ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2022
CITY OF PACIFICA, CALIFORNIA
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CITY OF PACIFICA
CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
Fiscal year ended June 30, 2022
Prepared by
Finance Department
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INTRODUCTORY SECTION
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CITY OF PACIFICA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FISCAL YEAR ENDED JUNE 30, 2022
Table of Contents
Page
INTRODUCTORY SECTION:
Letter of Transmittal ....................................................................................................................... i Certificate of Achievement for Excellence in Financial Reporting ................................................ vii City Council Organizational Chart ............................................................................................... viii City Executive Staff ...................................................................................................................... ix FINANCIAL SECTION:
Independent Auditors’ Report ................................................................................................... 1 Management’s Discussion and Analysis .................................................................................. 7 Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position ............................................................................................ 23 Statement of Activities ................................................................................................. 24 Fund Financial Statements:
Governmental Funds:
Balance Sheet .......................................................................................................... 26 Reconciliation of the Governmental Funds-Balance Sheet with the Statement of Net Position ..................................................................................... 28 Statement of Revenues, Expenditures and Changes in Fund Balance .................... 30 Reconciliation of the Net Change in Fund Balances –
Total Governmental Funds with the Statement of Activities ................................ 32 Proprietary Funds:
Statement of Net Position ......................................................................................... 33 Statement of Revenues, Expenses and Changes in Fund Net Position ................... 34 Statement of Cash Flows .......................................................................................... 36 Fiduciary Funds:
Statement of Fiduciary Net Position ......................................................................... 38 Statement of Changes in Fiduciary Net Position ...................................................... 39
CITY OF PACIFICA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FISCAL YEAR ENDED JUNE 30, 2022
Table of Contents
Page
FINANCIAL SECTION (Continued):
Notes to the Basic Financial Statements ........................................................................... 41 Required Supplementary Information:
Schedule of Changes in Net Pension Liability and Related Ratios – Miscellaneous ......... 90 Schedule of Contributions - Miscellaneous ........................................................................ 92 Schedule of Proportionate Share of Net Pension Liability and Related Ratios As of the Measurement Date – Safety Plan .................................................................... 93 Schedule of Contributions – Safety Plan ........................................................................... 94 Schedule of Changes in Net Pension Liability and Related Ratios – PARS ...................... 96 Schedule of Contributions – PARS ................................................................................... 98 Schedule of Changes in the Total OPEB Liability and Related Ratios .............................. 99 Budgetary Comparison Schedule:
General Fund ............................................................................................................. 100 Disaster Accounting Special Revenue Fund .............................................................. 102 Notes to Required Supplementary Information ................................................................ 103 Supplementary Information:
Budgetary Comparison Schedule:
Debt Service Fund ..................................................................................................... 106 General Capital Improvement – Capital Projects Fund .............................................. 107 Non-major Governmental Funds:
Combining Balance Sheet ......................................................................................... 112 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ....................................................................................................... 116 Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual...................................................................... 120 Internal Service Funds:
Combining Statement of Net Position ........................................................................ 126 Combining Statement of Revenues, Expenses and Changes in Fund Net Position .. 127 Combining Statement of Cash Flows ......................................................................... 128
CITY OF PACIFICA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FISCAL YEAR ENDED JUNE 30, 2022
Table of Contents
Page
Statistical Section:
Financial Trends:
Net Position by Component ............................................................................................. 134 Changes in Net Position .................................................................................................. 136 Fund Balances of Governmental Funds .......................................................................... 138 Changes in Fund Balances of Governmental Funds ....................................................... 140 Revenue Capacity:
Taxable Sales by Category .............................................................................................. 142 Direct and Overlapping Sales Tax Rate ........................................................................... 143 Tax Revenues by Source ................................................................................................ 144 Assessed Valuation, Tax Rate, and Tax Levies .............................................................. 145 Direct and Overlapping Property Tax Rates .................................................................... 146 Principal Property Taxpayers ........................................................................................... 147 Property Tax Levies and Collections................................................................................ 148 Debt Capacity:
Outstanding Debt by Type – Governmental ..................................................................... 149 Ratios of Outstanding Debt by Type – Business-Type .................................................... 150 Direct and Overlapping Governmental Activities Debt ..................................................... 151 Legal Debt Margin Information ......................................................................................... 152 Wastewater Obligations Pledged Revenue Coverage ..................................................... 153 Demographic and Economic Information:
Demographic and Economic Statistics. ........................................................................... 154 Principal Employers ......................................................................................................... 155 Operating Information:
Full Time Equivalent Employees by Function/Program. .................................................. 156 Operating Indicators by Function/Program. ..................................................................... 157 Capital Asset Statistics by Function/Program. ................................................................. 158 Sewer Rates .................................................................................................................... 159 This Page Intentionally Left Blank
1 On October 19, 2021 the Governmental Accounting Standards Board issued a pronouncement (Statement No. 98) that changed the name of the Comprehensive Annual Financial Report (CAFR) to Annual Comprehensive Financial Report (ACFR). The name change was prompted by concerns that the prior acronym sounds like a profoundly offensive term. No other changes were made to the report’s structure or content.
January 18, 2023
Honorable Mayor, Members of the City Council, and Citizens of the City of Pacifica, California:
We are pleased to submit the City of Pacifica's Annual Comprehensive Financial Report (ACFR)1 for the fiscal year ended June 30, 2022. The purpose of this report is to provide the City Council, City Staff, residents of Pacifica, and other interested parties with accurate, complete, and fair data and helpful information concerning the City's operations and financial position.
The report is prepared in compliance with California Government sections 25250 and 25253 and following the Generally Accepted Accounting Principles (GAAP) set by the Governmental Accounting Standards Board and standards prescribed by the Government Finance Officers Association of the United States and Canada (GFOA) and audited in accordance with generally accepted auditing standards by an independent firm of certified public accountants. Pursuant to that requirement, we hereby issue the annual comprehensive financial report of the City for the fiscal year ended June 30, 2022. This report conforms to GASB Statement 34 financial reporting standards, including dual-perspective financials showing both an entity-wide view of all governmental and business-type activities and a detailed focus on the financial position and operating results of the City's major funds.
We believe the report contains all disclosures necessary for the reader to understand the City's financial affairs. State law requires every general-purpose government to publish a complete set of audited financial statements. Professional standards encourage this report to be published within sufficient time to allow the government to remedy any deficiencies while minimizing negative impacts. This report is issued to fulfill that requirement for the fiscal year ended June 30, 2022.
Management assumes full responsibility for the completeness and reliability of the information contained in the ACFR based upon a comprehensive framework of internal control that it has established for this purpose.
Stewardship and Internal Control
This report consists of management's representations concerning the finances of the City of Pacifica and promotes accountability. Consequently, responsibility for both the accuracy of the data and the fairness of this presentation, including all disclosures, rests with the City management.
CITY OF PACIFICA
540 Crespi Drive • Pacifica, California 94044-2506
www.cityofpacifica.org
MAYOR
Tygarjas Bigstyck
MAYOR PRO TEM
Sue Vaterlaus
COUNCIL
Mary Bier
Sue Beckmeyer
Scenic Pacifica Christine Boles
Incorporated November
22, 1957
i
To provide a reasonable basis for making these representations, management has established a comprehensive framework of internal control designed to protect the government's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of financial statements in conformity with GAAP to:
x Safeguard City assets from loss or unauthorized use or disposal. x Provide reliable financial records for preparing internal and external financial reports and for maintaining accountability over City Assets.
x Ensure compliance with applicable Federal and State laws and regulations related to programs for which the City receives assistance.
As the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable rather than an absolute assurance that the financial statements are free of any material misstatements.
Management believes that the City's internal controls reasonably safeguard assets, assure that financial transactions are properly recorded and reported, and ensure compliance with applicable Federal and State laws and regulations. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to represent fairly the financial position and results of operation of the City's various funds. All disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been included.
State statutes require an annual audit by independent certified public accountants. The purpose of the audit is to provide reasonable assurance that the financial statements are presented fairly, in all material respects, and/or give a true and fair view in accordance with the financial reporting framework. The City's independent audit involves examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. The City's independent auditor, Maze & Associates, a firm of licensed, certified public accountants, has issued an unmodified ("clean") opinion on the City of Pacifica's financial statements for the fiscal year ended June 30, 2022. The independent auditor's report is located at the front of the financial section of this report.
In addition to meeting the requirements set forth by State law, the audit is also designed to meet the requirements of the Single Audit Act of 1984 and 2 CFR part 200, subpart F. The standards governing Single Audit engagements require the auditor to report on the City's internal controls and compliance with certain legal requirements with special emphasis on the administration of federal awards. These reports are available in the City's separately issued Single Audit Report.
The ACFR report is presented in three sections:
x The Introduction section includes this letter of transmittal, the City's organizational chart, and certificates of achievement.
x The Financial Section includes the report of the independent auditors; Management's Discussion and Analysis (MD&A); the basic financial statements, including governmentwide financial statements; and the accompanying notes. Required supplementary information other than the MD&A is also included in the financial section. x The Statistical section includes selected financial and demographic information presented on a multi-year basis.
The notes to the financial statements are provided in the financial section and are considered essential to fair presentation and adequate disclosure. The notes include the summary of significant accounting policies for the City and other necessary disclosure of important matters relating to the City's financial position. The notes are an integral part of the financial statements and should be read in conjunction with them.
ii
GAAP and the Governmental Accounting Standards Board require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City's MD&A can be found immediately following the report of the independent auditors.
City of Pacifica Profile
The City of Pacifica is a full-service city located on the Pacific Coast in San Mateo County, south of San Francisco. Situated within the Bay Area Peninsula, it is framed by the ridges of the Coast Range on the east, the Montara Mountains on the south, and the Pacific Ocean on the west. The City of Pacifica encompasses roughly 12.6 square miles (of which approximately one-half is publicly owned and protected open space) and serves a population of approximately 39,000. A combination of residential, office, and commercial retail businesses, and natural open space, comprise the makeup of the City. The City of Pacifica, while located in the midst of a major metropolitan region, is a unique family-oriented coastal community that prides itself on fostering a "small town" feel. The City's geographic setting, its proximity to San Francisco and the San Francisco International Airport, along with its natural open space and coastal beauty, make it a desirable place to live and work.
The City of Pacifica is a General Law City incorporated in 1957 and operates under the CouncilManager form of government. Legislative authority is vested in a five-member City Council elected by district for four-year overlapping terms. The Mayor is selected each year by a majority vote of the Council members. The City Council is responsible for, among other things, passing ordinances, adopting the budget, appointing advisory commissions/committees, and hiring both the City Manager and City Attorney, who are retained on a contract basis. The City Manager, in turn, appoints the heads of the various departments.
The City provides a range of services to its residents, including but not limited to public safety (police and fire), streets, wastewater and stormwater infrastructure, garbage and recycling, parks, beaches, and recreation, social services, planning and zoning, and leadership through general administrative services. Water, gas, and electric utilities are provided directly through other agencies not under City operations.
The City performed certain infrastructure construction and economic development activities through a separate Redevelopment Agency until its dissolution on February 1, 2012. The City accepted the role of Successor Agency to the Redevelopment Agency per Council action on January 23, 2012.
Budget Process
The City maintains budgetary controls, the objective of which is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City's governing body.
Activities of the general fund, special revenue funds, enterprise funds, debt service funds, and internal service funds are included in the annual appropriated budget. The Capital Improvement Projects budget reflects existing projects that do not lapse at year-end but are carried forward until completion of the project.
The City's budget process goals are to identify necessary and/or desirable service-level options, which are all combined to reach a balanced and sustainable budget. Each City department is provided with a base budget with certain inflationary increases and is given an opportunity to request additional funding if needed. The City Manager, Assistant City Manager/Administrative Services Director, and Deputy Finance Director meet with each department individually to discuss and finalize the proposed budget recommendations. The City Manager then presents the proposed budget to the Council for review prior to the end of May every year. The Council holds a public iii
hearing on the proposed budget and is required to adopt a final budget by no later than the end of June, the close of the City's fiscal year.
The level of budgetary control (that is, the level at which expenditures cannot legally exceed the appropriated amount) is maintained at the department level by tracking expenditures and budget authority. Unexpended budget appropriations lapse at the end of the fiscal year with the exception of capital improvement projects. The City Manager is responsible for the preparation of the budget, and along with the Assistant City Manager/Administrative Services Director, is responsible for monitoring the budget for legal compliance.
The annual budget serves as the foundation for the City of Pacifica's financial planning and control.
The budget is prepared by fund, and by department (e.g., Police, Fire, Planning, Parks, Beaches and Recreation, Public Works, Administration). The City Manager may transfer resources within a department as he sees fit. Transfers of appropriations between funds need special approval from the Council. City Council may amend the budget by resolution during the fiscal year. The Fiscal Year ("FY") 2021-22 Mid-Year Budget Adjustments were adopted by Council via Resolution No. 15-2022 on March 14, 2022. Budgets are adopted on a basis consistent with GAAP. Budget-toactual comparisons are presented in the supplementary section of the accompanying financial statements for each governmental fund for which an appropriated annual budget has been adopted.
Economic Factors and Financial Outlook
State Budget and Economic Outlook
The City's local economy is a reflection of the regional and state economic outlook. The California economy is poised to overtake Germany as the world's 4th largest economy, continuing to outperform the nation and other countries in Gross Domestic Product (GDP) growth, companies' market value, and renewable energy.
California has also been the largest state economy by GDP in the past 50 years and has been leading the nation in the current economic recovery. This is due in part to the State's support from the technology and science sectors that were minimally impacted by the pandemic, as well as growth in the defense sector as the Russia-Ukraine conflict continues.
As knowledge workers throughout the State remained employed and sought additional work-from home space during the pandemic, the price of housing continued to climb throughout the State, particularly in the Bay Area, Los Angeles, and San Diego markets.
In May 2022, the Governor of California announced an unprecedented $97.5 billion budget surplus fueled by income tax revenue increases from the strong economic recovery and the extraordinary past year of stock market performance enjoyed by the most affluent residents. Approximately half of the State's income tax is collected from the top 1 percent of the State's income earners. Nearly 10 percent of that income is earned through capital gains in California. However, with the recent economic downturn, the State Budget projects a significant deficit in the upcoming years, which may impact the City’s budget in future years as well.
Local Economy
Overall, the San Francisco Bay Area economy has recovered from the pandemic, enjoying prosperity exceeding pre-pandemic figures in the technology and life science sectors. However, the majority of other sectors – including retail, food, hotel, transportation, arts/entertainment, nonprofit, personal services, and warehousing – remained depressed over the past year. Although the area's economic recovery appears to be encouraging, many challenges resulting from the unprecedented increase in inflation may lie ahead.
According to the June 2022 report from the California Employment Development Department (EDD), California unemployment rate dropped to 4% in June, 2022, from 8.5% in June, 2021, as the state’s employers gained 75,000 payroll jobs. California has now regained 2.6 million jobs (93.6%) lost during March-April of 2020 due to the COVID-19 pandemic. iv
As of June 2022, there were an estimated 448,700 jobs in San Mateo County, an increase of 31,000 jobs from August 2021. The unemployment rate in San Mateo County has decreased from
4.6% in August 2021 to 2.1% in June 2022.
As of the date of this letter, the unemployment rates have stayed level and the next year should be stable. However, if the Federal Reserve bank continues to raise the Fed Rate to slow inflation, a recession is likely to begin in the upcoming years.
Similar to the State level economics, the local economy has experienced job growth and an overall improvement in economically sensitive revenue sources such as transient occupancy tax, on-theground retail sales tax and online sales. In addition, the City's largest revenue source, property tax, has also been positively impacted by rising prices, but will be relatively flat for the next few years given the slow down in home sales and the slight decline in values as a result of the increase in mortgage interest rates
The National Association of Realtors has reported existing-home sales fell for the tenth month in a row in November 2022, or 35.4% from the previous year. The national median existing-home price rose to $370,700, which reflects an increase of 26% from the average price of $295,300 in June 2020, and 3% of the 26% occurred in the last year. According to Real Estate Report for San Mateo County, the median home price of a single-family home in Pacifica is $1,362,500 as of December 2022, as compared to $1,361,500 in June 2021 and $1,200,000 in June 2020, reflecting an increase of 13.5% from 2020 to 2021 and 0.1% from 2021 to 2022. During a declining housing price market, the assessed value usually does not decline but stays flat for the years of decline, therefore the City of Pacifica’s property tax revenue will not decline but may be flat during this next real estate slow down.
Revenues for the City were hit hard by the pandemic but have mostly recovered. The revenue recovery is good news for the City, however, the City is challenged due to inflationary costs outpacing revenue increases.
Residential development in the City has reached near build-out conditions, but commercial development potential exists on sites that remain undeveloped or underdeveloped. There is also residential and commercial redevelopment potential on in-fill and/or underutilized sites. The City and the Pacifica Economic Development Committee are active in encouraging business activity and bringing new resident and visitor-serving businesses to Pacifica.
Fund Balance and Long-Term Financial Planning
The long-term financial plan of the City includes cost containment strategies and a comprehensive cost recovery program, both designed to ensure the long-term financial health of the City. The City of Pacifica has continued to be fiscally conservative in financial investments, as well as with the development of a Long-Term Financial Plan. The current Long-Term Financial Plan was presented to the City Council on April 11, 2022. The City remains vigilant in its efforts to continue to provide essential City services while maintaining sufficient levels of fiscal control and accountability. The City's long-term financial outlook projected a $2.7 million structural deficit in FY 2023-24. With the passage of Measure Y in the November 2022 election, the City is in a much better position to deal with the upcoming challenges.
The City's total Fund Balance in the General Fund is $16.3 million. The Fund Balance is comprised of three components; a Non-spendable portion of $3.8 million; a Restricted for Pensions portion of $0.3 million; an Assigned for Budget Shortfall and other Contingencies portion of $4.8 million; leaving an Unassigned portion (available for spending at the City's policy discretion) of $7.4 million.
The Unassigned portion of the General Fund totals 19.4% of total general fund expenditures and is in addition to the minimum policy guideline of 10 percent of total general fund operating expenditures set by the Council for budgetary shortfall policy and planning purposes. v
Acknowledgments
Government Finance Officers Association of the United States and Canada (“GFOA”) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its Annual Comprehensive Financial Report (“Annual Report”) for the fiscal year ended June 30, 2021. This was the first year that the City has achieved this prestigious award in recent history. In order to be awarded a Certificate of Achievement, the City must publish an easily readable and efficiently organized Annual Report. The report satisfied both GAAP and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current Annual Report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.
Our goal is to publish financial information that is helpful to policy leaders and the public.
Preparation of the Annual Comprehensive Financial Report was made possible by the dedicated service of the entire staff of the City of Pacifica Finance Division. Every member of each department has our sincere appreciation for the contributions made in furthering the fiscal yearend audit and for their continuing effort to improve the quality of this report. We would like to take an opportunity to acknowledge the extraordinary efforts and hard work of Lucy Xie, Deputy Finance Director, Mario Xuereb, Financial Analyst and Matt Pressey, Financial Advisor (RGS) for their assistance with the year-end closure and preparation for the audit, as well as commitment to continue improving the City's financial management and reporting.
We also commend the audit team from Maze and Associates for their professional work, dedication, competence, and diligence in ongoing assistance during the audit process and throughout the year. Finally, we would like to express our appreciation to the City Council for their attention and unfailing support of maintaining the highest standards of professionalism in managing the City's finances in a responsible and conservative manner in the best interests of the citizens of Pacifica with the emphasis on transparency, ethics, and fiscal responsibility.
Respectfully submitted,
Kevin Woodhouse Yulia Carter
City Manager Assistant City Manager
vi
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Pacifica
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2021
Executive Director/CEO
vii
CiƟzens of Pacifica
City Council
Planning
Commission
Open Space and
Parkland Advisory
CommiƩee
Economic
Development
CommiƩee
BeauƟficaƟon
Advisory
CommiƩee
Library Advisory
CommiƩee
Emergency
Preparedness &
Safety Commission
Parks, Beaches &
RecreaƟon
Commission
City Manager City AƩorney
Parks, Beaches &
Recreation
Director
Assistant City
Manager/Admin.
Services Director
Police Chief
Planning
City Clerk Director
Director of
Public Works
Fire Chief
(North County Fire
Authority)
viii
CITY OF PACIFICA
MARY BIER
Mayor
TYGARJAS BIGSTYCK
Mayor Pro Tem
MIKE O'NEILL
SUE VATERLAUS
SUE BECKMEYER
Members of City Council
* * * * *
KEVIN WOODHOUSE
City Manager
* * * * *
MICHELLE MARCHETTA KENYON
City Attorney
* * * * *
OTHER ADMINISTRATIVE OFFICERS
YULIA CARTER Assistant City Manager/Administrative
Services Director
CHRISTIAN MURDOCK Planning Director
RON MYERS Fire Chief
DAN STEIDLE Police Chief
MICHAEL PEREZ Director of Parks, Beaches &
Recreation
LISA PETERSEN Director of Public Works
SARAH COFFEY City Clerk
* * * * *
OFFICIAL COMMISSIONS AND COMMITTEES
BEAUTIFICATION ADVISORY COMMITTEE
ECONOMIC DEVELOPMENT COMMITTEE
EMERGENCY PREPAREDNESS & SAFETY COMMISSION
LIBRARY ADVISORY COMMITTEE
OPEN SPACE AND PARKLAND ADVISORY COMMITTEE
PARKS, BEACHES AND RECREATION COMMISSION
PLANNING COMMISSION
ix
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FINANCIAL SECTION
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INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and City Council
City of Pacifica, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of governmental activities, businesstype activities, each major fund, and the aggregate remaining fund information of the City of Pacifica, California (City), as of and for the year ended June 30, 2022, 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, 2022, 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 and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirement relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these 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 the financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’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. 1 Auditor’s 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 auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if, individually or in the aggregate, they could reasonably be expected to influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’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. 2 Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis and other required supplementary information as listed in the Table of Contents be presented to supplement the basic 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 accompanying Supplementary Information, as listed in the Table of Contents, is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Supplementary Information is 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 Section and Statistical Section listed in the Table of Contents, but does not include the basic financial statements and our auditor’s report thereon.
Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. 3 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 28, 2022, 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 the City’s internal control over financial reporting and compliance.
Pleasant Hill, California
December 28, 2022
4 MANAGEMENT’S DISCUSSION
AND ANALYSIS
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City of Pacifica
Management’s Discussion and Analysis, Continued
For the year ended June 30, 2022
The City of Pacifica (City) management staff offers readers of the City’s financial statements this narrative overview and analysis of City financial activities for the fiscal year ended June 30, 2022. It has been designed in accordance with standards established by the Governmental Accounting Standards Board. We encourage readers to consider the information presented here in conjunction with the accompanying letter of transmittal and financial statements.
FINANCIAL HIGHLIGHTS:
CITY-WIDE:
• The City's total net position was $84.4 million as of June 30, 2022, an increase of $11 million from FY2021. Governmental activities increased $7.5 million and Business-type activities increased $3.5 million. Of this net position of $84.4 million, $53.3 million was in Governmental Activities, and $31.1 million was in Business-type Activities. The City’s net investment in capital assets of $95.6 million is not available for future appropriation (see Table 1 for additional information). The negative unrestricted net position of $34.3 million is mainly the result of implementing GASB Statement No. 68, Accounting and Financial Reporting for Pensions recognizing the City’s net pension liability since the fiscal year 2014-15.
• Total City revenues increased by $12.1 million to $71.6 million from $59.5 million. The $9.2 million increase was derived from Governmental Activities, and the $2.9 million increase was derived from Business-type Activities (see Table 2 for additional information). • Total City expenses were $61.5 million: $44.6 million for the Governmental Activities and $16.9 million for the Business-type Activities. This is an increase of $2.6 million compared to the prior year of $58.9 million. Governmental Activities saw a decrease of $0.7 million, while Businesstype Activities saw an increase of $3.3 million mainly due to depreciation. (see Table 2 for additional information).
• The City’s net pension liability and deferred inflows of resources related to pension decreased $2.2 million from a total of $65 million to $62.8 million due to adjustments in the most recent actuarial reports prepared by CalPERS. See Note 7 of the Notes to Financial Statements for details.
FUND LEVEL:
• The City’s governmental funds reported combined fund balances of $45.1 million, an increase of $8.3 million compared to the prior year of $36.8 million. The Enterprise Funds’ net position increased by $3.5 million to $31.1 million from prior year of $27.6 million, and the Internal Service Funds' net position decreased by $1.0 million to $3.7 million from prior year of $4.7 million. .
• During FY2021-22, the City performed a revenue accrual and fund balance reconciliation. As a result, the beginning general fund balance, the housing successor special revenue fund, and the beginning net position of the sewer utility enterprise fund, and the successor agency private trust fund were restated by ($655,644), $362,317, $1,095,458 and ($803,744) respectively. This resulted in net change in fund balances of ($293,027) for governmental activities and $1,095,458 for business type activities respectively. Please see Note 11C of the Notes to Financial Statements for details.
7 City of Pacifica
Management’s Discussion and Analysis, Continued
For the year ended June 30, 2022
• The General Fund's assets exceeded its liabilities resulting in an ending fund balance of $16.3 million, a decrease of $0.2 million from the prior year. Of the ending fund balance, $3.8 million is non-spendable, $0.3 million restricted, and $4.8 million has been assigned and intended to be used for specific purposes. The unassigned portion of the fund balance of $7.4 million is available and may be used to meet the government’s ongoing obligations to citizens and creditors. • The total assets of the Business-type activities – Enterprise Funds (Sewer and Beach Parking Funds) of the City exceeded its total liabilities at the close of the most recent fiscal year by $31.1 million, an increase of $3.5 million primarily due to the prior year adjustment of revenue accrual of $1.1 million and an approved increase in sewer service charges of $2.4 million. • The net position of internal service fund was $3.7 million, a decrease of $1.0 million from a balance of $4.7 million in the prior fiscal year. Total operating expenses exceeded total operating revenues due to increases in insurance premiums and personnel cost.
OVERVIEW OF THE ANNUAL COMPREHENSIVE FINANCIAL REPORT
This comprehensive annual financial report comprises of six parts to help the readers develop a complete understanding of the City’s financial activities:
1) Introductory section which includes the Transmittal Letter, city council organization chart and city executive staff;
2) Management’s Discussion and Analysis (this part);
3) Basic Financial Statements;
4) Required Supplementary Information;
5) Other supplementary Information;
6) Statistical Information.
The Basic Financial Statements consist of three components: 1) Government-wide financial statements; 2) Fund financial statements; and 3) Notes to the basic financial statements.
The Government-Wide Financial Statements – These statements include the Statement of Net Position and Statement of Activities. These statements provide a broad overview of the City’s finances, presented in a manner similar to private-sector companies.
The Statement of Net Position presents complete information on the City’s assets and deferred outflows of resources and liabilities and deferred inflows of resources, with the difference reported as net position.
Changes in the net position that occur over time may serve as an indicator of the City’s financial position, whether it is improving or deteriorating.
The Statement of Activities presents information showing how the City’s net position changed during the current fiscal year. All changes in net position are reported using the “accrual basis of accounting.” Changes are reported when the underlying event giving rise to the changes occurs, regardless of the timing of the related cash flows. Thus, revenue and expenses are reported in this statement for some items that will result in cash flows in future fiscal periods, such as revenues related to uncollected taxes or earned but unused vacation leave.
The government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenue (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 City's governmental activities consist of general government, public safety, public works, parks, beaches and 8 City of Pacifica
Management’s Discussion and Analysis, Continued
For the year ended June 30, 2022
recreation, and community development. The business-type activities of the City include sewer utility and beach parking.
The government-wide financial statements can be found on pages 25-27.
The Fund Financial Statements – A fund is a grouping of related accounts that are used to maintain control over resources that have been segregated for specific activities or objectives. The City uses fund accounting to ensure and demonstrate compliance with finance-related legal and accounting requirements. The City’s funds can be divided into three categories: governmental, proprietary and fiduciary.
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 the City’s near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the City’s near-term financing decisions. Both the Governmental Funds Balance Sheet and the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental activities and governmental funds.
The City has four major governmental funds: General, Disaster Accounting, General Capital Improvement, and Debt Service Fund. Information is presented separately in the Governmental Funds Balance Sheet and the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances for these funds. Financial information for the remaining governmental funds is combined into a single, aggregated presentation called Other Governmental Funds. Individual fund data for each of these non-major governmental funds is provided by combining statements located elsewhere in the report.
The governmental fund financial statements can be found on pages 28-34 of this report.
Proprietary funds are used to account for services and activities for which a fee is charged to customers in exchange for City provided goods or services. Proprietary funds use the “economic resources” measurement focus, which concentrates on how transactions and events have affected the fund’s total economic resources.
The City maintains two different types of proprietary funds.
Enterprise Funds: These are funds that are used to report business-type activities in the governmental-wide financial statements. The City has two enterprise funds: Sewer and Beach Parking.
Internal Service Funds: These funds are used to allocate costs internally among the City’s functions. The City uses internal service funds to account for the maintenance and replacement of its fleet and rolling stock, general liability, worker’s compensation, and dental. These funds are included in the governmental activities of the government-wide financial statements because their activities support governmental programs. The internal service funds are then combined into a single, aggregated presentation in the proprietary fund financial statements. Individual data for the internal services funds is provided in the form of combining statements.
The proprietary fund financial statements can be found on pages 35-39 of this report. 9 City of Pacifica
Management’s Discussion and Analysis, Continued
For the year ended June 30, 2022
Fiduciary funds are used to account for financial resources held for the benefit of parties outside the City government. The City holds these funds in a custodial capacity or as an agent for individuals, private organizations, or other governmental units. Fiduciary funds are not reflected in the government-wide financial statements because the resources of these funds are not available to support the City’s governmental activities.
The Successor Agency to the City of Pacifica Redevelopment Agency Trust Fund was created as a result of the California Supreme Court decision on December 29, 2011, upholding ABx1 26, which eliminated all redevelopment agencies in California and created a process for winding down their operations. Trust funds report an “income statement” referred to as a Statement of Changes in Fiduciary Net Position.
The fiduciary fund financial statement can be found on pages 40-42 of this report.
Notes to the Financial Statements – The notes provide additional detail essential to a complete understanding of the information provided in the government-wide and fund financial statements. The notes to the basic financial statements can be found starting on page 43 of this report.
The next Required Supplementary Information section of the report provides a budgetary comparison for the major governmental funds. Pension related schedules could be found here. Required supplementary information can be found on page 92-103 of this report.
The Other supplementary information section contains the combining and individual fund statements and schedules which provide information for non-major governmental funds and the internal service funds, all of which are presented immediately after the required supplementary information. Other supplementary information can be found on page 92-103 of this report.
Finally, the Statistical information provides readers last 10 fiscal years information such as net position, change in net position, fund balance in governmental funds, assessed values, direct and overlapping property taxes, principal property taxpayers City of Pacifica has, demographic and economic statistics, principal employers, operating indicators, and capital assets by function.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
Statement of Net Position
Net position may serve over time as a useful indicator of the City’s financial position. As noted earlier in the financial highlights, Pacifica’s total net position was $84.4 million as of June 30, 2022, representing an increase of $11.0 million over the prior year of $73.4 million. This increase resulted from the following: an increase in total assets of $11.8 million, primarily due to a receipt of $4.6 million ARPA funds and $4.0 million new loan proceeds for the Civic Center remodel project; a decrease of deferred outflows of $0.9 million; a decrease of liabilities of $24.1 million and an increase of deferred inflows of $24 million as a result of adjustments provided by CalPERS Actuarial reports. Assets and deferred outflows of resources as of June 30, 2022, were $229.7 million, reflecting a 5.0% increase from the prior year. Total assets increased mainly from the large increase in cash and investment of $20 million offset by a decrease in other assets of $7.6 million. Liabilities and deferred inflows stayed relatively flat at $145.3 million as of FY2022 compared with $145.3 million as of FY2021 (Table 1).
As of June 30, 2022, the City reported positive balances in all categories of net position for the government as a whole except for unrestricted net position. 10 City of Pacifica
Management’s Discussion and Analysis, Continued
For the year ended June 30, 2022
The largest portion of the City’s net position is its net investment in capital assets totaling $95.6 million.
Capital assets are the aggregate value of land, buildings, and improvements that are used to provide services and are reported net of any related debt used to acquire those assets that are still outstanding. Consequently, these assets are not available for future spending. Although the City’s investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay these debts must be provided from other sources since the capital assets cannot be used to liquidate these liabilities.
The City’s restricted net assets of $23.0 million represent resources that are subject to external restrictions on how the funds may be used, such as constructing specified capital projects, debt service, or other community programs.
The remaining balance in unrestricted net position of negative $34.3 million is primarily the result of the implementation of GASB Statements No. 68, 71, and 75 pension and other post -employment benefits related liability accruals. It is important to note that these long-term obligations are based on actuarial estimates and do not represent a liability due and payable immediately. Please refer to the Note 7 to basic financial statements for more information about the impact of the implementation of these statements.
FY22 FY21 FY22 FY21 FY22 FY21
Cash and investments 46.0 $ 33.5 $ 11.3 $ 3.9 $ 57.4 $ 37.4 $ Other assets 5.8 9.0 1.0 5.4 6.8 14.4
Capital assets 87.5 88.6 62.6 64.2 151.1 151.7
Total assets 130.0 140.3 73.5 74.9 215.3 203.5
Deferred Outflows of Resources 13.4 14.3 1.0 1.0 14.4 15.3 Current liabilities 5.8 4.0 7.4 3.3 11.4 9.1
Non-current liabilities 88.8 65.2 40.6 43.4 105.8 132.2 Total liabilities 94.6 72.6 44.6 46.7 117.2 141.3
Deferred Inflows of Resources 27.8 0.2 3.8 0.2 28.0 4.0 Net Position
Net investment in capital
assets 71.5 69.5 26.1 25.1 96.6 95.6
Restricted 17.3 23.0 17.3 23.0
Unrestricted (42.9) (39.3) 2.5 5.0 (34.3) (40.4)
Total net position $ 53.3 $ 45.8 $ 31.1 $ 27.6 $ 84.4 $ 73.4 Business-Type
Activities Totals
Table 1
Comparative Statement of Net Position
Activities
Governmental
(In Millions)
11 City of Pacifica
Management’s Discussion and Analysis, Continued
For the year ended June 30, 2022
Statement of Activities
The Statement of Activities provides information about all the City’s revenue and expenses, with an emphasis on measuring net revenues or expenses in each of the City’s programs and explains in detail the change in Net Position for the year.
Governmental activities increased the City’s net position by $7.7 million with a total net position of $53.3 million at the end of the fiscal year. Business type activities increased the City’s net position by $2.4 million with a total net position of $31.1 million at the end of the fiscal year. (Table 2) Revenues FY22 FY21 FY22 FY21 FY22 FY21
Program revenues
Charges for service $ 5.3 6.3 $ 19.5 $ 16.6 $ 25.9$ 21.9$ Operating contributions & grants 8.6 3.5 3.5 8.6
Capital grants 2.3 2.4 2.3 2.4
Total program revenues 11.1 19.5 17.3 16.6 36.8 27.7
General revenues
Taxes:
Property 15.1 14.4 15.1 14.4
Sales and use 2.9 3.1 2.9 3.1
Franchise 1.7 1.8 1.7 1.8
Other taxes 10.4 9.0 10.4 9.0
Motor Vehicle In Lieu 2.6 4.4 2.6 4.4
Investment Earnings - 0.1 0.3 0.3 0.4 0.3
Miscellaneous 0.2 0.3 0.2 0.3
Total general revenues 31.5 34.5 0.3 34.8 0.3 31.8
Total revenues 42.6 19.8 51.8 16.9 71.6 59.5
Expenses
Governmental Activities
General government 7.1 7.5 7.1 7.5
Public Safety 21.1 18.6 21.1 18.6
Community Development 3.0 3.2 3.0 3.2
Public Works 7.7 9.3 7.7 9.3
PBR 5.4 4.9 5.4 4.9
Interest on long-term debt 1.0 1.0 1.0 1.0
Business-Type Activities - -
Sewer 12.9 16.3 16.3 12.9
Beach Parking 0.7 0.6 0.7 0.6
Total expenses 45.3 16.9 44.6 13.6 61.5 58.9
Change in net position before transfers (2.7) 7.2 2.9 3.3 10.2 0.6 Transfers 0.5 (0.3) (0.5) 0.3 - -
Change in net position (2.9) 7.7 2.4 3.6 10.2 0.6
48.7 28.7 45.5 24.0 74.2 72.7
Net position - ending 53.3 $ 45.8 $ 31.1 $ 27.6 $ 84.4$ 73.4$ Table 2
Statement of Activities
(In Millions)
Governmental
Activities
Net position - beginning, as restated
(Note 11C)
Business-Type
Activities Total
12 City of Pacifica
Management’s Discussion and Analysis, Continued
For the year ended June 30, 2022
The City’s total revenues were $71.6 million for the year ended June 30, 2022, an increase of $12.1 million from previous fiscal year. Program revenue for both Governmental and Business-type activities increased by $9.1 million from $27.7 million to $36.8 million. Revenues from all taxes increased by $1.0 million from $28.7 million to $29.7 million. Other revenues lead to an additional increase of $2 million to the total revenue. A large part of program revenue increase is due to ARPA revenue of $4.6 million received, charge for services of $1 million increase from governmental activities as the COVID situation improves and many city programs are back to normal and charge for services of $2.9 million increase from Business-type activities as a result of rate adjustment.
General revenues and transfers from all sources relating to governmental activities increased by $3.7 million or 12.0% to $35.0 million. The increase in general revenues was the result of the state partially fulfilling their obligations for VLF backfill resulting in $1.8 million increase in this category, other taxes of $1.4 million increase and transfer in of $0.8 million increase.
The City’s total program expenses were $61.5 million, an increase of $2.6 million over the prior fiscal year, primarily due to the increase in Business-type activities – sewer operation that includes $3.4 million from annual depreciation expenses. from governmental activities decreased by $0.7 million or
1.6% to $44.6 million for the fiscal year. Other categories stayed about consistent with the prior year. (Table 2)
Governmental Activities Revenues. In FY2022, the City received nearly 57% of its revenue from taxes: 28% from property taxes, 20% from other taxes, 6% from sales taxes, and 3% from franchise taxes. The City also received 12% from charges for services, 17% from operating contribution and grants, 5% from capital grants, and 8% from Motor Vehicle in Lieu.
Governmental Activities Expenses. In FY2022, 81% of expenses were attributable to direct services such as Public Safety, Public Works, Parks Beaches and Recreation, and Community 13 City of Pacifica
Management’s Discussion and Analysis, Continued
For the year ended June 30, 2022
Development with percentages of 42%, 21%, 11% and 7% respectively. This was consistent with 82% in the prior year. Total expenditures were $44.6 million in FY2022 which was $0.7 million less than $45.3 million in the prior year.
The majority of these governmental activities are financed from City taxes. However, funds collected in program revenues for these various activities served to offset the departmental spending associated with some services. Governmental expenses, which totaled $44.6 million, were offset in part by program revenues for governmental activities of $17.3 million, an increase from $11.1 million in the prior year. These program revenues included $6.3 million in charges for services, $8.6 million in operating grants and contributions, and $2.4 million in capital grants and contributions and reflect the City’s recovery from the pandemic. Charges for services include traffic safety fines, plan check fees, building inspection fees, other charges related to new construction, and fees charged for parks, beaches, and recreational events. Operating grants and contributions include amounts that can only go toward operations-related expenses, while capital grants and contributions are required to go toward capital investments. (Table 3)
14 City of Pacifica
Management’s Discussion and Analysis, Continued
For the year ended June 30, 2022
Business-type Activities
The net position of the City’s business-type activities increased by $2.4 million from a restated beginning net position of $28.7 million. In the fiscal year 2021-22, enterprise operations produced total operating revenues of $19.5 million, a $2.5 million increase from the prior year. The increase in revenue was mostly from the previously approved increase in sewer utility rates. (Table 2) Business-type expenses totaled $16.9 million at the end of the fiscal year. Operating expenses for these activities increased by $3.3 million or 24.1% from the prior year. The increase was attributable to larger depreciation expense. (Table 2)
Unlike the government activities, program revenues cover total expenses in the business-type activities, with no contribution from City taxes. The City is able to adjust sewer and parking rates to cover expenditures and future liabilities.
FINANCIAL ANALYSIS OF THE CITY’S MAJOR FUNDS
Governmental funds
The focus of the City’s governmental funds is to provide information on near-term inflows, outflows and balances of spendable resources. Such information is useful in assessing the financial requirements and stability of the City. 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.
In FY2022, the City’s governmental funds reported total fund balances of $45.1 million, an increase of $8.3 million from $36.8 million (restated) from FY2021. The increase is a result of the following factors: a decrease of $0.2 million in General Fund, an increase of $1.6 million in Disaster Accounting Fund, an increase of $3.4 million in General Capital Improvement Fund, an increase of $5.1 million in Debt Service Fund and a decrease of $1.6 million in all other governmental funds. (Table 4) The General Fund, General Capital Improvement Fund, Disaster Accounting Fund, and the Debt Service Fund are considered major funds and are reported separately in the basic Financial Statements.
FY22 FY21 FY22 FY21 FY22 FY21
General government 5.9 $ 0.4 $ 7.48 $ $ 7.1 (1.6)$ $ (6.7) Public Safety 1.9 1.8 21.1 18.6 (16.8) (19.2)
Community development 3.2 2.7 3.0 3.2 (0.6) 0.2
Public works 3.5 3.6 7.7 9.3 (5.8) (4.2)
Parks, beaches, and recreation 3.4 2.1 5.4 4.9 (1.6) (3.3) Interest on long-term debt - - 1.0 1.0 (1.0) (1.0)
$ 17.3 $ 11.1 $ 44.6 $ 45.3 $ (27.3) $ (34.2)
Program Revenues Operating Expenses Net Revenue (Expense) Table 3
Governmental Activities
Program Revenues and Net Revenue (Expense) From Services for fiscal year ended June 30, 2022 (In Millions)
15 City of Pacifica
Management’s Discussion and Analysis, Continued
For the year ended June 30, 2022
General Fund
The General Fund is the City’s main operating fund. General Fund revenues totaled $42.5 million in the fiscal year 2021-22, a $6.8 million or 19.1% increase from the prior year primarily due to a receipt of one-time American Rescue Plan Act (ARPA) funds. Expenditures totaled $38.1 million, a $4.1 million or 12.1% increase from the prior year. The General Fund received transfers in of $1.1 million from the Street Construction Fund, Gas Tax Fund and NPDES stormwater Fund as reimbursement for salaries and benefits related expenditures. The General Fund also transferred out $5.1 million to General capital improvement fund, debt service fund, general liability insurance Fund for capital projects, debt service and insurance funding, including a one-time $3 million contribution towards the Civic Center improvement project. Detailed notes on the transfers can be found in the Interfund Transactions section - Note 9 in the Notes to the Basic Financial Statements.
The General Fund balance as of June 30, 2022 was $16.3 million, $.5 million more than prior fiscal year of $15.8 million (as restated). The City Council assigned $4.8 million as reserves for specific purposes as described in Note 11 of the Notes to the Basic Financial Statements. A total of $7.4 million of the General Fund balance remains unassigned.
Disaster Accounting Fund
The Disaster Accounting Fund accounts for both revenues and expenditures associated with catastrophic events occurring in the City.
The Disaster Accounting Fund had revenues of $2.1 million, which is a decrease of $0.1 million from the prior year. This revenue is from San Mateo County tax remittance for excess ERAF (Educational Revenue Augmentation Fund). The total expenditures in the Disaster Accounting fund decreased by $0.1 million due to the scheduled reduced allocation for the seawall emergency repairs project. The fund balance improved by $1.6 million to $6.1 million due to higher ERAF revenues allocated to the Disaster Accounting Fund per City policy previously approved by Council.
Fund Balance Fund Balance Net change in
FY22 FY21 Fund Balance
General Fund 16.3 $ 16.5 $ (0.2) $
Disaster Accounting Fund 6.1 4.5 1.6
General Capital Improvement Fund 6.7 3.3 3.4
Debt Service Fund 5.3 0.2 5.1
Other Governmental Funds 10.7 12.3 (1.6)
Total Governmental Funds $ 45.1 $ 36.8 $ 8.3
Table 4
Total Governmental Funds
(In Millions)
16 City of Pacifica
Management’s Discussion and Analysis, Continued
For the year ended June 30, 2022
General Capital Improvement Fund
The General Capital Improvement Fund accounts for funds used for capital improvements and significant maintenance projects. The City capitalizes equipment with a cost basis of at least $5,000, and that has an estimated useful life in excess of one year. Structures, improvements, and infrastructure are also capitalized. All capital assets are valued at historical cost. For more information on capital assets, please refer to Note 4 on the Notes to the Basic Financial Statement.
The General Capital Improvement Fund received revenues of $1.9 million, which was an increase of $1.9 million. The increase was due to a one-time allocation of $1.5 million from ERAF fund and an insurance reimbursement of $0.3 million towards the civic center remodel project. A total of $3.8 million was transferred in from other funds to support ongoing investments in infrastructure and construction costs to fund previously approved projects, including transfers from general fund of $3.0 million and Sewer Fund of $0.5 million.
General Capital Improvement Fund expenditures totaled $2.3 million, which is an increase of $1.0 million from the prior year. The entire fund balance of $6.7 million is restricted for the ongoing construction of capital projects. (Table 4)
Debt Service Fund
The Debt Service Fund is used to account for resources used to repay general long-term debt and to record the payment of principal and interest as well as other expenditures related to debt administration. This Fund balance as of June 30, 2022 was $5.3 million (Table 4), an increase of $5.1 million from prior fiscal year of $0.2 million. The main reason of increase of the fund balance is a result of $4.0 million loan for the Civic Center Project and a transfer in from general fund of $1.9 million for the payments of debts, which was an increase of $1.3 million compared with prior fiscal year of $0.6 million transfer in from general fund to account for the scheduled increase in debt payments including 2016 COP bonds and 2019 Pension Obligation Bonds. The detailed description of the City’s outstanding debt and long-term obligations associated with each issue can be found in Note 5 in the Notes to the Basic Financial Statements.
Proprietary Funds
The City’s proprietary fund statements provide the same type of information found in the governmentwide financial statements. The City’s enterprise funds include Sewer facility fund and Beach parking fund, while the internal service funds include Self Insurance Dental, Self Insurance Worker’s Comp, Self Insurance General Liability, Motor Pool Operations, Motor Pool Replacement funds and Fire Equipment Replacement Fund.
Sewer Utility Enterprise Fund
The Sewer Utility Enterprise Fund accounts for the operation and maintenance of the City’s wastewater system, including the operating costs of the wastewater collection system and water recycling plant. The Sewer Utility Fund continues to show healthy fiscal condition as in prior years.
There was an increase of $2.4 million in the fund’s overall net position compared to the prior year (Table 5), but a large portion of the net position (84.0%) is related to the City’s investment in capital assets.
17 City of Pacifica
Management’s Discussion and Analysis, Continued
For the year ended June 30, 2022
The fund’s net revenue increased by $2.9 million from the prior year, mostly the result of sewer rate adjustment to meet future needs of the sewer enterprise. Total operating expenses of the Sewer Utility Fund increased by $3.3 million, largely due to an increase in depreciation expense compared with FY2021.Transfer out goes to Debt service fund for the 2019 Pension Bonds Pool share, NPDES fund and General Capital Improvement fund totaled $0.5 million. The result of net operating income and transfer out leads to $2.4 increase to the net position.
Internal Service Funds
The Internal Service Funds represent funds set aside to cover employee dental expenses and insurance deductibles for liability and worker’s compensation. In addition, funds are also set aside to support replacement purchases and the day-to-day operation and maintenance of city vehicles and equipment. The internal service funds as a whole experienced a decrease in net position of $1.0 million from the prior year primarily due to the increased insurance premiums (Table 5).
GENERAL FUND BUDGETARY HIGHLIGHTS
Detailed information on budget variances can be found on page 132 in the Budgetary Comparison Schedule General Fund. The adopted fiscal year 2021-22 General Fund budget assumed minimal growth in revenue. Thus ongoing expenditures were also contained within the forecasted revenue in order to maintain a structurally balanced budget.
Total General Fund revenues were $42.5 million, which is $2.8 million more than the original budget.
Total expenditures were $38.1 million, which is $0.9 million under budget.
The most significant differences between estimated and actual results were as follows:
• Property tax was over budget by $0.1 million.
• Other taxes which include transient occupancy, business license, utility users, and cannabis taxes along with sales tax, franchise tax outperform the final budget by $0.5 million.
FY22 FY21 FY22 FY21
Operating revenues 19.5 $ 16.6 $ 2.5$ 2.2$
Operating expenses 15.3 12.0 3.6 3.1
Operating income (loss) 4.2 4.6 (1.1) (0.9)
Non-operating revenues (expenses) (1.3) (1.3) 0.0 0.0
Net income (loss) before
contributions and transfers 2.9 3.3 (1.1) (0.9)
Transfers in (out) (0.5) 0.3 0.1 0.1
Change in net position $ 2.4 $ 3.6 $ (1.0) $ (0.8)
Table 5
Change in Fund Net Position - Proprietary Funds for the year ended June 30, 2022 (In Millions)
Total Enterprise Funds Total Internal Service Funds
18 City of Pacifica
Management’s Discussion and Analysis, Continued
For the year ended June 30, 2022
• Charges for current services didn’t materialize as expected. The final budget was a little too optimistic about the reopening and the increased need for program services for residents, the actual revenue performed under budget by $0.4 million.
• General fund total expenditures were under budget by $0.9 million, which was a favorable variance. • Expenditures in general government were over budget by $0.5 million due to legal fees increase for various needs such as projects, litigation and personnel matters. • Expenditures in public safety were over budget by $0.3 million because of salaries, benefits and overtime costs.
• Expenditures in other operating departments such Planning, Public Works, and Parks Beaches and Recreations were under budget by $0.9 million, $0.4 million and $0.3 million respectively primarily due to salary savings resulted from the challenging recruitment market and many positions remaining vacant for the big part of the year.
CAPITAL ASSETS AND LONG-TERM DEBT ADMINISTRATION
Capital Assets
As reported in the Statement of Net Position, capital assets for the governmental and business-type activities totaled $151.2 million on June 30, 2022, decreased by $0.5 million from the prior fiscal year.
The investment in capital assets includes land, construction in progress, buildings, improvements, machinery and equipment, and infrastructure. The City records its capital assets at historical cost or estimated historical cost if actual historical cost is not available. The City depreciates all its capital assets on a straight-line basis over their estimated useful lives. The City’s capita assets are summarized in Table 6. Additional information on capital assets may be found in Note 4 in the Notes to the Basic Financial Statements.
The total capital assets slight decrease of $0.5 million is a result of $1.1 million increase in governmental activities and $1.6 million decrease in the business-type activities is mostly due to an adjustment in construction in progress.
FY22 FY21 FY22 FY21 FY22 FY21
Governmental activities
Land 40.5 $ 40.5$ $ 4.0 4.0 $ 44.5 $ 44.5$
Construction in progress 9.1 1.8 3.5 6.5 8.3 12.6
Building and improvements 16.6 16.3 77.6 77.6 94.2 93.9 Machinery and equipment 3.5 3.5 4.2 3.9 7.7 7.4
Collection Systems 44.9 48.8 48.8 44.9
Vehicles 8.4 8.5 8.5 8.4
Infrastructure 52.2 46.3 52.2 46.3
Less accumulated depreciation (39.2) (36.5) (73.8) (69.7) (113.0) (106.2) Totals $ 88.6 87.5$ $ 62.6 $ 151.2$ 151.7$ 64.2
Total
Table 6
Capital Assets at June 30, 2022
(In Millions)
Governmental
Activities
Business Type
Activities
19 City of Pacifica
Management’s Discussion and Analysis, Continued
For the year ended June 30, 2022
Long Term Debt
On June 30, 2022, the City had long-term debt obligations of $64.8 million. Governmental Activities had debt outstanding in the amount of approximately $27.1 million, and the business-type activities had approximately $37.7 million. The total reduction of $0.4 million from the prior year was due to regular debt service retirement of $4.5 million and a $4 million Civic center loan originated in FY2022.
Additional information on long-term debt activity may be found in Note 5 of the Notes to the Basic Financial Statements.
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES
According to the June 2022 report from the California Employment Development Department (EDD), California’s unemployment rate improved and has dropped from 8.5% in June 2021 to 4% in June 2022 as the state’s employers gained 75,000 payroll jobs after regaining all these jobs lost during the March and April 2020 due to the COVID-19 pandemic.
Like most public agencies, the City of Pacifica is gradually recovering from the abrupt economic impact induced by the pandemics and expects to return to pre-pandemic revenue and service level by the end of FY2023-2024. The current budget is the year of transition as we will focus on restoring and revising city services to adapt to the community needs and prepare for a changing future.
Pacifica’s unemployment is 2.2% in June 2022, compared with 12.9% record high in April 2020 and record low of 1.2% in December 2019.
Below are some key points/assumptions applied to the FY2022-2023 budget (please refer to budget book FY2022-23).
Revenue Projections: Property tax revenues are projected to increase by 4.2% over last year’s midyear adjusted tax revenue amounts as property sales have remained strong despite the pandemic.
A modest 3.3% increase in sales tax is projected for FY 2022-23. Pacifica’s mix of sales tax types combined with an increase in online sales has kept this revenue category modestly resilient during the pandemic. Hotels and Short-term rentals suffered during the pandemic but are projected to bounce back during FY 2022-2023. Other taxes, such as utility users tax, franchise tax, and business license tax, are projected a 2% increase compared to FY 2021-22 mid-year adjusted. One concern in this category is the Vehicle License Fee shortfall of approximately $690K the state owes the City per the San Mateo County Controller’s office, the backfill for which can lag up to two years.
FY22 FY21 FY22 FY21 FY22 FY21
2019 Pension Obligation Refunding Bond 7.8 $ 8.6 $ 1.0 $ 1.1 $ 8.8 $ 9.7 $ 2016 Certificate of Participation 15.2 16.0 15.2 16.0
Capital Lease Payable 4.1 0.2 4.1 0.2
2014 Wastewater Revenue
Refunding Bond 7.4 7.2 7.4 7.2
2017 Wastewater Revenue Bond 25.5 25.4 25.4 25.5
Notes Payable - 4.1 6.4 4.1 6.4 -
Total Debt Outstanding $ 24.8 27.1 $ 37.7 $ 40.4 $ 64.8 $ 65.2 $ Total
Table 7
Outstanding Debt at June 30, 2022
(In Millions)
Governmental
Activities
Business-type
Activities
20 City of Pacifica
Management’s Discussion and Analysis, Continued
For the year ended June 30, 2022
For FY 2022-23, the budget is utilizing approximately $4.6 million in one-time American Rescue Plan Act (ARPA) funds to help replenish the revenue losses, balance the budget, and avoid service reductions. Combined ongoing and one-time revenues for the General Fund are projected to be flat from last year’s mid-year adjusted revenues. The General Fund budget for FY2022-2023 is $47.3 million in revenue and $47.3 million in expenditures. It will generate a small structural surplus of $3,000 in the FY2022-2023 General Fund budget.
Expenditures: Salaries and Benefits projections assume a 2% of Cost of Living Adjustment.
Materials, supplies and Maintenance category assumes a very modest 1.5% increase that partially accounts for inflation. Contractual services category assumes a 2.5% increase. The total General Fund expenditures of $47.3 million shows $3.5 million or 8% increase in spending over the revised FY2021-2022 Budget, which includes the General Fund’s one-time contribution towards the capital improvement program of $655,000. The increase in expenditures in the coming year is primarily due to the budget assumptions used to develop the base budget as well as approved budget enhancements, including additional limited-term staffing to meet council’s current and upcoming priorities, which are described in detail in the Executive Summary section of the budget book.
Sewer Rate Adjustments: The most recent rate study for the sewer utility was completed in 2017.
Soon after, the City Council approved an ordinance that enacted a five-year rate structure with a maximum annual rate increase for the City’s wastewater program service charges from fiscal year 2017-18 through 2021-22. The revenues generated by the rate structure are the main source of revenue for the wastewater program and address its future capital and financial needs. The fiscal year 2022-23 rate increase was 3.5%.
Staff will continue monitoring the City’s economic conditions and continue to work with the City Council and community to address any current and potential challenges that may lay ahead. To this end, staff will build or revise the budget assumptions based on any new information as it becomes available. This work may include identifying operational opportunities, assessing appropriate fee structure, pursuing acceptable economic development opportunities, and advising on alternative revenue options available to the City and the community to boost economic recovery and ensure the continuing high quality of life for the residents and visitors of Pacifica.
REQUEST FOR INFORMATION
This report is designed to provide citizens, taxpayers, investors, and creditors with a general overview of the City's finances and to show the City’s accountability for the money it receives.
Questions concerning any of the information provided in this report or requests for additional financial information should be directed to:
City of Pacifica
Finance Department
Attn: Yulia Carter, Assistant City Manager/Administrative Services Director 540 Crespi Drive, Pacifica, California 94044.
An electronic version of this financial report is available at the City’s website at http://www.cityofpacifica.org.
21 This Page Intentionally Left Blank
CITY OF PACIFICA
STATEMENT OF NET POSITION
Governmental Business-Type
Activities Activities Total
ASSETS
Cash and investments (Note 3) $38,419,438 $7,310,530 $45,729,968 Cash and investments with fiscal agents (Note 3) 4,600,228 4,030,189 8,630,417 Restricted cash and investments (Note 3) 3,001,260 3,001,260 Taxes receivable 230 230
Accounts receivable, net of allowance 2,560,714 2,560,714 Interest receivable 13,901 13,901
Prepaid items 178,394 379,264 557,658
Inventories 18,715 6,597 25,312
Receivable from successor agency (Note 10) 3,641,599 3,641,599 Internal balances (Note 9) (649,938) 649,938
Capital assets, not being depreciated (Note 4) 46,933,938 5,768,316 52,702,254 Capital assets, being depreciated,
net of accumulated depreciation (Note 4) 41,625,744 56,793,548 98,419,292 Total Assets 140,344,223 74,938,382 215,282,605
DEFERRED OUTFLOWS OF RESOURCES
Deferred charge on refunding of debt 387,025 207,873 594,898 Related to OPEB (Note 6) 1,478,114 31,401 1,509,515
Related to pension (Note 7) 11,537,495 719,521 12,257,016 Total Deferred Outflows of Resources 13,402,634 958,795 14,361,429
LIABILITIES
Accounts payable 3,053,683 1,238,768 4,292,451
Interest payable 320,415 75,519 395,934
Refundable deposits 1,211,759 1,211,759
Unearned revenue 6,500 6,500
Claims payable due within one year (Note 8) 304,204 304,204 Compensated absences (Note 1M):
Due within one year 922,784 185,817 1,108,601
Due in more than one year 696,136 128,252 824,388
Long term debt (Note 5):
Due within one year 1,563,816 2,552,671 4,116,487
Due in more than one year 25,551,930 35,120,013 60,671,943 Net OPEB Liabilities, due in more than one year (Note 6) 7,481,035 1,517,682 8,998,717 Net pension liabilities, due in more than one year (Note 7) 31,514,646 3,788,519 35,303,165 Total Liabilities 72,626,908 44,607,241 117,234,149
DEFERRED INFLOWS OF RESOURCES
Related to OPEB (Note 6) 390,910 112,275 503,185
Related to pension (Note 7) 27,441,602 94,801 27,536,403 Total Deferred Inflows of Resources 27,832,512 207,076 28,039,588 NET POSITION (Note 11)
Net investment in capital assets 69,492,549 26,098,298 95,590,847 Restricted for:
PARS Pension Trust 342,510 342,510
Construction of capital assets 7,861,392 7,861,392
Streets, highways, and other related purposes 3,322,713 3,322,713 Parks, beaches and recreation 4,878,774 4,878,774
Stormwater operations 324,165 324,165
Public safety 6,314,177 6,314,177
Unrestricted (39,248,843) 4,984,562 (34,264,281)
Total Net Position $53,287,437 $31,082,860 $84,370,297
See accompanying notes to financial statements
JUNE 30, 2022
23 CITY OF PACIFICA
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2022
Operating Capital
Charges for Contributions Contributions
Functions/Programs Expenses Services and Grants and Grants Governmental Activities:
General government $7,481,370 $135,929 $5,744,141
Public safety 18,632,393 773,713 1,038,895 $9,541
Community development 3,243,238 2,520,754 150,489
Public works 9,326,203 1,059,275 150,636 2,364,681
Parks, beaches and recreation 4,928,418 1,859,921 1,514,023 Interest on long-term debt 969,550
Total Governmental Activities 44,581,172 6,349,592 8,598,184 2,374,222 Business-type Activities:
Sewer 16,258,603 18,965,244
Beach Parking 620,511 559,195
16,879,114 19,524,439
$61,460,286 $25,874,031 $8,598,184 $2,374,222
Taxes:
Other taxes
Motor vehicle in lieu, unrestricted
Investment earnings
Miscellaneous
Transfers
Total General Revenues and Transfer
Change in Net Position
Net Position at beginning of year, as restated (Note 11C) Net Position at end of year
See accompanying notes to financial statements
Sales and use taxes
Franchise taxes
Total Business-type Activities
Total
Program Revenues
General Revenues:
Property taxes
24 Net (Expense) Revenue and
Changes in Net Position
Governmental Business-type
Activities Activities Total
($1,601,300) ($1,601,300)
(16,810,244) (16,810,244)
(571,995) (571,995)
(5,751,611) (5,751,611)
(1,554,474) (1,554,474)
(969,550) (969,550)
(27,259,174) (27,259,174)
$2,706,641 2,706,641
(61,316) (61,316)
2,645,325 2,645,325
(27,259,174) 2,645,325 (24,613,849)
14,445,541 14,445,541
3,136,433 3,136,433
1,754,500 1,754,500
10,385,735 10,385,735
4,355,327 4,355,327
100,562 286,486 387,048
324,910 324,910
499,600 (499,600)
35,002,608 (213,114) 34,789,494
7,743,434 2,432,211 10,175,645
45,544,003 28,650,649 74,194,652
$53,287,437 $31,082,860 $84,370,297
25 CITY OF PACIFICA
GOVERNMENTAL FUNDS
BALANCE SHEET
JUNE 30, 2022
General
Disaster Capital
Accounting Improvement
Special Capital Debt
Revenue Projects Service
General Fund Fund Fund
Assets
Cash and investments (Note 3) $12,629,788 $6,212,043 $7,338,908 $1,021,645 Cash and investments with fiscal agents (Note 3) 342,510 13,415 4,244,303 Restricted cash and investments (Note 3)
Receivables:
Taxes 230
Accounts 2,194,424 57,225 12,500
Interest 13,900 1
Due from other funds 917,260
Prepaid items 126,958 51,436
Receivable from RDA successor agency (Note 10) 3,641,599 Total Assets $19,866,669 $6,269,268 $7,364,824 $5,317,384 Liabilities and Fund Balances
Liabilities:
Accounts payable $1,706,248 $180,854 $641,860
Due to other funds
Refundable deposits 1,211,759
Unearned revenue 6,500
Advance from other funds (Note 9) 649,938
Total Liabilities 3,574,445 180,854 641,860
Fund balances (Note 11):
Non-spendable 3,768,557
Restricted 342,510 6,088,414 6,722,964 $5,317,384
Assigned 4,803,631
Unassigned 7,377,526
Total Fund Balances 16,292,224 6,088,414 6,722,964 5,317,384 Total Liabilities, Deferred Inflows of
Resources and Fund Balances $19,866,669 $6,269,268 $7,364,824 $5,317,384 See accompanying notes to financial statements
26 Other
Governmental
Funds Total
$8,546,067 $35,748,451
4,600,228
3,001,260 3,001,260
230
295,042 2,559,191
13,901
917,260
178,394
3,641,599
$11,842,369 $50,660,514
$249,472 $2,778,434
917,260 917,260
1,211,759
6,500
649,938
1,166,732 5,563,891
3,768,557
11,295,423 29,766,695
4,803,631
(619,786) 6,757,740
10,675,637 45,096,623
$11,842,369 $50,660,514
27 Reconciliation of the
GOVERNMENTAL FUNDS - BALANCE SHEET
with the
STATEMENT OF NET POSITION
JUNE 30, 2022
Fund Balance - Governmental Funds $45,096,623
Amounts reported for Governmental Activities in the Statement of Net Position is different from those reported in the governmental funds because of the following:
Capital assets used in Governmental Activities are not current resources and, 86,754,289
387,025
Compensated Absences (1,575,124)
Long term debt (26,981,551)
Interest payable (320,085)
Net OPEB liabilities (7,481,035)
Net Pension Liabilities (31,514,646)
Deferred inflows related to pension and OPEB (27,832,512) Deferred outflows related to pension and OPEB 13,015,609 3,738,844
Net Position of Governmental Activities $53,287,437
See accompanying notes to financial statements
CITY OF PACIFICA
new debt or old debt whichever is shorter in the Statement of Net Position.
Internal service funds are used by management to charge costs of certain activities, such as insurance and central garage, to individual funds. The assets and liabilities of the internal service funds are included in Governmental Activities in the Statement The items below are not financial resources / (not due and payable) in the current period and, of Net Position.
therefore, are not reported in the governmental funds.
Deferred charge on refunding, net of accumulated amortization has not been reported in the governmental funds. This was capitalized and amortized over the life of the therefore are not reported in the governmental funds.
28 This Page Intentionally Left Blank
CITY OF PACIFICA
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE YEAR ENDED JUNE 30, 2022
General
Disaster Capital
Accounting Improvement
Special Capital Debt
Revenue Projects Service
General Fund Fund Fund
REVENUES
Taxes $24,284,444 $1,990,993 $1,500,000
Licenses and permits 1,026,381 52,995
Fines and forfeitures 167,612
Use of money and property 222,511 $111
Intergovernmental 10,875,321
Charges for current services 3,649,015
Recreation programs 456,080
Other 1,840,182 147,106 320,000 1,091,137
Total Revenues 42,521,546 2,138,099 1,872,995 1,091,248
EXPENDITURES
Current:
General government 7,242,859
Public safety 18,582,989
Community development 3,056,701 507
Public works 4,371,543 10,831
Parks, beaches, and recreation 4,785,683
Capital outlay 60,620 552,783 2,269,998
Debt service:
Principal 1,596,632
Interest and fiscal charges 946,574
Total Expenditures 38,100,395 563,614 2,270,505 2,543,206 4,421,151 1,574,485 (397,510) (1,451,958)
Other Financing Sources (Uses):
Proceeds from lease financing 4,000,000
Transfers in (Note 9) 1,130,919 3,820,000 2,541,941
Transfers out (Note 9) (5,105,875)
Total Other Financing Sources (Uses) (3,974,956) 3,820,000 6,541,941 446,195 1,574,485 3,422,490 5,089,983
Fund Balances -Beginning, as restated (Note 11c) 15,846,029 4,513,929 3,300,474 227,401 Fund Balances- Ending $16,292,224 $6,088,414 $6,722,964 $5,317,384 See accompanying notes to financial statements
Net Changes in Fund Balances
Excess (Deficit) of Revenues over Expenditures
30 Other
Governmental
Funds Total
$3,622,898 $31,398,335
1,079,376
167,612
1,314 223,936
347,238 11,222,559
51,251 3,700,266
456,080
178,417 3,576,842
4,201,118 51,825,006
208 7,243,067
75,607 18,658,596
15,899 3,073,107
3,760,676 8,143,050
25,379 4,811,062
279,568 3,162,969
1,596,632
946,574
4,157,337 47,635,057
43,781 4,189,949
4,000,000
800,000 8,292,860
(2,833,317) (7,939,192)
(2,033,317) 4,353,668
(1,989,536) 8,543,617
12,665,173 36,553,006
$10,675,637 $45,096,623
31 The schedule below reconciles the Net Changes in Fund Balances reported on the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances, which measure only changes in current asset and current liabilities on the modified accrual basis, with the Change in Net Position of Governmental Activities reported in the Statement of Activities, which is prepared on the full accrual basis. $8,543,617
Statement of Activities the cost of those assets is capitalized and allocated over estimated lives and reported as depreciation expense.
Capital outlay expenditures are therefore added back to fund balances 3,810,856 Depreciation expense (2,332,149)
Proceeds from issuance of long-term debt (4,000,000)
Repayment of debt principal 1,596,632
Interest expense 120,426
Amortization of loss on refunding (139,463)
The amounts below included in the Statement of Activities do not provide 20,642
Net pension liabilities (net change) 1,610,259
Net OPEB liabilities (528,074)
(959,312)
$7,743,434
See accompanying notes to financial statements
FOR THE YEAR ENDED JUNE 30, 2022
CITY OF PACIFICA
Reconciliation of the
NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS
with the
STATEMENT OF ACTIVITIES
Changes in net position of governmental activities
governmental activities.
Net Change in fund balance
issuing debt increase long-term liabilities in the Statement of Net Position. (require) the use of current financial resources and therefore are not reported The net revenues (expenses) of the internal service funds are reported with Bond proceeds provide current financial resources to governmental funds, but Repayment of bond principal is an expenditure in the governmental funds, but in the Statement of Net Position the repayment reduces long-term liabilities.
Governmental funds report capital outlays as expenditures. However, in the as revenue or expenditures in governmental funds:
Compensated absences (net change)
The internal services funds are used by management to charge costs of certain activities such as insurance and central garage, to individual funds. different because of the following:
Amounts reported for Governmental Activities in the Statement of Activities are 32 CITY OF PACIFICA
PROPRIETARY FUNDS
STATEMENT OF NET POSITION
JUNE 30, 2022
Governmental
Business-Type Activities Activities
Major Non-major Total Internal
Enterprise Fund Enterprise Fund Enterprise Service
Sewer Utility Beach Parking Funds Funds
Assets:
Current Assets:
Cash and investments (Note 3) $7,070,348 $240,182 $7,310,530 $2,670,987 Cash and investments with fiscal agents (Note 3) 4,030,189 4,030,189 Accounts receivable 1,523
Prepaid items 379,264 379,264
Inventory 6,597 6,597 18,715
Total Current Assets 11,486,398 240,182 11,726,580 2,691,225 Noncurrent Assets:
Advance to other funds (Note 9) 649,938 649,938
Capital assets, not being depreciated (Note 4) 5,768,316 5,768,316 258,774 Capital assets, being depreciated, net
of accumulated depreciation (Note 4) 56,747,109 46,439 56,793,548 1,546,619 Total Noncurrent assets 63,165,363 46,439 63,211,802 1,805,393 Total Assets 74,651,761 286,621 74,938,382 4,496,618
Deferred Outflows of Resources
Deferred charge on refunding (Note 5) 207,873 207,873
Related to OPEB (Note 6) 31,401 31,401
Related to pension (Note 7) 719,521 719,521
Total Deferred Outflows of Resources 958,795 958,795
Current Liabilities:
Accounts payable 1,235,449 3,319 1,238,768 275,249
Interest payable 75,519 75,519 330
Claims payable due in one year (Note 8) 304,204
Compensated absences due in one year (Note 1M) 179,215 6,602 185,817 43,796 Long term debt due in one year (Note 5) 2,552,671 2,552,671 13,488 Total Current Liabilities 4,042,854 9,921 4,052,775 637,067 Noncurrent Liabilities:
Compensated absences, due in more than one year (Note 1M) 124,539 3,713 128,252 Long term debt due in more than one year (Note 5) 35,120,013 35,120,013 120,707 Net OPEB Liabilities due in more than one year (Note 6) 1,517,682 1,517,682 Net pension liabilities due in more than one year (Note 7) 3,788,519 3,788,519 Total Non-Current Liabilities 40,550,753 3,713 40,554,466 120,707 Total Liabilities 44,593,607 13,634 44,607,241 757,774
Deferred Inflows of Resources:
Related to OPEB (Note 6) 112,275 112,275
Related to pension (Note 7) 94,801 94,801
Total Deferred inflows of Resources 207,076 207,076
Net Position:
Net investment in capital assets 26,051,859 46,439 26,098,298 1,805,393 Unrestricted 4,758,014 226,548 4,984,562 1,933,451
Total Net Position $30,809,873 $272,987 $31,082,860 $3,738,844 See accompanying notes to financial statements
Liabilities:
33 CITY OF PACIFICA
PROPRIETARY FUNDS
STATEMENT OF REVENUES, EXPENSES AND CHANGES
IN FUND NET POSITION
FOR THE YEAR ENDED JUNE 30, 2022
Governmental
Business-Type Activities Activities
Major Non-major Total Internal
Enterprise Fund Enterprise Fund Enterprise Service
Sewer Utility Beach Parking Funds Funds
Operating Revenues:
Charges for services $18,617,630 $559,195 $19,176,825 $1,433,408 Other operating income 347,614 347,614 1,064,699
Total Operating Revenues 18,965,244 559,195 19,524,439 2,498,107 Operating Expenses:
Personnel services 4,720,615 512,861 5,233,476 592,253
1,386,098 47,122 1,433,220
Supplies and materials 1,154,653 27,148 1,181,801 519,841 Insurance 811,000 811,000 959,229
Outside contractors 137,710 137,710 342,213
Maintenance 454,521 23,530 478,051 91,380
Utilities 1,870,282 1,870,282
Insurance claims 375,560
Depreciation (Note 4) 4,124,765 9,850 4,134,615 743,427 Total Operating Expenses 14,659,644 620,511 15,280,155 3,623,903 Operating Income (Loss) 4,305,600 (61,316) 4,244,284 (1,125,796) Non-operating revenues (Expenses):
Investment earnings 286,486 286,486
Gain on sale of capital assets 24,491
Interest and fiscal charges (1,581,041) (1,581,041) (3,939) Amortization (17,918) (17,918)
(1,312,473) (1,312,473) 20,552
2,993,127 (61,316) 2,931,811 (1,105,244)
Transfers:
Transfers in (Note 9) 145,932
Transfers out (Note 9) (499,600) (499,600)
2,493,527 (61,316) 2,432,211 (959,312)
Net Position, Beginning of Year, as restated (Note 11) 28,316,346 334,303 28,650,649 4,698,156 Net Position, End of Year $30,809,873 $272,987 $31,082,860 $3,738,844 See accompanying notes to financial statements
Administration
Changes in Net Position
Income (Loss) Before Transfers
Total Non-Operating Revenues (Expenses)
34 This Page Intentionally Left Blank
CITY OF PACIFICA
PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2022
Governmental
Business-Type Activities Activities
Major Non-major Total Internal
Enterprise Fund Enterprise Fund Enterprise Service
Sewer Utility Beach Parking Funds Funds
Cash flows from operating activities:
Receipts from customers $18,877,905 $567,757 $19,445,662 $2,512,352 Payments to suppliers (5,168,241) (97,513) (5,265,754) (1,657,518) Payments for claims (376,701)
Payments to and on behalf of employees (4,682,698) (521,756) (5,204,454) (574,539) Net Cash Provided (Used) by Operating Activities 9,026,966 (51,512) 8,975,454 (96,406) Cash Flows from Noncapital and Related Financing Activities:
Interfund payment (99,600) (99,600)
Interfund receipts 145,932
Net Cash Provided (Used) by Noncapital and
Related Financing Activities (99,600) (99,600) 145,932
Cash Flows from Capital and Related Financing Activities (2,524,422) (2,524,422) (313,434)
Proceeds from sale of capital assets 24,491
Principal payments on bonds and notes (2,737,912) (2,737,912) (12,578) Interest paid (1,583,200) (1,583,200) (3,939)
Net Cash Provided (Used) by Capital
and Related Financing Activities (6,845,534) (6,845,534) (305,460) Cash Flows from Investing Activities:
286,486 286,486
Net Cash Provided by Investing Activities 286,486 286,486 2,368,318 (51,512) 2,316,806 (255,934)
Cash and Cash Equivalents at the
Beginning of the Fiscal year, restated (Note 11C) 8,732,219 291,694 9,023,913 2,926,921 Cash and Cash Equivalents at the End of the Fiscal Year $11,100,537 $240,182 $11,340,719 $2,670,987 Reconciliation of Cash and Cash Equivalents to
Statement of Net Position:
$7,070,348 $240,182 $7,310,530 $2,670,987
4,030,189 4,030,189
Total Cash and Cash Equivalents $11,100,537 $240,182 $11,340,719 $2,670,987 (Continued)
See accompanying notes to financial statements
Purchase of capital assets
Interest received
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and investments with fiscal agents
Cash and investments
36 CITY OF PACIFICA
PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2022
Governmental
Business-Type Activities Activities
Major Non-major Total Internal
Enterprise Fund Enterprise Fund Enterprise Service
Sewer Utility Beach Parking Funds Funds
Reconciliation of Operating Income (Loss) to
Net Cash Provided (Used) by Operating Activities:
Operating Income (loss) $4,305,600 ($61,316) $4,244,284 ($1,125,796) Provided (Used) by Operating Activities:
Depreciation 4,124,765 9,850 4,134,615 743,427
(Increase) Decrease in Operating Assets:
Accounts Receivable 291,925 8,562 300,487 14,245
Prepaid Items (379,264) (379,264)
Inventories
Increase (Decrease) in Operating Liabilities:
Accounts payable 646,023 287 646,310 255,163
Due to other funds
Accrued liabilities (18)
Claims payable (1,141)
Net Pension/OPEB Liability,
Deferred Inflows and Deferred Outflows
Compensated Absences 37,917 (8,895) 29,022 17,714
Net Cash Provided (Used) by Operating Activities $9,026,966 ($51,512) $8,975,454 ($96,406) Noncash Transactions
Amortization of bond premium ($17,918)
See accompanying notes to financial statements
Adjustments to Reconcile Operating Income (Loss) to Net Cash 37 CITY OF PACIFICA
STATEMENT OF FIDUCIARY NET POSITION
SUCCESSOR AGENCY
PRIVATE PURPOSE TRUST FUND
JUNE 30, 2022
Assets:
Cash and investments with fiscal agents (Note 3) $232,074 Total Assets 232,074
Accounts payable
Interest payable 27,111
Loan payable to the City - due in more than one year (Note 10) 3,641,599 Long-term debt:
Due within one year (Note 13) 75,000
Due in more than one year (Note 13) 870,000
Total Liabilities 4,613,710
Net Position:
Restricted for Trust Fund (4,381,636)
Total Net Position (Deficit) ($4,381,636)
See accompanying notes to financial statements
Liabilities:
38 CITY OF PACIFICA
PRIVATE PURPOSE TRUST FUND
Additions:
Investment revenue $113
Taxes and assessments 330,243
Total Additions 330,356
Deductions:
Interest expense 113,587
Community development expense 7,000
Total Deductions 120,587
Change in Net Position 209,769
Net Position (Deficit)at Beginning of Year (4,591,405)
Net Position (Deficit) at End of Year ($4,381,636)
See accompanying notes to financial statements
SUCCESSOR AGENCY
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FOR THE YEAR ENDED JUNE 30, 2022
39 This Page Intentionally Left Blank
CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 1 – Summary of Significant Accounting Policies:
The basic financial statements of the City of Pacifica (City) have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) as applied to governmental agencies. The Governmental Accounting Standards Boards (“GASB”) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant accounting principles are described below.
A. Reporting Entity
The City of Pacifica was incorporated November 22, 1957 under the general laws of the State of California and enjoys all the rights and privileges applicable to a General Law City. The City operates under a Council-Manager form of government. There are five Council Members who serve overlapping terms of four years, and the Council, in turn, elects one of the Council Members to serve as Mayor for one year. This legislative body selects a City Manager to administer the affairs of the City. The City provides the following services: public safety (police, fire, and civil defense), highways and streets, sanitation, health and social services, culturerecreation, public improvements, planning and zoning, and general administrative services.
As required by accounting principles generally accepted in the United States of America, the accompanying financial statements include the financial activities of the City.
The City of Pacifica Financing Authority is a separate government entity whose purpose is to assist with the financing certain public capital facilities for the City through the issuance of bonds or other forms of debt. The Authority is controlled by the City and has the same governing body as the City, which also performs all accounting and administrative functions for the Authority.
The Authority is a blended component unit of the City and does not issue separate financial statements.
The City participates in the ABAG Plan Corporation, a public entity risk pool, whose financial activities are not included in the basic financial statements as it is administered by a board, separate from and independent of the City (See Note 8).
There are no other entities which meet the Governmental Accounting Standards Board Statement No. 14 as amended by GASB Statements No. 39 and No. 61, criteria for blended or discrete disclosure within these financial statements.
B. Basis of Presentation
The City’s basic financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. The Governmental Accounting Standards Board (GASB) is the acknowledged standard-setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States of America. 41 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 1 – Summary of Significant Accounting Policies (Continued):
B. Basis of Presentation (Continued)
The City’s government-wide financial statements include a Statement of Net Position, and a Statement of Activities. These statements present summaries of governmental activities and business-type activities for the City, accompanied by a total column. These financial statements include the financial activities of the overall City government, except for fiduciary activities.
Eliminations have been made to minimize the double counting of internal activities.
Governmental activities are financed generally through taxes, intergovernmental revenues, and other nonexchange transactions. Business-type activities (Sewer Utility Enterprise Fund) are financed generally through user fees.
C. Government-wide and Fund Financial Statements
The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the City’s governmental activities. Direct expenses are those that are specifically associated with a program or function and therefore are clearly identifiable to a particular function. Program revenues include three categories: (1) charges for services, (2) operating grants and contributions and (3) capital grants and contributions. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
Interfund services provided and used are not eliminated in the process of consolidation on the Statement of Activities.
Certain eliminations have been made as prescribed by Governmental Accounting Standards Board No.34, Basic Financial Statements-and Management’s Discussion and Analysis-for State and Local Governments (“GASB No. 34”) in regard to interfund activities, payables and receivables.
D. Financial Statements
Governmental fund financial statements include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances for all major governmental funds and non-major funds aggregated. An accompanying schedule is presented to reconcile and explain the differences in fund balance as presented in these statements to the net position presented in the government-wide financial statements.
The governmental fund financial statements provide information about the City’s funds.
Separate statements for each fund category–governmental, proprietary, and fiduciary–are presented. The emphasis of fund financial statements is on major individual funds, each of which is displayed in a separate column. All remaining governmental funds are aggregated and reported as nonmajor funds.
Proprietary fund financial statements include a Statement of Net Position, a Statement of Revenues, Expenses, and Changes in Net Position, and a Statement of Cash Flows for all proprietary funds. The internal service funds are also presented in these statements. However, internal service balances and activities have been combined with the governmental activities in the government-wide financial statements.
42 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 1 – Summary of Significant Accounting Policies (Continued):
D. Financial Statements (Continued)
Proprietary funds are accounted for using the “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included on the Statement of Net Position. The Statement of Revenues, Expenses, and Changes in Net Position presents increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which liabilities are incurred.
Operating revenues in the proprietary funds are those revenues that are generated from the primary operation of the fund. All other revenues are reported as nonoperating revenues.
Operating expenses are those expenses that are essential to the primary operations of the fund.
All other expenses are reported as nonoperating expenses.
Fiduciary Fund Financial Statements include a Statement of Net Position and a Statement of Changes in Fiduciary Net Position. Fiduciary funds represent private-purpose trust funds, which the City serves as a trustee for the Successor Agency. Trust funds are accounted for on an economic resources measurement focus and full accrual basis of accounting. The City has one RDA Successor Agency private-purpose trust fund.
E. Major Funds
GASB 34 defines major funds and requires that the City’s major governmental funds be identified and presented separately in the Fund financial statements. All other governmental funds, called non-major funds, are combined and reported in a single column, regardless of their fund-type. Major funds are defined as funds which have either assets and deferred outflows, liabilities and deferred inflows, revenues or expenditures/expenses equal to or greater than ten percent of their fund-type total and five percent of the grand total of all fund types, excluding fiduciary. The general fund is always a major fund. The major funds of the City are:
• General Fund – The General Fund is used to account for the resources to carry out basic governmental activities of the City such as general government, public safety, public works, community development, and parks, beaches, and recreation, which are not required to be accounted for in another fund. • Disaster Accounting Special Revenue Fund – This fund is used to account for all revenues received and expenditures incurred due to natural and man-made disasters.
• General Capital Improvement Capital Projects Fund – This fund is used to account for revenues derived from fees and apportionments from General Fund to be used for the acquisition, construction, and improvement of major capital facilities of the City.
• Debt Service Fund – This fund is used to account for the accumulated and the disbursement of account for expenditures and financing of various long-term debt liabilities.
43 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 1 – Summary of Significant Accounting Policies (Continued):
E. Major Funds (Continued)
The City reports the following major enterprise fund:
• The Sewer Utility Enterprise Fund – This fund accounts for the operation and maintenance of the City’s wastewater collection system including operating costs of the wastewater collection system and water recycling plant.
Additionally, the City reports the following fund types:
• The Internal Service Funds account for the financing of goods or services provided by one department or agency to other departments or agencies of the government and to other government units on a cost reimbursement basis. The City has two internal service funds, the Motor Pool Fund and the Self Insurance Fund. The Motor Pool Fund accounts for the City’s central garage, and the Self Insurance Fund accounts for the employee dental, workers’ compensation, general liability, property, and automobile liability insurance. • The RDA Successor Agency Private-Purpose Trust Fund accounts for the former Redevelopment Agency activities.
F. Basis of Accounting
The Government-wide, Proprietary funds, and Fiduciary funds financial statements are required by GASB 34 to be reported using the economic resources measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets and deferred outflows, liabilities and deferred inflows, including capital assets and long-term liabilities, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in net position.
Under the accrual basis of accounting, revenues are recognized in the period in which they are earned, while expenses are recognized in the period in which the liability is incurred regardless of when the related cash flows take place.
The Governmental funds financial statements are reported using the current financial resources measurement focus, and the modified accrual basis of accounting. Accordingly, only current assets and liabilities (except for long-term advances from the City) are included in the Balance Sheet. The Statement of Revenues, Expenditures and Changes in Fund Balances present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period.
44 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 1 – Summary of Significant Accounting Policies (Continued):
F. Basis of Accounting (Continued)
The City considers all revenues reported in the governmental funds to be available if the revenue are collected within ninety days after fiscal year end. The primary revenue sources, which have been treated as susceptible to accrual by the City, are property taxes, sales taxes, intergovernmental revenues, other taxes and investment earnings. Expenditures are recorded in the accounting period in which the related fund liability is incurred, except for principal and interest on long-term debt and compensated absences, which are recognized as expenditures to the extent that they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of long-term debt and acquisitions under capital leases are reported as other financing sources.
Non-exchange transactions, in which the City gives or receives value without directly receiving or giving value in exchange, include taxes, grants, entitlements and donations. On the accrual basis, revenue from taxes is recognized in the fiscal year for which the taxes are levied or assessed. Revenue from grants, entitlements and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
Grant revenues are recognized in the fiscal year in which all eligibility requirements are met.
Under the terms of grant agreements, the City may fund certain programs with a combination of cost-reimbursement grants, categorical block grants and general revenues. Thus, both restricted and unrestricted net position may be available to finance program expenditures. The City’s policy is to first apply restricted grant resources to such programs, followed by general revenues if necessary.
G. Cash and Cash Equivalents
For purposes of the Statement of Cash Flows, the City considered cash and cash equivalents (investments with maturities of three months or less at the time of purchase) as short term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. The City follows the practice of pooling the cash of all funds, including the City’s Enterprise and Internal Service Funds.
H. Investments
Investments are reported at fair value, except for investments that are not transferable and have terms that are not affected by change in market rates are reported at cost.
Changes in fair value that occur during a fiscal year are recognized as revenues from use of money reported for that fiscal year. Revenues from use of money include interest earnings, change in fair value, gains or losses realized upon the liquidation, maturity, or sale of investment and rental income. Changes in the fair value of investments during this fiscal year were calculated and booked.
45 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 1 – Summary of Significant Accounting Policies (Continued):
I. Receivables and Payables
All accounts, grants, tax, and note receivables are shown net of an allowance for uncollectible accounts if applicable, and estimated refunds due.
J. Inventories and Prepaid Items
General fund inventories are recorded as expenditures when consumed, rather than when purchased. These inventories are stated at cost, using the first-in, first-out (FIFO) method.
Inventories in the proprietary funds are stated at the lower of cost or market, and consist of expendable materials and supplies.
Certain payments to vendors reflect costs applicable to future accounting periods, and are recorded as prepaid items in both the government-wide and fund financial statements.
Inventories and prepaid items, as reported in the fund financial statements, are offset by nonspendable fund balance for noncurrent assets in governmental funds, to indicate that they do not constitute resources available for appropriation.
K. Capital Assets
The City’s assets are capitalized at historical cost or estimated historical cost on the government-wide Statement of Net Position and the proprietary fund financial statements. City policy has set the capitalization threshold for reporting capital assets at $5,000. Gifts or contributions of capital assets are recorded at fair value on the date donated. Depreciation of capital assets is charged as an expense each year, and the total amount of accumulated depreciation taken over the years, is reported on the respective statements as a reduction in the book value of capital assets.
L. Encumbrances
The City uses encumbrances to control expenditure commitments for the year. Encumbrances represent commitments related to executor contracts not yet performed and purchase orders not yet filled. Commitments for such expenditure of monies are encumbered to reserve a portion of applicable appropriations. Encumbrances still open at year end are not accounted for as expenditures and liabilities, but as restricted, or unassigned fund balance.
M. Compensated Absences
City employees accrue vacation, sick, holiday, and compensatory time off benefits. An employee may accumulate vacation time equal to an amount as stipulated in their contracts. No cash compensation is payable for accrued vacation until the employee terminates employment.
Sick leave is compensated in cash only upon an employee's retirement. Maximum limit per employee is $3,000 or one quarter of employee's sick leave credit, whichever is lower. Two employee groups have elected to participate in a retirement health savings program and have directed vacation and limited sick leave cash out to separation of this program. It is the City’s policy to allow employees to accumulate compensatory time within set limits instead of drawing overtime. This accumulation may subsequently be exchanged into cash or time taken. 46 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 1 – Summary of Significant Accounting Policies (Continued):
M. Compensated Absences (Continued)
All vacation pay is accrued when incurred in the government-wide and proprietary fund financial statements. A liability for these amounts is reported in the governmental funds only when they have matured (such as vacation time, estimated to be paid upon retirement by the end of the fiscal year with expendable available financial resources). Each fiscal year, an adjustment to the liability is made based on pay rate changes and adjustments for the current portion. The General Fund is primarily responsible for the repayment of the governmental portion of compensated absences.
Changes in compensated absences for the year ended June 30, 2022, were as follows:
Governmental
BusinessType
Activities Activities Total
Beginning Balance $1,621,848 $285,047 $1,906,895
Additions 1,225,911 277,776 1,503,687
Payments (1,228,839) (248,754) (1,477,593)
Ending Balance $1,618,920 $314,069 $1,932,989
Current Portion $922,784 $185,817 $1,108,601
Non-current Portion $696,136 $128,252 $824,388
N. Property Tax Revenues
California Constitution Article XIII A limits the combined property tax rate to one percent of a property’s assessed valuation. Additional taxes may be imposed with voter approval. Assessed value is calculated at one hundred percent of a property’s fair value, as defined by Article XIII A, and may be increased no more than two percent per year unless a change in ownership occurs.
The County of San Mateo collects the taxes and distributes them to taxing jurisdictions on the basis of assessed valuations subject to adjustments for voter-approved debt. The City receives property taxes pursuant to an arrangement with the County known as the “Teeter Plan,” whereby the County assumes responsibility for the collection of delinquent taxes and pays the full allocation to the City. The City recognizes property tax revenues (including tax increment revenues) to the extent of each year’s tax allocation received or to be received within 60 days after the end of each fiscal year.
47 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 1 – Summary of Significant Accounting Policies (Continued):
N. Property Tax Revenues (Continued)
The County assesses properties, bills for, collects, and distributes property taxes per the following schedule:
Secured Unsecured
Valuation dates January 1 January 1
Lien/Levy dates July 1 July 1
Due dates 50% on November 1
50% on February 1
July 1
Delinquent as of December 10
April 10
August 31
The term “Unsecured” refers to taxes on personal property other than real estate, land, and buildings. These taxes are secured by liens on property being taxed.
O. Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses.
Actual results could differ from those estimates.
P. Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The fair value hierarchy categorizes the inputs to valuation techniques used to measure fair value into three levels based on the extent to which inputs used in measuring fair value are observable in the market.
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 inputs are inputs – other than quoted prices included within level 1 – that are observable for an asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for an asset or liability.
If the fair value of an asset or liability is measured using inputs from more than one level of the fair value hierarchy, the measurement is considered to be based on the lowest priority level input that is significant to the entire measurement.
48 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 1 – Summary of Significant Accounting Policies (Continued):
Q. Expenditures in Excess of Appropriations
The following funds incurred departmental expenditures in excess of appropriations:
Fund/Department
Excess of
Expenditures Over
Appropriations
Major Funds:
General Fund:
General Government $510,608
Public Safety 262,617
Capital Outlay 6,688
Disaster Accounting Special Revenue Fund 56,941
Non-major Special Revenue Funds:
Gax Tax 30,167
Supplemental Law Enforcement Services 41,189
NPDES Stormwater 5,218
Parks, Beaches and Recreation 25,379
Highway 1 Improvement 41,636
R. Leases
As clarified by the Government Accounting Standards Board (GASB) Statement No. 87, a lease is defined as a contract that conveys control of the right to use another entity's nonfinancial asset (the underlying asset) as specified in the contract for a period of time in an exchange or exchange-like transaction. Examples of nonfinancial assets include buildings, land, vehicles, and equipment. The Town recognizes lease receivables or liabilities with an initial, individual value of $150,000 or more, based on the future lease payments remaining at the start of the lease.
The City has no leases subject to GASB Statement No. 87 for the fiscal year 2022. 49 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 2 – Stewardship, Compliance, and Accountability:
A. Budgetary information
The City operates under the general law of the State of California, and annually adopts a budget to be effective July 1 for the ensuing fiscal year. The City Manager submits a Preliminary Budget to the City Council on or about May 15 each year. This Preliminary Budget is the fiscal plan for the ensuing twelve months starting July 1, and includes proposals for expenditures for operations and capital improvement, and the resources to meet them. City Council conducts public hearings in the Council Chambers before adopting the budget. The Council approves total appropriations at the department level in the General Fund, and at the fund level in other funds. The Budget is adopted by City resolution prior to June 30.
The appropriated budget is prepared by fund, function, and department. The City Manager is authorized to transfer budget appropriations within departments in conformance with the adopted policies set by the City Council. All other transfers must be approved by the City Council. Any revisions that alter the total expenditures of any department must be approved by the City Council. Expenditures are budgeted at, and may not legally exceed, the department level for the General Fund and the fund level for Special Revenue, Debt Service, Capital Projects and Internal Service Funds. Budgeted amounts shown are as originally adopted, or as amended by the City Council during the fiscal year. During the fiscal year, several supplementary appropriations were necessary.
Budgets for General, Special Revenue, Debt Service, Capital Projects, and Internal Service Funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America (US GAAP). Except for Capital Project Funds, appropriations lapse at fiscal year-end and are re-budgeted for the coming year. The following capital projects funds are not budgeted annually: Aircraft Noise Project Fund, Excess ERAF Fund and Pacific Library Fund. The Parking In-lieu Special Revenue Fund is only budgeted when the need for expenditure arises.
Encumbrances represent commitments related to unperformed contracts for goods or services.
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary integration in the governmental funds. Encumbrances outstanding at fiscal year-end are recorded as restricted, committed, or assigned fund balances and do not constitute expenditures or liabilities because the commitments will be honored during the subsequent fiscal year.
B. Deficit Fund Balances/Net Position
As of June 30, 2022, the following funds had a deficit net position/fund balance:
Gax Tax Special Revenue Fund $188,655
Planned Local Drainage Capital Projects Fund 470,190
The deficits in these governmental funds are due to the City paying expenditures in advance of receiving revenues. These deficits are going to be repaid once reimbursements are received from the funding source, and if there are any outstanding deficits after the repayments, or if needed, the General Fund would cover these deficits when the fund is closed out. 50 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 3 – Cash and Investments:
Cash and investments as of June 30, 2022 are classified in the accompanying financial statements as follows:
Statement of net position:
Cash and investments $45,729,968
Cash and investments with fiscal agents 8,630,417
Restricted cash and investments 3,001,260
Statement of fiduciary net position:
Cash and investments with fiscal agents 232,074
Total cash and investments $57,593,719
A. 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 (or the City’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City’s investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. 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.
Authorized Investment Type
Maximum
Maturity
Minimum
Credit
Quality
Maximum
Percentage/
Investment
of Portfolio
Maximum
Investment
in One
Issuer
Commercial Paper 270 days A 25% None
Bankers Acceptances 180 days A 40% None
U.S. Treasury Obligations 5 years None 50% None
U.S. Government Agency Issues 5 years None 50% None
Certificates of Deposit 5 years None 30% None
State of California Local Agency
Investment Fund (State Pool) N/A None $75,000,000 $75,000,000 Banks and Savings and Loan Time
Deposits N/A A-1+ 30% None
Repurchase Agreements 1 year None 15% None
Mutual Funds 5 years AAAm 15% None
51 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 3 – Cash and Investments (Continued):
B. Investments Authorized by Debt Agreements
Investment of debt proceeds held by trustees is governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s investment policy. The table below identifies the investment types that are authorized for investments held by trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk.
Authorized Investment Type
Maximum
Maturity
Minimum Credit
Quality
Municipal Bonds None AAA
Commercial Paper 270 days A-1
U.S. Treasury Obligations None None
U.S. Agency Securities None None
Time Deposits (Unsecured) 30 days A-1
Money Market Funds None AAAm
Investment Contracts None AALocal Agency Investment Fund None None Certificates of Deposit 1 year A-1+
Bankers Acceptances 1 year A-1+
Pre-refunding Municipal Bonds None AAA
State and Municipal Bonds None Two Highest Categories
C. 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 change in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flows and liquidity needed for operations.
Information about the sensitivity of the fair values of the City’s investments and those held by trustees to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity:
12 Months
Investment Type Or Less Totals
California Local Agency Investment Fund $17,659,466 $17,659,466 Held by Trustees:
Money Market Fund 8,846,009 8,846,009
Total Investments $26,505,475 26,505,475
Cash in Banks 31,084,799
Petty Cash 3,445
Total Cash 31,088,244
Total Cash and Investments $57,593,719
Remaining Maturity (in Months)
52 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 3 – Cash and Investments (Continued):
C. Interest Rate Risk (Continued)
Money market mutual funds are available for withdrawal on demand at June 30, 2022, and have an average maturity of less than 45 days.
The City does not hold any specific investments that are highly sensitive to interest rate fluctuations (to a greater degree than already indicated in the information provided above).
D. Fair Value Hierarchy
The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure fair value of the assets. Level 1 inputs are quoted prices in an active market for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs.
Investment in the California Local Agency Investment Fund and money market mutual funds are classified as exempt in the fair value hierarchy, as it is valued at amortized cost, which is exempt from being classified under GASB 72.
E. 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 actual rating as of fiscal year end for each investment type.
Investment Type AAAm Not Rated Total
California Local Agency Investment Fund $17,659,466 $17,659,466 Held by Trustees:
Money Market Fund $8,846,009 8,846,009
Total Investments $8,846,009 $17,659,466 26,505,475
Cash in Banks 31,084,799
Petty Cash 3,445
Total Cash 31,088,244
Total Cash and Investments $57,593,719
Rating as of Fiscal Year End
F. Concentration of Credit Risk
The investment policy of the City contains limitations on the amount that can be invested in any one issuer. The City has no investments in any one issuer (other than money market funds and an external investment pool) that represent 5% or more of total City investments. 53 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 3 – Cash and Investments (Continued):
G. 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, in the event of the failure of the counterparty (e.g., brokerdealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits. The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The fair value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.
As of June 30, 2022, all of the City’s deposits with financial institutions in excess of federal depository insurance limits were held in collateralized accounts.
H. Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. At June 30, 2022, these investments have an average maturity of 291 days.
I. Investment held in Trust for Pension Benefits
The City established an irrevocable Section 115 Pension Trust with Public Agency Retirement Services (PARS) in the fiscal year 2021. As of June 30, 2022, the trust had a balance of $342,510. PARS’ policy for allocation of invested assets is established as:
Asset Target
Global Equity 20-40%
Fixed Income 50-80%
Cash 0-20%
At June 30, 2022, PARS held no investments in any one organization that represented 5% of more of fiduciary net position.
54 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 4 – Capital Assets:
All capital assets are valued at historical cost or estimated cost if actual historical cost is not available. Donated capital assets and those received in a service concession arrangement are recorded at acquisition value at the date of donation. Acquisition value is the price that would be paid to acquire an asset with equivalent service potential on the date of the donation. GASB Statement No.34 requires that all capital assets with limited useful lives be depreciated over their estimated useful lives. The purpose of the depreciation is to spread the cost of the capital assets equitably among all users over the life of these assets. The amount charged to depreciation expense each year represents that year’s pro-rata share of the cost of the capital assets. Depreciation is provided using the straight–line method over its expected useful life.
Capital assets with a value of $5,000 or more are capitalized.
The City has assigned the following useful lives to capital assets: Buildings and improvements (25-30 years); Police Vehicles (4 years); Other Vehicles (5-25 years); Machinery and Equipment (5-15 years); Collection System (20 years); and Infrastructure (15-30 years).
The following is a summary of capital assets for governmental activities as of June 30, 2022:
Balance Balance
June 30, 2021 Additions Deletions Transfers June 30, 2022 Capital assets not being depreciated:
$40,445,580 $40,445,580
9,080,303 $3,090,515 ($5,682,461) 6,488,358
Total capital assets not being depreciated 49,525,883 3,090,515 (5,682,461) 46,933,938 Buildings & improvements 16,308,692 297,853 16,606,545
8,357,876 313,434 ($203,514) 8,467,796
3,541,025 3,541,025
Infrastructure 46,268,178 223,925 5,682,461 52,174,564
Total capital assets being depreciated 74,475,771 835,212 (203,514) 5,682,461 80,789,930 Buildings & improvements (11,212,497) (452,952) (11,665,449) (6,573,624) (519,720) (7,093,344)
(3,093,939) (165,184) 203,514 (3,055,609)
(15,610,626) (1,739,158) (17,349,784)
Total accumulated depreciation (36,490,686) (2,877,014) 203,514 (39,164,186) Depreciable capital assets, net 37,985,085 (2,041,802) 5,682,461 41,625,744 Total capital assets, net $87,510,968 $1,048,713 $88,559,682 Land
Capital assets being depreciated:
Construction in progress
Machinery & equipment
Infrastructure
Vehicles
Machinery and equipment
Less accumulated depreciation for:
Vehicles
Depreciation expense for governmental activities was charged to functions as follows:
General government $118,302
Public safety 381,541
Public works 1,597,982
Parks, beaches, and recreation 35,762
Internal Service Fund 743,427
Total Governmental Activities $2,877,014
55 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 4 – Capital Assets (Continued):
The following is a summary of capital assets for business-type activities as of June 30, 2022:
Balance Balance
June 30, 2021 Additions Transfers June 30, 2022
Capital assets not being depreciated:
$4,014,412 $4,014,412
3,529,995 $839,610 ($2,615,701) 1,753,904
Total capital assets not being depreciated 7,544,407 839,610 (2,615,701) 5,768,316 Buildings & improvements 77,581,869 106,460 77,688,329
44,857,044 1,259,030 2,615,701 48,731,775
3,881,638 319,322 4,200,960
Total capital assets being depreciated 126,320,551 1,684,812 2,615,701 130,621,064 Buildings & improvements (56,975,908) (1,909,107) (58,885,015) (10,623,645) (1,943,976) (12,567,621)
(2,093,348) (281,532) (2,374,880)
Total accumulated depreciation (69,692,901) (4,134,615) (73,827,516) Depreciable capital assets, net 56,627,650 (2,449,803) 2,615,701 56,793,548 Total capital assets, net $64,172,057 ($1,610,193) $62,561,864 Collection system
Machinery & equipment
Land
Depreciable capital assets:
Collection system
Machinery and equipment
Construction in progress
Less accumulated depreciation for:
NOTE 5 – Long-Term Debt:
The City generally incurs debt to finance projects or purchase assets, which will have useful lives equal to or greater than the related debt. The City’s debt issues and transactions related to both governmental and business-type activities are summarized below and discussed in detail subsequently.
Governmental Activities:
Balance Balance Due within
July 1, 2021 Additions Retirements June 30, 2022 One Year $14,200,000 ($725,000) $13,475,000 $705,000
1,838,067 (114,879) 1,723,188
Sub-total COP 16,038,067 (839,879) 15,198,188 705,000
206,149 (136,069) 70,080 70,080
$4,000,000 4,000,000
Sub-total capital leases 206,149 4,000,000 (136,069) 4,070,080 70,080 2019 Pension obligation refunding bond
(88.622%) 8,583,041 (735,563) 7,847,478 788,736
Total Governmental Activities $24,827,257 $4,000,000 ($1,711,511) $27,115,746 $1,563,816 Pension Obligation Bonds:
Certificates of Participation:
Capital Lease Payable (Direct borrowing):
Energy retrofit lease
2016 COP
Premium
2021 Civic Center lease
56 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 5 – Long-Term Debt (Continued):
Business-type Activities:
Balance Balance Due within
July 1, 2021 Retirements June 30, 2022 One Year
$6,740,000 $6,740,000 $1,520,000
Net Premium 632,654 ($118,623) 514,031
2017 Wastewater Revenue Bonds 22,100,000 22,100,000 625,000 Net Premium 3,426,656 (163,174) 3,263,482
Sub-total Revenue bonds: 32,899,310 (281,797) 32,617,513 2,145,000 2019 Pension obligation bond
1,101,959 (94,437) 1,007,522 101,264
State of California Water
Resources Board 2,065,918 (2,065,918)
Loan and Installment Agreement 4,343,408 (295,759) 4,047,649 306,407 Total notes payable 6,409,326 (2,361,677) 4,047,649 306,407 Total Business-Type Activities: $40,410,595 ($2,737,911) $37,672,684 $2,552,671 Notes payable (Direct Borrowing):
2014 Wastewater Revenue Refunding
Revenue bonds:
Pension Obligation bonds:
(11.378%)
A. Governmental Activities Debt
2021 Civic Center Campus Improvement Project Lease Financing (Direct Borrowing):
On April 26, 2021, the Pacifica City Council provided input on the Civic Center Renovation conceptual design and approved the funding strategy. The Civic Center Project is estimated to cost about $10 million. The basic funding strategy entails $6 million in various one-time sources of funding while financing the remaining $4 million. On November 22, 2021, the City adopted a Resolution of the Board of Directors of the City of Pacifica Financing Authority approving lease financing in the aggregate amount of $4 million to finance a portion of the construction of the Civic Center Campus Improvement Project. Sterling National Bank was chosen from seven financial institutions who responded to the request for proposal. The loan is a 15-year loan at
1.97% and the bank will commit to provide the City with an additional $1 million within a 24- month period if the City chooses to increase the borrowing amount. Lease payments are payable semiannually on July 1 and January 1, commencing July 1, 2022. The lease ends on July 1, 2036.
57 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 5 – Long-Term Debt (Continued):
A. Governmental Activities Debt (Continued)
Annual debt service requirements, to maturity, for the 2021 Civic Center Lease are as follows:
Fiscal year ended Principal Interest Total
2023 $85,586 $85,586
2024 $50,000 78,308 128,308
2025 75,000 77,076 152,076
2026 100,000 75,353 175,353
2027 311,000 71,304 382,304
2028 - 2032 1,648,000 261,321 1,909,321
2033 - 2037 1,816,000 90,856 1,906,856
Total $4,000,000 $739,803 $4,739,803
2016 Certificates of Participation: On October 5, 2016, the City of Pacifica issued Certificates of Participation (COP) in the amount of $14,680,000 (par value) payable annually beginning January 1, 2021 and with interest rates ranging from 3.000% to 5.000%, payable each July 1 and January 1, beginning January 1, 2017. The COP matures on January 1, 2037. The purpose of the COP is to (i) prepay and defease certain outstanding certificates of participation which were executed and delivered in 2008 for the purpose of financing and refinancing various municipal improvements of the City, and (ii) pay certain costs of executing and delivering the Certificates
Accounting gains or losses resulting from advance refunding of long-term debt is deferred and amortized over the shorter of the life of the new debt or refunded debt. The deferred charge on refunding balance at June 30, 2022 was $422,062 for the 2016 COP.
The Bonds are general obligations of the City, payable solely by the City. The bond covenants contain events of default that require the revenue of the City to be applied by the Trustee as specified in the terms of the agreement if any of the following conditions occur: default on debt service payments; the failure of the City to observe or perform the conditions, covenants, or agreement terms of the debt; bankruptcy filing by the City; or if any court or competent jurisdiction shall assume custody or control of the City. No such events occurred during the fiscal year ending June 30, 2022.
58 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 5 – Long-Term Debt (Continued):
A. Governmental Activities Debt (Continued)
Annual debt service requirements, to maturity, for the 2016 Certificates of Participation are as follows:
Fiscal year ended Principal Interest Total
2023 $705,000 $601,600 $1,306,600
2024 760,000 566,350 1,326,350
2025 760,000 528,350 1,288,350
2026 815,000 490,350 1,305,350
2027 790,000 449,600 1,239,600
2028 - 2032 4,520,000 1,608,500 6,128,500
2033 - 2037 5,125,000 526,000 5,651,000
Total $13,475,000 $4,770,750 $18,245,750
Energy Retrofit Lease (Direct Borrowing): On November 1, 2012, the City entered into a lease/purchase agreement with Holman Capital Corporation for energy efficiency measures at various City owned buildings. The effective interest rate on the lease is 4.0% and lease payments are payable semiannually on November 15 and May 15, commencing May 15, 2013.
The lease ends on November 15, 2022.
Annual debt service requirements, to maturity, for the Energy Retrofit Lease are as follows:
Fiscal year ended Principal Interest Total
2023 $70,080 $1,402 $71,482
Total $70,080 $1,402 $71,482
59 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 5 – Long-Term Debt (Continued):
A. Governmental Activities Debt (Continued)
2019 Taxable Pension Obligation Refunding Bonds: During September 2019, the City of Pacifica issued $9,685,000 of Pension Obligation Refunding Bonds bearing interest between
2.243% and 3.060% and payable semiannually on June 1 and December 1 each year, commencing June 1, 2020. The bonds mature on June 1, 2030. These bonds were issued to refund in full the 2010 taxable pension obligation bonds outstanding principle amount of $8,995,000 and pay costs of issuance of the bonds. Approximately 88.622% of the bond proceeds were allocated to governmental activities (including 1.52% to the Motor Pool internal service fund).
The Bonds are general obligations of the City, payable solely by the City. The bond covenants contain events of default that require the revenue of the City to be applied by the Trustee as specified in the terms of the agreement if any of the following conditions occur: default on debt service payments; the failure of the City to observe or perform the conditions, covenants, or agreement terms of the debt; bankruptcy filing by the City; or if any court or competent jurisdiction shall assume custody or control of the City. No such events occurred during the fiscal year ending June 30, 2022.
Annual debt service requirements, to maturity, for the 2019 Pension Obligation Refunding Bonds (governmental portion) are as follows:
Fiscal year ended Principal Interest Total
2023 $788,736 $214,927 $1,003,663
2024 841,909 197,038 1,038,947
2025 899,513 177,102 1,076,615
2026 957,118 154,047 1,111,165
2027 1,028,015 128,559 1,156,574
2028 - 2030 3,332,187 199,279 3,531,466
Total $7,847,478 $1,070,952 $8,918,430
B. Business Type Activities Debt
Loan and Installment Agreement (Direct Borrowing): On August 27, 2012, the City of Pacifica entered into a loan and installment agreement with the City of Pacifica Financing Authority in the amount of $6,402,594 payable annually beginning July 1, 2013 at an interest rate of 3.6%, payable each July 1 and January 1, beginning January 1, 2013. The agreement matures on July 1, 2032. The purpose of this agreement is to (i) fund an escrow to cause the mandatory tender of the outstanding 2001B Wastewater Revenue Bonds (ii) provide funds relating to the Equalization Basin Project, the Collection System Capacity Improvement Projects, and the Collection System Repair, Rehabilitation, and Replacement Projects, (iii) fund certain costs relating to the defeasance of the 2001B Wastewater Revenue Bonds, (iv) fund or provide for satisfaction of the Reserve Fund Requirement, and (vi) pay the costs incurred in connection with the execution of the Loan and Installment Sale. 60 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 5 – Long-Term Debt (Continued):
B. Business Type Activities Debt (Continued)
Accounting gains or losses resulting from advance refunding of long-term debt is deferred and amortized over the shorter of the life of the new debt or refunded debt. The deferred charge on refunding balance at June 30, 2022 was $168,381 for the Loan and Installment Sale.
The defeased 2001B Wastewater Revenue Bonds have been paid off. Annual debt service requirements, to maturity, for the Loan and Installment Agreement are as follows:
Fiscal year ended Principal Interest Total
2023 $306,407 $140,200 $446,607
2024 317,437 128,970 446,407
2025 328,865 117,337 446,202
2026 340,746 105,285 446,031
2027 352,970 92,799 445,769
2028 - 2032 1,964,852 260,392 2,225,244
2033 436,372 7,855 444,227
Total $4,047,649 $852,838 $4,900,487
2019 Taxable Pension Obligation Refunding Bonds: During September 2019, the City of Pacifica issued $9,685,000 of Pension Obligation Refunding Bonds bearing interest between
2.243% and 3.060% and payable semiannually on June 1 and December 1 each year, commencing June 1, 2020. The bonds mature on June 1, 2030. These bonds are being issued to refund in full the 2010 taxable pension obligation bonds outstanding principle amount of $8,995,000 and pay costs of issuance of the bonds. Approximately 11.378% of the bond proceeds were allocated to business-type activities.
The Bonds are general obligations of the City, payable solely by the City. The bond covenants contain events of default that require the revenue of the City to be applied by the Trustee as specified in the terms of the agreement if any of the following conditions occur: default on debt service payments; the failure of the City to observe or perform the conditions, covenants, or agreement terms of the debt; bankruptcy filing by the City; or if any court or competent jurisdiction shall assume custody or control of the City. No such events occurred during the fiscal year ending June 30, 2022.
Annual debt service requirements, to maturity, for the 2019 Pension Obligation Refunding Bonds (business portion) are as follows:
Fiscal year ended Principal Interest Total
2023 $101,264 $27,594 $128,858
2024 108,091 25,297 133,388
2025 115,487 22,738 138,225
2026 122,882 19,778 142,660
2027 131,985 16,505 148,490
2028 - 2030 427,813 25,586 453,399
Total $1,007,522 $137,498 $1,145,020
61 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 5 – Long-Term Debt (Continued):
B. Business Type Activities Debt (Continued)
State of California Water Resource Control Board Loan (Direct Borrowing): On February 20, 1997, the State of California Water Resource Control Board entered into an agreement to loan to the City $41,304,818 for the construction of a new wastewater treatment facility.
No interest is charged on the loan. Loan was paid in full as of July 31, 2021. 2014 Wastewater Revenue Refunding Bonds: In November 2014, the City issued $6,470,000 in 2014 Wastewater Revenue Refunding Bonds (2014 bonds) with interest rates ranging from 5% to 5.25%. The proceeds were used to advance refund the 2004 Wastewater Revenue Refunding Bonds.
Net proceeds of $9.3 million (including a $1.4 million premium and other city funds) were deposited in an irrevocable trust with an escrow agent to provide funds for the future debt service payment on the refunded bonds. As a result, the 2004 Wastewater Revenue Refunding Bonds are considered defeased and the liability for those bonds has been removed. The reacquisition price totaled to the net carrying amount of the refunded bonds.
Interests on the 2014 bonds are payable semiannually on April 1 and October 1 each year, commenced April 1, 2015. Principal payments which are due each October 1 will commence on October 1, 2022, with the last payment due on October 1, 2026. The bonds are paid from and secured by the net revenues of the wastewater collection system of the City.
Accounting gains or losses resulting from advance refunding of long-term debt is deferred and amortized over the shorter of the life of the new debt or refunded debt. The deferred charge on refunding balance at June 30, 2022 was $39,492 for the Refunding Bonds.
The Bonds are general obligations of the City, payable solely by the City. The bond covenants contain events of default that require the revenue of the City to be applied by the Trustee as specified in the terms of the agreement if any of the following conditions occur: default on debt service payments; the failure of the City to observe or perform the conditions, covenants, or agreement terms of the debt; bankruptcy filing by the City; or if any court or competent jurisdiction shall assume custody or control of the City. No such events occurred during the fiscal year ending June 30, 2022.
Annual debt service requirements, to maturity, for the 2014 Wastewater Revenue Refunding Bonds are as follows:
Fiscal year ended Principal Interest Total
2023 $1,520,000 $299,000 $1,819,000
2024 1,595,000 221,125 1,816,125
2025 1,675,000 139,375 1,814,375
2026 1,755,000 53,625 1,808,625
2027 195,000 4,875 199,875
Total $6,740,000 $718,000 $7,458,000
62 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 5 – Long-Term Debt (Continued):
B. Business Type Activities Debt (Continued)
2017 Wastewater Revenue Bonds: In June 2017, the City issued $22,100,000 in 2017 Wastewater Revenue Refunding Bonds (2017 bonds) at an interest rate of 5%. The proceeds were used to fund the acquisition, construction, and installation of certain improvements to the Wastewater system.
Net proceeds of $26.2 million (including a $4 million premium and other city funds) were deposited in an irrevocable trust with an escrow agent to provide funds for the future debt service payment on the refunded bonds.
Interests on the 2017 bonds are payable semiannually on April 1 and October 1 each year, commenced October 1, 2017. Principal payments which are due each October 1 will commence on October 1, 2022, with the last payment due on October 1, 2042. The bonds are paid from and secured by the net revenues of the wastewater collection system of the City.
The Bonds are general obligations of the City, payable solely by the City. The bond covenants contain events of default that require the revenue of the City to be applied by the Trustee as specified in the terms of the agreement if any of the following conditions occur: default on debt service payments; the failure of the City to observe or perform the conditions, covenants, or agreement terms of the debt; bankruptcy filing by the City; or if any court or competent jurisdiction shall assume custody or control of the City. No such events occurred during the fiscal year ending June 30, 2022.
Annual debt service requirements, to maturity, for the 2017 Wastewater Revenue Refunding Bonds are as follows:
Fiscal year ended Principal Interest Total
2023 $625,000 $1,045,975 $1,670,975
2024 655,000 1,013,975 1,668,975
2025 690,000 980,350 1,670,350
2026 725,000 944,975 1,669,975
2027 760,000 907,850 1,667,850
2028 - 2032 4,435,000 3,912,375 8,347,375
2033 - 2037 5,550,000 2,792,900 8,342,900
2038 - 2042 7,030,000 1,321,250 8,351,250
2043 1,630,000 40,750 1,670,750
Total $22,100,000 $12,960,400 $35,060,400
63 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 6 – Other Post-Employment Benefits (OPEB):
A. Plan Description
The City participates in the CalPERS medical program, an agent multiple‐employer defined benefit retiree healthcare plan. Employees in the following bargaining groups who retire from the City and receive a CalPERS pension are eligible to receive City contributions towards the costs of their (OPEB) coverage:
• Department Directors
• Battalion Chiefs
• Firefighters
• Management Unit
• Police Officers
• Police Supervisors
• Police Management
• Wastewater Treatment Plant
• Miscellaneous Employees
In general, employees in the above groups may choose to receive their medical benefits from Union Trust Plans (except Public Safety – Firefighters and Police) or enroll in any of the CalPERS medical plans. For the retirees who do not participate in the CalPERS medical programs, the City does not make a contribution toward the cost of postemployment healthcare benefits. No assets are accumulated in a trust that meets the criteria in paragraph 4 of Governmental Accounting Standards Board Statements No. 75.
B. Funding Policy
Under its arrangement with the CalPERS medical program, the City contributes the minimum amount provided under Government Code Section 22825 of the Public Employees Medical and Hospital Care Act. Retirees must contribute any premium amounts in excess of the City contribution.
Retired Department Directors, retired Management Unit employees, unrepresented managers, and confidential employees receive an additional $100 monthly benefit.
The City’s policy is to contribute an amount sufficient to pay the current year’s minimum employer contribution only.
Employees Covered
Membership in the plan consisted of the following at June 30, 2022:
Active employees 174
Inactive employees receiving benefit payments 61
Inactive employees entitled to but not yet
receiving benefit payments 98
Total 333
64 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 6 – Other Post-Employment Benefits (OPEB) (Continued):
C. Total OPEB Liability
Actuarial Methods and Assumptions: The City’s total OPEB liability was measured as of June 30, 2021 and was determined by an actuarial valuation as of June 30, 2020 to determine the total OPEB liability as of June 30, 2021, based on the following actuarial methods and assumptions:
Actuarial Assumption June 30, 2021 Measurement Date
Actuarial Valuation Date June 30, 2020
Contribution Policy No pre-funding
Discount Rate *2.16% at June 30, 2021
*2.21% at June 30, 2020
General Inflation 2.75% per annum
Aggregate Payroll Increase 3.00% per annum
Mortality, Retirement, Disability, Termination CalPERS 1997-2015 Experience Study Mortality Improvement
Post-retirement mortality projected fully
generational with Scale MP-2020
Discount Rate: The discount rate used to measure the total OPEB liability was 2.21%.
D. Changes in Total OPEB Liability
The changes in the total OPEB Liability follows:
Total OPEB
Liability
Balance as of June 30, 2021:
(Measurement date 6/30/20) $8,431,567
Changes Recognized for the Measurement Period:
Service cost 524,816
Interest 195,445
Benefit changes -
Differences between expected and actual experience -
Changes of assumptions 72,300
Contributions from the employer -
Benefit payments (225,411)
Net changes 567,150
Balance as of June 30, 2022:
(Measurement date 6/30/21) $8,998,717
The General Fund is typically used to liquidate the liabilities for OPEB. 65 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 6 – Other Post-Employment Benefits (OPEB) (Continued):
E. Sensitivity of the Total OPEB Liability
The following presents the total OPEB liability of the City, as well as what the City's total OPEB 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 discount rate:
Total OPEB Liability/(Asset)
Discount Rate -1% Current Discount Rate Discount Rate +1% (1.16 %) (2.16%) (3.16%)
$10,650,159 $8,998,717 $7,704,218
The following presents the total OPEB liability of the City, as well as what the City's total OPEB liability would be if it were calculated using a healthcare cost trend rate that is 1-percentagepoint lower or 1-percentage-point higher than the current healthcare cost trend rate:
Total OPEB Liability/(Asset)
1% Decrease Current Healthcare Cost 1% Increase
Trend Rates
$7,572,794 $8,998,717 $10,872,262
F. OPEB Expenses and Deferred Outflows/Inflows of Resources Related to OPEB For the year ended June 30, 2022, the City recognized OPEB Expense of $340,318. As of the fiscal year ended June 30, 2022, the City reported deferred outflows and inflows of resources related to OPEB from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Employer contributions made
subsequent to the measurement date $216,706 *
Differences between actual and expected experience 182,716 $212,403 Changes of assumptions 1,110,093 290,782
Total $1,509,515 $503,185
* Include $135,446 cash benefit payments, $1,260 administrative costs, and $80,000 implied subsidy benefit payments
66 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 6 – Other Post-Employment Benefits (OPEB) (Continued):
F. OPEB Expenses and Deferred Outflows/Inflows of Resources Related to OPEB (Continued)
The contributions made after the measurement date of the net OPEB liability but before the end of the City’s reporting period will be recognized as a reduction of the net OPEB liability in the subsequent fiscal year rather than in the current fiscal year. Therefore, $216,706 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the OPEB liability in the year ended June 30, 2022. Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as future OPEB expense as follows:
Year Annual
Ended June 30 Amortization
2023 $23,190
2024 92,493
2025 176,642
2026 249,687
2027 213,553
Thereafter 34,059
Total $789,624
NOTE 7 – Pension Plans:
A. General Information about the Pension Plans
The City has pension plans with the California Public Employees Retirement System (CalPERS) and the California Public Employees Retirement System (PARS). Information about the pension plans follows.
California Public Employees Retirement System (CalPERS) Plan Descriptions – All qualified permanent and probationary employees are eligible to participate in the City’s defined benefit pension plans as follows:
• Miscellaneous (agent multiple-employer plan)
• Safety Police (cost-sharing multiple-employer plan)
• PEPRA Safety Police (cost-sharing multiple-employer plan) • Safety Fire (cost-sharing multiple-employer plan)
• PEPRA Safety Fire (cost-sharing multiple-employer plan) These plans are administered by the California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. 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.
67 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 7 – Pension Plans (Continued):
A. General Information about the Pension Plans (Continued) At June 30, 2022, the City reported the following amounts related to the pension plans:
Miscellaneous Plan Safety Plan
Agent-Multiple Cost-Sharing PARS REP Total
Net pension liabilities $8,778,465 $24,515,482 $2,009,218 $35,303,165 Deferred outflows of resources 2,913,394 9,106,292 237,330 12,257,016 Deferred inflows of resources 9,756,934 17,779,469 27,536,403 Pension expenses 260,836 4,644,769 206,640 5,112,245
Employer Contributions 2,691,698 3,932,902 97,904 6,722,504 The General Fund is typically used to liquidate the liabilities for pensions.
B. Miscellaneous Plan
Benefits Provided – CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.
The Plans’ provisions and benefits in effect at June 30, 2022, are summarized as follows:
Miscellaneous
Benefit formula 2.5% @ 55
2% @ 55
Benefit vesting schedule 5 years service
Benefit payments monthly for life
Retirement age 50
Monthly benefits, as a % of eligible compensation 2-2.5% Required employee contribution rates 7.74%
Required employer contribution rates 28.50%
The Following employees were covered by the benefit terms for the Plan as of the most recent actuarial valuation date of June 30, 2020 and measurement date of June 30, 2021.
Miscellaneous
Inactive employees or beneficiaries
currently receiving benefits 285
Inactive employees entitled to but not yet
receiving benefits 110
Active employees 113
Total 508
68 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 7 – Pension Plans (Continued):
B. Miscellaneous Plan (Continued)
Contributions – Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers to be determined on an annual basis by the actuary and be effective on the July 1 following notice of a change in the rate.
Funding contributions for the Plan are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer 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 contribution requirements are classified as plan member contributions.
Net Pension Liability – The City’s net pension liability for the Miscellaneous Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of the Plan is measured as of June 30, 2021, using an annual actuarial valuation as of June 30, 2020 rolled forward to June 30, 2021 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown below.
Changes in the Net Pension Liability – The changes in the Net Pension Liability for the Miscellaneous Plan are as follows:
Increase (Decrease)
Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability/(Asset)
Balance at June 30, 2020 Measurement Date $109,247,895 $86,962,550 $22,285,345 Changes in the year:
Service cost 1,748,773 1,748,773
Interest on the total pension liability 7,659,792 7,659,792 Changes of Benefit Terms
Changes of assumptions
Difference between expected and actual experience (230,958) (230,958) Net plan to plan resource movement
Contributions - employer 2,515,162 (2,515,162)
Contributions - employees 782,756 (782,756)
Net investment income 19,473,439 (19,473,439)
Benefit payments, including refunds of employee
contributions (5,522,755) (5,522,755)
Administrative expense (86,870) 86,870
Other miscellaneous income/(expense)
Net changes 3,654,852 17,161,732 (13,506,880)
Balance at June 30, 2021 Measurement Date $112,902,747 $104,124,282 $8,778,465 69 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 7 – Pension Plans (Continued):
B. Miscellaneous Plan (Continued)
Sensitivity of the Net Pension Liability to Changes in the Discount Rate – The following presents the net pension liability of the City for the Miscellaneous Plan, calculated using the discount rate, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is one percentage point lower or 1 percentage point higher than the current rate:
Miscellaneous
1% Decrease 6.15%
Net Pension Liability $23,117,738
Current Discount Rate 7.15%
Net Pension Liability $8,778,465
1% Increase 8.15%
Net Pension Liability $3,100,984
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions – For the year ended June 30, 2022, the City recognized pension expense of $260,836. At June 30, 2022, the City reported deferred outflows of resources related to pensions for the Plan from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date $2,691,698 Differences between actual and expected experience 221,696 ($125,977) Changes in assumptions
Net differences between projected and actual earnings on plan investments (9,630,957)
Total $2,913,394 ($9,756,934)
Miscellaneous
The contributions made after the measurement date of the net pension liability but before the end of the City’s reporting period will be recognized as a reduction of the net pension liability in the subsequent fiscal year rather than in the current fiscal year. Therefore, $2,691,698 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 ended June 30, 2023.
Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pension will be recognized as pension expense as follows:
70 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 7 – Pension Plans (Continued):
B. Miscellaneous Plan (Continued)
Year Ended Annual
June 30 Amortization
2023 ($2,311,372)
2024 (2,244,395)
2025 (2,310,666)
2026 (2,668,805)
($9,535,238)
Contributions, Actuarial assumptions and information regarding the discount rate are discussed in Note 7E below.
C. Safety Plan
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 7.15% used for the June 30, 2021 measurement date is without reduction of pension plan administrative expense.
Benefits Provided – CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost-of-living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.
The Plans’ provisions and benefits in effect at June 30, 2022, are summarized as follows:
71 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 7 – Pension Plans (Continued):
C. Safety Plan (Continued)
Safety-Police
Hire date
Prior to
January 1, 2013
On or after
January 1, 2013
Benefit formula 3% @ 50 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50 50
Monthly benefits, as a % of eligible compensation 3% 2-2.7% Required employee contribution rates 8.99% 13.00%
Required employer contribution rates 23.71% 13.13%
Safety-Fire
Hire date
Prior to
January 1, 2013
On or after
January 1, 2013
Benefit formula 3% @ 55 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50 50
Monthly benefits, as a % of eligible compensation 2.4-3% 2-2.7% Required employee contribution rates 8.99% 13.00%
Required employer contribution rates 21.79% 13.13%
Contributions, actuarial assumptions and information regarding the discount rate are discussed in Note 7E below.
As of June 30, 2022, the City reported net pension liabilities for its proportionate shares of the net pension liability of the Safety Plan as $24,515,482.
Sensitivity of the Net Pension Liability to Changes in the Discount Rate – The following presents the net pension liability of the City for the Safety Plan, calculated using the discount rate, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is one percentage point lower or 1 percentage point higher than the current rate:
Safety
1% Decrease 6.15%
Net Pension Liability $42,721,032
Current Discount Rate 7.15%
Net Pension Liability $24,515,482
1% Increase 8.15%
Net Pension Liability $9,561,871
72 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 7 – Pension Plans (Continued):
C. Safety Plan (Continued)
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions – For purposes of measuring the net pension liability and deferred outflows/inflows or resources related to pensions, and pension expense, information about the fiduciary net position of the Plans and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by the CalPERS Financial Office. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.
The City’s net pension liability for the Plan is measured as the proportionate share of the net pension liability. The net pension liability of the Plan is measured as of June 30, 2021, using an annual actuarial valuation as of June 30, 2020 rolled forward to June 30, 2021 using standard update procedures. The City’s proportion of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. The City’s proportionate share of the net pension liability for the Plan as of June 30, 2021 and 2020 was as follows:
Proportion - June 30, 2020 0.571%
Proportion - June 30, 2021 0.699%
Change - Increase (Decrease) 0.128%
For the year ended June 30, 2022, the City recognized pension expense of $4,644,769. At June 30, 2022, the City reported deferred outflows of resources related to pensions for the Plan from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date $3,932,902 Differences between actual and expected experience 4,188,449 Changes in assumptions
Net differences between projected and actual earnings on plan investments ($14,591,425)
Differences between actual
contributions and proportionate share of contributions (3,188,044) Change in proportion 984,941
Total $9,106,292 ($17,779,469)
Safety
73 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 7 – Pension Plans (Continued):
C. Safety Plan (Continued)
The contributions made after the measurement date of the net pension liability but before the end of the City’s reporting period will be recognized as a reduction of the net pension liability in the subsequent fiscal year rather than in the current fiscal year. Therefore, $3,932,902 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 ended June 30, 2023.
Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pension will be recognized as pension expense as follows:
Year Ended Annual
June 30 Amortization
2023 ($2,551,882)
2024 (2,831,439)
2025 (3,207,400)
2026 (4,015,358)
($12,606,079)
D. PARS Plan
Plan Description – The City’s Agent Multiple-Employer PARS Retirement Enhancement Plan (REP) was implemented July 1, 2003 and closed to new participants hired after January 1, 2012. Eligibility to participate in REP is for the following positions: City Attorney, Administrative Services Director, non-safety Department Director or non-safety management employee of the City on or after July 1, 2003. Participants receiving the benefits are non-safety Management Group Employees. This plan is separate from CalPERS and is established as a 401(a) Defined Benefit Plan. The REP is administered by PARS.
The REP provides a benefit equal to 0.5% of final average compensation for City management service earned after plan inception (July 1, 2003). In addition, any City employee in a covered management position as of the date of plan inception will receive up to an additional 10 years of service for any City service (management or non-management) prior to July 1, 2003.
Eligibility for an immediate benefit is defined as reaching age 55, completing five years of fulltime City management service, and retiring concurrently from both the City and CalPERS after leaving City employment.
Employees Covered – At June 30, 2022, the following employees covered by the benefit terms of the plan.
REP
Inactive employees or beneficiaries
currently receiving benefits 18
Inactive employees entitled to but not yet
receiving benefits 0
Active employees 7
Total 25
74 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 7 – Pension Plans (Continued):
D. PARS Plan (Continued)
Changes in the Net Pension Liability – The net pension liability of the REP is measured as of June 30, 2020, using an annual actuarial valuation as of June 30:
Increase (Decrease)
Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability/(Asset)
Balance at June 30, 2021 Measurement Date $4,056,631 $2,609,863 $1,446,768 Changes in the year:
Service cost 20,726 20,726
Interest on the total pension liability 267,267 267,267 Contribution - employer 97,904 (97,904)
Net investment income (337,585) 337,585
Effect of plan changes
Effect of economic/demographic gains or losses 24,928 24,928 Effect of assumptions changes or inputs
Administrative expenses (9,848) 9,848
Benefit payments, including refunds of employee
contributions (239,609) (239,609)
Net changes 73,312 (489,138) 562,450
Balance at June 30, 2022 Measurement Date $4,129,943 $2,120,725 $2,009,218 Sensitivity of the Net Pension Liability to Changes in the Discount Rate – The following presents the net pension liability of the City for the PARS Plan, calculated using the discount rate, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is one percentage point lower or 1 percentage point higher than the current rate:
REP
1% Decrease 5.75%
Net Pension Liability $2,462,516
Current Discount Rate 6.75%
Net Pension Liability $2,009,218
1% Increase 7.75%
Net Pension Liability $1,626,558
75 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 7 – Pension Plans (Continued):
D. PARS Plan (Continued)
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions – For the year ended June 30, 2022, the City recognized pension expense of $206,640. At June 30, 2022, the City reported deferred outflows of resources related to pensions for the Plan from the following sources:
REP
Deferred Outflows Deferred Inflows
of Resources of Resources
Net differences between projected and actual earnings on plan investments $237,330
Total $237,330
The REP Measurement Date is the same as the fiscal year end date, therefore, the fiscal year 2022 contribution of $97,904 was recognized as part of the pension expense during the current year. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pension will be recognized as pension expense as follows:
Year Ended Annual
June 30 Amortization
2023 $52,719
2024 50,085
2025 32,783
2026 101,743
$237,330
Contributions, Actuarial assumptions and information regarding the discount rate are discussed in Note 7E below.
E. Information Common to the Miscellaneous, Safety and PARS Plans Beginning in fiscal year 2016, CalPERS collects employer contributions for the cost-sharing plan as a percentage of payroll for the normal cost portion as noted in the rates above and as a dollar amount for contributions toward the unfunded liability and side fund. The dollar amounts are billed on a monthly basis. The City’s required contribution for the unfunded liability in the Miscellaneous and Safety Plans were $1,699,271 and $2,750,897 respectively.
Contributions – The discount rate used to measure the total pension liability for each Plan was
7.15%. The projection of cash flows used to determine the discount rate for each Plan assumed that contributions from all plan members in the Public Employees Retirement Fund (PERF) will be made at the current member contribution rates and the contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, each Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members for all plans in the PERF. Therefore, the long-term expected rate of return on plan investments was applied to all period of projected benefit payments to determine the total pension liability for each Plan.
76 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 7 – Pension Plans (Continued):
E. Information Common to the Miscellaneous, Safety and PARS Plans (Continued) PARS Retirement Enhancement Plan (REP) – The City makes all contributions necessary to fund the benefits available under the REP. Employees are not permitted to make any contributions.
Subsequent Event – Reduction of CalPERS Discount Rate – On July 12, 2021, CalPERS reported a preliminary 21.3% net return on investments for fiscal year 2020-21. Based on the thresholds specified in CalPERS Funding Risk Mitigation policy approved by the CalPERS Board in 2015, the excess return of 14.3% prescribes a reduction in investment volatility that corresponds to a reduction in the discount rate used for funding purposes of 0.20%, from 7.00% to 6.80%. Since CalPERS was in the final stages of the four-year Asset Liability Management (ALM) cycle, the CalPERS Board elected to defer any changes to the asset allocation until the ALM process concluded.
On November 17, 2021, the board adopted a new strategic asset allocation. The new asset allocation along with the new capital market assumptions, economic assumptions and administrative expense assumption support a discount rate of 6.90% (net of investment expense, but without a reduction for administrative expense) for financial reporting purposes.
This includes a reduction in the price inflation assumption from 2.50% to 2.30% as recommended in the November 2021 CalPERS Experience Study and Review of Actuarial Assumptions. This study also recommended modifications to retirement rates, termination rates, mortality rates and rates of salary increases that were adopted by the CalPERS Board.
These new assumptions will be reflected in the CalPERS GASB 68 accounting valuation reports for the June 30, 2022, measurement date.
77 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 7 – Pension Plans (Continued):
F. Information Common to the Miscellaneous, Safety and PARS Plans (Continued) Actuarial Assumptions – For the measurement period ended June 30, 2021, the total pension liabilities were determined by rolling forward the June 30, 2020 total pension liability. The June 30, 2021 total pension liabilities were based on the following actuarial methods and assumptions:
CalPERS PARS REP
Valuation Date June 30, 2020 June 30, 2020
Measurement Date June 30, 2021 June 30, 2021
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate 7.15% 6.75%
Inflation 2.50% 2.50%
Payroll Growth 2.88% 2.75%
Projected Salary Increase Varied by Entry Age and Service Consistent with the rates used to value
the Miscellaneous Agency CalPERS
Pension Plans (Entry Age 30).
Investment Rate of Return 7.25% (1) 6.75%
Mortality
Derived using CalPERS' Membership
Data for all Funds (2)
Pre-retirement: Consistent with the NonIndustrial rates used to value Miscellaneous Agency CalPERS Pension
Plans after June 30, 2017. Postretirement: Consistent with the NonIndustrial rates used to value Miscellaneous Agency CalPERS Pension
Plans after June 30, 2017.
Post Retirement Benefit Increase
The lesser of contract COLA or 2.50%
until Purchasing Power Protection
Allowance floor on purchasing power
applies, 2.50% thereafter
Retirement rates of 30% per year starting
at age 50 with required years of service.
100% retirement is assumed as age 70.
(1) Net of pension plan investment expenses, including inflation Entry-Age Normal in accordance with the requirements of GASB 68 (2) The mortality table used was developed based on CalPERS’ specific data.
The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP2016 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 December 2017 that can be found on the CalPERS website.
California Public Employees Retirement System Plans (CalPERS) The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2020 valuation were based on the results of a January 2014 actuarial experience study for the period 1997 to 2011. Further details of the Experience Study can be found on the CalPERS website.
78 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 7 – Pension Plans (Continued):
E. Information Common to the Miscellaneous, Safety and PARS Plans (Continued) Discount Rate – The discount rate used to measure the total pension liability for each Plan was
7.15%. The projection of cash flows used to determine the discount rate for each Plan assumed that contributions from all plan members in the Public Employees Retirement Fund (PERF) 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, each Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members for all plans in the PERF. 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 for each Plan.
The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows.
Using forecasted information for 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 longterm, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.
The table below reflects the long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. These rates of return are net of administrative expenses.
Asset Class (a)
Assumed
Asset
Allocation
Real Return
Years 1 - 10(b)
Real Return
Years 11+(c)
Public Equity 50.0% 4.80% 5.98%
Global Fixed Income 28.0% 1.00% 2.62%
Inflation Sensitive 0.0% 0.77% 1.81%
Private Equity 8.0% 6.30% 7.23%
Real Estate 13.0% 3.75% 4.93%
Liquidity 1.0% 0.00% -0.92%
Total 100%
(a) In the CalPERS Annual Comprehensive Financial Report, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-Term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities. (b) An expected inflation of 2.0% used for this period. (c) An expected inflation of 2.92% used for this period. 79 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 7 – Pension Plans (Continued):
E. Information Common to the Miscellaneous, Safety and PARS Plans (Continued) Pension Liability – In December 2016, CalPERS’ Board of Directors voted to lower the discount rate from 7.5% to 7.0% over the next three fiscal years, beginning in fiscal year 2019.
The change in the discount rate will affect the contribution rates beginning in fiscal year 2019 and result in increases to the normal costs and unfunded actuarial liabilities.
PARS Retirement Enhancement Plan (REP)
The REP’s range for the long-term expected rate of return is determined by adding expected inflation to expected long-term real returns and reflecting expected volatility and correlation as follows:
Asset Class
Target
Allocation
Long-term
Expected
Arithmetic Real
Rate of Return
Cash 5.61% -0.21%
Core Fixed Income 45.14% 1.95%
Broad US Equities 39.29% 5.70%
Developed Foreign Equities 4.92% 6.99%
Emerging Market Equities 3.22% 9.44%
US REITs 1.82% 6.27%
Total 100%
Pension Plan Fiduciary Net Position – Detailed information about the pension plan’s fiduciary net position with CalPERS and PARS are available in the separately issued CalPERS financial report with CalPERS and City of Pacifica, respectively.
NOTE 8 – Risk Management:
A. Workers’ Compensation
The City is a member of the Municipal Pooling Authority of Northern California, which pools risks under the terms of a joint-powers agreement with 31 other cities and governmental agencies.
The City has no workers’ compensation deductible for claims and the Authority covers claims up to $500,000. The Authority purchases excess insurance from $500,000 to the statutory limit.
The City paid premiums of $959,229 during fiscal year end June 30, 2022 for workers’ compensation and excess workers’ compensation coverage.
The Authority is governed by a Board consisting of representatives from member municipalities.
The Board controls the operations of the Authority, including selection of management and approval of operating budgets, independent of any influence by member municipalities beyond their representation on the Board.
80 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 8 – Risk Management (Continued):
A. Workers’ Compensation (Continued)
The City’s deposits with the Authority are in accordance with formulas established by the Authority. Actual surpluses or losses are shared according to a formula developed from overall loss costs and spread to member entities on a percentage basis after a retrospective rating.
Audited financial statements can be obtained from Municipal Pooling Authority, 1911 San Miguel Drive #100, Walnut Creek, CA 94596.
B. General Liability
On July 1, 1986, the City became a member of the Association of Bay Area Governments (ABAG) Pooled Liability Assurance Network (PLAN). PLAN is a not-for-profit organization established to provide certain levels of liability insurance coverage, claims and risk management services, and legal defense to thirty- one San Francisco Bay Area cities. PLAN is governed by a Board of Directors comprised of officials appointed by each participating member and is administered by the Association of Bay Area Governments (ABAG). Complete financial statements for ABAG PLAN may be obtained from their offices at the following address: ABAG PLAN Corporation, Finance Department, 375 Beale Street, Ste 700, San Francisco, CA 94105- 2066.
The City paid premiums of $1,445,676 during fiscal year end June 30, 2022 for general liability and property coverage in excess of the City’s self-insured retention. Members may receive rebates when declared by ABAG or, in the event excess liability claims against ABAG exceed available resources, may be required to make additional contributions.
The City is self-insured for the first $50,000 of general and property liability for each occurrence, and the excess (up to $10,000,000 for each occurrence and annual aggregate) is covered through the City’s participation in the ABAG PLAN.
C. Dental
On July 1, 1988, the City established a program of self-insurance with respect to Employee's Dental Insurance, in accordance with the provisions of a Memorandum of Understanding between the City and all full-time employees. This program is administered by Preferred Benefit Insurance Administrators and provides claims review and processing. The maximum benefit per employee per plan year varies between $1,500 and $2,000; the maximum benefit per dependent per plan year is also between $1,500 and $2,000.
The City maintains an internal service fund to account for these insurance programs. Claims expenses and liabilities are reported when it is probable that a loss has occurred and the amount of that loss can be reasonably estimated. These losses include an estimate of claims that have been incurred but not reported.
81 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 8 – Risk Management (Continued):
C. Dental (Continued)
Changes in the total reported liability resulted from the following:
Fiscal Year ended in June 30,
2021 2022
July 1 Liability $216,408 $305,345
Claims & change in estimate 429,800 375,560
Payments for claims (340,863) (376,701)
June 30 Liability $305,345 $304,204
NOTE 9 – Interfund Transactions:
Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as interfund receivables/interfund payables (i.e., the current portion of interfund loans) or advances to/from other funds (the noncurrent portion of interfund loans). All other outstanding balances between funds are reported as interfund receivables or interfund payables. Any residual balances outstanding between the governmental activities and the business-type activities are reported in the government-wide financial statements as internal balances.
A. Transfers
Resources may be transferred from one City/District fund to another. The purpose of the majority of transfers is to move resources from one fund to another. Less often, a transfer may be made to open or close a fund.
B. Internal Balances
Internal balances are presented in the entity-wide financial statements only. They represent the net interfund receivables and payables after the elimination of all such balances within governmental and business-type activities.
82 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 9 – Interfund Transactions (Continued):
B. Internal Balances (Continued)
The following is a summary of transfers for the fiscal year ended June 30, 2022:
Transfers In Transfers Out
Major Governmental Funds:
General Fund $1,130,919 (A) $5,133,739 (C)
3,820,000 (C)
2,541,941 (B)
Major Enterprise Funds:
(A) 499,600
Nonmajor Governmental Funds:
1,222,574 (A)
(C) 132,081 20,000 (A)
(C) 1,153,662 750,000 (A)
Davies Trust Special Revenue Fund 325,000 (A)
Pacifica Library Capital Projects Fund (C) 30,000
(A) 132,000
Fire Equipment Replacement Fund (A) 41,796
Total $8,466,656 $8,466,656
(A) For general government operation purposes
(B) For debt services payments
(C) For various city projects
Sewer Utility Fund
Internal Service Funds:
Self Insurance Fund
Funds
General Capital Improvement Fund
NPDES Stormwater Special Revenue Fund
Debt Service Fund
Gas Tax Fund
Street Construction Special Revenue Fund
C. Advances
At June 30, 2022, the funds below had made advances that are not expected to be repaid within the next year. These long-term interfund advances are expected to be repaid out of future fees.
Advances from Sewer Utility Enterprise Fund to General Fund $649,938 as of June 30, 2022:
• Per the repayment plan approved by the Pacifica City Council on June 23, 2014, and revised on June 24, 2019, repayment of this advance began in 2017-18 and conclude in 2023-24.
Advances from General Fund to NPDES Special Revenue Fund was fully repaid as of June 30, 2022.
Advances from Street Construction Special Revenue Fund to General Capital Improvement Capital Projects Fund was fully repaid as of June 30, 2022. 83 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 10 – Loan Receivable from Successor Agency Private-purpose Trust Fund:
Prior to the dissolution of the former redevelopment agency, the General Fund had loaned money to the former Redevelopment Agency Rockaway Beach Fund to carry out redevelopment activities. As a result of the dissolution, the loan receivable is now recorded as a loan receivable from the Successor Agency Private-purpose Trust Fund. Interest accrues on the original advance at the current Local Agency Investment Fund (LAIF) rate and effective September 22, 2015, calculated at a simple interest rate of 3%. At June 30, 2022, outstanding loans totaled $1,900,000 in principal and $1,794,796 in accrued interest.
NOTE 11 – Net Position and Fund Balances:
A. Net Position
GASB Statement No. 63 adds the concept of net position, which is measured on the full accrual basis, to the concept of Fund Balance, which is measured on the modified accrual basis.
Net position is divided into three captions under GASB Statement No. 34 and 63. These captions apply only to net position as determined at the government-wide level, and are described below:
Net Investment in Capital Assets describes the portion of net position, which is represented by the current net book value of the City’s capital assets, less the outstanding balance of any debt issued to finance these assets.
Restricted describes the portion of net position which is restricted as to use by the terms and conditions of agreements with outside parties, governmental regulations, laws, or other restrictions which the City cannot unilaterally alter. These principally include capital projects, revolving loan programs, and other various grant programs.
Unrestricted describes the portion of net position which is not restricted as to use.
When both restricted and unrestricted net position is available, restricted resources are depleted first before the unrestricted resources are used.
B. Fund Balances
Fund balance is divided into five classifications based primarily on the extent to which the City is bound to observe constraints imposed upon the use of the resources in the governmental funds.
The classifications are as follows:
Nonspendable – The nonspendable fund balance category includes amounts that cannot be spent because they are not in spendable form, or legally or contractually required to be maintained intact. The “not in spendable form” criterion includes items that are not expected to be converted to cash. It also includes the long-term amount of interfund loans.
Restricted – Fund balance is reported as restricted when constraints placed on the use of resources are either externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments or is imposed by law through constitutional provisions or enabling legislation (City ordinances). 84 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 11 – Net Position and Fund Balances (Continued):
B. Fund Balances (Continued)
Enabling legislation authorizes the City to assess, levy, charge, or otherwise mandate payment of resources (from external resource providers) and includes a legally enforceable requirement that those resources be used only for the specific purposes stipulated in the legislation. Legal enforceability means that the City can be compelled by an external party-such as citizens, public interest groups, or the judiciary to use resources created by enabling legislation only for the purposes specified by the legislation.
Committed – The committed fund balance classification includes amounts that can be used only for the specific purposes imposed by formal action (ordinance) of City Council. Those committed amounts cannot be used for any other purpose unless City Council removes or changes the specified use by taking the same type of action (ordinance) it employed to previously commit those amounts. In contrast to fund balance that is restricted by enabling legislation, committed fund balance classification may be redeployed for other purposes with appropriate due process. Constraints imposed on the use of committed amounts are imposed by City Council, separate from the authorization to raise the underlying revenue; therefore, compliance with these constraints is not considered to be legally enforceable. Committed fund balance also incorporates contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements.
Assigned – Amounts in the assigned fund balance classification are intended to be used by the City for specific purposes but do not meet the criteria to be classified as restricted or committed.
In the General Fund, assigned amounts represent intended uses established by City Council or a City official delegated that authority by City ordinance (City Manager).
Unassigned – Unassigned fund balance is the residual classification for the General Fund and includes all spendable amounts not contained in the other classifications. In other governmental 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.
The City applies restricted resources first when expenditures are incurred for purposes for which either restricted or unrestricted (committed, assigned, and unassigned) amounts are available.
Similarly, within unrestricted fund balance, committed amounts are reduced first followed by assigned, and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of the unrestricted fund balance classifications could be used. 85 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 11 – Net Position and Fund Balances (Continued):
B. Fund Balances (Continued)
The constraints placed on fund balance for the major governmental funds and all other governmental funds at June 30, 2022 are as follows:
General
Disaster Capital Debt Non-Major Total
Accounting Improvement Service Governmental Governmental General Fund Fund Fund Fund Fund Funds
Nonspendable:
Prepaid items $126,958 $126,958
Loan receivable 3,641,599 3,641,599
Advances
Subtotal 3,768,557 3,768,557
Restricted for:
PARS Pension Trust 342,510 342,510
Supplemental
law enforcement $225,763 225,763
Trust Activities 2,757,814 2,757,814
Catastrophic events $6,088,414 6,088,414
Streets and roads 2,446,822 2,446,822
Housing 606,331 606,331
Parking 2,237,102 2,237,102
Debt services $5,317,384 5,317,384
Stormwater operations 324,165 324,165
Capital projects $6,722,964 2,697,426 9,420,390
Subtotal 342,510 6,088,414 6,722,964 5,317,384 11,295,423 29,766,695 Assigned for:
Fund Balance Reserve 3,810,040 3,810,040
Facility Main & Replace Reserve 205,000 205,000
Compensated Absences Reserve 200,000 200,000
Child Care Reserve 488,591 488,591
Legal Reserve 100,000 100,000
Subtotal 4,803,631 4,803,631
Unassigned 7,377,526 (619,786) 6,757,740
Total $16,292,224 $6,088,414 $6,722,964 $5,317,384 $10,675,637 $45,096,623 C. Net Investment in Capital Assets
The Net Investment in Capital Assets are calculated as below:
Governmental Business-Type
Activities Activities Total
Capital Asset, net of accumulated depreciation $88,559,682 $62,561,864 $151,121,546 Less: Capital debt (19,067,133) (36,463,566) (55,530,699) Plus: Unspent bond proceeds - - -
Net Investment in Capital Asset $69,492,549 $26,098,298 $95,590,847 D. Restatement of beginning fund balances and net position During the fiscal year 2022, the City performed a reconciliation of various funds and accounts, and as a result, the beginning fund balances for General Fund, the Housing Successor special revenue funds, and the beginning net position for the Sewer Utility enterprise fund and the Successor Agency Private Purpose Trust Fund were restated by ($655,344), $362,317, $1,095,458 and ($803,744) respectively. As a result, the Beginning net positions at July 1, 2021 for the Governmental Activities and Business Activities were restated by ($293,027) and $1,095,458 respectively.
86 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 12 – Contingencies:
Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies, principally the Federal Government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time, although the City expects such amounts, if any, to be immaterial.
NOTE 13 – Successor Agency to Former Redevelopment Agency Activities:
On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 (“the Bill”) that provides for the dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of the City of Pacifica that previously had reported a redevelopment agency within the reporting entity of the City as a blended component unit. On January 23, 2012, the City Council elected to become the Successor Agency for the former redevelopment agency in accordance with the Bill as part of the City resolution number 01- 2012.
Long Range Property Management Plan – On December 10, 2015, the Successor Agency received confirmation from the California Department of Finance that it had reviewed and approved the Successor Agency’s Long Range Property Management Plan (LRPMP).
Loan Payable to the City – Please see Note 10.
Long-term Debt – Long-term debt of the Successor Agency as of June 30, 2022, consisted of the following:
Balance Balance Due in
July 01, 2021 Additions Retirements June 30, 2022 One Year $3,694,796 $57,000 ($110,197) $3,641,599 $125,335
1,015,000 ($70,000) 945,000 75,000
Total $4,709,796 $57,000 ($180,197) $4,586,599 $200,335 2004 Tax allocation bonds
Loan payable to City
2004 Tax Allocation Bonds: In August 2004, the former Redevelopment Agency (Agency) issued $1,725,000 in Rockaway Beach Redevelopment Project 2004 Tax Allocation Bonds at interest rates ranging from 2.9% to 5.75%. The net proceeds of the bonds were issued to refinance redevelopment activities by repaying a portion of the loan made by the City to the Agency and to establish a reserve fund. Interest on the bonds will be payable semiannually on January 1 and July 1 each year, commencing January 1, 2005. The bonds mature on July 1, 2031. The bonds are payable exclusively from pledged tax revenues to be derived from the project area and from the amounts on deposits in certain funds and accounts, including the reserve account and the revenue account.
The Bonds are general obligations of the Agency payable by the Agency. The bond covenants contain events of default that require the revenue of the Agency to be applied by the Trustee as specified in the terms of the agreement if any of the following conditions occur: default on debt service payments; the failure of the Agency to observe or perform the conditions, covenants, or agreement terms of the debt; bankruptcy filing by the Agency; or if any court or competent jurisdiction shall assume custody or control of the Agency. No such events occurred during the fiscal year ending June 30, 2022.
87 CITY OF PACIFICA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTE 13 – Successor Agency to Former Redevelopment Agency Activities (Continued):
Annual debt service requirements, to maturity, for the 2004 Tax Allocation Bonds are as follows:
Fiscal year ended Principal Interest Total
2023 $75,000 $52,084 $127,084
2024 75,000 47,809 122,809
2025 80,000 43,392 123,392
2026 85,000 38,669 123,669
2027 90,000 33,638 123,638
2028 - 2032 540,000 81,363 621,363
Total $945,000 $296,955 $1,241,955
88 REQUIRED SUPPLEMENTARY INFORMATION
CITY OF PACIFICA
REQUIRED SUPPLEMENTARY INFORMATION
LAST 10 YEARS
Miscellaneous Agent Multiple-Employer Defined Benefit Pension Plan Last 10 Years*
Schedule of Changes in Net Pension Liability and Related Ratios Miscellaneous
6/30/2014 6/30/2015 6/30/2016 6/30/2017
Total Pension Liability
Service Cost $1,445,205 $1,427,162 $1,495,380 $1,631,204 Interest 5,862,583 6,123,624 6,346,516 6,501,283
Differences between expected and actual experience (328,078) (755,420) (1,136,322) Changes in assumptions (1,478,509) 5,308,829
Changes in benefits
Benefit payments, including refunds of employee
contributions (3,440,758) (3,784,383) (4,047,332) (4,185,238) Net change in total pension liability 1,959,816 3,867,030 3,039,144 8,119,756 Total pension liability - beginning 79,165,549 83,032,579 84,992,395 88,031,539 Total pension liability - ending (a) $83,032,579 $84,992,395 $88,031,539 $96,151,295 Plan fiduciary net position
Contributions - employer $993,077 $1,081,227 $1,256,738 $1,459,527 Contributions - employee 622,734 622,660 685,119 711,067 Net investment income 11,283,773 1,641,405 382,638 7,967,324 Administrative expense (83,654) (45,303) (107,140)
Benefit payments, including refunds of employee
contributions (3,440,758) (3,784,383) (4,047,332) (4,185,238) Net Plan to Plan Resource Movement
Other Miscellaneous Income/(Expense)
Net change in plan fiduciary net position 9,458,826 (522,745) (1,768,140) 5,845,540 Plan fiduciary net position - beginning 65,398,696 74,857,522 74,334,777 72,566,637 Plan fiduciary net position - ending (b) $74,857,522 $74,334,777 $72,566,637 $78,412,177 Net pension liability - ending (a)-(b) $8,175,057 $10,657,618 $15,464,902 $17,739,118 Plan fiduciary net position as a percentage of the total pension liability 90.15% 87.46% 82.43% 81.55%
Covered payroll $7,982,929 $8,049,221 $8,463,442 $9,007,097 Net pension liability as percentage of covered payroll 102.41% 132.41% 182.73% 196.95% Notes to Schedule:
* Fiscal year 2015 was the 1st year of implementation.
Benefit changes - The figures above do not include any liability impact that may have resulted from plan changes which occurred after the June 30. This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a.
Golden Handshakes).
Changes in assumptions - In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent. In 2016, 2018, 2019, 2020 and 2021, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense.) In 2014, amounts reported were based on the 7.5 percent discount rate. 90 CITY OF PACIFICA
REQUIRED SUPPLEMENTARY INFORMATION
LAST 10 YEARS
Miscellaneous
6/30/2018 6/30/2019 6/30/2020 6/30/2021
$1,716,353 $1,756,360 $1,869,810 $1,748,773
6,687,032 7,042,527 7,404,044 7,659,792
(407,869) 1,371,619 1,330,180 (230,958)
(739,131)
(4,675,098) (4,971,021) (5,288,206) (5,522,755)
2,581,287 5,199,485 5,315,828 3,654,852
96,151,295 98,732,582 103,932,067 109,247,895
$98,732,582 $103,932,067 $109,247,895 $112,902,747
$1,571,937 $1,896,427 $2,217,115 $2,515,162
749,462 733,521 769,486 782,756
6,524,986 5,347,965 4,206,783 19,473,439
(122,188) (58,680) (120,079) (86,870)
(4,675,098) (4,971,021) (5,288,206) (5,522,755)
(191)
(232,037) 191
3,816,871 2,948,403 1,785,099 17,161,732
78,412,177 82,229,048 85,177,451 86,962,550
$82,229,048 $85,177,451 $86,962,550 $104,124,282
$16,503,534 $18,754,616 $22,285,345 $8,778,465
83.28% 81.95% 79.60% 92.22%
$9,138,180 $9,754,931 $11,058,613 $10,084,809
180.60% 192.26% 201.52% 87.05%
91 CITY OF PACIFICA
REQUIRED SUPPLEMENTARY INFORMATION
LAST 10 YEARS
Fiscal Year Ended June 30 2015 2016 2017 2018 2019
Actuarially determined contribution $1,081,226 $1,256,739 $1,454,468 $1,571,900 $1,896,427 Contributions in relation to the
actuarially determined contributions (1,081,226) (1,256,739) (1,454,468) (1,571,900) (1,896,427) Contribution deficiency (excess) $0 $0 $0 $0 $0
Covered payroll $8,049,221 $8,463,442 $9,007,097 $9,138,180 $9,754,931 Contributions as a % of covered 13.43% 14.85% 16.15% 17.20% 19.44% Notes to Schedule
Valuation date: 6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 Fiscal Year Ended June 30 2020 2021 2022
Actuarially determined contribution $2,217,115 $2,515,162 $2,691,698 Contributions in relation to the
actuarially determined contributions (2,217,115) (2,515,162) (2,691,698) Contribution deficiency (excess) $0 $0 $0
Covered payroll $11,058,613 $10,084,809 $10,091,313
Contributions as a % of covered 20.05% 24.94% 26.67%
Notes to Schedule
Valuation date: 6/30/2018 6/30/2019 6/30/2020
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry age normal
Amortization method Level percentage of payroll
Asset valuation method Market Value of Assets
Inflation 2.75% for 2015 to 2019, 2.625% for 2020, 2.50% for 2021, and 2.375% for 2022.
Salary increases Varies by entry age and service
Payroll Growth 2.75%
Retirement age
Mortality
* Fiscal year 2015 was the 1st year of implementation.
Schedule of Contributions
Last 10 Years*
Miscellaneous Agent Multiple-Employer Defined Benefit Pension Plan The probabilities of retirement are based on the CalPERS Experience Study.
The probabilities of mortality are based on the CalPERS Experience Study. Pre-retirement and Post-retirement mortality rates include 20 years of projected mortality improvement using Scale AA published by the Society of Actuaries for 2015 to 2018. For 2019, 2020, 2021, and 2022, pre-retirement and post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP2016 published by the Society of Actuaries.
Investment rate of return 7.50% for 2015 to 2018, 7.375% for 2019, 7.25% for 2020, 7.125% for 2021, and 7.000% for 2022, net of pension plan investment expense and administrative expenses, includes inflation
Miscellaneous
92 CITY OF PACIFICA
REQUIRED SUPPLEMENTARY INFORMATION
LAST 10 YEARS
Measurement Date 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 Plan's proportion of the Net Pension
Liability (Asset) 0.50100% 0.57100% 0.00000% 0.52919% 0.54700% Plan's proportion share of the Net Pension
Liability (Asset) $18,808,357 $20,914,148 $27,461,120 $31,620,401 $32,079,854 Plan's Covered Payroll $6,019,600 $5,843,663 $5,928,087 $6,058,030 $5,988,447 Plan's Proportionate Share of the Net
Pension Liability/(Asset) as a Percentage
of its Covered Payroll 312.45% 357.89% 463.24% 521.96% 521.96% Plan’s Fiduciary Net Position as a
Percentage of the Total Pension Liability 79.82% 78.40% 74.06% 73.31% 75.26% Measurement Date 6/30/2019 6/30/2020 6/30/2021
Plan's proportion of the Net Pension
Liability (Asset) 0.55658% 0.57053% 0.69850%
Plan's proportion share of the Net Pension
Liability (Asset) $34,744,594 $38,010,670 $24,515,482
Plan's Covered Payroll $6,575,368 $4,398,589 $7,147,760 Plan's Proportionate Share of the Net
Pension Liability/(Asset) as a Percentage
of its Covered Payroll 535.70% 528.41% 864.16%
Plan’s Fiduciary Net Position as a
Percentage of the Total Pension Liability 75.26% 75.10% 81.87% * Fiscal year 2015 was the 1st year of implementation.
Safety Plan
AND RELATED RATIOS AS OF THE MEASUREMENT DATE
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY Last 10 Years*
Safety Cost Sharing Multiple-Employer Defined Benefit Pension Plan 93 CITY OF PACIFICA
REQUIRED SUPPLEMENTARY INFORMATION
LAST 10 YEARS
Fiscal Year Ended June 30 2015 2016 2017 2018 2019
Actuarially determined contributions $1,437,730 $1,364,845 $2,158,037 $2,398,015 $2,830,926 Contributions in relation to the actuarially
determined contributions (1,437,730) (1,364,845) (2,158,037) (2,398,015) (2,830,926) Contribution deficiency (excess) $0 $0 $0 $0 $0
Covered payroll $5,843,663 $5,928,087 $6,058,030 $5,988,447 $6,575,368 Contributions as a percentage of covered
payroll 24.60% 23.02% 35.62% 40.04% 43.05%
Fiscal Year Ended June 30 2020 2021 2022
Actuarially determined contributions $2,002,059 $3,724,131 $3,932,902 Contributions in relation to the actuarially
determined contributions (2,002,059) (3,724,131) (3,932,902) Contribution deficiency (excess) $0 $0 $0
Covered payroll $4,398,589 $7,147,760 $7,319,572
Contributions as a percentage of covered
payroll 45.52% 52.10% 53.73%
Cost Sharing Multiple-Employer Defined Benefit Pension Plan Last 10 Fiscal Years*
SCHEDULE OF CONTRIBUTIONS
* Fiscal year 2015 was the first year of implementation.
Safety Plan
94 This Page Intentionally Left Blank
CITY OF PACIFICA
REQUIRED SUPPLEMENTARY INFORMATION
LAST 10 YEARS
PARS REP Agent Multiple-Employer Defined Benefit Pension Plan Last 10 Years*
Schedule of Changes in Net Pension Liability and Related Ratios PARS
6/30/2015 6/30/2016 6/30/2017 6/30/2018
Total Pension Liability
Service Cost $97,626 $55,073 $56,725 $47,461
Interest 218,058 228,048 238,515 244,298
Differences between expected and actual experience
Effect of economic/demographic gains or losses (136,732) (78,177) Effect of assumptions changes or inputs 143,356 196,706 Benefit payments, including refunds of employee
contributions (126,197) (144,782) (149,371) (157,202)
Net change in total pension liability 144,963 189,487 342,575 56,380 Total pension liability - beginning 3,161,548 2,972,061 3,306,511 3,649,086 Total pension liability - ending (a) $3,161,548 $3,306,511 $3,649,086 $3,705,466 Plan fiduciary net position
Contributions - employer $159,573 $127,848 $123,391 $121,576 Net investment income 44,261 7,840 172,456 133,898
Investment expense (8,227)
Benefit payments, including refunds of employee
contributions (126,197) (144,782) (149,371) (157,202)
Administrative expenses (8,448) (9,150) (8,664) (9,009) Net change in plan fiduciary net position 60,962 (18,244) 137,812 89,263 Plan fiduciary net position - beginning 1,994,520 2,055,482 2,037,238 2,175,050 Plan fiduciary net position - ending (b) $2,055,482 $2,037,238 $2,175,050 $2,264,313 Net pension liability - ending (a)-(b) $1,106,066 $1,269,273 $1,474,036 $1,441,153 Plan fiduciary net position as a percentage of the total pension liability 65.02% 61.61% 59.61% 61.11%
Covered payroll $1,485,442 $1,530,005 $1,303,994 $1,351,614 Net pension liability as percentage of covered payroll 74.46% 82.96% 113.04% 106.62% Notes to Schedule:
* Fiscal year 2015 was the 1st year of implementation.
Benefit changes - The figures above do not include any liability impact that may have resulted from plan changes which occurred after the actuarial valuation date. This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes).
Changes in assumptions - In 2017, the accounting discount rate reduced from 7.65% to 7.15%. In 2016, 2018, 2019, 2020, and 2021, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5% (net of administrative expense) to 7.65% (without a reduction for pension plan administrative expense). In 2014, amounts reported were based on the 7.5% discount rate.
96 CITY OF PACIFICA
REQUIRED SUPPLEMENTARY INFORMATION
LAST 10 YEARS
PARS
6/30/2019 6/30/2020 6/30/2021 6/30/2022
$48,885 $35,933 $36,921 $20,726
253,625 247,550 263,809 267,267
12,653
24,928 57,961
8,541
(176,795) (210,707) (227,211) (239,609)
119,640 158,006 73,519 73,312
3,705,466 3,825,106 3,983,112 4,056,631
$3,825,106 $3,983,112 $4,056,631 $4,129,943
$98,849 $96,419 $97,888 $97,904
136,800 65,576 492,499 (337,585)
(176,795) (210,707) (227,211) (239,609)
(9,066) (9,143) (9,559) (9,848)
49,788 (57,855) 353,617 (489,138)
2,264,313 2,314,101 2,256,246 2,609,863
$2,314,101 $2,256,246 $2,609,863 $2,120,725
$1,511,005 $1,726,866 $1,446,768 $2,009,218
60.50% 56.65% 64.34% 51.35%
$988,068 $1,015,240 $630,037 $647,363
152.93% 170.09% 229.63% 310.37%
97 CITY OF PACIFICA
REQUIRED SUPPLEMENTARY INFORMATION
LAST 10 YEARS
Fiscal Year Ended June 30 2015 2016 2017 2018 2019
Actuarially determined contribution $220,169 $127,848 $127,848 $121,576 $98,849 Contributions in relation to the
actuarially determined contributions (220,169) (127,848) (127,848) (121,576) (98,849) Contribution deficiency (excess) $0 $0 $0 $0 $0
Covered payroll $1,485,442 $1,530,005 $1,303,994 $1,351,614 $988,068 Net Pension Liability as a
percentage of covered payroll 14.82% 8.36% 9.80% 8.99% 10.00% Notes to Schedule
Valuation date: 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2017 Fiscal Year Ended June 30 2020 2021 2022
Actuarially determined contribution $96,419 $97,888 $97,904 Contributions in relation to the (96,419) (97,888) (97,904) Contribution deficiency (excess) $0 $0
Covered payroll $1,015,240 $630,037 $647,363
Net Pension Liability as a 9.50% 15.54% 15.12%
Notes to Schedule
Valuation date: 6/30/2018 6/30/2019 6/30/2020
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry age normal
Amortization method Level dollar of payroll, closed
Remaining amortization period 15 years as of June 30, 2017 Asset valuation method None
Inflation 2.50%
Salary increases
Investment rate of return 6.75%
Retirement
Mortality
* Fiscal year 2015 was the 1st year of implementation.
PARS
Consistent with the Non-Industrial rates used to value the Miscellaneous CalPERS Pension Plans.
Retirement rates of 30% per year starting at age 55 with required years of service.
Consistent with the rates used to value the Miscellaneous Agency CalPERS Pension Plans (Entry Age 30) PARS Retirement Enhance Plan (REP) Defined Benefit Pension Agent Multiple-Employer Plan Last 10 Years*
Schedule of Contributions
98 CITY OF PACIFICA
REQUIRED SUPPLEMENTARY INFORMATION
LAST 10 YEARS
SCHEDULE OF CHANGES IN THE TOTAL OPEB LIABILITY AND RELATED RATIOS Single Employer Other Post-Employment Benefits Plan (OPEB) Last 10 fiscal years*
Measurement Date 6/30/2019 6/30/2020 6/30/2021 6/30/2022 Total OPEB Liability (1)
Service Cost $303,274 $328,277 $368,174 $524,816
Interest 233,437 234,697 239,312 195,445
Changes of benefit terms
Differences between expected and actual experience (527,075) 254,368 Changes of assumptions (320,279) 345,836 1,192,492 72,300 Benefit payments (173,450) (167,371) (184,166) (225,411) Net change in total OPEB liability (484,093) 741,439 1,870,180 567,150 Total OPEB liability - beginning 6,304,041 5,819,948 6,561,387 8,431,567 Total OPEB liability - ending (a) $5,819,948 $6,561,387 $8,431,567 $8,998,717 Covered-employee payroll $18,617,151 $16,078,058 $16,614,061 $17,232,569 Total OPEB liability as a percentage of covered-employee payroll 31.3% 40.8% 50.7% 52.2% Notes to Schedule:
(1) No assets are accumulated in a trust that meets the criteria in paragraph 4 of Governmental Accounting Standards Board Statement No. 75. * Fiscal year 2018 was the first year of implementation. 99 Variance with
Budgeted Amounts Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:
Taxes:
Property $14,317,669 $14,317,669 $14,456,630 $138,961
Sales 1,657,184 1,657,184 1,754,500 97,316
Franchise 2,860,153 3,017,753 3,136,433 118,680
Other 4,911,391 4,706,041 4,936,881 230,840
Licenses and permits 884,088 919,388 1,026,381 106,993
Fines and forfeitures 267,000 180,000 167,612 (12,388)
209,888 230,416 222,511 (7,905)
8,861,151 10,881,551 10,875,321 (6,230)
Charges for current services 3,587,329 4,005,429 3,649,015 (356,414) Recreation programs 558,702 444,602 456,080 11,478
Other 1,605,591 1,617,291 1,840,182 222,891
Total revenues 39,720,146 41,977,324 42,521,546 544,222 Expenditures:
Current
General Government:
City Council 188,754 188,754 206,589 (17,835)
City Manager 1,863,480 2,054,024 1,569,294 484,730
Human Resources 955,613 961,085 925,742 35,343
City Attorney 984,471 1,204,471 1,421,676 (217,205)
Finance 2,163,175 2,171,019 2,012,181 158,838
Non-departmental 159,898 159,898 1,107,377 (947,479)
6,315,391 6,739,251 7,242,859 (503,608)
Public Safety:
Police 10,520,945 10,792,926 10,739,864 53,062
Fire 6,916,714 7,527,446 7,843,125 (315,679)
Total Public Safety 17,437,659 18,320,372 18,582,989 (262,617) Community development:
Planning 3,878,106 4,045,778 3,056,701 989,077
Code enforcement
Total Community Development 3,878,106 4,045,778 3,056,701 989,077 Public Works:
Engineering Services 1,269,153 1,434,970 1,246,001 188,969 Street and traffic maintenance 1,607,847 1,612,869 1,518,672 94,197 Building maintenance and improvement 604,912 604,912 538,845 66,067 Fishing pier/rest stop maintenance 309,761 309,761 302,571 7,190 City parks and playfields 853,552 853,552 765,454 88,098 Total Public Works 4,645,225 4,816,064 4,371,543 444,521 (Continued)
CITY OF PACIFICA
Use of money and property
Intergovernmental
Total General Government
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2022
100
Variance with
Budgeted Amounts Final Budget
Actual Positive
Original Final Amounts (Negative)
CITY OF PACIFICA
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2022
Expenditures
Current:
Parks, Beaches, and Recreation:
Parks, beaches, and recreation $317,280 $268,412 $334,416 ($66,004) Community center programs 204,954 204,954 166,213 38,741 Cultural arts 5,202 5,202 (511) 5,713
Elementary age recreation 183,238 163,238 96,457 66,781 Teens and j-teens recreation 62,574 62,574 47,825 14,749 Adult sports 100 100 59 41
Senior 242,950 242,950 181,720 61,230
Instructional class 85,391 85,391 62,380 23,011
Recreation swimming 348,276 348,276 340,405 7,871
Swim Team 79,509 79,509 109,316 (29,807)
Special community recreation 93,292 93,292 68,712 24,580 Special projects 3,242,792 3,514,247 3,378,691 135,556
Total Parks, Beaches and Recreation 4,865,558 5,068,145 4,785,683 282,462 Capital Outlay 182,000 53,932 60,620 (6,688)
Total Expenditures 37,323,939 39,043,542 38,100,395 943,147 Excess (Deficit) of Revenues over Expenditures 2,396,207 2,933,782 4,421,151 1,487,369 Other Financing Sources (Uses)
Transfers in 1,130,919 1,130,919 1,130,919
Transfers (out) (5,099,670) (5,099,670) (5,105,875) (6,205) Total Other Financing Sources (Uses) (3,968,751) (3,968,751) (3,974,956) (6,205) Net Change in Fund Balance ($1,572,544) ($1,034,969) 446,195 $1,481,164 Fund Balance at Beginning of Year 15,846,029
Fund Balance at End of Year $16,292,224
101
Variance
Final Positive
Budget Actual (Negative)
Revenues:
Taxes $1,990,993 $1,990,993
Use of money and property
Other 147,106 147,106
Total revenues 2,138,099 2,138,099
Expenditures:
Current
Public Safety 10,831 (10,831)
Capital outlay $506,673 552,783 (46,110)
Total expenditures 506,673 563,614 (56,941)
($506,673) 1,574,485 $2,195,040
Fund balance (deficit) at beginning of year 4,513,929
Fund balance (deficit) at end of year $6,088,414
DISASTER ACCOUNTING SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE
CITY OF PACIFICA
Net change in fund balance
FOR THE YEAR ENDED JUNE 30, 2022
102
CITY OF PACIFICA
NOTES TO THE SUPPLEMENTARY INFORMATION
FISCAL YEAR ENDED JUNE 30, 2022
1. BUDGETARY BASIS OF ACCOUNTING
The City prepares a budget for each fiscal year on or before June 30. Budgeted expenditures are enacted into law through the passage of an Appropriation Resolution. This resolution mandates the maximum authorized expenditures for the fiscal year and cannot be exceeded except by subsequent amendments to the budget by the City Council.
From the effective date of the budget, which is adopted and controlled at the department level, the amounts stated therein as proposed expenditures become appropriations to the various City departments. The legal level of control is the department. The City Council may amend the budget by resolution during the fiscal year.
Formal budgetary integration is employed as a management control device during the fiscal year for the General fund and Special Revenue and Capital Project Funds. The General Fund budget and Special Revenue and Capital Project Fund budgets are adopted on a basis consistent with accounting principles generally accepted in the United States (USGAAP) and are consistent with the basis used for financial reporting. Accordingly, actual revenues and expenditures can be compared with related budget amounts without any reconciliation.
103
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SUPPLEMENTARY INFORMATION
CITY OF PACIFICA
BUDGETARY COMPARISON SCHEDULE
DEBT SERVICE FUND
FOR THE YEAR ENDED JUNE 30, 2022
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:
Use of money and property $7,000 $111 ($6,889)
Other 1,091,137 1,091,137
Total Revenues 7,000 1,091,248 1,084,248
Expenditures:
Debt Service:
1,691,069 1,596,632 94,437
1,211,786 946,574 265,212
Total expenditures 2,902,855 2,543,206 359,649
(2,895,855) (1,451,958) 1,443,897
Proceeds from lease financing 4,000,000 4,000,000
Transfers in 2,684,908 2,541,941 (142,967)
2,684,908 6,541,941 3,857,033
($210,947) 5,089,983 $5,300,930
Fund balance at beginning of year 227,401
Fund balance at end of year $5,317,384
Net change in fund balance
Principal
Interest and fiscal charges
Excess (Deficit) of Revenues over Expenditures
Other Financing Sources (Uses)
Total Other Financing Sources (Uses)
P
106
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:
Taxes $1,500,000 $1,500,000
Licenses and permits 25,000 52,995 $27,995
Use of money and property 6,355,000 320,000 (6,035,000) Total revenues 7,880,000 1,872,995 (6,007,005)
Expenditures:
Current:
Community development 507 (507)
Capital Outlay 13,247,000 2,269,998 10,977,002
Total expenditures 13,247,000 2,270,505 10,976,495
(5,367,000) (397,510) 4,969,490
Other Financing sources (Uses)
Transfers in 3,820,000 3,820,000
Total Other Financing Sources (Uses) 3,820,000 3,820,000 ($1,547,000) 3,422,490 $4,969,490
Fund balance (deficit) at beginning of year 3,300,474
Fund balance (deficit) at end of year $6,722,964
Net Change in Fund Balance
CITY OF PACIFICA
BUDGETARY COMPARISON SCHEDULE
GENERAL CAPITAL IMPROVEMENT
CAPITAL PROJECTS FUND
FOR THE YEAR ENDED JUNE 30, 2022
Excess (Deficit) of Revenues over Expenditures
107
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CITY OF PACIFICA
NON-MAJOR GOVERNMENTAL FUNDS
FISCAL YEAR ENDED JUNE 30, 2022
SPECIAL REVENUE FUNDS
Special Revenue Funds are created in accordance with Federal, State, or City regulations which require that monies apportioned from these specific funds be spent only for certain designated purposes. Funds included in this fund category are:
GAS TAX SPECIAL REVENUE FUND – This fund was established to receive and expend the City’s allocation of the State Gasoline Taxes. Each City is allocated funds on a population basis in accordance with Section 2103, 2105, 2106, 2107 and 2107.5 of the California Street and Highway Code. Population is determined by the latest Federal Census or survey requested and certified by the Cities and conducted by the State Department of Finance.
Expenditures may be made for construction or purchasing of right-of-way on minor streets.
Expenditures of money apportioned under Section 2107 may be made for any street purpose.
Under Section 2107.5 a flat allocation of $6,000 per year is granted the City for street engineering.
DAVIES TRUST SPECIAL REVENUE FUND – This fund was established to account for a donation by a private individual which is restricted for specific purposes. The funds are to be used to help acquire, build, remodel, improve, support, and maintain the equipment, buildings, grounds, yard, gardens, and landscaped areas of the various parks, beaches, and recreational area located in Pacifica, to conduct related educational and recreational programs for the benefit of the general public.
SUPPLEMENTAL LAW ENFORCEMENT SERVICES FUND – This fund was created to account for revenues and expenditures associated with money allocated by the legislature to all cities and counties throughout the state to supplement front line law enforcement services.
NPDES STORMWATER FUND – The NPDES (National Pollution Discharge Elimination System) Stormwater Fund was established in fiscal year 1994-95 to account for revenues and expenditures associated with Federal and State mandated stormwater operations.
HOUSING IN-LIEU FUND – This fund was established to account for receipts from fees imposed on developers to provide for improvements.
PARKING IN-LIEU FUND – This fund was established to account for receipts and expenditures from fees imposed on developers to provide for parking facilities improvements.
STREET CONSTRUCTION FUND – This fund was established to account for Measure A and the transportation related local funding and other grant funding for streets and roads.
EXCESS ERAF FUND – This fund was established to account for excess education augmentation revenue that the City receives from the County.
PARKS, BEACHES AND RECREATION FUND – This fund was established to account for various donations specifically designated for Park, Beaches and Recreation activities.
HOUSING SUCCESSOR FUND – This fund accounts for the assets and activities to the dissolved low and moderate income housing fund.
109
CITY OF PACIFICA
NON-MAJOR GOVERNMENTAL FUNDS
FISCAL YEAR ENDED JUNE 30, 2022
CAPITAL PROJECTS FUNDS
Capital Projects Funds are established to account for financial resources to be used for the acquisition, construction, and improvement of major capital facilities of the City. Appropriations are made from the funds annually.
HIGHWAY 1 IMPROVEMENT FUND – This fund is financed by traffic impact mitigation fees as outlined in the Pacifica Municipal Code (Section 8-15.01 to Section 8-15.06).
MANOR DRIVE IMPROVEMENT FUND – This fund was established to account for the Manor Drive/Palmetto Avenue/Oceana Boulevard intersection construction and is financed by traffic impact mitigation fees as outlined in the Pacifica Municipal Code (Section 8-18.01 to Section 8-18.06).
AIRCRAFT NOISE PROJECT FUND – This fund was established to record the financial transactions of an Aircraft Noise Abatement Project funded with Federal and San Francisco Airport grants.
PARKS AND PLAYFIELD FUND – This fund was financed by Parkland Dedication Fees as outlined in the Pacifica Municipal Code (Section 8-19.01 to Section 8-19.03).
PLANNED LOCAL DRAINAGE FUND – Revenues are derived from fees levied on new construction in local districts. Funds can be utilized only for the drainage system in those particular districts.
PACIFICA LIBRARY FUND – This fund was established to account for grants and other sources for the construction of Pacifica’s library.
FRONTIERLAND REMEDIATION FUND – This fund was established to account for remediation fees and remediation costs related to the closed landfill site at the Frontierland Park location. Recology of the Coast, the City’s recyclable/organic materials and solid waster collection franchisee pays the City a remediation fee of $6,250 per month ($75,000 annually). 110
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CITY OF PACIFICA
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
JUNE 30, 2022
SPECIAL REVENUE FUNDS
Supplemental
Law
Gas Davies Enforcement NPDES Housing
Tax Trust Services Stormwater In-Lieu
Assets:
Cash and investments $238,756 $179,793 $244,014
Restricted cash and investments $3,001,260
Receivable:
Accounts $142,667 152,375
Advance to other funds
$142,667 $3,001,260 $238,756 $332,168 $244,014
Liabilities and Fund Balances:
Accounts payable $88,589 $50 $12,993 $8,003
Due to other funds 203,674 243,396
Advance from other funds
292,263 243,446 12,993 8,003
Restricted 2,757,814 225,763 324,165 $244,014
Unassigned (149,596)
(149,596) 2,757,814 225,763 324,165 244,014
$142,667 $3,001,260 $238,756 $332,168 $244,014
Total Fund Balances (Deficits)
Total Liabilities and Fund
Balances
Total Assets
Total Liabilities
Liabilities:
Fund Balances:
112
SPECIAL REVENUE FUNDS CAPITAL PROJECTS FUNDS
Parks,
Beaches Manor Aircraft
Parking Street and Housing Highway 1 Drive Noise
In-Lieu Construction Recreation Successor Improvement Improvement Project $116,142 $2,484,281 $2,124,916 $362,317 $619,032 $957,036 $411 $116,142 $2,484,281 $2,124,916 $362,317 $619,032 $957,036 $411 $37,459 $3,956 $782 $81,145
37,459 3,956 782 81,145
$116,142 2,446,822 2,120,960 $362,317 618,250 $875,891 $411 116,142 2,446,822 2,120,960 362,317 618,250 875,891 411 $116,142 $2,484,281 $2,124,916 $362,317 $619,032 $957,036 $411 (Continued)
113
CITY OF PACIFICA
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
JUNE 30, 2022
CAPITAL PROJECTS FUNDS
Parks Planned
and Local Pacifica Frontierland
Playfield Drainage Library Remediation Total
Assets:
Cash and investments $681,869 $136,595 $400,905 $8,546,067 Restricted cash and investments 3,001,260
Receivable:
Accounts 295,042
Advance to other funds
$681,869 $136,595 $400,905 $11,842,369
Liabilities and Fund Balances:
Accounts payable $1,042 $15,453 $249,472
Due to other funds $470,190 917,260
Advance from other funds
1,042 470,190 15,453 1,166,732
Restricted 680,827 121,142 $400,905 11,295,423
Unassigned (470,190) (619,786)
680,827 (470,190) 121,142 400,905 10,675,637
$681,869 $136,595 $400,905 $11,842,369 Total Liabilities and Fund Balances Total Assets
Liabilities:
Total Liabilities
Fund Balances:
Total Fund Balances (Deficits)
114
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CITY OF PACIFICA
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2022
SPECIAL REVENUE FUNDS
Supplemental
Law
Gas Davies Enforcement NPDES Housing
Tax Trust Services Stormwater In-Lieu
Revenues:
Taxes:
Other taxes $1,666,585 $187,355
Charges for services 11,955
Use of money and property $892
Intergovernmental 150,636 $157,556
Other 25 8,265 $791
Total Revenues 1,817,246 892 157,556 207,575 791
Expenditures:
Current:
General government 208
Public Safety 75,607
Community development
Public works 547,389 98,993
Recreation
8,224 39,441 92,582
Total Expenditures 555,613 39,649 168,189 98,993
Excess (Deficit) of revenues
over expenditures 1,261,633 (38,757) (10,633) 108,582 791 Other financing sources (Uses)
Transfers in 20,000
Transfers (out) (1,222,574) (325,000) (132,081)
(1,222,574) (325,000) (112,081)
39,059 (363,757) (10,633) (3,499) 791
Fund Balances at beginning of year,
restated (188,655) 3,121,571 236,396 327,664 243,223
Fund Balances at end of year ($149,596) $2,757,814 $225,763 $324,165 $244,014 Net change in fund balances
Capital outlay
Total Other Financing Sources
(Uses)
116
SPECIAL REVENUE FUNDS CAPITAL PROJECTS FUNDS
Parks,
Beaches Manor Aircraft
Parking Street and Housing Highway 1 Drive Noise
In-Lieu Construction Recreation Successor Improvement Improvement Project $1,768,958
$39,296
$422
39,046
10,799 $4,670
1,779,757 422 78,342 4,670
2,440,956 28,102
25,379
42,534 81,145
2,440,956 25,379 70,636 81,145
(661,199) (24,957) 7,706 (76,475)
750,000
(1,153,662)
(403,662)
(1,064,861) (24,957) 7,706 (76,475)
$116,142 3,511,683 2,145,917 $362,317 610,544 952,366 $411 $116,142 $2,446,822 $2,120,960 $362,317 $618,250 $875,891 $411 (Continued)
117
CITY OF PACIFICA
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2022
CAPITAL PROJECTS FUNDS
Parks Planned
and Local Pacifica Frontierland
Playfields Drainage Library Remediation Total
Revenues:
Taxes:
Other taxes $3,622,898
Charges for services 51,251
Use of money and property 1,314
Intergovernmental 347,238
Other $147,617 $6,250 178,417
Total Revenues 147,617 6,250 4,201,118
Expenditures:
Current:
General government 208
Public Safety 75,607
Community development 15,899 15,899
Public works $645,236 3,760,676
Recreation 25,379
$15,642 279,568
Total Expenditures 15,899 645,236 15,642 4,157,337
Excess (Deficit) of revenues
over expenditures 131,718 (645,236) (15,642) 6,250 43,781 Other financing sources (Uses)
Transfers in 30,000 800,000
Transfers (out) (2,833,317)
30,000 (2,033,317)
131,718 (645,236) 14,358 6,250 (1,989,536)
Fund Balances at beginning of year, restated 549,109 175,046 106,784 394,655 12,665,173 Fund Balances at end of year $680,827 ($470,190) $121,142 $400,905 $10,675,637 Capital outlay
Total Other Financing Sources
(Uses)
Net change in fund balances
118
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CITY OF PACIFICA
COMBINING SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
SPECIAL REVENUE FUNDS
Variance Variance
Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative)
Revenues:
Taxes
Other taxes $1,649,657 $1,666,585 $16,928
Charges for services
Use of money and property $892 $892
Intergovernmental 150,636 150,636
Other 25 25
Total Revenues 1,649,657 1,817,246 167,589 892 892
Expenditures:
Current:
General government 208 (208)
Public Safety
Community development
Public works 505,446 547,389 (41,943)
Recreation
Capital outlay 20,000 8,224 11,776 $709,400 39,441 669,959 Total Expenditures 525,446 555,613 (30,167) 709,400 39,649 669,751 1,124,211 1,261,633 137,422 (709,400) (38,757) 670,643
Other financing sources (Uses):
Transfers in
Transfers (out) (1,222,574) (1,222,574) (325,000) (325,000) Total Other Financing Sources (Uses) (1,222,574) (1,222,574) (325,000) (325,000) Net change in fund balance ($98,363) 39,059 $137,422 ($1,034,400) (363,757) $670,643 Fund Balances at beginning of year, restated (188,655) 3,121,571 Fund Balance at end of year ($149,596) $2,757,814
Excess (Deficit) of Revenues over
Expenditures
Gas
Tax
Davies
Trust
120
SPECIAL REVENUE FUNDS
Variance Variance Variance
Final Positive Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $178,000 $187,355 $9,355
11,955 11,955
$100,000 $157,556 $57,556
8,265 8,265 $791 $791
100,000 157,556 57,556 178,000 207,575 29,575 791 791
68,800 75,607 (6,807) 93,775 98,993 (5,218)
58,200 92,582 (34,382)
127,000 168,189 (41,189) 93,775 98,993 (5,218)
(27,000) (10,633) 16,367 84,225 108,582 24,357 791 791
20,000 20,000
(132,081) (132,081)
(112,081) (112,081)
($27,000) (10,633) $16,367 ($27,856) (3,499) $24,357 791 $791 236,396 327,664 243,223
$225,763 $324,165 $244,014
(Continued)
Enforcement Services NPDES Stormwater
Supplemental Law
Housing In-Lieu
121
CITY OF PACIFICA
COMBINING SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
SPECIAL REVENUE FUND
Variance Variance
Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative)
Revenues:
Taxes
Other taxes $1,455,600 $1,768,958 $313,358
Charges for services
Use of money and property $422 $422
Intergovernmental
Other 10,799 10,799
Total Revenues 1,455,600 1,779,757 324,157 422 422
Expenditures:
Current:
General government
Public Safety
Community development
Public works 3,945,534 2,440,956 3,945,534
Recreation 25,379 (25,379)
Capital outlay 5,000 5,000
Total Expenditures 3,950,534 2,440,956 3,950,534 25,379 (25,379) (2,494,934) (661,199) 1,833,735 (24,957) (24,957)
Other financing sources (Uses)
Transfers in 750,000 750,000
Transfers (out) (1,153,662) (1,153,662)
Total Other Financing Sources (Uses) (403,662) (403,662) Net change in fund balance ($2,898,596) (1,064,861) $1,833,735 (24,957) ($24,957) Fund Balances at beginning of year, restated 3,511,683 2,145,917 Fund Balance at End of Year $2,446,822 $2,120,960
Excess (Deficit) of Revenues over
Expenditures
Parks, Beaches
Street Construction and Recreation
122
CAPITAL PROJECTS FUND
Variance Variance Variance
Final Positive Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $39,296
$25,000 39,046 $14,046
$4,670 $4,670 $91,200 $147,617 $56,417
25,000 78,342 14,046 4,670 4,670 91,200 147,617 56,417
200,000 15,899 184,101
4,000 28,102 (24,102)
25,000 42,534 (17,534) $840,000 81,145 758,855
29,000 70,636 (41,636) 840,000 81,145 758,855 200,000 15,899 184,101 (4,000) 7,706 11,706 (840,000) (76,475) 763,525 (108,800) 131,718 240,518 ($4,000) 7,706 $11,706 ($840,000) (76,475) $763,525 ($108,800) 131,718 $240,518 610,544 952,366 549,109
$618,250 $875,891 $680,827
(Continued)
Highway 1 Improvement Manor Drive Improvement Parks and Playfields 123
CITY OF PACIFICA
COMBINING SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
CAPITAL PROJECTS FUND
Variance Variance
Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative)
Revenues:
Taxes
Other taxes
Charges for services
Use of money and property $2,560 ($2,560)
Intergovernmental
Other $6,250 $6,250
Total Revenues 2,560 (2,560) 6,250 6,250
Expenditures:
Current:
General government
Public Safety
Community development
Public works 667,705 $645,236 22,469
Capital outlay
Total Expenditures 667,705 645,236 22,469
(665,145) (645,236) 19,909 6,250 6,250
Other financing sources (Uses):
Transfers in
Transfers (out)
Total Other Financing Sources (Uses)
Net change in fund balance ($665,145) (645,236) $19,909 6,250 $6,250 Fund Balances at beginning of year, restated 175,046 394,655 Fund Balance at end of year ($470,190) $400,905
Excess (Deficit) of Revenues over
Expenditures
Planned Local Drainage Frontierland Remediation
124
CITY OF PACIFICA
INTERNAL SERVICE FUNDS
FISCAL YEAR ENDED JUNE 30, 2022
Internal Service Funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the government and to other government units, on a cost reimbursement basis.
MOTOR POOL FUND – City of Pacifica operates a central garage, which provides services to various City departments on a cost reimbursement basis. Revenues for the fund are derived from rentals to the departments for usage of the equipment. The fund can be used only for the operation and replacement of the equipment.
SELF INSURANCE FUND – City of Pacifica established Self Insurance Funds to cover Employee Dental Insurance, Workers' Compensation, General Liability, Property, and Automobile Liability Insurance. Expenses are restricted to payments of claims, the premium for umbrella insurance, administration costs, and expenditures relating to the Safety Committee.
FIRE EQUIPMENT REPLACEMENT FUND – City of Pacifica established this fund to fund and replace fire equipment for the Fire Department.
125
CITY OF PACIFICA
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET POSITION
JUNE 30, 2022
Motor Self Fire Equipment
Pool Insurance Replacement Total
Assets
Current Assets:
Cash and investments $814,310 $1,842,745 $13,932 $2,670,987 Receivable:
Accounts 1,523 1,523
18,715 18,715
Total Current Assets 834,548 1,842,745 13,932 2,691,225 Non-current assets:
Capital assets, not being depreciated 258,774 258,774
Capital assets, being depreciated,
net of accumulated depreciation 1,546,619 1,546,619
Total Noncurrent Assets 1,805,393 1,805,393
Total Assets 2,639,941 1,842,745 13,932 4,496,618
Liabilities
Current Liabilities:
Accounts payable 218,039 57,210 275,249
Accrued interest payable 330 330
Claims payable 304,204 304,204
Compensated absences 43,796 43,796
Bonds payable 13,488 13,488
Total Current Liabilities 275,653 361,414 637,067
Noncurrent Liabilities:
Bonds payable 120,707 120,707
Total Noncurrent Liabilities 120,707 120,707
Total Liabilities 396,360 361,414 757,774
Net Position
Net investment in capital assets 1,805,393 1,805,393
Unrestricted 438,188 1,481,331 13,932 1,933,451
Total Net Position $2,243,581 $1,481,331 $13,932 $3,738,844 Inventories
126
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
Motor Self Fire Equipment
Pool Insurance Replacement Total
Operating revenues:
Charges for services $1,203,911 $229,497 $1,433,408
Other operating income 1,064,699 1,064,699
Total operating revenues 1,203,911 1,294,196 2,498,107
Operating expenses:
Personnel services 592,253 592,253
Administration
Supplies and materials 518,590 1,251 519,841
Insurance expense 959,229 959,229
Outside contractors 342,213 342,213
Maintenance 91,380 91,380
Insurance claims 375,560 375,560
Depreciation 743,427 743,427
Total operating expenses 1,945,650 1,678,253 3,623,903
Operating Income (Loss) (741,739) (384,057) (1,125,796) Non-operating revenues (expenses):
Investment earnings
Interest and fiscal charges (3,939) (3,939)
Gain on sale of capital assets 24,491 24,491
Total non-operating revenues (expenses) 20,552 20,552
Income (Loss) Before Transfers (721,187) (384,057) (1,105,244) Transfers:
Transfers in 132,000 13,932 145,932
Change in net position (721,187) (252,057) 13,932 (959,312) Net position at beginning of year 2,964,768 1,733,388 4,698,156 Net position at end of year $2,243,581 $1,481,331 $13,932 $3,738,844
CITY OF PACIFICA
COMBINING STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN FUND NET POSITION
127
CITY OF PACIFICA
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2022
Fire
Motor Self Equipment
Pool Insurance Replacement Total
Cash Flows from Operating Activities
$1,206,111 $1,306,241 $2,512,352
(411,628) (1,245,890) (1,657,518)
(376,701) (376,701)
(574,539) (574,539)
219,944 (316,350) (96,406)
132,000 $13,932 145,932
Financing Activities 132,000 13,932 145,932
24,491 24,491
Purchase of capital assets (313,434) (313,434)
Principal paid on long term debt (12,578) (12,578)
(3,939) (3,939)
Net Cash Used by Capital and Related Financing
Activities (305,460) (305,460)
Net Cash Provided by Investing Activities
(85,516) (184,350) 13,932 (255,934)
899,826 2,027,095 2,926,921
$814,310 $1,842,745 $13,932 $2,670,987
(Continued)
Receipts from customers
Payments to suppliers and users
Payments for claims
Payments to employees
Net Cash Provided (Used) by Operating Activities
Cash Flows from Noncapital and Related Financing Activities Transfers in
Net Cash Provided by Noncapital and Related
Cash Flows from Capital and Related Financing Activities:
Proceeds from sale of capital assets
Interest paid
Cash Flows from Investing Activities:
Interest received
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at the Beginning of Fiscal Year Cash and Cash Equivalents ate End of Fiscal Year
128
CITY OF PACIFICA
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2022
Motor Self Self
Pool Insurance Insurance Total
Reconciliation of Operating Income (Loss) to Net Cash
Operating income (loss) ($741,739) ($384,057) ($1,125,796) Adjustments to Reconcile Operating Income (Loss)
to Net Cash Provided (Used) by Operating Activities:
Depreciation 743,427 743,427
Accounts receivable 2,200 12,045 14,245
Inventories
Accounts payable 198,360 56,803 255,163
Accrued liabilities (18) (18)
Claims payable (1,141) (1,141)
Compensated absences 17,714 17,714
$219,944 ($316,350) Net Cash Provided (Used) by Operating Activities ($96,406) Increase (Decrease) in Operating Liabilities:
Provided (Used) by Operating Activities:
(Increase) Decrease in Operating Assets:
129
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STATISTICAL SECTION
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CITY OF PACIFICA
STATISTICAL SECTION
FISCAL YEAR ENDED JUNE 30, 2022
This part of the City's Annual Comprehensive Financial Report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health.
Financial Trends
These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time.
Debt Capacity
These schedules present information to help the reader assess the affordability of the City's current level of outstanding debt and the ability to issue additional debt in the future.
Revenue Capacity
These schedules contain information to help the reader assess the City's most significant local revenue sources.
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place.
Operating Information
These schedules contain service data to help the reader understand how the information in the City's financial report relates to the services the City's provides and the activities it performs.
Property Tax Information
These schedules contain information to help the reader assess the City's property tax sources and changes.
Note: Unless otherwise noted, the information in these schedules is derived from the Annual Comprehensive Financial Reports for the relevant years. 133
CITY OF PACIFICA
Net Position by Component
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2013 2014 2015 2016
Governmental activities
Net investment in capital assets 56,461,478 $ 56,995,945 $ 56,431,400 $ 56,878,228 $ Restricted 7,944,025 9,049,015 11,517,455 13,808,573
Unrestricted (13,421,330) (14,105,441) (46,030,272) (39,126,535) Total governmental activities net position $ 51,939,519 50,984,173 $ 21,918,583 $ 31,560,266 $ Business-type activities
Net investments in capital assets 15,963,759 $ 17,679,506 $ 15,266,626 $ 15,985,969 $ Restricted
Unrestricted 5,238,849 5,663,853 9,163,991 9,672,252
Total business-type activities net position $ 23,343,359 21,202,608 $ 24,430,617 $ 25,658,221 $ Primary government
Net investment in capital assets 72,425,237 $ 74,675,451 $ 71,698,026 $ 72,864,197 $ Restricted 7,944,025 9,049,015 11,517,455 13,808,573
Unrestricted (8,182,481) (8,441,588) (36,866,281) (29,454,283) Total primary government net position $ 75,282,878 72,186,781 $ 46,349,200 $ 57,218,487 $ 134
2017 2018 2019 2020 2021 2022
$ 56,601,988 $ 59,589,114 $ 67,691,252 $ 85,689,643 $ 71,472,901 $ 69,492,549 17,256,904 16,314,865 12,119,087 16,166,941 17,244,941 23,043,731 (37,204,436) (40,387,356) (33,917,809) (52,525,473) (42,880,812) (39,248,843) $ 36,654,456 $ 35,516,623 $ 45,892,530 $ 49,331,111 $ 45,837,030 $ 53,287,437 $ 15,985,969 $ 15,985,969 $ 15,985,969 $ 13,000,844 $ 25,086,051 $ 26,098,298 0 9,812,211 8,612,543 9,935,338 11,042,102 2,469,140 4,984,562 $ 25,798,180 $ 24,598,512 $ 25,921,307 $ 24,042,946 $ 27,555,191 $ 31,082,860 $ 72,587,957 $ 75,575,083 $ 83,677,221 $ 98,690,487 $ 96,558,952 $ 95,590,847 17,256,904 16,314,865 12,119,087 16,166,941 17,244,941 23,043,731 (27,392,225) (31,774,813) (23,982,471) (41,483,371) (40,411,672) (34,264,281) $ 62,452,636 $ 60,115,135 $ 71,813,837 $ 73,374,057 $ 73,392,221 $ 84,370,297 135
2013 2014 2015 2016 2017
Expenses
Governmental activities:
General government $ 4,294,792 $ 4,473,909 $ 4,324,645 $ 4,604,299 $ 5,196,272 Public safety 13,935,234 13,572,060 13,997,209 15,859,890 14,310,434 Community Development 1,378,014 1,250,419 1,089,881 1,629,555 1,964,355 Public Works 4,088,408 4,138,762 5,757,332 4,714,402 5,698,841 Parks, Beaches & Recreation 3,880,586 3,921,499 3,894,017 4,329,044 4,938,859 Interest on Long-term Debt 2,037,476 1,945,156 2,072,272 1,667,485 2,442,966 Total Governmental Activities Expenses $ 29,251,336 $ 29,664,979 $ 31,135,356 $ 32,804,675 $ 34,551,727 Business-type activities:
Sewer $ 10,853,371 10,231,084 $ 11,897,495 $ 10,816,732 $ 11,893,663 $ Beach Parking 532,102 515,915 502,373
Total Business-Type Activities Expenses $ 10,231,084 $ 10,853,371 $ 11,897,495 $ 10,816,732 $ 12,396,036 Total Primary Government Expenses $ 39,482,420 $ 40,518,350 $ 43,032,851 $ 43,621,407 $ 46,947,763 Program Revenues
Governmental activities:
Charges for services:
General Government 15,902 $ 18,796 $ 29,769 $ 126,156 $ 74,899 $ Public Safety 999,209 836,279 938,379 1,043,155 987,163 Community Development 688,975 989,356 1,922,976 3,638,027 2,333,796 Public Works 701,012 791,041 743,700 786,000 743,700
Parks, Beaches & Recreation 2,067,301 2,248,642 2,107,720 2,220,263 2,231,797 Operating Grants and Contributions 1,817,278 2,153,345 4,321,012 3,923,126 4,124,499 Capital Grants and Contributions 2,311,468 6,364,781 4,709,960 4,912,145 2,458,959 Total Governmental Activities Program Revenues $ 8,438,215 $ 13,565,170 $ 14,773,516 $ 16,648,872 $ 12,954,813 Business-Type Activities:
Charges for services:
Sewer $ 12,500,814 $ 13,331,596 $ 13,721,346 $ 12,959,708 $ 12,715,024 Beach Parking 537,192 533,952 493,850
Total Business-Type Activities Program Revenues 13,331,596 12,500,814 13,721,346 12,959,708 13,208,874 Total Primary Government Program Revenues $ 20,939,029 $ 26,896,766 $ 28,494,862 $ 29,608,580 $ 26,163,687 Net Revenues (Expenses)
Governmental activities $ (20,813,121) $ (16,099,809) $ (16,361,840) $ (16,155,803) $ (21,596,914) Business-type activities 2,269,730 2,478,225 1,845,128 2,144,826 812,838 Total Net Revenues (Expenses) $ (18,543,391) $ (13,621,584) $ (14,516,712) $ (14,010,977) $ (20,784,076) General Revenues and Other Changes in Net Position
Governmental Activities:
Taxes:
Property taxes $ 10,701,810 $ 11,275,518 $ 12,200,335 $ 12,445,509 $ 12,679,059 Sales Taxes 1,588,277 1,686,593 1,754,568 1,983,930 2,374,505 Franchise Tax 1,617,727 1,668,382 1,697,972 1,736,620 1,748,266 Other Taxes 3,152,723 3,329,647 3,529,485 3,710,615 3,749,159 Motor vehicle in lieu - unrestricted 2,923,573 3,164,873 3,320,316 3,543,953 3,731,337 Investment earnings 164,114 184,700 29,979 (44,457) 743,630 Miscellaneous 357,630 537,867 259,197 1,481,757 846,648 Transfers 410,000 15,715 (150) 939,559 818,500
Total Governmental Activities $ 20,915,854 $ 21,863,295 $ 22,791,702 $ 25,797,486 $ 26,691,104 Business-type activities:
Investment Earnings $ 21,468 $ 19,808 $ 16,123 $ 22,337 $ 145,621 Miscellaneous 42,047
Transfers (410,000) 150 (939,559) (818,500)
Total Business-Type Activities $ (346,485) $ 19,808 $ 16,273 $ (917,222) $ (672,879) Total Primary Government $ 20,569,369 $ 21,883,103 $ 22,807,975 $ 24,880,264 $ 26,018,225 Changes in Net Position before Extraordinary Item:
Governmental Activities $ 102,733 $ 5,763,486 $ 6,429,862 $ 9,641,683 $ 5,094,190 Business-type Activities 1,923,245 2,498,033 1,861,401 1,227,604 139,959 Total Primary Government before Extraordinary Item: $ 2,025,978 $ 8,261,519 $ 8,291,263 $ 10,869,287 $ 5,234,149 Gain on transfer of assets and liabilities to successor agency $ - 5,557,942 $ $ - $ - $ - Changes in Net Assets After Extraordinary Item:
Governmental Activities 5,520,619 $ 5,763,486 $ 6,429,862 $ 9,641,683 $ 5,094,190 $ Business-Type Activities 1,672,776 1,923,245 2,498,033 1,861,401 1,227,604 Total Primary Government $ 7,193,395 $ 7,686,731 $ 8,927,895 $ 11,503,084 $ 6,321,794 Extraordinary Item
CITY OF PACIFICA
Changes in Net Position
Last Ten Fiscal Years
(Accrual Basis of Accounting)
136
2018 2019 2020 2021 2022
$ 7,156,065 $ 5,709,625 $ 6,334,939 $ 7,118,502 $ 7,481,370 17,194,894 18,784,090 18,649,308 21,096,292 18,632,393
2,329,479 2,731,034 2,984,755 2,972,473 3,243,238
7,409,411 2,534,274 6,980,889 7,713,891 9,326,203
4,963,552 5,392,377 5,586,758 5,441,842 4,928,418
1,896,665 706,918 1,364,573 961,257 969,550
$ 40,950,066 $ 35,858,318 $ 41,901,222 $ 45,304,257 $ 44,581,172 $ 12,922,459 $ 14,927,925 $ 18,794,726 $ 12,884,968 $ 16,258,603 562,426 536,423 468,537 715,783 620,511
$ 13,484,885 $ 15,464,348 $ 19,263,263 $ 13,600,751 $ 16,879,114 $ 54,434,951 $ 51,322,666 $ 61,164,485 $ 58,905,008 $ 61,460,286 $ 109,145 $ 77,871 $ 108,746 $ 86,009 $ 135,929
1,141,995 852,591 788,489 844,530 773,713
2,216,407 2,318,892 2,100,634 2,673,577 2,520,754
743,700 804,110 795,505 892,456 1,059,275
2,486,816 2,588,014 1,902,841 831,914 1,859,921
3,541,903 3,853,971 2,892,136 3,491,531 8,598,184
3,759,417 4,606,092 5,683,998 2,305,188 2,374,222
$ 13,999,383 $ 15,101,541 $ 14,272,349 $ 11,125,205 $ 17,321,998 $ 13,761,816 $ 14,802,705 $ 16,591,415 $ 15,760,525 $ 18,965,244 543,919 675,689 485,883 822,510 559,195
14,305,735 15,478,394 17,077,298 16,583,035 19,524,439
$ 28,305,118 $ 30,579,935 $ 31,349,647 $ 27,708,240 $ 36,846,437 $ (26,950,683) $ (20,756,777) $ (27,628,873) $ (34,179,052) $ (27,259,174) 14,046 820,850 (2,185,965) 2,982,284 2,645,325
$ (26,129,833) $ (20,742,731) $ (29,814,838) $ (31,196,768) $ (24,613,849) $ 13,780,294 $ 14,731,311 $ 13,030,713 $ 15,087,028 $ 14,445,541 2,350,478 2,611,801 2,570,334 2,848,681 3,136,433
1,722,343 1,661,717 1,647,467 1,706,107 1,754,500
4,904,111 5,340,307 8,572,837 9,026,832 10,385,735
3,973,622 4,199,391 4,253,924 2,643,981 4,355,327
151,887 254,481 341,064 9,364 100,562
505,076 2,384,463 571,114 204,939 324,910
98,343 272,500 80,000 (250,000) 499,600
$ 31,455,971 27,486,154 $ 31,067,453 $ $ 31,276,932 $ 35,002,608 $ 442,917 $ 415,825 $ 387,604 $ 296,784 $ 286,486
204,939 0 0 0 0
(98,343) (272,500) (80,000) 250,000 (499,600)
$ 143,325 549,513 $ $ 307,604 $ 546,784 $ (213,114)
$ 28,035,667 $ 31,599,296 $ 31,375,057 $ 31,823,716 $ 34,789,494 $ 535,471 $ 10,699,194 $ 3,438,580 $ (2,902,120) $ 7,743,434 1,370,363 157,371 (1,878,361) 3,529,068 2,432,211
$ 1,905,834 $ 10,856,565 $ 1,560,219 $ 626,948 $ 10,175,645 $ - $ - $ - $ - $ -
$ 535,471 $ 10,699,194 $ 3,438,580 $ (2,902,120) $ 7,743,434 139,959 157,371 (1,878,361) 3,529,068 2,432,211
$ 675,430 $ 10,856,565 $ 1,560,219 $ 626,948 $ 10,175,645 137
Fiscal year June 30,
2013 2014 2015
General Fund
Reserved
Unreserved
Non Spendable $ 2,522,197 $ 2,540,590 $ 3,996,158
Committed 899,051 907,519 -
Assigned 117,873 168,197 904,240
Unassigned 127,980 1,341,251 1,893,507
Total General Fund $ 3,667,101 $ 4,957,557 $ 6,793,905
Interest receivable
All Other Governmental Funds
Reserved $ - $ -
Unreserved - -
Unreserved, reported in:
Special revenue fund
Capital projects fund
Debt service funds
Restricted $ 8,230,761 $ 10,155,601 $ 11,503,439
Committed - - -
Assigned - - 14,016
Unassigned (818,354) (1,656,694) (1,312,645)
Total All Other Governmental Funds $ 7,412,407 $ 8,498,907 $ 10,204,810 Total Governmental Funds $ 11,079,508 $ 13,456,464 $ 16,998,715
CITY OF PACIFICA
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
138
Fiscal year June 30,
2016 2017 2018 2019 2020 2021 2022
General Fund
Non Spendable $ 4,021,024 3,947,951 $ 4,003,847 $ $3,911,023 3,783,486 $ 3,864,704 $ 3,768,557 $ Restricted - - - - - 200,755 342,510
Assigned 904,240 904,240 1,407,541 3,499,121 4,693,187 4,441,015 4,803,631 Unassigned 4,960,039 5,404,857 7,142,843 7,548,938 8,026,175 7,994,899 7,377,526 Total General Fund $ 9,812,230 $ 10,330,121 $ 12,554,231 $ 14,959,082 $ 16,502,848 $ 16,501,373 $ 16,292,224 All Other Governmental Funds:
Restricted $ 13,808,573 $ 17,256,904 $ 18,219,942 $ 11,784,231 $ 19,732,457 $ 20,533,315 $ 29,424,185 Committed - - - - - - -
Assigned - - - 4,803,631 - - -
Unassigned (2,410,718) (3,518,187) (6,077,744) 1,943,978 - (188,655) (619,786) Total All Other Governmental Funds $ 11,397,855 $ 13,738,717 $ 12,142,198 $ 18,531,840 $ 19,732,457 $ 20,344,660 $ 28,804,399 Total Governmental Funds $ 21,210,085 $ 24,068,838 $ 24,696,429 $ 33,490,922 $ 36,235,305 $ 36,846,033 $ 45,096,623 139
CITY OF PACIFICA
Changes in Fund Balance of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
(in thousands)
2013 2014 2015 2016
Revenues
Taxes $ 17,238 $ 18,138 $ 21,216 $ 22,294
389 515 683 827
Fines and forfeitures 179 301 153 150
Use of money and property 155 178 459 1,663
Intergovernmental revenues 7,233 10,614 8,567 7,439
Charges for Services 1,679 1,996 2,219 2,829
Recreation Programs 820 813 897 898
Other Revenues 1,531 2,285 4,163 3,690
Total Revenues: 29,224 34,840 38,357 39,790
Expenditures
Current:
3,677 3,866 3,899 4,332
12,452 12,940 14,199 14,555
1,331 1,250 1,318 1,814
3,356 3,347 4,259 3,707
3,552 3,585 3,988 4,333
Non-departmental
Capital outlay 2,659 3,529 3,077 3,393
Debt service:
1,661 1,791 1,918 2,046
1,912 1,878 1,777 1,686
Bond issuance cost
Total Expenditures 30,600 32,186 34,435 35,866
Excess (deficiency) of revenues
over (under) expenditures (1,376) 2,654 3,922 3,924
Other Financing Sources (Uses)
Transfers in 3,619 3,766 1,924 2,614
Transfers out (4,017) (4,146) (2,304) (2,327)
Refunded to debt escrow agent
Proceeds of long-term debt 1,169
Total other financing sources (uses) 771 (380) (380) 287 Net change in fund balances $ (605) $ 2,274 $ 3,542 $ 4,211 Debt service as a percentage of
noncapital expenditures 12.8% 12.8% 11.5% 11.4%
Public Works
Parks, Beaches & Recreation
Principal retirement
Interest and Other Chares
Licenses and permits
General government
Community Development
Public safety
140
2017 2018 2019 2020 2021 2022
$ 22,411 $ 23,768 $ 25,847 $ 27,399 $ 30,227 $ 31,398
812 1,036 838 969 1,197 1,079
161 190 193 182 174 168
980 311 386 338 103 224
6,605 7,637 6,672 8,312 5,102 11,223
2,722 2,778 2,899 2,358 3,588 3,700
845 989 904 495 373 456
4,283 4,662 8,510 5,411 1,880 3,577
38,819 41,371 46,249 45,464 42,644 51,825
4,538 4,444 5,160 5,628 6,094 7,243
15,452 16,192 16,621 16,352 17,165 18,658
1,907 2,110 2,442 2,579 2,432 3,073
4,597 4,041 4,622 5,917 6,841 8,143
4,419 4,158 4,792 4,886 4,433 4,811
1,952 6,701 5,603 1,585 2,535 3,163
1,667 971 1,017 111 611 1,597
1,957 1,335 1,339 1,272 941 947
293 212
36,782 39,952 41,596 38,542 41,052 47,635
2,037 1,419 4,653 6,922 1,592 4,190
6,191 2,412 13,059 3,451 3,821 8,292
(5,665) (3,203) (13,721) (3,341) (4,211) (7,938)
(16,794) 8,436
17,092 (7,920) 4,000
824 (791) (662) 626 (390) 4,354
$ 2,861 $ 628 $ 3,991 $ 7,548 $ 1,202 $ 8,544
11.1% 6.50% 7.4% 3.9% 4.2% 5.8%
141
Annual Years
Categories 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021* Food Stores 22,115 $ 22,826$ 23,722$ 23,543$ 24,727$ 27,139$ 27,696$ 28,115$ 30,462$ 27,471 $ Eating & Drinking Places 34,147 40,164 45,750 49,770 50,616 53,219 56,013 60,071 45,853 63,241 Building Materials 3,523 3,360 3,795 3,933 3,839 4,173 3,900 4,210 5,955 5,544 Auto Dealers & Supplies 4,433 4,757 4,646 4,482 4,532 4,804 4,778 5,134 4,728 4,758 Service Stations 52,533 54,312 52,412 44,660 38,899 42,139 46,839 44,942 29,641 39,074 Other Retail Stores 38,856 39,992 38,653 39,861 42,987 43,499 44,111 45,830 52,880 56,624 All Other Outlets 33,172 36,608 40,072 40,297 48,841 50,643 55,023 61,978 75,620 77,040 Total 188,779 $ 202,019 $ 209,050$ 206,546$ 214,441$ 225,616$ 238,360$ 250,280$ 245,139 $ 273,752 $ Notes:Due to confidentiality issues, the names of the ten largest revenue payers are not available.The categories presented are intended to provide alternative information regarding the sources of the City's revenue.Source: State Board of Equalization, California Department of Taxes and Fees Administration, State Controller's Office and the HdL Companies * Information presented is most current at the time of preparation.
CITY OF PACIFICA
TAXABLE SALES BY CATEGORY
LAST TEN YEARS (IN $000's)
142
City San Mateo City/County
State Direct County Public District
Annual Year Rate Rate Rate Safety Rate Total
2013 6.00% 0.75% 1.750% 0.50% 0.00% 9.000%
2014 6.00% 0.75% 1.750% 0.50% 0.00% 9.000%
2015 6.00% 0.75% 1.750% 0.50% 0.00% 9.000%
2016 6.00% 0.75% 1.750% 0.50% 0.00% 9.000%
2017 5.75% 0.75% 1.750% 0.50% 0.00% 8.750%
2018 5.75% 0.75% 1.750% 0.50% 0.00% 8.750%
2019 6.00% 0.75% 2.000% 0.50% 0.00% 9.250%
2020 6.00% 0.75% 2.000% 0.50% 0.00% 9.250%
2021 6.00% 0.75% 2.125% 0.50% 0.00% 9.375%
2022 6.00% 0.75% 2.125% 0.50% 0.00% 9.375%
Notes:
Proposition 172 approved by the voters in 1993 provides 1/2 cent sales tax for Public Safety Augmentation.
San Mateo County Transportation Authority District is provided a 1/2 cent sales tax approved by the voters in 1989.
San Mateo County Transit District is provided a 1/2 cent sales tax approved by the voters in 1982.
Voters approved a San Mateo County Transactions and Use Tax of a 1/2 cent effective in 2013.
Source: State Board of Equalization & HdL Companies
CITY OF PACIFICA
DIRECT AND OVERLAPPING SALES TAX RATES
LAST TEN YEARS
Voters approved a San Mateo County Transit District Transactions and Use Tax of a 1/2 cent effective in 2019 for traffic congestion and transportation purposes.
Voters approved Measure RR which authorized an additional sales tax of 0.125 percent in San Francisco, Santa Clara and San Mateo counties for the next 30 years.
143
Fiscal Licenses Use of Money Inter- Current Fines & Other Year Taxes & Permits & Property Governmental Service Chgs. Forfeitures Revenues TOTAL 2012-2013 17,238,036 389,107 $ 154,513 $ 7,233,370 $ 1,679,210 $ 178,727 $ 2,351,178 $ 29,224,141 $ 2013-2014 18,137,639 514,854 177,610 10,614,499 1,996,318 300,611 3,099,290 34,840,8212014-2015 21,215,649 683,517 458,823 8,567,028 2,219,356 153,031 5,059,783 38,357,1872015-2016 22,294,417 827,154 1,663,159 7,439,425 2,828,678 149,573 4,588,311 39,790,7172016-2017 22,411,007 811,803 980,024 6,604,617 2,722,206 161,023 5,037,010 38,727,6902017-2018 23,767,659 1,035,782 311,425 7,636,773 2,778,648 190,202 5,650,674 41,371,1632018-2019 25,847,343 837,785 386,289 6,671,627 2,899,101 193,046 9,414,628 46,249,8192019-2020 27,398,902 968,574 337,889 8,311,834 2,338,945 181,883 5,906,254 45,444,2812020-2021 30,226,812 1,197,277 103,437 5,101,845 3,587,646 174,048 2,253,219 42,644,2842021-2022 31,398,335 1,079,376 223,936 11,222,559 3,700,266 167,612 4,032,922 51,825,006 % Change
2013-2022 82.15% 177.40% 44.93% 55.15% 120.36% -6.22% 71.53% 77.34% Notes:Above amounts include General Fund, Special Revenue Funds, Debt Service Fund, Capital Projects Funds, and Other Governmental Funds.Above amounts exclude other financing sources.Source: Annual Financial Statements, City of Pacifica and City's Comprehensive Annual Financial Reports
CITY OF PACIFICA
TAX REVENUES BY SOURCE (GOVERNMENTAL FUNDS)
LAST TEN FISCAL YEARS
(IN $000's)
144
LOCALLY ASSESSED TOTALS
Secured Unsecured Total Before Exemptions
Fiscal Land Personal Land Personal Land Personal Grand (1) Total Net Subject Year Value Improvements Property Value Improvements Property Value Improvements Property Total H.O.P.T.R. Other Exemptions To Tax 2012-2013 2,074,034 2,426,543 2,423 4,933 19,077 37,361 2,078,967 2,445,620 39,784 4,564,371 57,436 57,796 115,232 4,449,1392013-2014 2,174,610 2,534,526 2,615 4,906 19,263 19,445 2,179,516 2,553,789 22,060 4,755,365 56,906 58,966 115,872 4,639,4932014-2015 2,294,249 2,647,779 2,352 5,041 21,781 22,507 2,299,290 2,669,560 24,859 4,993,709 56,151 61,142 117,293 4,876,4162015-2016 2,460,040 2,815,658 2,172 4,108 22,270 31,051 2,464,148 2,837,928 33,223 5,335,299 55,523 65,832 121,355 5,213,9442016-2017 2,622,536 2,952,932 2,132 4,041 18,948 21,509 2,626,577 2,971,880 23,641 5,622,098 54,992 52,206 107,198 5,514,9002017-2018 2,836,115 3,100,809 2,089 4,385 14,214 21,638 2,840,500 3,115,023 23,727 5,979,250 54,419 56,353 110,772 5,868,4782018-2019 3,056,112 3,236,212 3,449 4,302 13,229 22,588 3,060,414 3,249,441 26,037 6,335,892 54,076 78,225 132,301 6,203,5912019-2020 3,274,914 3,403,678 2,674 3,932 12,192 23,895 3,278,846 3,415,870 26,569 6,721,285 53,476 86,187 139,663 6,581,6222020-2021 3,483,408 3,545,422 2,535 3,316 5,892 21,984 3,486,724 3,551,314 24,519 7,062,557 52,896 87,151 140,047 6,922,5102021-2022 3,648,251 3,683,261 2,820 2,867 4,852 20,784 3,651,118 3,688,113 23,604 7,362,835 52,787 90,023 142,810 7,220,025% Change 2013-2022 75.90% 51.79% 16.38% -41.88% -74.57% -44.37% 75.62% 50.80% -40.67% 61.31% -8.09% 55.76% 23.93% 62.28% (1) Homeowner's Property Tax ReliefNotes:* California property tax assessments are "acquisition" based, rather than cyclical based. In California, the property tax system is acquisition based, meaningthat a real property is assessed upon acquisition or when newly constructed, and assessed at a ratio of 100% of fair market value as of the event date. Afterthe acquisition or new construction basis is determined, year to year increases in assessed value are limited to no more than 2%. In the event of an economicdownturn, real property is assessed at the lower of its acquisition basis, increased by the maximum of 2% per year or the fair market value as of January 2,whichever is lower.Source: San Mateo Count Assessor 2021/22 Combined Tax Rolls.
LAST TEN FISCAL YEARS
Exemptions/Net Totals
CITY OF PACIFICA
ASSESSED VALUATION, TAX RATE, AND TAX LEVIES
(IN $000's)
145
Jefferson San Mateo
San Mateo Pacifica High School Junior Total Direct Total County School & Elementary College & Overlapping Direct Annual Year as Distributor District School Districts & High School Tax Rates Rate 2013 1.0000% 0.0432% 0.0746% 0.0194% 1.1372% 0.1991%2014 1.0000% 0.0403% 0.1287% 0.0194% 1.1884% 0.1941%2015 1.0000% 0.0392% 0.1192% 0.0190% 1.1774% 0.1934%2016 1.0000% 0.0250% 0.1257% 0.0250% 1.1757% 0.1934%2017 1.0000% 0.0311% 0.1480% 0.0247% 1.2038% 0.1934%2018 1.0000% 0.0281% 0.1479% 0.0235% 1.1995% 0.1935%2019 1.0000% 0.0517% 0.1302% 0.0175% 1.1994% 0.1935%2020 1.0000% 0.0505% 0.1478% 0.0266% 1.2249% 0.1936%2021 1.0000% 0.0415% 0.1609% 0.0213% 1.2237% 0.1936%2022 1.0000% 0.0288% 0.1253% 0.0227% 1.1768% 0.1937% Notes:Under constitutional Amendment (Proposition 13) passed by voters in the State of California in June 1978, the tax rate (excluding bonded debt) is frozen at1% of the full market value of property. This tax is collected by the County Tax Collector and distributed on a formula determined by the State Legislature. Local agencies levy the tax rate only for general obligation bonds, or in excess of 1% if two-thirds of the voters in the area authorize such a rate increase.All tax levies include Homeowner's Property Tax Relief and Business Inventory Property Tax Relief.Source: HdL Companies School District
CITY OF PACIFICA
DIRECT AND OVERLAPPING PROPERTY TAX RATES
LAST TEN FISCAL YEARS
146
Percentage of Percentage of
Taxable Total City Taxable Total City
Assessed Taxable Assessed Assessed Taxable Assessed
Taxpayer Value Rank Value Value Rank Value
FPA WD Lands End LLC 91,954 $ 1 1.26%
GRI Fairmont LLC 39,657 2 0.54%AIMCO Esplanade Avenue Apartments LLC 38,912 3 0.53% 49,472 $ 1 1.10%Linda Mar Shopping Center, LLP 38,844 4 0.53%Pacifica Villages LP 32,563 5 0.45% CRP/PSE Seaside Pacifica Owner 26,773 6 0.37%Pacifica Horizons West LP 18,704 7 0.26%2400 Skyline Blvd LLC 18,373 8 0.25%NVI Rani Inc 16,439 9 0.23%Bay Apartment Communities, Inc. 15,973 10 0.22% 13,787 8 0.31%FPA BAF Lands End Associates LP 46,808 2 1.04%Lindamar SC LP 32,261 3 0.72%PK III Fairmont Shoppping Center 28,009 4 0.62%Marymount Summit ,LLC 18,768 5 0.42%Kiewit Infrastructure West Company 14,996 6 0.33%Harry B. Lewis, et al 14,543 7 0.32%LBN Properties LP 13,140 9 0.29%Comcast of California IX Inc. 13,022 10 0.29% Total 338,192 $ 4.64% 244,806 $ 5.44%
Notes:This schedule serves a dual purpose of providing basic information about our jurisdiction's most significant revenue payers and highlighting the degree to which a government is dependent on a small number of payers. Source: HdL Companies 2022 2013
CITY OF PACIFICA
PRINCIPAL PROPERTY TAXPAYERS
CURRENT YEAR AND TEN YEARS AGO
(in $000's)
147
Fiscal Year Taxes Levied Collections
Ending for the Percentage of in subsequent Percentage
June 30 Fiscal Year Amount Levy Years Amount of Levy
2013 8,848 $ 8,848 $ 100.00% 0 8,848 $ 100.00%
2014 9,088 9,088 100.00% 0 9,088 100.00%
2015 9,516 9,516 100.00% 0 9,516 100.00%
2016 10,090 10,090 100.00% 0 10,090 100.00%2017 10,728 10,728 100.00% 0 10,728 100.00%2018 12,097 12,097 100.00% 0 12,097 100.00%2019 12,782 12,782 100.00% 0 12,782 100.00%2020 13,442 13,442 100.00% 0 13,442 100.00%2021 13,993 13,993 100.00% 0 13,993 100.00%2022 14,567 14,567 100.00% 0 14,567 100.00% % Change 2011-2022 0.6642 0.6642 0.6642
Notes:This Statement shows the period for which the tax is levied.Includes Homeowner's Tax Relief (HOPTR).Under constitutional Amendment (Proposition 13) passed by voters in the State of California in June 1978, the tax rate (excluding bonded debt) is frozen at 1% of the full market value of property. This tax is collected by the County Tax Collector and distributed on a formula determined by the State Legislature. Local agencies levy the tax rate only for general obligation bonds, or in excess of 1% if two-thirds of the voters in the areaauthorize such a rate increase. All tax levies include Homeowner's Property Tax Relief and Business Inventory Property Tax Relief. * Information presented is most current at the time of preparation.Sources: City Financial Reports and Office of the Controller, County of San Mateo
CITY OF PACIFICA
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS (IN $000's)
Fiscal Year of the Levy
Collected within the
Total Collections to Date
148
Total
Fiscal Pension Capital Certificates Governmental
Year Obligation Lease Notes of Activities
Ending Bond Payable Payable Participation Debt
2013 15,059,702 $ $ 1,120,756 $ 875,378 $ 16,754,619 $ 33,810,455 2014 13,857,073 1,021,637 875,378 17,295,000 33,049,088 2015 12,712,826 918,514 875,378 16,740,000 31,246,718
2016 11,303,736 811,224 - 16,210,000 28,324,960
2017 9,748,420 699,600 - 16,977,583 27,425,603
2018 8,893,219 583,466 - 16,862,704 26,339,389
2019 7,936,101 462,641 - 16,747,825 25,146,567
2020 8,583,041 336,934 - 16,632,946 25,552,921
2021 8,583,041 206,149 - 16,038,067 24,827,257
2022 7,847,478 4,070,080 15,198,188 - 27,115,746
Notes:
Details regarding the city's debt can be found in the notes to the financial statements.
The City issued a total of $13,630,000 of new certificates of participation in 1999, 2000 and 2003.
The City issued $19,815,000 of new COP's in 2008, refunding the 1999, 2000 and 2003 COP's.
The City issued $20,500,000 in Pension Obligation Bonds in 2010.
The City issued $14,680,000 (par value) of new COP's in 2016, refunding the 2008 COP's.
The City issued $9,685,0000 of new Pension Obligation Bonds in 2019, refunding the 2010 POB.
The City issued $4,000,000 of Center Project Capital Lease in 2022.
Sources: City's Comprehensive Annual Financial Reports 2013-2022.
CITY OF PACIFICA
OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
Governmental Activities
149
Total Total Estimated Debt Per Capita Debt as a
Fiscal Year Sewer Notes Business-Type Primary Median Personal Per Personal Percentage of Ending Bonds Payable Government Government Income Population Capita Income Personal Income 2013 11,275,298 $ 23,043,678 $ 34,318,976 $ 68,129,431 $ n/a 37,948 1,795 $ 41,909 $ 0.062% 2014 11,172,927 21,406,345 32,579,272 65,628,360 n/a 38,292 1,714 42,099 0.064% 2015 9,736,334 20,375,644 30,111,978 61,358,696 n/a 38,315 1,601 43,390 0.071% 2016 9,436,801 18,070,515 27,507,316 55,832,276 n/a 37,806 1,477 45,452 0.081% 2017 35,297,847 15,756,776 51,054,623 78,480,226 n/a 38,124 2,059 45,591 0.058% 2018 34,886,481 13,434,113 48,320,594 74,659,983 n/a 38,418 1,943 46,553 0.062% 2019 34,481,802 11,102,206 45,584,008 70,730,575 n/a 38,674 1,829 48,476 0.069% 2020 34,283,067 8,760,726 43,043,793 68,596,714 n/a 38,331 1,790 51,799 0.076%2021 34,001,269 6,409,326 40,410,595 65,237,852 n/a 37,890 1,722 54,637 0.084%2022 32,725,035 4,047,649 36,772,684 63,888,430 n/a 37,533 1,702 55,679 0.087% Notes:This schedule displays the Enterprise Fund debt of the Wastewater Treatment Plant.Details regarding the city's debt can be found in the notes to the financial statements.Sources:The City's Annual Comprehensive Financial Reports 2013-2022 Business-Type Activities
CITY OF PACIFICA
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
150
FY2021-22 Assessed Valuation: $7,282,869,520
Debt
Outstanding
Estimated
Percentage
Applicable (1)
City's
Estimated
Share of
Overlapping
Debt
Overlapping Tax and Assessment Debt:
San Mateo Community College District $ 733,897,184 2.734% 20,064,749 $ Jefferson Union High School District 250,808,014 28.606% 71,746,140 Jefferson School District 116,340,000 1.263% 1,469,374
Pacifica Elementary School District (Laguna Salada) 43,996,987 99.877% 43,942,871 Total Overlapping Tax and Assessment Debt $ 137,223,134 Direct and Overlappig General Fund Debt:
San Mateo County General Fund Obligations $ 612,605,687 2.734% 16,748,639 $ San Mateo County Board of Education Certificates of Participation 6,490,000 2.734% 177,437 San Mateo County Flood Control and Sea LRR District General Fund Oblig 14,675,000 0.603% 88,490 Jefferson Union High School District Certificates of Participation 47,490,000 28.606% 13,584,989 City of Pacifica Certificates of Participation 17,475,000 100.000% 17,475,000 City of Pacifica Pension Obligation Bonds 7,015,000 100.000% 7,015,000 San Mateo County Mosquito and Vector Control District General Fund Oblig 3,825,000 2.734% 104,576 Total Direct and Overlapping General Fund Debt $ 55,194,131 Overlapping Tax Increment Debt (Successor Agency): $ 945,000 100.000% 945,000 $ Total Direct Debt $ 24,490,000
Total Overlapping Debt $ 168,872,265
Combined Total Direct and Overlapping Debt $ 193,362,265 (2) (1) Percentage of overrlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by detrmining the prortion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value. (2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgate revenue and non-bonded capital lease obligations.
Ratios to 2021-22 Assessed Valuation:
Total Overlapping Tax and Assessment Debt …………………..1.88% Total Direct Debt ($24,490,000) …………………………………..0.34%
Combined Total Debt ……………………………………………… 2.66%
Ratio to Redevelopment Successor Agency Incremental Valuation ($55,723,268):
Total Overlapping Tax Increment Debt ……………………………1.70%
Source: Avenu Insights & Analytics and California Municipal Statistics, Inc.
CITY OF PACIFICA
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
AS OF JUNE 30, 2022
151
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Assessed Valuation 4,506,576 $ 4,696,398 $ 4,932,568 $ 5,269,468 $ 5,569,870 $ 5,934,385 $ 6,271,558 $ 6,646,497 $ 6,986,484 $ 7,282,869 $ Debt Limit 168,997 176,115 184,971 197,605 208,870 222,539 235,183 249,244 261,993 273,108 Total Net DebtApplicable to Limit 32,936 33,049 31,247 28,325 27,426 26,339 25,147 25,553 24,829 27,116 Legal Debt Margin 136,061 $ 143,066 $ 153,724 $ 169,280 $ 181,444 $ 196,200 $ 210,036 $ 223,691 $ 237,164 $ 245,992 $ Total Net Debtapplicable to the limitas a percentage of debt limit 19.49% 18.77% 16.89% 14.33% 13.13% 11.84% 10.69% 10.25% 9.48% 9.93%Notes:Debt Limit is 3.75% of Assessed Value.Source: City of Pacifica, HdL, and San Mateo County Assessor's records
CITY OF PACIFICA
LEGAL DEBT MARGIN INFORMATION
LAST TEN FISCAL YEARS (IN $000's)
FISCAL YEAR ENDING JUNE 30
152
(1) (2) (3) (4)
Less Pledged
Operating Operating Net Bonded Debt Other Parity Total Parity Fiscal Year Revenues Expenses Revenue Service Debt Service Debt Service Coverage 2013 12,501$ 6,704 $ 5,797 $ 473 $ 2,405 $ 2,878 $ 2.01 2014 13,332 7,281 6,051 473 2,549 3,022 2.002015 13,721 7,663 6,058 359 2,514 2,873 2.112016 12,960 7,851 5,109 337 2,514 2,851 1.792017 12,715 8,444 4,271 1,163 2,514 3,677 1.16 2018 13,762 8,660 5,102 1,399 2,513 3,912 1.30
2019 14,803 10,233 4,570 1,399 2,513 3,912 1.172020 16,591 10,219 6,372 1,399 2,513 3,912 1.632021 15,761 10,377 5,384 1,399 2,513 3,912 1.382022 18,618 10,535 8,083 1,399 2,513 3,912 2.07 Fiscal Year Principal Interest
2013 0 02014 0 02015 0 02016 0 02017 0 02018 0 02019 0 02020 0 02021 0 02022 0 0 Notes:
(1) Operating Expenses excludes depreciation, capital expenditures and debt service(2) Include the Series 2014 and the Series 2017 Wastewater Revenue Refunding Bonds(3) Includes the SRF Loan, CSCDA 2001 Loan and the 2012 Loan.(4) The bond indentures and the 2012 Loan Agreement require minimum annual debt service coverage of 1.25x. The 2001 CSCDA loan requires a minimum annual DS coverage of 1.10x.
Source: City Financial Reports
Enterprise Fund Bonds
Debt Service (000's)
Special Assessment Bonds
CITY OF PACIFICA
WASTEWATER OBLIGATIONS PLEDGED REVENUE COVERAGE
LAST TEN YEARS (IN $000's)
153
Per
Calendar Median Capita
Year Personal Personal Unemployment
Ending Population Income Income Rate %
2013 37,948 n/a 41,909 $ 5.8
2014 38,292 n/a 42,099 4.9
2015 38,315 n/a 43,390 3.9
2016 37,806 n/a 45,452 3.1
2017 38,124 n/a 45,591 2.8
2018 38,418 n/a 46,553 2.0
2019 38,674 n/a 48,476 2.3
2020 38,331 n/a 51,799 2.1
2021 37,890 n/a 54,637 7.3
2022 37,533 n/a 55,679 5.1
Notes and Data Sources:
The City of Pacifica is not a Standard Metropolitan Statistical Area (SMSA).
Population: California State Department of Finance
Unemployment Data: California Employment Development Department 2000-2009 Income: ESRI - Demographic Estimates are based on the last available census.
Projections are developed by incorporating all of the prior census data released to date.
Demographic Data is totaled from Census Block Groups that overlap the City's boundaries. 2010 and later - Income - US Census Bureau, most recent American Community Survey.
Source: HdL Companies via U.S. Census Bureau, California State Department of Finance California Employment Development Department
CITY OF PACIFICA
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN CALENDAR YEARS
154
Percentage of Percentage of
# of Total City # of Total City
Employer Employees Rank Employment Employees Rank Employment Jefferson High School 489 1 N/A 90 4 N/APacifica School District 375 2 N/A 301 1 N/ASafeway (3) 264 3 N/A 210 3 N/A City of Pacifica 224 4 N/A 225 2 N/AOceana Market 60 5 N/A Recology of the Coast 37 6 N/A 49 6 N/ARoss Dress for Less 32 7 N/A 40 7 N/A Ace Hardware 20 8 N/A
North Coast County Water District 20 8 N/A 22 9 N/A
Rite Aid 17 10 N/A 40 7 N/A
Lucky (Save Mart Supermarkets) 90 4 N/ANotes:The City does not track this information. Our business license tax is based on gross receipts.The City of Pacifica is not a Standard Metropolitan Statistical Area (SMSA) so this information is not readily available.Source: City of Pacifica Research * Information presented is most current at the time of preparation.
CITY OF PACIFICA
PRINCIPAL EMPLOYERS
CURRENT YEAR AND TEN YEARS AGO
2022 2013
155
Function/Program 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 General Government Administration 6667778766 Finance 6 6 6 6.5 7.5 6.5 7.5 8 8 9 Parks 58 53 54 65.5 53 51 56 55 55 56 Planning & Building 8877777878 Public Works 18 20 21 19 22 23 23 22 22 24 Engineering 5555664445Police Officers 33 33 34 29 33 37 33 34 35 33.5 Civilians 4543444444Fire Firefighters 23 25 25 25 25 23 25 25 26 25 Civilians 1111111111Wastewater Division 24 24 26 24 26 27 27 25 25 25Total 186 186 189 192 191.5 192.5 195.5 193 193 196.5Authorized Full-Time Positions 159 161 161 166.5 170 172 172Notes:A full-time employee is scheduled to work 2,080 hours per year (including vacation and sick leave).Full-time equivalent employment is calculated by dividing total labor hours by 2080.Total includes both Full time and Part-Time (converted to full-time equivalent) Positions excluding City Council.Source: City Financial Reports
CITY OF PACIFICA
FULL TIME EQUIVALENT EMPLOYEES BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
156
Function/Program 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 General Government Building Permits Issued 1,514 1,501 1,587 1,682 1,921 1,811 1,413 1,447 1,538 1,620 Building Inspections Conducted 2,710 2,818 3,018 4,093 4,610 4,630 5,143 5,145 3,966 4,455Police Physical Arrests 812 812 923 864 702 816 890 747 693 680 Parking Violations 3,652 3,652 5,085 4,700 5,099 6,257 4,942 4,065 5,169 4,080 Traffic Violations 2,966 2,966 2,193 1,763 2,090 2,718 3,435 2,243 1,723 2,415Fire Emergency Responses 1,873 3,117 3,147 3,215 2,977 3,142 3,167 2,882 2,943 3,225 Fires Extinguished 101 96 106 88 77 66 59 43 46 31 Inspections 1,056 895 951 955 730 783 862 513 308 929Other Public Works Street Re-surfacing (miles) 0.00 0.00 0.90 0.00 0.00 0.51 1.55 0.48 0.50 11.00 Potholes Repaired 379 379 351 1,125 1,200 1,200 500 1,000 500 700Parks, Beaches & Recreation estimated estimated estimated estimated estimated estimated estimated estimated estimated estimated Community Center Admissions 98,000 91,000 95,730 89,654 98,480 92,000 100,563 126,024 2,100 50,650Enterprise Fund WWTP Residential Sewer Accounts 11,340 11,440 11,455 11,480 11,470 11,479 11,913 11,916 11,923 11,920 Commercial Sewer Accounts 318 316 340 345 342 343 350 349 349 353 Total Accounts 11,658 11,756 11,795 11,825 11,812 11,822 12,263 12,265 12,272 12,273 New Connections 7 1 4 10 17 10 7 2 8 1 Avg Daily Sewage Treatment (Gallons) 2,350,000 2,240,000 2,240,000 2,463,000 3,230,000 2,463,000 2,463,000 2,463,000 2,463,000 2,485,000Source: Various City Departments FISCAL YEAR ENDING JUNE 30
CITY OF PACIFICA
OPERATING INDICATORS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
157
Fiscal Year Ending June 30,
Function/Program 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Police Stations 1111111111 Patrol Units 12 12 12 12 12 12 12 12 12 12Fire Stations 2222222222Public Works Streets (miles) 88.9 88.9 88.9 88.9 88.9 88.9 88.9 88.9 88.9 88.9 Highways (miles) 0000000000 Streetlights 2,051 2,051 2,051 2,051 2,051 2,051 2,051 2,051 2,051 2,051 Traffic Signals 5555555555Parks, Beaches & Recreation Acreage 148.13 148.13 148.13 148.13 148.13 148.13 148.13 148.13 148.13 148.13 Playgrounds 14 14 14 14 14 14 14 14 14 14 Baseball Diamonds 5555555555 Soccer/Football Fields 2222222222 Community Centers 1111111111Wastewater Sanitary Sewers (miles) 165 165 165 165 104 104 104 104 104 104 Storm Sewers (miles) 90 90 90 90 90 90 90 90 90 90 Treatment Capacity (gallons) 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000Notes:No capital asset indicators are available for the general government function.Source: Various City Departments
CITY OF PACIFICA
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
158
Fiscal Minimum Rate per
Year Ended Annual 100
June 30 Charge Cubic Feet
2013 567.18 11.81632
2014 567.18 11.81632
2015 583.26 12.15128
2016 600.42 12.50867
2017 626.14 13.04476
2018 676.24 14.08834
2019 730.34 15.21541
2020 788.77 16.43264
2021 843.98 17.58293
2022 903.06 18.81373
Notes:
Sewer rates are based on water usage. The North Coast County Water District invoices customers directly for water usage.
Source: City Records
CITY OF PACIFICA
SEWER RATES
LAST TEN FISCAL YEARS
159
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