HomeMy WebLinkAboutCouncil Reading File - CAFR Single AuditSan Luis Obispo, CaliforniaComprehensive Annual Financial Report
Fiscal Year Ended June 30, 2016
COMPREHENSIVE ANNUAL FINANCIAL REPORT
Fiscal Year Ended June 30, 2016
JAN HOWELL MARX, MAYOR
DAN CARPENTER, VICE MAYOR1
JOHN ASHBAUGH, COUNCIL MEMBER
CARLYN CHRISTIANSON, COUNCIL MEMBER
DAN RIVOIRE, COUNCIL MEMBER
KATIE LICHTIG, CITY MANAGER
Prepared by the Department of Finance & Information Technology
Xenia Bradford, Interim Finance Director
Vilma Warner, Finance Operations Manager
Lynn Covey, Senior Accountant
Traci Kawaguchi, Accountant
City of San Luis Obispo, California
www.slocity.org
1 Mayor and Council Member positions as of June 30, 2016.
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City of San Luis Obispo, California
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2016
Table of Contents
Page
Introductory Section
Transmittal Memorandum vi-xix
Report Purpose and Organization vi
Profile of the City of San Luis Obispo viii
Factors Affecting Financial Condition ix
Financial Condition Overview xi
Relevant Financial Policies xiv
Major Initiatives xvi
Award for Excellence in Financial Reporting xviii
Acknowledgments xviii
Directory of Officials and Advisory Bodies xx
City Council xx
Advisory Bodies xx
Appointed Officials and Department Heads xx
Mission Statement xxi
Organizational Values xxii-xxiii
Organization of the City of San Luis Obispo xxiii
GFOA Certificate of Achievement for Excellence in Financial Reporting xxv
Financial Section
Independent Auditors’ Report 1-3
Management’s Discussion and Analysis 4-17
Financial Highlights 4
Overview of the Financial Statements 5
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City of San Luis Obispo, California
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2016
Table of Contents
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Government-wide Overall Financial Analysis 8
Financial Analysis of Governmental Funds 13
General Fund Budgetary Highlights 14
Capital Assets and Debt Administration 16
Economic Factors and Next Year’s Budgets and Rates 17
Requests for Additional Information 17
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position 19
Statement of Activities 20-21
Fund Financial Statements:
Balance Sheet – Governmental Funds 22
Reconciliation of the Governmental Funds Balance Sheet to the
Government-wide Statement of Net Position 23
Statement of Revenues, Expenditures and Changes in Fund Balance –
Governmental Funds 24-25
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures
and Changes in Fund Balance to the Government-wide Statement
of Activities and Changes in Net Position 26
Statement of Fund Net Position Business-Type Activities – Enterprise Funds 27-28
Statement of Revenues, Expenses and Changes in Fund Net Position
Business-Type Activities—Enterprise Funds 29
Statement of Cash Flows Business-Type Activities – Enterprise Funds 30-31
Statement of Net Position - Fiduciary Funds - Agency Funds 32
Notes to the Basic Financial Statements 33-87
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City of San Luis Obispo, California
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2016
Table of Contents
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Required Supplementary Information Section
Budgetary Comparison Schedule – General Fund 89-94
Schedule of Funding Progress for Other Post-Employment Benefits (OPEB) 95
Schedule of the Changes in the Net Pension Liability and Related Ratios – Miscellaneous
Agent Multiple – Employer Plan 96
Schedule of the Plan Contributions – Miscellaneous Agent Multiple – Employer Plan 97
Schedule of the City’s Proportionate Share of the Net Pension Liability – Safety Cost-Sharing Plans 98
Schedule of the City’s Contributions – Safety Cost-Sharing Plans. 99
Notes to Required Supplementary Information 100-102
Other Supplementary Information and Combining and Individual Fund Statements and Schedules
Half Percent Sales Tax Measure Funding Schedule 104-106
Major Governmental Funds 107
Nonmajor Governmental Funds 108-111
Combing Balance Sheet – Nonmajor Governmental Funds 112-115
Combining Statement of Revenues, Expenditures and Changes in Fund Balance
- Nonmajor Governmental Funds 116-119
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual:
Downtown Business Improvement District Fund 120
Transportation Development Act (TDA) Fund 121
Tourism Business Improvement District Fund 122
Gas Tax Fund 123
Community Development Block Grant (CDBG) Fund 124
Law Enforcement Grants Fund 125
Public Art Contributions Fund 126
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City of San Luis Obispo, California
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2016
Table of Contents
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Agency Funds 127
Combining Statement of Changes in Assets and Liabilities – Agency Funds 128-132
Statistical Section
Statistical Section – Overview (Unaudited) 134
Financial Trends:
Net Positions by Component – Last Ten Fiscal Years 135
Changes in Net Position – Last Ten Fiscal Years 136-138
Governmental Activities Tax and Franchise Revenues by Source – Last Ten Fiscal Years 139
Fund Balances of Governmental Funds – Last Ten Fiscal Years 140
Revenues, Expenditures and Changes in Fund Balances of Governmental Funds
- Last Ten Fiscal Years 141-142
General Fund Operating Expenditure Trends by Type – Last Ten Fiscal Years 143
Revenue Capacity:
Assessed and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years 144
Property Tax Rates – Last Ten Fiscal Years 145
Principal Property Taxpayers – Current Year and Nine Years Ago 146
Secured Property Tax Roll Levies and Collections – Last Ten Fiscal Years 147
Schedule of Taxable Sales and Permits by Category – Last Ten Calendar Years 148
Historical Sales and Use Tax Rates 149
Schedule of Business Tax Certificates Issued 150
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City of San Luis Obispo, California
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2016
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Debt Capacity:
Per Capital Outstanding Debt by Type – Last Ten Fiscal Years 151
Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt per Capital
- Last Ten Fiscal Years 152
Direct and Overlapping Long-Term Debt – Fiscal Year Ended June 30, 2016 153-154
Computation of Legal Debt Margins – Last Ten Fiscal Years 155
Revenue Bond Coverage:
Water Fund – Last Ten Fiscal Years 156
Parking Fund – Last Ten Fiscal Years 157
Demographic and Economic Information:
Demographic and Economic Statistics – Last Ten Fiscal Years 158
Principal Employers – Current Year and Nine Years Ago 159
Regular Authorized Positions – Last Ten Fiscal Years 160
Operating Information:
Operating Indicators and Capital Asset Statistics by Function – Last Ten Fiscal Years 161-165
Water System Statistical Data 166
Water and Sewer Rates – Last Ten Fiscal Years 167-168
Water System Ten Largest Users – Fiscal Year Ended June 30, 2016 169
INTRODUCTORY SECTION
December 19, 2016
TO: The Honorable Mayor and Members of the City Council and Citizens of the City of San Luis Obispo
FROM: Katie Lichtig, City Manager
Xenia Bradford, Interim Finance Director
SUBJECT: TRANSMITTAL MEMORANDUM FOR COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR
FISCAL YEAR 2015-16
REPORT PURPOSE AND ORGANIZATION
We are pleased to submit the City of San Luis Obispo’s Comprehensive Annual Financial Report (CAFR) for the fiscal year
ended June 30, 2016. Section 810 of the City’s Charter requires that an independent certified public accountant conduct an
annual audit at the end of each fiscal year and issue a financial report to the City Council. This CAFR is being issued in
compliance with this requirement.
The CAFR consists of management’s representations concerning the finances of the City of San Luis Obispo (City).
Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented
in this report. We believe that the data presented in this report is accurate in all material respects and all statements and
disclosures needed for the reader to obtain a thorough understanding of the City’s financial activities have been included.
To provide a reasonable basis for making these representations, management of the City has established a comprehensive
internal control framework that is designed both to protect the government’s assets from loss, theft or misuse and to compile
sufficient reliable information for the preparation of the City’s financial statements in conformity with U.S. Generally Accepted
Accounting Principles (GAAP). Because the cost of internal controls should not outweigh their benefits, the City’s
comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the
financial statements will be free from material misstatement.
Audited Financial Statements
The City’s financial statements have been audited by Glenn Burdette, a firm of licensed certified public accountants. The goal
of the independent audit was to provide reasonable assurance that the financial statements of the City for the fiscal year ended
June 30, 2016 are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements; assessing the overall accounting principles used and significant
estimates 1 made by management; and evaluating the overall financial statement presentation.
1 Significant estimates included in the financial statements are made in conformity with GAAP.
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TRANSMITTAL MEMORANDUM
The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified
opinion 2 that the City’s financial statements for the fiscal year ended June 30, 2016 are fairly presented in conformity with
GAAP. Specifically, Glenn Burdette’s judgment is that the City’s financial records and statements are fairly and appropriately
presented, and in accordance with GAAP. The independent auditors’ report is presented as the first component of the financial
section of this report.
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.
“Single Audit” for Federal Grant Programs. The independent audit of the financial statements of the City was part of a
broader, federally mandated “Single Audit” designed to meet the special needs of Federal grantor agencies. The standards
governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial
statements, but also on the audited government’s internal controls 3 and compliance with legal requirements, with special
emphasis on internal controls and legal requirements involving the administration of Federal awards (such as Transit funding
and Community Development Block Grant funding). This separately prepared report is available from the Department of
Finance upon request. This audit has been completed and will be filed and distributed to appropriate agencies to meet Federal
requirements.
Organization of Report
This report is presented in three sections: introductory, financial and statistical.
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 the
organization chart.
The Financial section consists of five parts: the independent auditors’ report; Management’s Discussion and Analysis; the
basic financial statements including the Government-Wide Financial Statements, Fund Financial Statements, and Notes to the
Financial Statements; Required Supplementary Information; and additional supplementary statements and schedules including
the local half-percent sales tax , non-major governmental funds and agency funds.
The Statistical section includes selected unaudited financial and demographic information generally presented on a multi-year
basis. This information includes Financial Trends, Revenue Capacity, Debt Capacity, Demographics and Economic
Information, and Operating Information.
2 An unqualified opinion means that without any reservations, the auditor feels the financial statements were prepared
appropriately following all applicable accounting rules and the financial reports are an accurate representation of the City’s
financial condition.
3 Internal controls are systematic measures instituted by an organization to conduct its business in an orderly and efficient
manner; safeguard its assets and resources; deter and detect errors, fraud, and theft; ensure accuracy and completeness of its
accounting data; produce reliable and timely financial and management information; and ensure adherence to its policies and
plans.
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TRANSMITTAL MEMORANDUM
PROFILE OF THE CITY OF SAN LUIS OBISPO
With a population of approximately 46,100, the City is located eight miles from the Pacific Ocean and is midway between San
Francisco and Los Angeles at the junction of Highway 101 and scenic Highway 1.
The City serves as the commercial, governmental, and cultural hub of California’s Central Coast. San Luis Obispo is the County
seat of San Luis Obispo County and a number of Federal and State regional offices and facilities are located here, along with
California Polytechnic State University and Cuesta College.
One of California’s oldest communities, the City began with the founding of Mission San Luis Obispo de Tolosa in 1772 by
Father Junipero Serra as the fifth mission in the California chain of 21 missions. It was first incorporated in 1856 as a General
Law City and became a Charter City in 1876. As a Charter City, San Luis Obispo has more local authority than cities that
incorporate under the general laws of the State of California. The Charter is the City’s governing document and any changes
must be approved by the voters. The City’s Charter has been amended several times since its adoption, most recently in August
2011.
Form of Government
As set forth in the City Charter, the City operates under the “Council-Mayor-City Manager” form of government. The City
Council has the authority to make and enforce all laws and regulations with respect to municipal affairs, subject only to the
limitations of the City Charter and the State Constitution. There are four Council members, who are elected at-large and serve
overlapping, four-year terms. The Mayor is also elected at-large for a two-year term, and serves as an equal member of the
Council. The City Council appoints the City Manager and City Attorney. All other department heads are appointed by the
City Manager.
City Services
The City provides a wide range of municipal services, including police and fire protection, water and sewer utilities, street
maintenance, public transportation, parking, parks and recreation, planning, building and safety, and other general government
services. Several municipal services are provided through other governmental agencies or private utility companies, including
the following:
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
Financial data for all funds through which services are provided by the City have been included in this report.
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, and so data from these units are combined with data of the primary
government. The City has one component unit, the San Luis Obispo Capital Improvement Board, which provides financing for
the construction and acquisition of City facilities. The Board is comprised solely of members of the City Council. Activities
of the Board are accounted for in the applicable City governmental or enterprise funds.
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Budgetary Policy and Control
Budgets are legally adopted annually by the City Council by resolution, and are prepared for each fund in accordance with its
basis of accounting. As provided under City Charter, the City Manager is responsible for preparing the budget and for its
implementation after adoption.
Since the City uses a two-year budget, operating appropriations not expended during the first year may be carried forward into
the second year for specific purposes with the approval of the City Manager. (When applicable, these amounts are shown as
assigned for subsequent year expenditures in the financial statements.) At the end of the final year of the two-year plan,
operating appropriations lapse unless they are encumbered by contract or purchase order. Multi-year budgets are adopted for
capital projects as necessary.
The City Council has the legal authority to amend the budget at any time during the fiscal year. The City Manager has the
authority to make administrative adjustments to the budget as long as those changes will not have 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 detail is maintained by the City for each fund and department by program area at the line item level.
Budgetary control is exercised through a computerized system, which interfaces with the City's general ledger. The system
maintains an ongoing record of budget balances throughout the year based on actual expenditures and unfilled purchase orders.
Open encumbrances at year-end are reported as committed fund balance.
It is the City's policy to maintain an unassigned fund balance in the General Fund of at least 20% of operating expenditures.
As noted above, this policy objective has been achieved for 2015-16. The City maintains a similar policy for working capital
balances in the water, sewer and parking enterprise funds. The Fleet Replacement Fund reserve requirement is $500,000 and
the Information Technology (IT) Replacement Fund reserve requirement is $400,000. The goal has been met for these funds
in 2015-16.
FACTORS AFFECTING FINANCIAL CONDITION
The information presented in the financial statements is perhaps best understood when it is considered from the broader
perspective of the specific environment within which the City operates.
Local Economic Environment
Historically, the City has experienced a 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, Regional Water Control Board and
Camp San Luis. However, these entities have also faced budgetary pressures and reductions in the past few years that have
affected the local economy.
Employment. Employment in the San Luis Obispo County region has historically been stabilized by a large government
presence and diversity. As noted above, the State has a major university, correctional facility and other regional offices located
in the community. The County government and school districts are also major employers. Several of these entities have
experienced job losses in the last few years due to reduction in State funding. However, these employers along with growth in
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hospitality sector have contributed to creation of new job opportunities as the economy continues its steady but slow recovery.
Other major employers include a real estate investment firm, a regional bank, major hospital facilities, several software
companies and Pacific Gas and Electric. The recent announcement of Diablo Canyon closure presents some uncertainties and
adjustment for the region over the next couple of decades as the process takes place.
Unemployment rose sharply in the San Luis Obispo area in 2008-09 to over 10% due to the severe economic downturn
commonly referred to as the “Great Recession.” The unemployment rate has significantly declined as the economy continued
to recover and currently stands at 4.4% for the City of San Luis Obispo and 4.2% countywide as was reported by Beacon
Economics Central Coast Forecast based on September 2016 data.
Key Revenue Sources. As the commercial, governmental, and cultural hub of San Luis Obispo County, the City is blessed
with a diverse array of strong revenue sources. All of the City’s top three revenue sources, Sales Tax, Property Tax, and
Transient Occupancy Tax (TOT), substantially exceed the per capita average for the County.
Long-Term Financial Planning.
The City engages in a number of activities focused on long-term financial planning, including:
Five-Year Fiscal Forecast. Before the two-year budget process begins, the City Council reviews a Five Year General Fund
Fiscal Forecast to help set the stage for long-term decision-making. The purpose of the forecast is to identify the General
Fund’s ability over the next five years – on an order of magnitude basis – to continue current services, maintain existing assets
and fund new initiatives or acquire new capital assets. The 2015-20 forecast was completed in early December 2014, before
the City Council considered the 2015-17 Financial Plan for adoption. It is available on the City’s web site at www.slocity.org.
Further updates will be prepared and presented to the City Council in February and June 2017.
Major City Goals and Other Important Objectives. The City Council adopts Major City Goals and Other Important Objectives
as an integral part of the Financial Plan. These goals address the highest priority issues and community-wide concerns and
needs. The Financial Plan is the City’s main tool for programming implementation of these goals, plans and policies by
allocating the resources necessary to achieve them.
The following is a brief summary of the three major City goals and four other important objectives adopted by the Council as
part of the 2015-17 Financial Plan. Detailed work programs were prepared for each of these and their status is updated three
times each year through presentation to the Council. The final progress reports were presented to the City Council in November
2016 and are available on the city’s website.
Major City Goals:
• Open Space Preservation. Protect and maintain open space.
• Multi-Modal Transportation. Prioritize implementation of the Bicycle Transportation Plan and improve and
maintain bicycle, pedestrian, and transit facilities.
• Housing. Implement the Housing Element, facilitating workforce, affordable, supportive and traditional housing
options, including support for needed infrastructure within the City’s fair share.
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TRANSMITTAL MEMORANDUM
Other Important Objectives:
• Neighborhood Wellness. Improve neighborhood wellness, work with residents, Cuesta College, and Cal Poly State
University; increase public safety, code compliance, and collaborative solutions.
• Laguna Lake Recreation. Initiate implementation of the Laguna Lake Natural Reserve Conservation Plan.
• Fiscal Sustainability and Responsibility. Implement the City’s Fiscal Responsibility Philosophy with a focus on
the reduction of unfunded liabilities.
• Downtown. Adopt a Downtown Concept Plan, develop a plan for expansion of Mission Plaza, and improve safety,
infrastructure, and maintenance in the Downtown.
FINANCIAL CONDITION OVERVIEW
Financial results for the year performed better than expected when compared to the budget estimates in virtually all areas of
the City’s operations.
The total General Fund balance increased by $5 million to $29.6 million. Of this amount, $50,020 are non-expendable and
represent prepaid items; $489,056 are restricted for Debt service; $7.1 million is committed for General government programs;
$11.5 million is assigned and includes $11.1 million for the 20% operating reserve (Contingency Fund); and $10.4 million is
classified as unassigned at 2015-16 fiscal year end and includes the net balance of the Local Half Percent Sales Tax. Per City
Council direction, and in conjunction with adopted Council policies, staff will provide a recommendation for the use of any
available fund balance for one-time allocations. This will be based on fund balance analysis and the Five-Year forecast. Of the
$10.4 million in unassigned funds, a total of $5.8 million in one-time funds is allocated with the adopted 2016-17 Supplemental
Budget. The remaining $4.6 million includes $640,000 unassigned in the Local Half Percent Sales Tax sub-fund.
Nonspendable 56,020$
Restricted for:
Debt service 489,056
Committed to:
General government programs 7,185,397
Assigned to:
Contingency fund (20% Minimum reserve)11,092,782
Development services 382,396
Unassigned 10,419,881
Total fund balance 29,625,532$
General Fund - Fund Balance June 30,2016
For the Future: Continue to Focus on Sustainability
Through the adoption of the 2015-17 Financial Plan, the City continues to move along the path of financial sustainability by
strategically expanding existing city programs, reinvesting in critical infrastructure and proposing a few staffing adjustments
to address the most pressing community priorities. The Capital Improvement Plan includes new and significant investment and
reinvestment in critical infrastructure.
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Revenue Base Growth. After experiencing the deepest recession since the Great Depression, the local economy is progressing
and major revenues are continuing the growth that was first realized in 2012-13. Sales tax (including the Half Percent Sales
Tax Measure), Property Tax and Transient Occupancy Tax (TOT) account for 50% of all funding sources in the General Fund.
All of these revenues are showing continuing growth over the past two years which is expected into the future. TOT revenues
exceed their pre-recession peak. Another revenue source that is seeing significant growth is development review fees. Fueled
by strong private development occurring within the community, the revenue levels are also approaching record levels in terms
of amounts received and the level of annual growth. This growth trend is also expected to continue at varying levels over the
next five years, though the City should be cautious about being overly optimistic and taking on long-term costs associated with
potentially fluctuating revenue sources.
Containment of Operating Costs. The City’s efforts to control costs have been successful and are ongoing. The City also
implemented 2nd and 3rd tier retirement benefit programs and now 34% of the workforce is enrolled in the 2nd and 3rd tiers of
the retirement plans. These actions have been instrumental in helping the City contain current costs and long-term liabilities
related to retirement benefit programs. Since 2013-14 the City Council has approved lump sum prepayments against the safety
side fund retirement liability in order to begin making significant reductions in the amount owed.
The first was paid in May 2014 in the amount of $935,000; the second was approved and was paid as part of the 2014-15 budget
in the amount of $300,000. An additional $750,000 was approved and paid with the 2015-16 budget. With the 2016-17
Supplemental Budget, the Council appropriated another $750,000 for prepayment of the unfunded retirement liability.
Infrastructure and Facilities Maintenance. The estimated cost of adequately maintaining, repairing or replacing existing
General Fund facilities, infrastructure and equipment exceeds $10 million annually. This excludes any enhancements or
“betterments.” To place this in context, General Fund contributions to the Capital Improvement Program (CIP) for the 12-year
period ending in 2006-07 averaged about $3.8 million annually. The budget for the General Fund’s contributions to the CIP
was reduced to $1.7 million for 2010-11. It then increased to $3.4 million the following year and in 2012-13 the General Fund
contributed nearly $3.5 million. In 2013-14, that amount grew to nearly $7.3 million with the addition of $2.0 million from
one-time monies taken from the General Fund reserve amount that exceeds the minimum 20% level. In 2014-15, the General
Fund contribution was $2.4 million with an additional $7.5 million coming from grant sources and $7.8 million coming from
tax-exempt debt proceeds. These figures do not include the General Fund support of the Capital Improvement Program that
occurs in the form of annual debt service payments that approximate $3.0 million per year. In 2015-16 $7.1 million of Local
Revenue Measure sales tax was allocated toward Capital Improvement Program. The City Council has indicated through the
adoption of budget policies that an adequate CIP to maintain existing facilities will continue to be a priority.
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Ongoing Commitment to Half Percent Sales Tax Measure Priorities (Essential Services Measure)
The City remains committed to addressing the priorities identified by the community as established through the budget process,
such as public safety, senior services, code enforcement, neighborhood street paving, open space preservation, traffic
congestion relief and flood protection. The following summarizes how the Half Percent Sales Tax Measure funds were used
during 2015-16.
Total Half Percent Sales Tax Measure G expenditures during 2015-16 were $8.5 million (including encumbrances and
carryovers); the remaining balances of these resources are designated for future year expenditures. A more detailed schedule
of Half Percent Sales Tax Measure sources and uses is provided in the Financial Section of this report.
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
10,000,000
General Fund Transfers to Capital
Improvement Fund
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TRANSMITTAL MEMORANDUM
Operating Capital
Programs Projects*Total
Preservation of Essential Services
Public Safety 705,843 432,918 1,138,761
Community Development 235,375 30,076 265,451
Public Works 1,025,346 1,271,305 2,296,651
Parks 117,060 776,247 893,307
Total Preservation of Essential Services 2,083,624 2,510,546 4,594,170
Open Space Preservation - 286,914 286,914
Total 2,083,624$ 2,797,460$ 4,881,084$
Half Percent Sale Tax Measure Revenues & Uses Summary
Revenues:
Sales and use tax - Measure G 1/2 Cent add-on tax 7,178,159$
Use of money and property 9,043
Total Revenues 7,187,202
Uses:
Operating Programs (2,083,624)
Capital Projects (2,797,460)
Total Uses (4,881,084)
Excess of revenues over expenditures 2,306,118
Prior Sales Tax Measure Balance 2,426,279
Encumbered or designated for carryover for future year expenditures (3,618,008)
Net available for future year appropriations 1,114,389$
Half Percent Sales Tax Measure Expenditures 2015-16
* Detail of Capital Projects is included with other supplementary information in the financial statements,
which can be found on page 104.
RELEVANT FINANCIAL POLICIES
The City of San Luis Obispo has adopted a comprehensive set of financial policies to provide guidance for all fiscal activities
and resource allocation decisions. Although the policies cover virtually every aspect of financial management, several of these
policies are particularly relevant to an understanding of the City’s financial performance in 2015-16.
Debt Administration Policies
The City’s Capital Financing and Debt Management policies contain general guidelines for refinancing of outstanding debt.
These guidelines call for periodic review of all outstanding debt to determine refinancing opportunities, particularly to create
economic benefit such as lower debt service payment or reduction of principal.
Information on the City’s outstanding debt issues and other long-term liabilities is provided in Note 6 in the notes to the financial
statements.
The City received (December 2014) affirmation from nationally recognized statistical rating organization Fitch Ratings that
City bond ratings are “AA” and “AA+”, and the rating outlook is stable. Fitch Ratings’ long-term credit ratings are assigned
on an alphabetic scale from AAA to D. The bond rating AA means that the City’s investment grade is “quality”. The City’s
2006, 2009 and 2012 Lease Revenue Bonds are rated AA, and the City’s implied General Obligation bond rating is AA+. At
this time, the City of San Luis Obispo has no general obligation debt.
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In reaching its decision, Fitch Ratings’ analysts lauded the City’s “excellent financial management.” The analysis noted factors
that led to their conclusion including (1) active budget monitoring by the City Council and staff, (2) comprehensive financial
policies, and (3) the use of long-term budget planning to provide a solid framework for managing through unexpected budgetary
challenges during the economic downturn. Fitch analysts noted that the City has successfully implemented cost control
measures that included shifting employee pension contributions to employees thereby sharing responsibility while also avoiding
across-the-board pay increases. The City’s sparing use of bonded debt was also highlighted.
Moody’s credit rating agency reviewed the City’s General Fund obligation bonds and issued an upgrade from A1 rating to Aa3
(rated as top quality and very low credit risk) rating for the 2006 Lease Revenue Bonds as follows. This rating was based on
the agency’s recent detailed surveillance review of the City’s financial conditions and the rating methodology released by
Moody’s in July of 2016.
Budgetary Policies
The City of San Luis Obispo has a policy that requires the adoption of a balanced budget over the two-year period of the
Financial Plan. This means that operating revenues must fully cover operating expenditures, including debt service.
Additionally, ending fund balance (or working capital in the enterprise funds) must meet minimum policy levels. Under this
policy it is allowable for total expenditures to exceed revenues in a given year but only when fund balance is used to pay for
capital improvement plan projects or other “one-time,” nonrecurring expenditures.
Fund Balance and Reserve Policies
The City’s policies recognize the importance of long-range planning in managing the City’s fiscal affairs in order to provide
for stable operations, promote more orderly spending patterns, and assure the City’s long-term fiscal health. The reserves
contained in the General Fund and Enterprise Funds play a pivotal role in this strategy. The reserve policies call for a minimum
fund balance of at least 20% of operating expenditures in the General Fund and a working capital level of 20% of operating
expenses in the Water, Sewer, and Parking Enterprise Funds. The policies also require the Fleet Management Information
Technology Replacement Funds to provide for the timely replacement of vehicles and equipment as well as IT equipment and
software.
Pension and Other Post-Employment Benefits
Pension Obligations. The City contributes to the California Public Employees’ Retirement System (CalPERS), an agent
multiple-employer public employee defined benefit pension plan. CalPERS provides retirement and disability benefits, annual
cost-of-living adjustments and death benefits to plan members and beneficiaries. CalPERS acts as a common investment and
administrative agent for participating public entities within the State of California. Benefit provision and all other requirements
are established by State statute and City ordinance. The amount of the City’s required annual contribution is determined
actuarially and is reported to the City via the Annual Valuation Reports provided by CalPERS for each retirement plan.
It is the policy of the City to fully fund the annual contribution to ensure that the plan will be able to fully meet its obligation
to retired employees on a timely basis. 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. Members of the Police Officers Association contribute 3% of pay
toward the cost of the City’s share of the annual required contribution. Starting with FY 2015-16, public agencies are billed a
contribution rate as a percentage of payroll plus lump sum dollar payment toward the City’s unfunded liability. Prepaying the
City’s unfunded liability should reduce overall annual costs depending on whether actuarial approved actuarial assumptions
are realized and are not adjusted by the CalPERS’ Board.
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TRANSMITTAL MEMORANDUM
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. And due to CalPERS purchasing power, the City has continued to experience
competitive health care rates since then. However, as a condition of joining the CalPERS health program, the City agreed to
contribute the minimum amount required by law per month 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 has established certain post-retirement health care benefits available to executive management employees
appointed prior to August 2000. For the 5 former employees, one-half of the retiree health insurance premiums are paid by the
City if they elect to remain members of the City's group health plan. This provision ceases upon the death of the retired
employee or upon the retired employee reaching age 65.
These OPEB benefits were financed on a pay-as-you-go basis in the past. As directed by Council in May 2008, the City began
fully pre-funding the OPEB obligation via an irrevocable trust in 2008-09. In 2015-2016, the City paid $250,000 towards the
OPEB liability in addition to the annual required contribution.
Additional information on the City’s retirement and post-employment benefits can be found in Note 7 in the notes to the
financial statements.
MAJOR INITIATIVES
The City continued its efforts on a number of significant initiatives in 2015-16 which had a beneficial effect on fiscal health
and quality of life.
Fiscal Sustainability and Responsibility
An organizational focus continued for Fiscal Sustainability and Responsibility into 2015-16 fiscal year as the City adopted an
Other Important Objective to sustain the City’s short and long-term fiscal health, preserve public health and safety in line
with residents’ priorities and with a focus on the reduction of unfunded liabilities. Key elements of the City’s Fiscal
Responsibility Philosophy include:
• Continuing emphasis on effectiveness and efficiency of the City organization.
• Identify and address long-term liabilities that are important to the City’s fiscal sustainability through shared
responsibility of retirement benefits between employees and the City.
• Increase transparency related to labor negotiations and employee compensation matters.
• Investments aligned with community needs and priorities.
• Diverse revenue sources aligned with expenditures and community priorities.
• Continuing to closely review and monitor the City’s fiscal condition.
Two initiatives in this area are particularly worth noting:
Monitoring of the City’s Fiscal Condition. A presentation was made to the City Council in February and April 2015 as part
of the City’s budget process to prioritize and create a strategy regarding the use of one-time funding. Based on community
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TRANSMITTAL MEMORANDUM
feedback and adopted policies, the City Council prioritized the future use of one-time funding as follows: (1) pay down
CalPERS Safety Pool (2) pay down OPEB liability (3) invest in roads and (4) replace equipment. This guidance was adopted
by Council as policy in December 2016.
This key strategic financial action continues the City’s progress in addressing long-term liabilities and key infrastructure and
equipment needs. In 2013-14, the City made a prepayment against its unfunded retirement liabilities in the amount of $935,000.
A second prepayment in the amount of $300,000 was made in July 2014. With the 2015-17 Financial Plan an additional
$750,000 was allocated to prepay a portion of the pension liability and $250,000 as a prepayment to the OPEB. Also, the budget
added $275,000 to deferred road maintenance, $450,000 to the City’s fleet replacement, and $450,000 for information
technology equipment replacement. The 2016-17 Supplemental Budget allocates an additional $750,000 toward prepayment
of pension unfunded liability, and $250,000 toward OPEB unfunded liability.
With 2016-17 Supplemental Budget, the Council adopted Efficiency & Effectiveness Initiative to address internal services
infrastructure and allocating $1.9 million toward information technology infrastructure. The initiative directly responds to the
Fiscal Sustainability and Responsibility Philosophy (Resolution No. 10546 – 2014 Series). The objective of the initiative is to
re-design business processes to align with modern technology to increase efficiency, effectiveness and transparency.
With implementation of the pension reporting that are required by Governmental Accounting Standards Board Statement No.
68, the impact was significant, however, the City maintained and continues to have significant margin of assets that are greater
than liabilities after the inclusion of the unfunded liability in the City’s balance sheet. The City Council took a further step to
monitor both the cost and liability trends that relate to retirement programs and will continue to implement the City Council
adopted policy to prepay unfunded liabilities as financial conditions allow for this to occur.
Local Sales Tax Measure. The local half-percent sales tax revenue was approved by City voters with 70% of the vote in
November 2014. As part of the local sales tax measure, the Revenue Enhancement Oversight Committee (REOC) was
established to review, report, and makes recommendations to the City Council regarding the revenue and expenditures of the
City's voter-approved general purpose, half-percent sales tax. The REOC consists of five members who must be residents and
registered voters of the City.
Economic Development Strategic Plan.
The City’s 2012 Economic Development Strategic Plan (EDSP) provides a prioritized list of strategic actions aimed at
overcoming barriers to job creation and nurturing the conditions, relationships, and resources that enable and encourage the
private sector to create head of household jobs on a consistent basis while continuing to support the broader economy of the
City. To create and implement these efforts, the EDSP identified the City’s fee program and its lack of infrastructure in key
areas as barriers to overcome, and is in the process of implementing strategies to improve the economic environment for job
creation in the City. The EDSP builds on the San Luis Obispo County Economic Strategy, which identified five industry clusters
with the greatest potential to drive local and regional economic prosperity, and job creation. The EDSP focuses on partnerships
and collaborative efforts with community partners including the Economic Vitality Corporation, the Chamber of Commerce,
the Small Business Development Center, California Polytechnic State University and Cuesta College.
In 2013-14, the City implemented an important component of the strategic plan by holding a series of study sessions with the
City Council regarding alternatives available for financing new infrastructure projects in the City. The project resulted in several
recommendations that will be implemented in coming years, and provided a “primer” to be used as a resource for decision
makers when considering future decisions about infrastructure financing. There are two major projects on the horizon that will
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TRANSMITTAL MEMORANDUM
set the stage for important investments in City infrastructure in the future. These include the update to the City’s impact fee
programs following the adoption of the Land Use and Circulation Element update, and the second is the creation of a method
to prioritize and enable City investment in infrastructure projects that have a public benefit but might not otherwise happen
without City action. In December 2016, the Council adopted public infrastructure financing policies to provide with systematic
selection, implementation, and assembly of funding to construct needed public facilities and infrastructure.
Downtown Development Projects
A joint study session of the Council and the Planning Commission resulted in feedback on the both the Downtown Concept
Plan and Mission Plaza Master Plan. Chinatown and Garden Street Terraces continue construction. Monterey Street has seen
the opening of H&M, Williams Sonoma, Lululemon and more. Significant infrastructure maintenance work continues in the
Downtown on a regular basis from street including the frequent steam cleaning of Bubble Gum Alley.
AWARD FOR EXCELLENCE IN FINANCIAL REPORTING
The Government Finance Officers Association of the United States and Canada (GFOA) has awarded a Certificate of
Achievement for Excellence in Financial Reporting to the City for our CAFR for the fiscal year ended June 30, 2015.
The Award Program
The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for
preparation of State and local government financial reports.
In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently
organized comprehensive annual financial report whose contents conform to program standards. This report must satisfy both
U.S. generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. The City has received a Certificate of Achievement each
year since 1984. We believe our current CAFR continues to conform to the Certificate of Achievement program requirements,
and we are submitting it to GFOA to determine its eligibility for another certificate.
Value of Program Participation. There are a number of benefits to participating in these programs beyond simply receiving
recognition for our 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
our reports from a “fresh” perspective are received. The City believes that this results in continuous improvements in reporting
our financial results to elected officials, staff and other interested parties such as bondholders, credit agencies and the public
at-large.
ACKNOWLEDGMENTS
The preparation and development of this report would not have been possible without the year-round dedication of the Finance
Division staff and their special efforts, working in conjunction with the City's independent auditors, to produce this document.
xviii
xx
DIRECTORY OF OFFICIALS AND ADVISORY BODIES2
CITY COUNCIL
Jan Howell Marx Mayor
Dan Carpenter Vice Mayor
John Ashbaugh Council Member
Carlyn Christianson Council Member
Dan Rivoire Council Member
ADVISORY BODIES
Administrative Review Board
Architectural Review Commission
Bicycle Advisory Committee
Construction Board of Appeals
Cultural Heritage Committee
Housing Authority
Human Relations Commission
Investment Oversight Committee
Jack House Committee
Mass Transportation Committee
Parks and Recreation Commission
Personnel Board
Planning Commission
Promotional Coordinating Committee
Revenue Enhancement Oversight Commission
Tourism Business Improvement District Board
Tree Committee
Zone 9
APPOINTED OFFICIALS AND DEPARTMENT HEADS
Appointed Officials
Katie Lichtig City Manager
J. Christine Dietrick City Attorney
Department Heads
Derek Johnson Assistant City Manager/Interim Finance Director
Michael Codron Director of Community Development
Garret Olson Fire Chief
Monica Irons Director of Human Resources
Deanna Cantrell Police Chief
Daryl Grigsby Director of Public Works
Carrie Mattingly Director of Utilities
Shelly Stanwyck Director of Parks & Recreation
2 The list represents those persons in the positions as of June 30, 2016.
xxi
MISSION STATEMENT
SAN LUIS OBISPO STYLE
Quality with Vision
WHO ARE WE?
People Serving People
A team that puts high value on each citizen it serves.
Providers of programs that meet basic service needs of each citizen.
Enhancers of the quality of life for the community as a whole.
WHAT DO WE STAND FOR?
Quality in all Endeavors – Pride in Results
Service to the community – the best – at all times.
Respect – for each other and for those we serve.
Value – ensuring delivery of service with value for cost.
Community involvement – the opportunity to participate in attaining the goals of the City.
WHERE ARE WE GOING?
Into the Future with a Design
Planning and managing for levels of service consistent with the needs of the citizens.
Offering skills development and organizational direction for employees in order to improve the
delivery of municipal services.
Developing sources of funding and establishing a sound financial management program which will
result in fiscal independence and flexibility in the delivery of City services.
Providing the residents of the City with accurate and timely information on issues which affect them,
and encouraging the full utilization of City services.
Promoting the City as a regional trade, recreational and tourist center and improving the quality of
life for residents and visitor.
xxii
ORGANIZATIONAL VALUES
We, as an organization, embrace opportunities to improve our services and the quality and effectiveness of
our relationships with the community and our teams. The following values guide and inspire our efforts.
Shared Vision, Mission and Goals
We have a sense of common purpose and direction pursued with passion and translated into concrete actions.
Service
We are dedicated to the best use of resources to fulfill identified community goals and needs.
Leadership and Support
We recognize that the ability to lead can be found at all levels and that to create an environment to succeed
requires leading by example.
Communication
We foster open and clear discussion that encourages the willingness to speak up and to listen, within a
framework of respect and understanding.
Team Players
We encourage effective working relationships within and between departments and the public to address
issues and achieve valuable results.
Honesty, Respect and Trust
We honor commitments, acknowledge legitimate differences of opinion and accept decisions reached with
integrity.
Initiative and Accountability
We take personal responsibility to do what needs to be done and report the results in a straightforward
manner.
Innovation and Flexibility
We are open to change and willing to try new ways to fulfill the organization’s vision, mission, and goals
more effectively.
xxiii
Employee Development and Recognition
We encourage and support each employee to improve relevant job skills and celebrate personal and team
accomplishments.
Stewardship and Ethics
We promote public trust by using City resources wisely, and through consistent fulfillment of these values.
xxiv
ORGANIZATION OF THE CITY OF SAN LUIS OBISPO
CITIZENS
Patrol Fire, Medical & Haz Mat Engineering Water Long Range Planning
Traffic Safety Emergency Response Transportation Sewer Development Review
Investigations Hazard Prevention Creek & Flood Protection Utilities Resource Building & Safety
Neighborhood Services Fire Inspections Maintenance Services: Conservation CDBG Administration
Animal Regulation Disaster Planning Streets, Parks, Bldgs Whale Rock Reservoir Housing
Recreation Programs Recruitment Budget Natural Resources
Ranger Services Labor Relations Accounting & Revenue Economic Development
Park Planning Fair Employment Information Technology Cultural Activities
Golf Course Risk Management GIS Management City Clerk Services
Public Art Human Relations Support Services General Administration
Appointed by the City Council Dept Appointed by the City Manager
ADVISORY
BODIES
CITY
ATTORNEY
CITY
MANAGER
MAYOR AND
CITY COUNCIL
Public
WorksFirePolice Utilities
Community
Development
Administration
Finance &
Information Tech
Human
Resources
Parks &
Recreation
FINANCIAL SECTION
2
The Honorable City Council of the
City of City of San Luis Obispo, California
Page 2
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial
position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund
information of the City of San Luis Obispo, California, as of June 30, 2016, and the respective changes in financial
position and, where applicable, cash flows thereof for the year then ended, in accordance with accounting principles
generally accepted in the United States of America.
Other Matters
Requirement Supplementary Information
Accounting principles generally accepted in the United States of America require that management's discussion and
analysis and required supplementary information as listed in the table of contents be presented to supplement the basic
financial statements. Such information, although not a part of the basic financial statements, is required by the
Governmental Accounting Standards Board, who considers it to be an essential part of the financial reporting for placing
the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain
limited procedures to the required supplementary information in accordance with auditing standards generally accepted
in the United States of America, which consisted of inquiries of management about the methods of preparing the
information and comparing the information for consistency with management’s responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not
express an opinion or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the
City’s basic financial statements. The introductory section, Half Percent Sales Tax Measure funding summary schedules
on pages 104 through 106, combining and individual nonmajor fund financial statements and schedules on pages 108
through 132, and statistical section, are presented for purposes of additional analysis and are not a required part of the
basic financial statements.
The Half Percent Sales Tax Measure funding summary schedule and combining and individual nonmajor fund financial
statements and schedules are the responsibility of management and were derived from and relate directly to the underlying
accounting and other records used to prepare the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including
comparing and reconciling such information directly to the underlying accounting and other records used to prepare the
basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance
with auditing standards generally accepted in the United States of America. In our opinion, the Half Percent Sales Tax
Measure funding summary schedule and combining and individual nonmajor fund financial statements and schedules are
fairly stated in all material respects in relation to the basic financial statements as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the
basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them.
3
The Honorable City Council of the
City of City of San Luis Obispo, California
Page 3
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 19, 2016, 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 the 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.
Glenn Burdette Attest Corporation
San Luis Obispo, California
December 19, 2016
Management’s Discussion and Analysis
The following provides a narrative overview and analysis of the financial activities of the City of San Luis Obispo
(City) for the fiscal year ended June 30, 2016. It should be read in conjunction with the accompanying transmittal
memorandum and the basic financial statements.
Financial Highlights
A significant impact to the city of implementing GASB Statement No. 68 in fiscal year 2014-15 is the reporting of the
City’s unfunded pension liability on full accrual basis of accounting government-wide financial statements. There are
also new note disclosure requirements and supplementary schedules required by the Statement. The measurement date
for the fiscal year 2015-16 pension liabilities is as of June 30, 2015. 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 2015‐16 are reported as deferred outflows of resources in accordance with GASB
Statement No. 71
The following outlines financial highlights for the year, which are detailed in the table on page 8 of the MD&A.
• The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows at June 30,
2016 by $297 million (net position). The City’s unrestricted net position was negatively impacted starting in
fiscal year 2014-15 with the implementation of GASB Statement No. 68, Accounting and Financial Reporting
for Pensions. More information on the City’s plans can be found in Note 7 on pages 61-75 of this report.
• Total city-wide assets increased by approximately $24 million or 4.8%. In the governmental activities, amounts
receivable from various sources increased by $522,000; cash and investment balances increased by $2.8 million;
prepaid expenses decreased by $787,000 and Cash Held with Fiscal Agent increased by $405,000.
• In business-type activities, amounts receivable increased by $2.5 million or 29.6% while cash and investment
balances decreased by $491,000 or 1%. City-wide liabilities increased by approximately $3.4 million during the
fiscal year. This increase is due primarily to the net pension liability adjustment the City is required to record with
the implementation of GASB Statement No. 68 in fiscal year 2014-15. Governmental activities experienced an
increase of $4.4 million due primarily to the increase in the net pension liability of $6.1 million and a decrease in
long-term liabilities of $2.1 million. Business-type activities saw a decrease in long-term liabilities of $2.9
million and an increase in net pension liability of $692,000.
• The City’s governmental funds altogether reported combined ending fund balances of $50 million.
Approximately $39.1 million or 78% of this total amount is not available for new spending because it represents
amounts that are: (1) restricted for debt service, (2) grant obligations, (3) prepaid for insurance obligations, or (4)
is already committed to specific programs like impact fee programs and general capital outlay. From this amount,
$12 million is assigned as of June 30, 2016 to meet expenditures in subsequent years in the form of purchase
order encumbrances and unspent appropriations that have been rolled over into fiscal year 2016-17 in accordance
with the City’s budget policies.
4
Management’s Discussion and Analysis
• The total General Fund balance increased by $5.8 million to $29.6 million. This reflects the steady increase in
revenues over the prior year and greater than expected expenditure savings. After the adjustments to reflect
amounts committed to the Half Percent Sales Tax Measure reserve ($3.6 million); debt service & prepaid expenses
reserve ($545,000); purchase encumbrances and other future expenses ($3.6 million); designated reserves for
Development Services ($382,000); and the amount required to be maintained to meet the 20% minimum reserve
requirement (11.1 million), $10.4 million remains as unassigned balance at June 30, 2016.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements, which
have the following components: (1) government-wide financial statements, (2) fund financial statements and (3) notes
to financial statements. This report also contains required supplementary information (RSI) as well as other
supplemental financial information.
Government-wide Financial Statements. This set of statements is designed to provide readers with a broad overview
of the City’s finances, in a manner similar to private-sector business reporting.
The Statement of Net Position presents financial information on all the City’s assets/deferred outflows of sources and
liabilities/deferred inflows of sources, with the difference reported as net position. Over time, increases or decreases
in net financial position may serve as a useful indicator of whether the financial position of the City is improving or
declining. However, the net position reported for fiscal year 2015-16 includes pension liabilities required under GASB
Statement No. 68. This means that disclosed pension liabilities must be included in the City’s Statement of Net
Position.
The Statement of Activities presents information showing how the government’s net position changed during the most
recent fiscal year. All changes in net position are reported during the period when the underlying event giving rise to
the change occurs, 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.
Both of the government-wide financial statements distinguish functions of the City that are principally supported by
taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all
or a significant portion of their costs through user fees or 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 so data from these units are combined with data of the primary government.
5
Management’s Discussion and Analysis
The San Luis Obispo Capital Improvement Board (Board) is reported as a blended component unit in these statements.
The Board provides financing for the construction and acquisition of City facilities. The Board consists of members
of the City Council. Activities of the Board are accounted for in the applicable City governmental or enterprise fund.
Separate financial statements are not prepared for the San Luis Obispo Capital Improvement Board. The City has no
component units that require discrete presentation in accordance with Governmental Accounting Standards Board
(GASB) standards.
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
sources 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 financing 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 considered to be major funds. Data from the major governmental funds are combined into a
single, aggregated presentation. Individual fund data for each of the non-major governmental funds is provided in the
form of combining statements in the supplementary information section in this report.
Of the major funds, the City adopts an annual appropriated budget for all funds. A budgetary comparison statement
has been provided as required supplementary information to demonstrate compliance with the budget. Budgetary
information for non-major governmental funds with annual budgets has been provided with the fund financial
statements in the supplementary information section in this report.
Proprietary Funds. Proprietary funds are generally used to account for services for which the City charges customers;
either outside customers or internal units/divisions of the City. Proprietary funds provide the same type of information
as shown in the government-wide financial statements, only in more detail.
6
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. Agency 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 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 an agency 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 Agency Funds are presented
with the fund financial statements in the supplementary information section.
Notes to the Financial Statements. The notes provide additional information that is essential to the reader for a full
understanding of the data provided in the government-wide and fund financial statements.
Other Information. In addition to the basic financial statements and accompanying notes, this report also presents
required supplementary information including budgetary comparison schedules, reporting of the Half Percent Sales
Tax Measure and more detailed information concerning the City’s net pension liability, schedule of contributions to
the pension plan and progress in funding its obligation to provide other post-employment benefits (OPEB).
Statistical Information. The statistical section presents detailed information as a context for understanding what the
information in the financial statements, notes disclosures, and required supplementary information indicates about the
City’s overall financial health.
7
Management’s Discussion and Analysis
Government-wide Overall Financial Analysis
Statement of Net Position Net position may serve over time as useful indicator of a government’s financial position.
The following is the condensed statement of net position for the fiscal years ended June 30, 2016 and 2015.
CONDENSED STATEMENT OF NET POSITION
2015-16 2014-15 2015-16 2014-15 2015-16 2014-15
Current and other assets 55,864,955$ 52,971,289$ 76,077,990$ 68,017,192$ 131,942,945$ 120,988,481$
Capital assets 192,587,660 180,623,778 179,110,936 179,163,771 371,698,596 359,787,549
Total assets 248,452,615 233,595,067 255,188,926 247,180,963 503,641,541 480,776,030
Total Deferred Outflows of
Resources 16,760,309 8,648,893 3,241,231 1,785,745 20,001,540 10,434,638
Current liabilities 8,730,861 8,415,818 6,373,450 5,181,918 15,104,311 13,597,736
Noncurrent liabilities 128,476,670 124,396,075 68,826,211 71,048,967 197,302,881 195,445,042
Total liabilities 137,207,531 132,811,893 75,199,661 76,230,885 212,407,192 209,042,778
Total Deferred Inflows of
Resources 11,074,907 14,072,781 3,066,273 2,555,622 14,141,180 16,628,403
Net position:
Net investment in capital
assets 163,449,992 150,430,226 128,390,611 125,801,845 291,840,603 276,232,071
Restricted 2,762,387 2,350,838 2,278,392 2,261,213 5,040,779 4,612,051
Unrestricted (49,281,893) (57,421,778) 49,495,220 42,117,143 213,327 (15,304,635)
Total Net Position 116,930,486$ 95,359,286$ 180,164,223$ 170,180,201$ 297,094,709$ 265,539,487$
Governmental Activities Business-Type Activities Total
For the City, total assets and deferred outflows of resources were greater than liabilities and deferred inflows of
resources by $297 million at June 30, 2016. The largest portion of the City’s net position reflects its investment in
capital assets in the amount of $291.8 million (e.g. land, buildings infrastructure, machinery, and equipment), less any
related outstanding debt used to acquire those assets. The City uses these capital assets to provide services to citizens;
consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is
reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from
other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
Information about changes in net position for fiscal years 2015-16 and 2014-15 is summarized below. Reasons for the
changes are discussed in the following sections for governmental activities and business-type activities.
8
Management’s Discussion and Analysis
2015-16 2014-15 2015-16 2014-15 2015-16 2014-15
Revenues:
Program Revenues:
Charges for services 13,389,217$ 12,334,078$ 44,413,190$ 44,009,188$ 57,802,407$ 56,343,266$
Operating grants and contributions*2,667,058 2,509,323 2,888,820 3,148,652 5,555,878 5,657,975
Capital grants and contributions 9,355,707 7,911,867 60,063 9,355,707 7,971,930
General Revenues:
Sales taxes (Including 1/2 percent local Sale Tax)24,676,377 22,408,980 24,676,377 22,408,980
Property taxes 10,186,858 9,631,890 10,186,858 9,631,890
Transient occupancy tax 7,127,756 6,805,742 7,127,756 6,805,742
Utility users tax 5,413,720 5,211,207 5,413,720 5,211,207
Property tax in lieu of VLF 4,113,244 3,849,341 4,113,244 3,849,341
Other taxes and fees 4,029,438 4,993,285 4,029,438 4,993,285
Investment earnings 825,760 467,348 845,906 361,627 1,671,666 828,975
Miscellaneous and other 771,154 707,781 239,200 1,010,354 707,781
Total revenues 82,556,289 76,830,842 48,387,116 47,579,530 130,943,405 124,410,372
Program expenses:
Public safety 29,434,446 26,881,732 29,434,446 26,881,732
Public utilities 28,978,571 27,260,255 28,978,571 27,260,255
Transportation 8,837,653 11,457,311 7,988,475 7,550,831 16,826,128 19,008,142
Culture and recreation 9,846,670 10,332,740 9,846,670 10,332,740
Community development 12,950,900 10,960,778 12,950,900 10,960,778
Interest on long-term debt 1,351,468 1,015,011 1,351,468 1,015,011
Total expenses 62,421,137 60,647,572 36,967,046 34,811,086 99,388,183 95,458,658
Increase (decrease) in net position before transfers 20,135,152 16,183,270 11,420,070 12,768,444 31,555,222 28,951,714
Transfers 1,436,048 (329,452) (1,436,048) 329,452 - -
Change in net position 21,571,200 15,853,818 9,984,022 13,097,896 31,555,222 28,951,714
Net position - beginning of year 95,359,286 182,615,977 170,180,201 176,131,601 265,539,487 358,747,578
Prior year restatement (103,110,509) (19,049,296) (122,159,805)
Net position - end of year 116,930,486$ 95,359,286$ 180,164,223$ 170,180,201$ 297,094,709$ 265,539,487$
Governmental Activities Business-Type Activities Total
SUMMARY OF CHANGES IN NET POSITION
*Operating grants and contributions in the current year represent the net amount after deducting general government
grants and contributions as this activity nets to zero.
Governmental Activities. The City’s net position in the Governmental activities increased $21.6 million to $116.9
million at June 30, 2016 as a result of revenues exceeding expenses. The City is continuing to see growth in its
revenue base and realized savings in the General Fund above the level anticipated in the fiscal year 2015-16 budget.
As part of this growth trend, more private development is taking place which is generating more development related
permit revenues in the form of development-related impact and in-lieu fees which are held until needed for planned
capital outlay.
A portion of the City’s net position, $5.0 million, is subject to restrictions imposed by external parties and its use is
determined by those restrictions and contractual agreements. This is the second year of the GASB 68 Statement
implementation by the City. The governmental activities contributed roughly $17.5 million and business-type
activities contributed roughly $10.4 million for a total increase in the net position of $27.9 million compared to
June 30, 2015.
9
Management’s Discussion and Analysis
The total general revenue increased from fiscal year 2014-15 by 7%. Revenues are divided into charges for services
and general revenues in the following table. Charges for services are revenues directly related to service activity,
operating and capital grants and contributions, and related investment earnings.
General revenues represent 69% of the total revenue and are used to pay costs of providing program services.
Revenues 2015-16 2014-15 Inc / (Dec)%
Charges for services 13,389,217$ 12,334,078$ 1,055,139$ 9%
Operating grants and contributions 2,667,058 2,509,323 157,735 6%
Capital grants and contributions 9,355,707 7,911,867 1,443,840 18%
General Revenues:
Sales taxes (Including 1/2 percent local Sale Tax)24,676,377 22,408,980 2,267,397 10%
Property taxes 10,186,858 9,631,890 554,968 6%
Transient occupancy tax 7,127,756 6,805,742 322,014 5%
Utility users tax 5,413,720 5,211,207 202,513 4%
Property tax in lieu of VLF 4,113,244 3,849,341 263,903 7%
Other taxes and fees 4,029,438 4,993,285 (963,847) -19%
Investment earnings 825,760 467,348 358,412 77%
Miscellaneous and other 771,154 707,781 63,373 9%
Total governmental revenues 82,556,289$ 76,830,842$ 5,725,447$ 7%
GOVERNMENTAL ACTIVITY CHANGE IN REVENUE
Top Governmental Activity Revenue Sources. As shown in the graph below, our top five tax revenues accounted
for almost 62% of total revenues, with service charges accounting for another 16%. Generally, revenues for fiscal
year 2015-16 increased from those of the prior fiscal year.
10
Management’s Discussion and Analysis
The following narrative addresses the significant variances in key revenues from the prior fiscal year:
• Sales Tax. Sales Tax increased by $2.26 million over the prior year. This increase reflects the end of the
“trip flip” apportionments from the State, which resulted in a one-time increase in cash flow.
• Property Tax. Property tax revenue increased by $555,000 or 6%.
• Transient Occupancy Tax (TOT). Increased by $322,000 or 5% over the prior year.
• Charges for Services. These revenues increased by approximately $1.1 million over 2014-15. In the
General Fund, charges for services increased significantly over the prior year due to the growth in private
development application fees.
• Capital Grants and Contributions. These revenues increased by $1.4 million as a result of the
construction of the LOVR interchange project.
• Program Expenses: Governmental Activities. Program expenses increased by $1.8 million or 2.9% over
the prior fiscal year. Police and Community Development services increased while Transportation and
Parks services decreased. An additional factor in the increase is also the net effect of the application of
the GASB Statement No. 68 implementation in 2014-15.
The following chart compares program revenues and expenses which is useful when reviewing the costs of
government cost centers:
11
Management’s Discussion and Analysis
Business-Type Activities. The City’s Business-type activities increased $9.98 million to $180.2 at June 30, 2016
Revenue Sources: Business-Type Activities. Operating revenues for services reflect an increase of $808,000 or 1.7%
over the prior fiscal year. This reflects growth in service charges in the Parking fund and significant reductions in the
Water and Sewer funds as follows:
1. Water revenues. Total operating revenues decreased $562,000. General water impact fees decreased by $929,000
or 38% compared to the prior year which are collected for infrastructure to support new development.
2. Sewer charges. The overall decrease of $1.6 million over the prior year is from sewer charges affected by water
use reduction as a consequence of the drought.
3. Parking Fees. In fiscal year 2015-16 the Parking Fund received $2.6 million for in-lieu payments from the
Chinatown development project.
Program Expenses: Business Type Activities. The program expenses for the proprietary funds increased by $2.2
million or 6.2% over the prior fiscal year. The increase reflects the fact that each of the Water and Sewer funds saw
increases in their operating program costs by $1.7 million due to increases in the costs of salaries, supplies and
maintenance.
While revenues exceeded expenses for nearly all of the business type activities, the level of revenue compared to prior
year declined for both Water and Sewer funds as opposed to the Parking fund, which experienced a significant increase
in revenue due to a one-time receipt of parking-in lieu fees.
12
Management’s Discussion and Analysis
Financial Analysis of Governmental Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements. The following funds have been classified as either governmental or proprietary fund types.
Governmental Funds. The focus of the City’s governmental funds is on near-term inflows, outflows and balances of
spendable resources. Such information is useful in assessing the City’s financing requirements. In particular,
unassigned fund balance serves as a useful measure of a government’s net resources available for spending at the end
of the fiscal year.
• As of June 30, 2016, the City’s governmental funds reported combined ending fund balances of $50 million,
or an increase of $3 million compared to the prior fiscal year. The total fund balance of the governmental
funds consists of the following:
o Non-spendable fund balance of $56,000 represents prepaid items.
o Restricted fund balance of $2,632,000 which have restrictions imposed by external parties or
enabling legislation. Funds in this category include Debt Services fund and Supplemental Law
Enforcement Funds.
o Committed fund balance of $21,981,000, which have reserves for capital outlay, impact fees
programs, general government programs, housing and the net balance of the Half Percent Local
Sales Tax.
o Assigned fund balance of $15,035,000, which includes the amounts to be used for specific purposes
of the City but do not meet the criteria to be classified as restricted or committed. Funds in this
category included Contingency funds (20% minimum reserve) and funds to be used for
Development Services.
o Unassigned fund balance of $10,420,000 as of June 30, 2016. The 2016-17 budget allocates
$5,832,000 of this fund balance with the remaining fund balance of $4,587,000 available for
spending in accordance with the City’s budget and fiscal policies. The remaining $4,587,000
includes $640,000 in unassigned balance in the Local Half Percent Sales Tax sub-fund.
Major Governmental Funds. In fiscal year 2015-16 there are two major governmental funds: the General Fund and
the Capital Outlay Fund. Changes in the General Fund are highlighted in the Financial Highlights section above. The
following information highlights changes in the Capital Outlay Fund:
Capital Outlay Fund. This fund was established to account for all of the City’s capital facility and infrastructure
improvement program projects where the cost will be at least $25,000. Not counted in this fund are costs that are
programmed into one or more of the following funds: 1) Parkland Development, 2) Transportation Impact Fees, 3)
Open Space Protection, 4) Airport Area Impact Fees, 5) Fleet Replacement, 6) Affordable Housing, 7) Los Osos
Valley Road Sub-Area Fees, 8) Information Technology Replacement and 9) Enterprise Funds. The Capital Outlay
fund relies primarily on resources provided by the General Fund and grants from the state and federal government.
13
Management’s Discussion and Analysis
At June 30, 2016 the Capital Outlay Fund had a total fund balance of $3.0 million. The entire amount of the fund
balance has been committed to capital projects or is assigned to liquidate contracts and purchase orders. The fund
balance decreased by $1.4 million over the prior fiscal year due to the fact that funding for projects received is spent
incrementally as the projects proceed to completion and a number of projects were in progress at June 30, 2016. From
year to year, spending activity in the Capital Outlay Fund may show significant fluctuations depending on the phase
of completion of the various capital projects in progress. Significant variances from the prior year include:
1. Grant revenues were approximately $1 million higher than the prior year. Grant revenues are received mainly as
reimbursements for costs incurred for the LOVR (Los Osos Valley Road) interchange project.
2. Capital expenditures increased by $1.07 million from the prior year. The increase is due in its majority to the
completion of the LOVR interchange project.
Non-Major Governmental Funds. Non-major funds include 1) the Debt Service Fund, 2) the Los Osos Valley Road
Sub-Area Fee Fund, 3) the Downtown Business Improvement District Fund, 4) the Tourism Business Improvement
Fund, 5) the Gas Tax Fund, 6) the Transportation Development Act Fund, 7) the Community Development Block
Grant Fund, 8) the Law Enforcement Grants Fund 9) the Public Art Contributions Fund and the 10) Transportation
Impact Fee Fund. These funds are presented in the basic financial statements in the aggregate.
A significant number of these funds represent activity for capital projects. At June 30, 2016, these funds had an
aggregate fund balance of $17.5 million. Of this total, $14 million or 80% is restricted for payment of debt service or
specific future capital projects.
The remaining balance of $3.5 million is assigned for contingency reserves and expenditures in subsequent years.
More information about these aggregated non-major funds can be found in the combining and individual fund
statements and schedules immediately following the required supplementary information.
Proprietary Funds. The City’s four enterprise funds provide the same type of information found in the government-
wide financial statements, but in more detail. Highlights of the annual activity for these funds have already been
presented in the discussion of the business-type activities.
General Fund Budgetary Highlights
A detailed budgetary comparison schedule for the year ended June 30, 2016 is presented as required supplementary
information following the notes to the financial statements. The final budget amounts include changes that were
approved by the City Council through June 30, 2016.
The following summarizes the original budget compared with the adjusted final budget for fiscal year 2015-16. The
adjusted final budget includes Council approved adjustments as well as administrative budget adjustments in
accordance with the City’s adopted fiscal policies and procedures.
14
Management’s Discussion and Analysis
BUDGETARY HIGHLIGHTS
General Fund Original Budget Final Budget Positive (Negative)
Variance
Revenues 63,186,991$ 65,270,043$ 2,083,052$
Expenditures 54,986,263 60,889,578 5,903,315
Other sources (uses)(5,559,269) (7,361,111) (1,801,842)
Beginning fund balance 24,566,807 24,566,807 -
Ending fund balance 27,208,266$ 21,586,161$ (5,622,105)$
As discussed below, differences between the original budget and the final amended budget reflect the following key
changes:
Key revenue source estimates including sales tax, transient occupancy tax (TOT) and subventions and grants were
updated at Mid-Year and with the Financial Plan Supplement, resulting in an increase in overall budgeted revenues of
almost $1 million or 3.0% over the original budget estimate. The remaining increase to the originally budgeted
revenues is the result of budget adjustments made subsequent to the Mid-Year budget update, presented and approved
by the City Council in February 2016.
The increase in the beginning fund balance results from the use of an estimate for the original budget and the use of
the actual, audited amount for the final budget.
The following table contains a comparison of actual results for revenues, expenditures, and fund balance with the final
budget for the General Fund. As the table shows, revenues exceeded the final budget by nearly $2.8 million, while
expenditures and other uses were below the final budget figure by $5.4 million. The net amount of other sources was
less than budgeted by $509,000. The net result of these differences leads to the ending fund balance increasing by
more than $8 million over the amount anticipated in the budget.
General Fund Final
Budget Actual Positive (Negative)
Variance
Revenues 65,270,043$ 68,084,438$ 2,814,395$
Expenditures 60,889,578 55,463,911 (5,425,667)
Other sources (uses)(7,361,111) (6,852,182) 508,929
Beginning fund balance 24,566,807 23,857,187 (709,620)
Ending fund balance 21,586,161$ 29,625,532$ 8,039,371$
Ending fund balance
Nonspendable 56,020 56,020
Restricted 489,056 489,056
Committed 7,185,397 7,185,397
Assigned 11,475,178 11,475,178
Unassigned 10,419,881 10,419,881
Total ending fund balance 21,586,161$ 29,625,532$ 8,039,371$
BUDGET - ACTUAL COMPARISON
15
16
Management’s Discussion and Analysis
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, 2016, the City’s investment in capital assets for its governmental and business type activities
amounts increased to $371.7 million (net of accumulated depreciation).
The investment in capital assets includes land, park improvements, buildings and improvements, vehicles and
equipment, streets, bikeways, water, wastewater and storm drain systems.
Capital Assets (Net of Depreciation)
2016 2015 2016 2015 2016 2015
Nondepreciable capital assets 63,327,352$ 51,376,395$ 16,957,325$ 25,015,210$ 80,284,677$ 76,391,605$
Depreciable capital assets (net of
accumulated depreciation ) 129,260,308 129,247,383 162,153,611 154,148,561 291,413,919 283,395,944
Total Capital Assets 192,587,660$ 180,623,778$ 179,110,936$ 179,163,771$ 371,698,596$ 359,787,549$
Governmental
Activities
Business-Type
Activities
Total
Major capital asset expenditures during the fiscal year include the following:
$1.5 million for California & Johnson water lines.
$11.8 million for Los Osos Valley Road/US 101 interchanges construction work.
$879,000 for the Marsh/Higuera sewer line project.
$2.8 million from the Half Percent Sales Tax measure in multiple projects.
$3.7 million for WRRF Energy Efficiency project.
$778,000 in streets repairs.
$324,000 for the Olympic pool replaster.
$481,000 for I.T equipment replacement.
$955,000 for fleet replacement.
$405,500 for facilities maintenance.
Additional information on the City’s capital assets can be found in Note 5 to the basic financial statements.
Long-Term Debt. At June 30, 2016, the City had $83.9 million in long-term debt outstanding as summarized below:
Long- Term Debt
2016 2015 2016 2015 2016 2015
Lease-revenue bonds 27,762,893$ 29,158,406$ 25,323,405$ 26,528,095$ 53,086,298$ 55,686,501$
Lease-purchase financing 1,374,773 1,035,145 1,374,773 1,035,145
Installment sale agreement 7,932,327 8,481,043 7,932,327 8,481,043
Loans 679,314 766,092 17,647,622 18,559,952 18,326,936 19,326,044
Compensated absences 2,551,152 2,693,512 682,933 624,544 3,234,085 3,318,056
32,368,132$ 33,655,170$ 51,586,287$ 54,193,634$ 83,954,419$ 87,846,789$
Governmental Business-Type Total
Activities Activities
This represents a decrease of $3.9 million or 4% compared to the prior year.
Management’s Discussion and Analysis
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, 2016, 2% of the assessed valuation was $136,170,000, while the City’s actual debt applicable to the computed
limit was $10,314,000. At June 30, 2016, the City did not have any general obligation debt subject to the limit.
Additional information about the City’s long-term debt can be found in Note 6 to the basic financial statements.
Economic Factors and Next Year’s Budgets and Rates
On June 14, 2016, the City Council adopted the 2016-17 Supplemental Budget and appropriated the budget with total
appropriations of $135.9 million Adequate resources are available to fund the proposed expenditures. The City
Council approved the use of reserves in excess of the 20% required minimum amount to pay for one-time expenses.
For the General Fund, the 2016-17 budget reflects expenditures and other uses exceeding current revenues and other
sources by $5.8 million which reflects allocation of one-time reserves toward one-time expenditures in accordance
with the Council adopted budget and fiscal policies and guidelines. The Supplemental Budget reflects an additional
allocation of $750,000 to make a prepayment against the safety retirement liability owed to the California Public
Employees Retirement System; $250,000 to make a payment towards the OPEB liability; and a $5.6 million
investment in infrastructure toward the Capital Improvement Program and Efficiency and Effectiveness Initiative.
Consistent with the City’s balanced budget policy, the ending unassigned fund balance meets the City’s policy
minimum of 20% of operating expenditures.
Sales Tax. The local half-percent sales tax was reauthorized by City voters in November 2014 with over 70% of
the vote. The local half-percent sales tax measure is projected to generate over $7.0 Million in 2016-17. With the
approval of Measure G and the establishment of the Citizen’s Revenue Enhancement Oversight Commission (REOC),
the Council is further supported through the body. The REOC reviews, reports and makes recommendations directly
to the City Council regarding revenues and expenditures of half-percent local sale tax.
Utility Rates. Consistent with the multi-year rate setting strategy previously approved by the Council to improve the
City’s water distribution and treatment systems, the Council approved the following rate increases to take effect in
2016-17. Droughts surcharge increase to $0.74 from $0.37; Tier 1 drought surcharge to increase from $0.98 to $1.10;
and Tier 2 from $1.23 to $1.37.
The Sewer Fund also uses a multi-year rate-setting strategy. In order to continue supporting an adequate capital
improvement plan and meet high wastewater treatment standards, the Council approved a rate increase of 3% effective
July 1, 2016.
Parking Fund. The Parking Fund revenue growth for fiscal year 2016-17 was based on a conservative 1% growth.
Requests for Additional Information
This financial report is designed to provide a general overview of the City’s finances for all those with an interest in
our finances. Questions concerning any of the information provided in this report or requests for additional financial
information should be addressed to the Department of Finance, 990 Palm Street, San Luis Obispo, CA 93401.
17
BASIC FINANCIAL STATEMENTS
19
City of San Luis Obispo, California
Statement of Net Position
June 30, 2016
Governmental
Activities
Business-Type
Activities Total
Assets
Cash and cash equivalents 1,342,592$ 591,190$ 1,933,782$
Investments 40,466,256 58,350,157 98,816,413
Taxes receivable 3,900,847 3,900,847
Accounts receivable 743,673 5,695,297 6,438,970
Accrued interest receivable 101,503 151,917 253,420
Due from other governments 5,719,247 2,481,470 8,200,717
Prepaid items and other assets 851,942 5,831,567 6,683,509
Cash held by fiscal agent 2,738,895 2,278,392 5,017,287
Investment in joint venture 698,000 698,000
Nondepreciable capital assets 63,327,352 16,957,325 80,284,677
Depreciable capital assets (net of accumulated
depreciation) 129,260,308 162,153,611 291,413,919
Total assets 248,452,615 255,188,926 503,641,541
Deferred Outflows of Resources
Deferred pensions 16,760,309 3,058,202 19,818,511
Deferred amounts from refunding of debt 183,029 183,029
Total deferred outflows of resources 16,760,309 3,241,231 20,001,540
Liabilities
Accounts payable 2,308,728 1,577,521 3,886,249
Accrued salaries 1,930,632 345,006 2,275,638
Deposits payable 1,029,340 1,029,340
Unearned revenue 704,588 704,588
Interest payable 126,125 304,530 430,655
Other liabilities 117,566 117,566
Noncurrent liabilities:
Due within one year 3,543,222 3,117,053 6,660,275
Due in more than one year 28,824,910 48,469,234 77,294,144
Net pension liability 99,651,760 20,356,977 120,008,737
Total liabilities 137,207,531 75,199,661 212,407,192
Deferred Inflows of Resources
Deferred pensions 11,074,907 3,066,273 14,141,180
Net Position
Net investment in capital assets 163,449,994 128,390,611 291,840,605
Restricted for:
Debt service 2,738,895 2,278,392 5,017,287
Grant program 23,492 23,492
Unrestricted (49,281,895) 49,495,220 213,325
Total net position 116,930,486$ 180,164,223$ 297,094,709$
The accompanying notes are an integral part of these financial statements.
20
City of San Luis Obispo, California
Statement of Activities
For the Fiscal Year Ended June 30, 2016
Functions/Programs Expenses
Indirect Expense
Allocation
Charges for
Services
Operating
Grants and
Contributions
Capital Grants
and
Contributions
Governmental activities:
Public safety 23,941,074$ 5,493,372 1,673,800$ 1,450,415$ 426,280$
Transportation 6,669,998 2,167,655 1,691,757 1,055,757 8,929,427
Culture and recreation 8,035,342 1,811,328 2,048,780
Community development 10,545,693 2,405,207 7,974,880 160,886
General government 12,601,460 (11,877,562) 648,825 75,073
Interest on long-term debt 1,351,468
Total governmental activities 63,145,035 - 14,038,042 2,742,131 9,355,707
Business-type activities:
Water 18,136,120 19,884,850
Sewer 10,842,451 16,460,141
Parking 3,900,052 7,408,728
Transit 4,088,423 659,471 2,888,820
Total business-type activities 36,967,046 44,413,190 2,888,820 -
General revenues and transfers:
General sales and use taxes
Half Percent Sales Tax and use tax
Property taxes
Transient occupancy tax (TOT)
Utility users tax
Property tax-in-lieu of vehicle license fees
Franchise taxes
Business tax
Unrestricted investment earnings
Other taxes
Income from investment in joint venture
Transfers
Total general revenues and transfers
Change in net position
Net position, beginning of year
Prior year restatements
Net position, beginning of year, as restated
Net position, end of year
Program Revenues
The accompanying notes are an integral part of these financial statements.
21
Governmental
Activities
Business-type
Activities Total
(25,883,951)$ $ (25,883,951)$
2,839,288 2,839,288
(7,797,890) (7,797,890)
(4,815,134) (4,815,134)
- -
(1,351,468) (1,351,468)
(37,009,155) - (37,009,155)
1,748,730 1,748,730
5,617,690 5,617,690
3,508,676 3,508,676
(540,132) (540,132)
- 10,334,964 10,334,964
17,498,218 17,498,218
7,178,159 7,178,159
10,186,858 10,186,858
7,127,756 7,127,756
5,413,720 5,413,720
4,113,244 4,113,244
1,537,922 1,537,922
2,491,516 2,491,516
825,760 845,906 1,671,666
771,154 771,154
239,200 239,200
1,436,048 (1,436,048) -
58,580,355 (350,942) 58,229,413
21,571,200 9,984,022 31,555,222
99,335,419 169,688,165 269,023,584
(3,976,133) 492,036 (3,484,097)
95,359,286 170,180,201 265,539,487
116,930,486$ 180,164,223$ 297,094,709$
Net Revenues (Expenses) and
Changes in Net Position
22
City of San Luis Obispo, California
Balance Sheet
Governmental Funds
June 30, 2016
General Capital Outlay
Other
Governmental
Funds
Total
Governmental
Funds
Assets
Cash and cash equivalents 244,357$ 297,178$ 801,057$ 1,342,592$
Investments 23,715,900 1,919,661 14,830,695 40,466,256
Taxes receivable 3,900,847 3,900,847
Accounts receivable 326,356 2,000 166,030 494,386
Other receivables 249,287 249,287
Due from other governments 4,543,211 1,092,510 83,526 5,719,247
Due from other funds 517,788 517,788
Accrued interest receivable 62,993 371 38,139 101,503
Prepaid items 56,020 116,702 172,722
Cash held by fiscal agent 2,738,895 2,738,895
Total assets 33,616,759$ 3,311,720$ 18,775,044$ 55,703,523$
Liabilities and Fund Balance
Liabilities:
Accounts payable 1,360,116$ 242,527$ 706,085$ 2,308,728$
Accrued liabilities 1,923,927 6,705 1,930,632
Due to other funds 517,788 517,788
Unearned revenue 589,618 114,970 704,588
Other liabilities 117,566 117,566
Total liabilities 3,991,227 357,497 1,230,578 5,579,302
Fund balance:
Nonspendable 56,020 56,020
Restricted for:
Debt service 489,056 2,119,724 2,608,780
Law enforcement grant programs 23,492 23,492
Committed to:
Affordable housing programs 2,562,825 2,562,825
Capital outlay 2,954,223 2,954,223
General government programs 7,185,397 7,463,605 14,649,002
Impact fee programs 549,349 549,349
Open space programs 1,265,620 1,265,620
Assigned to:
Contingency fund 11,092,782 900,000 11,992,782
Development services 382,396 2,659,851 3,042,247
Unassigned 10,419,881 10,419,881
Total fund balance 29,625,532 2,954,223 17,544,466 50,124,221
Total liabilities and fund balance 33,616,759$ 3,311,720$ 18,775,044$ 55,703,523$
The accompanying notes are an integral part of these financial statements.
23
City of San Luis Obispo, California
Reconciliation of the Governmental Funds Balance Sheet
to the Government-wide Statement of Net Position
June 30, 2016
Total fund balance - governmental funds 50,124,221$
Capital assets at estimated historical cost 277,940,191
Accumulated depreciation (85,352,531)
192,587,660
Deferred outflows of resources reported in the Statement of Net Position 16,760,309
679,220
Lease revenue bonds 27,199,515
Lease purchase financing 1,374,773
Compensated absences 2,551,152
Conservation loan 679,314
Bond premium 563,378
Accrued interest payable 126,125
(32,494,257)
Net pension liability is not a current financial resource and, therefore, is not reported
in the governmental funds. (99,651,760)
Deferred inflows of resources reported in the Statement of Net Position (11,074,907)
Total net position - governmental activities 116,930,486$
Capital assets used in governmental activities are not financial resources and therefore are not
reported in the funds.
Long-term liabilities, including related interest payable, are not due and payable in the current
period 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.
The accompanying notes are an integral part of these financial statements.
24
City of San Luis Obispo, California
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Fiscal Year Ended June 30, 2016
General Capital Outlay
Other
Governmental
Funds
Total
Governmental
Funds
Revenues:
Sales and use tax - general 17,498,218$ $ $ 17,498,218$
Sales and use tax - Half Percent Sales Tax 7,178,159 7,178,159
Sales tax - Prop 172 405,066 405,066
Property tax 10,186,858 10,186,858
Transient occupancy tax 7,127,756 7,127,756
Utility users tax 5,413,720 5,413,720
Property tax in lieu of VLF 4,113,244 4,113,244
Franchise taxes 1,537,922 1,537,922
Business tax 2,491,516 2,491,516
Real property transfer tax 366,088 366,088
Fines, forfeitures and penalties 172,353 172,353
Use of money and property 582,993 808 241,959 825,760
Subventions and grants 1,538,869 8,574,127 1,658,984 11,771,980
Charges for services 9,322,456 4,300,489 13,622,945
Miscellaneous 149,220 24,304 69,220 242,744
Total revenues 68,084,438 8,599,239 6,270,652 82,954,329
Expenditures:
Current:
General government 10,977,571 1,431,994 12,409,565
Public safety 25,576,604 891,850 26,468,454
Transportation 3,317,177 3,317,177
Leisure, cultural and social services 7,428,198 7,428,198
Community development 8,070,118 2,700,709 10,770,827
Debt service:
Principal 86,778 1,706,073 1,792,851
Interest 7,465 1,341,751 1,349,216
Capital outlay:
Public safety 444,311 776,448 1,220,759
Transportation 10,689,582 4,348,724 15,038,306
Leisure, cultural and social services 1,361,366 101,903 1,463,269
Community development 115,558 33,979 149,537
General government 565,003 25,260 590,263
Total expenditures 55,463,911 13,175,820 13,358,691 81,998,422
Excess (deficiency) of revenues over
(under) expenditures 12,620,527 (4,576,581) (7,088,039) 955,907
The accompanying notes are an integral part of these financial statements.
25
City of San Luis Obispo, California
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds, continued
For the Fiscal Year Ended June 30, 2016
Page 2
General Capital Outlay
Other
Governmental
Funds
Total
Governmental
Funds
Other Financing Sources (Uses):
Issuance of debt $ $ 688,500$ 688,500$
Transfers in 2,920,748 3,242,443 6,584,387 12,747,578
Transfers out (9,772,930) (53,900) (1,484,700) (11,311,530)
Total other financing sources (uses) (6,852,182) 3,188,543 5,788,187 2,124,548
Net change in fund balance 5,768,345 (1,388,038) (1,299,852) 3,080,455
Fund balance, beginning of year 24,566,807 3,632,641 18,844,318 47,043,766
Prior year restatements (709,620) 709,620 -
Fund balance, beginning of year, as restated 23,857,187 4,342,261 18,844,318 47,043,766
Fund balance, end of year 29,625,532$ 2,954,223$ 17,544,466$ 50,124,221$
The accompanying notes are an integral part of these financial statements.
26
City of San Luis Obispo, California
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes
in Fund Balances to the Government-wide Statement of Activities and Changes in Net Position
For the Fiscal Year Ended June 30, 2016
Total net change in fund balance - governmental funds 3,080,455$
Expenditures for capital outlay - governmental funds 17,616,872
Depreciation expense (5,652,990)
11,963,882
1,792,851
Acquisition of new financing (688,500)
(40,565)
38,313
315,092
142,359
Change in net pension liability 4,967,313
Total change in net position - governmental activities 21,571,200$
Change in other long-term asset
Change in compensated absences
Capital outlay net of depreciation expense and disposal.
Change in accrued interest on debt
Change in unamortized discount/premium (netted with debt)
Principal paid on long-term debt
The accompanying notes are an integral part of these financial statements.
27
City of San Luis Obispo, California
Statement of Fund Net Position
Business-Type Activities – Enterprise Funds
June 30, 2016
Water Sewer Parking Transit Totals
Assets
Current assets:
Cash and cash equivalents 160,747$ 282,288$ 140,870$ 7,285$ 591,190$
Investments 15,918,304 27,988,970 13,720,647 722,236 58,350,157
Accounts receivable 2,855,749 2,773,870 65,640 38 5,695,297
Accrued interest receivable 48,536 68,179 33,318 1,884 151,917
Prepayments 5,831,567 5,831,567
Due from other governments 2,481,470 2,481,470
Total current assets 24,814,903 31,113,307 13,960,475 3,212,913 73,101,598
Noncurrent assets:
Cash and investments held by fiscal agent 1,654,826 60,261 563,305 2,278,392
Investment in joint venture 698,000 698,000
Capital assets:
Land 945,926 2,176,114 5,947,455 9,069,495
Public art 74,100 74,100
Infrastructure 98,608,048 85,429,529 29,149,949 110,972 213,298,498
Buildings and improvements 19,134,912 5,024,388 888,420 4,905,259 29,952,979
Equipment 4,284,455 4,336,955 379,229 7,727,129 16,727,768
Construction in progress 712,646 6,630,204 403,660 67,220 7,813,730
Total capital assets 123,685,987 103,597,190 36,842,813 12,810,580 276,936,570
Less accumulated depreciation (48,032,223) (31,473,006) (11,639,846) (6,680,559) (97,825,634)
Capital assets, net of
accumulated depreciation 75,653,764 72,124,184 25,202,967 6,130,021 179,110,936
Total noncurrent assets 78,006,590 72,184,445 25,766,272 6,130,021 182,087,328
Total assets 102,821,493 103,297,752 39,726,747 9,342,934 255,188,926
Deferred Outflows of Resources
Deferred pensions 1,245,627 1,399,869 316,205 96,501 3,058,202
Deferred amounts from refunding of debt 183,029 183,029
Total deferred outflow of resources 1,428,656 1,399,869 316,205 96,501 3,241,231
Enterprise Funds
The accompanying notes are an integral part of these financial statements.
28
City of San Luis Obispo, California
Statement of Fund Net Position
Business-Type Activities – Enterprise Funds, continued
June 30, 2016
Page 2
Water Sewer Parking Transit Totals
Enterprise Funds
Liabilities
Current liabilities:
Accounts payable 405,728$ 901,882$ 64,895$ 205,016$ 1,577,521$
Accrued liabilities 134,452 158,063 40,562 11,929 345,006
Compensated absences 191,323 207,424 12,740 12,255 423,742
Deposits payable 29,340 1,000,000 1,029,340
Interest payable 150,323 49,588 104,619 304,530
Current portion of long-term debt 1,332,288 879,041 481,982 2,693,311
Total current liabilities 2,243,454 2,195,998 1,704,798 229,200 6,373,450
Noncurrent liabilities:
Compensated absences 112,728 133,982 8,129 4,352 259,191
Lease revenue bonds 16,385,760 477,280 6,788,500 23,651,540
Bond premium 480,169 2,736 482,905
Installment sale agreement 7,366,438 7,366,438
State loan/note payable 3,767,598 8,092,022 4,849,540 16,709,160
Net pension liability 8,389,149 9,089,325 2,327,438 551,065 20,356,977
Total noncurrent liabilities 29,135,404 25,159,047 13,976,343 555,417 68,826,211
Total liabilities 31,378,858 27,355,045 15,681,141 784,617 75,199,661
Deferred Inflows of Resources
Deferred pensions 1,263,617 1,369,081 350,571 83,004 3,066,273
Net Position
Net investment in capital assets 53,870,978 55,309,403 13,080,209 6,130,021 128,390,611
Restricted:
Debt service 1,654,826 60,261 563,305 2,278,392
Subsequent year expenditures 448,499 6,505,683 197,007 1,552,730 8,703,919
Committed:
Rate stabilization fund 1,650,000 697,600 2,347,600
Contingency fund 2,950,800 1,635,400 4,586,200
Unrestricted 11,032,571 11,765,148 10,170,719 889,063 33,857,501
Total net position 71,607,674$ 75,973,495$ 24,011,240$ 8,571,814$ 180,164,223$
The accompanying notes are an integral part of these financial statements.
29
City of San Luis Obispo, California
Statement of Revenues, Expenses and Changes in Fund Net Position
Business-Type Activities – Enterprise Funds
For the Fiscal Year Ended June 30, 2016
Water Sewer Parking Transit Total
Operating revenues:
Charges for sales and service 18,182,433$ 15,575,449$ 4,025,619$ 658,601$ 38,442,102$
Impact fees 1,542,268 675,489 2,217,757
Fines and forfeitures 579,823 579,823
Other revenues 146,310 176,464 2,642,123 2,964,897
Total operating revenues 19,871,011 16,427,402 7,247,565 658,601 44,204,579
Operating expenses:
Salaries and benefits 3,236,393 3,630,041 1,037,844 276,534 8,180,812
Supplies and maintenance 1,412,312 1,925,987 439,331 296,387 4,074,017
Contract services 8,715,864 746,258 568,537 2,379,070 12,409,729
General government 1,328,061 1,576,026 711,587 277,329 3,893,003
Depreciation 2,608,348 2,566,445 641,001 859,103 6,674,897
Total operating expenses 17,300,978 10,444,757 3,398,300 4,088,423 35,232,458
Operating income (loss) 2,570,033 5,982,645 3,849,265 (3,429,822) 8,972,121
Nonoperating revenues (expenses)
Interest 306,307 356,968 171,429 11,202 845,906
Grants 2,888,820 2,888,820
Interest expense (835,142) (397,694) (501,752) (1,734,588)
Income from investment in joint venture 239,200 239,200
Miscellaneous nonoperating
revenues (expenses) 13,839 32,739 161,163 870 208,611
Total nonoperating revenues
(expenses) (275,796) (7,987) (169,160) 2,900,892 2,447,949
Income (loss) before transfers
and capital contributions 2,294,237 5,974,658 3,680,105 (528,930) 11,420,070
Transfers (469,607) (493,073) (473,368) (1,436,048)
Total transfers (469,607) (493,073) (473,368) - (1,436,048)
Change in net position 1,824,630 5,481,585 3,206,737 (528,930) 9,984,022
Net position, beginning of year 69,555,015 70,761,546 20,274,839 9,096,765 169,688,165
Prior year restatements 228,029 (269,636) 529,664 3,979 492,036
Net position, beginning of year, as restated 69,783,044 70,491,910 20,804,503 9,100,744 170,180,201
Net position, end of year 71,607,674$ 75,973,495$ 24,011,240$ 8,571,814$ 180,164,223$
Enterprise Funds
The accompanying notes are an integral part of these financial statements.
30
City of San Luis Obispo, California
Statement of Cash Flows
Business-Type Activities – Enterprise Funds
For the Fiscal Year Ended June 30, 2016
Water Sewer Parking Transit Total
Cash flows from operating activities:
Cash received from customers 19,195,400$ 16,106,601$ 8,200,071$ 658,733$ 44,160,805$
Cash payments to suppliers for goods and services (15,933,809) (2,414,769) (1,061,102) (2,710,272) (22,119,952)
Cash payments to General Fund for interfund services (1,328,061) (1,576,026) (711,587) (277,329) (3,893,003)
Cash payments to employees for services (3,491,856) (3,852,197) (1,066,464) (297,004) (8,707,521)
Other cash receipts 13,839 32,739 161,163 870 208,611
Net cash provided by (used in)
operating activities (1,544,487) 8,296,348 5,522,081 (2,625,002) 9,648,940
Cash flows from noncapital financing activities:
Operating grants received 1,514,872 1,514,872
Transfers to other funds (469,607) (493,073) (473,368) (1,436,048)
Net cash provided by (used in) noncapital
financing activities (469,607) (493,073) (473,368) 1,514,872 78,824
Cash flows from capital and related
financing activities:
Acquisition and construction of capital assets (1,953,787) (5,177,340) (32,163) (131,999) (7,295,289)
Disposition of capital assets 20,890 92,600 528,400 31,336 673,226
Principal paid on debt financing (1,285,687) (851,974) (466,185) (2,603,846)
Interest paid on debt financing (884,264) (395,832) (493,016) (1,773,112)
Net cash used in capital and
related financing activities (4,102,848) (6,332,546) (462,964) (100,663) (10,999,021)
Cash flows from investing activities:
Interest on investments 295,903 334,471 154,089 12,674 797,137
Net cash provided by
investing activities 295,903 334,471 154,089 12,674 797,137
Net change in cash and cash equivalents (5,821,039) 1,805,200 4,739,838 (1,198,119) (474,120)
Cash and cash equivalents, beginning of year 23,554,916 26,526,319 9,684,984 1,927,640 61,693,859
Cash and cash equivalents, end of year 17,733,877$ 28,331,519$ 14,424,822$ 729,521$ 61,219,739$
Enterprise Funds
The accompanying notes are an integral part of these financial statements.
31
City of San Luis Obispo, California
Statement of Cash Flows
Business-Type Activities – Enterprise Funds, continued
For the Fiscal Year Ended June 30, 2016
Page 2
Water Sewer Parking Transit Total
Reconciliation of operating income (loss) to
net cash provided by (used in) operating activities:
Operating income (loss) 2,570,033$ 5,982,645$ 3,849,265$ (3,429,822)$ 8,972,121$
Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities:
Depreciation 2,608,348 2,566,445 641,001 859,103 6,674,897
Other revenues and expenses 13,839 32,739 161,163 870 208,611
Change in assets, deferred outflows of resources,
liabilities, and deferred inflows of resources:
Accounts receivable (673,271) (320,801) (47,494) 132 (1,041,434)
Prepaid expense (5,831,567) (5,831,567)
Accounts payable 25,934 257,476 (53,234) (34,815) 195,361
Deposits payable (2,340) 1,000,000 997,660
Accrued salaries and compensated absences (155,812) (63,910) (30,350) 755 (249,317)
Deferred pensions and net pension liability (99,651) (158,246) 1,730 (21,225) (277,392)
Net cash provided by (used in)
operating activities (1,544,487)$ 8,296,348$ 5,522,081$ (2,625,002)$ 9,648,940$
Reconciliation of cash and investments to the balance sheet:
Cash and cash equivalents 160,747$ 282,288$ 140,870$ 7,285$ 591,190$
Investments 15,918,304 27,988,970 13,720,647 722,236 58,350,157
Cash and investments held by fiscal agent 1,654,826 60,261 563,305 2,278,392
Total cash and investments 17,733,877$ 28,331,519$ 14,424,822$ 729,521$ 61,219,739$
Noncash investing, capital, and financing activities:
None
Enterprise Funds
The accompanying notes are an integral part of these financial statements.
32
City of San Luis Obispo, California
Statement of Net Position – Fiduciary Funds
Agency Funds
June 30, 2016
Assets
Current assets:
Cash and cash equivalents 2,654,635$
Investments 1,445,201
Accounts receivable 62,831
Accrued interest receivable 6,725
Other assets 30,864
Capital assets, net of accumulated depreciation 983,829
Total assets 5,184,085$
Deferred Outflows of Resources
Deferred pensions 162,511
Total deferred outflows of resources 162,511$
Liabilities
Current liabilities:
Accounts payable 158,968$
Accrued liabilities 32,831
Other liabilities 2,293,468
Net pension liability 1,082,681
Due to agency participants 1,615,569
Total liabilities 5,183,517$
Deferred Inflows of Resources
Deferred pensions 163,079
Total deferred inflows of resources 163,079$
The accompanying notes are an integral part of these financial statements.
33
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page
Note 1: Summary of Significant Accounting Policies 36
Description of the Reporting Entity 36
Government-wide and Fund Financial Statements 36
Measurement Focus, Basis of Accounting and Basis of Presentation 36
Assets, Liabilities, and Net Position or Fund Balance 39
Budgets and Budgetary Accounting 42
Fair Value Measurements 44
Note 2: Cash and Investments 45
Funds with Fiscal Agent 45
Investments 45
Note 3: Property Taxes 50
Note 4: Due from Other Governments 51
Note 5: Capital Assets 53
Note 6: Long-Term Debt 54
Summary of Long-Term Debt 54
Governmental Activities Summary 54
Revenue Bonds 54
Lease-Purchase Financing 56
2014 Energy Sources Conservation State Loan 57
Business-Type Activities Summary 58
Revenue Bonds 58
Loans 59
Installment Sale Agreements 60
Note 7: Pension Plans and Other Post-Employment Benefits 61
Agent-Multiple Employer Plan 62
General Information about the Pension Plan 62
Net Pension Liability 63
34
City of San Luis Obispo, California
Notes to the Financial Statements
Table of Contents
June 30, 2016
Page 2
Page
Changes in the Net Pension Liability 65
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions 66
Payable to the Pension Plan 67
Cost Sharing Employer Plan 67
General Information about the Pension Plans 67
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources
Related to Pensions 69
Payable to the Pension Plan 73
Other Post-Employment Benefits (OPEB) 73
Note 8: Interfund Transactions 76
Note 9: Joint Ventures, Jointly Governed Organizations and Operating Agreements 76
Whale Rock Commission 76
San Luis Obispo Regional Transit Authority 77
San Luis Obispo Council of Governments 78
Nacimiento Water Supply Project 78
Note 10: Risk Management 79
California Joint Powers Insurance Authority 79
Self-Insurance Programs of the Authority 80
Purchased Insurance 81
Adequacy of Protection 81
Self-Insurance 82
Note 11: Operating Lease 83
Note 12: Commitments and Contingencies 83
Litigation 83
Grant Awards 83
Note 13: Construction and Other Significant Commitments 83
Note 14: Fund Balance Deficiency 84
35
City of San Luis Obispo, California
Notes to the Financial Statements
Table of Contents
June 30, 2016
Page 3
Page
Note 15: Subsequent Events 84
Diablo Power Plant Closure Settlement Agreement 84
Note 16: New Accounting Standards 84
Accounting Standards Adopted 84
New Accounting Standards 85
Note 17: Prior Year Restatements 86
36
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Note 1: Summary of Significant Accounting Policies
The basic financial statements of the City of San Luis Obispo (City) have been prepared in conformity with U.S. Generally
Accepted Accounting Principles (GAAP), as applied to governmental agencies. The Governmental Accounting Standards
Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting
principles.
The following is a summary of the more significant policies:
Description of the Reporting Entity
The City is a California charter city. It was incorporated on February 19, 1856 and chartered on May 1, 1876. It is
organized in accordance with the Council-Mayor-City Manager form of government. With a population of approximately
46,377, 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, building and safety, and other
general government services.
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 San Luis Obispo Capital Improvement Board provides financing for the construction and
acquisition of City facilities. The Board consists of members of the City Council. Activities of the Board are accounted
for in the applicable City governmental fund and consist of the issuance of debt secured by the lease of property. Separate
financial statements are not prepared for the San Luis Obispo Capital Improvement Board.
Government-wide and Fund Financial Statements
The government-wide financial statements (i.e. the statement of net position and the statement of activities) report
information on all of the nonfiduciary 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 to a significant extent 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 with 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.
37
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 2
Note 1: Summary of Significant Accounting Policies (Continued)
Separate 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. Revenues are recorded when earned and expenses are recorded when a
liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year
for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements
imposed by the provider have been met.
As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements.
Exceptions to this general rule are charges between the government’s enterprise funds and various other functions of the
government. Elimination of these charges would distort the direct costs and program revenues reported for the various
functions concerned.
Governmental fund financial statements are reported using the current financial resources measurement focus and the
modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available.
Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to
pay liabilities of the current period. For this purpose, the government generally considers revenues to be available if they
are collected within 60 days of the end of the current fiscal period. An exception to this timeframe is made to allow for
the recognition of the final property tax distributions received from the County, if necessary, as well as for sales tax
revenues received in September. This later provision is made in order for the City’s revenue stream to match that
recognized by the State of California. Expenditures generally are recorded when a liability is incurred, as under accrual
accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and
judgments, are recorded only when payment is due.
Property taxes, sales taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered
to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items
are considered to be measurable and available only when cash is received by the government.
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.
38
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2015
Page 3
Note 1: Summary of Significant Accounting Policies (Continued)
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 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.
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 ten Agency Funds, which are used to account for funds held by the City as an agent for private
individuals, organizations or other governmental agencies. Agency funds are accounted for using the accrual basis of
accounting. See page 128 for a complete list of Agency Funds.
39
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 4
Note 1: Summary of Significant Accounting Policies (Continued)
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.
Highly liquid investments with maturities of one year or less at time of purchase are stated at the amortized cost. All
other investments are stated at fair value. Market value is used as fair value for those investments where market quotations
are readily available.
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.
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 6 have additional information on funds held by fiscal agents.
Capital Assets. Capital assets, which include property, plant, equipment and infrastructure assets (such as streets,
sidewalks and bridges), are reported in the applicable governmental or business-type activities columns in the
government-wide financial statements, and in the proprietary funds statement of net position. Capital assets are defined
by the City as assets with an initial, individual cost of more than $25,000. The City does not have any intangible assets.
Detailed information on the City’s capital assets can be found in Note 5.
40
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 5
Note 1: Summary of Significant Accounting Policies (Continued)
Property, plant and equipment of the City are depreciated using the straight line method over the following estimated
useful lives:
Assets Years
Infrastructure 20-100
Buildings and structures 20-50
Improvements other than buildings 10-100
Equipment 3-21
Deferred Outflows and Inflows of Resources. The City recognizes deferred outflows and inflows of resources in the
Statement of Net Position. A deferred outflow of resources is defined as a consumption of net position by the City that
is applicable to a future reporting period. A deferred inflow of resources is defined as an acquisition of net position by
the City that is applicable to a future reporting period.
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 fund types 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.
41
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 6
Note 1: Summary of Significant Accounting Policies (Continued)
Net Pension Liability. The City recognizes a net pension liability, which represents the City’s proportionate share of the
excess of the total pension liability over the fiduciary net position of the pension reflected in the actuarial reports provided
by the California Public Employees’ Retirement System (CalPERS) plans (Plans). The net pension liability is measured
as of the City’s prior fiscal year-end. Changes in the net pension liability are recorded, in the period incurred, as pension
expense or as deferred inflows of resources or deferred outflows of resources depending on the nature of the change. The
changes in the net pension liability that are recorded as deferred inflows of resources or deferred outflows of resources
(that arise from changes in actuarial assumptions or other inputs and differences between expected or actual experience)
are amortized over the weighted average remaining service life of all participants in the respective pension plan and are
recorded as a component of pension expense beginning with the period in which they are incurred.
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and
pension expense, information about the fiduciary net position of the City’s CalPERS Plans and additions to/deductions
from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this
purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in
accordance with the benefit terms. Investments are reported at fair value. Projected earnings on pension investments are
recognized as a component of pension expense.
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. 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.
42
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 7
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. 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.
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.
43
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 8
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, makes adjustments as necessary and approves appropriations for the second fiscal year.
Unspent operating appropriations from the first year may be carried over for specific purposes into the second
year with the approval of the City Manager. Unspent and unencumbered operating appropriations lapse at the
end of the second year. The fiscal year which ended June 30, 2016 was the first year of the 2015-17 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 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.
44
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 9
Note 1: Summary of Significant Accounting Policies (Continued)
For management control purposes, the City Manager has the authority to make or approve administrative adjustments to
the budget as long as those changes will not have a significant policy impact nor affect budgeted year-end fund balances.
Department heads have the authority to transfer line-item budgets within the department within a fund. During fiscal year
2016 several supplemental budget appropriations were made to reflect the inclusion of costs related to prior year
encumbered amounts as well as the rollover of unspent capital appropriations. Additional appropriations were added to
fund a prepayment made to the retirement system as well as to provide additional resources for the Community
Development Department to ensure that it maintained a development review process that complied with State law in light
of the increased demand for services. These adjustments were material when compared to the original appropriations.
Both the original and final amended budgets of the general fund are presented as required supplementary information
following the notes to the financial statements. Budget information for non-major governmental funds with annual
budgets is presented in other supplementary information following the notes to the financial statements.
Encumbrances. Encumbrance accounting, under which purchase orders, contracts, and other commitments for the
expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an
extension of formal budgetary integration in the governmental funds. Encumbrances outstanding at the end of the year
are reported as reservations of fund balances since they do not constitute expenditures or liabilities. Amounts encumbered
at year end are re-appropriated in the following year.
Indirect Cost Reimbursement. All of the City's general government and engineering programs are accounted and
budgeted for in the General Fund. However, some of these support service programs also benefit the City's enterprise
and agency fund operations, and accordingly, transfers are made from these funds to reimburse the General Fund for these
services. The transfers 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 Statement No. 72, Fair Value Measurement and Application, 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 Statement No. 72 establishes 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.
45
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 10
Note 1: Summary of Significant Accounting Policies (Continued)
For fiscal year ended June 30, 2016, 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.
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)
46
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 11
Note 2: Cash and Investments (Continued)
Investments are stated at fair value, based on quoted market prices, except for discount notes which are stated at amortized
cost which approximates fair value, 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, 2016, cash and investments consisted of the following:
Fair
Value
Percent of
Portfolio
Cash and cash equivalents 1,933,782$ 1.83%
State Local Agency Investment Fund 22,263,581 21.05%
U.S. Treasury Bond / Note 23,156,490 21.89%
Federal Agency Bond / Note 35,383,205 33.45%
Corporate Note 7,038,552 6.65%
Commercial Paper 9,636,600 9.11%
Negotiable Certificates of Deposit 836,470 0.79%
Non-Negotiable Certificates of Deposit 1,000,000 0.95%
Money Market Funds 1,722,688 1.63%
Guarantee Investment Contracts 2,796,114 2.64%
Total cash and investments 105,767,482$ 100.00%
At June 30, 2016, cash and investments are reflected in the financial statements as follows:
Governmental
Funds
Enterprise
Funds Total
Cash and cash equivalents 1,342,592$ 591,190$ 1,933,782$
Investments 40,466,256 58,350,157 98,816,413
Cash and investments held by fiscal agents 2,738,895 2,278,392 5,017,287
Total cash and investments 44,547,743$ 61,219,739$ 105,767,482$
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.
47
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 12
Note 2: Cash and Investments (Continued)
The following is a summary of the fair value measurements as of June 30, 2016:
Fair Value
Investments by fair value hierarchy
U.S. Treasury Bond / Note 23,156,490$ 23,156,490$ $ $
Federal Agency Bond / Note 35,383,205 35,383,205
Corporate Note 7,038,552 7,038,552
Commercial Paper 9,636,600 9,636,600
Negotiable Certificates of deposit 836,470 836,470
Total investments by fair value hierarchy 76,051,317$ 23,156,490$ 52,894,827$ -$
Investments not subject to fair value hierarchy
State Local Agency Investment Fund 22,263,581
Non-Negotiable Certificates of Deposit 1,000,000
Money market funds 1,722,688
Guarantee Investment Contracts 2,796,114
Total investments not subject to fair value hierarchy 27,782,383
Total investments measured at fair value 103,833,700$
Fair Value Measurements Using
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
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 certificates of deposit, totaled $58,974,457 at June 30, 2016 and were insured or collateralized with
securities held by the pledging financial institution's trust department or agent in the City's name.
The California Government Code requires California financial institutions to secure the City's deposits by pledging
government securities as collateral. The market value of the pledged securities must equal 110% of the City's deposits.
California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes equal
to 150% of the City's deposits or letters of credit issued by the Federal Home Loan Bank of San Francisco having a value
of 105% in excess of the total amount of deposits.
Custodial Credit Risk - Investments. This is the risk that in the event of the failure of a counterparty, the City will not
be able to recover the value of its investments that are in the possession of an outside party. All of the City’s investments
in securities are insured or registered and held by a counterparty in the City’s name in accordance with the City’s policies.
48
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 13
Note 2: Cash and Investments (Continued)
Interest Rate Risk. This is the risk that the market value of securities in the portfolio will fall due to changes in general
interest rates. In accordance with its policies in the Investment Management Plan, the City mitigates interest rate risk by:
Structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations,
thereby avoiding the need to sell securities on the open market before maturity.
Investing operating funds primarily in shorter-term securities.
The City’s investment policy also includes portfolio maturity targets. A minimum of 20% of the portfolio will be invested
in securities maturing in one year or less. Up to 80% of the portfolio can be invested in securities with a maturity over
one year, with no more than 10% of the portfolio invested in securities with a maturity over five years.
Maturities using the segmented time distribution method for those investments requiring this disclosure are as follows:
Fair
Value
Less Than
One Month
One Month
to One Year
One to Five
Years
Over Five
Years
State LAIF 22,263,581$ $ 22,263,581$ $ $
U.S. Treasury Bond / Note 23,156,490 2,405,342 19,384,391 1,366,757
Federal Agency Bond / Note 35,383,205 8,423,371 26,558,118 401,716
Corporate Note 7,038,552 7,038,552
Commercial Paper 9,636,600 1,621,805 8,014,795
Negotiable Certificates of Deposit 836,470 836,470
Non-Negotiable Certificates of Deposit 1,000,000 1,000,000
Money Market Funds 1,722,688 1,722,688
Guarantee Investment Contracts 2,796,114 2,796,114
Total maturities 103,833,700$ 1,722,688$ 36,550,569$ 60,995,856$ 4,564,587$
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.
49
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 14
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, 2016:
Fair Value AAA AA+ AA AA- Not Rated
Investments:
State LAIF 22,263,581$ $ $ $ $ 22,263,581$
U.S. Treasury Bond / Note 23,156,490 21,789,733 1,366,757
Federal Agency Bond / Note 35,383,205 35,383,205
Corporate Note 7,038,552 1,022,037 3,852,579 2,163,936
Commercial Paper 9,636,600 9,636,600
Negotiable Certificates of Deposit 836,470 836,470
Non-Negotiable Certificates of Deposit 1,000,000 1,000,000
Money Market Funds 1,722,688 1,722,688
Guarantee Investment Contracts 2,796,114 2,796,114
Total 103,833,700$ 1,022,037$ 57,172,938$ 3,852,579$ 4,367,163$ 37,418,983$
Concentration Credit Risk. The City’s policies contained in the Investment Management Plan provide guidelines (by
type of investment that limits either the dollar amount, the percent of the portfolio or the maturity term) for diversifying
the investment portfolio so that potential losses on individual securities will be minimized.
The City’s Investment Management Plan outlines the following criteria related to portfolio diversification:
No more than 5% of the City’s portfolio (exclusive of government agency issues or LAIF) shall be placed with
any financial institution.
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 $200 million and that maintain a ratio of equity to total assets of at least 5%.
Investments that exceed 5% of the portfolio by issuer are summarized below:
Fair Value
Percent of
Portfolio
Federal Home Loan Bank 7,105,000$ 7%
Federal National Mortgage Association 11,990,000 12%
Fannie Mae 8,525,000 8%
50
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 15
Note 2: Cash and Investments (Continued)
These U.S. government-sponsored enterprise agency securities are not explicitly guaranteed by the U.S. government.
Approximately 9.3% of the City’s portfolio is comprised of U.S. Treasury securities, which are exempt from this
disclosure.
Foreign Currency Risk. The City does not hold any investment that is based on foreign currency exchange rates.
Note 3: Property Taxes
Property taxes in the State of California (State) are administered for all local agencies at the county level, and consist of
secured, unsecured and utility tax rolls. The following is a summary of major policies and practices relating to property
taxes:
Property Valuation. Valuations are established by the Assessor of the County of San Luis Obispo (County) for
the secured and unsecured property tax rolls; the utility property tax roll is valued by the State Board of
Equalization. Under the provisions of Article XIIIA of the State Constitution (Proposition 13 adopted by the
voters on June 6, 1978), properties are assessed at 100% of full value. Proposition 13 also modified the value of
taxable real property for fiscal 1979 by rolling back values to fiscal 1976 levels. From this base of assessment,
subsequent annual increases in valuation are limited to a maximum of 2%. However, increases to full value are
allowed for property improvements or upon change in ownership. Personal property is excluded from these
limitations and is subject to annual reappraisal.
Tax Levies. Under the provisions of Proposition 13, the County wide tax levy for general revenue purposes is
limited to 1% of full market value, which results in a tax rate of $1.00 per $100 assessed valuation. Tax rates
for voter approved indebtedness are excluded from this limitation.
Tax Levy Dates. All lien dates attach annually on January 1 preceding the fiscal year for which the taxes are
levied. The fiscal year begins July 1 and ends June 30 of the following year. Taxes are levied on both real and
unsecured personal property as it exists at that time. The lien against real estate as well as the tax on personal
property is not relieved by subsequent renewal or change in ownership.
Tax Collections. The County Treasurer/Tax Collector is responsible for all property tax collections. Taxes and
assessments on the secured and utility rolls, which constitute a lien against the property, may be paid in two
installments: the first installment is due on November 1 of the fiscal year and is delinquent if not paid by
December 10; and the second installment is due on March 1 of the fiscal year and is delinquent if not paid by
April 10. Unsecured personal property taxes do not constitute a lien against real property. However, if the taxes
become delinquent the lien is attached against anything the individual owns, which could include real property.
Payment must be made in one installment, which is delinquent if not paid by August 31 of the fiscal year.
Significant penalties are imposed by the County for late payments.
51
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 16
Note 4: Due from Other Governments
Teeter Plan. In 1993-94 the City elected to receive property tax revenue in accordance with the alternative
method of distribution prescribed by Sections 4701-4717 of the California Revenue and Taxation Code, which
is commonly known as the “Teeter Plan” whereby the County remits 100% of taxes levied without regard to
delinquencies. The County then pursues collection, retaining any delinquent taxes and related penalties and
interest.
Tax Levy Apportionments. Due to the nature of the County wide maximum levy, it is not possible to identify
general purpose tax rates for specific entities. Under State legislation adopted subsequent to the passage of
Proposition 13, apportionments to local agencies are made by the County Auditor Controller based primarily on
two factors: the ratio that each agency represented of the total County wide levy for the three years prior to fiscal
1979; and subsequent adjustments to these apportionments and transfers to the “Educational Revenue
Augmentation Fund” (ERAF) as determined by the State.
City Property Tax Distribution Policy. Property taxes are recorded in the General Fund as general purpose
revenue. Transfers are made from the General Fund as needed to support expenditures in the Capital Outlay,
Open Space Protection, Fleet Replacement, Information Technology Replacement, Major Facility Replacement
and Debt Service Funds. Property taxes receivable at June 30, 2016 have been accrued since they will be
collected within 60 days subsequent to year-end.
The following is a summary of amounts due to the City from other governmental agencies at June 30, 2016:
County of San
Luis Obispo
State of
California
Other
Agencies Total
General Fund 217,823$ 4,325,388$ $ 4,543,211$
Capital Outlay Fund 90,703 988,328 13,479 1,092,510
Other Governmental Funds 49,813 33,713 83,526
Enterprise Funds:
Transit Fund 2,481,470 2,481,470
Total 358,339$ 5,347,429$ 2,494,949$ 8,200,717$
Note 5: Capital Assets
GASB standards require that the City report in the government-wide statements the value of all capital assets net of
accumulated depreciation, including infrastructure assets, in accordance with GAAP. Infrastructure assets are defined as
long-lived capital assets that are stationary in nature and normally can be preserved for a significantly greater number of
years than most capital assets.
The minimum requirement for compliance with GASB standards is to provide infrastructure valuations for all assets
constructed, acquired, or placed into service on or after July 1, 1980. Relevant assets for the City were valued at one of
two dates: 1) the original date of construction, if available, or 2) the incorporation date of the City. Each asset was reviewed
to determine the adequacy of the data to value the asset prior to July 1, 1980 using historical cost or estimated historical
cost.
52
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 17
Note 5: Capital Assets (Continued)
Capital assets activity for the fiscal year ended June 30, 2016 was as follows:
Balance Balance
June 30, 2015 Increases Decreases June 30, 2016
Governmental activities:
Capital assets not being depreciated:
Land 31,915,805$ 104,388$ $ 32,020,193$
Construction in progress 18,813,960 13,784,015 (1,937,446) 30,660,529
Public art 646,630 646,630
Total capital assets not
being depreciated 51,376,395 13,888,403 (1,937,446) 63,327,352
Capital assets being depreciated:
Infrastructure 149,572,994 1,477,359 151,050,353
Accum. Depreciation (47,989,956) (3,240,189) (51,230,145)
Buildings and improvements 35,300,282 523,851 35,824,133
Accum. Depreciation (16,798,961) (829,838) (17,628,799)
Equipment 24,342,166 3,664,705 (268,518) 27,738,353
Accum. Depreciation (15,179,142) (1,582,963) 268,518 (16,493,587)
Total capital assets being
depreciated, net 129,247,383 12,925 - 129,260,308
Governmental activities,
capital assets, net 180,623,778 13,901,328 (1,937,446) 192,587,660
Business-type activities:
Capital assets not being depreciated:
Land 9,387,195 (317,700) 9,069,495
Construction in progress 15,553,915 3,059,852 (10,800,037) 7,813,730
Public art 74,100 74,100
Total capital assets not
being depreciated 25,015,210 3,059,852 (11,117,737) 16,957,325
Capital assets being depreciated:
Infrastructure 199,549,107 13,873,206 (123,815) 213,298,498
Accum. Depreciation (69,716,192) (4,297,984) (74,014,176)
Buildings and improvements 29,952,979 29,952,979
Accum. Depreciation (11,712,619) (1,207,331) (12,919,950)
Equipment 16,207,636 809,173 (289,041) 16,727,768
Accum. Depreciation (10,132,350) (1,169,582) 410,424 (10,891,508)
Total capital assets being
depreciated, net 154,148,561 8,007,482 (2,432) 162,153,611
Business-type activities,
capital assets, net 179,163,771 11,067,334 (11,120,169) 179,110,936
Total Government-wide 359,787,549$ 24,968,662$ (13,057,615)$ 371,698,596$
53
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 18
Note 5: Capital Assets (Continued)
Depreciation expense was charged to functions/programs as follows:
Governmental activities:
Public safety 965,306$
Transportation 3,343,606
Culture and recreation 536,490
Community development 2,554
General government 805,034
Total depreciation - governmental activities 5,652,990
Business-type activities:
Water 2,608,348
Sewer 2,566,445
Parking 641,001
Transit 859,103
Total depreciation - business-type activities 6,674,897
Total Government-wide 12,327,887$
54
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 19
Note 6: Long-Term Debt
Summary of Long-Term Debt
The following is a summary of the City's long-term debt transactions for the year ended June 30, 2016:
Balance Balance Due Within
June 30, 2015 Additions Deductions June 30, 2016 One Year
Governmental activities:
Revenue bonds 28,556,715$ $ (1,357,200)$ 27,199,515$ 1,396,040$
Unamortized bond premium 601,691 (38,313) 563,378
Lease-purchase financing 1,035,146 688,500 (348,873) 1,374,773 396,931
Compensated absences 2,693,511 2,551,152 (2,693,511) 2,551,152 1,662,584
Conservation Loan 766,092 (86,778) 679,314 87,667
Total long-term debt,
governmental activities 33,653,155$ 3,239,652$ (4,524,675)$ 32,368,132$ 3,543,222$
Business-type activities:
Revenue bonds 25,983,300$ $ (1,142,800)$ 24,840,500$ 1,188,960$
Unamortized bond premium 544,795 (61,890) 482,905
Loans 18,559,952 (912,330) 17,647,622 938,462
Installment sale agreements 8,481,043 (548,716) 7,932,327 565,889
Compensated absences 624,544 682,933 (624,544) 682,933 423,742
Total long-term debt,
business-type activities 54,193,634 682,933 (3,290,280) 51,586,287 3,117,053
Total Government-wide 87,846,789$ 3,922,585$ (7,814,955)$ 83,954,419$ 6,660,275$
Compensated absences in the governmental funds are generally liquidated by the General Fund on a pay as you go basis.
Total interest incurred during the year ended June 30, 2016 was $3,086,056 of which $223,862 was capitalized into
construction in progress. See Note 10 for detail of estimated claims and liabilities.
The San Luis Obispo Capital Improvement Board has entered into a number of lease agreements with the City of San
Luis Obispo wherein the City is obligated to make all debt service payments. The transactions between the Board and
the City have been eliminated from these financial statements.
Governmental Activities Summary:
Revenue Bonds
2005 Revenue Refunding Bonds. In 2005, the Board issued lease revenue refunding bonds in the amount of $6,550,000
to refinance the 1996 lease revenue bonds. The purpose of these bonds was to construct several high priority capital
improvement projects, including the fire station headquarters, seismic safety and HVAC improvements to City Hall,
Mission Plaza expansion, and various properties and street lighting system purchases. The bonds bear interest from 3.4%
55
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 20
Note 6: Long-Term Debt (Continued)
to 4.5%, and are due in annual installments on June 1 through June 1, 2026 that range from $195,000 to $565,000. At
June 30, 2016, the principal amount outstanding on the bonds was $3,815,000. 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, 2016.
2006 Lease Revenue Bonds. In 2006, the Board issued lease revenue bonds in the amount of $16,160,000 to finance the
costs of acquisition and construction of public parking facilities and for purposes of the City’s administrative office. Of
the original bond issuance, $7,433,600 was used for financing governmental activities related to this project and the
remainder was used for business-type activities. The bonds bear interest from 4.00% to 4.70%, and are due in annual
installments on June 1 through June 1, 2036 that range from $116,100 to $515,700. At June 30, 2016, the principal
amount outstanding that pertains to governmental activities was $5,920,200 of the total $12,870,000 outstanding. 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, 2016.
2009 Lease Revenue Bonds. In 2009, the Board issued lease revenue bonds in the amount of $10,705,000 to finance the
public safety communications and emergency operations center project. Of the original bond issuance, $9,067,135 was
used for financing governmental activities related to this project and the remainder was used for business-type activities.
The bonds bear interest from 3.0% to 5.75%, and are due in annual installments on June 1 through June 1, 2039 that range
from $355,740 to $563,255. At June 30, 2016, the principal amount outstanding that pertains to governmental activities
was $5,844,315 of the total $6,900,035 outstanding. 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, 2016.
In the Statement of Net Position, the 2009 bonds include the related unamortized premium which is being amortized and
charged to expense over the term of the 2009 bonds. At June 30, 2016, the unamortized premium was $86,754.
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 is 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, 2016, the principal amount outstanding on the bonds was $4,185,000.
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, 2016.
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, 2016, the unamortized premium was $258,278.
56
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 21
Note 6: Long-Term Debt (Continued)
2014 Lease Revenue Bonds. In 2014, the Board issued lease revenue bonds in the amount of $7,580,000 to finance the
expansion of the Los Osos Valley Road interchange at U.S. 101. The bonds bear interest from 3.00% to 4.00%, and are
due in annual installments on November 1 through November 1, 2044 that range from $145,000 to $410,000. At June 30,
2016, the principal amount outstanding on the bonds was $7,435,000. 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, 2016.
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, 2016, the unamortized premium was $218,346.
At June 30, 2016, the aggregate maturities of the aforementioned governmental activities revenue bonds were as follows:
For the Year Ending June 30, Principal Interest Total
2017 1,396,040$ 1,164,804$ 2,560,844$
2018 1,454,115 1,112,399 2,566,514
2019 1,505,255 1,056,298 2,561,553
2020 1,103,250 996,729 2,099,979
2021 1,146,685 951,442 2,098,127
2022-2026 6,646,865 3,977,276 10,624,141
2027-2031 4,973,095 2,615,281 7,588,376
2032-2036 4,307,220 1,536,235 5,843,455
2037-2041 3,116,990 584,070 3,701,060
2042-2045 1,550,000 127,000 1,677,000
27,199,515$ 14,121,534$ 41,321,049$
Lease-Purchase Financing
Fire Apparatus. In 2010 the Board obtained lease-purchase financing in the amount of $1,080,000 to purchase a fire
truck. The gross amount of assets under this lease is $1,047,927 million with accumulated depreciation of $318,701
included in equipment at June 30, 2016. Amortization of the equipment is included in depreciation expense. The lease
agreement bears an interest rate of 2.99% due in annual installments on February 1 through February 1, 2020 that range
from $80,000 to $125,100. At June 30, 2016 the principal amount outstanding is $475,000.
Police Vehicle. In 2012, the City obtained lease-purchase financing in the amount of $30,264 to purchase a police vehicle.
The gross amount of assets under this lease is $30,264 with accumulated depreciation of $28,247 included in equipment
at June 30, 2016. Amortization of the equipment is included in depreciation expense. The note bears an interest rate of
3.89% due in annual installments of $6,778 on October 1. At June 30, 2016 the principal amount outstanding is $3,066.
The note was paid off subsequent to June 30, 2016.
57
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 22
Note 6: Long-Term Debt (Continued)
Fire Engine. In 2013 the City obtained lease-purchase financing in the amount of $548,351 to purchase a fire truck. The
gross amount of assets under this lease is $550,738 with accumulated depreciation of $45,895 included in equipment at
June 30, 2016. Amortization of the equipment is included in depreciation expense. The lease agreement bears an interest
rate of 6.00% due in annual installments on July 11 through July 11, 2018 that range from $106,000 to $114,000. At
June 30, 2016 the principal amount outstanding is $334,077.
Computers. In 2016 the City obtained lease-purchase financing in the amount of $688,500 to purchase mobile data
computers, hardware to install the computers in City vehicles, installation costs, and wireless network components. The
gross amount of assets under this lease is $714,611 included in equipment at June 30, 2016. As the assets were placed
into service on June 30, 2016, there was no accumulated depreciation and related expense for the year ended June 30,
2016. The lease agreement bears an interest rate of 1.55% due in quarterly installments beginning December 1, 2015
through September 1, 2019 in the amount of $44,000. At June 30, 2016 the principal amount outstanding is $562,630.
At June 30, 2016, the aggregate maturities of the aforementioned governmental activities lease-purchase financing were
as follows:
For the Year Ending June 30, Principal Interest Total
2017 396,931$ 23,258$ 420,189$
2018 399,105 16,884 415,989
2019 409,449 10,443 419,892
2020 169,288 3,809 173,097
1,374,773$ 54,394$ 1,429,167$
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, 2016 the principal amount outstanding is $679,314.
At June 30, 2016, the aggregate maturities of the aforementioned governmental activities conservation loan is as follows:
For the Year Ending June 30, Principal Interest Total
2017 87,667$ 6,575$ 94,242$
2018 88,546 5,696 94,242
2019 89,434 4,809 94,243
2020 90,320 3,922 94,242
2021 91,236 3,007 94,243
2022-2024 232,111 3,494 235,605
679,314$ 27,503$ 706,817$
58
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 23
Note 6: Long-Term Debt (Continued)
Business-Type Activities Summary:
Revenue Bonds
2006 Lease Revenue Bonds. In 2006, the Board issued lease revenue bonds in the amount of $16,160,000 to finance the
costs of acquisition and construction of public parking facilities and for purposes of the City’s administrative office. Of
the original bond issuance, $8,726,400 was used for financing business-type activities related to this project and the
remainder was used for governmental activities. The bonds bear interest from 4.00% to 4.70%, and are due in annual
installments on June 1 through June 1, 2036 that range from $116,100 to $515,700. At June 30, 2016, the principal amount
outstanding that pertains to business-type activities was $6,949,800 of the total $12,870,000 outstanding. 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, 2016.
In the Statement of Net Position, the 2006 bonds include the related unamortized premium which is being amortized and
charged to expense over the term of the 2006 bonds. At June 30, 2016, the unamortized premium was $23,177.
2009 Lease Revenue Bonds. In 2009, the Board issued lease revenue bonds in the amount of $10,705,000 were issued
to finance the public safety communications and emergency operations center project. Of the original bond issuance,
$1,637,865 was used for financing business-type activities related to this project and the remainder was used for
governmental activities. The bonds bear interest from 3.0% to 5.75%, and are due in annual installments on June 1
through June 1, 2039 that range from $355,740 to $563,255. At June 30, 2016, the principal amount outstanding that
pertains to business-type activities was $1,055,700 of the total $6,900,035 outstanding. 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, 2016.
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 than range
from $340,000 to $550,000. At June 30, 2016, the principal amount outstanding on the bonds was $3,425,000. 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, 2016.
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, 2016, the unamortized premium was $460,912.
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, 2016, principal and interest paid and
total customer net revenues were $568,600 and $4,591,282 respectively.
59
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 24
Note 6: Long-Term Debt (Continued)
2006 Water Revenue Bonds. In 2006, the City issued water revenue bonds in the amount of $16,905,000 to construct
improvements to the water treatment plant. The bonds bear interest from 3.75% to 4.625%, and are due in annual
installments on June 1 through June 1, 2036 that range from $235,000 to $985,000. At June 30, 2016, the principal
amount outstanding on the bonds was $13,410,000. 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, 2016.
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, 2016, principal and interest paid and
total customer net revenues were $1,032,748 and $4,591,282, respectively.
At June 30, 2016, the aggregate maturities of the business-type revenue bonds were as follows:
For the Year Ending June 30, Principal Interest Total
2017 1,188,960$ 1,103,204$ 2,292,164$
2018 1,235,885 1,055,366 2,291,251
2019 1,289,745 1,003,912 2,293,657
2020 1,251,750 952,039 2,203,789
2021 1,308,315 900,066 2,208,381
2022-2026 5,628,145 3,693,522 9,321,667
2027-2031 5,665,165 2,513,525 8,178,690
2032-2036 7,105,020 1,077,529 8,182,549
2037-2039 167,515 19,637 187,152
24,840,500$ 12,318,800$ 37,159,300$
Loans
2004 State Water Control Board Loan. In 2004, the City obtained a note in the amount of $8,883,200 to go towards the
water reuse project. The note bears an interest rate of 2.5% due in annual installments on August 31 through August 31,
2024 that range from $296,000 to $512,600. At June 30, 2016, the principal amount outstanding on the loan was
$4,188,346.
2001 CIEDB State Loan. In 2001, the City obtained a note in the amount of $7,765,900 to go towards expanding the
March Street parking structure. The note bears an interest rate of 3.37% due in semi-annual installments on February 1
and August 1 through August 31, 2031 that range from $169,000 to $396,000. At June 30, 2016, the principal amount
outstanding on the loan was $5,101,122.
60
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 25
Note 6: Long-Term Debt (Continued)
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, 2039 that range from $212,600 to
$520,744. At June 30, 2016, the principal amount outstanding on the loan was $8,358,154.
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, 2016, principal and interest paid and total
customer net revenues were $533,481 and $8,263,308, respectively.
At June 30, 2016, the aggregate maturities of the aforementioned business-type loans were as follows:
For the Year Ending June 30, Principal Interest Total
2017 938,462$ 420,055$ 1,358,517$
2018 965,353 403,426 1,368,779
2019 993,026 386,268 1,379,294
2020 1,021,502 368,567 1,390,069
2021 1,050,806 350,305 1,401,111
2022-2026 5,198,763 1,456,718 6,655,481
2027-2031 3,764,995 905,239 4,670,234
2032-2036 2,689,518 363,762 3,053,280
2037-2040 1,025,197 33,482 1,058,679
17,647,622$ 4,687,822$ 22,335,444$
Installment Sale Agreements
2008 Suntrust Bond. In 2008, the Board entered into an installment sale contract financing $2,050,000 to finance the
Tank Farm lift station. The terms state an interest rate of 4.2% due in annual installments through 2023 that range from
$372,900 to $607,200. At June 30, 2016, the principal amount outstanding on the loan was $1,245,000.
US Bank 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, 2016, the principal amount outstanding on the loan was $6,687,327.
61
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 26
Note 6: Long-Term Debt (Continued)
At June 30, 2016, the aggregate maturities of the aforementioned business-type installment sale agreements were as
follows:
For the Year Ending June 30, Principal Interest Total
2017 565,889$ 237,110$ 802,999$
2018 583,354 218,689 802,043
2019 601,211 199,660 800,871
2020 619,441 179,994 799,435
2021 643,055 292,673 935,728
2022-2026 3,148,710 485,134 3,633,844
2027-2029 1,770,667 78,000 1,848,667
7,932,327$ 1,691,260$ 9,623,587$
There are a number of limitations and restrictions contained in the various bond indentures. City management believes
that the City has complied with the indenture requirements. Security for revenue bonds is paid from receipts or net income
and amounts in funds or accounts established under bond indentures.
Note 7: Pension Plans and Other Post-Employment Benefits
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 five cost
sharing employer plans for its safety employees (Safety Plans). The Miscellaneous Plan is described in the first section
of the footnote under Agent-Multiple Employer Plan and the Safety Plans follow and are described in the second section
of the footnote under Cost-Sharing Employer Plans. The portion of the Miscellaneous Plan that has been allocated to the
Whale Rock Commission, an Agency Fund, is included in the Miscellaneous Plan summaries in this footnote. A summary
of the government-wide balances for all Plans at June 30, 2016 are as follows:
Net Pension Deferred Outflows Deferred Inflows
Liability of Resources of Resources
Miscellaneous Plan 64,831,137$ 10,879,246$ 9,765,201$
Safety Plans 56,260,280 9,101,776 4,539,058
Less: Whale Rock Agency Fund (1,082,680) (162,511) (163,079)
Total Government-Wide 120,008,737$ 19,818,511$ 14,141,180$
62
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 27
Note 7: Pension Plans and Other Post-Employment Benefits (Continued)
Agent-Multiple Employer Plan
General Information about the Pension Plan
Plan Descriptions. As noted above, the City contributes to CalPERS for a defined benefit pension plan for all qualified
permanent and probationary employees. CalPERS acts as a common investment and administrative agent for its
participating member employers. Benefit provisions under the Plan are established by State statute and City resolution.
CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions,
assumptions and membership information that can be found on the CalPERS website.
Benefits Provided. CalPERS provides service retirement and disability benefits, annual cost of living adjustments and
death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited
service, equal to one year of full time employment for Tier 1 employees. Tier 2 and PEPRA employees are based on a
three year average of full time employment. Members with five years of total service are eligible to retire at age 50 with
statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death
benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death
Benefit. The cost of living adjustments for the plan are applied as specified by the Public Employees’ Retirement Law.
The Miscellaneous Plan’s provisions and benefits in effect at June 30, 2016, are summarized as follows:
Prior to On or after On or after
Hire date December 6, 2012 December 6, 2012 January 1, 2013
Benefit formula 2.7% @ 55 2% @ 60 2% @ 62
Benefit vesting schedule 5 years service 5 years service 5 years service
Benefit payments monthly for life monthly for life monthly for life
Retirement age 50 - 55 50 - 63 52 - 67
Monthly benefits, as a % of
eligible compensation 2.0% to 2.7% 1.092% to 2.418% 1.0% to 2.5%
Required employee contribution rates 8% 7% 6.25%
Required employer contribution rates 29.577% 29.577% 29.577%
Miscellaneous Plan
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.
63
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 28
Note 7: Pension Plans and Other Post-Employment Benefits (Continued)
Employees Covered. At June 30, 2016, the following employees were covered by the benefit terms for the Miscellaneous
Plan:
Miscellaneous Plan
Inactive employees or beneficiaries
currently receiving benefits 351
Inactive employees entitled to but
not yet receiving benefits 181
Active employees 303
Total 835
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.
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, 2015, using an annual
actuarial valuation as of June 30, 2014 rolled forward to June 30, 2015 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 liabilities in the June 30, 2014 actuarial valuations were determined using the
following actuarial assumptions:
Miscellaneous Plan
Valuation Date June 30, 2014
Measurement Date June 30, 2015
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:
Discount Rate 7.65%
Inflation 2.75%
Projected Salary Increase Varies by Entry Age and Service (1)
Investment Rate of Return 7.65% (2)
Mortality (3)
(1) Depending on age, service and type of employment.
(2) Net of pension investment expenses, including inflation.
(3) Derived using CalPERS' Membership Data for all Funds
64
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 29
Note 7: Pension Plans and Other Post-Employment Benefits (Continued)
The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2014 valuation were based
on the results of a January 2015 actuarial experience study for the period 1997 to 2011. Further details of the Experience
Study can found on the CalPERS website.
Change in Assumptions. According to Paragraph 68 of GASB 68, the long-term expected rate of return should be
determined net of pension plan investment expense but without reduction for pension plan administrative expense. The
discount rate of 7.50% used for the June 30, 2014 measurement date was net of administrative expenses. The discount
rate of 7.65% used for the June 30, 2015 measurement date is without reduction of pension plan administrative expense.
Discount Rate. The discount rate used to measure the total pension liability was 7.65% for the Plan. To determine
whether the municipal bond rate should be used in the calculation of a discount rate for each plan, CalPERS stress tested
plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate.
Based on the testing, none of the tested plans run out of assets. Therefore, the current 7.65% discount rate is adequate
and the use of the municipal bond rate calculation is not necessary. The long term expected discount rate of 7.65% will
be applied to all plans in the Public Employees Retirement Fund (PERF). The stress test results are presented in a detailed
report that can be obtained from the CalPERS website.
The long-term expected rate of return on pension plan investments was determined using a building-block method in
which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment
expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market
return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes,
expected compound returns were calculated over the short-term (first 10 years) and the long-term (11-60 years) using a
building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of
benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected
return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and
long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and
rounded down to the nearest one quarter of one percent.
65
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 30
Note 7: Pension Plans and Other Post-Employment Benefits (Continued)
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.
Current
Target Real Return Real Return
Asset Class Allocation Years 1 - 10 (a)Years 11+ (b)
Global Equity 51.0% 5.25% 5.71%
Global Fixed Income 19.0% 0.99% 2.43%
Inflation Sensitive 6.0% 0.45% 3.36%
Private Equity 10.0% 6.83% 6.95%
Real Estate 10.0% 4.50% 5.13%
Infrastructure and Forestland 2.0% 4.50% 5.09%
Liquidity 2.0% -0.55% -1.05%
(a) An expected inflation of 2.5% used for this period
(b) An expected inflation of 3.0% used for this period
Miscellaneous Plan
Changes in the Net Pension Liability
The changes in the Net Pension Liability for the Miscellaneous Plan follows:
Plan Net
Total Fiduciary Pension
Pension Net Liability/
Liability Position (Asset)
Balance at June 30, 2014 180,572,094$ 117,943,433$ 62,628,661$
Changes during the year:
Service cost 3,578,172 3,578,172
Interest on the total pension liability 13,193,597 13,193,597
Changes in assumptions (3,057,724) (3,057,724)
Differences between Expected and
actual experience (2,433,791) (2,433,791)
Contribution - employer 5,027,356 (5,027,356)
Contribution - employee 1,509,834 (1,509,834)
Net investment income 2,673,657 (2,673,657)
Benefit payments, including refunds
of employee contributions (8,808,668) (8,808,668) -
Administrative expense (133,069) 133,069
Net changes 2,471,586 269,110 2,202,476
Balance at June 30, 2015 183,043,680$ 118,212,543$ 64,831,137$
66
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 31
Note 7: Pension Plans and Other Post-Employment Benefits (Continued)
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:
Miscellaneous Plan
1% Decrease 6.65%
Net Pension Liability 87,943,779$
Current Discount Rate 7.65%
Net Pension Liability 64,831,137$
1% Increase 8.65%
Net Pension Liability 45,595,824$
Pension Plan Fiduciary Net Position. Detailed information about the pension plan’s fiduciary net position is available
in the separately issued CalPERS financial reports.
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
For the year ended June 30, 2016, the City’s pension expense for the Miscellaneous Plan was $3,862,563, of which
$3,798,059 was recognized pension expense for the City and $64,504 was recognized as pension expense for Whale Rock
Agency Fund. At June 30, 2016, the City reported deferred outflows of resources and deferred inflows of resources
related to pensions from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to
measurement date 5,885,722$ $
Changes in assumptions 2,038,483
Differences between expected and
actual experiences 1,622,527
Net differences between projected and
actual earnings on plan investments 4,993,524 6,104,191
Total 10,879,246$ 9,765,201$
Miscellaneous Plan
67
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 32
Note 7: Pension Plans and Other Post-Employment Benefits (Continued)
The deferred outflows of resources related to contributions subsequent to the measurement date of $5,885,722 will be
recognized as a reduction of the net pension liability in the year ended June 30, 2017. Other amounts reported as deferred
outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as
follows:
Measurement Period
Ended June 30 Amount
2016 (2,616,854)$
2017 (2,616,854)
2018 (786,351)
2019 1,248,382
(4,771,677)$
Miscellaneous Plan
Payable to the Pension Plan
At June 30, 2016, the City reported a payable of $0 for the outstanding amount of contributions to the pension plan
required for the year ended June 30, 2016.
Cost-Sharing Employer Plans
General Information about the Pension Plans
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 safety cost-sharing multiple-employer plans. The Safety Plans consist of Safety Tier 1 (police
and fire), Police Tier 2, Fire Tier 2, Police PEPRA and Fire PEPRA.
Benefits Provided. CalPERS provides service retirement and disability benefits, annual cost of living adjustments and
death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited
service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age
50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service.
The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement
2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’
Retirement Law.
68
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 33
Note 7: Pension Plans and Other Post-Employment Benefits (Continued)
The Plans’ provisions and benefits in effect at June 30, 2016, are summarized as follows:
Police Fire Police Fire
Prior to Prior to On or after On or after
Hire date December 6, 2012 August 30, 2012 December 6, 2012 August 30, 2012
Benefit formula 3.0% @ 50 3.0% @ 50 2.0% @ 50 3.0% @ 55
Benefit vesting schedule 5 years service 5 years service 5 years service 5 years service
Benefit payments monthly for life monthly for life monthly for life monthly for life
Retirement age 50 - 55 50 - 55 50-55 50 - 55
Monthly benefits, as a % of eligible compensation 3.00% 3.00% 2.0% to 2.7% 2.4% to 3%
Required employee contribution rates 9% 9% 9% 9%
Required employer contribution rates 20.230% 20.230% 15.373% 17.295%
Safety Tier 1 Safety Tier 2
Police PEPRA Fire PEPRA
On or after On or after
Hire date January 1, 2013 January 1, 2013
Benefit formula 2.7% @ 57 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service
Benefit payments monthly for life monthly for life
Retirement age 50-57 50-57
Monthly benefits, as a % of eligible compensation 2.0% to 2.7% 2.0% to 2.7%
Required employee contribution rates 12.250% 12.250%
Required employer contribution rates 12.821% 12.250%
The Safety Tier 1 plans are 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 1
following notice of a change in the rate. Funding contributions for both Plans 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. Members of the Police Officers Association contribute 3% of pay toward the cost of the City's share of the
annual required contribution.
69
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 34
Note 7: Pension Plans and Other Post-Employment Benefits (Continued)
For the year ended June 30, 2016, the contributions recognized as part of pension expense were as follows:
Contributions - employer 4,650,871$
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
As of June 30, 2016, the City reported a net pension liability for its proportionate share of the net pension liability as
follows:
Plan's Proportionate Share of the
Net Pension Liability 56,260,280$
The City’s net pension liability for each Plan is measured as the proportionate share of the net pension liability. The net
pension liability of each of the Plans is measured as of June 30, 2015, and the total pension liability for each Plan used to
calculate the net pension liability was determined by an actuarial valuation as of June 30, 2014 rolled forward to June 30,
2015 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 June 30, 2014 and
2015 was as follows:
Proportionate Share
Percentage share at 6/30/2014 1.375440%
Percentage share at 6/30/2015 1.365393%
Change - Increase/(Decrease) -0.01005%
70
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 35
Note 7: Pension Plans and Other Post-Employment Benefits (Continued)
For the year ended June 30, 2016, the City recognized pension expense of $2,588,061 for the Safety Plans. At June 30,
2016, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the
following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 5,824,217$ $
Changes in assumptions 2,632,517
Differences between expected and
actual experiences 572,365
Change in employer's proportion and differences
between the employer's contributions and the
employer's proportionate share of contributions 992,494
Net differences between projected and actual earnings
on plan investments 1,334,176
Adjustment due to differences in proportions 2,285,065
Total 9,101,776$ 4,539,058$
Safety - All Plans
Pension contributions subsequent to the measurement date of $5,824,217 are reported as deferred outflows of resources
and will be recognized as a reduction of the net pension liability in the year ended June 30, 2017. Other amounts reported
as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension
expense as follows:
Measurement Period
Ended June 30 Amount
2016 (949,732)$
2017 (958,113)
2018 (991,441)
2019 1,637,787
(1,261,499)$
Safety - All Plans
71
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 36
Note 7: Pension Plans and Other Post-Employment Benefits (Continued)
Actuarial Assumptions. The total pension liabilities in the June 30, 2014 actuarial valuations for all Safety Plans were
determined using the following actuarial assumptions:
Safety - All Plans
Valuation Date June 30, 2014
Measurement Date June 30, 2015
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:
Discount Rate 7.65%
Inflation 2.75%
Projected Salary Increase Varies by Entry Age and Service (1)
Post Retirement Benefit Increase (2)
Mortality (3)
(1) Depending on age, service and type of employment.
(2) Contract COLA up to 2.75% until Purchasing Power Protection Allowance Floor on
Purchasing Power applies, 2.75% thereafter
(3) Derived using CalPERS' Membership Data for all Funds
The mortality table used was developed based on CalPERS’ specific data. The table includes 20 years of mortality
improvements using Society of Actuaries Scale BB. For more details on this table, please refer to the 2014 experience
study report.
All other actuarial assumptions used in the June 30, 2014 valuation were based on the results of an actuarial experience
study for the period 1997 to 2011, including updates to salary increase, mortality and retirement rates. Further details of
the Experience Study can found on the CalPERS website under Forms and Publications.
Change in Assumptions. According to Paragraph 68 of GASB 68, the long-term expected rate of return should be
determined net of pension plan investment expense but without reduction for pension plan administrative expense. The
discount rate of 7.50% used for the June 30, 2014 measurement date was net of administrative expenses. The discount
rate of 7.65% used for the June 30, 2015 measurement date is without reduction of pension plan administrative expense.
Discount Rate. The discount rate used to measure the total pension liability was 7.65% for each Plan. To determine
whether the municipal bond rate should be used in the calculation of a discount rate for each plan, CalPERS stress tested
plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate.
Based on the testing, none of the tested plans run out of assets. Therefore, the current 7.65% discount rate is adequate
and the use of the municipal bond rate calculation is not necessary. The long term expected discount rate of 7.65% will
be applied to all plans in the Public Employees Retirement Fund (PERF). The stress test results are presented in a detailed
report that can be obtained from the CalPERS website.
72
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 37
Note 7: Pension Plans and Other Post-Employment Benefits (Continued)
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 both short-term and long-term market
return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes,
expected compound returns were calculated over the short-term (first 10 years) and the long-term (11-60 years) using a
building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of
benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected
return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and
long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and
rounded down to the nearest one quarter of one percent.
The table below reflects the long-term expected real rate of return by asset class. The rate of return was calculated using
the capital market assumptions applied to determine the discount rate and asset allocation. These rates of return are net
of administrative expenses.
Current
Target Real Return Real Return
Asset Class Allocation Years 1 - 10 (a)Years 11+ (b)
Global Equity 51.0% 5.25% 5.71%
Global Fixed Income 19.0% 0.99% 2.43%
Inflation Sensitive 6.0% 0.45% 3.36%
Private Equity 10.0% 6.83% 6.95%
Real Estate 10.0% 4.50% 5.13%
Infrastructure and Forestland 2.0% 4.50% 5.09%
Liquidity 2.0% -0.55% -1.05%
(a) An expected inflation of 2.5% used for this period
(b) An expected inflation of 3.0% used for this period
73
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 38
Note 7: Pension Plans and Other Post-Employment Benefits (Continued)
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 all 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:
1% Decrease 6.65%
Net Pension Liability 90,204,549$
Current Discount Rate 7.65%
Net Pension Liability 56,260,280$
1% Increase 8.65%
Net Pension Liability 2,842,603$
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, 2016, the City reported a payable of $0 for the outstanding amount of contributions to the pension plan
required for the year ended June 30, 2016.
Other Post-Employment Benefits (OPEB)
The City’s primary OPEB cost obligation is for retiree health benefits under the election to participate in the California
Public Employees’ Retirement System (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). The required employer contribution was
$125.00 per employee per month in 2015-16. Retirees pay the differential monthly amount of the premium, which varies
depending on the health benefits they select.
Additionally, the City has established certain post-retirement health care benefits available to executive management
employees appointed prior to August 2000. For 5 former employees, the City contributes to the cost of the retiree health
insurance premiums if they elect to remain members of the City's group health plan. This provision ceases upon the death
of the employee or upon the retired employee reaching age 65.
During the fiscal year ended June 30, 2009, the City entered into an agreement with California Employers’ Retiree Benefit
Trust (CERBT) to pre-fund the City’s OPEB liability.
74
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 39
Note 7: Pension Plans and Other Post-Employment Benefits (Continued)
Funding Policy. 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.
The annual required contribution (ARC) is an amount actuarially determined in accordance with the parameters of GASB
standards. The City’s ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal
cost each year and amortize the unfunded actuarial liability over a period of 30 years. The ARC for 2015-16 was $607,000.
For fiscal year 2015-16, the City contributed $857,000 to the Plan, which fully funded the ARC. The City paid $280,000
to the CalPERS Health Benefit Program and retirees during the year and $327,000 to the CERBT. In addition, the City
contributed an additional $250,000 to the Plan.
CERBT is a tax-qualified irrevocable trust organized under Internal Revenue Code Section 115 and established to pre-
fund retiree healthcare benefits. CERBT issues a publicly available financial report including GASB disclosure
information in aggregate with other CERBT participating employers. That report may be obtained by contacting
CalPERS, 400 P Street, Sacramento, CA 95814.
Annual OPEB Cost and Net OPEB Obligation. For the fiscal year ended June 30, 2016, the City’s annual OPEB cost
(expense) of $607,000 was equal to the annual required contribution.
The City’s Annual OPEB Cost, the percentage of Annual OPEB Cost contributed to the Plan (as described in the funding
policy above) and the Net OPEB Obligation is as follows:
Fiscal
Year
Ended
Annual
OPEB Cost
Percentage of Annual
OPEB Cost
Contributed
Net OPEB
Obligation
6/30/2016 607,000$ 100% -
6/30/2015 588,000 100% -
6/30/2014 576,000 100% -
Funded Status and Funding Progress. The funded status of the plan as of June 30, 2015, the plan’s most recent actuarial
valuation date, was as follows:
Actuarial accrued liability (AAL) 13,173,000$
Actuarial value of plan assets 4,788,000
Unfunded actuarial accrued liability (UAAL) 8,385,000
Funded ratio (actuarial value of plan assets/AAL) 36.3%
Covered payroll (active Plan members) 29,989,000
UAAL as a percentage of covered payroll 28.0%
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the
probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality,
75
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 40
Note 7: Pension Plans and Other Post-Employment Benefits (Continued)
and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required
contributions of the employer are subject to continual revision as actual results are compared with past expectations and
new estimates are made about the future.
The schedule of funding progress is presented as required supplementary information following the notes to the financial
statements. The schedule presents multiyear trend information about whether the actuarial value of Plan assets is
increasing or decreasing over time relative to the actuarial accrued liability for benefits.
Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based on the substantive
plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time
of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that
point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-
term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective
of the calculations.
In the June 30, 2015 actuarial valuation, the entry age normal actuarial cost method was used. The actuarial assumptions
included a 7.00% investment rate of return (net of administrative expenses), which is below the expected 7.61% long-
term investment return on CERBT investments and a 3% inflation assumption. The projected health care cost trend rates
range from 8-8.3% for 2015 down to 5% after 2021. The unfunded actuarial accrued liability (UAAL) is being amortized
over 30 years based on a level percentage of payroll. The remaining amortization period at June 30, 2016 was 22 years.
Note 8: Interfund Transactions
Interfund receivable and payable balances as of June 30, 2016 consist of the following:
Interfund
Receivables
Interfund
Payables
General Fund 517,788$ $
Nonmajor Governmental Funds: 517,788
Total 517,788$ 517,788$
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.
76
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 41
Note 8: Interfund Transactions (Continued)
Interfund transfers are used to move revenues from the fund with collection authorization to the debt service fund as debt
service principal and interest payments become due or to move unrestricted revenues to finance various programs that the
government must account for in other funds in accordance with budgetary authorizations. This may include amounts
provided as matching funds for various grant programs.
Interfund transfers for the year ended June 30, 2016 consist of the following:
Transfers In Transfers Out
General Fund 2,920,748$ 9,772,930$
Capital Outlay 3,242,443 53,900
Nonmajor Governmental Funds 6,584,387 1,484,700
Enterprise Funds 1,436,048
Total 12,747,578$ 12,747,578$
Note 9: Joint Ventures, Jointly Governed Organizations and Operating Agreements
The City participates in three multi-governmental organizations: the Whale Rock Commission, the San Luis Obispo
Regional Transit Authority, and the San Luis Obispo Council of Governments. The City also has an operating agreement
related to Nacimiento Water Supply Project. The following provides a general description of each of these agencies and
operating agreements along with a summary of financial information and indebtedness:
Whale Rock Commission
General Description. The Whale Rock Commission (Commission) was established on December 12, 1960 to govern the
operations of the Whale Rock Reservoir. The Commission is composed of six voting members and two non-voting
members: three voting members are appointed by the City; one is appointed by California Polytechnic State University;
one by California Men's Colony; and one by the Director of Finance, State of California. The two non-voting members
are position appointments: the Director of Water Resources, State of California; and the Water Superintendent, City of
San Luis Obispo. The Commission is authorized by their respective agencies to establish policies for the operation of the
Reservoir, to contract for the sale of excess water, and to approve the annual budget.
The City, in accordance with established policies of the Commission, operates and maintains the Reservoir; prepares and
recommends the annual budget; and maintains the fiscal records and funds of the Commission. The Whale Rock Agency
Fund is used to account for the Commission's ongoing operating activities. Ownership in the Reservoir is as follows:
55.05%, City of San Luis Obispo; 33.71%, California Polytechnic State University; and 11.24%, California Men's Colony.
The City's share of the Commission's expenses are recorded as expenses of the Water Fund. All receipts and
disbursements of the Commission are included in an Agency Fund.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 42
Note 9: 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 $3,900,000, and was amortized on a straight-line basis
over thirty-five years. Separate financial statements are available from the Whale Rock Commission, 879 Morro Street,
San Luis Obispo, CA 93401.
The following segment financial information for the Whale Rock Commission and the Water Fund’s related investment
in the joint venture is presented as of and for the year ended June 30, 2016:
City's Investment
Joint Venture in Joint Venture
Total assets 2,652,099$ 1,460,000$
Total liabilities 1,384,013 761,900
Fund balance 1,268,086 698,100
Total revenues 1,438,507$ 791,900$
Total expenditures 1,004,004 552,700
Excess of revenues over (under) expenditures 434,503$ 239,200$
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 2015-16 the City contributed approximately $673,290 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.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 43
Note 9: 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 3,380 acre-feet of water per year to the City of San Luis Obispo from the Nacimiento Water
Supply Project (Project). The agreement includes conditions relative to the costs associated with the project and how
these costs will be shared and paid by the participants in the project.
Each project participant, including the City, has entered into an agreement in order to provide for the development,
financing, construction, operation and maintenance of the Project. The agreement is a “take-or-pay” obligation: the City
is obligated to pay amounts specified in the agreement whether or not water is delivered. The City is required to pay an
amount equal to its share of various capital expenses relating to the funding of design costs, engineering, planning,
environmental mitigation, equipping new facilities and/or construction efforts, accounting services, project administration
and management, installation, grading, razing and building the Project. The City is also required to pay for its share of
operating and maintenance costs. The City records these payments as operating expenses in its water enterprise fund.
The City is required to make payments under its agreement solely from the revenues of its water system. The City agreed
to establish, fix 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.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 44
Note 9: 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. These bonds were refinanced in August 2015. In addition, the District sold water revenue
bonds in the amount of $182 million. Based on the City’s share of construction costs, debt service and operating and
maintenance, the following summarizes the City’s Project obligations for 2015-16 and five year projections for the 2015
bonds and the 2007 bonds that will remaining outstanding following the refunding.
Actual 2015-16 5,418,007$
Projected:
2016-17 4,988,512
2017-18 4,986,702
2018-19 4,985,758
2019-20 4,945,455
2021-25 24,740,788
2026-30 24,730,358
2031-35 24,739,466
2036-40 25,154,900
2041 5,368,221
Nacimiento Water Supply Obligations
Separate financial statements are available from the San Luis Obispo County Flood Control and Water Conservation
District, 1050 Monterey Street, San Luis Obispo, CA 93401.
Note 10: Risk Management
California Joint Powers Insurance Authority
The City is a member of the California Joint Powers Insurance Authority (Authority). The Authority is composed of 119
California public entities and is organized under a joint powers agreement pursuant to California Government Code §
6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to
purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of
coverage. The California JPIA began covering claims of its members in 1978. Each member government has an elected
official as its representative on the Board of Directors. The Board operates through a nine-member Executive Committee.
Each member pays an annual contribution to cover estimated losses for the coverage period. This initial funding is paid
at the beginning of the coverage period. After the close of the coverage period, outstanding claims are valued. A
retrospective deposit computation is then conducted annually thereafter until all claims incurred during the coverage
period are closed on a pool-wide basis. This subsequent cost reallocation among members based on actual claim
development can result in adjustments of either refunds or additional deposits required.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 45
Note 10: Risk Management (Continued)
The total funding requirement for self-insurance programs is estimated using actuarial models and prefunded through the
annual contribution. Costs are allocated to individual agencies based on exposure (payroll) and experience (claims)
relative to other members of the risk-sharing pool. Additional information regarding the cost allocation methodology is
provided below.
Self-Insurance Programs of the Authority
Liability. In the liability program claims are pooled separately between police and non-police exposures. (1) The payroll
of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each
member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first
layer of losses includes incurred costs up to $30,000 for each occurrence and is evaluated as a percentage of the pool’s
total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $30,000 to $750,000
for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred
costs in excess of $750,000 up to the reinsurance attachment point of $5 million are distributed based on the outcome of
cost allocation within the first and second loss layers. (5) Costs of covered claims from $5 million to $10 million are paid
under a reinsurance contract subject to a $2.5 million annual aggregate deductible. The $2.5 million annual aggregate
deductible is fully covered under a separate policy; as such no portion of it is retained by the Authority. Costs of covered
claims from $10 million to $15 million are paid under two reinsurance contracts subject to a combined $3 million annual
aggregate deductible. The $3.0 million annual aggregate deductible is fully retained by the Authority. (6) Costs of
covered claims from $15 million to $20 million are paid under reinsurance agreements. (7) Costs of covered claims from
$20 million to $50 million are paid under excess insurance policies.
The overall coverage limit for each member including all layers of coverage is $50 million per occurrence.
Costs of covered claims for subsidence losses are paid by reinsurance and excess insurance with a pooled sub-limit of
$30 million per occurrence. This $30 million subsidence sub-limit is composed of (a) $5 million retained within the
pool’s SIR, (b) $15 million in reinsurance, subject to the same annual aggregate deductibles previously stated, and (c) $10
million in excess insurance. The excess insurance layer has a $10 million annual aggregate limit.
Workers’ Compensation. In the workers’ compensation program claims are pooled separately between public safety
(police and fire) and non-public safety exposures. (1) The payroll of each member is evaluated relative to the payroll of
other members. A variable credibility factor is determined for each member, which establishes the weight applied to
payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to
$50,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer.
(3) The second layer of losses includes incurred costs from $50,000 to $100,000 for each occurrence and is evaluated as
a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs in excess of $100,000 up to the
reinsurance attachment point of $2 million are distributed based on the outcome of cost allocation within the first and
second loss layers. (5) Costs of covered claims from $2 million up to statutory limits are paid under a reinsurance policy.
Protection is provided per statutory liability under California Workers’ Compensation Law.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 46
Note 10: Risk Management (Continued)
Employer’s Liability losses are pooled among members to $2 million. Coverage from $2 million to $5 million is
purchased as part of a reinsurance policy, and Employer’s Liability losses from $5 million to $10 million are pooled
among members.
Purchased Insurance
Pollution Legal Liability Insurance. The City participates in the pollution legal liability insurance program (formerly
called environmental insurance) which is available through the Authority. The policy covers sudden and gradual pollution
of scheduled property, streets, and storm drains owned by the City. Coverage is on a claims-made basis. There is a
$50,000 deductible. The Authority has a limit of $50 million for the 3-year period from July 1, 2014 through July 1,
2017. Each member of the Authority has a $10 million sub-limit during the 3-year term of the policy.
Property Insurance. The City of participates in the all-risk property protection program of the Authority. This insurance
protection is underwritten by several insurance companies. City property is currently insured according to a schedule of
covered property submitted by the City to the Authority. City property currently has all-risk property insurance protection
in the amount of $221,871,141. There is a $5,000 deductible per occurrence except for non-emergency vehicle insurance
which has a $1,000 deductible. Premiums for the coverage are paid annually and are not subject to retrospective
adjustments.
Crime Insurance. The City purchases crime insurance coverage in the amount of $1,000,000 with a $2,500 deductible.
The fidelity coverage is provided through the Authority. Premiums are paid annually and are not subject to retrospective
adjustments.
Special Event Tenant User Liability Insurance. The City further protects against liability damages by requiring tenant
users of certain property to purchase low-cost tenant user liability insurance for certain activities on agency property. The
insurance premium is paid by the tenant user and is paid to the City according to a schedule. The City then pays for the
insurance. The insurance is arranged by the Authority.
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 2015-16.
Separate financial statements are available from the California Joint Powers Insurance Authority, 8081 Moody Street, La
Palma, CA 90623.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 47
Note 10: Risk Management (Continued)
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.
The last actuarial study to determine the undiscounted outstanding claims liability was completed for the year ended
June 30, 2013. 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 (liability) at June 30, 2016 is calculated as follows:
Self-insurance activity as of and for the year ended June 30, 2016
is summarized is as follows:
Interest earnings 4,703$
Claims expense (9,286)$
Estimated liability for reported claims and settlement expenses (748,623)$
Assets on deposit 1,427,843
Estimated unpaid claims asset (liability) 679,220$
Changes in the balances of claim liabilities during the past two fiscal years
are as follows:
Estimated unpaid claims asset (liability) June 30, 2014 617,217$
(Claim payments and related expenditures) reimbursement (152,670)
Change in estimated claims liability June 30, 2015 (103,896)
Interest earnings 3,477
Estimated unpaid claims asset (liability) June 30, 2015 364,128
(Claim payments and related expenditures) reimbursement 9,286
Change in estimated claims liability June 30, 2016 301,103
Interest earnings 4,703
Estimated unpaid claims asset (liability) June 30, 2016 679,220$
83
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 48
Note 11: Operating Lease
The City entered into an operating lease in October 2014 for the use of various office equipment. Total cost for the lease
was $19,942 for the year ended June 30, 2016. At June 30, 2016, the future minimum lease payments were as follows:
For the Year Ending June 30,
2017 20,282$
2018 20,629
2019 20,982
2020 10,625
72,518$
Note 12: Commitments and Contingencies
Litigation
The City is presently involved in certain matters of litigation that have arisen in the normal course of conducting City
business. City management believes, based upon consultation with the City Attorney, that these cases, in the aggregate,
are adequately covered by insurance and not expected to result in a material adverse financial impact on the City.
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.
Note 13: Construction and Other Significant Commitments
Construction and other significant commitments as of June 30, 2016, including encumbrances outstanding at year-end,
are as follows:
General Fund 1,322,592$
Special Revenue Funds 99,276
Capital Project Funds 1,840,305
Enterprise Funds:
Water 448,499
Sewer 197,007
Parking 6,505,683
Transit 1,552,730
Total 11,966,092$
Long term construction contracts are billed and paid on a percentage completion basis by construction phase.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 49
Note 14: Fund Balance Deficiency
At June 30, 2016, the City had no funds with a negative fund balance.
Note 15: Subsequent Events
Diablo Power Plant Closure Settlement Agreement.
On December 13, 2016, the Council approved a Settlement Agreement with Pacific Gas and Electric Company (PG&E)
related to the Diablo Power Plant Closure Joint Proposal. The agreement includes a payment by PG&E of $10 million to
the Economic Development Fund to ease the local economic impacts of the plant’s closure. Of this amount, the City will
receive $1.82 million. In addition, the agreement includes $75 million to the Essential Services Mitigation Fund to offset
the potential negative impacts to essential public services, which will be paid out through the County in nine equal
installments through 2025. The County will redistribute the funds to 71 local agencies whose budgets are impacted by the
inevitable decrease in unitary tax funding from the power plant. Finally, the agreement includes continued funding of
offsite community and local emergency planning efforts over the course of 15 to 25 years.
Note 16: New Accounting Standards
Accounting Standards Adopted
In February 2015, GASB issued Statement No. 72, Fair Value Measurement and Application, which addresses accounting
and financial reporting issues related to fair value measurements. This Statement also provides guidance for applying fair
value to certain investments and disclosures related to all fair value measurements. The provisions of Statement No. 72
are effective for fiscal years beginning after June 15, 2015. Implementation of this statement resulted in additional fair
value measurement disclosures. See Note 2 to the financial statements for further discussion.
In June 2015, GASB issued Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets That
Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68.
The requirements of this Statement extend the approach to accounting and financial reporting established in Statement 68
to all pensions, with modifications as necessary to reflect that for accounting and financial reporting purposes, any assets
accumulated for pensions that are provided through pension plans that are not administered through trusts that meet the
criteria specified in Statement 68 should not be considered pension plan assets. The provisions of Statement No. 73 are
effective for fiscal years beginning after June 15, 2015. Implementation of this statement did not have a material impact
on the City’s financial statements.
In June 2015, GASB issued Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for State and
Local Governments. The objective of this Statement is to identify—in the context of the current governmental financial
reporting environment—the hierarchy of generally accepted accounting principles. The “GAAP hierarchy” consists of
the sources of accounting principles used to prepare financial statements of state and local governmental entities in
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 50
Note 16: New Accounting Standards (Continued
conformity with GAAP and the framework for selecting those principles. This Statement reduces the GAAP hierarchy
to two categories of authoritative GAAP and addresses the use of authoritative and nonauthoritative literature in the event
that the accounting treatment for a transaction or other event is not specified within a source of authoritative GAAP. The
provisions of Statement No. 76 are effective for fiscal years beginning after June 15, 2015. Implementation of this
statement did not have a material impact on the City’s financial statements.
New Accounting Standards
In June 2015, GASB issued Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension
Plans, which establishes financial reporting standards for state and local governmental OPEB plans—defined benefit
OPEB plans and defined contribution OPEB plans—that are administered through trusts or equivalent arrangements. The
provisions of Statement No. 74 are effective for fiscal years beginning after June 15, 2016. Management has not yet
determined the impact of this Statement on its financial statements.
Additionally, in June 2015, GASB issued Statement No. 75, Accounting and Financial Reporting for Postemployment
Benefit Plans Other Than Pensions. Statement No. 75 establishes new accounting and financial reporting requirements
for governments whose employees are provided with OPEB, as well as for certain nonemployer governments that have a
legal obligation to provide financial support for OPEB provided to the employees of other entities. The provisions of
Statement No. 75 are effective for fiscal years beginning after June 15, 2017. Management has not yet determined the
impact of this Statement on its financial statements.
In August 2015, GASB issued Statement No. 77, Tax Abatement Disclosures. Statement No. 77 requires disclosure of
tax abatement information about (1) a reporting government’s own tax abatement agreements and (2) those that are entered
into by other governments and that reduce the reporting government’s tax revenues. The provisions of Statement No. 77
are effective for fiscal years beginning after December 15, 2015. Management has not yet determined the impact of this
Statement on its financial statements.
In December 2015, GASB issued Statement No. 78, Pensions Provided through Certain Multiple-Employer Defined
Benefit Pension Plans. Statement No. 78 addresses a practice issue regarding the scope and applicability of Statement
No. 68 for pensions provided through certain multiple-employer defined benefit pension plans and to state or local
governmental employers whose employees are provided with such pensions. The provisions of Statement No. 78 are
effective for fiscal years beginning after December 15, 2015. Management has not yet determined the impact of this
Statement on its financial statements.
In December 2015, GASB issued Statement No. 79, Certain External Investment Pools and Pool Participants. Statement
No. 79 addresses accounting and financial reporting for certain external investment pools and pool participants. The
provisions of Statement No. 79 are effective for reporting periods beginning after June 15, 2016. Management has not
yet determined the impact of this Statement on its financial statements.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 51
Note 16: New Accounting Standards (Continued)
In January 2016, GASB issued Statement No. 80, Blending Requirements for Certain Component Units – an amendment
of GASB Statement No. 14. Statement No. 80 amends the blending requirements established in paragraph 53 of Statement
No. 14, The Financial Reporting Entity, as amended. The provisions of Statement No. 80 are effective for fiscal years
beginning after December 15, 2015. Management has not yet determined the impact of this Statement on its financial
statements.
In March 2016, GASB issued Statement No. 81, Irrevocable Split-Interest Agreements. Statement No. 81 requires that a
government that receives resources pursuant to an irrevocable split-interest agreement recognize assets, liabilities, and
deferred inflows of resources at the inception of the agreement. The Statement also provides additional recognition and
measurement guidance for situations in which a government is a beneficiary of the agreement. The provisions of
Statement No. 81 are effective for fiscal years beginning after December 15, 2016. Management has not yet determined
the impact of this Statement on its financial statements.
In March 2016, GASB issued Statement No. 82, Pension Issues—an amendment of GASB Statements No. 67, No. 68, and
No. 73. Statement No. 82 addresses issues regarding (1) the presentation of payroll-related measures in required
supplementary information, (2) the selection of assumptions and the treatment of deviations from the guidance in an
Actuarial Standard of Practice for financial reporting purposes, and (3) the classification of payments made by employers
to satisfy employee (plan member) contribution requirements. The provisions of Statement No. 82 are effective for fiscal
years beginning after June 15, 2016. Management has not yet determined the impact of this Statement on its financial
statements.
In November 2016, GASB issued Statement No. 83, Capital Asset Retirement Obligations. Statement No. 83 provides
financial statement users with information about asset retirement obligations that were not addressed in GASB standards
by establishing uniform accounting and financial reporting requirements for these obligations. The provisions of
Statement No. 83 are effective for reporting periods beginning after June 15, 2018. Management has not yet determined
the impact of this Statement on its financial statements.
Note 17: Prior Year Restatements
During 2016, a prior year restatement was recorded to properly restate deferred inflow of resources related to pensions
that had been amortized during the year ended June 30, 2015 rather than amortized during the measurement period ending
June 30, 2015. The effect was to increase deferred inflows of resources related to pensions and decrease beginning net
position by $3,576,490 for Governmental Activities and $638,905 for Business-Type Activities for the year ended
June 30, 2016.
During 2016, a prior year restatement was recorded to properly state capital asset activity based on reconciliation
procedures performed during the implementation of a new fixed assets recording system in the current year and to resolve
prior year(s) differences. The effect was to decrease capital assets, net of accumulated depreciation, and beginning net
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2016
Page 52
Note 17: Prior Year Restatements (Continued)
position by $399,643 for Governmental Activities and increase capital assets, net of accumulated depreciation, and
beginning net position by $672,141 for Business-Type Activities for the year ended June 30, 2015.
During 2016, a prior year restatement was recorded to properly record the City’s investment in the Whale Rock
Commission, a joint venture. The effect was to increase investment in joint venture and beginning net position by
$458,800 for the Water Fund for the year ended June 30, 2015.
During 2016, a prior year restatement was recorded due to a missed recording of the 4th quarter required transfer from the
General Fund to the Capital Outlay fund in the prior year. The effect was to increase transfers out and decrease beginning
net position by $709,620 for the General Fund and increase transfers in and beginning net position by $709,620 for the
Capital Outlay Fund for the year ended June 30, 2015.
REQUIRED SUPPLEMENTARY INFORMATION
(UNAUDITED)
89
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund
For the Fiscal Year Ended June 30, 2016
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
Revenues:
Taxes and franchise fees:
Sales and use tax - general 17,247,004$ 17,537,004$ 17,498,218$ (38,786)$
Sales and use tax - Half Percent Sales Tax 7,133,054 7,397,054 7,178,159 (218,895)
Sales tax - Prop 172 419,631 419,631 405,066 (14,565)
Property tax 9,726,500 9,726,500 10,186,858 460,358
Transient occupancy tax 6,843,873 6,843,873 7,127,756 283,883
Utility users tax 5,505,703 5,505,703 5,413,720 (91,983)
Property tax in lieu of VLF 4,041,808 4,041,808 4,113,244 71,436
Franchise taxes 1,540,364 1,540,364 1,537,922 (2,442)
Business tax 2,338,753 2,338,753 2,491,516 152,763
Real property transfer tax 183,600 183,600 366,088 182,488
Total taxes 54,980,290 55,534,290 56,318,547 784,257
Fines, forfeitures and penalties 156,000 156,000 172,353 16,353
Use of money and property 331,700 331,700 582,993 251,293
Subventions and grants:
Homeowners' property tax relief 74,000 74,000 75,044 1,044
Other in-lieu 22,000 22,000 37,175 15,175
Police training grant (POST) 40,000 40,000 15,667 (24,333)
COPS grant AB 3229 100,000 100,000 143,942 43,942
Mutual aid reimbursements 656,878 949,584 292,706
State SB90 refunds 108,718 108,718
Transportation grants 85,000 85,000 79,094 (5,906)
Other State and Federal grants 2,000 130,044 129,645 (399)
Total subventions and grants 323,000 1,107,922 1,538,869 430,947
See notes to required supplementary information.
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City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2016
Page 2
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
Charges for services:
Public safety:
Police 596,450$ 487,098$ 634,461$ 147,363$
Fire:
Cal Poly fire services 273,391 273,391 273,391 -
Medical emergency recovery 172,500 172,500 174,620 2,120
Fire safety/hazardous materials permits 130,000 130,000 135,909 5,909
Multi-dwelling unit inspections 194,000 194,000 195,378 1,378
Other fire revenues 105,000 106,609 125,195 18,586
Community development:
Planning and zoning fees 250,610 597,920 731,828 133,908
Construction plan and check inspections 2,682,847 2,940,847 3,242,708 301,861
Infrastructure plan check and inspections 474,000 474,000 845,203 371,203
Fire plan check and inspections 276,500 350,000 396,607 46,607
Encroachment permits 126,953 126,953 165,902 38,949
RHIP Fees (10,000) 136,150 235,831 99,681
Culture and recreation:
Adult athletic fees 122,400 122,400 113,861 (8,539)
Youth athletic fees 33,700 33,700 25,000 (8,700)
Skatepark 2,000 2,000 (2,000)
Instruction fees 91,000 91,000 93,780 2,780
Special event fees 92,700 93,387 88,456 (4,931)
Rental and use fees 161,500 161,500 181,572 20,072
Children services 600,000 600,000 772,553 172,553
Teens & seniors 1,500 1,500 7,940 6,440
Aquatics 249,700 257,549 209,032 (48,517)
Golf course 291,700 293,035 267,148 (25,887)
General government:
Other service charges 412,550 412,550 406,081 (6,469)
Total charges for services 7,331,001 8,058,089 9,322,456 1,264,367
Other revenues:
Insurance refunds 30,000 30,000 40,233 10,233
Sale of surplus property 7,486 7,486
Other 35,000 52,042 101,501 49,459
Total other revenues 65,000 82,042 149,220 67,178
Total Revenues 63,186,991 65,270,043 68,084,438 2,814,395
See notes to required supplementary information.
91
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2016
Page 3
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
Expenditures:
Public Safety:
Police protection:
Administration 1,541,390$ 1,552,406$ 1,419,332$ 133,074$
Investigations 2,666,768 2,718,444 2,741,900 (23,456)
Neighborhood services 239,137 242,194 220,222 21,972
Support services 2,420,963 2,467,471 2,416,994 50,477
Patrol services 6,515,145 7,444,018 7,293,773 150,245
Traffic safety 781,400 789,079 669,276 119,803
Total police protection 14,164,803 15,213,612 14,761,497 452,115
Fire and environmental safety:
Administration 844,843 928,678 883,201 45,477
Emergency response 8,052,505 8,581,078 8,439,787 141,291
Fire Apparatus Services 368,890 380,919 381,466 (547)
Hazard protection 835,914 981,937 898,373 83,564
Training 256,226 263,726 113,278 150,448
Technical services 49,250 49,250 50,861 (1,611)
Disaster preparedness 15,825 89,443 48,141 41,302
Total fire and environmental safety 10,423,453 11,275,031 10,815,107 459,924
Total public safety 24,588,256 26,488,643 25,576,604 912,039
Transportation:
Transportation planning and engineering 777,126 1,195,126 778,399 416,727
Street and sidewalk maintenance 1,302,163 1,487,648 1,271,383 216,265
Traffic signals and street lights 430,226 532,890 476,976 55,914
Creek and flood protection 195,154 934,991 790,419 144,572
Total transportation 2,704,669 4,150,655 3,317,177 833,478
See notes to required supplementary information.
92
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2016
Page 4
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
Culture and Recreation:
Recreation programs:
Recreation administration 693,741$ 736,685$ 666,857$ 69,828$
Aquatics/Sinsheimer park facilities 326,220 332,174 342,920 (10,746)
Children's services 917,429 922,116 916,236 5,880
Facilities 213,418 220,486 215,884 4,602
Special events 267,372 270,392 250,360 20,032
Recreational sports 328,440 331,568 313,433 18,135
Golf course 564,265 608,332 576,352 31,980
Ranger services 346,111 472,350 431,554 40,796
Maintenance programs:
Swim center maintenance 471,418 474,073 374,435 99,638
Parks and landscape maintenance 2,400,791 2,472,185 2,307,966 164,219
Tree maintenance 467,432 483,876 496,672 (12,796)
Cultural and social service programs:
Human relations 277,200 277,200 233,119 44,081
Cultural activities 302,435 302,435 302,410 25
Total leisure, cultural and social services 7,576,272 7,903,872 7,428,198 475,674
Community Development:
Planning:
Commissions and communities 40,005 40,005 41,608 (1,603)
Community development administration 636,396 659,699 593,049 66,650
Long-range planning 1,021,993 1,059,056 720,959 338,097
Development review 850,734 916,350 773,185 143,165
Development services 700,293 424,425 275,868
Natural resource protection 366,645 446,492 429,905 16,587
Construction regulation:
Building and safety 1,624,259 1,855,571 1,813,604 41,967
Engineering development review 720,612 730,783 622,339 108,444
Rental housing inspection 50,000 301,164 208,654 92,510
CIP project engineering 1,853,912 1,901,100 1,818,636 82,464
Economic health:
Community promotion 396,029 414,396 407,227 7,169
Economic development 234,364 260,656 216,527 44,129
Total community development 7,794,949 9,285,565 8,070,118 1,215,447
See notes to required supplementary information.
93
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2016
Page 5
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
General Government:
Legislation:
Council 155,290$ 156,469$ 154,921$ 1,548$
General administration:
City administration 676,911 721,811 770,619 (48,808)
Public works administration 925,964 984,702 970,065 14,637
Legal services:
City attorney 627,241 864,387 791,896 72,491
City clerk services:
Administration and records 631,366 667,935 550,828 117,107
Organization support services:
Human resource administration 620,223 866,644 790,879 75,765
Risk management 4,102,335 4,112,067 4,066,945 45,122
Finance and information technology administration 454,649 376,028 246,648 129,380
Revenue management 681,933 783,266 676,849 106,417
Accounting 662,405 770,440 674,883 95,557
Finance non departmental 2,018,704 926,940 926,940
Network services 2,430,928 2,577,855 2,461,933 115,922
Geographic information services 455,090 538,302 520,475 17,827
Support services 420,700 300,468 215,027 85,441
Wellness program 21,700 21,700 20,184 1,516
Building and vehicle maintenance:
Buildings 1,152,285 1,175,973 1,102,501 73,472
Vehicle and equipment maintenance 1,206,065 1,224,848 1,066,153 158,695
Total general government
before cost reimbursement 17,243,789 17,069,835 15,080,806 1,989,029
Cost reimbursement (Note 3 to RSI) (4,921,672) (4,008,992) (4,008,992) -
Total general government 12,322,117 13,060,843 11,071,814 1,989,029
Total Expenditures 54,986,263 60,889,578 55,463,911 5,425,667
Excess of Revenues Over Expenditures 8,200,728 4,380,465 12,620,527 (8,240,062)
See notes to required supplementary information.
94
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2016
Page 6
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
Other Financing Sources (Uses)
Transfers in 1,405,475 2,401,093 2,920,748 (519,655)
Transfers out (6,964,744) (9,762,204) (9,772,930) 10,726
Total other financing uses (5,559,269) (7,361,111) (6,852,182) (508,929)
Net Change in Fund Balance 2,641,459 (2,980,646) 5,768,345 (8,748,991)
Fund Balance, Beginning of the Year 24,566,807 24,566,807 24,566,807 -
Prior Year Restatements (709,620) (709,620)
Fund Balance, Beginning of the Year, as Restated 24,566,807 24,566,807 23,857,187 709,620
Fund Balance, End of Year 27,208,266$ 21,586,161$ 29,625,532$ (8,039,371)$
See notes to required supplementary information.
95
City of San Luis Obispo, California
Schedule of Funding Progress for
Other Post-Employment Benefits (OPEB)
For the Fiscal Year Ended June 30, 2016
The table below shows an analysis of the actuarial value of assets as a percentage of the actuarial accrued liability and the
unfunded actuarial accrued liability (UAAL) as a percentage of the annual covered payroll as of the three most recent
actuarial report for the period ending June 30, 2016.
Actuarial Actuarial Entry Age Unfunded UAAL as a
Valuation Value Actuarial Actuarial Accrued Funded Covered Percentage of
Date of Assets Accrued Liability Liability Ratio Payroll Covered Payroll
6/30/2015 3,975,000$ 12,636,000$ 8,661,000$ 31.5% 29,694,000$ 29.2%
6/30/2013 2,527,000$ 6,954,000$ 4,427,000$ 36.3% 27,163,000$ 16.3%
6/30/2011 1,611,000$ 6,063,000$ 4,452,000$ 26.6% 26,960,000$ 16.5%
See notes to required supplementary information.
96
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, 2016
Last 10 Years *
Fiscal Year 2015-16 2014-15
Measurement Period 2014-15 2013-14
Total pension liability:
Service Cost 3,578,172$ 3,703,087$
Interest on total pension liability 13,193,597 12,756,967
Difference between expected and actual experience (2,433,791)
Changes in assumptions (3,057,724)
Benefit payments, including refunds of employee contributions (8,808,668) (8,258,611)
Net change in total pension liability 2,471,586 8,201,443
Total pension liability - beginning 180,572,094 172,370,651
Total pension liability - ending (a)183,043,680$ 180,572,094$
Plan fiduciary net position:
Contributions - employer 5,027,356$ 4,631,254$
Contributions - employee 1,509,834 1,664,654
Net investment income 2,673,657 17,746,607
Benefit payments (8,808,668) (8,258,611)
Administrative expense (133,069)
Net change in plan fiduciary net position 269,110 15,783,904
Plan fiduciary net position - beginning 117,943,433 102,159,529
Plan fiduciary net position - ending (b)118,212,543$ 117,943,433$
Net pension liability (asset) - ending (a) - (b)64,831,137$ 62,628,661$
Plan fiduciary net position as a percentage of the total pension liability 64.58% 65.32%
Covered - employee payroll 19,769,997$ 19,235,818$
Net pension liability as percentage of covered-employee payroll 327.93% 325.58%
* Fiscal year 2015 was the 1st year of implementation. Information is required only for measurement periods for which
GASB 68 is applicable.
See notes to required supplementary information.
97
City of San Luis Obispo, California
Schedule of the Plan Contributions
Miscellaneous Agent Multiple-Employer Plan
June 30, 2016
Last 10 Years *
Fiscal Year 2015-16 2014-15 2013-14
Actuarially determined contribution 5,885,722$ 5,027,356$ 4,631,254$
Contributions in relation to the actuarially determined contributions (5,885,722) (5,027,356) (4,631,254)
Contribution deficiency (excess) -$ -$ -$
Covered-employee payroll 20,499,668 19,769,997 19,235,818
Contributions as a percentage of covered-employee payroll 28.71% 25.43% 24.08%
* Fiscal year 2015 was the 1st year of implementation. Information is required only for measurement periods for which
GASB 68 is applicable. Contributions paid as of June 30, 2016 are deferred to June 30, 2017.
See notes to required supplementary information.
98
City of San Luis Obispo, California
Schedule of the City’s Proportionate Share of the Net Pension Liability
Safety Cost-Sharing Plans
As of June 30, 2016
Last 10 Years *
Fiscal Year 2015-16 2014-15
Measurement Period 2014-15 2013-14
Employer's Proportion of the Collective Net Pension Liability 1.3654% 1.3754%
Employer's Proportionate Share of the Collective Net Pension Liability 56,260,280$ 51,592,420$
Employer's Covered-Employee Payroll 10,849,863$ 10,768,119$
Employer's Proportionate Share of the Net Pension Liability as a
Percentage of its Covered-Employee Payroll 518.53% 479.12%
Plan's Share of the Fiduciary Net Position as a
Percentage of the Employer's Total Pension Liability 77.27% 78.83%
* Fiscal year 2015 was the 1st year of implementation. Information is required only for measurement periods for which
GASB 68 is applicable.
See notes to required supplementary information.
99
City of San Luis Obispo, California
Schedule of the City’s Contributions
Safety Cost-Sharing Plans
As of June 30, 2016
Last 10 Years *
Fiscal Year 2015-16 2014-15 2013-14
Actuarially determined contribution 5,074,217$ 4,350,871$ 4,226,211$
Contributions in relation to the actuarially determined contributions (5,824,217) (4,650,871) (5,161,211)
Contribution deficiency (excess) (750,000)$ (300,000)$ (935,000)$
Covered-employee payroll 10,643,123 10,849,863 10,768,119
Contributions as a percentage of covered-employee payroll 54.72% 42.87% 47.93%
* Fiscal year 2015 was the 1st year of implementation. Information is required only for measurement periods for which
GASB 68 is applicable. Contributions paid as of June 30, 2016 are deferred to June 30, 2017.
See notes to required supplementary information.
100
City of San Luis Obispo, California
Notes to Required Supplementary Information
June 30, 2016
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, 2016 expenditures exceeded appropriations in the General Fund as noted below. This does not
represent a violation of City budget policies because no department’s total expenditures exceeded their total
appropriations within the General Fund.
Department/Division Budget Variance
Police protection:
Investigations 23,456
Fire and environmental safety:
Fire apparatus services 547
Technical services 1,611
Recreation programs:
Aquatics/Sinsheimer park facilities 10,746
Tree maintenance 12,796
Planning
Commissions and communities 1,603
General administration:
City administration 48,808
Other Post-Employment Benefits Plan Schedule of Funding Progress
1. The schedule shows an analysis of actuarial value of assets as a percentage of the actuarial accrued liability and
the unfunded actuarial accrued liability (UAAL) as a percentage of the annual covered payroll as of the most
recent actuarial report for the period ending June 30, 2013. The actuarial report for the period ending June 30,
2013 was used to determine the 2015-16 ARC.
2. This schedule of funding progress presents multiyear trend information about whether the actuarial value of Plan
assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.
101
City of San Luis Obispo, California
Notes to Required Supplementary Information
June 30, 2016
Page 2
Schedule of the Changes in the Net Pension Liability and Related Ratios – Miscellaneous Plan
1. Benefit changes. The figures shown do not include any liability impact that may have resulted from plan changes
which occurred after June 30, 2013. This applies for voluntary benefit changes as well as any offers of Two
years Additional Service Credit (a.k.a. Golden Handshakes).
2. Changes in assumptions. The discount rate was changed from 7.50% (net of administrative expense) to 7.65%.
Schedule of the Plan Contributions—Miscellaneous Plan
The actuarial methods and assumptions used to set the actuarially determined contributions for
Fiscal Year 2015-16 were from the June 30, 2013 public agency valuations.
Actuarial cost method Entry Age Normal
Amortization method For details, see June 30, 2013 Funding Valuation Report.
Remaining amortization period For details, see June 30, 2013 Funding Valuation Report.
Inflation 2.75%
Salary increases Varies by Entry Age and Service
Payroll growth 3.00%
Mortality The probabilities of mortality are based on the 2010 CalPERS Experience Study
for the period from 1997 to 2007. Pre-retirement and post-retirement mortality
rates include 5 years of projected mortality improvement using Scale AA
published by the Society of Actuaries.
Asset valuation method Actuarial Value of Assets. For details, see June 30, 2013 Funding Valuation
Investment rate of return 7.50% net of pension plan investment and administrative expenses; includes
inflation.
Retirement age The probabilities of retirement are based on the 2010 CalPERS experience study
for the period from 1997 to 2007.
Schedule of the City’s Proportionate Share of the Net Pension Liability – Cost Sharing
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.
102
City of San Luis Obispo, California
Notes to Required Supplementary Information
June 30, 2016
Page 3
Schedule of the City’s Contributions – Cost Sharing
1. Benefit changes. The figures shown do not include any liability impact that may have resulted from plan changes
which occurred after June 30, 2014 as they have minimal cost impact.
2. Changes in assumptions. The discount rate was changed from 7.50% (net of administrative expense) to 7.65%.
REQUIRED SUPPLEMENTARY INFORMATION
(UNAUDITED)
104
City of San Luis Obispo, California
Half Percent Sales Tax Measure Funding Schedule
For the Fiscal Year Ended June 30, 2016
The following summarizes revenues and expenditures for the current year in responding to Half Percent Sales Tax
Measure priorities.
Budget Actual
Revenues
Local Sales Tax Fund 7,397,054$ 7,178,159$
Local Sales Tax Fund 50,000 9,043
7,447,054 7,187,202
Expenditures
Operating Programs:
Community Development 247,185 235,375
Public Works 1,116,032 1,025,346
Parks 121,590 117,060
Police 764,741 704,243
Fire 5,000 1,600
2,254,548 2,083,624
Capital Programs: Budget Actual Encumbrances Carryover
Administration
Completed Projects 100,513 - *
Octagon Barn Facility 206,000 3,282 202,718
Laguna Lake Dredge/Mgt 450,000 283,632 92,943 73,425
Open Space Protection 250,000 250,000
1,006,513 286,914 92,943 526,143
Community Development 31,500 30,076 1,424
Pickups Engineering 31,500 30,076 - 1,424
Public Works
Street R & R Mainc account 60,000 30,000 30,000
Master street R 499,565 121 499,444
Street R & R Mainc account 70,000 70,000
Toro Street CK Bank Stalization 50,000 50,000 -
Master CMP replacement 231,438 130 231,308
Pickups Storm Replacement 28,500 25,548 2,952
Sidewalk Repair 100,000 17,579 82,421
Broad Street ST Bank Stalization 40,000 40,000 -
CMR replacement 2016 287,062 327 286,735
Microsurfacing 2015 937,252 937,252 -
Street marking Replacement 20,000 20,000
Storm Drain Albert Drive 30,000 18,061 11,939
Sidewalk Access Improvement 45,000 45,000
Traffic Report 25,000 21,804 3,196
Bicycle Facility Improvement 100,000 30,573 69,427
Traffic Operation Report Implementation 30,000 30,000
Bob Jones Octagon Barn 50,000 7,469 42,531
Bicycle Trans Plan Implementation 400,000 26,641 677 372,682
Safety Route to School 45,000 200 44,800
105
City of San Luis Obispo, California
Half Percent Sales Tax Measure Funding Schedule, continued
For the Fiscal Year Ended June 30, 2016
Page 2
Capital Programs: Budget Actual Encumbrances Carryover
Public Works - continued
Monterey/Osos Traffic Signal 225,000$ 3,236$ 221,764$
Southern/&Amp Parker Median 30,000 27,845 2,155
Tran Radar Trailer 15,000 14,520 480
Neighborhood Traffic M. 20,000 20,000 -
Parking Structure Assessment 8,333 8,333
3,347,150 1,271,306 677 2,075,167
Parks
Mission Plaza Railing 30,000 30,000
Ped & Bike Pathways Maint. 100,000 100,000
Parks Major Maintenance 50,000 8,330 41,670
Islay French S Improvement 36,000 33,160 2,840
Olympic Pool Replaster 190,351 190,351 -
Golf Course Restroom 365,000 326,724 38,276
Golf Course Restroom 35,000 27,983 7,017
Ranger Services Truck 139,000 111,201 27,799
Jack House Elevator 21,136 21,136 -
Open Space Maintenance 285,000 57,362 227,638
1,251,487 776,247 - 475,240
Public Safety
Thinkstream CAD 25,000 25,000
911 Phone System 245,000 27,598 - *
Police CAD Hardware 250,000 250,000
Police Vehicles 381,400 253,897 44,857 82,646
Fire Prevention Support 91,000 74,777 16,223
Fire Station 2 Dorm Remodel 160,000 1,770 158,230
Fire Epcr Records Support 53,800 27,305 26,250 245
Ambulance Pkg Support 180,000 180,000 -
Emergency Resp Support 50,000 47,570 2,430
Fire Command Vehicle 5,260 5,260
1,441,460 432,917 251,107 540,034
Capital Expenditure 7,078,110$ 2,797,460$ 344,727$ 3,618,008$
Net Change in Fund Balance (1,885,604) 2,306,118
Fund balance, beginning of year 2,426,279 2,426,279
Fund balance, end of year 540,675$ 4,732,397$
* Due to the nature of these projects, no carryover into the following fiscal year.
106
City of San Luis Obispo, California
Half Percent Sales Tax Measure Funding Schedule
For the Fiscal Year Ended June 30, 2016
The following summarizes revenues and expenditures for the year ended June 30, 2016 in responding to Half Percent
Sales Tax Measure* priorities.
Revenues:
Sales and use tax - Measure G 1/2 cent add-on tax 7,178,159$
Use of money and property 9,043
Total revenues 7,187,202
Expenditures:
Current:
Public safety 705,843
Transportation 1,025,346
Culture and recreation 117,060
Community development 235,375
Capital outlay
Public safety 432,917
Transportation 1,271,306
Culture and recreation 776,247
Community development 30,076
General government 286,914
Total expenditures 4,881,084
Excess (deficiency) of revenues over
(under) expenditures 2,306,118
Net change in fund balance 2,306,118
Fund balance, beginning of year 2,426,279
Fund balance, end of year 4,732,397$
* The Half Percent Sales Tax Measure is a sub-fund of the General Fund. All activity is reflected in the General Fund
and is reported here for informational purposes only.
107
City of San Luis Obispo, California
Major Governmental Funds
For the Fiscal Year Ended June 30, 2016
The City maintains the following major governmental funds:
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 from the General Fund, and from State and Federal grants. While budgets are prepared for the
City’s capital outlay fund, the capital projects generally span more than one year and are effectively controlled at the
project level; accordingly, budgetary comparisons are not presented.
108
City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2016
The City maintains the following nonmajor governmental funds:
Special Revenue Funds
The City has established the following eight 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.
109
City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2016
Page 2
Insurance Fund. This fund was established to accumulate resources needed to pay for certain insurance and employee
benefit program costs. Financing is primarily provided through operating transfers from the General Fund.
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 2005 Refunding Revenue Bonds. These bonds were issued to refinance the 1996 Lease
Revenue Bonds. The original 1996 bonds were issued 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.
The Board has entered into a lease agreement with the City under which the City is responsible for making lease payments
to fund the annual debt service requirements.
Capital Improvement Board 2006 Lease Revenue Bonds. The bonds were issued to finance the purchase of a parking
structure and office building at 919 Palm Street. Debt service related to the parking structure is recorded directly in the
Parking Fund while debt service related to the City office building is recorded in the Debt Service Fund.
The Board has entered into a lease agreement with the City under which the City is responsible for making lease payments
to fund the annual debt service requirements.
Capital Improvement Board 2009 Lease Revenue Bonds. The bonds were issued to finance the construction of the
Public Safety Communications and Emergency Operations Center project. Debt service obligations on the bonds are
recorded in the Water, Sewer and Parking and Debt Service Funds based on a proportionate share of the project benefits.
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.
2010 Fire Engine/Truck Lease-Purchase Financing. Lease-purchase financing was obtained in order to purchase a fire
apparatus with 100-foot ladder. Debt service obligations are recorded in the Debt Service Fund.
Capital Improvement Board 2012 Refunding Lease Revenue Bonds. On May 24, 2012 the Board issued $5,050,000 of
2012 Lease Revenue Refunding Bonds. These bonds were issued to refinance the outstanding 2001 Lease Revenue
Bonds, Series C, which will be redeemed on December 1, 2029. The 2001 bonds were used to purchase property and
build athletic fields; purchase property for police station expansion; purchase Downtown Plan properties.
110
City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2016
Page 3
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.
2013 Fire Engine/Truck Lease-Purchase Financing. Lease-purchase financing was obtained in order to purchase an
engine. Debt service obligations are recorded in the Debt Service Fund.
Capital Improvement Board 2014 Lease Revenue Bonds. In 2014 the Board issued $7,580,000 of 2014 Lease Revenue
Bonds. These bonds were issued to finance the expansion of the Los Osos Valley Road interchange at U.S. 101. Debt
service related to the interchange is recorded in the Debt Service Fund.
The Board has entered into a lease agreement with the City under which the City is responsible for making lease payments
to fund the annual debt service requirements.
2016 Mobile Data Computers Lease. Lease-purchase financing was obtained in order to purchase mobile data computers,
hardware to install the computers in City vehicles, installation costs, and wireless network components. Debt service
obligations are recorded in the Debt Service Fund.
Capital Projects Funds
The following nine 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). The City also has two other capital projects funds that are considered major governmental 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. This fund was established to account for construction projects related to park acquisition
and development that will be financed primarily with park in-lieu fees.
Open Space Protection Fund. This fund was established to account for projects funded as part of the City’s open space
protection program to enhance open space and agricultural conservation on lands within and surrounding the City,
improve passive recreational and nature study opportunities, and restore and enhance wildlife habitat. Projects in this
fund will be financed with General Fund contributions, outside contributions, and State and Federal grants.
Airport Area Impact Fee Fund. This fund was established to account for interim annexation fees collected for the specific
plan and related infrastructure master plans for annexing the airport area to the City.
Los Osos Valley Road (LOVR) Sub-Area Fee Fund. This fund was established to account for sub-area impact fees
collected from development activity in the Los Osos Valley Road sub-area boundary.
111
City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2016
Page 4
Waste Water Impact Fee Fund. This fund was established to account for the collection of development impact fees
collected from the Tank Farm Road, Irish Hills, and Silver City sub-areas.
Fleet Replacement Fund. This fund was established to account for the financing and replacement of vehicles for all
General Fund programs of the City. Financing is primarily provided through operating transfers from the General Fund
as well as from interest earnings and sales of surplus property.
Information Technology Replacement Fund. This fund was established in FY 12-13 to account for the financing and
replacement of information technology for all General Fund programs of the City. Financing is primarily provided
through operating transfers from the General Fund as well as from interest earnings.
Affordable Housing Program. This fund accumulates revenues from inclusionary housing fees for capital projects related
to affordable housing programs and projects.
Transportation Impact Fee Fund. This fund was established to account for construction projects that will be financed
primarily with transportation impact fees.
Infrastructure Fund. This fund was established to provide financing to infrastructure projects that have a wide
community benefit. Financing is primarily provided through operating transfers from the General Fund.
112
City of San Luis Obispo, California
Combining Balance Sheet
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2016
Downtown
BID
Transportation
Development
Act (TDA) Tourism BID Gas Tax
Assets
Cash and cash equivalents 1,122$ $ 2,250$ $
Investments 223,045
Accounts receivable 166,030
Due from other governments
Accrued interest receivable 437
Prepaid expense
Cash held by fiscal agent
Total assets 1,122$ -$ 391,762$ -$
Liabilities and Fund Balance
Liabilities:
Accounts payable $ $ 48,010$ $
Accrued liabilities 3,477
Due to other funds
Total liabilities - - 51,487 -
Fund balance:
Restricted for:
Debt service
Law enforcement grant programs
Committed to:
Affordable housing programs
Impact fee programs
Open space programs
Parkland development programs
Assigned to:
Contingency fund
Subsequent years expenditures 1,122 340,275
Total fund balance 1,122 - 340,275 -
Total liabilities and fund balance 1,122$ -$ 391,762$ -$
Special Revenue Funds
113
Community
Development
Block Grant
(CDBG)
Law
Enforcement
Grants
Public Art
Contributions Insurance Debt Service
$ $ 4,243$ 339,247$ $
420,692
49,813 33,713
964 605
116,702
2,738,895
49,813$ 33,713$ 425,899$ 339,852$ 2,855,597$
11,749$ $ 2,090$ $ 246,817$
3,228
18,511 10,221 489,056
33,488 10,221 2,090 - 735,873
2,119,724
23,492
423,809
16,325 339,852
16,325 23,492 423,809 339,852 2,119,724
49,813$ 33,713$ 425,899$ 339,852$ 2,855,597$
Special Revenue Funds
114
City of San Luis Obispo, California
Combining Balance Sheet
Nonmajor Governmental Funds, continued
For the Fiscal Year Ended June 30, 2016
Page 2
Assets
Cash and cash equivalents
Investments
Accounts receivable
Due from other governments
Accrued interest receivable
Prepaid expense
Cash held by fiscal agent
Total assets
Liabilities and Fund Balance
Liabilities:
Accounts payable
Accrued liabilities
Due to other funds
Total liabilities
Fund balance:
Restricted for:
Debt service
Law enforcement grant programs
Committed to:
Affordable housing programs
Impact fee programs
Open space programs
Parkland development programs
Assigned to:
Contingency fund
Subsequent years expenditures
Total fund balance
Total liabilities and fund balance
Parkland
Development
Open Space
Protection
Airport Area
Impact Fee
LOVR Sub-
Area Fee
8,386$ 5,526$ 12,220$ 3,426$
831,458 547,897 1,211,665 339,613
1,967 1,325 2,744 837
841,811$ 554,748$ 1,226,629$ 343,876$
$ 5,399$ 146,673$ 179,907$
- 5,399 146,673 179,907
1,079,956 163,969
549,349
841,811
841,811 549,349 1,079,956 163,969
841,811$ 554,748$ 1,226,629$ 343,876$
Capital Projects Funds
115
Waste Water
Impact Fee
Fleet
Replacement
Info Tech
Replacement
Affordable
Housing
Transportatio
n Impact Fee Infrastructure
Total
Nonmajor
Governmental
Funds
$ 18,027$ 7,381$ 25,528$ 62,593$ 311,108$ 801,057$
1,787,328 731,832 2,531,111 6,206,054 14,830,695
166,030
83,526
4,343 1,694 6,186 16,380 657 38,139
116,702
2,738,895
-$ 1,809,698$ 740,907$ 2,562,825$ 6,285,027$ 311,765$ 18,775,044$
$ 93$ $ 65,347$ $ 706,085$
6,705
517,788
- 93 - - 65,347 - 1,230,578
2,119,724
23,492
2,562,825 2,562,825
6,219,680 7,463,605
549,349
1,265,620
500,000 400,000 900,000
1,309,605 340,907 311,765 2,659,851
- 1,809,605 740,907 2,562,825 6,219,680 311,765 17,544,466
-$ 1,809,698$ 740,907$ 2,562,825$ 6,285,027$ 311,765$ 18,775,044$
Capital Projects Funds
116
City of San Luis Obispo, California
Combining Statement of Revenues, Expenditures and Changes in Fund Balance
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2016
Downtown
BID
Transportation
Development
Act (TDA) Tourism BID Gas Tax
Revenues:
Use of money and property $ $ 1,723$ $
Subventions and grants 40,531 1,033,757
Charges for services 222,111 1,429,190
Other revenues
Total revenues 222,111 40,531 1,430,913 1,033,757
Expenditures:
Current:
Community development 222,111 1,395,254
General Government
Public safety
Debt service:
Principal
Interest
Capital:
General Government
Public safety
Transportation
Leisure, cultural and social services
Community development
Total expenditures 222,111 - 1,395,254 -
Excess (deficiency) of revenues over
(under) expenditures - 40,531 35,659 1,033,757
Other financing sources (uses):
Issuance of debt
Transfers in
Transfers out (40,531) (28,412) (1,033,757)
Total other financing
sources (uses) - (40,531) (28,412) (1,033,757)
Net change in fund balance - - 7,247 -
Fund balance (deficit), beginning of year 1,122 333,028 -
Fund balance, end of year 1,122$ -$ 340,275$ -$
Special Revenue Funds
117
Community
Development
Block Grant
(CDBG)
Law
Enforcement
Grants
Public Art
Contributions Insurance Debt Service
$ 12$ 2,892$ 988$ 54,725$
304,004 206,831
1,782 79,994
304,004 208,625 82,886 988 54,725
273,270
1,378,437 53,557
141,850 750,000
1,706,073
1,341,751
60,169
161,813
58,321
435,083 202,019 58,321 2,128,437 3,101,381
(131,079) 6,606 24,565 (2,127,449) (3,046,656)
147,487 36,400 2,124,000 3,025,400
147,487 - 36,400 2,124,000 3,025,400
16,408 6,606 60,965 (3,449) (21,256)
(83) 16,886 362,844 343,301 2,140,980
16,325$ 23,492$ 423,809$ 339,852$ 2,119,724$
Special Revenue Funds
118
City of San Luis Obispo, California
Combining Statement of Revenues, Expenditures and Changes in Fund Balance
Nonmajor Governmental Funds, continued
For the Fiscal Year Ended June 30, 2016
Page 2
Revenues:
Use of money and property
Subventions and grants
Charges for services
Other revenues
Total revenues
Expenditures:
Current:
Community development
General Government
Public safety
Debt service:
Principal
Interest
Capital:
General Government
Public safety
Transportation
Leisure, cultural and social services
Community development
Total expenditures
Excess (deficiency) of revenues over
(under) expenditures
Other financing sources (uses):
Issuance of debt
Transfers in
Transfers out
Total other financing
sources (uses)
Net change in fund balance
Fund balance (deficit), beginning of year
Fund balance, end of year
Parkland
Development
Open Space
Protection
Airport Area
Impact Fee
LOVR Sub-
Area Fee
5,756$ 4,100$ 8,248$ 2,585$
217,069 47,369 134,210 14,661
222,825 51,469 142,458 17,246
1,572
32,743
1,572 32,743 - -
221,253 18,726 142,458 17,246
- - - -
221,253 18,726 142,458 17,246
620,558 530,623 937,498 146,723
841,811$ 549,349$ 1,079,956$ 163,969$
Capital Projects Funds
119
Waste Water
Impact
Fleet
Replacement
Info Tech
Replacement
Affordable
Housing
Transportation
Impact Fee Infrastructure
Total Nonmajor
Governmental
Funds
658$ 13,625$ 2,766$ 34,414$ 107,807$ 1,660$ 241,959$
73,861 1,658,984
172,438 625,507 1,356,158 4,300,489
69,220 69,220
173,096 82,845 76,627 659,921 1,463,965 1,660 6,270,652
173,096 636,978 2,700,709
1,431,994
891,850
1,706,073
1,341,751
25,260 25,260
234,905 481,374 776,448
382,976 3,803,935 4,348,724
42,010 101,903
1,236 33,979
173,096 686,387 481,374 636,978 3,803,935 - 13,358,691
- (603,542) (404,747) 22,943 (2,339,970) 1,660 (7,088,039)
688,500 688,500
384,100 617,000 250,000 6,584,387
(62,000) (320,000) (1,484,700)
- 384,100 1,305,500 (62,000) (320,000) 250,000 5,788,187
- (219,442) 900,753 (39,057) (2,659,970) 251,660 (1,299,852)
2,029,047 (159,846) 2,601,882 8,879,650 60,105 18,844,318
-$ 1,809,605$ 740,907$ 2,562,825$ 6,219,680$ 311,765$ 17,544,466$
Capital Projects Funds
120
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual
Downtown Business Improvement District Fund
For the Fiscal Year Ended June 30, 2016
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Charges for services
Assessments 214,000$ 214,000$ 222,111$ 8,111$
Total Revenues 214,000 214,000 222,111 8,111
Expenditures:
Current
Community development 214,000 214,000 222,111 8,111
Total Expenditures 214,000 214,000 222,111 8,111
Excess of Revenues Over Expenditures - - - -
Net Change in Fund Balance - - - -
Fund Balance, Beginning of Year 1,122 1,122 1,122 -
Fund Balance, End of Year 1,122$ 1,122$ 1,122$ -$
Budget
121
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual
Transportation Development Act (TDA)
For the Fiscal Year Ended June 30, 2016
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Subventions and grants 41,100$ 41,100$ 40,531$ (569)$
Total Revenues 41,100 41,100 40,531 (569)
Excess of Revenues Over Expenditures 41,100 41,100 40,531 (569)
Other Financing Uses:
Operating transfers out (41,100) (40,531) 569
Net Change in Fund Balance 41,100 - - -
Fund Balance, Beginning of Year
Fund Balance, End of Year 41,100$ -$ -$ -$
Budget
122
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual
Tourism Business Improvement District Fund
For the Fiscal Year Ended June 30, 2016
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property 1,100$ 1,100$ 1,723$ 623$
Assessments 1,368,775 1,368,775 1,429,190 60,415
Total Revenues 1,369,875 1,369,875 1,430,913 61,038
Expenditures:
Current
Community development 1,342,498 1,549,274 1,395,254 (154,020)
Total Expenditures 1,342,498 1,549,274 1,395,254 (154,020)
Excess of Revenues Over (Under) Expenditures 27,377 (179,399) 35,659 215,058
Other Financing Uses:
Operating transfers out (27,375) (28,412) (1,037)
Net Change in Fund Balance 27,377 (206,774) 7,247 214,021
Fund Balance, Beginning of Year 333,028 333,028 333,028 -
Fund Balance, End of Year 360,405$ 126,254$ 340,275$ 214,021$
Budget
123
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual
Gas Tax Fund
For the Fiscal Year Ended June 30, 2016
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Subventions and grants 965,000$ 965,000$ 1,033,757$ 68,757$
Total Revenues 965,000 965,000 1,033,757 68,757
Excess of Revenues Over Expenditures 965,000 965,000 1,033,757 68,757
Other Financing Uses:
Operating transfers out (965,000) (1,033,757) (68,757)
Net Change in Fund Balance 965,000 - - -
Fund Balance, Beginning of Year
Fund Balance, End of Year 965,000$ -$ -$ -$
Budget
124
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual
Community Development Block Grant (CDBG) Fund
For the Fiscal Year Ended June 30, 2016
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Subventions and grants 405,515$ 405,515$ 304,004$ (101,511)$
Total Revenues 405,515 405,515 304,004 (101,511)
Expenditures:
Current
Community development 382,737 683,941 273,270 (410,671)
Transportation 161,813 161,813 161,813 -
Total Expenditures 544,550 845,754 435,083 (410,671)
Excess of Revenues Over (Under) Expenditures (139,035) (440,239) (131,079) 309,160
Other Financing Uses:
Operating transfers in 147,487 147,847 147,487 (360)
Net Change in Fund Balance 8,452 (292,392) 16,408 308,800
Fund Balance, Beginning of Year (83) (83) (83) -
Fund Balance, End of Year 8,369$ (292,475)$ 16,325$ 308,800$
Budget
125
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual
Law Enforcement Grants Fund
For the Fiscal Year Ended June 30, 2016
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property $ $ 12$ 12$
Subventions and grants 251,808 312,893 206,831 (106,062)
Charges for services 2,000 1,782 (218)
Total Revenues 251,808 314,893 208,625 (106,268)
Expenditures:
Public Safety 191,639 253,332 141,850 (111,482)
Capital Projects 60,169 60,169 60,169 -
Total Expenditures 251,808 313,501 202,019 (111,482)
Excess of Revenues Over (Under) Expenditures - 1,392 6,606 5,214
Net Change in Fund Balance - 1,392 6,606 5,214
Fund Balance, Beginning of Year 16,886 16,886 16,886 -
Fund Balance, End of Year 16,886$ 18,278$ 23,492$ 5,214$
Budget
126
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual
Public Art Contributions Fund
For the Fiscal Year Ended June 30, 2016
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property 2,100$ 2,100$ 2,892$ 792$
Charges for services 79,994 79,994
Other revenues 40,000 40,000 (40,000)
Total Revenues 42,100 42,100 82,886 40,786
Expenditures:
Capital Projects 36,400 354,420 58,321 (296,099)
Total Expenditures 36,400 354,420 58,321 (296,099)
Excess of Revenues Over (Under) Expenditures 5,700 (312,320) 24,565 336,885
Other Financing Uses:
Operating transfers in 36,400 36,400 36,400 -
Net Change in Fund Balance 42,100 (275,920) 60,965 336,885
Fund Balance, Beginning of Year 362,844 362,844 362,844 -
Fund Balance, End of Year 404,944$ 86,924$ 423,809$ 336,885$
Budget
127
City of San Luis Obispo, California
Agency Funds
For the Fiscal Year Ended June 30, 2016
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.
Narcotics Task Force Fund. This fund was established to account for the financial activities of the County task force.
Bomb Task Force Fund. This fund was established to account for the financial activities of the County task force.
Hazardous Materials Task Force Fund. This fund was established to account for the financial activities of the County
task force.
General Agency Fund. This fund was established to account for a broad category of funds, including donations, provided
to the City to be utilized for specific purposes.
Duvall Fund. This fund was established to account for a bequest by Mary Jane Duvall to assist in civic and beautification
projects in the Mission Plaza area and extensions.
Boysen Ranch Conservation Easement Fund. This fund was established to account for contributions toward obtaining
a conservation easement on the Boysen Ranch property.
Cable Television Public, Educational and Government Funds (PEG) for the City of San Luis Obispo, San Luis Coastal
Unified School District (SLCUSD) and San Luis Obispo County Public Access, Inc. Public Access Television (PAT).
These funds account for collections by Charter Communications from its customers for PEG access equipment and
facilities. The City of San Luis Obispo, SLCUSD and PAT annually receive equal shares of collections, restricted for
approved uses as stipulated in the cable franchise agreement.
128
City of San Luis Obispo, California
Combining Statement of Changes in Assets and Liabilities
Agency Funds
For the Fiscal Year Ended June 30, 2016
Balance Balance
June 30, 2015 Additions Deductions June 30, 2016
Whale Rock Fund
Assets
Cash and cash equivalents 300,081$ 1,846,419$ 2,131,924$ 14,576$
Investments 885,366 559,835 1,445,201
Accounts receivable 26,572 564,597 548,777 42,392
Accrued interest receivable 2,213 3,590 2,213 3,590
Prepaid expense 27,843 27,843 -
Deferred outflows of resources 83,956 78,555 162,511
Capital assets, net of
accumulated depreciation 809,417 174,412 983,829
Total Assets 2,135,448$ 3,227,408$ 2,710,757$ 2,652,099$
Liabilities
Accounts payable 42,743$ 656,021$ 623,693$ 75,071
Accrued salaries 25,234 6,972 32,206
Due to other funds 13,981 13,981 -
Other liabilities 38,049 1,591 8,664 30,976
Net pension liability 1,045,899 36,782 1,082,681
Deferred inflows of resources 135,920 294,475 267,316 163,079
Due to agency participants 833,622 434,464 1,268,086
Total Liabilities 2,135,448$ 1,430,305$ 913,654$ 2,652,099$
Balance Balance
June 30, 2015 Additions Deductions June 30, 2016
Jack House Fund
Assets
Cash and cash equivalents 13,108$ 2,557$ 1,450$ 14,215$
Accounts receivable 98 98
Accrued interest receivable 22 33 22 33
Total Assets 13,130$ 2,688$ 1,472$ 14,346$
Liabilities
Accounts payable 21$ 7$ 21$ 7$
Other liabilities 13,109 1,230 14,339
Total Liabilities 13,130$ 1,237$ 21$ 14,346$
129
City of San Luis Obispo, California
Combining Statement of Changes in Assets and Liabilities
Agency Funds, continued
For the Fiscal Year Ended June 30, 2016
Page 2
Balance Balance
June 30, 2015 Additions Deductions June 30, 2016
Narcotics Task Force Fund
Assets
Cash and cash equivalents 23,483$ $ 23,436$ 47$
Accrued interest receivable 51 51 -
Total Assets 23,534$ -$ 23,487$ 47$
Liabilities
Due to agency participants 23,534$ $ 23,487$ 47$
Total Liabilities 23,534$ -$ 23,487$ 47$
Balance Balance
June 30, 2015 Additions Deductions June 30, 2016
Bomb Task Force Fund
Assets
Cash and cash equivalents 238,031$ 38,085$ 7,593$ 268,523$
Accrued interest receivable 418 656 418 656
Total Assets 238,449$ 38,741$ 8,011$ 269,179$
Liabilities
Accounts payable 264$ 7,625$ 7,302$ 587$
Due to agency participants 238,185 30,407 268,592
Total Liabilities 238,449$ 38,032$ 7,302$ 269,179$
Balance Balance
June 30, 2015 Additions Deductions June 30, 2016
Hazardous Materials Task Force Fund
Assets
Cash and cash equivalents 66,562$ 79,611$ 57,025$ 89,148$
Accrued interest receivable 222 222
Total Assets 66,562$ 79,833$ 57,025$ 89,370$
Liabilities
Accounts payable 4,030$ 41,651$ 35,780$ 9,901$
Accrued salaries 625 625
Due to agency participants 62,532 16,312 78,844
Total Liabilities 66,562$ 58,588$ 35,780$ 89,370$
130
City of San Luis Obispo, California
Combining Statement of Changes in Assets and Liabilities
Agency Funds, continued
For the Fiscal Year Ended June 30, 2016
Page 3
Balance Balance
June 30, 2015 Additions Deductions June 30, 2016
General Agency Fund
Assets
Cash and cash equivalents 922,120$ 1,433,186$ 1,004,751$ 1,350,555$
Accounts receivable 520 520
Other assets 30,864 30,864
Total Assets 952,984$ 1,433,706$ 1,004,751$ 1,381,939$
Liabilities
Accounts payable 46,729$ 978,525$ 976,419$ 48,835$
Other liabilities 906,255 426,849 1,333,104
Total Liabilities 952,984$ 1,405,374$ 976,419$ 1,381,939$
Balance Balance
June 30, 2015 Additions Deductions June 30, 2016
Duvall Fund
Assets
Cash and cash equivalents 156,914$ 1,253$ 172$ 157,995$
Accrued interest receivable 275 386 275 386
Total Assets 157,189$ 1,639$ 447$ 158,381$
Liabilities
Other liabilities 157,189$ 1,192$ $ 158,381$
Total Liabilities 157,189$ 1,192$ -$ 158,381$
Balance Balance
June 30, 2015 Additions Deductions June 30, 2016
Boysen Ranch Conservation Easement
Assets
Cash and cash equivalents 392,571$ 3,133$ 429$ 395,275$
Accrued interest receivable 688 965 688 965
Total Assets 393,259$ 4,098$ 1,117$ 396,240$
Liabilities
Accounts payable 24,567$ $ $ 24,567$
Other liabilities 368,692 2,981 371,673
Total Liabilities 393,259$ 2,981$ -$ 396,240
131
City of San Luis Obispo, California
Combining Statement of Changes in Assets and Liabilities
Agency Funds, continued
For the Fiscal Year Ended June 30, 2016
Page 4
Balance Balance
June 30, 2015 Additions Deductions June 30, 2016
PEG - City of San Luis Obispo
Assets
Cash and cash equivalents 172,567$ 40,699$ 76,848$ 136,418$
Accounts receivable 9,911 9,911
Accrued interest receivable 305 325 305 325
Total Assets 172,872$ 50,935$ 77,153$ 146,654$
Liabilities
Other liabilities 172,872$ $ 26,218$ 146,654$
Total Liabilities 172,872$ -$ 26,218$ 146,654$
Balance Balance
June 30, 2015 Additions Deductions June 30, 2016
PEG - SLCUSD
Assets
Cash and cash equivalents 231,237$ 41,143$ 44,497$ 227,883$
Accounts receivable 9,910 9,910
Accrued interest receivable 410 548 410 548
Total Assets 231,647$ 51,601$ 44,907$ 238,341$
Liabilities
Accounts payable 44,241$ $ 44,241$ $
Other liabilities 187,406 50,935 238,341
Total Liabilities 231,647$ 50,935$ 44,241$ 238,341$
132
City of San Luis Obispo, California
Combining Statement of Changes in Assets and Liabilities
Agency Funds, continued
For the Fiscal Year Ended June 30, 2016
Page 5
Balance Balance
June 30, 2015 Additions Deductions June 30, 2016
Totals - All Agency Funds
Assets
Cash and cash equivalents 2,516,674$ 3,486,086$ 3,348,125$ 2,654,635$
Investments 885,366 559,835 1,445,201
Accounts receivable 26,572 585,036 548,777 62,831
Accrued interest receivable 4,382 6,725 4,382 6,725
Other assets 58,707 27,843 30,864
Deferred outflows of resources 83,956 78,555 162,511
Capital assets, net of
accumulated depreciation 809,417 174,412 983,829
Total Assets 4,385,074$ 4,890,649$ 3,929,127$ 5,346,596$
Liabilities
Accounts payable 162,595$ 1,683,829$ 1,687,456$ 158,968$
Accrued salaries 25,234 7,597 32,831
Due to other funds 13,981 13,981 -
Other liabilities 1,843,572 484,778 34,882 2,293,468
Net pension liability 1,045,899 36,782 1,082,681
Deferred inflows of resources 101,940 294,475 267,316 163,079
Due to agency participants 1,191,853 481,183 23,487 1,615,569
Total Liabilities 4,385,074$ 2,988,644$ 2,027,122$ 5,346,596$
STATISTICAL SECTION (UNAUDITED)
City of San Luis Obispo, California
Statistical Section Overview
June 30, 2016
This part of the City of San Luis Obispo’s comprehensive annual financial report presents detailed information as a context
for understanding what the information in the financial statements, note disclosures, and required supplementary
information says about the government’s overall financial health.
Contents
Financial Trends – Schedules 1-6. These schedules contain trend information to help the reader understand how the
City’s financial performance and well-being have changed over time.
Revenue Capacity – Schedules 7-13. These schedules contain information to help the reader assess the government’s
most significant local revenue sources, sales and property taxes.
Debt Capacity – Schedules 14-19. These schedules present information to help the reader assess the affordability of the
City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future.
Demographic and Economic Information – Schedules 20-22. These schedules offer demographic and economic
indicators to help the reader understand the environment within which the government’s financial activities take place.
Operating Information – Schedules 23-26. These schedules contain service and infrastructure data to help the reader
understand how the information in the City’s financial report relates to the services the government provides and the
activities it performs.
134
Schedule 1
City of San Luis Obispo, California
Net Positions by Component
Last Ten Fiscal Years
(Accrual Basis of Accounting)
For the Fiscal Year Ended June 30
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Governmental activities:
Net investment in capital assets 115,149,100$ 121,247,100$ 119,425,100$ 129,416,800$ 133,145,800$ 141,686,600$ 142,239,500$ 145,266,043$ 150,430,226$ 163,449,992$
Restricted 3,452,100 1,822,300 2,510,500 2,569,800 2,543,800 2,620,700 2,374,800 4,825,662 2,350,838 2,762,387
Unrestricted 28,786,300 30,935,700 38,928,500 26,204,500 26,401,500 23,583,000 29,927,200 (66,610,104) (57,421,778) (49,281,893)
Total governmental activities net position 147,387,500$ 154,005,100$ 160,864,100$ 158,191,100$ 162,091,100$ 167,890,300$ 174,541,500$ 83,481,601$ 95,359,286$ 116,930,486$
Business-type activities:
Net investment in capital assets 95,526,800$ 102,540,500$ 109,675,900$ 112,395,800$ 117,314,700$ 119,957,600$ 123,510,200$ 119,116,303$ 125,801,845$ 128,390,611$
Restricted 8,009,800 2,506,200 3,918,600 2,763,700 2,777,100 2,293,900 2,254,200 2,248,979 2,261,213 2,278,392
Unrestricted 27,327,200 31,873,200 31,329,500 38,245,900 36,493,600 37,759,000 41,712,200 35,224,987 42,117,143 49,495,220
Total business-type activities net position 130,863,800$ 136,919,900$ 144,924,000$ 153,405,400$ 156,585,400$ 160,010,500$ 167,476,600$ 156,590,269$ 170,180,201$ 180,164,223$
Primary government (City wide totals):
Net investment in capital assets 210,675,900$ 223,787,600$ 229,101,000$ 241,812,600$ 250,460,500$ 261,644,200$ 265,749,700$ 264,382,346$ 276,232,071$ 291,840,603$
Restricted 11,461,900 4,328,500 6,429,100 5,333,500 5,320,900 4,914,600 4,629,000 7,074,641 4,612,051 5,040,779
Unrestricted 56,113,500 62,808,900 70,258,000 64,450,400 62,895,100 61,342,000 71,639,400 (31,385,117) (15,304,635) 213,327
Total primary government net position 278,251,300$ 290,925,000$ 305,788,100$ 311,596,500$ 318,676,500$ 327,900,800$ 342,018,100$ 240,071,870$ 265,539,487$ 297,094,709$
135
Schedule 2
City of San Luis Obispo, California
Changes in Net Position
Last Ten Fiscal Years
(Accrual Basis of Accounting)
For The Fiscal Year Ended June 30
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Expenses:
Governmental activities:
Public safety 23,083,200$ 28,189,900$ 29,330,300$ 27,687,200$ 26,774,800$ 27,993,900$ 28,859,200$ 29,651,702$ 26,881,732$ 29,434,446$
Transportation 6,276,600 6,463,200 6,619,300 7,116,400 8,809,400 7,778,000 8,551,500 8,975,047 11,457,311 8,837,653
Leisure, cultural and social services 7,688,000 9,518,400 9,778,900 9,445,600 9,299,200 9,500,300 10,078,700 10,239,853 10,332,740 9,846,670
Community development 6,953,500 7,822,300 8,233,600 11,020,400 8,166,300 8,782,200 8,866,900 10,183,782 10,960,778 12,950,900
Interest on long-term debt 1,021,100 950,600 951,500 1,348,100 1,248,400 1,198,000 1,217,200 1,221,205 1,015,011 1,351,468
Total governmental activities expenses 45,022,400 52,944,400 54,913,600 56,617,700 54,298,100 55,252,400 57,573,500 60,271,589 60,647,572 62,421,137
Business-type activities:
Water 11,208,800 10,656,200 11,532,900 11,323,200 16,106,300 17,455,200 17,019,000 17,575,961 17,128,041 18,136,120
Sewer 7,885,100 8,511,300 9,250,200 9,153,200 9,633,900 9,530,400 10,189,400 10,647,255 10,132,214 10,842,451
Parking 3,444,000 3,416,400 3,704,700 3,494,300 3,501,500 3,598,000 3,678,600 3,636,607 3,556,637 3,900,052
Transit 2,894,700 3,060,100 3,199,200 3,295,500 3,409,700 3,778,900 3,903,900 4,059,138 3,994,194 4,088,423
Golf 609,200 633,600 722,100 708,400 724,100
Total business-type activities expenses 26,041,800 26,277,600 28,409,100 27,974,600 33,375,500 34,362,500 34,790,900 35,918,961 34,811,086 36,967,046
Total primary government expenses 71,064,200$ 79,222,000$ 83,322,700$ 84,592,300$ 87,673,600$ 89,614,900$ 92,364,400$ 96,190,550$ 95,458,658$ 99,388,183$
Program Revenues:
Governmental activities:
Charges for services:
Public safety 1,515,100$ 1,441,200$ 1,508,600$ 1,501,500$ 1,745,200$ 1,750,700$ 1,599,000$ 1,589,278$ 1,697,748$ 1,673,800$
Transportation 697,700 1,150,000 1,492,800 241,700 2,690,200 418,000 221,200 1,321,323 1,270,787 1,691,757
Leisure, cultural and social services 1,257,600 2,190,500 1,470,000 1,304,700 1,421,600 1,834,200 1,926,800 3,048,274 2,155,411 2,048,780
Community development 5,067,400 3,981,400 3,107,400 2,917,700 3,166,200 4,563,200 4,126,400 4,981,211 7,210,132 7,974,880
Operating grants and contributions*3,083,100 2,835,700 3,671,200 2,052,000 1,885,100 2,152,700 2,814,700 2,412,469 2,509,323 2,667,058
Capital grants and contributions 1,657,200 1,985,500 5,320,500 2,946,800 3,066,300 2,021,800 1,991,900 3,680,440 7,911,867 9,355,707
Total governmental activities program revenues 13,278,100 13,584,300 16,570,500 10,964,400 13,974,600 12,740,600 12,680,000 17,032,995 22,755,268 25,411,982
136
Schedule 2
City of San Luis Obispo, California
Changes in Net Position, continued
Last Ten Fiscal Years
(Accrual Basis of Accounting)
For the Fiscal Year Ended June 30
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Business-type activities:
Charges for services:
Water 11,603,100$ 12,691,900$ 13,836,000$ 13,812,100$ 14,298,100$ 16,753,100$ 18,148,200$ 19,755,909$ 20,446,730$ 19,884,850$
Sewer 10,868,800 10,205,500 11,785,200 13,225,100 13,320,400 14,789,700 16,212,000 17,151,212 18,007,064 16,460,140
Parking 3,740,600 3,508,100 3,496,100 3,564,700 3,533,300 4,693,400 3,998,730 4,905,494 7,408,729
Transit 766,000 520,500 607,000 551,600 593,100 552,900 682,700 688,585 649,899 659,471
Golf 380,000 349,000 382,200 394,600 364,000
Operating grants and contributions 1,879,100 1,841,500 2,192,200 2,350,200 2,220,700 2,502,500 2,673,500 2,458,640 3,148,651 2,888,820
Capital grants and contributions 457,800 1,960,900 1,627,300 952,300 1,242,000 750,900 731,300 82,359 60,063
Total business-type activities programs revenues 29,695,400 27,569,300 33,938,000 34,782,000 35,603,000 38,882,400 43,141,100 44,135,435 47,217,901 47,302,010
Total primary government program revenues 42,973,500$ 41,153,600$ 50,508,500$ 45,746,400$ 49,577,600$ 51,623,000$ 55,821,100$ 61,168,430$ 69,973,169$ 72,713,992$
Net Revenues (Expenses):
Governmental activities (31,744,300)$ (39,360,100)$ (38,343,100)$ (45,653,300)$ (40,323,500)$ (42,511,800)$ (44,893,500)$ (43,238,594)$ (37,892,304)$ (37,009,155)$
Business-type activities 3,653,600 1,291,700 5,528,900 6,807,400 2,227,500 4,519,900 8,350,200 8,216,474 12,406,815 10,334,964
Total primary government (28,090,700)$ (38,068,400)$ (32,814,200)$ (38,845,900)$ (38,096,000)$ (37,991,900)$ (36,543,300)$ (35,022,120)$ (25,485,489)$ (26,674,191)$
General Revenues and Other Changes
in Net Position:
Governmental activities:
Sales and use taxes 14,993,800$ 19,578,300$ 17,712,100$ 15,976,400$ 17,714,900$ 19,527,500$ 20,736,000$ 22,180,173$ 22,408,980$ 24,676,377$
Property taxes 8,255,000 8,374,200 8,788,400 8,579,300 8,441,100 8,367,000 9,176,600 8,960,010 9,631,890 10,186,858
Transient occupancy tax 4,786,000 5,054,700 4,679,500 4,496,100 4,844,200 5,222,000 5,572,400 6,063,232 6,805,742 7,127,756
Utility users tax 4,096,100 4,177,700 4,358,500 4,862,400 4,592,300 4,584,100 4,916,100 5,345,342 5,211,207 5,413,720
Property tax in-lieu of vehicle license fees 3,358,200 3,280,100 3,504,700 3,565,100 3,551,100 3,492,400 3,533,200 3,645,692 3,849,341 4,113,244
Other taxes and fees 3,860,400 4,228,100 4,317,900 4,226,800 4,149,900 4,299,800 4,607,600 4,779,570 4,993,285 4,800,592
Investment earnings 1,675,400 1,605,300 1,775,300 1,239,500 742,500 770,100 237,100 566,931 467,348 825,760
Miscellaneous and other 360,500 478,400 400,800 339,600 414,700 227,200 349,900 679,127 707,781
Special item - sale of land
Gain (loss) on disposal of capital assets (337,100) (3,400) (11,000)
Prior period adjustment 2,657,100 (833,234)
Cumulative change in accounting principle (GASB 65)(345,400)
Transfers (350,900) (462,000) (335,000) (301,500) (227,200) 1,820,900 115,100 (73,771) (329,452) 1,436,048
Total governmental activities 41,034,500 45,977,700 45,202,200 42,980,300 44,223,500 48,311,000 51,544,700 51,313,072 53,746,122 58,580,355
137
Schedule 2
City of San Luis Obispo, California
Changes in Net Position, continued
Last Ten Fiscal Years
(Accrual Basis of Accounting)
For the Fiscal Year Ended June 30
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Business-type activities
Investment earnings 2,105,100$ 1,413,400$ 1,699,600$ 1,372,500$ 725,300$ 726,100$ 73,500$ 364,551$ 361,627$ 845,906$
Cumulative change in accounting principle (842,600)
Income from investment in joint venture 239,200
Transfers 350,900 462,000 335,000 301,500 227,200 (1,820,900) (115,100) 73,771 329,452 (1,436,048)
Total business-type activities 2,456,000 1,875,400 2,034,600 1,674,000 952,500 (1,094,800) (884,200) 438,322 691,079 (350,942)
Total primary government 43,490,500$ 47,853,100$ 47,236,800$ 44,654,300$ 45,176,000$ 47,216,200$ 50,660,500$ 51,751,394$ 54,437,201$ 58,229,413$
Change in net position:
Governmental activities 9,290,200$ 6,617,600$ 6,859,100$ (2,673,000)$ 3,900,000$ 5,799,200$ 6,651,200$ 8,074,478$ 15,853,818$ 21,571,200$
Business-type activities 6,109,600 3,167,100 7,563,500 8,481,400 3,180,000 3,425,100 7,466,000 8,654,796 13,097,894 9,984,022
Total primary government 15,399,800$ 9,784,700$ 14,422,600$ 5,808,400$ 7,080,000$ 9,224,300$ 14,117,200$ 16,729,274$ 28,951,712$ 31,555,222$
138
Schedule 3
City of San Luis Obispo, California
Governmental Activities Tax and Franchise Revenues by Source
Last Ten Fiscal Years
(Accrual Basis of Accounting)
For the Fiscal Year Ended June 30
Fiscal Sales Measure Y Property Transient Utility Property Franchise Business Other
Year and Use 1/2 cent (Note 1)Occupancy Users in-lieu of VLF Fees Tax Taxes Total
2006-07 (Note 2)13,993,800$ 1,000,000$ 8,255,000$ 4,786,000$ 4,096,100$ 3,061,500$ 2,153,700$ 1,706,700$ 360,500$ 39,413,300$
2007-08 13,581,700 5,996,600 8,374,200 5,054,700 4,177,700 3,280,100 2,361,700 1,866,400 288,100 44,981,200
2008-09 12,070,700 5,641,400 8,788,400 4,679,500 4,358,500 3,504,700 2,439,400 1,878,500 234,300 43,595,400
2009-10 10,723,900 5,252,500 8,579,300 4,496,100 4,862,400 3,565,100 2,396,700 1,830,100 204,600 41,910,700
2010-11 12,098,600 5,616,300 8,441,100 4,844,200 4,592,300 3,551,100 2,352,100 1,797,800 209,100 43,502,600
2011-12 13,290,000 6,237,500 8,367,000 5,222,000 4,584,100 3,492,400 2,462,300 1,837,500 227,200 45,720,000
2012-13 14,242,200 6,493,800 9,176,600 5,572,400 4,916,100 3,533,200 2,552,300 2,055,300 349,900 48,891,800
2013-14 15,405,808 6,774,365 8,960,010 6,063,232 5,345,692 3,645,692 2,636,599 2,142,971 679,127 51,653,496
2014-15 15,272,683 7,136,297 9,631,890 6,805,742 5,211,207 3,849,341 2,790,077 2,203,208 707,781 53,608,226
2015-16 17,498,218 7,178,159 10,186,858 7,127,756 5,413,720 4,113,244 1,537,922 2,491,516 771,154 56,318,547
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. Beginning in 2005-06, the State implemented a "VLF Swap," under which an equal amount of Vehicle License Fees was "swapped" for an equal
amount of revenues to be collected with the property tax roll.
3. In November 2006, voters in San Luis Obispo approved a local sales and use tax measure (Measure Y) increasing the City rate by 1/2%,
which became effective April 1, 2007. The sales tax measure has a sunset provision of 8 years.
4. In November 2014 voters in San Luis Obispo reauthorized the local Half -percent sales and use tax measure (Measure G) .
139
140 Schedule 4 City of San Luis Obispo, California Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified Accrual Basis of Accounting) For the Fiscal Year Ended June 30 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-152015-16General fund: Reserved 437,800$ 808,100$ 291,500$ 201,800$ $ $ $ $ $ $ Unreserved: Designated 743,500 1,093,900 125,000 923,500 Undesignated 17,648,700 12,927,100 13,575,400 9,988,800 Nonspendable: Prepaid items2,777,000 3,191,055 60,181 56,020 Restricted for: (Note 1) Debt service258,100 602,800 331,600 312,037 303,126 489,056 Committed to: (Note 1) General government programs317,500 1,288,200 1,768,200 4,973,497 3,942,459 4,468,863 Assigned to: Contingency Fund10,458,000 10,486,931 11,092,782 Development Services1,848,386 382,396 Safety Fire97,239 Subsequent years expenditures8,200 11,900 2,716,534 Unassigned12,324,100 11,781,500 14,060,900 1,382,590 7,828,485 10,419,881 Total general fund 18,830,000 14,829,100 13,991,900 11,114,100 12,907,900 13,684,400 18,937,700 20,317,179 24,566,807 29,625,532 All other governmental funds: Reserved 3,412,200 8,557,100 10,038,200 6,932,600 Unreserved reported in: Capital projects funds 11,441,300 10,962,000 19,748,900 1,245,000 Special revenue funds 458,700 585,500 626,900 920,300 Restricted for: (Note 1) Debt service2,285,700 2,017,900 2,043,200 2,043,222 2,140,980 2,119,724 Law enforcement grant programs42,000 20,500 22,900 27,145 16,886 23,492 Committed to: Affordable housing programs294,000 1,052,000 1,254,900 2,946,847 2,601,882 2,562,825 Assessment district programs170,700 183,000 Capital outlay1,172,800 1,227,700 1,326,000 6,045,091 3,632,641 2,954,223 General government programs4,743,552 1,084,221 7,463,605 Impact Fees Programs4,350,000 4,069,800 3,542,700 411,592 9,410,273 549,349 Open space programs183,400 194,300 1,582,425 983,402 1,265,620 Parkland development programs998,900 1,057,100 1,209,600 Public art programs293,700 373,700 347,400 Assigned to: Contingency Fund900,000 Subsequent years expenditures8,997,800 4,359,300 5,413,900 3,552,319 2,606,757 2,659,851 Unassigned(2,500) 1,039 (83) Total all other governmental funds 15,312,200 20,104,600 9,097,900 18,605,600 14,544,400 15,352,400 21,353,232 22,476,959 20,498,689 Total all governmental funds 34,142,200$ 34,933,700$ 13,991,900$ 20,212,000$ 31,513,500$ 28,228,800$ 34,290,100$ 41,670,411$ 47,043,766$ 50,124,221$ Note:The City implemented GASB Statement No. 54 in the 2010-11 fiscal year which requires the City to use new designations of ending fund balances.
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)
For the Fiscal Year Ended June 30
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Revenues:
Taxes
Sales and Use - general 13,993,800$ 13,581,700$ 12,070,700$ 10,723,900$ 12,098,600$ 13,290,000$ 14,242,200$ 15,405,808$ 15,272,683$ 17,498,218$
Sales and Use - Measure Y 1,000,000 5,996,600 5,641,400 5,252,500 5,616,300 6,237,500 6,493,800 6,774,365 7,136,297 7,178,159
Prop. 172 Public Safety 308,700 288,400 308,400 257,900 271,300 307,400 327,700 391,567 409,590 405,066
Property 8,255,000 8,374,200 8,788,400 8,579,300 8,441,100 8,367,000 9,176,600 8,960,010 9,631,890 10,186,858
Transient Occupancy 4,786,000 5,054,700 4,679,500 4,496,100 4,844,200 5,222,000 5,572,400 6,063,232 6,805,742 7,127,756
Utility Users 4,096,100 4,177,700 4,358,500 4,862,400 4,592,300 4,584,100 4,916,100 5,345,342 5,211,207 5,413,720
Property tax in-lieu of VLF (Note 1)3,061,500 3,280,100 3,504,700 3,565,100 3,551,100 3,492,400 3,533,200 3,645,692 3,849,341 4,113,244
Franchise Fees 2,153,700 2,361,700 2,439,400 2,396,700 2,352,100 2,462,300 2,552,300 2,636,599 2,790,077 1,537,922
Business Tax 1,706,700 1,866,400 1,878,500 1,830,100 1,797,800 1,837,500 2,055,300 2,142,971 2,203,208 2,491,516
Real Property Transfer 283,900 213,000 159,100 129,000 133,700 144,000 256,300 287,560 298,191 366,088
Fines, forfeitures and penalties 236,500 228,200 261,000 201,700 171,400 174,300 159,700 150,185 184,320 172,353
Use of money and property 1,751,400 1,605,300 1,775,300 1,239,500 742,500 770,100 237,100 566,931 467,348 825,760
Subventions and grants
Vehicle License Fees (Note 1)296,700 190,300 166,500 135,000 205,600 45,600 19,300
Other subventions and grants 4,686,800 4,679,000 8,774,200 4,837,000 4,776,500 3,932,100 4,603,140 5,989,881 10,858,570 11,771,980
Charges for services 8,448,700 8,409,500 6,677,700 5,865,700 9,209,300 8,954,500 8,106,600 11,167,033 12,450,887 13,622,945
Other revenues 250,800 633,800 1,810,300 398,000 270,500 36,500 526,500 357,469 217,710 242,744
Total revenues 55,316,300 60,940,600 63,293,600 54,769,900 59,074,300 59,857,300 62,778,240 69,884,645 77,787,061 82,954,329
Expenditures:
Current:
General Government 6,093,700 6,333,900 6,793,100 7,253,500 6,828,700 8,175,200 8,723,300 9,362,031 10,534,463 12,409,567
Public safety 20,659,600 25,055,900 26,002,400 24,203,800 23,506,100 23,953,200 23,973,400 24,798,500 24,356,077 26,468,454
Transportation 2,173,500 2,539,800 3,224,200 3,019,700 2,901,900 2,865,100 2,798,200 2,882,241 2,969,111 3,317,177
Leisure, cultural and social services 5,705,000 6,398,600 6,598,900 6,279,900 6,268,700 6,704,200 6,790,300 7,155,619 7,250,398 7,428,198
Community development 5,620,100 6,341,600 6,280,800 6,690,200 7,053,500 6,986,300 7,777,400 8,389,957 10,047,272 10,770,827
Debt service:
Principal 1,062,400 1,124,300 1,159,900 1,550,200 1,774,000 1,493,200 1,543,000 1,534,668 3,856,325 1,792,849
Interest 1,021,100 953,700 915,900 1,358,500 1,249,200 1,211,800 1,192,700 1,048,671 1,063,820 1,349,216
Debt issuance costs 36,000
Capital:
Public safety 1,384,500 1,541,500 1,652,700 4,704,400 494,100 447,900 457,700 892,351 2,371,865 1,220,759
Transportation 2,762,200 6,404,200 6,177,600 4,237,200 6,913,200 9,121,000 5,228,300 4,859,863 14,302,937 15,038,306
Leisure, cultural and social services 1,253,200 670,200 1,213,900 1,188,500 584,500 862,000 395,500 1,272,510 2,399,211 1,463,269
Community development (Note 2)1,288,600 1,270,000 1,382,500 3,893,700 884,100 705,300 70,900 939,017 123,258 149,537
General government 379,500 1,053,400 869,700 3,076,800 1,731,400 274,900 429,700 145,199 1,684,045 590,263
Total expenditures 49,403,400 59,687,100 62,271,600 67,456,400 60,225,400 62,800,100 59,380,400 63,280,627 80,958,782 81,998,422
Excess of revenues
over(under)
expenditures 5,912,900 1,253,500 1,022,000 (12,686,500) (1,151,100) (2,942,800) 3,397,840 6,604,018 (3,171,722) 955,907
141
Schedule 5
City of San Luis Obispo, California
Revenues, Expenditures and Changes in Fund Balances of Governmental Funds, continued
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
For the Fiscal Year Ended June 30
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Other Financing
Sources(Uses):
Sale of surplus property $ $ $ $ 393,900$ 30,200$ $ $ $ $
Issuance of debt/refunding debt 9,067,000 1,080,000 5,050,000 850,775 8,372,323 688,500
Cost of debt issuance (11,500)
Payment to refunded bond escrow agent (281,800) (5,442,200)
Transfers in 7,215,700 15,350,100 8,655,400 8,081,900 6,464,100 8,121,200 8,407,600 13,834,998 11,682,079 12,747,578
Transfers out (7,566,600) (15,812,100) (8,990,400) (8,383,400) (6,691,300) (8,101,100) (8,292,500) (13,908,769) (12,011,531) (11,311,530)
Total other financing
sources(uses)(350,900) (462,000) 8,450,200 (301,500) 1,246,700 (341,900) 103,600 777,004 8,042,871 2,124,548
Net change in fund
balance 5,562,000$ 791,500$ 9,472,200$ (12,988,000)$ 95,600$ (3,284,700)$ 3,501,440$ 7,381,022$ 4,871,150$ 3,080,455$
Debt service as a
percentage of noncapital
expenditures 6.10%5.15%4.93%7.24%7.61%6.68%6.62%5.98%8.92%5.20%
Notes:
1. Beginning in 2005-06 the State implemented a "VLF swap," under which an equal amount of Vehicle License Fees was "swapped" for an equal amount of revenues
to be collected on the property tax roll.
2. Community Development Block Grant (CDBG) expenditures are included in the Community Development total for purposes of this schedule.
142
Schedule 6
City of San Luis Obispo, California
General Fund Operating Expenditure Trends by Type
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting
For the Fiscal Year Ended June 30
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Staffing:
Salaries and wages:
Regular salaries 18,491,700$ 22,745,800$ 24,310,100$ 24,180,400$ 23,848,400$ 23,432,400$ 23,214,900$ 23,242,170$ 23,804,510$ 24,790,947$
Temporary salaries 2,108,000 2,026,800 1,851,700 1,592,700 1,507,300 1,626,900 1,812,700 2,191,214 2,137,487 1,964,521
Overtime 2,484,600 2,876,000 3,009,200 2,397,500 2,162,500 2,763,100 3,309,000 3,018,181 3,222,698 3,473,489
Benefits:
Retirement 6,278,300 7,485,200 8,006,100 7,915,900 7,899,200 8,444,000 7,661,900 7,637,931 7,943,827 9,323,782
Group health/disability ins (Note 1)2,399,900 2,710,000 3,579,400 3,744,200 3,407,500 3,441,700 3,463,500 3,387,101 3,319,117 3,828,238
Medicare 271,700 339,600 363,700 370,300 367,100 371,200 384,400 393,913 408,889 418,704
Unemployment Reimbursements 19,600 42,900 24,100 87,600 35,500 26,200 28,800 31,634 48,588 5,159
Total staffing 32,053,800 38,226,300 41,144,300 40,288,600 39,227,500 40,105,500 39,875,200 39,902,144 40,885,116 43,804,840
Contract services 4,300,300 4,546,400 4,228,700 3,812,400 3,728,100 4,306,000 5,208,900 5,725,290 5,903,638 6,271,607
Other operating expenditures
Communications & utilities 1,489,900 1,539,700 1,662,000 1,538,000 1,629,500 1,658,000 1,842,300 2,034,997 1,945,243 2,192,384
Rents & leases 133,400 142,100 147,700 130,500 141,800 136,800 139,600 197,104 159,718 164,729
Insurance:
General liability & property 830,300 1,054,900 1,051,500 1,447,300 1,434,600 1,475,600 1,320,700 1,425,450 1,646,605 1,847,422
Workers compensation 1,423,600 1,514,400 1,017,000 760,500 447,100 594,400 918,000 1,405,916 1,631,585 2,019,722
Other operating expenditures 2,874,900 2,699,900 3,061,900 2,399,300 2,544,400 2,696,500 2,910,900 2,991,619 3,635,542 3,079,347
Total operating expenditures 6,752,100 6,951,000 6,940,100 6,275,600 6,197,400 6,561,300 7,131,500 8,055,086 9,018,693 9,303,604
Minor capital 195,800 162,500 90,600 38,300 10,800 14,200 99,400 195,473 78,414 92,853
Total program expenditures 43,302,000 49,886,200 52,403,700 50,414,900 49,163,800 50,987,000 52,315,000 53,877,993 55,885,861 59,472,903
Reimbursed expenditures (3,786,700) (4,075,300) (4,210,800) (4,264,000) (4,449,900) (3,774,900) (3,732,100) (3,897,420) (3,451,208) (4,008,992)
Total general fund operating expenditures 39,515,300$ 45,810,900$ 48,192,900$ 46,150,900$ 44,713,900$ 47,212,100$ 48,582,900$ 49,980,573$ 52,434,653$ 55,463,911$
Note:
1. Beginning in 2008-09, the City began to fund retiree health costs on a full accrual basis. The added cost compared with the prior "pay-as-you-go" approach in 2011-12 is $364,800. While this change in accounting
increases costs initially, in the not-so-distant future (about 12 years), it becomes a much less expensive option than continuing "pay-as-you-go" cash funding.
143
Schedule 7
City of San Luis Obispo, California
Assessed and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
For the Fiscal Year Ended June 30
Fiscal Year Homeowners Secured Roll Unitary Unsecured Total Direct Market Value Percentage of
Exemptions Gross Value Roll TOTAL Tax Rate (Note 1)Market Value
2006-07 42,698,000$ 5,085,935,700$ 6,905,800$ 240,871,700$ 5,333,713,200$ 1.00%5,333,713,200$ 100%
2007-08 (Note 3)42,600,200 5,456,264,900 5,678,500 254,783,200 5,716,726,600 1.00%5,716,726,600 100%
2008-09 42,384,800 5,828,492,800 5,582,800 274,186,700 6,108,262,300 1.00%6,108,262,300 100%
2009-10 42,222,400 6,008,936,600 4,904,100 277,718,500 6,291,559,200 1.00%6,291,559,200 100%
2010-11 41,929,800 5,985,294,700 5,505,000 279,434,500 6,270,234,200 1.00%6,270,234,200 100%
2011-12 41,988,100 5,894,189,700 6,842,300 275,800,100 6,176,832,100 1.00%6,176,832,100 100%
2012-13 41,572,300 5,963,182,500 5,382,272 279,203,900 6,261,931,900 1.00%6,261,931,900 100%
2013-14 41,327,300 6,152,693,400 5,300,173 295,626,200 6,467,600,400 1.00%6,467,600,400 100%
2014-15 41,185,200 6,512,370,260 5,032,204 297,325,321 6,814,727,785 1.00%6,814,727,785 100%
2015-16 41,518,400 6,965,233,454 4,883,115 305,427,553 7,275,544,122 1.00%7,275,544,122 100%
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.
3. The decrease in value of utility taxable property in 2007-08 is due to a federally mandated decrease in the assessment ratio on railroad property.
Source: HDL CAFR Statistical report
Gross Assessed Valuation (Notes 1 and 2)
144
Schedule 8
City of San Luis Obispo, California
Property Tax Rates
Last Ten Fiscal Years
For the Fiscal Year Ended June 30
2004-05 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Proposition 13 maximum tax rate (Note 2)1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000
Voter approved indebtedness:
State water project 0.002 0.002 0.002 0.002 0.002 0.003 0.003 0.004 0.004 0.004 0.004
Elementary and high school
Bond and lease agreements 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
Total (Notes 1 and 3)1.002 1.002 1.002 1.002 1.002 1.003 1.003 1.004 1.004 1.004 1.004
Notes:
1. Property tax rates are levied per $100 of assessed valuation. The tax rate information provided is for Tax Rate Area 003-000, which is the
largest tax rate area in the City.
2. The passage of Proposition 13 on June 6, 1978 established a maximum County-wide levy for general revenue purposes of 1% of market value.
Voter-approved tax rates for the retirement of long-term liabilities were excluded from this limit.
3. It is not possible to identify tax rates for individual agencies however, the following is a summary of derived property tax
allocations within Tax Rate Area 003-000 for Fiscal Year 2008-09:
Base ERAF Net
Rate Allocation Apportionment
San Luis Coastal Unified School District 36.1 36.1
San Luis Obispo County - General Fund 30.32 (8.2) 22.12
City of San Luis Obispo 18.36 *(3.5) 14.86
San Luis Obispo Community College District 6.4 6.4
County School Services 3.8 3.8
City/County Library 2.00 (0.3) 1.7
Port San Luis Harbor 1.6 (0.4) 1.2
Other Agencies 1.4 (0.1) 1.3
Education Revenue Augmentation Fund (ERAF)12.5 12.5
Total 100%0%100%
* The County further adjusts the 18.4% base rate for revenue shifts to school districts as directed by the State as part of their cuts to local agencies,
resulting in an effective rate for the City of approximately 14.9%.
Source: Prepared by HdL, Coren & Cone
Data source: San Luis Obispo County Assessor 2015-16 Annual Tax Increment Tables
145
Schedule 9
City of San Luis Obispo, California
Principal Property Taxpayers
Current Year and Nine Years Ago
For the Fiscal Year Ended June 30
Number of Secured Percent of Total Number of Secured Percent of Total
Owner Parcels Assessed Value Rank City Assessed Value Parcels Assessed Value Rank City Assessed Value
Jamestown Premir SLO Court Etal 9 105,432,430$ 1 1.51%
CAP VIII Mustang- LLC 4 78,358,102 2 1.12%6 70,825,000$ 1 1.48%
Sierra Vista Hospital Inc.8 77,979,526 3 1.12%
Charles Pasquini Jr Trust 9 61,066,537 4 0.88%
SLO Promenade Limited Partnership 10 50,419,038 5 0.72%
Irish Hills Plaza West II LLC 6 46,963,546 6 0.67%
Costco Wholesale Corporation 1 34,284,730 7 0.49%1 30,538,946 4 0.49%
Marigold Center LLC 9 29,923,245 8 0.43%9 23,573,510 10 0.49%
Bre Atlas Property Owner LLC 1 27,900,000 9 0.40%
Target Corporation 1 26,413,114 10 0.38%
Alta Vista Park Homeowners Association 97 61,358,138 2
Catholic Healthcare West 5 34,329,506 3 0.72%
City of San Luis Obispo 144 29,196,776 5 0.61%
SLO Promenade Limited Partnership 7 27,815,641 6 0.58%
John E. & Carole D. King 13 28,310,959 7 0.59%
KLA SLO LLC 7 27,815,641 8 0.58%
Charter Communications Properties 4 23,619,263 9 0.49%
Total 538,740,268$ 7.72%357,383,380$ 6.03%
Source: DHL CAFR report.
2015-16 2006-07
146
Schedule 10
City of San Luis Obispo, California
Secured Property Tax Roll Levies and Collections
Last Ten Fiscal Years
For the Fiscal Year Ended June 30
Total Secured Current Year Percent
Fiscal Tax Levy Current Year Percent Delinquencies Delinquent
Year (Notes 1 and 2)Collections Collected (Note 3)(Note 3)
2006-07 7,354,900 7,354,900 100%0 0
2007-08 7,868,700 7,868,700 100%0 0
2008-09 8,335,400 8,335,400 100%0 0
2009-10 8,456,800 8,456,800 100%0 0
2010-11 8,405,600 8,405,600 100%0 0
2011-12 8,269,300 8,269,300 100%0 0
2012-13 8,151,000 8,151,000 100%0 0
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
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 $8,740,762.
3. The City has elected the Teeter Plan method of property tax collection, whereby the County remits 100% of taxes levied and
pursues collection and retains any delinquent taxes and related penalties and interest.
Source: San Luis Obispo County Auditor-Controller
147
Schedule 11
City of San Luis Obispo, California
Schedule of Taxable Sales and Permits by Category
Last Ten Calendar Years
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015*
Sales
In Thousands of Dollars
Apparel stores 49,051$ 54,345$ 59,309$ 77,252$ 80,562$ 76,229$ 73,441$ 75,136$ 75,491$ 78,647$
General merchandise stores 171,001 172,347 167,887 124,576 126,079 152,044 171,942 174,094 179,741 182,753
Food and drug stores 44,768 45,703 48,084 55,870 54,729 58,556 45,284 46,725 47,702 49,279
Eating & drinking places 122,292 126,865 127,274 124,060 122,777 130,853 140,337 145,602 156,393 169,382
Home furnishings & appliances 52,454 54,932 63,568 69,187 67,337 65,903 69,138 65,835 68,891 68,891
Building materials & farm tools 124,900 108,793 82,154 73,812 74,342 83,735 112,229 127,035 131,741 134,500
Auto dealers & supplies 251,173 241,008 196,579 157,271 174,302 191,495 231,097 273,692 291,444 291,444
Service stations 83,495 81,030 82,142 71,512 85,017 103,286 109,072 104,420 103,140 89,773
Other retail stores 181,231 177,222 151,130 117,825 121,504 128,522 259,218 256,955 262,830 275,323
Total retail stores 1,080,365 1,062,245 978,127 871,365 906,649 990,623 1,211,758 1,269,494 1,317,373 1,339,992
All other outlets 147,714 163,925 185,666 160,931 173,589 197,831 267,561 295,961 299,049 355,260
Total 1,228,079$ 1,226,170$ 1,163,793$ 1,032,296$ 1,080,238$ 1,188,454$ 1,479,319$ 1,565,455$ 1,616,422$ 1,695,252$
Permits
Apparel stores 78 91 103 113 120 111 122 131 103 175
General merchandise stores 20 20 27 14 14 14 12 12 14 25
Food and drug stores 37 33 34 42 45 49 53 55 53 58
Eating & drinking places 185 187 196 180 185 188 204 213 239 233
Home furnishings & appliances 75 74 73 88 91 86 88 84 81 88
Building materials & farm tools 30 30 30 40 40 39 41 39 39 41
Auto dealers & supplies 53 63 58 69 70 64 62 60 65 59
Service stations 22 24 21 21 21 17 17 17 17 17
Other retail stores 364 358 348 610 590 579 602 661 722 584
Total retail stores 864 880 890 1,177 1,176 1,147 1,201 1,272 1,333 1,280
All other outlets 1,075 1,074 1,024 672 688 656 666 664 678 872
Total 1,939$ 1,954$ 1,914$ 1,849$ 1,864$ 1,803$ 1,867$ 1,936$ 2,011$ 2,152$
Source: State Board of Equalization, State of California Taxable Sales in California, and The HDL Companies.
* 2015 is the last year information available.
148
Schedule 12
City of San Luis Obispo, California
Historical Sales and Use Tax Rates
Effective End State Local City Combined
Date Date Jurisdiction Transportation Fund Rate 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%1.25%(Note 4)7.75%
4/1/2009 7.25%0.25%1.25%8.75%
7/1/2011 6.25%0.25%1.25%7.75%
1/1/2013 7.25%0.25%0.50%8.00%
1/1/2014 7.25%0.25%0.50%8.00%
1/1/2015 7.25%0.25%0.50%8.00%
1/1/2016 7.25%0.25%0.50%8.00%
Notes:
1. The Bradley-Burns Uniform Local Sales and Use Tax Law was enacted in 1955. The law authorizes cities and counties to impose a sales and use
tax. Effective January 1, 1962, all cities and counties have adopted ordinances for the State Board of Equalization to collect the local tax.
2. Sales tax only. The use tax was enacted effective July 1, 1935.
3. In March 2004, a State ballot measure was passed issuing deficit reduction bonds for State purposes. Funding was provided effective July 1, 2004 by
repealing 25% of the local 1% sales tax and then adopting a new 1/4-cent sales tax dedicated to repayment of the deficit reduction bonds. Cities and
counties would then be "made whole" by the State from increased property tax allocations via reduced contributions to ERAF. This "triple flip"
is theoretically revenue-neutral, and as such, the effective rate for revenue purposes remains at 1%.
4. In November 2006, voters in San Luis Obispo approved a local sales tax measure increasing the City rate by 1/2%, which became effective April 1, 2007.
The sales tax measure has a sunset provision of 8 years. The local Sales Tax was extended as Measure G in the November 2014 election for 8 years.
Source: State Board of Equalization, State of California
149
Schedule 13
City of San Luis Obispo, California
Schedule of Business Tax Certificates Issued
Fiscal Years Ended June 30, 2016 and 2015
No. of No. of
Certificates Percent Certificates Percent
Construction 993 13.1%948 12.1%
Manufacturing 132 1.7%131 1.7%
Transportation/Utilities 31 0.4%39 0.5%
Wholesale 139 1.8%128 1.6%
Retail 819 10.8%1,018 13.0%
Professional 871 11.5%1,080 13.8%
Residential Rental 2,509 33.0%2,358 30.2%
Commercial Rental 228 3.0%314 4.0%
Services 1,875 24.7%1,789 22.9%
Total business certificates issued 7,597 100%7,805 100%
Home occupations 614 8.1%673 8.6%
Located outside City limits 2,018 26.6%1,602 20.5%
Located in Downtown Business Improvement District 612 8.1%592 7.6%
Source: City of San Luis Obispo Finance Department- Revenue Division
20152016
150
Schedule 14
City of San Luis Obispo, California
Per Capita Outstanding Debt by Type
Last Ten Fiscal Years
For the Fiscal Year Ended June 30
Lease Lease Installment Percentage of
Fiscal Purchase Lease Sales Total Primary Per Gross Assessed
Year Bonds Financing Loans Bonds Financing Agreement Loans Government Capita Value
2006-07 23,072,700$ 304,800$ 36,947,300$ 1,649,400$ 25,922,200$ 87,896,400$ 1,987 1.65%
2007-08 21,994,400 258,900 35,345,600 1,400,400 2,050,000 23,600,700 84,650,000 1,894 1.48%
2008-09 29,949,300 211,200 35,330,700 1,142,100 2,050,000 31,219,700 99,903,000 2,232 1.64%
2009-10 28,448,900 161,400 33,946,100 872,900 1,950,000 28,554,000 93,933,300 2,090 1.49%
2010-11 26,806,500 1,109,800 32,503,500 593,500 1,845,000 25,807,000 88,665,300 1,973 1.41%
2011-12 24,962,100 955,900 30,082,900 302,300 1,735,000 22,976,300 81,014,500 1,788 1.31%
2012-13 23,574,900 823,400 2,025,100 28,625,150 1,620,000 20,309,200 76,977,750 1,690 1.23%
2013-14 22,152,010 711,622 850,775 27,083,025 8,979,000 19,446,784 79,223,216 1,742 1.27%
2014-15 28,556,715 1,127,606 766,092 25,983,320 8,481,043 18,559,851 83,474,627 1,836 1.28%
2015-16 27,199,515 1,374,773 679,314 24,840,500 7,932,327 17,647,622 79,674,051 1,718 1.14%
Sources:
City of San Luis Obispo Finance Department
Governmental Activities Business-Type Activities
151
Schedule 15
City of San Luis Obispo, California
Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt per Capital
Last Ten Fiscal Years
For the Fiscal Year Ended June 30
Service Ratio of Net
Net 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
2006-07 44,239 5,333,713,200$ 0 0 0 0.0%0
2007-08 44,697 5,716,726,600 0 0 0 0.0%0
2008-09 44,750 6,108,262,300 0 0 0 0.0%0
2009-10 44,948 6,291,559,300 0 0 0 0.0%0
2010-11 45,418 6,270,234,200 0 0 0 0.0%0
2011-12 45,308 6,176,832,100 0 0 0 0.0%0
2012-13 45,541 6,261,931,900 0 0 0 0.0%0
2013-14 45,473 6,454,835,328 0 0 0 0.0%0
2014-15 45,484 6,814,727,785 0 0 0 0.0%0
2015-16 46,377 7,275,544,122 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.
Sources: HDL 2015-16 Reports -Asset Value and demographic tables
152
Schedule 16
City of San Luis Obispo, California
District and Overlapping Long-Term Debt
Fiscal Year Ended June 30, 2016
Amount Applicable
Percent Applicable to the City of
to the City of San Luis Obispo
San Luis Obispo as of June 30, 2016
Direct long-term debt:
City of San Luis Obispo 2001 Refunding Lease Revenue Bonds (1999)100.000%-$
City of San Luis Obispo 2002 Water Revenue Refunding Bonds (1993)100.000%-
City of San Luis Obispo 2004 Refunding Lease Revenue Bonds (1994) 100.000%-
City of San Luis Obispo 2005 Refunding Revenue Bonds (1996)100.000%3,815,000
City of San Luis Obispo 2006 Lease Revenue Bonds 100.000%12,870,000
City of San Luis Obispo 2006 Water Revenue Bonds 100.000%13,410,000
City of San Luis Obispo 2009 Lease Revenue Bonds 100.000%6,900,035
City of San Luis Obispo 2012 Refunding Revenue Bonds (2001)100.000%4,185,000
City of San Luis Obispo 2012 Water Revenue Refunding Bonds (2002)100.000%3,425,000
City of San Luis Obispo 2014 LOVR lease Revenue Bonds 100.000%7,435,000
52,040,035
Overlapping long-term debt (percentage of overlapping agency's assessed valuation located within boundaries of the City):
San Luis Obispo County Certificates of Participation 15.885%4,320,260
San Luis Obispo County Pension Obligations 15.885%16,076,294
San Luis Community College District Certificates of Participation 15.825%1,215,535
City of San Luis Obispo Lease Revenue Bonds 100.000%35,205,000
56,817,089
Less: City of San Luis Obispo obligations supported by enterprise revenues 8,005,500
Total gross direct and overlapping long-term debt 48,811,589
Less self-supporting issues:
City of San Luis Obispo 2001 Refunding Lease Revenue Bonds (1999) - Water Fund supported portion -
City of San Luis Obispo 2002 Water Revenue Refunding Bonds (1993)-
City of San Luis Obispo 2004 Refunding Lease Revenue Bonds (1994) - Parking Fund supported portion -
City of San Luis Obispo 2006 Lease Revenue Bonds - Parking Fund supported portion 6,949,800
City of San Luis Obispo 2006 Water Revenue Bonds 13,410,000
City of San Luis Obispo 2009 Lease Revenue Bonds - Parking/Sewer/Water Funds supported portion 1,055,720
City of San Luis Obispo 2012 Water Revenue Refunding Bonds (2002)3,425,000
Total self-supporting issues 24,840,520
23,971,069$
Ratio of long-term debt to assessed valuation and population
Gross Assessed Valuation 7,275,544,122$
Population 46,377
153
Schedule 16
City of San Luis Obispo, California
District and Overlapping Long-Term Debt, continued
Fiscal Year Ended June 30, 2016
Percent of Gross Per Capita
Amount Assessed Valuation Long-Term Debt
Direct and Overlapping Debt:
Gross $48,811,589 0.7%$1,052.50
Net 23,971,069 0.3%517
Direct Debt:
Gross $52,040,035 0.7%$1,122.11
Net 27,199,515 0.4%586
Source: California Municipal Statistics, Inc. DHL CAFR report.
154
Schedule 17
City of San Luis Obispo, California
Computation of Legal Debt Margins
Last Ten Fiscal Years
(amounts expressed in thousands)
For the Fiscal Year Ended June 30
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Legal debt limit 199,755$ 214,377$ 229,059$ 235,815$ 234,887$ 231,384$ 234,822$ 241,812$ 244,175$ 272,833$
Total debt applicable to limit
Legal debt margin 199,755 214,377 229,059 235,815 234,887 231,384 234,822 241,812 244,175 272,833
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 2015-16
Gross Assessed Valuation 7,275,544,122$
Legal Debt Limit - 3.75% of Gross Assessed Valuation 272,832,905$
Long-term Debt:
Revenue Bonds Secured by Capital Leases 35,205$
Water Revenue Bonds 16,835
Less deductions allowed by law:
Revenue Bonds Secured by Capital Leases 35,205
Water Revenue Bonds 16,835
52,040
Total debt applicable to computed limit -$
Legal debt margin 272,832,905$
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.
155
Schedule 18
City of San Luis Obispo, California
Revenue Bond Coverage – Water Fund
Last Ten Fiscal Years
For the Fiscal Year Ended June 30
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
2006-07 11,565,200$ (1,479,900)$ 1,669,400$ (7,999,700)$ 3,755,000$ 1,246,700$ 1,109,700$ 2,356,400$ 159%222%
2007-08 12,668,800 (1,386,300)759,100 (7,111,600)4,930,000 1,392,100 1,243,000 2,635,100 187%240%
2008-09 13,447,400 (663,000) 1,339,700 (7,877,500) 6,246,600 1,420,300 1,200,368 2,620,668 238%264%
2009-10 13,755,800 (448,200) 719,800 (7,603,500) 6,423,900 1,078,960 1,171,884 2,250,844 285%305%
2010-11 14,256,100 (639,600)384,500 (12,389,200)1,611,800 1,107,790 1,137,021 2,244,811 72%100%
2011-12 16,266,300 (643,200)825,400 (13,666,100)2,782,400 1,146,885 1,137,445 2,284,330 122%150%
2012-13 18,250,700 (1,578,100)97,500 (13,353,300)3,416,800 1,096,215 995,419 2,091,634 163%239%
2013-14 19,676,199 (819,477)215,915 (13,996,427)5,076,210 1,160,700 964,148 2,124,848 239%277%
2014-15 20,552,417 (2,471,501)59,594 (13,451,298)4,689,212 1,285,686 906,775 2,192,461 214%327%
2015-16 20,137,422 (1,543,268)53,731 (14,056,603)4,591,282 1,245,486 881,318 2,126,804 216%332%
Notes:
3. Net revenues available for debt service exclude development impact fees.
4. Operating expenses exclude depreciation and amortization.
Source: City of San Luis Obispo Utilities Department
2. 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 loan
156
Schedule 19
City of San Luis Obispo, California
Revenue Bond Coverage – Parking Fund
Last Ten Fiscal Years
For the Fiscal Year Ended June 30
Net Revenue
Fiscal Gross Operating Available for
Year Revenues Expenses Bond Debt Service Principal Interest Total Coverage
2006-07 4,265,500$ (2,021,000)$ 2,244,500$ 390,600$ 534,700$ 925,300$ 243%
2007-08 4,027,500 (2,032,500)1,995,000 400,100 480,700 880,800 226%
2008-09 4,007,900 (2,344,300) 1,663,600 415,800 462,500 878,300 189%
2009-10 3,788,300 (2,142,400) 1,645,900 599,600 449,200 1,048,800 157%
2010-11 3,730,100 (2,190,200)1,539,900 621,800 428,700 1,050,500 147%
2011-12 3,688,200 (2,351,400)1,336,800 642,600 408,100 1,050,700 127%
2012-13 4,726,000 (2,440,600)2,285,400 663,500 386,000 1,049,500 218%
2013-14 4,122,860 (2,488,797)1,634,063 690,600 361,822 1,052,422 155%
2014-15 4,905,494 (2,409,027)2,496,467 447,962 504,407 952,369 262%
2015-16 4,606,249 (2,757,299)1,848,950 466,185 501,631 967,816 191%
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 $8,726,400 is allocated to the Parking Fund.
2. Operating expenses exclude depreciation.
Source: City of San Luis Obispo Finance Department.
Bonded Debt Service Requirements
157
Schedule 20
City of San Luis Obispo, California
Demographic and Economic Statistics
Last Ten Fiscal Years
For the Fiscal Year Ended June 30
Median Public Elementary Cuesta Community
Fiscal Household Median and Secondary School College Unemployment
Year Population (1)Income (2)Age (1)Enrollment (4)Enrollment (3)Rate (1)
2006-07 44,239 38,328$ 30.1 6,989 8,671 4.10%
2007-08 44,697 49,827 30.1 6,982 8,983 4.30%
2008-09 44,750 42,526 37.3 7,123 9,720 9.10%
2009-10 44,948 40,579 27.0 7,112 8,433 9.70%
2010-11 45,418 53,978 23.4 7,226 7,890 9.60%
2011-12 45,308 57,365 24.5 7,402 7,339 7.50%
2012-13 45,541 58,630 24.5 7,368 7,289 6.40%
2013-14 45,473 59,628 25.3 7,366 7,389 5.70%
2014-15 45,484 63,474 25.0 7,520 6,850 5.90%
2015-16 46,377 62,648 25.0 7,110 6,691 4.90%
Sources:
1. 2015-16 CAFR Statistical Reports by The HdL Companies.
2. http://www.california-demographics.com/san-luis-obispo-county-demographics
3. Cuesta Community College Admissions Office.
Note: Enrolled students (head count) San Luis Obispo campus only
4. San Luis Coastal Unified School District Annual Community Report.
Note: The boundaries of SLCUSD are significantly larger than the City. The above school enrollment information also includes these
outlaying areas, most notably Los Osos, Morro Bay, and Avila Beach.
158
Schedule 21
City of San Luis Obispo, California
Principal Employers
Current Year and Nine Years Ago
For the Fiscal Year Ended June 30
Percentage Percentage
Number of Total City Number of Total City
Employer Employees Rank Employment Employees Rank Employment
Cal Poly State University 3,055 1 10.70%2677 1 6.77%
County of San Luis Obispo 2,800 2 8.80%2546 2 6.44%
P.G. & E (Diablo Canyon)1,900 3 6.70%1800 3 4.55%
California Men's Colony 1,540 4 5.40%1800 4 4.55%
Cal Poly Foundation (Corporation)1,400 5 4.90%1400 5 3.54%
San Luis Coastal Unified School District 902 6 3.20%821 7 2.08%
Sierra Vista Regional Medical Center 700 7 735 8 1.86%
Mindbody 650 8 2.30%
California Department of Transportation 544 9 1.90%
Cuesta Community College 440 10 1.50%830 6 2.10%
City of San Luis Obispo 557 9 1.41%
French Hospital 492 10 1.24%
Total 13,931 45.40%13,658 34.54%
Note: Source for the 2015-16 employers information is the 2015 Pacific Coast Business Times (The List ). This information represents
employers in San Luis Obispo County.
2006-072015-16
159
Schedule 22
City of San Luis Obispo, California
Regular Authorized Positions
Last Ten Fiscal Years
For the Fiscal Year Ended June 30
Function 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Public Safety
Police
Sworn 58.0 64.0 64.0 59.0 59.0 57.0 57.0 60.0 60.0 61.0
Non-sworn 27.0 28.0 28.0 27.5 27.5 26.5 25.5 25.5 25.5 25.5
Fire
Sworn 43.0 44.0 44.0 44.0 44.0 44.0 44.0 49.0 49.0 50.0
Non-sworn 9.0 10.0 10.0 9.8 9.0 7.8 6.8 4.0 4.0 4.0
Public Utilities 63.8 66.8 66.8 63.8 63.8 60.9 61.9 64.8 64.8 67.1
Transportation 25.5 32.0 32.0 30.0 29.2 31.8 31.8 28.9 28.9 36.8
Leisure, Cultural and Social Services 28.0 33.0 33.0 33.0 33.0 32.0 32.0 34.0 34.0 35.0
Community Development 38.6 40.3 40.3 37.3 37.3 42.8 43.8 39.5 40.0 51.0
General Government 55.9 58.5 59.5 54.8 54.8 50.5 52.2 56.0 56.0 57.0
Total 348.8 376.6 377.6 359.2 357.6 353.3 355.0 361.7 362.2 387.4
Ratio of Sworn Police Personnel per 1,000 Population:* 1.31 1.43 1.43 1.31 1.30 1.26 1.25 1.32 1.32 1.33
Ratio of Sworn Fire Personnel per 1,000 Population:*0.97 0.98 0.98 0.98 0.97 0.97 0.97 1.08 1.08 1.06
* Does not include the Cal Poly student and faculty population served.
Note: See Schedule of Demographic and Economic Statistics for population data.
Source: City of San Luis Obispo Finance Department
160
Schedule 23
City of San Luis Obispo, California
Operating Indicators and Capital Asset Statistics by Function
Last Ten Fiscal Years
For the Fiscal Year Ended June 30
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Function/Program:
Police:
Calls for police/fire service 33,832 33,580 33,211 32,057 32,074 34,751 36,236 34,659 36,515 38,300
Incident numbers issued 29,652 29,275 28,855 27,555 27,595 29,991 31,156 29,277 31,048 32,542
Police reports written 7,705 8,053 7,839 7,454 7,661 8,322 9,192 8,665 8,435 8,852
Traffic citations issued 7,635 6,389 7,099 *
Other citations issued 629 703 1,315 *
Violations cited 5,264 6,389 8,410 8,471 5,939 8,119 7,213 5,793 6,648 7,673
Citations issued 4,774 5,811 7,737 7,398 5,380 7,718 6,665 5,275 6,204 7,038
Collision reports 870 871 693 718 728 669 643 625 630 587
Violent crimes:**162 163 136 140 126 134 117 158 237 173
Willful homicide**3 2 1 0 0 0
Forcible rape**22 27 32 30 27 24 18 31 44 29
Robbery**25 39 38 39 35 34 19 26 25 13
Aggravated assault**115 99 66 71 64 74 79 101 168 131
Property crimes:**726 702 649 620 640 714 804 713 542 637
Burglary**358 312 334 324 372 330 414 328 206 225
Motor vehicle theft**96 84 55 68 54 107 81 63 71 87
Larceny-theft:**1,273 1,450 1,328 1,240 1,260 1,345 1,476 1,384 1,162 1,335
Over $400**272 306 260 228 214 277 309 322 265 325
$400 and under**1,001 1,144 1,068 1,012 1,046 1,068 1,167 1,062 897 1,010
Fire:
Medical responses***(Note 4)2,564 2,788 2,613 3,325 2,799 2,856 2,985 3,232 3,417 3,540
Fire suppression responses***(Note 4)100 321 110 133 101 102 95 105 111 151
Hazardous materials responses***(Note 4)36 29 26 36 23 17 21 15 21 22
Other responses***(Note 4)1,504 1,302 1,897 1,224 1,528 1,552 1,812 1,840 1,929 2,158
Total service responses***4,204 4,440 4,646 4,718 4,451 4,527 4,913 5,192 5,478 5,871
Fire and life-safety inspections***2,063 1,684 1,977 1,110 2,489 2,431 2,494 644 2,476 2,516
Arson investigations***47 38 29 47 22 18 49 44 17 44
Education activities (# of people)***17,200 18,000 15,000 14,000 20,106 23,120 23,377 23,945 23,697 23,680
161
Schedule 23
City of San Luis Obispo, California
Operating Indicators and Capital Asset Statistics by Function, continued
Last Ten Fiscal Years
For the Fiscal Year Ended June 30
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Function/Program:
Public Utilities:
Water/Sewer customer accounts 14,260 14,380 14,682 14,875 14,734 14,695 14,742 14,899 14,953 15,167
Miles of sewerline 133 133 137 137 137 137 137 197 139.6
Miles of waterline 170 182 182 185 185 187 187 *187 191
Water service line repairs and renewals*****250 225 142 95 86 50 66 58 60 50
Sewer main stoppages 12 8 12 10 9 7 12 15 13
Acre feet of water delivered - Nacimiento 981 2,321 663 1,506 839 3574
Acre feet of water delivered - Salinas 1,818 1,944 2,473 2,736 2,640 2,149 2,378 1,444 1,986 8
Acre feet of water delivered - Whale Rock 5,003 4,855 4,280 3,402 1,277 2,875 3,212 2,615 1,375
Transportation:
Signals and lights:
Intersections with traffic signals 60 67 70 68 70
Traffic signal service requests 100 80 85 80 85
Streetlights operated & maintained 220 2,230 2,300 2,300 2,300
Streetlight service requests 285 500 180 175 45
Parking spaces:
Estimated miles of paved streets 125 125 125 125 130 132 132 133 133 133
Pavement condition index 75 74 74 73 74 72 71 72 72 71
Number of street lights 2,260 2,300 2,300 2,179 2,270 2,270 2,270 2,300 2,300 2,300
Traffic collisions 871 865 789 708 597 621 593 660 720 531
Parking spaces provided (lot, garage & street)3,065 3,059 3,060 3,059 3,067 3,065 3,071 3,119 3176 2953
Parking citations written 43,080 39,234 40,062 30,087 30,278 26,515 28,690 23,957 20,690 24,213
Total transit passengers 934,534 1,003,805 1,032,232 1,019,852 1,045,299 1,118,519 1,109,600 1,122,000 1,099,274 1,209,708
162
Schedule 23
City of San Luis Obispo, California
Operating Indicators and Capital Asset Statistics by Function, continued
Last Ten Fiscal Years
For the Fiscal Year Ended June 30
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Function/Program:
Leisure, Cultural and Social Services:
Open space acres maintained 3,015 3,015 3,015 3,420 3,420 3,510 3,510 3,510 3,510 3,510
Open space easement acres 2,479 2,482 3,139 3,161 161 3,200 3,200 3,200 3,200 3,200
Trail mileage 35 35 38 40 40 45 47 49 49 52
Total golf rounds played 45,635 40,216 42,438 34,376 32,228 34,699 33,067 34,766 33,674 30,572
Acres of park landscape maintained 157 157 157 157 157 157 157 157 157 157
Trees in City jurisdiction 18,600 18,600 18,600 17,779 18,700 18,700 18,700 18,700 19,000 20,000
Children's services enrollment totals 811 920 816 900 1,664 1,755 1,605 2,338 2,360 2,115
Triathlon:
participants, spectators and volunteers 4,800 6,470 6,600 6,700 5,400 6,000 6,525 6,000 5,500 5,200
Annual senior attendance (total)14,900 13,915 14,576 14,250 14,500 14,000 14,200 ***
Facility permits processed 2,020 1,645 1,273 1,971 1,806 1,803 1,269 1,416 836 1,305
Annual aquatics attendance (total)49,174 55,691 61,264 60,052 56,676 56,042 67,000 73,903 83,107 68,403
Adult athletic teams registered 229 235 229 255 245 320 325 338 320 325
Youth athletic participants registered 1,065 1,500 1,625 1,650 1,320 1,400 1,300 1,200 1,350 1,300
Special event applications processed 50 55 53 57 68 78 84 103 103 77
Banner permits processed 75 62 71 65 72 86 76 82 47 87
Instructional class enrollments 1,539 1,905 2,017 1,837 1,628 1,400 1,308 1,424 1,751 1,151
163
Schedule 23
City of San Luis Obispo, California
Operating Indicators and Capital Asset Statistics by Function, continued
Last Ten Fiscal Years
For the Fiscal Year Ended June 30
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Function/Program:
Community Development:
Housing characteristics:
Single family units 10,691 10,729 10,793 10,808 10,951 10,969 10,994 11,133 11,230
2-4 units 2,253 2,337 2,337 2,350 2,634 2,650 2,656 2,692 2,695
5 or more unit structures 5,656 5,654 5,654 5,702 5,596 5,596 5,647 5,767 5,804
Mobile homes 1,502 1,502 1,534 1,534 1,482 1,482 1,482 1,482 1,482
Total 20,102 20,222 20,318 20,394 - 20,663 20,697 20,779 21,074 21,211
Housing units (replaces above categories)20,578
Households (replaces above categories)1,361
Building permits issued (Note 1):601 544 475 438 442 463 566 511 597 584
Residential:
Single family residential (Note 2)31 25 28 16 7 13 48 59 114 97
Multi-family residential 16 19 5 5 3 10 6 8 32 5
Non-residential 31 19 4 1 7 5 7 9 27 13
Other permits:
Additions, alternations, demolitions (Note 4)523 498 454 416 499 459 530 458 460 522
Other improvements
Total 601 561 491 438 516 487 591 534 1,230 637
Approximate value of building permits (in thousands)
Residential:
Single family residential 6,521$ 6,172$ 6,800$ 4,424$ 6,085$ 3,278$ 15,698$ 15,412$ 36,722$ 26,441$
Multi-family residential 9,592 11,843 4,286 2,528 926 3,847 1,560 6,744 26,499 13,500
Non-residential 15,209 20,340 10,482 525 16,608 5,142 1,935 15,310 9,791 11,484
Other permits:
Additions, alternations, demolitions (Note 4)17,689 21,741 21,080 26,464 15,948 16,589 20,761 19,139 22,897 30,320
Other improvements
Total 49,011$ 60,096$ 42,648$ 33,941$ 39,567$ 28,856$ 39,954$ 56,605$ 95,909$ 81,745$
Building inspections conducted 8,888 8,477 10,371 8,359 10,210 13,685 10,543 8,996 6,641 7,195
Home occupation permits processed 151 149 175 146 126 117 142 129 113 163
Development permit applications received 323 286 223 194 172 148 217 311 293 253
164
Schedule 23
City of San Luis Obispo, California
Operating Indicators and Capital Asset Statistics by Function, continued
Last Ten Fiscal Years
For the Fiscal Year Ended June 30
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Function/Program:
General Government:
Business tax certificates issued:
Located outside city limits 1,555 1,452 1,487 1,548 1,569 1,670 1,670 1,472 1602 2018
Total certificates issued 7,190 7,297 7,458 7,090 6,873 7,086 7,086 6,934 7805 7597
Human resources recruitments (total)68 96 46 46 42 59 91 105 129 103
Fleet vehicles maintained 200 241 280 301
City-wide fleet & equipment assets 290 290 290 290 300 318
Replaces prior category
Telephone lines managed 740 800 925 1,003 1,003 1,024 981 995 1037 1005
Cell phones supported****240 260 343 348 351 338 344 383 460 453
IT users supported 450 450 450 450 450 498 498 490 511 515
* Data Not Available
** Data from California Department of Justice based on calendar year
*** Data is based on calendar year
**** Includes cellular modems (70) (90 for 11-12)
***** The 2013-14 amount now includes recycled waterline.
Notes: Some workload indicators are projections.
1. Excludes special permits such as plumbing, mechanical, electrical, signs, and grading as well as plan check permits.
2. Condominiums are included with single family residential.
3. Swimming pools are included with additions, alterations and demolitions.
4. In Fiscal year 2010-11, numbers reported used observed code from Spillman rather than condition code.
Source: City of San Luis Obispo Departments
165
Schedule 24
City of San Luis Obispo, California
Water System
Statistical Data
For the Fiscal Year Ended June 30
Fiscal Historic Increase/Sales Increase/Deliveries Increase/
Year Connections (Decrease)Revenues (Decrease)In Acre Feet (Decrease)
2006-07 *14,260 -1.14%9,692,549$ 14.81%6,986 7%
2007-08 14,380 0.84%10,950,284 12.98%6,988 0%
2008-09 14,493 0.79%12,447,592 13.67%6,320 -10%
2009-10 14,875 2.64%13,025,900 4.65%5,612 -11%
2010-11 14,777 -0.66%13,302,800 2.13%5,909 5%
2011-12 14,537 -1.62%15,291,008 14.95%5,999 2%
2012-13 14,758 1.52%16,163,012 5.70%5,823 -3%
2013-14 14,899 0.01%18,398,901 13.83%5,933 2%
2014-15 14,847 0.01%17,530,717 -4.72%5,354 -10%
2015-16 15,167 1.40%17,939,024 2.33%4,957 -7%
Source: City of San Luis Obispo Utilities Department.
* Sales revenues amounts were reviewed in FY 2014-15 and updated to reflect actual values beginning with
fiscal year 2006-07.
166
Schedule 25
City of San Luis Obispo, California
Water and Sewer Rates
Last Ten Fiscal Years
For the Fiscal Year Ended June 30
As of Monthly Single family Multi-family dwelling
June 30 of Each Year Consumption Price per hcf*dwelling Commercial
2007 0-5 hcf $3.28 $35.56 $28.01 $35.56
6-25 hcf $4.11 plus $4.29 per ccf over 5 ccf
26 + hcf (note 2)$5.14
2008 0-5 hcf $3.71 $5.00 min. charge per $5.00 min. charge per $5.00 min. charge per
6-25 hcf $4.64 dwelling unit account account
26 + hcf (note 2)$5.81 $5.05/unit volume charge**$5.05/unit volume charge**$5.05/unit volume charge
2009 0-5 hcf $4.19 $5.50 min. charge per $5.50 min. charge per $5.50 min. charge per
6-25 hcf $5.24 dwelling unit account account
26 + hcf (note 2)$6.57 $5.56/unit volume charge**$5.56/unit volume charge**$5.56/unit volume charge
2010 0-5 hcf $4.69 $6.00 min. charge per $6.00 min. charge per $6.00 min. charge per
6-25 hcf $5.87 dwelling unit account account
26 + hcf (note 2)$7.36 $6.63/unit volume charge **$6.63/unit volume charge**$6.63/unit volume charge
2011 0-5 hcf $5.21 $6.55 min. charge per $6.55 min. charge per $6.55 min. charge per
6-25 hcf $6.52 dwelling unit account account
26 + hcf (note 2)$8.17 $7.22/unit volume charge **$7.22/unit volume charge **$7.22/unit volume charge **
2012 0-5 hcf $5.73 $7.01 min. charge per $7.01 min. charge per $7.01 min. charge per
6-25 hcf $7.17 dwelling unit account account
26 + hcf (note 2)$8.99 $7.73/unit volume charge **$7.73/unit volume charge **
2013 Base Fee $5.00 $7.73 min. charge per $7.73 min. charge per $7.73 min. charge per
0-8 hcf $6.56 dwelling unit account account
8 + hcf $8.20 $8.52/unit volume charge **$8.52/unit volume charge **$8.52/unit volume charge **
2014 Base Fee $5.28 $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**
Sewer Rates (Monthly)Water Rates (Note 1)
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Schedule 25
City of San Luis Obispo, California
Water and Sewer Rates, continued
Last Ten Fiscal Years
For the Fiscal Year Ended June 30
As of Monthly Single family Multi-family dwelling
June 30 of Each Year Consumption Price per hcf*dwelling Commercial
Sewer Rates (Monthly)Water Rates (Note 1)
2015 Base Fee $9.98 $8.32 min. charge per $8.32 min. charge per $8.32 min. charge per
1-8 hcf 6.92 dwelling unit dwelling unit dwelling unit
8 + hcf 8.65 $9.17/unit volume charge**$9.17/unit volume charge**$9.17/unit volume charge**
2016 Base Fee $9.98 $8.57 min. charge per $8.57 min. charge per $8.57 min. charge per
Base Fee Drought Surcharge 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 1.1
9 + hcf 8.65
Drought Surcharge 1.37
*hcf = 100 cubic feet
** Total monthly volume charge capped based on average winter water consumption.
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
168
Schedule 26
City of San Luis Obispo, California
Water System
Ten Largest Water Users
Fiscal Year Ended June 30, 2016
Service Water Use Percent of
Name Type (acre-feet)Total
Silver City Mobile Home Park Mobile Homes 45.33 14.7%
Sierra Vista Hospital Care Facilities 40.30 13.1%
City of San Luis Obispo Parks Landscape 34.58 11.2%
Mustang Village, LLC Apartments 32.10 10.4%
Creekside Community Mobile Homes 28.31 9.2%
Embassy Suites Hotel 26.94 8.7%
Irish Hills Hamlet Apartments 26.64 8.6%
Laguna Lake Mobile Homes 25.85 8.4%
The Valencia Apartments Apartments 24.57 8.0%
Chumash Village Mobile Homes 23.69 7.7%
Total 308.31 100.00%
Source: City of San Luis Obispo - Utilities Department
169