HomeMy WebLinkAboutCouncil Reading File - City of SLO 2017 CAFR
COMPREHENSIVE ANNUAL FINANCIAL REPORT
Fiscal Year Ended June 30, 2017
HEIDI HARMON, MAYOR
CARLYN CHRISTIANSON, VICE MAYOR
DAN RIVOIRE, COUNCIL MEMBER
AARON GOMEZ, COUNCIL MEMBER
ANDY PEASE, COUNCIL MEMBER
DEREK JOHNSON, CITY MANAGER
Prepared by the Department of Finance
Xenia Bradford, Finance Director
Rico Pardo, Accounting Manager/Controller
Traci Kawaguchi, Accountant
Tavy Garcia, Contract Accountant
City of San Luis Obispo, California
www.slocity.org
INTRODUCTORY SECTION
i
City of San Luis Obispo, California
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2017
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 xiii
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
ii
City of San Luis Obispo, California
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2017
Table of Contents
Page 2
Page
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 36-86
iii
City of San Luis Obispo, California
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2017
Table of Contents
Page 3
Page
Required Supplementary Information Section
Budgetary Comparison Schedule – General Fund 88-93
Schedule of Funding Progress for Other Post-Employment Benefits (OPEB) 94
Schedule of the Changes in the Net Pension Liability and Related Ratios – Miscellaneous
Agent Multiple – Employer Plan 95
Schedule of the Plan Contributions – Miscellaneous Agent Multiple – Employer Plan 96
Schedule of the City’s Proportionate Share of the Net Pension Liability – Safety Cost-Sharing Plans 97
Schedule of the City’s Contributions – Safety Cost-Sharing Plans. 98
Notes to Required Supplementary Information 99-101
Other Supplementary Information and Combining and Individual Fund Statements and Schedules
Half Percent Sales Tax Measure Funding Schedule 103-105
Nonmajor Governmental Funds 106-109
Combing Balance Sheet – Nonmajor Governmental Funds 110-113
Combining Statement of Revenues, Expenditures and Changes in Fund Balance
- Nonmajor Governmental Funds 114-117
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual:
Downtown Business Improvement District Fund 118
Transportation Development Act (TDA) Fund 119
Tourism Business Improvement District Fund 120
Gas Tax Fund 121
Community Development Block Grant (CDBG) Fund 122
Law Enforcement Grants Fund 123
Public Art Contributions Fund 124
iv
City of San Luis Obispo, California
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2017
Table of Contents
Page 4
Page
Agency Funds 125
Combining Statement of Changes in Assets and Liabilities – Agency Funds 126-130
Statistical Section
Statistical Section – Overview (Unaudited) 132
Financial Trends:
Net Positions by Component – Last Ten Fiscal Years 133
Changes in Net Position – Last Ten Fiscal Years 134-136
Governmental Activities Tax and Franchise Revenues by Source – Last Ten Fiscal Years 137
Fund Balances of Governmental Funds – Last Ten Fiscal Years 138-139
Revenues, Expenditures and Changes in Fund Balances of Governmental Funds
- Last Ten Fiscal Years 140-142
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 149-150
Schedule of Business Tax Certificates Issued 151
v
City of San Luis Obispo, California
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2017
Table of Content
Page 5
Page
Debt Capacity:
Per Capital Outstanding Debt by Type – Last Ten Fiscal Years 152
Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt per Capita
- Last Ten Fiscal Years 153
Direct and Overlapping Long-Term Debt – Fiscal Year Ended June 30, 2017 154-155
Computation of Legal Debt Margins – Last Ten Fiscal Years 156
Revenue Bond Coverage:
Water Fund – Last Ten Fiscal Years 157
Parking Fund – Last Ten Fiscal Years 158
Demographic and Economic Information:
Demographic and Economic Statistics – Last Ten Fiscal Years 159
Principal Employers – Current Year and Nine Years Ago 160
Regular Authorized Positions – Last Ten Fiscal Years 161
Operating Information:
Operating Indicators and Capital Asset Statistics by Function – Last Ten Fiscal Years 162-166
Water System Statistical Data 167
Water and Sewer Rates – Last Ten Fiscal Years 168-169
Water System Ten Largest Users – Fiscal Year Ended June 30, 2017 170
City of San Luis Obispo, Finance and Information Technology, 990 Palm Street, San Luis Obispo, CA, 93401‐3249, 805.781.7130,
slocity.org
vi
December 20, 2017
TO: The Honorable Mayor and Members of the City Council and Citizens of the City of San Luis
Obispo
FROM: Derek Johnson, City Manager
Xenia Bradford, Finance Director
SUBJECT: TRANSMITTAL MEMORANDUM FOR COMPREHENSIVE ANNUAL FINANCIAL
REPORT FOR FISCAL YEAR 2016-17
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, 2017. 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, 2017 are free of material misstatement. The independent audit
involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements;
assessing the overall accounting principles used and significant estimates1 made by management; and evaluating
the overall financial statement presentation.
1 Significant estimates included in the financial statements are made in conformity with GAAP.
TRANSMITTAL MEMORANDUM
vii
The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an
unmodified opinion2 that the City’s financial statements for the fiscal year ended June 30, 2017 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.
Additionally, these reports will be presented to the City Council concurrent with the CAFR.
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; 1) Management’s Discussion and
Analysis; 2) the basic financial statements including the Government-Wide Financial Statements, 3) Fund
Financial Statements, and 4) Notes to the Financial Statements; 5) Required Supplementary Information; and
additional supplementary statements and schedules including the local half-percent sales tax, non-major
governmental funds and agency funds.
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 unmodified 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.
TRANSMITTAL MEMORANDUM
viii
PROFILE OF THE CITY OF SAN LUIS OBISPO
With a population of approximately 46,700, 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
TRANSMITTAL MEMORANDUM
ix
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.
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. Quarterly financial reports are posted on-line,
and formal financial status updates are held with Council every six months (Mid-Year Review).
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 2016-17. 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 2016-17.
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.
TRANSMITTAL MEMORANDUM
x
Employment. Employment in the San Luis Obispo County region has historically been stabilized by a large
government presence and diversity. As noted above, the State has a major university, correctional facility and
other regional offices located in the community. The County government and school districts are also major
employers. Other major employers include 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 Nuclear
Power Plan presents some uncertainties and adjustment for the region over the next couple of decades as the
process takes place.
In calendar year 2016, as measured by the labor market, local economic health is quite good. San Luis Obispo
County continues to reach record employment levels virtually each month. For all of 2016, total nonfarm
employment in San Luis Obispo County increased 1.5% over 2015. This was lower than the 2.7% pace of job
creation statewide but on a par with County job growth in 2015. The industries leading the job gains in the region
were Leisure and Hospitality and Education and Health, sectors associated with an expanding economy, and a
growing population and subsequent spending base.
Key Revenue Sources. As the commercial, governmental, and cultural hub of San Luis Obispo County, the City
is blessed with a diverse array of strong revenue sources. The top three revenue sources for the City are Sales
Tax, Property Tax, and Transient Occupancy Tax (TOT).
Long-Term Financial Planning.
The City engages in a number of activities focused on long-term financial planning, including:
Long-Term Fiscal Forecast. Before the two-year budget process begins, the City Council reviews long-term
fiscal forecasts for the General Fund and the Enterprise Funds to help set the stage for long-term decision-
making. The purpose of the forecasts is to facilitate long-term fiscal health and identify the funds’ ability – on
an order of magnitude basis – to continue current services, maintain existing assets and fund new initiatives or
acquire new capital assets. The 2017-22 forecast was completed in early December 2016, before the City Council
considered the 2017-19 Financial Plan for adoption. Due to the California Public Employees’ Retirement System
(CalPERS) policy changes and rapidly increasing required payments to pay down pension unfunded liabilities,
a ten-year forecast was developed as part of the City’s Fiscal Sustainability and Responsibility Major City Goal.
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 April 2018, which will inform the City’s Fiscal Health Response Plan to address paying down
pension unfunded liabilities.
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 four major City goals and one other important objectives adopted by the
Council as part of the 2017-19 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 progress reports will be
presented to the City Council in February 2018.
TRANSMITTAL MEMORANDUM
xi
Major City Goals:
• Housing. Facilitate increased production of all housing types designed to be economically accessible
to the area workforce and low and very low-income residents, through increased density and proximity
to transportation corridors in alignment with the Climate Action Plan.
• Multi-Modal Transportation. Prioritize implementation of the Bicycle Master Plan, pedestrian safety,
and the Short-Range Transit Plan.
• Climate Action. Implement the Climate Action Plan, assess requirements to achieve a “net-zero carbon
City” target, and implement cost-effective measures, including implementation of a Sustainability
Coordinator and formation of a Green Team.
• Fiscal Sustainability & Responsibility. Continue to implement the City’s Fiscal Responsibility
Philosophy with a focus on economic development and responsiveness, unfunded liabilities, and
infrastructure financing.
Other Important Objectives:
• Downtown Vitality. Continue to improve safety, infrastructure investment, and maintenance in
Downtown and support the Downtown Association’s proposal to consider a Downtown improvement
district.
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 decreased by $3.13 million to $26.5 million. Of this amount, $3.2 million are
non-expendable and represent prepaid items; $128,102 are restricted for Debt service; $9.4 million is committed
for General government programs; $11.0 million is assigned and includes $10.9 million for the 20% operating
reserve (Contingency Fund), $41,110 for Development Services, and $100,000 for City Attorney. Finally, $2.7
million is classified as unassigned at 2016-17 fiscal year end; however, the fund balance available for
appropriation is $5.89 million due to insurance premium payments for the 2017-18 fiscal year prepaid in 2016-
17 and reflected as an asset in the financial statements. Per City Council direction, and in conjunction with
adopted Council policies, staff will provide a recommendation for the use of any available fund balance for one-
time allocations with the 2017-18 Mid-Year report.
TRANSMITTAL MEMORANDUM
xii
Nonspendable 3,173,248$
Restricted for:
Debt service 128,102
Committed to:
General government programs 9,428,034
Assigned to:
Contingency fund (20% Minimum reserve)10,902,368
Development services 41,110
City Attorney 100,000
Unassigned 2,723,292
Total fund balance 26,496,154$
General Fund - Fund Balance June 30, 2017
For the Future: Continue to Focus on Sustainability and Long Term Fiscal Health
Through the adoption of the 2017-19 Financial Plan, the City Council adopted the Fiscal Sustainability and
Responsibility Major City Goal to address long-term fiscal health. In response to the policy actions taken by
CalPERS, the City is developing a Fiscal Health Response Plan to address the rapidly rising pension costs and
to address pension unfunded liabilities. The Fiscal Health Response Plan will be presented to the Council in
April 2018, presenting a plan to close the projected budget gap and to accelerate paying down unfunded
liabilities.
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. 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 showing 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 40% 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. As of June 30, 2017, $2.75 million has been paid toward the pension
unfunded 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.” As part of the Fiscal Sustainability and Responsibility Major City
Goal, the City will be reviewing a 10-year Capital Improvement Program projection and the Council will be
presented with funding recommendations in April 2018. Capital Improvement Program allocations were funded
fully by the Local Revenue Measure half-cent sales tax. Approximately 70% of the Local Revenue Measure sales
tax is committed to the Capital Improvement Program.
TRANSMITTAL MEMORANDUM
xiii
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 2016-17.
Total Half Percent Sales Tax Measure G expenditures during 2016-17 were $12.3 million (including
encumbrances and carryovers); the remaining balances of these resources are designated for future year
expenditures. A more detailed schedule of Half Percent Sales Tax Measure sources and uses is provided in the
Financial Section of this report.
Operating Capital
Programs Projects* Total
Preservation of Essential Services
Public Safety 735,840$ 727,920$ 1,463,760$
Community Development 226,895 226,895
Public Works 1,049,972 2,445,690 3,495,662
Parks 114,116 631,295 745,411
Total Preservation of Essential Services 2,126,823 3,804,905 5,931,728
Completed Projects 4,491 4,491
Octagon Barn Facility 17,965 17,965
Laguna Lake Dredge/Mgt 114,045 114,045
Open Space Protection 139,143 139,143
Capital Programs - 275,644 275,644
Total 2,126,823$ 4,080,549$ 6,207,372$
Half Percent Sale Tax Measure Revenues & Uses Summary
Revenues:
Sales and use tax - Measure G 1/2 Cent add-on tax 7,331,660$
Use of money and property 44,796
Total Revenues 7,376,456
Uses:
Operating Programs (2,126,823)
Capital Projects (4,080,549)
Total Uses (6,207,372)
Excess of revenues over expenditures 1,169,084
Prior Sales Tax Measure Balance 4,732,397
Encumbered or designated for carryover for future year expenditures (6,138,984)
Net available for future year appropriations (237,503)$
Half Percent Sales Tax Measure Expenditures
2016-17
* Detail of Capital Projects is included with other supplementary information in the financial statements, which
can be found on page 103.
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 2016-17.
TRANSMITTAL MEMORANDUM
xiv
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 benefits such as lower debt service payments 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 2016) 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.
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 robust fiscal management and recovered quickly from the Great Recession.
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 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 and Information Technology Replacement Funds to provide for
the timely replacement of vehicles and equipment as well as IT equipment and software.
TRANSMITTAL MEMORANDUM
xv
Long-Term Liabilities and Maintenance of Infrastructure
In 2015, the City Council adopted a guidance to apply one-time funds above policy reserve to unfunded liabilities
and infrastructure. This policy addresses long-term costs and prioritizes allocation of funds to reduce the costs.
With the 2017-19 Financial Plan, the guidance was incorporated into the City’s fiscal policies.
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 a 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.
While the implementation of 2nd and 3rd Tiers will help to lessen pension impacts to the City’s budget, the City
continues to monitor legal developments and legislation that could positively or negatively impact the City’s
finances.
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 five 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.
TRANSMITTAL MEMORANDUM
xvi
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 2016-2017, 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 2016-17 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 throughout 2016-17 fiscal year.
The City continued to complete the work programs established by the adopted 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.
With the announcement by CalPERS in December of 2016, to lower the discount rate from 7.5% to 7.0%, the
City immediately responded by placing info effect a Fiscal Health Contingency Plan that required analysis of
the long-term fiscal forecast as well as immediate hiring chill and higher level of control and authorization on
expenditures.
With the 2017-19 Financial Plan, the Council adopted a Fiscal Sustainability and Responsibility Major City Goal
with a focus on economic development and responsiveness, structurally balanced fiscal outlook, unfunded
liabilities, and infrastructure financing.
Monitoring of the City’s Fiscal Condition.
The Council adopted the prioritization for the use of one-time funds above the policy reserve as a standing fiscal
and budget policy with the 2017-19 Financial Plan. Per policy, one-time funds above policy reserves are
prioritized to pay down unfunded liabilities and to invest in infrastructure.
With the past two Financial Plans, the Council continued to make a priority to pay down unfunded liabilities. 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 the pension unfunded liability, and $250,000
toward the OPEB unfunded liability.
TRANSMITTAL MEMORANDUM
xvii
With the 2016-17 Supplemental Budget, the Council adopted the 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 pension reporting that is required by Governmental Accounting Standards Board
(GASB) Statement No. 68, the impact was significant, however, the City maintained and continues to have a
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.
With the 2017-19 Financial Plan, the City incorporated the CalPERS required contributions to pay down
unfunded liabilities into long-term forecasts and the Council adopted the Fiscal Sustainability and Responsibility
Major City Goal focusing on long-term fiscal health. In April 2018, the Council will be presented with a Fiscal
Health Response Plan to close identified budget gaps.
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.
The planned closure of Diablo Canyon Nuclear Power Plant will drive a study of the economic and fiscal impacts
on the region and the City, an updated Economic Development Strategic Plan with identified strategies to address
impacts of the closure, and a comprehensive plan of how to invest pending closure settlement funds in economic
development activities. Key revenue sources (property, sales, and Transient Occupancy Tax (TOT)) will receive
continued focus.
TRANSMITTAL MEMORANDUM
xviii
Downtown Development Projects
The Downtown Vitality Other Important Objective sets initiatives to be completed during the 2017-19 Financial
Plan to 1) maintain and improve Downtown infrastructure, 2) maintain and improve public safety in Downtown,
3) develop implementation plan for adopted Downtown Concept and Mission Plaza Master Plans, and 4) develop
a policy framework to ensure the continued vitality and success of Downtown which includes consideration of
the Downtown Improvement District. On June 20, 2017 $75,000 was allocated to a feasibility study to support
the Downtown Maintenance District with the 2017-19 Financial Plan.
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, 2016.
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.
xx
DIRECTORY OF OFFICIALS AND ADVISORY BODIES
CITY COUNCIL
Heidi Harmon Mayor
Carlyn Christianson Vice Mayor
Dan Rivoire Council Member
Aaron Gomez Council Member
Andy Pease 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
Derek Johnson City Manager
J. Christine Dietrick City Attorney
Department Heads
Greg Hermann Acting Assistant City Manager
Michael Codron Director of Community Development
Xenia Bradford Director of Finance
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
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
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of San Luis Obispo
California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2016
Executive Director/CEO
xxv
I
FINANCIAL SECTION
G GLENN BURDETTE
CERTIFIED PUBLIC ACCOUNTANTS
Independent Auditors' Report
The Honorable City Council of the
City of City of San Luis Obispo, California
San Luis Obispo, California
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities , the business-type activities , each
major fund , and the aggregate remaining fund information of the City of San Luis Obispo, California, (the City) as of and
for the year ended June 30 , 2017 , and the related notes to the financial statements, which collectively comprise the City's
basic financial statements as listed in the table of contents .
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with
accounting principles generally accepted in the United States of America; this includes the design , implementation, and
maintenance of internal contra I relevant to the preparation and fair presentation of financial statements that are free from
material misstatement, whether due to fraud or error.
Auditors' Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with auditing standards generally accepted in the United States of America and the standards applicable to
financial audits contained in Government Auditing Standards , issued by the Comptroller General of the United States .
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements . The procedures selected depend on the auditor 's judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. Tn making those risk assessments, the auditor
considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements .
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions .
GLENNBURDETTE.COM
SAN LUIS OBISPO
1150 Palm Street
San Luis Obispo, CA 93401
p 805 544 1441
1 8055444351
PASO ROBLES
102 South Vine Street, Ste. A
Paso Robles, CA 93445
p 805 23? 3995
f 805 239 9332
SANTA MAR IA
2222 Sou th Broadwa~. Ste. A
Santa Maria , CA 93454
p BOS 922 4010
f 805 922 4285
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, 2017, 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 103 through 105, combining and individual nonmajor fund financial statements and schedules on pages 110
through 130, 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, 2017, 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 20, 2017
4
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, 2017. It should be read in conjunction with the accompanying transmittal
memorandum and the basic financial statements.
Financial Highlights
In 2016-17 fiscal year, the City continued to experience a slow but steady economic growth. Actual revenues received
were in-line with the budget and the City’s expenditures were under budget.
In December 2016, the California Public Employees Retirement System (CalPERS) announced policy changes
lowering the expected rate of return from 7.5% to 7.0%. The City immediately responded to the policy change by
implementing an expenditure containment strategy. The policy change will result in significant impacts to the actuarial
reports and unfunded liabilities. The City is developing budgetary actions to address long-term fiscal health as part of
the 2018-19 Supplemental Budget development.
A significant impact to the City of implementing GASB Statement No. 68 (GASB 68), Accounting and Financial
Reporting for Pensions, in fiscal year 2014-15 is the reporting of the City’s unfunded pension liability on the full
accrual basis of accounting on the government-wide financial statements. There are also note disclosure requirements
and supplementary schedules required by GASB 68. The measurement date for the fiscal year 2016-17 pension
liabilities is as of the fiscal year ended June 30, 2016. 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 2016‐17 are reported as deferred outflows of resources in accordance with GASB Statement No. 71.
The following outlines financial highlights for the year, which are detailed in the table on page 8 of the Management
Discussion and Analysis.
• The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows at June 30,
2017 by $313 million (net position). The City’s unrestricted net position was negatively impacted beginning in
fiscal year 2014-15 with the implementation of GASB 68. 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 $6.8 million or 1.3%. In governmental activities, amounts
receivable from various sources decreased by $3.0 million; cash and investment balances increased by $2.8
million; prepaid expenses increased by $3.2 million and cash held with fiscal agent decreased by $491,000.
• In business-type activities, amounts receivable decreased by $1.3 million or 15.2% while cash and investment
balances increased by $4.5 million or 7.7%. City-wide liabilities increased by approximately $12.0 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 68 in fiscal year 2014-15. Governmental activities experienced an increase of
$12.5 million due primarily to the increase in the net pension liability of $13.7 million and a decrease in long-
term liabilities of $1.6 million. Business-type activities saw a decrease in long-term liabilities of $3.0 million
and an increase in net pension liability of $2.4 million.
5
Management’s Discussion and Analysis
• The City’s governmental funds altogether reported combined ending fund balances of $52.6 million.
Approximately $49.8 million or 95% 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, $17.8 million is assigned as of June 30, 2017 to meet expenditures in subsequent years in the form of
purchase order encumbrances and unspent appropriations that have been rolled over into fiscal year 2017-18 in
accordance with the City’s budget policies.
• The total General Fund balance decreased by $3.1 million to $26.5 million. This reflects a prepayment of liability
and worker’s compensation insurance for fiscal year 2017-18. After the adjustments to reflect amounts committed
to the Half Percent Sales Tax Measure reserve ($6.1 million); debt service and prepaid expenses reserve ($3.2
million); purchase encumbrances and other future expenses ($3.3 million); designated reserves for development
services ($41,000); and the amount required to be maintained to meet the 20% minimum reserve requirement
($10.9 million), which excludes a $4.0 million payment to CalPERS for unfunded liability, $3.0 million remains
as unassigned balance at June 30, 2017.
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 resources
and liabilities/deferred inflows of resources, 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 2016-17 includes pension liabilities required
under GASB 68. This means that disclosed pension liabilities must be included in the City’s Statement of Net Position
and has decreased the City’s net financial 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).
6
Management’s Discussion and Analysis
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.
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 is
considered to be a major fund. 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
7
Management’s Discussion and Analysis
information for non-major governmental funds with annual budgets has been provided with the fund financial
statements in the supplementary information section in this report.
Proprietary Funds. Proprietary funds are generally used to account for services for which the City charges customers;
either outside customers or internal units/divisions of the City. Proprietary funds provide the same type of information
as shown in the government-wide financial statements, only in more detail.
The only type of proprietary fund the City maintains is enterprise funds. The Water, Sewer, Parking and Transit Funds
are presented as business-type activities in the government-wide financial statements. The City considers all four of
its enterprise funds to be major funds.
Fiduciary Funds. 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.
8
Management’s Discussion and Analysis
Government-wide Overall Financial Analysis
Statement of Net Position Net position may serve over time as useful indicator of a government’s financial position.
The following is the condensed statement of net position for the fiscal years ended June 30, 2017 and 2016.
CONDENSED STATEMENT OF NET POSITION
2016-17 2015-16 2016-17 2015-16 2016-17 2015-16
Current and other assets 58,833,313$ 56,114,955$ 79,361,347$ 76,077,990$ 138,194,660$ 132,192,945$
Capital assets 193,327,618 192,587,660 179,138,958 179,110,936 372,466,576 371,698,596
Total assets 252,160,931 248,702,615 258,500,305 255,188,926 510,661,236 503,891,541
Total Deferred Outflows of
Resources 30,018,740 16,760,309 5,160,991 3,241,231 35,179,731 20,001,540
Current liabilities 9,131,747 8,730,861 6,432,263 6,373,450 15,564,010 15,104,311
Noncurrent liabilities 140,534,318 128,476,670 68,286,279 68,826,211 208,820,597 197,302,881
Total liabilities 149,666,065 137,207,531 74,718,542 75,199,661 224,384,607 212,407,192
Total Deferred Inflows of
Resources 6,641,523 11,074,907 2,095,610 3,066,273 8,737,133 14,141,180
Net position:
Net investment in capital
assets 165,100,426 163,449,992 131,149,516 128,390,611 296,249,942 291,840,603
Restricted 2,268,499 2,762,387 2,276,526 2,278,392 4,545,025 5,040,779
Unrestricted (41,496,842) (49,031,893) 53,421,102 49,495,220 11,924,260 463,327
Total Net Position 125,872,083$ 117,180,486$ 186,847,144$ 180,164,223$ 312,719,227$ 297,344,709$
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 $313 million at June 30, 2017. The largest portion of the City’s net position reflects its investment in
capital assets in the amount of $296.2 million (e.g. land, buildings infrastructure, machinery, and equipment), less any
related outstanding debt used to acquire those assets. The City uses these capital assets to provide services to citizens;
consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is
reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from
other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
9
Management’s Discussion and Analysis
Information about changes in net position for fiscal years 2016-17 and 2015-16 is summarized below. Reasons for the
changes are discussed in the following sections for governmental activities and business-type activities.
2016-17 2015-16 2016-17 2015-16 2016-17 2015-16
Revenues:
Program Revenues:
Charges for services* 15,210,358$ 13,389,217$ 41,786,730$ 44,413,190$ 56,997,088$ 57,802,407$
Operating grants and contributions* 2,488,706 2,667,058 4,180,386 2,888,820 6,669,092 5,555,878
Capital grants and contributions 40,531 9,355,707 40,531 9,355,707
General Revenues:
Sales taxes (Including 1/2 percent local Sales Tax) 24,068,665 24,676,377 24,068,665 24,676,377
Property taxes 10,756,477 10,186,858 10,756,477 10,186,858
Transient occupancy tax 7,381,989 7,127,756 7,381,989 7,127,756
Utility users tax 5,539,407 5,413,720 5,539,407 5,413,720
Property tax in lieu of VLF 4,353,912 4,113,244 4,353,912 4,113,244
Other taxes and fees 3,929,377 4,029,438 3,929,377 4,029,438
Investment earnings 260,169 825,760 182,261 845,906 442,430 1,671,666
Miscellaneous and other 737,826 771,154 206,700 239,200 944,526 1,010,354
Total revenues 74,767,417 82,556,289 46,356,077 48,387,116 121,123,494 130,943,405
Program expenses:
Public safety 31,806,692 29,318,821 31,806,692 29,318,821
Public utilities 30,753,229 28,978,571 30,753,229 28,978,571
Transportation 9,668,840 8,792,028 7,868,364 7,988,475 17,537,204 16,780,503
Culture and recreation 9,824,262 9,808,545 9,824,262 9,808,545
Community development 14,656,604 12,900,275 14,656,604 12,900,275
Interest on long-term debt 1,170,984 1,351,468 1,170,984 1,351,468
Total expenses 67,127,382 62,171,137 38,621,593 36,967,046 105,748,975 99,138,183
Increase (decrease) in net position before transfers 7,640,035 20,385,152 7,734,484 11,420,070 15,374,519 31,805,222
Transfers 1,051,563 1,436,048 (1,051,563) (1,436,048) - -
Change in net position 8,691,598 21,821,200 6,682,921 9,984,022 15,374,519 31,805,222
Net position - beginning of year 117,180,486 95,359,286 180,164,223 170,180,201 297,344,709 265,539,487
Net position - end of year 125,872,084$ 117,180,486$ 186,847,144$ 180,164,223$ 312,719,228$ 297,344,709$
Governmental Activities Business-Type Activities Total
SUMMARY OF CHANGES IN NET POSITION
*Charges for services and operating grants and contributions in the current year represent the net amount after
deducting general government amounts as this activity nets to zero.
Governmental Activities. The City’s net position in the Governmental activities increased $8.7 million to $125.9
million at June 30, 2017 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 2016-17 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.
10
Management’s Discussion and Analysis
A portion of the City’s net position, $4.5 million, is subject to restrictions imposed by external parties and its use is
determined by those restrictions and contractual agreements. This is the third year of the GASB 68 Statement
implementation by the City. The governmental activities contributed roughly $8.7 million and business-type activities
contributed roughly $6.7 million for a total increase in the net position of $15.4 million compared to June 30, 2016.
The total general revenue decreased from fiscal year 2015-16 by 9%. Revenues are divided into charges for services
and general revenues in the following table. Charges for services are revenues directly related to service activity,
operating and capital grants and contributions, and related investment earnings.
General revenues represent 76% of the total revenue and are used to pay costs of providing program services.
Revenues 2016-17 2015-16 Inc / (Dec)%
Charges for services 15,210,358$ 13,389,217$ 1,821,141$ 14%
Operating grants and contributions 2,488,706 2,667,058 (178,352) -7%
Capital grants and contributions 40,531 9,355,707 (9,315,176) -100%
General Revenues:
Sales taxes (Including 1/2 percent local sales tax)24,068,665 24,676,377 (607,712) -2%
Property taxes 10,756,477 10,186,858 569,619 6%
Transient occupancy tax 7,381,989 7,127,756 254,233 4%
Utility users tax 5,539,407 5,413,720 125,687 2%
Property tax in lieu of VLF 4,353,912 4,113,244 240,668 6%
Other taxes and fees 3,929,377 4,029,438 (100,061) -2%
Investment earnings 260,169 825,760 (565,591) -68%
Miscellaneous and other 737,826 771,154 (33,328) -4%
Total governmental revenues 74,767,417$ 82,556,289$ (7,788,872)$ -9%
GOVERNMENTAL ACTIVITY CHANGE IN REVENUE
11
Management’s Discussion and Analysis
Top Governmental Activity Revenue Sources. As shown in the graph below, our top five tax revenues accounted
for almost 70% of total revenues, with service charges accounting for another 20%. Generally, revenues for fiscal
year 2016-17 decreased from those of the prior fiscal year.
Sales and use tax -general,
16,737,005
Sales and use tax -Half
Percent Sales Tax,
7,331,660
Property tax,
10,756,477
Transient occupancy tax,
7,381,989
Utility users tax,
5,539,407
Property tax in lieu of VLF,
4,353,912
Franchise taxes ,
1,557,128
Business tax,
2,372,249
Grants ,
2,624,753
Charges for services ,
15,173,707
Governmental Revenues
The following narrative addresses the significant variances in key revenues from the prior fiscal year:
• Sales Tax. Sales Tax decreased by $608,000 over the prior year. This decrease 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 $570,000 or 6%.
• Transient Occupancy Tax (TOT). Increased by $254,000 or 4% over the prior year.
• Charges for Services. These revenues increased by approximately $1.8 million over 2015-16. 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 decreased by $9.3 million as a result of the
completion of the LOVR interchange project.
• Program Expenses: Governmental Activities. Program expenses increased by $5.0 million or 8.0% over
the prior fiscal year. Police and Community Development services increased. Transportation and Parks
services also increased. An additional factor in the increase is also the net effect of the application of the
GASB 68 implementation in 2014-15.
12
Management’s Discussion and Analysis
The following chart compares program revenues and expenses which is useful when reviewing the costs of
government cost centers:
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
Expenses and Program Revenues:
Governmental Activities
Expenses Revenues
Business-Type Activities. The City’s Business-type activities increased $6.7 million to $186.8 million at June 30,
2017.
Revenue Sources: Business-Type Activities. Operating revenues for services reflect a decrease of $2.0 million or
4.2% 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 increased $315,000. General water impact fees decreased by $276,000
or 18% compared to the prior year which are collected for infrastructure to support new development.
2. Sewer charges. The overall decrease of $192,000 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 2016-17 the Parking Fund remained flat and met its revenue obligations which were
$4.7 million.
Program Expenses: Business Type Activities. The program expenses for the proprietary funds increased by $1.7
million or 4.5% 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 $1.9 million due to increases in the costs of salaries, supplies and
maintenance.
13
Management’s Discussion and Analysis
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
Water Sewer Parking Transit
Expenses and Program Revenues:
Business-Type Activities
Expenses Revenues
The chart above shows Enterprise Funds revenues versus expenditures. As shown, revenues exceeded expenditures
for all funds.
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, 2017, the City’s governmental funds reported combined ending fund balances of $52.6 million,
or an increase of $2.4 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 $3.2 million represents prepaid items.
o Restricted fund balance of $2.3 million 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 $26.6 million, which have reserves for capital outlay, impact fees
programs, general government programs, housing and the net balance of the Half Percent Local
Sales Tax.
14
Management’s Discussion and Analysis
o Assigned fund balance of $17.8 million, which includes the amounts to be used for specific purposes
of the City but do not meet the criteria to be classified as restricted or committed. Funds in this
category included Contingency funds (20% minimum reserve) and funds to be used for
Development Services.
o Unassigned fund balance of $2.7 million as of June 30, 2017.
Major Governmental Funds. In fiscal year 2016-17 there is one major governmental fund: the General Fund.
Changes in the General Fund are highlighted in the Financial Highlights section above.
Non-Major Governmental Funds. Non-major funds include 1) the Debt Service Fund, 2) the Los Osos Valley Road
Sub-Area Fee Fund, 3) the Downtown Business Improvement District Fund, 4) the Tourism Business Improvement
Fund, 5) the Gas Tax Fund, 6) the Transportation Development Act Fund, 7) the Community Development Block
Grant Fund, 8) the Law Enforcement Grants Fund 9) the Public Art Contributions Fund and 10) Transportation Impact
Fee Fund, and others. 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, 2017, these funds had an
aggregate fund balance of $26.1 million. Of this total, $19.3 million or 74% is restricted for payment of debt service
or specific future capital projects.
The remaining balance of $6.8 million is assigned for contingency reserves and expenditures in subsequent years.
More information about these aggregated non-major funds can be found in the combining and individual fund
statements and schedules immediately following the required supplementary information.
Proprietary Funds. The City’s four enterprise funds provide the same type of information found in the government-
wide financial statements, but in more detail. Highlights of the annual activity for these funds have already been
presented in the discussion of the business-type activities.
General Fund Budgetary Highlights
A detailed budgetary comparison schedule for the year ended June 30, 2017 is presented as required supplementary
information following the notes to the financial statements. The final budget amounts include changes that were
approved by the City Council through June 30, 2017.
15
Management’s Discussion and Analysis
The following summarizes the original budget compared with the adjusted final budget for fiscal year 2016-17. The
adjusted final budget includes Council approved adjustments as well as administrative budget adjustments in
accordance with the City’s adopted fiscal policies and procedures.
BUDGETARY HIGHLIGHTS
General Fund Original Budget Final Budget Positive (Negative)
Variance
Revenues 66,877,338$ 67,030,197$ 152,859$
Expenditures 61,776,357 66,231,033 4,454,676
Other sources (uses)(6,351,891) (11,249,403) (4,897,512)
Beginning fund balance 29,625,532 29,625,532 -
Ending fund balance 28,374,622$ 19,175,293$ (9,199,329)$
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
approximately $153,000 or 0.2% 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 2017.
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 $405,000, while expenditures
and other uses were below the final budget figure by $7.7 million. The net amount of other sources was less than
budgeted by $402,000. The net result of these differences leads to the ending fund balance increasing by more than
$7.3 million over the amount anticipated in the budget.
General Fund Final
Budget Actual Positive (Negative)
Variance
Revenues 67,030,197$ 67,434,696$ 404,499$
Expenditures 66,231,033 58,912,698 (7,318,335)
Other sources (uses)(11,249,403) (11,651,376) (401,973)
Beginning fund balance 29,625,532 29,625,532 -
Ending fund balance 19,175,293$ 26,496,154$ 7,320,861$
Ending fund balance
Nonspendable 3,173,248 3,173,248
Restricted 128,102 128,102
Committed 9,428,034 9,428,034
Assigned 11,043,478 11,043,478
Unassigned 2,723,292 2,723,292
Total ending fund balance 19,175,293$ 26,496,154$ 7,320,861$
BUDGET - ACTUAL COMPARISON
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, 2017, the City’s investment in capital assets for its governmental and business type activities
amounts increased to $372.5 million (net of accumulated depreciation).
The investment in capital assets includes land, park improvements, buildings and improvements, vehicles and
equipment, streets, bikeways, water, wastewater and storm drain systems.
Capital Assets (Net of Depreciation)
2017 2016 2017 2016 2017 2016
Nondepreciable capital assets 40,811,362$ 63,327,352$ 21,469,603$ 16,957,325$ 62,280,965$ 80,284,677$
Depreciable capital assets (net of
accumulated depreciation ) 152,516,256 129,260,308 157,669,355 162,153,611 310,185,611 291,413,919
Total Capital Assets 193,327,618$ 192,587,660$ 179,138,958$ 179,110,936$ 372,466,576$ 371,698,596$
TotalGovernmental
Activities
Business-Type
Activities
Major capital asset expenditures during the fiscal year include the following:
• $1.5 million for Bus Replacements
• $869,000 road way sealing projects
• 509,000 Madonna lift Station
• $450,000 Sinsheimer equipment replacement
• $248,000 Street Sweeper
• $240,000 Fire Pumper
• $297,000 Police CAD software
• $205,000 Utilities distribution System Improvements
• $955,000 Fleet Replacement
• $4.0 million from the Half Percent Sales Tax measure in multiple projects.
• $214,000 for I.T equipment replacement.
• $356,000 for facilities maintenance.
Additional information on the City’s capital assets can be found in Note 5 to the basic financial statements.
17
Management’s Discussion and Analysis
Long-Term Debt. At June 30, 2017, the City had $80.0 million in long-term debt outstanding as summarized below:
Long- Term Debt
2017 2016 2017 2016 2017 2016
Lease-revenue bonds 26,328,540$ 27,762,893$ 24,072,708$ 25,323,405$ 50,401,248$ 53,086,298$
Lease-purchase financing 1,898,652 1,374,773 1,898,652 1,374,773
Installment sale agreement 7,366,468 7,932,327 7,366,468 7,932,327
Loans 591,647 679,314 16,709,160 17,647,622 17,300,807 18,326,936
Compensated absences 2,422,614 2,551,152 653,492 682,933 3,076,106 3,234,085
31,241,453$ 32,368,132$ 48,801,828$ 51,586,287$ 80,043,281$ 83,954,419$
Activities Activities
Governmental Business-Type Total
This represents a decrease of $3.9 million or 5% compared to the prior year.
The California Government Code provides for a limit on debt secured by real property of 3.75% based on market
value. The City’s debt management policy, however, sets a lower debt limit of 2% of assessed valuation. As of
June 30, 2017, 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, 2017, 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 20, 2017, the City Council adopted the 2017-19 Financial Plan and allocated $142 million in fiscal year 2017-
18 and $203 million in fiscal year 2018-19. The significant increase in year two of the financial plan is due to planned
debt issuances in the Sewer and Parking funds. Adequate resources are available to fund the proposed 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 2017-18. 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. As approved by Council in 2015, the water base fee was increased from $9.98 to $12.33 and a 5%
increase took effect on the volumetric fee. The drought surcharge was eliminated from base fee in March 2017.
There were no increases in Sewer rates.
Parking Fund. On June 20, 2017, the City Council approved a multi-year plan, through 2020, to modify the rate
structures for fines, forfeitures, as well as the parking rates for meters, structures and most permit types.
Requests for Additional Information
This financial report is designed to provide a general overview of the City’s finances for all those with an interest in
our finances. Questions concerning any of the information provided in this report or requests for additional financial
information should be addressed to the Department of Finance, 990 Palm Street, San Luis Obispo, CA 93401.
BASIC FINANCIAL STATEMENTS
19
City of San Luis Obispo, California
Statement of Net Position
June 30, 2017
Governmental
Activities
Business-Type
Activities Total
Assets
Cash and cash equivalents 2,860,638$ 1,405,062$ 4,265,700$
Investments 41,711,834 62,056,680 103,768,514
Taxes receivable 6,294,199 6,294,199
Accounts receivable 969,674 5,470,565 6,440,239
Accrued interest receivable 142,584 205,274 347,858
Due from other governments 107,919 1,390,141 1,498,060
Prepaid items and other assets 4,003,752 5,651,099 9,654,851
Cash held by fiscal agent 2,247,713 2,276,526 4,524,239
Investment in joint venture 906,000 906,000
Net other post-employment benefit asset 495,000 495,000
Nondepreciable capital assets 40,811,362 21,469,603 62,280,965
Depreciable capital assets (net of accumulated
depreciation) 152,516,256 157,669,355 310,185,611
Total assets 252,160,931 258,500,305 510,661,236
Deferred Outflows of Resources
Pension related 30,018,740 5,002,097 35,020,837
Unamortized loss on refunding of debt 158,894 158,894
Total deferred outflows of resources 30,018,740 5,160,991 35,179,731
Liabilities
Accounts payable 2,913,261 2,544,102 5,457,363
Accrued salaries 585,370 32,191 617,561
Deposits payable 271,780 271,780
Unearned revenue 1,319,801 1,319,801
Interest payable 119,935 289,411 409,346
Other liabilities 138,921 138,921
Noncurrent liabilities:
Due within one year 4,054,459 3,294,779 7,349,238
Due in more than one year 27,186,993 45,507,049 72,694,042
Net pension liability 113,347,324 22,779,230 136,126,554
Total liabilities 149,666,064 74,718,542 224,384,606
Deferred Inflows of Resources
Pension related 6,641,523 2,095,610 8,737,133
Net Position
Net investment in capital assets 165,100,426 131,149,516 296,249,942
Restricted for:
Debt service 2,247,713 2,276,526 4,524,239
Grant program 20,786 20,786
Unrestricted (41,496,841) 53,421,102 11,924,261
Total net position 125,872,084$ 186,847,144$ 312,719,228$
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, 2017
Functions/Programs Expenses
Indirect Expense
Allocation
Charges for
Services
Operating
Grants and
Contributions
Capital Grants
and
Contributions
Governmental activities:
Public safety 26,136,561$ 5,670,132$ 1,771,383$ 898,653$ $
Transportation 7,867,673 1,801,167 1,793,010 1,075,447 40,531
Culture and recreation 8,207,599 1,616,663 3,501,837
Community development 12,494,304 2,162,300 8,144,128 514,606
General government 11,895,116 (11,250,261) 549,339 95,516
Interest on long-term debt 1,170,984
Total governmental activities 67,772,237 - 15,759,697 2,584,222 40,531
Business-type activities:
Water 19,069,967 20,180,931
Sewer 11,683,262 16,272,533
Parking 3,791,493 4,666,970
Transit 4,076,871 666,296 4,180,386
Total business-type activities 38,621,593 41,786,730 4,180,386 -
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 restatement
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
(29,136,657)$ $ (29,136,657)$
(6,759,852) (6,759,852)
(6,322,425) (6,322,425)
(5,997,870) (5,997,870)
- -
(1,170,984) (1,170,984)
(49,387,787) - (49,387,787)
1,110,964 1,110,964
4,589,271 4,589,271
875,477 875,477
769,811 769,811
- 7,345,523 7,345,523
16,737,005 16,737,005
7,331,660 7,331,660
10,756,477 10,756,477
7,381,989 7,381,989
5,539,407 5,539,407
4,353,912 4,353,912
1,557,128 1,557,128
2,372,249 2,372,249
260,169 182,261 442,430
737,826 737,826
206,700 206,700
1,051,563 (1,051,563) -
58,079,385 (662,602) 57,416,783
8,691,598 6,682,921 15,374,519
116,930,486 180,164,223 297,094,709
250,000 250,000
117,180,486 180,164,223 297,344,709
125,872,084$ 186,847,144$ 312,719,228$
Net Revenues (Expenses) and
Changes in Net Position
22
City of San Luis Obispo, California
Balance Sheet
Governmental Funds
June 30, 2017
General
Other
Governmental
Funds
Total
Governmental
Funds
Assets
Cash and cash equivalents 326,898$ 2,533,740$ 2,860,638$
Investments 19,639,015 22,072,819 41,711,834
Taxes receivable 6,294,199 6,294,199
Accounts receivable 321,204 340,141 661,345
Other receivables 308,329 308,329
Due from other governments 107,919 107,919
Due from other funds 128,102 128,102
Accrued interest receivable 77,309 65,275 142,584
Prepaid items 3,173,248 5,642 3,178,890
Cash held by fiscal agent 2,247,713 2,247,713
Total assets 30,268,304$ 27,373,249$ 57,641,553$
Liabilities and Fund Balance
Liabilities:
Accounts payable 1,843,719$ 1,069,542$ 2,913,261$
Accrued liabilities 584,679 691 585,370
Due to other funds 128,102 128,102
Unearned revenue 1,204,831 114,970 1,319,801
Other liabilities 138,921 138,921
Total liabilities 3,772,150 1,313,305 5,085,455
Fund balance:
Nonspendable 3,173,248 5,642 3,178,890
Restricted for:
Debt service 128,102 2,119,611 2,247,713
Law enforcement grant programs 20,786 20,786
Committed to:
Affordable housing programs 5,054,332 5,054,332
General government programs 9,428,034 8,795,074 18,223,108
Impact fee programs 588,743 588,743
Open space programs 2,728,883 2,728,883
Assigned to:
Contingency fund 10,902,368 900,000 11,802,368
Development services 41,110 5,846,873 5,887,983
City attorney 100,000 100,000
Unassigned 2,723,292 2,723,292
Total fund balance 26,496,154 26,059,944 52,556,098
Total liabilities and fund balance 30,268,304$ 27,373,249$ 57,641,553$
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, 2017
Total fund balance - governmental funds 52,556,098$
Capital assets at estimated historical cost 283,635,345
Accumulated depreciation (90,307,727)
193,327,618
30,018,740
824,862
495,000
Lease revenue bonds 25,803,475
Lease purchase financing 1,898,652
Compensated absences 2,422,613
Conservation loan 591,647
Bond premium 525,065
Accrued interest payable 119,935
(31,361,387)
Net pension liability is not a current financial resource and, therefore, is not reported
in the governmental funds. (113,347,324)
(6,641,523)
Total net position - governmental activities 125,872,084$
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.
Net other post-employment benefit asset is not a current financial resource and, therefore, is not
reported in governmental funds.
Deferred outflows of resources are not current asset or resources; and they are not due in the
current period and therefore are not reported in the governmental funds.
Deferred inflow of resources are not current assets or resources; and they are not due in the
current period and therefore are not reporting 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, 2017
General
Other
Governmental
Funds
Total
Governmental
Funds
Revenues:
Sales and use tax - general 16,737,005$ $ 16,737,005$
Sales and use tax - Half Percent Sales Tax 7,331,660 7,331,660
Sales tax - Prop 172 405,512 405,512
Property tax 10,756,477 10,756,477
Transient occupancy tax 7,381,989 7,381,989
Utility users tax 5,539,407 5,539,407
Property tax in lieu of VLF 4,353,912 4,353,912
Franchise taxes 1,557,128 1,557,128
Business tax 2,372,249 2,372,249
Real property transfer tax 332,314 332,314
Fines, forfeitures and penalties 139,534 139,534
Use of money and property 160,340 99,829 260,169
Subventions and grants 1,014,859 1,609,894 2,624,753
Charges for services 9,112,989 6,060,718 15,173,707
Miscellaneous 239,321 207,135 446,456
Total revenues 67,434,696 7,977,576 75,412,272
Expenditures:
Current:
General government 11,485,833 338,527 11,824,360
Public safety 27,262,887 828,860 28,091,747
Transportation 3,780,804 1,169,041 4,949,845
Leisure, cultural and social services 7,712,834 72,577 7,785,411
Community development 8,576,098 4,116,139 12,692,237
Debt service:
Principal 87,667 2,013,629 2,101,296
Interest 6,575 1,208,929 1,215,504
Capital outlay:
Public safety 1,772,454 1,772,454
Transportation 2,944,453 2,944,453
Leisure, cultural and social services 1,421,919 1,421,919
Community development 284,375 284,375
General government 89,825 89,825
Total expenditures 58,912,698 16,260,728 75,173,426
Excess (deficiency) of revenues over
(under) expenditures 8,521,998 (8,283,152) 238,846
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, 2017
Page 2
General
Other
Governmental
Funds
Total
Governmental
Funds
Other Financing Sources (Uses):
Issuance of debt $ 1,141,468$ 1,141,468$
Transfers in 2,043,830 13,695,206 15,739,036
Transfers out (13,695,206) (992,267) (14,687,473)
Total other financing sources (uses)(11,651,376) 13,844,407 2,193,031
Net change in fund balance (3,129,378) 5,561,255 2,431,877
Fund balance, beginning of year 29,625,532 20,498,689 50,124,221
Fund balance, end of year 26,496,154$ 26,059,944$ 52,556,098$
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, 2017
Total net change in fund balance - governmental funds 2,431,877$
Expenditures for capital outlay - governmental funds 6,513,026
Depreciation expense (5,765,746)
747,280
Loss on disposal of capital asset (7,322)
245,000
2,101,296
Acquisition of new financing (1,141,468)
6,207
38,313
145,642
128,539
Change in net pension liability 3,996,234
Total change in net position - governmental activities 8,691,598$
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
Changes in the net other post-employment benefit (OPEB) asset due to plan changes and
changes in actuarial assumptions
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, 2017
Water Sewer Parking Transit Totals
Assets
Current assets:
Cash and cash equivalents 382,881$ 672,491$ 312,289$ 37,401$ 1,405,062$
Investments 16,934,518 29,759,281 13,707,783 1,655,098 62,056,680
Accounts receivable 2,790,240 2,632,303 47,933 89 5,470,565
Accrued interest receivable 64,633 92,514 42,614 5,513 205,274
Prepayments 5,619,037 32,062 5,651,099
Due from other governments 1,390,141 1,390,141
Total current assets 25,791,309 33,188,651 14,110,619 3,088,242 76,178,821
Noncurrent assets:
Cash and investments held by fiscal agent 1,623,009 60,225 593,292 2,276,526
Investment in joint venture 906,000 906,000
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 5,055,076 30,102,796
Equipment 4,217,640 4,945,596 408,106 9,262,399 18,833,741
Construction in progress 1,372,947 10,403,373 502,344 47,344 12,326,008
Total capital assets 124,279,473 107,979,000 36,970,374 14,475,791 283,704,638
Less accumulated depreciation (50,574,950) (34,366,405) (12,284,292) (7,340,033) (104,565,680)
Capital assets, net of
accumulated depreciation 73,704,523 73,612,595 24,686,082 7,135,758 179,138,958
Total noncurrent assets 76,233,532 73,672,820 25,279,374 7,135,758 182,321,484
Total assets 102,024,841 106,861,471 39,389,993 10,224,000 258,500,305
Deferred Outflows of Resources
Pension related 2,050,530 2,262,358 538,149 151,060 5,002,097
Unamortized loss on refunding of debt 158,894 158,894
Total deferred outflow of resources 2,209,424 2,262,358 538,149 151,060 5,160,991
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, 2017
Page 2
Water Sewer Parking Transit Totals
Enterprise Funds
Liabilities
Current liabilities:
Accounts payable 493,190$ 1,597,029$ 116,507$ 337,376$ 2,544,102$
Accrued liabilities 9,739 18,720 2,932 800 32,191
Compensated absences 259,484 210,341 24,122 16,240 510,187
Deposits payable 21,780 250,000 271,780
Interest payable 138,519 47,064 103,828 289,411
Current portion of long-term debt 1,379,482 907,052 498,058 2,784,592
Total current liabilities 2,302,194 2,780,206 995,447 354,416 6,432,263
Noncurrent liabilities:
Compensated absences 60,730 73,545 6,814 2,216 143,305
Lease revenue bonds 15,855,977 428,260 6,552,586 22,836,823
Installment sale agreement 6,783,114 6,783,114
State loan/note payable 3,336,331 7,817,344 4,590,132 15,743,807
Net pension liability 9,387,364 10,170,853 2,604,377 616,636 22,779,230
Total noncurrent liabilities 28,640,402 25,273,116 13,753,909 618,852 68,286,279
Total liabilities 30,942,596 28,053,322 14,749,356 973,268 74,718,542
Deferred Inflows of Resources
Pension related 863,605 935,684 239,593 56,728 2,095,610
Net Position
Net investment in capital assets 53,291,627 57,676,825 13,045,306 7,135,758 131,149,516
Restricted:
Debt service 1,623,009 60,225 593,292 2,276,526
Subsequent year expenditures 1,298,017 8,207,589 381,450 41,519 9,928,575
Unrestricted 16,215,411 14,190,184 10,919,145 2,167,787 43,492,527
Total net position 72,428,064$ 80,134,823$ 24,939,193$ 9,345,064$ 186,847,144$
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, 2017
Water Sewer Parking Transit Total
Operating revenues:
Charges for sales and service 18,757,311$ 15,382,103$ 4,307,877$ 658,468$ 39,105,759$
Impact fees 1,266,674 503,615 1,770,289
Fines and forfeitures 530,644 530,644
Other revenues 162,054 349,862 (171,551) 340,365
Total operating revenues 20,186,039 16,235,580 4,666,970 658,468 41,747,057
Operating expenses:
Salaries and benefits 3,615,448 3,967,703 1,118,703 296,931 8,998,785
Supplies and maintenance 1,682,244 1,905,369 267,576 280,374 4,135,563
Contract services 8,842,359 807,408 600,146 2,551,097 12,801,010
General government 1,477,598 1,591,041 684,603 288,995 4,042,237
Depreciation 2,665,385 3,041,787 644,447 659,474 7,011,093
Total operating expenses 18,283,034 11,313,308 3,315,475 4,076,871 36,988,688
Operating income (loss)1,903,005 4,922,272 1,351,495 (3,418,403) 4,758,369
Nonoperating revenues (expenses)
Interest 63,970 62,376 52,476 3,439 182,261
Grants 4,180,386 4,180,386
Interest expense (786,933) (369,954) (476,018) (1,632,905)
Income from investment in joint venture 206,700 206,700
Miscellaneous nonoperating
revenues (expenses)(5,108) 36,953 7,828 39,673
Total nonoperating revenues
(expenses)(521,371) (270,625) (423,542) 4,191,653 2,976,115
Income before transfers
and capital contributions 1,381,634 4,651,647 927,953 773,250 7,734,484
Transfers (561,244) (490,319) (1,051,563)
Total transfers (561,244) (490,319) - - (1,051,563)
Change in net position 820,390 4,161,328 927,953 773,250 6,682,921
Net position, beginning of year 71,607,674 75,973,495 24,011,240 8,571,814 180,164,223
Net position, end of year 72,428,064$ 80,134,823$ 24,939,193$ 9,345,064$ 186,847,144$
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, 2017
Water Sewer Parking Transit Total
Cash flows from operating activities:
Cash received from customers 20,243,988$ 16,377,147$ 3,934,677$ 658,417$ 41,214,229$
Cash payments to suppliers for goods and services (10,225,911) (2,049,692) (816,110) (2,699,111) (15,790,824)
Cash payments to General Fund for interfund services (1,477,598) (1,591,041) (684,603) (288,995) (4,042,237)
Cash payments to employees for services (3,930,698) (4,378,924) (1,202,249) (321,475) (9,833,346)
Other cash payments (5,108) (5,108)
Other cash receipts 36,953 7,828 44,781
Net cash provided by (used in)
operating activities 4,604,673 8,394,443 1,231,715 (2,643,336) 11,587,495
Cash flows from noncapital financing activities:
Operating grants received 5,271,715 5,271,715
Transfers to other funds (561,244) (490,319) (1,051,563)
Net cash provided by (used in) noncapital
financing activities (561,244) (490,319) - 5,271,715 4,220,152
Cash flows from capital and related
financing activities:
Acquisition and construction of capital assets (725,268) (4,530,198) (127,562) (1,665,211) (7,048,239)
Disposition of capital assets 9,124 9,124
Principal paid on debt financing (1,394,025) (879,011) (481,982) (2,755,018)
Interest paid on debt financing (774,602) (372,478) (476,809) (1,623,889)
Net cash used in capital and
related financing activities (2,884,771) (5,781,687) (1,086,353) (1,665,211) (11,418,022)
Cash flows from investing activities:
Interest on investments 47,873 38,041 43,180 (190) 128,904
Net cash provided by
investing activities 47,873 38,041 43,180 (190) 128,904
Net change in cash and cash equivalents 1,206,531 2,160,478 188,542 962,978 4,518,529
Cash and cash equivalents, beginning of year 17,733,877 28,331,519 14,424,822 729,521 61,219,739
Cash and cash equivalents, end of year 18,940,408$ 30,491,997$ 14,613,364$ 1,692,499$ 65,738,268$
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, 2017
Page 2
Water Sewer Parking Transit Total
Reconciliation of operating income (loss) to
net cash provided by (used in) operating activities:
Operating income (loss)1,903,005$ 4,922,272$ 1,351,495$ (3,418,403)$ 4,758,369$
Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities:
Depreciation 2,665,385 3,041,787 644,447 659,474 7,011,093
Other revenues and expenses (5,108) 36,953 7,828 39,673
Change in assets, deferred outflows of resources,
liabilities, and deferred inflows of resources:
Accounts receivable 65,509 141,567 17,707 (51) 224,732
Prepaid expense 211,230 (32,062) 179,168
Accounts payable 87,462 695,147 51,612 132,360 966,581
Deposits payable (7,560) (750,000) (757,560)
Accrued salaries and compensated absences (108,550) (196,863) (27,563) (9,280) (342,256)
Deferred pensions and net pension liability (206,700) (214,358) (55,983) (15,264) (492,305)
Net cash provided by (used in)
operating activities 4,604,673$ 8,394,443$ 1,231,715$ (2,643,336)$ 11,587,495$
Reconciliation of cash and investments to the balance sheet:
Cash and cash equivalents 382,881$ 672,491$ 312,289$ 37,401$ 1,405,062$
Investments 16,934,518 29,759,281 13,707,783 1,655,098 62,056,680
Cash and investments held by fiscal agent 1,623,009 60,225 593,292 2,276,526
Total cash and investments 18,940,408$ 30,491,997$ 14,613,364$ 1,692,499$ 65,738,268$
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, 2017
Assets
Current assets:
Cash and cash equivalents 2,869,062$
Investments 1,687,073
Accounts receivable 18,102
Accrued interest receivable 9,826
Other assets 35,064
Deferred outflows of resources - pension related 265,920
Capital assets, net of accumulated depreciation 1,058,352
Total assets 5,943,399$
Liabilities
Current liabilities:
Accounts payable 493,762$
Accrued liabilities 28,988
Other liabilities 2,349,852
Deferred inflows of resources - pension related 111,456
Net pension liability 1,211,508
Due to agency participants 1,747,833
Total liabilities 5,943,399$
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, 2017
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 37
Assets, Liabilities, and Net Position or Fund Balance 39
Reconciliation of Government-wide and Fund Financial Statements 42
Budgets and Budgetary Accounting 42
Fair Value Measurements 45
Note 2: Cash and Investments 45
Funds with Fiscal Agent 45
Investments 46
Note 3: Property Taxes 50
Note 4: Due from Other Governments 51
Note 5: Capital Assets 52
Note 6: Long-Term Debt 54
Summary of Long-Term Debt 54
Governmental Activities Summary 55
Revenue Bonds 55
Lease-Purchase Financing 56
2014 Energy Sources Conservation State Loan 57
Business-Type Activities Summary 58
Revenue Bonds 58
Loans 60
Installment Sale Agreements 60
Note 7: Pension Plans and Other Post-Employment Benefits 61
Agent-Multiple Employer Plan 62
34
City of San Luis Obispo, California
Notes to the Financial Statements
Table of Contents
June 30, 2017
Page 2
Page
General Information about the Pension Plan 62
Net Pension Liability 63
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
Adequacy of Protection 81
Self-Insurance 81
Note 11: Operating Lease 82
Note 12: Commitments and Contingencies 82
Litigation 82
Grant Awards 83
35
City of San Luis Obispo, California
Notes to the Financial Statements
Table of Contents
June 30, 2017
Page 3
Page
Note 13: Construction and Other Significant Commitments 83
Note 14: Fund Balance Deficiency 83
Note 15: Subsequent Event 83
Note 16: New Accounting Standards 84
Accounting Standards Adopted 84
New Accounting Standards 85
Note 17: Prior Year Restatement 86
36
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
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
46,724, 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 City has identified The San Luis Obispo Capital Improvement Board (the Board) as a
blended component unit in accordance with GASB standards. The Board provides financing for the construction and
acquisition of City facilities. The Board consists of members of the City Council. Activities of the Board are accounted
for in the applicable City governmental fund and consist of the issuance of debt secured by the lease of property. Separate
financial statements are not prepared for the San Luis Obispo Capital Improvement Board.
Government-wide and Fund Financial Statements
The government-wide financial statements (i.e. the statement of net position and the statement of activities) report
information on all of the 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, 2017
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.
Major Funds and Other Funds. GASB Standards define major funds and require that the City’s major governmental
funds be identified and presented separately in the fund financial statements. All other funds, called non-major funds,
are combined and reported in a single column, regardless of their fund type.
Major funds are defined as funds that have assets, liabilities, revenues, or expenditures/expenses equal to ten percent of
their fund-type total and at least five percent of the grant total. The General Fund is always a major fund. The City may
also select other funds it believes should be presented as major funds.
38
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 3
Note 1: Summary of Significant Accounting Policies (Continued)
The City reports the following major governmental funds:
General Fund. This fund is the government’s primary operating fund. It accounts for all financial resources of the general
government, except those required to be accounted for in another fund.
The only proprietary funds the City reports are the Enterprise Funds, all of which are major funds. Proprietary funds are
accounted for on the economic resources measurement focus and the accrual basis of accounting. Under this method,
revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. The City reports the
following major enterprise funds:
Water Fund. This fund accounts for the provision of water services to the residents of the City as well as some customers
in the County. All activities necessary to provide such services are accounted for in this fund, including, but not limited
to, administration, operations, maintenance, capital improvements and debt service.
Sewer Fund. This accounts for the provision of wastewater collection and treatment services to the residents of the City
as well as some customers in the County. All activities necessary to provide such services are accounted for in this fund,
including, but not limited to, administration, operations, maintenance, capital improvements and debt service.
Parking Fund. This fund accounts for activities related to the implementation of the Access and Parking Management
Plan, including the operation of municipal parking lots, parking structures, parking meters and residential parking districts.
All activities necessary to provide such services are accounted for in this fund, including, but not limited to,
administration, operations, maintenance, capital improvements and debt service.
Transit Fund. This fund accounts for the operation and maintenance of the City's transit system. Although user fees are
not the primary funding source for the operation of the system, the State of California and the Federal government, which
provide the major funding sources for the system, require that local transit systems be accounted for on an enterprise fund
basis.
Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and
expenses generally result from providing services and producing and delivering goods in connection with a proprietary
fund’s principal ongoing operations. The principal operating revenues of the enterprise funds are charges to customers
for sales and services. Operating expenses for enterprise funds include the cost of sales and services, administrative
expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-
operating revenues and expenses.
The City has established nine Agency Funds, which are used to account for funds held by the City as an agent for private
individuals, organizations or other governmental agencies. Agency funds are accounted for using the accrual basis of
accounting. See page 126 for a complete list of Agency Funds.
39
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
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 and an estimated useful life in excess of one
year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital
assets are recorded at estimated fair market value at the date of donation. Donated capital assets, donated works of art
and similar items, and capital assets received in a service concession arrangement would be reported at acquisition value
rather than fair value. The costs of normal maintenance and repairs that do not add to the value of assets or materially
extend assets’ lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are
constructed. Interest incurred during the construction phase of capital assets of the business-type activities is included as
40
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 5
Note 1: Summary of Significant Accounting Policies (Continued)
part of the capitalized value of the assets constructed. Detailed information on the City’s capital assets can be found in
Note 5.
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. The City has deferred outflows of resources related to pensions and unamortized
loss on refundings of debt. A deferred inflow of resources is defined as an acquisition of net position by the City that is
applicable to a future reporting period. The City has deferred inflows of resources related to pensions.
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, 2017
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, 2017
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. The General Fund is the only
fund that reports a positive unassigned fund balance amount. Other governmental funds may report negative unassigned
fund balance, which occurs when a fund has a residual deficit after allocation of fund balance to the nonspendable,
restricted or committed categories.
Fund Balance Spending Practice. The City follows a practice in which restricted, committed, assigned, and unassigned
fund balances are spent when more than one amount is available for a specific purpose. When both restricted and
unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted
resources (committed, assigned and unassigned) as they are needed. When unrestricted resources (committed, assigned
and unassigned) are available for use, it is the City’s policy to use committed resources first, then assigned, and then
unassigned as they are needed.
Reconciliation of Government-wide and Fund Financial Statements
A reconciliation between total fund balance of the governmental funds and total net position of the governmental activities
as reported in the government-wide statement of net position is presented in the basic financial statements.
A reconciliation between total net change in fund balance of the governmental funds and total change in net position of
governmental activities as reported in the government-wide statement of activities is presented in the basic financial
statements.
There are no differences between total net position of the proprietary funds and total net position of the business-type
activities as reported in the government-wide statement of net position.
Budgets and Budgetary Accounting
Overview. The City has received national recognition for its use of a two-year Financial Plan and budgetary process that
emphasizes long-range planning and effective program management. Significant features of the City's two-year Financial
Plan include the integration of Council goal-setting into the budgetary process and the extensive use of formal policies
and measurable objectives. The Financial Plan includes operating budgets for two years and a capital improvement plan
(CIP) covering five years.
43
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 8
Note 1: Summary of Significant Accounting Policies (Continued)
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.
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:
o 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, 2017
was the second 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.
44
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 9
Note 1: Summary of Significant Accounting Policies (Continued)
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.
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
2017 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.
45
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 10
Note 1: Summary of Significant Accounting Policies (Continued)
Fair Value Measurements
As defined in GASB Statements, fair value is the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date. The City uses valuation techniques that
are appropriate under the circumstances and for which sufficient data are available to measure fair value. Valuation
techniques maximize the use of relevant observable inputs and minimize the use of unobservable inputs.
GASB Statements establish a hierarchy of inputs to valuation techniques used to measure fair value. That hierarchy has
three levels:
Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 — Observable inputs, other than Level 1 prices, for the asset or liability, either directly or indirectly;
Level 3 — Unobservable inputs for the asset or liability.
For fiscal year ended June 30, 2017, 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, reso lutions, 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.
46
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 11
Note 2: Cash and Investments (Continued)
Investments
The City is authorized by its investment policy, in accordance with Section 53601 of the California Government Code, to
invest in the following instruments:
• Treasury bills and notes
• Government Sponsored Enterprises
• Commercial paper
• Repurchase agreements
• Bankers' acceptances
• Corporate medium-term notes
• Negotiable certificates of deposit
• Collateralized bank deposits
• Money market mutual funds
• State Local Agency Investment Fund (LAIF)
Investments are stated at fair value, based on quoted market prices, 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, 2017, cash and investments consisted of the following:
Fair
Value
Percent of
Portfolio
Cash and cash equivalents 4,265,700$ 3.79%
State Local Agency Investment Fund 27,062,409 24.04%
U.S. Treasury Bond / Note 17,150,735 15.24%
Federal Agency Bond / Note 34,202,847 30.39%
Corporate Note 8,717,394 7.74%
Commercial Paper 7,656,133 6.80%
Negotiable Certificates of Deposit 8,904,157 7.91%
Non-Negotiable Certificates of Deposit 984,002 0.87%
Money Market Funds 1,578,983 1.40%
Guarantee Investment Contracts 2,036,093 1.81%
Total cash and investments 112,558,453$ 100.00%
47
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 12
Note 2: Cash and Investments (Continued)
At June 30, 2017, cash and investments are reflected in the financial statements as follows:
Governmental
Funds
Enterprise
Funds Total
Cash and cash equivalents 2,860,638$ 1,405,062$ 4,265,700$
Investments 41,711,834 62,056,680 103,768,514
Cash and investments held by fiscal agents 2,247,713 2,276,526 4,524,239
Total cash and investments 46,820,185$ 65,738,268$ 112,558,453$
Investment Fair Value Measurements. The City categorizes its fair value measurements within the fair value hierarchy
established by generally accepted accounting principles. Investment securities classified in Level 1 of the fair value hierarchy
are valued using prices quoted in active markets for those securities. Investment securities classified in Level 2 of the fair
value hierarchy are valued using matrix pricing or market corroborated pricing. Matrix pricing is used to value securities
based on the securities’ relationship to benchmark quoted prices.
The following is a summary of the fair value measurements as of June 30, 2017:
Fair Value
Investments by fair value hierarchy
U.S. Treasury Bond / Note 17,150,735$ 17,150,735$ $ $
Federal Agency Bond / Note 34,202,847 34,202,847
Corporate Note 8,717,394 8,717,394
Commercial Paper 7,656,133 7,656,133
Negotiable Certificates of Deposit 8,904,157 8,904,157
Total investments by fair value hierarchy 76,631,266$ 17,150,735$ 59,480,531$ -$
Investments not subject to fair value hierarchy
State Local Agency Investment Fund 27,062,409
Non-Negotiable Certificates of Deposit 984,002
Money market funds 1,578,983
Guarantee Investment Contracts 2,036,093
Total investments not subject to fair value hierarchy 31,661,487
Total investments measured at fair value 108,292,753$
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)
48
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 13
Note 2: Cash and Investments (Continued)
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 $21,156,737 at June 30, 2017 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.
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 Local Agency Investment Fund 27,062,409$ $ 27,062,409$ $ $
U.S. Treasury Bond / Note 17,150,735 815,441 15,292,585 1,042,709
Federal Agency Bond / Note 34,202,847 1,898,413 32,304,434
Corporate Note 8,717,394 8,717,394
Commercial Paper 7,656,133 2,361,374 5,294,759
Negotiable Certificates of Deposit 8,904,157 818,206 8,085,951
Non-Negotiable Certificates of Deposit 984,002 984,002
Money Market Funds 1,578,983 1,578,983
Guarantee Investment Contracts 2,036,093 2,036,093
Total maturities 108,292,753$ 3,940,357$ 36,873,230$ 64,400,364$ 3,078,802$
49
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 14
Note 2: Cash and Investments (Continued)
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.
The following table identifies the Standard & Poor’s credit quality ratings for those investments requiring this disclosure
as of June 30, 2017:
Fair Value AAA AA+AA AA-A+A Not Rated
Investments:
State Local Agency Investment Fund 27,062,409$ $ $ $ $ $ $ 27,062,409$
U.S. Treasury Bond / Note 17,150,735 15,591,416 1,559,319
Federal Agency Bond / Note 34,202,847 34,202,847
Corporate Note 8,717,394 985,729 1,035,798 426,782 1,548,145 1,231,828 3,489,112
Commercial Paper 7,656,133 7,656,133
Negotiable Certificates of Deposit 8,904,157 4,115,851 4,788,306
Non-Negotiable Certificates of Deposit 984,002 984,002
Money Market Funds 1,578,983 1,578,983
Guarantee Investment Contracts 2,036,093 2,036,093
Total 108,292,753$ 985,729$ 50,830,061$ 426,782$ 5,663,996$ 6,020,134$ 3,489,112$ 40,876,939$
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.
50
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 15
Note 2: Cash and Investments (Continued)
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 $200 million and that maintain a ratio of equity to total assets of at least 5%.
Investments that exceed 5% of the portfolio by issuer are summarized below:
Fair Value
Percent of
Portfolio
Federal Home Loan Bank 11,935,381$ 11%
Federal National Mortgage Association 15,610,845 14%
Fannie Mae and Freddie Mac 6,656,621 6%
These U.S. government-sponsored enterprise agency securities are not explicitly guaranteed by the U.S. government.
Approximately 15.8% 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.
51
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 16
Note 3: Property Taxes (Continued)
Tax Collections. The County Treasurer/Tax Collector is responsible for all property tax collections. Taxes and
assessments on the secured and utility rolls, which constitute a lien against the property, may be paid in two
installments: the first installment is due on November 1 of the fiscal year and is delinquent if not paid by
December 10; and the second installment is due on March 1 of the fiscal year and is delinquent if not paid by
April 10. Unsecured personal property taxes do not constitute a lien against real property. However, if the taxes
become delinquent the lien is attached against anything the individual owns, which could include real property.
Payment must be made in one installment, which is delinquent if not paid by August 31 of the fiscal year.
Significant penalties are imposed by the County for late payments.
Teeter Plan. In 1993-94 the City elected to receive property tax revenue in accordance with the alternative
method of distribution prescribed by Sections 4701-4717 of the California Revenue and Taxation Code, which
is commonly known as the “Teeter Plan” whereby the County remits 100% of taxes levied without regard to
delinquencies. The County then pursues collection, retaining any delinquent taxes and related penalties and
interest.
Tax Levy Apportionments. Due to the nature of the 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, 2017 have been accrued since they will be
collected within 60 days subsequent to year-end.
Note 4: Due from Other Governments
The following is a summary of amounts due to the City from other governmental agencies at June 30, 2017:
County of San
Luis Obispo
State of
California
Other
Agencies Total
Other Governmental Funds 49,813$ 58,106$ $ 107,919$
Enterprise Funds:
Transit Fund 1,390,141 1,390,141
Total 49,813$ 58,106$ 1,390,141$ 1,498,060$
52
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 17
Note 5: Capital Assets
GASB standards require that the City report in the government-wide statements the value of all capital assets net of
accumulated depreciation, including infrastructure assets, in accordance with GAAP. Infrastructure assets are defined as
long-lived capital assets that are stationary in nature and normally can be preserved for a significantly greater number of
years than most capital assets.
The minimum requirement for compliance with GASB standards is to provide infrastructure valuations for all assets
constructed, acquired, or placed into service on or after July 1, 1980. Relevant assets for the City were valued at one of
two dates: 1) the original date of construction, if available, or 2) the incorporation date of the City. Each asset was reviewed
to determine the adequacy of the data to value the asset prior to July 1, 1980 using historical cost or estimated historical
cost.
Capital assets activity for the fiscal year ended June 30, 2017 was as follows:
Balance Decreases /Balance
June 30, 2016 Increases Transfers June 30, 2017
Governmental activities:
Capital assets not being depreciated:
Land 32,020,193$ $ $ 32,020,193$
Construction in progress 30,660,529 3,344,709 (25,860,699) 8,144,539
Public art 646,630 646,630
Total capital assets not
being depreciated 63,327,352 3,344,709 (25,860,699) 40,811,362
Capital assets being depreciated:
Infrastructure 151,050,353 26,830,489 177,880,842
Accum. Depreciation (51,230,145) (3,251,195) (54,481,340)
Buildings and improvements 35,824,133 697,116 36,521,249
Accum. Depreciation (17,628,799) (972,762) (18,601,561)
Equipment 27,738,353 1,501,411 (817,872) 28,421,892
Accum. Depreciation (16,493,587) (1,541,789) 810,550 (17,224,826)
Total capital assets being
depreciated, net 129,260,308 23,263,270 (7,322) 152,516,256
Governmental activities,
capital assets, net 192,587,660 26,607,979 (25,868,021) 193,327,618
53
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 18
Note 5: Capital Assets (Continued)
Balance Decreases /Balance
June 30, 2016 Increases Transfers June 30, 2017
Business-type activities:
Capital assets not being depreciated:
Land 9,069,495$ $ $ 9,069,495$
Construction in progress 7,813,730 4,534,953 (22,675) 12,326,008
Public art 74,100 74,100
Total capital assets not
being depreciated 16,957,325 4,534,953 (22,675) 21,469,603
Capital assets being depreciated:
Infrastructure 213,298,498 213,298,498
Accum. Depreciation (74,014,176) (74,014,176)
Buildings and improvements 29,952,979 149,817 30,102,796
Accum. Depreciation (12,919,950) (12,919,950)
Equipment 16,727,768 2,386,142 (280,169) 18,833,741
Accum. Depreciation (10,891,508) (7,011,093) 271,047 (17,631,554)
Total capital assets being
depreciated, net 162,153,611 (4,475,134) (9,122) 157,669,355
Business-type activities,
capital assets, net 179,110,936 59,819 (31,797) 179,138,958
Total Government-wide 371,698,596$ 26,667,798$ (25,899,818)$ 372,466,576$
Depreciation expense was charged to functions/programs as follows:
Governmental activities:
Public safety 1,062,645$
Transportation 3,267,869
Culture and recreation 546,396
Community development 5,316
General government 883,520
Total depreciation - governmental activities 5,765,746
Business-type activities:
Water 2,665,385
Sewer 3,041,787
Parking 644,447
Transit 659,474
Total depreciation - business-type activities 7,011,093
Total Government-wide 12,776,839$
54
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
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, 2017:
Balance Balance Due Within
June 30, 2016 Additions Deductions June 30, 2017 One Year
Governmental activities:
Revenue bonds 27,199,515$ $ (1,396,040)$ 25,803,475$ 1,454,115$
Add: Unamortized bond premium 563,378 (38,313) 525,065
Total revenue bonds 27,762,893 (1,434,353) 26,328,540 1,454,115
Lease-purchase financing 1,374,773 1,141,468 (617,589) 1,898,652 623,519
Compensated absences 2,551,152 2,422,614 (2,551,153) 2,422,613 1,888,279
Conservation Loan 679,314 (87,667) 591,647 88,546
Total long-term debt,
governmental activities 32,368,132$ 3,564,082$ (4,690,762)$ 31,241,452$ 4,054,459$
Business-type activities:
Revenue bonds 24,840,500$ $ (1,188,960)$ 23,651,540$ 1,235,885$
Add: Unamortized bond premium 482,905 (61,737) 421,168
Total revenue bonds 25,323,405 (1,250,697) 24,072,708 1,235,885
Loans 17,647,622 (938,462) 16,709,160 965,353
Installment sale agreements 7,932,327 (565,859) 7,366,468 583,354
Compensated absences 682,933 653,492 (682,933) 653,492 510,187
Total long-term debt,
business-type activities 51,586,287 653,492 (3,437,951) 48,801,828 3,294,779
Total Government-wide 83,954,419$ 4,217,574$ (8,128,713)$ 80,043,280$ 7,349,238$
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, 2017 was $2,803,889 of which $219,862 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.
55
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 20
Note 6: Long-Term Debt (Continued)
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%
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, 2017, the principal amount outstanding on the bonds was $3,510,000. 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, 2017.
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, 2017, the principal
amount outstanding that pertains to governmental activities was $5,729,300 of the total $12,455,000 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, 2017.
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, 2017, the principal amount outstanding that pertains to governmental activities
was $5,319,175 of the total $6,280,015 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, 2017.
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, 2017, the unamortized premium was $82,940.
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
56
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 21
Note 6: Long-Term Debt (Continued)
that range from $210,000 to $390,000. At June 30, 2017, the principal amount outstanding on the bonds was $3,960,000.
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, 2017.
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, 2017, the unamortized premium was $239,027.
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,
2017, the principal amount outstanding on the bonds was $7,285,000. 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, 2017.
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, 2017, the unamortized premium was $203,098.
At June 30, 2017, the aggregate maturities of the aforementioned governmental activities revenue bonds were as follows:
For the Year Ending June 30,Principal Interest Total
2018 1,454,115$ 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 1,189,355 902,688 2,092,043
2023-2027 6,483,245 3,688,784 10,172,029
2028-2032 5,004,265 2,392,644 7,396,909
2033-2037 4,412,040 1,317,657 5,729,697
2038-2042 2,320,265 465,789 2,786,054
2043-2045 1,185,000 72,300 1,257,300
25,803,475$ 12,956,730$ 38,760,205$
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 $371,098
included in equipment at June 30, 2017. 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, 2017 the principal amount outstanding is $360,000.
57
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
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 $91,790 included in equipment at
June 30, 2017. 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, 2017 the principal amount outstanding is $225,328.
Computers. In 2016 the City obtained lease-purchase financing in the amount of $688,500 to purchase mobile data
computers, hardware to install the computers in City vehicles, installation costs, and wireless network components. The
gross amount of assets under this lease is $714,611 with accumulated depreciation of $47,641 included in equipment at
June 30, 2017. Amortization of the equipment is included in depreciation expense. The lease agreement bears an interest
rate of 1.55% due in quarterly installments beginning December 1, 2015 through September 1, 2019 in the amount of
$44,000. At June 30, 2017 the principal amount outstanding is $392,516.
Fire Engine and Street Sweeper. In 2017 the City obtained lease-purchase financing in the amount of $1,141,468 to
purchase a fire truck and street sweeper. The gross amount of assets under this lease is $1,142,712 included in equipment
at June 30, 2017. As the assets were placed into service on June 30, 2017, there was no accumulated depreciation and
related expense for the year ended June 30, 2017. The lease agreement bears an interest rate of 1.69% due in annual
installments on April 28 through April 28, 2021 of $240,067. At June 30, 2017 the principal amount outstanding is
$920,808.
At June 30, 2017, the aggregate maturities of the aforementioned governmental activities lease-purchase financing were
as follows:
For the Year Ending June 30,Principal Interest Total
2018 623,519$ 32,538$ 656,057$
2019 637,678 22,282 659,960
2020 401,400 11,765 413,165
2021 236,055 4,013 240,068
1,898,652$ 70,598$ 1,969,250$
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, 2017 the principal amount outstanding is $591,647.
58
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 23
Note 6: Long-Term Debt (Continued)
At June 30, 2017, the aggregate maturities of the aforementioned governmental activities conservation loan is as follows:
For the Year Ending June 30, Principal Interest Total
2018 88,546$ 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 92,150 2,092 94,242
2023-2024 139,961 1,402 141,363
591,647$ 20,928$ 612,575$
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, 2017, the principal amount
outstanding that pertains to business-type activities was $6,725,700 of the total $12,455,000 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, 2017.
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, 2017, the unamortized premium was $21,035.
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, $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, 2017, the principal amount outstanding that pertains to business-type activities
was $960,840 of the total $6,280,015 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, 2017.
2012 Water Revenue Refunding Bonds. In 2012, the City issued water revenue refunding bonds in the amount of
$4,960,000 to refund the 2002 water revenue bonds, which were originally issued to fund water system improvements.
The bonds bear interest from 2.0% to 4.0%, and are due in annual installments on June 1 through June 1, 2023 that range
59
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 24
Note 6: Long-Term Debt (Continued)
from $340,000 to $550,000. At June 30, 2017, the principal amount outstanding on the bonds was $2,990,000. 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, 2017.
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, 2017, the unamortized premium was $400,133.
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, 2017, principal and interest paid and
total customer net revenues were $572,000 and $4,504,147, respectively.
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, 2017, the principal
amount outstanding on the bonds was $12,975,000. 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, 2017.
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, 2017, principal and interest paid and
total customer net revenues were $1,030,948 and $4,504,147, respectively.
At June 30, 2017, the aggregate maturities of the business-type revenue bonds were as follows:
For the Year Ending June 30,Principal Interest Total
2018 1,235,885$ 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 1,365,655 845,210 2,210,865
2023-2027 5,296,755 3,449,504 8,746,259
2028-2032 5,925,745 2,254,989 8,180,734
2033-2037 5,862,960 744,506 6,607,466
2038-2039 114,730 10,004 124,734
23,651,540$ 11,215,596$ 34,867,136$
60
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 25
Note 6: Long-Term Debt (Continued)
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, 2017, the principal amount outstanding on the loan was
$3,767,598.
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, 2017, the principal amount
outstanding on the loan was $4,849,540.
2009 Infrastructure and Economic Development Bank Loan– Tank Farm Lift Station. In 2009, the City obtained a
note in the amount of $10,000,000 to go towards the Tank Farm lift station and main sewer project. The note bears an
interest rate of 3.25% due in annual installments on December 1 through December 1, 2037 that range from $212,600 to
$520,744. At June 30, 2017, the principal amount outstanding on the loan was $8,092,022.
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, 2017, principal and interest paid and total
customer net revenues were $533,344 and $7,339,725, respectively.
At June 30, 2017, the aggregate maturities of the aforementioned business-type loans were as follows:
For the Year Ending June 30,Principal Interest Total
2018 965,353$ 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 1,080,963 331,466 1,412,429
2023-2027 4,824,642 1,353,187 6,177,829
2028-2032 3,884,098 784,251 4,668,349
2033-2037 2,367,926 281,935 2,649,861
2038 520,844 8,362 529,206
16,709,160$ 4,267,767$ 20,976,927$
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, 2017, the principal amount outstanding on the loan was $1,110,000.
61
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 26
Note 6: Long-Term Debt (Continued)
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, 2017, the principal amount outstanding on the loan was $6,256,468.
At June 30, 2017, the aggregate maturities of the aforementioned business-type installment sale agreements were as
follows:
For the Year Ending June 30,Principal Interest Total
2018 583,354$ 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 662,064 138,685 800,749
2023-2027 3,060,087 389,484 3,449,571
2028-2029 1,197,256 34,935 1,232,191
7,366,468$ 1,454,120$ 8,820,588$
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, 2017 are as follows:
Net Pension Deferred Outflows Deferred Inflows
Liability of Resources of Resources
Miscellaneous Plan 72,545,301$ 17,149,822$ 6,673,921$
Safety Plans 64,792,760 18,136,935 2,174,667
Less: Whale Rock Agency Fund (1,211,507) (265,920) (111,455)
Total Government-Wide 136,126,554$ 35,020,837$ 8,737,133$
62
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
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, 2017, 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, 2017
Page 28
Note 7: Pension Plans and Other Post-Employment Benefits (Continued)
Employees Covered. As of the measurement date 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 367
Inactive employees entitled to but
not yet receiving benefits 198
Active employees 313
Total 878
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, 2016, using an annual
actuarial valuation as of June 30, 2015 rolled forward to June 30, 2016 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, 2015 actuarial valuations were determined using the
following actuarial assumptions:
Valuation Date June 30, 2015
Measurement Date June 30, 2016
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:
Discount Rate 7.65%
Inflation 2.75%
Payroll Growth Varies by Entry Age and Service
Projected Salary Increase Varies by Entry Age and Service (1)
Mortality (2)
Post Retirement Benefit Increase (3)
(1) Depending on age, service and type of employment.
(2) Derived using CalPERS' Membership Data for all Funds
(3) Contract COLA up to 2.75% until Purchasing Power Protection Allowance Floor
on Purchasing Power applies, 2.75% thereafter
Miscellaneous Plan
64
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
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, 2015 valuation were based
on the results of a 2010 actuarial experience study for the period 1997 to 2007. Further details of the Experience Study
can be found on the CalPERS website.
Change in Assumptions. There were no changes in assumptions for the June 30, 2016 measurement date.
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, 2017
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 20.0%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 1.0%-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, 2015 183,043,680$ 118,212,543$ 64,831,137$
Changes during the year:
Service cost 3,580,882 3,580,882
Interest on the total pension liability 13,688,523 13,688,523
Differences between Expected and
actual experience (1,160,933) (1,160,933)
Contribution - employer 6,122,173 (6,122,173)
Contribution - employee 1,666,606 (1,666,606)
Net investment income 677,557 (677,557)
Benefit payments, including refunds
of employee contributions (9,476,508) (9,476,508) -
Administrative expense (72,028) 72,028
Net changes 6,631,964 (1,082,200) 7,714,164
Balance at June 30, 2016 189,675,644$ 117,130,343$ 72,545,301$
66
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
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 96,186,671$
Current Discount Rate 7.65%
Net Pension Liability 72,545,301$
1% Increase 8.65%
Net Pension Liability 52,850,381$
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, 2017, the City’s pension expense for the Miscellaneous Plan was $5,584,518, of which
$5,494,910 was recognized pension expense for the City and $89,608 was recognized as pension expense for Whale Rock
Agency Fund. At June 30, 2017, the City reported deferred outflows of resources and deferred inflows of resources
related to pensions from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to
measurement date 6,776,945$ $
Changes in assumptions 1,019,242
Differences between expected and
actual experiences 1,585,218
Net differences between projected and
actual earnings on plan investments 10,372,877 4,069,461
Total 17,149,822$ 6,673,921$
Miscellaneous Plan
67
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
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 $6,776,945 will be
recognized as a reduction of the net pension liability in the year ended June 30, 2018. Other amounts reported as deferred
outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as
follows:
Measurement Period
Ended June 30 Amount
2017 (1,346,899)$
2018 483,605
2019 2,905,312
2020 1,656,938
3,698,956$
Miscellaneous Plan
Payable to the Pension Plan
At June 30, 2017, the City reported a payable of $0 for the outstanding amount of contributions to the pension plan
required for the year ended June 30, 2017.
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, 2017
Page 33
Note 7: Pension Plans and Other Post-Employment Benefits (Continued)
The Plans’ provisions and benefits in effect at June 30, 2017, 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 21.230%21.230%16.312% 18.301%
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%12.821%
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, 2017
Page 34
Note 7: Pension Plans and Other Post-Employment Benefits (Continued)
For the year ended June 30, 2017, 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, 2017, 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 64,792,760$
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, 2016, 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, 2015 rolled forward to June 30,
2016 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, 2015 and
2016 was as follows:
Proportionate Share
Percentage share at 6/30/2015 1.365393%
Percentage share at 6/30/2016 1.251014%
Change - Increase/(Decrease)-0.11438%
70
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 35
Note 7: Pension Plans and Other Post-Employment Benefits (Continued)
For the year ended June 30, 2017, the City recognized pension expense of $3,432,845 for the Safety Plans. At June 30,
2017, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the
following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 6,299,915$ $
Changes in assumptions 1,768,951
Differences between expected and
actual experiences 405,716
Change in employer's proportion and differences
between the employer's contributions and the
employer's proportionate share of contributions 2,204,273
Net differences between projected and actual earnings
on plan investments 8,690,774
Adjustment due to differences in proportions 941,973
Total 18,136,935$ 2,174,667$
Safety - All Plans
Pension contributions subsequent to the measurement date of $6,299,915 are reported as deferred outflows of resources
and will be recognized as a reduction of the net pension liability in the year ended June 30, 2018. Other amounts reported
as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension
expense as follows:
Measurement Period
Ended June 30 Amount
2017 1,590,308$
2018 1,567,344
2019 4,242,240
2020 2,262,461
9,662,353$
Safety - All Plans
71
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 36
Note 7: Pension Plans and Other Post-Employment Benefits (Continued)
Actuarial Assumptions. The total pension liabilities in the June 30, 2015 actuarial valuations for all Safety Plans were
determined using the following actuarial assumptions:
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
Safety - All Plans
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, 2015 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. There were no changes in assumptions for the June 30, 2016 measurement date.
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, 2017
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 20.0%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 1.0%-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
Safety - All Plans
73
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
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 96,992,274$
Current Discount Rate 7.65%
Net Pension Liability 64,792,760$
1% Increase 8.65%
Net Pension Liability 26,045,304$
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, 2017, the City reported a payable of $0 for the outstanding amount of contributions to the pension plan
required for the year ended June 30, 2017.
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
$128.00 per employee per month in 2016-17. 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, 2017
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 2016-17 was
$1,182,000.
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.
For fiscal year 2016-17, the City contributed $1,432,000 to the Plan, which fully funded the ARC. The City paid $253,500
to the CalPERS Health Benefit Program and retirees during the year and $604,500 to the CERBT. In addition, the City
contributed an additional $574,000 to prefund benefits and pay down a portion of the implied subsidy.
Annual OPEB Cost and Net OPEB Obligation (Asset). The following table shows the components of the City’s annual
OPEB cost for the year, the actual amount contributed to the plan, and changes in the City’s OPEB obligation (asset):
Annual required contribution 1,182,000$
Interest on net OPEB obligation (18,000)
Amortization on net OPEB obligation 23,000
Annual OPEB cost 1,187,000
Contributions made (1,432,000)
Change in net OPEB obligation (245,000)
Net OPEB asset - beginning of year (250,000)
Net OPEB asset - end of year (495,000)$
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
Actual
Contributions
Percentage of Annual
OPEB Cost
Contributed
Net OPEB
Obligation
(Asset)
6/30/2017 1,187,000$ 1,432,000$ 121% (495,000)
6/30/2016 607,000 857,000 141% (250,000)
6/30/2015 588,000 588,000 100%-
75
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 40
Note 7: Pension Plans and Other Post-Employment Benefits (Continued)
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,
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, 2016 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, 2017 was 22 years.
76
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 41
Note 8: Interfund Transactions
Interfund receivable and payable balances as of June 30, 2017 consist of the following:
Interfund
Receivables
Interfund
Payables
General Fund 128,102$ $
Nonmajor Governmental Funds:128,102
Total 128,102$ 128,102$
Interfund receivables and payables include temporary negative cash balances that result from the timing of cash flows at
year end and the time lag between the dates that transactions are recorded in the accounting system and payment between
funds are made. Liquidation of interfund receivables and payables typically occurs in the first quarter of the subsequent
fiscal year. Interfund balances between governmental funds are not included in the government-wide Statement of Net
Position.
Interfund transfers are used to move revenues from the fund with collection authorization to the debt service fund as debt
service principal and interest payments become due or to move unrestricted revenues to finance various programs that the
government must account for in other funds in accordance with budgetary authorizations. This may include amounts
provided as matching funds for various grant programs.
Interfund transfers for the year ended June 30, 2017 consist of the following:
Transfers In Transfers Out
General Fund 2,043,830$ 13,695,206$
Nonmajor Governmental Funds 13,695,206 992,267
Enterprise Funds 1,051,563
Total 15,739,036$ 15,739,036$
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;
77
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 42
Note 9: Joint Ventures, Jointly Governed Organizations and Operating Agreements (Continued)
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.
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 $3,900,000, and was amortized on a straight-line basis
over thirty-five years. Separate financial statements are available from the Whale Rock Commission, 879 Morro Street,
San Luis Obispo, CA 93401.
The following segment financial information for the Whale Rock Commission and the Water Fund’s related investment
in the joint venture is presented as of and for the year ended June 30, 2017:
City's Investment
Joint Venture in Joint Venture
Total assets 3,077,380$ 1,694,100$
Total liabilities 1,431,570 788,100
Fund balance 1,645,810 906,000
Total revenues 1,411,000$ 776,800$
Total expenditures 1,035,680 570,100
Excess of revenues over expenditures 375,320$ 206,700$
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
78
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 43
Note 9: Joint Ventures, Jointly Governed Organizations and Operating Agreements (Continued)
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 2016-17 the City contributed approximately $583,204 of these funds to the Authority. The City's share
of assets, liabilities, and fund equity has not been calculated by the Authority and therefore is not known to the City;
however, based on the City's limited financial participation in the Authority, any such assets, liabilities, or equity are not
believed to be significant to the basic financial statements taken as a whole. Separate financial statements are available
from the Authority, 179 Cross Street, Suite A, San Luis Obispo, CA 93401.
San Luis Obispo Council of Governments
General Description. The San Luis Obispo Council of Governments (SLOCOG) was formed in 1968 through a joint
powers agreement among the incorporated cities and the County of San Luis Obispo. It acts as the regional transportation
planning agency for the county and is the metropolitan planning organization and the congestion management agency for
the region. The governing board consists of twelve delegates, each with one vote that includes the five members of the
County Board of Supervisors and one representative from each of the seven cities in the County.
Financial Information. A portion of the City's Transportation Development Act funds are directly allocated to the
SLOCOG. The City's share of assets, liabilities, and fund equity has not been calculated by SLOCOG and therefore is
not known to the City; however, based on the City's limited financial participation in SLOCOG, any such assets, liabilities,
or equity are not believed to be significant to the basic financial statements taken as a whole. Separate financial statements
are available from SLOCOG, 1114 Marsh Street, San Luis Obispo, CA 93401.
Nacimiento Water Supply Project
General Description. In 2004, the Council adopted a resolution approving an agreement with the San Luis Obispo County
Flood Control and Water Conservation District (District) for the design, construction and operations of the facilities
required for the delivery of 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,
79
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 44
Note 9: Joint Ventures, Jointly Governed Organizations and Operating Agreements (Continued)
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.
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 $182 million. Based on the City’s share of construction costs, debt service and operating and
maintenance, the following summarizes the City’s Project obligations for 2016-17 and five year projections for the 2015
bonds and the 2007 bonds that will remaining outstanding following the refunding.
Actual 2017 6,525,373$
Projected:
2018 4,986,702
2019 4,985,758
2020 4,945,455
2021 4,948,523
2022 4,945,814
2023-27 24,734,250
2028-32 24,733,649
2033-37 24,740,562
2038-41 20,630,935
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 §
80
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 45
Note 10: Risk Management
6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to
purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of
coverage. The California JPIA began covering claims of its members in 1978. Each member government has an elected
official as its representative on the Board of Directors. The Board operates through a nine-member Executive Committee.
Each member pays an annual contribution to cover estimated losses for the coverage period. This initial funding is paid
at the beginning of the coverage period. After the close of the coverage period, outstanding claims are valued. A
retrospective deposit computation is then conducted annually thereafter until all claims incurred during the coverage
period are closed on a pool-wide basis. This subsequent cost reallocation among members based on actual claim
development can result in adjustments of either refunds or additional deposits required.
The total funding requirement for self-insurance programs is estimated using actuarial models and prefunded through the
annual contribution. Costs are allocated to individual agencies based on exposure (payroll) and experience (claims)
relative to other members of the risk-sharing pool. Additional information regarding the cost allocation methodology is
provided below.
Self-Insurance Programs of the Authority
General Liability and Workers’ Compensation. The City is a member of the California Joint Powers Insurance Authority
(CJPIA), which provides joint protection programs and group purchased insurance for public entities covering liability,
errors and omission losses, auto liability, employment practices liability, crime, pollution, workers’ compensation injuries
and coverage for city-owned property. The City has a retained limit of $500,000 per occurrence for liability and no
retained limit for workers’ compensation.
Liabilities of the City are reported when it is probable that a loss has occurred and the amount of the loss can be reasonable
estimated. Liabilities include an amount for claims that have been incurred but not reported (IBNR). The result of the
process to estimate the claims liability is not an exact amount as it depends on many complex factors, such as inflation,
changes in legal doctrines and damage awards. Accordingly, claims are reevaluated periodically to consider the effects of
economic and social factors. The estimate of the claims liability also includes amounts for incremental claim adjustment
expenses related to specific claims and other claim adjustment expenses regardless of whether or not they are attributable
to specific claims. Estimated recoveries, for example from salvage or subrogation, are another component of the claims
liability estimate.
During the past three fiscal years, none of the protection programs experienced settlements or judgments that exceeded
pooled or insured coverage. There were also no significant reductions in pooled or insured coverage in 2016-17.CJPIA
covers workers’ compensation claims up to a pooled limit of $2 million per occurrence and provides excess coverage to
statutory limits with a group purchased commercial insurance policy. The City pays an annual contribution to CJPIA and
may share in any member refunds in the event that pooled funding exceeds the cost of pooled claims and claim-related
expenses, or the City may be required to pay additional contributions based upon CJPIA’s operating results.
81
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 46
Note 10: Risk Management (Continued)
Financial statements of CJPIA may be obtained from its administrative office located at 8081 Moody Street, La Palma,
California 90623, or by calling (562) 467-8700.
Additional claims and lawsuits have been filed against the City in the normal course of business. It is reasonably possible
that the City may be liable for claims not to exceed $500,000. In the opinion of management, the resolution of these
matters will not have a material adverse effect on the financial condition of the City.
Adequacy of Protection
During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that
exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage
from coverage in 2016-17.
Self-Insurance
The City retains the risk for workers’ compensation losses incurred prior to joining the California Joint Powers Insurance
Authority. Several member agencies of the now dissolved Central Coast Cities Self-Insurance Fund continue to
participate in a non-risk sharing arrangement for claims management and the purchase of excess insurance. The
participating agencies share a set of common guidelines and annually set aside premiums to pay their individual losses
within their self-insured retentions. Losses are debited and investment income is credited to specific member accounts.
The City has not incurred any losses in excess of insurance coverage. Claims liabilities in the governmental funds are
generally liquidated by the General Fund.
The last actuarial study to determine the undiscounted outstanding claims liability was completed for the year ended
June 30, 2017. The liability was estimated based on the actuarial study and considered claims asserted and paid, and the
time limitations for filing claims. There are no estimates for claims incurred but not reported because the time limit for
filing claims has elapsed. The estimated asset at June 30, 2017 is calculated as follows:
82
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 47
Note 10: Risk Management (Continued)
Self-insurance activity as of and for the year ended June 30, 2017
is summarized is as follows:
Interest earnings 8,756$
Claims expense (110,865)$
Estimated liability for reported claims and settlement expenses (661,150)$
Assets on deposit 1,486,012
Estimated unpaid claims asset 824,862$
Changes in the balances of claim assets during the past two fiscal years
are as follows:
Estimated unpaid claims asset June 30, 2015 364,128$
(Claim payments and related expenditures) reimbursement 9,286
Change in estimated claims asset June 30, 2016 301,103
Interest earnings 4,703
Estimated unpaid claims asset June 30, 2016 679,220
(Claim payments and related expenditures) reimbursement 110,865
Change in estimated claims asset June 30, 2017 87,473
Interest earnings 8,756
Withdrawal (61,452)
Estimated unpaid claims asset June 30, 2017 824,862$
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 $20,282 for the year ended June 30, 2017. At June 30, 2017, the future minimum lease payments were as follows:
For the Year Ending June 30,
2018 20,629$
2019 20,982
2020 10,625
52,236$
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.
83
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 48
Note 12: Commitments and Contingencies (Continued)
Grant Awards
Under the terms of Federal and State grants, audits may be required and certain costs may be questioned as not being
appropriate expenditures under the terms of the grants. Such audits could lead to requests for reimbursement to the grantor
agencies. City management believes disallowances, if any, will be immaterial.
Note 13: Construction and Other Significant Commitments
Construction and other significant commitments as of June 30, 2017, including encumbrances outstanding at year-end,
are as follows:
General Fund 4,088,582$
Special Revenue Funds 55,418
Capital Project Funds 3,297,771
Enterprise Funds:
Water 1,298,017
Sewer 8,207,589
Parking 381,450
Transit 41,519
Total 17,370,346$
Long term construction contracts are billed and paid on a percentage completion basis by construction phase.
Note 14: Fund Balance Deficiency
At June 30, 2017, the City had a negative fund balance in the Downtown BID Fund of $5,457.
Note 15: Subsequent Event
Events subsequent to June 30, 2017 have been evaluated through December 20, 2017, which is the date that the
financial statements are available to be issued. Management identified the below subsequent event that required
disclosure.
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
84
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 49
Note 15: Subsequent Event (Continued)
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. In the winter of 2017,an
administrative judge proposed a decision that would negate the agreement that is currently pending and under review. As
of the date of the report, the outcome is still unknown.
Note 16: New Accounting Standards
Accounting Standards Adopted
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. This statement does not apply
to the City and has no impact on these 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. Implementation of this statement did not have a material
impact on the City’s 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. Implementation of this statement did not have a material
impact on the City’s 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. Implementation of this
statement did not have a material impact on the City’s financial statements.
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. Implementation of this statement did not have a material impact on the City’s
financial statements.
85
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 50
Note 16: New Accounting Standards (Continued)
New Accounting Standards
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 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.
In January 2017, GASB issued Statement No. 84, Fiduciary Activities. Statement No. 84 establishes criteria for
identifying fiduciary activities of all state and local governments. Activities meeting the criteria should be reported in a
fiduciary fund in the basic financial statements. This Statement also provides for recognition of a liability to the
beneficiaries in a fiduciary fund when an event has occurred that compels the entity to disburse fiduciary resources. The
provisions of Statement No. 84 are effective for fiscal years beginning after December 15, 2018. Management has not
yet determined the impact of this Statement on its financial statements.
86
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2017
Page 51
Note 16: New Accounting Standards (Continued)
In March 2017, GASB issued Statement No. 85, Omnibus 2017. Statement No. 85 addresses practice issues that have
been identified during implementation and application of certain GASB Statements. This Statement addresses a variety
of topics including issues related to blending component units, goodwill, fair value measurement and application, and
postemployment benefits (pensions and other postemployment benefits [OPEB]). The provisions of Statement No. 85
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 May 2017, GASB issued Statement No. 86, Certain Debt Extinguishment Issues. Statement No. 86 is meant to improve
consistency in accounting and financial reporting for in-substance defeasance of debt by providing guidance for
transactions in which cash and other monetary assets acquired with only existing resources—resources other than the
proceeds of refunding debt—are placed in an irrevocable trust for the sole purpose of extinguishing debt. This Statement
also improves accounting and financial reporting for prepaid insurance on debt that is extinguished and notes to financial
statements for debt that is defeased in substance. The provisions of Statement No. 86 are effective for fiscal years
beginning after June 15, 2017. Management has not yet determined the impact of this Statement on its financial
statements.
Additionally, in June 2017, GASB issued Statement No. 87, Leases. Statement No. 87 increases the usefulness of entities’
financial statements by requiring recognition of certain lease assets and liabilities for leases that previously were classified
as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of
the contract. It establishes a single model for lease accounting based on the foundational principle that leases are
financings of the right to use an underlying asset. The provisions of Statement No. 87 are effective for fiscal years
beginning after December 15, 2019. Management has not yet determined the impact of this Statement on its financial
statements.
Note 17: Prior Year Restatement
During 2017, a prior year restatement was recorded to properly record the City’s additional contribution made to the
CalPERS Health Benefit Program for other post-employment benefits. The effect was to increase the net other post-
employment benefit asset and beginning net position by $250,000 for Governmental Activities.
REQUIRED SUPPLEMENTARY INFORMATION
(UNAUDITED)
88
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund
For the Fiscal Year Ended June 30, 2017
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
Revenues:
Taxes and franchise fees:
Sales and use tax - general 17,297,334$ 17,297,334$ 16,737,005$ (560,329)$
Sales and use tax - Half Percent Sales Tax 7,886,000 7,391,000 7,331,660 (59,340)
Sales tax - Prop 172 428,443 428,443 405,512 (22,931)
Property tax 10,510,789 10,510,789 10,756,477 245,688
Transient occupancy tax 7,186,067 7,186,067 7,381,989 195,922
Utility users tax 5,562,000 5,562,000 5,539,407 (22,593)
Property tax in lieu of VLF 4,365,153 4,365,153 4,353,912 (11,241)
Franchise taxes 1,557,383 1,557,383 1,557,128 (255)
Business tax 2,395,090 2,395,090 2,372,249 (22,841)
Real property transfer tax 301,000 301,000 332,314 31,314
Total taxes 57,489,259 56,994,259 56,767,653 (226,606)
Fines, forfeitures and penalties 156,000 156,000 139,534 (16,466)
Use of money and property 331,700 331,700 160,340 (171,360)
Subventions and grants:
Homeowners' property tax relief 74,000 74,000 74,911 911
Other in-lieu 22,000 22,000 20,660 (1,340)
Police training grant (POST)40,000 40,000 9,702 (30,298)
COPS grant AB 3229 100,000 100,000 100,000 -
Mutual aid reimbursements 585,252 787,411 202,159
State SB90 refunds 3,579 3,579
Transportation grants 85,000 85,000 (85,000)
Other State and Federal grants 2,000 19,418 18,596 (822)
Total subventions and grants 323,000 925,670 1,014,859 89,189
See notes to required supplementary information.
89
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2017
Page 2
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
Charges for services:
Public safety:
Police 450,300$ 458,032$ 620,601$ 162,569$
Fire:
Cal Poly fire services 276,125 276,125 276,125 -
Medical emergency recovery 173,000 173,000 176,716 3,716
Fire safety/hazardous materials permits 130,000 130,000 136,576 6,576
Multi-dwelling unit inspections 194,000 194,000 194,912 912
Other fire revenues 105,000 115,044 125,176 10,132
Community development:
Planning and zoning fees 490,913 490,913 597,831 106,918
Construction plan and check inspections 3,174,134 3,174,134 3,407,409 233,275
Infrastructure plan check and inspections 525,050 525,050 799,796 274,746
Fire plan check and inspections 350,000 350,000 431,886 81,886
Encroachment permits 140,626 140,626 148,618 7,992
RHIP Fees 435,000 435,000 130,461 (304,539)
Culture and recreation:
Adult athletic fees 122,400 122,400 107,447 (14,953)
Youth athletic fees 33,700 33,700 6,250 (27,450)
Skatepark 2,000 2,000 (2,000)
Instruction fees 91,000 91,000 77,271 (13,729)
Special event fees 92,700 92,700 67,368 (25,332)
Rental and use fees 161,500 161,500 183,475 21,975
Children services 610,000 613,570 720,822 107,252
Teens & seniors 1,500 1,500 497 (1,003)
Aquatics 249,700 260,410 259,616 (794)
Golf course 291,700 292,847 234,899 (57,948)
General government:
Other service charges 422,031 425,719 409,237 (16,482)
Total charges for services 8,522,379 8,559,270 9,112,989 553,719
Other revenues:
Insurance refunds 20,000 20,000 77,795 57,795
Sale of surplus property 9,996 9,996
Other 35,000 43,298 151,530 108,232
Total other revenues 55,000 63,298 239,321 176,023
Total Revenues 66,877,338 67,030,197 67,434,696 404,499
See notes to required supplementary information.
90
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2017
Page 3
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
Expenditures:
Public Safety:
Police protection:
Administration 1,596,342$ 1,737,840$ 1,559,179$ 178,661$
Investigations 2,698,157 2,809,066 2,675,812 133,254
Neighborhood services 252,559 240,232 230,415 9,817
Support services 2,602,839 2,759,474 2,414,266 345,208
Patrol services 7,588,547 7,913,800 7,732,841 180,959
Traffic safety 832,486 965,880 827,889 137,991
Total police protection 15,570,930 16,426,292 15,440,402 985,890
Fire and environmental safety:
Administration 951,213 996,328 880,871 115,457
Emergency response 8,227,432 9,265,392 9,425,296 (159,904)
Fire Apparatus Services 387,121 429,891 341,281 88,610
Hazard protection 970,745 1,028,528 912,853 115,675
Training 113,050 269,270 156,975 112,295
Technical services 33,650 56,746 42,208 14,538
Disaster preparedness 15,825 73,424 63,001 10,423
Total fire and environmental safety 10,699,036 12,119,579 11,822,485 297,094
Total public safety 26,269,966 28,545,871 27,262,887 1,282,984
Transportation:
Transportation planning and engineering 884,566 1,302,729 1,112,187 190,542
Street and sidewalk maintenance 1,362,462 1,472,504 1,283,164 189,340
Traffic signals and street lights 546,948 555,706 502,050 53,656
Creek and flood protection 900,365 973,897 883,403 90,494
Total transportation 3,694,341 4,304,836 3,780,804 524,032
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, 2017
Page 4
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
Culture and Recreation:
Recreation programs:
Recreation administration 762,023$ 785,956$ 731,561$ 54,395$
Aquatics/Sinsheimer park facilities 399,016 402,533 402,050 483
Children's services 926,730 943,568 896,747 46,821
Facilities 225,073 232,295 216,065 16,230
Special events 277,352 279,381 254,379 25,002
Recreational sports 335,492 339,521 324,149 15,372
Golf course 616,852 623,653 614,220 9,433
Ranger services 482,365 486,574 481,340 5,234
Maintenance programs:
Swim center maintenance 480,829 483,375 441,527 41,848
Parks and landscape maintenance 2,589,093 2,620,148 2,235,288 384,860
Tree maintenance 504,311 539,241 556,092 (16,851)
Cultural and social service programs:
Human relations 280,200 280,200 249,796 30,404
Cultural activities 312,896 312,896 309,620 3,276
Total leisure, cultural and social services 8,192,232 8,329,341 7,712,834 616,507
Community Development:
Planning:
Commissions and communities 40,169 46,954 31,328 15,626
Community development administration 887,224 884,969 787,611 97,358
Long-range planning 995,613 1,167,461 765,403 402,058
Development review 1,099,866 1,170,586 1,057,165 113,421
Development services 119,751 173,148 106,319 66,829
Natural resource protection 374,986 392,467 392,717 (250)
Construction regulation:
Building and safety 1,721,816 2,056,085 1,944,590 111,495
Engineering development review 715,456 720,959 639,879 81,080
Rental housing inspection 417,028 464,674 366,943 97,731
CIP project engineering 2,161,814 2,091,996 1,831,513 260,483
Economic health:
Community promotion 403,610 415,358 405,301 10,057
Economic development 247,423 284,152 247,329 36,823
Total community development 9,184,756 9,868,809 8,576,098 1,292,711
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, 2017
Page 5
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
General Government:
Legislation:
Council 166,339$ 166,339$ 155,161$ 11,178$
General administration:
City administration 1,030,446 1,089,258 978,227 111,031
Public works administration 1,017,668 1,053,822 956,918 96,904
Legal services:
City attorney 780,351 1,400,948 1,051,513 349,435
City clerk services:
Administration and records 710,425 888,317 638,203 250,114
Organization support services:
Human resource administration 1,047,886 1,163,535 947,446 216,089
Risk management 4,005,489 4,007,518 3,092,073 915,445
Finance and information technology administration 879,400 1,067,283 671,627 395,656
Revenue management 550,245 563,271 472,301 90,970
Accounting 742,167 920,876 911,558 9,318
Finance non departmental 1,613,282 789,708 150,000 639,708
Network services 2,693,842 2,812,787 2,589,844 222,943
Geographic information services 501,140 574,766 652,811 (78,045)
Support services 384,800 339,142 223,952 115,190
Wellness program 21,700 21,700 13,685 8,015
Building and vehicle maintenance:
Buildings 1,213,828 1,235,914 1,183,301 52,613
Vehicle and equipment maintenance 1,240,801 1,251,739 1,056,202 195,537
Total general government
before cost reimbursement 18,599,809 19,346,923 15,744,822 3,602,101
Cost reimbursement (Note 3 to RSI)(4,164,747) (4,164,747) (4,164,747) -
Total general government 14,435,062 15,182,176 11,580,075 3,602,101
Total Expenditures 61,776,357 66,231,033 58,912,698 7,318,335
Excess of Revenues Over Expenditures 5,100,981 799,164 8,521,998 (7,722,834)
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, 2017
Page 6
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
Other Financing Sources (Uses)
Transfers in 2,353,342$ 2,428,705$ 2,043,830$ 384,875$
Transfers out (8,705,233) (13,678,108) (13,695,206) 17,098
Total other financing uses (6,351,891) (11,249,403) (11,651,376) 401,973
Net Change in Fund Balance (1,250,910) (10,450,239) (3,129,378) (7,320,861)
Fund Balance, Beginning of the Year 29,625,532 29,625,532 29,625,532 -
Fund Balance, End of Year 28,374,622$ 19,175,293$ 26,496,154$ (7,320,861)$
See notes to required supplementary information.
94
City of San Luis Obispo, California
Schedule of Funding Progress for
Other Post-Employment Benefits (OPEB)
For the Fiscal Year Ended June 30, 2017
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 reports 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 4,788,000$ 13,173,000$ 8,385,000$ 36.3% 29,989,000$ 28.0%
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.
95
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, 2017
Last 10 Years *
Fiscal Year 2016-17 2015-16 2014-15
Measurement Period 2015-16 2014-15 2013-14
Total pension liability:
Service Cost 3,580,882$ 3,578,172$ 3,703,087$
Interest on total pension liability 13,688,523 13,193,597 12,756,967
Difference between expected and actual experience (1,160,933) (2,433,791)
Changes in assumptions (3,057,724)
Benefit payments, including refunds of employee contributions (9,476,508) (8,808,668) (8,258,611)
Net change in total pension liability 6,631,964 2,471,586 8,201,443
Total pension liability - beginning 183,043,680 180,572,094 172,370,651
Total pension liability - ending (a)189,675,644$ 183,043,680$ 180,572,094$
Plan fiduciary net position:
Contributions - employer 6,122,173$ 5,027,356$ 4,631,254$
Contributions - employee 1,666,606 1,509,834 1,664,654
Net investment income 677,557 2,673,657 17,746,607
Benefit payments (9,476,508) (8,808,668) (8,258,611)
Administrative expense (72,028) (133,069)
Net change in plan fiduciary net position (1,082,200) 269,110 15,783,904
Plan fiduciary net position - beginning 118,212,543 117,943,433 102,159,529
Plan fiduciary net position - ending (b)117,130,343$ 118,212,543$ 117,943,433$
Net pension liability (asset) - ending (a) - (b)72,545,301$ 64,831,137$ 62,628,661$
Plan fiduciary net position as a percentage of the total pension liability 61.75% 64.58% 65.32%
Covered - employee payroll 20,499,668$ 19,769,997$ 19,235,818$
Net pension liability as percentage of covered-employee payroll 353.89% 327.93% 325.58%
* Fiscal year 2017 was the 3rd year of implementation therefore only three years are shown. Information is required only
for measurement periods for which GASB 68 is applicable. The current measurement period is the year ended June 30,
2016.
See notes to required supplementary information.
96
City of San Luis Obispo, California
Schedule of the Plan Contributions
Miscellaneous Agent Multiple-Employer Plan
June 30, 2017
Last 10 Years *
Fiscal Year 2016-17 2015-16 2014-15 2013-14
Actuarially determined contribution 6,776,945$ 6,122,173$ 5,027,356$ 4,631,254$
Contributions in relation to the actuarially determined contributions (6,776,945) (6,122,173) (5,027,356) (4,631,254)
Contribution deficiency (excess)-$ -$ -$ -$
Covered-employee payroll 21,841,841 20,499,668 19,769,997 19,235,818
Contributions as a percentage of covered-employee payroll 31.03% 29.86% 25.43% 24.08%
* Fiscal year 2017 was the 3rd year of implementation therefore only three years are shown. Information is required only
for measurement periods for which GASB 68 is applicable. The current measurement period is the year ended June 30,
2016.
See notes to required supplementary information.
97
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, 2017
Last 10 Years *
Fiscal Year 2016-17 2015-16 2014-15
Measurement Period 2015-16 2014-15 2013-14
Employer's Proportion of the Collective Net Pension Liability 1.2510%1.3654% 1.3754%
Employer's Proportionate Share of the Collective Net Pension Liability 64,792,760$ 56,260,280$ 51,592,420$
Employer's Covered-Employee Payroll 10,643,123$ 10,849,863$ 10,768,119$
Employer's Proportionate Share of the Net Pension Liability as a
Percentage of its Covered-Employee Payroll 608.78%518.53% 479.12%
Plan's Share of the Fiduciary Net Position as a
Percentage of the Employer's Total Pension Liability 72.69%77.27% 78.83%
* Fiscal year 2017 was the 3rd year of implementation therefore only three years are shown. Information is required only
for measurement periods for which GASB 68 is applicable. The current measurement period is the year ended June 30,
2016.
See notes to required supplementary information.
98
City of San Luis Obispo, California
Schedule of the City’s Contributions
Safety Cost-Sharing Plans
As of June 30, 2017
Last 10 Years *
Fiscal Year 2016-17 2015-16 2014-15 2013-14
Actuarially determined contribution 5,549,915$ 5,074,217$ 4,350,871$ 4,226,211$
Contributions in relation to the actuarially determined contributions (6,299,915) (5,824,217) (4,650,871) (5,161,211)
Contribution deficiency (excess)(750,000)$ (750,000)$ (300,000)$ (935,000)$
Covered-employee payroll 10,614,437 10,643,123 10,849,863 10,768,119
Contributions as a percentage of covered-employee payroll 59.35% 54.72% 42.87% 47.93%
* Fiscal year 2017 was the 3rd year of implementation therefore only three years are shown. Information is required only
for measurement periods for which GASB 68 is applicable. The current measurement period is the year ended June 30,
2016.
See notes to required supplementary information.
99
City of San Luis Obispo, California
Notes to Required Supplementary Information
June 30, 2017
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, 2017 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
Fire and environmental safety:
Emergency Response (159,904)
Recreation programs:
Tree maintenance (16,851)
Planning:
Natural resource protection (250)
Organizational support services:
Geographic information services (78,045)
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, 2015. The actuarial report for the period ending June 30,
2015 was used to determine the 2015-17 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.
100
City of San Luis Obispo, California
Notes to Required Supplementary Information
June 30, 2017
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, 2015 valuation date. 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. In 2016, there were no changes in assumptions. In 2015, amounts reported reflect an
adjustment of the discount rate from 7.50% (net of administrative expense) to 7.65%. In 2014, amounts reported
were based on the 7.5% discount rate.
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.
101
City of San Luis Obispo, California
Notes to Required Supplementary Information
June 30, 2017
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, 2015 as they have minimal cost impact.
2. Changes in assumptions. In 2016, there were no changes in assumptions. In 2015, amounts reported reflect an
adjustment of the discount rate from 7.50% (net of administrative expense) to 7.65%. In 2014, amounts reported
were based on the 7.5% discount rate.
OTHER SUPPLEMENTARY INFORMATION
AND COMBINING AND INDIVIDUAL FUND
STATEMENTS AND SCHEDULES
103
City of San Luis Obispo, California
Half Percent Sales Tax Measure Funding Schedule
For the Fiscal Year Ended June 30, 2017
The following summarizes revenues and expenditures for the current year for the Half Percent Sales Tax Measure
priorities.
Budget Actual
Revenues
Local Sales Tax Fund 7,391,000$ 7,331,660$
Local Sales Tax Fund 50,000 44,796
7,441,000 7,376,456
Expenditures
Operating Programs:
Community Development 256,639 226,895
Public Works 1,137,787 1,049,972
Parks 129,530 114,116
Police 786,655 730,840
Fire 5,000 5,000
2,315,611 2,126,823
Capital Programs:Budget Actual Encumbrances Carryover
Administration
Completed Projects 201,516 4,491 $ -$ *
Octagon Barn Facility 202,718 17,965 184,753
Laguna Lake Dredge/Mgt 166,368 114,045 6,861 45,462
Open Space Protection 600,000 139,143 460,857
1,170,602 275,644 6,861 691,072
Public Works
Street R & R Mainc Account 33,679 33,679
Master street R 1,290,693 166,825 1,123,868
Street R & R Main Account 90,235 9,075 40,690 40,470
Road Sealing 2016 868,620 868,620 -
Master CMP Replacement 1,542,697 372,207 1,170,490
Downtown Renewal 6,000 6,000
Sidewalk Repair 241,361 63,832 177,529
Street asphalt grind 89,100 89,100 -
CMR replacement 2016 279,771 279,771 -
Streets backhoe 127,793 127,793 -
Street marking replacement 20,000 14,247 5,753
3/4 Ton Pickups 69,000 64,977 4,023
Signal Truck 91,000 91,000 -
Broad & Buchon Curb Ramp 16,475 16,475 -
Madonna & LOVR Rehab 362,111 39,820 195,417 126,874
Buchon Santa Rosa Storm Drain 3,875 3,858 17
LOVR Crack Sealing 43,000 42,628 372
Sidewalk Repair 16-17 23,500 19,499 4,001
Sidewalk Access Improvement 45,000 45,000
Traffic Safety Report 28,196 25,196 4,000 (1,000)
Bicycle Facility Improvement 62,318 34,325 27,993 -
Traffic Operation Report Implementation 30,000 19,091 10,909
104
City of San Luis Obispo, California
Half Percent Sales Tax Measure Funding Schedule, continued
For the Fiscal Year Ended June 30, 2017
Page 2
Capital Programs:Budget Actual Encumbrances Carryover
Public Works - continued
Bob Jones Octagon Barn 42,531$ $ $ 42,531$
BTP Implementation 222,664 27,919 194,745
Bike Bridge/Phillips 250,000 250,000
Safe Route to School 44,800 206 44,594
Monterey/Oso Traffic Signal 221,764 4,136 217,628
Islay Hill Pathway 31,346 31,346 -
Higuera Crosswalk 43,500 43,500 -
RRST Laurel & Orcutt 150,695 150,695 -
Neighborhood Traffic 20,000 19,648 352
Parking Structure Assessment 8,333 8,333
6,400,057 2,445,689 448,200 3,506,168
Parks
Bike Pathway Main 38,859 450 38,409
Parks Major Maintenance 466,670 42,020 5,672 418,978
Railroad Trail Maintenance 2016 89,795 89,795 -
Mission Plaza Railroad 80,000 80,000
Islay/French/Santa Rosa Improvement 2,207 (2,207)
French & Islay Tennis 15,000 12,370 2,630
Mission Plaza Railing 60,000 125 59,875
Enhanced Tree Maintenance 185,000 184,106 894
Golf Course Restroom 9,620 9,620 -
Open Space Maintenance 512,638 266,166 91,915 154,557
Golf Compact Pickup 28,500 24,436 4,064
1,486,082 631,295 98,481 756,306
Public Safety
Thinkstream CAD 25,000 25,000
911 Phone System 217,402 9,634 207,768
Police CAD Hardware 313,358 297,532 18,417 (2,591)
Police Vehicles 292,692 83,094 90,856 118,742
Fire Prevention Support (5,260) (5,260) -
Fire Station 2 Dorm Remodel 153,521 153,521 -
Fire Epcr Records Support 52,195 35,465 16,730
Ambulance Pkg Support 180,000 54,991 124,881 128
Emergency Resp Support 120,907 95,443 11,836 13,628
Fire ComandVehicle 10,000 3,500 - 6,500
1,359,815 727,920 245,990 385,905
Capital Expenditure 10,416,556$ 4,080,548$ 799,532$ 5,339,451$
Net Change in Fund Balance (5,291,167) 1,169,085
Fund balance, beginning of year 4,732,397 4,732,397
Fund balance, end of year (558,770)$ 5,901,482$
* Due to the nature of these projects, no carryover into the following fiscal year.
105
City of San Luis Obispo, California
Half Percent Sales Tax Measure Funding Schedule
For the Fiscal Year Ended June 30, 2017
The following summarizes revenues and expenditures for the year ended June 30, 2017 for the Half Percent Sales Tax
Measure* priorities.
Revenues:
Sales and use tax - Measure G 1/2 cent add-on tax 7,331,660$
Use of money and property 44,796
Total revenues 7,376,456
Expenditures:
Current:
Public safety 735,840
Transportation 1,049,972
Culture and recreation 114,116
Community development 226,895
Capital outlay
Public safety 727,920
Transportation 2,445,689
Culture and recreation 631,295
General government 275,644
Total expenditures 6,207,371
Excess of revenues over expenditures 1,169,085
Net change in fund balance 1,169,085
Fund balance, beginning of year 4,732,397
Fund balance, end of year 5,901,482$
* 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.
106
City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2017
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.
107
City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2017
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.
Capital Projects Funds
The following eleven capital project funds are used by the City to account for the financial resources used in the
construction or acquisition of major capital facilities or equipment (with the exception of those financed primarily through
proprietary funds). Budgets are prepared using the modified accrual basis of accounting consistent with U.S. generally
accepted accounting principles on a multi-year project basis. Accordingly, budgetary comparisons for the capital projects
funds are not presented in the accompanying other supplementary information.
Capital Outlay Fund. This fund was established to account for all of the City’s construction projects and capital purchases
in excess of $25,000 with the exception of those funded through non-major capital project funds and Enterprise Funds.
Financing is provided primarily through transfers in from the General Fund, and from State and Federal Grants.
Parkland Development Fund. This fund was established to account for construction projects related to park acquisition
and development that will be financed primarily with park in-lieu fees.
Open Space Protection Fund. This fund was established to account for projects funded as part of the City’s open space
protection program to enhance open space and agricultural conservation on lands within and surrounding the City,
improve passive recreational and nature study opportunities, and restore and enhance wildlife habitat. Projects in this
fund will be financed with General Fund contributions, outside contributions, and State and Federal grants.
Airport Area Impact Fee Fund. This fund was established to account for interim annexation fees collected for the specific
plan and related infrastructure master plans for annexing the airport area to the City.
Los Osos Valley Road (LOVR) Sub-Area Fee Fund. This fund was established to account for sub-area impact fees
collected from development activity in the Los Osos Valley Road sub-area boundary.
Waste Water Impact Fee Fund. This fund was established to account for the collection of development impact fees
collected from the Tank Farm Road, Irish Hills, and Silver City sub-areas.
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.
108
City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2017
Page 3
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.
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.
109
City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2017
Page 4
Capital Improvement Board 2012 Refunding Lease Revenue Bonds. On May 24, 2012 the Board issued $5,050,000 of
2012 Lease Revenue Refunding Bonds. These bonds were issued to refinance the outstanding 2001 Lease Revenue
Bonds, Series C, which will be redeemed on December 1, 2029. The 2001 bonds were used to purchase property and
build athletic fields; purchase property for police station expansion; purchase Downtown Plan properties.
The Board has entered into a lease agreement with the City under which the City is responsible for making lease payments
to fund the annual debt service requirements.
2013 Fire Engine/Truck Lease-Purchase Financing. Lease-purchase financing was obtained in order to purchase an
engine. Debt service obligations are recorded in the Debt Service Fund.
Capital Improvement Board 2014 Lease Revenue Bonds. In 2014 the Board issued $7,580,000 of 2014 Lease Revenue
Bonds. These bonds were issued to finance the expansion of the Los Osos Valley Road interchange at U.S. 101. Debt
service related to the interchange is recorded in the Debt Service Fund.
The Board has entered into a lease agreement with the City under which the City is responsible for making lease payments
to fund the annual debt service requirements.
2016 Mobile Data Computers Lease. Lease-purchase financing was obtained in order to purchase mobile data computers,
hardware to install the computers in City vehicles, installation costs, and wireless network components. Debt service
obligations are recorded in the Debt Service Fund.
2017 Fire Engine and Street Sweeper. Lease-purchase financing was obtained in order to purchase a fire truck and street
sweeper. Debt service obligations are recorded in the Debt Service Fund.
110
City of San Luis Obispo, California
Combining Balance Sheet
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2017
Downtown
BID
Transportation
Development
Act (TDA)Tourism BID Gas Tax
Assets
Cash and cash equivalents $ $ 7,130$ $
Investments 315,512
Accounts receivable 200,977
Due from other governments
Accrued interest receivable 765
Prepaid expense
Cash held by fiscal agent
Total assets -$ -$ 524,384$ -$
Liabilities and Fund Balance
Liabilities:
Accounts payable 5,457$ $ 94,355$ $
Accrued liabilities 596
Due to other funds
Unearned revenue
Total liabilities 5,457 - 94,951 -
Fund balance:
Unspendable
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 (5,457) 429,433
Total fund balance (5,457) - 429,433 -
Total liabilities and fund balance -$ -$ 524,384$ -$
Special Revenue Funds
111
Community
Development
Block Grant
(CDBG)
Law
Enforcement
Grants
Public Art
Contributions Insurance
76,868$ $ 10,367$ 1,017,485$
458,752
21,560
49,813
1,452 1,547
126,681$ 21,560$ 470,571$ 1,019,032$
$ 774$ 1,693$ $
95 -
95 774 1,693 -
20,786
468,878
126,586 1,019,032
126,586 20,786 468,878 1,019,032
126,681$ 21,560$ 470,571$ 1,019,032$
Special Revenue Funds
112
City of San Luis Obispo, California
Combining Balance Sheet
Nonmajor Governmental Funds, continued
For the Fiscal Year Ended June 30, 2017
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
Unearned revenue
Total liabilities
Fund balance:
Unspendable
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
Capital
Outlay
Parkland
Development
Open Space
Protection
Airport
Area Impact
Fee
LOVR Sub-
Area Fee
525,199$ 49,798$ 12,974$ 24,433$ 16,130$
2,140,093 2,203,685 574,126 1,081,202 713,785
117,604
58,106
3,255 6,522 1,643 3,335 2,282
2,844,257$ 2,260,005$ 588,743$ 1,108,970$ 732,197$
241,955$ $ $ $ 603,250$
114,970
356,925 - - - 603,250
2,487,332
1,108,970 128,947
588,743
2,260,005
2,487,332 2,260,005 588,743 1,108,970 128,947
2,844,257$ 2,260,005$ 588,743$ 1,108,970$ 732,197$
Capital Projects Funds
113
Waste Water
Impact Fee
Fleet
Replacement
Info Tech
Replacement
Affordable
Housing
Transportation
Impact Fee Infrastructure Debt Service
Total
Nonmajor
Governmental
Funds
150,206$ 35,313$ 70,167$ 56,549$ 167,574$ 313,547$ $ 2,533,740$
1,562,680 3,105,052 2,502,399 7,415,533 22,072,819
340,141
107,919
3,352 9,664 8,052 22,460 946 65,275
5,642 5,642
2,247,713 2,247,713
150,206$ 1,601,345$ 3,184,883$ 2,567,000$ 7,605,567$ 314,493$ 2,253,355$ 27,373,249$
$ 56,461$ 17,187$ $ 48,410$ $ $ 1,069,542$
691
128,102 128,102
114,970
- 56,461 17,187 - 48,410 - 128,102 1,313,305
5,642 5,642
2,119,611 2,119,611
20,786
2,567,000 5,054,332
7,557,157 8,795,074
588,743
2,728,883
500,000 400,000 900,000
150,206 1,044,884 2,767,696 314,493 5,846,873
150,206 1,544,884 3,167,696 2,567,000 7,557,157 314,493 2,125,253 26,059,944
150,206$ 1,601,345$ 3,184,883$ 2,567,000$ 7,605,567$ 314,493$ 2,253,355$ 27,373,249$
Capital Projects Funds
114
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, 2017
Downtown
BID
Transportation
Development
Act (TDA) Tourism BID Gas Tax
Revenues:
Use of money and property $ $ 2,744$ $
Subventions and grants 40,501 913,428
Charges for services 225,894 1,478,345
Other revenues
Total revenues 225,894 40,501 1,481,089 913,428
Expenditures:
Current:
General Government
Public safety
Transportation
Leisure, cultural and social services
Community development 232,473 1,363,063
Debt service:
Principal
Interest
Capital:
General Government
Public safety
Transportation
Leisure, cultural and social services
Community development
Total expenditures 232,473 - 1,363,063 -
Excess (deficiency) of revenues over
(under) expenditures (6,579) 40,501 118,026 913,428
Other financing sources (uses):
Issuance of debt
Transfers in
Transfers out (40,501) (28,868) (913,428)
Total other financing
sources (uses) - (40,501) (28,868) (913,428)
Net change in fund balance (6,579) - 89,158 -
Fund balance, beginning of year 1,122 - 340,275 -
Special Revenue Funds
115
Community
Development
Block Grant
(CDBG)
Law
Enforcement
Grants
Public Art
Contributions Insurance
$ $ 4,294$ 6,391$
187,100 141,359
2,523 138,868
187,100 143,882 143,162 6,391
317,109
78,860 750,000
35,594
129,260
58,258
101,548
62,499
230,808 137,118 98,093 1,067,109
(43,708) 6,764 45,069 (1,060,718)
153,969 1,739,898
(9,470)
153,969 (9,470) - 1,739,898
110,261 (2,706) 45,069 679,180
16,325 23,492 423,809 339,852
Special Revenue Funds
116
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, 2017
Page 2
Revenues:
Use of money and property
Subventions and grants
Charges for services
Other revenues
Total revenues
Expenditures:
Current:
General Government
Public safety
Transportation
Leisure, cultural and social services
Community development
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, beginning of year
Capital
Outlay
Parkland
Development
Open
Space
Protection
Airport
Area Impact
Fee
LOVR Sub-
Area Fee
6,537$ 16,450$ 4,697$ 9,577$ 5,946$
264,154 63,352
505,886 7,419 24,437 422,858
29,510
300,201 522,336 75,468 34,014 428,804
740,489 4,142 423,344
36,983
876,924 30,000
571,848
2,328,516 5,000 10,482
1,246,805
36,074
5,801,565 4,142 36,074 5,000 463,826
(5,501,364) 518,194 39,394 29,014 (35,022)
5,034,473 900,000
5,034,473 900,000 - - -
(466,891) 1,418,194 39,394 29,014 (35,022)
2,954,223 841,811 549,349 1,079,956 163,969
Capital Projects Funds
117
Waste Water
Impact
Fleet
Replacement
Info Tech
Replacement
Affordable
Housing
Transportation
Impact Fee Infrastructure Debt Service
Total Nonmajor
Governmental
Funds
771$ 10,898$ 27,552$ 5,246$ (7,641)$ 2,728$ 3,639$ 99,829$
1,609,894
149,435 1,489,668 1,615,385 6,060,718
177,625 207,135
150,206 188,523 27,552 1,494,914 1,607,744 2,728 3,639 7,977,576
21,418 338,527
828,860
1,066 1,169,041
72,577
1,460,739 23,680 4,116,139
2,013,629 2,013,629
1,208,929 1,208,929
89,825 89,825
920,585 221,763 1,772,454
252,320 246,587 2,944,453
112,615 1,421,919
218,301 30,000 284,375
- 1,594,712 221,763 1,490,739 270,267 - 3,243,976 16,260,728
150,206 (1,406,189) (194,211) 4,175 1,337,477 2,728 (3,240,337) (8,283,152)
1,141,468 1,141,468
2,621,000 3,245,866 13,695,206
(992,267)
- 1,141,468 2,621,000 - - - 3,245,866 13,844,407
150,206 (264,721) 2,426,789 4,175 1,337,477 2,728 5,529 5,561,255
- 1,809,605 740,907 2,562,825 6,219,680 311,765 2,119,724 20,498,689
Capital Projects Funds
118
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, 2017
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Charges for services
Assessments 214,000$ 214,000$ 225,894$ 11,894$
Total Revenues 214,000 214,000 225,894 11,894
Expenditures:
Current
Community development 214,000 214,000 232,473 18,473
Total Expenditures 214,000 214,000 232,473 18,473
Excess of Revenues Over Expenditures - - (6,579) (6,579)
Net Change in Fund Balance - - (6,579) (6,579)
Fund Balance, Beginning of Year 1,122 1,122 1,122 -
Fund Balance, End of Year 1,122$ 1,122$ (5,457)$ (6,579)$
Budget
119
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, 2017
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Subventions and grants 41,100$ 41,100$ 40,501$ (599)$
Total Revenues 41,100 41,100 40,501 (599)
Excess of Revenues Over Expenditures 41,100 41,100 40,501 (599)
Other Financing Uses:
Operating transfers out (41,100) (41,100) (40,501) 599
Net Change in Fund Balance - - - -
Fund Balance, Beginning of Year - - - -
Fund Balance, End of Year -$ -$ -$ -$
Budget
120
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, 2017
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property 1,100$ 1,100$ 2,744$ 1,644$
Assessments 1,433,975 1,433,975 1,478,345 44,370
Total Revenues 1,435,075 1,435,075 1,481,089 46,014
Expenditures:
Current
Community development 1,411,394 1,557,624 1,363,063 (194,561)
Total Expenditures 1,411,394 1,557,624 1,363,063 (194,561)
Excess of Revenues Over (Under) Expenditures 23,681 (122,549) 118,026 240,575
Other Financing Uses:
Operating transfers out (28,679) (28,679) (28,868)(189)
Net Change in Fund Balance (4,998) (151,228) 89,158 240,386
Fund Balance, Beginning of Year 340,275 340,275 340,275 -
Fund Balance, End of Year 335,277$ 189,047$ 429,433$ 240,386$
Budget
121
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, 2017
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Subventions and grants 965,000$ 965,000$ 913,428$ (51,572)$
Total Revenues 965,000 965,000 913,428 (51,572)
Excess of Revenues Over Expenditures 965,000 965,000 913,428 (51,572)
Other Financing Uses:
Operating transfers out (965,000) (965,000) (913,428) 51,572
Net Change in Fund Balance - - - -
Fund Balance, Beginning of Year - - - -
Fund Balance, End of Year -$ -$ -$ -$
Budget
122
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, 2017
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Subventions and grants 405,515$ 405,515$ 187,100$ (218,415)$
Total Revenues 405,515 405,515 187,100 (218,415)
Expenditures:
Current
Community development 417,924 545,824 129,260 (416,564)
Transportation 105,000 209,999 101,548 (108,451)
Total Expenditures 522,924 755,823 230,808 (525,015)
Excess of Revenues Over (Under) Expenditures (117,409) (350,308) (43,708) 306,600
Other Financing Uses:
Operating transfers in 153,969 153,969 153,969 -
Net Change in Fund Balance 36,560 (196,339) 110,261 306,600
Fund Balance, Beginning of Year 16,325 16,325 16,325 -
Fund Balance, End of Year 52,885$ (180,014)$ 126,586$ 306,600$
Budget
123
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, 2017
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Subventions and grants 320,818$ 163,966$ 141,359$ (22,607)$
Charges for services 2,000 2,523 523
Total Revenues 320,818 165,966 143,882 (22,084)
Expenditures:
Public Safety 319,593 104,483 78,860 (25,623)
Capital Projects 69,000 127,865 58,258 (69,607)
Total Expenditures 388,593 232,348 137,118 (95,230)
Excess of Revenues Over (Under) Expenditures (67,775) (66,382) 6,764 73,146
Other Financing Uses:
Operating transfers out (9,470) (9,470) (9,470)-
Net Change in Fund Balance (77,245) (75,852) (2,706) 73,146
Fund Balance, Beginning of Year 23,492 23,492 23,492 -
Fund Balance, End of Year (53,753)$ (52,360)$ 20,786$ 73,146$
Budget
124
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, 2017
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property 2,100$ 2,100$ 4,294$ 2,194$
Other revenues 40,000 40,000 138,868 98,868
Total Revenues 42,100 42,100 143,162 101,062
Expenditures:
Leisure, cultural and social services 35,594 35,594
Capital Projects 39,900 314,097 62,499 (251,598)
Total Expenditures 39,900 314,097 98,093 (216,004)
Excess of Revenues Over (Under) Expenditures 2,200 (271,997) 45,069 317,066
Other Financing Uses:
Operating transfers in 39,900 39,900 (39,900)
Net Change in Fund Balance 42,100 (232,097) 45,069 277,166
Fund Balance, Beginning of Year 423,809 423,809 423,809 -
Fund Balance, End of Year 465,909$ 191,712$ 468,878$ 277,166$
Budget
125
City of San Luis Obispo, California
Agency Funds
For the Fiscal Year Ended June 30, 2017
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.
126
City of San Luis Obispo, California
Combining Statement of Changes in Assets and Liabilities
Agency Funds
For the Fiscal Year Ended June 30, 2017
Balance Balance
June 30, 2016 Additions Deductions June 30, 2017
Whale Rock Fund
Assets
Cash and cash equivalents 14,576$ 49,958$ 26,410$ 38,124$
Investments 1,445,201 1,410,599 1,168,727 1,687,073
Accounts receivable 42,392 597,435 621,725 18,102
Accrued interest receivable 3,590 5,609 3,590 5,609
Prepaid expense - 4,200 4,200
Deferred outflows of resources - pensions 162,511 227,150 123,741 265,920
Capital assets, net of
accumulated depreciation 983,829 81,106 6,583 1,058,352
Total Assets 2,652,099$ 2,376,057$ 1,950,776$ 3,077,380$
Liabilities
Accounts payable 75,071$ 520,861$ 538,465$ 57,467$
Accrued salaries 32,206 16,436 19,716 28,926
Other liabilities 30,976 2,001 10,764 22,213
Net pension liability 1,082,681 257,654 128,827 1,211,508
Deferred inflows of resources - pensions 163,079 51,625 103,248 111,456
Due to agency participants 1,268,086 6,237,613 5,859,889 1,645,810
Total Liabilities 2,652,099$ 7,086,190$ 6,660,909$ 3,077,380$
Balance Balance
June 30, 2016 Additions Deductions June 30, 2017
Jack House Fund
Assets
Cash and cash equivalents 14,215$ 7,925$ 6,245$ 15,895$
Accounts receivable 98 98 -
Accrued interest receivable 33 47 33 47
Total Assets 14,346$ 7,972$ 6,376$ 15,942$
Liabilities
Accounts payable 7$ 1,662$ 1,663$ 6$
Other liabilities 14,339 7,840 6,243 15,936
Total Liabilities 14,346$ 9,502$ 7,906$ 15,942$
127
City of San Luis Obispo, California
Combining Statement of Changes in Assets and Liabilities
Agency Funds, continued
For the Fiscal Year Ended June 30, 2017
Page 2
Balance Balance
June 30, 2016 Additions Deductions June 30, 2017
Narcotics Task Force Fund
Assets
Cash and cash equivalents 47$ 47$ -$
Total Assets 47$ -$ 47$ -$
Liabilities
Due to agency participants 47$ 47$ -$
Total Liabilities 47$ -$ 47$ -$
Balance Balance
June 30, 2016 Additions Deductions June 30, 2017
Bomb Task Force Fund
Assets
Cash and cash equivalents 268,523$ 38,827$ 6,408$ 300,942$
Accrued interest receivable 656 909 656 909
Total Assets 269,179$ 39,736$ 7,064$ 301,851$
Liabilities
Accounts payable 587$ 306,176$ 5,994$ 300,769$
Due to agency participants 268,592 39,081 306,591 1,082
Total Liabilities 269,179$ 345,257$ 312,585$ 301,851$
Balance Balance
June 30, 2016 Additions Deductions June 30, 2017
Hazardous Materials Task Force Fund
Assets
Cash and cash equivalents 89,148$ 68,387$ 52,554$ 104,981$
Accrued interest receivable 222 328 222 328
Total Assets 89,370$ 68,715$ 52,776$ 105,309$
Liabilities
Accounts payable 9,901$ 31,438$ 37,033$ 4,306$
Accrued salaries 625$ 63 626 62
Due to agency participants 78,844 69,119 47,022 100,941
Total Liabilities 89,370$ 100,620$ 84,681$ 105,309$
128
City of San Luis Obispo, California
Combining Statement of Changes in Assets and Liabilities
Agency Funds, continued
For the Fiscal Year Ended June 30, 2017
Page 3
Balance Balance
June 30, 2016 Additions Deductions June 30, 2017
General Agency Fund
Assets
Cash and cash equivalents 1,350,555$ 1,313,885$ 1,261,633$ 1,402,807$
Accounts receivable 520 73,682 74,202 -
Other assets 30,864 30,864
Total Assets 1,381,939$ 1,387,567$ 1,335,835$ 1,433,671$
Liabilities
Accounts payable 48,835$ 1,216,936$ 1,159,124$ 106,647$
Other liabilities 1,333,104 1,440,414 1,446,494 1,327,024
Total Liabilities 1,381,939$ 2,657,350$ 2,605,618$ 1,433,671$
Balance Balance
June 30, 2016 Additions Deductions June 30, 2017
Duvall Fund
Assets
Cash and cash equivalents 157,995$ 1,510$ 219$ 159,286$
Accrued interest receivable 386 481 387 480
Total Assets 158,381$ 1,991$ 606$ 159,766$
Liabilities
Other liabilities 158,381$ 1,604$ 219$ 159,766$
Total Liabilities 158,381$ 1,604$ 219$ 159,766$
Balance Balance
June 30, 2016 Additions Deductions June 30, 2017
Boysen Ranch Conservation Easement
Assets
Cash and cash equivalents 395,275$ 3,777$ 547$ 398,505$
Accrued interest receivable 965 1,202 965 1,202
Total Assets 396,240$ 4,979$ 1,512$ 399,707$
Liabilities
Accounts payable 24,567$ 24,567$
Other liabilities 371,673 4,014 547 375,140
Total Liabilities 396,240$ 4,014$ 547$ 399,707
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, 2017
Page 4
Balance Balance
June 30, 2016 Additions Deductions June 30, 2017
PEG - City of San Luis Obispo
Assets
Cash and cash equivalents 136,418$ 44,474$ 1,547$ 179,345$
Accounts receivable 9,911 9,911 -
Accrued interest receivable 325 488 325 488
Total Assets 146,654$ 44,962$ 11,783$ 179,833$
Liabilities
Other liabilities 146,654$ 34,726$ 1,547$ 179,833$
Total Liabilities 146,654$ 34,726$ 1,547$ 179,833$
Balance Balance
June 30, 2016 Additions Deductions June 30, 2017
PEG - SLCUSD
Assets
Cash and cash equivalents 227,883$ 41,633$ 339$ 269,177$
Accounts receivable 9,910 9,910 -
Accrued interest receivable 548 763 548 763
Total Assets 231,647$ 42,396$ 10,797$ 269,940$
Liabilities
Other liabilities 238,341$ 31,937$ 338$ 269,940$
Total Liabilities 231,647$ 31,937$ 338$ 269,940$
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, 2017
Page 5
Balance Balance
June 30, 2015 Additions Deductions June 30, 2017
Totals - All Agency Funds
Assets
Cash and cash equivalents 2,654,635$ 1,570,376$ 1,355,949$ 2,869,062$
Investments 1,445,201 1,410,599 1,168,727 1,687,073
Accounts receivable 62,831 671,117 715,846 18,102
Accrued interest receivable 6,725 9,827 6,504 9,826
Other assets 30,864 4,200 35,064
Deferred outflows of resources 162,511 227,150 123,741 265,920
Capital assets, net of
accumulated depreciation 983,829 81,106 6,583 1,058,352
Total Assets 5,346,596$ 3,974,375$ 3,377,350$ 5,943,399$
Liabilities
Accounts payable 158,968$ 2,077,073$ 1,742,279$ 493,762$
Accrued salaries 32,831 16,499 20,342 28,988
Other liabilities 2,293,468 1,522,536 1,466,152 2,349,852
Net pension liability 1,082,681 257,654 128,827 1,211,508
Deferred inflows of resources 163,079 51,625 103,248 111,456
Due to agency participants 1,615,569 6,345,813 6,213,549 1,747,833
Total Liabilities 5,346,596$ 10,271,200$ 9,674,397$ 5,943,399$
STATISTICAL SECTION (UNAUDITED)
132
City of San Luis Obispo, California
Statistical Section Overview
June 30, 2017
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.
133
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
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Governmental activities:
Net investment in capital assets 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$ 165,100,426$
Restricted 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 2,268,499
Unrestricted 30,935,700 38,928,500 26,204,500 26,401,500 23,583,000 29,927,200 (66,610,104) (57,421,778) (49,031,893) (41,496,841)
Total governmental activities net position 154,005,100$ 160,864,100$ 158,191,100$ 162,091,100$ 167,890,300$ 174,541,500$ 83,481,601$ 95,359,286$ 117,180,486$ 125,872,084$
Business-type activities:
Net investment in capital assets 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$ 131,149,516$
Restricted 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 2,276,526
Unrestricted 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 53,421,102
Total business-type activities net position 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$ 186,847,144$
Primary government (City wide totals):
Net investment in capital assets 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$ 296,249,942$
Restricted 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 4,545,025
Unrestricted 62,808,900 70,258,000 64,450,400 62,895,100 61,342,000 71,639,400 (31,385,117) (15,304,635) 463,327 11,924,261
Total primary government net position 290,925,000$ 305,788,100$ 311,596,500$ 318,676,500$ 327,900,800$ 342,018,100$ 240,071,870$ 265,539,487$ 297,344,709$ 312,719,228$
134
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
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Expenses:
Governmental activities:
Public safety 28,189,900$ 29,330,300$ 27,687,200$ 26,774,800$ 27,993,900$ 28,859,200$ 29,651,702$ 26,881,732$ 29,318,821$ 31,806,692$
Transportation 6,463,200 6,619,300 7,116,400 8,809,400 7,778,000 8,551,500 8,975,047 11,457,311 8,792,028 9,668,840
Leisure, cultural and social services 9,518,400 9,778,900 9,445,600 9,299,200 9,500,300 10,078,700 10,239,853 10,332,740 9,808,545 9,824,262
Community development 7,822,300 8,233,600 11,020,400 8,166,300 8,782,200 8,866,900 10,183,782 10,960,778 12,900,275 14,656,604
Interest on long-term debt 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 1,170,984
Total governmental activities expenses 52,944,400 54,913,600 56,617,700 54,298,100 55,252,400 57,573,500 60,271,589 60,647,572 62,171,137 67,127,382
Business-type activities:
Water 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 19,069,967
Sewer 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 11,683,262
Parking 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 3,791,493
Transit 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 4,076,871
Golf 633,600 722,100 708,400 724,100
Total business-type activities expenses 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 38,621,593
Total primary government expenses 79,222,000$ 83,322,700$ 84,592,300$ 87,673,600$ 89,614,900$ 92,364,400$ 96,190,550$ 95,458,658$ 99,138,183$ 105,748,975$
Program Revenues:
Governmental activities:
Charges for services:
Public safety 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$ 1,771,383$
Transportation 1,150,000 1,492,800 241,700 2,690,200 418,000 221,200 1,321,323 1,270,787 1,691,757 1,793,010
Leisure, cultural and social services 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 3,501,837
Community development 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 8,144,128
Operating grants and contributions 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 2,488,706
Capital grants and contributions 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 40,531
Total governmental activities program revenues 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 17,739,595
135
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
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Business-type activities:
Charges for services:
Water 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$ 20,180,931$
Sewer 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 16,272,533
Parking 3,508,100 3,496,100 3,564,700 3,533,300 4,693,400 3,998,730 4,905,494 7,408,729 4,666,970
Transit 520,500 607,000 551,600 593,100 552,900 682,700 688,585 649,899 659,471 666,296
Golf 349,000 382,200 394,600 364,000
Operating grants and contributions 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 4,180,386
Capital grants and contributions 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 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 45,967,116
Total primary government program revenues 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$ 63,706,711$
Net Revenues (Expenses):
Governmental activities (39,360,100)$ (38,343,100)$ (45,653,300)$ (40,323,500)$ (42,511,800)$ (44,893,500)$ (43,238,594)$ (37,892,304)$ (36,759,155)$ (49,387,787)$
Business-type activities 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 7,345,523
Total primary government (38,068,400)$ (32,814,200)$ (38,845,900)$ (38,096,000)$ (37,991,900)$ (36,543,300)$ (35,022,120)$ (25,485,489)$ (26,424,191)$ (42,042,264)$
General Revenues and Other Changes in Net Position:
Governmental activities:
Sales and use taxes 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$ 24,068,665$
Property taxes 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 10,756,477
Transient occupancy tax 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 7,381,989
Utility users tax 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 5,539,407
Property tax in-lieu of vehicle license fees 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 4,353,912
Other taxes and fees 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 3,929,377
Investment earnings 1,605,300 1,775,300 1,239,500 742,500 770,100 237,100 566,931 467,348 825,760 997,995
Miscellaneous and other 478,400 400,800 339,600 414,700 227,200 349,900 679,127 707,781
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 (462,000) (335,000) (301,500) (227,200) 1,820,900 115,100 (73,771) (329,452) 1,436,048 1,051,563
Total governmental activities 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 58,079,385
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
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Business-type activities
Investment earnings 1,413,400$ 1,699,600$ 1,372,500$ 725,300$ 726,100$ 73,500$ 364,551$ 361,627$ 845,906$ 182,261$
Cumulative change in accounting principle (842,600)
Income from investment in joint venture 239,200 206,700
Transfers 462,000 335,000 301,500 227,200 (1,820,900) (115,100) 73,771 329,452 (1,436,048) (1,051,563)
Total business-type activities 1,875,400 2,034,600 1,674,000 952,500 (1,094,800) (884,200) 438,322 691,079 (350,942) (662,602)
Total primary government 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$ 57,416,783$
Change in net position:
Governmental activities 6,617,600$ 6,859,100$ (2,673,000)$ 3,900,000$ 5,799,200$ 6,651,200$ 8,074,478$ 15,853,818$ 21,821,200$ 8,691,598$
Business-type activities 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 6,682,921
Total primary government 9,784,700$ 14,422,600$ 5,808,400$ 7,080,000$ 9,224,300$ 14,117,200$ 16,729,274$ 28,951,712$ 31,805,222$ 15,374,519$
137 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 Total2007-08 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 2016-17 16,737,005 7,331,660 10,756,477 7,381,989 5,539,407 4,353,912 1,557,128 2,372,249 737,826 56,767,653 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) .
138
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
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
General fund:
Reserved 808,100$ 291,500$ 201,800$ $ $ $ $ $ $ $
Unreserved:
Designated 1,093,900 125,000 923,500
Undesignated 12,927,100 13,575,400 9,988,800
Nonspendable:
Prepaid items 2,777,000 3,191,055 60,181 56,020 3,173,248
Restricted for: (Note 1)
Debt service 258,100 602,800 331,600 312,037 303,126 489,056 128,102
Committed to: (Note 1)
General government programs 317,500 1,288,200 1,768,200 4,973,497 3,942,459 4,468,863 9,428,034
Assigned to:
Contingency Fund 10,458,000 10,486,931 11,092,782 10,902,368
Development Services 1,848,386 382,396 41,110
Safety Fire 97,239
City Attorney 100,000
Subsequent years expenditures 8,200 11,900 2,716,534
Unassigned 12,324,100 11,781,500 14,060,900 1,382,590 7,828,485 10,419,881 2,723,292
Total general fund 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 26,496,154
139
Schedule 4
City of San Luis Obispo, California
Fund Balances of Governmental Funds, continued
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
For the Fiscal Year Ended June 30
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
All other governmental funds:
Reserved 8,557,100 10,038,200 6,932,600
Unreserved reported in:
Capital projects funds 10,962,000 19,748,900 1,245,000
Special revenue funds 585,500 626,900 920,300
Nonspendable 5,642
Restricted for: (Note 1)
Debt service 2,285,700 2,017,900 2,043,200 2,043,222 2,140,980 2,119,724 2,119,611
Law enforcement grant programs 42,000 20,500 22,900 27,145 16,886 23,492 20,786
Committed to:
Affordable housing programs 294,000 1,052,000 1,254,900 2,946,847 2,601,882 2,562,825 5,054,332
Assessment district programs 170,700 183,000
Capital outlay 1,172,800 1,227,700 1,326,000 6,045,091 3,632,641 2,954,223
General government programs 4,743,552 1,084,221 7,463,605 8,795,074
Impact Fees Programs 4,350,000 4,069,800 3,542,700 411,592 9,410,273 549,349 588,743
Open space programs 183,400 194,300 1,582,425 983,402 1,265,620 2,728,883
Parkland development programs 998,900 1,057,100 1,209,600
Public art programs 293,700 373,700 347,400
Assigned to:
Contingency fund 900,000
Subsequent years expenditures 8,997,800 4,359,300 5,413,900 3,552,319 2,606,757 3,559,851 5,846,873
Unassigned (2,500) 1,039 (83)
Total all other governmental
funds 20,104,600 9,097,900 18,605,600 14,544,400 15,352,400 21,353,232 22,476,959 20,498,689 26,059,944
Total all governmental funds 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$ 52,556,098$
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.
140
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
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Revenues:
Taxes
Sales and Use - general 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$ 16,737,005$
Sales and Use - Measure Y 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 7,331,660
Prop. 172 Public Safety 288,400 308,400 257,900 271,300 307,400 327,700 391,567 409,590 405,066 405,512
Property 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 10,756,477
Transient Occupancy 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 7,381,989
Utility Users 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 5,539,407
Property tax in-lieu of VLF (Note 1)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 4,353,912
Franchise Fees 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 1,557,128
Business Tax 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 2,372,249
Real Property Transfer 213,000 159,100 129,000 133,700 144,000 256,300 287,560 298,191 366,088 332,314
Fines, forfeitures and penalties 228,200 261,000 201,700 171,400 174,300 159,700 150,185 184,320 172,353 139,534
Use of money and property 1,605,300 1,775,300 1,239,500 742,500 770,100 237,100 566,931 467,348 825,760 260,169
Vehicle License Fees (Note 1)190,300 166,500 135,000 205,600 45,600 19,300
Other subventions and grants 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 2,624,753
Charges for services 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 15,173,707
Other revenues 633,800 1,810,300 398,000 270,500 36,500 526,500 357,469 217,710 242,744 446,456
Total revenues 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 75,412,272
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
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Expenditures:
Current:
General Government 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 11,824,360
Public safety 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 28,091,747
Transportation 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 4,949,845
Leisure, cultural and social services 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 7,785,411
Community development 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 12,692,237
Debt service:
Principal 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 2,101,296
Interest 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 1,215,504
Capital:
Public safety 1,541,500 1,652,700 4,704,400 494,100 447,900 457,700 892,351 2,371,865 1,220,759 1,772,454
Transportation 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 2,944,453
Leisure, cultural and social services 670,200 1,213,900 1,188,500 584,500 862,000 395,500 1,272,510 2,399,211 1,463,269 1,421,919
Community development (Note 2)1,270,000 1,382,500 3,893,700 884,100 705,300 70,900 939,017 123,258 149,537 284,375
General government 1,053,400 869,700 3,076,800 1,731,400 274,900 429,700 145,199 1,684,045 590,263 89,825
Total expenditures 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 75,173,426
Excess of revenues
over(under)
expenditures 1,253,500 1,022,000 (12,686,500) (1,151,100) (2,942,800) 3,397,840 6,604,018 (3,171,722) 955,907 238,846
142
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
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
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 1,141,468
Cost of debt issuance (11,500)
Payment to refunded bond escrow agent (281,800) (5,442,200)
Transfers in 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 15,739,036
Transfers out (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) (14,687,473)
Total other financing
sources(uses)(462,000) 8,450,200 (301,500) 1,246,700 (341,900) 103,600 777,004 8,042,871 2,124,548 2,193,031
Net change in fund
balance 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$ 2,431,877$
Debt service as a
percentage of noncapital
expenditures 5.15%4.93%7.24%7.61%6.68%6.62%5.98%8.92%5.20%5.08%
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.
143
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
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Staffing:
Salaries and wages:
Regular salaries 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$ 26,944,188$
Temporary salaries 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 1,793,360
Overtime 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 3,604,336
Benefits:
Retirement 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 10,394,523
Group health/disability ins (Note 1)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 4,129,004
Medicare 339,600 363,700 370,300 367,100 371,200 384,400 393,913 408,889 418,704 455,966
Unemployment Reimbursements 42,900 24,100 87,600 35,500 26,200 28,800 31,634 48,588 5,159 150,929
Total staffing 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 47,472,306
Contract services 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 6,962,949
Other operating expenditures
Communications & utilities 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 2,023,057
Rents & leases 142,100 147,700 130,500 141,800 136,800 139,600 197,104 159,718 164,729 170,288
Insurance:
General liability & property 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 1,273,133
Workers compensation 1,514,400 1,017,000 760,500 447,100 594,400 918,000 1,405,916 1,631,585 2,019,722 1,627,423
Other operating expenditures 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 3,345,191
Total operating expenditures 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 8,439,092
Minor capital 162,500 90,600 38,300 10,800 14,200 99,400 195,473 78,414 92,853 203,098
Total program expenditures 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 63,077,445
Reimbursed expenditures (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) (4,164,747)
Total general fund operating expenditures 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$ 58,912,698$
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 $364,800. While this change in accounting
increases costs initially, in the not-so-distant future (about 12 years), it becomes a much less expensive option than continuing "pay-as-you-go" cash funding.
144 Schedule 7 City of San Luis Obispo, California Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years For the Fiscal Year Ended June 30 Fiscal Year Homeowners Secured Roll Unitary UnsecuredTotal Direct Market Value of MarketExemptions Gross ValueRollTOTAL Tax Rate (Note 1) Value2007-08 (Note 3) 42,600,200$ 5,456,264,900$ 5,678,500$ 254,783,200$ 5,716,726,600$ 1.00% 5,716,726,600$ 100%2008-0942,384,800 5,828,492,800 5,582,800 274,186,700 6,108,262,300 1.00% 6,108,262,300 100%2009-1042,222,400 6,008,936,600 4,904,100 277,718,500 6,291,559,200 1.00% 6,291,559,200 100%2010-1141,929,800 5,985,294,700 5,505,000 279,434,500 6,270,234,200 1.00% 6,270,234,200 100%2011-1241,988,100 5,894,189,700 6,842,300 275,800,100 6,176,832,100 1.00% 6,176,832,100 100%2012-1341,572,300 5,963,182,500 5,382,272 279,203,900 6,261,931,900 1.00% 6,261,931,900 100%2013-1441,327,300 6,152,693,400 5,300,173 295,626,200 6,467,600,400 1.00% 6,467,600,400 100%2014-1541,185,200 6,512,370,260 5,032,204 297,325,321 6,814,727,785 1.00% 6,814,727,785 100%2015-1641,518,400 6,965,233,454 4,883,115 305,427,553 7,275,544,122 1.00% 7,275,544,122 100%2016-1742,109,709 7,393,890,993 5,269,573 303,122,262 7,702,282,828 1.00% 7,702,282,828 100%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 reportGross Assessed Valuation (Notes 1 and 2)
145
Schedule 8
City of San Luis Obispo, California
Property Tax Rates
Last Ten Fiscal Years
For the Fiscal Year Ended June 30
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
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
Voter approved indebtedness:
State water project 0.002 0.002 0.002 0.003 0.003 0.004 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
Total (Notes 1 and 3)1.002 1.002 1.002 1.003 1.003 1.004 1.004 1.004 1.004 1.004
Notes:
1. Property tax rates are levied per $100 of assessed valuation. The tax rate information provided is for Tax Rate Area 003-000, which is the
largest tax rate area in the City.
2. The passage of Proposition 13 on June 6, 1978 established a maximum County-wide levy for general revenue purposes of 1% of market value.
Voter-approved tax rates for the retirement of long-term liabilities were excluded from this limit.
3. It is not possible to identify tax rates for individual agencies however, the following is a summary of derived property tax
allocations within Tax Rate Area 003-000 for Fiscal Year 2008-09:
Base ERAF Net
Rate Allocation Apportionment
San Luis Coastal Unified School District 36.1 36.1
San Luis Obispo County - General Fund 30.32 (8.2) 22.12
City of San Luis Obispo 18.36 *(3.5) 14.86
San Luis Obispo Community College District 6.4 6.4
County School Services 3.8 3.8
City/County Library 2.00 (0.3) 1.7
Port San Luis Harbor 1.6 (0.4) 1.2
Other Agencies 1.3 (0.1) 1.2
Education Revenue Augmentation Fund (ERAF)12.5 12.5
Total 100%0%100%
*The County further adjusts the 18.4% base rate for revenue shifts to school districts as directed by the State as part of their cuts to local agencies,
resulting in an effective rate for the City of approximately 14.9%.
Source: Prepared by HdL, Coren & Cone
Data source: San Luis Obispo County Assessor 2016-17 Annual Tax Increment Tables
For The Fiscal Year Ended June 30
146
Schedule 9
City of San Luis Obispo, California
Principal Property Taxpayers
Current Year and Nine Years Ago
For the Fiscal Year Ended June 30
Number of Secured Percent of Total Number of Secured Percent of Total
Owner Parcels Assessed Value Rank City Assessed Value Parcels Assessed Value Rank City Assessed Value
Jamestown Premir SLO Court Etal 10 108,841,060$ 1 1.47%
CAP VIII Mustang- LLC 4 88,660 2 1.20%6 72,225,000$ 1 1.26%
Sierra Vista Hospital Inc.8 79,118,227 3 1.07%
SLO Promenade Limited Partnership 10 51,187,920 4 0.69%
Irish Hills Plaza West II LLC 6 47,679,734 5 0.64%
Charles Pasquini Jr Trust 3 41,369,437 6 0.56%
Costco Wholesale Corporation 1 34,514,007 7 0.47%1 31,228,392 4 0.55%
Bre Atlas Property Owner LLC 1 31,735,475 8 0.43%
Marigold Center LLC 9 30,379,566 9 0.41%9 24,336,783 6 0.43%
Target Corporation 1 29,812,552 10 0.40%
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 454,726,638$ 7.34%360,236,099$ 5.81%
Source: HDL CAFR report.
2016-17 2007-08
147
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)
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
2016-17 10,250,205 10,250,205 100%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 $8,740,762.
3. The City has elected the Teeter Plan method of property tax collection, whereby the County remits 100% of taxes levied and
pursues collection and retains any delinquent taxes and related penalties and interest.
Source: San Luis Obispo County Auditor-Controller
148 Schedule 11 City of San Luis Obispo, California Schedule of Taxable Sales and Permits by Category Last Ten Calendar Years 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Sales In Thousands of DollarsApparel stores 61,772$ 61,356$ 65,608$ 70,582$ 71,429$ 73,127$ 74,471$ 74,789$ 76,524$ 74,403$ General merchandise stores 149,346 145,821 121,921 123,191 148,757 171,797 173,947 179,557 182,541 179,528 Food and drug stores 41,636 41,704 40,841 39,120 40,607 40,860 42,030 43,229 44,868 44,458 Eating & drinking places 122,697 124,278 120,619 120,852 128,855 143,991 149,144 160,568 173,381 179,147 Building materials & farm tools123,467 113,130 96,091 93,904 104,754 113,532 128,144 135,269 141,800 144,151 Auto dealers & supplies246,477 199,923 161,310 178,569 193,060 227,556 269,601 287,764 303,902 305,823 Service stations84,971 89,586 72,158 85,795 105,178 109,224 104,740 103,130 89,773 79,736 Other retail stores283,609 273,252 247,942 249,820 257,455 264,363 262,935 268,495 276,790 281,091 Total retail stores1,113,975 1,049,050 926,490 961,833 1,050,095 1,144,450 1,205,012 1,252,801 1,289,579 1,288,337 All other outlets260,221 252,563 223,240 235,062 278,827 269,489 285,688 300,748 348,998 381,638 Total 1,374,196 1,301,613 1,149,730 1,196,895 1,328,922 1,413,939 1,490,700 1,553,549 1,638,577 1,669,975 PermitsApparel stores91103 113 120 111 122 131 103 175 163 General merchandise stores2027 14 14 14 12 12 14 25 39 Food and drug stores3334 42 45 49 53 55 53 58 60 Eating & drinking places187196 180 185 188 204 213 239 233 254 Home furnishings & appliances7473 88 91 86 88 84 81 88 129 Building materials & farm tools3030 40 40 39 41 39 39 41 47 Auto dealers & supplies6358 69 70 64 62 60 65 59 98 Service stations2421 21 21 17 17 17 17 17 21 Other retail stores358348 610 590 579 602 661 722 584 540 Total retail stores880 890 1,177 1,176 1,147 1,201 1,272 1,333 1,280 1,351 All other outlets1,074 1,024 672 688 656 666 664 678 872 1,074 Total 1,954 1,914 1,849 1,864 1,803 1,867 1,936 2,011 2,152 2,425 Source: State Board of Equalization, State of California Taxable Sales in California, and The HDL Companies.Note: Due to confidentiality issues, the names of the ten largest revenue payers are not available. The categories presented are intended to provide alternative information regarding the sources of the City's revenue.
149
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%
1/1/2017 7.00%0.25%0.50%7.75%
Notes:
1. The Bradley-Burns Uniform Local Sales and Use Tax Law was enacted in 1955. The law authorizes cities and counties to impose a sales and use
tax. Effective January 1, 1962, all cities and counties have adopted ordinances for the State Board of Equalization to collect the local tax.
2. Sales tax only. The use tax was enacted effective July 1, 1935.
150
Schedule 12
City of San Luis Obispo, California
Historical Sales and Use Tax Rate, continued
3. In March 2004, a State ballot measure was passed issuing deficit reduction bonds for State purposes. Funding was provided effective July 1, 2004 by
repealing 25% of the local 1% sales tax and then adopting a new 1/4-cent sales tax dedicated to repayment of the deficit reduction bonds. Cities and
counties would then be "made whole" by the State from increased property tax allocations via reduced contributions to ERAF. This "triple flip"
is theoretically revenue-neutral, and as such, the effective rate for revenue purposes remains at 1%.
4. In November 2006, voters in San Luis Obispo approved a local sales tax measure increasing the City rate by 1/2%, which became effective
April 1, 2007. The sales tax measure has a sunset provision of 8 years. The local Sales Tax was extended as Measure G in the November 2014 election for 8 years.
5. Proposition 30, The Schools and Local Public Safety Protection Act of 2012 , was approved by California voters in November 2012 to temporarily increase
the sales and use tax by 0.25%. The sales and use tax imposed by Proposition 30 expired December 31, 2016.
Source: State Board of Equalization, State of California
151
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 1,019 12.6%993 13.1%
Manufacturing 144 1.8%132 1.7%
Transportation/Utilities 40 0.5%31 0.4%
Wholesale 140 1.7%139 1.8%
Retail 1,035 12.7%819 10.8%
Professional 1,152 14.2%871 11.5%
Residential Rental 2,430 29.9% 2,509 33.0%
Commercial Rental 313 3.9%228 3.0%
Services 1,845 22.7% 1,875 24.7%
Total business certificates issued 8,118 100% 7,597 100%
Home occupations 740 9.1%614 8.1%
Located outside City limits 1,699 20.9% 2,018 26.6%
Located in Downtown Business Improvement District 615 7.6%612 8.1%
Source: City of San Luis Obispo Finance Department- Revenue Division
20162017
152
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
Percentage of
Fiscal Lease Purchase Lease Purchase Installment Total Primary Per Gross Assessed
Year Bonds Financing Loans Bonds Financing Sales Agreement Loans Government Capita Value
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 27,762,893 1,374,773 679,314 25,323,405 7,932,327 17,647,622 80,720,334 1,741 1.16%
2016-17 26,328,540 1,898,652 591,647 24,072,708 7,366,468 16,709,160 76,967,175 1,660 1.00%
Sources:
City of San Luis Obispo Finance Department
Note: Beginning in fiscal year 2015-16, governmental activities and business-type activities bond balances are shown net of the unamortized bond premiums.
Governmental Activities Business-Type Activities
153
Schedule 15
City of San Luis Obispo, California
Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt per Capita
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
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
2015-17 46,724 7,702,282,828 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 2015-17 Reports -Asset Value and demographic tables
154 Schedule 16 City of San Luis Obispo, California District and Overlapping Long-Term Debt Fiscal Year Ended June 30, 2016 Amount ApplicablePercent Applicable to the City ofto the City ofSan Luis ObispoSan Luis Obispoas of June 30, 2017Direct long-term debt: City of San Luis Obispo 2005 Refunding Revenue Bonds (1996)100.000%3,510,000$ City of San Luis Obispo 2006 Lease Revenue Bonds100.000%12,455,000 City of San Luis Obispo 2006 Water Revenue Bonds100.000%12,975,000 City of San Luis Obispo 2009 Lease Revenue Bonds100.000%6,280,015 City of San Luis Obispo 2012 Refunding Revenue Bonds (2001)100.000%3,960,000 City of San Luis Obispo 2012 Water Revenue Refunding Bonds (2002)100.000%2,990,000 City of San Luis Obispo 2014 LOVR lease Revenue Bonds 100.000%7,285,00049,455,015Overlapping long-term debt (percentage of overlapping agency's assessed valuation located within boundaries of the City): (Note 1) San Luis Obispo County Certificates of Participation16.014%4,097,983 San Luis Obispo County Pension Obligations16.014%15,057,868 San Luis Community College District Certificates of Participation15.951%1,151,662 City of San Luis Obispo Lease Revenue Bonds100.000%33,490,00053,797,513Less: City of San Luis Obispo obligations supported by enterprise revenues7,686,540 Total gross direct and overlapping long-term debt46,110,973Less self-supporting issues: City of San Luis Obispo 2006 Lease Revenue Bonds - Parking Fund supported portion6,725,700 City of San Luis Obispo 2006 Water Revenue Bonds12,975,000 City of San Luis Obispo 2009 Lease Revenue Bonds - Parking/Sewer/Water Funds supported portion960,855 City of San Luis Obispo 2012 Water Revenue Refunding Bonds (2002)2,990,000 Total self-supporting issues23,651,55522,459,418$ Ratio of long-term debt to assessed valuation and populationGross Assessed Valuation7,702,282,828$ Population46,724
155 Schedule 16 City of San Luis Obispo, California District and Overlapping Long-Term Debt, continued Fiscal Year Ended June 30, 2016 Percent of GrossPer CapitaAmountAssessed ValuationLong-Term DebtDirect and Overlapping Debt:Gross$46,110,9730.6%$986.88Net22,459,4180.3%481Direct Debt:Gross$49,455,0150.6%$1,058.45Net25,803,4600.3%552Source: California Municipal Statistics, Inc. HDL CAFR report.Note: The percentage of overlapping debt applicable to the City is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the City, divided by the district's total taxable assessed value.
156
Schedule 17
City of San Luis Obispo, California
Computation of Legal Debt Margins
Last Ten Fiscal Years
(amounts expressed in thousands)
For the Fiscal Year Ended June 30
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Legal debt limit 214,377$ 229,059$ 235,815$ 234,887$ 231,384$ 234,822$ 241,812$ 244,175$ 272,833$ 288,836$
Total debt applicable to limit
Legal debt margin 214,377 229,059 235,815 234,887 231,384 234,822 241,812 244,175 272,833 288,836
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 2016-17
Gross Assessed Valuation 7,702,282,828$
Legal Debt Limit - 3.75% of Gross Assessed Valuation 288,835,606$
Long-term Debt:
Revenue Bonds Secured by Capital Leases 33,490$
Water Revenue Bonds 15,965
49,455
Less deductions allowed by law:
Revenue Bonds Secured by Capital Leases 33,490
Water Revenue Bonds 15,965
49,455
Total debt applicable to computed limit $0
Legal debt margin 288,835,606$
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.
157
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
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% 288%
2016-17 19,873,517 (1,266,674) 410,484 (14,754,114) 4,263,213 1,290,748 837,657 2,128,405 200% 260%
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
158
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
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%
2016-17 4,659,562 (2,671,028)1,988,534 481,981 487,407 969,388 205%
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
159
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 and Cuesta Community
Fiscal Household Median Secondary School College Unemployment
Year Population (1)Income (2)Age (1)Enrollment (4)Enrollment (3)Rate (1)
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 46,117 62,648 25.0 7,110 6,691 4.90%
2016-17 46,724 64,014 25.4 7,538 6,741 4.50%
Sources:
1. 2016-17 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.
160
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 3,000 1 11.95%2,426 2 6.77%
County of San Luis Obispo 2,920 2 11.63%2,601 1 7.26%
Dept of State Hospitals - Atascadero 2,000 3 7.97%2,100 3 5.86%
P.G. & E (Diablo Canyon)1,866 4 7.43%1,719 5 4.80%
California Men's Colony 1,517 5 6.04%1,768 4 4.93%
Cal Poly Foundation (Corporation)1,400 6 5.58%145 27 0.40%
Tenet Health Care Corp.1,305 7 5.20%N/A N/A N/A
Compass Health 1,200 8 4.78%N/A N/A N/A
Lucia Mar Unified School District 1,000 9 3.98%1,100 6 3.07%
Paso Robles Public Schools 935 10 3.73%831 8 2.32%
Total 17,143 68.30%12,690 35.41%
Note: Source for the 2016-17 employers information is the 2016 Pacific Coast Business Times (The List ). This information represents
employers in San Luis Obispo County.
2007-082016-17
161
Schedule 22
City of San Luis Obispo, California
Regular Authorized Positions
Last Ten Fiscal Years
For the Fiscal Year Ended June 30
Function 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Public Safety
Police
Sworn 64.0 64.0 59.0 59.0 57.0 57.0 60.0 60.0 61.0 61.0
Non-sworn 28.0 28.0 27.5 27.5 26.5 25.5 25.5 25.5 25.5 25.5
Fire
Sworn 44.0 44.0 44.0 44.0 44.0 44.0 49.0 49.0 50.0 47.0
Non-sworn 10.0 10.0 9.8 9.0 7.8 6.8 4.0 4.0 4.0 10.0
Public Utilities 66.8 66.8 63.8 63.8 60.9 61.9 64.8 64.8 67.1 69.1
Transportation 32.0 32.0 30.0 29.2 31.8 31.8 28.9 28.9 36.8 36.8
Leisure, Cultural and Social Services 33.0 33.0 33.0 33.0 32.0 32.0 34.0 34.0 35.0 35.0
Community Development 40.3 40.3 37.3 37.3 42.8 43.8 39.5 40.0 51.0 51.0
General Government 58.5 59.5 54.8 54.8 50.5 52.2 56.0 56.0 57.0 61.0
Total 376.6 377.6 359.2 357.6 353.3 355.0 361.7 362.2 387.4 396.4
Ratio of Sworn Police Personnel per 1,000 Population:* 1.43 1.43 1.31 1.30 1.26 1.25 1.32 1.32 1.33 1.31
Ratio of Sworn Fire Personnel per 1,000 Population:*0.98 0.98 0.98 0.97 0.97 0.97 1.08 1.08 1.06 1.01
*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
162
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
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Function/Program:
Police:
Calls for police/fire service 33,580 33,211 32,057 32,074 34,751 36,236 34,659 36,515 38,300 39,620
Incident numbers issued 29,275 28,855 27,555 27,595 29,991 31,156 29,277 31,048 32,542 33,360
Police reports written 8,053 7,839 7,454 7,661 8,322 9,192 8,665 8,435 8,852 8,675
Traffic citations issued 6,389 7,099 *
Other citations issued 703 1,315 *
Violations cited 6,389 8,410 8,471 5,939 8,119 7,213 5,793 6,648 7,673 7,649
Citations issued 5,811 7,737 7,398 5,380 7,718 6,665 5,275 6,204 7,038 7,030
Collision reports 871 693 718 728 669 643 625 630 587 608
Violent crimes:**163 136 140 126 134 117 158 237 173 177
Willful homicide**3 2 1
Forcible rape**27 32 30 27 24 18 31 44 29 38
Robbery**39 38 39 35 34 19 26 25 13 21
Aggravated assault**99 66 71 64 74 79 101 168 131 118
Property crimes:**702 649 620 640 714 804 713 542 637 731
Burglary**312 334 324 372 330 414 328 206 225 251
Motor vehicle theft**84 55 68 54 107 81 63 71 87 95
Larceny-theft:**1,450 1,328 1,240 1,260 1,345 1,476 1,384 1,162 1,335 1,730
Over $400**306 260 228 214 277 309 322 265 325 385
$400 and under**1,144 1,068 1,012 1,046 1,068 1,167 1,062 897 1,010 1,345
Fire:
Medical responses***(Note 4)2,788 2,613 3,325 2,799 2,856 2,985 3,232 3,417 3,540 4,538
Fire suppression responses***(Note 4)321 110 133 101 102 95 105 111 151 143
Hazardous materials responses***(Note 4)29 26 36 23 17 21 15 21 22 21
Other responses***(Note 4)1,302 1,897 1,224 1,528 1,552 1,812 1,840 1,929 2,158 1,799
Total service responses***4,440 4,646 4,718 4,451 4,527 4,913 5,192 5,478 5,871 6,501
Fire and life-safety inspections***1,684 1,977 1,110 2,489 2,431 2,494 644 2,476 2,516 3,756
Arson investigations***38 29 47 22 18 49 44 17 44 8
Education activities (# of people)***18,000 15,000 14,000 20,106 23,120 23,377 23,945 23,697 23,680 23,575
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
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Function/Program:
Public Utilities:
Water/Sewer customer accounts 14,380 14,682 14,875 14,734 14,695 14,742 14,899 14,953 15,167 15,188
Miles of sewerline 133 137 137 137 137 137 197 139.6 138
Miles of waterline 182 182 185 185 187 187 *187 191 197
Water service line repairs and renewals*****225 142 95 86 50 66 58 60 50 50
Sewer main stoppages 8 12 10 9 7 12 15 13 11
Acre feet of water delivered - Nacimiento 981 2,321 663 1,506 839 3574 3817
Acre feet of water delivered - Salinas 1,944 2,473 2,736 2,640 2,149 2,378 1,444 1,986 8 273
Acre feet of water delivered - Whale Rock 4,855 4,280 3,402 1,277 2,875 3,212 2,615 1,375 949
Transportation:
Signals and lights:
Intersections with traffic signals 60 67 70 68 70 70
Traffic signal service requests 100 80 85 80 85 90
Streetlights operated & maintained 220 2,230 2,300 2,300 2,300 2,300
Streetlight service requests 285 500 180 175 45 50
Parking spaces:
Estimated miles of paved streets 125 125 125 130 132 132 133 133 133 133
Pavement condition index 74 74 73 74 72 71 72 72 71 71
Number of street lights 2,300 2,300 2,179 2,270 2,270 2,270 2,300 2,300 2,300 2,300
Traffic collisions 865 789 708 597 621 593 660 720 531 482
Parking spaces provided (lot, garage & street)3,059 3,060 3,059 3,067 3,065 3,071 3,119 3176 2953 2892
Parking citations written 39,234 40,062 30,087 30,278 26,515 28,690 23,957 20,690 24,213 23,348
Total transit passengers 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 1,131,716
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
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Function/Program:
Leisure, Cultural and Social Services:
Open space acres maintained 3,015 3,015 3,420 3,420 3,510 3,510 3,510 3,510 3,510 35,100
Open space easement acres 2,482 3,139 3,161 161 3,200 3,200 3,200 3,200 3,200 3,200
Trail mileage 35 38 40 40 45 47 49 49 52 52
Total golf rounds played 40,216 42,438 34,376 32,228 34,699 33,067 34,766 33,674 30,572 28,196
Acres of park landscape maintained 157 157 157 157 157 157 157 157 157 157
Trees in City jurisdiction 18,600 18,600 17,779 18,700 18,700 18,700 18,700 19,000 20,000 20,000
Children's services enrollment totals 920 816 900 1,664 1,755 1,605 2,338 2,360 2,115 2,115
Triathlon:
participants, spectators and volunteers 6,470 6,600 6,700 5,400 6,000 6,525 6,000 5,500 5,200 5,000
Annual senior attendance (total)13,915 14,576 14,250 14,500 14,000 14,200 ***265
Facility permits processed 1,645 1,273 1,971 1,806 1,803 1,269 1,416 836 1,305 1,073
Annual aquatics attendance (total)55,691 61,264 60,052 56,676 56,042 67,000 73,903 83,107 68,403 96,687
Adult athletic teams registered 235 229 255 245 320 325 338 320 325 325
Youth athletic participants registered 1,500 1,625 1,650 1,320 1,400 1,300 1,200 1,350 1,300 1,150
Special event applications processed 55 53 57 68 78 84 103 103 77 101
Banner permits processed 62 71 65 72 86 76 82 47 87 87
Instructional class enrollments 1,905 2,017 1,837 1,628 1,400 1,308 1,424 1,751 1,151 1,724
165
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
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Function/Program:
Community Development:
Housing characteristics:
Single family units 10,729 10,793 10,808 10,951 10,969 10,994 11,133 11,230 11,306
2-4 units 2,337 2,337 2,350 2,634 2,650 2,656 2,692 2,695 2,789
5 or more unit structures 5,654 5,654 5,702 5,596 5,596 5,647 5,767 5,804 6,038
Mobile homes 1,502 1,534 1,534 1,482 1,482 1,482 1,482 1,482 1,482
Total 20,222 20,318 20,394 - 20,663 20,697 20,779 21,074 21,211 21,615
Housing units (replaces above categories)20,578
Households (replaces above categories)1,361
Building permits issued (Note 1):544 475 438 442 463 566 511 597 584 584
Residential:
Single family residential (Note 2)25 28 16 7 13 48 59 114 97 62
Multi-family residential 19 5 5 3 10 6 8 32 5 13
Non-residential 19 4 1 7 5 7 9 27 13 14
Other permits:
Additions, alternations, demolitions (Note 4)498 454 416 499 459 530 458 460 522 545
Other improvements
Total 561 491 438 516 487 591 534 1,230 1,221 1,218
Approximate value of building permits (in thousands)
Residential:
Single family residential 6,172$ 6,800$ 4,424$ 6,085$ 3,278$ 15,698$ 15,412$ 36,722$ 26,441$ 16,340$
Multi-family residential 11,843 4,286 2,528 926 3,847 1,560 6,744 26,499 13,500 15,022
Non-residential 20,340 10,482 525 16,608 5,142 1,935 15,310 9,791 11,484 56,308
Other permits:
Additions, alternations, demolitions (Note 4)21,741 21,080 26,464 15,948 16,589 20,761 19,139 22,897 30,230 24,787
Other improvements
Total 60,096$ 42,648$ 33,941$ 39,567$ 28,856$ 39,954$ 56,605$ 95,909$ 81,655$ 112,457$
Building inspections conducted 8,477 10,371 8,359 10,210 13,685 10,543 8,996 6,641 7,195 10,745
Home occupation permits processed 149 175 146 126 117 142 129 113 163 144
Development permit applications received 286 223 194 172 148 217 311 293 253 236
166
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
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Function/Program:
General Government:
Business tax certificates issued:
Located outside city limits 1,452 1,487 1,548 1,569 1,670 1,670 1,472 1,602 2,018 1,699
Total certificates issued 7,297 7,458 7,090 6,873 7,086 7,086 6,934 7,805 7,597 8,118
Human resources recruitments (total)96 46 46 42 59 91 105 129 103 103
Fleet vehicles maintained 241 280 301
City-wide fleet & equipment assets 290 290 290 290 300 318 323
Replaces prior category
Telephone lines managed 800 925 1,003 1,003 1,024 981 995 1,037 1,005 998
Cell phones supported****260 343 348 351 338 344 383 460 453 476
IT users supported 450 450 450 450 498 498 490 511 515 467
* 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
167
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)
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%
2016-17 15,357 1.25%18,196,937 1.44% 5,039 2%
Source: City of San Luis Obispo Utilities Department.
168
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
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**
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**
Sewer Rates (Monthly)Water Rates (Note 1)
169
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)
2016 Base Fee $9.98 $8.57 min. charge per $8.57 min. charge per $8.57 min. charge per
Base Fee Drought Surcha 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
2017 Base Fee $12.33 $8.57 min. charge per $8.57 min. charge per $8.57 min. charge per
1-8 hcf 7.27 dwelling unit dwelling unit dwelling unit
9 + hcf 9.08 $9.44/unit volume charge** $9.44/unit volume charge**$9.44/unit volume charge**
*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
170
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
City of San Luis Obispo Parks Landscape 60.50 19.1%
Silver City Mobile Home Park Mobile Homes 47.03 14.9%
Mustang Village Apartments 36.78 11.6%
Sierra Vista Hospital Care Facilities 32.34 10.2%
Creekside Mobile Homes Mobile Homes 27.29 8.6%
Laguna Lake Mobile Homes Mobile Homes 24.96 7.9%
Irish Hills Hamlet Apartments 23.91 7.6%
Embassy Suites Hotel 22.87 7.2%
Chumash Village Mobile Homes 20.77 6.6%
SLO Coastal Unified School District School 20.23 6.4%
Total 316.7 100.00%
Source: City of San Luis Obispo - Utilities Department