HomeMy WebLinkAboutItem 6b. Acceptance of the Annual Comprehensive Financial Report (ACFR), Federal Single Audit Report, and Transportation Development Act Report (TDA) for FY 2022-23 Item 6b
Department: Finance
Cost Center: 2005
For Agenda of: 1/23/2024
Placement: Business
Estimated Time: 30 Minutes
FROM: Emily Jackson, Finance Director
Prepared By: Debbie Malicoat, Deputy Director of Finance/Controller
SUBJECT: ACCEPTANCE OF THE ANNUAL COMPREHENSIVE FINANCIAL
REPORT, FEDERAL SINGLE AUDIT REPORT AND TRANSPORTATION
DEVELOPMENT ACT REPORT FOR FISCAL YEAR 2022-23
RECOMMENDATION
Review and accept the Annual Comprehensive Financial Report, the Federal Single Audit
Report, and Transportation Development Act Report for Fiscal Year 2022-23.
POLICY CONTEXT
The City’s Charter under Section 810 requires the employment of an independent certified
public accountant to examine the City’s financials.
REPORT-IN-BRIEF
The City produces general-purpose financial statements as well as specifically focused
financial statements annually, which are audited by independent auditors. This report
presents three audited financial statements to the City Council for review and acceptance:
the Annual Comprehensive Financial Report (ACFR), which are general purpose financial
statements; the Federal Single Audit Report, which is specifically focused on revenues
and expenditures of Federal funding; and the Transportation Development Act (TDA)
Report, which is specifically focused on revenues and expenditures related to this funding
source.
As more fully discussed herein, the auditors have issued an unqualified opinion on the
City’s financial statements, which means that in their opinion, the financial statements are
presented fairly and in conformity with generally accepted accounting principles.
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, 2023. The ACFR was
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Item 6b
published on the City’s website on December 18, 2023, hard copies were provided to the
City Council, if requested. The document is included as Attachment A to this report.
In accordance with the City Charter1, 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 also reviewed the City’s Federal Single Audit Report and
Transportation Development Act (TDA) annual audit for the Fiscal Year. Results and
findings are discussed further below. Presenting the Single Audit and TDA reports at the
same meeting as the ACFR represents a significant accomplishment by the accounting
division and the independent auditors. This is not something that the accounting division
has had the capacity to accomplish since going live with the City’s Oracle ERP system in
2018 and is attributable to the hard work and dedication of the entire divisi on.
New Government Accounting Standard Board (GASB) Statements
As described more fully in Note 18 to the financial statements, the City implemented three
new GASB statements for this fiscal year. The most impactful to the City was Statement No.
96.
Statement No. 96 relates to Subscription-Based Information Technology Arrangements
(SBITAs). The objective of this statement is to provide guidance on the accounting and
financial reporting for subscription-based information technology arrangements. The
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
City recognized intangible assets and SBITA liabilities as part of implementing this statement
and note 7 of the financial statements includes detailed information.
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 C ity 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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Item 6b
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
Fiscal Year 2022-23 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 2022-23 were generally positive, however the City was
impacted by winter storms in January and March 2023 that continue to have financial
effects. Revenues and expenditures in the General Fund came in favorably compared to
budget estimates. Revenues were $8.7 million above the final budget, and expenditures
were $292,000 under budget. Net other sources and uses ended above budget by $4.1
million. The result was an ending fund balance of $42.5 million, which was $4.9 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.
The unassigned balance of $8.3 million represents the amount available for additional
spending, although approximately $2.0 million has been spent on storm related projects
and is therefore unavailable for consideration at mid-year.
Capital Outlay Fund
The Capital Outlay Fund meets the definition of a major fund and is displayed separately
on the financial statements. This is due, in large part to the current unexpended balance
in the fund. Major capital projects are planned, but have been delayed, resulting in the
fund balance. Staff expects to be able to significantly spend down this balance with
upcoming capital investments.
General Fund 2022-23
Final Budget
2022-23
Actual
Positive (Negative)
Variance
Revenues 106,805,814$ 115,463,540$ 8,657,726$
Expenditures 90,558,639 90,266,388 292,251
Other sources (uses)(19,320,374) (23,404,590) (4,084,216)
Beginning fund balance 40,745,506 40,745,506 -
Ending fund balance 37,672,307$ 42,538,068$ 4,865,761$
Ending fund balance
Nonspendable - 101,462 101,462
Restricted - - -
Committed - 19,620,444 19,620,444
Assigned - 14,540,709 14,540,709
Unassigned - 8,275,453 8,275,453
Total ending fund balance 37,672,307$ 42,538,068$ 4,865,761$
Budget - Actual Comparison
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Enterprise Funds
The City maintains four Enterprise Funds for its Water and Sewer utility, and Parking and
Transit operations. Enterprise Funds are business-type activities within governmental
accounting and are reported separately from the General Fund.
The primary sources of revenue for the Water, Sewer, and Parking Funds are fees for
sales and services. In the Transit Fund, Federal and State grants represent mo st of the
annual revenue. All four funds experienced an increase in net position for the year, as
reflected in the table below (ACFR page 39).
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:
2022-23 2021-22
Revenues:
Program Revenues:
Charges for services 56,894,331$ 59,140,271$
Operating grants and contributions 7,355,896 5,156,782
Investment earnings 3,010,333 (1,207,118)
Miscellaneous and other 585,101
Total revenues 67,260,560$ 63,675,036$
Program Expenses:
Public utilities 35,569,549$ 33,468,921$
Transportation 9,546,264 8,368,389
Total expenses 45,115,813$ 41,837,310$
Increase (decrease) in net position before transfers 22,144,747 21,837,726
Transfers (2,243,612) (1,685,314)
Change in net position 19,901,135$ 20,152,412$
Net position - beginning of year 240,384,486 217,715,565
Prior year restatement 2,516,509
Net position - end of year 260,285,621$ 240,384,486$
Summary of Changes in Net Position
Business-Type Activities
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Item 6b
1. Auditors’ opinion regarding the financial statements.
2. Management’s discussion and analysis provides 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) 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's actual results with
both the original and final adjusted budgets.
5. Other supplemental schedules and financial statements provide 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 2022-23.
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.
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 Fiscal Year 2021-22 is included in the ACFR document and staff will
submit the Fiscal Year 2022-23 ACFR for the award program.
Single Audit Reports
This document provides several items. First, it provides a report on the City’s internal
control when it comes to financial reporting. Second, it provides a schedule of
expenditures that were funded by Federal Grants and the City’s compliance with
applicable Federal regulations. Third, it provides a schedule of findings and questioned
costs, if any. The findings are areas of improvement for the City when it comes to the
internal controls that are designed to manage the risk in how the City’s assets are
safeguarded, and its finances are accurately reported, which then translates into the
proper administration of federal funding.
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Item 6b
There are two findings and no questioned costs. The City’s responses to the auditor’s
findings are incorporated into the Single Audit Report (Attachment B). The auditor’s
comments generally reflect the difficulties encountered when implementing the new
Enterprise Resource Planning/Human Capital Management (ERP/HCM) cloud -based
Oracle system and both are continuations from the prior year. The City is currently at
some stage of resolution on these issues, utilizing an Oracle consultant for the necessary
reconfigurations. The number of findings has decreased compared to prior years and
reflects the significant time and effort that has been dedicated to ongoing configuration
work. Again, these are areas of improvement and neither of them put the City’s revenues
in jeopardy or question the appropriate accounting of expenditures.
TDA Report and Financial Statements
This document (Attachment C) provides information on the revenues received by the City
pursuant to the TDA. The City receives funding from the TDA for two specific purposes:
1. The development and construction of local streets and roads, including pedestrian and
bicycle facilities. Since these funds are legally restricted, the City has a special
revenue fund created to account for this portion of TDA revenues. The City received
$76,869 in TDA funding during Fiscal Year 2022-23. Of these revenues, $76,869 was
spent on pedestrian facility improvements. There remains $8,681 unspent at year end,
from unspent prior year allocations.
2. The Transit Fund is an enterprise fund to account for the revenues received pursuant
to the TDA, the Federal Transit Authority (FTA) and revenues f rom transit operations.
These revenues are allocated under specific statutes and are legally restricted to pay
for transit operations, the development of public transportation systems and
transportation planning. The Transit Fund received $3,078,487 in TDA operating
grants during the fiscal year. Of these funds, $2,708,131 were also unspent at fiscal
year-end due to Federal funding received for Transit and will be available for future
use.
In addition, this report demonstrates the City’s compliance with applicable TDA
regulations pertaining to acceptable fare revenue ratios. For the fiscal year ended in
2023, the City was required to maintain a fare revenue ratio of 20%, the actual ratio was
159% due to a change in calculation allowing the inclusion of fed eral grant funds as local
funds for the purpose of computing fare revenue ratios. This mandate is discussed further
in Note 7 of the report.
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 the 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.
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Item 6b
FISCAL IMPACT
Budgeted: Yes Budget Year: 2023-24
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 accor dance with
the City’s contract with the auditing firm.
ALTERNATIVES
The City Council could decide to revise or not accept the Annual Comprehensive
Financial Report for Fiscal Year 2022-23. This is not recommended as the report has
been prepared in conformance with a variety of accounting and other reporting
requirements and represents 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, 2023
B - Single Audit Report, Fiscal Year Ended June 30, 2023
C - Transportation Development Act Report, Fiscal Year Ended June 30, 2023
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City of San Luis Obispo , CA
Annual Com prehensive Financial Report
Fiscal Year Ended June 30, 2023
Page 301 of 668
1
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communityofSanLuisObispohasmadeiteasyforthoseinterestedingardeningbycreatingspaces
aroundthecityformultiplecommunitygardensincludingover100plotsavailableforcityresidents.
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Formoreinformationvisit:https://www.slocity.org/government/departmentͲdirectory/parksͲandͲ
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About the Cover
Photocredit:@wildflowerfolie
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ANNUAL COMPREHENSIVE FINANCIAL REPORT
Fiscal Year Ended June 30, 2023
ERICA A. STEWART, MAYOR
JAN MARX, VICE MAYOR
MICHELLE SHORESMAN, COUNCIL MEMBER
ANDY PEASE, COUNCIL MEMBER
EMILY FRANCIS, COUNCIL MEMBER
DEREK JOHNSON, CITY MANAGER
Prepared by the Department of Finance
Emily Jackson, Finance Director
Debbie Malicoat, Deputy Finance Director/Controller
Tavy Garcia, Senior Accountant
Traci Kawaguchi, Accountant
Courtney Miles, Accounting Specialist
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, 2023
Table of Contents
Page
Introductory Section
Transmittal Memorandum ...................................................................................................................................................... vii-xxii
Report Purpose and Organization ............................................................................................................................................... vii
Profile of the City of San Luis Obispo ........................................................................................................................................ ix
Factors Affecting Financial Condition ........................................................................................................................................ xi
Financial Condition Overview ...................................................................................................................................................xiii
Relevant Financial Policies ........................................................................................................................................................ xvi
Major Initiatives ......................................................................................................................................................................... xx
Award for Excellence in Financial Reporting ........................................................................................................................... xxi
Acknowledgments .................................................................................................................................................................... xxii
Directory of Officials and Advisory Bodies ................................................................................................................................xxiii
City Council .............................................................................................................................................................................xxiii
Advisory Bodies ......................................................................................................................................................................xxiii
Appointed Officials and Department Heads ............................................................................................................................xxiii
Mission Statement ....................................................................................................................................................................... xxiv
Organizational Values ......................................................................................................................................................... xxv-xxvi
Organization of the City of San Luis Obispo ............................................................................................................................. xxvii
GFOA Certificate ..................................................................................................................................................................... xxviii
Financial Section
Independent Auditors’ Report .......................................................................................................................................................1-4
Management’s Discussion and Analysis ..................................................................................................................................... 5-21
Overview of the Financial Statements .......................................................................................................................................... 5
Financial Highlights ..................................................................................................................................................................... 7
Government-Wide Financial Analysis .......................................................................................................................................... 9
Financial Analysis of Governmental Funds ................................................................................................................................ 13
Financial Analysis of Enterprise Funds ...................................................................................................................................... 14
Combined Program Expense and Revenue for Business-Type Activities .................................................................................. 15
General Fund Budgetary Highlights ........................................................................................................................................... 16
Capital Asset and Debt Administration ...................................................................................................................................... 18
Economic Factors and Next Year’s Budget and Rates ............................................................................................................... 19
Requests for Additional Information .......................................................................................................................................... 21
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City of San Luis Obispo, California
Annual Comprehensive Financial Report
Fiscal Year Ended June 30, 2023
Table of Contents Page 2
Page
Basic Financial Statements
Government-wide Financial Statements:
Statement of Net Position ........................................................................................................................................................ 27
Statement of Activities ............................................................................................................................................................ 28
Fund Financial Statements:
Balance Sheet – Governmental Funds ..................................................................................................................................... 31
Reconciliation of the Governmental Funds Balance Sheet to the
Government-wide Statement of Net Position ...................................................................................................................... 32
Statement of Revenues, Expenditures and Changes in Fund Balance –
Governmental Funds ........................................................................................................................................................... 33
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund
Balance to the Government-wide Statement of Activities ................................................................................................... 35
Statement of Fund Net Position Business-Type Activities – Enterprise Funds .................................................................. 39-40
Statement of Revenues, Expenses and Changes in Fund Net Position Business-Type Activities –
Enterprise Funds .................................................................................................................................................................. 41
Statement of Cash Flows Business-Type Activities – Enterprise Funds ............................................................................ 42-43
Statement of Fiduciary Net Position - Fiduciary Funds .......................................................................................................... 47
Statement of Changes in Fiduciary Net Position - Fiduciary Funds ....................................................................................... 48
Notes to the Basic Financial Statements ................................................................................................................................ 49-96
Required Supplementary Information Section
Budgetary Comparison Schedule – General Fund ............................................................................................................... 99-102
Schedule of the Changes in the Net Pension Liability and Related Ratios – Miscellaneous
Agent Multiple – Employer Plan .......................................................................................................................................... 103
Schedule of the Pension Plan Contributions – Miscellaneous Agent Multiple – Employer Plan ............................................. 104
Schedule of the City’s Proportionate Share of the Net Pension Liability – Safety Cost-Sharing Plan ..................................... 105
Schedule of the City’s Pension Contributions – Safety Cost-Sharing Plan .............................................................................. 106
Schedule of the Changes in the Net OPEB Liability and Related Ratios ................................................................................. 107
Schedule of Employer OPEB Contributions ............................................................................................................................. 108
Notes to Required Supplementary Information ........................................................................................................................ 109
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City of San Luis Obispo, California
Annual Comprehensive Financial Report
Fiscal Year Ended June 30, 2023
Table of Contents Page 3
Page
Other Supplementary Information and Combining and Individual Fund Statements and Schedules
Local Transaction Tax Measure Funding Schedule ........................................................................................................... 114-116
Nonmajor Governmental Funds ........................................................................................................................................ 117-120
Combing Balance Sheet – Nonmajor Governmental Funds .............................................................................................. 122-129
Combining Statement of Revenues, Expenditures and Changes in Fund Balance
- Nonmajor Governmental Funds ................................................................................................................................... 130-137
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual:
Downtown Business Improvement District Fund ................................................................................................................. 138
Transportation Development Act (TDA) Fund ..................................................................................................................... 139
Tourism Business Improvement District Fund ...................................................................................................................... 140
Gas Tax Fund ........................................................................................................................................................................ 141
Community Development Block Grant (CDBG) Fund ......................................................................................................... 142
Law Enforcement Grants Fund ............................................................................................................................................. 143
Public Art Contributions Fund .............................................................................................................................................. 144
Avila Ranch CFD .................................................................................................................................................................. 145
SB1 Road Repair Fund ......................................................................................................................................................... 146
SB1186 ASP Certify ............................................................................................................................................................. 147
Affordable Housing BEGIN Loan Fund ............................................................................................................................... 148
Debt Service Fund ................................................................................................................................................................. 149
Custodial Funds ................................................................................................................................................................. 151-155
Combining Statement of Fiduciary Net Position – Custodial Funds .............................................................................. 152-153
Combining Statement of Changes in Fiduciary Net Position – Fiduciary Funds............................................................ 154-155
Statistical Section
Statistical Section – Overview (Unaudited) .............................................................................................................................. 159
Financial Trends:
Net Position by Component – Last Ten Fiscal Years ............................................................................................................ 160
Changes in Net Position – Last Ten Fiscal Years ........................................................................................................... 161-162
Changes in Net Position – Last Ten Fiscal Years ........................................................................................................... 161-162
Governmental Activities Tax and Franchise Revenues by Source – Last Ten Fiscal Years ................................................. 163
Fund Balances, Governmental Funds – Last Ten Fiscal Years ...................................................................................... 164-165
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City of San Luis Obispo, California
Annual Comprehensive Financial Report
Fiscal Year Ended June 30, 2023
Table of Contents Page 4
Page
Revenues, Expenditures and Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years ................................................................................................................................................. 166-168
General Fund Operating Expenditure Trends by Type – Last Ten Fiscal Years ................................................................... 169
Revenue Capacity:
Assessed and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years ........................................................... 170
Property Tax Rates – Last Ten Fiscal Years .......................................................................................................................... 171
Principal Property Taxpayers – Current Year and Nine Years Ago ...................................................................................... 172
Secured Property Tax Roll Levies and Collections – Last Ten Fiscal Years ......................................................................... 173
Schedule of Taxable Sales and Permits by Category – Last Ten Calendar Years ................................................................. 174
Historical Sales and Use Tax Rates ....................................................................................................................................... 175
Schedule of Business Tax Certificates Issued ....................................................................................................................... 176
Debt Capacity:
Per Capital Outstanding Debt by Type – Last Ten Fiscal Years ........................................................................................... 177
Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt per Capita
Last Ten Fiscal Years ........................................................................................................................................................ 178
Direct and Overlapping Long-Term Debt – Fiscal Year Ended June 30, 2023 ..................................................................... 179
Computation of Legal Debt Margins – Last Ten Fiscal Years .............................................................................................. 180
Revenue Bond Coverage:
Water Fund – Last Ten Fiscal Years ..................................................................................................................................... 181
Parking Fund – Last Ten Fiscal Years .................................................................................................................................. 182
Demographic and Economic Information:
Demographic and Economic Statistics – Last Ten Fiscal Years ........................................................................................... 183
Principal Employers – Current Year and Nine Years Ago .................................................................................................... 184
Regular Authorized Positions – Last Ten Fiscal Years ......................................................................................................... 185
Operating Information:
Operating Indicators and Capital Asset Statistics by Function – Last Ten Fiscal Years ................................................ 186-189
Water System Statistical Data ............................................................................................................................................... 190
Water and Sewer Rates – Last Ten Fiscal Years ............................................................................................................ 191-192
Water System Ten Largest Users – Fiscal Year Ended June 30, 2023 .................................................................................. 193
iv
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INTRODUCTORY SECTION
v
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vi
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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 December 15, 2023
TO: The Honorable Mayor and Members of the City Council and Citizens of the City of San Luis
Obispo
FROM: Derek Johnson, City Manager
Emily Jackson, Finance Director
SUBJECT: TRANSMITTAL MEMORANDUM FOR ANNUAL COMPREHENSIVE FINANCIAL
REPORT FOR FISCAL YEAR 2022-23
We are pleased to submit the City of San Luis Obispo’s 2022-23 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, 2023, 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 Governmental Accounting Standards Board (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, 2023, are free of material
misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and
vii
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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, 2023. 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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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 47,063 (2020 Census), 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. 3CE 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 and any authorized adjustments 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 2022-23. 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 2022-23. 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 is 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 2022-23.
Recovery from Global Pandemic
The City Council adopted its two-year Financial Plan for 2021-23 considering the effects of the worldwide
pandemic brought on by COVID-19. Given the ongoing uncertainty regarding economic recovery, workforce
reintegration and 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.
As the second year of the Financial Plan, the 2022-23 fiscal year budget continued investments into the adopted
Major City Goals 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
Significant Storms in January and March 2023
As the year unfolded, the City’s major revenue sources continued to recover and grow, providing an improved
fiscal outlook. However, in January and March 2023, the City and region experienced severe winter storms that
resulted in two separate emergency declarations at the Federal and State level, as well as emergency
proclamations at the local level. The City is eligible and is seeking reimbursement from Federal and State
resources for most costs related to the storms. As of the end of the fiscal year, the City had spent about $3.6
million for operating costs in response to the storms, including supplies, emergency protective measures and for
immediate repair of damages to City infrastructure, and an additional $7 million remained on purchased orders
for future planned expenditures. It will take years to fully recover and repair all damages, which is now currently
estimated to exceed $35 million; however, staff are working to prioritize the repairs and identify projects eligible
for reimbursement.
The City’s strong fiscal policies and General Fund reserve provided the first line of defense in addressing the
immediate impact of the storms to the community. The City drew down reserves as the City Council authorized
the use of the balance to pay for these unanticipated emergency costs and activated the City’s Fiscal Health
Contingency Plan during the second half of the fiscal year. In addition to the impact of the winter storms, several
other factors played into the City’s financial condition at 2022-23 year-end:
1.Strong tax revenue including Sales and Use Tax, Property Tax, Transient Occupancy Tax (TOT), as
well as Utility User Tax. Despite worries of economic cooling, real estate market concerns and tourism
impacted by winter storms, the City’s major tax revenues performed well for 2022-23. The 2020 voter
approved local transaction tax continues to be the City’s largest single tax revenue. Property taxes
remained strong due to ownership transfers as well as new housing units on the market. The prior year
saw record high TOT, which was surpassed in the current fiscal year, in large part due to an incredibly
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strong fourth quarter. Utility User Tax was also higher than anticipated due to increases in all categories
of utilities: electricity, natural gas, telecommunications, cable and water.
2.Expenditure Savings. With the activation of the Fiscal Health Contingency Plan, expenditures for
nonessential items were deferred or cancelled, the City delayed filling vacant positions, and a
travel/training “chill” was put in place. These actions contributed to General Fund budgetary savings
of over 6%, which will provide added flexibility in addressing the unanticipated storm expenses and
restoration of the General Fund reserve.
3.Favorable Fair Market Value Adjustment. The Fair Market Value (FMV) adjustment is essentially
an accounting practice that reassesses the value of the City’s investments when there is a difference
between the market value and the value recorded on the City’s books. Interest earnings and FMV
adjustments have been volatile the past few years. In the prior year, the FMV adjustment was negative
$1.5 million; in the current year, it was $1.2 million positive.
Economic Indicators for San Luis Obispo in General
Local Economic Environment
Historically, the City has experienced a relatively stable economy, largely insulated from economic downturns
in other parts of the State or the nation due to major State and federal employers such as the California
Polytechnic State University (Cal Poly), California Men’s Colony, California Department of Transportation (Cal
Trans) District 5 offices, the Regional Water Control Board, and Camp San Luis Army base. It is also the County
seat with significant county administrative offices and the regional courts. The continued operation of the Diablo
Canyon Nuclear Powerplant also contributes to a stable economy as it generates approximately 10% of the
State’s electricity.
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.
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 a variety of
City services including infrastructure. This Local Revenue Measure has become the largest single tax revenue to
the City, growing to over $30 million.
Long-Term Financial Planning.
The City engages in several activities focused on long-term financial planning to gauge and adjust to current
economic conditions and trends. Various scenarios are developed considering a multitude of information and
resources. This effort was very rigorous in FY 2022-23 due to the uncertainties surrounding the economic
environment.
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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 and was updated before adoption of the 2022-23 budget.
CalPERS and the City’s Unfunded Liability
In 2018-19, the City developed a three-year Fiscal Health Response plan and prepared a path to pay-down the
City’s pension liability over a 20-year term, shortening the duration of prescribed payments and saving
approximately $19 million in payments due. It did so by aligning its expenditures with the revenue forecast tto
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, and
a lackluster 5.8% investment return for fiscal year 2022-23, the City continues to gauge the appropriate level of
additional payments moving forward.
FINANCIAL CONDITION OVERVIEW
Despite the background of economic uncertainty, the City ended the 2022-23 fiscal year in a better fiscal position
than originally anticipated. General Fund revenues exceeded budgetary estimates by approximately 4% and
expenditures were 6% under budget. On June 30, 2023, the total General Fund balance was $42.5 million; an
increase of $1.8 million over 2021-22 despite the unexpected storm related costs. Enterprise Funds similarly
experienced increases in net position. Overall, the City’s total net position increased by $60.7 million from the
prior year.
The table below shows the General Fund levels of fund balance in accordance with GASB 54 and the City’s
policy pertaining to fund balance assignments. Fund Balance & Reserve Policy
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General Fund – Fund Balance per June 30, 2023
Non-spendable $101,462
Committed
Contingency Fund – 20% policy level 13,727,000
General government programs 5,307,988
Risk Management 585,456
Assigned to:
Encumbrances
SLO Rep Theater grant
2,455,573
3,940,000
115 Trust Fund 2,000,000
CalPERS Payment 2,000,000
Revenue Stabilization 2,000,000
Tenant Improvement 1,400,000
Development Services 464,136
Solid Waste AB939 281,000
Unassigned 8,275,453
Total Fund Balance $42,538,068
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.
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 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 during FY 2022-23 with travel activities returning strongly, retail shopping re-
discovered, and housing markets retaining momentum. Development began to tighten due to inflationary
pressures and resulting monetary policy from the Federal Reserve to counter-act inflation. Labor shortages as
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well as supply chain challenges began to take a toll in the prior fiscal year and continue to influence the second
year of the Financial Plan.
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 67% of the workforce is now
enrolled in those retirement plan tiers. 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 in any given year for infrastructure improvements
and enhancements and the Public Works department is continuing work to determine how best to deliver projects
that have increased in number, scope and complexity. For a list of projects delivered in FY 2022-23 see page 18
in the Management Discussion and Analysis.
The City’s Capital Improvement Plan Review Committee evaluates projects for funding based on established
criteria and 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, youth and senior services, code enforcement, economic development,
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 2022-23.
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Total uses of the funding during 2022-23 amounted to $30.9 million, with an additional $1.4 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
Other Supplementary Information section of this report beginning on page 113.
Local Sales Tax Measure Revenue & Uses Summary
2022-23
Revenues:
Sales and use tax - Measure G add-on tax $ 30,508,731
Investment income 7,899
Total Revenues $ 30,516,630
Uses:
Operating Programs ($8,778,263)
Capital Projects (22,127,243)
Total Uses ($32,491,617)
Change in Fund Balance ($30,905,506)
Prior Sales Tax Measure Balance $5,696,864
Encumbered or designated for carryover for future year
expenditures ($1,435,051)
Net available for future year appropriations (note 1) $ 3,872,937
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 2022-23.
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 2023, Fitch Ratings, a nationally recognized statistical rating organization, reviewed the City’s
financials, its fiscal outlook, and the current rating. On February 21, 2023, 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. In addition, in April 2023, Standard & Poor’s Global Ratings
upgraded the City’s Water Revenue bonds from ‘AA-’ to ‘AA.’ 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.
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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 cost sharing 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. Total contribution rates, including the additional
percentages agreed upon are listed in the table below:
Police (Sworn) Employee Contribution Levels to PERS Retirement
(Percent of Salary)
Safety PERS Tier Jul-22
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-22
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-22
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-22
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
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
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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 2022-23 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-19 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.
GASB Pronouncements for FY 2022-23
GASB Statement No. 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 practices 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. Conduit debt disclosures are reflected in note 7 to these
financial statements.
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TRANSMITTAL MEMORANDUM
GASB Statement 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. SBITA
disclosures are reflected in note 7 to these financial statements.
AWARD FOR EXCELLENCE IN FINANCIAL REPORTING
The City submitted its ACFR for the fiscal year ended June 30, 2022, to the Government Finance Officers
Association of the United States and Canada (GFOA) Certificate of Achievement for Excellence in Financial
Reporting program. The City received the award and certification for its 2021-22 ACFR.
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.
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.
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TRANSMITTAL MEMORANDUM
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.
Derek Johnson, City Manager
Emily Jackson, Finance Director
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DIRECTORY OF OFFICIALS AND ADVISORY BODIES
CITY COUNCIL
Erica A. Stewart Mayor
Jan Marx Vice Mayor
Andy Pease Council Member
Michelle Shoresman Council Member
Emily Francis 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
Whitney McDonald Assistant City Manager
Greg Hermann Deputy City Manager
Timmi Tway Director of Community Development
Emily Jackson Director of Finance
Todd Tuggle 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.
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Patrol Fire, Medical & Haz Mat Natural Resources Recruitment Assistant City Manager
Traffic Safety Emergency Response Economic Development Labor Relations
Investigations Hazard Prevention Cultural Activities Fair Employment
Neighborhood Services Fire Inspections City Clerk Services Risk Management
Animal Regulation Disaster Planning General Administration Human Relations
Information Technology
GIS Management
Budget Recreation Programs Water Engineering Long Range Planning
Purchasing Ranger Services Sewer Transportation Development Review
Accounting & Revenue Park Planning Utilities Resource Creek & Flood Protection Building & Safety
Support Services Golf Course Conservation Maintenance Services:CDBG Administration
Finance Administration Public Art Whale Rock Reservoir Streets, Parks, Bldgs Housing
Community
Development
Administration
Dept Reporting to the Assistant City Manager
Utilities
Human
Resources
Parks &
Recreation
Public
Works
Community Services
RESIDENTS
ADVISORY
BODIES
CITY
MANAGER
MAYOR &
CITY COUNCIL
DeptAppointed by the City Council Appointed by the City Manager
CITY
ATTORNEY
Police Fire
Finance
xx
v
i
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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, 2022
Executive Director/CEO
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FINANCIAL SECTION
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INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and Members of the City Council
of the City of San Luis Obispo
San Luis Obispo, California
Report on the 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, 2023, 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, 2023, 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 335 of 668
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:
x Exercise professional judgment and maintain professional skepticism throughout the audit.
x 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.
x 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.
x 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.
x 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 5-21 and 99-109 be presented to supplement the basic financial statements.
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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 113-155 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.
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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 15,
2023, 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 & Associates, CPAs
Berkeley, California
December 15, 2023
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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 2022-23 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 2022-23 pension liabilities is as of the fiscal year ended
June 30, 2022. 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 2022-23 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 (i.e. open space, environmental mitigation funds, etc.) 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.
Financial Highlights
The following information provides a narrative overview and analysis of the financial activities of the City of San
Luis Obispo (City) for the fiscal year that ended June 30, 2023. It should be read in conjunction with the transmittal
memorandum, the basic financial statements, and the accompanying notes.
In the fiscal year 2022-23, the City continued to experience slow but steady economic growth despite some turbulence
in the economy and inflation. Housing production and other permit activity also remained strong. Actual revenues
received were slightly higher than budgeted and the City’s expenditures came in below appropriated budget amounts.
Winter Storms In the middle of the fiscal year 2022-23 the City experienced heavy winter storms that resulted in two
separate emergency declarations at the Federal and State level, as well as a local emergency proclamation. The City
is eligible for reimbursement for a majority of the storm related costs through the Federal Emergency Management
Agency (FEMA) and the California Disaster Assistance Act (CDAA). As of the end of the fiscal year, the City had
spent approximately $3.6 million for operating costs in response to the storms, including supplies, emergency
protective measures, debris removal, and minor repairs. These funds were appropriated from operating reserves and
will be replenished as part of the 2023-2024 budget process. Approximately $275,000 was spent on capital
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Management’s Discussion and Analysis
expenditures for immediate repair of damaged City infrastructure, and an additional $7 million remains on future
planned expenditures. The overall cost of damages to the City is now expected to exceed $35 million.
GASB Statement No. 96 This pronouncement is included in the City’s financial statements for the first time in FY
2022-23 GASB 96 requires the reporting of subscription-based information technology arrangements (SBITAs).
Under this statement, the City recognizes right-to-use subscription assets, an intangible asset, and a corresponding
subscription liability. Within the City’s Financial Statements, Note 7 – Long Term Debt lists the applicable SBITAs.
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 are adjusted to reflect any unrealized gains and losses resulting from
the fair value adjustment annually. The City’s investments and effects of the FMV adjustment 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 9 of the Management
Discussion and Analysis.
x Per the City’s Statement of Net Position, total City-wide assets increased by approximately $60.9 million or 7.8%.
The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows on June 30,
2023, by $479 million (net position). They include again the disclosure of the City’s net unfunded pension liability
which increased by $25.4 million to $91.4 million as of June 2023 largely due to changes in actuarial assumptions
and negative investment income or returns. The City’s net pension liability is measured as the total pension
liability of $259.7 million less the pension’s fiduciary net position of $168.3 million. This picture will likely
change with the experienced losses at the end of June 2023 but will be counter-acted by the City’s budgeted and
planned additional discretionary payments made in FY 2022-23 and anticipated in FY 2023-24.
x 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 $10.7 million; prepaid expenses decreased slightly, cash
held with fiscal agent remained stagnant compared to 2021-22, and Loans Receivables of approximately $12.3
million also remained consistent with the prior year.
x In business-type activities, total assets increased from $435 million to $474 million. Of note is the lease receivable
amount of $36.5 million in the Parking Fund due to the reporting of leases under GASB 87. The Sewer Fund
increased its construction in progress by over $31 million as the upgrade of the Water Resource Recovery Facility
is ongoing. This $140 million multi-year construction project is scheduled to be completed in FY 2023-24.
x City-wide liabilities increased by $71.6 million during the fiscal year with the increases in the Governmental
activities of $43 million and increases in the business-type activities of $28.6 million. The increase in
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governmental funds is mostly due to the increase in net unfunded pension liabilities while the increase in the
business-type activities reflects new long-term debt obligations.
x The City’s governmental funds altogether reported combined ending fund balances of $111.2 million.
Approximately $37.4 million of this total is either nonspendable or restricted for debt service, transportation
projects or specific programs like impact fee programs or affordable housing. Another $20.3 million is committed
for purposes such as general contingency reserves, and future insurance premiums. A further $45.2 million is
assigned as of June 30, 2023, and intended to be used for specific purposes including the development services,
revenue stabilization reserve, the Pension 115 Trust Fund, and to meet expenditures in the subsequent year in the
form of purchase orders, encumbrances, and unspent appropriations that have been rolled over into fiscal year
2023-24 in accordance with the City’s budget policies. The remaining $8.3 million is unassigned.
x The total General Fund balance increased by 4% to $42.5 million. After the adjustments to reflect amounts non-
spendable of $101,500, committed funds of $19.6 million including the 20% operating reserve, assigned fund
balance of $14.5 million, nearly $8.3 million remains unassigned balance on June 30, 2023.
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, 2023, and 2022.
For the fiscal year ending on June 30, 2023, the City’s combined total assets and deferred outflows of resources were
greater than its liabilities and deferred inflows of resources by $479 million. The largest portion of the City’s net
position reflects its investment in capital assets in the amount of $376 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
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repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate
these liabilities.
Just over $45.3 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 $40.8 million and $19.9 million respectively to the combined net position increase of $60.7 million
resulting in a total net position of $419 million on June 30, 2023.
Information about changes in net position for fiscal years 2022-23 and 2021-22 is summarized below. Reasons for
the changes are discussed in the following sections for governmental activities and business-type activities.
Governmental Activities. The City’s net position in the Governmental activities increased by $40.7 million to $219
million on June 30, 2023, based on very strong tax revenues, significant expenditure savings, especially in public
safety, and favorable investment earnings versus the prior year. Current year pension and other post-employment
benefit activities resulted in substantial reductions to program expenses. For public safety, this represented a reduction
in expenses of nearly $11.7 million. This is driven by changes of assumptions for the pension plan as well as the
additional voluntary payments the City has been making. General Government expenses on this schedule are presented
using full accrual accounting, therefore reflects approximately $4.4 million for current year capital asset and
depreciation expense.
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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 2021-22 by $10.5 million or 9% based on the re-opening of the
economy, strong purchasing and rapidly returning travel and tourism activities. This increase was achieved despite
the overall market volatility and inflationary pressures.
Charges for services remained consistent from the previous year, while most tax revenues saw increases as did overall
grant revenue. Additionally, the City incurred a favorable FMV adjustment which also contributed to the overall
increase in total revenues.
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 chart below, the City’s top five tax revenues
accounted for almost 72% of total revenues, with service charges accounting for another 15% and ancillary revenue
making up the remainder. Despite economic volatility, 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 $11 million in annual revenue. This is indicative of the City gaining from being a drive-to market
and benefiting from the travel activity that followed the pandemic related restrictions. Investment in tourism marketing
and programs designed to bring people to San Luis Obispo paid dividends and continues to experience strong lodging
and retail activity.
Revenues 2022-23 2021-22 Inc / (Dec) %
Charges for services 18,936,771$ 18,920,886$ 15,885$ 0%
Operating grants and contributions 5,331,657 3,647,813 1,683,844 46%
Capital grants and contributions 200,933 1,531,157 (1,330,224) -87%
General Revenues:
Sales taxes (Including 1/2 percent local Sale Tax) 52,374,199 51,419,561 954,638 2%
Property taxes 15,635,545 14,716,412 919,133 6%
Transient occupancy tax 11,037,037 10,650,762 386,275 4%
Utility users tax 6,904,194 5,338,325 1,565,869 29%
Property tax in lieu of VLF 6,283,397 5,994,592 288,805 5%
Other taxes and fees 7,216,335 5,800,333 1,416,002 24%
Investment earnings 2,350,922 (1,638,993) 3,989,915 243%
Miscellaneous and other 1,774,126 1,213,401 560,725 46%
Total governmental revenues 128,045,116$ 117,594,249$ 10,450,867$ 9%
Governmental Activity Change in Revenue
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Management’s Discussion and Analysis
Governmental Activities Program Expenses: Program expenses decreased by $11.6 million from the prior fiscal year,
ending 2022-23 at $89.5 million. The majority of this decrease is a result of adjustments made for pension and other
post-employment benefits (OPEB) expenses in accordance with GASB Statements 68 and 75. Public safety program
expenses decreased by $14.3 million while transportation, culture and recreation, and community development
programs saw only modest increases. In addition, general government programs also saw an increase of approximately
$4.6 million.
The following chart compares program fee revenues and expenses which is useful when reviewing the costs of various
governmental activities:
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Financial Analysis of Governmental Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements. The following funds have been classified as either governmental or proprietary fund types.
Governmental Funds. The focus of the City’s governmental funds is on near-term inflows, outflows and balances of
spendable resources. Such information is useful in assessing the City’s financing requirements. In particular,
unassigned fund balance serves as a useful measure of a government’s net resources available for spending at the end
of the fiscal year.
x As of June 30, 2023, the City’s governmental funds reported combined ending fund balances of $111.2
million or an increase of $10.7 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 or items that by their nature are not in a
spendable form. Approximately $101,462 was held in non-spendable at fiscal year-end. The
majority of this represents changes in claim liabilities for workers compensation claims incurred
under a previous insurance risk pool.
o Restricted fund balance of $37.4 million, including reserves for debt service or capital outlay, impact
fees programs, general government programs, housing and the net balance of the Local Sales Tax
Measure sub-fund.
o Committed fund balance amounted to $20.3 million accounting for the City’s reserve funds as
prescribed by its Fund Balance and Reserve policies.
o Assigned fund balance of $45.2 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), funds to be used for Development Services,
purchase orders and encumbrances that have been rolled over into fiscal year 2023-24 in accordance
with the City’s budget policies, an additional discretionary payment to CalPERS, the newly
established Section 115 Trust Fund, and solid waste funds collected through AB939. The City also
established a Revenue Stabilization Reserve of $2 million to help insulate or smooth out budget
impacts from large fluctuations in tax revenue. The largest portion of the assigned fund balance,
nearly $24.5 million represents the City’s Capital Outlay Fund for investments in the City’s
expansive infrastructure.
o Unassigned fund balance of $8.3 million in remains in the City’s General Fund and will be utilized
first to address damages caused by the winter storms, based on City Council direction. Any
remaining balances will be prioritized according to policy.
Major Governmental Funds. In fiscal year 2022-23 the City maintained two major governmental 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,
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2023, these funds had an aggregate fund balance of just under $44.2 million. Of this total, $37.4 million is restricted
for payment of debt service or specific governmental programs such as transportation, affordable housing, and impact
fee or parkland development programs.
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.
Financial Analysis of Enterprise Funds
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 proprietary funds, the City has four such entities with
Water, Sewer, Parking, and Transit.
Water Fund - Total operating revenue decreased by $2.2 million due to a 9% reduction in water consumption
compared to FY 2021-22. Nonoperating revenues were lower than the prior year due to impact fees collected for new
development. However, total operating and nonoperating revenue exceeded total operating and nonoperating
expenses and transfers out by $6.2 million, resulting in an ending net position of over $102.6 million on June 30, 2023.
Nonoperating revenues also include the Fund’s investment in the Whale Rock reservoir which amounted to $392,000
for FY 2022-23. The prior year restatement of $1.6 million was related an adjustment to loan receivables and accrued
interest for affordable housing development projects that had deferred impact fees. Water fund operating expenses
increased by $1.3 million over the prior year and were largely driven by increases in salaries and benefits as the City
continued to fill vacant positions, increases in industry-specific commodities such as chemicals and electricity due to
inflation, increases for supplies such as water main pipes, and also increasing regulatory requirements.
Sewer Fund - Total operating revenue decreased by $1.3 million due to lower impact fees than the prior year and
operating expenses increased in all categories by $874,000. However, the decrease in net operating income was offset
by total nonoperating revenues and expenditures of $1.8 million which includes grant revenue of $1.4 million and a
favorable FMV adjustment. The result is a $9.9 million change in net position and an ending net position of $119.5
million for FY 2022-23. Like the Water fund, the prior year restatement of $886,000 was related to development
impact fee loans receivable, including accrued interest, which the City had expensed or not recorded previously. Sewer
fund operating expenses also increased by $874,000 compared to the prior year. The driving factors for this increase
include the increases in salaries and benefits as the City filled its vacancies from the prior year, increases in the cost
of utilities, and increasing regulatory requirements.
Parking Fund - Total operating revenues came in at just over $6 million compared to $4.9 million in the prior year
while the operating expenses were consistent with the prior year and totaling $4.8 million compared to $4.2 million.
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Revenues for parking meters, parking structures, and parking fines were all up from the prior year. As a result,
operating income was nearly double than the previous year, $1.2 million in FY 2022-23 compared to $649,000 in FY
2021-22. The Parking Fund also received $700,000 of one-time American Rescue Plan Act (ARPA) funding to offset
the limited continuation of the first-hour free parking in the City’s three existing parking structures during the fiscal
year and this is reflected in the net nonoperating revenues/expenses which totaled almost $1.7 million. The Parking
Fund ended the fiscal year with a net position of $30.2 million, an increase of just over $2.5 million from the prior
year. The initial purpose of the additional reserves was to cover any anticipated debt reserve for the Cultural Arts
District Parking Structure. The City ultimately issued different debt structure and the future need for a debt reserve is
no longer needed and can be used for other parking purposes. The fund had a minor prior period restatement in FY
2021-22 due to an adjustment to correct a payroll error. The parking fund also saw increases in operating expenses of
$570,000 over the prior year. This increase was attributed to several driving factors including: additional parking
enforcement needs over the holiday period, increases in communication services and outreach efforts for various
projects and programs, merchant fees as a result of newly implemented pay stations which collect more in credit card
revenue versus traditional parking meters, and also increases in utilities rates such as electricity.
Transit Fund - The overall net position of the Transit Fund increased by $1.2 million to end the fiscal year with a net
position of nearly $8 million. While operating revenue increased marginally, operating expenses also increased
resulting in a slightly larger operating loss of $3.7 million versus $3.1 million in the prior year. However, net
nonoperating revenues and expenses came in at $4.9 million, an increase of $1.8 million primarily due to receiving
discretionary Federal ARPA grant funding, a favorable FMV adjustment in investments and an increase in bus fare
compared to the prior year. The transit fund also saw increases in operating revenues of $661,000 over the prior year
as result of various factors including: increases in fuel costs due to inflation as well as increased ridership of over
10%, and increased maintenance costs which are likely to continue until older buses can be retired from service and
replaced with additional electric buses.
Combined Program Expenses and Revenue for Business-Type Activities
Total revenues from service charges were down by $2.2 million for Business-Type Activities with the largest decreases
in Water and Sewer offset by increases in the Parking and Transit funds. Impact fees in the Water and Sewer Funds,
which are based on new development, were substantially lower in the current year and can often be volatile from year
to year due to development
activity. All funds experienced a
positive fair market value
adjustment compared with the
prior year, which resulted in $2.6
million of investment earnings
compared to a $1.2 million
negative position of investment
earnings at the end of FY 2021-
22. In addition, grant revenues
for these funds are $2.2 million
higher, primarily from Federal
sources, notably $700,000 in
one-time American Rescue Plan
Act (ARPA) funding to offset
the limited continuation of the
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Management’s Discussion and Analysis
first-hour free parking provided by the Parking Fund. In total, the business type activities generated $67.3 million in
revenues for the fiscal year.
As outlined in the prior section, the program expenses for the proprietary funds increased from the prior year by nearly
$3.4 million. This included increases of $3.5 million in salaries and benefits, $786,000 in supplies and maintenance,
and $198,000 in contract services, offset by decreases in general government expenses and depreciation due to fully
depreciated assets. As a result, the net position across all proprietary funds increased by $19.9 million.
General Fund Budgetary Highlights
A detailed budgetary comparison schedule for the year ended June 30, 2023, 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, 2023.
The following summarizes the original General Fund budget compared with the adjusted final budget for fiscal year
2022-23. The adjusted final budget includes Council approved adjustments as well as administrative budget
adjustments in accordance with the City’s adopted fiscal policies and procedures.
As discussed below, differences between the original budget and the final amended budget reflect the following key
changes:
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x Revenue budgets were decreased by $1.0 million primarily for Federal stimulus grants 1 and an anticipated
negative FMV adjustment, offset by increases for sales transaction tax and transient occupancy tax.
x Overall expenditure budgets were increased, however, by $2.7 million for the General Fund due to carryover
of funding for contracts and commitments from the prior fiscal year.
x Net Other sources (uses) are comprised of transfers in or out and were originally budgeted for $23.5 million
and revised to $19.3 million in the Final budget. The budget decreased by approximately $4.2 million because
of the Federal stimulus grant1 that was deposited directly into the appropriate funds instead of transferred.
Transfers may be used to provide resources from the General fund to other funds such as the Capital outlay
fund or other non-major governmental funds.
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 surpassed the final budget by nearly $8.7 million, while expenditures
came in below the final budget by approximately $300,000. The net other sources and uses ended above budget by
$4.6 million resulting in an ending fund balance that was $8.4 million greater than anticipated.
Detail for the Local Revenue Measure
The City’s Local Revenue Measure (one and a half percent transaction tax) is a sub-fund of the General Fund. The
activities reflected in the Financial Statements of this report are provided for information regarding the use of the
Measure’s according to the community’s priorities and the recommendation of the Revenue Enhancement Oversight
Commission, a City Council advisory body, overseeing the allocations. For FY 2022-23, the following revenues and
expenditures were recorded:
1 The initial budget included ARPA Federal stimulus revenue which would subsequently be transferred into the
Infrastructure Investment Fund and the Parking Fund. Instead of the unnecessary step of transferring, staff deposited
the revenue directly into the appropriate funds and posted a net-zero budget amendment to reduce the revenue
budget and other uses (transfers out) budget in the General Fund.
General Fund 2022-23
Final Budget
2022-23
Actual
Positive (Negative)
Variance
Revenues 106,805,814$ 115,463,540$ 8,657,726$
Expenditures 90,558,639 90,266,388 292,251
Other sources (uses) (19,320,374) (23,404,590) (4,084,216)
Beginning fund balance 40,745,506 40,745,506 -
Ending fund balance 37,672,307$ 42,538,068$ 4,865,761$
Ending fund balance
Nonspendable - 101,462 101,462
Restricted - - -
Committed - 19,620,444 19,620,444
Assigned - 14,540,709 14,540,709
Unassigned - 8,275,453 8,275,453
Total ending fund balance 37,672,307$ 42,538,068$ 4,865,761$
Budget - Actual Comparison
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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, 2023, the City’s investment in capital assets for its governmental and business type activities
amounts increased to $531million (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.
Major capital asset2 expenditures during the fiscal year included the following:
x $1.4 million for the Orcutt Tank farm roundabout
x $24 million for Water Resource Recovery Facility upgrade project
x $5.2 million for roadway sealing
x $355,000 for the Council Hearing Room improvements
x $2.3 million for fleet replacements
2 Additional information on the City’s capital assets can be found in Note 5 on page 64 to the basic financial statements.
Revenues
Local Transaction and Use Tax 30,508,731$
Investment Income 7,899
30,516,630$
Expenditure Allocations by Priority
Address Homelessness 764,069$
Community Safety and Emergency Preparedness 4,608,385
Creek and Flood Protection 1,292,816
Economic Development and Business Retention 874,875
Open Space/Natural Areas Preservation and Maintenance 1,439,019
Other Services and Projects 2,528,429
Protect Financial Stability 404,558
Safe and Clean Public Areas 3,362,300
Street Maintenance and Transportation (incl bike and ped improvements) 9,405,702
Youth/Senior Services and Recreation Facilities 2,096,992
Allocation to Capital Reserve 3,604,500
30,381,645$
Expenditures on Legacy Projects (projects funded before 2022-23)
Legacy Projects 523,861$
Net Change in Fund Balance (388,876)$
Fund Balance Beginning of Year 5,696,864
Fund Balance End of Year 5,307,988$
Encumbered for Legacy Projects (1,435,051)
Available Fund Balance 3,872,937$
Local Transaction Tax Measure Funding Schedule
For the Fiscal Year Ended June 30, 2023
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Management’s Discussion and Analysis
x $4.3 million for the Calle Joaquin sewer lift station
x $1.7 million for the North Chorro Neighborhood greenway
Long-Term Debt. As of June 30, 2023, the City’s long-term debt has increased by $17.6 million to $160.5 million
outstanding. The increase is due to large debt financed projects in the Water and Sewer funds adding over $18 million
to the business-type activities long-term debt as loan proceeds were drawn down to offset the related capital spending.
Within governmental activities, several loans were paid off, lowering the debt burden by $645,000 from the previous
year. In addition, the City recognized a total of $458,000 subscription-based IT arrangements (SBITAs) in accordance
with the implementation of GASB 96.
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, 2023, 2% of the assessed valuation was $227 million 3. As of June 30, 2023, 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.
Economic Factors and Next Year’s Budget and Rates
The fiscal outlook for the City remains positive, having weathered the economic impacts and reverberations of
COVID-19, however new uncertainty related to unprecedented inflationary pressures in addition to unanticipated costs
related to storms occurring in January and March of 2023 which impacted the development of the two-year Financial
Plan. Nevertheless, the City was able to use operating reserves to pay for storm costs and is actively working to
maximize reimbursement (i.e. 93.5%) for eligible costs from state and federal sources.
On June 6, 2023, the City Council adopted the 2023-25 Financial Plan and the 2023-24 budget with an appropriation
of $240 million for the fiscal year and $432 million over the two-year financial plan period. The appropriated budgets
remain high throughout the next financial plan due to continued capital investments and related debt issuances for the
Cultural Arts District Parking Structure. The overall Financial Plan presents an ambitious work program lead by the
four major City goals of Economic Recovery, Resiliency & Fiscal Sustainability, Diversity, Equity, and Inclusion,
Housing and Homelessness, and Climate Action, Open Space, and Sustainable Transportation.
The 2023-25 Financial Plan assumes a flattening of most revenue types followed by conservative growth in the outer
years of the forecast. Sales tax revenue remained incredibly strong through FY 2022-23, though there is evidence of
a slight cooling, which was programmed into the budget. Property Tax revenue also continues to grow steadily and
remains the City’s most stable revenue source.
3 Based on the San Luis Obispo County Assessor’s 2022-23 Annual Valuation report.
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During FY 2022-23, the City recorded an all-time high in property taxes, nearly 4% higher than the prior year due to
an attractive and flourishing real estate market. However, data shows that the number of home sales was down 9.5%
in July 2023 compared to July 2022, but the median sale price was down only 3.1%. Based on the latest estimates
from the County Assessor’s Office, there will be 4% growth in FY 2023-24.
Tourism in the City remained strong, resulting in $11 million in transient occupancy tax (TOT) contributing to the
general fund and outperforming the budget by 22%. Tourism promotion continues to be led by the City’s Tourism
Business Improvement District (TBID) and through the Promotional Coordinating Committee (PCC), the City
awarded $200,000 in grant funding to local non-profit organizations through two grant opportunities in the fiscal year,
the Arts & Culture Recovery Grant (ACRG) and the Cultural Grants-In-Aid (GIA program).
Water Rates. The City adopted rate increases of 8.5% effective July 1, 2023, and 7.5% effective July 1, 2024.
Proposed rate increases are higher than historic averages and are largely necessitated by macroeconomic conditions.
An additional driver was the deferral and reduction of rates in FY 2020-21 and FY 2021-22 which was done to address
the uncertainties the community was experiencing during COVID-19. The Utilities Department estimates that the
deferral and reduction resulted in a $1.4 million in reduced revenue between July 2020 and June 2022.
Sewer Rates. An overall fund-level rate increases of 4% went into effect July 1, 2023, for the Sewer Fund and an
additional 4% effective July 1, 2024. Rate increases are largely necessitated by macroeconomic conditions which have
resulted in increased operational and capital delivery costs. 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 2023 and the rates subsequently adopted in a public hearing by the City Council on June 6, 2023.
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Management’s Discussion and Analysis
Parking Rates. In the first month of FY 2022-23 the Parking Fund began seeing pre-COVID19 demand. It continues
to assist economic recovery by offering free parking during holiday times to spur economic activity in the downtown.
The City Council approved rate increases to hourly and paid parking effective July 1, 2023, and July 1, 2025, to satisfy
debt service obligations associated with the new Cultural Arts District Parking Structure. Additionally, the Parking
Fund is required to provide funding for ongoing maintenance and repair to existing assets. The City Council took
action in October 2023 to offer a free hour in all parking structures and to provide free parking on Sunday in the
parking structure. These actions will require revenue or expenditure adjustments in the future years as these program
changes are projected to otherwise deplete unappropriated fund balance by 2027-28 fiscal year. Lastly, the City
Council recently authorized release of a Request for Proposal (RFP) to conduct a rate assessment during FY 2023-24.
Staff continues to work with communications consultants to share changes in parking rates and programs to ensure
that the community understands parking programs and rates.
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.
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BASIC FINANCIAL STATEMENTS
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City of San Luis Obispo, California
Government-Wide Financial Statements
For the Fiscal Year Ended June 30, 2023
The government-wide financial statements are designed to provide readers with a broad overview of the City’s
finances, in a manner similar to a private-sector business.
The statement of net position presents information on all the City’s assets and deferred outflows, as well as
liabilities and deferred inflows, with the difference reported as net position. Over time, increases or decreases in net
position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.
The statement of activities presents information showing how the City’s net position changed during the current
fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs,
regardless of the timing of related cash flows. Thus, all the current fiscal year’s revenues and expenses are
considered regardless of when cash is received or paid (e.g., earned but unused vacation leave or uncollected taxes).
Government-wide financial statements distinguish City governmental activities that are principally supported by
taxes and intergovernmental revenues from other business-type activities that are intended to recover all or a
significant portion of their costs through user fees and charges. Governmental activities include public safety,
transportation, community development, leisure, cultural and social services, and general government. Business-
type activities include water, wastewater, parking, and transit.
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Governmental
Activities
Business-Type
Activities Total
Assets
Current assets:
Cash and investments 110,150,045$ 113,765,075$ 223,915,120$
Taxes receivable 12,488,520 -12,488,520
Accounts receivable 1,554,679 8,666,571 10,221,250
Accrued interest receivable 3,406,216 1,181,544 4,587,760
Prepaid items and other assets 358,181 -358,181
Lease receivables 137,224 102,280 239,504
Loans receivable 12,306,707 2,274,934 14,581,641
Total current assets 140,401,572 125,990,404 266,391,976
Noncurrent assets:
Cash and investments held by fiscal agent 421,509 38,899 460,408
Investment in joint venture -3,223,425 3,223,425
Lease receivables 982,193 36,493,618 37,475,811
Nondepreciable capital assets 50,079,281 154,873,578 204,952,859
Depreciable capital assets (net of accumulated
depreciation) 173,902,300 153,059,108 326,961,408
Total noncurrent assets 225,385,283 347,688,628 573,073,911
Total assets 365,786,855 473,679,032 839,465,887
Deferred Outflows of Resources
Other post-employment benefits related 1,895,495 936,560 2,832,055
Pension related 54,473,788 8,272,895 62,746,683
Unamortized loss on refunding of debt 186,844 149,234 336,078
Total deferred outflows of resources 56,556,127 9,358,689 65,914,816
Liabilities
Current liabilities:
Accounts payable 7,577,478 8,018,364 15,595,842
Accrued salaries 1,400,845 272,042 1,672,887
Unearned revenue 13,149,917 7,009,295 20,159,212
Interest payable 91,383 153,156 244,539
Other liabilities 695,679 -695,679
Compensated absence - due within one year 2,345,410 463,367 2,808,777
Long-term debt - due within one year 1,526,136 2,786,844 4,312,980
Total current liabilities 26,786,848 18,703,068 45,489,916
Noncurrent liabilities:
Compensated absence - due in more than on year 1,005,176 198,584 1,203,760
Long-term debt - due in more than one year 17,364,941 134,848,947 152,213,888
Net OPEB liability 3,537,061 1,747,656 5,284,717
Net pension liability 143,624,254 30,627,746 174,252,000
Total noncurrent liabilities 165,531,432 167,422,933 332,954,365
Total liabilities 192,318,280 186,126,001 378,444,281
Deferred Inflows of Resources
Other post-employment benefits related 801,429 395,985 1,197,414
Pension related 9,092,391 186,098 9,278,489
Lease related 1,057,066 36,044,016 37,101,082
Total deferred inflows of resources 10,950,886 36,626,099 47,576,985
Net Position
Net investment in capital assets 205,324,234 170,471,787 375,796,021
Restricted
Debt service 2,141,431 38,899 2,180,330
Transportation projects 8,859,190 1,614,326 10,473,516
Affordable housing programs 14,940,368 -14,940,368
Impact fee programs 11,271,882 -11,271,882
Parkland development programs 3,358,485 -3,358,485
Public art programs 1,269,844 -1,269,844
Tourism programs 1,426,625 -1,426,625
Subsequent year expenditures 68,456 -68,456
Claims 358,181 -358,181
Unrestricted (29,944,880)88,160,609 58,215,729
Total net position 219,073,816$ 260,285,621$ 479,359,437$
City of San Luis Obispo, California
Statement of Net Position
June 30, 2023
The accompanying notes are an integral part of these financial statements.
27
Page 361 of 668
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28
Page 362 of 668
City of San Luis Obispo, California
Governmental Funds Financial Statements
For the Fiscal Year Ended June 30, 2023
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.
Major governmental funds are defined generally as having significant activities or balances in the current year. The
funds described below were determined to be Major Governmental Funds by the City for the current fiscal year.
Individual nonmajor funds may be found in the Supplementary section.
General Fund
The General Fund is used for all the general revenues of the City not specifically levied or collected for other City
funds, and the related expenditures. The major revenue sources for this Fund are property taxes, sales taxes,
franchise fees, business licenses, unrestricted revenues from the state, fines and forfeitures and interest income.
Expenditures are made for community development, public safety, public works, and other services.
Capital Outlay Fund
This fund was established to account for all of the City’s construction projects and capital purchases in excess of
$25,000 with the exception of those funded through non-major capital project funds and Enterprise Funds. Financing
is provided primarily through transfers in from the General Fund, and from State and Federal Grants.
29
Page 363 of 668
30
Page 364 of 668
General
Capital Outlay
Fund
Other
Governmental
Funds
Total
Governmental
Funds
Assets
Cash and investment 35,125,822$ 28,970,961$ 46,053,262$ 110,150,045$
Taxes receivable 12,302,164 -186,35612,488,520
Accounts receivable 1,165,830 7,606 305,251 1,478,687
Other receivables 75,992 --75,992
Accrued interest receivable 345,164 -3,061,054 3,406,218
Prepaid items 101,462 -- 101,462
Cash and investments held by fiscal agent -- 421,509 421,509
Loans receivable 240,637 - 12,066,069 12,306,706
Lease receivable 1,119,417 -- 1,119,417
Total assets 50,476,488$ 28,978,567$ 62,093,501$ 141,548,556$
Liabilities, Deferred Inflows of Resources
and Fund Balance
Liabilities:
Accounts payable 2,444,886$ 4,480,849$ 651,743$ 7,577,478$
Accrued liabilities 1,394,565 -6,2801,400,845
Unearned revenue 2,036,173 - 11,113,744 13,149,917
Other liabilities 695,679 -- 695,679
Total liabilities 6,571,303 4,480,849 11,771,767 22,823,919
Deferred Inflows of Resources:
Lease related 1,057,066 -- 1,057,066
Unavailable revenue 310,051 - 6,124,933 6,434,984
Total deferred inflows of resources 1,367,117 - 6,124,933 7,492,050
Fund balance:
Nonspendable 101,462 -- 101,462
Restricted for:
Debt service -- 2,141,431 2,141,431
Transportation projects -- 7,567,001 7,567,001
Affordable housing programs -- 11,023,649 11,023,649
Impact fee programs --10,519,22610,519,226
Parkland development programs -- 3,205,116 3,205,116
Public art programs -- 1,269,844 1,269,844
Tourism programs -- 1,426,625 1,426,625
Public safety program --68,45668,456
Infrastructure improvement -- 157,805 157,805
Committed to:
General government programs 5,307,988 -- 5,307,988
Risk management 585,456 -- 585,456
Contingency fund 13,727,000 -- 13,727,000
Public safety program - - 641,538 641,538
Assigned to :
CalPERS pension payment 2,000,000 -- 2,000,000
Solid Waste AB939 281,000 -- 281,000
Establishment of Section 115 Trust 2,000,000 -- 2,000,000
Revenue stabilization 2,000,000 -- 2,000,000
Development services 464,136 -- 464,136
SLO Repertory Theater Grant 3,940,000 -- 3,940,000
1,400,000 -- 1,400,000
Contingency fund -- 900,000 900,000
Subsequent year expenditures 2,455,573 24,497,718 5,278,534 32,231,825
Unassigned 8,275,453 - (2,424) 8,273,029
Total fund balance 42,538,068 24,497,718 44,196,801 111,232,587
Total liabilities, deferred inflows of resources
and fund balance 50,476,488$ 28,978,567$ 62,093,501$ 141,548,556$
City of San Luis Obispo, California
Balance Sheet
Governmental Funds
June 30, 2023
Tenant Improvement
The accompanying notes are an integral part of these financial statements.
31
Page 365 of 668
Total fund balance - governmental funds 111,232,587$
Capital assets at estimated historical cost $ 347,239,668
Accumulated depreciation (123,258,087)
223,981,581
6,434,984
1,895,495
54,473,788
186,844
256,718
Lease revenue bonds 16,779,250$
Lease purchase financing 36,245
Lease liabilities 445,919
SBITA liabilities 407,466
Compensated absences 3,350,586
Conservation loan 46,886
Bond premium 1,175,311
Accrued interest payable 91,383
(22,333,046)
Net pension liability is not a current financial obligation and, therefore, is not reported
in the governmental funds. (143,624,254)
Net OPEB liability is not a current financial obligation and, therefore, is not reported
in the governmental funds. (3,537,061)
(801,429)
(9,092,391)
Total net position - governmental activities 219,073,816$
City of San Luis Obispo, California
Reconciliation of the Governmental Funds Balance Sheet
to the Government-wide Statement of Net Position
June 30, 2023
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.
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.
The accompanying notes are an integral part of these financial statements.
32
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General
Capital Outlay
Fund
Other
Governmental
Funds
Total
Governmental
Funds
Revenues:
21,865,468$ -$ -$ 21,865,468$
30,508,731 - - 30,508,731
15,474,655 - 160,890 15,635,545
11,037,037 - - 11,037,037
6,904,194 - - 6,904,194
6,283,397 - - 6,283,397
2,349,603 - - 2,349,603
3,281,010 - - 3,281,010
1,127,744 - - 1,127,744
457,978 - - 457,978
195,991 - - 195,991
1,568,512 - 431,360 1,999,872
1,973,896 124,382 4,266,426 6,364,704
11,695,505 90,837 6,632,210 18,418,552
739,819 90,944 433,482 1,264,245
Total revenues 115,463,540 306,163 11,924,368 127,694,071
Expenditures:
Current:
General government 23,423,444 219,731 3,132 23,646,307
Public safety 36,850,555 - 575,373 37,425,928
Transportation 5,294,069 - 114,635 5,408,704
Leisure, cultural and social services 11,015,177 - - 11,015,177
Community development 12,684,688 - 2,182,335 14,867,023
Debt service:
Principal - - 1,859,782 1,859,782
Interest and fiscal charges - - 745,735 745,735
Capital outlay:
Public safety 44,014 - 1,533,401 1,577,415
Transportation 327,201 6,236,546 2,801,163 9,364,910
Leisure, cultural and social services 117,397 777,339 332,064 1,226,800
Community development - 8,502,665 1,700,000 10,202,665
General government 509,843 918,169 937,420 2,365,432
Total expenditures 90,266,388 16,654,450 12,785,040 119,705,878
Revenues over (under) expenditures 25,197,152 (16,348,287) (860,672) 7,988,193
(Continued)
Miscellaneous
Real property transfer tax
Fines, forfeitures and penalties
Use of money and property
Subventions and grants
Charges for services
Utility users tax
Property tax in lieu of VLF
Franchise taxes
Business tax
Cannabis Tax
City of San Luis Obispo, California
Statements of Revenues, Expenditures, and
Changes in Fund Balances
Governmental Funds
For the Fiscal Year Ended June 30, 2023
Sales and use tax - general
Transaction and use tax - Local
Revenue Measure
Property tax (including real property
transfer tax)
Transient occupancy tax
The accompanying notes are an integral part of these financial statements.
33
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Page 2
General
Capital Outlay
Fund
Other
Governmental
Funds
Total
Governmental
Funds
Other Financing Sources (Uses):
Transfers in 4,314,247$ 27,108,349$ 8,313,193$ 39,735,789$
Transfers out (28,193,431) - (9,298,746) (37,492,177)
Other Financing Sources – SBITA 474,594 - - 474,594
Total other financing sources (uses) (23,404,590) 27,108,349 (985,553) 2,718,206
Net change in fund balance 1,792,562 10,760,062 (1,846,225) 10,706,399
Fund balance, beginning of year 40,745,506 13,737,656 46,043,026 100,526,188
Fund balance, end of year 42,538,068$ 24,497,718$ 44,196,801$ 111,232,587$
City of San Luis Obispo, California
Statements of Revenues, Expenditures, and
Changes in Fund Balances
Governmental Funds
For the Fiscal Year Ended June 30, 2023
The accompanying notes are an integral part of these financial statements.
34
Page 368 of 668
Total net change in fund balance - governmental funds 10,706,399$
Expenditures for capital outlay - governmental funds $ 16,902,251
Transfer from business-type activities -
Depreciation expense (7,401,040)
9,501,211
Loss on disposal of capital asset (2,010)
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:1,859,743
(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:(9,059)
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. (303,703)
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:(245,981)
353,060
17,412,671
1,427,129
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 926,881
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 (922,964)
Total change in net position - governmental activities 40,777,147$
City of San Luis Obispo, California
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, 2023
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.
The accompanying notes are an integral part of these financial statements.
35
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36
Page 370 of 668
City of San Luis Obispo, California
Proprietary Funds Financial Statements
For the Fiscal Year Ended June 30, 2023
Proprietary funds account for City operations financed and operated in a manner like a private business enterprise.
The intent of the City is that the cost of providing goods and services be financed primarily through user charges.
Proprietary funds are generally used to account for services for which the City charges customers; either outside
customers or internal units/divisions of the City. Proprietary funds provide the same type of information as shown in
the government-wide financial statements, only in more detail. The only type of proprietary fund the City maintains
is enterprise funds. The Water, Sewer, Parking, and Transit Funds are presented as business-type activities in the
government-wide financial statements. The City considers all four of its enterprise funds to be major funds.
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.
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.
37
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38
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Water Sewer Parking Transit Totals
Assets
Current assets:
Cash and investment 38,287,076$ 53,412,233$ 14,085,333$ 7,980,433$ 113,765,075$
Accounts receivable 3,596,691 2,785,774 135,270 2,148,836 8,666,571
Lease Receivables - - 102,280 - 102,280
Accrued interest receivable 341,287 287,456 525,805 26,996 1,181,544
Total current assets 42,225,054 56,485,463 14,848,688 10,156,265 123,715,470
Noncurrent assets:
34,580 278 4,041 - 38,899
Investment in joint venture 3,223,425 - - - 3,223,425
Loan Receivables 1,476,189 798,745 - - 2,274,934
Lease Receivables - - 36,493,618 - 36,493,618
Capital assets:
Land 945,926 2,176,114 5,947,455 - 9,069,495
SBITA assets 38,498 38,498 - - 76,996
Infrastructure 122,200,988 93,826,165 28,282,818 110,972 244,420,943
Buildings and improvements 19,139,492 5,074,388 1,101,218 5,212,278 30,527,376
Equipment 6,474,677 6,606,923 1,834,860 9,006,717 23,923,177
Construction in progress 5,606,755 133,499,315 4,289,786 2,408,227 145,804,083
Total capital assets 154,406,336 241,221,403 41,456,137 16,738,194 453,822,070
Less accumulated depreciation (66,302,568) (53,594,768) (15,618,289) (10,373,759) (145,889,384)
Capital assets, net of
accumulated depreciation 88,103,768 187,626,635 25,837,848 6,364,435 307,932,686
Total noncurrent assets 92,837,962 188,425,658 62,335,507 6,364,435 349,963,562
Total assets 135,063,016 244,911,121 77,184,195 16,520,700 473,679,032
Deferred Outflows of Resources
Pension related 3,733,372 3,458,025 857,834 223,664 8,272,895
392,613 413,117 105,784 25,046 936,560
44,615 6,739 97,880 - 149,234
4,170,600 3,877,881 1,061,498 248,710 9,358,689
(Continued)
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
City of San Luis Obispo
Statement of Net Position
Business-Type Activities - Enterprise Funds
June 30, 2023
The accompanying notes are an integral part of these financial statements.
39
Page 373 of 668
Page 2
Water Sewer Parking Transit Totals
Liabilities
Current liabilities:
Accounts payable 418,379$ 5,767,681$ 916,536$ 915,768$ 8,018,364$
Accrued liabilities 117,302 96,683 39,719 18,338 272,042
Compensated absences 240,237 172,919 37,072 13,139 463,367
Unearned revenue - - - 7,009,295 7,009,295
Interest payable 60,522 30,718 61,916 - 153,156
Due to other funds - - - - -
Current portion of long-term debt 1,127,607 1,070,675 588,562 - 2,786,844
Total current liabilities 1,964,047 7,138,676 1,643,805 7,956,540 18,703,068
Noncurrent liabilities:
Compensated absences 102,959 74,107 15,888 5,630 198,584
Lease revenue bonds 8,851,738 266,349 3,868,788 - 12,986,875
Installment sale agreement - 2,869,551 - - 2,869,551
State loan/note payable 11,102,800 105,006,444 2,857,619 - 118,966,863
SBITA liabilities 12,829 12,829 - - 25,658
Net pension liability 13,541,944 12,955,621 3,358,609 771,572 30,627,746
792,430 725,475 185,767 43,984 1,747,656
Total noncurrent liabilities 34,404,700 121,910,376 10,286,671 821,186 167,422,933
Total liabilities 36,368,747 129,049,052 11,930,476 8,777,726 186,126,001
Deferred Inflows of Resources
Pension related 136,614 37,581 9,623 2,280 186,098
164,840 175,550 44,952 10,643 395,985
Lease related - - 36,044,016 - 36,044,016
301,454 213,131 36,098,591 12,923 36,626,099
Net Position
Net investment in capital assets 67,066,238 78,420,355 18,620,759 6,364,435 170,471,787
Restricted:
Debt service 34,580 278 4,041 - 38,899
Transportation projects - - - 1,614,326 1,614,326
Unrestricted 35,462,597 41,106,186 11,591,826 - 88,160,609
Total net position 102,563,415$ 119,526,819$ 30,216,626$ 7,978,761$ 260,285,621$
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, 2023
Enterprise Funds
Net other post-employment benefits
liability
The accompanying notes are an integral part of these financial statements.
40
Page 374 of 668
Water Sewer Parking Transit Total
Operating revenues:
Charges for sales and service 23,856,235$ 20,288,589$ 4,606,611$ 806,521$ 49,557,956$
Impact fees 3,616,307 1,980,886 - - 5,597,193
Fines and forfeitures - 23,383 1,369,093 - 1,392,476
Other revenues 248,134 48,456 46,668 3,448 346,706
Total operating revenues 27,720,676 22,341,314 6,022,372 809,969 56,894,331
Operating expenses:
Salaries and benefits 4,964,824 4,859,875 1,662,770 189,519 11,676,988
Supplies and maintenance 1,766,646 2,203,286 733,292 378,050 5,081,274
Contract services 10,263,880 1,914,015 879,767 3,090,050 16,147,712
General government 1,535,175 1,497,395 872,976 365,544 4,271,090
Depreciation 2,945,160 2,587,643 662,177 459,600 6,654,580
Total operating expenses 21,475,685 13,062,214 4,810,982 4,482,763 43,831,644
Operating income (loss)6,244,991 9,279,100 1,211,390 (3,672,794) 13,062,687
Nonoperating revenues (expenses)
Use of money and property 599,966 684,191 1,234,817 99,366 2,618,340
Grants 425,142 1,424,328 700,000 4,806,426 7,355,896
Interest expense and fiscal charges (676,600) (355,050) (252,519) - (1,284,169)
Income (loss) from investment
in joint venture 391,993 - - - 391,993
Total nonoperating revenues
(expenses)740,501 1,753,469 1,682,298 4,905,792 9,082,060
Income (loss) before transfers
and capital contributions 6,985,492 11,032,569 2,893,688 1,232,998 22,144,747
Capital Contributions
Transfers out (776,578) (1,076,388) (390,646)- (2,243,612)
Total transfers (776,578) (1,076,388) (390,646)- (2,243,612)
Change in net position 6,208,914 9,956,181 2,503,042 1,232,998 19,901,135
Net position, beginning of year 96,354,501 109,570,638 27,713,584 6,745,763 240,384,486
Net position, end of year 102,563,415$ 119,526,819$ 30,216,626$ 7,978,761$ 260,285,621$
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, 2023
The accompanying notes are an integral part of these financial statements.
41
Page 375 of 668
Water Sewer Parking Transit Total
Cash flows from operating activities:
Cash received from customers 28,522,740$ 22,340,965$ 5,916,382$ 3,246,567$ 60,026,654$
(12,743,639) (4,893,747) (1,003,212) (3,022,778) (21,663,376)
(1,535,175) (1,497,395) (872,976) (365,544) (4,271,090)
(5,021,721) (4,964,203) (1,672,720) (189,741) (11,848,385)
Net cash provided by (used in)
operating activities 9,222,205 10,985,620 2,367,474 (331,496) 22,243,803
Operating grants received 425,142 1,233,576 -4,806,426 6,465,144
Transfers to other funds (776,578) (1,076,388) (390,646)- (2,243,612)
(351,436) 157,188 (390,646) 4,806,426 4,221,532
Cash flows from capital and related
financing activities:
(2,226,356) (31,035,579) (1,886,412) (2,325,169) (37,473,516)
SBITA payment paid (13,200) (13,200) - - (26,400)
Principal paid on debt financing (1,624,674) (1,022,058) (567,098)- (3,213,830)
Interest paid on debt financing (817,883) (358,881) (284,478)- (1,461,242)
Proceeds from issuance of debt 122,214 21,384,848 -- 21,507,062
Net cash used in capital and
related financing activities (4,559,899) (11,044,870) (2,737,988) (2,325,169) (20,667,926)
Cash flows from investing activities:
Use of money and property 504,117 587,114 718,100 83,001 1,892,332
Net cash provided by
investing activities 504,117 587,114 718,100 83,001 1,892,332
4,814,987 685,052 (43,060) 2,232,762 7,689,741
33,506,669 52,727,459 14,132,434 5,747,671 106,114,233
38,321,656$ 53,412,511$ 14,089,374$ 7,980,433$ 113,803,974$
(Continued)
Enterprise Funds
City of San Luis Obispo, California
Statement of Cash Flows
Business-Type Activities - Enterprise Funds
For the Fiscal Year Ended June 30, 2023
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.
42
Page 376 of 668
City of San Luis Obispo, California
Statement of Cash Flows
Business-Type Activities - Enterprise Funds
For the Fiscal Year Ended June 30, 2023
Page 2
Water Sewer Parking Transit Total
Operating income (loss) 6,244,991$ 9,279,100$ 1,211,390$ (3,672,794)$ 13,062,687$
Depreciation 2,945,160 2,587,643 662,177 459,600 6,654,580
Accounts receivable 802,064 (349) (105,990) (271,533) 424,192
Accounts payable (713,113) (776,446) 609,847 445,322 (434,390)
Unearned revenue - - - 2,708,131 2,708,131
98,121 57,146 31,398 9,566 196,231
(52,363) (50,249) (12,867) (3,046) (118,525)
(102,655) (111,225) (28,481) (6,742) (249,103)
Net cash provided by (used in)
operating activities 9,222,205$ 10,985,620$ 2,367,474$ (331,496)$ 22,243,803$
Reconciliation of cash and investments to the balance sheet:
Cash and cash equivalents 38,287,076$ 53,412,233$ 14,085,333$ 7,980,433$ 113,765,075$
34,580 278 4,041 - 38,899
Total cash and investments 38,321,656$ 53,412,511$ 14,089,374$ 7,980,433$ 113,803,974$
Noncash investing, capital, and financing activities:
None
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
Enterprise Funds
The accompanying notes are an integral part of these financial statements.
43
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44
Page 378 of 668
City of San Luis Obispo, California
Fiduciary Funds Financial Statements
For the Fiscal Year Ended June 30, 2023
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.
45
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46
Page 380 of 668
Custodial Funds
Assets
Current assets:
Cash and investment 20,508,077$
Accounts receivable 409,257
Accrued interest receivable 19,938
Capital assets, net of accumulated depreciation 726,355
Total assets 21,663,627
Liabilities
Accounts payable 141,008
Compensated absence 64,343
Accrued Salaries 13,860
Other liabilities 2,000
Total liabilities 221,211
NET POSITION
Restricted for
Individuals, organizations, and other governments 21,442,416
Total Net Position 21,442,416$
City of San Luis Obispo, California
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2023
The accompanying notes are an integral part of these financial statements.
47
Page 381 of 668
Custodial Funds
ADDITIONS:
Assessment revenue 958,259$
Charges for services 1,189,924
Contribution from developers 1,128,775
Other revenue 1,219,589
Use of money and property 402,249
Total additions 4,979,966
DEDUCTIONS:
Administration expenses 1,081,763
Contractual services 1,371,337
Materials and supplies 184,392
Public programming 44,188
Use of developer deposits 1,217,765
Depreciation 63,283
Total deductions 3,962,728
Change in net position 1,017,238
NET POSITION:
Beginning of year, as restated 20,425,178
End of year 21,442,416$
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Fiscal Year Ended June 30, 2023
City of San Luis Obispo, California
The accompanying notes are an integral part of these financial statements.
48
Page 382 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page
Note 1: Summary of Significant Accounting Policies 51
Description of the Reporting Entity 51
Government-wide and Fund Financial Statements 51
Measurement Focus, Basis of Accounting and Basis of Presentation 51
Assets, Liabilities, and Net Position or Fund Balance 53
Reconciliation of Government-wide and Fund Financial Statements 56
Budgets and Budgetary Accounting 56
Fair Value Measurements 58
Note 2: Cash and Investments 58
Funds with Fiscal Agent 58
Investments 59
Note 3: Property Taxes 63
Note 4: Loan Receivable 64
Note 5: Capital Assets 64
Note 6: Leases 66
Note 7: Long Term Debt 68
Summary of Long-Term Debt 68
Governmental Activities Summary: 69
Revenue Bonds 69
Lease-Purchase Financing 70
2014 Energy Sources Conservation State Loan 71
Subscription Based Information Technology Arrangements 71
Business-Type Activities Summary: 72
Revenue Bonds 72
Loans 73
Installment Sale Agreements 74
Special Assessment Debt Without City Commitment 74
Note 8: Pension Plans 75
Agent-Multiple Employer Plan 75
General Information about the Pension Plan 75
Net Pension Liability 76
Changes in the Net Pension Liability 78
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions 79
Cost-Sharing Employer Plan 79
General Information about the Pension Plan 79
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions 81
49
Page 383 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
Table of Contents
June 30, 2023
Page 50
Page
Payable to the Pension Plan 83
Note 9: Other Post-Employment Benefits (OPEB) 84
General Information about OPEB 84
Net OPEB Liability 85
Changes in the Net OPEB Liability 86
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB 87
Payable to the OPEB Plan 88
Note 10: Deferred Compensation Plan 88
Note 11: Interfund Transactions 89
Note 12: Joint Ventures, Jointly Governed Organizations and Operating Agreements 89
Whale Rock Commission 89
San Luis Obispo Regional Transit Authority 90
San Luis Obispo Council of Governments 91
Nacimiento Water Supply Project 91
Note 13: Risk Management 92
California Joint Powers Insurance Authority 92
Self-Insurance Programs of the Authority 92
Adequacy of Protection 93
Self-Insurance 93
Note 14: Commitments and Contingencies 94
Litigation 94
Grant Awards 94
Regional Transit Authority Pension Expense 94
Note 15: Construction and Other Significant Commitments 95
Note 16: Fund Balance Deficiency 95
Note 17: Subsequent Events 95
Note 18: New Accounting Standards 95
Accounting Standards Adopted 95
New Accounting Standards 96
Note 19: Prior Period Adjustments 96
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
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.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 52
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.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 53
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.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 54
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
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 55
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, 2022
Measurement Period July 1, 2021 to June 30, 2022
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.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 56
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.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 57
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 2023 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.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 58
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, 2023, 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.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 59
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, 2023, cash and investments consisted of the following:
Fair
Value
Percent of
Portfolio
Cash and cash equivalents 36,099,803$ 14.74%
Investments:
State Local Agency Investment Fund 44,574,587 18.20%
U.S. Treasury Bond / Note 61,547,100 25.13%
Federal Agency Bond / Note 20,434,373 8.34%
Corporate Note 14,293,670 5.84%
Municipal Bond/Note 2,086,690 0.85%
Bank Note 624,470 0.26%
Asset-Backed Securities 432,685 0.18%
Negotiable Certificates of Deposit 979,368 0.40%
Non-Negotiable Certificates of Deposit 2,038,589 0.83%
Money Market Funds 61,772,270 25.23%
Total investments 208,783,802 85.26%
Total cash and investments 244,883,605$ 100.00%
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 60
Note 2: Cash and Investments (Continued)
At June 30, 2023, 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, 2023:
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 $37,966,902 at June 30, 2023 and were insured or collateralized with
securities held by the pledging financial institution's trust department or agent in the City's name.
Governmental
Funds
Business-Type
Funds
Fiduciary
Funds Total
Cash and investments 110,150,045$ 113,765,075$ 20,508,077$ 244,423,197$
Cash and investments held by fiscal agents 421,509 38,899 - 460,408
Total cash and investments 110,571,554$ 113,803,974$ 20,508,077$ 244,883,605$
Government-Wide Statement of
Net Position
Fair Value
Investments by fair value hierarchy
U.S. Treasury Bond / Note 61,547,100$ -$ 61,547,100$ -$
Federal Agency Bond / Note 20,434,373 - 20,434,373 -
Corporate Note 14,293,670 - 14,293,670 -
Municipal Bond/Note 2,086,690 - 2,086,690 -
Bank Note 624,470 - 624,470 -
Asset-Backed Securities 432,685 - 432,685 -
Negotiable Certificates of Deposit 979,368 - 979,368 -
Total investments by fair value hierarchy 100,398,356 -$ 100,398,356$ -$
Investments not subject to fair value hierarchy
State Local Agency Investment Fund 44,574,587
Non-Negotiable Certificates of Deposit 2,038,589
Money Market Funds 61,772,270
Total investments not subject to fair value hierarchy 108,385,446
Total investments measured at fair value 208,783,802$
Fair Value Measurements UsingQ
Prices in
Active
Markets for
Identical
Assets (Level
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobserva
ble Inputs
(Level 3)
60
Page 394 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 61
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 44,574,587$ -$ 44,574,587$ -$ -$
U.S. Treasury Bond / Note 61,547,100 - 13,739,170 47,807,930 -
Federal Agency Bond / Note 20,434,373 - 8,534,696 11,899,677 -
Corporate Note 14,293,670 - 1,362,594 12,931,076 -
Municipal Bond/Note 2,086,690 - 1,173,594 913,096 -
Bank Note 624,470 - - 624,470 -
Asset-Backed Securities 432,685 - 4,303 428,382 -
Negotiable Certificates of Deposit 979,368 - 979,368 - -
Non-Negotiable Certificates of Deposit 2,038,589 - 2,038,589 - -
Money Market Funds 61,772,270 61,772,270 - - -
Total maturities 208,783,802$ 61,772,270$ 72,406,901$ 74,604,631$ -$
Cash in banks and on hand 36,099,803
244,883,605$
61
Page 395 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 62
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, 2023:
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 $200 million and that maintain a ratio of equity to total assets of at least 5%.
Foreign Currency Risk. The City does not hold any investment that is based on foreign currency exchange rates.
Type of Investment Rating Total
Federal Agency Bonds / Notes AA+20,434,373$
Corporate Notes AAA 1,562,116
AA 1,598,703
AA-1,481,391
A+3,131,800
A 3,873,831
A-2,645,829
Total Corporate Notes 14,293,670
Municipal Bond/Note AAA 588,874
AA+289,205
AA 228,202
AA-980,409
Bank Note A 624,470
Asset-Backed Securities AAA 432,685
Negotiable Certificates of Deposit A 979,368
Not Applicable:
U.S. Treasury Bonds / Notes 61,547,100
Not Rated:
State Local Agency Investment Fund 44,574,587
Non-Negotiable Certificates of Deposit 2,038,589
Money Market Mutual Funds 61,772,270
Total Investments 208,783,802$
62
Page 396 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 63
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, 2023 have been accrued since they will be collected within 60 days subsequent to year-end.
63
Page 397 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 64
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, 2023, 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 $8.6 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, 2023, 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, 2023, the Affordable Housing Fund had eight outstanding down payment assistance loans
with a principal balance of $360,335. 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, 2023, 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, 2023, the CDBG Fund had $1,112,944
principal outstanding on the loans. The loans have terms of 30 years and annual interest rates of 3% to 4%.
Note 5: Capital Assets
GASB standards require that the City report in the government-wide statements the value of all capital assets net of accumulated
depreciation, including infrastructure assets, in accordance with GAAP. Infrastructure assets are defined as long-lived capital assets
that are stationary in nature and normally can be preserved for a significantly greater number of years than most capital assets.
Total Balance
Description Loan Receivable Interest Receivable June 30, 2023
Governmental Funds:
Affordable Housing Loan 8,490,688$ 2,008,223$ 10,498,911$
BEGIN Homeownership Loan 130,000 52,675 182,675
Down Payment Assistance 360,335 75,922 436,257
CDBG 1,112,944 704,908 1,817,852
Impact Fee Loan 2,212,740 175,711 2,388,451
Total governmental funds 12,306,707 3,017,439 15,324,146
Enterprise Funds:
Impact Fee Loan 2,274,934 333,427 2,608,361
Total enterprise funds 2,274,934 333,427 2,608,361
Total Primary Government 14,581,641$ 3,350,866$ 17,932,507$
64
Page 398 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 65
Note 5: Capital Assets (Continued)
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, 2023 was as follows:
Balance
June 30, 2022 Balance
(as restated) Additions Deletions Transfers June 30, 2023
Governmental activities:
Capital assets not being depreciated:
Land 32,263,736$ -$ -$ -$ 32,263,736$
Construction in progress 10,637,004 16,902,253 - (10,370,342) 17,168,915
Public art 646,630 - - - 646,630
Total capital assets not
being depreciated 43,547,370 16,902,253 - (10,370,342) 50,079,281
Capital assets being depreciated:
Infrastructure 205,710,266 - - 6,358,356 212,068,622
Accumulated Depreciation (74,431,463) (4,294,004) - - (78,725,467)
Buildings and improvements 48,505,114 1,089,669 49,594,783
Accumulated Depreciation (22,570,539) (1,000,669) - - (23,571,208)
Equipment 32,330,177 - (742,072) 2,922,317 34,510,422
Accumulated Depreciation (19,955,036) (1,746,438) 740,062 - (20,961,412)
Capital assets being amortized:
Right of use - Lease asset 157,527 579,204 - - 736,731
Accumulated Amortization (37,065) (152,886) - - (189,951)
Subscription based I.T. agreeemnts 172,229 474,594 - - 646,823
Accumulated Amortization - (207,043) - - (207,043)
Total capital assets being
depreciated/amortized, net 169,881,210 (6,347,242) (2,010) 10,370,342 173,902,300
Governmental activities,
capital assets, net 213,256,351$ 10,555,011$ (2,010)$ -$ 223,981,581$
Business-type activities:
Capital assets not being depreciated:
Land 9,069,495$ -$ -$ -$ 9,069,495$
Construction in progress 122,955,610 37,473,518 - (14,625,045) 145,804,083
Total capital assets not
being depreciated 132,025,105 37,473,518 - (14,625,045) 154,873,578
Capital assets being depreciated:
Infrastructure 230,867,848 - - 13,553,095 244,420,943
Accumulated Depreciation (108,076,404) (5,079,645) - - (113,156,049)
Buildings and improvements 30,527,376 - - - 30,527,376
Accumulated Depreciation (15,961,344) (599,380) - - (16,560,724)
Equipment 22,938,836 - (87,609) 1,071,950 23,923,177
Accumulated Depreciation (15,284,663) (944,947) 82,665 - (16,146,945)
Capital assets being amortized:
Subscription based I.T. agreeemnts - 76,996 - - 76,996
Accumulated Amortization - (25,666) - - (25,666)
Total capital assets being
depreciated, net 145,011,649 (6,572,642) (4,944) 14,625,045 153,059,108
Business-type activities,
capital assets, net 277,036,754 30,900,876 (4,944) - 307,932,686
Total Government-wide 490,293,105$ 41,455,887$ (6,954)$ -$ 531,914,267$
65
Page 399 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 66
Note 5: Capital Assets (Continued)
Depreciation and amortization 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 2023, the City recognized $165,651 of lease
revenue and $6,335 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 2023, the City
recognized $6,542 of lease revenue and $5,769 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 2023, the City recognized $390,723 of lease revenue
and $367,753 of interest revenue under the lease.
Governmental activities:
Public safety 570,330$
Transportation 2,682,663
Culture and recreation 260,521
Community development 119,699
General government 3,767,827
Total depreciation - governmental activities 7,401,040
Business-type activities:
Water 2,945,161
Sewer 2,587,643
Parking 662,174
Transit 459,602
Total depreciation - business-type activities 6,654,580
Total Government-wide 14,055,620$
66
Page 400 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 67
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 2023, the City recognized $40,755 of lease revenue and $5,438 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 2023, the City recognized $45,744 of lease revenue and $2,571 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 2023, the City recognized $73,383 of lease revenue and $13,079 of interest revenue under
the lease.
The future revenue payments as of June 30, 2023 are as follows:
Year Ending
June 30, Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest
2024 102,280$ 917$ 1,396$ 5,736$ -$ 369,913$ 32,698$ 4,791$ 40,934$ 1,330$ 62,196$ 11,908$ 239,504$ 394,595$
2025 - - 1,642 5,661 - 370,064 34,489 4,082 43,481 4 65,718 10,602 145,330 390,413
2026 - - 1,940 5,592 - 371,080 36,377 3,348 - - 69,344 9,257 107,661 389,277
2027 - - 2,237 5,513 - 372,105 38,325 2,574 - - 73,112 7,839 113,674 388,031
2028 - - 2,551 5,437 - 374,167 40,349 1,765 - - 77,008 6,362 119,908 387,731
2029-2033 - - 18,110 25,328 - 1,879,718 87,079 906 - - 256,119 9,671 361,308 1,915,623
2034-2038 - - 29,112 20,973 - 1,897,112 - - - - - - 29,112 1,918,085
2039-2043 - - 43,398 14,322 - 1,907,282 - - - - - - 43,398 1,921,604
2044-2048 - - 61,802 4,703 - 1,910,058 - - - - - - 61,802 1,914,761
2049-2053 - - - - - 1,901,196 - - - - - - - 1,901,196
2054-2058 - - - - - 1,882,110 - - - - - - - 1,882,110
2059-2063 - - - - 7,853 1,850,050 - - - - - - 7,853 1,850,050
2064-2068 - - - - 1,057,179 1,804,432 - - - - - - 1,057,179 1,804,432
2069-2073 - - - - 1,396,048 1,739,908 - - - - - - 1,396,048 1,739,908
2074-2078 - - - - 1,824,027 1,657,067 - - - - - - 1,824,027 1,657,067
2079-2083 - - - - 2,266,909 1,552,723 - - - - - - 2,266,909 1,552,723
2084-2088 - - - - 2,765,362 1,424,328 - - - - - - 2,765,362 1,424,328
2089-2093 - - - - 3,382,050 1,266,258 - - - - - - 3,382,050 1,266,258
2094-2098 - - - - 4,023,770 1,077,840 - - - - - - 4,023,770 1,077,840
2099-2103 - - - - 4,742,095 853,217 - - - - - - 4,742,095 853,217
2104-2108 - - - - 5,621,170 589,608 - - - - - - 5,621,170 589,608
2109-2113 - - - - 6,534,924 280,398 - - - - - - 6,534,924 280,398
2114-2115 - - - - 2,872,231 14,579 - - - - - - 2,872,231 14,579
Total 102,280$ 917$ 162,188$ 93,265$ 36,493,618$ 27,345,213$ 269,317$ 17,466$ 84,415$ 1,334$ 603,497$ 55,639$ 37,715,315$ 27,513,834$
TotalJames Town Crown Castle Garden St Laguna ATT Laguna SBA Santa Rosa St
67
Page 401 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 68
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, 2023:
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
June 30, 2022 Balance Due Within
(as restated) Additions Deductions June 30, 2023 One Year
Governmental activities:
2012 Lease revenue refunding bonds 2,700,000$ -$ (285,000)$ 2,415,000$ 305,000$
2014 Lease revenue bonds 6,460,000 - (185,000) 6,275,000 190,000
2018 Lease revenue refunding bonds 8,659,100 - (569,850) 8,089,250 596,050
Add: Unamortized bond premium 1,135,756 - (85,448) 1,050,308 -
Total revenue bonds 18,954,856 - (1,125,298) 17,829,558 1,091,050
Lease liability 125,003 579,204 (133,285) 570,922 141,714
Subscription based I.T. agreeemnts 172,229 474,594 (239,358) 407,465 210,241
Lease-purchase financing 390,420 - (354,175) 36,245 36,245
Conservation Loan 139,961 - (93,074) 46,887 46,886
Total long-term debt,
governmental activities 19,782,469$ 1,053,798$ (1,945,190)$ 18,891,077$ 1,526,136$
Compensated absences 3,104,605$ 3,475,021$ (3,229,040)$ 3,350,586$ 2,345,410$
Business-type activities:
2012 Water revenue refunding bonds 550,000$ -$ (550,000)$ -$ -$
2018 Lease revenue refunding bonds 4,560,900 - (300,150) 4,260,750 313,949
2018 Water revenue refunding bonds 8,330,000 - (470,000) 7,860,000 495,000
Add: Unamortized bond premium 1,866,278 - (191,204) 1,675,074 -
Total revenue bonds 15,307,178 - (1,511,354) 13,795,824 808,949
Subscription based I.T. agreeemnts - 76,996 (26,400) 50,596 24,938
Loans 99,918,648 21,507,062 (1,212,202) 120,213,508 1,246,645
Installment sale agreements 4,257,343 - (681,480) 3,575,863 706,312
Total long-term debt,
business-type activities 119,483,169 21,584,058 (3,431,436) 137,635,791 2,786,844
Compensated absences 526,111 846,283 (710,443) 661,951 463,367
Total Government-wide 142,896,354$ 26,959,160$ (9,316,109)$ 160,539,405$ 4,334,913$
68
Page 402 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 69
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, 2023, the principal amount outstanding on the bonds was $2,415,000. 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, 2023.
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, 2023, the unamortized premium was $123,520.
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, 2023, the principal amount outstanding
on the bonds was $6,275,000.
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, 2023, the unamortized premium was $111,609.
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, 2023, the principal amount outstanding that pertains to governmental activities was $8,089,250
of the total $12,350,000 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, 2023, the unamortized premium for governmental activities was $815,179.
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, 2023, the value of the lease liability is $92,775. The City is required to make monthly payments of $670 and increase annually
by 4% 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, 2023 of
$157,442 with accumulated amortization of $74,090 is included in the intangible assets on the capital assets activities table found in
Note 5 above.
69
Page 403 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 70
Note 7: Long Term Debt (Continued)
Lease Liability (994 Mill Street)
On June 9, 2022, the City entered into a 3-year Lease Agreement as lessee of a site for the use of 11 parking spaces. The term of this
lease commenced on July 1, 2022. The City pays the landlord $10,037.7 annually with a 3% increase. An initial lease liability was
recorded in the amount of $579,204. As of June 30, 2023, the value of the lease liability is $478,147. The lease has an interest rate
of 4%. The value of the right to use asset as of June 30, 2023 of $579,204 with accumulated amortization of $115,841 is included
in the intangible assets on the capital assets activities table found in Note 5 above.
At June 30, 2023, the aggregate maturities of the aforementioned governmental activities revenue bonds were as follows:
At June 30, 2023, the aggregate maturities of the aforementioned governmental lease liabilities were 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, 2023, the principal amount outstanding is $36,245.
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 $217,671
beginning June 1, 2021 through June 1, 2023. At June 30, 2023, the lease was paid off.
For the Year Ending June 30, Principal Interest Total
2024 1,091,050$ 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 1,066,425 480,179 1,546,604
2029-2033 4,801,675 1,724,463 6,526,138
2034-2038 3,749,050 865,710 4,614,760
2039-2043 1,931,850 348,294 2,280,144
2044-2045 805,000 32,500 837,500
16,779,250$ 5,858,726$ 22,637,976$
Unamortized bond Premium 1,050,308 - 1,050,308
Total 17,829,558$ 5,858,726$ 23,688,284$
For the Year Ending June 30, Principal Interest Total
2024 141,781$ 19,321$ 161,102$
2025 152,705 13,481 166,186
2026 143,763 7,616 151,379
2027 132,673 2,475 135,148
570,922$ 42,893$ 613,815$
70
Page 404 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 71
Note 7: Long Term Debt (Continued)
At June 30, 2023, 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,
2023, the principal amount outstanding is $46,887.
At June 30, 2023, the aggregate maturities of the aforementioned governmental activities conservation loan is as follows:
Subscription Based Information Technology Arrangements
Application Software Technology (AST). AST arrangement is a five-year agreement, initiated on September 1, 2021 with an annual
payment of $20,400. The city has used a 2.88% for this arrangement based on similar debt during the same fiscal year. There are no
options to extend the arrangement or purchase the software.
eScribe. eScribe arrangement is a three-year arrangement, initiated on February 17, 2021. The city pays the vendor $18,110 annually
with 2.5% increase. The city has used a 2.85% for this arrangement based on similar debt during the same fiscal year. The
arrangement will automatically renew for an additional Term unless notice of cancellation is received 60 days prior to the expiration
of the Term.
ESRI ArcGIS Online. ESRI ArcGIS Online arrangement is a three-year arrangement, initiated on July 8, 2020. The payment amount
on the city is based on the price of quote. The city has used a 2.85% for this arrangement based on similar debt during the same fiscal
year. The city decided to sign another three-year renewal for the arrangement until July 6, 2026.
Office 365. Office 365 arrangement is a three-year agreement, initiated on July 1, 2022 with an annual payment of $189,126. The
city has used a 2.85% for this arrangement based on similar debt during the same fiscal year. An extended term feature that allows
Online Services to continue month-to-month is available. The city allocates this arrangement for both governmental and business
entity funds.
At June 30, 2023, the aggregate maturities of the aforementioned subscription based I.T. agreements were as follows:
For the Year Ending June 30, Principal Interest Total
2024 36,245$ 289$ 36,534$
36,245$ 289$ 36,534$
For the Year Ending June 30, Principal Interest Total
2024 46,887$ 235$ 47,122$
46,887$ 235$ 47,122$
For the Year Ending June 30, Principal Interest Total
2024 235,180$ 6,737$ 241,917$
2025 203,059 833 203,892
2026 19,822 246 20,068
458,061$ 7,816$ 465,877$
71
Page 405 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 72
Note 7: Long Term Debt (Continued)
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, 2023, the bonds were paid off. 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, 2023.
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, 2023, the unamortized premium was $35,455.
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, 2023, principal and interest paid, and total customer net revenues
were $572,000 and $6,173,810, respectively.
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, 2023, the principal amount outstanding that pertains to business-type activities was $4,260,750
of the total $12,350,000 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, 2023, the unamortized premium that pertains to business-type activities was
$429,370.
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, 2023, the principal amount outstanding on the bonds was $7,860,000.
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, 2023, principal and interest paid, and total customer net revenues
were $886,500 and $6,173,810, 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, 2023, the unamortized premium was
$1,210,246.
72
Page 406 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 73
Note 7: Long Term Debt (Continued)
At June 30, 2023, the aggregate maturities of the business-type revenue bonds were as follows:
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, 2023, the principal amount outstanding on the loan was
$3,168,631.
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, 2023, the
principal amount outstanding on the loan was $6,304,106.
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, 2023, principal and interest paid, and total customer net revenues
were $532,431 and $10,570,048, 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, 2023, the City had partially drawn
down the loan and had an outstanding principal balance of $99,035,123.
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, 2023, the City had partially drawn down the loan and had an outstanding principal balance of
$11,705,648.
For the Year Ending June 30, Principal Interest Total
2024 808,949$ 575,732$ 1,953,388$
2025 846,026 538,424 1,384,682
2026 886,550 496,122 1,384,449
2027 813,225 451,794 1,382,672
2028 853,575 411,134 1,264,709
2029-2033 4,958,325 1,368,100 6,326,425
2034-2038 2,860,950 238,212 3,099,162
2039 93,150 3,256 96,406
Subtotal 12,120,750 4,082,774 16,203,524
Unamortized bond Premium 1,675,074 - 1,675,074
Total 13,795,824$ 4,082,774$ 17,878,598$
73
Page 407 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 74
Note 7: Long Term Debt (Continued)
At June 30, 2023, the aggregate maturities of the aforementioned business-type loans were as follows:
Installment Sale Agreements
2008 Suntrust Loan. 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, 2023, the principal amount outstanding on the loan was $180,000.
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, 2023,
the principal amount outstanding on the loan was $3,395,863.
At June 30, 2023, 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.
Special Assessment Debt Without City Commitment
Special assessment districts have been established in various parts of the City to provide improvements to properties located in those
districts. Properties in these districts are assessed for the cost of improvements; these assessments are payable solely by property
owners over the term of the debt issued to finance these improvements. The City is not legally or morally obligated to pay these
debts or be the purchaser of last resort of any foreclosed properties in these special assessment districts, nor is it obligated to advance
City funds to repay these debts in the event of default by any of these districts. At June 30, 2023, the balances of these Districts’
outstanding debt were as follows:
City of San Luis Obispo Community Facilities District No.2019-1 Special Tax Bonds, Series 2021 $19,660,000
For the Year Ending June 30, Principal Interest Total
2024 3,837,592$ 2,367,252$ 6,204,844$
2025 3,917,359 2,285,150 6,202,509
2026 4,000,951 2,201,226 6,202,177
2027 4,086,434 2,115,400 6,201,834
2028 4,173,855 2,027,625 6,201,480
2029-2033 21,843,477 8,756,190 30,599,667
2034-2038 22,519,045 6,382,851 28,901,896
2039-2043 19,465,358 4,308,927 23,774,285
2044-2048 19,482,563 2,584,388 22,066,951
2049-2052 16,886,874 766,687 17,653,561
120,213,508$ 33,795,695$ 154,009,201$
For the Year Ending June 30, Principal Interest Total
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 590,071 26,164 616,235
2029 607,184 8,804 615,988
3,575,863$ 307,426$ 3,883,289$
74
Page 408 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 75
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, 2023 are as follows:
Agent-Multiple Employer Plan
General Information about the Pension Plan
Plan Descriptions. As noted above, the City contributes to CalPERS for a defined benefit pension plan for all qualified permanent
and probationary employees. CalPERS acts as a common investment and administrative agent for its participating member
employers. Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available
reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information
that can be found on the CalPERS website.
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, 2023, are summarized as follows:
Net Pension Deferred Outflows Deferred Inflows Pension
Liability of Resources of Resources Expense
Miscellaneous Plan 91,395,035$ 25,881,246$ 268,051$ 11,152,609$
Safety Plan 82,856,965 36,865,437 9,010,438 (8,082,850)
Total Government-Wide 174,252,000$ 62,746,683$ 9,278,489$ 3,069,759$
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 rate 7.520%7.520%7.00%
Required employer contribution rate 9.650%9.650%9.650%
Required unfunded accrued liability - (1)- (1)7,337,577$
(1) -Combined with on or after January 1, 2013
Tiers within the Miscellaneous Plan
75
Page 409 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 76
Note 8: Pension Plans (Continued)
While the City's Miscellaneous Plan is not closed to new entrants, the component option of 2.7% @ 55 is closed to new entrants.
Classic Members as defined by CalPERS entering the City's Miscellaneous Plan would enter the 2% @ 60 option while New
Members as defined by CalPERS entering the City Miscellaneous Plan would enter the 2% @ 62 option.
Employees Covered. As of the measurement date June 30, 2022, 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 $16,384,823.
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, 2022, using an annual actuarial valuation as of 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, 2021 actuarial valuation was determined using the following
actuarial assumptions:
Miscellaneous Plan
Inactive employees or beneficiaries
currently receiving benefits 437
Inactive employees entitled to but
not yet receiving benefits 436
Active employees 324
Total 1,197
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Inflation
Salary Increase
Mortality (1)
Post Retirement Benefit Increase
(1) The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are
based on the 2021 CalPERS Experience Study for the period from 2001 to 2019. Pre-retirement and Post-
retirement mortality rates include generational mortality improvement using 80% of Scale MP-2020 published
by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study
The lesser of contract COLA or 2.30% until Purchasing Power
Protection Allowance Floor on Purchasing Power applies, 2.30%
Derived using CalPERS' Membership Data for all Funds
Varies by Entry Age and Service
2.30%
6.90%
Entry-Age Normal Cost Method
June 30, 2022
Miscellaneous Plan
June 30, 2021
76
Page 410 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 77
Note 8: Pension Plans (Continued)
Discount Rate. The discount rate used to measure the total pension liability for the Plan was 6.90%. The projection of cash flows
used to determine the discount rate for each Plan assumed that contributions from all plan members in the Public Employees
Retirement Fund (PERF) will be made at the current member contribution rates that contributions from employers will be made at
statutorily required rates, actuarially determined. Based on those assumptions, each Plan's fiduciary net position was projected to be
available to make all projected future benefit payments of current plan members for all plans in the PERF. Therefore, the long-term
expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension
liability for the Plan.
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 took into account long-term market return expectations as well as the
expected pension fund cash flows. Projected returns for all asset classes are estimated and, combined with risk estimates, are used
to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-
term projected portfolio return.
The table below reflects the long-term expected real rate of return by asset class.
Assumed
Asset
Asset Class Allocation Real Return (1) (2)
Global Equity - Cap-weighted 30.0% 4.54%
Global Equity - Non-Cap-weighted 12.0% 3.84%
Private Equity 13.0% 7.28%
Treasury 5.0% 0.27%
Mortgage-backed Securities 5.0% 0.50%
Investment Grade Corporates 10.0% 1.56%
High Yield 5.0% 2.27%
Emerging Market Debt 5.0% 2.48%
Private Debt 5.0% 3.57%
Real Assets 15.0% 3.21%
Leverage -5.0%
-0.59%
(1) An expected inflation of 2.30% used for this period
(2) Figures are based on the 2021-22 Asset Liability Management Study
Miscellaneous Plan
77
Page 411 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 78
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, 2021 243,823,734$ 177,830,076$ 65,993,658$
Changes during the year:
Service cost 4,364,490 - 4,364,490
Interest on the total pension liability 17,090,797 - 17,090,797
Changes in assumptions 8,123,651 - 8,123,651
Differences between expected and
actual experience 818,065 - 818,065
Contribution - employer - 16,384,823 (16,384,823)
Contribution - employee - 2,269,339 (2,269,339)
Net investment income - (13,547,758) 13,547,758
Benefit payments, including refunds
of employee contributions (14,509,974) (14,509,974) -
Administrative expense - (110,778) 110,778
Net changes 15,887,029 (9,514,348) 25,401,377
Balance at June 30, 2022 259,710,763$ 168,315,728$ 91,395,035$
Miscellaneous Plan
1% Decrease 5.90%
Net Pension Liability 124,485,873$
Current Discount Rate 6.90%
Net Pension Liability 91,395,035$
1% Increase 7.90%
Net Pension Liability 63,988,235$
78
Page 412 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 79
Note 8: Pension Plans (Continued)
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
For the year ended June 30, 2023, the City’s pension expense for the Miscellaneous Plan was $11,152,609. At June 30, 2023, 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 $11,050,124 will be recognized
as a reduction of the net pension liability in the year ended June 30, 2024. 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, 2023, the City reported a payable of $0 for the outstanding amount of contributions to the pension plan required for the
year ended June 30, 2023.
Cost-Sharing Employer Plan
General Information about the Pension Plan
Plan Descriptions. As noted above, the City contributes to CalPERS for a defined benefit pension plan for all qualified permanent
and probationary employees. CalPERS acts as a common investment and administrative agent for its participating member
employers. Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available
reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information
that can be found on the CalPERS website.
The City participates in five tiers of the safety cost-sharing multiple-employer plan. The Safety Plan tiers consist of Safety Tier 1
(police and fire), Police Tier 2, Fire Tier 2, Police PEPRA and Fire PEPRA.
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to
measurement date 11,050,124$ -$
Changes in assumptions 5,661,938 -
Differences between expected and
actual experiences 570,167 (268,051)
Net differences between projected and
actual earnings on plan investments 8,599,017 -
Total 25,881,246$ (268,051)$
Miscellaneous Plan
Measurement Period
Ended June 30 Amount
2023 3,879,551$
2024 3,982,645
2025 1,512,783
2026 5,188,092
14,563,071$
Miscellaneous Plan
79
Page 413 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 80
Note 8: Pension Plans (Continued)
Benefits Provided. CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits
to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year
of full-time employment. 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, 2023, are summarized as follows:
The Safety Tier 1 is closed to new entrants.
Contributions. Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates
for all public employers be determined on an annual basis by the actuary and shall be effective on July 1st following notice of a
change in the rate. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30th by CalPERS.
The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the
year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between
the actuarially determined rate and the contribution rate of employees. Members of the Police Officers Association contribute 3% of
pay toward the cost of the City's share of the annual required contribution. Members of the International Association of Firefighters,
Local 3523 contribute 3% of pay toward the cost of the City’s share of the annual required contribution.
For the year ended June 30, 2023, the contributions recognized as part of net pension liabilities were $12,756,585.
Police Fire Police Fire
Prior to Prior to On or after On or after
Hire date December 6, 2012 August 30, 2012 December 6, 2012 August 30, 2012
Benefit formula 3.0% @ 50 3.0% @ 50 2.0% @ 50 3.0% @ 55
Benefit vesting schedule 5 years service 5 years service 5 years service 5 years service
Benefit payments monthly for life monthly for life monthly for life monthly for life
Retirement age 50 - 55 50 - 55 50-55 50 - 55
Monthl y benefits, as a % of eligible compensation 3.00%3.00% 2.0% to 2.7% 2.4% to 3%
Required employee contribution rates 8.990%8.990%8.950%8.990%
Required employer contribution rates 25.640% 25.640%19.870% 22.480%
Required unfunded accrued liability payment 6,697,068$ -$ (1)16,915$ 35,296$
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
Monthl y 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 13.660% 13.660%
Required unfunded accrued liability payment 33,517$ 1,300$
(1) - Combined with Police Tier 1
Safety Tier 1 Safety Tier 2
80
Page 414 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 81
Note 8: Pension Plans (Continued)
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
As of June 30, 2023, the City reported a net pension liability for its proportionate share of the Plan’s net pension liability of
$82,856,965.
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, 2022, 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, 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, 2021 and 2022 was as follows:
For the year ended June 30, 2023, the City recognized pension income of $8,082,850 for the Safety Plan. At June 30, 2023, the City
reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Proportionate Share
Percentage share at 6/30/2021 1.08299%
Percentage share at 6/30/2022 0.71733%
Change - Increase/(Decrease) -0.36566%
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 10,016,823$ -$
Changes in assumptions 8,354,490 -
Differences between expected and actual experiences 3,429,149 899,761
13,084,273 -
Net Difference between employer's contributions and
proprtionate chare of contributions 1,972,418 459,077
Change in employer's proportion 8,284 7,651,600
Total 36,865,437$ 9,010,438$
Differences between projected and actual investment earnings
Safety Plan
81
Page 415 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 82
Note 8: Pension Plans (Continued)
Pension contributions subsequent to the measurement date of $10,016,823 are reported as deferred outflows of resources and will
be recognized as a reduction of the net pension liability in the year ended June 30, 2024. Other amounts reported as deferred outflows
of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Actuarial Assumptions. The total pension liabilities in the June 30, 2021 actuarial valuations for the Safety Plan was determined
using the following actuarial assumptions:
Discount Rate. The discount rate used to measure the total pension liability for the Plan was 6.90%. The projection of cash flows
used to determine the discount rate for the Plan assumed that contributions from all plan members in the Public Employees
Retirement Fund (PERF) will be made at the current member contribution rates that contributions from employers will be made at
statutorily required rates, actuarially determined. Based on those assumptions, each Plan's fiduciary net position was projected to be
available to make all projected future benefit payments of current plan members for all plans in the PERF. Therefore, the long-term
expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension
liability for each Plan.
The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-
estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are
developed for each major asset class.
Measurement Period
Ended June 30 Amount
2024 4,700,728$
2025 3,350,125
2026 1,805,748
2027 7,981,575
17,838,176$
Safet y Plan
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Inflation
Salary Increases
Post Retirement Benefit Increase
Mortality (1)
Safet y Plan
June 30, 2021
June 30, 2022
Entry-Age Normal Cost Method
Varies by Entry Age and Service
Contract COLA up to 2.30% 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 rates incorporate Generational
Mortality to capture ongoing mortality improvement using 80% of Scale MP 2020 published by the Society of
Actuaries. For more details on this table, please refer to the 2021 experience study report that can be found on the
CalPERS website
6.90%
2.30%
82
Page 416 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 83
Note 8: Pension Plans (Continued)
In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the
expected pension fund cash flows. Projected returns for all asset classes are estimated and, combined with risk estimates, are used
to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-
term projected portfolio return.
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:
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, 2023, the City reported a payable of $0 for the outstanding amount of contributions to the pension plan required for the
year ended June 30, 2023
Assumed
Asset
Asset Class Allocation Real Return (1) (2)
Global Equity - Cap-weighted 30.0% 4.54%
Global Equity - Non-Cap-weighted 12.0% 3.84%
Private Equity 13.0% 7.28%
Treasury 5.0% 0.27%
Mortgage-backed Securities 5.0% 0.50%
Investment Grade Corporates 10.0%1.56%
High Yield 5.0%2.27%
Emerging Market Debt 5.0%2.48%
Private Debt 5.0%3.57%
Real Assets 15.0%3.21%
Leverage -5.0%-0.59%
(1) An expected inflation of 2.30% used for this period
(2) Figures are based on the 2021-22 Asset Liability Management Study
Safety Plan
1% Decrease 5.90%
Net Pension Liability 115,218,920$
Current Discount Rate 6.90%
Net Pension Liability 82,856,965$
1% Increase 7.90%
Net Pension Liability 56,408,374$
83
Page 417 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 84
Note 8: Pension Plans (Continued)
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 $21,418 to the Plan and Participants contributed $151,939. There were no Plan
forfeitures. As of June 30, 2023, the City had $0 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 $27,488 to the Appointed Officials Plans. There were no Plan forfeitures. As of June 30,
2023, the City had $0 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.
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 $149 per month per retiree in calendar year 2022 and $151
per month per retiree in calendar year 2023. 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.
84
Page 418 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 85
Note 9: Other Post-Employment Benefits (OPEB) (Continued)
Employees Covered. At June 30, 2022, 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 $1,309,367.
Net OPEB Liability
The City’s net OPEB liability was measured as of June 30, 2022 and the total OPEB liability used to the calculate the net OPEB
liability was determined by an actuarial valuation dated June 30, 2021, based on the following actuarial methods and assumptions:
Discount Rate. The discount rate used to measure the total OPEB liability was 6.25%. The projection of cash flows used to determine
the discount rate assumed that City contributions will be made at rates equal to the actuarially determined contribution rates. Based
on those assumptions, the OPEB plan’s fiduciary net position was projected to be available to make all projected OPEB payments
for current active and inactive employees and beneficiaries. Therefore, the long-term expected rate of return on OPEB plan
investments was applied to all periods of projected benefit payments to determine the total OPEB liability.
OPEB Plan
Inactive employees or beneficiaries
currently receiving benefits 196
Inactive employees entitled to but
not yet receiving benefit payments 225
Active employees 451
Total 872
Actuarial Valuation Date June 30, 2021
Measurement Date June 30, 2022
Contribution Policy Contributes full ADC
Actuarial Assumptions:
Discount Rate and 6.25% at June 30, 2022 and 6.25% at June 30, 2021
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
PEMHCA Minimum Increases 4.00% annually
Participation at Retirement Currently covered: 70% Currently waived: 15%
OPEB Plan
85
Page 419 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 86
Note 9: Other Post-Employment Benefits (OPEB) (Continued)
Investments. The long-term expected rate of return on OPEB plan investments was determined using a building- block method in
which expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for
each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future
real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates
of geometric real rates of return for each major asset class are summarized below:
Changes in the Net OPEB Liability
The changes in the net OPEB liability for the June 30, 2022 measurement date are as follows:
Current Expected
Target Real Rate
Asset Class Allocation of Return
Global Equity 49%4.56%
Fixed Income 23%1.56%
TIPS 5%-0.08%
Commodities 3%1.22%
REITs 20%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.
OPEB Plan
Total Plan Fiduciary Net
OPEB Liability Net Position OPEB Liability
Balance at June 30, 2021 14,235,734$ 10,422,798$ 3,812,936$
Changes during the year:
Service cost 480,571 - 480,571
Interest on the total OPEB liability 898,021 - 898,021
Contribution - employer - 1,309,367 (1,309,367)
Net investment income - (1,395,486) 1,395,486
Benefit payments, including refunds
of employee contributions (695,937) (695,937) -
Administrative expense - (7,070) 7,070
Net changes 682,655 (789,126) 1,471,781
Balance at June 30, 2022 14,918,389$ 9,633,672$ 5,284,717$
86
Page 420 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 87
Note 9: Other Post-Employment Benefits (OPEB) (Continued)
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.
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, 2023, the City’s OPEB expense was $673,859. At June 30, 2023, the City reported deferred outflows of
resources and deferred inflows of resources related to OPEB from the following sources:
OPEB Plan
1% Decrease 5.25%
Net OPEB Liability 7,241,012$
Current Discount Rate 6.25%
Net OPEB Liability 5,284,717$
1% Increase 7.25%
Net OPEB Liability 3,665,333$
OPEB Plan
1% Decrease
Net OPEB Liability 3,355,291$
Current Trend
Net OPEB Liability 5,284,717$
1% Increase
Net OPEB Liability 7,676,302$
Deferred Outflows Deferred Inflows
of Resources of Resources
OPEB contributions subsequent to
measurement date 1,427,129$ -$
Changes in assumptions 398,990 128,996
Differences between expected and
actual experiences 267,565 1,068,418
Net differences between projected and
actual earnings on plan investments 738,371 -
Total 2,832,055$ 1,197,414$
87
Page 421 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 88
Note 9: Other Post-Employment Benefits (OPEB) (Continued)
OPEB contributions subsequent to the measurement date of $1,427,129 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, 2024. Other amounts reported as deferred outflows of
resources and deferred inflows of resources related to OPEB will be recognized as OPEB expense as follows:
Payable to the OPEB Plan
At June 30, 2023, the City reported a payable of $0 for the outstanding amount of contributions to the OPEB plan required for the
year ended June 30, 2023.
Note 10: Deferred Compensation Plan
All employees of the City are eligible to participate in a City sponsored deferred compensation plan (457 Plan). The 457 Plan
provides for the deferral of a portion of the employees’ compensation until retirement, termination, or certain other covered events.
The assets of the 457 Plan are held in trust for the exclusive benefit of Plan Participants or Beneficiaries.
Deferred contribution(s) by a participant in any taxable year will not exceed the lessor of (1) the applicable dollar amount provided
under Section 457(b)(2) of the Internal Revenue Code (adjusted for cost of living under Section 457(e)(15) of the Internal Revenue
Code), or (2) 100% of the participant’s includible compensation. A participant who has attained age 50 before the close of the
calendar year may elect Age 50 Plus Catch-up Contributions and commence making such contributions to his/her Participant Deferral
Account.
The City has the right at any time to terminate the 457 Plan by resolution of the City Council.
In the year 2022, The City evaluated the requirements of GASB Statement No. 97, Certain Component Unit Criteria, and Accounting
and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans and determined that plan didn’t meet
the criteria to be reported as a fiduciary activity, as required by the above mentioned GASB Statements.
Fiscal Year
Ended June 30 Amount
2024 (46,465)$
2025 (53,814)
2026 (97,824)
2027 233,661
2028 25,681
Thereafter 146,273
207,512$
88
Page 422 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 89
Note 11: Interfund Transactions
There is no interfund receivable and payable balances as of June 30, 2023.
Interfund transfers for the year ended June 30, 2023 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.
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.
Non-Major
General Capital Outlay Governmental
Transfer Out Fund Fund Funds Total
General Fund -$ 20,165,349$ 8,028,082$ 28,193,431$
Non-Major Governmental Fund 2,070,635 6,943,000 285,111 9,298,746
Water Fund 776,578 - - 776,578
Sewer Fund 1,076,388 - - 1,076,388
Parking Fund 390,646 - - 390,646
Total 4,314,247$ 27,108,349$ 8,313,193$ 39,735,789$
Transfer In
89
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 90
Note 12: Joint Ventures, Jointly Governed Organizations and Operating Agreements (Continued)
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, 2023:
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
2022-23 the City contributed approximately $1,068,248 of these funds to the Authority. The City's share of assets, liabilities, and
fund equity has not been calculated by the Authority and therefore is not known to the City; however, based on the City's limited
financial participation in the Authority, any such assets, liabilities, or equity are not believed to be significant to the basic financial
statements taken as a whole. Separate financial statements are available from the Authority, 179 Cross Street, Suite A, San Luis
Obispo, CA 93401.
City's Investment
Joint Venture in Joint Ventur e
Total assets 5,973,396$ 3,288,354$
Total liabilities 117,946 64,929
Fund balance 5,855,450$ 3,223,425$
Total revenues 2,376,184$ 1,308,089$
Total expenditures 1,664,117 916,096
Excess of revenues over expenditures 712,067$ 391,993$
90
Page 424 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 91
Note 12: Joint Ventures, Jointly Governed Organizations and Operating Agreements (Continued)
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.
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.
91
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 92
Note 12: Joint Ventures, Jointly Governed Organizations and Operating Agreements (Continued)
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 2022-23 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.
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 $500,000 per occurrence for liability and no retained limit for workers’ compensation.
Actual 2023 4,609,730$
Projected:
2024 4,619,370
2025 4,621,210
2026 4,622,040
2027 4,615,840
2028-32 23,100,320
2033-37 23,094,930
2038-41 13,945,680
Nacimiento Water Supply Obligations
92
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 93
Note 13: Risk Management (Continued)
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 2022-
23.
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.
93
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 94
Note 13: Risk Management (Continued)
The last actuarial study to determine the undiscounted outstanding claims liability was completed for the year ended June 30, 2023.
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, 2023 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 $4 million. It is not anticipated that the City’s annual payment to the JPA will
increase to satisfy this unfunded liability.
Self-insurance activity as of and for the year ended June 30, 2023
is summarized is as follows:
Interest earnings 10,125$
Claims expense (24,792)
Estimated liability for reported claims and settlement expenses (361,444)
Assets on deposit 618,162
Estimated unpaid claims asset 256,718$
Changes in the balances of claim assets during the past two fiscal years
are as follows:
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
Claim payments and related expenditures reimbursement (542,713)
Change in estimated claims asset June 30, 2023 28,884
Interest earnings 10,125
Withdrawal 200,000
Estimated unpaid claims asset June 30, 2023 256,718$
94
Page 428 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 95
Note 15: Construction and Other Significant Commitments
Construction and other significant commitments as of June 30, 2023, 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, 2023, the City had fund with negative fund balance for Downtown BID as below.
Note 17: Subsequent Events
On September 13, 2023, the San Luis Obispo Public Financing Authority issued $45,780,000 in Lease Revenue Bonds for the
construction of the Cultural Arts District Parking Structure and to refund the 2012 Lease Revenue Bonds. Debt service payments of
approximately $2.8 million per year are expected to be paid from revenues generated by the City’s Parking Fund through December
2053.
Note 18: New Accounting Standards
Accounting Standards Adopted
GASB Statement 91, Conduit Debt Obligations – The objective of this statement is to provide a single method of reporting
conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by issuers,
(2) arrangements associated with conduit debt obligations, and (3) related note disclosures. The requirements of this
statement did not apply to the City for the current fiscal year.
GASB Statement 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements – The
objective of this Statement is to improve financial reporting by addressing issues related to public-private and public-public
partnership arrangements (PPPs). As used in this Statement, a PPP is an arrangement in which a government (the transferor)
contracts with an operator (a governmental or nongovernmental entity) to provide public services by conveying control of
the right to operate or use a nonfinancial asset, such as infrastructure or other capital asset (the underlying PPP asset), for a
period of time in an exchange or exchange-like transaction. The requirements of this statement did not apply to the City for
the current fiscal year.
General Fund 2,420,086$
Special Revenue Funds 243,478
Capital Project Funds 17,843,611
Enterprise Funds:
Water 4,370,385
Sewer 26,458,269
Parking 1,594,568
Transit 1,570,189
Total 54,500,586$
Funds Deficiency
Downtown BID (2,424)$
Total (2,424)$
95
Page 429 of 668
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page 96
Note 18: New Accounting Standards (Continued)
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 City recognized intangible assets and SBITA liabilities as part of
implementation of this statement.
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 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 2023, prior period adjustments were made to correct the cash reported in Fiduciary Fund, which the City did not record in
the prior years.
Fiduciary Funds
Net Position as previously reported at June
30, 2022 9,093,468$
Prior Period Adjustments:
Cash 11,331,710
Net Position as restated at
June 30, 2022 20,425,178$
Fund Statements
96
Page 430 of 668
REQUIRED SUPPLEMENTARY INFORMATION
(UNAUDITED)
97
Page 431 of 668
98
Page 432 of 668
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund
For the Fiscal Year Ended June 30, 2023
Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
REVENUES:
Taxes and franchise fees:
Sales and use tax - general 21,789,000$ 21,524,304$ 21,865,468$ 341,164$
Transaction and use tax - Local Revenue Measure 27,049,000 30,141,532 30,508,731 367,199
Property tax 14,776,387 14,775,879 15,474,655 698,776
Transient occupancy tax 8,636,000 10,704,000 11,037,037 333,037
Utility users tax 5,544,000 5,544,000 6,904,194 1,360,194
Property tax in lieu of VLF 5,970,000 6,286,518 6,283,397 (3,121)
Franchise taxes 1,606,000 1,800,000 2,349,603 549,603
Business tax 2,989,000 3,257,566 3,281,010 23,444
Cannabis Tax 1,300,000 1,000,000 1,127,744 127,744
Real property transfer tax - 411,000 457,978 46,978
Total taxes 89,659,387 95,444,799 99,289,817 3,845,018
Fines, forfeitures and penalties 224,096 224,096 195,991 (28,105)
Use of money and property 230,000 (1,270,000) 1,568,512 2,838,512
Subventions and grants:
Other State and Federal grants 7,369,562 1,108,753 1,429,375 320,622
Other subventions and grants 497,000 497,000 544,521 47,521
Total subventions and grants 7,866,562 1,605,753 1,973,896 368,143
Charges for services:
Public safety:
Police 533,325 543,248 669,611 126,363
Fire:
Medical emergency recovery 578,622 578,622 568,559 (10,063)
Fire safety/hazardous materials permits 991,810 1,015,800 1,028,398 12,598
Other fire revenues 5,890 7,790 24,552 16,762
Community development:
Planning and zoning fees 1,080,763 1,080,763 1,719,050 638,287
Construction plan and check inspections 3,280,700 4,098,011 3,922,601 (175,410)
Infrastructure plan check and inspections - - 927,779 927,779
Culture and recreation:
Adult athletic fees 305,068 320,833 234,263 (86,570)
Youth athletic fees 854,063 854,063 906,231 52,168
Rental and use fees 369,195 369,195 304,489 (64,706)
Aquatics 309,452 312,072 313,083 1,011
Golf course 298,987 298,987 211,853 (87,134)
General government:
Other service charges 684,911 673,373 810,389 137,016
Total charges for services 9,292,786 10,152,757 11,640,858 1,488,101
Impact Fees - - 54,645 54,645
Other revenues 541,100 648,409 739,821 91,412
Total Revenues 107,813,931 106,805,814 115,463,540 8,657,726
(Continued)
99
Page 433 of 668
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2023
Page 2
Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
Expenditures:
Public Safety:
Police protection:
Administration 2,300,494 2,404,681 2,152,330 252,351
Investigations 3,057,864 3,637,267 2,885,594 751,673
Neighborhood services 302,866 302,896 282,511 20,385
Support services 3,596,650 3,303,660 3,123,544 180,116
Patrol services 11,914,934 11,301,433 11,984,965 (683,532)
Traffic safety 913,241 1,116,014 989,039 126,975
Total police protection 22,086,049 22,065,951 21,417,983 647,968
Fire and environmental safety:
Administration 1,292,344 1,264,293 1,157,037 107,256
Emergency response 11,826,681 12,159,800 12,350,737 (190,937)
Fire Apparatus Services 489,401 520,936 500,255 20,681
Hazard protection 1,035,824 976,615 938,914 37,701
Training 113,448 125,482 129,620 (4,138)
Disaster preparedness 183,663 204,575 195,404 9,171
Mobile Crisis Unit 320,416 322,786 160,605 162,181
Total fire and environmental safety 15,261,777 15,574,487 15,432,572 141,915
Total public safety 37,347,826 37,640,438 36,850,555 789,883
Transportation:
Transportation planning and engineering 1,078,014 1,211,650 1,187,300 24,350
Street and sidewalk maintenance 2,349,856 2,624,941 2,212,230 412,711
Traffic signals and street lights 596,347 547,101 556,238 (9,137)
Creek and flood protection 1,506,712 1,464,550 1,338,301 126,249
Total transportation 5,530,929 5,848,242 5,294,069 554,173
Culture and Recreation:
Recreation programs:
Recreation administration 916,789 846,728 844,713 2,015
Aquatics/Sinsheimer park facilities 604,482 648,595 620,772 27,823
Children's services 1,407,394 1,356,203 1,185,547 170,656
Facilities 355,640 358,787 326,162 32,625
Special events 10,500 12,400 5,101 7,299
Recreational sports 696,591 731,072 601,789 129,283
Golf course 806,210 773,893 724,556 49,337
Ranger services 898,724 888,880 786,460 102,420
Maintenance programs:
Swim center maintenance 673,110 625,128 672,335 (47,207)
Parks and landscape maintenance 4,126,239 3,864,211 3,571,500 292,711
Tree maintenance 368,367 549,687 339,617 210,070
Cultural and social service programs: Human relations
Human relations 595,807 1,130,110 988,356 141,754
Cultural activities 365,161 357,963 348,269 9,694
Total leisure, cultural and social services 11,825,014 12,143,657 11,015,177 1,128,480
(Continued)
100
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City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2023
Page 3
Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
Community Development:
Planning:
Commissions and communities 37,240 34,948 14,819 20,129
Community development administration 954,447 985,977 840,891 145,086
Long-range planning (566,560) (583,683) 930,742 (1,514,425)
Development review 1,955,946 2,051,640 1,716,724 334,916
Natural resource protection 1,024,109 1,055,890 983,010 72,880
Construction regulation:
Building and safety 3,085,372 3,564,509 2,968,584 595,925
CIP project engineering 2,887,864 2,971,436 2,683,532 287,904
Economic health:
Community promotion 411,735 415,217 421,838 (6,621)
Economic development 915,421 1,065,434 1,020,003 45,431
Housing 1,203,675 1,230,792 1,104,545 126,247
Total community development 11,909,249 12,792,160 12,684,688 107,472
General Government:
Legislation:
Council 244,185 235,961 234,567 1,394
General administration:
City administration 2,258,771 2,375,686 2,206,247 169,439
Public works administration 1,454,918 1,367,239 1,402,863 (35,624)
Legal services:
City attorney 1,425,044 1,455,220 1,424,496 30,724
City clerk services:
Administration and records 757,787 781,418 666,756 114,662
Organization support services:
Human resource administration 7,643,301 8,119,517 7,813,830 305,687
Finance and administration 2,384,654 1,926,366 5,904,816 (3,978,450)
Revenue management 550,775 448,414 385,980 62,434
Accounting 1,343,657 1,207,338 1,194,477 12,861
Finance non-departmental 1,100,883 984,334 283,739 700,595
Network services 3,504,524 3,849,553 3,512,394 337,159
Wellness program 53,358 19,247 3,201 16,046
Building and vehicle maintenance:
Buildings 1,534,669 1,465,380 1,430,582 34,798
Vehicle and equipment maintenance 1,453,372 1,645,649 1,421,074 224,575
Total general government before cost
reimbursement 25,709,898 25,881,322 27,885,022 (2,003,700)
Cost reimbursement (Note 3 to RSI)(4,461,578) (4,461,578) (4,461,578) -
Total general government 21,248,320 21,419,744 23,423,444 (2,003,700)
(Continued)
101
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City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2023
Page 4
Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
Capital Outlay:
Public safety 76,654 44,464 44,014 450
Transportation 236,598 389,489 327,201 62,288
Leisure, culture and social services 172,257 119,122 117,397 1,725
General government 470,738 161,323 509,843 (348,520)
Total capital outlay 956,247 714,398 998,455 (284,057)
Total Expenditures 88,817,585 90,558,639 90,266,388 292,251
Excess of Revenues Over Expenditures 18,996,346 16,247,175 25,197,152 8,949,977
Other Financing Sources (Uses)
Other Financing Sources – SBITA - - 474,594 474,594
Payment of debt - - - -
Transfers in 21,256,031 21,652,941 4,314,247 (17,338,694)
Transfers out (44,777,752) (40,973,315) (28,193,431) 12,779,884
Total other financing uses (23,521,721) (19,320,374) (23,404,590) (4,084,216)
Net Change in Fund Balance (4,525,375) (3,073,199) 1,792,562 4,865,761
Fund Balance, Beginning of the Year 40,745,506 40,745,506 40,745,506
Fund Balance, End of Year 36,220,131$ 37,672,307$ 42,538,068$
102
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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, 2023
Last 10 Years *
Fiscal Year 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15
Measurement Period 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14
Total pension liability:
Service Cost 4,364,490$ 3,939,785$ 3,681,240$ 4,042,717$ 4,328,129$ 4,124,832$ 3,580,882$ 3,578,172$ 3,703,087$
Interest on total pension liability 17,090,797 16,589,680 16,160,011 15,531,812 14,778,918 14,197,897 13,688,523 13,193,597 12,756,967
Difference between expected and actual
experience 818,065 (755,414) 1,869,474 2,966,923 1,445,049 694,843 (1,160,933) (2,433,791) -
Changes in assumptions 8,123,651 - - - (1,292,326) 11,219,603 - (3,057,724) -
Benefit payments, including refunds of
employee contributions (14,509,974) (13,518,666) (12,892,847) (12,061,701) (10,740,816) (10,161,053) (9,476,508) (8,808,668) (8,258,611)
Net change in total pension liability 15,887,029 6,255,385 8,817,878 10,479,751 8,518,954 20,076,122 6,631,964 2,471,586 8,201,443
Total pension liability - beginning 243,823,734 237,568,349 228,750,471 218,270,720 209,751,766 189,675,644 183,043,680 180,572,094 172,370,651
Total pension liability - ending (a) $ 259,710,763 $ 243,823,734 237,568,349$ 228,750,471$ 218,270,720$ 209,751,766$ 189,675,644$ 183,043,680$ 180,572,094$
Plan fiduciary net position:
Contributions - employer 16,384,823$ 8,246,755$ 7,709,918$ 9,361,882$ 6,693,987$ 6,776,849$ 6,122,173$ 5,027,356$ 4,631,254$
Contributions - employee 2,269,339 2,056,274 1,889,583 1,775,245 1,820,697 1,841,331 1,666,606 1,509,834 1,664,654
Net investment income (13,547,758) 32,904,570 7,205,266 9,124,520 10,820,033 13,053,453 677,557 2,673,657 17,746,607
Benefit payments (14,509,974) (13,518,666) (12,892,847) (12,061,701) (10,740,816) (10,161,053) (9,476,508) (8,808,668) (8,258,611)
Net plan to plan resource movement - - - - (316) (2,936) - - -
Administrative expense (110,778) (148,132) (203,824) (97,394) (200,184) (172,935) (72,044) (133,042) -
Other miscellaneous income/(expense)- - - 316 (380,153) - - - -
Net change in plan fiduciary net position (9,514,348) 29,540,801 3,708,096 8,102,868 8,013,248 11,334,709 (1,082,216) 269,137 15,783,904
Plan fiduciary net position - beginning 177,830,076 148,289,275 144,581,179 136,478,311 128,465,063 117,130,354 118,212,570 117,943,433 102,159,529
Plan fiduciary net position - ending (b)168,315,728$ 177,830,076$ 148,289,275$ 144,581,179$ 136,478,311$ 128,465,063$ 117,130,354$ 118,212,570$ 117,943,433$
Net pension liability (asset) - ending (a) - (b)91,395,035$ 65,993,658$ 89,279,074$ 84,169,292$ 81,792,409$ 81,286,703$ 72,545,290$ 64,831,110$ 62,628,661$
Plan fiduciary net position as a percentage of the total pension
liability 64.81% 72.93% 62.42% 63.20% 62.53% 61.25% 61.75% 64.58% 65.32%
Covered payroll 24,574,829 23,805,348 21,795,380 22,951,725 23,736,588 21,841,841 20,499,668 19,769,997 19,235,818
Net pension liability as percentage of covered
payroll 371.91% 277.22% 409.62% 366.72% 344.58% 372.16% 353.89% 327.93% 325.58%
* Fiscal year 2015 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, 2022.
Benefit changes . The figures above include any liability impact that may have resulted from voluntary benefit changes that occurred on or before the Measurement Date. 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 . Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return,
CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project comp
ound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were
changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial 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
bd h di
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Page 437 of 668
City of San Luis Obispo, California
Schedule of the Pension Plan Contributions
Miscellaneous Agent Multiple-Employer Plan
June 30, 2023
Last 10 Years *
Fiscal Year 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14
Actuarially determined
contribution 9,572,913$ 8,851,802$ 8,246,755$ 7,709,918$ 7,093,882$ 6,693,987$ 6,776,849$ 6,122,173$ 5,027,356$ 4,631,254$
Contributions in relation to
the actuarially determined
contribution (11,050,124) (16,384,823) (8,246,755) (7,709,918) (9,361,882) (6,693,987) (6,776,849) (6,122,173) (5,027,356) (4,631,254)
Contribution deficiency
(excess)(1,477,211)$ (7,533,021)$ -$ -$ (2,268,000)$ -$ -$ -$ -$ -$
Covered payroll 29,794,206$ 24,574,829$ 23,805,348$ 21,795,380$ 22,951,725$ 23,736,588$ 21,841,841$ 20,499,668$ 19,769,997$ 19,235,818$
Contributions as percentage
of covered payroll 37.09% 66.67% 34.64% 35.37% 40.79% 28.20% 31.03% 30.97% 25.43% 24.08%
Actuarial Cost Method
Amortization Method
Amortization Period
Asset Valuation Method
Inflation
Salary Increases
Payroll Growth
Discount Rate
Retirement Age
Mortality 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.
* Fiscal year 2014 was the first year of implementation. Therefore, only ten 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, 2022.
The actuarial methods and assumptions used to set the actuarially determined contributions for fiscal year 2022-23 contributions rates are as follows:
Entry Age Normal
For details, see June 30, 2021 CalPERS Funding Valuation Report
For details, see June 30, 2021 CalPERS Funding Valuation Report
2.50%
Varies by Entry Age and Service
2.750%
7.00% Net of Pension Plan Investment and Administrative Expenses
The probabilities of Retirement are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015.
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Page 438 of 668
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, 2023
Last 10 Years *
Fiscal Year 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15
Measurement Period 2021-2022 2020-2021 2019-2020 2018-2019 2017-18 2016-17 2015-16 2014-15 2013-14
Proportion of the Collective Net Pension
Liability 0.71733% 1.08299% 0.7225% 0.7212% 1.2261% 1.1943% 1.2510% 1.3654% 1.3754%
Proportionate Share of the Collective Net
Pension Liability 82,856,965$ 58,571,330$ 78,611,581$ 73,897,967$ 71,940,534$ 71,364,346$ 64,792,760$ 56,260,280$ 51,592,420$
Covered payroll 12,207,346$ 10,744,808$ 9,488,971$ 11,197,562$ 11,246,306$ 10,614,437$ 10,643,123$ 10,849,863$ 10,768,119$
Proportionate share of the net pension
liability as percentage of covered payroll 678.75% 545.11% 828.45% 659.95% 639.68% 672.33% 608.78% 518.53% 479.12%
Plan fiduciary net position as a percentage
of the total pension liability 76.68% 88.29% 75.26% 75.26% 75.26% 73.31% 74.06% 78.40% 79.82%
The CalPERS mortality assumptions were adjusted in fiscal year 2019.
*-Fiscal year 2015 was the first year of implementation, therefore only nine 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, and then decreased from 7.15% to 6.9% in fiscal
year 2023.
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Page 439 of 668
City of San Luis Obispo, California
Schedule of the City's Pension Contributions
Safety Cost-Sharing Plan
As of June 30, 2023
Last 10 Years *
Fiscal Year 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14
Contractually required
contribution (actuarially
determined)10,016,823$ 12,756,585$ 7,631,620$ 7,167,638$ 6,416,780$ 5,910,345$ 5,549,915$ 5,074,217$ 4,350,871$ 4,226,211$
Contribution in relation to
the actuarially determined
contributions (10,016,823) (12,756,585) (7,631,620) (7,167,638) (8,348,780) (5,910,345) (6,299,915) (5,824,217) (4,650,871) (5,161,211)
Contribution deficiency
(excess)-$ -$ -$ -$ (1,932,000)$ -$ (750,000)$ (750,000)$ (300,000)$ (935,000)$
Covered payroll 11,235,984$ 12,207,346$ 10,744,808$ 9,488,971$ 11,197,562$ 11,246,306$ 10,614,437$ 10,643,123$ 10,849,863$ 10,768,119$
Contributions as a
percentage of covered
payroll 89.15% 104.50% 71.03% 75.54% 74.56% 52.55% 59.35% 54.72% 42.87% 47.93%
*- Fiscal year 2015 was the first year of implementation, therefore only nine years are shown
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.
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Page 440 of 668
Fiscal Year 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18
Measurement Period 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17
Total OPEB liability:
Service Cost 480,571$ 423,364$ 415,244$ 477,538$ 463,629$ 450,125$
Interest on total OPEB liability 898,021 867,422 841,590 935,528 891,794 856,436
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 (695,937) (678,789) (678,882) (677,824) (765,000) (827,500)
Net change in total OPEB liability 682,655 1,469,005 374,536 (1,328,863) 590,423 479,061
Total OPEB liability - beginning 14,235,734 12,766,729 12,392,193 13,721,056 13,130,633 12,651,572
Total OPEB liability - ending (a)14,918,389$ 14,235,734$ 12,766,729$ 12,392,193$ 13,721,056$ 13,130,633$
Plan fiduciary net position:
Contributions - employer 1,309,367$ 921,000$ 1,656,882$ 677,824$ 1,221,000$ 1,493,996$
Net investment income (1,395,486) 2,196,724 259,704 392,852 439,828 469,883
Benefit payments (695,937) (678,789) (678,882) (677,824) (765,000) (827,500)
Administrative expense (7,070) (7,235) (3,472) (1,364) (10,170) (2,387)
Net change in plan fiduciary net position (789,126) 2,431,700 1,234,232 391,488 885,658 1,133,992
Plan fiduciary net position - beginning 10,422,798 7,991,098 6,756,866 6,365,378 5,479,720 4,345,728
Plan fiduciary net position - ending (b)9,633,672$ 10,422,798$ 7,991,098$ 6,756,866$ 6,365,378$ 5,479,720$
Plan net OPEB liability - ending (a) - (b)5,284,717$ 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 64.58% 73.22% 62.59% 54.53% 46.39% 41.73%
Covered-employee payroll 38,691,777$ 40,691,438$ 33,077,056$ 33,429,600$ 33,790,437$ 33,722,592$
Plan net OPEB liability as percentage of
covered payroll 13.66% 9.37% 14.44% 16.86% 21.77% 22.69%
Changes in assumptions. No changes in June 30, 2022 measurement date. 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, 2022
measurement date.
Prepared for the City of San Luis Obispo OPEB Plan
an Agent Multiple-Employer Defined Benefit OPEB Plan
As of June 30, 2023
Last 10 Years *
Schedule of Changes in the Net OPEB Liability and Related Ratios
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Fiscal Year 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18
Actuarially determined
contribution 1,055,000$ 1,309,367$ 921,000$ 1,190,000$ 1,154,000$ 1,221,000$
Contributions in
relation to the
actuarially determined
contributions (1,427,129)$ (1,309,367)$ (921,000) (1,656,882) (677,824) (1,221,000)
Contribution
deficiency (excess)(372,129)$ -$ -$ (466,882)$ 476,176$ -$
Covered-employee
payroll 37,590,668$ 38,691,777$ 40,691,438$ 33,077,056$ 33,429,600$ 33,790,437$
percentage of covered
payroll 2.81% 3.38% 2.26% 3.60% 3.45% 3.61%
Contributions paid as of June 30, 2023 are deferred to June 30, 2024.
Valuation date
Actuarial Cost Method
Amortization Method
Amortization Period
Asset Valuation Method
Discount Rate
General Inflation
Medical Trend
Mortality
Mortality Improvement
6.25%
2.50%
Non-Medicare - 6.50% for 2023, decreasing to an ultimate rate of 3.75% in 2076
Medicare - 5.65% for 2023, decreasing to an ultimate rate of 3.75% in 2076
CalPERS 2000-2019 experience study
Post-retirement mortality projected fully generational with Scale MP-2021
June 30, 2021
Entry Age Normal, Level % of pay
Level % of pay
11.4-year average period for FY2022/23
Investment gains and losses spread over 5-year rolling period
The actuarial methods and assumptions used to set the actuarially determined contributions for fiscal year 2022-23 are as
follows:
* Fiscal year 2018 was the first year of implementation. Information is required only for measurement periods for which
GASB 75 is applicable.
Prepared for the City of San Luis Obispo Miscellaneous Plan
an Agent Multiple-Employer Defined Benefit OPEB Plan
As of June 30, 2023
Last 10 Years *
Schedule of Employer OPEB Contributions
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City of San Luis Obispo, California
Notes to Required Supplementary Information
June 30, 2023
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, 2023 expenditures exceeded appropriations in the General Fund as noted below.
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110
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OTHER SUPPLEMENTARY INFORMATION
AND COMBINING AND INDIVIDUAL FUND
STATEMENTS AND SCHEDULES
111
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112
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Revenues Actual
Local Transaction and Use Tax 30,508,731$
Investment Income 7,899
30,516,630$
Expenditure Allocations by Priority
Address Homelessness 764,069$
Community Safety and Emergency Preparedness 4,608,385
Creek and Flood Protection 1,292,816
Economic Development and Business Retention 874,875
Open Space/Natural Areas Preservation and Maintenance 1,439,019
Other Services and Projects 2,528,429
Protect Financial Stability 404,558
Safe and Clean Public Areas 3,362,300
Street Maintenance and Transportation (incl bike and ped improvements) 9,405,702
Youth/Senior Services and Recreation Facilities 2,096,992
Allocation to Capital Reserve 3,604,500
30,381,645$
Expenditures on Legacy Projects (projects funded before 2022-23)
Legacy Projects 523,861$
Net Change in Fund Balance (388,876)$
Fund Balance Beginning of Year 5,696,864
Fund Balance End of Year 5,307,988$
Encumbered for Legacy Projects (1,435,051)
Available Fund Balance 3,872,937$
City of San Luis Obispo
Local Transaction Tax Measure Funding Schedule
For the Fiscal Year Ended June 30, 2023
113
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Revenues Budget Actual
Local Transaction and Use Tax 30,141,532$ 30,508,731$
Investment Income 7,899
30,141,532$ 30,516,630$
Expenditures
Transfer Out for Operating Programs:
Address Homelessness 764,069$ 764,069$
Community Safety and Emergency Preparedness 2,102,685 2,102,685
Creek and Flood Protection 742,816 742,816
Economic Development and Business Retention 757,375 757,375
Open Space/Natural Areas Preservation and Maint. 709,019 709,019
Other Services and Projects 1,165,820 1,165,820
Protect Financial Stability 404,558 404,558
Safe and Clean Public Areas 652,300 652,300
Street Maintenance and Transportation 1,084,129 1,084,129
Youth/Senior Services and Recreation Facilities 395,492 395,492
8,778,263$ 8,778,263$
Transfer Out for 2022-23 Capital Projects
Community Safety and Emergency Preparedness 2,505,700$ 2,505,700$
Creek and Flood Protection 550,000 550,000
Economic Development and Business Retention 117,500 117,500
Open Space/Natural Areas Preservation and Maintenance 730,000 730,000
Other Services and Projects 1,362,609 1,362,609
Safe and Clean Public Areas 2,710,000 2,710,000
Street Maintenance and Transportation (incl bike and ped improvements) 8,321,573 8,321,573
Youth/Senior Services and Recreation Facilities 1,701,500 1,701,500
Allocation to Capital Reserve 3,604,500 3,604,500
21,603,382$ 21,603,382$
Expenditures on Legacy Projects (projects funded before 2022-23)
Legacy Projects 1,958,912$ 523,861$
Net Change in Fund Balance (388,876)$
Fund Balance Beginning of Year 5,696,864$
Fund Balance End of Year 5,307,988$
Encumbered for Legacy Projects (1,435,051)$
Available Fund Balance 3,872,937$
City of San Luis Obispo
Local Transaction Tax Measure Funding Schedule
For the Fiscal Year Ended June 30, 2023
114
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Page 2
Capital Programs:Budget Actual Encumbrances Carryover
Community Safety and Emergency Preparedness
Fire - Fleet Replacement 1,530,966$ 1,095,283$ -$ 435,683$
Fire Hydrant Replacement 40,024 37,462 -2,562
Fire Station #3 & #4 Remodel Space Study and Design 100,000 --100,000
Initial Design Study - Police Station Replacement 411,315 230,802 97,052 83,461
Police - Information Technology 1,259,615 166,064 65,098 1,028,452
Police - Fleet Replacement 320,789 29,847 290,942 -
IT Replacements 563,074 492,005 -71,069
4,225,783$ 2,051,464$ 453,093$ 1,721,226$
Creek and Flood Protection
Storm Drainage Infrastructure Replacement 279,100$ 212,448$ 68,133$ 66,652$
Creek Bank Stabilization Near Pismo and Johnson 436,112 263,083 30,420 173,029
715,212$ 475,532$ 98,553$ 239,681$
Economic Development and Business Retention
Additional Banner Arms, Bench Arm Rests, Signs 113,728$ 18,598$ 9,606$ 85,524$
Annual Public Art Maintenance and Projects 69,700 59,779 -9,921
Open SLO 125,569 9,437 -116,132
Downtown Zig-Zag Lighting 250,000 --250,000
Downtown Renewal 255 --255
Mission Plaza Maintenance Improvements 194,271 175,600 8,001 10,670
Public Art Installation 338,900 21,196 -317,704
1,092,423$ 284,610$ 17,606$ 790,206$
Open Space/Natural Areas Preservation and Maintenance
Open Space Acquisition 532,290$ 53,962$ 5,452$ 472,876$
Open Space Maintenance 207,163 70,155 4,177 132,831
Urban Forest Maintenance 504,831 454,750 2,003 48,077
Laguna Lake Dredging 63,699 4,388 8,146 51,165
1,307,983$ 583,256$ 19,779$ 704,949$
Other Services and Projects
Capital Projects Engineering Staff (6 FTE)133,612$ -$ -$ 133,612$
Council Hearing Room Functionality Improvements 420,000 346,024 - 73,976
Electric Vehicle Charging Stations 46,686 12,465 30,053 4,167
Major Facility Replacement 1,663,084 601,074 18,813 1,043,197
Roundabout Public Art Installations 90,827 90,827 --
KVEC Tower 254,078 53,610 28,718 171,750
2020 Neighborhood Greenways Public Art 2,250 2,250 --
Fleet Replacement - Citywide 260,001 -- 260,001
Fleet Replacement - Public Works 797,647 70,267 7,936 719,444
Corp Yard Fuel Island Siding 201 55 -146
3,668,386$ 1,176,574$ 85,520$ 2,406,292$
City of San Luis Obispo
Local Transaction Tax Measure Funding Schedule, continued
Local Revenue Measure Funded Projects
Includes Legacy Projects and projects funded by Capital Reserve
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Page 3
Safe and Clean Public Areas
Bob Jones Trail and Railroad Safety Trail Solar Lightning 1,450,000$ 59$ -$ 1,449,941$
Curb Ramps and Sidewalks Replacements 347,567 50,005 36,947 260,615
Mission Plaza Concept Plan Implementation 1,459,081 282,820 157,564 1,018,696
Street and Pathway Lighting 62,652 6,227 -56,425
Pedestrian Crossing Improvements 536,817 469,055 32,916 34,847
Railroad Safety Trail Taft to Pepper 27,150 --27,150
Downtown Cleaning Equipment 7,169 7,169 --
Pedestrian Crosswalk Beacon on Ramona 28,255 1,745 13,255 13,255
Downtown Safety Enhancements 1,823 --1,823
Area 6 & 7 Curb Ramps 264,641 262,031 2,610 -
4,185,154$ 1,079,111$ 243,291$ 2,862,752$
Street Maintenance and Transportation
Active Transportation Plan Implementation 879,406$ 387,526$ 439,990$ 51,890$
Madonna Inn Frontage Bike Pathway 5,775 --5,775
Neighborhood Traffic Improvements 261,520 41,637 8,174 211,709
Prado Road Bridge & Road Widening 548,093 402,130 -145,963
Prado Road Interchange 2,431,833 65,417 21,833 2,344,583
Traffic Signs & Striping Maintenance 57,136 31,804 -25,332
Transportation Safety & Operations 3,431 --3,431
North Chorro Neighborhood Greenway - Phase 2 9,562,019 1,195,092 4,659,539 3,707,388
Development Agreements 1,665,000 320,745 1,224,255 120,000
Orcutt/Tank Farm Roundabout Construction 374,124 302,977 25,376 45,770
Monterey at Santa Rosa Paving and Signal Project 1,271,756 813,278 181,956 276,522
Roadway Sealing 2022 4,148,160 3,871,762 25,798 250,600
2022 Street Reconstruction and Resurfacing 1,381,734 545,784 547,044 288,906
Marsh and Santa Rosa Bridge Replacement 107,072 96,098 61 10,912
Mid-Higuera Bypass 219,733 23,398 121,280 75,056
Traffic Safety Implementation 8,000 8,000 --
Sewer Replacement Chorro & Murray 80,000 - 60,000 20,000
South Street Median Landscaping 18,540 8,768 4,460 5,312
2023 Streets Reconstruction & Resurfacing - Arterials 500,194 - 430,194 70,000
California Taft Roundabout 297,409 145,515 4,255 147,639
23,820,936$ 8,259,932$ 7,754,217$ 7,806,788$
Youth/Senior Services and Recreation Facilities
Laguna Lake Golf Course Maintenance 31,570$ -$ -$ 31,570$
Playground Equipment Replacement 255,752 3,652 208,607 43,493
Orcutt Area - Linear Park Planning and Construction 815,000 34,303 7,802 772,895
Parking Lot Maintenance 233,770 1,820 -231,950
Parks and Recreation - Fleet Replacement 242,000 144,433 9,067 88,500
Parks and Recreation Master Plan Implementation 400,000 76,878 -323,122
Golf Course Pro Shop Flood Damage Repairs 93,222 43,041 -50,181
Parks Major Maintenance 1,626,183 411,712 107,825 1,106,647
North Broad Street Neighborhood Park 216,070 15,396 41,070 159,604
3,913,567$ 731,234$ 374,371$ 2,807,961$
Total Capital Expenditures 42,929,446$ 14,641,713$ 9,046,430$ 19,339,855$
City of San Luis Obispo
Local Transaction Tax Measure Funding Schedule, continued
Local Revenue Measure Funded Projects
Includes Legacy Projects and projects funded by Capital Reserve
116
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City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2023
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.
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City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2023
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 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.
Avila Ranch Fund.This fund has been established to account for the ongoing funding received as a special property
tax assessment and the associated infrastructure and service improvements of the Avila Ranch Community Facilities
District.
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.
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City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2023
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 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.
119
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City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2023
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.
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.
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 $11,072,775 of 2018 Lease
Revenue Refunding Bonds. These bonds were issued to refinance the outstanding 2005 Revenue Bonds, 2006 Lease
Revenue Bonds, and 2009 Lease Revenue Bonds. The original bonds were used to accomplish several high priority
capital improvement projects including the headquarters fire station, seismic safety and HVAC improvements to
City Hall, Mission Plaza expansion, and various properties and street lighting system purchases. Further, the bonds
were used to purchase a parking structure and office building and to the finance the construction of the Public Safety
Communications and Emergency Operations Center project.
The Authority has entered into a lease agreement with the City under which the City is responsible for making lease
payments to fund the annual debt service requirements.
2020 Motorola Radio Lease . Lease-purchase financing was obtained in order to purchase new Motorola radios and
related equipment for public safety departments. Debt service obligations are recorded in the Debt Service Fund.
120
Page 454 of 668
121
Page 455 of 668
City of San Luis Obispo, California
Combining Balance Sheets
Nonmajor Governmental Funds
June 30, 2023
Special Revenue Funds
Downtown BID
Transportation
Development
Act (TDA) Tourism BID Gas Tax
Assets
Cash and investment 46,467$ 8,681$ 1,338,076$ -$
Accounts receivable - - 249,263 -
Tax receivable - - - -
Accrued interest receivable - - 4,226 -
Cash held by fiscal agent - - - -
Loans receivable - - - -
Total assets 46,467$ 8,681$ 1,591,565$ -$
Liabilities, Deferred Inflows of
Resources and Fund Balance
Liabilities:
Accounts payable -$ -$ 158,660$ -$
Accrued liabilities - - 6,280 -
Unearned revenue 48,891 - - -
Total liabilities 48,891 - 164,940 -
Deferred Inflows of Resources:
Unavailable revenue - - - -
Fund balance:
Nonspendable - - - -
Restricted for:
Debt service - - - -
Public safety program - - - -
Transportation projects - 8,681 - -
Affordable housing programs - - - -
Impact fee programs - - - -
Parkland development programs - - - -
Public art programs - - - -
Tourism programs - - 1,426,625 -
Infrastructure improvement - - - -
Committed to:
Public safety program - - - -
Assigned to:
Contingency fund - - - -
Subsequent years expenditures - - - -
Total fund balance (2,424) 8,681 1,426,625 -
Total liabilities, deferred inflows of
resources, and fund balance 46,467$ 8,681$ 1,591,565$ -$
(Continued)
122
Page 456 of 668
City of San Luis Obispo, California
Combining Balance Sheets
Nonmajor Governmental Funds
June 30, 2023
Special Revenue Funds
Community
Development
Block Grant
(CDBG)
Law
Enforcement
Grants
Public Art
Contributions
Avila Ranch
CFD
Assets
Cash and investment 108,574$ 51,554$ 1,272,486$ 157,311$
Accounts receivable 34,595 21,393 - -
Tax receivable - - - -
Accrued interest receivable 704,909 143 4,137 494
Cash held by fiscal agent - - - -
Loans receivable 1,112,944 - - -
Total assets 1,961,022$ 73,090$ 1,276,623$ 157,805$
Liabilities, Deferred Inflows of
Resources and Fund Balance
Liabilities:
Accounts payable -$ 4,248$ 6,779$ -$
Accrued liabilities - - - -
Unearned revenue - 386 - -
Total liabilities - 4,634 6,779 -
Deferred Inflows of Resources:
Unavailable revenue 1,817,852 - - -
Fund balance:
Nonspendable - - - -
Restricted for:
Debt service - - - -
Public safety program - 68,456 - -
Transportation projects - -- -
Affordable housing programs 143,170 - - -
Impact fee programs - - - -
Parkland development programs - - - -
Public art programs - - 1,269,844 -
Tourism programs - - - -
Infrastructure improvement - - - 157,805
Committed to:
Public safety program - - - -
Assigned to:
Contingency fund - - - -
Subsequent years expenditures - - - -
Total fund balance 143,170 68,456 1,269,844 157,805
Total liabilities, deferred inflows of
resources, and fund balance 1,961,022$ 73,090$ 1,276,623$ 157,805$
(Continued)
123
Page 457 of 668
City of San Luis Obispo, California
Combining Balance Sheets
Nonmajor Governmental Funds
June 30, 2023
Capital Project
Funds
SB1 Road
Repair
SB1186 CASP
Certify
Affordable
Housing BEGIN
Loan Fund
Parkland
In-Lieu Fee
Assets
Cash and investment 220,721$ 141,512$ 184,018$ 3,196,679$
Accounts receivable - - - -
Tax receivable 186,356 - - -
Accrued interest receivable 666 460 107,397 20,652
Cash held by fiscal agent - - - -
Loans receivable - - 420,335 143,044
Total assets 407,743$ 141,972$ 711,750$ 3,360,375$
Liabilities, Deferred Inflows of
Resources and Fund Balance
Liabilities:
Accounts payable 91,675$ -$ -$ 1,890$
Accrued liabilities - - - -
Unearned revenue - - - -
Total liabilities 91,675 - - 1,890
Deferred Inflows of Resources:
Unavailable revenue - - 106,801 153,369
Fund balance:
Nonspendable - - - -
Restricted for:
Debt service - - - -
Public safety program - - - -
Transportation projects 316,068 141,972 - -
Affordable housing programs - - 604,949 -
Impact fee programs - - - -
Parkland development programs - - - 3,205,116
Public art programs - - - -
Tourism programs - - - -
Infrastructure improvement
Committed to:
Public safety program - - - -
Assigned to:
Contingency fund - - - -
Subsequent years expenditures - - - -
Total fund balance 316,068 141,972 604,949 3,205,116
Total liabilities, deferred inflows of
resources, and fund balance 407,743$ 141,972$ 711,750$ 3,360,375$
(Continued)
Special Revenue Funds
124
Page 458 of 668
City of San Luis Obispo, California
Combining Balance Sheets
Nonmajor Governmental Funds
June 30, 2023
Capital Projects Funds
Open Space
Protection
Airport Area
Impact Fee
LOVR Sub-Area
Fee
Fleet
Replacement
Assets
Cash and investment 13,055$ 662,088$ 415,321$ 3,113,508$
Accounts receivable - - - -
Tax receivable - - - -
Accrued interest receivable 42 2,147 1,399 -
Cash held by fiscal agent - - - -
Loans receivable - - - -
Total assets 13,097$ 664,235$ 416,720$ 3,113,508$
Liabilities, Deferred Inflows of
Resources and Fund Balance
Liabilities:
Accounts payable -$ -$ -$ 74,601$
Accrued liabilities - - - -
Unearned revenue - - - -
Total liabilities - - - 74,601
Deferred Inflows of Resources:
Unavailable revenue - - - -
Fund balance:
Nonspendable - - - -
Restricted for:
Debt service - - - -
Public safety program - - - -
Transportation projects - - - -
Affordable housing programs - - - -
Impact fee programs - 664,235 416,720 -
Parkland development programs - - - -
Public art programs - - - -
Tourism programs - - - -
Infrastructure improvement - - - -
Committed to:
Public safety program - - - -
Assigned to:
Contingency fund - - - 500,000
Subsequent years expenditures 13,097 - - 2,538,907
Total fund balance 13,097 664,235 416,720 3,038,907
Total liabilities, deferred inflows of
resources, and fund balance 13,097$ 664,235$ 416,720$ 3,113,508$
(Continued)
125
Page 459 of 668
City of San Luis Obispo, California
Combining Balance Sheets
Nonmajor Governmental Funds
June 30, 2023
Capital Projects Funds
Info Tech
Replacement
Affordable
Housing
Transportation
Impact Fee Infrastructure
Assets
Cash and investment 3,352,935$ 3,036,546$ 7,217,117$ 9,630,088$
Accounts receivable - - - -
Tax receivable - - - -
Accrued interest receivable - 1,944,829 151,399 -
Cash held by fiscal agent - - - -
Loans receivable - 8,560,688 1,164,368 -
Total assets 3,352,935$ 13,542,063$ 8,532,884$ 9,630,088$
Liabilities, Deferred Inflows of
Resources and Fund Balance
Liabilities:
Accounts payable 56,493$ -$ 140,415$ -$
Accrued liabilities - - - -
Unearned revenue 600,000 1,264,467 - 9,200,000
Total liabilities 656,493 1,264,467 140,415 9,200,000
Deferred Inflows of Resources:
Unavailable revenue - 2,002,066 1,292,189 -
Fund balance:
Nonspendable - - - -
Restricted for:
Debt service - - - -
Public safety program - - - -
Transportation projects - - 7,100,280 -
Affordable housing programs - 10,275,530 - -
Impact fee programs - - - -
Parkland development programs - - - -
Public art programs - - - -
Tourism programs - - - -
Infrastructure improvement - - - -
Committed to:
Public safety program - - - -
Assigned to:
Contingency fund 400,000 - - -
Subsequent years expenditures 2,296,442 - - 430,088
Total fund balance 2,696,442 10,275,530 7,100,280 430,088
Total liabilities, deferred inflows of
resources, and fund balance 3,352,935$ 13,542,063$ 8,532,884$ 9,630,088$
(Continued)
126
Page 460 of 668
City of San Luis Obispo, California
Combining Balance Sheets
Nonmajor Governmental Funds
June 30, 2023
Capital Projects Funds
Parkland
Development
Impact Fee-
Citywide OASP Park MASP Park
OASP
Transportation
Impact Fee
Assets
Cash and investment 851,649$ 2,360,686$ 1,683,185$ 1,404,131$
Accounts receivable - - - -
Tax receivable - - - -
Accrued interest receivable 73,745 7,653 5,449 4,546
Cash held by fiscal agent - - - -
Loans receivable 446,826 - - -
Total assets 1,372,220$ 2,368,339$ 1,688,634$ 1,408,677$
Liabilities, Deferred Inflows of
Resources and Fund Balance
Liabilities:
Accounts payable -$ 44,483$ -$ -$
Accrued liabilities - - - -
Unearned revenue - - - -
Total liabilities - 44,483 - -
Deferred Inflows of Resources:
Unavailable revenue 517,861 - - -
Fund balance:
Nonspendable - - - -
Restricted for:
Debt service - - - -
Public safety program - - - -
Transportation projects - - - -
Affordable housing programs - - - -
Impact fee programs 854,359 2,323,856 1,688,634 1,408,677
Parkland development programs - - - -
Public art programs - - - -
Tourism programs - - - -
Infrastructure improvement - - - -
Committed to:
Public safety program - - - -
Assigned to:
Contingency fund - - - -
Subsequent years expenditures - - - -
Total fund balance 854,359 2,323,856 1,688,634 1,408,677
Total liabilities, deferred inflows of
resources, and fund balance 1,372,220$ 2,368,339$ 1,688,634$ 1,408,677$
(Continued)
127
Page 461 of 668
City of San Luis Obispo, California
Combining Balance Sheets
Nonmajor Governmental Funds
June 30, 2023
Capital Projects Funds
Fire Impact Fee
Police Impact
Fee
Park
Improvement
Impact Fee-
Citywide
SLR
Transportation
Impact Fee
Assets
Cash and investment 213,908$ 236,214$ 1,417,369$ 1,286,424$
Accounts receivable - - - -
Tax receivable - - - -
Accrued interest receivable 9,850 4,708 8,219 3,984
Cash held by fiscal agent - - - -
Loans receivable 78,276 56,781 82,807 -
Total assets 302,034$ 297,703$ 1,508,395$ 1,290,408$
Liabilities, Deferred Inflows of
Resources and Fund Balance
Liabilities:
Accounts payable -$ -$ -$ 1,000$
Accrued liabilities - - - -
Unearned revenue - - - -
Total liabilities - - - 1,000
Deferred Inflows of Resources:
Unavailable revenue 87,427 60,695 86,673 -
Fund balance:
Nonspendable - - - -
Restricted for:
Debt service - - - -
Public safety program - - - -
Transportation projects - - - -
Affordable housing programs - - - -
Impact fee programs 214,607 237,008 1,421,722 1,289,408
Parkland development programs - - - -
Public art programs - - - -
Tourism programs - - - -
Infrastructure improvement - - - -
Committed to:
Public safety program - - - -
Assigned to:
Contingency fund - - - -
Subsequent years expenditures - - - -
Total fund balance 214,607 237,008 1,421,722 1,289,408
Total liabilities, deferred inflows of
resources, and fund balance 302,034$ 297,703$ 1,508,395$ 1,290,408$
(Continued)
128
Page 462 of 668
City of San Luis Obispo, California
Combining Balance Sheets
Nonmajor Governmental Funds
June 30, 2023
Capital Project Debt Service
Funds Fund
Public Safety
Equipment
Replacement
Fund Debt Service
Total Nonmajor
Governmental
Funds
Assets
Cash and investment 713,037$ 1,719,922$ 46,053,262$
Accounts receivable - - 305,251
Tax receivable - - 186,356
Accrued interest receivable - - 3,061,054
Cash held by fiscal agent - 421,509 421,509
Loans receivable - - 12,066,069
Total assets 713,037$ 2,141,431$ 62,093,501$
Liabilities, Deferred Inflows of
Resources and Fund Balance
Liabilities:
Accounts payable 71,499$ -$ 651,743$
Accrued liabilities - - 6,280
Unearned revenue - - 11,113,744
Total liabilities 71,499 - 11,771,767
Deferred Inflows of Resources:
Unavailable revenue - - 6,124,933
Fund balance:
Nonspendable - - -
Restricted for:
Debt service - 2,141,431 2,141,431
Public safety program - - 68,456
Transportation projects - - 7,567,001
Affordable housing programs - - 11,023,649
Impact fee programs - - 10,519,226
Parkland development programs - - 3,205,116
Public art programs - - 1,269,844
Tourism programs - - 1,426,625
Infrastructure improvement - - 157,805
Committed to:
Public safety program 641,538 - 641,538
Assigned to:
Contingency fund - - 900,000
Subsequent years expenditures - - 5,278,534
Total fund balance 641,538 2,141,431 44,196,801
Total liabilities, deferred inflows of
resources, and fund balance 713,037$ 2,141,431$ 62,093,501$
129
Page 463 of 668
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, 2023
Special Revenue Funds
Downtown BID
Transportation
Development Act
(TDA) Tourism BID Gas Tax
Revenues:
Use of money and property -$ -$ 17,020$ -$
Subventions and grants - 76,869 - 1,239,701
Charges for services 269,524 - 2,209,268 -
Property tax - - - -
Other revenues - - 122 -
Total revenues 269,524 76,869 2,226,410 1,239,701
Expenditures:
Current:
General Government - - - -
Public safety - - - -
Transportation - - - -
Community development 271,977 - 1,904,368 -
Debt service:
Principal - - - -
Interest and fiscal charges - - - -
Capital:
General Government - - - -
Public safety - - - -
Transportation - - - -
Leisure, cultural and social services - - - -
Community development - - - -
Total expenditures 271,977 - 1,904,368 -
Excess (deficiency) of revenues over
(under) expenditures (2,453) 76,869 322,042 1,239,701
Other financing sources (uses):
Transfers in - - - -
Transfers out - (76,869) (43,298) (1,239,701)
Total other financing
sources (uses)- (76,869) (43,298) (1,239,701)
Net change in fund balance (2,453) - 278,744 -
Fund balance, beginning of year 29 8,681 1,147,881 -
Fund balance (deficit),
end of year (2,424)$ 8,681$ 1,426,625$ -$
(Continued)
130
Page 464 of 668
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, 2023
Special Revenue Funds
Community
Development
Block Grant
(CDBG)
Law
Enforcement
Grants
Public Art
Contributions
Avila Ranch
CFD
Revenues:
Use of money and property -$ 877$ 16,742$ 1,838$
Subventions and grants 34,595 113,671 - -
Charges for services - 19,497 220,854 -
Property tax - - - 160,890
Other revenues - - - -
Total revenues 34,595 134,045 237,596 162,728
Expenditures:
Current:
General Government - - - -
Public safety - 132,647 - -
Transportation - - - -
Community development - - - 4,923
Debt service:
Principal - - - -
Interest and fiscal charges - - - -
Capital:
General Government - - - -
Public safety - - - -
Transportation - - 3,197 -
Leisure, cultural and social services - - 205,093 -
Community development - - - -
Total expenditures - 132,647 208,290 4,923
Excess (deficiency) of revenues over
(under) expenditures 34,595 1,398 29,306 157,805
Other financing sources (uses):
Transfers in - - 442,500 -
Transfers out - - - -
Total other financing
sources (uses)- - 442,500 -
Net change in fund balance 34,595 1,398 471,806 157,805
Fund balance, beginning of year 108,575 67,058 798,038 -
Fund balance (deficit),
end of year 143,170$ 68,456$ 1,269,844$ 157,805$
(Continued)
131
Page 465 of 668
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, 2023
Capital Project
Funds
SB1 Road
Repair
SB1186 ASP
Certify
Affordable
Housing BEGIN
Loan Fund
Parkland
In-Lieu Fee
Revenues:
Use of money and property (3,773)$ 1,737$ 1,793$ 37,391$
Subventions and grants 1,063,496 - - -
Charges for services - 29,246 - 110,415
Property tax - - - -
Other revenues - - - -
Total revenues 1,059,723 30,983 1,793 147,806
Expenditures:
Current:
General Government - - - -
Public safety - - - -
Transportation - - - -
Community development - 1,067 - -
Debt service:
Principal - - - -
Interest and fiscal charges - - - -
Capital:
General Government - - - -
Public safety - - - -
Transportation 1,650,783 - - -
Leisure, cultural and social services - - - 49,888
Community development - - - -
Total expenditures 1,650,783 1,067 - 49,888
Excess (deficiency) of revenues over
(under) expenditures (591,060) 29,916 1,793 97,918
Other financing sources (uses):
Transfers in - - 182,821 -
Transfers out - - - -
Total other financing
sources (uses)- - 182,821 -
Net change in fund balance (591,060) 29,916 184,614 97,918
Fund balance, beginning of year 907,128 112,056 420,335 3,107,198
Fund balance (deficit),
end of year 316,068$ 141,972$ 604,949$ 3,205,116$
(Continued)
Special Revenue Funds
132
Page 466 of 668
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, 2023
Capital Projects Funds
Open Space
Protection
Airport Area
Impact Fee
LOVR Sub-Area
Fee
Fleet
Replacement
Revenues:
Use of money and property 148$ 7,702$ 4,583$ (30,567)$
Subventions and grants - - - -
Charges for services - - (57,593) -
Property tax - - - -
Other revenues - - - 14,100
Total revenues 148 7,702 (53,010) (16,467)
Expenditures:
Current:
General Government - - - -
Public safety - - - -
Transportation - - 114,635 -
Community development - - - -
Debt service:
Principal - - - -
Interest and fiscal charges - - - -
Capital:
General Government - - - 55,780
Public safety - - - 1,533,401
Transportation - 19,003 - -
Leisure, cultural and social services - - - -
Community development - - - -
Total expenditures - 19,003 114,635 1,589,181
Excess (deficiency) of revenues over
(under) expenditures 148 (11,301) (167,645) (1,605,648)
Other financing sources (uses):
Transfers in - - - 2,030,000
Transfers out - - - -
Total other financing
sources (uses)- - - 2,030,000
Net change in fund balance 148 (11,301) (167,645) 424,352
Fund balance, beginning of year 12,949 675,536 584,365 2,614,555
Fund balance (deficit),
end of year 13,097$ 664,235$ 416,720$ 3,038,907$
(Continued)
133
Page 467 of 668
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, 2023
Capital Projects Funds
Info Tech
Replacement
Affordable
Housing
Transportation
Impact Fee Infrastructure
Revenues:
Use of money and property -$ 176,699$ 82,952$ -$
Subventions and grants - 1,700,000 - -
Charges for services 159,097 554,988 1,369,546 -
Property tax - - - -
Other revenues - 419,260 - -
Total revenues 159,097 2,850,947 1,452,498 -
Expenditures:
Current:
General Government - - - -
Public safety - - - -
Transportation - - - -
Community development - - - -
Debt service:
Principal - - - -
Interest and fiscal charges - - - -
Capital:
General Government 881,640 - - -
Public safety - - - -
Transportation - - 1,104,084 -
Leisure, cultural and social services - - - -
Community development - 1,700,000 - -
Total expenditures 881,640 1,700,000 1,104,084 -
Excess (deficiency) of revenues over
(under) expenditures (722,543) 1,150,947 348,414 -
Other financing sources (uses):
Transfers in 564,777 - - 2,634,911
Transfers out (426,057) (239,821) (280,000) (6,993,000)
Total other financing
sources (uses)138,720 (239,821) (280,000) (4,358,089)
Net change in fund balance (583,823) 911,126 68,414 (4,358,089)
Fund balance, beginning of year 3,280,265 9,364,404 7,031,866 4,788,177
Fund balance (deficit),
end of year 2,696,442$ 10,275,530$ 7,100,280$ 430,088$
(Continued)
134
Page 468 of 668
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, 2023
Capital Projects Funds
Parkland
Development
Impact Fee-
Citywide OASP Park MASP Park
OASP
Transportation
Impact Fee
Revenues:
Use of money and property 10,397$ 30,228$ 19,684$ 16,422$
Subventions and grants - - - -
Charges for services 185,933 327,160 35 -
Property tax - - - -
Other revenues - - - -
Total revenues 196,330 357,388 19,719 16,422
Expenditures:
Current:
General Government - - - -
Public safety - - - -
Transportation - - - -
Community development - - - -
Debt service:
Principal - - - -
Interest and fiscal charges - - - -
Capital:
General Government - - - -
Public safety - - - -
Transportation - - - -
Leisure, cultural and social services - 77,083 - -
Community development - - - -
Total expenditures - 77,083 - -
Excess (deficiency) of revenues over
(under) expenditures 196,330 280,305 19,719 16,422
Other financing sources (uses):
Transfers in - - - -
Transfers out - - - -
Total other financing
sources (uses)- - - -
Net change in fund balance 196,330 280,305 19,719 16,422
Fund balance, beginning of year 658,029 2,043,551 1,668,915 1,392,255
Fund balance (deficit),
end of year 854,359$ 2,323,856$ 1,688,634$ 1,408,677$
(Continued)
135
Page 469 of 668
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, 2023
Capital Projects Funds
Fire Impact Fee
Police Impact
Fee
Park
Improvement
Impact Fee-
Citywide
SLR
Transportation
Impact Fee
Revenues:
Use of money and property 2,711$ 3,215$ 16,424$ 17,116$
Subventions and grants - - - -
Charges for services 11,677 (11,653) 396,683 837,533
Property tax - - - -
Other revenues - - - -
Total revenues 14,388 (8,438) 413,107 854,649
Expenditures:
Current:
General Government - - - -
Public safety - - - -
Transportation - - - -
Community development - - - -
Debt service:
Principal - - - -
Interest and fiscal charges - - - -
Capital:
General Government - - - -
Public safety - - - -
Transportation - - - 24,096
Leisure, cultural and social services - - - -
Community development - - - -
Total expenditures - - - 24,096
Excess (deficiency) of revenues over
(under) expenditures 14,388 (8,438) 413,107 830,553
Other financing sources (uses):
Transfers in - - - -
Transfers out - - - -
Total other financing
sources (uses)- - - -
Net change in fund balance 14,388 (8,438) 413,107 830,553
Fund balance, beginning of year 200,219 245,446 1,008,615 458,855
Fund balance (deficit),
end of year 214,607$ 237,008$ 1,421,722$ 1,289,408$
(Continued)
136
Page 470 of 668
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, 2023
Capital Project Debt Service
Funds Fund
Public Safety
Equipment
Replacement
Fund Debt Service
Total Nonmajor
Governmental
Funds
Revenues:
Use of money and property -$ 21$ 431,360$
Subventions and grants 38,094 - 4,266,426
Charges for services - - 6,632,210
Property tax - - 160,890
Other revenues - - 433,482
Total revenues 38,094 21 11,924,368
Expenditures:
Current:
General Government - 3,132 3,132
Public safety 442,726 - 575,373
Transportation - - 114,635
Community development - - 2,182,335
Debt service:
Principal - 1,859,782 1,859,782
Interest and fiscal charges - 745,735 745,735
Capital:
General Government - - 937,420
Public safety - - 1,533,401
Transportation - - 2,801,163
Leisure, cultural and social services - - 332,064
Community development - - 1,700,000
Total expenditures 442,726 2,608,649 12,785,040
Excess (deficiency) of revenues over
(under) expenditures (404,632) (2,608,628) (860,672)
Other financing sources (uses):
Transfers in 248,380 2,209,804 8,313,193
Transfers out - - (9,298,746)
Total other financing
sources (uses)248,380 2,209,804 (985,553)
Net change in fund balance (156,252) (398,824) (1,846,225)
Fund balance, beginning of year 797,790 2,540,255 46,043,026
Fund balance (deficit),
end of year 641,538$ 2,141,431$ 44,196,801$
137
Page 471 of 668
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Charges for services
Assessments 275,000$ 275,000$ 269,524$ (5,476)$
Total Revenues 275,000 275,000 269,524 (5,476)
Expenditures:
Current
Community development 275,400 275,000 271,977 3,023
Total Expenditures 275,400 275,000 271,977 3,023
Excess of Revenues Over Expenditures (400)- (2,453) (2,453)
Net Change in Fund Balance (400)- (2,453) (2,453)
Fund Balance, Beginning of Year 29 29 29 -
Fund Balance, End of Year (371)$ 29$ (2,424)$ (2,453)$
Budget
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2023
Downtown Business Improvement District Fund
138
Page 472 of 668
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2023
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Subventions and grants 45,900$ 76,869$ 76,869$ -$
Total Revenues 45,900 76,869 76,869 -
Excess of Revenues Over Expenditures 45,900 76,869 76,869 -
Other Financing Uses:
Operating transfers out (45,000) (76,869) (76,869) -
Net Change in Fund Balance 900 -- -
Fund Balance, Beginning of Year 8,681 8,681 8,681 -
Fund Balance, End of Year 9,581$ 8,681$ 8,681$ -$
Budget
Transportation Development Act (TDA)
139
Page 473 of 668
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2023
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property -$ (18,000)$ 17,020$ 35,020$
Assessments 1,727,202 2,140,800 2,209,268 68,468
Total Revenues 1,727,202 2,122,800 2,226,410 103,610
Expenditures:
Current
Community development 2,086,582 2,078,584 1,904,368 174,216
Total Expenditures 2,086,582 2,078,584 1,904,368 174,216
Excess of Revenues Over (Under) Expenditures (359,380) 44,216 322,042 277,826
Other Financing Uses:
Operating transfers out (42,816) (34,544) (43,298) (8,754)
Net Change in Fund Balance (402,196) 9,672 278,744 269,072
Fund Balance, Beginning of Year 1,147,881 1,147,881 1,147,881 -
Fund Balance, End of Year 745,685$ 1,157,553$ 1,426,625$ 269,072$
Budget
Tourism Business Improvement District Fund
140
Page 474 of 668
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2023
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Subventions and grants 1,245,024$ 1,305,634$ 1,239,701$ (65,933)$
Total Revenues 1,245,024 1,305,634 1,239,701 (65,933)
Excess of Revenues Over Expenditures 1,245,024 1,305,634 1,239,701 (65,933)
Other Financing Uses:
Operating transfers out (1,389,292) (1,377,557) (1,239,701) 137,856
Net Change in Fund Balance (144,268) (71,923)- 71,923
Fund Balance, Beginning of Year ----
Fund Balance, End of Year (144,268)$ (71,923)$ -$ 71,923$
Budget
Gas Tax
141
Page 475 of 668
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2023
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Subventions and grants -$ -$ 34,595$ 34,595$
Total Revenues --34,59534,595
Expenditures:
Current
Community development - - - -
Total Expenditures ----
Excess of Revenues Over (Under) Expenditures --34,59534,595
Net Change in Fund Balance --34,59534,595
Fund Balance, Beginning of Year 108,575 108,575 108,575 -
Fund Balance, End of Year 108,575$ 108,575$ 143,170$ 34,595$
Budget
Community Development Block Grant (CDBG) Fund
142
Page 476 of 668
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2023
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Subventions and grants 439,812$ 454,753$ 113,671$ (341,082)$
Charges for services 2,142 2,142 19,497 17,355
Total Revenues 441,954 456,895 134,045 (322,850)
Expenditures:
Public Safety - 14,941 132,647 (117,706)
Total Expenditures - 14,941 132,647 (117,706)
Excess of Revenues Over (Under) Expenditures 441,954 441,954 1,398 (440,556)
Net Change in Fund Balance 441,954 441,954 1,398 (440,556)
Fund Balance, Beginning of Year 67,058 67,058 67,058 -
Fund Balance, End of Year 509,012$ 509,012$ 68,456$ (440,556)$
Budget
Law Enforcement Grants Fund
143
Page 477 of 668
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2023
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property 2,100$ 2,100$ 16,742$ 14,642$
Other revenues 15,000 15,000 220,854 205,854
Total Revenues 17,100 17,100 237,596 220,496
Expenditures:
Capital Projects 325,000 404,168 208,290 195,878
Total Expenditures 325,000 404,168 208,290 195,878
Excess of Revenues Over (Under) Expenditures (307,900) (387,068) 29,306 416,374
Other Financing Uses:
Operating transfers in 442,500 442,500 -
Net Change in Fund Balance (307,900) 55,432 471,806 416,374
Fund Balance, Beginning of Year 798,038 798,038 798,038 -
Fund Balance, End of Year 490,138$ 853,470$ 1,269,844$ 416,374$
Budget
Public Art Contributions Fund
144
Page 478 of 668
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2023
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property -$ -$ 1,838$ 1,838$
Property tax - - 160,890 160,890
Other revenues - 5,833 - (5,833)
Total Revenues - 5,833 162,728 156,895
Expenditures:
Community Development - 4,923 4,923 -
Total Expenditures - 4,923 4,923 -
Excess of Revenues Over (Under) Expenditures - 910 157,805 156,895
Net Change in Fund Balance - 910 157,805 156,895
Fund Balance, Beginning of Year - - - -
Fund Balance, End of Year - 910 157,805 156,895
Avila Ranch CFD
Budget
145
Page 479 of 668
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2023
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property -$ -$(3,773)$ (3,773)$
Subventions and grants 1,049,877 1,019,914 1,063,496 43,582
Total Revenues 1,049,877 1,019,914 1,059,723 39,809
Expenditures:
Capital Projects 1,177,994 285,359 1,650,783 (1,365,424)
Total Expenditures 1,177,994 285,359 1,650,783 (1,365,424)
Excess of Revenues Over (Under) Expenditures (128,117) 734,555 (591,060) (1,325,615)
Net Change in Fund Balance (128,117) 734,555 (591,060) (1,325,615)
Fund Balance, Beginning of Year 907,128 907,128 907,128 -
Fund Balance, End of Year 779,011$ 1,641,683$ 316,068$ (1,325,615)$
SB1 Road Repair Fund
Budget
146
Page 480 of 668
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2023
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property -$ -$ 1,737$ 1,737$
Charges for services --29,24629,246
Total Revenues --30,98330,983
Expenditures:
Community Development 25,000 14,638 1,067 13,571
Total Expenditures 25,000 14,638 1,067 13,571
Excess of Revenues Over (Under) Expenditures (25,000) (14,638) 29,916 44,554
Net Change in Fund Balance (25,000) (14,638) 29,916 44,554
Fund Balance, Beginning of Year 112,056 112,056 112,056 -
Fund Balance, End of Year 87,056$ 97,418$ 141,972$ 44,554$
SB1186 CASP Certify
Budget
147
Page 481 of 668
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2023
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property -$ -$ 1,793$ 1,793$
Total Revenues --1,7931,793
Excess of Revenues Over (Under) Expenditures --1,7931,793
Other Financing Uses:
Operating transfers in - 182,821 182,821 -
Net Change in Fund Balance - 182,821 184,614 1,793
Fund Balance, Beginning of Year 420,335 420,335 420,335 -
Fund Balance, End of Year 420,335$ 603,156$ 604,949$ 1,793$
Affordable Housing BEGIN Loan Fund
Budget
148
Page 482 of 668
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
June 30, 2023
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property -$ -$ 21$ 21$
Total Revenues --21 21
Expenditures:
General Government -- 3,132 (3,132)
Principal 1,185,195 1,494,600 1,859,782 (365,182)
Interest and fiscal charges 668,479 715,205 745,735 (30,530)
Total Expenditures 1,853,674 2,209,805 2,608,649 (398,844)
Excess of Revenues Over (Under) Expenditures (1,853,674) (2,209,805) (2,608,628) (398,823)
Other Financing Uses:
Operating transfers in 2,209,804 2,209,804 2,209,804 -
Total other Financing Uses:2,209,804 2,209,804 2,209,804 -
Net Change in Fund Balance 356,130 (1) (398,824) (398,823)
Fund Balance, Beginning of Year 2,540,255 2,540,255 2,540,255 -
Fund Balance, End of Year 2,896,385$ 2,540,254$ 2,141,431$ (398,823)$
Budget
Debt Service Fund
149
Page 483 of 668
150
Page 484 of 668
City of San Luis Obispo, California
Custodial Funds
For the Fiscal Year Ended June 30, 2023
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.
151
Page 485 of 668
City of San Luis Obispo
Combining Statement of Fiduciary Net Position
Custodial Funds
For the year ended June 30, 2023
Hazardous General Boysen Ranch
Whale Jack Materials Task Agency Conservation
Rock Fund House Fund Force Fund Fund Easement
ASSETS
Cash and investments 5,003,065$ 19,146$ 161,738$ 2,972,047$ 402,106$
Receivables:
Accounts 227,594 - - - -
Interest 16,382 62 528 - 1,303
Capital assets 726,355 - - - -
Total assets 5,973,396 19,208 162,266 2,972,047 403,409
LIABILITIES
Accounts payable 38,036 - 6,171 93,123 -
Compensated absence 64,343 - - - -
Accrued Salaries 13,568 - 292 - -
Other liabilities 2,000 - - - -
Total liabilities 117,947 - 6,463 93,123 -
NET POSITION
Restricted for
Individuals, organizations, and
other governments 5,855,449 19,208 155,803 2,878,924 403,409
Total net position 5,855,449$ 19,208$ 155,803$ 2,878,924$ 403,409$
(Continued)
152
Page 486 of 668
City of San Luis Obispo
Combining Statement of Fiduciary Net Position
Custodial Funds
For the year ended June 30, 2023
Total
PEG City of San Luis Ranch PEG Custodial
San Luis Obispo CFD SLCUSD Funds
ASSETS
Cash and investments 113,497$ 11,802,003$ 34,475$ 20,508,077$
Receivables:
Accounts - 181,663 - 409,257
Interest 351 1,216 96 19,938
Capital assets - - - 726,355
Total assets 113,848 11,984,882 34,571 21,663,627
LIABILITIES
Accounts payable - 3,678 - 141,008
Compensated absence - - - 64,343
Accrued Salaries - - - 13,860
Other liabilities - - - 2,0000
Total liabilities - 3,678 - 221,211
NET POSITION
Restricted for
Individuals, organizations, and
other governments 113,848 11,981,204 34,571 21,442,416
Total net position 113,848$ 11,981,204$ 34,571$ 21,442,416$
153
Page 487 of 668
Hazardous General Boysen Ranch
Whale Jack Materials Task Agency Conservation
Rock Fund House Fund Force Fund Fund Easement
ADDITIONS:
Assessment revenue -$ -$ -$ -$ -$
Charges for services 1,126,924 - 63,000 --
Charges for public programming - - - - -
Contribution from developers ---1,128,775 -
Other revenue 1,188,508 - - 31,081 -
Use of money and property 60,749 224 2,089 - 4,665
Total additions 2,376,181 224 65,089 1,159,856 4,665
DEDUCTIONS:
Administration expenses 190,501 - 10,163 90,837 -
Contractual services 1,233,371 - 38,779 -6,490
Materials and supplies 176,959 -7,433 --
Public programming -----
Use of developer deposits ---1,217,765 -
Depreciation 63,283 ----
Total deductions 1,664,114 -56,375 1,308,602 6,490
Net increase (decrease) in
fiduciary net position 712,067 224 8,714 (148,746) (1,825)
NET POSITION:
Beginning of year, as restated 5,143,382 18,984 147,089 3,027,670 405,234
End of year 5,855,449$ 19,208$ 155,803$ 2,878,924$ 403,409$
(Continued)
City of San Luis Obispo
Combining Statement of Changes in Fiduciary Net Position
Custodial Funds
For the year ended June 30, 2023
154
Page 488 of 668
City of San Luis Obispo
Combining Statement of Changes in Fiduciary Net Position
Custodial Funds
For the year ended June 30, 2023
Total
PEG City of San Luis Ranch PEG Custodial
San Luis Obispo CFD SLCUSD Funds
ADDITIONS:
Assessment revenue -$ 958,259$ -$ 958,259$
Charges for services -- -1,189,924
Charges for public programming 40,585 - 40,585 81,170
Contribution from developers -- -1,128,775
Other revenue - - -1,219,589
Use of money and property 1,249 335,522 (2,249)402,249
Total additions 41,834 1,293,781 38,336 4,979,966
DEDUCTIONS:
Administration expenses -790,262 -1,081,763
Contractual services -- 92,697 1,371,337
Materials and supplies ---184,392
Public programming 44,188 --44,188
Use of developer deposits ---1,217,765
Depreciation ---63,283
Total deductions 44,188 790,262 92,697 3,962,728
Net increase (decrease) in
fiduciary net position (2,354) 503,519 (54,361) 1,017,238
NET POSITION:
Beginning of year, as restated 116,202 11,477,685 88,932 20,425,178
End of year 113,848$ 11,981,204$ 34,571$ 21,442,416$
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STATISTICAL SECTION (UNAUDITED)
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City of San Luis Obispo, California
Statistical Section Overview
For the Fiscal Year Ended June 30, 202
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.
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2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Governmental activities:
Net investment in capital assets 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$ 205,324,234$
Restricted 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 43,694,462
Unrestricted (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) (29,944,880)
Total governmental activities net position 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$ 219,073,816$
Business-type activities:
Net investment in capital assets 119,116,303$ 125,801,845$ 128,390,611$ 131,149,516$ 136,694,402$ 139,659,544$ 149,617,018$ 160,750,886$ 157,728,990$ 170,471,787$
Restricted 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 1,653,225
Unrestricted 35,224,987 42,117,143 49,495,220 53,421,102 50,866,147 57,379,689 53,983,005 53,159,080 79,970,715 88,160,609
Total business-type activities net position 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$ 260,285,621$
Primary government (City wide totals):
Net investment in capital assets 264,382,346$ 276,232,071$ 291,840,603$ 296,249,942$ 308,166,653$ 314,090,798$ 326,952,666$ 345,138,175$ 351,713,583$ 375,796,021$
Restricted 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 45,347,687
Unrestricted (31,385,117) (15,304,635) 463,327 11,924,261 956,490 (14,661,483) (19,823,111) (9,210,608) 22,512,604 58,215,729
Total primary government net position 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$ 479,359,437$
City of San Luis Obispo, California
Schedule 1
Net Assets by Component
Last Ten Fiscal Years
(Accrual basis of accounting)
$-
$100,000,000
$200,000,000
$300,000,000
$400,000,000
$500,000,000
Governmental vs Business-type Net Position
Total business-type activities net position
Total governmental activities net position
$(100,000,000)
$-
$100,000,000
$200,000,000
$300,000,000
$400,000,000
$500,000,000
Net Position by Component
Net investment in capital assets
Restricted
Unrestricted
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2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Expenses:
Governmental activities:
Public safety 29,651,702$ 26,881,732$ 29,318,821$ 31,806,692$ 42,097,557$ 34,320,108$ 34,670,383$ 35,226,779$ 41,132,177$ 26,828,837$
Transportation 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 10,052,069
Culture and recreation 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 11,552,865
Community development 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 14,768,484
General Government - - - - - 22,429,785 22,058,724 17,276,491 20,982,321 25,628,303
Interest on long-term debt 1,221,205 1,015,011 1,351,468 1,170,984 1,488,183 702,885 839,661 731,045 699,284 681,023
Total governmental activities expenses 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 89,511,581
Business-type activities:
Water 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 22,152,285
Sewer 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 13,417,264
Parking 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 5,063,501
Transit 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 4,482,763
Total business-type activities expenses 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 45,115,813
Total primary government expenses 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$ 134,627,394$
Program Revenues:
Governmental activities:
Charges for services:
Public safety 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$ 2,847,705$
Transportation 1,321,323 1,270,787 1,691,757 1,793,010 1,669,563 2,399,692 531,424 91,509 636,874 955,012
Culture and recreation 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 4,234,538
Community development 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 10,164,525
General Government - - - - - 1,391,940 760,606 654,039 530,775 734,991
Operating grants and contributions 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 5,331,657
Capital grants and contributions 3,680,440 7,911,867 9,355,707 40,531 39,781 47,234 2,504,722 5,688,200 1,531,157 200,933
Total governmental activities program revenues 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 24,469,361
Business-type activities:
Charges for services:
Water 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$ 27,720,676$
Sewer 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 22,341,314
Parking 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 6,022,372
Transit 688,585 649,899 659,471 666,296 703,451 776,808 633,566 331,352 713,777 809,969
Operating grants and contributions 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 7,355,896
Capital grants and contributions 82,359 60,063 - - - - - - - -
Total business-type activities programs revenues 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 64,250,227
Total primary government program revenues 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$ 88,719,588$
Net Revenues (Expenses):
Governmental activities (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)$ (65,042,220)$
Business-type activities 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 19,134,414
Total primary government (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)$ (45,907,806)$
Continued
City of San Luis Obispo, California
Schedule 2
(Accrual Basis of Accounting)
Changes in Net Position, Last Ten Fiscal Years
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2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
General Revenues and Other Changes in Net Position:
Governmental activities:
Sales and use taxes 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$ 52,374,199$
Property taxes 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 15,635,545
Transient occupancy tax 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 11,037,037
Utility users tax 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 6,904,194
Property tax in-lieu of vehicle license fees 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 6,283,397
Other taxes and fees 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 7,216,335
Investment earnings 566,931 467,348 825,760 997,995 164,434 1,618,354 3,368,951 435,818 (1,638,993) 2,350,922
Miscellaneous and other 679,127 707,781 - - - 146,579 1,001,369 1,019,626 1,213,401 1,774,126
Gain (loss) on disposal of capital assets - - - - - - - - - -
Prior period adjustment (833,234) - - - - - - 745,285 - -
Cumulative change in accounting principle (GASB 65)- - - - - - - -
Transfers (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 2,243,612
Total governmental activities 51,313,072 53,746,122 58,580,355 58,079,385 60,133,033 65,178,716 65,626,272 74,664,581 95,179,707 105,819,367
Business-type activities
Investment earnings 364,551$ 361,627$ 845,906$ 182,261$ 320,471$ 2,516,216$ 2,880,634$ 577,250$ (1,207,118)$ 2,618,340$
Cumulative change in accounting principle - - - - - - - - - -
Income from investment in joint venture - - 239,200 206,700 209,300 (25,469) 153,949 519,677 585,101 391,993
Prior period adjustment - - - - - - - (907,350) - -
Transfers 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) (2,243,612)
Total business-type activities 438,322 691,079 (350,942) (662,602) (668,256) 34,712 1,144,683 (1,803,334) (2,307,331) 766,721
Total primary government 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$ 106,586,088$
Change in net position:
Governmental activities 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$ 40,777,147$
Business-type activities 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 19,901,135
Total primary government 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$ 60,678,282$
Schedule 2
City of San Luis Obispo, California
Changes in Net Position, Last Ten Fiscal Years
(Accrual Basis of Accounting)
Continued
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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 Total
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
2021-22 22,247,303 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
2022-23 21,865,468 30,508,731 15,635,545 11,037,037 6,904,194 6,283,397 2,349,603 3,281,010 1,585,722 99,450,707
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 3
City of San Luis Obispo, California
Governmental Activities Tax and Franchise Revenues by Source
Last Ten Fiscal Years
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Revenue Trends
Sales and Use Local Sales Property Transient Occupancy Utility Users
Property in-lieu of VLF Franchise Fees Business Tax Other Taxes
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2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
General fund:
Reserved -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
Unreserved:
Designated - - - - - - - - - -
Undesignated - - - - - - - - - -
Nonspendable:
Prepaid items 3,191,055 60,181 56,020 3,173,248 3,520,473 51,636 - 41,155 90,797 101,462
Restricted for:
Debt service 312,037 303,126 489,056 128,102 159,724 - - - - -
Committed to:
General government programs 4,973,497 3,942,459 4,468,863 9,428,034 8,693,113 - - 9,299,971 5,696,864 5,307,988
Contingency Fund - - - - - - - 11,830,380 12,014,000 13,727,000
Risk management - - - - - - - 1,955,966 1,845,935 585,456
Assigned to:
CalPERS pension payment - - - - - - - 10,200,000 2,000,000 2,000,000
Contingency Fund 10,458,000 10,486,931 11,092,782 10,902,368 10,171,464 13,418,400 10,251,000 - - -
Solid Waste AB939 - - - - - - - - - 281,000
Establishment of Section 115 Trust - - - - - - 1,400,000 2,000,000 2,000,000 2,000,000
Revenue stabilization - - - - - - 1,000,000 - - 2,000,000
Development Services - 1,848,386 382,396 41,110 596,796 531,000 899,277 710,657 530,657 464,136
SLO Repertory Theater Grant - -- - - - - - 3,940,000 3,940,000
Tenant Improvement program/Economic Develo - -- - - - - - - 1,400,000
General government programs - -- - - - - - 4,270,529 -
Public Safety - 97,239 - - - - 1,096,215 929,344 - -
Risk management - -- - - - 1,498,078 - - -
City Attorney - -- 100,000 100,000 - 100,000 100,000 - -
Subsequent years expenditures - - 2,716,534 - - 9,908,932 10,284,119 4,738,806 - 2,455,573
Unassigned 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 8,275,453
Total general fund 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 42,538,068
Continued
Schedule 4
For the Fiscal Year Ended June 30
(Modified Accrual Basis of Accounting)
Last Ten Fiscal Years
Fund Balances, Governmental Funds
City of San Luis Obispo, California
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2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
All other governmental funds:
Reserved -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
Unreserved reported in:
Capital projects funds - - - - - - - - - -
Special revenue funds - - - - - - - - - -
Nonspendable - - - 5,642 (71,687) 292,641 - - 8,681 -
Restricted for:
Debt service 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 2,141,431
Public safety programs 27,145 16,886 23,492 20,786 3,073 - 32,332 63,418 864,848 68,456
Transportation projects - - - - - 8,151,487 9,371,824 10,519,994 8,051,050 7,567,001
Affordable housing programs - - - - - 2,944,549 8,698,494 9,292,304 9,893,314 11,023,649
Impact fee programs - - - - - 1,870,656 3,126,925 7,466,378 8,935,786 10,519,226
Parkland development programs - - - - - 3,528,662 4,709,560 3,405,468 3,107,198 3,205,116
Public art programs - - - - - 620,934 591,097 568,401 798,038 1,269,844
Tourism programs - - - - - 456,023 322,975 678,554 1,147,881 1,426,625
Infrastructure improvements - - - - - - - - - 157,805
Committed to:
Affordable housing programs 2,946,847 2,601,882 2,562,825 5,054,332 3,974,629 - - - - -
Capital outlay 6,045,091 3,632,641 2,954,223 - - - - - - -
General government programs 4,743,552 1,084,221 7,463,605 - 8,092,594 - - - - -
Impact Fees Programs 411,592 9,410,273 549,349 8,795,074 595,256 - - - - -
Open space programs 1,582,425 983,402 1,265,620 588,743 2,363,347 - - - - -
Parkland development programs - - - 2,728,883 - - - - - -
Contingency fund - - - - 519,885 - - - - -
Public safety programs - - - - - - - - - 641,538
Assigned to:
Contingency fund - - - 900,000 900,000 900,000 900,000 900,000 900,000 900,000
Subsequent years expenditures 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 29,776,252
Unassigned 1,039 (83) - - - (318,422) (149,162) (5,782) - (2,424)
Total all other governmental
funds 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 68,694,519
Total all governmental funds 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$ 111,232,587$
Continued
For the Fiscal Year Ended June 30
Schedule 4
City of San Luis Obispo, California
Fund Balances, Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
16
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2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Revenues:
Sales and use - general 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$ 21,865,468$
Sales and Use - local transaction tax 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 30,508,731
Prop. 172 Public Safety tax 391,567 409,590 405,066 405,512 397,488 314,063 416,459 425,136 529,299 544,521
Property tax 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 15,474,655
Transient Occupancy 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 11,037,037
Utility users tax 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 6,904,194
Property tax in-lieu of VLF 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 6,283,397
Franchise fees 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 2,349,603
Business tax 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 3,281,010
Cannabis tax - - - - - - - - 998,875 1,127,744
Real property transfer 287,560 298,191 366,088 332,314 347,765 273,762 388,075 469,883 550,153 457,978
Fines, forfeitures and penalties 150,185 184,320 172,353 139,534 199,374 155,269 239,048 223,882 173,915 195,991
Use of money and property 566,931 467,348 825,760 260,169 164,434 1,996,382 2,005,968 219,507 (2,151,227) 1,999,872
Subventions and grants 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 6,364,704
Charges for services 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 18,418,552
Other revenues 357,469 217,710 242,744 446,456 634,391 590,796 708,579 717,440 506,722 880,614
Total revenues 69,884,645 77,787,061 82,954,329 75,412,272 78,597,850 85,205,470 88,103,560 104,867,083 117,082,014 127,694,071
Continued
Schedule 5
(Modified accrual basis of accounting)
Last Ten Fiscal Years
Revenues, Expenditures and Changes in Fund Balances of Governmental Funds
City of San Luis Obispo, California
-
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
140,000,000
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Total Revenue
16
6
Page 500 of 668
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Expenditures:
Current:
General Government 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$ 23,646,307$
Public safety 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 37,425,928
Transportation 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 5,408,704
Culture and recreation 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 11,015,177
Community development 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 14,867,023
Debt service:
Principal 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 1,859,782
Interest 1,048,671 1,063,820 1,349,216 1,215,504 1,524,180 809,977 993,697 808,586 774,747 745,735
Capital:
Public safety 892,351 2,371,865 1,220,759 1,772,454 506,491 706,918 182,235 107,965 248,613 1,577,415
Transportation 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 9,364,910
Leisure, cultural and social services 1,272,510 2,399,211 1,463,269 1,499,704 981,768 597,187 1,213,682 537,118 3,933,463 1,226,800
Community development (Note 1)939,017 123,258 149,537 2,078,181 525,105 1,568,147 785,517 105,142 601,315 10,202,665
General government 145,199 1,684,045 590,263 633,682 1,192,424 4,695,978 2,081,482 2,492,435 1,619,793 2,365,432
Total expenditures 63,280,627 80,958,782 81,998,422 75,173,426 91,339,112 85,087,309 80,599,490 86,872,310 110,057,495 119,705,878
Excess of revenues
over(under)
expenditures 6,604,018 (3,171,722) 955,907 238,846 (12,741,262) 118,161 7,504,070 17,994,773 7,024,519 7,988,193
Continued
Schedule 5
City of San Luis Obispo, California
Revenues, Expenditures and Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified accrual basis of accounting)
Continued
-
50,000,000
100,000,000
150,000,000
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Total Expenditures
16
7
Page 501 of 668
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Other Financing
Sources(Uses):
Issuance of debt/refunding debt 850,775$ 8,372,323$ 688,500$ 1,141,468$ 12,472,698$ 673,095$ -$ -$ -$ -$
Transfers in 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 39,735,789
Transfers out (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) (37,492,177)
Other financing source - SBITA - - - - - - - - - 474,594
Total other financing
sources(uses)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 2,718,206
Net change in fund
balance 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$ 10,706,399$
Debt service as a
percentage of noncapital
expenditures 5.98%8.92%5.20%5.37%26.64%4.08%3.86%3.46%2.55%2.82%
Notes:
1. Community Development Block Grant (CDBG) expenditures are included in the Community Development total for purposes of this schedule.
2. Prior to 2021-22, cannabis tax was included in business tax
Continued
Schedule 5
City of San Luis Obispo, California
Revenues, Expenditures and Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified accrual basis of accounting)
-
50,000,000
100,000,000
150,000,000
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Revenue, Expenditures, and Other
Revenue Expenditures Other Financing Sources
16
8
Page 502 of 668
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Staffing:
Salaries and wages:
Regular salaries 23,242,170$ 23,804,510$ 24,790,947$ 26,944,188$ 26,666,447$ 27,520,149$ 28,601,004$ 29,014,941$ 31,822,988$ 35,422,024$
Temporary salaries 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 1,942,485
Overtime 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 4,504,561
Benefits:
Retirement 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 17,908,383
Group health/disability insurance 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 5,130,991
Medicare 393,913 408,889 418,704 455,966 469,688 477,925 481,571 505,450 537,516 593,725
Unemployment Reimbursements 31,634 48,588 5,159 150,929 61,972 - 61,240 101,575 17,484 41,464
Total staffing 39,902,144 40,885,116 43,804,840 47,472,306 48,539,972 53,481,475 51,203,483 53,829,185 67,638,979 65,543,634
Contract services 5,725,290 5,903,638 6,271,607 6,962,949 6,940,018 6,557,939 6,444,957 7,190,499 9,067,321 10,328,784
Other operating expenditures
Communications & utilities 2,034,997 1,945,243 2,192,384 2,023,057 2,190,695 2,444,564 2,115,821 3,348,001 3,780,633 3,867,295
Rents & leases 197,104 159,718 164,729 170,288 171,909 180,478 160,045 88,615 133,521 133,649
Insurance:
General liability & property 1,425,450 1,646,605 1,847,422 1,273,133 1,658,319 1,600,962 2,196,462 1,323,824 2,071,193 2,874,417
Workers compensation 1,405,916 1,631,585 2,019,722 1,627,423 2,145,046 2,422,843 2,611,827 2,037,611 2,181,044 2,844,913
Other operating expenditures 2,991,619 3,635,542 3,079,347 3,345,191 3,017,537 3,575,930 4,902,050 4,256,574 4,363,206 8,063,807
Total operating expenditures 8,055,086 9,018,693 9,303,604 8,439,092 9,183,506 10,224,777 11,986,205 11,054,625 12,529,597 17,784,081
Minor capital 195,473 78,414 92,853 203,098 90,346 - - 1,070 10,510 -
Total program expenditures 53,877,993 55,885,861 59,472,903 63,077,445 64,753,842 70,264,191 69,634,645 72,075,379 89,246,406 93,656,498
Reimbursed expenditures (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) (4,461,578)
Total general fund operating expenditures 49,980,573$ 52,434,653$ 55,463,911$ 58,912,698$ 60,489,209$ 66,282,402$ 65,356,981$ 67,496,977$ 84,528,964$ 89,194,920$
Schedule 6
(Modified Accrual Basis of Accounting)
Last Ten Fiscal Years
General Fund Operating Expenditures by Type
City of San Luis Obispo, California
16
9
Page 503 of 668
Fiscal Year Homeowners Secured Roll Nonunitary Unsecured Total Direct Market Value of Market
Exemptions Gross Value Utilities Roll TOTAL Tax Rate (Note 1) Value
2013-14 41,327,300 6,326,132,900 5,300,173 306,943,353 6,638,376,426 1.00% 6,467,600,400 100%
2014-15 41,185,200 6,712,802,631 5,032,204 308,973,937 7,026,808,772 1.00% 7,026,808,772 100%
2015-16 41,518,400 7,166,010,320 4,883,115 317,266,793 7,488,160,228 1.00% 7,488,160,228 100%
2016-17 42,109,709 7,615,940,988 5,269,573 316,965,453 7,938,176,014 1.00% 7,702,282,828 100%
2017-18 42,702,377 7,844,131,236 4,369,188 331,183,030 8,179,683,454 1.00% 8,179,683,454 100%
2018-19 43,352,906 8,688,541,007 4,231,993 359,588,899 9,052,361,899 1.00% 9,052,361,899 100%
2019-20 43,335,854 9,156,811,458 3,990,145 360,372,662 9,521,174,265 1.00% 9,521,174,265 100%
2020-21 43,445,185 9,872,892,242 4,194,503 371,969,399 10,249,056,144 1.00% 10,249,056,144 100%
2021-22 43,644,354 10,449,275,830 4,154,621 369,153,263 10,822,583,714 1.00% 10,822,583,714 100%
2022-23 44,681,189 11,352,719,604 3,840,493 414,262,072 11,770,822,169 1.00% 11,770,822,169 100%
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 2022-23 report - 2022/23 Roll Summary table.
Gross Assessed Valuation (Notes 1 and 2)
Schedule 7
City of San Luis Obispo, California
Assessed Value and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
-
2,000,000,000
4,000,000,000
6,000,000,000
8,000,000,000
10,000,000,000
12,000,000,000
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Total Assessed Value
Secured Roll Gross Value Nonunitary Utilities Unsecured Roll
170
Page 504 of 668
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Proposition 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 Bond 0.00400 0.00400 0.00374 0.00400 0.00400 0.00400 0.00400 0.00400 0.00400 0.00400
Cuesta Community College 2014 A & A1 - - 0.01925 0.01925 0.01925 0.01925 0.01925 0.01925 0.01925 0.01925
San Luis Coastal Usd 2014 Series A & B - - 0.04900 0.04900 0.04900 0.04900 0.04900 0.03900 0.03900 0.03500
Total (Notes 1 and 3)1.00400 1.00400 1.07199 1.07225 1.07225 1.07225 1.07225 1.06225 1.06225 1.05825
Notes:
1. Property tax rates are levied per $100 of assessed valuation. The tax rate information provided is for Tax Rate Area 003-000, which is the
largest tax rate area in the City.
2. The passage of Proposition 13 on June 6, 1978 established a maximum County-wide levy for general revenue purposes of 1% of market value.
Voter-approved tax rates for the retirement of long-term liabilities were excluded from this limit.
3. It is not possible to identify tax rates for individual agencies however, the following is a summary of derived property tax
allocations within Tax Rate Area 003-000 for Fiscal Year 2022-23
Source: HdL, Coren & Cone ACFR 2022-23 report - Direct & Overlapping Property Tax Rates table
Base ERAF Net
Rate Allocation Apportionment
San Luis Coastal Unified School District 36.10 0.00 36.10
San Luis Obispo County - General Fund 30.32 (8.08)22.24
City of San Luis Obispo 18.36 * (3.48)14.88
San Luis Obispo Community College District 6.42 0.00 6.42
County School Services 3.81 0.00 3.81
City/County Library 1.98 (0.32)1.66
Port San Luis Harbor 1.63 (0.44)1.19
Other Agencies 1.38 (0.32)1.06
Education Revenue Augmentation Fund (ERAF)0.00 12.65 12.65
Total 100%0%100%
*The County further adjusts the 18.4% base rate for revenue shifts to school districts as directed by the State as part of their cuts to local agencies,
resulting in an effective rate for the City of approximately 14.9%.
Source: HdL, Coren & Cone ACFR 2022-23 report - Property Tax Dollar Breakdown, San Luis Obispo County Assessor 2022-23 Post ERAF TRA Allocation Factors
Schedule 8
Last Ten Fiscal Years
Property Tax Rates
City of San Luis Obispo, California
17
1
Page 505 of 668
Number of Secured Percent of Total Number of Secured Percent of Total
Owner Parcels Assessed Value Rank City Assessed Value Parcels Assessed Value Rank City Assessed Value
Jamestown Premier San Luis Obispo Retail 10 116,755,505$ 1 1.06% 9 49,128,994$ 4 0.80%
CAP VIII - Mustang Village LLC 5 100,005,897 2 0.91%
Sierra Vista Hospital Inc.8 83,107,362 3 0.76% 7 73,465,824 2 1.20%
San Luis Obispo Promenade DE LLC 10 56,100,000 4 0.51%
Charles Pasquini Jr Trust Et Al 4 53,422,118 5 0.49% 9 59,599,763 3 0.97%
Irish Hills Plaza East LLC 6 53,213,898 6 0.48% 3 35,458,731 5 0.58%
Vintage at San Luis Obispo Alderwood 2 51,000,000 7 0.46%
Hotel San Luis Obispo LLC 1 37,529,832 8 0.34%
Costco Wholesale Corporation 1 38,444,903 9 0.35% 1 33,192,009 6 0.54%
Laurel Creek 4 35,195,481 10 0.32%
Target Corporation 1 24,749,747 9 0.40%
Mustang-UCAL LLC 4 78,483,289 1 1.28%
Marigold Center LLC 9 26,160,839 8 0.43%
SLO Promenade Limited Partnership 9 31,785,000 7 0.49%
Stephen N. Dorsi Trust 9 23,296,525 10 0.38%
Total 51 624,774,996$ 5.68% 61 435,320,721$ 7.07%
Source: HdL, Coren & Cone ACFR 2022-23 report - Top Ten Property Taxpayers table.
2013-14 data is from the City's ACFR.
Schedule 9
2022-23 2013-14
Current Year and Nine Years Ago
Principal Property Tax Payers
City of San Luis Obispo, California
94.32%
5.68%
Property Tax Payers for 2022-23
Remaining Property Tax Payers Top 10 Property Tax Payers
92.93%
7.07%
Property Tax Payers for 2013-14
Remaining Property Tax Payers Top 10 Property Tax Payers
17
2
Page 506 of 668
Total Secured Current Year Percent
Fiscal Tax Levy Current Year Percent Delinquencies Delinquent
Year (Notes 1 and 2)Collections Collected (Note 3)(Note 3)
2013-14 8,601,630 8,601,630 100%0 0
2014-15 9,097,280 9,097,280 100%0 0
2015-16 9,707,340 9,707,340 100%0 0
2016-17 10,250,205 10,250,205 100%0 0
2017-18 10,868,920 10,868,920 100%0 0
2018-19 11,648,706 11,648,706 100%0 0
2019-20 12,180,662 12,180,662 100%0 0
2020-21 12,957,910 12,957,910 100%0 0
2021-22 13,628,729 13,628,729 100%0 0
2022-23 14,458,958 14,458,958 100%0 0
Notes:
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 - 2022-23 Property Tax Estimates and Delinquencies Report
Schedule 10
City of San Luis Obispo, California
Secured Property Tax Roll Levies and Collections
Last Ten Fiscal Years
17
3
Page 507 of 668
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Sales
In Thousands of Dollars
Apparel stores 73,170 73,241 75,037 72,540 74,268 73,272 71,632 51,499 73,724 73,290
General merchandise stores 174,794 180,442 183,397 182,596 182,975 180,609 182,263 173,777 203,468 243,196
Food and drug stores 40,875 41,979 43,798 43,486 46,085 47,337 49,239 50,107 49,447 52,218
Eating & drinking palces 147,352 159,024 171,620 177,675 184,745 187,174 192,495 140,612 199,116 223,258
Building materials & farm tools 126,123 133,143 140,259 142,498 160,223 163,029 162,338 165,802 182,782 190,878
Auto dealers & supplies 269,555 287,933 305,584 307,628 321,567 322,904 322,867 325,523 403,466 395,345
Service stations 103,053 101,510 88,116 79,613 83,481 94,369 95,382 70,383 99,612 123,678
Other retail stores 263,058 267,542 277,546 282,551 279,100 283,525 264,913 248,229 302,766 308,160
Total retail stores 1,197,980 1,244,814 1,285,357 1,288,587 1,332,444 1,352,219 1,341,129 1,225,932 1,514,381 1,610,023
All other outlets 147,410 153,402 168,258 164,634 176,620 170,882 189,299 158,208 639,005 642,340
Total 1,345,390 1,398,216 1,453,615 1,453,221 1,509,064 1,523,101 1,530,428 1,384,140 2,153,386 2,252,363
Source: HdL, Coren & Cone ACFR 2022-23 report - Taxable Sales by Category table
Last Ten Calendar Years
Schedule of Taxable Sales and Permits by Category
City of San Luis Obispo, California
Schedule 11
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Taxable Sales by Category
(In Thousands of Dollars)
Apparel stores General merchandise stores Food and drug stores
Eating & drinking palces Building materials & farm tools Auto dealers & supplies
Service stations Other retail stores All other outlets
17
4
Page 508 of 668
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
175
Page 509 of 668
No. of No. of
Certificates Percent Certificates Percent
Construction 926 10.9%897 10.7%
Manufacturing 136 1.6%129 1.5%
Transportation/Utilities 50 0.6%49 0.6%
Wholesale 127 1.5%126 1.5%
Retail 1,017 11.9%1167 13.9%
Professional 1,102 12.9% 1,185 14.2%
Residential Rental 2,759 32.3% 2,694 32.2%
Commercial Rental 297 3.5%303 3.6%
Services 2,117 24.8% 1,821 21.8%
Total business certificates issued 8,531 100% 8,371 100%
Home occupations 718 8.4%667 8.0%
Located outside City limits 2,059 24.1% 1,932 23.1%
Located in Downtown Business Improvement District 584 6.8%553 6.6%
Source: City of San Luis Obispo Finance Department - Revenue Division
Fiscal Years Ended June 30, 2023 and 2022
Schedule of Business Tax Certificates Issued
City of San Luis Obispo, California
Schedule 13
20222023
10.9%
1.6%
0.6%1.5%
11.9%
12.9%
32.3%
3.5%
24.8%
Business Tax Types for Fiscal Year End 2023
Construction
Manufacturing
Transportation/Utilities
Wholesale
Retail
Professional
Residential Rental
Commercial Rental
Services
176
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Percentage of
Fiscal Lease Purchase Lease SBITA Lease Purchase Installment SBITA Total Primary Per Gross Assessed
Year Bonds Financing Loans Liability Liability Bonds Financing Sales Agreement Loans Liability Government Capita Value
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 0.88%
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%
2022-23 16,518,336 - 1,519,356 445,919 407,466 12,986,875 - 2,869,551 118,966,863 25,658 153,740,024 3,217 1.31%
Source: City of San Luis Obispo Finance Department
Governmental Activities Business-Type Activities
Schedule 14
City of San Luis Obispo, California
Per Capita Outstanding Debt By Type
Last Ten Fiscal Years
$-
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
$160,000,000
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Outstanding Debt Per Capita
Governmental Activities Business-Type Activities
17
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Service Ratio of Net
Total Taxable General Payable from Net Bonded Debt Net Bonded
Assessed Bonded Enterprise Bonded to Assessed Debt per
Fiscal Year Population Value Debt Revenues Debt Value Capita
2013-14 45,473 6,638,376,426 0 0 0 0.0%0
2014-15 45,484 7,026,808,772 0 0 0 0.0%0
2015-16 46,117 7,488,160,228 0 0 0 0.0%0
2016-17 46,724 7,938,176,014 0 0 0 0.0%0
2017-18 46,548 8,179,683,454 0 0 0 0.0%0
2018-19 46,802 9,052,361,899 0 0 0 0.0%0
2019-20 45,920 9,521,174,265 0 0 0 0.0%0
2020-21 47,063 10,249,056,144 0 0 0 0.0%0
2021-22 47,653 10,822,583,714 0 0 0 0.0%0
2022-23 47,788 11,770,822,169 0 0 0 0.0%0
Notes:
1. Valuations are established by the County Assessor of the County of San Luis Obispo, except for property owned by
private utility companies, which is valued by the State of California.
2. See Schedule of Demographic and Economic Statistics for population data.
3. Personal income information is not available. Net Bonded Debt is expressed as a ratio to Assessed Value.
Source: HdL, Coren & Cone ACFR 2022-23 report - Demographic and Economic Statistics table
Demographics changed from FY to Calendar Year
Last Ten Fiscal Years
Schedule 15
City of San Luis Obispo, California
Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt per Capital
17
8
Page 512 of 668
Amount Applicable
Percent Applicable to the City of
to the City of San Luis Obispo
San Luis Obispo as of June 30, 2023
Overlapping tax and assessment debt:
San Luis Obispo Community College District 156,300,000$ 16.851% 26,338,113$
San Luis Coastal Unified School District 237,661,000 52.254% 124,187,379
City of San Luis Obispo Community Facilities District No. 2019-1 19,660,000 100.000% 19,660,000
Total overlapping tax and assessment debt 170,185,492
Overlapping General Fund long-term debt:
San Luis Obispo County General Fund Obligations 84,246,776$ 16.920% 14,254,554$
San Luis Obispo County Pension Obligations 26,295,037 16.920% 4,449,120
18,703,674
Direct long-term debt:
City of San Luis Obispo 2018 Water Revenue Refunding Bonds 100.000% 7,860,000$
City of San Luis Obispo 2018 Lease Revenue Bonds 100.000% 12,350,000
City of San Luis Obispo 2014 LOVR Lease Revenue Bonds 100.000% 6,275,000
City of San Luis Obispo 2012 Refunding Revenue Bonds (2001) 100.000% 2,415,000
City of San Luis Obispo Lease liability 100.000% 570,922
City of San Luis Obispo Subscription based IT agreements liability 100.000% 407,465
City of San Luis Obispo Lease-purchase financing 100.000% 36,245
City of San Luis Obispo energy conservation loan 100.000% 46,887
City of San Luis Obispo Unamortized bond premium 100.000% 1,050,308
Less self-supporting issues:
City of San Luis Obispo 2018 Water Revenue Refunding Bonds (7,860,000)
City of San Luis Obispo obligations supported by enterprise revenues (4,260,750)
Total direct debt 18,891,077
207,780,243$
Total direct and overlapping long-term debt
Ratio of long-term debt to assessed valuation and population
Gross Assessed Valuation 11,770,822,169$
Population 47,788
Percent of Gross Per Capita
Amount Assessed Valuation Long-Term Debt
Direct and Overlapping Debt:
Gross 219,900,993$ 1.9%$4,601.59
Net 207,780,243 1.8%4,348
Direct Debt:
Gross 31,011,827$ 0.3%$648.95
Net 18,891,077 0.2%395
Source: California Municipal Statistics, Inc., HdL, Coren & Cone ACFR 2022-23 report - Demographic and Economic Statistics table
Schedule 16
City of San Luis Obispo, California
Direct and Overlapping Long-Term Debt
Fiscal Year Ended June 30, 2023
The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by
determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value.
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2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Legal debt limit 241,812$ 244,175$ 272,833$ 288,836$ 306,738$ 339,464$ 357,044$ 384,339$ 405,847$ 441,406$
Total debt applicable to limit
Legal debt margin 241,812 244,175 272,833 288,836 306,738 339,464 357,044 384,339 405,847 441,406
Total debt applicable to the limit
as a percentage of debt limit 0.00% 0.00% 0.00% 0.00% 0.00%0.00%0.00%0.00%0.00%0.00%
Legal Debt Margin Calculation for Fiscal Year 2022-23
Gross Assessed Valuation 11,770,822,169$
Legal Debt Limit - 3.75% of Gross Assessed Valuation 441,405,831$
Long-term Debt:
Revenue Bonds Secured by Capital Leases 21,040,000$
Water Revenue Bonds 7,860,000
28,900,000
Less deductions allowed by law:
Revenue Bonds Secured by Capital Leases 21,040,000
Water Revenue Bonds 7,860,000
28,900,000
Total debt applicable to computed limit $0
Legal debt margin 441,405,831$
Note: The California Government Code provides for a legal debt limit of 15% of gross assessed valuation based on 25% of market value, or a legal debt limit of 3.75%.
The City's debt management policy, however, sets a more restrictive debt limit of 2% of assessed valuation.
(Amounts Expressed in Thousands)
Last Ten Fiscal Years
Computation of Legal Debt Margin
City of San Luis Obispo, California
Schedule 17
18
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Less Operating & Net Revenue Coverage
Fiscal Operating Development Other Maintenance Available for With
Year Revenues Impact Fees Revenues Expenses Bond Debt Service Principal Interest Total Coverage Impact Fees
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%
2022-23 27,472,542 (3,616,307) 248,134 (18,530,525)5,573,844 1,036,530 449,224 1,485,754 375% 619%
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 Department
FY 2022-23- Debt Schedule for 2021-23 Financial Plan
Schedule 18
City of San Luis Obispo, California
Revenue Bond Coverage - Water Fund
Last Ten Fiscal Years
3. Principal and interest amounts do not include the subordinate private placement loan retired in 2013.
Bonded Debt Service Requirements
1. Debt service requirements include 2012 Refunding Revenue Bonds, 2006 Refunding Revenue Bonds, and the 2004 state revolving loan18
1
Page 515 of 668
Net Revenue
Fiscal Gross Operating Available for
Year Revenues Expenses Bond Debt Service Principal Interest Total Coverage
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%
2022-23 6,022,372 (4,148,805) 1,873,567 265,350 172,159 437,509 428%
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.
FY 2022-23- Debt Schedule for 2021-23 Financial Plan
Schedule 19
City of San Luis Obispo, California
Revenue Bond Coverage - Parking Fund
Last Ten Fiscal Years
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 Requirements
18
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Page 516 of 668
Personal Public Elementary and Cuesta College
Calendar Income Median Secondary School Full Time Enrollment Unemployment
Year Population (1) in 000's (2) Age (2) Enrollment (3)SLO Campus (4) Rate (2)
2013 45,473 1,242 25.3 7,366 5,751 5.7%
2014 45,484 1,191 25.0 7,636 5,116 5.9%
2015 46,117 1,211 25.0 7,638 5,402 4.9%
2016 46,724 1,270 25.4 7,718 4,757 4.5%
2017 46,548 1,300 26.1 7,755 4,988 3.2%
2018 46,802 1,398 26.5 7,813 4,515 2.5%
2019 45,920 1,505 26.2 7,801 4,627 2.4%
2020 47,063 1,625 26.7 7,491 1,114 7.7%
2021 47,653 1,717 26.7 7,537 2,174 5.0%
2022 47,788 1,865 26.0 7,717 2,994 2.6%
Sources:
1. Beginning in 2020, population data source is US Census
2. HdL, Coren & Cone ACFR 2022-23 report - Demographic and Economic Statistics table
4. https://www.cuesta.edu/about/depts/research/Enrollment_Management.html
Post Term FTES Dashboard, 320 Year Reported by academic year start date
Schedule 20
City of San Luis Obispo, California
Demographic and Economic Statistics
For The Last Ten Calendar Years
3. CA Dept of Education DataQuest: Enrollment Reports for San Luis Coastal Unified, by Academic Year start date;
https://www.cde.ca.gov/sdprofile/details.aspx?cds=40688090000000
18
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Percentage Percentage
Number of Total City Number of Total City
Employer Employees Rank Employment Employees Rank Employment
Cal Poly State University 3,178 1 12.46%3,055 1 10.70%
County of San Luis Obispo 2,688 2 10.54%2,465 2 8.80%
Cal Poly Corporation (Foundation)2,478 3 9.72%1,400 5 4.90%
Pacific Gas & Electric Company 2,155 4 8.45%1,900 3 6.70%
California Men's Colony 1,525 5 5.98%1,540 4 5.40%
San Luis Coastal Unified School District 1,311 6 5.14%902 6 3.20%
Cuesta Community College 900 7 3.53%440 9 1.50%
Sierra Vista Regional Medical Center 720 9 2.82%
City of San Luis Obispo 712 10 2.79%
French Hospital Medical Center 637 8 2.50%
Mindbody 650 7 2.30%
California Department or Transportation 544 8 1.90%
Community Action Partnership 410 10 1.40%
Total 15,667 61.44%13,306 46.80%
Source for the 2022-23 employers information is the Major Employers in San Luis Obispo County from State of California
Employment Development Department's website;
https://labormarketinfo.edd.ca.gov/majorer/countymajorer.asp?CountyCode=000079.
2013-14 data is from the City's ACFR.
2013-142022-23
Schedule 21
City of San Luis Obispo, California
Principal Employers
Current Year and Nine Years Ago
61.44%
36.06%
City Wide Employers for 2022-23
Top 10 Employers All Other Employersp
12.46%
10.54%
9.72%8.45%
5.98%
5.14%
3.53%
2.82%
2.79%
2.50%
Top Ten Employers for 2022-23
Cal Poly State University County of San Luis Obispo
Cal Poly Corporation (Foundation)Pacific Gas & Electric Company
California Men's Colony San Luis Coastal Unified School District
Cuesta Community College Sierra Vista Regional Medical Center
City of San Luis Obispo French Hospital Medical Center
184
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Function 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Public Safety
Police
Sworn 60.0 60.0 61.0 61.0 61.5 61.5 64.5 65.0 64.0 64.0
Non-sworn 25.5 25.5 25.5 25.5 24.0 24.0 24.0 25.5 27.0 27.0
Fire
Sworn 49.0 49.0 50.0 47.0 47.0 47.0 47.0 47.0 47.0 47.0
Non-sworn 4.0 4.0 4.0 10.0 10.0 10.0 10.0 9.5 10.5 10.5
Public Utilities 64.8 64.8 67.1 69.1 69.1 69.1 69.1 69.9 70.6 70.6
Transportation 28.9 28.9 36.8 36.8 36.8 36.8 36.8 37.1 43.3 44.3
Culture and recreation 34.0 34.0 35.0 35.0 35.0 35.0 34.0 33.0 43.0 43.0
Community Development 39.5 40.0 51.0 51.0 47.4 47.9 47.5 47.5 54.5 54.5
General Government 56.0 56.0 57.0 61.0 61.0 62.3 64.8 72.3 87.8 87.8
Total 361.7 362.2 387.4 396.4 391.8 393.6 397.7 406.8 447.7 448.7
Ratio of Sworn Police Personnel per 1,000 Population:* 1.32 1.32 1.33 1.31 1.34 1.31 1.34 1.34 1.34 1.34
Ratio of Sworn Fire Personnel per 1,000 Population:*1.08 1.08 1.06 1.01 0.99 1.00 1.02 0.99 0.99 0.99
*Population numbers may not include Cal Poly students or faculty that live on campus and are served by City personnel.
Note: See Schedule of Demographic and Economic Statistics for population data.
Source: City of San Luis Obispo Finance Department
Schedule 22
City of San Luis Obispo, California
Regular Authorized Positions
Last Ten Fiscal Years
18
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2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Function/Program:
Police:
Calls for police/fire service 34,659 36,515 38,300 39,620 39,103 37,825 37,335 40,907 44,183 43,104
Incident numbers issued 29,277 31,048 32,542 33,360 32,730 31,471 31,472 35,695 38,290 36,474
Police reports written 8,665 8,435 8,852 8,675 7,735 6,999 6,297 5,852 6,637 6,137
Violations cited 5,793 6,648 7,673 7,649 7,524 5,874 4,020 3,445 3,735 4,851
Citations issued 5,275 6,204 7,038 7,030 6,752 5,287 3,660 3,056 3,349 4,531
Collision reports 625 630 587 608 609 623 481 419 483 487
Violent crimes:*158 237 173 177 178 191 187 201 225 266
Willful homicide*0 0 0 0 0 1 0 1 2 -
Forcible rape*31 44 29 38 44 55 39 37 25 37
Robbery*26 25 13 21 23 33 34 24 33 37
Aggravated assault*101 168 131 118 111 103 114 139 165 192
Property crimes:*713 542 637 731 644 728 728 793 885 985
Burglary**328 206 225 251 172 244 277 284 272 254
Motor vehicle theft*63 71 87 95 94 74 74 117 174 119
Larceny-theft:*1,384 1,162 1,335 1,730 1,516 1,493 1,387 1,219 1,398 1,372
Over $400*322 265 325 385 378 410 377 392 439 612
$400 and under*1,062 897 1,010 1,345 1,138 1,083 1,010 827 959 760
Fire:
Medical responses (Note 1)3,232 3,417 3,540 4,538 4,248 3,715 3,884 3,544 3,857 4,675
Fire suppression responses (Note 1)105 111 151 143 163 122 127 133 136 146
Hazardous materials responses (Note 1 and 3)15 21 22 21 17 25 29 98 133 153
Other responses (Note 1)1,840 1,929 2,158 1,799 1,785 2,100 2,140 1,745 2,097 2,417
Total service responses 5,192 5,478 5,871 6,501 6,213 5,962 6,180 5,520 6,223 7,391
Fire Suppression Training Hours 8,782 8,149 6,714 6,348 7,719 8,410 10,835 11,033 16,015 20,814
Fire and life-safety inspections (Note 4)644 2,476 2,516 3,756 3,738 2,002 3,128 1,871 2,092 1,790
Arson investigations (Note 2)44 17 44 8 12 24 21 13 5 17
Education activities (# of people)23,945 23,697 23,680 23,575 23,540 2,690 2,700 2,031 2,000 3,500
Public Utilities:
Water/Sewer customer accounts 14,899 14,953 15,167 15,188 15,505 15,555 15,672 15,958 16,256 16,703
Miles of sewerline 137 137.6 137.6 138 143 143 146 148 148 148
Miles of waterline 187 *187 191 197 187 190 191 191 191 191
Water service line repairs and renewals (incl. recyc 58 60 50 50 57 38 48 35 47 53
Sewer main stoppages 15 13 11 4 10 8 11 14 12
Acre feet of water delivered - Nacimiento 1506 839 3574 3817 3753 3484 1470 2449 4460 2,096
Acre feet of water delivered - Salinas 1,444 1,986 8 273 853 790 2,165 1,337 650 949
Acre feet of water delivered - Whale Rock 3,212 2,615 1,375 949 924 800 1,556 1,641 399 2,118
Continued
Schedule 23
City of San Luis Obispo, California
Operating Indicators and Capital Asset Statistics by Function
Last Ten Fiscal Years
18
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Page 520 of 668
Schedule 23
City of San Luis Obispo, California
Operating Indicators and Capital Asset Statistics by Function
Last Ten Fiscal Years
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Function/Program:
Transportation:
Signals and lights:
Intersections with traffic signals 70 68 70 70 70 70 70 72 73 73
Traffic signal service requests 85 80 85 90 60 71 59 93 145 188
Streetlights operated & maintained 2,300 2,300 2,300 2,300 2,280 2,280 2,280 2,400 2,477 2,531
Streetlight service requests 180 175 45 50 13 8 11 33 47 61
Roadways:
Estimated miles of paved streets 133 133 133 133 134 197 134 137 135 148
Pavement condition index 72 72 71 71 70 73 70 73 70 76
Traffic collisions 660 720 531 482 501 431 441 259 361 388
Parking spaces provided (lot, garage & street) 3,119 3,176 2,953 2,892 2,871 2,865 2,865 2,765 2,817 2,607
Parking citations written 23,957 20,690 24,213 23,348 21,647 24,415 21,240 17,748 39,254 44,439
Total transit passengers 1,122,000 1,099,274 1,209,708 1,131,716 945,288 981,995 715,380 179,456 528,000 515,007
Leisure, Cultural and Social Services (Note 5):
Open space acres maintained 3,510 3,510 3,510 3,510 3,775 4,040 4,040 4,040 4,040 4,040
Open space easement acres 3,200 3,200 3,200 3,200 3,200 3,500 3,500 3,500 3,500 3,500
Trail mileage 49 49 52 52 55 55 56 62 65 65
Total golf rounds played 34,766 33,674 30,572 28,196 35,670 24,662 16,428 24,222 17,991 16,392
Acres of park landscape maintained 157 157 157 157 500 570 530 106 106 107
City Maintained Trees 18,700 19,000 20,000 20,000 20,000 20,000 20,000 12,970 12,970 12,976
Children's services program enrollment totals 2,338 2,360 2,115 2,115 1,950 2,050 1,775 1,483 1,611 1,834
Annual Senior Center Membership 265 331 350 315 192 248 325
Facility permits processed 1,416 836 1,305 1,073 864 909 650 298 455 714
Annual aquatics attendance (total)73,903 83,107 68,403 96,687 97,701 87,690 55,202 51,235 62,224 66,621
Adult athletic teams registered 338 320 325 325 362 292 184 112 168 167
Youth athletic participants registered 1,200 1,350 1,300 1,150 1,115 1,140 618 611 1,083 1,180
Special event applications processed 103 103 77 101 88 95 40 2 37 45
Banner permits processed 82 47 87 56 45 81 78 48 26 80
Instructional class enrollments 1,424 1,751 1,151 1,724 1,439 1,118 595 626 1,212 900
Continued
Continued
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Schedule 23
City of San Luis Obispo, California
Operating Indicators and Capital Asset Statistics by Function
Last Ten Fiscal Years
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Function/Program:
Community Development (Note 6):
Housing characteristics:
Single family units (annually cumulative) 10,994 11,133 11,230 11,306 11,413 11,510 11,693 11,853 12,072 12,169
2-4 units (annually cumulative)2,656 2,692 2,695 2,789 2,851 2,865 2,869 2,888 2,928 2,977
5 or more unit structures (annually cumulative) 5,647 5,767 5,804 6,038 6,097 6,148 6,209 6,309 6,524 6,678
Mobile homes (annually cumulative)1,482 1,482 1,482 1,482 1,482 1,482 1,483 1,483 1,483 1,448
Total (annually cumulative)20,779 21,074 21,211 21,615 21,843 22,005 22,254 22,533 23,007 23,272
Building permits issued (Note 7):511 597 584 584 623
Residential:
Single family residential incl. condos 59 114 97 62 125 159 171 253 202 157
Multi-family residential (includes second units &8 32 5 13 18 19 17 33 16 24
Non-residential 9 27 13 14 10 15 12 2 3 11
Additions, alterations, demolitions 458 460 522 545 502 381 510 371 366 415
Other improvements (motel rooms)1 60
Total 534 633 637 634 655 575 710 659 587 667
Approximate value of building permits (in thousands)
Residential:
Single family residential 15,412$ 36,722$ 26,441$ 15,024$ 19,707$ 24,300$ 28,026$ 50,758$ 35,824$ 31,058
Multi-family residential 6,744$ 26,499$ 13,500$ 8,172$ 17,249$ 21,162$ 33,606$ 10,545$ 56,085$ 20,985
Non-residential 15,310$ 9,791$ 11,484$ 51,110$ 6,248$ 20,430$ 16,981$ 17,475$ 22,665$ 44,601
Other permits:
Additions, alternations, demolitions (incl. swimm 19,139$ 22,897$ 30,230$ 27,711$ 14,928$ 34,596$ 60,812$ 78,780$ 29,207$ 58,766
Total 56,605$ 95,909$ 81,655$ 102,017$ 58,132$ 100,488$ 139,425$ 157,558$ 143,783$ 155,410
Building inspections conducted 8,996 6,641 7,195 10,745 9,974 7,537 8,670 7,959 10,470 10,423
Home occupation permits processed/applied for 129 113 163 144 112 112 131 133 140 101
Development permit applications received 311 293 253 236 215 215 338 269 282 157
Continued
Continued
18
8
Page 522 of 668
Schedule 23
City of San Luis Obispo, California
Operating Indicators and Capital Asset Statistics by Function
Last Ten Fiscal Years
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Function/Program:
General Government:
Business tax certificates issued:
Located outside City limits 1,472 1,602 2,018 1,699 1,872 1,948 1,839 1,913 1,932 2,057
Total certificates issued 6,934 7,805 7,597 8,118 8,230 8,205 7,675 7,732 8,371 8,531
Citywide recruitments (total)105 129 103 103 97 99 86 90 155 142
Fleet vehicles maintained
City-wide fleet & equipment assets 290 300 318 323 339 338 340 345 347 365
Replaces prior category
Telephone lines managed 995 1,037 1,005 998 907 971 963 1,071 1,101 1,101
Cell phones & modems supported 383 460 453 476 492 481 487 464 538 595
IT users supported 490 511 515 467 471 488 475 487 511 560
1. 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 Investigations
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.
7. Excludes special permits such as plumbing, mechanical, electrical, signs, and grading as well as plan check permits.
Source: City of San Luis Obispo Departments
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.
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.
Continued
3. 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.
18
9
Page 523 of 668
Fiscal Historic Increase/ Sales Increase/ Deliveries Increase/
Year Connections (Decrease) Revenues (Decrease) In Acre Feet (Decrease)
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%
2022-23 16,703 2.75% 23,297,077 -3.45% 5,130 (11%)
Source: City of San Luis Obispo Utilities Department.
Schedule 24
City of San Luis Obispo, California
Water System
Statistical Data
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
Sales Revenues
-5.00%
0.00%
5.00%
10.00%
15.00%
Revenue Increase/Decrease
190
Page 524 of 668
As of Monthly Multi-family Single family
June 30 of Each Year Consumption Price per hcf*
dwelling Commercial Landscape dwelling Multi-family dwelling Commercial
2014 Base Fee 5.28$ $7.73 min. charge per $7.73 min. charge per $7.73 min. charge per
1-8 hcf 6.56 dwelling unit dwelling unit dwelling unit
8 + hcf 8.20 $8.52/unit volume charge** $8.52/unit volume charge** $8.52/unit volume charge
2015 Base Fee 9.98$ $7.96 min. charge per $7.96 min. charge per $7.96 min. charge per
1-8 hcf 6.92 dwelling unit dwelling unit dwelling unit
8 + hcf 8.65 $8.77/unit volume charge** $8.77/unit volume charge** $8.77/unit volume charge
2016 Base Fee 9.98$ $8.32 min. charge per $8.32 min. charge per $8.32 min. charge per
Base Fee Drought Surcharg 0.74 dwelling unit dwelling unit dwelling unit
1-8 hcf 6.92 $9.17/unit volume charge** $9.17/unit volume charge** $9.17/unit volume charge
Drought Surcharge 1.10
9 + hcf 8.65
Drought Surcharge 1.37
2017 Base Fee 9.98$ $8.57 min. charge per $8.57 min. charge per $8.57 min. charge per
Base Fee Drought Surcharg 0.74 dwelling unit dwelling unit dwelling unit
1-8 hcf 6.92 $9.44/unit volume charge** $9.44/unit volume charge** $9.44/unit volume charge
Drought Surcharge 1.10
9 + hcf 8.65
Drought Surcharge 1.37
2018 Base Fee 12.33$ $8.57 min. charge per $8.57 min. charge per $8.57 min. charge per
1-8 hcf 7.27 dwelling unit dwelling unit dwelling unit
9 + hcf 9.08 $9.44/unit volume charge** $9.44/unit volume charge** $9.44/unit volume charge
2019***Residential SFR Base Fee 20.61$ Base fee determined Base fee determined Base fee determined Base fee determined Base fee determined Base fee determined
1-5 hcf 5.90 by meter size**** by meter size**** by meter size**** by meter size **** by meter size **** by meter size ****
6-12 hcf 6.87 $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** $7.85/unit volume charge**
13 + 12.59
2020 Residential SFR Base Fee 21.74$ Base fee determined Base fee determined Base fee determined Base fee determined Base fee determined Base fee determined
1-5 hcf 6.22 by meter size**** by meter size**** by meter size**** by meter size ****by meter size ****by meter size ****
6-12 hcf 7.25 $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** $8.28/unit volume charge**
13 + 13.28
2021 Residential SFR Base Fee 22.52$ Base fee determined Base fee determined Base fee determined Base fee determined Base fee determined Base fee determined
1-5 hcf 6.44 by meter size**** by meter size**** by meter size**** by meter size **** by meter size **** by meter size ****
6-12 hcf 7.51 $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 $8.58/unit volume charge
13 + 13.76
Continued
Schedule 25
City of San Luis Obispo, California
Water and Sewer Rates
Last Ten Fiscal Years
Water Rates (Note 1)Sewer Rates (Monthly)
19
1
Page 525 of 668
Schedule 25
City of San Luis Obispo, California
Water and Sewer Rates
Last Ten Fiscal Years
As of Monthly
Multi-family Single family
June 30 of Each Year Consumption Price per hcf*
dwelling Commercial Landscape dwelling Multi-family dwelling Commercial
2022 Residential SFR Base Fee 23.31$ Base fee determined Base fee determined Base fee determined Base fee determined Base fee determined Base fee determined
1-5 hcf 6.67 by meter size**** by meter size**** by meter size**** by meter size **** by meter size **** by meter size ****
6-12 hcf 7.77 $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 charge
2023 Residential SFR Base Fee 24.12 Base fee determined Base fee determined Base fee determined Base fee determined Base fee determined Base fee determined
1-5 hcf 6.9 by meter size**** by meter size**** by meter size**** by meter size ****by meter size ****by meter size ****
6-12 hcf 8.04 $7.88/unit volume charge $9.57/unit volume charge$11.73/unit volume charge $9.19/unit volume charge $9.19/unit volume charge $9.19/unit volume charge
13 + 14.74
*hcf = 100 cubic feet
** Total monthly volume charge capped based on average winter water consumption.
*** Beginning FY 18-19, different rate structures for SFR, Multi-Family, Commercial, and Landscape
****See table below
*****2020-21 rate increase deferred to February 1, 2021 due to COVID-19
Notes:
1. Rates are for services inside the City, outside the City rates are double.
2. Third tier applies only to single-family residential customers.
Source: City of San Luis Obispo Utilities Department
3-inch 217.44 197.18
4-inch 362.45 328.70
6-inch 724.73 657.19
8-inch 1,159.60 1,051.54
10-inch 1,511.75
2021*****3/4 inch or less 22.52$ 20.43$ 2022 3/4 inch or less 23.31$ 21.15$
1-inch 37.60 34.12 1-inch 38.92 35.31
1.5-inch 75.04 68.02 1.5-inch 77.67 70.40
2-inch 120.06 108.88 2-inch 124.26 112.69
3-inch 225.27 204.28 3-inch 233.15 211.43
4-inch 375.50 340.53 4-inch 388.64 352.45
6-inch 750.82 680.85 6-inch 777.10 704.68
8-inch 1,201.35 1,089.40 8-inch 1,243.40 1,127.53
10-inch - 1,566.17 10-inch - 1,620.99
Water Rates (Note 1)Sewer Rates (Monthly)
Continued
19
2
Page 526 of 668
Service Water Use Percent of
Name Type (acre-feet) Total
City of San Luis Obispo Parks & Golf Landscape 83.77 1.6%
Silver City Mobile Home Park Mobile Homes 54.83 1.1%
Dignity Health #366 Care Facilities 41.49 0.8%
Creekside Community Mobile Homes 30.83 0.6%
Sierra Vista Hospital Care Facilities 29.45 0.6%
ELL-CAP 97-Laguna Lake Community Mobile Homes 28.35 0.6%
Embassy Suites Hotel 27.96 0.5%
SLO Coastal Unified School 24.77 0.5%
CAP VIII - Mustang Village LLC Apartments 22.42 0.4%
Fiero Lane Water Co Utility 17.89 0.3%
All Other 92.9%
Total 361.76 100.00%
Source: City of San Luis Obispo - Utilities Department
Schedule 26
City of San Luis Obispo, California
Water System - Ten Largest Water Users
Fiscal Year Ended June 30, 2023
1.6%
1.1%
0.8%0.6%
0.6%
0.6%
0.5%
0.5%
0.4%
0.3%
Ten Largest Water Users
City of San Luis Obispo Parks & Golf
Silver City Mobile Home Park
Dignity Health #366
Creekside Community
Sierra Vista Hospital
ELL-CAP 97-Laguna Lake Community
Embassy Suites
SLO Coastal Unified
CAP VIII - Mustang Village LLC
Fiero Lane Water Co
0
92.9%
7.1%
Ten Largest Water Users vs All
Other Water Users
All Other
Top 10
193
Page 527 of 668
Page 528 of 668
City of San Luis
Obispo
San Luis Obispo, California
Single Audit Reports
For the year ended June 30, 2023
Page 529 of 668
Page 530 of 668
City of San Luis Obispo
Single Audit Reports
For the year ended June 30, 2023
Table of Contents
Page
Report on Internal Control over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards .................................................................... 1
Report on Compliance for Each Major Federal Program and on
Internal Control over Compliance in Accordance with the Uniform Guidance
And on the xxxxSchedule of Expenditures of Federal Awards......................................................................... 3
Schedule of Expenditures of Federal Awards ..................................................................................................... 7
Notes to the Schedule of Expenditures of Federal Awards .............................................................................. 8
Schedule of Findings and Questioned Costs ....................................................................................................... 9
Page 531 of 668
Page 532 of 668
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND
OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
Independent Auditor’s Report
To the Honorable Mayor and Members of City Council
of the City of San Luis Obispo
San Luis Obispo, California
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards issued
by the Comptroller General of the United States, the 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, 2023, and the related notes to the
financial statements, which collectively comprise the City’s basic financial statements and have issued our
report thereon dated December 15 , 2023.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control
over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in
the circumstances for the purpose of expressing our opinions on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not
express an opinion on the effectiveness of the City’s internal control.
Our consideration of internal control over financial reporting was for the limited purpose described in the
preceding paragraph and was not designed to identify all deficiencies in internal control that might be
material weaknesses or significant deficiencies and therefore, material weaknesses or significant
deficiencies may exist that have not been identified. However, as described in the accompanying schedule
of findings and responses, we identified certain deficiencies in internal control that we consider to be
material weaknesses and significant deficiencies.
A deficiency in internal control exists when the design or operation of a control does not allow management
or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in
internal control such that there is a reasonable possibility that a material misstatement of the entity’s
financial statements will not be prevented, or detected and corrected on a timely basis. We consider the
deficiencies described in the accompanying schedule of findings and questioned costs as item 2023-001 to
be material weaknesses.
Page 533 of 668
To the Honorable Mayor and Members of City Council
of the City of San Luis Obispo
San Luis Obispo, California
Page 2
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe
than a material weakness, yet important enough to merit attention by those charged with governance. We
consider the deficiencies described in the accompany schedule of findings and questioned costs as item
2023-002 to be significant deficiencies.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
financial statements. However, providing an opinion on compliance with those provisions was not an
objective of our audit, and accordingly, we do not express such an opinion. The results of our tests
disclosed no instances of noncompliance or other matters that are required to be reported under Government
Auditing Standards.
City of San Luis Obispo’s Response to Findings
Government Auditing Standards requires the auditor to perform limited procedures on the City’s response to
the findings identified in our engagement and described in the accompanying schedule of findings and
questioned costs. City’s response was not subjected to the auditing procedures applied in the audit of the
financial statements and, accordingly, we express no opinion on the response.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this
communication is not suitable for any other purpose.
Badawi & Associates, CPAs
Berkeley, California
December 15, 2023
2
Page 534 of 668
REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL
OVER COMPLIANCE IN ACCORDANCE WITH THE UNIFORM GUIDANCE AND ON THE
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Independent Auditor’s Report
To the Honorable Mayor and Members of City Council
of the City of San Luis Obispo
San Luis Obispo, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited the City of San Luis Obispo, California’s (City) compliance with the types of compliance
requirements described in the OMB Compliance Supplement that could have a direct and material effect on
each of the City’s major federal programs for the year ended June 30, 2023. The City’s major federal
programs are identified in the summary of auditor’s results section of the accompanying schedule of
findings and questioned costs.
In our opinion, the City complied, in all material respects, with the types of compliance requirements
referred to above that could have a direct and material effect on each of its major federal programs for the
year ended June 30, 2023.
Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States of America (GAAS) ; the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States(Government Auditing Standards);
and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our
responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s
Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance
with 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 opinion on compliance for each major
federal program. Our audit does not provide a legal determination of the City’s compliance with the
compliance requirements referred to above.
Page 535 of 668
To the Honorable Mayor and Members of City Council
of the City of San Luis Obispo
San Luis Obispo, California
Page 2
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design,
implementation, and maintenance of effective internal control over compliance with the requirements of
laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the City’s
federal programs.
Auditor’s Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the
compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion
on the City’s compliance based on our audit. 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,
Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when
it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that
resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or
the override of internal control. Noncompliance with the compliance requirements referred to above is
considered material if there is a substantial likelihood that, individually or in the aggregate, it would
influence the judgment made by a reasonable user of the report on compliance about the City’s compliance
with the requirements of each major federal program as a whole.
In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform
Guidance, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material noncompliance, 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 City’s compliance with the compliance requirements referred to above and
performing such other procedures as we considered necessary in the circumstances.
• Obtain an understanding of the City’s internal control over compliance relevant to the audit in order to
design audit procedures that are appropriate in the circumstances and to test and report on internal control
over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an
opinion on the effectiveness of the City’s internal control over compliance. Accordingly, no such opinion is
expressed.
We are required to communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal
control over compliance that we identified during the audit.
4
Page 536 of 668
To the Honorable Mayor and Members of City Council
of the City of San Luis Obispo
San Luis Obispo, California
Page 3
Report on Internal Control over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a
federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a
combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility
that material noncompliance with a type of compliance requirement of a federal program will not be
prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over
compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of
compliance requirement of a federal program that is less severe than a material weakness in internal control
over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the
Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all
deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies
in internal control over compliance. Given these limitations, during our audit we did not identify any
deficiencies in internal control over compliance that we consider to be material weaknesses, as defined
above. However, material weaknesses or significant deficiencies in internal control over compliance may
exist that were not identified.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control
over compliance. Accordingly, no such opinion is expressed.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing
of internal control over compliance and the results of that testing based on the requirements of the Uniform
Guidance. Accordingly, this report is not suitable for any other purpose.
Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance
We have audited the financial statements of the governmental activities, the business-type activities, each
major fund, and the aggregate remaining fund information of the City, as of and for the year ended June 30,
2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial
statements. We issued our report thereon dated December 15, 2023, which contained unmodified opinions
on those financial statements. Our audit was conducted for the purpose of forming opinions on the
financial statements that collectively comprise the basic financial statements. The accompanying schedule of
expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform
Guidance and is not a required part of the basic financial statements. Such information is the responsibility
of management and was derived from and relates directly to the underlying accounting and other records
used to prepare the basic financial statements. The information has been subjected to the auditing
procedures applied in the audit of the 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
5
Page 537 of 668
To the Honorable Mayor and Members of City Council
of the City of San Luis Obispo
San Luis Obispo, California
Page 4
America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material
respects in relation to the basic financial statements as a whole.
Badawi & Associates, CPAs
Berkeley, California
December 15, 2023
6
Page 538 of 668
City of San Luis Obispo
Schedule of Expenditures of Federal Awards
For the year ended June 30, 2023
Assistance State
Listing Pass-throughProgram Subrecipient
Grantor Agency and Grant Title Number Number Expenditures Payments
U.S. Department of Transportation
Highway Planning and Construction Cluster
Passed Through the State of California Department of Transportation
Highway Planning and Construction 20.205 HSIPL - 5016(053)1,514$ -$
Subtotal Highway Planning and Construction Cluster 1,514 -
Federal Transit Cluster
Direct Program:
Federal Transit Formula Grants 20.507 4,083,165 -
Subtotal Federal Transit Cluster 4,083,165 -
Total U.S. Department of Transportation 4,084,679 -
U.S. Department of Justice
Direct Programs:
Bulletproof Vest Partnership Program 16.607 7,546
Edward Bryne Memorial Justice Assistance Grant Program 16.738 14,941 -
Total U.S. Department of Justice 22,487 -
U.S. Department of Housing and Urban Development
CDBG-Entitlement Grants Cluster
Passed Through County of San Luis Obispo
Community Development Block Grants/Entitlement Grants 14.218 B-22-UC-06-0508 34,595 -
Total U.S. Department of Housing and Urban Development 34,595 -
U.S. Department of Health and Human Services
Passed Through California Department of Community Services and Development
Low Income Household Water Assistance Program 93.499 54,488 -
Total U.S. Department of Health and Human Services 54,488 -
U.S. Department of Homeland Security
Direct Program:
FEMA Assistance to Firefighters Grant 97.044 38,473 -
Total U.S. Department of Homeland Security 38,473 -
U.S. Department of the Treasury
Passed through California State Water Resources Control Board
Coronavirus State & Local Fiscal Recovery Funds 21.027 3940COVIDARREAR 148,496 -
Direct Program:
Coronavirus State & Local Fiscal Recovery Funds 21.027 2,500,000 1,700,000
Total U.S. Department of the Treasury 2,648,496 1,700,000
Total Expenditures of Federal Awards 6,883,218$ 1,700,000$
See accompanying Notes to Schedule of Expenditures of Federal Awards.
7
Page 539 of 668
City of San Luis Obispo
Notes to the Schedule of Expenditures of Federal Awards
For the year ended June 30, 2023
A.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 47,788, 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.
B.Basis of Accounting
Funds received under the various grant programs have been recorded within the special revenue funds
of the City. The City utilizes the modified accrual method of accounting for the special revenue funds.
Modified accrual accounting recognizes revenues when they become available and measurable and,
with a few exceptions, recognizes expenditures when liabilities are incurred. The accompanying
Schedule of Expenditures of Federal Awards (Schedule) has been prepared on the modified accrual
basis of accounting.
C.Relationship of Schedule of Expenditures of Federal Awards to Financial Statements
The accompanying Schedule presents the activity of all federal financial assistance programs of the City.
Federal financial assistance received directly from federal agencies as well as federal financial assistance
passed through the State of California is included in the Schedule.
The Schedule was prepared only from the accounts of various grant programs and, therefore, does not
present the financial position or results of operations of the City.
D.Pass-Through Entities’ Identifying Number
When federal awards were received from a pass-through entity, the Schedule shows, if available, the
identifying number assigned by the pass-through entity. When no identifying number is shown, the
City determined that no identifying number is assigned for the program or the City was unable to
obtain an identifying number from the pass-through entity.
E.Indirect Costs
The City did not elect to use the 10% de minimis indirect cost rate.
8
Page 540 of 668
City of San Luis Obispo
Single Audit Reports
Schedule of Findings and Questioned Costs
For the year ended June 30, 2023
Section I - Summary of Auditor’s Results
Financial Statements
Types of auditor’s report issued: Unmodified
Internal control over financial reporting:
Material weakness(es) identified? Yes
Significant deficiency(ies) identified? Yes
Any noncompliance material to the financial statements noted? No
Federal Awards
Internal control over major programs:
Material weakness(es) identified? No
Significant deficiency(ies) identified? None noted
Type of auditor’s report issued on compliance for major programs Unmodified
Any audit findings disclosed that are required to be reported in
Accordance with section 200.516(a) No
Identification of major programs:
Assistance Listing Number(s)Name of Federal Program or Cluster Expenditures
20.507 Federal Transit Formula Grants 4,083,165$
21.027 Coronavirus State & Local Fiscal Recovery Funds 2,648,496
Total Expenditures of All Major Federal Programs 6,731,661$
Total Expenditures of Federal Awards 6,883,218$
Percentage of Total Expenditures of Federal Awards 97.8%
Dollar threshold used to distinguish between type A and type B program $750,000
Auditee qualified as low-risk auditee under
section 200.520? No
9
Page 541 of 668
City of San Luis Obispo
Single Audit Reports
Schedule of Findings and Questioned Costs
For the year ended June 30, 2023
Section II – Current Year Findings
A.Financial Statement Audit Finding
2023-001 Journal Entries Posting (Material Weakness)
Criteria: The access to post journal entries in the general ledger should be restricted. Journal entries should
be independently prepared, reviewed before being posted to the general ledger.
Condition: During the review of the City’s journal entry approval matrix and JE testing, we noted the
posting from the subledger to GL do not require approvals at the general ledger level nor at the subledger
level. Considering the number of employees who can post entries through subledger without review and
the fact that corrections to payroll, payable, revenue/receivables, cash management, capital assets all can be
posted through subledger and do not require approval, it increased the risk of unauthorized or incorrect
journals getting posted into general ledger.
Cause: The City didn’t have control in place to ensure all journal entries are properly reviewed before
posting.
Effect:. Journal entries recorded in the City’s accounting system may be inaccurate, unapproved, or
unsupported.
Recommendation: We recommend that the City limit the number of employees who can post journal entries
in the subledger and general ledger, and implement system control to ensure all journal entries are
reviewed before posting.
Management’s response:
City management concurs with the recommendation and will continue to work with our internal IT team as
well as consultants, to explore how the Oracle ERP system’s workflows can be adjusted to include an
approval process for posting adjusting entries, which are currently system generated and automatically
posted. Approvals for manually generated journal entries were implemented during the prior year and
continue to be in place.
10
Page 542 of 668
City of San Luis Obispo
Single Audit Reports
Schedule of Findings and Questioned Costs
For the year ended June 30, 2023
Section II – Current Year Findings, continued
A. Financial Statement Audit Finding, continued
2023-002 Payroll Module Implementation (Significant Deficiency)
Criteria: An effectively implemented payroll system should process the payroll accurately, and an effective
internal control system over payroll requires timely and accurate payroll processing.
Condition: During the performance of the audit, we noted that –
• The Oracle payroll module has overtime configuration implemented incorrectly, and the City has to
manually track the payroll in a spreadsheet and correct the error as it occurs since the
implementation.
• The configuration of payroll journal entries posting was implemented incorrectly which caused the
variance between the bank record and the City’s general ledger.
Cause: The Oracle payroll module has not been implemented correctly.
Effect: Errors and fraud can go undetected in payroll processing with a large volume of manual corrections
needed.
Recommendation: We recommend the City to work with the third-party vendor to correct the
implementation of payroll module.
Management’s Response:
City Management concurs with the finding and the City has recently entered into a contract with a
consultant to assist with the reconfiguration of the payroll module to correct the overtime calculations and
has completed substantial progress in identifying and testing solutions. This work is expected to resolve the
issue upon completion and will eliminate the current practice involving manual correction of overtime
rates. It is anticipated that this reconfiguration work will be complete during the 2023-24 fiscal year.
11
Page 543 of 668
City of San Luis Obispo
Single Audit Reports
Schedule of Findings and Questioned Costs
For the year ended June 30, 2023
Section II – Current Year Findings, continued
A.Federal Award Program Audit Finding
No findings or questioned costs were noted in the current year.
12
Page 544 of 668
City of San Luis Obispo
Single Audit Reports
Schedule of Findings and Questioned Costs
For the year ended June 30, 2023
Section III – Prior Year Findings
A.Financial Statement Audit Finding
2022-001 Journal Entries Posting (Material Weakness)
Criteria: The access to post journal entries in the general ledger should be restricted. Journal entries should
be independently prepared, reviewed before being posted to the general ledger.
Condition: During the review of the City’s journal entry approval matrix and JE testing, we noted the
posting from the subledger to GL do not require approvals at the general ledger level nor at the subledger
level. Considering the number of employees who can post entries through subledger without review and
the fact that corrections to payroll, payable, revenue/receivables, cash management, capital assets all can be
posted through subledger and do not require approval, it increased the risk of unauthorized or incorrect
journals getting posted into general ledger.
Cause: The City didn’t have control in place to ensure all journal entries are properly reviewed before
posting.
Effect:. Journal entries recorded in the City’s accounting system may be inaccurate, unapproved, or
unsupported.
Recommendation: We recommend that the City limit the number of employees who can post journal entries
in the subledger and general ledger, and implement system control to ensure all journal entries are
reviewed before posting.
Status: Not implemented. See current year finding 2023-001.
13
Page 545 of 668
City of San Luis Obispo
Single Audit Reports
Schedule of Findings and Questioned Costs
For the year ended June 30, 2023
Section III – Prior Year Findings, continued
A. Financial Statement Audit Finding, continued
2022-002 Notes and Loans Receivable Tracking (Material Weakness)
Criteria: The City is responsible for fair presentation of the financial statements in conformity with
accounting principles generally accepted in the United States of America.
Condition: In fy2022, the City posted material prior period adjustments (over $3M) to record affordable
housing loans, which were funded through City’s funds and CDBG. The loans were omitted from the prior
years financial statements by error.
Cause: The loans were omitted due to miscommunication, or lack of communication between city
departments that left the Finance Department unaware of the existence of the loans.
Effect: The financial statements were materially misstated.
Recommendation: We recommend the City to improve communication between Finance Department and
other departments to ensure all financial transactions are captured properly.
Status: None noted in current fiscal year
14
Page 546 of 668
City of San Luis Obispo
Single Audit Reports
Schedule of Findings and Questioned Costs
For the year ended June 30, 2023
Section III – Prior Year Findings, continued
A.Financial Statement Audit Finding, continued
2022-003 Year-End Close and Audit Preparedness (Significant Deficiency)
Criteria: The City is responsible for fair presentation of the financial statements in conformity with
accounting principles generally accepted in the United States of America. In addition, the City is
responsible for the accuracy and completeness of all information provided and maintaining adequate
records for the audit.
Condition:
We received some significant adjustments after being provided the final TB. We listed below some
major post-closing entries we noted:
o Significant adjustments in recording loan receivables
o ARPA revenue was not properly recorded as unearned
o Custodial funds were not tracked properly according to GASB 84
o To correct missing AP accruals
o To correct receivables balances
The schedules initially provided for Receivables (AR, Notes Receivables, Tax Receivables) cannot be
tied to GL and do not have description of what were included in the balances but a list of debit and
credit transactions only.
We had difficulties in our revenue test as the documents the City provided cannot be easily linked to
our requests or missing information that we requested, most of which is because there is no easily
reconcilable documentation from the amounts that post to the general ledger to the original
revenues.
Cause: The City’s closing process was not comprehensive enough to identify timely all the journal entries
and adjustments needed to ensure the accuracy of the various account balances. Also, some information
and documents provided to the auditor were either inaccurate or incomplete.
Effect: The City’s accounting records needed significant adjustments after the closing of the books and
during the audit. Also, the inaccurate and incomplete information provided to the auditor caused delays in
the audit and added more complexity to the audit.
Recommendation: We recommend that the City update its closing process to ensure all transactions and
adjustments are accounted for timely before the audit starts, and have the information and documents
reviewed before submitting to the auditors
Status: Implemented
15
Page 547 of 668
City of San Luis Obispo
Single Audit Reports
Schedule of Findings and Questioned Costs
For the year ended June 30, 2023
Section III – Prior Year Findings, continued
A.Financial Statement Audit Finding, continued
2022-004 Payroll Module Implementation (Significant Deficiency)
Criteria: An effectively implemented payroll system should process the payroll accurately, and an effective
internal control system over payroll requires timely and accurate payroll processing.
Condition: During the performance of the audit, we noted that –
•The Oracle payroll module has overtime configuration implemented incorrectly, and the City has to
manually track the payroll in a spreadsheet and correct the error as it occurs since the
implementation.
•The configuration of payroll journal entries posting was implemented incorrectly which caused the
variance between the bank record and the City’s general ledger.
Cause: The Oracle payroll module has not been implemented correctly.
Effect: Errors and fraud can go undetected in payroll processing with a large volume of manual corrections
needed.
Recommendation: We recommend the City to work with the third-party vendor to correct the
implementation of payroll module.
Status: Not Implemented. See current year finding 2023-002
16
Page 548 of 668
City of San Luis Obispo
Single Audit Reports
Schedule of Findings and Questioned Costs
For the year ended June 30, 2023
Section III - Prior Year Findings, continued
A.Federal Award Audit Finding
No findings or questioned costs were noted in the prior year.
17
Page 549 of 668
Page 550 of 668
City of San Luis Obispo
Transportation
Development Act Funds
Financial Statements
Years Ended
June 30, 2023 and 2022
Page 551 of 668
Page 552 of 668
City of San Luis Obispo,
California
Transportation Development Act Funds
Financial Statements
Years Ended June 30, 2023 and 2022
Page 553 of 668
Page 554 of 668
City of San Luis Obispo,
California Transportation
Development Act Funds
Report and Financial
Statements
Year Ended June 30, 2023 and 2022
Table of Contents
Page
Independent Auditor’s Report .................................................................................................................................................. 1
Balance Sheets – June 30, 2023 and 2022 ................................................................................................................................ 5
Statements of Revenues, Expenditures and Changes in Fund Balance –
Years Ended June 30, 2023 and 2022 ...................................................................................................................................... 6
Statements of Fund Net Position – June 30, 2023 and 2022 ................................................................................................... 7
Statements of Revenues, Expenses and Changes in Fund Net Position –
Years Ended June 30, 2023 and 2022 ...................................................................................................................................... 8
Statements of Cash Flows – Years Ended June 30, 2023 and 2022 ......................................................................................... 9
Notes to Financial Statements ............................................................................................................................................... 11
TDA Fund Supplementary Information
Schedule of Revenues and Expenditures – Budget and Actual –
Years Ended June 30, 2023 and 2022 .................................................................................................................................... 20
Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit
of Financial Statements Performed in accordance with Government Auditing Standards ..................................................... 21
Independent Auditor’s Report on Transportation Development Act Compliance ................................................................. 23
Page 555 of 668
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Page 556 of 668
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 Transportation Development Act (TDA)
Fund and the Transit Fund of the City of San Luis Obispo, California, as of and for the year ended June
30, 2023 and 2022, and the related notes to the 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 TDA Fund and the Transit Fund, as of June 30, 2023 and 2022, and
the respective changes in financial position 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.
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 TDA fund and the Transit
Fund’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.
Page 557 of 668
To the Honorable Mayor and Members of the City Council
of the City of San Luis Obispo
San Luis Obispo, California
Page 2
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 TDA fund and the Transit Fund’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 TDA fund and the Transit Fund’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.
Emphasis of Matter
As discussed in Note 1, the financial statements present only the TDA Fund and the Transit Fund and
do not purport to, and do not, present fairly the financial position of the City, as of June 30, 2023 and
2022, and the changes in its financial position or where applicable, its cash flows for the years ended in
accordance with accounting principles generally accepted in the United States of America. Our opinion
is not modified with respect to this matter.
2
Page 558 of 668
To the Honorable Mayor and Members of the City Council
of the City of San Luis Obispo
San Luis Obispo, California
Page 3
Required Supplementary Information
Management has omitted management’s discussion and analysis that accounting principles generally
accepted in the United States of America require to be presented to supplement the basic financial
statements. Such missing 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. Our opinions on the basic financial statements are not affected by this missing
information.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Transportation Development Act (TDA) Fund and the Transit Fund’s
financial statements. The budgetary comparison schedule is presented for purposes of additional
analysis and is not a required part of the financial statements.
The budgetary comparison schedule on page 21 is the responsibility of management and was derived
from and relate directly to the underlying accounting and other records used to prepare the financial
statements. Such information has been subjected to the auditing procedures applied in the audit of the
financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the financial
statements or to the financial statements themselves, and other additional procedures in accordance
with auditing standards generally accepted in the United States of America. In our opinion, the
budgetary comparison schedule is fairly stated in all material respects in relation to the financial
statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 15,
2023 on our consideration of the TDA fund and the Transit Fund’s internal control over financial
reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and
grant agreements and other matters. The purpose of that report is solely to describe the scope of our
testing of internal control over financial reporting and compliance and the results of that testing, and
not to provide an opinion on the effectiveness of 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 TDA fund and the Transit Fund’s internal control over financial
reporting and compliance.
Badawi and Associates, CPAs
Berkeley, California
December 15, 2023
3
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4
Page 560 of 668
2023 2022
Assets
Cash and investments 8,681$ 8,681$
Total assets 8,681$ 8,681$
Liabilities and Fund Balance
Liabilities
Unearned revenue -$ -$
Total liabilities - -
Fund balances:
Unassigned 8,681 8,681
Total liabilities and fund balance 8,681$ 8,681$
City of San Luis Obispo, California
Transportation Development Act (TDA) Fund
Balance Sheets
June 30, 2023 and 2022
The accompanying notes are an integral part of these financial statements.
5
Page 561 of 668
2023 2022
Revenues - intergovernmental allocations 76,869$ 53,681$
Other financing uses - operating transfers to City of San Luis Obispo (76,869) (45,000)
Excess of revenues over other financing uses - 8,681
Fund balance - beginning of year 8,681 -
Fund balance - end of year 8,681$ 8,681$
City of San Luis Obispo, California
Transportation Development Act (TDA) Fund
Statements of Revenues, Expenditures and Changes in Fund Balance
June 30, 2023 and 2022
The accompanying notes are an integral part of these financial statements.
6
Page 562 of 668
2023 2022
Assets
Current assets:
Cash and investment 7,980,433$ 5,747,671$
Accounts receivable 1,465,809 90
Interest receivable 26,996 10,631
Due from other governments 683,027 1,877,213
Total current assets 10,156,265 7,635,605
Capital assets:
Infrastructure 110,972 110,972
Buildings and improvements 5,212,278 5,212,278
Transit operating equipment 9,006,717 9,021,099
Construction in progress 2,408,227 83,058
Total capital assets 16,738,194 14,427,407
Less accumulated depreciation (10,373,759) (9,928,541)
Total capital assets, net of accumulated depreciation 6,364,435 4,498,866
Total assets 16,520,700 12,134,471
Deferred Outflows of Resources
Pension related 223,664 145,137
Other post‐employment benefits related 25,046 18,309
Total deferred outflows of resources 248,710 163,446
Liabilities
Current liabilities:
Accounts payable 915,768 470,446
Accrued salaries and compensated absences 31,477 20,512
Unearned revenues 7,009,295 4,301,164
Total current liabilities 7,956,540 4,792,122
Noncurrent liabilities:
Compensated absences, net of current portion 5,630 7,029
Net pension liability 771,572 555,660
Net other post‐employment benefits liability 43,984 30,808
Total noncurrent liabilities 821,186 593,497
Total liabilities 8,777,726 5,385,619
Deferred Inflows of Resources
Pension related 2,280 142,711
Other post‐employment benefits related 10,643 23,824
Total deferred inflows of resources 12,923 166,535
Net Position
Net investment in capital assets 6,364,435 4,498,866
Restricted 1,614,326 2,246,897
Total net position 7,978,761$ 6,745,763$
City of San Luis Obispo, California
Transit Fund
Statements of Fund Net Position
June 30, 2023 and 2022
The accompanying notes are an integral part of these financial statements.
7
Page 563 of 668
2023 2022
Operating revenues:
Passenger fares 206,521$ 172,957$
Special transit fares 600,000 537,500
Other revenue 3,448 3,320
Total operating revenues 809,969 713,777
Operating expenses:
Purchased transportation 2,387,952 2,076,933
Other transportation services 702,098 596,413
Fuel and lubricants 365,359 340,952
Other materials and supplies 12,691 5,638
Salaries and wages 142,243 186,668
Fringe benefits 47,276 42,614
General and administrative 365,544 226,183
Depreciation 459,600 375,863
Total operating expenses 4,482,763 3,851,264
Operating loss (3,672,794) (3,137,487)
Nonoperating revenues:
Transportation Development Act operating grants 714,539 1,324,557
Federal Transit Administration operating grants 2,743,473 1,877,213
Federal Transit Administration capital and planning grants 1,339,692 -
SGR 8,722 8,468
Interest 99,366 (134,748)
Total nonoperating revenues 4,905,792 3,075,490
Change in net position 1,232,998 (61,997)
Net position - beginning of year 6,745,763 6,807,760
Net position - beginning of year, as restated 6,745,763 6,807,760
Net position - end of year 7,978,761$ 6,745,763$
City of San Luis Obispo, California
Transit Fund
Statements of Revenues, Expenses and Changes in Net Position
Years Ended June 30, 2023 and 2022
The accompanying notes are an integral part of these financial statements.
8
Page 564 of 668
2023 2022
Cash flows from operating activities:
Cash received from customers 3,246,567$ 2,710,830$
Cash payments to suppliers for goods and services (3,022,778) (3,000,375)
Cash payments to General Fund for interfund services (365,544) (226,183)
Cash payments to employees for services (189,741) (339,057)
Net cash used in operating activities (331,496) (854,785)
Cash flows from noncapital financing activities:
Operating grants received 4,806,426 3,210,238
Net cash provided by noncapital financing activities 4,806,426 3,210,238
Cash flows from capital and related financing activities:
Acquisition and construction of capital assets (2,325,169) (80,878)
Net cash used in capital and related financing activities (2,325,169) (80,878)
Cash flows from investing activities:
Interest on investments 83,001 (136,978)
Net cash provided by (used in) investing activities 83,001 (136,978)
Net increase (decrease) in cash and cash equivalents and investments 2,232,762 2,137,597
Cash and cash equivalents and investments - beginning of year 5,747,671 3,610,074
Cash and cash equivalents and investments - end of year 7,980,433$ 5,747,671$
City of San Luis Obispo, California
Transit Fund
Statements of Cash Flows
Years Ended June 30, 2023 and 2022
The accompanying notes are an integral part of these financial statements.
9
Page 565 of 668
2023 2022
Reconciliation of operating loss to net cash used in operating activities:
Operating loss (3,672,794)$ (3,137,487)$
Adjustments to reconcile operating loss to net cash used in operating activities:
Depreciation 459,600 375,863
Changes in operating assets, deferred outflows, liabilities,
and deferred inflows:
Accounts receivable (271,533) 931,620
Accounts payable 445,322 19,561
Unearned revenue 2,708,131 1,065,433
Accrued salaries and compensated absences 9,566 (1,095)
Pension related deferred outflows and inflows and net pension liability (3,046) (99,208)
OPEB related deferred outflows and inflows and net OPEB liability (6,742) (9,472)
Net cash used in operating activities (331,496)$ (854,785)$
Reconciliation of cash and cash equivalents and investments to the statement
of fund net position:
Cash and investment 7,980,433$ 5,747,671$
Total cash and cash equivalents and investments 7,980,433$ 5,747,671$
Non cash transactions
Gain (loss) on sale of capital assets -$ -$
Statements of Cash Flows, Continued
Years Ended June 30, 2022 and 2021
City of San Luis Obispo, California
Transit Fund
The accompanying notes are an integral part of these financial statements.
10
Page 566 of 668
City of San Luis Obispo, California
Transportation Development Act (TDA) Fund and Transit Fund
Notes to the Financial Statements
June 30, 2023 and 2022
Note 1 - The Reporting Entity
The City of San Luis Obispo (the City) operates a fixed route public transportation system within the City limits and to the
California Polytechnic State University (Cal Poly). Vehicle operations and vehicle maintenance are provided under contract by a
private transportation company. Nonvehicle-related support and administrative services are provided by City staff.
The Transportation Development Act (TDA) Fund (the Fund) of the City of San Luis Obispo, California (the City) is a special
revenue fund created by resolution of the City Council to account for the revenues received pursuant to the TDA. Such revenues
allocated under specific state statutes are legally restricted to financial expenditures made of the development and construction of
local streets and roads, including pedestrian and bicycle facilities.
The Transit Fund is an enterprise fund of the City created by resolution of the City Council to account for the revenues received
pursuant to the Transportation Development Act (TDA), Federal Transit Authority (FTA) and the revenues received from the
transit operations described above. Such revenues are allocated under specific statutes and are legally restricted to finance
expenditures made for transit operations, the development of public transportation systems and transportation planning. When both
restricted and unrestricted resources are available for the same purpose, it is the City’s policy to use restricted funds first.
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Measurement Focus, Basis of Accounting and Basis of Presentation
The Transportation Development Act (TDA) Fund’s financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized when measurable and available.
Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay the
liabilities of the current period. For this purpose, the City considers interest and grant revenues earned but not received as
susceptible to accrual under this method. Expenditures are generally recognized at the time liabilities are incurred.
The Transit Fund’s financial statements are reported using the economic resources measurement focus and the accrual basis of
accounting. Revenues are recognized when earned and expenses are recognized when incurred regardless of the timing of related
cash flows. The Fund distinguishes operating revenues and expenses from nonoperating items. Operating revenues and expenses
generally result from providing services in connection with the Fund’s principal ongoing operations. The principal operating
revenues of the Fund are charges to customers for transit services. Operating expenses for the Fund include cost of services,
administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as
nonoperating revenues and expenses, including non-exchange transactions such as TDA and FTA grants.
Non-exchange transactions, in which the Transit Fund receives value without directly giving equal value in return, include grants.
Revenue from grants is recognized in the fiscal year in which all eligibility requirements have been satisfied. Eligibility
requirements include timing requirements, which specify the fiscal year when the resources are to be used or the fiscal year when
use is first permitted; matching requirements, in which the Transit Fund must provide local resources to be used for a specific
purpose; and expenditures requirements, in which the resources are provided to the Transit Fund on a reimbursement basis.
Annual Financial Statements
The financial statements of the Transportation Development Act (TDA) Fund and the Transit Fund are intended to reflect the
financial position; results of operations and cash flows where applicable in conformity with generally accepted accounting
principles and are not intended to present the financial position, results of operations, or cash flows of the City of San Luis Obispo,
California.
11
Page 567 of 668
City of San Luis Obispo, California
Transportation Development Act (TDA) Fund and Transit Fund
Notes to the Financial Statements
June 30, 2023 and 2022
Page 2
Note 2 - Summary of Significant Accounting Policies, Continued
Measurement Focus, Basis of Accounting and Basis of Presentation
Special Revenue Fund – Transportation Development Act Fund
This fund is used to account for the City’s share of Transportation Development Act (TDA) Article 3 funds that are legally
restricted for the improvement and maintenance of street systems including pedestrian and bicycle facilities. 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.
Enterprise Fund - Transit
This fund is used to account for the operation and maintenance of the City’s transit system. TDA Article 4 and FTA allocations
for transit operations are accounted for in this fund.
Cash, Cash Equivalents, and Investments
Cash and cash equivalents consist of cash on hand, cash balances in checking and money market accounts and short- term
investments, with an original maturity of three months or less. Investments which are in the City’s internal investment pool are
also treated as cash equivalents for the purposes of the statement of cash flows.
Amounts Due from Other Governments
Generally, amounts due from other governments are recorded as revenues when earned. However, when the use of funds is the
prime factor for determining eligibility for grants, revenue is accrued when the related expenses have been made on an approved
grant.
Capital Assets
Capital assets are recorded at cost and depreciated using the straight-line method over their estimated useful lives, ranging from 5
to 20 years. Capital assets are defined by the City as assets with an initial, individual cost of more than $25,000. Detailed capital
assets can be found in Note 5.
Net Pension Liability, Deferred Outflows and Deferred Inflows
The City recognizes a net pension liability, which represents the City’s 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 City has allocated a proportionate share of the net pension liability, deferred outflows, deferred
inflows and pension expense to the Transit Fund. 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.
12
Page 568 of 668
City of San Luis Obispo, California
Transportation Development Act (TDA) Fund and Transit Fund
Notes to the Financial Statements
June 30, 2023 and 2022
Page 3
Note 2 - Summary of Significant Accounting Policies, Continued
Other Post-Employment Benefits (OPEB) Liability, Deferred Outflows and Deferred Inflows
For purposes of measuring net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB,
and OPEB expense, information about the fiduciary net position of the City’s plan (OPEB Plan), and additions to or deductions
from the OPEB Plan’s fiduciary net position, have been determined on the same basis as they are reported by the California
Employer’s Retiree Benefit Trust Program (CERBT). For this purpose, benefit payments (including refunds of employee
contributions) are recognized when currently due and payable in accordance with benefit terms. Investments are reported at fair
value.
Generally accepted accounting principles require that the reported OPEB results must pertain to liability and asset information
within certain defined timeframes. For this report, the following timeframes are used:
Valuation Date June 30, 2021
Measurement Dates June 30, 2022 and 2021
Measurement Periods July 1, 2021 to June 30, 2022,
and July 1, 2020 to June 30, 2021
Fund Balance
The TDA Fund’s financial statements report fund balance 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. The Fund
does not have a fund balance in the current fiscal year, therefore classification is not necessary. However, GASB Statement No.
54, Fund Balance Reporting and Governmental Fund Type Definitions, identifies five components of fund balance –
nonspendable, restricted, committed, assigned and unassigned.
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. Also included in this component are encumbrances which represent legal and binding
obligations for the acquisition of future goods and services. Those committed amounts established by minute order cannot be used
for any other purpose unless the City Council adopts a new minute order so directing. With respect to encumbered amounts, the
City may take steps to cancel the order for goods or services and thereby terminate the obligation.
Assigned - This component consists of amounts that are constrained by the City’s intent to be used for specific purposes, but are
neither restricted nor committed. The City Manager or Director of Finance are authorized 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 classification represents amounts that have not been restricted, committed, or assigned to specific purposes.
13
Page 569 of 668
City of San Luis Obispo, California
Transportation Development Act (TDA) Fund and Transit Fund
Notes to the Financial Statements
June 30, 2023 and 2022
Page 4
Note 2 - Summary of Significant Accounting Policies, Continued
Fund Balance Spending Policy
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.
Budgets and Budgetary Accounting
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) for 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.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
Note 3 - CASH AND CASH EQUIVALENTS AND INVESTMENTS
Transportation Act Development (TDA) Fund and Transit Fund are pooled with the City’s cash and investments in order to
generate optimum interest income. The City pools its available cash for investment purposes. Cash and cash equivalents are
combined with investments and displayed as Cash and Investments.
At June 30, 2023 and 2022, cash and investments consisted of the 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.
2023 2022
Cash and investment 7,989,114$ 5,756,352$
14
Page 570 of 668
City of San Luis Obispo, California
Transportation Development Act (TDA) Fund and Transit Fund
Notes to the Financial Statements
June 30, 2023 and 2022
Page 5
Note 3 - Cash and Cash Equivalents and Investments, Continued
Custodial Credit Risk – Deposits
Custodial credit risk is the risk that in the event of a bank failure, the City’s deposits may not be returned to it. Cash balances held
in banks are insured up to $250,000 by the Federal Depository Insurance Corporation. For custodial credit risk associated with
deposits, the City follows California Government Code, which 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 the City’s deposits by pledging first trust deed mortgage notes
equal to 150% of the City’s deposits. All deposits held by financial institutions are fully insured or collateralized with securities,
held by the pledging financial institutions’ trust departments in the City’s name.
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.
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.
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. 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.
Pre-qualifying the financial institutions, broker/dealers, intermediaries and advisors with which the City will do business.
Concentration of Credit Risk
The City’s policies contained in the Investment Management Plan provide guidelines (by type of investment that limits either the
dollar amount, the percent of the portfolio or the maturity term) for diversifying the investment portfolio so that potential losses on
individual securities will be minimized.
15
Page 571 of 668
City of San Luis Obispo, California
Transportation Development Act (TDA) Fund and Transit Fund
Notes to the Financial Statements
June 30, 2023 and 2022
Page 6
Note 3 - Cash and Cash Equivalents and Investments, Continued
Concentration of Credit Risk, Continued
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 $200 million and that maintain a ratio of equity to total assets of at least 5%.
Additional Cash and Investment Disclosures
See the City of San Luis Obispo June 30, 2023 and 2022 Annual Comprehensive Financial Reports for additional cash and
investment disclosures.
Note 4 - DUE FROM OTHER GOVERNMENTS
At June 30, 2023 and 2022, the amounts due from other governments were as follows:
Note 5 - CAPITAL ASSETS
Capital Assets activity for the fiscal year ended June 30, 2023, was as follows:
2023 2022
Federal Transit Administration - capital and
operating grants 683,027$ 1,877,213$
Balance Deletions/ Balance
June 30, 2022 Additions Transfers/Adjustment June 30, 2023
Capital assets not being depreciated:
Construction in progress 83,058$ 2,325,169$ -$ 2,408,227$
Capital assets being depreciated:
Infrastructure 110,972 - - 110,972
Buildings and improvements 5,212,278 - - 5,212,278
Transit operating equipment 9,021,099 - (14,382) 9,006,717
Total capital assets being depreciated 14,344,349 - (14,382) 14,329,967
Less accumulated depreciation (9,928,541) (385,400) (59,818) (10,373,759)
Total capital assets, net of accumulated depreciation 4,498,866$ 1,939,769$ (74,200)$ 6,364,435$
16
Page 572 of 668
City of San Luis Obispo, California
Transportation Development Act (TDA) Fund and Transit Fund
Notes to the Financial Statements
June 30, 2023 and 2022
Page 7
Note 5 - Capital Assets, Continued
Capital Assets activity for the fiscal year ended June 30, 2022, was as follows:
Note 6 - INTERGOVERNMENTAL ALLOCATIONS
The City has been allocated the following funds from the State Transit Assistance Fund (STAF), Local Transportation Fund (LTF)
and State of Good Repair (SGR) for the years ended June 30, 2023 and 2022. The amounts have been and will be used for both
operating expenses and capital assets.
For the years ended June 30, 2023 and 2022, the City also directly allocated $1,068,248, and $483,071, respectively, of LTF
Article 4.0, Section 99260 funds to San Luis Obispo Regional Transit Authority (SLORTA). These funds are not shown in the
accompanying financial statements.
In addition to TDA allocations, the City was also received a Low-Carbon Transit Operations Program (LCTOP) allocation of
$344,183 to be spent toward the purchase of two electric transit vehicles. As of June 30, 2023, the City had purchased the vehicles.
Balance Deletions/ Balance
June 30, 2021 Additions Transters June 30, 2022
Capital assets not being depreciated:
Construction in progress 2,182$ 83,058$ (2,182)$ 83,058$
Capital assets being depreciated:
Infrastructure 221,743 - (110,771) 110,972
Buildings and improvements 5,101,506 - 110,772 5,212,278
Transit operating equipment 9,021,099 - - 9,021,099
Total capital assets being depreciated 14,344,348 - 1 14,344,349
Less accumulated depreciation (9,552,679) (375,862) - (9,928,541)
Total capital assets, net of accumulated depreciation 4,793,851$ (292,804)$ (2,181)$ 4,498,866$
Article Section 2023 2022
LTF 3.0 99233.3 76,869$ 53,681$
LTF 4.0 99260 2,647,859 2,084,383
STAF 6.5 99313 361,527 257,229
STAF 6.5 99314 69,101 48,229
SGR 6.5 99314 8,722 8,468
3,164,078$ 2,451,990$
Applicable
Allocating TDA Statute Amount
17
Page 573 of 668
City of San Luis Obispo, California
Transportation Development Act (TDA) Fund and Transit Fund
Notes to the Financial Statements
June 30, 2023 and 2022
Page 8
Note 7 - FARE REVENUE RATIOS
For the years ended June 30, 2023 and 2022 the City had fare revenue ratios of 159%, and 98%, respectively, computed as follows:
Due to the global pandemic, the California legislature passed AB 90 and AB 149. AB 90 prohibits the imposition of a penalty on
an operator that does not maintain the required ratio of fare revenues to operating cost during the 2020–21, 2021–22, and 2022-23
fiscal years. AB 149 extends the penalty exemption through the fiscal year 2023-24 as well as authorizes transit operators to
include federal grant funds as local funds for the purpose of computing fare revenue ratios.
TDA regulations require a minimum ratio of 20% for a municipality the size of the City. The City is in compliance with the
applicable TDA regulations for the year ended June 30, 2023 and June 30, 2022.
Note 8 - PENSIONS
The City contributes to the California Public Employees’ Retirement System (CalPERS) for its employees and participates in an
agent-multiple employer plan (Miscellaneous Plan) for its miscellaneous employees. The City has allocated a portion of the
Miscellaneous Plan that relates to the Transit Fund. The portion of the net pension liability allocated to the Transit Fund for the
years ended June 30, 2023 and 2022 were $771,572 and $555,660, respectively. The portion of the deferred outflows of resources
allocated to the Transit Fund for the years ended June 30, 2023 and 2022 were $223,664 and $145,137, respectively. The portion
of the deferred inflows of resources allocated to the Transit Fund for the years ended June 30, 2023 and 2022 were $2,280 and
$142,711, respectively. The portion of the pension expense allocated to the Transit Fund for the years ended June 30, 2023 and
2022 were $(3,046) and $(99,209), respectively, and is shown as a part of total fringe benefits in the related fiscal year.
Additional Pension Disclosures
See the City of San Luis Obispo June 30, 2023 and 2022 Annual Comprehensive Financial Reports for additional pension
disclosures as well as required supplementary information.
Note 9 - OTHER POST-EMPLOYMENT BENEFITS (OPEB)
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 has allocated a portion of the plan that relates to the Transit Fund. The portion of the net OPEB
liability allocated to the Transit Fund for the years ended June 30, 2023 and 2022 were $43,984 and $30,808, respectively. The
portion of the deferred outflows of resources allocated to the Transit Fund for the years ended June 30, 2023 and 2022 were
$25,046 and $18,309, respectively. The portion of the deferred inflows of resources allocated to the Transit Fund for the years
ended June 30, 2023 and 2022 were $10,643 and $23,824, respectively. The portion of the OPEB expense allocated to the Transit
Fund for the years ended June 30, 2023 and 2022 were $(3,413) and $(6,248), respectively, and is shown as a part of total fringe
benefits in the related fiscal year.
2023 2022
Operating revenues - fares 806,521$ 710,457$
Other local support - federal grants 4,083,165 1,877,213
(a) Net Operating revenues 4,889,686 2,587,670
(b) Net operating costs, net of depreciation and vehicle lease costs 4,023,165$ 3,475,401$
Exclude capital expenses under uniform system of accounts
for purposes of calculating fare revenue ratios but
treated as operating expenses for financial statements (955,181) (830,773)
(b) Adjusted operating costs for purposes of calculating fare revenue ratios 3,067,984$ 2,644,628$
(c) Fare revenue ratio [(a) / (b)]159%98%
18
Page 574 of 668
City of San Luis Obispo, California
Transportation Development Act (TDA) Fund and Transit Fund
Notes to the Financial Statements
June 30, 2023 and 2022
Page 9
Note 9 - Other Post-Employment Benefits (OPEB), Continued
Additional OPEB Disclosures
See the City of San Luis Obispo June 30, 2023 and 2022 Annual Comprehensive Financial Reports for additional OPEB
disclosures as well as required supplementary information.
Operating Transfers
The City expends all amounts for alternate transportation projects in its General Fund or Capital Outlay Fund. LTF monies
received by the City are initially deposited in the Transportation Development Act (TDA) Fund and subsequently transferred to the
General Fund, where such funds are expended or transferred to the Capital Outlay Fund to be expended on designated
transportation projects.
Note 10 - COMMITMENTS AND CONTINGENCIES
Regional Transit Authority Pension Expense
The City is presently a member agency of the San Luis Obispo Regional Transit Authority (see ACFR Note 10), a duly established
Joint Powers Authority (JPA) comprised of all local cities and the County of San Luis Obispo. The City’s contractual contribution
to that entity is approximately 18% of the total expense. The City was advised that the Regional Transit Authority was working
with CalPERS to determine whether it is required to enroll certain previously unenrolled transit employees in the CalPERS
pension system and whether the entity may be liable for obligations related to the failure to enroll those employees and make
contributions on their behalf. On December 10, 2019 the County Board of Supervisors approved a contract for participation of the
JPA in the San Luis Obispo County Pension Trust and the Employees Retirement Plan. The current amount of potential CalPERS
unfunded liability for the JPA may reach as high as $4 million. It is not anticipated that the City’s annual payment to the JPA will
increase to satisfy this unfunded liability.
Note 11 - SUBSEQUENT EVENTS
Events subsequent to June 30, 2023 have been evaluated through December 15, 2023, which is the date the financial statements
were available to be issued. Management did not identify subsequent events that required disclosure.
19
Page 575 of 668
2023 Original Final Actal
Revenues - intergovernmental allocations 45,900$ 76,869$ 76,869$ -$
Other financing uses - operating transfers
to City of San Luis Obispo (45,000) (76,869) (76,869) -
Excess of revenues over other financing uses 900$ -$ -$ -$
2022 Original Final Actal
Revenues - intergovernmental allocations 45,900$ 45,900$ 53,681$ 7,781$
Other financing uses - operating transfers
to City of San Luis Obispo (45,900) (97,129) (45,000) 52,129
Excess of revenues over other financing uses -$ (51,229)$ 8,681$ 59,910$
Budget Variance with
Final Budget
Positive
City of San Luis Obispo, California
Transportation Development Act (TDA) Fund
Supplementary Information
Schedules of Revenues and Expenditures - Budget and Actual
June 30, 2023 and 2022
Variance with
Final Budget
Positive
(Negative)
Budget
20
Page 576 of 668
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE
AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
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
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the financial statements of the Transportation
Development Act (TDA) Fund and the Transit Fund (TDA Program) of the City of San Luis Obispo,
California (City), as of and for the year ended June 30, 2023, and the related notes to the financial
statements, and have issued our report thereon dated December 15, 2023.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal
control over financial reporting (internal control) to determine the audit procedures that are
appropriate in the circumstances for the purpose of expressing our opinions on the financial statements,
but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control.
Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees in the normal course of performing their assigned functions, to prevent, or
detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination
of deficiencies, in internal control, such that there is a reasonable possibility that a material
misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a
timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control
that is less severe than a material weakness, yet important enough to merit attention by those charged
with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of
this section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify
any deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses or significant deficiencies may exist that were not identified.
Page 577 of 668
To the Honorable Mayor and Members of the City Council
of the City of San Luis Obispo
San Luis Obispo, California
Page Two
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the TDA Program’s financial statements are
free from material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements, noncompliance with which could have a direct and
material effect on the determination of financial statement amounts. However, providing an opinion on
compliance with those provisions was not an objective of our audit and, accordingly, we do not express
such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that
are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity’s internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entity’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
Badawi and Associates, CPAs
Berkeley, California
December 15, 2023
22
Page 578 of 668
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL
OVER COMPLIANCE FOR TRANSPORTATION DEVELOPMENT ACT FUNDS
Independent Auditor’s Report
To the Honorable Mayor and Members of City Council
of the City of San Luis Obispo
San Luis Obispo, California
Report on Compliance
Opinions
We have audited the City of San Luis Obispo’s (City) compliance with the types of compliance
requirements described in Section 6666 and 6667 of the Rules and Regulations of the California
Administrative Code in the Transportation Development Act Statutes and Administrative Code for 1987 (the
Act) and the allocation instructions and resolutions of the San Luis Obispo Council of Governments
applicable to the City’s Transportation Development Act Article 3, 4 and 6.5 Program (TDA Program)
for the years ended June 30, 2023 and 2022.
In our opinion, the City complied, in all material respects, with the compliance requirements referred
to above that could have a direct and material effect on its TDA Program for the year ended June 30,
2023 and 2022.
Basis for Opinion
We conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States of America (GAAS); the standards applicable to financial audits contained in Government
Auditing Standards issued by the Comptroller General of the United States; and Section 6666 and 6667 of
the rules and regulations of the California Administrative Code in the Transportation Development Act
Statutes and Administrative Code for 1987 (the Act); and the allocation instructions and resolutions of
the San Luis Obispo Council of Governments. Our responsibilities under those standards and the Act
are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our
report.
We are required to be independent of the City and to meet our other ethical responsibilities, in
accordance with 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 opinion on compliance for the
City’s TDA Program. Our audit does not provide a legal determination of the City’s compliance with
the compliance requirements referred to above.
Page 579 of 668
To the Honorable Mayor and Members of City Council
of the City of San Luis Obispo
San Luis Obispo, California
Page 2
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design,
implementation, and maintenance of effective internal control over compliance with the requirements
of laws, statutes, regulations, rules and provisions of contracts or grant agreements applicable to the
City’s TDA Program.
Auditors’ Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the
compliance requirements referred to above occurred, whether due to fraud or error, and express an
opinion on the City’s compliance based on our audit. 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, Government Auditing Standards, and the Section 6666 and 6667 of the Rules and Regulations
of the California Administrative Code in the Transportation Development Act Statutes and Administrative Code
for 1987 (the Act) and the allocation instructions and resolutions of the San Luis Obispo Council of
Governments will always detect material noncompliance when it exists. The risk of not detecting
material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Noncompliance with the compliance requirements referred to above is considered material if there is a
substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a
reasonable user of the report on compliance about the City’s compliance with the requirements of the
TDA Program as a whole.
In performing an audit in accordance with GAAS, Government Auditing Standards, and the Section 6666
and 6667 of the Rules and Regulations of the California Administrative Code in the Transportation
Development Act Statutes and Administrative Code for 1987 (the Act) and the allocation instructions and
resolutions of the San Luis Obispo Council of Governments, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material noncompliance, 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 City’s compliance with the compliance
requirements referred to above and performing such other procedures as we considered
necessary in the circumstances.
Obtain an understanding of the City’s internal control over compliance relevant to the audit in
order to design audit procedures that are appropriate in the circumstances and to test and
report on internal control over compliance in accordance with the Section 6666 and 6667 of the
Rules and Regulations of the California Administrative Code in the Transportation Development Act
Statutes and Administrative Code for 1987 (the Act) and the allocation instructions and resolutions
of the San Luis Obispo Council of Governments, but not for the purpose of expressing an
opinion on the effectiveness of City’s internal control over compliance. Accordingly, no such
opinion is expressed.
24
Page 580 of 668
To the Honorable Mayor and Members of City Council
of the City of San Luis Obispo
San Luis Obispo, California
Page 3
We are required to communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit and any significant deficiencies and material weaknesses in
internal control over compliance that we identified during the audit.
Report on Internal Control Over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their
assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance
requirement of the Section 6666 and 6667 of the Rules and Regulations of the California Administrative Code
in the Transportation Development Act Statutes and Administrative Code for 1987 (the Act) and the allocation
instructions and resolutions of the San Luis Obispo Council of Governments on a timely basis. A
material weakness in internal control over compliance is a deficiency, or combination of deficiencies in
internal control over compliance, such that there is a reasonable possibility that material
noncompliance with a type of compliance requirement of the Section 6666 and 6667 of the Rules and
Regulations of the California Administrative Code in the Transportation Development Act Statutes and
Administrative Code for 1987 (the Act) and the allocation instructions and resolutions of the San Luis
Obispo Council of Governments will not be prevented, or detected and corrected, on a timely basis. A
significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in
internal control over compliance with a type of compliance requirement of the Section 6666 and 6667 of
the Rules and Regulations of the California Administrative Code in the Transportation Development Act
Statutes and Administrative Code for 1987 (the Act) and the allocation instructions and resolutions of the
San Luis Obispo Council of Governments that is less severe than a material weakness in internal
control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the
Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify
all deficiencies in internal control over compliance that might be material weaknesses or significant
deficiencies in internal control over compliance. Given these limitations, during our audit we did not
identify any deficiencies in internal control over compliance that we consider to be material
weaknesses, as defined below. However, material weaknesses or significant deficiencies in internal
control over compliance may exist that were not identified.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal
control over compliance. Accordingly, no such opinion is expressed.
25
Page 581 of 668
To the Honorable Mayor and Members of City Council
of the City of San Luis Obispo
San Luis Obispo, California
Page 4
The purpose of this report on internal control over compliance is solely to describe the scope of our
testing of internal control over compliance and the results of that testing based on the requirements of
the Section 6666 and 6667 of the Rules and Regulations of the California Administrative Code in the
Transportation Development Act Statutes and Administrative Code for 1987 (the Act), and the allocation
instructions and resolutions of the San Luis Obispo Council of Governments. Accordingly, this report is
not suitable for any other purpose.
Badawi and Associates, CPAs
Berkeley, California
December 15, 2023
26
Page 582 of 668
1
2020-21
Annual
Comprehensive
Financial Report
Recommendation
2
Review and accept the Annual
Comprehensive Financial Report,
Federal Single Audit Report and
Transportation Development Act (TDA)
Report for Fiscal Year 2022-23.
2022-23 Audit
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 pertains to how the City spent
Federal funds
•TDA Report pertains to how the City spent funds
provided by this specific California Act
•City’s current auditing firm – Badawi & Associates
2022-23 Audit
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.”
2022-23 Audit
Audit Highlights
5
•Unqualified, Clean Audit
•Increase in Fund Balance in General Fund,
Water Fund, Sewer Fund, Parking Fund
and Transit Fund.
•Findings are areas for improvement and are
included with the Single Audit Report
2022-23 Audit
Popular Annual Financial Report
6
https://www.slocity.org/home/showpublisheddocument/35118
2022-23 Audit
Federal Single Audit
7
•Focuses on how the City spent Federal grants and the City’s internal
controls
•City spent $6.9 million of Federal grants in FY 2022-23
•Largest grants were Transit related ($4.1 million) and COVID related
($2.6 million)
•Findings are areas for improvement and are ongoing from FY 2021-22
2022-23 Audit
Addressing Auditor’s Findings
8
•Journal Entry posting – certain journal entries can be posted automatically,
without approvals. Exploring system workflows as well as limiting employee
permissions to address this finding.
•Payroll Module Implementation – overtime calculations and ongoing manual
intervention to ensure correct rate of pay. Ongoing efforts with third-party
consultant to correct.
2022-23 Audit
Transportation Development Act Report
9
Funding is restricted for transportation related
expenditures
•Bicycle and Pedestrian projects ($76,869)
•Transit ($3 million)
2022-23 Audit
Must maintain a fare box revenue
ratio of 20%
•FY 2022-23 ratio = 159%
FY 2022-23 Financial Statements
Questions?
2022-23 Audit 10
Recommendation
Review and accept the Annual
Comprehensive Financial Report,
Federal Single Audit Report and
Transportation Development Act
(TDA) Report for Fiscal Year 2022-
23.
2022-23 Audit 11
12
FY 2022-23 Financial Statements
Governmental Funds
Total Revenue: $127.7 million
ACFR page 33
78%
Taxes from revenue
sources such as
sales, property,
transients, and utility
users' tax.
14%Fees for services such as
Development Review, Park
& Recreation programs &
Special Assessments.
8%Revenue from grants
and investments.$21,865,468
$30,508,731
$22,376,920
$11,037,037
$6,904,194
$2,349,603
$3,281,010
$1,127,744
$18,418,552
$6,364,704
$1,460,236
$1,999,872
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 2022-23 Financial Statements
Governmental Funds
Public Safety
$37,425,928 Leisure, cultural,
social Services
$11,015,177
Debt Service
$2,605,517
Capital Outlay
$24,737,222
Transportation
$5,408,704
General Government
$23,646,307
Community
Development
$14,867,023 Total Expenditures: $119.7 million
ACFR page 33
15
FY 2022-23 Financial Statements
ACFR page 31
General Fund – Fund Balance per June 30, 2023
Non-spendable $101,462
Committed
Contingency Fund – 20% policy level 13,727,000
General government programs 5,307,988
Risk Management 585,456
Assigned to:
Encumbrances 2,455,573
SLO Rep Theater grant 3,940,000
115 Trust Fund 2,000,000
CalPERS Payment 2,000,000
Revenue Stabilization 2,000,000
Tenant Improvement 1,400,000
Development Services 464,136
Solid Waste AB939 281,000
Unassigned 8,275,453
Total Fund Balance $42,538,068
Local Revenue Measure – G-20 (April 1, 2021)
16
80%million
Operating Use
$8.8
million
Capital Use
$22.1
million
Revenue
$30.5
Community Safety & Emergency
Preparedness
Creek & Flood Protection
Safe & Clean Public Spaces
Youth/Senior & recreation Facilities
Open Space Preservation &
Maintenance
million
Encumbrances
$9.0
Street Maintenance & Transportation
Address Homelessness
Economic Development & Business
Retention
Protection of Financial Stability
ACFR page 113
FY 2022-23 Financial Statements
Proprietary (Enterprise) Funds – Revenues $66 million
Water Fund
$ 28.5 million
Sewer Fund
$24.1 million
Parking Fund
$7.7 million
Transit Fund
$5.7 million
Service Charges $23,856
Impact Fees $3,616
Other Revenue $248
Non-Operating
Revenue $741
Service Charges $20,289
Impact Fees $1,981
Other Revenue $72
Non-Operating
Revenue $1,753
Service Charges $4,607
Fines & Forfeitures $1,369
Other Revenue $47
Non-Operating
Revenue $1,682
Service Charges $806
Other Revenue $3
Non-Operating
Revenue $4,905
ACFR page 41
Numbers shown in thousands
17
FY 2022-23 Financial Statements
Proprietary (Enterprise) Funds – Expenditures $43.9 million
Water Fund
$21.5 million
Parking Fund
$4.8 million
Transit Fund
$ 4.5 million
Sewer Fund
$13.1 million
Staffing $4,965
Supplies & Maint.$1,767
Contract Services $10,264
General Gov.$1,535
Depreciation $2,945
Staffing $4,860
Supplies & Maint.$2,203
Contract Services $1,914
General Gov.$1,497
Depreciation $2,588
Staffing $1,663
Supplies & Maint.$733
Contract Services $880
General Gov.$873
Depreciation $662
Staffing $190
Supplies & Maint.$378
Contract Services $3,090
General Gov.$365
Depreciation $460
ACFR page 41
Numbers shown in thousands
18
FY 2022-23 Financial Statements
Capital Assets (net of depreciation)
Governmental Assets - $ 224 million Enterprise Assets – $307 million
ACFR page 65
0%
Infrastructure
59%
Land & Public Art
15%
Under Construction
8%
Buildings
12%
Equipment
6%Right of Use -
Lease
<1%SBITAs*
<1%
Water Fund
29%
Sewer Fund
61%
Parking
Fund
8%
Transit Fund
2%
19
Notes Section
20
•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 subscription-based
information technology arrangements (SBITAs)
GASB 96
ACFR pages 51-96
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.
21
Revenue & Debt Capacity
-Local Revenue Sources
-Major Tax revenues
-Ability to issue debt
-Affordability of current debt
ACFR page 159
City of San Luis Obispo
Presentation to The City Council
January 23, 2024
Presented by: Ahmed Badawi, CPA Partner
Badawi & Associates
Audit of the
City of San Luis Obispo
1
Agenda
Engagement Team
Deliverables and Scope of the Audit
Areas of Primary Emphasis
Auditors Report and Financial Statements
Required Communications
New Accounting Standards
Conclusion & Discussion/Questions
2
Engagement Team
3
Engagement Team
Engagement
Partner
Ahmed Badawi,
CPA
Senior
Tim Ko
4
Manager
Wenwei Zhao
CPA
Staff
Fatima Salman
Staff
Yujia Zhao
Staff
Mohamed Ahmed
Deliverables and Scope of the Audit
Report of Independent Auditors on City of San Luis Obispo Basic
Financial Statements
Independent Auditor’s Report on Internal Control Over Financial
Reporting and on Compliance and Other Matters
Independent Auditor’s Report on Compliance with Requirements
Applicable to Each Major Program and Internal Control over
Compliance in Accordance with the Uniform Guidance
Report on Compliance with TDA
Report of Independent Auditors on the Whale Rock Commission Basic
Financial Statements
Agreed-Upon Procedures Report on Appropriation Limit Schedule
Communications With Those Charged With Governance
Letter used to summarize communication of various significant
matters to those charged with governance.
5
Areas of Primary Audit Emphasis
Revenues & Receivables (Tax, Grants, Notes and Others): Improper revenue
recognitions
Governmental Funds:
Confirmed/validated property taxes, sales taxes, franchise taxes &
other significant revenues/receivables.
Proprietary Funds:
Performed analytical procedures and trends analysis.
Pension & OPEB: Complex accounting standards
Reviewed management’s journal entries for pension and OPEB.
Agreed amounts recorded to reports provided by CalPERS and CalPERS’
Auditors and performed testing of census information used by CalPERS.
Reviewed management’s allocation of pension and OPEB amounts to
enterprise fund.
6
Areas of Primary Audit Emphasis
The risk of management override of controls is addressed by the following
procedures:
Assignment of audit staff based on consideration of audit risk.
Procedures to incorporate an element of unpredictability in the audit
from period to period.
Consideration of the selection and application of significant accounting
principles.
Examination of journal entries.
Review of accounting estimates for bias.
Evaluation of business rationale for unusual transactions.
Evaluation of the appropriateness of fraud-related inquiries performed
7
8
Auditors Report
Unmodified opinion
Audit performed in accordance with Generally
Accepted Auditing Standards, and Government
Auditing Standards
Financial statements are fairly presented in all material
respects
Significant accounting policies have been consistently
applied
Estimates are reasonable
Disclosures are properly reflected in the financial
statements
9
10
Required Communications
Our Responsibility Under
U.S GAAS
•Opinion on whether financial
statements are fairly stated in
accordance with U.S GAAP
•Evaluate internal control over
financial reporting including tone
at the top
•Evaluate compliance with laws,
contract and grants
•Ensure financial statements are
clear and transparent
•Communicate with the governing
body
11
Management Responsibility
•Management is responsible for the
financial statements
•Establish and maintain internal control
over financial reporting
•Making all financial records available to
us
•Adjust the financial statements to
correct material misstatements
•Establish internal control to prevent
and detect fraud
•Inform us of all known and suspected
fraud
•Comply with laws and regulations
•Take corrective action on audit findings
Required Communications
Independence
Timing of the Audit
•It is our responsibility to
maintain independence
•We will maintain our
independence by strict
adherence to the AICPA and the
Board of Accountancy rules and
regulations
•No other services performed
that could affect our
independence
•Audit was performed within the
time frame communicated to the
City in our engagement letters
12
Required Communications
Significant Accounting
Policies and Unusual
Transactions
The City adopted the following new
pronouncements during the year:
•GASB Statement No. 91 – Conduit debt
•GASB Statement No. 94 – Public-private
partnerships
•GASB Statement No. 96– Subscription-
Based Information Technology
Arrangements
13
Required Communications
Management Judgment and
Accounting Estimates
Significant management estimates
impacting the financial statements include
the following:
•Useful lives of Capital Assets
•Pension Plans
•OPEB Plans
•Investment Valuations
•Allowance for uncollectable accounts
14
Required Communications
Sensitive Disclosures
Difficulties Encountered in
Performing the Audit
The most sensitive disclosures affecting
the City’s financial statements are as
follow:
•Summary of Significant Accounting
Policies
•Cash and Investments
•Capital Assets
•Long Term Debt
•Net Position/Fund Balances
•Employee Retirement Plans
•Other Post Employment Benefits
•Commitments and Contingencies
•Subsequent Events
None.
15
Required Communications
Significant Audit
Adjustments and
Unadjusted Differences
Considered by Management
to be Immaterial
Potential Effect on the
Financial Statements of Any
Significant Risks and
Exposures
There were adjustments and
reclassifying entries during the
course of the audit.
Management has posted all
proposed audit adjustments.
No significant risks or exposures
were identified. Legal matters
and potential liabilities are
disclosed in the financial
statements
16
Required Communications
Disagreement with
Management
Deficiencies in Internal
Control
We are pleased to report that there were
no disagreements with management
Material weaknesses:•Journal entries posting
Significant Deficiency:•Incorrect Payroll Module
Implementation
17
Required Communications
Representations
Requested of
Management
Management
Consultation with Other
Accountants
We obtained certain
representations from
management before issuing
our reports.
We are not aware of any
significant accounting or
auditing matters for which
management consulted with
other accountants
18
Required Communications
Other Material Written
Communications
Material Uncertainties
Related to Events and
Conditions
Fraud and Illegal Acts
Other than the engagement
letter and management
representation letter, there
have been no other
significant communications
There were no material
uncertainties relating to
events and conditions
We have not become aware
of any instances of fraud or
illegal acts
19
20
New Accounting Standards
2024 •GASB Statement No. 100 – Accounting Changes and Error Corrections—an
amendment of GASB Statement No. 62
2025 •GASB Statement No. 101 – Compensated Absences
•GASB Statement No. 102 – Certain Risk Disclosures
Questions
Ahmed M. Badawi
abadawi@b-acpa.com
21
Thank You
For Allowing Us to Provide Audit Services
to the City of San Luis Obispo
22