CITY OF BUELLTON
CITY COUNCIL AGENDA
Regular Meeting of March 14, 2024 – 6:00 p.m.
City Council Chambers, 140 West Highway 246
Buellton, California
Council meetings will be conducted in person and the public is welcome to attend.
Written comments will not be read aloud but can be sent to the City Council via email at [email protected] (please reference agenda item number/subject matter, and include your name and address). The public can observe Council meetings via City TV Live Stream at:
http://www.cityofbuellton.com/government/cityTV.php
Members of the public can observe and address the meeting electronically by clicking here.
TELECONFERENCE MEETING LOCATION:
Vice Mayor David Silva will attend the above referenced regular City Council meeting via teleconference from the following location:
67711 30th Avenue, Cathedral City, CA 92234
CALL TO ORDER
Mayor Dave King
PLEDGE OF ALLEGIANCE
ROLL CALL
Council Members, Hudson Hornick, Elysia Lewis, John Sanchez, Vice Mayor David Silva, and Mayor Dave King
REORDERING OF AGENDA
PUBLIC COMMENTS Speaker Slip to be completed and turned in to the City Clerk prior to commencement of meeting. Any person may address the Council on any subject pertaining to City business, including all items on the agenda not listed as a Public Hearing, including the Consent Agenda and Closed Session. Limited to three (3) minutes per speaker. By law, no action may be taken at this meeting on matters raised during Public Comments not included on this agenda. Public Speakers using a translator are allotted a total of six (6) minutes to speak, unless simultaneous translation equipment is used.
City Council Meeting Agenda Page 2 March 14, 2024
CONSENT CALENDAR (ACTION)
The following items are considered routine and non-controversial and are scheduled for consideration as a group. Any Council Member, the City Attorney, or the City Manager may request that an item be withdrawn from the Consent Agenda to allow for full discussion. Members of the Public may speak on Consent Agenda items during the Public Comment period.
1. Minutes of February 22, 2024 Regular City Council Meeting
2. List of Claims to be Approved and Ratified for Payment to Date for Fiscal Year 2023/2024
3. Monthly Treasurer’s Report - January 31, 2024
(Staff Contact: Finance Director Shannel Zamora)
4. Financial Report for the Second Quarter Ending December 31, 2023 (Staff Contact: Finance Director Shannel Zamora)
5. Acceptance of Village Park Improvements Project
(Staff Contact: Public Works Director Rose Hess)
6. Award of Construction Contract for the SYVCO CDBG – 140 Highway 246 TI Projects – Heating/HVAC
(Staff Contact: Public Works Director Rose Hess)
7. Consideration of an Affordable Housing Agreement for the 430 & 440 Central Avenue Project
(Staff Contact: Planning Director Andrea Keefer)
8. Contract with Kosmont Companies to Prepare Economic and Market Analysis Study to Support Comprehensive General Plan Update and Urban Growth Boundary Update
(Staff Contact: Planning Director Andrea Keefer)
PRESENTATIONS
PUBLIC HEARINGS (POSSIBLE ACTION)
9. Resolution No. 24-04 - “A Resolution of the City Council of the City of Buellton, California, Approving a One-Year Time Extension (24-TE-01) Request for Final Development Plan (16-FDP-06) Located at the Southern Terminus of Industrial Way on Assessor’s Parcel Number 099-690-048”
(Staff Contact: Planning Director Andrea Keefer)
10. Ordinance No. 24-01 – “An Ordinance of the City Council of the City of Buellton, California, Adding Buellton Municipal Code Section 19.10.140 Providing for Certification for Review of Certain Discretionary Land Use Planning Proposals for Immediate City Council Consideration” (Introduction and First Reading) (Staff Contact: Planning Director Andrea Keefer)
City Council Meeting Agenda Page 3 March 14, 2024
COUNCIL MEMBER COMMENTS/ITEMS
WRITTEN COMMUNICATIONS
Written communications are included in the agenda packets. Any Council Member, the City Manager, or City Attorney may request that a written communication be read into the record.
COMMITTEE REPORTS This Agenda listing is the opportunity for Council Members to give verbal Committee Reports on any meetings recently held for which the Council Members are the City representatives thereto.
BUSINESS ITEMS (POSSIBLE ACTION)
11. Review of Annual Comprehensive Financial Report (ACFR) for Fiscal Year Ended June 30, 2023
(Staff Contact: Finance Director Shannel Zamora)
12. Consideration of Appointment to the Planning Commission (Staff Contact: City Manager Scott Wolfe)
13. Resolution No. 24-05 - “A Resolution of the City Council of the City of Buellton, California, Regarding Mid-Year Budget Amendments for FY 2023-24” (Staff Contact: Finance Director Shannel Zamora)
CITY MANAGER’S REPORT
ADJOURNMENT
The next regular meeting of the City Council will be held on Thursday, March 28, 2024 at 6:00 p.m.
City Manager Review: SW
Council Agenda Item No.: 1
CITY OF BUELLTON
CITY COUNCIL MEETING MINUTES
Regular Meeting of February 22, 2024
City Council Chambers, 140 West Highway 246
Buellton, California
CALL TO ORDER
Mayor King called the meeting to order at 6:00 p.m.
PLEDGE OF ALLEGIANCE
ROLL CALL
Present: Council Members Hudson Hornick, Elysia Lewis and John Sanchez, Vice Mayor David Silva, and Mayor Dave King
Staff: City Manager Scott Wolfe, City Attorney Greg Murphy, Public Works Director Rose Hess, Finance Director Shannel Zamora (Via Zoom), Planning Director Andrea Keefer, and City Clerk Linda Reid
REORDERING OF AGENDA
None
PUBLIC COMMENTS
None
CONSENT CALENDAR
1. Minutes of February 8, 2024 Regular City Council Meeting
2. List of Claims to be Approved and Ratified for Payment to Date for Fiscal Year 2023/2024
MOTION:
Motion by Council Member Lewis, seconded by Vice Mayor Silva, approving Consent Calendar Items 1-2 as listed.
City Council Meeting Minutes Page 2 February 22, 2024
VOTE:
Motion passed by a roll call vote of 5-0.
Council Member Hornick – Yes
Council Member Lewis – Yes
Council Member Sanchez – Yes
Vice Mayor Silva – Yes
Mayor King – Yes
PRESENTATIONS
None
PUBLIC HEARINGS
3. Resolution No. 24-02 - “A Resolution of the City Council of the City of Buellton, California, Adopting the Measure A Five-Year Local Program of Projects for Fiscal Years 2024/2025 - 2028/2029”
RECOMMENDATION:
That the City Council consider adoption of Resolution No. 24-02.
STAFF REPORT:
Public Works Director Hess presented the staff report.
SPEAKERS/DISCUSSION:
Mayor King opened the public hearing at 6:08 p.m. There being no public comment, Mayor King closed the Public Hearing at 6:09 p.m.
DOCUMENTS:
Staff report with attachments as listed in the staff report.
MOTION:
Motion by Vice Mayor Silva, seconded by Council Member Sanchez approving Resolution No. 24-02 – “A Resolution of the City Council of the City of Buellton, California, Adopting the Measure A Five-Year Local Program of Projects for Fiscal Years 2024/2025 – 2028/2029”
VOTE:
Motion passed by a roll call vote of 5-0.
Council Member Hornick – Yes
Council Member Lewis – Yes
Council Member Sanchez – Yes
Vice Mayor Silva – Yes
Mayor King – Yes
City Council Meeting Minutes Page 3 February 22, 2024
COUNCIL MEMBER COMMENTS/ITEMS
Vice Mayor Silva requested that staff agendize discussion of a policy for displaying banners in the city. Vice Mayor Silva requested that staff agendize discussion of providing additional funding to Santa Ynez Valley Community Outreach, as their Meals on Wheels distribution is increasing, along with the cost of food. City Manager Wolfe stated he will ask Pam Gnekow to attend a future Council meeting to speak about increased meal distribution and funding shortfall.
Council Member Sanchez thanked local law enforcement for enforcing the speed limit in Buellton.
WRITTEN COMMUNICATIONS
None
COMMITTEE REPORTS
Council Member Sanchez announced that he attended the Central Coast Water Authority (CCWA) meeting and provided an oral report for the record.
Council Member Sanchez announced that he attended the Buellton Chamber of Commerce and Visitors Bureau board meeting and provided an oral report for the record.
Council Member Lewis announced that she attended the Santa Ynez Valley Community Aquatics Foundation meeting on behalf of the Santa Ynez Valley School District and provided an oral report for the record.
Vice Mayor Silva announced that he attended the Central Coast Community Energy (3CE) board meeting and provided an oral report for the record.
Mayor King announced that he attended the Coast Rail Coordinating Council (CRCC) board meeting and provided an oral report for the record.
BUSINESS ITEMS
4. Introduction of Initial Concept of an Update to the Buellton Urban Growth Boundary (UGB) Initiative
RECOMMENDATION:
That the City Council review the exhibits and proposed process included in the staff report, and direct staff to proceed with additional public outreach.
STAFF REPORT:
City Manager Wolfe presented the staff report and displayed a PowerPoint presentation explaining the Urban Growth Boundary concept.
City Council Meeting Minutes Page 4 February 22, 2024
DOCUMENTS:
Staff report with attachments as listed in the staff report.
SPEAKERS/DISCUSSION:
The City Council discussed various issues related to expanding the Urban Growth Boundary and how best to move forward.
DIRECTION:
The City Council agreed by consensus to proceed with additional public outreach regarding the update to the Buellton UGB initiative.
5. Authorization of Contract Extension with KOA to Prepare Caltrans Traffic Study RECOMMENDATION:
That the City Council authorize the City Manager to execute an “Agreement for Professional Contract Services between City of Buellton and KOA (A Lochner Company).
STAFF REPORT:
City Manager Wolfe presented the staff report.
DOCUMENTS:
Staff report with attachments as listed in the staff report.
SPEAKERS/DISCUSSION:
The City Council questioned when the traffic study will be completed and requested that staff initiate a service request with Caltrans to install reflectors on the center island, located at Highway 246 and La Lata Drive.
MOTION:
Motion by Council Member Lewis, seconded by Council Member Sanchez authorizing the City Manager to execute an “Agreement for Professional Contract Services between City of Buellton and KOA (A Lochner Company).
VOTE:
Motion passed by a roll call vote of 5-0.
Council Member Hornick – Yes
Council Member Lewis – Yes
Council Member Sanchez
Vice Mayor Silva – Yes
Mayor King – Yes
CITY MANAGER’S REPORT
City Manager Wolfe provided an informational report for the record.
City Council Meeting Minutes Page 5 February 22, 2024
ADJOURNMENT
Mayor King adjourned the regular meeting at 7:40 p.m. The next regular meeting of the City Council will be held on Thursday, March 14, 2024 at 6:00 p.m. __________________________
Dave King
Mayor
ATTEST:
_____________________________
Linda Reid
City Clerk
CITY OF BUELLTON
City Council Agenda Staff Report
City Manager Review: SW
Council Agenda Item No.: 2
To: The Honorable Mayor and City Council
From: Shannel Zamora, Finance Director
Meeting Date: March 14, 2024
Subject: List of Claims to be Approved and Ratified for Payment to Date for Fiscal Year 2023/2024
______________________________________________________________________________
BACKGROUND
Staff is required to submit a check register to the City Council for approval every Council meeting for the most recently completed check register (Attachment 1).
The check register for the period 02/10/2024 through 03/01/2024 has been prepared in accordance to Government Code section 37202 and Buellton Municipal Code section
3.08.070. The check register lists all vendor payments for the specified period above, along with claimant’s name, a brief description of the goods or service purchased, amount of demand, check number, check date and the account number(s) associated with each payment.
The total amount of checks and electronic fund transfers issued for the period of 02/10/2024 through 03/01/2024 was $773,784.36.
FISCAL IMPACT
Payments made to the various vendors were consistent with the approved City’s Budget for FY 2023/24. Cash is available for the payment disbursements of the above liabilities.
RECOMMENDATION
That the City Council review and accept the check register for the period 02/10/2024 through 03/01/2024.
ATTACHMENTS
Attachment 1 – Claims
CITY OF BUELLTON
City Council Agenda Staff Report
City Manager Review: SW
Council Agenda Item No.: 3
To: The Honorable Mayor and City Council
From: Shannel Zamora, Finance Director
Meeting Date: March 14, 2024
Subject: Monthly Treasurer’s Report – January 31, 2024
______________________________________________________________________________
BACKGROUND
California Government Code Section 53646(b)(3) provides mandatory investment reporting requirements for California public agencies. The attached Treasurer’s Report complies with the State’s reporting requirement.
On June 8, 2023, Council adopted the current Investment Policy per Resolution 23-13 which states the City Finance Director, as the investment officer, must submit monthly reports to City Council to demonstrate that sufficient cash flow liquidity is available to meet the succeeding month’s estimated expenditures.
This Treasurer’s Report is for January 31, 2024. Treasurer’s Reports are presented on a monthly basis.
FISCAL IMPACT
There is no fiscal impact; this report is intended to show the City Council the financial performance of the City’s investment portfolio of idle funds.
RECOMMENDATION
That the City Council receives and files the Treasurer’s Report for the month ending January 31, 2024.
ATTACHMENTS
Attachment 1 – Monthly Treasurer’s Report – January 31, 2024
[Type text]
A
City of Buellton
Monthly Treasurer’s Report
For the month ending in January 31, 2024
March 14, 2024
This report presents the City’s cash activity and investment portfolio as of January 31, 2024. The report includes:
1) Cash and investments at January 31, 2024 compared to the prior month;
2) A reconciliation of cash and investments to City ledger balances; 3) All investments managed by the City on its own behalf; 4) Beginning of year fund balance, revenues, expenditures and ending fund balance for each fund at January 31, 2024
The following schedule is a summary of the City’s cash and investments based on recorded value as of January 31, 2024 compared with the prior month.
December 31, 2023 January 31, 2024 $ Change
Cash - Pooled $ 7,566,618.25 $ 7,355,359.30 $ (211,258.95) Investments held by the City 17,241,859.38 17,386,118.51 $ 144,259.13 TOTAL CASH AND INVESTMENTS $ 24,808,477.63 $ 24,741,477.81 $ (66,999.82) Summary of activity for the Month and Future Liquidity: The majority of the difference in the recorded value for cash and investments held by the City from last month is mainly due to construction costs of the annual road maintenance project. The value of investments also changed due to interest earnings on money market fund and Certificate of Deposits (CDs) and Local Agency Investment Fund (LAIF). The portfolio is sufficiently liquid to meet expected expenditures for the coming six months.
City of Buellton
M o n t h l y T r e a s u r e r ’ s R e p o r t
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The following schedule is a reconciliation of Cash and Investments to City ledger:
14,698,163.97
3,375,804.61
(1,857,194.34)
8,175,208.44
(2,734,779.75)
160,164.51
37,470.92
625,552.15
368,077.99
14,484.72
772,224.99
664,299.38
418,797.72
-
-
23,202.50
-
24,741,477.81
7,341,735.53
5,423,957.78
13,623.77
2,906,652.99
9,055,507.74
Pooled Cash - Webster Bank Escrow - -
24,741,477.81
999-21000 Wages Payable - -
24,741,477.81
24,741,477.81
24,741,477.81
Per Statements: 1/31/2024
Mechanics General Checking 7,964,296.23
Mechanics Money Market 5,423,957.78
Mechanics FSA 13,623.77
Local Agengcy Investment Fund (LAIF) 9,055,507.74
Multi-Bank Securities Bank 2,906,652.99
Webster Bank - Escrow -
Total Cash Per Statement: 25,364,038.51
Claim on Cash vs Total (622,560.70)
Outstanding Items: (622,560.70)
Difference: (0.00)
TOTAL DUE TO OTHER FUNDS 24,808,477.63 (66,999.82)
TOTAL: Cash in Bank 24,808,477.63 (66,999.82)
DUE TO OTHER FUNDS
999-27000 Due To Other Funds 24,808,477.63 (66,999.82)
999-10006 -
TOTAL: Cash in Bank 24,808,477.63 (66,999.82)
-
999-10004 Pooled Cash - Brokerage 2,872,980.32 33,672.67 999-10005 Pooled Cash - LAIF 8,965,439.55 90,068.19
999-10002 Pooled Cash - Money Market 5,403,439.51 20,518.27 999-10003 Pooled Cash - FSA 16,302.43 (2,678.66)
TOTAL CLAIM ON CASH 24,808,477.63 (66,999.82)
CASH IN BANK
Cash in Bank
999-10001 Pooled Cash - General Checking 7,550,315.82 (208,580.29) 091-10000 Claim On Pooled Cash - -
092-10000 Claim On Pooled Cash 567,097.13 (543,894.63)
075-10000 Claim On Pooled Cash 416,942.53 1,855.19
090-10000 Claim On Pooled Cash - -
031-10000 Claim On Pooled Cash 731,825.66 40,399.33
032-10001 Claim On Pooled Cash 660,912.79 3,386.59
027-10000 Claim On Pooled Cash 368,921.02 (843.03)
029-10000 Claim On Pooled Cash 14,420.55 64.17
024-10000 Claim On Pooled Cash 37,304.93 165.99
025-10000 Claim On Pooled Cash 602,998.03 22,554.12
021-10000 Claim on Pooled Cash (2,734,779.75) -
023-10000 Claim On Pooled Cash 159,455.02 709.49
006-10000 Claim on Pooled Cash (1,857,194.34) -
020-10000 Claim On Pooled Cash 8,018,078.95 157,129.49
CLAIM ON CASH
001-10000 Claim On Pooled Cash 14,461,249.41 236,914.56 005-10000 Claim On Pooled Cash 3,361,245.70 14,558.91
Bank Reconciliation - January 2024
City of Buellton, CA
For the Period Ending 1/31/2024
1/1/2024
BALANCE
CURRENT
ACTIVITY
1/31/2024
BALANCE ACCOUNT # ACCOUNT NAME
M o n t h l y T r e a s u r e r ’ s R e p o r t
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City of Buellton
Investment Summary
January 31, 2024
Currently, short-term excess cash is primarily invested in the Local Agency Investment Fund (LAIF) administered by the State Treasurer. This is a high quality investment available in terms of safety, liquidity, and yield. Due to fluctuations in the marketplace, the City may have some investments with a current market value that is greater or less than the recorded value. This difference has no effect on investment yield as the City intends to hold the securities to maturity. However, generally accepted accounting principles require that market gains and losses be reported as interest earnings or losses at year-end.
Percent of
Portfolio Yield
Maturity
Term Maturity Date Par Value Market Value
Local Agency Investment Fund - LAIF 52.69% 4.00% n/a n/a $ 9,055,507.74 $ 9,055,507.74 First Technology Bank Fed Cr Union 0.58% 3.35% 5 yrs. 2/6/2024 100,000.00 99,962.00 Security Identifier: 33715LDP2
Comenity Cap Bank 0.93% 2.80% 5 yrs. 4/15/2024 160,000.00 159,216.00 Security Identifier: 20033AU38
Morgan Stanley Bank 0.58% 2.75% 5 yrs. 5/2/2024 100,000.00 99,380.00 Security Identifier: 61760AZR3
Capital One Bank 0.58% 2.00% 5 yrs. 8/21/2024 100,000.00 98,356.00 Security Identifier: 14042TCB1
Morgan Stanley Bank 0.58% 1.90% 5 yrs. 1/23/2025 100,000.00 97,201.00 Security Identifier: 61760A6K0
State Bk India 1.16% 1.60% 5 yrs. 4/29/2025 200,000.00 192,430.00 Security Identifier: 856285TF8
Sallie Mae Bank 0.70% 0.80% 5 yrs. 7/1/2025 120,000.00 113,644.80 Security Identifier: 7954506Q3
Third Fed Savings 1.43% 3.50% 5 yrs. 6/28/2027 245,000.00 240,134.30 Security Identifier: 88413QDL9
Morgan Stanley Bank 0.61% 3.75% 5 yrs. 6/28/2027 104,000.00 102,753.04 Security Identifier: 61773TFC2
Capital One National Association 1.41% 4.30% 5 yrs. 9/30/2027 242,514.04 245,573.80 Security Identifier: 14042RUR0
Global Federal Credit Union 1.45% 4.60% 5 yrs. 4/17/2028 249,000.00 254,204.10 Security Identifier: 37892MAC8
Optum Bk Draper Utah CTF Dep 0.93% 4.45% 5 yrs. 12/22/2028 160,000.00 163,052.80 Security Identifier: 68405VBV0
United States Treasury Bill 6.10% 5.11% 6 mo. 6/13/2024 1,049,000.00 1,029,394.19 Security Identifier: 912797FS1
Multi-Securities Bank - Cash in Holding 11,350.96
Money Market (Held with Mechanics Bank) 30.26% 4.28% n/a 5,200,000.00 5,423,957.78 Total City Investments 100.00% $ 17,185,021.78 $ 17,386,118.51 Certificates of Deposits (Held with Multi-Securities Bank) U.S. Treasury Securities (Held with Multi-Securities Bank)
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The following is a fund balance schedule showing beginning fund balance at July 1, 2023 plus revenues minus expenditures for the period, resulting in ending fund balance at January 31, 2024.
Fund balance includes total assets and liabilities of the City.
As required by Government Code Section 53646 (b) (3), the chief financial officer for the City declares that there is sufficient funds to meet all obligations for the next six months.
Shannel Zamora
Shannel Zamora
Finance Director
Total Expenses January 31, 2024
Balance
6,429,354.94 5,543,891.86 14,849,346.92
755,231.98 931,236.92 3,002,476.41
006 - Wastewater Capital 59,536.40 130,239.09 280,378.04 020 - Water Fund 1,695,655.85 1,650,284.54 8,400,828.14 021 - Water Capital 22,785.00 3,301.69 325,616.43
2,301.85 - 498,783.49
551.47 - 37,258.58
158,896.04 106,288.64 635,757.71
027 - Local Transportation Fund 7,978.59 11,666.62 367,596.86 029 - Transportation Planning 207.41 19,954.15 (122,616.30) 031 - Measure A 199,908.69 265,426.67 802,375.88
032 - American Relief Act Fund 392,832.23 382,068.02 21,223.22 075 - Trust & Agency Fund 4,629.83 - 17,812.67
090 - Long-Term Debt - - (2,917,219.67)
091 - General Fixed Assets - - 26,454,746.40
1,376,142.00
10,502,137.04 52,572,727.94
26,454,746.40
092 - Capital Improvement Proj Fund - 1,457,778.84 (81,636.84) 51,968,852.70 11,106,012.28
371,284.89
(102,869.56)
867,893.86
10,459.01
13,182.84
(2,917,219.67)
306,133.12
023 - Housing Fees 496,481.64
024 - Traffic Mitigation Fund 36,707.11
025 - Gas Tax Fund 583,150.31
001 - General Fund 13,963,883.84
005 - Sewer Fund 3,178,481.35
351,080.73
8,355,456.83
Fund Balance Report
City of Buellton, CA 1/31/2024
Fund July 1, 2023
Balance
Total Revenues
CITY OF BUELLTON
City Council Agenda Staff Report
City Manager Review: SW
Council Agenda Item No.: 4
To: The Honorable Mayor and City Council
From: Shannel Zamora, Finance Director
Meeting Date: March 14, 2024
Subject: Financial Report for the Second Quarter Ending December 31, 2023 ______________________________________________________________________________
BACKGROUND
Four times each year, City staff completes a comprehensive analysis of City finances, including projected fund balances, revenues to date, departmental budgets, expenditures, and encumbrances. This financial report focuses on the Second Quarter of FY 2022-23 and summarizes the quarter ended December 31, 2023 for the General Fund, Enterprise Funds and Capital Improvement Fund.
Attachment 1 provides an overview of the current economic outlook on the local, state and national levels; General Fund revenues, expenditures, projected fund balances; and activity in the Enterprise Funds. Though this information is not audited and does not contain all the usual periodic adjustments, accruals or disclosures, the information does provide a picture of the City’s activity and developing financial trends. Attachment 2 focuses on the status of the Capital Improvement Budget at the end of the quarter ended December 31, 2023.
FISCAL IMPACT
The Interim financial statement provides the community with an understanding of the financial activity of the City’s primary funds.
RECOMMENDATION
That the City Council receive and file the Second Quarter Financial Report.
ATTACHMENTS
Attachment 1 - Quarterly Financial Report for the period December 31, 2023 Attachment 2 - Quarterly Capital Improvement Project Report for the period ending December 31, 2023
Quarterly Financial Report – FY 2023-24 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2023 1 Overview
The purpose of this financial report is to provide
financial information for the City of Buellton.
This report focuses on the second quarter of
fiscal year 2023-24 and covers the period July 1,
2023 through December 31, 2023. The report is
presented quarterly and concentrates on the
General Fund and Enterprise Funds. The
quarterly financial report presents the City’s
financial position, considers economic factors
and highlights trends based on the City’s budget
versus what actually occurred during the period.
A discussion of other economic factors provides
a means of comparing the local economy against
larger economic events that may affect the City
of Buellton. This quarterly financial report is a
valuable tool to the Council, staff and general
public.
U.S Economy
While job growth was neutral in December
2023, the U.S. economy continues its resilience
despite higher interest rates, labor issues, and
political issues. According to a CNB report,
investors are nervous that a resilient economy
could force the Federal Reserve to keep interest
rates high and perhaps propose new rate hikes
as inflation remains high.
According to the Federal Reserve meeting in
December 2023, officials agreed to hold interest
rates in their ongoing fight against inflation.
They also agreed that policy should remain
restrictive until the Committee is confident that
inflation is moving down sustainably toward its
objective. The minutes indicate that
policymakers are divided over the need for
additional interest-rate hikes this year.
The Federal Reserve kept the target range for
the federal funds rate at a 22-year high of 5.25
percent to 5.5 percent following a 25 basis
points hike in July.
According to the Bureau of Economic Analysis
(BEA), the real domestic product (GDP)
increased at an annual rate of 3.2 percent in the
fourth quarter of 2023. The increase in this
quarter primarily reflected increases in
consumer spending, exports, and state and local
government spending.
According to the BLS, the consumer price index
(CPI) for all items over the last 12 months as of
December 2023 was 3.4 percent, a 0.3 percent
increase from November. The energy index was
the largest contributor to the monthly all items
increase, followed by an increase in the food
index of 0.2 percent. The index for all items less
food and energy rose 0.3 percent, including
shelter, motor vehicle insurance and medical
care.
According to the Bureau of Labor Statistics (BLS),
the current unemployment rate remained
steady at 3.7 percent as of December 2023.
Nonfarm payroll increased 216,000. Job gains
occurred in government; health care; social
assistance; and construction. Losses were
reported in Transportation and Warehousing.
State Economy
According to the Employment Development
Department (EDD), California’s unemployment
rate rose slightly to 5.1 percent, a 0.2 percent
increase from the prior month and up 1.0
percent over the year. The state added 23,400
nonfarm payroll jobs. Six of the eleven industry
CITY OF BUELLTON
Quarterly Financial Report
Second Quarter Ending December 31, 2023
FY 2023-24
Second Quarter
March 14, 2023
Quarterly Financial Report – FY 2023-24 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2023 2 sectors gained jobs in December with Private
Education and Health Services (+13,200) leading
the way thanks to above average increases in
Nursing Care Facilities and Individual and Family
Services. Government (+8,100) experienced
increases in both City Government and Special
Districts. Leisure and Hospitality (+7,100) also
had notable gains in part to job gains in the
Accommodation industry group. Professional
and Business Services (-3,800) posted the largest
loss, largely due to reductions in Employment
Services.
According to the BLS, CPI in California’s Los
Angeles area in December 2023, area prices
were steady at 3.5 percent from a year ago.
Food prices rose 3.8 percent. Energy prices
increased 3.1 percent, largely due to higher cost
of electricity, however gasoline decreased
during the past year. CPI for all items less food
and energy increased 3.4 percent over the year.
Factors contributing to the increase included
other goods and services (9. percent), and
shelter (4.7 percent), then partially offset by
lower prices for used cars and trucks (-1.3
percent) and medical care (-0.4 percent).
Per California Association of Realtors, sales units
and inventory have both declined over the past
year with not enough new inventory backfilling
the sold units. Sales at more affordable price
points have slowed faster than higher price
points due to a lock-in effect. The statewide
median home price in December was $750,181,
up 3.0 percent from the prior year.
City of Buellton Economy
The City’s General Fund ended the second
quarter of 2023-24 with about $13.3 Million in
Cash Balance. Current revenue is 38.12 percent
of budget projections while current
expenditures are at 35.70 percent of budget.
The City is heavily reliant on sales tax and
transient occupancy taxes (TOT) which continue
to show growth after the losses generated from
the COVID pandemic. The City’s hotel occupancy
rates have declined slightly but are relatively
stable. The growth in sales tax is mostly due to
the Auto Transportation and Fuel and Service
Station business industry categories.
The City has two Enterprise Funds: Water and
Sewer Funds. The goal of these funds is to
finance or recover cost of providing services to
the public through user charges. These funds are
supported by charging for water and sewer
services.
The Wastewater Fund ended the second quarter
with a combined Fund Balance of about $3.28
Million and $1.65 Million in cash. Wastewater
operating revenue ended the second quarter at
52.80 percent while expenses were at 54.01
percent.
The Water and Water Capital Fund ended the
second quarter with a combined Fund Balance
of about $8.78 Million and $6.02 Million in cash.
Water Fund Operating revenues ended the
second quarter at 59.95 percent while operating
expenses were at 49.32 percent.
Quarterly Financial Report – FY 2023-24 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2023 3
GENERAL FUND
General Fund Balance
Table 1 below shows that with 50 percent of the fiscal year complete, revenues are within projections at 38.12 percent while expenditures are within budget at 35.70 percent of appropriations. “Revenue versus budget” gaps are explained in the next section.
General Fund - Fund Balance Original Budget Current Budget Actual Percent Fund Balance at Start of Year $ 13,897,197 $ 13,897,197 $ 13,963,884 Revenues* 15,266,889 15,266,889 $ 5,820,381 38.12%
Expenditures* (13,276,550) (13,649,650) $ (4,872,444) 35.70% Est.Fund Balance at End of Quarter 15,887,536 15,514,436 $ 14,911,821 Change in Fund Balance 1,990,339 1,617,239 $ 947,937
* Includes transfers for Capital Improvement Projects
Table 1: General Fund Balance
Table 2 below provides summary comparison information on revenues and expenditures through the quarter ending December 31, 2023 versus the prior year quarter ending December 31, 2022.
Q2 FY 2023-24 Q2 FY 2022-23
Increase
(Decrease) Percent
Revenues:
Taxes $ 5,247,012 $ 5,399,153 $ (152,141) -2.82%
Fees and Permits 11,830 12,110 $ -2.31% (280)
Fines and Penalties 4,124 4,377 $ -5.77% (253)
Charges for Current Services 54,366 65,282 $ (10,916) -16.72% Use of Monies and Properties 333,236 111,356 $ 221,880 199.25% Revenue from Other Agencies 152,969 131,276 $ 16.52% 21,693 Other Revenue* 16,843 49,040 $ (32,197) -65.65%
Total Revenue $ 5,820,381 $ 5,772,594 $ 47,787 0.83%
Expenditures:
Employee Services $ 1,157,579 $ 1,020,810 $ 136,769 11.82% Operating and Maintenance $ 3,479,043 $ 4,376,810 $ (897,767) -25.80% Transfers for Capital Outlay $ 221,728 $ 247,083 $ (25,356) -11.44% Minor Capital $ 14,095 $ 10,327 3,767 26.73%
Total Expenditures $ 4,872,444 $ 5,655,031 (782,587) -16.06% Change in Fund Balance $ 947,937 $ 117,563 830,374 706.32% Table 2: Previous Year Comparison
Quarterly Financial Report – FY 2023-24 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2023 4 Total revenues through the second quarter are $47,787 (0.83%) higher than the previous fiscal year during the same period. The revenue category with the largest dollar increase is “Use of Monies and Properties”. The increase is mainly due to higher interest rates being earned on the Money Market, Certificate of Deposits (CD) and in the Local Agency Investment Fund (LAIF). Beginning in November 2022, the City moved $5 million of idle cash into a money market fund earning a significant increase in the interest rate which resulted from an average monthly earning of $3,529 to a monthly average of $9,790. In addition, annual lease receipts from the AT&T tower and Santa Ynez Valley Horseback Rides experienced a rate increase per their respective lease contract resulting in higher lease revenue during the current fiscal year. The revenue category with the largest dollar decrease is “Taxes”. The majority of the decrease is due to a slight downward trend in transient occupancy tax (TOT). Compared to TOT revenue through December 2022, TOT through December 2023 was $157,029 less due to a decrease in the average occupancy rate. The average occupancy rate for that same time period is 73% compared to 68% respectively.
Total expenditures are $782,587 (16.06%) lower than the previous fiscal year’s period. The increase of $136,769 (11.82%) in Employee Services is due to the 5.6% cost-of-living adjustment received by all the City’s full-time employees in addition to the medical benefit increase which became effective January 1, 2023. In addition, the vacant Assistant/Associate Planner position became filled in January 2023 resulting in budget savings the first half of the fiscal year 2022-23 compared for fiscal year 2023-24.
The operating and maintenance expenditure category is the largest category with the largest decrease of $897,768 (25.80%). The majority of the decrease is due to a one-time additional discretionary payment (ADP) of about $1.2 million made in November 2022 to the California Public Employees’ Retirement System (CalPERS) towards the City’s unfunded accrued liability (UAL). The ADP paid off the City’s UAL as of the June 30, 2021 valuation report. Excluding the CalPERS one-time payment, operating and maintenance expenditures increased by about $373,000 (12.00%). The increase is mostly due to the increase in the contract for public safety services through the Santa Barbara County’s Sheriff Department which is $186,146 (15.41%) higher than the previous fiscal year’s first half. Additional increases for contract services is due to new contract renewal rates or new contracts such as grant management company, California consulting.
Capital improvement projects (CIP) expenditures currently in progress through December 31, 2023 is $221,728 ($25,356, or 11.44% less than last year) and are as follows:
Project #092-205 City Hall Roof Repairs - $36,910
Project #092-220 Willemsen Parking Lot - $20,098
Project #092-221 Willemsen House Renovation - $24,938 Project #092-307 McMurray Road Widening/TS - $12,299
Project #092-321 FY 2022-23 Road Maintenance Project - $102,911
Quarterly Financial Report – FY 2023-24 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2023 5 Project #092-322 FY 2023-24 Road Maintenance Project - $4,472 Project #092-401 River View Park Miscellaneous Improvements - $20,100
Top Five General Fund Revenues
Top Five Revenues
Original
Budget
Current
Budget YTD Actual Percent
Sales Tax $ 3,505,488 $ 3,505,488 $ 1,820,915 51.94%
Transient Occupancy Tax 3,800,000 $ 3,800,000 2,187,166 57.56% Property Tax 1,938,448 $ 1,938,448 1,095,033 56.49%
MVLF Swap 617,957 $ 617,957 0.00% -
Franchise Fees 434,500 $ 434,500 33.12% 143,898
Other Revenues* 594,571 $ 594,571 96.43% 573,369
Total Revenues $ 10,890,964 $ 10,890,964 $ 5,820,381 53.44% Use of Reserves 4,375,925 4,375,925 0.00% -
Total Funding Sources $ 15,266,889 $ 15,266,889 $ 5,820,381 38.12% Table 3
Sales Tax
At the end of the second quarter, the City received 51.94 percent of the total projected Sales Tax revenue. Payments are recorded when received and applied to the corresponding month of sales; usually payment is received from the State of California two months after the sales tax is collected. Revenue from sales tax has been received through December 2023. Sales tax revenue fluctuates each month in conjunction with seasonal flows.
Transient Occupancy Tax (TOT)
TOT revenue is a major component of the City’s General Fund. The City receives 12 percent of the total taxable rent collected from each hotel within the City. TOT payments for the reporting period are due on the 20th of the following month and cause revenue streams to lag one month. The City received 57.56 percent of anticipated revenues. Even though the City is experiencing lower occupancy rates, higher hotel prices continue to keep TOT revenue steady and within budget projections.
Property Tax
The City’s property tax revenues are at intervals set by the Santa Barbara County Auditor-Controller, usually in December and April. Property tax is at 56.49 percent of projected revenue. The City’s ongoing share of property tax is projected to grow at a steady pace as the current housing market conditions remain stable. Growth is anticipated to be 4.29 percent from the prior year.
Top Five Revenues for the City of Buellton’s General Fund are Sales Tax, Property Tax, Transient Occupancy Tax (TOT), Motor Vehicle License Fee (MVLF) and Franchise Fees. These revenues account for about 93% of total General Fund Revenues.
Quarterly Financial Report – FY 2023-24 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2023 6 Property Tax in Lieu of Motor Vehicle License Fee (MVLF Swap) Payments from the Santa Barbara County Auditor-Controller are received throughout the year, usually January and June. This revenue is trending upwards based on historic receipts. MVLF fees are expected to be within budget by the end of the fiscal year.
Franchise Fees
Franchise fees are received monthly, quarterly and annually. The majority of the City’s Franchise Fees are collected from Marborg Industries, the City’s solid waste service provider. Other franchise fees are received from Comcast, PG&E and SoCal Gas. Franchise fees ended the second quarter at 33.12 percent of revenue projections. Franchise are expected to be within budget at the end of the fiscal year as PG&E and SoCal franchise fees are issued in March/April.
General Fund Expenditures
Table 4 summarizes operating costs by department. As of December 31, 2023, or 50 percent of the year expended, the General Fund ended the second quarter at 35.70 percent expended (including CIP). Actual General Fund expenditures were approximately $4.87 Million. Almost all Budget Units ended the second quarter within budget with the exception of Non-Departmental, Library, and Streetlights and Public Works- Parks.
Department Expenditures
Adopted
Budget
Current
Budget YTD Actual % Expended
401-City Council 175,857 175,857 79,308 45.10%
402-City Manager 340,173 343,173 177,688 51.78%
403-City Clerk/Human Resources 148,413 148,413 75,295 50.73% 404-City Attorney 212,800 212,800 81,705 38.40%
410-Non-Departmental 1,208,077 1,341,077 880,778 65.68% 420-Finance 241,266 241,266 114,245 47.35%
501-Police and Fire 2,772,189 2,987,539 1,527,926 51.14% 510-Library 201,229 201,229 197,549 98.17%
511-Recreation 738,351 738,351 280,033 37.93%
550-Street Lights 50,000 50,000 36,409 72.82%
551-Storm Water 245,700 245,700 109,398 44.53%
552-Public Works - Parks 560,700 560,700 294,568 52.54% 556-Public Works - Landscape 187,300 187,300 69,750 37.24% 558-Public Works - General 899,747 899,747 420,037 46.68% 565-Planning (Comm Dev) 918,823 918,823 306,027 33.31%
Transfer to CIP Fund 92 4,375,925 4,397,675 221,728 5.04% Total All Departments 13,276,550 13,649,650 4,872,444 35.70% Table 4: General Fund Expenditures by Department
Quarterly Financial Report – FY 2023-24 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2023 7 The Non-Departmental budgetary unit includes one-time annual payments during the first two quarters.
Those annual payments include: Property and liability insurance, Worker’s Compensation Insurance, CalPERS Accrued Unfunded Liability (UAL), support for community organizations and support for the Buellton Senior Center. These annual payments amount to approximately 60 percent of the total yearto-date expenditures. Other significant expenditures in Non-Departmental include monthly payment for contract services with the Buellton Visitors Bureau. The Non-Departmental budgetary unit is expected to be within budget at year-end.
The City of Buellton contracts with the City of Goleta for library services. The annual cost of providing library services is paid as a lump-sum in July causing the Library Department to nearly meet its budget at the end of the second quarter. The Library Department is expected to remain within budget at the end of the fiscal year.
The overage in Street Lights category is due to catch-up charges from December 2022 through September 2023 for city-wide street and highway lighting which includes 134 lamps. Of the catch-up charges, $8,824 were for prior fiscal year charges from December 2022 to June 2023. Last fiscal’s year’s budget showed budget savings of about $11,000 due to the outstanding charge during that period.
About $4,475 of the catch-up charges are for the current fiscal year. Overall, electricity cost have decreased since the installation of solar lights throughout the City. Year-to-date electricity cost is $53,427 compared to $71,996 last year during the same period. That is a decrease of $18,569 (25.79%). Future cost of electricity for will be monitored.
The overage in Public Works – Parks is mostly due to the prior-year invoice received from the Botanic Garden for their FY 2022-23 contribution. Which resulted in a $27,000 overage. The overage will require a budget amendment during the Mid-Year review.
Major Expenditure Variances
Table 5 and Figure 1 show General Fund operating costs and minor capital expenditures summarized by type. With 50 percent of the fiscal year completed, three of the budget categories by type exceeds budget projections.
Expenditures By Type
Original
Budget
Current
Budget YTD Actual
% of Total
Expenditures % Expended
Staffing 2,405,887 2,405,887 1,156,924 23.7% 48.1%
Contract Services 4,738,848 4,954,198 2,501,573 51.3% 50.5% Telecomm and Utilities 361,089 361,089 218,060 4.5% 60.4% Supplies and Materials 28,295 28,295 13,594 0.3% 48.0%
Repair and Maintenance 317,807 317,807 168,347 3.5% 53.0% Transfer to Other Funds 4,416,571 4,438,321 221,728 4.6% 5.0% Other Operating Costs 919,280 1,055,280 578,124 11.9% 54.8% Minor Capital 88,773 88,773 14,095 0.3% 15.9%
Total by Type 13,276,550 13,649,650 4,872,444 100.0% 35.7% Table 5: Expenditure Categories
Quarterly Financial Report – FY 2023-24 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2023 8 Figure 1
The top three spending categories are: Contract Services, Staffing, and Other Operating costs. Contract Services include services for Police, Fire Department, Legal Services, Engineering, Landscaping Services, Visitor’s Bureau and other services. Contract Services accounts for 51.3 percent of General Fund expenditures. Staffing includes salary and benefits and accounts for 23.7 percent of General Fund expenditures.
The Other operating cost category represents 11.9 percent of expenditures. This category is currently over budget but is expected to be within budget at the end of the fiscal year. Examples of costs in this category are annual payments for Property, liability and worker’s comp insurance, support for community organizations and support for the Buellton Senior Center. This cost category also includes expenditures incurred for Buellton Recreation programs and Art and Culture Programs.
The overage in Telecomm and Utilities is due to annual software license fees paid at the beginning of the fiscal year and a catch-up payment to PG&E for street lights. The overage in Repairs and Maintenance is mostly due to the FY 2022-23 payment for the Botanic Garden for maintenance. Without the missed invoice, the Repairs and Maintenance cost category would be within 44.5 percent expended.
Staffing, 23.7%
Contract Services,
51.3%
Telecomm and
Utilities, 4.5%
Supplies and
Materials, 0.3%
Repair and
Maintenance, 3.5%
Transfer to Other
Funds, 4.6%
Other Operating
Costs, 11.9%
Minor Capital, 0.3%
Expeditures By Type
Quarterly Financial Report – FY 2023-24 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2023 9 Figure 2
General Fund Trend
Figure 2 illustrates the Quarterly General Fund Revenue versus Expenditure Trend. As illustrated in the figure, revenue cash flows tend to lag a couple of quarters and usually exceed expenditures by the end of the fiscal year. Over the last few years, both revenue and expenditures have been increasing at a consistent pace.
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
FY 19-20 Q1FY 19-20 Q2FY 19-20 Q3FY 19-20 Q4FY 20-21 Q1FY 20-21 Q2FY 20-21 Q3FY 20-21 Q4FY 21-22 Q1FY 21-22 Q2FY 21-22 Q3FY 21-22 Q4FY 22-23 Q1FY 22-23 Q2FY 22-23 Q3FY 22-23 Q4FY 23-24 Q1FY 23-24 Q2 Quarterly Revenue vs. Expenditures
Revenue
Quarterly Financial Report – FY 2023-24 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2023 10
ENTREPRISE FUNDS
The Enterprise Fund Balance and Statement of Net Position for the second quarter of Fiscal Year 2023- 24 are shown below.
Fund Balance Summary
Enterprise Fund Balance Wastewater
Wastewater
Capital Water Water Capital
Beginning Fund Balance $ 3,178,481 $ 351,081 $ 8,355,457 $ 306,133 Operating Revenue & Transfers 653,505 59,536 1,496,761 22,785 Operating Expenses & Transfers (824,077) (130,239) (1,396,755) (3,302) Profit(Loss) $ (170,572) $ (70,703) $ 100,006 $ 19,483
Ending Fund Balance $ 3,007,910 $ 280,378 $ 8,455,463 $ 325,616 Change in Fund Balance (170,572) (70,703) 100,006 19,483 Table 6 Note: Operating expenses exclude depreciation and include transfers for CIPs.
Table 6 illustrates the ending Fund Balance of each Enterprise Fund. The change in Fund Balance is attributed to the excess or deficit of revenue over expenses. Table 7 is the Statement of Net Position, illustrating total assets minus total liabilities for the period.
Statement of Net Position Wastewater
Wastewater
Capital
Wastewater
Funds Total Water Water Capital Water Funds Total
ASSETS
Current assets:
Cash and Investments 3,351,262 (1,857,194) 1,494,068 7,990,598 (2,734,780) 5,255,818 Receivables 159,025 - 159,025 230,720 - 230,720
Inventory - - - 141,916 - 141,916
Prepaid Items - - - 393,389 - 393,389
Total current assets 3,510,287 (1,857,194) 1,653,093 8,756,623 (2,734,780) 6,021,843 Capital assets (net of
accumulated depreciation) 1,237,173 2,137,572 3,374,745 2,184,015 3,060,396 5,244,411 Other assets 383,228 - 383,228 382,349 - 382,349
- -
Total Assets: $ 5,130,688 $ 280,378 $ 5,411,066 $ 11,322,986 $ 325,616 $ 11,648,603 -
LIABILITIES
Current Liabilities 94,380 - 94,380 120,358 - 120,358
Noncurrent Liabilities 2,013,294 - 2,013,294 2,743,483 - 2,743,483 Other Liabilities 15,104 - 15,104 3,683 3,683 - -
Total Liabilities: $ 2,122,779 $ - $ 2,122,779 $ 2,867,523 $ - $ 2,867,523 - -
NET POSITION (Assets - Liabilities) $ 3,007,910 280,378$ $ 3,288,288 $ 8,455,463 $ 325,616 $ 8,781,079 Net Position Breakdown
Net Investment in Capital Assets 1,237,173 280,378 1,517,551 2,184,015 325,616 2,509,631 Restricted for capital expansion - -
Unrestricted 1,770,736 1,770,736 - 6,271,448 6,271,448 - Total Net Position $ 3,007,910 $ 280,378 $ 3,288,288 $ 8,455,463 $ 325,616 $ 8,781,079 Table 7
Quarterly Financial Report – FY 2023-24 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2023 11 Wastewater and Wastewater Capital Funds
Wastewater and
Wastewater Capital Funds Wastewater
Wastewater
Capital Wastewater Total
Operating Revenues
Charge for Services 634,950 - 634,950
Interest Income 18,556 - 18,556
Connection Fees - 59,536 59,536
Other Revenues - - -
Total Operating Revenue 653,505 59,536 713,042
Operating Expenses
Employee Services 257,103 - 257,103
Operating & Maintenance 564,169 - 564,169
Depreciation* 143,050 7,500 150,550
Minor Capital - - -
Total Operating Expenses 964,322 7,500 971,822
Operating Profit(Loss) (310,817) 52,036 (258,780)
Transfers In (Out)
Transfers from Reserves - - -
Transfers In - CIP - - -
Transfers Out - CIP** 2,805 130,239 133,044
Total Revenue 653,505 59,536 713,042
Total Expenditures 967,127 137,739 1,104,866
Net Profit (Loss) (313,622) (78,203) (391,825)
*Depreciation is estimated. Capital Expenditures recorded here and depreciated annually. ** For information purposes only, capitalized at the end of the fiscal year.
Revenue and Expenses
Table 8 summarizes Revenue and Expenditures for the Wastewater and Wastewater Capital Funds. On the Financial Statements, both funds are combined as one fund. The Wastewater Capital Fund is structured to record capital contributions and is used to record capital improvements that enhance capacity. The change in Fund Balance is due to planned operating and CIP expenditures exceeding estimated revenue from charges for wastewater service and connection fee revenue and offset by any existing Fund Balance. The Wastewater Funds ended the second quarter with approximately $1.65 Million in cash combined (Table 7) and combined Fund Balance of approximately $3.28 Million.
Table 9 illustrates the Wastewater Fund budget to actuals. Wastewater Fund operating expenditures have exceeded operating revenues by $310,817 at the end of the second quarter 2023-24 (excludes Capital Improvement expenses). In accordance with Generally Accepted Accounting Principles (GAAP), capital expenditures are not recorded as expenditures; rather, depreciation expense is recorded over each asset’s useful life. At year-end, the Wastewater Fund will transfer funds to the Capital Funds. The amount spent on capital projects are capitalized and shown on the Balance Sheet at the end of the fiscal year.
Quarterly Financial Report – FY 2023-24 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2023 12 Charges for Services exceed budget projections at 52.36 percent. Interest income drastically exceeds projections due to the current higher interest earnings. Stronger interest rates are expected as the Federal Reserve continues to hike interest rates. Overall, Wastewater operating revenues are at 52.80 percent of budget projections.
Wastewater operating expenditures are at 52.80 percent of the budget. Overall, Water Fund expense categories were within budget, with the exception of operating and maintenance. The Wastewater Fund utilizes reserves to fund Capital Improvement projects (CIPs). The budgeted transfer out for CIPs for FY 2023-24 is $565,000. Table 10 illustrates the Wastewater Capital budget to actuals.
Wastewater Fund 005 Original
Budget
Current
Budget YTD Actuals Percent of Budget
Operating Revenues
Charge for Services 1,212,650 1,212,650 634,950 52.36%
Interest Income 25,000 25,000 18,556 74.22%
Other Revenues - - - 0.00%
Total Operating Revenue 1,237,650 1,237,650 653,505 52.80% Operating Expenses
Employee Services 537,875 537,875 257,103 47.80%
Operating & Maintenance 893,629 918,629 564,169 61.41%
Depreciation* 286,100 286,100 143,050 50.00%
Minor Capital 43,000 43,000 - 0.00%
Total Operating Expenses 1,760,604 1,785,604 964,322 54.01% Operating Profit(Loss) (522,954) (547,954) (310,817)
Transfers In (Out)
Transfers In- Reserves for
Operating 522,954 547,954 0 0%
Transfers In - Reserves
for CIP 565,000 565,000 0 0%
Transfers Out - CIP** (565,000) (565,000) (2,805) 0%
Total Revenue 2,325,604 2,350,604 653,505 28%
Total Expenditures (2,325,604) (2,350,604) (967,127) 41% Net Profit (Loss) - - (313,622)
*Depreciation is estimated. Capital Expenditures recorded here and depreciated annually. ** For information purposes only, capitalized at the end of the fiscal year.
Table 9
Wastewater Capital 006 Original Budget Current Budget YTD Actuals Percent Revenues
Connection Fees - - 59,536 0%
Interest Income - - - 0%
Transfers from Reserves - - - 0%
Transfer In from Fund 005 315,000 315,000 - 0%
Total Revenue 315,000 315,000 59,536 19%
Expenses
Depreciation 15,000 15,000 - 0%
Transfer to CIP Projects 300,000 300,000 130,239 43%
Total Expenses 315,000 315,000 130,239 41%
Table 10
Quarterly Financial Report – FY 2023-24 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2023 13 Water and Water Capital Funds
Water and Water Capital
Funds Water
Water
Capital Water Total
Operating Revenues
Charge for Services 1,437,731 - 1,437,731
Interest Income 58,991 - 58,991
Connection Fees - 22,785 -
Other Revenues 40
Total Operating Revenue 1,496,761 22,785 1,519,546
Operating Expenses
Employee Services 182,917 - 182,917
Operating & Maintenance 891,349 -
Depreciation* 100,000 17,500 117,500
Minor Capital - - -
Total Operating Expenses 1,174,266 17,500 300,417
Operating Profit(Loss) 322,495 5,285 327,780
Transfers In (Out)
Transfers from Reserves - - -
Transfers In - CIP - - -
Transfers Out - CIP** (322,489) (3,302) (325,791)
Total Revenue 1,496,761 22,785 1,519,546
Total Expenditures 1,496,755 20,802 626,208
Net Profit (Loss) 1,983 6 1,989
*Depreciation is estimated. Capital Expenditures recorded here and depreciated annually. ** For information purposes only, capitalized at the end of the fiscal year.
Table 11
Revenue and Expenses
Table 8 summarizes Revenue and Expenditures for the Water and Water Capital Funds. On the Financial Statements, both funds are combined as one fund. The Water Capital Fund is structured to record capital contributions and is used to record capital improvements that enhance capacity. The change in Fund Balance is due to planned operating and CIP expenditures exceeding estimated revenue from charges for Water service and connection fee revenue and offset by any existing Fund Balance. The Water Funds ended the second quarter with approximately $6.0 Million in cash combined (Table 7) and combined Fund Balance of approximately $8.78 Million.
Table 12 illustrates the Water Fund budget to actuals. Water Fund operating revenues have exceeded operating expenditures by $322,495 at the end of the second quarter 2023-24 (excludes Capital Improvement expenses). In accordance with Generally Accepted Accounting Principles (GAAP), capital expenditures are not recorded as expenditures; rather, depreciation expense is recorded over each asset’s useful life. At year-end, the Water Fund will transfer funds to the Capital Funds. The amount spent on capital projects are capitalized and shown on the Balance Sheet at the end of the fiscal year.
Quarterly Financial Report – FY 2023-24 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2023 14 Charges for Services exceed budget projections at 58.76 percent. Interest income drastically exceeds projections due to the current higher interest earnings. Stronger interest rates are expected as the Federal Reserve keeps interest rates high. Overall, Water operating revenues are at 59.95 percent of budget projections.
Water operating expenditures are at 49.32 percent of the budget. Overall, Water Fund expense categories were within budget. The Water Fund utilizes reserves to fund Capital Improvement projects (CIPs). The budgeted transfer out for CIPs for FY 2023-24 is $1,553,415. Table 13 illustrates the Water Capital budget to actuals.
Water Fund 020 Original
Budget
Current
Budget YTD Actuals Percent of Budget
Operating Revenues
Charge for Services 2,446,670 2,446,670 1,437,731 58.76% Interest Income 50,000 50,000 58,991 117.98%
Other Revenues - - 40 0.00%
Total Operating Revenue 2,496,670 2,496,670 1,496,761 59.95% Operating Expenses
Employee Services 369,294 369,294 182,917 49.53%
Operating & Maintenance 1,768,380 1,793,380 891,349 49.70% Depreciation* 200,000 200,000 100,000 50.00%
Minor Capital 18,000 18,000 - 0.00%
Total Operating Expenses 2,355,674 2,380,674 1,174,266 49.32% Operating Profit(Loss) 140,996 115,996 322,495
Transfers In (Out)
Transfers In- Reserves for
Operating - - 0 0%
Transfers In - Reserves
for CIP 1,305,008 1,437,419 0 0%
Transfers Out - CIP** (1,446,004) (1,553,415) (322,489) 21% Total Revenue 3,801,678 3,934,089 1,496,761 38%
Total Expenditures (3,801,678) (3,934,089) (1,496,755) 38% Net Profit (Loss) - - 6
*Depreciation is estimated. Capital Expenditures recorded here and depreciated annually. ** For information purposes only, capitalized at the end of the fiscal year.
Table 12
Water Capital 021 Original Budget Current Budget YTD Actuals Percent Revenues
Connection Fees - - 22,785 0%
Interest Income - - - 0%
Transfers from Reserves - - - 0%
Transfer In from Fund 020 385,000 385,000 - 0%
Total Revenue 385,000 385,000 22,785 6%
Expenses
Depreciation 35,000 35,000 17,500 50%
Transfer to CIP Projects 350,000 350,000 3,302 1%
Total Expenses 385,000 385,000 20,802 5%
Table 13
Budget Report
City of Buellton, CA
Account Summary
For Fiscal: 2023-24 Period Ending: 12/31/2023
Original
Total Budget
Current
Total Budget
Fiscal
Activity
Variance
Favorable
Percent
Used
Fund: 092 - Capital Improvement Proj Fund
Funding Source
092-49726 Transfer from Gas Tax Fund 297,009.00 297,009.00 48,084.49 248,924.51 16.19% 092-49727 Transfer from General Fund 4,375,925.00 4,397,675.00 221,727.68 4,175,947.32 5.04% 092-49728 Transfer from Measure A 906,518.00 1,124,381.00 265,426.67 858,954.33 23.61% 092-49729 Transfer from Sewer Fund 550,000.00 550,000.00 133,044.09 416,955.91 24.19% 092-49732 Transfer from Water Fund 1,411,004.00 1,518,415.00 325,791.05 1,192,623.95 21.46% 092-49733 Trsfr from Local Trans Fund 10,000.00 10,000.00 0.00 10,000.00 0.00% 092-49734 Transfer from ARPA Fund 1,228,698.00 1,228,698.00 382,068.02 846,629.98 31.10% Funding SourceTotal: 8,779,154.00 9,126,178.00 1,376,142.00 7,750,036.00 15.08% Expense
Department: 102 - Storm Drain Outfall Repairs and Re-Establishment 092-102-71500 Project Management/Inspection 40,000.00 40,000.00 0.00 40,000.00 0.00% Department: 102 - Storm Drain Outfall Repairs and Re-Establishment Total: 40,000.00 40,000.00 0.00 40,000.00 0.00% Department: 205 - City Hall Repairs
092-205-74100 Construction/Improvements 50,000.00 50,000.00 36,910.00 13,090.00 73.82% Department: 205 - City Hall Repairs Total: 50,000.00 50,000.00 36,910.00 13,090.00 73.82% Department: 207 - Santa Ynez River Trail
092-207-70000 Conceptual Plan and Feasibility 50,000.00 50,000.00 0.00 50,000.00 0.00% Department: 207 - Santa Ynez River Trail Total: 50,000.00 50,000.00 0.00 50,000.00 0.00% Department: 212 - The Avenue Median 3 Improvement
092-212-70000 Conceptual Plan and Feasibility 125,000.00 125,000.00 0.00 125,000.00 0.00% Department: 212 - The Avenue Median 3 Improvement Total: 125,000.00 125,000.00 0.00 125,000.00 0.00% Department: 214 - City Hall Generator/Electrical Replacement 092-214-74100 Construction and Improvement 40,000.00 40,000.00 0.00 40,000.00 0.00% Department: 214 - City Hall Generator/Electrical Replacement Total: 40,000.00 40,000.00 0.00 40,000.00 0.00% Department: 217 - River View Park Basketball Court Resurfacing 092-217-74100 Construction and Improvement 80,000.00 80,000.00 0.00 80,000.00 0.00% Department: 217 - River View Park Basketball Court Resurfacing Total: 80,000.00 80,000.00 0.00 80,000.00 0.00% Department: 220 - Willemsen Parking Lot
092-220-70005 Design and Permitting 100,000.00 100,000.00 20,097.50 79,902.50 20.10% 092-220-71500 Project Management and Inspection 100,000.00 100,000.00 0.00 100,000.00 0.00% 092-220-74100 Construction/Improvements 1,200,000.00 1,200,000.00 0.00 1,200,000.00 0.00% Department: 220 - Willemsen Parking Lot Total: 1,400,000.00 1,400,000.00 20,097.50 1,379,902.50 1.44%
Status: Estimates being obtained.
Status: Design almost completed and will be posted to bid soon.
Status: Not yet started.
Status: Roof repairs completed.
Status: Grants being pursued. State Earmark through Department of Parks and Recreation has been obtained, which should fund concept/design/environmental.
Status: Concept alternatives being developed by planning intern.
Status: Not yet started
Budget Report
Original
Total Budget
Current
Total Budget
Fiscal
Activity
Variance
Favorable
(Unfavorable)
Percent
Used
Department: 221 - Willemsen House Renovation
092-221-70005 Design and Permitting 70,000.00 70,000.00 24,938.28 45,061.72 35.63% 092-221-71500 Project Management and Inspections 75,000.00 75,000.00 0.00 75,000.00 0.00% 092-221-74100 Construction/Improvements 1,400,000.00 1,400,000.00 0.00 1,400,000.00 0.00% Department: 221 - Willemsen House Renovation Total: 1,545,000.00 1,545,000.00 24,938.28 1,520,061.72 1.61% Department: 222 - Village Park Improvements
092-222-74100 Village Park Improvements 80,000.00 101,750.00 0.00 101,750.00 0.00% Department: 222 - Village Park Improvements Total: 80,000.00 101,750.00 0.00 101,750.00 0.00% Department: 307 - McMurray Road Widening/TS (13/14)
092-307-70005 Design and Permitting 12,935.00 12,935.00 13,098.61 -163.61 101.26% 092-307-71200 Right of Way Acquistion 316,517.00 316,517.00 8,126.30 308,390.70 2.57% 092-307-71500 Project Management and Inspections 50,000.00 50,000.00 0.00 50,000.00 0.00% 092-307-74100 Construction and Improvements 200,000.00 200,000.00 0.00 200,000.00 0.00% Department: 307 - McMurray Road Widening/TS (13/14) Total: 579,452.00 579,452.00 21,224.91 558,227.09 3.66% Department: 308 - No. Ave of the Flags Park and Ride
092-308-70005 Design and Permitting 50,000.00 50,000.00 0.00 50,000.00 0.00% Department: 308 - No. Ave of the Flags Park and Ride Total: 50,000.00 50,000.00 0.00 50,000.00 0.00% Department: 321 - Road Maintenance (2022/23)
092-321-70005 Design and Permitting 75,000.00 75,000.00 0.00 75,000.00 0.00% 092-321-71500 Road Maintenance (2022/23) 85,000.00 85,000.00 13,500.00 71,500.00 15.88% 092-321-74100 Construction/Improvements 540,000.00 757,863.00 387,103.15 370,759.85 51.08% 700,000.00 917,863.00 400,603.15 517,259.85 43.65%
Department: 322 - Road Maintenance (2023-24)
092-322-70005 Design and Permitting 80,000.00 80,000.00 0.00 80,000.00 0.00% 092-322-71500 Project Management & Inspection 80,000.00 80,000.00 11,365.00 68,635.00 14.21% 092-322-74100 Construction and Improvement 640,000.00 640,000.00 0.00 640,000.00 0.00% Department: 322 - Road Maintenance (2023-24) Total: 800,000.00 800,000.00 11,365.00 788,635.00 1.42% Department: 401 - Misc Park Improvements
092-401-74100 Construction and Improvements 50,000.00 50,000.00 20,100.00 29,900.00 40.20% Department: 401 - Misc Park Improvements Total: 50,000.00 50,000.00 20,100.00 29,900.00 40.20% Department: 603 - WTP Facilities Improvement (13/14)
092-603-74100 Construction and Improvements 150,000.00 150,000.00 0.00 150,000.00 0.00% Department: 603 - WTP Facilities Improvement (13/14) Total: 150,000.00 150,000.00 0.00 150,000.00 0.00% Department: 605 - WTP Backwash Reclamation Improvement Project 092-605-71500 Project Management and Inspections 35,000.00 35,000.00 0.00 35,000.00 0.00% 092-605-74100 Construction and Improvements 65,000.00 65,000.00 0.00 65,000.00 0.00% Department: 605 - WTP Backwash Reclamation Improvement Project Total: 100,000.00 100,000.00 0.00 100,000.00 0.00%
Status: In progress.
Status: Not yet started.
Status: Design almost complete, then structural plan check can proceed. Council approved plans to move forward on 4/27/23.
Status: Council awarded construction contract on 9/14/23. Coordinating with Contractor on procurement. Installation in February 2024.
Status: In progress.
Status: Not yet started.
Status: Construction in progress.
Status: Not yet started.
Status: Council awarded construction contract on 1/25/24. Notice to procure equipment has been issued.
Budget Report
Original
Total Budget
Current
Total Budget
Fiscal
Activity
Variance
Favorable
(Unfavorable)
Percent
Used
Department: 607 - Water Meter Upgrades
092-607-74100 Construction and Improvements 100,000.00 100,000.00 0.00 100,000.00 0.00% Department: 607 - Water Meter Upgrades Total: 100,000.00 100,000.00 0.00 100,000.00 0.00% Department: 609 - Supplemental Well/WTP Feasibility
092-609-70000 Conceptual Plan and Feasibility 50,000.00 50,000.00 0.00 50,000.00 0.00% Department: 609 - Supplemental Well/WTP Feasibility Total: 50,000.00 50,000.00 0.00 50,000.00 0.00% Department: 610 - Water Distribution System Improvements 092-610-74100 Construction and Improvements 100,000.00 100,000.00 0.00 100,000.00 0.00% Department: 610 - Water Distribution System Improvements Total: 100,000.00 100,000.00 0.00 100,000.00 0.00% Department: 613 - Res No2 Reroof
092-613-70005 Design and Permitting 19,702.00 19,702.00 16,667.50 3,034.50 84.60% 092-613-71500 Project Management and Inspections 100,000.00 100,000.00 21,794.42 78,205.58 21.79% 092-613-74100 Construction/Improvements 1,720,000.00 1,827,411.00 605,901.22 1,221,509.78 33.16% Department: 613 - Res No2 Reroof Total: 1,839,702.00 1,947,113.00 644,363.14 1,302,749.86 33.09% Department: 704 - Sewer Line Replacement
092-704-71500 Project Management and Inspections 50,000.00 50,000.00 2,805.00 47,195.00 5.61% 092-704-74100 Construction and Improvements 200,000.00 200,000.00 0.00 200,000.00 0.00% Department: 704 - Sewer Line Replacement Total: 250,000.00 250,000.00 2,805.00 247,195.00 1.12% Department: 706 - WWTP Facilities Improvement
092-706-74100 Construction and Improvements 300,000.00 300,000.00 130,239.09 169,760.91 43.41% Department: 706 - WWTP Facilities Improvement Total: 300,000.00 300,000.00 130,239.09 169,760.91 43.41% Department: 710 - WWTP Lift Station and Plant Power Reliability 092-710-71500 Project Management and Inspections 20,000.00 20,000.00 0.00 20,000.00 0.00% 092-710-74100 Construction/Improvements 280,000.00 280,000.00 63,495.93 216,504.07 22.68% Department: 710 - WWTP Lift Station and Plant Power Reliability Total: 300,000.00 300,000.00 63,495.93 236,504.07 21.17% Fund: 092 - Capital Improvement Project Fund Expenditure Total: 8,779,154.00 9,126,178.00 1,376,142.00 7,750,036.00 15.08% 6/30/2023 FY 23/24 YTD FY 23/24 YTD FY 23/24 YTD Est. 6/30/2024 Est. Fund Equity Revenue Expenditures CIP Funding Fund Equity 001 - General Fund $ 13,963,883.84 $ 5,420,268.03 $ 4,650,715.98 $ 221,727.68 $ 14,511,708.21 005 - Wastewater $ 3,178,481.35 653,505.32 821,272.14 $ 2,805.00 $ 3,007,909.53 006 - Wastewater Capital $ 351,080.73 59,536.40 - 130,239.09 $ 280,378.04 020 - Water $ 8,355,456.83 1,496,761.17 1,074,265.69 322,489.36 $ 8,455,462.95 021 - Water Capital $ 306,133.12 22,785.00 - 3,301.69 $ 325,616.43 025 - Gas Tax $ 583,150.31 134,580.16 58,204.15 48,084.49 $ 611,441.83 027 - Local Transportation Fund $ 371,284.89 6,822.89 9,999.96 - $ 368,107.82 031- Measure A $ 867,893.86 199,060.64 - 265,426.67 $ 801,527.83 032- ARPA $ 10,459.01 392,252.16 - 382,068.02 $ 20,643.15 Totals: $ 27,987,823.94 $ 8,385,571.77 $ 6,614,457.92 $ 1,376,142.00 $ 28,382,795.79
Status: Project complete. NOC approved by Council on 11/10/22.
Status: In progress.
Status: In progress.
Capital Improvement Project Funding Sources
FY 2023-24
Status: Construction in progress. Council awarded on 6/22/23.
Status: Not yet started.
Status: In progress.
Status: Generator installed. Install completed.
Fund
Fund Balance Analysis
CITY OF BUELLTON
City Council Agenda Staff Report
City Manager Review: SW
Council Agenda Item No.: 5
To: The Honorable Mayor and City Council
From: Rose Hess, Public Works Director/City Engineer
Meeting Date: March 14, 2024
Subject: Acceptance of Village Park Improvements Project ______________________________________________________________________________
BACKGROUND
At the September 14, 2023 Council Meeting, the City Council awarded Unlimited Engineering a contract in the amount of $92,500.00 for a new shade structure and swing set. The project was completed the beginning of March 2024. Staff has inspected the construction and is satisfied that the project plans and specifications have been met. The City has received the Certified Playground Safety Inspector Report for the new playground.
FISCAL IMPACT
The final construction cost of the project, was $92,500.00. This amount is within the Village Park Improvement Project budgeted in the FY 2023/24 Capital Improvement Project List (092-222) for $92,500 from General Fund.
RECOMMENDATION
That the City Council accept the Village Park Improvement Project and instruct the City Engineer to file the attached Notice of Completion.
ATTACHMENT
Attachment 1 - Notice of Completion
NOTICE OF COMPLETION
Notice is hereby given that:
1. The undersigned is the owner or corporate officer of the interest or estate hereinafter described:
2. The full name of the owner is: City of Buellton
3. The full address of the owner is: 107 West Highway 246 P.O. Box 1819
Buellton, California 93427
4. The nature of the interest or estate of the owner is “in fee”
5. A work of improvement on the property hereinafter was completed on March 4, 2024.
The work done was the installation of swing set and shade structure, and appurtenant improvements at Village Park.
6. The name of the contractor, if any, for such work of improvement was Unlimited Engineering.
7. The property on which said work of improvement was completed is 330 Valley Vineyard Circle in the City of Buellton, County of Santa Barbara, State of California, and is described as the Village Park Improvement Project.
Dated: ____________________________________
Linda Reid, City Clerk
VERIFICATION
I, the undersigned, declare that I am the City Engineer of the declarant of the foregoing Notice of Completion. I have read said Notice of Completion and know the contents thereof and the same is true of my own knowledge. I declare under penalty of perjury that the foregoing is true and correct.
Executed on March 14, 2024, at ______Buellton_______, California. (Date of Signature) (City where signed)
____________________________________________________
Rose M. Hess, Public Works Director/City Engineer
CITY OF BUELLTON
City Council Agenda Staff Report
City Manager Review: SW
Council Agenda Item No.: 6
To: The Honorable Mayor and City Council
From: Rose Hess, Public Works Director
Meeting Date: March 14, 2024
Subject: Award of Construction Contract for the SYVCO CDBG – 140 Highway 246 TI Projects – Heating/HVAC
BACKGROUND
In February 2024 the City published a Notice to Contractors inviting sealed bids for the SYVCO CDBG – 140 Highway 246 TI Project – Heating/HVAC. The Project includes 4 different “Prime” contracts: 1. Demountable Partitions; 2. T-Bar Ceilings; 3. Electrical; and 4. Heating/HVAC. This scope of work is for tenant improvements to the existing library space, to be occupied by the Santa Ynez Valley Community Outreach. The first 3 prime contracts were awarded by Council on January 25, 2024.
On March 4, 2024, the following bids were received for the project from the following contractors:
HEATING/HVAC:
Bid Amount
All Star Heating $8,700.00 .
Smith Electric and Heating $17,963.00 .
Staff has reviewed all the bid documents and has found them to be complete and correct.
All contractors licenses have been checked and are current and in good standing.
Staff recommends adding a contingency amount of $5,000 for additional repairs that may be needed. This would bring the total contract amount to $13,700.
It is anticipated that the effective date of the Notice to Proceed in order to procure materials, for work will be issued the week of March 18, 2024. The project term is 60 working days, however work would not start until the City gives a clearance once the library has relocated.
The specifications stipulate that the contractor is to procure all materials prior to field
CDBG 140 Hwy 246 TI Project Page 2 March 14, 2024
construction. However staff will work with the contractors if work can be performed with minimal intrusion to existing library operations. CDBG funds expire June 30, 2024.
FISCAL IMPACT
Expenditures made on this project will be reimbursed with CDBG funds through SYVCO, and therefore is expected to result in no net cost to the City. The City Council authorized a budget amendment to add this project to the Capital Improvement Projects in an amount of $184,885 at the December 14, 2023 meeting.
RECOMMENDATION
That the City Council award the SYVCO CDBG TI Project – Heating/HVAC contract to All Star Heating in the amount of $8,700.00 plus a contingency amount of $5,000.00 for a total contract amount of $13,700 and authorize the execution of the contract.
CITY OF BUELLTON
City Council Agenda Staff Report
City Manager Review: SW
Council Agenda Item No.: 7
To: The Honorable Mayor and City Council
From: Andrea Keefer, Planning Director
Meeting Date: March 14, 2024
Subject: Consideration of an Affordable Housing Agreement for the 430 & 440 Central Avenue Project
______________________________________________________________________________
BACKGROUND
Amalia Properties LLC is the applicant and property owner of the 430 & 440 Central Avenue project, which will construct a total of 6 units (one two-story duplex and one twostory detached ADU on each of the two lots). One unit is to be affordable at the Moderate income affordability level to satisfy the City’s Inclusionary Zoning ordinance and related project conditions of approval.
An Affordable Housing Agreement has been drafted to assure that the developer complies with the requirements pertaining to the provision of affordable housing (see Attachment 1). The Agreement requires the rent for the affordable unit to be capped at limits set forth in the Santa Barbara County Income and Price Guidelines. These rent caps are to be in place for a minimum of fifty-five (55) years. The Agreement also establishes the process of the leasing, the income certification, and the allowable occupancy for units which are income qualified. It also provides a process for subsequent income qualification and procedures for addressing increasing or decreasing incomes of tenants.
FISCAL IMPACT
The approval of the Affordable Housing Agreement is not expected to have an impact to the City’s General Fund.
RECOMMENDATION
That the City Council review and authorize the City Manager to execute the accompanying Draft Affordable Housing Agreement for the 430 & 440 Central Avenue Project.
ATTACHMENTS
Attachment 1 - Draft Affordable Housing Agreement
CITY OF BUELLTON
City Council Agenda Staff Report
City Manager Review: SW
Council Agenda Item No.: 8
To: The Honorable Mayor and City Council
From: Andrea Keefer, Planning Director
Meeting Date: March 14, 2024
Subject: Contract with Kosmont Companies to Prepare Economic and Market Analysis Study to Support Comprehensive General Plan Update and Urban Growth Boundary Update
______________________________________________________________________________
BACKGROUND
Kosmont Companies (“Kosmont”) currently contracts with the City for general Economic Development services. Kosmont typically assists the City with a variety of services related to economic development, including real estate project advisory services, and economic analyses on an as-needed basis. Kosmont was also an integral part of the preparation of the Avenue of Flags Specific Plan and Development Opportunity Reserve (D.O.R) incentive program.
A total of $20,000 is currently budgeted in the Planning Department budget for services provided by Kosmont for Fiscal Years 2023/2024 and 2024/2025. Additionally, $75,000 has been budgeted for Fiscal Years 2023/2024 and 2024/2025 for consultant work related to the General Plan Update. It is anticipated that the total cost of the proposed work would be covered by these sources.
The work to be performed is included as Attachment 1 (Kosmont Work Plan) for a total cost of $25,000. The purpose for the proposed work is to obtain information related to current demographics, economics, market supply and demand, and identifying potential funding sources and financing mechanisms that will assist in the preparation of the City’s Comprehensive General Plan Update and Urban Growth Boundary Update.
Given the tight time frame for the Urban Growth Boundary Update process, and the prior budgetary authorization of funds for the General Plan Update process, the City Manager has authorized work to be conducted. However, for the sake of transparency, this item is being placed on the City Council’s agenda for ratification of the contract’s execution.
Kosmont Work Plan Page 2 March 14, 2024
FISCAL IMPACT
The total fiscal impact to the City would be $25,000. However, there is not an anticipated need for a budget amendment, as funds are already budgeted for FY 23/24 and 24/25, as detailed previously.
RECOMMENDATION
That the City Council ratify the City Manager’s execution of this contract with Kosmont for Economic and Market Analysis Study Services in Support of the Comprehensive General Plan Update and Urban Growth Boundary Initiative, for an amount not to exceed $25,000.
ATTACHMENTS
Attachment 1 – Kosmont Work Plan
kosmon.
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Memorandum
To:
From:
Date:
City of Buellton
Scott Wolfe, City Manager
Kosmont Companies
Ken K. Hira, President
Joseph Dieguez, Senior Vice President
February 22. 2024
RE: Work Plan for Econ om le and Market Analysis to Support General Plan Update
I. BACKGROUND
Kosmont Companies ("Kosmont" or "Consultant") has provided ongoing economic development advisory se1vices to the City of Buellton ("City") for several years, including the preparation of an Economic Development Strategy and Implementation Plan and assistance w th the preparation of the Avenue of Flags Specific Plan and Development Opportunity Reserve (D.O.R.)® incenti ve
program. Kosmont has additionally prov
i
ded various real estate project advisory services and
economic analyses on an as-needed basis as directed by the City.
The City has expressed interest in retaining Kosmont for preparalion of Economic and Market Analysis to inform lhe City's General Plan Update ("GPU"), currently being initiated. Kosmont is pleased to propose the follow ng Wor1< Plan accordingly.
II. WORK PLAN
Task 1: Demographic and Economic Profile
Kosmont will prepare a current Demographic and Economic Profile of the C ty, illustrating trends across different social and economic character stics, including population, age, race/ethnicity, employment, household incomes. hOusing preferences, educational attainment. commute patterns, residenUemployee concentrations. daytime populations, and other metrics within specific geographic boundaries (e.g., City limits, radii, drive times, trade area), as deemed relevant.
Kosmont will also include an analysis of vis tation trends to/from the City using anonymized mobile app data (powered by Placer.ai) which will provide additional insights into store preferences and consumer characteristics. Findings will be assembled in Power Point presentation format.
M3ilin8Addca1\s: 1001 N. s�pu\wda Bl•td,, N,3,8.?,
Mnnh�ttan Bea.;h, Cl\ 90266
Kosmont Companies
(4;!.4) 297-1070
w,vw.kosmontrom
Phy!.K;tl Acfd�; 2301 Ro�crans Av�, Ste. 4140
El
Se,gundu, CA 90245
Task 2: Market Supply and Demand Analysis
City of Ouellton
Kosmonr work Plan for economic and Market Analysis
Fe/Jruury 22, 2024
Kosmont will prepare a Market Supply and Demand Analysis to examine the exist ng demand for var
i
ous land use typologies in the City (retail, industrial /flex, residential, hote, mixed/blended use) and to assess major market parameters and constraints. Kosmont will evaluate current market conditions and short/Jong-range potential for these land uses. Kosmont will gather current and historical (up to 1 O years) of data for variables including asset inventory, vacancy, lease rates, market absorption rates, land values, new construction, and otl'ler relevant real estate data, as appropriate to evaluate opportunities, constraints, and demand for these land uses in the City.
Findings will be assembled in PowerPoint presentation format.
Task 3: Identification of Potential Funding Sources and Financing Mechanisms Based on \he results of Tasks 1 and 2, Kosmont will identify potential funding sources and financing mechanisms (e.g., :financing distl'icts, specific grants) that would be relevant to fac litate the types of land uses being targeted by the C ty. Findings will be assembled in PowerPoint presentation format
Task 4: Meetings
Kosmont will coordinate and consult with City staff in a virtual meeting format to review progress and ensure that necessary information and documentat on are received and incorporated into work product in a timely manner. Kosmont anticipates attendance and participation in one (1) in-person meeting as related to the. larger GPU exercise.
Kosmont is available for addrtional meetings as directed by City staff to be billed on an hourly basis at Consultant's billing rates as shown 011 Attachment A.
Ill.SCHEDULE
Kosmont is prepared to commence work upon receipt of executed Agreement. Kosmont anticipates delivery of draft Economic and Market Analysis findings within ten (10) to twelve (12) weeks of assignment authorization.
IV. BUDGET AUTHORIZATION
The compensation for Tasks 1 through 4 is estimated at $25,000 for professional services (hourly) fees to be billed to the City at Consultant's billing rates as shown on Attachment A. Budget may be increased by City request at any point in time.
Kos.mcnt Compan(es.
(424) 291-1070
v/\\lw,kosmont,com
kosl.
V. ACCEPTANCE AND AUTHORJZA TION
Read, understood, and agreed to this
2. 7"oay of /4/,,,,,,._� 2024 /
City of Buellton
By: � 6q;:.,f.{ (Signatu7e} �
Name: ...)cc,rr IJg//4
(Prnt Name).
Kosmont Companies
{4'-4) 297-1070
wwwkosmont.oorn
(Title) ,.,,,
City of Bur.I/ton
Kn.,mont Work Plan for f:conomic and Marltet Analysis
Feoruary 22, 2024
Kosmont & Associates, Inc.
doing business as "Kosmont Companies''
By:---------'---
(Signature)
Name: Ken K. Hira
Its: President
31Pagc
ko.R City of Buellton
Kosmont Work Pion for Ecunomic and Market Ano/y.,is
Febroory 22, 20}.I/
Dunp21 rues
ATTACHMENT A
Kosmont Companies
2024 Public Agency Fee Schedule
Professional Services
Chairman & CEO
President
Sr. Vice PresidenVSr. Advisor/Sr. Managing Director
Vice PresidenVProject Advisor
Senior Project Analyst
Project Analyst/Project Research
Assistant Project Analyst/Assistant Project Manager
Project Promotion/Graphics/GlS Mapping Services
Cler cal Support
Additional Expenses
In addition to professional services (labor fees):
$4 75. 00/hour
$395. 00/hour
$370.00/hour
$250.00/hour
$195.00/hour
$175.00/hour
$150.00/hour
$ 95.00/hour
S 80.00/hOur
1) An administrative fee for in-house copy, fax, phone, pos1age costs. digital/technological support and related administrative expenses will be charged, which will be computed at four percent (4.0 %) of monthly Kosmont Companies professional service fees incurred; plus 2) Out-of-pocket expenditures, such as travel and mileage, professional printing, and delivery charges for messenger and overnight packages will be charged at cost. 3) Project/Market data sources for support of evaluation and analysis e.g., ESRI, Placer.ai, CoStar/STR, IMPLAN. ParcelQuest and other based on quoted project cost. 4) If Kosmont retains Third Party Vendor(s) for Client (with Client's advance approval). fees and cost will be billed to Client at 1. 1 X (times) fees and costs 5) Consultant's attendance or participation al any public meeti ng, whether such participation is in
person. digital, v deo and/or telephonic (e.g., City Council, Planning Commission, Public Agency Board, other) requested by Client and are beyond those specifically identified in the Scope of Work will be billed al the professional services (houry) fees as shown on this Attachment A. • Charges for Court/Deposition/Expert Witness-Related Appearances Court-related (non-preparation) activit es. such as court appearances, deposi tions, mediation, arbitration, dispute resoluti
on and other expert witness activities, wi
II be charged at a court rate of 1 .5
times scheduled rates, with a 4-hour minimum.
Rare:; shrill rem,,in in effect tmlil December 31, 2024.
Kosmont Companies
(424) 297-1070
vNA>.1.kc.<.rnon1.com
41 Pose
CITY OF BUELLTON
City Council Agenda Staff Report
City Manager Review: SW
Council Agenda Item No.: 9
To: The Honorable Mayor and City Council
From: Andrea Keefer, Planning Director
Meeting Date: March 14, 2024
Subject: Resolution No. 24-04 - “A Resolution of the City Council of the City of Buellton, California, Approving a One-Year Time Extension (24- TE-01) Request for Final Development Plan (16-FDP-06) Located at the Southern Terminus of Industrial Way on Assessor’s Parcel Number 099-690-048”
______________________________________________________________________________
BACKGROUND
An application has been submitted by Lonnie Roy and Cole Cervantes, applicant on behalf of SBID, LLC, owner, for a one-year time extension (24-TE-01) for Final Development Plan (16-FDP-06) located at Assessor’s Parcel Number 099-690-048 (Attachment 1– Vicinity Map). The application is included as Attachment 2. The approved final development plan is included as Attachment 3.
On January 18, 2018, the Planning Commission adopted Resolution No. 18-02 recommending approval of the Final Development Plan (16-FDP-06) and Tentative Tract Map (TTM 31061) for the Buellton Hub (BUE 17) project (Attachment 4). City Council subsequently adopted Resolution No. 18-03, approving the Final Development Plan and Tentative Tract Map on February 22, 2018 (Attachment 5).
Final Development Plans expire after 5 years (See Buellton Municipal Code Section
19.08.120). Notwithstanding the general time limits set by the Buellton Municipal Code, the code does allow an applicant to apply for up to two one-year time extensions for the Final Development Plan.
The Final Development Plan was originally set to expire on February 22, 2023. However, in advance of the date of expiration, the applicant applied for a one year time extension that extended the entitlements through February 22, 2024.
On January 19, 2024, an application for a second time extension was submitted, in advance of the date of expiration of February 22, 2024. On February 15, 2024, the Planning Commission adopted Resolution No. 24-02 (Attachment 6), recommending approval of the
Resolution No. 24-04 Page 2 March 14, 2024
time extension request to the City Council. This is the second and final request for a oneyear time extension under the Buellton Municipal Code. If approved, the Final Development Plan (16-FDP-06) would be extended to February 22, 2025; one year from the date of expiration of the second and final time extension.
The application that is before the City Council tonight is for Final Development Plan (16- FDP-06). The Tentative Tract Map (TTM 31061) is not a part of this application, as the Tentative Tract Map is valid until August 22, 2024.
Given the current property owner’s expressed desire to retain property entitlements and considering that the applicant has been working toward obtaining required permits to begin work on the site associate with the development project, Staff considers the time extension request to be reasonable.
RECOMMENDATION
That the City Council consider adoption of Resolution No. 24-04 - “A Resolution of the City Council of the City of Buellton, California, Approving a One-Year Time Extension (24-TE-01) Request for Final Development Plan (16-FDP-06) Located at the Southern Terminus of Industrial Way on Assessor’s Parcel Number 099-690-048”
ATTACHMENTS
Resolution No. 24-04
Attachment 1 – Vicinity Map
Attachment 2 – Time Extension Application
Attachment 3 – Approved Final Development Plan – Dated June 13, 2017 Attachment 4 – Planning Commission Resolution No. 18-02 Attachment 5 – City Council Resolution No. 18-03
Attachment 6 – Planning Commission Resolution No. 24-02
RESOLUTION NO. 24-04
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
BUELLTON, CALIFORNIA, APPROVING A ONE-YEAR TIME
EXTENSION (24-TE-01) REQUEST FOR FINAL
DEVELOPMENT PLAN (16-FDP-06) LOCATED AT THE
SOUTHERN TERMINUS OF INDUSTRIAL WAY ON
ASSESSOR’S PARCEL NUMBER 099-690-048
BE IT RESOLVED by the City Council of the City of Buellton as follows:
SECTION 1: Pursuant to the Zoning Ordinance of the City of Buellton, an application has been filed by SBID, LLC, Property Owner, and Lonnie Roy, Agent (the “Applicant”), requesting a one year time extension (24-TE-01) for the approved Final Development Plan (16- FDP-06) for the Buellton HUB Project (the “Project”), located at the southern terminus of Industrial Way Assessor’s Parcel Number (“APN”), 099-690-048. The 17.21-acre property is located at the southerly terminus of Industrial Way. The northern approximately three-quarters of the site has a General Plan designation of Industrial (zoned M – Industrial and Manufacturing), while approximately the southern quarter of the site is designated Open Space, Parks, and Recreation (zoned OS – Open Space).
SECTION 2: The project consists of a) 50 Apartment units and a community center in three buildings. There is a mix of one- and two-bedroom units, b) 46,676 square feet of industrial space in 4 buildings, c) 28,066 square feet of office/business space in 2 buildings with 4 rooftop residential units, d) 323 parking spaces, e) dedicated open space with public trails and paths, f) restoration of Zaca Creek.
SECTION 3: All proceedings having been duly taken as required by law, and upon review of the information provided in the staff report, consideration of the public comment, as well as other pertinent information, the City Council finds the following:
A. Record. Prior to rendering a decision on any aspect of the Project, the City Council considered the following:
1. All public testimony, both written and oral, received in conjunction with that certain public hearing conducted by the Planning Commission on February 15, 2024 (“Planning Commission Public Hearing”).
2. All oral, written, and visual materials presented by City staff in conjunction with that certain Public Hearing.
3. All public testimony, both written and oral, received in conjunction with that certain public hearing conducted by the City Council on March 14, 2024 (“City Council Public Hearing”)
Resolution No. 24-04 Page 2 March 14, 2024
4. All oral, written, and visual materials presented by City staff in conjunction with that certain Public Hearing.
5. The following informational documents which, by this reference, are incorporated herein.
a. That certain written report and attachments submitted by the Planning Department dated March 14, 2024 (the “Staff Report”). b. The project file for 16-FDP-06 and the Final Development Plan plans dated June 13, 2017.
c. The Mitigated Negative Declaration under CEQA guidelines Section 15070 through 15075 for the Project, as set forth in 17- MND-03.
B. Public Review. On the basis of evidence hereinafter listed, all administrative procedures and public participation requirements prescribed in the Buellton Zoning Ordinance have been lawfully satisfied:
1. A notice of public hearing was published in a newspaper on February 29, 2024 (the “Public Notice”), a minimum of 10 days in advance of the Public Hearing conducted on March 14, 2024.
2. The Public Notice was mailed to the Applicant, persons owning property within 300 feet of the Project site and others known to be interested in the matter on February 29, 2024, a minimum of 10 days in advance of the Public Hearing.
3. The CC Public Notice was posted in two public places on February 29, 2024, a minimum of 10 days in advance of the CC Public Hearing.
C. Environmental Clearance. As part of the original City Council approval of the Project, a Mitigated Negative Declaration (17-MND-03) was approved for the environmental review of the project in accordance with the California Environmental Quality Act (CEQA) on February 22, 2018 in accordance with the requirements of the California Environmental Quality Act (“CEQA”), Public Resources Code sections 21000 et seq., the State CEQA Guidelines, 14 California Code of Regulations sections 15000 et seq., and the CEQA Guidelines of the City of Buellton. No changes have occurred with respect to the Project, or its environmental surroundings, to require subsequent environmental review.
D. Consistency Declarations. Based on (i) the evidence presented in the Staff Report (incorporated herein by reference), and (ii) testimony and comments received in connection with the CC Public Hearing, the City Council does hereby declare as follows:
Resolution No. 24-04 Page 3 March 14, 2024
a. Findings:
i. The findings for 16-FDP-06 as originally approved in Planning Commission Resolution No. 18-02 and City Council Resolution No. 18-03 remain valid.
ii. There have been no changes to the provisions of the general plan, zoning ordinance (Title 19 of the Buellton Municipal Code), or this title applicable to the project since approval of the Final Development Plan. Final Development Plan (16-FDP-06) was approved by City Council on February 22, 2018, and that the underlying land use and zoning designations remain the same, the Final Development Plan as approved in 2018, is considered to be in compliance with applicable provisions of the general plan and zoning ordinance (Title 19 of the Buellton Municipal Code).
There have been no changes in the character of the site or its surroundings that affect how the policies of the general plan or standards of the zoning ordinance or this title apply to the project.
iii. There have been no changes to the capacities of community resources, including, but not limited to, water supply, sewage treatment or disposal facilities, roads or schools such that there is no longer sufficient remaining capacity to serve the project. iv. Processing of the Final Development Plan has been delayed, but good cause exists to grant a time extension for Final
Development Plan (16-FDP-06). The applicant has been
working toward obtaining required permits to begin work on the site associated with the development project and is actively working toward compliance with relevant conditions of
approval.
v. The time extension request (24-TE-01) was made in a timely manner and is consistent with Section 19.08.120 of the Buellton Municipal Code.
SECTION 4: Based upon the findings set forth in Section 3, the City Council hereby approves the request for a one-year time extension of Final Development Plan (16-FDP-06), through February 22, 2025.
SECTION 5: The City Clerk shall certify to the adoption of this resolution.
Resolution No. 24-04 Page 4 March 14, 2024
PASSED, APPROVED, AND ADOPTED this 14th day of March 2024. _________________________________
Dave King
Mayor
ATTEST:
__________________________________
Linda Reid
City Clerk
INDUSTRIAL WY
PARK CIR
VICTORY DR
SIX FLAGS CIR
SHADOW MOUNTAIN DR
ZACA ST
BUNDY CIR
STATE HWY 246
EVERGREEN DR
REDWOOD LN
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CITY OF BUELLTON
City Council Agenda Staff Report
City Manager Review: SW
Council Agenda Item No.: 10
To: The Honorable Mayor and City Council
From: Andrea Keefer, Planning Director
Meeting Date: March 14, 2024
Subject: Ordinance No. 24-01 - “An Ordinance of the City Council of the City of Buellton, California, Adding Buellton Municipal Code Section 19.10.140 Providing for Certification for Review of Certain Discretionary Land Use Planning Proposals for Immediate City Council Consideration” (Introduction and First Reading) ______________________________________________________________________________
BACKGROUND
The Buellton Municipal Code (BMC) governs the roles and responsibilities of the Planning Commission and the City Council as it pertains to discretionary planning applications. The existing BMC provides that the Planning Commission must first hear a discretionary planning application before it may be reviewed by the City Council. The BMC further provides for appeals to the City Council by “an applicant or any aggrieved person”.
However, occasionally, there may be certain discretionary actions that have considerations beyond normal planning and zoning issues dealt with by the Planning Commission and for which it is important to have the City Council provide direction or exercise discretionary authority on the matter at hand.
At the Planning Commission meetings of August 17, 2023 and November 16, 2023, public hearings were held to consider PC Resolution No. 23-07, recommending that the City Council approve an Ordinance relating to Certification for Review of certain discretionary land use planning proposals for immediate consideration of the City Council (Attachment 1 – August 17, 2023 PC Meeting Minutes and Attachment 2 – November 16, 2023 Draft Unapproved PC Meeting Minutes).
At the August 17th PC meeting, concerns were raised by the Planning Commission regarding the Draft Ordinance, as presented (Ordinance No. 24-01 – Original). The Planning Commission indicated at that time that, given their concerns, they were not prepared to make a recommendation for approval to the City Council on the draft Ordinance. Therefore, the Commission requested that staff bring back a resolution recommending denial. However, the Planning Commission indicated that they would consider making a recommendation for approval on the Draft Ordinance at a future
Ordinance No. 24-01 Page 2 March 14, 2024
meeting, if the language of the Draft Ordinance could be amended in order to provide further clarification on the intent, limitations and future implementation of the Ordinance.
In response to direction received from the Planning Commission, the Revised Draft Ordinance language was presented at the November 16, 2023 PC meeting. These revisions are included as redlined changes in the document (Ordinance No. 24-01 – Revised). At the conclusion of the Public Hearing and following further discussion, the Planning Commission adopted Resolution No. 23-07 (Attachment 3), recommending denial of the revised draft ordinance to the City Council.
The attachments for the matter that is before the City Council include the Original Draft Ordinance language, as well as the Revised Draft Ordinance language. City Council should consider both, and determine which, if any, draft ordinance language they wish to adopt.
The City Council can also consider making additional revisions to the language, as appropriate, or choose to decline to introduce an ordinance and let the existing process remain as currently prescribed by the BMC.
The impact of each draft ordinance is outlined in a very simplified format below:
Original Draft Ordinance
A discretionary application may be brought for City Council review by any City Councilmember, the City Attorney, or the City Manager.
1) This may be done at any time before or after a decision-making body has acted on the application, but not later than one day prior to the expiration of the appeal period.
2) The request to bring the matter to the City Council must be accompanied by a statement that the person bringing the matter for review believes that the decision involves a matter of such interest, import, precedent, or significance that such decision should be made by the City Council.
3) Bringing the matter to the City Council for review does not provide support for, or opposition to, the application in question.
4) A person who is required to be recused from the consideration of a discretionary application cannot bring the matter to the City Council, except by the appeal process identified in the BMC.
Revised Draft Ordinance
A discretionary application may be brought for City Council review by any City Councilmember, the City Attorney, or the City Manager.
1) The application may be brought before the City Council:
a. By the City Manager or City Attorney at any time before the decisionmaking authority for the application has acted, or b. By the City Manager, City Attorney, or any member of the City Council after the decision-making authority has acted, but not later than 1 day prior to the expiration of the appeal period.
2) The request to bring the matter to the City Council must be accompanied by a statement that the person bringing the matter for review believes that the
Ordinance No. 24-01 Page 3 March 14, 2024
decision involves a matter of such interest, import, precedent, or significance that such decision should be made by the City Council.
3) Bringing the matter to the City Council for review does not provide support for, or opposition to, the application in question.
4) A person who is required to be recused from the consideration of a discretionary application cannot bring the matter to the City Council, except by the appeal process identified in the BMC.
5) Review by the City Council shall follow this process:
a. If brought to the City Council before the action of the decision-making authority, the council shall hold a hearing and make a determination only on the matter identified in the request, then remand the matter back to the Planning Commission for their consideration.
b. If brought to the City Council after the decision-making authority has acted, the council shall hold a hearing and make a determination on the matter, and then uphold, modify, or reverse the action of the decisionmaking authority.
ENVIRONMENTAL REVIEW
This project is exempt from the California Environmental Quality Act (CEQA), under CEQA Guidelines Section 15061(b)(3), because it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.
RECOMMENDATION
As the City Council has requested such an ordinance be prepared, it should consider adoption of Ordinance No. 24-01 - “An Ordinance of the City Council of the City of Buellton, California, Adding Buellton Municipal Code Section 19.10.140 Providing for Certification for Review of Certain Discretionary Land Use Planning Proposals for Immediate City Council Consideration” by title only and waive further reading.
The City Council should note during their consideration that the Planning Commission has recommended denial of this ordinance in either form.
Should the City Council decide to adopt an ordinance, it should consider which Ordinance language to adopt; the “Original” or “Revised” language, and any additional revisions to either version as deemed appropriate.
ATTACHMENTS
Ordinance No. 24-01 –Original
Ordinance No. 24-01 –Revised
Attachment 1 – August 17, 2023 PC Meeting Minutes
Attachment 2 – November 16, 2023 Draft Unapproved PC Meeting Minutes Attachment 3 – PC Resolution No. 23-07
ORDINANCE NO. 24-01
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
BUELLTON, CALIFORNIA ADDING BUELLTON
MUNICIPAL CODE SECTION 19.10.140 PROVIDING FOR
CERTIFICATION FOR REVIEW OF CERTAIN
DISCRETIONARY LAND USE PLANNING PROPOSALS FOR
IMMEDIATE CITY COUNCIL CONSIDERATION
THE CITY COUNCIL OF THE CITY OF BUELLTON DOES ORDAIN AS FOLLOWS:
SECTION 1. Findings.
A. The City of Buellton (“City”) is a general law city, incorporated under the laws of the State of California; and
B. Pursuant to its police power, the City may enact and enforce laws within its boundaries which promote the public health, morals, safety, or general welfare of the community, and are not in conflict with general laws; and C. The purpose of this Ordinance is to amend the Buellton Municipal Code (“BMC”) by providing a process wherein the City Council, City Manager, or City Attorney may certify any discretionary land use planning proposal for immediate jurisdiction by the City Council when it is determined that, as a matter of policy and planning, the application involves a matter of such significance that it should be heard by the City Council; and
D. The Planning Commission is authorized by Buellton Municipal Code (“BMC”) §
19.10.110 to review and make recommendations on any proposed zoning-related ordinance that seeks to amend Title 19 of the BMC; and
E. On November 16, 2023 the Planning Commission held a duly noticed public hearing and adopted Resolution No. 23-07 recommending denial of this Ordinance; and
F. The City reviewed this Ordinance pursuant to the California Environmental Quality Act (Public Resources Code §§ 21000, et seq., “CEQA”) and the regulations promulgated thereunder (14 Cal. Code of Regulations §§15000, et seq., the “CEQA Guidelines”). CEQA and the CEQA Guidelines are collectively referred to as “CEQA Regulations”; and
G. Notice of Public Hearing before the City Council was duly given and published in the time, form, and manner as required by law; and
Ordinance No. 24-01 Page 2 March 14, 2024
H. On March 14, 2024, the City Council will consider this Ordinance. Its findings are made based on the entire administrative record including, without limitation, the staff report prepared by the Planning Director and submitted by the City Manager.
SECTION 2. Environmental Findings. The City Council exercises its independent judgment and finds that this ordinance is not subject to the California Environmental Quality Act (CEQA) pursuant to the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, sections: 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment); 15060(c)(3) (the activity is not a project as defined in Section 15378); and 15061(b)(3), because the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. The Ordinance is for general policies and procedure-making. It can be seen with certainty that there is no possibility that the Ordinance may have a significant effect on the environment.
SECTION 3. Zoning Findings. Pursuant to BMC § 19.10.110(C), the City Council makes the following findings:
A. The request is in the interests of the general community welfare. The Ordinance which modernizes a key provision of the BMC by allowing the City Council to have immediate jurisdiction over certain discretionary planning applications involving matters of great City-wide significance without waiting for Planning Commission action or triggering an “appeal” under the BMC.
B. The request is consistent with the general plan, the requirements of state planning and zoning laws, and this title. The Ordinance is not inconsistent with any adopted element of the General Plan, California zoning laws, or Title 19 of the BMC. The Ordinance merely provides a procedural process which does not implicate any element of the adopted general plan.
C. The request is consistent with good zoning and planning practices. The existing BMC provides that the Planning Commission must first hear a discretionary planning application before it may be reviewed by the City Council. The BMC further provides for appeals to the City Council by “an applicant or any aggrieved person” which means any appellant would necessarily be subject to conflict of interest laws in the processing of and hearing of the appeal. The Ordinance provides a process for streamlined review of certain projects that, as a matter of policy and planning, should be reviewed by the City Council and allows for this review to be initiated by the City Manager, City Attorney, or any member of the City Council.
Ordinance No. 24-01 Page 3 March 14, 2024
SECTION 4. BMC § 19.10.140 (Certification for Review) is added to Title 19 (Zoning), Chapter 10 (Zoning Ordinance Administration) of the BMC as follows:
19.10.140 Certification of Review
A certification of review for any discretionary application under this Chapter may be initiated by the city manager, the city attorney, or any member of the city council.
A. Timing. Certification of review may be filed at any time before or after the decision-making authority for the application has acted on the application but must be filed at least one (1) calendar day before the period for an appeal under Section
19.10.130.
B. Rationale. The certification for review must be accompanied by a statement that the filer believes that such decision involves a matter of such interest, import, precedent, or significance that such decision should, as a matter of policy and planning, be made by the city council.
C. Effect. Neither a certification for review nor the filer’s statement is deemed to provide support for, or opposition to, a discretionary application.
D. Recusal. A person authorized to initiate a certification of review may not use the certification of review process for a discretionary application for which he or she is required to be recused, but may use the process for appeal, pursuant to Section
19.10.130.
SECTION 5. Construction. This Ordinance must be broadly construed to achieve the purposes stated in this Ordinance. It is the City Council’s intent that the provisions of this Ordinance be interpreted or implemented by the City and others in a manner that facilitates the purposes set forth in this Ordinance.
SECTION 6. Severability. If any section, subsection, sentence, clause, or phrase of this ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision will not affect the validity of the remaining portions of this ordinance. The City Council declares that it would have passed this ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional.
Ordinance No. 24-01 Page 4 March 14, 2024
SECTION 7. Publication. The City Clerk is directed to certify this ordinance and cause it to be published in the manner required by law.
PASSED, APPROVED, AND ADOPTED this _______ day of March, 2024. __________________________________
Dave King
Mayor
ATTEST:
_______________________________
Linda Reid
City Clerk
ORDINANCE NO. 24-01
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF BUELLTON, CALIFORNIA ADDING BUELLTON
MUNICIPAL CODE SECTION 19.10.140 PROVIDING FOR
CERTIFICATION FOR REVIEW OF CERTAIN
DISCRETIONARY LAND USE PLANNING PROPOSALS
FOR IMMEDIATE CITY COUNCIL CONSIDERATION
THE CITY COUNCIL OF THE CITY OF BUELLTON DOES ORDAIN AS FOLLOWS:
SECTION 1. Findings.
A. The City of Buellton (“City”) is a general law city, incorporated under the laws of the State of California; and
B. Pursuant to its police power, the City may enact and enforce laws within its boundaries which promote the public health, morals, safety, or general welfare of the community, and are not in conflict with general laws; and C. The purpose of this Ordinance is to amend the Buellton Municipal Code (“BMC”) by providing a process wherein the City Council, City Manager, or City Attorney may certify any discretionary land use planning proposal for immediate jurisdiction by the City Council when it is determined that, as a matter of policy and planning, the application involves a matter of such significance that it should be heard by the City Council; and
D. The Planning Commission is authorized by Buellton Municipal Code (“BMC”) §
19.10.110 to review and make recommendations on any proposed zoning-related ordinance that seeks to amend Title 19 of the BMC; and
E. On November 16, 2023 the Planning Commission held a duly noticed public hearing and adopted Resolution No. 23-07 recommending denial of this Ordinance; and
F. The City reviewed this Ordinance pursuant to the California Environmental Quality Act (Public Resources Code §§ 21000, et seq., “CEQA”) and the regulations promulgated thereunder (14 Cal. Code of Regulations §§15000, et seq., the “CEQA Guidelines”). CEQA and the CEQA Guidelines are collectively referred to as “CEQA Regulations”; and
G. Notice of Public Hearing before the City Council was duly given and published in the time, form, and manner as required by law; and
Ordinance No. 24-01 Page 2 March 14, 2024
H. On March 14, 2024, the City Council will consider this Ordinance. Its findings are made based on the entire administrative record including, without limitation, the staff report prepared by the Planning Director and submitted by the City Manager.
SECTION 2. Environmental Findings. The City Council exercises its independent judgment and finds that this ordinance is not subject to the California Environmental Quality Act (CEQA) pursuant to the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, sections: 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment); 15060(c)(3) (the activity is not a project as defined in Section 15378); and 15061(b)(3), because the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. The Ordinance is for general policies and procedure-making. It can be seen with certainty that there is no possibility that the Ordinance may have a significant effect on the environment.
SECTION 3. Zoning Findings. Pursuant to BMC § 19.10.110(C), the City Council makes the following findings:
A. The request is in the interests of the general community welfare. The Ordinance which modernizes a key provision of the BMC by allowing the City Council to have immediate jurisdiction over certain discretionary planning applications involving matters of great City-wide significance without waiting for Planning Commission action or triggering an “appeal” under the BMC.
B. The request is consistent with the general plan, the requirements of state planning and zoning laws, and this title. The Ordinance is not inconsistent with any adopted element of the General Plan, California zoning laws, or Title 19 of the BMC. The Ordinance merely provides a procedural process which does not implicate any element of the adopted general plan.
C. The request is consistent with good zoning and planning practices. The existing BMC provides that the Planning Commission must first hear a discretionary planning application before it may be reviewed by the City Council. The BMC further provides for appeals to the City Council by “an applicant or any aggrieved person” which means any appellant would necessarily be subject to conflict of interest laws in the processing of and hearing of the appeal. The Ordinance provides a process for streamlined review of certain projects that, as a matter of policy and planning, should be reviewed by the City Council and allows for this review to be initiated by the City Manager, City Attorney, or any member of the City Council.
Ordinance No. 24-01 Page 3 March 14, 2024
SECTION 4. BMC § 19.10.140 (Certification for Review) is added to Title 19 (Zoning), Chapter 10 (Zoning Ordinance Administration) of the BMC as follows:
19.10.140 Certification for Review
A certification for review for any discretionary application under this Chapter may be initiated by the city manager, the city attorney, or any member of the city council, subject to the following:
1. Timing. Certification for review may be filed:
a. by the City Manager or City Attorney at any time before the decision-making authority for the application has acted, or
b. by the city manager, city attorney, or any member of the city council after the decision-making authority for the application has acted on the application but must be filed at least one (1) calendar day before the period for an appeal ends under Section 19.10.130.
2. Rationale. The certification for review must be accompanied by a statement that the filer believes that such decision involves a matter of such interest, import, precedent, or significance that such decision should, as a matter of policy and planning, be made by the city council.
3. Effect. Neither a certification for review nor the filer’s statement is deemed to provide support for, or opposition to, a discretionary application.
4. Recusal. A person authorized to initiate a certification for review may not use the certification for review process for a discretionary application for which he or she is required to be recused, but may use the process for appeal, pursuant to Section
19.10.130.
5. Process for Review.
a. In the event that certification for review has been filed prior to the action of the decision-making authority, the City Council shall consider the matter(s) described in the statement required in Subsection (2) of this Section, and shall, at a noticed public hearing, make a determination only regarding such matter(s). Following this determination the discretionary application shall be remanded back to the decision-making authority, along with a written explanation of the matter(s) considered by the City Council and the determinations made, which shall be considered by the authority in making its decision. A subsequent certification for review may be filed for the application pursuant to Subsection (1) (b) of this Section.
Ordinance No. 24-01 Page 4 March 14, 2024
b. In the event that certification for review has been filed following the action of the decision-making authority, the City Council shall, at a noticed public hearing, consider the matter(s) described in Subsection 2 of this Section 2, make an appropriate determination on the matter(s), and then shall apply that determination to the project to either uphold, modify, or reverse the decisionmaking authority’s action.
SECTION 5. Construction. This Ordinance must be broadly construed to achieve the purposes stated in this Ordinance. It is the City Council’s intent that the provisions of this Ordinance be interpreted or implemented by the City and others in a manner that facilitates the purposes set forth in this Ordinance.
SECTION 6. Severability. If any section, subsection, sentence, clause, or phrase of this ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision will not affect the validity of the remaining portions of this ordinance. The City Council declares that it would have passed this ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional.
SECTION 7. Publication. The City Clerk is directed to certify this ordinance and cause it to be published in the manner required by law.
PASSED, APPROVED, AND ADOPTED this _____ day of March, 2024. ________________________________
Dave King
Mayor
ATTEST:
_______________________________
Linda Reid
City Clerk
CITY OF BUELLTON
PLANNING COMMISSION MEETING MINUTES
August 17, 2023 – 6:00 p.m.
City Council Chambers, 140 West Highway 246
Buellton, California
CALL TO ORDER
Chair Hammel called the meeting to order at 6:00 p.m.
PLEDGE OF ALLEGIANCE
Commissioner Reese led the Pledge of Allegiance
ROLL CALL
Present: Commissioners Laura Romano DeFazio, Shannon Reese, Marcilo Sarquilla, Vice Chair Art Mercado, and Chair Patty Hammel Staff: Planning Director Andrea Keefer, Public Works Director Rose Hess, and Staff Assistant/Planning Technician Clare Barcelona
REORDERING OF AGENDA
Commissioner DeFazio requested that the agenda be re-ordered to hear Item # 3 before Item #2.
PRESENTATIONS
None
APPROVAL OF MINUTES
1. Minutes of the regular Planning Commission meeting of August 3, 2023 MOTION:
Vice Chair Mercado moved and Commissioner Sarquilla seconded the motion to approve the Minutes of August 3, 2023.
VOTE:
Motion passed with a 5-0 voice vote.
PUBLIC COMMENTS
None
Regular Planning Commission Meeting Minutes Page 2 August 17, 2023
CONSENT CALENDAR
None
CONTINUED PUBLIC HEARINGS
None
NEW PUBLIC HEARINGS
3. Resolution No. 23-07 - “ A Resolution of the Planning Commission of the City of Buellton, California, Recommending City Council Approval of an Ordinance Amending Municipal Code Title 19 (Zoning) Relating to Providing For Certification of Review of Certain Discretionary Land Use Planning Proposals for Immediate City Council Consideration, and Making Findings in Support Thereof”
STAFF REPORT
Planning Director Keefer presented the staff report.
DOCUMENTS:
Staff report with attachments.
SPEAKERS/DISCUSSION:
Vice Chair Hammel disclosed that she discussed the item earlier with the Planning Director.
The Commission discussed the reason for the Resolution and asked for examples.
Planning Director Keefer explained that the review would be for very unique circumstances only.
Chair Hammel opened the Public Hearing at 6:30 p.m.
The following Buellton residents spoke against the Resolution stating that the current appeals process is working and believe that the Resolution takes power away from the Planning Commission:
Lori Youngman
Nancy Dorwin
Lori Oakley
Chair Hammel closed the Public Hearing at 6:35 p.m.
The Commission agreed that the current appeals process works and that the Resolution would take approval power away from the Planning Commission. They concurred that the language in the Resolution is too broad and could lead to potential abuse.
Regular Planning Commission Meeting Minutes Page 3 August 17, 2023 MOTION:
Commissioner DeFazio moved and Vice Chair Mercado seconded the motion to deny Resolution No. 23-07 - “A Resolution of the Planning Commission of the City of Buellton, California, Recommending City Council Approval of an Ordinance Amending Municipal Code Title 19 (Zoning) Relating to Providing For Certification of Review of Certain Discretionary Land Use Planning Proposals for Immediate City Council Consideration, and Making Findings in Support Thereof”
VOTE:
Motion passed by a roll call vote of 4-1
Chair Hammel - Yes
Vice Chair Mercado – Yes
Commissioner Romano DeFazio – Yes
Commissioner Reese – Abstained
Commissioner Sarquilla – Yes
2. Resolution No. 23-06 - “A Resolution of the Planning Commission of the City of Buellton, California, Recommending City Council Approval of a One-Year Time Extension (23-TE-03) Request for Tentative Tract Map (TTM 31061) located at the Southern Terminus of Industrial Way, Assessor’s Parcel Numbers 099-690-048; and Making Findings in Support Thereof.”
Commissioner Romano DeFazio recused herself from the Dais due to the proximity of her residence to the project.
STAFF REPORT
Planning Director Keefer presented the staff report.
DOCUMENTS:
Staff report with attachments.
SPEAKERS/DISCUSSION:
Gavin Moores, Applicant, shared a PowerPoint presentation outlining the progress of the project and provided a map handout to the Commission. Mr. Moores stated that they are currently moving forward with the public improvements portion of the project.
Chair Hammel opened the Public Hearing at 6:58 p.m.
John Dorwin, Buellton, addressed the Commission and provided a handout with photos depicting the recent flooding from Zaca Creek. He voiced concerns regarding the environmental impact the project could have on the site.
Chair Hammel closed the Public Hearing at 7:04 p.m.
MOTION:
Vice Chair Mercado moved and Chair Hammel seconded the motion to adopt Resolution No. 23-06 - “A Resolution of the Planning Commission of the City of
Regular Planning Commission Meeting Minutes Page 4 August 17, 2023 Buellton, California, Recommending City Council Approval of a One-Year Time Extension (23-TE-03) Request for Tentative Tract Map (TTM 31061) located at the southern terminus of Industrial Way, Assessor’s Parcel Numbers 099-690-048; and Making Findings in Support Thereof.”
VOTE:
Motion passed by a roll call vote of 4-0.
Chair Hammel - Yes
Vice Chair Mercado – Yes
Commissioner Reese – Yes
Commissioner Sarquilla – Yes
OTHER BUSINESS
None
WRITTEN COMMUNICATIONS
None
PLANNING COMMISSIONER COMMENTS
Chair Hammel mentioned that she had attended the Buellton Chamber of Commerce mixer at Vreeland Ford and stated that there are many events scheduled in the upcoming months.
PLANNING DIRECTOR REPORT
None
ADJOURNMENT
Chair Hammel adjourned the meeting at 7:09 p.m. The next regular meeting of the Planning Commission will be held on Thursday, September 7, 2023 at 6:00 p.m. __________________
Chair Patty Hammel
ATTEST:
________________________________________
Clare Barcelona, Planning Commission Secretary
An audio CD of this Planning Commission Meeting is available upon request.
A video of this meeting can be seen on YouTube at:
https://cityofbuellton.com/government/cityTV.php?vid=22l81d2QTOA
CITY OF BUELLTON
PLANNING COMMISSION MEETING MINUTES
November 16, 2023 – 6:00 p.m.
City Council Chambers, 140 West Highway 246
Buellton, California
CALL TO ORDER
Chair Hammel called the meeting to order at 6:00 p.m.
PLEDGE OF ALLEGIANCE
Chair Hammel led the Pledge of Allegiance
ROLL CALL
Present: Commissioners Laura DeFazio, Marcilo Sarquilla, Vice Chair Art Mercado, and Chair Patty Hammel
Absent: Commissioner Shannon Reese
Staff: Planning Director Andrea Keefer, City Manager Scott Wolfe (via Zoom), Public Works Director Rose Hess and Staff
Assistant/Planning Technician Clare Barcelona
REORDERING OF AGENDA
None
PRESENTATIONS
None
APPROVAL OF MINUTES
1. Minutes of the regular Planning Commission meeting of October 19, 2023 MOTION:
Motion by Chair Mercado, seconded by Commissioner Sarquilla, to approve the Minutes of October 19, 2023.
VOTE:
Motion passed by a 4-0 voice vote.
Regular Planning Commission Meeting Minutes Page 2 November 16, 2023
PUBLIC COMMENTS
None
CONSENT CALENDAR
None
NEW PUBLIC HEARINGS
2. Resolution No. 23-07 – “ A Resolution of the Planning Commission of the City of Buellton, California, Recommending City Council Denial of an Ordinance Amending Municipal Code Title 19 (Zoning) Relating to Providing for Certification for Review of Certain Discretionary Land Use Planning Proposals for Immediate City Council Consideration, and Making Findings in Support Thereof”; Or
Resolution No. 23-07 - “ A Resolution of the Planning Commission of the City of Buellton, California, Recommending City Council Approval of an Ordinance Amending Municipal Code Title 19 (Zoning) Relating to Providing For Certification for Review of Certain Discretionary Land Use Planning Proposals for Immediate City Council Consideration, and Making Findings in Support Thereof”
STAFF REPORT
Planning Director Keefer presented the staff report.
DOCUMENTS:
Staff report with attachments as listed in the staff report.
SPEAKERS/DISCUSSION:
Planning Director Keefer provided examples and explained how the Certificate of Review process could be applied.
City Manager Scott Wolfe explained the process for requesting the Certification for Review.
The Commission questioned why the review is needed when there is an appeal process in place. They had concerns that the Council could have the authority to override a Planning Commission decision.
Chair Hammel opened the public hearing at 6:40 p.m. There being no public speakers the hearing was closed 6:41 p.m.
Vice Chair Mercado had concerns about abuse of the process in the future.
Regular Planning Commission Meeting Minutes Page 3 November 16, 2023 Chair Hammel voiced the same concern regarding potential abuse and went on to state the ordinance feels like an override authority and that the process and procedures currently in place are working.
MOTION:
Motion by Commissioner DeFazio, seconded by Chair Mercado, to adopt Resolution No. 23-07 – “ A Resolution of the Planning Commission of the City of Buellton, California, Recommending City Council Denial of an Ordinance Amending Municipal Code Title 19 (Zoning) Relating to Providing for Certification for Review of Certain Discretionary Land Use Planning Proposals for Immediate City Council Consideration, and Making Findings in Support Thereof”
VOTE:
Motion passed by a roll call vote of 4-0.
Commissioner DeFazio – Yes
Commissioner Sarquilla – Yes
Vice Chair Mercado – Yes
Chair Hammel – Yes
CONTINUED PUBLIC HEARINGS
None
OTHER BUSINESS
None
WRITTEN COMMUNICATIONS
None
PLANNING COMMISSIONER COMMENTS
Commissioner DeFazio stated that she attended the Green Team meeting and gave an oral report to the Commission.
Commissioner Sarquilla stated that the Fall Fest held on the Avenue of Flags was a success and enjoyed by all. Vice Chair Mercado agreed.
PLANNING DIRECTOR REPORT
Planning Director Keefer stated that the Fall Fest was a well-attended successful event.
ADJOURNMENT
Chair Hammel adjourned the meeting at 6:53 p.m. The next regular meeting of the Planning Commission will be held on Thursday, December 7, 2023 at 6:00 p.m.
Regular Planning Commission Meeting Minutes Page 4 November 16, 2023 __________________
Chair Patty Hammel
ATTEST:
________________________________________
Clare Barcelona, Planning Commission Secretary
A video of this meeting can be seen on YouTube at:
https://cityofbuellton.com/government/cityTV.php?vid=22l81d2QTOA An audio CD of this Planning Commission Meeting is available upon request.
CITY OF BUELLTON
City Council Agenda Staff Report
City Manager Review: SW
Council Agenda Item No.: 11
To: The Honorable Mayor and City Council
From: Shannel Zamora, Finance Director
Meeting Date: March 14, 2024
Subject: Review of Annual Comprehensive Financial Report (ACFR) for Fiscal Year Ended June 30, 2023
BACKGROUND
Staff is pleased to present the Annual Comprehensive Financial Report (ACFR) for the fiscal year July 1, 2022 through June 30, 2023 (Attachment 1). Although submitted to the Mayor and City Council for consideration, the ACFR is also intended to provide relevant financial information to the residents of Buellton, taxpayers, creditors, investors and other interested parties.
The ACFR was prepared to ensure a more comprehensive financial presentation of the City’s fiscal position which provides a broader scope than the basic audited financial statements. The City has won its tenth consecutive Certificate of Achievement for Excellence in Financial Reporting Award for the ACFR from the Government Finance Officers Association (GFOA). We will continue to prepare and submit the ACFR to the GFOA in anticipation of receiving the Certificate of Achievement for Excellence in Financial Reporting each year.
Attachment 2 is a glossary of terms within the ACFR. A detailed general ledger report showing revenue and expenditures (budget vs. actual) for Governmental and Proprietary Funds is also attached for reference purposes (Attachment 3 and 4 respectively). Page 28 of the ACFR presents descriptions of the major funds presented in the Fund Financial Statements.
The City contracted with Moss, Levy and Hartzheim, LLP, a firm of licensed certified public accountants, licensed to practice in the State of California, to perform the annual independent audit. The auditors expressed an opinion that the City’s financial statements for fiscal year 2022-23 are fairly stated in conformity with accounting principles generally accepted in the United States. This is the most favorable conclusion and is commonly known as an “unmodified” or “clean” opinion. The independent auditor’s report is included in the Financial Section of this report. As part of the audit, Moss, Levy &
ACFR Review Page 2 March 14, 2024
Hartzheim also reviewed and performed tests of the City’s internal accounting control procedures to determine if there are any material weaknesses or instances of noncompliance. Adam Guise from Moss, Levy and Hartzheim will be in attendance at the meeting to answer questions.
As shown on Page 4 of the ACFR, it is organized into three sections:
The Introductory Section is intended to familiarize the reader with the general organizational structure of the City, the nature and scope of City services and specifics of the City’s legal operating environment. It includes a transmittal letter that provides this background information and acknowledges the efforts and awards bestowed upon the City through a concerted effort of Finance and department management staff. The Financial Section includes Management’s Discussion & Analysis, the Basic Financial Statements, which include the government-wide financial statements that present an overview of the City’s entire financial operations from a long-term perspective and the fund financial statements along with the notes to the basic financial statements, that present financial information for each of the City’s major funds, non-major governmental funds, as well as enterprise funds (Pages 1-83). This section also contains the independent auditor’s report on the Basic Financial Statements.
The Statistical Section presents up to ten years of unaudited statistical data on the City’s financial trends, revenue capacity, debt capacity, demographic and economic financial statements and note disclosures in order to gain a context of whether the City’s financial health is improving or deteriorating over time.
FISCAL IMPACT
There is no fiscal impact to the City as a result of the 2022-23 ACFR.
RECOMMENDATION
That the City Council review and file the Annual Comprehensive Financial Report for Fiscal Year ended June 30, 2023.
ATTACHMENTS
Attachment 1 – Annual Comprehensive Financial Report for June 30, 2023 Attachment 2 – Glossary of terms
Attachment 3 – 2022-23 Revenue and Expenditures Report (Governmental Funds) Attachment 4 – 2022-23 Revenue and Expense Report (Proprietary Funds)
CITY OF BUELLTON, CALIFORNIA
ANNUAL COMPREHENSIVE
FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Cover photo: Two banners out of fourteen banners along Avenue of Flags. Funky Flowers & Butterflies Project funded by the Buellton Arts and Culture Program Artist: Community artists aged 5-75. Banner artist can be found at https://buellton.art/
CITY OF BUELLTON, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED
JUNE 30, 2023
PREPARED BY:
FINANCE DEPARTMENT
Shannel Zamora, Finance Director
Page Left Blank Intentionally.
CITY OF BUELLTON
TABLE OF CONTENTS
June 30,2023
INTRODUCTORY SECTION
Table of Contents ........................................................................................................................................................................... i Letter of Transmittal ..................................................................................................................................................................... iii Organization Chart ........................................................................................................................................................................ xi List of Officials .............................................................................................................................................................................. xii Certificate of Achievement for Excellence in Financial Reporting .............................................................................................. xiii
FINANCIAL SECTION
Independent Auditors' Report ...................................................................................................................................................... 1 Management's Discussion and Analysis ........................................................................................................................................ 3 Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position ..................................................................................................................................................... 25 Statement of Activities ........................................................................................................................................................... 26 Fund Financial Statements:
Governmental Funds:
Balance Sheet .................................................................................................................................................................... 29 Reconciliation of Governmental Funds-Balance Sheet to the Statement of Net Position ............................................................................................................................................................. 30 Statement of Revenues, Expenditures, and Changes in Fund Balances ............................................................................. 31 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of the Governmental Funds to the Statement of Activities ........................................................................................ 32 Proprietary Funds:
Statement of Net Position .................................................................................................................................................. 34 Statement of Revenues, Expenses, and Changes in Net Position ...................................................................................... 35 Statement of Cash Flows .................................................................................................................................................... 36 Index to Notes to Basic Financial Statements .......................................................................................................................... 37 Notes to Basic Financial Statements ........................................................................................................................................ 38
REQUIRED SUPPLEMENTAL INFORMATION SECTION
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual:
General Fund ........................................................................................................................................................................... 65 American Rescue Plan Act Fund .............................................................................................................................................. 66 Notes to the Required Supplemental Information - Budgetary Comparison Schedules ............................................................ 67 Schedule of Proportionate Share of Net Pension Liability .......................................................................................................... 68 Schedule of Pension Contributions ............................................................................................................................................. 69 Schedule of Changes in OPEB Liability and Related Ratios ......................................................................................................... 70 Schedule of OPEB Contributions ................................................................................................................................................. 71
SUPPLEMENTAL INFORMATION SECTION
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual:
Capital Improvement Project Fund - Major Capital Projects Fund .......................................................................................... 73 Combining Balance Sheet - Nonmajor Governmental Funds ..................................................................................................... 76 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds ............................................................................................................................. 78 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual:
Housing Fund ........................................................................................................................................................................... 80 Traffic Mitigation Fund ............................................................................................................................................................ 80 Gas Tax Fund ............................................................................................................................................................................ 81 Measure A Fund ....................................................................................................................................................................... 81 Local Tra nsportation Fu nd ....................................................................................................................................................... 82 Transportation Planning Special Revenue Fund ...................................................................................................................... 82
CITY OF BUELLTON
TABLE OF CONTENTS - CONTINUED
June 30, 2023
STATISTICAL SECTION
Financial Trends:
Net Position by Component .................................................................................................................................................... 86 Changes in Net Position ........................................................................................................................................................... 88 Fund Balances - Governmental Funds .................................................................................................................................... 92 Changes in Fund Balances - Governmental Funds .................................................................................................................. 94 Revenue Capacity:
Assessed Value and Actual Value of Taxable Property ............................................................................................................ 97 Direct and Overlapping Tax Rates ............................................................................................................................................ 98 Principal Property Taxpayers ................................................................................................................................................. 100 Schedule ofTop 25 Principal Sales Tax Remitters ................................................................................................................. 101 Property Tax Levies and Collections ...................................................................................................................................... 102 Debt Capacity:
Direct and Overlapping Debt ................................................................................................................................................. 103 Legal Debt Margin Information ............................................................................................................................................. 104 Demographic and Economic Information:
Demographic and Economic Statistics ................................................................................................................................... 107 Operating Information:
Fu"-time and Part-time City Employees by Function ............................................................................................................ 108 Operating Indicators by Function .......................................................................................................................................... 109 Capital Asset Statistics by Function ....................................................................................................................................... 110 Capital Asset Statistics by Funds ............................................................................................................................................ 112 ii
iii
City of Buellton
February 16, 2024
To the Honorable Mayor, Members of the City Council and Citizens of the City of Buellton:
We are pleased to present the Annual Comprehensive Financial Report (“ACFR”) of the City of Buellton (“City”) for the fiscal year July 1, 2022 through June 30, 2023. Although submitted to the Mayor and City Council (“Council”) for consideration, the ACFR is also intended to provide relevant financial information to the residents of Buellton, taxpayers, creditors, investors, and other interested parties.
The Letter of Transmittal provides a non-technical summary of City finances, services, achievements, and economic prospects. We ask that readers who wish for a more detailed discussion of the City’s financial results refer to Management’s Discussion & Analysis (“MD&A”).
The City’s MD&A can be found immediately following the report by the independent auditor.
State law requires that every general purpose local government publish, within twelve months of the close of each fiscal year, a complete set of audited financial statements. This report is published to fulfill that requirement for the fiscal year ended June 30, 2023.
The City Administration is responsible for the accuracy of the information contained in this report, the adequacy of its disclosures and the fairness of its presentation. We believe this ACFR to be complete and reliable in all material respects. To provide a reasonable basis for making this representation, we have established a comprehensive system of internal controls designed to protect City assets from loss, to identify and record transactions accurately, and to compile the information necessary to produce financial statements in conformity with generally accepted accounting principles (GAAP). Because the cost of control should not exceed the benefit derived, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements.
The City contracted with Moss, Levy and Hartzheim, LLP, a firm of licensed certified public accountants, to practice in the State of California, to perform the annual independent audit. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation.
The auditors expressed an opinion that the City’s financial statements for fiscal year 2022-2023 are fairly stated in conformity with accounting principles generally accepted in the United States.
This is the most favorable conclusion and is commonly known as an “unmodified” or “clean” opinion. The independent auditor’s report is included in the Financial Section of this report.
CITY OF BUELLTON
Letter of Transmittal
For the Year Ended June 30, 2023
REPORTING ENTITY
The City of Buellton has operated under the Council-Manager form of government since incorporation in February 1992. The Mayor and Council form the legislative body that represents the community and is empowered to formulate citywide policy. The City Manager is appointed by the Council and serves as the chief administrative officer of the organization responsible for the administration of City affairs, day-to-day operations, and implementation of Council policies.
In addition to the City Manager, the City Attorney is appointed by and reports directly to the Council.
City Council consists of the Mayor and four Council Members. The Mayor is elected at-large and elected with a two-year term. Council Members serve four-year terms, with two members elected every two years. On March 10,2022, Buellton's City Council approved Ordinance No. 22- 02, which outlines a transition from at-large to by-district elections, with the mayor to be elected at-large. With district-based elections, each of four council members will be elected by voters within that candidate's district, while the mayor would be elected by all voters within the City.
The City Council selected districts 1 and 4 to hold elections in November 2022. Districts 2 and 3 will hold elections in November 2024, along with the mayor-elect in general.
The City of Buellton, California was incorporated in 1992 and is in the central coast part of the state, within the Santa Ynez Valley. It is located at the regional intersection of Highways 101 and 246 about 45 miles North of the City of Santa Barbara. Buellton occupies an area of 1.6 miles and serves a population of about 4,944, consisting of about 1,929 households within the City.
Thousands of travelers have come to know Buellton as the Home of the Split Pea Soup, giving credit to Andersen's Split Pea Soup Restaurant. The City is surrounded by cattle ranches, the beautiful Santa Ynez Mountains, vineyards, and wineries. No longer merely a crossroads stop for tourists and travelers, the City has evolved into a highly desirable place to live and work.
Buellton's scenic biking routes, hiking trails, and wine trails are a popular recreational attraction.
The botanical gardens at River View Park are a picturesque vista for locals and tourists alike.
The City of Buellton provides a full range of services through in-house staff and via contracts, including police and fire protection; refuse collection; off-street parking; building inspections; licenses and permits; the construction and maintenance of highways, streets, and other infrastructure; recreational and cultural activities; library services; low-income housing; and transit services. The City contracts with the County of Santa Barbara for Police and Fire services.
Refuse collection services are under contract with Marborg Industries. Water distribution and sanitary sewer services are provided through departments of the City of Buellton and are maintained as separate funds in the proprietary section ofthese financial statements.
The ACFR includes all funds of the City, as well as all governmental organizations and activities for which the Council has financial accountability. The City adopts a biennial budget which serves as the foundation for the City's financial planning. The budget process starts with the requests iv
CITY OF BUELLTON
Letter of Transmittal
For the Year Ended June 30, 2023
from all departments for review and inclusion into the proposed budget. The City uses a combined program and line item format designed to provide a comprehensive management control and fiscal planning system. This format is aimed at achieving goals and objectives at the operational levels that are consistent with City Council's goals and priorities. The City Manager and Finance Director review the requests and present the proposed biennial budget to the City Council for review and adoption before June 30th . The Council is required to hold a public hearing on the proposed budget and to adopt a final budget no later than June 30th . The budget is adopted by resolution of the City Council and, upon final adoption, becomes the City's spending authority.
ECONOMIC CONDITION AND FISCAL OUTLOOK
The City has experienced a period of growth over the past decade. In the last ten years, the population of the City has grown by nearly 1.0 percent. Development in the city has prospered with nineteen open projects that include multi-family residential, industrial, commercial, and mixed used projects. Revenues, such as property tax and sales tax, are all affected positively from the increased development both indirectly from the growth in population and directly by the growth in assessed property value.
Tourists continue to view Buellton as a destination, as reflected in the increases in sales tax and TOT revenue. The top three sales tax categories for the City for the year ended June 30, 2023 were: Fuel and Service Stations, Autos and Transportation, and County and State Pools. Sales tax revenue was $3.6 million, marking the highest sales tax revenue the City has received since its incorporation. Sales tax revenue was $328,552 (1O.0%) higher compared to FY 2021-22 and $680,668 {23.2%} higher compared to FY 2020-21.
TOT recovery is trending upwards and has exceeded pre-pandemic levels. For the fiscal year ended June 30, 2023, TOT revenue was about $4.2 million, $71,423 (1.7%) lower compared to the prior fiscal year. TOT during the pandemic in FY 2019-20 was $2.5 million and in FY 2020-21 was $3.0 million. Prior to the pandemic in FY 2018-19 TOT was $3.1 million indicating that TOT trend has been trending upwards since FY 2020-21 when economic recovery began after the reopening of the economy.
The City attracts a significant visitor population and numerous employees coming from neighboring Santa Barbara County jurisdictions. Employment is concentrated within accommodation and food services, manufacturing, retail trade and agriculture. The median household income is $102,361 compared to $92,332 for Santa Barbara County. Per capita income using 2022 data is $47,903 compared to $44,635 for Santa Barbara County. The households are mostly owner-occupied (64.0%), newer housing. There is a large mobile home population consisting of about 20% of the population. Even though interest rates have elevated, demand for housing continues to outpace home availability. The lack of supply and more high-end homes being sold continue to put an upward trend on home prices. According to HDL Coren & Cone, v
CITY OF BUELLTON
Letter of Transmittal
For the Year Ended June 30, 2023
Buellton's median home value in June 2023 value is $875,000. Buellton median home values have gone up 6.2% over the prior year. The median home value for Santa Barbara County compares at $825,000 along with the California value of $838,260.
California's economy remains robust, but its outlook according to the UCLA Anderson's Forecast, is weaker due to the weakening of the national economy and the state's economy is forecasted to perform better than the nation's in the months and years ahead. According to labor market data released by the Employment Development Department (EDD), the unemployment rate in Buellton in June 2022 was 0.6%, which decreased from 1.4% from the previous year. This rate continues to stay well below the statewide average. The unemployment rate for California in June 2023 was 4.6%. During June 2023, employers added 11,500 nonfarm payroll jobs to the economy. Six of California's eleven industry sectors gained jobs with Private Education and Health Service showing the largest gains for the second consecutive month thanks to strength in Other Private School and Instruction, as well as Offices of Other Health Practitioner and Nursing Care Facilities. According to the BLS, Consumer Price Index (CPI) in California's Los Angeles area in June 2023, increased 2.5 percent compared to a year ago. The June increase was influenced by higher prices for shelter. Food prices increased 4.5 percent. Energy prices decreased 14.8 percent, largely due to the decrease in the price of gasoline. The index for all items less food and energy increased 4.0 percent over the prior fiscal year.
The National Unemployment Rate in June 2023 was lower than California's at 3.6%. Total nonfarm payroll employment increased by 209,000 in June. Employment continued to trend up in government, health care, social assistance and construction. Furthermore, According to the U.S. Bureau of Economic Analysis (BEA), in the second quarter of 2023, real gross domestic product (GDP) increased by an annualized rate of 2.1 percent. The increase in the second quarter was primarily driven by growth in consumer spending and business investment, partially offset by a decrease in exports and a decrease in imports. The inflation rate continued to slow over the year from 6.4 percent in January 2023 to 3.0 percent in June 2023. Lower inflation rates encourage spending and investment. It also influences the federal interest rate. The Federal Reserve held its benchmark interest rate steady at a range from 5 percent to 5.25 percent in June 2023 according to a CNBC report. The decision came after the central bank had raised interest rates eleven times since March 2022, which had increased borrowing costs for millions of Americans. According to the BLS, the Consumer Price Index (CPI) for June 2023 increased by 0.2 percent on a seasonally adjusted basis, following 0.1 percent increase in May. Over the last 12 months, the all items index increased by 3.0 percent. The index for shelter was the largest contributor to the increase accounting for over 70 percent of the increase. The increase in costs was also due to motor vehicle insurance, apparel, recreation, and personal care. The indexes for airline fares, communication, used cars and trucks, and household furnishings and operations were among those that decreased over the month.
vi
CITY OF BUELLTON
Letter of Transmittal
For the Year Ended June 30, 2023
LONG-TERM FINANCIAL PLANNING AND MAJOR INITIATIVES
Fiscal Year 2022-23 marks the second year of the City's Biennial Budget for FY 2021-22 and FY 2022-23. The Biennial Budget was developed to allow the ability to maintain long-range planning efforts, ability to develop realistic significant objectives, encourage more efficient spending patterns and to save time and resources allocated to preparing an annual budget. The budget was reformatted to efficiently communicate information to the community and to City Council members. The City also produces a five-year Capital Improvement Budget that is updated annually based on project status and current economic conditions. The City continues to improve our financial transparency via our City website by providing monthly and quarterly interim financial reports.
During the fiscal year ended June 30, 2023, the City successfully undertook the following LongTerm Financial Planning and Major Initiatives:
• City Council allocated $54,069 to continue funding the Arts and Culture Program. The City received the 2022 Helen Putnam Award for Economic Development through the Arts. In addition, the Arts and Culture Program received Santa Barbara County's "Leadership in the Arts" award. The following are examples offunded activities:
o Santa Ynez Valley Children's Museum Discovery Days and contribution to the Annual Buellton Fall Fest for music performances.
• City has been utilizing Regional Early Action Planning (REAP) and the Local Early Action Planning (LEAP) Grant to cover all or a portion of the costs to implement electronic plan review, prepare the 2023 Housing element update and preparation and adoption of preapproved Additional Dwelling Unit (ADU) plans. The 2023 Housing Element update was completed in August 2023. Pre-approved ADU plans are anticipated to be completed in the first quarter of 2024.
• Construction on major capital projects continued such as:
o Completion of installation of solar lights at Central Avenue, Industrial Way, and Pamela Way as part ofthe ENGlE project.
o Completion of installation of solar lights at the Post Office, Wastewater Treatment Plant, and Pump Station as part ofthe ENGlE project.
o Completion of City-wide water meter upgrades as part of the ENGlE project. o Willemsen Parking Lot design is nearing completion.
o Willemsen House renovation plans and structural plan checks are completed. The reconfiguration of the interior of the building is needed to accommodate the relocation ofthe Buellton Library.
o McMurray Road Widening design and permitting have been completed and the City is preparing the bid documents for a potential contract in Fall Quarter 2023. o Road Maintenance Project 2021-22 has been completed.
vii
CITY OF BUELLTON
Letter of Transmittal
For the Year Ended June 30, 2023
o Road Maintenance Project 2022-23 plans and specs have been developed and the City is preparing bid documents for a potential contract in Fall Quarter 2023. o Water Treatment Plant Facilities Improvements are currently in progress. • Major Private Development projects were approved during the fiscal year. o A Multi-Family Residential Project at the southern terminus of McMurray Road was approved on November 17,2022. The project consists of 89 affordable units. o The Chanin Wine Company project at 291 Industrial Way was approved on April 20, 2023. The project consists of approximately 16,500 square feet of wine production, tasting room, and storage.
o The Central Avenue duplexes and ADUs project at 430/440 Central Avenue was approved by the Planning Director on August 29, 2022. The project consists of 4 residential units (duplexes) and 2 ADUs.
CAPITAL IMPROVEMENT PLAN
The use of a Capital Improvement Fund not only tracks costs but guides the City in the planning, scheduling and budgeting of capital improvement projects. The City has completed the development of a Five-year Capital Improvement Plan ("CIP") and has included it in its Biennial Budget. The City-wide capital improvement fund summarizes each project by "start date" and "end date". The CIP is updated annually and approved by Council. The CIP is the blueprint for resource investments to improve and rehabilitate existing public infrastructure while also making targeted investments that align with the City's expansion plans. In total, the City's 2022-23 CIP budget was about $8.9 Million and reflects a 17.1 percent increase from 2021-22. The CIP includes a large investment in renovating the Willemsen House, building a parking lot at the lower-end of the Willemsen Property, replacing the roof at the Water Reservoir No.2, and installation of a power generator for the Wastewater Treatment Plant and lift station.
Key components of the Capital Improvement Program for 2022-27 include:
• Circulation Improvements - McMurray Road Widening, Avenue ofthe Flags Park and Ride structure and Bus Shelter improvements are still in progress with incremental progress assisting with traffic flow. The majority of funding is through the City's General Fund. • Road Maintenance and Storm Drain Retrofit - Annual road maintenance projects activities were completed. The majority of this funding is through Measure A and Gas Tax, and General Fund monies. Road Maintenance projects are also funded with revenue from the Road Repair and Accountability Act (RMRA fund), also known as SB1, which became effective on November 1,2017.
V111
CITY OF BUELLTON
Letter of Transmittal
For the Year Ended June 30, 2023
• Water Treatment Plant Capital Program - Water Facilities Improvements, Water Treatment Plant Pump Booster Reliability Project, Backwash Reclamation, Recycled Water Study, Water Distribution, Water Reservoir No.2 Roof Replacement, and Water Meter upgrades.
• Sanitary Sewer System Capital Program - Sewer Line Replacement and Wastewater Treatment Plant Facilities Improvements.
• Parks, Facilities and Miscellaneous - Santa Ynez River Trail, Avenue of Flags Median 3 Improvements, City Hall Emergency Generator/Electrical Replacement, River View Park Basketball Court Resurfacing, Miscellaneous River View Park Improvements, Willemsen Parking Lot, Willemsen House Renovation, and Village Park Improvements.
FINANCIAL INFORMATION
Budgetary Controls
The City maintains budgetary controls through the City Council's adoption of a biennial balanced budget by resolution. The City maintains a balanced budget where revenue is equal to or exceeds expenditures for City operations. The budgeted amounts approved in the biennial budget are recorded in the City's accounting system for each fund. The budgetary level of control is maintained at the fund level. Fund level monitoring is performed monthly. Quarterly reports to Council include budget versus actual trend analysis.
The City Manager has the authority to transfer appropriations between departments within a fund, but changes to appropriations or transfers between funds must be approved by City Council. Budget amendments are submitted to Council when a fund's actual expenditures are expected to exceed budget. Unspent appropriations at the end of the fiscal year lapse, with the exception of capital improvement projects which are usually carried forward into the next fiscal year.
The City continues to meet its responsibility for sound financial management as demonstrated by the statements and schedules included in the financial section of this report.
Cash and Investment Policy
The City invests unreserved idle cash in order to enhance the economic status of the City while protecting its pooled cash. The City's Investment Policy is to exercise prudent judgment and care when investing. The criteria for selecting investments and the order of priority are Safety, Liquidity and Yield. The City attempts to obtain the highest yield obtainable as long as investments meet the criteria established for safety and liquidity. The Statement of Investment Policy is updated annually and approved by the City Council. ix
CITY OF BUELLTON
Letter of Transmittal
For the Year Ended June 30, 2023
AWARDS
Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Buellton for its annual comprehensive financial report for the fiscal year ended June 30, 2022. This was the tenth consecutive year that the government has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized annual comprehensive financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current annual comprehensive financial report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to GFOA to determine its eligibility for another certificate.
The GFOA has also awarded the City with the Distinguished Budget Award for its Biennial Budget consecutively for the last four budget cycles. The most recent GFOA's Distinguished Budget Presentation Award was for the City's two year budget document for FY 2023-2025. To receive this award, a government must satisfy nationally recognized guidelines for effective budget presentation to assess how well the budget serves as a policy document, a financial plan, operating guide, and a communications device.
ACKNOWLEDGMENTS
The preparation of the ACFR represents the culmination of a concerted team effort by the entire staff of the Finance Department. Many members of the Department demonstrated commendable dedication and long days of focused attention to produce this document.
In addition, staff in all City departments should be recognized. The City also recognizes the contributions and positive working relationship with Moss, Levy, and Hartzheim LLP.
On behalf of the entire Finance staff, we express our appreciation to the Mayor and City Council for providing policy direction and support for achieving financial excellence in all aspects of financial reporting.
Respectfully Submitted,
~~r
Shannel Zamora
Finance Director
x
City of Buellton, California
Annual Comprehensive Financial Report
For the year ended June 30, 2023
Organization Chart
Planning
Director
Assistant! Associate
Planner
Staff
Assista nt/Pia nning
Finance
Director
Accounting
Specialist
Revenue
Specialist
Technician Accounting
Technician
Public Works
Director/City
Engineer
Chief Plant
Operator -
WWTP
City
lerk/Huma
Resources
Director
Lead Maintenance &
Utility Fieldworker
Facilities Supervisor/Utility
Fieldworker
Journeyman
Maintenance & Utility
Fieldworker
Facilities Foreman/Utility
Fieldworker
Maintenance & Utility
Fieldworker I
xi
Recreation
Supervisor
Recreation
Center
Coordinator
Youth
Recreation
Coordinator
In House I I Contraq~d :
City of Buellton, California
List of Officials
As of June 3D, 2023
CITY COUNCIL - Elected Positions
~ Dave King, Mayor
~ John Sanchez, Vice Mayor
~ Hudson Hornick, City Council Member
~ Elysia Lewis, City Council Member
~ David Silva, City Council Member
PLANNING COMISSION -Appointed by Council
~ Patty Hammel, Chair
~ Art Mercado, Vice Chair
~ Laura Romano Defazio, Commissioner
~ Shannon Reese, Commissioner
~ Marcilo Sarquilla, Commissioner
CITY ADMI5TRATIVE STAFF :
~ Scott Wolfe, City Manager
~ Andrea Keefer, Planning Director
~ Shannel Zamora, Finance Director
~ Rose Hess, Public Works Director/ City Engineer
~ Linda Reid, City Clerk/Human Resources Director
~ Paul Smith, Interim Recreation Supervisor
xii
City of Buellton, California
Annual Comprehensive Financial Report
For the year ended June 30, 2023
Certificate of Achievement for Excellence in Financial Reporting Goyernment Financc Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Buellton
Ca lifornia
For its Annual ComprehensiYe
Financial Report
For the Fiscal Year Ended
JUllC 30, 2022
E"':Clltin: Dir.:ctor.CEO
xiii
FINANCIAL SECTION
Moss, Levy & Hartzheim LLP
Certified Public Accountants
INDEPENDENT AUDITORS' REPORT
City Council of the City of Buellton
Buellton, California
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-type activities, the major funds, and the aggregate remaining fund information of the City of Buellton, as of and for the fiscal year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City of Buellton's basic financial statements as listed in the table of contents.
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, the major funds, and the aggregate remaining fund information of the City of Buellton, as of June 30, 2023, and the respective changes in financial position and, where applicable, cash flows thereof for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City of Buellton and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City of Buellton's ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
Auditors' Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collUSion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City of Buellton's internal control. Accordingly, no such opinion is expressed.
1 2400 Professional Parkway, Suite 205 Santa Maria, CA 93455 Tel 805.925.2579 Fax 805.925.2147 mlhcpas.com BEVERLY HILLS' eUL VER OTY • SANTA MARIA
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City of Buellton's ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, the budgetary information, the schedule of proportionate share of net pension liability, the schedule of pension contributions, the schedule of changes in OPEB liability and related ratios, and the schedule of OPEB contributions, 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 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 inquires of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries about the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Buellton's basic financial statements. The combining and individual nonmajor fund financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the 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 by us and other auditors. In our opinion, based on our audit and the report of the other auditors, the combining and individual nonmajor fund financial statements are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections and the major capital project fund budgetary schedule but does not include the basic financial statements and our auditor's report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 16, 2024, on our consideration of the City of Buellton's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. ~I ~ ~'~~J:.jJ
Santa Maria, California
February 16, 2024
2
City of Buellton, California
Basic Financial Statements
For the year ended June 30, 2023
Management's Discussion and Analysis
The management's discussion and analysis (MD&A) section provides a narrative overview and analysis of the financial activities of the City of Buellton (City) for the fiscal year ended June 30, 2023. It should be read in conjunction with the accompanying transmittal letter and basic financial statements.
FINANCIAL HIGHLIGHTS
Key financial highlights for FY 2022-23, are as follows:
• As of the close of the fiscal year, the City's total net position increased by $4,398,051, or 9.2%, from the previous fiscal year. The increase is primarily due to the increase in capital assets and deferred outflow of resources in both the government-type activities and business-type activities. A summary of transactions reflecting Net Position is found on page 8 of this report. • On June 30, 2023, the City's assets and deferred outflow of resources exceeded its liabilities and deferred inflows of resources by $51,968,847 (net position). Of this amount, $18,574,818 (unrestricted net position) may be used to meet the government's ongoing obligations to its citizens and creditors.
The remaining amount includes $31,027,527 for net investment in capital assets and $2,366,502 for restricted uses.
• The City of Buellton's governmental funds reported a combined ending fund balance of $16,240,174, an increase of $2,249,852, or 16.1%, in comparison with the prior fiscal year fund balance. $13,675,672 (84.2%) of the fund balance is available for spending at the government's discretion (unassigned fund balance).
• The City's General Fund unassigned fund balance ended the fiscal year with $13,768,082. Management's suggested minimum reserve goal is to maintain 35% of budgeted operating expenditures, or a {(nonspendable" fund balance figure of $3,238,191. The unassigned fund balance is in substantial excess of the suggested minimum reserve: $10,529,891 is {(spendable". • The primary government's program revenues increased by $51,154, or 0.9%, in comparison with the prior fiscal year. The increase was driven by an increase of $150,673 in operating grants and capital contributions. The total primary government's expenses decreased by $66,317, about 0.5%. • The City's net pension liability increased from $1,252,299 to $2,888,246 which is approximately a 130.6% increase from the prior fiscal year. As of the most current Annual Valuation Report (Measurement date June 30, 2022), the City's defined benefit plan's funding ratios were 89.1% for the PEPRA Plan and 71.9% for the Classic Plan.
• The City reported its OPEB liability per GASB 75. The net OPEB liability for the fiscal year ended June 30, 2023 decreased from $3,126,228 to $2,732,118 which is a 12.6% decrease from the prior fiscal year, and the percentage of covered-employee payroll was 161.21%. 3
City of Buellton, California
Basic Financial Statements
For the year ended June 30, 2023
Management's Discussion and Analysis
OVERVIEW OF THE ANNUAL COMPREHENSIVE FINANCIAL REPORT
This Annual Comprehensive Financial Report has three major parts:
1) Introductory section, which includes general information; 2) Financial section, which includes the Management's Discussion and Analysis (current section), the Basic Financial Statements, which include the Government-wide and the Fund Financial Statements along with the notes to these financial statements, and Combining and Individual Fund Financial Statements and Schedules;
3) Statistical section, which includes detailed information as a context for understanding what the information in the financial statements and footnotes says about the City's overall financial health.
The Basic Financial Statements
The Basic Financial Statements are comprised of the Government-wide Financial Statements and the Fund Financial Statements. These two sets of financial statements provide two different views of the City's financial activities and financial position.
The Government-wide Financial Statements
The Government-wide Financial Statements provide a broad overview of the City's activities as a whole and comprise the Statement of Net Position and the Statement of Activities. The Statement of Net Position provides information about the financial position of the City as a whole, including all its capital assets and long-term liabilities on the full accrual basis, similar to that used by corporations. The Statement of Activities provides information about all the City's revenues and all its expenses, also on the full accrual basis, with emphasis on measuring net revenues or expenses of each of the City's programs. The Statement of Activities explains in detail the change in Net Position for the fiscal year.
All the amounts in the Statement of Net Position and the Statement of Activities are separated into Governmental Activities and Business-type Activities in order to provide a summary of these two activities of the City as a whole, as explained below.
• Governmental activities - All of the City's basic services are considered to be governmental activities, including general government, community development, culture and leisure, public safety, and public works. These services are supported by general City revenues such as taxes, state grants, and by specific program revenues such as developer fees. • Business-type activities - All of the City's enterprise activities are reported here, including Water and Wastewater. Unlike governmental services, these services are supported by charges paid by users based on the amount of the service they use.
4
City of Buellton, California
Basic Financial Statements
For the year ended June 30, 2023
Management's Discussion and Analysis
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 sorted into two categories: governmental funds and proprietary 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 may be useful in evaluating a government's near-term financing requirements.
Because the focus of the Governmental Fund Financial Statements is narrower than that of the Governmentwide 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 Statement. By doing so, readers may better understand the long-term impact of the government's near-term financial decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The Governmental Fund Financial Statements provide detailed information about each of the City's most significant funds, called major funds. The concept of major funds, and the determination of which are major funds, was established by GASB Statement No. 34 and replaces the concept of combining like funds and presenting them as one total. Instead, each major fund is presented individually, with all non-major funds summarized and presented only in a single column. Subordinate schedules present the detail ofthese nonmajor funds. Major funds present the major activities of the City for the year and may change from year to year as a result of changes in the pattern of the City's activities.
For the fiscal year ended June 30, 2023, the City's major funds are as follows:
GOVERNMENTAL FUNDS:
• General Fund
• American Rescue Plan Act Fund
• Capital Improvement Fund
PROPRIETARY FUNDS:
• Water Enterprise Fund
• Wastewater Enterprise Fund
Proprietary funds. The City maintains Enterprise-type proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the Government-wide Financial Statements. The City uses enterprise funds to account for Water and Wastewater operations. Proprietary funds provide the same type of information as the Government-wide Financial Statements, only in more detail. 5
City of Buellton, California
Basic Financial Statements
For the year ended June 30, 2023
Management's Discussion and Analysis
Notes to the Basic Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the Government-wide and Fund Financial Statements. The notes to the basic financial statements can be found on pages 38-63 of this report.
Combining and Individual Fund Financial Statements and Schedules The combining statements referred to earlier in connection with non-major governmental funds are presented immediately following the notes to the financial statements. Combining and individual fund statements can be found on pages 76-83 of this report.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, Net Position may serve over time as a useful indicator of a government's financial position. In the case of the City, assets and deferred outflow of resources exceeded liabilities and deferred inflows of resources by $51,968,847 for the period ending June 30, 2023, a 9.2% increase from the prior fiscal year.
The largest portion (59.7%) of the City's net position reflects its investment of $31.0 million in capital assets (land, building and improvements, equipment, and infrastructure, net of accumulated depreciation). The City uses these capital assets to provide services to its citizens; consequently, these assets are not available for future spending.
About $2.4 million (4.6%) of the City's net position represents resources that are subject to external restrictions on how they may be expended. These restrictions include Housing and Streets, Roads and Transportation, and Capital Expansion.
About $18.6 million of the net position (35.7%) is unrestricted and may be used to meet the government's ongoing obligations to citizens and creditors. Of this amount, $6.8 million is held by the business-type activities and $11.8 million is held by the governmental activities.
The statement of activities shows how the City's net position changed during fiscal year 2022-23 compared to the prior fiscal year. The City's net position increased overall by about $4.4 million during the fiscal year, which shows the City's financial health is better than the previous year.
The tables on the following pages present a summary of net changes of the City's net position as of June 30, 2023, and June 30, 2022.
6
City of Buellton, California
Basic Financial Statements
For the year ended June 30, 2023
Management's Discussion and Analysis
The Summary of Net Position as of June 30, 2023, and 2022, follows:
Summary of Net Position
2023
Govern- Business- Governmental type mental
Activities Activities Total Activities
Current and other assets $ 18,384,511 $ 7,830,366 $ 26,214,877 $ 16,529,474 Noncurrent assets 426,482 426,482 571,582
Capital assets,net 26,454,742 8,619,158 35,073,900 26,389,707 Total assets 45,265,735 16,449,524 61,715,259 43,490,763 Deferred outflows of resources 2,717,105 765,577 3,482,682 882,564 Total assets and deferred
outflows of resources 47,982,840 17,215,101 65,197,941 44,373,327 Current and other liabilities 2,049,717 186,149 2,235,866 2,437,683 Noncurrent liabilities 5,186,573 4,672,119 9,858,692 4,123,814 Total liabilities 7,236,290 4,858,268 12,094,558 6,561,497 Deferred inflows of resources 968,855 165,681 1,134,536 1,530,304 Total liabilities and deferred inflow of
resources 8,205,145 5,023,949 13,229,094 8,091,801
Net Position:
Net investment in capital assets 25,609,554 5,417,973 31,027,527 25,512,899 Restricted 2,366,502 2,366,502 2,121,838
Unrestricted 11,801,639 6,773,179 18,574,818 8,646,789
Total net position $ 39,777,695 $ 12,191,152 $ 51,968,847 $ 36,281,526 7 2022
Businesstype
Activities Total
$ 7,859,926 $ 24,389,400
571,582
8,176,627 34,566,334
16,036,553 59,527,316
345,347 1,227,911
16,381,900 60,755,227
214,860 2,652,543
4,568,433 8,692,247
4,783,293 11,344,790
309,337 1,839,641
5,092,630 13,184,431
4,911,257 30,424,156
252,969 2,374,807
6,125,044 14,771,833
$ 11,289,270 $ 47,570,796
City of Buellton, California
Basic Financial Statements
For the year ended June 30, 2023
Management's Discussion and Analysis
Provided below is a summary of changes in Net Position for the fiscal years ended June 30, 2023, and 2022.
Changes in Net Position
2023 2022
Govern- Business- Govern- Businessmental type mental type Activities Activities Total Activities Activities Total Revenues:
Program revenues:
Charges for services 354,117 $ 3,789,768 4,143,885 $ 323,660 $ 3,919,744 $ 4,243,404 Grants and contributions:
Operating 1,910,424 1,910,424 1,744,561 1,744,561
Capital 15,190 15,190
General revenues:
Secured and unsecured
property taxes 1,886,905 1,886,905 1,751,216 1,751,216
Sales and use tax 3,615,000 3,615,000 3,286,448 3,286,448 Transient lodging tax 4,220,959 4,220,959 4,292,382 4,292,382 Franchise taxes 377,541 377,541 356,836 356,836
Other taxes 24,788 24,788 67,863 67,863
Fines and forfeitures 9,254 9,254 12,089 12,089
Investment income 197,373 90,240 287,613 (252,959) (23 ,883) (276,842) Other general revenues 15,316 15,316 20,225 20,225
Total revenues 12,611,677 3,880,008 16,491,685 11,602,321 3,911,051 15,513,372 Expenses:
Governmental activities:
General government 3,044,661 3,044,66 1 1,990,11 2 1,990,112 Community development 677,260 677,260 956,018 956,018
Culture and leisure 694,252 694,252 95 1,626 951 ,626
Public safety 2,645,358 2,645,358 2,659,589 2,659,589
Public works 1,830,795 1,830,795 1,926,627 1,926,627
Interest on long term debt 21 ,488 21 ,488 33,101 33,101 Business-type activities:
Water 1,798,264 1,798,264 2,378,987 2,378,987
Sewer 1,38 1,556 1,381 ,556 1,263,891 1,263,891
Total expenses 8,913,814 3,179,820 12,093,634 8,517,073 3,642,878 12,159,951 Excess of revenue over expenses
befo re transfers 3,697,863 700,188 4,398,051 3,085,248 268,173 3,353,421 Transfers (201 ,694) 201,694
Change in net position 3,496,169 901,882 4,398,051 3,085,248 268,173 3,353,421 Net position:
Beginning of year 36,281 ,526 11 ,289,270 47,570,796 32,524,848 11 ,021 ,097 43,545,945 Adjustments 671,430 671,430
Beginning of year, as adjusted 36,28 1,526 11,289,270 47,570,796 33,196,278 11 ,021 ,097 44,217,375 End of year $ 39,777,695 $ 12,191,152 $ 51,968,847 $ 36,281,526 $ 11,289,270 $ 47,570,796 8
City of Buellton, California
Basic Financial Statements
For the year ended June 30, 2023
Management's Discussion and Analysis
Revenues
The City's total revenue for governmental and business-type activities was $16A91,685 for the fiscal year ended June 30, 2023. Total revenue from government-type activities was $12,611,677. Approximately 92.2%, or $11,633,288, of the City's key governmental revenue is generated from four major sources: Sales, property, transient occupancy taxes, and grants and contributions. Revenues are reported in two categories: Program Revenues and General Revenues.
Program revenues are derived from the City's functional programs which include charges for services, such as recreation and park reservation fees, and revenue from grants and capital contributions. The total change in Program revenue from the prior fiscal year for governmental and business-type activities is $51,154, or 9.5%.
1. Charges for Services - Governmental and Business-Type Activities Operating - Decrease of $99,519, or 2.3%. One factor for the decrease is revenue from park reservation fees and recreation program fees decreased slightly from the prior fiscal year post-Covid highs. Due to the new GASB 87 Leases Pronouncement, principal for lessor lease revenue is reported as charges for current services instead of use of money and property category in previous years. Business-type activity revenue is derived from water and wastewater sales and remained consistent from the prior fiscal year. Charges for water and wastewater is charged at a fixed and variable rate.
2. Grants and Contributions - Governmental and Business-Type Activities Operating - Grants continue to be a consistent source of revenue for public works uses under Business and Governmental-type activities. Operating grants increased by $165,863, or 9.5%. This was mainly due to street, road, and community enhancement operating grants for maintenance and operations renewed in the current year such as revenue from Measure A and the Road Maintenance and Rehabilitation Account (RMRA).
General Revenues are derived of revenues that do not meet the requirement of program revenues, most of which is revenue from taxes. The following discusses variances in key revenues from the prior fiscal year:
1. Sales and Use Taxes - Sales tax revenue totaled $3,615,000 for an increase of $328,552, or 10.0% gain from the previous fiscal year. The increase is largely due to strong performance in Autos and Transportation, and Restaurant and Hotels. Autos and Transportation increased by about $217,500, or 27.0% from new and used car sales compared to the prior fiscal year. High processing fees and rising interest rates did not prevent shoppers from buying a vehicle amid a strong job market and elevated demand. The Restaurant and Hotels sector increased by about 6.0% compared from the prior fiscal year. Restaurants faced more demand as consumers continued to enjoy the ability to go out after the pandemic lockdown opting for experience versus higher menu prices. The City's allocation from the countywide pool improved by $65,000, or 11.0%.
2. Secured and Unsecured Property Taxes - Property tax revenues recorded in the governmental fund totaled $1,866,905 for an increase of $135,689 or 7.8%. The City's ongoing share of property tax is expected to grow at a steady rate as the assessed property values continue to increase and with future development.
9
City of Buellton, California
Basic Financial Statements
For the year ended June 30, 2023
Management’s Discussion and Analysis
10 3. Transient Occupancy Tax (TOT) – Governmental Activities Operating – This revenue source is a major component and top revenue source of the City’s General Fund. The City receives 12% of the total taxable hotel revenue within City limits. For the FY ended June 30, 2023, TOT totaled $4,220,959, a decrease of $71,423 from the prior fiscal year, or 1.7% reduction. The decrease is likely to a lower occupancy rate. For the past couple of years, TOT revenue surpassed pre-pandemic revenue of $3.1 million in FY 2018-19. FY 2021-22 experienced a historic high of about $4.3 in TOT revenue. The large increase is due to higher occupany rates and higher hotel prices. The monthly average occupancy rate for FY 2022-23 was 68%, FY 2021-22 was 70%, FY 2020-21 was 58% and FY 2019-20 was 65%.
Expenses
Governmental and business-type activity expenses of the City for the year totaled $12,093,634.
Governmental activity expenses totaled $8,913,814, or about 73.7% of total expenses. Business-type activities incurred $3,179,820 of expenses during the fiscal year, or about 26.3%.
Governmental Activities
The table on the following page shows the cost of each of the City’s major programs and the net cost of the programs. Net cost is the total cost less fees and other direct revenue generated by the activities. The net cost reflects the financial burden that was placed on the City’s taxpayers by each of the programs.
General government total cost of $3,044,661 represents about 34.2% of total governmental activities expenses, the largest expense category for governmental activities. Public Safety total cost of $2,645,358 represents about
29.7% of total cost of services. The largest single expense category for total net cost of service is General Government with a net cost of $2,886,000 which represents 43.4% of the total net cost. The second largest expense category for total net cost of service is Public Safety with a net cost of $2,480,087 which represents
37.3% of total net cost. The total cost of services and the net cost of services for the fiscal years ended June 30, 2023, and 2022, are as follows: 34%
8%
8%
30%
20%
0.241%
Governmental Activities by Program
Fiscal Year Ended June 30, 2023
General government
Community development Culture and leisure Public safety Public works Interest of long-term debt
Total Cost Net Cost Total Cost Net Cost
of Services of Services of Services of Services
General government $ 3,044,661 $ 2,886,000 $ 1,990,112 $ 1,901,729 Community development 677,260 672,260 956,018 951,018
Culture and leisure 694,252 492,206 951,626 722,033
Public safety 2,645,358 2,480,087 2,659,589 2,498,304
Public works 1,830,795 97,232 1,926,627 348,351
Interest of long-term debt 21,488 21,488 33,101 33,101
Total $ 8,913,814 $ 6,649,273 $ 8,517,073 $ 6,454,536
2023 2022
City of Buellton, California
Basic Financial Statements
For the year ended June 30, 2023
Management’s Discussion and Analysis
11 Revenues by source for the fiscal years ended June 30, 2023, and 2022, are as follows:
Charges for services
2.79%
Operating grants
15.04%
Secured and unsecured
property taxes
14.86%
Sales and use tax
28.46%
Transient lodging tax
33.23%
Franchise taxes
2.97%
Other taxes
0.20%
Investment Income
2.26%
Fines & Forfeitures
0.07%
Other general revenues
0.12%
Revenues by Source - Governmental Activities
2023
Charges for services
2.80%
Operating grants
15.07%
Secured and unsecured
property taxes
15.12%
Sales and use tax
28.38%
Transient lodging tax
37.07%
Franchise taxes
3.08%
Other taxes
0.59%
Investment Income
-2.39%
Fines & Forfeitures
0.10%
Other general revenues
0.17%
Revenues by Source - Governmental Activities
2022
City of Buellton, California
Basic Financial Statements
For the year ended June 30, 2023
Management's Discussion and Analysis
Business-type activities
Business-type activities increased the City's Net Position to $12,191,152 from $11,289,270 the previous fiscal year. The City has two business-type activities: Water and Wastewater. Water accounts for 67.3% of total business-type activity operating revenue, and Wastewater accounts for 32.7%.
Total business-type revenues for the Fiscal Year ended June 30, 2023 was $3,880,008, a decrease of $31,043 from the prior fiscal year. Charges for services experienced a decrease of $129,976 (3.3%) from the prior fiscal year. The decrease for charges for current services for the Water Fund of $100,142 (3.8%) was influenced by water conservation efforts and savings from irrigation usage due to a rainy winter from January 2023 through March 2023. The decrease for the Wastewater Fund of $26,286 (2.1%) was due to less wastewater usage due to conservation efforts.
Other operating revenue decreased by $3,548 (64.5%). The decrease was mostly due to revenue received from recycling old water meters the previous year. Business-type interest income increased by $114,123 (477.8%) from the prior fiscal year. The increase was due to the higher interest rates in the Local Agency Investment Fund (LAIF), money market, and certificate of deposits (CDs). The City invested about $5 million into the money market compared to $250,000 the prior fiscal year.
Expenses of the business-type activities for the Fiscal Year ended June 30, 2023, totaled $3,179,820, a decrease of $463,058 (12.7%) from the prior fiscal year. Of the total decreases in expenses from the prior fiscal year, Water Fund expenses decreased $580,723 (24.4%), and Wastewater Fund expenses increased $117,665 (9.3%).
Personnel services decreased $534,759 (59.7%) from the previous fiscal year. The decrease was mostly due to GASB 68 and GASB 75 adjustments for CalPERS retirement employer contributions and Other PostEmployment Benefit (OPEB) adjustments. Actual employee salary and benefit amounts increased by about $35,178. The increase is due to a 5.6% cost-of-living adjustment for full-time employees effective July 1, 2022. In addition, effective January 1, 2023, full-time employees received an increase to their medical benefit from $800 per month to $1,200 per month.
Operations and maintenance expenses remained steady and increased by $19,697 (0.9%) from the previous fiscal year. Depreciation expense continues to be consistent. Non-Operating expenses also remained steady with a decrease of $2,118 (2.6%).
12
City of Buellton, California
Basic Financial Statements
For the year ended June 30, 2023
Management’s Discussion and Analysis
13 $-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
Water Wastewater
Program revenues Operating expenses
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
Water Wastewater
Program revenues Operating expenses
The expenses and program revenues summary for the business-type activities for the fiscal year ended June 30, 2023, and 2022, are as follows:
Expenses and Program Revenues
Business-type Activities
2022
Expenses and Program Revenues
Business-type Activities
2023
City of Buellton, California
Basic Financial Statements
For the year ended June 30, 2023
Management’s Discussion and Analysis
14 The revenues by source for the business-type activities for the fiscal years ended June 30, 2023, and 2022, are as follows:
Charges for services
97.67%
Operating and
capital grants and
contributions 0.00%
Investment income
2.33%
Revenues by Source - Business-type Activities
2023
Charges for services
100.22%
Operating and
capital grants and
contributions 0.39%
Investment income -0.61%
Revenues by Source - Business-type Activities
2022
City of Buellton, California
Basic Financial Statements
FortheyearendedJune3~2023
Management's Discussion and Analysis
FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS
The City of Buellton uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The fund financial statements focus on individual parts of the City government, reporting the City's operations in more detail than the government-wide financial statements.
Governmental funds
The focus of the City of Buellton's governmental funds is to provide information on near term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of Buellton's financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year.
At June 30, 2023, the City of Buellton's governmental funds reported combined ending fund balances of $16,240,174, an increase of $2,249,852 (16.1%) in comparison with the prior fiscal year ending fund balance. Approximately 84.2% of the total combined ending fund balance ($13,675,672) constitutes unassigned fund balance. The remainder of fund balance is "non-spendable," or restricted to indicate that it is not available for new spending because it has already been committed to fund amounts prepaid for the following fiscal year ($198,000) and restricted by other parties for a specific purpose ($2,366,502).
Total governmental revenue rose $859,356 (7.3%) and governmental expenditures increased $815,096 (8.7%).The majority of the revenue increase is in the General Fund with revenue from taxes increasing $370,448 (3.8%) from the prior fiscal year. Revenue from sales tax experienced the highest revenue growth of all-time. Sales tax revenue was $3,615,000 which is $328,552 (10.0%) greater than last fiscal year. In addition, revenue from use of money and property rose $300,322 (291.7%) due to higher interest earnings in the City's investment portfolio. The majority of the increase in governmental expenditures is in general government expenditures with an increase of $1,457,343 (75.2%) due to the payoff of CalPERS unfunded accrued liability (UAL) balance as of the June 30, 2021 valuation report. The City elected to make an additional discretionary payment (ADP) of about $ 1.2 million towards the CalPERS UAL balance. The increase in governmental expenditures was offset with a decrease in Capital Outlay. Capital outlay expenditures experienced a $750,141 (48.9%) decrease due to the completion of capital improvement projects the prior fiscal year.
Genera l Fund
The General Fund is the chief operating fund of the City of Buellton. The total fund balance in the General Fund is $13,977,067 of which $13,768,082 is shown as "unassigned." As a measure of liquidity, it is useful to compare both total fund balance and spendable fund balance to total fund expenditures. Total General Fund balance which is available in spendable form equals 149.4% of total General Fund expenditures of $9,214,985. The City Council policy goal is to have reserves of at least 35% of budgeted operating expenditures, which means the City's unrestricted fund balance exceeds policy goal. 15
City of Buellton, California
Basic Financial Statements
For the year ended June 30, 2023
Management's Discussion and Analysis
The fund balance of the City of Buellton's General Fund increased by $1,988,824 (16.6%) from the prior fiscal year. General Fund revenues totaled $11,542,541 which was an increase of $589,722 (5.4%) over fiscal year 21-22. General Fund expenditures increased $1,492,142 (19.3%) compared to the prior fiscal year.
Changes in General Fund Revenue
The increase in General Fund Revenue was attributed to several categories, the largest of which is taxes which increased $370,448 (3.8%). TOT revenue consisted of a $71,423 decrease, sales tax a $328,552 increase and property tax a $135,689 increase compared to prior year. These revenue increases were directly related to the recovery of tourism and leisure industry and increases in used and new auto sales.
Revenues from "use of money and property" increased $248,773 mostly due to higher interest rate earnings in the Local Agency Investment Fund (LAIF), Money Market, and Certificate of Deposits (CDs).
LAIF interest rate was 2.74% for quarter ending June 30, 2023 compared to the interest rate of 0.32% the prior year. LAIF interest earnings was $108,342 compared to $16,858 the prior year. Money market interest rate at June 30, 2023 was 3.35% compared to 0.20% the previous year.
Changes in General Fund Expenditures
About $120,120 (5.9%) of the increase in General Fund expenditures is in salary and benefits. Effective July 1, 2023, full-time employees were granted a 3.5% cost-of-living adjustment (COLA). COLA increases resulted in about a $60,000 increase to salaries In addition, effective January 1, 2023, full-time employees received $1,200 in monthly medical contribution compared to the previous $800 monthly medical benefit.
The change in the City's contribution resulted in an increase of $48,000 to employee benefits for the fiscal year. In addition, the increase is also attributed to salary and benefits due to the filled vacant full-time pOSition in the Planning Department for an Associate Planner.
General operating and maintenance expenditures increased $1,443,039 (25.8%) compared to the prior fiscal year. The majority of the increase was mainly due to a one-time payment of about $1.2 million towards California Public Employee's Retirement System (CaIPERS) pension plan's unfunded accrued liability (UAL) balance as ofthe June 30, 2021 measurement date. Additional contributions for the increase is due to various unexpected repairs throughout the City that required immediate response caused by the winter storms at the beginning of the 2023 calendar year. Repairs included cutting down trees and removing dead trees, clearing up debris and mud from roadways and replacing broken and torn down fences.
Transfers out of the General Fund decreased by $642,109 (65.5%) compared to the prior fiscal year. Last fiscal year, the majority of the transfers out for capital project were for the ENGlE energy savings project and completion of road maintenance project FY 2020/21. The following transfers are for Capital Improvement Projects (CIPs) and account for $338,732 of General Fund expenditures. The most significant CIPs expenditures as of June 30, 2023 are: McMurray Road Widening, Willemsen Parking Lot design, 16
City of Buellton, California
Basic Financial Statements
For the year ended June 30, 2023
Management's Discussion and Analysis
Willemsen House renovation design and project management, Road Maintenance Project FY 2021/22 design, and Road Maintenance Project FY 2022/23.
Major Fu'!ds, not including General Fund
• American Relief Plant Act (ARPA Fund), with a fund balance of $10,459 had a change in fund balance of $12,720 (562.6%) due to revenue received from interest earnings. • Capital Improvement Fund, with a fund balance of $0, had no net change. This fund is used for tracking capital improvement project expenditures and the amount of transfers in and out are equal.
Olher Governmental FJnds
• Housing Fund, with a fund balance of $496,481 had a change in fund balance of $6,569 (1.3%) due to revenue received from interest earnings.
• Traffic Mitigation Fund, with a fund balance of $36,707 had a change in fund balance of $572 (1.6%) due to revenue received from interest earnings.
• Gas Tax Fund, with a fund balance of $583,150 had a change in fund balance of $173,963 (42.5%) mostly due to the receipt of highway users tax and from SB1 Road Maintenance and Rehabilitation Account. Expenditures for annual road maintenance projects are being carried over to the next fiscal year.
• Measure A Fund, with a fund balance of $867,894 had a negative change in fund balance of $17,754 mainly due to the cost of annual road maintenance offset with Measure A monies.
Expenditures for future annual road maintenance projects are being carried over to the next fiscal year.
• Local Transportation Fund, with a fund balance of $371,285 had a change in fund balance of $84,573 mainly due to revenue received and transfers in from Measure for operating expenditures.
• Transportation Planning, with a negative fund balance of $103,254 had a change in fund balance of $385 due to revenue received from interest earnings.
Proprietary funds
The City of Buellton's proprietary funds provide the same type of information found in the governmentwide financial statements, but report activities that operate like a business and are primarily supported by customer fees.
As of June 30, 2023, total Net Position for the Water Fund was $8,661,590, an increase of $828,867 (10.6%) over last fiscal year. Unrestricted Net Position amounted to $5,377,904 an increase of $800,449 (17.5%). The Net Investment in Water Capital Assets amounted to $3,283,686, an increase of $281,387 (9.4%). The overall net change in the Net Position for the Water Fund is primarily due to revenue from charges for services and increase in deferred inflows of resources.
As of June 30, 2023, total Net Position for the Wastewater Fund remained steady at $3,529,562, an increase of $73,015 (2.1%) over last fiscal year. Unrestricted Net Position amounted to $1,395,275, a decrease of $152,314 (9.8%). The Net Investment in Wastewater Capital Assets amounted to $2,134,287, 17
City of Buellton, California
Basic Financial Statements
For the year ended June 30, 2023
Management's Discussion and Analysis
an increase of $225,329 (11.8%). The overall net change in the Net Position for the Wastewater Fund is primarily due to deferred inflows of resources and increase in capital assets.
GENERAL FUND BUDGETARY HIGHLIGHTS
In FY 2022-23, appropriation changes between the original and final budgets amounted to a decrease of $2,612,213 in the change in fund balance. The General Fund exceeded revenue projections while expenditures were within appropriations. Historically, the City has not expended all appropriations and does not complete all budgeted capital projects which creates budget savings. Overall, revenue exceeded expenditures by $2,327,556. The actual net change in Fund Balance is $1,988,824. The following is a summary of General Fund Budget variances for the period ending June 30, 2023.
SUMMARY OF GENERAL FUND BUDGET VARIANCES
Revenues:
Taxes
Licenses, permits, fees
Intergovernmental
Charges for services
Fines and forfeitures
Use of money and property
Other revenues
Total revenues
Expenditures:
General Government
Community Development
Cultural and Leisure
Public Safety
Public Works
Capital outlay
Debt service:
Principal
Interest
Total expenditures
Excess of revenues over(under
expenditures)
Other Financing Sources:
Transfers out
Total other financing sources
Net change in fund balance
Budgeted Amounts
Original Budget Final Budget
$ 7,890,169 $ 9,612,822 $
$
$
10,080
824,084
142,790
7,800
120,000
8,950
9,003,873
2,077,547 $
551,403
827,882
2,859,337
1,729,802
36,000
16,046
20,000
8,118,017
885,856
(1,417,745)
(1,417,745)
10,080
845,872
188,890
7,800
126,000
8,950
10,800,414
3,513,283 $
839,403
862,553
2,649,551
1,771,974
46,561
16,046
20,000
9,719,371
1,081,043
(4,225,145)
(4,225,145)
(531,889) $ (3,144,102) $
Changes from Originai Budget to Amended Budget
Actual Variance from
Amounts Final Budget
10,125,193 $ 512,371
16,515
866,870
353,871
9,254
155,522
15,316
11,542,541
3,394,521
607,692
860,179
2,642,118
1,657,244
31,621
21,610
9,214,985
2,327,556
(338,732)
(338,732)
1,988,824 $
6,435
20,998
164,981
1,454
29,522
6,366
742,127
118,762
231,711
2,374
7,433
114,730
46,561
(15,575)
(1,610)
504,386
1,246,513
(3,886,413)
3,886,413
5,132,926
The City adopted the original FY 2022-23 Budget that identifies changes to City appropriations in response to the economic conditions. The City adopts a biennial budget, and at the time the original budget was adopted in June 2021, there was uncertainty of the length of the pandemic and its economic recovery which projected decreases to revenue, specifically transient occupancy tax and sales tax. Fortunately, the General Fund revenue experienced a quick recovery from revenue losses attributed to the COVID-19 pandemic. FY 2022-23 Budget was revised during Mid-Cycle in June 2022, and during its quarterly reviews during the fiscal year to reflect the current economic status and priorities. 18
City of Buellton, California
Basic Financial Statements
For the year ended June 30, 2023
Management's Discussion and Analysis
Revenue changes from the original budget to amended budget equals about $1.8 million (20.0%). The majority of change in revenue from taxes is in the projection of transient occupancy tax which projected a $686,515 (23.6%) increase due to revenue loss recovery from higher occupancy rates. Sales tax revenue projections increased $560,104 (19.4%) to reflect higher sale tax revenue derived from online sales, Restaurant and Hotels, Foods & Drugs, Business and Industry and Autos and Transportation. Revenue projections from charges for services was increased by $46,100 (32.3%) to reflect more park reservations and recreation activities that became available after the economy opened back up.
Expenditure changes from the original budget to the amended budget equals about $1.6 million (19.7%).
Most of the increase is due to the one-time payment to CalPERS of about $1.2 million to lower the City's unfunded accrued liability. Other significant changes to the budget includes full-time employee cost-ofliving adjustment (COLA) contributes to the increase in expenditure appropriations. For all departments with Employee Services, full-time employees received a 3.0 percent COLA effective July 1, 2022. In addition, full-time employees and retirees received an additional $400 per month towards their health insurance for a maximum employer contribution of $1,200. The increase is effective January 1, 2023. In addition, contracts that were not fulfilled from the original budget were carried forwarded and added to the amended budget that contributed about $250,000.
Changes from Amended Budget to Actuols
The City received $742,127 more in revenue than originally anticipated. As discussed earlier, most of the change can be contributed to revenue from taxes, more specifically TOT. TOT revenue was about $220,000 more than projected which contributed to a much faster pace in revenue recovery after the pandemic. In addition, sales tax revenue exceeded projections and experienced a record high revenue amount of $3,615,000, $165,000 more than projected.
General Fund expenditures ended the fiscal year $504,386 below budget projections. Expenditure savings resulted from deferred repair and maintenance expenditures in addition to savings from current service contracts. Transfers Out from the General Fund has a budget savings of about $1.25 million resulting from capital improvement projects that were not started, or not yet completed. Historically, transfers for capital projects are carried over into the next fiscal year.
CAPITAL ASSETS
The City of Buellton's investment in capital assets for its governmental and business-type activities as of June 30, 2023 amounts to $35,030,116 (net of accumulated depreciation). This investment in capital assets includes land, buildings and improvements, equipment and infrastructure. The total increase in the City's investment in capital assets for the current fiscal year was $523,606. Of the total increase, governmental activities showed an increase of $81,075, resulting from an increase in net depreciable capital assets. An increase of $442,531 in Business-type activities capital assets is the net result of ongoing projects offset by depreciation.
19
City of Buellton, California
Basic Financial Statements
For the year ended June 30, 2023
Management's Discussion and Analysis
Governmental Activities
2023 2022
Land $ 2,639,835 $ 2,639,835
Contruction in progress 319,810 994,288
Total Nondepreciable Capital Assets 2,959,645 3,634,123 Buildings and improvements 8,225,942 8,133,231
Equipment 730,7 16 730,716
Infrastructure 24,401,347 23,036,768
Total Depreciable Capital Assets 33,358,005 31 ,900,715 Less: Accumulated Depreciation 9,906,692 9,204,955
Net Depreciable Capital Assets 23,451,313 22,695,760
Net Capital Assets $ 26,410,958 $ 26,329,883
$
$
Business-type Activities Totals
2023 2022 2023 2022
247,691 $ 247,691 $ 2,887,526 2,887,526
349,573 3,424,198 669,383 4,418,486
597,264 3,671 ,889 3,556,909 7,306,012 - - 582,135 582,135 8,808,077 8,715,366 861,814 861,814 1,592,530 1,592,530
17,771,500 13,829,470 42,172,847 36,866,238
19,215,449 15,273,419 52,573,454 47,174,134
11 ,193,555 10,768,681 21,100,247 19,973,636
8,021 ,894 4,504,738 31,473,207 27,200,498
8,619,158 $ 8,176,627 $ 35,030,116 $ 34,506,510
More detail of the capital assets and current activity can be found in the notes to the financial statements on Page 42 for significant accounting policies and Note 3 on Page 49 for other capital asset information.
DEBT ADMINISTRATION
As of June 30, 2023, the City had about $9.85 million of outstanding long-term obligations related to governmental activities and business-type activities. The City has no general obligation or revenue bonds.
Buellton enjoys a relatively healthy local economy; however, it does not currently have a bond rating because it has zero bonded debt on its balance sheet. When the City decides to go to Wall Street to sell bonds for future infrastructure improvements for Water or Wastewater systems, the City will go before Moody's Investor Service or Fitch's Rating Service for a credit rating. There is a definite need to update the user fees for Water and Wastewater services. An adequate mUlti-year rate management program will provide the best opportunity for obtaining an investment-grade credit rating for the City of Buellton in the future .
Debt outstanding as of June 30, 2023, with a comparison to prior fiscal year and the net change are as follows:
Governmental Activities Business-type Activities Totals DEBT DESCRIPTION 2023 2022 2023 2022 2023 2022
Compensated absences 126,036 116,818 $ 65,919 $ 54,724 191,955 $ 171,542 Note payable - direct borrowing 800,296 816,342 3,201,185 3,265,370 4,001,481 4,081,712 Lease liabilities 44,892 60,466 44,892 60,466
OPEB liability 1,922,064 2,212,678 810,054 913,550 2,732,118 3,126,228 Net pension liability 2,293,285 917,510 594,961 334,789 2,888,246 1,252,299 Total long-term liability $ 5, 186,573 $ 4,123,814 $ 4,672,119 $ 4,568,433 $ 9,858,692 $ 8,692,247 Additional information on long-term debt can be found in Note 7 - Changes in Long-Term Liabilities in the notes to the basic financial statements on pages 52 and 53. 20
City of Buellton, California
Basic Financial Statements
For the year ended June 30, 2023
Management's Discussion and Analysis
ECONOMIC OUTLOOK
The City completed FY 2022-23 with better than expected operating financial results after the budget was revised to reflect changes to City operations and improvements. The General Fund ended the 2022-23 fiscal year with a fund balance of $13,977,067. Operating expenditures approved in the 2022-23 budget amount to $9,719,371. The result is a coverage ratio of about 143.8%. The General Fund cash reserves were $13,220,003 and revenue exceeded expenditure (including other financing sources) in 2023 by $1,988,824. Because it is difficult to fully anticipate dramatic changes in the national and local economies, the Council has set an unassigned fund balance goal of 35% of the general fund's operating expenditures.
The City finished the year exceeding budgeted revenues in all revenue categories. As of July 2023, the federal fund rate set a target rate range of 5.25% to 5.50% compared to the 2.25% to 2.50% range previously targeted in July 2022. For the City, higher interest rates means a better return in LAIF and CDs increasing interest revenue. Additionally, higher interest rates may have an adverse effect on the economy slowing growth. The City's primary sources of revenue (TOT, Sales Tax, Property Tax, Vehicle License Fee, and Franchise Fees) account for about 94% of the City revenues. In recent years, the City has experienced a growth in tourism, property values and population. The primary economic drivers that impact sales tax and TOT revenue are the unemployment rate and consumer confidence. A slowing economy could increase the unemployment rate resulting in less disposable income for tourism and spending, which means the City can expect lower sales tax and TOT revenue than projected in the upcoming years. The impact on sales tax and TOT will be dependent on the severity and duration of the economic slowdown, if a slowdown were to occur.
Additionally, higher interest rates may impact future property tax revenues. During 2023, home prices in the City fluctuated with a dip in Fall and Winter 2022-23, rebounding with a median home price of $826,610 in June 2023. As of December 2023, the median home price continued to increase to $875,259.
Rapidly increasing mortgage rates have slowed down home sales in California with home sales as of June 2023 decreasing by 36.4% when compared to year-to-year sales as of June 2022. Due to the time lag between when the property values are assessed on January 1st by County's assessor's office, the impact won't be known until FY 2024-25.
NEXT YEAR'S BUDGETED APPROPRIATIONS
The adopted budget for all City funds for the new fiscal year of 2023-24 is $23,698,431. The amended budget for fiscal year 2022-23 totals $24,402,009 and is summarized, with CIP expenditures shown in the Citywide CIP row of the chart below for consistent comparison as follows:
Amount Percentage
FY 2023-24 FY 2022-23 Change Change
General fund $ 9,251,975 $ 9,734,306 $ (482,331 ) (4.95)% Water & Sewer Funds 4,916,278 5,313,291 (397,013) (7.47)% Citywide CIP Fund 9,126,178 8,960,412 165,766 1.85%
Special revenue funds 404,000 394,000 10,000 2.54%
Total budget $ 23,698,431 $ 24,402,009 $ (703,578) (2.88)% 21
City of Buellton, California
Basic Financial Statements
For the year ended June 30, 2023
Management's Discussion and Analysis
1. General Fund - Shows a decrease of $482,331. Decrease is offset with various increase. Significant changes affecting the decrease in General Fund expenditures are discussed below:
• City Council adopted Ordinance No.22-03 authorizing an increase in City Council's compensation. Effective January 1, 2023, the compensation for City Council Members shall be $550 per month, and $650 per month for the Mayor. Previous pay was $440 for City Council Members and the Mayor.
• Full-time employee salary and benefit increases. City Council authorized a 5.6% cost-ofliving adjustment. • The City paid an additional discretionary payment (ADP) of about $1.5 million in FY 2022-
23. There is no mandatory annual contribution in FY 2023-24 as the result of the ADP resulting in a decrease in expenditures. This results about $1.2 million budget change. • Increase in contract services due to new contract renewal rates or new contracts such as grant management company, California consulting.
• Increase to contribution to the Santa Ynez Senior Center from $70,208 to $140,406. • Increase to contribution to the Arts and Culture Program from $50,000 to $100,000. • Acquisitions of new City trucks, back/hoe skip loader lease. • Additional increase primarily due to the cost associated with the comprehensive update to the City's Title 19 Zoning Code and City's 2025 General Plan. This update will cover an approximately 20 year planning horizon, and will consist of a comprehensive update to all seven required elements and optional elements, and the required environmental review
2. Water & Wastewater Funds - Shows a decrease of $397,013. The majority of the decrease includes $381,000 reduction for the cost of State Water. State Water costs decreased as the result of the payoff of the CCWA Bond Payment during FY 2021/22 that was included as part as the City's annual state water payment. The remaining of decrease is attributed to transfers out from reserve for capital improvement projects.
3. Citywide Capital Improvement Program (CIP) Fund - The CIP Fund expenditures relate to Capital Improvements. CIP fund shows an increase of $165,766. Historically, the City does not complete all budgeted projects and are carried over to the next fiscal year. The increase is due to increased construction.
4. Special Revenue Funds - Shows a small change in expenditures. Special revenue funds have restrictions against the use of the revenue received and expenditures are consistent.
Quarterly reports will be presented to support the financial management of City resources to provide information to the City Council and public. As part of the mid-year budget review, the City prepares a report on financial position, considers economic factors and highlights trends based on the City's budget versus what actually occurred during the period. A discussion of other economic factors provides a means of comparing the local economy against the larger economic events that may affect the City. This provides Council with a budget review at four periods during the year. Council has a better control of costs, while 22
City of Buellton, California
Basic Financial Statements
For the year ended June 30, 2023
Management's Discussion and Analysis
identifying financial requirements prior to the close of the fiscal year. Modifications to the original budget take place each quarter as needed.
REQUESTS FOR INFORMATION
This Annual Comprehensive Financial Report is intended to provide citizens, taxpayers, investors, and creditors with a general overview of the City' s finances. If you have any questions about this report and need additional financial information contact Finance Director, 107 West Highway 246, Buellton, CA 93427, or visit the City's web page at www.cityofbuellton.com. 23
THIS PAGE IS INTENTIONALLY LEFT BLANK
CITY OF BUELLTON
STATEMENT OF NET POSITION
June 30, 2023
ASSETS
Cash and investments
Cash and investments - restricted
Accounts receivable, net
Interest receivable
Lease receivable
Inventory
Prepaid items
Non-current assets
lease receivable, non-current
Capital assets:
Right to use asset
Less accumulated amortization
Non Depreciable:
Land
Construction in progress
Depreciable:
Buildings and improvements
Equipment
Infrastructure
Accumulated depreciation
Total non-cu rrent assets
Total assets
DEFERRED OUTFLOWS OF RESOURCES
Deferred pension
Deferred OPES
Total deferred outflows of resources
LIABILITIES
Accounts payable
Accrued wages
Deposits
Interest payable
Unearned revenue
Noncurrent liabilities:
Due within one year
Compensated absences
Note payable - direct borrowing
Lease liabilities
OPES liability
Total due within one year
Due in more than one year
Compensated absences
Note payable ~ direct borrowing
Lease liabilities
OPES liability
Net pension liability
Total due in more than one year
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Leases
Deferred pension
Deferred OPES
Total deferred inflows of resources
NET POSITION
Net investment in capital assets
Restricted for:
FSA
Housing
Streets and roads
Unrestricted
Total net position
The notes to basic financial statements are an integral part of this statement. 25 Governmental
Activities
16,645,627
10,985
1,372,892
52,509
118,722
183,776
426,482
70,879
(27,095)
2,639,835
319,810
8,225,942
730,716
24,401,347
(9,906,692)
26,881,224
45,265,735
2,342,674
374,431
2,717,105
536,647
62,221
395,125
9,878
1,045,846
37,862
18,250
16,048
101,191
173,351
88,174
782,046
28,844
1,820,873
2,293,285
5,013,222
7,236,290
530,980
116,430
321,445
968,855
25,609,554
10,985
496,481
1,859,036
11,801,639
39,777,695 $
Business-type
Activities
6,397,564
371,628
19,492
141,916
899,766
247,691
349,573
582,135
861,814
17,771,500
(11,193,555)
8,619,158
16,449,524
607,773
157,804
765,577
106,530
9,684
29,935
40,000
13,184
72,999
42,647
128,830
52,735
3,128,186
767,407
594,961
4,543,289
4,858,268
30,207
135,474
165,681
5,417,973
6,773,179
12,191,152
Total
23,043,191
10,985
1,744,520
72,001
118,722
141,916
1,083,542
426,482
70,879
(27,095)
2,887,526
669,383
8,808,077
1,592,530
42,172,847
(21,100,247)
35,500,382
61,715,259
2,950,447
532,235
3,482,682
643,177
71,905
425,060
49,878
1,045,846
51,046
91,249
16,048
143,838
302,181
140,909
3,910,232
28,844
2,588,280
2,888,246
9,556,511
12,094,558
530,980
146,637
456,919
1,134,536
31,027,527
10,985
496,481
1,859,036
18,574,818
51,968,847
CITY OF BUELLTON
STATEMENT OF ACTIVITIES
For the Fiscal Year Ended June 30, 2023
Governmental activities:
General government
Community development
Cultural and leisure
Public safety
Public works
Interest on long-term debt
Total governmental activities
Business-type activities:
Water
Wastewater
Total business-type activities
Total
$
$
Expenses
3,044,661
677,260
694,252
2,645,358
1,830,795
21,488
8,913,814
1,798,264
1,381,556
3,179,820
12,093,634
General revenues:
Taxes:
Property taxes
Sales and use taxes
Transient lodging tax
Franchise taxes
Other taxes
Fines and forfeitures
Investment income (loss)
Other general revenues
Transfers
$
$
Charges for
Services
152,071
202,046
354,117
2,551,533
1,238,235
3,789,768
4,143,885
Total general revenues and transfers
Change in net position
Net position, beginning of fiscal year
Net position, end offiscal year
The notes to basic financial statements are an integral part of this statement. 26 Program Revenues
$
$
Operating
Contributions
and Grants
6,590
5,000
165,271
1,733,563
1,910,424
1,910,424
$
$
capital
Contributions
and Grants
$
$
Net (Expenses) Revenue and Changes in Net Position
Governmental
Activities
(2,886,000)
(672,260)
(492,206)
(2,480,087)
(97,232)
(21,488)
(6,649,273)
(6,649,273)
1,886,905
3,615,000
4,220,959
377,541
24,788
9,254
197,373
15,316
(201,694)
10,145,442
3,496,169
36,281,526
39,777,695
$
$
Business-type
Activities
27 753,269
(143,321)
609,948
609,948
90,240
201,694
291,934
901,882
11,289,270
12,191,152
$
$
Total
(2,886,000)
(672,260)
(492,206)
(2,480,087)
(97,232)
(21,488)
(6,649,273)
753,269
(143,321)
609,948
(6,039,325)
1,886,905
3,615,000
4,220,959
377,541
24,788
9,254
287,613
15,316
10,437,376
4,398,051
47,570,796
51,968,847
FUND FINANCIAL STATEMENTS
Fund
Governmental Funds:
General Fund
American Rescue Plan Act Fund
Capital Improvement Project Fund
MAJOR FUNDS
28 Description
Primary operating fund of the City; accounts for all activities except those legally or administratively required to be accounted for in other funds.
Accounts for revenue from the American Rescue Plan Act
funding the City was allocated for fiscal recovery.
Accounts for capital improvement projects by centralizing project expenditures. Projects are tracked and managed for the purposes of planning, scheduling, and budgeting capital improvements.
CITY OF BUELLTON
GOVERNMENTAL FUNDS
BALANCE SHEET
June 30, 2023
Capital
American Improvement Other
General Rescue Plan Act Project Governmental
Fund Fund Fund Funds Totals
ASSETS
Cash and investments $ 13,220,003 $ 1,025,994 $ 177,473 $ 2,222,157 $ 16,645,627 Cash and investments - restricted 10,985 10,985
Accounts receivable 1,207,141 165,751 1,372,892
Interest receivable 40,386 3,277 8,846 52,509
lease receivable 545,204 545,204
Due from other funds 136,153 136,153
Prepa id items 183,776 183,776
Total assets $ 15,343,648 $ 1,029,271 $ 177,473 $ 2,396,754 $ 18,947,146
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND FUND BALANCES
Liabilities:
Accounts payable $ 351,221 $ $ 177,473 $ 7,953 $ 536,647 Accrued wages and benefits 62,221 62,221
Deposits 395,125 395,125
Unearned revenue 27,034 1,018,812 1,045,846
Due to other funds 136,153 136,153
Total liabilities 835,601 1,018,812 177,473 144,106 2,175,992 Deferred Inflows of Resources:
Leases 530,980 530,980
Total deferred inflOWS of resources 530,980 530,980
Fund Balances:
Nonspendable:
Prepaid items 183,776 183,776
leases 14,224 14,224
Restricted:
FSA 10,985 10,985
Housing 496,481 496,481
Streets, roads, and transportation 1,859,036 1,859,036
Unassigned 13,768,082 10,459 (102,869) 13,675,672
Total fund balances 13,977,067 10,459 2,252,648 16,240,174 Total liabilities, deferred inflows of
resources, and fund balances $ 15,343,648 $ 1,029,271 $ 177,473 $ 2,396,754 $ 18,947,146 The notes to basic financial statements are an integral part of this statement. 29
CITY OF BUELLTON
RECONCILIATION OF THE GOVERNMENTAL FUNDS - BALANCE SHEET
TO THE STATEMENT OF NET POSITION
June 30, 2023
Total fund balances - governmental funds
In governmental funds, only current assets are reported. In the statement of net position, all assets are reported, including capital assets, leased assets, accumulated depreciation, and accumulated amortization.
Capital assets at historical cost
Accumulated depreciation
Leased assets at historical cost
Accumulated amortization
Net
$ 36,317,650
(9,906,692)
70,879
(27,095)
In governmental funds, interest on long-term debt is not recognized until the period in which it matures and is paid. In the government-wide statement of activities, it is recognized in the period that it is incurred.
Long-term liabilities: In governmental funds, only current liabilities are reported. In the statement of net position all liabilities, including long-term liabilities, are reported.
Long-term liabilities relating to governmental activities consist of:
Compensated absences payable
Note payable - direct borrowing
Lease liability
OPES liability
Net pension liability
$
Total
In governmental funds, deferred outflows and inflows of resources relating to 126,036
800,296
44,892
1,922,064
2,293,285
pensions and OPES are not reported because they are applicable to future periods.
In the statement of net position, deferred outflows and inflows of resources relating to pensions and OPES are reported.
Deferred outflows of resources relating:
to pensions
to OPES
Deferred inflows of resources relating:
to pensions
to OPES
Total net position - governmental activities
$ 2,342,674
374,431
(116,430)
(321,445)
The notes to basic financial statements are an integral part of this statement. 30 $ 16,240,174
26,454,742
(9,878)
(5,186,573)
2,279,230
$ 39,777,695
CITY OF BUELLTON
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES For the Fiscal Year Ended June 30, 2023
Capital
American Improvement Nonmajor
General Rescue Pia n Act Project Governmental
Fund Fund Fund Funds Totals
Revenues:
Taxes $ 10,125,193 $ $ $ $ 10,125,193
licenses, permits, and fees 16,515 105 16,620
Intergovernmental 866,870 201,694 825,240 1,893,804
Charges for services 353,871 246 354,117
Fines and forfeitures 9,254 9,254
Use of money and property 155,522 12,720 29,131 197,373 Other 15,316 15,316
Total revenues 11,542,541 214,414 854,722 12,611,677
Expenditures:
General government 3,394,522 3,394,522
Community development 607,692 607,692
Cultural and leisure 860,179 860,179
Public safety 2,642,118 2,642,118
Public works 1,657,244 162,334 1,819,578
Capital outlay 782,812 782,812
Debt Service:
Principal 31,620 31,620
Interest 21,610 21,610
Total expenditures 9,214,985 782,812 162,334 10,160,131 Excess of revenues over (under) expenditures 2,327,556 214,414 (782,812) 692,388 2,451,546 Other financing sources (uses):
Transfers in 782,812 97,000 879,812
Transfers out (338,732) (201,694) (541,080) (1,081,506) Total other financing sources (uses) (338,732) (201,694) 782,812 (444,080) (201,694) Net change in fund balances 1,988,824 12,720 248,308 2,249,852 Fund balances - July 1 11,988,243 (2,261) 2,004,340 13,990,322 Fund balances - June 30 $ 13,977,067 $ 10,459 $ $ 2,252,648 $ 16,240,174 The notes to basic financial statements are an integral part ofthis statement. 31
CITY OF BUELLTON
RECONCILIATION OF THE STATEMENT OF
REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
Forthe Fiscal Year Ended June 30, 2023
Total net change in fund balances - governmental funds
Capital outlays are reported in governmental funds as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which additions to capital outlay of $782,812 was more than depreciation expense ($701,737).
Right to use assets are reported in governmental funds as expenditures. However, in the statement of activities, the cost of those assets is allocated over the length of the lease. This is the amount by which additions to right to use assets under GASS Statement No. 87 of $0 is less than amortized expense of $(16,040).
In governmental funds, interest on long-term debt is recognized in the period that it becomes due. In the government-wide statement of activities, it is recognized in the period that it is incurred.
Unmatured interest owing at the end of the period, less matured interest paid during the period but owing from the prior period was:
In the statement of activities, compensated absences are measured by the amounts earned during the fiscal year. In governmental funds, however, expenditures for these items are measured by the amount of financial resources used (essentially the amounts paid). This fiscal year, vacation earned exceeded the amounts used by $9,218.
In governmental funds, OPES costs are recognized when employer contributions are made.
In the statement of activities, OPES costs are recognized on the accrual basis. This fiscal year, the difference between accrual-basis OPES costs and actual employer contribution was:
In governmental funds, repayments of long-term debt are reported as expenditures.
In the government-wide statements, repayments of long-term debt are reported as reductions of liabilities.
In governmental funds, pension costs are recognized when employer contributions are made. In the statement of activities, pension costs are recognized on the accrual basis.
This year, the difference between accrual-basis pension costs and actual employer contributions was:
The issuance of lease payable provides current financial resources to governmental funds, while the repayment of the principal of lease payable consumes the current financial resources of governmental funds. Neither transaction has any effect on net position. The amount is the net effect of these differences in the treatment of lease payable and related items.
Principal payments on lease payable
Changes in net position - governmental activities
The notes to basiC financial statements are an integral part of this statement. 32 $ 2,249,852
81,075
(16,040)
122
(9,218)
(138,340)
16,046
1,297,098
$ 15,574
15,574
$ 3,496,169
Fund
Major Funds:
Water Fund
Wastewater Fund
PROPRIETARY FUNDS
33 Description
Accounts for revenues and expenses associated with the City's Water enterprise operation.
Accounts for all activities associated with the operation and maintenance of providing Sewer services.
CITY OF BUELLTON
PROPRIETARY FUNDS
STATEMENT OF NET POSITION
June 30, 2023
Water Wastewater
Fund Fund Totals
ASSETS
Current assets:
Cash and investments $ 4,677,679 $ 1,719,885 $ 6,397,564 Accounts receivable, net 213,521 158,107 371,628
Interest receivable 14,325 5,167 19,492
Inventory 141,916 141,916
Prepaid items 844,075 55,691 899,766
Total current assets 5,891,516 1,938,850 7,830,366
Capital assets:
Land 247,691 247,691
Construction in progress 158,997 190,576 349,573
Buildings and improvements 582,135 582,135
Equipment 435,002 426,812 861,814
Infrastructure 9,512,458 8,259,042 17,771,500
10,936,283 8,876,430 19,812,713
Less accumulated depreciation (5,691,871) (5,501,684) (11,193,555) Total capital assets (net of accumulated depreciation) 5,244,412 3,374,746 8,619,158 Total assets 11,135,928 5,313,596 16,449,524
DEFERRED OUTFLOWS OF RESOURCES
Deferred pension 303,878 303,895 607,773
Deferred OPEB 78,471 79,333 157,804
Total deferred outflows of resources 382,349 383,228 765,577
LIABILITIES
Current liabilities:
Accounts payable 26,759 79,771 106,530
Accrued wages and benefits 4,842 4,842 9,684
Deposits 29,935 29,935
Interest payable 24,500 15,500 40,000
Compensated absences, current 5,434 7,750 13,184
Note payable - direct borrowing, current 44,712 28,287 72,999 OPEB liability, current 21,207 21,440 42,647
Total current liabilities 157,389 157,590 314,979
Noncurrent liabilities:
Note payable - direct borrowing, noncurrent 1,916,014 1,212,172 3,128,186 Compensated absences 21,734 31,001 52,735
OPEB liability 381,608 385,799 767,407
Net pension liability 297,472 297,489 594,961
Total noncurrent liabilities 2,616,828 1,926,461 4,543,289 Total liabilities 2,774,217 2,084,051 4,858,268
DEFERRED INFLOWS OF RESOURCES
Deferred pension 15,103 15,104 30,207
Deferred OPEB 67,367 68,107 135,474
Total deferred inflows of resources 82,470 83,211 165,681 NETPOSmON
Net investment in capital assets 3,283,686 2,134,287 5,417,973 Unrestricted 5,377,904 1,395,275 6,773,179
Total net pOSition $ 8,661,590 $ 3,529,562 $ 12,191,152 The notes to basic financial statements are an integral part of this statement. 34
CITY OF BUELLTON
PROPRIETARY FUNDS
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION For the Fiscal Year Ended June 30, 2023
Water Wastewater
Fund Fund Totals
Operating Revenues:
Charges for services $ 2,549,581 $ 1,238,235 $ 3,787,816 Other operating revenues 1,952 1,952
Total operating revenues 2,551,533 1,238,235 3,789,768
Operating Expenses:
Personnel services 184,090 176,711 360,801
Operations and maintenance 1,323,710 990,433 2,314,143
Depreciation 241,463 183,411 424,874
Total operating expenses 1,749,263 1,350,555 3,099,818
Operating income (loss) 802,270 (112,320) 689,950
Non-Operating Revenues (Expenses):
Investment income (loss) 64,480 25,760 90,240
Interest expense (49,001) (31,001) (80,002)
Total non-operating revenues (expenses) 15,479 (5,241) 10,238 Income (loss) before transfers and capital contributions 817,749 (117,561) 700,188 capital Contributions and Transfers
Transfers in 11,118 190,576 201,694
Total capital contributions 11,118 190,576 201,694
Change in net position 828,867 73,015 901,882
Net position, July 1 7,832,723 3,456,547 11,289,270
Net position, June 30 $ 8,661,590 $ 3,529,562 $ 12,191,152 The notes to basic financial statements are an integral part of this statement. 35
CITY OF BUELLTON
PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
For the Fiscal Year Ended June 30, 2023
Water Wastewater
Fund Fund Totals
Cash Flows From Operating Activities:
Receipts from customers $ 2,549,809 $ 1,216,978 $ 3,766,787 Payments to suppliers (1,512,113) (976,697) (2,488,810) Payments to employees (393,242) (390,286) (783,528)
Net cash provided (used) by operating activities 644,454 (150,005) 494,449 Cash Flows From Capital and Related Financing Activities:
Acquisition of capital assets (483,537) (383,868) (867,405) Note principal payments (39,313) (24,872) (64,185)
I nterest payments (49,001) (31,001) (80,002)
Net cash used by capital and related
financing activities (571,851) (439,741) (1,011,592)
Cash Flows From Non-Capital Financing Activities:
Transfers 11,118 190,576 201,694
Net cash provided by non-capital financing
activities 11,118 190,576 201,694
Cash Flows From Investing Activities:
Investment income 53,780 22,224 76,004
Net cash used by investing activities 53,780 22,224 76,004 Net decrease in cash and cash equivalents 137,501 (376,946) (239,445) Cash and cash equivalents - July 1 4,540,178 2,096,831 6,637,009 Cash and cash equivalents - June 30 $ 4,677,679 $ 1,719,885 $ 6,397,564 Reconciliation of operating income to net cash provided (used) by operating activities:
Operating income (loss) $ 802,270 $ (112,320) $ 689,950 Adjustments to reconcile operating income to net cash
provided (used) by operating activities:
Depreciation expense 241,463 183,411 424,874
Change in assets, deferred outflows of resou rces, liabilities, and deferred inflows of resources:
Receivables, net 2,926 (21,257) (18,331)
Prepaid expenses (152,554) (21,039) (173,593)
Inventories (3,725) (3,725)
Accounts and other payables (32,124) 34,775 2,651
Accrued wages and benefits (13,347) (13,365) (26,712)
Deposits (4,650) (4,650)
Compensated absences 4,041 7,154 11,195
OPEB liability (46,414) (57,082) (103,496)
Deferred outflows of resources (211,335) (208,895) (420,230) Net pension liability 130,083 130,089 260,172
Deferred inflows of resources (72,180) (71,476) (143,656) Net cash provided (used) by operating activities $ 644,454 $ (150,005) $ 494,449 The notes to basic financial statements are an integral part of this statement. 36
NOTES TO THE FINANCIAL STATEMENTS
CITY OF BUELLTON
INDEX TO NOTES TO THE FINANCIAL STATEMENTS
For the year ended June 30,2023
Note 1-Summary of Significant Accounting Policies ............................................................................................................................. 38 Note 2 - Cash and Investments ............................................................................................................................................................... 46 Note 3 - Capital Assets ............................................................................................................................................................................ 49 Note 4 - Right to Use Lease Asset ........................................................................................................................................................... 50 Note 5 - Lease Receivable ....................................................................................................................................................................... 50 Note 6 - Long-term Liabilities .................................................................................................................................................................. 51 Note 7 - Changes in Long-term Liabilities ............................................................................................................................................... 52 Note 8 -Interfund Transactions .............................................................................................................................................................. 53 Note 9 - Risk Management ..................................................................................................................................................................... 54 Note 10 - Pension Plan ............................................................................................................................................................................ 55 Note 11- Post-Employment Health Care Benefits (OPEB) ...................................................................................................................... 60 Note 12 - Contingencies and Commitments ........................................................................................................................................... 63 Note 13 - Joint Operating Agreements ........................................................................................................................................ , .......... 63 Note 14 - Deficit Fund Balance ............................................................................................................................................................... 63 Note 15 - Excess Expenditures Over Appropriations .............................................................................................................................. 63 37
CITY OF BUELLTON
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
The reporting entity is the City of Buellton. There are no component units included in this report that meet the reporting entity definition criteria of GASB Statement No. 14, The Financial Reporting Entity, as amended by GASB Statement No. 39, GASB Statement No. 61, GASB Statement No. 80, and GASB Statement No. 90.
The City of Buellton (City) was incorporated in 1992, under the laws and regulations ofthe State of California (State). The City operates under a City Council/Manager form of government and provides the following services: public safety (Police and Fire), highways and streets, water service, wastewater, public improvements, planning and zoning, and general administration.
B. Basis of Presentation
The City's basic financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. The Governmental Accounting Standards Board is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States of America.
Government-wide Statements
The Statement of Net Position and the Statement of Activities display information about the primary government (the City). These statements include the financial activities of the overall City government, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities although interfund services provided and used are not eliminated in the process of consolidation.
Government activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions.
The Statement of Activities presents a comparison between direct expenses and program revenues for each segment of the City's governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a function. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs, (b) grants and contributions that are restricted to meeting the operational needs of a program, and (c) fees, grants, and contributions that are restricted to financing the acquisition or construction of capital assets. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
Fund Financial Statements
The fu nd financial statements provide information about the City's fu nds. Separate statements for each fund category (governmental and proprietary) are presented. The emphasis of fund financial statements is on major individual funds, each of which is displayed in a separate column. All remaining governmental funds are aggregated and reported as non major funds.
Proprietary fund financial statements include: a Statement of Net Position; a Statement of Revenues, Expenses, and Changes in Net Position; and a Statement of Cash Flows for all proprietary funds.
Proprietary funds are accounted for using the "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or non-current) are included on the Statement of Net Position. The Statement of Revenues, Expenses, and Changes in Net Position presents increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned, while expenses are recognized in the period in which liability is incurred.
38
CITY OF BUELLTON
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2023
NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) B. Basis of Presentation (Continued)
Operating revenues in the proprietary funds are those revenues that are generated from the primary operation of the fund. All other revenues are reported as non-operating revenues. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as non-operating expenses.
C. Major Funds
GASB Statement No. 34 defines major funds and requires that the City's major funds are identified and presented separately in the fund financial statements. All other funds, called nonmajor funds, are combined and reported in a single column in the Fund Statements as Other Governmental Funds, regardless of their fund-type.
Major funds are defined as funds that have either assets plus deferred outflows, liabilities plus deferred inflows, revenues, or expenditures/expenses at least ten percent of their fund-type total or at least five percent of the total for all funds. The General Fund is always a major fund. The City may also voluntarily select other funds it believes should be presented as major funds.
The City reported the following major governmental funds in the accompanying financial statements:
Genera/ Fund - Accounts for all general revenues of the City not specifically levied or collected for other City funds and the related expenditures. The General Fund accounts for all financial resources of a governmental unit which are not accounted for in other funds.
American Rescue Plan Act Fund - Accounts for revenue from the American Rescue Plan Act funding the City was allocated for fiscal recovery.
Capita/Improvement Project Fund - Accounts for capital improvement projects by centralizing project expenditures. Projects are tracked and managed for the purposes of planning, scheduling, and budgeting capital improvements.
The City reported the following major proprietary funds:
Water Fund - This fund was established as a separate fund to account for the operation of the City's water utility. It is a self-supporting activity that provides services on a user-charge basis to residents and businesses located in the City.
Wastewater Fund - This fund was established as a separate fund to account for the operation of the City's wastewater utility. It is a self-supporting activity that provides services on a user-charge basis to residents and businesses located in the City.
39
CITY OF BUELLTON
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2023
NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Basis of Accounting
The government-wide and proprietary funds financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place.
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available.
The City considers all revenues reported in the governmental funds to be available if the revenues are collected within sixty days after fiscal year end. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general .Iong-term debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent that they have matured.
Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of long-term debt and acquisitions under capital leases are reported as other financing sources.
Non-exchange transactions, in which the City gives or receives value without directly receiving or giving equal value in exchange, include property taxes, grants, entitlements, and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants, entitlements, and donations are recognized in the fiscal year in which all eligibility requirements have been satisfied.
Other revenues susceptible to accrual include other taxes, intergovernmental revenues, interest, and charges for services.
Grant revenues are recognized in the fiscal year in which all eligibility requirements are met. Under the terms of grant agreements, the City may fund certain programs with a combination of cost-reimbursement grants, categorical block grants, and general revenues. Thus, both restricted and unrestricted net assets may be available to finance program expenditures/expenses. The City's policy is to first apply restricted grant resources to such programs, followed by general revenues, if necessary.
E. Property Taxes
California Constitution Article XIII A limits the combined property tax rate to one percent of a property's assessed valuation. Additional taxes may be imposed with voters' approval. Assessed value is calculated at one hundred percent of a property's fair value, as defined by Article XIII A, and may be increased by no more than two percent per year, unless a change in ownership or new construction occurs. The State legislature has determined the method of distributing the one percent tax levy among the various taxing jurisdictions.
Property tax revenues are recognized in the fiscal year for which taxes have been levied and collected within sixty days of fiscal year end. Property taxes are billed and collected as follows:
Secured Unsecured
Valuation/Lien Dates January 1 January 1
Levy Dates July 1 July 1
Due Dates November 1 (50%) August 1
February 1 (50%)
Delinquency Dates December 10 (Nov.) August 31
April 10 (Feb.)
40
CITY OF BUELLTON
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2023
NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) F. Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenditures or expenses as appropriate. Actual results could differ from those estimates.
G. Cash, Cash Equivalents, and Investments
The City pools its available cash for investment purposes. The City's cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturity of three months or less from the date of acquisition. Cash and cash equivalents are combined with investments and displayed as Cash and Investments. For purposes of the statement of cash flows of the proprietary fu nd types, cash and cash equivalents include all investments, as the City operates an internal cash management pool which maintains the general characteristics of a demand deposit account.
Disclosure requirements for Deposits and Investment Risks were made in the following areas:
• Interest Rate Risk
• Credit Risk
-Overall
- Custodial Credit Risk
- Concentrations of Credit Risk
In addition, other disclosures are specified including use of certain methods to present deposits and investments, highly sensitive investments, credit quality at year-end, and other disclosures.
Highly liquid market investments with maturities of one year or less at time of purchase are stated at amortized cost. All other investments are stated at fair value. Market value is used as fair value for those securities for which market quotations are readily available.
The City participates in the Local Agency Investment Fund (LAIF), an investment pool managed by the State of California. LAIF has invested a portion of the pooled funds in Structured Notes and Asset- Backed Securities.
LAIF's investments are subject to credit risk with the full faith and credit of the State of California collateralizing these investments. In addition, these Structured Notes and Asset-Backed Securities are subject to market risk as a result of changes in interest rates.
H. Inventories and Prepaid Items
Inventories for both governmental and proprietary funds, consisting principally of materials and supplies held for consumption, are valued at cost, approximating market value, using the first-in, first-out (FIFO) method.
The costs of governmental fund inventories are recorded as expenditures when consumed, ratherthan when purchased. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government-wide and fund financial statements. The cost of prepaid items is recorded as expenditures/expenses when consumed rather than when purchased. The inventories and prepaid items recorded in the governmental funds do not reflect current appropriable resources and, thus, an equivalent portion of the fund balance is reported as nonspendable.
I. Lease Receivable
The City's lease receivable is measured at the present value of lease payments expected to be received during the lease term. Under the lease agreement, the City may receive variable lease payments that are dependent upon the lessee's revenue. The variable payments are recorded as an inflow of resources in the period the payment is received. A deferred inflow of resources is recorded forthe lease. The deferred inflow of resources is recorded at the initiation of the lease in an amount equal to the initial recording ofthe lease receivable. The deferred inflow of resources is amortized on a straight-line basis over the term of the lease. 41
CITY OF BUELLTON
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2023
NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
1. Capital Assets
Capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available.
Donated capital assets, donated works of art and similar items, and capital assets received in a service concession arrangement are valued at their acquisition value. City policy is to capitalize all capital assets with costs exceeding a minimum threshold of $5,000 and with useful lives exceeding one year. Depreciation is recorded on a straight-line basis over estimated useful lives of the assets as follows:
Structures and Improvements
Machinery and Equipment
I nfrastru ctu re
50 years
3-15 years
15-100 years
The City defines infrastructure as the basic physical assets that allow the City to function. The assets include streets, wastewater, park lands, and buildings. Each major infrastructure system can be divided into subsystems. For example, the street system can be subdivided into pavement, curb and gutters, sidewalks, medians, streetlights, landscaping, and land.
These subsystems were not delineated in the basic financial statements. The appropriate operating department maintains information regarding the subsystems.
Interest accrued during capital assets construction, if any, is capitalized for the business-type and proprietary funds as part of the asset cost. For all infrastructure systems, the City elected to use the Basic Approach defined by GASB Statement No. 34, which requires all infrastructure be reported at historical cost and be depreciated over their estimated useful lives.
K. Right to Use Assets
The City has recorded right to use lease assets as a result of implementing GASB Statement No. 87. The right to use is initially measured at an amount equal to the initial measurement ofthe related lease liability plus any lease payments made prior to the lease term less lease incentives plus ancillary charges necessary to place the lease into service. The right to use assets are amortized on a straight-line basis over the life of the related lease.
L. Long-term Liabilities
Government-Wide Financial Statements
Long-term debt and other financial obligations are reported as liabilities in the appropriate activities. Bond premiums and discounts are amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable premium or discount. Issuance costs are reported as deferred outflows if they constitute bond insurance.
Fund Financial Statements
The Governmental Fund Financial Statements do not present long-term liabilities. Consequently, long-term liabilities are shown as a reconciling item in the Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position. Governmental funds recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financial sources. Premiums received on debt issuance are reported as other financing sources while discounts on debt issuance are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, a re reported as debt service expenditures. Proprietary Fund Financial Statements use the same principles as those used in the Government-Wide Financial Statements. 42