CITY OF BUELLTON
CITY COUNCIL AGENDA
Regular Meeting of March 13, 2025 – 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.
CALL TO ORDER
Mayor David Silva
PLEDGE OF ALLEGIANCE
ROLL CALL
Council Members Hudson Hornick and John Sanchez, Vice Mayor Elysia Lewis and Mayor David Silva
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.
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 Any Council Member, the City Attorney, or the City Manager may request that an item be withdrawn from the Consent Agenda to allow for full discussion.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 27, 2025 Regular City Council Meeting
City Council Meeting Agenda Page 2 March 13, 2025
2. List of Claims to be Approved and Ratified for Payment to Date for Fiscal Year 2024/2025
3. Resolution No. 25-07 - “A Resolution of the City Council of the City of Buellton, California, Regarding Parking Restrictions for Transit Stop at New Library” (Staff Contact: Public Works Director Rose Hess)
4. Monthly Treasurer’s Report - January 31, 2025
(Staff Contact: Finance Director Shannel Zamora)
5. Financial Report for the Second Quarter Ending December 31, 2024 (Staff Contact: Finance Director Shannel Zamora)
6. Approve Extension of Wine Country Express Memorandum of Understanding (Staff Contact: Public Works Director Rose Hess)
7. Resolution No. 25-08 – “A Resolution of the City Council of the City of Buellton, California, Requesting the Board of Supervisors of the County of Santa Barbara Approve an All Mail-In Ballot Special Election to be Held on Tuesday, August 26, 2025 and Conducted by the Santa Barbara County Elections Office” (Staff Contact: City Clerk Linda Reid)
PRESENTATIONS
8. Presentation to Mark Valencia for his Service to the City of Buellton
PUBLIC HEARINGS
COUNCIL MEMBER COMMENTS/ITEMS
This Agenda listing allows Council Members to provide comments regarding recent events, contributions made or received, and future requests from City Council Members to staff.
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)
9. Review of Annual Comprehensive Financial Report (ACFR) for Fiscal Year Ended June 30, 2024
(Staff Contact: Finance Director Shannel Zamora)
City Council Meeting Agenda Page 3 March 13, 2025
10. Consider Appointment of an Ad Hoc Committee and Investigating Possible Avenues of Partnership with the Santa Ynez Valley Children’s Museum (Staff Contact: Public Works Director Rose Hess)
11. Authorization of Contract Amendment with KOA for the Caltrans Traffic Study (Staff Contact: Public Works Director Rose Hess)
CITY MANAGER’S REPORT
ADJOURNMENT
The next regular meeting of the City Council will be held on Thursday, March 27, 2025 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 27, 2025
City Council Chambers, 140 West Highway 246
Buellton, California
CALL TO ORDER
Mayor Silva called the meeting to order at 6:00 p.m.
PLEDGE OF ALLEGIANCE
ROLL CALL
Present: Council Members Hudson Hornick, Council Member John Sanchez, Vice Mayor Elysia Lewis, and Mayor David Silva
Staff: City Manager Scott Wolfe, Assistant City Attorney Stephanie Gutierrez, Public Works Director Rose Hess, Finance Director Shannel Zamora, Planning Director Andrea Keefer, Associate Planner Cara Miralles, and City Clerk Linda Reid
REORDERING OF AGENDA
None
PUBLIC COMMENTS
Michael Baker, Chief Executive Officer for United Boys and Girls Clubs of Santa Barbara County discussed the success of teen membership at the United Boys and Girls Clubs.
Monique Fairgood, Lompoc, discussed her valued involvement with the United Boys and Girls Club.
Len Fleckenstein, Buellton, thanked the City Council for approving a letter from the City of Buellton to the Santa Barbara County Board of Supervisors regarding the safety issues involved with the oil pipeline that runs through the City of Buellton.
Shoshanah Schwartz, Buellton, thanked the City Council and staff for the new Library. Ms.
Schwartz requested the City create an access path from Ranch Club Mobile Estates to the new Library and also requested that public transportation buses include the Library as a stop.
City Council Meeting Minutes Page 2 February 27, 2025
Lee Danielson, representing Sable Offshore Corporation, introduced himself and requested to meet with Council Members individually and invited residents to attend a town hall meeting to discuss Sable Corporation’s interest in safety measures.
CONSENT CALENDAR
1. Minutes of February 13, 2025 Regular City Council Meeting
2. List of Claims to be Approved and Ratified for Payment to Date for Fiscal Year 2024/2025
MOTION:
Motion by Vice Mayor Lewis, seconded by Council Member Sanchez, approving Consent Calendar Items 1 and 2 as listed.
VOTE:
Motion passed by a roll call vote of 4-0.
Council Member Hornick – Yes
Council Member Sanchez – Yes
Vice Mayor Lewis – Yes
Mayor Silva – Yes
PRESENTATIONS
None
PUBLIC HEARINGS
3. Resolution No. 25-06 - “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 2025/2026 - 2029/2030”
RECOMMENDATION:
That the City Council consider adoption of Resolution No. 25-06.
STAFF REPORT:
Public Works Director Hess presented the staff report.
SPEAKERS/DISCUSSION:
The City Council discussed how Measure A funding could be used going forward.
Mayor Silva opened the public hearing at 6:22 p.m. There being no public comment, Mayor Silva closed the Public Hearing at 6:23 p.m.
DOCUMENTS:
Staff report with attachments as listed in the staff report.
City Council Meeting Minutes Page 3 February 27, 2025
MOTION:
Motion by Vice Mayor Lewis, seconded by Mayor Silva approving Resolution No. 25-06 – “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 2025/2026 – 2029/2030” VOTE:
Motion passed by a roll call vote of 4-0.
Council Member Hornick – Yes
Council Member Sanchez – Yes
Vice Mayor Lewis - Yes
Mayor Silva – Yes
COUNCIL MEMBER COMMENTS/ITEMS
Council Member Hornick requested and the Council agreed by consensus to have staff agendize discussion regarding traffic calming measures throughout the City.
Council Member Hornick requested that staff look into adding a fence near the bike track at River View Park. City Manager Wolfe stated that staff will look into this issue and report back to the City Council.
Mayor Silva questioned the construction timeline for the McMurray Road project. Public Works Director Hess stated that construction is estimated to be complete within eight months.
Mayor Silva requested and the Council agreed by consensus to discuss how to schedule and conduct Town Hall meetings. The next Town Hall meeting is scheduled for March 4 in District 4 and Mayor Silva and Council Member Sanchez will attend the meeting.
WRITTEN COMMUNICATIONS
None
COMMITTEE REPORTS
Council Member Sanchez announced that he attended the Central Coast Water Authority (CCWA) board 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.
Mayor Silva announced that he attended the Central Coast Community Energy (3CE) board meeting and provided an oral report for the record.
Mayor Silva announced that he attended two Santa Barbara County Association of Governments (SBCAG) meetings and provided oral reports for the record.
City Council Meeting Minutes Page 4 February 27, 2025
BUSINESS ITEMS
4. Review and Discussion of Agreement to Provide Law Enforcement Services between the Santa Barbara County Sheriff’s Office and the City of Buellton RECOMMENDATION:
That the City Council receive staff’s report and discuss this item as deemed appropriate.
STAFF REPORT:
City Manager Wolfe presented the staff report.
DOCUMENTS:
Staff report with attachments as listed in the staff report.
DIRECTION:
The City Council agreed by consensus to agendize a presentation regarding the installation of flock safety cameras throughout the City.
5. Avenue of Flags Median 3 Revised Conceptual Plans
RECOMMENDATION:
That the City Council receive a presentation regarding Median 3, provide comments on the revised Median 3 Conceptual Plan, and provide direction to staff to begin preparation of construction drawings.
STAFF REPORT:
Associate Planner Miralles presented the staff report.
SPEAKERS/DISCUSSION:
Ed St. George questioned why the Median 3 conceptual plan is being discussed at this time and requested the Council pause the development of Median 3 to allow time for the approved projects to be built on the Avenue of Flags, so the development projects and Median 3 complement each other.
The City Council discussed how best to move forward with construction of Median 3.
DOCUMENTS:
Staff report with attachments as listed in the staff report.
DIRECTION:
The City Council agreed by consensus to place the flags to the north behind the town plaza and move forward with bulb-outs. The architectural style will be discussed in the future.
CITY MANAGER’S REPORT
City Manager Wolfe provided an informational report for the record.
City Council Meeting Minutes Page 5 February 27, 2025
CLOSED SESSION ITEMS
6. Closed Session Pursuant to Government Code Section 54957 Labor Negotiations Agency Negotiator: Scott Wolfe, City Manager
Employee Organization: Unrepresented Employees
7. Closed Session Pursuant to Government Code Section 54956.8 Conference with Real Property Negotiator
Property: 202 Dairyland Road, Buellton, CA (APN: 099-66-032, -033, -034) Agency Negotiator: Scott Wolfe, City Manager
Negotiating Party: Horatio Partners, LLC
Under Negotiation: Price and Terms of Payment
The City Council met in closed session to discuss Items 6 and 7. No reportable action was taken.
ADJOURNMENT
Mayor Silva adjourned the regular meeting at 9:36 p.m. The next regular meeting of the City Council will be held on Thursday, March 13, 2025 at 6:00 p.m. ____________________________
David Silva
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 13, 2025
Subject: List of Claims to be Approved and Ratified for Payment to Date for Fiscal Year 2024/2025
______________________________________________________________________________
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 02/15/2025 through 02/28/2025 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 02/15/2025 through 02/28/2025 was $1,604,113.26.
FISCAL IMPACT
Payments made to the various vendors were consistent with the approved City’s Budget for 02/15/2025 through 02/28/2025. 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 02/15/2025 through 02/28/2025.
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: Rose Hess, Director of Public Works
Meeting Date: March 13, 2025
Subject: Resolution No. 25-07 – “A Resolution of the City Council of the City of Buellton, California, Regarding Parking Restrictions for Transit Stop at New Library”
______________________________________________________________________________
BACKGROUND
With the construction of the new Library at 202 Dairyland an additional Santa Ynez Valley Transit (SYVT) stop has been planned. The original proposal was to create a drop-off/pickup on-site. However, the bus size is too large to use the existing access driveway on-site.
Staff has been working with Santa Ynez Valley Transit to identify appropriate fixed transit stop location immediately adjacent to the new library.
The ideal location to accommodate the SYVT buses is located on at the west side of the library at the intersection of Meadow View Drive and Valley Dairy Road. Approximately 60’ of red curb is proposed to be painted per attached Exhibit A of Resolution No. 25-07.
RECOMMENDATION
Staff recommends that the City Council consider adoption of Resolution No. 25-07– “A Resolution of the City Council of the City of Buellton, California, Regarding Parking Restrictions for Transit Stop at New Library”
ATTACHMENTS
Resolution No. 25-07 (Exhibit A)
RESOLUTION NO. 25-07
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF BUELLTON, CALIFORNIA, REGARDING PARKING
RESTRICTIONS FOR TRANSIT STOP AT NEW LIBRARY
WHEREAS, certain portions of the Santa Barbara County Code, including Chapter 23:
Motor Vehicles and Traffic, have been adopted as part of the Buellton Municipal Code Section
10.01.010; and
WHEREAS, California Vehicle Code Section 22507 and Section 23-11.1 of the Santa Barbara County Code authorizes the City Council, by Resolution, to designate limited, no parking, loading, and bus zones; and
WHEREAS, Section 23-11.1(a) of the Santa Barbara County Code designates that a red curb shall mean no stopping, standing or parking at any time except as permitted by the California Vehicle Code except that a bus may stop in a red zone marked or signed as a bus zone; and WHEREAS, the City has received request from Santa Ynez Valley Transit to apply parking restrictions to the east side of Meadow View Drive and Valley Dairy Road; and WHEREAS, the City Council finds that it is in the best interests of the community to restrict parking, with appropriate red curb markings, to provide safe zones for a fixed route transit stop.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Buellton does hereby resolve, determine, and order as follows:
SECTION 1. The City Council hereby finds that the above recitations are true and correct and, accordingly, are incorporated as a material part of this Resolution.
SECTION 2. The City Council hereby restricts parking for 60 feet on east side of Meadow View Drive and Valley Dairy Road (red curb), as shown on Exhibit “A” attached hereto and incorporated by this reference.
SECTION 3. The City Council hereby approves and directs to the installation (and subsequent maintenance) of red curb markings at the location as shown on Exhibit “A.” SECTION 4. The City Clerk shall certify to the adoption of this Resolution.
Resolution No. 25-07 Page 2 March 13, 2025
PASSED, APPROVED and ADOPTED this 13th day of March 2025.
_________________________________
David Sliva
Mayor
ATTEST:
__________________________________
Linda Reid
City Clerk
Install ~60’ of Red Curb
EXHIBIT A
Signed SYVT Fixed Transit Stop
UnmarkedDAR Stopp
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 13, 2025
Subject: Monthly Treasurer’s Report – January 31, 2025
______________________________________________________________________________
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 13, 2025, Council adopted the current Investment Policy per Resolution 24-18, 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, 2025. 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, 2025.
ATTACHMENTS
Attachment 1 – Monthly Treasurer’s Report – January 31, 2025
[Type text]
A
City of Buellton
Monthly Treasurer’s Report
For the month ending in January 31, 2025
March 13, 2025
This report presents the City’s cash activity and investment portfolio as of January 31, 2025. The report includes:
1) Cash and investments at January 31, 2025 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, 2025
The following schedule is a summary of the City’s cash and investments based on recorded value as of January 31, 2025 compared with the prior month.
December 31, 2024 January 31, 2025 $ Change
Cash - Pooled $ 6,319,658.87 $ 7,065,331.30 $ 745,672.43 Investments held by the City 18,055,672.69 18,188,035.62 $ 132,362.93 TOTAL CASH AND INVESTMENTS 24,375,331.56 $ $ 25,253,366.92 $ 878,035.36 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 revenue received from property taxes and November 2025 sales tax. The value of investments also changed due to interest earnings on money market fund, Local Agency Investment Fund (LAIF) and Certificate of Deposits (CDs). 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
A s o f J a n u a r y 3 1 , 2 0 2 5
P a g e | 2
The following schedule is a reconciliation of Cash and Investments to City ledger:
15,602,392.68
3,051,292.59
(1,802,170.22)
8,167,809.96
(2,612,995.10)
10,491.39
46,614.72
815,246.77
436,766.69
31,378.73
921,659.74
(22,008.96)
625,465.16
-
-
(18,577.23)
-
25,253,366.92
7,052,749.86
5,674,661.55
12,581.44
3,039,164.14
9,474,209.93
25,253,366.92
999-21000 Wages Payable - -
25,253,366.92
25,253,366.92
25,253,366.92
Per Statements: 1/31/2025
Mechanics General Checking 7,114,021.77
Mechanics Money Market 5,674,661.55
Mechanics FSA 12,581.44
Local Agengcy Investment Fund (LAIF) 9,474,209.93
Multi-Bank Securities Bank 3,039,164.14
Total Cash Per Statement: 25,314,638.83
Claim on Cash vs Total (61,271.91)
Outstanding Items: (61,271.91)
Difference: 0.00
Bank Reconciliation - January 2025
City of Buellton, CA
For the Period Ending 1/31/2025
1/1/2025
BALANCE
CURRENT
ACTIVITY
1/31/2025
BALANCE ACCOUNT # ACCOUNT NAME
006-10000 Claim on Pooled Cash (1,802,170.22) -
020-10000 Claim On Pooled Cash 8,057,403.86 110,406.10
CLAIM ON CASH
001-10000 Claim On Pooled Cash 14,872,205.41 730,187.27 005-10000 Claim On Pooled Cash 3,057,466.46 (6,173.87)
024-10000 Claim On Pooled Cash 46,367.87 246.85
025-10000 Claim On Pooled Cash 787,490.91 27,755.86
021-10000 Claim on Pooled Cash (2,612,995.10) -
023-10000 Claim On Pooled Cash 10,435.83 55.56
031-10000 Claim On Pooled Cash 881,108.86 40,550.88
032-10001 Claim On Pooled Cash (22,008.96) -
027-10000 Claim On Pooled Cash 435,252.28 1,514.41
029-10000 Claim On Pooled Cash 31,212.56 166.17
091-10000 Claim On Pooled Cash - -
092-10000 Claim On Pooled Cash (2,130.61) (16,446.62)
075-10000 Claim On Pooled Cash 635,692.41 (10,227.25)
090-10000 Claim On Pooled Cash - -
TOTAL CLAIM ON CASH 24,375,331.56 878,035.36
CASH IN BANK
Cash in Bank
999-10001 Pooled Cash - General Checking 6,307,057.64 745,692.22 999-10004 Pooled Cash - Brokerage 3,037,279.77 1,884.37 999-10005 Pooled Cash - LAIF 9,365,289.06 108,920.87
999-10002 Pooled Cash - Money Market 5,653,103.86 21,557.69 999-10003 Pooled Cash - FSA 12,601.23 (19.79)
DUE TO OTHER FUNDS
999-27000 Due To Other Funds 24,375,331.56 878,035.36
TOTAL DUE TO OTHER FUNDS 24,375,331.56 878,035.36
TOTAL: Cash in Bank 24,375,331.56 878,035.36
-
TOTAL: Cash in Bank 24,375,331.56 878,035.36
M o n t h l y T r e a s u r e r ’ s R e p o r t
A s o f J a n u a r y 3 1 , 2 0 2 5
P a g e | 3
City of Buellton
Investment Summary
January 31, 2025
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
(months) Maturity Date Par Value Market Value
Local Agency Investment Fund - LAIF 53.60% 4.62% n/a n/a $ 9,474,209.93 $ 9,474,209.93 State Bk India 1.13% 1.60% 60 4/29/2025 200,000.00 198,664.00 Security Identifier: 856285TF8
Sallie Mae Bank 0.68% 0.80% 60 7/1/2025 120,000.00 118,270.80 Security Identifier: 7954506Q3
Spokane Teachers Credit Union 1.02% 0.80% 60 4/15/2027 180,000.00 181,733.40 Security Identifier: 849061AG1
Third Fed Savings 1.39% 3.50% 60 6/28/2027 245,000.00 240,658.60 Security Identifier: 88413QDL9
Morgan Stanley Bank 0.59% 3.75% 60 6/28/2027 104,000.00 102,743.68 Security Identifier: 61773TFC2
Capital One Bank 1.38% 3.75% 60 9/30/2027 244,000.00 244,241.56 Security Identifier: 14042RURO
Hickam Federal Credit Union 0.57% 3.75% 48 1/31/2028 100,000.00 99,914.00 Security Identifier: 42869GAB2
Global Federal Credit Union 1.41% 4.60% 60 4/17/2028 249,000.00 251,726.55 Security Identifier: 37892MAC8
Optum Bk Draper Utah CTF Dep 0.91% 4.45% 60 12/22/2028 160,000.00 161,104.00 Security Identifier: 68405VBV0
First Foundation Bank 0.57% 4.60% 60 5/10/2029 100,000.00 101,336.00 Security Identifier: 68405VBV0
Leaders Credit Union 0.57% 4.00% 60 8/30/2029 100,000.00 98,970.00 Security Identifier: 52171MAN5
United States Treasury Bill 6.22% 4.18% 6 5/24/2025 1,100,000.00 1,085,293.00 Security Identifier: 912797NN3
United States Treasury Bill 0.57% 4.38% 60 12/31/2029 100,000.00 100,031.00 Security Identifier: 91282CMD0
Multi-Securities Bank - Cash in Holding 54,477.55
Money Market (Held with Mechanics Bank) 29.42% 4.58% n/a 5,200,000.00 5,674,661.55 Total City Investments 100.00% $ 17,676,209.93 $ 18,188,035.62 Average Yield:3.56% Average Maturity (months): 54.92
Certificates of Deposits (Held with Multi-Securities Bank) U.S. Treasury Securities (Held with Multi-Securities Bank)
M o n t h l y T r e a s u r e r ’ s R e p o r t
A s o f J a n u a r y 3 1 , 2 0 2 5
P a g e | 4
The following is a fund balance schedule showing beginning fund balance at July 1, 2024 plus revenues minus expenditures for the period, resulting in ending fund balance at January 31, 2025.
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, 2025
Balance
6,527,016.33 7,639,138.98 14,292,016.61
758,767.15 1,026,285.64 2,382,310.94
006 - Wastewater Capital 268,300.40 14,405.06 658,021.72 020 - Water Fund 1,756,281.58 1,812,968.84 9,711,145.75 021 - Water Capital 223,293.00 126,862.96 324,725.50
257.89 1,300.00 10,475.36
8,577.68 - 46,561.85
176,472.25 99,604.90 815,727.27
027 - Local Transportation Fund 10,002.07 11,666.62 436,256.44 029 - Transportation Planning 463.92 14,519.98 (116,452.81) 031 - Measure A 239,193.09 46,244.44 999,307.03
032 - American Relief Act Fund 268,035.48 324,115.11 (22,624.20) 075 - Trust & Agency Fund 8,841.01 - 33,838.07
090 - Long-Term Debt - - (3,479,492.98)
091 - General Fixed Assets - - 27,711,206.52
2,479,540.83
13,604,018.58 53,795,657.85
27,711,206.52
092 - Capital Improvement Proj Fund - 2,486,906.05 (7,365.22) 54,674,633.75 12,725,042.68
437,920.99
(102,396.75)
806,358.38
33,455.43
24,997.06
(3,479,492.98)
025 - Gas Tax Fund 738,859.92
001 - General Fund 15,404,139.26
005 - Sewer Fund 2,649,829.43
404,126.38
9,767,833.01
228,295.46
023 - Housing Fees 11,517.47
024 - Traffic Mitigation Fund 37,984.17
Fund Balance Report
City of Buellton, CA 1/31/2025
Fund July 1, 2024
Balance
Total Revenues
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: Shannel Zamora, Finance Director
Meeting Date: March 13, 2025
Subject: Financial Report for the Second Quarter Ending December 31, 2024 ______________________________________________________________________________
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 Fiscal Year 2024-25 and summarizes the quarter ended December 31, 2024 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, 2024.
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 ending December 31, 2024 Attachment 2 - Quarterly Capital Improvement Project Report for the period ending December 31, 2024
Quarterly Financial Report – FY 2024-25 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2024 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 2024-25 and covers the period July 1,
2024 through December 31, 2024. 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
By the end of 2024, the U.S. economy
experienced moderate growth accompanied by
rising inflation and specific regional employment
challenges. The housing market's deceleration
and a growing trade deficit further underscore
the complex economic landscape, warranting
close monitoring of these indicators in the
coming year.
According to the Bureau of Economic Analysis
(BEA), the real domestic product (GDP) grew at
an annual rate of 2.3% in the fourth quarter of
2024, slowing from the previous quarter’s 3.1%
growth, bringing the full-year expansion to 2.8%.
This deceleration was driven by declines in
business investments and inventories, despite
resilient consumer spending.
According to the Bureau of Labor Statistics (BLS),
the Consumer Price Index (CPI) reached 2.9% on
an annual basis in December 2024.Energy prices
declined at a slower rate compared to previous
months, with gasoline prices dropping by only
3.4% versus an 8.1% decline in November.
Shelter costs continued to rise but at a slower
pace, marking the weakest year-over-year
increase since February 2022. Additionally, food
prices accelerated, increasing by 2.4% compared
to 2.1% in the previous month. These combined
factors contributed to the overall inflationary
pressure at year-end. The Federal Reserve
proceeded with a 25 basis point rate cut,
lowering interest rates to 4.25%–4.50%. The
decision was based on the need to support
economic growth and employment, even as
inflation remained above the 2% target.
The labor market remained steady. According to
the Bureau of Labor Statistics (BLS), the national
unemployment rate stood at 4.0 in December
2024. However, some states, including
Michigan, Illinois, Kentucky, California, and
Nevada, saw higher unemployment rates of 5%
or more. These elevated figures were driven by
industry-specific challenges, such as downturns
in auto manufacturing and coal mining, as well
as layoffs in the tech sector and a decline in
tourism.
The housing market showed signs of cooling in
late 2024, largely due to elevated mortgage
interest rates, which created affordability
challenges for potential buyers. As of December
30, 2024, the average 30-year fixed mortgage
rate ranged between 6.72% and 6.99%,
according to various financial sources. These
high borrowing costs led to reduced home sales
and a slowdown in new housing developments,
CITY OF BUELLTON
Quarterly Financial Report
Second Quarter Ending December 31, 2024
FY 2024-25
Second Quarter
March 13, 2025
Quarterly Financial Report – FY 2024-25 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2024 2 as both buyers and builders faced increased
financial strain. The persistent affordability
issues contributed to a more cautious economic
outlook for 2025, with expectations of
continued softness in the housing sector unless
interest rates decline.
State Economy
While California's economy continued to grow in
2024, challenges such as rising inflation, a
cooling labor market, and housing affordability
issues contributed to a cautious economic
outlook as the state enters 2025. GDP growth
was steady. California’s GDP continued to grow
moderately in 2024. Factors such as a slowergrowing tech sector, a cooling labor market, and headwinds from high interest rates and inflation
contributed to this deceleration.
Inflation in California trended upward in late
2024, though it remained below post-pandemic
highs. According to the BLS, as of December
2024, California’s Consumer Price Index (CPI)
increased by 0.2% from the previous month.
Over the 12-month period, the CPI rose by 3.4%,
primarily by higher shelter costs. Food prices
increased 3.1%. Energy prices declined 5.3%,
largely the result of a decrease in the price of
gasoline. The index for all items less food and
energy increased 4.1% over the year.
According to the Employment Development
Department (EDD), in December 2024,
California’s unemployment rate increased
slightly to 5.5% and added 15,000 nonfarm jobs.
Seven of California’s eleven industry sectors saw
job growth. The Leisure & Hospitality sector had
the highest increase (+7,500) driven by higher
demand in Amusement Parks and Arcades. The
Information sector saw a gain (+ 4,900) due to
Motion Picture and Video Production. Trade,
Transportation, & Utilities (+1,200) saw an
increase as Wholesale Trade, and
Transportation, Warehousing and Utilities
posted above average December gains and
activity in California ports increased. However,
Professional & Business Services experienced
the largest decline, losing -3,000 jobs mainly in
Specialized Design Services and Computer
Systems Design and Related Services.
California's housing market showed mixed
trends in late 2024. The median home price
declined slightly by 0.3% from November to
December, settling at $819,740, but it was still
6.4% higher year-over-year, marking the largest
annual increase since May 2022. Despite rising
prices, affordability remained a significant issue,
with monthly payments for a mid-tier home,
including mortgage, taxes, and insurance,
reaching nearly $5,800, an 84% increase since
January 2020. These affordability challenges,
driven by elevated mortgage rates, contributed
to a slowdown in home sales and new
developments, adding to economic uncertainty
heading into 2025.
City of Buellton Economy
The City’s General Fund ended the Second
Quarter of 2024-25 with about $14.17 Million in
Cash Balance. The City’s General Fund Reserve
Policy states the reserve level must be
maintained at 35 percent of budgeted operating
expenditures. The current budgeted operating
expenditures is about $10.20 million which
makes the target reserve level approximately
$3.57 million. Of the current cash balance, about
$10.60 million is available for current and future
capital improvement projects, or any other use
as stated in the City’s Reserve Policy. Current
revenue through December 31, 2024 is 34.76
percent of budget projections while current
expenditures are at 41.02 percent of budget.
The City is heavily reliant on sales tax and
transient occupancy taxes (TOT) which continue
Quarterly Financial Report – FY 2024-25 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2024 3 to show steady revenue. Buellton’s economy is
likely to remain resilient but face headwinds
from slowing consumer spending and potential
declines in tourism. The city’s sales tax and TOT
revenue may fluctuate depending on tourism
trends, while property tax revenue should
remain steady unless housing values drop
significantly. The key factors to watch will be
mortgage rates, inflation, and tourism demand,
which will influence the city's revenue stability
heading into 2025.
The City has two Enterprise Funds: Water and
Sewer Funds. The goal of these funds is to
finance or recover the 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 $3.02 Million and $1.25 Million in cash.
Wastewater operating revenue ended the
Second Quarter at 53.04 percent while
operating expenses were at 56.14 percent.
The Water and Water Capital Fund ended the
Second Quarter with a combined Fund Balance
of about $10.11 Million and $5.43 Million in
cash. Water Fund Operating revenues ended
the Second Quarter at 60.21 percent while
operating expenses were at 59.18 percent.
Quarterly Financial Report – FY 2024-25 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2024 4
GENERAL FUND
General Fund Balance
Table 1 below shows that with 50 percent of the fiscal year complete, revenues are within projections at 34.76 percent while expenditures are within 41.02 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 $ 15,404,139
Revenues* 11,987,307 16,959,186 $ 5,894,501 34.76%
Expenditures* (10,117,709) (16,959,186) $ (6,957,463) 41.02% Est.Fund Balance at End of Quarter - $ 14,341,178
Change in Fund Balance 1,869,598 - $ (1,062,961)
* 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, 2024 versus the prior year quarter ending December 31, 2023.
Q2 FY 2024-25 Q2 FY 2023-24
Increase
(Decrease) Percent
Revenues:
Taxes $ 5,267,099 $ 5,247,012 $ 20,087 0.38%
Fees and Permits 10,850 11,830 $ -8.28% (980)
Fines and Penalties 9,438 4,124 $ 128.83% 5,313
Charges for Current Services 41,610 54,366 $ (12,756) -23.46% Use of Monies and Properties 387,890 333,236 $ 54,654 16.40% Revenue from Other Agencies 163,718 159,864 $ 2.41% 3,854 Other Revenue* 13,897 9,948 $ 39.69% 3,948
Total Revenue $ 5,894,501 $ 5,820,381 $ 74,120 1.27%
Expenditures:
Employee Services $ 1,248,441 $ 1,157,579 $ 90,863 7.28% Operating and Maintenance $ 3,931,609 $ 3,490,164 $ 441,444 11.23% Transfers for Capital Outlay $ 1,732,853 $ 221,728 $ 1,511,125 87.20% Minor Capital $ 44,560 $ 14,095 30,465 68.37%
Total Expenditures $ 6,957,463 $ 4,883,565 2,073,897 29.81% Change in Fund Balance $ (1,062,961) $ 936,816 (1,999,777) -213.47% Table 2: Previous Year Comparison
Quarterly Financial Report – FY 2024-25 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2024 5 Total revenues through the Second Quarter are $74,120 (1.27%) higher than the previous fiscal year during the same period. The revenue category with the largest dollar increase is “Use of Monies and Properties” with an increase of $54,564. 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). The revenue category with the largest dollar decrease is “Charges for Services” with only a slight decrease of $12,756. The majority of the decrease is due to the limited capacity of the summer camp compared to previous years. The reduced number of participants has resulted in lower-than-expected revenue during this period. Revenue from other categories shows steady increases from the prior year.
Total expenditures are about $2.0 million (29.81%) higher than the previous fiscal year’s period. The increase of $90,868 (7.28%) in Employee Services is due to the 3.94% cost-of-living adjustment received by all the City’s full-time employees effective July 1, 2024 in addition to the 5% merit increase approved for the City Manager effective July 1, 2024. Furthermore, the City also added the newly approved Administrative Assistant position that was filled in March 2024.
The Operating and Maintenance expenditure category increased by $441,444 (7.28%) compared to the same period last year. A portion of this increase, $109,594, was allocated to a higher contribution for the Senior Center's Meals-on-Wheels Program. Additionally, roof replacements at 202 Dairyland (Willemsen House) and 140 West Highway 246 (former library location) totaled approximately $110,000.
Maintenance costs included $30,000 for drainage channel repairs at River View Park and $60,000 for irrigation maintenance at the Willemsen Property. Lastly, the contract for Santa Barbara County Sheriff services rose by nearly $200,000 (7.2%) for the fiscal year, or $50,000 quarterly, contributing significantly to the overall expenditure increase.
Capital improvement projects (CIP) expenditures currently in progress through December 31, 2024 total $1,732,853 ($1.5 million, or 87.20%, more than last year) and are as follows:
Project #092-207 Santa Ynez River Trail - $30,000
Project #092-220 Willemsen Parking Lot - $50,763
Project #092-221 Willemsen House Renovation - $1,469,219 Project #092-223 140 Highway 246 SYVCO TI - $86,868
Project #092-307 McMurray Road Widening/TS - $39,789
Project #092-309 West Highway 246 Safety Improvements - $27,023 Project #092-322 FY 2023-24 Road Maintenance Project - $29,191 The minor capital expenditure category compared to last year increased by $30,465 (68.37%) due to the purchase of a traffic speed trailer.
Quarterly Financial Report – FY 2024-25 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2024 6 Top Five General Fund Revenues
Top Five Revenues
Original
Budget
Current
Budget YTD Actual Percent
Sales Tax $ 3,540,543 $ 3,610,776 $ 1,806,774 50.04%
Transient Occupancy Tax 3,800,000 $ 3,800,000 2,175,265 57.24% Property Tax 1,978,500 $ 1,977,017 1,138,789 57.60%
MVLF Swap 630,873 $ 638,733 0.00% -
Franchise Fees 434,500 $ 415,038 35.24% 146,271
Other Revenues* 597,891 $ 988,387 63.48% 627,402
Total Revenues $ 10,982,307 $ 11,429,951 $ 5,894,501 51.57% Use of Reserves 1,005,000 5,529,235 0.00% -
Total Funding Sources $ 11,987,307 $ 16,959,186 $ 5,894,501 34.76% Table 3
Sales Tax
At the end of the Second Quarter, the City received 50.04 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 2024. Sales tax revenue fluctuates each month in conjunction with seasonal flows. Sales tax is expected to be within budget by the end of the fiscal year.
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 has received
57.24 percent of anticipated revenues through December 2024 TOT receipts.
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 57.60 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 4.88 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 89% of total General Fund Revenues.
Quarterly Financial Report – FY 2024-25 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2024 7 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 received 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 35.24 percent of revenue projections.
General Fund Expenditures
Table 4 summarizes operating costs by department. As of December 31, 2024, or 50 percent of the year expended, the General Fund ended the Second Quarter at 41.02 percent expended (including CIP).
Actual General Fund expenditures were approximately $6.96 Million. Most Budget Units ended the Second Quarter within budget with the exception of the City Council, Non-Departmental, Library, Public Works- Landscape and Public Works - General.
Department Expenditures
Adopted
Budget
Current
Budget YTD Actual % Expended
401-City Council 179,421 196,176 118,645 60.48%
402-City Manager 350,556 376,653 179,759 47.73%
403-City Clerk/Human Resources 211,478 243,283 108,918 44.77% 404-City Attorney 206,000 206,000 81,550 39.59%
410-Non-Departmental 1,354,269 1,501,199 980,743 65.33% 420-Finance 249,645 298,033 140,725 47.22%
501-Police and Fire 2,860,557 3,199,100 1,605,053 50.17% 510-Library 207,266 205,064 202,059 98.53%
511-Recreation 762,225 800,111 366,162 45.76%
550-Street Lights 50,000 73,500 27,027 36.77%
551-Storm Water 240,700 385,700 93,565 24.26%
552-Public Works - Parks 580,700 584,000 269,623 46.17% 556-Public Works - Landscape 187,300 187,950 143,686 76.45% 558-Public Works - General 895,996 972,670 585,028 60.15% 565-Planning (Comm Dev) 776,599 976,415 322,066 32.98%
Transfer to CIP Fund 92 1,005,000 6,753,331 1,732,853 25.66% Total All Departments 10,117,712 16,959,185 6,957,463 41.02% Table 4: General Fund Expenditures by Department
Quarterly Financial Report – FY 2024-25 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2024 8 The City Council Department experienced a budget overage due to expenditures related to the November Election. This overage was primarily driven by the costs associated with two measures that were on the ballot, as well as the election of two city council members and the Mayor at large.
Additionally, new television and video equipment was acquired to enhance the broadcast of meetings.
The Non-Departmental budgetary unit includes one-time annual payments during the first two quarters of the fiscal year. Those annual payments include: Property and liability insurance, Worker’s Compensation Insurance, CalPERS Unfunded Accrued Liability (UAL), support for community organizations and support for the Buellton Senior Center. Other significant expenditures in NonDepartmental include monthly payment for contract services with the Buellton Visitors Bureau. The NonDepartmental 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 Public Works-Landscape is mostly due to the irrigation maintenance at 202 Dairyland Road (Willemsen House). The overage in Public Works- General is due to the replacement of the roof at the Willemsen House and at 140 Highway 246 (former library location).
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, several of the budget categories by type exceeds budget projections.
Expenditures By Type
Original
Budget
Current
Budget YTD Actual
% of Total
Expenditures % Expended
Staffing 2,493,157 2,624,024 1,247,091 17.9% 47.53%
Contract Services 4,673,563 5,118,384 2,634,551 37.9% 51.47% Telecomm and Utilities 364,929 417,232 232,046 3.3% 55.62% Supplies and Materials 28,771 31,525 18,794 0.3% 59.62% Repair and Maintenance 348,485 407,485 226,056 3.2% 55.48% Transfer to Other Funds 1,035,535 6,781,797 1,732,853 24.9% 25.55% Other Operating Costs 1,114,976 1,502,042 825,050 11.9% 54.93% Minor Capital 58,296 76,696 41,021 0.6% 53.48%
Total by Type 10,117,712 16,959,186 6,957,463 100.0% 41.02% Table 5: Expenditure Categories
Quarterly Financial Report – FY 2024-25 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2024 9 Figure 1
The top three spending categories are: Contract Services, Staffing, and Transfer to Other Funds. Contract Services include services for Police, Fire Department, Legal Services, Engineering, Landscaping Services, Visitor’s Bureau and other services. Contract Services accounts for 37.9 percent of General Fund expenditures. Staffing includes salary and benefits and accounts for 17.9 percent of General Fund expenditures. The Transfers to Other Funds category represents 24.9 percent of expenditures. In this category, expenditures for capital projects are recorded. The City has expended 25.55 percent of the total General Fund capital improvement projects budget.
The overage in the Telecomm and Utilities type category is primarily attributable to the annual software costs, which are typically paid out during the early months of the fiscal year. This has resulted in higherthan-usual expenses at this point in the year. However, these costs should even out by the end of the fiscal year as they represent one-time or scheduled payments that won't recur throughout the remaining months.
The overage in the Supplies and Materials category is primarily due to a few key expenditures that occurred earlier in the fiscal year. Specifically, the agency spent $1,945 on litter pickup bags and also restocked essential office supplies, including $1,230 on envelopes and City letterheads. These purchases, while contributing to the current overage, are necessary one-time or infrequent expenses that typically occur at the beginning of the year. As these costs were anticipated and budgeted for, we expect this overage to even out as the fiscal year progresses, with fewer material purchases required in the coming months.
The overage in the Repairs and Maintenance category is primarily due to repairs at River View Park and the replacement of the roof at the Willemsen House and at 140 Highway 246 (former library location).
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 Staffing, 17.9%
Contract Services,
37.9%
Telecomm and
Utilities, 3.3%
Supplies and
Materials, 0.3%
Repair and
Maintenance, 3.2%
Transfer to Other
Funds, 24.9%
Other Operating
Costs, 11.9%
Minor Capital, 0.6%
Expeditures By Type
Quarterly Financial Report – FY 2024-25 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2024 10 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. Moreover, the overage in the Minor Capital category is due to the purchase of a traffic speed trailer. Expenditures in this category should level out by the end of the fiscal year.
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.
Figure 2
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
FY 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 Q2FY 23-24 Q3FY 23-24 Q4FY 24-25 Q1FY 24-25 Q2 Quarterly Revenue vs. Expenditures
Revenue Expenditures
Quarterly Financial Report – FY 2024-25 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2024 11
ENTERPRISE FUNDS
The Enterprise Fund Balance and Statement of Net Position for the Second Quarter of Fiscal Year 2024- 25 are shown below.
Fund Balance Summary
Enterprise Fund Balance Wastewater
Wastewater
Capital Water Water Capital
Beginning Fund Balance $ 2,649,829 $ 404,126 $ 9,767,833 $ 228,295 Operating Revenue & Transfers 659,050 268,300 1,548,500 223,293 Operating Expenses & Transfers (940,882) (14,405) (1,523,251) (126,863) Profit(Loss) $ (281,832) $ 253,895 $ 25,249 $ 96,430
Ending Fund Balance $ 2,367,997 $ 658,022 $ 9,793,082 $ 324,726 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 3,055,673 (1,805,616) 1,250,057 8,048,731 (2,612,995) 5,435,736 Receivables 162,100 - 162,100 232,289 - 232,289
Inventory - - - 133,377 - 133,377
Prepaid Items - - - 419,093 - 419,093
Total current assets 3,217,773 (1,805,616) 1,412,157 8,833,490 (2,612,995) 6,220,495 Capital assets (net of
accumulated depreciation) 1,152,611 2,463,638 3,616,248 3,831,192 2,937,721 6,768,912 Other assets 400,380 - 400,380 52,945 - 52,945
- -
Total Assets: $ 4,770,764 $ 658,022 $ 5,428,785 $ 12,717,626 $ 324,726 $ 13,042,352 -
LIABILITIES
Current Liabilities 139,744 - 139,744 214,024 - 214,024 Noncurrent Liabilities 2,248,173 - 2,248,173 2,705,668 - 2,705,668 Other Liabilities 14,849 - 14,849 4,853 4,853 - -
Total Liabilities: $ 2,402,766 $ - $ 2,402,766 $ 2,924,545 $ - $ 2,924,545 - -
NET POSITION (Assets - Liabilities) $ 2,367,997 658,022$ $ 3,026,019 $ 9,793,082 $ 324,726 $ 10,117,807 Net Position Breakdown
Net Investment in Capital Assets (59,561) 2,463,638 2,404,076 1,915,178 2,701,285 4,616,462 Unrestricted 2,427,559 (1,805,616) 621,943 7,877,904 (2,376,559) 5,501,345 Total Net Position $ 2,367,997 $ 658,022 $ 3,026,019 $ 9,793,082 $ 324,726 $ 10,117,807 Table 7
Quarterly Financial Report – FY 2024-25 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2024 12 Wastewater and Wastewater Capital Funds
Wastewater and
Wastewater Capital Funds Wastewater
Wastewater
Capital Wastewater Total
Operating Revenues
Charge for Services 636,133 - 636,133
Interest Income 19,426 - 19,426
Connection Fees - 268,300 268,300
Other Revenues 3,492 - 3,492
Total Operating Revenue 659,050 268,300 927,350
Operating Expenses
Employee Services 279,389 - 279,389
Operating & Maintenance 607,730 - 607,730
Depreciation* 143,050 7,500 150,550
Minor Capital 47,163 - 47,163
Total Operating Expenses 1,077,332 7,500 1,037,669
Operating Profit(Loss) (418,282) 260,800 (157,482)
Transfers In (Out)
Transfers from Reserves - - -
Transfers In - CIP - - -
Transfers Out - CIP** (6,600) (14,405) (21,005)
Total Revenue 659,050 268,300 927,350
Total Expenditures 1,083,932 21,905 1,105,837
Net Profit (Loss) (424,882) 246,395 (178,487)
*Depreciation is estimated.
** For information purposes only, capitalized at the end of the fiscal year.
Table 8
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 $1.25 Million in cash combined (Table 7) and combined Fund Balance of approximately $3.02 Million.
Table 9 illustrates the Wastewater Fund budget to actuals. Wastewater Fund operating expenditures have exceeded operating revenues by $418,282 at the end of the Second Quarter (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
Quarterly Financial Report – FY 2024-25 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2024 13 asset’s useful life. The amount spent on capital projects are capitalized and shown on the Balance Sheet at the end of the fiscal year.
Budget projections for wastewater services slightly exceeded expectations because of increased usage.
Despite no rate adjustments since 2018, higher-than-expected demand led to Charges for Services reaching 52.46 percent of the budget at the fiscal year’s halfway point. Additionally, seasonal factors, such as the July through December period, likely contributed to increased water usage and wastewater generation, further boosting the revenue. Interest revenue exceeds budget projections at 64.75 percent primarily from interest received from the Local Agency Investment Fund (LAIF) through December 31, 2024. Overall total Wastewater operating revenues are at 53.04 percent of budget projections.
Wastewater operating expenditures have reached 56.14 percent of the budget. The overall Water Fund expenses remain within budget, except for the Operating and Maintenance category. The primary cause of this overage is the cleaning and inspection of about 32,000 feet of the existing sewer main line.
Additionally, repairs were necessary for the backwash piping at Hwy 246 Well 9.
The Wastewater Fund utilizes reserves to fund Capital Improvement projects (CIPs). The budgeted transfer out for CIPs for FY 2024-25 is $565,000. Table 10 illustrates the Wastewater Capital budget to actuals. The transfers out for CIP are displayed for informational purposes to illustrate cash flows, and will be capitalized at the end of the fiscal year.
Quarterly Financial Report – FY 2024-25 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2024 14 Wastewater Fund 005 Original
Budget
Current
Budget YTD Actuals Percent of Budget
Operating Revenues
Charge for Services 1,212,650 1,212,650 636,133 52.46%
Interest Income 25,000 30,000 19,426 64.75%
Other Revenues - - 3,492 0.00%
Total Operating Revenue 1,237,650 1,242,650 659,050 53.04% Operating Expenses
Employee Services 561,193 574,772 279,389 48.61%
Operating & Maintenance 895,024 923,008 607,730 65.84%
Depreciation* 286,100 286,100 143,050 50.00%
Minor Capital 78,000 135,000 47,163 34.94%
Total Operating Expenses 1,820,317 1,918,880 1,077,332 56.14% Operating Profit(Loss) (582,667) (676,230) (418,282)
Transfers In (Out)
Transfers In- Reserves for
Operating - - 0 #DIV/0!
Transfers In - Reserves
for CIP 1,147,667 1,241,230 0 0.00%
Transfers Out - CIP** (565,000) (565,000) (6,600) 1.17% Total Revenue 2,385,317 2,483,880 659,050 26.53%
Total Expenditures (2,385,317) (2,483,880) (1,083,932) 43.64% Net Profit (Loss) - - (424,882)
*Depreciation is estimated. Capital Expenditures are capitalized at the end of the fiscal year. ** 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 - - 268,300 0.00%
Interest Income - - - 0.00%
Transfers from Reserves - - - 0.00%
Transfer In from other Funds 315,000 315,000 - 0.00%
Total Revenue 315,000 315,000 268,300 85.17%
Expenses
Depreciation 15,000 15,000 50.00% 7,500
Transfer to CIP Projects 300,000 300,000 14,405 4.80%
Total Expenses 315,000 315,000 21,905 6.95%
Table 10
Quarterly Financial Report – FY 2024-25 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2024 15 Water and Water Capital Funds
Water and Water Capital
Funds Water
Water
Capital Water Total
Operating Revenues
Charge for Services 1,466,089 - 1,466,089
Interest Income 78,879 - 78,879
Connection Fees - 223,293 223,293
Other Revenues 3,532 - 3,532
Total Operating Revenue 1,548,500 223,293 1,771,793
Operating Expenses
Employee Services 189,571 - 189,571
Operating & Maintenance 1,092,276 - 1,092,276
Depreciation* 100,000 37,500 137,500
Minor Capital 47,163 - 47,163
Total Operating Expenses 1,429,010 37,500 1,419,347
Operating Profit(Loss) 119,489 185,793 305,282
Transfers In (Out)
Transfers from Reserves - - -
Transfers In - CIP - - -
Transfers Out - CIP** (194,241) (126,863) (321,103)
Total Revenue 1,548,500 223,293 1,771,793
Total Expenditures 1,623,251 164,363 1,740,451
Net Profit (Loss) (74,751) 58,930 (15,821)
*Depreciation is estiated. 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 11 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 $5.43Million in cash combined (Table 7) and combined Fund Balance of approximately $10.11 Million.
Table 12 illustrates the Water Fund budget to actuals. Water Fund operating revenues have exceeded operating expenditures by $19,415 at the end of the Second Quarter (excludes Capital Improvement
Quarterly Financial Report – FY 2024-25 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2024 16 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.
The amount spent on capital projects are capitalized and shown on the Balance Sheet at the end of the fiscal year.
At 50 percent of the fiscal year, Charges for Services have exceeded budget projections, reaching 59.92 percent. This is attributed to increased usage of services, as there have been no rate adjustments since 2018. Additionally, the July through December period likely saw higher seasonal demand, further contributing to the higher-than-expected revenue. Interest revenue has also exceeded budget projections reaching 63.10 percent, primarily from interest received from the Local Agency Investment Fund (LAIF) through December 31, 2024. Overall total Water operating revenues are at 60.21 percent of budget projections.
Water operating expenditures are at 59.18 percent of the budget. Overall, Water Fund expense categories were within budget, except for the Operating and Maintenance category and Minor Capital category. Operating and maintenance expenditures have reached 65.14 percent of the budget. This significant increase is primarily due to the extensive repairs needed for the Well 7 pump system. The maintenance and replacement of critical components in the pump system have driven costs higher than initially anticipated. These repairs were essential to ensure the continued efficient operation of the water supply infrastructure. Minor capital expenditures have reached 64.61 percent of the budget due to the acquisition of a work truck.
The Water Fund utilizes reserves to fund Capital Improvement projects (CIPs). The budgeted transfer out for CIPs for FY 2024-25 is $674,123. Table 13 illustrates the Water Capital budget to actuals. The transfers out for CIP are displayed for informational purposes to illustrate cash flows, and will be capitalized at the end of the fiscal year.
Quarterly Financial Report – FY 2024-25 Second Quarter
Unaudited Financial Data Second Quarter Ending December 31, 2024 17 Water Fund 020 Original
Budget
Current
Budget YTD Actuals Percent of Budget
Operating Revenues
Charge for Services 2,446,670 2,446,670 1,466,089 59.92% Interest Income 51,000 125,000 78,879 63.10%
Other Revenues - - 3,532 0.00%
Total Operating Revenue 2,497,670 2,571,670 1,548,500 60.21% Operating Expenses
Employee Services 381,012 480,473 189,571 39.46%
Operating & Maintenance 1,771,471 1,830,494 1,192,350 65.14% Depreciation* 200,000 200,000 100,000 50.00%
Minor Capital 18,000 73,000 47,163 64.61%
Total Operating Expenses 2,370,483 2,583,967 1,529,085 59.18% Operating Profit(Loss) 127,187 (12,297) 19,415
Transfers In (Out)
Transfers In- Reserves for
Operating - - - 0%
Transfers In - for CIP 207,813 686,420 - 0%
Transfers Out - CIP** (335,000) (674,123) (94,166) 14%
Total Revenue 2,705,483 3,258,090 1,548,500 48%
Total Expenditures (2,705,483) (3,258,090) (1,623,251) 50% Net Profit (Loss) - - (74,751)
*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 - - 223,293 0%
Interest Income - - - 0%
Transfers from Reserves - - - 0%
Transfer In from Fund 020 285,000 425,000 - 0%
Total Revenue 285,000 425,000 223,293 53%
Expenses
Depreciation 35,000 75,000 37,500 50%
Transfer to CIP Projects 250,000 350,000 126,863 36%
Total Expenses 285,000 425,000 164,363 39%
Table 13
Percent
Used
-712,282.01 5.08%
-5,020,478.09 25.66%
-937,376.72 4.72%
-528,994.94 3.82%
-278,019.52 53.60%
-351,627.89 47.96%
-7,828,779.17 24.08%
40,000.00 0.00%
40,000.00 0.00%
-30,000.00 0.00%
425,000.00 0.00%
395,000.00 7.06%
75,000.00 0.00%
75,000.00 0.00%
700,000.00 0.00%
850,000.00 0.00%
40,000.00 0.00%
40,000.00 0.00%
80,000.00 0.00%
80,000.00 0.00%
29,722.50 60.37%
94,515.00 5.49%
1,200,000.00 0.00%
1,324,237.50 3.69%
092-220-74100 Construction/Improvements 0.00 1,200,000.00 0.00 Department: 220 - Willemsen Parking Lot Total: 0.00 1,375,000.00 50,762.50 Department: 220 - Willemsen Parking Lot
092-220-70005 Design and Permitting 0.00 75,000.00 45,277.50 092-220-71500 Project Management and Inspection 0.00 100,000.00 5,485.00 Department: 217 - River View Park Basketball Court Resurfacing 092-217-74100 Construction and Improvement 0.00 80,000.00 0.00 Department: 217 - River View Park Basketball Court Resurfacing Total: 0.00 80,000.00 0.00 Department: 214 - City Hall Generator/Electrical Replacement 092-214-74100 Construction and Improvement 0.00 40,000.00 0.00 Department: 214 - City Hall Generator/Electrical Replacement Total: 0.00 40,000.00 0.00 092-212-74100 Construction/Improvement 700,000.00 700,000.00 0.00 Department: 212 - The Avenue Median 3 Improvement Total: 850,000.00 850,000.00 0.00 Department: 212 - The Avenue Median 3 Improvement
092-212-70005 Design/Permitting 75,000.00 75,000.00 0.00 092-212-71500 Project Management/Inspection 75,000.00 75,000.00 0.00 092-207-70005 Design/Permitting 75,000.00 425,000.00 0.00 Department: 207 - Santa Ynez River Trail Total: 75,000.00 425,000.00 30,000.00 Department: 102 - Storm Drain Outfall Repairs and Re-Establishment Total: 40,000.00 40,000.00 0.00 Department: 207 - Santa Ynez River Trail
092-207-70000 Conceptual Plan and Feasibility 0.00 0.00 30,000.00 Revenue Total: 2,315,000.00 10,312,465.00 2,483,685.83
Expense
Department: 102 - Storm Drain Outfall Repairs and Re-Establishment 092-102-71500 Project Management/Inspection 40,000.00 40,000.00 0.00 092-49732 Transfer from Water Fund 300,000.00 599,123.00 321,103.48 092-49734 Transfer from ARPA Fund 0.00 675,743.00 324,115.11 092-49728 Transfer from Measure A 360,000.00 983,852.00 46,475.28 092-49729 Transfer from Sewer Fund 550,000.00 550,000.00 21,005.06 Fund: 092 - Capital Improvement Proj Fund
Revenue
092-49726 Transfer from Gas Tax Fund 100,000.00 750,416.00 38,133.99 092-49727 Transfer from General Fund 1,005,000.00 6,753,331.00 1,732,852.91 Capital Improvement Budget Quarterly Report
City of Buellton, CA Account Summary
For Fiscal: 2024-2025 Period Ending: 12/31/2024
Variance
Favorable
(Unfavorable)
Original
Total Budget
Current
Total Budget
Fiscal
Activity
Status: On-going.
Status: Contract executed with State.
Status: Planning intern working on concepts. Waiting on Council direction.
Status: Pursuing Grant funding with CalOES.
Status: Not started.
Status: Bid Opening 10/29/24, Council rejected bids on 12/12/24. Plans and Specs to be modified.
Percent
Used
31,414.25 15.33%
60,078.00 19.90%
538,957.23 72.88%
630,449.48 69.97%
-10,000.00 0.00%
-88,017.49 49.67%
-98,017.49 46.98%
290,398.15 4.87%
190,135.00 2.49%
1,018,193.70 5.55%
1,498,726.85 5.04%
50,000.00 0.00%
50,000.00 0.00%
12,729.50 67.98%
100,000.00 0.00%
75,000.00 0.00%
200,000.00 0.00%
387,729.50 6.52%
40,895.00 48.88%
80,000.00 0.07%
640,000.00 5.45%
760,895.00 9.25%
Department: 223 - SYVCO CDBG
092-223-71500 Project Management and Inspection 0.00 10,000.00 0.00 092-223-74100 Construction/Improvements 0.00 174,885.00 86,867.51 Department: 223- SYVCO CDBG Total: 0.00 184,885.00 86,867.51 Variance
Favorable
(Unfavorable)
Original
Total Budget
Current
Total Budget
Fiscal
Activity
Department: 322 - Road Maintenance (2023-24) Total: 0.00 800,000.00 74,024.00
092-322-71500 Project Management & Inspection 0.00 80,000.00 55.00 092-322-74100 Construction and Improvement 0.00 640,000.00 34,864.00 Department: 309 - West Highway 246 Safety Improvements Total: 0.00 414,752.00 27,022.50 Department: 322 - Road Maintenance (2023-24)
092-322-70005 Design and Permitting 0.00 80,000.00 39,105.00 092-309-71500 Project Management and Inspection 0.00 75,000.00 0.00 092-309-74100 Construction and Improvements 0.00 200,000.00 0.00 Budget Report For Fiscal: 2024-2025 Period Ending: 12/31/2024 Department: 309 - West Highway 246 Safety Improvements
092-309-70000 Conceptual Plan and Feasibility 0.00 39,752.00 27,022.50 092-309-70005 Design and Permitting 0.00 100,000.00 0.00 Department: 308 - No. Ave of the Flags Park and Ride
092-308-70005 Design and Permitting 0.00 50,000.00 0.00 Department: 308 - No. Ave of the Flags Park and Ride Total: 0.00 50,000.00 0.00 092-307-74100 Construction and Improvements 0.00 1,078,038.00 59,844.30 Department: 307 - McMurray Road Widening/TS (13/14) Total: 0.00 1,578,294.00 79,567.15 Department: 307 - McMurray Road Widening/TS (13/14)
092-307-71200 Right of Way Acquistion 0.00 305,256.00 14,857.85 092-307-71500 Project Management and Inspections 0.00 195,000.00 4,865.00 092-221-74100 Construction/Improvements 0.00 1,987,568.00 1,448,610.77 Department: 221 - Willemsen House Renovation Total: 0.00 2,099,668.00 1,469,218.52 Department: 221 - Willemsen House Renovation
092-221-70005 Design and Permitting 0.00 37,100.00 5,685.75 092-221-71500 Project Management and Inspections 0.00 75,000.00 14,922.00 Status: Construction in progress.
Status: Construction completed and Council approved NOC on 12/12/24.
Status: Procurement proceeding, but construction activities has not started due to need for new TCE.
Status: Not started.
Status: In conceptual plan/feasibility with consultant.
Status: In design.
Percent
Used
75,000.00 0.00%
75,000.00 0.00%
350,000.00 0.00%
500,000.00 0.00%
50,000.00 0.00%
50,000.00 0.00%
107,699.00 28.20%
107,699.00 28.20%
100,000.00 0.00%
100,000.00 0.00%
50,000.00 0.00%
50,000.00 0.00%
15,438.04 84.56%
15,438.04 84.56%
68,963.80 21.96%
287,546.57 63.44%
356,510.37 59.25%
092-613-74100 Construction/Improvements 0.00 786,493.00 498,946.43 Department: 613 - Res No2 Reroof Total: 0.00 874,866.00 518,355.63 Department: 610 - Water Distribution System Improvements Total: 100,000.00 100,000.00 84,561.96 Department: 613 - Res No2 Reroof
092-613-71500 Project Management and Inspections 0.00 88,373.00 19,409.20 Department: 609 - Supplemental Well/WTP Feasibility Total: 50,000.00 50,000.00 0.00 Department: 610 - Water Distribution System Improvements 092-610-74100 Construction and Improvements 100,000.00 100,000.00 84,561.96 Department: 605 - WTP Backwash Reclamation Improvement Project Total: 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 Department: 603 - WTP Facilities Improvement (13/14) Total: 150,000.00 150,000.00 42,301.00 Department: 605 - WTP Backwash Reclamation Improvement Project 092-605-74100 Construction and Improvements 0.00 100,000.00 0.00 Department: 401 - River View Park Misc. Improvements Total: 0.00 50,000.00 0.00 Department: 603 - WTP Facilities Improvement (13/14)
092-603-74100 Construction and Improvements 150,000.00 150,000.00 42,301.00 Department: 323 - Road Maintenance (2024-25) Total: 500,000.00 500,000.00 0.00 Department: 401 - River View Park Misc. Improvements
092-401-74100 Construction and Improvements 0.00 50,000.00 0.00 092-323-71500 Project Management and Inspection 75,000.00 75,000.00 0.00 092-323-74100 Construction and Improvements 350,000.00 350,000.00 0.00 Department: 323 - Road Maintenance (2024-25)
092-323-70005 Design and Permitting 75,000.00 75,000.00 0.00 Budget Report For Fiscal: 2024-2025 Period Ending: 12/31/2024 Variance
Favorable
(Unfavorable)
Original
Total Budget
Current
Total Budget
Fiscal
Activity
Status: Not started.
Status: On-going.
Status: On-going.
Status: On-going.
Status: On-going.
Status: Project completed. NOC to Council on 10/10/24.
Status: In design.
Percent
Used
50,000.00 0.00%
193,400.00 3.30%
243,400.00 2.64%
285,594.94 4.80%
285,594.94 4.80%
7,643,894.17 24.52%
0.00 0.00%
FY 24/25 YTD FY 24/25 YTD 12/31/2024
Expenditures CIP Funding
Est. Ending Fund
Balance
$ 5,224,609.65 $ 1,732,852.91 $ 14,341,177.77
934,281.95 $ 6,600.00 $ (16,902.57)
- 14,405.06 $ 658,021.72
1,330,353.02 192,897.78 $ 9,793,081.83
- 126,862.96 $ 324,725.50
60,582.24 39,476.73 $ 790,669.48
- 46,475.28 $ 998,292.01
- 324,115.11 $ (22,624.20)
Totals: $ 7,549,826.86 $ 2,483,685.83 $ 26,866,441.54
Fund Balance Analysis - Capital Improvement Project Funding Sources FY 2024-25
$ 9,251,956.96
7/1/2024
$ 15,404,139.26
$ 264,929.43
$ 404,126.38
$ 9,767,833.01
$ 228,295.46
$ 738,859.92
$ 806,358.38
$ 33,455.43
$ 27,647,997.27
Est. Beginning
Fund Balance
Fund
001 - General Fund
005 - Wastewater
006 - Wastewater Capital
020 - Water
021 - Water Capital
025 - Gas Tax
FY 24/25 YTD
Revenue
$ 5,894,501.07
$ 659,049.95
$ 268,300.40
$ 1,548,499.62
$ 223,293.00
$ 151,868.53
$ 238,408.91
$ 268,035.48
031- Measure A
032- ARPA
Budget Report For Fiscal: 2024-2025 Period Ending: 12/31/2024 Variance
Favorable
(Unfavorable)
Original
Total Budget
Current
Total Budget
Fiscal
Activity
Department: 706 - WWTP Facilities Improvement Total: 300,000.00 300,000.00 14,405.06 Expense Total: 2,315,000.00 10,127,580.00 2,483,685.83
Fund: 092 - Capital Improvement Proj Fund Surplus (Deficit): 0.00 0.00 0.00 Department: 704 - Sewer Line Replacement Total: 250,000.00 250,000.00 6,600.00 Department: 706 - WWTP Facilities Improvement
092-706-74100 Construction and Improvements 300,000.00 300,000.00 14,405.06 Department: 704 - Sewer Line Replacement
092-704-71500 Project Management and Inspections 50,000.00 50,000.00 0.00 092-704-74100 Construction and Improvements 200,000.00 200,000.00 6,600.00 Status: On-going.
Status: On-going.
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 13, 2025
Subject: Approve Extension of Wine Country Express Memorandum of Understanding
______________________________________________________________________________
BACKGROUND
In 2019, the Council authorized a Memorandum of Understanding (MOU) between the cities of Lompoc, Buellton, Solvang and the County of Santa Barbara for the continuation of the Wine Country Express (WCE) transit service. This service is operated by the City of Lompoc and provides transit service between Lompoc to Buellton to Solvang. WCE operates Monday through Saturday 3 times a day. The operational costs are shared equally between the 4 agencies.
The MOU provided tonight as Attachment 1 extends this service through June 30, 2029. A 25% fare increase is included, which reflects the fact that there has not been an increase in fares since the service started in 2008. New fares are $2.50 for adults and $1.25 for seniors and people with disabilities. New monthly pass rates are $93.75 for adults and $46.75 for seniors and people with disabilities.
FISCAL IMPACT
This change in terms of the MOU do not have any direct additional impacts to the City.
The fare increase improves the Wine Country Express by helping to cover the increased cost of the service. The City of Buellton’s cost for its share of the WCE operations remains at $24,000 per year, which is included in the annual budget.
RECOMMENDATION
Staff recommends that the City Council approve the Wine Country Express Memorandum of Understanding.
ATTACHMENTS
Attachment 1 – WCE MOU 2024
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: Linda Reid, City Clerk
Meeting Date: March 13, 2025
Subject: Resolution No. 25-08 – “A Resolution of the City Council of the City of Buellton, California, Requesting the Board of Supervisors of the County of Santa Barbara Approve an All Mail-In Ballot Special Election to be Held on Tuesday, August 26, 2025 and Conducted by the Santa Barbara County Elections Office”
______________________________________________________________________________
BACKGROUND
Santa Barbara County Elections contacted staff and indicated some changes needed to be made to Resolution No. 25-04, requesting consolidation of the mail-in ballot Special Election scheduled for August 26, 2025. Staff was instructed to remove the word “consolidate” and reference to Elections Code Section 10403, as the election is a mail-in ballot stand-alone election and is not being consolidated with any other election at this time. The Election’s Office also requested that Section 7 of Resolution No. 25-04 be removed as it references Election Code Section 10418, related to election consolidation.
Staff has revised the resolution as requested and given the resolution a new number, which is attached as Resolution No. 25-08. Following Council approval, staff will provide the three Special Election Resolutions to the Santa Barbara County Clerk of the Board for docketing and request for approval by the Board of Supervisors at their April 1, 2025 board meeting.
RECOMMENDATION
That the City Council consider adoption of Resolution Nos. 25-08 - “A Resolution of the City Council of the City of Buellton, California, Requesting the Board of Supervisors of the County of Santa Barbara Approve an All Mail-In Ballot Special Election to be Held on Tuesday, August 26, 2025 and Conducted by the Santa Barbara County Elections Office”
ATTACHMENTS
Resolution No. 25-08
RESOLUTION NO. 25-08
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
BUELLTON, CALIFORNIA, REQUESTING THE BOARD OF
SUPERVISORS OF THE COUNTY OF SANTA BARBARA
APPROVE A MAIL-IN BALLOT SPECIAL ELECTION TO BE
HELD ON TUESDAY, AUGUST 26, 2025 AND CONDUCTED
BY THE SANTA BARBARA COUNTY ELECTIONS OFFICE
WHEREAS, under the provisions of the laws relating to General Law Cities in the State of California, a Special Election shall be held on August 26, 2025 for the election of a Municipal Officer.
NOW, THEREFORE, THE CITY COUNCIL DOES RESOLVE, DECLARE, DETERMINE, AND REQUEST AS FOLLOWS:
SECTION 1. That pursuant to the requirements of Section 10002 of the Elections Code, the Board of Supervisors of the County of Santa Barbara is hereby requested to consent and agree to the Mail-In Ballot Special Election on Tuesday, August 26, 2025, for the purpose of electing one (1) Member of the City Council from District 4 for the remainder of a four-year term, expiring December 2026.
SECTION 2. That pursuant to the requirements of the laws of the State of California relating to General Law Cities there is called and ordered to be held in the City of Buellton, California, on Tuesday, August 26, 2025, a Special Election for the purposes of electing one (1) Member of the City Council from District 4 for the remainder of a four-year term, expiring December 2026.
SECTION 3. That the Board of Supervisors is requested to permit the County Elections Division to take any and all steps necessary in conducting the Mail-In Ballot Special Election.
SECTION 4. That the City Council recognizes that additional costs will be incurred by the County by reason of this Mail-In Ballot Special Election and agrees pursuant to Section 10002 of the Elections Code to reimburse the County in full for the cost of services performed upon presentation of a bill.
SECTION 5. That the City will be providing the following services:
(a) Notice of election will be published, in time, form and manner required by law.
(b) Accept and process official candidate nomination papers, which include verification as to whether candidate statements and ballot designations meet all legal requirements.
(c) Upon certification by the County Elections Division, issue certificates of election.
Resolution No. 25-08 Page 2 March 13, 2025
(d) Take any other action necessary that is not the responsibility of the County Elections Official.
SECTION 6. That the City Council recognizes that the County Elections Official will be providing the following services:
(a) Verify nomination petitions as requested.
(b) Furnish any and all official mail-in ballots, sample ballots, notices, and printed material.
(c) Provide and process absentee voter requests.
(d) Ensure that the ballots used at the election are in the proper form and content required by law.
(e) Count ballots and canvass the returns.
(f) Declare results and certify election.
(g) Take any other action necessary in order to properly and lawfully conduct the election.
(h) Prepare and mail all invoices regarding election costs.
SECTION 7. That Resolution No. 25-04 be rescinded.
SECTION 8. That the City Clerk shall certify to the passage and adoption of this resolution.
PASSED, APPROVED, and ADOPTED this 13th day of March 2025. __________________________________
David Silva
Mayor
ATTEST:
____________________________________
Linda Reid
City Clerk, Elections Official
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: Shannel Zamora, Finance Director
Meeting Date: March 13, 2025
Subject: Review of Annual Comprehensive Financial Report (ACFR) for Fiscal Year Ended June 30, 2024
______________________________________________________________________________
BACKGROUND
Staff is pleased to present the Annual Comprehensive Financial Report (ACFR) for the fiscal year July 1, 2023 through June 30, 2024 (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 2023-24 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
ACFR – 6/30/24 Page 2 March 13, 2025
included in the Financial Section of this report. As part of the audit, Moss, Levy & 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.
RECOMMENDATION
That the City Council review and file the Annual Comprehensive Financial Report for Fiscal Year ended June 30, 2024.
ATTACHMENTS
Attachment 1 – Annual Comprehensive Financial Report for June 30, 2024 Attachment 2 – Glossary of Terms
Attachment 3 – 2023-24 Revenue and Expenditures Report (Governmental Funds) Attachment 4 – 2023-24 Revenue and Expense Report (Proprietary Funds)
CITY OF BUELLTON, CALIFORNIA
ANNUAL COMPREHENSIVE
FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Cover photo: Buellton Community Garden on Central Avenue
CITY OF BUELLTON, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED
JUNE 30, 2024
PREPARED BY:
FINANCE DEPARTMENT
Shannel Zamora, Finance Director
INTRODUCTORY SECTION
CITY OF BUELLTON
TABLE OF CONTENTS
June 30, 2024
INTRODUCTORY SECTION
Table of Contents ........................................................................................................................................................................... i Letter of Transmittal ..................................................................................................................................................................... iii Organization Chart ....................................................................................................................................................................... xii List of Officials ............................................................................................................................................................................. xiii Certificate of Achievement for Excellence in Financial Reporting .............................................................................................. xiv
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 ........................................................................................................................................................................... 63 Housing Fund ........................................................................................................................................................................... 64 Notes to the Required Supplemental Information - Budgetary Comparison Schedules ............................................................ 65 Schedule of Proportionate Share of Net Pension Liability .......................................................................................................... 66 Schedule of Pension Contributions ................................................................................................................................ : ............ 67 Schedule of Changes in OPEB Liability and Related Ratios ......................................................................................................... 68 Schedule of OPEB Contributions ................................................................................................................................................. 69
SUPPLEMENTAL INFORMATION SECTION
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual:
Capital Improvement Project Fund - Major Capital Projects Fund .......................................................................................... 71 Combining Balance Sheet - Nonmajor Governmental Funds ..................................................................................................... 74 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds ............................................................................................................................. 76 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual:
American Rescue Plan Act Fund .............................................................................................................................................. 78 Traffic Mitigation Fund ............................................................................................................................................................ 78 Gas Tax Fund ............................................................................................................................................................................ 79 Measure A Fund ....................................................................................................................................................................... 79 Local Transportation Fund ....................................................................................................................................................... 80 Transportation Planning Special Revenue Fund ...................................................................................................................... 80
CITY OF BUELLTON
TABLE OF CONTENTS - CONTINUED
June 30, 2024
Page
STATISTICAL SECTION
Financial Trends:
Net Position by Component .............................................................................................................................................. 84 Changes in Net Position .................................................................................................................................................... 86 Fund Balances – Governmental Funds............................................................................................................................... 88 Changes in Fund Balances – Governmental Funds ............................................................................................................. 92 Revenue Capacity:
Assessed Value and Actual Value of Taxable Property ....................................................................................................... 95 Direct and Overlapping Tax Rates ..................................................................................................................................... 96 Principal Property Taxpayers ............................................................................................................................................ 98 Schedule of Top 25 Principal Sales Tax Remitters .............................................................................................................. 99 Property Tax Levies and Collections ................................................................................................................................ 100 Debt Capacity:
Direct and Overlapping Debt........................................................................................................................................... 101 Ratios of Outstanding Debt by Type ................................................................................................................................ 102 Legal Debt Margin Information ....................................................................................................................................... 103 Demographic and Economic Information:
Demographic and Economic Statistics ............................................................................................................................. 104 Operating Information:
Full-time and Part-time City Employees by Function........................................................................................................ 106 Operating Indicators by Function .................................................................................................................................... 107 Capital Asset Statistics by Function ................................................................................................................................. 108 Capital Asset Statistics by Funds ..................................................................................................................................... 110 ii
City of Buellton
February 14, 2025
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, 2023 through June 30, 2024. 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, 2024.
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, practicing 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 2023-2024 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. iii
CITY OF BUELLTON
Letter of Transmittal
For the Fiscal Year Ended June 30, 2024
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 held 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 4,970, consisting of about 1,933 households within the City.
Thousands of travelers have long recognized Buellton as the former home of the iconic Andersen’s Split Pea Soup Restaurant, which left a lasting legacy as a beloved dining destination.
Pea Soup Andersen's, closed in January 2024, just before its 100th anniversary, for redevelopment. 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 of these financial statements. iv
CITY OF BUELLTON
Letter of Transmittal
For the Fiscal Year Ended June 30, 2024
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 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 population growth of approximately 6.9 percent between 2010 and 2020. However, after reaching a peak of 5,464 residents in 2020, the population of the City has decreased to approximately 4,970 in 2024. Overall, over the past five years, the City's population has seen a net decrease of around 9.0%. The decline in population is driven by broader trends in California such as high living costs, net domestic outmigration, and pandemic-related effects. Rising housing prices have pushed residents, to more affordable states, while the pandemic increased mortality, and enabled remote work relocations.
Development in the city has prospered with numerous open projects, including multi-family residential, industrial, commercial, and mixed-used projects. Among these, three are affordable housing projects, one of which is designated for senior citizens. The City's growing development has positively impacted revenues, including property and sales taxes, both indirectly through population growth and directly through higher assessed values from new construction added to the property tax roll. Additionally, the establishment of new businesses has contributed to increased sales tax revenue.
Tourists continue to view Buellton as a destination, as reflected in the increases in sales tax and transient occupancy tax (TOT) revenue in the last few years. FY 2023-24 Sales tax revenue was $3.588 million, marking the second highest sales tax revenue the City has received since its incorporation. Sales tax revenue was slightly down at $26,141 (.7%) less compared to FY 2022-23 and $302,411 (9.2%) higher compared to FY 2021-22. The top three sales tax categories for the City for the year ended June 30, 2024 were: Fuel and Service Stations, Autos and Transportation and County and State Pools. Auto-transportation vendors saw an 8.8% growth during the 2024 second quarter, significantly outperforming the statewide decline of 6.4%. Gasoline sales grew slightly, in line with the overall trend. Allocations from the countywide use-tax pool surged, though some positive movements were due to misallocations. Meanwhile, wineries faced weaker demand as consumers reduced alcohol consumption or opted for more affordable options. v
CITY OF BUELLTON
Letter of Transmittal
For the Fiscal Year Ended June 30, 2024
Casual dining restaurants experienced a decline due to rising menu prices and increased economic uncertainty. Sales of building and construction supplies dropped, with the housing market turnover at its lowest level in 30 years.
TOT revenue has remained stable and consistent, surpassing pre-pandemic levels. During the pandemic, TOT revenue was $2.5 million in FY 2019-20 and increased to $3.0 million in FY 2020-
21. Prior to the pandemic, TOT revenue in FY 2018-19 was $3.1 million, reflecting an upward trend beginning in FY 2020-21 as economic recovery followed the reopening. For the fiscal year ended June 30, 2024, TOT revenue totaled approximately $3.9 million, representing a decrease of $312,663 (7.4%) compared to the previous fiscal year. This decline is likely attributed to lower occupancy rates, as tourism demand shifted abroad following the easing of travel restrictions.
After nearly two years of staying home, staycations were no longer preferred, contributing to the drop in local lodging demand.
To support continued growth in TOT revenue, a measure was placed on the November ballot to increase the TOT rate from 12% to 14%, which is projected to generate approximately $600,000 in additional annual revenue. At the November 2024 general election, the voters of the City of Buellton adopted Measure "D2024" to amend the Buellton Municipal Code to allow the City Council to increase the amount of the (TOT) rate which will become effective February 1, 2025.
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, educational services, health services, and social assistance, public administration, manufacturing, construction, retail trade and agriculture. The median household income is $96,028 compared to $91,197 for Santa Barbara County. Per capita income using 2022 data is $46,257 compared to $75,757 for Santa Barbara County. The households are mostly owner-occupied (61%), 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, Buellton’s median home value in June 2024 value was $1.1 million. Buellton median home values have gone up 25.7% over the prior year. The median home value for Santa Barbara County compares at $860,000 along with the California value of $900,720.
As of June 30, 2024, California’s economy showed signs of resilience and growth. The state experience a net gain of over 260,000 new jobs in the past year, matching pre-pandemic growth rates. According to labor market data released by the Employment Development Department (EDD), the unemployment rate was 5.2%, slightly higher than the previous year but still lower than most of the past decade. The unemployment rate in Buellton in June 2024 was 1.9%, which increased from 1.7% from the previous year. This rate continues to stay well below the statewide average.
vi
CITY OF BUELLTON
Letter of Transmittal
For the Fiscal Year Ended June 30, 2024
In 2023, California's GDP grew at an annual rate of 3.7%. However, in the second quarter of 2024, growth slowed to 2.8%, which is 0.2%lower than the overall U.S. growth rate. The slowdown is attributed to weaknesses in specific sectors of the economy, reflected in the state's high unemployment rate. The inflation rate in California was 3.0% at the end of second quarter of 2024, an improvement the previous year’s rate of 7.0%. Lower inflation rates can increase consumer purchasing power and reduce pressure on businesses to raise prices. Inflation can impact the City of Buellton, which relies on fuel services, and auto and transportation, by increasing operational costs for businesses and consumers. This can lead to reduced consumer spending, operational challenges for local businesses, economic uncertainty, and potential job losses. Overall, the economy demonstrated strong fundamentals, but concerns about inflation, wage growth, and economic uncertainty persist.
LONG-TERM FINANCIAL PLANNING AND MAJOR INITIATIVES
Fiscal Year 2023-24 marks the first year of the City’s Biennial Budget for FY 2023-24 and FY 2024-
25. 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 is formatted 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, 2024, the City successfully undertook the following LongTerm Financial Planning and Major Initiatives:
City Council allocated $119,069 to continue funding the Arts and Culture Program. The following are examples of funded activities.
o Juneteenth event, Poppy Mosaic Art Project at the Buellton Post Office, Poppy Banner Project at Avenue of Flags and Highway 246, fence at the Buellton Community Garden and for a variety of band performances at the Buellton Fall Fest.
City has been utilizing Regional Early Action Planning (REAP) 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 pre-approved Additional Dwelling Unit (ADU) plans. The 2023 Housing Element update was completed in August 2023. Pre-approved ADU plans were completed and made available to the public.
Construction on major capital projects continued such as:
vii
CITY OF BUELLTON
Letter of Transmittal
For the Fiscal Year Ended June 30, 2024
o Willemsen Parking Lot design was completed. The parking lot will support used at the Willemsen property. It will include appurtenant amenities such as pedestrian access to facilitate vehicular and pedestrian access from River View Park. o Willemsen House renovation began. The reconfiguration of the interior of the building is needed to accommodate the relocation of the Buellton Library. This includes community rooms, ADA retrofits, and other appurtenant improvements. o McMurray Road Widening design and permitting have been complete and bid documents for potential contract went out in Fall Quarter 2023. The contract was awarded, but due to availability of material, the project was pushed back. o Road Maintenance Road Project 2022-23 has been completed. The project consisted of annual road maintenance per pavement management plan. o Road Maintenance Road Project 2023-24 design has commenced. The project will include road maintenance for Avenue of Flags from South and North limits. o The aging roof at City Hall was replaced.
o Design for Median 3 at Avenue of Flags has commenced. o Completed improvements at Village Park that include a new 6-swing set and a large shade structure over the existing playground.
o Commended Right-of-way study to explore traffic safety improvements to West Highway 246 that will aid in the safety of bicycle, pedestrians, in addition to reducing traffic speeds. The scope of the project will include concept and feasibility review with coordination with Caltrans.
o Commenced tenant improvements to the existing library building to be occupied by the Santa Ynez Valley Community Outreach. Project will be reimbursed with CDBG funds.
o Water Treatment Plant facilities improvements are currently in progress. o Reservoir No.2 re-roof project is nearing completion. Project includes new aluminum roof.
o Sewer line replacement improvements are currently in progress. o Wastewater Treatment Plant facility repairs and replacement of blower. Although no major Private Development projects were approved during the fiscal year construction began on two large multi-family residential projects during the fiscal year.
These projects benefit the City by ensuring that low to moderate-income workers can live close to their jobs, fostering economic diversity, and boosting consumer spending. It promotes community stability, and improves residents' health and well-being.
Additionally, it supports sustainable development, reduces urban sprawl, decreases homelessness, and increases community engagement. The two multi-family residential projects are:
o A Multi-Family Residential Project at the southern terminus of McMurray Road began construction in June 2024. The project consists of 89 affordable units. o A Multi-Family Residential Project north of the Vineyard Village Townhomes, along McMurray Road began construction in December 2023. The project consists of 49 affordable units.
viii
CITY OF BUELLTON
Letter of Transmittal
For the Fiscal Year Ended June 30, 2024
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 2023-24 CIP budget was about $10.127 Million and reflects a 13.0 percent increase from FY 2022-23. 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 annual road maintenance projects.
Key components of the Capital Improvement Program for 2023-28 include:
Circulation Improvements – McMurray Road Widening, Avenue of the 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 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.
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. ix
CITY OF BUELLTON
Letter of Transmittal
For the Fiscal Year Ended June 30, 2024
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.
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, 2023. This was the eleventh 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.
x
CITY OF BUELLTON
Letter of Transmittal
For the Fiscal Year Ended June 30, 2024
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,
Shannel Zamora
Finance Director
xi
City of Buellton, California
Annual Comprehensive Financial Report
For the year ended June 30, 2024
Organization Chart
Electorate
City Council
Planning
Commission City Manager
Planning
Director
Assistant/Associate
Planner
Staff
Assistant/Planning
Technician
Finance
Director
Accounting
Specialist
Revenue
Specialist
Accounting
Technician
Administrative
Assistant
Public Works
Director/City
Engineer
Chief Plant
Operator -
WWTP
Lead Maintenance &
Utility Fieldworker
Journeyman
Maintenance & Utility
Fieldworker
Maintenance & Utility
Fieldworker I
Facilities Supervisor/Utility
Fieldworker
Facilities Foreman/Utility
Fieldworker
City
Clerk/Human
Resources
Director
Recreation
Supervisor
Recreation
Center
Coordinator
Youth
Recreation
Coordinator
Engineering Fire Police
City Attorney
City of Buellton, California
List of Officials
As of June 30, 2024
Dave King, Mayor At-Large
David Silva, Vice Mayor/City Council Member District 4 Hudson Hornick, City Council Member District 1
Elysia Lewis, City Council Member District 2
John Sanchez,, City Council Member District 3
Art Mercado, Chair
Shannon Reese, Vice Chair
Daniel Contreras, Commissioner
Marcilo Sarquilla, Commissioner
Vacant, Commissioner
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, Recreation Supervisor
xiii
CITY COUNCIL – Elected Positions
PLANNING COMISSION –Appointed by Council
CITY ADMINISTRATIVE STAFF
City of Buellton, California
Annual Comprehensive Financial Report
For the fiscal year ended June 30, 2024
Certificate of Achievement for Excellence in Financial Reporting xiv
FINANCIAL SECTION
THIS PAGE IS INTENTIONALLY LEFT BLANK
Moss, Levy & Hartzheim LLP
Certified Public Accountants
2400 Professional Parkway, Suite 205 Santa Maria, CA 93455 Tel 805.925.2579 Fax 805.925.2147 mlhcpas.com BEVERLY HILLS ∙ CULVER CITY ∙ SANTA MARIA
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, 2024, 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, 2024, 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
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 for the General and major Special Revenue Funds, 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 and schedules are presented for purposes of additional analysis and are not required parts 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. In our opinion, based on our audit, the combining and individual nonmajor fund financial statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the 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 14, 2025, 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.
Santa Maria, California
February 14, 2025
2
City of Buellton, California
Basic Financial Statements
For the fiscal year ended June 30, 2024
Management’s Discussion and Analysis
3 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 (FY) ended June 30, 2024. It should be read in conjunction with the accompanying transmittal letter and basic financial statements.
FINANCIAL HIGHLIGHTS
Key financial highlights for FY 2023-24, are as follows:
As of the close of the fiscal year, the City’s total net position increased by $3,197,272, or 6.2%, 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, 2024, the City’s assets and deferred outflow of resources exceeded its liabilities and deferred inflows of resources by $55,166,119 (net position). Of this amount, $18,683,167 (unrestricted net position) may be used to meet the government’s ongoing obligations to its citizens and creditors.
The remaining amount includes $33,914,381 for net investment in capital assets and $2,568,571 for restricted uses.
The City of Buellton’s governmental funds reported a combined ending fund balance of $17,392,834, an increase of $1,152,660, or 7.1%, in comparison with the prior fiscal year fund balance. $15,111,209 (86.9%) of the fund balance is available for spending at the government’s discretion (unassigned fund balance).
The City’s General Fund ended the fiscal year with an unassigned fund balance of $15,213,606.
Management recommends maintaining a minimum reserve of 35% of budgeted operating expenditures, which amounts to a "non-spendable" fund balance of $3,114,729. This results in an unassigned balance exceeding the minimum reserve by $12,098,877, leaving a substantial amount of "spendable" funds available.
The primary government’s program revenues increased by $1,250,287, or 20.7%, in comparison with the prior fiscal year. The increase was driven by a $69,572 increase for charges for services and an increase of $1,180,715 in operating grants and capital contributions. The total primary government’s expenses increased by $2,809,540, nearly 23.2%.
The City’s net pension liability decreased from $2,888,246 to $1,488,110 which is approximately a 48.5% decrease from the prior fiscal year. As of the most current Annual Valuation Report (Measurement date June 30, 2023), the City’s defined benefit plan’s funding ratios were 90.7% for the PEPRA Plan and 84.7% for the Classic Plan.
The City reported its OPEB liability per GASB Statement No. 75. The net OPEB liability for fiscal year ended June 30, 2024 increased from $2,732,118 to $2,777,601, which is a 1.7% increase from the prior fiscal year, and the percentage of covered-employee payroll was 152.9%.
City of Buellton, California
Basic Financial Statements
For the fiscal year ended June 30, 2024
Management’s Discussion and Analysis
4 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 private entities. 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.
City of Buellton, California
Basic Financial Statements
For the fiscal year ended June 30, 2024
Management’s Discussion and Analysis
5 Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be sorted into three categories: governmental funds, proprietary funds, and fiduciary funds.
Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the Government-wide Financial Statements. However, unlike the Government-wide Financial Statements, Governmental Fund Financial Statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information 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 of these nonmajor funds. Major funds present the major activities of the City for the fiscal year and may change from fiscal year to year as a result of changes in the pattern of the City’s activities.
For the fiscal year ended June 30, 2024, the City’s major funds are as follows:
GOVERNMENTAL FUNDS:
General Fund
Housing 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.
City of Buellton, California
Basic Financial Statements
For the fiscal year ended June 30, 2024
Management’s Discussion and Analysis
6 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 37- 62 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 73-81 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 outflows of resources exceeded liabilities and deferred inflows of resources by $55,166,119 for the period ending June 30, 2024, a 6.2% increase from the prior fiscal year.
The largest portion (61.5%) of the City’s net position reflects its investment of $33.9 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 $2.6 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, Streets, Roads and Transportation, and FSA.
About $18.7 million of the net position (33.9%) is unrestricted and may be used to meet the government’s ongoing obligations to citizens and creditors. Of this amount, $6.0 million is held by the business-type activities and $12.7 million held by the governmental activities.
The statement of activities shows how the City’s net position changed during fiscal year 2023-24 compared to the prior fiscal year. The City’s net position increased overall by about $3.2 million during the fiscal year, which shows the City’s financial health is better than the previous fiscal year.
The tables on the following pages present a summary of net changes of the City’s net position as of June 30, 2024, and June 30, 2023.
City of Buellton, California
Basic Financial Statements
For the fiscal year ended June 30, 2024
Management’s Discussion and Analysis
7 The Summary of Net Position as of June 30, 2024, and 2023, follows:
Govern- Business- Govern- Businessmental type mental type Activities Activities Total Activities Activities Total Current and other assets $ 20,581,149 $ 7,343,677 $ 27,924,826 $ 18,384,511 $ 7,830,366 $ 26,214,877 Noncurrent assets 275,672 - 275,672 426,482 - 426,482
Capital assets,net 27,711,203 10,148,724 37,859,927 26,454,742 8,619,158 35,073,900 Total assets 48,568,024 17,492,401 66,060,425 45,265,735 16,449,524 61,715,259 Deferred outflows of resources 1,694,494 689,762 2,384,256 2,717,105 765,577 3,482,682 Total assets and deferred
outflows of resources 50,262,518 18,182,163 68,444,681 47,982,840 17,215,101 65,197,941 Current and other liabilities 2,607,757 147,916 2,755,673 2,049,717 186,149 2,235,866 Noncurrent liabilities 3,963,784 4,481,004 8,444,788 5,186,573 4,672,119 9,858,692 Total liabilities 6,571,541 4,628,920 11,200,461 7,236,290 4,858,268 12,094,558 Deferred inflows of resources 1,574,942 503,159 2,078,101 968,855 165,681 1,134,536 Total liabilities and deferred inflow of resources 8,146,483 5,132,079 13,278,562 8,205,145 5,023,949 13,229,094 Net Position:
Net investment in capital assets 26,893,843 7,020,538 33,914,381 25,609,555 5,417,973 31,027,528 Restricted 2,568,571 - 2,568,571 2,366,502 - 2,366,502
Unrestricted 12,653,621 6,029,546 18,683,167 11,801,639 6,773,179 18,574,818 Total net position $ 42,116,035 $ 13,050,084 $ 55,166,119 $ 39,777,696 $ 12,191,152 $ 51,968,848 2024 2023
Summary of Net Position
City of Buellton, California
Basic Financial Statements
For the fiscal year ended June 30, 2024
Management’s Discussion and Analysis
8 Provided below is a summary of changes in Net Position for the fiscal years ended June 30, 2024, and 2023.
Govern- Business- Govern- Businessmental type mental type Activities Activities Total Activities Activities Total Revenues:
Program revenues:
Charges for services $ 349,257 $ 3,864,200 $ 4,213,457 $ 354,117 $ 3,789,768 $ 4,143,885 Grants and contributions:
Operating 3,008,818 - 3,008,818 1,910,424 - 1,910,424
Capital - 82,321 82,321 - - - General revenues: - Secured and unsecured - property taxes 1,954,402 - 1,954,402 1,886,905 - 1,886,905 Sales and use tax 3,588,858 - 3,588,858 3,615,000 - 3,615,000 Transient lodging tax 3,908,296 - 3,908,296 4,220,959 - 4,220,959 Franchise taxes 398,730 - 398,730 377,541 - 377,541
Other taxes 32,060 - 32,060 24,788 - 24,788
Fines and forfeitures 13,041 - 13,041 9,254 - 9,254
Investment income 669,322 193,571 862,893 197,373 90,240 287,613 Other general revenues 37,570 - 37,570 15,316 - 15,316
Total revenues 13,960,354 4,140,092 18,100,446 12,611,677 3,880,008 16,491,685 Expenses:
Governmental activities:
General government 2,730,898 - 2,730,898 3,044,661 - 3,044,661 Community development 1,568,514 - 1,568,514 677,260 - 677,260 Culture and leisure 994,177 - 994,177 694,252 - 694,252 Public safety 3,005,815 - 3,005,815 2,645,358 - 2,645,358 Public works 2,550,373 - 2,550,373 1,830,795 - 1,830,795 Interest on long term debt 20,597 - 20,597 21,488 - 21,488 Business-type activities:
Water - 2,153,551 2,153,551 - 1,798,264 1,798,264
Sewer - 1,879,249 1,879,249 - 1,381,556 1,381,556
Total expenses 10,870,374 4,032,800 14,903,174 8,913,814 3,179,820 12,093,634 3,089,980 107,292 3,197,272 3,697,863 700,188 4,398,051 Transfers (751,640) 751,640 - (201,694) 201,694 - Change in net position 2,338,340 858,932 3,197,272 3,496,169 901,882 4,398,051 Net position:
Beginning of fiscal year 39,777,695 12,191,152 51,968,847 36,281,526 11,289,270 47,570,796 End of fiscal year $ 42,116,035 $ 13,050,084 $ 55,166,119 $ 39,777,695 $ 12,191,152 $ 51,968,847 2024 2023
Changes in Net Position
Excess of revenue over expenses
before transfers
City of Buellton, California
Basic Financial Statements
For the fiscal year ended June 30, 2024
Management’s Discussion and Analysis
9 Revenues
The City’s total revenue for governmental and business-type activities was $18,100,446 for the fiscal year ended June 30, 2024. Total revenue from government-type activities were $13,960,354. Approximately 85.7%, or $11,968,883, 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 $1,250,287, or 20.7%.
1. Charges for Services – Governmental and Business-Type Activities Operating – Governmental charges for services decreased slightly due to deferral of the AT&T tower lease in April 2024. Businesstype activity revenue is derived from water and wastewater sales and remained stable from the prior fiscal year with a $74,432 (2.0%) increase. Charges for water and wastewater is calculated 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 $1,180,715, or 61.8%. 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) and the housing grant. Capital grants and contributions increased by $82,321. Last fiscal year, the City did not report capital grants and contributions.
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 $3,588,858 for a decrease of $26,142 (0.7%) from the previous fiscal year. Reduced sales tax revenue was driven by lower casual dining sales, impacted by rising menu prices and economic uncertainty, and decreased building and construction supply sales due to a 30-year low in housing market turnover. However, auto and transportation were slightly above the previous year's levels and outperformed the state.
2. Secured and Unsecured Property Taxes – Property tax revenues recorded in the governmental fund totaled $1,954,402 for an increase of $67,497 (3.6%). 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.
3. Transient Occupancy Tax (TOT) – Governmental Activities Operating –This revenue source is a key contributor to the City’s General Fund, with the City receiving 12% of total taxable hotel revenue within its limits. For the fiscal year ending June 30, 2024, Transient Occupancy Tax (TOT) revenue totaled $3,908,296, reflecting a $312,663 (7.4%) decline from the previous year, likely due to lower occupancy rates. In recent years, TOT revenue exceeded the pre-pandemic level of $3.1 million from FY 2018-19, reaching a historic high of approximately $4.3 million in FY 2021-22, driven by
City of Buellton, California
Basic Financial Statements
For the fiscal year ended June 30, 2024
Management’s Discussion and Analysis
10 increased occupancy and higher hotel rates. Average monthly occupancy rates were 68% in FY 2022-23, 70% in FY 2021-22, 58% in FY 2020-21, and 65% in FY 2019-20.
Expenses
Governmental and business-type activity expenses of the City for the fiscal year totaled $14,903,174.
Governmental activity expenses totaled $10,870,374 (72.9% of total expenses). Business-type activities incurred $4,032,800 of expenses (27.1% of total expenses).
Governmental Activities
The table below 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.
Public Safety total cost of $3,005,815 represents about 27.7% of total governmental activities expenses, the largest expense category for governmental activities. General Government total cost of $2,730,898 represents about 25.1% of total cost of services. The largest single expense category for total net cost of service is Public Safety with a net cost of $2,819,656 which represents 37.5% of the total net cost. The second largest expense category for total net cost of service is General Government with a net cost of $2,567,982 which represents
34.2% of total net cost. The total cost of services and the net cost of services for the fiscal years ended June 30, 2024, and 2023, are as follows:
34%
8%
8%
30%
20%
0.241%
Governmental Activities by Program
Fiscal Year Ended June 30, 2024
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 $ 2,730,898 $ 2,567,982 $ 3,044,660 $ 2,886,000 Community development 1,568,514 1,072,023 677,260 672,260 Culture and leisure 994,177 801,532 694,252 492,206
Public safety 3,005,815 2,819,656 2,645,358 2,480,087
Public works 2,550,373 230,509 1,830,795 97,232
Interest of long-term debt 20,597 20,597 21,488 21,488
Total $ 10,870,374 $ 7,512,299 $ 8,913,813 $ 6,649,273
2024 2023
City of Buellton, California
Basic Financial Statements
For the fiscal year ended June 30, 2024
Management’s Discussion and Analysis
11 Revenues by source for the fiscal years ended June 30, 2024, and 2023, are as follows:
Charges for services
2.59%
Operating grants
18.69%
Secured and unsecured
property taxes
14.51%
Sales and use tax
26.65%
Transient lodging tax
29.02%
Franchise taxes
2.96%
Other taxes
0.24%
Investment Income
4.97%
Fines & Forfeitures
0.10%
Other general revenues
0.28%
Revenues by Source - Governmental Activities
2024
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
City of Buellton, California
Basic Financial Statements
For the fiscal year ended June 30, 2024
Management’s Discussion and Analysis
12 Business-type activities
Business-type activities increased the City’s Net Position to $13,050,084 from $12,191,152 the previous fiscal year. The City has two business-type activities: Water and Wastewater. Water accounts for 68.0% of total business-type activity operating revenue, and Wastewater accounts for 32.0%.
Total business-type revenues for the Fiscal Year ended June 30, 2024 was $3,864,200, an increase of $74,462 from the prior fiscal year. Charges for services experienced an increase of $72,538 (1.9%) from the prior fiscal year. The increase for charges for current services for the Water Fund of $75,012 (2.9%) was influenced by water consumption. The decrease for the Wastewater Fund of $2,474 (0.2%) was due to less wastewater usage.
Other operating revenue increased by $1,894 (97.0%). Business-type interest income increased by $103,331 (114.5%) from the prior fiscal year. The increase was due to the higher interest earning in the Local Agency Investment Fund (LAIF), money market and certificate of deposits (CDs).
Expenses of the business-type activities for the Fiscal Year ended June 30, 2024, totaled $4,032,800, an increase of $856,234 (27.6%) from the prior fiscal year. Of the total increases in expenses from the prior fiscal year, Water Fund expenses increased $357,280 (20.4%), and Wastewater Fund expenses increased $498,954 (36.9%).
Personnel services increased $833,586 (231.0%) from the previous fiscal year. The increase was mostly due to GASB Statement No. 68 adjustments for CalPERS retirement employer contributions and Other Post-Employment Benefit (OPEB) adjustments. GASB Statement No. 68 and GASB Statement No. 75 require the City to report its full pension and retiree benefit obligations, such as healthcare, on financial statements for greater transparency. These adjustments highlight long-term costs but do not change actual expenses or impact the City's ability to provide services. While they may cause financial statement fluctuations, they do not affect daily operations. Actual employee salary and benefit amounts increased by $104,035 (16.5%). The increase is due to a 3.5% cost-of-living adjustment (COLA) for full-time employees effective July 1, 2023. In addition, the City Council approved a salary adjustment for all fulltime employees effective January 26, 2024. Employees received an equivalent of a 5.0% increase while the Public Works Director received an equivalent of 10.0% increase.
Operations and maintenance expenses remained steady and decreased slightly by $15,644 (0.7%) from the previous fiscal year. Depreciation expense continues to be consistent. Non-Operating expenses also remained steady with a decrease of $3,254 (4.1%).
City of Buellton, California
Basic Financial Statements
For the fiscal year ended June 30, 2024
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, 2024, and 2023, are as follows:
Expenses and Program Revenues
Business-type Activities
2023
Expenses and Program Revenues
Business-type Activities
2024
City of Buellton, California
Basic Financial Statements
For the fiscal year ended June 30, 2024
Management’s Discussion and Analysis
14 The revenues by source for the business-type activities for the fiscal years ended June 30, 2024, and 2023, are as follows:
Charges for services
93.34%
Operating and capital
grants and
contributions 1.99%
Investment income
4.68%
Revenues by Source - Business-type Activities
2024
Charges for services
97.67%
Operating and capital
grants and
contributions 0.00%
Investment income
2.33%
Revenues by Source - Business-type Activities
2023
City of Buellton, California
Basic Financial Statements
For the fiscal year ended June 30, 2024
Management’s Discussion and Analysis
15 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, 2024, the City of Buellton's governmental funds reported combined ending fund balances of $17,392,834, an increase of $1,152,660 (7.1%) in comparison with the prior fiscal year ending fund balance. Approximately 86.9% of the total combined ending fund balance ($15,111,209) 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 ($204,545) and restricted by other parties for a specific purpose ($2,077,080).
Total governmental revenue increased $857,186 (6.8%) and governmental expenditures increased $1,404,432 (13.8%). Most of the revenue increase came from intergovernmental revenues, which grew by $610,000 (32.2%), mainly due to the use of American Rescue Plan Act (ARPA) funds for infrastructure improvements. Additionally, revenue from the use of money and property rose by $471,949 (239.1%) because of higher interest earnings from the City’s investment portfolio. However, overall revenue growth was partly offset by a $242,847 (2.4%) decline in tax revenue, primarily due to a decrease in transient occupancy tax (TOT) as demand shifted from local to international destinations.
The majority of the $1.4 million increase in governmental expenditures is in Capital Outlay expenditures with an increase of $1.2 million (157.5%) due to the completion and current construction of capital improvement projects during the fiscal year. Additionally, expenditures for Community Development increased by $548,423 (90.2%) due to the issuance of a note receivable to two affordable housing projects.
These increases in expenditures were offset by a $953,594 (28.0%) decrease in general government expenditures, primarily because the City made an additional discretionary payment (ADP) towards CalPERS Unfunded Accrued Liability (UAL) of $150,000 compared to approximately $1.2 million the previous fiscal year.
General Fund
The General Fund is the chief operating fund of the City of Buellton. The total fund balance in the General Fund is $15,429,136 of which $15,213,606 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 171.0% of total General Fund expenditures of
City of Buellton, California
Basic Financial Statements
For the fiscal year ended June 30, 2024
Management’s Discussion and Analysis
16 $8,899,226. 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.
The fund balance of the City of Buellton's General Fund increased by $1,452,069 (10.4%) from the prior fiscal year. General Fund revenues totaled $11,803,636 which was an increase of $261,095 (2.3%) over the prior fiscal year. General Fund expenditures decreased $315,759 (3.4%) compared to the prior fiscal year.
Changes in General Fund Revenue
The increase in General Fund Revenue was primarily driven by a $425,101 rise in "use of money and property" revenue, largely due to higher interest earnings from the Local Agency Investment Fund (LAIF), Money Market accounts, and Certificates of Deposit (CDs). LAIF’s interest rate rose from 2.74% to 4.30%, generating $271,661 in earnings compared to $108,342 the previous fiscal year. Similarly, Money Market interest rates increased from 3.35% to 4.70%, with earnings rising from $51,456 to $127,103. However, revenue growth was partially offset by a $242,847 (2.4%) decline in tax revenue, mainly due to a decrease in transient occupancy tax (TOT). Compared to the previous fiscal year, TOT revenue was down by $312,663, driven by a lower average occupancy rate, which fell from 68% to 64%.
Changes in General Fund Expenditures
General Fund expenditures decreased overall, but this was the net result of significant increases in certain areas, which were offset by a substantial decrease in others. Employee Services costs increased by $268,154 (11.0%) due to a 5.6% cost-of-living adjustment for full-time employees (effective July 1, 2023) and a medical benefit increase (effective January 1, 2023). Additionally, regular full-time staff received a
5.0% market equity salary adjustment on January 25, 2024, while Department Directors received 10.0%.
Furthermore, the hiring of an Associate Planner in January 2023 resulted in lower expenditures in FY 2022- 23, whereas FY 2023-24 reflected a full year of salary and benefits. The City also filled a new Administrative Assistant position in March 2024, contributing to the overall increase in Employee Services costs.
General operating and maintenance expenditures decreased $565,989 (8.8%) compared to the prior fiscal year. The overall decrease in expenditures was primarily due to a one-time $1.2 million additional discretionary payment (ADP) to CalPERS paid in November 2022, which fully paid off the City's unfunded accrued liability (UAL) from the June 30, 2021 valuation report. Excluding this payment, operating and maintenance expenditures increased by $795,869 (11.4%), driven by a $340,838 (14.2%) increase in the Santa Barbara County Sheriff’s contract for law enforcement services, $110,000 in emergency funding for the Buellton Senior Center’s Meals on Wheels program, and the City's $125,000 loan share contribution to the Central Management Area GSA.
Transfers out of the General Fund increased by $642,109 (328.8%) compared to the prior fiscal year.
Transfers for Capital Improvement Projects (CIPs) accounted for $338,732 of General Fund expenditures.
As of June 30, 2024, the most significant CIP expenditures included: McMurray Road Widening, Willemsen
City of Buellton, California
Basic Financial Statements
For the fiscal year ended June 30, 2024
Management’s Discussion and Analysis
17 Parking Lot design, Willemsen House renovation for library use, completion of FY 2022-23 Road Maintenance Project, installation of sun shade and swing set at Village Park, 140 W Highway 246 Santa Ynez Valley Community Outreach (SYVCO) Tenant Improvements, Median 3 design, and the design phase for the FY 2023-24 Road Maintenance Projects.
Major Funds, not including General Fund
Housing Fund, with a fund balance of $11,517 had a negative change in fund balance of $484,964 (-97.7%) due to the issuance of a housing assistance loan. 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 are equal.
Other Governmental Funds
American Rescue Plan Act (ARPA) Fund, with a fund balance of $33,455 had a change in fund balance of $22,996 (219.9%) due to revenue received from interest earnings. Traffic Mitigation Fund, with a fund balance of $37,984 had a change in fund balance of $1,277 (3.5%) due to revenue received from interest earnings.
Gas Tax Fund, with a fund balance of $738,860 had a change in fund balance of $155,710 (26.7%) 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 $806,358 had a negative change in fund balance of $61,536 (-7.1%) 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 $437,921 had a change in fund balance of $66,636 (17.9%) mainly due to revenue received and transfers in from Measure A for operating expenditures.
Transportation Planning, with a negative fund balance of $102,397 had a change in fund balance of $472 (-0.5%) 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, 2024, total Net Position for the Water Fund was $9,996,128, an increase of $1,334,538 (15.4%) over last fiscal year. Unrestricted Net Position amounted to $5,379,666 an increase of $1,762 (0.03%). The Net Investment in Water Capital Assets amounted to $4,616,462 an increase of $1,332,776 (40.6%). 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.
City of Buellton, California
Basic Financial Statements
For the year ended June 30, 2024
Management’s Discussion and Analysis
18 $1,332,776(40.6%). 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, 2024, total Net Position for the Wastewater Fund decreased to $3,053,956, a reduction of $475,606 (13.5%) over last fiscal year. Unrestricted Net Position amounted to $649,880, a decrease of $745,395 (53.4%). The Net Investment in Wastewater Capital Assets amounted to $2,404,076, an increase of $269,789 (12.6%). 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 2023-24, appropriation changes between the original and final budgets amounted to a decrease of $2,304,280 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. The unspent capital project appropriations are carried over into the new fiscal year. Overall, actual revenue exceeded expenditures by $2,904,410. The actual net change in Fund Balance is $1,452,069. Following is a summary of General Fund Budget variances for the period ending June 30, 2024.
Budgeted Amounts Actual Variance from
Revenues: Original Budget Final Budget Amounts Final Budget Taxes $ 9,671,846 $ 9,671,846 $ 9,882,346 $ 210,500
Licenses, Permits, Fees 10,125 10,125 13,313 3,188
Intergovernmental 800,038 984,923 927,814 (57,109)
Charges for Services 311,705 311,705 348,929 37,224
Fines and forfeitures 5,300 5,300 13,041 7,741
Use of money and property 83,000 83,000 580,623 497,623 Other revenues 8,950 8,950 37,570 28,620
Total Revenues 10,890,964 11,075,849 11,803,636 727,787 Expenditures:
General Government $ 2,248,083 $ 2,552,063 $ 2,440,928 111,135 Community Development 918,823 936,316 664,624 271,692
Cultural and leisure 939,580 946,757 821,741 125,016
Public Safety 2,772,189 2,987,539 3,002,575 (15,036)
Public Works 1,893,447 2,002,338 1,908,268 94,070
Capital Outlay 50,000 25,000 12,416 12,584
Debt Service: -
Principal 18,250 18,250 34,964 (16,714)
Interest 19,607 19,607 20,846 (1,239)
Total Expenditures 8,859,979 9,487,870 8,906,362 581,508 Excess of Revenues over(under
expenditures) 2,030,985 1,587,979 2,897,274 1,309,295
Other Financing Sources:
Lease liabilities issued 7,136 7,136
Transfers Out (4,416,571) (6,277,845) (1,452,341) (4,825,504) Total other financing sources (4,416,571) (6,277,845) (1,445,205) 4,832,640 Net change in Fund Balance (2,385,586) (4,689,866) 1,452,069 6,141,935
SUMMARY OF GENERAL FUND BUDGET VARIANCES
City of Buellton, California
Basic Financial Statements
For the fiscal year ended June 30, 2024
Management’s Discussion and Analysis
19 Changes from Original Budget to Amended Budget
The City adopted the original FY 2024-25 Budget that identifies changes to City appropriations in response to the economic conditions and previous expenditure trends. The City adopts a biennial budget, and at the time the original budget was adopted in June 2023 there was uncertainty of the length of the postpandemic revenue growth. The original budget projected conservative revenue estimates with steady growth, specifically transient occupancy tax and sales tax. Fortunately, the General Fund revenue experienced better than projected revenue exceeding projections by $210,500. FY 2023-24 Budget was revised during Mid-Year in March 2023, and during its quarterly reviews during the fiscal year to reflect the current economic status and priorities.
Revenue changes from the original budget to amended budget equals $184,885 (1.7%). The change in revenue from Intergovernmental revenue is due to the recognition of CDBG grant monies for the tenant improvement project at the old library location to convert it into the new home of the Santa Ynez Valley Community Outreach(SYVCO)
Expenditure changes from the original budget to the amended budget equals $627,891 (7.1%). Most of the increase is in General Government expenditures with an increase of $303,980 (13.5%). The budget increase was due to emergency funding granted to the Buellton Senior Center to continue to provide their Meals-on-Wheels program ($110,000 contribution) and includes a one-time additional discretionary payment (ADP) towards CalPERS unfunded accrued liability (UAL) ($125,000). On January 25, 2024, the City Council approved a salary adjustment for all full-time employees, effective January 26, 2024. The total salary and benefit increase was distributed among the General Fund, Wastewater, and Water Funds, with the General Fund covering $50,536. The adjustment impacted General Government, Community Development, Culture and Leisure, and Publics Works. In addition, on December 14, 2023, the City Council introduced a new job classification, adding an Administrative Assistant position. The role is funded by multiple departments and impacted the budget for General Government, Public Works and Culture and Leisure expenditures.
Public Safety changes from the original budget to the amended budget equals $215,530 (7.8%). The City of Buellton contracts with the County of Santa Barbara’s Sheriff Department for law enforcement services.
At the time the original budget was adopted, the City was under negotiations with the County of Santa Barbara. A contract agreement was made that resulted in an increase to law enforcement services.
The change from the original budget to the amended budget for Transfers Out from the General Fund is an increase of $1,861,274 (42.1%) due to the addition of capital improvement projects such as the Santa Ynez Valley Community Outreach CDBG Tenant Improvement Project, update playground equipment at Village Park and explore traffic safety improvements to Highway 246. The major increase to capital improvement projects is the need to increase the construction cost of the McMurray Road Maintenance project. The bid for construction was about $1 million over the budgeted amount.
City of Buellton, California
Basic Financial Statements
For the fiscal year ended June 30, 2024
Management’s Discussion and Analysis
20 Changes from Amended Budget to Actuals
The City reported $727,787 (6.6%) more in revenue than projected, with the majority of this increase attributed to revenue from the use of money and property, reflecting a significant budget variance of $497,623 (599.5%). This surge in revenue is mainly due to higher interest rates earned on the Money Market, Certificates of Deposit (CDs), and the Local Agency Investment Fund (LAIF). The City benefited from moving $5 million of idle funds into a money market account that continues to experience rising interest earnings. Additionally, annual lease receipts from the AT&T tower and Santa Ynez Valley Horseback Rides saw a rate increase per their respective lease contracts, resulting in higher lease revenue for the current fiscal year.
The second largest variance between the final budget and actual revenue is attributed to tax revenues, with a budget variance of $210,500 (2.2%). The transient occupancy tax generated $108,296 (2.9%) more than projected, driven by higher room rates, despite a decrease in occupancy from 68% to 64%. Sales tax revenue surpassed budget projections by $83,371 (2.4%), thanks to the City’s auto-transportation vendors significantly outperforming statewide trends. Additionally, allocations from the countywide use-tax pool saw a significant increase, though it has been identified that some of the largest positive movements within the pool are due to misallocations.
The fiscal year closed with General Fund expenditures coming in $581,508 under budget projections.
Notably, Community Development expenditures exhibited the most significant budget variance at $271,692, largely due to the postponement of the Comprehensive Zoning Code Update and Comprehensive General Plan Update to the next fiscal year. Culture and Leisure expenditures had the second-largest variance, at $125,016, with approximately $45,500 in unspent Arts and Culture funds set to roll over into the next fiscal year. Additionally, limited space and capacity for Buellton Recreation Summer Camps resulted in reduced expenditures and fewer hourly employees, contributing further to the budget savings. Transfers Out from the General Fund saw budget savings of approximately $4.82 million due to capital improvement projects that were either not initiated or not yet completed.
Historically, transfers for capital projects are carried over into the subsequent fiscal year. Additional savings resulted from deferred repair and maintenance expenditures in addition to savings from current service contracts.
CAPITAL ASSETS
The City of Buellton's investment in capital assets for its governmental and business-type activities as of June 30, 2024 amounts to $37,825,761 (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 $2,795,645. Of the total increase, governmental activities showed an increase of $1,266,079 resulting from an increase in net depreciable capital assets. An increase of $1,529,566 in Business-type activities capital assets is the net result of ongoing projects offset by depreciation.
City of Buellton, California
Basic Financial Statements
For the fiscal year ended June 30, 2024
Management’s Discussion and Analysis
21 2024 2023 2024 2023 2024 2023
Land $ 2,639,835 $ 2,639,835 $ 247,691 $ 247,691 $ 2,887,526 $ 2,887,526 Contruction in progress 1,360,391 319,810 1,576,329 349,573 $ 2,936,720 $ 669,383 Total Nondepreciable Capital Assets 4,000,226 2,959,645 1,824,020 597,264 5,824,246 3,556,909 - - Buildings and improvements 9,196,029 8,225,942 582,135 582,135 9,778,164 8,808,077 Equipment 732,776 730,716 1,115,885 861,814 1,848,661 1,592,530 Infrastructure 24,401,347 24,401,347 18,283,405 17,771,500 42,684,752 42,172,847 Total Depreciable Capital Assets 34,330,152 33,358,005 19,981,425 19,215,449 54,311,577 52,573,454 Less: Accumulated Depreciation 10,653,341 9,906,692 11,656,721 11,193,555 22,310,062 21,100,247 Net Depreciable Capital Assets 23,676,811 23,451,313 8,324,704 8,021,894 32,001,515 31,473,207 Net Capital Assets $ 27,677,037 $ 26,410,958 $ 10,148,724 $ 8,619,158 $ 37,825,761 $ 35,030,116 Governmental Activities Business-type Activities Totals 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 and 50 for other capital asset information.
DEBT ADMINISTRATION
As of June 30, 2024, the City had about $8.44 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, 2024, with a comparison to prior fiscal year and the net change are as follows:
DEBT DESCRIPTION 2024 2023 2024 2023 2024 2023
Compensated absences $ 153,209 $ 126,036 $ 80,322 $ 65,919 $ 233,531 $ 191,955 Note payable - direct borrowing 782,047 800,296 3,128,186 3,201,185 3,910,233 4,001,481 Lease Liabilities 35,313 44,892 - - 35,313 44,892
OPEB liability 1,930,649 1,922,064 846,952 810,054 2,777,601 2,732,118 Net pension liability 1,062,566 2,293,285 425,544 594,961 1,488,110 2,888,246 Total long-term liability $ 3,963,784 $ 5,186,573 $ 4,481,004 $ 4,672,119 $ 8,444,788 $ 9,858,692 Governmental Activities Business-type Activities Totals Additional information on long-term debt can be found in Notes 6 and 7 – Changes in Long-Term Liabilities in the notes to the basic financial statements on pages 51 and 52.
City of Buellton, California
Basic Financial Statements
For the fiscal year ended June 30, 2024
Management’s Discussion and Analysis
22 ECONOMIC OUTLOOK
The City enters the upcoming fiscal year with a strong financial position, having ended FY 2023-24 with a General Fund balance of $15.4 million and cash reserves of $15.3 million. With operating expenditures set at $10.2 million, the city maintains a healthy coverage ratio of 151.2%. Key revenue sources include transient occupancy tax ($3.9 million), sales tax ($3.6 million), and property tax ($1.95 million), contributing to a budget where revenues exceeded expenditures by $1.45 million in fiscal year 2023-24.
The Council’s goal of maintaining an unassigned fund balance at 35% of operating expenditures provides a prudent safeguard against economic fluctuations.
California’s economy is projected to grow in 2025, driven by advancements in technology, Artificial Intelligence (AI), and a rebound in the housing sector. Consumer spending is expected to remain stable, supported by high employment levels and a potential easing of interest rates, with mortgage rates forecasted to decline slightly from their current 6.7% average. These trends may positively impact sales tax revenue and economic activity within Buellton. However, the Federal Reserve remains cautious about further rate cuts, emphasizing inflation control as a key priority.
The City's primary revenue sources—TOT, sales tax, property tax, and franchise fees—account for 92.9% of general revenues. While steady revenue growth is expected, particularly from property tax as the housing market stabilizes, prudent financial management remains essential to mitigate potential risks such as economic slowdowns or policy changes. The passage of Measure D2024, increasing TOT from
12.0% to 14.0%, effective February 1, 2025, is projected to generate an additional $600,000 annually, further strengthening the City’s ability to fund essential services, infrastructure, and community programs.
With strong reserves, steady revenue streams, and strategic fiscal policies, Buellton is well-positioned to maintain financial stability and support community growth in the coming year. While economic uncertainties remain, the City’s commitment to sound financial management and investment in key infrastructure projects ensures resilience and long-term prosperity.
NEXT YEAR’S BUDGETED APPROPRIATIONS
The adopted budget for all City funds for the new fiscal year 2024-25 is $26,123,167. The amended budget for fiscal year 2023-24 totals $26,573,427 and is summarized, with CIP expenditures shown in the Citywide CIP row of the chart below for consistent comparison as follows:
Amount Percentage
FY 2024-25 FY 2023-24 Change Change
General fund $ 10,205,854 $ 9,528,516 $ 677,338 7.11%
Water & Sewer Funds 5,332,848 5,078,619 254,229 5.01%
Citywide CIP Fund 10,312,465 11,562,292 (1,249,827) (10.81)% Special revenue funds 272,000 404,000 (132,000) #DIV/0! (32.67)% Total budget $ 26,123,167 $ 26,573,427 $ (450,260) (1.69)%
City of Buellton, California
Basic Financial Statements
For the fiscal year ended June 30, 2024
Management’s Discussion and Analysis
23 1. General Fund – Shows an increase of $677,338 (7.1%). Significant changes affecting the increase in General Fund expenditures are discussed below:
The increase in expenditure appropriations is due to full-time employee cost-of-living adjustment (COLA) and salary market equity adjustments. On January 25, 2024, the City Council approved a salary equity adjustment, moving all regular full-time employees up a step level and giving department heads an equivalent of a 2-step increase. Additionally, a
3.94% COLA was authorized, effective July 1, 2024.
The City Council authorized a new position: Administrative Assistant, which was filled in March 2024. The new fiscal year includes a full year with this position, whereas the previous year's budget accounted for only a partial year. Change in salary pay for the Part-time Assistant Planner and increased hours. The rise in contract services is attributed to the new contract renewal rates or the establishment of new contracts.
The budget includes election expenses for Districts 2 and 3, the Mayor-at-large, and two ballot measures in the November 2024 election. These ballot measures involve voting to amend the Urban Growth Boundary (UBG) until December 31, 2036, and voting to increase the Transient Occupancy Tax (TOT) from 12.0% to 14.0% for the next 25 years. The City’s retiree medical benefit is projected to rise by $32,880 (24.3%) from the originally adopted budget due to the retirement of a current employee who will become eligible for retiree medical.
The Senior Center Support budget is set to rise by $109,594 (78.0%) to $250,000 to provide emergency funding for the Meals on Wheels Program. The City of Buellton has a contract with the Santa Barbara County Sheriff's Department for FY 24-25, amounting to $2,925,921. This contract includes a 2.78% agreed-upon escalator and a 4.50% MOU increase for the Deputy Sheriff Job classification, effective June 24, 2024. The total increase compared to the previous fiscal year is $338,543, representing a 7.28% rise.
There is a $145,000 increase to cover expenses related to the GSA work and cost-sharing with the Santa Ynez Valley Water Conservation District. This also includes the costs for annual reporting and 303 sampling lead. This adjustment significantly impacts the budget by raising overall expenditures to account for these necessary expenses. 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 an increase of $254,229. The increase in appropriations is attributed to several factors, including salary and benefit increases for full-time employees, software licensing, staff uniforms, new computers, a fleet replacement vehicle, and lease costs for a backhoe and tractor. Additionally, $16,000 of the increase is allocated to lab costs and prior year and additional monitoring requirements from the Water Board and CDPH. Furthermore, the
City of Buellton, California
Basic Financial Statements
For the fiscal year ended June 30, 2024
Management’s Discussion and Analysis
24 increase in appropriations includes a carryover amount of $60,000 for a Water and Wastewater Rate study, with the cost split equally between the Water and Wastewater Funds.
3. Citywide Capital Improvement Program (CIP) Fund – The CIP Fund expenditures relate to Capital Improvement Projects. CIP fund shows a decrease of about $1.25 million. Historically, the City does not complete all budgeted projects within a fiscal year, and these projects are carried over to the next fiscal year. The decrease in budget is due to completion of projects the prior fiscal year.
4. Special Revenue Funds – Expenditures decreased by $132,000. Special revenue funds remain restricted and expenditures consistent. The proposed revision reduces appropriations by $65,000.
The Breeze program, operated by the City of Santa Maria, will now be fully funded by them.
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 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.
CITY OF BUELLTON
STATEMENT OF NET POSITION
June 30, 2024
ASSETS
Cash and investments
Cash and investments - restricted
Accounts receivable, net
Interest receivable
Lease receivable
Inventory
Prepaid items
Note receivable
Non-current assets
Lease receivable, non-current
Capital assets:
Right to use asset
Less accumulated amortization
Non Depreciable:
Land
Construction in progress
Depreciable:
Suildings and improvements
Equipment
Infrastructure
Accumulated depreciation
Total non-current 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
18,271,856
10,985
1,424,528
79,048
118,722
184,519
491,491
275,672
78,015
(43,849)
2,639,835
1,360,391
9,196,029
732,776
24,401,347
(10,653,341)
27,986,875
48,568,024
1,402,948
291,546
1,694,494
1,382,080
88,093
758,748
9,629
369,207
60,422
20,580
14,228
134,463
229,693
92,787
761,467
21,085
1,796,186
1,062,566
3,734,091
6,571,541
374,368
615,681
584,893
1,574,942
26,893,843
10,985
503,008
2,054,578
12,653,621
42,116,035
Business-type
Activities
5,791,934
445,052
26,491
133,377
946,823
247,691
1,576,329
582,135
1,115,885
18,283,405
(11,656,721)
10,148,724
17,492,401
561,864
127,898
689,762
64,989
11,972
32,635
38,320
16,064
82,322
58,987
157,373
64,258
3,045,864
787,965
425,544
4,323,631
4,628,920
246,573
256,586
503,159
7,020,538
6,029,546
13,050,084
Total
24,063,790
10,985
1,869,580
105,539
118,722
133,377
1,131,342
491,491
275,672
78,015
(43,849)
2,887,526
2,936,720
9,778,164
1,848,661
42,684,752
(22,310,062)
38,135,599
66,060,425
1,964,812
419,444
2,384,256
1,447,069
100,065
791,383
47,949
369,207
76,486
102,902
14,228
193,450
387,066
157,045
3,807,331
21,085
2,584,151
1,488,110
8,057,722
11,200,461
374,368
862,254
841,479
2,078,101
33,914,381
10,985
503,008
2,054,578
18,683,167
55,166,119
CITY OF BUELLTON
STATEMENT OF ACTIVITIES
For the Fiscal Year Ended June 30, 2024
Governmental activities:
General government
Community development
Culture 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
2,730,898
1,568,514
994,177
3,005,815
2,550,373
20,597
10,870,374
2,153,551
1,879,249
4,032,800
14,903,174
General revenues:
Taxes:
Property taxes
Sales and use taxes
Transient occupancy tax
Franchise taxes
Other taxes
Fines and forfeitures
Investment income
Other general revenues
Transfers
$
$
Charges for
Services
156,612
192,645
349,257
2,628,439
1,235,761
3,864,200
4,213,457
Total general revenues and transfers
Change in net position
Net position, beginning of fiscal year
Net position, end of fiscal year
The notes to basic financial statements are an integral part of this statement. 26 Program Revenues
$
$
Operating
Contributions
and Grants
6,304
496,491
186,159
2,319,864
3,008,818
3,008,818
$
$
Capital
Contributions
and Grants
22,785
59,536
82,321
82,321
$
$
Net (Expenses) Revenue and Changes in Net Position
Governmental
Activities
(2,567,982)
(1,072,023)
(801,532)
(2,819,656)
(230,509)
(20,597)
(7,512,299)
(7,512,299)
1,954,402
3,588,858
3,908,296
398,730
32,060
13,041
669,322
37,570
(751,640)
9,850,639
2,338,340
39,777,695
42,116,035
$
$
Busi ness-type
Activities
27 497,673
(583,952)
(86,279)
(86,279)
193,571
751,640
945,211
858,932
12,191,152
13,050,084
$
$
Total
(2,567,982)
(1,072,023)
(801,532)
(2,819,656)
(230,509)
(20,597)
(7,512,299)
497,673
(583,952)
(86,279)
(7,598,578)
1,954,402
3,588,858
3,908,296
398,730
32,060
13,041
862,893
37,570
10,795,850
3,197,272
51,968,847
55,166,119
FUND FINANCIAL STATEMENTS
Fund
Governmental Funds:
General Fund
Housing Fund
Capital Improvement Project Fund
MAJOR FUNDS
Description
Primary operating fund of the City; accounts for all activities except those legally or administratively required to be accounted for in other funds.
28 Accounts for funds used to maintain the City's supply of affordable housing.
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, 2024
Capital
Improvement Other
General Housing Project Governmental
Fund Fund Fund Funds Totals
ASSETS
Cash and investments $ 15,292A84 $ llA68 $ 761A49 $ 2,206A55 18,271,856 Cash and investments - restricted 10,985 10,985
Accounts receivable 1,249,044 175A84 1,424,528
Interest receivable 67,162 49 11,837 79,048
Lease receivable 394,394 394,394
Due from other funds 135,807 135,807
Note receivable 491,491 491,491
Prepaid items 184,519 184,519
Total assets $ 17,334,395 $ 503,008 $ 761A49 $ 2,393,776 $ 20,992,628
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND FUND BALANCES
Liabilities:
Accounts payable $ 582,016 $ $ 761A49 $ 38,615 $ 1,382,080 Accrued wages and benefits 88,093 88,093
Deposits 758,748 758,748
Unearned revenue 102,034 267,173 369,207
Due to otherfunds 135,807 135,807
Total liabilities 1,530,891 761A49 441,595 2,733,935
Deferred Inflows of Resources:
Unavailable revenue 491A91 491,491
Leases 374,368 374,368
Total deferred inflows of resources 374,368 491A91 865,859 Fund Balances:
Nonspendable:
Prepaid items 184,519 184,519
Leases 20,026 20,026
Restricted:
FSA 10,985 10,985
Housing 11,517 11,517
Streets, roads, and transportation 2,054,578 2,054,578
Unassigned 15,213,606 (102,397) 15,111,209
Total fund balances 15,429,136 11,517 1,952,181 17,392,834 Total liabilities, deferred inflows of
resources, and fund balances $ 17,334,395 $ 503,008 $ 761,449 $ 2,393,776 $ 20,992,628 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, 2024
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
$ 38,330,378
(10,653,341)
78,015
(43,849)
In governmental funds, certain receivables are deferred because they do not meet current financial obligations. However, in government-wide statement of activities, they are recognized in the period that they are incurred.
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
OPEB liability
Net penSion liability
$
Total
In governmental funds, deferred outflows and inflows of resources relating to 153,209
782,047
35,313
1,930,649
1,062,566
pensions and OPEB 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 OPEB are reported.
Deferred outflows of resources relating:
to pensions
to OPEB
Deferred inflows of resources relating:
to pensions
to OPEB
Total net position - governmental activities
$ 1,402,948
291,546
(615,681)
(584,893)
The notes to basic financial statements are an integral part of this statement. 30 $
27,711,203
491,491
$
CITY OF BUELLTON
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES For the Fiscal Year Ended June 30, 2024
Capital
Improvement Nonmajor
General Housing Project Governmental
Fund Fund Fund Funds Totals
Revenues:
Taxes $ 9,882,346 $ $ 9,882,346
Licenses, permits, and fees 13,313 210 13,523
I ntergovern mental 927,814 1,575,990 2,503,804
Charges for services 348,929 328 349,257
Fines and forfeitures 13,041 13,041
Use of money and property 580,623 6,199 82,500 669,322
Other 37,570 37,570
Total revenues 11,803,636 6,527 1,658,700 13,468,863
Expenditures:
Current:
General government 2,440,928 2,440,928
Community development 664,624 491,491 1,156,115
Cultural and leisure 821,741 821,741
Public safety 3,002,575 3,002,575
Public works 1,908,268 163,178 2,071,446
Capital outlay 12,416 2,010,668 2,023,084
Debt Service:
Principal 34,964 34,964
Interest 20,846 20,846
Total expenditures 8,906,362 491,491 2,010,668 163,178 11,571,699 Excess of revenues over (under) expenditures 2,897,274 (484,964) (2,010,668) 1,495,522 1,897,164 Other financing sources (uses):
Lease liabilities issued 7,136 7,136
Transfers in 2,010,668 75,300 2,085,968
Transfers out (1,452,341) (1,385,267) (2,837,608)
Total other financing sources (uses) (1,445,205) 2,010,668 (1,309,967) (744,504) Net change in fund balances 1,452,069 (484,964) 185,555 1,152,660 Fund balances -July 1 13,977,067 496,481 1,766,626 16,240,174 Fund balances -June 30 $ 15,429,136 $ 11,517 1,952,181 17,392,834 The notes to basic financial statements are an integral part of this 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
For the Fiscal Year Ended June 30, 2024
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 $2,015,948 was more than depreciation expense ($749,869).
In governmental funds, issuance and repayments of long-term receivables are reported as expenditures or revenues respectively. In government-wide statements, these activities are reported as increases or decreases in assets. A note receivable was issued for $491,491 this year.
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 GASB Statement No. 87 of $7,136 is less than amortized expense of $(16,754).
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 $27,173.
In governmental funds, OPEB costs are recognized when employer contributions are made.
In the statement of activities, OPEB costs are recognized on the accrual basis. This fiscal year, the difference between accrual-basis OPEB 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.
New lease payable contract
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 $ (7,136)
16,715
$
$
1,152,660
1,266,079
491,491
(9,618)
249
(27,173)
(354,918)
18,249
(208,258)
9,579
2,338,340
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, 2024
Water Wastewater
Fund Fund Totals
ASSETS
Current assets:
Cash and investments $ 4,649,831 $ 1,142,103 $ 5,791,934 Accounts receivable, net 260,265 184,787 445,052
Interest receivable 20,997 5,494 26,491
Inventory 133,377 133,377
Prepaid items 894,397 52,426 946,823
Total current assets 5,958,867 1,384,810 7,343,677
Capital assets:
Land 247,691 247,691
Construction in progress 1,576,329 1,576,329
Buildings and improvements 582,135 582,135
Equipment 435,002 680,883 1,115,885
Infrastructure 9,649,402 8,634,003 18,283,405
12,490,559 9,314,886 21,805,445
Less accumulated depreciation (5,958,083) (5,698,638) (11,656,721) Total capital assets (net of accumulated depreciation) 6,532,476 3,616,248 10,148,724 Total assets 12,491,343 5,001,058 17,492,401
DEFERRED OUTFLOWS OF RESOURCES
Deferred pension 236,437 325,427 561,864
Deferred OPEB 52,945 74,953 127,898
Total deferred outflows of resources 289,382 400,380 689,762
LIABILITIES
Current liabilities:
Accounts payable 36,101 28,888 64,989
Accrued wages and benefits 5,001 6,971 11,972
DepOSits 32,635 32,635
Interest payable 23,471 14,849 38,320
Compensated absences, current 9,720 6,344 16,064
Note payable - direct borrowing, current 50,422 31,900 82,322 OPEB liability, current 34,569 24,418 58,987
Total current liabilities 191,919 113,370 305,289
Noncurrent liabilities:
Note payable - direct borrowing, noncurrent 1,865,592 1,180,272 3,045,864 Compensated absences 22,001 42,257 64,258
OPEB liability 316,036 471,929 787,965
Net pension liability 179,072 246,472 425,544
Total noncurrent liabilities 2,382,701 1,940,930 4,323,631 Total liabilities 2,574,620 2,054,300 4,628,920
DEFERRED INFlOWS OF RESOURCES
Deferred pension 103,760 142,813 246,573
Deferred OPEB 106,217 150,369 256,586
Total deferred inflows of resources 209,977 293,182 503,159
NET POSITION
Net investment in capital assets 4,616,462 2,404,076 7,020,538 Unrestricted 5,379,666 649,880 6,029,546
Total net position $ 9,996,128 $ 3,053,956 $ 13,050,084 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, 2024
Water Wastewater
Fund Fund Totals
Operating Revenues:
Charges for services $ 2,624,593 $ 1,235,761 $ 3,860,354 Other operating revenues 3,846 3,846
Total operating revenues 2,628,439 1,235,761 3,864,200
Operating Expenses:
Personnel services 426,006 768,381 1,194,387
Operations and maintenance 1,414,325 884,174 2,298,499
Depreciation 266,212 196,954 463,166
Total operating expenses 2,106,543 1,849,509 3,956,052
Operating income (loss) 521,896 (613,748) (91,852)
Non-Operating Revenues (Expenses):
Investment income 148,721 44,850 193,571
Interest expense (47,008) (29,740) (76,748)
Total non-operating revenues (expenses) 101,713 15,110 116,823 Income (loss) before transfers and capital contributions 623,609 (598,638) 24,971 Capital Contributions and Transfers
Capital impact fees 22,785 59,536 82,321
Transfers in 688,144 63,496 751,640
Total transfers and capital contributions 710,929 123,032 833,961 Change in net position 1,334,538 (475,606) 858,932
Net position, July 1 8,661,590 3,529,562 12,191,152
Net position, June 30 $ 9,996,128 $ 3,053,956 $ 13,050,084 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, 2024
Water Wastewater
Fund Fund Totals
Cash Flows From Operating Activities:
Receipts from customers $ 2,584,395 $ 1,209,081 $ 3,793,476 Payments to suppliers (1,446,766) (931,792) (2,378,558) Payments to employees (371,430) (525,492) (896,922)
Net cash provided (used) by operating activities 766,199 (248,203) 517,996 Cash Flows From Capital and Related Financing Activities:
Acquisition of capital assets (1,554,276) (438,456) (1,992,732) Note principal payments (44,712) (28,287) (72,999)
Interest payments (48,037) (30,391) (78,428)
Capital impact fees 22,785 59,536 82,321
Net cash used by capital and related
financing activities (1,624,240) (437,598) (2,061,838)
Cash Flows From Non-Capital Financing Activities:
Transfers 688,144 63,496 751,640
Net cash provided by non-capital financing
activities 688,144 63,496 751,640
Cash Flows From Investing Activities:
Investment income 142,049 44,523 186,572
Net cash provided by investing activities 142,049 44,523 186,572 Net decrease in cash and cash equivalents (27,848) (577,782) (605,630) Cash and cash equivalents - July 1 4,677,679 1,719,885 6,397,564 Cash and cash equivalents - June 30 $ 4,649,831 $ 1,142,103 $ 5,791,934 Reconciliation of operating income to net cash provided (used) by operating activities:
Operating income (loss) $ 521,896 $ (613,748) $ (91,852) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities:
Depreciation expense 266,212 196,954 463,166
Change in assets, deferred outflows of resources, liabilities, and deferred inflows of resources:
Receivables, net (46,744) (26,680) (73,424)
Prepaid expenses (50,322) 3,265 (47,057)
Inventories 8,539 8,539
Accounts and other payables 9,342 (50,883) (41,541)
Accrued wages and benefits 159 2,129 2,288
Deposits 2,700 2,700
Compensated absences 4,553 9,850 14,403
OPEB liability (52,210) 89,108 36,898
Deferred outflows of resources 92,967 (17,152) 75,815
Net pension liability (118,400) (51,O17) (169,417)
Deferred inflows of resources 127,507 209,971 337,478
Net cash provided (used) by operating activities $ 766,199 $ (248,203) $ 517,996 The notes to basic financial statements are an integral part of this statement. 36
CITY OF BUELLTON
INDEX TO NOTES TO THE FINANCIAL STATEMENTS
For the year ended June 30} 2024
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) ...................................................................................................................... 59 Note 12 - Contingencies and Commitments ........................................................................................................................................... 62 Note 13 - Joint Operating Agreements ................................................................................................................................................... 62 Note 14 - Deficit Fund Balance ............................................................................................................................................................... 62 37
CITY OF BUELLTON
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
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 of the 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.
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 non-exchange 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 fund financial statements provide information about the City's funds. 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 nonmajor 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 resourcesl/ 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 30,2024
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 ofthe 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:
General 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.
Housing Fund - Accounts for funds used to maintain the City's supply of affordable housing.
Capital 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 3D, 2024
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 currentfinancial 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 long-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, 2024
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 fund 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 fiscal 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, rather than 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 for the 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, 2024
NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) J. 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
Infrastructure
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 of the 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, are reported as debt service expenditures. Proprietary Fund Financial Statements use the same principles as those used in the Government-Wide Financial Statements. 42
CITY OF BUELLTON
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 3D, 2024
NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) M. Compensated Absences
Government-Wide Financial Statements
For governmental and business-type activities, compensated absences are recorded as incurred and the related expenses and liabilities are reported in the appropriate activity.
Fund Financial Statements
In compliance with Governmental Accounting Standards Board Statement No. 16, the City has established a liability for accrued vacation in relevant funds. For governmental type funds, the current liability appears in the respective funds. All vacation paid is accrued when incurred in the government-wide and proprietary funds financial statements. This liability is set up for the current employees at the current rates of pay. Each fiscal year, an adjustment to the liability is made based on pay rate changes and adjustments for the current portion. The General Fund is primarily responsible for the repayment of the governmental portion of compensated absences. Accumulated employee sick leave benefits are not recognized as liabilities ofthe City.
The City's policy is to record sick leave as an operating expense in the period taken since such benefits do not vest nor is payment probable; however, unused sick leave is added to the creditable service period for calculation of retirement benefits when the employee retires.
N. Unearned Revenue
Unearned revenue arises when assets are received before revenue recognition criteria have been satisfied.
Grants and entitlements received before eligibility requirements are met are recorded as unearned revenue.
O. Deferred Outflows and Inflows of Resources
Pursuantto GASB Statement No. 63, "Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position," and GASB Statement No. 65, "Items Previously Reported as Assets and Liabilities/' the City recognizes deferred outflows and inflows of resources.
In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred outflows of resources. A deferred outflow of resources represents a consumption of net assets by the government that applies to future periods. The City has two items that qualify for reporting in this category; refer to Note 10 and Note 11 for detailed listing of the deferred outflows of resources the City has reported.
In addition to liabilities, the Statement of Net Position and the Governmental Funds - Balance Sheet will sometimes report a separate section for deferred inflows of resources. A deferred inflow of resources is an acquisition of net assets by the City that applies to a future periods. The City has three items that qualify for reporting in this category; refer to Notes 5, 10, and 11 for detailed listing of the deferred inflows of resources the City has reported.
P. Pensions
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City of Buellton's California Public Employee's Retirement System (CaIPERS) plans (Plans) and additions to/deductions from the Plans' fiduciary net position have been determined on the same basis as they are reported by CaIPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. 43
CITY OF BUELLTON
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Q. Other Postemployment Benefits (OPE B)
For purposes of measuring the net OPEB liability and deferred outflows/inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position ofthe City's plan (OPEB Plan) and additions to/deductions from the Plan's fiduciary net position have been determined on the same basis. For this purpose, benefit payments are recognized when due and payable in accordance with the benefit terms.
Investments are reported at fair value.
R. Fund Balances
Fund balances of the governmental funds are classified as follows:
Nonspendable Fund Balance - represents amounts that cannot be spent because they are either not in spendable form (such as inventory or prepaid insurance) or are legally required to remain intact (such as notes receivable or the lease receivable in excess of the deferred inflow of resources for the lease receivable).
Restricted Fund Balance - represents amounts that are constrained by external parties, constitutional provisions or enabling legislation.
Committed Fund Balance - represents amounts that can only be used for a specific purpose because of a formal action by the City's governing board. Committed amounts cannot be used for any other purpose unless the governing board removes those constraints by taking the same type offormal action. Committed fund balance amounts may be used for other purposes with appropriate due process by the governing board.
Commitments are typically done through adoption and amendment of the budget. Committed fund balance amounts differ from restricted balances in that the constraints on their use do not come from outside parties, constitutional provisions, or enabling legislation.
Assigned Fund Balance - represents amounts that the City intends to use for a specific purpose, but that do not meet the criteria to be classified as restricted or committed. Intent may be stipulated by the governing board or by an official or body to which the governing board delegates the authority. Specific amounts that are not restricted or committed in a special revenue, capital projects, debt service, or permanent fund are assigned for purposes in accordance with the nature of their fund type or the fund's primary purpose.
Assignments within the general fund convey that the intended use of those amounts is for a specific purpose that is narrower than the general purpose of the City.
Unassigned Fund Balance - represents amounts which are unconstrained in that they may be spent for any purpose. Only the general fund reports a positive unassigned fund balance. Other governmental funds might report a negative balance in this classification because of overspending for specific purposes for which amounts had been restricted, committed or assigned.
When an expenditure is incurred for a purpose for which both restricted and unrestricted fund balance is available, the City considers restricted funds to have been spent first. When an expenditure is incurred for which committed, assigned, or unassigned fund balances are available, the City considers amounts to have been spent first out of committed funds, then assigned funds, and finally unassigned funds.
S. Net Position
GASB Statement No. 63 requires that the difference between assets added to the deferred outflows of resources, and liabilities added to the deferred inflows of resources, be reported as net position. Net position is classified as either net investment in capital assets, restricted, or unrestricted. 44
CITY OF BUEllTON
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) S. Net Position (Continued)
Net position that is net investment in capital assets, consists of capital assets, net of accumulated depreciation, and reduced by the outstanding principal of related debt. Restricted net position is the portion of net position that has external constraints placed on it by creditors, grantors, contributors, laws, or regulations of other governments, or through constitutional provisions or enabling legislations. Unrestricted net position consists of net position that does not meet the definition of net investment in capital assets or restricted net position.
T. Interfund Balances/Internal Balances
Advances to and advances from other funds represent interfund loans in the fund financial statements.
Advances between funds are offset by a fund liability or by deferred revenue in the applicable governmental funds to indicate that they are not expendable available financial resources. Any unpaid interest due to lack of funds in the borrowing fund increases the principal owed and is reported in the lending fund as deferred revenue. All other outstanding balances between funds are reported as due to and due from other funds.
These are generally repaid within the following fiscal year. Any residual balances outstanding between the governmental activities and business-type activities are reported in the Government-Wide Financial Statements as "internal balances."
U. Budgetary Accounting
The City Council establishes budgets for the General Fund and all Special Revenue Funds. Budgetary control is legally maintained at the fund level for these funds. Department heads submit budget requests to the City Manager. The City Manager prepares an estimate of revenues and prepares recommendations for the next year's budget. The preliminary budget mayor may not be amended by the City Council and is adopted by resolution by the City Council on or before June 30 in accordance with the municipal code. The City Council may amend the budget by motion during the fiscal year. Only the Council can authorize transfers between funds and approve inter-fund loans. The City Manager is authorized to transfer budgeted amounts within a fund without formal council action or approval. The City Manager is authorized to increase expenditures in relation to revenues in funds receiving assigned revenues without approval by the City Council.
Expenditures may not legally exceed appropriations at the fund level, which is the legal level of control.
Supplemental appropriations, which increase appropriations, may be made during the fiscal year. There were no material supplemental appropriations made for the fiscal year ended June 30,2024. Budget information is presented for the General and budgeted Special Revenue Funds in the fund financial statements. The budget information is presented on a basis consistent with generally accepted accounting principles. Appropriations, except open project appropriations, and unexpended grant appropriations, lapse at the end of each fiscal year.
Appropriations lapse at the end of the fiscal year and then are re-budgeted for the coming year. Under Article XIII B of the California Constitution (the Gann Spending Limitation Initiative), the City is restricted as to the amount of annual appropriations from the proceeds of taxes, and if proceeds of taxes exceed allowed appropriations, the excess must either be refunded to the State Controller, returned to the taxpayers through revised tax rates or revised fees schedules, or an excess in one year may be offset against a deficit in the following year. For the fiscal year ended June 3D, 2024, based on the calculations by City Management, proceeds of taxes did not exceed the appropriations limit. Budgeted appropriations for the various governmental funds become effective each July 1.
45
CITY OF BUEllTON
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) V. Future Accounting Pronouncements
GASB Statements listed below will be implemented in future financial statements:
Statement No. 101 "Compensated Absences"
Statement No. 102 "Certain Risk Disclosures"
The provisions of this statement are effective
for fiscal years beginning after December 15, 2023.
The provisions of this statement are effective for
fiscal years beginning after June 15, 2024.
Statement No. 103 "Financial Reporting Model Improvements The provisions of this statement are effective for fiscal years beginning after June 15, 2025.
Statement No. 104 "Disclosure of Certain Capital Assets" NOTE 2 - CASH AND INVESTMENTS
The provisions of this statement are effective for
fiscal years beginning after June 15, 2025.
The composition of cash and investments as of June 30, 2024, is as follows:
Cash on hand
Deposits with financial institutions
Investments
Total cash and investments
$ 700
12,023,510
12,050,565
$ 24,074,775
Cash and investments are classified in the financial statements as shown below, based on whether or not their use is restricted under the terms of the City's debt instruments or Agency's agreements:
Statement of Net Position:
Cash and investments
Restricted cash
Total cash and investments
$ 24,063,790
10,985
$ 24,074,775
Governmental Accounting Standards Board (GASB) Statement No. 72, {(Fair Value Measurements and Application," provides the framework for measuring fair value. The framework categorizes a fair value hierarchy that is based on the valuation inputs used to measure the fair value of the asset. Levell inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The City has recurring fair value measurements as of June 30, 2024 as shown below:
I nvestments by fa i r va I ue
Debt securities:
Negotiable certificates of deposit
U.S. Treasury securities
Tota I investments meas ured at fa i r va I ue
Investments measured at amortized cost:
LAIF
Money ma rket funds
Tota I investments
$
$
Total
1,868,112
1,049,953
2,918,065
9,118,547
13,953
12,050,565
46 Fair Value Measurement Using
Quoted Prices in Significant Other Si gnifi ca nt
Active Markets for Observable Unobserva bl e
Identical Assets Inputs Inputs
(Levell) (Level 2) (Level 3)
$ 1,868,112 $ $
1,049,953
$ 2,918,065 $ $
CITY OF BUEllTON
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
NOTE 2 - CASH AND INVESTMENTS (Continued)
A. Investments Authorized by the California Government Code and the City's Investment Policy B.
The table below identifies the investment types that are authorized for the City by the California Government Code. The table also identifies certain provisions of the California Government Code that address interest rate risk, credit risk, and concentration of credit risk.
Maximum Maximum
Authorized Maximum Percentage Investment
Investment TYQe Maturity of Portfolio in One Issuer
U.S. Treasury Obligations 5 years None None
U.S. Agency Securities 5 years None None
Bankers' Acceptance 180 days 40% 30%
Commercial Paper 270 days 15% 10%
Negotiable Certificates of Deposit 5 years 30% None
Repurchase Agreements 1 year None None
Reverse Repurchase Agreements 92 days 20% None
Money Market Mutual Funds N/A 20% 10%
Local Agency Investment Fund (LAIF) N/A None $75,000,000 Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer-term investments, and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flows and liquidity needed for operations.
Information about the sensitivity of the fair values of the City's investments to market interest rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity:
Remaining Maturity (in Months)
Carryi ng 12 Months 13-24 25-60 More than
I nvestment Type Amount Or Less Months Months 60 Months LAIF $ 9,118,547 $ 9,118,547 $ $ $
Negotiable certificates of deposit 1,868,112 391,649 114,875 1,361,588 U.S. Treasury securities 1,049,953 1,049,953
Money market funds 13,953 13,953
Total $ 12,050,565 $ 10,574,102 $ 114,875 $ 1,361,588 $ C. Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by the California Government Code, and the actual rating as of fiscal year end for each investment type.
I nvestment Type
LAIF
Negotiable certificates of deposit
U.S. Treasury securities
Money ma rket funds
Total
$
$
Carrying
Amount
9,118,547
1,868,112
1,049,953
13,953
12,050,565
Minimum
Legal
Rati ng
N/A
N/A
N/A
N/A
47 Exempt
From Rating as of Fiscal Year End
Disclosure AM Not Rated
$ $ $ 9,118,547
1,868,112
1,049,953
13,953
$ $ - $ 12,050,565
CITY OF BUELLTON
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30} 2024
NOTE 2 - CASH AND INVESTMENTS (Continued)
D. Concentration of Credit Risk
The investment policy of the City contains no limitations on the amount that can be invested in anyone issuer beyond that stipulated by the California Government Code. There are no investments in anyone issuer that represents 5% or more of the total City's investments.
E. Custodial Credit Risk
Custodial credit risk for deposits is the risk that} in the event ofthe failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The California Government Code and the City's investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by State or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under State law (unless so waived by the governmental unit). The fair value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure the City's deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.
None of the City}s deposits with financial institutions in excess of the Federal Depository Insurance Corporation's limits were held in uncollateralized accounts.
The custodial credit risk for investments is the risk that} in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City's investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for investments. With respect to investments, custodial credit risk generally applies only to direct investments in marketable securities. Custodial credit risk does not apply to a local government's indirect investment in securities through the use of mutual funds or governmental investment pools (such as LAIF).
F. Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City's investment in this pool is reported in the accompanying basic financial statements at the amounts based upon the City's pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF} which are recorded on an amortized cost basis. 48
CITY OF BUELLTON
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
NOTE 3 - CAPITAL ASSETS
Capital assets activity for the fiscal year ended June 30, 2024, was as follows:
Balance Deletions and Balance
July 1,2023 Additions Transfers June 30,2024
Governmental Activities
Nondepreciable capital assets:
Land $ 2,639,835 $ $ $ 2,639,835
Construction in progress 319,810 1,062,966 (22,385) 1,360,391 Total nondepreciable capital assets $ 2,959,645 $ 1,062,966 $ (22,385) $ 4,000,226 Depreciable capital assets:
Buildings and improvements $ 8,225,942 $ 947,702 $ 22,385 $ 9,196,029 Property and equipment 730,716 5,280 (3,220) 732,776
Infrastructure 24,401,347 24,401,347
Total depreciable capital assets 33,358,005 952,982 19,165 34,330,152 Less accumulated depreciation
Buildings and improvements 1,893,136 204,708 2,097,844
Property and equipment 694,315 13,192 3,220 704,287
Infrastructure 7,319,241 531,969 7,851,210
Total accumulated depreciation 9,906,692 749,869 3,220 10,653,341 Net depreciable capital assets $ 23,451,313 $ 203,113 $ 22,385 $ 23,676,811 Net capital assets $ 26,410,958 $ 1,266,079 $ - $ 27,677,037 Balance Deletions and Balance
July 1, 2023 Additions Transfers June 30, 2024
Business-Type Activities
Nondepreciable capital assets:
Land $ 247,691 $ $ $ 247,691
Construction in progress 349,573 1,480,827 (254,071) 1,576,329 Total nondepreciable capital assets $ 597,264 $ 1,480,827 $ (254,071) $ 1,824,020 Depreciable capital assets:
Buildings and improvements $ 582,135 $ $ $ 582,135
Property and equipment 861,814 254,071 1,115,885
Infrastructure 17,771,500 511,905 18,283,405
Total depreCiable capital assets 19,215,449 511,905 254,071 19,981,425 Less accumulated depreciation
Buildings and improvements 567,610 1,401 569,011
Property and equipment 734,517 5,262 739,779
Infrastructure 9,891,428 456,503 10,347,931
Total accumulated depreciation 11,193,555 463,166 11,656,721 Net depreciable capital assets $ 8,021,894 $ 48,739 $ 254,071 $ 8,324,704 Net capital assets $ 8,619,158 $ 1,529,566 $ $ 10,148,724 Depreciation expense was charged to function and programs based on their usage of the related assets. The amounts allocated to each function or program as shown on the following page:
49
CITY OF BUELLTON
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
NOTE 3 - CAPITAL ASSETS (Continued)
Governmental Activities:
General government
Community development
Cultural and leisure
Public safety
Public works
Total depreciation expense-governmental activities
Business-type Activities:
Water
Wastewater
Total depreciation expense-business-type activities
NOTE 4 - RIGHT TO USE LEASE ASSET
Balance
July 1,2023
Right to use leased assets
Leased equipment $ 70,879 $
Total right to use leased assets 70,879
Less accumulated amortization for:
Leased equipment 27,095
Total accumulated amortization 27,095
Right to use leased assets, net $ 43,784 $
NOTE 5 -LEASE RECEIVABLE
$
$
$
$
Additions Reductions
7,136 $
7,136
16,754
16,754
(9,618) $
58,791
276,662
75,160
3,240
336,016
749,869
266,212
196,954
463,166
Balance
June 3D, 2024
$ 78,015
78,015
43,849
43,849
$ 34,166
In July 2009, the City entered into a lease for the Visitor's Bureau. Under the lease, the Buellton Business Association/Chamber of Commerce agreed to pay the City $1,350 per month through June 2024. The monthly lease payments are waived by the City in exchange for services provided. The lease receivable is measured as the present value of the future minimum rent payments expected to be received during the lease term at a discount rate of 3%, which is the implicit rate used for the agreement. In fiscal year 2024, the City recognized $15,513 of lease revenue and $222 of interest revenue under the lease.
In July 2015, the City entered into a lease for the Post Office. Under the lease, the United States Postal Service agreed to pay the City $5,000 per month through June 2026. The lease receivable is measured as the present value of the future minimum rent payments expected to be received during the lease term at a discount rate of 3% which is the implicit rate used for the agreement. In fiscal year 2024, the City recognized $55,720 of lease revenue and $4,259 of interest revenue under the lease.
In March of 2022, the City entered into a lease for 202 Dairyland Road. Under the lease, SYV Horseback Rides LLC agreed to pay the City $3,500 per month with annual3% increases on January pt of each year through March 2028. The lease receivable is measured as the present value ofthe future minimum rent payments expected to be received during the lease term at a discount rate of 3%. In fiscal year 2024, the City recognized $41,300 of lease revenue and $5,473 of interest revenue under the lease.
In March of 2022, the City entered into a lease for the Zaca Golf Course. Under the lease Mike Brown agreed to pay the City $1,250 per month through February 2027. The lease receivable is measured as the present value of the future minimum rent payments expected to be received during the lease term at a discount rate of 3% which is the implicit rate used for the agreement. In fiscal year 2024, the City recognized $13,913 of lease revenue and $1,341 of interest revenue under the lease.
50
CITY OF BUELLTON
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
NOTE 5 -LEASE RECEIVABLE (Continued)
In April of 2022, the City entered into a lease for the 960 square feet of property at the Buellton Reservoir. Under the lease New Cingular Wireless PCS, LLC (AT&T) agreed to pay the City $2,500 per month starting May 1, 2022 through April 2027. The lease receivable is measured as the present value of the future minimum rent payments expected to be received during the lease term at a discount rate of 3% which is the implicit rate used for the agreement. In fiscal year 2024, the City recognized $27,896 of lease revenue and $2,819 of interest revenue under the lease.
NOTE 6 -LONG-TERM LIABILITIES
A. Compensated Absences
Governmental Accounting Standards Board Statement No. 16 identifies certain items that should be accrued as a liability as benefits are earned by employees, but only to the extent it is probable that the employer will compensate the employees for the benefits through cash payments conditioned on the employee's termination or retirement.
The City's employees accumulate earned but unused benefits, which can be converted to cash at termination of employment. The vested benefits payable in accordance with various collective bargaining agreements, at June 30, 2024, total $153,209 for governmental activities and $80,322 for business-type activities.
B. Notes Payable - Direct Borrowing
On December 18, 2020, the City entered into a note payable agreement with Webster Bank. The note proceeds were used to purchase equipment and install City's solar, LED lighting, and other energy improvement projects. The amount of the note was $4,147,947 and the agreement was for annual payments for 20 years at 2.45% interest. The note is secured by the equipment and in the event of a default, all remaining payments become due and the lender has the right to retake possession of the equipment. Annual lease payments are due each fiscal year starting in January 2022.
Future payments are as follows:
Fiscal Year
Ending June 30
2025
2026
2027
2028
2029
2030-2034
2035-2039
2040-2041
Total
Principal
$ 102,902
115,222
128,239
107,989
187,999
1,027,737
1,482,023
758,121
$ 3,910,232
C. Other Post-Employment Liability
$
$
Total
Interest Payments
95,801 $ 198,703
93,280 208,502
90,457 218,696
87,315 195,304
76,270 264,269
354,421 1,382,158
216,408 1,698,431
38,106 796,227
1,052,058 $ 4,962,290
In accordance with GASB Statement No. 75, the City is required to measure and report liabilities associated with OPEB. The City's estimated OPEB liability on June 30, 2024 was $2,777,601. For governmental funds, these expenses are incurred by the General Fund. See Note 11 for further detail.
D. Net Pension Liability
In accordance with GASB Statement No. 68, the City is required to measure and report liabilities associated with its pension liability. Pension expense in charged to functions and programs based on their proportionate share of total payroll cost. The City's estimated net pension liability on June 30, 2024, was $1,488,110. For governmental funds, these expenses are typically incurred by the General Fund. See Note 10 for further detail. 51
CITY OF BUELLTON
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30} 2024
NOTE 6 - LONG-TERM LIABILITIES (Continued)
E. Lease Liabilities
The City has entered into agreements to lease certain equipment. The lease agreements qualify as otherthan short-term leases under GASB Statement No. 87 and} therefore} have been recorded at the present value of the future minimum lease payments as of the date of their inception.
An agreement with MailFinance} Inc. was commenced on December 9, 2019, to lease a mail machine and inserter that requires 21 quarterly payments of $921. There are no variable payment components of the lease. The lease liability is measured at a discount rate of 3%, which is the implicit rate used for the lease agreement. As a result of the lease, the City recorded as of July 1, 2021 a right to use asset with a net book value of $1,736 at June 30, 2024. The right to use asset is discussed in more detail in Note 4.
An agreement with u.S. Bank Equipment Finance was commenced on October 20} 2020, to lease a scannerfor the Planning Department that requires 60 monthly payments of $385. There are no variable payment components of the lease. The lease liability is measured at a discount rate of 3%, which is the implicit rate used for the lease agreement. As a result of the lease, the City recorded as of July 1,2021 a right to use asset with a net book value of $5A16 at June 30, 2024. The right to use asset is discussed in more detail in Note 4.
An agreement with Coastal Copy, Inc was commenced on January 7, 2022, to lease Kyocera Copiers that requires 60 monthly payments of $740. There are no variable payment components of the lease but there is a monthly supplies and maintenance payment of $442. The lease liability is measured at a discount rate of 3%, which is the implicit rate used for the lease agreement. As a result of the lease, the City recorded a right to use asset with a net book value of $20,592 at June 30,2024. The right to use asset is discussed in more detail in Note 4.
An agreement with Coastal Copy, Inc was commenced on January 17,2024, to lease a Kyocera Copier for the Recreation Department that requires 60 monthly payments of $128.22. There are no variable payment components of the lease. The lease liability is measured at a discount rate of 3%, which is the implicit rate used for the lease agreement. As a result of the lease, the City recorded a right to use asset with a net book value of $6A22 at June 30, 2024. The right to use asset is discussed in more detail in Note 4.
Future lease payments are as follows:
Fiscal Year
Ending June 30
2025
2026
2027
2028
2029
Principal
Payments
$ 14,228
12,983
5,848
lA91
763
$ 35,313
Interest
Payments
$ 810
$
434
130
47 7
lA28
Total
$ 15,038
13A17
5,978
1,538
770
$ 36,741
NOTE 7 - CHANGES IN LONG-TERM LIABILITIES
The following is a summary of long-term liability activities for the fiscal year ended June 30, 2024:
Balance Balance Due Within
July 1, 2023 Additions Deletions June 30,2024 One Year
Governmental activities:
Compensated absences $ 126,036 $ 73,499 $ 46,326 $ 153,209 $ 60,422 Note payable - direct borrowing 800,296 18,249 782,047 20,580 lease liabilities 44,892 7,136 16,715 35,313 14,228
OPEB liability 1,922,064 8,585 1,930,649 134,463
Net pension liability 2,293,285 1,230,719 1,062,566
Total $ 5,186,573 $ 89,220 $ 1,312,009 $ 3,963,784 $ 229,693 52
CITY OF BUEllTON
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2024
NOTE 7 - CHANGES IN LONG-TERM LIABILITIES (Continued)
Balance
July 1, 2023 Additions
Business-type activities:
Compensated absences $ 65,919 $ 38,533
Note payable - direct borrowing 3,201,185
OPEB liability 810,054 36,898
Net pension liability 594,961
Total $ 4,672,119 $ 75,431
NOTE 8 -INTERFUND TRANSACTIONS
Balance Due Within
Deletions June 30, 2024 One Year
$ 24,130 $ 80,322 $ 16,064
72,999 3,128,186 82,322
846,952 58,987
169,417 425,544
$ 266,546 $ 4,481,004 $ 157,373
Interfund transactions are reported as either loans, services provided, reimbursements, or transfers. Loans are reported as interfund receivables and payables, as appropriate, and are subject to elimination upon consolidation.
Services provided, deemed to be at market or near market rates, are treated as revenues and expenditures/expenses.
Reimbursements occur when one fund incurs a cost, charges the appropriate benefiting fund, and reduces its related cost as a reimbursement. All other interfund transactions are treated as transfers. Transfers among governmental funds are netted as part of the reconciliation to the government-wide financial statements.
A. Due From/To Other Funds
Due to and from balances result from the time lag between the dates that interfund goods and services are provided or reimbursable expenditures occur, transactions are recorded in the accounting system, and payments between funds are made.
Individual fund interfund receivable and payable balances at June 30, 2024, are as follows:
Fund Due From Due To
Major Governmental Funds:
General Fund $ 135,807 $
Nonmajor Governmental Funds:
Transportation Planning Special Revenue Fund 135,807
Total $ 135,807 ========= $ 135,807
B. Interfund Transfers
Interfund transfers consist of transfers from funds receiving revenue to funds through which the resources are to be expended.
Interfund transfers for the 2023-2024 fiscal year are as follows:
Fund Transfers In Transfers Out
Major Governmental Funds:
General Fund $ $ 1,452,341
Capital Improvement Project Fund 2,010,668
Nonmajor Governmental Funds:
ARPA 751,640
Measure A Fund 539,148
Gas Tax Fund 94,469
Local Transportation Fund 72,000 10
Transportation Planning Special Revenue Fund 3,300
Major Proprietary Funds:
Water Fund 688,144
Wastewater Fund 63,496
$ 2,837,608 $ 2,837,608
53
CITY OF BUELLTON
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
NOTE 9 - RISK MANAGEMENT
A. Description of Self-Insurance Pool Pursuant to Joint Powers Agreement The City of Buellton is a member of the CALIFORNIA JOINT POWERS INSURANCE AUTHORITY (Authority). The Authority is composed of 123 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The California JPIA began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine-member Executive Committee.
Each member pays an annual contribution at the beginning of the coverage period. A retrospective adjustment is then conducted annually thereafter, for coverage years 2012-13 and prior. Coverage years 2013-14 and forward are not subject to routine annual retrospective adjustment. The total funding requirement for primary self-insurance programs is based on an actuarial analysis. Costs are allocated to individual agencies based on payroll and claims history, relative to other members of the risk-sharing pool.
Primary Liability Program - Claims are pooled separately between police and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $100,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $100,000 to $500,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer. (4) Incurred costs from $500,000 to $50 million, are distributed based on the outcome of cost allocation within the first and second loss layers.
The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence.
Subsidence losses also have a $50 million per occurrence limit. The coverage structure is composed of a combination of pooled self-insurance, reinsurance, and excess insurance. Additional information concerning the coverage structure is available on the Authority's website: .!:TI!P~WlQl'!:.Qf&:N~~w..!21i:20.~}g:QQ!lliL.
B. Primary Self-Insurance Programs of the Authority
Primary Workers' Compensation Program - Claims are pooled separately between public safety (police and fire) and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $75,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $75,000 to $200,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer. (4) Incurred costs from $200,000 to statutory limits are distributed based on the outcome of cost allocation within the first and second loss layers.
For 2023-24 the Authority's pooled retention is $1 million per occurrence, with reinsurance to statutory limits under California Workers' Compensation Law. Employer's Liability losses are pooled among members to $1 million. Coverage from $1 million to $5 million is purchased through reinsurance policies, and Employer's Liability losses from $5 million to $10 million are pooled among members.
C. Purchased Insurance
Pollution Legal Liability Insurance - The City of Buellton participates in the pollution legal liability insurance program which is available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City of Buellton. Coverage is on a claims-made basis. There is a $250,000 deductible. The Authority has an aggregate limit of $20 million. 54
CITY OF BUELLTON
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
NOTE 9 - RISK MANAGEMENT (Continued)
C. Purchased Insurance (Continued)
Property Insurance - The City of Buellton participates in the all-risk property protection program of the Authority. This insurance protection is underwritten by several insurance companies. City of Bue"ton property is currently insured according to a schedule of covered property submitted by the City of Bue"ton to the Authority. City of Buellton property currently has all-risk property insurance protection in the amount of $9,089,660. There is a $10,000 deductible per occurrence except for non-emergency vehicle insurance which has a $2,500 deductible.
Earthquake and Flood Insurance - The City of Bue"ton purchases earthquake and flood insurance on a portion of its property. The earthquake insurance is part of the property protection insurance program of the Authority. City of Bue"ton property currently has earthquake protection in the amount of $7,767,673. There is a deductible of 5% per unit of value with a minimum deductible of $100,000.
Crime Insurance - The City of Buellton purchases crime insurance coverage in the amount of $1,000,000 with a $2,500 deductible. The fidelity coverage is provided through the Authority.
Special Event Tenant User Liability Insurance - The City of Bue"ton further protects against liability damages by requiring tenant users of certain property to purchase low-cost tenant user liability insurance for certain activities on agency property. The insurance premium is paid by the tenant user and is paid to the City of Buellton according to a schedule. The City of Bue"ton then pays for the insurance. The insurance is facilitated by the Authority.
D. Adequacy of Protection
During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in 2023-24.
NOTE 10 - PENSION PLAN
A. General Information about the Pension Plans
Plan Descriptions
All qualified permanent and probationary employees are eligible to participate in the Public Agency Cost-Sharing Multiple-Employer Defined Benefit Pension Plan (the Plan), administered by the California Public Employees' Retirement System (CaIPERS). The Plan's benefit provisions are established by statute. The Plan is included as a pension trust fund in the CalPERS' Annual Comprehensive Financial Report, which is available online at www.calpers.ca.gov.
The Plan consists of a miscellaneous pool and a safety pool (referred to as ({risk pools"), which are comprised of individual employer miscellaneous and safety rate plans, respectively, including those of the City of Buellton. The City of Buellton's employer rate plans in the miscellaneous risk pool include the Misce"aneous plan (Miscellaneous) and the PEPRA Miscellaneous plan (PEPRA Misc.). The City of Buellton does not have any rate plans in the safety risk pool.
Benefits Provided
The Plan provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Classic members and PEPRA Safety members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. PEPRA Miscellaneous members with five years of total service are eligible to retire at age 52 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after five years of service. The death benefit is the Basic Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees' Retirement Law. 55
CITY OF BUELLTON
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
NOTE 10 - PENSION PLAN (Continued)
A. General Information about the Pension Plans (Continued) Benefits Provided (Continued)
The Plans' provisions and benefits in effect at June 30, 2024, are summarized as shown below:
Hire Date
Benefit formula
Benefit vesting schedule
Benefit payments
Retirement age
Monthly benefits, as a % of eligible compensation
Required employee contribution rates
Required employer contribution rates
Contributions
Miscellaneous
Prior to
January 1, 2013
2%@ 55
5 years service
monthly for life
50-63
1.426% to 2.418%
7.00%
13.26% + $198,158
On or after
January 1, 2013
2%@62
5 years service
monthly for life
52-67
1.0% to 2.5%
8.25%
8.00% + 0
Section 20814(c) of the California Public Employees' Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for the Plan is determined annually on an actuarial basis as of June 30 by CaIPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.
Contributions to the pension plan from the City were $387,731 for the fiscal year ended June 30, 2024.
B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions At June 30,2024, the City reported a liability of $1,488,110 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30,2023, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2022 rolled forward using standard update procedures.
The City's proportion of the net pension liability was based on a projection of the City's long-term share of contributions to the pension plan relative to the projected contributions of all Pension Plan participants, actuarially determined. The City's proportion share of net pension liability for miscellaneous plans as of June 30,2023, and 2022 was as follows:
Proportion - June 30, 2022
Proportion - June 30, 2023
Change - Increase/(Decrease)
M isce lIaneous
0.06172%
0.02976%
-0.03196%
For the fiscal year ended June 30,2024, the City recognized pension expense of $688,846. Pension expense represents the change in the net pension liability during the measurement period, adjusted for actual contributions and the deferred recognition of changes in investment gain/loss, actuarial gain/loss, actuarial assumptions or method, and plan benefits.
56
CITY OF BUELLTON
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUN E 3D, 2024
NOTE 10 - PENSION PLAN (Continued)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
At June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Deferred Outflows Deferred Inflows of
of Resources Resources
Differences between expected and actual experience $ 76,021 $ 11,793 Changes in assumptions 89,844
Net difference between projected and actual earnings on retirement plan investments 240,938
Differences between City contributions and proportionate share of contributions 1,119,928 59,326
Adjustment due to differences in proportion 50,350 791)35 City contributions subsequent to the measurement date 387,731 $ 1,964,812 $ 862,254
Deferred outflows of resources and deferred inflows of resources above represent the unamortized portion of changes to net pension liability, to be recognized in future periods in a systematic and rational manner. $387,731 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the subsequent fiscal year ending June 30, 2025.
Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in the pension expenses as follows:
Fiscal year Ending June 30, Amount
2025 $ 233,637
2026 198,410
2027 275,867
2028 6,913
$ 714,827
57
CITY OF BUELLTON
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 3D, 2024
NOTE 10 - PENSION PLAN (Continued)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Actuarial Assumptions
The total pension liability in the June 30, 2022 actuarial valuation was determined using the following actuarial assumptions:
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Inflation
Salary Increases
Mortality
Post Retirement Benefit
Increase
Miscellaneous
June 30, 2022
June 30, 2023
Entry-Age Normal Cost Method
6.90%
2.30%
Varies by Entry Age and Service
Derived using CaIPERS' Membership
Data for all Funds (1)
The lesser of contract COLA or 2.30% until
Purchasing Power Protection Allowance floor
on purchasing power applies, 2.30% thereafter
(1) The mortality table used was developed based on CaIPERS' specific data. The rates incorporate Generational Mortality to capture ongoing mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries.
For more deta i Is, pi eas e refer to the 2021 experience study report that ca n be found on the Ca I PERS' website.
Long-term Expected Rate of Return
In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated and combined with risk estimates, are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return. The expected real rates of return by asset class are as follows:
New Strategic
Asset Class Allocation Real Return (a,b)
Global Equity - cap-weighted 30.0% 4.54%
Global Equity - non-cap-weighted 12.0% 3.84%
Private Equity 13.0% 7.28%
Treasury 5.0% 0.27%
Mortgage-backed Securiti es 5.0% 0.50%
Investment Grade Corporations 10.0% 1.56%
High Yield 5.0% 2.27%
Emerging Market Debt 5.0% 2.48%
P ri vate De bt 5.0% 3.57%
Real Assets 15.0% 3.21%
Leverage -5.0% -0.59%
Total 100.0%
(a) An expected inflation of 2.30% was used for this period. (b) Figures a re based on the 2021 Asset Li abi lity Ma nagement Study. 58