635 - - 59,515 3,804 3,148
- - - - - - -
9,001,843 1,164,368 - - 446,826 - -
14,621,216$ 9,072,369$ 13,988,177$ -$ 1,163,232$ 2,043,551$ 1,668,915$
-$ 776,798$ -$ -$ -$ -$ -$
- - - - - - -
2,964,467 - 9,200,000 - - - -
2,964,467 776,798 9,200,000 - - - -
1,872,010 1,263,705 - - 505,203 - -
- - - - - - -
- - - - - - -
- 7,031,866 - - - - -
9,784,739 - - - - - -
- - - - 658,029 2,043,551 1,668,915
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- - 4,788,177 - - - -
9,784,739 7,031,866 4,788,177 - 658,029 2,043,551 1,668,915
14,621,216$ 9,072,369$ 13,988,177$ -$ 1,163,232$ 2,043,551$ 1,668,915$
Capital Projects Funds
135
Page 1007 of 1069
City of San Luis Obispo, California
Combining Balance Sheets
Nonmajor Governmental Funds, continued
OASP
Transportation
Impact Fee
Fire Impact
Fee
Police Impact
Fee
Park
Improvement
Impact Fee-
Citywide
Assets
Cash and investment 1,389,630$ 199,861$ 245,017$ 1,006,860$
Accounts receivable - - - -
Tax receivable - - - -
Accrued interest receivable 2,625 7,383 2,812 3,137
Cash held by fiscal agent - - - -
Loans receivable - 78,276 56,781 82,807
Total assets 1,392,255$ 285,520$ 304,610$ 1,092,804$
Liabilities, Deferred Inflows of
Resources and Fund Balance
Liabilities:
Accounts payable -$ -$ -$ -$
Accrued liabilities - - - -
Unearned revenue - - - -
Total liabilities - - - -
Deferred Inflows of Resources:
Unavailable revenue - 85,301 59,164 84,189
Fund balance:
Nonspendable - - - -
Restricted for:
Debt service - - - -
Transportation projects - - - -
Affordable housing programs - - - -
Impact fee programs 1,392,255 200,219 245,446 1,008,615
Parkland development programs - - - -
Public art programs - - - -
Tourism programs - - - -
Public safety program - - - -
Assigned to:
Contingency fund - - - -
Subsequent years expenditures - - - -
Total fund balance 1,392,255 200,219 245,446 1,008,615
1,392,255$ 285,520$ 304,610$ 1,092,804$
June 30, 2022
Capital Projects Funds
Total liabilities, deferred inflows of resources, and fund
balance
136
Page 1008 of 1069
SLR
Transportation
Impact Fee
Public Safety
Equipment
Replacement
Fund Debt Service
Total
Nonmajor
Governmental
Funds
458,142$ 805,012$ 2,118,745$ 50,008,708$
- - - 322,757
- - - 165,443
713 - - 2,676,512
- - 421,510 421,510
- - - 12,086,889
458,855$ 805,012$ 2,540,255$ 65,681,819$
-$ 7,222$ -$ 1,088,828$
- - - 4,036
- - - 12,765,330
- 7,222 - 13,858,194
- - - 5,780,599
- - - 8,681
- - 2,540,255 2,540,255
- - - 8,051,050
- - - 9,893,314
458,855 - - 8,935,786
- - - 3,107,198
- - - 798,038
- - - 1,147,881
- 797,790 - 864,848
- - - 900,000
- - - 9,795,975
458,855 797,790 2,540,255 46,043,026
458,855$ 805,012$ 2,540,255$ 65,681,819$
Capital Projects Funds
137
Page 1009 of 1069
Downtown
BID
Transportation
Development
Act (TDA) Tourism BID Gas Tax
Revenues:
Use of money and property -$ -$ (23,302)$ -$
Subventions and grants - 53,681 - 1,130,064
Charges for services 227,202 - 2,127,375 -
Other revenues - - 7,616 -
Total revenues 227,202 53,681 2,111,689 1,130,064
Expenditures:
Current:
General Government - - - -
Public safety - - - -
Transportation - - - -
Leisure, cultural and social services - - - -
Community development 222,141 - 1,604,475 -
Debt service:
Principal - - - -
Interest and fiscal charges - - - -
Capital:
General Government - - - -
Public safety - - - -
Transportation - - - -
Leisure, cultural and social services - - - -
Total expenditures 222,141 - 1,604,475 -
Excess (deficiency) of revenues over
(under) expenditures 5,061 53,681 507,214 1,130,064
Other financing sources (uses):
Transfers in - - - -
Transfers out - (45,000) (37,887) (1,130,064)
Total other financing
sources (uses) - (45,000) (37,887) (1,130,064)
Net change in fund balance 5,061 8,681 469,327 -
(5,032) - 678,554 -
Fund balance (deficit),
end of year 29$ 8,681$ 1,147,881$ -$
Fund balance, beginning of year,
as restated
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, 2022
138
Page 1010 of 1069
Community
Development
Block Grant
(CDBG)
Law
Enforcement
Grants
Public Art
Contributions
SB1 Road
Repair
SB1186 ASP
Certify
Parkland
In-Lieu Fee
Open Space
Protection
-$ -$ (16,319)$ (23,626)$ (2,609)$ (84,394)$ (467)$
- 165,983 - 935,475 - - -
- 802 99,698 - 28,977 117,604 -
36,482 - - - - 8,915 -
36,482 166,785 83,379 911,849 26,368 42,125 (467)
- - - - - - -
- 163,145 - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- - - 914,730 - - -
- - 296,242 - - 340,395 -
- 163,145 296,242 914,730 - 340,395 -
36,482 3,640 (212,863) (2,881) 26,368 (298,270) (467)
- - 442,500 - - - -
(36,482) - - - - - (6,900)
(36,482) - 442,500 - - - (6,900)
- 3,640 229,637 (2,881) 26,368 (298,270) (7,367)
108,575 63,418 568,401 910,009 85,688 3,405,468 20,316
108,575$ 67,058$ 798,038$ 907,128$ 112,056$ 3,107,198$ 12,949$
Capital Projects FundsSpecial Revenue Funds
139
Page 1011 of 1069
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, 2022
Airport Area
Impact Fee
LOVR Sub-
Area Fee
Fleet
Replacement
Info Tech
Replacement
Revenues:
Use of money and property (21,171)$ (12,091)$ (34,561)$ (5,227)$
Subventions and grants - - - -
Charges for services 1,508 126,726 - 179,677
Other revenues - - 53,307 -
Total revenues (19,663) 114,635 18,746 174,450
Expenditures:
Current:
General Government - - - -
Public safety - - - -
Transportation - - - -
Leisure, cultural and social services - - - -
Community development - - - -
Debt service:
Principal - - - -
Interest and fiscal charges - - - -
Capital:
General Government - - 10,853 505,982
Public safety - - 232,435 -
Transportation 201,495 - - -
Leisure, cultural and social services - - - -
Total expenditures 201,495 - 243,288 505,982
Excess (deficiency) of revenues over
(under) expenditures (221,158) 114,635 (224,542) (331,532)
Other financing sources (uses):
Transfers in - - 1,615,000 1,075,640
Transfers out - - - (208,290)
Total other financing
sources (uses) - - 1,615,000 867,350
Net change in fund balance (221,158) 114,635 1,390,458 535,818
Fund balance, beginning of year, as restated 896,694 469,730 1,224,097 2,744,447
Fund balance (deficit),
end of year 675,536$ 584,365$ 2,614,555$ 3,280,265$
Capital Projects Funds
140
Page 1012 of 1069
Affordable
Housing
Transportation
Impact Fee Infrastructure
Public Safety
Development
Impact Fee
Parkland
Development
Impact Fee-
Citywide OASP Park MASP Park
(37,152)$ (236,024)$ (4,774)$ -$ (13,138)$ (51,551)$ (38,915)$
- - 86,583 - - - -
411,875 1,715,909 - - 121,734 130,976 74,989
153,171 - - - - - -
527,894 1,479,885 81,809 - 108,596 79,425 36,074
- - - - - - -
- - - - - - -
- 312,156 - - - - -
- - - - - 284,404 -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- 3,380,160 9,422 - - - -
- - - - - - -
- 3,692,316 9,422 - - 284,404 -
527,894 (2,212,431) 72,387 - 108,596 (204,979) 36,074
- - 2,757,545 - - - -
(87,000) (280,000) (476,971) (188,355) - - -
(87,000) (280,000) 2,280,574 (188,355) - - -
440,894 (2,492,431) 2,352,961 (188,355) 108,596 (204,979) 36,074
9,343,845 9,524,297 2,435,216 188,355 549,433 2,248,530 1,632,841
9,784,739$ 7,031,866$ 4,788,177$ -$ 658,029$ 2,043,551$ 1,668,915$
Capital Projects Funds
141
Page 1013 of 1069
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, 2022
OASP
Transportation
Impact Fee
Fire Impact
Fee
Police Impact
Fee
Park
Improvement
Impact Fee-
Citywide
Revenues:
Use of money and property (29,353)$ (16,497)$ (19,445)$ (20,015)$
Subventions and grants - - - -
Charges for services 728,999 64,597 89,876 190,868
Other revenues - - - -
Total revenues 699,646 48,100 70,431 170,853
Expenditures:
Current:
General Government - - - -
Public safety - - - -
Transportation - - - -
Leisure, cultural and social services - - - -
Community development - - - -
Debt service:
Principal - - - -
Interest and fiscal charges - - - -
Capital:
General Government - - - -
Public safety - - - -
Transportation - - - -
Leisure, cultural and social services - - - -
Total expenditures - - - -
Excess (deficiency) of revenues over
(under) expenditures 699,646 48,100 70,431 170,853
Other financing sources (uses):
Transfers in - 85,996 102,359 -
Transfers out - - - -
Total other financing
sources (uses) - 85,996 102,359 -
Net change in fund balance 699,646 134,096 172,790 170,853
Fund balance, beginning of year, as restated 692,609 66,123 72,656 837,762
Fund balance (deficit),
end of year 1,392,255$ 200,219$ 245,446$ 1,008,615$
Capital Projects Funds
142
Page 1014 of 1069
SLR
Transportation
Impact Fee
Public Safety
Equipment
Replacement
Fund Debt Service
Total
Nonmajor
Governmental
Funds
(2,187)$ -$ 21$ (692,797)$
- - - 2,371,786
457,690 - - 6,897,082
- - - 259,491
455,503 - 21 8,835,562
- - 7,440 7,440
- 101,554 - 264,699
- - - 312,156
- - - 284,404
- - - 1,826,616
- - 1,467,402 1,467,402
- - 774,747 774,747
- - - 516,835
- - - 232,435
6,648 - - 4,512,455
- - - 636,637
6,648 101,554 2,249,589 10,835,826
448,855 (101,554) (2,249,568) (2,000,264)
10,000 929,344 2,214,456 9,232,840
- (30,000) - (2,526,949)
10,000 899,344 2,214,456 6,705,891
458,855 797,790 (35,112) 4,705,627
- - 2,575,367 41,337,399
458,855$ 797,790$ 2,540,255$ 46,043,026$
Capital Projects Funds
143
Page 1015 of 1069
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Charges for services
Assessments 245,000$ 245,000$ 227,202$ (17,798)$
Total Revenues 245,000 245,000 227,202 (17,798)
Expenditures:
Current
Community development 245,000 245,000 222,141 22,859
Total Expenditures 245,000 245,000 222,141 22,859
Excess of Revenues Over Expenditures - - 5,061 5,061
Net Change in Fund Balance - - 5,061 5,061
Fund Balance, Beginning of Year (5,032) (5,032) (5,032) -
Fund Balance, End of Year (5,032)$ (5,032)$ 29$ 5,061$
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, 2022
Budget
144
Page 1016 of 1069
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2022
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Subventions and grants 45,900$ 45,900$ 53,681$ 7,781$
Total Revenues 45,900 45,900 53,681 7,781
Excess of Revenues Over Expenditures 45,900 45,900 53,681 7,781
Other Financing Uses:
Operating transfers out (45,900) (97,129) (45,000) 52,129
Net Change in Fund Balance - (51,229) 8,681 59,910
Fund Balance, Beginning of Year - - - -
Fund Balance, End of Year -$ (51,229)$ 8,681$ 59,910$
Transportation Development Act (TDA)
Budget
145
Page 1017 of 1069
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2022
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property 1,400$ 1,400$ (23,302)$ (24,702)$
Assessments 1,442,600 1,442,600 2,127,375 684,775
Total Revenues 1,444,000 1,444,000 2,111,689 667,689
Expenditures:
Current
Community development 1,451,127 1,858,227 1,604,475 253,752
Total Expenditures 1,451,127 1,858,227 1,604,475 253,752
Excess of Revenues Over (Under) Expenditures (7,127) (414,227) 507,214 921,441
Other Financing Uses:
Operating transfers out (28,852) (28,852) (37,887) (9,035)
Net Change in Fund Balance (35,979) (443,079) 469,327 912,406
Fund Balance, Beginning of Year 678,554 678,554 678,554 -
Fund Balance, End of Year 642,575$ 235,475$ 1,147,881$ 912,406$
Tourism Business Improvement District Fund
Budget
146
Page 1018 of 1069
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2022
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Subventions and grants 1,223,937$ 1,223,937$ 1,130,064$ (93,873)$
Total Revenues 1,223,937 1,223,937 1,130,064 (93,873)
Excess of Revenues Over Expenditures 1,223,937 1,223,937 1,130,064 (93,873)
Other Financing Uses:
Operating transfers out (1,223,937) (1,223,937) (1,130,064) 93,873
Net Change in Fund Balance - - - -
Fund Balance, Beginning of Year - - - -
Fund Balance, End of Year -$ -$ -$ -$
Gas Tax
Budget
147
Page 1019 of 1069
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2022
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Subventions and grants -$ -$ -$ -$
Total Revenues - - 36,482 36,482
Expenditures:
Current
Community development - - - -
Total Expenditures - - - -
Excess of Revenues Over (Under) Expenditures - - 36,482 36,482
Other Financing Uses:
Operating transfers out - - (36,482) (36,482)
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
148
Page 1020 of 1069
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2022
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Subventions and grants 113,000$ 113,000$ 165,983$ 52,983$
Charges for services 2,142 - 802 802
Total Revenues 115,142 113,000 166,785 53,785
Expenditures:
Public Safety - 36,043 163,145 (127,102)
Total Expenditures - 36,043 163,145 (127,102)
Excess of Revenues Over (Under) Expenditures 115,142 76,957 3,640 (73,317)
Other Financing Uses:
Operating transfers out - - - -
Net Change in Fund Balance 115,142 76,957 3,640 (73,317)
Fund Balance, Beginning of Year 63,418 63,418 63,418 -
Fund Balance, End of Year 178,560$ 140,375$ 67,058$ (73,317)$
Budget
Law Enforcement Grants Fund
149
Page 1021 of 1069
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2022
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property 2,100$ 2,100$ (16,319)$ (18,419)$
Other revenues 15,000 15,000 99,698 84,698
Total Revenues 17,100 17,100 83,379 66,279
Expenditures:
Capital Projects 442,500 522,278 296,242 226,036
Total Expenditures 442,500 522,278 296,242 226,036
Excess of Revenues Over (Under) Expenditures (425,400) (505,178) (212,863) 292,315
Other Financing Uses:
Operating transfers in 442,500 442,500 -
Net Change in Fund Balance (425,400) (62,678) 229,637 292,315
Fund Balance, Beginning of Year 568,401 568,401 568,401 -
Fund Balance, End of Year 143,001$ 505,723$ 798,038$ 292,315$
Budget
Public Art Contributions Fund
150
Page 1022 of 1069
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2022
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property -$ -$ (23,626)$ (23,626)$
Subventions and grants 915,000 915,000 935,475 20,475
Total Revenues 915,000 915,000 911,849 (3,151)
Expenditures:
Capital Projects 914,731 1,470,525 914,730 555,795
Total Expenditures 914,731 1,470,525 914,730 555,795
Excess of Revenues Over (Under) Expenditures 269 (555,525) (2,881) 552,644
Net Change in Fund Balance 269 (555,525) (2,881) 552,644
Fund Balance, Beginning of Year 910,009 910,009 910,009 -
Fund Balance, End of Year 910,278$ 354,484$ 907,128$ 552,644$
Budget
SB1 Road Repair Fund
151
Page 1023 of 1069
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2022
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property -$ -$ (2,609)$ (2,609)$
Charges for services - - 28,977 28,977
Total Revenues - - 26,368 26,368
Net Change in Fund Balance (85,461) (85,461) 26,368 111,829
Fund Balance, Beginning of Year 85,688 85,688 85,688 -
Fund Balance, End of Year 227$ 227$ 112,056$ 111,829$
SB1186 CASP Certify
Budget
152
Page 1024 of 1069
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2022
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property -$ -$ 21$ 21$
Total Revenues - - 21 21
Expenditures:
General Government - - 7,440 (7,440)
Principal 1,453,459 1,453,459 1,467,402 (13,943)
Interest and fiscal charges 760,996 760,996 774,747 (13,751)
Total Expenditures 2,214,455 2,214,455 2,249,589 (35,134)
Excess of Revenues Over (Under) Expenditures (2,214,455) (2,214,455) (2,249,568) (35,113)
Other Financing Uses:
Operating transfers in 2,214,456 2,214,456 2,214,456 -
Total other Financing Uses:2,214,456 2,214,456 2,214,456 -
Net Change in Fund Balance 1 1 (35,112) (35,113)
Fund Balance, Beginning of Year 2,575,367 2,575,367 2,575,367 -
Fund Balance, End of Year 2,575,368$ 2,575,368$ 2,540,255$ (35,113)$
Budget
Debt Service Fund
153
Page 1025 of 1069
154
Page 1026 of 1069
City of San Luis Obispo, California
Custodial Funds
For the Fiscal Year Ended June 30, 2022
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.
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.
San Luis Ranch CFD Fund. This fund was established to account for the financial activities of the San Luis Ranch Community
Facilities District (CFD). The CFD is the City's first Mello-Roos district. Property taxes collected on properties within the CFD
will be used to pay for debt service on the related infrastructure constructed within the district.
155
Page 1027 of 1069
Hazardous
Whale Jack Materials Task
Rock Fund House Fund Force Fund
ASSETS
Cash and investments 4,443,600$ 18,948$ 149,534$
Receivables:
Accounts 16,549 - -
Interest 8,433 36 288
Prepaid items - - -
Capital assets 789,639 - -
Total assets 5,258,221 18,984 149,822
LIABILITIES
Accounts payable 48,122 - 2,477
Compensated absence 54,086 - -
Accrued Salaries 10,631 - 256
Other liabilities 2,000 - -
Total liabilities 114,839 - 2,733
NET POSITION
Restricted for
Individuals, organizations, and other governments 5,143,382 18,984 147,089
Total net position 5,143,382$ 18,984$ 147,089$
City of San Luis Obispo
Combining Statement of Fiduciary Net Position
Custodial Funds
For the year ended June 30, 2022
156
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General Boysen Ranch Total
Agency Conservation PEG City of San Luis Ranch PEG Custodial
Fund Easement San Luis Obispo CFD SLCUSD Funds
3,052,972$ 407,308$ 115,989$ 145,667$ 395,351$ 8,729,369$
- - - - - 16,549
- 770 213 308 741 10,789
- - - - - -
- - - - - 789,639
3,052,972 408,078 116,202 145,975 396,092 9,546,346
25,302 2,844 - - 307,160 385,905
- - - - - 54,086
- - - - - 10,887
- - - - - 2,000
25,302 2,844 - - 307,160 452,878
3,027,670 405,234 116,202 145,975 88,932 9,093,468
3,027,670$ 405,234$ 116,202$ 145,975$ 88,932$ 9,093,468$
157
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Hazardous
Whale Jack Materials Task
Rock Fund House Fund Force Fund
ADDITIONS:
Assessment revenue -$ -$ -$
Charges for services 949,126 - 65,000
Charges for public programming - - -
Contribution from developers - - -
Other revenue 1,552,897 319 9
Use of money and property (107,364) (470) (4,377)
Total additions 2,394,659 (151) 60,632
DEDUCTIONS:
Administration expenses 186,697 - 12,679
Contractual services 1,004,354 - 24,336
Materials and supplies 77,602 - 11,842
Public programming - - -
Use of developer deposits - - -
Depreciation 63,459 - -
Total deductions 1,332,112 - 48,857
Net increase (decrease) in fiduciary net position 1,062,547 (151) 11,775
NET POSITION:
Beginning of year, as restated 4,080,835 19,135 135,314
End of year 5,143,382$ 18,984$ 147,089$
City of San Luis Obispo
Combining Statement of Changes in Fiduciary Net Position
Custodial Funds
For the year ended June 30, 2022
158
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General Boysen Ranch Total
Agency Conservation PEG City of San Luis Ranch PEG Custodial
Fund Easement San Luis Obispo CFD SLCUSD Funds
-$ -$ -$ 152,848$ -$ 152,848$
- - - - - 1,014,126
- - - - 39,951 39,951
1,704,858 - - - - 1,704,858
- - 39,766 55,000 - 1,647,991
- (10,273) (3,587) (2,633) (9,276) (137,980)
1,704,858 (10,273) 36,179 205,215 30,675 4,421,794
- - - 59,240 - 258,616
- 11,739 - - 307,160 1,347,589
- - - - - 89,444
- - 65,750 - - 65,750
416,978 - - - - 416,978
- - - - - 63,459
416,978 11,739 65,750 59,240 307,160 2,241,836
1,287,880 (22,012) (29,571) 145,975 (276,485) 2,179,958
1,739,790 427,246 145,773 - 365,417 6,913,510
3,027,670$ 405,234$ 116,202$ 145,975$ 88,932$ 9,093,468$
159
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160
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STATISTICAL SECTION (UNAUDITED)
161
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162
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City of San Luis Obispo, California
Statistical Section Overview
For the Fiscal Year Ended June 30, 2022
This part of the City of San Luis Obispo’s annual comprehensive financial report presents detailed information as a context for
understanding what the information in the financial statements, note disclosures, and required supplementary information says about
the government’s overall financial health.
Contents
Financial Trends – Schedules 1-6. These schedules contain trend information to help the reader understand how the City’s financial
performance and well-being have changed over time.
Revenue Capacity – Schedules 7-13. These schedules contain information to help the reader assess the government’s most significant
local revenue sources, sales and property taxes.
Debt Capacity – Schedules 14-19. These schedules present information to help the reader assess the affordability of the City’s current
levels of outstanding debt and the City’s ability to issue additional debt in the future.
Demographic and Economic Information – Schedules 20-22. These schedules offer demographic and economic indicators to help
the reader understand the environment within which the government’s financial activities take place.
Operating Information – Schedules 23-26. These schedules contain service and infrastructure data to help the reader understand
how the information in the City’s financial report relates to the services the government provides and the activities it performs.
163
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2012-132013-142014-152015-162016-172017-182018-192019-202020-212021-22Governmental activities: Net investment in capital assets142,239,500$ 145,266,043$ 150,430,226$ 163,449,992$ 165,100,426$ 171,472,251$ 174,431,254$ 177,335,648$ 184,387,289$ 193,984,593$ Restricted2,374,800 4,825,662 2,350,838 2,762,387 2,268,499 421,954 20,458,677 29,901,136 35,603,121 41,770,187 Unrestricted29,927,200 (66,610,104) (57,421,778) (49,031,893) (41,496,841) (49,909,657) (72,041,172) (73,806,116) (62,369,688) (57,458,111) Total governmental activities net position174,541,500$ 83,481,601$ 95,359,286$ 117,180,486$ 125,872,084$ 121,984,548$ 122,848,759$ 133,430,668$ 157,620,722$ 178,296,669$ Business-type activities: Net investment in capital assets123,510,200$ 119,116,303$ 125,801,845$ 128,390,611$ 131,149,516$ 136,694,402$ 139,659,544$ 149,617,018$ 160,750,886$ 153,643,418$ Restricted2,254,200 2,248,979 2,261,213 2,278,392 2,276,526 1,558,795 500,645 4,037,611 2,493,859 2,684,781 Unrestricted41,712,200 35,224,987 42,117,143 49,495,220 53,421,102 50,866,147 57,379,689 53,983,005 53,159,080 84,056,287 Total business-type activities net position167,476,600$ 156,590,269$ 170,180,201$ 180,164,223$ 186,847,144$ 189,119,344$ 197,539,878$ 207,637,634$ 216,403,825$ 240,384,486$ Primary government (City wide totals): Net investment in capital assets265,749,700$ 264,382,346$ 276,232,071$ 291,840,603$ 296,249,942$ 308,166,653$ 314,090,798$ 326,952,666$ 345,138,175$ 347,628,011$ Restricted4,629,000 7,074,641 4,612,051 5,040,779 4,545,025 1,980,749 20,959,322 33,938,747 38,096,980 44,454,968 Unrestricted71,639,400 (31,385,117) (15,304,635) 463,327 11,924,261 956,490 (14,661,483) (19,823,111) (9,210,608) 26,598,176 Total primary government net position342,018,100$ 240,071,870$ 265,539,487$ 297,344,709$ 312,719,228$ 311,103,892$ 320,388,637$ 341,068,302$ 374,024,547$ 418,681,155$ City of San Luis Obispo, CaliforniaSchedule 1Net Assets by ComponentLast Ten Fiscal Years(Accrual basis of accounting)164 Page 1036 of 1069
2012-13 2013-14 2014-15 2015-16 2016-172017-182018-192019-202020-212021-22Expenses:Governmental activities:Public safety28,859,200$ 29,651,702$ 26,881,732$ 29,318,821$ 31,806,692$ 42,097,557$ 34,320,108$ 34,670,383$ 35,226,779$ 41,132,177$ Transportation8,551,500 8,975,047 11,457,311 8,792,028 9,668,840 9,229,042 7,546,278 7,416,335 8,137,479 10,395,516 Culture and recreation10,078,700 10,239,853 10,332,740 9,808,545 9,824,262 11,125,792 9,469,520 10,063,304 11,122,003 12,407,720 Community development8,866,900 10,183,782 10,960,778 12,900,275 14,656,604 13,457,993 12,573,953 11,882,018 11,918,019 15,506,092 General Government- - - - - - 22,429,785 22,058,724 17,276,491 20,982,321 Interest on long-term debt1,217,200 1,221,205 1,015,011 1,351,468 1,170,984 1,488,183 702,885 839,661 731,045 699,284 Total governmental activities expenses57,573,500 60,271,589 60,647,572 62,171,137 67,127,382 77,398,567 87,042,529 86,930,425 84,411,816 101,123,110 Business-type activities:Water17,019,000 17,575,961 17,128,041 18,136,120 19,069,967 19,523,736 20,986,430 22,914,013 21,469,967 20,892,863 Sewer10,189,400 10,647,255 10,132,214 10,842,451 11,683,262 14,158,612 13,967,717 13,100,905 15,064,551 12,576,058 Parking3,678,600 3,636,607 3,556,637 3,900,052 3,791,493 4,098,840 4,088,681 4,145,364 4,057,242 4,517,125 Transit3,903,900 4,059,138 3,994,194 4,088,423 4,076,871 4,355,103 4,320,976 4,384,344 4,023,536 3,851,264 Total business-type activities expenses34,790,900 35,918,961 34,811,086 36,967,046 38,621,593 42,136,291 43,363,804 44,544,626 44,615,296 41,837,310 Total primary government expenses92,364,400$ 96,190,550$ 95,458,658$ 99,138,183$ 105,748,975$ 119,534,858$ 130,406,333$ 131,475,051$ 129,027,112$ 142,960,420$ Program Revenues:Governmental activities:Charges for services:Public safety1,599,000$ 1,589,278$ 1,697,748$ 1,673,800$ 1,771,383$ 1,881,725$ 1,633,223$ 3,045,294$ 3,991,193$ 3,197,692$ Transportation221,200 1,321,323 1,270,787 1,691,757 1,793,010 1,669,563 2,399,692 531,424 91,509 636,874 Culture and recreation1,926,800 3,048,274 2,155,411 2,048,780 3,501,837 3,487,225 4,078,539 2,508,565 3,430,224 4,046,439 Community development 4,126,400 4,981,211 7,210,132 7,974,880 8,144,128 7,355,831 9,941,951 11,812,417 15,929,420 10,509,106 General Government - - - - - - 1,391,940 760,606 654,039 530,775 Operating grants and contributions 2,814,700 2,412,469 2,509,323 2,667,058 2,488,706 4,015,502 2,990,211 4,828,837 3,601,973 3,647,813 Capital grants and contributions 1,991,900 3,680,440 7,911,867 9,355,707 40,531 39,781 47,234 2,504,722 5,688,200 1,531,157 Total governmental activities program revenues 12,680,000 17,032,995 22,755,268 25,411,982 17,739,595 18,449,627 22,482,790 25,991,865 33,386,558 24,099,856 Business-type activities:Charges for services:Water 18,148,200$ 19,755,909$ 20,446,730$ 19,884,850$ 20,180,931$ 22,202,069$ 24,026,385$ 25,666,777$ 28,340,076$ 29,894,129$ Sewer 16,212,000 17,151,212 18,007,064 16,460,140 16,272,533 16,753,094 18,674,547 19,042,384 21,501,546 23,642,048 Parking 4,693,400 3,998,730 4,905,494 7,408,729 4,666,970 5,226,780 5,443,038 3,293,941 2,567,908 4,890,317 Transit682,700 688,585 649,899 659,471 666,296 703,451 776,808 633,566 331,352 713,777 Operating grants and contributions2,673,500 2,458,640 3,148,651 2,888,820 4,180,386 3,099,618 3,259,975 4,712,832 3,742,594 5,156,782 Capital grants and contributions731,300 82,359 60,063 - - - - - - - Total business-type activities programs revenues43,141,100 44,135,435 47,217,901 47,302,010 45,967,116 47,985,012 52,180,753 53,349,500 56,483,476 64,297,053 Total primary government program revenues55,821,100$ 61,168,430$ 69,973,169$ 72,713,992$ 63,706,711$ 66,434,639$ 74,663,543$ 79,341,365$ 89,870,034$ 88,396,909$ Net Revenues (Expenses):Governmental activities(44,893,500)$ (43,238,594)$ (37,892,304)$ (36,759,155)$ (49,387,787)$ (58,948,940)$ (64,559,739)$ (60,938,560)$ (51,025,258)$ (77,023,254)$ Business-type activities8,350,200 8,216,474 12,406,815 10,334,964 7,345,523 5,848,721 8,816,949 8,804,874 11,868,180 22,459,743 Total primary government(36,543,300)$ (35,022,120)$ (25,485,489)$ (26,424,191)$ (42,042,264)$ (53,100,219)$ (55,742,790)$ (52,133,686)$ (39,157,078)$ (54,563,511)$ Schedule 2City of San Luis Obispo, CaliforniaChanges in Net Position, Last Ten Fiscal Years(Accrual Basis of Accounting)165 Page 1037 of 1069
2012-13 2013-14 2014-15 2015-16 2016-172017-182018-192019-202020-212021-22Schedule 2City of San Luis Obispo, CaliforniaChanges in Net Position, Last Ten Fiscal Years(Accrual Basis of Accounting)General Revenues and Other Changes in Net Position:Governmental activities:Sales and use taxes 20,736,000$ 22,180,173$ 22,408,980$ 24,676,377$ 24,068,665$ 24,559,570$ 26,444,775$ 24,125,439$ 32,847,453$ 51,419,561$ Property taxes 9,176,600 8,960,010 9,631,890 10,186,858 10,756,477 11,425,510 12,238,357 13,301,736 14,197,869 14,716,412 Transient occupancy tax5,572,400 6,063,232 6,805,742 7,127,756 7,381,989 7,514,289 8,061,087 6,325,841 6,960,035 10,650,762 Utility users tax4,916,100 5,345,342 5,211,207 5,413,720 5,539,407 5,627,356 4,919,892 5,439,144 5,225,979 5,338,325 Property tax in-lieu of vehicle license fees 3,533,200 3,645,692 3,849,341 4,113,244 4,353,912 4,637,253 4,961,080 5,290,215 5,660,661 5,994,592 Other taxes and fees 4,607,600 4,779,570 4,993,285 4,800,592 3,929,377 5,006,594 4,332,557 4,883,677 5,578,944 5,800,333 Investment earnings 237,100 566,931 467,348 825,760 997,995 164,434 1,618,354 3,368,951 435,818 (1,638,993) Miscellaneous and other 349,900 679,127 707,781 - - - 146,579 1,001,369 1,019,626 1,213,401 Gain (loss) on disposal of capital assets (11,000) - - - - - - - - - Prior period adjustment 2,657,100 (833,234) - - - - - - 745,285 - Cumulative change in accounting principle (GASB 65) (345,400) - - - - - - - - - Transfers 115,100 (73,771) (329,452) 1,436,048 1,051,563 1,198,027 2,456,035 1,889,900 1,992,911 1,685,314 Total governmental activities 51,544,700 51,313,072 53,746,122 58,580,355 58,079,385 60,133,033 65,178,716 65,626,272 74,664,581 95,179,707 Business-type activitiesInvestment earnings73,500$ 364,551$ 361,627$ 845,906$ 182,261$ 320,471$ 2,516,216$ 2,880,634$ 577,250$ (1,207,118)$ Cumulative change in accounting principle(842,600) - - - - - - - - - Income from investment in joint venture- - - 239,200 206,700 209,300 (25,469) 153,949 519,677 585,101 Prior period adjustment- - - - - - - - (907,350) - Transfers(115,100) 73,771 329,452 (1,436,048) (1,051,563) (1,198,027) (2,456,035) (1,889,900) (1,992,911) (1,685,314) Total business-type activities(884,200) 438,322 691,079 (350,942) (662,602) (668,256) 34,712 1,144,683 (1,803,334) (2,307,331) Total primary government50,660,500$ 51,751,394$ 54,437,201$ 58,229,413$ 57,416,783$ 59,464,777$ 65,213,428$ 66,770,955$ 72,861,247$ 92,872,376$ Change in net position:Governmental activities6,651,200$ 8,074,478$ 15,853,818$ 21,821,200$ 8,691,598$ 1,184,093$ 618,977$ 4,687,712$ 23,639,323$ 18,156,453$ Business-type activities7,466,000 8,654,796 13,097,894 9,984,022 6,682,921 5,180,465 8,851,661 9,949,557 10,064,846 20,152,412 Total primary government14,117,200$ 16,729,274$ 28,951,712$ 31,805,222$ 15,374,519$ 6,364,558$ 9,470,638$ 14,637,269$ 33,704,169$ 38,308,865$ 166 Page 1038 of 1069
2012-132013-142014-152015-162016-172017-182018-192019-202020-212021-22General fund: Reserved‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ Unreserved: Nonspendable: Prepaid items2,777,000 3,191,055 60,181 56,020 3,173,248 3,520,473 51,636 - 41,155 90,797 Restricted for: (Note 1) Debt service331,600 312,037 303,126 489,056 128,102 159,724 - - - - Committed to: (Note 1) General government programs1,768,200 4,973,497 3,942,459 4,468,863 9,428,034 8,693,113 - - 9,299,971 5,696,864 Contingency Fund- - - - - - - - 11,830,380 12,014,000 Risk management- - - - - - - - 1,955,966 1,845,935 Assigned to:Contingency Fund- 10,458,000 10,486,931 11,092,782 10,902,368 10,171,464 13,418,400 10,251,000 - - Establishment of Section 115 Trust- - - - - - - 1,400,000 2,000,000 2,000,000 Revenue stabilization- - - - - - - 1,000,000 - - Development Services- - 1,848,386 382,396 41,110 596,796 531,000 899,277 710,657 530,657 Public Safety- - 97,239 - - - - 1,096,215 929,344 - Risk management- - - - - - - 1,498,078 - - City Attorney- - - - 100,000 100,000 - 100,000 100,000 - CalPERS pension payment- - - - - - - - 10,200,000 2,000,000 Subsequent years expenditures- - - 2,716,534 - - 9,908,932 10,284,119 4,738,806 8,210,529 Unassigned14,060,900 1,382,590 7,828,485 10,419,881 2,723,292 6,334,870 6,185,574 7,122,607 5,311,792 8,356,724 Total general fund18,937,700 20,317,179 24,566,807 29,625,532 26,496,154 29,576,440 30,095,542 33,651,296 47,118,071 40,745,506 For the Fiscal Year Ended June 30Schedule 3City of San Luis Obispo, CaliforniaFund Balances, Governmental FundsLast Ten Fiscal Years(Modified Accrual Basis of Accounting)167 Page 1039 of 1069
2012-132013-142014-152015-162016-172017-182018-192019-202020-212021-22For the Fiscal Year Ended June 30Schedule 3City of San Luis Obispo, CaliforniaFund Balances, Governmental FundsLast Ten Fiscal Years(Modified Accrual Basis of Accounting)All other governmental funds: Reserved‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ Unreserved reported in:Nonspendable- - - - 5,642 (71,687) 292,641 - - 8,681 Restricted for: (Note 1) Debt service2,043,200 2,043,222 2,140,980 2,119,724 2,119,611 1,653,109 1,791,026 2,226,898 2,575,367 2,540,255 Public safety programs22,900 27,145 16,886 23,492 20,786 3,073 - 32,332 63,418 864,848 Transportation projects- - - - - - 8,151,487 9,371,824 10,519,994 8,051,050 Affordable housing programs- - - - - - 2,944,549 8,698,494 9,292,304 9,893,314 Impact fee programs- - - - - - 1,870,656 3,126,925 7,466,378 8,935,786 Parkland development programs- - - - - - 3,528,662 4,709,560 3,405,468 3,107,198 Public art programs- - - - - - 620,934 591,097 568,401 798,038 Tourism programs- - - - - - 456,023 322,975 678,554 1,147,881 Committed to: Affordable housing programs1,254,900 2,946,847 2,601,882 2,562,825 5,054,332 3,974,629 - - - - Assessment district programs- - - - - - - - - - Capital outlay1,326,000 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 Programs3,542,700 411,592 9,410,273 549,349 8,795,074 595,256 - - - - Open space programs194,300 1,582,425 983,402 1,265,620 588,743 2,363,347 - - - - Parkland development programs1,209,600 - - - 2,728,883 - - - - - Contingency fund- - - - - 519,885 - - - - Public art programs347,400 - - - - - - - - - Assigned to: Contingency fund- - - - 900,000 900,000 900,000 900,000 900,000 900,000 Subsequent years expenditures5,413,900 3,552,319 2,606,757 3,559,851 5,846,873 5,861,455 6,382,294 8,521,320 8,826,420 23,533,631 Unassigned(2,500) 1,039 (83) - - - (318,422) (149,162) (5,782) - Total all other governmental funds15,352,400 21,353,232 22,476,959 20,498,689 26,059,944 23,891,661 26,619,850 38,352,263 44,290,522 59,780,682 Total all governmental funds34,290,100$ 41,670,411$ 47,043,766$ 50,124,221$ 52,556,098$ 53,468,101$ 56,715,392$ 72,003,559$ 91,408,593$ 100,526,188$ 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.168 Page 1040 of 1069
2012-132013-142014-152015-162016-172017-182018-192019-202020-212021-22Revenues: Sales and use - general14,242,200$ 15,405,808$ 15,272,683$ 17,498,218$ 16,737,005$ 17,055,085$ 17,805,482$ 16,571,064$ 20,067,740$ 22,247,303$ Sales and Use - local transaction tax6,493,800 6,774,365 7,136,297 7,178,159 7,331,660 7,504,485 8,325,230 7,554,375 12,779,713 29,172,258 Prop. 172 Public Safety tax327,700 391,567 409,590 405,066 405,512 397,488 314,063 416,459 425,136 529,299 Property tax 9,176,600 8,960,010 9,631,890 10,186,858 10,756,477 11,425,510 12,238,357 12,913,661 13,727,986 14,166,259 Transient Occupancy5,572,400 6,063,232 6,805,742 7,127,756 7,381,989 7,514,289 8,061,087 6,325,841 6,960,035 10,650,762 Utility users tax4,916,100 5,345,342 5,211,207 5,413,720 5,539,407 5,627,356 4,919,892 5,439,144 5,225,979 5,338,325 Property tax in-lieu of VLF (Note 1)3,533,200 3,645,692 3,849,341 4,113,244 4,353,912 4,637,253 4,961,080 5,290,215 5,660,661 5,994,592 Franchise fees2,552,300 2,636,599 2,790,077 1,537,922 1,557,128 1,597,655 1,428,296 1,888,414 1,796,829 1,978,295 Business tax2,055,300 2,142,971 2,203,208 2,491,516 2,372,249 2,663,686 2,630,499 2,995,263 3,782,115 2,823,163 Cannabis tax- - - - - - - - - 998,875 Real property transfer256,300 287,560 298,191 366,088 332,314 347,765 273,762 388,075 469,883 550,153 Fines, forfeitures and penalties159,700 150,185 184,320 172,353 139,534 199,374 155,269 239,048 223,882 173,915 Use of money and property237,100 566,931 467,348 825,760 260,169 164,434 1,996,382 2,005,968 219,507 (2,151,227) Vehicle License Fees (Note 1)19,300 - - - - - - - - - Subventions and grants4,603,140 5,989,881 10,858,570 11,771,980 2,624,753 4,156,333 3,110,689 7,538,893 10,719,698 6,446,192 Charges for services8,106,600 11,167,033 12,450,887 13,622,945 15,173,707 14,672,746 18,394,586 17,828,561 22,090,479 17,657,128 Other revenues526,500 357,469 217,710 242,744 446,456 634,391 590,796 708,579 717,440 506,722 Total revenues62,778,240 69,884,645 77,787,061 82,954,329 75,412,272 78,597,850 85,205,470 88,103,560 104,867,083 117,082,014 Schedule 4City of San Luis Obispo, CaliforniaRevenues, Expenditures and Changes in Fund Balances of Governmental FundsLast Ten Fiscal Years (Modified accrual basis of accounting)169 Page 1041 of 1069
2012-132013-142014-152015-162016-172017-182018-192019-202020-212021-22Schedule 4City of San Luis Obispo, CaliforniaRevenues, Expenditures and Changes in Fund Balances of Governmental FundsLast Ten Fiscal Years (Modified accrual basis of accounting)Expenditures:Current: General Government 8,723,300$ 9,362,031$ 10,534,463$ 12,409,567$ 11,824,360$ 12,709,324$ 13,769,778$ 14,503,410$ 13,041,242$ 17,197,912$ Public safety 23,973,400 24,798,500 24,356,077 26,468,454 28,091,747 28,862,906 31,714,220 30,216,995 31,714,578 39,921,208 Transportation 2,798,200 2,882,241 2,969,111 3,317,177 3,780,804 3,565,022 3,495,909 3,710,943 4,450,572 5,131,132 Culture and recreation 6,790,300 7,155,619 7,250,398 7,428,198 7,712,834 8,571,184 8,636,582 8,416,687 9,458,448 10,440,543 Community development 7,777,400 8,389,957 10,047,272 10,770,827 10,300,894 10,815,667 10,677,334 10,477,062 11,101,465 15,067,518 Debt service: Principal 1,543,000 1,534,668 3,856,325 1,792,849 2,101,296 15,665,904 1,974,050 1,605,239 1,602,039 1,467,402 Interest 1,192,700 1,048,671 1,063,820 1,349,216 1,215,504 1,524,180 809,977 993,697 808,586 774,747 Capital: Public safety 457,700 892,351 2,371,865 1,220,759 1,772,454 506,491 706,918 182,235 107,965 248,613 Transportation 5,228,300 4,859,863 14,302,937 15,038,306 4,161,966 6,419,137 6,441,229 6,412,541 11,452,720 13,653,849 Leisure, cultural and social services 395,500 1,272,510 2,399,211 1,463,269 1,499,704 981,768 597,187 1,213,682 537,118 3,933,463 Community development (Note 2)70,900 939,017 123,258 149,537 2,078,181 525,105 1,568,147 785,517 105,142 601,315 General government429,700 145,199 1,684,045 590,263 633,682 1,192,424 4,695,978 2,081,482 2,492,435 1,619,793 Total expenditures59,380,400 63,280,627 80,958,782 81,998,422 75,173,426 91,339,112 85,087,309 80,599,490 86,872,310 110,057,495 Excess of revenues over(under) expenditures3,397,840 6,604,018 (3,171,722) 955,907 238,846 (12,741,262) 118,161 7,504,070 17,994,773 7,024,519 170 Page 1042 of 1069
2012-132013-142014-152015-162016-172017-182018-192019-202020-212021-22Schedule 4City of San Luis Obispo, CaliforniaRevenues, Expenditures and Changes in Fund Balances of Governmental FundsLast Ten Fiscal Years (Modified accrual basis of accounting)Other FinancingSources(Uses):Issuance of debt/refunding debt -$ 850,775$ 8,372,323$ 688,500$ 1,141,468$ 12,472,698$ 673,095$ -$ -$ -$ Cost of debt issuance (11,500) - - - - - - - - - Transfers in 8,407,600 13,834,998 11,682,079 12,747,578 15,739,036 19,815,144 9,064,256 9,455,785 15,460,955 35,273,279 Transfers out (8,292,500) (13,908,769) (12,011,531) (11,311,530) (14,687,473) (18,617,117) (6,608,221) (7,565,885) (13,468,044) (33,587,965) Total other financing sources(uses) 103,600 777,004 8,042,871 2,124,548 2,193,031 13,670,725 3,129,130 1,889,900 1,992,911 1,685,314 Net change in fund balance 3,501,440$ 7,381,022$ 4,871,150$ 3,080,455$ 2,431,877$ 929,463$ 3,247,291$ 9,393,970$ 19,987,684$ 8,709,833$ Debt service as a percentage of noncapital expenditures 6.62% 5.98% 8.92% 5.20% 5.37% 26.64% 4.08% 3.86% 3.46% 2.36%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. 3. Prior to 2021-22, cannabis tax was included in business tax171 Page 1043 of 1069
2012-132013-142014-152015-162016-172017-182018-192019-202020-212021-22Staffing: Salaries and wages: Regular salaries23,214,900$ 23,242,170$ 23,804,510$ 24,790,947$ 26,944,188$ 26,666,447$ 27,520,149$ 28,601,004$ 29,014,941$ 31,823,078$ Temporary salaries1,812,700 2,191,214 2,137,487 1,964,521 1,793,360 1,711,755 1,898,331 1,882,307 2,294,603 1,855,690 Overtime3,309,000 3,018,181 3,222,698 3,473,489 3,604,336 4,420,756 4,241,294 3,292,469 4,527,789 4,412,287 Benefits: Retirement7,661,900 7,637,931 7,943,827 9,323,782 10,394,523 10,570,883 15,150,755 12,593,753 13,344,252 24,665,892 Group health/disability insurance3,463,500 3,387,101 3,319,117 3,828,238 4,129,004 4,638,471 4,193,021 4,291,139 4,040,575 4,327,121 Medicare384,400 393,913 408,889 418,704 455,966 469,688 477,925 481,571 505,450 537,516 Unemployment Reimbursements28,800 31,634 48,588 5,159 150,929 61,972 - 61,240 101,575 17,484 Total staffing39,875,200 39,902,144 40,885,116 43,804,840 47,472,306 48,539,972 53,481,475 51,203,483 53,829,185 67,639,069 Contract services5,208,900 5,725,290 5,903,638 6,271,607 6,962,949 6,940,018 6,557,9396,444,9578,044,4827,836,218Other operating expenditures Communications & utilities1,842,300 2,034,997 1,945,243 2,192,384 2,023,057 2,190,695 2,444,5642,115,8212,494,0183,780,633 Rents & leases139,600197,104159,718164,729170,288171,909180,478160,04588,615168,585 Insurance: General liability & property1,320,700 1,425,450 1,646,605 1,847,422 1,273,133 1,658,319 1,600,9622,196,4621,323,8242,071,193 Workers compensation918,000 1,405,916 1,631,585 2,019,722 1,627,423 2,145,046 2,422,8432,611,8272,037,6112,181,044 Other operating expenditures2,910,900 2,991,619 3,635,542 3,079,347 3,345,191 3,017,537 3,575,9304,902,0504,256,5745,589,217 Total operating expenditures7,131,500 8,055,086 9,018,693 9,303,604 8,439,092 9,183,506 10,224,777 11,986,205 10,200,642 13,790,672 Minor capital99,400 195,473 78,414 92,853 203,098 90,346 - - 1,070 - Total program expenditures52,315,000 53,877,993 55,885,861 59,472,903 63,077,445 64,753,842 70,264,191 69,634,645 72,075,379 89,265,958 Reimbursed expenditures(3,732,100) (3,897,420) (3,451,208) (4,008,992) (4,164,747) (4,264,633) (3,981,789) (4,277,664) (4,578,402) (4,717,442) Total general fund operating expenditures48,582,900$ 49,980,573$ 52,434,653$ 55,463,911$ 58,912,698$ 60,489,209$ 66,282,402$ 65,356,981$ 67,496,977$ 84,548,516$ Schedule 5City of San Luis Obispo, CaliforniaGeneral Fund Operating Expenditures by TypeLast Ten Fiscal Years(Modified Accrual Basis of Accounting)172 Page 1044 of 1069
Fiscal Sales Local Property Transient Utility Property Franchise Business Other Year and Use Sales (Note 2) (Note 1) Occupancy Users in-lieu of VLF Fees Tax Taxes Total2012-13 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 2020-21 20,067,740 12,779,713 14,197,869 6,960,035 5,225,979 5,660,661 1,796,829 3,782,115 425,136 70,896,077 2021-2222,247,303 29,172,258 14,716,412 10,650,762 5,338,325 5,994,592 1,978,295 2,823,163 998,875 93,919,985 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) .In November 2020 voters in San Luis Obispo replaced the local half-percent sales and use tax with a 1.5% local sales and use tax (Measure G-20).(Accrual Basis of Accounting)Schedule 6City of San Luis Obispo, CaliforniaGovernmental Activities Tax and Franchise Revenues by SourceLast Ten Fiscal Years173 Page 1045 of 1069
Fiscal Year Homeowners Secured Roll Nonunitary UnsecuredTotal Direct Market Value of MarketExemptions Gross Value Utilities RollTOTAL Tax Rate (Note 1) Value2012-1341,572,300$ 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%2020-2143,445,185 9,872,892,242 4,194,503 371,969,399 10,249,056,144 1.00% 10,249,056,144 100%2021-2243,644,354 10,449,275,830 4,154,621 369,153,263 10,822,583,714 1.00% 10,822,583,714 100%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 ACFR 2021-22 report - 2021/22 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 Years174 Page 1046 of 1069
2012-13 2013-14 2014-152015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22Proposition 13 maximum tax rate (Note 2)1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 Voter approved indebtedness: State Water Bond0.00400 0.00400 0.00400 0.00374 0.00400 0.00400 0.00400 0.00400 0.00400 0.00400 Cuesta Community College 2014 A & A10.01925 0.01925 0.01925 0.01925 0.01925 0.01925 0.01925 San Luis Coastal Usd 2014 Series A & B0.04900 0.04900 0.04900 0.04900 0.04900 0.03900 0.03900 Total (Notes 1 and 3)1.00400 1.00400 1.00400 1.07199 1.07225 1.07225 1.07225 1.07225 1.06225 1.06225 Notes:1. Property tax rates are levied per $100 of assessed valuation. The tax rate information provided is for Tax Rate Area 003-000, which is the largest tax rate area in the City.2. The passage of Proposition 13 on June 6, 1978 established a maximum County-wide levy for general revenue purposes of 1% of market value. Voter-approved tax rates for the retirement of long-term liabilities were excluded from this limit.3. It is not possible to identify tax rates for individual agencies however, the following is a summary of derived property tax allocations within Tax Rate Area 003-000 for Fiscal Year 2020-21Source: HdL, Coren & Cone ACFR 2021-22 report - Direct & Overlapping Property Tax Rates tableBaseERAFNetRateAllocation ApportionmentSan Luis Coastal Unified School District36.100.0036.10San Luis Obispo County - General Fund30.32(8.08)22.24City of San Luis Obispo18.36 *(3.48)14.88San Luis Obispo Community College District6.420.006.42County School Services3.810.003.81City/County Library1.98(0.32)1.66Port San Luis Harbor1.63(0.44)1.19Other Agencies1.38(0.32)1.06Education Revenue Augmentation Fund (ERAF)0.0012.6412.64 Total100%0%100%*The County further adjusts the 18.4% base rate for revenue shifts to school districts as directed by the State as part of their cuts to local agencies,resulting in an effective rate for the City of approximately 14.9%. Source: HdL, Coren & Cone ACFR 2021-22 report - Property Tax Dollar Breakdown, San Luis Obispo County Assessor 2021-22 Post ERAF TRA Allocation FactorsSchedule 8City of San Luis Obispo, CaliforniaProperty Tax RatesLast Ten Fiscal Years175 Page 1047 of 1069
Number of SecuredPercent of Total Number of SecuredPercent of TotalOwnerParcels Assessed Value Rank City Assessed Value Parcels Assessed Value Rank City Assessed Value Jamestown Premier San Luis Obispo Retail 10114,335,307$ 11.13% 639,034,594$ 40.65%CAP VIII - Mustang Village LLC598,067,585 20.97%Sierra Vista Hospital Inc.884,245,815 30.83% 774,813,684 11.25%Charles Pasquini Jr Trust Et Al871,913,177 40.71% 958,431,143 20.98%San Luis Obispo Promenade DE LLC1071,033,371 50.70%Irish Hills Plaza East LLC652,170,496 60.51%Hotel San Luis Obispo LLC136,793,953 70.36%Costco Wholesale Corporation137,514,208 80.37% 132,579,819 70.55%Avila Ranch Developers234,121,707 90.34%BRE Atlas Property Owner LLC134,078,042 100.34%CSHV Mustang Village LLC350,915,983 30.85%Irish Hills Plaza West LLC638,981,753 50.65%JM Wilson Promenade Properties II LLC1032,700,000 60.55%Target Corporation125,963,966 80.43%Mustang-UCAL LLC125,883,874 90.43%Marigold Center LLC925,647,889 100.43% Total52634,273,661$ 6.26% 53404,952,705$ 6.77%Source: HdL, Coren & Cone ACFR 2021-22 and 2012-13 reports - Top Ten Property Taxpayers table.Schedule 9City of San Luis Obispo, CaliforniaPrincipal Property Tax Payers Current Year and Nine Years Ago2021-222012-13176 Page 1048 of 1069
Total SecuredCurrent YearPercentFiscalTax LevyCurrent YearPercent DelinquenciesDelinquentYear(Notes 1 and 2)CollectionsCollected(Note 3)(Note 3)2011-128,269,300$ 8,269,300$ 100%002012-138,151,000 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%002020-2112,957,910 12,957,910 100%002021-2213,628,729 13,628,729 100%00Notes:1. The secured property tax roll is composed of ad valorem taxes as well as special assessments, and is calculated by the San Luis Obispo County Auditor-Controller. The San Luis Obispo County Tax Collector is responsible for all property tax roll collections within the City of San Luis Obispo. The amount reported is before the SB2557 County administrative fees of approximately 3% of total property tax revenues.2. The secured levy does not include supplemental assessments, unsecured tax revenues, or prior year adjustments, which can be significant. For example, in 2012-13 revenue to the City from supplemental assessments was $99,500 and $215,100 from unsecured. A one-time refund was received from the County Auditor-Controller, refunding $632,800 representing prior overcharges for the SB2557 fee. Property tax revenues totaled $8,740,762.3. The City has elected the Teeter Plan method of property tax collection, whereby the County remits 100% of taxes levied and pursues collection and retains any delinquent taxes and related penalties and interest.Source: San Luis Obispo County Auditor-Controller - 2021-22 Property Tax Estimates and Delinquencies ReportSchedule 10City of San Luis Obispo, CaliforniaSecured Property Tax Roll Levies and CollectionsLast Ten Fiscal Years177 Page 1049 of 1069
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021Sales In Thousands of DollarsApparel stores 71,723$ 73,170$ 73,241$ 75,037$ 72,522$ 74,300$ 72,735$ 71,058$ 50,586$ 73,407$ General merchandise stores171,667 173,940179,551 182,530 179,478 182,184 179,353 181,492 173,776 203,468Food and drug stores39,704 40,638 41,985 43,799 43,473 46,065 47,138 48,805 49,999 49,169Eating & drinking palces142,844 147,953 159,828 172,341 178,362 184,366 184,909 188,430 138,499 198,831Building materials & farm tools 111,633126,123 133,143 140,258 142,370 159,569 162,295 163,186 165,484 179,518Auto dealers & supplies227,510 269,602287,880 304,905 306,812 319,977 323,272 322,174 325,247 403,977Service stations107,588 103,094 101,51088,116 78,033 83,481 94,320 95,367 67,374 99,609Other retail stores263,571 262,668 267,764277,591 282,844 278,792 279,760 263,986 243,728 302,445 Total retail stores1,136,240 1,197,188 1,244,902 1,284,577 1,283,894 1,328,734 1,343,782 1,334,498 1,214,693 1,510,424All other outlets278,271 293,532 311,225 359,242363,023 372,575 431,884 421,068 513,322 653,595 Total 1,414,511 1,490,720 1,556,127 1,643,819 1,646,917 1,701,309 1,775,666 1,755,566 1,728,015 2,164,019 Source: HdL, Coren & Cone ACFR 2021-22 report - Taxable Sales by Category tableSchedule 11City of San Luis Obispo, CaliforniaSchedule of Taxable Sales and Permits by CategoryLast Ten Calendar Years178 Page 1050 of 1069
Effective End State Local City LRM Combined
Date Date Jurisdiction Transportation Fund Rate (Note 4 & 6)Rate
8/1/1933 6/30/1935 (Note 2)2.50%2.50%
7/1/1935 6/30/1943 3.00%3.00%
7/1/1943 6/30/1949 2.50%2.50%
7/1/1949 12/31/1961 3.00%3.00%
1/1/1962 7/31/1967 3.00%1.00%4.00%
8/1/1967 6/30/1972 4.00%1.00%5.00%
7/1/1972 6/30/1973 3.75%0.25%1.00%5.00%
7/1/1973 9/30/1973 4.75%0.25%1.00%6.00%
10/1/1973 3/31/1974 3.75%0.25%1.00%5.00%
4/1/1974 11/30/1989 4.75%0.25%1.00%6.00%
12/1/1989 12/31/1990 5.00%0.25%1.00%6.25%
1/1/1991 7/14/1991 4.75%0.25%1.00%6.00%
7/15/1991 12/31/2000 6.00%0.25%1.00%7.25%
1/1/2001 12/31/2001 5.75%0.25%1.00%7.00%
1/1/2002 6/30/2004 6.00%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 3/31/2009 6.25%0.25%0.75%0.50% 7.75%
4/1/2009 6/30/2011 7.25%0.25%0.75%0.50% 8.75%
7/1/2011 12/31/2012 6.25%0.25%0.75%0.50% 7.75%
1/1/2013 12/31/2016 6.50%0.25%0.75% (Note 5) 0.50% 8.00%
1/1/2017 3/31/2021 6.00%0.25%1.00%0.50% 7.75%
4/1/2021 current 6.00%0.25%1.00% (Note 6) 1.50% 8.75%
Notes:
1. The Bradley-Burns Uniform Local Sales and Use Tax Law was enacted in 1955. The law authorizes cities and counties to impose a sales and use
tax. Effective January 1, 1962, all cities and counties have adopted ordinances for the State Board of Equalization to collect the local tax.
2. Sales tax only. The use tax was enacted effective July 1, 1935.
3. In March 2004, a State ballot measure was passed issuing deficit reduction bonds for State purposes. Funding was provided effective July 1, 2004 by
repealing 25% of the local 1% sales tax and then adopting a new 1/4-cent sales tax dedicated to repayment of the deficit reduction bonds. Cities and
counties would then be "made whole" by the State from increased property tax allocations via reduced contributions to ERAF. This "triple flip"
is theoretically revenue-neutral, and as such, the effective rate for revenue purposes remains at 1%.
4. In November 2006, voters in San Luis Obispo approved a local revenue measure (LRM) increasing the City tax rate by 1/2%, which became effective
April 1, 2007. The sales tax measure has a sunset provision of 8 years. The local Sales Tax was extended as Measure G in the November 2014
election for 8 years.
5. Proposition 30, The Schools and Local Public Safety Protection Act of 2012 , was approved by California voters in November 2012 to temporarily
increase the sales and use tax by 0.25%. The sales and use tax imposed by Proposition 30 expired December 31, 2016.
6. In November 2020, voters in San Luis Obispo approved a local revenue measure (LRM) increasing the local sales tax to 1.5% with an effective date of
April 1, 2021. The local sales tax measure has no sunset provision and replaced the 2014 Measure G.
Source: State Board of Equalization, State of California
Schedule 12
City of San Luis Obispo, California
Historical Sales and Use Tax Rates
179
Page 1051 of 1069
No. of No. of
Certificates Percent Certificates Percent
Construction 897 10.7%888 12.0%
Manufacturing 129 1.5%128 1.7%
Transportation/Utilities 49 0.6%45 0.6%
Wholesale 126 1.5%122 1.7%
Retail 1167 13.9%941 12.7%
Professional 1,185 14.2% 1,074 14.5%
Residential Rental 2,694 32.2% 2,097 28.4%
Commercial Rental 303 3.6%300 4.1%
Services 1,821 21.8% 1,787 24.2%
Total business certificates issued 8,371 100% 7,382 100%
Home occupations 667 8.0%661 9.0%
Located outside City limits 1,932 23.1% 1,767 23.9%
Located in Downtown Business Improvement District 553 6.6%546 7.4%
Source: City of San Luis Obispo Finance Department - Revenue Division
Fiscal Years Ended June 30, 2022 and 2021
Schedule of Business Tax Certificates Issued
City of San Luis Obispo, California
Schedule 13
20212022
180
Page 1052 of 1069
Percentage ofFiscal Lease Purchase Lease Lease Purchase Installment Total Primary Per Gross AssessedYear Bonds Financing Loans Liability Bonds Financing Sales Agreement Loans Government Capita Value2012-13 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 1,381,486 323,380 - 18,185,089 - 5,562,462 26,133,837 72,671,031 1,583 0.76%2020-21 20,038,779 734,673 232,111 - 16,772,171 - 4,919,407 56,229,546 98,926,687 2,102 0.97%2021-22 18,954,856 390,420 139,961 125,003 15,307,178 - 4,257,343 99,918,648 139,093,409 2,919 1.29%Source: City of San Luis Obispo Finance DepartmentSchedule 14City of San Luis Obispo, CaliforniaPer Capita Outstanding Debt By TypeLast Ten Fiscal YearsBusiness-Type ActivitiesGovernmental Activities181 Page 1053 of 1069
ServiceRatio of NetTotal Taxable General Payable from Net Bonded Debt Net BondedAssessed Bonded Enterprise Bonded to Assessed Debt perFiscal Year Population Value Debt Revenues Debt Value Capita2012-1345,541 6,261,931,900$ 00 00.0%02013-1445,473 6,467,600,400 00 00.0%02014-1545,484 6,814,727,785 00 00.0%02015-1646,117 7,275,544,122 00 00.0%02016-1746,724 7,702,282,828 00 00.0%02017-1846,548 8,179,683,454 00 00.0%02018-1946,802 9,052,361,899 00 00.0%02019-2045,920 9,521,174,265 00 00.0%02020-2147,063 10,249,056,144 00 00.0%02021-2247,653 10,822,583,714 00 00.0%0Notes:1. Valuations are established by the County Assessor of the County of San Luis Obispo, except for property owned by private utility companies, which is valued by the State of California.2. See Schedule of Demographic and Economic Statistics for population data. 3. Personal income information is not available. Net Bonded Debt is expressed as a ratio to Assessed Value. Source: HdL, Coren & Cone ACFR 2021-22 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 Years182 Page 1054 of 1069
Amount Applicable
Percent Applicable to the City of
to the City of San Luis Obispo
San Luis Obispo (1)as of June 30, 2022
Direct long-term debt:
City of San Luis Obispo 2018 Water Revenue Refunding Bonds 100.000% 8,330,000$
City of San Luis Obispo 2012 Refunding Revenue Bonds (2001) 100.000% 2,700,000
City of San Luis Obispo 2012 Water Revenue Refunding Bonds (2002) 100.000% 550,000
City of San Luis Obispo 2014 LOVR Lease Revenue Bonds 100.000% 6,460,000
City of San Luis Obispo 2018 Lease Revenue Bonds 100.000% 8,659,100
City of San Luis Obispo Lease liability 100.000%125,003
City of San Luis Obispo Lease-purchase financing 100.000%390,420
City of San Luis Obispo energy conservation loan 100.000%139,961
City of San Luis Obispo Unamortized bond premium 100.000%1,135,756
28,490,240
Overlapping long-term debt (percentage of overlapping agency's assessed valuation located within boundaries of the City):
San Luis Obispo County General Fund Obligations 16.720%3,744,646
San Luis Obispo County Pension Obligations 16.720%4,989,768
City of San Luis Obispo Lease Revenue Bonds 100.000%24,251,532
32,985,946
Less: City of San Luis Obispo obligations supported by enterprise revenues 4,495,706
Total gross direct and overlapping long-term debt 28,490,240
Less self-supporting issues:
City of San Luis Obispo 2018 Water Revenue Refunding Bonds 8,330,000
City of San Luis Obispo 2012 Water Revenue Refunding Bonds (2002) 550,000
Total self-supporting issues 8,880,000
Net direct and overlapping long-term debt 19,610,240$
Ratio of long-term debt to assessed valuation and population
Gross Assessed Valuation 9,521,174,265$
Population 47,063
Percent of Gross Per Capita
Amount Assessed Valuation Long-Term Debt
Direct and Overlapping Debt:
Gross $28,490,240 0.3%$605.36
Net 19,610,240 0.2%417
Direct Debt:
Gross $28,490,240 0.3%$605.36
Net 19,610,240 0.2%417
Source: California Municipal Statistics, Inc., HdL, Coren & Cone ACFR 2021-22 report - Demographic and Economic Statistics table
Schedule 16
City of San Luis Obispo, California
Direct and Overlapping Long-Term Debt
Fiscal Year Ended June 30, 2022
(1) The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable
percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the
city divided by the district's total taxable assessed value.
183
Page 1055 of 1069
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-192019-202020-212021-22Legal debt limit234,822$ 241,812$ 244,175$ 272,833$ 288,836$ 306,738$ 339,464$ 357,044$ 384,339$ 405,847$ Total debt applicable to limitLegal debt margin234,822 241,812 244,175 272,833 288,836 306,738 339,464 357,044 384,339 405,847 Total debt applicable to the limitas a percentage of debt limit0.00% 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 2020-21Gross Assessed Valuation10,822,583,714$ Legal Debt Limit - 3.75% of Gross Assessed Valuation405,846,889$ Long-term Debt:Revenue Bonds Secured by Capital Leases 22,380,000$ Water Revenue Bonds8,880,000 31,260,000Less deductions allowed by law:Revenue Bonds Secured by Capital Leases22,380,000Water Revenue Bonds8,880,00031,260,000Total debt applicable to computed limit$0Legal debt margin405,846,889$ Note: The California Government Code provides for a legal debt limit of 15% of gross assessed valuation based on 25% of market value, or a legal debt limit of 3.75%. The City's debt management policy, however, sets a more restrictive debt limit of 2% of assessed valuation. Schedule 17City of San Luis Obispo, CaliforniaComputation of Legal Debt MarginLast Ten Fiscal Years(Amounts Expressed in Thousands)184 Page 1056 of 1069
LessOperating & Net RevenueCoverage Fiscal Operating Development Other Maintenance Available forWith Year Revenues Impact Fees Revenues Expenses Bond Debt Service Principal Interest Total Coverage Impact Fees2012-13 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%2020-21 28,340,076 (4,744,361) 65,386 (17,765,625)5,895,476 960,390 527,682 1,488,072 396% 715%2021-22 29,671,678 (5,160,020) 222,451 (17,296,355)7,437,754 1,001,055 489,266 1,490,321 499% 845%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 and 2018 Refunding Revenue BondsLast Ten Fiscal YearsRevenue Bond Coverage - Water Fund185 Page 1057 of 1069
Net RevenueFiscal Gross Operating Available forYear Revenues Expenses Bond Debt Service Principal Interest Total Coverage2012-13 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) 2,342,925 381,250 226,931 608,181 385%2019-20 3,840,059 (3,080,588) 759,471 237,900 201,866 439,766 173%2020-21 2,768,419 (3,093,183) (324,764) 247,050 192,350 439,400 -74%2021-22 4,890,317 (3,552,603) 1,337,714 257,725 182,468 440,193 304%Notes:1. In 1994 the Capital Improvement Lease Revenue Bonds were refinanced resulting in new debt of $11,780,000, of which $7,421,400 is designated for the Parking Fund. In 2004 the 1994 bonds were refinanced with a maturity date of 2014. In 2006 Lease Revenue Bonds were issued resulting in new debt of $16,160,000, of which $8,726,400 is allocated to the Parking Fund.3. Operating expenses exclude depreciation.Source: City of San Luis Obispo Finance Department. 2. The City refinanced its 2005 Refunding Lease Revenue Bonds, 2006 Lease Revenue Bonds, and 2009 Lease Revenue Bonds into the 2018 Lease Revenue Bonds. Resulting in new debt of $16,905,000, of which $5,156,025 is allocated to the Parking Fund.Bonded Debt Service RequirementsSchedule 19City of San Luis Obispo, CaliforniaRevenue Bond Coverage - Parking FundLast Ten Fiscal Years186 Page 1058 of 1069
PersonalPublic Elementary and Cuesta CollegeCalendarIncome Median Secondary School Full Time Enrollment Unemployment Year Population (1) in 000's (2) Age (2) Enrollment (3)SLO Campus (4) Rate (2)201245,541 1,163$ 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%202047,063 1,625 26.7 7,491 1,114 7.7%202147,653 1,717 26.7 7,537 2,174 5.0%Sources:1. Beginning in 2020, population data source is US Census2. HdL, Coren & Cone ACFR 2021-22 report - Demographic and Economic Statistics table3. CA Dept of Education DataQuest: Enrollment Reports for San Luis Coastal Unified, by Academic Year start date4. 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 Years187 Page 1059 of 1069
Percentage Percentage
Number of Total City Number of Total City
Employer Employees Rank Employment Employees Rank Employment
Cal Poly State University 3,100 1 12.45%3,145 1 11.00%
County of San Luis Obispo 2,920 2 11.73%2,800 2 9.79%
Dept. of State Hospitals - Atascadero 2,140 3 8.59%
Pacific Gas & Electric Company 1,950 4 7.83%1,700 4 5.94%
California Men's Colony 1,500 5 6.02%2,000 3 6.99%
Tenet Health Central Coast 1,305 6 5.24%
Compass Health 1,200 7 4.82%
San Luis Coastal Unified School District 1,200 8 4.82%902 6 3.15%
Dignity Health Central Coast 1,000 9 4.02%
Lucia Mar Unified School District 1,000 10 4.02%
Cal Poly Foundation (Corporation)1,400 5 4.90%
Mindbody 544 7 1.90%
Rabobank
California Department or Transportation 500 8 1.75%
Cuesta Community College 439 9 1.53%
Community Action Partnership 400 10 1.40%
Total 17,315 69.54%13,830 48.35%
Source for the 2021-22 employers information is Pacific Business Times Top Employers of San Luis Obispo County List.
2012-13 data is from the City's ACFR.
Schedule 21
City of San Luis Obispo, California
Principal Employers
Current Year and Nine Years Ago
2021-22 2012-13
188
Page 1060 of 1069
Function2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22Public Safety Police Sworn57.0 60.0 60.0 61.0 61.0 61.5 61.5 64.5 65.0 64.0 Non-sworn25.5 25.5 25.5 25.5 25.5 24.0 24.0 24.0 25.5 27.0 Fire Sworn44.0 49.0 49.0 50.0 47.0 47.0 47.0 47.0 47.0 47.0 Non-sworn6.8 4.0 4.0 4.0 10.0 10.0 10.0 10.0 9.5 10.5Public Utilities61.9 64.8 64.8 67.1 69.1 69.1 69.1 69.1 69.9 70.6Transportation31.8 28.9 28.9 36.8 36.8 36.8 36.8 36.8 37.1 43.3Culture and recreation32.0 34.0 34.0 35.0 35.0 35.0 35.0 34.0 33.0 43.0Community Development43.8 39.5 40.0 51.0 51.0 47.4 47.9 47.5 47.5 54.5General Government52.2 56.0 56.0 57.0 61.0 61.0 62.3 64.8 72.3 87.8Total 355.0 361.7 362.2 387.4 396.4 391.8 393.6 397.7 406.8 447.7Ratio of Sworn Police Personnel per 1,000 Population:* 1.25 1.32 1.32 1.33 1.31 1.34 1.31 1.34 1.34 1.34 Ratio of Sworn Fire Personnel per 1,000 Population:* 0.97 1.08 1.08 1.06 1.01 0.99 1.00 1.02 0.99 0.99*Does not include the Cal Poly student and faculty population served.Note: See Schedule of Demographic and Economic Statistics for population data.Source: City of San Luis Obispo Finance DepartmentSchedule 22City of San Luis Obispo, CaliforniaRegular Authorized PositionsLast Ten Fiscal Years189 Page 1061 of 1069
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22Function/Program:Police:Calls for police/fire service32,074 34,751 36,236 34,659 36,515 38,300 39,620 39,103 37,825 37,335 40,907 44,183 Incident numbers issued27,595 29,991 31,156 29,277 31,048 32,542 33,360 32,730 31,471 31,472 35,695 38,290 Police reports written7,661 8,322 9,192 8,665 8,435 8,852 8,675 7,735 6,999 6,297 5,852 6,637 Violations cited5,939 8,119 7,213 5,793 6,648 7,673 7,649 7,524 5,874 4,020 3,445 3,735 Citations issued5,380 7,718 6,665 5,275 6,204 7,038 7,030 6,752 5,287 3,660 3,056 3,349 Collision reports728 669 643 625 630 587 608 609 623 481 419 483 Violent crimes:*126 134 117 158 237 173 177 178 191 187 201 225 Willful homicide*2 1 000001012 Forcible rape*27 24 18 31 44 29 38 44 55 39 37 25 Robbery*35 34 19 26 25 13 21 23 33 34 24 33 Aggravated assault*64 74 79 101 168 131 118 111 103 114 139 165 Property crimes:*640 714 804 713 542 637 731 644 728 728 793 885 Burglary**372 330 414 328 206 225 251 172 244 277 284 272 Motor vehicle theft*54 107 81 63 71 87 95 94 74 74 117 174 Larceny-theft:*1,260 1,345 1,476 1,384 1,162 1,335 1,730 1,516 1,493 1,387 1,219 1,398 Over $400*214 277 309 322 265 325 385 378 410 377 392 439 $400 and under*1,046 1,068 1,167 1,062 897 1,010 1,345 1,138 1,083 1,010 827 959 Fire:Medical responses (Note 1)2,799 2,856 2,985 3,232 3,417 3,540 4,538 4,248 3,715 3,884 3,544 3,857Fire suppression responses (Note 1)101 102 95 105 111151143163122127133136Hazardous materials responses (Note 1 and 3)23 17 21 15 21222117252998133Other responses (Note 1)1,528 1,552 1,812 1,840 1,929 2,158 1,799 1,785 2,100 2,140 1,745 2,097 Total service responses4,451 4,527 4,913 5,192 5,478 5,871 6,501 6,213 5,962 6,180 5,520 6,223Fire Suppression Training Hours9,150 7,602 9,061 8,782 8,149 6,714 6,348 7,719 8,410 10,835 11,033 16,015Fire and life-safety inspections (Note 4)2,489 2,431 2,494 644 2,476 2,516 3,756 3,738 2,002 3,128 1,871 2,092Arson investigations (Note 2)22 18 49 44 17448122421135Education activities (# of people)20,106 23,120 23,377 23,945 23,697 23,680 23,575 23,540 2,690 2,700 2,031 2,000Public Utilities:Water/Sewer customer accounts14,734 14,695 14,742 14,899 14,953 15,167 15,188 15,505 15,555 15,672 15,958 16,256Miles of sewerline 137 137 137 137 137.6 137.6138143143146148148Miles of waterline 185 185 187 187 *187191197187190191191 191Water service line repairs and renewals (incl. recycled water)86 50 66 58 60505057384835 47Sewer main stoppages9 7 12 15 131141081114Acre feet of water delivered - Nacimiento981 2,321 66315068393574381737533484147024494460Acre feet of water delivered - Salinas2,640 2,149 2,378 1,444 1,9868273853790 2,165 1,337650Acre feet of water delivered - Whale Rock1,277 2,875 3,212 2,615 1,375949924800 1,556 1,641399Schedule 23City of San Luis Obispo, CaliforniaOperating Indicators and Capital Asset Statistics by FunctionLast Ten Fiscal Years190 Page 1062 of 1069
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22Schedule 23City of San Luis Obispo, CaliforniaOperating Indicators and Capital Asset Statistics by FunctionLast Ten Fiscal YearsTransportation:Signals and lights: Intersections with traffic signals67 70 68707070707072 73 Traffic signal service requests80 85 80859060715993 145 Streetlights operated & maintained2,230 2,300 2,300 2,300 2,300 2,280 2,280 2,280 2,400 2,477 Streetlight service requests500 180 17545501381133 47 Roadways: Estimated miles of paved streets130 132 132 133 133133133134197134137 135 Pavement condition index74 72 71 72 72717170737073 70 Traffic collisions597 621 593 660 720531482501431441259 361 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 2,765 2,817 Parking citations written30,278 26,515 28,690 23,957 20,690 24,213 23,348 21,647 24,415 21,240 17,748 39,254 Total transit passengers1,045,299 1,118,519 1,109,600 1,122,000 1,099,274 1,209,708 1,131,716 945,288 981,995 715,380 179,456 528,000 Leisure, Cultural and Social Services (Note 5):Open space acres maintained3,420 3,510 3,510 3,510 3,510 3,510 3,510 3,775 4,040 4,040 4,040 4,040Open space easement acres161 3,200 3,200 3,200 3,200 3,200 3,200 3,200 3,500 3,500 3,500 3,500Trail mileage40 45 47 49 4952525555566265Total golf rounds played32,228 34,699 33,067 34,766 33,674 30,572 28,196 35,670 24,662 16,428 24,222 17,991Acres of park landscape maintained157 157 157 157 157157157500570530106106City Maintained Trees18,700 18,700 18,700 18,700 19,000 20,000 20,000 20,000 20,000 20,000 12,970 12,970Children's services program enrollment totals1,664 1,755 1,605 2,338 2,360 2,115 2,115 1,950 2,050 1,775 1,483 1,611Annual Senior Center Membership14,500 265331350315192248Facility permits processed1,806 1,803 1,269 1,416 836 1,305 1,073864909650298455Annual aquatics attendance (total)56,676 56,042 67,000 73,903 83,107 68,403 96,687 97,701 87,690 55,202 51,235 62,224Adult athletic teams registered245 320 325 338 320325325362292184112168Youth athletic participants registered1,320 1,400 1,300 1,200 1,350 1,300 1,150 1,115 1,140618611 1,083Special event applications processed68 78 84 103 103 77 101 88 95 40 2 37 Banner permits processed72 86 76 82 4787564581784826Instructional class enrollments1,628 1,400 1,308 1,424 1,751 1,151 1,724 1,439 1,118595626 1,212
191 Page 1063 of 1069
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22Schedule 23City of San Luis Obispo, CaliforniaOperating Indicators and Capital Asset Statistics by FunctionLast Ten Fiscal YearsCommunity Development (Note 6):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 11,853 12,072 2-4 units (annually cumulative)2,634 2,650 2,656 2,692 2,695 2,789 2,851 2,865 2,869 2,888 2,928 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 6,309 6,524 Mobile homes (annually cumulative)1,482 1,482 1,482 1,482 1,482 1,482 1,482 1,482 1,483 1,483 1,483 Total (annually cumulative)20,578 20,663 20,697 20,779 21,074 21,211 21,615 21,843 22,005 22,254 22,533 23,007Building permits issued (Note 7):442 463 566 511 597 584 584 623 Residential: Single family residential incl. condos 7 13 48 59 114 97 62 125 159 171 253202 Multi-family residential (includes second units & ADUs)3 10 6 8 32 5 13 18 19 17 3316 Non-residential7 5 7 9 27 13 14 10 15 12 23 Additions, alterations, demolitions 499 459 530 458 460 522 545 502 381 510 371366 Other improvements (motel rooms)1 Total516 487 591 534 633 637 634 655 575 710 659 587 Approximate 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$ 50,758$ 35,824$ Multi-family residential926$ 3,847$ 1,560$ 6,744$ 26,499$ 13,500$ 8,172$ 17,249$ 21,162$ 33,606$ 10,545$ 56,085$ Non-residential16,608$ 5,142$ 1,935$ 15,310$ 9,791$ 11,484$ 51,110$ 6,248$ 20,430$ 16,981$ 17,475$ 22,665$ Other permits: Additions, alternations, demolitions (incl. swimming pools)15,948$ 16,589$ 20,761$ 19,139$ 22,897$ 30,230$ 27,711$ 14,928$ 34,596$ 60,812$ 78,780$ 29,207$ Total39,567$ 28,856$ 39,954$ 56,605$ 95,909$ 81,655$ 102,017$ 58,132$ 100,488$ 139,425$ 157,558$ 143,783$ Building inspections conducted10,210 13,685 10,543 8,996 6,641 7,195 10,745 9,974 7,537 8,670 7,959 10,470Home occupation permits processed/applied for126 117 142 129 113 163 144 112 112 131 133140Development permit applications received172 148 217 311 293 253 236 215 215 338 269282192 Page 1064 of 1069
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22Schedule 23City of San Luis Obispo, CaliforniaOperating Indicators and Capital Asset Statistics by FunctionLast Ten Fiscal YearsGeneral Government:Business tax certificates issued: Located outside City limits1,569 1,670 1,670 1,472 1,602 2,018 1,699 1,872 1,948 1,839 1,913 1,932 Total certificates issued6,873 7,086 7,086 6,934 7,805 7,597 8,118 8,230 8,205 7,675 7,732 8,371 Citywide recruitments (total)42 59 91 105 129 103 103 97 99 86 90 155 Fleet vehicles maintainedCity-wide fleet & equipment assets290 290 290 290 300 318 323 339 338 340 345 347 Replaces prior categoryTelephone lines managed1,003 1,024 981 995 1,037 1,005 998 907 971 963 1,071 1,101 Cell phones & modems supported351 338 344 383 460 453 476 492 481 487 464 538 IT users supported450 498 498 490 511 515 467 471 488 475 487 511 6. 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 are reported by calendar year.7. Excludes special permits such as plumbing, mechanical, electrical, signs, and grading as well as plan check permits.Source: City of San Luis Obispo Departments1. In Fiscal year 2010-11, numbers reported used observed code from Spillman rather than condition code. 2. Police Department Conducts Arson Investigations, Fire Department Conducts Cause and Origin Investigations. Reported number is Cause and Origin Investigations3. Beginning in 2020-21, the Fire Department includes all "Hazardous Condition" calls for service as categorized by the National Fire Incident Reporting System (NFIRS). Previously only chemical or flammible liquid spills were captured under this function. Moving forward this function also includes electrical and biological hazards among others.4. Beginning in 2020, the fire department began utilizing new mobile inspection software that uses a different inspection methodology counting the building rather than the number of individual units within the building. 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.193 Page 1065 of 1069
Fiscal Historic Increase/ Sales Increase/ Deliveries Increase/
Year Connections (Decrease) Revenues (Decrease) In Acre Feet (Decrease)
2009-10 14,875 2.64% 13,025,900$ 4.65% 5,612 -11%
2010-11 14,777 -0.66% 13,302,800 2.13% 5,909 5%
2011-12 14,537 -1.62% 15,291,008 14.95% 5,999 2%
2012-13 14,758 1.52% 16,163,012 5.70% 5,823 -3%
2013-14 14,899 0.01% 18,398,901 13.83% 5,933 2%
2014-15 14,847 0.01% 17,530,717 -4.72% 5,354 -10%
2015-16 15,167 1.40% 17,939,024 2.33% 4,957 -7%
2016-17 15,357 1.25% 18,196,937 1.44% 5,039 2%
2017-18 15,505 0.96% 19,159,169 5.29% 5,530 10%
2018-19 15,555 0.32% 19,577,182 2.18% 5,074 -8%
2019-20 15,672 0.75% 21,519,632 9.92% 5,191 2%
2020-21 15,958 1.82% 22,757,325 5.75% 5,602 8%
2021-22 16,256 1.87% 24,129,231 6.03% 5,732 2%
Source: City of San Luis Obispo Utilities Department.
Schedule 24
City of San Luis Obispo, California
Water System
Statistical Data
194
Page 1066 of 1069
As ofMonthlySingle family June 30 of Each YearConsumption Price per hcf*Multi-family dwellingCommercialLandscapedwellingMulti-family dwelling Commercial2013Base 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** $9.17/unit volume chargeDrought Surcharge1.10 9 + hcf8.65 Drought Surcharge1.37 2017Base Fee9.98$ $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** $9.44/unit volume chargeDrought Surcharge1.10 9 + hcf8.65 Drought Surcharge1.37 2018Base Fee12.33$ $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** $9.44/unit volume charge2019***Residential SFR Base Fee20.61$ 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** $7.85/unit volume charge**13 +12.59 2020Residential SFR Base Fee21.74$ 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** $8.28/unit volume charge**13 +13.28 Schedule 25City of San Luis Obispo, CaliforniaWater and Sewer RatesLast Ten Fiscal YearsWater Rates (Note 1)Sewer Rates (Monthly)195 Page 1067 of 1069
As ofMonthlySingle family June 30 of Each YearConsumption Price per hcf*Multi-family dwellingCommercialLandscapedwellingMulti-family dwelling CommercialSchedule 25City of San Luis Obispo, CaliforniaWater and Sewer RatesLast Ten Fiscal YearsWater Rates (Note 1)Sewer Rates (Monthly)2021Residential SFR Base Fee22.52$ Base fee determined Base fee determined Base fee determined Base fee determined Base fee determined Base fee determined1-5 hcf6.44 by meter size**** by meter size**** by meter size**** by meter size **** by meter size **** by meter size ****6-12 hcf7.51 $7.36/unit volume charge $8.93/unit volume charge $10.95/unit volume charge $8.58/unit volume charge $8.58/unit volume charge $8.58/unit volume charge13 +13.76 2022Residential SFR Base Fee23.31$ Base fee determined Base fee determined Base fee determined Base fee determined Base fee determined Base fee determined1-5 hcf6.67 by meter size**** by meter size**** by meter size**** by meter size **** by meter size **** by meter size ****6-12 hcf7.77 $7.62/unit volume charge $9.24/unit volume charge $11.33/unit volume charge $8.88/unit volume charge $8.88/unit volume charge $8.88/unit volume charge13 +14.24 *hcf = 100 cubic feet** Total monthly volume charge capped based on average winter water consumption.*** Beginning FY 18-19, different rate structures for SFR, Multi-Family, Commercial, and Landscape****See table below *****2020-21 rate increase deferred to February 1, 2021 due to COVID-19Notes:1. Rates are for services inside the City, outside the City rates are double.2. Third tier applies only to single-family residential customers. Source: City of San Luis Obispo Utilities DepartmentAs ofWaterSewerJune 30 of Each YearBase chargeBase Charge2021***** 3/4 inch or less 22.52$ 20.43$ 1-inch 37.60 34.12 1.5-inch 75.04 68.02 2-inch 120.06 108.88 3-inch 225.27 204.28 4-inch 375.50 340.53 6-inch 750.82 680.85 8-inch 1,201.35 1,089.40 10-inch - 1,566.17 2022 3/4 inch or less 23.31$ 21.15$ 1-inch 38.92 35.31 1.5-inch 77.67 70.40 2-inch 124.26 112.69 3-inch 233.15 211.43 4-inch 388.64 352.45 6-inch 777.10 704.68 8-inch 1,243.40 1,127.53 10-inch - 1,620.99 Base fee charges for Multi-Family, Non-Residential, IrrigationMeter Size196 Page 1068 of 1069
Service Water Use Percent of
Name Type (acre-feet) Total
City of San Luis Obispo Parks Landscape 60.50 17.3%
Silver City Mobile Home Park Mobile Homes 46.95 13.4%
ELL-CAP 97-Laguna Lake Mobile Homes 42.42 12.1%
Creekside Community Mobile Homes 33.83 9.7%
Dignity Health #366 Care Facilities 31.29 8.9%
City of San Luis Obispo Golf Landscape 30.58 8.7%
SLO Coastal Unified School 28.06 8.0%
Sierra Vista Hospital Care Facilities 27.12 7.7%
CAP VIII - Mustang Village LLC Apartments 25.35 7.2%
Embassy Suites Hotel 24.42 7.0%
Total 350.52 100.00%
Source: City of San Luis Obispo - Utilities Department
Fiscal Year Ended June 30, 2022
Water System - Ten Largest Water Users
City of San Luis Obispo, California
Schedule 26
197
Page 1069 of 1069
1
2020-21
Annual
Comprehensive
Financial Report
Recommendation
2
Review and accept the Annual
Comprehensive Financial Report
for Fiscal Year 2021-22.
2021-2 2 A u d i t
Annual Audits
3
•Annual audits are required by the City’s Charter and
State laws
•Purpose is to fairly present the financial condition of the
City in accordance with Generally Accepted Accounting
Principles
•Single Audit Report and Transportation Development
Act Fund Report will be issued separately on February
21, 2023 agenda.
•City’s current auditing firm –Badawi & Associates
2021-2 2 A u d i t
Auditor’s Report
4
Ahmed Badawi
Badawi &Associates
abadawi@b-acpa.com
“It is not just about numbers. It is about long-term relationships that are built on consistent
quality results, responsiveness, and professionalism.”
2021-2 2 A u d i t
Audit Highlights
5
•Unqualified, Clean Audit
•Increase in Fund Balance in General Fund,
Water Fund, Sewer Fund, Parking Fund.
Recovery in Transit Fund, but small decrease
due to COVID-19
•Findings are areas for improvement and will be
issued with the Single Audit Report in February
2021-2 2 A u d i t
FY 2021-22 Financial Statements
80%
Taxes from revenue
sources such as sales,
property, transients,
and utility users' tax.
15%
Fees for services such as
Development Review, Park &
Recreation programs &
Special Assessments.
5%Revenue from grants
and investments.
Governmental Funds
Total Revenue: $117.1 million
ACFR page 41
$22,247,303
$29,172,258
$20,711,004
$10,650,762
$5,338,325
$1,978,295
$2,823,163
$998,875
$17,657,128
$6,446,192
$1,209,936
$(2,151,227)
Sales & Use Tax
Local Revenue Measure
Property Tax
Transient Occupancy Tax
Utility User Tax
Franchise Tax
Business Tax
Cannabis Tax
Charges for Services
Subventions & Grants
Miscellaneous
Investment Income
FY 2021-22 Financial Statements
Governmental Funds
Public Safety
$39,921,208 Leisure, cultural,
social Services
$10,440,543
Debt Service
$2,242,149
Capital Outlay
$20,057,033
Transportation
$5,131,132
General Government
$17,197,912
Community
Development
$15,067,518 Total Expenditures: $110.1million
ACFR page 41
8
FY 2021-22 Financial Statements
ACFR page xv
General Fund – Fund Balance per June 30, 202 2
Non-spendable $90,797
Committed
Contingency Fund – 20% policy level $12,014,000
General government programs $5,696,864
Risk Management $1,845,935
Assigned to:
Encumbrances
SLO Rep Theater grant
$4,270,529
$3,940,000
115 Trust Fund $2,000,000
CalPERS Payment $2,000,000
Development Services $530,657
Unassigned $8,356,724
Total Fund Balance $40,745,506
Local Revenue Measure –G-20 (April 1, 2021)
9
80%million
Operating Use
$6.9
million
Capital Use
$11.1
million
Revenue
$28.9
▪Community Safety & Emergency
Preparedness
▪Creek & Flood Protection
▪Safe & Clean Public Spaces
▪Youth/Senior & recreation Facilities
▪Open Space Preservation &
Maintenance
million
Encumbrances
$2.9
▪Street Maintenance & Transportation
▪Address Homelessness
▪Economic Development & Business
Retention
▪Protection of Financial Stability
ACFR page 123
FY 2021-22 Financial Statements
Proprietary (Enterprise) Funds –Revenues $62.2 million
Water Fund
$ 29.9 million
Sewer Fund
$23.6 million
Parking Fund
$4.9 million
Transit Fund
$3.8 million
Service Charges $24,512
Impact Fees $5,160
Other Revenue $222
Non-Operating
Revenue $986
Service Charges $19,825
Impact Fees $3,685
Other Revenue $132
Non-Operating
Revenue $-1,315
Service Charges $3,943
Fines & Forfeitures $928
Other Revenue $18
Non-Operating
Revenue $392
Service Charges $710
Other Revenue $3
Non-Operating
Revenue $3,075
ACFR page 45
Numbers shown in thousands
FY 2021-22 Financial Statements
Proprietary (Enterprise) Funds –Expenditures $40.4 million
Water Fund
$20.2 million
Parking Fund
$4.2 million
Transit Fund
$ 3.8 million
Sewer Fund
$12.2 million
Staffing $3,374
Supplies & Maint.$1,500
Contract Services $10,700
General Gov.$1,722
Depreciation $2,864
Staffing $3,444
Supplies & Maint.$1,897
Contract Services $31,574
General Gov.$1,712
Depreciation $3,560
Staffing $1,129
Supplies & Maint.$545
Contract Services $1,008
General Gov.$869
Depreciation $689
Staffing $229
Supplies & Maint.$354
Contract Services $2,666
General Gov.$226
Depreciation $376
ACFR page 45
Numbers shown in thousands
FY 2021-22 Financial Statements
Capital Assets (net of depreciation)
Governmental Assets -$ 213 million Enterprise Assets –$277 million
ACFR page 65
0%
Infrastructure
62%
Land & Public Art
15%
Under Constr.
5%
Buildings
12%
Equipment
6%
Right of Use -Lease
<1%
Water Fund
32%
Sewer Fund
57%
Parking
Fund
9%
Transit Fund
2%
Notes Section
13
•Accompany the basic financial statements -
Provides further analysis and the financial
statements should be viewed with the notes as
a whole
•New note related to leases (GASB 87)
•Expanded Note 4 that reports on the City’s
housing related loans.
ACFR pages 53-99
Statistical Section
Financial Trends
-Trend information
-Financial Performance
-City’s fiscal well-being
Demographic, Economic, &
Operating Information
Assist the reader in
understanding the environment
within which the government ‘s
financial activities take place
and the services & activities the
government provides.
14
Revenue & Debt Capacity
-Local Revenue Sources
-Major Tax revenues
-Ability to issue debt
-Affordability of current debt
ACFR page 163
Addressing Auditor’s Findings
15
•Audit preparedness and Year-End Close processes –continuous improvement
•Payroll Module Implementation –will be addressed with a project kicking off in
February/March 2023
•Journal Entry posting –exploring how the Oracle system can assist with
approval workflows
•Notes receivable -$3M affordable housing related from loans made in prior
years
2021-2 2 A u d i t
Popular Annual Financial Report
16
https://www.slocity.org/home/showpublisheddocument/33682
FY 2021-22 Financial Statements
Questions?
2021-2 2 A u d i t
Recommendation
1
8
Review and accept the Annual
Comprehensive Financial Report
for Fiscal Year 2021-22.
2021-2 2 A u d i t