HomeMy WebLinkAboutComprehensive Annual Financial Report - Fiscal Year Ended June 30 2018
COMPREHENSIVE ANNUAL FINANCIAL REPORT
Fiscal Year Ended June 30, 2018
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
Brigitte Elke, Finance Director
Rico Pardo, Accounting Manager/Controller
Traci Kawaguchi, Accountant
Tavy Garcia, Contract Accountant
City of San Luis Obispo, California
www.slocity.org
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City of San Luis Obispo, California
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2018
Table of Contents
Page
Introductory Section
Transmittal Memorandum vi-xviii
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 xv
Award for Excellence in Financial Reporting xvii
Acknowledgments xviii
Directory of Officials and Advisory Bodies xix
City Council xix
Advisory Bodies xix
Appointed Officials and Department Heads xix
Mission Statement xx
Organizational Values xxi-xxii
Organization of the City of San Luis Obispo xxiii
GFOA Certificate of Achievement for Excellence in Financial Reporting xxiv
Financial Section
Independent Auditors’ Report 1-3
Management’s Discussion and Analysis 4-19
Overview of the Financial Statements 4
Financial Highlights 6
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City of San Luis Obispo, California
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2018
Table of Contents
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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 17
Next Year’s Budgets and Rates 18
Requests for Additional Information 19
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position 21
Statement of Activities 22-23
Fund Financial Statements:
Balance Sheet – Governmental Funds 24
Reconciliation of the Governmental Funds Balance Sheet to the
Government-wide Statement of Net Position 25
Statement of Revenues, Expenditures and Changes in Fund Balance –
Governmental Funds 26-27
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 28
Statement of Fund Net Position Business-Type Activities – Enterprise Funds 29-30
Statement of Revenues, Expenses and Changes in Fund Net Position
Business-Type Activities—Enterprise Funds 31
Statement of Cash Flows Business-Type Activities – Enterprise Funds 32-33
Statement of Net Position - Fiduciary Funds - Agency Funds 34
Notes to the Basic Financial Statements 38-92
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City of San Luis Obispo, California
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2018
Table of Contents
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Page
Required Supplementary Information Section
Budgetary Comparison Schedule – General Fund 94-99
Schedule of the Changes in the Net Pension Liability and Related Ratios – Miscellaneous
Agent Multiple – Employer Plan 100
Schedule of the Pension Plan Contributions – Miscellaneous Agent Multiple – Employer Plan 101
Schedule of the City’s Proportionate Share of the Net Pension Liability – Safety Cost-Sharing Plan 102
Schedule of the City’s Pension Contributions – Safety Cost-Sharing Plan 103
Schedule of the Changes in the Net OPEB Liability and Related Ratios 104
Schedule of Employer OPEB Contributions 105
Notes to Required Supplementary Information 106-108
Other Supplementary Information and Combining and Individual Fund Statements and Schedules
Half Percent Sales Tax Measure Funding Schedule 110-112
Nonmajor Governmental Funds 113-116
Combing Balance Sheet – Nonmajor Governmental Funds 117-120
Combining Statement of Revenues, Expenditures and Changes in Fund Balance
- Nonmajor Governmental Funds 121-124
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual:
Downtown Business Improvement District Fund 125
Transportation Development Act (TDA) Fund 126
Tourism Business Improvement District Fund 127
Gas Tax Fund 128
Community Development Block Grant (CDBG) Fund 129
Law Enforcement Grants Fund 130
Public Art Contributions Fund 131
Insurance Fund 132
SB1 Road Repair Fund 133
Debt Service Fund 134
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City of San Luis Obispo, California
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2018
Table of Contents
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Page
Agency Funds 135
Combining Statement of Changes in Assets and Liabilities – Agency Funds 136-139
Statistical Section
Statistical Section – Overview (Unaudited) 141
Financial Trends:
Net Positions by Component – Last Ten Fiscal Years 142
Changes in Net Position – Last Ten Fiscal Years 143-145
Governmental Activities Tax and Franchise Revenues by Source – Last Ten Fiscal Years 146
Fund Balances of Governmental Funds – Last Ten Fiscal Years 147-148
Revenues, Expenditures and Changes in Fund Balances of Governmental Funds
- Last Ten Fiscal Years 149-151
General Fund Operating Expenditure Trends by Type – Last Ten Fiscal Years 152
Revenue Capacity:
Assessed and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years 153
Property Tax Rates – Last Ten Fiscal Years 154
Principal Property Taxpayers – Current Year and Nine Years Ago 155
Secured Property Tax Roll Levies and Collections – Last Ten Fiscal Years 156
Schedule of Taxable Sales and Permits by Category – Last Ten Calendar Years 157
Historical Sales and Use Tax Rates 158-159
Schedule of Business Tax Certificates Issued 160
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City of San Luis Obispo, California
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2018
Table of Content
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Debt Capacity:
Per Capital Outstanding Debt by Type – Last Ten Fiscal Years 161
Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt per Capita
- Last Ten Fiscal Years 162
Direct and Overlapping Long-Term Debt – Fiscal Year Ended June 30, 2018 163-164
Computation of Legal Debt Margins – Last Ten Fiscal Years 165
Revenue Bond Coverage:
Water Fund – Last Ten Fiscal Years 166
Parking Fund – Last Ten Fiscal Years 167
Demographic and Economic Information:
Demographic and Economic Statistics – Last Ten Fiscal Years 168
Principal Employers – Current Year and Nine Years Ago 169
Regular Authorized Positions – Last Ten Fiscal Years 170
Operating Information:
Operating Indicators and Capital Asset Statistics by Function – Last Ten Fiscal Years 171-175
Water System Statistical Data 176
Water and Sewer Rates – Last Ten Fiscal Years 177-178
Water System Ten Largest Users – Fiscal Year Ended June 30, 2018 179
INTRODUCTORY SECTION
City of San Luis Obispo, Finance and Information Technology, 990 Palm Street, San Luis Obispo, CA, 93401-3249, 805.781.7130, slocity.org
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December 21, 2018
TO: The Honorable Mayor and Members of the City Council and Citizens of the City of San Luis
Obispo
FROM: Derek Johnson, City Manager
Brigitte Elke, Finance Director
SUBJECT: TRANSMITTAL MEMORANDUM FOR COMPREHENSIVE ANNUAL FINANCIAL
REPORT FOR FISCAL YEAR 2017-18
REPORT PURPOSE AND ORGANIZATION
We are pleased to submit the City of San Luis Obispo’s 2017-18 Comprehensive Annual Financial Report
(CAFR). Section 810 of the City’s Charter requires that an audit of the City financial records be conducted each
year by an independent certified public accountant. Such an audit has been performed and this report is being
published as part of the requirement for the fiscal year ended June 30, 2018.
City management assumes full responsibility for the completeness and reliability of the information contained
in this report. We attest that, to the best of our knowledge, the data presented is accurate in all material respects
and all statements and disclosures needed for the reader to obtain a thorough understanding of the City’s financial
activities have been included.
To provide a reasonable basis for making these representations, management of the City has established a
comprehensive internal control framework that is designed both to protect the government’s assets from loss,
theft, or misuse and to compile sufficient and reliable information for the preparation of the City’s financial
statements in conformity with U.S. Generally Accepted Accounting Principles (GAAP). Because the cost of
internal controls should not outweigh their benefits, the City’s comprehensive framework of internal controls
has been designed to provide reasonable rather than absolute assurance that the financial statements will be free
from material misstatement.
Audited Financial Statements
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, 2018 are free of material misstatement. The independent audit
involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements;
assessing the overall accounting principles used and significant estimates 1 made by management; and evaluating
the overall financial statement presentation.
1 Significant estimates included in the financial statements are made in conformity with GAAP.
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The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an
unqualified opinion 2 that the City’s financial statements for the fiscal year ended June 30, 2018, are presented
fairly and in conformity 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 the administration of Federal awards (such as
Transit 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
The comprehensive annual financial 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 charts.
The Financial section consists of five parts: 1) the independent auditors’ report; 2) Management’s Discussion
and Analysis; 3) the basic financial statements including the government-wide financial statements, fund
financial statements, and notes to the financial statements; 4) required supplementary information; and 5)
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 and operating information.
As required by GAAP, these financial statements present the City (the primary government) and its component
units (entities for which the government is financially accountable). Blended component units (although legally
separate entities) are in substance part of the government's operations, and so data from these units are combined
with data of the primary government. The City has one component unit, the San Luis Obispo Capital
2 An unqualified opinion means that without any reservations, the auditor feels the financial statements were
prepared appropriately following all applicable accounting rules and the financial reports are an accurate
representation of the City’s financial condition.
3 Internal controls are systematic measures instituted by an organization to conduct its business in an orderly and
efficient manner; safeguard its assets and resources; deter and detect errors, fraud, and theft; ensure accuracy and
completeness of its accounting data; produce reliable and timely financial and management information; and
ensure adherence to its policies and plans.
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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.
PROFILE OF THE CITY OF SAN LUIS OBISPO
With a population of 46,548, the City is located eight miles from the Pacific Ocean and is midway between San
Francisco and Los Angeles at the junction of Highway 101 and scenic Highway 1.
The City serves as the commercial, governmental, and cultural hub of California’s Central Coast. San Luis
Obispo is the seat of San Luis Obispo County and a number of Federal and State regional offices and facilities
are located within the City, along with California Polytechnic State University and Cuesta College.
One of California’s oldest communities, the City began with the founding of Mission San Luis Obispo de Tolosa
in 1772 by Father Junipero Serra as the fifth mission in the California chain of 21 missions. It was first
incorporated in 1856 as a General Law City and became a Charter City in 1876. As a Charter City, San Luis
Obispo has more local authority than cities that incorporate under the general laws of the State of California.
The Charter is the City’s governing document and any changes must be approved by the voters. The City’s
Charter has been amended several times since its adoption, most recently in August 2011.
Form of Government
As set forth in the City Charter, the City operates under the “Council-Mayor-City Manager” form of government.
The City Council has the authority to make and enforce all laws and regulations with respect to municipal affairs,
subject only to the limitations of the City Charter and the State Constitution. There are four Council members,
who are elected at-large and serve overlapping four-year terms. The Mayor is also elected at-large for a two-
year term and serves as an equal member of the Council. The City Council appoints the City Manager and City
Attorney. All other department heads are appointed by the City Manager.
City Services
The City provides a wide range of municipal services, including police and fire protection, water and sewer
utilities, street and parks maintenance, public transportation, parking, parks and recreation, planning, building
and safety, and other general government services. Financial data for all funds through which services are
provided by the City have been included in this report. Several municipal services are provided through other
governmental agencies or private utility companies, including:
Service Agency
Courts, Health and Social Services County of San Luis Obispo
Elementary and Secondary Schools San Luis Coastal Unified School District
Community College San Luis Obispo County Community College District
Solid Waste Collection and Disposal San Luis Garbage Company
Gas, Electric and Telephone Private Utility Companies
Budgetary Policy and Control
Budgets are legally adopted annually by the City Council by resolution and are prepared for each fund in
accordance with its basis of accounting. As provided under City Charter, the City Manager is responsible for
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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 appropriated budget if those changes will have neither
a significant policy impact nor affect budgeted year-end fund balances. The City's budgetary policies are more
fully described in Note 1 of the financial statements.
Expenditure and budgeting details are maintained by the City for each fund and department by program area at
the line item level. Budgetary control is exercised through a computerized 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. This policy objective has been achieved for fiscal year 2017-18. 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 2017-18.
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 relatively stable economy, largely
insulated from economic downturns in other parts of the State or the nation due to major State and federal
employers such as the California Polytechnic State University (Cal Poly), California Men’s Colony, California
Department of Transportation (Cal Trans) District 5 offices, the Regional Water Control Board, and Camp San
Luis.
Employment. Employment in the San Luis Obispo County region has historically been stabilized by a large
government presence and diversity. As noted above, the State has a major university, correctional facility, and
other regional offices located in the community. The County government and school districts are also major
employers. Other major employers include two major hospital facilities, several engineering and software
companies, and Pacific Gas and Electric. The recent announcement of the pending closure of the Diablo Canyon
Nuclear Power Plan presents some uncertainties and adjustment for the region over the next couple of decades
as the process takes place. However, the passage of SB1090 and the monetary allocation of $1.82 million for
economic development and other funds from the bill will assist in the transition.
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As measured by the labor market, the local economic fared well in 2017-18. San Luis Obispo County continues
to maintain solid employment levels and unemployment fell below national and state levels to a record low of
2.8%. For all of 2017, total nonfarm employment in San Luis Obispo County increased 1.3% and private sector
payroll expanded 1.6% over the same period. The industry sectors 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 fortunate to attract 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 forecast is to facilitate long-term fiscal health and to identify the funds’ ability – on
an order of magnitude basis – to maintain current services and existing assets and fund new initiatives. The 2018-
23 forecast was completed in April 2018, before the City Council considered the 2018-19 Financial Plan
Supplement for adoption. Due to CalPERS policy changes and rapidly increasing payment requirements 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
were prepared and presented to the City Council in April 2018 leading to the adoption of a three-year Fiscal
Health Response Plan beginning in fiscal year 2018-19.
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 needs
and community-wide interests. The Financial Plan is the City’s main tool for programming the 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 objective adopted by the
Council as part of the 2017-19 Financial Plan. Detailed work programs were prepared for each of them and their
status is updated three times each year through presentation to the Council.
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 a 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.
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• 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 Objective:
• 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, both for revenue and expenditures, for the fiscal year were higher when compared to the budget
estimates in virtually all the areas of the City’s operations.
The total General Fund balance increased by 3 million to $29.6 million. Of this amount, $3.5 million are non-
expendable and represent prepaid items; $159,724 are restricted for Debt service; $8.7 million is committed for
General government programs including Measure G carryover; $10.9 million are assigned and include $10.2
million for the required operating reserve (Contingency Fund), $596,796 for Development Services, and
$100,000 for City Attorney related operations. Finally, $6.3 million is classified as unassigned at 2017-18 fiscal
year-end. Per City Council direction, and in conjunction with adopted Council policies, staff will provide a
recommendation for the use of any available fund balance for one-time allocations with the 2018-19 Mid-Year
report. However, through the City’s adopted fiscal health response plan, the Council has given direction to
aggressively pay down CalPERS unfunded liabilities with available one-time funding.
Nonspendable 3,520,473$
Restricted for:
Debt service 159,724
Committed to:
General government programs 8,693,113
Assigned to:
Contingency fund (20% Minimum reserve)10,171,464
Development services 596,796
City Attorney 100,000
Unassigned 6,334,870
Total fund balance 29,576,440$
General Fund - Fund Balance June 30, 2018
For the Future: Continue to Focus on Sustainability and Long-term Fiscal Health. As part of the fiscal health
response plan, the City Council will consider the formation of a Section 115 Pension Trust fund to further
safeguard the City from changes by CalPERS related to unfunded liabilities and possible fluctuations in the
economy and income streams to the City.
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Revenue Base Growth. Since the Great Recession, the country has experienced an unprecedented long-term
expansion that continued in 2017-18. 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 several years. This growth is expected to continue into
2019, but signs of a possible recession warrant close tracking of economic indicators and actual vs. budgeted
revenue. This is also true for another revenue source that is seeing significant growth, development review fees.
A cooling of the real estate market could impact development services revenue growth and have a corollary
effect on development impact fee revenues forecasted to help construct infrastructure.
Containment of Operating Costs. The City’s efforts to control costs have been successful and are ongoing. The
City implemented 2nd and 3rd tier retirement benefit programs and now 40% of the workforce is enrolled in those
tiers of the retirement plans. These actions have been instrumental in helping the City contain current costs and
long-term liabilities related to retirement benefit programs. The City’s adopted Fiscal Health Response plan and
the direction to pay down the unfunded liability as much as possible, will assist in managing the liability over
the long run.
Infrastructure and Facilities Maintenance. The estimated cost of adequately maintaining, repairing, or
replacing existing General Fund facilities, infrastructure and equipment exceeds $10 million annually. This
excludes any enhancements or “betterments.” As part of the Fiscal Sustainability and Responsibility Major City
Goal, the City has established a ten-year Capital Improvement Program projection and the Council received
information regarding funding options in early 2018. Capital Improvement Program allocations for the fiscal
year were fully funded by the voter approved Local Revenue Measure half-cent sales tax. Approximately 70%
of the Local Revenue Measure sales tax is committed to the Capital Improvement Program.
Ongoing Commitment to Half Percent Sales Tax Measure Priorities (Essential Services Measure). The City
remains committed to the priorities for the use of the half percent sales tax measure as identified by the
community. They include public safety, senior services, code enforcement, neighborhood street paving, open
space preservation, traffic congestion relief and flood protection. The following table summarizes how the half
percent sales tax measure funds were used during fiscal year 2017-18.
Total expenditures during 2017-18 amounted to $13.5 million (including encumbrances and carryovers); the
remaining balances of these resources are designated for future year expenditures. A more detailed schedule of
half percent sales tax measure sources and uses is provided in the Financial Section of this report.
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Operating Capital
Programs Projects*Total
Preservation of Essential Services
Public Safety 892,388$ 490,828$ 1,383,216$
Community Development 252,729 252,729
Transportation 1,202,100 3,438,877 4,640,977
Leisure, Cultural and Social Services 130,818 424,891 555,709
General Government 432,386 432,386
Total 2,478,035$ 4,786,982$ 7,265,017$
Half Percent Sale Tax Measure Revenues & Uses Summary
Revenues:
Sales and use tax - Measure G 1/2 Cent add-on tax 7,504,485$
Use of money and property 56,409
Total Revenues 7,560,894
Uses:
Operating Programs (2,478,035)
Capital Projects (4,786,982)
Transfers (130,000)
Total Uses (7,395,017)
Excess of revenues over expenditures 165,877
Prior Sales Tax Measure Balance 5,901,482
Encumbered or designated for carryover for future year expenditures (6,284,108)
Net available for future year appropriations (216,749)$
Half Percent Sales Tax Measure Expenditures
2017/18
* Detail of Capital Projects is included with other supplementary information in the financial statements, which can be
found on page 110.
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 allocations. Although the policies cover virtually every aspect of financial
management, several of these policies are particularly relevant to the understanding of the City’s financial
performance in 2017-18.
Debt Administration Policies
The City’s Capital Financing and Debt Management policies contain general guidelines for refinancing of
outstanding debt. These guidelines call for periodic review of all outstanding debt to determine refinancing
opportunities, particularly to create economic benefit such as lower debt service payment or reduction of
principal.
Information on the City’s outstanding debt issues and other long-term liabilities is provided in Note 6 in the notes
to the financial statements.
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In May 2018, the City received affirmation from the nationally recognized statistical rating organization Fitch
Ratings that City bond ratings remain “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 2018 Lease Revenue Bonds are rated AA, and the City’s implied
General Obligation bond rating is AA+. Currently, the City of San Luis Obispo has no general obligation debt.
In reaching its decision, 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 financial resources 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.
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,” non-
recurring expenditures.
Fund Balance and Reserve Policies
The City’s policies recognize the importance of long-range planning in managing the City’s fiscal affairs in order
to provide for stable operations, promote more orderly spending patterns, and assure the City’s long-term fiscal
health. The reserves contained in the General Fund and Enterprise Funds play a pivotal role in this strategy. The
reserve policies call for a minimum fund balance of at least 20% of operating expenditures in the General Fund
and a working capital level of 20% of operating expenses in the Water, Sewer, and Parking Enterprise Funds.
The policies also require the Fleet Management and the Information Technology Replacement Funds to provide
for the timely replacement of vehicles and equipment as well as IT equipment and software.
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 liability.
With the 2017-19 Financial Plan, the guidance was incorporated into the City’s fiscal policies. Additionally, the
City began addressing the long-term needs of its capital assets and categorizing asset maintenance, asset
replacement, and new assets driven by new development. The City Council received a first presentation of the
long-term need of its infrastructure in early 2018 and will continue the discussion in February 2019.
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.
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Starting with fiscal year 2015-16, public agencies are billed a contribution rate as a percentage of payroll plus a
lump sum payment toward the City’s unfunded liability. It is the policy of the City to fully fund the annual
contribution to ensure that the plan will fully meet its obligation to retired employees on a timely basis. As part
of its long-term cost reduction strategy, the City has implemented a 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. The Fiscal Health Response plan, adopted by the City
Council in April 2018, considered further contributions from employees toward the pension liability.
Negotiations are ongoing with several units having agreed to further contribution increases beginning in 2019-
20.
Prepaying the City’s unfunded liability should reduce overall annual costs depending on whether 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. Due to CalPERS purchasing power, the City
continues to experience competitive health care rates. However, as a condition of joining the CalPERS health
program, the City agreed to contribute the minimum monthly amount required by law towards retiree health care
coverage for both active and retired employees. This allows retired employees to purchase health insurance at
the same rate offered to active employees.
Additionally, the City 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.
These OPEB benefits were financed on a pay-as-you-go basis in the past. As directed by Council in May 2008,
the City began fully pre-funding the OPEB obligation via an irrevocable trust in 2008-09.
Additional information on the City’s retirement and post-employment benefits can be found in Note 7 and Note
8 in the notes to the financial statements.
MAJOR INITIATIVES
The City continued its efforts on a number of significant initiatives in 2017-18 which had a beneficial effect on
fiscal health and quality of life.
TRANSMITTAL MEMORANDUM
xvi
Fiscal Sustainability and Responsibility
The organization continued its focus on Fiscal Sustainability and Responsibility throughout the 2017-18 fiscal
year 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 2017-19 Financial Plan, the Council adopted a Fiscal Sustainability and Responsibility Major City Goal
with a focus on economic development and responsiveness, a structurally balanced fiscal outlook, the reduction
of unfunded liabilities, and an emphasis on infrastructure financing.
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 make 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. Voter authority for this local sales tax measure expires in March 2023
and will require both Council and voter action to be valid after this date.
Economic Development Strategic Plan.
The City’s 2012 Economic Development Strategic Plan (EDSP) provides a prioritized list of strategic actions
aimed at overcoming barriers to job creation and nurturing the conditions, relationships, and resources that enable
and encourage the private sector to create head of household jobs on a consistent basis while continuing to
support the broader economy of the City. To create and implement these efforts, the EDSP identified the City’s
fee program and the lack of infrastructure in key areas as barriers to overcome and is in the process of
implementing strategies to improve the economic environment for job creation in the City. The EDSP builds on
the San Luis Obispo County Economic Strategy, which identified five industry clusters with the greatest potential
to drive local and regional economic prosperity, and job creation. The EDSP focuses on partnerships and
collaborative efforts with community partners including the Economic Vitality Corporation, the Chamber of
Commerce, the Small Business Development Center, California Polytechnic State University, and Cuesta
College.
The planned closure of Diablo Canyon Nuclear Power Plant will nurture a study of the economic and fiscal
impacts on the region and the City, an updated Economic Development Strategic Plan with identified strategies
to address impacts of the closure, and a comprehensive plan of how to invest closure settlement funds to be
received under SB1090, and informed by SB 968, in economic development activities.
On November 6, 2018, the City’s voters approved a cannabis tax for the retail and production of cannabis related
products. The City will begin receiving applications for these establishments in January 2019, with the first ones
to open by May 2019. The City estimates new revenue through this measure amounting to $1.5 million annually
when the cannabis industry is fully established. The full $1.5 million is not estimated to be realized until the
2019-20 fiscal year.
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 a 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
TRANSMITTAL MEMORANDUM
xvii
study to support the Downtown Maintenance District with the 2017-19 Financial Plan. Downtown SLO, a key
economic development partner, continues to work with downtown merchants and property owners on both
funding and service options and the City Council will likely receive a recommendation in Spring 2019.
AWARD FOR EXCELLENCE IN FINANCIAL REPORTING
The Government Finance Officers Association of the United States and Canada (GFOA) has awarded a
Certificate of Achievement for Excellence in Financial Reporting to the City for its CAFR for the fiscal year
ended June 30, 2017.
The Award Program.
The Certificate of Achievement is a prestigious national award recognizing conformance with the highest
standards for preparation of State and local government financial reports.
In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and
efficiently organized comprehensive annual financial report whose contents conform to program standards. This
report must satisfy both U.S. generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. The City has received a Certificate of
Achievement each year since 1984. We believe our current CAFR continues to conform to the Certificate of
Achievement program requirements, and we are submitting it to GFOA to determine its eligibility for another
certificate.
Value of Program Participation. There are benefits to participating in these programs beyond simply receiving
recognition for 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. We believe 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.
TRANSMITTAL MEMORANDUM
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 eflforts, working in conjunction with the City's independent
auditors, to produce this document.
We would like to take this opportunity to compliment all those staff members within the Finance Department as
well as in the other departments and our independent auditors who were associated with the preparation of this
report. We would also like to thank the City Council for the continued support and dedication in planning and
conducting the financial operations of the City in a fiscally responsible and progressive manner.
Derek Johnson, City Manager
Brigitte Finance Director
XVI 11
xix
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
Active Transportation Committee
Administrative Review Board
Architectural Review Commission
Construction Board of Appeals
Council Compensation Committee
Cultural Heritage Committee
Housing Authority
Human Relations Commission
Investment Oversight Committee
Jack House Committee
Mass Transportation Committee
Parks and Recreation Commission
Personnel Board
Planning Commission
Promotional Coordinating Committee
Revenue Enhancement Oversight Commission
Tourism Business Improvement District Board
Tree Committee
APPOINTED OFFICIALS AND DEPARTMENT HEADS
Appointed Officials
Derek Johnson City Manager
J. Christine Dietrick City Attorney
Department Heads
Greg Hermann Acting Assistant City Manager
Michael Codron Director of Community Development
Brigitte Elke 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
xx
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.
xxi
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.
xxii
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.
xxiii
ORGANIZATION OF THE CITY OF SAN LUIS OBISPO
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 30,2017
Q/Ls^PTVw.M
Executive Director/CEO
XXIV
FINANCIAL SECTION
G ENNBURDETTE
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 fimd, and the aggregate remaining fund information of the City of San Luis Obispo, California, (the City) as of and
for the year ended June 30,2018, 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 prqiaration and fair presentation of these financial statements in accordance with
accounting principles generally accepted in the United States of America; this includes the design, implementation, and
maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free fi-om
material misstatement, whether due to 6aad 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 perfonning 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 Qaad or error. In making fhose 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
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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, 2018, 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.
Change in Accounting Principle
As discussed in Note 17 to the financial statements, during 2018 the City adopted new accounting guidance, GASB
Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. Our opinion
is not modified with respect to this matter.
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 110 through 112, combining and individual nonmajor fund financial statements and schedules on pages 113
through 134, 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.
3
The Honorable City Council of the
City of City of San Luis Obispo, California
Page 3
The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the
basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 21, 2018, 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 21, 2018
4
Management’s Discussion and Analysis
Overview of the Financial Statements
The discussion and incorporated analysis in this document are intended to serve as an introduction to the City’s basic
financial statements, which include the following components: (1) government-wide financial statements, (2) fund
financial statements and (3) notes to financial statements. This report also contains required supplementary
information (RSI) as well as other supplemental financial information.
Government-wide Financial Statements. This set of statements is designed to provide readers with a broad overview
of the City’s finances, in a manner similar to private-sector business reporting.
The Statement of Net Position presents financial information on all the City’s assets/deferred outflows of 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. Due to the implementation of GASB 68 and 75, the Statement of Net Position reported for
fiscal year 2017-18 considers the City’s long-term pension and other post-employment benefits liabilities, effectively
decreasing the City’s net financial position.
The Statement of Activities presents changes in the government’s net position during the most recent fiscal year. All
changes in net position are reported during the period when the underlying events giving rise to the change occur,
regardless of the timing of the related cash flow. Thus, revenues and expenses are reported in this statement for some
items that will only result in cash flows in future fiscal periods such as revenue pertaining to uncollected taxes.
The City’s government-wide financial statements distinguish the functions of the City that are principally supported
by taxes and intergovernmental revenues (governmental activities) from functions that are intended to recover all or a
significant portion of their cost through user fees or that are required by grantor agencies or City policies to be
accounted for in this fashion (business-type activities).
The governmental activities include: (1) public safety, (2) transportation, (3) leisure, cultural and social services,
(4) community development and (5) general government support services such as legal services, elections, human
resources, risk management, finance, and information technology. The business-type activities of the City include:
(1) water, (2) sewer , (3) parking operations and the (4) transit program.
As required by U.S. Generally Accepted Accounting Principles (GAAP), these financial statements present the City
(the primary government) and its component units (entities for which the government is considered to be financially
accountable). Blended component units, although legally separate entities, are in substance, part of the government's
operations and data from these units are combined with data of the primary government.
The San Luis Obispo Capital Improvement Board (Board) is reported as a blended component unit in these statements.
The Board provides financing for the construction and acquisition of City facilities. The Board consists of members
of the City Council. Activities of the Board are accounted for in the applicable City governmental or enterprise funds.
Separate financial statements are not prepared for the San Luis Obispo Capital Improvement Board. The City has no
component units that require discrete presentation in accordance with Governmental Accounting Standards Board
(GASB) standards.
Management’s Discussion and Analysis
5
Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control over resources
that have been segregated for specific activities or objectives. The City, like other state and local governments, uses
fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of
the City can be divided into three categories: (1) governmental funds, (2) proprietary funds, and (3) fiduciary funds.
Governmental Funds. Governmental funds are used to account for essentially the same functions reported as
governmental activities in the government-wide financial statements. However, unlike the government-wide financial
statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources,
as well as on balances of spendable resources available at the end of the fiscal year. Such information reflects financial
resources available in the near future to finance the City’s programs.
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is
useful to compare the information presented for governmental funds with similar information presented for
governmental activities in the government-wide financial statements. By doing so, readers may better understand the
long-term impact of the government’s near-term financial decisions. Both the governmental funds balance sheet and
the governmental funds statement of revenues, expenditures and changes in fund balances provide a reconciliation to
facilitate this comparison between governmental funds and governmental activities.
The City maintains several individual governmental funds organized according to their purpose (general, special
revenue, debt services, and capital projects). Information is presented in the governmental funds balance sheet and in
the governmental funds statement of revenues, expenditures and changes in fund balances. The General Fund is
considered a major fund. Data from the major governmental funds are combined into one aggregated presentation.
Individual fund data for each of the non-major governmental funds is provided in the form of combining statements
in the supplementary information section in this report.
Of the major funds, the City adopts an annual appropriated budget for all funds. A budgetary comparison statement
has been provided as required supplementary information to demonstrate compliance with the budget. Budgetary
information for non-major governmental funds with annual budgets has been provided with the fund financial
statements in the supplementary information section in this report.
Proprietary Funds. Proprietary funds are generally used to account for services for which the City charges customers;
either outside customers or internal units/divisions of the City. Proprietary funds provide the same type of information
as shown in the government-wide financial statements, only in more detail.
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.
Management’s Discussion and Analysis
6
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.
Financial Highlights
The following information provides a narrative overview and analysis of the financial activities of the City of San
Luis Obispo (City) for the fiscal year that ended June 30, 2018. It should be read in conjunction with the accompanying
transmittal memorandum and the basic financial statements.
In 2017-18 fiscal year, the City continued to experience slow but steady economic growth. Actual revenues received
were slightly higher than budgeted and the City’s expenditures came in below appropriated budget amounts.
Following CalPERS’ announcement regarding policy changes lowering the expected rate of return from 7.5% to 7.0%,
the City adopted a Fiscal Health Response Plan (FHRP) on April 17, 2018. The three-year plan, spanning fiscal years
2019 through 2021, is designed to align the City’s budget with a long-term fiscal outlook to address an increasing
payment of the unfunded liabilities over the 30-year schedule that started in 2015.
Pursuant to GASB Statement No. 68 (GASB 68), Accounting and Financial Reporting for Pensions and GASB
Statement No. 75 (GASB 75), Accounting And Financial Reporting for Postemployment Benefits Other Than Pensions
(OPEB), the City reports on the unfunded pension and OPEB liabilities on the full accrual basis of accounting in the
government-wide financial statements. Also included are note disclosures and supplementary schedules as required
by GASB 68 and GASB 75. The measurement date for fiscal year 2017-18 pension and OPEB liabilities is as of the
fiscal year ended June 30, 2017. 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 2017-18
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 – Statement of Net
Position - 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,
2018 by $311 million (net position). The City’s unrestricted net position was negatively impacted beginning in
fiscal year 2014-15 with the implementation of GASB 68 that requires the disclosure and inclusion of the City’s
unfunded pension liability in the statement of net position. More detailed information on the City’s pension plans
Management’s Discussion and Analysis
7
and obligations can be found in Note 7 on pages 64-75 of this report. Note 8, on pages 76-81 of this report,
provides detailed information on the City’s OPEB liabilities under GASB 75 which influenced the 2017-18 net
position due to required restatements of $7.3 million.
• Per the City’s Statement of Net Position, total City-wide assets increased by approximately $6.9 million or 1.3%.
In governmental activities, amounts receivable from various sources increased by 1.3 million; cash and
investment balances increased by $1.3 million; prepaid expenses increased by $347,000 and cash held with fiscal
agent decreased by $1.8 million.
• In business-type activities which include Water, Sewer, Parking and Transit, accounts receivable increased
minimally by $65,000 while cash and investment balances increased by $1.1 million. Prepaid items increased by
$150,000 and cash held with fiscal agent and investments in joint ventures decreased by $718,000.
• City-wide liabilities increased by approximately $16.2 million during the fiscal year. This increase is due to the
long-term or non-current liabilities which include net pension and other post-employment benefits liabilities as
required under GASB 68 and 75. The governmental activities accounted for $14.1 million of the increase while
business-type activities experienced a $2.1 million increase in long-term liabilities.
• The City’s governmental funds altogether reported combined ending fund balances of $53.5 million.
Approximately $29.5 million or 55% of this total amount is not available for new spending as it is either restricted
for (1) debt service, (2) grant obligations, (3) prepaid insurance obligations, or (4) committed to specific programs
like impact fee programs and general capital outlay. Another $17.6 million is assigned as of June 30, 2018 to
meet expenditures in subsequent years in the form of purchase orders, encumbrances, and unspent appropriations
that have been rolled over into fiscal year 2018-19 in accordance with the City’s budget policies. Per the City’s
policy, $11.1 million of the fund balance is assigned to the governmental funds’ 20% operating reserve.
• The total General Fund balance increased by $3 million to $29.6 million. After the adjustments to reflect amounts
non-spendable, restricted, or committed to general government programs ($12.4 million), designated reserves
including the 20% operating reserve, ($10.9 million), $6.3 million remain as unassigned balance at June 30, 2018.
However, through the City’s adopted fiscal health response plan, the City Council has given direction to
aggressively pay down CalPERS unfunded liabilities with available one-time funding.
Management’s Discussion and Analysis
8
Government-wide Overall Financial Analysis
Statement of Net Position. Net position may serve over time as useful indicator of a government’s financial position.
The following is the condensed statement of net position for the fiscal years ended June 30, 2018 and 2017
CONDENSED STATEMENT OF NET POSITION
2017-18 2016-17 2017-18 2016-17 2017-18 2016-17
Current and other assets 59,246,957$ 58,815,853$ 80,111,101$ 78,654,702$ 139,358,058$ 137,470,555$
Capital assets 196,556,470 193,327,618 180,901,769 179,138,958 377,458,239 372,466,576
Total assets 255,803,427 252,143,471 261,012,870 257,793,660 516,816,297 509,937,131
Total Deferred Outflows of Resources 32,103,779 27,295,048 5,091,026 3,883,179 37,194,805 31,178,227
Current liabilities 8,794,714 9,131,747 6,945,644 6,432,263 15,740,358 15,564,010
Noncurrent liabilities 154,947,663 140,534,317 69,870,322 68,286,279 224,817,985 208,820,596
Total liabilities 163,742,377 149,666,064 76,815,966 74,718,542 240,558,343 224,384,606
Total Deferred Inflows of Resources 2,180,281 3,917,831 168,586 817,798 2,348,867 4,735,629
Net position:
Net investment in capital assets 171,472,251 165,100,426 136,694,402 131,149,516 308,166,653 296,249,942
Restricted 421,954 2,268,499 1,558,795 2,276,526 1,980,749 4,545,025
Unrestricted (49,909,657) (41,514,301) 50,866,147 52,714,457 956,490 11,200,156
Total Net Position 121,984,548$ 125,854,624$ 189,119,344$ 186,140,499$ 311,103,892$ 311,995,123$
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 $311 million at June 30, 2018. The largest portion of the City’s net position reflects its investment in
capital assets in the amount of $308 million (e.g. land, buildings infrastructure, machinery, and equipment), less any
related outstanding debt used to acquire those assets. The City uses these capital assets to provide services to citizens;
consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is
reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from
other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
Management’s Discussion and Analysis
9
Information about changes in net position for fiscal years 2017-18 and 2016-17 is summarized below. Reasons for
the changes are discussed in the following sections for governmental activities and business-type activities.
2017-18 2016-17 2017-18 2016-17 2017-18 2016-17
Revenues:
Program Revenues:
Charges for services*15,506,511$ 15,742,237$ 44,885,394$ 41,786,730$ 60,391,905$ 57,528,967$
Operating grants and contributions*4,116,552 2,584,222 3,099,618 4,180,386 7,216,170 6,764,608
Capital grants and contributions 39,781 40,531 39,781 40,531
General Revenues:
Sales taxes (Including 1/2 percent local Sales Tax)24,559,570 24,068,665 24,559,570 24,068,665
Property taxes 11,425,510 10,756,477 11,425,510 10,756,477
Transient occupancy tax 7,514,289 7,381,989 7,514,289 7,381,989
Utility users tax 5,627,356 5,539,407 5,627,356 5,539,407
Property tax in lieu of VLF 4,637,253 4,353,912 4,637,253 4,353,912
Other taxes and fees 4,261,341 3,929,377 4,261,341 3,929,377
Investment earnings 164,434 260,169 320,471 182,261 484,905 442,430
Miscellaneous and other 745,253 737,826 209,300 206,700 954,553 944,526
Total revenues 78,597,850 75,394,812 48,514,783 46,356,077 127,112,633 121,750,889
Program expenses:
Public safety 42,097,557 31,806,692 42,097,557 31,806,692
Public utilities 33,682,348 31,459,874 33,682,348 31,459,874
Transportation 9,229,042 9,668,840 8,453,943 7,868,364 17,682,985 17,537,204
Culture and recreation 11,125,792 9,824,262 11,125,792 9,824,262
Community development 13,457,993 14,656,604 13,457,993 14,656,604
General government 1,213,217 644,855
Interest on long-term debt 1,488,183 1,170,984 1,488,183 1,170,984
Total expenses 78,611,784 67,772,237 42,136,291 39,328,238 119,534,858 106,455,620
Increase (decrease) in net position before transfers (13,934) 7,622,575 6,378,492 7,027,839 6,364,558 14,650,414
Transfers 1,198,027 1,051,563 (1,198,027) (1,051,563) - -
Change in net position 1,184,093 8,674,138 5,180,465 5,976,276 6,364,558 14,650,414
Net position - beginning of year 125,854,624 117,180,486 186,140,499 180,164,223 311,995,123 297,344,709
Prior year restatement (5,054,169) (2,201,620) (7,255,789) -
Net position - end of year 121,984,548$ 125,854,624$ 189,119,344$ 186,140,499$ 311,103,892$ 311,995,123$
SUMMARY OF CHANGES IN NET POSITION
Governmental Activities Business-Type Activities Total
Governmental Activities. The City’s net position in the Governmental activities decreased by $3.8 million to $122
million on June 30, 2018 due to a current year increase of $1.2 million offset by a $5 million prior year restatement of
OPEB obligations necessitated by the implementation of GASB 75 – Accounting and Financial Reporting for
Postemployment Benefits Other than Pensions as of July 1, 2017. Overall, 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 2017-18
appropriated budget. Part of this growth trend is the hospitality and tourism sector and a healthy real estate market.
In 2017-18, private development remained strong and generated development related permit revenues, as well as
development-related impact and in-lieu fees which are held until needed for planned capital outlay.
A portion of the City’s net position, $1.9 million, is subject to restrictions imposed by external parties and its use is
determined by those restrictions and contractual obligations. This is the fourth year of the GASB 68 Statement
implementation by the City requiring the disclosure of the City’s long-term pension liability. Fiscal year 2017-18 is
Management’s Discussion and Analysis
10
also the first year of reporting requirements under GASB 75 which lead to the restatements indicated in the Changes
of Net Position. Without the prior year restatement, the governmental activities contributed roughly $1.2 million and
business-type activities contributed roughly a $5.2 million increase to the combined net position, but restatements
totaling $7.3 million decreased the combined net position by $890,000 to $311 million.
The total governmental revenue increased from fiscal year 2016-17 by $3.2 million or 4%. Revenues are divided into
charges for services, grants and contributions, and general revenues including applicable taxes as listed in the
following table. Charges for services are revenues directly related to service activity and related investment earnings
and are a mechanism of cost recovery.
General revenues represent 75% of the total revenue and are used to pay costs of providing program services.
Revenues 2017-18 2016-17 Inc / (Dec)%
Charges for services 15,506,511$ 15,742,237$ (235,726)$ -1%
Operating grants and contributions 4,116,552 2,584,222 1,532,330 59%
Capital grants and contributions 39,781 40,531 (750) -2%
General Revenues:
Sales taxes (Including 1/2 percent local sales tax)24,559,570 24,068,665 490,905 2%
Property taxes 11,425,510 10,756,477 669,033 6%
Transient occupancy tax 7,514,289 7,381,989 132,300 2%
Utility users tax 5,627,356 5,539,407 87,949 2%
Property tax in lieu of VLF 4,637,253 4,353,912 283,341 7%
Other taxes and fees 4,261,341 3,929,377 331,964 8%
Investment earnings 164,434 260,169 (95,735) -37%
Miscellaneous and other 745,253 737,826 7,427 1%
Total governmental revenues 78,597,850$ 75,394,812$ 3,203,038$ 4%
GOVERNMENTAL ACTIVITY CHANGE IN REVENUE
Management’s Discussion and Analysis
11
Top Governmental Activity Revenue Sources. As shown in the graph below, the City’s top five tax revenues
accounted for almost 65% of total revenues, with service charges accounting for another 20% and ancillary revenue
making up the remainder. Generally, revenues for fiscal year 2017-18 increased from those of the prior fiscal year
with Charges for Services being the exception.
Sales and use tax -general,
$17,055,085
Sales and use tax -Half
Percent Sales Tax,
$7,504,485
Property tax,
$11,425,510
Transient occupancy tax,
$7,514,289
Utility users tax,
$5,627,356
Property tax in lieu of VLF,
$4,637,253
Franchise taxes ,
$1,597,655
Business tax,
$2,663,686
Grants ,
$4,156,333
Charges for services ,
$15,506,511
Governmental Revenues
The following narrative addresses the significant variances in key revenues from the prior fiscal year:
• Sales Tax. Sales Tax increased by $490,000 over the prior year; a modest increase and the City is
tracking this major revenue source and the economic factors influencing it carefully.
• Property Tax. Property tax revenue including the portion in-lieu of VLF increased by $952,000
indicating a healthy real estate market.
• Transient Occupancy Tax (TOT). Increased by $132,000 largely due to flat occupancy rates and
increased room rents.
• Capital Grants and Contributions. The City was able to secure grants and contributions amounting to
$4.1 million which is a 58% increase over the previous year.
• Program Expenses: Governmental Activities. Program expenses increased by $10.8 million or 16.0%
over the prior fiscal year. Public Safety and Culture and Recreation saw increases in expenses, while
Transportation and Community Development decreased from the prior year.
Management’s Discussion and Analysis
12
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
40,000,000
45,000,000
Program Expenses & Revenues:
Governmental Activities
Expenses Revenues
Business-Type Activities. The City’s business-type activities increased $3 million to $189 million at June 30, 2018.
Revenue Sources: Business-Type Activities. Operating revenues for services increased by $3.1 million largely due
to growth in service charges in the Parking fund and increased rates in the Water and Sewer funds as follows:
1. Water revenues. Total operating revenues increased by $2 million. General water impact fees increased by
$865,000 compared to the prior year as a result of an active development environment.
2. Sewer revenues. The overall revenue increased by $545,000 over the prior year showing a stabilization based on
increased use as rates had not been increased for 2017-18.
3. Parking fees. In fiscal year 2017-18 the Parking Fund also saw an increase in revenue of $635,000 due to Council
approved increases to parking rates.
4. Transit revenues: The revenue received in the Transit fund decreased by $1 million in 2017-18. The variance is
due to a $1 million discretionary grant received in 2016-17 that was not available in the current fiscal year.
Management’s Discussion and Analysis
13
Program Expenses: Business Type Activities. The program expenses for the proprietary funds increased by $2.8
million, a 7% uptick over the prior fiscal year. The increase is largely based on increased operating cost for the Water
and Sewer funds making up $2.2 million of the overall increase in business activities. However, as the chart below
illustrates, all funds, except Transit, generated revenues in excess of expenses.
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
Water Sewer Parking Transit
Program Expenses & Revenues:
Business-Type Activities
Expenses Revenues
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, 2018, the City’s governmental funds reported combined ending fund balances of
approximately $53.5 million, or an increase of $1 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 $3.4 million represents prepaid items largely pertaining to insurance
related obligations.
o Restricted fund balance of $1.8 million which have restrictions imposed by external parties or
enabling legislation. Funds in this category include Debt Services fund and Supplemental Law
Enforcement Funds.
Management’s Discussion and Analysis
14
o Committed fund balance of $24.2 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.
o Assigned fund balance of $17.6 million, which includes the amounts to be used for specific purposes
of the City but do not meet the criteria to be classified as restricted or committed. Funds in this
category included Contingency funds (20% minimum reserve) and funds to be used for
Development Services.
o Unassigned fund balance of $6.3 million as of June 30, 2018
Major Governmental Funds. In fiscal year 2017-18 the City maintained one major fund: the General Fund. Changes
in the General Fund are highlighted in the Financial Highlights section above.
Non-Major Governmental Funds. Non-major funds include 1) the Downtown Business Improvement District Fund,
2) the Transportation Development Act Fund, 3) the Tourism Business Improvement Fund, 4) the Gas Tax Fund,
5) the Community Development Block Grant Fund, 6) the Law Enforcement Grants Fund, 7) the Public Art
Contributions Fund, 8) the Insurance Fund 9) the SB1 Road Repair Fund, 10) the SB1186CASP Certify Fund, 11) the
Capital Outlay Fund, 12) the Parkland Development Fund, 13) the Open Space Protection Fund, 14) the Airport Area
Impact Fee Fund, 15) the Los Osos Valley road Sub-Area Fee Fund, 16) the Waste Water Impact Fee Fund, 17) the
Fleet Replacement Fund, 18) the Information Technology Fund, 19) the Affordable Housing Fund, 20) the
Transportation Impact Fee Fund, 21) the Infrastructure Investment Fund, and 22) the Debt Service Fund . These funds
are presented in the basic financial statements in the aggregate.
A significant number of these funds represent activity for capital projects. At June 30, 2018, these funds had an
aggregate fund balance of $23.9 million. Of this total, $17.2 million is restricted for payment of debt service or
committed to specific future capital projects.
The remaining balance of $6.8 million is assigned for contingency reserves and expenditures in subsequent years.
More information about these aggregated non-major funds can be found in the combining and individual fund
statements and schedules immediately following the required supplementary information.
Proprietary Funds. The City’s four enterprise funds provide the same type of information found in the government-
wide financial statements, but in more detail. Highlights of the annual activity for these funds have already been
presented in the discussion of the business-type activities.
General Fund Budgetary Highlights
A detailed budgetary comparison schedule for the year ended June 30, 2018 is presented as required supplementary
information following the notes to the financial statements. The final budget amounts include changes that were
approved by the City Council through June 30, 2018.
Management’s Discussion and Analysis
15
The following summarizes the original budget compared with the adjusted final budget for fiscal year 2017-18. The
adjusted final budget includes Council approved adjustments as well as administrative budget adjustments in
accordance with the City’s adopted fiscal policies and procedures.
General Fund Original Budget Final Budget
Positive
(Negative)
Variance
Revenues 68,490,660$ 69,547,443$ 1,056,783$
Expenditures 64,315,761 68,785,588 4,469,827
Other sources (uses)(1,438,757) (6,468,655) (5,029,898)
Beginning fund balance 26,478,694 26,478,694 -
Ending fund balance 29,214,836$ 20,771,894$ (8,442,942)$
BUDGETARY HIGHLIGHTS
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, property tax, transient occupancy tax (TOT) and subventions and
grants were estimated within a five-year fiscal forecast and updated through the mid-year review. The mid -year review
as approved by the City Council in February 2018 increased assumed revenues by $1 million.
The following table compares the actual results for revenues, expenditures, and fund balance with the final budget for
the General Fund. As the table shows, revenues exceeded the final budget by nearly $2.2 million, while expenditures
and other uses ended below the final budget figure by $9.8 million. The net amount for additional uses ended above
budgeted resources by $1.6 million. The net result of these variances resulted in the ending fund balance increasing
by more than $8.9 million over the amount anticipated in the budget.
General Fund Final
Budget Actual
Positive
(Negative)
Variance
Revenues 69,547,443$ 71,737,084$ 2,189,641$
Expenditures 68,785,588 60,583,436 (8,202,152)
Other sources (uses)(6,468,655) (8,055,902) (1,587,247)
Beginning fund balance 26,478,694 26,478,694 -
Ending fund balance 20,771,894$ 29,576,440$ 8,804,546$
Ending fund balance
Nonspendable 3,520,473 3,520,473
Restricted 159,724 159,724
Committed 8,693,113 8,693,113
Assigned 10,868,260 10,868,260
Unassigned 6,334,870 6,334,870
Total ending fund balance 20,771,894$ 29,576,440$ 8,804,546$
BUDGET - ACTUAL COMPARISON
Management’s Discussion and Analysis
16
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, 2018, the City’s investment in capital assets for its governmental and business type activities
amounts increased to $377.5 million (net of accumulated depreciation).
The investment in capital assets includes open space, park improvements, buildings and improvements, vehicles and
equipment, streets, bikeways, water, wastewater, and storm drain systems.
Capital Assets (Net of Depreciation)
2018 2017 2018 2017 2018 2017
Nondepreciable capital assets 42,787,165$ 40,811,362$ 27,060,991$ 21,469,603$ 69,848,156$ 62,280,965$
Depreciable capital assets (net of
accumulated depreciation ) 153,769,305 152,516,256 153,840,778 157,669,355 307,610,083 310,185,611
Total Capital Assets 196,556,470$ 193,327,618$ 180,901,769$ 179,138,958$ 377,458,239$ 372,466,576$
Activities Activities
Governmental Business-Type Total
Major capital asset expenditures during the fiscal year included the following:
• $2.9 million for Street and Flood projects including the rehabilitation of LOVR & Madonna Road
• $1.4 million for the Margarita sewer lift station replacement
• $450,000 Sinsheimer Park equipment replacement
• $830,000 in Water system telemetry upgrades
• $1,600,00 in Fleet Replacements
• $664,000 for I.T equipment replacement.
• $200,000 contribution for the new homeless center on Prado Road
• $850,000 for low income housing at Bishop Street
• $260,000 for improvements to the City/County Library
• $373,000 for traffic and bike facilities improvements
• $208,000 for ADA trail improvements at Laguna Lake
• $235,000 for Open Space maintenance
Additional information on the City’s capital assets can be found in Note 5 to the basic financial statements.
Long-Term Debt. At June 30, 2018, the City’s long-term debt had decreased by $7 million with $73 million still
outstanding. Part of the decrease is the refinancing of three lease revenue bonds that will yield an annual debt payment
savings of $370,00.
Long- Term Debt
2018 2017 2018 2017 2018 2017
Lease-revenue bonds 23,484,450$ 26,328,540$ 21,815,204$ 24,072,708$ 45,299,654$ 50,401,248$
Lease-purchase financing 1,599,769 1,898,652 1,599,769 1,898,652
Installment sale agreement 6,783,114 7,366,468 6,783,114 7,366,468
Loans 503,101 591,647 15,743,808 16,709,160 16,246,909 17,300,807
Compensated absences 2,468,124 2,422,613 637,526 653,492 3,105,650 3,076,105
28,055,444$ 31,241,452$ 44,979,652$ 48,801,828$ 73,035,096$ 80,043,280$
Governmental Business-Type Total
Activities Activities
Management’s Discussion and Analysis
17
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, 2018, 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, 2018, 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
Overall, the economic outlook for San Luis Obispo is stable for now and into 2019, but all signs point to a slowdown
into 2020.
Employment. Employment growth slowed from 2017 levels, but still shows growth in non-farm jobs. These sustained
gains in payroll jobs have helped drive the unemployment rate down to 2.8%, the lowest in nearly two decades. Natural
Resources and Construction added the most jobs and nearly one third of non-farm jobs gains. In San Luis Obispo,
1,350 jobs were added in 2017. However, total non-farm employment is likely to increase less than 2% for all of 2018,
and growth will slow further beyond 2018. Mounting labor shortages and affordability remain key challenges that will
only worsen in the coming years.
Sales Tax. Overall, sales tax revenue increased modestly from the first half of 2017 to the first half of 2018. The main
force behind the slowdown in consumer and business spending was a decrease in business-to-business spending which
fell significantly during that time. Although it is expected that taxable sales continue to grow into 2019, it will be more
modest in San Luis Obispo as population growth lags behind other parts of California. As such, San Luis Obispo will
rely on continued growth in business activity and tourism.
Tourism. Tourism and hospitality are becoming a bigger part of the economy in San Luis Obispo as is seen with the
County airport reaching two years of record-breaking passenger levels, making it the fifth-fastest growing airport in
the nation. However, income from transient occupancy tax is expected to grow only 2.2% in San Luis Obispo; slightly
above the countywide increase of 1.6%. Spending by tourists remains strong as is evident in an increase in hospitality
employment and the continued increase in spending at restaurants.
Real Estate. The housing market has begun to show signs of slowing and housing inventory remains tight. Though
price appreciation continues, it is at a smaller percentage gain compared to recent years. Sales are little changed from
a year ago, but the median number of days on the market has increased significantly. In San Luis Obispo, the median
house price has increased by 6.7%, but single-family home sales dropped by 9.5%.
Construction Activity. Though development permitting activities have been disappointing in the county overall, it
remains strong in the City of San Luis Obispo. Year-to-date permit numbers for single-family residences as well as
multi-family building are up significantly. There is also noticeable commercial real estate construction either under
way or in various permitting stages. Development revenue continues to be strong as planning and building activity
continues into 2019.
Overall, the economic forecast indicates modest growth relative to the local economy and should be beneficial for the
City’s revenue projections into 2019. However, as mentioned above, the possibly of an economic slow-down
sometime in the near future is likely. Short-term interest rates have climbed over the past year flattening the Treasury
yield curve. An increase in interest rates translates into increase loan rates for consumers making purchases on credit.
This could lead to a possible slowdown in home sales as mortgage payments increase as well as in overall consumer
confidence and spending.
Management’s Discussion and Analysis
18
Additionally, along with its regional partners, the City continues to address the closure of the Diablo Canyon Power
Plant and prepare for the impacts to the region due to significant loss of jobs and property taxes. On September 19,
2018, Governor Brown signed SB 1090, directing the CPUC to approve the $85 million economic mitigation
settlement and PG&E’s full $350 million proposed employee retention and retraining program. Of the $85 million,
the City will receive $1.82 million for economic development and the remaining will be allocated to other surrounding
agencies that will likely have an indirect beneficial impact on the City.
Next Year’s Budgets and Rates
On June 18, 2018, the City Council adopted the 2018-19 Financial plan supplement with an appropriation of $203
million. 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 $7.6 million in 2018-19. 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 sales tax.
Cannabis Tax. On November 6, 2018, the City’s voters approved a cannabis tax for the retail and production of
cannabis related products. The City will begin receiving applications for these establishments in January 2019, with
the first ones to open by May 2019. The City estimates new revenue through this measure amounting to $1.5 million
annually when the cannabis industry is fully established. The full $1.5 million is not estimated to be realized until the
2019-20 fiscal year
General Fund Revenue. Based on the economic outlook, the City’s General Fund five-year forecast assumes slow,
but steady growth in all of the revenue streams until 2020, when a further slow down is expected. This is based on
growing trends indicating recessionary tendency and a very tight labor market that is already influencing sectors such
as construction.
Utility Rates. On June 18, 2018, the City Council approved a new rate methodology for both the water and sewer
utilities. The rate adoption followed all necessary notifications and public hearings as dictated by Proposition 2018.
The following rates and rate components were adopted:
Water Rates for 2018-19
Single Family Residential Rate Description Cost
Water Base Fee* $20.61 per month
Water Usage Tier 1 (1-5 Units) $5.90 per Unit
Water Usage Tier 2 (6-12 Units) $6.87 per Unit
Water Usage Tier 3 (13+ Units) $12.59 per Unit
Sewer Treatment Base Fee $18.69 per month
Sewer Treatment** $7.85 per Unit
Management’s Discussion and Analysis
19
Multi-Family, Non-Residential, Irrigation Water Rate
Description Cost
Base Fee by Water Meter Size Monthly Base Fee
3/4 inch or less $20.61
1-inch meter $34.40
1.5-inch meter $68.65
2-inch meter $109.85
3-inch meter $206.10
4-inch meter $343.55
6-inch meter $686.95
8-inch meter $1,099.15
10-inch meter $1,580.15
Water Usage Per Unit Cost
Multi-Family $6.73
Non-Residential $8.17
Landscape Irrigation $10.02
Sewer Rates for 2018-19
Multi-Family, Non-Residential Sewer Rate Description Cost
Base Fee by Water Meter Size Monthly Base Fee
3/4 inch or less $18.69
1-inch meter $31.21
1.5-inch meter $62.24
2-inch meter $99.62
3-inch meter $186.90
4-inch meter $311.56
6-inch meter $622.93
8-inch meter $996.72
10-inch meter $1,432.94
Sewer Treatment Per Unit Cost
All use up to Sewer Cap $7.85
Parking Fund. On June 20, 2017, the City Council approved a multi-year plan, through 2020, to modify the rate
structures for fines, forfeitures, as well as the parking rates for meters, structures and most permit types. The parking
structures were equipped with new pay stations to implement a 24/7 payment structure. The fund is also preparing for
the construction of its fourth structure located on Palm and Nipomo that should begin in 2019-20.
Requests for Additional Information
This financial report is designed to provide a general overview of the City’s finances for all those with an interest.
Questions concerning any of the information provided in this report should be addressed to the Department of Finance,
990 Palm Street, San Luis Obispo, CA 93401.
BASIC FINANCIAL STATEMENTS
21
City of San Luis Obispo, California
Statement of Net Position
June 30, 2018
Governmental
Activities
Business-Type
Activities Total
Assets
Cash and cash equivalents 7,320,783$ 5,179,325$ 12,500,108$
Investments 38,565,828 59,394,942 97,960,770
Taxes receivable 6,089,431 6,089,431
Accounts receivable 2,430,114 5,405,854 7,835,968
Accrued interest receivable 194,747 276,534 471,281
Due from other governments 1,441,620 1,441,620
Prepaid items and other assets 4,227,173 5,801,331 10,028,504
Cash and investments held by fiscal agent 418,881 1,558,795 1,977,676
Investment in joint venture 1,052,700 1,052,700
Nondepreciable capital assets 42,787,165 27,060,991 69,848,156
Depreciable capital assets (net of accumulated
depreciation) 153,769,305 153,840,778 307,610,083
Total assets 255,803,427 261,012,870 516,816,297
Deferred Outflows of Resources
Other post-employment benefits related 994,601 214,634 1,209,235
Pension related 31,109,178 4,741,633 35,850,811
Unamortized loss on refunding of debt 134,759 134,759
Total deferred outflows of resources 32,103,779 5,091,026 37,194,805
Liabilities
Accounts payable 2,780,742 3,174,675 5,955,417
Accrued salaries 819,678 69,578 889,256
Deposits payable 6,240 6,240
Unearned revenue 1,337,950 1,337,950
Interest payable 122,249 276,484 398,733
Other liabilities 139,428 139,428
Noncurrent liabilities:
Due within one year 3,594,667 3,418,667 7,013,334
Due in more than one year 154,947,663 69,870,322 224,817,985
Total liabilities 163,742,377 76,815,966 240,558,343
Deferred Inflows of Resources
Other post-employment benefits related 100,347 47,077 147,424
Pension related 2,079,934 121,509 2,201,443
Total deferred inflows of resources 2,180,281 168,586 2,348,867
Net Position
Net investment in capital assets 171,472,251 136,694,402 308,166,653
Restricted for:
Debt service 418,881 1,558,795 1,977,676
Grant program 3,073 3,073
Unrestricted (49,909,657) 50,866,147 956,490
Total net position 121,984,548$ 189,119,344$ 311,103,892$
The accompanying notes are an integral part of these financial statements.
22
City of San Luis Obispo, California
Statement of Activities
For the Fiscal Year Ended June 30, 2018
Functions/Programs Expenses
Indirect Expense
Allocation
Charges for
Services
Operating
Grants and
Contributions
Capital Grants
and
Contributions
Governmental activities:
Public safety 35,068,684$ 7,028,873$ 1,881,725$ 1,949,331$ $
Transportation 7,090,879 2,138,163 1,669,563 992,090 39,781
Culture and recreation 9,217,684 1,908,108 3,487,225
Community development 11,000,459 2,457,534 7,355,831 1,074,081
General government 14,745,895 (13,532,678) 1,112,167 101,050
Interest on long-term debt 1,488,183
Total governmental activities 78,611,784 - 15,506,511 4,116,552 39,781
Business-type activities:
Water 19,523,736 22,202,069
Sewer 14,158,612 16,753,094
Parking 4,098,840 5,226,780
Transit 4,355,103 703,451 3,099,618
Total business-type activities 42,136,291 44,885,394 3,099,618 -
General revenues and transfers:
General sales and use taxes
Half Percent Sales Tax and use tax
Property taxes
Transient occupancy tax (TOT)
Utility users tax
Property tax-in-lieu of vehicle license fees
Franchise taxes
Business tax
Unrestricted investment earnings
Other taxes
Income from investment in joint venture
Transfers
Total general revenues and transfers
Change in net position
Net position, beginning of year
Prior year restatements
Net position, beginning of year, as restated
Net position, end of year
Program Revenues
The accompanying notes are an integral part of these financial statements.
23
Governmental
Activities
Business-type
Activities Total
(38,266,501)$ $ (38,266,501)$
(6,527,608) (6,527,608)
(7,638,567) (7,638,567)
(5,028,081) (5,028,081)
- -
(1,488,183) (1,488,183)
(58,948,940) - (58,948,940)
2,678,333 2,678,333
2,594,482 2,594,482
1,127,940 1,127,940
(552,034) (552,034)
- 5,848,721 5,848,721
17,055,085 17,055,085
7,504,485 7,504,485
11,425,510 11,425,510
7,514,289 7,514,289
5,627,356 5,627,356
4,637,253 4,637,253
1,597,655 1,597,655
2,663,686 2,663,686
164,434 320,471 484,905
745,253 745,253
209,300 209,300
1,198,027 (1,198,027) -
60,133,033 (668,256) 59,464,777
1,184,093 5,180,465 6,364,558
125,872,084 186,847,144 312,719,228
(5,071,629) (2,908,265) (7,979,894)
120,800,455 183,938,879 304,739,334
121,984,548$ 189,119,344$ 311,103,892$
Net Revenues (Expenses) and
Changes in Net Position
24
City of San Luis Obispo, California
Balance Sheet
Governmental Funds
June 30, 2018
General
Other
Governmental
Funds
Total
Governmental
Funds
Assets
Cash and cash equivalents 1,789,983$ 5,530,800$ 7,320,783$
Investments 20,478,568 18,087,260 38,565,828
Taxes receivable 6,089,431 6,089,431
Accounts receivable 1,489,947 938,566 2,428,513
Other receivables 1,601 1,601
Due from other funds 59,274 59,274
Accrued interest receivable 112,100 82,647 194,747
Prepaid items 3,520,473 5,642 3,526,115
Cash and investments held by fiscal agent 418,881 418,881
Total assets 33,541,377$ 25,063,796$ 58,605,173$
Liabilities and Fund Balance
Liabilities:
Accounts payable 1,784,304$ 996,438$ 2,780,742$
Accrued liabilities 818,225 1,453 819,678
Due to other funds 59,274 59,274
Unearned revenue 1,222,980 114,970 1,337,950
Other liabilities 139,428 139,428
Total liabilities 3,964,937 1,172,135 5,137,072
Fund balance:
Nonspendable 3,520,473 (71,687) 3,448,786
Restricted for:
Debt service 159,724 1,653,109 1,812,833
Law enforcement grant programs 3,073 3,073
Committed to:
Affordable housing programs 3,974,629 3,974,629
General government programs 8,693,113 8,092,594 16,785,707
Impact fee programs 595,256 595,256
Open space programs 2,363,347 2,363,347
Contingency fund 519,885 519,885
Assigned to:
Contingency fund 10,171,464 900,000 11,071,464
Development services 596,796 5,861,455 6,458,251
City attorney 100,000 100,000
Unassigned 6,334,870 6,334,870
Total fund balance 29,576,440 23,891,661 53,468,101
Total liabilities and fund balance 33,541,377$ 25,063,796$ 58,605,173$
The accompanying notes are an integral part of these financial statements.
25
City of San Luis Obispo, California
Reconciliation of the Governmental Funds Balance Sheet
to the Government-wide Statement of Net Position
June 30, 2018
Total fund balance - governmental funds 53,468,101$
Capital assets at estimated historical cost 292,958,114
Accumulated depreciation (96,401,644)
196,556,470
994,601
31,109,178
701,058
Lease revenue bonds 21,927,775
Lease purchase financing 1,599,769
Compensated absences 2,468,124
Conservation loan 503,101
Bond premium 1,556,675
Accrued interest payable 122,249
(28,177,693)
Net pension liability is not a current financial resource and, therefore, is not reported
in the governmental funds. (125,366,130)
Net OPEB liability is not a current financial resource and, therefore, is not reported
in the governmental funds. (5,120,756)
(100,347)
(2,079,934)
Total net position - governmental activities 121,984,548$
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.
Deferred outflows of resources, pension related, are not current asset or resources; and they are
not due in the current period and therefore are not reported in the governmental funds.
Deferred inflow of resources, pension related, are not current assets or resources; and they are
not due in the current period and therefore are not reported in the governmental funds.
Deferred inflow of resources, OPEB related, are not current assets or resources; and they are
not due in the current period and therefore are not reported in the governmental funds.
Deferred outflows of resources, OPEB related, are not current asset or resources; and they are not
due in the current period and therefore are not reported in the governmental funds.
The accompanying notes are an integral part of these financial statements.
26
City of San Luis Obispo, California
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Fiscal Year Ended June 30, 2018
General
Other
Governmental
Funds
Total
Governmental
Funds
Revenues:
Sales and use tax - general 17,055,085$ $ 17,055,085$
Sales and use tax - Half Percent Sales Tax 7,504,485 7,504,485
Sales tax - Prop 172 397,488 397,488
Property tax 11,425,510 11,425,510
Transient occupancy tax 7,514,289 7,514,289
Utility users tax 5,627,356 5,627,356
Property tax in lieu of VLF 4,637,253 4,637,253
Franchise taxes 1,597,655 1,597,655
Business tax 2,663,686 2,663,686
Real property transfer tax 347,765 347,765
Fines, forfeitures and penalties 199,374 199,374
Use of money and property 26,220 138,214 164,434
Subventions and grants 1,992,426 2,163,907 4,156,333
Charges for services 10,215,651 4,457,095 14,672,746
Miscellaneous 532,841 101,550 634,391
Total revenues 71,737,084 6,860,766 78,597,850
Expenditures:
Current:
General government 12,477,019 232,305 12,709,324
Public safety 28,711,689 151,217 28,862,906
Transportation 3,547,684 17,338 3,565,022
Leisure, cultural and social services 7,734,263 836,921 8,571,184
Community development 8,018,554 2,797,113 10,815,667
Debt service:
Principal 14,646,127 1,019,777 15,665,904
Interest and fiscal charges 6,575 1,517,605 1,524,180
Capital outlay:
Public safety 506,491 506,491
Transportation 6,419,137 6,419,137
Leisure, cultural and social services 981,768 981,768
Community development 525,105 525,105
General government 1,192,424 1,192,424
Total expenditures 75,141,911 16,197,201 91,339,112
Deficiency of revenues under expenditures (3,404,827) (9,336,435) (12,741,262)
The accompanying notes are an integral part of these financial statements.
27
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, 2018
Page 2
General
Other
Governmental
Funds
Total
Governmental
Funds
Other Financing Sources (Uses):
Proceeds from debt refunding issuance including bond premium 12,472,698$ $ 12,472,698$
Transfers in 7,600,244 12,214,900 19,815,144
Transfers out (13,570,369) (5,046,748) (18,617,117)
Total other financing sources (uses)6,502,573 7,168,152 13,670,725
Net change in fund balance 3,097,746 (2,168,283) 929,463
Fund balance, beginning of year 26,496,154 26,059,944 52,556,098
Prior year restatements (17,460) (17,460)
Fund balance, beginning of year, as restated 26,478,694 26,059,944 52,538,638
Fund balance, end of year 29,576,440$ 23,891,661$ 53,468,101$
The accompanying notes are an integral part of these financial statements.
28
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, 2018
Total net change in fund balance - governmental funds 929,463$
Expenditures for capital outlay - governmental funds 9,624,925
Depreciation expense (6,389,176)
3,235,749
Loss on disposal of capital asset (6,897)
Repayments of long-term debt are recognized as expenditures in the governmental funds. In
the government-wide statements, repayments of long-term liabilities are reported as reductions
of liabilities. Expenditures for repayment of the principal portion of long-term debt were:15,665,904
The issuance of long-term debt provides current financial resources to governmental funds.
This transaction, however, has no effect on net position. Proceeds from the issuance of
bonds was: (11,072,775)
The issuance of long-term debt provides current financial resources to governmental funds.
This transaction, however, has no effect on net position. Proceeds from the issuance of
lease-purchase financing was: (330,000)
Bond premiums are reported in the governmental funds when the bonds are issued, and are
capitalized and amortized in the statement of net position. The amount of bond premiums
capitalized during the current period was: (1,069,923)
it is due. In the statement of activities, interest expense is recognized as the interest accrues,
regardless of when it is due. The difference between interest expense paid and interest
accrued was:(2,316)
38,313
Changes in actuarially determined claim liabilities for uninsured claims do not provide current
financial resources and are not reported in the governmental funds. (123,804)
governmental funds. In the statement of activities, compensated absences are measured
by the amounts earned. The difference between compensated absences paid and
compensated absences earned was:(45,511)
Pension expenses reported in the statement of activities do not require the use of current
financial resources and, therefore, are not reported as expenditures in governmental funds (6,366,778)
OPEB expenses reported in the statement of activities do not require the use of current
financial resources and, therefore, are not reported as expenditures in governmental funds 332,668
Total change in net position - governmental activities 1,184,093$
Compensated absences are measured by the amounts paid during the period in the
Capital outlay net of depreciation expense and disposal.
Interest on long-term debt is recognized as an expenditure in the governmental funds when
Change in unamortized discount/premium (netted with debt)
The accompanying notes are an integral part of these financial statements.
29
City of San Luis Obispo, California
Statement of Fund Net Position
Business-Type Activities – Enterprise Funds
June 30, 2018
Water Sewer Parking Transit Totals
Assets
Current assets:
Cash and cash equivalents 1,532,390$ 2,290,334$ 1,240,747$ 115,854$ 5,179,325$
Investments 17,580,648 26,278,261 14,206,788 1,329,245 59,394,942
Accounts receivable 2,718,691 2,520,490 90,515 76,158 5,405,854
Accrued interest receivable 92,347 118,031 59,589 6,567 276,534
Prepayments 5,794,131 7,200 5,801,331
Due from other governments 1,441,620 1,441,620
Total current assets 27,718,207 31,214,316 15,597,639 2,969,444 77,499,606
Noncurrent assets:
Cash and investments held by fiscal agent 1,554,220 506 4,069 1,558,795
Investment in joint venture 1,052,700 1,052,700
Capital assets:
Land 945,926 2,176,114 5,947,455 9,069,495
Public art 74,100 74,100
Infrastructure 98,703,469 87,084,133 29,149,949 221,744 215,159,295
Buildings and improvements 19,134,912 5,024,388 888,420 5,101,506 30,149,226
Equipment 4,474,806 5,920,628 393,704 9,309,743 20,098,881
Construction in progress 2,360,018 14,953,478 570,567 33,333 17,917,396
Total capital assets 125,619,131 115,158,741 37,024,195 14,666,326 292,468,393
Less accumulated depreciation (53,205,191) (37,387,289) (12,913,561) (8,060,583) (111,566,624)
Capital assets, net of
accumulated depreciation 72,413,940 77,771,452 24,110,634 6,605,743 180,901,769
Total noncurrent assets 75,020,860 77,771,958 24,114,703 6,605,743 183,513,264
Total assets 102,739,067 108,986,274 39,712,342 9,575,187 261,012,870
Deferred Outflows of Resources
Pension related 1,975,740 2,110,988 512,908 141,997 4,741,633
Other post-employment benefits related 92,686 94,431 20,083 7,434 214,634
Unamortized loss on refunding of debt 134,759 134,759
Total deferred outflow of resources 2,203,185 2,205,419 532,991 149,431 5,091,026
Enterprise Funds
The accompanying notes are an integral part of these financial statements.
30
City of San Luis Obispo, California
Statement of Fund Net Position
Business-Type Activities – Enterprise Funds, continued
June 30, 2018
Page 2
Water Sewer Parking Transit Totals
Enterprise Funds
Liabilities
Current liabilities:
Accounts payable 516,185$ 2,312,379$ 75,486$ 270,625$ 3,174,675$
Accrued liabilities 27,712 30,241 9,358 2,267 69,578
Compensated absences 171,869 246,063 20,559 9,689 448,180
Deposits payable 6,240 6,240
Interest payable 128,035 44,621 103,828 276,484
Current portion of long-term debt 1,410,799 911,066 648,622 2,970,487
Total current liabilities 2,260,840 3,544,370 857,853 282,581 6,945,644
Noncurrent liabilities:
Compensated absences 106,062 55,640 21,162 6,482 189,346
Lease revenue bonds 14,800,176 363,058 5,275,720 20,438,954
Installment sale agreement 6,181,903 6,181,903
State loan/note payable 2,894,282 7,533,740 4,322,760 14,750,782
Net pension liability 10,687,147 11,538,432 2,995,720 685,651 25,906,950
Net other post-employment benefits liability 990,028 1,072,658 274,668 65,033 2,402,387
Total noncurrent liabilities 29,477,695 26,745,431 12,890,030 757,166 69,870,322
Total liabilities 31,738,535 30,289,801 13,747,883 1,039,747 76,815,966
Deferred Inflows of Resources
Pension related 50,073 54,254 13,892 3,290 121,509
Other post-employment benefits related 19,401 21,020 5,382 1,274 47,077
Total deferred inflow of resources 69,474 75,274 19,274 4,564 168,586
Net Position
Net investment in capital assets 53,443,442 62,781,685 13,863,532 6,605,743 136,694,402
Restricted:
Debt service 1,554,220 506 4,069 1,558,795
Subsequent year expenditures 585,126 4,860,676 87,258 8,308 5,541,368
Unrestricted 17,551,455 13,183,751 12,523,317 2,066,256 45,324,779
Total net position 73,134,243$ 80,826,618$ 26,478,176$ 8,680,307$ 189,119,344$
The accompanying notes are an integral part of these financial statements.
31
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, 2018
Water Sewer Parking Transit Total
Operating revenues:
Charges for sales and service 19,779,515$ 15,757,880$ 4,532,346$ 690,168$ 40,759,909$
Impact fees 2,131,345 681,878 2,813,223
Fines and forfeitures 620,665 620,665
Other revenues 285,272 341,078 148,496 774,846
Total operating revenues 22,196,132 16,780,836 5,301,507 690,168 44,968,643
Operating expenses:
Salaries and benefits 4,578,651 4,840,962 1,464,217 341,331 11,225,161
Supplies and maintenance 1,271,043 3,359,972 272,159 358,224 5,261,398
Contract services 8,815,633 921,610 639,990 2,615,011 12,992,244
General government 1,485,450 1,695,070 622,189 319,987 4,122,696
Depreciation 2,645,460 3,046,316 649,493 720,550 7,061,819
Total operating expenses 18,796,237 13,863,930 3,648,048 4,355,103 40,663,318
Operating income (loss)3,399,895 2,916,906 1,653,459 (3,664,935) 4,305,325
Nonoperating revenues (expenses)
Interest on investments, net 111,060 117,523 85,312 6,576 320,471
Grants 3,099,618 3,099,618
Interest expense (727,499) (294,682) (450,792) (1,472,973)
Income from investment in joint venture 209,300 209,300
Miscellaneous nonoperating
revenues (expenses)5,937 (27,742) (74,727) 13,283 (83,249)
Total nonoperating revenues
(expenses)(401,202) (204,901) (440,207) 3,119,477 2,073,167
Income (loss) before transfers
and capital contributions 2,998,693 2,712,005 1,213,252 (545,458) 6,378,492
Transfers (934,306) (772,599) 570,276 (61,398) (1,198,027)
Total transfers (934,306) (772,599) 570,276 (61,398) (1,198,027)
Change in net position 2,064,387 1,939,406 1,783,528 (606,856) 5,180,465
Net position, beginning of year 72,428,064 80,134,823 24,939,193 9,345,064 186,847,144
Prior year restatements (1,358,208) (1,247,611) (244,545) (57,901) (2,908,265)
Net position, beginning of year, as restated 71,069,856 78,887,212 24,694,648 9,287,163 183,938,879
Net position, end of year 73,134,243$ 80,826,618$ 26,478,176$ 8,680,307$ 189,119,344$
Enterprise Funds
The accompanying notes are an integral part of these financial statements.
32
City of San Luis Obispo, California
Statement of Cash Flows
Business-Type Activities – Enterprise Funds
For the Fiscal Year Ended June 30, 2018
Water Sewer Parking Transit Total
Cash flows from operating activities:
Cash received from customers 22,252,041$ 16,892,649$ 5,008,925$ 614,099$ 44,767,714$
Cash payments to suppliers for goods and services (10,238,775) (3,541,370) (953,170) (3,039,986) (17,773,301)
Cash payments to General Fund for interfund services (1,485,450) (1,695,070) (622,189) (319,987) (4,122,696)
Cash payments to employees for services (4,420,685) (4,422,469) (1,240,701) (316,537) (10,400,392)
Other cash receipts (27,742) (74,727) 13,283 (89,186)
Other cash payments 5937 5,937
Net cash provided by (used in)
operating activities 6,113,068 7,205,998 2,118,138 (3,049,128) 12,388,076
Cash flows from noncapital financing activities:
Operating grants received 3,048,139 3,048,139
Transfers to other funds (934,306) (772,599) 570,276 (61,398) (1,198,027)
Net cash provided by (used in) noncapital
financing activities (934,306) (772,599) 570,276 2,986,741 1,850,112
Cash flows from capital and related
financing activities:
Acquisition and construction of capital assets (1,354,877) (7,205,173) (74,045) (190,535) (8,824,630)
Principal paid on debt financing (1,787,728) (1,301,008) (6,549,699) (9,638,435)
Interest paid on debt financing (713,848) (297,125) (450,792) (1,461,765)
Proceeds from issuance of debt 321,195 355,005 5,156,025 5,832,225
Net cash used in capital and
related financing activities (3,535,258) (8,448,301) (1,918,511) (190,535) (14,092,605)
Cash flows from investing activities:
Interest on investments, net 83,346 92,006 68,337 5,522 249,211
Net cash provided by
investing activities 83,346 92,006 68,337 5,522 249,211
Net change in cash and cash equivalents 1,726,850 (1,922,896) 838,240 (247,400) 394,794
Cash and cash equivalents, beginning of year 18,940,408 30,491,997 14,613,364 1,692,499 65,738,268
Cash and cash equivalents, end of year 20,667,258$ 28,569,101$ 15,451,604$ 1,445,099$ 66,133,062$
Enterprise Funds
The accompanying notes are an integral part of these financial statements.
33
City of San Luis Obispo, California
Statement of Cash Flows
Business-Type Activities – Enterprise Funds, continued
For the Fiscal Year Ended June 30, 2018
Page 2
Water Sewer Parking Transit Total
Reconciliation of operating income (loss) to
net cash provided by (used in) operating activities:
Operating income (loss)3,399,895$ 2,916,906$ 1,653,459$ (3,664,935)$ 4,305,325$
Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities:
Depreciation 2,645,460 3,046,316 649,493 720,550 7,061,819
Other revenues and expenses 5,937 (27,742) (74,727) 13,283 (83,249)
Change in assets, deferred outflows of resources,
liabilities, and deferred inflows of resources:
Accounts receivable 71,449 111,813 (42,582) (76,069) 64,611
Prepaid expense (175,094) 24,862 (150,232)
Accounts payable 22,995 715,350 (41,021) (66,751) 630,573
Deposits payable (15,540) (250,000) (265,540)
Accrued salaries and compensated absences (24,310) 29,338 17,211 (818) 21,421
Deferred pensions and net pension liability (734,467) (610,092) (53,662) (33,261) (1,431,482)
Deferred OPEB and net OPEB liability 916,743 999,247 259,967 58,873 2,234,830
Net cash provided by (used in)
operating activities 6,113,068$ 7,205,998$ 2,118,138$ (3,049,128)$ 12,388,076$
Reconciliation of cash and investments to the balance sheet:
Cash and cash equivalents 1,532,390$ 2,290,334$ 1,240,747$ 115,854$ 5,179,325$
Investments 17,580,648 26,278,261 14,206,788 1,329,245 59,394,942
Cash and investments held by fiscal agent 1,554,220 506 4,069 1,558,795
Total cash and investments 20,667,258$ 28,569,101$ 15,451,604$ 1,445,099$ 66,133,062$
Noncash investing, capital, and financing activities:
None
Enterprise Funds
The accompanying notes are an integral part of these financial statements.
34
City of San Luis Obispo, California
Statement of Net Position – Fiduciary Funds
Agency Funds
June 30, 2018
Assets
Current assets:
Cash and cash equivalents 2,880,001$
Investments 1,869,592
Accounts receivable 52,655
Accrued interest receivable 12,705
Other assets 36,964
Deferred outflows of resources - pension and OPEB related 268,219
Capital assets, net of accumulated depreciation 1,188,758
Total assets 6,308,894$
Liabilities
Current liabilities:
Accounts payable 178,678$
Accrued liabilities 41,003
Other liabilities 2,536,851
Deferred inflows of resources - pension and OPEB related 8,967
Net pension liability 1,377,970
Net OPEB liability 127,770
Due to agency participants 2,037,655
Total liabilities 6,308,894$
The accompanying notes are an integral part of these financial statements.
35
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page
Note 1: Summary of Significant Accounting Policies 38
Description of the Reporting Entity 38
Government-wide and Fund Financial Statements 38
Measurement Focus, Basis of Accounting and Basis of Presentation 39
Assets, Liabilities, and Net Position or Fund Balance 41
Reconciliation of Government-wide and Fund Financial Statements 44
Budgets and Budgetary Accounting 45
Fair Value Measurements 47
Note 2: Cash and Investments 47
Funds with Fiscal Agent 48
Investments 48
Note 3: Property Taxes 53
Note 4: Due from Other Governments 55
Note 5: Capital Assets 55
Note 6: Long-Term Debt 57
Summary of Long-Term Debt 57
Governmental Activities Summary 58
Revenue Bonds 58
Lease-Purchase Financing 59
2014 Energy Sources Conservation State Loan 60
Business-Type Activities Summary 61
Revenue Bonds 61
Loans 63
Installment Sale Agreements 63
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City of San Luis Obispo, California
Notes to the Financial Statements
Table of Contents
June 30, 2018
Page 2
Page
Note 7: Pension Plans 64
Agent-Multiple Employer Plan 65
General Information about the Pension Plan 65
Net Pension Liability 66
Changes in the Net Pension Liability 68
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions 69
Payable to the Pension Plan 70
Cost Sharing Employer Plan 70
General Information about the Pension Plans 70
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources
Related to Pensions 72
Payable to the Pension Plan 75
Note 8: Other Post-Employment Benefits 76
General Information about OPEB 76
Net OPEB Liability 77
Changes in the Net OPEB Liability 79
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB 80
Payable to the OPEB Plan 81
Note 9: Interfund Transactions 81
Note 10: Joint Ventures, Jointly Governed Organizations and Operating Agreements 82
Whale Rock Commission 82
San Luis Obispo Regional Transit Authority 83
San Luis Obispo Council of Governments 84
Nacimiento Water Supply Project 84
37
City of San Luis Obispo, California
Notes to the Financial Statements
Table of Contents
June 30, 2018
Page 3
Page
Note 11: Risk Management 85
California Joint Powers Insurance Authority 85
Self-Insurance Programs of the Authority 86
Adequacy of Protection 87
Self-Insurance 87
Note 12: Operating Lease 88
Note 13: Commitments and Contingencies 88
Litigation 88
Grant Awards 88
Regional Transit Authority Pension Expense 88
Note 14: Construction and Other Significant Commitments 89
Note 15: Fund Balance Deficiency 89
Note 16: Subsequent Events 89
Diablo Power Plan Closure Settlement Agreement 89
2018 Water Revenue Refunding Bonds 90
2018 Clean Water State Revolving Fund Loan 90
Note 17: New Accounting Standards 90
Accounting Standards Adopted 90
New Accounting Standards 91
Note 18: Prior Year Restatements 92
38
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
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
46,548, 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 primarily on fees and charges for services.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset
by program revenues. Direct expenses are those that are clearly identifiable 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.
39
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
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.
40
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
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 135 for a complete list of Agency Funds.
41
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
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.
Prepayments in the governmental funds are accounted for using the consumption method.
Restricted Assets. Certain proceeds of debt financings, as well as resources set aside for their repayment, are classified
as restricted assets on the balance sheet because they are maintained in separate trust bank accounts and their use is limited
by applicable debt covenants. Notes 2 and 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, 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
42
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 5
Note 1: Summary of Significant Accounting Policies (Continued)
are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of the business-
type activities is included as part of the capitalized value of the assets constructed. Detailed information on the City’s
capital assets can be found in Note 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, other post-
employment benefits (OPEB), 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 and OPEB.
Compensated Absences. City employees are granted vacation and sick leave in varying amounts. In the event of
termination, employees are reimbursed for the total value of their accumulated vacation days. Employees are reimbursed
for 10% to 30% of the accumulated sick leave only upon retirement and only after at least 10 years of service. In selected
cases, similar accumulated sick leave reimbursements may be available after 20 years of continuous employment. An
employee's estate is reimbursed for 30% of the employee's accumulated sick leave in the event of death while in the City's
employ. A liability for compensated absences is accrued in the government-wide and proprietary funds financial
statements.
Long-Term Obligations. In the government-wide financial statements, and proprietary funds in the fund financial
statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental
activities, business-type activities, or proprietary funds statement of net position. Bond premiums and discounts and
deferred amounts on refunding are deferred and amortized over the life of the bonds. Deferred amounts on refunding are
reported separately from assets and liabilities in the Statement of Net Position. Bonds payable are reported net of the
applicable bond premium or discount. Bond issuance costs are expensed as incurred.
In the fund financial statements, governmental 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.
43
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
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.
Other Post-Employment Benefits (OPEB) Liability. For purposes of measuring net OPEB liability, deferred outflows
of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net
position of the City’s plan (OPEB Plan), and additions to or deductions from the OPEB Plan’s fiduciary net position, have
been determined on the same basis as they are reported by the California Employer’s Retiree Benefit Trust Program
(CERBT). For this purpose, benefit payments (including refunds of employee contributions) are recognized when
currently due and payable in accordance with benefit terms. Investments are reported at fair value.
Generally accepted accounting principles require that the reported OPEB results must pertain to liability and asset
information within certain defined timeframes. For this report, the following timeframes are used:
Valuation Date June 30, 2017
Measurement Date June 30, 2017
Measurement Period July 1, 2016 to June 30, 2017
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.
44
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 7
Note 1: Summary of Significant Accounting Policies (Continued)
Restricted. This component consists of amounts that have constraints placed on them either externally by third-parties
(creditors, grantors, contributors, or laws or regulations of other governments) or by law through constitutional provisions
or enabling legislation. Enabling legislation authorizes the City to assess, levy, charge or otherwise mandate payment of
resources (from external resource providers) and includes legally enforceable requirements (compelled by external
parties) that those resources be used only for the specific purposes stipulated in the legislation.
Committed. This component consists of amounts that can only be used for specific purposes pursuant to constraints
imposed by minute order authorized by the City Council. Also included in this component are encumbrances which
represent legal and binding obligations for the acquisition of future goods and services. Those committed amounts
established by minute order cannot be used for any other purpose unless the City Council adopts a new minute order so
directing. With respect to encumbered amounts, the City may take steps to cancel the order for goods or services and
thereby terminate the obligation.
Assigned. This component consists of amounts that are constrained by the City’s intent to be used for specific purposes,
but are neither restricted nor committed. The City Manager or Director of Finance are authorized 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.
45
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 8
Note 1: Summary of Significant Accounting Policies (Continued)
There are no differences between total net position of the proprietary funds and total net position of the business-type
activities as reported in the government-wide statement of net position.
Budgets and Budgetary Accounting
Overview. The City has received national recognition for its use of a two-year Financial Plan and budgetary process that
emphasizes long-range planning and effective program management. Significant features of the City's two-year Financial
Plan include the integration of Council goal-setting into the budgetary process and the extensive use of formal policies
and measurable objectives. The Financial Plan includes operating budgets for two years and a capital improvement plan
(CIP) covering five years.
Under this multi-year approach, appropriations continue to be made annually; however, the Financial Plan is the
foundation for preparing the budget for the second year. Additionally, unexpended operating appropriations from the first
year may be carried over for specific purposes into the second year with the approval of the City Manager.
Management Policies. The overall goal of the City's Financial Plan is to link what the City wants to accomplish over the
next two years with the resources required to do so. Formal statements of budgetary policies and major objectives provide
the foundation for achieving this goal. Key budget principles include: maintaining fund balances at levels which will
protect the City from future uncertainties; estimating revenues at realistic levels; making current expenditures with current
revenues; maintaining the City's traditional commitment to a strong General Fund; and complying with provisions of the
State constitution, City charter, municipal code, and sound fiscal policy. Key revenue policies include: maintaining a
diversified and stable revenue base; setting enterprise fund rates at levels that fully recover the total cost of providing
services in the Water, Sewer and Parking Funds; and at policy levels for cost recovery in the Transit Fund; charging fees
for General Fund programs in accordance with adopted user fee cost recovery goals; and ensuring that new development
pays its fair share of the cost of constructing necessary community facilities.
Budget Process. The City Manager is responsible for preparing the budget and submitting it to the Council for
approval. Although specific steps will vary from year to year, the following is an overview of the general
approach used under the City's two-year budgetary process:
First Year. The Financial Plan process begins with City Council goal-setting to determine major
objectives to be accomplished over the next two years. As part of this process, community groups,
interested individuals, and Council advisory bodies present their recommendations to the Council.
Goals approved by the City Council are incorporated into the budget instructions issued to the operating
departments, who are responsible for submitting initial budget proposals. After these proposals are
comprehensively reviewed and a detailed financial forecast is prepared, the City Manager issues the
Preliminary Financial Plan for public comment. A series of study sessions and public hearings are then
held leading to Council adoption of the Financial Plan and Budget prior to the start of the fiscal year.
46
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 9
Note 1: Summary of Significant Accounting Policies (Continued)
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, 2018
was the first year of the 2017-19 two-year cycle.
Mid-Year Reviews. The Council formally reviews the City's financial condition and amends
appropriations, if necessary, each February.
Status Reports. Financial reports are prepared monthly to monitor the City's fiscal condition; more
formal reports are posted to the City's website on a quarterly basis. Additionally, more focused reports
are issued on key revenues, such as sales tax, transient occupancy tax and quarterly reports on
investments. The status of major goals and program objectives, including Construction in Progress
(CIP) projects, are also formally reported to the Council on an ongoing basis.
Accounting and Budget Administration. Budgets are prepared for each fund in accordance with its respective basis of
accounting consistent with U.S. Generally Accepted Accounting Principles (GAAP). All governmental funds have legally
adopted budgets annually. While budgets are prepared for the City's capital projects funds, the capital projects generally
span more than one year and are effectively controlled at the project level; accordingly, budgetary comparisons are not
presented in the accompanying other supplementary information following the basic financial statements.
As provided under the City Charter, the Council may amend or supplement the budget at any time after its adoption by
majority vote of the Council members. The legal level of budgetary control – the level at which expenditures are not to
exceed appropriations – is the fund level.
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
2018 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.
47
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 10
Note 1: Summary of Significant Accounting Policies (Continued)
Encumbrances. Encumbrance accounting, under which purchase orders, contracts, and other commitments for the
expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an
extension of formal budgetary integration in the governmental funds. Encumbrances outstanding at the end of the year
are reported as reservations of fund balances since they do not constitute expenditures or liabilities. Amounts encumbered
at year end are re-appropriated in the following year.
Indirect Cost Reimbursement. All of the City's general government and engineering programs are accounted and
budgeted for in the General Fund. However, some of these support service programs also benefit the City's enterprise
and agency fund operations, and accordingly, transfers are made from these funds to reimburse the General Fund for these
services. The transfers are based on a Central Service Cost Allocation Plan prepared for this purpose, which distributes
these shared costs in a uniform, consistent manner in accordance with GAAP.
Fair Value Measurements
As defined in GASB 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, 2018, the application of valuation techniques applied to the City’s financial statements has
been consistent.
Note 2: Cash and Investments
The City follows the practice of pooling cash and investments for all funds under its direct daily control. Funds held by
outside fiscal agents under provisions of bond indentures are maintained separately.
Interest earned on pooled cash and investments is allocated quarterly to the various funds based on the respective fund's
average quarterly cash balance. Interest earned from cash and investments with fiscal agents is credited directly to such
funds.
48
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 11
Note 2: Cash and Investments (Continued)
Funds with Fiscal Agent
The City has monies held by trustees or fiscal agents pledged to the payment or security of certain bonds. The California
Government Code provides that these funds, in the absence of specific statutory provisions governing the issuance of
bonds, may be invested in accordance with the ordinance, resolutions, or indentures specifying the types of investments
its trustees or fiscal agents may make. These ordinances, resolutions, or indentures are generally more restrictive than the
City's general investment policy. In no instance have additional types of investments been authorized which are not
permitted by the City's investment policy.
Investments
The City is authorized by its investment policy, in accordance with Section 53601 of the California Government Code, to
invest in the following instruments:
• 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.
49
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 12
Note 2: Cash and Investments (Continued)
At June 30, 2018, cash and investments consisted of the following:
Fair
Value
Percent of
Portfolio
Cash and cash equivalents 12,925,802$ 11.50%
State Local Agency Investment Fund 22,360,206 19.89%
U.S. Treasury Bond / Note 20,616,929 18.34%
Federal Agency Bond / Note 24,148,548 21.48%
Corporate Note 12,665,011 11.26%
Commercial Paper 4,584,939 4.08%
Negotiable Certificates of Deposit 13,031,588 11.59%
Non-Negotiable Certificates of Deposit 981,466 0.87%
Money Market Funds 1,124,065 1.00%
Total cash and investments 112,438,554$ 100.00%
At June 30, 2018, cash and investments are reflected in the financial statements as follows:
Governmental
Funds
Enterprise
Funds Total
Cash and cash equivalents 7,320,783$ 5,179,325$ 12,500,108$
Investments 38,565,828 59,394,942 97,960,770
Cash and investments held by fiscal agents 418,881 1,558,795 1,977,676
Total cash and investments 46,305,492$ 66,133,062$ 112,438,554$
Investment Fair Value Measurements. The City categorizes its fair value measurements within the fair value hierarchy
established by generally accepted accounting principles. Investment securities classified in Level 1 of the fair value hierarchy
are valued using prices quoted in active markets for those securities. Investment securities classified in Level 2 of the fair
value hierarchy are valued using matrix pricing or market corroborated pricing. Matrix pricing is used to value securities
based on the securities’ relationship to benchmark quoted prices.
50
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 13
Note 2: Cash and Investments (Continued)
The following is a summary of the fair value measurements as of June 30, 2018:
Fair Value
Investments by fair value hierarchy
U.S. Treasury Bond / Note 20,616,929$ 20,616,929$ $ $
Federal Agency Bond / Note 24,148,548 24,148,548
Corporate Note 12,665,011 12,665,011
Commercial Paper 4,584,939 4,584,939
Negotiable Certificates of Deposit 13,031,588 13,031,588
Total investments by fair value hierarchy 75,047,015 20,616,929$ 54,430,086$ -$
Investments not subject to fair value hierarchy
State Local Agency Investment Fund 22,360,206
Non-Negotiable Certificates of Deposit 981,466
Money market funds 1,124,065
Total investments not subject to fair value hierarchy 24,465,737
Total investments measured at fair value 99,512,752$
Fair Value Measurements Using
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Custodial Credit Risk – Deposits with Financial Institutions. The custodial credit risk for deposits is the risk that, in the
event of the failure of a depository financial institution, the City will not be able to recover deposits. Deposits with financial
institutions, including certificates of deposit, totaled $18,369,803 at June 30, 2018 and were insured or collateralized with
securities held by the pledging financial institution's trust department or agent in the City's name.
The California Government Code requires California financial institutions to secure the City's deposits by pledging
government securities as collateral. The market value of the pledged securities must equal 110% of the City's deposits.
California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes equal
to 150% of the City's deposits or letters of credit issued by the Federal Home Loan Bank of San Francisco having a value
of 105% in excess of the total amount of deposits.
Custodial Credit Risk - Investments. This is the risk that in the event of the failure of a counterparty, the City will not
be able to recover the value of its investments that are in the possession of an outside party. All of the City’s investments
in securities are insured or registered and held by a counterparty in the City’s name in accordance with the City’s policies.
51
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 14
Note 2: Cash and Investments (Continued)
Interest Rate Risk. This is the risk that the market value of securities in the portfolio will fall due to changes in general
interest rates. In accordance with its policies in the Investment Management Plan, the City mitigates interest rate risk by:
Structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations,
thereby avoiding the need to sell securities on the open market before maturity.
Investing operating funds primarily in shorter-term securities.
The City’s investment policy also includes portfolio maturity targets. A minimum of 20% of the portfolio will be invested
in securities maturing in one year or less. Up to 80% of the portfolio can be invested in securities with a maturity over
one year, with no more than 10% of the portfolio invested in securities with a maturity over five years.
Maturities using the segmented time distribution method for those investments requiring this disclosure are as follows:
Fair
Value
Less Than
One Month
One Month to One
Year
One to Five
Years
Over Five
Years
State Local Agency Investment Fund 22,360,206$ $ 22,360,206$ $ $
U.S. Treasury Bond / Note 20,616,929 92,536 20,524,393
Federal Agency Bond / Note 24,148,548 7,478,326 16,670,222
Corporate Note 12,665,011 571,013 12,093,998
Commercial Paper 4,584,939 980,325 3,604,614
Negotiable Certificates of Deposit 13,031,588 5,249,509 7,782,079
Non-Negotiable Certificates of Deposit 981,466 981,466
Money Market Funds 1,124,065 1,124,065
Total maturities 99,512,752$ 2,104,390$ 40,337,670$ 57,070,692$ -$
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.
52
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 15
Note 2: Cash and Investments (Continued)
The following table identifies the Standard & Poor’s credit quality ratings for those investments requiring this disclosure
as of June 30, 2018:
Type of Investment Rating Total
Federal Agency Bonds / Notes AA+24,148,548$
Corporate Notes AAA 969,384
AA+1,017,519
AA 1,864,764
AA-1,356,084
A+2,197,687
A 4,317,757
A-941,816
Total Corporate Notes 12,665,011
Commercial Paper A-1 4,584,939
Negotiable Certificates of Deposit A-1+1,807,827
AA-3,882,513
A+3,899,566
A-1 3,441,682
Total Negotiable Certificates of Deposit 13,031,588
Not Applicable:
U.S. Treasury Bonds / Notes 20,616,929
Not Rated:
State Local Agency Investment Fund 22,360,206
Non-Negotiable Certificates of Deposit 981,466
Money Market Mutual Funds 1,124,065
Total Investments 99,512,752$
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.
53
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 16
Note 2: Cash and Investments (Continued)
No more than 25% of the City’s portfolio shall be invested in collateralized certificates of deposit issued by
financial institutions.
Certificates of deposit (negotiable and collateralized) placed by the City shall not constitute more than 15% of
the total assets of the institution; and negotiable certificates of deposit will only be placed with institutions with
total assets in excess of $200 million and that maintain a ratio of equity to total assets of at least 5%.
Investments that exceed 5% of the portfolio by issuer are summarized below:
Fair Value
Percent of
Portfolio
Federal National Mortgage Association 12,550,368 13%
Fannie Mae and Freddie Mac 6,740,555 7%
These U.S. government-sponsored enterprise agency securities are not explicitly guaranteed by the U.S. government.
Approximately 20.7% 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.
54
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 17
Note 3: Property Taxes (Continued)
Tax Levy Dates. All lien dates attach annually on January 1 preceding the fiscal year for which the taxes are
levied. The fiscal year begins July 1 and ends June 30 of the following year. Taxes are levied on both real and
unsecured personal property as it exists at that time. The lien against real estate as well as the tax on personal
property is not relieved by subsequent renewal or change in ownership.
Tax Collections. The County Treasurer/Tax Collector is responsible for all property tax collections. Taxes and
assessments on the secured and utility rolls, which constitute a lien against the property, may be paid in two
installments: the first installment is due on November 1 of the fiscal year and is delinquent if not paid by
December 10; and the second installment is due on March 1 of the fiscal year and is delinquent if not paid by
April 10. Unsecured personal property taxes do not constitute a lien against real property. However, if the taxes
become delinquent the lien is attached against anything the individual owns, which could include real property.
Payment must be made in one installment, which is delinquent if not paid by August 31 of the fiscal year.
Significant penalties are imposed by the County for late payments.
Teeter Plan. In 1993-94 the City elected to receive property tax revenue in accordance with the alternative
method of distribution prescribed by Sections 4701-4717 of the California Revenue and Taxation Code, which
is commonly known as the “Teeter Plan” whereby the County remits 100% of taxes levied without regard to
delinquencies. The County then pursues collection, retaining any delinquent taxes and related penalties and
interest.
Tax Levy Apportionments. Due to the nature of the 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, 2018 have been accrued since they will be
collected within 60 days subsequent to year-end.
55
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 18
Note 4: Due from Other Governments
The following is a summary of amounts due to the City from other governmental agencies at June 30, 2018:
Other
Agencies Total
Enterprise Funds:
Transit Fund 1,441,620$ 1,441,620$
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, 2018 was as follows:
Balance Decreases /Balance
June 30, 2017 Increases Transfers June 30, 2018
Governmental activities:
Capital assets not being depreciated:
Land 32,020,193$ $ $ 32,020,193$
Construction in progress 8,144,539 9,624,925 (7,649,122) 10,120,342
Public art 646,630 646,630
Total capital assets not
being depreciated 40,811,362 9,624,925 (7,649,122) 42,787,165
Capital assets being depreciated:
Infrastructure 177,880,842 4,447,671 182,328,513
Accumulated Depreciation (54,481,340) (3,826,005) (58,307,345)
Buildings and improvements 36,521,249 553,592 37,074,841
Accumulated Depreciation (18,601,561) (994,596) (19,596,157)
Equipment 28,421,892 2,647,859 (302,156) 30,767,595
Accumulated Depreciation (17,224,826) (1,568,575) 295,259 (18,498,142)
Total capital assets being
depreciated, net 152,516,256 1,259,946 (6,897) 153,769,305
Governmental activities,
capital assets, net 193,327,618 10,884,871 (7,656,019) 196,556,470
56
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 19
Note 5: Capital Assets (Continued)
Balance Decreases /Balance
June 30, 2017 Increases Transfers June 30, 2018
Business-type activities:
Capital assets not being depreciated:
Land 9,069,495$ $ $ 9,069,495$
Construction in progress 12,326,008 8,824,630 (3,233,242) 17,917,396
Public art 74,100 74,100
Total capital assets not
being depreciated 21,469,603 8,824,630 (3,233,242) 27,060,991
Capital assets being depreciated:
Infrastructure 213,298,498 1,860,797 215,159,295
Accumulated Depreciation (74,014,176) (5,341,225) (79,355,401)
Buildings and improvements 30,102,796 46,430 30,149,226
Accumulated Depreciation (12,919,950) (659,794) (13,579,744)
Equipment 18,833,741 1,326,015 (60,875) 20,098,881
Accumulated Depreciation (17,631,554) (1,060,800) 60,875 (18,631,479)
Total capital assets being
depreciated, net 157,669,355 (3,828,577) - 153,840,778
Business-type activities,
capital assets, net 179,138,958 4,996,053 (3,233,242) 180,901,769
Total Government-wide 372,466,576$ 15,880,924$ (10,889,261)$ 377,458,239$
Depreciation expense was charged to functions/programs as follows:
Governmental activities:
Public safety 936,559$
Transportation 3,253,461
Culture and recreation 540,567
Community development 33,460
General government 1,625,129
Total depreciation - governmental activities 6,389,176
Business-type activities:
Water 2,645,460
Sewer 3,046,316
Parking 649,493
Transit 720,550
Total depreciation - business-type activities 7,061,819
Total Government-wide 13,450,995$
57
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 20
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, 2018:
Balance Balance Due Within
June 30, 2017 Additions Deductions June 30, 2018 One Year
Governmental activities:
2005 Revenue refunding bonds 3,510,000$ $ (3,510,000)$ -$ $
2006 Lease revenue bonds 5,729,300 (5,729,300) -
2009 Lease revenue bonds 5,319,175 (5,319,175) -
2012 Lease revenue refunding bonds 3,960,000 (235,000) 3,725,000 245,000
2014 Lease revenue bonds 7,285,000 (155,000) 7,130,000 160,000
2018 Lease revenue refunding bonds 11,072,775 11,072,775 818,750
25,803,475 11,072,775 (14,948,475) 21,927,775 1,223,750
Add: Unamortized bond premium 525,065 1,069,923 (38,313) 1,556,675
Total revenue bonds 26,328,540 12,142,698 (14,986,788) 23,484,450 1,223,750
Lease-purchase financing 1,898,652 330,000 (628,883) 1,599,769 761,963
Compensated absences 2,422,613 2,468,124 (2,422,613) 2,468,124 1,519,520
Conservation Loan 591,647 (88,546) 503,101 89,434
Total long-term debt,
governmental activities 31,241,452$ 14,940,822$ (18,126,830)$ 28,055,444$ 3,594,667$
Business-type activities:
2006 Lease revenue bonds 6,725,700$ $ (6,725,700)$ -$ $
2006 Water revenue bonds 12,975,000 (455,000) 12,520,000 475,000
2009 Lease revenue bonds 960,840 (960,840) -
2012 Water revenue refunding bonds 2,990,000 (450,000) 2,540,000 470,000
2018 Lease revenue refunding bonds 5,832,225 5,832,225 431,250
23,651,540 5,832,225 (8,591,540) 20,892,225 1,376,250
Add: Unamortized bond premium 421,168 563,548 (61,737) 922,979
Total revenue bonds 24,072,708 6,395,773 (8,653,277) 21,815,204 1,376,250
Loans 16,709,160 (965,352) 15,743,808 993,026
Installment sale agreements 7,366,468 (583,354) 6,783,114 601,211
Compensated absences 653,492 637,526 (653,492) 637,526 448,180
Total long-term debt,
business-type activities 48,801,828 7,033,299 (10,855,475) 44,979,652 3,418,667
Total Government-wide 80,043,280$ 21,974,121$ (28,982,305)$ 73,035,096$ 7,013,334$
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, 2018 was $2,961,156 of which $279,951 was capitalized into
construction in progress. See Note 11 for detail of estimated claims and liabilities.
58
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 21
Note 6: Long-Term Debt (Continued)
The San Luis Obispo Capital Improvement Board has entered into a number of lease agreements with the City of San
Luis Obispo wherein the City is obligated to make all debt service payments. The transactions between the Board and
the City have been eliminated from these financial statements.
Governmental Activities Summary:
Revenue Bonds
2012 Refunding Lease Revenue Bonds. In 2012, the Board issued refunding lease revenue bonds in the amount of
$5,050,000 to refinance the outstanding 2001 lease revenue bonds, Series C. The purpose of these bonds was to purchase
property and build athletic fields, purchase property for police station expansion, and purchase Downtown Plan properties.
The bonds bear interest from 2.0% to 4.0% and are due in annual installments on December 1 through December 1, 2029
that range from $210,000 to $390,000. At June 30, 2018, the principal amount outstanding on the bonds was $3,725,000.
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, 2018.
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, 2018, the unamortized premium was $219,775.
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,
2018, the principal amount outstanding on the bonds was $7,130,000. 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, 2018.
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, 2018, the unamortized premium was $187,850.
2018 Lease Revenue Refunding Bonds. In 2018, the Board issued lease revenue bonds in the amount of $16,905,000 to
advance refund the outstanding 2005 revenue refunding bonds and the 2006 and 2009 lease revenue bonds, which were
originally issued to construct several high priority capital improvement projects and to finance the costs of acquisition
and construction of public parking facilities, and the public safety communications and emergency operations center
project. Of the original bond issuance, $11,072,775 was used for financing governmental activities related to the original
bonds and the remainder was used for business-type activities. The bonds bear interest from 3.00% to 5.00% and are due
in annual installments on June 1, through June 1, 2039 that range from $255,000 to $1,250,000. At June 30, 2018, the
principal amount outstanding that pertains to governmental activities was $11,072,775 of the total $16,905,000
outstanding.
59
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 22
Note 6: Long-Term Debt (Continued)
In the Statement of Net Position, the 2018 bonds include the related unamortized premium which is being amortized and
charged to expense over the term of the 2018 bonds. At June 30, 2018, the unamortized premium was $1,149,050.
The refunding resulted in a difference of $1,707,000 between the reacquisition price and the net carrying value of the old
debt and is being amortized to expense through 2039. The City completed the refunding to reduce its total debt service
payments over the next 21 years by $3,838,338 and to obtain an economic gain of $2,960,278 (difference between the
present values of the old and the new debt service payments).
At June 30, 2018, the aggregate maturities of the aforementioned governmental activities revenue bonds were as follows:
For the Year Ending June 30,Principal Interest Total
2019 1,223,750$ 896,776$ 2,120,526$
2020 925,900 830,723 1,756,623
2021 960,550 794,412 1,754,962
2022 998,475 755,890 1,754,365
2023 1,039,850 715,750 1,755,600
2024-2028 5,491,675 2,887,759 8,379,434
2029-2033 4,801,675 1,724,463 6,526,138
2034-2038 3,749,050 865,710 4,614,760
2039-2043 1,931,850 348,294 2,280,144
2044-2045 805,000 32,500 837,500
21,927,775$ 9,852,277$ 31,780,052$
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 $423,494
included in equipment at June 30, 2018. 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, 2018 the principal amount outstanding is $245,000.
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 $137,684 included in equipment at
June 30, 2018. 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, 2018 the principal amount outstanding is $108,625.
60
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 23
Note 6: Long-Term Debt (Continued)
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 $95,281 included in equipment at
June 30, 2018. 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, 2018 the principal amount outstanding is $219,752.
Fire Engine and Street Sweeper. In 2017 the City obtained lease-purchase financing in the amount of $1,141,468 to
purchase a fire truck and street sweeper. The gross amount of assets under this lease is $1,142,712 with accumulated
depreciation of $85,719 included in equipment at June 30, 2018. Amortization of the equipment is included in
depreciation expense. The lease agreement bears an interest rate of 1.69% due in annual installments on April 28 through
April 28, 2021 of $240,067. At June 30, 2018 the principal amount outstanding is $696,392.
Street Sweeper. In 2018 the City obtained lease-purchase financing in the amount of $330,000 to purchase a street
sweeper. The gross amount of assets under this lease is $303,400 included in equipment at June 30, 2018. As the asset
was placed into service on June 30, 2018, there was no accumulated depreciation and related expense for the year ended
June 30, 2020. The lease agreement bears an interest rate of 1.94% due in annual installments on June 1 through
December 1, 2020 of $70,614. At June 30, 2018 the principal amount outstanding is $330,000.
At June 30, 2018, the aggregate maturities of the aforementioned governmental activities lease-purchase financing were
as follows:
For the Year Ending June 30,Principal Interest Total
2019 761,963$ 39,225$ 801,188$
2020 534,040 20,353 554,393
2021 303,766 6,916 310,682
1,599,769$ 66,494$ 1,666,263$
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, 2018 the principal amount outstanding is $503,101.
61
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 24
Note 6: Long-Term Debt (Continued)
At June 30, 2018, the aggregate maturities of the aforementioned governmental activities conservation loan is as follows:
For the Year Ending June 30,Principal Interest Total
2019 89,434$ 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 93,074 1,168 94,242
2024 46,887 234 47,121
503,101$ 15,232$ 518,333$
Business-Type Activities Summary:
Revenue Bonds
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, 2018, the principal
amount outstanding on the bonds was $12,520,000. 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, 2018.
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, 2018, principal and interest paid and
total customer net revenues were $1,033,548 and $4,298,899, respectively.
2012 Water Revenue Refunding Bonds. In 2012, the City issued water revenue refunding bonds in the amount of
$4,960,000 to refund the 2002 water revenue bonds, which were originally issued to fund water system improvements.
The bonds bear interest from 2.0% to 4.0% and are due in annual installments on June 1 through June 1, 2023 that range
from $340,000 to $550,000. At June 30, 2018, the principal amount outstanding on the bonds was $2,540,000. 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, 2018.
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, 2018, the unamortized premium was $339,353.
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 a nd any
62
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 25
Note 6: Long-Term Debt (Continued)
moneys in the bond service fund and the reserve fund. For the year ended June 30, 2018, principal and interest paid and
total customer net revenues were $569,600 and $4,298,899, respectively.
2018 Lease Revenue Refunding Bonds. In 2018, the Board issued lease revenue bonds in the amount of $16,905,000 to
advance refund the outstanding 2005 revenue refunding bonds and the 2006 and 2009 lease revenue bonds, which were
originally issued to construct several high priority capital improvement projects and to finance the costs of acquisition
and construction of public parking facilities, and the public safety communications and emergency operations center
project. Of the original bond issuance, $5,832,225 was used for financing business-type activities related to the original
bonds and the remainder was used for governmental activities. The bonds bear interest from 3.00% to 5.00% and are due
in annual installments on June 1, through June 1, 2039 that range from $255,000 to $1,250,000. At June 30, 2018, the
principal amount outstanding that pertains to governmental activities was $5,832,225 of the total $16,905,000 outstanding.
In the Statement of Net Position, the 2018 bonds include the related unamortized premium which is being amortized and
charged to expense over the term of the 2018 bonds. At June 30, 2018, the unamortized premium was $583,626.
The refunding resulted in a difference of $1,707,000 between the reacquisition price and the net carrying value of the old
debt and is being amortized to expense through 2039. The City completed the refunding to reduce its total debt service
payments over the next 21 years by $3,838,338 and to obtain an economic gain of $2,960,278 (difference between the
present values of the old and the new debt service payments).
At June 30, 2018, the aggregate maturities of the business-type revenue bonds were as follows:
For the Year Ending June 30,Principal Interest Total
2019 1,376,250$ 918,642$ 2,294,892$
2020 1,244,100 852,013 2,096,113
2021 1,299,450 801,269 2,100,719
2022 1,356,525 748,003 2,104,528
2023 1,405,150 692,138 2,097,288
2024-2028 4,648,325 2,757,632 7,405,957
2029-2033 5,428,325 1,632,039 7,060,364
2034-2038 4,040,950 379,169 4,420,119
2039 93,150 3,256 96,406
20,892,225$ 8,784,161$ 29,676,386$
63
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 26
Note 6: Long-Term Debt (Continued)
Loans
2001 CIEDB State Loan. In 2001, the City obtained a note in the amount of $7,765,900 to go towards expanding the
March Street parking structure. The note bears an interest rate of 3.37% due in semi-annual installments on February 1
and August 1 through August 31, 2031 that range from $169,000 to $396,000. At June 30, 2018, the principal amount
outstanding on the loan was $4,590,132.
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, 2018, the principal amount outstanding on the loan was
$3,336,333.
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, 2018, the principal amount outstanding on the loan was $7,817,343.
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, 2018, principal and interest paid and total
customer net revenues were $533,205 and $7,135,830, respectively.
At June 30, 2018, the aggregate maturities of the aforementioned business-type loans were as follows:
For the Year Ending June 30,Principal Interest Total
2019 993,026$ 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 1,111,897 312,030 1,423,927
2024-2028 4,441,946 1,246,379 5,688,325
2029-2033 3,598,683 665,699 4,264,382
2034-2038 2,444,985 203,626 2,648,611
15,743,808$ 3,864,340$ 19,608,148$
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, 2018, the principal amount outstanding on the loan was $970,000.
64
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 27
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, 2018, the principal amount outstanding on the loan was $5,813,114.
At June 30, 2018, the aggregate maturities of the aforementioned business-type installment sale agreements were as
follows:
For the Year Ending June 30,Principal Interest Total
2019 601,211$ 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 681,479 117,026 798,505
2024-2028 2,968,679 298,622 3,267,301
2029 607,185 8,771 615,956
6,783,114$ 1,235,431$ 8,018,545$
There are a number of limitations and restrictions contained in the various bond indentures. City management believes
that the City has complied with the indenture requirements. Security for revenue bonds is paid from receipts or net income
and amounts in funds or accounts established under bond indentures.
Note 7: Pension Plans
The City contributes to the California Public Employees’ Retirement System (CalPERS) for its employees. The City
participates in one agent-multiple employer plan for its miscellaneous employees (Miscellaneous Plan) and one cost-
sharing employer plan for its safety employees (Safety Plan). The Miscellaneous Plan is described in the first section of
the footnote under Agent-Multiple Employer Plan and the Safety Plan follows and is described in the second section of
the footnote under Cost-Sharing Employer Plan. 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, 2018 are as follows:
Net Pension Deferred Outflows Deferred Inflows
Liability of Resources of Resources
Miscellaneous Plan 81,286,703$ 16,273,280$ 386,974$
Safety Plan 71,364,346 19,833,986 1,820,931
Less: Whale Rock Agency Fund (1,377,969) (256,455) (6,462)
Total Government-Wide 151,273,080$ 35,850,811$ 2,201,443$
65
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 28
Note 7: Pension Plans (Continued)
Agent-Multiple Employer Plan
General Information about the Pension Plan
Plan Descriptions. As noted above, the City contributes to CalPERS for a defined benefit pension plan for all qualified
permanent and probationary employees. CalPERS acts as a common investment and administrative agent for its
participating member employers. Benefit provisions under the Plan are established by State statute and City resolution.
CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions,
assumptions and membership information that can be found on the CalPERS website.
Benefits Provided. CalPERS provides service retirement and disability benefits, annual cost of living adjustments and
death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited
service, equal to one year of full-time employment for Tier 1 employees. Tier 2 and PEPRA employees are based on a
three-year average of full time employment. Members with five years of total service are eligible to retire at age 50 with
statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death
benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death
Benefit. The cost of living adjustments for the plan are applied as specified by the Public Employees’ Retirement Law.
The Miscellaneous Plan’s provisions and benefits by tier in effect at June 30, 2018, 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 7.632% 7.632% 6.25%
Required employer contribution rates 30.352% 30.352% 30.352%
Tiers within the 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.
66
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 29
Note 7: Pension Plans (Continued)
Employees Covered. As of the measurement date June 30, 2017, the following employees were covered by the benefit
terms for the Miscellaneous Plan:
Miscellaneous Plan
Inactive employees or beneficiaries
currently receiving benefits 377
Inactive employees entitled to but
not yet receiving benefits 208
Active employees 325
Total 910
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, 2017, using an annual
actuarial valuation as of June 30, 2016 rolled forward to June 30, 2017 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, 2016 actuarial valuations were determined using the
following actuarial assumptions:
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Inflation
Payroll Growth
Projected Salary Increase
Mortality
Post Retirement Benefit Increase
(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
June 30, 2016
June 30, 2017
Entry-Age Normal Cost Method
0.0715
0.0275
Varies by Entry Age and Service (1)
Varies by Entry Age and Service (1)
(2)
(3)
67
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 30
Note 7: Pension Plans (Continued)
The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2016 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 be found on the CalPERS website.
Change in Assumptions. The discount rate reduced from 7.65% to 7.15% for the June 30, 2017 measurement date.
Discount Rate. The discount rate used to measure the total pension liability was 7.15% for the Plan. To determine
whether the municipal bond rate should be used in the calculation of a discount rate for each plan, CalPERS stress tested
plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate.
Based on the testing, none of the tested plans run out of assets. Therefore, the current 7.15% discount rate is adequate
and the use of the municipal bond rate calculation is not necessary. The long-term expected discount rate of 7.15% will
be applied to all plans in the Public Employees Retirement Fund (PERF). The cash flows used in the testing were
developed assuming that both members and employers will make their required contributions on time and as scheduled
in all future years. The stress test results are presented in a detailed report called “GASB Crossover Testing Report” that
can be obtained from the CalPERS website.
The long-term expected rate of return on pension plan investments was determined using a building-block method in
which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment
expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market
return expectations as well as the expected pension fund (PERF) cash flows. Taking into account historical returns of all
the Public Employees Retirement Funds’ asset classes (which includes the agent plan and two cost-sharing plans or PERF
A, B, and C funds), expected compound (geometric) returns were calculated over the short-term (first 10 years) and the
long-term (11-60 years) using a building-block approach. Using the expected nominal returns for both short-term and
long-term, the present value of benefits was calculated for each PERF fund. The expected rate of return was set by
calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the
one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the
single equivalent rate calculated above and rounded down to the nearest one quarter of one percent.
68
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 31
Note 7: Pension Plans (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. The target allocation shown
was adopted by the Board effective on July 1, 2014.
Current
Target Real Return Real Return
Asset Class Allocation Years 1 - 10 (a)Years 11+ (b)
Global Equity 47.0%4.90%5.38%
Global Fixed Income 19.0%0.80%2.27%
Inflation Sensitive 6.0%0.60%1.39%
Private Equity 12.0%6.60%6.63%
Real Estate 11.0%2.80%5.21%
Infrastructure and Forestland 3.0%3.90%5.36%
Liquidity 2.0%-0.40%-0.90%
(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, 2016 189,675,644$ 117,130,354$ 72,545,290$
Changes during the year:
Service cost 4,124,832 4,124,832
Interest on the total pension liability 14,197,897 14,197,897
Changes in assumptions 11,219,603 11,219,603
Differences between expected and
actual experience 694,843 694,843
Net plan to plan resource movement (2,936) 2,936
Contribution - employer 6,776,849 (6,776,849)
Contribution - employee 1,841,331 (1,841,331)
Net investment income 13,053,453 (13,053,453)
Benefit payments, including refunds
of employee contributions (10,161,053) (10,161,053) -
Administrative expense (172,935) 172,935
Net changes 20,076,122 11,334,709 8,741,413
Balance at June 30, 2017 209,751,766$ 128,465,063$ 81,286,703$
69
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 32
Note 7: Pension Plans (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 6.15%
Net Pension Liability 108,191,781$
Current Discount Rate 7.15%
Net Pension Liability 81,286,703$
1% Increase 8.15%
Net Pension Liability 58,953,046$
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, 2018, the City’s pension expense for the Miscellaneous Plan was $10,029,177, of which
$9,861,690 was recognized pension expense for the City and $167,487 was recognized as pension expense for Whale
Rock Agency Fund. At June 30, 2018, the City reported deferred outflows of resources and deferred inflows of resources
related to pensions from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to
measurement date 6,698,266$ $
Changes in assumptions 7,479,735
Differences between expected and
actual experiences 463,229 386,974
Net differences between projected and
actual earnings on plan investments 1,632,050
Total 16,273,280$ 386,974$
Miscellaneous Plan
70
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 33
Note 7: Pension Plans (Continued)
The deferred outflows of resources related to contributions subsequent to the measurement date of $6,698,266 will be
recognized as a reduction of the net pension liability in the year ended June 30, 2019. Other amounts reported as deferred
outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as
follows:
Measurement Period
Ended June 30 Amount
2018 3,504,893$
2019 5,926,600
2020 706,741
2021 (950,194)
9,188,040$
Miscellaneous Plan
Payable to the Pension Plan
At June 30, 2018, the City reported a payable of $0 for the outstanding amount of contributions to the pension plan
required for the year ended June 30, 2018.
Cost-Sharing Employer Plan
General Information about the Pension Plan
Plan Descriptions. As noted above, the City contributes to CalPERS for a defined benefit pension plan for all qualified
permanent and probationary employees. CalPERS acts as a common investment and administrative agent for its
participating member employers. Benefit provisions under the Plan are established by State statute and City resolution.
CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions,
assumptions and membership information that can be found on the CalPERS website.
The City participates in five tiers of the safety cost-sharing multiple-employer plan. The Safety Plan tiers consist of Safety
Tier 1 (police and fire), Police Tier 2, Fire Tier 2, Police PEPRA and Fire PEPRA.
Benefits Provided. CalPERS provides service retirement and disability benefits, annual cost of living adjustments and
death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited
service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age
50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service.
The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement
2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’
Retirement Law.
71
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 34
Note 7: Pension Plans (Continued)
The Plan’s provisions and benefits within each tier in effect at June 30, 2018, 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 8.988% 8.988% 8.933% 8.982%
Required employer contribution rates 21.418% 21.418% 16.498% 18.487%
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 12.729% 12.729%
The Safety Tier 1 is closed to new entrants.
Contributions. Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer
contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on
July 1st following notice of a change in the rate. Funding contributions for both Plans are determined annually on an
actuarial basis as of June 30th by CalPERS. The actuarially determined rate is the estimated amount necessary to finance
the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued
liability. The City is required to contribute the difference between the actuarially determined rate and the contribution
rate of employees. Members of the Police Officers Association contribute 3% of pay toward the cost of the City's share
of the annual required contribution.
For the year ended June 30, 2018, the contributions recognized as part of pension expense were as follows:
Contributions - employer 4,650,871$
72
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 35
Note 7: Pension Plans (Continued)
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
As of June 30, 2018, 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 71,364,346$
The City’s net pension liability for the Plan is measured as the proportionate share of the net pension liability. The net
pension liability of the Plan is measured as of June 30, 2017, and the total pension liability for the Plan used to calculate
the net pension liability was determined by an actuarial valuation as of June 30, 2016 rolled forward to June 30, 2017
using standard update procedures. The City’s proportion of the net pension liability was based on a projection of the
City’s long-term share of contributions to the pension plans relative to the projected contributions of all participating
employers, actuarially determined. The City’s proportionate share of the net pension liability as of the measurement dates
of June 30, 2016 and 2017 was as follows:
Proportionate Share
Percentage share at 6/30/2016 1.251010%
Percentage share at 6/30/2017 1.251014%
Change - Increase/(Decrease)0.000004%
For the year ended June 30, 2018, the City recognized pension expense of $10,318,082 for the Safety Plan. At June 30,
2018, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the
following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 5,910,345$ $
Changes in assumptions 8,169,724 626,803
Differences between expected and
actual experiences 563,332 146,876
Change in employer's proportion and differences
between the employer's contributions and the
employer's proportionate share of contributions 2,654,481
Net differences between projected and actual earnings
on plan investments 1,781,320
Adjustment due to differences in proportions 754,784 1,047,252
Total 19,833,986$ 1,820,931$
Safety Plan
73
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 36
Note 7: Pension Plans (Continued)
Pension contributions subsequent to the measurement date of $5,910,345 are reported as deferred outflows of resources
and will be recognized as a reduction of the net pension liability in the year ended June 30, 2019. Other amounts reported
as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension
expense as follows:
Measurement Period
Ended June 30 Amount
2018 3,848,109$
2019 5,788,645
2020 3,508,267
2021 (1,042,311)
12,102,710$
Safety Plan
Actuarial Assumptions. The total pension liabilities in the June 30, 2016 actuarial valuations for the Safety Plan was
determined using the following actuarial assumptions:
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Inflation
Projected Salary Increase
Post Retirement Benefit Increase
Mortality
(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
Varies by Entry Age and Service (1)
(2)
(3)
0.0715
0.0275
Safety Plan
June 30, 2016
June 30, 2017
Entry-Age Normal Cost Method
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 April 2014 CalPERS
Experience Study Report and Review of Actuarial Assumptions report available online.
All other actuarial assumptions used in the June 30, 2016 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.
74
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 37
Note 7: Pension Plans (Continued)
Change in Assumptions. The discount rate for PERF C was reduced from 7.65% to 7.15% for the June 30, 2017
measurement date.
Discount Rate. The discount rate used to measure the total pension liability was 7.15% and reflects the long-term
expected rate of return for the Plan net of investment expenses and without reduction for administrative expenses. To
determine whether the municipal bond rate should be used in the calculation of a discount rate for public agency plans
(including PERF C), the amortization and smoothing periods adopted by the Board in 2013 were used. For the Plan, the
crossover test was performed for a miscellaneous agent plan and a safety agent plan selected as being more at risk of
failing the crossover test and resulting in a discount rate that would be different from the long-term expected rate of return
on pension investments. Based on the testing of the plans, the tests revealed the assets would not run out. Therefore the
long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to
determine the total pension liability for PERF C. The crossover test results can be found on 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 (PERF) cash flows. Taking into account historical returns of all
the Public Employees Retirement Funds’ asset classes (which includes the agent plan and two cost-sharing plans or PERF
A, B, and C funds), expected compound (geometric) returns were calculated over the short-term (first 10 years) and the
long-term (11-60 years) using a building-block approach. Using the expected nominal returns for both short-term and
long-term, the present value of benefits was calculated for each PERF fund. The expected rate of return was set by
calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the
one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the
single equivalent rate calculated above and rounded down to the nearest one quarter of one percent.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 38
Note 7: Pension Plans (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 47.0%4.90%5.38%
Global Fixed Income 19.0%80.00%2.27%
Inflation Sensitive 6.0%60.00%1.39%
Private Equity 12.0%6.60%6.63%
Real Estate 11.0%2.80%5.21%
Infrastructure and Forestland 3.0%3.90%5.36%
Liquidity 2.0%-0.40%-0.90%
(a) An expected inflation of 2.5% used for this period
(b) An expected inflation of 3.0% used for this period
Safety Plan
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate. The following
presents the City’s proportionate share of the net pension liability, calculated using the discount rate for the Plans as well
as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that
is 1-percentage point lower or 1-percentage point higher than the current rate:
1% Decrease 6.15%
Net Pension Liability 98,353,726$
Current Discount Rate 7.15%
Net Pension Liability 71,364,346$
1% Increase 8.15%
Net Pension Liability 49,301,873$
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, 2018, the City reported a payable of $0 for the outstanding amount of contributions to the pension plan
required for the year ended June 30, 2018.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 39
Note 8: Other Post-Employment Benefits (OPEB)
General Information about OPEB
Plan Description. The City’s primary other post-employment benefits (OPEB) cost obligation is for retiree health
benefits under its election to participate in the CalPERS Health Benefit Program, an agent multiple-employer defined
benefit OPEB plan, under the “unequal contribution option.” The City entered the CalPERS medical insurance program
in 1993 under the Public Employees’ Medical and Hospital Care Act (PEMHCA). During the fiscal year ended June 30,
2009, the City entered into an agreement to participate in an irrevocable trust to provide a funding mechanism for retiree
health benefits. The Trust, California Employers’ Retiree Benefit Trust (CERBT), is administered by CalPERS and
managed by a separately appointed board, which is not under control of the City Council. This Trust is not considered a
component unit of the City. The portion of the OPEB plan that has been allocated to the Whale Rock Commission, an
Agency Fund, is included in the OPEB plan summaries in this footnote. A summary of the government-wide balances
for the OPEB plan at June 30, 2018 is as follows:
Net OPEB Deferred Outflows Deferred Inflows
Liability of Resources of Resources
OPEB Plan 7,650,913$ 1,221,000$ 149,929$
Less: Whale Rock Agency Fund (127,770) (7,010) (2,504)
Total Government-Wide 7,523,143$ 1,213,990$ 147,425$
Benefits Provided. The City provides post-employment heath care insurance, in accordance with Memorandums of
Understanding, to all employees who retire from the City upon or after attaining age 50 with at least 5 years of service or
disability retirement. Miscellaneous retires who are PEPRA new hires are eligible at age 52. For each retiree enrolled in
a CalPERS medical plan, the employer will pay the required statutory PEMHCA minimum, which is $133 per month per
employee in 2017-18 and $136 per month per employee in 2018-19. This amount will increase with the health care
component of CPI, as announced by the CalPERS Board each year. The retiree must pay the difference between the
premium amount, which depends upon the medical plan benefits selected, and the employer-paid minimum. In addition,
the City pays 50% of the premium up to the retiree’s age of 65 for three grandfathered executive management retirees
hired prior to August 2000.
There is no OPEB provided to terminated vested employees. The employer-paid amount will continue to a surviving
spouse if the retiree elects a CalPERS survivor annuity. There are no required employee contributions, although the
retiree must pay the difference between the premium and the employer-paid amount. The employer is contributing the
full Actuarially Determined Contribution.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 40
Note 8: Other Post-Employment Benefits (OPEB)
Employees Covered. At June 30, 2017, the measurement date, the following number of employees were covered by the
benefit terms:
Inactive employees or beneficiaries
currently receiving benefits 176
Inactive employees entitled to but
not yet receiving benefit payments 163
Active employees 431
Total 770
Contributions. The contribution requirements of the plan members and the City are established and may be amended by
the City. The City prefunds the plan through CERBT by contributing at least 100% of the annual required contribution.
For the year ended June 30, 2018, the City’s contributions totaled $1,221,000.
Net OPEB Liability
The City’s net OPEB liability for the Plan is measured as the total OPEB liability less the Plan’s fiduciary net position.
The net OPEB liability of the Plan is measured as of June 30, 2017 using an annual actuarial valuation as of June 30,
2017. The principal assumptions and methods used to determine the net liability are described below.
Actuarial Valuation Date June 30, 2017
Measurement Date June 30, 2017
Contribution Policy Contributes full ADC
Actuarial Assumptions:
Discount Rate 6.75% at June 30, 2017 and 2016 same as expected long term rate of return
Expected Long-Term Rate of 6.75% net of expenses. Expected agency contributions projected to keep
Return on Investments sufficient plan assets to pay all benefit terms.
General Inflation 2.75%
Mortality, Retirement, Disability,
Termination Rates from CalPERS 1997-2015 Experience Study
Mortality Improvement Post-retirement mortality projected fully generational with Society of
Actuaries Scale MP-2017
Salary Increases Aggregate - 3%
Merit - CalPERS 1997-2015 Experience Study
Medical Trend Non-Medicare - 7.5% for 2019, decreasing to an ultimate rate of 4.0%
in 2076 and later years.
Medicare - 6.5% for 2019, decreasing to an ultimate rate of 4.0% in
2076 and later years
Participation at Retirement Currently covered: 70% Currently waived: 15%
ACA Excise Tax Estimated by 2% load on Cash benefit payments.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 41
Note 8: Other Post-Employment Benefits (OPEB)
Change in Assumptions. There were no changes in assumptions for the year ended June 30, 2018.
Discount Rate. The discount rate used to measure the total OPEB liability was 6.75% for the Plan. To determine whether
the municipal bond rate should be used in the calculation of a discount rate for the Plan, the actuary performed a stress-
test on the Plan that would most likely result in a discount rate that would be different from the actuarially-assumed
discount rate. Based on the test, the Plan will not run out of assets. Therefore, the current 6.75% discount rate is adequate,
and the use of the municipal bond rate calculation is not necessary. The long term expected discount rate of 6.75% is
applied to the Plan. The stress-test results are presented in the detailed actuarial report, which can be obtained from the
City.
Investments. The following table reflects the long-term expected real rate of return of the Plan’s investments by asset
class. The rates of return are presented as geometric means developed over a twenty year period. These rates of return
are net of administrative expenses.
Current Expected
Target Real Rate
Asset Class Allocation (1)of Return (2)
Public Equity 57.0%4.82%
Fixed Income 27.0%1.47%
TIPS 5.0%1.29%
Commodities 3.0%84.00%
REITs 8.0%3.76%
Assumed Long-Term Rate of Inflation 2.75%
Assumed Long-Term Investment Expenses n/a
Expected Long-Term Net Rate of Return, Rounded 6.75%
Discount Rate (3)6.75%
(1) Provided by CalPERS' Strategic Asset Allocation Analysis Overview in August 2014 - Strategy 1.
(2) Geometric Average
(3) The fiduciary net position is projected to be sufficient to make projected benefit payments, and the
plan assets are expected to be invested using the strategy to achieve the expected return.
79
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 42
Note 8: Other Post-Employment Benefits (OPEB)
Changes in the Net OPEB Liability
The changes in the net OPEB liability for the fiscal year ended June 30, 2018 are as follows:
Plan
Total Fiduciary Net
OPEB Net OPEB
Liability Position Liability
Balance at June 30, 2016 12,651,572$ 4,345,728$ 8,305,844$
Changes during the year:
Service cost 450,125 450,125
Interest on the total pension liability 856,436 856,436
Contribution - employer 1,493,996 (1,493,996)
Net investment income 469,883 (469,883)
Benefit payments, including refunds
of employee contributions (827,500) (827,500) -
Administrative expense (2,387) 2,387
Net changes 479,061 1,133,992 (654,931)
Balance at June 30, 2017 13,130,633$ 5,479,720$ 7,650,913$
Sensitivity of Net OPEB Liability to Changes in the Discount Rate. The following presents the net OPEB liability at
the current discount rate, as well as what the net OPEB liability would be if it were calculated using a hypothetical discount
rate that is one percentage point lower or one percentage point higher than the current rate.
1% Decrease 5.75%
Net OPEB Liability 9,421,138$
Current Discount Rate 6.75%
Net OPEB Liability 7,650,913$
1% Increase 7.75%
Net OPEB Liability 6,195,271$
80
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 43
Note 8: Other Post-Employment Benefits (OPEB)
Sensitivity of Net OPEB Liability to Changes in Healthcare Cost Trend Rates. The following presents the net OPEB
liability at current healthcare cost trend rates, as well as what the net OPEB liability would be if it were calculated using
hypothetical healthcare cost trend rates that are one percentage point lower or one percentage point higher than the current
rate.
1% Decrease
Net OPEB Liability 6,055,174$
Current Trend
Net OPEB Liability 7,650,913$
1% Increase
Net OPEB Liability 9,617,832$
OPEB Plan Fiduciary Net Position. Detailed information about the OPEB Plan’s fiduciary net position is available in
the separately issued CalPERS financial reports on the CERBT.
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB
For the year ended June 30, 2018, the City’s OPEB expense was $988,994, of which $972,478 was recognized as OPEB
expense for the City and $16,516 was recognized as OPEB expense for the Whale Rock Agency Fund. At June 30, 2018,
the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following
sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
OPEB contributions subsequent to
measurement date 1,221,000$ $
Net differences between projected and
actual earnings on plan investments 149,929
Total 1,221,000$ 149,929$
81
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 44
Note 8: Other Post-Employment Benefits (OPEB)
OPEB contributions subsequent to the measurement date of $1,221,000 are reported as deferred outflows of resources
and will be recognized as a reduction of the net OPEB liability in the year ended June 30, 2019. Other amounts reported
as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as pension expense
as follows:
Fiscal Year
Ended June 30 Amount
2019 (37,482)$
2020 (37,482)
2021 (37,482)
2022 (37,483)
(149,929)$
Payable to the OPEB Plan
At June 30, 2018, the City reported a payable of $0 for the outstanding amount of contributions to the OPEB plan required
for the year ended June 30, 2018.
Note 9: Interfund Transactions
Interfund receivable and payable balances as of June 30, 2018 consist of the following:
Interfund
Receivables
Interfund
Payables
General Fund 59,274$ $
Nonmajor Governmental Funds:59,274
Total 59,274$ 59,274$
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.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 45
Note 9: Interfund Transactions (Continued)
Interfund transfers for the year ended June 30, 2018 consist of the following:
Transfers In Transfers Out
General Fund 7,600,244$ 13,570,369$
Nonmajor Governmental Funds 12,214,900 5,046,748
Enterprise Funds 1,198,027
Total 19,815,144$ 19,815,144$
Note 10: Joint Ventures, Jointly Governed Organizations and Operating Agreements
The City participates in three multi-governmental organizations: the Whale Rock Commission, the San Luis Obispo
Regional Transit Authority, and the San Luis Obispo Council of Governments. The City also has an operating agreement
related to Nacimiento Water Supply Project. The following provides a general description of each of these agencies and
operating agreements along with a summary of financial information and indebtedness:
Whale Rock Commission
General Description. The Whale Rock Commission (Commission) was established on December 12, 1960 to govern the
operations of the Whale Rock Reservoir. The Commission is composed of six voting members and two non-voting
members: three voting members are appointed by the City; one is appointed by California Polytechnic State University;
one by California Men's Colony; and one by the Director of Finance, State of California. The two non-voting members
are position appointments: the Director of Water Resources, State of California; and the Water Superintendent, City of
San Luis Obispo. The Commission is authorized by its respective agencies to establish policies for the operation of the
Reservoir, to contract for the sale of excess water, and to approve the annual budget.
The City, in accordance with established policies of the Commission, operates and maintains the Reservoir; prepares and
recommends the annual budget; and maintains the fiscal records and funds of the Commission. The Whale Rock Agency
Fund is used to account for the Commission's ongoing operating activities. Ownership in the Reservoir is as follows:
55.05%, City of San Luis Obispo; 33.71%, California Polytechnic State University; and 11.24%, California Men's Colony.
The City's share of the Commission's expenses 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.
83
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 46
Note 10: Joint Ventures, Jointly Governed Organizations and Operating Agreements (Continued)
The City's original investment in the Reservoir project aggregates $3,900,000, and was amortized on a straight-line basis
over thirty-five years. Separate financial statements are available from the Whale Rock Commission, 879 Morro Street,
San Luis Obispo, CA 93401.
The following segment financial information for the Whale Rock Commission and the Water Fund’s related investment
in the joint venture is presented as of and for the year ended June 30, 2018:
City's Investment
Joint Venture in Joint Venture
Total assets 3,514,493$ 1,934,700$
Total liabilities 1,602,215 882,000
Fund balance 1,912,278$ 1,052,700$
Total revenues 1,580,223$ 869,900$
Total expenditures 1,199,999 660,600
Excess of revenues over expenditures 380,224$ 209,300$
San Luis Obispo Regional Transit Authority
General Description. The City is a member of the San Luis Obispo Regional Transit Authority (Authority), which was
established on February 27, 1990, to operate a joint public transportation system. The Authority is composed of the Cities
of Arroyo Grande, Atascadero, Grover Beach, Morro Bay, Paso Robles, Pismo Beach, and San Luis Obispo, as well as
the County of San Luis Obispo. The Authority is governed by a Board of Directors comprised of representatives of each
of the seven cities, in addition to the five members of the Board of Supervisors. Each member of the Board has one vote.
The Board has the authority to establish policies for the operation of the transit system and to adopt an annual budget.
Each member makes an annual contribution to the agency for funding the adopted budget.
Financial Information. The City allocates a portion of its Transportation Development Act funds directly to the
Authority. During 2017-18 the City contributed approximately $694,798 of these funds to the Authority. The City's share
of assets, liabilities, and fund equity has not been calculated by the Authority and therefore is not known to the City;
however, based on the City's limited financial participation in the Authority, any such assets, liabilities, or equity are not
believed to be significant to the basic financial statements taken as a whole. Separate financial statements are available
from the Authority, 179 Cross Street, Suite A, San Luis Obispo, CA 93401.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 47
Note 10: Joint Ventures, Jointly Governed Organizations and Operating Agreements (Continued)
San Luis Obispo Council of Governments
General Description. The San Luis Obispo Council of Governments (SLOCOG) was formed in 1968 through a joint
powers agreement among the incorporated cities and the County of San Luis Obispo. It acts as the regional transportation
planning agency for the county and is the metropolitan planning organization and the congestion management agency for
the region. The governing board consists of twelve delegates, each with one vote that includes the five members of the
County Board of Supervisors and one representative from each of the seven cities in the County.
Financial Information. A portion of the City's Transportation Development Act funds are directly allocated to the
SLOCOG. The City's share of assets, liabilities, and fund equity has not been calculated by SLOCOG and therefore is
not known to the City; however, based on the City's limited financial participation in SLOCOG, any such assets, liabilities,
or equity are not believed to be significant to the basic financial statements taken as a whole. Separate financial statements
are available from SLOCOG, 1114 Marsh Street, San Luis Obispo, CA 93401.
Nacimiento Water Supply Project
General Description. In 2004, the Council adopted a resolution approving an agreement with the San Luis Obispo County
Flood Control and Water Conservation District (District) for the design, construction, and operations of the facilities
required for the delivery of 5,482 acre-feet of water per year to the City of San Luis Obispo from the Nacimiento Water
Supply Project (Project). The agreement includes conditions relative to the costs associated with the project and how
these costs will be shared and paid by the participants in the project.
Each project participant, including the City, has entered into an agreement in order to provide for the development,
financing, construction, operation and maintenance of the Project. The agreement is a “take-or-pay” obligation: the City
is obligated to pay amounts specified in the agreement whether or not water is delivered. The City is required to pay an
amount equal to its share of various capital expenses relating to the funding of design costs, engineering, planning,
environmental mitigation, equipping new facilities and/or construction efforts, accounting services, project administration
and management, installation, grading, razing and building the Project. The City is also required to pay for its share of
operating and maintenance costs. The City records these payments as operating expenses in its water enterprise fund.
The City is required to make payments under its agreement solely from the revenues of its water system. The City agreed
to establish and collect rates and charges from the customers of the City’s water enterprise fund at levels sufficient to
produce revenues equal to: (1) the costs of operating and maintaining the City’s water enterprise; plus (2) the contract
payments, calculated in accordance with the delivery contract including the amounts allocated as the City’s share of
capital projects installment debt service; plus (3) the coverage factor for the amounts allocated as the City’s share of
capital projects installment debt service; and (4) under certain circumstances, that the City understands and agrees that
the delivery contract may impose a surcharge following the occurrence of any payment default.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 48
Note 10: Joint Ventures, Jointly Governed Organizations and Operating Agreements (Continued)
Financial Information. In September 2007, the District sold water revenue bonds in the amount of $196 million for the
construction of the Project. These bonds were refinanced in August 2015. In addition, the District sold water revenue
bonds in the amount of $182 million. Based on the City’s share of construction costs, debt service and operating and
maintenance, the following summarizes the City’s Project obligations for 2017-18 and five-year projections for the 2015
bonds and the 2007 bonds that will remaining outstanding following the refunding.
Actual 2017 6,676,562$
Projected:
2019 4,985,758
2020 4,945,455
2021 4,948,523
2022 4,945,814
2023 4,948,105
2024-28 24,736,686
2029-33 24,729,601
2034-38 24,738,478
2039-41 15,686,526
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 11: Risk Management
California Joint Powers Insurance Authority
The City is a member of the California Joint Powers Insurance Authority (Authority). The Authority is composed of 119
California public entities and is organized under a joint powers agreement pursuant to California Government Code
§ 6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses,
to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of
coverage. The California JPIA began covering claims of its members in 1978. Each member government has an elected
official as its representative on the Board of Directors. The Board operates through a nine-member Executive Committee.
Each member pays an annual contribution to cover estimated losses for the coverage period. This initial funding is paid
at the beginning of the coverage period. After the close of the coverage period, outstanding claims are valued. A
retrospective deposit computation is then conducted annually thereafter until all claims incurred during the coverage
period are closed on a pool-wide basis. This subsequent cost reallocation among members based on actual claim
development can result in adjustments of either refunds or additional deposits required.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 49
Note 11: Risk Management (Continued)
The total funding requirement for self-insurance programs is estimated using actuarial models and prefunded through the
annual contribution. Costs are allocated to individual agencies based on exposure (payroll) and experience (claims)
relative to other members of the risk-sharing pool. Additional information regarding the cost allocation methodology is
provided below.
Self-Insurance Programs of the Authority
General Liability and Workers’ Compensation. The City is a member of the California Joint Powers Insurance Authority
(CJPIA), which provides joint protection programs and group purchased insurance for public entities covering liability,
errors and omission losses, auto liability, employment practices liability, crime, pollution, workers’ compensation injuries
and coverage for city-owned property. The City has a retained limit of $500,000 per occurrence for liability and no
retained limit for workers’ compensation.
Liabilities of the City are reported when it is probable that a loss has occurred and the amount of the loss can be reasonable
estimated. Liabilities include an amount for claims that have been incurred but not reported (IBNR). The result of the
process to estimate the claims liability is not an exact amount as it depends on many complex factors, such as inflation,
changes in legal doctrines and damage awards. Accordingly, claims are 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 2017-18. CJPIA
covers workers’ compensation claims up to a pooled limit of $2 million per occurrence and provides excess coverage to
statutory limits with a group purchased commercial insurance policy. The City pays an annual contribution to CJPIA and
may share in any member refunds in the event that pooled funding exceeds the cost of pooled claims and claim-related
expenses, or the City may be required to pay additional contributions based upon CJPIA’s operating results.
Financial statements of CJPIA may be obtained from its administrative office located at 8081 Moody Street, La Palma,
California 90623, or by calling (562) 467-8700.
Additional claims and lawsuits have been filed against the City in the normal course of business. It is reasonably possible
that the City may be liable for claims not to exceed $500,000. In the opinion of management, the resolution of these
matters will not have a material adverse effect on the financial condition of the City.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 50
Note 11: Risk Management (Continued)
Adequacy of Protection
During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that
exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage
from coverage in 2017-18.
Self-Insurance
The City retains the risk for workers’ compensation losses incurred prior to joining the California Joint Powers Insurance
Authority. Several member agencies of the now dissolved Central Coast Cities Self-Insurance Fund continue to
participate in a non-risk sharing arrangement for claims management and the purchase of excess insurance. The
participating agencies share a set of common guidelines and annually set aside premiums to pay their individual losses
within their self-insured retentions. Losses are debited and investment income is credited to specific member accounts.
The City has not incurred any losses in excess of insurance coverage. Claims liabilities in the governmental funds are
generally liquidated by the General Fund.
The last actuarial study to determine the undiscounted outstanding claims liability was completed for the year ended
June 30, 2018. The liability was estimated based on the actuarial study and considered claims asserted and paid, and the
time limitations for filing claims. There are no estimates for claims incurred but not reported because the time limit for
filing claims has elapsed. The estimated asset at June 30, 2018 is calculated as follows:
Self-insurance activity as of and for the year ended June 30, 2018
is summarized is as follows:
Interest earnings 16,283$
Claims expense (257,114)$
Estimated liability for reported claims and settlement expenses (544,123)$
Assets on deposit 1,245,181
Estimated unpaid claims asset 701,058$
Changes in the balances of claim assets during the past two fiscal years
are as follows:
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
Claim payments and related expenditures reimbursement (257,114)
Change in estimated claims asset June 30, 2018 117,027
Interest earnings 16,283
Estimated unpaid claims asset June 30, 2018 701,058$
88
City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 51
Note 12: Operating Lease
The City entered into an operating lease in October 2014 for the use of various office equipment. Total expense for the
lease was $20,629 for the year ended June 30, 2018. At June 30, 2018, the future minimum lease payments were as
follows:
For the Year Ending June 30,
2019 20,982$
2020 10,625
31,607$
Note 13: Commitments and Contingencies
Litigation
The City is presently involved in certain matters of litigation that have arisen in the normal course of conducting City
business. City management believes, based upon consultation with the City Attorney, that these cases, in the aggregate,
are adequately covered by insurance and not expected to result in a material adverse financial impact on the City.
Grant Awards
Under the terms of Federal and State grants, audits may be required and certain costs may be questioned as not being
appropriate expenditures under the terms of the grants. Such audits could lead to requests for reimbursement to the grantor
agencies. City management believes disallowances, if any, will be immaterial.
Regional Transit Authority Pension Expense
The City is presently a member agency of the San Luis Obispo Regional Transit Authority (see Note 10), a duly
established Joint Powers Authority (JPA) comprised of all local cities and the County of San Luis Obispo. The City’s
contractual contribution to that entity is approximately 18%. The City was recently advised that the Regional Transit
Authority is working with CalPERS to determine whether it is required to enroll certain previously unenrolled transit
employees in the CalPERS pension system and whether the entity may be liable for obligations related to the failure to
enroll those employees and make contributions on their behalf. The current amount of potentially unfunded liability for
the JPA associated with this matter may reach as high as $5 million. It is not known whether and to what extent member
agencies may be obligated to increase contributions to address the retroactive liability and to fund contributions for
previously unenrolled employees going forward. Resolution of the matter is expected in early 2019.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 52
Note 14: Construction and Other Significant Commitments
Construction and other significant commitments as of June 30, 2018, including encumbrances outstanding at year-end,
are as follows:
General Fund 3,640,896$
Special Revenue Funds 186,864
Capital Project Funds 1,620,622
Enterprise Funds:
Water 585,126
Sewer 4,860,676
Parking 87,258
Transit 8,308
Total 10,989,750$
Long-term construction contracts are billed and paid on a percentage completion basis by construction phase.
Note 15: Fund Balance Deficiency
At June 30, 2018, the City had a negative fund balance in the Downtown BID Fund of $77,329.
Note 16: Subsequent Events
Events subsequent to June 30, 2018 have been evaluated through December 21, 2018, which is the date that the financial
statements are available to be issued. Management identified the below subsequent events that required disclosure.
Diablo Power Plant Closure Settlement Agreement
On September 19, 2018, Governor Jerry Brown approved Senate Bill No. 1090 related to the Diablo Canyon Nuclear
Power Plant Closure. The bill requires the Public Utilities Commission to approve the full funding for the community
impact mitigation settlement, and for the employee retention program, proposed by Pacific Gas and Electric Company
(PG&E) in a specified application submitted to the Commission. The bill would also require the Commission to ensure
that integrated resource plans avoid any increase in emissions of greenhouse gases as a result of the retirement of the
Diablo Canyon Nuclear Power Plant. The Settlement Agreement with PG&E includes a payment by PG&E of $10 million
to the Economic Development Fund to ease the local economic impacts of the plant’s closure. Of this amount, the City
will receive $1.82 million. In addition, the agreement includes $75 million to the Essential Services Mitigation Fund to
offset the potential negative impacts to essential public services, which will be paid out through the County in nine equal
installments through 2025. The County will redistribute the funds to 71 local agencies whose budgets are impacted by
the inevitable decrease in unitary tax funding from the power plant. Finally, the agreement includes continued funding
of offsite community and local emergency planning efforts over the course of 15 to 25 years.
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 53
Note 16: Subsequent Events (Continued)
2018 Water Revenue Refunding Bonds
On July 3, 2018, the City issued water revenue refunding bonds, of which were used to refund the outstanding 2006 water
revenue bonds. Proceeds from the 2018 bonds totaled $10,095,000, along with a $1,714,515 bond premium and
$1,035,348 in reserve funds from the prior bonds, were applied towards fully funding an escrow amount in the total
amount sufficient for the redemption of $12,520,000 total outstanding principal plus $77,353 interest accrued on the prior
bonds on August 3, 2018 (the “Redemption Date”) and $247,510 in bond underwriter’s discount and cost of issuance.
2018 Clean Water State Revolving Fund Loan
On November 13, 2018, the City Council approved the Clean Water State Revolving Fund loan agreement between the
City of San Luis Obispo and the California State Water Resources Control Board for a $140 million loan for the Water
Resource Recovery Facility Project. The City will receive $4 million in principal forgiveness and the remaining $136
million will be repaid over 30 years. The applicable interest rate was set at 1%.
Note 17: New Accounting Standards
Accounting Standards Adopted
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. Implementation of GASB Statement No. 75 for the City’s
June 30, 2018 financial statements resulted in a restatement of beginning net position as of July 1, 2017. See Notes 8 and
18 to the financial statements for further discussion.
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. Implementation of this Statement did
not have a material impact on the City’s 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
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 54
Note 17: New Accounting Standards (Continued)
years beginning after June 15, 2016. Implementation of this Statement did not have a material impact on the City’s
financial statements.
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. Implementation of this Statement did not have a material
impact on the City’s 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. Implementation of this Statement did not have a material impact on the City’s financial
statements.
New Accounting Standards
In November 2016, GASB issued Statement No. 83, Certain 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.
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
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City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2018
Page 55
Note 17: New Accounting Standards (Continued)
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.
In April 2018, GASB issued Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and
Direct Placements. Statement No. 88 is meant to improve the information that is disclosed in notes to government
financial statements related to debt, including direct borrowings and direct placements. It also clarifies which liabilities
governments should include when disclosing information related to debt. This Statement requires that additional essential
information related to debt be disclosed in notes to financial statements. The provisions of Statement No. 88 are effective
for fiscal years beginning after June 15, 2018. Management has not yet determined the impact of this Statement on its
financial statements.
In June 2018, GASB issued Statement No 89, Accounting for Interest Cost Incurred before the End of a Construction
Period. Statement No. 89 enhances the relevance and comparability of information about capital assets and the cost
of borrowing for a reporting period and simplifies accounting for interest cost incurred before the end of a construction
period. The provisions of Statement No. 89 are effective for fiscal years beginning after December 15, 2019.
Management has not yet determined the impact of this Statement on its financial statements.
In August 2018, GASB issued Statement No 90, Majority Equity Interests. Statement No. 90 improves the consistency
and comparability of reporting a government’s majority equity interest in a legally separate organization and improves
the relevance of financial statement information for certain component units. The provisions of Statement No. 90 are
effective for fiscal years beginning after December 15, 2018 with earlier implementation encouraged. Management has
not yet determined the impact of this Statement on its financial statements.
Note 18: Prior Year Restatements
As of July 1, 2017, the City implemented GASB Statement No. 75, Accounting and Financial Reporting for
Postemployment Benefits Other Than Pensions. The City recorded the beginning net OPEB liability of $8,167,136, the
beginning deferred outflows of resources of $1,469,046 related to OPEB contributions made after the beginning
measurement date, the removal of the net OPEB asset under the previous standards of $495,000, to arrive at the
restatement of $7,193,090. See Note 8 for detailed information about the impact of the implementation on the City’s
financial statements.
During 2018, a prior year restatement was recorded to properly record the City’s investment in the Whale Rock
Commission, a joint venture, due to the implementation of GASB Statement No. 75. The effect was to decrease
investment in joint venture and beginning net position by $62,700 for the Water Fund for the year ended June 30, 2017.
During 2018, a prior year restatement was recorded to properly record July 2017 utility billing revenue due to a change
in the City’s billing cycle accrual methodology. The effect was to increase current year water and sewer revenue and
decrease beginning net position by $414,055, $292,590 and $17,460 for the Water Fund, Sewer Fund, and General Fund,
respectively, for the year ended June 30, 2017.
REQUIRED SUPPLEMENTARY INFORMATION
(UNAUDITED)
94
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund
For the Fiscal Year Ended June 30, 2018
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
Revenues:
Taxes and franchise fees:
Sales and use tax - general 16,932,000$ 16,487,213$ 17,055,085$ 567,872$
Sales and use tax - Half Percent Sales Tax 7,607,000 7,445,096 7,504,485 59,389
Sales tax - Prop 172 436,560 436,560 397,488 (39,072)
Property tax 10,950,000 11,145,228 11,425,510 280,282
Transient occupancy tax 7,293,790 7,293,790 7,514,289 220,499
Utility users tax 5,568,000 5,568,000 5,627,356 59,356
Property tax in lieu of VLF 4,593,377 4,637,535 4,637,253 (282)
Franchise taxes 1,526,717 1,582,442 1,597,655 15,213
Business tax 2,746,896 2,746,896 2,663,686 (83,210)
Real property transfer tax 380,878 380,878 347,765 (33,113)
Total taxes 58,035,218 57,723,638 58,770,572 1,046,934
Fines, forfeitures and penalties 147,600 147,600 199,374 51,774
Use of money and property 264,798 264,798 26,220 (238,578)
Subventions and grants:
Homeowners' property tax relief 69,560 69,560 90,636 21,076
Other in-lieu 22,000 22,000 24,595 2,595
Police training grant (POST)10,000 10,000 30,615 20,615
COPS grant AB 3229 100,000 100,000 139,416 39,416
Mutual aid reimbursements 962,341 1,672,663 710,322
Transportation grants 85,000 85,000 21,703 (63,297)
Other State and Federal grants 99,000 108,378 12,798 (95,580)
Total subventions and grants 385,560 1,357,279 1,992,426 635,147
See notes to required supplementary information.
95
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2018
Page 2
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
Charges for services:
Public safety:
Police 475,267$ 533,909$ 629,557$ 95,648$
Fire:
Cal Poly fire services 291,312 291,312 284,408 (6,904)
Medical emergency recovery 182,515 182,515 181,133 (1,382)
Fire safety/hazardous materials permits 137,150 137,150 103,777 (33,373)
Multi-dwelling unit inspections 284,168 284,168
Other fire revenues 110,776 122,861 197,145 74,284
Community development:
Planning and zoning fees 648,619 648,619 631,786 (16,833)
Construction plan and check inspections 3,410,514 3,410,514 3,602,558 192,044
Infrastructure plan check and inspections 1,400,000 1,400,000 1,476,908 76,908
Fire plan check and inspections 400,000 400,000 393,704 (6,296)
Encroachment permits 244,745 244,745 327,535 82,790
RHIP Fees 38,961 38,961 (46,876) (85,837)
Culture and recreation:
Adult athletic fees 135,117 135,117 112,407 (22,710)
Youth athletic fees 37,201 37,201 26,125 (11,076)
Skatepark 2,208 2,208 10 (2,198)
Instruction fees 100,455 100,455 70,061 (30,394)
Special event fees 102,332 108,272 68,659 (39,613)
Rental and use fees 178,279 178,279 191,025 12,746
Children services 662,340 662,340 705,352 43,012
Teens & seniors 1,656 1,656 18 (1,638)
Aquatics 278,956 283,083 284,030 947
Golf course 322,496 322,495 250,431 (72,064)
General government:
Other service charges 435,485 435,487 441,730 6,243
Total charges for services 9,596,384 9,677,179 10,215,651 538,472
Other revenues:
Insurance refunds 28,200 28,200 (367,401) (395,601)
Sale of surplus property 7,198 7,198
Other 32,900 348,749 893,044 544,295
Total other revenues 61,100 376,949 532,841 155,892
Total Revenues 68,490,660 69,547,443 71,737,084 2,189,641
See notes to required supplementary information.
96
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2018
Page 3
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
Expenditures:
Public Safety:
Police protection:
Administration 1,786,923$ 1,826,799$ 1,604,735$ 222,064$
Investigations 2,496,640 2,496,640 2,373,230 123,410
Neighborhood services 268,998 268,998 234,658 34,340
Support services 2,660,866 2,625,032 2,387,474 237,558
Patrol services 8,281,059 8,355,354 8,457,403 (102,049)
Traffic safety 845,290 864,090 721,013 143,077
Total police protection 16,339,776 16,436,913 15,778,513 658,400
Fire and environmental safety:
Administration 980,360 992,514 878,145 114,369
Emergency response 9,724,402 10,685,987 10,589,603 96,384
Fire Apparatus Services 417,561 439,023 406,356 32,667
Hazard protection 1,083,048 1,129,691 882,420 247,271
Training 233,050 234,594 94,089 140,505
Technical services 38,055 48,145 46,986 1,159
Disaster preparedness 9,900 43,752 35,577 8,175
Total fire and environmental safety 12,486,376 13,573,706 12,933,176 640,530
Total public safety 28,826,152 30,010,619 28,711,689 1,298,930
Transportation:
Transportation planning and engineering 943,437 1,066,074 984,494 81,580
Street and sidewalk maintenance 1,778,492 1,554,293 1,207,563 346,730
Traffic signals and street lights 535,787 539,135 501,165 37,970
Creek and flood protection 994,844 1,020,425 854,462 165,963
Total transportation 4,252,560 4,179,927 3,547,684 632,243
See notes to required supplementary information.
97
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2018
Page 4
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
Culture and Recreation:
Recreation programs:
Recreation administration 932,649$ 932,649$ 711,842$ 220,807$
Aquatics/Sinsheimer park facilities 422,971 425,732 405,579 20,153
Children's services 919,095 919,095 906,269 12,826
Facilities 246,981 248,347 201,744 46,603
Special events 284,247 289,326 250,470 38,856
Recreational sports 346,024 346,885 244,322 102,563
Golf course 661,331 661,331 611,638 49,693
Ranger services 505,119 505,119 456,204 48,915
Maintenance programs:
Swim center maintenance 491,452 491,452 459,342 32,110
Parks and landscape maintenance 2,669,835 2,805,170 2,398,329 406,841
Tree maintenance 556,441 604,651 544,509 60,142
Cultural and social service programs:
Human relations 258,269 258,269 227,004 31,265
Cultural activities 320,287 320,287 317,011 3,276
Total leisure, cultural and social services 8,614,701 8,808,313 7,734,263 1,074,050
Community Development:
Planning:
Commissions and communities 51,517 51,517 35,386 16,131
Community development administration 710,180 779,520 688,271 91,249
Long-range planning 645,329 998,692 937,749 60,943
Development review 1,659,798 1,669,641 1,654,704 14,937
Development services 88,712 114,431 98,916 15,515
Natural resource protection 402,692 409,524 391,242 18,282
Construction regulation:
Building and safety 1,694,456 1,790,493 1,859,811 (69,318)
CIP project engineering 2,005,918 1,967,980 1,719,756 248,224
Economic health:
Community promotion 404,689 411,985 390,650 21,335
Economic development 251,148 435,148 242,069 193,079
Total community development 7,914,439 8,628,931 8,018,554 610,377
See notes to required supplementary information.
98
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2018
Page 5
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
General Government:
Legislation:
Council 139,156$ 139,156$ 129,772$ 9,384$
General administration:
City administration 1,013,669 1,153,734 907,488 246,246
Public works administration 1,019,913 1,019,913 968,922 50,991
Legal services:
City attorney 785,812 1,183,170 964,048 219,122
City clerk services:
Administration and records 680,083 865,323 704,969 160,354
Organization support services:
Human resource administration 1,211,890 1,392,131 1,169,237 222,894
Risk management 4,531,100 5,723,376 4,056,501 1,666,875
Finance and information technology administration 714,895 898,293 811,997 86,296
Revenue management 325,947 346,562 292,251 54,311
Accounting 884,525 889,345 859,919 29,426
Finance non departmental 1,357,789 1,362,789 282,954 1,079,835
Network services 2,608,660 2,662,620 2,466,077 196,543
Geographic information services 673,749 697,809 650,411 47,398
Support services 490,627 453,624 192,014 261,610
Wellness program 18,600 18,600 15,337 3,263
Building and vehicle maintenance:
Buildings 1,261,433 1,264,882 1,154,052 110,830
Vehicle and equipment maintenance 1,254,694 1,351,104 1,209,930 141,174
Total general government
before cost reimbursement 18,972,542 21,422,431 16,835,879 4,586,552
Cost reimbursement (Note 3 to RSI)(4,264,633) (4,264,633) (4,264,633) -
Total general government 14,707,909 17,157,798 12,571,246 4,586,552
Total Expenditures 64,315,761 68,785,588 60,583,436 8,202,152
Excess of Revenues Over Expenditures 4,174,899 761,855 11,153,648 (10,391,793)
See notes to required supplementary information.
99
City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2018
Page 6
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
Other Financing Sources (Uses)
Proceeds from debt issuance including bond premium $ $ 12,472,698$ (12,472,698)$
Payment of debt (14,558,475) 14,558,475
Transfers in 5,056,700 5,070,500 7,600,244 (2,529,744)
Transfers out (6,495,457) (11,539,155) (13,570,369) 2,031,214
Total other financing uses (1,438,757) (6,468,655) (8,055,902) 1,587,247
Net Change in Fund Balance 2,736,142 (5,706,800) 3,097,746 (8,804,546)
Fund Balance, Beginning of the Year 26,496,154 26,496,154 26,496,154 -
Prior Year Restatements (17,460) (17,460)
Fund Balance, Beginning of the Year, as Restated 26,496,154 26,496,154 26,478,694 17,460
Fund Balance, End of Year 29,232,296$ 20,789,354$ 29,576,440$ (8,787,086)$
See notes to required supplementary information.
100
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, 2018
Last 10 Years *
Fiscal Year 2017-18 2016-17 2015-16 2014-15
Measurement Period 2016-17 2015-16 2014-15 2013-14
Total pension liability:
Service Cost 4,124,832$ 3,580,882$ 3,578,172$ 3,703,087$
Interest on total pension liability 14,197,897 13,688,523 13,193,597 12,756,967
Difference between expected and actual experience 694,843 (1,160,933) (2,433,791)
Changes in assumptions 11,219,603 (3,057,724)
Benefit payments, including refunds of employee contributions (10,161,053) (9,476,508) (8,808,668) (8,258,611)
Net change in total pension liability 20,076,122 6,631,964 2,471,586 8,201,443
Total pension liability - beginning 189,675,644 183,043,680 180,572,094 172,370,651
Total pension liability - ending (a)209,751,766$ 189,675,644$ 183,043,680$ 180,572,094$
Plan fiduciary net position:
Contributions - employer 6,776,849$ 6,122,173$ 5,027,356$ 4,631,254$
Contributions - employee 1,841,331 1,666,606 1,509,834 1,664,654
Net investment income 13,053,453 677,557 2,673,657 17,746,607
Benefit payments (10,161,053) (9,476,508) (8,808,668) (8,258,611)
Net plan to plan resource movement (2,936)
Administrative expense (172,935) (72,044) (133,042)
Net change in plan fiduciary net position 11,334,709 (1,082,216) 269,137 15,783,904
Plan fiduciary net position - beginning 117,130,354 118,212,570 117,943,433 102,159,529
Plan fiduciary net position - ending (b)128,465,063$ 117,130,354$ 118,212,570$ 117,943,433$
Net pension liability (asset) - ending (a) - (b)81,286,703$ 72,545,290$ 64,831,110$ 62,628,661$ Plan fiduciary net position as a percentage of the total pension
liability 61.25%61.75%64.58%65.32%
Covered payroll 21,841,841$ 20,499,668$ 19,769,997$ 19,235,818$
Net pension liability as percentage of covered payroll 372.16%353.89% 327.93% 325.58%
* Fiscal year 2018 was the 4th year of implementation therefore only four 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, 2017.
See notes to required supplementary information.
101
City of San Luis Obispo, California
Schedule of the Pension Plan Contributions
Miscellaneous Agent Multiple-Employer Plan
June 30, 2018
Last 10 Years *
Fiscal Year 2017-18 2016-17 2015-16 2014-15 2013-14
Actuarially determined contribution 6,698,266$ 6,776,849$ 6,122,173$ 5,027,356$ 4,631,254$
Contributions in relation to the actuarially determined contributions (6,698,266) (6,776,849) (6,122,173) (5,027,356) (4,631,254)
Contribution deficiency (excess)-$ -$ -$ -$ -$
Covered payroll 23,794,341$ 21,841,841$ 20,499,668$ 19,769,997$ 19,235,818$
Contributions as a percentage of covered payroll 28.15% 31.03% 29.86% 25.43% 24.08%
* Fiscal year 2018 was the 4th year of implementation therefore only four 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, 2017.
See notes to required supplementary information.
102
City of San Luis Obispo, California
Schedule of the City’s Proportionate Share of the Net Pension Liability
Safety Cost-Sharing Plan
As of June 30, 2018
Last 10 Years *
Fiscal Year 2017-18 2016-17 2015-16 2014-15
Measurement Period 2016-17 2015-16 2014-15 2013-14
Employer's Proportion of the Collective Net Pension Liability 1.1943%1.2510% 1.3654%1.3754%
Employer's Proportionate Share of the Collective Net Pension Liability 71,364,346$ 64,792,760$ 56,260,280$ 51,592,420$
Employer's Covered Payroll 11,246,306$ 10,614,437$ 10,643,123$ 10,849,863$
Employer's Proportionate Share of the Net Pension Liability as a
Percentage of its Covered Payroll 634.56%610.42% 528.61%475.51%
Plan's Share of the Fiduciary Net Position as a
Percentage of the Employer's Total Pension Liability 71.74%72.69%77.27%78.83%
* Fiscal year 2018 was the 4th year of implementation therefore only four 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, 2017.
See notes to required supplementary information.
103
City of San Luis Obispo, California
Schedule of the City’s Pension Contributions
Safety Cost-Sharing Plan
As of June 30, 2018
Last 10 Years *
Fiscal Year 2017-18 2016-17 2015-16 2014-15 2013-14
Actuarially determined contribution 5,910,345$ 5,549,915$ 5,074,217$ 4,350,871$ 4,226,211$
Contributions in relation to the actuarially determined contributions (5,910,345) (6,299,915) (5,824,217) (4,650,871) (5,161,211)
Contribution deficiency (excess)-$ (750,000)$ (750,000)$ (300,000)$ (935,000)$
Covered payroll 11,246,306$ 10,614,437$ 10,643,123$ 10,849,863$ 10,768,119$
Contributions as a percentage of covered payroll 52.55%59.35%54.72% 42.87% 47.93%
* Fiscal year 2018 was the 4th year of implementation therefore only four 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, 2017.
See notes to required supplementary information.
104
City of San Luis Obispo, California
Schedule of the Changes in the Net OPEB Liability and Related Ratios
For the Fiscal Year Ended June 30, 2018
Fiscal Year 2017-18
Measurement Period 2016-17
Total pension liability:
Service Cost 450,125$
Interest on total OPEB liability 856,436
Difference between expected and actual experience
Changes in assumptions
Benefit payments, including refunds of employee contributions (827,500)
Net change in total OPEB liability 479,061
Total OPEB liability - beginning 12,651,572
Total OPEB liability - ending (a)13,130,633$
Plan fiduciary net position:
Contributions - employer 1,493,996$
Net investment income 469,883
Benefit payments (827,500)
Net plan to plan resource movement
Administrative expense (2,387)
Net change in plan fiduciary net position 1,133,992
Plan fiduciary net position - beginning 4,345,728
Plan fiduciary net position - ending (b)5,479,720$
Plan net OPEB liability - ending (a) - (b)7,650,913$
Plan fiduciary net position as a percentage of the total OPEB liability 41.73%
Covered payroll 33,722,592$
Plan net OPEB liability as percentage of covered payroll 22.69%
* Fiscal year 2018 was the 1st year of implementation therefore only one year is shown. Information is required only for
measurement periods for which GASB 75 is applicable. The current measurement period is the year ended June 30, 2017.
See notes to required supplementary information.
105
City of San Luis Obispo, California
Schedule of Employer OPEB Contributions
For the Fiscal Year Ended June 30, 2018
Fiscal Year 2017-18
Contractually determined contribution (actuarially determined)1,221,000$
Contributions in relation to the actuarially determined contributions (1,221,000)
Contribution deficiency (excess)-$
Covered payroll 33,790,437$
Contributions as a percentage of covered payroll 3.61%
* Fiscal year 2018 was the 1st year of implementation therefore only one year is shown. Information is required only for
measurement periods for which GASB 75 is applicable. The current measurement period is the year ended June 30, 2017.
See notes to required supplementary information.
106
City of San Luis Obispo, California
Notes to Required Supplementary Information
June 30, 2018
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, 2018 expenditures exceeded appropriations in the General Fund as noted below. This does not
represent a violation of City budget policies because no department’s total expenditures exceeded their total
appropriations within the General Fund.
Department/Division Budget Variance
Police protection:
Patrol services 166,468
Construction regulation:
Building and safety 81,898
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, 2016 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 2017, the accounting discount rate reduced from 7.65% to 7.15%. 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.
107
City of San Luis Obispo, California
Notes to Required Supplementary Information
June 30, 2018
Page 2
Schedule of the Pension Plan Contributions—Miscellaneous Plan
The actuarial methods and assumptions used to set the actuarially determined contributions for
fiscal year 2017-18 contributions rates are as follows:
Actuarial valuation date June 30, 2015
Actuarial cost method Entry Age Normal
Inflation 2.75%
Salary increases Varies by Entry Age and Service
Payroll growth 3.00%
Mortality The probabilities of mortality are based on the 2014 CalPERS Experience Study
for the period from 1997 to 2011. 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.
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 2014 CalPERS experience study
for the period from 1997 to 2011.
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
emplo yer during the measurement period.
Schedule of the City’s Pension 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 2017, the accounting discount rate reduced from 7.65% to 7.15%. 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.
108
City of San Luis Obispo, California
Notes to Required Supplementary Information
June 30, 2018
Page 3
Schedule of the Changes in the Net OPEB Liability and Related Ratios
1. Benefit changes. The figures shown do not include any liability impact that may have resulted from plan changes
which occurred after June 30, 2017 measurement date.
2. Changes in assumptions. There were no changes in assumptions.
Schedule of the OPEB Plan Contributions
The actuarial methods and assumptions used to set the actuarially determined contributions for
fiscal year 2017-18 contributions rates are as follows:
Actuarial valuation date June 30, 2015
Actuarial cost method Entry Age Normal, level percentage of payroll
Amortization method Level percent of payroll
Remaining amortization period 16.6 average years remaining for 2017/18
Inflation 3.00%
Discount rate 7.00%
Medical trend
Rates from CalPERS 1997-2015 Experience Study.
Asset valuation method
Mortality Improvement
Investment gains and losses spread over 5-year rolling period
Mortality projection Society of Actuaries Scale MP-2014, modified to converge
to ultimate rates in 2022.
Non-Medicare/Medicare - 7.0%/7.2% for 2017, decreasing to an ultimate rate of
5.0%/5.0% in 2021 and later yearsMortality, Retirement, Disability,
Termination
OTHER SUPPLEMENTARY INFORMATION
AND COMBINING AND INDIVIDUAL FUND
STATEMENTS AND SCHEDULES
110
City of San Luis Obispo, California
Half Percent Sales Tax Measure Funding Schedule
For the Fiscal Year Ended June 30, 2018
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 7,445,096$ 7,504,485$
Local Sales Tax Fund 56,409
7,445,096 7,560,894
Expenditures
Operating Programs:
Community Development 252,729 252,729
Public Works 1,239,956 1,202,100
Parks 144,685 130,818
Police 884,388 884,388
Fire 8,000 8,000
2,529,758 2,478,035
Capital Programs:Budget Actual Encumbrances Carryover
Administration
Completed Projects 66,997 $ 66,997$
Octagon Barn Facility 184,754 184,754
City/County Library Major Main 405,300 259,524 145,776
Laguna Lake Dredge/Mgt 92,323 60,789 112 31,422
Open Space Protection 560,857 112,073 2,280 446,504
1,310,231 432,386 2,392 875,453
Public Works
Trees Maintenance 470 470 -
Buildings Maintenance 483,900 93,400 163,206 227,294
Street R & R Mainc Account 93,679 51,715 300 41,664
Master street R 128,810 100,209 28,601
Street R & R Main Account 151,160 40,690 110,470
Master CMP Replacement 1,391,491 58,188 10,856 1,322,447
Sidewalk Repair 157,529 51,585 19,401 86,543
Street asphalt grind 90,676 90,676 -
Traffic Sign Maintenance 25,000 2,070 20,418 2,512
Broad/Leff Culvert 10,000 8,603 1,397
Downtown Renewal 196,000 196,000
Street marking replacement 5,753 5,753 -
Concrete Street/Access 18 575,160 105,992 469,168 -
3/4 Ton Pickups 1,152 1,152 -
Signal Truck 91,133 91,133 -
Madonna & LOVR Rehab 2,148,916 2,148,916 -
Street Vehicles/Equipment 336,199 205,605 166,781 (36,187)
Street Sidewalk Improvement 55,000 17,396 37,604
Traffic Safety Report 63,000 5,450 57,550
Bicycle Facility Improvement 127,993 64,919 63,074
Traffic Operation Report Implementation 10,909 1,713 9,196
Bob Jones Octagon Barn 42,531 42,531
111
City of San Luis Obispo, California
Half Percent Sales Tax Measure Funding Schedule, continued
For the Fiscal Year Ended June 30, 2018
Page 2
Capital Programs:Budget Actual Encumbrances Carryover
Public Works - continued
Traffic Safety Operation Improvement 30,000$ 436$ $ 29,564$
BTP Implementation 194,745 21,363 173,382
Bike Bridge/Phillips 250,000 25,398 78,987 145,615
Safe Route to School 44,594 44,594
Monterey/Oso Traffic Signal 252,628 252,869 (241)
Active Transportation Plan 40,000 40,000
Neighborhood Traffic Improvement 75,000 1,181 7,400 66,419
Street Light Master 20,000 20,000
Neighborhood Traffic 352 598 (246)
Parking Structure Assessment 8,333 5,906 2,427
7,102,113 3,438,877 951,026 2,712,210
Parks
Bike Pathway Main 98,409 7,093 91,316
Parks Major Maintenance 496,151 20,734 75 475,342
Mission Plaza Railroad 80,000 80,000
French & Islay Tennis 2,630 2,630
Mission Plaza Railing 59,875 59,875 -
Sinsheimer Backstop 98,500 2,385 96,115
Park Maintenance Vehicles & Equipment 99,672 99,672 -
Open Space Maintenance 306,473 235,132 71,341
1,241,710 424,891 75 816,744
Public Safety
Thinkstream CAD 25,000 25,000
911 Phone System 207,768 207,768
Police CAD Hardware 15,826 15,826
Radio Handhelds & Mobile Devices 180,000 162,554 17,446
South Hills Radio Upgrade 250,000 11,546 75,058 163,396
Public Surveillance Cameras 26,500 17,404 9,096
Police San Controllers 80,000 80,000 -
Police Vehicles 393,241 195,684 40,787 156,770
Fire Epcr Records Support 16,730 16,730
Ambulance Pkg Support 125,009 124,881 128
Fire Command Vehicle 25,465 18,053 7,412
Fire Station 2 Driveway 6,500 6,500
Fire Station 4 Emergency Back Up Genera 7,000 7,000
Fire Training Pickup 58,000 43,260 14,740
1,417,039 490,828 278,399 647,812
Capital Expenditure 11,071,093 4,786,982 1,231,892$ 5,052,219$
112
City of San Luis Obispo, California
Half Percent Sales Tax Measure Funding Schedule, continued
For the Fiscal Year Ended June 30, 2018
Page 3
Capital Programs:Budget Actual Encumbrances Carryover
Transfers (130,000)
Net Change in Fund Balance (6,155,755) 165,877
Fund balance, beginning of year 5,901,482 5,901,482
Fund balance, end of year (254,273)$ 6,067,359$
* Due to the nature of these projects, no carryover into the following fiscal year.
The following summarizes revenues and expenditures for the year ended June 30, 2018 for the Half Percent Sales Tax
Measure* priorities.
Revenues:
Sales and use tax - Measure G 1/2 cent add-on tax 7,504,485$
Use of money and property 56,409
Total revenues 7,560,894
Expenditures:
Current:
Public safety 892,388
Transportation 1,202,100
Culture and recreation 130,818
Community development 252,729
Capital outlay
Public safety 490,828
Transportation 3,438,877
Culture and recreation 424,891
General government 432,386
Total expenditures 7,265,017
Excess of revenues over expenditures 295,877
Other Financing Sources (Uses):
Transfers in 1,658,400
Transfers out (1,788,400)
Total other financing sources (uses)(130,000)
Net change in fund balance 165,877
Fund balance, beginning of year 5,901,482
Fund balance, end of year 6,067,359$
* 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.
113
City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2018
The City maintains the following nonmajor governmental funds:
Special Revenue Funds
The City has established the following ten special revenue funds in order to account for the proceeds from revenue sources
that are restricted or committed to expenditures for specified purposes. Budgets are prepared using the modified accrual
basis of accounting consistent with U.S. generally accepted accounting principles.
Downtown Business Improvement District (BID) Fund. This fund has been established to account for the receipt of a
surcharge derived from a supplemental assessment upon businesses within the Downtown Business Improvement
District’s boundaries. Pursuant to the provisions of the Municipal Code, this surcharge is equal to $150.00 per year.
Expenditures from the fund are limited to four basic purposes: decorating public places within the downtown; promoting
public events in the downtown core; promoting trade activities; and improving parking in the downtown core.
Transportation Development Act (TDA) Fund. The State of California has designated 1/4% of the sales tax levied
statewide for local transportation purposes. Funding for this program was provided during the 1971 legislative session
with the enactment of the Transportation Development Act, which extended the State sales tax to include purchases of
gasoline. Revenues allocated to the City of San Luis Obispo under this program are divided into two categories: Article
3 funds, which are restricted for the improvement and maintenance of street systems including pedestrian and bicycle
facilities; and Article 4 funds, which are restricted for public transit systems and are recorded directly in the Transit Fund.
Under the City's Financial Plan policies, all TDA Article 3 revenues are allocated for alternative transportation purposes.
The purpose of this fund is to account for these revenues.
Tourism Business Improvement District (BID) Fund. This fund has been established to account for the receipt of a
surcharge derived from assessments upon the lodging establishments within the City. The surcharge is equal to 2% of
gross room rents. Expenditures from the fund are limited to the marketing and promotion of tourism.
Gas Tax Fund. Portions of the tax rate per gallon levied by the State of California on all gasoline purchases are allocated
to cities throughout the State on a population basis. These funds are restricted for expenditures by the State of California
for street-related purposes only. Under the City's Financial Plan policies, all gas tax revenues are transferred to the General
Fund for street maintenance purposes.
Community Development Block Grant (CDBG) Fund. This fund has been established to account for federal funds
received by the City specifically to benefit low and moderate income persons, aid in the elimination of blight, and meet
other community development needs as allowed by block grant regulations.
Law Enforcement Grants Fund. This fund has been established to account for public safety grant funds.
Public Arts Contribution Fund. Public contributions to the public art program are accounted for in this fund along with
the expenditures for public art projects funded by this revenue source.
114
City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2018
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.
SB1 Road Repair Fund. This fund has been established to account for stable and ongoing funding for maintenance and
improvements to transportation infrastructure as provided through Senate Bill 1 (2017), the Road Repair and
Accountability Act.
SB1186 ASP Certify Fund. This fund has been established as Senate Bill 1186 (2012) requires local agencies to collect
an additional fee when issuing a permit for the purpose of increasing certified access specialist (CASp) services and
compliance with construction-related accessibility requirements. The first priority is to spend the funds on the training
and retention of CASps in order to meet the needs of the public in the jurisdiction. The funds may also be spent on
activities or programs that facilitate accessibility compliance.
Capital Projects Funds
The following eleven capital project funds are used by the City to account for the financial resources used in the
construction or acquisition of major capital facilities or equipment (with the exception of those financed primarily through
proprietary funds). Budgets are prepared using the modified accrual basis of accounting consistent with U.S. generally
accepted accounting principles on a multi-year project basis. Accordingly, budgetary comparisons for the capital projects
funds are not presented in the accompanying other supplementary information.
Capital Outlay Fund. This fund was established to account for all of the City’s construction projects and capital purchases
in excess of $25,000 with the exception of those funded through non-major capital project funds and Enterprise Funds.
Financing is provided primarily through transfers in from the General Fund, and from State and Federal Grants.
Parkland Development Fund. This fund was established to account for construction projects related to park acquisition
and development that will be financed primarily with park in-lieu fees.
Open Space Protection Fund. This fund was established to account for projects funded as part of the City’s open space
protection program to enhance open space and agricultural conservation on lands within and surrounding the City,
improve passive recreational and nature study opportunities, and restore and enhance wildlife habitat. Projects in this
fund will be financed with General Fund contributions, outside contributions, and State and Federal grants.
Airport Area Impact Fee Fund. This fund was established to account for interim annexation fees collected for the specific
plan and related infrastructure master plans for annexing the airport area to the City.
Los Osos Valley Road (LOVR) Sub-Area Fee Fund. This fund was established to account for sub-area impact fees
collected from development activity in the Los Osos Valley Road sub-area boundary.
115
City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2018
Page 3
Waste Water Impact Fee Fund. This fund was established to account for the collection of development impact fees
collected from the Tank Farm Road, Irish Hills, and Silver City sub-areas.
Fleet Replacement Fund. This fund was established to account for the financing and replacement of vehicles for all
General Fund programs of the City. Financing is primarily provided through operating transfers from the General Fund
as well as from interest earnings and sales of surplus property.
Information Technology Replacement Fund. This fund was established in FY 12-13 to account for the financing and
replacement of information technology for all General Fund programs of the City. Financing is primarily provided
through operating transfers from the General Fund as well as from interest earnings.
Affordable Housing Program. This fund accumulates revenues from inclusionary housing fees for capital projects related
to affordable housing programs and projects.
Transportation Impact Fee Fund. This fund was established to account for construction projects that will be financed
primarily with transportation impact fees.
Infrastructure Fund. This fund was established to provide financing to infrastructure projects that have a wide
community benefit. Financing is primarily provided through operating transfers from the General Fund.
Debt Service Fund
The City has established one debt service fund to account for the payment and accumulation of resources related to
governmental activities long-term debt principal and interest for the following debt issues. Budgets are prepared using
the modified accrual basis of accounting consistent with U.S. generally accepted accounting principles. The following
governmental activity debt issuances are serviced by this fund.
2010 Fire Engine/Truck Lease-Purchase Financing. Lease-purchase financing was obtained in order to purchase a fire
apparatus with 100-foot ladder. Debt service obligations are recorded in the Debt Service Fund.
Capital Improvement Board 2012 Refunding Lease Revenue Bonds. On May 24, 2012 the Board issued $5,050,000 of
2012 Lease Revenue Refunding Bonds. These bonds were issued to refinance the outstanding 2001 Lease Revenue
Bonds, Series C, which will be redeemed on December 1, 2029. The 2001 bonds were used to purchase property and
build athletic fields; purchase property for police station expansion; purchase Downtown Plan properties.
The Board has entered into a lease agreement with the City under which the City is responsible for making lease payments
to fund the annual debt service requirements.
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.
116
City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2018
Page 4
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.
2018 Street Sweeper. Lease-purchase financing was obtained in order to purchase a street sweeper. Debt service
obligations are recorded in the Debt Service Fund.
Capital Improvement Board 2018 Lease Revenue Bonds. In 2018 the Board issued $11,072,775 of 2018 Lease Revenue
Refunding Bonds. These bonds were issued to refinance the outstanding 2005 Revenue Bonds, 2006 Lease Revenue
Bonds, and 2009 Lease Revenue Bonds. The original bonds were used to accomplish several high priority capital
improvement projects including the headquarters fire station, seismic safety and HVAC improvements to City Hall,
Mission Plaza expansion, and various properties and street lighting system purchases. Further, the bonds were used to
purchase a parking structure and office building and to the finance the construction of the Public Safety Communications
and Emergency Operations Center project.
The Board has entered into a lease agreement with the City under which the City is responsible for making lease payments
to fund the annual debt service requirements.
117
City of San Luis Obispo, California
Combining Balance Sheet
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2018
Downtown
BID
Transportation
Development
Act (TDA)Tourism BID Gas Tax
Assets
Cash and cash equivalents $ $ 35,114$ $
Investments 402,890
Accounts receivable 187,829
Accrued interest receivable 1,460
Prepaid expense
Cash held by fiscal agent
Total assets -$ -$ 627,293$ -$
Liabilities and Fund Balance
Liabilities:
Accounts payable 77,329$ $ 208,707$ $
Accrued liabilities 1,290
Due to other funds
Unearned revenue
Total liabilities 77,329 - 209,997 -
Fund balance:
Unspendable (77,329)
Restricted for:
Debt service
Law enforcement grant programs
Committed to:
Affordable housing programs
Impact fee programs
Open space programs
Parkland development programs
Public art programs
Assigned to:
Contingency fund
Subsequent years expenditures 417,296
Total fund balance (77,329) - 417,296 -
Total liabilities and fund balance -$ -$ 627,293$ -$
Special Revenue Funds
118
Community
Development
Block Grant
(CDBG)
Law
Enforcement
Grants
Public Art
Contributions Insurance
SB1 Road
Repair
SB1186 CASP
Certify
63,950$ $ 41,746$ 1,778,009$ 18,314$ 57$
478,976 210,129 653
105,000 43,148 58,401
2,019 1,542 743 3
168,950$ 43,148$ 522,741$ 1,779,551$ 287,587$ 713$
33,175$ 39,912$ 2,856$ $ $ $
163
33,175 40,075 2,856 - - -
3,073
519,885
135,775 1,779,551 287,587 713
135,775 3,073 519,885 1,779,551 287,587 713
168,950$ 43,148$ 522,741$ 1,779,551$ 287,587$ 713$
Special Revenue Funds
119
City of San Luis Obispo, California
Combining Balance Sheet
Nonmajor Governmental Funds, continued
For the Fiscal Year Ended June 30, 2018
Page 2
Assets
Cash and cash equivalents
Investments
Accounts receivable
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
Public art 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
490,844$ 188,929$ 47,532$ 89,533$ 22,153$
932,758 2,167,685 545,367 1,027,257 254,176
520,132
6,495 9,363 2,357 4,439 1,097
1,950,229$ 2,365,977$ 595,256$ 1,121,229$ 277,426$
105,430$ 2,630$ $ $ 179,906$
114,970
220,400 2,630 - - 179,906
1,729,829
1,121,229 97,520
595,256
2,363,347
1,729,829 2,363,347 595,256 1,121,229 97,520
1,950,229$ 2,365,977$ 595,256$ 1,121,229$ 277,426$
Capital Projects Funds
120
Waste Water
Impact Fee
Fleet
Replacement
Info Tech
Replacement
Affordable
Housing
Transportation
Impact Fee Infrastructure Debt Service
22,549$ 61,455$ 227,905$ 179,315$ 560,535$ 316,711$ 1,386,149$
258,716 705,098 2,614,875 2,057,379 6,431,301
24,056
3,970 11,681 8,106 28,113 1,259
5,642
418,881
281,265$ 770,523$ 2,854,461$ 2,244,800$ 7,019,949$ 317,970$ 1,834,728$
$ 1,312$ 82,374$ $ 146,104$ $ 116,703$
59,274
- 1,312 82,374 - 146,104 - 175,977
5,642
1,653,109
2,244,800
6,873,845
500,000 400,000
281,265 269,211 2,372,087 317,970
281,265 769,211 2,772,087 2,244,800 6,873,845 317,970 1,658,751
281,265$ 770,523$ 2,854,461$ 2,244,800$ 7,019,949$ 317,970$ 1,834,728$
Capital Projects Funds
121
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, 2018
Downtown
BID
Transportation
Development
Act (TDA)Tourism BID Gas Tax
Revenues:
Use of money and property $ $ 4,547$ $
Subventions and grants 39,781 967,495
Charges for services 260,449 1,492,434
Other revenues 1,600
Total revenues 260,449 39,781 1,498,581 967,495
Expenditures:
Current:
General government
Public safety
Transportation
Leisure, cultural and social services
Community development 332,321 1,476,850
Debt service:
Principal
Interest and fiscal charges
Capital:
General government
Public safety
Transportation
Leisure, cultural and social services
Community development
Total expenditures 332,321 - 1,476,850 -
Excess (deficiency) of revenues over
(under) expenditures (71,872) 39,781 21,731 967,495
Other financing sources (uses):
Transfers in
Transfers out (39,781) (33,868) (967,495)
Total other financing
sources (uses)- (39,781) (33,868) (967,495)
Net change in fund balance (71,872) - (12,137) -
Fund balance, beginning of year (5,457) - 429,433 -
Fund balance (deficit), end of year (77,329)$ -$ 417,296$ -$
Special Revenue Funds
122
Community
Development
Block Grant
(CDBG)
Law
Enforcement
Grants
Public Art
Contributions Insurance
SB1 Road
Repair
SB1186 ASP
Certify
$ $ 5,475$ 10,519$ 1,318$ 6$
87,019 104,253
355 70,575 286,269 707
1,803
88,822 104,608 76,050 10,519 287,587 713
108,521
25,043
128,633
105,000
233,633 108,521 25,043 - - -
(144,811) (3,913) 51,007 10,519 287,587 713
154,000 750,000
(13,800)
154,000 (13,800) - 750,000 - -
9,189 (17,713) 51,007 760,519 287,587 713
126,586 20,786 468,878 1,019,032 - -
135,775$ 3,073$ 519,885$ 1,779,551$ 287,587$ 713$
Special Revenue Funds
123
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, 2018
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 and fiscal charges
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):
Transfers in
Transfers out
Total other financing
sources (uses)
Net change in fund balance
Fund balance, beginning of year
Fund balance (deficit), end of year
Capital
Outlay
Parkland
Development
Open
Space
Protection
Airport Area
Impact Fee
LOVR Sub-
Area Fee
9,551$ 24,617$ 6,513$ 12,259$ 3,091$
890,182
455,918
52,667
952,400 480,535 6,513 12,259 3,091
221,615
39,744
17,338
810,648 1,230
8,884
465,919
364,305
4,382,586 34,518
473,110 215,963
420,105
7,204,254 217,193 - - 34,518
(6,251,854) 263,342 6,513 12,259 (31,427)
5,978,251
(483,900) (160,000)
5,494,351 (160,000) - - -
(757,503) 103,342 6,513 12,259 (31,427)
2,487,332 2,260,005 588,743 1,108,970 128,947
1,729,829$ 2,363,347$ 595,256$ 1,121,229$ 97,520$
Capital Projects Funds
124
Waste Water
Impact
Fleet
Replacement
Info Tech
Replacement
Affordable
Housing
Transportation
Impact Fee Infrastructure Debt Service
Total Nonmajor
Governmental
Funds
1,723$ 12,299$ 33,179$ 6,051$ (5,650)$ 3,509$ 9,207$ 138,214$
75,177 2,163,907
129,336 84,226 446,572 1,230,254 4,457,095
45,480 101,550
131,059 57,779 117,405 527,800 1,224,604 3,509 9,207 6,860,766
10,690 232,305
2,952 151,217
17,338
836,921
393 850,000 32 2,797,113
1,019,777 1,019,777
1,517,605 1,517,605
62,456 664,049 1,192,424
142,186 506,491
344,117 1,657,916 6,419,137
292,695 981,768
- 525,105
- 844,799 664,049 850,000 1,657,916 32 2,548,072 16,197,201
131,059 (787,020) (546,644) (322,200) (433,312) 3,477 (2,538,865) (9,336,435)
779,347 687,535 3,865,767 12,214,900
(768,000) (536,500) (250,000) (1,793,404) (5,046,748)
- 11,347 151,035 - (250,000) - 2,072,363 7,168,152
131,059 (775,673) (395,609) (322,200) (683,312) 3,477 (466,502) (2,168,283)
150,206 1,544,884 3,167,696 2,567,000 7,557,157 314,493 2,125,253 26,059,944
281,265$ 769,211$ 2,772,087$ 2,244,800$ 6,873,845$ 317,970$ 1,658,751$ 23,891,661$
Capital Projects Funds
125
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, 2018
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Charges for services
Assessments 227,000$ 227,000$ 260,449$ 33,449$
Total Revenues 227,000 227,000 260,449 33,449
Expenditures:
Current
Community development 227,000 227,000 332,321 105,321
Total Expenditures 227,000 227,000 332,321 105,321
Excess of Revenues Under Expenditures - - (71,872) (71,872)
Net Change in Fund Balance - - (71,872) (71,872)
Fund Balance, Beginning of Year (5,457) (5,457) (5,457) -
Fund Balance, End of Year (5,457)$ (5,457)$ (77,329)$ (71,872)$
Budget
126
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, 2018
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Subventions and grants 45,000$ 45,000$ 39,781$ (5,219)$
Total Revenues 45,000 45,000 39,781 (5,219)
Excess of Revenues Over (Under) Expenditures 45,000 45,000 39,781 (5,219)
Other Financing Uses:
Operating transfers out (45,000) (45,000) (39,781) 5,219
Net Change in Fund Balance - - - -
Fund Balance, Beginning of Year - - - -
Fund Balance, End of Year -$ -$ -$ -$
Budget
127
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, 2018
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property 1,400$ 1,400$ 4,547$ 3,147$
Assessments 1,464,387 1,464,387 1,492,434 28,047
Other revenues - 1,600 1,600
Total Revenues 1,465,787 1,465,787 1,498,581 32,794
Expenditures:
Current
Community development 1,340,344 1,852,002 1,476,850 (375,152)
Total Expenditures 1,340,344 1,852,002 1,476,850 (375,152)
Excess of Revenues Over (Under) Expenditures 125,443 (386,215) 21,731 407,946
Other Financing Uses:
Operating transfers out (28,679) (28,679) (33,868) (5,189)
Net Change in Fund Balance 96,764 (414,894) (12,137) 402,757
Fund Balance, Beginning of Year 429,433 429,433 429,433 -
Fund Balance, End of Year 526,197$ 14,539$ 417,296$ 402,757$
Budget
128
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, 2018
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Subventions and grants 965,000$ 965,000$ 967,495$ 2,495$
Total Revenues 965,000 965,000 967,495 2,495
Excess of Revenues Over Expenditures 965,000 965,000 967,495 2,495
Other Financing Uses:
Operating transfers out (965,000) (965,000) (967,495) (2,495)
Net Change in Fund Balance - - - -
Fund Balance, Beginning of Year - - - -
Fund Balance, End of Year -$ -$ -$ -$
Budget
129
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, 2018
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Subventions and grants 232,623$ 232,623$ 87,019$ (145,604)$
Other revenues 1,803 1,803
Total Revenues 232,623 232,623 88,822 (143,801)
Expenditures:
Current
Community development 192,409 192,409 233,633 41,224
Transportation 105,000 210,000 (210,000)
Total Expenditures 297,409 402,409 233,633 (168,776)
Excess of Revenues Over (Under) Expenditures (64,786) (169,786) (144,811) 24,975
Other Financing Uses:
Operating transfers in 154,000 154,000 154,000 -
Net Change in Fund Balance 89,214 (15,786) 9,189 24,975
Fund Balance, Beginning of Year 126,586 126,586 126,586 -
Fund Balance, End of Year 215,800$ 110,800$ 135,775$ 24,975$
Budget
130
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, 2018
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Subventions and grants 81,345$ 100,000$ 104,253$ 4,253$
Charges for services 15,910 355 (15,555)
Total Revenues 81,345 115,910 104,608 (11,302)
Expenditures:
Public Safety 169,048 108,521 (60,527)
Capital Projects 69,607 (69,607)
Total Expenditures - 238,655 108,521 (130,134)
Excess of Revenues Over (Under) Expenditures 81,345 (122,745) (3,913) 118,832
Other Financing Uses:
Operating transfers out - (13,800) (13,800)-
Net Change in Fund Balance 81,345 (136,545) (17,713) 118,832
Fund Balance, Beginning of Year 20,786 20,786 20,786 -
Fund Balance, End of Year 102,131$ (115,759)$ 3,073$ 118,832$
Budget
131
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, 2018
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property 2,100$ 2,100$ 5,475$ 3,375$
Other revenues 35,500 35,500 70,575 35,075
Total Revenues 37,600 37,600 76,050 38,450
Expenditures:
Leisure, cultural and social services 25,043 25,043
Capital Projects 49,700 135,097 (135,097)
Total Expenditures 49,700 135,097 25,043 (110,054)
Excess of Revenues Over (Under) Expenditures (12,100) (97,497) 51,007 148,504
Net Change in Fund Balance (12,100) (97,497) 51,007 148,504
Fund Balance, Beginning of Year 468,878 468,878 468,878 -
Fund Balance, End of Year 456,778$ 371,381$ 519,885$ 148,504$
Budget
132
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual
Insurance Fund
For the Fiscal Year Ended June 30, 2018
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property $ -$ 10,519$ 10,519$
Total Revenues - - 10,519 10,519
Excess of Revenues Over Expenditures - - 10,519 10,519
Other Financing Uses:
Operating transfers in 500,000 500,000 750,000 250,000
Net Change in Fund Balance 500,000 500,000 760,519 260,519
Fund Balance, Beginning of Year 1,019,032 1,019,032 1,019,032 -
Fund Balance, End of Year 1,519,032$ 1,519,032$ 1,779,551$ 260,519$
Budget
133
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual
SB1 Road Repair Fund
For the Fiscal Year Ended June 30, 2018
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property $ $ 1,318$ 1,318$
Charges for services - 313,300 286,269 (27,031)
Total Revenues - 313,300 287,587 (25,713)
Excess of Revenues Over (Under) Expenditures - 313,300 287,587 (25,713)
Net Change in Fund Balance - 313,300 287,587 (25,713)
Fund Balance, Beginning of Year - - - -
Fund Balance, End of Year -$ 313,300$ 287,587$ (25,713)$
Budget
134
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual
Debt Service Fund
For the Fiscal Year Ended June 30, 2018
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Use of money and property $ $ 9,207$ 9,207$
Total Revenues - - 9,207 9,207
Expenditures:
General government 10,690 10,690
Principal 2,207,262 2,207,262 1,019,777 (1,187,485)
Interest and fiscal charges 1,167,495 1,167,495 1,517,605 350,110
Total Expenditures 3,374,757 3,374,757 2,548,072 (826,685)
Excess of Revenues Over (Under) Expenditures (3,374,757) (3,374,757) (2,538,865) 835,892
Other Financing Uses:
Operating transfers in 3,374,757 3,374,757 3,865,767 491,010
Opearting transfers out (1,793,404) (1,793,404)
Total Other Financing Uses 3,374,757 3,374,757 2,072,363 (1,302,394)
Net Change in Fund Balance - - (466,502) (466,502)
Fund Balance, Beginning of Year 2,125,253 2,125,253 2,125,253 -
Fund Balance, End of Year 2,125,253$2,125,253$1,658,751$(466,502)$
Budget
135
City of San Luis Obispo, California
Agency Funds
For the Fiscal Year Ended June 30, 2018
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.
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.
136
City of San Luis Obispo, California
Combining Statement of Changes in Assets and Liabilities
Agency Funds
For the Fiscal Year Ended June 30, 2018
Balance Balance
June 30, 2017 Additions Deductions June 30, 2018
Whale Rock Fund
Assets
Cash and cash equivalents 38,124$ 1,445,305$ 1,340,993$ 142,436$
Investments 1,687,073 182,519 1,869,592
Accounts receivable 18,102 781,396 768,055 31,443
Accrued interest receivable 5,609 7,945 5,609 7,945
Prepaid expense 4,200 6,100 4,200 6,100
Deferred outflows of resources - pensions 265,920 9,465 256,455
Deferred outflows of resources - OPEB 11,764 11,764
Capital assets, net of
accumulated depreciation 1,058,352 251,549 121,143 1,188,758
Total Assets 3,077,380$ 2,686,578$ 2,249,465$ 3,514,493$
Liabilities
Accounts payable 57,467$ 595,008$ 622,854$ 29,621$
Accrued salaries 28,926 14,524 2,569 40,881
Other liabilities 22,213 5,207 17,006
Net pension liability 1,211,508 166,462 1,377,970
Net OPEB liability 127,770 127,770
Deferred inflows of resources - pensions 111,456 104,993 6,463
Deferred inflows of resources - OPEB 2,504 2,504
Due to agency participants 1,645,810 488,834 222,366 1,912,278
Total Liabilities 3,077,380$ 1,395,102$ 957,989$ 3,514,493$
Balance Balance
June 30, 2017 Additions Deductions June 30, 2018
Jack House Fund
Assets
Cash and cash equivalents 15,895$ 1,551$ 178$ 17,268$
Accrued interest receivable 47 68 47 68
Total Assets 15,942$ 1,619$ 225$ 17,336$
Liabilities
Accounts payable 6$ 29$ 35$ -$
Other liabilities 15,936 1,573 173 17,336
Total Liabilities 15,942$ 1,602$ 208$ 17,336$
137
City of San Luis Obispo, California
Combining Statement of Changes in Assets and Liabilities
Agency Funds, continued
For the Fiscal Year Ended June 30, 2018
Page 2
Balance Balance
June 30, 2017 Additions Deductions June 30, 2018
Bomb Task Force Fund
Assets
Cash and cash equivalents 300,942$ 909$ 301,851$ -$
Accrued interest receivable 909 909 -
Total Assets 301,851$ 909$ 302,760$ -$
Liabilities
Accounts payable 300,769$ 1,081$ 301,850$ -$
Due to agency participants 1,082 89,479 90,561 -
Total Liabilities 301,851$ 90,560$ 392,411$ -$
Balance Balance
June 30, 2017 Additions Deductions June 30, 2018
Hazardous Materials Task Force Fund
Assets
Cash and cash equivalents 104,981$ 66,971$ 46,173$ 125,779$
Accrued interest receivable 328 537 328 537
Total Assets 105,309$ 67,508$ 46,501$ 126,316$
Liabilities
Accounts payable 4,306$ 29,083$ 32,572$ 817$
Accrued salaries 62$ 122 62 122
Due to agency participants 100,941 98,032 73,596 125,377
Total Liabilities 105,309$ 127,237$ 106,230$ 126,316$
Balance Balance
June 30, 2017 Additions Deductions June 30, 2018
General Agency Fund
Assets
Cash and cash equivalents 1,402,807$ 1,265,517$ 1,123,826$ 1,544,498$
Other assets 30,864 30,864
Total Assets 1,433,671$ 1,265,517$ 1,123,826$ 1,575,362$
Liabilities
Accounts payable 106,647$ 1,009,625$ 1,001,666$ 114,606$
Other liabilities 1,327,024 1,272,720 1,138,988 1,460,756
Total Liabilities 1,433,671$ 2,282,345$ 2,140,654$ 1,575,362$
138
City of San Luis Obispo, California
Combining Statement of Changes in Assets and Liabilities
Agency Funds, continued
For the Fiscal Year Ended June 30, 2018
Page 3
Balance Balance
June 30, 2017 Additions Deductions June 30, 2018
Duvall Fund
Assets
Cash and cash equivalents 159,286$ 1,884$ 277$ 160,893$
Accrued interest receivable 480 640 481 639
Total Assets 159,766$ 2,524$ 758$ 161,532$
Liabilities
Other liabilities 159,766$ 2,043$ 277$ 161,532$
Total Liabilities 159,766$ 2,043$ 277$ 161,532$
Balance Balance
June 30, 2017 Additions Deductions June 30, 2018
Boysen Ranch Conservation Easement
Assets
Cash and cash equivalents 398,505$ 4,711$ 942$ 402,274$
Accrued interest receivable 1,202 1,599 1,202 1,599
Total Assets 399,707$ 6,310$ 2,144$ 403,873$
Liabilities
Accounts payable 24,567$ 250$ 250$ 24,567$
Other liabilities 375,140 21,858 17,692 379,306
Total Liabilities 399,707$ 22,108$ 17,942$ 403,873
Balance Balance
June 30, 2017 Additions Deductions June 30, 2018
PEG - City of San Luis Obispo
Assets
Cash and cash equivalents 179,345$ 51,222$ 12,381$ 218,186$
Accounts receivable - 10,606 10,606
Accrued interest receivable 488 849 488 849
Total Assets 179,833$ 62,677$ 12,869$ 229,641$
Liabilities
Accounts payable $ 21,085$ 12,018$ 9,067$
Other liabilities 179,833 62,188 21,447 220,574
Total Liabilities 179,833$ 83,273$ 33,465$ 229,641$
139
City of San Luis Obispo, California
Combining Statement of Changes in Assets and Liabilities
Agency Funds, continued
For the Fiscal Year Ended June 30, 2018
Page 4
Balance Balance
June 30, 2017 Additions Deductions June 30, 2018
PEG - SLCUSD
Assets
Cash and cash equivalents 269,177$ 32,237$ 32,747$ 268,667$
Accounts receivable - 10,606 10,606
Accrued interest receivable 763 1,068 763 1,068
Total Assets 269,940$ 43,911$ 33,510$ 280,341$
Liabilities
Other liabilities 269,940$ 43,148$ 32,747$ 280,341$
Total Liabilities 269,940$ 43,148$ 32,747$ 280,341$
Balance Balance
June 30, 2017 Additions Deductions June 30, 2018
Totals - All Agency Funds
Assets
Cash and cash equivalents 2,869,062$ 2,870,307$ 2,859,368$ 2,880,001$
Investments 1,687,073 182,519 1,869,592
Accounts receivable 18,102 802,608 768,055 52,655
Accrued interest receivable 9,826 12,706 9,827 12,705
Other assets 35,064 6,100 4,200 36,964
Deferred outflows of resources 265,920 11,764 9,465 268,219
Capital assets, net of
accumulated depreciation 1,058,352 251,549 121,143 1,188,758
Total Assets 5,943,399$ 4,137,553$ 3,772,058$ 6,308,894$
Liabilities
Accounts payable 493,762$ 1,656,161$ 1,971,245$ 178,678$
Accrued salaries 28,988 14,646 2,631 41,003
Other liabilities 2,349,852 1,403,530 1,216,531 2,536,851
Net pension liability 1,211,508 166,462 1,377,970
Net OPEB liability - 127,770 127,770
Deferred inflows of resources 111,456 2,504 104,993 8,967
Due to agency participants 1,747,833 676,345 386,523 2,037,655
Total Liabilities 5,943,399$ 4,047,418$ 3,681,923$ 6,308,894$
STATISTICAL SECTION (UNAUDITED)
141
City of San Luis Obispo, California
Statistical Section Overview
June 30, 2018
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.
142 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 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-172017-18Governmental activities: Net investment in capital assets 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$ 171,472,251$ Restricted 2,510,500 2,569,800 2,543,800 2,620,700 2,374,800 4,825,662 2,350,838 2,762,387 2,268,499 421,954 Unrestricted 38,928,500 26,204,500 26,401,500 23,583,000 29,927,200 (66,610,104) (57,421,778) (49,031,893) (41,514,301) (49,909,657) Total governmental activities net position 160,864,100$ 158,191,100$ 162,091,100$ 167,890,300$ 174,541,500$ 83,481,601$ 95,359,286$ 117,180,486$ 125,854,624$ 121,984,548$ Business-type activities: Net investment in capital assets 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$ 136,694,402$ Restricted 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 1,558,795 Unrestricted 31,329,500 38,245,900 36,493,600 37,759,000 41,712,200 35,224,987 42,117,143 49,495,220 52,714,457 50,866,147 Total business-type activities net position 144,924,000$ 153,405,400$ 156,585,400$ 160,010,500$ 167,476,600$ 156,590,269$ 170,180,201$ 180,164,223$ 186,140,499$ 189,119,344$ Primary government (City wide totals): Net investment in capital assets 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$ 308,166,653$ Restricted 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 1,980,749 Unrestricted 70,258,000 64,450,400 62,895,100 61,342,000 71,639,400 (31,385,117) (15,304,635) 463,327 11,200,156 956,490 Total primary government net position 305,788,100$ 311,596,500$ 318,676,500$ 327,900,800$ 342,018,100$ 240,071,870$ 265,539,487$ 297,344,709$ 311,995,123$ 311,103,892$
143 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 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-172017-18Expenses:Governmental activities:Public safety29,330,300$ 27,687,200$ 26,774,800$ 27,993,900$ 28,859,200$ 29,651,702$ 26,881,732$ 29,318,821$ 31,806,692$ 42,097,557$ Transportation 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 9,229,042 Leisure, cultural and social services 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 11,125,792 Community development8,233,600 11,020,400 8,166,300 8,782,200 8,866,900 10,183,782 10,960,778 12,900,275 14,656,604 13,457,993 Interest on long-term debt951,500 1,348,100 1,248,400 1,198,000 1,217,200 1,221,205 1,015,011 1,351,468 1,170,984 1,488,183 Total governmental activities expenses 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 77,398,567 Business-type activities:Water11,532,900 11,323,200 16,106,300 17,455,200 17,019,000 17,575,961 17,128,041 18,136,120 19,069,967 19,523,736 Sewer9,250,200 9,153,200 9,633,900 9,530,400 10,189,400 10,647,255 10,132,214 10,842,451 11,683,262 14,158,612 Parking 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 4,098,840 Transit3,199,200 3,295,500 3,409,700 3,778,900 3,903,900 4,059,138 3,994,194 4,088,423 4,076,871 4,355,103 Golf 722,100 708,400 724,100 - - - - - - - Total business-type activities expenses 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 42,136,291 Total primary government expenses 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$ 119,534,858$ Program Revenues:Governmental activities:Charges for services:Public safety1,508,600$ 1,501,500$ 1,745,200$ 1,750,700$ 1,599,000$ 1,589,278$ 1,697,748$ 1,673,800$ 1,771,383$ 1,881,725$ Transportation 1,492,800 241,700 2,690,200 418,000 221,200 1,321,323 1,270,787 1,691,757 1,793,010 1,669,563 Leisure, cultural and social services 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 3,487,225 Community development3,107,400 2,917,700 3,166,200 4,563,200 4,126,400 4,981,211 7,210,132 7,974,880 8,144,128 7,355,831 Operating grants and contributions 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 4,015,502 Capital grants and contributions 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 39,781 Total governmental activities program revenues 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 18,449,627
144 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 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-172017-18 Business-type activities:Charges for services:Water 13,836,000$ 13,812,100$ 14,298,100$ 16,753,100$ 18,148,200$ 19,755,909$ 20,446,730$ 19,884,850$ 19,766,876$ 22,202,069$ Sewer 11,785,200 13,225,100 13,320,400 14,789,700 16,212,000 17,151,212 18,007,064 16,460,140 15,979,943 16,753,094 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 5,226,780 Transit 607,000 551,600 593,100 552,900 682,700 688,585 649,899 659,471 666,296 703,451 Golf 382,200 394,600 364,000 - - - - - - - Operating grants and contributions 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 3,099,618 Capital grants and contributions 1,627,300 952,300 1,242,000 750,900 731,300 82,359 60,063 - - - Total business-type activities programs revenues 33,938,000 34,782,000 35,603,000 38,882,400 43,141,100 44,135,435 47,217,901 47,302,010 45,260,471 47,985,012 Total primary government program revenues 50,508,500$ 45,746,400$ 49,577,600$ 51,623,000$ 55,821,100$ 61,168,430$ 69,973,169$ 72,713,992$ 63,000,066$ 66,434,639$ Net Revenues (Expenses):Governmental activities (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)$ (58,948,940)$ Business-type activities 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 5,848,721 Total primary government(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)$ (53,100,219)$ General Revenues and Other Changes in Net Position:Governmental activities:Sales and use taxes 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$ 24,559,570$ Property taxes 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 11,425,510 Transient occupancy tax 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 7,514,289 Utility users tax 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 5,627,356 Property tax in-lieu of vehicle license fees 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 4,637,253 Other taxes and fees 4,317,900 4,226,800 4,149,900 4,299,800 4,607,600 4,779,570 4,993,285 4,800,592 3,911,917 5,006,594 Investment earnings 1,775,300 1,239,500 742,500 770,100 237,100 566,931 467,348 825,760 997,995 164,434 Miscellaneous and other400,800 339,600 414,700 227,200 349,900 679,127 707,781 - - - Special item - sale of land- - - - - - - - - - Gain (loss) on disposal of capital assets (3,400) (11,000) - - - - - Prior period adjustment2,657,100 (833,234) - - - - Cumulative change in accounting principle (GASB 65)(345,400) - - - Transfers (335,000) (301,500) (227,200) 1,820,900 115,100 (73,771) (329,452) 1,436,048 1,051,563 1,198,027 Total governmental activities 45,202,200 42,980,300 44,223,500 48,311,000 51,544,700 51,313,072 53,746,122 58,580,355 58,061,925 60,133,033
145 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 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-172017-18 Business-type activitiesInvestment earnings 1,699,600$ 1,372,500$ 725,300$ 726,100$ 73,500$ 364,551$ 361,627$ 845,906$ 182,261$ 320,471$ Cumulative change in accounting principle(842,600) Income from investment in joint venture239,200 206,700 209,300 Transfers 335,000 301,500 227,200 (1,820,900) (115,100) 73,771 329,452 (1,436,048) (1,051,563) (1,198,027) Total business-type activities 2,034,600 1,674,000 952,500 (1,094,800) (884,200) 438,322 691,079 (350,942) (662,602) (668,256) Total primary government47,236,800$ 44,654,300$ 45,176,000$ 47,216,200$ 50,660,500$ 51,751,394$ 54,437,201$ 58,229,413$ 57,399,323$ 59,464,777$ Change in net position:Governmental activities 6,859,100$ (2,673,000)$ 3,900,000$ 5,799,200$ 6,651,200$ 8,074,478$ 15,853,818$ 21,821,200$ 8,674,138$ 1,184,093$ Business-type activities 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 5,180,465 Total primary government14,422,600$ 5,808,400$ 7,080,000$ 9,224,300$ 14,117,200$ 16,729,274$ 28,951,712$ 31,805,222$ 15,357,059$ 6,364,558$
146
Schedule 3
City of San Luis Obispo, California
Governmental Activities Tax and Franchise Revenues by Source
Last Ten Fiscal Years
(Accrual Basis of Accounting)
For the Fiscal Year Ended June 30
Fiscal Sales Measure Y Property Transient Utility Property Franchise Business Other
Year and Use 1/2 cent (Note 1)Occupancy Users in-lieu of VLF Fees Tax Taxes Total
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
2017-18 17,055,085 7,504,485 11,425,510 7,514,289 5,627,356 4,637,253 1,597,655 2,663,686 745,253 58,770,572
Notes:
1. Property tax revenues are presented net of SB2557 County administrative fees (approximately 3% of total property tax revenues).
The City has elected to receive its property tax revenues based on the Teeter Plan method of collection whereby the
County remits 100% of taxes levied, pursues collection and retains any delinquent taxes and related penalties and interest.
2. In November 2014 voters in San Luis Obispo reauthorized the local Half -percent sales and use tax measure (Measure G) .
147
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
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
General fund:
Reserved 291,500$ 201,800$ $ $ $ $ $ $ $ $
Unreserved:
Designated 125,000 923,500
Undesignated 13,575,400 9,988,800
Nonspendable:
Prepaid items 2,777,000 3,191,055 60,181 56,020 3,173,248 3,520,473
Restricted for: (Note 1)
Debt service 258,100 602,800 331,600 312,037 303,126 489,056 128,102 159,724
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 8,693,113
Assigned to:
Contingency Fund 10,458,000 10,486,931 11,092,782 10,902,368 10,171,464
Development Services 1,848,386 382,396 41,110 596,796
Safety Fire 97,239
City Attorney 100,000 100,000
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 6,334,870
Total general fund 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 29,576,440
148
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
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
All other governmental funds:
Reserved 10,038,200$ 6,932,600$ $ $ $ $ $ $ $ $
Unreserved reported in:
Capital projects funds 19,748,900 1,245,000
Special revenue funds 626,900 920,300
Unspendable 5,642 (71,687)
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 1,653,109
Law enforcement grant programs 42,000 20,500 22,900 27,145 16,886 23,492 20,786 3,073
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 3,974,629
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 8,092,594
Impact Fees Programs 4,350,000 4,069,800 3,542,700 411,592 9,410,273 549,349 8,795,074 595,256
Open space programs 183,400 194,300 1,582,425 983,402 1,265,620 588,743 2,363,347
Parkland development programs 998,900 1,057,100 1,209,600 2,728,883
Contingency fund 519,885
Public art programs 293,700 373,700 347,400
Assigned to:
Contingency fund 900,000 900,000
Subsequent years expenditures 8,997,800 4,359,300 5,413,900 3,552,319 2,606,757 3,559,851 5,846,873 5,861,455
Unassigned (2,500) 1,039 (83)
Total all other governmental
funds 9,097,900 18,605,600 14,544,400 15,352,400 21,353,232 22,476,959 20,498,689 26,059,944 23,891,661
Total all governmental funds 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$ 53,468,101$
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.
149
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
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
Revenues:
Taxes
Sales and Use - general 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$ 17,055,085$
Sales and Use - Measure Y 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 7,504,485
Prop. 172 Public Safety 308,400 257,900 271,300 307,400 327,700 391,567 409,590 405,066 405,512 397,488
Property 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 11,425,510
Transient Occupancy 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 7,514,289
Utility Users 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 5,627,356
Property tax in-lieu of VLF (Note 1)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 4,637,253
Franchise Fees 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 1,597,655
Business Tax 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 2,663,686
Real Property Transfer 159,100 129,000 133,700 144,000 256,300 287,560 298,191 366,088 332,314 347,765
Fines, forfeitures and penalties 261,000 201,700 171,400 174,300 159,700 150,185 184,320 172,353 139,534 199,374
Use of money and property 1,775,300 1,239,500 742,500 770,100 237,100 566,931 467,348 825,760 260,169 164,434
Subventions and grants - - - - - - - - - 4,156,333
Vehicle License Fees (Note 1)166,500 135,000 205,600 45,600 19,300 - - - - -
Other subventions and grants 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 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 14,672,746
Other revenues 1,810,300 398,000 270,500 36,500 526,500 357,469 217,710 242,744 446,456 634,391
Total revenues 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 78,597,850
150
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
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
Expenditures:
Current:
General Government 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$ 12,709,324$
Public safety 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 28,862,906
Transportation 3,224,200 3,019,700 2,901,900 2,865,100 2,798,200 2,882,241 2,969,111 3,317,177 3,780,804 3,565,022
Leisure, cultural and social services 6,598,900 6,279,900 6,268,700 6,704,200 6,790,300 7,155,619 7,250,398 7,428,198 7,712,834 8,571,184
Community development 6,280,800 6,690,200 7,053,500 6,986,300 7,777,400 8,389,957 10,047,272 10,770,827 10,300,894 10,815,667
Debt service:
Principal 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 15,665,904
Interest 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 1,524,180
Debt issuance costs - - 36,000 - - - - - - -
Capital:
Public safety 1,652,700 4,704,400 494,100 447,900 457,700 892,351 2,371,865 1,220,759 1,772,454 506,491
Transportation 6,177,600 4,237,200 6,913,200 9,121,000 5,228,300 4,859,863 14,302,937 15,038,306 4,161,966 6,419,137
Leisure, cultural and social services 1,213,900 1,188,500 584,500 862,000 395,500 1,272,510 2,399,211 1,463,269 1,499,704 981,768
Community development (Note 2)1,382,500 3,893,700 884,100 705,300 70,900 939,017 123,258 149,537 2,078,181 525,105
General government 869,700 3,076,800 1,731,400 274,900 429,700 145,199 1,684,045 590,263 633,682 1,192,424
Total expenditures 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 91,339,112
Excess of revenues
over(under)
expenditures 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 (12,741,262)
151
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
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
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 12,472,698
Cost of debt issuance - - - - (11,500) - - - - -
Payment to refunded bond escrow agent (281,800) - - (5,442,200) - - - - - -
Transfers in 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 19,815,144
Transfers out (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) (18,617,117)
Total other financing
sources(uses)8,450,200 (301,500) 1,246,700 (341,900) 103,600 777,004 8,042,871 2,124,548 2,193,031 13,670,725
Net change in fund
balance 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$ 929,463$
Debt service as a
percentage of noncapital
expenditures 4.93%7.24%7.61%6.68%6.62%5.98%8.92%5.20%5.37%26.64%
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.
152
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
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
Staffing:
Salaries and wages:
Regular salaries 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$ 26,666,447$
Temporary salaries 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 1,711,755
Overtime 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 4,420,756
Benefits:
Retirement 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 10,570,883
Group health/disability ins (Note 1)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 4,638,471
Medicare 363,700 370,300 367,100 371,200 384,400 393,913 408,889 418,704 455,966 469,688
Unemployment Reimbursements 24,100 87,600 35,500 26,200 28,800 31,634 48,588 5,159 150,929 61,972
Total staffing 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 48,539,972
Contract services 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 6,940,018
Other operating expenditures
Communications & utilities 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 2,190,695
Rents & leases 147,700 130,500 141,800 136,800 139,600 197,104 159,718 164,729 170,288 171,909
Insurance:
General liability & property 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 1,658,319
Workers compensation 1,017,000 760,500 447,100 594,400 918,000 1,405,916 1,631,585 2,019,722 1,627,423 2,145,046
Other operating expenditures 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 3,017,537
Total operating expenditures 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 9,183,506
Minor capital 90,600 38,300 10,800 14,200 99,400 195,473 78,414 92,853 203,098 90,346
Total program expenditures 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 64,753,842
Reimbursed expenditures (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) (4,264,633)
Total general fund operating expenditures 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$ 60,489,209$
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 $364,800. While this change in accounting
increases costs initially, in the not-so-distant future (about 12 years), it becomes a much less expensive option than continuing "pay-as-you-go" cash funding.
153
Schedule 7
City of San Luis Obispo, California
Assessed and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
For the Fiscal Year Ended June 30
Fiscal Year Homeowners Secured Roll Unitary Unsecured Total Direct Market Value of Market
Exemptions Gross Value Roll TOTAL Tax Rate (Note 1)Value
2008-09 42,384,800$ 5,828,492,800$ 5,582,800$ 274,186,700$ 6,108,262,300$ 1.00% 6,108,262,300$ 100%
2009-10 42,222,400 6,008,936,600 4,904,100 277,718,500 6,291,559,200 1.00% 6,291,559,200 100%
2010-11 41,929,800 5,985,294,700 5,505,000 279,434,500 6,270,234,200 1.00% 6,270,234,200 100%
2011-12 41,988,100 5,894,189,700 6,842,300 275,800,100 6,176,832,100 1.00% 6,176,832,100 100%
2012-13 41,572,300 5,963,182,500 5,382,272 279,203,900 6,261,931,900 1.00% 6,261,931,900 100%
2013-14 41,327,300 6,152,693,400 5,300,173 295,626,200 6,467,600,400 1.00% 6,467,600,400 100%
2014-15 41,185,200 6,512,370,260 5,032,204 297,325,321 6,814,727,785 1.00% 6,814,727,785 100%
2015-16 41,518,400 6,965,233,454 4,883,115 305,427,553 7,275,544,122 1.00% 7,275,544,122 100%
2016-17 42,109,709 7,393,890,993 5,269,573 303,122,262 7,702,282,828 1.00% 7,702,282,828 100%
2017-18 42,702,377 7,844,131,236 4,369,188 331,183,030 8,179,683,454 1.00% 8,179,683,454 100%
Notes:1. Valuations are established by the County Assessor of the County of San Luis Obispo, except for property owned by private utility companies,
which is valued by the State of California. The City assumes that Market Values are equal to total Assessed Valuation.
2. For comparison purposes, gross assessed valuations include homeowners' exemptions. Although these exemptions reduce property tax collections, the revenue
loss is reimbursed by the State of California. As such, gross assessed valuation is the revenue base used in establishing property tax-related revenues.
SOURCE: HDL CAFR 2017-18 report - 2017-18 Roll Summary table.
Gross Assessed Valuation (Notes 1 and 2)
154
Schedule 8
City of San Luis Obispo, California
Property Tax Rates
Last Ten Fiscal Years
For the Fiscal Year Ended June 30
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
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 0.003 0.003 0.004 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 1.003 1.003 1.004 1.004 1.004 1.004 1.004 1.004
Notes:
1. Property tax rates are levied per $100 of assessed valuation. The tax rate information provided is for Tax Rate Area 003-000, which is the
largest tax rate area in the City.
2. The passage of Proposition 13 on June 6, 1978 established a maximum County-wide levy for general revenue purposes of 1% of market value.
Voter-approved tax rates for the retirement of long-term liabilities were excluded from this limit.
3. It is not possible to identify tax rates for individual agencies however, the following is a summary of derived property tax
allocations within Tax Rate Area 003-000 for Fiscal Year 2008-09:
Base ERAF Net
Rate Allocation Apportionment
San Luis Coastal Unified School District 36.10 36.10
San Luis Obispo County - General Fund 30.32 (8.1) 22.26
City of San Luis Obispo 18.36 *(3.5) 14.88
San Luis Obispo Community College District 6.42 6.42
County School Services 3.81 3.81
City/County Library 1.98 (0.3) 1.66
Port San Luis Harbor 1.63 (0.4) 1.19
Other Agencies 1.30 (0.3) 1.00
Education Revenue Augmentation Fund (ERAF)12.6 12.60
Total 100%0%100%
*The County further adjusts the 18.4% base rate for revenue shifts to school districts as directed by the State as part of their cuts to local agencies,
resulting in an effective rate for the City of approximately 14.9%.
Source: Prepared by HdL, Coren & Cone
Data source: San Luis Obispo County Assessor 2017-18 Post ERAF TRA Allocation Factors
155
Schedule 9
City of San Luis Obispo, California
Principal Property Taxpayers
Current Year and Nine Years Ago
For the Fiscal Year Ended June 30
Number of Secured Percent of Total Number of Secured Percent of Total
Owner Parcels Assessed Value Rank City Assessed Value Parcels Assessed Value Rank City Assessed Value
Jamestown Premir SLO Court Etal 11 111,274,133$ 1 1.42%$
CAP VIII Mustang - LLC 4 90,677,099 2 1.16%
Sierra Vista Hospital Inc.8 79,938,176 3 1.02%7 48,990,795 2 0.80%
SLO Promenade Limited Partnership 11 66,134,672 4 0.84%
Irish Hills Plaza West II LLC 6 48,633,324 5 0.62%2 33,234,600 5 0.57%
Charles Pasquini Jr Trust 6 48,252,216 6 0.61%6 42,635,592 3 0.73%
Costco Wholesale Corporation 1 34,853,109 7 0.44%1 31,638,857 6 0.54%
Bre Atlas Property Owner LLC 1 31,991,984 8 0.41%
DS Marigold 8 30,987,149 9 0.39%
Target Corporation 1 30,153,525 10 0.38%
CSHV Mustang Village 2 73,522,950 1 1.20%
JM Wilson Promenade Properties II LLC 10 39,395,131 4 0.68%
Charter Communications Properties 3 18,902,854 7 0.32%
John E. and Carole D. King 6 24,663,860 8 0.42%
Marigold Center LLC 9 24,525,865 9 0.42%
De Tolosa Ranch LLP 1 22,000,000 10 0.38%
Total 572,895,387$ 7.29%359,510,504$ 6.06%
Source: HDL CAFR 2017-18 report - 2017-18 and 2008-09 Top Ten Property Taxpayers tables.
2017-18 2008-09
156
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)
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
2017-18 10,868,920 10,868,920 100%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 $8,740,762.
3. The City has elected the Teeter Plan method of property tax collection, whereby the County remits 100% of taxes levied and
pursues collection and retains any delinquent taxes and related penalties and interest.
Source: San Luis Obispo County Auditor-Controller - 2017-18 Property Tax Estimates and Delinquencies Report
157
Schedule 11
City of San Luis Obispo, California
Schedule of Taxable Sales and Permits by Category
Last Ten Calendar Years
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Sales
In Thousands of Dollars
Apparel stores 61,356$ 65,608$ 70,582$ 71,429$ 73,127$ 74,471$ 74,789$ 76,524$ 74,403$ 75,280$
General merchandise stores 145,821 121,921 123,191 148,757 171,797 173,947 179,557 182,541 179,528 182,138
Food and drug stores 41,704 40,841 39,120 40,607 40,860 42,030 43,229 44,868 44,458 46,025
Eating & drinking places 124,278 120,619 120,852 128,855 143,991 149,144 160,568 173,381 179,147 183,489
Building materials & farm tools 113,130 96,091 93,904 104,754 113,532 128,144 135,269 141,800 144,151 162,960
Auto dealers & supplies 199,923 161,310 178,569 193,060 227,556 269,601 287,764 303,902 305,823 318,987
Service stations 89,586 72,158 85,795 105,178 109,224 104,740 103,130 89,773 79,736 83,481
Other retail stores 273,252 247,942 249,820 257,455 264,363 262,935 268,495 276,790 281,091 276,691
Total retail stores 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 1,329,051
All other outlets 252,563 223,240 235,062 278,827 269,489 285,688 300,748 348,998 381,638 375,993
Total 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 1,705,044
Permits
Apparel stores 103 113 120 111 122 131 103 175 163 162
General merchandise stores 27 14 14 14 12 12 14 25 39 36
Food and drug stores 34 42 45 49 53 55 53 58 60 63
Eating & drinking places 196 180 185 188 204 213 239 233 254 297
Home furnishings & appliances 73 88 91 86 88 84 81 88 129 124
Building materials & farm tools 30 40 40 39 41 39 39 41 47 53
Auto dealers & supplies 58 69 70 64 62 60 65 59 98 98
Service stations 21 21 21 17 17 17 17 17 21 16
Other retail stores 348 610 590 579 602 661 722 584 540 497
Total retail stores 890 1,177 1,176 1,147 1,201 1,272 1,333 1,280 1,351 1,346
All other outlets 1,024 672 688 656 666 664 678 872 1074
Total 1,914 1,849 1,864 1,803 1,867 1,936 2,011 2,152 2,425 1,346
Source: State Board of Equalization, State of California Taxable Sales in California, and the HDL CAFR 2017-18 report - Taxable Sales by Category table.
158
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%
1/1/2018 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.
159
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
160
Schedule 13
City of San Luis Obispo, California
Schedule of Business Tax Certificates Issued
Fiscal Years Ended June 30, 2016 and 2015
No. of No. of
Certificates Percent Certificates Percent
Construction 993 12.1% 1,019 12.6%
Manufacturing 165 2.0%144 1.8%
Transportation/Utilities 40 0.5%40 0.5%
Wholesale 138 1.7%140 1.7%
Retail 1,087 13.2% 1,035 12.7%
Professional 1,059 12.9% 1,152 14.2%
Residential Rental 2,338 28.4% 2,430 29.9%
Commercial Rental 311 3.8%313 3.9%
Services 2,099 25.5% 1,845 22.7%
Total business certificates issued 8,230 100% 8,118 100%
Home occupations 751 9.1%740 9.1%
Located outside City limits 1,872 22.7% 1,699 20.9%
Located in Downtown Business Improvement District 628 7.6%615 7.6%
Source: City of San Luis Obispo Finance Department - Revenue Division
20172018
161
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
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 0.99%
2017-18 23,484,450 1,599,769 503,101 21,815,204 - 6,783,114 15,743,808 69,929,446 1,502 0.85%
Sources:
City of San Luis Obispo Finance Department
Governmental Activities Business-Type Activities
162
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
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
2016-17 46,724 7,702,282,828 0 0 0 0.0%0
2017-18 46,548 8,179,683,454 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 CAFR 2017-18 report - Demographic and Economic Statistics table.
163
Schedule 16
City of San Luis Obispo, California
District and Overlapping Long-Term Debt
Fiscal Year Ended June 30, 2016
Amount Applicable
Percent Applicable to the City of
to the City of San Luis Obispo
San Luis Obispo as of June 30, 2018
Direct long-term debt:
City of San Luis Obispo 2006 Water Revenue Bonds 100.000%12,520,000$
City of San Luis Obispo 2012 Refunding Revenue Bonds (2001)100.000%3,735,000
City of San Luis Obispo 2012 Water Revenue Refunding Bonds (2002)100.000%2,540,000
City of San Luis Obispo 2014 LOVR Lease Revenue Bonds 100.000%7,135,000
City of San Luis Obispo 2018 Lease Revenue Bonds 16,905,000
42,835,000
Overlapping long-term debt (percentage of overlapping agency's assessed valuation located within boundaries of the City):
San Luis Obispo County General Fund Obligations 16.170%3,900,204
San Luis Obispo County Pension Obligations 16.170%14,029,803
City of San Luis Obispo Lease Revenue Bonds 100.000%27,760,000
45,690,007
Less: City of San Luis Obispo obligations supported by enterprise revenues 5,963,746
Total gross direct and overlapping long-term debt 39,726,261
Less self-supporting issues:
City of San Luis Obispo 2006 Water Revenue Bonds 12,520,000
City of San Luis Obispo 2012 Water Revenue Refunding Bonds (2002)2,540,000
Total self-supporting issues 15,060,000
24,666,261$
Ratio of long-term debt to assessed valuation and population
Gross Assessed Valuation 8,179,683,454$
Population 46,548
164
Schedule 16
City of San Luis Obispo, California
District and Overlapping Long-Term Debt, continued
Fiscal Year Ended June 30, 2016
Percent of Gross Per Capita
Amount Assessed Valuation Long-Term Debt
Direct and Overlapping Debt:
Gross $39,726,261 0.5%$853.45
Net 24,666,261 0.3%530
Direct Debt:
Gross $42,835,000 0.5%$920.23
Net 27,775,000 0.3%597
SOURCE: California Municipal Statistics, Inc. HDL CAFR report.
165
Schedule 17
City of San Luis Obispo, California
Computation of Legal Debt Margins
Last Ten Fiscal Years
(amounts expressed in thousands)
For the Fiscal Year Ended June 30
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
Legal debt limit 229,059$ 235,815$ 234,887$ 231,384$ 234,822$ 241,812$ 244,175$ 272,833$ 288,836$ 306,738$
Total debt applicable to limit -
Legal debt margin 229,059 235,815 234,887 231,384 234,822 241,812 244,175 272,833 288,836 306,738
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 2017-18
Gross Assessed Valuation 8,179,683,454$
Legal Debt Limit - 3.75% of Gross Assessed Valuation 306,738,130$
Long-term Debt:
Revenue Bonds Secured by Capital Leases 10,870$
Water Revenue Bonds 15,060
25,930
Less deductions allowed by law:
Revenue Bonds Secured by Capital Leases 10,870
Water Revenue Bonds 15,060
25,930
Total debt applicable to computed limit $0
Legal debt margin 306,738,130$
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.
166 Schedule 18 City of San Luis Obispo, California Revenue Bond Coverage – Water Fund Last Ten Fiscal Years For the Fiscal Year Ended June 30 LessOperating & Net RevenueCoverage Fiscal Operating Development Other Maintenance Available forWith Year Revenues Impact Fees Revenues Expenses Bond Debt Service Principal Interest Total Coverage Impact Fees2008-09 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%2017-18 21,997,054 (2,131,345) 325,268 (16,250,751)3,940,226 1,336,267 792,337 2,128,604 185% 285%Notes:2. The City refinanced its 2005 Refunding Lease Revenue Bonds, 2006 Lease Revenue Bonds, and 2009 Lease Revenue Bonds into the 2018 Lease Revenue Bonds.4. Net revenues available for debt service exclude development impact fees. 5. Operating expenses exclude depreciation and amortization.Source: City of San Luis Obispo Utilities Department3. Principal and interest amounts do not include the subordinate private placement loan retired in 2013. Bonded Debt Service Requirements1. Debt service requirements include 2012 Refunding Revenue Bonds, 2006 Refunding Revenue Bonds, and the 2004 state revolving loan
167
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
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%
2017-18 6,651,038 (2,998,555) 3,652,483 498,058 469,314 967,372 378%
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 $8,726,400 is allocated to the Parking Fund.
2. The City refinanced its 2005 Refunding Lease Revenue Bonds, 2006 Lease Revenue Bonds, and 2009 Lease Revenue Bonds into
2018 Lease Revenue Bonds.
3. Operating expenses exclude depreciation.
Source: City of San Luis Obispo Finance Department.
Bonded Debt Service Requirements
168
Schedule 20
City of San Luis Obispo, California
Demographic and Economic Statistics
Last Ten Fiscal Years
For the Fiscal Year Ended June 30
Median Public Elementary and Cuesta Community
Fiscal Household Median Secondary School College Unemployment
Year Population (1)Income (2)Age (1)Enrollment (4)Enrollment (3)Rate (1)
2008-09 44,750 42,526$ 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%
2017-18 46,548 64,014 26.1 7,650 6,416 3.20%
Sources:
1. HDL 2017-18 CAFR report - Demographic and Economic Statistics table.
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.
169
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%2,693 1 5.89%
County of San Luis Obispo 2,920 2 11.63%2,570 2 5.62%
Dept of State Hospitals - Atascadero 1,964 3 7.82%N/A N/A N/A
P.G. & E (Diablo Canyon)1,757 4 7.00%1,719 4 3.76%
California Men's Colony 1,500 5 5.98%2,000 3 4.37%
Tenet Health Care Corp.1,305 6 5.20%1,100 7 2.41%
Compass Health 1,200 7 4.78%N/A N/A N/A
San Luis Coastal Unified School District 1,200 8 4.78%873 8 1.91%
MindBody 1,035 9 4.12%N/A N/A N/A
Lucia Mar Unified School District 1,000 10 3.98%N/A N/A N/A
Total 16,881 67.25%10,955 23.96%
Note: Source for the 2017-18 employers information is the 2017 Pacific Coast Business Times (The List ). This information represents
employers in San Luis Obispo County.
170
Schedule 22
City of San Luis Obispo, California
Regular Authorized Positions
Last Ten Fiscal Years
For the Fiscal Year Ended June 30
Function 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
Public Safety
Police
Sworn 64.0 59.0 59.0 57.0 57.0 60.0 60.0 61.0 61.0 61.5
Non-sworn 28.0 27.5 27.5 26.5 25.5 25.5 25.5 25.5 25.5 24.0
Fire
Sworn 44.0 44.0 44.0 44.0 44.0 49.0 49.0 50.0 47.0 47.0
Non-sworn 10.0 9.8 9.0 7.8 6.8 4.0 4.0 4.0 10.0 10.0
Public Utilities 66.8 63.8 63.8 60.9 61.9 64.8 64.8 67.1 69.1 69.1
Transportation 32.0 30.0 29.2 31.8 31.8 28.9 28.9 36.8 36.8 68.3
Leisure, Cultural and Social Services 33.0 33.0 33.0 32.0 32.0 34.0 34.0 35.0 35.0 34.0
Community Development 40.3 37.3 37.3 42.8 43.8 39.5 40.0 51.0 51.0 32.4
General Government 59.5 54.8 54.8 50.5 52.2 56.0 56.0 57.0 61.0 45.5
Total 377.6 359.2 357.6 353.3 355.0 361.7 362.2 387.4 396.4 391.8
Ratio of Sworn Police Personnel per 1,000 Population:* 1.43 1.31 1.30 1.26 1.25 1.32 1.32 1.33 1.31 1.32
Ratio of Sworn Fire Personnel per 1,000 Population:*0.98 0.98 0.97 0.97 0.97 1.08 1.08 1.06 1.01 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
171
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
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
Function/Program:
Police:
Calls for police/fire service 33,211 32,057 32,074 34,751 36,236 34,659 36,515 38,300 39,620 39,103
Incident numbers issued 28,855 27,555 27,595 29,991 31,156 29,277 31,048 32,542 33,360 32,730
Police reports written 7,839 7,454 7,661 8,322 9,192 8,665 8,435 8,852 8,675 7,735
Traffic citations issued 7,099 *
Other citations issued 1,315 *
Violations cited 8,410 8,471 5,939 8,119 7,213 5,793 6,648 7,673 7,649 7,524
Citations issued 7,737 7,398 5,380 7,718 6,665 5,275 6,204 7,038 7,030 6,752
Collision reports 693 718 728 669 643 625 630 587 608 609
Violent crimes:**136 140 126 134 117 158 237 173 177 178
Willful homicide**2 1 0 0 0 0 0
Forcible rape**32 30 27 24 18 31 44 29 38 44
Robbery**38 39 35 34 19 26 25 13 21 23
Aggravated assault**66 71 64 74 79 101 168 131 118 111
Property crimes:**649 620 640 714 804 713 542 637 731 644
Burglary**334 324 372 330 414 328 206 225 251 172
Motor vehicle theft**55 68 54 107 81 63 71 87 95 94
Larceny-theft:**1,328 1,240 1,260 1,345 1,476 1,384 1,162 1,335 1,730 1,516
Over $400**260 228 214 277 309 322 265 325 385 378
$400 and under**1,068 1,012 1,046 1,068 1,167 1,062 897 1,010 1,345 1,138
Fire:
Medical responses***(Note 4)2,613 3,325 2,799 2,856 2,985 3,232 3,417 3,540 4,538 4,248
Fire suppression responses***(Note 4)110 133 101 102 95 105 111 151 143 163
Hazardous materials responses***(Note 4)26 36 23 17 21 15 21 22 21 17
Other responses***(Note 4)1,897 1,224 1,528 1,552 1,812 1,840 1,929 2,158 1,799 1,785
Total service responses***4,646 4,718 4,451 4,527 4,913 5,192 5,478 5,871 6,501 6,213
Fire and life-safety inspections***1,977 1,110 2,489 2,431 2,494 644 2,476 2,516 3,756 3,738
Arson investigations***29 47 22 18 49 44 17 44 8 12
Education activities (# of people)***15,000 14,000 20,106 23,120 23,377 23,945 23,697 23,680 23,575 23,540
172
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
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
Function/Program:
Public Utilities:
Water/Sewer customer accounts 14,682 14,875 14,734 14,695 14,742 14,899 14,953 15,167 15,188 15,505
Miles of sewerline 137 137 137 137 137 197 139.6 138 143
Miles of waterline 182 182 185 185 187 187 *187 191 197 187
Water service line repairs and renewals*****142 95 86 50 66 58 60 50 50 57
Sewer main stoppages 12 10 9 7 12 15 13 11 4
Acre feet of water delivered - Nacimiento 981 2,321 663 1,506 839 3574 3817 3753
Acre feet of water delivered - Salinas 2,473 2,736 2,640 2,149 2,378 1,444 1,986 8 273 853
Acre feet of water delivered - Whale Rock 4,280 3,402 1,277 2,875 3,212 2,615 1,375 949 924
Transportation:
Signals and lights:
Intersections with traffic signals 60 67 70 68 70 70 70
Traffic signal service requests 100 80 85 80 85 90 60
Streetlights operated & maintained 220 2,230 2,300 2,300 2,300 2,300 2,280
Streetlight service requests 285 500 180 175 45 50 13
Parking spaces:
Estimated miles of paved streets 125 125 130 132 132 133 133 133 133 134
Pavement condition index 74 73 74 72 71 72 72 71 71 70
Number of street lights 2,300 2,179 2,270 2,270 2,270 2,300 2,300 2,300 2,300 2,280
Traffic collisions 789 708 597 621 593 660 720 531 482
Parking spaces provided (lot, garage & street)3,060 3,059 3,067 3,065 3,071 3,119 3176 2953 2892 2871
Parking citations written 40,062 30,087 30,278 26,515 28,690 23,957 20,690 24,213 23,348 21,647
Total transit passengers 1,032,232 1,019,852 1,045,299 1,118,519 1,109,600 1,122,000 1,099,274 1,209,708 1,131,716 945,288
173
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
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
Function/Program:
Leisure, Cultural and Social Services:
Open space acres maintained 3,015 3,420 3,420 3,510 3,510 3,510 3,510 3,510 3,510 3,775
Open space easement acres 3,139 3,161 161 3,200 3,200 3,200 3,200 3,200 3,200 3,200
Trail mileage 38 40 40 45 47 49 49 52 52 55
Total golf rounds played 42,438 34,376 32,228 34,699 33,067 34,766 33,674 30,572 28,196 35,670
Acres of park landscape maintained 157 157 157 157 157 157 157 157 157 500
Trees in City jurisdiction 18,600 17,779 18,700 18,700 18,700 18,700 19,000 20,000 20,000 20,000
Children's services enrollment totals 816 900 1,664 1,755 1,605 2,338 2,360 2,115 2,115 1,950
Triathlon:
participants, spectators and volunteers******6,600 6,700 5,400 6,000 6,525 6,000 5,500 5,200 5,000 887
Annual senior attendance (total)******14,576 14,250 14,500 14,000 14,200 ***265 331
Facility permits processed 1,273 1,971 1,806 1,803 1,269 1,416 836 1,305 1,073 864
Annual aquatics attendance (total)61,264 60,052 56,676 56,042 67,000 73,903 83,107 68,403 96,687 97,701
Adult athletic teams registered 229 255 245 320 325 338 320 325 325 362
Youth athletic participants registered 1,625 1,650 1,320 1,400 1,300 1,200 1,350 1,300 1,150 1,115
Special event applications processed 53 57 68 78 84 103 103 77 101 88
Banner permits processed 71 65 72 86 76 82 47 87 56 45
Instructional class enrollments 2,017 1,837 1,628 1,400 1,308 1,424 1,751 1,151 1,724 1,439
174
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
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
Function/Program:
Community Development:
Housing characteristics:
Single family units 10,793 10,808 10,951 10,969 10,994 11,133 11,230 11,306 11,413
2-4 units 2,337 2,350 2,634 2,650 2,656 2,692 2,695 2,789 2,851
5 or more unit structures 5,654 5,702 5,596 5,596 5,647 5,767 5,804 6,038 6,097
Mobile homes 1,534 1,534 1,482 1,482 1,482 1,482 1,482 1,482 1,482
Total 20,318 20,394 - 20,663 20,697 20,779 21,074 21,211 21,615 21,843
Housing units (replaces above categories)20,578
Households (replaces above categories)1,361
Building permits issued (Note 1):475 438 442 463 566 511 597 584 584 623
Residential:
Single family residential (Note 2)28 16 7 13 48 59 114 97 62 125
Multi-family residential 5 5 3 10 6 8 32 5 13 18
Non-residential 4 1 7 5 7 9 27 13 14 10
Other permits:
Additions, alternations, demolitions (Note 4)454 416 499 459 530 458 460 522 545 502
Other improvements
Total 491 438 516 487 591 534 1,230 1,221 1,218 1,278
Approximate value of building permits (in thousands)
Residential:
Single family residential 6,800$ 4,424$ 6,085$ 3,278$ 15,698$ 15,412$ 36,722$ 26,441$ 16,340$ 23,094$
Multi-family residential 4,286 2,528 926 3,847 1,560 6,744 26,499 13,500 15,022 16,094
Non-residential 10,482 525 16,608 5,142 1,935 15,310 9,791 11,484 56,308 9,703
Other permits:
Additions, alternations, demolitions (Note 4)21,080 26,464 15,948 16,589 20,761 19,139 22,897 30,230 24,787 30,686
Other improvements
Total 42,648$ 33,941$ 39,567$ 28,856$ 39,954$ 56,605$ 95,909$ 81,655$ 112,457$ 79,577$
Building inspections conducted 10,371 8,359 10,210 13,685 10,543 8,996 6,641 7,195 10,745 9,974
Home occupation permits processed 175 146 126 117 142 129 113 163 144 112
Development permit applications received 223 194 172 148 217 311 293 253 236 215
175
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
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
Function/Program:
General Government:
Business tax certificates issued:
Located outside city limits 1,487 1,548 1,569 1,670 1,670 1,472 1,602 2,018 1,699 1,872
Total certificates issued 7,458 7,090 6,873 7,086 7,086 6,934 7,805 7,597 8,118 8,230
Human resources recruitments (total)46 46 42 59 91 105 129 103 103 97
Fleet vehicles maintained 280 301
City-wide fleet & equipment assets 290 290 290 290 300 318 323 339
Replaces prior category
Telephone lines managed 925 1,003 1,003 1,024 981 995 1,037 1,005 998 907
Cell phones supported****343 348 351 338 344 383 460 453 476 492
IT users supported 450 450 450 498 498 490 511 515 467 471
* Data Not Available
** Data from California Department of Justice based on calendar year
*** Data is based on calendar year
**** Includes cellular modems (70) (90 for 11-12)
***** The 2013-14 amount now includes recycled waterline.
******The FY 2017-18 amount only includes Triathlon participants and volunteers
*******Starting in FY 2016-17, the amount only includes senior center membership
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
176 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)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%2017-18 15,505 0.01% 19,159,169 5.29% 5,530 10%Source: City of San Luis Obispo Utilities Department.
177
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
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 **$7.73/unit volume charge
2013 Base Fee $5.00 $7.43 min. charge per $7.43 min. charge per $7.43 min. charge per
0-8 hcf $6.25 dwelling unit dwelling unit dwelling unit
8 + hcf $7.82 $8.19/unit volume charge ** $8.19/unit volume charge **$8.19/unit volume charge
2014 Base Fee $5.28 $7.73 min. charge per $7.73 min. charge per $7.73 min. charge per
1-8 hcf 6.56 dwelling unit dwelling unit dwelling unit
8 + hcf 8.20 $8.52/unit volume charge** $8.52/unit volume charge**$8.52/unit volume charge
2015 Base Fee $9.98 $7.96 min. charge per $7.96 min. charge per $7.96 min. charge per
1-8 hcf 6.92 dwelling unit dwelling unit dwelling unit
8 + hcf 8.65 $8.77/unit volume charge** $8.77/unit volume charge**$8.77/unit volume charge
Sewer Rates (Monthly)Water Rates (Note 1)
178
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 $8.32 min. charge per $8.32 min. charge per $8.32 min. charge per
Base Fee Drought Surcha 0.74 dwelling unit dwelling unit dwelling unit
1-8 hcf 6.92 $9.17/unit volume charge** $9.17/unit volume charge**$9.17/unit volume charge
Drought Surcharge 1.10
9 + hcf 8.65
Drought Surcharge 1.37
2017 Base Fee $9.98 $8.57 min. charge per $8.57 min. charge per $8.57 min. charge per
Base Fee Drought 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 1.10
9 + hcf 8.65
Drought Surcharge 1.37
2018 Base Fee $12.33 $8.57 min. charge per $8.57 min. charge per $8.57 min. charge per
1-8 hcf 7.27 dwelling unit dwelling unit dwelling unit
9 + hcf 9.08 $9.44/unit volume charge** $9.44/unit volume charge**$9.44/unit volume charge
*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
179
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 172.90 34.9%
SLO Coastal Unified School District School 74.34 15.0%
Silver City Mobile Home Park Mobile Homes 46.69 9.4%
Sierra Vista Hospital Care Facilities 40.56 8.2%
Mustang Village Apartments 35.56 7.2%
Creekside Mobile Homes Mobile Homes 31.73 6.4%
Laguna Lake Mobile Homes Mobile Homes 26.45 5.3%
Embassy Suites Hotel 24.67 5.0%
Irish Hills Hamlet Apartments 23.31 4.7%
Fiero Lane Water Company Commercial 19.46 3.9%
Total 495.7 100.00%
Source: City of San Luis Obispo - Utilities Department