San Luis Obispo City Council
January 23, 2024

Management’s Discussion and Analysis
The only type of proprietary fund the City maintains is enterprise funds. The Water, Sewer, Parking, and Transit Funds are presented as business-type activities in the government-wide financial statements. The City considers all four of its enterprise funds to be major funds.

Fiduciary Funds. Custodial funds are the only type of fiduciary funds maintained by the City. These are used to account for resources held for the benefit of parties outside the primary government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City’s own programs. An example of a custodial fund may include donations provided to the City to be utilized for specific purposes (i.e. open space, environmental mitigation funds, etc.) as well as other funds held in trust of another entity to be utilized for a specific purpose. A specific example is the Hazardous Materials Task Force Fund, created to provide special fire services around the County, which is funded by multiple county and city agencies.

The accounting used for fiduciary funds is much like that used for proprietary funds. The Custodial Funds are presented with the fund financial statements in the supplementary information section.

Notes to the Financial Statements. The notes provide additional information that is essential to the reader for a full understanding of the data provided in the government-wide and fund financial statements.

Other Information. In addition to the basic financial statements and accompanying notes, this report also presents required supplementary information including budgetary comparison schedules, reporting of the local transaction tax measure (Measure G and G-20) and more detailed information concerning the City’s net pension liability, schedule of contributions to the pension plan and progress in funding its obligation to provide other post-employment benefits (OPEB).

Statistical Information. The statistical section presents detailed information as a context for understanding what the information in the financial statements, notes disclosures, and required supplementary information indicates about the City’s overall financial health. This information has been adjusted over time to also serve as required bond disclosure information.

Financial Highlights
The following information provides a narrative overview and analysis of the financial activities of the City of San Luis Obispo (City) for the fiscal year that ended June 30, 2023. It should be read in conjunction with the transmittal memorandum, the basic financial statements, and the accompanying notes.

In the fiscal year 2022-23, the City continued to experience slow but steady economic growth despite some turbulence in the economy and inflation. Housing production and other permit activity also remained strong. Actual revenues received were slightly higher than budgeted and the City’s expenditures came in below appropriated budget amounts.

Winter Storms In the middle of the fiscal year 2022-23 the City experienced heavy winter storms that resulted in two separate emergency declarations at the Federal and State level, as well as a local emergency proclamation. The City is eligible for reimbursement for a majority of the storm related costs through the Federal Emergency Management Agency (FEMA) and the California Disaster Assistance Act (CDAA). As of the end of the fiscal year, the City had spent approximately $3.6 million for operating costs in response to the storms, including supplies, emergency protective measures, debris removal, and minor repairs. These funds were appropriated from operating reserves and will be replenished as part of the 2023-2024 budget process. Approximately $275,000 was spent on capital 7

Management’s Discussion and Analysis
expenditures for immediate repair of damaged City infrastructure, and an additional $7 million remains on future planned expenditures. The overall cost of damages to the City is now expected to exceed $35 million.

GASB Statement No. 96 This pronouncement is included in the City’s financial statements for the first time in FY 2022-23 GASB 96 requires the reporting of subscription-based information technology arrangements (SBITAs).

Under this statement, the City recognizes right-to-use subscription assets, an intangible asset, and a corresponding subscription liability. Within the City’s Financial Statements, Note 7 – Long Term Debt lists the applicable SBITAs.

Housing Loans and Fee Deferrals The City administers an extensive housing program for workforce and low-income housing. Through the program, it has extended loans and impact fee deferrals to low-income housing developers such as the Housing Authority of San Luis Obispo, Transitions Mental Health, and People’s Self-Help Housing (to name a few). The loans are long-term in nature, include a modest interest rate, and will become due in future years. The loans are disclosed in the City’s financial statement under the respective governmental funds as loans receivables and restricted within fund balance. Detailed information can be found in Note 4 – Loans Receivables.

Fair Market Value Adjustments The City follows the practice of pooling cash and investments for all funds under its direct daily control. Interest earned on pooled cash and investments is allocated quarterly to the various funds based on the respective fund’s average quarterly cash balance. Investments are stated at fair value, based on quoted market prices in accordance with GASB standards and are adjusted to reflect any unrealized gains and losses resulting from the fair value adjustment annually. The City’s investments and effects of the FMV adjustment are reflected in the Financial Statements under “Use of money and property” in all funds based on the City’s mentioned practices. More information on the City’s investments can be found in Note 2 – Cash & Investments.

The following outlines financial highlights for the year which are detailed in the table on page 9 of the Management Discussion and Analysis.
x Per the City’s Statement of Net Position, total City-wide assets increased by approximately $60.9 million or 7.8%.

The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows on June 30, 2023, by $479 million (net position). They include again the disclosure of the City’s net unfunded pension liability which increased by $25.4 million to $91.4 million as of June 2023 largely due to changes in actuarial assumptions and negative investment income or returns. The City’s net pension liability is measured as the total pension liability of $259.7 million less the pension’s fiduciary net position of $168.3 million. This picture will likely change with the experienced losses at the end of June 2023 but will be counter-acted by the City’s budgeted and planned additional discretionary payments made in FY 2022-23 and anticipated in FY 2023-24. x In governmental activities, amounts received from various sources were slightly below previous year-end results, but the City’s cash and investment balances increased by $10.7 million; prepaid expenses decreased slightly, cash held with fiscal agent remained stagnant compared to 2021-22, and Loans Receivables of approximately $12.3 million also remained consistent with the prior year.
x In business-type activities, total assets increased from $435 million to $474 million. Of note is the lease receivable amount of $36.5 million in the Parking Fund due to the reporting of leases under GASB 87. The Sewer Fund increased its construction in progress by over $31 million as the upgrade of the Water Resource Recovery Facility is ongoing. This $140 million multi-year construction project is scheduled to be completed in FY 2023-24. x City-wide liabilities increased by $71.6 million during the fiscal year with the increases in the Governmental activities of $43 million and increases in the business-type activities of $28.6 million. The increase in 8

Management’s Discussion and Analysis
governmental funds is mostly due to the increase in net unfunded pension liabilities while the increase in the business-type activities reflects new long-term debt obligations. x The City’s governmental funds altogether reported combined ending fund balances of $111.2 million.

Approximately $37.4 million of this total is either nonspendable or restricted for debt service, transportation projects or specific programs like impact fee programs or affordable housing. Another $20.3 million is committed for purposes such as general contingency reserves, and future insurance premiums. A further $45.2 million is assigned as of June 30, 2023, and intended to be used for specific purposes including the development services, revenue stabilization reserve, the Pension 115 Trust Fund, and to meet expenditures in the subsequent year in the form of purchase orders, encumbrances, and unspent appropriations that have been rolled over into fiscal year 2023-24 in accordance with the City’s budget policies. The remaining $8.3 million is unassigned. x The total General Fund balance increased by 4% to $42.5 million. After the adjustments to reflect amounts nonspendable of $101,500, committed funds of $19.6 million including the 20% operating reserve, assigned fund balance of $14.5 million, nearly $8.3 million remains unassigned balance on June 30, 2023.

Government-wide Overall Financial Analysis
Statement of Net Position Net position may serve over time as useful indicator of a government’s financial position.

The following is the condensed statement of net position for the fiscal years ended June 30, 2023, and 2022.

For the fiscal year ending on June 30, 2023, the City’s combined total assets and deferred outflows of resources were greater than its liabilities and deferred inflows of resources by $479 million. The largest portion of the City’s net position reflects its investment in capital assets in the amount of $376 million (e.g., land, buildings, infrastructure, machinery, and equipment), less any related outstanding debt used to acquire those assets. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to 9

Management’s Discussion and Analysis
repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

Just over $45.3 million of the City’s net position is subject to restrictions imposed by external parties and its use is determined by those restrictions and contractual obligations. The governmental and business-type activities each contributed $40.8 million and $19.9 million respectively to the combined net position increase of $60.7 million resulting in a total net position of $419 million on June 30, 2023.

Information about changes in net position for fiscal years 2022-23 and 2021-22 is summarized below. Reasons for the changes are discussed in the following sections for governmental activities and business-type activities.

Governmental Activities. The City’s net position in the Governmental activities increased by $40.7 million to $219 million on June 30, 2023, based on very strong tax revenues, significant expenditure savings, especially in public safety, and favorable investment earnings versus the prior year. Current year pension and other post-employment benefit activities resulted in substantial reductions to program expenses. For public safety, this represented a reduction in expenses of nearly $11.7 million. This is driven by changes of assumptions for the pension plan as well as the additional voluntary payments the City has been making. General Government expenses on this schedule are presented using full accrual accounting, therefore reflects approximately $4.4 million for current year capital asset and depreciation expense.
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Management’s Discussion and Analysis
Governmental Revenues: Revenues are divided into charges for services and general revenues including applicable taxes as listed in the following table. Charges for services are revenues directly related to service activity while operating and capital grants and contributions, and related investment earnings are a mechanism of cost recovery. The total governmental revenue increased from fiscal year 2021-22 by $10.5 million or 9% based on the re-opening of the economy, strong purchasing and rapidly returning travel and tourism activities. This increase was achieved despite the overall market volatility and inflationary pressures.

Charges for services remained consistent from the previous year, while most tax revenues saw increases as did overall grant revenue. Additionally, the City incurred a favorable FMV adjustment which also contributed to the overall increase in total revenues.

General revenues are used to pay costs of providing program services such as public safety, parks and open space, streetlights and traffic signals, recreation opportunities, Diversity, Equity, and Inclusion (DEI) programs as well as economic development, and environmental sustainability.

Top Governmental Activity Revenue Sources. As shown in the chart below, the City’s top five tax revenues accounted for almost 72% of total revenues, with service charges accounting for another 15% and ancillary revenue making up the remainder. Despite economic volatility, most of the City’s main revenue sources performed well and above initial expectations. Next to the local transaction tax, Transient Occupancy Tax ended the fiscal year at record levels, surpassing $11 million in annual revenue. This is indicative of the City gaining from being a drive-to market and benefiting from the travel activity that followed the pandemic related restrictions. Investment in tourism marketing and programs designed to bring people to San Luis Obispo paid dividends and continues to experience strong lodging and retail activity.

Revenues 2022-23 2021-22 Inc / (Dec) %
Charges for services 18,936,771 $ 18,920,886 $ 15,885 $ 0% Operating grants and contributions 5,331,657 3,647,813 1,683,844 46% Capital grants and contributions 200,933 1,531,157 (1,330,224) -87% General Revenues:

Sales taxes (Including 1/2 percent local Sale Tax) 52,374,199 51,419,561 954,638 2% Property taxes 15,635,545 14,716,412 919,133 6%
Transient occupancy tax 11,037,037 10,650,762 386,275 4% Utility users tax 6,904,194 5,338,325 1,565,869 29%
Property tax in lieu of VLF 6,283,397 5,994,592 288,805 5% Other taxes and fees 7,216,335 5,800,333 1,416,002 24%
Investment earnings 2,350,922 (1,638,993) 3,989,915 243% Miscellaneous and other 1,774,126 1,213,401 560,725 46% Total governmental revenues 128,045,116 $ 117,594,249 $ 10,450,867 $ 9% Governmental Activity Change in Revenue
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Management’s Discussion and Analysis
Governmental Activities Program Expenses: Program expenses decreased by $11.6 million from the prior fiscal year, ending 2022-23 at $89.5 million. The majority of this decrease is a result of adjustments made for pension and other post-employment benefits (OPEB) expenses in accordance with GASB Statements 68 and 75. Public safety program expenses decreased by $14.3 million while transportation, culture and recreation, and community development programs saw only modest increases. In addition, general government programs also saw an increase of approximately $4.6 million.

The following chart compares program fee revenues and expenses which is useful when reviewing the costs of various governmental activities:
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Management’s Discussion and Analysis
Financial Analysis of Governmental Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The following funds have been classified as either governmental or proprietary fund types.

Governmental Funds. The focus of the City’s governmental funds is on near-term inflows, outflows and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unassigned fund balance serves as a useful measure of a government’s net resources available for spending at the end of the fiscal year.
x As of June 30, 2023, the City’s governmental funds reported combined ending fund balances of $111.2 million or an increase of $10.7 million compared to the prior fiscal year. The total fund balance of the governmental funds consists of the following:
o Non-spendable fund balance represents prepaid items or items that by their nature are not in a spendable form. Approximately $101,462 was held in non-spendable at fiscal year-end. The majority of this represents changes in claim liabilities for workers compensation claims incurred under a previous insurance risk pool.
o Restricted fund balance of $37.4 million, including reserves for debt service or capital outlay, impact fees programs, general government programs, housing and the net balance of the Local Sales Tax Measure sub-fund.
o Committed fund balance amounted to $20.3 million accounting for the City’s reserve funds as prescribed by its Fund Balance and Reserve policies.
o Assigned fund balance of $45.2 million includes the amounts to be used for specific purposes of the City but do not meet the criteria to be classified as restricted or committed. Funds in this category include contingency funds (20% minimum reserve), funds to be used for Development Services, purchase orders and encumbrances that have been rolled over into fiscal year 2023-24 in accordance with the City’s budget policies, an additional discretionary payment to CalPERS, the newly established Section 115 Trust Fund, and solid waste funds collected through AB939. The City also established a Revenue Stabilization Reserve of $2 million to help insulate or smooth out budget impacts from large fluctuations in tax revenue. The largest portion of the assigned fund balance, nearly $24.5 million represents the City’s Capital Outlay Fund for investments in the City’s expansive infrastructure.
o Unassigned fund balance of $8.3 million in remains in the City’s General Fund and will be utilized first to address damages caused by the winter storms, based on City Council direction. Any remaining balances will be prioritized according to policy.

Major Governmental Funds. In fiscal year 2022-23 the City maintained two major governmental funds: the General Fund and the Capital Outlay Fund. Changes in both are highlighted in the Financial Highlights section above.

Non-Major Governmental Funds. The City has numerous non-major governmental funds including the Debt Service Fund and various Special Revenue Funds or Capital Projects Funds. These funds are presented in the basic financial statements in the aggregate. A significant number of these funds represent activity for capital projects. On June 30, 13

Management’s Discussion and Analysis
2023, these funds had an aggregate fund balance of just under $44.2 million. Of this total, $37.4 million is restricted for payment of debt service or specific governmental programs such as transportation, affordable housing, and impact fee or parkland development programs.

More information about the aggregated non-major funds can be found in the combining and individual fund statements and schedules immediately following the required supplementary information.

Financial Analysis of Enterprise Funds
The City’s business-type activities are financed through rates for services and should be self-sufficient in covering their expenses with their sales and services revenue. Also called proprietary funds, the City has four such entities with Water, Sewer, Parking, and Transit.

Water Fund - Total operating revenue decreased by $2.2 million due to a 9% reduction in water consumption compared to FY 2021-22. Nonoperating revenues were lower than the prior year due to impact fees collected for new development. However, total operating and nonoperating revenue exceeded total operating and nonoperating expenses and transfers out by $6.2 million, resulting in an ending net position of over $102.6 million on June 30, 2023.

Nonoperating revenues also include the Fund’s investment in the Whale Rock reservoir which amounted to $392,000 for FY 2022-23. The prior year restatement of $1.6 million was related an adjustment to loan receivables and accrued interest for affordable housing development projects that had deferred impact fees. Water fund operating expenses increased by $1.3 million over the prior year and were largely driven by increases in salaries and benefits as the City continued to fill vacant positions, increases in industry-specific commodities such as chemicals and electricity due to inflation, increases for supplies such as water main pipes, and also increasing regulatory requirements.

Sewer Fund - Total operating revenue decreased by $1.3 million due to lower impact fees than the prior year and operating expenses increased in all categories by $874,000. However, the decrease in net operating income was offset by total nonoperating revenues and expenditures of $1.8 million which includes grant revenue of $1.4 million and a favorable FMV adjustment. The result is a $9.9 million change in net position and an ending net position of $119.5 million for FY 2022-23. Like the Water fund, the prior year restatement of $886,000 was related to development impact fee loans receivable, including accrued interest, which the City had expensed or not recorded previously. Sewer fund operating expenses also increased by $874,000 compared to the prior year. The driving factors for this increase include the increases in salaries and benefits as the City filled its vacancies from the prior year, increases in the cost of utilities, and increasing regulatory requirements.

Parking Fund - Total operating revenues came in at just over $6 million compared to $4.9 million in the prior year while the operating expenses were consistent with the prior year and totaling $4.8 million compared to $4.2 million. 14

Management’s Discussion and Analysis
Revenues for parking meters, parking structures, and parking fines were all up from the prior year. As a result, operating income was nearly double than the previous year, $1.2 million in FY 2022-23 compared to $649,000 in FY 2021-22. The Parking Fund also received $700,000 of one-time American Rescue Plan Act (ARPA) funding to offset the limited continuation of the first-hour free parking in the City’s three existing parking structures during the fiscal year and this is reflected in the net nonoperating revenues/expenses which totaled almost $1.7 million. The Parking Fund ended the fiscal year with a net position of $30.2 million, an increase of just over $2.5 million from the prior year. The initial purpose of the additional reserves was to cover any anticipated debt reserve for the Cultural Arts District Parking Structure. The City ultimately issued different debt structure and the future need for a debt reserve is no longer needed and can be used for other parking purposes. The fund had a minor prior period restatement in FY 2021-22 due to an adjustment to correct a payroll error. The parking fund also saw increases in operating expenses of $570,000 over the prior year. This increase was attributed to several driving factors including: additional parking enforcement needs over the holiday period, increases in communication services and outreach efforts for various projects and programs, merchant fees as a result of newly implemented pay stations which collect more in credit card revenue versus traditional parking meters, and also increases in utilities rates such as electricity.

Transit Fund - The overall net position of the Transit Fund increased by $1.2 million to end the fiscal year with a net position of nearly $8 million. While operating revenue increased marginally, operating expenses also increased resulting in a slightly larger operating loss of $3.7 million versus $3.1 million in the prior year. However, net nonoperating revenues and expenses came in at $4.9 million, an increase of $1.8 million primarily due to receiving discretionary Federal ARPA grant funding, a favorable FMV adjustment in investments and an increase in bus fare compared to the prior year. The transit fund also saw increases in operating revenues of $661,000 over the prior year as result of various factors including: increases in fuel costs due to inflation as well as increased ridership of over 10%, and increased maintenance costs which are likely to continue until older buses can be retired from service and replaced with additional electric buses.

Combined Program Expenses and Revenue for Business-Type Activities Total revenues from service charges were down by $2.2 million for Business-Type Activities with the largest decreases in Water and Sewer offset by increases in the Parking and Transit funds. Impact fees in the Water and Sewer Funds, which are based on new development, were substantially lower in the current year and can often be volatile from year to year due to development
activity. All funds experienced a
positive fair market value
adjustment compared with the
prior year, which resulted in $2.6
million of investment earnings
compared to a $1.2 million
negative position of investment
earnings at the end of FY 2021-

22. In addition, grant revenues
for these funds are $2.2 million
higher, primarily from Federal
sources, notably $700,000 in
one-time American Rescue Plan
Act (ARPA) funding to offset
the limited continuation of the
15

Management’s Discussion and Analysis
first-hour free parking provided by the Parking Fund. In total, the business type activities generated $67.3 million in revenues for the fiscal year.

As outlined in the prior section, the program expenses for the proprietary funds increased from the prior year by nearly $3.4 million. This included increases of $3.5 million in salaries and benefits, $786,000 in supplies and maintenance, and $198,000 in contract services, offset by decreases in general government expenses and depreciation due to fully depreciated assets. As a result, the net position across all proprietary funds increased by $19.9 million.

General Fund Budgetary Highlights
A detailed budgetary comparison schedule for the year ended June 30, 2023, is presented as required supplementary information following the notes to the financial statements. The final budget amounts include changes that were approved by the City Council through June 30, 2023.

The following summarizes the original General Fund budget compared with the adjusted final budget for fiscal year 2022-23. The adjusted final budget includes Council approved adjustments as well as administrative budget adjustments in accordance with the City’s adopted fiscal policies and procedures.

As discussed below, differences between the original budget and the final amended budget reflect the following key changes:
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Management’s Discussion and Analysis
x Revenue budgets were decreased by $1.0 million primarily for Federal stimulus grants1 and an anticipated
negative FMV adjustment, offset by increases for sales transaction tax and transient occupancy tax. x Overall expenditure budgets were increased, however, by $2.7 million for the General Fund due to carryover of funding for contracts and commitments from the prior fiscal year. x Net Other sources (uses) are comprised of transfers in or out and were originally budgeted for $23.5 million and revised to $19.3 million in the Final budget. The budget decreased by approximately $4.2 million because of the Federal stimulus grant1 that was deposited directly into the appropriate funds instead of transferred.

Transfers may be used to provide resources from the General fund to other funds such as the Capital outlay fund or other non-major governmental funds.

The following table compares the actual results for revenues, expenditures, and fund balance with the final budget for the General Fund. As the table shows, revenues surpassed the final budget by nearly $8.7 million, while expenditures came in below the final budget by approximately $300,000. The net other sources and uses ended above budget by $4.6 million resulting in an ending fund balance that was $8.4 million greater than anticipated.

Detail for the Local Revenue Measure
The City’s Local Revenue Measure (one and a half percent transaction tax) is a sub-fund of the General Fund. The activities reflected in the Financial Statements of this report are provided for information regarding the use of the Measure’s according to the community’s priorities and the recommendation of the Revenue Enhancement Oversight Commission, a City Council advisory body, overseeing the allocations. For FY 2022-23, the following revenues and expenditures were recorded:
1 The initial budget included ARPA Federal stimulus revenue which would subsequently be transferred into the Infrastructure Investment Fund and the Parking Fund. Instead of the unnecessary step of transferring, staff deposited the revenue directly into the appropriate funds and posted a net-zero budget amendment to reduce the revenue budget and other uses (transfers out) budget in the General Fund.

General Fund 2022-23
Final Budget
2022-23
Actual
Positive (Negative)
Variance
Revenues 106,805,814 $ 115,463,540 $ 8,657,726 $
Expenditures 90,558,639 90,266,388 292,251
Other sources (uses) (19,320,374) (23,404,590) (4,084,216) Beginning fund balance 40,745,506 40,745,506 -
Ending fund balance 37,672,307 $ 42,538,068 $ 4,865,761 $ Ending fund balance
Nonspendable - 101,462 101,462
Restricted - - -
Committed - 19,620,444 19,620,444
Assigned - 14,540,709 14,540,709
Unassigned - 8,275,453 8,275,453
Total ending fund balance 37,672,307 $ 42,538,068 $ 4,865,761 $ Budget - Actual Comparison
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Management’s Discussion and Analysis
Capital Assets and Debt Administration
Capital Assets. Capital assets, including infrastructure, are those assets that are used in the performance of the City’s functions. As of June 30, 2023, the City’s investment in capital assets for its governmental and business type activities amounts increased to $531million (net of accumulated depreciation).

The investment in capital assets includes things such as: open space, park improvements, buildings and associated improvements, vehicles and equipment, streets, bikeways, water, wastewater, and storm drain systems.

Major capital asset2
expenditures during the fiscal year included the following:
x $1.4 million for the Orcutt Tank farm roundabout
x $24 million for Water Resource Recovery Facility upgrade project x $5.2 million for roadway sealing
x $355,000 for the Council Hearing Room improvements
x $2.3 million for fleet replacements
2 Additional information on the City’s capital assets can be found in Note 5 on page 64 to the basic financial statements.

Revenues
Local Transaction and Use Tax 30,508,731 $
Investment Income 7,899
$ 30,516,630
Expenditure Allocations by Priority
Address Homelessness 764,069 $
Community Safety and Emergency Preparedness 4,608,385
Creek and Flood Protection 1,292,816
Economic Development and Business Retention 874,875
Open Space/Natural Areas Preservation and Maintenance 1,439,019 Other Services and Projects 2,528,429
Protect Financial Stability 404,558
Safe and Clean Public Areas 3,362,300
Street Maintenance and Transportation (incl bike and ped improvements) 9,405,702 Youth/Senior Services and Recreation Facilities 2,096,992 Allocation to Capital Reserve 3,604,500
$ 30,381,645
Expenditures on Legacy Projects (projects funded before 2022-23) Legacy Projects 523,861 $
Net Change in Fund Balance (388,876) $
Fund Balance Beginning of Year 5,696,864
Fund Balance End of Year 5,307,988 $
Encumbered for Legacy Projects (1,435,051)
Available Fund Balance $ 3,872,937
Local Transaction Tax Measure Funding Schedule
For the Fiscal Year Ended June 30, 2023
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Management’s Discussion and Analysis
x $4.3 million for the Calle Joaquin sewer lift station x $1.7 million for the North Chorro Neighborhood greenway Long-Term Debt. As of June 30, 2023, the City’s long-term debt has increased by $17.6 million to $160.5 million outstanding. The increase is due to large debt financed projects in the Water and Sewer funds adding over $18 million to the business-type activities long-term debt as loan proceeds were drawn down to offset the related capital spending.

Within governmental activities, several loans were paid off, lowering the debt burden by $645,000 from the previous year. In addition, the City recognized a total of $458,000 subscription-based IT arrangements (SBITAs) in accordance with the implementation of GASB 96.

The California Government Code provides for a limit on debt secured by real property of 3.75% based on market value. The City’s debt management policy, however, sets a lower debt limit of 2% of assessed valuation. As of June 30, 2023, 2% of the assessed valuation was $227 million3 . As of June 30, 2023, the City did not have any general obligation debt subject to the limit. Additional information about the City’s long-term debt can be found in Note 7 to the basic financial statements.

Economic Factors and Next Year’s Budget and Rates
The fiscal outlook for the City remains positive, having weathered the economic impacts and reverberations of COVID-19, however new uncertainty related to unprecedented inflationary pressures in addition to unanticipated costs related to storms occurring in January and March of 2023 which impacted the development of the two-year Financial Plan. Nevertheless, the City was able to use operating reserves to pay for storm costs and is actively working to maximize reimbursement (i.e. 93.5%) for eligible costs from state and federal sources.

On June 6, 2023, the City Council adopted the 2023-25 Financial Plan and the 2023-24 budget with an appropriation of $240 million for the fiscal year and $432 million over the two-year financial plan period. The appropriated budgets remain high throughout the next financial plan due to continued capital investments and related debt issuances for the Cultural Arts District Parking Structure. The overall Financial Plan presents an ambitious work program lead by the four major City goals of Economic Recovery, Resiliency & Fiscal Sustainability, Diversity, Equity, and Inclusion, Housing and Homelessness, and Climate Action, Open Space, and Sustainable Transportation.

The 2023-25 Financial Plan assumes a flattening of most revenue types followed by conservative growth in the outer years of the forecast. Sales tax revenue remained incredibly strong through FY 2022-23, though there is evidence of a slight cooling, which was programmed into the budget. Property Tax revenue also continues to grow steadily and remains the City’s most stable revenue source.
3 Based on the San Luis Obispo County Assessor’s 2022-23 Annual Valuation report. 19

Management’s Discussion and Analysis
During FY 2022-23, the City recorded an all-time high in property taxes, nearly 4% higher than the prior year due to an attractive and flourishing real estate market. However, data shows that the number of home sales was down 9.5% in July 2023 compared to July 2022, but the median sale price was down only 3.1%. Based on the latest estimates from the County Assessor’s Office, there will be 4% growth in FY 2023-24.

Tourism in the City remained strong, resulting in $11 million in transient occupancy tax (TOT) contributing to the general fund and outperforming the budget by 22%. Tourism promotion continues to be led by the City’s Tourism Business Improvement District (TBID) and through the Promotional Coordinating Committee (PCC), the City awarded $200,000 in grant funding to local non-profit organizations through two grant opportunities in the fiscal year, the Arts & Culture Recovery Grant (ACRG) and the Cultural Grants-In-Aid (GIA program).

Water Rates. The City adopted rate increases of 8.5% effective July 1, 2023, and 7.5% effective July 1, 2024.

Proposed rate increases are higher than historic averages and are largely necessitated by macroeconomic conditions.

An additional driver was the deferral and reduction of rates in FY 2020-21 and FY 2021-22 which was done to address the uncertainties the community was experiencing during COVID-19. The Utilities Department estimates that the deferral and reduction resulted in a $1.4 million in reduced revenue between July 2020 and June 2022.

Sewer Rates. An overall fund-level rate increases of 4% went into effect July 1, 2023, for the Sewer Fund and an additional 4% effective July 1, 2024. Rate increases are largely necessitated by macroeconomic conditions which have resulted in increased operational and capital delivery costs. The City adopts its water and sewer rates with the twoyear Financial Plan and in accordance with Proposition 218 requirements. As such, notifications were sent to all rate payers in April 2023 and the rates subsequently adopted in a public hearing by the City Council on June 6, 2023. 20

Management’s Discussion and Analysis
Parking Rates. In the first month of FY 2022-23 the Parking Fund began seeing pre-COVID19 demand. It continues to assist economic recovery by offering free parking during holiday times to spur economic activity in the downtown.

The City Council approved rate increases to hourly and paid parking effective July 1, 2023, and July 1, 2025, to satisfy debt service obligations associated with the new Cultural Arts District Parking Structure. Additionally, the Parking Fund is required to provide funding for ongoing maintenance and repair to existing assets. The City Council took action in October 2023 to offer a free hour in all parking structures and to provide free parking on Sunday in the parking structure. These actions will require revenue or expenditure adjustments in the future years as these program changes are projected to otherwise deplete unappropriated fund balance by 2027-28 fiscal year. Lastly, the City Council recently authorized release of a Request for Proposal (RFP) to conduct a rate assessment during FY 2023-24.

Staff continues to work with communications consultants to share changes in parking rates and programs to ensure that the community understands parking programs and rates.

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. 21

22

BASIC FINANCIAL STATEMENTS
23

24

City of San Luis Obispo, California
Government-Wide Financial Statements
For the Fiscal Year Ended June 30, 2023
The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private-sector business.

The statement of net position presents information on all the City’s assets and deferred outflows, as well as liabilities and deferred inflows, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.

The statement of activities presents information showing how the City’s net position changed during the current fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, all the current fiscal year’s revenues and expenses are considered regardless of when cash is received or paid (e.g., earned but unused vacation leave or uncollected taxes).

Government-wide financial statements distinguish City governmental activities that are principally supported by taxes and intergovernmental revenues from other business-type activities that are intended to recover all or a significant portion of their costs through user fees and charges. Governmental activities include public safety, transportation, community development, leisure, cultural and social services, and general government. Businesstype activities include water, wastewater, parking, and transit. 25

26

Governmental
Activities
Business-Type
Activities Total
Assets
Current assets:

Cash and investments $ 110,150,045 $ 113,765,075 $ 223,915,120 Taxes receivable 12,488,520 - 12,488,520
Accounts receivable 1,554,679 8,666,571 10,221,250
Accrued interest receivable 3,406,216 1,181,544 4,587,760 Prepaid items and other assets 358,181 - 358,181
Lease receivables 137,224 102,280 239,504
Loans receivable 12,306,707 2,274,934 14,581,641
Total current assets 140,401,572 125,990,404 266,391,976 Noncurrent assets:

Cash and investments held by fiscal agent 421,509 38,899 460,408 Investment in joint venture - 3,223,425 3,223,425
Lease receivables 982,193 36,493,618 37,475,811
Nondepreciable capital assets 50,079,281 154,873,578 204,952,859 Depreciable capital assets (net of accumulated
depreciation) 173,902,300 153,059,108 326,961,408
Total noncurrent assets 225,385,283 347,688,628 573,073,911 Total assets 365,786,855 473,679,032 839,465,887
Deferred Outflows of Resources
Other post-employment benefits related 1,895,495 936,560 2,832,055 Pension related 54,473,788 8,272,895 62,746,683
Unamortized loss on refunding of debt 186,844 149,234 336,078 Total deferred outflows of resources 56,556,127 9,358,689 65,914,816 Liabilities
Current liabilities:

Accounts payable 7,577,478 8,018,364 15,595,842
Accrued salaries 1,400,845 272,042 1,672,887
Unearned revenue 13,149,917 7,009,295 20,159,212
Interest payable 91,383 153,156 244,539
Other liabilities 695,679 - 695,679
Compensated absence - due within one year 2,345,410 463,367 2,808,777 Long-term debt - due within one year 1,526,136 2,786,844 4,312,980 Total current liabilities 26,786,848 18,703,068 45,489,916 Noncurrent liabilities:

Compensated absence - due in more than on year 1,005,176 198,584 1,203,760 Long-term debt - due in more than one year 17,364,941 134,848,947 152,213,888 Net OPEB liability 3,537,061 1,747,656 5,284,717
Net pension liability 143,624,254 30,627,746 174,252,000 Total noncurrent liabilities 165,531,432 167,422,933 332,954,365 Total liabilities 192,318,280 186,126,001 378,444,281
Deferred Inflows of Resources
Other post-employment benefits related 801,429 395,985 1,197,414 Pension related 9,092,391 186,098 9,278,489
Lease related 1,057,066 36,044,016 37,101,082
Total deferred inflows of resources 10,950,886 36,626,099 47,576,985 Net Position
Net investment in capital assets 205,324,234 170,471,787 375,796,021 Restricted
Debt service 2,141,431 38,899 2,180,330
Transportation projects 8,859,190 1,614,326 10,473,516
Affordable housing programs 14,940,368 - 14,940,368
Impact fee programs 11,271,882 - 11,271,882
Parkland development programs 3,358,485 - 3,358,485
Public art programs 1,269,844 - 1,269,844
Tourism programs 1,426,625 - 1,426,625
Subsequent year expenditures 68,456 - 68,456
Claims 358,181 - 358,181
Unrestricted (29,944,880) 88,160,609 58,215,729
Total net position $ 260,285,621 219,073,816 $ $ 479,359,437 City of San Luis Obispo, California
Statement of Net Position
June 30, 2023
The accompanying notes are an integral part of these financial statements. 27

City of San Luis Obispo, California
Statement of Activities
For the Fiscal Year Ended June 30, 2023
Functions/Programs Expenses
Charges for
Services
Operating
Grants and
Contributions
Capital Grants
and
Contributions
Governmental
Activities
Business-type
Activities Total
Governmental activities:

Public safety 26,828,837 $ 2,847,705 $ 945,134 $ - $ (23,035,998) $ - $ (23,035,998) $ Transportation 10,052,069 955,012 2,372,030 199,312 (6,525,715) - (6,525,715) Leisure, culture and social services 11,552,865 4,234,538 - - (7,318,327) - (7,318,327) Community development 14,768,484 10,164,525 1,858,022 - (2,745,937) - (2,745,937) General government 25,628,303 734,991 156,471 1,621 (24,735,220) - (24,735,220) Interest on long-term debt 681,023 - - - (681,023) - (681,023) Total governmental activities 89,511,581 18,936,771 5,331,657 200,933 (65,042,220) - (65,042,220) Business-type activities:

Water 22,152,285 27,720,676 425,142 - - 5,993,533 5,993,533Sewer 13,417,264 22,341,314 1,424,328 - - 10,348,378 10,348,378 Parking 5,063,501 6,022,372 700,000 - - 1,658,871 1,658,871 Transit 4,482,763 809,969 4,806,426 - - 1,133,632 1,133,632 Total business-type activities 45,115,813 56,894,331 7,355,896 - - 19,134,414 19,134,414 Total primary government 134,627,394 $ 75,831,102 $ 12,687,553 $ 200,933 $ (65,042,220) 19,134,414 (45,907,806) General revenues and transfers:

General sales and use taxes 21,865,468 - 21,865,468
Transaction and use tax - Local Revenue Measure 30,508,731 - 30,508,731Property tax (including real property transfer tax) 15,635,545 - 15,635,545 Transient occupancy tax (TOT) 11,037,037 - 11,037,037Utility users tax 6,904,194 - 6,904,194Property tax-in-lieu of vehicle license fees 6,283,397 - 6,283,397 Franchise taxes 2,349,603 - 2,349,603
Business tax 3,281,010 - 3,281,010Cannabis Tax 1,127,744 - 1,127,744Other taxes 457,978 - 457,978 Total taxes 99,450,707 - 99,450,707
Unrestricted investment earnings 2,350,922 2,618,340 4,969,262 Other revenue 1,774,126 - 1,774,126Income from investment in joint venture - 391,993 391,993Transfers 2,243,612 (2,243,612) - Total general revenues and transfers 105,819,367 766,721 106,586,088 Change in net position 40,777,147 19,901,135 60,678,282 Net position, beginning of year 178,296,669 240,384,486 418,681,155Net position, end of year 219,073,816 $ 260,285,621 $ 479,359,437 $ Program Revenues
Net Revenues (Expenses) and
Changes in Net Position
The accompanying notes are an integral part of these financial statements. 28

City of San Luis Obispo, California
Governmental Funds Financial Statements
For the Fiscal Year Ended June 30, 2023
Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information reflects financial resources available in the near future to finance the City’s programs.

Major governmental funds are defined generally as having significant activities or balances in the current year. The funds described below were determined to be Major Governmental Funds by the City for the current fiscal year.

Individual nonmajor funds may be found in the Supplementary section.

General Fund
The General Fund is used for all the general revenues of the City not specifically levied or collected for other City funds, and the related expenditures. The major revenue sources for this Fund are property taxes, sales taxes, franchise fees, business licenses, unrestricted revenues from the state, fines and forfeitures and interest income.

Expenditures are made for community development, public safety, public works, and other services.

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. 29

30

General
Capital Outlay
Fund
Other
Governmental
Funds
Total
Governmental
Funds
Assets
Cash and investment $ 35,125,822 $ 28,970,961 $ 46,053,262 $ 110,150,045 Taxes receivable 12,302,164 - 186,356 12,488,520
Accounts receivable 1,165,830 7,606 305,251 1,478,687
Other receivables 75,992 - -75,992
Accrued interest receivable 345,164 - 3,061,054 3,406,218 Prepaid items 101,462 - - 101,462
Cash and investments held by fiscal agent - - 421,509 421,509 Loans receivable 240,637 - 12,066,069 12,306,706
Lease receivable 1,119,417 - - 1,119,417
Total assets $ 50,476,488 $ 28,978,567 $ 62,093,501 $ 141,548,556 Liabilities, Deferred Inflows of Resources
and Fund Balance
Liabilities:

Accounts payable $ 2,444,886 $ 4,480,849 $ 651,743 $ 7,577,478 Accrued liabilities 1,394,565 -6,280 1,400,845
Unearned revenue 2,036,173 - 11,113,744 13,149,917
Other liabilities 695,679 - - 695,679
Total liabilities 6,571,303 4,480,849 11,771,767 22,823,919 Deferred Inflows of Resources:

Lease related 1,057,066 - - 1,057,066
Unavailable revenue 310,051 - 6,124,933 6,434,984
Total deferred inflows of resources 1,367,117 - 6,124,933 7,492,050 Fund balance:

Nonspendable 101,462 - - 101,462
Restricted for:

Debt service - - 2,141,431 2,141,431
Transportation projects - - 7,567,001 7,567,001
Affordable housing programs - - 11,023,649 11,023,649
Impact fee programs - -10,519,226 10,519,226
Parkland development programs - - 3,205,116 3,205,116
Public art programs - - 1,269,844 1,269,844
Tourism programs - - 1,426,625 1,426,625
Public safety program - -68,456 68,456
Infrastructure improvement - - 157,805 157,805
Committed to:

General government programs 5,307,988 - - 5,307,988
Risk management 585,456 - - 585,456
Contingency fund 13,727,000 - - 13,727,000
Public safety program - 641,538 - 641,538
Assigned to:

CalPERS pension payment 2,000,000 - - 2,000,000
Solid Waste AB939 281,000 - - 281,000
Establishment of Section 115 Trust 2,000,000 - - 2,000,000 Revenue stabilization 2,000,000 - - 2,000,000
Development services 464,136 - - 464,136
SLO Repertory Theater Grant 3,940,000 - - 3,940,000
1,400,000 - - 1,400,000
Contingency fund - - 900,000 900,000
Subsequent year expenditures 2,455,573 24,497,718 5,278,534 32,231,825 Unassigned 8,275,453 - (2,424) 8,273,029
Total fund balance 42,538,068 24,497,718 44,196,801 111,232,587 Total liabilities, deferred inflows of resources
and fund balance $ 50,476,488 $ 28,978,567 $ 62,093,501 $ 141,548,556 City of San Luis Obispo, California
Balance Sheet
Governmental Funds
June 30, 2023
Tenant Improvement
The accompanying notes are an integral part of these financial statements. 31

Total fund balance - governmental funds $ 111,232,587
Capital assets at estimated historical cost $ 347,239,668 Accumulated depreciation (123,258,087)
223,981,581
6,434,984
1,895,495
54,473,788
186,844
256,718
Lease revenue bonds 16,779,250 $
Lease purchase financing 36,245
Lease liabilities 445,919
SBITA liabilities 407,466
Compensated absences 3,350,586
Conservation loan 46,886
Bond premium 1,175,311
Accrued interest payable 91,383
(22,333,046)
Net pension liability is not a current financial obligation and, therefore, is not reported in the governmental funds. (143,624,254)
Net OPEB liability is not a current financial obligation and, therefore, is not reported in the governmental funds. (3,537,061)
(801,429)
(9,092,391)
Total net position - governmental activities $ 219,073,816 City of San Luis Obispo, California
Reconciliation of the Governmental Funds Balance Sheet
to the Government-wide Statement of Net Position
June 30, 2023
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.

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.

The accompanying notes are an integral part of these financial statements. 32

General
Capital Outlay
Fund
Other
Governmental
Funds
Total
Governmental
Funds
Revenues:
$ - 21,865,468 $ - $ 21,865,468 $
- 30,508,731 - 30,508,731
- 15,474,655 160,890 15,635,545
- 11,037,037 - 11,037,037
- 6,904,194 - 6,904,194
- 6,283,397 - 6,283,397
- 2,349,603 - 2,349,603
- 3,281,010 - 3,281,010
1,127,744 - - 1,127,744
457,978 - - 457,978
- 195,991 - 195,991
- 1,568,512 431,360 1,999,872
124,382 1,973,896 4,266,426 6,364,704
90,837 11,695,505 6,632,210 18,418,552
90,944 739,819 433,482 1,264,245
Total revenues 115,463,540 306,163 11,924,368 127,694,071 Expenditures:

Current:

General government 23,423,444 219,731 3,132 23,646,307
Public safety 36,850,555 575,373 37,425,928 -
Transportation 5,294,069 114,635 5,408,704 -
Leisure, cultural and social services 11,015,177 - 11,015,177 - Community development 12,684,688 2,182,335 14,867,023 - Debt service:

Principal - 1,859,782 1,859,782 -
Interest and fiscal charges - 745,735 - 745,735
Capital outlay:

Public safety 44,014 1,533,401 1,577,415 -
Transportation 327,201 6,236,546 2,801,163 9,364,910
Leisure, cultural and social services 117,397 777,339 332,064 1,226,800 Community development 8,502,665 1,700,000 - 10,202,665
General government 509,843 918,169 937,420 2,365,432
Total expenditures 90,266,388 16,654,450 12,785,040 119,705,878 Revenues over (under) expenditures 25,197,152 (16,348,287) (860,672) 7,988,193 (Continued)
Miscellaneous
Real property transfer tax
Fines, forfeitures and penalties
Use of money and property
Subventions and grants
Charges for services
Utility users tax
Property tax in lieu of VLF
Franchise taxes
Business tax
Cannabis Tax
City of San Luis Obispo, California
Statements of Revenues, Expenditures, and
Changes in Fund Balances
Governmental Funds
For the Fiscal Year Ended June 30, 2023
Sales and use tax - general
Transaction and use tax - Local
Revenue Measure
Property tax (including real property
transfer tax)
Transient occupancy tax
The accompanying notes are an integral part of these financial statements. 33

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

Transfers in $ 4,314,247 $ 27,108,349 $ 8,313,193 $ 39,735,789 Transfers out (28,193,431) (9,298,746) - (37,492,177)
Other Financing Sources – SBITA 474,594 - 474,594 -
Total other financing sources (uses) (23,404,590) 27,108,349 (985,553) 2,718,206 Net change in fund balance 1,792,562 10,760,062 (1,846,225) 10,706,399 Fund balance, beginning of year 40,745,506 13,737,656 46,043,026 100,526,188 Fund balance, end of year $ 42,538,068 $ 24,497,718 $ 44,196,801 $ 111,232,587 City of San Luis Obispo, California
Statements of Revenues, Expenditures, and
Changes in Fund Balances
Governmental Funds
For the Fiscal Year Ended June 30, 2023
The accompanying notes are an integral part of these financial statements. 34

Total net change in fund balance - governmental funds $ 10,706,399 Expenditures for capital outlay - governmental funds $ 16,902,251 Transfer from business-type activities -
Depreciation expense (7,401,040)
9,501,211
Loss on disposal of capital asset (2,010)
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: 1,859,743 (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: (9,059)
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. (303,703) 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: (245,981)
353,060
17,412,671
1,427,129
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 926,881 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 (922,964) Total change in net position - governmental activities $ 40,777,147 City of San Luis Obispo, California
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, 2023
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.

The accompanying notes are an integral part of these financial statements. 35

36

City of San Luis Obispo, California
Proprietary Funds Financial Statements
For the Fiscal Year Ended June 30, 2023
Proprietary funds account for City operations financed and operated in a manner like a private business enterprise.

The intent of the City is that the cost of providing goods and services be financed primarily through user charges.

Proprietary funds are generally used to account for services for which the City charges customers; either outside customers or internal units/divisions of the City. Proprietary funds provide the same type of information as shown in the government-wide financial statements, only in more detail. The only type of proprietary fund the City maintains is enterprise funds. The Water, Sewer, Parking, and Transit Funds are presented as business-type activities in the government-wide financial statements. The City considers all four of its enterprise funds to be major 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.

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.
37

38

Water Sewer Parking Transit Totals
Assets
Current assets:

Cash and investment 38,287,076 $ 53,412,233 $ 14,085,333 $ 7,980,433 $ 113,765,075 $ Accounts receivable 3,596,691 2,785,774 135,270 2,148,836 8,666,571 Lease Receivables - - 102,280 - 102,280
Accrued interest receivable 341,287 287,456 525,805 26,996 1,181,544 Total current assets 42,225,054 56,485,463 14,848,688 10,156,265 123,715,470 Noncurrent assets:
278 34,580 4,041 - 38,899
Investment in joint venture 3,223,425 - - - 3,223,425
Loan Receivables 1,476,189 798,745 - - 2,274,934
Lease Receivables - - 36,493,618 - 36,493,618
Capital assets:

Land 945,926 2,176,114 5,947,455 - 9,069,495
SBITA assets 38,498 38,498 - - 76,996
Infrastructure 122,200,988 93,826,165 28,282,818 110,972 244,420,943 Buildings and improvements 19,139,492 5,074,388 1,101,218 5,212,278 30,527,376 Equipment 6,474,677 6,606,923 1,834,860 9,006,717 23,923,177 Construction in progress 5,606,755 133,499,315 4,289,786 2,408,227 145,804,083 Total capital assets 154,406,336 241,221,403 41,456,137 16,738,194 453,822,070 Less accumulated depreciation (66,302,568) (53,594,768) (15,618,289) (10,373,759) (145,889,384) Capital assets, net of
accumulated depreciation 88,103,768 187,626,635 25,837,848 6,364,435 307,932,686 Total noncurrent assets 92,837,962 188,425,658 62,335,507 6,364,435 349,963,562 Total assets 135,063,016 244,911,121 77,184,195 16,520,700 473,679,032 Deferred Outflows of Resources
Pension related 3,733,372 3,458,025 857,834 223,664 8,272,895 392,613 413,117 105,784 25,046 936,560
44,615 6,739 97,880 149,234 -
4,170,600 3,877,881 1,061,498 248,710 9,358,689
(Continued)
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
City of San Luis Obispo
Statement of Net Position
Business-Type Activities - Enterprise Funds
June 30, 2023
The accompanying notes are an integral part of these financial statements. 39

Water Sewer Parking Transit Totals
Liabilities
Current liabilities:

Accounts payable 418,379 $ 5,767,681 $ 916,536 $ 915,768 $ 8,018,364 $ Accrued liabilities 117,302 96,683 39,719 18,338 272,042 Compensated absences 240,237 172,919 37,072 13,139 463,367 Unearned revenue - - - 7,009,295 7,009,295
Interest payable 60,522 30,718 61,916 - 153,156
Due to other funds - - - - -
Current portion of long-term debt 1,127,607 1,070,675 588,562 2,786,844 - Total current liabilities 1,964,047 7,138,676 1,643,805 7,956,540 18,703,068 Noncurrent liabilities:

Compensated absences 102,959 74,107 15,888 5,630 198,584 Lease revenue bonds 8,851,738 266,349 3,868,788 12,986,875 - Installment sale agreement 2,869,551 - - 2,869,551 -
State loan/note payable 11,102,800 105,006,444 2,857,619 118,966,863 - SBITA liabilities 12,829 12,829 - 25,658 -
Net pension liability 13,541,944 12,955,621 3,358,609 771,572 30,627,746 792,430 725,475 185,767 43,984 1,747,656
Total noncurrent liabilities 34,404,700 121,910,376 10,286,671 821,186 167,422,933 Total liabilities 36,368,747 129,049,052 11,930,476 8,777,726 186,126,001 Deferred Inflows of Resources
Pension related 136,614 37,581 9,623 2,280 186,098
164,840 175,550 44,952 10,643 395,985
Lease related - 36,044,016 - 36,044,016 -
301,454 213,131 36,098,591 12,923 36,626,099
Net Position
Net investment in capital assets 67,066,238 78,420,355 18,620,759 6,364,435 170,471,787 Restricted:

Debt service 34,580 278 4,041 - 38,899
Transportation projects - - - 1,614,326 1,614,326
Unrestricted 35,462,597 41,106,186 11,591,826 - 88,160,609 Total net position $ 119,526,819 102,563,415 $ 30,216,62 $ 6 $ 7,978,761 $ 260,285,621 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, 2023
Enterprise Funds
Net other post-employment benefits
liability
The accompanying notes are an integral part of these financial statements. 40

Water Sewer Parking Transit Total
Operating revenues:

Charges for sales and service 23,856,235 $ 20,288,589 $ 4,606,611 $ 806,521 $ 49,557,956 $ Impact fees 3,616,307 1,980,886 - - 5,597,193
Fines and forfeitures - 23,383 1,369,093 - 1,392,476
Other revenues 248,134 48,456 46,668 3,448 346,706
Total operating revenues 27,720,676 22,341,314 6,022,372 809,969 56,894,331 Operating expenses:

Salaries and benefits 4,964,824 4,859,875 1,662,770 189,519 11,676,988 Supplies and maintenance 1,766,646 2,203,286 733,292 378,050 5,081,274 Contract services 10,263,880 1,914,015 879,767 3,090,050 16,147,712 General government 1,535,175 1,497,395 872,976 365,544 4,271,090 Depreciation 2,945,160 2,587,643 662,177 459,600 6,654,580 Total operating expenses 21,475,685 13,062,214 4,810,982 4,482,763 43,831,644 Operating income (loss) 6,244,991 9,279,100 1,211,390 (3,672,794) 13,062,687 Nonoperating revenues (expenses)
Use of money and property 599,966 684,191 1,234,817 99,366 2,618,340 Grants 425,142 1,424,328 700,000 4,806,426 7,355,896
Interest expense and fiscal charges (676,600) (355,050) (252,519) (1,284,169) - Income (loss) from investment
in joint venture 391,993 - - 391,993 -
Total nonoperating revenues
(expenses) 740,501 1,753,469 1,682,298 4,905,792 9,082,060 Income (loss) before transfers
and capital contributions 6,985,492 11,032,569 2,893,688 1,232,998 22,144,747 Capital Contributions
Transfers out (776,578) (1,076,388) (390,646) - (2,243,612) Total transfers (776,578) (1,076,388) (390,646) - (2,243,612) Change in net position 6,208,914 9,956,181 2,503,042 1,232,998 19,901,135 Net position, beginning of year 96,354,501 109,570,638 27,713,584 6,745,763 240,384,486 Net position, end of year $ 119,526,819 102,563,415 $ 30,216,62 $ 6 $ 7,978,761 $ 260,285,621 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, 2023
The accompanying notes are an integral part of these financial statements. 41

Water Sewer Parking Transit Total
Cash flows from operating activities:

Cash received from customers $ 28,522,740 $ 22,340,965 $ 5,916,382 $ 3,246,567 $ 60,026,654 (4,893,747) (12,743,639) (1,003,212) (3,022,778) (21,663,376) (1,497,395) (1,535,175) (872,976) (365,544) (4,271,090) (5,021,721) (1,672,720) (4,964,203) (189,741) (11,848,385) Net cash provided by (used in)
operating activities 9,222,205 10,985,620 2,367,474 (331,496) 22,243,803 Operating grants received 425,142 1,233,576 - 4,806,426 6,465,144 Transfers to other funds (776,578) (1,076,388) (390,646) - (2,243,612) 157,188 (351,436) 4,806,426 (390,646) 4,221,532
Cash flows from capital and related
financing activities:
(31,035,579) (2,226,356) (1,886,412) (2,325,169) (37,473,516) SBITA payment paid (13,200) (13,200) - - (26,400)
Principal paid on debt financing (1,624,674) (1,022,058) (567,098) - (3,213,830) Interest paid on debt financing (817,883) (358,881) (284,478) - (1,461,242) Proceeds from issuance of debt 122,214 21,384,848 - - 21,507,062 Net cash used in capital and
related financing activities (4,559,899) (11,044,870) (2,737,988) (2,325,169) (20,667,926) Cash flows from investing activities:

Use of money and property 504,117 587,114 718,100 83,001 1,892,332 Net cash provided by
investing activities 504,117 587,114 718,100 83,001 1,892,332 685,052 4,814,987 2,232,762 (43,060) 7,689,741
33,506,669 52,727,459 14,132,434 5,747,671 106,114,233
$ 38,321,656 $ 53,412,511 $ 14,089,374 $ 7,980,433 $ 113,803,974 (Continued)
Enterprise Funds
City of San Luis Obispo, California
Statement of Cash Flows
Business-Type Activities - Enterprise Funds
For the Fiscal Year Ended June 30, 2023
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. 42

City of San Luis Obispo, California
Statement of Cash Flows
Business-Type Activities - Enterprise Funds
For the Fiscal Year Ended June 30, 2023

Water Sewer Parking Transit Total
Operating income (loss) 6,244,991 $ 9,279,10 $ 0 $ 1,211,390 $ (3,672,794) $ 13,062,687 Depreciation 2,945,160 2,587,643 662,177 459,600 6,654,580 Accounts receivable 802,064 (349) (105,990) (271,533) 424,192 Accounts payable (713,113) (776,446) 609,847 445,322 (434,390) Unearned revenue - - 2,708,131 - 2,708,131
98,121 57,146 31,398 9,566 196,231
(52,363) (50,249) (12,867) (3,046) (118,525)
(102,655) (111,225) (28,481) (6,742) (249,103)
Net cash provided by (used in)
operating activities $ 9,222,205 $ 10,985,620 $ 2,367,474 $ (331,496) $ 22,243,803 Reconciliation of cash and investments to the balance sheet:

Cash and cash equivalents $ 38,287,076 $ 53,412,233 $ 14,085,333 $ 7,980,433 $ 113,765,075 34,580 278 4,041 38,899 -
Total cash and investments $ 38,321,656 $ 53,412,511 $ 14,089,374 $ 7,980,433 $ 113,803,974 Noncash investing, capital, and financing activities:

None
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
Enterprise Funds
The accompanying notes are an integral part of these financial statements. 43

44

City of San Luis Obispo, California
Fiduciary Funds Financial Statements
For the Fiscal Year Ended June 30, 2023
Custodial funds are the only type of fiduciary funds maintained by the City. These are used to account for resources held for the benefit of parties outside the primary government. Fiduciary funds are not reflected in the governmentwide financial statements because the resources of those funds are not available to support the City’s own programs.

An example of a custodial fund may include donations provided to the City to be utilized for specific purposes as well as other funds held in trust of another entity to be utilized for a specific purpose. A specific example is the Hazardous Materials Task Force Fund, created to provide special fire services around the County, which is funded by multiple county and city agencies. The accounting used for fiduciary funds is much like that used for proprietary funds. The Custodial Funds are presented with the fund financial statements in the supplementary information section.
45

46

Custodial Funds
Assets
Current assets:

Cash and investment $ 20,508,077
Accounts receivable 409,257
Accrued interest receivable 19,938
Capital assets, net of accumulated depreciation 726,355 Total assets 21,663,627
Liabilities
Accounts payable 141,008
Compensated absence 64,343
Accrued Salaries 13,860
Other liabilities 2,000
Total liabilities 221,211

NET POSITION
Restricted for
Individuals, organizations, and other governments 21,442,416 Total Net Position $ 21,442,416
City of San Luis Obispo, California
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2023
The accompanying notes are an integral part of these financial statements. 47

Custodial Funds
ADDITIONS:

Assessment revenue $ 958,259
Charges for services 1,189,924
Contribution from developers 1,128,775
Other revenue 1,219,589
Use of money and property 402,249
Total additions 4,979,966
DEDUCTIONS:

Administration expenses 1,081,763
Contractual services 1,371,337
Materials and supplies 184,392
Public programming 44,188
Use of developer deposits 1,217,765
Depreciation 63,283
Total deductions 3,962,728
Change in net position 1,017,238
NET POSITION:

Beginning of year, as restated 20,425,178
End of year $ 21,442,416
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Fiscal Year Ended June 30, 2023
City of San Luis Obispo, California
The accompanying notes are an integral part of these financial statements. 48

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
Page
Note 1: Summary of Significant Accounting Policies 51
Description of the Reporting Entity 51
Government-wide and Fund Financial Statements 51
Measurement Focus, Basis of Accounting and Basis of Presentation 51 Assets, Liabilities, and Net Position or Fund Balance 53 Reconciliation of Government-wide and Fund Financial Statements 56 Budgets and Budgetary Accounting 56
Fair Value Measurements 58
Note 2: Cash and Investments 58
Funds with Fiscal Agent 58
Investments 59
Note 3: Property Taxes 63
Note 4: Loan Receivable 64
Note 5: Capital Assets 64
Note 6: Leases 66
Note 7: Long Term Debt 68
Summary of Long-Term Debt 68
Governmental Activities Summary: 69
Revenue Bonds 69
Lease-Purchase Financing 70
2014 Energy Sources Conservation State Loan 71
Subscription Based Information Technology Arrangements 71 Business-Type Activities Summary: 72
Revenue Bonds 72
Loans 73
Installment Sale Agreements 74
Special Assessment Debt Without City Commitment 74
Note 8: Pension Plans 75
Agent-Multiple Employer Plan 75
General Information about the Pension Plan 75
Net Pension Liability 76
Changes in the Net Pension Liability 78
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions 79 Cost-Sharing Employer Plan 79
General Information about the Pension Plan 79
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions 81 49

City of San Luis Obispo, California
Notes to the Financial Statements
Table of Contents
June 30, 2023

Page
Payable to the Pension Plan 83
Note 9: Other Post-Employment Benefits (OPEB) 84
General Information about OPEB 84
Net OPEB Liability 85
Changes in the Net OPEB Liability 86
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB 87 Payable to the OPEB Plan 88
Note 10: Deferred Compensation Plan 88
Note 11: Interfund Transactions 89
Note 12: Joint Ventures, Jointly Governed Organizations and Operating Agreements 89 Whale Rock Commission 89
San Luis Obispo Regional Transit Authority 90
San Luis Obispo Council of Governments 91
Nacimiento Water Supply Project 91
Note 13: Risk Management 92
California Joint Powers Insurance Authority 92
Self-Insurance Programs of the Authority 92
Adequacy of Protection 93
Self-Insurance 93
Note 14: Commitments and Contingencies 94
Litigation 94
Grant Awards 94
Regional Transit Authority Pension Expense 94
Note 15: Construction and Other Significant Commitments 95 Note 16: Fund Balance Deficiency 95
Note 17: Subsequent Events 95
Note 18: New Accounting Standards 95
Accounting Standards Adopted 95
New Accounting Standards 96
Note 19: Prior Period Adjustments 96
50

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023
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.
51

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

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.
52

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

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. 53

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

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
54

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

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, 2022
Measurement Period July 1, 2021 to June 30, 2022
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. 55

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

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. 56

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

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 2023 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. 57

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

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, 2023, 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. 58

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

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, 2023, cash and investments consisted of the following:

Fair
Value
Percent of
Portfolio
Cash and cash equivalents 36,099,803 $ 14.74%
Investments:

State Local Agency Investment Fund 44,574,587 18.20%
U.S. Treasury Bond / Note 61,547,100 25.13%
Federal Agency Bond / Note 20,434,373 8.34%
Corporate Note 14,293,670 5.84%
Municipal Bond/Note 2,086,690 0.85%
Bank Note 624,470 0.26%
Asset-Backed Securities 432,685 0.18%
Negotiable Certificates of Deposit 979,368 0.40%
Non-Negotiable Certificates of Deposit 2,038,589 0.83%
Money Market Funds 61,772,270 25.23%
Total investments 208,783,802 85.26%
Total cash and investments $ 244,883,605 100.00%
59

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

Note 2: Cash and Investments (Continued)
At June 30, 2023, 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, 2023:

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 $37,966,902 at June 30, 2023 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 $ 110,150,045 $ 113,765,075 $ 20,508,077 $ 244,423,197 Cash and investments held by fiscal agents 421,509 38,899 460,408 - Total cash and investments $ 110,571,554 $ 113,803,974 $ 20,508,077 $ 244,883,605 Government-Wide Statement of
Net Position
Fair Value
Investments by fair value hierarchy
U.S. Treasury Bond / Note 61,547,100 $ - $ 61,547,100 $ $ - Federal Agency Bond / Note 20,434,373 20,434,373 - -
Corporate Note 14,293,670 14,293,670 - -
Municipal Bond/Note 2,086,690 2,086,690 - -
Bank Note 624,470 624,470 - -
Asset-Backed Securities 432,685 432,685 - -
Negotiable Certificates of Deposit 979,368 979,368 - -
Total investments by fair value hierarchy 100,398,356 $ 100,398,356 - $ $ - Investments not subject to fair value hierarchy
State Local Agency Investment Fund 44,574,587
Non-Negotiable Certificates of Deposit 2,038,589
Money Market Funds 61,772,270
Total investments not subject to fair value hierarchy 108,385,446 Total investments measured at fair value 208,783,802 $
Q Fair Value Measurements Using
Prices in
Active
Markets for
Identical
Assets (Level
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobserva
ble Inputs
(Level 3)
60

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

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 $ 44,574,587 $ 44,574,587 - $ $ - $ - U.S. Treasury Bond / Note 61,547,100 13,739,170 - 47,807,930 - Federal Agency Bond / Note 20,434,373 8,534,696 - 11,899,677 - Corporate Note 14,293,670 1,362,594 - 12,931,076 -
Municipal Bond/Note 2,086,690 1,173,594 - 913,096 -
Bank Note 624,470 - 624,470 - -
Asset-Backed Securities 432,685 - 4,303 428,382 -
Negotiable Certificates of Deposit 979,368 979,368 - - - Non-Negotiable Certificates of Deposit 2,038,589 2,038,589 - - - Money Market Funds 61,772,270 61,772,270 - - -
Total maturities $ 208,783,802 $ 61,772,270 $ 72,406,901 $ 74,604,631 $ - Cash in banks and on hand 36,099,803
$ 244,883,605
61

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

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, 2023:

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+ $ 20,434,373
Corporate Notes AAA 1,562,116
AA 1,598,703
AA- 1,481,391
A+ 3,131,800
A 3,873,831
A- 2,645,829
Total Corporate Notes 14,293,670
Municipal Bond/Note AAA 588,874
AA+ 289,205
AA 228,202
AA- 980,409
Bank Note A 624,470
Asset-Backed Securities AAA 432,685
Negotiable Certificates of Deposit A 979,368
Not Applicable:

U.S. Treasury Bonds / Notes 61,547,100
Not Rated:

State Local Agency Investment Fund 44,574,587
Non-Negotiable Certificates of Deposit 2,038,589
Money Market Mutual Funds 61,772,270
Total Investments $ 208,783,802
62

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

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, 2023 have been accrued since they will be collected within 60 days subsequent to year-end. 63

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

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, 2023, 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 $8.6 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, 2023, 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, 2023, the Affordable Housing Fund had eight outstanding down payment assistance loans with a principal balance of $360,335. 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, 2023, 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, 2023, 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%.

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.

Total Balance
Description Loan Receivable Interest Receivable June 30, 2023 Governmental Funds:

Affordable Housing Loan 8,490,688 $ 2,008,223 $ 10,498,911 $ BEGIN Homeownership Loan 130,000 52,675 182,675
Down Payment Assistance 360,335 75,922 436,257
CDBG 1,112,944 704,908 1,817,852
Impact Fee Loan 2,212,740 175,711 2,388,451
Total governmental funds 12,306,707 3,017,439 15,324,146 Enterprise Funds:

Impact Fee Loan 2,274,934 333,427 2,608,361
Total enterprise funds 2,274,934 333,427 2,608,361
Total Primary Government 14,581,641 $ 3,350,866 $ 17,932,507 $ 64

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

Note 5: Capital Assets (Continued)
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, 2023 was as follows:

Balance
June 30, 2022 Balance
(as restated) Additions Deletions Transfers June 30, 2023 Governmental activities:

Capital assets not being depreciated:

Land 32,263,736 $ - $ - $ - $ 32,263,736 $
Construction in progress 10,637,004 16,902,253 - (10,370,342) 17,168,915 Public art 646,630 - - - 646,630
Total capital assets not
being depreciated 43,547,370 16,902,253 - (10,370,342) 50,079,281 Capital assets being depreciated:

Infrastructure 205,710,266 - - 6,358,356 212,068,622
Accumulated Depreciation (74,431,463) (4,294,004) - - (78,725,467) Buildings and improvements 48,505,114 1,089,669 49,594,783 Accumulated Depreciation (22,570,539) (1,000,669) - - (23,571,208) Equipment 32,330,177 - (742,072) 2,922,317 34,510,422
Accumulated Depreciation (19,955,036) (1,746,438) 740,062 - (20,961,412) Capital assets being amortized:

Right of use - Lease asset 157,527 579,204 - - 736,731
Accumulated Amortization (37,065) (152,886) - - (189,951) Subscription based I.T. agreeemnts 172,229 474,594 - - 646,823 Accumulated Amortization - (207,043) - - (207,043)
Total capital assets being
depreciated/amortized, net 169,881,210 (6,347,242) (2,010) 10,370,342 173,902,300 Governmental activities,
capital assets, net 213,256,351 $ 10,555,011 $ (2,010) $ - $ 223,981,581 $ Business-type activities:

Capital assets not being depreciated:

Land $ 9,069,495 $ - $ - $ - $ 9,069,495
Construction in progress 122,955,610 37,473,518 - (14,625,045) 145,804,083 Total capital assets not
being depreciated 132,025,105 37,473,518 - (14,625,045) 154,873,578 Capital assets being depreciated:

Infrastructure 230,867,848 - - 13,553,095 244,420,943
Accumulated Depreciation (108,076,404) (5,079,645) - (113,156,049) - Buildings and improvements 30,527,376 - - 30,527,376 -
Accumulated Depreciation (15,961,344) (599,380) - (16,560,724) - Equipment 22,938,836 - (87,609) 1,071,950 23,923,177
Accumulated Depreciation (15,284,663) (944,947) 82,665 (16,146,945) - Capital assets being amortized:

Subscription based I.T. agreeemnts - 76,996 - - 76,996
Accumulated Amortization - (25,666) - - (25,666)
Total capital assets being
depreciated, net 145,011,649 (6,572,642) (4,944) 14,625,045 153,059,108 Business-type activities,
capital assets, net 277,036,754 30,900,876 (4,944) 307,932,686 - Total Government-wide $ 490,293,105 $ 41,455,887 $ (6,954) $ 531,914,267 - $ 65

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

Note 5: Capital Assets (Continued)
Depreciation and amortization 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 2023, the City recognized $165,651 of lease revenue and $6,335 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 2023, the City recognized $6,542 of lease revenue and $5,769 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 2023, the City recognized $390,723 of lease revenue and $367,753 of interest revenue under the lease.

Governmental activities:

Public safety 570,330 $
Transportation 2,682,663
Culture and recreation 260,521
Community development 119,699
General government 3,767,827
Total depreciation - governmental activities 7,401,040
Business-type activities:

Water 2,945,161
Sewer 2,587,643
Parking 662,174
Transit 459,602
Total depreciation - business-type activities 6,654,580 Total Government-wide $ 14,055,620
66

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

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 2023, the City recognized $40,755 of lease revenue and $5,438 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 2023, the City recognized $45,744 of lease revenue and $2,571 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 2023, the City recognized $73,383 of lease revenue and $13,079 of interest revenue under the lease.

The future revenue payments as of June 30, 2023 are as follows:

Year Ending
June 30, Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest 2024 102,280 $ $ 917 $ 1,396 $ 5,736 $ 369,913 - $ $ 32,698 $ 4,791 $ 40,934 $ 1,330 $ 62,196 $ 11,908 $ 239,504 $ 394,595 2025 - - 1,642 5,661 370,064 - 34,489 4,082 43,481 65,718 4 10,602 145,330 390,413 2026 - - 1,940 5,592 371,080 - 36,377 3,348 - 69,344 - 9,257 107,661 389,277 2027 - - 2,237 5,513 372,105 - 38,325 2,574 - 73,112 - 7,839 113,674 388,031 2028 - - 2,551 5,437 374,167 - 40,349 1,765 - 77,008 - 6,362 119,908 387,731 2029-2033 - 18,110 - 25,328 1,879,718 - 87,079 906 - 256,119 - 9,671 361,308 1,915,623 2034-2038 - 29,112 - 20,973 1,897,112 - - - - - - 29,112 - 1,918,085 2039-2043 - 43,398 - 14,322 1,907,282 - - - - - - 43,398 - 1,921,604 2044-2048 - 61,802 - 4,703 1,910,058 - - - - - - 61,802 - 1,914,761 2049-2053 - - - - 1,901,196 - - - - - - - 1,901,196 -
2054-2058 - - - - 1,882,110 - - - - - - - 1,882,110 -
2059-2063 - - - - 1,850,050 7,853 - - - - - - 1,850,050 7,853 2064-2068 - - - 1,057,179 - 1,804,432 - - - - - 1,057,179 - 1,804,432 2069-2073 - - - 1,396,048 - 1,739,908 - - - - - 1,396,048 - 1,739,908 2074-2078 - - - 1,824,027 - 1,657,067 - - - - - 1,824,027 - 1,657,067 2079-2083 - - - 2,266,909 - 1,552,723 - - - - - 2,266,909 - 1,552,723 2084-2088 - - - 2,765,362 - 1,424,328 - - - - - 2,765,362 - 1,424,328 2089-2093 - - - 3,382,050 - 1,266,258 - - - - - 3,382,050 - 1,266,258 2094-2098 - - - 4,023,770 - 1,077,840 - - - - - 4,023,770 - 1,077,840 2099-2103 - - - 4,742,095 - 853,217 - - - - - 4,742,095 - 853,217 2104-2108 - - - 5,621,170 - 589,608 - - - - - 5,621,170 - 589,608 2109-2113 - - - 6,534,924 - 280,398 - - - - - 6,534,924 - 280,398 2114-2115 - - - 2,872,231 - 14,579 - - - - - 2,872,231 - 14,579 Total 102,280 $ $ 162,188 917 $ $ 36,493,618 93,265 $ 27,345,213 $ 269,317 $ $ 17,466 $ 84,415 $ 1,334 $ 603,497 $ 37,715,315 55,639 $ 27,513,834 $ James Town Crown Castle Garden St Laguna ATT Laguna SBA Santa Rosa St Total 67

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

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, 2023:

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
June 30, 2022 Balance Due Within
(as restated) Additions Deductions June 30, 2023 One Year Governmental activities:
2012 Lease revenue refunding bonds 2,700,000 $ - $ (285,000) $ 2,415,000 $ 305,000 $ 2014 Lease revenue bonds 6,460,000 - (185,000) 6,275,000 190,000 2018 Lease revenue refunding bonds 8,659,100 - (569,850) 8,089,250 596,050 Add: Unamortized bond premium 1,135,756 - (85,448) 1,050,308 - Total revenue bonds 18,954,856 - (1,125,298) 17,829,558 1,091,050 Lease liability 125,003 579,204 (133,285) 570,922 141,714 Subscription based I.T. agreeemnts 172,229 474,594 (239,358) 407,465 210,241 Lease-purchase financing 390,420 - (354,175) 36,245 36,245 Conservation Loan 139,961 - (93,074) 46,887 46,886
Total long-term debt,
governmental activities 19,782,469 $ 1,053,798 $ (1,945,190) $ 18,891,077 $ 1,526,136 $ Compensated absences 3,104,605 $ 3,475,021 $ (3,229,040) $ 3,350,586 $ 2,345,410 $ Business-type activities:
2012 Water revenue refunding bonds 550,000 $ - $ (550,000) $ - $ - $ 2018 Lease revenue refunding bonds 4,560,900 - (300,150) 4,260,750 313,949 2018 Water revenue refunding bonds 8,330,000 - (470,000) 7,860,000 495,000 Add: Unamortized bond premium 1,866,278 - (191,204) 1,675,074 - Total revenue bonds 15,307,178 - (1,511,354) 13,795,824 808,949 Subscription based I.T. agreeemnts - 76,996 (26,400) 50,596 24,938 Loans 99,918,648 21,507,062 (1,212,202) 120,213,508 1,246,645 Installment sale agreements 4,257,343 - (681,480) 3,575,863 706,312 Total long-term debt,
business-type activities 119,483,169 21,584,058 (3,431,436) 137,635,791 2,786,844 Compensated absences 526,111 846,283 (710,443) 661,951 463,367 Total Government-wide $ 142,896,354 $ 26,959,160 $ (9,316,109) $ 160,539,405 $ 4,334,913 68

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

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, 2023, the principal amount outstanding on the bonds was $2,415,000. 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, 2023.

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, 2023, the unamortized premium was $123,520. 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, 2023, the principal amount outstanding on the bonds was $6,275,000.

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, 2023, the unamortized premium was $111,609. 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, 2023, the principal amount outstanding that pertains to governmental activities was $8,089,250 of the total $12,350,000 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, 2023, the unamortized premium for governmental activities was $815,179.

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, 2023, the value of the lease liability is $92,775. The City is required to make monthly payments of $670 and increase annually by 4% 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, 2023 of $157,442 with accumulated amortization of $74,090 is included in the intangible assets on the capital assets activities table found in Note 5 above.
69

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

Note 7: Long Term Debt (Continued)
Lease Liability (994 Mill Street)
On June 9, 2022, the City entered into a 3-year Lease Agreement as lessee of a site for the use of 11 parking spaces. The term of this lease commenced on July 1, 2022. The City pays the landlord $10,037.7 annually with a 3% increase. An initial lease liability was recorded in the amount of $579,204. As of June 30, 2023, the value of the lease liability is $478,147. The lease has an interest rate of 4%. The value of the right to use asset as of June 30, 2023 of $579,204 with accumulated amortization of $115,841 is included in the intangible assets on the capital assets activities table found in Note 5 above.

At June 30, 2023, the aggregate maturities of the aforementioned governmental activities revenue bonds were as follows:

At June 30, 2023, the aggregate maturities of the aforementioned governmental lease liabilities were 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, 2023, the principal amount outstanding is $36,245.

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, 2023, the lease was paid off.

For the Year Ending June 30, Principal Interest Total
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 1,066,425 480,179 1,546,604
2029-2033 4,801,675 1,724,463 6,526,138
2034-2038 3,749,050 865,710 4,614,760
2039-2043 1,931,850 348,294 2,280,144
2044-2045 805,000 32,500 837,500
$ 16,779,250 $ 5,858,726 $ 22,637,976
Unamortized bond Premium 1,050,308 1,050,308 -
Total $ 17,829,558 $ 5,858,726 $ 23,688,284
For the Year Ending June 30, Principal Interest Total
2024 141,781 $ 19,321 $ 161,102 $
2025 152,705 13,481 166,186
2026 143,763 7,616 151,379
2027 132,673 2,475 135,148
$ 42,893 570,922 $ 613,815 $
70

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

Note 7: Long Term Debt (Continued)
At June 30, 2023, 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, 2023, the principal amount outstanding is $46,887.

At June 30, 2023, the aggregate maturities of the aforementioned governmental activities conservation loan is as follows:

Subscription Based Information Technology Arrangements
Application Software Technology (AST). AST arrangement is a five-year agreement, initiated on September 1, 2021 with an annual payment of $20,400. The city has used a 2.88% for this arrangement based on similar debt during the same fiscal year. There are no options to extend the arrangement or purchase the software. eScribe. eScribe arrangement is a three-year arrangement, initiated on February 17, 2021. The city pays the vendor $18,110 annually with 2.5% increase. The city has used a 2.85% for this arrangement based on similar debt during the same fiscal year. The arrangement will automatically renew for an additional Term unless notice of cancellation is received 60 days prior to the expiration of the Term.

ESRI ArcGIS Online. ESRI ArcGIS Online arrangement is a three-year arrangement, initiated on July 8, 2020. The payment amount on the city is based on the price of quote. The city has used a 2.85% for this arrangement based on similar debt during the same fiscal year. The city decided to sign another three-year renewal for the arrangement until July 6, 2026.

Office 365. Office 365 arrangement is a three-year agreement, initiated on July 1, 2022 with an annual payment of $189,126. The city has used a 2.85% for this arrangement based on similar debt during the same fiscal year. An extended term feature that allows Online Services to continue month-to-month is available. The city allocates this arrangement for both governmental and business entity funds.

At June 30, 2023, the aggregate maturities of the aforementioned subscription based I.T. agreements were as follows:

For the Year Ending June 30, Principal Interest Total
2024 $ 36,245 $ 289 $ 36,534
$ 36,245 $ 289 $ 36,534
For the Year Ending June 30, Principal Interest Total
2024 $ 46,887 $ 235 $ 47,122
$ 46,887 $ 235 $ 47,122
For the Year Ending June 30, Principal Interest Total
2024 $ 235,180 $ 6,737 $ 241,917
2025 203,059 833 203,892
2026 19,822 246 20,068
$ 458,061 $ 7,816 $ 465,877
71

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

Note 7: Long Term Debt (Continued)
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, 2023, the bonds were paid off. 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, 2023.

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, 2023, the unamortized premium was $35,455.

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, 2023, principal and interest paid, and total customer net revenues were $572,000 and $6,173,810, respectively.
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, 2023, the principal amount outstanding that pertains to business-type activities was $4,260,750 of the total $12,350,000 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, 2023, the unamortized premium that pertains to business-type activities was $429,370.

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, 2023, the principal amount outstanding on the bonds was $7,860,000.

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, 2023, principal and interest paid, and total customer net revenues were $886,500 and $6,173,810, 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, 2023, the unamortized premium was $1,210,246.
72

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

Note 7: Long Term Debt (Continued)
At June 30, 2023, the aggregate maturities of the business-type revenue bonds were as follows:

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, 2023, the principal amount outstanding on the loan was $3,168,631.
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, 2023, the principal amount outstanding on the loan was $6,304,106.

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, 2023, principal and interest paid, and total customer net revenues were $532,431 and $10,570,048, 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, 2023, the City had partially drawn down the loan and had an outstanding principal balance of $99,035,123. 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, 2023, the City had partially drawn down the loan and had an outstanding principal balance of $11,705,648.

For the Year Ending June 30, Principal Interest Total
2024 $ 808,949 $ 575,732 $ 1,953,388
2025 846,026 538,424 1,384,682
2026 886,550 496,122 1,384,449
2027 813,225 451,794 1,382,672
2028 853,575 411,134 1,264,709
2029-2033 4,958,325 1,368,100 6,326,425
2034-2038 2,860,950 238,212 3,099,162
2039 93,150 3,256 96,406
Subtotal 12,120,750 4,082,774 16,203,524
Unamortized bond Premium 1,675,074 - 1,675,074
Total $ 13,795,824 $ 4,082,774 $ 17,878,598
73

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

Note 7: Long Term Debt (Continued)
At June 30, 2023, the aggregate maturities of the aforementioned business-type loans were as follows:

Installment Sale Agreements
2008 Suntrust Loan. 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, 2023, the principal amount outstanding on the loan was $180,000.

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, 2023, the principal amount outstanding on the loan was $3,395,863.

At June 30, 2023, 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.

Special Assessment Debt Without City Commitment
Special assessment districts have been established in various parts of the City to provide improvements to properties located in those districts. Properties in these districts are assessed for the cost of improvements; these assessments are payable solely by property owners over the term of the debt issued to finance these improvements. The City is not legally or morally obligated to pay these debts or be the purchaser of last resort of any foreclosed properties in these special assessment districts, nor is it obligated to advance City funds to repay these debts in the event of default by any of these districts. At June 30, 2023, the balances of these Districts’ outstanding debt were as follows:

City of San Luis Obispo Community Facilities District No.2019-1 Special Tax Bonds, Series 2021 $19,660,000 For the Year Ending June 30, Principal Interest Total
2024 $ 3,837,592 $ 2,367,252 $ 6,204,844
2025 3,917,359 2,285,150 6,202,509
2026 4,000,951 2,201,226 6,202,177
2027 4,086,434 2,115,400 6,201,834
2028 4,173,855 2,027,625 6,201,480
2029-2033 21,843,477 8,756,190 30,599,667
2034-2038 22,519,045 6,382,851 28,901,896
2039-2043 19,465,358 4,308,927 23,774,285
2044-2048 19,482,563 2,584,388 22,066,951
2049-2052 16,886,874 766,687 17,653,561
$ 120,213,508 $ 33,795,695 $ 154,009,201
For the Year Ending June 30, Principal Interest Total
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 590,071 26,164 616,235
2029 607,184 8,804 615,988
$ 3,575,863 $ 307,426 $ 3,883,289
74

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

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, 2023 are as follows:

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, 2023, are summarized as follows:

Net Pension Deferred Outflows Deferred Inflows Pension
Liability of Resources of Resources Expense
Miscellaneous Plan $ 25,881,246 91,395,035 $ 268,051 $ 11,152,609 $ Safety Plan 82,856,965 36,865,437 9,010,438 (8,082,850) Total Government-Wide $ 62,746,683 174,252,000 $ 9,278,489 $ 3,069,759 $ 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 rate 7.520% 7.520% 7.00% Required employer contribution rate 9.650% 9.650% 9.650% Required unfunded accrued liability - (1) - (1) $ 7,337,577 (1) -Combined with on or after January 1, 2013
Tiers within the Miscellaneous Plan
75

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

Note 8: Pension Plans (Continued)
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.

Employees Covered. As of the measurement date June 30, 2022, 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 $16,384,823.

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, 2022, using an annual actuarial valuation as of 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, 2021 actuarial valuation was determined using the following actuarial assumptions:

Miscellaneous Plan
Inactive employees or beneficiaries
currently receiving benefits 437
Inactive employees entitled to but
not yet receiving benefits 436
Active employees 324
Total 1,197
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:

Discount Rate
Inflation
Salary Increase
Mortality (1)
Post Retirement Benefit Increase
(1) The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study for the period from 2001 to 2019. Pre-retirement and Postretirement mortality rates include generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study The lesser of contract COLA or 2.30% until Purchasing Power Protection Allowance Floor on Purchasing Power applies, 2.30% Derived using CalPERS' Membership Data for all Funds
Varies by Entry Age and Service

2.30%

6.90%
Entry-Age Normal Cost Method
June 30, 2022
Miscellaneous Plan
June 30, 2021
76

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

Note 8: Pension Plans (Continued)
Discount Rate. The discount rate used to measure the total pension liability for the Plan was 6.90%. The projection of cash flows used to determine the discount rate for each Plan assumed that contributions from all plan members in the Public Employees Retirement Fund (PERF) will be made at the current member contribution rates that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, each Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members for all plans in the PERF. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability for the Plan.

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 took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated and, combined with risk estimates, are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the longterm projected portfolio return.

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

Assumed
Asset
Asset Class Allocation Real Return (1) (2)
Global Equity - Cap-weighted 30.0% 4.54%
Global Equity - Non-Cap-weighted 12.0% 3.84%
Private Equity 13.0% 7.28%
Treasury 5.0% 0.27%
Mortgage-backed Securities 5.0% 0.50%
Investment Grade Corporates 10.0% 1.56%
High Yield 5.0% 2.27%
Emerging Market Debt 5.0% 2.48%
Private Debt 5.0% 3.57%
Real Assets 15.0% 3.21%
Leverage -5.0% -0.59%
(1) An expected inflation of 2.30% used for this period (2) Figures are based on the 2021-22 Asset Liability Management Study Miscellaneous Plan
77

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

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, 2021 $ 243,823,734 $ 177,830,076 $ 65,993,658 Changes during the year:

Service cost 4,364,490 - 4,364,490
Interest on the total pension liability 17,090,797 17,090,797 - Changes in assumptions 8,123,651 - 8,123,651
Differences between expected and
actual experience 818,065 - 818,065
Contribution - employer - 16,384,823 (16,384,823)
Contribution - employee - 2,269,339 (2,269,339)
Net investment income - (13,547,758) 13,547,758
Benefit payments, including refunds
of employee contributions (14,509,974) (14,509,974) -
Administrative expense - (110,778) 110,778
Net changes 15,887,029 (9,514,348) 25,401,377
Balance at June 30, 2022 $ 259,710,763 $ 168,315,728 $ 91,395,035 Miscellaneous Plan
1% Decrease 5.90%
Net Pension Liability $ 124,485,873
Current Discount Rate 6.90%
Net Pension Liability $ 91,395,035
1% Increase 7.90%
Net Pension Liability $ 63,988,235
78

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

Note 8: Pension Plans (Continued)
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2023, the City’s pension expense for the Miscellaneous Plan was $11,152,609. At June 30, 2023, 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 $11,050,124 will be recognized as a reduction of the net pension liability in the year ended June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Payable to the Pension Plan
At June 30, 2023, the City reported a payable of $0 for the outstanding amount of contributions to the pension plan required for the year ended June 30, 2023.

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.

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.

Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to
measurement date 11,050,124 $ - $
Changes in assumptions 5,661,938 -
Differences between expected and
actual experiences 570,167 (268,051)
Net differences between projected and
actual earnings on plan investments 8,599,017 -
Total $ 25,881,246 $ (268,051)
Miscellaneous Plan
Measurement Period
Ended June 30 Amount
2023 3,879,551 $
2024 3,982,645
2025 1,512,783
2026 5,188,092
$ 14,563,071
Miscellaneous Plan
79

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

Note 8: Pension Plans (Continued)
Benefits Provided. CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of 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, 2023, are summarized as follows:

The Safety Tier 1 is closed to new entrants.

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 3% of pay toward the cost of the City’s share of the annual required contribution.

For the year ended June 30, 2023, the contributions recognized as part of net pension liabilities were $12,756,585.

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 25.640% 25.640% 19.870% 22.480% Required unfunded accrued liability payment $ 6,697,068 $ - (1) $ 35,296 16,915 $ 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 13.660% 13.660%
Required unfunded accrued liability payment $ 33,517 $ 1,300 (1) - Combined with Police Tier 1
Safety Tier 1 Safety Tier 2
80

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

Note 8: Pension Plans (Continued)
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2023, the City reported a net pension liability for its proportionate share of the Plan’s net pension liability of $82,856,965.

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, 2022, 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, 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, 2021 and 2022 was as follows:

For the year ended June 30, 2023, the City recognized pension income of $8,082,850 for the Safety Plan. At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Proportionate Share
Percentage share at 6/30/2021 1.08299%
Percentage share at 6/30/2022 0.71733%
Change - Increase/(Decrease) -0.36566%
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 10,016,823 $ - $ Changes in assumptions 8,354,490 -
Differences between expected and actual experiences 3,429,149 899,761 - 13,084,273
Net Difference between employer's contributions and
proprtionate chare of contributions 1,972,418 459,077
Change in employer's proportion 8,284 7,651,600
Total $ 36,865,437 $ 9,010,438
Differences between projected and actual investment earnings Safety Plan
81

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

Note 8: Pension Plans (Continued)
Pension contributions subsequent to the measurement date of $10,016,823 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, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Actuarial Assumptions. The total pension liabilities in the June 30, 2021 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 for the Plan was 6.90%. The projection of cash flows used to determine the discount rate for the Plan assumed that contributions from all plan members in the Public Employees Retirement Fund (PERF) will be made at the current member contribution rates that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, each Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members for all plans in the PERF. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability for each Plan.

The long-term expected rate of return on pension plan investments was determined using a building-block method in which 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
2024 4,700,728 $
2025 3,350,125
2026 1,805,748
2027 7,981,575
$ 17,838,176
Safety Plan
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:

Discount Rate
Inflation
Salary Increases
Post Retirement Benefit Increase
Mortality (1)
Safety Plan
June 30, 2021
June 30, 2022
Entry-Age Normal Cost Method
Varies by Entry Age and Service
Contract COLA up to 2.30% 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 rates incorporate Generational Mortality to capture ongoing mortality improvement using 80% of Scale MP 2020 published by the Society of Actuaries. For more details on this table, please refer to the 2021 experience study report that can be found on the CalPERS website

6.90%

2.30%
82

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

Note 8: Pension Plans (Continued)
In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated and, combined with risk estimates, are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the longterm projected portfolio return.

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:

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, 2023, the City reported a payable of $0 for the outstanding amount of contributions to the pension plan required for the year ended June 30, 2023
Assumed
Asset
Asset Class Allocation Real Return (1) (2)
Global Equity - Cap-weighted 30.0% 4.54%
Global Equity - Non-Cap-weighted 12.0% 3.84%
Private Equity 13.0% 7.28%
Treasury 5.0% 0.27%
Mortgage-backed Securities 5.0% 0.50%
Investment Grade Corporates 10.0% 1.56%
High Yield 5.0% 2.27%
Emerging Market Debt 5.0% 2.48%
Private Debt 5.0% 3.57%
Real Assets 15.0% 3.21%
Leverage -5.0% -0.59%
(1) An expected inflation of 2.30% used for this period (2) Figures are based on the 2021-22 Asset Liability Management Study Safety Plan
1% Decrease 5.90%
Net Pension Liability $ 115,218,920
Current Discount Rate 6.90%
Net Pension Liability $ 82,856,965
1% Increase 7.90%
Net Pension Liability $ 56,408,374
83

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

Note 8: Pension Plans (Continued)
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 $21,418 to the Plan and Participants contributed $151,939. There were no Plan forfeitures. As of June 30, 2023, the City had $0 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 $27,488 to the Appointed Officials Plans. There were no Plan forfeitures. As of June 30, 2023, the City had $0 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.

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 $149 per month per retiree in calendar year 2022 and $151 per month per retiree in calendar year 2023. 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. 84

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

Note 9: Other Post-Employment Benefits (OPEB) (Continued) Employees Covered. At June 30, 2022, 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 $1,309,367.

Net OPEB Liability
The City’s net OPEB liability was measured as of June 30, 2022 and the total OPEB liability used to the calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2021, based on the following actuarial methods and assumptions:

Discount Rate. The discount rate used to measure the total OPEB liability was 6.25%. The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan’s fiduciary net position was projected to be available to make all projected OPEB payments for current active and inactive employees and beneficiaries. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability.

OPEB Plan
Inactive employees or beneficiaries
currently receiving benefits 196
Inactive employees entitled to but
not yet receiving benefit payments 225
Active employees 451
Total 872
Actuarial Valuation Date June 30, 2021
Measurement Date June 30, 2022
Contribution Policy Contributes full ADC
Actuarial Assumptions:

Discount Rate and 6.25% at June 30, 2022 and 6.25% at June 30, 2021 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
PEMHCA Minimum Increases 4.00% annually
Participation at Retirement Currently covered: 70% Currently waived: 15% OPEB Plan
85

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

Note 9: Other Post-Employment Benefits (OPEB) (Continued) Investments. The long-term expected rate of return on OPEB plan investments was determined using a building- block method in which expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of geometric real rates of return for each major asset class are summarized below:

Changes in the Net OPEB Liability
The changes in the net OPEB liability for the June 30, 2022 measurement date are as follows:

Current Expected
Target Real Rate
Asset Class Allocation of Return
Global Equity 49% 4.56%
Fixed Income 23% 1.56%
TIPS 5% -0.08%
Commodities 3% 1.22%
REITs 20% 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.

OPEB Plan
Total Plan Fiduciary Net
OPEB Liability Net Position OPEB Liability
Balance at June 30, 2021 $ 14,235,734 $ 10,422,798 $ 3,812,936 Changes during the year:

Service cost 480,571 - 480,571
Interest on the total OPEB liability 898,021 - 898,021
Contribution - employer - 1,309,367 (1,309,367)
Net investment income - (1,395,486) 1,395,486
Benefit payments, including refunds
of employee contributions (695,937) (695,937) -
Administrative expense - (7,070) 7,070
Net changes 682,655 (789,126) 1,471,781
Balance at June 30, 2022 $ 14,918,389 $ 9,633,672 $ 5,284,717 86

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

Note 9: Other Post-Employment Benefits (OPEB) (Continued) 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.

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, 2023, the City’s OPEB expense was $673,859. At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

OPEB Plan
1% Decrease 5.25%
Net OPEB Liability 7, $ 241,012
Current Discount Rate 6.25%
Net OPEB Liability 5, $ 284,717
1% Increase 7.25%
Net OPEB Liability 3, $ 665,333
OPEB Plan
1% Decrease
Net OPEB Liability 3, $ 355,291
Current Trend
Net OPEB Liability 5, $ 284,717
1% Increase
Net OPEB Liability 7, $ 676,302
Deferred Outflows Deferred Inflows
of Resources of Resources
OPEB contributions subsequent to
measurement date 1,427,129 $ - $
Changes in assumptions 398,990 128,996
Differences between expected and
actual experiences 267,565 1,068,418
Net differences between projected and
actual earnings on plan investments 738,371 -
Total $ 1,197,414 2,832,055 $
87

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

Note 9: Other Post-Employment Benefits (OPEB) (Continued) OPEB contributions subsequent to the measurement date of $1,427,129 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, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as OPEB expense as follows:

Payable to the OPEB Plan
At June 30, 2023, the City reported a payable of $0 for the outstanding amount of contributions to the OPEB plan required for the year ended June 30, 2023.

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.

Fiscal Year
Ended June 30 Amount
2024 (46,465) $
2025 (53,814)
2026 (97,824)
2027 233,661
2028 25,681
Thereafter 146,273
$ 207,512
88

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

Note 11: Interfund Transactions
There is no interfund receivable and payable balances as of June 30, 2023.

Interfund transfers for the year ended June 30, 2023 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.

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.

Non-Major
General Capital Outlay Governmental
Transfer Out Fund Fund Funds Total
General Fund - $ 20,165,349 $ 8,028,082 $ 28,193,431 $
Non-Major Governmental Fund 2,070,635 6,943,000 285,111 9,298,746 Water Fund 776,578 - - 776,578
Sewer Fund 1,076,388 - - 1,076,388
Parking Fund 390,646 - - 390,646
Total $ 27,108,349 4,314,247 $ 8,313,193 $ 39,735,789 $ Transfer In
89

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

Note 12: Joint Ventures, Jointly Governed Organizations and Operating Agreements (Continued) 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, 2023:

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 2022-23 the City contributed approximately $1,068,248 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.

City's Investment
Joint Venture in Joint Venture
Total assets $ 5,973,396 $ 3,288,354
Total liabilities 117,946 64,929
Fund balance $ 5,855,450 $ 3,223,425
Total revenues $ 2,376,184 $ 1,308,089
Total expenditures 1,664,117 916,096
Excess of revenues over expenditures 712,067 $ $ 391,993 90

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

Note 12: Joint Ventures, Jointly Governed Organizations and Operating Agreements (Continued) 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.

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.
91

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

Note 12: Joint Ventures, Jointly Governed Organizations and Operating Agreements (Continued) 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 2022-23 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.

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.

Actual 2023 $ 4,609,730
Projected:
2024 4,619,370
2025 4,621,210
2026 4,622,040
2027 4,615,840
2028-32 23,100,320
2033-37 23,094,930
2038-41 13,945,680
Nacimiento Water Supply Obligations
92

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

Note 13: Risk Management (Continued)
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 2022-

23. 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. 93

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

Note 13: Risk Management (Continued)
The last actuarial study to determine the undiscounted outstanding claims liability was completed for the year ended June 30, 2023.

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, 2023 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, 2023 is summarized is as follows:

Interest earnings 10,125 $
Claims expense (24,792)
Estimated liability for reported claims and settlement expenses (361,444) Assets on deposit 618,162
Estimated unpaid claims asset 256,718 $
Changes in the balances of claim assets during the past two fiscal years are as follows:

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
Claim payments and related expenditures reimbursement (542,713) Change in estimated claims asset June 30, 2023 28,884
Interest earnings 10,125
Withdrawal 200,000
Estimated unpaid claims asset June 30, 2023 256,718 $
94

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

Note 15: Construction and Other Significant Commitments Construction and other significant commitments as of June 30, 2023, 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, 2023, the City had fund with negative fund balance for Downtown BID as below.

Note 17: Subsequent Events
On September 13, 2023, the San Luis Obispo Public Financing Authority issued $45,780,000 in Lease Revenue Bonds for the construction of the Cultural Arts District Parking Structure and to refund the 2012 Lease Revenue Bonds. Debt service payments of approximately $2.8 million per year are expected to be paid from revenues generated by the City’s Parking Fund through December 2053.

Note 18: New Accounting Standards
Accounting Standards Adopted
 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 did not apply to the City for the current fiscal year.  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 public-public 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 did not apply to the City for the current fiscal year.

General Fund $ 2,420,086
Special Revenue Funds 243,478
Capital Project Funds 17,843,611
Enterprise Funds:

Water 4,370,385
Sewer 26,458,269
Parking 1,594,568
Transit 1,570,189
Total $ 54,500,586
Funds Deficiency
Downtown BID $ (2,424)
Total $ (2,424)
95

City of San Luis Obispo, California
Notes to the Financial Statements
June 30, 2023

Note 18: New Accounting Standards (Continued)
 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 City recognized intangible assets and SBITA liabilities as part of implementation of this statement.

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 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 2023, prior period adjustments were made to correct the cash reported in Fiduciary Fund, which the City did not record in the prior years.

Fiduciary Funds
Net Position as previously reported at June
30, 2022 $ 9,093,468
Prior Period Adjustments:

Cash 11,331,710
Net Position as restated at
June 30, 2022 $ 20,425,178
Fund Statements
96

REQUIRED SUPPLEMENTARY INFORMATION
(UNAUDITED)
97

98

City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund
For the Fiscal Year Ended June 30, 2023
Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
REVENUES:

Taxes and franchise fees:

Sales and use tax - general $ 21,789,000 $ 21,524,304 $ 21,865,468 $ 341,164 Transaction and use tax - Local Revenue Measure 27,049,000 30,141,532 30,508,731 367,199 Property tax 14,776,387 14,775,879 15,474,655 698,776
Transient occupancy tax 8,636,000 10,704,000 11,037,037 333,037 Utility users tax 5,544,000 5,544,000 6,904,194 1,360,194 Property tax in lieu of VLF 5,970,000 6,286,518 6,283,397 (3,121) Franchise taxes 1,606,000 1,800,000 2,349,603 549,603
Business tax 2,989,000 3,257,566 3,281,010 23,444
Cannabis Tax 1,300,000 1,000,000 1,127,744 127,744
Real property transfer tax 411,000 - 457,978 46,978
Total taxes 89,659,387 95,444,799 99,289,817 3,845,018
Fines, forfeitures and penalties 224,096 224,096 195,991 (28,105) Use of money and property 230,000 (1,270,000) 1,568,512 2,838,512 Subventions and grants:

Other State and Federal grants 7,369,562 1,108,753 1,429,375 320,622 Other subventions and grants 497,000 497,000 544,521 47,521 Total subventions and grants 7,866,562 1,605,753 1,973,896 368,143 Charges for services:

Public safety:

Police 533,325 543,248 669,611 126,363
Fire:

Medical emergency recovery 578,622 578,622 568,559 (10,063) Fire safety/hazardous materials permits 991,810 1,015,800 1,028,398 12,598 Other fire revenues 5,890 7,790 24,552 16,762
Community development:

Planning and zoning fees 1,080,763 1,080,763 1,719,050 638,287 Construction plan and check inspections 3,280,700 4,098,011 3,922,601 (175,410) Infrastructure plan check and inspections - 927,779 - 927,779 Culture and recreation:

Adult athletic fees 305,068 320,833 234,263 (86,570)
Youth athletic fees 854,063 854,063 906,231 52,168
Rental and use fees 369,195 369,195 304,489 (64,706)
Aquatics 309,452 312,072 313,083 1,011
Golf course 298,987 298,987 211,853 (87,134)
General government:

Other service charges 684,911 673,373 810,389 137,016
Total charges for services 9,292,786 10,152,757 11,640,858 1,488,101 Impact Fees - 54,645 - 54,645
Other revenues 541,100 648,409 739,821 91,412
Total Revenues 107,813,931 106,805,814 115,463,540 8,657,726 (Continued)
99

City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2023

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

Public Safety:

Police protection:

Administration 2,404,681 2,300,494 2,152,330 252,351
Investigations 3,057,864 3,637,267 2,885,594 751,673
Neighborhood services 302,866 302,896 282,511 20,385
Support services 3,596,650 3,303,660 3,123,544 180,116
Patrol services 11,914,934 11,301,433 11,984,965 (683,532) Traffic safety 1,116,014 913,241 989,039 126,975
Total police protection 22,086,049 22,065,951 21,417,983 647,968 Fire and environmental safety:

Administration 1,264,293 1,292,344 1,157,037 107,256
Emergency response 11,826,681 12,159,800 12,350,737 (190,937) Fire Apparatus Services 489,401 520,936 500,255 20,681
Hazard protection 976,615 1,035,824 938,914 37,701
Training 125,482 113,448 129,620 (4,138)
Disaster preparedness 183,663 204,575 195,404 9,171
Mobile Crisis Unit 322,786 320,416 160,605 162,181
Total fire and environmental safety 15,261,777 15,574,487 15,432,572 141,915 Total public safety 37,347,826 37,640,438 36,850,555 789,883 Transportation:

Transportation planning and engineering 1,211,650 1,078,014 1,187,300 24,350 Street and sidewalk maintenance 2,349,856 2,624,941 2,212,230 412,711 Traffic signals and street lights 596,347 547,101 556,238 (9,137) Creek and flood protection 1,464,550 1,506,712 1,338,301 126,249 Total transportation 5,848,242 5,530,929 5,294,069 554,173 Culture and Recreation:

Recreation programs:

Recreation administration 846,728 916,789 844,713 2,015 Aquatics/Sinsheimer park facilities 648,595 604,482 620,772 27,823 Children's services 1,407,394 1,356,203 1,185,547 170,656 Facilities 355,640 326,162 358,787 32,625
Special events 10,500 12,400 5,101 7,299
Recreational sports 696,591 731,072 601,789 129,283
Golf course 806,210 773,893 724,556 49,337
Ranger services 898,724 888,880 786,460 102,420
Maintenance programs:

Swim center maintenance 673,110 625,128 672,335 (47,207) Parks and landscape maintenance 4,126,239 3,864,211 3,571,500 292,711 Tree maintenance 368,367 549,687 339,617 210,070
Cultural and social service programs: Human relations
Human relations 595,807 1,130,110 988,356 141,754
Cultural activities 365,161 357,963 348,269 9,694
Total leisure, cultural and social services 11,825,014 12,143,657 11,015,177 1,128,480 (Continued)
100

City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2023

Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
Community Development:

Planning:

Commissions and communities 37,240 34,948 14,819 20,129 Community development administration 985,977 954,447 840,891 145,086 Long-range planning (566,560) (583,683) 930,742 (1,514,425) Development review 2,051,640 1,955,946 1,716,724 334,916 Natural resource protection 1,055,890 1,024,109 983,010 72,880 Construction regulation:

Building and safety 3,564,509 3,085,372 2,968,584 595,925 CIP project engineering 2,887,864 2,971,436 2,683,532 287,904 Economic health:

Community promotion 415,217 411,735 421,838 (6,621)
Economic development 1,065,434 915,421 1,020,003 45,431 Housing 1,203,675 1,230,792 1,104,545 126,247
Total community development 11,909,249 12,792,160 12,684,688 107,472 General Government:

Legislation:

Council 244,185 235,961 234,567 1,394
General administration:

City administration 2,375,686 2,258,771 2,206,247 169,439 Public works administration 1,367,239 1,454,918 1,402,863 (35,624) Legal services:

City attorney 1,455,220 1,425,044 1,424,496 30,724
City clerk services:

Administration and records 757,787 781,418 666,756 114,662 Organization support services:

Human resource administration 8,119,517 7,643,301 7,813,830 305,687 Finance and administration 1,926,366 2,384,654 5,904,816 (3,978,450) Revenue management 448,414 550,775 385,980 62,434
Accounting 1,343,657 1,207,338 1,194,477 12,861
Finance non-departmental 1,100,883 984,334 283,739 700,595 Network services 3,504,524 3,849,553 3,512,394 337,159
Wellness program 19,247 53,358 3,201 16,046
Building and vehicle maintenance:

Buildings 1,534,669 1,465,380 1,430,582 34,798
Vehicle and equipment maintenance 1,453,372 1,645,649 1,421,074 224,575 Total general government before cost
reimbursement 25,709,898 25,881,322 27,885,022 (2,003,700) Cost reimbursement (Note 3 to RSI) (4,461,578) (4,461,578) (4,461,578) - Total general government 21,248,320 21,419,744 23,423,444 (2,003,700) (Continued)
101

City of San Luis Obispo, California
Budgetary Comparison Schedule
General Fund, continued
For the Fiscal Year Ended June 30, 2023

Original
Budget
Final
Budget Actual
Variance With
Final Budget
Positive
(Negative)
Capital Outlay:

Public safety 44,464 76,654 44,014 450
Transportation 389,489 236,598 327,201 62,288
Leisure, culture and social services 172,257 119,122 117,397 1,725 General government 161,323 470,738 509,843 (348,520)
Total capital outlay 714,398 956,247 998,455 (284,057)
Total Expenditures 88,817,585 90,558,639 90,266,388 292,251 Excess of Revenues Over Expenditures 18,996,346 16,247,175 25,197,152 8,949,977 Other Financing Sources (Uses)
Other Financing Sources – SBITA - 474,594 - 474,594
Payment of debt - - - -
Transfers in 21,256,031 21,652,941 4,314,247 (17,338,694) Transfers out (40,973,315) (44,777,752) (28,193,431) 12,779,884 Total other financing uses (23,521,721) (19,320,374) (23,404,590) (4,084,216) Net Change in Fund Balance (4,525,375) (3,073,199) 1,792,562 4,865,761 Fund Balance, Beginning of the Year 40,745,506 40,745,506 40,745,506 Fund Balance, End of Year $ 36,220,131 $ 37,672,307 $ 42,538,068 102

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, 2023
Last 10 Years *
Fiscal Year 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 Measurement Period 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14Total pension liability:

Service Cost $ 4,364,490 $ 3,939,785 $ 3,681,240 $ 4,042,717 $ 4,328,129 $ 4,124,832 $ 3,580,882 $ 3,578,172 $ 3,703,087 Interest on total pension liability 17,090,797 16,589,680 16,160,011 15,531,812 14,778,918 14,197,897 13,688,523 13,193,597 12,756,967Difference between expected and actual experience 818,065 (755,414) 1,869,474 2,966,923 1,445,049 694,843 (1,160,933) (2,433,791) - Changes in assumptions 8,123,651 - - (1,292,326) - 11,219,603 (3,057,724) - -Benefit payments, including refunds of employee contributions (14,509,974) (13,518,666) (12,892,847) (12,061,701) (10,740,816) (10,161,053) (9,476,508) (8,808,668) (8,258,611) Net change in total pension liability 15,887,029 6,255,385 8,817,878 10,479,751 8,518,954 20,076,122 6,631,964 2,471,586 8,201,443 Total pension liability - beginning 243,823,734 237,568,349 228,750,471 218,270,720 209,751,766 189,675,644 183,043,680 180,572,094 172,370,651 Total pension liability - ending (a) $ 259,710,763 $ 243,823,734 237,568,349 $ $ 228,750,471 $ 218,270,720 $ 209,751,766 $ 189,675,644 $ 183,043,680 $ 180,572,094 Plan fiduciary net position:

Contributions - employer $ 16,384,823 $ 8,246,755 $ 7,709,918 $ 9,361,882 $ 6,693,987 $ 6,776,849 $ 6,122,173 $ 5,027,356 $ 4,631,254 Contributions - employee 2,269,339 2,056,274 1,889,583 1,775,245 1,820,697 1,841,331 1,666,606 1,509,834 1,664,654 Net investment income (13,547,758) 32,904,570 7,205,266 9,124,520 10,820,033 13,053,453 677,557 2,673,657 17,746,607 Benefit payments (14,509,974) (13,518,666) (12,892,847) (12,061,701) (10,740,816) (10,161,053) (9,476,508) (8,808,668) (8,258,611)Net plan to plan resource movement - - - - (316) (2,936) - - - Administrative expense (110,778) (148,132) (203,824) (97,394) (200,184) (172,935) (72,044) (133,042) -Other miscellaneous income/(expense) - - - 316 (380,153) - - - - Net change in plan fiduciary net position (9,514,348) 29,540,801 3,708,096 8,102,868 8,013,248 11,334,709 (1,082,216) 269,137 15,783,904 Plan fiduciary net position - beginning 177,830,076 148,289,275 144,581,179 136,478,311 128,465,063 117,130,354 118,212,570 117,943,433 102,159,529 Plan fiduciary net position - ending (b) $ 168,315,728 $ 177,830,076 $ 148,289,275 $ 144,581,179 $ 136,478,311 $ 128,465,063 $ 117,130,354 $ 118,212,570 $ 117,943,433 Net pension liability (asset) - ending (a) - (b) $ 91,395,035 $ 65,993,658 $ 89,279,074 $ 84,169,292 $ 81,792,409 $ 81,286,703 $ 72,545,290 $ 64,831,110 $ 62,628,661Plan fiduciary net position as a percentage of the total pensionliability 64.81% 72.93% 62.42% 63.20% 62.53% 61.25% 61.75% 64.58% 65.32%Covered payroll 24,574,829 23,805,348 21,795,380 22,951,725 23,736,588 21,841,841 20,499,668 19,769,997 19,235,818 Net pension liability as percentage of covered payroll 371.91% 277.22% 409.62% 366.72% 344.58% 372.16% 353.89% 327.93% 325.58%* Fiscal year 2015 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 yearended June 30, 2022.Benefit changes . The figures above include any liability impact that may have resulted from voluntary benefit changes that occurred on or before the Measurement Date. 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 . Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return,CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption werechanged in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. None in 2019 or 2020 or 2021. In 2018, demographic assumptions and inflation rate were changed in accordance to theCalPERS 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. In2015, 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 b d h di
103

City of San Luis Obispo, California
Schedule of the Pension Plan Contributions
Miscellaneous Agent Multiple-Employer Plan
June 30, 2023
Last 10 Years *
Fiscal Year 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 Actuarially determined contribution $ 9,572,913 $ 8,851,802 $ 8,246,755 $ 7,709,918 $ 7,093,882 $ 6,693,987 $ 6,776,849 $ 6,122,173 $ 5,027,356 $ 4,631,254 Contributions in relation to the actuarially determined contribution (11,050,124) (16,384,823) (8,246,755) (7,709,918) (9,361,882) (6,693,987) (6,776,849) (6,122,173) (5,027,356) (4,631,254) Contribution deficiency (excess) $ (1,477,211) $ (7,533,021) $ - $ (2,268,000) - $ $ - $ - $ - $ - $ - Covered payroll $ 29,794,206 $ 24,574,829 $ 23,805,348 $ 21,795,380 $ 22,951,725 $ 23,736,588 $ 21,841,841 $ 20,499,668 $ 19,769,997 $ 19,235,818 Contributions as percentage of covered payroll 37.09% 66.67% 34.64% 35.37% 40.79% 28.20% 31.03% 30.97% 25.43% 24.08%Actuarial Cost MethodAmortization MethodAmortization PeriodAsset Valuation MethodInflationSalary IncreasesPayroll GrowthDiscount RateRetirement AgeMortality 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. * Fiscal year 2014 was the first year of implementation. Therefore, only ten years are shown. Information is required only for measurement periods for which GASB 68 is applicable. The currentmeasurement period is the year ended June 30, 2022.The actuarial methods and assumptions used to set the actuarially determined contributions for fiscal year 2022-23 contributions rates are as follows:

Entry Age NormalFor details, see June 30, 2021 CalPERS Funding Valuation ReportFor details, see June 30, 2021 CalPERS Funding Valuation Report2.50%Varies by Entry Age and Service2.750%7.00% Net of Pension Plan Investment and Administrative ExpensesThe probabilities of Retirement are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. 104

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, 2023
Last 10 Years *
Fiscal Year 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15Measurement Period 2021-2022 2020-2021 2019-2020 2018-2019 2017-18 2016-17 2015-16 2014-15 2013-14Proportion of the Collective Net Pension Liability 0.71733% 1.08299% 0.7225% 0.7212% 1.2261% 1.1943% 1.2510% 1.3654% 1.3754%Proportionate Share of the Collective Net Pension Liability $ 82,856,965 $ 58,571,330 $ 78,611,581 $ 73,897,967 $ 71,940,534 $ 71,364,346 $ 64,792,760 $ 56,260,280 $ 51,592,420 Covered payroll $ 12,207,346 $ 10,744,808 $ 9,488,971 $ 11,197,562 $ 11,246,306 $ 10,614,437 $ 10,643,123 $ 10,849,863 $ 10,768,119 Proportionate share of the net pension liability as percentage of covered payroll 678.75% 545.11% 828.45% 659.95% 639.68% 672.33% 608.78% 518.53% 479.12%Plan fiduciary net position as a percentage of the total pension liability 76.68% 88.29% 75.26% 75.26% 75.26% 73.31% 74.06% 78.40% 79.82%The CalPERS mortality assumptions were adjusted in fiscal year 2019.*-Fiscal year 2015 was the first year of implementation, therefore only nine 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, and then decreased from 7.15% to 6.9% in fiscal year 2023. 105

City of San Luis Obispo, California
Schedule of the City's Pension Contributions
Safety Cost-Sharing Plan
As of June 30, 2023
Last 10 Years *
Fiscal Year 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14Contractually required contribution (actuarially determined) $ 10,016,823 $ 12,756,585 $ 7,631,620 $ 7,167,638 $ 6,416,780 $ 5,910,345 $ 5,549,915 $ 5,074,217 $ 4,350,871 $ 4,226,211 Contribution in relation to the actuarially determined contributions (10,016,823) (12,756,585) (7,631,620) (7,167,638) (8,348,780) (5,910,345) (6,299,915) (5,824,217) (4,650,871) (5,161,211) Contribution deficiency (excess) -$ -$ -$ -$ (1,932,000) $ -$ (750,000) $ $ (750,000) $ (300,000) $ (935,000) Covered payroll $ 11,235,984 $ 12,207,346 $ 10,744,808 $ 9,488,971 $ 11,197,562 $ 11,246,306 $ 10,614,437 $ 10,643,123 $ 10,849,863 $ 10,768,119 Contributions as a percentage of covered payroll 89.15% 104.50% 71.03% 75.54% 74.56% 52.55% 59.35% 54.72% 42.87% 47.93%*- Fiscal year 2015 was the first year of implementation, therefore only nine years are shownThe 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 aggregatecontributions 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 measurementperiod. 106

Fiscal Year 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 Measurement Period 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 Total OPEB liability:

Service Cost 480,571 $ 423,364 $ 415,244 $ 477,538 $ 463,629 $ 450,125 $ Interest on total OPEB liability 898,021 867,422 841,590 935,528 891,794 856,436 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 (678,789) (695,937) (678,882) (677,824) (765,000) (827,500) Net change in total OPEB liability 1,469,005 682,655 374,536 (1,328,863) 590,423 479,061 Total OPEB liability - beginning 12,766,729 14,235,734 12,392,193 13,721,056 13,130,633 12,651,572 Total OPEB liability - ending (a) $ 14,235,734 14,918,389 $ 12,766,729 $ 12,392,193 $ 13,721,056 $ 13,130,633 $ Plan fiduciary net position:

Contributions - employer 1,309,367 $ 921,000 $ 1,656,882 $ 677,824 $ 1,221,000 $ 1,493,996 $ Net investment income (1,395,486) 2,196,724 259,704 392,852 439,828 469,883 Benefit payments (695,937) (678,789) (678,882) (677,824) (765,000) (827,500) Administrative expense (7,070) (7,235) (3,472) (1,364) (10,170) (2,387) Net change in plan fiduciary net position 2,431,700 (789,126) 1,234,232 391,488 885,658 1,133,992 Plan fiduciary net position - beginning 7,991,098 10,422,798 6,756,866 6,365,378 5,479,720 4,345,728 Plan fiduciary net position - ending (b) $ 9,633,672 $ 10,422,798 $ 7,991,098 $ 6,756,866 $ 6,365,378 $ 5,479,720

Plan net OPEB liability - ending (a) - (b) $ 5,284,717 $ 3,812,936 $ 4,775,631 $ 5,635,327 $ 7,355,678 $ 7,650,913

Plan fiduciary net position as a percentage of
the total OPEB liability 64.58% 73.22% 62.59% 54.53% 46.39% 41.73% Covered-employee payroll $ 38,691,777 $ 40,691,438 $ 33,077,056 $ 33,429,600 $ 33,790,437 $ 33,722,592 Plan net OPEB liability as percentage of
covered payroll 13.66% 9.37% 14.44% 16.86% 21.77% 22.69% Changes in assumptions. No changes in June 30, 2022 measurement date. 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, 2022 measurement date.

Prepared for the City of San Luis Obispo OPEB Plan
an Agent Multiple-Employer Defined Benefit OPEB Plan
As of June 30, 2023
Last 10 Years *
Schedule of Changes in the Net OPEB Liability and Related Ratios 107

Fiscal Year 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 Actuarially determined
contribution $ 1,055,000 $ 1,309,367 $ 921,000 $ 1,190,000 $ 1,154,000 $ 1,221,000 Contributions in
relation to the
actuarially determined
contributions $ (1,427,129) $ (1,309,367) (921,000) (1,656,882) (677,824) (1,221,000) Contribution
deficiency (excess) $ (372,129) $ - $ (466,882) - $ $ 476,176 $ - Covered-employee
payroll $ 37,590,668 $ 38,691,777 $ 40,691,438 $ 33,077,056 $ 33,429,600 $ 33,790,437 percentage of covered
payroll 2.81% 3.38% 2.26% 3.60% 3.45% 3.61%
Contributions paid as of June 30, 2023 are deferred to June 30, 2024.

Valuation date
Actuarial Cost Method
Amortization Method
Amortization Period
Asset Valuation Method
Discount Rate
General Inflation
Medical Trend
Mortality
Mortality Improvement

6.25%

2.50%
Non-Medicare - 6.50% for 2023, decreasing to an ultimate rate of 3.75% in 2076 Medicare - 5.65% for 2023, decreasing to an ultimate rate of 3.75% in 2076 CalPERS 2000-2019 experience study
Post-retirement mortality projected fully generational with Scale MP-2021 June 30, 2021
Entry Age Normal, Level % of pay
Level % of pay

11.4-year average period for FY2022/23
Investment gains and losses spread over 5-year rolling period The actuarial methods and assumptions used to set the actuarially determined contributions for fiscal year 2022-23 are as follows:
* Fiscal year 2018 was the first year of implementation. Information is required only for measurement periods for which GASB 75 is applicable.

Prepared for the City of San Luis Obispo Miscellaneous Plan an Agent Multiple-Employer Defined Benefit OPEB Plan
As of June 30, 2023
Last 10 Years *
Schedule of Employer OPEB Contributions
108

City of San Luis Obispo, California
Notes to Required Supplementary Information
June 30, 2023
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, 2023 expenditures exceeded appropriations in the General Fund as noted below. 109

110

OTHER SUPPLEMENTARY INFORMATION

AND COMBINING AND INDIVIDUAL FUND

STATEMENTS AND SCHEDULES
111

112

Revenues Actual
Local Transaction and Use Tax $ 30,508,731
Investment Income 7,899
$ 30,516,630
Expenditure Allocations by Priority
Address Homelessness 764,069 $
Community Safety and Emergency Preparedness 4,608,385
Creek and Flood Protection 1,292,816
Economic Development and Business Retention 874,875
Open Space/Natural Areas Preservation and Maintenance 1,439,019 Other Services and Projects 2,528,429
Protect Financial Stability 404,558
Safe and Clean Public Areas 3,362,300
Street Maintenance and Transportation (incl bike and ped improvements) 9,405,702 Youth/Senior Services and Recreation Facilities 2,096,992 Allocation to Capital Reserve 3,604,500
$ 30,381,645
Expenditures on Legacy Projects (projects funded before 2022-23) Legacy Projects $ 523,861
Net Change in Fund Balance $ (388,876)
Fund Balance Beginning of Year 5,696,864
Fund Balance End of Year $ 5,307,988
Encumbered for Legacy Projects (1,435,051)
Available Fund Balance $ 3,872,937
City of San Luis Obispo
Local Transaction Tax Measure Funding Schedule
For the Fiscal Year Ended June 30, 2023
113

Revenues Budget Actual
Local Transaction and Use Tax $ 30,141,532 $ 30,508,731 Investment Income 7,899
$ 30,516,630 30,141,532 $
Expenditures
Transfer Out for Operating Programs:

Address Homelessness $ 764,069 $ 764,069
Community Safety and Emergency Preparedness 2,102,685 2,102,685 Creek and Flood Protection 742,816 742,816
Economic Development and Business Retention 757,375 757,375 Open Space/Natural Areas Preservation and Maint. 709,019 709,019 Other Services and Projects 1,165,820 1,165,820
Protect Financial Stability 404,558 404,558
Safe and Clean Public Areas 652,300 652,300
Street Maintenance and Transportation 1,084,129 1,084,129 Youth/Senior Services and Recreation Facilities 395,492 395,492 $ 8,778,263 8,778,263 $
Transfer Out for 2022-23 Capital Projects
Community Safety and Emergency Preparedness $ 2,505,700 $ 2,505,700 Creek and Flood Protection 550,000 550,000
Economic Development and Business Retention 117,500 117,500 Open Space/Natural Areas Preservation and Maintenance 730,000 730,000 Other Services and Projects 1,362,609 1,362,609
Safe and Clean Public Areas 2,710,000 2,710,000
Street Maintenance and Transportation (incl bike and ped improvements) 8,321,573 8,321,573 Youth/Senior Services and Recreation Facilities 1,701,500 1,701,500 Allocation to Capital Reserve 3,604,500 3,604,500
$ 21,603,382 21,603,382 $
Expenditures on Legacy Projects (projects funded before 2022-23) Legacy Projects $ 1,958,912 $ 523,861
Net Change in Fund Balance $ (388,876)
Fund Balance Beginning of Year 5,696,864 $
Fund Balance End of Year $ 5,307,988
Encumbered for Legacy Projects (1,435,051) $
Available Fund Balance $ 3,872,937
City of San Luis Obispo
Local Transaction Tax Measure Funding Schedule
For the Fiscal Year Ended June 30, 2023
114

Capital Programs: Budget Actual Encumbrances Carryover
Community Safety and Emergency Preparedness
Fire - Fleet Replacement $ 1,095,283 1,530,966 $ - $ $ 435,683 Fire Hydrant Replacement 40,024 37,462 - 2,562
Fire Station #3 & #4 Remodel Space Study and Design 100,000 - - 100,000 Initial Design Study - Police Station Replacement 411,315 230,802 97,052 83,461 Police - Information Technology 1,259,615 166,064 65,098 1,028,452 Police - Fleet Replacement 320,789 29,847 290,942 -
IT Replacements 563,074 492,005 - 71,069
$ 2,051,464 4,225,783 $ 453,093 $ $ 1,721,226
Creek and Flood Protection
Storm Drainage Infrastructure Replacement $ 279,100 $ 212,448 $ 68,133 $ 66,652 Creek Bank Stabilization Near Pismo and Johnson 436,112 263,083 30,420 173,029 $ 715,212 $ 475,532 $ 98,553 $ 239,681
Economic Development and Business Retention
Additional Banner Arms, Bench Arm Rests, Signs $ 113,728 $ 18,598 $ 9,606 $ 85,524 Annual Public Art Maintenance and Projects 69,700 59,779 - 9,921 Open SLO 125,569 9,437 - 116,132
Downtown Zig-Zag Lighting 250,000 - - 250,000
Downtown Renewal 255 - - 255
Mission Plaza Maintenance Improvements 194,271 175,600 8,001 10,670 Public Art Installation 338,900 21,196 - 317,704
$ 284,610 1,092,423 $ 17,606 $ $ 790,206
Open Space/Natural Areas Preservation and Maintenance
Open Space Acquisition $ 532,290 $ 53,962 $ 5,452 $ 472,876 Open Space Maintenance 207,163 70,155 4,177 132,831
Urban Forest Maintenance 504,831 454,750 2,003 48,077
Laguna Lake Dredging 63,699 4,388 8,146 51,165
$ 583,256 1,307,983 $ 19,779 $ $ 704,949
Other Services and Projects
Capital Projects Engineering Staff (6 FTE) $ 133,612 $ - $ 133,612 - $ Council Hearing Room Functionality Improvements 420,000 346,024 - 73,976 Electric Vehicle Charging Stations 46,686 12,465 30,053 4,167 Major Facility Replacement 1,663,084 601,074 18,813 1,043,197 Roundabout Public Art Installations 90,827 90,827 - -
KVEC Tower 254,078 53,610 28,718 171,750
2020 Neighborhood Greenways Public Art 2,250 2,250 - -
Fleet Replacement - Citywide 260,001 - - 260,001
Fleet Replacement - Public Works 797,647 70,267 7,936 719,444 Corp Yard Fuel Island Siding 201 55 - 146
$ 3,668,386 $ 1,176,574 $ 85,520 $ 2,406,292
City of San Luis Obispo
Local Transaction Tax Measure Funding Schedule, continued Local Revenue Measure Funded Projects
Includes Legacy Projects and projects funded by Capital Reserve 115

Safe and Clean Public Areas
Bob Jones Trail and Railroad Safety Trail Solar Lightning$ 59 1,450,000 $ - $ $ 1,449,941 Curb Ramps and Sidewalks Replacements 347,567 50,005 36,947 260,615 Mission Plaza Concept Plan Implementation 1,459,081 282,820 157,564 1,018,696 Street and Pathway Lighting 62,652 6,227 - 56,425
Pedestrian Crossing Improvements 536,817 469,055 32,916 34,847 Railroad Safety Trail Taft to Pepper 27,150 - - 27,150
Downtown Cleaning Equipment 7,169 7,169 - -
Pedestrian Crosswalk Beacon on Ramona 28,255 1,745 13,255 13,255 Downtown Safety Enhancements 1,823 - - 1,823
Area 6 & 7 Curb Ramps 264,641 262,031 2,610 -
$ 1,079,111 4,185,154 $ 243,291 $ 2,862,752 $
Street Maintenance and Transportation
Active Transportation Plan Implementation $ 879,406 $ 387,526 $ 439,990 $ 51,890 Madonna Inn Frontage Bike Pathway 5,775 - - 5,775
Neighborhood Traffic Improvements 261,520 41,637 8,174 211,709 Prado Road Bridge & Road Widening 548,093 402,130 - 145,963 Prado Road Interchange 2,431,833 65,417 21,833 2,344,583 Traffic Signs & Striping Maintenance 57,136 31,804 - 25,332 Transportation Safety & Operations 3,431 - - 3,431
North Chorro Neighborhood Greenway - Phase 2 9,562,019 1,195,092 4,659,539 3,707,388 Development Agreements 1,665,000 320,745 1,224,255 120,000 Orcutt/Tank Farm Roundabout Construction 374,124 302,977 25,376 45,770 Monterey at Santa Rosa Paving and Signal Project 1,271,756 813,278 181,956 276,522 Roadway Sealing 2022 4,148,160 3,871,762 25,798 250,600 2022 Street Reconstruction and Resurfacing 1,381,734 545,784 547,044 288,906 Marsh and Santa Rosa Bridge Replacement 107,072 96,098 61 10,912 Mid-Higuera Bypass 219,733 23,398 121,280 75,056
Traffic Safety Implementation 8,000 8,000 - -
Sewer Replacement Chorro & Murray 80,000 - 60,000 20,000 South Street Median Landscaping 18,540 8,768 4,460 5,312 2023 Streets Reconstruction & Resurfacing - Arterials 500,194 - 430,194 70,000 California Taft Roundabout 297,409 145,515 4,255 147,639 $ 8,259,932 23,820,936 $ 7,754,217 $ $ 7,806,788
Youth/Senior Services and Recreation Facilities
Laguna Lake Golf Course Maintenance $ - 31,570 $ - $ $ 31,570 Playground Equipment Replacement 255,752 3,652 208,607 43,493 Orcutt Area - Linear Park Planning and Construction 815,000 34,303 7,802 772,895 Parking Lot Maintenance 233,770 1,820 - 231,950
Parks and Recreation - Fleet Replacement 242,000 144,433 9,067 88,500 Parks and Recreation Master Plan Implementation 400,000 76,878 - 323,122 Golf Course Pro Shop Flood Damage Repairs 93,222 43,041 - 50,181 Parks Major Maintenance 1,626,183 411,712 107,825 1,106,647 North Broad Street Neighborhood Park 216,070 15,396 41,070 159,604 $ 731,234 3,913,567 $ 374,371 $ $ 2,807,961
Total Capital Expenditures $ 14,641,713 42,929,446 $ 9,046,430 $ 19,339,855 $ City of San Luis Obispo
Local Transaction Tax Measure Funding Schedule, continued Local Revenue Measure Funded Projects
Includes Legacy Projects and projects funded by Capital Reserve 116

City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2023
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.
117

City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2023
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 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.

Avila Ranch Fund. This fund has been established to account for the ongoing funding received as a special property tax assessment and the associated infrastructure and service improvements of the Avila Ranch Community Facilities District.

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 multi-year 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. 118

City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2023
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 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.
119

City of San Luis Obispo, California
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2023
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.

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.
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. 120

121

City of San Luis Obispo, California
Combining Balance Sheets
Nonmajor Governmental Funds
June 30, 2023
Special Revenue Funds
Downtown BID
Transportation
Development
Act (TDA) Tourism BID Gas Tax
Assets
Cash and investment $ 46,467 $ 8,681 $ 1,338,076 $ -
Accounts receivable - - 249,263 -
Tax receivable - - - -
Accrued interest receivable - - 4,226 -
Cash held by fiscal agent - - - -
Loans receivable - - - -
Total assets $ 8,681 46,467 $ 1,591,56 $ 5 $ -
Liabilities, Deferred Inflows of
Resources and Fund Balance
Liabilities:

Accounts payable - $ - $ 158,660 $ - $
Accrued liabilities - - 6,280 -
Unearned revenue 48,891 - - -
Total liabilities 48,891 - 164,940 -
Deferred Inflows of Resources:

Unavailable revenue - - - -
Fund balance:

Nonspendable - - - -
Restricted for:

Debt service - - - -
Public safety program - - - -
Transportation projects - 8,681 - -
Affordable housing programs - - - -
Impact fee programs - - - -
Parkland development programs - - - -
Public art programs - - - -
Tourism programs - - 1,426,625 -
Infrastructure improvement - - - -
Committed to:

Public safety program - - - -
Assigned to:

Contingency fund - - - -
Subsequent years expenditures - - - -
Total fund balance (2,424) 8,681 1,426,625 -
Total liabilities, deferred inflows of
resources, and fund balance $ 8,681 46,467 $ 1,591,565 $ - $ (Continued)
122

City of San Luis Obispo, California
Combining Balance Sheets
Nonmajor Governmental Funds
June 30, 2023
Special Revenue Funds
Community
Development
Block Grant
(CDBG)
Law
Enforcement
Grants
Public Art
Contributions
Avila Ranch
CFD
Assets
Cash and investment $ 108,574 $ 51,554 $ 1,272,486 $ 157,311 Accounts receivable 34,595 21,393 - -
Tax receivable - - - -
Accrued interest receivable 704,909 143 4,137 494
Cash held by fiscal agent - - - -
Loans receivable 1,112,944 - - -
Total assets $ 1,961,022 $ 73,090 $ 1,276,623 $ 157,805 Liabilities, Deferred Inflows of
Resources and Fund Balance
Liabilities:

Accounts payable - $ 4,248 $ 6,779 $ - $
Accrued liabilities - - - -
Unearned revenue 386 - - -
Total liabilities 4,634 - 6,779 -
Deferred Inflows of Resources:

Unavailable revenue 1,817,852 - - -
Fund balance:

Nonspendable - - - -
Restricted for:

Debt service - - - -
Public safety program 68,456 - - -
Transportation projects -- - -
Affordable housing programs 143,170 - - -
Impact fee programs - - - -
Parkland development programs - - - -
Public art programs - 1,269,844 - -
Tourism programs - - - -
Infrastructure improvement - - - 157,805
Committed to:

Public safety program - - - -
Assigned to:

Contingency fund - - - -
Subsequent years expenditures - - - -
Total fund balance 143,170 68,456 1,269,844 157,805
Total liabilities, deferred inflows of
resources, and fund balance $ 73,090 1,961,022 $ 1,276,623 $ 157,805 $ (Continued)
123

City of San Luis Obispo, California
Combining Balance Sheets
Nonmajor Governmental Funds
June 30, 2023
Capital Project
Funds
SB1 Road
Repair
SB1186 CASP
Certify
Affordable
Housing BEGIN
Loan Fund
Parkland
In-Lieu Fee
Assets
Cash and investment $ 220,721 $ 141,512 $ 184,018 $ 3,196,679 Accounts receivable - - - -
Tax receivable 186,356 - - -
Accrued interest receivable 666 460 107,397 20,652
Cash held by fiscal agent - - - -
Loans receivable - - 420,335 143,044
Total assets $ 407,743 $ 141,972 $ 711,750 $ 3,360,375
Liabilities, Deferred Inflows of
Resources and Fund Balance
Liabilities:

Accounts payable 91,675 $ - $ - $ 1,890 $
Accrued liabilities - - - -
Unearned revenue - - - -
Total liabilities 91,675 - - 1,890
Deferred Inflows of Resources:

Unavailable revenue - - 106,801 153,369
Fund balance:

Nonspendable - - - -
Restricted for:

Debt service - - - -
Public safety program - - - -
Transportation projects 316,068 141,972 - -
Affordable housing programs - - 604,949 -
Impact fee programs - - - -
Parkland development programs - - - 3,205,116
Public art programs - - - -
Tourism programs - - - -
Infrastructure improvement
Committed to:

Public safety program - - - -
Assigned to:

Contingency fund - - - -
Subsequent years expenditures - - - -
Total fund balance 316,068 141,972 604,949 3,205,116
Total liabilities, deferred inflows of
resources, and fund balance $ 141,972 407,743 $ 711,750 $ 3,360,375 $ (Continued)
Special Revenue Funds
124

City of San Luis Obispo, California
Combining Balance Sheets
Nonmajor Governmental Funds
June 30, 2023
Capital Projects Funds
Open Space
Protection
Airport Area
Impact Fee
LOVR Sub-Area
Fee
Fleet
Replacement
Assets
Cash and investment $ 13,055 $ 662,088 $ 415,321 $ 3,113,508 Accounts receivable - - - -
Tax receivable - - - -
Accrued interest receivable 42 2,147 1,399 -
Cash held by fiscal agent - - - -
Loans receivable - - - -
Total assets $ 664,23 13,097 $ 5 $ 416,720 $ 3,113,508
Liabilities, Deferred Inflows of
Resources and Fund Balance
Liabilities:

Accounts payable - $ - $ - $ 74,601 $
Accrued liabilities - - - -
Unearned revenue - - - -
Total liabilities - - - 74,601
Deferred Inflows of Resources:

Unavailable revenue - - - -
Fund balance:

Nonspendable - - - -
Restricted for:

Debt service - - - -
Public safety program - - - -
Transportation projects - - - -
Affordable housing programs - - - -
Impact fee programs - 664,235 416,720 -
Parkland development programs - - - -
Public art programs - - - -
Tourism programs - - - -
Infrastructure improvement - - - -
Committed to:

Public safety program - - - -
Assigned to:

Contingency fund - - - 500,000
Subsequent years expenditures 13,097 - - 2,538,907
Total fund balance 13,097 664,235 416,720 3,038,907
Total liabilities, deferred inflows of
resources, and fund balance $ 664,235 13,097 $ 416,720 $ 3,113,508 $ (Continued)
125

City of San Luis Obispo, California
Combining Balance Sheets
Nonmajor Governmental Funds
June 30, 2023
Capital Projects Funds
Info Tech
Replacement
Affordable
Housing
Transportation
Impact Fee Infrastructure
Assets
Cash and investment $ 3,352,935 $ 3,036,546 $ 7,217,117 $ 9,630,088 Accounts receivable - - - -
Tax receivable - - - -
Accrued interest receivable 1,944,829 - 151,399 -
Cash held by fiscal agent - - - -
Loans receivable 8,560,688 - 1,164,368 -
Total assets $ 3,352,935 $ 13,542,063 $ 8,532,884 $ 9,630,088 Liabilities, Deferred Inflows of
Resources and Fund Balance
Liabilities:

Accounts payable 56,493 $ - $ 140,415 $ - $
Accrued liabilities - - - -
Unearned revenue 600,000 1,264,467 - 9,200,000
Total liabilities 656,493 1,264,467 140,415 9,200,000
Deferred Inflows of Resources:

Unavailable revenue - 2,002,066 1,292,189 -
Fund balance:

Nonspendable - - - -
Restricted for:

Debt service - - - -
Public safety program - - - -
Transportation projects - - 7,100,280 -
Affordable housing programs - 10,275,530 - -
Impact fee programs - - - -
Parkland development programs - - - -
Public art programs - - - -
Tourism programs - - - -
Infrastructure improvement - - - -
Committed to:

Public safety program - - - -
Assigned to:

Contingency fund 400,000 - - -
Subsequent years expenditures 2,296,442 - - 430,088
Total fund balance 2,696,442 10,275,530 7,100,280 430,088 Total liabilities, deferred inflows of
resources, and fund balance $ 13,542,063 3,352,935 $ 8,532,884 $ 9,630,088 $ (Continued)
126

City of San Luis Obispo, California
Combining Balance Sheets
Nonmajor Governmental Funds
June 30, 2023
Capital Projects Funds
Parkland
Development
Impact FeeCitywide OASP Park MASP Park
OASP
Transportation
Impact Fee
Assets
Cash and investment $ 851,649 $ 2,360,686 $ 1,683,185 $ 1,404,131 Accounts receivable - - - -
Tax receivable - - - -
Accrued interest receivable 73,745 7,653 5,449 4,546
Cash held by fiscal agent - - - -
Loans receivable 446,826 - - -
Total assets $ 1,372,220 $ 2,368,339 $ 1,688,634 $ 1,408,677 Liabilities, Deferred Inflows of
Resources and Fund Balance
Liabilities:

Accounts payable - $ 44,483 $ - $ - $
Accrued liabilities - - - -
Unearned revenue - - - -
Total liabilities - 44,483 - -
Deferred Inflows of Resources:

Unavailable revenue 517,861 - - -
Fund balance:

Nonspendable - - - -
Restricted for:

Debt service - - - -
Public safety program - - - -
Transportation projects - - - -
Affordable housing programs - - - -
Impact fee programs 854,359 2,323,856 1,688,634 1,408,677 Parkland development programs - - - -
Public art programs - - - -
Tourism programs - - - -
Infrastructure improvement - - - -
Committed to:

Public safety program - - - -
Assigned to:

Contingency fund - - - -
Subsequent years expenditures - - - -
Total fund balance 854,359 2,323,856 1,688,634 1,408,677 Total liabilities, deferred inflows of
resources, and fund balance $ 2,368,339 1,372,220 $ 1,688,634 $ 1,408,677 $ (Continued)
127

City of San Luis Obispo, California
Combining Balance Sheets
Nonmajor Governmental Funds
June 30, 2023
Capital Projects Funds
Fire Impact Fee
Police Impact
Fee
Park
Improvement
Impact FeeCitywide
SLR
Transportation
Impact Fee
Assets
Cash and investment $ 213,908 $ 236,214 $ 1,417,369 $ 1,286,424 Accounts receivable - - - -
Tax receivable - - - -
Accrued interest receivable 9,850 4,708 8,219 3,984
Cash held by fiscal agent - - - -
Loans receivable 78,276 56,781 82,807 -
Total assets $ 302,034 $ 297,703 $ 1,508,395 $ 1,290,408 Liabilities, Deferred Inflows of
Resources and Fund Balance
Liabilities:

Accounts payable - $ - $ - $ 1,000 $
Accrued liabilities - - - -
Unearned revenue - - - -
Total liabilities - - - 1,000
Deferred Inflows of Resources:

Unavailable revenue 87,427 60,695 86,673 -
Fund balance:

Nonspendable - - - -
Restricted for:

Debt service - - - -
Public safety program - - - -
Transportation projects - - - -
Affordable housing programs - - - -
Impact fee programs 214,607 237,008 1,421,722 1,289,408 Parkland development programs - - - -
Public art programs - - - -
Tourism programs - - - -
Infrastructure improvement - - - -
Committed to:

Public safety program - - - -
Assigned to:

Contingency fund - - - -
Subsequent years expenditures - - - -
Total fund balance 214,607 237,008 1,421,722 1,289,408
Total liabilities, deferred inflows of
resources, and fund balance $ 297,703 302,034 $ 1,508,395 $ 1,290,408 $ (Continued)
128

City of San Luis Obispo, California
Combining Balance Sheets
Nonmajor Governmental Funds
June 30, 2023
Capital Project Debt Service
Funds Fund
Public Safety
Equipment
Replacement
Fund Debt Service
Total Nonmajor
Governmental
Funds
Assets
Cash and investment $ 713,037 $ 1,719,922 $ 46,053,262
Accounts receivable - - 305,251
Tax receivable - - 186,356
Accrued interest receivable - 3,061,054 -
Cash held by fiscal agent - 421,509 421,509
Loans receivable - 12,066,069 -
Total assets $ 2,141,431 713,037 $ 62,093,501 $
Liabilities, Deferred Inflows of
Resources and Fund Balance
Liabilities:

Accounts payable 71,499 $ - $ 651,743 $
Accrued liabilities - - 6,280
Unearned revenue - - 11,113,744
Total liabilities 71,499 - 11,771,767
Deferred Inflows of Resources:

Unavailable revenue - - 6,124,933
Fund balance:

Nonspendable - - -
Restricted for:

Debt service - 2,141,431 2,141,431
Public safety program - - 68,456
Transportation projects - - 7,567,001
Affordable housing programs - - 11,023,649
Impact fee programs - - 10,519,226
Parkland development programs - - 3,205,116
Public art programs - - 1,269,844
Tourism programs - - 1,426,625
Infrastructure improvement - - 157,805
Committed to:

Public safety program 641,538 - 641,538
Assigned to:

Contingency fund - - 900,000
Subsequent years expenditures - - 5,278,534
Total fund balance 641,538 2,141,431 44,196,801
Total liabilities, deferred inflows of
resources, and fund balance $ 2,141,431 713,037 $ 62,093,501 $ 129