On May 31, 2023, during the Council Budget Workshop, staff presented the City Council with a proposed Pension Reserve Policy (Policy) that was supported by the City’s Finance Committee for adoption. In summary, the Policy (Attachment C) includes the following provisions:
Continue to work toward the goal of reaching 100% funded status by June 30, 2032, Flexibility for the funding timeline to be extended by the Council when deemed necessary, Focus on funding the Governmental Fund portion of the unfunded liability (not the Water, Clean Water and Wastewater Funds),
Use of the Annual Comprehensive Financial Report (ACFR) to calculate the following year’s Pension Reserve contribution,
Re-evaluate Pension Reserve contribution at Mid-Year when previous year’s final results are presented,
Establish a Section 115 Trust Fund using Pension Reserve Funds.
The Council adopted the proposed Pension Reserve Policy but deferred establishment of a 115 Trust, requesting that staff and the Pension Subcommittee return to Council at a future meeting to provide more information about the 115 Trust and basis for the recommendation to establish the trust for pension purposes.
In November 2023, staff and the Pension Subcommittee met again with PERS and PARS for an update on their respective 115 Trust programs. After meeting with both firms, staff and the Pension Subcommittee provided a presentation to the Finance Committee on January 23, 2024, recommending that the City proceed with establishing a Section 115 Trust with PARS, which was unanimously supported by the Finance Committee.
DISCUSSION/ANALYSIS
Reporting Pension Liability
The Governmental Accounting Standards Board (GASB) is an independent private-sector organization that establishes accounting and financial reporting standards for U.S. state and local governments that follow Generally Accepted Accounting Principles (GAAP). GASB Statement 68 requires that governmental employers that sponsor Defined Benefit plans recognize a net pension liability (unfunded accrued liability) on their balance sheet. This liability is the difference between the City’s total pension liability (actuarial accrued liability) and the market value of actual plan assets. The City reported this actuarial liability for the first time in its June 30, 2015, Annual Comprehensive Financial Report (ACFR) and the current unfunded liability totals $18.3 million as of June 30, 2022.
As can be seen in Chart A below, the pension liability continues to grow each year, raising concerns about the anticipated growth of the unfunded accrued liability (UAL) over time and potential impacts to the annual required contributions (Chart B). As noted on Chart A, one of the largest drivers of the increase in UAL is the underperformance of PERS target investment returns.
Based on the 7-year average actual rate of return of 6.7%, instead of target rate of 6.8%, the City’s UAL increased by $6.8 million between 2016 and 2022. Although the PERS actuarial report for June 30, 2023, are not yet available, it is anticipated that the UAL will increase again since PERS investment returns came in at 5.8%, which is 1% lower than its target return of 6.8%. 2 March 18, 2024 Item 09
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Chart A: Actuarial Pension Liability
Pension Reserve Fund
On September 3, 2013, the City Council approved the creation of a Pension Reserve Fund with the goal of fully funding the City’s UAL in 15 years, while maintaining flexibility in annual contributions to ensure funding remained available for other necessary City activities and projects.
Due to the extreme loss in revenue related to the pandemic, contributions to the Pension Reserve were deferred from April 2020 to March 2023, when revenues returned to pre-pandemic levels.
The Pension Reserve balance as of June 30, 2023, is at approximately $5 million, which is the combined total of the General Fund and Water/Wastewater Fund Pension Reserves.
Although designated for payment of the City’s pension liability, the City’s Pension Reserve funds are not legally restricted and can be used for any purpose with City Council approval. In order to formally limit use of the funds for pension purposes only, the funds must be deposited in an irrevocable trust. Funds currently held in the Pension Reserve Fund are also not allowed to be reported as a reduction to the pension liability on the balance sheet unless the funds are held in a Section 115 Trust or deposited directly to PERS.
Managing Unfunded Liabilities
As shown in Chart B below, the unfunded liability portion of the annual required pension contribution continues to grow and will impact available funding for critical operational needs and capital and special projects if not addressed. Setting up a Section 115 Trust not only secures future pension benefits for employees, but also reduces the potential of having to reduce funding of other important City activities to pay for the annual required pension liability. To reduce the net pension liability, the City’s only prior option was to send additional funds to PERS (in excess of its annual required contributions). However, there have been concerns about doing so based on PERS underperformance and the need to diversify management and oversight of the City’s pension funds outside of PERS. Establishing a Section 115 Trust would allow the City to “pre- $11.5 $11.6
$13.4 $14.2 $15.5
$10.8 $18.3
‐10%
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10%
15%
20%
25%
$‐
$10
$20
$30
$40
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FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022
Millions
Actuarial Pension Liability
Market Value of Assets Unfunded Accrued Liability Investment Returns Target Returns 3 March 18, 2024 Item 09
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fund” its PERS unfunded liability and will allow for greater local control over assets invested by a professional fund management team selected and monitored by the City.
Chart B: Annual Pension Contribution
In effort to help public agencies address and manage their pension liabilities, PERS and PARS have developed Post-Employment Benefits Trust Programs, which provide program participants the ability to pre-fund pension liabilities through an IRS reviewed program. These programs are established as multiple employer trusts so that public agencies, regardless of size, can join the program to receive the necessary economies of scale to keep administrative fees low and avoid any setup costs. To participate, funds must be set aside in an exclusive benefit, irrevocable trust that cannot be accessed by creditors or used for other purposes. If established, the trust would permit the City, under federal and state law, to invest in a more diversified array of investments to maximize returns in comparison to what the City’s investment options are if the funds were to continue to be held in the City’s Pension Reserve and invested in accordance with the City’s investment policy and restrictions on general fund investments.
Public Agency Retirement Services (PARS)
To date, 145 public agencies in California have adopted the PARS pension trust program, which includes ten public agencies in San Diego, among them being the cities of Carlsbad, Coronado, Solana Beach, and Imperial Beach. Expected benefits offered by the PARS 115 Trust include:
Investment flexibility with Section 115 Trust compared to restrictions on general fund investments (Govt. Code 53216),
Increased risk diversification of plan assets through different asset management options, City oversight and control of fund management selection, monitoring of performance and ability to modify fund management based on performance criteria, Flexibility on use of trust assets (i.e., trust assets can be accessed at any time as long as the assets are used to fund the City pension obligations and defray reasonable expenses), $‐
$0.5
$1.0
$1.5
$2.0
$2.5
FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 Millions
Annual Pension Contribution
Normal Contribution Unfunded Liability Employee Contribution 4 March 18, 2024 Item 09
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Potential for positive rating agency and investor consideration.
PARS has two investment options available for their Section 115 Trust account through PFM Asset Management (PFMAM). One option is a Full-Service Platform, which will provide a dedicated portfolio manager, investment guidance, annual meeting attendance, and creation of investment guidelines required when setting up a Section 115 Trust. The second option is their Target Index Investment Platform which has four (4) pre-established investment options. All the plan assets in the Target Index Investment Platform are combined for economies of scale, but there is no cross sharing of earnings or liabilities. Strategies are comprised of index-based, mutual funds selected for their low expense ratio.
PFMAM has provided investment management services to public agencies nationwide for more than 35 years and are focused on continually finding investment solutions for new and developing financial issues facing public agencies. PFMAM has an excellent reputation among California public agencies, and they have an existing working relationship with PARS where they serve as investment advisor for more than 500 PARS clients with more than $6 billion under management.
PFMAM has a team of extremely capable, experienced investment professionals that oversee plan investment. As a subsidiary of U.S. Bank, PFMAM investment management fees are low, while providing multiple strategy/benchmark options for the City’s investment portfolio.
California Employers’ Pension Prefunding Trust (CEPPT) Fund In comparison to PARS, PERS offers the California Employers’ Pension Prefunding Trust (CEPPT) Fund as a Section 115 Trust fund dedicated to prefunding employer contributions to defined benefit pension systems for eligible California public agencies. Since its launch in 2019, more than 75 California public employers have chosen CEPPT as their pension contribution prefunding trust fund. Based on PERS website, one (1) agency in San Diego participates in the CEEPT fund.
The CEPPT provides an uncomplicated, low-cost investment and administration program.
CEPPT offers two diversified asset allocation strategies. These strategies invest in four (4) public asset classes: Fixed Income; Global Equity; Global Public Real Estate Investment Trusts (REITs); and Treasury Inflation Protected Securities (TIPS). PERS offers participants the choice of one of two investment strategies. Projected risk levels among strategies vary depending upon the target asset class allocations. Generally, equities carry more risk than fixed income securities.
Included in this report, as Attachment D, are comparative tables that were used by the Pension Subcommittee and staff to evaluate asset class target allocations (Table A), investment returns (Table B), and administrative and management fees (Table C) for the Trust programs offered by PARS and PERS. For comparative purposes included in those tables, if available, are the data for the Public Employees’ Retirement Fund (PERF), which are the current pension assets held and managed by PERS.
Recommendation
Based on PARS positive reputation and investment management results, the ability to diversify pension reserve funds in a separate investment firm (rather than maintaining all funds in PERS), and the comparatively low management fees, staff, the City’s Finance Committee, and the Pension Subcommittee are recommending Council approval to establish a Section 115 Trust with PARS Target Index Platform and make an initial deposit of $5 million to the Trust. 5 March 18, 2024 Item 09
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NEXUS TO CITY COUNCIL GOALS AND PRIORITIES:
This item is operational in nature and is not directly related to the City Council’s list of Goals and Priorities.
FISCAL IMPACT:
Approval of staff’s recommendation will result in an initial deposit of $5 million to a Section 115 Trust. Total combined administrative, trustee and investment management fees for PARS, US Bank and PFM Asset Management start at 0.371% of assets. Investment management fees are tiered and will become lower as assets in the program increase. The current annual fee for the initial $5 million deposit, would be approximately $18,500. Funds for trust services fees are available in the approved Year 2023-24 Operating and Capital Budget. Investment/management fees for the upcoming year will be added to the Fiscal Year 2024-25 Budget Update and will be offset by the increase in investment income.
ENVIRONMENTAL IMPACT:
The proposed City Council action does not constitute a “project” under the definition set forth in California Environmental Quality Act (CEQA) Guidelines Section 15378 because it will not have a potential to result in a direct or indirect physical change in the environment and is, therefore, not subject to CEQA. No further action under CEQA is required.
ATTACHMENTS
Attachment A – Agreement for Administrative Services with Public Agency Retirement Services (PARS)
Attachment B – Resolution Approving the Adoption of the Public Agencies PostEmployment Benefits Trust Administered by Public Agency Retirement Services (PARS)
Attachment C – Pension Reserve Policy
Attachment D - Comparative Investment Plan Tables
6 March 18, 2024 Item 09
AGREEMENT FOR ADMINISTRATIVE SERVICES
This agreement (“Agreement”) is made this _____ day of _____________, 2024, between Phase II Systems, a corporation organized and existing under the laws of the State of California, doing business as Public Agency Retirement Services and PARS (hereinafter “PARS”) and the City of Del Mar (“Agency”).
WHEREAS, the Agency has adopted the PARS Public Agencies Post-Employment Benefits Trust for the purpose of pre-funding pension obligations and/or Other Post-Employment Benefits (“OPEB”) obligations (“Plan”) and is desirous of retaining PARS as Trust Administrator to the Trust, to provide administrative services.
NOW THEREFORE, the parties agree:
1. Services. PARS will provide the services pertaining to the Plan as described in the exhibit attached hereto as “Exhibit 1A” (“Services”) in a timely manner, subject to the further provisions of this Agreement.
2. Fees for Services. PARS will be compensated for performance of the Services as described in the exhibit attached hereto as “Exhibit 1B”.
3. Payment Terms. Payment for the Services will be remitted directly from Plan assets unless the Agency chooses to make payment directly to PARS. In the event that the Agency chooses to make payment directly to PARS, it shall be the responsibility of the Agency to remit payment directly to PARS based upon an invoice prepared by PARS and delivered to the Agency. If payment is not received by PARS within thirty (30) days of the invoice delivery date, the balance due shall bear interest at the rate of 1.5% per month. If payment is not received from the Agency within sixty (60) days of the invoice delivery date, payment plus accrued interest will be remitted directly from Plan assets, unless PARS has previously received written communication disputing the subject invoice that is signed by a duly authorized representative of the Agency.
4. Fees for Services Beyond Scope. Fees for services beyond those specified in this Agreement will be billed to the Agency at the rates indicated in the PARS’ standard fee schedule in effect at the time the services are provided and shall be payable as described in Section 3 of this Agreement. Before any such services are performed, PARS will provide the Agency with a detailed description of the services, terms, and applicable rates for such services. Such services, terms, and applicable rates shall be agreed upon in writing and executed by both parties.
5. Information Furnished to PARS. PARS will provide the Services contingent upon the Agency providing PARS the information specified in the exhibit attached hereto as “Exhibit 1C” (“Data”). It shall be the responsibility of the Agency to certify the accuracy, content, and completeness of the Data so that PARS may rely on such information without further audit. It shall further be the responsibility of the Agency to deliver the Data to PARS in such a manner that allows for a reasonable amount of time for the Services to be performed. Unless specified in Exhibit 1A, PARS shall be under no duty to question Data received from the Agency, to compute contributions made to the 7 March 18, 2024 Item 09
Plan, to determine or inquire whether contributions are adequate to meet and discharge liabilities under the Plan, or to determine or inquire whether contributions made to the Plan are in compliance with the Plan or applicable law. In addition, PARS shall not be liable for nonperformance of Services to the extent such nonperformance is caused by or results from erroneous and/or late delivery of Data from the Agency. In the event that the Agency fails to provide Data in a complete, accurate and timely manner and pursuant to the specifications in Exhibit 1C, PARS reserves the right, notwithstanding the further provisions of this Agreement, to terminate this Agreement upon no less than ninety (90) days written notice to the Agency.
6. Records. Throughout the duration of this Agreement, and for a period of five (5) years after termination of this Agreement, PARS shall provide duly authorized representatives of Agency access to all records and material relating to calculation of PARS’ fees under this Agreement. Such access shall include the right to inspect, audit and reproduce such records and material and to verify reports furnished in compliance with the provisions of this Agreement. All information so obtained shall be accorded confidential treatment as provided under applicable law.
7. Confidentiality. Without the Agency’s consent, PARS shall not disclose any information relating to the Plan except to duly authorized officials of the Agency, subject to applicable law, and to parties retained by PARS to perform specific services within this Agreement. The Agency shall not disclose any information relating to the Plan to individuals not employed by the Agency without the prior written consent of PARS, except as such disclosures may be required by applicable law.
8. Independent Contractor. PARS is and at all times hereunder shall be an independent contractor. As such, neither the Agency nor any of its officers, employees or agents shall have the power to control the conduct of PARS, its officers, employees, or agents, except as specifically set forth and provided for herein. PARS shall pay all wages, salaries, and other amounts due its employees in connection with this Agreement and shall be responsible for all reports and obligations respecting them, such as social security, income tax withholding, unemployment compensation, workers’ compensation, and similar matters.
9. Indemnification. PARS and Agency hereby indemnify each other and hold the other harmless, including their respective officers, directors, and employees, from any claim, loss, demand, liability, or expense, including reasonable attorneys’ fees and costs, incurred by the other as a consequence of, to the extent, PARS’ or Agency’s, as the case may be, negligent acts, errors or omissions with respect to the performance of their respective duties hereunder.
10. Compliance with Applicable Law. The Agency shall observe and comply with federal, state, and local laws in effect when this Agreement is executed, or which may come into effect during the term of this Agreement, regarding the administration of the Plan.
PARS shall observe and comply with federal, state, and local laws in effect when this Agreement is executed, or which may come into effect during the term of this Agreement, regarding Plan administrative services provided under this Agreement. 8 March 18, 2024 Item 09
11. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California. In the event any party institutes legal proceedings to enforce or interpret this Agreement, venue and jurisdiction shall be in any state court of competent jurisdiction.
12. Force Majeure. When a party’s nonperformance hereunder was beyond the control and not due to the fault of the party not performing, a party shall be excused from performing its obligations under this Agreement during the time and to the extent that its performance is prevented by such cause. Such cause shall include, but not be limited to:
any incidence of fire, flood, acts of God or unanticipated communicable disease, acts of terrorism or war commandeering of material, products, plants or facilities by the federal, state or local government, a material act or omission by the other party or any law, ordinance, rule, guidance or recommendation by the federal, state or local government, or any agency thereof, which becomes effective after the date of this Agreement that delays or renders impractical either party’s performance under the Agreement.
13. Ownership of Reports and Documents. The originals of all letters, documents, reports, and data produced for the purposes of this Agreement shall be delivered to and become the property of the Agency. Copies may be made for PARS but shall not be furnished to others without written authorization from Agency.
14. Designees. The Plan Administrator of the Agency, or their designee, shall have the authority to act for and exercise any of the rights of the Agency as set forth in this Agreement, subsequent to and in accordance with the written authority granted by the Governing Body of the Agency, a copy of which writing shall be delivered to PARS.
Any officer of PARS, or his or her designees, shall have the authority to act for and exercise any of the rights of PARS as set forth in this Agreement.
15. Notices. All notices hereunder and communications regarding the interpretation of the terms of this Agreement, or changes thereto, shall be effected by delivery of the notices in person or by depositing the notices in the U.S. mail, registered or certified mail, return receipt requested, postage prepaid and addressed as follows:
(A) To PARS: PARS; 4350 Von Karman Avenue, Suite 100, Newport Beach, CA 92660; Attention: President
(B) To Agency: City of Del Mar; 1050 Camino Del Mar, Del Mar, CA 92014; Attention: City Manager
Notices shall be deemed given on the date received by the addressee.
16. Term of Agreement. This Agreement shall remain in effect for the period beginning March 18, 2024 and ending March 17, 2027 (“Term”). This Agreement may be terminated at any time by giving thirty (30) days written notice to the other party of the intent to terminate. Absent a thirty (30) day written notice to the other party of the intent to terminate, this Agreement will continue unchanged for successive twelve-month periods following the Term.
17. Amendment. This Agreement may not be amended orally, but only by a written instrument executed by the parties hereto.
9 March 18, 2024 Item 09
18. Entire Agreement. This Agreement, including exhibits, contains the entire understanding of the parties with respect to the subject matter set forth in this Agreement.
In the event a conflict arises between the parties with respect to any term, condition or provision of this Agreement, the remaining terms, conditions, and provisions shall remain in full force and legal effect. No waiver of any term or condition of this Agreement by any party shall be construed by the other as a continuing waiver of such term or condition.
19. Attorneys Fees. In the event any action is taken by a party hereto to enforce the terms of this Agreement the prevailing party herein shall be entitled to receive its reasonable attorney’s fees.
20. Counterparts. This Agreement may be executed in any number of counterparts, and in that event, each counterpart shall be deemed a complete original and be enforceable without reference to any other counterpart.
21. Headings. Headings in this Agreement are for convenience only and shall not be used to interpret or construe its provisions.
22. Effective Date. This Agreement shall be effective on the date first above written, and also shall be the date the Agreement is executed.
AGENCY:
BY:
Ashley Jones
TITLE: City Manager
DATE:
PARS:
BY:
Tod Hammeras
TITLE: Chief Financial Officer
DATE:
10 March 18, 2024 Item 09
EXHIBIT 1A
SERVICES
PARS will provide the following services for the City of Del Mar Public Agencies PostEmployment Benefits Trust:
1. Plan Installation Services:
(A) Meeting with appropriate Agency personnel to discuss plan provisions, implementation timelines, actuarial valuation process, funding strategies, benefit communication strategies, data reporting, and submission requirements for contributions/reimbursements/distributions;
(B) Providing the necessary analysis and advisory services to finalize these elements of the Plan;
(C) Providing the documentation needed to establish the Plan to be reviewed and approved by Agency legal counsel. Resulting final Plan documentation must be approved by the Agency prior to the commencement of PARS Plan Administration Services outlined in Exhibit 1A, paragraph 2 below.
2. Plan Administration Services:
(A) Monitoring the receipt of Plan contributions made by the Agency to the trustee of the PARS Public Agencies Post-Employment Benefits Trust (“Trustee”), based upon information received from the Agency and the Trustee;
(B) Performing periodic accounting of Plan assets, reimbursements/distributions, and investment activity, based upon information received from the Agency and/or Trustee;
(C) Coordinating the processing of distribution payments pursuant to authorized direction by the Agency, and the provisions of the Plan, and, to the extent possible, based upon Agency-provided Data;
(D) Coordinating actions with the Trustee as directed by the Plan Administrator within the scope of this Agreement;
(E) Preparing and submitting a monthly report of Plan activity to the Agency, unless directed by the Agency otherwise;
(F) Preparing and submitting an annual report of Plan activity to the Agency; (G) Facilitating actuarial valuation updates and funding modifications for compliance with the applicable GASB pronouncements and/or statements, if prefunding OPEB obligations;
(H) Coordinating periodic audits of the Trust;
(I) Monitoring Plan and Trust compliance with federal and state laws.
3. PARS is not licensed to provide and does not offer tax, accounting, legal, investment or actuarial advice.
11 March 18, 2024 Item 09
EXHIBIT 1B
FEES FOR SERVICES
PARS will be compensated for performance of Services, as described in Exhibit 1A based upon the following schedule:
An annual asset fee shall be paid from Plan assets based on the following schedule:
For Plan Assets from: Annual Rate:
$1 to $10,000,000 0.25%
$10,000,001 to $15,000,000 0.20%
$15,000,001 to $50,000,000 0.15%
$50,000,001 and above 0.10%
Annual rates are prorated and paid monthly. The annual asset fee shall be calculated by the following formula [Annual rate divided by 12 (months of the year) multiplied by the Plan asset balance at the end of the month]. Trustee and Investment Management Fees are not included.
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EXHIBIT 1C
DATA REQUIREMENTS
PARS will provide the Services under this Agreement contingent upon receiving the following information. Agency is solely responsible for ensuring that all information and documentation provided to PARS is true, correct, and authorized:
1. Executed Legal Documents:
(A) Certified Resolution
(B) Adoption Agreement to the Public Agencies Post-Employment Benefits Trust (C) Trustee Investment Forms
2. Contribution – completed Contribution Transmittal Form signed by the Plan Administrator (or authorized Designee) which contains the following information:
(A) Agency name
(B) Contribution amount
(C) Contribution date
(D) Contribution method (Check, ACH, Wire)
3. Distribution – completed Payment Reimbursement/Distribution Form signed by the Plan Administrator (or authorized Designee) which contains the following information:
(A) Agency name
(B) Payment reimbursement/distribution amount
(C) Applicable statement date
(D) Copy of applicable premium, claim, statement, warrant, and/or administrative expense evidencing payment
(E) Signed certification of reimbursement/distribution from the Plan Administrator (or authorized Designee)
4. Other information pertinent to the Services as reasonably requested by PARS and Actuarial Provider.
13 March 18, 2024 Item 09
RESOLUTION NO. 2024-XX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DEL
MAR, CALIFORNIA, APPROVING THE ADOPTION OF THE
PUBLIC AGENCIES POST-EMPLOYMENT BENEFITS TRUST
ADMINISTERED BY PUBLIC AGENCY RETIREMENT SERVICES
(PARS)
WHEREAS, PARS has made available the PARS Public Agencies PostEmployment Benefits Trust (“Program”) to public agencies for the purpose of prefunding pension obligations; and
WHEREAS, the City of Del Mar (“City”) is eligible to participate in the Program, a tax-exempt trust performing an essential governmental function within the meaning of Section 115 of the Internal Revenue Code, as amended, and the Regulations issued there under, and is a tax-exempt trust under the relevant statutory provisions of the State of California; and
WHEREAS, the City’s adoption and operation of the Program has no effect on any current or former employee’s entitlement to post-employment benefits; and WHEREAS, the terms and conditions of post-employment benefit entitlement, if any, are governed by contracts separate from and independent of the Program; and
WHEREAS, the City’s funding of the Program does not, and is not intended to, create any new vested right to any benefit nor strengthen any existing vested right; and WHEREAS, the City reserves the right to make contributions, if any, to the Program.
NOW, THEREFORE, BE IT RESOLVED that:
1. The City Council hereby adopts the PARS Public Agencies Post-Employment Benefits Trust, effective March 18, 2024; and
2. The City Council hereby appoints the City Manager, or their successor or their designee, as the City’s Plan Administrator for the Program; and
3. The City’s Plan Administrator is hereby authorized to execute the PARS legal and administrative documents on behalf of the City and to take whatever additional actions are necessary to maintain the City’s participation in the Program and to maintain compliance of any relevant regulation issued or as may be issued; therefore, authorizing him/her to take whatever additional actions are required to administer the City’s Program.
14 March 18, 2024 Item 09
Resolution No. 2024-XX
PASSED, APPROVED AND ADOPTED by the City Council of the City of Del Mar, California, at the Regular Meeting held this 18th day of March 2024.
_____________________________
Dave Druker, Mayor
City of Del Mar
APPROVED AS TO FORM:
________________________________
Leslie E. Devaney, City Attorney
City of Del Mar
ATTEST AND CERTIFICATION:
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
CITY OF DEL MAR
I, Sarah Krietor, the Administrative Services Manager/City Clerk of the City of Del Mar, California, DO HEREBY CERTIFY that the foregoing is a true and correct copy of Resolution No. 2024-XX, adopted by the City Council of the City of Del Mar, California, at a Regular Meeting held the 18th day of March 2024, by the following vote:
AYES:
NOES:
RECUSE:
ABSENT:
ABSTAIN:
________________________________
Sarah Krietor, Administrative Services
Manager/City Clerk
City of Del Mar
15 March 18, 2024 Item 09
CITY OF DEL MAR
PENSION RESERVE POLICY
The following is the Pension Reserve Policy adopted by the Del Mar City Council on May 31, 2023.
1. Continue working toward the goal of reaching 100% funded status, based on the City’s financial statements according to GASB 68 by June 30, 2032, with the flexibility that the timeline can be extended further by the Council in order to not impact the City’s ability to fund other critical/necessary projects as initially directed by the City Council on September 3, 2013, as part of the creation of the City’s Pension Reserve Fund.
2. Focus on funding the Governmental Fund portion of the unfunded liability and not the 20% portion related to Enterprise fund salaries. In order to not substantially impact Water and Wastewater rates, Enterprise funds will establish a reserve that will not exceed $200,000 in each fund and will continue to pay its annual required contribution related to Enterprise salaries. The remaining unfunded liability portion related to Enterprise salary/benefits will not be covered by the Pension Reserve Fund in the General Fund.
3. Using the reported unfunded liability amount in the most recent completed Annual Comprehensive Financial Report (ACFR), staff will calculate the remaining unfunded liability and equally divide the unfunded liability balance by the remaining years to determine the following year’s contribution. This process will be evaluated each year and reviewed by the Pension Subcommittee of the Finance Committee to determine the recommended annual contribution.
a. Based on the June 30, 2022 ACFR, the current unfunded liability is approximately $8.35 million. The portion related to Governmental Fund salary/benefits is approximately $6.68 million and the current pension reserve balance is $3.4 million. If the proposed updated reserve policy is approved, the recommended pension contribution for FY 2024 will be $360,000.
b. At Midyear, after prior year financial results and ACFR are presented to the City Council, if surplus is reported, determine next year’s pension contribution and make an additional transfer to help minimize large contribution fluctuations largely caused by CalPERS not meeting its investment targets for the year.
4. All pension reserve funds currently held with the City will be considered to be transferred to a Section 115 Trust account once the City Council authorizes staff to open an account. Funds in the Section 115 Trust can only be legally used for pension related costs.
16 March 18, 2024 Item 09
Pension Reserve Policy
a. If at any time, the City is faced with an economic crisis, the City Council may consider deferral of a pension transfer to the Section 115 Trust and may also use funds in the Trust account to pay for the current annual required contribution payment to CalPERS.
5. Once the Pension Reserve reaches 100% status, the City will stop making annual contributions to the Section 115 Trust account but continue to review the ACFR and make annual contributions as necessary to maintain as close to 100% funded status as possible.
6. If and when the Section 115 Trust balance in combination with assets held by CalPERS, reach 100% funded status and remains or exceeds 100% funded status for two consecutive years, on the third year, staff may recommend to the City Council to use excess funds to pay current annual required contribution payments with funds held in the Section 115 Trust account.
17 March 18, 2024 Item 09
ATTACHMENT D
Comparative Investment Plan Tables
Table A below compares the asset class target allocations between PARS Target Index platform, CalPERS CEPPT program, and CalPERS retirement funds. PARS Full-Service platform is not included in this table since it can be customizable to the City’s needs.
Table A: Asset Class Target Allocations
PARS - PFMAM
Target Index
Fixed
Income
Conservative Balanced Growth
Fixed Income 100% 60% 40% 25%
Domestic Equity - 24% 36% 45%
International Equity - 12% 18% 22.5%
Other Growth - 4% 6% 7.5%
CalPERS - CEPPT Strategy 1 Strategy 2
Fixed Income 44% 61%
Global Equity 37% 21%
REITs 14% 9%
TIPS 5% 9%
CalPERS PERF
Public Equity 50%
Private Equity 8%
Income 28%
Real Assets 13%
Cash 1%
Table B below compares the investment returns for all programs/platforms as of December 31, 2023. The retirement funds (PERF) held by PERS are based on results as of June 30, 2023. For comparison purposes, included in this table are some results for some portfolios that are offered by PARS Full-Service platform.
Table B: Investment Returns (as of December 31, 2023)
PARS – PFMAM
Target Index
Fixed Income
(%)
1 Year 3 Years 5 Years
Fixed 100% 6.98% -2.54% 1.28%
Conservative 60% 12.63% 0.93% 6.03%
Balanced 40% 15.32% 2.56% 8.15%
Growth 25% 17.36% 3.82% 9.61%
PARS - PFMAM
Full Service
Fixed Income
(%)
1 Year 3 Years 5 Years
Cap Appreciation 75% 17.32% 4.22% 9.71%
Balanced 60% 15.39% 2.89% 8.25%
Moderate 50% 13.98% 2.08% 7.17%
Mod Conservative 30% 11.05% 0.35% 4.95%
Conservative 15% 8.81% -0.96% 3.30%
18 March 18, 2024 Item 09
Comparative Investment Plan Tables
Table B: Investment Returns (as of December 31, 2023)- con’t.
CalPERS-CEPPT Fixed Income
(%)
1 Year 3 Years 5 Years
Strategy 1 37% 12.11% 0.90% -
Strategy 2 21% 9.23% -0.92% -
CalPERS Fixed Income
(%)
1 Year 3 Years 5 Years
PERF* 30% 5.8% 6.4% 6.1%
*As of June 30, 2023
Table C below compares the administrative and investment management fees of PARS Full Service and Target Index portfolios and PERS CEPPT program. Management fees for the retirement funds (PERF) held by PERS was not easily accessible and not included in this table.
The rates listed on the table below are based on an up to $5M initial deposit into the trust account.
Table C: Section 115 Trust Fees
Program PARS-PFMAM
Full Service
PARS-PFMAM
Target Index
CalPERS
CEPPT
Administration Fees 0.25% 0.25% 0.25%
Investment Management Fees 0.35% 0.121% Included
Total Fees 0.60% 0.371% 0.25%
Annual Fee (based on $5M) $30,000 $18,550 $12,500
19 March 18, 2024 Item 09
City of Del Mar
Agenda Report
TO: Honorable Mayor and City Council Members
FROM: Monica Molina, Finance Manager/Treasurer
Ashley Jones, City Manager
DATE: March 18, 2024
SUBJECT: Annual Comprehensive Financial Report for Fiscal Year Ended June 30, 2023 and Audited Financial Results
REQUESTED ACTION/RECOMMENDATION:
Staff recommends that the City Council receive the June 30, 2023 Annual Comprehensive Financial Report (ACFR) and the Fiscal Year (FY) 2022-23 Final Financial Report.
DISCUSSION/ANALYSIS:
ANNUAL COMPREHENSIVE FINANCIAL REPORT
The City’s audit firm, CliftonLarsonAllen, LLP (CLA), has completed its audit of the City’s financial statements and notes to the basic financial statements for the fiscal year ended June 30, 2023. Based on the results of their audit, CLA provided the City with an unmodified opinion on the financial statements, which means that the City’s financial statements are free of material misstatements and consistent with Generally Accepted Accounting Principles (GAAP). The auditor provided a report with information about the auditor’s responsibilities under generally accepted auditing standards and Government Auditing Standards and OMB Circular A-133 as well as certain communications related to their audit. These communications are contained in Attachment A.
The specific financial documents on which the auditor expresses an opinion are the basic financial statements, and notes to the basic financial statements. These documents, along with the auditor’s opinion letter and management’s discussion and analysis, are the core ACFR documents. Additional documents that make up the ACFR include the letter of transmittal from the City Manager and Finance Manager/Treasurer and a supplemental section, which includes a statistical section presenting detailed information to assist the reader in assessing the economic condition of the City. The ACFR is available on the City’s website at http://www.delmar.ca.us/acfr and is included as Attachment B.
CLA provided the Independent Auditors’ Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards and is provided in Attachment C. The purpose of this report is to describe the scope of the auditors’ testing of internal control over financial reporting and compliance, and the results 1 March 18, 2024 Item 10
City Council Agenda Report
Fiscal Year 2022-2023 ACFR and Final Financial Results
March 18, 2024
of that testing. The City’s internal control over financial reporting was considered for the limited purpose of expressing an opinion on the financial statements.
Article XIII-B of the California State Constitution places limits on the amount of revenue that can be spent by the State and each local government entity. It is the responsibility of the City to calculate the annual appropriations limit. The City’s auditors are required to review and approve the appropriations calculation as part of their audit of the City. The auditor found no exceptions to the City’s calculation of the appropriations limit. The Independent Accountants’ Report on Agreed-Upon Procedures Applied to Appropriations Limit Worksheets No. 6 is included as Attachment D.
FISCAL YEAR 2022-2023 FINAL FINANCIAL REPORT
The original FY 2022-23 Budget, approved on June 21, 2021, included a full restoration of operational services, with the goal to restore capital and special project expenditures as revenue became available. The City Council approved the two-year budget with a FY 2022- 23 projected General Fund Contingency of 18.51% (68 days of operations). Fortunately, some revenue recovered faster than anticipated and on June 20, 2022, the FY 2022-23 Budget Update included additional capital and special project expenditures related to the City work plan that was approved by the City Council during the Goal Setting Workshop on March 9, 2022, and as part of a follow-up agenda item on May 2, 2022.
The FY 2022-23 Budget Update reflected a projected General Fund Contingency of 24.04% (88 days of operation) and included transfers of $607,300 to the Pension Reserve Fund; $100,000 to the Equipment Reserve Fund; and $200,000 to the Housing Reserve Fund. The City Council approved the FY 2022-23 Mid-Year Budget Update on March 6, 2023, which included some operating adjustments and additional transfers of $500,000 to the Pension Reserve Fund; $600,000 to the Housing Reserve Fund; and $200,000 to the Capital Reserve Fund, resulting in a projected General Fund Contingency of 29.55% (108 days of operations).
Last month, CLA completed the FY 2022-23 financial audit. Attached for your review is the Final Financial Report (Attachment E) for FY 2022-23. The report reflects a final total General Fund balance of $11.3 million, and a General Fund Contingency of $6.4 million, which represents a contingency of 39.7% (145 days of operations). An analysis of the final results is provided below which compares the final results to the final adjusted budget for FY 2022-
23. Attachment F is a General Fund cash flow report for FY 2022-23, which includes the final budget for the year (column C) approved on March 6, 2023; final results (column D); and the difference between the final budget and final results (column E). The following FY 2022-23 financial analysis is based on the information contained in column D of this report, as well as financial summary reports included in Attachment E.
General Fund Revenues
Recommendations included in the approved FY 2022-23 Budget Update were based on positive trends in Transient Occupancy Tax (TOT), slower recovery of sales tax receipts (revenues), and impacts to other revenue sources, with the idea that revenues would be 2 March 18, 2024 Item 10
City Council Agenda Report
Fiscal Year 2022-2023 ACFR and Final Financial Results
March 18, 2024
closely monitored throughout the year and re-evaluated at Mid-Year. In comparison to the FY 2022-23 Mid-Year Budget that was approved on March 6, 2023, General Fund revenue final results for FY 2022-23 are at $22 million, or 6.8% higher than final budget projections.
The top three revenue sources for the City reached or exceeded final adjusted FY 2022-23 budgets. Unaffected by the pandemic, property tax revenues continued to increase. Final results indicate a 9.5% increase when compared to FY 2021-22 results. Transient Occupancy Tax (TOT) exceeded projections by $116,000 and came in approximately $400,000 or 11.6% higher than FY 2021-22 results. TOT hit its highest ever in FY 2022-23, largely due to the reopening of the Del Mar Beach Motel and increased average room rates. Lagging in recovery, sales tax revenue for FY 2022-23 exceeded pre-pandemic levels by approximately $100,000 with final results at $2.3 million. Most of the increase was based on sales tax generated by the downtown restaurants and hotels. However, sales tax data indicates a decline in this category during the months of October 2022 through March 2023. Fortunately, revenue generated in this category for the 3rd Quarter (Jul 2022-Sep 2022) and 2nd Quarter (April 2023- June 2023) increased by approximately 13.6% when compared to the same quarters last year.
Most other General Fund revenues reached or exceeded final FY 2022-23 budgets. The following are a few noteworthy items:
There was an increase of approximately $468,000 in parking violation revenue when compared to last fiscal year. However, under the modified accrual basis of accounting, revenues are recognized as soon as they are both measurable and available if they are collected within 60 days of the end of the fiscal year. In FY 2021-22, parking violations collected by a third party for the fiscal year were not received within 60 days of fiscal year end, which resulted in those revenues being recognized in FY 2022-23.
This resulted in a higher than anticipated final result. Although parking violation revenue did come in higher than last fiscal year, due to fee increases and higher turnover of visitors, approximately $80,000 of the recorded revenue corresponds to FY 2021-22 revenue collections.
Parking meter revenue did not meet final budget projections by approximately $81,000 and came in 6% lower than anticipated. A majority of this decrease was due to an unbudgeted one-time payment to St. Peter’s Church for their share (per revenue sharing agreement with City) of prior year credit card revenue collected by a third party on behalf of the City that was not properly remitted to them. On October 3, 2022, the City Council approved the purchase of a fire engine utilizing approximately $871,000 of Coronavirus State and Local Fiscal Relief Funds (SLFRF) that were allocated to Del Mar. The purchase of the fire engine is reflected in the Equipment Replacement Fund and the funding from SLFRF is reflected in the Revenue from other Agencies category.
The final revenue report for FY 2022-23 indicates that there was a gain in total General Fund revenues of approximately $1.4 million when compared to the final budget, which is further detailed in Table A below:
3 March 18, 2024 Item 10
City Council Agenda Report
Fiscal Year 2022-2023 ACFR and Final Financial Results
March 18, 2024
Table A – General Fund Revenues
Revenue
Source
Budget
FY2022-23
Final
FY2022-23
Difference % of
Projected
Property tax $6,900,000 $7,241,627 $341,627 105.0%
TOT 3,700,000 3,816,392 116,392 103.1%
Sales tax 2,270,000 2,306,262 36,262 101.6%
Parking meter 1,350,000 1,268,930 (81,070) 94.0%
Parking violations 900,000 1,368,108 468,108 152.0%
Planning services 1,195,000 1,414,000 219,000 118.3%
Other revenue 4,284,337 4,584,455 300,118 106.9%
Total 20,599,337 $21,999,774 $1,400,437 106.8%
General Fund Operating Expenditures
FY 2022-23 General Fund operating expenditures were budgeted to fully restore operational services, totaling $14.4 million. Expenditures were subsequently adjusted during the Budget Update and Mid-Year processes that occurred during the fiscal year, resulting in a final operating expenditure budget of $15.4 million. The following final results outlined in Table B indicate that operating expenditures stayed below or within the final adjusted budget:
Table B – General Fund Operating Expenditures
Program Final
Budget
Preliminary
Results
Difference % of
Projected
General Government* $5,388,915 $5,277,937 $110,979 97.9% Public Safety** 7,681,095 7,632,652 48,443 99.4%
Public Works 598,292 528,985 69,307 88.4%
Non-departmental 757,430 763,535 (6,105) 100.1%
Equipment replacement 984,100 987,427 (3,327) 100.3%
Total $15,409,832 $15,190,535 $219,297 98.6%
* Includes City Council, City Manager, Legal services, Admin services, and Planning services. **Includes Law enforcement, Fire services; Lifeguard services; and Parking enforcement.
As reflected in the FY2022-23 Expenditure Summary Report included in Attachment E, most expenditures came in lower or close to final budget. Some of the major contributors to the approximate net $220,000 savings in expenditures include:
A savings of approximately $160,000 in Planning Services largely related to the difficultly of filling department vacancies in the current employment market.
An overage of approximately $68,000 in Building Services due to building inspection costs. The overage is offset by an increase in related revenue as costs are based on 80% of the revenue collected.
A savings of approximately $128,000 in Law Enforcement costs related to a reduction in overtime for special events and credit received from the Sheriff’s department resulting from position vacancies (service levels remain the same). 4 March 18, 2024 Item 10
City Council Agenda Report
Fiscal Year 2022-2023 ACFR and Final Financial Results
March 18, 2024
An overage of approximately $57,000 in Lifeguard Services related to overtime and salary expenditures related to extra coverage required during the summer months.
An overage of approximately $142,000 in Parking Enforcement largely due to required overtime coverage and increase cost of merchant fees related to credit card meter transactions and third-party citation processing fees. This overage is fully offset by the increase in parking violation revenue.
A net savings of approximately $114,000 in Fire Protection due to turnover of fire employees. The savings was based on the net of salary and benefits coming in under budget and overtime costs coming in higher than budget projections. A savings of approximately $58,000 in Engineering Services based on lower than anticipated engineering costs not associated with capital projects, and a lower volume of development reviews than anticipated.
Year-End Transfers
Some of the City’s various special revenue funds require year-end transfers, which is a result of the individual fund not collecting sufficient revenues to cover its costs, or transfers from special revenue funds to cover costs related to capital and special projects. Included in this category are funds transferred to the Housing Reserve Fund and Capital Reserve Funds for future affordable housing and capital projects. The original budget of $1,144,020 in transfers for FY 2022-23 was increased to $2,138,750 largely due to additional reserve transfers of $700,000 to the Housing Reserve Fund, and $200,000 to the Capital Reserve Fund. Since the Road Maintenance Rehabilitation Account (RMRA) used for street related projects was not established until the beginning of FY 2023-24, the anticipated reimbursement transfer of $85,400 to the General Fund did not occur, resulting in a final net General Fund operating transfer for FY 2022-23 of $2,154,787.
Capital Improvement/Special Projects
In June 2021, during the adoption of the FY 2022-23 Capital Budget, the City Council took action to reinstate some of the much-needed capital projects that were deferred during the pandemic. The original budget included $2,605,000 in capital improvement projects. During the fiscal year, various adjustments were made to the capital projects budget, which included carrying over unspent funds from the previous year and funding allocations for the Hoska Avenue Alley Assessment, San Dieguito Drive engineering assessment and design work, and San Dieguito Embankment Failure Repair projects. The final FY 2022-23 budget for capital projects was $4,607,261.
Most Capital projects are multi-year projects and are not typically completed in the same fiscal year that funds are allocated. Therefore, staff will recommend that the City Council approve the carry-over of unspent capital project funds in the amount of $2,779,245 to the current fiscal year for capital projects. Staff will also be recommending to carry-over the revenue offset by federal, state, and local funds in the amount of $1,503,250 related to the Camino del Mar Bridge project. A listing of all encumbrances (funds to be carried over to the current fiscal year) is included as Attachment G. The calculated final results for capital projects, including the carryover funds, total $4,409,930.
5 March 18, 2024 Item 10
City Council Agenda Report
Fiscal Year 2022-2023 ACFR and Final Financial Results
March 18, 2024
During the adoption of the FY 2022-23 Budget, the City Council also included funding for Special Projects that totaled $351,000. During the fiscal year, budget adjustments were made due to carryover funds from FY 2021-22 and additional project funding requirements. The final FY 2022-23 budget for special projects was $1,371,130. Staff will be recommending that $874,180 of unspent FY 2022-23 funds be carried over to FY 2023-24, which is included in the final results totaling $1,326,842.
A summary of capital and special project results is provided below in Table C:
Table C- Capital & Special Projects
Program Final
Budget
Final Exp.
FY 2022-23
Unspent
(carry-over)
% of
Projected
General Fund CIP $3,007,150 $909,191 $2,094,265 30.2%
Open Space CIP 747,720 584,768 151,595 78.2%
TransNet CIP 341,000 133,264 136,000 39.1%
Clean Water CIP 511,391 3,462 397,385 0.7%
Total CIP $4,607,261 $1,630,685 $2,779,245 35.4%
Special Projects 1,371,130 452,662 874,180 33.0%
Total $5,978,391 $2,083,347 $3,653,425 34.8%
Measure Q Fund
Revenues
Originally projected at $3 million, this revenue source was increased to $3.3 million at MidYear. As indicated in Table E below, the final results came in approximately $102,000 higher than projected:
Table E – Measure Q Revenues
Account Final
Budget
Preliminary
Results
Difference % of
Projected
Measure Q $3,300,000 $3,401,946 $101,946 103.1%
Although impacted by the pandemic, Measure Q revenue losses were less than the losses in general sales and use tax. This was largely due to the difference on how Measure Q tax is collected for online sales and out-of-town vehicle purchases made by Del Mar residents.
Although leveling off, online purchases increased dramatically during the pandemic especially during the shutdown of businesses. Online purchases made by residents, for businesses located outside of Del Mar, are required to pay an additional 1% in Measure Q tax, which is directly allocated to Del Mar. In addition, Del Mar receives a full 1% Measure Q tax on vehicle purchases by Del Mar residents from out-of-town vendors/car dealers. 6 March 18, 2024 Item 10
City Council Agenda Report
Fiscal Year 2022-2023 ACFR and Final Financial Results
March 18, 2024
Measure Q Expenditures
On May 17, 2021, the City Council established a budget for an undergrounding pilot project on Tewa Court/10th Street which was completed in February 2022. Funding for the formation of undergrounding districts 1A and X1A, began in FY 2021-22 and expenditures continued to be incurred in FY 2022-23. In addition, funding was also allocated for the formation of undergrounding district 1B in May 2023.
The final projected Measure Q budget for FY 2022-23 was $1,675,750. Total Measure Q expenditures for the year totaled $1,325,555. Although the final results indicate a savings of approximately $350,000 in Measure Q expenditures, the remaining unspent funds will be encumbered and carried over to FY 2023-24. A summary of the results is provided in Table F below:
Table F – Measure Q Expenditures
Account Budget
FY2022-23
Final Exp
FY2022-23
Unspent
(carry-over)
% of
Projected
Undergrounding-General $18,667 $65,750 $- 352.2%
UUP-Tewa Ct 601,450 493,073 108,376 82.0%
UUD1A Stratford Ct South 385,959 374,921 11,037 97.1%
UUD-XIA-Crest Canyon 486,471 390,254 96,216 80.2%
UUD-1B – Stratford North 74,375 1,556 72,818 2.1%
Pavement Rehab 75,000 - 75,000 0%
Shores Park 33,828 - 33,828 0%
Total $1,675,750 $1,325,555 $397,275 79.1%
Measure Q Reserves
Based on $3.4 million of Measure Q revenue funds and $1.3 million in expenditures, the final FY 2022-23 ending fund balance, including unspent funds that will be carried over to FY 2023- 24, is at $7,769,899. Staff will recommend carrying over $397,275 of unspent funds to the current year, resulting in a new FY 2023-24 projected balance of $4.28 million available for future Measure Q project spending.
FY 2022-23 General Fund Reserve & Housing and Capital Transfers Table G provides a summary of the changes in General Fund reserves and Housing and Capital Reserve transfers during FY 2022-23. The City Council adopted the FY 2022-23 Budget Update on June 20, 2022, and made modifications to the budget during the Mid-Year Budget Review in March 2023. A final minor revision to the budget was also made on April 17, 2023, when the final ending balances from FY 2021-22 were updated as the beginning balances for FY 2022-23. In comparison to the final budget approved on April 17, 2023, the Final Reserve Summary for FY 2022-23 shows an increase of 10.08% to the General Fund Contingency from 29.60% to 39.68%, and a total General Fund balance increase of $1.6 million from $4.8 million to $6.4 million. The final balances will be carried over to the FY 2023- 24 Reserve Summary to calculate the new estimated projected General Fund Contingency at June 30, 2024.
7 March 18, 2024 Item 10
City Council Agenda Report
Fiscal Year 2022-2023 ACFR and Final Financial Results
March 18, 2024
Table G – General Fund Reserves & Transfers
Account Budget
Update
FY 22/23
(6/20/22)
Mid-Year
Budget
FY 22/23
(3/6/23)
Amended
Budget
FY 22/23
(4/17/23)
Final
Results
FY22/23
(3/5/24)
General Fund
Contingency
24.04% 29.55% 29.60% 39.68%
General Fund Contingency $3,895,728 $4,800,603 $4,811,637 $6,413,339 Pension Reserve* 2,900,000 3,400,000 3,400,000 3,400,000 Self-Insurance 300,000 371,553 371,553 437,631
Leave Liability 100,000 100,000 100,000 100,000
Equipment Replacement 985,400 985,400 985,400 985,400
Encumbrances - - - ???
Total General Fund $8,181,128 $9,657,556 $9,668,590 $11,336,371 Housing Reserve 500,000 1,100,000 1,100,000 1,100,000
Capital Reserve - 200,000 200,000 200,000
*A total additional Pension Reserve of $1,597,500 is reported in the Water and Wastewater Funds, resulting in a Citywide Pension Reserve balance of $ 4,997,500.
FY 2022-23 Reserve Summary
Included as Attachment H is a revised Reserve Summary Report for FY 2023-24 based on the FY 2022-23 results included in this report. In comparison to the FY 2023-24 Budget that was adopted on June 19, 2023, the updated budget shows an increase to the General Fund Contingency of 11.72% from 27.87% to 39.59%, and a total General Fund balance increase of $2.1 million from $10.1 to $12.2 million. Based on these results, staff will be recommending that the City Council approve additional reserve transfers that will be presented in the FY 2023-24 Mid-Year Financial Report.
Finance Committee Feedback
The Final FY 2022-23 Financial Report was presented to the Finance Committee on March 5, 2024 and provided staff with feedback which will be incorporated to the City Council presentation.
NEXUS TO CITY COUNCIL GOALS AND PRIORITIES:
This item is operational in nature and is not directly related to the City Council’s list of Goals and Priorities.
FISCAL IMPACT:
The beginning balances of the Reserve Summary report for FY 2023-24 will be updated with the FY 2022-23 ending balances that are included in this report. This item does not require any adjustments to the FY 2022-23 Operating and Capital Budget.
ENVIRONMENTAL IMPACT:
The proposed City Council action does not constitute a “project” under the definition set forth in California Environmental Quality Act (CEQA) Guidelines Section 15378 because it will not have a potential to result in a direct or indirect physical change in the environment and is, therefore, not subject to CEQA. No further action under CEQA is required. 8 March 18, 2024 Item 10
City Council Agenda Report
Fiscal Year 2022-2023 ACFR and Final Financial Results
March 18, 2024
ATTACHMENTS
Attachment A - Independent Auditors’ Report
Attachment B - Annual Comprehensive Financial Report with Report on Audit by Independent Certified Public Accountants for Year Ended June 30, 2023 Attachment C - Independent Auditors’ Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards
Attachment D - Independent Accountants’ Report on Agreed-Upon Procedures Applied to Appropriations Limit Worksheet No. 6
Attachment E - Fiscal Year 2022-23 Final Financial Report Attachment F - Fiscal Year 2022-23 General Fund Cash Flow Report Attachment G - Fiscal Year 2022-23 Encumbrances and Continuing Appropriations Attachment H - Fiscal Year 2022-23 Revised Reserve Summary Report 9 March 18, 2024 Item 10
CLA (CliftonLarsonAllen LLP) is an independent network member of CLA Global. See CLAglobal.com/disclaimer.
CliftonLarsonAllen LLP
CLAconnect.com
Honorable City Council of the
City of Del Mar
Del Mar, California
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Del Mar as of and for the year ended June 30, 2023, and have issued our report thereon dated January 26, 2024. We have previously communicated to you information about our responsibilities under auditing standards generally accepted in the United States of America and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit in our statement of work dated June 29, 2023.
Professional standards also require that we communicate to you the following information related to our audit.
Significant audit findings or issues
Qualitative aspects of accounting practices
Accounting policies
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by City of Del Mar are described in Note 1 to the financial statements.
As described in Note 1, the City changed accounting policies by adopting Statement of Governmental Accounting Standards Board (GASB Statement) No. 96, Subscription-Based Information Technology Arrangements, effective July 1, 2022. Accordingly, the accounting change has been applied to the beginning of the period of adoption.
We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.
Accounting estimates
Accounting estimates are an integral part of the financial statements prepared by management and are based on managements knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were:
The annual required contributions, pension expense, net pension liability, and corresponding deferred outflows of resources and deferred inflows of resources for the Citys agent multiple employers defined benefit pension plans are based on actuarial valuations provided by California Public Employee Retirement System actuaries. We evaluated the key factors and assumptions used to develop the pension related estimates in determining that it is reasonable in relation to the financial statements taken as a whole.
Managements estimate of the claims payable liabilities related to general liability and workers compensation claims are based on estimates by the claims administrators. 10 March 18, 2024 Item 10
Honorable City Council
City of Del Mar, California
Financial statement disclosures
There were no particularly sensitive financial statement disclosures.
The financial statement disclosures are neutral, consistent, and clear.
Difficulties encountered in performing the audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.
Uncorrected misstatements
Professional standards require us to accumulate all misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management.
Management did not identify and we did not notify them of any uncorrected financial statement misstatements.
Corrected misstatements
Management did not identify and we did not notify them of any financial statement misstatements detected as a result of audit procedures.
Disagreements with management
For purposes of this communication, a disagreement with management is a disagreement on a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditors report. No such disagreements arose during our audit.
Management representations
We have requested certain representations from management that are included in the management representation letter dated January 26, 2024.
Management consultations with other independent accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a second opinion on certain situations. If a consultation involves application of an accounting principle to the entitys financial statements or a determination of the type of auditors opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.
Significant issues discussed with management prior to engagement We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to engagement as the entitys auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our engagement.
11 March 18, 2024 Item 10
Honorable City Council
City of Del Mar, California
Required supplementary information
With respect to the required supplementary information (RSI) accompanying the financial statements, we made certain inquiries of management about the methods of preparing the RSI, including whether the RSI has been measured and presented in accordance with prescribed guidelines, whether the methods of measurement and preparation have been changed from the prior period and the reasons for any such changes, and whether there were any significant assumptions or interpretations underlying the measurement or presentation of the RSI. We compared the RSI for consistency with managements responses to the foregoing inquiries, the basic financial statements, and other knowledge obtained during the audit of the basic financial statements. Because these limited procedures do not provide sufficient evidence, we did not express an opinion or provide any assurance on the RSI.
Supplementary information in relation to the financial statements as a whole With respect to the combining fund financial statements, and the individual budgetary schedules (collectively, the supplementary information) accompanying the financial statements, on which we were engaged to report in relation to the financial statements as a whole, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period or the reasons for such changes, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. We have issued our report thereon dated January 26, 2024.
Other information included in annual reports
Other information (financial or nonfinancial information other than the financial statements and our auditors report thereon) is being included in your annual report and is comprised of the introductory and statistical sections. Our responsibility for other information included in your annual report does not extend beyond the financial information identified in our opinion on the financial statements. We have no responsibility for determining whether such other information is properly stated and do not have an obligation to perform any procedures to corroborate other information contained in your annual report.
We are required by professional standards to read the other information included in your annual report and consider whether a material inconsistency exists between the other information and the financial statements because the credibility of the financial statements and our auditors report thereon may be undermined by material inconsistencies between the audited financial statements and other information.
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.
Our auditors report on the financial statements includes a separate section, Other Information, which states we do not express an opinion or any form of assurance on the other information included in the annual report. We did not identify any material inconsistencies between the other information and the audited financial statements.
* * *
12 March 18, 2024 Item 10
Honorable City Council
City of Del Mar, California
This communication is intended solely for the information and use of the City Council and management of City of Del Mar and is not intended to be, and should not be, used by anyone other than these specified parties.
CliftonLarsonAllen LLP
Irvine, California
January 26, 2024
13 March 18, 2024 Item 10
Annual Comprehensive Financial Report
Fiscal Year Ended
June 30, 2023
CITY OF DEL MAR, CALIFORNIA
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CITY OF DEL MAR, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
WITH REPORT ON AUDIT BY
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
YEAR ENDED JUNE 30, 2023
PREPARED BY
ADMINISTRATIVE SERVICES DEPARTMENT
MONICA MOLINA
FINANCE MANAGER/TREASURER
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CITY OF DEL MAR, CALIFORNIA
TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2023
INTRODUCTORY SECTION
LETTER OF TRANSMITTAL I
CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL
REPORTING (GFOA) XVI
DIRECTORY OF OFFICIALS XVII
ORGANIZATIONAL CHART XVIII
FINANCIAL SECTION
INDEPENDENT AUDITORS’ REPORT 1
MANAGEMENT’S DISCUSSION AND ANALYSIS 8
FINANCIAL STATEMENTS
GOVERNMENT-WIDE FINANCIAL STATEMENTS
STATEMENT OF NET POSITION 26
STATEMENT OF ACTIVITIES 27
FUND FINANCIAL STATEMENTS
GOVERNMENTAL FUNDS
BALANCE SHEET 32
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET POSITION 33
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES 34
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES OF THE GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES 35
PROPRIETARY FUNDS
STATEMENT OF NET POSITION 36
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET
POSITION 37
STATEMENT OF CASH FLOWS 38
FIDUCIARY FUNDS
STATEMENT OF FIDUCIARY NET POSITION 39
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION 40
NOTES TO FINANCIAL STATEMENTS 41
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CITY OF DEL MAR, CALIFORNIA
TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2023
REQUIRED SUPPLEMENTARY INFORMATION
MISCELLANEOUS PENSION PLAN
SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY 78 SCHEDULE OF CONTRIBUTIONS – DEFINED BENEFIT PENSION PLAN 80
SAFETY PENSION PLAN
SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY 82 SCHEDULE OF CONTRIBUTIONS – DEFINED BENEFIT PENSION PLAN 84 BUDGETARY COMPARISON SCHEDULE – GENERAL FUND 86
NOTE TO REQUIRED SUPPLEMENTARY INFORMATION 88
SUPPLEMENTARY INFORMATION
GENERAL FUND
COMBINING BALANCE SHEET 92
COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES 93
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET 95
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES 97
BUDGETARY COMPARISON SCHEDULES
GASOLINE TAX SPECIAL REVENUE FUND 99
OPEN SPACE SPECIAL REVENUE FUND 100
SUPPLEMENTAL LAW ENFORCEMENT SPECIAL REVENUE FUND 101
REGIONAL COMMUNICATIONS SYSTEM SPECIAL REVENUE FUND 102 GRANTS SPECIAL REVENUE FUND 103
HOUSING SPECIAL REVENUE FUND 104
AB 939 SPECIAL REVENUE FUND 105
RMRA SPECIAL REVENUE FUND 106
TRANSNET II CAPITAL IMPROVEMENT CAPITAL PROJECTS FUND 107 CAPITAL IMPROVEMENT CAPITAL PROJECTS FUND – MAJOR FUND 108
CUSTODIAL FUNDS
COMBINING STATEMENT OF FIDUCIARY NET POSITION 110
COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION 111 19 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2023
STATISTICAL SECTION (UNAUDITED)
DESCRIPTION OF STATISTICAL CONTENTS 113
FINANCIAL TRENDS
NET POSITION BY COMPONENT 114
CHANGES IN NET POSITION 116
FUND BALANCES OF GOVERNMENTAL FUNDS 118
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS 120
GOVERNMENTAL ACTIVITIES TAX REVENUES BY SOURCE 123
GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION 124
REVENUE CAPACITY
ASSESSED VALUE OF PROPERTY BY USER CODE 125
ESTIMATED VALUE OF TAXABLE PROPERTY 127
CONSTRUCTION PERMITS 129
PROPERTY TAX RATES – ALL OVERLAPPING GOVERNMENTS 130
TEN LARGEST PROPERTY TAXPAYERS 131
TOP 25 SALES TAX PRODUCERS 132
PROPERTY TAX LEVIES, TAX COLLECTIONS, AND DELINQUENCIES 133
DEBT CAPACITY
RATIO OF OUTSTANDING DEBT BY TYPE 134
PLEDGED-REVENUE COVERAGE 135
RATIO OF GENERAL BONDED DEBT OUTSTANDING 136
DIRECT AND OVERLAPPING BONDED DEBT 137
SCHEDULE OF LEGAL DEBT MARGIN 138
DEMOGRAPHIC AND ECONOMIC INFORMATION
DEMOGRAPHIC AND ECONOMIC STATISTICS 140
TOP TEN PRINCIPAL EMPLOYERS 142
OPERATING INFORMATION
FULL-TIME EMPLOYEES BY FUNCTION 143
OPERATING INDICATORS BY FUNCTION 144
CAPITAL ASSET STATISTICS BY FUNCTION 145
MISCELLANEOUS STATISTICS 146
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INTRODUCTORY SECTION
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January 26, 2024
Honorable Mayor, Councilmembers, and the Citizens of the City of Del Mar, California
LETTER OF TRANSMITTAL
FISCAL YEAR 2022-2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT It is a pleasure to present the Fiscal Year 2022-2023 Annual Comprehensive Financial Report (ACFR) for the City of Del Mar. These financial statements have been prepared in accordance with Generally Accepted Accounting Principles (GAAP) and audited in accordance with generally accepted auditing standards. Responsibility for the accuracy of the data, the completeness and reliability of the presentation, including all disclosures, rests with City management.
To provide a reasonable basis for making the representations shown in this report and to compile sufficient reliable information for the preparation of the City’s financial statements, the management of the City has established a comprehensive internal control framework designed to protect the City’s assets from loss, theft, or misuse. Because the costs of internal controls should not exceed their benefits, the City’s internal controls have been designed to provide a reasonable, rather than absolute, assurance that the financial statements will be free from material misstatements.
The City’s financial statements have been audited by certified public accountants, CliftonLarsonAllen (CLA) LLP. The independent auditor concluded, based on the audit, that there was a reasonable basis for rendering an unmodified opinion on the City’s financial statements for the fiscal year ended June 30, 2023.
Management’s discussion and analysis (MD&A) immediately follows the independent auditor’s report and provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in conjunction with it.
Profile of the City of Del Mar
Del Mar is a coastal charter City incorporated in 1959. Del Mar borders the City of San Diego on the south and the City of Solana Beach on the north, and the City is governed by a fivemember City Council under the Council/Manager form of government. The City Council is 23 March 18, 2024 Item 10
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elected at large with staggered four-year terms and the positions of Mayor and Deputy Mayor rotate amongst Council members annually.
Del Mar is a small city of approximately 3,903 residents, as reported on the Department of Finance population estimates as of January 1, 2023, and is primarily a residential community with substantial tourist appeal covering approximately 2.2 square miles and is known for its beautiful beaches. The City is predominantly built-out; however, redevelopment and revitalization opportunities exist in its commercial areas, and replacement of existing houses with updated and often larger and more elaborate dwellings is commonplace in its residential areas. The 22nd District Agricultural Association (DAA), which manages and operates the Del Mar Fairgrounds and is home to the Del Mar Thoroughbred Club and San Diego County Fair, has a significant presence in the City, encompassing approximately one-fifth of the City’s area.
The 22nd DAA is a State of California agency and is managed by a board of directors appointed by the Governor.
This report includes financial statements for the City and the financial activity related to the Del Mar Public Facilities Corporation. As a full-service City, Del Mar provides its citizens and customers with fire; marine safety; parks; planning; public works; water, wastewater, and clean water services; and contracts for waste collection, cooperative fire management services with the cities of Encinitas and Solana Beach, and law enforcement services with the San Diego County Sheriff.
Budgetary Process
The Del Mar City Council (Council) adopted the City’s two-year Operating and Capital Budget for Fiscal Years 2021-2022 and 2022-2023, on June 21, 2021. The budget process began with the City Council developing goals and priorities which provided the framework around which staff resourced and proposed a budget for Council consideration. On June 20, 2022, a Budget Update was approved by the City Council for the second year of a two-year budget cycle as well. Due to the recovery of revenue losses resulting from the COVID-19 pandemic recovering faster than anticipated, projections for the Fiscal Year 2022-2023 Budget were recalculated and services were restored to pre-pandemic levels. In addition, the City Council authorized to start on working on deferred capital and special projects.
The budget is monitored monthly by the City’s Finance Division staff and department directors using financial reports which compare actual revenues and expenditures to date with budgeted amounts. Semi-annual financial reports are presented and reviewed by the City’s Finance Committee before being presented to the Council at regularly scheduled meetings.
Other financial management tools used in conjunction with the budget process are the City’s reserve policies, the ten-year Capital Improvement Program (CIP), and the 10-year financial forecast. Due to the significant financial effects of the COVID-19 pandemic, some financial management tools were deferred until resources were recovered and available and were restored in the following budget cycle.
Throughout each fiscal year, the Council may increase or decrease the budget, as needed, by resolution. The City Manager has the authority to move appropriations within a fund between programs; however, any adjustments between funds must be approved by the City Council.
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Factors Affecting the City’s Financial Condition
Del Mar relies heavily on the local real estate market, specifically property tax revenues, and tourism, as major revenue sources. Over the last decade, Del Mar has continued to see increases in assessed valuations even during the sudden recessionary period triggered by the pandemic. Property taxes increased by 6.6% in Fiscal Year 2022-2023 compared to the previous year. The annual increase in assessed value is primarily attributable to home sales at a higher than previously assessed value; increases in value due to new construction; and up to a two percent (2%) annual increases permitted under Proposition 13. Assessed valuation is projected to continue to increase as demand for coastal property remains quite strong. In addition, since Del Mar has been largely built-out for many years with properties occupied by long-time residents, many of Del Mar’s residential properties carry very low assessed values compared to current market value; and as these properties turn over, they are reassessed at higher values.
Tourism is a significant industry and a major source of revenue for the City. With its beautiful beaches and moderate climate, Del Mar is usually a popular destination for both local visitors and vacationing travelers. Starting in Fiscal Year 2016-2017, the City started contributing one percent (1%) of Transient Occupancy Tax (TOT) to the Del Mar Village Association (DMVA) for destination marketing efforts. This amounted to $293,568 in Fiscal Year 2022-2023. This allows the City to foster and encourage broader efforts to market the Del Mar village, including hotels, as well as restaurants and retailers. An annual report is provided to the City Council on the status of these efforts.
Transient Occupancy Tax (TOT) collections was one of the largest revenue sources that was impacted by the COVID-19 pandemic. This revenue source decreased by approximately 40% during Fiscal Year 2020-2021, when compared to the FY 2018-2019, but also recovered faster than anticipated to pre-pandemic levels in FY 2021-2022. In FY 2022-23, TOT revenues increased by an additional 11.6% when compared to the prior year, resulting in a total of $3.8 million in TOT revenue for the year.
Sales tax revenues had a slower recovery and finally reached pre-pandemic levels in FY 2022-
23. Receipts for FY 2022-2023 indicate that the downtown businesses continue to thrive. In comparison to the previous year, the FY 2022-2023 sales tax revenues increased by 11.5%, resulting in a total of $2.3 million or 4.4% higher than FY 2018-2019 pre-pandemic levels of $2.2 million.
In November 2016, Del Mar voters approved Measure Q, a one percent (1%) general sales tax measure. The new sales tax was implemented in April 2017, and amounted to $3.8 million in Fiscal Year 2022-2023 revenues. To date, Measure Q has generated approximately $17.6 million in district tax revenues. Though no specific projects or uses were officially designated as part of the approved general tax measure, subsequent to its passage, the City Council identified by resolution use of the additional revenue for community reinvestment and infrastructure type projects. The projects currently identified for funding with Measure Q funds include the Downtown Streetscape Project, Shores Park Master Planning, and the Utility Undergrounding Program. The Downtown Streetscape Project was finalized in Fiscal Year 2019-2020, and the Tewa Court/10th Street Utility Undergrounding Pilot Project began at the end of Fiscal Year 2020-2021, and was completed in FY 2022-2023. In Fiscal Year 2021-2022, the City Council 25 March 18, 2024 Item 10
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established undergrounding districts 1A and X1A, and continued the design and permitting phase in FY 2022-2023.
The City’s fiscally conservative strategic approach has been to identify new revenue sources while examining ways to reduce expenditures by considering alternatives to providing services and managing City operations. The City has always maintained a low level of fixed obligations and has adopted prudent reserve policies.
In Fiscal Year 2014-2015, the Pension Reserve Fund was established as a way to set-aside monies for future anticipated employee pension obligation costs. As a result of financial losses related to the pandemic, there was no budgeted transfer of funds to the Pension Reserve Fund in FY 2020-2021. On July 6, 2020, the City Council approved Resolution 2020-41, which set the priorities for the use of revenues received as the City economically recovered from impacts related to the pandemic. As revenues recovered, additional surplus funds were transferred to the various reserves, including the Pension Reserve. Currently, the Pension Reserve is at the previously anticipated level it would have been had the pandemic never occurred. The Pension Reserve balance in the General Fund at the end of FY 2022-2023 is $3.4 million.
The City continues to pursue grant opportunities and low-cost financing for its projects.
Additionally, the City has been able to fund certain projects through the generosity of its residents and community. We believe that the projects undertaken this fiscal year and the accomplishments highlighted as follows not only help the City better serve Del Mar residents and businesses, but they assist in building a solid foundation towards keeping the City fiscally sound and well positioned to sustain its financial health into the future.
Final results for FY 2022-2023, indicate that revenues came in higher, and expenditures came in lower than final projections, which is discussed in detail in the Management’s discussion and analysis section of this report.
Accomplishments
Based on direction by the City Council, highlighted below are the City’s accomplishments this fiscal year.
Capital Improvement Projects
The following Capital Improvement Program achievements occurred in Fiscal Year 2022-2023:
Administered 10-year Capital Improvement Program for City’s infrastructure needs, comprised of Open Space, Facilities, Storm Drain, Streets, Bridges, Wastewater, and Water Projects. Also includes significant equipment purchases, planning schedules, and options for financing.
Completed the Project Approval Environmental Documentation (PA/ED) Phase of the Camino del Mar Bridge Replacement Project.
Continued design and construction work on the City’s multi-year program to systematically identify, prioritize, and implement water, wastewater, and roadway pavement rehabilitation projects.
Continued preliminary engineering and environmental permitting activities for Riverpath Del Mar Phase 3, connecting the Grand Avenue Bridge to Crest Canyon Trailhead. 26 March 18, 2024 Item 10
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Completed essential building repairs to 17th Street/20th Street/25th Street Lifeguard Buildings.
Completed construction of Del Mar Tot Lot Replacement Project. Continued design of priority storm drain repairs for future Capital Improvement Project. Continued facility maintenance program for City Hall, City buildings, various lifeguard towers, and public facilities throughout the City.
Installed Storm Drain Capture Devices as required by the City’s Municipal Stormwater Permit issued by the California Regional Water Quality Control Board. Completed over 150 Trip Hazard Repairs throughout the City of Del Mar as part of the annual sidewalk repair program.
Completed resurfacing and restriping 21st Street Tennis Courts. Completed annual major arterial bike lane repair program. Completed design of annual Water, Wastewater, and Paving Capital Improvement Project. Continued the Citywide Pavement Rehabilitation Program based on a system-wide condition assessment and the prioritization program.
Completed engineering assessment of San Dieguito Drive development. Completed engineering design of the Coast Boulevard Pedestrian Improvement Project. Completed design and installation of four traffic signal battery backup systems at signalized intersections.
Completed conceptual design of the 20th Street Lifeguard Tower Driveway Project. Continued drainage alternatives analysis for the Hoska Alley Project. Completed construction for the Tewa/10th Street UUD Utility Undergrounding Project. Continued design and permitting for the Stratford Court South (UUD 1A) Utility Undergrounding Project.
Continued design and permitting for the Crest Canyon (UUD X1A) Utility Undergrounding Project.
Planning and Community Development
The Planning and Community Development Department is responsible for five functional areas within the City, which include Long Range Planning, Current Planning, Building & Safety, Code Enforcement, and the Clean Water Program. The Department has a robust work program of special projects that cover various topic areas including implementation of General Plan and State Housing law, affordable housing, regulation of short-term rentals, parking, hazard mitigation and adaptation planning. Significant milestones accomplished include:
The City completed the required public process for solicitation of consulting services and consultant selection that resulted in consulting services agreements for affordable housing consulting services with Whitaker Real Estate Services (WRES) in July 2022; and economic consulting services with Keyser Marston Associates Inc. (KMA) and David Taussig Associates (DTA) in October 2022.
The City completed various items related to implementation of the Del Mar Sea level Rise Adaption Plan including submittal of a comment letter on the California Coastal Commission’s proposed Public Trust Doctrine Policy (July 2022), coordination with SANDAG on a Regional Beach Sand Nourishment project (RBSP 3) and coordination with the cities of Solana Beach and Encinitas and United States Army Corps on their large-scale beach nourishment projects, solicitation of state and federal funds to 27 March 18, 2024 Item 10
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support local beach nourishment, and coordination with Southern California Edison on implementation of the fall 2022 beach nourishment placement on Del Mar beach. On December 14, 2022, the California Coastal Commission conditionally approved a Coastal Development Permit for the City’s Riverpath Del Mar Phase 3 trail extension project.
The City resumed work on the Short-Term Rental Regulations in January 2023, which included data collection and formulation of a draft policy and regulatory framework for processing of a draft Ordinance through local adoption and Coastal Commission certification review in 2024.
In January 2023, the City completed Phase II housing feasibility studies that identify the financial feasibility related to construction of affordable housing within multiple dwelling unit development and potential incentives to facilitate affordable housing development. The City Council also adopted Ordinances applicable to Public Facilities and Public Parkland sites to complete necessary map corrections for consistency between the General Plan, Zoning Code, and Local Coastal Program; Coastal Commission certification is anticipated in February 2024. In February 2023, the Coastal Commission approved a Coastal Development Permit to authorize implementation of changes to the City’s Paid Parking Program that applies citywide and facilitates public access to the City’s shoreline. In March 2023, the City Council approved the 2021 Annual Housing Element Progress Report and subsequently submitted the report to HCD.
The 6th Cycle Housing Element (planning period 2021-2029) was re-adopted by the City Council on April 3, 2023 and certified by the State Department of Housing and Community Development (HCD).
In April 2023, the City Council adopted the Mitigated Negative Declaration (MND) environmental document for the Camino del Mar bridge replacement project. The project is currently in the engineering and design phase. Associated permit approvals will be sought in early 2024 to facilitate additional data collection and studies and resource agency approvals.
In spring 2023, the Coastal Commission approved a Coastal Development Permit, the State Lands Commission approved a lease, and the California Department of Fish and Wildlife approved a Streambed Alteration Agreement for the City’s Sand Compatibility Opportunistic Use Program (SCOUP). The City obtained approval from the Regional Water Quality Control Board in 2022. Approval from the United Stated States Army Corps of Engineers is still pending and is anticipated to be completed in early 2024.
In June 2023, the City Council adopted an Ordinance/LCPA to implement Senate Bill 9 requirements to accommodate multiple unit development and subdivisions of single dwelling unit lots. The Ordinance/LCPA is pending certification by the Coastal Commission in 2024.
Technological & Administrative Enhancements
The City completed a TRAKIT upgrade and e-TRAKIT implementation to provide public access to permit and planning project information and online payments. The project included the implementation of a 3% service fee for credit card payments to help offset merchant fee costs. The project also included integration with the Finance System to automate the recording of payments, reducing the amount of data entry required by staff. 28 March 18, 2024 Item 10
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The City also outsourced business license administration from TRAKIT to HdL which resulted in a significant improvement to operational efficiency and customer service by allowing online payments, applications, and renewals for the public.
Looking Forward -- Citywide Planning Activities
Upcoming Capital Improvement Projects
As part of the City’s 10-year Capital Improvement Program (CIP), there will be continued reinvestment in Del Mar infrastructure. Several planned projects for Fiscal Year 2023-2024 include:
Continue the Engineering Design Phase of the Camino del Mar Bridge Replacement Project.
Complete Environmental Permitting, Engineering Design and Construction Contract Procurement activities for Riverpath Del Mar Phase 3, connecting the Grand Avenue Bridge to Crest Canyon Trailhead.
Continue building repairs to 17th Street/20th Street/25th Street Lifeguard Buildings. Complete Building repairs to Public Works Building.
Complete construction of Priority Storm Drain Capital Improvement Repairs. Continue comprehensive City sidewalk risk hazard removal program. Continue annual major arterial bike lane repair program. Continue facility maintenance program for City Hall, City buildings, various lifeguard towers, and public facilities throughout the City.
Complete Engineering Design Phase of annual Water, Wastewater, and Paving, Capital Improvement Projects.
Complete an updated citywide pavement assessment, including a prioritized schedule and estimated costs for pavement improvements and repairs in conjunction with the Citywide Pavement Rehabilitation Program.
Complete engineering design to develop private section of San Dieguito Drive. Complete drainage alternatives analysis and engineering design of Hoska Alley Development Project.
Complete construction of Coast Boulevard Pedestrian Improvement Project. Complete topographic survey and geotechnical studies of the Jimmy Durante Boulevard Bluff Development Project.
Complete design and administrative design review of 20th Street Lifeguard Tower Driveway Project.
Completed design and installation of three traffic signal battery backup systems at signalized intersections.
Complete design of Ocean View Drainage Brow repairs.
Complete design, permitting, and start construction for the Stratford Court South (UUD 1A) Utility Undergrounding Project.
Complete design and permitting for the Crest Canyon (UUD X1A) Utility Undergrounding Project.
Form the district and proceed with preliminary design for the Stratford Court North (UUD 1B) Utility Undergrounding Project.
Form the district and proceed with preliminary design for the Beach Colony (UUD 2) Utility Undergrounding Project.
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Housing-Related Projects with Local Coastal Program Amendments in Process:
Public Facilities (PF) and Public Parkland (PP) Zoning and LCP Amendments – This is a package of clean-up amendments that are necessary to correct errors on the City’s LCP Land Use Designation Map and Zoning Map and implements one milestone identified in the Housing Element as required for Program 1H (Public Facilities). The Ordinance/LCPA was adopted by the City Council January 9, 2023. Action by the CCC is anticipated to occur by February 2024.
Senate Bill 9 Implementation Ordinance/LCPA – This Ordinance/LCPA was adopted by the City Council on June 19, 2023. It is necessary to implement State housing law and is identified in the Housing Element as one milestone required for implementation of Program 6B (Affirmatively Furthering Fair Housing) as a strategy to create housing opportunities for moderate income, lower income, and special needs households. The adopted SB 9 Ordinance (June 2023) will not take effect until the City completes processing of the associated Local Coastal Program Amendment in accordance with the Coastal Act. Coastal Commission certification is needed to facilitate processing of permit applications for proposed duplex development and urban lot splits in single dwelling unit zones in accordance with the provisions of SB 9. The Planning and Community Development Department will commence processing applications for projects consistent with SB 9 upon Coastal Commission certification of the new ordinance. Action by the CCC is anticipated to occur by August 2024. Accessory Dwelling Unit (ADU) Regulations Ordinance/LCPA – This Ordinance/LCPA was adopted by the City Council on December 18, 2023. The Housing Element requires City Council action to be completed by December 2023 in order to implement various Housing Element programs including: Program 2F Tiny Homes, Program 2A ADU Incentive Program, Program 2B ADU Amnesty Program, Program 5A Expansion of Existing Multi-Unit Development, and Program 6B Affirmatively Furthering Fair Housing. Action by the CCC is anticipated to occur by June 2025.
Affordable Housing and Housing Element Implementation
In fiscal years 2023-2024 and 2024-2025, City Staff will continue to implement its adopted housing action programs, including continued efforts to secure a housing agreement with the State 22nd District Agricultural Association to provide affordable housing opportunities at the Fairgrounds (Housing Element Program 3A) as further described below. Amendments to Facilitate Affordable Housing in the Central Commercial (CC) Zone and PF Zone – The City is required to take actions to amend the Community Plan, Del Mar Municipal Code, and LCP to allow mixed use development with an affordable housing component up to a density of at least 20 dwelling units per acre as a permitted use. This is required to implement actions including a Community Plan amendment, Zoning Code amendment, and LCP amendment as identified in the Housing Element for Program 1C and Program 1H. The City is seeking environmental consulting services for preparation of an environmental document and processing of amendments to facilitate affordable housing in the Central Commercial (CC) Zone and the Public 30 March 18, 2024 Item 10
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Facilities (PF) Zone. The Housing Element requires the City Council decisions to be completed by April 2024. This project is required to create housing capacity per the certified Housing Element plan and must be timely completed or there are potential penalties that can be imposed by the State. City staff anticipates a Planning Commission public hearing in February 2024 prior to City Council public hearings in March/April 2024. Following City Council adoption, the Ordinance/LCPA must be submitted to CCC for review and final certification for the Ordinance/LCPA to take effect. October 2025 is estimate for final completion of CCC actions. Update to Density Bonus Regulations for Compliance with State law – The City is required to repeal and replace its existing density bonus regulations (DMMC Chapter
30.90) in order to comply with State law. Program 1G requires this Ordinance to be completed by June 2024. City staff anticipates presentations to the Planning Commission in March 2024 and City Council in April/May 2024. Update to Inclusionary Housing and Condominium Conversion Regulations – The City is required to update its existing inclusionary housing regulations (DMMC Chapter 24.21) to comply with State law. Program 4D Inclusionary Housing and Program 4E Condominium Conversions are required to be completed by June 2024.
This will include a condominium conversion-related item for implementation of the North Commercial (NC) Zoning Ordinance Referendum settlement agreement. City staff anticipates a Planning Commission public hearing in March 2024 and City Council public hearings in April/May 2024.
Short Term Rental (STR) Ordinance/LCPA - The City held public discussions for this special project in the July, September, and October 2023 City Council meetings where the Council reviewed data on existing STRs, identified Guiding Principles, reviewed past court and CCC decisions, and provided direction. Staff will seek additional policy direction from the City Council in January 2024, including review of potential revenues from an STR Transient Occupancy Tax (TOT) or fee. The City is required to adopt a STR Ordinance/LCPA by December 2024 per Housing Element Program 5C. This will include processing of a related component per the settlement agreement for the North Commercial (NC) Zoning Ordinance Referendum. City staff anticipates a Planning Commission hearing in April 2024 and City Council public hearings in May/June 2024.
Once the City Council adopts the Ordinance/LCPA, it must be submitted to the CCC for review and certification to become effective. December 2025 is the estimate for final completion of CCC actions.
Community Plan Update: Environmental Justice and Safety Elements – The City is required to amend the Del Mar Community Plan to adopt a new Environmental Justice Element per Program 6E and Program 6B to Affirmatively Further Fair Housing. The City is also required to update the existing Safety Element per Program 6H. This update was required to have been completed by June 2023 per the Housing Element but has been delayed due to workload constraints. The City will be utilizing 72 hours of free technical assistance available from SANDAG to resume work in January 2024 and supplement the staff work completed to-date. Staff anticipates presenting the item to Planning Commission in May 2024 and City Council in June/July 2024. 31 March 18, 2024 Item 10
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New Overlay Zone and Incentives to Facilitate Creation of Affordable Housing - The City is required to create new incentives for multi-dwelling unit development with an affordable housing component to satisfy multiple programs in the Housing Element. In January 2023, Stephen Dalton Architects and Keyser Marston Associates presented the findings of affordable housing economic analysis and feasibility studies to the City Council relating to various sites identified in the Housing Element sites inventory. The report included recommendations to create a new Affordable Housing Overlay Zone with site-specific incentives per Program 1D. The City is seeking environmental consulting services to facilitate processing of the Zoning Code amendment, LCP amendment, and Rezone actions to implement Program 1D and Program 1I (Streamlining and Incentives for Affordable Housing). Program 1I has a deadline of December 2023 per the Housing Element, which will be partially addressed by a separate Ordinance for the ADU Incentive Program per Program 2A. Due to constrained staff resources, the additional streamlining and incentives specific to multiunit development are being processed separately. City staff will coordinate these efforts with the Objective Design Standards work plan described below. Prior to bringing forward an Ordinance to create the new overlay zone (with site-specific incentives and rezone properties as applicable to apply the new overlay zone), staff anticipates drafts will be available in early 2024 prior to the Planning Commission and City Council public hearings in spring/summer 2024. Following City Council adoption, the Ordinance/LCPA must be submitted to CCC for review and final certification to take effect.
Objective Design Standards – The City is required to adopt Objective Design Standards by June 2024 per Program 6G. Objective standards are defined as measurable, verifiable, and involve no personal judgement. The project is intended to facilitate affordable housing development and maintain community character in accordance with the Del Mar Community Plan and the LCP. The City has a consultant contract with Ascent Environmental Inc. to assist staff with creation of these standards.
The Design Review Board will serve as the advisory body for development of the standards. The Planning Commission (advisory) and City Council will serve in their typical respective legislative roles for adoption of the Ordinance following a “kick off” public workshop in December 2023, and collection of public input via a public survey.
The process will involve DRB meetings in early 2024, and Planning Commission and City Council consideration of the Ordinance in spring/summer 2024. The City has Cycle 2 Housing Acceleration Program (HAP) Grant Funds for the project. The project may require additional time to accommodate public participation through December 2024, which aligns with the timing per the HAP Grant.
Planning and Development of Affordable Housing on State Fairgrounds - The City is seeking to establish control of a one to two-acre site within the State Fairgrounds property to develop lower income housing consistent with Housing Element Program 3A. The City is in process of finalizing a draft Exclusive Negotiating Rights Agreement (ENRA) between the City and 22nd DAA. Staff anticipates the ENRA will be ready for City Council and 22nd DAA Board consideration in early 2024. This agreement is required to be completed by April 2024.
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SANDAG allocated $1.5 million in Cycle 2 HAP Grant Funds to Del Mar to fund studies related to the plan for affordable housing on the Fairgrounds including predevelopment studies, environmental assessments, and related affordable housing consulting services.
Once an agreement is in place, the City will coordinate with 22nd DAA to conduct predevelopment studies to identify more precisely the site location and project description for an affordable housing project and information relating to:
Site design feasibility
Supplemental economic studies, financial feasibility analysis, and identification of property encumbrances
Transportation and traffic studies to assess mobility and access Environmental assessment work (i.e., geotechnical/soils analysis, biology report, wetlands delineation, sea level rise resiliency) Assessment of infrastructure-related conditions (i.e., water, sewer, stormwater, roadways, access improvements, flood control/SLR resiliency) During the ENRA period, the City will also be negotiating the terms of a long-term ground lease for the selected project site. The information collected will facilitate negotiations of the ground lease, selection of a developer, and future agreements for developer construction and management and operation of the affordable housing once complete. Subsequent project phases will be conducted by the selected developer, including the project environmental analysis, design (conceptual, preliminary, final), entitlement approvals, public improvements, and construction by June 2031. Affordable Housing on City-Owned Sites on 10th Street and 28th Street – In June 2022, the City completed feasibility studies confirming that the two City-owned sites at 10th Street and 28th Street identified in the Housing Element sites inventory have capacity for at least seven lower-income units. Program 3B requires the City, by April 2024, to contact Habitat for Humanity and/or similar non-profit organizations to solicit interest in a potential partnership for two small affordable housing developments per the Housing Element. A City Council decision on whether to proceed with such a project or an alternative strategy (i.e., land disposition) is required by January 2025. If building permits for at least seven lower income units are not issued by January 2027, then the City will be required to identify alternative sites with appropriate zoning and development standards by December 2027.
Efforts to Address the Needs of Special Needs Households – This relates to Housing Element Program 4A (residential care facilities) and Program 4B (supportive housing, transitional housing, and other housing needs for the homeless and at-risk populations). The City must process an Ordinance by December 2024 to amend the Zoning Code and LCP to update land use categories and permitted use allowances for residential care, transitional housing, and supportive housing. The City has HAP grant funds to support consulting services, preparation of informational handouts, public outreach, policy formation and regulations in compliance with State and Federal law, and processing of the Resolution and Ordinance through noticed public hearings of the Planning Commission, City Council, and Coastal Commission. The City is preparing to 33 March 18, 2024 Item 10
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initiate the consultant selection process by December 2023. City staff anticipates a Planning Commission public hearing in August 2024 and City Council public hearings in September/October 2024. The Ordinance/LCPA must be submitted to CCC for review and final certification to take effect. December 2025 is the estimate for final completion of CCC actions.
Hazard Mitigation and Adaptation Planning; Other projects Conceptual Living Levee Design – The conceptual design for a living levee along the banks of the San Dieguito River is an adaptation measure and special project in process to implement the City’s adopted plan for climate change and sea level rise. The City Council identified construction of a “living levee” with vegetated berms between the San Dieguito River and existing development as a priority adaptation measure to provide flood risk reduction and minimize the projected effects of rising sea levels in accordance with the City’s Sea Level Rise Adaptation Plan (Environmental Science Associates 2018). The living levee is a type of natural flood adaptation infrastructure that can provide coastal resilience, stabilize the shoreline, and protect adjacent communities from flooding. In June 2024, the City’s consultant (Moffat & Nichol) will present the preliminary conceptual design and options for grant funding to develop the project. The living levee is a vegetated berm that can provide flood adaptation to support development of housing in accordance with the Housing Element, including Program 1D (Overlay Zone sites in the Floodplain), Program 3A (Fairgrounds), and Program 3B (28th Street lot).
Sand Compatibility Opportunistic Use Program (SCOUP) and Beach Nourishment - The City obtained state agency permit approvals from the Coastal Commission, State Lands Commission, Regional Water Quality Control Board, and California Fish and Wildlife to implement a Sand Compatibility Opportunistic Use Program (SCOUP) and associated beach nourishment in accordance with the City’s priority adaptation strategy to minimize flood risk. The City is actively seeking the final federal agency approval from the United States Army Corps of Engineers to complete final SCOUP approval. The SCOUP will facilitate implementation of a future beach nourishment project. The City is continuing to coordinate with Southern California Edison on their required mitigation efforts to maintain the San Dieguito Lagoon and river inlet in accordance with the applicable performance standards and place beach quality sand on the Del Mar beach. The City was awarded $500,000 in 2023-2024 State funds for beach nourishment from Assembly Member Boerner (District 77). Update to the City’s public tree manual policy and updating the Tree, Scenic Views and Sunlight Ordinance. Establish overall workplan associated with these updates, including the preparation of a request for qualifications, retention of a consultant, and collaboration with the City Attorney’s Office to update relevant sections of the Municipal Code. The City will also prepare related entitlements and environmental review. Anticipated completion in Fiscal Year 2025.
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Technological & Administrative Enhancements
Looking ahead, for Fiscal Year 2023-2024, other initiatives underway related to technological enhancements include the implementation of electronic signatures for contract and personnel document routing, computer replacements and upgrades to Windows 11, video-conferencing equipment upgrades, and implementation of electronic document recording for City Clerk department. In addition, the city continues to evaluate options for future financial system replacement.
Financial Policies
General Fund Contingency (GFC) Reserve
Historically, it has been the City’s policy and practice to establish a budget that is balanced and has a minimum contingency reserve of 10% of annual operating expenditures in the General Fund in order to ensure the City’s continuing financial health. However, during the preparation of the Fiscal Years 2019-2020 and 2020-2021 Operating and Capital Budget, the City Council established a goal to increase the GFC Reserve by one percent (1%) each year until it reaches a 25% reserve, or 90 days of operations. As a result of the economic impacts to the City’s financials related to the COVID-19 pandemic, the goal to reach a 25% General Fund Contingency was temporarily deferred until such time that the City has economically recovered. The FY 2023-2024 Budget that was adopted in June 2023, projects a full recovery of all revenue sources and reported a GFC of 27.87%, exceeding the City Council goal to reach a 25% GFC by Fiscal Year 2024-2025.
In June 2021, based on financial projections and the uncertain economic impact the pandemic was going to continue to have on Del Mar’s revenue, the City Council approved the Fiscal Years 2021-2022 and 2022-2023 budget with the goal of maintaining essential services to the community, and limiting operating, capital and special project expenditures, while increasing expenditures in a slow and gradual manner as additional revenues became available.
Although revenue projections in Fiscal Year 2021-2022 came in higher than expected, some General Fund revenue sources had not reached pre-COVID levels. In June 2022, an update to the Fiscal Year 2022-2023 budget was presented to the City Council with significant adjustments that included a full restoration of operational services, with the goal to restore capital and special project expenditures as revenue became available. The final GFC for year ending June 30, 2023, is 39.83% or 145 days of operations, which is well above the required minimum contingency reserve. Based on the positive results, the City Council authorized the transfer of additional funds to the Housing, Pension, and Capital reserves in Fiscal Year 2023- 2024.
Finnell Plan
In 2007, the City Council adopted a financial objective, referred to as the Finnell Plan, to provide funding for future capital projects. The Finnell Plan was created in order to provide an automatic funding mechanism for capital projects, by constraining the growth in operating expenditures to be below the growth in revenues. The difference is then transferred to the CIP Reserve to assist in funding the City’s capital projects. Due to the economic crisis caused by the pandemic, implementation of the Finnell Plan continued to be deferred in FY 2022-2023 and no transfer were included in the adopted budget. However, based on positive results in FY 2021-2022, the creation of the Capital Improvement Reserve Fund with an initial transfer of $200,000 was approved by the City Council in FY 2022-2023. 35 March 18, 2024 Item 10
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CITY OF DEL MAR, CALIFORNIA
DIRECTORY OF OFFICIALS
YEAR ENDED JUNE 30, 2023
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CITY OF DEL MAR, CALIFORNIA
ORGANIZATIONAL CHART
YEAR ENDED JUNE 30, 2023
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FINANCIAL SECTION
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CLA (CliftonLarsonAllen LLP) is an independent network member of CLA Global. See CLAglobal.com/disclaimer.
CliftonLarsonAllen LLP
CLAconnect.com
(1)
INDEPENDENT AUDITORS’ REPORT
City Council
City of Del Mar, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the businesstype activities, each major fund, and the aggregate remaining fund information of the City of Del Mar (the City), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’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, each major fund, and the aggregate remaining fund information of the City as of June 30, 2023, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) 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 Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City 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.
Change in Accounting Principle
As described in Note 1 to the financial statements, effective July 1, 2022, the City adopted new accounting guidance, GASB No. 96, Subscription-Based Information Technology Arrangements. Our opinions are not modified with respect to this matter.
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.
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City Council
City of Del Mar, California
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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’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 GAAS 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 GAAS 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’s internal control. Accordingly, no such opinion is expressed.
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’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.
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City Council
City of Del Mar, California
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Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the budgetary comparison – general fund and related notes, and the miscellaneous and safety pension plans schedules of proportionate share of the net pension liability and schedules of contributions be presented to supplement the financial statements. Such information is the responsibility of management, and 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 inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The individual fund schedules and combining financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with GAAS. In our opinion, the individual fund schedules and combining financial statements are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditors’ 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. 46 March 18, 2024 Item 10
City Council
City of Del Mar, California
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Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 26, 2024, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s 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 City’s internal control over financial reporting and compliance.
CliftonLarsonAllen LLP
Irvine, California
January 26, 2024
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MANAGEMENT’S DISCUSSION AND ANALYSIS
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MANAGEMENT'S DISCUSSION AND ANALYSIS
As management of the City of Del Mar (City), we offer readers this discussion and analysis of the City’s financial performance for the fiscal year ended June 30, 2023. The accuracy of the data presented and the completeness and fairness of the presentation, including all disclosures in this report, are the responsibility of the City. The report has been prepared in accordance with Generally Accepted Accounting Principles (GAAP) as promulgated by the Governmental Accounting Standard Board (GASB). Readers are encouraged to consider the information presented here in conjunction with additional information, which can be found in the Introductory Section of this report, and the City’s financial statements, which follow this discussion.
FINANCIAL HIGHLIGHTS
Economic Background
The City of Del Mar continues to be in a stable financial position. The City’s largest revenue source is its property tax base, which continues to be very stable and has increased each year since 1995. Due to the City’s highly desirable location on the coast, immediately north of the City of San Diego, its real estate market does not typically experience the downturns that the inland areas experience in periods of economic decline. As the San Diego region continues to develop, Del Mar has become increasingly desirable, and this is reflected in its property values.
The two next largest revenues, transient occupancy tax (TOT) and sales and use tax (sales tax), are heavily tourist based. Both sales tax and TOT recovered to pre-pandemic levels in Fiscal Year 2022-2023.
In Fiscal Year 2022-2023, the City received approximately $0.55 million (7.09%) more in property tax; $0.40 million more in TOT (11.59%); $0.24 million (11.48%) more in sales tax; and $0.06 million (1.77%) less in Measure Q revenues in comparison to Fiscal Year 2021-2022, which overall represents positive results as the City recovers and stabilizes from the economic downturn resulting from the COVID-19 pandemic. When compared to Fiscal Year 2018-2019, the last full pre-pandemic fiscal year, TOT and Measure Q revenues recovered and exceeded pre-pandemic levels during Fiscal Year 2021-2022. Sales tax lagged in recovery, reaching and exceeding pre-pandemic levels by $0.10 million (4.43%) in Fiscal Year 2022-2023. Measure Q revenue came in slightly lower this year when compared to Fiscal Year 2021-2022, due to the slight decrease in online purchases. Measure Q revenue continues to be a stable revenue source dedicated to Downtown Streetscape, Shores Park, and Citywide Undergrounding.
This year, the Governmental Accounting Standards Board (GASB) implemented Statement No. 96, Subscription-Based Information Technology Arrangements. This standard defines the best accounting and financial reporting practices for subscription-based information technology 51 March 18, 2024 Item 10
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arrangements, specifically when it comes to contracts with governments and government entities. The City has implemented this Statement and it is discussed in Note 1 D of the Notes to Basic Financial Statements section of this report.
The discussion and analysis below compares Fiscal Year 2022-2023 (FY 22-23) to Fiscal Year 2021-2022 (FY 21-22). All variances are relative to FY 21-22 results. FY 22-23 financial highlights include the following:
Financial Highlights
• The City’s total assets in excess of its liabilities as of June 30, 2023, were $112.23 million.
• Citywide total net position increased by $9.22 million (8.95%) during the current fiscal year, indicating a consistent and stable financial condition. The change in net position is largely due to the increase in total cash and investments, which was a result of keeping expenses at or below projections and receiving more revenue than anticipated.
A net increase in total assets of $5.89 million (3.95%) is primarily due to the net of an increase of $5.98 million (17.60%) in current assets and a decrease in capital assets of $0.09 million (0.07%). The Citywide non-current asset loss is largely related to how capital assets are reported.
A net increase in total liabilities of $6.44 million (15.58%) is primarily due to the net of an increase in noncurrent liabilities related to a reduction in net pension liability of $7.38 million (23.55%) and a decrease in current liabilities related to accounts payable, unearned revenue, and long-term debt due within one year of $0.94 million (9.45%).
The deferred outflows/inflows of resources resulted in a net change of $1.62 million, largely related to the recognition of leases and decrease in deferred inflows of resources from pension plans.
As of June 30, 2023, the City’s governmental funds reported combined fund balances of $23.08 million, which is an increase of $6.00 million (35.16%) from June 30, 2022.
The increase in fund balance is mainly attributable to the surplus of revenue received in excess of expenditures for the year. Of the $23.08 million in fund balance, $0.002 million is non-spendable for prepaid items; $1.82 million is restricted; $0.28 million is committed; $14.58 million is assigned for specific activities; and $6.40 million is unassigned.
At the end of the current fiscal year, the fund balance for the General Fund is $19.98 million. This balance is available for spending at the City Council’s discretion, and is equal to 117.64% of the total fiscal year expenditures of $16.99 million, and 77.85% of total revenues of $25.67 million, before other financing sources (uses). The Capital Projects Fund has a fund balance of $0.99 million, and other non-major governmental funds have combined fund balances of $2.10 million, at June 30, 2023. 52 March 18, 2024 Item 10
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OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements, which are made up of three components: 1) government-wide financial statements; 2) fund financial statements; and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves.
Government-Wide Financial Statements. The Government-wide Financial Statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private-sector business.
The Statement of Net Position presents information on the City’s assets and deferred outflows of resources and total liabilities, and deferred inflows of resources, with the difference between the two reported as total net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.
The Statement of Activities presents information showing how the government's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., earned but unused vacation and compensated time leaves).
Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, public works, and parks and recreation.
The business-type activities (proprietary fund type) of the City include the Water, Wastewater, and Clean Water Funds.
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 City’s funds can be divided 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.
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. However, this information does not encompass the additional long-term focus of the government-wide statements, reconciliations that explain the relationship or differences between governmental funds and governmental activities following each of the governmental fund statements. 53 March 18, 2024 Item 10
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The City maintains twelve individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for two funds that are considered to be major funds. These two funds consist of the General Fund, and the Capital Improvement Program Fund. Data from the other ten governmental funds are combined into a single, aggregated presentation and are considered non-major funds.
A budgetary comparison statement has been provided for the funds that have an adopted budget to demonstrate compliance with this budget.
Proprietary Funds. The City of Del Mar maintains two different types of proprietary funds.
Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. Enterprise funds are used to account for the City’s Water, Wastewater, and Clean Water activities. Internal Service Funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The City uses an internal service fund to account for its self-insured Workers’ Compensation activities. Because these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements.
Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for Water and Wastewater, which are considered to be major funds, and Clean Water, which is considered a non-major enterprise fund. Conversely, the Internal Service Fund is combined into a single, aggregated presentation in the proprietary fund financial statements.
Fiduciary Funds. The City maintains one type of fiduciary fund, the Custodial Funds. The fiduciary fund is used to account for assets held by the City in a trustee capacity or as an agent for individuals, private organizations, or other governments. The Custodial Funds account for four Assessment District (A.D.) bond issues, Stratford and Luneta Undergrounding A.D. 1989-01; Seawall Refinance A.D. 1999-01; Ocean View/Pines A.D. 2005-01; and Sunset Undergrounding A.D. 2007-02.
Since the resources of the fiduciary fund are not available to support the City’s own programs, they are not reflected in the government-wide and primary governmental fund financial statements but are reported in the financial section.
Notes to the 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 in this report.
Other Information. In addition to the basic financial statements and accompanying notes, this report also presents certain Required Supplementary Information concerning the City’s progress as compared to the budget. The Required Supplementary Information section can be found in this report.
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GOVERNMENT-WIDE FINANCIAL ANALYSIS
Net Position
The analysis that follows focuses on total net position (Table 1) and changes in net position (Table 2) of the City’s governmental and business-type activities. The City’s net position is made up of three components: net investment in capital assets; restricted net position; and unrestricted net position.
As noted earlier, net position may serve as a useful indicator of a government's financial position over time. In the case of the City of Del Mar, combined net position (governmental and business-type activities) totaled $112.23 million as of June 30, 2023.
This is an increase of $9.22 million (8.95%), compared to June 30, 2022. 2023 2022 2023 2022 2023 2022
Current assets $31,904,990 $26,493,599 $8,050,094 $7,481,161 $39,955,084 $33,974,760 Capital assets 89,898,380 89,216,204 25,443,994 26,211,537 115,342,374 115,427,741 Total assets 121,803,370 115,709,803 33,494,088 33,692,698 155,297,458 149,402,501 Deferred outflows of resources 5,378,616 2,275,036 1,549,244 581,765 6,927,860 2,856,801 Current liabilities 7,740,652 8,243,512 1,305,360 1,746,320 9,046,012 9,989,832 Non-current liabilities 29,973,648 24,116,978 8,760,088 7,233,187 38,733,736 31,350,165 Total liabilities 37,714,300 32,360,490 10,065,448 8,979,507 47,779,748 41,339,997 Deferred inflows of resources 2,024,155 6,339,344 195,487 1,573,002 2,219,642 7,912,346 Net investment in capital assets 72,814,107 71,521,446 20,591,860 20,926,230 93,405,967 92,447,676 Restricted 1,822,991 1,123,980 - - 1,822,991 1,123,980
Unrestricted 12,806,433 6,639,579 4,190,537 2,795,724 16,996,970 9,435,303 Total net position $87,443,531 $79,285,005 $24,782,397 $23,721,954 $112,225,928 $103,006,959 Governmental Activities Business-type Activities
TABLE 1
CITY OF DEL MAR
NET POSITION
Total
The largest component of the City’s net position, $93.41 million, is net investment in capital assets (e.g., land, buildings, improvements, equipment, construction in progress, and infrastructure), and is less any related debt, used to acquire those assets, that is outstanding. This increased by $0.96 million (1.04%) from the prior fiscal year. An increase is shown in this category due to capital projects expenditures that were deferred during the pandemic. The City uses these capital assets to provide services to citizens and they are not available for future spending.
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The restricted portion of the City’s total net position, which represents resources subject to external restrictions on how they may be used by the City, is $1.82 million. This had an increase of $0.70 million (62.19%) from the prior fiscal year amount of $1.12 million. The remaining unrestricted net position of $17.0 million, which reflects an increase of $7.56 million (80.14%) from the prior year, is largely due to recovery of all large revenues sources that exceeded expenditures for the current year.
As of June 30, 2023, the City has positive balances in both categories of governmental and business-type net position. The total net position in the governmental activities increased by $8.16 million (10.29%) and the total net position in business-type activities increased by $1.06 million (4.47%).
Changes in Net Position
The analysis that follows in Table 2 focuses on the changes in net position of the City’s governmental and business-type activities.
2023 2022 2023 2022 2023 2022
Revenues:
Program Revenues:
Charges for services $5,955,412 $5,188,162 $8,649,622 $8,824,290 $14,605,034 $14,012,452 Operating grants and contributions 460,603 426,084 75,527 57,316 536,130 483,400 Capital grants and contributions 1,933,809 484,867 - - 1,933,809 484,867 General Revenues:
Property taxes 8,322,387 7,771,396 - - 8,322,387 7,771,396 Sales and other taxes 10,168,997 9,562,416 - - 10,168,997 9,562,416 Intergovernmental/unrestricted 71,964 151,499 - - 71,964 151,499 Investment Income 559,904 (139,964) 82,951 (112,089) 642,855 (252,053) Other 164,988 549,295 - - 164,988 549,295
Total revenues 27,638,064 23,993,755 8,808,100 8,769,517 36,446,164 32,763,272 Expenses:
General government 8,322,651 7,424,735 - - 8,322,651 7,424,735 Public safety 7,185,111 7,626,541 - - 7,185,111 7,626,541 Public works 2,146,591 2,644,194 - - 2,146,591 2,644,194 Parks and recreation 1,069,630 1,059,781 - - 1,069,630 1,059,781 Community services - - - - - -
Interest and long-term debt 529,709 550,712 - - 529,709 550,712 Enterprise operations - - 7,973,503 8,017,615 7,973,503 8,017,615 Total expenses 19,253,692 19,305,963 7,973,503 8,017,615 27,227,195 27,323,578 Increase (decrease) in Net Position
before other revenues and transfers 8,384,372 4,687,792 834,597 751,902 9,218,969 5,439,694 Transfers (225,846) (87,871) 225,846 87,871 - -
Change in net position 8,158,526 4,599,921 1,060,443 839,773 9,218,969 5,439,694 Net position - beginning of year 79,285,005 74,685,084 23,721,954 22,882,181 103,006,959 97,567,265 Net position - end of year $87,443,531 $79,285,005 $24,782,397 $23,721,954 $112,225,928 $103,006,959 TABLE 2
CITY OF DEL MAR'S CHANGES IN NET POSITION
Governmental Activities Business-type Activities Total
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Governmental Activities:
The City’s net position from governmental activities increased by $8.16 million (10.29%) in the current fiscal year, accounting for 88.49% of the total $9.22 million increase in the City’s total net position. Total revenues from governmental activities of $27.64 million increased by $3.64 million (15.19%), compared to the prior fiscal year. The cost of all govermental activities in FY 22-23 was $19.25 million, remaining pretty flat with a slight decrease of $0.05 million (0.27%), over the prior fiscal year.
As shown in the Statement of Activities, governmental activities were financed in part by taxpayers at $5.96 million, which was generated by service revenues received from the performance of these activities, and had an increase of $0.77 million (14.78%) compared to FY 21-22. Increase in this category was largly related to an increase in development shown in the increase of Planning and Building permit revenue; an increase to parking violation revenue; and an increase in investment income. Another $1.33 million was received from other government agencies and other organizations that subsidized certain programs with operating grants and contributions and was largely related to use of the Coronavirus Relief funds to purchase the fire engine which was deferred until the City recovered from the pandemic. In addition, another $1.06 million in revenues came from capital grants and contributions, which increased by $0.58 million (119.22%), compared to the prior fiscal year due to the City receiving more federal funding for capital projects for the Camino del Mar Bridge project when compared to what was received in FY 21-22.
Overall, the City’s governmental program revenues amounted to $8.35 million, an increase of $2.25 million (36.90%) compared to the prior fiscal year. General revenues of $19.29 million increased by $1.39 million (7.79%), in comparison to the prior fiscal year. The City had an increase in property taxes of $0.55 million (7.09%); an increase of sales and other taxes of $0.61 million (6.34%) largely related to recovery of sales tax, TOT, and district tax (Measure Q) revenue; and an increase in other revenue of $0.70 million (500.0%) compared to the prior fiscal year due to the increase of market value on investment.
In comparison to the prior fiscal year, expenditures from governmental activities remained flat with a slight decrease of $0.05 million (0.27%). The key elements contributing to the changes in expenditures from governmental activities are as follows:
An increase of $0.90 million (12.09%) in general government costs largely due to the purchase of the fire engine which was deferred during the pandemic and purchased with the use of Coronavirus recovery funds.
A decrease of $0.44 million (5.79%) in public safety costs and a decrease of $0.50 million (18.82%) in public works, largely related to the decrease of pension cost related to GASB 68.
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Business-type Activities:
The City’s business-type activities increased in net position by $1.06 million (4.47%), for the fiscal year ended June 30, 2023. Business-type activities’ total revenue slightly increased by $0.04 million (0.44%), during the current fiscal year to a total of $8.81 million in revenues. In comparison to the prior fiscal year, charges for services decreased by $0.17 million (1.98%) and was offset by an increase in investment income of $0.20 million (174.0%). Business-type activity costs also slightly decreased during the fiscal year by $0.04 million (0.55%), compared to the prior fiscal year. The increase in revenues and decrease in expenses, resulted in a change in net position of $1.06 million, from the prior fiscal year.
FINANCIAL ANALYSIS OF THE CITY’S FUNDS
As noted earlier, the City of Del Mar uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.
Governmental Funds:
The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spending resources. Such information is useful in assessing the City of Del Mar’s financing requirements. In particular, the 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.
As of June 30, 2023, the City’s governmental funds reported a combined ending fund balance of $23.08 million, which is a $6.0 million (35.16%) increase, in comparison to the prior fiscal year of $17.07 million. The $23.08 million governmental fund balance is composed of $0.002 million in non-spendable; $1.82 million in restricted; $0.28 million in committed; $14.57 million in assigned (not available for new spending); and $6.40 million in unassigned funds (available for new spending).
Table 3 below shows the governmental fund balances for the fiscal years ended June 30, 2023 and June 30, 2022.
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Non-Major
Capital Governmental
FISCAL YEAR 2022-2023 General Improvement Funds Totals
Total revenues $25,670,464 $748,514 $1,337,466 $27,756,444 Total expenditures 16,987,292 1,813,473 2,727,476 21,528,241 Excess (deficiency) of
revenues over expenditures 8,683,172 (1,064,959) (1,390,010) 6,228,203 Total other financing
sources (uses) (4,184,592) 1,695,160 2,263,586 (225,846) Net change in fund balance 4,498,580 630,201 873,576 6,002,357 Fund balance - beginning 15,485,442 360,814 1,227,678 17,073,934 Fund balance - ended $19,984,022 $991,015 $2,101,254 $23,076,291 FISCAL YEAR 2021-2022
Total revenues $22,483,491 $179,056 $1,301,181 $23,963,728 Total expenditures 14,514,881 1,668,692 2,243,642 18,427,215 Excess (deficiency) of
revenues over expenditures 7,968,610 (1,489,636) (942,461) 5,536,513 Total other financing
sources (uses) (2,954,583) 1,542,080 1,324,632 (87,871) Net change in fund balance 5,014,027 52,444 382,171 5,448,642 Fund balance - beginning 10,471,415 308,370 845,507 11,625,292 Fund balance - ended $15,485,442 $360,814 $1,227,678 $17,073,934 TABLE 3
CITY OF DEL MAR
SUMMARY STATEMENT OF REVENUES, EXPENDITURES, and CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
General Fund:
Total governmental funds includes the General Fund, the chief operating fund of the City, which has a fund balance of $19.98 million as of June 30, 2023. This is an increase of $4.50 million (29.05%), in comparison to the prior fiscal year. This increase is due to the net of an increase in total revenues of $3.19 million (14.17%); an increase of operating costs of $2.47 million (17.03%); and an increase in other financing uses of $1.23 million (41.63%).
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Increased revenues of $3.19 million (14.17%) were largely related to increases to taxes of $1.16 million (6.67%) largely due to an increase in TOT and property taxes; an increase to intergovernmental of $1.02 million (1,019.31%) mainly due to use of Coronavirus relief funds for the purchase of a fires truck; an increase to investment income of $0.57 million (632.62%) based on the market rate of value on investments; and an increase to fines and forfeitures of $0.53 million (49.50%) largely due to how parking violations were recorded in the current year since prior year revenue was not available until FY 22-23.
Total expenditures increased by $2.47 million (17.03%) when compared to FY 21-22. The increase was largely related to an increase to general government expenditures of $1.48 million (24.54%) largely due to the purchase of the fire engine; an increase in public safety of $0.46 million (6.37%); and an increase in capital outlay of $0.42 million (46.14%) related to additional capital projects that were deferred due to the pandemic. The ending fund balance is composed of $0.002 million of non-spendable funds for prepaid items; $1.82 million in restricted funds; $0.28 million in committed funds; $14.57million in assigned funds for specific expenditures; and $6.40 million in unassigned funding, which is available for spending at the City’s discretion.
Additional detailed information regarding combined fund balance reserves is included in Note 8 to the Basic Financial Statements.
Major Funds:
As of June 30, 2023, the Capital Improvement Program’s fund balance of $0.99 million, increased by $0.63 million (174.66%) from the prior fiscal year. Due to the positive financial results in FY 21-22, the City Council authorized to re-establish the Capital Reserve Fund with an initial $0.20 million transfer. The fund balance of $0.99 million includes a capital reserve balance of $0.40 million and $0.59 million for encumbered budget funds for capital projects that were not completed in the current year. Total revenues increased by $0.57 million (318.03%) largely due to receiving more local and federal grant funding for the Camino del Mar Bridge project. Total expenditures increased by $0.14 million (8.68%) largely due to more project expenditures in compared to the prior year including the Camino del Mar Bridge project and Pavement Rehabilitation.
Non-major Funds:
The fund balances for other governmental funds or non-major governmental funds increased $0.87 million (71.16%) from the FY 21-22 balance of $1.23 million to $2.10 million at the end of the current fiscal year. The other non-major funds are composed of special revenue funds including Road Maintenance and Rehabilitation Account (RMRA); Gas Tax, Open Space; Supplemental Law Enforcement; Regional Communications System; Grants; Housing; AB 939; Regional Transportation; and Transnet II. The fund balance of $2.10 million is restricted or committed for specific purposes. 60 March 18, 2024 Item 10
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Proprietary Funds:
The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail.
Enterprise Funds: The total net position in the enterprise funds, increased over the prior fiscal year by $1.06 million (4.47%). The City’s Water Fund increased by $0.36 million (2.77%), the Wastewater Fund increased by $0.51 million (4.91%), and the Clean Water Fund increased by $0.19 million (65.59%).
At the end of FY 22-23, the Internal Service fund reported a net position of $0.31 million, which is lower than prior year balance of $0.80 million.
General Fund Budgetary Highlights
The City adopts annual appropriated operating budgets for its governmental funds and reports the results of operations on a budget comparison basis.
In preparing its budgets, the City attempts to estimate its revenues using realistic, but conservative, methods so as to budget its expenditure appropriations and activities in a prudent manner. As a result, the City Council adopts budget adjustments during the course of the fiscal year to reflect both changed priorities and availability of revenues to allow for expansion of existing programs. The original FY 22-23 budget was adopted in June 2021, as part of the two year budget for FY 21-22 and 22-23. The original budget included a full restoration of operational services, with the goal to restore capital and special project expenditures as revenue becomes available. The FY 22-23 budget update adopted in June 2022 included additional capital and special project expenditures related to the City work plan that was approved by the City Council during the Goal Setting Workshop in March 2022.
The City experienced the largest revenue losses in TOT, sales tax, and district tax (Measure Q) during the COVID-19 pandemic. By the end of FY 21-22, both TOT and district tax revenues exceeded pre-pandemic levels. Although lagging in recovery, sales tax reached pre-pandemic levels in the current year, assisting with the favorable budget variance in total revenue of $1.5 million. This positive budget variance primarily reflects revenue realization greater than estimates due to higher tax revenues of $0.62 million; higher licenses, fees and permits of $0.23 million; higher fines and forfeitures of $0.54 million; and higher investment income of $0.22 million; which was offset by lower charges for services of $0.21 million; and lower intergovernmental revenue of $0.02 million.
The actual expenditures were less than the fiscal year’s final appropriation by $1.48 million primarily due to less than anticipated expenditures in general government of $0.79 million; lower expenditures in public safety of $0.18 million; lower expenditures in public works of $0.31 million and lower capital outlay of $0.35 million, which was offset by an increase in debt service expenditures of $0.14 million.
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CAPITAL ASSET and DEBT ADMINISTRATION
Capital Assets:
The City of Del Mar’s investment in capital assets for its governmental and business-type activities as of June 30, 2023, amounts to $115.34 million, net of accumulated depreciation.
Amounts invested in capital assets include land; buildings and improvements; machinery and equipment; bridges; roadway networks; water lines; and sewer and storm drainage systems.
The total decrease in the City’s capital assets, net of depreciation, for the current fiscal year was $0.08 million (0.07%), compared to the prior fiscal year. Of the net decrease, $0.76 million decrease is related to business-type activities and $0.68 million increase in governmental activities. For capital assets by category, refer to Table 4.
In FY 20-21, due to the anticipated financial impact of the pandemic on the City’s financials, the City Council deferred most capital projects that were not contractually obligated or required to be completed for public safety reasons. Based on recovery of some revenue sources, some deferred projects began in FY 21-22. During the FY 22-23 budget update, the City Council authorized to proceed with most deferred projects based on the updated work plan. The largest capital asset additions for the year is the construction in progress for various Utility Undergrounding projects.
Additional information on the City of Del Mar’s capital assets is located in Note 3 of the financial statements in this report.
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2023 2022 2023 2022 2023 2022
Non-depreciable assets:
Land $18,289,250 $18,289,250 $1,365,688 $1,365,688 $19,654,938 $19,654,938 Construction in progress 6,420,255 4,652,878 107,454 - 6,527,709 4,652,878 Total non-depreciable assets 24,709,505 22,942,128 1,473,142 1,365,688 26,182,647 24,307,816 Capital assets, being depreciated:
Buildings/structures and improvement 21,274,675 21,926,539 4,962,031 5,174,572 26,236,706 27,101,111 Machinery and equipment 791,776 715,199 477,098 463,387 1,268,874 1,178,586 Right to Use Asset 257,889 339,710 - - 257,889 339,710
Streets 16,161,197 16,690,021 - - 16,161,197 16,690,021 Traffic signals 81,637 44,193 - - 81,637 44,193
Roadway network 3,896,981 2,874,331 - - 3,896,981 2,874,331 Bridge 20,750,959 21,613,794 - - 20,750,959 21,613,794
Storm drainage system 1,973,761 2,070,289 46,909 48,394 2,020,670 2,118,683 Water line system - - 8,265,773 8,478,981 8,265,773 8,478,981 Sewer line system - - 10,219,041 10,680,515 10,219,041 10,680,515 Total depreciable assets, net
of accumulated depreciation 65,188,875 66,274,076 23,970,852 24,845,849 89,159,727 91,119,925 Total capital assets $89,898,380 $89,216,204 $25,443,994 $26,211,537 $115,342,374 $115,427,741 TABLE 4
CITY OF DEL MAR'S CAPITAL ASSETS
(Net of depreciation)
Governmental Activities Business-Type Activities Total
Debt Service Administration:
A complete detail of outstanding debt is shown in Note 7 of the financial statements in this report. As of June 30, 2023, the City had a total long-term outstanding debt of $23.67 million made up of loan payable; note payable; compensated absences; subscriptions payable; leases payable; and claims payable as shown in Table 5.
For governmental activities, long-term debt accounts for $18.13 million (76.58%) of the City’s total long-term debt, as of June 30, 2023. Total long-term debt is comprised of loans through IBank, for the City Hall/Town Hall project of $13.92 million, San Diego Association of Governments (SANDAG) of $2.52 million, and County of San Diego of $0.14 million; compensated absences of $0.54 million; leases payable of $0.24 million; subscriptions payable of $0.03 million and claims payable of $0.72 million. All long-term debt in governmental activities is secured solely by specified revenue sources.
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2023 2022 2023 2022 2023 2022
restated restated restated restated
Note payable 16,581,826 $ 17,100,794 $ 5,415,925 $ 5,829,843 $ 21,997,751 $ 22,930,637 $ Compensated absences 544,654 544,852 126,387 120,489 671,041 665,341 Claims payable 721,280 521,261 - - 721,280 521,261
Subscriptions Payable 33,509 54,976 - - 33,509 54,976
Leases Payable 243,954 352,059 - - 243,954 352,059
$ 18,573,942 18,125,223 $ 5,542,312 $ 5,950,332 $ 23,667,535 $ 24,524,274 $ TABLE 5
CITY OF DEL MAR'S OUTSTANDING DEBT
Total
Governmental Activities Business-type Activities
For business-type activities, long-term debt accounts for $5.54 million (23.42%), of the City’s total long-term debt, as of June 30, 2023. The Wastewater fund has a note payable with a remaining balance of $2.95 million with the State of California for the replacement of the 21st Street Pump Station, and a note with IBank with an outstanding balance of $2.47 million.
Compensated absences in business-type activities accounts for $0.13 million of the total business-type long-term debt. All long-term debt in business-type activities is pledged solely by operating revenues.
The City did not incur any new long-term debt during FY 22-23. The City’s long-term debt decreased by $0.86 million (3.49%) compared to the prior fiscal year, largely due to required annual note principal payments of $0.93 million (4.07%) and an increase of $0.20 million (38.37%) in claims payable. In addition, during the current year, based on the GASB 96 requirement, subscriptions payable was added to other long-term liabilities and reported a decrease of $0.02 million (39.05%) in the current year.
Economic Factors and Next Year’s Budget
Local governments throughout the State of California must continuously find new ways to survive economically in order to meet their obligation of serving their communities. Cities that rely on tourism, like Del Mar, experienced the biggest financial losses during the COVID-19 pandemic. Recovery of all major revenue sources returned and exceeded pre-pandemic levels at a faster pace than anticipated which allowed the City to adopt FY 23-24 budget to include restoring all City services to pre-pandemic levels as well as re-establishing capital and special projects that were previously placed on hold. Management continues to take an active role in monitoring the budget during the fiscal year in order to address any economic changes that may occur resulting in necessary changes to projected revenues and/or appropriated expenditures.
In anticipation that all revenue sources have recovered, management looked at the following key economic factors while preparing the adopted budget for FY 23-24:
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Revenues:
The City’s projected revenues for FY 23-24 total $37.0 million, which are remaining pretty flat at $0.18 million (0.49%) higher than final FY 22-23 projected revenues of $36.8 million.
The City’s three primary sources of revenues are property taxes, Transient Occupancy Tax (TOT), and Sales and Use Tax (sales tax), which make up approximately 70% percent of General Fund revenues. As we saw with COVID, TOT and sales tax revenues are vulnerable to substantial fluctuation as they are largely based on tourism. As such, a more conservative methodology is used when forecasting future revenues in these areas. These two sources of revenue were the hardest hit during the pandemic, and although TOT and sales tax have recovered to pre-pandemic levels , the FY 23-24 budget projects both these revenue sources to remain relatively flat when compared to FY 22-23 projected revenues.
Expenditures:
The City’s FY 23-24 Operating and Capital Budget has expenditures of $39.45 million, which is $2.49 million (6.74%) higher than the prior fiscal year’s final adopted budget of $36.96 million.
Expenditures are based on anticipated operating needs, capital and special projects, and City Council identified goals and priorities. City staff approached the FY 23-24 budget process with the goal of restoring service levels to pre-pandemic levels, funding important operations and reestablishing capital and special projects that were previously placed on hold.
The FY 23-24 budget is comprised of the General Fund of $15.55 million (39.07%); Measure Q Fund of $5.64 million (14.16%); other governmental funds of $2.51 million (6.30%); Capital Project Funds of $5.10 million (12.82%); special projects of $0.35 million (0.89%); and the Workers’ Compensation Fund of $0.26 million (0.66%). The business-type funds account for $10.39 million (26.10%).
The City’s Adopted Fiscal Years 2023-2024 and 2024-2025 Operating and Capital Budget is a reflection of the City’s commitment to the residents of Del Mar. A copy of the City’s budget is available online at: https://www.delmar.ca.us/132/Budget-Financial-Reports or can be obtained by contacting the City’s Finance Department.
Request for Information
This financial report is designed to provide a general overview of the City of Del Mar’s finances for all those who may be interested. Questions concerning any of the information provided in this report or requests for additional financial information, should be addressed to the City of Del Mar, Finance Department, 1050 Camino Del Mar, Del Mar, California 92014, or by calling (858) 755-9354. Additional information about the City’s finances can be found on the City’s website at: https://www.delmar.ca.us/132/Budget-Financial-Reports. 65 March 18, 2024 Item 10
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GOVERNMENT-WIDE FINANCIAL STATEMENTS
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CITY OF DEL MAR, CALIFORNIA
STATEMENT OF NET POSITION
JUNE 30, 2023
See accompanying Notes to Financial Statements.
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Governmental Business-Type
Activities Activities Total
ASSETS
Current Assets:
Cash and Investments $ 5,799,235 27,141,064 $ 32,940,299 $ Receivables:
Accounts, Net 1,552,965 437,359 1,990,324
Taxes - 1,818,566 1,818,566
Leases - 1,468,318 1,468,318
Accrued Interest 37,595 181,118 218,713
Inventory 96,508 - 96,508
Due from Other Agencies - 856,072 856,072
Prepaid Expenses - 2,493 2,493
Restricted Cash and Investments 563,791 - 563,791
Total Current Assets 8,050,094 31,904,990 39,955,084
Noncurrent Assets:
Capital Assets:
Not Being Depreciated 1,473,142 24,709,505 26,182,647
Being Depreciated (Net of Accumulated Depreciation) 23,970,852 65,188,875 89,159,727 Total Capital Assets 25,443,994 89,898,380 115,342,374
Total Noncurrent Assets 25,443,994 89,898,380 115,342,374 Total Assets 33,494,088 121,803,370 155,297,458
DEFERRED OUTFLOWS OF RESOURCES
Deferred Amounts from Pension Plans 1,549,244 5,378,616 6,927,860
LIABILITIES
Current Liabilities:
Accounts Payable and Accrued Liabilities 717,665 1,979,013 2,696,678 Deposits Payable 58,141 810,921 869,062
Due to Other Agencies - 6,236 6,236
Unearned Revenue - 3,578,108 3,578,108
Accrued Interest Payable 73,224 185,898 259,122
Long-Term Debt, Due Within One Year 456,330 1,180,476 1,636,806 Total Current Liabilities 1,305,360 7,740,652 9,046,012 Noncurrent Liabilities:
Long-Term Debt, Due in More Than One Year 5,085,982 16,944,747 22,030,729 Net Pension Liability 3,674,106 13,028,901 16,703,007
Total Noncurrent Liabilities 8,760,088 29,973,648 38,733,736 Total Liabilities 10,065,448 37,714,300 47,779,748
DEFERRED INFLOWS OF RESOURCES
Deferred Amounts from Leases - 1,436,294 1,436,294
Deferred Amounts from Pension Plans 195,487 587,861 783,348 Total Deferred Inflows of Resources 195,487 2,024,155 2,219,642
NET POSITION
Net Investment in Capital Assets 20,591,860 72,814,107 93,405,967 Restricted for:
Public Works - 520,599 520,599
Public Safety - 150,326 150,326
Community Development - 1,152,066 1,152,066
Unrestricted 4,190,537 12,806,433 16,996,970
Total Net Position 87,443,531 $ 24,782,397 $ 112,225,928 $ 69 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2023
See accompanying Notes to Financial Statements.
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Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions Governmental Activities:
General Government $ 2,579,851 8,322,651 $ 111,516 $ - $ Public Safety 2,864,512 7,185,111 1,026,127 -
Public Works 23,720 2,146,591 193,843 1,062,926
Parks and Recreation 487,329 1,069,630 - -
Interest on Long-Term Debt - 529,709 - -
Total Governmental Activities 5,955,412 19,253,692 1,331,486 1,062,926 Business-Type Activities:
Water 4,228,276 3,906,853 - -
Wastewater 3,870,619 3,403,091 - -
Cleanwater 550,727 663,559 75,527 -
Total Business-Type Activities 8,649,622 7,973,503 75,527 - Total 27,227,195 $ 14,605,034 $ 1,407,013 $ 1,062,926 $
GENERAL REVENUES
Taxes:
Property Tax
Transient Occupancy Tax
Franchise Tax
Business License Tax
Intergovernmental - Unrestricted Shared Sales
Intergovernmental - Unrestricted Other
Investment Income
Other
TRANSFERS
Total General Revenues and Transfers
CHANGE IN NET POSITION
Net Position - Beginning of Year
NET POSITION - END OF YEAR
Program Revenues
and Use Tax
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CITY OF DEL MAR, CALIFORNIA
STATEMENT OF ACTIVITIES (CONTINUED)
YEAR ENDED JUNE 30, 2023
See accompanying Notes to Financial Statements.
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Governmental Business-Type
Activities Activities Total
$ - (5,631,284) $ (5,631,284) $
- (3,294,472) (3,294,472)
- (866,102) (866,102)
- (582,301) (582,301)
- (529,709) (529,709)
- (10,903,868) (10,903,868)
321,423 - 321,423
467,528 - 467,528
(37,305) - (37,305)
751,646 - 751,646
751,646 (10,903,868) (10,152,222)
- 8,322,387 8,322,387
- 3,816,392 3,816,392
- 442,408 442,408
- 276,466 276,466
- 5,633,731 5,633,731
- 71,964 71,964
82,951 559,904 642,855
- 164,988 164,988
225,846 (225,846) -
308,797 19,062,394 19,371,191
1,060,443 8,158,526 9,218,969
23,721,954 79,285,005 103,006,959
$ 24,782,397 87,443,531 $ 112,225,928 $
Net Revenue (Expense) and
Change in Net Position
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FUND FINANCIAL STATEMENTS
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CITY OF DEL MAR, CALIFORNIA
GOVERNMENTAL FUNDS
BALANCE SHEET
JUNE 30, 2023
See accompanying Notes to Financial Statements.
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Capital
Projects Fund Nonmajor
Capital Governmental
General Fund Improvement Funds Total
ASSETS
Cash and Investments $ 3,904,206 20,289,921 $ 2,181,798 $ 26,375,925 $ Receivables:
Taxes - 1,818,566 - 1,818,566
Accrued Interest 25,650 143,668 7,842 177,160
Accounts, Net - 315,785 121,574 437,359
Leases 1,468,318 1,468,318
Due from Other Agencies 616,414 52,749 186,909 856,072
Due from Other Funds - 35,196 - 35,196
Prepaid Items - 2,493 - 2,493
Total Assets 24,126,696 $ 4,546,270 $ 2,498,123 $ 31,171,089 $
LIABILITIES
Accounts Payable and Accrued Liabilities $ 83,679 1,813,285 $ 82,049 $ 1,979,013 $ Deposits Payable 60,000 692,206 58,715 810,921
Due to Other Agencies - 6,236 - 6,236
Due to Other Funds - - 35,196 35,196
Unearned Revenue 3,411,576 166,532 - 3,578,108
Total Liabilities 3,555,255 2,678,259 175,960 6,409,474
DEFERRED INFLOW OF RESOURCES
Leases - 1,436,294 - 1,436,294
Unavailable Revenues - 28,121 220,909 249,030
Total Deferred Inflows of Resources - 1,464,415 220,909 1,685,324
FUND BALANCES
Nonspendable - 2,493 - 2,493
Restricted - - 1,822,991 1,822,991
Committed - - 278,263 278,263
Assigned 991,015 13,583,051 - 14,574,066
Unassigned - 6,398,478 - 6,398,478
Total Fund Balances 991,015 19,984,022 2,101,254 23,076,291 Total Liabilities, Deferred Inflow of
Resources and Fund Balances 24,126,696 $ 4,546,270 $ 2,498,123 $ 31,171,089 $ 75 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET POSITION
JUNE 30, 2023
See accompanying Notes to Financial Statements.
(33)
Fund Balances of Governmental Funds $ 23,076,291
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets, net of $24,164,235 of accumulated depreciation, used in governmental activities are not current financial resources and, therefore, are not included in the funds. 89,898,380 Interest expenditures are recognized when due, and therefore, interest payable is not recorded in the governmental funds. (185,898)
Long-term liabilities applicable to governmental activities are not due and payable in the current period, and accordingly, are not reported as fund liabilities.
Note Payable (16,581,826)
Lease Payable (243,954)
Subscriptions Payable (33,509)
Claims Payable (260,905)
Compensated Absences (544,656)
Revenues are deferred in the fund statements due to lack of availability. In the statement of activities, the amounts are recognized as revenue. 249,030 An internal service fund is used by management to charge the costs of certain activities to individual funds. The assets and liabilities of the internal service fund is included in the governmental activities in the statement of net position. 308,724 Net pension liabilities in the City's governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities.
Deferred outflows of resources and deferred inflows of resources related to pensions are only reported in the statement of net position as the changes in these amounts effect only the government-wide statements for governmental activities:
Deferred Outflows of Resources 5,378,616
Deferred Inflows of Resources (587,861)
Net Pension Liability (13,028,901)
Net Position of Governmental Activities $ 87,443,531
76 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES YEAR ENDED JUNE 30, 2023
See accompanying Notes to Financial Statements.
(34)
Capital
Projects Fund Nonmajor
Capital Governmental
General Fund Improvement Funds Total
REVENUES
Taxes $ - 18,495,424 $ 34,115 $ 18,529,539 $
Licenses, Fees, and Permits - 1,558,110 414,059 1,972,169 Intergovernmental 684,950 1,120,888 549,983 2,355,821
Charges for Services - 2,239,149 - 2,239,149
Fines and Forfeitures - 1,594,094 - 1,594,094
Investment Income 63,564 481,551 14,789 559,904
Contributions - 3,660 102,856 106,516
Other - 177,588 221,664 399,252
Total Revenues 748,514 25,670,464 1,337,466 27,756,444
EXPENDITURES
Current:
General Government 42,975 7,497,298 137,132 7,677,405
Public Safety - 7,613,455 70,845 7,684,300
Public Works - 411,085 709,464 1,120,549
Parks and Recreation - - 1,052,138 1,052,138
Capital Outlay 909,189 1,325,554 584,767 2,819,510
Debt Service:
Principal 403,731 129,572 105,711 639,014
Interest 457,578 10,328 67,419 535,325
Total Expenditures 1,813,473 16,987,292 2,727,476 21,528,241
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (1,064,959) 8,683,172 (1,390,010) 6,228,203
OTHER FINANCING SOURCES (USES)
Transfers In 1,695,160 166,847 2,430,433 4,292,440
Transfers Out - (4,351,439) (166,847) (4,518,286)
Total Other Financing Sources (Uses) 1,695,160 (4,184,592) 2,263,586 (225,846) NET CHANGE IN FUND BALANCES 630,201 4,498,580 873,576 6,002,357 Fund Balances - Beginning of Year 360,814 15,485,442 1,227,678 17,073,934 FUND BALANCES - END OF YEAR $ 991,015 19,984,022 $ 2,101,254 $ 23,076,291 $ 77 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES OF THE GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2023
See accompanying Notes to Financial Statements.
(35)
Net Change in Fund Balances of Governmental Funds $ 6,002,357 Amount reported for governmental activities in the statement of activities that are different because:
Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over its estimated useful lives as depreciation expense. This is the amount by which capital outlay exceeded depreciation in the current period.
Capital Outlay Expense 3,658,002
Depreciation Expense (2,858,995)
Loss on Disposal (171,807)
Repayment of debt service principal is an expenditure in governmental funds, but the repayment reduces long-term liabilities in the statement of net position. 639,014 Revenues deferred in the fund due to lack of availability are recognized in the statement of activities soon enough after year end to be considered available. The availability criteria does not apply to the government-wide statements and therefore, the revenue is not deferred. This amount represents revenue recorded in government-wide statements that will be recorded in the fund statements. (118,380) Some expenses reported in the statement of activities do not require the use of current available resources and, therefore, are not reported as expenditures in the governmental funds:
Change in Compensated Absences 9,723
Change in Claims Payable (64,256)
Accrued interest on debt service is recorded as expense in the government-wide statements. Interest expense is not accrued in the fund statements but recorded when paid. This is the net change in accrued interest for the current period. 5,616 Pension expenditures reported in the governmental funds includes the annual required contributions. In the statement of activities, pension expense includes the change in the net pension liability, and related change in pension amounts for deferred outflows of resources and deferred inflows of resources. 1,147,888 An internal service fund is used by management to charge the cost of workers' compensation activities to individual funds. The net revenues (expenses) of the internal service fund are reported with governmental activities. (90,636) Change in Net Position of Governmental Activities 8,158,526 $ 78 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
PROPRIETARY FUNDS
STATEMENT OF NET POSITION
JUNE 30, 2023
See accompanying Notes to Financial Statements.
(36)
Governmental
Activities -
Nonmajor: Internal
Water Wastewater Clean Water Total Service Fund
ASSETS
Current Assets:
Cash and Investments $ 2,595,646 2,893,044 $ 310,545 $ 5,799,235 $ 765,139 $ Receivables:
Accounts 697,743 757,067 98,155 1,552,965 -
Interest 17,117 20,020 458 37,595 3,958
Inventory 11,067 85,441 - 96,508 -
Restricted Cash and Investments 563,791 - - 563,791 -
Total Current Assets 3,885,364 3,755,572 409,158 8,050,094 769,097 Noncurrent Assets:
Capital Assets:
Land and Water Rights 583,663 782,025 - 1,365,688 -
Construction in Progress 15,297 16,705 75,452 107,454 - Water and Wastewater System 19,000,377 15,593,215 49,000 34,642,592 - Buildings and Improvements 4,293,450 4,039,761 - 8,333,211 - Machinery and Equipment 1,807,460 329,614 42,928 2,180,002 - Less: Accumulated Depreciation (11,700,001) (9,458,921) (26,031) (21,184,953) - Total Capital Assets (Net of
Accumulated Depreciation) 14,000,246 11,302,399 141,349 25,443,994 - Total Noncurrent Assets 14,000,246 11,302,399 141,349 25,443,994 - Total Assets 17,885,610 15,057,971 550,507 33,494,088 769,097
DEFERRED OUTFLOWS OF RESOURCES
Deferred Amounts from Pension Plans 776,664 772,580 - 1,549,244 -
LIABILITIES
Current Liabilities:
Accounts Payable 372,537 293,950 51,178 717,665 -
Customer Deposits - 58,141 - 58,141 -
Claims Payable - - - - 368,298
Accrued Interest Payable 73,191 33 - 73,224 -
Current Portion of Long-Term Liabilities 438,901 13,305 4,124 456,330 - Total Current Liabilities 884,629 365,429 55,302 1,305,360 368,298 Long-Term Liabilities:
Claims Payable - - - - 92,075
Compensated Absences 42,505 39,914 12,371 94,790 -
Notes Payable 4,991,192 - - 4,991,192 -
Net Pension Liability 1,841,900 1,832,206 - 3,674,106 - Total Noncurrent Liabilities 6,875,597 1,872,120 12,371 8,760,088 92,075 Total Liabilities 7,760,226 2,237,549 67,673 10,065,448 460,373
DEFERRED INFLOWS OF RESOURCES
Deferred Amounts from Pension Plans 98,001 97,486 - 195,487 -
NET POSITION
Net Investment in Capital Assets 9,148,112 11,302,399 141,349 20,591,860 - Unrestricted 1,655,935 2,193,117 341,485 4,190,537 308,724 Total Net Position 13,495,516 $ 10,804,047 $ 482,834 $ 24,782,397 $ 308,724 $ Business-Type Activities - Enterprise Funds
79 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
PROPRIETARY FUNDS
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION YEAR ENDED JUNE 30, 2023
See accompanying Notes to Financial Statements.
(37)
Governmental
Activities -
Nonmajor: Internal
Water Wastewater Clean Water Total Service Fund
OPERATING REVENUES
Water Sales $ - 4,168,940 $ - $ 4,168,940 $ - $
Clean Water Services - - 548,169 548,169 -
Sewer Service 3,852,247 - - 3,852,247 -
Charges for Services - - - - 280,457
Customer Penalties 18,254 20,911 2,558 41,723 -
Other 118 38,425 75,527 114,070 -
Total Operating Revenues 3,870,619 4,228,276 626,254 8,725,149 280,457
OPERATING EXPENSES
Source of Supply - 1,677,581 - 1,677,581 -
Water Treatment - 441,012 - 441,012 -
Maintenance and Operation 41,348 84,916 83,695 209,959 - General and Administrative 2,607,690 1,310,103 576,181 4,493,974 380,724 Depreciation 643,771 393,241 3,683 1,040,695 -
Total Operating Expenses 3,292,809 3,906,853 663,559 7,863,221 380,724 OPERATING INCOME (LOSS) 577,810 321,423 (37,305) 861,928 (100,267)
NONOPERATING REVENUES (EXPENSES)
Investment Income 37,755 42,488 2,708 82,951 9,631
Interest Expense (110,282) - - (110,282) -
Total Nonoperating Revenues
(Expenses) (72,527) 42,488 2,708 (27,331) 9,631
INCOME (LOSS) BEFORE TRANSFERS 505,283 363,911 (34,597) 834,597 (90,636)
TRANSFERS
Transfers In - - 225,846 225,846 -
Total Transfers - - 225,846 225,846 -
CHANGES IN NET POSITION 505,283 363,911 191,249 1,060,443 (90,636) Net Position - Beginning of Year 10,298,764 13,131,605 291,585 23,721,954 399,360 NET POSITION - END OF YEAR $ 10,804,047 13,495,516 $ 482,834 $ 24,782,397 $ 308,724 $ Business-Type Activities -
Enterprise Funds
80 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
YEAR ENDED JUNE 30, 2023
See accompanying Notes to Financial Statements.
(38)
Governmental
Activities -
Nonmajor: Internal
Water Wastewater Clean Water Total Service Fund
CASH FLOWS FROM OPERATING ACTIVITIES
Cash Received from Water, Sewer, and Clean Water Customers $ 3,824,429 4,231,285 $ 554,507 $ 8,610,221 $ - $ Cash Received from Other Operating Receipts 118 38,425 75,527 114,070 280,457 Cash Payments for Water Purchases, Distribution, and Treatment - (2,118,593) - - (2,118,593) Cash Payments for Sewer Collection and Maintenance - - (41,348) - (41,348) Cash Payments for Services and Supplies (865,656) (2,125,895) (507,584) (3,499,135) (244,962) Cash Payment to Employees for Services (889,647) (948,041) (151,697) - (1,989,385) Net Cash Provided (Used) by Operating Activities 709,263 395,814 1,075,830 (29,247) 35,495
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Cash Received from Other Funds - - 225,846 225,846 -
Net Cash Provided by Noncapital
Financing Activities - - 225,846 225,846 -
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition and Construction of Capital Assets (138,257) (52,982) (81,913) - (273,152) Interest Payments on Long-Term Debt (11) - (116,100) - (116,111) Principal Payments on Long-Term Debt - - (412,807) - (412,807) Net Cash Used by Capital and
Related Financing Activities (138,268) (581,889) (81,913) - (802,070)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest Received 24,940 26,202 2,382 53,524 6,705
Net Cash Provided by Investing Activities 24,940 26,202 2,382 53,524 6,705
NET INCREASE IN CASH
AND CASH EQUIVALENTS 152,314 283,748 117,068 553,130 42,200 Cash and Cash Equivalents - Beginning of Year 3,007,123 2,609,296 193,477 5,809,896 722,939 CASH AND CASH EQUIVALENTS - END OF YEAR $ 3,159,437 2,893,044 $ 310,545 $ 6,363,026 $ 765,139 $
CASH AND CASH EQUIVALENTS
Cash and Investments $ 2,595,646 2,893,044 $ 310,545 $ 5,799,235 $ 765,139 $ Restricted - Cash and Investments 563,791 - - 563,791 - Total Cash and Cash Equivalents $ 3,159,437 2,893,044 $ 310,545 $ 6,363,026 $ 765,139 $
RECONCILIATION OF OPERATING INCOME (LOSS) TO
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Operating Income (Loss) $ 577,810 321,423 $ $ 861,928 (37,305) $ $ (100,267) Adjustments to Reconcile Operating Income (Loss) to
Net Cash Provided (Used) by Operating Activities:
Depreciation 643,771 393,241 3,683 1,040,695 -
Changes in Operating Assets, Deferred Outflows of
Resources, Liabilities, and Deferred Inflows of Resources:
(Increase) Decrease in Accounts Receivable 50,452 3,780 (46,072) 8,160 - (Increase) Decrease in Inventory - 5,464 - 5,464 -
(Increase) Decrease in Deferred Outflows of Resources (482,465) - (485,014) - (967,479) Increase (Decrease) in Claims Payable - - - - 135,762
Increase (Decrease) in Accounts Payable (149,617) 6,097 (270,164) - (413,684) Increase (Decrease) in Retentions Payable - (12,146) (7,109) - (19,255) Increase (Decrease) in Customer Deposits - (14,482) - - (14,482) Increase (Decrease) in Net Pension Liability 976,174 971,037 - 1,947,211 - Increase (Decrease) in Compensated Absences 3,333 (153) 1,607 4,787 - Increase (Decrease) in Deferred Inflows of Resources (686,940) - (690,575) - (1,377,515) Total Adjustments 131,453 74,391 8,058 213,902 135,762
Net Cash Provided (Used) by Operating Activities 395,814 $ 709,263 $ $ 1,075,830 (29,247) $ 35,495 $ Business-Type Activities - Enterprise Funds
81 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
FIDUCIARY FUNDS
STATEMENT OF FIDUCIARY NET POSITION
JUNE 30, 2023
See accompanying Notes to Financial Statements.
(39)
Custodial
Fund
ASSETS
Account Receivable $ 920
Restricted Assets:
Cash and Investments 190,181
Total Assets 191,101
NET POSITION
Restricted for Bond Holders 191,101
Total Net Position $ 191,101
82 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
FIDUCIARY FUNDS
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
YEAR ENDED JUNE 30, 2023
See accompanying Notes to Financial Statements.
(40)
Custodial
Fund
ADDITIONS
Investment Income (Loss) $ 2,649
Special Assessments or Special Taxes Collected from Property Owners 47,629 Total Additions 50,278
DEDUCTIONS
Payment for Special Assessment or Special Tax Debt 58,013 Total Deductions 58,013
CHANGE IN NET POSITION (7,735)
Total Net Position - Beginning of Year 198,836
TOTAL NET POSITION - END OF YEAR $ 191,101
83 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(41)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the City of Del Mar, California (the City) have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The significant City accounting policies are described below.
A. Reporting Entity
The City of Del Mar, California was incorporated in 1959 under the general laws of the state of California and enjoys all the rights and privileges pertaining to “Chartered” cities.
The City operates under an elected Council/City Manager form of government. The City provides basic government services to its citizens, including general government, public safety, public works, and parks and recreation.
As required by U.S. GAAP, these financial statements present the City of Del Mar and its blended component unit, an entity for which the City is considered to be financially accountable. The City is considered to be financially accountable for an organization if the City appoints a voting majority of that organization’s governing body and the City is able to impose its will on that organization or there is a potential for that organization to provide specific financial benefits to or impose specific financial burdens on the City. The City is also considered to be financially accountable for an organization if that organization is fiscally dependent (i.e., it is unable to adopt its budget, levy taxes, set rates or charges, or issue bonded debt without approval from the City). In certain cases, other organizations are included as component units if the nature and significance of their relationships with the City are such that their exclusion would cause the City’s financial statements to be misleading or incomplete. A brief description of the City’s component unit is as follows:
The Del Mar Public Facilities Corporation (the Corporation) was formed on August 16, 1993, under the Nonprofit Public Benefit Corporation Law of the state of California to provide financial assistance to the City of Del Mar by acquiring, leasing, constructing or financing public sewer and/or water facilities and improvements. The financial activities of the Corporation have been aggregated and merged (termed “blending”) with those of the City in the accompanying financial statements, since the City Council serves as the governing board for the Corporation. The City does not produce separate financial statements for the Corporation.
B. Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all the nonfiduciary activities of the primary government and its blended component unit. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on user fees and charges for support.
84 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(42)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) B. Government-Wide and Fund Financial Statements (Continued) The statement of activities demonstrates the degree to which the direct expenses for a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not included as program revenues are reported as general revenues.
The underlying accounting system of the City is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund equity, revenues and expenditures or expenses, as appropriate.
Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.
C. Measurement Focus and Basis of Accounting
The accounting and financial reporting treatment is determined by the applicable measurement focus and basis of accounting. Measurement focus indicates the type of resources being measured such as current financial resources or economic resources.
The basis of accounting indicates the timing of transactions or events for recognition in the financial statements. The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary funds. Under the economic resources measurement focus, all assets, deferred outflows of resources, liabilities and deferred inflows of resources (whether current or noncurrent) associated with their activity are included on their statements of net position. Operating statements present increases (revenues) and decreases (expenses) in total net position.
Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of the related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements have been met.
85 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(43)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Measurement Focus and Basis of Accounting (Continued) The City’s fiduciary fund financial statements report custodial funds. Custodial funds are used to account for situations where the government’s role is purely custodial. Custodial funds are reported on the accrual basis of accounting and the economic resources measurement focus.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under the current financial resources measurement focus, only current assets, deferred outflows of resources, current liabilities and deferred inflows of resources are generally included on their balance sheets. The reported fund balance is considered to be a measure of “available spendable resources.” Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in fund balance. Accordingly, they are said to present a summary of sources and uses of “available spendable resources” during a period. Noncurrent portions of long-term receivables due to governmental funds are reported on their balance sheets in spite of their spending measurement focus.
Under the modified accrual basis of accounting, revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. The City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service payments (principal and interest), compensatory time and claims and judgments are recorded only when payment is due.
Property taxes, sales and use tax, transient occupancy tax (TOT), franchise taxes, vehicle license fees, highway user’s tax, interest associated with the current period, and some grants are all susceptible to accrual and have been recognized as revenue in the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the government.
The City reports the following major governmental funds:
The General Fund is the primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.
The Capital Improvement Capital Projects Fund is used to account for the financial resources used for the acquisition or construction of major property, equipment, or facilities (other than those financed by the proprietary funds). 86 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(44)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Measurement Focus and Basis of Accounting (Continued) The City reports the following major proprietary funds:
The Water Fund is used to account for the operation, maintenance, and capital facility financing of the City’s water system.
The Wastewater Fund is used to account for the operation, maintenance, and capital facility financing of the City’s wastewater system.
Additionally, the City reports the following fund types:
Special Revenue Funds are used to account for revenues derived from specific sources which are usually required by law or administrative regulation to be accounted for in a separate fund.
Capital Project Funds are used to account for the financial resources to be used for the acquisition or construction of major capital facilities. The Nonmajor Enterprise Fund accounts for the mandated costs of the City’s National Pollution Discharge Eliminations System (NPDES) permit. The Internal Service Fund is used to account for the workers’ compensation services provided to other departments of the City.
Fiduciary Funds are used to account for assets held by the City in a custodial capacity for individuals, private organizations, or other governments. The current City’s fiduciary funds include: Stratford and Luneta Undergrounding Assessment District 1989-01; Seawall Refinance Assessment District 1999-01; Ocean View/Pines Assessment District 2005-01; North Hills Undergrounding Assessment District 2007-01, and the Sunset Undergrounding Assessment District 2007-02.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services in connection with the funds principal ongoing operations. The principal operating revenues of the City’s enterprise funds and internal service fund are charges for sales and services. Operating expenses for enterprise funds include the cost of sales and services, general and administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.
87 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(45)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. Adoption of New Accounting Standards
In May 2020, the GASB issued GASB Statement No. 96, Subscription-Based Information Technology Arrangements. This standard defines a subscription-based information technology arrangement (SBITA); establishes that a SBITA results in a rightto-use subscription asset (an intangible asset) and a corresponding subscription liability; provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and requires note disclosures regarding a SBITA.
The City adopted the requirements of the guidance effective July 1, 2022 and has applied the provisions of this standard to the beginning of the period of adoption.
E. Investments
Investments are reported in the accompanying financial statements at fair value which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Changes in fair value that occur during a fiscal year are recognized as investment income reported for the fiscal year. Investment income includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation, maturity, or sale of investments. The City pools investments of all funds, except assets held by fiscal agents. Each fund’s share in this pool is displayed in the accompanying financial statements as cash and investments. Investment income earned by the pooled investments is allocated to the various funds on a quarterly basis, based on each fund’s average cash and investment balance.
F. Cash and Cash Equivalents
For purposes of the statement of cash flows, cash and cash equivalents have been defined as demand deposits and highly liquid investments purchased with an original maturity of 90 days or less.
G. Receivables and Payables
Activity between funds that is representative of lending/borrowing arrangements outstanding at the end of the fiscal year is referred “due to/from other funds” (short-term interfund loans). Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.”
All accounts, taxes, and service receivables are shown net of an allowance for uncollectible accounts. The City’s fiscal year-end falls in the middle of a billing cycle for water, sewer, trash, and recycling revenue. In order to accrue the amount of the yearend receivables the City estimates the amount of unbilled receivables based on that portion of the billing cycle that has elapsed as of the fiscal year-end. 88 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(46)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) H. Capital Assets
Capital assets, which include land, buildings, buildings and improvements, machinery, equipment and infrastructure are depreciated (except for land) and are reported in the applicable governmental or business-type activities columns in the government-wide financial statements.
Capital assets are defined by the City as assets with an initial, individual cost of $5,000 and an estimated useful life greater than one year. Donated capital assets are recorded at acquisition value at the date of donation.
The cost of normal maintenance and repairs that do not add to the value of the assets or materially extend asset lives are not capitalized. Construction in progress costs are capitalized and transferred to their respective capital asset category upon completion of the project.
Subscription-Based Information Technology Arrangements (SBITA) assets are initially measured as the sum of the present value of payments expected to be made during the subscription term, payments associated with the SBITA contract made to the SBITA vendor at the commencement of the subscription term, when applicable, and capitalizable implementation costs, less any SBITA vendor incentives received form the SBITA vendor at the commencement of the SBITA term. SBITA assets are amortized in a systematic and rational manner over the shorter of the subscription term or the useful life of the underlying IT assets.
Depreciation is charged to operations using the straight-line method based on the estimated useful life of an asset. Land and construction in progress are not depreciated.
Water System 40 to 50 Years
Wastewater System 40 Years
Structures 33 Years
Meters and Hydrants 25 Years
Machinery and Equipment 5 to 15 Years
Infrastructure 33 Years
I. Compensated Absences
Vacation pay is payable to employees at the time used or upon termination of employment. In the statement of net position, compensated absences are recorded as a liability. In the statement of activities, the cost of vacation is recorded when earned for both governmental and business-type activities. The City expects 25% of the compensated absence balance to be paid within the next 12 months and has accordingly recorded this portion as a current liability. The remaining portion is recorded as a noncurrent liability. For the enterprise funds, compensated absences, once exercised, are paid out of the same fund as they were originally accrued. For governmental activities, the General Fund is used primarily to pay the liability. 89 March 18, 2024 Item 10
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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) J. Inventory and Prepaids
The enterprise fund inventories are valued at average cost. The inventory consists of meters, pipes and other parts required providing water and wastewater services to customers. The City uses the consumption method which means that the inventory is expensed as the item is used.
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items. The cost of prepaid items is recorded as expenditures/expenses during the periods benefited.
K. Restricted Assets
Restricted assets consist of cash and investments held in the Wastewater Enterprise Fund related to debt and in a fiduciary capacity for several assessment districts.
L. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position reports a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to future periods and will not be recognized as an outflow of resources (expense) until that time.
The City has the following items that qualify for reporting in this category:
Deferred outflow related to pensions equal to employer contributions made after the measurement date of the net pension liability.
Deferred outflow related to pensions for differences between expected and actual experience. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plans.
Deferred inflows related to pensions for changes in assumptions. These amounts are only recorded in the Statements of Net Position and are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plans. Deferred outflow related to pensions resulting from the net difference in projected and actual earnings on investments of the pension plans’ fiduciary net position.
These amounts are amortized over five years.
In addition to liabilities, the statement of net position and governmental funds balance sheet reports a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to future periods and will not be recognized as an inflow of resources (revenue) until that time.
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NOTES TO FINANCIAL STATEMENTS
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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) L. Deferred Outflows/Inflows of Resources (Continued)
The City has the following items that qualify for reporting in this category:
Deferred inflow from unavailable revenues, which is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from one source, which is grants. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available and eligibility requirements are met.
Deferred inflows related to pensions for changes in proportion and differences between the employer’s contributions and the employer’s proportionate share of contributions. These amounts are only recorded in the Statements of Net Position and are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plans.
Deferred inflow related to pensions resulting from the net difference in projected and actual earnings on investments of the pension plans’ fiduciary net position.
These amounts are amortized over five years.
Deferred inflow related to leases are amortized on a straight line basis over the length of the lease agreement.
M. Leased Property
Lessee
The City is a lessee for noncancellable lease of property. The City recognizes a lease liability and an intangible right-to-use lease asset (lease asset) in the applicable governmental activities or business-type activities in the government-wide and in the proprietary fund financial statements. The City recognizes lease liabilities with an initial individual value of $10,000 or more. At the commencement of a lease, the City initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made. The lease asset is initially measured as the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequently, the lease asset is amortized on a straight-line basis over its useful life.
Lessor
The City recognizes a lease receivable and a deferred inflow of resources in the applicable governmental activities or business-type activities in the government-wide and in the governmental and proprietary fund financial statements. At the commencement of a lease, the City initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources is initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term.
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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) N. Property Taxes
Under California law, property taxes are assessed and collected by the County of San Diego up to 1% of assessed value, plus other increases approved by the voters. The County bills and collects the taxes and remits them to the City in installments. The City of Del Mar accrues these taxes as a receivable and revenue as of the levy date.
Lien Date January 1
Levy Date June 30
Due Dates November 1 and February 1
Collection Dates December 10 and April 10
O. Long-Term Obligations
In the government-wide financial statements and the proprietary fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund statement of net position. 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 bond premium or discount. Bond issuance costs are expensed when incurred.
In the fund financial statements, governmental fund types recognize bond premium and discounts, as well as bond issuance costs, during the current period. The face amount of debt issues is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
P. Claims and Judgments
When it is probable that a claim liability has been incurred at year-end, and the amount of the loss can be reasonably estimated, the City records the estimated loss, net of any insurance coverage. Small dollar claims and judgments are recorded as expenditures when paid. Depending on the nature of the claims, they may be paid out of a number of funds. General claims are paid from the General Fund, workers’ compensation claims are paid from the internal service fund, and claims specific to an enterprise fund are paid out of the respective enterprise fund (Water, Wastewater, or Clean Water).
Q. Net Position and Fund Equity
The governmental and business-type activities in the government-wide financial statements and proprietary funds financial statements utilize a net position presentation.
Net position is classified in the following categories:
Net Investment in Capital Assets – this category of net position consists of capital assets net of accumulated depreciation and reduced by outstanding debt and capital related payables that are attributed to the acquisition, construction, or improvement of the assets.
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NOTES TO FINANCIAL STATEMENTS
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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Q. Net Position and Fund Equity (Continued)
Restricted Net Position – this category of net position is restricted by external creditors, grantors, contributors, or laws or regulations of other governments.
Unrestricted Net Position – all net position that does not meet the definition of “net investment in capital assets” or “restricted net position.” Sometimes the City will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted – net position and unrestricted – net position in the government-wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied.
It is the City’s practice to consider restricted – net position to have been depleted before unrestricted – net position is applied.
Fund balances are reported in the fund statements in the following classifications:
Nonspendable Fund Balance – this includes amounts that cannot be spent because they are either not spendable in form or legally or contractually required to be maintained intact.
Restricted Fund Balance – this includes amounts that can be spent only for specific purposes stipulated by constitution, external resource providers, or through enabling legislation. If the Council action limiting the use of funds is included in the same action that created the funding source, then it is restricted.
Committed Fund Balance – this includes amounts that can be used only for the specific purposes determined by a formal action of the Council. It includes Council action that can only be overturned by new legislation requiring the same type of voting consensus that created the original action. Therefore, if the Council action limiting the use of the funds is separate from the action that created the funding source, then it is committed, not restricted. The City considers a resolution to constitute a formal action of City Council for the purposes of establishing committed fund balance.
Assigned Fund Balance – this includes amounts that are designated or expressed by the Council, but does not require a formal action like a resolution or ordinance.
The Council may delegate the ability of an employee or committee to assign uses of specific funds, for specific purposes. Such delegation of authority has been granted to the City Manager by resolution of the City Council.
Unassigned Fund Balance – this classification includes the residual balance for the government’s general fund and includes all spendable amounts not contained in other classifications. In other funds, the unassigned classification is used only to report a deficit balance resulting from overspending for specific purposes for which amounts had been restricted, committed or assigned.
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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Q. Net Position and Fund Equity (Continued)
It is the City’s policy that restricted resources will be applied first, followed by (in order of application) committed, assigned, and unassigned resources, in the absence of a formal policy adopted by the Council.
R. 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’s California Public Employees’ Retirement System (CalPERS) plans (the Plans) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. The general fund, water enterprise fund and wastewater enterprise funds typically have been used in prior years to liquidate pension liabilities.
S. Use of Estimates
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, deferred outflows of resources, liabilities and deferred inflows of resources at the date of the financial statements and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those estimates and assumptions.
NOTE 2 CASH AND INVESTMENTS
Cash and investments as of June 30, 2023 are classified in the accompanying financial statements as follows:
Statement of Net Position:
Cash and Investments 32,940,299 $
Restricted Cash and Investments 563,791
Statement of Fiduciary Assets and Liabilities:
Restricted Cash and Investments 190,181
Total Cash and Investments 33,694,271 $
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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(52)
NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Cash and investments as of June 30, 2023 consist of the following:
Cash and Deposits:
Petty Cash on Hand 700 $
Demand Deposits 1,764,790
Total Cash and Deposits 1,765,490
Investments:
Federal Agency Securities 380,094
U.S. Treasury Securities 249,079
State Investment Pool 24,669,110
Investment in County Pool 2,771,886
Negotiable Certificates of Deposit 3,858,612
Total Investments 31,928,781
Total Cash and Investments 33,694,271 $
Investments Authorized by the California Government Code and the City’s Investment Policy
The table below identifies the investment types that are authorized for the City by the California Government Code and the City’s investment policy. The table also identifies certain provisions of the California Government Code (or the City’s investment policy, if more restrictive) that address interest rate risk and concentration of credit risk. The limits expressed below apply at the time of purchase of the investment (rather than at year-end).
This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s Investment Policy.
Maximum Maximum
Maximum Percentage Investment
Authorized Investment Type Maturity* of Portfolio* in One Issuer* U.S. Treasury Securities 5 years None None
U.S. Agency Securities 5 years None None
Commercial Paper 270 days 25% 5%
Negotiable Certificates of Deposit None None $250,000
Repurchase Agreements 1 year None None
Medium-Term Corporate Notes 5 years 30% None
Mutual Funds N/A 20% None
Supranationals 5 years 15% 5%
San Diego County Pooled
Investment Funds N/A 30% None
Local Agency Investment Fund (LAIF) N/A $75 million None * Excluding amounts held by bond trustees that are not subject to California Government Code restrictions
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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
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NOTE 2 CASH AND INVESTMENTS (CONTINUED)
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 flow 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. 12 Months 13 to 24 25 to 60
Investment Type or Less Months Months Total
Federal Agency Securities - $ 198,503 $ 181,591 $ 380,094 $ U.S. Treasury Securities 249,079 - - 249,079
State Investment Pool 24,669,110 - - 24,669,110
Investment in County Pool 2,771,886 - - 2,771,886
Negotiable Certificates of Deposit - 690,331 3,168,281 3,858,612 Total 27,690,075 $ 888,834 $ 3,349,872 $ 31,928,781 $
Remaining Maturity (in Months)
Investments with Fair Values Highly Sensitive to Interest Rate Fluctuations The City held no investments, which were highly sensitive to interest rate fluctuations (to a greater degree than already indicated in the information provided above).
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 a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code, the City’s Investment Policy, or debt agreements, and the Standard and Poor’s actual rating as of year-end for each investment type.
Minimum
Legal Not
Investment Type Fair Value Rating AAA AA+ Rated
Federal Agency Securities 380,094 $ - $ 380,094 $ - $
U.S. Treasury Securities 249,079 N/A 249,079
State Investment Pool 24,669,110 N/A - - 24,669,110
Investment in County Pool 2,771,886 N/A 2,771,886 - -
Negotiable Certificates
of Deposit 3,858,612 N/A - - 3,858,612
Total 31,928,781 $ 2,771,886 $ 380,094 $ 28,776,801 $
Rating as of Year-End
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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
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NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Concentration of Credit Risk
The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. There are no investments in any one issuer other than external investment pools that represent 5% or more of the City’s investments.
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the 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 custodial credit risk for investments is the risk that a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party in the event of the failure of the counterparty (e.g., broker-dealer).
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 or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by the 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 market 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 City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. At June 30, 2023, the City deposits (bank balances) were either insured by the Federal Deposit Insurance Corporation or collateralized as described above.
Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 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 financial statements at amounts based upon the City’s prorated 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.
Investment in San Diego County Pool
The City is a voluntary participant in the San Diego County Investment Pool (the Pool). The Pool is not registered with the Securities and Exchange Commission (SEC) as an investment company and does not have any binding guarantees for share values. An oversight committee monitors the management of the Pool. 97 March 18, 2024 Item 10
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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(55)
NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Fair Value Measurement
The City categorizes its fair value measurement within the fair value hierarchy established by U.S. GAAP. The hierarchy is based on the valuation inputs used to measure the fair value of the assets. Level 1 inputs are quoted prices in active markets for identical assets, Level 2 inputs are quoted prices of similar assets in active markets, and Level 3 inputs are significant unobservable inputs.
The City has the following recurring fair value measurements as of June 30, 2023:
Level 1 Level 2 Level 3 Total
Negotiable Certificates of Deposit - $ 3,858,612 $ - $ 3,858,612 $ U.S. Treasury Securities - 249,079 - 249,079
Federal Agency Securities - 380,094 - 380,094
Total Leveled Investments - $ 4,487,785 $ - $ 4,487,785 State Investment Pool* 24,669,110
Investment in County Pool* 2,771,886
Total Investment Portfolio 31,928,781 $
* Not subject to fair value measurement hierarchy.
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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(56)
NOTE 3 CAPITAL ASSETS
A summary of changes in the governmental activities capital assets for the year ended June 30, 2023 is as follows:
Balance at
July 1, 2022 Balance at
As Restated Additions Deletions June 30, 2023
Governmental Activities
Capital Assets,
Not Being Depreciated:
Land 18,289,250 $ - $ - $ 18,289,250 $
Construction in Progress 4,652,878 3,271,745 (1,504,368) 6,420,255 Total Capital Assets, Not
Being Depreciated 22,942,128 3,271,745 (1,504,368) 24,709,505 Capital Assets, Being Depreciated:
Buildings and Improvements 28,885,227 334,649 (269,838) 28,950,038 Machinery and Equipment 2,417,697 257,649 (35,863) 2,639,483 Right to Use Asset - leases 452,946 - - 452,946
Right to Use Asset - subscriptions 54,976 - - 54,976
Infrastructure 56,018,258 1,298,327 (60,918) 57,255,667 Total Capital Assets,
Being Depreciated 87,829,104 1,890,625 (366,619) 89,353,110 Less Accumulated Depreciation for:
Buildings and Improvements (6,958,688) (863,743) 147,068 (7,675,363) Machinery and Equipment (1,702,498) (174,659) 29,450 (1,847,707) Right to Use Asset - leases (113,236) (113,236) - (226,472) Right to Use Asset - subscriptions - (23,561) - (23,561) Infrastructure (12,725,630) (1,683,796) 18,294 (14,391,132) Total Accumulated
Depreciation (21,500,052) (2,858,995) 194,812 (24,164,235) Total Capital Assets,
Being Depreciated, Net 66,329,052 (968,370) (171,807) 65,188,875 Total Governmental Activities
Capital Assets, Net 89,271,180 $ 2,303,375 $ (1,676,175) $ 89,898,380 $ Depreciation expense was charged to functions for the fiscal year ended June 30, 2023 as follows:
Governmental Activities:
General Government 658,997 $
Public Safety 218,697
Public Works 1,721,372
Parks and Recreation 35,011
Community Services 224,918
Total Depreciation Expense 2,858,995 $
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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(57)
NOTE 3 CAPITAL ASSETS (CONTINUED)
A summary of changes in the business-type activities capital assets for the year ended June 30, 2023 is as follows:
Balance at Balance at
July 1, 2022 Additions Deletions June 30, 2023
Business-Type Activities
Capital Assets,
Not Being Depreciated:
Land 1,365,688 $ - $ - $ 1,365,688 $
Construction in Progress - 107,454 - 107,454
Total Capital Assets, Not
Being Depreciated 1,365,688 107,454 - 1,473,142
Capital Assets, Being Depreciated:
Buildings 4,080,948 - - 4,080,948
Improvements 4,252,263 - - 4,252,263
Machinery and Equipment 2,098,169 81,832 - 2,180,001
Water System 15,523,906 83,866 (14,556) 15,593,216
Storm Drains 49,000 - 49,000
Wastewater System 19,000,377 - - 19,000,377
Total Capital Assets,
Being Depreciated 45,004,663 165,698 (14,556) 45,155,805 Less Accumulated Depreciation for:
Buildings (1,250,479) (121,967) - (1,372,446)
Improvements (1,908,160) (90,574) - (1,998,734)
Machinery and Equipment (1,634,782) (68,121) - (1,702,903) Water System (7,044,925) (297,074) 14,556 (7,327,443)
Storm Drains (606) (1,485) - (2,091)
Wastewater System (8,319,862) (461,474) - (8,781,336)
Total Accumulated
Depreciation (20,158,814) (1,040,695) 14,556 (21,184,953) Total Capital Assets,
Being Depreciated, Net 24,845,849 (874,997) - 23,970,852 Total Business-Type Activities
Capital Assets, Net 26,211,537 $ (767,543) $ - $ 25,443,994 $ Depreciation expense was charged to functions for the fiscal year ended June 30, 2023 as follows:
Business-Type Activities:
Water 393,241 $
Wastewater 643,771
Clean Water 3,683
Total Depreciation Expense 1,040,695 $
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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(58)
NOTE 4 LEASE RECEIVABLE
The City, acting as lessor, leases a wireless celltower and land under long-term, noncancelable lease agreements. The leases expire at various dates through 2043 and do not provide for renewal options. During the year ended June 30, 2023, the City recognized $97,086 and $41,134 in lease revenue and interest revenue, respectively, pursuant to these contracts.
NOTE 5 INTERFUND RECEIVABLES AND PAYABLES
At June 30, 2023, interfund receivables and payables are as follows:
Due From Due To
General Fund 35,196 $ - $
Nonmajor Governmental Funds:
Supplemental Law Enforcement Special Revenue Fund - 1,067 Regional Communications System - 19,862
RMRA Special Revenue Fund - 14,267
Total 35,196 $ 35,196 $
The above balances are primarily due to the reclassification of negative cash balances in the city-wide cash pool.
NOTE 6 INTERFUND TRANSFERS
Interfund transfers for the fiscal year ended June 30, 2023 were as follows:
Nonmajor
General Governmental
Transfers In Fund Funds Total
General Fund (B) $ 166,847 - $ 166,847 $
Capital Improvement Capital
Projects Fund (A) - 1,695,160 1,695,160
Nonmajor Governmental Funds (B) - 2,430,433 2,430,433
Nonmajor Enterprise Fund
Clear Water Fund (C) 225,846 - 225,846
Total 4,351,439 $ 166,847 $ 4,518,286 $
Transfers Out
Purpose of Interfund Transfers
Transfers were needed:
A. To cover costs related to roadway and sidewalk improvements.
B. To fund current and future capital improvement projects.
C. To fund current and future capital improvement projects. 101 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(59)
NOTE 7 CHANGES IN LONG-TERM LIABILITIES
A summary of changes in long-term liabilities for the fiscal year ended June 30, 2023 is as follows:
Balance
July 1, 2022 Balance Due Within
As Restated Additions Deletions June 30, 2023 One Year
Governmental Activities:
Direct Borrowings:
Note Payable 2,587,500 $ - $ (70,000) $ 2,517,500 $ 71,250 $ Note Payable - City Hall 14,324,631 - (403,731) 13,920,900 416,812 Note Payable - Regional
Communications 188,663 - (45,237) 143,426 46,499
Other Long-Term Liabilities:
Compensated Absences 544,852 380,860 (381,058) 544,654 136,164 Leases Payable 352,059 - (108,105) 243,954 117,103
Subscriptions Payable 54,976 (21,467) 33,509 24,350
Claims Payable 521,261 258,904 (58,885) 721,280 368,298 Total Governmental
Activities 18,573,942 $ 639,764 $ (1,088,483) $ 18,125,223 $ 1,180,476 $ Business-Type Activities:
Direct Borrowings:
Notes Payable 5,829,843 $ - $ (413,918) $ 5,415,925 $ 424,734 $ Other Long-Term Liabilities:
Compensated Absences 120,489 107,722 (101,824) 126,387 31,596 Total Business-Type
Activities 5,950,332 $ 107,722 $ (515,742) $ 5,542,312 $ 456,330 $ Governmental Long-Term Debt
Note Payable
Del Mar borrowed $3,000,000 for its Sidewalk, Street, and Drainage Project. Part of the proceeds were used to refinance a previous loan from San Diego Association of Governments (SANDAG) through SANDAG’s debt financing program. Future principal and interest will be paid annually using the City’s annual TransNet revenue allocations received from SANDAG. The interest rate will be 3.85% per year.
The future debt service requirements for this note are as follows:
Fiscal Year Ending Principal Interest Total
2024 71,250 $ 61,507 $ 132,757 $
2025 58,369 76,250 134,619
2026 57,202 80,000 137,202
2027 55,833 81,250 137,083
2028 54,137 86,250 140,387
2029 - 2033 238,471 506,250 744,721
2034 - 2038 168,280 648,750 817,030
2039 - 2043 90,022 825,000 915,022
2044 9,169 142,500 151,669
Total 2,517,500 $ 792,990 $ 3,310,490 $
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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(60)
NOTE 7 CHANGES IN LONG-TERM LIABILITIES
Governmental Long-Term Debt (Continued)
Note Payable – City Hall
Del Mar borrowed $16,161,000 for its City Hall Project. Annual payments began on February 1, 2017, are to be paid through August 2045 at an interest rate of 3.24% per annum.
The future debt service requirements for this note are as follows:
Fiscal Year Ending Principal Interest Total
2024 416,812 $ 444,284 $ 861,096 $
2025 430,317 430,561 860,878
2026 444,259 416,393 860,652
2027 458,653 401,765.00 860,418
2028 473,514 386,665.00 860,179
2029 - 2033 2,607,882 1,689,117 4,296,999
2034 - 2038 3,058,637 1,231,060 4,289,697
2039 - 2043 3,587,301 693,231 4,280,532
2044 - 2046 2,443,525 120,437 2,563,962
Total 13,920,900 $ 5,813,513 $ 19,734,413 $
Note Payable – Regional Communication System
The City entered into a finance agreement in August 2016 with the County of San Diego for $435,436 plus accrued interest for its portion of the regional communication system upgrade. Annual payments began on June 30, 2017, are to be paid through June 2026 at an interest rate of 2.79% per annum.
The future debt service requirements for this note are as follows:
Fiscal Year Ending Principal Interest Total
2024 46,499 $ 4,002 $ 50,501 $
2025 47,797 2,704 50,501
2026 49,130 1,371 50,501
Total 143,426 $ 8,077 $ 151,503 $
Leases
The City leases land under a long-term, noncancelable lease agreement. The lease expires at 2025 and does not have a renewal option.
Fiscal Year Ending June 30, Principal Interest Total
2024 117,103 $ 5,758 $ 122,861 $
2025 126,851 2,154 129,005
$ 7,912 243,954 $ 251,866 $
103 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(61)
NOTE 7 CHANGES IN LONG-TERM LIABILITIES (CONTINUED)
Governmental Long-Term Debt (Continued)
Subscription-Based Information Technology Arrangements
The City has entered into subscription based-information technology arrangements (SBITAs) for software applications. The SBITA arrangement expires in 2025 and provides for renewal options.
As of June 30, 2023, SBITA assets and the related accumulated amortization totaled $54,976 and $23,561, respectively.
The future subscription payments under SBITA agreements are as follows:
Fiscal Year Ending June 30, Principal Interest Total
2024 24,350 $ 829 $ 25,179 $
2025 9,159 73 9,232
$ 902 33,509 $ 34,411 $
Business-Type Long-Term Debt
Note Payable – 21st Street Sewer Pump Station
The City entered into a finance agreement in February 2010 with the state Water Resources Control Board and was approved for financial assistance in the amount of $5,000,000 plus accrued interest provided through the Clean Water State Revolving Fund. These funds were used for the replacement of the 21st Street Sewer Pump Station. This note is secured by net revenues and is secured on parity with existing 1993 Sewer System Improvements Certificates of Participation. Annual payments of $344,017, which began on August 1, 2013, are to be paid through August 2032 at an interest rate of 2.9% per annum.
The future debt service requirements for this note are as follows:
Fiscal Year Ending Principal Interest Total
2024 258,480 $ 85,537 $ 344,017 $
2025 265,975 78,042 344,017
2026 273,689 70,328 344,017
2027 281,626 62,391 344,017
2028 289,793 54,224 344,017
2029 - 2033 1,580,006 140,079 1,720,085
Total 2,949,569 $ 490,601 $ 3,440,170 $
This note payable is secured by the net revenues generated by the Wastewater Enterprise Fund. Net revenue is defined as all revenues received less operations and maintenance costs (excluding depreciation) for the fiscal year. Net revenues for the fiscal year ended June 30, 2023 totaled $1,301,783 and total debt service (principal and interest) paid during the year was $309,568 for the note payable. 104 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(62)
NOTE 7 CHANGES IN LONG-TERM LIABILITIES (CONTINUED)
Business-Type Long-Term Debt (Continued)
Note Payable – San Elijo Joint Powers Authority (SEJPA) Pipeline The City entered into a finance agreement in June 2015 with the California Infrastructure and Economic Development Bank (IBank) and was approved for financial assistance in the amount of $3,535,354 plus accrued interest provided through the Infrastructure State Revolving Fund Program. These funds were used for the replacement of a sewage pipeline. This note is secured by net revenues which are required to be 1.2 times the maximum annual debt service payable which in fiscal year 2022-2023 is $217,970. The City’s net revenue in fiscal year 2022-2023 is $1,221,583 which exceeds the requirement. Annual payments began on August 1, 2016, are to be paid through August 2035 at an interest rate of 2.17% per annum.
The future debt service requirements for this note are as follows:
Fiscal Year Ending Principal Interest Total
2024 166,254 $ 51,716 $ 217,970 $
2025 169,862 48,069 217,931
2026 173,548 44,343 217,891
2027 177,314 40,536 217,850
2028 181,161 36,647 217,808
2029 - 2033 966,509 121,874 1,088,383
2034 - 2036 631,708 20,758 652,466
Total 2,466,356 $ 363,943 $ 2,830,299 $
105 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(63)
NOTE 8 FUND BALANCES
Capital
Improvement Nonmajor
General Capital Governmental
Fund Projects Fund Funds Total
Nonspendable:
Prepaid Items 2,493 $ - $ - $ 2,493 $
Total Nonspendable 2,493 - - 2,493
Restricted for:
Public Safety - - 150,326 150,326
Public Works - - 385,565 385,565
Street Projects - - 135,034 135,034
Low-Income Housing - - 1,152,066 1,152,066
Total Restricted - - 1,822,991 1,822,991
Committed to:
Parks and Community Center - - 278,263 278,263
Total Committed - - 278,263 278,263
Assigned to:
Compensated Absences 100,000 - - 100,000
Equipment Replacement 985,400 - - 985,400
Public Television 3,572 - - 3,572
Self-Insurance 450,000 - - 450,000
Pension Reserve 3,400,000 - - 3,400,000
Special Projects 874,180 - - 874,180
Measure Q 7,769,899 - 7,769,899
Capital Projects - 991,015 - 991,015
Total Assigned 13,583,051 991,015 - 14,574,066
Unassigned 6,398,478 - - 6,398,478 ` Total Fund Balances 19,984,022 $ 991,015 $ 2,101,254 $ 23,076,291 $ Nonspendable for Prepaid Items represents amounts that cannot be spent because they are not in spendable form.
Restricted for Public Safety accounts for grant funds received for public safety programs, equipment, or supplies, and represents funds to maintain the City’s portion of the San Diego County and Imperial County Regional Communications System.
Restricted for Public Works represents funds received through the City’s solid waste franchise agreement to implement the countywide integrated waste management plan and program.
Restricted for Street Projects are designated for the specific purposes as restricted by law or administrative action.
106 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(64)
NOTE 8 FUND BALANCES (CONTINUED)
Restricted for Low-Income Housing represents funds to provide for low and moderate income housing as required by the state Housing Law. These funds are collected as a fee from developers when building permits are issued.
Committed to Parks and Community Center represents funds received from facility use permits of the community center designated for park and beach maintenance, and Powerhouse Community Center maintenance and operations.
Assigned to Compensated Absences are funds set aside for unpaid vacation time due to employees.
Assigned to Equipment Replacement are funds set aside to provide for the replacement of capital equipment currently owned.
Assigned to Public Television represents funds received through the City’s local cable company agreement to provide television production equipment, airtime on local cable system, and to televise public information and meetings.
Assigned to Self-Insurance are funds established for payment of the deductible portions of claims not covered by insurance policies.
Assigned to Pension Reserve are funds set aside to pay for unfunded accrued pension liability or current pension obligations.
Assigned to Special Projects are funds set aside from a voter’s approved 1% sales tax measure that are set aside for community reinvestment/infrastructure types of projects.
Assigned to Capital Projects are funds used for the acquisition and construction of major capital facilities.
Assigned to Measure Q are funds used for the acquisition and construction of major capital projects.
NOTE 9 RETIREMENT PLANS
A. General Information about the Pension Plans
Plan Descriptions
All qualified permanent and probationary employees are eligible to participate in the City’s separate Safety (lifeguard and fire) and Miscellaneous (all other) Employee Pension Plans, cost-sharing multiple employer defined benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS).
Benefit provisions under the Plans are established by state statute and City resolution.
CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.
107 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(65)
NOTE 9 RETIREMENT PLANS (CONTINUED)
A. General Information about the Pension Plans (Continued) Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments, and death benefits to plan members who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of fulltime employment. Members with five years of total service are eligible to retire at age 50 to 62 with statutorily reduced benefits. For employees hired into a plan with the 1.5% at 65 formula, eligibility for service retirement is age 55 with at least five years of services.
PEPRA miscellaneous members become eligible for service retirement upon attainment of age 52 with at least five years of service. All members are eligible for nonduty disability benefits after five years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. Safety members can receive a special death benefit if the member dies while actively employed and the death is job related. Fire members may receive the alternate death benefit in lieu of the Basic Death Benefit or the 1957 Survivor Benefit if the member dies while actively employed and has at least 20 years of total CalPERS service. The cost of living adjustments for each plan are applied as specified by the California Public Employees’ Retirement Law.
The Plans’ provisions and benefits in effect at June 30, 2023 are summarized as follows:
Classic Members Classic Members New Members
Prior to On or After On or After
January 1, 2013 January 1, 2013 January 1, 2013
Benefit Formula - Active 3% @ 60 2% @ 60 2% @ 62
Benefit Formula - Inactive 2% @ 55 N/A N/A
Benefit Vesting Schedule 5 years of service 5 years of service 5 years of service Benefit Payments monthly for life monthly for life monthly for life Retirement Age 50 - 60 50 - 63 52 - 67
Monthly Benefits, as a Percentage
of Eligible Compensation 2.0% to 3.0% 1.0% to 2.5% 1.0% to 2.5% Required Employee Contribution Rates 7.81% 6.93% 7.00%
Required Employer Contribution Rates:
Normal Cost Rate 14.840% 8.950% 7.560%
Payment of Unfunded Liability 693,185 $ 3,610 $ 2,610 $ Miscellaneous
108 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(66)
NOTE 9 RETIREMENT PLANS (CONTINUED)
A. General Information about the Pension Plans (Continued) Benefits Provided (Continued)
Prior to After Prior to After to
January 1, 2013 January 1, 2013 January 1, 2013 January 1, 2013 Benefit Formula 3% @ 50 2.7% @ 57 3% @ 50 2.7% @ 57
Benefit Vesting Schedule 5 years 5 years 5 years 5 years of service of service of service of service
Benefit Payments monthly for life monthly for life monthly for life monthly for life Retirement Age 50 57 50 50
Monthly Benefits, as a Percentage
of Eligible Compensation 3.00% 2.70% 3.00% 2.70%
Required Employee Contribution Rates 8.99% 13.00% 8.95% 13.00% Required Employer Contribution Rates:
Normal Cost Rate 22.470% 12.780% 18.170% 12.780%
Payment of Unfunded Liability 389,636 $ 2,081 $ 108,084 $ 923 $ Safety
Fire Lifeguard
Contributions
Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. 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. City contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contributions requirements are classified as plan member contributions. The City made contributions to the Miscellaneous and Safety Plans during the fiscal year ended June 30, 2023 of $1,123,944 and $736,587, respectively.
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
As of June 30, 2023, the City reported net pension liabilities for its proportionate shares of the net pension liability of all Plans as follows:
Proportionate
Share of
Net Pension
Liability
Miscellaneous 9,694,211 $
Safety 7,008,796
Total Net Pension Liability $ 16,703,007
109 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(67)
NOTE 9 RETIREMENT PLANS (CONTINUED)
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
The City’s net pension liability for each plan is measured as the proportionate share of the net pension liability. The net pension liability of each of the Plans is measured as of June 30, 2022, and the total pension liability for each plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2021 rolled forward to June 30, 2022 using standard update procedures. The City’s proportionate share of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined.
The City’s proportionate share of the net pension liability for each plan as of the measurement date ended June 30, 2021 and 2022 was as follows:
Miscellaneous Safety
Proportion - June 30, 2021 0.23996 % 0.09424 %
Proportion - June 30, 2022 0.26470 0.12040
Change - Increase (Decrease) 0.02474 % 0.02616 %
For the year ended June 30, 2023, the City recognized pension expense of $314,861 ($74,382 – Miscellaneous Plan and $240,479 – Safety Plan). At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Deferred Deferred Deferred Deferred
Outflows Inflows Outflows Inflows
of Resources of Resources of Resources of Resources
Pension Contributions Subsequent
to Measurement Date 1,123,944 $ - $ 736,587 $ - $
Differences Between Expected
and Actual Experience 194,679 (130,387) 290,069 (76,110) Change in Assumptions 993,375 706,699 -
Change in Employer's Proportion
and Differences Between the
Employer's Contributions and the
Employer's Proportionate Share
of Contributions - (385,410) - (191,441)
Net Differences Between
Projected and Actual Earnings
on Plan Investments 1,775,720 - 1,106,787 -
Total 4,087,718 $ (515,797) $ 2,840,142 $ (267,551) $
Miscellaneous Safety
110 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(68)
NOTE 9 RETIREMENT PLANS (CONTINUED)
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
$1,860,531 ($1,123,944 – Miscellaneous Plan and $736,587 – Safety Plan) reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Year Ending June 30, Miscellaneous Safety
2024 573,615 $ 512,412 $
2025 502,241 400,043
2026 286,029 248,394
2027 1,086,092 675,155
2028 - -
Thereafter - -
Actuarial Assumptions
The total pension liability for the June 30, 2022 measurement period was determined by an actuarial valuation as of June 30, 2021, with update procedures used to roll forward the total pension liability to June 30, 2022. The total pension liability was based on the following assumptions:
Miscellaneous Safety
Valuation Date June 30, 2021 June 30, 2021
Measurement Date June 30, 2022 June 30, 2022
Actuarial Cost Method Market Value Market Value
of Assets of Assets
Actuarial Assumptions:
Discount Rate 6.90% 6.90%
Inflation 2.30% 2.30%
Salary Increases (1) (1)
Mortality Rate Table (2) (2)
Post Retirement Benefit Increase (3) (3)
(1) Varies by entry age and service
(2) The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study for the period from 2001 to 2019. Pre-retirement and Post-retirement mortality rates include generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021 that can be found on the CalPERS website.
(3) The less of contract COLA or 2.30% until Purchasing Power Protection Allowance Floor on purchasing power applies, 2.30% thereafter.
111 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(69)
NOTE 9 RETIREMENT PLANS (CONTINUED)
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Long-Term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations, as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short term (first 10 years) and the long-term (11+ years) using a building block approach. Using the expected nominal returns for both short term and long term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short term and long term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.
The expected real rates of return by asset class are as follows:
New Real Return
Strategic Years
Asset Class (a) Allocation (a) (b)
Global Equity 30.00 % 4.45 %
Global Equity - Non-Cap-Weighted 12.00 3.84
Private Equity 13.00 7.28
Treasury 5.00 0.27
Mortgage-Backed Securities 5.00 0.50
Investment Grade Corporates 10.00 1.56
High Yield 5.00 2.27
Emerging Market Debt 5.00 2.48
Private Debt 5.00 3.57
Real Assets 15.00 3.21
Leverage (5.00) (0.59)
Total 100.00 %
(b) Figures are based on the 2021 Asset Liability Management study. (a) An expected inflation of 2.30% used for this period 112 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(70)
NOTE 9 RETIREMENT PLANS (CONTINUED)
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Discount Rate
The discount rate used to measure the total pension liability was 6.90% The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate
The following presents the City’s proportionate share of the net pension liability for each plan, calculated using the discount rate for each plan, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:
Current
1% Decrease Discount Rate 1% Increase
(5.90%) (6.90%) (7.90%)
City's Proportionate Share of the
Net Pension Liability $ 9,694,211 14,735,493 $ 5,546,487 $ Miscellaneous
Current
1% Decrease Discount Rate 1% Increase
(5.90%) (6.90%) (7.90%)
City's Proportionate Share of the
Net Pension Liability $ 7,008,796 10,312,611 $ 4,308,673 $ Safety
Pension Plans Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.
113 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(71)
NOTE 9 RETIREMENT PLANS (CONTINUED)
C. Payable to the Pension Plans
At June 30, 2023, the City had no outstanding amount of contributions to the pension plans required for the year ended June 30, 2023.
NOTE 10 DEFERRED COMPENSATION
The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code (IRC) Section 457 whereby employees authorize the City to withhold funds from their salary to be invested in the plan’s investment options. The plan, organized as a trust for the exclusive benefit of the participants and available to all City employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. The assets of this plan are not the property of the City and are not subject to the claims of the City’s general creditors. As a result, the assets of this plan are not reported in the financial statements. The City contributed $12,000 to the plan during fiscal year 2022- 2023.
NOTE 11 GOVERNMENTAL MONEY PURCHASE PLAN
On November 15, 1999, the City adopted a money purchase pension plan. The plan was created in accordance with IRC Section 401(a). The plan is organized as a trust for the exclusive benefit of the participants and is available to the City’s management employees.
The plan allows the participants to defer a portion of their salary to future years. The City does not require participants to contribute a minimum percentage of participant earnings.
The participants have the option to determine a percentage of earnings to contribute into the plan.
Contributions are paid for by the employees. The plan allows the participants to become immediately fully vested in their accounts and has a normal retirement age of 60. The participants will not have access to funds until termination, retirement, or death. Plan assets are held by a trustee on behalf of City employees. The assets of this plan are not reported in the financial statements.
114 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(72)
NOTE 12 LITIGATION AND COMMITMENTS
Litigation
The City is presently involved in other matters of litigation that have arisen in the normal course of the City’s business. City management believes, based upon consultation with the City Attorney, that these cases, in the aggregate, are not expected to have a material adverse financial impact on the City. Additionally, City management believes that sufficient reserves are available to the City to cover any potential losses, should an unfavorable outcome materialize. See Note 14 for additional information regarding the City’s risk management and Note 8 for the amount of fund balance assigned to self-insurance.
Construction Contracts and Commitments
As of June 30, 2023, construction contracts totaled $3,976,323 of which $844,786 has been expended. City commitments for outstanding encumbrances (purchase orders and contracts for goods and services not yet delivered) by major governmental funds is $4,982,475 for capital improvements in the City and is shown as committed, assigned or restricted.
NOTE 13 POSTEMPLOYMENT HEALTH CARE BENEFITS
The City has no obligation to provide postemployment health care benefits for retirees.
Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), eligible employees may elect to pay for a continuation of insurance to provide healthcare benefits. Certain requirements are outlined by the federal government for this coverage. The premium plus a 2% administration fee is paid in full by the insured on or before the tenth day of the month for the actual month covered. This program is offered for a duration of 18 months after the termination date. There is no associated cost to the City under this program.
During fiscal year 2018-2019, the Del Mar Firefighters Association (DMFA) approved the creation of VantageCare Retirement Health Savings Program (RHS) through the International City/County Management Association Retirement Corporation (ICMA-RC). The RHS will provide tax-free assets to members of DMFA for a wide range of medical expenses. DMFA members will contribute 1% of earnings for firefighter and paramedic classifications and 3% of earnings for fire captain and engineer classifications. The City has no obligation to provide any assistance for costs associated with the plan. 115 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(73)
NOTE 14 RISK MANAGEMENT
The City is a member of the Public Risk Innovation, Solutions, and Management (PRISM).
PRISM is a consortium of other agencies in California who have joined together to achieve savings on insurance premiums through volume purchasing and risk management consulting. Each member pays for its proportionate share of its individually contracted insurance coverage. The City does not own an equity interest in PRISM and separate financial statements are prepared for PRISM. Copies of CSAC-EIA’s annual financial report may be obtained by writing to 75 Iron Point Circle, Suite 200, Folsom, CA 95630.
General Liability
As a member of PRISM, the City is self-insured for the first $100,000 of each occurrence.
The difference between the City’s $100,000 self-insurance retention and $25,000,000 of pooled liability insurance for each occurrence is covered by PRISM, with an additional $25,000,000 of purchased liability for a total of $50,000,000. Specific coverage includes bodily injury, property damage, municipal errors and omissions and personal injury.
The City accounts for general liability as part of long-term debt in governmental activities.
Workers’ Compensation
The City uses a risk management self-insurance workers’ compensation fund (an internal service fund) to account for and finance its uninsured risk of loss. All funds of the City make payments based on actuarial estimates of the amounts needed to pay prior and current year claims and to establish appropriate reserves. The City is self-insured for the first $125,000 for each occurrence and has excess insurance up to $50,000,000.
General liability and workers’ compensation claims were as follows for June 30, 2023:
General Workers'
Liability Compensation
Unpaid Claims - June 30, 2021 39,459 $ 352,620 $
Incurred Claims (Including IBNR) 109,148 204,287
Claims Payments (47,097) (137,156)
Unpaid Claims - June 30, 2022 196,649 324,612
Incurred Claims (Including IBNR) 187,098 71,806
Claims Payments (7,550) (51,335)
Unpaid Claims - June 30, 2023 260,905 $ 460,375 $
The general liability claims are recorded in the governmental activities. The workers’ compensation claims are recorded in the internal service fund. 116 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(74)
NOTE 14 RISK MANAGEMENT (CONTINUED)
Settled claims have not exceeded any of the City’s coverage amounts in any of the last three years and there were no reductions in the City’s insurance coverage during the fiscal year ended June 30, 2023.
Other Insurance Policies
The City maintains insurance coverage in the following specific areas: real and personal property damage with loss of revenue and increased expenses, auto-physical damage, machinery damage, faithful performance bonds, cyber-attacks, and pollution.
NOTE 15 ASSESSMENT DISTRICT BOND ISSUES
The City has issued Special Assessment Bonds as allowed under the state of California Special Improvement Act. The City has no obligation beyond the balances in the designated Agency fund for any delinquent assessment district bond payments. The City acts solely as an agent for those paying assessments and the bondholders of the obligations outstanding.
If delinquencies occur beyond the amounts held in the reserve funds created from bond proceeds, the City has no duty to pay the delinquency out of any available funds of the City.
Neither the faith, credit, nor taxing power of the City is pledged to the payment of the bonds.
Therefore, such bonds are not an appropriate liability of the City and are not included in the accompanying financial statements.
At June 30, 2023, the outstanding special assessment district bond is as follows:
The Ocean View/Pines Assessment District No. 2005-0l Bonds of $932,201 were issued October 1, 2005, to finance the removal of overhead utilities in the Ocean View Pines neighborhood area. The bonds outstanding at June 30, 2023 were $200,000.
NOTE 16 EXPENDITURES EXCEEDING APPROPRIATIONS
The nonmajor Grants and Housing Special Revenue Funds exceeded budgets by $1,639 and $1,593, respectively. These funds have adequate resources to cover the budget overage.
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REQUIRED SUPPLEMENTARY INFORMATION
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CITY OF DEL MAR, CALIFORNIA
MISCELLANEOUS PLAN
SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY LAST TEN FISCAL YEARS*
See accompanying Note to Required Supplementary Information. (78)
June 30, 2015 June 30, 2016 June 30, 2017
Measurement Period June 30, 2014 June 30, 2015 June 30, 2016 Plan's Proportion of the Net Pension Liability 0.15975 % 0.16365 % 0.17212 % Plan's Proportionate Share of the Net Pension Liability $ 4,489,625 3,948,228 $ 5,979,285 $ Plan's Covered Payroll $ 2,850,725 2,825,926 $ 3,083,838 $ Plan's Proportionate Share of the Net Pension
Liability as a Percentage of Covered Payroll 139.71 % 157.49 % 193.89 % Plan's Proportionate Share of the
Fiduciary Net Position as a Percentage
of the Plan's Total Pension Liability 83.03 % 81.70 % 74.06 %
NOTES TO SCHEDULE
Benefit Changes:
There were no changes in benefits.
Changes in Assumptions:
From fiscal year June 30, 2015 to June 30, 2016:
From fiscal year June 30, 2016 to June 30, 2017:
There were no changes in assumptions.
From fiscal year June 30, 2017 to June 30, 2018:
The discount rate was reduced from 7.65% to 7.15%.
From fiscal year June 30, 2018 to June 30, 2022:
There were no changes in assumptions.
From fiscal year June 30, 2022 to June 30, 2023:
The discount rate and long-term rate of return decreased from 7.15% to 6.90% and the inflation rate decreased from 2.50% to 2.30%.
* Fiscal year 2015 was the first year of implementation and therefore only nine years are shown.
GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment expense but without reduction for pension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014 measurement date was net of administrative expenses. The discount rate of 7.65% used for the June 30, 2015 measurement date is without reduction of pension plan administrative expense. 121 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
MISCELLANEOUS PLAN
SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY (CONTINUED) LAST TEN FISCAL YEARS*
See accompanying Note to Required Supplementary Information. (79)
June 30, 2018 June 30, 2019 June 30, 2020 June 30, 2021 June 30, 2022 June 30, 2023 June 30, 2017 June 30, 2018 June 30, 2019 June 30, 2020 June 30, 2021 June 30, 2022
0.17671 % 0.18155 % 0.18627 % 0.19267 % 0.23996 % 0.26470 % $ 6,842,255 6,966,181 $ 7,459,379 $ 8,126,992 $ 4,556,451 $ 9,694,211 $ $ 3,211,144 3,198,271 $ 3,595,869 $ 3,860,641 $ 3,735,541 $ 3,786,039 $ 217.81 % 213.08 % 207.44 % 210.51 % 121.98 % 256.05 %
73.31 % 75.26 % 75.26 % 75.24 % 86.87 % 73.79 %
122 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
MISCELLANEOUS PLAN
SCHEDULE OF CONTRIBUTIONS – DEFINED BENEFIT PENSION PLAN LAST TEN FISCAL YEARS*
See accompanying Note to Required Supplementary Information. (80)
June 30, 2015 June 30, 2016 June 30, 2017
Contractually Required Contribution
(Actuarially Determined) $ 529,486 411,954 $ 579,144 $
Contributions in Relation to the Actuarially
Determined Contributions (411,954) (529,486) (579,144)
Contribution Deficiency (Excess) $ - - $ - $
Covered Payroll $ 3,083,838 2,850,725 $ 3,198,271 $
Contributions as a Percentage of Covered Payroll 14.45 % 17.17 % 18.11 %
NOTES TO SCHEDULE
Valuation Date 6/30/2012 6/30/2013 6/30/2014
Methods and Assumptions Used to Determine Contribution Rates:
Actuarial Cost Method Entry age Entry age Entry age
Amortization Method (1) (1) (1)
Asset Valuation Method 15 Year Market Value Market Value Smoothed
Market Method
Inflation 2.75 % 2.75 % 2.75 %
Salary Increases (2) (2) (2)
Investment Rate of Return 7.50% (3) 7.50% (3) 7.50% (3) Retirement Age (4) (4) (4)
Mortality (5) (5) (5)
(1) Level percentage of payroll, closed
(2) Depending on age, service, and type of employment
(3) Net of pension plan investment expense, including inflation (4) 50 years for 3.00%@60 and 2.0%@60, 52 years for 2.0%@62** * Fiscal year 2015 was the first year of implementation and therefore only nine years are shown. (5) Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board.
123 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
MISCELLANEOUS PLAN
SCHEDULE OF CONTRIBUTIONS – DEFINED BENEFIT PENSION PLAN (CONTINUED) LAST TEN FISCAL YEARS*
See accompanying Note to Required Supplementary Information. (81)
June 30, 2018 June 30, 2019 June 30, 2020 June 30, 2021 June 30, 2022 June 30, 2023 $ 742,811 617,792 $ 848,836 $ 903,226 $ 1,024,043 $ 1,123,944 $ (617,792) (742,811) (848,836) (903,226) (1,024,043) (1,123,944) $ - - $ - $ - $ - $ - $
$ 3,595,869 3,211,144 $ 3,860,641 $ 3,735,541 $ 3,786,039 $ 4,002,813 $
19.24 % 20.66 % 21.99 % 24.18 % 27.05 % 28.08 %
6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 Entry age Entry age Entry age Entry age Entry age Entry age (1) (1) (1) (1) (1) (1)
Market Value Market Value Market Value Market Value Market Value Market Value
2.75 % 2.75 % 2.65 % 2.50 % 2.50 % 2.30 %
(2) (2) (2) (2) (2) (2)
7.50% (3) 7.375% (3) 7.25% (3) 7.00% (3) 7.00% (3) 6.90% (3) (4) (4) (4) (4) (4) (4)
(5) (5) (5) (5) (5) (5)
124 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
SAFETY PLAN
SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY LAST TEN FISCAL YEARS*
See accompanying Note to Required Supplementary Information. (82)
June 30, 2015 June 30, 2016 June 30, 2017
Measurement Period June 30, 2014 June 30, 2015 June 30, 2016 Plan's Proportion of the Net Pension Liability 0.07501 % 0.08038 % 0.08286 % Plan's Proportionate Share of the Net Pension Liability $ 3,311,865 2,814,100 $ 4,291,288 $ Plan's Covered Payroll $ 1,305,573 1,271,501 $ 1,336,570 $ Plan's Proportionate Share of the Net Pension Liability as as a Percentage of Covered Payroll 221.32 % 253.67 % 321.07 % Plan's Proportionate Share of the Fiduciary Net Position as as a Percentage of the Plan's Total Pension Liability 81.74 % 79.38 % 74.06 %
NOTES TO SCHEDULE
Benefit Changes:
There were no changes in benefits.
Changes in Assumptions:
From fiscal year June 30, 2015 to June 30, 2016:
From fiscal year June 30, 2016 to June 30, 2017:
There were no changes in assumptions.
From fiscal year June 30, 2017 to June 30, 2018:
The discount rate was reduced from 7.65% to 7.15%.
From fiscal year June 30, 2018 to June 30, 2022:
There were no changes in assumptions.
From fiscal year June 30, 2022 to June 30, 2023:
The discount rate and long-term rate of return decreased from 7.15% to 6.90% and the inflation rate decreased from 2.50% to 2.30%.
* Fiscal year 2015 was the first year of implementation and therefore only nine years are shown.
GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment expense but without reduction for pension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014 measurement date was net of administrative expenses. The discount rate of 7.65% used for the June 30, 2015 measurement date is without reduction of pension plan administrative expense. 125 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
SAFETY PLAN
SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY (CONTINUED) LAST TEN FISCAL YEARS*
See accompanying Note to Required Supplementary Information. (83)
June 30, 2018 June 30, 2019 June 30, 2020 June 30, 2021 June 30, 2022 June 30, 2023 June 30, 2017 June 30, 2018 June 30, 2019 June 30, 2020 June 30, 2021 June 30, 2022
0.08291 % 0.08578 % 0.08753 % 0.09021 % 0.09424 % 0.12040 % $ 5,033,469 4,953,802 $ 5,464,373 $ 6,010,435 $ 3,791,431 $ 7,008,796 $ $ 1,225,539 1,289,037 $ 1,330,403 $ 1,434,515 $ 1,370,574 $ 1,281,066 $ 384.30 % 410.71 % 410.73 % 418.99 % 276.63 % 547.11 %
73.31 % 72.26 % 75.26 % 71.92 % 82.83 % 70.70 %
126 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
SAFETY PLAN
SCHEDULE OF CONTRIBUTIONS – DEFINED BENEFIT PENSION PLAN LAST TEN FISCAL YEARS*
See accompanying Note to Required Supplementary Information. (84)
June 30, 2015 June 30, 2016 June 30, 2017
Contractually Required Contribution
(Actuarially Determined) $ 336,247 303,598 $ 370,167 $
Contributions in Relation to the Actuarially
Determined Contributions (303,598) (336,247) (370,167)
Contribution Deficiency (Excess) $ - - $ - $
Covered Payroll $ 1,336,570 1,305,573 $ 1,289,037 $
Contributions as a Percentage of Covered Payroll 23.25% 25.16% 28.72%
NOTES TO SCHEDULE
Valuation Date 6/30/2012 6/30/2013 6/30/2014
Methods and Assumptions Used to Determine Contribution Rates:
Actuarial Cost Method Entry age Entry age Entry age
Amortization Method (1) (1) (1)
Asset Valuation Method 15 Year Market Value Market Value Smoothed
Market Method
Inflation 2.75 % 2.75 % 2.75 %
Salary Increases (2) (2) (2)
Investment Rate of Return 7.50% (3) 7.50% (3) 7.50% (3) Retirement Age (4) (4) (4)
Mortality (5) (5) (5)
(1) Level percentage of payroll, closed
(2) Depending on age, service, and type of employment
(3) Net of pension plan investment expense, including inflation (4) 50 years for 3.00%@50 and 2.0%@50
* Fiscal year 2015 was the first year of implementation and therefore only nine years are shown. (5) Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board.
127 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
SAFETY PLAN
SCHEDULE OF CONTRIBUTIONS – DEFINED BENEFIT PENSION PLAN (CONTINUED) LAST TEN FISCAL YEARS*
See accompanying Note to Required Supplementary Information. (85)
June 30, 2018 June 30, 2019 June 30, 2020 June 30, 2021 June 30, 2022 June 30, 2023 $ 476,504 399,196 $ 569,914 $ 613,844 $ 674,037 $ 736,587 $ (399,196) (476,504) (569,914) (613,844) (674,037) (736,587) $ - - $ - $ - $ - $ - $
$ 1,330,403 1,225,539 $ 1,434,515 $ 1,370,574 $ 1,281,066 $ 1,311,964 $
32.57% 35.82% 39.73% 44.79% 52.62% 56.14%
6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 Entry age Entry age Entry age Entry age Entry age Entry age (1) (1) (1) (1) (1) (1)
Market Value Market Value Market Value Market Value Market Value Market Value
2.75 % 2.75 % 2.65 % 2.50 % 2.50 % 2.30 %
(2) (2) (2) (2) (2) (2)
7.50% (3) 7.375% (3) 7.275% (3) 7.00% (3) 7.00% (3) 6.90% (3) (4) (4) (4) (4) (4) (4)
(5) (5) (5) (5) (5) (5)
128 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
GENERAL FUND
BUDGETARY COMPARISON SCHEDULE
YEAR ENDED JUNE 30, 2023
See accompanying Note to Required Supplementary Information. (86)
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes $ 17,874,350 16,854,350 $ 18,495,424 $ 621,074 $
Licenses, Fees, and Permits 1,324,350 1,224,350 1,558,110 233,760 Intergovernmental 1,139,535 261,000 1,120,888 (18,647)
Charges for Services 2,450,780 2,450,780 2,239,149 (211,631) Fines and Forfeitures 1,059,000 859,000 1,594,094 535,094 Investment Income 263,500 263,500 481,551 218,051
Contributions 3,652 - 3,660 8
Other 55,170 55,170 177,588 122,418
Total Revenues 24,170,337 21,968,150 25,670,464 1,500,127
EXPENDITURES
Current:
General Government 8,290,055 6,986,570 7,497,298 792,757 Public Safety 7,789,915 7,712,320 7,613,455 176,460
Public Works 716,292 489,140 411,085 305,207
Capital Outlay 1,675,750 75,000 1,325,554 350,196
Debt Service:
Principal - - 129,572 (129,572)
Interest - - 10,328 (10,328)
Total Expenditures 18,472,012 15,263,030 16,987,292 1,484,720
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 5,698,325 6,705,120 8,683,172 2,984,847
OTHER FINANCING SOURCES (USES)
Transfers In 30,000 40,000 166,847 (136,847)
Transfers Out (3,407,220) (4,155,688) (4,351,439) (195,751) Total Other Financing Sources (Uses) (3,367,220) (4,125,688) (4,184,592) (332,598) NET CHANGE IN FUND BALANCE 1,572,637 3,337,900 4,498,580 2,652,249 Fund Balance - Beginning of Year 15,485,442 15,485,442 15,485,442 - FUND BALANCE - END OF YEAR $ 17,058,079 18,823,342 $ 19,984,022 $ 2,652,249 $ Budgeted Amounts
129 March 18, 2024 Item 10
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130 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
NOTE TO REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2023
(88)
NOTE 1 BUDGET AND BUDGETARY ACCOUNTING
The City follows these procedures in establishing the City’s budget:
1. The annual budget adopted by the City Council provides for the general operation of the City. It includes proposed expenditures and the means of financing them.
2. The City Council approves total budgeted appropriations and any amendments to appropriations throughout the year. This “appropriated budget” covers City expenditures in the General, Special Revenue, and Capital Projects Funds. The legal level of budgetary control is at the fund level. The City Manager is authorized to transfer budgeted amounts between individual accounts within a fund. Supplemental budgetary increases in appropriations for the General, Special Revenue, and Capital Project Funds in the amount of $5,641,386 were made during the year ended June 30, 2023.
3. Formal budgetary integration is employed as a management control device.
Commitments for materials and services, such as purchase orders and contracts, are recorded during the year as encumbrances to assist in controlling expenditures.
Unencumbered appropriations at year-end automatically lapse. Those appropriations may be re-encumbered in the following year only after reconsideration.
4. Budgets for the General, Special Revenue, Debt Service and Capital Projects Funds (for which annual budgets were adopted) are adopted on a basis substantially consistent with accounting principles generally accepted in the United States of America. Accordingly, actual revenues and expenditures can be compared with related budgeted amounts without any significant reconciling items. No budgetary comparisons are presented for the Regional Transportation Congestion Improvement Program (RTCIP) capital project fund and for proprietary funds as the City is not legally required to adopt a budget for these types of funds.
5. Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative), the City is restricted as to the amount of annual appropriations from certain proceeds of taxes. If proceeds of taxes exceed allowed appropriations, the excess must be either refunded to the State Controller or returned to the taxpayers through revised tax rates, revised fee schedules, or other refund arrangements. 131 March 18, 2024 Item 10
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132 March 18, 2024 Item 10
SUPPLEMENTARY INFORMATION
133 March 18, 2024 Item 10
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134 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
GENERAL FUND
COMBINING BALANCE SHEET
JUNE 30, 2023
(92)
Total
General Fund Measure Q General Fund
ASSETS
Cash and Investments $ 7,277,892 13,012,029 $ 20,289,921 $ Receivables:
Taxes 643,780 1,174,786 1,818,566
Accrued Interest 49,974 93,694 143,668
Accounts, Net - 315,785 315,785
Leases - 1,468,318 1,468,318
Due from Other Agencies - 52,749 52,749
Due from Other Funds - 35,196 35,196
Prepaid Items - 2,493 2,493
Total Assets $ 7,971,646 16,155,050 $ 24,126,696 $
LIABILITIES
Accounts Payable and Accrued Liabilities $ 135,077 1,678,208 $ 1,813,285 $ Deposits Payable 66,670 625,536 692,206
Due to Other Agencies - 6,236 6,236
Unearned Revenue - 166,532 166,532
Total Liabilities 201,747 2,476,512 2,678,259
DEFERRED INFLOWS OF RESOURCES
Leases 1,436,294 - 1,436,294
Unavailable Revenues 28,121 - 28,121
Total Deferred Inflows of Resources - 1,464,415 1,464,415
FUND BALANCES
Nonspendable - 2,493 2,493
Assigned 7,769,899 5,813,152 13,583,051
Unassigned - 6,398,478 6,398,478
Total Fund Balances 7,769,899 12,214,123 19,984,022
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances $ 7,971,646 16,155,050 $ 24,126,696 $ 135 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
GENERAL FUND
COMBINING SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
YEAR ENDED JUNE 30, 2023
(93)
Total
General Fund Measure Q General Fund
REVENUES
Taxes $ 3,327,469 15,167,955 $ 18,495,424 $
Licenses, Fees, and Permits - 1,558,110 1,558,110
Intergovernmental - 1,120,888 1,120,888
Charges for Services - 2,239,149 2,239,149
Fines and Forfeitures - 1,594,094 1,594,094
Investment Income 74,477 407,074 481,551
Contributions - 3,660 3,660
Other - 177,588 177,588
Total Revenues 3,401,946 22,268,518 25,670,464
EXPENDITURES
Current:
General Government - 7,497,298 7,497,298
Public Safety - 7,613,455 7,613,455
Public Works - 411,085 411,085
Capital Outlay 1,325,554 - 1,325,554
Debt Service:
Principal - 129,572 129,572
Interest - 10,328 10,328
Total Expenditures 1,325,554 15,661,738 16,987,292
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 2,076,392 6,606,780 8,683,172
OTHER FINANCING SOURCES (USES)
Transfers In - 166,847 166,847
Transfers Out - (4,351,439) (4,351,439)
Total Other Financing Sources (Uses) - (4,184,592) (4,184,592) NET CHANGE IN FUND BALANCES 2,076,392 2,422,188 4,498,580 Fund Balances - Beginning of Year 5,693,507 9,791,935 15,485,442 FUND BALANCES - END OF YEAR $ 7,769,899 12,214,123 $ 19,984,022 $ 136 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2023
(94)
SPECIAL REVENUE FUNDS
The Gasoline Tax Special Revenue Fund is used to account for state gasoline taxes received by the City. These funds may be used for street maintenance, right-of-way acquisition, and street construction.
The Open Space Special Revenue Fund accounts for park and beach maintenance, and the Powerhouse Community Center maintenance and operations. It is partially funded by facility use permits for the community center.
The Supplemental Law Enforcement Special Revenue Fund is used to account for grant revenue received by the City from the state of California for supplemental law enforcement expenditures.
The Regional Communications System Special Revenue Fund is used to account for revenue received by the City to maintain its portion of the San Diego County and Imperial County Regional Communications System.
The Grants Special Revenue Fund accounts for federal, state and local grants received by the City and the expenditure of those funds.
The Housing Special Revenue Fund accounts for in-lieu payments from developers and expenditures in support of low-income housing.
The AB 939 Special Revenue Fund accounts for the costs of implementing the countywide integrated waste management plan and programs.
The Road Maintenance and Rehabilitation Account (RMRA) Special Revenue Fund accounts for the City’s share of gas tax monies for the purpose of construction, reconstruction, maintenance, and right-of-way acquisition relating to streets and highways.
CAPITAL PROJECTS FUNDS
The Transnet II Capital Improvement Capital Projects Fund is used to account for the financial resources for the City’s Sidewalk, Street, and Drainage Project.
The Regional Transportation Congestion Improvement Program (RTCIP) Capital Projects Fund accounts for fees received on new development used to mitigate the impacts of residential development.
137 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
JUNE 30, 2023
(95)
Supplemental Regional
Law Communications
Gasoline Tax Open Space Enforcement System
ASSETS
Cash and Investments $ 371,689 14,696 $ - $ 33,756 $
Receivables:
Accrued Interest - - 1,067 -
Accounts, Net 34,229 19,552 - -
Due from Other Agencies 180,000 - - -
Total Assets $ 585,918 34,248 $ 1,067 $ 33,756 $
LIABILITIES
Accounts Payable and Accrued Liabilities $ 34,940 24,416 $ - $ - $ Deposits Payable 58,715 - - -
Due to Other Funds - - 1,067 19,862
Total Liabilities 93,655 24,416 1,067 19,862
DEFERRED INFLOW OF RESOURCES
Unavailable Revenues 214,000 - - -
Total Deferred Inflow of Resources 214,000 - - -
FUND BALANCES
Restricted for:
Public Safety - - - 13,894
Low-Income Housing - - - -
Public Works - - - -
Street Projects - 9,832 - -
Committed to:
Parks and Recreation 278,263 - - -
Total Fund Balances 278,263 9,832 - 13,894
Total Liabilities, Deferred Inflow of
Resources, and Fund Balances 34,248 $ 585,918 $ 1,067 $ 33,756 $ Special Revenue Funds
138 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET (CONTINUED)
JUNE 30, 2023
(96)
Transnet II
Capital
Grants Housing AB 939 RMRA Improvements RTCIP Total
$ 1,153,314 136,765 $ 348,389 $ 88,593 $ 3,170 $ 31,426 $ 2,181,798 $ 2,252 1,008 2,647 646 20 202 7,842
- 14,881 37,500 15,412 - - 121,574
- 6,909 - - - - 186,909
$ 1,155,566 159,563 $ 388,536 $ 104,651 $ 3,190 $ 31,628 $ 2,498,123 $ $ 3,500 16,222 $ 2,971 $ - $ - $ - $ 82,049 $
- - - - - - 58,715
- - - 14,267 - - 35,196
3,500 16,222 2,971 14,267 - - 175,960
- 6,909 - - - - 220,909
- 6,909 - - - - 220,909
- 136,432 - - - - 150,326
1,152,066 - - - - - 1,152,066
- - 385,565 - - - 385,565
- - - 90,384 3,190 31,628 135,034
- - - - - - 278,263
1,152,066 136,432 385,565 90,384 3,190 31,628 2,101,254 $ 1,155,566 159,563 $ 388,536 $ 104,651 $ 3,190 $ 31,628 $ 2,498,123 $ Special Revenue Funds Capital Projects Funds
139 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
NONMAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
YEAR ENDED JUNE 30, 2023
(97)
Supplemental Regional
Law Communications
Gasoline Tax Open Space Enforcement System
REVENUES
Taxes $ 34,115 - $ - $ - $
Licenses, Fees, and Permits 390,339 - - -
Intergovernmental 4,334 105,890 100,000 43,585
Investment Income (Loss) 1,629 - 1,576 405
Contributions 102,856 - - -
Other 6,393 - 65,271 -
Total Revenues 539,666 105,890 166,847 43,990
EXPENDITURES
Current:
General Government - - - -
Public Safety - - - 26,344
Public Works - 709,464 - -
Parks and Recreation 1,052,138 - - -
Capital Outlay 584,767 - - -
Debt Service:
Principal - - - 13,092
Interest - - - 1,523
Total Expenditures 1,636,905 709,464 - 40,959
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (1,097,239) (603,574) 166,847 3,031
OTHER FINANCING SOURCES (USES)
Transfers In 1,017,027 613,406 - -
Transfers Out - - (166,847) -
Total Other Financing Sources (Uses) 1,017,027 613,406 (166,847) - NET CHANGE IN FUND BALANCES (80,212) 9,832 - 3,031
Fund Balances - Beginning of Year 358,475 - - 10,863
FUND BALANCES - END OF YEAR $ 278,263 9,832 $ - $ 13,894 $ Special Revenue Funds
140 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
NONMAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES (CONTINUED)
YEAR ENDED JUNE 30, 2023
(98)
Transnet II
Capital
Grants Housing AB 939 RMRA Improvements RTCIP Total
$ - - $ - $ - $ - $ - $ 34,115 $
- - - - - 23,720 414,059
- 69,956 5,000 87,954 133,264 - 549,983
2,546 1,559 4,145 2,430 434 65 14,789
- - - - - - 102,856
- - 150,000 - - - 221,664
2,546 71,515 159,145 90,384 133,698 23,785 1,337,466
101,143 - 35,989 - - - 137,132
- 44,501 - - - - 70,845
- - - - - - 709,464
- - - - - - 1,052,138
- - - - - - 584,767
- 22,619 - - 70,000 - 105,711
- 2,632 - - 63,264 - 67,419
101,143 69,752 35,989 - 133,264 - 2,727,476
(98,597) 1,763 123,156 90,384 434 23,785 (1,390,010)
800,000 - - - - - 2,430,433
- - - - - - (166,847)
800,000 - - - - - 2,263,586
701,403 1,763 123,156 90,384 434 23,785 873,576
450,663 134,669 262,409 - 2,756 7,843 1,227,678
$ 1,152,066 136,432 $ 385,565 $ 90,384 $ 3,190 $ 31,628 $ 2,101,254 $ Special Revenue Funds Capital Projects Funds
141 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
GASOLINE TAX SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE
YEAR ENDED JUNE 30, 2023
(99)
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental $ 107,000 129,000 $ 105,890 $ $ (1,110) Total Revenues 107,000 129,000 105,890 (1,110)
EXPENDITURES
Current:
Public Works 870,410 760,910 709,464 160,946
Total Expenditures 870,410 760,910 709,464 160,946
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (763,410) (631,910) (603,574) 159,836
OTHER FINANCING SOURCES
Transfers In 763,410 631,910 613,406 (150,004)
Total Other Financing Sources 763,410 631,910 613,406 (150,004) NET CHANGE IN FUND BALANCE - - 9,832 9,832
Fund Balance - Beginning of Year - - - -
FUND BALANCE - END OF YEAR $ - - $ 9,832 $ 9,832 $
Budgeted Amounts
142 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
OPEN SPACE SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE
YEAR ENDED JUNE 30, 2023
(100)
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes $ 12,000 12,000 $ 34,115 $ 22,115 $
Licenses, Fees, and Permits 360,000 360,000 390,339 30,339 Intergovernmental 185,000 5,000 4,334 (180,666)
Investment Income 500 500 1,629 1,129
Contributions 137,000 100,000 102,856 (34,144)
Other 42,360 42,360 6,393 (35,967)
Total Revenues 736,860 519,860 539,666 (197,194)
EXPENDITURES
Current:
Parks and Recreation 1,201,110 1,173,490 1,052,138 148,972 Capital Outlay 747,720 331,400 584,767 162,953
Total Expenditures 1,948,830 1,504,890 1,636,905 311,925
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (1,211,970) (985,030) (1,097,239) 114,731
OTHER FINANCING SOURCES
Transfers In 975,650 985,030 1,017,027 41,377
Total Other Financing Sources 975,650 985,030 1,017,027 41,377 NET CHANGE IN FUND BALANCE (236,320) - (80,212) 156,108 Fund Balance - Beginning of Year 358,475 358,475 358,475 - FUND BALANCE - END OF YEAR $ 122,155 358,475 $ 278,263 $ 156,108 $ Budgeted Amounts
143 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
SUPPLEMENTAL LAW ENFORCEMENT SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE
YEAR ENDED JUNE 30, 2023
(101)
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental $ 100,000 100,000 $ 100,000 $ - $
Investment Income - - 1,576 1,576
Other 65,270 - 65,271 1
Total Revenues 165,270 100,000 166,847 1,577
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 165,270 100,000 166,847 1,577
OTHER FINANCING USES
Transfers Out (100,000) (165,270) (166,847) (1,577)
Total Other Financing Uses (100,000) (165,270) (166,847) (1,577)
NET CHANGE IN FUND BALANCE - - - -
Fund Balance - Beginning of Year - - - -
FUND BALANCE - END OF YEAR $ - - $ - $ - $
Budgeted Amounts
144 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
REGIONAL COMMUNICATIONS SYSTEM SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE
YEAR ENDED JUNE 30, 2023
(102)
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental $ 48,000 48,000 $ 43,585 $ $ (4,415)
Investment Income - - 405 405
Total Revenues 48,000 48,000 43,990 (4,010)
EXPENDITURES
Current:
Public Safety 34,500 34,500 26,344 8,156
Debt Service:
Principal 22,620 22,620 13,092 9,528
Interest 2,640 2,640 1,523 1,117
Total Expenditures 59,760 59,760 40,959 18,801
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (11,760) (11,760) 3,031 14,791
OTHER FINANCING SOURCES
Transfers In 11,760 11,760 - (11,760)
Total Other Financing Sources 11,760 11,760 - (11,760)
NET CHANGE IN FUND BALANCE - - 3,031 3,031
Fund Balance - Beginning of Year 10,863 10,863 10,863 - FUND BALANCE - END OF YEAR $ 10,863 10,863 $ 13,894 $ 3,031 $ Budgeted Amounts
145 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
GRANTS SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE
YEAR ENDED JUNE 30, 2023
(103)
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental $ 65,143 51,000 $ 69,956 $ 4,813 $
Investment Income 470 470 1,559 1,089
Total Revenues 65,613 51,470 71,515 5,902
EXPENDITURES
Current:
Public Safety 42,862 28,719 44,501 (1,639)
Debt Service:
Principal 22,619 22,619 22,619 -
Interest 2,632 2,632 2,632 -
Total Expenditures 68,113 53,970 69,752 (1,639)
NET CHANGE IN FUND BALANCE (2,500) (2,500) 1,763 4,263
Fund Balance - Beginning of Year 134,669 134,669 134,669 - FUND BALANCE - END OF YEAR $ 132,169 132,169 $ 136,432 $ 4,263 $ Budgeted Amounts
146 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
HOUSING SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE
YEAR ENDED JUNE 30, 2023
(104)
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Investment Income $ 3,000 3,000 $ 2,546 $ $ (454)
Total Revenues 3,000 3,000 2,546 (454)
EXPENDITURES
Current:
General Government 99,550 99,550 101,143 (1,593)
Total Expenditures 99,550 99,550 101,143 (1,593)
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (96,550) (96,550) (98,597) (2,047)
OTHER FINANCING SOURCES (USES)
Transfers In 800,000 200,000 800,000 -
Total Other Financing Sources (Uses) 800,000 200,000 800,000 - NET CHANGE IN FUND BALANCE 703,450 103,450 701,403 (2,047) Fund Balance - Beginning of Year 450,663 450,663 450,663 - FUND BALANCE - END OF YEAR $ 1,154,113 554,113 $ 1,152,066 $ (2,047) $ Budgeted Amounts
147 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
AB 939 SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE
YEAR ENDED JUNE 30, 2023
(105)
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Licenses, Fees, and Permits $ - 67,500 $ - $ - $
Intergovernmental - - 5,000
Investment Income 500 500 4,145 3,645
Other 149,000 - 150,000
Total Revenues 149,500 68,000 159,145 9,645
EXPENDITURES
Current:
General Government 77,090 73,590 35,989 41,101
Total Expenditures 77,090 73,590 35,989 41,101
NET CHANGE IN FUND BALANCE 72,410 (5,590) 123,156 50,746 Fund Balance - Beginning of Year 262,409 262,409 262,409 - FUND BALANCE - END OF YEAR $ 334,819 256,819 $ 385,565 $ 50,746 $ Budgeted Amounts
148 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
ROAD MAINTENANCE AND REHABILITATION ACCOUNT (RMRA) SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE
YEAR ENDED JUNE 30, 2023
(106)
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental $ 85,400 97,000 $ 87,954 $ 2,554 $
Investment Income - - 2,430 2,430
Total revenues 85,400 97,000 90,384 4,984
OTHER FINANCING USES
Transfers Out (97,000) - (85,400) 85,400
Total Other Financing Uses (97,000) - (85,400) 85,400
NET CHANGE IN FUND BALANCE - - 90,384 90,384
Fund Balance - Beginning of Year - - - -
FUND BALANCE - END OF YEAR $ - - $ 90,384 $ 90,384 $
Budgeted Amounts
149 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
TRANSNET II CAPITAL IMPROVEMENT CAPITAL PROJECTS FUND
BUDGETARY COMPARISON SCHEDULE
YEAR ENDED JUNE 30, 2023
(107)
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental $ 341,000 417,700 $ 133,264 $ $ (207,736) Investment Income - - 434 434
Total Revenues 341,000 417,700 133,698 (207,302)
EXPENDITURES
Capital Outlay 136,000 212,700 - 136,000
Debt Service:
Principal 66,250 66,250 70,000 (3,750)
Interest 138,750 138,750 63,264 75,486
Total Expenditures 341,000 417,700 133,264 207,736
NET CHANGE IN FUND BALANCE - - 434 434
Fund Balance - Beginning of Year 2,756 2,756 2,756 -
FUND BALANCE - END OF YEAR $ 2,756 2,756 $ 3,190 $ 434 $ Budgeted Amounts
150 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
CAPITAL IMPROVEMENT CAPITAL PROJECTS FUND – MAJOR FUND
BUDGETARY COMPARISON SCHEDULE
YEAR ENDED JUNE 30, 2023
(108)
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental 1,567,300 $ 1,987,337 $ 684,950 $ $ (1,302,387) Investment Income - - 63,564 63,564
Total Revenues 1,567,300 1,987,337 748,514 (1,238,823)
EXPENDITURES
General Government 42,980 42,980 42,975 5
Capital Outlay 2,091,300 3,007,151 909,189 2,097,962
Debt Service:
Principal 403,730 403,731 403,731 -
Interest 457,580 457,580 457,578 2
Total Expenditures 2,995,590 3,911,442 1,813,473 2,097,969
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (1,924,105) (1,428,290) (1,064,959) 859,146
OTHER FINANCING SOURCES
Transfers In 1,428,290 1,628,290 1,695,160 66,870
Total Other Financing Sources 1,428,290 1,628,290 1,695,160 66,870 NET CHANGE IN FUND BALANCE (295,815) - 630,201 926,016
Fund Balance - Beginning of Year 360,814 360,814 360,814 - FUND BALANCE - END OF YEAR $ 64,999 360,814 $ 991,015 $ 926,016 $ Budgeted Amounts
151 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
CUSTODIAL FUNDS
JUNE 30, 2023
(109)
Custodial funds are used to account for assets held by the City as an agent for individuals, private organizations, other governments, and/or other funds.
The City of Del Mar has the following custodial funds:
Stratford and Luneta Undergrounding Assessment District 1989-01 Seawall Refinance Assessment District 1999-01
Ocean View/Pines Assessment District 2005-001
Sunset Undergrounding Assessment District 2007-02
152 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
CUSTODIAL FUNDS
COMBINING STATEMENT OF FIDUCIARY NET POSITION
JUNE 30, 2023
(110)
Stratford and
Luneta Seawall Ocean View/ Sunset
Undergrounding Refinance Pines Undergrounding
Assessment Assessment Assessment Assessment
District 1989-01 District 1999-01 District 2005-01 District 2007-02 Total ASSETS
Accounts Receivable $ 158 677 $ 19 $ 66 $ 920 $
Restricted Assets:
Cash and Investments 24,513 105,148 50,192 10,328 190,181 Total Assets 105,825 24,671 50,211 10,394 191,101
NET POSITION
Restricted for Bond Holders 24,671 105,825 50,211 10,394 191,101 Total Net Position 105,825 $ 24,671 $ 50,211 $ 10,394 $ 191,101 $ 153 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
CUSTODIAL FUNDS
COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION YEAR ENDED JUNE 30, 2023
(111)
Stratford and
Luneta Seawall Ocean View/ Sunset
Undergrounding Refinance Pines Undergrounding
Assessment Assessment Assessment Assessment
District 1989-01 District 1999-01 District 2005-01 District 2007-02 Total
ADDITIONS
Investment Income $ 399 1,715 $ 371 $ 164 $ 2,649 $
Special Assessments or
Special Taxes Collected
from Property Owners - - 47,629 - 47,629
Total Additions 399 1,715 48,000 164 50,278
DEDUCTIONS
Payment for Special
Tax Debt - - 58,013 - 58,013
Total Deductions - - 58,013 - 58,013
CHANGE IN NET POSITION 399 1,715 (10,013) 164 (7,735)
Total Net Position -
Beginning of Year 104,110 24,272 60,224 10,230 198,836
TOTAL NET POSITION -
END OF YEAR $ 24,671 105,825 $ 50,211 $ 10,394 $ 191,101 $ 154 March 18, 2024 Item 10
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155 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
STATISTICAL SECTION
FISCAL YEAR 2022-2023
(113)
This part of the City of Del Mar’s (the City) Annual Comprehensive Financial Report (ACFR) presents detailed information as a context for understanding what the information in the financial statements, notes to the basic financial statements, and required supplementary information report about the City’s overall financial health.
Contents Page
Financial Trends 114
These tables contain trend information that may assist the reader in the City’s current financial performance by placing it in historical perspective.
Revenue Capacity 125
These tables contain information that may help in assessing the viability of the City’s most significant revenue sources – property taxes, transient occupancy tax (TOT), and sales and use tax.
Debt Capacity 134
These tables present information that may assist the reader in analyzing the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future.
Demographic and Economic Information 140
These tables offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place.
Operating Information 143
These tables contain service and infrastructure indicators that may inform one’s understanding on how the information in the City’s financial statements relate to the services that the City provides and the activities it performs.
156 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
NET POSITION BY COMPONENT(1)
LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(114)
2013-2014 (3) 2014-2015 2015-2016 2016-2017
Governmental Activities:
Net Investment in Capital Assets $ 59,266,263 59,605,566 $ 63,917,170 $ 70,677,865 $ Restricted 795,930 980,148 706,189 779,035
Unrestricted 3,680,641 217,804 3,657,031 (1,945,483)
Total Governmental Activities 60,803,518 $ 63,742,834 $ 68,280,390 $ 69,511,417 $ Business-Type Activities:
Net Investment in Capital Assets $ 19,468,010 18,867,190 $ 21,145,247 $ 21,782,050 $ Restricted - - - -
Unrestricted 2,532,915 2,730,948 1,565,516 1,425,671
Total Business-Type Activities 21,598,138 $ 22,000,925 $ 22,710,763 $ 23,207,721 $ Primary Government:
Net Investment in Capital Assets $ 78,734,273 78,472,756 $ 85,062,417 $ 92,459,915 $ Restricted 795,930 980,148 706,189 779,035
Unrestricted 6,213,556 2,948,752 5,222,547 (519,812)
Total Primary Government 82,401,656 $ 85,743,759 $ 90,991,153 $ 92,719,138 $ Notes:
(b) enabling legislation is enacted by the City.
Fiscal Year
(1) Accounting standards require that the net position be reported in three components in the financial statements:
investment in capital assets, net of related debt, restricted, and unrestricted.
The net position is considered restricted only when -
(2) Fiscal Year 2012-2013 amounts were restated to record expense related to the pension debt for CalPERS side fund, and to remove unamortized bond issuance costs for the implementation of GASB Statement 65. (3) Fiscal Year 2013-2014 amounts were restated to measure and recognize pension liabilities for the implementation of GASB 68 and GASB 71.
(a) an external party, such as the State of California or the federal government, places a restriction on how the revenues may be used, or
157 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
NET POSITION BY COMPONENT(1) (CONTINUED)
LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(115)
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023 $ 71,168,471 70,478,246 $ 73,838,956 $ 72,058,048 $ 71,521,446 $ 72,814,107 $ 690,821 755,945 679,422 934,485 1,123,980 1,822,991
1,320,489 2,549,881 (1,830,925) 1,674,375 6,639,579 12,806,433 $ 73,179,781 73,784,072 $ 72,687,453 $ 74,666,908 $ 79,285,005 $ 87,443,531 $ $ 20,887,789 21,388,165 $ 20,418,606 $ 20,447,077 $ 20,926,230 $ 20,591,860 $ - - 563,791 - - -
1,850,025 1,219,695 1,250,437 2,453,280 2,795,724 4,190,537 $ 22,737,814 22,607,860 $ 22,232,834 $ 22,900,357 $ 23,721,954 $ 24,782,397 $ $ 92,056,260 91,866,411 $ 94,257,562 $ 92,505,125 $ 92,447,676 $ 93,405,967 $ 690,821 755,945 1,243,213 934,485 1,123,980 1,822,991
3,170,514 3,769,576 (1,011,528) (1,011,528) 9,435,303 16,996,970 $ 95,917,595 96,391,932 $ 94,489,247 $ 92,428,082 $ 103,006,959 $ 112,225,928 $ Fiscal Year
158 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
CHANGES IN NET POSITION
LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(116)
2013-2014 2014-2015 2015-2016 2016-2017
EXPENSES
Governmental Activities:
General Government $ 4,748,943 4,328,963 $ 5,362,200 $ 6,676,027 $ Public Safety 5,705,795 5,472,799 5,716,667 6,676,661
Public Works 1,649,191 943,013 1,410,511 1,892,772
Parks and Recreation 835,545 839,063 936,586 951,289
Interest on Long-Term Debt 158,679 8,438 155,143 719,263 Total Governmental Activities Expenses 13,098,153 11,592,276 13,581,107 16,916,012 Business-Type Activities:
Water 3,165,994 2,964,821 3,072,195 3,286,281
Wastewater 2,965,384 2,759,107 2,500,851 2,530,107
Clean Water 439,752 411,143 464,373 532,792
Total Business-Type Activities Expenses 6,571,130 6,135,071 6,037,419 6,349,180 Total Primary Government Expenses 17,727,347 $ 19,669,283 $ 19,618,526 $ 23,265,192 $
PROGRAM REVENUES
Governmental Activities:
Charges for Services:
General Government $ 1,388,029 1,117,178 $ 1,646,441 $ 1,547,069 $ Public Safety 1,318,815 1,312,948 1,457,029 1,382,501
Public Works 2,209 2,165 - -
Parks and Recreation 443,169 414,556 410,206 383,027
Operating Grants and Contributions 311,393 277,781 285,416 231,257 Capital Grants and Contributions 3,874,226 7,358,463 951,754 1,802,911 Total Governmental Activities Program Revenues 7,337,841 10,483,091 4,750,846 5,346,765 Business-Type Activities:
Charges for Services:
Water 2,861,908 2,711,877 2,822,138 2,745,721
Wastewater 3,048,006 2,998,521 3,675,632 3,486,362
Clean Water 395,404 404,313 408,037 420,388
Capital Grants and Contributions 5,000 - 5,000 5,000
Total Business-Type Activities Program Revenues 6,310,318 6,114,711 6,910,807 6,657,471 Total Primary Government Revenues 16,597,802 $ 13,648,159 $ 11,661,653 $ 12,004,236 $ NET REVENUES (EXPENSES) (1)
Governmental Activities $ (1,109,185) $ (5,760,312) $ (8,830,261) $ (11,569,247) Business-Type Activities (20,360) 873,388 (260,812) 308,291 Total Net Revenues (Expenses) $ (1,129,545) $ (6,021,124) $ (7,956,873) $ (11,260,956)
GENERAL REVENUE AND OTHER CHANGES
IN NET POSITION
Governmental Activities:
Taxes:
Property Taxes $ 5,329,825 4,971,265 $ 5,291,352 $ 5,640,285 $ Sales and Use Tax 1,700,688 1,674,709 1,998,279 2,332,522 Transient Occupancy Tax 2,101,634 1,939,699 2,444,275 2,617,866 Franchise Tax 373,589 384,220 367,471 369,524
Business License Tax 191,734 191,786 208,898 226,508
Intergovernmental - Unrestricted Other 209,226 205,319 278,081 182,140 Investment Income 190,457 161,140 239,734 298,974
Sale of Capital Assets - - - 108,023
Other 228,085 412,954 493,914 1,050,341
Transfers (108,563) (19,615) (35,381) (54,285)
Total Governmental Activities 10,305,623 9,832,529 11,286,623 12,771,898 Business-Type Activities:
Unrestricted Investment Earnings 5,591 24,395 27,729 35,501 Other - 26,060 - -
Transfers 19,615 108,563 35,381 54,285
Total Business-Type Activities 25,206 159,018 63,110 89,786 Total Primary Government 9,991,547 $ 10,330,829 $ 11,349,733 $ 12,861,684 $
CHANGE IN NET POSITION
Governmental Activities $ 6,051,188 7,558,368 $ 2,939,316 $ 4,537,556 $ Business-Type Activities 200,453 323,493 402,787 709,838 Total Primary Government 7,881,861 $ 6,251,641 $ 3,342,103 $ 5,247,394 $ NOTE
- Amounts without parentheses are net revenues, meaning that program revenues were more than sufficient to cover expenses. (2) Fiscal Year 2012-2013 amounts were restated to remove unamortized bond issuance costs for the implementation of GASB Statement 65.
Fiscal Year
(1) Net revenues (expenses) is the difference between program revenues and expenses of a function or program. It indicates the degree to which a function or program is supported with its own fees and program specific grants versus its reliance upon funding from taxes and other general revenues. - Amounts in parentheses are net expenses, indicating that expenses were greater than program revenues, and therefore, general revenues were needed to finance that
159 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
CHANGES IN NET POSITION (CONTINUED)
LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(117)
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023 $ 8,461,528 6,360,890 $ 9,079,633 $ 7,048,840 $ 7,424,735 $ 8,322,651 $ 7,104,779 6,861,913 7,955,624 7,699,253 7,626,541 7,185,111 5,895,910 1,889,260 2,656,048 2,514,209 2,644,194 2,146,591 776,548 894,067 1,162,397 773,562 1,059,781 1,069,630
653,705 668,368 630,051 485,322 550,712 529,709
22,892,470 16,674,498 21,483,753 18,521,186 19,305,963 19,253,692 3,375,306 3,323,365 3,666,650 3,779,243 4,043,288 3,906,853 3,217,465 2,996,746 4,029,879 3,638,587 3,337,828 3,403,091 559,551 498,076 599,643 515,052 636,499 663,559
7,152,322 6,818,187 8,296,172 7,932,882 8,017,615 7,973,503 $ 30,044,792 23,492,685 $ 29,779,925 $ 26,454,068 $ 27,323,578 $ 27,227,195 $ $ 1,894,634 1,735,309 $ 1,789,928 $ 1,913,924 $ 2,158,279 $ 2,579,851 $ 1,778,983 1,405,751 1,868,370 1,870,581 2,579,997 2,864,512 2,404 - 2,483 - 2,636 23,720
418,447 378,446 413,491 225,363 447,250 487,329
481,814 522,338 329,537 467,683 426,084 1,331,486
585,058 885,773 915,994 955,619 484,867 1,062,926
5,161,340 4,927,617 5,319,803 5,433,170 6,099,113 8,349,824 3,440,656 3,085,668 3,348,654 3,675,298 4,363,056 4,228,276 3,096,774 3,283,228 3,261,067 3,362,819 3,884,184 3,870,619 546,730 476,980 548,327 562,349 557,050 550,727
5,000 5,000 - - 57,316 75,527
7,089,160 6,850,876 7,158,048 7,600,466 8,861,606 8,725,149 $ 12,250,500 11,778,493 $ 12,477,851 $ 13,033,636 $ 14,960,719 $ 17,074,973 $ $ (11,746,881) $ (17,731,130) $ (16,163,950) $ (13,088,016) $ (13,206,850) $ (10,903,868) 32,689 (63,162) (1,138,124) 843,991 (332,416) 751,646
$ (11,714,192) $ (17,794,292) $ (17,302,074) $ (13,420,432) $ (12,362,859) $ (10,152,222) $ 6,491,063 6,752,952 $ 6,679,052 $ 6,993,953 $ 7,771,396 $ 8,322,387 $ 4,854,514 2,227,309 5,043,747 3,752,696 5,456,137 5,633,731 3,001,300 2,697,297 2,982,510 2,300,504 3,419,866 3,816,392 387,466 459,271 424,930 390,482 404,226 442,408
241,008 240,103 243,198 235,557 282,187 276,466
212,514 133,399 162,280 120,701 151,499 71,964
386,787 245,548 519,309 387,953 559,904 (139,964)
- - - - - -
211,161 437,304 913,350 1,023,262 549,295 164,988
- 26,239 - (77,893) (87,871) (225,846)
15,785,813 13,219,422 16,968,376 15,127,215 17,806,771 19,062,394 34,566 21,501 124,228 112,833 82,951 (112,089)
- - - - - -
- (26,239) - 77,893 87,871 225,846
34,566 (4,738) 124,228 190,726 308,797 (24,218)
$ 15,820,379 13,214,684 $ 17,092,604 $ 15,317,941 $ 17,782,553 $ 19,371,191 $ $ 1,472,541 $ 804,426 (1,945,317) $ 2,039,199 $ 4,599,921 $ 8,158,526 $ 27,951 (28,596) (1,013,896) 819,773 (141,690) 1,060,443 $ 1,500,492 $ (1,973,913) $ 1,897,509 (209,470) $ 5,419,694 $ 9,218,969 $ Fiscal Year
160 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
FUND BALANCES OF GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
(118)
2013-2014 2014-2015 2015-2016 2015-2016
GENERAL FUND
Nonspendable $ - - $ - $ - $
Assigned 1,471,791 1,471,791 1,530,159 1,530,159
Unassigned 3,806,755 2,345,865 4,192,011 4,192,011
Total General Fund 3,817,656 $ 5,278,546 $ 5,722,170 $ 5,722,170 $
OTHER GOVERNMENTAL FUNDS
Nonspendable $ - - $ - $ - $
Restricted 795,930 980,148 706,189 706,189
Committed 299,415 207,819 302,160 302,160
Assigned 4,451,680 2,729,399 3,737,345 3,737,345
Total Other Governmental Funds 3,917,366 $ 5,547,025 $ 4,745,694 $ 4,745,694 $ Fiscal Year
161 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
FUND BALANCES OF GOVERNMENTAL FUNDS (CONTINUED)
LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
(119)
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023 $ 2,877 6,579 $ 3,341 $ 50,415 $ 88 $ 2,493 $
2,669,278 5,100,305 3,747,450 2,825,035 9,953,902 13,583,051 5,558,534 3,633,422 2,507,169 7,595,965 5,531,452 6,398,478 $ 8,230,689 8,740,306 $ 6,257,960 $ 10,471,415 $ 15,485,442 $ 19,984,022 $ $ - - $ - $ 77 $ 88 $ - $
690,821 755,945 679,422 698,223 869,203 1,822,991
395,516 193,395 268,295 147,207 358,387 278,263
320,493 805,635 278,065 308,370 360,814 991,015
$ 1,406,830 1,754,975 $ 1,225,782 $ 1,153,877 $ 1,588,492 $ 3,092,269 $ Fiscal Year
162 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
(120)
2013-2014 2014-2015 2015-2016 2016-2017
REVENUES
Taxes $ 10,469,129 9,865,474 $ 11,291,573 $ 12,483,838 $ Licenses and Permits 1,432,809 1,320,317 1,313,261 1,473,672 Intergovernmental 1,167,061 4,165,489 2,049,910 640,435 Charges for Services 1,447,608 1,296,138 1,471,767 1,537,125 Fines and Forfeitures 633,259 586,367 579,364 561,080
Use of Money and Property 239,733 190,457 298,973 245,548 Contributions 26,100 17,368 13,612 77,464
Other Revenues 657,152 221,469 1,046,464 1,101,638
Total Revenues 16,072,851 17,663,079 18,064,924 18,120,800
EXPENDITURES
General Government 4,465,857 4,326,650 5,055,390 6,212,785 Public Safety 5,707,066 5,442,607 5,769,859 6,411,309
Public Works 565,436 486,619 589,870 646,739
Parks and Recreation 796,933 809,797 907,484 910,515
Capital Outlays 2,652,017 4,960,745 6,620,181 11,952,324 Debt Service:
Principal 886,500 165,000 50,000 88,352
Interest and Fiscal Charges 158,718 11,532 155,143 506,960 Cost of Issuance - - - 161,610
Total Expenditures 15,232,527 16,202,950 19,147,927 26,890,594
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 840,324 1,460,129 (1,083,003) (8,769,794)
OTHER FINANCING SOURCES (USES)
Proceeds from Capital Lease - - 157,431 -
Issuance of Debt 2,285,606 704,000 622,150 3,687,966
Sale of Capital Assets - - - -
Transfers In 2,739,389 2,180,793 3,642,313 2,156,104
Transfers Out (2,774,770) (2,200,408) (3,696,598) (2,129,865) Total Other Financing Sources (Uses) 2,250,225 684,385 725,296 3,714,205 NET CHANGE IN FUND BALANCES $ 3,090,549 2,144,514 $ (357,707) $ (5,055,589) $ Debt Service as a Percentage
of Noncapital Expenditures 1.57 % 8.31 % 1.64 % 3.99 %
NOTE
(1) The increased debt service percentage is due to the payoff of the loan on the Shores Property which came from the sale of the Balboa lot.
(2) The increase in expenditures is due to the payoff of the California Employees' Retirement System (CalPERS) Side Fund liability.
Fiscal Year
163 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS (CONTINUED)
LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
(121)
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023 $ 15,561,911 15,119,862 $ 13,865,011 $ 13,491,345 $ 17,366,143 $ 18,529,539 $ 1,424,462 1,560,470 1,175,755 1,430,060 1,692,744 1,972,169 1,144,117 940,761 1,247,627 636,338 910,521 2,355,821
1,969,158 1,760,952 2,102,617 2,563,903 2,492,438 2,239,149 740,862 716,505 797,887 1,049,002 1,066,270 1,594,094
519,309 496,853 387,953 229,973 (139,964) 559,904
25,730 161,500 32,680 214,996 83,719 106,516
902,630 190,250 1,028,748 978,681 491,857 399,252
22,288,179 20,947,153 20,638,278 20,594,298 23,963,728 27,756,444 7,459,736 5,921,425 7,511,186 6,250,367 6,310,134 7,677,405 6,823,281 6,405,468 7,309,028 7,124,556 7,206,806 7,684,300 753,994 613,939 860,139 764,118 904,826 1,120,549
916,556 834,530 945,702 773,085 1,016,920 1,052,138
7,643,140 12,347,347 4,953,541 585,334 1,830,395 2,819,510 478,878 481,658 499,788 482,853 602,207 639,014
657,891 672,959 634,778 490,611 555,927 535,325
- - - - - -
24,733,476 27,277,326 22,714,162 16,470,924 18,427,215 21,528,241 (2,445,297) (6,330,173) (2,075,884) 4,123,374 5,536,513 6,228,203 - - - - - -
1,587,535 11,413,179 - - - -
- - - - - -
3,452,909 6,491,721 3,390,584 2,127,964 3,505,148 4,292,440 (3,452,909) (6,491,721) (3,468,477) (2,109,788) (3,593,019) (4,518,286) 1,587,535 11,413,179 (77,893) 18,176 (87,871) (225,846) $ (857,762) 5,083,006 $ (2,153,777) $ 4,141,550 $ 5,448,642 $ 6,002,357 $
7.73 % 6.65 % 6.39 % 6.14 % 6.97 % 6.57 %
Fiscal Year
164 March 18, 2024 Item 10
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165 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
GOVERNMENTAL ACTIVITIES TAX REVENUES BY SOURCE
LAST TEN FISCAL YEARS
(123)
Transient Business
Fiscal Property Sales & Use District Occupancy Franchise License Year Taxes (1) Tax (2) Tax (3) Tax Tax Tax Total
2022-2023 $ 2,306,262 8,322,387 $ 3,327,469 $ 3,816,392 $ 442,408 $ 276,466 $ 18,491,384 $ 2021-2022 2,068,716 7,771,396 3,387,421 3,419,866 404,226 282,524 17,334,150 2020-2021 1,147,970 7,496,882 2,305,453 1,792,090 324,805 229,534 13,296,734 2019-2020 1,472,389 6,993,953 2,280,307 2,300,504 390,482 235,557 13,673,192 2018-2019 2,208,416 6,679,052 2,835,331 2,982,510 424,930 243,198 15,373,438 2017-2018 2,136,523 6,491,063 2,717,991 3,001,300 387,466 241,008 14,975,351 2016-2017 1,492,965 6,752,952 734,344 2,697,297 459,271 240,103 12,376,932 2015-2016 2,332,522 5,640,285 - 2,617,866 369,524 226,508 11,186,705 2014-2015 1,998,279 5,291,352 - 2,444,275 367,471 208,898 10,310,275 2013-2014 1,700,688 5,329,825 - 2,101,634 373,589 191,734 9,697,470 Change from
Base Year 2013 67.41 % 37.71 % 100.00 % 96.75 % 15.14 % 44.15 % 101.83 % Notes:
(1) Includes Property Tax In-lieu of Vehicle License Fee (VLF) as part of the State's VLF for Property Tax Swap Adjustment. (3) Measure Q for 1% District tax was passed in Fiscal year 2016-17. (2) Includes Property Tax In-Lieu of Sales Tax as part of the State's Sales and Use Tax Triple Flip Adjustment. The triple flip sales tax adjustment ended in Fiscal year 2015-16.
166 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION(1)
LAST TEN FISCAL YEARS
(124)
Parks
Fiscal General Public Public and Capital Debt
Year Government Safety Works Recreation Outlay Service (2) Total 2022-2023 7,677,405 $ 7,684,300 $ 1,120,549 $ 1,052,138 $ 2,819,510 $ 1,174,339 $ 21,528,241 $ 2021-2022 6,310,134 7,206,806 904,826 1,016,920 1,830,395 1,158,134 18,427,215 2020-2021 6,250,367 7,124,556 764,118 773,085 585,334 973,464 16,470,924 2019-2020 7,511,186 7,309,028 860,139 945,702 4,953,541 1,134,566 22,714,162 2018-2019 7,459,736 6,823,281 753,994 916,556 7,643,140 1,136,769 24,733,476 2017-2018 5,921,425 6,405,468 613,939 834,530 12,347,347 1,154,617 27,277,326 2016-2017 6,212,785 6,411,309 646,739 910,515 11,952,324 756,922 26,890,594 2015-2016 5,055,390 5,769,859 589,870 907,484 6,620,181 205,143 19,147,927 2014-2015 4,465,857 5,707,066 565,436 796,933 2,652,017 1,045,218 15,232,527 2013-2014 4,326,650 5,442,607 486,619 809,797 4,960,745 176,532 16,202,950 Notes:
(1) These amounts include all governmental fund types and exclude other financing sources (uses). (2) These amounts include lease and bond payments toward debt service. 167 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
ASSESSED VALUE OF PROPERTY BY USER CODE
LAST TEN FISCAL YEARS
(125)
Category 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 Residential $ 2,873,316,023 2,691,922,002 $ 3,084,334,222 $ 3,253,273,422 $ 3,433,325,030 $ Commercial 265,411,786 260,013,522 271,336,627 278,157,135 283,644,529 Industrial 3,014,195 2,970,364 3,048,474 3,199,522 2,569,569 Institutional 2,892,680 2,836,017 2,936,793 2,995,528 3,055,438 Recreational 11,214,206 9,689,662 11,767,616 13,338,452 13,817,906 Miscellaneous - - - - -
Total 2,967,431,567 $ 3,155,848,890 $ 3,373,423,732 $ 3,550,964,059 $ 3,736,412,472 $ Note:
(1) In 1978 the voters of the State of California passed Proposition 13 which limited taxes to a total maximum rate of one percent based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" limited to a maximum of two percent. With few exemptions, the property is reassessed as a result of new construction or at the time it is sold to a new owner. At that point, the property is reassessed based upon the added value of the construction or at the purchase price (market value) or economic value of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitation just mentioned. - The amounts represent total assessed value of real property, excluding personal property and fixtures, prior to exemptions.
Fiscal Year
168 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
ASSESSED VALUE OF PROPERTY BY USER CODE (CONTINUED)
LAST TEN FISCAL YEARS
(126)
2018-2019 2019-2020 2020-2021 2021-2022 2022-2023
$ 3,875,115,458 3,643,775,875 $ 4,024,078,136 $ 4,361,607,012 $ 4,630,568,441 $ 322,793,000 309,755,624 306,435,872 337,705,751 355,543,713 3,162,334 2,620,955 3,195,089 3,346,988 5,819,841
3,178,876 3,116,546 3,211,808 3,926,043 4,004,563
12,487,932 15,850,559 2,092,944 2,075,659 2,827,368
- - - 26,600 -
$ 4,216,737,600 3,975,119,559 $ 4,339,013,849 $ 4,708,688,053 $ 4,998,763,926 $ Fiscal Year
169 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
ESTIMATED VALUE OF TAXABLE PROPERTY(1)
LAST TEN FISCAL YEARS
(127)
Fiscal Assessed Number Assessed Number Assessed Number
Year Value of Parcels Value of Parcels Value of Parcels 2022-2023 4,630,568,441 $ 4,203 355,543,713 $ 97 5,819,841 $ 6 2021-2022 4,361,607,012 4,203 337,705,751 102 3,346,988 7 2020-2021 4,024,078,136 4,203 306,435,872 103 3,195,089 7 2019-2020 3,875,115,458 4,202 322,793,000 101 3,162,334 7 2018-2019 3,643,775,875 4,203 309,755,624 101 2,620,955 7 2017-2018 3,433,325,030 4,202 283,644,529 102 2,569,569 7 2016-2017 3,253,273,422 4,200 278,157,135 101 3,199,522 8 2015-2016 3,084,334,222 4,199 271,336,627 102 3,048,474 8 2014-2015 2,873,316,023 4,198 265,411,786 102 3,014,195 9 2013-2014 2,691,922,002 4,199 260,013,522 102 2,970,364 9 Notes:
(1) Report formatting changes have been made to comply with the GASB Number 44 standard reporting requirement. Public utility values are not included in this report. (2) The total direct tax rate is the weighted average of all individual direct rates applied by the government providing the statistical information.
Residential Commercial Industrial
170 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
ESTIMATED VALUE OF TAXABLE PROPERTY(1) (CONTINUED)
LAST TEN FISCAL YEARS
(128)
Total
Direct
Assessed Number Assessed Number Assessed Number Assessed Number Tax Value of Parcels Value of Parcels Value of Parcels Value of Parcels Rate (%) (2) $ 1 4,004,563 2,827,368 $ 312 - - 4,998,763,926 $ 4,619 0.14775 1 3,926,043 2,075,659 306 26,600 1 4,708,688,053 4,620 0.14775 1 3,211,808 2,092,944 337 - - 4,339,013,849 4,651 0.14775 1 3,178,876 12,487,932 340 - - 4,216,737,600 4,651 0.14775 1 3,116,546 15,850,559 342 - - 3,975,119,559 4,654 0.14775 1 3,055,438 13,817,906 342 - - 3,736,412,472 4,654 0.14775 1 2,995,528 13,338,452 346 - - 3,550,964,059 4,656 0.14775 1 2,936,793 11,767,616 350 - - 3,373,423,732 4,660 0.14775 1 2,892,680 11,214,206 337 - - 3,155,848,890 4,647 0.14775 1 2,836,017 9,689,662 234 - - 2,967,431,567 4,545 0.14775 Institutional Recreational Total Other
171 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
CONSTRUCTION PERMITS
LAST TEN FISCAL YEARS
(129)
Fiscal Number of Number of Number of Number of
Year Permits Valuation Permits Valuation Permits Valuation Permits Valuation 2022-2023 208 22,760,412 $ 13 8,913,250 $ - - $ 221 31,673,662 $ 2021-2022 177 21,181,429 19 912,000 - - 196 22,093,429
2020-2021 173 19,649,957 12 3,761,147 27 48,209 212 23,459,313 2019-2020 129 16,153,000 17 1,931,000 31 80,666 177 18,164,666 2018-2019 181 10,456,000 9 300,000 62 114,653 252 10,870,653 2017-2018 105 15,674,999 5 278,000 41 124,514 151 27,588,507 2016-2017 90 13,885,482 24 13,700,850 2 2,175 116 27,588,507 2015-2016 75 10,798,630 17 572,000 29 568,000 121 11,938,630 2014-2015 101 12,075,924 3 338,000 17 692,481 121 13,106,405 2013-2014 73 10,921,237 12 951,835 29 128,831 114 12,001,903 Construction (1)
Residential Commercial Total
172 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
PROPERTY TAX RATES(1) – ALL OVERLAPPING GOVERNMENTS
LAST TEN FISCAL YEARS
(RATE PER $100 OF TAXABLE VALUE)
(130)
San Diego
Total City of Total County Water Total
Fiscal Del Mar San Diego Del Mar County School Authority Special Year Debt Service County Direct Tax Base Districts (2) (SDCWA) Districts Total 2022-2023 - 0.85225 0.14775 1.00000 0.06162 0.00350 0.06512 1.06512 2021-2022 - 0.85225 0.14775 1.00000 0.04271 0.00350 0.04621 1.04621 2020-2021 - 0.85225 0.14775 1.00000 0.06302 0.00350 0.06652 1.06652 2019-2020 - 0.85225 0.14775 1.00000 0.06291 0.00350 0.06641 1.06641 2018-2019 - 0.85225 0.14775 1.00000 0.03592 0.00350 0.03942 1.03942 2017-2018 - 0.85225 0.14775 1.00000 0.03672 0.00350 0.04022 1.04022 2016-2017 - 0.85225 0.14775 1.00000 0.02275 0.00350 0.02625 1.02625 2015-2016 - 0.85225 0.14775 1.00000 0.02272 0.00350 0.02622 1.02622 2014-2015 - 0.85225 0.14775 1.00000 0.02147 0.00350 0.02497 1.02497 2013-2014 0.00635 0.85225 0.14775 1.00000 0.03781 0.00350 0.04131 1.04766 Note:
(1) Tax Rate Area: TRA 11-001
(2) FY 2019-2020 is the first year of collection for Del Mar Union School District Measure MM.
County Special Districts
173 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
TEN LARGEST PROPERTY TAXPAYERS
CURRENT FISCAL YEAR AND TEN YEARS AGO
(131)
Percent of Percent of
Total City Total City
Assessed Assessed Assessed Assessed
Owner/Taxpayer Primary Use Valuation Valuation Valuation Valuation Lhoberge LP Property management $ 1.73 % 115,750,111 82,066,036 $ 4.30 % 2808 of Trust Trust 0.94 - 44,314,389 -
Jacobs Family Trust Trust 0.88 31,975,258 41,630,899 1.19 Brixton Del Mar Plaza T I C LLC Property management 0.88 - 41,500,000 - Bucket + Space LLC Property management 0.75 - 35,281,261 - Allred Family Living Survivors Trust Trust 0.73 30,325,140 34,657,301 1.13 2075 Seaview LLC Property management 0.72 - 33,855,462 - Miyago Do LLC Trust 0.59 - 28,119,027 -
Moores Rebecca A Family Trust Trust 0.59 17,790,847 27,963,370 0.66 Del Mar Thoroughbred Club Horse racing club 0.56 22,864,178 26,531,654 0.85 GLL BVK Properties 2007 LP Property management - 43,764,642 - 1.63 Madeleine A Pickens Trust Trust - 23,460,000 - 0.87
Marsha J Naify Living Trust Trust - 19,975,642 - 0.74
2928 Camino del Mar LLC Property management - 19,282,713 - 0.72 Allred Family Living Survivors Trust Trust - 17,866,633 - 0.66 Top Ten Totals (Secured and Unsecured) 8.37 343,055,164 395,919,399 12.75 All Others (Secured) 91.63 2,346,702,158 4,336,335,065 87.25 Total Assessed Valuation $ 100.00 2,689,757,322 4,732,254,464 $ 100.00 Fiscal Year 2022-2023 Fiscal Year 2013-2014
174 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
TOP 25 SALES TAX PRODUCERS
CURRENT FISCAL YEAR AND TEN YEARS AGO
(132)
Taxpayers Business Type Taxpayers Business Type
1 Beeside Balcony Casual dining Americana Casual dining 2 Brigantine Fine Dining Banana Republic Retail clothing 3 Brogdon Concessions Quick-service restaurants Brigantine Casual dining 4 C&C Concessions Quick-service restaurants Bully's Del Mar Casual dining 5 Chicken Charlies Enterprises Quick-service restaurants Chicken Charlies Enterprises* Quick-service restaurants 6 Chins Szechwan Del Mar Fine dining Del Mar Blue Print Co Printing 7 Copper Kettle Quick-service restaurants Del Mar Rendezvous Casual dining 8 Del Mar Blue Print Co. Printing Del Mar Thoroughbred Club Horse racing club 9 Del Mar Pizza & Pasta Casual dining Design Line Interiors Furniture/Appliances 10 Design Line Interiors Home furnishings En Fuego Cantina & Grill Casual dining 11 Dexters Deli Specialty stores Il Fornaio Casual dining 12 En Fuego Cantina & Grill Casual dining Jakes Del Mar Fine dining 13 Il Fornaio Fine dining Jimmy Os Fine dining
14 Jakes Del Mar Fine dining Juicy's Food service
15 L'Auberge Del Mar Casual dining L'Auberge Del Mar Casual dining 16 La Mesa RV Center Recreation products Miwall Wholesale Ammo* Recreation products 17 Mattress Firm Home furnishings Pacifica Del Mar Casual dining 18 Monarch Casual dining Pinnacle Appliance Distributors Sporting Goods/Bike Stores 19 Pacifica Del Mar Restaurant Fine dining Poseidon Restaurant Home Furnishings 20 Poseidon on the Beach Fine dining Premier Food Services* Quick-service restaurants 21 Premier Food Services Quick-service restaurants Prep Kitchen Del Mar Fine dining 22 Sbicca Casual dining Sbicca An American Bistro Fine dining 23 Shimbashi Izakaya Casual dining Sippers & More Restaurant* Quick-Service Restaurants 24 Tamarindo Casual dining State of California Government 25 Viewpoint Brewing Co. Casual dining The Board & Brew Casual dining Percentage of Total Sales Tax Collected 67.47 % 67.70 % Note: The names are listed in alphabetical order and not by sales tax volume.
Sources: State Board of Equalization, California Department of Taxes and Fees Administration, State Controller's Office, The HdL Companies
* These sales tax producers are intermittently conducting business in the Del Mar Fairgrounds.
Fiscal Year 2022-2023 Fiscal Year 2013-2014
175 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
PROPERTY TAX LEVIES, TAX COLLECTIONS, AND DELINQUENCIES
LAST TEN FISCAL YEARS
(133)
Secured Percentage of Collections in
Fiscal Taxes Collections Collections Subsequent Total Percentage of Year Charge (1) at Year-End at Year-End Years Collections Levy 2022-2023 $ 6,660,529 6,747,350 $ 98.71 % 10,566 $ 6,671,095 $ 98.87 % 2021-2022 6,152,218 6,219,718 98.91 6,047 6,158,265 99.01 2020-2021 5,943,768 6,009,313 98.91 3,807 5,947,575 98.97 2019-2020 5,588,352 5,672,610 98.51 5,345 5,593,697 98.61 2018-2019 5,283,191 5,331,918 99.09 3,785 5,286,976 99.16 2017-2018 5,019,360 5,065,306 99.09 5,290 5,024,650 99.20 2016-2017 4,771,416 4,816,554 99.06 5,426 4,776,842 99.18 2015-2016 4,449,392 4,487,604 99.15 4,285 4,453,677 99.24 2014-2015 4,165,840 4,216,164 98.81 4,230 4,170,070 98.91 2013-2014 3,999,623 4,046,271 98.85 7,804 4,007,427 99.04 Note:
(1) Article XIII-A of the Constitution of the state of California adopted by the electorate in June 1978, precludes the City from a local property tax levy. All general-purpose property taxes are levied by the County and allocated to other governmental entities on a predetermined formula.
176 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
RATIO OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
(134)
Fiscal Certificates of Revenue Certificates of Capital
Year Participation Leases Loans Notes Total Bonds Participation Leases Notes Total 2022-2023 - $ 243,954 16,581,826 $ - $ 16,825,780 $ - $ - $ - $ 5,415,925 $ 5,415,925 $ 2021-2022 - 352,059 17,100,794 - 17,452,853 - - - 5,829,843 5,829,843 2020-2021 - 452,946 17,602,114 - 18,055,060 - - - 6,233,225 6,233,225 2019-2020 - - 18,084,967 - 18,084,967 - - - 6,626,345 6,626,345 2018-2019 - 28,734 18,556,021 - 18,584,755 - - - 7,009,468 7,009,468 2017-2018 - 56,704 17,419,394 - 17,476,098 - - - 6,037,965 6,037,965 2016-2017 - 99,707 6,444,870 - 6,544,577 - - - 4,667,547 4,667,547 2015-2016 - - 2,845,256 - 2,845,256 - - - 4,566,055 4,566,055 2014-2015 - - 2,273,106 - 2,273,106 - 440,000 - 4,771,694 5,211,694 2013-2014 170,000 - 704,000 - 874,000 - 855,000 - 4,971,536 5,826,536 Governmental Activities Business-Type Activities
Percent of
Total Taxable Taxable Debt Percent of
Fiscal Outstanding Assessed Assessed Per Personal Personal Year Population (1) Debt Value Value Capita Income Income 2022-2023 3,903 22,241,705 $ 4,732,254,464 $ 0.47 % 5,699 $ 501,255 $ 2.25 % 2021-2022 3,929 23,282,696 4,355,955,764 0.53 5,926 486,655 2.09 2020-2021 4,258 24,288,285 4,239,256,907 0.57 5,704 440,525 1.81 2019-2020 4,268 24,711,312 3,995,693,508 0.62 5,790 429,278 1.74 2018-2019 4,451 25,594,223 3,572,859,349 0.72 5,750 491,975 1.92 2017-2018 4,322 23,514,063 3,395,888,687 0.69 5,441 440,691 1.87 2016-2017 4,297 11,212,124 3,176,435,084 0.35 2,609 397,110 3.54 2015-2016 4,274 7,411,311 2,986,826,078 0.25 1,734 372,669 5.03 2014-2015 4,221 7,484,800 2,873,455,956 0.26 1,773 423,864 5.66 2013-2014 4,234 6,700,536 2,689,757,322 0.25 1,583 353,818 5.28 177 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
PLEDGED-REVENUE COVERAGE
LAST TEN FISCAL YEARS
(135)
Net Total
Fiscal Operating Available Debt Percent
Year Revenue (1) Expenses (1) Revenue Principal Interest Principal Interest Service Coverage 2022-2023 8,725,149 $ 7,863,221 $ 861,928 $ 251,195 $ 92,822 $ - $ - $ 344,017 $ 250.55 2021-2022 8,881,606 7,899,048 982,558 244,116 99,901 - - 344,017 285.61 2020-2021 8,541,377 7,807,031 734,346 237,236 106,781 - - 344,017 213.46 2019-2020 7,600,466 8,161,847 (561,381) 230,550 113,467 - - 344,017 (163.18) 2018-2019 7,158,048 7,113,464 44,584 224,052 119,965 - - 344,017 12.96 2017-2018 7,089,160 6,818,187 270,973 217,738 126,279 - - 344,017 78.77 2016-2017 6,850,876 6,349,180 501,696 211,601 132,416 - - 344,017 145.83 2015-2016 6,657,471 5,875,267 782,204 205,638 138,379 - - 344,017 227.37 2014-2015 6,910,807 6,406,810 503,997 199,848 144,169 415,000 32,375 791,392 63.68 2013-2014 6,310,318 5,943,962 366,356 197,136 146,881 395,000 191,109 930,126 39.39 Notes:
(1) Revenue and expenses exclude financing sources/(uses). (2) Details regarding the City's outstanding debt can be found in the Notes to the Basic Financial Statements.
Business-Type Activities
Debt Service (2)
Clean Water Certificates of
State Revolving Participation
178 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
RATIO OF GENERAL BONDED DEBT OUTSTANDING
LAST TEN FISCAL YEARS
(136)
Percent of
Taxable Taxable Debt Personal Percent of
Fiscal Certificates of Assessed Assessed Per Income (2) Personal Year Population (1) Participation Value Value Capita (in Thousands) Income 2022-2023 3,903 - $ 4,732,254,464 $ - % - $ 501,255 $ - % 2021-2022 3,929 - 4,355,955,764 - - 486,655 -
2020-2021 4,258 - 4,239,256,907 - - 440,525 -
2019-2020 4,451 - 3,759,707,107 - - 491,975 -
2018-2019 4,322 - 3,572,859,349 - - 440,691 -
2017-2018 4,297 - 3,395,888,687 - - 397,110 -
2016-2017 4,274 - 3,176,435,084 - - 372,669 -
2015-2016 4,221 - 2,986,826,078 - - 423,864 -
2014-2015 4,234 170,000 2,873,455,956 0.01 40 353,818 208.13 2013-2014 4,199 335,000 2,689,757,322 0.01 80 344,910 102.96 Outstanding General Bonded Debt
179 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
DIRECT AND OVERLAPPING BONDED DEBT
JUNE 30, 2023
(137)
Fiscal Year 2022-2023 Assessed Valuation $4,732,254,464 Fiscal Year 2022-2023 Population 3,903
Percent City's Share
Total Debt Applicable of Debt
June 30, 2023 to City(1) June 30, 2023
Overlapping Tax and Assessment Debt:
San Diego County General Obligations $ 229,680,000 0.720 1,653,696 $ San Diego County Pension Obligations 277,990,000 0.720 2,001,528 San Diego County Superintendent of Schools:
General Fund Obligations 6,935,000 0.720 49,932
San Dieguito Union High School District:
General Fund Obligations 12,730,000 5.825 741,523
Solana Beach School District
General Fund Obligations 89,095,000 0.497 24,557
Total Overlapping General Fund Debt 616,430,000 4,471,236 Direct Debt and Overlapping Tax and Assessment Debt:
Direct Debt:
City of Del Mar 100.000 16,581,826 16,581,826
Subtotal Direct Debt 16,581,826 16,581,826
Overlapping Tax and Assessment Debt:
Metropolitan Water District 19,215,000 0.013 24,980
Mira Costa Community College District 376,155,000 3.524 13,255,702 San Dieguito Union High School District 416,410,000 5.825 24,255,883 Del Mar Union School District 107,675,000 20.547 22,123,982 Solana Beach School District School
Facilities Improvements District 5,819,247 0.497 442,802 City of Del Mar 1915 Act Bonds 150,000 100.000 150,000
Subtotal Overlapping Tax and Assessment Debt 925,424,247 60,253,349 Total Direct and Overlapping Tax and Assessment Debt 942,006,073 76,835,175 Subtotal Overlapping Tax 1,541,854,247 64,724,585
Combined Total Debt 1,558,436,073 $ 81,306,411 $
(1) Percentage of overlapping agency's assessed valuation located within the boundaries of the City Ratios to Fiscal Year 2022-2023 Assessed Valuation: Per Capita City Direct Debt 0.00% 4,248 $
Total Overlapping Tax and Assessment Debt 1.27% 19,686
Combined Total Debt 1.37% 20,832
State School Building Aid Repayable as of June 30, 2023 - $ 180 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
SCHEDULE OF LEGAL DEBT MARGIN
LAST TEN FISCAL YEARS
(138)
2013-2014 2014-2015 2015-2016 2016-2017
Assessed Valuation $ 2,986,826,078 2,873,455,956 $ 3,176,435,084 $ 3,395,888,687 $ Conversion Percentage 25 % 25 % 25 % 25 %
Adjusted Assessed Valuation $ 746,706,520 718,363,989 $ 794,108,771 $ 848,972,172 $ Debt Limit Percentage 15 % 15 % 15 % 15 %
Debt Limit $ 112,005,978 107,754,598 $ 119,116,316 $ 127,345,826 $ Total Net Debt Applicable to Limit:
General Obligation Bonds - 170,000 - -
Legal Debt Margin 107,584,598 $ 112,005,978 $ 119,116,316 $ 127,345,826 $ Total Debt Applicable to the Limit
as a Percentage of Debt Limit 0.16 % - % - % - %
Note:
Fiscal Year
(1) Section 43605 of the Government Code of the State of California provides for a legal debt limit of 15% of gross assessed valuation.
However, this provision was enacted when assessed valuation was based upon 25% of market value. Effective with Fiscal Year 1981- 1982, each parcel is now assessed at 100% of market value as of the most recent change in ownership for that parcel. The computations shown above reflect a conversion of assessed valuation data for each fiscal year from current full valuation perspective to the 25% level that was in effect at the time the legal debt margin was enacted by the State of California for local governments located within the State. 181 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
SCHEDULE OF LEGAL DEBT MARGIN (CONTINUED)
LAST TEN FISCAL YEARS
(139)
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023 $ 3,759,707,107 3,572,849,349 $ 3,759,707,107 $ 4,239,256,907 $ 4,355,955,764 $ 4,732,254,464 $ 25 % 25 % 25 % 25 % 25 % 25 %
$ 939,926,777 893,212,337 $ 939,926,777 $ 1,059,814,227 $ 1,088,988,941 $ 1,183,063,616 $ 15 % 15 % 15 % 15 % 15 % 15 %
$ 140,989,017 133,981,851 $ 140,989,017 $ 158,972,134 $ 163,348,341 $ 177,459,542 $ - - - - - -
$ 140,989,017 133,981,851 $ 140,989,017 $ 158,972,134 $ 163,348,341 $ 177,459,542 $ -% -% -% -% -% -%
Fiscal Year
182 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN CALENDAR YEARS
(140)
City of Average Average
Del Mar Annual Annual Personal Personal
Housing City of Percent County of Percent Income Per Income Per Year Units (1) Del Mar Change San Diego Change (in Thousands) Capita (in Thousands) Capita 2023 2,543 (0.66)% 3,269,755 3,903 (0.53)% 501,255 $ 128,428 $ - $ - $ 2022 2,615 (7.73) 3,287,306 3,929 (1.32) 486,655 123,862 244,332,306 74,326 2021 2,615 (0.23) 3,331,279 4,258 (0.36) 440,525 103,458 244,349,315 73,350 2020 2,613 (4.11) 3,343,355 4,268 (0.25) 429,278 100,580 220,825,596 66,266 2019 2,615 2.98 3,351,786 4,451 0.42 491,975 110,531 202,642,332 60,845 2018 2,612 0.58 3,337,685 4,322 0.65 440,691 101,964 195,679,529 58,719 2017 2,611 0.54 3,316,192 4,297 0.84 397,110 92,415 193,296,405 58,289 2016 2,542 1.26 3,288,612 4,274 1.89 372,669 87,194 183,032,418 55,656 2015 2,605 (0.31) 3,227,496 4,221 1.04 423,864 100,418 170,114,527 52,708 2014 2,605 0.95 3,194,362 4,234 1.62 553,818 83,566 167,931,419 52,571 Note:
* This information is not available.
Source:
(1) SANDAG
(2) State of California, Finance Department
(3) United States Bureau of Economic Analysis; HDL, Coren & Cone Demographic and Economic Statistics Population (2) Personal Income(3)
City of Del Mar County of San Diego
183 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
DEMOGRAPHIC AND ECONOMIC STATISTICS (CONTINUED)
LAST TEN CALENDAR YEARS
(141)
Enrollment
Del Mar
Labor Unemployment Labor Unemployment Union
Force Employed Rate Force Employed Rate Elementary (5)
2,100 2,100 1.60 % 1,602,600 1,535,800 4.20 % 3,748
2,200 2,200 1.00 % 1,587,400 1,534,200 3.40 % 3,895
1,900 2,000 3.60 % 1,517,500 1,415,400 6.70 % 3,853
2,200 2,300 5.60 1,610,900 1,486,400 7.70 4,132
2,500 2,500 1.50 1,609,400 1,563,600 2.80 4,263
2,500 2,500 2.20 1,620,100 1,568,300 3.20 4,453
2,700 2,700 0.03 1,584,700 1,533,200 3.30 4,413
2,700 2,700 0.04 1,597,600 1,528,200 4.30 4,334
2,600 2,600 0.50 1,572,600 1,496,700 4.80 4,399
3,000 3,100 3.10 1,588,500 1,491,600 6.10 4,376
Source:
(4) State of California, Employment Development Department (EDD) (5) State of California, Department of Education, Educational Demographics Unit City of Del Mar County of San Diego
Employment (4)
184 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
TOP TEN PRINCIPAL EMPLOYERS
CURRENT YEAR AND PRIOR YEAR
(142)
Number Percent of Number Percent of
Business of Total of Total
Employer (1) Type Employees Employment Employees Employment Del Mar Thoroughbred Club (3) Horse Racing Club (3)90-750 35.71% (3)98-729 18.60 % L'Auberge Del Mar Resort Spa Resorts 144 6.86 179 8.80
Monarch Ocean Pub Restaurant 115 5.48 96 4.40
Brigantine Seafood Restaurant Restaurant 100 4.43 95 4.65 Jake's Del Mar Restaurant 97 4.62 205 5.63
Poseidon Restaurant Restaurant 84 4.00 65 3.25
Pacifica Del Mar Restaurant 70 3.33 65 3.25
Il Fornaio Restaurant 70 3.33 63 3.00
Sbicca An American Bistro Restaurant 55 2.62 48 2.40
Tamarindo Restaurant 27 1.29 44 2.75
Total Top Ten Employers 1,491 1,411
Total City Employment (2) 2,000 2,100
Notes:
(1) Represents non-governmental employers.
2023 2022
(2) Total City employment provided by the State Employment Development Department (EDD) - Labor Market Information Division.
(3) Total number of employees fluctuates due to seasonal employees hired during the Horse Racing season. Calculation was based on the highest number from the range.
185 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
FULL-TIME EMPLOYEES BY FUNCTION
LAST TEN FISCAL YEARS
(143)
Function 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023 General Government 19 20 21 22 24 25 26 25 25 25
Public Safety (1) 16 16 16 16 15 15 15 14 9 9
Public Works 13 13 13 13 14 14 15 14 15 16
Parks and Recreation 5 5 5 5 5 5 5 4 11 12
Total 53 54 55 56 58 59 61 57 60 62
Note:
(1) Police services are provided by the County of San Diego, Sheriff's Department. 186 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
OPERATING INDICATORS BY FUNCTION
LAST TEN FISCAL YEARS
(144)
Function 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 Police:
Arrests (1) N/A N/A N/A N/A N/A N/A N/A N/A N/A
Parking Citations Issued 18,000 15,694 11,818 13,074 19,672 18,777 18,097 28,480 26,517 Fire:
Emergency Calls 1,130 1,468 1,309 806 881 849 1,033 861 1,622 Inspections 598 459 394 93 62 285 394 443 435
Public Works:
Street Resurfacing (Miles) 1.00 1.00 1.00 1.50 2.00 2.00 2.00 0.50 Street Slurry (Miles) - - - - - - - - -
Parks and Recreation:
Number of Recreational Classes 468 347 485 222 287 281 192 - 36 Number of Facility Rentals 185 175 143 93 186 216 139 26 211 Water:
New Construction - - - - - - - - -
Average Daily Consumption 969 858 803 838 962 859 852 934 900 (in Thousands of Gallons)
Sewer:
New Construction - - - - - - - - -
Average Daily Sewage Treatment 520 534 499 523 448 421 444 369 367 (in Thousands of Gallons)
Notes:
(1) Police services are provided by the County of San Diego, Sheriff's Department. 187 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
CAPITAL ASSET STATISTICS BY FUNCTION
LAST TEN FISCAL YEARS
(145)
Function 2013-2014 2014-2015 2015-2016 2016-2017 2017-18 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023 Fire:
Stations 1 1 1 1 1 1 1 1 1 1
Public Works:
Streets (Miles) 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 25.0 Street Lights 74 74 74 74 81 81 81 81 81 81
Traffic Signals 7 7 7 7 7 7 7 7 7 7
Parks and Recreation:
Parks 5 5 5 5 5 5 5 5 5 5
Community Centers 1 1 1 1 1 1 1 1 1 1
Water:
Water Mains (Miles)(1) 29.87 29.87 29.87 29.87 29.87 29.87 29.87 29.87 29.87 29.87 Maximum Daily Capacity 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 (Thousands of Gallons)
Sewer/Storm Drains:
Sanitary Sewers (Miles)(1) 24.98 24.98 24.98 24.98 24.98 24.98 24.98 24.98 24.98 24.98 Storm Drainage (Miles) 13.59 13.70 13.70 13.70 13.70 13.70 13.70 13.70 13.70 13.70 Maximum Daily Treatment
Capacity (Thousands
of Gallons) 877 877 877 877 877 877 877 877 1,476 1,476 Note:
(1) The unit of measure has been updated using the GIS system which provides a more accurate calculation.
Fiscal Year
188 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
MISCELLANEOUS STATISTICS
JUNE 30, 2023
(146)
Date of Incorporation July 15, 1959
Form of Government Council/Manager
Area 2 square miles
Climate:
Average Annual High Temperature 70.42o F
Average Annual Low Temperature 57.33o F
Annual Precipitation 11.5 inches
Fire Protection:
Station 1
Firefighters and Officers 9
Fire Incident Responses 377
Emergency Medical Incident Responses 1275
Public Service Calls 182
Fire Inspections 325
Culture and Leisure:
Parks 5
Park Areas 9.69 acres
Passive/Active Recreation Areas 300.38 acres
Including Fairground/Racetrack 200 acres
Miles of Beaches 2.2 miles
Number of Beach Attendances 2,905,796
Baseball Field 1
Tennis Courts 2
Library 1
Library Inventory 14,779
Hotels:
Major Hotel Rooms 355
Average Percent Occupancy 65%
Average Room Rate $366
Average Group Size Per Stay 2.5 persons*
Average Length of Stay 3.5 days*
* Information from San Diego County Profile
Education:
Private School 1
School District 1
Street Miles 22.5 miles
Street Lights 81
Water System:
Service Connection 1,889 meters
Fire Hydrants 350
Sanitary Sewer Lines 24.98 miles
189 March 18, 2024 Item 10
190 March 18, 2024 Item 10
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INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable Mayor and Members of the City Council
City of Del Mar
Del Mar, California
We have audited, in accordance with the 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, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Del Mar (the City), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the Citys basic financial statements, and have issued our report thereon dated January 26, 2024.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered Citys internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Citys internal control. Accordingly, we do not express an opinion on the effectiveness of Citys internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entitys financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified. 191 March 18, 2024 Item 10
Honorable Mayor and Members of the City Council
City of Del Mar
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether Citys financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entitys internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entitys internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
CliftonLarsonAllen LLP
Irvine, California
January 26, 2024
192 March 18, 2024 Item 10
CITY OF DEL MAR, CALIFORNIA
AGREED-UPON PROCEDURES
APPROPRIATIONS LIMIT WORKSHEET NO. 6
YEAR ENDED JUNE 30, 2023
193 March 18, 2024 Item 10
(1)
INDEPENDENT ACCOUNTANTS’ REPORT
ON AGREED-UPON PROCEDURES
APPLIED TO APPROPRIATIONS LIMIT WORKSHEET NO. 6
Honorable City Council
of the City of Del Mar
Del Mar, California
We have performed the procedures enumerated below on the accompanying Appropriations Limit Worksheet No. 6 of the City of Del Mar, California, (the “City”) for the year ended June 30, 2023. The City’s management is responsible for the Appropriations Limit Worksheet No. 6.
The City and the League of California Cities (as presented in the League publication entitled "Article XIII-B Appropriations Limit Uniform Guidelines") have agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of meeting the requirements of Section 1.5 of Article XIII-B of the California Constitution. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.
The procedures and the associated findings are as follows:
a. We obtained the completed Appropriations Limit Worksheet No. 6 for the year ended June 30, 2023, and compared the limit and annual adjustment factors included in that worksheet to the limit and annual adjustment factors that were adopted by resolution of the City Council. We also compared the population and inflation options included in the aforementioned worksheet to those that were selected by a recorded vote of the City Council.
No exceptions were noted as a result of our performing this procedure. b. For the Appropriations Limit Worksheet No. 6, we added last year’s limit to the total adjustments, and compared the resulting amount to this year’s limit. We also recalculated the adjustment factor and the adjustment for inflation and population, and compared the results to the amounts on Worksheet No. 6.
No exceptions were noted as a result of our performing this procedure. c. We compared the prior year appropriations limit presented in the accompanying Appropriations Limit Worksheet No. 6 to the prior year appropriations limit adopted by the City Council for the prior year.
No exceptions were noted as a result of our performing this procedure.
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194 March 18, 2024 Item 10
City Council
City of Del Mar
Del Mar, California
(2)
We were engaged by the City to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the accompanying Appropriations Limit Worksheet No. 6. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.
This report is intended solely for the information and use of the City Council and management of the City of Del Mar, California and is not intended to be, and should not be, used by anyone other than these specified parties.
CliftonLarsonAllen LLP
Irvine, California
August 23, 2023
195 March 18, 2024 Item 10
CITY OF DEL MAR
APPROPRIATIONS LIMIT WORKSHEET NO. 6
YEAR ENDED JUNE 30, 2023
See accompanying Notes to Appropriations Limit Worksheet No. 6. (3)
Appropriations Limit for Fiscal Year Ended June 30, 2022 (see Note 2) $ 31,269,572 Adjustments Factors for the Fiscal Year Ended June 30, 2023 (see Note 2):
Inflation Population
Factor Factor Combined
(Note 3) (Note 4) Factor
1.0755000 0.9992000 1.0746396 x 0.07463960
Adjustment for Inflation and Population 2,333,949
Other Adjustments (Note 5) -
Total Adjustments 2,333,949
Appropriations Limit for Fiscal Year Ended June 30, 2023 $ 33,603,521 196 March 18, 2024 Item 10
CITY OF DEL MAR
NOTES TO APPROPRIATIONS LIMIT WORKSHEET NO. 6
JUNE 30, 2023
(4)
NOTE 1 PURPOSE OF AGREED UPON PROCEDURES
Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative), California governmental agencies are restricted as to the amount of annual appropriations from proceeds of taxes. Effective for years beginning on or after July 1, 1990, under Section
1.5 of Article XIIIB, the annual calculation of the appropriations limit is subject to agreedupon procedures in connection with the annual audit.
NOTE 2 METHOD OF CALCULATION
Under Section 10.5 of Article XIIIB, for fiscal years beginning on or after July 1, 1990, the appropriations limit is required to be calculated based on the limit for the fiscal year 1986-87, adjusted for the inflation and population factors discussed at Notes 3 and 4 below.
NOTE 3 INFLATION FACTORS
A California governmental agency may adjust its appropriations limit by either the percentage change in California per capita personal income from the preceding year (which is supplied by the State Department of Finance), or the percentage change in the local assessment roll from the preceding year due to the change of local nonresidential construction. The factor adopted by the City of Del Mar (the “City”) for fiscal year 2022-2023 represents the percentage change in California per capita personal income from the preceding year.
NOTE 4 POPULATION FACTORS
A California governmental agency may adjust its appropriations limit by either the annual percentage change of the jurisdiction’s own population, or the annual percentage change in population in the County where the jurisdiction is located. The factor adopted by the City for fiscal year 2022-2023 represents the annual percentage change in the population for the County.
NOTE 5 OTHER ADJUSTMENTS
A California governmental agency may be required to adjust its appropriations limit when certain events occur, such as the transfer of responsibility for municipal services to, or from, another governmental agency or private entity. The City had no such adjustments for the year ended June 30, 2023.
197 March 18, 2024 Item 10
198 March 18, 2024 Item 10
BEGINNING ENDING
BALANCE O & M CIP BALANCE
JUL 1, 2022 REVENUES EXPENDITURES EXPENDITURES IN (OUT) JUN 30, 2023 ACTUAL FY 2023 FY 2023 FY 2023 FY 2023 FY 2023 PRELIMINARY CONTINGENCY 39.68% 5,509,075 21,037,884 (13,995,639) - 191,847 $ (6,329,834) 6,413,333 RESTRICTED:
SELF-INSURANCE 450,000 3,807 (16,175) - - - 437,632
DESIGNATED:
ENCUMBRANCES 104,095 - (104,095) - - - -
COASTAL PARKING REVENUE - 81,900 (81,900) - - - -
SIDEWALK CAFÉ - 5,300 (5,300) - - - -
PENSION RESERVE 2,292,700 - - - 1,107,300 - 3,400,000
LEAVE LIABILITY 100,000 - - - - - 100,000
EQUIPMENT REPLACEMENT 900,000 870,883 (987,427) - 201,944 - 985,400 TOTAL GENERAL FUND 9,355,870 21,999,774 (15,190,536) - 1,501,091 (6,329,834) 11,336,365 3,401,946 4,167,133 - (196,455) - - 7,372,624
ENCUMBRANCES 1,526,375 - - (1,129,100) - - 397,275
TOTAL MEASURE Q FUND 5,693,508 3,401,946 - (1,325,555) - - 7,769,899 90,384 - - - - - 90,384
105,890 - (709,434) - 613,379 - 9,835
435,309 - (1,052,109) - 616,800 - -
DESIGNATED
ENCUMBRANCES - - - - 154,618 - 154,618
CAPITAL IMPROVEMENT PROJECTS 102,856 236,320 - (584,768) 245,592 - - OPEN SPACE ACQUISITION 86,388 - - - - - 86,388
TREE RESERVE 35,767 1,500 - - - - 37,267
TOTAL OPEN SPACE FUND 358,475 539,665 (1,052,109) (584,768) 1,017,011 - 278,273 166,847 - - - - (166,847) -
43,990 10,864 (40,960) - - - 13,894
71,515 134,669 (69,752) - - - 136,432
GENERAL FUND
MEASURE Q
ROAD MAINTENANCE REHABILITATION ACCT
GAS TAX FUND
OPEN SPACE FUND
SUPPLEMENTAL LAW ENFORCEMENT FUND
REGIONAL COMMUNICATIONS FUND
GRANTS FUND
CITY OF DEL MAR
RESERVE SUMMARY
FISCAL YEAR 2022-2023
TRANSFERS
FINAL FINANCIAL REPORT
199 March 18, 2024 Item 10
BEGINNING ENDING
BALANCE O & M CIP BALANCE
JUL 1, 2022 REVENUES EXPENDITURES EXPENDITURES IN (OUT) JUN 30, 2023 ACTUAL FY 2023 FY 2023 FY 2023 FY 2023 FY 2023 PRELIMINARY
CITY OF DEL MAR
RESERVE SUMMARY
FISCAL YEAR 2022-2023
TRANSFERS
FINAL FINANCIAL REPORT
2,546 150,662 (101,143) - - - 52,065
HOUSING RESERVE 300,000 - - - 800,000 1,100,000
2,546 450,662 (101,143) - 800,000 - 1,152,065
159,145 262,410 (35,989) - - - 385,566
43,647 3,435 (18,510) - - (25,000) 3,572
453,348 - - (453,348) 200,000 - 200,000
ENCUMBRANCES 360,815 295,165 - (455,843) 390,878 591,015 RESERVE FOR CAPITAL - - - - 200,000 200,000
DEBT SERVICE - - (904,283) - 904,283 - -
TOTAL CAPITAL IMPROVEMENT FUND 360,815 748,513 (904,283) (909,191) 1,695,161 - 991,015 225,000 - - (225,000) - - -
ENCUMBRANCES 432,630 - - (227,662) 669,212 - 874,180
TOTAL SPECIAL PROJECT FUND 432,630 225,000 - (452,662) 669,212 - 874,180 133,698 2,756 (133,264) - - - 3,190
23,784 7,844 - - - - 31,628
290,088 399,360 (380,724) - - - 308,724
NET POSITION 332,269 4,270,764 (3,651,869) - 1,171,037 (662,362) 1,459,839 RESTRICTED:
CONTRIBUTED CAPITAL 4,028,272 - - - - - 4,028,272
DESIGNATED
ENCUMBRANCES - - - - 484,983 - 484,983
SELF-INSURANCE 50,000 - - - - - 50,000
RATE STABILIZATION 200,000 - - - - - 200,000
CAPTIAL REPLACEMENT 197,621 - - - 152,379 - 350,000
NET PENSION LIABILITY (861,169) - - - - (971,037) (1,832,206) PENSION RESERVE 780,500 - - - - - 780,500
OPERATING RESERVE 475,000 - - - 25,000 - 500,000
EQUIPMENT REPLACEMENT 400,000 - - - - (200,000) 200,000 UTILITY PLANT IN SERVICE 7,529,111 - (254,984) - - - 7,274,127 TOTAL WATER FUND 13,131,604 4,270,764 (3,906,853) - 1,833,399 (1,833,399) 13,495,515
CAPITAL IMPROVEMENT FUND
SPECIAL PROJECT FUND
TRANSNET FUND
RTCIP
WORKERS' COMPENSATION FUND
WATER FUND
PEG FEE FUND
HOUSING FUND
AB 939 FUND
200 March 18, 2024 Item 10
BEGINNING ENDING
BALANCE O & M CIP BALANCE
JUL 1, 2022 REVENUES EXPENDITURES EXPENDITURES IN (OUT) JUN 30, 2023 ACTUAL FY 2023 FY 2023 FY 2023 FY 2023 FY 2023 PRELIMINARY
CITY OF DEL MAR
RESERVE SUMMARY
FISCAL YEAR 2022-2023
TRANSFERS
FINAL FINANCIAL REPORT
NET POSITION - 628,962 (660,080) - 31,117 - -
DESIGNATED
UTILITY PLANT IN SERVICE 56,010 - - 85,338 141,348
ENCUMBRANCES 235,575 - (3,462) 109,373 341,486
CAPITAL REPLACEMENT RESERVE - - - -
TOTAL CLEAN WATER FUND 291,585 628,962 (660,080) (3,462) 225,828 - 482,834 NET POSITION 10,700 3,908,374 (3,226,220) - 976,174 (1,216,703) 452,325 -
RESTRICTED
IBANK RESERVE 228,828 - - - - - 228,828
CONTRIBUTED CAPITAL 650,814 - - - - - 650,814
LOAN RESERVE-STATE REVOLVING - 332,979 - - - - 332,979
DESIGNATED
ENCUMBRANCES - - - - 358,703 - 358,703
SELF-INSURANCE 50,000 - - - - - 50,000
CAPITAL REPLACEMENT - - - - 350,000 - 350,000
NET PENSION LIABILITY (865,726) - - - - (976,174) (1,841,900) PENSION RESERVE 817,000 - - - - 817,000
OPERATING RESERVE 200,000 - - - 208,000 - 408,000
EQUIPMENT REPLACEMENT - - - - 300,000 - 300,000
UTILITY PLANT IN SERVICE 8,674,169 - (176,871) - - 8,497,298 RATE STABILIZATION 200,000 - - - - - 200,000
TOTAL WASTEWATER FUND 10,298,764 3,908,374 (3,403,091) - 2,192,877 (2,192,877) 10,804,048 TOTAL ENTERPRISE FUNDS 23,721,953 8,808,100 (7,970,023) (3,462) 4,252,104 (4,026,276) 24,782,397 TOTAL - ALL FUNDS 41,195,251 36,854,533 (26,606,727) (3,275,638) 10,547,957 (10,547,957) 48,167,418
CLEANWATER FUND
WASTEWATER FUND
201 March 18, 2024 Item 10
ACTUAL ACTUAL ADOPTED FINAL ACTUAL %
REVENUE REVENUE BUDGET AMENDED REVENUE RECV'D PROJECTED FINAL FINAL (6/20/22) BUDGET FINAL FY REVENUE
SOURCE OF FUNDS FY 2020-21 FY 2021-22 FY 2022-23 FY 2022-23 FY 2022-23 2022-23 FY 2022-23
GENERAL FUND
TAXES
PROPERTY TAX 6,384,954 6,615,450 6,900,000 6,900,000 7,241,627 105.0% 6,900,000 VLF IN LIEU OF PROPERTY TAX 680,800 699,411 736,110 736,110 759,841 103.2% 759,800 SALES AND USE TAX 1,147,970 2,068,716 1,950,000 2,270,000 2,306,262 101.6% 2,270,000 TRANSIENT OCCUPANCY TAX 1,792,090 3,419,866 3,300,000 3,700,000 3,816,392 103.1% 3,700,000 BUSINESS LICENSE TAX 229,534 282,187 260,000 260,000 276,466 106.3% 250,000 FRANCHISE TAX 324,804 404,226 370,000 370,000 442,409 119.6% 370,000 REAL PROPERTY TRANSFER TAX 220,962 274,365 170,000 170,000 134,893 79.3% 170,000 TOTAL 10,781,114 13,764,222 13,686,110 14,406,110 14,977,890 104.0% 14,419,800
LICENSES & PERMITS
LICENSES & PERMITS 352 10,096 5,000 5,000 2,335 46.7% 500 JUNIOR LIFEGUARD 88,689 - 97,800 97,800 96,990 99.2% 97,800 PARKING PERMITS 31,333 21,315 25,000 25,000 30,060 120.2% 30,000 TOTAL 120,374 31,411 127,800 127,800 129,385 101.2% 128,300
FINES & FORFEITURES
MOVING VIOLATIONS/VEHICLE CODE FINES 47,019 42,640 50,000 50,000 58,170 116.3% 60,000 PARKING VIOLATIONS 896,374 903,237 700,000 900,000 1,368,108 152.0% 900,000 PENALTIES 12,106 23,939 12,000 12,000 5,712 47.6% 7,000 ADMINISTRATIVE CITATIONS 27,600 43,595 42,000 42,000 88,167 209.9% 73,000 RED LIGHT ENFORCEMENT 65,903 52,859 55,000 55,000 73,937 134.4% 68,000 TOTAL 1,049,003 1,066,270 859,000 1,059,000 1,594,094 150.5% 1,108,000
REVENUE FROM USE OF ASSETS
INTEREST EARNINGS 42,271 48,673 60,000 60,000 199,381 332.3% 180,000 RENTAL INCOME 199,944 133,190 190,000 190,000 230,372 121.2% 220,000 PARKING METER INCOME 1,600,304 1,513,143 1,350,000 1,350,000 1,268,930 94.0% 1,400,000 SIDEWALK CAFÉ USER FEE 6,339 2,940 3,000 3,000 1,469 49.0% 3,000 TOTAL 1,785,107 1,512,898 1,603,000 1,603,000 1,700,152 106.1% 1,803,000
REVENUE FROM OTHER AGENCIES
MOTOR VEHICLE LICENSE FEE 4,919 3,130 4,000 4,000 4,040 101.0% 4,900 PUBLIC SAFETY AUGMENTATION FUND 102,840 85,433 90,000 90,000 107,147 119.1% 100,000 HOMEOWNER EXEMPT 35,718 36,737 38,740 38,740 35,835 92.5% 35,000 STATE MANDATED COST REIMB - - 3,000 3,000 - 0.0% 3,000
FEDERAL/STATE/LOCAL GRANTS - 21,325 - 7,535 5,000 66.4% 878,535 CORONAVIRUS RELIEF FUNDS - - - 871,000 870,883 100.0% - OFF-TRACK PARIMUTUEL 7,380 2,417 5,000 5,000 9,009 100.0% 7,000 SOLID WASTE 27,761 23,853 28,000 28,000 10,996 39.3% 25,000 TOTAL 178,619 172,895 168,740 1,047,275 1,042,910 99.6% 1,053,435
CHARGES - PLANNING SERVICES
PLANNING SERVICES 541,624 505,823 520,000 520,000 625,509 120.3% 550,000 ENGINEERING SERVICES 151,057 170,688 155,000 155,000 181,888 117.3% 160,000 BUILDING SERVICES 435,382 504,913 420,000 520,000 606,602 116.7% 550,000 TOTAL 1,128,062 1,181,424 1,095,000 1,195,000 1,413,999 118.3% 1,260,000
OTHER REVENUE SOURCES
PARKING IN-LIEU FEE 8,510 1,554 1,550 1,550 - 0.0% 2,800 SALE OF PROPERTY 28,600 - - - - 0.0% -
ADMINISTRATIVE CHARGE 910,344 910,340 965,780 965,780 910,344 94.3% 965,780 CONTRIBUTIONS 43,719 214,996 - 3,652 3,660 0.0% -
ADMINISTRATIVE CHARGE-MEASURE Q 68,951 53,259 135,000 135,000 59,875 44.4% 135,000 WC/STD REIMBURSEMENTS 35,709 39,320 - - 22,665 100.0% - INSURANCE CLAIM REIMBURSEMENT 130,493 682,619 - - 3,807 100.0% - EXPENDITURE REIMBURSEMENT 25,305 55,042 5,170 5,170 3,811 73.7% 10,000 MISCELLANEOUS 55,548 166,013 50,000 50,000 137,182 274.4% 40,000 TOTAL 1,307,179 2,123,143 1,157,500 1,161,152 1,141,344 98.3% 1,153,580 TOTAL GENERAL FUND 19,077,624 17,124,097 18,697,150 20,599,337 21,999,774 106.8% 20,926,115
CITY OF DEL MAR
FISCAL YEAR 2022-2023
FINAL FINANCIAL REPORT
REVENUE SUMMARIES
202 March 18, 2024 Item 10
ACTUAL ACTUAL ADOPTED FINAL ACTUAL %
REVENUE REVENUE BUDGET AMENDED REVENUE RECV'D PROJECTED FINAL FINAL (6/20/22) BUDGET FINAL FY REVENUE
SOURCE OF FUNDS FY 2020-21 FY 2021-22 FY 2022-23 FY 2022-23 FY 2022-23 2022-23 FY 2022-23
CITY OF DEL MAR
FISCAL YEAR 2022-2023
FINAL FINANCIAL REPORT
REVENUE SUMMARIES
MEASURE Q FUND 3,297,998 2,339,901 3,000,000 3,300,000 3,401,946 103.1% 3,300,000 EMERGENCY EXPENDITURE FUND - 53,167 - - - -
ROAD MAINTENANCE REHAB ACCOUNT 81,628 79,664 97,000 85,400 90,384 105.8% 85,400 GAS TAX FUND 104,286 101,400 129,000 107,000 105,890 99.0% 107,000
OPEN SPACE FUND
TAXES 27,412 10,958 12,000 12,000 34,115 284.3% 40,000
LICENSE & PERMITS 358,560 109,794 360,000 360,000 390,339 108.4% 360,000 FEDERAL/STATE GRANTS 35,000 - - 180,000 - 0.0% 180,000
OFF-TRACK PARIMUTUEL 4,227 1,612 5,000 5,000 4,334 86.7% 4,000 CONTRIBUTIONS 40,000 - 100,000 137,000 102,856 0.0% 137,000 MISCELLANEOUS 51,268 39,667 42,860 42,860 8,021 18.7% 15,000 TOTAL OPEN SPACE FUND 516,468 162,031 519,860 736,860 539,665 73.2% 736,000 SUPPLEMENTAL LAW FUND 157,926 101,850 100,000 165,270 166,847 101.0% 165,270 REGIONAL COMMUNICATION 57,034 44,186 48,000 48,000 43,990 91.6% 48,000 GRANTS FUND 51,930 69,787 51,470 65,613 71,515 109.0% 58,700 HOUSING FUND (3,489) 51,620 3,000 3,000 2,546 84.9% 4,000 AB 939 193,546 51,475 68,000 150,000 159,145 106.1% 150,000 PEG FEE FUND 42,868 44,183 46,000 46,000 43,647 94.9% 50,000
CAPITAL IMPROVEMENT FUND
FEDERAL/STATE/LOCAL GRANTS 211,768 144,140 1,567,300 1,987,335 684,949 34.5% 1,987,335 MISCELLANEOUS (32,712) - - - 63,564 0.0% 45,000
TOTAL CAPITAL IMPROVEMENT FUND 179,056 144,140 1,567,300 1,987,335 748,513 37.7% 2,032,335 TRANSNET FUND 152,346 75,050 417,700 341,000 133,698 39.2% 417,700 RTCIP FUND 2,479 2,715 - 23,720 23,784 100.3% 23,720
SPECIAL PROJECTS FUND 65,000 147,170 225,000 225,000 225,000 100.0% 225,000 TOTAL GENERAL GOVERNMENTAL FUNDS 23,976,701 20,592,435 24,969,480 27,883,535 27,756,344 99.5% 28,329,240 WORKERS' COMPENSATION FUND 235,541 240,157 271,500 271,500 290,088 106.8% 255,000
WATER UTILITY FUND
WATER SALES 2,393,663 2,394,497 2,250,000 2,375,000 2,250,941 94.8% 2,375,000 READY TO SERVE CHARGE 1,747,817 1,644,154 1,500,000 1,750,000 1,860,332 106.3% 1,750,000 OTHER CONNECTION FEES 62,444 64,876 51,400 51,400 57,667 112.2% 54,000 MISCELLANEOUS 107,673 192,421 69,060 94,060 101,824 108.3% 105,000 TOTAL OPERATING REVENUE 4,311,597 4,295,948 3,870,460 4,270,460 4,270,764 100.0% 4,284,000 203 March 18, 2024 Item 10
ACTUAL ACTUAL ADOPTED FINAL ACTUAL %
REVENUE REVENUE BUDGET AMENDED REVENUE RECV'D PROJECTED FINAL FINAL (6/20/22) BUDGET FINAL FY REVENUE
SOURCE OF FUNDS FY 2020-21 FY 2021-22 FY 2022-23 FY 2022-23 FY 2022-23 2022-23 FY 2022-23
CITY OF DEL MAR
FISCAL YEAR 2022-2023
FINAL FINANCIAL REPORT
REVENUE SUMMARIES
CLEAN WATER PROGRAM
SERVICE CHARGE 632,149 589,891 560,000 640,000 623,696 97.5% 640,000 MISCELLANEOUS 226 32,396 2,000 52,000 5,266 10.1% 55,400 TOTAL CLEAN WATER PROGRAM 632,375 622,287 562,000 692,000 628,962 90.9% 695,400
WASTEWATER FUND
SERVICE CHARGES 1,767,441 1,677,265 1,750,000 1,750,000 1,860,666 106.3% 1,800,000 USAGE CHARGES 2,008,043 1,672,477 1,850,000 1,850,000 1,923,924 104.0% 1,850,000 OTHER SEWER FEES 90,210 74,101 80,000 95,000 67,657 71.2% 95,000 MISCELLANEOUS 18,490 258,327 65,000 115,000 56,127 48.8% 60,000 TOTAL WASTEWATER FUND 3,884,184 3,682,170 3,745,000 3,810,000 3,908,374 102.6% 3,805,000 TOTAL ENTERPRISE FUNDS 8,600,405 8,828,156 8,177,460 8,772,460 8,808,100 100.4% 8,784,400 TOTAL ALL FUNDS 29,432,997 33,040,398 33,418,440 36,927,495 36,854,533 99.8% 37,368,640 204 March 18, 2024 Item 10
ACTUAL ACTUAL ADOPTED FINAL ACTUAL %
EXP EXP BUDGET AMENDED EXP EXPENSED PROJECTED
FINAL FINAL (6/20/22) BUDGET FINAL EXP
DEPARTMENT FY 2020-21 FY 2021-22 FY 2022-23 FY 2022-23 FY 2022-23 FY 2022-23 FY 2022-23
GENERAL FUND
GENERAL GOVERNMENT
CITY COUNCIL 22,010 22,669 24,280 24,280 23,400 96.4% 23,780 LEGAL SERVICES 432,042 569,951 658,450 658,450 625,181 94.9% 650,000 CITY MANAGER 850,489 971,234 942,620 742,620 714,344 96.2% 737,350 HUMAN RESOURCES 168,257 191,669 232,040 232,040 226,829 97.8% 245,000 CITY CLERK 247,843 252,426 304,320 304,320 337,212 110.8% 340,150 INFORMATION SYSTEMS 449,278 392,818 490,650 492,385 504,087 102.4% 522,380 FINANCE SERVICES 781,332 715,272 717,550 717,550 736,709 102.7% 705,000 RISK MANAGEMENT 286,591 416,184 305,200 305,200 280,408 91.9% 275,000 PLANNING SERVICES 1,124,971 954,394 1,356,130 1,356,130 1,196,048 88.2% 1,320,000 CODE ENFORCEMENT 140,177 129,128 138,940 138,940 148,242 106.7% 154,000 BUILDING SERVICES 349,196 423,102 337,000 417,000 485,477 116.4% 417,000 TOTAL 4,852,186 5,038,847 5,507,180 5,388,915 5,277,937 97.9% 5,389,660
PUBLIC SAFETY
LAW ENFORCEMENT 2,635,662 2,647,355 2,815,740 2,815,740 2,687,591 95.4% 2,750,000 LIFEGUARD SERVICES 1,267,016 1,125,842 1,310,570 1,335,870 1,393,458 104.3% 1,366,170 PARKING ENFORCEMENT 826,516 742,191 901,450 942,350 1,084,591 115.1% 1,025,000 FIRE PROTECTION 2,400,378 2,373,982 2,545,940 2,557,335 2,442,988 95.5% 2,500,000 HAZARDOUS WASTE MANAGEMENT 17,629 17,648 20,250 20,250 17,632 87.1% 20,000 SOLID WASTE 4,647 4,207 5,000 5,000 3,508 70.2% 4,500
EMERGENCY PREPAREDNESS 1,314 1,318 4,550 4,550 2,884 63.4% 6,620 TOTAL 7,153,161 6,912,543 7,603,500 7,681,095 7,632,652 99.4% 7,672,290
PUBLIC WORKS
ENGINEERING SERVICES 145,511 174,469 195,000 195,000 137,256 70.4% 205,000 STORM DRAIN 134,225 91,273 154,640 154,640 154,487 99.9% 170,000 FACILITIES 184,408 238,954 245,000 245,000 237,242 96.8% 210,000 TOTAL 464,144 504,696 594,640 594,640 528,985 89.0% 585,000
NON-DEPARTMENTAL
COMMUNITY SUPPORT 390,627 274,573 315,560 400,180 415,129 103.7% 400,180 TV STUDIO 82,855 80,574 111,820 111,820 97,575 87.3% 97,000 CITY MEMBERSHIPS 90,754 88,191 94,680 94,680 93,740 99.0% 95,000 CITY HALL - GENERAL 111,432 129,645 150,750 157,091 150,750 104.2% 168,300 TOTAL 693,881 554,770 672,810 757,430 763,535 100.8% 760,480
TOTAL GENERAL FUND BEFORE
EQUIPMENT REPLACEMENT 13,163,371 13,010,855 14,378,130 14,422,080 14,203,109 98.5% 14,407,430 EQUIPMENT REPLACEMENT 65,687 55,423 14,600 984,100 987,427 100.3% 983,410
TOTAL GENERAL FUND INCLUDING
EQUIPMENT REPLACEMENT 13,229,057 13,066,278 14,392,730 15,406,180 15,190,536 98.6% 15,390,840 MEASURE Q FUND 907,051 202,171 75,000 1,675,750 1,325,555 79.1% 1,601,375 EMERGENCY EXPENDITURE FUND - 30,316 - - - 0% -
ROAD MAINTENANCE REHAB ACCOUNT - - - - - 0% -
GAS TAX FUND
STREET MAINTENANCE 182,099 132,780 362,800 462,800 276,033 59.6% 405,000 STREET LIGHTS/SIGNS 125,632 101,422 129,970 129,970 161,080 123.9% 163,300 STREET LANDSCAPING 278,477 199,692 268,140 277,640 272,320 98.1% 300,000 TOTAL GAX TAX FUND 586,208 433,894 760,910 870,410 709,434 81.5% 868,300
CITY OF DEL MAR
FISCAL YEAR 2022-2023
FINAL FINANCIAL REPORT
EXPENDITURE SUMMARIES
205 March 18, 2024 Item 10
ACTUAL ACTUAL ADOPTED FINAL ACTUAL %
EXP EXP BUDGET AMENDED EXP EXPENSED PROJECTED
FINAL FINAL (6/20/22) BUDGET FINAL EXP
DEPARTMENT FY 2020-21 FY 2021-22 FY 2022-23 FY 2022-23 FY 2022-23 FY 2022-23 FY 2022-23
CITY OF DEL MAR
FISCAL YEAR 2022-2023
FINAL FINANCIAL REPORT
EXPENDITURE SUMMARIES
OPEN SPACE FUND
POWERHOUSE OPERATIONS 371,958 240,099 426,620 403,360 379,591 94.1% 410,880 BEACH MAINTENANCE 337,950 310,229 392,230 421,920 363,402 86.1% 420,000 PARK MAINTENANCE 307,011 222,509 354,640 375,830 309,117 82.2% 368,000 TOTAL OPEN SPACE FUND 1,016,918 772,837 1,173,490 1,201,110 1,052,109 87.6% 1,198,880 SUPPLEMENTAL LAW ENFORCEMENT - - - - - 0% -
REGIONAL COMMUNICATION FUND 61,607 86,302 59,760 59,760 40,960 68.5% 59,760 GRANTS FUND 37,917 29,309 53,970 61,204 69,752 114.0% 61,204 HOUSING FUND 95,600 87,035 99,550 99,550 101,143 101.6% 101,150 AB 939 150,398 88,477 73,590 77,090 35,989 46.7% 55,000 PEG FEE FUND 10,427 6,949 6,800 15,300 18,510 121.0% 19,500 TOTAL GENERAL O&M FUNDS 16,095,184 14,803,570 16,695,800 19,466,354 18,543,989 95.3% 19,356,009
CAPITAL IMPROVEMENT FUNDS
OPEN SPACE CIP 137,311 84,595 331,400 747,720 584,768 78.2% 747,720 GENERAL FUND CIP 763,030 298,818 2,091,300 2,872,150 909,191 31.7% 2,872,150 DEBT SERVICE-CITY HALL 905,661 906,996 904,290 904,290 904,283 100.0% 904,290 TRANSNET II CIP 152,680 59,859 417,700 417,700 133,264 31.9% 417,700 RTCIP FUND 5,000 - - - - 0.0% -
TOTAL CAPITAL IMPROVEMENT FUNDS 1,963,682 1,350,268 3,744,690 4,941,860 2,531,506 51.2% 4,941,860 SPECIAL PROJECT FUND 368,344 297,055 788,500 1,371,130 452,662 33.0% 1,371,130 TOTAL GENERAL GOVERNMENTAL FUNDS 16,450,893 18,427,211 21,228,990 25,704,968 21,528,157 83.8% 25,668,999 WORKERS' COMPENSATION FUND 228,848 286,439 290,000 290,000 380,724 131.3% 250,000
WATER FUND
GENERAL ADMINISTRATION 1,773,437 1,739,596 1,939,550 1,990,250 1,653,945 83.1% 1,982,880 RISK MANAGEMENT 153,582 94,604 126,400 126,400 132,948 105.2% 126,400 RAW WATER SUPPLY 1,647,167 1,607,704 1,701,110 1,771,110 1,677,581 94.7% 1,768,000 TREATMENT/DELIVERY 445,740 346,427 404,020 519,020 441,012 85.0% 517,330 TOTAL WATER FUND O&M 4,019,926 3,788,331 4,171,080 4,406,780 3,905,486 88.6% 4,394,610 WATER CAP IMPROVEMENT 29,848 16,619 290,000 487,080 1,367 0.3% 487,080 TOTAL WATER FUND 4,049,775 3,804,950 4,461,080 4,893,860 3,906,853 79.8% 4,881,690
CLEAN WATER FUND
PLANNING 59,593 48,032 54,760 54,760 66,315 121.1% 66,630 CODE ENFORCEMENT 35,490 32,856 37,430 37,430 37,415 100.0% 37,170 CLEAN WATER MANAGEMENT 266,563 211,351 310,050 310,050 281,209 90.7% 276,000 PUBLIC WORKS 211,739 201,981 273,990 278,790 275,141 98.7% 286,850 TOTAL CLEAN WATER O & M 573,385 494,220 676,230 681,030 660,080 96.9% 666,650 CLEAN WATER CAP IMPROVEMENT 63,114 20,832 273,000 511,391 3,462 0.7% 511,391 TOTAL CLEAN WATER FUND 636,499 515,052 949,230 1,192,421 663,542 55.6% 1,178,041 206 March 18, 2024 Item 10
ACTUAL ACTUAL ADOPTED FINAL ACTUAL %
EXP EXP BUDGET AMENDED EXP EXPENSED PROJECTED
FINAL FINAL (6/20/22) BUDGET FINAL EXP
DEPARTMENT FY 2020-21 FY 2021-22 FY 2022-23 FY 2022-23 FY 2022-23 FY 2022-23 FY 2022-23
CITY OF DEL MAR
FISCAL YEAR 2022-2023
FINAL FINANCIAL REPORT
EXPENDITURE SUMMARIES
WASTEWATER FUND
RISK MANAGEMENT 138,316 98,838 165,400 165,400 131,867 79.7% 154,000 WASTEWATER TRANSPORTATION 16,540 216,715 164,800 164,800 102,276 62.1% 160,000 WASTEWATER TREATMENT 703,746 736,349 937,000 937,000 909,145 97.0% 870,000 DEBT SERVICE 161,382 564,625 569,940 569,940 150,176 26.3% 569,920 WASTEWATER PROGRAM 2,382,970 2,014,779 2,546,220 2,574,220 2,109,626 82.0% 2,577,000 TOTAL WASTEWATER FUND O&M 3,402,953 3,631,306 4,383,360 4,411,360 3,403,091 77.1% 4,330,920 WASTEWATER CAPITAL IMPROVEMENT - 16,368 125,000 270,200 - 0.0% 270,200 TOTAL WASTEWATER FUND 3,402,953 3,647,674 4,508,360 4,681,560 3,403,091 72.7% 4,601,120 TOTAL ENTERPRISE FUNDS 8,089,227 7,967,676 9,918,670 10,767,841 7,973,485 74.0% 10,660,851 TOTAL EXPENDITURES 24,705,007 26,745,285 31,437,660 36,762,809 29,882,366 81.3% 36,579,850 207 March 18, 2024 Item 10
City of Del Mar
Cash Flow Report
General Fund
Fiscal Year 2022-23
Budget Mid-Year Final
Adopted Update Budget Results
FY 2023 FY 2023 FY 2023 FY 2023
Jun 2021 Jun 2022 Mar 2023 Difference
(A) (B) (C) (D) (E = D- C)
Total Revenue 18,697,150 17,684,930 20,595,685 21,999,774 1,404,089 Total Expenditures 14,392,730 14,157,080 15,406,180 15,190,536 (215,644) Transfers
Measure Q Loan - - - - -
Emergency Fund - - - - -
Gas Tax 495,850 631,910 763,410 613,379 (150,031)
Open Space 683,650 653,630 644,250 616,800 (27,450)
SLESF (100,000) (100,000) (165,270) (166,847) (1,577)
Regional Comm 11,760 11,760 11,760 - (11,760)
Housing Fund Transfer 100,000 200,000 800,000 800,000 - Capital Improvement Transfer 200,000 200,000 -
Clean Water (non-CIP) 80,760 114,230 - 116,455 116,455
RMRA Reimb (88,000) (97,000) (85,400) - 85,400
PEG Fee Reimb (40,000) (40,000) (30,000) (25,000) 5,000 Total Transfers 1,144,020 1,374,530 2,138,750 2,154,787 16,037 City Hall Debt 904,290 904,290 904,290 904,283 (7)
Cash Flow (before CIP & SP) 1,479,540 $ 2,025,600 $ 2,146,465 $ 3,750,168 $ 1,603,703 $ Transfer to CIP
Open Space 150,000 331,400 331,400 400,210 68,810
General Fund 472,700 524,000 524,000 590,878 66,878
RTCIP - - - - -
Clean Water 273,000 273,000 264,846 109,373 (155,473)
Total CIP 895,700 1,128,400 1,120,246 1,100,461 (19,785) Transfer to Special Projects 563,500 333,500 713,500 669,212 (44,288) Cash Flow (after CIP & SP) 250,340 $ 333,700 $ 312,719 $ 1,980,495 $ 1,667,776 $ Reserves
Contingency Reserves 2,926,094 3,895,728 4,811,637 6,413,333 1,601,696 Self-Insurance 300,000 300,000 371,553 437,632 66,079
Pension Reserves 1,720,200 2,900,000 3,400,000 3,400,000 - Leave Liability 63,123 100,000 100,000 100,000 -
Equipment Replecement 782,050 985,400 985,400 985,400 - 8,181,128 5,791,467 9,668,590 11,336,365 1,667,775
208 March 18, 2024 Item 10
City of Del Mar
Summary of Encumbrances and Continuing Appropriations
Fiscal Year 2022-23
Project Name Department Account Number Amounts
General Fund
Motorola Radios & Supp (PO 56-00221) CS 01.5631.2600 6,052 Motorola Radios & Supp (PO 56-00221) CS 01.5632.2600 3,023 Motorola Radios & Supp (PO 56-00224) CS 01.5536.2300 4,497 Geotechnical Service (PO 58-00637) PW 01.5220.3210 11,640 Wildland Hose Packs (PO 57-00126) Fire 01.5730.2600 732 Total Fund $ 25,944
Measure Q Fund
Shores Park Master Plan CM 02.7000.7003 33,828
Pavement Rehabilitation PW 02.7000.7009 75,000
Undergrounding - Tewa Ct PW 02.7000.7201 108,376
Undergrounding 1A - Stratford Ct. South PW 02.7000.7202 11,037 Undergrounding X1A - Crest Cyn PW 02.7000.7203 96,216
Undergrounding 1B -Stratford Ct. North PW 02.7000.7204 72,818 Total Fund $ 397,275
Gas Tax Fund
Cathotic Protection Assess (PO58-00677) PW 20.5845.3200 9,835 Total Fund $ 9,835
Open Space Fund
Motorola Radios & Supp (PO 56-00221) CS 21.5635.2600 3,023 $ Total Fund $ 3,023
Open Space CIP
Riverpath Del Mar PW 21.7000.7007 113,522 $
20th St Lifeguard Tower Improv PW 21.7000.7040 20,650
20th St Lifeguard Driveway Improv PW 21.7000.7051 17,423 Total Fund $ 151,595
AB939 Fund
SB1383 Consulting (PO 52-00064) CM 26.5225.2300 14,832 $ $ 14,832
General Fund CIP
Pavement Rehabilitation PW 40.7000.7009 126,576 $
Major Facility Repairs PW 40.7000.7010 36,346
CDM Bridge over San Dieguito PW 40.7000.7011 1,503,250 * Jimmy Durante Street Striping PW 40.7000.7013 18,350
Jimmy Durante Blvd Bluff Repairs PW 40.7000.7026 138,712 Torrey Pines Bridge PW 40.7000.7036 10,181
Major Arterial Bike Route Repairs PW 40.7000.7041 55,000 Hoska Ave Alley Assessment PW 40.7000.7047 88,192
San Dieguito Dr Development PW 40.7000.7048 55,900
Beach Colony Ped Improvements PW 40.7000.7050 61,758
Total Fund $ 2,094,265
209 March 18, 2024 Item 10
City of Del Mar
Summary of Encumbrances and Continuing Appropriations
Fiscal Year 2022-23
Project Name Department Account Number Amounts
TransNet CIP
Roadway & Sidewalk Improv PW 44.7000.7002 76,000 $
Pavement Rehabilitation PW 44.7000.7009 40,000
Beach Colony Ped Improvements PW 44.7000.7053 20,000
Total Fund $ 136,000
Special Projects
Housing Element - 6th Cycle PL 49.8000.8004 4,195
SCOUP Sand Replenishing Permit PL 49.8000.8008 71,240
NC/PC Zone Code Amendment PL 49.8000.8011 15,000
Fairgrounds Housing Agreement PL 49.8000.8013 357,540
Short Term Rental Ordinance & LCPA PL 49.8000.8014 80,000 Update Community Plan Safety Element PL 49.8000.8018 43,500 Environmental Justice Element PL 49.8000.8019 5,000
Affordable Housing Incentives PL 49.8000.8020 78,000
SB35 Streamlining Procedures PL 49.8000.8021 1,500
Objective Design Standards PL 49.8000.8022 77,000
Housing State Law Alignment #1 PL 49.8000.8023 6,000
Business Support/Parking PL 49.8000.8025 2,150
ADU Facilitation Measures PL 49.8000.8026 38,500
Housing State Law Alignment #2 PL 49.8000.8027 5,000
6th Cycle Zoning Programs PL 49.8000.8028 32,000
HAP Grant Expenditures PL 49.8000.8029 57,555
Total Fund $ 874,180
Workers' Compensation Fund
WC Implementation Fees (PO 54-00051) FI 50.5420.3200 13,000 $ Total Fund $ 13,000
Water Fund
Rate Study Consulting PW 51.5840.3200 40,976 $
Infrastructure Improvements PW 51.7000.7017 410,222
Valve Replacements PW 51.7000.7037 33,785
$ 484,983
Clean Water Fund
Los Penasquitos Lagoon Repairs PW 55.7000.7015 1,824 $
Storm Drain Improvements PW 55.7000.7045 395,561
$ 397,385
Wastewater Fund
Rate Study Consulting PW 57.5840.3200 40,976 $
Backup Grinder (PO 58-00620) PW 57.5840.5300 62,825
Infrastructure Improvements PW 57.7000.7024 254,902
` $ 358,703
Total Encumbrances $ 4,961,020
* Offset with $1,330,830 in Federal and $172,420 in County funding which will be reflected in the Revenue Summary Report.
210 March 18, 2024 Item 10
BEGINNING ENDING
BALANCE O & M CIP BALANCE
JUL 1, 2023 REVENUES EXPENDITURES EXPENDITURES IN (OUT) JUN 30, 2024 ESTIMATE FY 2024 FY 2024 FY 2024 FY 2024 FY 2024 ESTIMATE CONTINGENCY 39.59% 6,413,333 20,225,080 (15,191,460) - 377,784 $ (4,855,163) 6,969,574 RESTRICTED:
SELF-INSURANCE 437,632 - (170,000) - 148,450 - 416,082
DESIGNATED:
ENCUMBRANCES - - - - - - -
COASTAL PARKING REVENUE - 81,900 (81,900) - - - -
SIDEWALK CAFÉ - 5,000 (5,000) - - - -
PENSION RESERVE 3,400,000 - - - 360,000 - 3,760,000
LEAVE LIABILITY 100,000 - - - - - 100,000
EQUIPMENT REPLACEMENT 985,400 - (102,200) - 100,000 - 983,200 TOTAL GENERAL FUND 11,336,365 20,311,980 (15,550,560) - 986,234 (4,855,163) 12,228,856 3,400,000 7,769,899 - (5,636,310) - - 5,533,589
97,400 90,384 - - - (187,784) -
118,310 9,835 (839,140) - 710,995 - -
736,860 - (1,418,230) - 681,370 - -
DESIGNATED
ENCUMBRANCES 154,618 - - - (154,618) - -
CAPITAL IMPROVEMENT PROJECTS 1,405,000 - - (1,592,000) 187,000 - - OPEN SPACE ACQUISITION 86,388 - - - - - 86,388
TREE RESERVE 37,267 - - - - - 37,267
TOTAL OPEN SPACE FUND 278,273 2,141,860 (1,418,230) (1,592,000) 713,752 - 123,655 160,000 - - - - (160,000) -
45,000 13,894 (61,250) - 7,356 - 5,000
60,000 136,432 (61,170) - - - 135,262
- 52,065 (40,000) - - - 12,065
HOUSING RESERVE 1,100,000 300,000 1,400,000
- 1,152,065 (40,000) 300,000 1,412,065
GENERAL FUND
MEASURE Q
ROAD MAINTENANCE REHABILITATION ACCT
GAS TAX FUND
OPEN SPACE FUND
SUPPLEMENTAL LAW ENFORCEMENT FUND
REGIONAL COMMUNICATIONS FUND
GRANTS FUND
HOUSING FUND
CITY OF DEL MAR
RESERVE SUMMARY REPORT
FISCAL YEAR 2023-2024
(Revised 03/05/2024)
TRANSFERS
211 March 18, 2024 Item 10
BEGINNING ENDING
BALANCE O & M CIP BALANCE
JUL 1, 2023 REVENUES EXPENDITURES EXPENDITURES IN (OUT) JUN 30, 2024 ESTIMATE FY 2024 FY 2024 FY 2024 FY 2024 FY 2024 ESTIMATE
CITY OF DEL MAR
RESERVE SUMMARY REPORT
FISCAL YEAR 2023-2024
(Revised 03/05/2024)
TRANSFERS
154,000 385,566 (78,840) - - - 460,726
46,000 3,572 (10,700) - - (30,000) 8,872
1,129,560 200,000 (2,213,060) 883,500 - -
ENCUMBRANCES 591,015
RESERVE FOR CAPITAL 200,000 200,000 400,000
DEBT SERVICE - - (905,670) - 905,670 - -
TOTAL CAPITAL IMPROVEMENT FUND 991,015 1,129,560 (905,670) (2,213,060) 1,989,170 - 991,015 - 874,180 - (1,228,180) 354,000 - -
391,000 3,190 (391,000) - - - 3,190
- 31,628 - - - - 31,628
290,000 308,724 (263,150) - - - 335,574
NET POSITION 1,459,839 4,336,000 (4,087,710) - - (470,152) 1,237,977 RESTRICTED:
CONTRIBUTED CAPITAL 4,028,272 - - - - - 4,028,272
DESIGNATED
ENCUMBRANCES 484,983 - - - - - 484,983
SELF-INSURANCE 50,000 - - - - - 50,000
RATE STABILIZATION 200,000 - - - - - 200,000
CAPTIAL REPLACEMENT 350,000 - - (300,000) 470,152 - 520,152 NET PENSION LIABILITY (1,832,206) - - - - - (1,832,206) PENSION RESERVE 780,500 - - - - - 780,500
OPERATING RESERVE 500,000 - - - - - 500,000
EQUIPMENT REPLACEMENT 200,000 - (33,390) - - - 166,610
UTILITY PLANT IN SERVICE 7,274,127 - (385,000) - - - 6,889,127 TOTAL WATER FUND 13,495,515 4,336,000 (4,506,100) (300,000) 470,152 (470,152) 13,025,415
CAPITAL IMPROVEMENT FUND
SPECIAL PROJECT FUND
TRANSNET FUND
RTCIP
WORKERS' COMPENSATION FUND
WATER FUND
PEG FEE FUND
AB 939 FUND
212 March 18, 2024 Item 10
BEGINNING ENDING
BALANCE O & M CIP BALANCE
JUL 1, 2023 REVENUES EXPENDITURES EXPENDITURES IN (OUT) JUN 30, 2024 ESTIMATE FY 2024 FY 2024 FY 2024 FY 2024 FY 2024 ESTIMATE
CITY OF DEL MAR
RESERVE SUMMARY REPORT
FISCAL YEAR 2023-2024
(Revised 03/05/2024)
TRANSFERS
NET POSITION - 635,000 (741,440) - 106,440 -
-
DESIGNATED -
UTILITY PLANT IN SERVICE 141,348 141,348
ENCUMBRANCES 341,486 - (341,486) - -
CAPITAL REPLACEMENT - (65,000) 65,000 -
TOTAL CLEAN WATER FUND 482,834 635,000 (741,440) (65,000) 171,440 - 141,348 NET POSITION 452,325 3,912,000 (3,660,890) - 317,000 (417,900) 602,535 -
RESTRICTED
IBANK RESERVE 228,828 - - - - - 228,828
CONTRIBUTED CAPITAL 650,814 - - - - - 650,814
LOAN RESERVE-STATE REVOLVING - 332,979 - - - - 332,979
DESIGNATED
ENCUMBRANCES 358,703 - - - - - 358,703
SELF-INSURANCE 50,000 - - - - - 50,000
CAPITAL REPLACEMENT 350,000 - - (375,000) 375,000 - 350,000 NET PENSION LIABILITY (1,841,900) - - - - - (1,841,900) PENSION RESERVE 817,000 - - - - (317,000) 500,000
OPERATING RESERVE 408,000 - - - - - 408,000
EQUIPMENT REPLACEMENT 300,000 - (42,900) - 42,900 - 300,000 UTILITY PLANT IN SERVICE 8,497,298 - (700,000) - - - 7,797,298 RATE STABILIZATION 200,000 - - - - - 200,000
TOTAL WASTEWATER FUND 10,804,047 3,912,000 (4,403,790) (375,000) 734,900 (734,900) 9,937,257 TOTAL ENTERPRISE FUNDS 24,782,396 8,883,000 (9,651,330) (740,000) 1,376,492 (1,205,052) 23,445,506 TOTAL - ALL FUNDS 48,167,418 37,228,110 (29,271,040) (11,409,550) 6,437,999 (6,437,999) 44,714,938
CLEANWATER FUND
WASTEWATER FUND
213 March 18, 2024 Item 10
City of Del Mar
Agenda Report
TO: Honorable Mayor and City Council Members
FROM: Monica Molina, Finance Manager/Treasurer
Ashley Jones, City Manager
DATE: March 18, 2024
SUBJECT: Fiscal Year 2023-24 Mid-Year Financial Report
REQUESTED ACTION/RECOMMENDATION:
Staff recommends that the City Council: 1) Review the Fiscal Year (FY) 2023-24 Mid-Year Financial Report; and 2) Approve Resolution (Attachment A) amending the FY 2023-24 Operating and Capital Budget as included in Exhibit A of Attachment A, authorizing the reclassification of the Parking Enforcement Sergeant position to Parking and Community Enforcement Lieutenant position, and amending Management Professional Compensation Plan reflecting the reclassification included as Exhibit B to Attachment A.
DISCUSSION/ANALYSIS:
During a public budget workshop held on May 30 and 31, 2023, the City Council received public input and provided direction to staff on the proposed Fiscal Years 2023-2024 and 2024-2025 operating expenditures; capital and special projects; staffing recommendations; Measure Q Fund; and City reserve balances and proposed policies. On June 19, 2023, Council approved the Fiscal Years 2023-24 and 2024-25 Operating and Capital Budget (Budget). The approved FY 2023-24 Budget reflected an Operating and Capital Budget of $39.8 million with a General Fund Contingency of 27.87% (102 days of operation) and included transfers of $360,000 to the Pension Reserve Fund; $100,000 to the Equipment Reserve Fund; $300,000 to the Housing Reserve Fund; and $200,000 to the Capital Reserve Fund.
As separately presented, the FY 2022-23 Final Financial Report indicated positive results. The final results for FY 2022-23 reflect a General Fund Contingency of 39.68% (145 days of operations) with a total General Fund ending balance at June 30, 2023, of $11.3 million. In order to present the FY 2022-23 Mid-Year Financial Report with the most updated information, the July 1, 2023, beginning balances have been updated to reflect the FY 2022-23 final results.
After a thorough review of financial data through the second quarter (July-December 2023) of FY 2023-24, as discussed in detail below, staff is recommending increasing General Fund revenues by $475,500, and General Fund expenditures by $301,500. Staff is also recommending approving $3,516,702 in carry over funds from FY 2022-23. Based on the positive FY 2022-23 financial results, staff is recommending transferring an additional $640,000 to the Pension Reserve Fund; $200,000 to the Housing Reserve Fund; and $250,000 to the Capital Reserve Fund. This results in new balances of $4.4 million in the Pension Reserve; $1.6 million in the Housing Reserve; and $650,000 in the Capital Reserve. Approval of all recommended items will result in an adjusted June 30, 2024, General Fund Contingency of $5,357,792, which is a 29.60% contingency (108 days of operations) and exceeds the General Fund Contingency Policy goal of 25% (Attachment A).
1 March 18, 2024 Item 11
City Council Agenda Report
FY 2023-24 Mid-Year Financial Report
March 18, 2024