San Luis Obispo City Council
January 17, 2023

Management’s Discussion and Analysis
For information on the 2022-23 Financial Plan Supplement and the appropriated budget including the allocation of the Local Revenue Measure, please visit:
https://www.slocity.org/government/department-directory/finance/city-budget Utility Rates. The City adopts its water and sewer rates with the two-year Financial Plan and in accordance with Proposition 218 requirements. As such, notifications were sent to all rate payers in April 2021 and the rates subsequently adopted in a public hearing by the City Council.

Parking Rates. The Parking Fund, hit hardest by the pandemic restrictions, nevertheless began its recovery in 2021- 22 and in the first months of 2022-23 appears to be seeing pre-COVID19 demand. It continues to assist economic recovery by offering free parking during holiday times to bring people to downtown.

In June 2023, the City Council also adopted fee increases for parking meters and structure parking in preparation for the debt issuance to build the City’s cultural district garage.

Requests for Additional Information
This financial report is designed to provide a general overview of the City’s finances for all those interested. The City also prepares a Popular Annual Financial Report that can be found on the City’s website under the Finance Department’s online documents. Questions concerning any of the information provided in this report should be addressed to the Department of Finance, 990 Palm Street, San Luis Obispo, CA 93401. 31

32

BASIC FINANCIAL STATEMENTS
33

34

Governmental
Activities
Business-Type
Activities Total
Assets
Current assets:

Cash and investments $ 99,356,588 $ 105,676,349 $ 205,032,937 Taxes receivable 11,639,323 11,639,323 -
Accounts receivable 1,465,191 9,090,763 10,555,954
Accrued interest receivable 2,887,198 840,342 3,727,540 Prepaid items and other assets 651,218 651,218 -
Lease receivables 129,740 167,582 297,322
Loans receivable 12,327,527 2,274,934 14,602,461
Total current assets 128,456,785 118,049,970 246,506,755 Noncurrent assets:

Cash and investments held by fiscal agent 421,510 437,884 859,394 Investment in joint venture 2,831,432 - 2,831,432
Lease receivables 1,121,310 36,971,566 38,092,876
Nondepreciable capital assets 43,547,370 132,025,105 175,572,475 Depreciable capital assets (net of accumulated
depreciation) 169,708,981 145,011,649 314,720,630
Total noncurrent assets 214,799,171 317,277,636 532,076,807 Total assets 343,255,956 435,327,606 778,583,562
Deferred Outflows of Resources
Other post-employment benefits related 1,391,750 687,662 2,079,412 Pension related 34,811,636 5,217,738 40,029,374
Unamortized loss on refunding of debt 198,522 175,405 373,927 Total deferred outflows of resources 36,401,908 6,080,805 42,482,713 Liabilities
Current liabilities:

Accounts payable 4,558,580 8,452,754 13,011,334
Accrued salaries 1,597,094 211,651 1,808,745
Unearned revenue 15,237,246 5,191,916 20,429,162
Interest payable 82,324 165,194 247,518
Other liabilities 212,617 - 212,617
Compensated absence - due within one year 2,111,566 157,833 2,269,399 Long-term debt - due within one year 1,519,356 3,213,830 4,733,186 Total current liabilities 25,318,783 17,393,178 42,711,961 Noncurrent liabilities:

Compensated absence - due in more than on year 993,039 368,278 1,361,317 Long-term debt - due in more than one year 18,090,884 116,269,339 134,360,223 Net OPEB liability 2,551,999 1,260,937 3,812,936
Net pension liability 102,337,477 22,227,511 124,564,988 Total noncurrent liabilities 123,973,399 140,126,065 264,099,464 Total liabilities 149,292,182 157,519,243 306,811,425
Deferred Inflows of Resources
Other post-employment benefits related 1,786,911 882,909 2,669,820 Pension related 49,056,568 5,649,701 54,706,269
Lease related 36,972,072 1,225,534 38,197,606
Total deferred inflows of resources 52,069,013 43,504,682 95,573,695 Net Position
Net investment in capital assets 193,984,593 157,728,990 351,713,583 Restricted
Debt service 2,540,255 437,884 2,978,139
Transportation projects 9,314,755 2,246,897 11,561,652
Affordable housing programs 13,526,749 13,526,749 -
Impact fee programs 9,669,643 9,669,643 -
Parkland development programs 3,256,800 3,256,800 -
Public art programs 798,038 - 798,038
Tourism programs 1,147,881 1,147,881 -
Subsequent year expenditures 864,848 - 864,848
Claims 651,218 - 651,218
Unrestricted (57,458,111) 79,970,715 22,512,604
Total net position $ 178,296,669 $ 240,384,486 $ 418,681,155 City of San Luis Obispo, California
Statement of Net Position
June 30, 2022
The accompanying notes are an integral part of these financial statements. 35

Functions/Programs Expenses
Charges for
Services
Operating
Grants and
Contributions
Capital Grants
and
Contributions
Governmental activities:

Public safety 41,132,177 $ 3,197,692 $ 965,923 $ - $
Transportation 10,395,516 636,874 2,220,788 453,162
Culture and recreation 12,407,720 4,046,439 497 -
Community development 15,506,092 10,509,106 151,581 -
General government 20,982,321 530,775 309,024 1,077,995 Interest on long-term debt 699,284 - - -
Total governmental activities 101,123,110 18,920,886 3,647,813 1,531,157 Business-type activities:

Water 20,892,863 29,894,129 1,848,593 -
Sewer 12,576,058 23,642,048 97,413 -
Parking 4,517,125 4,890,317 538 -
Transit 3,851,264 713,777 3,210,238 -
Total business-type activities 41,837,310 59,140,271 5,156,782 - Total primary government $ 78,061,157 142,960,420 $ 8,804,595 $ 1,531,157 $ General revenues and transfers:

General sales and use taxes
Transaction and use tax - Local Revenue Measure
Property tax (including real property transfer tax)
Transient occupancy tax (TOT)
Utility users tax
Property tax-in-lieu of vehicle license fees
Franchise taxes
Business tax
Cannabis Tax
Total taxes
Unrestricted investment earnings
Other revenue
Income from investment in joint venture
Transfers
Total general revenues and transfers
Change in net position
Net position, beginning of year
Prior year restatements
Net position, beginning of year, as restated
Net position, end of year
Program Revenues
City of San Luis Obispo, California
Statement of Activities
For the Fiscal Year Ended June 30, 2022
The accompanying notes are an integral part of these financial statements. 36

Governmental
Activities
Business-type
Activities Total
$ - (36,968,562) $ (36,968,562) $
- (7,084,692) (7,084,692)
- (8,360,784) (8,360,784)
- (4,845,405) (4,845,405)
- (19,064,527) (19,064,527)
- (699,284) (699,284)
- (77,023,254) (77,023,254)
10,849,859 - 10,849,859
11,163,403 - 11,163,403
373,730 - 373,730
72,751 - 72,751
22,459,743 - 22,459,743
(77,023,254) 22,459,743 (54,563,511)
22,247,303 22,247,303 -
29,172,258 29,172,258 -
14,716,412 14,716,412 -
10,650,762 10,650,762 -
5,338,325 5,338,325 -
5,994,592 5,994,592 -
1,978,295 1,978,295 -
2,823,163 2,823,163 -
998,875 998,875 -
93,919,985 93,919,985 -
(1,638,993) (1,207,118) (2,846,111)
1,213,401 1,213,401 -
585,101 - 585,101
1,685,314 (1,685,314) -
95,179,707 (2,307,331) 92,872,376
18,156,453 20,152,412 38,308,865
155,741,584 217,715,565 373,457,149
4,398,632 2,516,509 6,915,141
160,140,216 220,232,074 380,372,290
$ 178,296,669 $ 240,384,486 $ 418,681,155
Net Revenues (Expenses) and
Changes in Net Position
37

General
Capital Outlay
Fund
Other
Governmental
Funds
Total
Governmental
Funds
Assets
Cash and investment $ 34,540,875 $ 14,807,005 $ 50,008,708 $ 99,356,588 Taxes receivable 11,473,880 165,443 - 11,639,323
Accounts receivable 1,004,373 74,493 322,757 1,401,623
Other receivables 63,568 - 63,568 -
Accrued interest receivable 210,686 2,676,512 - 2,887,198 Prepaid items 90,797 - 90,797 -
Cash and investments held by fiscal agent - 421,510 - 421,510 Loans receivable 240,637 12,086,889 - 12,327,526
Lease receivable 1,251,050 - 1,251,050 -
Total assets $ 48,875,866 $ 14,881,498 $ 65,681,819 $ 129,439,183 Liabilities, Deferred Inflows of Resources
and Fund Balance
Liabilities:

Accounts payable 2,325,910 $ 1,143,842 $ 1,088,828 $ 4,558,580 $ Accrued liabilities 1,593,058 - 4,036 1,597,094
Unearned revenue 2,471,916 - 12,765,330 15,237,246
Other liabilities 212,617 - - 212,617
Total liabilities 6,603,501 1,143,842 13,858,194 21,605,537 Deferred Inflows of Resources:

Lease related - 1,225,534 - 1,225,534
Unavailable revenue 301,325 - 5,780,599 6,081,924
Total deferred inflows of resources 1,526,859 - 5,780,599 7,307,458 Fund balance:

Nonspendable 90,797 - 8,681 99,478
Restricted for:

Debt service - 2,540,255 - 2,540,255
Transportation projects - 8,051,050 - 8,051,050
Affordable housing programs - 9,893,314 - 9,893,314
Impact fee programs - 8,935,786 - 8,935,786
Parkland development programs - 3,107,198 - 3,107,198
Public art programs - 798,038 - 798,038
Tourism programs - 1,147,881 - 1,147,881
Public safety program - 864,848 - 864,848
Committed to:

General government programs 5,696,864 - 5,696,864 -
Risk management - 1,845,935 - 1,845,935
Contingency fund 12,014,000 - - 12,014,000
Assigned to:

CalPERS pension payment - 2,000,000 - 2,000,000
Contingency fund - - 900,000 900,000
Establishment of Section 115 Trust 2,000,000 - - 2,000,000 Development services 530,657 - 9,795,975 10,326,632
SLO Repertory Theater Grant 3,940,000 - - 3,940,000
General government programs 4,270,529 - - 4,270,529
Subsequent year expenditures - 13,737,656 - 13,737,656
Unassigned 8,356,724 - - 8,356,724
Total fund balance 40,745,506 13,737,656 46,043,026 100,526,188 Total liabilities, deferred inflows of resources
and fund balance 48,875,866 $ 14,881,498 $ 65,681,819 $ 129,439,183 $ City of San Luis Obispo, California
Balance Sheet
Governmental Funds
June 30, 2022
The accompanying notes are an integral part of these financial statements. 38

Total fund balance - governmental funds $ 100,526,188
Capital assets at estimated historical cost $ 330,212,574 Accumulated depreciation (116,956,223)
213,256,351
6,081,924
1,391,750
34,811,636
198,522
560,422
Lease revenue bonds $ 17,819,100
Lease purchase financing 390,420
Compensated absences 3,104,605
Conservation loan 139,930
Bond premium 1,260,790
Accrued interest payable 82,324
(22,797,169)
Net pension liability is not a current financial obligation and, therefore, is not reported in the governmental funds. (102,337,477)
Net OPEB liability is not a current financial obligation and, therefore, is not reported in the governmental funds. (2,551,999)
(1,786,911)
(49,056,568)
Total net position - governmental activities $ 178,296,669 Long-term liabilities, including related interest payable, are not due and payable in the current period and therefore are not reported in the funds.

Deferred inflow of resources, pension related, are not current assets or resources; and they are not due in the current period and therefore are not reported in the governmental funds.

Deferred inflow of resources, OPEB related, are not current assets or resources; and they are not due in the current period and therefore are not reported in the governmental funds.

City of San Luis Obispo, California
Reconciliation of the Governmental Funds Balance Sheet
to the Government-wide Statement of Net Position
June 30, 2022
Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds.

Other long-term assets are not available to pay for current period expenditures and therefore are not reported in the governmental funds.

Deferred outflows of resources, pension related, are not current asset or resources; and they are not due in the current period and therefore are not reported in the governmental funds.

Deferred outflows of resources, OPEB related, are not current asset or resources; and they are not due in the current period and therefore are not reported in the governmental funds.

Deferred amounts related to the refunding of long-term debt were not current financial resources.

Therefore, they were not reported in the Governmental Funds Balance Sheet.

Unavailable revenue recorded in the fund financial statements resulting from activities in which revenues were earned but funds were not available are reclassified as revenues in the Government-Wide Financial Statements.

The accompanying notes are an integral part of these financial statements. 39

Total net change in fund balance - governmental funds $ 8,709,833 Expenditures for capital outlay - governmental funds $ 14,932,670 Depreciation expense (6,602,831)
8,329,839
Repayments of long-term debt are recognized as expenditures in the governmental funds. In the government-wide statements, repayments of long-term liabilities are reported as reductions of liabilities. Expenditures for repayment of the principal portion of long-term debt were: 1,467,402 (11,678)
it is due. In the statement of activities, interest expense is recognized as the interest accrues, regardless of when it is due. The difference between interest expense paid and interest accrued was: 1,694
85,448
Changes in actuarially determined claim liabilities for uninsured claims do not provide current financial resources and are not reported in the governmental funds. 72,321 governmental funds. In the statement of activities, compensated absences are measured by the amounts earned. The difference between compensated absences paid and compensated absences earned was: (88,082)
512,234
23,414,472
1,309,367
Pension expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds (25,045,115) OPEB expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds (601,282) Total change in net position - governmental activities $ 18,156,453 Current year employer pension contributions are recorded as expenditures in the governmental funds, however, these amounts are reported as a deferred outflow of resources in the Government-Wide Statement of Net Position Current year employer OPEB contributions are recorded as expenditures in the governmental funds, however, these amounts are reported as a deferred outflow of resources in the Government-Wide Statement of Net Position Compensated absences are measured by the amounts paid during the period in the Capital outlay net of depreciation expense and disposal.

Interest on long-term debt is recognized as an expenditure in the governmental funds when Change in unamortized discount/premium (netted with debt) Reconciliation of the Statement of Revenues,
Expenditures and Changes in Fund Balances of
Governmental Funds to the Statement of Activities
For the Fiscal Year Ended June 30, 2022
Deferred amounts related to the refunding of long-term debt were not current financial resources. Therefore, they were not reported in the Governmental Funds Balance Sheet.

This amount is to be amortized over the life of the long-term debt. This amount is the current year net amortization expense.

Revenues that are not considered to be available are reported as unavailable revenues in the governmental funds, however, these amounts are recognized in the GovernmentWide Statement of Activities. This amount represents the change in unavailable revenues.

City of San Luis Obispo, California
The accompanying notes are an integral part of these financial statements. 40

General
Capital Outlay
Fund
Other
Governmental
Funds
Total
Governmental
Funds
Revenues:
$ - 22,247,303 $ - $ 22,247,303 $
- 29,172,258 - 29,172,258
- 14,716,412 - 14,716,412
- 10,650,762 - 10,650,762
- 5,338,325 - 5,338,325
- 5,994,592 - 5,994,592
- 1,978,295 - 1,978,295
- 2,823,163 - 2,823,163
998,875 - - 998,875
- 173,915 - 173,915
(2,903) (1,455,527) (692,797) (2,151,227)
1,477,476 2,596,930 2,371,786 6,446,192
9,000 10,751,046 6,897,082 17,657,128
363,342 413,188 259,491 1,036,021
Total revenues 106,399,537 1,846,915 8,835,562 117,082,014 Expenditures:

Current:

General government 17,190,472 - 7,440 17,197,912
Public safety 39,656,509 - 264,699 39,921,208
Transportation 4,818,976 - 312,156 5,131,132
Leisure, cultural and social services 10,156,139 - 284,404 10,440,543 Community development 12,726,420 514,482 1,826,616 15,067,518 Debt service:

Principal - 1,467,402 - 1,467,402
Interest and fiscal charges - - 774,747 774,747
Capital outlay:

Public safety 16,178 - 232,435 248,613
Transportation 976,123 8,165,271 4,512,455 13,653,849
Leisure, cultural and social services 170,729 3,126,097 636,637 3,933,463 Community development 17,672 583,643 - 601,315
General government 816,029 286,929 516,835 1,619,793
Total expenditures 86,545,247 12,676,422 10,835,826 110,057,495 Revenues over (under) expenditures 19,854,290 (10,829,507) (2,000,264) 7,024,519 City of San Luis Obispo, California
Statements of Revenues, Expenditures, and
Changes in Fund Balances
Governmental Funds
For the Fiscal Year Ended June 30, 2022
Sales and use tax - general
Transaction and use tax - Local
Revenue Measure
Property tax (including real property
transfer tax)
Transient occupancy tax
Utility users tax
Property tax in lieu of VLF
Franchise taxes
Business tax
Cannabis Tax
Miscellaneous
Fines, forfeitures and penalties
Use of money and property
Subventions and grants
Charges for services
The accompanying notes are an integral part of these financial statements. 41

General
Capital Outlay
Fund
Other
Governmental
Funds
Total
Governmental
Funds
Other Financing Sources (Uses):

Transfers in $ 3,942,248 $ 22,098,191 $ 9,232,840 $ 35,273,279 Transfers out (30,416,749) (644,267) (2,526,949) (33,587,965) Total other financing sources (uses) (26,474,501) 21,453,924 6,705,891 1,685,314 Net change in fund balance (6,620,211) 10,624,417 4,705,627 8,709,833 Fund balance, beginning of year 3,113,239 47,118,071 41,177,283 91,408,593 Prior year restatements 247,646 - 160,116 407,762
Fund balance, beginning of year, as restated 3,113,239 47,365,717 41,337,399 91,816,355 Fund balance, end of year $ 13,737,656 40,745,506 $ 46,043,026 $ 100,526,188 $ City of San Luis Obispo, California
Statements of Revenues, Expenditures, and
Changes in Fund Balances
Governmental Funds
For the Fiscal Year Ended June 30, 2022
The accompanying notes are an integral part of these financial statements. 42

Water Sewer Parking Transit Totals
Assets
Current assets:

Cash and investment 33,073,104 $ 52,727,181 $ 14,128,393 $ 5,747,671 $ 105,676,349 $ Accounts receivable 4,398,755 2,785,425 29,280 1,877,303 9,090,763 Lease Receivables - - 167,582 - 167,582
Accrued interest receivable 245,438 190,379 393,894 10,631 840,342 Total current assets 37,717,297 55,702,985 14,719,149 7,635,605 115,775,036 Noncurrent assets:
433,565 278 4,041 437,884 -
Investment in joint venture 2,831,432 - - 2,831,432 -
Loan Receivables 1,476,189 798,745 - 2,274,934 -
Lease Receivables - 36,971,566 - 36,971,566 -
Capital assets:

Land 945,926 2,176,114 5,947,455 9,069,495 -
Infrastructure 108,647,893 93,826,165 28,282,818 110,972 230,867,848 Buildings and improvements 19,139,492 5,074,388 1,101,218 5,212,278 30,527,376 Equipment 6,118,066 5,976,085 1,823,586 9,021,099 22,938,836 Construction in progress 17,303,911 103,110,782 2,457,859 83,058 122,955,610 Total capital assets 152,155,288 210,163,534 39,612,936 14,427,407 416,359,165 Less accumulated depreciation (63,371,214) (51,023,333) (14,999,323) (9,928,541) (139,322,411) Capital assets, net of
accumulated depreciation 88,784,074 159,140,201 24,613,613 4,498,866 277,036,754 Total noncurrent assets 93,525,260 159,939,224 61,589,220 4,498,866 319,552,570 Total assets 131,242,557 215,642,209 76,308,369 12,134,471 435,327,606 Deferred Outflows of Resources
Pension related 2,383,634 2,162,794 526,173 145,137 5,217,738 290,042 301,984 77,327 18,309 687,662
70,786 6,739 97,880 175,405 -
2,744,462 2,471,517 701,380 163,446 6,080,805
City of San Luis Obispo
Statement of Net Position
Business-Type Activities - Enterprise Funds
June 30, 2022
Total deferred outflow of
resources
Cash and investments held by
fiscal agent
Other post-employment benefits
related
Unamortized loss on refunding of
debt
Enterprise Funds
The accompanying notes are an integral part of these financial statements. 43

Water Sewer Parking Transit Totals
Liabilities
Current liabilities:

Accounts payable 1,131,492 $ 6,544,127 $ 306,689 $ 470,446 $ 8,452,754 $ Accrued liabilities 89,113 75,376 29,662 17,500 211,651 Compensated absences 81,979 63,356 9,486 3,012 157,833
Unearned revenue - 190,752 700,000 4,301,164 5,191,916
Interest payable 64,865 32,915 67,414 - 165,194
Current portion of long-term debt 1,624,674 1,022,058 567,098 - 3,213,830 Total current liabilities 2,992,123 7,928,584 1,680,349 4,792,122 17,393,178 Noncurrent liabilities:

Compensated absences 191,285 147,831 22,133 7,029 368,278 Lease revenue bonds 9,527,139 293,094 4,172,799 - 13,993,032 Installment sale agreement - 3,569,862 - - 3,569,862
State loan/note payable 11,583,434 83,954,380 3,168,631 - 98,706,445 Net pension liability 9,830,803 9,394,348 2,446,700 555,660 22,227,511 508,157 591,852 130,120 30,808 1,260,937
Total noncurrent liabilities 31,724,513 97,867,672 9,940,383 593,497 140,126,065 Total liabilities 34,716,636 105,796,256 11,620,732 5,385,619 157,519,243 Deferred Inflows of Resources
Pension related 2,550,380 2,353,872 602,738 142,711 5,649,701 365,502 392,960 100,623 23,824 882,909
Lease related - 36,972,072 - 36,972,072 -
2,915,882 2,746,832 37,675,433 166,535 43,504,682
Net Position
Net investment in capital assets 66,119,613 70,307,546 16,802,965 4,498,866 157,728,990 Restricted:

Debt service 433,565 278 4,041 - 437,884
Transportation projects - - - 2,246,897 2,246,897
Unrestricted 29,801,323 39,262,814 10,906,578 - 79,970,715 Total net position $ 109,570,638 96,354,501 $ 27,713,584 $ 6,745,763 $ 240,384,486 $ Other post-employment benefits
related
Total deferred inflow of
resources
City of San Luis Obispo
Statement of Net Position
Business-Type Activities - Enterprise Funds
June 30, 2022
Enterprise Funds
Net other post-employment benefits
liability
The accompanying notes are an integral part of these financial statements. 44

Water Sewer Parking Transit Total
Operating revenues:

Charges for sales and service 24,511,658 $ 19,825,026 $ 3,943,018 $ 710,457 $ 48,990,159 $ Impact fees 5,160,020 3,685,008 - - 8,845,028
Fines and forfeitures - 1,425 928,909 - 930,334
Other revenues 222,451 130,589 18,390 3,320 374,750
Total operating revenues 29,894,129 23,642,048 4,890,317 713,777 59,140,271 Operating expenses:

Salaries and benefits 3,374,350 3,444,226 1,128,657 229,282 8,176,515 Supplies and maintenance 1,499,588 1,896,979 545,224 353,857 4,295,648 Contract services 10,700,008 1,574,248 1,008,835 2,666,079 15,949,170 General government 1,722,409 1,712,752 869,887 226,183 4,531,231 Depreciation 2,863,988 3,559,830 688,790 375,863 7,488,471 Total operating expenses 20,160,343 12,188,035 4,241,393 3,851,264 40,441,035 Operating income (loss) 9,733,786 11,454,013 648,924 (3,137,487) 18,699,236 Nonoperating revenues (expenses)
Use of money and property (714,713) (1,024,551) 666,894 (134,748) (1,207,118) Grants 1,848,593 97,413 538 3,210,238 5,156,782
Interest expense and fiscal charges (732,520) (388,023) (275,732) - (1,396,275) Income (loss) from investment
in joint venture 585,101 - - - 585,101
Total nonoperating revenues
(expenses) 986,461 (1,315,161) 391,700 3,075,490 3,138,490 Income (loss) before transfers
and capital contributions 10,720,247 10,138,852 1,040,624 (61,997) 21,837,726 Capital Contributions
Transfers out (794,769) (655,312) (235,233) - (1,685,314) Total transfers (794,769) (655,312) (235,233) - (1,685,314) Change in net position 9,925,478 9,483,540 805,391 (61,997) 20,152,412 Net position, beginning of year 99,201,571 84,800,287 26,905,947 6,807,760 217,715,565 Prior year restatements 885,527 1,628,736 2,246 - 2,516,509 Net position, beginning of year,
as restated 100,087,098 86,429,023 26,908,193 6,807,760 220,232,074 Net position, end of year $ 109,570,638 96,354,501 $ 27,713,584 $ 6,745,763 $ 240,384,486 $ Enterprise Funds
City of San Luis Obispo, California
Statement of Revenues, Expenses, and Changes in Fund Net Assets Business-Type Activities - Enterprise Funds
For the Fiscal Year Ended June 30, 2022
The accompanying notes are an integral part of these financial statements. 45

Water Sewer Parking Transit Total
Cash flows from operating activities:

Cash received from customers 29,124,164 $ 23,929,298 $ 4,894,662 $ 2,710,830 $ 60,658,954 $ (3,839,076) (12,057,282) (1,433,120) (3,000,375) (20,329,853) (1,712,752) (1,722,409) (869,887) (226,183) (4,531,231) (5,432,177) (5,390,029) (1,618,671) (339,057) (12,779,934) Net cash provided by (used in)
operating activities 9,954,444 12,945,293 972,984 (854,785) 23,017,936 Operating grants received 1,848,593 288,165 700,538 3,210,238 6,047,534 Transfers to other funds (794,769) (655,312) (235,233) - (1,685,314) (367,147) 1,053,824 465,305 3,210,238 4,362,220
Cash flows from capital and related
financing activities:
(40,437,426) (4,955,323) (581,164) (80,878) (46,054,791) Principal paid on debt financing (1,574,854) (991,973) (550,486) - (3,117,313) Interest paid on debt financing (873,993) (392,496) (304,792) - (1,571,281) Proceeds from issuance of debt 2,275,261 42,592,565 - - 44,867,826 Net cash used in capital and
related financing activities (5,128,909) 770,670 (1,436,442) (80,878) (5,875,559) Cash flows from investing activities:

Use of money and property (755,835) (1,042,658) 139,980 (136,978) (1,795,491) Net cash provided by
investing activities (755,835) (1,042,658) 139,980 (136,978) (1,795,491) 12,306,158 5,123,524 141,827 2,137,597 19,709,106
40,421,301 28,383,145 13,990,607 3,610,074 86,405,127
$ 52,727,459 33,506,669 $ 14,132,434 $ 5,747,671 $ 106,114,233 $ Enterprise Funds
City of San Luis Obispo, California
Statement of Cash Flows
Business-Type Activities - Enterprise Funds
For the Fiscal Year Ended June 30, 2022
Cash payments to suppliers for goods
and services
Cash payments to General Fund for
interfund services
Cash payments to employees for
services
Acquisition and construction of
capital assets
Cash flows from noncapital financing
activities:

Net change in cash and cash
equivalents
Cash and cash equivalents, beginning
of year, as restated
Cash and cash equivalents, end of
year
Net cash provided by (used in)
noncapital financing activities
The accompanying notes are an integral part of these financial statements. 46

City of San Luis Obispo, California
Statement of Cash Flows
Business-Type Activities - Enterprise Funds
For the Fiscal Year Ended June 30, 2022

Water Sewer Parking Transit Total
Operating income (loss) 9,733,786 $ 11,454,013 $ 648,924 $ (3,137,487) $ 18,699,236 $ Depreciation 2,863,988 3,559,830 688,790 375,863 7,488,471 Accounts receivable (769,965) 287,250 4,345 931,620 453,250 Accounts payable 142,314 (367,849) 120,939 19,561 (85,035) Unearned revenue - - 1,065,433 - 1,065,433
(166,288) (195,391) (31,007) (1,095) (393,781)
(1,705,210) (1,636,347) (419,007) (99,208) (3,859,772)
(144,181) (156,213) (40,000) (9,472) (349,866)
Net cash provided by (used in)
operating activities $ 9,954,444 $ 12,945,293 $ 972,984 $ (854,785) $ 23,017,936 Reconciliation of cash and investments to the balance sheet:

Cash and cash equivalents $ 33,073,104 $ 52,727,181 $ 14,128,393 $ 5,747,671 $ 105,676,349 433,565 278 4,041 437,884 -
Total cash and investments $ 33,506,669 $ 52,727,459 $ 14,132,434 $ 5,747,671 $ 106,114,233 Noncash investing, capital, and financing activities:

None
Enterprise Funds
Deferred OPEB and net OPEB
liability
Cash and investments held by fiscal
agent
Reconciliation of operating income
(loss) to net cash provided by (used in)
operating activities:

Adjustments to reconcile operating
income (loss) to net cash provided by
(used in) operating activities:

Change in assets, deferred outflows of
resources, liabilities, and deferred
inflows of resources:

Accrued salaries and
compensated absences
Deferred pensions and net
pension liability
The accompanying notes are an integral part of these financial statements. 47

Custodial Funds
Assets
Current assets:

Cash and investment $ 8,729,369
Accounts receivable 16,549
Accrued interest receivable 10,789
Capital assets, net of accumulated depreciation 789,639 Total assets 9,546,346
Liabilities
Accounts payable 385,905
Compensated absence 54,086
Accrued Salaries 10,887
Other liabilities 2,000
Total liabilities 452,878

NET POSITION
Restricted for
Individuals, organizations, and other governments 9,093,468 Total Net Position $ 9,093,468
City of San Luis Obispo, California
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2022
The accompanying notes are an integral part of these financial statements. 48

Custodial Funds
ADDITIONS:

Assessment revenue $ 152,848
Charges for services 1,014,126
Charges for public programming 39,951
Contribution from developers 1,704,858
Other revenue 1,647,991
Use of money and property (137,980)
Total additions 4,421,794
DEDUCTIONS:

Administration expenses 258,616
Contractual services 1,347,589
Materials and supplies 89,444
Public programming 65,750
Use of developer deposits 416,978
Depreciation 63,459
Total deductions 2,241,836
Change in net position 2,179,958
NET POSITION:

Beginning of year, as restated 6,913,510
End of year $ 9,093,468
City of San Luis Obispo
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the year ended June 30, 2022
The accompanying notes are an integral part of these financial statements. 49

50

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Page
Note 1: Summary of Significant Accounting Policies 1
Description of the Reporting Entity 1
Government-wide and Fund Financial Statements 1
Measurement Focus, Basis of Accounting and Basis of Presentation 1 Assets, Liabilities, and Net Position or Fund Balance 3 Reconciliation of Government-wide and Fund Financial Statements 6 Budgets and Budgetary Accounting 6
Fair Value Measurements 8
Note 2: Cash and Investments 8
Funds with Fiscal Agent 8
Investments 9
Note 3: Property Taxes 13
Note 4: Loan Receivable 14
Note 5: Capital Assets 15
Note 6: Leases 16
Note 7: Long Term Debt 18
Summary of Long-Term Debt 18
Governmental Activities Summary: 19
Revenue Bonds 19
Lease-Purchase Financing 20
2014 Energy Sources Conservation State Loan 21
Business-Type Activities Summary: 21
Revenue Bonds 21
Loans 23
Installment Sale Agreements 24
Note 8: Pension Plans 24
Agent-Multiple Employer Plan 25
General Information about the Pension Plan 25
Net Pension Liability 26
Changes in the Net Pension Liability 28
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions 29 Cost-Sharing Employer Plan 29
General Information about the Pension Plan 29
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions 31 51

City of San Luis Obispo, California
Notes to the Financial Statements
Table of Contents
June 30, 2022

Page
Payable to the Pension Plan 34
Note 9: Other Post-Employment Benefits (OPEB) 35
General Information about OPEB 35
Net OPEB Liability 35
Changes in the Net OPEB Liability 37
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB 38 Payable to the OPEB Plan 39
Note 10: Deferred Compensation Plan 39
Note 11: Interfund Transactions 39
Note 12: Joint Ventures, Jointly Governed Organizations and Operating Agreements 40 Whale Rock Commission 40
San Luis Obispo Regional Transit Authority 41
San Luis Obispo Council of Governments 41
Nacimiento Water Supply Project 41
Note 13: Risk Management 42
California Joint Powers Insurance Authority 42
Self-Insurance Programs of the Authority 43
Adequacy of Protection 43
Self-Insurance 43
Note 14: Commitments and Contingencies 44
Litigation 44
Grant Awards 44
Regional Transit Authority Pension Expense 44
Note 15: Construction and Other Significant Commitments 45 Note 16: Fund Balance Deficiency 45
Note 17: Subsequent Events 45
Note 18: New Accounting Standards 45
Accounting Standards Adopted 45
New Accounting Standards 46
Note 19: Prior Period Adjustments 47
52

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022
Note 1: Summary of Significant Accounting Policies
The basic financial statements of the City of San Luis Obispo (City) have been prepared in conformity with U.S. Generally Accepted Accounting Principles (GAAP), as applied to governmental agencies. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles.

The following is a summary of the more significant policies:

Description of the Reporting Entity
The City is a California charter city. It was incorporated on February 19, 1856 and chartered on May 1, 1876. It is organized in accordance with the Council-Mayor-City Manager form of government. With a population of approximately 45,920, the City provides a broad range of municipal services, including police and fire protection, parks and recreation, water and sewer utilities, street maintenance, public transportation, parking, planning, and building and safety.

As required by GAAP, these financial statements present the City (the primary government) and its component units, entities for which the government is considered to be financially accountable. Blended component units, although legally separate entities, are in substance part of the government's operations which creates the need to include their financial information with that of the primary government. The City has no component units that require discrete presentation in accordance with GASB standards.

Blended Component Unit. The City has identified The San Luis Obispo Capital Improvement Board (the Board) and the San Luis Obispo Public Financing Authority (the Authority) as blended component units in accordance with GASB standards. Both provide financing for the construction and acquisition of City facilities and consist of members of the City Council. Activities of both units are accounted for in the applicable City governmental funds and consist of the issuance of debt secured by the lease of property.

Separate financial statements are not prepared for the San Luis Obispo Capital Improvement Board or San Luis Obispo Public Financing Authority.

Government-wide and Fund Financial Statements
The government-wide financial statements (i.e. the statement of net position and the statement of activities) report information on all of the non-fiduciary activities of the primary government and its component unit. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely primarily on fees and charges for services.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable within a specific function or segment. The indirect expense allocation transfers general support services to operating programs based on the most current Cost Allocation Plan. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.

Separate fund financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.

Measurement Focus, Basis of Accounting and Basis of Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary funds and fiduciary funds. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.
53

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 1: Summary of Significant Accounting Policies (Continued) As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are charges between the government’s enterprise funds and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period.

For this purpose, the government generally considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. An exception to this timeframe is made to allow for the recognition of the final property tax distributions received from the County, if necessary, as well as for sales tax revenues received in September. This later provision is made in order for the City’s revenue stream to match that recognized by the State of California. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.

Property taxes, sales taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the government.

Major Funds and Other Funds. GASB Standards define major funds and require that the City’s major governmental funds be identified and presented separately in the fund financial statements. All other funds, called non-major funds, are combined and reported in a single column, regardless of their fund type.

Major funds are defined as funds that have assets, liabilities, revenues, or expenditures/expenses equal to ten percent of their fundtype total and at least five percent of the grand total. The General Fund is always a major fund. The City may also select other funds it believes should be presented as major funds.

The City reports the following major governmental funds:

General Fund. This fund is the government’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.

Capital Outlay Fund. This fund was established to account for all of the City’s construction projects and capital purchases in excess of $25,000 with the exception of those funded through non-major capital project funds and Enterprise Funds. Financing is provided primarily through transfers in from the General Fund, and from State and Federal Grants.

The only proprietary funds the City reports are the Enterprise Funds, all of which are major funds. Proprietary funds are accounted for on the economic resources measurement focus and the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. The City reports the following major enterprise funds:

Water Fund. This fund accounts for the provision of water services to the residents of the City as well as some customers in the County. All activities necessary to provide such services are accounted for in this fund, including, but not limited to, administration, operations, maintenance, capital improvements and debt service.

Sewer Fund. This accounts for the provision of wastewater collection and treatment services to the residents of the City as well as some customers in the County. All activities necessary to provide such services are accounted for in this fund, including, but not limited to, administration, operations, maintenance, capital improvements and debt service.

Parking Fund. This fund accounts for activities related to the implementation of the Access and Parking Management Plan, including the operation of municipal parking lots, parking structures, parking meters and residential parking districts. All activities necessary to provide such services are accounted for in this fund, including, but not limited to, administration, operations, maintenance, capital improvements and debt service.
54

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 1: Summary of Significant Accounting Policies (Continued) Transit Fund. This fund accounts for the operation and maintenance of the City's transit system. Although user fees are not the primary funding source for the operation of the system, the State of California and the Federal government, which provide the major funding sources for the system, require that local transit systems be accounted for on an enterprise fund basis.

Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the enterprise funds are charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.

The City has established eight Custodial Funds, which are used to account for funds held by the City as an agent for Whale Rock Commission, Jack House Committee, County Task Force, individual donations, Boysen Ranch, San Luis Ranch Community Facilities District and San Luis Coastal Unified School District and San Luis Obispo County Public Access, Inc. Public Access Television. Custodial funds are accounted for using the accrual basis of accounting. See supplementary information for a complete list of Custodial Funds.

Assets, Liabilities, and Net Position or Fund Balance
Cash, Cash Equivalents and Investments. The City pools cash resources of its various funds to facilitate cash management. Cash in excess of current requirements is invested and reported as investments. It is the City’s intent to hold investments until maturity.

However, the City may, in response to market conditions, sell investments prior to maturity in order to improve the quality, liquidity or yield of the portfolio.

The City's cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. Cash and investments held by fiscal agents are treated as cash equivalents for purposes of the statement of cash flows.

Money markets and non-negotiable certificates of deposit are reported at amortized cost. All other investments are stated at fair value.

Receivables and Payables. Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as “due to/from other funds”.

All receivables are shown net of any allowance for uncollectible accounts if material. Charges for utility services rendered but unbilled as of June 30 are accrued and are recognized as revenues.

Prepaids and Inventories. The City has no significant inventories. The cost of any inventoriable item has been recorded as an expenditure or expense at the time of purchase. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. Prepayments in the governmental funds are accounted for using the consumption method.

Restricted Assets. Certain proceeds of debt financings, as well as resources set aside for their repayment, are classified as restricted assets on the balance sheet because they are maintained in separate trust bank accounts and their use is limited by applicable debt covenants. Notes 2 and 5 have additional information on funds held by fiscal agents. 55

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 1: Summary of Significant Accounting Policies (Continued) Capital Assets. Capital assets, which include property, plant, equipment and infrastructure assets (such as streets, sidewalks and bridges), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements, and in the proprietary funds statement of net position. Capital assets are defined by the City as assets with an initial, individual cost of more than $25,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets, donated works of art and similar items, and capital assets received in a service concession arrangement would be reported at acquisition value rather than fair value. The costs of normal maintenance and repairs that do not add to the value of assets or materially extend assets’ lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of the business- type activities is included as part of the capitalized value of the assets constructed. Detailed information on the City’s capital assets can be found in Note 4.

Property, plant and equipment of the City are depreciated using the straight line method over the following estimated useful lives:

Deferred Outflows and Inflows of Resources. The City recognizes deferred outflows and inflows of resources in the Statement of Net Position. A deferred outflow of resources is defined as a consumption of net assets by the City that is applicable to a future reporting period. The City has deferred outflows of resources related to pensions, other post-employment benefits (OPEB), and unamortized loss on refunding of debt. A deferred inflow of resources is defined as an acquisition of net assets by the City that is applicable to a future reporting period. The City has deferred inflows of resources related to pensions and OPEB.

Compensated Absences. City employees are granted vacation and sick leave in varying amounts. In the event of termination, employees are reimbursed for the total value of their accumulated vacation days. Employees are reimbursed for 10% to 30% of the accumulated sick leave only upon retirement and only after at least 10 years of service. In selected cases, similar accumulated sick leave reimbursements may be available after 20 years of continuous employment. An employee's estate is reimbursed for 30% of the employee's accumulated sick leave in the event of death while in the City's employ. A liability for compensated absences is accrued in the government-wide and proprietary funds financial statements.

Long-Term Obligations. In the government-wide financial statements, and proprietary funds in the fund financial statements, longterm debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary funds statement of net position. Bond premiums and discounts and deferred amounts on refunding are deferred and amortized over the life of the bonds. Deferred amounts on refunding are reported separately from assets and liabilities in the Statement of Net Position. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are expensed as incurred.

In the fund financial statements, governmental funds recognize bond premiums and discounts, as well as bond issuance costs, during the period they originate. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

Assets Years
Infrastructure 20-100
Buildings and structures 20-50
Improvements other than buildings 10-100
Equipment 3-21
56

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 1: Summary of Significant Accounting Policies (Continued) Net Pension Liability. The City recognizes a net pension liability, which represents the excess of the total pension liability over the fiduciary net position of the pension reflected in the actuarial reports provided by the California Public Employees’ Retirement System (CalPERS) plans (Plans). The net pension liability is measured as of the City’s prior fiscal year-end. Changes in the net pension liability are recorded, in the period incurred, as pension expense or as deferred inflows of resources or deferred outflows of resources depending on the nature of the change. The changes in the net pension liability that are recorded as deferred inflows of resources or deferred outflows of resources (that arise from changes in actuarial assumptions or other inputs and differences between expected or actual experience) are amortized over the weighted average remaining service life of all participants in the respective pension plan and are recorded as a component of pension expense beginning with the period in which they are incurred.

For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s CalPERS Plans and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms.

Investments are reported at fair value. Projected earnings on pension investments are recognized as a component of pension expense General fund is the governmental fund used to liquidate the pension liabilities of the governmental activities.

Other Post-Employment Benefits (OPEB) Liability. For purposes of measuring net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City’s plan (OPEB Plan), and additions to or deductions from the OPEB Plan’s fiduciary net position, have been determined on the same basis as they are reported by the California Employer’s Retiree Benefit Trust Program (CERBT). For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with benefit terms.

Investments are reported at fair value. General fund is the governmental fund used to liquidate the OPEB liabilities of the governmental activities.

Generally accepted accounting principles require that the reported OPEB results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used:

Valuation Date June 30, 2021
Measurement Date June 30, 2021
Measurement Period July 1, 2020 to June 30, 2021
Fund Equity. In the fund financial statements, fund balance for governmental funds is reported in classifications that comprise a hierarchy based primarily on the extent to which the City is bound to honor constraints on the specific purpose for which amounts in the funds can be spent. Fund balance is reported in five components in accordance with GASB Statement No. 54 Fund Balance Reporting and Governmental Fund Type Definitions – nonspendable, restricted, committed, assigned and unassigned. The City Council may take action via minute order to add, delete or amend a fund balance commitment that is not required as a condition of a bond covenant or other external, legal requirement.

Nonspendable. This component includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact.

Restricted. This component consists of amounts that have constraints placed on them either externally by third-parties (creditors, grantors, contributors, or laws or regulations of other governments) or by law through constitutional provisions or enabling legislation. Enabling legislation authorizes the City to assess, levy, charge or otherwise mandate payment of resources (from external resource providers) and includes legally enforceable requirements (compelled by external parties) that those resources be used only for the specific purposes stipulated in the legislation.

Committed. This component consists of amounts that can only be used for specific purposes pursuant to constraints imposed by minute order authorized by the City Council. Those committed amounts established by minute order cannot be used for any other purpose unless the City Council adopts a new minute order so directing. With respect to encumbered amounts, the City may take steps to cancel the order for goods or services and thereby terminate the obligation. 57

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 1: Summary of Significant Accounting Policies (Continued) Assigned. This component consists of amounts that are constrained by the City’s intent to be used for specific purposes but are neither restricted nor committed. The City Manager or Director of Finance are authorized by City Council, via formal action at regular public meetings, to assign amounts to a specific purpose. Constraints imposed on the use of assigned amounts can be removed with no formal Council actions.

Unassigned. This component is the residual classification for the General Fund and includes all amounts not contained in the other classifications. Unassigned amounts are technically available for any purpose. The General Fund is the only fund that reports a positive unassigned fund balance amount. Other governmental funds may report negative unassigned fund balance, which occurs when a fund has a residual deficit after allocation of fund balance to the nonspendable, restricted, or committed categories.

Fund Balance Spending Practice. The City follows a practice in which restricted, committed, assigned, and unassigned fund balances are spent when more than one amount is available for a specific purpose. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources (committed, assigned and unassigned) as they are needed. When unrestricted resources (committed, assigned and unassigned) are available for use, it is the City’s policy to use committed resources first, then assigned, and then unassigned as they are needed.

Reconciliation of Government-wide and Fund Financial Statements A reconciliation between total fund balance of the governmental funds and total net position of the governmental activities as reported in the government-wide statement of net position is presented in the basic financial statements.

A reconciliation between total net change in fund balance of the governmental funds and total change in net position of governmental activities as reported in the government-wide statement of activities is presented in the basic financial statements.

There are no differences between total net position of the proprietary funds and total net position of the business-type activities as reported in the government-wide statement of net position.

Budgets and Budgetary Accounting
Overview. The City has received national recognition for its use of a two-year Financial Plan and budgetary process that emphasizes long-range planning and effective program management. Significant features of the City's two-year Financial Plan include the integration of Council goal setting into the budgetary process and the extensive use of formal policies and measurable objectives.

The Financial Plan includes operating budgets for two years and a capital improvement plan (CIP) covering five years.

Under this multi-year approach, appropriations continue to be made annually; however, the Financial Plan is the foundation for preparing the budget for the second year. Additionally, unexpended operating appropriations from the first year may be carried over for specific purposes into the second year with the approval of the City Manager.

Management Policies. The overall goal of the City's Financial Plan is to link what the City wants to accomplish over the next two years with the resources required to do so. Formal statements of budgetary policies and major objectives provide the foundation for achieving this goal. Key budget principles include: maintaining fund balances at levels which will protect the City from future uncertainties; estimating revenues at realistic levels; making current expenditures with current revenues; maintaining the City's traditional commitment to a strong General Fund; and complying with provisions of the State constitution, City charter, municipal code, and sound fiscal policy. Key revenue policies include: maintaining a diversified and stable revenue base; setting enterprise fund rates at levels that fully recover the total cost of providing services in the Water, Sewer and Parking Funds; and at policy levels for cost recovery in the Transit Fund; charging fees for General Fund programs in accordance with adopted user fee cost recovery goals; and ensuring that new development pays its fair share of the cost of constructing necessary community facilities. 58

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 1: Summary of Significant Accounting Policies (Continued)  Budget Process. The City Manager is responsible for preparing the budget and submitting it to the Council for approval.

Although specific steps will vary from year to year, the following is an overview of the general approach used under the City's two-year budgetary process:
 First Year. The Financial Plan process begins with City Council goal setting to determine major objectives to be accomplished over the next two years. As part of this process, community groups, interested individuals, and Council advisory bodies present their recommendations to the Council. Goals approved by the City Council are incorporated into the budget instructions issued to the operating departments, who are responsible for submitting initial budget proposals. After these proposals are comprehensively reviewed and a detailed financial forecast is prepared, the City Manager issues the Preliminary Financial Plan for public comment. A series of study sessions and public hearings are then held leading to Council adoption of the Financial Plan and Budget prior to the start of the fiscal year.
 Second Year. Before the beginning of the second year of the two-year cycle, the Council reviews the progress during the first year, adjusts as necessary and approves appropriations for the second fiscal year. Unspent operating appropriations from the first year may be carried over for specific purposes into the second year with the approval of the City Manager. Unspent and unencumbered operating appropriations lapse at the end of the second year. The fiscal year which ended June 30, 2022 was the first year of the 2021-23 two-year cycle.  Mid-Year Reviews. The Council formally reviews the City's financial condition and amends appropriations, if necessary, each February.
 Status Reports. Financial reports are prepared monthly to monitor the City's fiscal condition; more formal reports are posted to the City's website on a quarterly basis. Additionally, more focused reports are issued on key revenues, such as sales tax, transient occupancy tax and quarterly reports on investments. The status of major goals and program objectives, including Construction in Progress (CIP) projects, are also formally reported to the Council on an ongoing basis.

Accounting and Budget Administration. Budgets are prepared for each fund in accordance with its respective basis of accounting consistent with U.S. Generally Accepted Accounting Principles (GAAP). All governmental funds have legally adopted budgets annually. While budgets are prepared for the City's capital projects funds, the capital projects generally span more than one year and are effectively controlled at the project level; accordingly, budgetary comparisons are not presented for capital projects funds in the accompanying other supplementary information following the basic financial statements.

As provided under the City Charter, the Council may amend or supplement the budget at any time after its adoption by majority vote of the Council members. The legal level of budgetary control – the level at which expenditures are not to exceed appropriations – is the fund level.

For management control purposes, the City Manager has the authority to make or approve administrative adjustments to the budget provided those changes will not have a significant policy impact nor affect budgeted year-end fund balances. Department heads have the authority to transfer line-item budgets within the department within a fund. During fiscal year 2022 several supplemental budget appropriations were made to reflect the inclusion of costs related to prior year encumbered amounts as well as the rollover of unspent capital appropriations. Additional appropriations were added to fund a prepayment made to the retirement system as well as to provide additional resources for the Community Development Department to ensure that it maintained a development review process that complied with State law considering the increased demand for services. These adjustments were material when compared to the original appropriations. Both the original and final amended budgets of the General Fund are presented as required supplementary information following the notes to the financial statements. Budget information for non-major governmental funds with annual budgets is presented in other supplementary information following the notes to the financial statements. 59

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 1: Summary of Significant Accounting Policies (Continued) Encumbrances. The City uses an encumbrance system as an extension of normal budgetary accounting for the other governmental funds. Under this system, purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of applicable appropriations. Encumbrances outstanding at year-end are recorded as restricted, committed, or assigned fund balances since they do not constitute expenditures or liabilities. Unencumbered appropriations lapse at year-end.

Encumbered appropriations are carried forward in the ensuing year’s budget.

Indirect Cost Reimbursement. All of the City's general government and engineering programs are accounted and budgeted for in the General Fund. However, some of these support service programs also benefit the City's enterprise and custodial fund operations, and accordingly, payments are made from these funds to reimburse the General Fund for these services. The payments are based on a Central Service Cost Allocation Plan prepared for this purpose, which distributes these shared costs in a uniform, consistent manner in accordance with GAAP.

Fair Value Measurements
As defined in GASB Statements, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The City uses valuation techniques that are appropriate under the circumstances and for which sufficient data are available to measure fair value. Valuation techniques maximize the use of relevant observable inputs and minimize the use of unobservable inputs.

GASB Statements establish a hierarchy of inputs to valuation techniques used to measure fair value. That hierarchy has three levels:

Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 — Observable inputs, other than Level 1 prices, for the asset or liability, either directly or indirectly.

Level 3 — Unobservable inputs for the asset or liability.

For fiscal year ended June 30, 2022, the application of valuation techniques applied to the City’s financial statements has been consistent.

Note 2: Cash and Investments
The City follows the practice of pooling cash and investments for all funds under its direct daily control. Funds held by outside fiscal agents under provisions of bond indentures are maintained separately.

Interest earned on pooled cash and investments is allocated quarterly to the various funds based on the respective fund's average quarterly cash balance. Interest earned from cash and investments with fiscal agents is credited directly to such funds.

Funds with Fiscal Agent
The City has monies held by trustees or fiscal agents pledged to the payment or security of certain bonds. The California Government Code provides that these funds, in the absence of specific statutory provisions governing the issuance of bonds, may be invested in accordance with the ordinance, resolutions, or indentures specifying the types of investments its trustees or fiscal agents may make.

These ordinances, resolutions, or indentures are generally more restrictive than the City's general investment policy. In no instance have additional types of investments been authorized which are not permitted by the City's investment policy. 60

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 2: Cash and Investments (Continued)
Investments
The City is authorized by its investment policy, in accordance with Section 53601 of the California Government Code, to invest in the following instruments:
 Treasury bills and notes
 Government Sponsored Enterprises
 Commercial paper
 Repurchase agreements
 Bankers' acceptances
 Corporate medium-term notes
 Negotiable certificates of deposit
 Collateralized bank deposits
 Money market mutual funds
 State Local Agency Investment Fund (LAIF)
Investments are stated at fair value, based on quoted market prices, in accordance with GASB standards. Investment income has been adjusted to reflect any unrealized gains and losses resulting from the fair value adjustment annually. While U.S. generally accepted accounting principles require recording any increases or decreases in the market value of the City’s investments, it is the City’s policy to make all investment decisions based on holding them through maturity, and therefore the City may not realize the gains or losses resulting from the fair value adjustment. As such, changes in market value generally do not affect the long-term results of the portfolio, but they can result in significant fluctuations from year-to-year.

The fair value of the City’s position in the State LAIF pool is the same as the value of the pool shares. The State LAIF pool credit quality is unrated. LAIF is overseen by the Local Agency Investment Advisory Board, which consists of five members, in accordance with State statute. The State Treasurer’s Office audits the fund annually.

At June 30, 2022, cash and investments consisted of the following:

Fair
Value
Percent of
Portfolio
Cash and cash equivalents 43,770,453 $ 20.39%
Investments:

State Local Agency Investment Fund 68,226,726 31.79%
U.S. Treasury Bond / Note 56,725,859 26.43%
Federal Agency Bond / Note 22,151,948 10.32%
Corporate Note 13,692,137 6.38%
Municipal Bond/Note 2,081,845 0.97%
Asset-Backed Securities 1,688,832 0.79%
Negotiable Certificates of Deposit 3,354,299 1.56%
Non-Negotiable Certificates of Deposit 2,025,090 0.94%
Money Market Funds 904,511 0.42%
Total investments 170,851,247 79.61%
Total cash and investments $ 214,621,700 100.00%
61

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 2: Cash and Investments (Continued)
At June 30, 2022, cash and investments are reflected in the financial statements as following:

Investment Fair Value Measurements. The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. Investment securities classified in Level 1 of the fair value hierarchy are valued using prices quoted in active markets for those securities. Investment securities classified in Level 2 of the fair value hierarchy are valued using matrix pricing or market corroborated pricing. Matrix pricing is used to value securities based on the securities’ relationship to benchmark quoted prices.

The following is a summary of the fair value measurements as of June 30, 2022:

Custodial Credit Risk – Deposits with Financial Institutions. The custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, the City will not be able to recover deposits. Deposits with financial institutions, including non-negotiable certificates of deposit, totaled $45,787,008 at June 30, 2022 and were insured or collateralized with securities held by the pledging financial institution's trust department or agent in the City's name.

Governmental
Funds
Business-Type
Funds
Fiduciary
Funds Total
Cash and investments $ 99,356,588 $ 105,676,349 $ 8,729,369 $ 213,762,306 Cash and investments held by fiscal agents 421,510 437,884 - 859,394 Total cash and investments $ 99,778,098 $ 106,114,233 $ 8,729,369 $ 214,621,700 Government-Wide Statement of Net
Position
Fair Value
Investments by fair value hierarchy
U.S. Treasury Bond / Note 56,725,859 $ - $ 56,725,859 $ - $ Federal Agency Bond / Note 22,151,948 - 22,151,948 -
Corporate Note 13,692,137 - 13,692,137 -
Municipal Bond/Note 2,081,845 - 2,081,845 -
Asset-Backed Securities 1,688,832 - 1,688,832 -
Negotiable Certificates of Deposit 3,354,299 - 3,354,299 - Total investments by fair value hierarchy 99,694,920 $ - $ 99,694,920 $ - Investments not subject to fair value hierarchy
State Local Agency Investment Fund 68,226,726
Non-Negotiable Certificates of Deposit 2,025,090
Money Market Funds 904,511
Total investments not subject to fair value hierarchy 71,156,327 Total investments measured at fair value $ 170,851,247
Fair Value Measurements Using
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
62

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 2: Cash and Investments (Continued)
The California Government Code requires California financial institutions to secure the City's deposits by pledging government securities as collateral. The market value of the pledged securities must equal 110% of the City's deposits. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes equal to 150% of the City's deposits or letters of credit issued by the Federal Home Loan Bank of San Francisco having a value of 105% in excess of the total amount of deposits.

Custodial Credit Risk - Investments. This is the risk that in the event of the failure of a counterparty, the City will not be able to recover the value of its investments that are in the possession of an outside party. All of the City’s investments in securities are insured or registered and held by a counterparty in the City’s name in accordance with the City’s policies.

Interest Rate Risk. This is the risk that the market value of securities in the portfolio will fall due to changes in general interest rates.

In accordance with its policies in the Investment Management Plan, the City mitigates interest rate risk by:
 Structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market before maturity.  Investing operating funds primarily in shorter-term securities.

The City’s investment policy also includes portfolio maturity targets. A minimum of 20% of the portfolio will be invested in securities maturing in one year or less. Up to 80% of the portfolio can be invested in securities with a maturity over one year, with no more than 10% of the portfolio invested in securities with a maturity over five years.

Maturities using the segmented time distribution method for those investments requiring this disclosure are as follows:

Investments held by fiscal agents are structured with maturity dates that correspond to the payment of final debt service of the respective bond indenture.

Credit Risk. This is the risk of loss due to the failure of the security issuer or backer. The City’s policies to mitigate credit risk include:
 Limiting investments to the safest types of securities. As noted above, the California Government Code limits the investment vehicles available to local agencies. The credit risk of these securities is measured by the assignment of a rating by a nationally recognized statistical rating organization. The table below presents the rating for each investment type as provided by Standard & Poor’s except as noted.
 Pre-qualifying the financial institutions, broker/dealers, intermediaries and advisors with which the City will do business.

Fair Value
Less Than One
Month
One Month to
One Year
One to Five
Years
Over Five
Years
State Local Agency Investment Fund 68,226,726 $ - $ 68,226,726 $ - $ - $ U.S. Treasury Bond / Note 56,725,859 - 15,296,323 41,429,536 - Federal Agency Bond / Note 22,151,948 - 4,529,113 17,622,835 - Corporate Note 13,692,137 - 4,083,726 9,608,411 -
Municipal Bond/Note 2,081,845 - - 2,081,845 -
Asset-Backed Securities 1,688,832 - 38,679 1,650,153 -
Negotiable Certificates of Deposit 3,354,299 - 3,354,299 - - Non-Negotiable Certificates of Deposit 2,025,090 - 2,025,090 - - Money Market Funds 904,511 904,511 - - -
Total maturities $ 904,511 170,851,247 $ 97,553,956 $ 72,392,780 $ - $ Cash in banks and on hand 43,770,453
$ 214,621,700
63

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 2: Cash and Investments (Continued)
The following table identifies the Standard & Poor’s credit quality ratings for those investments requiring this disclosure as of June 30, 2022:

Concentration Credit Risk. The City’s policies contained in the Investment Policy and Management Plan provide guidelines (by type of investment that limits either the dollar amount, the percent of the portfolio or the maturity term) for diversifying the investment portfolio so that potential losses on individual securities will be minimized.

The City’s Investment Management Plan outlines the following criteria related to portfolio diversification:
 No more than 5% of the City’s portfolio (exclusive of government agency issues or LAIF) shall be placed with any financial institution.
 No more than 25% of the City’s portfolio shall be invested in collateralized certificates of deposit issued by financial institutions.
 Certificates of deposit (negotiable and collateralized) placed by the City shall not constitute more than 15% of the total assets of the institution; and negotiable certificates of deposit will only be placed with institutions with total assets in excess of $200 million and that maintain a ratio of equity to total assets of at least 5%.

Foreign Currency Risk. The City does not hold any investment that is based on foreign currency exchange rates.

Type of Investment Rating Total
Federal Agency Bonds / Notes AA+ $ 22,151,948
Corporate Notes AA 3,772,200
A+ 3,716,448
A 3,160,474
A- 2,519,382
BBB+ 523,633
Total Corporate Notes 13,692,137
Municipal Bond/Note AAA 584,228
AA+ 291,627
AA 227,666
AA- 978,324
Asset-Backed Securities AAA 1,688,832
Negotiable Certificates of Deposit A-1+ 1,144,808
A-1 2,209,491
Total Negotiable Certificates of Deposit 3,354,299
Not Applicable:

U.S. Treasury Bonds / Notes 56,725,859
Not Rated:

State Local Agency Investment Fund 68,226,726
Non-Negotiable Certificates of Deposit 2,025,090
Money Market Mutual Funds 904,511
Total Investments $ 170,851,247
64

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 3: Property Taxes
Property taxes in the State of California (State) are administered for all local agencies at the county level, and consist of secured, unsecured and utility tax rolls. The following is a summary of major policies and practices relating to property taxes:
 Property Valuation. Valuations are established by the Assessor of the County of San Luis Obispo (County) for the secured and unsecured property tax rolls; the utility property tax roll is valued by the State Board of Equalization. Under the provisions of Article XIIIA of the State Constitution (Proposition 13 adopted by the voters on June 6, 1978), properties are assessed at 100% of full value. Proposition 13 also modified the value of taxable real property for fiscal 1979 by rolling back values to fiscal 1976 levels. From this base of assessment, subsequent annual increases in valuation are limited to a maximum of 2%. However, increases to full value are allowed for property improvements or upon change in ownership.

Personal property is excluded from these limitations and is subject to annual reappraisal.  Tax Levies. Under the provisions of Proposition 13, the countywide tax levy for general revenue purposes is limited to 1% of full market value, which results in a tax rate of $1.00 per $100 assessed valuation. Tax rates for voter approved indebtedness are excluded from this limitation.
 Tax Levy Dates. All lien dates attach annually on January 1 preceding the fiscal year for which the taxes are levied. The fiscal year begins July 1 and ends June 30 of the following year. Taxes are levied on both real and unsecured personal property as it exists at that time. The lien against real estate as well as the tax on personal property is not relieved by subsequent renewal or change in ownership.
 Tax Collections. The County Treasurer/Tax Collector is responsible for all property tax collections. Taxes and assessments on the secured and utility rolls, which constitute a lien against the property, may be paid in two installments: the first installment is due on November 1 of the fiscal year and is delinquent if not paid by December 10; and the second installment is due on March 1 of the fiscal year and is delinquent if not paid by April 10. Unsecured personal property taxes do not constitute a lien against real property. However, if the taxes become delinquent the lien is attached against anything the individual owns, which could include real property. Payment must be made in one installment, which is delinquent if not paid by August 31 of the fiscal year. Significant penalties are imposed by the County for late payments.  Teeter Plan. In 1993-94 the City elected to receive property tax revenue in accordance with the alternative method of distribution prescribed by Sections 4701-4717 of the California Revenue and Taxation Code, which is commonly known as the “Teeter Plan” whereby the County remits 100% of taxes levied without regard to delinquencies. The County then pursues collection, retaining any delinquent taxes and related penalties and interest.  Tax Levy Apportionments. Due to the nature of the countywide maximum levy, it is not possible to identify general purpose tax rates for specific entities. Under State legislation adopted after the passage of Proposition 13, apportionments to local agencies are made by the County Auditor Controller based primarily on two factors: the ratio that each agency represented of the total County wide levy for the three years prior to fiscal 1979; and subsequent adjustments to these apportionments and transfers to the “Educational Revenue Augmentation Fund” (ERAF) as determined by the State.  City Property Tax Distribution Policy. Property taxes are recorded in the General Fund as general-purpose revenue.

Transfers are made from the General Fund as needed to support expenditures in the Capital Outlay, Open Space Protection, Fleet Replacement, Information Technology Replacement, Major Facility Replacement and Debt Service Funds. Property taxes receivable at June 30, 2022 have been accrued since they will be collected within 60 days subsequent to year-end. 65

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 4: Loan Receivable
Loans receivable, including accrued interest comprised balances from the following programs, all of which are discussed on the following pages.

A. Affordable Housing Loans - The City’s Affordable Housing Fund provides grants and loans to certain development projects that meet the City’s affordability criteria. As of June 30, 2022, the Fund has 17 loans for affordable housing developments with interest rates ranging from 0% to 4% and repayment terms of 30 to 57 years. These loans had a remaining principal balance of $8.5 million; 4 loans for $669,063 are forgivable if certain criteria are met. The Fund has secured more than 450 affordable housing units for City residents.

B. BEGIN Homeownership Loan - The City has provided deferred payment loans utilizing funding from the State of California under the BEGIN program. On June 30, 2022, the Fund had two outstanding loans utilizing this program with a principal balance of $130,000. These loans are provided for a term of 30 years with an annual interest rate of 3%.

C. Down Payment Assistance - The Fund has provided down payment assistance loans to individuals purchasing affordable housing units. As of June 30, 2022, the Affordable Housing Fund had eight outstanding down payment assistance loans with a principal balance of $381,155. These loans are provided for a term of 30 years with an annual interest rate of 3%.

D. Impact Fee Deferral Loan – The City has provided certain affordable housing developments with loans equal to the amount of certain impact fees. These loans are reflected in the respective impact fee funds. As of June 30, 2022, the total principal outstanding was $4,487,674. These loans are provided for a term of 55 years with an annual interest rate of 3%.

E. Community Development Block Grant (CDBG) Fund Loans – The City has provided loans from the City’s allocation of CDBG funding for certain affordable housing developments. As of June 30, 2022, the CDBG Fund had $1,112,944 principal outstanding on the loans. The loans have terms of 30 years and annual interest rates of 3% to 4%.

Total Balance
Description Loan Receivable Interest Receivable June 30, 2022 Governmental Funds:

Affordable Housing Loan 8,490,688 $ 1,608,237 $ $ 10,098,925 BEGIN Homeownership Loan 130,000 48,775 178,775
Down Payment Assistance 381,155 69,328 450,483
CDBG 1,112,944 648,481 1,761,425
Impact Fee Loan 2,212,740 175,711 2,388,451
Total governmental funds 12,327,527 2,550,532 14,878,059 Enterprise Funds:

Impact Fee Loan 2,274,934 278,913 2,553,847
Total enterprise funds 2,274,934 278,913 2,553,847
Total Primary Government $ 14,602,461 $ 2,829,445 $ 17,431,906 66

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 5: Capital Assets
GASB standards require that the City report in the government-wide statements the value of all capital assets net of accumulated depreciation, including infrastructure assets, in accordance with GAAP. Infrastructure assets are defined as long-lived capital assets that are stationary in nature and normally can be preserved for a significantly greater number of years than most capital assets.

The minimum requirement for compliance with GASB standards is to provide infrastructure valuations for all assets constructed, acquired, or placed into service on or after July 1, 1980. Relevant assets for the City were valued at one of two dates: 1) the original date of construction, if available, or 2) the incorporation date of the City. Each asset was reviewed to determine the adequacy of the data to value the asset prior to July 1, 1980 using historical cost or estimated historical cost.

Capital assets activity for the fiscal year ended June 30, 2022 was as follows:

Balance Balance
June 30, 2021 Additions Deletions Transfers Adjustments June 30, 2022 Governmental activities:

Capital assets not being depreciated:

Land 32,263,736 $ - $ - $ - $ - $ 32,263,736 $
Construction in progress 8,859,498 14,980,282 (16,990) (13,185,786) - 10,637,004 Public art 646,630 - - - - 646,630
Total capital assets not -
being depreciated 41,769,864 14,980,282 (16,990) (13,185,786) - 43,547,370 Capital assets being depreciated:

Infrastructure 201,307,747 - - 4,402,519 - 205,710,266
Accumulated Depreciation (70,327,468) (3,340,085) - - (763,910) (74,431,463) Buildings and improvements 41,071,359 - - 7,433,755 - 48,505,114 Accumulated Depreciation (21,770,258) (1,606,739) - - 806,458 (22,570,539) Equipment 30,980,665 - - 1,349,512 - 32,330,177
Accumulated Depreciation (18,262,924) (1,618,942) - - (73,170) (19,955,036) Capital assets being amortized:

Right of use - Lease asset - 157,527 - - - 157,527
Accumulated Amortization - (37,065) - - - (37,065)
Total capital assets being
depreciated/amortized, net 162,999,121 (6,445,304) - 13,185,786 (30,622) 169,708,981 Governmental activities,
capital assets, net $ 204,768,985 $ 8,534,978 $ (16,990) $ - $ (30,622) $ 213,256,351 Business-type activities:

Capital assets not being depreciated:

Land $ 9,069,495 $ - $ - $ - $ - $ 9,069,495
Construction in progress 82,168,910 46,158,398 (93,545) (5,278,153) - 122,955,610 Total capital assets not
being depreciated 91,238,405 46,158,398 (93,545) (5,278,153) 132,025,105 - Capital assets being depreciated:

Infrastructure 227,144,816 - - 4,770,092 (1,047,060) 230,867,848 Accumulated Depreciation (102,024,535) (5,578,768) - (473,101) - (108,076,404) Buildings and improvements 30,156,529 (7,303) 50,000 328,150 30,527,376 Accumulated Depreciation (15,225,339) (601,014) - (134,991) - (15,961,344) Equipment 21,761,714 - - 458,061 719,061 22,938,836
Accumulated Depreciation (14,581,156) (1,308,689) - 605,182 - (15,284,663) Total capital assets being
depreciated, net 147,232,029 (7,488,471) (7,303) 5,278,153 (2,759) 145,011,649 Business-type activities,
capital assets, net 238,470,434 38,669,927 (100,848) - (2,759) 277,036,754 Total Government-wide $ 443,239,419 $ 47,204,905 $ (117,838) $ (33,381) - $ $ 490,293,105 67

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 5: Capital Assets (Continued)
Depreciation expense was charged to functions/programs as follows:

Note 6: Leases
Pursuant to GASB 87, the City has the following lease receivables:

James Town
On 11/5/2013, the City entered into a lease with James Town Premier SL Retail, L.P. or commercial retail space located at the Marsh Street parking structure. Under the lease, the lessee pays the City $11,310 per month from 2/1/2014 – 1/31/2015 and with 3% increase each year from 2/1/2015 – 1/31/2024. The lease term has one 5-year extension option. The lease receivable is measured as the present value of the future minimum rent payments expected to be received during the lease term at a discount rate of 3.5%, which was the 5-year US Treasury rate in effect when the lease was entered into. In fiscal year 2022, the City recognized $165,652 of lease revenue and $11,983 of interest revenue under the lease.

Crown Castle
On 9/19/2017, the City entered into a lease with Crown Castle NG West LLC to utilize City utility poles for communications equipment. Under the lease, the initial annual pole fee shall consist of $1,000 for each city pole which Crown Castle’s facilities are to be installed pursuant to this agreement and is payable to city upon execution and delivery of this agreement and prior to Crown Castle installing any portion of the network or any facilities. The term ends on 9/1/2047 with 3% increase annually. The lease receivable is measured as the present value of the future minimum rent payments expected to be received during the lease term at a discount rate of 3.5%, which was the 5-year US Treasury rate in effect when the lease was entered into. In fiscal year 2022, the City recognized $8,564 of lease revenue and $5,743 of interest revenue under the lease.

Garden Street
On 8/1/2015, the City entered into a lease with Garden Street SLO Partners, L.P for the right to use land formerly a surface parking lot in order to build a hotel. Under the lease, the lessee pays the City $171,600 or the “Base Annual Rent Floor”, which is the amount of Landlord’s annual net revenue from the operation of Parking Lot 2 on the premises in the period of twelve months ended on the last day of the last full calendar month ended two months prior to the rent commencement date. The amount of base rent shall be increased as of the first day of each rent adjustment period commencing with the rent adjustment period that begins on the first day of the third lease year and on the first day of each subsequent rent adjustment period. The lease receivable is measured as the present value of the future minimum rent payments expected to be received during the lease term at a discount rate of 1%, which is the 5- year US Treasury rate in effect when the lease was entered into. In fiscal year 2022, the City recognized $394,729 of lease revenue and $367,683 of interest revenue under the lease.

Governmental activities:

Public safety 531,827 $
Transportation 2,501,557
Culture and recreation 242,933
Community development 111,618
General government 3,214,896
Total depreciation - governmental activities 6,602,831
Business-type activities:

Water 2,863,988
Sewer 3,559,830
Parking 688,790
Transit 375,863
Total depreciation - business-type activities 7,488,471 Total Government-wide $ 14,091,302
68

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 6: Leases (Continued)
Laguana AT&T
On 9/16/2009, the City entered into a lease with New Cingular Wireless PCS, LLC to locate a cellular communication site at the Laguna Lake Golf Course. Under the lease, the lessee pays the City $26,000 annually and thereafter, be multiplied by the CPI Adjuster or 3%, whichever is greater that ends on 9/30/2029. The lease receivable is measured as the present value of the future minimum rent payments expected to be received during the lease term at a discount rate of 2%, which is the 5-year US Treasury rate in effect when the lease was entered into. In fiscal year 2022, the City recognized $40,785 of lease revenue and $5,994 of interest revenue under the lease.

Laguna SBA
On 2/1/2005, the City entered into a lease with SBA 2012 TC Assets, LLC to locate a cellular communication site at the Laguna Lake Golf Course. Under the lease, the lessee pays the City $25,000 annually and thereafter, be multiplied by the CPI Adjuster or 3%, whichever is greater, that ends in 2025. The lease receivable is measured as the present value of the future minimum rent payments expected to be received during the lease term at a discount rate of 3%, which is the 5-year US Treasury rate in effect when the lease was entered into. In fiscal year 2022, the City recognized $45,734 of lease revenue and $3,680 of interest revenue under the lease.

Santa Rosa St
On 5/13/2011, the City entered into a lease with New Cingular Wireless PCS, LLC to locate a cellular communication site at the Santa Rosa Park. Under the lease, the lessee pays the City $26,000 annually and thereafter, be multiplied by the CPI Adjuster or 3%, whichever is greater, that ends on 5/13/2031. The lease receivable is measured as the present value of the future minimum rent payments expected to be received during the lease term at a discount rate of 2%, which is the 5-year US Treasury rate in effect when the lease was entered into. In fiscal year 2022, the City recognized $73,432 of lease revenue and $14,114 of interest revenue under the lease.

The future revenue payments as of June 30, 2022 are as follows:

Year Ending
June 30, Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest 2023 167,582 $ 6,335 $ 1,197 $ 5,717 $ -$ 368,693 $ 31,013 $ 5,392 $ 38,545 $ 2,537$ $ 58,985 $ 12,969 $ 297,322 $ 401,643 2024 102,280 917 1,448 5,682 - 369,703 32,744 4,750 40,968 1,312 62,299 11,806 239,739 394,170 2025 - - 1,698 5,607 - 368,693 34,530 4,047 43,499 4 65,810 10,509 145,537 388,860 2026 - - 1,994 5,537 - 368,693 36,412 3,319 - - 69,426 9,175 107,832 386,724 2027 - - 2,292 5,457 - 368,693 38,354 2,552 - - 73,183 7,768 113,829 384,470 2028-2032 - - 16,544 25,702 - 1,845,484 127,475 2,647 - - 333,279 15,460 477,298 1,889,293 2033-2037 - - 26,937 21,739 - 1,844,474 - - - - - - 26,937 1,866,213 2038-2042 - - 40,470 15,651 - 1,844,474 - - - - - - 40,470 1,860,125 2043-2047 - - 57,878 6,799 - 1,844,474 - - - - - - 57,878 1,851,273 2048-2052 - - 14,070 1 - 1,845,484 - - - - - - 14,070 1,845,485 2053-2057 - - - - - 1,844,474 - - - - - - - 1,844,474
2058-2062 - - - - 161,351 1,842,865 - - - - - - 161,351 1,842,865 2063-2067 - - - - 986,479 1,807,993 - - - - - - 986,479 1,807,993 2068-2072 - - - - 1,353,075 1,748,798 - - - - - - 1,353,075 1,748,798 2073-2077 - - - - 1,732,118 1,669,339 - - - - - - 1,732,118 1,669,339 2078-2082 - - - - 2,161,637 1,569,604 - - - - - - 2,161,637 1,569,604 2083-2087 - - - - 2,695,176 1,445,748 - - - - - - 2,695,176 1,445,748 2088-2092 - - - - 3,248,775 1,295,791 - - - - - - 3,248,775 1,295,791 2093-2097 - - - - 3,869,169 1,113,664 - - - - - - 3,869,169 1,113,664 2098-2102 - - - - 4,634,199 897,046 - - - - - - 4,634,199 897,046 2103-2107 - - - - 5,426,984 643,007 - - - - - - 5,426,984 643,007 2108-2112 - - - - 6,313,092 344,758 - - - - - - 6,313,092 344,758 2113-2115 - - - - 4,287,231 43,275 - - - - - - 4,287,231 43,275 Total 269,862 $ $ 164,528 7,252 $ $ 36,869,286 97,892 $ 27,335,227 $ 300,528 $ $ 22,707 123,012$ 3,853$ 662,982 $ $ 67,687 $ 27,534,618 38,390,198 $ James Town Crown Castle Garden St Laguna ATT Laguna SBA Santa Rosa St Total 69

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 7: Long Term Debt
Summary of Long-Term Debt
The following is a summary of the City's long-term debt transactions for the year ended June 30, 2022:

Compensated absences in the governmental funds are generally liquidated by the General Fund on a pay as you go basis. For detail of estimated claims and liabilities, see Note 11.

The San Luis Obispo Capital Improvement Board (Board) and the San Luis Obispo Public Financing Authority (Authority) have entered into a number of lease agreements with the City of San Luis Obispo wherein the City is obligated to make all debt service payments. The transactions between the Board/Authority have been eliminated from these financial statements.

Balance Balance Due Within
June 30, 2021 Additions Deductions June 30, 2022 One Year Governmental activities:
2012 Lease revenue refunding bonds $ 2,970,000 $ (270,000) - $ $ 2,700,000 $ 285,000 2014 Lease revenue bonds 6,635,000 (175,000) - 6,460,000 185,000 2018 Lease revenue refunding bonds 9,212,575 (553,475) - 8,659,100 569,850 Add: Unamortized bond premium 1,221,204 - (85,448) 1,135,756 - Total revenue bonds 20,038,779 (1,083,923) - 18,954,856 1,039,850 Lease liability 157,527 - (32,524) 125,003 32,257
Lease-purchase financing 734,673 (344,253) - 390,420 354,175 Conservation Loan 232,111 - (92,150) 139,961 93,074
Total long-term debt,
governmental activities $ 21,005,563 $ 157,527 $ (1,552,850) $ 19,610,240 $ 1,519,356 Compensated absences $ 3,016,523 $ 3,121,720 $ (3,033,638) $ 3,104,605 $ 2,111,566 Business-type activities:
2012 Water revenue refunding bonds 1,080,000 (530,000) - 550,000 550,000 2018 Lease revenue refunding bonds 4,852,425 (291,525) - 4,560,900 300,150 2018 Water revenue refunding bonds 8,785,000 (455,000) - 8,330,000 470,000 Add: Unamortized bond premium 2,054,746 (188,468) - 1,866,278 - Total revenue bonds 16,772,171 (1,464,993) - 15,307,178 1,320,150 Loans 56,229,546 44,867,826 (1,178,724) 99,918,648 1,212,201 Installment sale agreements 4,919,407 (662,064) - 4,257,343 681,479 Total long-term debt,
business-type activities 77,921,124 44,867,826 (3,305,781) 119,483,169 3,213,830 Compensated absences 613,247 449,589 (536,725) 526,111 157,833 Total Government-wide $ 102,556,457 $ 48,596,662 $ (8,428,994) $ 142,724,125 $ 7,002,585 70

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 7: Long Term Debt (Continued)
Governmental Activities Summary:

Revenue Bonds
2012 Refunding Lease Revenue Bonds. In 2012, the Board issued refunding lease revenue bonds in the amount of $5,050,000 to refinance the outstanding 2001 lease revenue bonds, Series C. The purpose of these bonds was to purchase property and build athletic fields, purchase property for police station expansion, and purchase Downtown Plan properties. The bonds bear interest from 2.0% to 4.0% and are due in annual installments on December 1 through December 1, 2029 that range from $210,000 to $390,000. At June 30, 2022, the principal amount outstanding on the bonds was $2,700,000. The bond indenture agreement specifies reserve requirements equal to the maximum debt service in any particular year to be held in the Trustee’s reserve funds. The reserve requirement has been met for the year ended June 30, 2022.

In the Statement of Net Position, the 2012 bonds include the related unamortized premium which is being amortized and charged to expense over the term of the 2012 bonds. At June 30, 2022, the unamortized premium was $142,771. 2014 Lease Revenue Bonds. In 2014, the Authority issued lease revenue bonds in the amount of $7,580,000 to finance the expansion of the Los Osos Valley Road interchange at U.S. 101. The bonds bear interest from 3.00% to 4.00% and are due in annual installments on November 1 through November 1, 2044 that range from $145,000 to $410,000. At June 30, 2022, the principal amount outstanding on the bonds was $6,460,000.

In the Statement of Net Position, the 2014 bonds include the related unamortized premium which is being amortized and charged to expense over the term of the 2014 bonds. At June 30, 2022, the unamortized premium was $126,857. 2018 Lease Revenue Refunding Bonds. In 2018, the Authority issued lease revenue bonds in the amount of $16,905,000 to advance refund the outstanding 2005 revenue refunding bonds and the 2006 and 2009 lease revenue bonds, which were originally issued to construct several high priority capital improvement projects and to finance the costs of acquisition and construction of public parking facilities, and the public safety communications and emergency operations center project. Of the original bond issuance, $11,072,775 was used for financing governmental activities related to the original bonds and the remainder was used for business-type activities.

The bonds bear interest from 3.00% to 5.00% and are due in annual installments on June 1, through June 1, 2039 that range from $255,000 to $1,250,000. At June 30, 2022, the principal amount outstanding that pertains to governmental activities was $8,659,100 of the total $13,220,000 outstanding.

In the Statement of Net Position, the 2018 bonds include the related unamortized premium which is being amortized and charged to expense over the term of the 2018 bonds. At June 30, 2022, the unamortized premium for governmental activities was $866,128.

The refunding resulted in a difference of $374,404 between the reacquisition price and the net carrying value of the old debt and is being amortized to expense through 2039. The City completed the refunding to reduce its total debt service payments over the following 21 years by $3,838,338 and to obtain an economic gain of $2,960,278 (difference between the present values of the old and the new debt service payments).

Lease Liability (Cuesta Peak)
On October 23, 2003, the City entered into a 22-year Lease Agreement as lessee of a site for City radio equipment. The City pays the landlord $16,857.96 annually with a 4% increase. An initial lease liability was recorded in the amount of $157,527. As of June 30, 2022, the value of the lease liability is $125,003. The City is required to make monthly payments of $670 and increase annually by 5% in October of each year. The lease has an interest rate of 3.04%. The value of the right to use asset as of June 30, 2022 of $157,527 with accumulated amortization of $37,065 is included in the intangible assets on the capital assets activities table found in Note 5 above.
71

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 7: Long Term Debt (Continued)
At June 30, 2022, the aggregate maturities of the aforementioned governmental activities revenue bonds were as follows:

At June 30, 2022, the aggregate maturities of the aforementioned governmental lease liability was as follows:

Lease-Purchase Financing
Fire Truck. In 2018 the City obtained lease-purchase financing in the amount of $673,095 to purchase a fire truck. The gross amount of assets under this lease is $673,095 with $90,732 accumulated depreciation included in equipment at June 30, 2021. The lease agreement bears an interest rate of 3.178% due in quarterly installments of $36,533 beginning December 5, 2018 through September 5, 2023. At June 30, 2022, the principal amount outstanding is $178,389.

Motorola Radios. In 2020, the City obtained lease-purchase financing in the amount of $636,240 to purchase Motorola radios and equipment for public safety. The gross amount of assets under this lease is $636,240 with $212,080 accumulated depreciation as it was placed in service at year end. The lease agreement bears an interest rate of 2.66% due in annual installments of $217,671 beginning June 1, 2021 through June 1, 2023. At June 30, 2022, the principal amount outstanding was $212,031.

For the Year Ending June 30, Principal Interest Total
2023 1,039,850 $ 715,750 $ 1,754,365 $
2024 1,091,050 674,056 1,755,600
2025 1,133,975 630,214 1,765,106
2026 1,178,450 578,566 1,764,189
2027 1,021,775 524,744 1,546,519
2028-2032 4,992,400 1,941,690 6,934,090
2033-2037 4,144,450 1,008,511 5,152,961
2038-2042 2,032,150 428,645 2,460,795
2043-2045 1,185,000 72,300 1,257,300
$ 6,574,476 17,819,100 $ 24,393,576 $
For the Year Ending June 30, Principal Interest Total
2023 32,257 $ 3,637$ $ 35,894
2024 34,901 2,411 37,312
2025 37,694 1,074 38,768
2026 20,151 2 20,153
$ 125,003 7,124$ 132,127$
72

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 7: Long Term Debt (Continued)
At June 30, 2022, the aggregate maturities of the aforementioned governmental activities lease-purchase financing were as follows:
2014 Energy Sources Conservation State Loan
In 2014, the City obtained a note in the amount of $850,775 for the purchase of streetlights. The note bears an interest rate of 1% due in semi-annual installments on December 22 and June 22 through December 22, 2023 in the amount of $92,242. At June 30, 2022, the principal amount outstanding is $139,961.

At June 30, 2022, the aggregate maturities of the aforementioned governmental activities conservation loan is as follows:

Business-Type Activities Summary:

Revenue Bonds
2012 Water Revenue Refunding Bonds. In 2012, the City issued water revenue refunding bonds in the amount of $4,960,000 to refund the 2002 water revenue bonds, which were originally issued to fund water system improvements. The bonds bear interest from 2.0% to 4.0% and are due in annual installments on June 1 through June 1, 2023 that range from $340,000 to $550,000. At June 30, 2022, the principal amount outstanding on the bonds was $550,000. The bond indenture agreement specifies reserve requirements equal to the maximum debt service in any particular year to be held in the Trustee’s reserve funds. The reserve requirement has been met for the year ended June 30, 2022.

In the Statement of Net Position, the 2012 bonds include the related unamortized premium which is being amortized and charged to expense over the term of the 2012 bonds. At June 30, 2022, the unamortized premium was $96,234.

The City has pledged future water system revenues, net of specific operating expenses, to repay the bonds on parity with a pledge that services all parity obligations. The bonds are payable solely from water customer net revenues and any moneys in the bond service fund and the reserve fund. For the year ended June 30, 2022, principal and interest paid, and total customer net revenues were $573,200 and $6,723,041, respectively.

For the Year Ending June 30, Principal Interest Total
2023 354,175 $ 3,986 $ 358,161 $
2024 36,245 289 36,534
$ 4,275 390,420 $ 394,695 $
For the Year Ending June 30, Principal Interest Total
2023 93,074 $ 1,168 $ 94,242 $
2024 46,887 235 47,122
$ 1,403 139,961 $ 141,364 $
73

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 7: Long Term Debt (Continued)
2018 Lease Revenue Refunding Bonds. In 2018, the Authority issued lease revenue bonds in the amount of $16,905,000 to advance refund the outstanding 2005 revenue refunding bonds and the 2006 and 2009 lease revenue bonds, which were originally issued to construct several high priority capital improvement projects and to finance the costs of acquisition and construction of public parking facilities, and the public safety communications and emergency operations center project. Of the original bond issuance, $5,832,225 was used for financing business-type activities related to the original bonds and the remainder was used for governmental activities.

The bonds bear interest from 3.00% to 5.00% and are due in annual installments on June 1, through June 1, 2039 that range from $255,000 to $1,250,000. At June 30, 2022, the principal amount outstanding that pertains to business-type activities was $4,560,900 of the total $13,220,000 outstanding.

In the Statement of Net Position, the 2018 bonds include the related unamortized premium which is being amortized and charged to expense over the term of the 2018 bonds. At June 30, 2022, the unamortized premium that pertains to business-type activities was $458,944.

The refunding resulted in a difference of $374,404 between the reacquisition price and the net carrying value of the old debt and is being amortized to expense through 2039. The City completed the refunding to reduce its total debt service payments over the next 21 years by $3,838,338 and to obtain an economic gain of $2,960,278 (difference between the present values of the old and the new debt service payments).
2018 Water Revenue Refunding Bonds. In 2018, the City issued water revenue refunding bonds the in the amount of $10,095,000 to refund the 2006 water revenue bonds, which were originally issued to fund improvements to the water treatment plant. The bonds bear interest from 4% to 5% and are due in annual installments on June 1 through June 1, 2035 that range from $455,000 to $845,000.

At June 30, 2022, the principal amount outstanding on the bonds was $8,330,000.

The City has pledged future water system revenues, net of specific operating expenses, to repay the bonds on parity with a pledge that services all parity obligations. The bonds are payable solely from water customer net revenues and any moneys in the bond service fund and the reserve fund. For the year ended June 30, 2022, principal and interest paid, and total customer net revenues were $889,700 and $6,723,041, respectively. In the Statement of Net Position, the bonds include the related unamortized premium which is being amortized and charged to expense over the term of the bonds. At June 30, 2022, the unamortized premium was $1,311,100.

At June 30, 2022, the aggregate maturities of the business-type revenue bonds were as follows:

For the Year Ending June 30, Principal Interest Total
2023 1,320,150 $ 633,238 $ 1,953,388
2024 808,950 575,732 1,384,682
2025 846,025 538,424 1,384,449
2026 886,550 496,122 1,382,672
2027 813,225 451,794 1,265,019
2028-2032 4,737,600 1,604,980 6,342,580
2033-2037 3,845,550 406,180 4,251,730
2038-2039 182,850 9,542 192,392
$ 13,440,900 $ 4,716,012 $ 18,156,912
74

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 7: Long Term Debt (Continued)
Loans
2001 CIEDB State Loan. In 2001, the City obtained a note in the amount of $7,765,900 to go towards expanding the Marsh Street parking structure. The note bears an interest rate of 3.37% due in semi-annual installments on February 1 and August 1 through August 31, 2031 that range from $169,000 to $396,000. At June 30, 2022, the principal amount outstanding on the loan was $3,470,379.
2009 Infrastructure and Economic Development Bank Loan– Tank Farm Lift Station. In 2009, the City obtained a note in the amount of $10,000,000 to go towards the Tank Farm lift station and main sewer project. The note bears an interest rate of 3.25% due in annual installments on December 1 through December 1, 2037 that range from $212,600 to $520,744. At June 30, 2022, the principal amount outstanding on the loan was $6,626,416.

The City has pledged future sewer system revenues, net of specific operating expenses, to repay the loan. The loan is payable solely from sewer customer net revenues. For the year ended June 30, 2022, principal and interest paid, and total customer net revenues were $532,596 and $10,304,284, respectively.
2018 Clean Water State Revolving Fund Loan. In 2018, the City Council approved the Clean Water State Revolving Fund loan agreement between the City of San Luis Obispo and the California State Water Resources Control Board for a $140 million loan for the Water Resource Recovery Facility Project. The City will receive $4 million in principal forgiveness and the remaining $136 million will be repaid over 30 years. The applicable interest rate was set at 1.8%. As of June 30, 2022, the City had partially drawn down the loan and had an outstanding principal balance of $77,650,275. 2020 CIEDB State Loan. In 2020, the City obtained a note in the amount of $14,300,000 for improvements to the City’s Water Treatment Plant to provide enhanced reliability and energy and operational efficiencies. The note bears an interest rate of 2.5% and a term of 20 years. At June 30, 2022, the City had partially drawn down the loan and had an outstanding principal balance of $12,171,578.

At June 30, 2022, the aggregate maturities of the aforementioned business-type loans were as follows:

For the Year Ending June 30, Principal Interest Total
2023 $ 1,212,201 $ 641,190 $ 1,853,391
2024 3,211,641 1,967,763 5,179,404
2025 3,280,590 1,895,817 5,176,407
2026 3,352,693 1,822,214 5,174,907
2027 3,426,480 1,746,888 5,173,368
2028-2032 18,301,173 7,541,107 25,842,280
2033-2037 18,253,321 5,414,014 23,667,335
2038-2042 16,310,457 3,624,403 19,934,860
2043-2047 14,615,022 2,236,669 16,851,691
2048-2052 17,955,069 2,270,809 20,225,879
$ 99,918,648 $ 29,160,874 $ 129,079,522
75

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 7: Long Term Debt (Continued)
Installment Sale Agreements
2008 Suntrust Bond. In 2008, the Board entered into an installment sale contract financing $2,050,000 to finance the Tank Farm lift station. The terms state an interest rate of 4.2% due in annual installments through 2023 that range from $372,900 to $607,200. At June 30, 2022, the principal amount outstanding on the loan was $350,000.

US Bancorp 2014 Wastewater Lease. In 2013, the Board entered into an installment sale contract financing $7,479,000 to finance the acquisition and installation of improvements to its water reclamation facility. The note bears an interest rate of 2.8994% due in annual installments on June 1 and December 1 through December 1, 2028 that range from $372,900 to $607,200. At June 30, 2022, the principal amount outstanding on the loan was $3,907,343.

At June 30, 2022, the aggregate maturities of the aforementioned business-type installment sale agreements were as follows:

There are a number of limitations and restrictions contained in the various bond indentures. City management believes that the City has complied with the indenture requirements. Security for revenue bonds is paid from receipts or net income and amounts in funds or accounts established under bond indentures.

Note 8: Pension Plans
The City contributes to the California Public Employees’ Retirement System (CalPERS) for its employees. The City participates in one agent multiple-employer plan for its miscellaneous employees (Miscellaneous Plan) and one cost-sharing multiple-employer plan for its safety employees (Safety Plan). The Miscellaneous Plan is described in the first section of the footnote under AgentMultiple Employer Plan and the Safety Plan follows and is described in the second section of the footnote under Cost-Sharing Employer Plan. A summary of the government-wide balances for all Plans at June 30, 2022 are as follows:

For the Year Ending June 30, Principal Interest Total
2023 $ 681,479 $ 117,026 $ 798,505
2024 706,312 94,628 800,940
2025 541,575 75,364 616,939
2026 557,280 59,431 616,711
2027 573,441 43,035 616,476
2028-2029 1,197,256 34,968 1,232,224
$ 4,257,343 $ 424,452 $ 4,681,795
Net Pension Deferred Outflows Deferred Inflows Pension
Liability of Resources of Resources Expense
Miscellaneous Plan 65,993,658 $ 16,642,794 $ 16,789,383 $ 4,429,353 $ Safety Plan 58,571,330 23,386,580 37,916,886 22,198,982 Total Government-Wide $ 40,029,374 124,564,988 $ 54,706,269 $ 26,628,335 $ 76

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 8: Pension Plans (Continued)
Agent-Multiple Employer Plan
General Information about the Pension Plan
Plan Descriptions. As noted above, the City contributes to CalPERS for a defined benefit pension plan for all qualified permanent and probationary employees. CalPERS acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

Benefits Provided. CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment for Tier 1 employees. Tier 2 and PEPRA employees are based on a three-year average of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for the plan are applied as specified by the Public Employees’ Retirement Law.

The Miscellaneous Plan’s provisions and benefits by tier in effect at June 30, 2022, are summarized as follows:

While the City's Miscellaneous Plan is not closed to new entrants, the component option of 2.7% @ 55 is closed to new entrants.

Classic Members as defined by CalPERS entering the City's Miscellaneous Plan would enter the 2% @ 60 option while New Members as defined by CalPERS entering the City Miscellaneous Plan would enter the 2% @ 62 option.

Prior to On or after On or after
Hire date December 6, 2012 December 6, 2012 January 1, 2013 Benefit formula 2.7% @ 55 2% @ 60 2% @ 62
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 - 55 50 - 63 52 - 67
Monthly benefits, as a % of
eligible compensation 2.0% to 2.7% 1.092% to 2.418% 1.0% to 2.5% Required employee contribution rates 7.520% 7.520% 7.00% Required employer contribution rates 9.950% 9.950% 9.950% Required unfunded accrued liability payment - (1) - (1) $ 6,819,439 (1) -Combined with on or after January 1, 2013
Tiers within the Miscellaneous Plan
77

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 8: Pension Plans (Continued)
Employees Covered. As of the measurement date June 30, 2021, the following employees were covered by the benefit terms for the Miscellaneous Plan:

Contributions. Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on July 1 following notice of a change in the rate. Funding contributions for the Plan are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employees that are classified as unrepresented management or unrepresented confidential contribute 1.5% of pay toward the cost of the City’s share of the annual required contribution. During the measurement period, the City contributions totaled $8,246,755.

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.

Actuarial Assumptions. The total pension liability in the June 30, 2020 actuarial valuation was determined using the following actuarial assumptions:

Miscellaneous Plan
Inactive employees or beneficiaries
currently receiving benefits 418
Inactive employees entitled to but
not yet receiving benefits 422
Active employees 319
Total 1,159
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:

Discount Rate
Inflation
Salary Increase
Mortality (1)
Post Retirement Benefit Increase

7.15%
Entry-Age Normal Cost Method
June 30, 2021
Miscellaneous Plan
June 30, 2020
(1) The mortatily table used was developed based on CalPERS-specific data. The table includes 15 years of mortality improvements using the Society of Actuaries Scale 90% of scale MP 2016. For more details on this table, please refer to the December 2017 experience study report (based on CalPERS demographic data from 1997 to 2015) that can be found on the CalPERS website.

Contract COLA up to 2.50% until Purchasing Power Protection Allowance Floor on Purchasing Power applies, 2.50% thereafter Derived using CalPERS' Membership Data for all Funds
Varies by Entry Age and Service

2.50%
78

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 8: Pension Plans (Continued)
Discount Rate. The discount rate used to measure the total pension liability was 7.15% for the Plan. To determine whether the municipal bond rate should be used in the calculation of a discount rate for each plan, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing, none of the tested plans run out of assets. Therefore, the current 7.15% discount rate is adequate, and the use of the municipal bond rate calculation is not necessary. The long-term expected discount rate of 7.15% will be applied to all plans in the Public Employees Retirement Fund (PERF). The cash flows used in the testing were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. The stress test results are presented in a detailed report called “GASB Crossover Testing Report” that can be obtained from the CalPERS website.

The long-term expected rate of return on pension plan investments was determined using a building-block method in which bestestimate 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 considered both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.

The table below reflects the long-term expected real rate of return by asset class.

Assumed
Asset Real Return Real Return
Asset Class (a) Allocation Years 1 - 10 (b) Years 11+ (c) Global Equity 50.0% 4.80% 5.98%
Fixed Income 28.0% 1.00% 2.62%
Inflation Assets - 0.77% 1.81%
Private Equity 8.0% 6.30% 7.23%
Real Assets 13.0% 3.75% 4.93%
Liquidity 1.0% - -0.92%
(a) In the CalPERS's ACFR, Fixed Income is included in Global Debt Securities; Liquidity is included in Shortterm 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 Miscellaneous Plan
79

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 8: Pension Plans (Continued)
Changes in the Net Pension Liability
The changes in the Net Pension Liability for the Miscellaneous Plan follows:

Sensitivity of the Net Pension Liability to Changes in the Discount Rate. The following presents the net pension liability of the City for the Plan, calculated using the discount rate for each Plan, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:

Pension Plan Fiduciary Net Position. Detailed information about the pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

Plan Net
Total Fiduciary Pension
Pension Net Liability/
Liability Position (Asset)
Balance at June 30, 2020 $ 237,568,349 $ 148,289,275 $ 89,279,074 Changes during the year:

Service cost 3,939,785 - 3,939,785
Interest on the total pension liability 16,589,680 - 16,589,680 Differences between expected and
actual experience (755,414) - (755,414)
Contribution - employer - 8,246,755 (8,246,755)
Contribution - employee - 2,056,274 (2,056,274)
Net investment income - 32,904,570 (32,904,570)
Benefit payments, including refunds
of employee contributions (13,518,666) (13,518,666) -
Administrative expense - (148,132) 148,132
Net changes 6,255,385 29,540,801 (23,285,416)
Balance at June 30, 2021 $ 243,823,734 $ 177,830,076 $ 65,993,658 Miscellaneous Plan
1% Decrease 6.15%
Net Pension Liability 96, $ 151,600
Current Discount Rate 7.15%
Net Pension Liability 65, $ 993,658
1% Increase 8.15%
Net Pension Liability 40, $ 892,112
80

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 8: Pension Plans (Continued)
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2022, the City’s pension expense for the Miscellaneous Plan was $4,429,353. At June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

The deferred outflows of resources related to contributions subsequent to the measurement date of $15,923,929 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 pensions will be recognized as pension expense as follows:

Payable to the Pension Plan
At June 30, 2022, the City reported a payable of $0 for the outstanding amount of contributions to the pension plan required for the year ended June 30, 2022.

Cost-Sharing Employer Plan
General Information about the Pension Plan
Plan Descriptions. As noted above, the City contributes to CalPERS for a defined benefit pension plan for all qualified permanent and probationary employees. CalPERS acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to
measurement date 15,923,929 $ - $
Changes in assumptions
Differences between expected and
actual experiences 718,865 (511,732)
Net differences between projected and
actual earnings on plan investments - (16,277,651)
Total $ (16,789,383) 16,642,794 $
Miscellaneous Plan
Measurement Period
Ended June 30 Amount
2022 (3,649,106) $
2023 (4,018,154)
2024 (3,915,060)
2025 (4,488,198)
$ (16,070,518)
Miscellaneous Plan
81

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 8: Pension Plans (Continued)
The City participates in five tiers of the safety cost-sharing multiple-employer plan. The Safety Plan tiers consist of Safety Tier 1 (police and fire), Police Tier 2, Fire Tier 2, Police PEPRA and Fire PEPRA.

Benefits Provided. CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits.

All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: The Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost-of-living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

The Plan’s provisions and benefits within each tier in effect at June 30, 2022, are summarized as follows:

The Safety Tier 1 is closed to new entrants.

Police Fire Police Fire
Prior to Prior to On or after On or after
Hire date December 6, 2012 August 30, 2012 December 6, 2012 August 30, 2012 Benefit formula 3.0% @ 50 3.0% @ 50 2.0% @ 50 3.0% @ 55 Benefit vesting schedule 5 years service 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life monthly for life Retirement age 50 - 55 50 - 55 50-55 50 - 55
Monthly benefits, as a % of eligible compensation 3.00% 3.00% 2.0% to 2.7% 2.4% to 3% Required employee contribution rates 8.990% 8.990% 8.950% 8.990% Required employer contribution rates 25.590% 25.590% 19.880% 22.470% Required unfunded accrued liability payment $ 6,029,105 $ - (1) $ 33,223 16,086 $ Police PEPRA Fire PEPRA
On or after On or after
Hire date January 1, 2013 January 1, 2013
Benefit formula 2.7% @ 57 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50-57 50-57
Monthly benefits, as a % of eligible compensation 2.0% to 2.7% 2.0% to 2.7% Required employee contribution rates 13.750% 13.750%
Required employer contribution rates 13.980% 13.980%
Required unfunded accrued liability payment $ 31,825 $ 3,197 (1) - Combined with Police Tier 1
Safety Tier 1 Safety Tier 2
82

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 8: Pension Plans (Continued)
Contributions. Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on July 1st following notice of a change in the rate. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30th by CalPERS.

The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Members of the Police Officers Association contribute 3% of pay toward the cost of the City's share of the annual required contribution. Members of the International Association of Firefighters, Local 3523 contribute 1.5% of pay toward the cost of the City’s share of the annual required contribution.

For the year ended June 30, 2022, the contributions recognized as part of pension expense were $8,069,806.

Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2022, the City reported a net pension liability for its proportionate share of the Plan’s net pension liability of $58,571,330.

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, and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 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 plans relative to the projected contributions of all participating employers, actuarially determined. The City’s proportionate share of the net pension liability as of the measurement dates of June 30, 2020 and 2021 was as follows:

For the year ended June 30, 2022, the City recognized pension expense of $22,198,982 for the Safety Plan. At June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Proportionate Share
Percentage share at 6/30/2020 0.72250%
Percentage share at 6/30/2021 1.08299%
Change - Increase/(Decrease) 0.36049%
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 12,756,585 $ - $ Changes in assumptions -
Differences between expected and actual experiences 10,006,862 Differences between projected and actual investment -
earnings - 34,861,200
Net Difference between employer's contributions and
proprtionate chare of contributions 604,494 729,122
Change in employer's proportion 18,639 2,326,564
Total $ 37,916,886 23,386,580 $
Safety Plan
83

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 8: Pension Plans (Continued)
Pension contributions subsequent to the measurement date of $12,756,585 are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ended June 30, 2023. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Actuarial Assumptions. The total pension liabilities in the June 30, 2020 actuarial valuations for the Safety Plan was determined using the following actuarial assumptions:

Discount Rate. The discount rate used to measure the total pension liability was 7.15% for the Plan. To determine whether the municipal bond rate should be used in the calculation of a discount rate for the Plan, CalPERS stress-tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based in the testing, none of the tested plans run out of assets. Therefore, the current 7.15 percent discount rate is adequate, and the use of the municipal bond rate calculation is not necessary. The long-term expected discount rate of 7.15 percent will be applied to all plans in the Public Employees Retirement Fund (PERF). The stress test results are presented in a detailed report that can be obtained from the CalPERS website.

The long-term expected rate of return on pension plan investments was determined using a building-block method in which bestestimate 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.

Measurement Period
Ended June 30 Amount
2023 (4,365,560) $
2024 (5,682,875)
2025 (7,645,141)
2026 (9,593,315)
$ (27,286,891)
Safety Plan
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:

Discount Rate
Inflation
Salary Increases
Post Retirement Benefit Increase
Mortality (1)
Varies by Entry Age and Service
Contract COLA up to 2.50% until Purchasing Power
Protection Allowance Floor on Purchasing Power applies
Derived using CalPERS' membership data for all funds
(1) The mortatily table used was developed based on CalPERS-specific data. The table includes 15 years of mortality improvements using the Society of Actuaries Scale 90% of scale MP 2016. For more details on this table, please refer to the December 2017 experience study report (based on CalPERS demographic data from 1997 to 2015) that can be found on the CalPERS website.

7.15%

2.50%
Safety Plan
June 30, 2020
June 30, 2021
Entry-Age Normal Cost Method
84

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 8: Pension Plans (Continued)
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund (PERF) cash flows. Taking into account historical returns of all the Public Employees Retirement Funds’ asset classes (which includes the agent plan and two cost-sharing plans or PERF A, B, and C funds), expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11-60 years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each PERF fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of one percent.

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.

Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate. The following presents the City’s proportionate share of the net pension liability, calculated using the discount rate for the Plans as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:

Assumed
Asset Real Return Real Return
Asset Class (a) Allocation Years 1 - 10 (b) Years 11+ (c) Global Equity 50.0% 4.80% 5.98%
Fixed Income 28.0% 1.00% 2.62%
Inflation Assets - 0.77% 1.81%
Private Equity 8.0% 6.30% 7.23%
Real Assets 13.0% 3.75% 4.93%
Liquidity 1.0% - -0.92%
(a) In the CalPERS's ACFR, Fixed Income is included in Global Debt Securities; Liquidity is included in Shortterm 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 Safety Plan
1% Decrease 6.15%
Net Pension Liability $ 88,201,347
Current Discount Rate 7.15%
Net Pension Liability $ 58,571,330
1% Increase 8.15%
Net Pension Liability $ 34,233,930
85

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 8: Pension Plans (Continued)
Pension Plan Fiduciary Net Position. Detailed information about each safety plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

Payable to the Pension Plan
At June 30, 2022, the City reported a payable of $0 for the outstanding amount of contributions to the pension plan required for the year ended June 30, 2022
Defined Contribution Pension Plan
The City makes bi-weekly contributions to a 401a retirement plan (Plan) for each department head. The current contribution on behalf of each Participant equals 1% of base earnings up to the maximum allowable by law. In addition, each Participant may contribute up to 14% of earnings to the Plan. Prior to August 2018, non-department head management employees also participated in the Plan and received a 1% employer contribution.

Employees are fully vested in the City’s contributions (and interest allocated to the employee’s account) at all times. The Plan is administered by Public Agency Retirement Services (PARS). The Plan assets are held in trust for the exclusive benefit of the Participants or their Beneficiaries. The City has the right at any time to terminate the Plan by resolution of the City Council.

During the fiscal year, the City contributed $18,542 to the Plan and Participants contributed $118,507. There were no Plan forfeitures. As of June 30, 2022, the City had $5,337 payable to the Plan.

The City makes bi-weekly contributions to 401a retirement plans (Appointed Officials Plans) for the City Manager and City Attorney.

Employees are fully vested in the City’s contributions (and interest allocated to the employee’s account) at all times. The Appointed Officials Plans are administered by Mission Square Retirement. The Plan assets are held in trust for the exclusive benefit of the Participants or their Beneficiaries. The City has the right at any time to terminate the Plan by resolution of the City Council.

During the fiscal year, the City contributed $25,372 to the Appointed Officials Plans. There were no Plan forfeitures. As of June 30, 2022, the City had $1,039 payable to the Plan.

In the year 2022, The City evaluated the requirements of GASB Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans and determined that plan didn’t meet the criteria to be reported as a fiduciary activity, as required by the above mentioned GASB Statements. 86

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 9: Other Post-Employment Benefits (OPEB)
General Information about OPEB
Plan Description. The City’s primary other post-employment benefits (OPEB) cost obligation is for retiree health benefits under its election to participate in the CalPERS Health Benefit Program, an agent multiple-employer defined benefit OPEB plan, under the “unequal contribution option.” The City entered the CalPERS medical insurance program in 1993 under the Public Employees’ Medical and Hospital Care Act (PEMHCA). During the fiscal year ended June 30, 2009, the City entered into an agreement to participate in an irrevocable trust to provide a funding mechanism for retiree health benefits. The Trust, California Employers’ Retiree Benefit Trust (CERBT), is administered by CalPERS and managed by a separately appointed board, which is not under control of the City Council. This Trust is not considered a component unit of the City.

Benefits Provided. The City provides post-employment heath care insurance, in accordance with Memorandums of Understanding, to all employees who retire from the City upon or after attaining age 50 with at least 5 years of service or disability retirement.

Miscellaneous retires who are PEPRA new hires are eligible at age 52. For each retiree enrolled in a CalPERS medical plan, the employer will pay the required statutory PEMHCA minimum, which is $143 per month per retiree in calendar year 2021 and $149 per month per retiree in calendar year 2022. This amount will increase with the health care component of CPI, as announced by the CalPERS Board each year. The retiree must pay the difference between the premium amount, which depends upon the medical plan benefits selected, and the employer-paid minimum. In addition, the City pays 50% of the premium up to the retiree’s age of 65 for one grandfathered executive management retiree hired prior to August 2000.

There is no OPEB provided to terminated vested employees. The employer-paid amount will continue to a surviving spouse if the retiree elects a CalPERS survivor annuity. There are no required employee contributions, although the retiree must pay the difference between the premium and the employer-paid amount. The employer is contributing the full Actuarially Determined Contribution.

Employees Covered. At June 30, 2021, the measurement date, the following number of employees were covered by the benefit terms:

Contributions. The contribution requirements of the plan members and the City are established and may be amended by the City.

The City prefunds the plan through CERBT by contributing at least 100% of the annual required contribution. For the measurement period, the City’s contributions totaled $921,000.

Net OPEB Liability
The City’s net OPEB liability for the Plan is measured as the total OPEB liability less the Plan’s fiduciary net position. The net OPEB liability of the Plan is measured as of June 30, 2021 using an actuarial valuation as of June 30, 2021. The principal assumptions and methods used to determine the net liability are described below.

OPEB Plan
Inactive employees or beneficiaries
currently receiving benefits 196
Inactive employees entitled to but
not yet receiving benefit payments 211
Active employees 418
Total 825
87

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 9: Other Post-Employment Benefits (OPEB) (Continued) Change in Assumptions. See the note below for the change in assumptions for the measurement date June 30, 2021.

Discount Rate. The discount rate used to measure the total OPEB liability was 6.25% for the Plan. To determine whether the municipal bond rate should be used in the calculation of a discount rate for the Plan, the actuary performed a stress-test on the Plan that would most likely result in a discount rate that would be different from the actuarially-assumed discount rate. Based on the test, the Plan will not run out of assets. Therefore, the current 6.25% discount rate is adequate, and the use of the municipal bond rate calculation is not necessary. The long term expected discount rate of 6.25% is applied to the Plan. The stress-test results are presented in the detailed actuarial report, which can be obtained from the City.

Investments. The following table reflects the long-term expected real rate of return of the Plan’s investments by asset class. The rates of return are presented as geometric means developed over a twenty year period. These rates of return are net of administrative expenses.

Actuarial Valuation Date June 30, 2021
Measurement Date June 30, 2021
Contribution Policy Contributes full ADC
Actuarial Assumptions:

Discount Rate and 6.25% at June 30, 2021 and 6.75% at June 30, 2020 expected Long-Term Rate of Expected City contributions projected to keep Return on Assets sufficient plan assets to pay all benefits from trust General Inflation 2.50% annually
Mortality, Retirement, Disability, Rates from CalPERS 2000-2019 Experience Study Termination
Mortality Improvement Post-retirement mortality projected fully generational with Society of Actuaries Scale MP-2021
Salary Increases Aggregate - 2.75%
Merit - CalPERS 2000-2019 Experience Study
Medical Trend Non-Medicare - 6.5% for 2023, decreasing to an ultimate rate of 3.75% in 2076 and later years.

Medicare - 5.65% (non-Kaiser) for 2023, decreasing to an ultimate rate of 3.75% in 2076 and later years
Participation at Retirement Currently covered: 70% Currently waived: 15% Current Expected
Target Real Rate
Asset Class Allocation * of Return
Global Equity 59.0% 4.56%
Fixed Income 25.0% 0.78%
TIPS 5.0% -0.08%
Commodities 3.0% 1.22%
REITs 8.0% 4.06%
Assumed Long-Term Rate of Inflation 2.50%
Expected Long-Term Net Rate of Return, Rounded 6.25%
The long-term expected real rates of return are presented as geometric means. *Policy target effective October 1, 2018
OPEB Plan
88

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 9: Other Post-Employment Benefits (OPEB) (Continued) Changes in the Net OPEB Liability
The changes in the net OPEB liability for the June 30, 2021 measurement date are as follows:

Sensitivity of Net OPEB Liability to Changes in the Discount Rate. The following presents the net OPEB liability at the current discount rate, as well as what the net OPEB liability would be if it were calculated using a hypothetical discount rate that is one percentage point lower or one percentage point higher than the current rate.

Total Plan Fiduciary Net
OPEB Liability Net Position OPEB Liability
Balance at June 30, 2020 $ 12,766,729 $ 7,991,098 $ 4,775,631 Changes during the year:

Service cost 423,364 - 423,364
Interest on the total OPEB liability 867,422 - 867,422
Changes in assumptions 507,115 - 507,115
Differences between Expected and
actual experience 349,893 - 349,893
Net plan to plan resource movement - - -
Contribution - employer - 921,000 (921,000)
Contribution - employee - - -
Net investment income - 2,196,724 (2,196,724)
Benefit payments, including refunds
of employee contributions (678,789) (678,789) -
Administrative expense - (7,235) 7,235
Net changes 1,469,005 2,431,700 (962,695)
Balance at June 30, 2021 $ 14,235,734 $ 10,422,798 $ 3,812,936 OPEB Plan
1% Decrease 5.25%
Net OPEB Liability $ 5,684,195
Current Discount Rate 6.25%
Net OPEB Liability $ 3,812,936
1% Increase 7.25%
Net OPEB Liability $ 2,264,616
89

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 9: Other Post-Employment Benefits (OPEB) (Continued) Sensitivity of Net OPEB Liability to Changes in Healthcare Cost Trend Rates. The following presents the net OPEB liability at current healthcare cost trend rates, as well as what the net OPEB liability would be if it were calculated using hypothetical healthcare cost trend rates that are one percentage point lower or one percentage point higher than the current rate.

OPEB Plan Fiduciary Net Position. Detailed information about the OPEB Plan’s fiduciary net position is available in the separately issued CalPERS financial reports on the CERBT.

OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the year ended June 30, 2022, the City’s OPEB expense was $251,416. At June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

OPEB contributions subsequent to the measurement date of $1,309,367 are reported as deferred outflows of resources and will be recognized as a reduction of the net OPEB liability in the year ended June 30, 2023. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as OPEB expense as follows:

OPEB Plan
1% Decrease
Net OPEB Liability $ 2,093,874
Current Trend
Net OPEB Liability $ 3,812,936
1% Increase
Net OPEB Liability $ 5,934,516
Deferred Outflows Deferred Inflows
of Resources of Resources
OPEB contributions subsequent to
measurement date 1,309,367 $ $ -
Changes in assumptions 461,316 153,802
Differences between expected and
actual experiences 308,729 1,322,804
Net differences between projected and
actual earnings on plan investments - 1,193,214
Total $ 2,079,412 $ 2,669,820
Fiscal Year
Ended June 30 Amount
2023 (469,827) $
2024 (455,829)
2025 (463,180)
2026 (507,190)
2027 (175,703)
Thereafter 171,954
$ (1,899,775)
90

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 9: Other Post-Employment Benefits (OPEB) (Continued) Payable to the OPEB Plan
At June 30, 2022, the City reported a payable of $0 for the outstanding amount of contributions to the OPEB plan required for the year ended June 30, 2022.

Note 10: Deferred Compensation Plan
All employees of the City are eligible to participate in a City sponsored deferred compensation plan (457 Plan). The 457 Plan provides for the deferral of a portion of the employees’ compensation until retirement, termination, or certain other covered events.

The assets of the 457 Plan are held in trust for the exclusive benefit of Plan Participants or Beneficiaries.

Deferred contribution(s) by a participant in any taxable year will not exceed the lessor of (1) the applicable dollar amount provided under Section 457(b)(2) of the Internal Revenue Code (adjusted for cost of living under Section 457(e)(15) of the Internal Revenue Code), or (2) 100% of the participant’s includible compensation. A participant who has attained age 50 before the close of the calendar year may elect Age 50 Plus Catch-up Contributions and commence making such contributions to his/her Participant Deferral Account.

The City has the right at any time to terminate the 457 Plan by resolution of the City Council.

In the year 2022, The City evaluated the requirements of GASB Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans and determined that plan didn’t meet the criteria to be reported as a fiduciary activity, as required by the above mentioned GASB Statements.

Note 11: Interfund Transactions
There is no interfund receivable and payable balances as of June 30, 2022.

Interfund transfers for the year ended June 30, 2022 consist of the following:

Interfund receivables and payables include temporary negative cash balances that result from the timing of cash flows at year end and the time lag between the dates that transactions are recorded in the accounting system and payment between funds are made.

Liquidation of interfund receivables and payables typically occurs in the first quarter of the subsequent fiscal year. Interfund balances between governmental funds are not included in the government-wide Statement of Net Position.

Interfund transfers are used to move revenues from the fund with collection authorization to the debt service fund as debt service principal and interest payments become due or to move unrestricted revenues to finance various programs that the government must account for in other funds in accordance with budgetary authorizations. This may include amounts provided as matching funds for various grant programs.

Non-Major
General Capital Outlay Governmental
Transfer Out Fund Fund Funds Total
General Fund - $ 21,621,221 $ 8,795,528 $ 30,416,749 $
Capital Outlay Fund 497,600 - 146,667 644,267
Non-Major Governmental Fund 1,759,334 476,970 290,645 2,526,949 Water Fund 794,769 - - 794,769
Sewer Fund 655,312 - - 655,312
Parking Fund 235,233 - - 235,233
Total $ 22,098,191 3,942,248 $ 9,232,840 $ 35,273,279 $ Transfer In
91

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 12: Joint Ventures, Jointly Governed Organizations and Operating Agreements The City participates in three multi-governmental organizations: the Whale Rock Commission, the San Luis Obispo Regional Transit Authority, and the San Luis Obispo Council of Governments. The City also has an operating agreement related to Nacimiento Water Supply Project. The following provides a general description of each of these agencies and operating agreements along with a summary of financial information and indebtedness:

Whale Rock Commission
General Description. The Whale Rock Commission (Commission) was established on December 12, 1960 to govern the operations of the Whale Rock Reservoir. The Commission is composed of six voting members and two non-voting members: three voting members are appointed by the City; one is appointed by California Polytechnic State University; one by California Men's Colony; and one by the Director of Finance, State of California. The two non-voting members are position appointments: the Director of Water Resources, State of California; and the Water Superintendent, City of San Luis Obispo. The Commission is authorized by its respective agencies to establish policies for the operation of the Reservoir, to contract for the sale of excess water, and to approve the annual budget.

The City, in accordance with established policies of the Commission, operates and maintains the Reservoir; prepares and recommends the annual budget; and maintains the fiscal records and funds of the Commission. The Whale Rock Custodial Fund is used to account for the Commission's ongoing operating activities. Ownership in the Reservoir is as follows: 55.05%, City of San Luis Obispo; 33.71%, California Polytechnic State University; and 11.24%, California Men's Colony. The City's share of the Commission's expenses is recorded as expenses of the Water Fund. All receipts and disbursements of the Commission are included in an Custodial Fund.

Financial Information and Indebtedness. In 1959, the City issued general obligation bonds to secure a future water supply to City residents. Some of the proceeds from the bonds were used to participate with the State of California in the development of the Reservoir. Participation, which is in proportion to the original investment, includes continued operation and maintenance of the facilities. Such indebtedness was directly attributable to provision of water service, and as such, all related indebtedness was recorded in the City's Water Enterprise Fund. These bonds matured in August 1999.

The City's original investment in the Reservoir project aggregates $3,900,000 and was amortized on a straight-line basis over thirtyfive years. Separate financial statements are available from the Whale Rock Commission, 879 Morro Street, San Luis Obispo, CA 93401.

The following segment financial information for the Whale Rock Commission and the Water Fund’s related investment in the joint venture is presented as of and for the year ended June 30, 2022:

City's Investment
Joint Venture in Joint Venture
Total assets $ 5,258,221 $ 2,894,651
Total liabilities 114,839 63,219
Fund balance $ 5,143,382 $ 2,831,432
Total revenues $ 2,394,659 $ 1,318,260
Total expenditures 1,332,112 733,328
Excess of revenues over expenditures 1,062,547 $ $ 584,932 92

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 12: Joint Ventures, Jointly Governed Organizations and Operating Agreements (Continued) San Luis Obispo Regional Transit Authority
General Description. The City is a member of the San Luis Obispo Regional Transit Authority (Authority), which was established on February 27, 1990, to operate a joint public transportation system. The Authority is composed of the Cities of Arroyo Grande, Atascadero, Grover Beach, Morro Bay, Paso Robles, Pismo Beach, and San Luis Obispo, as well as the County of San Luis Obispo.

The Authority is governed by a Board of Directors comprised of representatives of each of the seven cities, in addition to the five members of the Board of Supervisors. Each member of the Board has one vote. The Board has the authority to establish policies for the operation of the transit system and to adopt an annual budget. Each member makes an annual contribution to the agency for funding the adopted budget.

Financial Information. The City allocates a portion of its Transportation Development Act funds directly to the Authority. During 2021-22 the City contributed approximately $588,596 of these funds to the Authority. The City's share of assets, liabilities, and fund equity has not been calculated by the Authority and therefore is not known to the City; however, based on the City's limited financial participation in the Authority, any such assets, liabilities, or equity are not believed to be significant to the basic financial statements taken as a whole. Separate financial statements are available from the Authority, 179 Cross Street, Suite A, San Luis Obispo, CA 93401.

San Luis Obispo Council of Governments
General Description. The San Luis Obispo Council of Governments (SLOCOG) was formed in 1968 through a joint powers agreement among the incorporated cities and the County of San Luis Obispo. It acts as the regional transportation planning agency for the county and is the metropolitan planning organization and the congestion management agency for the region. The governing board consists of twelve delegates, each with one vote that includes the five members of the County Board of Supervisors and one representative from each of the seven cities in the County.

Financial Information. A portion of the City's Transportation Development Act funds are directly allocated to the SLOCOG. The City's share of assets, liabilities, and fund equity has not been calculated by SLOCOG and therefore is not known to the City; however, based on the City's limited financial participation in SLOCOG, any such assets, liabilities, or equity are not believed to be significant to the basic financial statements taken as a whole. Separate financial statements are available from SLOCOG, 1114 Marsh Street, San Luis Obispo, CA 93401.

Nacimiento Water Supply Project
General Description. In 2004, the Council adopted a resolution approving an agreement with the San Luis Obispo County Flood Control and Water Conservation District (District) for the design, construction, and operations of the facilities required for the delivery of 5,482 acre-feet of water per year to the City of San Luis Obispo from the Nacimiento Water Supply Project (Project).

The agreement includes conditions relative to the costs associated with the project and how these costs will be shared and paid by the participants in the project.

Each project participant, including the City, has entered into an agreement to provide for the development, financing, construction, operation and maintenance of the Project. The agreement is a “take-or-pay” obligation: the City is obligated to pay amounts specified in the agreement whether or not water is delivered. The City is required to pay an amount equal to its share of various capital expenses relating to the funding of design costs, engineering, planning, environmental mitigation, equipping new facilities and/or construction efforts, accounting services, project administration and management, installation, grading, razing and building the Project. The City is also required to pay for its share of operating and maintenance costs. The City records these payments as operating expenses in its water enterprise fund.
93

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 12: Joint Ventures, Jointly Governed Organizations and Operating Agreements (Continued) The City is required to make payments under its agreement solely from the revenues of its water system. The City agreed to establish and collect rates and charges from the customers of the City’s water enterprise fund at levels sufficient to produce revenues equal to: (1) the costs of operating and maintaining the City’s water enterprise; plus (2) the contract payments, calculated in accordance with the delivery contract including the amounts allocated as the City’s share of capital projects installment debt service; plus (3) the coverage factor for the amounts allocated as the City’s share of capital projects installment debt service; and (4) under certain circumstances, that the City understands and agrees that the delivery contract may impose a surcharge following the occurrence of any payment default.

Financial Information. In September 2007, the District sold water revenue bonds in the amount of $196 million for the construction of the Project. In addition, the District sold water revenue bonds in the amount of $182 million. These bonds were refinanced in May 2018. Based on the City’s share of construction costs, debt service and operating and maintenance, the following summarizes the City’s Project obligations for 2021-22 and five-year projections for the 2018 bonds that will remaining outstanding following the refunding.

Separate financial statements are available from the San Luis Obispo County Flood Control and Water Conservation District, 1050 Monterey Street, San Luis Obispo, CA 93401.

Note 13: Risk Management
California Joint Powers Insurance Authority
The City is a member of the California Joint Powers Insurance Authority (Authority). The Authority is composed of 119 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The California JPIA began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine-member Executive Committee.

Each member pays an annual contribution to cover estimated losses for the coverage period. This initial funding is paid at the beginning of the coverage period. After the close of the coverage period, outstanding claims are valued. A retrospective deposit computation is then conducted annually thereafter until all claims incurred during the coverage period are closed on a pool-wide basis. This subsequent cost reallocation among members based on actual claim development can result in adjustments of either refunds or additional deposits required.

The total funding requirement for self-insurance programs is estimated using actuarial models and prefunded through the annual contribution. Costs are allocated to individual agencies based on exposure (payroll) and experience (claims) relative to other members of the risk-sharing pool. Additional information regarding the cost allocation methodology is provided below.

Actual 2022 $ 4,610,790
Projected:
2023 4,609,730
2024 4,619,370
2025 4,621,210
2026 4,622,040
2027-31 23,089,920
2032-36 23,101,490
2037-41 18,565,360
Nacimiento Water Supply Obligations
94

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 13: Risk Management (Continued)
Self-Insurance Programs of the Authority
General Liability and Workers’ Compensation. The City is a member of the California Joint Powers Insurance Authority (CJPIA), which provides joint protection programs and group purchased insurance for public entities covering liability, errors and omission losses, auto liability, employment practices liability, crime, pollution, workers’ compensation injuries and coverage for city-owned property. The City has a retained limit of $500,000 per occurrence for liability and no retained limit for workers’ compensation.

Liabilities of the City are reported when it is probable that a loss has occurred, and the amount of the loss can be reasonable estimated.

Liabilities include an amount for claims that have been incurred but not reported (IBNR). The result of the process to estimate the claims liability is not an exact amount as it depends on many complex factors, such as inflation, changes in legal doctrines and damage awards. Accordingly, claims are re-evaluated periodically to consider the effects of economic and social factors. The estimate of the claims liability also includes amounts for incremental claim adjustment expenses related to specific claims and other claim adjustment expenses regardless of whether or not they are attributable to specific claims. Estimated recoveries, for example from salvage or subrogation, are another component of the claim’s liability estimate.

During the past three fiscal years, none of the protection programs experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured coverage in 2020-21. CJPIA covers workers’ compensation claims up to a pooled limit of $2 million per occurrence and provides excess coverage to statutory limits with a group purchased commercial insurance policy. The City pays an annual contribution to CJPIA and may share in any member refunds in the event that pooled funding exceeds the cost of pooled claims and claim-related expenses, or the City may be required to pay additional contributions based upon CJPIA’s operating results.

Financial statements of CJPIA may be obtained from its administrative office located at 8081 Moody Street, La Palma, California 90623, or by calling (562) 467-8700.

Additional claims and lawsuits have been filed against the City in the normal course of business. It is reasonably possible that the City may be liable for claims not to exceed $500,000. In the opinion of management, the resolution of these matters will not have a material adverse effect on the financial condition of the City.

Adequacy of Protection
During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage from coverage in 2020-

21. Self-Insurance
The City retains the risk for workers’ compensation losses incurred prior to joining the California Joint Powers Insurance Authority.

Several member agencies of the now dissolved Central Coast Cities Self-Insurance Fund continue to participate in a non-risk sharing arrangement for claims management and the purchase of excess insurance. The participating agencies share a set of common guidelines and annually set aside premiums to pay their individual losses within their self-insured retentions. Losses are debited and investment income is credited to specific member accounts. The City has not incurred any losses in excess of insurance coverage.

Claims liabilities in the governmental funds are generally liquidated by the General Fund. 95

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 13: Risk Management (Continued)
The last actuarial study to determine the undiscounted outstanding claims liability was completed for the year ended June 30, 2022.

The liability was estimated based on the actuarial study and considered claims asserted and paid, and the time limitations for filing claims. There are no estimates for claims incurred but not reported because the time limit for filing claims has elapsed. The estimated asset at June 30, 2022 is calculated as follows:

Note 14: Commitments and Contingencies
Litigation
The City is presently involved in certain matters of litigation that have arisen in the normal course of conducting City business. City management believes, based upon consultation with the City Attorney, that these cases, in the aggregate, are adequately covered by insurance and not expected to result in a material adverse financial impact on the City.

Grant Awards
Under the terms of Federal and State grants, audits may be required, and certain costs may be questioned as not being appropriate expenditures under the terms of the grants. Such audits could lead to requests for reimbursement to the grantor agencies. City management believes disallowances, if any, will be immaterial.

Regional Transit Authority Pension Expense
The City is presently a member agency of the San Luis Obispo Regional Transit Authority (SLORTA) (see Note 14), a duly established Joint Powers Authority (JPA) comprised of all local cities and the County of San Luis Obispo. The City’s contractual contribution to that entity is approximately 18% of the total expense. The City was advised that the Regional Transit Authority was working with CalPERS to determine whether it is required to enroll certain previously unenrolled transit employees in the CalPERS pension system and whether the entity may be liable for obligations related to the failure to enroll those employees and make contributions on their behalf. On December 10, 2019 the County Board of Supervisors approved a contract for participation of the JPA in the San Luis Obispo County Pension Trust and the Employees Retirement Plan. The current amount of potential CalPERS unfunded liability for the JPA may reach as high as $4 million. It is not anticipated that the City’s annual payment to the JPA will increase to satisfy this unfunded liability.

Self-insurance activity as of and for the year ended June 30, 2022 is summarized is as follows:

Interest earnings 2,455 $
Claims expense (8,568)
Estimated liability for reported claims and settlement expenses ( 286,622) Assets on deposit 847,044
Estimated unpaid claims asset $ 560,422
Changes in the balances of claim assets during the past two fiscal years are as follows:

Estimated unpaid claims asset June 30, 2020 $ 803,567
Claim payments and related expenditures reimbursement (441,021) Change in estimated claims asset June 30, 2021 120,677
Interest earnings 4,878
Estimated unpaid claims asset June 30, 2021 488,101
Claim payments and related expenditures reimbursement 55,979 Change in estimated claims asset June 30, 2022 13,887
Interest earnings 2,455
Estimated unpaid claims asset June 30, 2022 $ 560,422
96

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 15: Construction and Other Significant Commitments Construction and other significant commitments as of June 30, 2022, including encumbrances outstanding at year-end, are as follows:

Long-term construction contracts are billed and paid on a percentage completion basis by construction phase.

Note 16: Fund Balance Deficiency
As of June 30, 2022, the City had no fund with negative fund balance.

Note 17: Subsequent Events
Events subsequent to June 30, 2022 have been evaluated through December 20, 2022, which is the date that the financial statements are available to be issued. Management identified no subsequent events that required disclosure.

Note 18: New Accounting Standards
Accounting Standards Adopted
 In GASB Statement No. 87, Leases – The objective of this statement is to recognize in the financial statements certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract.  GASB Statement 89, Accounting for Interest Cost Incurred before the End of a Construction Period – The objective of this statement is to (1) to enhance the relevance and comparability of information about capital assets and the cost of borrowing for a reporting period and (2) to simplify accounting for interest cost incurred before the end of a construction period. This statement establishes accounting requirements for interest cost incurred before the end of a construction period. This Statement requires that interest cost incurred before the end of a construction period be recognized as an expense in the period in which the cost is incurred for financial statements prepared using the economic resources measurement focus. As a result, interest cost incurred before the end of a construction period will not be included in the historical cost of a capital asset reported in a business-type activity or enterprise fund. The requirements of this statement did not apply to the City for the current fiscal year.  GASB Statement No. 92, Omnibus 2020 - The objectives of this Statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing practice issues that have been identified during implementation and application of certain GASB Statements.  GASB Statement 93, Replacement of Interbank Offered Rates – The objective of this Statement is to address the accounting and financial reporting implications that result from the elimination of the London Interbank Offered rate General Fund $ 3,524,689
Special Revenue Funds 85,030
Capital Project Funds 4,643,698
Enterprise Funds:

Water 2,549,243
Sewer 36,750,388
Parking 445,846
Transit 2,126,016
Total $ 50,124,910
97

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 18: New Accounting Standards (Continued)
 (LIBOR) that is notably used in most agreements in which variable payments made or received depend on an interbank offered rate (IBOR). As a result of global reference rate reform, LIBOR is expected to cease to exist in its current form at the end of 2021, prompting governments to amend or replace financial instruments for the purpose of replacing LIBOR with other reference rates, by either changing the reference rate or adding or changing fallback provisions related to the reference rate. The requirements of this statement did not apply to the City for the current year.  GASB Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans—an amendment of GASB Statements No. 14 and No. 84, and a supersession of GASB Statement No. 32 – The primary objectives of this Statement are to (1) increase consistency and comparability related to the reporting of fiduciary component units in circumstances in which a potential component unit does not have a governing board and the primary government performs the duties that a governing board typically would perform; (2) mitigate costs associated with the reporting of certain defined contribution pension plans, defined contribution other postemployment benefit (OPEB) plans, and employee benefit plans other than pension plans or OPEB plans (other employee benefit plans) as fiduciary component units in fiduciary fund financial statements; and (3) enhance the relevance, consistency, and comparability of the accounting and financial reporting for Internal Revenue Code (IRC) Section 457 deferred compensation plans (Section 457 plans) that meet the definition of a pension plan and for benefits provided through those plans.
 GASB Statement No. 99, Omnibus 2022 – The primary objectives of this Statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing (1) practice issues that have been identified during implementation and application of certain GASB Statements and (2) accounting and financial reporting for financial guarantees. The requirements of this Statement did not apply to the City for the current fiscal year.

New Accounting Standards
The City is currently analyzing its accounting practices to determine the potential impact on the financial statements for the following GASB Statements:
 GASB Statement 91, Conduit Debt Obligations – The objective of this statement is to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. The requirements of this Statement are effective for the City’s year ending June 30, 2023.  GASB Statement 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements – The objective of this Statement is to improve financial reporting by addressing issues related to public-private and publicpublic partnership arrangements (PPPs). As used in this Statement, a PPP is an arrangement in which a government (the transferor) contracts with an operator (a governmental or nongovernmental entity) to provide public services by conveying control of the right to operate or use a nonfinancial asset, such as infrastructure or other capital asset (the underlying PPP asset), for a period of time in an exchange or exchange-like transaction. The requirements of this Statement are effective for the City’s year ending June 30, 2023.  GASB Statement No. 96, Subscription-Based Information Technology Arrangements – The objective of this statement is to provide guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for government end users (governments). This Statement (1) defines a SBITA; (2) establishes that a SBITA results in a right-to-use subscription asset—an intangible asset—and a corresponding subscription liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. The requirements of this Statement are effective for the City’s year ending June 30, 2023.
98

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2022

Note 18: New Accounting Standards (Continued)
 GASB Statement No. 100, Accounting Changes and Error Corrections-an Amendment of GASB Statement No. 62 – The primary objective of this Statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability. The requirements of this Statement are effective for the City’s year ending June 30, 2024.
 GASB Statement No. 101, Compensated Absences – The primary objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. The requirements of this Statement are effective for the City’s year ending June 30, 2025.

Note 19: Prior Period Adjustments
During 2022, prior period adjustments were made to correct payroll errors and to properly record the loan receivables in Affordable Housing Fund, CDBG Fund, Impact Fee Funds, Water Fund and Sewer Fund, which the City expensed or not recorded in the past years.

Governmental
Activities
Businesstype
Activities General Fund
Non-Major
Governmental
Fund Water Fund Sewer Fund Parking
Fiduciary
Funds
Net Position as
previously reported at
June 30, 2021 $ 217,715,565 155,741,584 $ 47,118,071 $ 41,177,283 $ 84,800,287 $ 99,201,571 $ 26,905,947 $ 6,888,633 $ Prior Period Adjustments:

Loan Receivables 3,558,933 2,274,934 160,116 - 1,476,189 798,745 - - Cash 247,646 17,176 247,646 4,539 - 10,391 2,246 310
Accrued interest 592,053 224,399 - 148,008 - 76,391 - - Correction of GASB 84 49,134 - 24,567 24,567 24,567 24,567 24,567 - Net Position as restated
at
June 30, 2021 $ 220,232,074 160,140,216 $ 47,365,717 $ $ 41,361,966 $ 86,453,590 $ 26,908,193 100,111,665 $ $ 6,913,510 Government-wide Statements Fund Statements
99

100

REQUIRED SUPPLEMENTARY INFORMATION
(UNAUDITED)
101

102

City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund
For the Fiscal Year Ended June 30, 2021
Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
REVENUES:

Taxes and franchise fees:

Sales and use tax - general $ 18,387,000 $ 20,790,779 $ 22,247,303 $ 1,456,524 Transaction and use tax - Local Revenue Measure 24,279,000 25,810,000 29,172,258 3,362,258 Property tax 14,396,883 14,215,765 14,716,412 500,647
Transient occupancy tax 7,213,000 9,051,000 10,650,762 1,599,762 Utility users tax 5,565,000 5,383,000 5,338,325 (44,675) Property tax in lieu of VLF 5,796,000 5,941,388 5,994,592 53,204 Franchise taxes 1,575,000 1,575,000 1,978,295 403,295
Business tax 2,426,000 2,832,000 2,823,163 (8,837)
Cannabis Tax 1,300,000 1,000,000 998,875 (1,125)
Total taxes 80,937,883 86,598,932 93,919,985 7,321,053
Fines, forfeitures and penalties 229,096 209,096 173,915 (35,181) Use of money and property 230,000 495,000 (1,455,527) (1,685,527) Subventions and grants:

Other State and Federal grants 900,000 4,935,697 2,067,631 (2,868,066) Other subventions and grants 336,000 493,000 529,299 36,299 Total subventions and grants 1,236,000 5,428,697 2,596,930 (2,831,767) 103

City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2021

Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
Charges for services:

Public safety:

Police 533,196 506,105 468,144 (37,961)
Fire:

Medical emergency recovery 475,560 498,476 478,674 3,114 Fire safety/hazardous materials permits 900,010 940,010 1,000,075 60,065 Other fire revenues 5,890 (10,631) 26,067 36,698
Community development:

Planning and zoning fees 1,305,000 1,305,000 1,383,043 78,043 Construction plan and check inspections 3,955,000 3,951,284 4,507,348 556,064 Infrastructure plan check and inspections (291,721) (291,721) 197,874 489,595 Fire plan check and inspections - - (3,929) (3,929)
Culture and recreation:

Adult athletic fees 256,200 259,800 232,412 (27,388)
Youth athletic fees 770,935 770,935 866,805 95,870
Rental and use fees 289,649 289,649 305,902 16,253
Aquatics 189,378 189,378 273,546 84,168
Golf course 260,543 260,543 220,087 (40,456)
General government:

Other service charges 757,443 604,443 726,873 122,430
Total charges for services 9,429,999 9,250,355 10,682,921 1,432,566 Impact Fees - 68,125 - 68,125
Other revenues 471,100 471,100 413,188 (57,912)
Total Revenues 92,799,078 102,188,180 106,399,537 4,211,357 104

City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2021

Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
Expenditures:

Public Safety:

Police protection:

Administration 2,436,920 2,186,391 1,880,726 556,194
Investigations 3,458,235 4,119,375 3,621,224 498,151
Neighborhood services 274,535 297,704 284,409 13,295
Support services 2,920,629 3,417,769 3,315,494 102,275
Patrol services 9,508,130 11,517,804 12,616,286 (1,098,482) Traffic safety 1,031,932 885,312 863,845 168,087
Total police protection 19,233,231 22,821,505 22,581,984 239,521 Fire and environmental safety:

Administration 1,493,080 1,221,830 1,397,025 96,055
Emergency response 11,034,040 13,653,788 13,924,054 (270,266) Fire Apparatus Services 468,759 526,567 502,880 23,687
Hazard protection 1,063,119 871,697 965,976 97,143
Training 392,703 185,008 143,900 41,108
Disaster preparedness 50,069 115,434 97,605 17,829
Mobile Crisis Unit 263,311 - 43,085 220,226
Total fire and environmental safety 14,039,098 17,300,308 17,074,525 225,783 Total public safety 33,272,329 40,121,813 39,656,509 465,304 Transportation:

Transportation planning and engineering 1,016,643 1,163,539 1,123,041 40,498 Street and sidewalk maintenance 2,009,761 2,019,992 1,796,108 223,884 Traffic signals and street lights 569,934 597,520 598,015 (495) Creek and flood protection 1,563,631 1,448,876 1,301,812 261,819 Total transportation 5,344,682 5,045,214 4,818,976 525,706 105

City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2021

Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
Culture and Recreation:

Recreation programs:

Recreation administration 899,033 781,671 872,935 26,098 Aquatics/Sinsheimer park facilities 651,167 684,067 568,014 116,053 Children's services 1,272,354 1,384,098 1,228,850 155,248 Facilities 284,066 321,958 299,765 22,193
Special events 10,500 8,600 1,008 7,592
Recreational sports 655,001 708,683 516,824 191,859
Golf course 705,094 805,838 831,862 (26,024)
Ranger services 818,243 954,994 803,371 151,623
Maintenance programs:

Swim center maintenance 592,191 615,215 601,262 13,953
Parks and landscape maintenance 3,327,234 3,494,417 3,553,119 (58,702) Tree maintenance 492,709 380,741 334,499 46,242
Cultural and social service programs: Human relations
Human relations 572,086 571,416 212,279 359,137
Cultural activities 347,632 347,632 332,351 15,281
Total leisure, cultural and social services 10,509,947 11,176,692 10,156,139 1,020,553 Community Development:

Planning:

Commissions and communities 34,939 34,939 13,395 21,544 Community development administration 1,141,294 994,382 903,001 238,293 Long-range planning (656,102) (575,147) 751,455 (1,326,602) Development review 2,381,429 2,038,597 1,839,094 542,335 Natural resource protection 1,066,623 1,008,766 1,017,359 49,264 Construction regulation:

Building and safety 3,634,026 2,296,644 3,235,364 398,662 CIP project engineering 2,159,868 2,940,360 2,664,647 275,713 Economic health:

Community promotion 422,612 437,898 415,604 7,008
Economic development 1,164,443 1,294,993 869,369 295,074 Housing 962,157 987,983 1,017,132 (29,149)
Total community development 10,572,142 13,198,563 12,726,420 472,143 106

City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2021

Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
General Government:

Legislation:

Council 215,501 241,611 245,855 (4,244)
General administration:

City administration 2,256,453 2,129,156 2,077,196 179,257 Public works administration 1,060,927 923,458 1,069,343 (8,416) Legal services:

City attorney 1,412,670 1,330,474 1,374,705 37,965
City clerk services:

Administration and records 574,916 642,094 601,382 40,712 Organization support services:

Human resource administration 6,372,946 5,916,713 6,175,678 197,268 Finance and administration 2,364,395 2,276,820 2,557,005 (192,610) Revenue management 493,732 420,193 438,580 55,152
Accounting 1,136,747 1,156,943 1,110,033 46,910
Finance non-departmental 377,658 1,569,473 288,297 1,281,176 Network services 3,374,515 3,310,079 3,204,644 105,435
Wellness program 16,415 18,251 10,134 6,281
Building and vehicle maintenance:

Buildings 1,428,128 1,508,715 1,359,287 149,428
Vehicle and equipment maintenance 1,489,883 1,552,441 1,395,775 156,666 Total general government before cost reimburseme 21,612,413 23,958,894 21,907,914 2,050,980 Cost reimbursement (Note 3 to RSI) (4,717,442) (4,717,442) (4,717,442) - Total general government 16,894,971 19,241,452 17,190,472 2,050,980 Capital Outlay:

Public safety 15,869 - 16,178 (309)
Transportation 2,457,476 - 976,123 1,481,353
Culture and recreation 418,213 - 170,729 247,484
Community development 19,327 - 17,672 1,655
General government 1,446,557 - 816,029 630,528
Total capital outlay 4,357,097 - 1,996,731 2,360,366
Total Expenditures 76,294,603 93,440,299 86,545,247 6,895,052 Excess of Revenues Over Expenditures 16,504,475 8,747,881 19,854,290 11,106,409 107

City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2021

Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
Other Financing Sources (Uses)
Transfers in 18,800,657 18,800,657 3,942,248 (14,858,409) Transfers out (41,432,873) (37,738,319) (30,416,749) 11,016,124 Total other financing uses (18,937,662) (22,632,216) (26,474,501) (3,842,285) Net Change in Fund Balance (2,433,187) (13,884,335) (6,620,211) 7,264,124 Fund Balance, Beginning of the Year, as restated 47,365,717 47,365,717 47,365,717 Fund Balance, End of Year $ 44,932,530 $ 33,481,382 $ 40,745,506 108

109

Fiscal Year 2021-22 2020-21 2019-20 2018-19
Measurement Period 2020-21 2019-20 2018-19 2017-18
Total pension liability:

Service Cost $ 3,939,785 $ 3,681,240 $ 4,042,717 $ 4,328,129 Interest on total pension liability 16,589,680 16,160,011 15,531,812 14,778,918 Difference between expected and actual experience (755,414) 1,869,474 2,966,923 1,445,049 Changes in assumptions - - (1,292,326) -
Benefit payments, including refunds of
employee contributions (13,518,666) (12,892,847) (12,061,701) (10,740,816) Net change in total pension liability 6,255,385 8,817,878 10,479,751 8,518,954 Total pension liability - beginning 237,568,349 228,750,471 218,270,720 209,751,766 Total pension liability - ending (a) $ 243,823,734 237,568,349 $ $ 228,750,471 $ 218,270,720 Plan fiduciary net position:

Contributions - employer $ 8,246,755 $ 7,709,918 $ 9,361,882 $ 6,693,987 Contributions - employee 2,056,274 1,889,583 1,775,245 1,820,697 Net investment income 32,904,570 7,205,266 9,124,520 10,820,033 Benefit payments (13,518,666) (12,892,847) (12,061,701) (10,740,816) Net plan to plan resource movement - - - (316)
Administrative expense (148,132) (203,824) (97,394) (200,184) Other miscellaneous income/(expense) - - 316 (380,153)
Net change in plan fiduciary net position 29,540,801 3,708,096 8,102,868 8,013,248 Plan fiduciary net position - beginning 148,289,275 144,581,179 136,478,311 128,465,063 Plan fiduciary net position - ending (b) $ 177,830,076 $ 148,289,275 $ 144,581,179 $ 136,478,311 Net pension liability (asset) - ending (a) - (b) $ 65,993,658 $ 89,279,074 $ 84,169,292 $ 81,792,409 Plan fiduciary net position as a percentage of the total pension liability 72.93% 62.42% 63.20% 62.53%
Covered payroll 23,675,396 21,795,380 22,951,725 23,736,588 Net pension liability as percentage of covered payroll 278.74% 409.62% 366.72% 344.58% * Fiscal year 2015 was the first year of implementation. Therefore, only eight years are shown. Information is required only for measurement periods for which GASB 68 is applicable. The current measurement period is the year ended June 30, 2021.

Benefit changes. The figures above include any liability impact that may have resulted from voluntary benefit changes that occurred after the June 30, 2019 valuation. However, offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes) that occurred after the June 30, 2019 valuation date are not included in the figures above, unless the liability impact is deemed to be material by the plan actuary.

Changes in assumptions . None in 2019 or 2020 or 2021. In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Assumptions December 2017. There were no changes in the discount rate. In 2017, the discount rate was reduced from 7.65 percent to 7.15 percent. In 2016, 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.

City of San Luis Obispo, California
Schedule of the Changes in the Net Pension Liability and Related Ratios Miscellaneous Agent Multiple-Employer Plan
June 30, 2022
Last 10 Years *
110

2017-18 2016-17 2015-16 2014-15
2016-17 2015-16 2014-15 2013-14
$ 4,124,832 $ 3,580,882 $ 3,578,172 $ 3,703,087
14,197,897 13,688,523 13,193,597 12,756,967
694,843 (1,160,933) (2,433,791) -
11,219,603 - (3,057,724) -
(10,161,053) (9,476,508) (8,808,668) (8,258,611)
20,076,122 6,631,964 2,471,586 8,201,443
189,675,644 183,043,680 180,572,094 172,370,651
$ 209,751,766 $ 189,675,644 $ 183,043,680 $ 180,572,094 $ 6,776,849 $ 6,122,173 $ 5,027,356 $ 4,631,254
1,841,331 1,666,606 1,509,834 1,664,654
13,053,453 677,557 2,673,657 17,746,607
(10,161,053) (9,476,508) (8,808,668) (8,258,611)
(2,936) - - -
(172,935) (72,044) (133,042) -
- - - -
11,334,709 (1,082,216) 269,137 15,783,904
117,130,354 118,212,570 117,943,433 102,159,529
$ 128,465,063 $ 117,130,354 $ 118,212,570 $ 117,943,433 $ 81,286,703 $ 72,545,290 $ 64,831,110 $ 62,628,661

61.25% 61.75% 64.58% 65.32%
21,841,841 20,499,668 19,769,997 19,235,818
372.16% 353.89% 327.93% 325.58%
111

Fiscal Year 2021-22 2020-21 2019-20 2018-19
Acuarially determined contribution $ 8,390,908 $ 8,069,806 $ 7,709,918 $ 7,093,882 Contributions in relation to the actuarially determined contribution (15,923,929) (8,069,806) (7,709,918) (9,361,882) Contribution deficiency (excess) $ (7,533,021) $ - $ (2,268,000) - $ Covered payroll 26,238,385 23,675,396 21,795,380 22,951,725 Contributions as percentage of covered payroll 60.69% 34.09% 35.37% 40.79% Actuarial Cost Method Entry Age Normal
Amortization Method
Amortization Period
Asset Valuation Method
Inflation 2.50%
Salary Increases Varies by Entry Age and Service
Payroll Growth 2.750%
Discount Rate 7.15% Net of Pension Plan Investment and Administrative Expenses Retirement Age
Mortality
City of San Luis Obispo, California
Schedule of the Pension Plan Contributions
Miscellaneous Agent Multiple-Employer Plan
June 30, 2022
For details, see June 30, 2018 CalPERS Funding Valuation Report For details, see June 30, 2018 CalPERS Funding Valuation Report The probabilities of Retirement are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015.

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 MP-2016 published by the Society of Actuaries.

Last 10 Years *
The actuarial methods and assumptions used to set the actuarially determined contributions for fiscal year 2020-21 contributions rates are as follows:
* Fiscal year 2014 was the first year of implementation. Therefore, only nine years are shown. Information is required only for measurement periods for which GASB 68 is applicable. The current measurement period is the year ended June 30, 2021. 112

2017-18 2016-17 2015-16 2014-15 2013-14
$ 6,693,987 $ 6,776,849 $ 6,122,173 $ 5,027,356 4,631,254$ (6,693,987) (6,776,849) (6,122,173) (5,027,356) (4,631,254) $ - $ - $ - $ - $ -
23,736,588 21,841,841 20,499,668 19,769,997 19,235,818

28.20% 31.03% 30.97% 25.43% 24.08%
113

Fiscal Year 2021-22 2020-21 2019-20 2018-19
Measurement Period 2020-2021 2019-2020 2018-2019 2017-18 Proportion of the Collective Net Pension Liability 1.08299% 0.7225% 0.7212% 1.2261% Proportionate Share of the Collective Net Pension Liability $ 58,571,330 $ 78,611,581 $ 73,897,967 $ 71,940,534 Covered payroll $ 10,744,808 $ 9,488,971 $ 11,197,562 $ 11,246,306 Proportionate share of the net pension liability as percentage of covered payroll 545.11% 828.45% 659.95% 639.68%
Plan fiduciary net position as a percentage of the total pension liability 88.29% 75.26% 75.26% 75.26%
*-Fiscal year 2015 was the first year of implementation, therefore only eight years are shown.

The CalPERS discount rate was increased from 7.5% to 7.65% in fiscal year 2016, and then decreased from 7.65% to 7.15% in fiscal year 2018.

The CalPERS mortality assumptions were adjusted in fiscal year 2019.

City of San Luis Obispo, California
Schedule of the City's Proportionate Share of the Net Pension Liability Safety Cost-Sharing Plan
As of June 30, 2022
Last 10 Years *
114

2017-18 2016-17 2015-16 2014-15
2016-17 2015-16 2014-15 2013-14

1.1943% 1.2510% 1.3654% 1.3754%
$ 71,364,346 $ 64,792,760 $ 56,260,280 $ 51,592,420
$ 10,614,437 $ 10,643,123 $ 10,849,863 $ 10,768,119
672.33% 608.78% 518.53% 479.12%

73.31% 74.06% 78.40% 79.82%
115

Fiscal Year 2021-22 2020-21 2019-20 2018-19
Contractually required contribution (actuarially determined) $ 7,860,585 $ 7,631,620 $ 7,167,638 $ 6,416,780 Contribution in relation to the actuarially determined
contributions (12,756,585) (7,631,620) (7,167,638) (8,348,780) Contribution deficiency (excess) $ (4,896,000) $ - $ (1,932,000) - $ Covered payroll $ 12,207,346 $ 10,744,808 $ 9,488,971 $ 11,197,562 Contributions as a percentage of covered payroll 104.50% 71.03% 75.54% 74.56% The Plan’s proportionate share of aggregate contributions may not match the actual contributions made by the employer during the measurement period. The Plan’s proportionate share of aggregate contributions is based on the Plan’s proportion of fiduciary net position as well as any additional side fund (or unfunded liability) contributions made by the employer during the measurement period. *- Fiscal year 2015 was the first year of implementation, therefore only nine years are shown City of San Luis Obispo, California
Schedule of the City's Pension Contributions
Safety Cost-Sharing Plan
As of June 30, 2022
Last 10 Years *
116

2017-18 2016-17 2015-16 2014-15 2013-14
$ 5,549,915 5,910,345 $ 5,074,217 $ 4,350,871 $ 4,226,211 $ (5,910,345) (6,299,915) (5,824,217) (4,650,871) (5,161,211) $ - $ (750,000) $ (750,000) $ (300,000) $ (935,000)
$ 11,246,306 $ 10,614,437 $ 10,643,123 $ 10,849,863 $ 10,768,119

52.55% 59.35% 54.72% 42.87% 47.93%
117

Fiscal Year 2021-22 2020-21 2019-20 2018-19 2017-18
Measurement Period 2020-21 2019-20 2018-19 2017-18 2016-17 Total OPEB liability:

Service Cost 423,364 $ 415,244 $ 477,538 $ 463,629 $ 450,125 $ Interest on total OPEB liability 867,422 841,590 935,528 891,794 856,436 Difference between expected and
actual experience - 349,893 (2,085,962) - -
Changes in assumptions 507,115 (203,416) 21,857 - -
Benefit payments, including refunds of
employee contributions (678,882) (678,789) (677,824) (765,000) (827,500) Net change in total OPEB liability 374,536 1,469,005 (1,328,863) 590,423 479,061 Total OPEB liability - beginning 12,766,729 12,392,193 13,721,056 13,130,633 12,651,572 Total OPEB liability - ending (a) $ 14,235,734 $ 12,766,729 $ 12,392,193 $ 13,721,056 $ 13,130,633 Plan fiduciary net position:

Contributions - employer 921,000 $ 1,656,882 $ 677,824 $ 1,221,000 $ 1,493,996 $ Net investment income 2,196,724 259,704 392,852 439,828 469,883 Benefit payments (678,789) (678,882) (677,824) (765,000) (827,500) Administrative expense (7,235) (3,472) (1,364) (10,170) (2,387) Net change in plan fiduciary net position 1,234,232 2,431,700 391,488 885,658 1,133,992 Plan fiduciary net position - beginning 6,756,866 7,991,098 6,365,378 5,479,720 4,345,728 Plan fiduciary net position - ending (b) $ 10,422,798 $ 7,991,098 $ 6,756,866 $ 6,365,378 $ 5,479,720

Plan net OPEB liability - ending (a) - (b) $ 4,775,631 3,812,936 $ 5,635,327 $ 7,355,678 $ 7,650,913 $

Plan fiduciary net position as a percentage of
the total OPEB liability 73.22% 62.59% 54.53% 46.39% 41.73% Covered-employee payroll 40,691,438 $ 33,077,056 $ 33,429,600 $ 33,790,437 $ 33,722,592 $ Plan net OPEB liability as percentage of
covered payroll 9.37% 14.44% 16.86% 21.77% 22.69%
Changes in assumptions. As of June 30, 2021 measurement date, the assumption adds 1. Discount rate was updated based on newer capital market assumptions 2. Medical plan election at retirement assumption was updated 3. Inflation rate decreased from 2.75% to

2.50%, which decreased the discount rate, medical trend, and aggregate salary increases by 0.25% 4. Demographic assumptions updated to CalPERS 2000-2019 Experience Study 5. Mortality improvement scale was updated to Scale MP-2021. As of June 30, 2020 measurement date, the assumption removed the ACA excise tax. As of June 30, 2019 measurement date, the mortality improvement scale was updated to Scale MP-2019. Medical plan at retirement estimated using weighted premium of recent retirees; updated based on retirements during 2015-2019.
* Fiscal year 2018 was the first year of implementation. Information is required only for measurement periods for which GASB 75 is applicable.

Benefit changes . The figures shown do not include any liability impact that may have resulted from plan changes which occurred after the June 30, 2020 measurement date.

Prepared for the City of San Luis Obispo OPEB Plan
an Agent Multiple-Employer Defined Benefit OPEB Plan
As of June 30, 2022
Last 10 Years *
Schedule of Changes in the Net OPEB Liability and Related Ratios 118

Fiscal Year 2021-22 2020-21 2019-20 2018-19 2017-18
$ 1,309,367 $ 921,000 $ 1,190,000 $ 1,154,000 $ 1,221,000 $ (1,309,367) (921,000) (1,656,882) (677,824) (1,221,000) Contribution deficiency (excess) $ - $ (466,882) - $ $ 476,176 $ - Covered-employee payroll $ 38,691,777 $ 40,691,438 $ 33,077,056 $ 33,429,600 $ 33,790,437

3.38% 2.26% 3.60% 3.45% 3.61%
Contributions paid as of June 30, 2022 are deferred to June 30, 2023.

Valuation date June 30, 2019
Actuarial Cost Method Entry Age Normal, Level % of pay
Amortization Method Level % of pay
Amortization Period Average 12.1 years remaining fixed period for 2021/22 Asset Valuation Method Investment gains and losses spread over 5-year rolling period Discount Rate
General Inflation
Medical Trend
Mortality CalPERS 1997-2015 experience study
Mortality Improvement
The actuarial methods and assumptions used to set the actuarially determined contributions for fiscal year 2021-22 are as follows:

Non-Medicare - 7.25% for 2021, decreasing to an ultimate rate of 4.0% in 2076 Medicare - 6.3% for 2021, decreasing to an ultimate rate of 4.0% in 2076 Post-retirement mortality projected fully generational with Scale MP-2019 * Fiscal year 2018 was the first year of implementation. Information is required only for measurement periods for which GASB 75 is applicable.

6.75%

2.75%
Prepared for the City of San Luis Obispo Miscellaneous Plan an Agent Multiple-Employer Defined Benefit OPEB Plan
As of June 30, 2022
Last 10 Years *
Schedule of Employer OPEB Contributions
Actuarially determined contribution
Contributions in relation to the
actuarially determined contributions
Contributions as a percentage of covered
payroll
119

City of San Luis Obispo, California
Notes to Required Supplementary Information
June 30, 2022
Budgetary Comparison Schedule

1. The budget is prepared using the modified accrual basis of accounting consistent with U.S. generally accepted accounting principles.

2. Outstanding encumbrances from the prior fiscal year are not reflected in the original budget column but are included in the final budget amounts.

3. All the City’s general government and engineering programs are initially accounted and budgeted for in the General Fund.

However, certain of these support service programs also benefit the City’s enterprise and agency fund operations, and accordingly, transfers are made from these funds to reimburse the General Fund for these services. The transfers are based on a Cost Allocation Plan prepared for this purpose which distributes the shared costs in a uniform, consistent manner in accordance with U.S. generally accepted accounting principles.

Excess of Expenditures Over Appropriations

1. At June 30, 2022 expenditures exceeded appropriations in the General Fund as noted below.

Department/Division Budget Variance
Police Protection:

Patrol services $ 1,098,482
Fire and environmental safety:

Emergency response 270,266
Culture and Recreation:

Golf course 26,024
Transportation:

Traffic signals and street lights 495
Recreation programs:

Maintenance programs:

Parks and landscape maintenance 58,702
Planning:

Long-range planning 1,326,602
Organization support services:

Finance and administration 192,610
Housing 29,149
General Government:

Council 4,244
General Administration:

Public works administration 8,416
Capital Outlay:

Public safety 309
120

OTHER SUPPLEMENTARY INFORMATION

AND COMBINING AND INDIVIDUAL FUND

STATEMENTS AND SCHEDULES
121

122

Revenues Budget Actual
Local Transaction and Use Tax 25,810,000 $ 29,172,258 $ Investment Income (283,748)
$ 28,888,510 25,810,000 $
Expenditures
Transfer Out for Operating Programs:

Protect Financial Stability (FTE = 3.5) 328,811 $ 328,811 $ Community Safety and Emergency Preparedness (FTE = 8) 1,417,636 1,417,636 Creek and Flood Protection (FTE = 6) 632,567 632,567
Address Homelessness (FTE = 1) 810,647 810,647
Safe and Clean Public Areas (FTE = 3) 371,021 371,021
Economic Development and Business Retention 998,688 998,688 Youth/Senior Services and Recreation Facilities (FTE = 3.5) 341,009 341,009 Street Maintenance and Transportation (FTE = 5.6) 1,016,455 1,016,455 Open Space/Natural Areas Preservation and Maint. (FTE = 5) 741,007 741,007 Other Services and Projects 254,819 254,819
$ 6,912,660 6,912,660 $
Transfer Out for 2021-22 Capital Projects
Community Safety and Emergency Preparedness 2,119,473 $ 2,119,473 $ Creek and Flood Protection 960,000 960,000
Safe and Clean Public Areas 805,000 805,000
Economic Development and Business Retention 1,140,555 1,140,555 Youth/Senior Services and Recreation Facilities 3,234,000 3,234,000 Street Maintenance and Transportation (incl bike and ped improvements) 9,021,975 9,021,975 Open Space/Natural Areas Preservation and Maintenance 1,490,000 1,490,000 Other Services and Projects 1,365,464 1,365,464
Allocation to Capital Reserve 3,426,208 3,426,208
$ 23,562,674 23,562,674 $
Expenditures on Legacy Projects (projects funded before 2021-22) Legacy Projects 3,975,195 $ 2,016,283 $
Net Change in Fund Balance $ (3,603,107)
Fund Balance Beginning of Year $ 9,299,971
Fund Balance End of Year $ 5,696,864
Encumbered for Legacy Projects (1,958,912) $
Available Fund Balance (note 1) 3,737,952 $
Note 1: Council took action on October 4, 2022 (R-11367) to allocate $2.1 million of the available fund balance.

City of San Luis Obispo
Local Transaction Tax Measure Funding Schedule
For the Fiscal Year Ended June 30, 2022
123

Capital Programs: Budget Actual Encumbrances Carryover
Community Safety and Emergency Preparedness
Fire Hydrant Replacement 40,000 39,976 - 24
IT Replacements - Annual Asset Maintenance Account 1,703,757 511,052 120,507 1,072,198 Police Station Replacement 262,520 29,950 232,570 0
Fleet Replacement: Police 340,000 109,589 116,367 114,045 Fleet Replacement: Fire 295,000 129,034 133,236 32,730
Community Safety Emergency Response
Communication Equip 89,420 29,309 6,500 53,611
Fire Station #3 & #4 Remodel Space Study and Design 25,000 - - 25,000 2,755,697 848,909 609,179 1,297,609
Creek and Flood Protection
Pismo/Johnson/San Luis Creek Bank Stabilization 235,000 104,166 88,811 42,023 Broad and Leff Culvert Repair 7,613 7,612 - 1
Storm Drains Annual Asset Maintenance 822,159 629,646 30,530 161,983 Woodbridge Groundwater Runoff Diversion 10,000 - - 10,000 1,074,772 741,423 119,342 214,007
Safe and Clean Public Areas
Downtown Safety Enhancements 400,000 208,581 191,368 51 Sidewalk Annual Asset Maintenance 287,613 89,993 2,465 195,155 Mission Plaza Restroom Replacements and Enhancements 377,435 110,918 167,068 99,449 Bob Jones Trail and Railroad Safety Trail Solar Lighting 100,000 - - 100,000 Downtown Cleaning Equipment 21,368 4,500 16,868
Street Lights - Annual Asset Maintenance 73,148 5,818 13,577 53,753 Street and Pathway Lighting 75,000 - - 75,000
1,334,564 419,810 183,161 731,593
Economic Development and Business Retention
Open SLO 200,000 65,015 7,500 127,485
Banner Arm - Bench Rests - Signs 100,000 20,878 - 79,122 Annual Public Art Maintenance and Projects 92,500 62,800 - 29,700 Neighborhood Greenways Public Art 11,216 - - 11,216
Downtown Public Art Installations 211,000 172,738 - 38,262 Mission Plaza Maintenance Improvements 275,000 88,730 - 186,271 Mission Plaza Arbor Refurbishment 15,000 - - 15,000
Downtown Zig‐Zag Lighting 250,000 - - 250,000
1,154,716 410,161 7,500 737,055
Youth/Senior Services and Recreation Facilities
Meadow Park Pathways Refurbishment 220,035 220,035 - -
Laguna Lake Golf Course Maintenance 40,000 28,430 - 11,570 Golf Course Pro Shop Flood Damage Repairs 120,000 26,778 - 93,222 Parks Major Maintenance - Annual Asset Maintenance 1,977,135 1,198,349 15,517 763,269 Parks and Recreation Master Plan Implementation 200,000 - - 200,000 Playground Equipment Replacement -
Annual Asset Maint. 110,000 - - 110,000
Parks and Recreation Interior Office Rehabilitation 150,000 150,000 - - North Broad Street Neighborhood Park Construction 175,000 - - 175,000 Major Facilities Maintenance - Annual Asset Maintenance 1,004,795 152,183 26,480 826,132 3,996,965 1,775,775 41,997 2,179,193
City of San Luis Obispo
Local Transaction Tax Measure Funding Schedule, continued Includes Legacy Projects and projects funded by Capital Reserve Local Revenue Measure Funded Projects
124

Street Maintenance and Transportation
Ped and Bike Pathway Inventory and
Pavement Condition 39,544 82,407 4,699 38,164
Neighborhood Greenway Plan Implementation ‐ Phase II 744,775 338,562 379,028 27,186 South Street Median Landscaping 36,676 22,596 11,090 2,990 Avila Ranch ‐ Buckley Extension Class I Bike Lane 1,665,000 56,989 1,607,915 96 Pedestrian Crossing Improvements 363,773 33,149 24,344 306,280 Curb Ramps 1,000,000 616,142 200,848 183,010
2021 Downtown Pavement Improvements Project 2,630,095 2,573,536 - 56,559 Active Transportation Plan Implementation 400,107 106,312 229,912 63,884 Monterey at Santa Rosa Paving and Signal Proect 1,000,000 9,770 230 990,000 Roadway Sealing 2022 238,160 10,360 - 227,800
Street Reconstruction and Resurfacing - Annual
Asset Maint. 413,118 83,484 147,490 182,143
Mid-Higuera Bypass 110,000 11,546 42,154 56,300
Traffic Signs and Striping Maintenance 62,919 43,770 - 19,149 California Taft Roundabout 300,000 1,721 68,040 230,240 Orcutt/Tank Roundabout Construction 1,069,494 707,019 97,262 265,214 Prado Road Interchange 500,000 - - 500,000
Prado Road Bridge & Road Widening 427,780 26,260 401,520 - Higuera Street Paving 24,634 5,299 - 19,335
Transportation Safety & Operations 59,119 16,930 - 42,189 Marsh at Santa Rosa Replacement 74,250 32,531 2,011 39,709 Traffic Safety Implementation 149,469 14,440 16,390 118,639 Railroad Safety Trail Taft to Pepper 156,706 34,956 121,750 0 Broad Street Corridor Access Improvements 35,000 5,402 - 29,598 Neighborhood Traffic Improvements 179,756 1,410 9,252 169,094 11,723,238 4,791,725 1,756,116 5,175,396
Open Space/Natural Areas Preservation and Maintenance
Urban Forest Maintenance 453,782 721,610 75,168 192,660 Open Space - Annual Asset Maintenance 72,482 166,395 4,137 89,776 Laguna Lake Dredging 634,918 653,003 - 18,085
Open Space Acquisition 29,395 278,597 18,752 230,450
1,190,577 1,819,605 98,057 530,971
Other Services and Projects
Fleet Replacement: Public Works 631,000 9,289 59,619 562,092 Roundabout Public Art Installations 300,000 217,500 - 82,500 Parking Lot Maintenance - Annual Asset Maintenance 279,583 109,577 - 170,006 Multi-space On-Street Pay Stations 17,000 17,000 - -
Fleet Services Vehicle Lift 9,616 9,616 - -
Capital Projects Engineering Staff (6 FTE) 500,000 412,928 - 87,072 Multisite Energy Management 137,980 137,980 - -
Electric Vehicle Charing Stations 100,000 - 30,053 69,947 1,975,179 913,890 89,672 971,617
Total Capital Expenditures $ 25,834,735 $ 11,092,269 $ 2,905,025 $ 11,837,441 Local Transaction Tax Measure Funding Schedule, continued For the Fiscal Year Ended June 30, 2022
City of San Luis Obispo
Local Revenue Measure Funded Projects
Includes Legacy Projects and projects funded by Capital Reserve 125

126

City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2022
The City maintains the following nonmajor governmental funds:

Special Revenue Funds
The City has established the following ten special revenue funds in order to account for the proceeds from revenue sources that are restricted or committed to expenditures for specified purposes. Budgets are prepared using the modified accrual basis of accounting consistent with U.S. generally accepted accounting principles.

Downtown Business Improvement District (BID) Fund. This fund has been established to account for the receipt of a surcharge derived from a supplemental assessment upon businesses within the Downtown Business Improvement District’s boundaries.

Pursuant to the provisions of the Municipal Code, this surcharge is equal to $150.00 per year. Expenditures from the fund are limited to four basic purposes: decorating public places within the downtown; promoting public events in the downtown core; promoting trade activities; and improving parking in the downtown core.

Transportation Development Act (TDA) Fund. The State of California has designated 1/4% of the sales tax levied statewide for local transportation purposes. Funding for this program was provided during the 1971 legislative session with the enactment of the Transportation Development Act, which extended the State sales tax to include purchases of gasoline. Revenues allocated to the City of San Luis Obispo under this program are divided into two categories: Article 3 funds, which are restricted for the improvement and maintenance of street systems including pedestrian and bicycle facilities; and Article 4 funds, which are restricted for public transit systems and are recorded directly in the Transit Fund. Under the City's Financial Plan policies, all TDA Article 3 revenues are allocated for alternative transportation purposes. The purpose of this fund is to account for these revenues.

Tourism Business Improvement District (BID) Fund. This fund has been established to account for the receipt of a surcharge derived from assessments upon the lodging establishments within the City. The surcharge is equal to 2% of gross room rents.

Expenditures from the fund are limited to the marketing and promotion of tourism.

Gas Tax Fund. Portions of the tax rate per gallon levied by the State of California on all gasoline purchases are allocated to cities throughout the State on a population basis. These funds are restricted for expenditures by the State of California for street-related purposes only. Under the City's Financial Plan policies, all gas tax revenues are transferred to the General Fund for street maintenance purposes.

Community Development Block Grant (CDBG) Fund. This fund has been established to account for federal funds received by the City specifically to benefit low and moderate income persons, aid in the elimination of blight, and meet other community development needs as allowed by block grant regulations.

Law Enforcement Grants Fund. This fund has been established to account for public safety grant funds.

Public Arts Contribution Fund. Public contributions to the public art program are accounted for in this fund along with the expenditures for public art projects funded by this revenue source.

SB1 Road Repair Fund. This fund has been established to account for stable and ongoing funding for maintenance and improvements to transportation infrastructure as provided through Senate Bill 1 (2017), the Road Repair and Accountability Act.

SB1186 CASP Certify Fund. This fund has been established as Senate Bill 1186 (2012) requires local agencies to collect an additional fee when issuing a permit for the purpose of increasing certified access specialist (CASp) services and compliance with 127

City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2022

construction-related accessibility requirements. The first priority is to spend the funds on the training and retention of CASps in order to meet the needs of the public in the jurisdiction. The funds may also be spent on activities or programs that facilitate accessibility compliance.

Capital Projects Funds
The following eleven capital project funds are used by the City to account for the financial resources used in the construction or acquisition of major capital facilities or equipment (with the exception of those financed primarily through proprietary funds). Budgets are prepared using the modified accrual basis of accounting consistent with U.S. generally accepted accounting principles on a multiyear project basis. Accordingly, budgetary comparisons for the capital projects funds are not presented in the accompanying other supplementary information.

Parkland Development Fund - Quimby. This fund was established to account for parkland in-lieu fees in accordance with the AB 1191 Act, also known as the Quimby Act; it authorizes the City to require residential subdivisions to dedicate land for parks or pay fees in lieu of dedication. Impact fees may be collected to pay for park land (for projects not involving a subdivision), park improvements, community centers, recreation facilities, trails, open space, etc.

Open Space Protection Fund. This fund was established to account for projects funded as part of the City’s open space protection program to enhance open space and agricultural conservation on lands within and surrounding the City, improve passive recreational and nature study opportunities, and restore and enhance wildlife habitat. Projects in this fund will be financed with General Fund contributions, outside contributions, and State and Federal grants.

Airport Area Impact Fee Fund. This fund was established to account for interim annexation fees collected for the specific plan and related infrastructure master plans for annexing the airport area to the City.

Los Osos Valley Road (LOVR) Sub-Area Fee Fund. This fund was established to account for the LOVR add-on impact fee created for the expansion of capacity for the LOVR interchange at US 101 for construction, project management, and inspection. Though the project has been completed, the City has an existing reimbursement agreement with Costco Wholesale Corporation for improvements already constructed at the LOVR interchange.

Fleet Replacement Fund. This fund was established to account for the financing and replacement of vehicles for all General Fund programs of the City. Financing is primarily provided through operating transfers from the General Fund as well as from interest earnings and sales of surplus property.

Information Technology Replacement Fund. This fund was established in FY 12-13 to account for the financing and replacement of information technology for all General Fund programs of the City. Financing is primarily provided through operating transfers from the General Fund as well as from interest earnings.

Major Facility Replacement Fund. This fund accounts for the financing and replacement of major facilities for all General Fund programs of the City. Financing is primarily provided through operating transfers from the General Fund as well as from interest earnings.

Affordable Housing Program Fund. This fund accumulates revenues from inclusionary housing fees for capital projects related to 128

City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2022

affordable housing programs and projects.

Transportation Impact Fee Fund. This fund was established to account for construction projects related to transportation facilities and travel lanes within the City that will be financed primarily with transportation impact fees.

Infrastructure Fund. This fund was established to provide financing to infrastructure projects that have a wide community benefit.

Financing is primarily provided through operating transfers from the General Fund.

Parkland Development Impact Fee – Citywide Fund. This fund was created to account for impact fees that were established for the purpose of acquisition and improvement of community parks and existing park facilities intended for access and use by the entire city.

OASP Park Development Fund. This fund was established to account for impact fees created for the purpose of acquisition and improvement of community parks and existing park facilities intended for access and use by the entire city but more specifically by the Orcutt Area residents as the location of this park projects are in the Orcutt Area.

MASP Park Development Fund. This fund was established to account for impact fees created for the purpose of acquisition and improvement of community parks and existing park facilities intended for access and use by the entire city but more specifically by the Margarita Area residents as the location of this park projects are in the Margarita Area.

OASP Transportation Impact Fee Fund. This fund was established to account for construction projects that will be financed primarily with transportation impact fees within the Orcutt Area Specific Plan in accordance with its Development Agreement Fire Impact Fee Fund. This fund was established to account for fire department related construction projects that will be financed primarily with public safety development impact fees.

Police Impact Fee Fund. This fund was established to account for police department related construction projects that will be financed primarily with public safety development impact fees.

Park Improvement Impact Fee – Citywide Fund. This fund was established to account for construction projects related to park improvements that will be financed primarily with park in-lieu fees.

SLR Transportation Impact Fee. This fund was established to account for construction projects that will be financed primarily with transportation impact fees within the San Luis Ranch development, in accordance with its Development Agreement.

Public Safety Equipment Replacement Fund. This fund accounts for the financing and replacement of public safety equipment.

Financing is primarily provided through operating transfers from the General Fund as well as from interest earnings.

Debt Service Fund
The City has established one debt service fund to account for the payment and accumulation of resources related to governmental activities long-term debt principal and interest for the following debt issues. Budgets are prepared using the modified accrual basis of accounting consistent with U.S. generally accepted accounting principles. The following governmental activity debt issuances are serviced by this fund.
129

City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2022

Capital Improvement Board 2012 Refunding Lease Revenue Bonds. In May 2012 the Board issued $5,050,000 of 2012 Lease Revenue Refunding Bonds. These bonds were issued to refinance the outstanding 2001 Lease Revenue Bonds, Series C, which will be redeemed on December 1, 2029. The 2001 bonds were used to purchase property and build athletic fields; purchase property for police station expansion; purchase Downtown Plan properties.

The Board has entered into a lease agreement with the City under which the City is responsible for making lease payments to fund the annual debt service requirements.

Public Financing Authority 2014 Lease Revenue Bonds. In 2014 the Authority issued $7,580,000 of 2014 Lease Revenue Bonds.

These bonds were issued to finance the expansion of the Los Osos Valley Road interchange at U.S. 101. Debt service related to the interchange is recorded in the Debt Service Fund.

The Authority has entered into a lease agreement with the City under which the City is responsible for making lease payments to fund the annual debt service requirements.
2017 Fire Engine and Street Sweeper. Lease-purchase financing was obtained in order to purchase a fire engine and street sweeper.

Debt service obligations are recorded in the Debt Service Fund. 2018 Street Sweeper. Lease-purchase financing was obtained in order to purchase a street sweeper. Debt service obligations are recorded in the Debt Service Fund.
2018 Fire Truck. Lease-purchase financing was obtained in order to purchase a fire truck. Debt service obligations are recorded in the Debt Service Fund.

Public Financing Authority 2018 Lease Revenue Bonds. In 2018 the Authority issued $11,072,775 of 2018 Lease Revenue Refunding Bonds. These bonds were issued to refinance the outstanding 2005 Revenue Bonds, 2006 Lease Revenue Bonds, and 2009 Lease Revenue Bonds. The original bonds were used to accomplish several high priority capital improvement projects including the headquarters fire station, seismic safety and HVAC improvements to City Hall, Mission Plaza expansion, and various properties and street lighting system purchases. Further, the bonds were used to purchase a parking structure and office building and to the finance the construction of the Public Safety Communications and Emergency Operations Center project.

The Authority has entered into a lease agreement with the City under which the City is responsible for making lease payments to fund the annual debt service requirements.
2020 Motorola Radio Lease. Lease-purchase financing was obtained in order to purchase new Motorola radios and related equipment for public safety departments. Debt service obligations are recorded in the Debt Service Fund.

130

131

Downtown
BID
Transportation
Development
Act (TDA) Tourism BID Gas Tax
Assets
Cash and investment $ 29 $ 8,681 $ 1,113,272 $ -
Accounts receivable - 257,536 - -
Tax receivable - - - -
Accrued interest receivable - - 1,982 -
Cash held by fiscal agent - - - -
Loans receivable - - - -
Total assets $ 29 $ 8,681 $ 1,372,790 $ -
Liabilities, Deferred Inflows of
Resources and Fund Balance
Liabilities:

Accounts payable - $ - $ 220,873 $ - $
Accrued liabilities - - 4,036 -
Unearned revenue - - - -
Total liabilities - - 224,909 -
Deferred Inflows of Resources:

Unavailable revenue - - - -
Fund balance:

Nonspendable - 8,681 - -
Restricted for:

Debt service - - - -
Transportation projects - - - -
Affordable housing programs - - - -
Impact fee programs - - - -
Parkland development programs - - - -
Public art programs - - - -
Tourism programs - - 1,147,881 -
Public safety program - - - -
Assigned to:

Contingency fund - - - -
Subsequent years expenditures 29 - - -
Total fund balance 29 8,681 1,147,881 -
$ 8,681 29 $ 1,372,790 $ - $
City of San Luis Obispo, California
Combining Balance Sheets
Nonmajor Governmental Funds
June 30, 2022
Special Revenue Funds
Total liabilities, deferred inflows of resources, and fund balance
132

Community
Development
Block Grant
(CDBG)
Law
Enforcement
Grants
Public Art
Contributions
SB1 Road
Repair
SB1186 CASP
Certify
Parkland
In-Lieu Fee
Open Space
Protection
$ 55,000 108,574 $ 804,244 $ 740,408 $ 111,845 $ 3,117,272 $ 12,920 $ 65,221 - - - - - -
- - - 165,443 - - -
648,482 - 1,433 1,277 211 12,429 29
- - - - - - -
1,112,944 - - - 143,044 - -
$ 1,870,000 $ 120,221 $ 805,677 $ 907,128 $ 112,056 $ 3,272,745 $ 12,949 $ 52,300 - $ $ 7,639 $ - $ 15,945 - $ $ -
- - - - - - -
- 863 - - - - -
53,163 - 7,639 - - 15,945 -
1,761,425 - - - 149,602 - -
- - - - - - -
- - - - - - -
- - 907,128 - 112,056 - -
108,575 - - - - - -
- - - - - - -
- - - - 3,107,198 - -
- 798,038 - - - - -
- - - - - - -
67,058 - - - - - -
- - - - - - -
- - - - - 12,949 -
108,575 67,058 798,038 907,128 112,056 3,107,198 12,949 $ 1,870,000 $ 120,221 $ 805,677 $ 907,128 $ 112,056 $ 3,272,745 $ 12,949 Special Revenue Funds Capital Projects Funds
133

City of San Luis Obispo, California
Combining Balance Sheets
Nonmajor Governmental Funds, continued
Airport Area
Impact Fee
LOVR SubArea Fee Fleet
Replacement
Info Tech
Replacement
Assets
Cash and investment $ 674,261 $ 583,299 $ 2,612,864 $ 3,886,420 Accounts receivable - - - -
Tax receivable - - - -
Accrued interest receivable 1,275 1,066 3,587 -
Cash held by fiscal agent - - - -
Loans receivable - - - -
Total assets $ 675,536 $ 584,365 $ 2,616,451 $ 3,886,420 Liabilities, Deferred Inflows of
Resources and Fund Balance
Liabilities:

Accounts payable - $ - $ 1,896 $ 6,155 $
Accrued liabilities - - - -
Unearned revenue - - - 600,000
Total liabilities - - 1,896 606,155
Deferred Inflows of Resources:

Unavailable revenue - - - -
Fund balance:

Nonspendable - - - -
Restricted for:

Debt service - - - -
Transportation projects - - - -
Affordable housing programs - - - -
Impact fee programs 675,536 584,365 - -
Parkland development programs - - - -
Public art programs - - - -
Tourism programs - - - -
Public safety program - - - -
Assigned to:

Contingency fund - - 500,000 400,000
Subsequent years expenditures - - 2,114,555 2,880,265
Total fund balance 675,536 584,365 2,614,555 3,280,265
$ 584,365 675,536 $ 2,616,451 $ 3,886,420 $
June 30, 2022
Total liabilities, deferred inflows of resources, and fund balance
Capital Projects Funds
134

Affordable
Housing
Transportation
Impact Fee Infrastructure
Public Safety
Development
Impact Fee
Parkland
Development
Impact FeeCitywide OASP Park MASP Park
$ 7,793,366 3,812,404 $ 13,988,177 $ - $ 656,891 $ 2,039,747 $ 1,665,767 $ - - - - - - -
- - - - - - -
114,635 1,806,969 - - 59,515 3,804 3,148
- - - - - - -
1,164,368 9,001,843 - - 446,826 - -
$ 14,621,216 $ 9,072,369 $ 13,988,177 $ 1,163,232 - $ $ 2,043,551 $ 1,668,915 $ 776,798 - $ $ - $ - $ - $ - $ -
- - - - - - -
2,964,467 9,200,000 - - - - -
2,964,467 776,798 9,200,000 - - - -
1,872,010 1,263,705 - 505,203 - - -
- - - - - - -
- - - - - - -
7,031,866 - - - - - -
9,784,739 - - - - - -
- - - 658,029 - 2,043,551 1,668,915
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- 4,788,177 - - - - -
9,784,739 7,031,866 4,788,177 658,029 - 2,043,551 1,668,915 $ 14,621,216 $ 9,072,369 $ 13,988,177 $ 1,163,232 - $ $ 2,043,551 $ 1,668,915 Capital Projects Funds
135

City of San Luis Obispo, California
Combining Balance Sheets
Nonmajor Governmental Funds, continued
OASP
Transportation
Impact Fee
Fire Impact
Fee
Police Impact
Fee
Park
Improvement
Impact FeeCitywide
Assets
Cash and investment $ 1,389,630 $ 199,861 $ 245,017 $ 1,006,860 Accounts receivable - - - -
Tax receivable - - - -
Accrued interest receivable 2,625 7,383 2,812 3,137
Cash held by fiscal agent - - - -
Loans receivable 78,276 - 56,781 82,807
Total assets $ 1,392,255 $ 285,520 $ 304,610 $ 1,092,804 Liabilities, Deferred Inflows of
Resources and Fund Balance
Liabilities:

Accounts payable - $ - $ - $ - $
Accrued liabilities - - - -
Unearned revenue - - - -
Total liabilities - - - -
Deferred Inflows of Resources:

Unavailable revenue - 85,301 59,164 84,189
Fund balance:

Nonspendable - - - -
Restricted for:

Debt service - - - -
Transportation projects - - - -
Affordable housing programs - - - -
Impact fee programs 1,392,255 200,219 245,446 1,008,615 Parkland development programs - - - -
Public art programs - - - -
Tourism programs - - - -
Public safety program - - - -
Assigned to:

Contingency fund - - - -
Subsequent years expenditures - - - -
Total fund balance 1,392,255 200,219 245,446 1,008,615
$ 285,520 1,392,255 $ 304,610 $ 1,092,804 $
June 30, 2022
Capital Projects Funds
Total liabilities, deferred inflows of resources, and fund balance
136

SLR
Transportation
Impact Fee
Public Safety
Equipment
Replacement
Fund Debt Service
Total
Nonmajor
Governmental
Funds
$ 805,012 458,142 $ 2,118,745 $ 50,008,708 $
- - - 322,757
- - - 165,443
- 713 - 2,676,512
- - 421,510 421,510
- - - 12,086,889
$ 805,012 458,855 $ 2,540,255 $ 65,681,819 $
$ 7,222 - $ - $ 1,088,828 $
- - - 4,036
- - - 12,765,330
7,222 - - 13,858,194
- - - 5,780,599
- - - 8,681
- - 2,540,255 2,540,255
- - - 8,051,050
- - - 9,893,314
- 458,855 - 8,935,786
- - - 3,107,198
- - - 798,038
- - 1,147,881 -
797,790 - 864,848 -
- - 900,000 -
- - 9,795,975 -
458,855 797,790 2,540,255 46,043,026
$ 458,855 $ 805,012 $ 2,540,255 $ 65,681,819
Capital Projects Funds
137

Downtown
BID
Transportation
Development
Act (TDA) Tourism BID Gas Tax
Revenues:

Use of money and property - $ - $ (23,302) $ - $
Subventions and grants - 53,681 - 1,130,064
Charges for services 227,202 - 2,127,375 -
Other revenues - - 7,616 -
Total revenues 227,202 53,681 2,111,689 1,130,064
Expenditures:

Current:

General Government - - - -
Public safety - - - -
Transportation - - - -
Leisure, cultural and social services - - - -
Community development 222,141 - 1,604,475 -
Debt service:

Principal - - - -
Interest and fiscal charges - - - -
Capital:

General Government - - - -
Public safety - - - -
Transportation - - - -
Leisure, cultural and social services - - - -
Total expenditures 222,141 - 1,604,475 -
Excess (deficiency) of revenues over
(under) expenditures 5,061 53,681 507,214 1,130,064
Other financing sources (uses):

Transfers in - - - -
Transfers out - (45,000) (37,887) (1,130,064)
Total other financing
sources (uses) - (45,000) (37,887) (1,130,064)
Net change in fund balance 5,061 8,681 469,327 -
- (5,032) 678,554 -
Fund balance (deficit),
end of year $ 8,681 29 $ 1,147,881 $ - $
Fund balance, beginning of year,
as restated
Special Revenue Funds
City of San Luis Obispo, California
Combining Statement of Revenues, Expenditures, and
Changes in Fund Balances
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2022
138

Community
Development
Block Grant
(CDBG)
Law
Enforcement
Grants
Public Art
Contributions
SB1 Road
Repair
SB1186 ASP
Certify
Parkland
In-Lieu Fee
Open Space
Protection
$ - - $ (16,319) $ (23,626) $ (2,609) $ (84,394) $ (467) $ 165,983 - - 935,475 - - -
802 - 99,698 - 28,977 117,604 -
- 36,482 - - - 8,915 -
166,785 36,482 83,379 911,849 26,368 42,125 (467)
- - - - - - -
163,145 - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- - 914,730 - - - -
- 296,242 - - 340,395 - -
163,145 - 296,242 914,730 340,395 - -
36,482 3,640 (212,863) (2,881) 26,368 (298,270) (467)
- 442,500 - - - - -
(36,482) - - - - - (6,900)
(36,482) 442,500 - - - - (6,900)
- 3,640 229,637 (2,881) 26,368 (298,270) (7,367)
108,575 63,418 568,401 910,009 85,688 3,405,468 20,316
$ 108,575 $ 67,058 $ 798,038 $ 907,128 $ 112,056 $ 3,107,198 $ 12,949 Special Revenue Funds Capital Projects Funds
139

City of San Luis Obispo, California
Combining Statement of Revenues, Expenditures, and
Changes in Fund Balances
Nonmajor Governmental Funds, continued
For the Fiscal Year Ended June 30, 2022
Airport Area
Impact Fee
LOVR SubArea Fee Fleet
Replacement
Info Tech
Replacement
Revenues:

Use of money and property (21,171) $ (12,091) $ (34,561) $ (5,227) $ Subventions and grants - - - -
Charges for services 1,508 126,726 - 179,677
Other revenues - - 53,307 -
Total revenues (19,663) 114,635 18,746 174,450
Expenditures:

Current:

General Government - - - -
Public safety - - - -
Transportation - - - -
Leisure, cultural and social services - - - -
Community development - - - -
Debt service:

Principal - - - -
Interest and fiscal charges - - - -
Capital:

General Government - - 10,853 505,982
Public safety - - 232,435 -
Transportation 201,495 - - -
Leisure, cultural and social services - - - -
Total expenditures 201,495 - 243,288 505,982
Excess (deficiency) of revenues over
(under) expenditures (221,158) 114,635 (224,542) (331,532) Other financing sources (uses):

Transfers in - - 1,615,000 1,075,640
Transfers out - - - (208,290)
Total other financing
sources (uses) - - 1,615,000 867,350
Net change in fund balance (221,158) 114,635 1,390,458 535,818 Fund balance, beginning of year, as restated 469,730 896,694 1,224,097 2,744,447 Fund balance (deficit),
end of year $ 675,536 $ 584,365 $ 2,614,555 $ 3,280,265 Capital Projects Funds
140

Affordable
Housing
Transportation
Impact Fee Infrastructure
Public Safety
Development
Impact Fee
Parkland
Development
Impact FeeCitywide OASP Park MASP Park
$ (236,024) (37,152) $ (4,774) $ - $ (13,138) $ (51,551) $ (38,915) $ - - 86,583 - - - -
411,875 1,715,909 - 121,734 - 130,976 74,989
153,171 - - - - - -
527,894 1,479,885 81,809 108,596 - 79,425 36,074
- - - - - - -
- - - - - - -
312,156 - - - - - -
- - - - 284,404 - -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
3,380,160 - 9,422 - - - -
- - - - - - -
3,692,316 - 9,422 - 284,404 - -
527,894 (2,212,431) 72,387 108,596 - (204,979) 36,074
- 2,757,545 - - - - -
(87,000) (280,000) (476,971) (188,355) - - -
(87,000) (280,000) 2,280,574 (188,355) - - -
440,894 (2,492,431) 2,352,961 (188,355) 108,596 (204,979) 36,074 9,343,845 9,524,297 2,435,216 188,355 549,433 2,248,530 1,632,841 $ 9,784,739 $ 7,031,866 $ 4,788,177 $ 658,029 - $ $ 2,043,551 $ 1,668,915 Capital Projects Funds
141

City of San Luis Obispo, California
Combining Statement of Revenues, Expenditures, and
Changes in Fund Balances
Nonmajor Governmental Funds, continued
For the Fiscal Year Ended June 30, 2022
OASP
Transportation
Impact Fee
Fire Impact
Fee
Police Impact
Fee
Park
Improvement
Impact FeeCitywide
Revenues:

Use of money and property (29,353) $ (16,497) $ (19,445) $ (20,015) $ Subventions and grants - - - -
Charges for services 728,999 64,597 89,876 190,868
Other revenues - - - -
Total revenues 699,646 48,100 70,431 170,853
Expenditures:

Current:

General Government - - - -
Public safety - - - -
Transportation - - - -
Leisure, cultural and social services - - - -
Community development - - - -
Debt service:

Principal - - - -
Interest and fiscal charges - - - -
Capital:

General Government - - - -
Public safety - - - -
Transportation - - - -
Leisure, cultural and social services - - - -
Total expenditures - - - -
Excess (deficiency) of revenues over
(under) expenditures 699,646 48,100 70,431 170,853
Other financing sources (uses):

Transfers in - 85,996 102,359 -
Transfers out - - - -
Total other financing
sources (uses) - 85,996 102,359 -
Net change in fund balance 699,646 134,096 172,790 170,853 Fund balance, beginning of year, as restated 66,123 692,609 72,656 837,762 Fund balance (deficit),
end of year $ 200,219 1,392,255 $ 245,446 $ 1,008,615 $ Capital Projects Funds
142

SLR
Transportation
Impact Fee
Public Safety
Equipment
Replacement
Fund Debt Service
Total
Nonmajor
Governmental
Funds
$ - (2,187) $ 21 $ (692,797) $
- - - 2,371,786
- 457,690 - 6,897,082
- - - 259,491
- 455,503 21 8,835,562
- - 7,440 7,440
101,554 - - 264,699
- - - 312,156
- - - 284,404
- - - 1,826,616
- - 1,467,402 1,467,402
- - 774,747 774,747
- - - 516,835
- - - 232,435
6,648 - 4,512,455 -
- - 636,637 -
6,648 101,554 2,249,589 10,835,826
448,855 (101,554) (2,249,568) (2,000,264)
10,000 929,344 2,214,456 9,232,840
(30,000) - (2,526,949) -
10,000 899,344 2,214,456 6,705,891
458,855 797,790 (35,112) 4,705,627
- 2,575,367 - 41,337,399
$ 458,855 $ 797,790 $ 2,540,255 $ 46,043,026
Capital Projects Funds
143

Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Charges for services
Assessments 245,000 $ 245,000 $ 227,202 $ $ (17,798)
Total Revenues 245,000 245,000 227,202 (17,798)
Expenditures:

Current
Community development 245,000 245,000 222,141 22,859
Total Expenditures 245,000 245,000 222,141 22,859
Excess of Revenues Over Expenditures - 5,061 - 5,061
Net Change in Fund Balance - 5,061 - 5,061
Fund Balance, Beginning of Year (5,032) (5,032) (5,032) - Fund Balance, End of Year $ (5,032) $ (5,032) $ 29 $ 5,061 Downtown Business Improvement District Fund
City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual June 30, 2022
Budget
144

City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual June 30, 2022
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Subventions and grants 45,900 $ 45,900 $ $ 53,681 $ 7,781 Total Revenues 45,900 45,900 53,681 7,781
Excess of Revenues Over Expenditures 45,900 45,900 53,681 7,781 Other Financing Uses:

Operating transfers out (45,900) (97,129) (45,000) 52,129 Net Change in Fund Balance (51,229) - 8,681 59,910
Fund Balance, Beginning of Year - - - -
Fund Balance, End of Year $ (51,229) - $ $ 8,681 $ 59,910 Transportation Development Act (TDA)
Budget
145

City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual June 30, 2022
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Use of money and property 1,400 $ 1,400 $ $ (23,302) $ (24,702) Assessments 1,442,600 1,442,600 2,127,375 684,775
Total Revenues 1,444,000 1,444,000 2,111,689 667,689
Expenditures:

Current
Community development 1,451,127 1,858,227 1,604,475 253,752 Total Expenditures 1,451,127 1,858,227 1,604,475 253,752 Excess of Revenues Over (Under) Expenditures (7,127) (414,227) 507,214 921,441 Other Financing Uses:

Operating transfers out (28,852) (28,852) (37,887) (9,035) Net Change in Fund Balance (35,979) (443,079) 469,327 912,406

Fund Balance, Beginning of Year 678,554 678,554 678,554 - Fund Balance, End of Year $ 642,575 $ 235,475 $ 1,147,881 $ 912,406 Tourism Business Improvement District Fund
Budget
146

City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual June 30, 2022
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Subventions and grants 1,223,937 $ 1,223,937 $ $ 1,130,064 $ (93,873) Total Revenues 1,223,937 1,223,937 1,130,064 (93,873)
Excess of Revenues Over Expenditures 1,223,937 1,223,937 1,130,064 (93,873) Other Financing Uses:

Operating transfers out (1,223,937) (1,223,937) (1,130,064) 93,873 Net Change in Fund Balance - - - -

Fund Balance, Beginning of Year - - - -
Fund Balance, End of Year $ - $ - $ - $ -
Gas Tax
Budget
147

City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual June 30, 2022
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Subventions and grants - $ - $ $ - $ -
Total Revenues - 36,482 - 36,482
Expenditures:

Current
Community development - - - -
Total Expenditures - - - -
Excess of Revenues Over (Under) Expenditures - 36,482 - 36,482 Other Financing Uses:

Operating transfers out - (36,482) - (36,482)
Net Change in Fund Balance - - - -

Fund Balance, Beginning of Year 108,575 108,575 108,575 - Fund Balance, End of Year $ 108,575 $ 108,575 $ 108,575 $ - Community Development Block Grant (CDBG) Fund
Budget
148

City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual June 30, 2022
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Subventions and grants 113,000 $ 113,000 $ $ 165,983 $ 52,983 Charges for services 2,142 - 802 802
Total Revenues 115,142 113,000 166,785 53,785
Expenditures:

Public Safety 36,043 - 163,145 (127,102)
Total Expenditures 36,043 - 163,145 (127,102)
Excess of Revenues Over (Under) Expenditures 115,142 76,957 3,640 (73,317) Other Financing Uses:

Operating transfers out - - - -
Net Change in Fund Balance 115,142 76,957 3,640 (73,317)

Fund Balance, Beginning of Year 63,418 63,418 63,418 -
Fund Balance, End of Year $ 178,560 $ 140,375 $ 67,058 $ (73,317) Budget
Law Enforcement Grants Fund
149

City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual June 30, 2022
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Use of money and property 2,100 $ 2,100 $ $ (16,319) $ (18,419) Other revenues 15,000 15,000 99,698 84,698
Total Revenues 17,100 17,100 83,379 66,279
Expenditures:

Capital Projects 442,500 522,278 296,242 226,036
Total Expenditures 442,500 522,278 296,242 226,036
Excess of Revenues Over (Under) Expenditures (425,400) (505,178) (212,863) 292,315 Other Financing Uses:

Operating transfers in 442,500 442,500 -
Net Change in Fund Balance (425,400) (62,678) 229,637 292,315

Fund Balance, Beginning of Year 568,401 568,401 568,401 - Fund Balance, End of Year $ 143,001 $ 505,723 $ 798,038 $ 292,315 Budget
Public Art Contributions Fund
150

City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual June 30, 2022
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Use of money and property - $ - $ (23,626) $ $ (23,626) Subventions and grants 915,000 915,000 935,475 20,475
Total Revenues 915,000 915,000 911,849 (3,151)
Expenditures:

Capital Projects 914,731 1,470,525 914,730 555,795
Total Expenditures 914,731 1,470,525 914,730 555,795
Excess of Revenues Over (Under) Expenditures 269 (555,525) (2,881) 552,644 Net Change in Fund Balance 269 (555,525) (2,881) 552,644

Fund Balance, Beginning of Year 910,009 910,009 910,009 - Fund Balance, End of Year $ 910,278 $ 354,484 $ 907,128 $ 552,644 Budget
SB1 Road Repair Fund
151

City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual June 30, 2022
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Use of money and property - $ - $ (2,609) $ $ (2,609)
Charges for services - 28,977 - 28,977
Total Revenues - 26,368 - 26,368
Net Change in Fund Balance (85,461) (85,461) 26,368 111,829

Fund Balance, Beginning of Year 85,688 85,688 85,688 -
Fund Balance, End of Year $ 227 $ 227 $ 112,056 $ 111,829 SB1186 CASP Certify
Budget
152

City of San Luis Obispo, California
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual June 30, 2022
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Use of money and property - $ - $ $ 21 $ 21
Total Revenues - - 21 21
Expenditures:

General Government - 7,440 - (7,440)
Principal 1,453,459 1,453,459 1,467,402 (13,943)
Interest and fiscal charges 760,996 760,996 774,747 (13,751) Total Expenditures 2,214,455 2,214,455 2,249,589 (35,134) Excess of Revenues Over (Under) Expenditures (2,214,455) (2,214,455) (2,249,568) (35,113) Other Financing Uses:

Operating transfers in 2,214,456 2,214,456 2,214,456 -
Total other Financing Uses: 2,214,456 2,214,456 2,214,456 - Net Change in Fund Balance 1 (35,112) 1 (35,113)

Fund Balance, Beginning of Year 2,575,367 2,575,367 2,575,367 - Fund Balance, End of Year $ 2,575,368 $ 2,575,368 $ 2,540,255 $ (35,113) Budget
Debt Service Fund
153

154

City of San Luis Obispo, California
Custodial Funds
For the Fiscal Year Ended June 30, 2022
The City of San Luis Obispo has established the following agency funds, which are used to account for funds held by the City as an agent for private donations and programs operated jointly with other local agencies:

Whale Rock Fund. This fund was established to account for the financial activities of the Whale Rock Commission, a joint venture providing water service to the City, the California Polytechnic State University, and the California Men's Colony.

Jack House Fund. This fund was established to account for the financial activities of the Jack House Committee, which includes the rehabilitation and use of a use of the historic Jack House property.

Hazardous Materials Task Force Fund. This fund was established to account for the financial activities of the County task force.

General Agency Fund. This fund was established to account for a broad category of funds, including donations, provided to the City to be utilized for specific purposes.

Boysen Ranch Conservation Easement Fund. This fund was established to account for contributions toward obtaining a conservation easement on the Boysen Ranch property.

Cable Television Public, Educational and Government Funds (PEG) for the City of San Luis Obispo, San Luis Coastal Unified School District (SLCUSD) and San Luis Obispo County Public Access, Inc. Public Access Television (PAT). These funds account for collections by Charter Communications from its customers for PEG access equipment and facilities. The City of San Luis Obispo, SLCUSD and PAT annually receive equal shares of collections, restricted for approved uses as stipulated in the cable franchise agreement.

San Luis Ranch CFD Fund. This fund was established to account for the financial activities of the San Luis Ranch Community Facilities District (CFD). The CFD is the City's first Mello-Roos district. Property taxes collected on properties within the CFD will be used to pay for debt service on the related infrastructure constructed within the district. 155

Hazardous
Whale Jack Materials Task
Rock Fund House Fund Force Fund
ASSETS
Cash and investments $ 4,443,600 $ 18,948 $ 149,534
Receivables:

Accounts 16,549 - -
Interest 8,433 36 288
Prepaid items - - -
Capital assets 789,639 - -
Total assets 5,258,221 18,984 149,822

LIABILITIES
Accounts payable 48,122 - 2,477
Compensated absence 54,086 - -
Accrued Salaries 10,631 - 256
Other liabilities 2,000 - -
Total liabilities 114,839 - 2,733

NET POSITION
Restricted for
Individuals, organizations, and other governments 5,143,382 18,984 147,089 Total net position $ 5,143,382 $ 18,984 $ 147,089
City of San Luis Obispo
Combining Statement of Fiduciary Net Position
Custodial Funds
For the year ended June 30, 2022
156

General Boysen Ranch Total
Agency Conservation PEG City of San Luis Ranch PEG Custodial Fund Easement San Luis Obispo CFD SLCUSD Funds
$ 3,052,972 $ 407,308 $ 115,989 $ 145,667 $ 395,351 $ 8,729,369 - - - - - 16,549
- 770 213 308 741 10,789
- - - - - -
- - - - - 789,639
3,052,972 408,078 116,202 145,975 396,092 9,546,346
25,302 2,844 - - 307,160 385,905
- - - - - 54,086
- - - - - 10,887
- - - - - 2,000
25,302 2,844 - - 307,160 452,878
3,027,670 405,234 116,202 145,975 88,932 9,093,468
$ 3,027,670 $ 405,234 $ 116,202 $ 145,975 $ 88,932 $ 9,093,468 157

Hazardous
Whale Jack Materials Task
Rock Fund House Fund Force Fund
ADDITIONS:

Assessment revenue $ - $ - $ -
Charges for services 949,126 - 65,000
Charges for public programming - - -
Contribution from developers - - -
Other revenue 1,552,897 319 9
Use of money and property (107,364) (470) (4,377)
Total additions 2,394,659 (151) 60,632
DEDUCTIONS:

Administration expenses 186,697 - 12,679
Contractual services 1,004,354 - 24,336
Materials and supplies 77,602 - 11,842
Public programming - - -
Use of developer deposits - - -
Depreciation 63,459 - -
Total deductions 1,332,112 - 48,857
Net increase (decrease) in fiduciary net position (151) 1,062,547 11,775 NET POSITION:

Beginning of year, as restated 19,135 4,080,835 135,314 End of year 5,143,382 $ 18,984 $ 147,089 $
City of San Luis Obispo
Combining Statement of Changes in Fiduciary Net Position Custodial Funds
For the year ended June 30, 2022
158

General Boysen Ranch Total
Agency Conservation PEG City of San Luis Ranch PEG Custodial Fund Easement San Luis Obispo CFD SLCUSD Funds
$ - $ - $ - $ 152,848 $ - $ 152,848
- - - - 1,014,126 -
- - - - 39,951 39,951
1,704,858 - - - 1,704,858 -
- - 39,766 55,000 - 1,647,991
- (10,273) (3,587) (2,633) (9,276) (137,980)
1,704,858 (10,273) 36,179 205,215 30,675 4,421,794
- - - 59,240 - 258,616
- 11,739 - - 307,160 1,347,589
- - - - - 89,444
- - 65,750 - - 65,750
416,978 - - - - 416,978
- - - - - 63,459
416,978 11,739 65,750 59,240 307,160 2,241,836
1,287,880 (22,012) (29,571) 145,975 (276,485) 2,179,958 1,739,790 427,246 145,773 - 365,417 6,913,510
$ 3,027,670 $ 405,234 $ 116,202 $ 145,975 $ 88,932 $ 9,093,468 159

160

STATISTICAL SECTION (UNAUDITED)
161

162

City of San Luis Obispo, California
Statistical Section Overview
For the Fiscal Year Ended June 30, 2022
This part of the City of San Luis Obispo’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 government’s overall financial health.

Contents
Financial Trends – Schedules 1-6. These schedules contain trend information to help the reader understand how the City’s financial performance and well-being have changed over time.

Revenue Capacity – Schedules 7-13. These schedules contain information to help the reader assess the government’s most significant local revenue sources, sales and property taxes.

Debt Capacity – Schedules 14-19. These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future.

Demographic and Economic Information – Schedules 20-22. These schedules offer demographic and economic indicators to help the reader understand the environment within which the government’s financial activities take place.

Operating Information – Schedules 23-26. These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the government provides and the activities it performs. 163

2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Governmental activities: Net investment in capital assets $ 142,239,500 $ 145,266,043 $ 150,430,226 $ 163,449,992 $ 165,100,426 $ 171,472,251 $ 174,431,254 $ 177,335,648 $ 184,387,289 $ 193,984,593 Restricted 2,374,800 4,825,662 2,350,838 2,762,387 2,268,499 421,954 20,458,677 29,901,136 35,603,121 41,770,187 Unrestricted 29,927,200 (66,610,104) (57,421,778) (49,031,893) (41,496,841) (49,909,657) (72,041,172) (73,806,116) (62,369,688) (57,458,111) Total governmental activities net position $ 174,541,500 $ 83,481,601 $ 95,359,286 $ 117,180,486 $ 125,872,084 $ 121,984,548 $ 122,848,759 $ 133,430,668 $ 157,620,722 $ 178,296,669 Business-type activities: Net investment in capital assets $ 123,510,200 $ 119,116,303 $ 125,801,845 $ 128,390,611 $ 131,149,516 $ 136,694,402 $ 139,659,544 $ 149,617,018 $ 160,750,886 $ 153,643,418 Restricted 2,254,200 2,248,979 2,261,213 2,278,392 2,276,526 1,558,795 500,645 4,037,611 2,493,859 2,684,781 Unrestricted 41,712,200 35,224,987 42,117,143 49,495,220 53,421,102 50,866,147 57,379,689 53,983,005 53,159,080 84,056,287 Total business-type activities net position $ 167,476,600 $ 156,590,269 $ 170,180,201 $ 180,164,223 $ 186,847,144 $ 189,119,344 $ 197,539,878 $ 207,637,634 $ 216,403,825 $ 240,384,486 Primary government (City wide totals): Net investment in capital assets $ 265,749,700 $ 264,382,346 $ 276,232,071 $ 291,840,603 $ 296,249,942 $ 308,166,653 $ 314,090,798 $ 326,952,666 $ 345,138,175 $ 347,628,011 Restricted 4,629,000 7,074,641 4,612,051 5,040,779 4,545,025 1,980,749 20,959,322 33,938,747 38,096,980 44,454,968 Unrestricted 71,639,400 (31,385,117) (15,304,635) 463,327 11,924,261 956,490 (14,661,483) (19,823,111) (9,210,608) 26,598,176 Total primary government net position $ 342,018,100 $ 240,071,870 $ 265,539,487 $ 297,344,709 $ 312,719,228 $ 311,103,892 $ 320,388,637 $ 341,068,302 $ 374,024,547 $ 418,681,155 City of San Luis Obispo, California
Schedule 1
Net Assets by Component
Last Ten Fiscal Years
(Accrual basis of accounting)
164

2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Expenses:Governmental activities:

Public safety $ 28,859,200 $ 29,651,702 $ 26,881,732 $ 29,318,821 $ 31,806,692 $ 42,097,557 $ 34,320,108 $ 34,670,383 $ 35,226,779 $ 41,132,177 Transportation 8,975,047 8,551,500 11,457,311 8,792,028 9,668,840 9,229,042 7,546,278 7,416,335 8,137,479 10,395,516 Culture and recreation 10,078,700 10,239,853 10,332,740 9,808,545 9,824,262 11,125,792 9,469,520 10,063,304 11,122,003 12,407,720 Community development 8,866,900 10,183,782 10,960,778 12,900,275 14,656,604 13,457,993 12,573,953 11,882,018 11,918,019 15,506,092 General Government - - - - - 22,429,785 - 22,058,724 17,276,491 20,982,321 Interest on long-term debt 1,217,200 1,221,205 1,015,011 1,351,468 1,170,984 1,488,183 702,885 839,661 731,045 699,284 Total governmental activities expenses 57,573,500 60,271,589 60,647,572 62,171,137 67,127,382 77,398,567 87,042,529 86,930,425 84,411,816 101,123,110 Business-type activities:

Water 17,019,000 17,575,961 17,128,041 18,136,120 19,069,967 19,523,736 20,986,430 22,914,013 21,469,967 20,892,863 Sewer 10,189,400 10,647,255 10,132,214 10,842,451 11,683,262 14,158,612 13,967,717 13,100,905 15,064,551 12,576,058 Parking 3,678,600 3,636,607 3,556,637 3,900,052 3,791,493 4,098,840 4,088,681 4,145,364 4,057,242 4,517,125 Transit 3,903,900 4,059,138 3,994,194 4,088,423 4,076,871 4,355,103 4,320,976 4,384,344 4,023,536 3,851,264 Total business-type activities expenses 34,790,900 35,918,961 34,811,086 36,967,046 38,621,593 42,136,291 43,363,804 44,544,626 44,615,296 41,837,310 Total primary government expenses $ 92,364,400 $ 96,190,550 $ 95,458,658 $ 99,138,183 $ 105,748,975 $ 119,534,858 $ 130,406,333 $ 131,475,051 $ 129,027,112 $ 142,960,420Program Revenues:Governmental activities:

Charges for services:

Public safety $ 1,589,278 1,599,000 $ 1,697,748 $ 1,673,800 $ 1,771,383 $ 1,881,725 $ 1,633,223 $ 3,045,294 $ 3,991,193 $ 3,197,692 $ Transportation 1,321,323 221,200 1,270,787 1,691,757 1,793,010 1,669,563 2,399,692 531,424 91,509 636,874 Culture and recreation 3,048,274 1,926,800 2,155,411 2,048,780 3,501,837 3,487,225 4,078,539 2,508,565 3,430,224 4,046,439 Community development 4,126,400 4,981,211 7,210,132 7,974,880 8,144,128 7,355,831 9,941,951 11,812,417 15,929,420 10,509,106General Government - - - - - - 1,391,940 760,606 654,039 530,775 Operating grants and contributions 2,814,700 2,412,469 2,509,323 2,667,058 2,488,706 4,015,502 2,990,211 4,828,837 3,601,973 3,647,813Capital grants and contributions 1,991,900 3,680,440 7,911,867 9,355,707 40,531 39,781 47,234 2,504,722 5,688,200 1,531,157 Total governmental activities program revenues 12,680,000 17,032,995 22,755,268 25,411,982 17,739,595 18,449,627 22,482,790 25,991,865 33,386,558 24,099,856Business-type activities:

Charges for services:

Water 18,148,200 $ 19,755,909 $ 20,446,730 $ 19,884,850 $ 20,180,931 $ 22,202,069 $ 24,026,385 $ 25,666,777 $ 28,340,076 $ 29,894,129 $ Sewer 16,212,000 17,151,212 18,007,064 16,460,140 16,272,533 16,753,094 18,674,547 19,042,384 21,501,546 23,642,048Parking 4,693,400 3,998,730 4,905,494 7,408,729 4,666,970 5,226,780 5,443,038 3,293,941 2,567,908 4,890,317 Transit 682,700 688,585 649,899 659,471 666,296 703,451 776,808 633,566 331,352 713,777 Operating grants and contributions 2,673,500 2,458,640 3,148,651 2,888,820 4,180,386 3,099,618 3,259,975 4,712,832 3,742,594 5,156,782Capital grants and contributions 731,300 82,359 60,063 - - - - - - - Total business-type activities programs revenues 43,141,100 44,135,435 47,217,901 47,302,010 45,967,116 47,985,012 52,180,753 53,349,500 56,483,476 64,297,053 Total primary government program revenues $ 55,821,100 $ 61,168,430 $ 69,973,169 $ 72,713,992 $ 63,706,711 $ 66,434,639 $ 74,663,543 $ 79,341,365 $ 89,870,034 $ 88,396,909 Net Revenues (Expenses):

Governmental activities $ (44,893,500) $ (43,238,594) $ (37,892,304) $ (36,759,155) $ (49,387,787) $ (58,948,940) $ (64,559,739) $ (60,938,560) $ (51,025,258) $ (77,023,254) Business-type activities 8,350,200 8,216,474 12,406,815 10,334,964 7,345,523 5,848,721 8,816,949 8,804,874 11,868,180 22,459,743 Total primary government $ (36,543,300) $ (35,022,120) $ (25,485,489) $ (26,424,191) $ (42,042,264) $ (53,100,219) $ (55,742,790) $ (52,133,686) $ (39,157,078) $ (54,563,511) Schedule 2
City of San Luis Obispo, California
Changes in Net Position, Last Ten Fiscal Years
(Accrual Basis of Accounting)
165

2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Schedule 2
City of San Luis Obispo, California
Changes in Net Position, Last Ten Fiscal Years
(Accrual Basis of Accounting)
General Revenues and Other Changes in Net Position:Governmental activities:

Sales and use taxes 20,736,000 $ 22,180,173 $ 22,408,980 $ 24,676,377 $ 24,068,665 $ 24,559,570 $ 26,444,775 $ 24,125,439 $ 32,847,453 $ 51,419,561 $ Property taxes 9,176,600 8,960,010 9,631,890 10,186,858 10,756,477 11,425,510 12,238,357 13,301,736 14,197,869 14,716,412 Transient occupancy tax 6,063,232 5,572,400 6,805,742 7,127,756 7,381,989 7,514,289 8,061,087 6,325,841 6,960,035 10,650,762 Utility users tax 5,345,342 4,916,100 5,211,207 5,413,720 5,539,407 5,627,356 4,919,892 5,439,144 5,225,979 5,338,325Property tax in-lieu of vehicle license fees 3,533,200 3,645,692 3,849,341 4,113,244 4,353,912 4,637,253 4,961,080 5,290,215 5,660,661 5,994,592Other taxes and fees 4,607,600 4,779,570 4,993,285 4,800,592 3,929,377 5,006,594 4,332,557 4,883,677 5,578,944 5,800,333Investment earnings 237,100 566,931 467,348 825,760 997,995 164,434 1,618,354 3,368,951 435,818 (1,638,993)Miscellaneous and other 349,900 679,127 707,781 - - - 146,579 1,001,369 1,019,626 1,213,401Gain (loss) on disposal of capital assets (11,000) - - - - - - - - -Prior period adjustment 2,657,100 (833,234) - - - - - - 745,285 -Cumulative change in accounting principle (GASB 65) (345,400) - - - - - - - - -Transfers 115,100 (73,771) (329,452) 1,436,048 1,051,563 1,198,027 2,456,035 1,889,900 1,992,911 1,685,314 Total governmental activities 51,544,700 51,313,072 53,746,122 58,580,355 58,079,385 60,133,033 65,178,716 65,626,272 74,664,581 95,179,707 Business-type activities
Investment earnings $ 73,500 $ 364,551 $ 361,627 $ 845,906 $ 182,261 $ 320,471 $ 2,516,216 $ 2,880,634 $ 577,250 $ (1,207,118) Cumulative change in accounting principle (842,600) - - - - - - - - - Income from investment in joint venture - - 239,200 - 206,700 209,300 (25,469) 153,949 519,677 585,101 Prior period adjustment - - - - - - - - (907,350) -Transfers (115,100) 73,771 329,452 (1,436,048) (1,051,563) (1,198,027) (2,456,035) (1,889,900) (1,992,911) (1,685,314) Total business-type activities (884,200) 438,322 691,079 (350,942) (662,602) (668,256) 34,712 1,144,683 (1,803,334) (2,307,331) Total primary government $ 50,660,500 $ 51,751,394 $ 54,437,201 $ 58,229,413 $ 57,416,783 $ 59,464,777 $ 65,213,428 $ 66,770,955 $ 72,861,247 $ 92,872,376 Change in net position:

Governmental activities $ 6,651,200 $ 8,074,478 $ 15,853,818 $ 21,821,200 $ 8,691,598 $ 1,184,093 $ 618,977 $ 4,687,712 $ 23,639,323 $ 18,156,453 Business-type activities 7,466,000 8,654,796 13,097,894 9,984,022 6,682,921 5,180,465 8,851,661 9,949,557 10,064,846 20,152,412 Total primary government $ 14,117,200 $ 16,729,274 $ 28,951,712 $ 31,805,222 $ 15,374,519 $ 6,364,558 $ 9,470,638 $ 14,637,269 $ 33,704,169 $ 38,308,865 166

2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 General fund: Reserved $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ Unreserved: Nonspendable: Prepaid items 2,777,000 3,191,055 60,181 56,020 3,173,248 3,520,473 51,636 - 41,155 90,797 Restricted for: (Note 1) Debt service 331,600 312,037 303,126 489,056 128,102 159,724 - - - - Committed to: (Note 1) General government programs 1,768,200 4,973,497 3,942,459 4,468,863 9,428,034 8,693,113 - 9,299,971 - 5,696,864 Contingency Fund - - - - - - - 11,830,380 - 12,014,000
Risk management - - - - - - - 1,955,966 - 1,845,935
Assigned to:

Contingency Fund 10,458,000 - 10,486,931 11,092,782 10,902,368 10,171,464 13,418,400 10,251,000 - - Establishment of Section 115 Trust - - - - - - 1,400,000 - 2,000,000 2,000,000 Revenue stabilization - - - - - - 1,000,000 - - -
Development Services - - 1,848,386 382,396 41,110 596,796 531,000 899,277 710,657 530,657 Public Safety - - 97,239 - - - 1,096,215 - 929,344 -
Risk management - - - - - - 1,498,078 - - -
City Attorney - - - - 100,000 100,000 - 100,000 100,000 - CalPERS pension payment - - - - - - - 10,200,000 - 2,000,000 Subsequent years expenditures - - 2,716,534 - - 9,908,932 - 10,284,119 4,738,806 8,210,529 Unassigned 14,060,900 1,382,590 7,828,485 10,419,881 2,723,292 6,334,870 6,185,574 7,122,607 5,311,792 8,356,724 Total general fund 18,937,700 20,317,179 24,566,807 29,625,532 26,496,154 29,576,440 30,095,542 33,651,296 47,118,071 40,745,506 For the Fiscal Year Ended June 30
Schedule 3
City of San Luis Obispo, California
Fund Balances, Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
167

2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 For the Fiscal Year Ended June 30
Schedule 3
City of San Luis Obispo, California
Fund Balances, Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
All other governmental funds: Reserved $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ Unreserved reported in:Nonspendable - - - - 5,642 (71,687) 292,641 - - 8,681 Restricted for: (Note 1) Debt service 2,043,200 2,043,222 2,140,980 2,119,724 2,119,611 1,653,109 1,791,026 2,226,898 2,575,367 2,540,255 Public safety programs 22,900 27,145 16,886 23,492 20,786 3,073 - 32,332 63,418 864,848 Transportation projects - - - - - 8,151,487 - 9,371,824 10,519,994 8,051,050 Affordable housing programs - - - - - 2,944,549 - 8,698,494 9,292,304 9,893,314 Impact fee programs - - - - - 1,870,656 - 3,126,925 7,466,378 8,935,786 Parkland development programs - - - - - 3,528,662 - 4,709,560 3,405,468 3,107,198 Public art programs - - - - - - 620,934 591,097 568,401 798,038 Tourism programs - - - - - - 456,023 322,975 678,554 1,147,881 Committed to: Affordable housing programs 1,254,900 2,946,847 2,601,882 2,562,825 5,054,332 3,974,629 - - - - Assessment district programs - - - - - - - - - -
Capital outlay 1,326,000 6,045,091 3,632,641 2,954,223 - - - - - - General government programs 4,743,552 1,084,221 7,463,605 8,092,594 - - - - - Impact Fees Programs 3,542,700 411,592 9,410,273 549,349 8,795,074 595,256 - - - - Open space programs 194,300 1,582,425 983,402 1,265,620 588,743 2,363,347 - - - - Parkland development programs 1,209,600 - - 2,728,883 - - - - - - Contingency fund - - - - - 519,885 - - - -
Public art programs 347,400 - - - - - - - - -
Assigned to: Contingency fund - - - - 900,000 900,000 900,000 900,000 900,000 900,000 Subsequent years expenditures 5,413,900 3,552,319 2,606,757 3,559,851 5,846,873 5,861,455 6,382,294 8,521,320 8,826,420 23,533,631 Unassigned (2,500) 1,039 (83) - - - (318,422) (149,162) (5,782) - Total all other governmental funds 15,352,400 21,353,232 22,476,959 20,498,689 26,059,944 23,891,661 26,619,850 38,352,263 44,290,522 59,780,682 Total all governmental funds $ 34,290,100 $ 41,670,411 $ 47,043,766 $ 50,124,221 $ 52,556,098 $ 53,468,101 $ 56,715,392 $ 72,003,559 $ 91,408,593 $ 100,526,188 Note:The City implemented GASB Statement No. 54 in the 2010-11 fiscal year which requires the City to use new designations of ending fund balances. 168

2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Revenues: Sales and use - general $ 14,242,200 $ 15,405,808 $ 15,272,683 $ 17,498,218 $ 16,737,005 $ 17,055,085 $ 17,805,482 $ 16,571,064 $ 20,067,740 $ 22,247,303 Sales and Use - local transaction tax 6,493,800 6,774,365 7,136,297 7,178,159 7,331,660 7,504,485 8,325,230 7,554,375 12,779,713 29,172,258 Prop. 172 Public Safety tax 327,700 391,567 409,590 405,066 405,512 397,488 314,063 416,459 425,136 529,299 Property tax 9,176,600 8,960,010 9,631,890 10,186,858 10,756,477 11,425,510 12,238,357 12,913,661 13,727,986 14,166,259 Transient Occupancy 5,572,400 6,063,232 6,805,742 7,127,756 7,381,989 7,514,289 8,061,087 6,325,841 6,960,035 10,650,762 Utility users tax 4,916,100 5,345,342 5,211,207 5,413,720 5,539,407 5,627,356 4,919,892 5,439,144 5,225,979 5,338,325 Property tax in-lieu of VLF (Note 1) 3,533,200 3,645,692 3,849,341 4,113,244 4,353,912 4,637,253 4,961,080 5,290,215 5,660,661 5,994,592 Franchise fees 2,552,300 2,636,599 2,790,077 1,537,922 1,557,128 1,597,655 1,428,296 1,888,414 1,796,829 1,978,295 Business tax 2,055,300 2,142,971 2,203,208 2,491,516 2,372,249 2,663,686 2,630,499 2,995,263 3,782,115 2,823,163 Cannabis tax - - - - - - - - - 998,875
Real property transfer 256,300 287,560 298,191 366,088 332,314 347,765 273,762 388,075 469,883 550,153 Fines, forfeitures and penalties 159,700 150,185 184,320 172,353 139,534 199,374 155,269 239,048 223,882 173,915 Use of money and property 237,100 566,931 467,348 825,760 260,169 164,434 1,996,382 2,005,968 219,507 (2,151,227) Vehicle License Fees (Note 1) 19,300 - - - - - - - - -
Subventions and grants 4,603,140 5,989,881 10,858,570 11,771,980 2,624,753 4,156,333 3,110,689 7,538,893 10,719,698 6,446,192 Charges for services 8,106,600 11,167,033 12,450,887 13,622,945 15,173,707 14,672,746 18,394,586 17,828,561 22,090,479 17,657,128 Other revenues 526,500 357,469 217,710 242,744 446,456 634,391 590,796 708,579 717,440 506,722 Total revenues 62,778,240 69,884,645 77,787,061 82,954,329 75,412,272 78,597,850 85,205,470 88,103,560 104,867,083 117,082,014 Schedule 4
City of San Luis Obispo, California
Revenues, Expenditures and Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years
(Modified accrual basis of accounting)
169

2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Schedule 4
City of San Luis Obispo, California
Revenues, Expenditures and Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years
(Modified accrual basis of accounting)
Expenditures:Current: General Government 8,723,300 $ 9,362,031 $ 10,534,463 $ 12,409,567 $ 11,824,360 $ 12,709,324 $ 13,769,778 $ 14,503,410 $ 13,041,242 $ 17,197,912 $ Public safety 23,973,400 24,798,500 24,356,077 26,468,454 28,091,747 28,862,906 31,714,220 30,216,995 31,714,578 39,921,208 Transportation 2,798,200 2,882,241 2,969,111 3,317,177 3,780,804 3,565,022 3,495,909 3,710,943 4,450,572 5,131,132 Culture and recreation 6,790,300 7,155,619 7,250,398 7,428,198 7,712,834 8,571,184 8,636,582 8,416,687 9,458,448 10,440,543 Community development 7,777,400 8,389,957 10,047,272 10,770,827 10,300,894 10,815,667 10,677,334 10,477,062 11,101,465 15,067,518 Debt service: Principal 1,543,000 1,534,668 3,856,325 1,792,849 2,101,296 15,665,904 1,974,050 1,605,239 1,602,039 1,467,402 Interest 1,192,700 1,048,671 1,063,820 1,349,216 1,215,504 1,524,180 809,977 993,697 808,586 774,747 Capital: Public safety 457,700 892,351 2,371,865 1,220,759 1,772,454 506,491 706,918 182,235 107,965 248,613 Transportation 5,228,300 4,859,863 14,302,937 15,038,306 4,161,966 6,419,137 6,441,229 6,412,541 11,452,720 13,653,849 Leisure, cultural and social services 395,500 1,272,510 2,399,211 1,463,269 1,499,704 981,768 597,187 1,213,682 537,118 3,933,463 Community development (Note 2) 70,900 939,017 123,258 149,537 2,078,181 525,105 1,568,147 785,517 105,142 601,315 General government 429,700 145,199 1,684,045 590,263 633,682 1,192,424 4,695,978 2,081,482 2,492,435 1,619,793 Total expenditures 59,380,400 63,280,627 80,958,782 81,998,422 75,173,426 91,339,112 85,087,309 80,599,490 86,872,310 110,057,495 Excess of revenues over(under) expenditures 3,397,840 6,604,018 (3,171,722) 955,907 238,846 (12,741,262) 118,161 7,504,070 17,994,773 7,024,519 170

2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Schedule 4
City of San Luis Obispo, California
Revenues, Expenditures and Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years
(Modified accrual basis of accounting)
Other FinancingSources(Uses):Issuance of debt/refunding debt - $ 850,775 $ 8,372,323 $ 688,500 $ 1,141,468 $ 12,472,698 $ 673,095 $ - $ - $ - $ Cost of debt issuance (11,500) - - - - - - - - -
Transfers in 8,407,600 13,834,998 11,682,079 12,747,578 15,739,036 19,815,144 9,064,256 9,455,785 15,460,955 35,273,279 Transfers out (8,292,500) (13,908,769) (12,011,531) (11,311,530) (14,687,473) (18,617,117) (6,608,221) (7,565,885) (13,468,044) (33,587,965) Total other financing sources(uses) 103,600 777,004 8,042,871 2,124,548 2,193,031 13,670,725 3,129,130 1,889,900 1,992,911 1,685,314 Net change in fund balance 3,501,440 $ 7,381,022 $ 4,871,150 $ 3,080,455 $ 2,431,877 $ 929,463 $ 3,247,291 $ 9,393,970 $ 19,987,684 $ 8,709,833 $ Debt service as a percentage of noncapital expenditures 6.62% 5.98% 8.92% 5.20% 5.37% 26.64% 4.08% 3.86% 3.46% 2.36%Notes:1. Beginning in 2005-06 the State implemented a "VLF swap," under which an equal amount of Vehicle License Fees was "swapped" for an equal amount of revenues to be collected on the property tax roll. 2. Community Development Block Grant (CDBG) expenditures are included in the Community Development total for purposes of this schedule. 3. Prior to 2021-22, cannabis tax was included in business tax 171

2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Staffing: Salaries and wages: Regular salaries $ 23,214,900 $ 23,242,170 $ 23,804,510 $ 24,790,947 $ 26,944,188 $ 26,666,447 $ 27,520,149 $ 28,601,004 $ 29,014,941 $ 31,823,078 Temporary salaries 1,812,700 2,191,214 2,137,487 1,964,521 1,793,360 1,711,755 1,898,331 1,882,307 2,294,603 1,855,690 Overtime 3,309,000 3,018,181 3,222,698 3,473,489 3,604,336 4,420,756 4,241,294 3,292,469 4,527,789 4,412,287 Benefits: Retirement 7,661,900 7,637,931 7,943,827 9,323,782 10,394,523 10,570,883 15,150,755 12,593,753 13,344,252 24,665,892 Group health/disability insurance 3,463,500 3,387,101 3,319,117 3,828,238 4,129,004 4,638,471 4,193,021 4,291,139 4,040,575 4,327,121 Medicare 384,400 393,913 408,889 418,704 455,966 469,688 477,925 481,571 505,450 537,516 Unemployment Reimbursements 28,800 31,634 48,588 5,159 150,929 61,972 - 61,240 101,575 17,484 Total staffing 39,875,200 39,902,144 40,885,116 43,804,840 47,472,306 48,539,972 53,481,475 51,203,483 53,829,185 67,639,069 Contract services 5,208,900 5,725,290 5,903,638 6,271,607 6,962,949 6,940,018 6,557,939 6,444,957 8,044,482 7,836,218 Other operating expenditures Communications & utilities 1,842,300 2,034,997 1,945,243 2,192,384 2,023,057 2,190,695 2,444,564 2,115,821 2,494,018 3,780,633 Rents & leases 139,600 197,104 159,718 164,729 170,288 171,909 180,478 160,045 88,615 168,585 Insurance: General liability & property 1,320,700 1,425,450 1,646,605 1,847,422 1,273,133 1,658,319 1,600,962 2,196,462 1,323,824 2,071,193 Workers compensation 918,000 1,405,916 1,631,585 2,019,722 1,627,423 2,145,046 2,422,843 2,611,827 2,037,611 2,181,044 Other operating expenditures 2,910,900 2,991,619 3,635,542 3,079,347 3,345,191 3,017,537 3,575,930 4,902,050 4,256,574 5,589,217 Total operating expenditures 7,131,500 8,055,086 9,018,693 9,303,604 8,439,092 9,183,506 10,224,777 11,986,205 10,200,642 13,790,672 Minor capital 99,400 195,473 78,414 92,853 203,098 90,346 - - 1,070 - Total program expenditures 52,315,000 53,877,993 55,885,861 59,472,903 63,077,445 64,753,842 70,264,191 69,634,645 72,075,379 89,265,958 Reimbursed expenditures (3,732,100) (3,897,420) (3,451,208) (4,008,992) (4,164,747) (4,264,633) (3,981,789) (4,277,664) (4,578,402) (4,717,442) Total general fund operating expenditures $ 48,582,900 $ 49,980,573 $ 52,434,653 $ 55,463,911 $ 58,912,698 $ 60,489,209 $ 66,282,402 $ 65,356,981 $ 67,496,977 $ 84,548,516 Schedule 5
City of San Luis Obispo, California
General Fund Operating Expenditures by Type
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
172

Fiscal Sales Local Property Transient Utility Property Franchise Business Other Year and Use Sales (Note 2) (Note 1) Occupancy Users in-lieu of VLF Fees Tax Taxes Total 2012-13 14,242,200 $ $ 6,493,800 $ 9,176,600 $ 5,572,400 $ 3,533,200 4,916,100 $ $ 2,055,300 2,552,300 $ 349,900 $ 48,891,800 $ 2013-14 15,405,808 6,774,365 8,960,010 6,063,232 5,345,692 3,645,692 2,636,599 2,142,971 679,127 51,653,496 2014-15 15,272,683 7,136,297 9,631,890 6,805,742 5,211,207 3,849,341 2,790,077 2,203,208 707,781 53,608,226 2015-16 17,498,218 7,178,159 10,186,858 7,127,756 5,413,720 4,113,244 1,537,922 2,491,516 771,154 56,318,547 2016-17 16,737,005 7,331,660 10,756,477 7,381,989 5,539,407 4,353,912 1,557,128 2,372,249 737,826 56,767,653 2017-18 17,055,085 7,504,485 11,425,510 7,514,289 5,627,356 4,637,253 1,597,655 2,663,686 745,253 58,770,572 2018-19 18,119,545 8,325,230 12,238,357 8,061,087 4,919,892 4,961,080 1,428,296 2,630,499 273,762 60,957,748 2019-20 16,571,064 7,554,375 12,913,661 6,325,841 5,439,144 5,290,215 1,888,414 2,995,263 388,075 59,366,052 2020-21 20,067,740 12,779,713 14,197,869 6,960,035 5,225,979 5,660,661 1,796,829 3,782,115 425,136 70,896,077 2021-22 22,247,303 29,172,258 14,716,412 10,650,762 5,338,325 5,994,592 1,978,295 2,823,163 998,875 93,919,985 Notes:1. Property tax revenues are presented net of SB2557 County administrative fees (approximately 3% of total property tax revenues). The City has elected to receive its property tax revenues based on the Teeter Plan method of collection whereby the County remits 100% of taxes levied, pursues collection and retains any delinquent taxes and related penalties and interest.2. In November 2014 voters in San Luis Obispo reauthorized the local half-percent sales and use tax measure (Measure G) .In November 2020 voters in San Luis Obispo replaced the local half-percent sales and use tax with a 1.5% local sales and use tax (Measure G-20). (Accrual Basis of Accounting)
Schedule 6
City of San Luis Obispo, California
Governmental Activities Tax and Franchise Revenues by Source Last Ten Fiscal Years
173